MORT.L Regulatory News (MORT)

Dissemination of a Regulatory Announcement that contains inside information according to REGULATION (EU) No 596/2014 (MAR)

Mortice Limited

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

Results for the Half Year ended 30 September 2016

Mortice Limited (AIM: MORT), the AIM listed security and facilities management company, announces its unaudited results for the half year ended 30 September 2016.

Financial results highlights:

· Revenues from operations grew by 79% to $91.1 m (HY 2015: $51.0m)

o Man Guarding business increased by 40% to $48.5m (HY 2015: $34.5m)

§ Contributing 53% of group revenues

o Facilities Management business revenue grew 158% to $42.5m (HY 2015: $16.5m)

§ Contributing 47% of group revenues

o 22% ($10.4m) growth from Indian Operations

o 57% ($29.7m) growth from the Office & General and Frontline

§ O&G - Revenue $29m (HY 2015 $4.0m)

§ Frontline - Revenue $5m (HY 2015 - nil)

o Revenue mix (HY-2016)

§ India - 63%

§ UK - 32%

§ Singapore - 5%

· Adjusted EBITDA* increased more than 200% to $5.0m (HY 2015 $1.3m)

o $1.85m of EBITDA increase from O&G and Frontline acquisitions.

§ O&G -$0.90m (HY 2015 -$ 0.1 m)

§ Frontline -$0.95m (HY 2015 - Pre Acquisition period)

· Adjusted profit before taxation* increased to $2.6m (449%) (HY 2015: $0.3m)

· Net debt of $14.6m (FY 2016: $14.5m)

* Adjusted EBITDA and profit before tax excludes $0.5m of gains from financial liabilities measured at fair value

Operational highlights:

· 257 new clients added during the period

o including Amazon, Torrent Pharma, JW Marriott, Thermal Power Corporation India, Renault Nissan, Samsung, Procter & Gamble, British School, Clariant , UOH , GAM-UK

· More than 77% of income generated from repeat business

· Appointment of two new Non-Executive Directors

· Commencement of £55m contract with the University of Hertfordshire

· O&G and Frontline were fully integrated into the business

Post Period End:

· Placing to raise £2.3m in December 2016 (the "Placing")

o Proceeds to reduce indebtedness, providing balance sheet flexibility to pursue various growth opportunities

o Effects of Placing expected to be earnings enhancing

· O&G appointed to London Universities' £60m cleaning framework

· Continuation of strong trading with the Company remaining on track to at least meet market expectations for full year ending 31 March 2017

Major Manjit Rajain, Executive Chairman of Mortice Limited, said:

"The strong momentum achieved during the period reflects the Company's ability to win new contracts across all parts of the business. Our underlying performance was especially pleasing, but the Group's performance has also been assisted by the performance of our acquired businesses, which have benefited from the backing of Mortice to accelerate their expansion. We are focused on becoming a global business operating in multiple geographic regions and are excited by the potential to further extend our reach.

"Our existing operations provide a solid foundation for growth as we continue to benefit from high levels of visibility thanks to long-term contracts and a retention rate of over 77%. We have a blue-chip client base with a growing ability to cross sell our services and, as such, we view the future with confidence. Additionally, we have a proven ability to execute acquisitions and will continue to evaluate opportunities to further consolidate our position.

"Furthermore, we have a strong pipeline of potential new and existing opportunities. There is significant scope for scalability across the Group's target markets and the contracts generated to date demonstrate the attraction of the enlarged Group's service offering. As such, we believe that visibility will continue to improve throughout the remainder of the year and we very much look forward to updating the market with further developments in due course."

About Mortice Limited

Mortice (AIM: MORT), is an AIM listed security and facilities management company, incorporated in Singapore and based in India with additional operations in Singapore and the UK.

Mortice operates under two brands, in India:

§ Peregrine - provision of guarding and security services to a wide range of clients from blue-chip companies, smaller businesses, commercial and private properties, and individuals.

§ Tenon - provision of a full range of facilities management services to corporate occupiers, owners and developers of real estate. Clients include some of the world's most respected blue chip and home-grown companies. Within the Tenon group, Mortice also offers security surveillance services through its subsidiary Soteria and mechanical and engineering services via Rotopower

The business is growing and profitable and is focused on expanding its geographical footprint and growing through targeted acquisitions, as well as organically.

In 2015 the Company established Tenon UK and through this wholly owned subsidiary, acquired UK based Office & General Group Limited (O&G"), an independent property service company specialising in cleaning and providing support services such as environmental solutions and built fabric maintenance in the UK. In addition, the Company acquired a 51% majority stake in Singapore-based security company Frontline Security Pte. Ltd, and has an option to acquire an additional 25% within three years.

Chairman's Statement

Overview

This was another period of excellent growth for the Company, as it generated strong organic growth with like-for-like profits and sales significantly ahead of the same period last year. In addition, the Company benefited from strong contributions from O&G and Frontline, which further strengthened the Company's overall performance during the period and will provide further opportunities for the Group to leverage its client base of international blue-chip clients. The Group won several high profile new contracts during the period with facilities management growing particularly strongly on the back of the strong contribution from O&G. With the acquisitions now fully bedded in, further benefits are expected during the second half with significant scope for new business from the framework agreement with London Universities.

