MAIS.L Regulatory News (MAIS)

London, September 9th, 2014

blur Group plc

("blur Group", the "Group" or the "Company")

Unaudited Interim Results

blur Group, the s-commerce company, announces its unaudited interim results for 6 months ended 30 June 2014.

Philip Letts, blur Group Plc CEO, introduces the interim results:

"I am pleased to present these interim results. They show a business that is growing and maturing in all aspects: technology, financial, governance, sales and management. In a year, we have quadrupled our revenue, trebled our bookings, completed a successful fundraising, kept our costs and headcount controls in line with our plan, and grown customer success through a 170% value increase from repeat customers. "

Summary Results

*before provision for share based payments

H1 2014 Highlights

● Strong Revenue Growth under conservative Revenue Recognition policies

303% increase in revenue growth over H1 2013 under revised Revenue Recognition policies (detailed later in this statement). The revision has led to H1 2013 revenues being re-stated (H1 2014 represents a 19% increase on FY 2013 revenue)

● Repeat Bookings & Project Value Growth demonstrates continued growth in Exchange usage

Total value of bookings in H1 2014 of $16.04m (H1 2013: $5.2m), partly driven by 170% increase in the value of projects from repeat customers in the period versus H1 2013.

● Operational Leverage emerging

Business growing strongly with same employee numbers as at end of 2013 (78 FTEs) reflecting the efficiency gains from the new blur 4.0 platform and associated business processes.

● Increase in Enterprise customers

New Enterprise customers (over $500m turnover): Regus, Danone, Solvay, Amazon, Sabre and Menard.

● International Customer Expansion

USA and UK lead in number of H1 2014 projects. Projects started from 15 other countries.

● Gross Profit of $1.5m, 27% of Revenue

The business model continues to generate predictable and consistent gross profit. The H1 2014 figures of $1.5m represents 27% of revenue.

● Successful $21m Fundraising

$21m fundraise (net proceeds after costs) in June which funds blur through to profit.

● New Technology Platform, blur 4.0, Launched

New 'mobile first' platform launched to improve the transactional efficiency of the Exchange.

Philip Letts comments further:

"The services market shows continuing and increasing acceptance of s-commerce, offering as it does, great advantages for both buyer and supplier of speed, simplicity and security.

The moves we have made to locate our Global HQ in Exeter are paying off, with a stable team who, along with our experienced C-Suite, are delivering our planned operational leverage so we can scale without adding significant cost. We continue to grow internationally, especially in the US, and are attracting larger business customers ahead of plan.

I am confident that we have in place all the elements required to manage our current and future growth and return value to our supportive shareholders. "

Trading Update

● Projects submitted continue to rise

6,096 total projects submitted as of 8 Sept 2014 (19 Sept 2013 2,675) with a combined value of over $285m (19 Sept 2013 $48m).

● Enterprise customers continue to adopt s-commerce

Two new major high street brand names are using the exchange with projects to date worth a total of $100K.

For further information, please contact:

blur Group plc: Barbara Spurrier Tel: +44 203 475 8188 investors.blurgroup.com

N+1 Singer: Shaun Dobson / Jen Boorer Tel: +44 20 7496 3000

Yellow Jersey: Philip Ranger/Anna Legge Tel: +44 7768 534641

About blur (Group) plc at blurgroup.com

blur Group is a technology company with a simple goal to make s-commerce1 a reality for every business. It is a public company listed on the London Stock Exchange's AIM market (BLUR). It is headquartered in the UK, with offices in the US and Europe.

blur's s-commerce1 platform, the Global Services Exchange, streamlines and automates the buying, delivery and payment of services. As of September 2014, over 50,000 businesses in 145 countries have used this platform to change the way they work, submitting over 6,000 projects with a combined value of $285m. Customers include Amazon, Danone, Broadridge, Coral, Momentive, the Financial Times, Berlitz, Butlins, GE Healthcare and Tyco

____________1 s-commerce refers to the buying and selling of business services using an online platform

H1 2014 Business Overview

blur's business model: an explanation

blur has a simple business model. The customer 'submits' their project online and, if they are a new customer, opens an account setting out details to start a contractual relationship with blur.

