Based on performance in the year so far, it looks like SciSys - SITS supplier to the government, space and broadcast & media sectors - is on track for its H1 results to be consistent with market expectations for the full year. Consensus forecasts are for a 7% revenue increase and an improvement in pre-tax profits from £510K to £2.2 million.
However, while the trading update is positive, SciSys continues to see “deferrals of potential project and programmes” (see Scisys – tough times focus the mind). Note, the word “potential”, i.e. we are not even talking about projects with a certainty of going ahead at some point. And this remains common across UK Government IT. Every supplier we talk to refers to an increase in activity in the sector. But all that's really happened is that we've moved from a phase where customers were reluctant to even talk about new projects to one where there are lots of early discussions about exciting things that have the potential to make a real impact. But in reality, most of these “discussions” are unlikely to result in actual business until well into next year.
In the meantime, SciSys is in the fortunate position of having more than 50% of its revenues derived from outside the UK. And it continues to do all it can to make its financial situation as robust as possible. Indeed, today, it has announced that it will use surplus cash (plus a couple of loans) to purchase the freehold of its headquarters building. The move will positively impact on future profitability and SciSys will also look to install other tenants to generate additional income.