SOURCE: NetDimensions (Holdings) Limited

September 19, 2016 02:00 ET

NetDimensions (Holdings) Limited: Half Yearly Report

HONG KONG, CHINA--(Marketwired - Sep 19, 2016) - NetDimensions (Holdings) Limited (AIM: NETD) (OTCQX: NETDY)

AIM: NETD; OTCQX: NETDY 

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

Half Yearly Report

NetDimensions (AIM: NETD; OTCQX: NETDY), a global provider of performance, knowledge and learning management systems, is pleased to announce its half year results for the period ending 30 June 2016.

Financial Highlights

  • Total revenue of US$10.5M (2015 H1: US$10.6M)
    • 6% increase in revenue from our global hosted secure SaaS offering to US$5.4M (2015 H1: US$5.1M)
  • Gross margin increased to 85% (2015 H1: 81%)
  • 56% improvement in adjusted EBITDA loss to US$0.8M (2015 H1: loss of US$1.8M)
    • 8% reduction in cost of sales, selling & operating expenses to US$11.9M (2015 H1: US$12.9M)
  • Cash as of 30 June 2016 US$11.2M (2015 FY: US$12.0M)

Operations Highlights

  • 4.2M active users at the end of the period (2015 H1: 3.9M)
  • Recurring revenue was 70% of total revenue in the period (2015 H1: 68%)
  • 12% increase in Research & Development investment to US$1.8M (2015 H1: US$1.6M)
    • All of which was expensed to the Income statement during the period
  • 17 new clients added in the period through direct and reseller channels with a combined contracted value of US$1.4M

Graham Higgins, Chairman of NetDimensions, commented: "The Company made good progress in the period in terms of better cost control and declaring a substantially smaller loss than the prior period. The Company did experience some delays in rolling out some larger client contracts in the first half, however the high consequence industries which we service continue to show demand for our product suite."

Enquiries:

NetDimensions (Holdings) Limited   Tel: +852 2122 4500
Jay Shaw
Matthew Chaloner
   
     
Panmure Gordon (UK) Limited (Nomad & Broker)   Tel: +44 20 7886 2500  
Fred Walsh    
Peter Steel    
     
Walbrook PR Ltd (Financial Public Relations)   Tel: +44 20 7933 8780
Paul Cornelius   netdimensions@walbrookpr.com
Sam Allen    
Nick Rome    
Helen Cresswell    

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

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

Recognised as one of the talent management industry's top-rated technology suppliers, NetDimensions' award-winning solutions have been chosen by leading organisations worldwide including ING, Cathay Pacific, Chicago Police Department, Geely Automotive, Fugro Group and Fresenius Medical Care, tesa SE and DB Schenker.

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

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

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014.

Chairman's Statement for the six months Ended 30 June 2016

The revenue in the six months to 30 June 2016 was similar to the prior period at US$10.5M (2015 H1: US$10.6M). The sales in the first half were impacted by delays in the roll-out of some larger client engagements which impacted both growth in licence revenue and associated services.

Financial Highlights

  • Total revenue of US$10.5M (2015 H1: US$10.6M)
    • 6% increase in revenue from our global hosted secure SaaS offering to US$5.4M (2015 H1: US$5.1M)

  • Gross margin increased to 85% (2015 H1: 81%)

  • 56% improvement in the adjusted EBITDA loss to US$0.8M (2015 H1: loss of US$1.8M)
    • 8% reduction in cost of sales, selling & operating expenses to US$11.9M (2015 H1: US$12.9M)

  • Cash as of 30 June 2016 US$11.2M (2015 FY: US$12.0M)

Financial Summary
The financial results for the period ending 30 June 2016 saw both revenue and invoiced sales coming in somewhat lower than expected. Revenue was largely unchanged when compared to the six months to June 2015, US$10.5M (2015 H1: US$10.6M) and invoiced sales were 3% lower, US$9.5M (2015 H1: US$9.8M).

