CDOG.L Regulatory News (CDOG)

21 September 2015

CDialogues plc

("CDialogues" or the "Company")

Half Yearly Report - Announcement of interim dividend

CDialogues plc (AIM: CDOG), the provider of mobile marketing solutions to Mobile Network Operators ("MNOs"), is pleased to announce its unaudited Half Yearly Report for the six months ended 30 June 2015.

Financial highlights

· Revenues increased 31% to €5.31m (1H 2014: €4.05m)

o Subscription revenues accounted for 82% of total revenues (1H 2014: 79%)

· EBITDA increased 12% to €1.62m (1H 2014: €1.44m)

· Profit before tax increased 8% to €1.39m (1H 2014: €1.29m)

· Earnings per share of €0.217 (1H 2014: €0.227)

· Free cash flow* increased 214% to €1.47m (1H 2014: €0.47m)

· Net cash as of 30 June 2015 at €3.70m (31.12.2014: €2.42m) increased by 53%

· Interim dividend of 1.25p

*After development costs and capital expenditure and excluding one-off items relating to AIM listing

Operational highlights

· During the period, the Company operated mobile marketing projects in five countries across Middle East and Southeast Asia

· Delivery of mobile marketing projects to a total subscriber base of 20 million customers

· Continuous and successful implementation of subscription-based recurring revenue model

The Board has declared an interim dividend for the year ending 31 December 2015 of 1.25 pence per share which will be paid on 30 October 2015 to shareholders on the register on 2 October 2015. The Company's shares will go ex-dividend on 1 October 2015.

Pale Spanos, Chief Executive Officer, commented: "We continue to focus on extending our geographic reach and establishing relationships with new MNOs via our growing network of regional representatives. Whilst it has taken longer than we anticipated to commence some new contracts, we continue to have a strong pipeline of new projects and remain excited by the potential scalability of our services and customer base"

Enquiries:

About CDialogues

CDialogues provides mobile marketing solutions enabling Mobile Netwrok Operators (MNOs) to retain and acquire market share, increase average revenue per user (ARPU) and reducing subscriber churn.

The Company's products and services deliver fully managed solutions, utilizing advanced Data analytics techniques combined with Linguistic engineering marketing, to build awareness and multiply sales and opt-ins of promotional offerings and other mobile content being offered by the MNOs.

The solutions designed by the Company, are tailored and served with the appropriate Linguistic format, to each individual mobile network subscriber typology and geography it operates in, using its proprietary software and scalable infrastructure.

The majority of CDialogues' revenues are derived from a recurring subscription-based revenue model, which has been pioneered by the Company. As a result, the Company benefits from incremental cash flow growth from each new campaign customer and mobile network subscriber.

The Company's near-term focus is on growing both its customer base and expanding its geographic footprint in selected markets in the Middle East, East Africa, Eastern Europe and Latin America, where mobile device penetration and mobile network usage is growing rapidly.

CDialogues has been profitable and cash flow positive since commercial operations began in early 2012.

CHIEF EXECUTIVE OFFICER REVIEW

We are pleased to report our financial results for the six months ended 30June 2015.This was a very productive period for the Company as we built on the momentum achieved last year. Growing revenues, profits and cash generation were driven by increases in subscriber numbers, the number of active campaigns and our extended geographic reach.

This time last year we were new to the market and were bedding in our position as a public entity having joined AIM in June 2014. The focus since then has been on building relationships with MNOs, moving into new territories and diversifying our geographic reach. At the time we joined AIM, our sales were derived from a small number of contracts and territories. As such it was a key objective to diversify our revenue streams via successful market penetration. During the first half of 2015 we operated in five countries across the Middle East and Southeast Asia.

Our focus remains on growing our presence in the Middle East, East Africa, Eastern Europe and Latin America, where subscriber churn has traditionally been high due to the fact that mobile phone subscribers typically utilise pre-pay mobile phone tariffs, making these markets price sensitive.

Our products and services deliver fully managed solutions, utilizing advanced data analytics techniques combined with linguistic engineering marketing, to build awareness and multiply sales and opt-ins of promotional offerings and other mobile content being offered by the MNOs. As such, our solutions are tailored and served with the appropriate linguistic format, to each individual mobile network subscriber typology and geography the Company operates in, using its proprietary software and scalable infrastructure.

By providing these services through our software and marketing tools, MNOs have for the first time been able to facilitate subscriber growth and increase customer loyalty as well as potential revenues. In order to boost our presence, we grew our regional reach and established relationships with a number of new MNOs, enabling us to increase subscriber numbers at a low marginal cost. As a result, during the period we operated mobile marketing projects for seven MNOs addressing a total subscriber base of 20 million customers. Currently we operate four mobile marketing projects in two countries across the Middle East.

