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23 June 2015

IMIMOBILE PLC

(“IMI” or “the Company” or “the Group”)

Audited Preliminary Results for the year ended 31 March 2015

IMImobile PLC, a London based global technology company which provides software and services for mobile engagement today announces its Audited Preliminary Results for the year ended 31 March 2015.

Financial highlights:

Revenue up 13% to £48.9m (2014: £43.4m)

Gross profit up 8% to £30.0m (2014: £27.9m)

EBITDA1 up 27% to £9.2m (2014: £7.2m)

Adjusted profit after tax2 up 48% to £5.6m (2014: £3.8m)

Loss after tax on a statutory basis of £3.4m (2014: £3.9m profit) reflecting share based payments

and costs in relation to IPO and acquisition activities

Good contribution from Europe with organic3 annual gross profit growth of 26%

Managed solution growth in MEA of 16%

Net cash generated from operating activities of £8.2m, representing operating cash conversion4 of

90% (2014: 121%)

Free cash flow5 of £6.6m (2014: £6.9m)

Cash and cash equivalents at 31 March 2015 of £14.6m (2014: £9.3m)

Operational highlights:

New major client wins in all regions

Key new contracts signed in India with revenue benefit expected in FY16

Renewal of several major contracts including the BBC, a multi-national North African telecoms

operator and a major motoring organisation

Listed on AIM in June 2014 raising net proceeds of approximately £7m for the Company (after

considering fees and the acquisition of the Group) to support significant growth opportunities

Acquisition and successful integration of TxtLocal Limited (TextLocal), trading well since

acquisition in October 2014

1 EBITDA is defined as operating loss / profit before depreciation, amortisation, fees incurred in relation to IPO and acquisition

activities, impairment charges, share based compensation and excluding the impact of the disposal of subsidiaries. 2 Adjusted profit after tax is defined by the Group as loss/profit after tax before fees incurred in relation to IPO and acquisition

activities, impairment charges, share based compensation, de-recognition of deferred tax assets and excluding the impact of the disposal of subsidiaries. See note 6 for a reconciliation. 3 Excluding the impact of the TextLocal acquisition.

4 Calculated as net cash from operating activities as a proportion of EBITDA.

5 Free cash flow defined as net cash from operating activities less purchases of intangibles, property, plant & equipment.

23 June 2015

Outlook

The 2016 financial year has started well, building on the successes of 2015. Trading is in line with

Directors’ expectations.

The contracts won last year will help to enhance revenues and profitability in 2016 and beyond.

Deployments and new product developments are progressing as planned and the high mix of repeat and

recurring revenues gives us confidence and good visibility. We continue to invest in sales and marketing

activities which we anticipate will underpin our organic growth forecasts for the coming years.

We also continue to innovate and are excited about the changes in our marketplace and we expect to use

our financial and cash strength to further our ambitions to consolidate a fragmented market and accelerate

our reach into enterprise customers.

IMImobile remains well placed to take advantage of the macro trends affecting the markets in which we operate and we remain confident about our prospects for the year ahead.

Jay Patel, Chief Executive Officer of IMImobile PLC, commented: “2015 was a transformational year for IMImobile, listing on the AIM market in June 2014 and also making the acquisition of TextLocal which has been successfully integrated into the business and is generating profit for the Group. We continue to deliver good performance across the key financial metrics whilst continuing to invest in our technology roadmaps and geographic expansion. We expect organic growth in all our key markets and will use our financial and cash strength to further our ambitions to consolidate a fragmented market. We are well positioned to exploit the macro trends around increasing mobile usage and digitisation of business operations and we remain confident about our prospects for the future.”

An analyst meeting will be held at 09.30am today at the offices of Buchanan, 107 Cheapside, London, EC2V 6DN. To attend please contact Buchanan.

Cautionary statement This announcement contains forward-looking statements that are based on current expectations or beliefs, as well as assumptions about future events. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements often use words such as anticipate, target, expect, estimate, intend, plan, goal, believe, will, may, should, would, could, is confident, or other words of similar meaning. Undue reliance should not be placed on any such statements because they speak only as at the date of this document and, by their very nature, they are subject to known and unknown risks and uncertainties and can be affected by other factors that could cause actual results, and IMImobile’s plans and objectives, to differ materially from those expressed or implied in the forward-looking statements. There are a number of factors which could cause actual results to differ materially from those expressed or implied in forward-looking statements. Among the factors that could cause actual results to differ materially from those described in the forward-looking statements are; increased competition, the loss of or damage to one or more key customer relationships, the outcome of business or industry restructuring, changes in economic conditions, currency fluctuations, changes in laws, regulations or regulatory policies, developments in legal or public policy doctrines, technological developments, the failure to retain key management, or the key timing and success of future acquisition opportunities or major investment projects. IMImobile undertakes no obligation to revise or update any forward-looking statement contained within this announcement, regardless of whether those statements are affected as a result of new information, future events or otherwise, save as required by law and regulations.

23 June 2015

For further information please contact:

About IMImobile PLC IMImobile is a leading provider of software and services for mobile engagement. Its services, delivered in over 60 countries in Europe, the Americas, MEA and India, help its clients to communicate and transact with their customers more effectively on mobile devices. The Company’s solutions allow customers to use mobile as a channel to create new revenue streams, as a CRM and customer engagement channel, and as a channel to improve business operations. IMImobile’s DaVinci suite of products is modular, scalable and delivered through cloud infrastructure which is integrated into mobile operator networks, internet services and social media platforms. The products and solutions have helped IMImobile establish a blue-chip client base of leading mobile operators and global enterprises. Key customers include Vodafone, O2, Telefonica, Aircel, Airtel, BSNL, AT&T, MTN, France Telecom, Centrica, Coca-Cola, Universal Music, Tata, the AA, the BBC and major financial institutions. The Company is headquartered in London with regional head offices in Hyderabad, Atlanta and Dubai and has approximately 680 employees worldwide.

IMImobile PLC Jay Patel, Chief Executive Officer Mike Jefferies, Group Finance Director

c/o Buchanan Tel: +44 (0)20 7466 5000

Buchanan - Financial PR adviser Mark Edwards / Gabriella Clinkard / Stephanie Watson

Tel: +44 (0)20 7466 5000 [email protected]

SPARK Advisory Partners – Nominated adviser Matt Davis / Sean Wyndham-Quin

Tel: +44 (0)203 368 3550

Whitman Howard – Joint Broker Ranald McGregor-Smith

Tel: +44 (0)207 659 1234

WH Ireland – Joint Broker Adrian Hadden

Tel: +44 (0)207 220 1666

23 June 2015

Chairman’s Statement

Following another year of strong growth for the Group I am delighted to introduce this year’s preliminary results announcement. The year to 31 March 2015 was one which saw the Company list on AIM, make and successfully integrate a significant acquisition and continue to grow and generate cash. Our product and solution offering has never been stronger and we are helping more clients than ever with engaging their customers on mobile devices.

Since founding the Group we have been focused on the opportunities created by the expansion of mobile operator networks and their capacity to carry data services. The continued evolution and growth of these networks and smartphones provides the foundations for new business opportunities. Since we started the business we have remained entrepreneurial in our approach to product and market development and we shall remain so in what has become a complex and competitive eco-system.

We maintain our focus on profitable and cash generative growth and continue to expand the international footprint of our business to fully leverage the intellectual property created by the Group. I am very happy to have further consolidated our position in Europe, welcoming TextLocal to the IMImobile family this year. TextLocal’s market leading platform for small and medium sized businesses complements the existing IMImobile offering and presents another exciting opportunity to leverage our international footprint.

In the year to 31 March 2015 revenues grew by 13% to £48.9m (2014: £43.4m) with significant growth coming from Europe and managed solutions contracts across the Middle East and African region. Although the growth has been tempered by continuing declines from our Indian and South East Asia region, the year ended positively with contract wins and new deployments which will contribute to the region in the coming year. On a statutory basis the Group made a loss after tax of £3.4m in the year to 31 March 2015 (2014: £3.9m profit), after charging £7.3m of share based payment expense and £1.6m of non-recurring IPO and acquisition related costs. On an adjusted basis the profit after tax of the Group was £5.6m

1 (2014: £3.8m).

