IBPO.L Regulatory News (IBPO)

18 December 2014

iEnergizer Limited

("iEnergizer" or "the Company")

INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2014

iEnergizer, one of the largest AIM listed independent, integrated software and service pioneers, is pleased to announce its Interim Results for the six months ended 30 September 2014. iEnergizer is a digital publishing and technology leader, set to benefit from the dual disruptive waves of big data and the cloud. The present structure of the group represents the combination of a well-established, high growth, business process solution enterprise with the only scale provider of leading end-to-end digital transformation solutions to the media and publishing industries.

Financial Highlights

· Revenues of $76.1m (H1 2013: $73.9m)

· Adjusted EBITDA(1) $14.9m (H1 2013: $20.2m)

· Adjusted EBITDA (1)margin at 19.6% (H1 2013: 27.3%)

· Operating profit $9.8m (H1 2013: $16.8m)

· Operating profit margin at 12.9% (H1 2013: 22.7%)

· Cash and cash equivalents of $14.2m (increase of US$1.7m over 31 March 2014 ($12.5m))

· Term Debt of $113.8m (31 March 2014: $121.5m). The Company is compliant of all applicable financial covenants including on-time payments of loan instalments and interest.

Operational Highlights

· Aggregate revenue in content services has fallen from $51.5m (H1 2013) to $45.1m (H1 2014). The fall is primarily due to the continued reduction of volume in the high margin XBRL contract client which reduced revenues by $12.2m during the corresponding period. Current trends are lower as some other large contracts also came to an end due to an underlying project completion. While the full year revenues for content services may be lower than last year, the Company is confident of getting back to a growth trajectory before the end of the fiscal year and a return to growth in FY 2016. While the content services are largely project-driven, (where revenues may be impacted in the short term, on completion of the underlying projects), the long term growth prospect of content services remains intact as the shift to the digital world is irreversible and iEnergizer has a unique position with cutting edge technology to serve as an enabler to its clients to help them during this transformational period.

· Revenue growth in Real Time Processing ("RTP") of 18.6%, above the projected growth of the domestic IT service market growth of 9-12% (as forecast by the National Association of Software and Services Companies).

· Strong performance from Back Office Services ("BOS"), returning to growth after decline in 2014. This was, in part, due to a one-time project, which was completed by the end of H1. The Company is hopeful of maintaining this growth momentum.

· Continued focus on recurring revenue streams from business critical processes and long-term customer relationships and developing a sustainable long-term pipeline from the MAPS initiative introduced in 2014.

· Focus on cross-sell life-cycle management solutions into content clients, and increase the average revenue by customer across an active customer base which now totals 350.

· Focus on effecting cost savings through several new cost cutting initiatives:

§ Completed relocation of Delhi based content service operations to Group's larger and cost effective operation centre at Noida, India.

§ Continued focus on utilizing pool of personnel at other significantly cheaper locations like Trivandrum, Dehradun and Pune.

§ Continued focus of rationalizing SG&A costs including leveraging US based sales team for generating sales pipeline for all business verticals of the Group.

· Cash position of $14.5m along with incremental cash generation puts the Company in a strong position to invest in both organic and inorganic growth opportunities.

(1) Adjusted EBIDTA means Earnings before Interest, Debt, Tax and Amortization, adjusted for on off costs of US$ 1.6mn in respect of one time relocation and severance expenses. The reported EBIDTA for H1 is $13.3mn (H1 2013: $20.2m)

Sara Latham, Chairman of iEnergizer, commented:

"Following a difficult year in Fiscal 2014, trading in the first half of Fiscal 2015 has been one of consolidation with current trends expected to result in lower full year revenues compared to last year. The progress and the strategies employed by the Company in recent months are beginning to show signs of success and expected to help the Company in its long term growth plans going forward.

"As previously indicated, it may take some time to execute all operational improvements being implemented and new business opportunities being realised, but we have made good progress and are already seeing these bare fruit.

"The Company remains confident in its ability to return to the high growth trajectory of the past by fiscal year 2016 which, in turn, will transform iEnergizer into a global Business Process Management firm. I extend my heartiest thank to all employees of the Company for their hard work in preserving the fundamentals of the Company, which remain strong."