The opt-in nature of our model and resultant recurring subscription-based revenue streams provide high levels of visibility. In addition this ensures that the Company benefits from incremental cash flow growth for each new campaign customer and mobile network subscriber.

Outlook

CDialogues announced a trading update on 18 September 2015. In this it stated that the Company has continued to develop its operations during the final third of the year, focusing on extending its customer network and accelerating subscriber growth.

However, whilst the momentum achieved to date has been pleasing, some projects which were due to commence in the final quarter of the current financial year have been delayed, due to decisions taken by the MNOs regarding the potential start date. As a result, the Board now anticipates that the Company will generate revenue and EBITDA in the second half of the current financial year similar to that achieved in the first half.

Notwithstanding, the Board remains confident that the Company will continue to expand its client base, subscriber numbers and geographical footprint. CDialogues remains well placed to capitalise on the long-term growth opportunities across its addressable markets. Given the strong existing pipeline of new projects and indicative launch dates, the Company expects to announce a number of new launches over the coming quarters.

The Board is pleased to announce today an interim dividend for the year ending 31 December 2015 of 1.25 pence per share, demonstrating its confidence in the ongoing opportunities available to CDialogues.

Pale Spanos

Chief Executive Officer

CHIEF FINANCIAL OFFICER REVIEW

In the six month period ended 30 June 2015, the Company was able to further leverage its position within a number of countries. The business model, which derives higher gross margins as campaigns mature and benefits incrementally from the addition of each new campaign customer and mobile network subscriber, continued to demonstrate its viability and scalability during the period.

We are delighted with another six months of strong financial performance, which resulted in the Company ending the period with a strong balance sheet and, as such, it remains well placed to grow further and continue its progressive dividend policy.

Revenues for the six months to 30 June 2015 increased 31.2% to €5.31m (1H 2014: €4.05m) as a result of the increased number of projects the Company operated within the period.

Gross profit was up by 22.0% to €2.01m (1H 2014: €1.65m) representing a gross margin of 37.8% (1H 2014: 40.6%). The reduction in gross margin resulted from increased cost of sales as new projects came on stream. Administration and selling & distribution costs were €0.61m (1H 2014: €0.35) representing 11.4% of revenues (1H 2014:8.6%).

Operating profit (after depreciation and amortisation) was up by 8.2% to €1.40m (1H 2014: €1.30m) representing a margin of 26.4% (1H 2014: 32.0%). While variable costs increase with each new project, due to marketing and associated incentive costs, our subscription revenue model and 'opt-in' nature of our service ensures we have high revenue visibility as the number of participants in each project increases.

EBITDA increased by 12.4% to €1.62m (1H 2014: €1.44m) representing a margin of 30.4% (1H 2014: 35.6% and FY2014: 29.6%).

Profit before tax increased by 7.7% to €1.39m (1H 2014: €1.29m) with a margin of 26.2% (1H 2014: 31.9%) while basic earnings per share were €0.217 (1H 2014: €0.227).

Operating cash flow remained strong with net cash flows before changes in working capital increased by 13.8% to €1.64m (1H 2014: €1.44m) representing over a 100% of EBITDA. After taking into account working capital movements, cash flow from operating activities increased by 181.3% to €1.96m (1H 2014: €0.70m) as a result of the efficient working capital management. Cash flows used in investing activities (which comprise primarily investment in software development) were € 0.49m (1H 2014: 0.23m).

Free Cash Flow (being net operating cash flows less net cash flows used in investing activities) was up by 213.6% to €1.47m (1H 2014: €0.47m) which illustrates the ability within the business to manage working capital requirements as the business expands.

As a result, net cash as of 30 June 2015 was €3.70m (31.12.2014: €2.42m) increased by 53.0%, which provides a firm foundation for further growth. The Company (and its subsidiaries) maintains over 90% of its cash in banks in the United Kingdom and does not generate any revenues in the Greek market.

George Karakovounis

Vice Chairman & Chief Financial Officer

CDialogues Plc - Financial Statements in accordance with IFRS

30 June 2015

Consolidated statement of comprehensive income for the period ended 30 June 2015

(Amounts in Euro, except share information, per share data and unless otherwise stated)

Consolidated statement of financial position as at 30 June 2015

(Amounts in Euro, except share information, per share data and unless otherwise stated)

Consolidated statement of changes in equity for the period ended 30 June 2015

(Amounts in Euro, except share information, per share data and unless otherwise stated)

Consolidated statement of cash flows for the period ended 30 June 2015

(Amounts in Euro, except share information, per share data and unless otherwise stated)

Notes to the unaudited interim consolidated financial statements for the period ended 30 June 2015

(Throughout the notes to the financial statements all amounts are presented in Euros except share information, per share data and unless otherwise stated)

1. Corporate information

The interim consolidated financial statements of CDialogues plc and its subsidiaries (collectively, the "Group") for the six months ended 30 June 2015 have been prepared on the basis set out below.