We operate in competitive and fast moving markets and I would like to thank the wider IMImobile team whose commitment and drive have made our successes possible. We continue to invest in, incentivise and reward our stable and growing team. This enables us to attract and retain the best talent who can drive technological innovation and sales growth and help us to deliver on our other strategic objectives. Our strategy from foundation has been to create intellectual property that can be deployed in global markets through a business model of recurring revenues. We believe that our DaVinci platform, our core product offering and professional services position us well to take advantage of the structural trends surrounding mobility, social networking and cloud computing.

1 See note 6 for a reconciliation of statutory loss / profit after tax to adjusted profit after tax.

23 June 2015

Chief Executive’s Report

The year to 31 March 2015 has been another good year of profitable growth for the Group on an adjusted basis

1 across all of the key financial metrics. We continue to strengthen our balance sheet, with strong

cash conversion from operations and have made investments in the sales and marketing areas of our business, particularly in Europe and the Americas. We have enjoyed very strong growth in Europe during the year to 31 March 2015 and have also grown our recurring revenue base in the Middle East and Africa. Conditions remained challenging in India throughout the year; however, the year ended strongly in this region with several key new contract wins which will deliver revenues during the new financial year.

Market overview We are living in a period of great change driven by technology, the ubiquity of mobile networks, increasing processing power of mobile devices and the falling costs of cloud computing are disrupting many industries and providing tremendous opportunities for value creation. The impact of these changes to consumer behaviour is compelling all consumer-facing businesses to fundamentally assess how they engage with their customers. At the core of IMImobile we are a technology company providing a combination of software and services to enable our clients to fully embrace the changes taking place whether they create additional revenue opportunities or help reduce operating costs.

Our strategy has been to ensure that our platforms and services are network, channel and device agnostic. The guiding principle being to ensure our clients have a partner that is able to deliver the right experience for their customers across a customer base that maybe highly fragmented in its use and adoption of technologies.

Though we operate in a highly competitive, complex and fast-changing environment we continue to be excited about technological change. Over the last year we have seen the successful launch of 4G networks in the UK and expect 4G to be launched in India later this year, growth of 22% in global smartphone ownership to over 2 billion devices

2 and the phenomenal rise of IP messaging. We believe that

better networks, more devices and more complexity provide great opportunities to leverage our existing software and are confident that we have the product roadmaps and resources in place for a promising future.

Products and platform

DaVinci ESP

Since foundation we have created and owned all our intellectual property and at the core is the DaVinci Evolved Service Platform which has been developed with hundreds of person-years of engineering effort. It provides a unified, fully integrated and standards-based environment to create, deliver and manage a wide range of cross-channel enterprise and consumer services. The platform utilises a broad spectrum of enablers including mobile operator connectivity (for messaging, charging, identity and location), device repositories, over-the-top (OTT) messaging, payment mechanisms and integrations with OEM environments and social media platforms.

The platform comprises several distinct yet fully interoperable modules which are designed to function in a standalone mode or as part of a fully integrated suite. Each module delivers enterprise-grade performance, availability and scalability and exposes open industry-standards based APIs.

The platform includes a flexible metadata driven service creation layer, which provides an environment for configuring new services. The ‘configure, not code’ approach means new services can be launched cost-effectively, reliably and quickly and customisations can be delivered rapidly.

Our Software Applications

DaVinci CMS

The DaVinci Content Management System has been architected and developed to support the delivery of a wide array of content types to the universe of connected devices - from basic feature phones and PCs to smartphones, tablets and in-car infotainment systems. The product acts as a digital exchange managing

1 See note 6 for a reconciliation of statutory loss / profit after tax to adjusted profit after tax. 2 Source: http://www.prnewswire.com/news-releases/strategy-analytics-global-smartphone-users-reach-2-billion-in-2014-300041752.html

http://www.prnewswire.com/news-releases/strategy-analytics-global-smartphone-users-reach-2-billion-in-2014-300041752.html

23 June 2015

multiple content owners, content aggregators, developers and service providers through a single unified environment. Key features include end-to-end content lifecycle management, partner management and an in-built portal engine allows user interfaces to be configured and rendered across thousands of device types.

DaVinci CMS has been widely deployed around the world and currently powers content storefronts for a range of mobile operators, digital distribution for major music labels and m-Governance citizen services for Government bodies.

Campaign Manager

Campaign Manager enables omni-channel marketing campaigns. Supported channels include SMS, MMS, Email, USSD, In-app push notifications and Voice. The product supports different types of campaigns such as promotional, event-triggered, interactive, progressive and multi-wave campaigns. Integration with DaVinci Profile Manager enables fine-grained target group definition and the application of analytical models such as propensity modelling and clustering. Configurable A/B testing and control groups allow campaigns to be optimized for maximizing campaign effectiveness.

Campaign Manager today is used for cross-sell, up-sell, information, engagement and customer delight campaigns for mobile operators, retailers, financial institutions and gaming companies delivering over a billion customer interactions annually.

OpenHouse

OpenHouse exposes service enablers (messaging, voice, location, presence etc.), federated within the underlying DaVinci platform, as a set of APIs which are augmented with tools such as a workflow designer, call flow builder and a high-performance rules engine to enable rapid service creation. The multi-tenanted architecture allows the software to be delivered as a service. OpenHouse allows customer identities to be linked to individual channel identities enabling the messaging APIs to be used in a channel-agnostic way. It provides intelligent message routing based on customer preferences, channel cost, presence, priority and other factors. OpenHouse also provides software development kits or SDKs which not only enable in-app messaging and push notifications but also facilitate data collection from devices to provide customer context to enrich communications and trigger operational workflows.

Transaction alerts, fraud prevention, account notifications, two-factor authentication and service messages are some examples of applications built on top of OpenHouse and currently live for leading enterprises in multiple markets.

TextLocal

TextLocal is a SaaS business messaging tool and has been widely adopted by SMEs and large brands alike. The product today delivers nearly 250 million customer interactions annually in the UK. In addition to basic SMS messaging, TextLocal supports file attachments, surveys, landing pages, data capture forms, ticketing, coupons, vouchers, loyalty cards and other value-added features. It provides sophisticated data import, target group definition, audit logs and role-based access control which make the product ideally suited for enterprise usage whilst providing an extremely intuitive and easy-to-use interface for simpler use cases.

DaVinci Social

DaVinci Social aggregates high volumes of inbound customer / audience messages from multiple channels such as Facebook, Twitter and SMS. It allows configuration of rules and workflows to process the inbound messages and includes a curation console which can be used to identify messages which require further manual processing such as referring the message to a customer care agent or a presenter (in a broadcasting scenario).

DaVinci Social has been deployed for leading broadcasters such as the BBC and other major media houses powering their audience engagement programmes.

Direct Carrier Billing (DCB)

DCB allows consumers to pay for digital content, in-app purchases, contests, donations and other such services through their mobile phone bill. The product includes a merchant portal where merchants may register themselves, request for specific price points, get access to a common charging API and view transaction reports. One single API provides access to multiple mobile operators thereby insulating merchants from the complexities of integrating with each mobile operator separately.

23 June 2015

Each of the products above has a continual roadmap of development, which has been developed in discussions with clients, and analysis of technology and market trends. Over the next year we expect to continue developing technologies that help clients use video, IP messaging and the plethora of new devices.

Regional performance

The Group is managed commercially and strategically on a regional basis with centralised resources for software development, finance and general management in the UK. A key operating metric for each region is gross profit as there are considerable differences in gross margins across regions, product lines and revenue models. Gross profit also measures most directly the value of the software and solutions delivered by the Group which excludes the impact of network infrastructure, third party hardware and content costs.

Europe and the Americas Europe gross profit £15.7m (2014: £11.0m)

Europe makes up over 52% of Group gross profit. Including the contribution made by TextLocal, gross profit in Europe grew by over 43%. Organic

1 annual gross profit growth in the same period was strong at

just over 26%. Gross margins also increased in the region thanks to favourable mix of delivery models and the falling costs of third party network infrastructure, a trend we expect will continue.

The growth in the region comes from a combination of new client wins across mobile operator, retail and gambling and gaming sectors and upsell and cross sell to existing customers. No major clients were lost during the period and we have maintained investment in our sales and marketing teams during the year to position ourselves well for future growth. We are very pleased with the acquisition and integration of TextLocal, it has met expectations on financial targets and synergies and we shall be leveraging our global footprint and resources to launch the product in our existing and new geographies.

