Final Results

Press Release

19 March 2014

zamano PLC

('zamano', the 'Company' or the 'Group')

Final Results

zamano PLC (AIM:ZMNO, ESM:ZAZ), a leading European provider of interactive applications and services to mobile devices, has today announced results for the 12 months ended 31 December 2014. 

Highlights:

· Revenue of €19.863M (up 23.9% on revenue of €16.034M, 2013);

· EBITDA* of €2.735M (up 4.9% on EBITDA of €2.608M, 2013);

· Operating profit of €2.232M (up 0.4% on operating profit of €2.224M, 2013);

· Pre-tax profit €2.177M (up 13.5% on pre-tax profit of €1.918M, 2013);

· Post-tax profit €1.892M (up 10.6% on post-tax profit of €1.711M, 2013);

· Significant improvement in net cash during 2014 (net cash of €4.603M at 31 December

2014 versus net cash of €2.139M at 31 December 2013);

John Rockett, Chairman zamano, commented: " The Group recorded very pleasing increases in EBITDA, Pre-Tax and Post-Tax profits during the year under review, and, the strong operating performance of the Group during 2014 translated into a consistent improvement in zamano's net cash position"

"After another highly satisfactory outcome in 2014, the Group intends to remain focussed on maintaining its core business, while at the same time, looking for acquisition opportunities to enable it to strategically re-align the Group".

Ross Conlon, CEO zamano, commented: "In the year ended 31 December 2014, zamano maintained its upward curve across virtually all of its financial performance metrics. The Group achieved considerable increases in sales, EBITDA, pre-tax and post-tax profits. It also significantly improved its balance sheet position".

"In 2015, the Group will continue to strive to address the wide array of opportunities available in the web and mobile marketing space. zamano's significant expertise in data analytics, mobile media and mobile billing/payments makes it an attractive partner for a growth orientated technology driven business operating in those areas".

*EBITDA is calculated as earnings before interest, tax, depreciation, amortisation and share based payment amounts.

- Ends -

For further information, please contact:

zamano plc

Ross Conlon, Chief Executive Officer

Tel: + 353 1 554 7313

Michael Connolly, Chief Financial Officer

Tel: +353 1 554 7261

Investec Corporate Finance

Shane Lawlor/Conor Murtagh

Tel: + 353 1 4210000

Cenkos Securities

Derrick Lee/Neil McDonald

Tel: + 44 (0) 131 220 6939

Media Enquires:

MCOMM Communications Consultants

Richard Moore

Tel: +353 1 661 9428

Mob: +353 87 241 4751

Email: [email protected]

zamano plc & subsidiaries

Chairman's Statement

I am pleased to report a highly satisfactory performance for zamano at both an operational and financial level for the year ended 31 December 2014.

zamano has achieved a significant increase in revenues during 2014, with sales of €19.863 million being 23.9% ahead of last year (2013: €16.034 million). The increase in sales recorded in 2014 was primarily attributable to a concentrated effort to develop our business-to-business (B2B) activity in the UK together with strong growth in our Australian business.

Gross profit recorded for the year at €4.778 million was down 4% on the previous year's figure of €4.976 million as gross profit margins decreased from 31% in 2013 to 24% in 2014. This margin decline was largely attributable to a significant increase in lower margin third party activity in the UK B2B market during the second half of 2014.

The Group recorded very pleasing increases in EBITDA, Pre-Tax and Post-Tax profits during the year under review with EBITDA at €2.735 million 4.9% ahead of the 2013 EBITDA outturn of €2.608 million. Pre-Tax profit for the year at €2.177 million was 13.5% ahead of 2013 (€1.918 million), while the Post-Tax outturn at €1.892 million was 10.5% ahead of the corresponding figure for 2013 of €1.711 million.

As in the previous year, the strong operating performance of the Group during 2014 translated into a consistent improvement in zamano's net cash position. Net cash at 31 December 2014 was €4.603 million, an increase of €2.464 million over the equivalent figure (€2.139 million) at 31 December 2013. The strengthening of the Group's balance sheet position during 2014 is underpinned by the capacity of the business to generate healthy positive cash flow from its operations, and, demonstrates the Group's ability to adapt quickly to changing market circumstances and leverage its relatively low cost base.

