[Podcast] SYSTEM1 With Mark Atkinson And Maynard Paton

23 October 2022
By Maynard Paton

I have recorded another episode of The Private Investor’s Podcast with my good friend Mark Atkinson. We talked about System1 and the investment potential of testing adverts:

We cover:

  • My fourth System1 AGM and my share purchases.
  • What the company does: testing television adverts and marketing ideas.
  • ‘System 1’ and ‘system 2’ thinking within broadband adverts.
  • Validation of the company’s service through the partnership with ITV.
  • The transition from ad-hoc consultancy work to automated data services.
  • The competitive advantage gained through years of accumulating advert data.
  • The chairman’s handling of the AGM.
  • Microphones, voting cards and special lunches. 
  • AGM formalities and Section 319A of the Companies Act.
  • Protest votes against two non-execs and the strategic review. 
  • The company’s podcast becoming a sales tool.
  • Mark’s verdict and closing remarks.

Extra links:

Happy listening!

Maynard Paton

PS: The AGM took place on 28th September 2022 and the podcast recording took place on 21st October 2022.

Disclosure: Maynard owns shares in System1.

6 thoughts on “[Podcast] SYSTEM1 With Mark Atkinson And Maynard Paton”

  1. Great balanced review Maynard & Mark.

    I watched the AGM on Investor Meet and was disappointed at the Chairman’s attitude.

    What’s the point of an AGM if there is a reluctance to answer shareholder questions?

    Mark made a very good observation that John Kearon, as a marketing man, probably isn’t the ideal fit for the CEO role. I share that view.

    There is clearly a lot more going on behind the scenes. Maybe putting the business up for sale turns out to be the recommendation of the strategic review. Meantime if the interim results are bad, triggering further falls if the share price, I wonder what level an eventual sale of the business might achieve? Maybe less than current market cap?

    I may regret holding on to see what the outcome of the strategic review is but I can understand the temptation for existing shareholders to exit ahead of that to limit their potential downside.

    Please keep your excellent podcasts coming.


    • Thanks Peter. All fair comment, and no guarantee any sale will occur or exceed the current market cap. Now trying to record a podcast every month.

  2. Interims released today show an adjusted loss of £0.4m.

    Additionally there is an update on the company strategy review. John Kearon, the founder/CEO, is to base himself in USA to concentrate on building US sales. Also he is stepping down to become President with the existing COO to replace him as CEO and the tender offer has ben cancelled (as expected).

    I agree with the CEO vacating his position as I have never been impressed with him as a strategic leader. However, simply handing over to an internal COO (who, arguably, may not be ideal CEO material) and elevating himself to be President suggests that JK will still be pulling the strings.

    This doesn’t sound a very inspiring strategic review outcome and the market doesn’t like it either with SP down 12% today.

    With an increased headcount / cost base and reduced revenue it appears they are just crossing their fingers and hoping JK performs a sales miracle in the US.

    All very underwhelming.

    I wonder how the activist investor will react to this? I can’t imagine he was in support of such a damp squib.

    Kind regards

    Peter Broughton

    • Hi Peter,

      Apologies for the very late reply. Agreed, the outcome of the strategic review was underwhelming and ‘damp squib’ is apt from my understanding from sources close to the activist investors. I think the JK role change ought to be a positive, as he can focus on sales and not get distracted by other CEO activities (e.g. engaging with the City). But he will remain in charge. Not quite sure about the new focus on digital ads which may involve serving much smaller companies; I had thought SYS1 had been making good headway with attracting blue-chip clients such as Aldi, Boots, Tesco etc, and the partnership with ITV. I expect the AGM this year will attract more protest votes if JK’s stint in the USA does not return the necessary top-line improvement.


  3. Hi Maynard,
    Hope you’re well. I took in the IMC Capital Markets Presentation this week and was very pleasantly surprised, the strategic review appears to have been more than the ‘damp squib’ it felt last year. It feels they have finally got the exec team in the right roles to progress the business. The new Chair seems to be adding value, JK enjoying his role in the US and James Gregory appears to be an execution geek, which is exactly what I think is required now the data products are heading towards being fully formed.
    I was encouraged by the x3 expansion in advertising platform partners and the new blue chips clients they suggest they’re attracting in the US along with the forthcoming addition of digital and audio channels to SYS1’s data platform.
    The team looked relaxed and confident (to my eyes) so I’m certainly feeling more upbeat regarding the company than I was 3 months ago.
    I look forward to Q4 numbers which don’t really have to pull up any trees to hit FY revenue f/cs (£5.6m compared to £6.2m in Q3) although it’s clear costs will have risen with thenews hires recruited in H2.
    I’d be interested in your views from the presentation?

    • Hi Patrick,

      Thanks for the comment.

      Certainly the CMD slides were more positive than those accompanying the preceding H1 results; this time they reinstated the 7 ‘reasons to believe’ and that 10% market share ambition! Plus lots of positive talk on US contract wins, the pilot with a global social-media platform, and surging inbound enquiries etc.

      But the recent statement shows the company burning £2m or so cash during the last year or so, and no real commentary was made about returning to profit — apart from sales having to increase. Various questions I submitted were not asked, and after the AGM (where questions did not seem welcome either), I am a little less positive than you. Interesting you mention the chairman. He said he ‘instigated’ the strategic review on his appointment as chairman, but the review was launched one month before that appointment. And at the AGM, the previous chairman admitted the review was prompted by outside shareholders.



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