DODS.L Regulatory News (DODS)

Dods Group PLC

("Dods" or the "Company")

Interim Results for the six months ended 30 September 2016 (Unaudited)

Financial Highlights

• Revenue of £9.74 million (2015: £9.28 million)

• Gross Profit of £3.72 million (2015: £3.31 million)

• Gross Profit margin of 38% (2015: 36%)

• Adjusted EBITDA of £1.53 million (2015: £1.01 million)*

• Cash generated from operations £1.40 million (2015: £1.11 million)

• Profit before tax of £0.82 million (2015: £0.11 million)

• Adjusted EPS of 0.34 pence (2015: 0.20 pence)**

*EBITDA is calculated as earnings before interest, tax, depreciation, amortisation of intangible assets acquired through business combinations, share based payments and non-recurring items

** Adjusted Earnings per Share (EPS) is calculated by dividing the adjusted profit (see note 4) attributable to shareholders post tax by the weighted average number of ordinary shares in issue during the period

Operational Highlights

• In the first half of the year, the Group's go-to-market model was redesigned to enable a strategic approach to sales and client services, product management and marketing

• The scaled-up events operation has maintained its service delivery at the highest level while delivering an expected 18% increase in revenue on a comparative basis

• Management undertook the development of a new series of products and product enhancements during the half year, including the launch of the new Dods People App and Political Risk Reports

• The Group's primary base of operations and registered office were relocated to The Shard, creating a convenient and conducive environment for client meetings and demonstrations whilst providing a more efficient and technologically advanced infrastructure for our business operations

Cheryl Jones, Chairman of Dods Group PLC, commented:

"The Board is pleased to announce that the Group's interim results are in line with expectations.

Management's priorities continue to be; realigning market-facing activities for greater effectiveness and increased market share, repositioning Dods' resources to further enable efficient product and service innovation, leveraging the shareholders' investment in technology, and pursuing acquisitive growth.

The Board of Directors believes that these priorities will enable the Group to make significant progress to becoming the outsourcing partner of choice to its markets."

For further information, please contact:

Dods Group PLC

Guy Cleaver, Chief Executive Officer 020 7593 5500

Nitil Patel, Chief Financial Officer

Cenkos

Nicholas Wells 020 7397 8920

Business Review

The first half of the financial year saw the Group perform in line with the transformational plans for the business. The Group's revenues grew by 5% to £9.7 million (2015: £9.3 million). Gross margins improved from 36% to 38%. Adjusted EBITDA has improved from £1.0 million to £1.5 million, an increase of 50%. Profit before tax of £0.8 million (2015: £0.1 million) was achieved and cash generated from operations was £1.4 million, in comparison to £1.1 million in the prior comparative period

As outlined in the 2016 annual report, the Group has adopted a 'client for life' philosophy. A significant amount of management's focus in the first half of the year was spent realigning sales, product and marketing teams to support improved retention rates and to enhance the account management experience for our clients. As these structures are newly established, during the second half of the year management will focus on leveraging the redesigned teams to increase market share and accelerate future revenue growth.

Management believes that the future benefits of the new structures include creating scalability for efficient growth and the ability to expand our services into new markets allowing Dods to become the outsourcing partner of choice to our clients.

During the period, the operational sales and service priorities were to:

- support the planned 18% growth in revenue in the events' portfolio;

- maintain a keen focus to improving the retention of recurring subscriber revenues;

- continue to develop and invest in our digital products whilst maintaining our print media market share;

- develop a pipeline of new products and product enhancements, which will be introduced before the end of the financial year;

- launch the new Political Risk service; and

- launch the new Dods People App providing access to our biographical reference data on mobile devices.

In September, the Group's primary base of operations and registered office was relocated to The Shard, creating a convenient and conducive environment for client meetings and demonstrations whilst providing a more efficient and technologically advanced infrastructure for our business operations. Management believes that the new offices will be more conducive to accelerate the Company's transformation in its business processes, client services and infrastructure efficiencies.

Management continue to be focused on achieving their objectives for the current financial year. This includes identifying suitable acquisitions which will provide enhanced services to our customers and increased value for our Shareholders.

Guy Cleaver

Chief Executive Officer

Key Financial Information

FINANCIAL REVIEW

Income Statement

The Group's revenue from continuing operations increased by 5% to £9.7 million (2015: £9.3 million) and gross profit increased by 12% to £3.7 million (2015: £3.3 million).

Gross margin increased from 36% to 38% in the period, with administrative expenses decreasing to 23% of revenues (2015: 25%). The increase in gross margin is due to an ongoing focus to process efficiencies and scalability, and the quality of revenue across the Group.