-Ends-

Enquiries:

iEnergizer 020 7887 1511

Neil Campling, Chief Financial Officer

Arden Partners 020 7614 5900

Steve Douglas/James Felix

FTI Consulting 020 7831 3113

Jonathan Brill/Edward Westropp

Unaudited Condensed Consolidated Statements of Financial Position

(All amounts in United States Dollars, unless otherwise stated)

 (The accompanying notes are an integral part of these Unaudited Condensed Consolidated Interim Financial Statements)

Unaudited Condensed Consolidated Income Statements

(All amounts in United States Dollars, unless otherwise stated)

(The accompanying notes are an integral part of these Unaudited Condensed Consolidated Interim Financial Statements)

Unaudited Condensed Consolidated Statements of Other Comprehensive Income

(All amounts in United States Dollars, unless otherwise stated)

(The accompanying notes are an integral part of these Unaudited Condensed Consolidated Interim Financial Statements)

Unaudited Condensed Consolidated Statements of Changes in Equity

(All amounts in United States Dollars, unless otherwise stated)

(The accompanying notes are an integral part of these Unaudited Condensed Consolidated Interim Financial Statements)

Unaudited Condensed Consolidated Statements of Changes in Equity

(All amounts in United States Dollars, unless otherwise stated)

(The accompanying notes are an integral part of these Unaudited Condensed Consolidated Interim Financial Statements)

Unaudited Condensed Consolidated Statements of Cash Flows

(All amounts in United States Dollars, unless otherwise stated)

Notes to Unaudited Condensed Consolidated Interim Financial Statements

(All amounts in United States Dollars, unless otherwise stated)

1. INTRODUCTION

iEnergizer Limited (the 'Company' or 'iEnergizer ') was incorporated in Guernsey on 12 May 2010 pursuant to the Act of Royal Court of the Island of Guernsey.

iEnergizer Limited is a 'Company limited by shares' and is domiciled in Guernsey. The registered office of the Company is located at Mont Crevelt House, Bulwer Avenue, St. Sampson, Guernsey, GY2 4 LH. iEnergizer was listed on the Alternative Investment Market ('AIM') of London Stock Exchange on 14 September 2010.

iEnergizer through its subsidiaries iEnergizer Holdings Limited, iEnergizer Group FZ - LLC, iEnergizer IT Services Private Limited, iEnergizer Management Services Limited, iEnergizer BPO Limited, iEnergizerAptara Limited and AptaraInc and subsidiaries. (together the 'Group') is engaged in the business of call centre operations, providing business process outsourcing (BPO) and content delivery services, and back office services to their customers, who are primarily based in the United States of America and India, from its operating offices in Mauritius and India.

2. GENERAL INFORMATION AND STATEMENT OF COMPLIANCE WITH IFRS

These Unaudited Condensed Consolidated Interim Financial Statements are for the six months ended 30 September 2014 and 2013. They have been prepared in accordance with IAS 34 Interim Financial Reporting as developed and published by the International Accounting Standards Board ('IASB'), on a going concern basis. They do not include all of the information required in annual financial statements in accordance with IFRS, and should be read in conjunction with the annual financial statements for the years ended 31 March 2014 and 2013.

The Unaudited Condensed Consolidated Interim Financial Statementshave been prepared and presented in United States Dollar (US$) which is the Company's functional currency.

These Unaudited Condensed Consolidated Interim Financial Statements were approved by the Board on 24th November, 2013.

The Group has applied the same accounting policies in preparing these unaudited management financial information as adopted in the most recent annual audited financial information of the Group.

3. SIGNIFICANT ACCOUNTING POLICIES

The interim financial statements have been prepared in accordance with the accounting policies adopted in the Group's most recent annual financial statements for the years ended 31 March 2014 and 2013, except for the application of the following standards as of 1 April 2014:

• IFRS 10 'Consolidated Financial Statements'

• IFRS 11 'Joint Arrangements'

• IFRS 12 'Disclosure of interests in other entities'

• IAS 27 (Revised) 'Separate financial statements'

• IAS 28 (Revised) 'Investments in Associates and Joint Ventures'

• Amendments to IFRS 10, IFRS 12 and IAS 27 'Investment entities'

• Amendments to IAS 32 'Offsetting Financial Assets and Financial Liabilities'

The effects of applying these standards are described below.