Following a process of honing the brief, collaborating with the customer on blur's platform using our online 'Project Space', the customer then agrees to the project being 'listed' on the Exchange. At this stage, the customer is committed to pay a fee of 10% of their stated budget for the project on the Exchange.

Upon listing, the brief is broadcast to blur's 'Expert Community' who can pitch for the project, confident in the knowledge that the project is both real and live. blur manages this pitch process and presents back to the customer a shortlist of the top pitches that best fit the brief. The customer chooses the best pitch for them and following final agreement on a 'Statement of Work', the project begins.

When the statement of work is agreed, the first invoice is raised for at least 10% of the project value and payments are made against this initial invoice and through the life of the project when agreed milestones are met. blur then pays the expert.

How blur engages customers

blur's customer engagement strategy is about acquiring and retaining customers, ensuring they exceed their objectives and experience success with every s-commerce transaction, so they become brand advocates with the strategic recognition that the Exchange has a positive effect on them and their business in specific and cumulative terms.

blur customers typically seek a cost effective solution to a tricky business problem. If that problem is solved by blur simply, quickly and easily - a successful experience - the customer, often a functional manager in a mid-sized business, will have clear business logic to use the Exchange again. Eventually, based on multiple successful experiences, the individual will likely end up as a champion for s-commerce and an advocate for blur's brand, both within their business and beyond.

H1 2014 Operational Review

The business has performed to expectations with several significant milestones reached during H1 2014:

Strong revenue growth under conservative Revenue Recognition policies

blur Group has seen a 303% increase in revenue H1 2014 vs H1 2013 on a like for like basis following the change to conservative Revenue Recognition policies that were implemented in April 2014. This period of strong growth reflects the continued global adoption of blur Group's business model. The successful release of blur 4.0 platform, with its mobile first design approach, the roll out of public pages and the drive into the Enterprise space are all contributing factors to the significant growth in revenue.

Total bookings for H1 increased by 206% at $16.04m (H1 2013: $5.2m) with enterprise adoption accelerating

The 206% increase in bookings reflects a number of key factors:

● Increase in the number of Enterprise customers (defined as organisations with turnover >$500m) adopting blur's platform including companies such as Regus, Danone, Solvay, Amazon, Sabre and Menard.

● A 170% increase in the value of projects from repeat customers in the period versus H1 2013, (the average project values as a result of the repeat nature is almost double that of the same period last year).

● Continued International growth, with projects started in H1 2014 from 17 countries, with the UK and USA contributing the majority. 

● Continued success in expanding the Partner network.

Focus on reaching profitability

blur Group completed its $21m fundraise (net proceeds after costs) in June which funds the Company through to profitability and enables the continued acceleration of new customer acquisition, technology development and regional expansion into Asia. The better than planned 1H 2014 EBITDA of $(3.995)m reflects the management's tight focus on achieving profitability.

The improved financial performance is supported both by strong gross profits at 27% of revenue in H1 2014, and the success of the new technology platform, blur 4.0, enabling the company to grow top line revenues while slowing the need for additional headcount. Staff levels are the same at the end of H1 2014 (78 FTE's) as at the start of the period reflecting the efficiency gains the Company is achieving. With the successful implementation of an enterprise-class financial management software system, the Group's management has better financial visibility and controls to manage the business tightly. The company also benefits from improved customer credit maturity as it expands into the Enterprise space and customers adopt the platform for more projects on a repeat basis.

Operational leverage

As the blur model matures and grows, the expected benefits of operational leverage are now becoming visible. One aspect of this is that the acquisition of Experts is becoming increasingly viral, with several Experts now becoming customers of the Exchange for their own business. 