In my statement with last year's results, I informed shareholders that zamano wished to expand its geographic footprint and broaden its product market base. In that regard, I informed shareholders of our entry into new territories in Eastern Europe. During the course of 2014 we continued to test new markets. However, the economic returns that were generated in territories like Czech Republic and Slovakia were not significantly attractive. Consequently, we have, for the time being, discontinued customer acquisition in those markets and refocused our marketing spend on English speaking territories like the UK and Australia where we enjoyed considerable success.

In the new product area, Messagehero, a messaging product for the SME and Enterprise market in Ireland was launched in late 2013. During the year, zamano carried out a number of refinements to the product to meet the ever changing needs of its target customers. In addition, during 2014 the Group explored a number of acquisitions, primarily in the UK and Ireland, to complement the Messagehero offering and accelerate its entry to the market.

*EBITDA is calculated as earnings before interest, tax, depreciation, amortisation and share based payment amounts.

zamano plc & subsidiaries

Chairman's Statement (continued)

zamano has also opened discussions with mobile network operators and an anchor client to develop a single-click micro-payment solution for mobile devices. We hope to report further progress with these initiatives during 2015.

The Board and management remain committed to diversifing both the product range and geographical spread of its existing business and will continue to pursue opportunities as they present themselves or as they are targeted. Undoubtedly, there is a buoyant market environment for web and mobile commerce products and services at present. zamano has considerable capability in data analytics, mobile billing/payments and mobile marketing where it can add value to a joint venture, licensing or acquisition situation and we hope to capitalise on these core strengths in the coming year.

During the period under review, zamano and its advisors put considerable resources into identifying acquisitions, investments and joint venture opportunities, primarily in the UK and Ireland. In this regard, strict acquisition criteria have been formulated and agreed by the Board. The Group and its advisors identified and examined a number of opportunities in mobile media, billing and messaging, but unfortunately to date none of these potential investments adequately met the criteria set. We do, however, continue to actively pursue a number of targets with a view to diversifying our business operations.

Regulation, particularly in our principal geographic territories of the UK and Ireland, remains an ongoing feature of our business. zamano is committed to maintaining and delivering the highest levels of customer experience and service in a compliant manner. During the year, the Group worked diligently with a number of the key stakeholders in the industry to help ensure a high level of compliance with the relevant codes of practice in both markets.

After another highly satisfactory outcome in 2014, the Group intends to remain focussed on maintaining its core business, notwithstanding the many challenges it faces, while at the same time, looking for acquisition opportunities to enable it to strategically re-align the Group.

Finally, I would like to thank all of the Groups' employees for their considerable commitment and dedication to the business during the year just ended. The extremely positive financial results for 2014 which are contained in the Annual Report and Accounts are attributable to you all.

John Rockett

Chairman

zamano plc & subsidiaries

Chief Executive Officer's Statement

Introduction

In the year ended 31 December 2014, zamano maintained its upward curve across virtually all of its financial performance metrics. The Group achieved considerable increases in sales, EBITDA, pre-tax and post-tax profits. It also significantly improved its balance sheet position during the year increasing its net cash balances by €2.464 million. Gross contribution margin was the only financial metric that fell, as some new business wins in the UK carried a lower margin than our conventional mobile marketing products. Nevertheless, the overall performance of the Group in 2014 was highly satisfactory, which demonstrates the resilience and efficiency of our operations.

Activity in UK and Ireland continued to dominate our sales, with business in the UK increasing significantly during the second half of the year. During the year, we discontinued customer acquisition in Eastern Europe, but we can still reactivate our interest there when market conditions improve. This fall-off in activity was compensated for by a successful strategic marketing campaign in Australia which drove sales well ahead of 2013.

The market for mobile products continues to expand, with smartphones driving this growth. Global smartphone penetration is forecast to reach 5.4 billion units in 2015, a penetration level of approximately 60%. Global revenue from mobile content is expected to reach US$13 billion in 2017. The number of global mobile payment users is expected to top the 1 billion mark by the end of the current year which equates to US$1 trillion worth of global mobile payments.

