NETD.L Regulatory News (NETD)

21 September 2015

NetDimensions (Holdings) Limited

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

Half Yearly Report

NetDimensions (AIM: NETD; OTCQX: NETDY), a global provider of performance, knowledge, and learning management systems, is pleased to announce its half year results for the period ending 30 June 2015.

Financial Highlights

· 16% revenue growth to US$10.6m (2014 H1: US$9.1m)

· 31% increase in recurring revenue from our global hosted secure Software as a Service ("SaaS") service to US$5.1m (2014 H1: US$3.9m)

· First year average contract size increased 125% to US$209k

Operations Highlights

· Number of active users were 3.9m at the end of the period (2014 H1: 3.7m), excluding 1m not for profit users

· Invoiced sales to clients in high-consequence industries represented 92% (2014 H1: 83%) of total invoiced sales for the period

· 18 new clients added in the period through direct and reseller channels with a combined contracted value of US$3.1m. These new clients operate in a number of high consequence industries including healthcare, financial services, transportation, energy, and manufacturing

Graham Higgins, Chairman of NetDimensions, commented: "The Company made good progress during the period in terms of total revenue growth generally and recurring SaaS revenue in particular while the Company continues to execute on its strategy of focusing on high consequence industries.

The Company continues to build on the progress made in the first half of the year and, being second half weighted, we expect a stronger performance over the remainder of the current financial year."

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 six months ended 30 June 2015

The Company has made good progress in the six months to 30 June 2015 and I am pleased to report that revenue for the period was US$10.6m, an increase of 16% (2014 H1: US$9.1m).

Financial Summary

The financial results for the period ending 30 June 2015 saw good progress, with both revenue and invoiced sales higher than the prior period. Total revenue increased by 16% to US$10.6m (2014 H1: US$9.1m) and invoiced sales by 8% to US$9.8m (2014 H1: US$9.1m), which was in line with management's expectations.

Our increased focus on direct sales in high consequence industries has led us into bigger deals with the average first year deal size for new direct clients increasing to US$209K in the period (2014 H1: US$93K). Invoiced sales to clients in high consequence industries represented 92% of total invoiced sales (2014 H1: 83%), which is in line with our strategy of becoming a leading provider of Talent Management Systems and related compliance solutions to high consequence industries.

The Group generated good growth in the North America market with revenues up 19% to US$5.0M (2014 H1: US$4.2M) on the back of a number of new client wins in high consequence industries, in particular the Healthcare sector.

The North America region was therefore the largest market for the Group during the period, comprising 48% of Group revenues. Europe, Middle East & Africa ("EMEA") accounted for 39% of Group revenues and Asia Pacific including China 8%. The rest of the world made up 5%.

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 31% to US$5.1m (2014 H1: US$3.9m).

The Group's adjusted loss before tax, excluding net foreign exchange losses (US$0.2m), intangible asset amortisation (US$0.3m) and non-cash share-based payments (US$0.1m), was US$1.9m (2014 H1: loss of US$2.0m). NetDimensions' loss before tax was US$2.5m (2014 H1: loss of US$2.4m).

Cash used in operating activities was US$1.3m in the period (2014 H1: US$0.9m) resulting in a cash balance at the end of the period of US$3.5m (2014 H1: US$7.1m) and an accounts receivable balance of US$3.5m (2014 H1: US$4.3m).

Operations Review

I am pleased to report that we have made the following progress in the period against our stated business plan:

· Number of active users were 3.9m at the end of the period (2014 H1: 3.7m), excluding 1m not for profit users

· Invoiced sales to clients in high-consequence industries represented 92% (2014 H1: 83%) of total invoiced sales for the period

· 18 new clients added in the period through direct and reseller channels with a combined contracted value of US$3.1M. These new clients operate in a number of high consequence industries including healthcare, financial services, transportation, energy, and manufacturing

Summary and outlook

The Company made good progress during the period in terms of total revenue growth generally and recurring SaaS revenue in particular while the Company continues to execute on its strategy of focusing on high consequence industries.

The Company continues to build on the progress made in the first half of the year and, being second half weighted, we expect a stronger performance over the remainder of the current financial year."

CONDENSED CONSOLIDATED INCOME STATEMENT

FOR THE SIX MONTHS ENDED 30 JUNE 2015

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDED 30 JUNE 2015

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2015

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTHS ENDED 30 JUNE 2015

Attributable to equity holders of the Company

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTHS ENDED 30 JUNE 2015

Attributable to equity holders of the Company

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE SIX MONTHS ENDED 30 JUNE 2015

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION

1 GENERAL INFORMATION

NetDimensions (Holdings) Limited (the "Company") was incorporated in the Cayman Islands as a limited liability company under the Companies Law (2000) Revision on 10 July 2000. The address of its registered office is P.O. Box 309, Ugland House, South Church Street, George Town, Grand Cayman, Cayman Islands, British West Indies. The address of its head office and principal place of business in Hong Kong is 17/F., Siu On Centre, 188 Lockhart Road, Wan Chai, Hong Kong.

The principal activities of the Company and its subsidiaries (together the "Group") are licensing of computer software and the provision of related services.

The Company's ordinary shares were admitted to trading on the Alternative Investment Market ("AIM") operated by the London Stock Exchange. On 7 August 2012, the Company's ordinary shares were also admitted to trading on the OTCQX platform operated by OTC Markets Group, Inc.

This condensed consolidated interim financial information is presented in United States Dollars ("US$"), unless otherwise stated.

This condensed consolidated interim financial information for the six months ended 30 June 2014 and 2015 have not been audited.