All our products and platforms are live in this region and we continue to be well positioned to exploit the macro trends around increasing mobile usage and digitisation of business operations. Our largest clients are mobile operators and with consolidation taking place in that sector it has provided us with opportunities to position ourselves as a trusted reliable vendor with deep integrations. We see significant opportunities in the financial services sector as digitisation and mobilisation of existing processes becomes a necessity. We also see opportunities with large consumer brands that look to engage with their customers via digital marketing programmes and I am pleased that we have won several industry accolades, including “Best Relationship Building / CRM” for a programme run with O2 in the UK and “Best Mobile CRM/Enterprise Messaging Campaign” for the work we have done with Ikea.

We continue to invest in establishing our operations in the US market and are pleased with progress to date. We have started working with leading operators and developed a good experienced team on the ground.

Middle East and Africa Gross profit £8.6m (2014: £10.7m)

Our business in the MEA region performed well in the year, with gross profit growth of 16% in recurring managed solutions contracts. The business in MEA is largely based on group relationships with the leading mobile operators in the region and our growth is based on new territory and service deployments for existing customers. In the year to 31 March 2015 we saw new services going live in Senegal, Ghana, Nigeria, Guinea Conakry and Niger.

There was an expected decline in year-on-year gross profit from licence revenues following an exceptional year to 31 March 2014. Gross profit from licence revenue of £2.9m in the year to 31 March 2015 represents a decline of roughly 50% compared to the prior period, and includes revenue from deployments for a global Systems Integrator and multiple mobile operators across Africa. These multi-million US Dollar licence deals are typically for an installation of the entire DaVinci ESP or multiple modules in the platform and demonstrate the value inherent in the intellectual property.

Though deployments can be lengthy and local network infrastructure and connectivity unstable, the Group has demonstrated an ability to deliver revenue generating services successfully in challenging

1 Excluding the impact of the TextLocal acquisition.

23 June 2015

circumstances and as a result is well placed to benefit from the predicted growth of mobile usage across MEA. Currently the DaVinci ESP and CMS are the main offerings in the region sold to mobile operators however over the coming year we expect to establish our broader product set in the region catering not only to telecom operators but enterprise and government as well.

India and SE Asia Gross Profit £5.0m (2014: £5.9m)

The performance in India has been disappointing with a gross profit decline of 15% compared with the year to 31 March 2014. In local currency the reduction was 13%. The continued decline is a direct consequence of the implementation of new consumer protection regulation that has impacted our customers, chiefly the mobile network operators. In India our main activity is managing certain content and value added telecom services for mobile operators and tighter regulation requiring operators to seek additional consents to sign customers up to these services led to a period of transition as new third party consent gateways have been implemented.

As a Group we have welcomed the changes as overly aggressive marketing and over-charging had damaged consumer perception of mobile services and we believe that in the long term the changes will benefit the overall market and are confident of our return to growth for mobile services in this region.

During the period we have successfully won multiple managed solution contracts with additional operators in India, Myanmar and Nepal which are currently under deployment and which we expect to contribute to revenue in the coming year. We also expect additional revenue growth to come from our efforts in broadening our offering in the region. Over the last year we have invested in sales and marketing into new sectors and are pleased with progress having signed new customers in the public sector and with leading consumer brands. We will continue to invest in targeting new sectors and expect to launch additional SaaS products over the coming year.

Outlook

The 2016 financial year has started well, building on the successes of 2015. Trading is in line with Directors’ expectations.

The contracts won last year will help to enhance revenues and profitability in 2016 and beyond. Deployments and new product developments are progressing as planned and the high mix of repeat and recurring revenues gives us confidence and good visibility. We continue to invest in sales and marketing activities which we anticipate will underpin our organic growth forecasts for the coming years.

We also continue to innovate and are excited about the changes in our marketplace and we expect to use our financial and cash strength to further our ambitions to consolidate a fragmented market and accelerate our reach into enterprise customers.

I believe IMImobile remains well placed to take advantage of the macro trends affecting the markets in which we operate and we remain confident about our prospects for the year ahead.

23 June 2015

Financial Review

The Company was incorporated on the 4 December 2013 and did not trade prior to listing on 27 June 2014.

On 27 June 2014 the Company was successfully admitted to trading on AIM, a market operated by the London Stock Exchange. The initial placing, which comprised of 25,000,000 Ordinary shares at £1.20 per Ordinary Share, raised gross proceeds of £30,000,000. £19,868,014 of the proceeds raised was used by the Company to satisfy its obligations to pay the cash consideration for the acquisition of IMI Mobile Private Limited, and its subsidiaries. The financial information included in this preliminary announcement and in the Group’s audited financial statements for the year ended 31 March 2015 reflect the acquisition of IMI Mobile Private Limited by IMImobile PLC. This has been accounted for as a capital reorganisation with the results and financial position shown on an ongoing basis to reflect the substance of the transaction, with the 24% interest in IMI Mobile Private Limited owned by the two founding shareholders accounted for as a non-controlling interest.

Group performance at a glance

Year ended 31 March 2015

£m 2014

£m Growth / (decline)

Revenue 48.9 43.4 13%

Gross Profit 30.0 27.9 8%

Gross Margin 61.4% 64.3%

EBITDA 9.2 7.2 27%

EBITDA Margin 18.7% 16.6%

Operating profit before share-based payments and exceptional items 6.7 5.1 31%

(Loss) / profit before tax (2.3) 5.3 (143%)

Adjusted profit before tax1 6.7 5.1 31%

(Loss) / profit after tax (3.4) 3.9 (186%)

Adjusted profit after tax2 5.6 3.8 48%

Diluted EPS (5.3p)

Diluted adjusted EPS3 8.9p

Cash at period end 14.6 9.3 57%

Key performance indicators (KPIs)

This section sets out the KPIs for the Group during the year ended 31 March 2015.

Group revenue and gross profit

For the year to 31 March 2015 total revenue increased by 13% to £48.9m (2014: £43.4m) and gross profit increased by 8% to £30.0m (2014: £27.9m). The Board considers that gross profit is the key operational measure of performance in the business.

Group geographical split of revenues and gross profit is as follows:

Revenue


£m 2014


Europe 27.2 21.2

Less: Greek subsidiary4 - (0.1)

Europe excluding Greek subsidiary 27.2 21.1 28%

Middle East & Africa 11.3 13.3 (15%)

India & South East Asia 9.6 8.5 13%

Rest of World 0.8 0.4 76%

Total (including Greek subsidiary) 48.9 43.4 13%

1 Adjusted profit before tax is defined by the Group as loss/profit before tax before fees incurred in relation to IPO and acquisition activities, impairment charges, share based compensation and excluding the impact of the disposal of subsidiaries. See note 6 for a reconciliation. 2 Adjusted profit after tax is defined by the Group as loss/profit after tax before fees incurred in relation to IPO and acquisition activities, impairment charges, share based compensation, de-recognition of deferred tax assets and excluding the impact of the disposal of subsidiaries. See note 6 for a reconciliation. 3 Adjusted EPS uses adjusted profit after tax as defined above. 4 Non-core Greek subsidiary disposed of in May 2013.

23 June 2015

Gross profit


£m 2014


Europe 15.7 11.0

Less: Greek subsidiary1 - (0.1)

Europe excluding Greek subsidiary 15.7 10.9 43%

Middle East & Africa 8.6 10.7 (19%)

India & South East Asia 5.0 5.9 (15%)

Rest of World 0.7 0.3 93%

Total (including Greek subsidiary) 30.0 27.9 8%

The Europe region gross profit grew by 43% in the year after removing the impact of the non-core Greek subsidiary from the prior year results which was sold in May 2013. The post-acquisition result of TextLocal represents 17% of the increase in gross profit for the region. Gross margin in Europe in the year was 57.8% up from 51.8% in 2014 in part as a consequence of the declining cost of third party network infrastructure.

Gross profit from managed solution contracts increased by 16% in the year, however, licence fee income recognised in the prior year in the Middle East & Africa (MEA) region were not repeated to the same extent this year, resulting in regional gross profit decreasing by 19% to £8.6m (2014: £10.7m). Gross margin in MEA reduced to 76.2% from 80.6%, again reflecting the decreased proportion of licence fees recognised during the period.

In GBP the Indian and SEA region gross profit declined in the year by 15% to £5.0m (2014: £5.9m). A proportion of the year on year decline was attributable to the weakening of the Indian Rupee against the Pound, and in local currency gross profit fell by 13%. The major reason for decline in gross profit in local currency was the implementation of regulations in the Indian market imposed by the Telecom Regulatory Authority of India (“TRAI Regulations”) which affected the managed solutions provided to the mobile operators in India. The TRAI Regulations include limitations on the volume of promotions that can be sent to consumers and the requirement for additional third-party consent to be obtained prior to the billing of any consumers for services consumed via the mobile device.

