NETD.L Regulatory News (NETD)

NetDimensions (Holdings) Limited

("NetDimensions" or the "Company" or the "Group")

Final Results for the year ended 31 December 2015 

NetDimensions (AIM: NETD; OTCQX: NETDY), a global provider of performance, knowledge, and learning management systems, is pleased to announce its final results for the year ended 31 December 2015.

Highlights

· 12% revenue growth to US$25.4M (2014: US$22.7M)

· 85% reduction in the adjusted EBITDA loss to US$0.5M (2014: US$3.4M)

· 98% increase in average first year deal size for direct new clients to US$210K (2014: US$106K)

Graham Higgins, Chairman of NetDimensions, commented: "The Company made solid progress in 2015 in terms of revenue growth, substantially reducing the reported loss and increasing the focus on high consequence industries. The Company will continue to invest in software engineering to provide a product that is best in class for high consequence use cases."

The annual report and notice of annual general meeting, to be held on Monday 20 June 2016 at 2:30pm on the 18th floor, Siu On Centre, 188 Lockhart Road, Hong Kong will be available on the Company's website and sent to shareholders shortly.

Enquiries:

About NetDimensions

Established in 1999, NetDimensions (AIM: NETD; OTCQX: NETDY) is a global provider of performance, knowledge and learning management solutions.

NetDimensions provides companies, government agencies and other organizations with talent management solutions to personalize learning, share knowledge, enhance performance, foster collaboration and manage compliance programs for employees, customers, partners and suppliers.

Recognized as one of the talent management industry's top-rated technology suppliers, NetDimensions has been chosen by leading organizations worldwide including ING, Cathay Pacific, Chicago Police Department, Geely Automotive, Fugro Group and Fresenius Medical Care. 

NetDimensions is ISO 9001 certified and NetDimensions hosted services are ISO 27001 certified.

For more information, visit www.NetDimensions.com or follow @netdimensions on Twitter.

Chairman's Statement for the Year Ended 31 December 2015

I am pleased to report that the Company has made good progress in the year achieving another record high for reported revenue, which increased 12% to US$25.4M (2014: US$22.7M). The growth in revenue was achieved with a lower operating cost base than the prior year, resulting in a substantial reduction in the adjusted EBITDA loss.

Financial Highlights

· 12% revenue growth to US$25.4M (2014: US$22.7M)

· 85% reduction in the adjusted EBITDA loss to US$0.5M (2014: US$3.4M)

· 98% increase in average first year deal size for direct new clients to US$210K (2014: US$106K)

Financial Summary

The financial results for the year ended 31 December 2015 saw good progress with both revenue and invoiced sales higher than prior year. Revenue increased by 12% to US$25.4M (2014: US$22.7M) and invoiced sales increased 8% to US$25.7M (2014: US$23.9M), which was in line with management's expectations.

The Group continues to improve direct sales activity, generating invoiced sales from direct clients of US$22.3M representing 87% (2014: US$20.3M, 85%) of total invoiced sales. Increasing focus on direct sales in high consequence industries has also led us into bigger deals with the average first year deal size for new direct clients achieving US$210K in the year (2014: US$106K). Invoiced sales to clients in high consequence industries represented 84% of total invoiced sales, an increase of 16% over the prior year, in line with our strategy of becoming a leading supplier of compliance and learning solutions to clients operating in high consequence industries.

The North America region was the largest market for the Group, comprising 46% of Group revenues. Europe, Middle East & Africa ("EMEA") accounted for 44% of Group revenues and Asia Pacific including China accounted for 7%. The rest of the world made up 3%.

The Group saw substantial growth in the North America market with revenues up 25% to US$11.6M (2014: US$9.3M) on the back of a number of new client wins in high consequence industries most notably for government agencies.

In addition, the Group ended the year with a strong deferred revenue balance of US$8.8M (2014: US$8.6M).

The Group continues to focus on supplying software via its global hosted secure SaaS service and we are pleased to report that revenues from this product offering increased by 27% to US$10.5M (2014: US$8.3M).

The Group's adjusted EBITDA loss, excluding net foreign exchange losses of US$0.3M, intangible asset amortisation of US$0.5M and non-cash share-based payments of US$0.4M, was US$0.5M (2014: loss of US$3.4M).

NetDimensions' loss before tax was US$1.9M (2014: US$5.0M). The substantial reduction in the loss was a result of the increased revenue and lower selling and operating expenses, which reduced by 3% to US$22.7M (2014: US$23.5M). The lower selling and operating expenses were a result of reduced overheads within the professional services division, after being re-structured and reduced spend on sales and marketing. 

