IBEX Global Solutions Plc ( IBEX or the Company or the Group ) Interim Results for the Six Months Ended 31 December 2013

Transcription

1 24 March 2014 IBEX Global Solutions Plc ( IBEX or the Company or the Group ) Interim Results for the Six Months Ended 31 December 2013 IBEX Global Solutions Plc (AIM: IBEX), a leading provider of contact centre services and other business process outsourcing (BPO) solutions, is pleased to announce its interim results for the six months 31 December Financial Highlights: Total Group revenue up 35.4% to $91.0 million (2012: $67.3 million) Adjusted gross profit (excluding depreciation and amortisation) of $15.6 million (2012: $10.7 million) Adjusted gross profit margin of 17.1% (2012: 15.9%) Adjusted Earnings before Interest, Depreciation, Amortisation and Share-based payments (EBITDA) of $4.5 million (2012: $2.1 million) Dividend declared corresponding to the above results of $1.25 million Net assets of $22.3 million as of 31 December 2013 Net debt of $10.9 million as of 31 December 2013 (30 June 2013: $2.9 million) Operational Highlights: Customer base enhanced through extension of existing relationships and new business wins New site facilities opened in New Braunfels (Texas), Davao (Philippines) and Paranaque (Philippines) within the last six months Completed technology and regulatory compliance requirements with the Health Insurance Portability and Accountability Act (HIPPA) Privacy Rules Number of employees as of 31 December 2013 in excess of 9,000, up approximately 25% on the same period last year Steve Kezirian, CEO of the Group, commented: In this current fiscal year, we have continued our extraordinary growth and delivered half year revenues ahead of what we had expected at the time of the IPO. The opening of three new facilities in the past six months demonstrates our clients continued belief in IBEX s value proposition and overall level of service. We believe our employee-focused, client-centric approach to the BPO industry will continue to differentiate us in the marketplace and allow us to accelerate market share growth for the foreseeable future. For further information, please visit or contact: IBEX Global Solutions Plc Steve Kezirian, CEO Karl Gabel, CFO Tel: Liberum Capital Limited Nominated Adviser and Joint Broker Steve Pearce Richard Bootle Joshua Hughes Cenkos Securities PLC Joint Broker Liz Bowman Camilla Hume Tavistock Communications John West Matt Ridsdale Andrew Dunn Tel: Tel: Tel:

2 Chairman s Statement I am pleased to present this interim report as Chairman of IBEX Global Solutions Plc. Buoyed by its admission to AIM and validated by its core client base, the Company has executed on its rapid growth strategy through the first six months of Thanks to the efforts of the Company s management and dedicated team of employees, IBEX has strengthened its client relationships and continued to deliver on the plan outlined at the time of the IPO. Financial Results IBEX maintained its powerful growth momentum during the six-month period to 31 December 2013 and experienced a significant increase in revenue and EBITDA performance compared to the same period in the prior fiscal year. Revenue was $91.0 million (2012: $67.3 million) and adjusted EBITDA was $4.5 million (2012: $2.1 million), reflecting growth of 35.4% and 116.3%, respectively. Profit before tax, excluding a one-time exceptional cost related to refinancing the Company s credit facility, was $0.5 million (2012: loss before tax of $0.2 million). The significant improvement in performance compared to the previous year was primarily due to an increase in operating profits as the professional relationships with several key accounts continue to deepen, with impressive program launches in the United States, Philippines and Pakistan. On an operating basis, the business continues to have positive cash flows after on-going interest charges and capital expenditures and is paying a dividend of $1.25 million to reflect its cash generation. I would like to thank the management and staff of our Company for their extraordinary efforts and continued dedication to IBEX s clients. These efforts continue to deliver strong client satisfaction and, in turn, have resulted in industry-leading levels of revenue growth. As a board, we are grateful for our employees tireless work, and I look forward to supporting the management in its continued success moving forward. Zia Chishti Chairman