2 SUMMARY OF SIGIFICANT ACCOUNTING POLICIES

(a) Basic of preparation

The Company has a financial year end date of 31 December. This condensed consolidated interim financial information for the six months ended 30 June 2015 has been prepared in accordance with International Accounting Standard ("IAS") 34, "Interim Financial Reporting". The condensed consolidated interim financial information should be read in conjunction with the annual financial statements for the year ended 31 December 2014, which have been prepared in accordance with International Financial Reporting Standards ("IFRS") issued by the International Accounting Standards Boards ("IASB").

(b) Significant accounting policies

Except as described below, the accounting policies applied are consistent with those of the annual financial statements for the year ended 31 December 2014, as described in those annual financial statements.

Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected total annual earnings.

(i) Effect of adopting new and amendments to standards and interpretations

During the year, the Group has adopted all of the new standards, amendments to standards and interpretations issued by IASB that are relevant to the Group's operations and mandatory for annual periods beginning on or after 1 January 2015. The adoption of these new standards, amendments to standards and interpretations did not result in a significant impact on the results and financial position of the Group.

(ii) New standards, amendments to standards and interpretations that have been issued but are not yet effective:

The Group will adopt the above new standards, amendments to standards and interpretations to existing standards as and when they become effective. The Group has already commenced the assessment of the impact to the Group and is not yet in a position to state whether these would have a significant impact on its results of operations and financial position.

3 ESTIMATES

The preparation of interim financial information requires 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 this condensed consolidated interim financial information, the significant judgments made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were that same as those that applied to the consolidated financial statements for the year ended 31 December 2014, with the exception of changes in estimate that are required in determining the provision for income tax.

4 FINANCIAL RISK MANAGEMENT

The Group's activities expose it to a variety of financial risks: market risk (including foreign exchange risk and cash flow interest rate risk), credit risk and liquidity risk.

The condensed consolidated interim financial information does not include all financial risk management information and disclosures required in the annual financial statements, and should be read in conjunction with the Group's annual financial statements for the year ended 31 December 2014.

There have been no changes in the risk management department since year end or in any risk management policies since year end.

5 REVENUE AND SEGMENT INFORMATION

Revenue represents income from software licensing and the provision of hosting, support and maintenance, software customisation and implementation services during the period and is analysed as follows:

The chief operating decision-maker ("CODM") has been identified as the executive directors of the Company. Management has determined the operating segments based on the reports reviewed by the CODM that are used to assess performance and allocate resources. The CODM considers the business from the geographic perspective, including North America, Europe, Middle East and Africa ("EMEA"), Asia Pacific and Rest of the World, which are also the Group's reportable operating segments.

The Group's revenue is mainly derived from customers located in North America, EMEA, Asia Pacific and Rest of the World, while the Group's facilities and other assets are located predominantly in North America, EMEA, Asia Pacific and Rest of the World.

Segment performance is evaluated based on segment results, which is a measure of adjusted loss before income tax. The adjusted loss before income tax is measured consistently with the Group's loss before income tax, except that amortisation of intangible assets - customer base, unallocated corporate expenses, finance income and finance costs are not allocated to individual segment.

Segment assets consist primarily of property, plant and equipment, intangible assets, accounts and other receivables, prepayments and deposits. Cash and bank balances for corporate use are excluded from segment assets.

Segmental information for the six months ended 30 June 2015 is as follows:

Segmental information for the six months ended 30 June 2014 is as follows:

6 OPERATING LOSS

Operating loss is stated after charging the following:

7 FINANCE (COSTS)/INCOME, NET

8 LOSS PER SHARE

Basic

Basic loss per share is calculated by dividing the loss attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the period.

Diluted loss per share is the same as basic loss per share since the exercise of the outstanding share options would have an anti-dilutive effect for the six months ended 30 June 2014 and 2015.

9 PROPERTY, PLANT AND EQUIPMENT

10 INTANGIBLE ASSETS

11 CASH AND BANK BALANCES

12 SHARE CAPITAL

Note:

(a) During the period ended 30 June 2015, an aggregate of 273,500 share options (30 June 2014: 673,000) were exercised with proceeds of US$ 95,335 (30 June 2014: US$237,347). The weighted average market value per share at the date of exercise for these share options exercised was GBP80.4 pence (30 June 2014: GBP 72.3 pence).

13 EQUITY SETTLED SHARE-BASED PAYMENTS

(a) Share option scheme

Pursuant to the share option scheme (the "Plan") approved and adopted on 18 September 2000, the Board of Directors of the Company may offer eligible employees, directors and sales agents rights to subscribe for shares of the Company. The Plan shall be valid and effective for a period of ten years. Pursuant to an ordinary resolution passed at the annual general meeting of the Company on 10 June 2011, the Plan expired on 17 September 2010 is renewed for a further period of ten years, and is to expire on 16 September 2020 (the "Renewed Plan"). The maximum aggregate number of ordinary shares of US$0.001 each which may be issued pursuant to the Renewed Plan is 10,000,000 ordinary shares according to an ordinary resolution passed at the annual general meeting of the Company on 9 June 2014. Options are granted at a price equal to the average market price of the Company's shares on the date of grant. The vesting period is ranged from one year to five years from the date of grant. If the options remain unexercised ten years after the date of grant, the options will expire. Options are forfeited if the relevant option holder leaves the Group before the options vest.

The following table discloses the movements of the Company's share options:

Share options outstanding during the periods ended 30 June 2015 and 30 June 2014 are as follows: