NETD.L Regulatory News (NETD)

3 September 2012

NetDimensions (Holdings) Limited

("NetDimensions" or the "Company")

Interim Results for the six months ended 30 June 2012

NetDimensions (LSE AIM: NETD; OTCQX: NETDY), a global provider of enterprise-class performance, knowledge and learning management related software and services, announces its interim results for the six months ended 30 June 2012.

Financial Highlights

·; 34% revenue growth to US$5.9m (H1 2011: US$4.4m)

·; 57% increase in deferred revenue to US$4.4m (H1 2011: US$2.8m)

·; 75% reduction in adjusted operating loss* to $0.1m (H1 2011: US$0.4m loss)

·; 32% increase in net cash position to US$7.8m (H1 2011: US$5.9m)

* Before non-cash items of US$ 0.2m in intangible asset amortization, US$ 0.1m in share-based compensation, a US$0.2m of provision for impairment of available-for-sale financial assets.

Operations Highlights

·; 42 new clients added through direct sales and reseller channels including;

o Denso Sales UK

o Metersbonwe Group in China

o Best Buy International Trading (Shanghai) Co. Ltd.

o SCA Asia Pacific

·; 2 new resellers added;

o Larmer Brown Consulting Limited in the UK

o Enomaly (Beijing) Technology Limited in China

·; 21% increase in net headcount to 120 (H1 2011: 99)

·; Sustained investment in new products

·; Released new versions of the NetDimensions Talent Suite

Roger Durn, Chairman of NetDimensions, commented: 

"NetDimensions performed well in the first half of the year. We saw strength across all geographic regions and even though revenue visibility is limited as we approach the seasonally important final quarter of the year, the Board is confident that NetDimensions is trading in line with full-year expectations. We are delighted to have continued our significant international growth in revenue and profit, all organic, despite challenging economic times.

Delighting our clients leads to more business and greater revenue and profitability, which means continued investment in new offices, staff, innovation, marketing and technology, while at the same time delivering consistent growth in earnings and dividends for shareholders.

Our products continue to attract industry attention and client commitment. We punch significantly above our weight in the industry and continue to increase sales among buyers in the strategically important target markets in which we operate."

Enquiries:

CHAIRMAN'S STATEMENT

Financial Summary

The Company recorded US$5.9m in revenue for the first half of 2012, a 34% increase over the same period in the previous year.

·; North America sales grew at 39%

·; Europe, Middle East and Africa at 24%

·; Asia Pacific (excluding China) at 40%

·; China sales grew at 159%.

The Company also noted across-the-board products and services growth with license sales revenue increasing by 65%, hosting sales by 29%, software customisation and implementation sales by 35%.

NetDimensions' profits are traditionally seasonally weighted to the second half of the year and the first-half adjusted operating loss was US$0.1m, with a reported loss before tax of US$0.5m; an almost 30% improvement over the same period last year.

This first-half loss includes US$0.2m in intangible asset amortization, US$0.1m in non-cash, share-based compensation and US$0.2m for the provision of impairment of available-for-sale financial assets.

At the time of the 2010 acquisition of NetDimensions' client accounts from our then reseller Digital Learning Marketplace (DLM), the AIM-listed company formerly known as Intellego, NetDimensions invested almost US$0.2m in DLM shares which were then held as an available-for-sale investment. The shares declined in value and Management made the provision in the entire investment. If the non-cash transactions are excluded, the Company achieved a close-to-break-even operating performance in the first half.

During the last six months, the Company increased headcount by 21% to 120 staff, across our US and HK offices. We intend to continue to hire in the engineering, sales and sales support areas. The staff additions enabled the Company to better execute on our direct sales strategy, as demonstrated by the increase in our direct sales percentage of 72% of total orders in the period, up from 59% of total orders in the first six months of 2011.

In addition, the Company's end-of-period deferred revenue balance increased 57% to US$4.4m.

NetDimensions ended the period with a strong cash position of US$7.8m and no debt. This is almost a US$2m increase from the end-first-half of 2011 figure of US$5.9m, and equates to 19.7p in cash per share. The Board anticipates that the Company's cash position will continue to improve during the second half of the year.[1]

Operations Review

During the first half, NetDimensions released versions 8.0 and 8.1 of our NetDimensions Talent Suite offerings.

In addition, the Company signed two new resellers in order to further expand our geographic footprint.

First-half new client wins came from both direct and partner-led sales worldwide. In the six months under review we won 42 new clients, many of which operate in highly-regulated, compliance-driven environments. These clients aim to manage risk and generate efficiencies through the use of NetDimensions' products. The new client sales made up 42% of the total orders for the period, a 2% increase from the same period last year.

Post Period Events

The Company started trading on the OTCQX market in the US on 7 August 2012 providing a platform for US investors.

Bersin & Associates, a respected talent management industry analyst group, released a sponsored research bulletin on NetDimensions (available on the company's website) characterizing NetDimensions as a unique provider and a company to consider.

We released version 8.3 of Talent Suite in August and look forward to our official iPad/Android mobile app release before the end of the third quarter.

Current Trading and Outlook

Since 30 June 2012, NetDimensions has been trading in line with expectations. We continue to see opportunities for growth in our businesses in China, the rest of Asia Pacific and in other emerging markets. We have not yet seen any serious negative impact from the Eurozone crisis but remain cautious as we move forward.