3 Chief Executive Officer s Review I am pleased to report IBEX s interim results for the first half of fiscal year Our Company delivered significant revenue growth, ahead of management s expectations, and continues to make good progress on improving the operating leverage in the overall business. Consistent with our plan outlined at IPO, we have developed further our relationships with existing clients and delivered new business wins essential for the long-term diversification of our revenue base. Major customer wins included a key contract with a leading global wireless technology and systems integrator, demonstrating the Company s ability to rapidly deploy a global solution across three countries and six locations. In addition, the Company leveraged its core expertise in performance marketing to broaden its reach into the healthcare vertical, launching a new program in the dental field for a leading customer acquisition platform. Geographically, our core United States and Philippines service delivery locations have enjoyed continued growth during the period. Our clients continue to believe in a bl onshore-offshore delivery solution, allowing IBEX to accelerate its growth in our core US and Philippines markets. Stability in IBEX s other service delivery locations (Senegal, the UK and Pakistan) demonstrates the Company s ability to deliver high-quality service for discerning clients across a global footprint. IBEX MENA ( Middle East North Africa ), headquartered in Dubai and launched during the last quarter, has shown early signs of success, and we believe it will leverage our operational success globally and further differentiate IBEX within the industry. The Company will continue to expand its geographic footprint, either organically or via best-fit acquisitions, to deepen its relationship with clients, extend its reach into new markets, and broaden its competitive advantages in the marketplace. Our clients value the Company s global footprint and believe IBEX is well-positioned to offer customised solutions in multiple languages and at varying price points. In addition, it is my pleasure to welcome Michael Sternklar to the IBEX Leadership team as the Executive Vice President, Client Services. Michael is an experienced business leader with a track record of leading healthy, profitable operational organizations. He has 30 years of experience in the HR/Benefits Outsourcing industry, having most recently led Mercer's US Benefits Outsourcing business (a $300 million+ operation). Prior to joining Mercer, he spent five years at Fidelity Investments in a number of leadership roles, including EVP of Client Services, Sales and Communications for its HR services business and EVP, General Manager for its HR/Payroll Outsourcing business. Previously, he was COO and General Manager for Unifi Network, a division of PricewaterhouseCoopers which provides HR and benefits outsourcing services to the Fortune 500 market and ran the outsourcing business for Kwasha Lipton.

4 Financial Review In measuring the performance of the Company, the Board uses the following principal Key Performance Indicators (KPIs): Revenue, Cost of Sales, Selling, General and Administrative Expenses (SG&A) and EBITDA. Below is the comparison of the results between the six months 31 December 2013 and December December 2012 Continuing Operations $ 000s $ 000s Revenue 91,046 67,252 Cost of sales 77,194 57,714 Less depreciation and amortisation 1,743 1,174 75, % 56, % Adjusted gross profit 15, % 10, % SG&A 11,274 8,734 Less depreciation and amortisation , % 8, % Adjusted EBITDA 4, % 2, % Revenue for the period increased by 35.4% to $91.0 million (compared to 2012: $67.3 million), driven primarily by increasing business from our established client base. Adjusted EBITDA rose 116.3% to $4.5 million (2012: $2.1 million), principally due to the significant growth in revenue and operating leverage in the business. The Group was also able to increase its gross margin to 17.1% for the six months 31 December 2013, up from 15.9% in the same period last year. Profit before tax, excluding a one-time exceptional cost related to refinancing the Company s credit facility, was $0.5 million (2012: loss before tax of $0.2 million). The significant improvement was primarily due to an increase in operating profits as professional relationships with several key accounts continue to be strengthened with impressive program launches in the US, Philippines and Pakistan. Loss per share was cents compared to cents in the same period last year. Cash in bank and on hand was $12.6 million as of 31 December 2013 (30 June 2013: $10.6 million) reflecting the cash generation in the business as well as its efficient collection of receivables. Net assets as at 31 December 2013 amounted to $22.3 million, which is unchanged from 30 June Net debt (cash and cash equivalents less third party borrowings) as of 31 December 2013 amounted to $10.9 million which is higher by $8.0 million than the net debt as of 30 June 2013 ($2.9 million). The increase in net debt was primarily driven by capital leases associated with facilities in the US and the Philippines. Dividend The Company has declared a dividend payment of $1.25 million corresponding to the reporting period, and reflects the Company s progressive dividend policy of paying dividends from recurring cash flows. The Company is strongly cash generative on an operating basis, and generates cash flow on a recurring basis in excess of its reported consolidated net income, given that its net income reflects several expenses that are non-cash or non-recurring in nature.

