Half Yearly Report

29 September 2015

SyQic plc

("SyQic" or the "Group" or the "Company")

Half Yearly Report

SyQic plc, (AIM:SYQ), the fast growing OTT provider of paid video content across mobile and internet enabled consumer devices, announces its unaudited results for the six month period ended 30 June 2015.

FINANCIAL HIGHLIGHTS

· Revenue increased by 30% to £6.0m (H1 2014: £4.6m)

· Operating profit increased by 43% to £1.38m (H1 2014: £0.97m)

· Profit after tax increased by 43% to £1.37m (H1 2014: £0.96m)

· Earnings per share increased by 23% to 5.09p from 4.14p

· Net cash at 30 June 2015 of £0.58m (H1 2014: £0.45m)

OPERATIONAL HIGHLIGHTS

· Agreement with telecoms provider UK GlobeTel Ltd ("Globe UK") to launch a UK based co-branded Filipino version of the Yoomob service

· Korean focussed OTT service, Cool2vu, launched in Malaysia, Indonesia and Singapore

· Cool2vu service expanded into Europe, South America, Central America, India and the Philippines

· Heads of Terms agreement with ASIA eUniversity, to host courses and deliver educational programmes to its global student population

· Since launch, to the end of June, the Cool2vu service attracted 134,000 new users across 182 countries including in high growth markets such as Brazil, India and France

POST PERIOD HIGHLIGHTS

· As of 27th September 2015, the Cool2vu video service had been accessed by more than 427,000 users across 198 countries since launch with an average session time of 26 minutes

Jamal Hassim, Group Chief Executive Officer of SyQic, commented: "Our performance during the first half of 2015 has been very pleasing. While the Yoomob service continued to grow revenue through its transactional revenue model, our new Korean focused OTT service Cool2vu has seen rapid growth in user numbers, particularly in the period since the end of June. SyQic is now well placed to leverage its unique industry position as the global video streaming market expands and we continue to look for new geographical markets and new revenue opportunities to drive the business forwards."

For further information:

Notes to Editors:

About SyQic

SyQic is a fast-growing provider of live TV and on-demand video content across mobile and internet-enabled consumer devices. Incorporated in Jersey with offices in Malaysia and the UK, it has a significant service footprint in Singapore, Indonesia and Malaysia.

The Group launched its new Korean content service called "Cool2vu" in Malaysia, Singapore and Indonesia in January 2015 streaming high demand Korean content initially utilising an advertising revenue model. The service has since been expanded to include Europe, South America, Central America, India and the Philippines.

Chief Executive's Statement 

The Board is pleased to report that trading results continued to improve in line with management expectations during the first six months of the year. Revenues increased 30% to £6.0m from £4.6m in the corresponding period of 2014 and profit after tax increased 43% to £1.37m from £0.96m. Operating costs have been kept under control during the period demonstrating the strong level of operational gearing within our business.

The strong profit after tax performance delivered earnings per share ("EPS") of 5.09p, representing growth of 23% against 4.14% EPS growth for the comparative period last year.

At the half year the Company has made a charge against reserves of £0.7m for translation losses into our reporting currency of Sterling. Due to the ongoing pressure on the Malaysian Ringgit, management expect that the Company will show further foreign exchange translation losses in the second half of the year. SyQic's exposure to currency fluctuations in the Southeast Asian region are mitigated by the Company having launched its services elsewhere across the globe in 2015, including Europe, South America and Central America.

The Company ended the period with net cash of £0.58m (H1 2014: £0.45m) and trade receivables of £8.4m (H1 2014: £5.4m). The Company has received some large payments from its customers during the first half of 2015 and management are focused on further improving the level of collections in the second half of the year. As the company is now coming to the later stages of the payment plans struck with its primary customer for recovery of 2012 and 2013 billings, all trade receivables are now classed as current assets. In addition the Company has access to a £3m working capital facility should it ever be required.

There is no doubt consumption of video over the internet is growing strongly and the Board believes it is critical that any player in the video streaming market will require a strong catalogue and a robust and global mobile delivery capability. During the period the Company invested in its content catalogues and undertook a strategic software development programme to allow the Company to increase its addressable market by enabling access by users of Android and iOS internet-enabled mobile, tablet devices and personal computers. SyQic's platforms are now fully compatible with all Android and iOS devices providing access to approximately 80% of the global mobile market.

Strategic launch of Cool2vu

Korean popular culture is becoming increasingly established as a global brand and demand for Korean music and drama programming has recently surged in many parts of the world, especially across new and emerging markets. This can be observed by the actions of some Korean broadcasters who are actively entering these new markets with pay TV channels.

In August 2014, the Company acquired the operating assets of a leading Malaysian-based Korean drama streaming service, which it successfully rebranded and launched across Malaysia, Indonesia and Singapore as Cool2vu in January 2015. In March 2015, the service was expanded into Europe, India, Philippines and South and Central America.

A significant proportion of Cool2vu customers are from Southeast Asia but we are now seeing encouraging growth patterns particularly in South America and also in Europe. The Cool2vu service has started to generate advertising revenue and this is a revenue stream we expect to increase substantially as the user base continues to grow and the service attracts new users in other markets. In addition to the advertising revenue generated by Cool2vu, our strategy is to also explore revenue generation opportunities in the areas of subscription and e-commerce as well as to cross sell the platform's content to our core telco customers.