Revenue from higher margin SaaS licences and multi-year on premise licences increased by 8% to US$6.8M (2015 H1: US$6.3M). The increase in licence revenue was off-set by a reduction in support and maintenance revenue which declined by 33% to US$0.6M (2015 H1: US$0.9M) and software customisation & implementation revenue which declined by 9% to US$3.1M (2015 H1: US$3.4M). The reduction in support and maintenance revenue is a result of the Company's strategy of transitioning clients away from legacy perpetual licences to either SaaS or multi-year on premise licenses. Software customisation & implementation revenue was impacted by the delays in the roll out of some larger client engagements.

Invoiced sales to clients in high consequence industries represented 91% of total invoiced sales (2015 H1: 92%), which is in line with our strategy of becoming a leading provider of Talent Management Systems and related compliance solutions to high consequence industries.

The North America region was the largest market for the Group during the period comprising 48% of Group revenues. Europe, Middle East & Africa ("EMEA") accounted for 40% of Group revenues and Asia Pacific including China 10%. The rest of the world made up 2%.

The Group continues to focus on supplying software via its global hosted secure SaaS offering and revenues from this product offering increased by 6% to US$5.4M (2015 H1: US$5.1M).

The Company continued to make improvements in expense management leading to a reduction of 8% in cost of sales, selling and operating expenses to US$11.9M (2015 H1: US$12.9M).

Gross Margins improved in the period to 85% (2015 H1: 81%) as a result of a reduction in the costs of sales related to services and a better product mix of higher-margin licence revenue which represented 64% of total revenue (2015 H1: 60%).

The improved margin and reduction in expenses resulted in the Group's adjusted EBITDA loss coming in 56% better than prior period. The Group's adjusted EBITDA loss excluding net foreign exchange gains US$0.2M, intangible asset amortisation (US$0.2M) and non-cash share-based payments (US$0.3M), was $0.8M (2015 H1: loss of US$1.8M). NetDimensions' loss before tax was US$1.2M (2015 H1: loss of US$2.5M).

Cash generated from operating activities was US$0.2M in the period (2015 H1: cash absorption of US$1.3M). The Group's cash balance at the end of the period was US$11.2M (2015 H1: US$3.5M) and the accounts receivable balance was US$4.6M (2015 H1: US$3.5M).

Operations Review

  • During the period we made the following progress in line with our business plan:

  • 4.2M active users at the end of the period (2015 H1: 3.9M)

  • Recurring revenue was 70% of total revenue in the period (2015 H1: 68%)

  • 12% increase in Research & Development investment to US$1.8M (2015 H1: US$1.6M)
    • All of which was expensed to the Income statement during the period

  • NetDimensions Ranked as a Leader in the 2016 Aragon Research Globe™ for Corporate Learning. NetDimensions was ranked as a 'Leader' for excellence in:
    • enterprise LMS functionality
    • talent management
    • compliance
    • analytics
    • language support

  • NetDimensions has been positioned again as a "Core Leader" in the unique European learning and talent market insight report, Fosway 9-Grid™ for Learning Management Systems (LMS)
  • 17 new clients added in the year through direct and reseller channels with a combined contracted value of US$1.4M. These new clients operate in a number of high consequence industries including healthcare, financial services, life sciences and precision manufacturing

Board

James Brooke, Non-Executive Director of the Company has decided to resign from the Company with immediate effect. We would like to thank James Brooke, for his contribution to the Board over the last three years, his financial expertise has been an asset to the Company and we are glad that he will continue to retain an interest in the Company as a valued shareholder, the Board would like to thank him and wish him well for the future.

Outlook

The Company made good progress in the period in terms of better cost control and declaring a substantially smaller loss than the prior period. The Company did experience some delays in rolling out some larger client contracts in the first half, however the high consequence industries which we service continue to show demand for our product suite. 

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http://www.rns-pdf.londonstockexchange.com/rns/1401K_1-2016-9-19.pdf

Contact Information