5 Outlook As previously reported, the business has continued to see strong support from its existing client base and has been given several opportunities to grow specific client accounts beyond the Board's original expectations. To support this additional growth and capitalise on the successful execution across multiple relationships and geographies, the Company invested in physical infrastructure and workforce capacity in anticipation of servicing these contracts. Three new facilities (one in the US and two in the Philippines), coupled with expansion of a current facility in Metro Manila, provided IBEX with 2,000 additional workstations necessary to support this growth. Due to changes in timing related to certain program launches, the Board now expects these contracts to generate revenue in the first half of the next fiscal year rather than this year as previously anticipated. The incremental costs borne by the Company this year, together with the delay in revenues into next year, will result in Group revenues and earnings being below the Board's expectations for the year 30 June Whilst the timing impact on full year results is unfortunate, the Board is pleased to have mobilized its resources as planned to service this additional business and is confident of further success with these and other clients in the future. Our team continues to execute on the Board s growth strategy while continuing to meet the needs of existing clients and launching new client programmes across our global footprint. Companies in nearly every sector continue to feel the pressure of global macroeconomic issues, and look to IBEX for help in providing critical resources and systems at scale in the most efficient operating environment possible. Deploying our technology and human capital will continue to be the cornerstone of our strategy as we continue to develop in 2014 and beyond. Steve Kezirian Chief Executive Officer

6 Independent review report to IBEX Global Solutions Plc Introduction We have been engaged by the Company to review the financial information in the half-yearly financial report for the six months 31 December 2013 which comprises the condensed consolidated statement of comprehensive income, the condensed consolidated statement of financial position, the condensed consolidated statement of changes in equity, the condensed consolidated statement of cash flows and the related notes 1 to 19. We have read the other information contained in the half yearly financial report which comprises only the interim results announcement, chairman's statement and chief executive officer's review and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements. This report is made solely to the company in accordance with guidance contained in ISRE (UK and Ireland) 2410, 'Review of Interim Financial Information performed by the Independent Auditor of the Entity'. Our review work has been undertaken so that we might state to the Company those matters we are required to state to them in a review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company, for our review work, for this report, or for the conclusion we have formed. Directors' responsibilities The half-yearly financial report is the responsibility of, and has been approved by, the directors. The AIM rules of the London Stock Exchange require that the accounting policies and presentation applied to the financial information in the half-yearly financial report are consistent with those which will be adopted in the annual accounts having regard to the accounting standards applicable for such accounts. The financial information in the half-yearly financial report has been prepared in accordance with the basis of preparation in Note 2. Our responsibility Our responsibility is to express to the Company a conclusion on the financial information in the half-yearly financial report based on our review. Scope of review We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity', issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Conclusion Based on our review, nothing has come to our attention that causes us to believe that the financial information in the half-yearly financial report for the six months 31 December 2013 is not prepared, in all material respects, in accordance with the basis of accounting described in Note 2. GRANT THORNTON UK LLP AUDITOR LONDON 22 March 2014

7 Condensed Consolidated Statement of Comprehensive Income For the six months 31 December 2013 Year (un-audited) (un-audited) (audited) Notes Continuing operations Revenue 91,046 67, ,506 Cost of sales 77,194 57, ,729 Gross profit 13,852 9,538 20,777 Selling, general and administrative expenses 11,274 8,734 18,512 Share based payments Exceptional items ,700 Total selling, general and administrative expenses 12,086 8,776 35,886 Operating profit / (loss) 1, (15,109) Other expenses Finance costs 5 (940) (934) (1,924) Exceptional finance cost 6 (826) - - Exchange loss (318) - - Loss before taxation (318) (172) (17,033) Income tax (expense) / benefit (40) (65) 1,513 Net loss for the period attributable to the equity holders of the holding company (358) (237) (15,520) Other comprehensive income / (loss) Foreign currency translation adjustment 30 (46) 344 Total comprehensive loss attributable to equity holders of the holding company (328) (283) (15,176) Loss per share attributable to equity holders of the holding company Basic/diluted loss per share 7 (0.009) (0.006) (0.480) The accompanying notes are an integral part of this interim condensed consolidated financial information.