Operating costs before amortisation, depreciation, impairment costs, share-based payments and exceptional items

Operating costs before amortisation, depreciation, impairment costs, share-based payments and exceptional items in the year were £20.9m (2014: £20.7m).

EBITDA2 and operating profit before share-based payments and exceptional items

EBITDA for the year to 31 March 2015 was £9.2m (2014: £7.2m) and operating profit before share-based payments and exceptional items was £6.7m (2014: £5.1m) representing an increase of 31% against the prior year.

Group cash flow and working capital

Year end cash and cash equivalents were £14.6m (2014: £9.3m). There were no bank borrowings at 31 March 2015 (2014: £nil). Cash generated from operations was £8.2m (2014: £8.7m) and represents an operating cash flow conversion of 90% of EBITDA (2014: 121%). The Company listed on AIM on 27 June 2014 raising £6.5m cash for the Company after deducting one-off IPO related expenditure. On the 13 October 2014 the Group acquired the entire share capital of TextLocal comprising an initial cash consideration of £10.0m, the value of cash included in the acquired net assets of TextLocal was £2.0m.

Group working capital is made up as follows:

As at 31 March 2015 2014 £m £m

Cash and cash equivalents 14.6 9.3 Trade and other receivables 19.8 21.4 Trade and other payables (20.1) (20.4)

Net working capital 14.3 10.3

Trade receivables and payables include “pass through” amounts generated from mobile payment transactions. The receivables are from mobile operators and payables to customers who use IMImobile’s payment APIs. These amounts are excluded from revenues and cost of sales, as the Group accounts only for the commission earned on such transactions within revenue as it is not the principal obligor in the arrangement. The value of pass through revenues included in trade and other receivables at 31 March 2015 is £3.2m (2014: £4.8m) and the value of pass through revenues included in trade and other payables at 31 March 2015 is £5.2m (2014: £6.0m).

Group loss / profit after tax

Loss after tax was £3.4m (2014: profit of £3.9m) after the impact of IPO and other exceptional costs of £1.6m (2014: £0.1m), share based payment charges net of deferred tax of £6.7m (2014: £0.1m), impairment of available-for-sale financial assets of £0.1m (2014: £nil), de-recognition of deferred tax assets of £0.5m (2014: £nil) and a one-off gain from the disposal of a subsidiary of £nil (2014: £0.3m). Adjusted profit after tax was £5.6m (2014: £3.8m) representing an increase of 48% against the prior year.

Earnings per share

Diluted loss per share was 5.3p. Diluted adjusted EPS was 8.9p.

1 Non-core Greek subsidiary disposed of in May 2013. 2 EBITDA is defined as operating loss / profit before depreciation, amortisation, fees incurred in relation to IPO and acquisition activities, impairment charges, share based compensation and excluding the impact of the disposal of subsidiaries.

23 June 2015

Other financial information

Group taxation

The tax charge for the year was £1.1m (2014: £1.3m). The effective rate of tax1 for the year was 16.7% (2014: 26.1%).

Group Capital expenditure

Capital expenditure during the year was £1.5m (2014: £1.9m) split between plant, property and equipment of £1.0m (2014: £1.7m) and third party software £0.5m (2014: £0.2m).

Goodwill

Goodwill held at 31 March 2015 was £17.9m (2014: £7.9m) following the acquisition of TextLocal. There were no other changes to the carrying amount of goodwill in the year.

Redeemable Preference Shares

There were no redeemable preference shares in issue at 31 March 2015 (2014: £10.9m). The optionally convertible preference shares that were in issue on 31 March 2014 were converted to equity on 20 June 2014, prior to the listing of the Company.

1 Tax as a proportion of adjusted profit before tax, as reconciled in note 6.

12

IMIMOBILE PLC CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Income Statement For the year ended 31 March 2015

Notes

Year ended 31 March

2015 Year ended

31 March 2014 £000 £000

Revenue 2,4 48,876 43,404 Cost of sales (18,848) (15,505)

Gross profit 4 30,028 27,899 Operating costs: Other operating costs (20,872) (20,681) Depreciation and amortisation (2,442) (2,106) Share based payment charge 11 (7,294) (150) IPO and acquisition related costs (1,575) (67) Impairment of available-for-sale financial assets (145) -

Operating (loss) / profit (2,300) 4,895 Investment income 13 31 Finance costs - (5) Gain on sale of subsidiary - 340

(Loss) / profit before tax (2,287) 5,261 Tax 5 (1,076) (1,342)

(Loss) / profit for the year (3,363) 3,919

(Loss) / profit for the year attributable to: Equity holders of the company (5,975) 3,919 Non-controlling interest 2,612 -

(Loss) / profit for the year (3,363) 3,919

EBITDA

1 9,156 7,218

Basic (loss) / earnings per share 6 (7.6p) Adjusted basic earnings per share 6 12.6p Diluted (loss) / earnings per share 6 (5.3p) Adjusted diluted earnings per share 6 8.9p

1 EBITDA is defined as operating loss / profit before depreciation, amortisation, fees incurred in relation to IPO and acquisition

activities, impairment charges, share based compensation and excluding the impact of the disposal of subsidiaries.

13


Consolidated Statement of Comprehensive Income

For the year ended 31 March 2015

Year ended 31 March

2015

Year ended 31 March

2014 £000 £000

(Loss) / profit for the year (3,363) 3,919 Items that may be reclassified subsequently to profit or

loss:

Exchange differences on translation of foreign operations Equity holders of the parent 1,066 (330) Non-controlling interest 352 -

Other comprehensive income / (expense) for the year 1,418 (330)

Total comprehensive (expense) / income for the year (1,945) 3,589

Total comprehensive (expense) / income for the year attributable to: Equity holders of the parent (4,909) 3,589 Non-controlling interest 2,964 -

Total comprehensive (expense) / income for the year (1,945) 3,589

14

Share capital

Share premium

Translation reserve

Share based payment reserve

Capital

restructuring reserve

Retained Earnings /

(Deficit)

Total equity attributable to shareholders

of parent

Non-controlling interest

Total equity

£000 £000 £000 £000 £000 £000 £000 £000 £000

Balance at 31 March 2013 4,287 6,801 2,508 1,122 (7,392) 2,672 9,998 - 9,998

Profit for the year - - - - - 3,919 3,919 - 3,919

Foreign exchange differences - - (330) 19 - - (311) - (311)

Share based payment charge - - - 131 - - 131 - 131

Proceeds from share issue 237 1,482 - - (1,146) - 573 - 573

Dividends - - - - - (415) (415) - (415)

Balance at 31 March 2014 4,524 8,283 2,178 1,272 (8,538) 6,176 13,895 - 13,895

Capital restructuring (2,295) 16,230 - - (20,502) (6,546) (13,113) 6,546 (6,567)

Loss for the year - - - - - (5,975) (5,975) 2,612 (3,363)

Foreign exchange differences - - 1,066 - - - 1,066 352 1,418

Share based payment charge - - - 7,294 - - 7,294 - 7,294

Proceeds from share issue 2,505 27,509 - - - - 30,014 - 30,014

Issue of shares as part of acquisition 71 929 - - - - 1,000 - 1,000

Cost of share issue - (2,055) - - - - (2,055) - (2,055)

Cancellation of share options - - - (2,697) - - (2,697) - (2,697)

Balance at 31 March 2015 4,805 50,896 3,244 5,869 (29,040) (6,345) 29,429 9,510 38,939


Statement of Changes in Equity

For the year ended 31 March 2015

15


Consolidated Statement of Financial Position As at 31 March 2015

Notes As at

31 March 2015 As at

31 March 2014 £000 £000

Non-current assets

Goodwill 7 17,934 7,861 Other intangible assets 1,678 475 Available-for-sale financial assets 279 424 Property, plant and equipment 4,285 5,134 Deferred tax assets 911 871

Total non-current assets

25,087 14,765

Current assets Cash and cash equivalents 8 14,617 9,305 Trade and other receivables 9 19,745 21,367

Total current assets 34,362 30,672

Current liabilities Trade and other payables (20,104) (20,402)

Total current liabilities (20,104) (20,402)

Net current assets 14,258 10,270

Non-current liabilities Redeemable preference shares - (10,895) Provision for defined benefit gratuity (406) (245)

Total non-current liabilities (406) (11,140)