The growth in mobile users and the changing face of mobile payments driven by the depth of smartphone penetration is underpinning the mobile entertainment and mobile commerce markets in which zamano operates. In conjunction with its mobile network operator and global aggregator partners, the Group intends to actively pursue mobile content and payment opportunities in its key territories during the course of 2015.

Market Review

The UK business, which is comprised of web and mobile entertainment products and business-to-business services, performed exceptionally well during the year ended 31 December 2014. Revenues for the year were €15.175 million representing an increase of 56.5% over 2013 (€9.698 million). The principal driver of this surge in revenue was the opening up of a number of new business relationships and by leveraging our direct binds to the Mobile Network Operators, a key asset for the company.

The Irish business unit, which is also comprised of web and mobile products and business-to-business services, performed in accordance with budget during the year under review. Sales at €3.586 million fell short of the 2013 outturn of €4.133 million by 13.2%. Given that the sales decline amounted to 42.6% in the previous year the extent of the sales decline was arrested somewhat in 2014. However, the contribution margin % increased to 30.2% from 28.5% in the previous year as a result of changes in our product mix. Messagehero, our new messaging product for SME's launched in late 2013, continues to be refined to meet the ever changing requirements of the market. Modest sales levels were achieved in trial market environments during H2 2014.

zamano plc & subsidiaries

Chief Executive Officer's Statement (continued)

Market review (continued)

As announced with our first half results, zamano discontinued customer acquisition in the Czech Republic and Slovakia due to a changing regulatory environment which impacted on the economics of the business in those territories. As a result, sales in the "other territories" category fell from €1.4million in 2013 to €1.1 million during 2014. Of these sales, €0.982 million was recorded in Australia with the balance coming from other European markets. Other territories contributed €0.143 million in gross profit, which represented a gross margin contribution of 13%, during the financial year ended 31 December 2014.

Financial Review

The Chairman commented in his statement on the significant overall improvement in Group financial performance in 2014 when compared to the previous year. In particular, growth in sales, EBITDA, operating profit, pre and post-tax profit was achieved relative to 2013. A significant uplift in sales, albeit with lower gross margins than 2013, supported by tight operational controls were the main drivers of the uplift in earnings achieved during the year just ended.

The UK and Irish businesses effectively underwrote the improved financial performance of the Group during 2014. Group revenues were ahead of 2013 by a significant 23.9% (€19.863 million 2014; €16.034 million 2013), with UK revenues of €15.175 million 56.5% ahead of the equivalent figure for 2013 of €9.698 million. Irish revenues at €3.568 million were not unexpectedly down by 13.2% on the 2013 outturn of €4.133 million; however, the rate of sales decline in the Irish business was significantly reduced in 2014.

Group gross profit for 2014 at €4.778 million was just short of the €4.976 million achieved in 2013, but the gross margin percentage at 24% was down significantly on the 31% achieved in 2013. This was largely due to the changing mix of our business in the UK. EBITDA for 2014 at €2.735 million was 4.9% ahead of the 2013 figure of €2.608 million.

The Group recorded an operating profit for 2014 of €2.232 million, marginally ahead of the €2.224 million achieved in the previous year. Profit before tax at €2.177 million was 13.5% ahead of the corresponding figure for 2013 of €1.918 million, while profit after tax at €1.891 million was 10.5% ahead of the 2013 outturn of €1.771 million. Basic earnings per share for 2014 at €0.019 were 11.8% ahead of the equivalent figure for 2013 of €0.017.

The strong earnings performance of the Group referred to above was reflected in a significant strengthening of the Group's balance sheet position. In particular, cash net of loan balances outstanding at 31 December 2014 was €4.603 million, more than double the net cash position of €2.139 million at the end of the previous year. The availability of such significant cash balances provides the Group with a degree of flexibility in funding its product development and acquisition initiatives.

zamano plc & subsidiaries

Chief Executive Officer's Statement (continued)

Outlook

zamano continued to improve its operating performance during 2014, despite a challenging market and regulatory environment in its core product areas. The growth recorded in sales, EBITDA, pre and post-tax profits and the effective translation of this into cash is a testament to the operating efficiency and flexible nature of the business.