International growth

International growth continues although the bulk of projects still come from the UK and USA, with the UK representing the highest level of contribution to H1 2014. Projects were submitted from 70 different countries including a significant number from Asia, reinforcing the previously announced strategy to set up a satellite Asian sales office in the next year.

Repeat customer growth

While the Global Services Exchange has been used for one-off, often difficult-to-source projects, there is increasing evidence, from repeat usage (value up 170% on the same period last year), that blur is now being used strategically by customers as a platform where they will source an increasing proportion of their services buying across an increasing number of Exchange Categories.

Enterprise customers

H1 2014 saw several new Enterprise customers including Amazon, who have used the Exchange for multiple projects requiring local expertise in different regions, Sabre, Incisive Media and Menard Inc. as well as repeat projects from longer standing Enterprise customers.

blur 4.0 technology platform launched

During the period, we launched blur 4.0, a re-write of our platform, which took a 'mobile-first' design approach so that customers can access the exchange from a tablet or smartphone as well as a PC. It should be noted that as of September 2014, 12% of our site usage came from mobile devices, a proportion that is growing strongly. The relaunch also allowed us to offer a better experience for all our users with fewer clicks and integrated help. Alongside blur 4.0 we also launched a new Premium Account tool that allows multiple individuals in a customer organisation to unlock new revenue streams.

HQ move

We are pleased to announce that our HQ move from London to Exeter is complete. We are already seeing the expected advantages of the move in terms of staff satisfaction, recruitment and interaction with the local business community. Since the HQ move to Exeter, it has enabled the establishment of experienced and qualified departments, including the Finance team focused on implementing our new finance system integrating rigorous controls and real-time reporting and cash management.

Partner and affiliate program

The strategic partnerships program is now firmly established including working with a consortium in the South West of England, with AMIS and most recently the first Asian partnership was established with Compass Group. There are now over 1,000 referral partners worldwide who provide a cost-efficient network to generate projects from different vertical sectors and segments and regions.

H1 2014 Financial Performance

The financial performance of the business has met our, and market, expectations for H1 2014 as detailed below:

$5.7m revenue, 303% year on year growth, in line with management's forecasts

The first half of the year has shown continued growth in revenues with recognised revenues reaching $5.7m and bookings increased to $16m, which represents the growing bank from which future revenues can be recognised. The profile of projects being submitted and kicked off on the Exchange shows the majority are within the $10k to $100k range. However, Enterprise customers are repeatedly using the exchange. blur Group revenue consists of:

1. Project revenue. This revenue is based on the project value that the customer submitted to the Exchange and confirmed in the statement of work of the deliverables. Project revenue is recognized in the period in which the project is delivered, as adjusted for the stage of completion of the project or milestone achievements.

2. Listing fee. This fee is a mandatory charge when a customer has listed a project but is waived if the project goes to "Kick off". If the customer decides to close their trading account or not to select an expert, the listing fee becomes payable. The project is listed when the customer submits the brief and opens the trading account. This covers the customer's use of their trading account and the cost of the time spent delivering pitches and running through the Exchange process.

blur recognizes project revenue on a gross basis, based on the project value confirmed on the statement of work, as our evaluation and assessment of the indicators under IFRS accounting standards supports the case that blur Group is acting as principal for each project in its dealings with its customers and experts.

Revenue recognition changes

As reported in May with the 2013 final results, we have reviewed and updated our revenue recognition policy in H1 2014 following the rapid growth of both the number of projects and the size of the individual projects. The new revenue recognition policy is both prudent and conservative.

Revenue is now recognised on the following basis:

● Projects where the revenue is recognised over the timeline of the project: when the customer chooses an expert and agrees the Statement of Work ('SoW'), the project has "kicked off" and a minimum of 10% is recognised on the basis that a listing fee equivalent would apply. If the timeline of the project life from date submitted to date kick off is greater than 10% of the lifecycle, the amount recognised would equate to the percentage of time elapsed during the lifetime of the project. The remainder of the project revenue would be recognised over the lifetime of the project on a month by month basis, as set out in the SoW.