CDialogues plc (the "Company") was incorporated in England and Wales as a Limited Liability Company in June 2011 and during 2014 as a consequence of its listing on AIM became a public company limited by shares.

The operations of CDialogues Plc are not affected by seasonal variations.

The interim report for the six months ended 30 June 2015 was approved by the Directors on 18 September 2015.

2. Basis of preparation

Basis of preparation and statement of compliance

The interim consolidated financial statements of the Group have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union and issued by the International Accounting Standards Board (IASB).

The interim consolidated financial statements have been prepared on a historical cost basis, except for, available-for-sale (AFS) financial assets that have been measured at fair value.

The interim consolidated financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting. The Directors have assessed the Group to continue operating as a going concern and believe that the preparation of these financial statements on the going concern basis is appropriate.

The interim consolidated financial statements do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Group's annual consolidated financial statements for the year ended 31 December 2014.

3. Changes in accounting policies and disclosures

New standards, interpretations and amendments adopted by the Group

The accounting policies adopted in the preparation of the interim consolidated financial statements are consistent with those followed in the preparation of the Group's annual consolidated financial statements for the year ended 31 December 2014, except for the adoption of new standards and interpretations effective as of 1 January 2015. The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective.

The nature and the effect of these changes are disclosed below. Although these new standards and amendments apply for the first time in 2015, they do not have a material impact on the annual consolidated financial statements of the Group or the interim condensed consolidated financial statements of the Group. The nature and the impact of each new standard or amendment are described below:

Amendments to IAS 19 Defined Benefit Plans: Employee Contributions

IAS 19 requires an entity to consider contributions from employees or third parties when accounting for defined benefit plans. Where the contributions are linked to service, they should be attributed to periods of service as a negative benefit. These amendments clarify that, if the amount of the contributions is independent of the number of years of service, an entity is permitted to recognise such contributions as a reduction in the service cost in the period in which the service is rendered, instead of allocating the contributions to the periods of service. This amendment is effective for annual periods beginning on or after 1 July 2014. This amendment is not relevant to the Group, since none of the entities within the Group has defined benefit plans with contributions from employees or third parties.

The IASB has issued the Annual Improvements to IFRSs 2011 - 2013 Cycle, which is a collection of amendments to IFRSs. The amendments are effective for annual periods beginning on or after 1 January 2015.

Ø IFRS 3 Business Combinations: This improvement clarifies that IFRS 3 excludes from its scope the accounting for the formation of a joint arrangement in the financial statements of the joint arrangement itself.

Ø IFRS 13 Fair Value Measurement: This improvement clarifies that the scope of the portfolio exception defined in paragraph 52 of IFRS 13 includes all contracts accounted for within the scope of IAS 39 Financial Instruments: Recognition and Measurement or IFRS 9 Financial Instruments, regardless of whether they meet the definition of financial assets or financial liabilities as defined in IAS 32 Financial Instruments: Presentation.

Ø IAS 40 Investment Properties: This improvement clarifies that determining whether a specific transaction meets the definition of both a business combination as defined in IFRS 3 Business Combinations and investment property as defined in IAS 40 Investment Property requires the separate application of both standards independently of each other.

Standards issued but not yet effective and not early adopted

In addition to those standards and interpretations that have been disclosed in the financial statements for the year ended 31 December 2014, the following new standards, amendments to standards and interpretations have been issued but are not effective for the financial year beginning 1 January 2015 and have not been early adopted from the Group:

· IAS 16 Property, Plant & Equipment and IAS 38 Intangible assets (Amendment): Clarification of Acceptable Methods of Depreciation and Amortization

· IFRS 9 Financial Instruments: Classification and Measurement

· IFRS 11 Joint arrangements (Amendment): Accounting for Acquisitions of Interests in Joint Operations

· IFRS 14 Regulatory Deferral Accounts

· IFRS 15 Revenue from Contracts with Customers

· IAS 27 Separate Financial Statements (amended)

· Amendment in IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates and Joint Ventures: Sale or Contribution of Assets between an Investor and its Associate or Joint Venture

· IFRS 10, IFRS 12 and IAS 28: Investment Entities: Applying the Consolidation Exception (Amendments)

· IAS 1: Disclosure Initiative (Amendment)

· The IASB has issued the Annual Improvements to IFRSs 2010 - 2012 Cycle, which is a collection of amendments to IFRSs. The amendments are effective for annual periods beginning on or after 1 February 2015. Management estimates that those amendments will not affect the financial statements except from possible additional disclosures.