The Cool2vu mobile compatible service is fully translated into seven key languages and the content can be viewed in over 20 languages giving the service a fully addressable audience of 3.13 billion people across four geographic regions. Since launch, to the end of June 2015, the Cool2vu service was accessed by more than 132,000 new users. By the end of September, the service will have been accessed by more than 430,000 new users across 198 countries, demonstrating a strong upward growth trajectory for the remainder of 2015.

The Board firmly believes it has achieved a timely market entry as demand for the video content it supplies has never been more highly sought. All indications are that smartphone ownership and usage is set to grow substantially and is leading to a growing demand by consumers for access to video content over the internet. SyQic is at the forefront of advances in mobile video technology and is well positioned to scale globally and maximise revenue streams.

Yoomob

Our major mass-market Telco offering, Yoomob, has been enhanced with the delivery of an upgraded web/WAP based service for major Telcos in Southeast Asia. SyQic has built on its existing Web streaming expertise to further enhance the Yoomob video service offering, while retaining its capability to reach a wide range of handset devices and deliver high quality video experiences at very low bit-rates. Yoomob has now been enhanced to make use of higher streaming speeds where available, hence offering higher quality video playback to a wider range of smartphones - thereby expanding our addressable user base. We continue to leverage the strong relationships that the Company has developed with key telcos throughout Southeast Asia to ensure an affordable subscription model that maximises existing mobile data services.

In addition, back-end improvements have been made to the Yoomob billing engine to facilitate enhanced WAP based billing to those carriers who have upgraded from the traditional SMS based billing. This expands further our billing capability, which now offers expanded payment capabilities such as scratch cards, premium SMS, WAP, debit and credit cards.

Several new deployments are planned for Yoomob in Southeast Asia in the second half of 2015 while further landings in Asia and Southern Africa are at an advanced discussion stage.

Outlook 

We are pleased with our performance during the first half of 2015, during which time we achieved strong growth in revenue and earnings per share.

While our core telco business remains strong with Yoomob generating revenues of £6.0m during the first half of 2015, the re-branding and launch of Cool2vu during the period has enabled us to realign our content portfolio towards high-demand Korean drama and music. This has enabled us to expand our customer base, create advertising revenue streams and provide a number of new revenue opportunities and cost synergies going forward.

These positive strategic developments, combined with the continuing profitable growth of our core business post period end, enables the Company to look forward to the future with confidence.

Jamal Hassim 

Chief Executive 

29 September 2015 

UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTH PERIOD ENDED 30 JUNE 2015

UNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2015

UNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2015 (continued)

UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE SIX MONTHS ENDED 30 JUNE 2015

Notes to the unaudited interim report

For the six months ended 30 June 2015

1. General information

The company is a public company limited by shares and incorporated in Jersey. The company is domiciled in Jersey and the registered office is 13-14 Esplanade, St Helier, Jersey, Channel Islands, JE1 1BD.

The principal activity of the company is a provider of live TV and on-demand paid video content across various types of internet-enabled consumer electronics devices.

2. Basis of preparation

The interim financial information has been prepared on the basis of the accounting policies set out in the annual report and accounts for the year ended 31 December 2014, which have been prepared in accordance with International Financial Reporting Standards as adopted for use by the European Union.

The interim financial information is unaudited and does not constitute statutory accounts as defined in the Companies (Jersey) Law 1991.

The interim financial information has been drawn up using accounting policies and presentation expected to be adopted in the Group's full financial statements for the year ending 31 December 2015. Any new standards that will be adopted in full for the first time in the year-end financial statements do not have a material impact on this interim financial information.

The statutory financial statements for the year ended 31 December 2014 were prepared under IFRS and IFRIC interpretations as adopted by the European Union and in accordance with the requirements of the Companies (Jersey) Law 1991. The auditors reported on those financial statements; their Audit Report was unqualified, but contained an emphasis of matter in respect of the credit exposure to the Group's largest customer.

Certain comparatives have been restated to give a more consistent presentation against current year amounts.

The interim financial information set out in this announcement was approved and authorised for issue by the board of directors on 25 September 2015.

Copies of this financial information will be available on the Company's website.

3. Earnings per share

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

Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential shares.

4. SEGMENTAL ANALYSIS

IFRS 8 requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the chief operating decision maker (which takes the form of the board of directors of the Company) as defined in IFRS 8, in order to allocate resources to the segment and to assess its performance.

Based on management information there is only one operating segment. Revenues are reviewed based on the products and services provided.

The Directors of the Company consider the principal activity of the Group to be that of a provider of OTT live TV and on-demand paid video content across mobile, internet-enabled consumer electronics devices such as mobile phones and tablets, and to consummate one reportable segment, that of the provision of OTT live TV and on-demand paid video content services.

Revenues derived from major customers, who individually represent 10% or more of total revenue are as follows

All revenues were generated by operations in Asia in the year ended 31 December 2014 and the six months ended 30 June 2015.

5. INCOME TAX EXPENSE

The income tax expense of £8,000 comprises a provision for current taxation arising from the Group's operations in Malaysia.

There is no taxation arising from other comprehensive income.

6. RELATED PARTY INFORMATION

Three personal guarantees and indemnities which were entered into between December 2011 and July 2013, and which are more fully described in the Company's annual report for the year ended 31 December 2014, remained in place throughout the six month period ended 30 June 2015.

7. SEASONALITY OF THE GROUPS BUSINESS

There are no seasonal factors which materially affect the operations of any company in the Group.

- Ends -