8 Condensed Consolidated Statement of Financial Position 31 December 2013 Assets As of As of As of December December 30 June Notes (un-audited) (un-audited) (audited) Non-current assets Goodwill 8,644 8,644 8,644 Other intangible assets Property, plant and equipment 8 9,791 3,518 4,005 Deferred tax asset Other non-current assets 9 4,353 2,283 3,846 Total non-current assets 24,290 15,057 17,976 Current assets Trade and other receivables 10 30,655 24,653 39,250 Deferred expenses Due from affiliates 3,363 13,871 1,762 Cash and cash equivalents 11 12,617 2,371 10,651 Total current assets 47,232 41,802 52,504 Total assets 71,522 56,859 70,480 Equity and liabilities Equity attributable to owners of the parent Ordinary shares 602 1, Share premium 14,479 40,500 14,479 Capital redemption reserve 48,530-48,530 Other reserves (79) Accumulated loss (41,553) (25,912) (41,195) Total equity 22,348 16,869 22,337 Non-current liabilities: Deferred tax liabilities Deferred revenue - non-current portion Obligation under finance lease - non-current portion 12 4, Due to affiliates - long portion 1,615 3,757 1,535 Other non-current liabilities 13 1,724 1,064 1,292 Total non-current liabilities 8,492 6,307 3,635 Current liabilities: Line of credit 14 17,036 14,597 19,888 Obligation under finance lease - current portion 12 1, Trade and other payables 15 20,925 17,662 21,689 Deferred revenue - current portion ,158 Due to affiliates - current portion Total current liabilities 40,682 33,683 44,508 Total liabilities 49,174 39,990 48,143 Total equity and liabilities 71,522 56,859 70,480 The accompanying notes are an integral part of this interim condensed consolidated financial information.

9 Condensed Consolidated Statement of Changes in Equity For the six months 31 December 2013 Issued, subscribed and paid-up capital Other reserves Employee share option Foreign currency translation Deferred shares Share premium Capital redemption reserve plan reserve Accumulated loss Total equity $ 000's $ 000's $'000's $'000's $000's As at 1 July ,464-39,850-1,639 (814) (25,675) 16,464 Comprehensive income for the half year Net loss (237) (237) Other comprehensive loss (46) - (46) 1,464-39,850-1,639 (860) (25,912) 16,181 Transactions with owners Issue of share capital Employee share based payment options As at 31 December 2012 (un-audited) 1,464-40,500-1,677 (860) (25,912) 16,869 Comprehensive income for the half year Net loss (15,283) (15,283) Other comprehensive income (15,283) (14,969) Transactions with owners Reversal of opening reserves (1,464) - (40,500) (41,964) Transfer from ESOP to APIC due to re-organisation (1,677) - - (1,677) Shares issue on incorporation 49, ,020 Deferral of shares (48,530) 48, Repurchase of shares - (48,530) - 48, Shares issued at par (IPO) Share premium (net of IPO) , ,479 Employee share based payment options (862) - (26,021) 48,530 (1,210) ,437 As at 30 June 2013 (audited) ,479 48, (546) (41,195) 22,337 Comprehensive income for the half year Net loss (358) (358) Other comprehensive income (358) (328) Transactions with owners Issue of share capital Employee share based payment options As at 31 December 2013 (un-audited) ,479 48, (516) (41,553) 22,348 The accompanying notes are an integral part of this interim condensed consolidated financial information.