Cash used in operating activities was US$2.5M in the year (2014: US$2.1M). The Group's cash balance at the end of the year was US$12.0M (2014: US$4.9M), benefiting from net proceeds of US$10.5M from the fund raise completed in November 2015. The accounts receivable balance was US$8.4M (2014: US$7.5M) at the year end.

I am pleased to announce that the Board recommends a final dividend of GBP0.625 pence (or US$0.9 cents) to be paid from the share premium account. If approved, the dividend will be paid on 29 July 2016, with an ex-dividend date of 30 June 2016 to shareholders on the register with an associated record date of 1 July 2016. The Company's AGM will be held on Monday 20 June 2016 at 2:30pm in the afternoon on the 18th floor, Siu On Centre, 188 Lockhart Road, Hong Kong.

An income tax provision of US$0.2M (2014: US$0.1M) was made in the year.

Operations Review

In 2015 the Board focused the business on sustainable sales growth within high consequence industries, re-aligning the operating cost base and increasing spend on engineering to provide a better product and service to clients operating in high consequence industries. I am pleased to report on the following progress:

· US$10.5M raised from share placing in November 2015

· Invoiced sales to clients in high consequence industries represented 84% (2014: 78%) of total invoiced sales for the year

· NetDimensions won two Brandon Hall Group bronze awards for technology excellence for the NetDimensions Talent Suite in the following categories:

o Best Advance in Learning Management Technology for Compliance Training - Managing Compliance Training and Certifications of Employees with Multiple Job Roles/Assignments

o Best Advance in Learning Management Technology -  Dynamic, Adaptive Language Management of Training Content and Exams/Assessments

· 35% increase in Research and Development investment to US$3.5M (2014: US$2.6M), all of which was expensed to the consolidated income statement

· 34 new clients added in the year through direct and reseller channels with a combined contracted value of US$3.9M. The new clients include Port Authority of New York and New Jersey, Moody's Analytics, Inc., Medical University Hospital Authority, Toshiba Information Equipment (Phils), Inc., Canadian Institute for Health Information, and PATH. These new clients operate in a number of high consequence industries including precision manufacturing, healthcare, financial services, life sciences and government agencies.

Outlook

The Company made solid progress in 2015 in terms of revenue growth, substantially reducing the reported loss and increasing the focus on high consequence industries. The Company will continue to invest in software engineering to provide a product that is best in class for high consequence use cases. The global market for high consequence use cases within the talent management systems market is substantial and the Company is gearing itself to better serve this segment of the market and take additional market share.

Finally, we would like to thank all of the people who work at NetDimensions for their hard work, loyalty and dedication in 2015.

We look forward to another successful year with them, along with our clients, partners and shareholders in 2016.

NETDIMENSIONS (HOLDINGS) LIMITED

CONSOLIDATED INCOME STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2015

NETDIMENSIONS (HOLDINGS) LIMITED

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2015

NETDIMENSIONS (HOLDINGS) LIMITED

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2015

NETDIMENSIONS (HOLDINGS) LIMITED

CONSOLIDATED STATEMENT OF FINANCIAL POSITION (CONTINUED)

AS AT 31 DECEMBER 2015

On behalf of the Board

_______________________ __________________________

Jay Mervin Shaw Matthew Chaloner

Director Director

NETDIMENSIONS (HOLDINGS) LIMITED

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2015

Attributable to owners of the Company

NETDIMENSIONS (HOLDINGS) LIMITED

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (CONTINUED)

FOR THE YEAR ENDED 31 DECEMBER 2015

Attributable to owners of the Company

NETDIMENSIONS (HOLDINGS) LIMITED--

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2015

NETDIMENSIONS (HOLDINGS) LIMITED

NOTES TO THE FINANCIAL STATEMENTS

1 Notes to the consolidated statement of cash flows

 (a) Reconciliation of loss before income tax to net cash used in operations:

 (b) In the consolidated statement of cash flows, proceeds from disposal of property, plant and equipment comprise:

2 Proceeds from issuance of ordinary shares 

On 5 November 2015, the Company and the placing agent ("Panmure Gordon") entered into a placing agreement (the "Placing Agreement"), pursuant to which the Company appointed Panmure Gordon as an agent to procure independent third parties to purchase 12,000,000 new ordinary shares at the placing price of GBP60 pence per share. The transaction was completed on 10 November 2015. Accordingly, 12,000,000 ordinary shares of US$0.001 each were issued at a premium of US$0.919 each. The proceeds from issue of these new ordinary shares of US$11,036,160, net of the direct transaction cost of US$581,445, was credited to the share capital and share premium account. These new ordinary shares rank pari passu in all respects with the existing ordinary shares.

3 Cash and bank balances