● Projects where the revenue is recognised based on milestones or deliverables: when the customer chooses an expert and agrees the SoW, the project has "kicked off" and a minimum of 10% is recognised on the basis that a listing fee equivalent would apply. The remainder of the project revenue is recognised when milestones or deliverables are met as confirmed by the expert.

● The SoW sets out the project timelines, deliverables, invoicing and associated cash collectable. If projects include contingent elements, these are treated like milestones and may vary during the lifecycle of the project.

Re-stating 2013 revenue and cost of sales

As a result of the updated Revenue Recognition policy, H1 2013 revenue and associated costs have been amended to reflect the revised treatment and to enable comparison. The impact on H1 2013 has been to reduce recognised revenue from $3.4m to $1.4m and EBITDA has been reduced from $(1,560)k to $(2,018)k. The changes to our policies and processes have now been fully implemented into the Groups working practices and the results will be reflected in both this and upcoming announcements.

Strong revenue growth

The business continues to grow strongly with 3x growth in revenue (303%) over the comparable period (H1 2013) last year on an adjusted basis.

Strong bookings & project value growth

The total value of bookings in H1 2014, $16.04m, has surpassed by over 3x the figure in the comparable period last year (H1 2013: $5.2m). It is important to note that as part of our continued work to present visibility to shareholders, we have defined 'booking' to mean where the project has a fully signed-off 'SoW'. We believe that this change will provide greater certainty to the overall results of the business.

Successful fundraising

As reported previously, blur completed a $21m fundraise (net proceeds after costs) in June 2014 that is planned to take the Group through to profit. The fundraising will also be used to accelerate new customer acquisition, technology development, and regional expansion into Asia.

Gross profit of $1.5m, 27% of revenue

The business model continues to generate predictable and consistent gross profits. The H1 figures of $1.5m represents 27% of our revenue. This model has proved resilient and we see no reason for adverse change.

EBITDA of $(3.995)m, in Line with Management's expectations

The EBITDA of $(3.995)m is in line with expectations as we grow the business and expand both our offerings and our operating territories. The recent fundraising and our revenue growth will see the business, as previously announced, move towards profitability within two years.

Growth of the governance, Management and Corporate Sales teams

Critical to our ability to grow is ensuring we have the right people in place to govern and manage the business along with the right number of people who can sell into medium and large sized enterprises.

As previously announced, we are separating the roles of Chairman and Chief Executive and are making good progress with this appointment. Again as previously flagged, we are recruiting a Chief Financial Officer based in Exeter and we hope to announce an appointment soon.

Our sales teams are growing in both the UK and US and we are pleased to say that they are working well with a growing pipeline of business being generated.

Enterprise level financial system

During the period under review, following a period of parallel running with the old system, we have fully implemented Netsuite a SaaS based financial and business reporting system. This completes our programme of upgrades and integration and provides the business with a proven industry-standard and highly resilient SaaS based infrastructure providing applications from ERP to CRM.

Outlook & Current Trading

Current trading is meeting our growth expectations with growing pipelines and positive performance across all key indicators such as project submissions, projects listed, repeat projects and project size and value.

blur Group has now reached a point of business maturity and organisational stability. We believe this gives us a strong platform to develop for the next stage of growth and to profitability. We have been learning about the market as much as the market has been learning about us. We now know what works, what makes people want to work with us and do so again and again. We also know how best to manage large projects, from a sales, operational and financial perspective.

Consolidated financial information blur Group plc

Consolidated statement of total comprehensive income

The results reflected above relate to continuing activities.