Net assets 38,939 13,895

Equity attributable to the owners of the parent Share capital 10 4,805 4,524 Share premium 10 50,896 8,283 Translation reserve 3,244 2,178 Share based payment reserve 5,869 1,272 Capital restructuring reserve (29,040) (8,538) Retained earnings (6,345) 6,176

Equity attributable to shareholders of the parent 29,429 13,895 Non-controlling interest 9,510 -

Total equity 38,939 13,895

16


Consolidated Cash Flow Statement For the year ended 31 March 2015

Notes

Year ended 31 March

2015

Year ended 31 March

2014 £000 £000 Net cash from operating activities 12 8,234 8,748

Investing activities

Interest received 13 31 Purchases of intangibles (672) (186) Purchases of property, plant & equipment (967) (1,683) Disposal of property, plant & equipment 15 - Available for sale investment - (50) Acquisition of subsidiary as part of capital restructuring (23,464) (113) Acquisition of subsidiary net of cash acquired 13 (7,970) - Disposal of subsidiary - (566)

Net cash used in investing activities (33,045) (2,567)

Financing activities

Repayment of borrowings – Bank loans - (1,220) Issue of borrowings – Related party Director loans - (301) Proceeds from issuance of Ordinary shares 30,000 572 Dividends paid to owners of the parent - (415)

Net cash generated by / (used in) financing activities

30,000 (1,364)

Net increase in cash and cash equivalents 5,189 4,817 Cash and cash equivalents at beginning of the year

9,305 4,643

Effect of foreign exchange rate changes

123 (155)

Cash and cash equivalents at end of the year 8 14,617 9,305

17

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of preparation

While the financial information included in this preliminary announcement has been computed in accordance with International Financial Reporting Standards as adopted for use by the EU (IFRS), this announcement does not itself contain sufficient information to comply with IFRS. The Company expects to publish full financial statements that comply with IFRS in due course.

The financial information set out above does not constitute the Company's statutory accounts for the period ended 31 March 2015, but is derived from those accounts. Statutory accounts for 2014 have been delivered to the Registrar of Companies and those for 2015 will be delivered following the company's annual general meeting.

The auditor has reported on those accounts; the auditor’s report was unqualified, did not draw attention to any matters by way of emphasis without qualifying its report and did not contain statements under s498(2) or (3) of the Companies Act 2006.

2. Basis of consolidation and accounting policies

The principal accounting policies set out below have been applied consistently by the Group entities in preparing the financial statements of the Group from which the information contained in this preliminary announcement has been extracted:

Basis of consolidation

The Group financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries) made up to 31 March each year. Control is achieved when the Company:

has the power over the investee;

is exposed, or has rights, to variable return from its involvement with the investee; and

has the ability to use its power to affect its returns.

The results of subsidiaries acquired or disposed of in any year are included in the consolidated Income Statement from the date of acquisition or up to the date of disposal.

Goodwill is measured as the excess of the sum of consideration transferred. Goodwill is stated at cost less any accumulated impairment losses. Goodwill is allocated to cash-generating units and is not amortised but is tested annually for impairment.

Where necessary, adjustments are made to the financial information of subsidiaries to bring the accounting policies into line with those used by the Group. Inter-company balances and transactions, including inter-company profits and unrealised profits and losses are eliminated on consolidation.

The Group applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners of the acquiree and the equity interests issued by the Group.

Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The Group recognises any non-controlling interest in the acquiree on an acquisition-by-acquisition basis. When the Group ceases to have control, any retained interest in the entity is remeasured to its fair value at the date when control is lost, with the change in carrying amount recognised in the Income Statement.

The acquisition of IMI Mobile Private Limited by IMImobile PLC has been accounted for as a capital reorganisation, presenting the continuation of the Group’s results and financial position to reflect the substance of the transaction, with the 24% interest in IMI Mobile Private Limited owned by the two founding shareholders accounted for as a non-controlling interest.

Cash and cash equivalents

Cash and short–term deposits in the balance sheet comprise cash at bank and in hand and short–term deposits with an original maturity of three months or less, highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value. For the purpose of the consolidated Cash Flow Statement, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts.

Trade receivables

Trade receivables are amounts due from customers for merchandise sold or services performed in the ordinary course of business. If collection is expected in one year or less (or in the normal operating cycle of the business if longer), they are classified as current assets. If not, they are presented as non-current assets. Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment.

Trade payables

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities. Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.

Goodwill

Goodwill arises on the acquisition of subsidiaries and represents the excess of the consideration transferred over the Group’s interest in the net fair value of the net identifiable assets, liabilities and contingent liabilities of the acquiree and the fair value of the non-controlling interest in the acquiree.

18

For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each cash generating unit (“CGU” or “unit”), or groups of CGUs, that is expected to benefit from the synergies of the combination. Each unit or group of units to which the goodwill is allocated represents the lowest level within the entity at which the goodwill is monitored for internal management purposes. Goodwill is monitored at the CGU level.

Goodwill impairment reviews are undertaken annually or more frequently if events or changes in circumstances indicate a potential impairment. The carrying value of goodwill is compared to the recoverable amount, which is the higher of value in use and the fair value less costs of disposal. Any impairment is recognised immediately as an expense and is not subsequently reversed.

Employee benefits

Employee share-based payments

The Group operates a number of equity-settled, share-based compensation plans, under which the entity receives services from employees as consideration for equity instruments (options) of the Group. The fair value of the employee services received in exchange for the grant of the options is recognised as an expense. The total amount to be expensed is determined by reference to the fair value of the options granted:

including any market performance conditions (for example, an entity’s share price);

excluding the impact of any service and non-market performance vesting conditions (for example, profitability, sales growth targets and remaining an employee of the entity over a specified time period); and

including the impact of any non-vesting conditions (for example, the requirement for employees to save).

Non-market performance and service conditions are included in assumptions about the number of options that are expected to vest. The total expense is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. Where options are cancelled by the Group and settled in cash the expense is accelerated in the period in which the options are settled, with the cash payment recognised in the share based payment reserve.

At the end of each reporting period, the Group revises its estimates of the number of options that are expected to vest based on the non-market vesting conditions. It recognises the impact of the revision to original estimates, if any, in the consolidated Income Statement, with a corresponding adjustment to equity.

When the options are exercised, the Group issues new shares. The proceeds received net of any directly attributable transaction costs are credited to share capital (nominal value) and share premium.

The social security contributions payable in connection with the grant of the share options are payable by the employee.

Fair value is measured by use of the Black-Scholes model. The expected life used in the model has been adjusted, based on management’s best estimate, for the effects of non-transferability, performance conditions, exercise restrictions and behavioural considerations.

Company Share Capital

Ordinary shares are classified as equity.

Incremental costs directly attributable to the issue of new ordinary shares or options are shown in equity as a deduction, net of tax, from the proceeds.

Revenue recognition

Revenue comprises the fair value of the consideration received or receivable for the sale of goods and services in the ordinary course of the Group’s activities. Revenue is shown net of returns, rebates and discounts and after eliminating sales within the Group.

The Group recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the entity and specific criteria have been met for each of the Group’s activities as described below. The amount of revenue is not considered to be reliably measurable until all contingencies relating to the sale have been resolved. The Group bases its estimates on historical results, taking into consideration the type of customer, the type of transaction and the specifics of each arrangement.

Where the Group enters into arrangements to deliver multiple elements (licensing, servicing and maintenance), such elements are separated for recognition based on stand-alone value where sold and delivered separately. If such elements cannot be separated they are treated as a single deliverable and recognised over the period of delivery when the criteria for recognition have been met and customer acceptance received. Amounts incurred but not yet billed are classified as unbilled amounts in work in progress. Where the Group acts as principal in the sale of goods and content, revenue is recognised on a gross basis.

Managed solutions and SaaS contracts Revenues from managed solutions contracts are recognised proportionally over the period during which the services are rendered. Revenue from content related sales is recognised on delivery of the content, when all significant contractual obligations have been satisfied, the significant risks and rewards of ownership have been transferred and no effective ownership control is retained. Revenues are billed up to 60 days after month end and classified as amounts billable not yet invoiced until this point.

Billing revenues, within SaaS contracts, recognised within turnover relate only to the commission earned on hosting each service and are recognised at the point of delivery to the customer. Pass through revenues collected on behalf of the customers are not recognised within turnover.

19

Licence fees Revenue from sale of end user licences is recognised at fair value on customer acceptance following installation at the customer’s locations as per the terms of the contract.