10 Condensed Consolidated Statement of Cash Flows For the six months 31 December 2013 Cash flows from operating activities Note (un-audited) (un-audited) (audited) Net cash generated from / (used in) operating activities 17 8,926 (728) (10,457) Interest paid (940) (934) (1,924) Taxes paid (69) (153) (340) Net cash flow generated from / (used in) operating activities 7,917 (1,815) (12,721) Cash flows from investing activities Purchases of property and equipment (1,291) (707) (1,498) Additions to intangible assets - - (88) Proceeds for sale of assets Net cash used in investing activities (1,248) (707) (1,576) Cash flows from financing activities Net (repayment) / receipt on line of credit (20,714) 2,614 7,905 Net receipt on line of credit 17, Grants received Investment from parent company IPO investment ,624 Payments on capital lease obligations (1,089) (303) (914) Net cash (used in) / provided by financing activities (4,767) 3,018 22,508 Effect of exchange rate change on cash and cash equivalents 64 (72) 493 Net increase in cash and cash equivalents 1, ,704 Cash and cash equivalents, beginning of period 10,651 1,947 1,947 Cash and cash equivalents, end of period 12,617 2,371 10,651 The accompanying notes are an integral part of this interim condensed consolidated financial information.

11 Notes to the Condensed Consolidated Financial Information For the six months 31 December Nature of the business IBEX Global Solutions Plc (the Holding Company) was incorporated on 26 March 2013 as IBEX Global Solutions Limited and was re-registered as a public limited company on 4 June The Holding Company was incorporated under the Companies Act 2006 with a financial year end of 30 June. On 28 June 2013, the Holding Company was admitted to trade on the Alternative Investment Market (AIM), a market operated by the London Stock Exchange Plc. IBEX Group (the Group) is a global portfolio of companies in the contact centre and related business process outsourcing (BPO) business, with operations in the United States, Philippines, United Kingdom, Pakistan and Senegal. Service offerings include customer care support, business and consumer inbound and outbound telesales and technical support services. IBEX Group also offers enabling technology solutions including Interactive Voice Response (IVR). The IBEX Group consists of: Holding company IBEX Global Solutions Plc (Holding company) Location 31 December 2013 Percentage of holding in ordinary shares Subsidiaries Location % Reporting year Lovercius Consultants Limited (IBEX Cyprus) Cyprus 100% June 2014 IBEX Global Europe S.a.r.l. (IBEX Luxembourg) Luxembourg 100% June 2014 TRG Customer Solutions, Inc. (trading as IBEX Global Solutions, Inc.) USA 100% June 2014 TRG Customer Solutions (Canada) Inc. Canada 100% June 2014 TRG Marketing Solutions Limited UK 100% June 2014 Virtual World (Private) Limited Pakistan 100% June 2014 IBEX Philippines Inc. (formerly TRG Philippines Inc.) Philippines 100% June 2014 IBEX Global Solutions (Philippines) Inc. (formerly TRG Global Solutions Inc.) Philippines 100% June 2014 TRGCS Philippines Inc. Philippines 100% June 2014 The Resource Group Senegal SA Senegal 100% December 2013 IBEX Global Solutions (Private) Limited Pakistan 100% June 2014 IBEX Mena Dubai 100% June 2014 UK 2. Basis of preparation The interim condensed consolidated financial information is for the six months 31 December This interim condensed consolidated financial information does not constitute statutory financial statements as defined in the Companies Act These half yearly financial statements have been prepared on a consistent basis and format with the Group's annual consolidated financial statements for the year 30 June These half yearly financial statements have been prepared under the going concern assumption.

12 Notes to the Condensed Consolidated Financial Information For the six months 31 December 2013 On 31 March 2013, IBEX Global Solutions Plc acquired 100% ownership of various subsidiaries from The Resource Group International Limited (TRGI) and issued its shares in exchange. Prior to this transaction, TRGI directly controlled each of the subsidiaries and, by virtue of its controlling interest in IBEX Global Solutions Plc, continues to control the subsidiaries. Accordingly, the Holding Company and its subsidiaries are presented as if they have been legally been a group of companies for all periods presented. 3. Ultimate parent undertaking and controlling entity The ultimate parent entity is TRGI incorporated in Bermuda. The parent company of the largest group to include the IBEX Group in its consolidated financial statements is TRGI and its financial statements are not publically available. The ultimate controlling party of the Group are the directors of TRGI. 4. Accounting policies The interim condensed consolidated financial information has been prepared in accordance with the accounting policies applied in the Group s annual consolidated financial statements as of and for the year 30 June The Group financial statements for the year 30 June 2013 were prepared under International Financial Reporting Standards as adopted by European Union. The policies have been consistently applied to all the periods presented, unless otherwise stated. 5. Finance costs Year Interest on bank borrowings ,774 Factoring fees Finance charges on leased assets Bank charges , Exceptional items 6.1 Operating expense Year Cost related to the admission to London Stock Exchange - - 1,030 Affiliates balances written off , ,700

