Systems Limited targets strategic M&A expansion as growth strategy

Mettis Global reported that Systems Limited (PSX: SYS) sees its recent Confiz acquisition as the key driver of earnings growth starting in CY27. Management, at the 1HCY26 corporate briefing, called 2026 a foundational integration year for Confiz, which already accounted for 25% to 30% of North American growth in the first half. It is also targeting enterprise AI and data engineering demand across key markets.

The roadmap centres on cross-selling, integrating operations and pursuing selected overseas acquisitions in North America and Europe, the UK in particular. Management said GCC governments' digital initiatives, such as the UAE's move toward autonomous AI workflows, are lifting demand for large data and cloud projects. A rupee weakening of 2% to 3% would, by management's estimate, lift yearly earnings by about $10 million, given that 94% of revenue is in foreign currency while 56% of operating costs are in rupees.

Half-year consolidated revenue rose 35% to 36% year on year to Rs49.7 billion, while gross margin held at 25.5%. Management targets a 28% to 29% margin as synergies come through. The Middle East and Africa stayed the largest contributor, with over 50% of turnover growing 36%, while North America rose 36% to 39% and Asia Pacific revenue jumped more than 84% on a one-off project expected to normalise over the year. Pakistan operations' gross margin climbed to 17%, compared with 8.9% a year earlier.