Operating segments

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors that makes strategic decisions.

Exceptional items

These are items which, in management’s judgement, are significant non-recurring items or items that do not reflect underlying profits of the Group and need to be disclosed in order for the user to obtain a proper understanding of the financial information.

3. Critical accounting judgements, estimates and assumptions

The Group makes judgements, estimates and assumptions. The preparation of the consolidated Financial Statements in conformity with International Financial Reporting Standards requires management to make judgements, estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated Financial Statements and the reported amounts of revenue and expenses during the year. Actual results could differ from the estimates.

The preparation of financial statements in conformity with IFRS requires the use of estimates and assumptions that affects the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Although these estimates are based on management’s best knowledge of the amount, event or actions, actual results may ultimately differ from those estimates. The key sources of estimation uncertainty at the reporting date derive from management assumptions in respect of:

Revenue recognition

Revenue is recognised to the extent it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. The determination of whether the revenue recognition criteria as specified under IAS 18 are met requires judgement. Where revenues are verified by third parties, revenues are accrued based on platform data. Differences are adjusted for upon receipt of third party reports.

Where contracts include more than one deliverable element, each element and deliverables are assigned to one, or more, separate units of accounting based on their fair value. Revenue is recognised on a milestone basis, based on the judgement of management, as each deliverable is met.

Goodwill and impairment reviews

The recognition of business combinations requires the excess of the purchase price of acquisitions over the net book value of assets acquired to be allocated to the assets and liabilities of the acquired entity. The Group makes judgements and estimates in relation to the fair value allocation of the purchase price. If any unallocated portion is positive it is recognised as Goodwill and if negative, it is recognised in the consolidated Income Statement.

Judgement is required in determining the fair value of identifiable assets, liabilities and contingent assets and liabilities assumed in a business combination and the fair value of the consideration payable. Calculating the fair values involves the use of significant estimates and assumptions, including expectations about future cash flows, discount rates and the lives of assets following purchase.

Judgement is also required in identifying the cash generating units to which goodwill is associated for the purpose of goodwill impairment testing. Identification of cash generating units involves an assessment of whether assets or groups of assets generate cash flows that are largely independent. Goodwill is then allocated to each identified cash generating unit that is expected to benefit from the synergies of the business combinations from which goodwill has arisen.

The Group tests annually whether goodwill has suffered any impairment, in accordance with the accounting policy above. The recoverable amounts of cash-generating units have been determined based on value-in-use calculations. These calculations require the use of estimates which have been detailed within the notes to the consolidated Financial Statements.

Debtor recoverability

The Group’s trade receivables are stated after allowances for bad and doubtful debts based on management’s judgement of recoverability on an individual customer basis. The credit worthiness of individual customers is assessed based on their financial strength using available information, communication with the customer and the historic trading relationship.

Share based payments

The fair value is determined at grant date and expensed over the vesting period based on the estimate of the proportion of the shares which will vest. The new schemes include performance conditions, including achieving targets for the Group’s EPS. The probability of whether these performance targets will be met based on the latest Group forecasts is re-assessed on a six monthly basis.

The accounting policies in relation to these items are disclosed in note 2.

4. Business and geographical segments

The Group’s operating segments are established on the basis of those components of the Group that are evaluated regularly by the Chief Operating Decision Maker in deciding how to allocate resources and in assessing performance.

20

The Chief Operating Decision Maker considers results principally by geographical region, which forms the Group’s operating and reporting segments. Geographically, in the operating segments are defined as Europe (substantially all to the UK), India and South East Asia (SEA), Middle East and Africa (MEA) and the rest of the world, which also represent the Group’s reportable segments.

The performance of the operating segments is assessed based on a measure of revenue and gross profit (the result for the segment). Any sales between segments are carried out at arm’s length. As costs are shared across geographies, results from gross profit to profit after tax are assessed on a consolidated basis only. The Group does not regularly provide information in relation to the assets or liabilities of operating segments to management.

Geographical revenue and results

The following is an analysis of the Group’s revenue and results by geographical segment:

Europe India

and SEA MEA Rest of

the world

Total £000 £000 £000 £000 £000 Year ended 31 March 2015 Revenue from external companies 27,237 9,610 11,288 741 48,876

Intersegment revenues - 578 - - 578 Gross profit 15,742 5,048 8,599 639 30,028

Other operating costs (20,872) Depreciation and amortisation (2,442) Share based payment charge (7,294) IPO and acquisition related costs (1,575) Impairment of AFS financial assets (145)

Operating profit (2,300) Investment income 13

Loss before tax (2,287) Tax (1,076)

Loss after tax (3,363)

Non-current assets 20,501 3,565 926 95 25,087

Year ended 31 March 2014 Revenue from external companies 21,198 8,541 13,243 422 43,404 Intersegment revenues - 503 - - 503 Gross profit 10,985 5,911 10,672 331 27,899

Operating costs (20,681) Depreciation and amortisation (2,106) Share based payment charge (150) IPO and acquisition related costs (67)

Operating profit 4,895 Investment income 31 Finance costs (5) Gain on sale of subsidiary 340

Loss before tax 5,261 Tax (1,342)

Profit after tax 3,919

Non-current assets 9,932 3,739 1,090 4 14,765

During the year revenues from Customer A and Customer B accounted for 14% (2014: 12%) and 15% (2014: 15%) of the Group’s revenue.

21

The accounting policies of the reportable segments are the same as the Group’s accounting policies described in note 2 for each period. The revenue from external parties reported is measured in a manner consistent with that in the consolidated Income Statement. Revenues are attributed to countries on the basis of the customer’s location.

The Group measures segment profit and loss as gross profit as reported. The Group does not allocate general administration, marketing and sales expenses to its segments.

Additional voluntary disclosures

Delivery model revenue and results

The following disclosures are provided for additional purposes only and does not form part of the Group’s segmental reporting under IFRS 8.

In addition to geographical performance, the Chief Operating Decision Maker also considers the performance of the Group in line with its delivery model, which has also been disclosed below. The Group’s delivery models are defined as Managed solutions, Software as a service (SaaS) and Licence Fees which arise in all geographical segments.

The following is an analysis of the Group’s revenue and result by delivery model:

Managed solutions

Software as a Service (SaaS)

Licence fees

Total

£000 £000 £000 £000 Year ended 31 March 2015 Revenue from external companies 19,800 23,801 5,275 48,876

Intersegment revenues - - 578 578 Gross profit 14,506 10,562 4,960 30,028

Year ended 31 March 2014 Revenue from external companies 20,336 15,691 7,377 43,404 Intersegment revenues - - 503 503 Gross profit 14,466 6,507 6,926 27,899

22

5. Tax


Year ended 31 March

2014 £000 £000 Current tax India tax expense (6) 835 UK tax expense 522 - Other foreign tax expense 80 3 Withholding tax expense 592 547 Adjustments in respect of prior periods 13 (346)

1,201 1,039 Deferred tax Current year (125) 12 Adjustments in respect of prior periods - 291

(125) 303

1,076 1,342

The total tax charge for the year can be reconciled to the result per consolidated Income Statement as follows:

Year ended

31 March 2015 Year ended

31 March 2014 £000 £000 (Loss) / profit before tax (2,287) 5,261 Tax at the UK corporation tax rate of 21% (2014: 23%) (480) 1,210 Effect of overseas tax rates (367) 24 Non-taxable disposal of subsidiary - (81) Expenses not deductible for tax purposes 57 120 Tax losses on which deferred tax not recognised 1,323 45 Effect of change in UK tax rate 2 79 Tax adjustments in respect of previous years 13 (55) De-recognition of deferred tax asset 578 - Enhanced tax relief on research and development expenditure (50) -

Total tax charged in the Income Statement 1,076 1,342

Taxation for each region is calculated at the rates prevailing in the respective jurisdictions. Prior year adjustments relate to the routine confirmation and agreement of the final tax position in local jurisdictions.

One of the regions the Group operates in is the Dubai Airport Free Zone (IMI Mobile Vas Ltd FZE). The Dubai Airport Free Zone (FZE) operates under the laws, politics and direction of the Chairman H. H. Sheikh Ahmed Bin Saeed Al Maktoum. The operations in the FZE are not subject to income tax and as such no provision has been made for deferred taxes related to operations or assets and liabilities of these operations.

Deferred tax in respect to temporary differences arising from long-term employee benefits including retirement benefits, provisions for doubtful debts, of carried forward trading losses available to offset profits in future periods and the difference between tax and accounting depreciation have been recognised in the Income Statement.