India continues to provide a strong cornerstone for growth. Importantly, India is expected to continue to expand rapidly and underpin further growth with the security market expected to grow in excess of 20% per year. There is significant scope for the Company to grow its security service business at an even faster rate, as legislation is dictating a shift towards 'compliant' security services, benefitting established participants such as Peregrine.

Furthermore, the facilities management industry, in India, is also expected to continue its pace of growth as the trend towards outsourced facilities management continues. By way of example, in India the IT industry currently outsources approximately 60 per cent. of its facilities management, whilst the retail and manufacturing sectors only outsource approximately 15 per cent.

Results

Revenues grew 79% to $91.1m (HY 2015: $51.0m) during the period with profits of $3.1m (HY 2015: $0.3m). The underlying performance remained strong with growth across all parts of the business.

 $34m of sales was contributed by O&G and Frontline.

Adjusted EBITDA for the period was $5.0m compared to $1.3m for the first half last year with adjusted PBT for the period $ 2.6m, compared to $0.3m in the first half last year. The Company remains confident about its prospects for the financial year ending 31 March 2017 as it benefits from business synergies and consolidation of the acquired businesses.

During the period, the Company's increased net borrowings remained broadly consistent at $14.6m.

Currency fluctuations impacted revenue growth in dollar terms from India. Sales grew 27% from INR 3.02 Bn to 3.85INR Bn, however once converted the increase was 22%, growing from $47.0m to $57.4m during the period.

The adjusted PBT was INR 146.7 m ($2.2m) and adjusted PAT was INR 109m ($1.6m) compared to INR 80.6m ($1.3m) and INR 54.7m ($0.9m) respectively, from the same period last year.

Sales from our guarding services division, Peregrine Services, grew 27% to $44m (HY 2015: $35m), accounting for 48% of group revenues. Key client wins included Amazon, Torrent Pharma, JW Marriott, Thermal Power Corporation India, Renault Nissan, Samsung, Procter & Gamble.

*Conversion rate 1 INR: $0.01

International Growth

The acquisitions of Frontline and O&G significantly broadened our geographic reach while also providing foundations for us to build on and develop existing relationships they had in place - as highlighted by the £55m contract win with the University of Hertfordshire, worth £5.3m a year, providing a strong reference point for the capabilities of the enlarged Group. Furthermore, the Company was delighted by O&G's appointment to London Universities' £60m cleaning framework. The framework covers the provision of cleaning and associated support services for London Universities Purchasing Consortium ("LUPC") members in Greater London and South East England over a three-year period.

As part of the Framework, member institutions may from time to time invite suppliers within the Framework to participate in tenders for the provision of cleaning services. Whilst O&G is not an exclusive provider of services to this Framework, it is the only contractor to be appointed to all three elements of the LUPC Framework and so is well positioned to benefit from this agreement.

O&G provides exposure to the UK market and contributed revenues of $29m representing 32% of total group revenues during the period. In addition, long-term orders continue to ensure high levels of visibility.

Singapore-based Frontline also contributed positively with revenues of $5m. The focus here remains on finding innovative ways of generating business and increasing profit.

Soteria

Soteria, which offers managed remote surveillance services using an IBM platform, gained further momentum. We are seeing increased client interest and many institutional clients have visited our command centre.

Our trading continues to be robust and, with increased government focus on infrastructure and manufacturing, the demand for our services is well placed to increase. Significantly there is the potential for a global rollout. As well as a growing domestic client base, Soteria has clients based in the UK and the US.

Board Appointments

In May 2016 the Company appointed Pallavi Bakhru and Richard Gubbins as Non-Executive Directors. Their appointments help strengthen the Board as it continues its growth strategy, particularly in an international context, given both of their experience in cross-border enterprises.

Placing

Given the Group's expected continued rapid expansion in India and abroad, the Company has raised £2.3 million in order to rebase the capital structure to better reflect the Group's current geographical and market positioning. The funds will be used to reduce dependence on expensive working capital facilities and shift towards a combination of equity and term debt funding.

Following the Placing, the Group will have additional flexibility to execute on its growth plan and, where appropriate, to seek to accelerate growth further through acquisitions and investment in organic growth opportunities.

Outlook

The strong momentum achieved during the period reflects the Company's ability to win new contracts across all parts of the business. Our underlying performance was especially pleasing and is somewhat hidden by the strong performance of our acquired businesses. We are focused on becoming a global business operating in multiple geographic regions and are excited by the potential to further extend our reach. As such, the Placing will provide us with the flexibility to pursue a variety of growth opportunities.

Our existing operations provide a solid foundation for continued growth as we continue to benefit from high levels of visibility thanks to long-term contracts and a retention rate of over 77%. We have a blue-chip client base with a growing ability to cross sell our services and, as such, we view the future with confidence. Additionally, we have a proven ability to execute acquisitions and will continue to evaluate opportunities to further consolidate our position.