· IFRS 10 Consolidated Financial Statements

IFRS 10 supersedes IAS 27 'Consolidated and Separate Financial Statements' (IAS 27) and SIC12 'Consolidation-Special Purpose Entities'. IFRS 10 revises the definition of control and provides extensive new guidance on its application. These new requirements have the potential to affect which of the Group's investees are considered to be subsidiaries and therefore to change the scope of consolidation. The requirements on consolidation procedures, accounting for changes in non-controlling interests and accounting for loss of control of a subsidiary are unchanged.

Management has reviewed its control assessments in accordance with IFRS 10 and has concluded that there is no effect on the classification (as subsidiaries or otherwise) of any of the Group's investees held during the period or comparative periods covered by these financial statements.

·  IFRS 11 Joint Arrangements

IFRS 11 supersedes IAS 31 'Interests in Joint Ventures' (IAS 31) and SIC 13 'Jointly Controlled Entities- Non-Monetary-Contributions by Venturers'. IFRS 11 revises the categories of joint arrangement, and the criteria for classification into the categories, with the objective of more closely aligning the accounting with the investor's rights and obligations relating to the arrangement. In addition, IAS 31's option of using proportionate consolidation for arrangements classified as jointly controlled entities under that Standard has been eliminated.

IFRS 11 now requires the use of the equity method for arrangements classified as joint ventures (as for investments in associates).

As the Group does not have any investment in any of such joint arrangements, management has concluded that application of this standard will not have any impact on the disclosures or on amounts recognized in consolidated financial statements.

· IFRS 12 Disclosure of interests in other entities

IFRS 12 combines the disclosure requirements for subsidiaries, joint arrangements, associates and unconsolidated structured entities within a comprehensive disclosure standard.

It aims to provide more transparency on 'borderline' consolidation decisions and enhance disclosures about unconsolidated structured entities in which an investor or sponsor has involvement.

Subsequent to issuing the new standards the IASB made some changes to the transitional provisions in IFRS 10, IFRS 11, and IFRS 12. The guidance confirms that the entity is not required to apply IFRS 10 retrospectively in certain circumstances and clarifies the requirements to present adjusted comparatives. The guidance also makes changes to IFRS 11 and IFRS 12 which provide similar relief from the presentation or adjustment of comparative information for periods prior to the immediately preceding period. Further, it provides additional relief by removing the requirement to present comparatives for the disclosures relating to unconsolidated structured entities for any periods before the first annual period for which IFRS 12 is applied.

Management has concluded that application of this standard will not have any impact on the disclosures or on amounts recognized in consolidated financial statements.

· IAS 27 (Revised) 'Separate financial statements'

The remainder of IAS 27, 'Separate Financial Statements', now contains accounting and disclosure requirements for investments in subsidiaries, joint ventures and associates only when an entity prepares separate financial statements and is therefore not applicable in the Group's consolidated interim financial statements.

· IAS 28 (Revised) 'Investments in Associates and Joint Ventures'

IAS 28 brings investments in joint ventures into its scope. However, IAS 28's equity accounting methodology remains unchanged. As the Group does not have any investment in joint ventures, management has concluded that application of this standard will not have any impact on the disclosures or on amounts recognized in consolidated financial statements.

· Investment Entities (Amendments to IFRS 10, IFRS 12 and IAS 27)

These amendments provide an exception to the consolidation requirement for entities that meet the definition of an investment entity under IFRS 10 Consolidated Financial Statements. The exception to consolidation requires investment entities to account for subsidiaries at fair value through profit or loss. These amendments have no impact to the Group, since none of the entities in the Group qualifies to be an investment entity under IFRS 10.

· Offsetting Financial Assets and Financial Liabilities - Amendments to IAS 32

These amendments clarify the meaning of 'currently has a legally enforceable right to set-off' and the criteria for non-simultaneous settlement mechanisms of clearing houses to qualify for offsetting. These amendments have no impact on the Group.

