SysGroup has successfully raised gross proceeds of £11 million through a recently closed oversubscribed placing and subscription. The London-listed company, which moved its headquarters from Liverpool to Manchester earlier this year, specializes in cloud, data, and security services. It has positioned itself as a technology partner to SMEs willing to embrace artificial intelligence, with a growing pipeline of opportunities in this area.
The placement has raised gross proceeds of £8.9m through the issuance of new ordinary shares to investors, while the subscription has raised an additional £2.1m through the subscription of new ordinary shares by directors, one manager and certain sophisticated investors. SysGroup has also given all shareholders the chance to subscribe for further shares, to raise up to £500,000.
The company aims to use approximately £2m of the proceeds to fund an internal AI-driven transformation project, while an additional £2m will be used to meet the contingent earnout payment due in August 2024 in relation to the acquisition of Truststream Security Solutions. The remaining amount will bolster the balance sheet, enabling SysGroup to provide ongoing working capital as it continues to drive growth, as well as liquidity for M&A opportunities.
“We are pleased with the level of support from our existing shareholders and are delighted to welcome a number of new investors to the register who share our vision for the business in its next stage of growth,” said Heejae Chae, executive chairman. “We trust that the retail offer provides smaller shareholders the opportunity to participate also.”
For the year ended 31st March 2024, the group’s revenues increased by 5% to £22.7m, driven by a significant 14% increase in the second half of the year, and it expected to report adjusted EBITDA of approximately £2m. SysGroup’s share price this morning climbed to 35.5p following the news. However, while it reached 49p during the COVID pandemic, it dropped to 20p for two months in late 2022 before bouncing back.