Adjusted EBITDA was £1.5 million (2015: £1.0 million). Operating profit was £0.9 million (2015: £0.1 million), after an amortisation charge of £0.3 million (2015: £0.3 million) for business combinations and a charge of £0.2 million (2015: £0.2 million) for intangible assets. Depreciation charge in the period was £0.1 million (2015: £0.2 million).The taxation charge for the period is £Nil (2015: £Nil) and is based on the expected annual tax rate and the assumed use of accumulated tax losses.

Earnings per shareBasic and diluted loss per share from continuing operations in the year was 0.24 pence (2015: 0.03 pence) and was based on the profit for the period of £0.8 million (2015: £0.1 million) with a weighted average number of shares in issue during the period of 340,840,953 (2015: 339,770,953).

Dividend The Board is not proposing a dividend at this time.

Statement of Financial Position

Assets

Non-current assets consisted of goodwill of £13.3 million (2015: £13.3 million), intangibles of £7.5 million (2015: £8.1 million), software intangibles of £1.4 million (2015: £1.5 million), and tangible fixed assets of £2.5 million (2015: £0.2 million). The increase in tangible assets reflects the £2.4 million investment by the Group in its new premises.

The Group had a cash balance of £7.9 million as at 30 September 2016 (2015: £7.0 million). The cash balance is after the expenditure of £2.6 million in investing activities and includes a deposit of £1.3 million (2015: £Nil) being held in the Group's name with its bankers.

Equity and Liabilities

Retained profits as at 30 September 2016 were £1.0 million (2015: losses of £0.8 million) and total shareholders' equity at that date was £26.6 million (2015: £24.7 million).

On 29 March 2016, the Group issued 535,000 new ordinary shares, pursuant to the exercise of share options. On 4 July 2016, the Group issued a further 535,000 new ordinary shares, also pursuant to the exercise of share options. Following the admission of these new shares to AIM, the Group's issued number of shares increased to 340,840,953 (2015: 339,770,953). Non-current deferred tax liability was £0.8 million (2015: £0.8 million) as at 30 September 2016

Cash flows

During the period the Group generated £1.4 million from operations (2015: £1.1 million). In addition, the Group expended £2.6 million in investing activities (2015: £0.02 million) primarily on the new premises and as a result net cash and cash equivalents decreased by £1.2 million to £7.9 million.

Nitil PatelChief Financial Officer

DODS GROUP PLC

Notes to the condensed consolidated interim financial statements 30 September 2016

1 Statement of Accounting Policies

Basis of preparation

This condensed set of financial statements has been prepared in accordance with IAS 34: Interim Financial Reporting as adopted by the EU. The annual financial statements of the Group are prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the EU. As required by AIM Rules, the condensed set of financial statements has been prepared, and applying accounting policies and presentation that were applied in the preparation of the Group's published consolidated financial statements for the year-ended 31 March 2016.

The comparative figures for the year ended 31 March 2016 have been extracted from the Group's statutory accounts for that financial period. Those accounts have been reported on by the company's auditor and delivered to the registrar of companies. The report of the auditor was (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 498(2) or (3) of the Companies Act 2006.

The taxation charge for the six months ended 30 September 2016 is based on the expected annual tax rate, and the assumed use of accumulated tax losses.

The condensed set of interim financial statements have been prepared on a going concern basis and were approved by the Board on 8 November 2016.      

2 Segmental information

The Group considers that it has one operating business segment. It monitors revenue by product and activity to determine the overall performance of the segment.

Principal activities are as follows:

The Group's principal activity is the curation and aggregation of high quality information and data, and the provision of services through a combination of online information and digital services, training courses, conferences and events publications, and other media. The Group operates primarily in the UK, Belgium and France and has market-leading positions in much of its portfolio. These products and services can be paired and bundled to provide comprehensive solutions.

No client accounted for more than 10% of total revenue. The following table provides an analysis of the Group's performance by geographical market.

3 Non-recurring items

4 Earnings per share

Basic earnings per share is calculated by dividing the profit attributable to shareholders, by the weighted average number of Ordinary shares in issue during the period.

An adjusted earnings per share is calculated by dividing the adjusted profit attributable to shareholders (detailed below) by the weighted average number of Ordinary shares in issue during the period.

Diluted earnings per share is calculated by adjusting the weighted average number of Ordinary shares, assuming conversion of all dilutive share options to Ordinary shares

5 Intangible assets

6 Property, plant and equipment

The Group did not have any assets recognised from obligations under finance leases in either the current period or prior year.

7 Cash and Cash Equivalents

Included in the cash balance is a cash deposit held in the Group's name with its bankers of £1.27m (2015: £Nil) in relation to the new premises of the Group.