13 Notes to the Condensed Consolidated Financial Information For the six months 31 December Other expense Year Early termination fees of Capital Source Bank Earnings per share (a) Basic Basic loss per share is calculated by dividing the loss attributable to equity holders of the Holding Company by the weighted average number of ordinary shares in issue during the period. Year Group Loss attributable to equity holders of the holding company (358) (237) (15,520) Weighted average number of ordinary shares in issue 39,554 39,554 32,310 (0.009) (0.006) (0.480) Prior year lost per share is computed on a pro forma basis, for the purpose of consistency with the basis of preparation at note 2 and in accordance with the Group's accounting policies. (b) Diluted Diluted loss per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. As of 31 December 2013, 31 December 2012 and 30 June 2013, the Holding Company had no dilutive potential ordinary shares due to its losses. 8. Property, plant and equipment The gross carrying amounts and accumulated depreciation of property, plant and equipment are shown below. Cost 28,760 19,883 21,182 Accumulated depreciation (18,969) (16,365) (17,177) 9,791 3,518 4,005

14 Notes to the Condensed Consolidated Financial Information For the six months 31 December 2013 The reconciliation of the carrying amounts of property, plant and equipment is shown below. Year Balance at beginning of period 4,005 3,991 3,991 Additions 7, ,177 Disposals (43) - (6) Depreciation (1,872) (1,196) (2,125) Foreign currency adjustment (23) 20 (32) Balance at end of period 9,791 3,518 4, Other non-current assets Other non-current assets consist of the following: Long term deposits 1,394 1,511 1,525 Long term deferred expenses 1, Long term prepayment 825-1,182 Other 1, ,353 2,283 3,846 On 31 March 2013, IBEX Global Solutions Limited entered into a contract of Standard Terms and Conditions with SATMAP Incorporated ("SATMAP"), subsequently am on 31 March 2013 and April 2013 (the contract and the two amendments collectively, "Agreement"). Under the Agreement, the Holding Company (a) issued additional share capital of $1,000,000 to TRGI, direct parent of the Holding Company and indirect parent of SATMAP; and (b) issued a note in the amount of $1,000,000 payable to SATMAP. In exchange, the Company received an asset of $2,000,000 in dedicated data services (up to 2000 call-center seats) from SATMAP to be amortised over 120 months. The asset represents an advance payment for the proprietary artificial intelligence and pattern recognition technology invented and developed by SATMAP ( SATMAP Services ). The SATMAP Services integrate with call-center telephony and agent staffing to connect in real time customers with agents most likely to produce improved performance and service in call outcomes for such customers. As of 14 October 2013, the Holding Company (with the consent of SATMAP) assigned all of its rights and obligations under the Agreement and the Note to TRG Customer Solutions, Inc. d/b/a IBEX Global Solutions ( IBEX US ), which assumed all such rights and obligations. The assignment and assumption of the Agreement and the Note enables IBEX US to use the SATMAP Services in its call centers. IBEX US deploys the SATMAP Services in its call centers to enhance performance and as a value-added differentiator for its clients, producing more revenue for both the clients and IBEX US. The total value (net of amortization) of this asset as of December 31, 2013 is $1,850,000, of which $1,650,000 is classified as a non-current asset ($825,000 each in long-term prepayment and longterm deferred expenses) and $200,000 is classified as a current asset. As of 30 June 2013, the total value of this asset (net of amortization) was $1,953,000, of which $1,182,000 was classified as a noncurrent asset and $751,000 was classified as a current asset.

