Systems Limited Announces 5-for-1 Stock Split to Boost Market Liquidity

Systems Limited has announced a 5-for-1 stock split, reducing its share value from Rs10 to Rs2. The company’s Board of Directors approved the move, aligning with Section 85(1)(c) of the Companies Act, 2017. However, shareholder approval is still required for final implementation.

This means that for every share currently held, investors will receive five. As per Arif Habib Limited (AHL), this will increase the total number of ordinary shares from 292.9 million to 1.46 billion. The initiative is aimed at making shares more accessible to investors and improving market liquidity.

In addition to the stock split, Systems Limited disclosed its financial results for the year ending December 31, 2024. The company reported Rs67473.02 million in revenue, up from Rs53435.48 million in 2023. Operating profit from core business activities rose by 4% to Rs8149.95 million. However, net profit declined by 14% to Rs7460.01 million, primarily due to an exchange loss of Rs264.47 million compared to a substantial exchange gain of Rs2257.67 million in 2023.

Lower margins in Q4, driven by increased one-off trading and a more conservative Expected Credit Losses (ECL) methodology, impacted overall performance. This adjustment is expected to yield benefits in 2025. Since FY 2020, the company has maintained a 50% CAGR in revenue, led by IT services. Despite margin pressures, Systems Limited continues to outperform the market with an EBITDA + Growth rate of 45%.

On Monday, the company’s share price closed at Rs571.72, reflecting a 1.44% decline, with 1.015 million shares traded.