Furthermore, we have a strong pipeline of potential new and existing opportunities. There is significant scope for scalability across the Group's target markets and the contracts generated to date demonstrate the attraction of the enlarged Group's service offering. As such, we believe that visibility will continue to improve throughout remainder of the year and we very much look forward to updating the market with further developments in due course.

Manjit Rajain

Chairman

28 December 2016

The unaudited interim financial statements will be available on the Company's website: www.morticegroup.com.

Unaudited condensed consolidated statement of financial position

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

The annexed notes form an integral part of and should be read in conjunction with these financial statements.

Unaudited Consolidated statement of profit or loss and other comprehensive income

(All amounts in United States Dollars, unless otherwise stated

The annexed notes form an integral part of and should be read in conjunction with these financial statements.

Unaudited Consolidated statement of changes in equity

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

Unaudited Consolidated statement of cash flows

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

Notes to the unaudited condensed interim financial statements

1. Introduction

Mortice Limited ('the Company' or 'Mortice') was incorporated on 9 January 2008 as a public limited Company in the Republic of Singapore. The Company's registered office is situated at 36 Robinson Road, #17-01 City House, Singapore 068877.

The Company was listed on the Alternative Investment Market (AIM) of the London Stock Exchange on 15 May 2008. The Company together with its subsidiaries (hereinafter, together referred to as 'the Group') is engaged in providing services such as guarding services, facilities management services, mechanical and engineering maintenance services, installation of safety equipment and sale of such equipment. The Group's operations are spread across India. The various entities comprising the Group have been defined below.

These unaudited condensed consolidated financial statements were approved by the Board on ___________.

The immediate and ultimate holding company is Mancom Holdings Limited, a company incorporated in British Virgin Islands.

2. Basis of preparation

These condensed consolidated interim financial statements are for the six months ended 30 September 2016 have been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the European Union (EU), 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 consolidated financial statements of the Group for the year ended 31 March 2016.

The functional currency of the entities within the Group (other than the subsidiaries in Sri Lanka & United Kingdom) is Indian Rupees ('INR'). The functional currency of subsidiary in Sri Lanka is Sri Lankan Rupees & in United Kingdom is GBP. The Company has a functional currency of United States Dollars ('US$'). The group's management has chosen to present the consolidated financial information in US$, the functional currency of the Company.

All inter-company transactions and balances are eliminated on consolidation and the unaudited condensed consolidated interim financial statements reflect external transactions only. The accounting periods of the subsidiaries are coterminous with that of the Company.

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 year ended 31 March 2016.

4. Estimates

When preparing the interim financial statements, management undertakes a number of judgments, estimates and assumptions about recognition and measurement of assets, liabilities, income and expenses. The actual results may differ from the judgments, estimates and assumptions made by management, and will seldom equal the estimated results.

The judgments, estimates and assumptions applied in the interim financial statements, including the key sources of estimation uncertainty were the same as those applied in the Group's most recent annual financial statements for the year ended 31 March 2016.

5. Segmental reporting

The Group has reported segment results based on internal management reporting information that is regularly reviewed by the Group's Chief Executive Officer and Chairman. Chief Executive Officer and Chairman have concluded that the operating segment disclosure should be based on service offered by Group.

The reportable segments identified by the group are: guarding services and facility management services.

The revenue and profit generated by each of Group's business segments are summarized as follows:

The totals presented for the Group's operating segments reconciliation to the Group's key financial

figures presented in its consolidated financial statements are as follows:

September 2016 September 2015

6. Property, plant and equipment - The acquisitions of property, plant and equipment, for the six months ended 30 September 2016 are US$ 894,682 (six months ended 30 September 2015 excluding property, plant and equipment acquired under business combination: US$ 373,358 and for the twelve months ended 31 March 2016 are US$ 1,120,106 excluding property, plant and equipment acquired under business combination).

7. Earnings per share

Both basic and diluted earnings per share have been calculated using the profit or loss attributable to shareholders of Mortice Limited as the numerator. Calculation of basic and diluted profit per share is as follows:

8. RELATED PARTY TRANSACTIONS

A. Related party relationship

Disclosure of Related parties and relationship between the parties:

Ultimate Holding Company Mancom Holdings Limited

Entities on which KMP exercise significant influence: Peregrine Services Private Limited

(where transaction occurred) Micro Azure Computers Private Limited

Peregrine Protection Services Private Limited

Related parties key management and entities in which the key management has interest or control.

Significant related party transactions, other than those disclosed elsewhere in the financial statements, are as follows:

Transaction with key management: September

The outstanding balance payable to related parties under the category of key management as at 30 September 2016 and 30 September 2015 is US$ 51,119 and US$ 47,115 respectively. These have been included under salaries payable under Note 16.

9 FINANCIAL INSTRUMENTS

(Financials assets and liabilities measured at amortised cost)

Fair values

The carrying amount of financial assets and liabilities with a maturity of less than one year is assumed to approximate their fair values.

However, the Group and the Company do not anticipate that the carrying amounts recorded at financial position date would be significantly different from the values that would eventually be received or settled.

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