4. SIGNIFICANT MANAGEMENT JUDGEMENT IN APPLYING ACCOUNTING POLICIES AND ESTIMATION UNCERTAINTY

When preparing the Unaudited Condensed Consolidated Interim Financial Statements, management undertakes a number of judgements, estimates and assumptions about recognition and measurement of assets, liabilities, income and expenses. The actual results may differ from the judgements, estimates and assumptions made by management, and will seldom equal the estimated results.

The judgements, estimates and assumptions applied in the Unaudited Condensed Consolidated Interim Financial Statements, including the key sources of estimation uncertainty were the same as those applied in the Group's last audited financial statements for the year ending 31 March 2014.

5. GOODWILL

The net carrying amount of goodwill can be analysed as follows:

6. OTHER INTANGIBLE ASSETS

The Intangible assets comprise of computer software, customer contracts.

7. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment comprise of the following:

8. SHORT TERM FINANCIAL ASSETS

Short term investments comprise of investment through banks in deposits denominated in various currency units bearing fixed rate of interest.

9. EARNINGS PER SHARE

The calculation of the basic earnings per share is based on the profits attributable to ordinary shareholders divided by the weighted average number of shares in issue during the period.

Calculation of basic and diluted profit per share for the period ended 30 September 2014 is as follows:

Basic earnings per share

Diluted earnings per share

* Shares to be issued under share options granted

10. RELATED PARTY TRANSACTIONS

The related parties for each of the entities in the Group have been summarised in the table below:

Disclosure of transactions between the Group and related parties and the outstanding balances is as under:

Transactions with parent company

Transactions with KMP and relatives of KMP

11. SEGMENT REPORTING

Management currently identifies the Group's three services lines real time processing, back office services and content delivery as operating segments on the basis of operations. These operating segments are monitored and strategic decisions are made on the basis of adjusted segment operating results.

The Chief Operating Decision Maker ("CODM") evaluates the Group's performance and allocates resources based on an analysis of various performance indicators by reportable segments. The Group's reportable segments are as follows:

1. Real time processing

2. Back office services

3. Content delivery

4. Others

The measurement of each segment's revenues, expenses and assets is consistent with the accounting policies that are used in preparation of the Unaudited Condensed Consolidated Interim Financial Statements. In addition, two minor operating segments, for which the quantitative thresholds have not been met, are currently combined below under 'Others'. Segment information can be analysed as follows for the reporting periods under review:

Revenue from two of the customer's amounted to more than 10% of consolidated revenue during the period presented.

30 September 2014

30 September 2013

12. FINANCIAL ASSETS AND LIABILITIES

Fair value of carrying amounts of assets and liabilities presented in the statement of financial position relates to the following categories of assets and liabilities:

These non-current financial assets and liabilities, current financial assets and liabilities have been recorded at their respective carrying amounts as the management considers the fair values to be not materially different from their carrying amounts recognised in the statement of financial positions as these are expected to realise within one year from the reporting dates. Derivative financial instruments, recorded at fair value through profit and loss, are recorded at their respective fair values on the reporting dates.

13. FAIR VALUE HIERARCHY

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

No financial assets/liabilities have been valued using level 1 and 3 fair value measurements.

The following table presents fair value hierarchy of assets and liabilities measured at fair value on a recurring basis:

14. COMMITMENT AND CONTINGENCIES

As at 30 September 2014, the Group had a capital commitment of USD 258,602 for acquisition of property, plant and equipment.

The contingent liability in respect of claims filed by erstwhile employees against the group companies amounts to USD 151,103 and USD 145,826 as on 30 September 2014 and 31 March 2013 respectively.

Guarantees: As at 30 September 2014 and 31 March 2014, guarantees provided by banks on behalf of the group companies to the revenue authorities and certain other agencies, amount to approximately USD 76,476 and USD 78,680 respectively.

15. ESTIMATES

The preparation of interim financial statements require management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.

In preparing these Unaudited Condensed Consolidated Interim Financial Statements, the significant judgments made by the management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements as at and for the years ended 31 March 2014 and 2013.

16. FINANCIAL RISK MANAGEMENT

The Group's financial risk management objectives and policies are consistent with those disclosed in the consolidated financial statements as at and for the years ended 31 March 2014 and 2013.