The Finance Act 2013 reduced the UK standard rate of corporation tax from 23% to 21% from 1 April 2014 and 21% to 20% from 1 April 2015. All UK deferred tax assets and liabilities have been recognised at 20% (2014: 20%).

6. Earnings per share (‘EPS’)

Year ended

31 March 2015 pence Basic EPS (7.6) Adjusted basic EPS 12.6 Diluted EPS (5.3) Adjusted diluted EPS 8.9

23

Year ended

31 March 2015 Million Weighted average number of ordinary shares for the purpose of basic EPS 44.3 Effect of dilutive potential ordinary shares: share options 19.0

Weighted average number of ordinary shares for the purpose of diluted EPS 63.3

To provide more meaningful comparative information on the Group’s profitability, a number of non-GAAP adjusted profit measures are used in this preliminary announcement. Summarised below is a reconciliation between statutory results to adjusted results. The adjusted profit after tax earnings measure is also used for the purpose of calculating adjusted earnings per share.

Statutory

results

Share based payment

charge

IPO and acquisition

related costs

Impairment of AFS financial

asset

De-recognition of deferred

tax asset

Adjusted

results £000 £000 £000 £000 £000 £000 Year ended 31 March 2015 Revenue 48,876 - - - - 48,876 Gross profit 30,028 - - - - 30,028 Operating (loss) / profit (2,300) 7,294 1,575 145 - 6,714 (Loss) / profit before tax (2,287) 7,294 1,575 145 - 6,727 (Loss) / profit after tax (3,363) 6,706 1,575 145 537 5,600 Basic EPS (pence) (7.6) 15.1 3.6 0.3 1.2 12.6 Diluted EPS (5.3) 10.3 2.4 0.2 0.9 8.9

Statutory

results

Share based payment

charge

IPO and acquisition

related costs

Impairment of AFS financial

asset

Gain on sale of

subsidiary

Adjusted

results £000 £000 £000 £000 £000 £000 Year ended 31 March 2014 Revenue 43,404 - - - - 43,404 Gross profit 27,899 - - - - 27,899 Operating (loss) / profit 4,895 150 67 - - 5,112 Profit before tax 5,261 150 67 - (340) 5,138 Profit after tax 3,919 150 67 - (340) 3,796

7. Goodwill

Goodwill is monitored by management at the CGU level by delivery model. The following is a summary of goodwill allocation for each CGU:

Opening Additions Disposals

Impairment

Foreign Exchange Movement

Closing £000 £000 £000 £000 £000 £000

31 March 2014 Managed solutions 4,725 - - - (9) 4,716 Cloud based services / SaaS 3,153 - - - (8) 3,145

Total 7,878 - - - (17) 7,861

31 March 2015 Managed solutions 4,716 - - - - 4,716 Cloud based services / SaaS 3,145 - - - - 3,145 TextLocal - 10,073 - - - 10,073

Total 7,861 10,073 - - - 17,934

The recoverable amount of all CGUs has been determined based on value-in-use calculations. These calculations use pre-tax cash flow projections based on financial budgets approved by management covering a five-year period. Cash flows beyond the five-year period are extrapolated using the estimated growth rates stated below. The long-term growth rates are management’s estimates. The discount rates used are pre-tax and reflect specific risks relating to the relevant CGU.

24

CGUs serve a common group of customers such that the key assumptions used for value-in-use calculations for both CGUs are as follows:

31 March

2015 Long-term growth rate: 3%

Discount rate: 15%

Value in use is calculated for the various CGUs based on approved business plans and forecasts taking into account certain variables for each CGU. Below is a description of the principal variables that have been considered for each CGU with significant goodwill.

Long-term growth rate

In all cases, impairment tests are performed using the projected cash flows based on Board approved forecasts and strategic plans over a five year period. Cash flow projections from the sixth year are calculated using an expected constant growth rate.

Discount rate

The pre-tax discount rates used are disclosed above and take into account the market risk rate associated with the company. A discount factor is calculated using the discount rate and applied to future projected cash flows.

The Group has conducted a sensitivity analysis on the impairment test of each CGUs carrying value. A reasonable possible change of 3% percentage points would not cause the carrying value of goodwill to be less than its recoverable amount.

8. Cash and cash equivalents

As at

31 March 2015 As at

31 March 2014 £000 £000

Unrestricted Cash on hand and at bank 14,570 9,265

Restricted Short-term bank deposits 47 40

Cash and cash equivalents 14,617 9,305

Restricted short-term bank deposits represent cash balances deposited in bank accounts attracting a preferential interest rate and are typically deposited for a period of 90 to 180 days. Preferential interest rates are agreed in advance of the deposit being transferred and depend on the prevailing local rates and market conditions at the time.

9. Trade and other receivables

As at

31 March 2015 As at

31 March 2014 £000 £000 Trade receivables – revenue to be collected on behalf of the Group 7,817 8,752 – pass through revenues to be collected on behalf of premium rate customers 848 1,710 Other receivables 21 138 Refundable deposits 185 162 Work in progress 1,746 2,143 Amounts billable not yet invoiced – revenue to be collected on behalf of the Group 4,561 3,340 – pass through revenues collected on behalf of premium rate customers 2,327 3,089 Withholding tax debtor 2,187 1,553 Due from related parties 53 480

19,745 21,367

25

10. Share Capital and Share Premium

Allotted, called up and fully paid Share

Capital Share

Premium

Total £000 £000 £000 At 1 April 2014 4,524 8,283 12,807 Capital restructuring (2,295) 16,230 13,935 Proceeds from IPO 2,500 27,500 30,000 Cost of share issue - (2,055) (2,055) Issue of ordinary B shares - - - Shares issued as part of consideration for TextLocal (note 31) 71 929 1,000 Share options exercised 5 9 14

At 31 March 2015 4,805 50,896 55,701

As at 31 March 2015 Number Ordinary shares as at 1 April 2014 11,256,358 Ordinary shares converted on 3:1 basis 22,512,716 Preference shares converted to equity 14,135,304 New shares created prior to admission 10,679,519 Less: non-controlling interest (11,299,599) Shares issued as part of consideration for TextLocal 707,564 Share options exercised 47,000

Ordinary shares as at 31 March 2015 48,038,862 Ordinary B shares 2

48,038,864

On 16 June 2014 two ordinary B shares, with an aggregate nominal value of £0.20, were issued at £50.00 each.

On 20 June 2014 the optionally convertible preference shares were converted to equity prior to the listing of the Company and the ordinary shares, including the converted preference shares, were converted to three times as many ordinary shares and revalued to the issue price at admission of £1.20.

As part of this capital restructuring the opening share capital and share premium have been restated using the 3:1 conversion of ordinary shares, with a corresponding entry in the capital restructuring reserve. The capital restructuring movement in the current year represents the conversion of the preference shares to increase the number of shares by 14,135,304 less the non-controlling interest holding of 11,299,599 ordinary shares.

On 27 June 2014 the Company was successful admitted to the London Stock Exchange Alternative Investment Market and 25,000,000 ordinary shares, including 10,679,519 newly created ordinary shares, with an aggregate nominal value of £2,500,000, were issued at £1.20 each as part of the initial placing.

Costs of £2,055,000 relating to the admission have been recognised directly in equity through the share premium reserve.

The Group’s capital consists of two classes of equity share.

Ordinary shares

The amount classified as equity share capital represents the nominal value of allotted, called up and fully paid ordinary shares at a par value of £0.10. Each holder of ordinary shares is entitled to one vote per share.

Ordinary B shares

The amount classified as equity share capital represents the nominal value of allotted, called up and fully paid ordinary shares at a par value of £0.10. Each holder of ordinary B shares is able to exercise voting rights in respect of such shares equal to the number of Ordinary Shares each of its nominees would receive if they exchanged their holding in IMI Mobile Private Limited, a subsidiary of the Company, for three ordinary shares in the Company.

In addition, each holder of ordinary B shares has the right (but not the obligation) to swap all of their shares in IMI Mobile Private Limited for ordinary shares in the Company on the basis of one IMI Mobile Private Limited share for three ordinary shares in the Company (subject to adjustment for any consolidation, sub division or any other alteration of the share capital of either the Company or IMI Mobile Private Limited). Such share swap is subject to all legal and regulatory consents and approvals being obtained. If such share swap occurred in full the holders of ordinary B shares would be entitled to acquire 11,299,599 ordinary shares. The holders of the ordinary B shares form the non-controlling interest in the Group.