15 Notes to the Condensed Consolidated Financial Information For the six months 31 December Trade and other receivables Trade and other receivables consist of the following: Trade receivables - gross 28,288 23,197 29,161 Less: provision for doubtful debts (270) (108) (342) Trade receivables - net 28,018 23,089 28,819 Prepayments and other receivables 2,449 1,438 2,753 Deposits IPO funds receivable* - - 7,506 30,655 24,653 39,250 * The Holding Company was admitted to AIM of the London Stock Exchange on 28 June The funds from the flotation were received on 2 July Provision for doubtful debts Year Balance at beginning of period Charge for the year Reversals / write-offs against provision (78) (39) (26) Balance at end of period Cash and cash equivalents Cash and cash equivalents consist of the following: Balances with banks in: - current accounts 12,219 2,103 10,386 - deposit accounts ,607 2,358 10,641 Cash in hand ,617 2,371 10,651

16 Notes to the Condensed Consolidated Financial Information For the six months 31 December Liabilities against assets subject to finance lease Liabilities against assets subject to finance lease are secured by the related assets held under finance leases. Future minimum lease payments at 31 December 2013, 31 December 2012 and 30 June 2013 are as follows: 31 December 2013 Minimum Present value lease payments of payments $'000's $'000's Within one year 2,401 1,752 After one year but not more than five years 5,288 4,733 Total minimum lease payments 7,689 6,485 Less: amounts representing finance charges (1,204) - Present value of minimum lease payments 6,485 6,485 Less: current portion shown under current liabilities (1,752) (1,752) 4,733 4, December 2012 Minimum Present value lease payments of payments $'000's $'000's Within one year After one year but not more than five years Total minimum lease payments 1,195 1,052 Less: amounts representing finance charges (143) - Present value of minimum lease payments 1,052 1,052 Less: current portion shown under current liabilities (372) (372) June 2013 Minimum Present value lease payments of payments $'000's $'000's Within one year After one year but not more than five years Total minimum lease payments 1,244 1,120 Less: amounts representing finance charges (124) - Present value of minimum lease payments 1,120 1,120 Less: current portion shown under current liabilities (807) (807)

17 Notes to the Condensed Consolidated Financial Information For the six months 31 December Other non-current liabilities Deferred rent - long term Pension defined benefit plan Share option plan ,724 1,064 1, Working capital line of credit On 8 November 2013, one of the subsidiaries of the Holding Company (the Company) signed a Revolving Credit and Security Agreement (Agreement) with PNC Bank, National Association (PNC) for a new $35,000,000 revolving line of credit (RLOC) to replace the Capital Source Bank (CSB) $20,000,000 RLOC. The Agreement has a 7 November 2016 maturity date and an interest rate of LIBOR +2.50% and or the PNC Commercial Lending Rate (as publically announced) +0.25%. The Company is subject to certain qualitative and quantitative financial performance covenants, including a minimum Fixed Charge Coverage Ratio to ensure continued access to the line of credit. 15. Trade and other payables Trade payables 4,351 4,902 5,338 Accrued expenses and payables 3,376 2,177 5,149 Accrued salaries and wages 13,198 10,583 11,202 20,925 17,662 21, Contingencies and commitments There have been no material changes in contingencies and commitments during the period.

18 Notes to the Condensed Consolidated Financial Information For the six months 31 December Cash generated from / (used in) operations Year Loss before taxation (318) (172) (17,033) Adjustments for: Depreciation and amortisation 1,951 1,290 2,311 Finance cost 1, ,924 Write off intercompany receivables ,670 Provision for retirement benefit expense Gain on sale of fixed assets Employee share option expense (4) Changes in operating assets and liabilities: Trade and other receivables 8,817 (5,833) (20,679) Trade and other payables (845) 3,089 6,936 Deferred revenue / expense (896) (279) 173 Due to / from affiliates (2,414) 144 (539) Net cash generated from / (used in) operating activities 8,926 (728) (10,457) 18. Net Debt Line of credit 17,036 14,597 19,888 Obligation under finance lease 6,485 1,052 1,120 Cash and cash equivalents (12,617) (2,371) (10,651) IPO funds receivable - - (7,506) Net Debt 10,904 13,278 2, Subsequent events The management evaluated subsequent events and transactions that occurred from the end of the reporting period through 22 March 2014, the date at which the interim financial statements were available to be issued, and concluded that no subsequent events require adjustment to or disclosure in these interim condensed consolidated financial information.