Ø IFRS 2 Share-based Payment

Ø IFRS 3 Business combinations

Ø IFRS 8 Operating Segments

Ø IFRS 13 Fair Value Measurement

Ø IAS 16 Property Plant & Equipment

Ø IAS 24 Related Party Disclosures

Ø IAS 38 Intangible Assets

· The IASB has issued the Annual Improvements to IFRSs 2012 - 2014 Cycle, which is a collection of amendments to IFRSs. The amendments are effective for annual periods beginning on or after 1 January 2016. These annual improvements have not yet been endorsed by the EU. Management estimates that those amendments will not affect the financial statements except from possible additional disclosures.

Ø IFRS 5 Non-current Assets Held for Sale and Discontinued Operations

Ø IFRS 7 Financial Instruments: Disclosures

Ø IAS 19 Employee Benefits

Ø IAS 34 Interim Financial Reporting

4. Operating segment information

For the purpose of IFRS 8, the chief operating decision-maker ("CODM"), who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors. The CDialogues Group is a provider of Mobile Marketing services. The Group's revenue and profit before taxation were all derived from its principal activity. Over 95% of revenues from the period were derived from external customers based in the Middle East which is considered as one geographical segment. Based on the above considerations, there is considered to be one reportable segment: mobile marketing services in the Middle East. Internal and external reporting is on a consolidated basis, with transactions between Group companies eliminated on consolidation. Therefore the financial information of the single segment is the same as that set out in the consolidated statement of comprehensive income, the consolidated statement of financial position, the consolidated statement of changes in equity and the consolidated statement of cash flows.

5. Expenses by nature

6. Payroll and related costs

7. Income tax

The amounts of income taxes which are reflected in the accompanying interim financial statements are analysed as follows:

The reconciliation of income taxes reflected in the statements of comprehensive income and the amount of income taxes determined by the application of the composite rate is as follows:

8. Earnings per share

Basic earnings per share amounts are calculated by dividing net profit for the reporting period attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the respective period.

Diluted earnings per share amounts are calculated by dividing the net profit attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the period plus the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares.

9. Property plant and equipment

Property plant and equipment in the accompanying interim financial statements of the Group are analysed as follows:

10. Intangible assets

Intangible assets in the accompanying interim financial statements of the Group are analysed as follows:

11. Trade and other receivable

Trade and other receivable in the accompanying interim financial statements of the Group are analysed as follows:

12. Share capital and share premium

The movement of the Company's share capital and share premium is analysed as follows:

On 16 April 2013, pursuant to a written resolution of the Founders the 5,000 issued ordinary shares of €1.00 each were re-designated A Ordinary Shares of €1.00 each.

On 16 April 2013 10,000 A ordinary shares of €1.00 each were issued to the Founders.

On 11 June 2014, pursuant to written resolutions of the Founders:

· each of the issued existing A ordinary shares of €1.00 in the capital of the Company was redesignated as an ordinary share of €1.00 each;

· the sum of €51,000 (being part of the Company's distributable reserves) was capitalised and appropriated as capital to the Founders and the Directors were authorised to apply such sum in paying up in full 51,000 new ordinary shares in the Company (the "Bonus Shares") and to allot and issue such Bonus Shares, credited as fully paid up, to the Founders at the rate of 3.4 Bonus Shares for every 1 existing ordinary share of €1.00 each held by them;

· the entire issued share capital of the Company was redenominated from Euros (€) to Pounds Sterling (£) at a then prevailing exchange rate of € 1.2 to £1

· the issued existing ordinary shares of €1.00 in the capital of the Company were consolidated on the basis of 1 new ordinary share of £1.00 each in the capital of the Company for every 1.2 existing ordinary shares of €1.00 previously held; and each of the issued existing ordinary shares of £1.00 in the capital of the Company arising from the consolidation was subdivided into 100 new ordinary shares of £0.01 each in the capital of the Company for every 1 existing ordinary share of £1.00 previously held.

On 11 June 2014 152,550 ordinary shares of £0.01 each were allotted and fully paid in cash by certain employees and consultants of the Group resulting in a total net increase of €1,950.

On 27 June 2014, 588,000 ordinary shares of £0.01 each were allotted and fully paid in cash at a price of £2.12 resulting in a total net increase of €572,835 (after transactions costs of €967,208).

The company issued a total of 182,947 warrants over ordinary shares to advisers and non-executive directors at the date of its admission to AIM. The warrants are exercisable at a price of £2.12 per ordinary share for a period of five years. The directors do not consider the intrinsic value of the services provided in exchange for the issue of the warrants to be material.

As at 30 June 2015 the Company had 6,240,550 Ordinary Shares in issue (including 23,533 treasury shares).

13. Trade and other payable

Trade and other payable in the accompanying interim financial statements of the Group are analysed as follows:

14. Distributions made

Cash dividends to the equity holders of the parent:

Dividends on ordinary shares declared and paid:

15. Events after the reporting period

There were no events after the statement of financial position date of June 30, 2015, that relate to the Group, which can materially affect the understanding of those Financial Statements and should be reported or differentiate the amounts of published financial statements.