11. Share-based payments

The fair value of options granted is recognised as an employee expense in the income statement with a corresponding increase in equity. The fair value is measured at the grant date and spread over the period during which the employees become unconditionally entitled to the options. The fair value of the options is measured using the Black-Scholes option

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valuation model, taking into account the terms and conditions upon which the options were granted. The amount recognised in the Income Statement is adjusted at each balance sheet date to reflect the number of share options that are expected to vest revised for expected leavers and estimated achievement for non-market based vesting conditions.

Prior to admission, options were issued to the Directors and key employees. The Group operated the following schemes during the year.

Plan A

Under Plan A, options were granted for employees of the Group who are resident within India. The exercise price of the options was 10 Indian Rupees (£0.13 as at the grant date). The options granted vested over a period of 0-4 years from the date of grant depending on the share option agreement given to each employee. The contractual life of each option was 10 years after the grant date, except for former employees where options may be convertible to equity shares within one year from the date of grant.

The fair value at grant date had been determined using the Black-Scholes valuation model. The significant inputs into the model were a risk free interest rate of 15%, exercise price shown above, an expected option life of between four and 10 years, volatility of 30% and a dividend yield of nil.

On Admission part of the proceeds of placing was used by the Company as consideration for the surrender of options under Plan A. Compensation payments were paid to participants within the option scheme in lieu of options already vested totalling £2,697,000 (2014: £nil). In accordance with IFRS 2 the Group has accelerated the charge relating to the cancelled schemes through the Income Statement in the period.

Details of the share options movements during the year are as follows:

As at 31 March 2015 As at 31 March 2014

Weighted average exercise price (£)

Number of share

options Weighted average exercise price (£)

Number of share options

At 1 April 1,051,952 1,051,952 Surrendered or forfeited 0.13 (1,051,952) - -

At 31 March - 1,051,952

Plan B

Under Plan B, options were granted for employees of the Group who are not resident within India. The exercise price of the options range between 91 Indian Rupees (£1.05 as at the grant date) and 101 Indian Rupees (£1.03 as at the grant date). The options granted vest over a period of 0-4 years from the date of grant. The contractual life of each option is 10 years after the grant date.

The fair value at grant date has been determined using the Black-Scholes valuation model. The significant inputs into the model were a risk free interest rate of 6.9%, exercise price shown above, an expected option life of seven years, volatility of 30% and a dividend yield of nil.

Prior to admission these options were released in exchange for options under the Unapproved Plan.


Weighted average exercise

price (£)

Number of share



At 1 April 317,000 239,000 Granted - - 1.03 96,000 Forfeited - - 1.05 (18,000) Converted 1.05 (317,000) - -

At 31 March - 317,000

Flowering Share Plan

The plan was established on 16 May 2014. The options granted vest over a period of 0-4 years and are dependent upon continued employment, and meeting an objective Company hurdle and performance targets for the Group’s EPS. The options may be forfeited if the employee leaves the Group and the rights of the participants lapse if the award has not been exercised after a period of 10 years from the grant date.

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Details of the share awards outstanding during the year are as follows:



price (£)

Number of share



At 1 April - - Granted 0.03 3,000,000 - -

At 31 March 3,000,000 -

The fair value at grant date has been determined using the Black-Scholes valuation model. The significant inputs into the model were a risk free interest rate of 0.31% to 1.55%, exercise price shown above, an expected option life of five years, volatility of 22% to 70% depending on the vesting date of the options and a dividend yield of nil.

2014 Unapproved Option Plan

The plan was established on 26 June 2014. The options granted vest over a period of 0-4 years and are dependent upon continued employment and meeting performance targets for the Group’s EPS. The options may be forfeited if the employee leaves the Group and the rights of the participants lapse if the award has not been exercised after a period of 10 years from the grant date.




price (£)

Number of share



At 1 April - - Granted 0.33 6,387,373 - - Forfeited 1.20 (17,355) - -

At 31 March 6,370,018 -


CSOP

The plan was established on 26 June 2014. The options granted vest over a period of 0-4 years and are dependent upon continued employment. The options may be forfeited if the employee leaves the Group and the rights of the participants lapse if the award has not been exercised after a period of 10 years from the grant date.




price (£)

Number of share



At 1 April - - Granted 1.24 1,051,580 - - Forfeited 1.20 (57,642) - -

At 31 March 993,938 -


Rollover scheme

The plan was established on 27 June 2014 for the exchange of one option under Plan B for the option of three shares in the Company. The options granted vest over a period of 0-4 years and are dependent upon continued employment. The options may be forfeited if the employee leaves the Group and the rights of the participants lapse if the award has not been exercised after a period of 10 years from the grant date.

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price (£)

Number of share



At 1 April - - Converted 0.30 951,000 - - Exercised 0.29 (47,000) - - Forfeited 0.31 (84,000) - -

At 31 March 820,000 -


TextLocal deferred consideration

The deferred consideration arising from the acquisition of TextLocal is treated at remuneration rather than consideration as one of the conditions of payment is continued employment of the shareholders of the company post acquisition. As the Group has the option to settle the deferred consideration in shares in the Company or cash, it is included as a share based payment. The charge is taken to the consolidated Income Statement evenly over the period from acquisition to the settlement date.

Share based payment charge

The Group recognised the following expense related to share-based payments:

31 March 2015

£000 31 March 2014

£000

Accelerated charge in lieu of cancelled scheme 35 - Equity settled share based payment plans 7,259 150

At 31 March 7,294 150

12. Notes to the consolidated Cash Flow Statement

Year ended 31 March

2015 Year ended

31 March 2014 £000 £000

Cash flows from operating activities: (Loss) / profit before taxation (2,287) 5,261 Adjustments: Finance cost expense - 5 Interest income (13) (31) Depreciation of property, plant and equipment 2,219 1,951 Share-based payments 7,294 150 Exceptional costs – IPO preparation costs 1,575 113 Exceptional costs – gain on sale of subsidiary - (340) Amortisation of intangible assets 223 155 Impairment of available-for-sale financial assets 145 -

Operating cash flow before movements in working capital: 9,156 7,264 Decrease / (increase) in receivables 2,461 (4,915) (Decrease) / increase in payables (3,460) 6,694 Increase/(decrease) in provision for defined benefit gratuity plan 161 (7) Foreign exchange loss/(gain) on working capital 498 (283)

Cash generated from operations 8,816 8,753 Finance costs paid - (5) Tax paid (582) -

Net cash generated from operating activities 8,234 8,748

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13. Acquisition of TxtLocal Limited

On 13 October 2014 the Group acquired the entire share capital of TxtLocal Limited ("TextLocal") for the maximum total consideration of £13.2 million, comprising an initial consideration of £10.0 million payable in cash, and £1.0 million satisfied by the issue of 707,564 ordinary shares at a price of 141.33p per share with additional deferred payments, split over two years, of up to a maximum of £2.2 million dependent upon continued employment and accounted for as remuneration. The primary reasons for acquiring the business were the significant cross-sell and lead generation opportunities and to leverage the Group's global footprint by introducing TextLocal's offering into new international markets.

The results of the acquired entity which have been consolidated in the Income Statement from 13 October 2014 contributed £3.8 million of revenues and a profit of £0.5 million to the profit attributable to equity shareholders of the Group during the period, before share based payment charges. Had TextLocal been acquired at the start of the year the contribution would have been £7.5m of revenue and a profit of £1.2m before share based payment charges.

The provisional purchase price allocation is set out in the table below:

Fair value

£000 Net assets acquired:

Identifiable intangible assets1 700

Deferred tax recognised on identifiable intangible assets (140) Property, plant and equipment 27 Trade and other receivables 425 Cash and cash equivalents 2,030 Current and deferred taxation liabilities (4) Trade and other payables (2,111)

Net identifiable assets acquired 927 Goodwill

2 10,073

Total consideration 11,000

Cash consideration 10,000

Cash acquired (2,030)

Consideration net of cash acquired 7,970

1 Identifiable intangible assets consist of £0.7 million of messaging solution software and is amortised in line with Group accounting

policies. 2 The goodwill is attributable to the expected profitability from cross-selling the acquired messaging platform and extending it into the

Group's international markets.

Documents

IMImobile€¦ · The Company’s solutions allow customers to use mobile as a channel to create new revenue streams, as a CRM and customer engagement channel, and as a channel to