EIT Enables IT Group

8 June 2015

Enables IT Group Plc

(“Enables IT”, “the Company” or “the Group”)

Unaudited interim results for the six months ended 31 March 2015

Enables IT, a leading provider of cloud computing, managed and professional services, is pleased to announce its interim results for the six months ended 31 March 2015.

Highlights:

• Revenue for the six months at £2.8 million (H1 2014: £3.6m)
• Recurring revenue 67.7% (H1 2014 54%)
• Gross profit at £0.93 million (H1 2014: £1.04m)
• Operating loss before exceptional items of £456k (H1 2014: loss £478k)
• Cash at bank of £417,000 as at 31 March 2015

Commenting on the results, Michael Walliss, CEO of Enables IT said:

“Whilst overall revenues were down, I am encouraged that recurring revenue levels increased as a proportion of total revenue during the period. However, growing the business from a low base continues to be a challenge. It is taking us longer than expected to secure solid growth and we have taken a number of steps which we hope will result in improved performance over time.”

FURTHER ENQUIRIES

CEO Statement:

Overview

We continue to improve our efficiency in managing work for customers and have been pleased with the levels of customer renewals during the period. Initiatives in managing our group operations have already resulted in cost savings, both in cost of sales as a percentage of revenue, and operating expenditure. However, whilst we had anticipated a period of stabilisation, further reorganisation has been required due to performance in some areas not meeting targets.

Trading

Revenue in the period under review was down compared to the same period to the 31 March 2014 due to delays in existing customers commencing projects and a general downturn in the amount of project work we were able to secure. Acquisition of new clients has been slower than expected which has hindered our growth expectations. The bulk of the losses arose in our European division, whilst the US made a small loss. During this period we have made investments into sales and marketing which have yet to deliver the expected returns, especially in respect of new business in the UK.

As announced in March this year, we have a loan facility in place to draw upon and we anticipate utilising this facility during the second half of the year, to assist in managing our working capital requirements.

Outlook

We have put in place a number of steps which we hope will lead to improved performance in the second half of the year.  However, at this stage it is too early to predict the outcome and we will make further announcements as the situation unfolds.

Michael Walliss

CEO

Consolidated Income Statement

For the six months ended 31 March 2015

Consolidated Balance sheet

As at 31 March 2015

Consolidated Cash Flow Statement

For the six months ended 31 March 2015

Consolidated Statement of changes in equity

For the six months ended 31 March 2015

Notes to the Interim Results

1. General information and basis of preparation

The financial information set out in these condensed consolidated interim financial statements for the six months ended 31 March 2015 and the comparative figures for the six months ended 31 March 2014 are unaudited.  They have been prepared taking into account the requirements of IAS 34 Interim Financial Reporting and the AIM Rules.  They do not contain all the information required for full annual financial statements and should be read in conjunction with the consolidated financial statements of the Group for the year ended 30 September 2014, which have been prepared in accordance with IFRS as adopted by the European Union.

The financial information for the year ended 30 September 2014 set out in this interim report does not constitute statutory accounts as defined in section 434 of the Companies Act 2006.  The Group's statutory financial statements for the year ended 30 September 2014 have been filed with the Registrar of Companies.  The Auditor's Report in respect of those financial statements was unqualified and did not contain statements under section 498 of the Companies Act 2006.

The condensed consolidated interim financial statements are presented in Sterling, which is also the functional currency of the parent company.

Enables IT Group plc is the Group's ultimate parent company.  The Company is a Public Limited Company incorporated and domiciled in the United Kingdom.  Its registered office and principal place of business is Unit 5, Mole Business Park, Randalls Road, Leatherhead, Surrey KT22 7BA.  Its shares are listed on the Alternative Investment Market.

The condensed consolidated interim financial statements have been approved for issue by the Board of Directors on 5 June 2015.

2. Significant accounting policies

The condensed consolidated interim financial statements have been prepared in accordance with the accounting policies adopted in the last annual financial statements for the year ended 30 September 2014.

The accounting policies have been applied consistently throughout the Group for the purposes of preparation of these condensed consolidated interim financial statements.

3. Principal risks and uncertainties

The management of the business and the execution of the Group’s strategy are subject to a number of risks. The key business risks affecting the Group are set out below.

Dependence on major customers

Dependence on key suppliers

Competition

Technology

These risks are unchanged from those reported in the group’s 2014 Annual Report and further details may be found on page four of that report.

4. Segmental information

The services the group provides are in regard to one activity. Accordingly the primary segmental disclosure is based on geographical location.

5. Goodwill and intangible assets

Goodwill and other intangibles relate to the reverse acquisition of Enables IT Limited, the acquisition of The Support Force Group Limited and the acquisition of the business and assets of Know Technology LLC.

Impairment testing has been performed over the total balance of intangible assets which were allocated to the one cash generating unit (CGU) of the Group, that of the sale of IT managed services and technologies. The Group tests goodwill annually for impairment or more frequently if there are indications that goodwill may be impaired.

The carrying value of intangible assets and goodwill has been assessed for impairment by reference to the value in use. Value in use was determined by discounting the future cash flows generated from the continuing use of the unit.

An impairment charge of £32,395 was recognised at 31 March 2015 (£109,000 at 31 March 2014) against the carrying value of certain customers at Enables IT (UK) Ltd and Enables IT Inc. which were considered to have no future value to the business.

Amortisation and impairment charges are recorded within exceptional items.

6. Loss per share

The loss per share is based on the net loss for the period attributable to ordinary equity holders divided by the weighted average number of ordinary shares outstanding during the period.

The basic loss per share has been calculated by dividing the retained loss for the period of £487,288 (2014: loss of £817,991) by the weighted average number of ordinary shares of 27,284,303 (2014: 24,771,764) in issue during the period.

7. Dividends

No dividend is proposed for the six months ended 31 March 2015.

8. Copies of Interim Results

Copies of the Interim Results will be available on the Enables IT website, Investor Section - www.enablesit.com