NetDimensions' strong cash position on 30 June 2012 at US$7.8m provides a solid financial base for the Company to manage any unexpected short-term regional economic problems that may arise in the second half of the year.

In addition, the Company intends to continue to invest in additional commercial relationships to accelerate growth of the business.

We believe our target markets will continue to be concentrated in highly-regulated and compliance-driven industries and in outwardly-focused, extended-enterprise deployments.

These last six months have been a successful period, with the Company recording impressive revenue growth. The Board is confident that this strong trading will continue in the second half of the year and that the Company remains well-positioned to continue to grow.

Roger Durn

Chairman of the Board

3 September 2012

NETDIMENSIONS (HOLDINGS) LIMITED

CONDENSED CONSOLIDATED INCOME STATEMENT

FOR THE SIX MONTHS ENDED 30 JUNE 2012

The notes on pages 10 to 20 are an integrated part of this condensed consolidated interim financial information.

NETDIMENSIONS (HOLDINGS) LIMITED

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDED 30 JUNE 2012

The notes on pages 10 to 20 are an integrated part of this condensed consolidated interim financial information.

NETDIMENSIONS (HOLDINGS) LIMITED

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2012

The notes on pages 10 to 20 are an integrated part of this condensed consolidated interim financial information.

NETDIMENSIONS (HOLDINGS) LIMITED

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTHS ENDED 3O JUNE 2012

Attributable to equity holders of the Company

The notes on pages 10 to 20 are an integrated part of this condensed consolidated interim financial information.

NETDIMENSIONS (HOLDINGS) LIMITED

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTHS ENDED 3O JUNE 2012

Attributable to equity holders of the Company

The notes on pages 10 to 20 are an integrated part of this condensed consolidated interim financial information.

NETDIMENSIONS (HOLDINGS) LIMITED

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE SIX MONTHS ENDED 30 JUNE 2012

The notes on pages 10 to 20 are an integrated part of this condensed consolidated interim financial information.

NETDIMENSIONS (HOLDINGS) LIMITED

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION

1 GENERAL INFORMATION

NetDimensions (Holdings) Limited was incorporated inthe Cayman Islands as a limited liability company underthe 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 activity 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 2011 and 2012 have not been audited.

2 BASIS OF PREPARATION AND ACCOUNTING POLICIES

The Company has a financial year end date of 31 December. This condensed consolidated interim financial information for the six months ended 30 June 2012 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 2011, which have been prepared in accordance with International Financial Reporting Standards ("IFRS") issued by the International Accounting Standards Boards ("IASB").

Except as described below, the accounting policies applied are consistent with those of the annual financial statements for the year ended 31 December 2011.

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

(a) Effect of adopting amendments to standards and interpretations

The following amendments to standards and interpretations are also mandatory for the Group's financial year beginning on 1 January 2011. The adoption of these amendments to standards and interpretations does not have any significant impact to the results and financial position of the Group.

NETDIMENSIONS (HOLDINGS) LIMITED

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION

2 BASIS OF PREPARATION AND ACCOUNTING POLICIES (CONTINUED)

(b) New standards, amendments to standards and interpretation that have been issued but are not effective

The following new standards, amendments to standards and interpretation have been issued but are not effective for the financial year beginning on 1 January 2012 and have not been early adopted by the Group:

The Group will adopt the above new or revised standards, amendments 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 statements 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 2011, with the exception of changes in estimate that are required in determining the provision for income tax.

NETDIMENSIONS (HOLDINGS) LIMITED

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION

4 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 Group operates in three geographic segments, North America, Europe, Middle East and Africa ("EMEA") and Rest of the World. These geographic segments are the basis on which the Group reports its primary segment information, as presented below:

Segmental information for the six months ended 30 June 2012:

NETDIMENSIONS (HOLDINGS) LIMITED

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION

4 REVENUE AND SEGMENT INFORMATION (CONTINUED)

Segmental information for the six months ended 30 June 2011:

NETDIMENSIONS (HOLDINGS) LIMITED

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION

5 OPERATING LOSS

Operating loss is stated after charging the following:

Note a: Provision for impairment of available-for-sales financial assets and loss on disposal of an associate have been included in other (losses)/gains, net.

6 FINANCE INCOME, NET

NETDIMENSIONS (HOLDINGS) LIMITED

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION

7 LOSS PER SHARE

The calculation of the basic and diluted loss per share is based on the following data:

Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares granted under from the Company's share options scheme.

The adjustments for the dilutive potential ordinary shares for share option is to determine the number of shares that could have been acquired at fair value (determined as the average periodic market share price of the Company's shares) based on the monetary value of the subscription rights attached to outstanding share options. The number of shares calculated as below is compared with the number of shares that would have been issued assuming the exercise in full of the share options.

8 INTEREST IN AN ASSOCIATE

NETDIMENSIONS (HOLDINGS) LIMITED

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION

9 INTEREST IN A JOINTLY CONTROLLED ENTITY

10 Property, plant and equipment

11 Intangible assets

NETDIMENSIONS (HOLDINGS) LIMITED

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION

12 SHARE CAPITAL