The notes on pages 13 to 24 form part of these financial statements

Consolidated statement of financial position

The notes on pages 13 to 24 form part of these financial statements

Consolidated statement of changes in equity

The notes on pages 13 to 24 form part of these financial statements

The notes on pages 13 to 24 form part of these financial statements

Notes to the consolidated financial information

1. Accounting policies

Basis of preparation

The principal accounting policies adopted in the preparation of the financial statements are set out below. The policies have been consistently applied to all the years presented, unless otherwise stated.

These financial statements have been prepared in accordance with IAS34 "Interim financial statements".

The financial information for the six months ended 30 June 2014 and 30 June 2013 is unaudited and does not constitute the Group's statutory financial statements for that period, as defined under section 434 of the Companies Act 2006. The comparative information for the full year ended 31 December 2013 has, however, been derived from audited statutory financial statements for the respective periods. A copy of the 31 December 2013 statutory financial statements have been delivered to the Registrar of Companies. The auditor's report on those statements was unqualified, included reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report and did not contain a statement under section 498(2)-(3) of the Companies Act 2006.

The preparation of financial statements in compliance with adopted IFRS requires the use of certain critical accounting estimates. It also requires Group management to exercise judgment in applying the Group's accounting policies. The accounting policies have been applied consistently throughout the group for the purposes of the preparation of the interim statements

The Group financial statements consolidate the financial statements of the Company and its subsidiaries (together referred to as "the Group").

Going concern

The Directors have prepared and reviewed a business plan and cash flow forecast. The forecast contains certain assumptions about the level of future sales and gross margin achievable. These assumptions are the Directors' best estimate of the future development of the business.

The Directors are satisfied that the Group has adequate resources, following the recent successful fundraising, to continue in operational existence for the foreseeable future to achieve profitability, and accordingly, continue to adopt the going concern basis in preparing the financial statements.

Revenue Recognition

Revenue represents the gross amounts billed to clients in respect of revenue earned and other client recharges, net of discounts, sales taxes, accrued, and deferred amounts.

Each type of revenue is recognised on the following basis:

a) Project fees are recognised over the period of the relevant assignments or agreements, in line with project progress.

b) Listing fees are recognised as and when the event occurs and there is an expectation of collection.

Gross revenue is recognised as the Group acts as principal and not agent in its dealings with customers. The Group facilitates both commercial terms and the project management support for each project brief and, in some circumstances, retains the credit risk for the transaction. The Group is also responsible for the quality of the service delivery.

How Revenue Is Recognized

blur Group revenue consists of:

Project revenue. This revenue is based on the project value that the customer submitted to the exchange and confirmed in the statement of work of deliverables. Project revenue is recognized in the period in which the project is delivered, as adjusted for the stage of completion of the project or milestone achievements.

blur recognizes project revenue on a gross basis, based on the project value confirmed on the statement of work, as our evaluation and assessment of the indicators under IFRS accounting standards supports the case that blur Group is acting as principal for each project in its dealings with its customers and experts.

Revenue is recognised on the following basis:

Project where the revenue is recognised over the timeline of the project - when the customer chooses an expert and agrees the Statement of Works, the project has "kicked off" and a minimum of 10% is recognised on the basis that a listing fee equivalent would apply. If the timeline of the project life from date submitted to date kick off is greater than 10% of the lifecycle, the amount recognised would equate to the percentage of time elapsed during the lifetime of the project. The remainder of the project revenue would be recognised over the lifetime of the project on a month by month basis.

Project where the revenue is recognised based on milestones or deliverables - when the customer chooses an expert and agrees the Statement of Works, the project has "kicked off" and a minimum of 10% is recognised on the basis that a listing fee equivalent would apply. The remainder of the project revenue is recognised when milestones or deliverables are met.

The Statement of Work is a key document as this sets out the project timelines, deliverables, invoicing and associated cash collectable. In the event that projects include contingent elements, these are treated like milestones and may vary during the lifecycle of the project.

Listing fee. This fee is a mandatory charge when a customer listed a project and decided to close their trading account or not to select an expert. The project is listed when the customer submits the brief and opens the trading account. This covers the customer's use of their trading account and the cost of the time spent delivering pitches and running through the Exchange process.

As blur Group grows and evolves, the diversity of projects being submitted to the Exchange, both in terms of complexity, size and duration, continues to increase.

Intangible Assets

The development of the trading platform is capitalized as an intangible asset. Development activities involve a planned investment in the building and enhancement of the trading platform. The development expenditure of the platform is recognized as intangible assets when the following criteria are met:

1. It is technically feasible to complete the development of the platform so that it will be available for use;

2. Management intends to complete and use or sell the platform;

3. There is an ability to use or sell the platform;

4. It can be demonstrated how the platform will generate future economic benefits;

5. Adequate technical, financial and other resources to complete the development of the platform and to use or sell the use of the platform are available; and

6. The expenditure attributable to development of the platform can be measured reliably.

Expenditure being capitalized includes internal staff time and cost spent directly on developing the trading platform.

Capitalized development expenditure is measured at cost less accumulated amortization and accumulated impairment costs. The amortization period is over 48 months.

Trade receivables

Trade receivables are amounts due from customers for services provided in the ordinary course of business and are stated net of any provision for impairment. Impairment provisions are recognized when there is objective evidence (such as significant financial difficulties on the part of the counterparty or default or significant delay in payment) that the Group will be unable to collect all of the amounts due under the terms receivable, the amount of such a provision being the difference between the net carrying amount and the present value of the future expected cash flows associated with the impaired receivable. For trade receivables, which are reported net; such provisions are recorded in a separate allowance account with the loss being recognized within administrative expenses in the statement of comprehensive income. On confirmation that the trade receivable will not be collectable, the gross carrying value of the asset is written off against the associated provision.

Share-based payment

In accordance with IFRS 2 'Share-based payments', the Group reflects the economic cost of awarding shares and share options to employees and directors by recording an expense in the statement of comprehensive income equal to the fair value of the benefit awarded. The expense is recognised in the statement of comprehensive income over the vesting period of the award.

Fair value is measured by the use of a Black-Scholes model, which takes into account conditions attached to the vesting and exercise of the equity instruments. The expected life used in the model is adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations.

Expense is recognised for awards that ultimately vest, as long as the option holder remaining in employment with the Group.

Critical accounting estimates and judgements

The Group makes certain estimates and assumptions regarding the future. Estimates and judgements are continually evaluated based on historical experience and other factors, including the expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may differ from these estimates and assumptions. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the financial year are discussed below.

Judgements and accounting estimates and assumptions

(a) Revenue recognition

Revenue is recognized on a gross basis, as our evaluation and assessment of the indicators under IAS 18 supports the fact that blur is acting as principal for each project. The factors that are considered and prove decisive in the conclusion of this assessment include the following:

• blur has the latitude to agree the fee for each project with a customer;

• blur has primary responsibility providing the services to a customer. blur are responsible for the quality of the service delivery, delivered on time, budget and to a sufficiently high standard. This includes the management of the service delivery of the expert; and

• blur facilitates both commercial terms and the project management for each project.

Although blur passes on some of the credit risk onto the expert it engages to deliver the services to its customers, it does not consider this is sufficiently persuasive in light of the other factors noted above to suggest that accounting for the transaction as principal is not appropriate.

Revenue from projects is assessed on an individual project by project basis with revenue earned being ascertained based on the stage of completion of the project which is estimated using a combination of milestones in the contract and a proportion of total time expected to be required to undertake the contract which has been performed. Estimates of the total time expected to undertake the contracts are made on a regular basis and subject to management review.

The amounts by which revenue exceeds billing is shown as part of prepayments and accrued income

(b) Intangible Assets

Intangible assets include the capitalised development costs of the trading platform. These costs are assessed based on management's view of the technology team's time spent on projects that enhance the trading platform, supported by internal time recording and considering the requirements of IAS 38 'Intangible assets'. The development cost of the platform is amortised over the useful life of the asset. The useful life is based on the management's estimate of the period that the asset will generate revenue, which is reviewed annually for continued appropriateness. The carrying value is tested for impairment when there is an indication that the value of the assets might be impaired. When carrying out impairment tests these would be based upon future cash flow forecasts and these forecasts would be based upon management judgement. Future events could cause the assumptions to change; therefore this could have an adverse effect on the future results of the Group.

 (c) Share based payments

Share options are measured at their fair value utilising the Black-Scholes valuation model, which takes into account conditions attached to the vesting and exercise of the equity instruments. The expected life used in the model is adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations.

2. Revenue segmental analysis

The Group currently has one reportable segment for the provision of services and categorises all revenue from operations to this segment. Revenues are derived from three main geographic areas: UK, USA and Rest of the World. Revenue by origin of geographical area for all entities in the group is as follows:

3. Loss from operations

The operating loss as at 30 June 2013 includes the following:

4. Loss per share

Loss per ordinary share has been calculated using the weighted average number of shares in issue during the relevant financial periods. The basis for calculating the basic loss per share is as follows:

Due to the loss in the period the effect of the share options were considered anti-dilutive.

5. Intangible Assets

6. Cash and cash equivalents

Cash and cash equivalents comprise balances on bank accounts, cash in transit and cash floats held in the business. Finance charges are accounted for on an accruals basis and charged to the statement of comprehensive income when payable.

Cash and cash equivalents are held in Pound Sterling, US dollars & Euros, and placed on deposit in UK & US banks.

7. Trade & other receivables

All amounts shown under trade and other receivables are due within one year. Trade receivables principally comprise amounts outstanding for sales to customers and are net of provision for doubtful recoverability. An impairment review of outstanding trade receivables is carried out at the period end and a specific amount provided for.

8. Loans and borrowings

Book values approximate to fair values for the unsecured loan only. The convertible debt is stated at fair value at initial recognition and at amortized cost subsequently.

9. Share capital

Ordinary shares of £0.01 carry the right to one vote per share at general meetings of the Company and the rights to share in any distribution of profits or returns of capital and to share in any residual assets available for distribution in the event of a winding up. The shares are denominated in Pounds Sterling and translated at the historic rate.

The table below shows the movements in share capital for the half year:

In June 2013 the Company issued 5,077,263 ordinary shares of £0.01 each at a consideration of £1.50 per share which was placed in the market.

In June 2014 a further issue of 17,460,329 ordinary shares of £0.01 each at a consideration of £0.75 per share which was placed in the market. Raising $22 million before costs.

The Group has not issued any partly paid shares nor any convertible securities, exchangeable securities or securities with warrants. The Group does not hold any treasury shares.

10. Share based payments

In compliance with the requirements of IFRS 2 on share-based payments, the fair value of options granted during the period or which were granted in previous periods but had an extended period before vesting is calculated either using the Black Scholes option pricing model or on the basis of the fair value of remuneration waived in consideration for the grant.

11 Events after the reporting date

Surrender of share options

Share options granted to directors and employees in January 2014 at an exercise price of £7.92, have been surrendered. The annual cost of options issued to Philip Letts and Kara Cardinale under the Black Scholes method was more than $600,000 annually. To reduce the impact of the cost to blur's income statement and enable achievement of breakeven at an earlier point, all the options granted to employees at £7.92 have been surrendered in H1 2014. Philip Letts and Kara Cardinale will surrender their options as at today's date, 9th September 2014.

12. Related party transactions

Compensation and other related payment to key management personnel (including directors):

(1) The consultancy fees were paid to Reviva LLC, a company in which K Cardinale has an interest. These were paid for K Cardinale's director services.

(2) The service fees were paid to Cambridge Financial Partners LLP for accounting and consulting services. Barbara Spurrier has an interest in this entity.

13 Control

The ultimate controlling party is that of Mr. P Letts, a director of the Company.