11 December 2020
By Maynard Paton
Results summary for System1 (SYS1):
- A pandemic-disrupted first half, albeit with headline numbers that disguised a remarkable return to profitability during Q2.
- Revenue improvements within the Communications and UK segments suggest the tie-up with ITV is working.
- A bold pricing structure, greater ambition clarity and even improved film-marking may explain why adidas has become a client.
- The accounts are in reasonable shape, with significant net cash, positive cash generation and perhaps a decent profit margin following various cost savings.
- Extrapolating the Q2 profit leads to a lowly 8x multiple and intriguing recovery/upside possibilities. I have bought more shares.