During 2014, the Group has sought to capitalise on the buoyant market which currently exists for web and mobile commerce products and services. zamano continues to invest in product development in the messaging and micro payments/billing areas, in particular. This programme is complemented by the Group's focus on identifying acquisition, investment and joint venture opportunities in its principal geographic markets of the UK and Ireland. zamano continues to examine a number of opportunities in mobile media, payments/billing and messaging with a view to both growing the business and diversifying its product base by providing attractive offerings to web, mobile and smartphones users.

In 2015, the Group will continue to strive to address the wide array of opportunities available in the web and mobile marketing space. zamano's significant expertise in data analytics, mobile media and mobile billing/payments makes it an attractive partner for a growth orientated technology driven business operating in those areas.

The Board and management intend to continue to operate its core web and mobile marketing and business-to-business services activities in an effective and efficient manner for the benefit of shareholders during the rest of 2015 and beyond. In conjunction with this focus on our core activities and markets, we will actively pursue our strategy of diversifying the business via the development of new products and the continuation of our acquisition programme.

Ross Conlon

Chief Executive Officer

zamano plc & subsidiaries

Consolidated income statement

for the year ended 31 December 2014

Consolidated statement of comprehensive income

for the year ended 31 December 2014

On behalf of the board

Ross Conlon Pat Landy

Director Director

zamano plc & subsidiaries

Consolidated balance sheet

at 31 December 2014

On behalf of the board

Ross Conlon Pat Landy

Director Director

zamano plc & subsidiaries

Consolidated statement of changes in equity

zamano plc & subsidiaries

Consolidated cash flow statement

for the year ended 31 December 2014

zamano plc & subsidiaries

Notes to the consolidated financial statements

for the year ended 31 December 2014

1 Reporting entity

zamano plc ('the company") is a company domiciled in the Republic of Ireland. The address of the company's registered office is 3rd Floor, Hospitality House,16-20 South Cumberland Street, Dublin 2.

The consolidated financial statements of the company as at and for the year ended 31 December 2014 comprise the company and its subsidiaries ("the Group").

The company's shares are publicly traded on the London Alternative Investment Market ("AIM") and the Enterprise Securities Market ("ESM") in Dublin.

The principal activities of the Group are the provision of mobile data services and technology.

2 Basis of preparation

(a) Statement of compliance

The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRSs") as adopted by the EU. A summary of pronouncements that came into effect after that date and the likely impact of these on the Group are set out in note 5. The consolidated financial statements were authorised for issue by the board of directors on 18 March 2015.

(b) Going concern  

Having regard to the Group's projected earnings over the next 12 months from the date on which these financial statements were approved, the directors consider that it continues to be appropriate to prepare the financial statements on a going concern basis.

(c) Basis of measurement

The consolidated financial statements for the year ended 31 December 2014 have been prepared on an historical cost basis, with the exception of share-based payments, which are stated at grant date fair value.

zamano plc & subsidiaries

Notes (continued)

2 Basis of preparation (continued)

(d) Functional and presentation currency

These consolidated financial statements are presented in Euro ("€") which is the functional currency of the company and the majority of the Group's entities. All financial information presented in Euro has been rounded to the nearest thousand.

(e) Basis of consolidation

The consolidated financial statements consolidate the financial statements of zamano plc and all its subsidiaries up to 31 December 2014. The Group controls an entity when it is exposed to, or has rights to variable returns from its involvement with the entity and has the ability to affect those returns through the power over the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date on which control ceases.

All subsidiaries have a financial year end of 31 December.

Business combinations are accounted for using the acquisition method as at the acquisition date, i.e. when control is transferred to the Group. Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

zamano plc & subsidiaries

Notes (continued)

3 Operating segments

The Group is managed based on three reportable segments which are defined based on geographical markets as follows: Republic of Ireland (ROI) and United Kingdom (UK). The Group previously reported the United States of America (USA) as a reporting segment, however activity in this market has decreased and is therefore no longer considered a significant reporting segment in the current financial year. It also has sales in other jurisdictions but these are not deemed to be standalone reportable segments under the requirements of IFRS 8 and are classified as "other locations" in the table below. The Group has restated prior year comparable information in oder to conform with those segments reported in the current year.

The Group's sales consist of the development, promotion and distribution of mobile content and interactive services directly to consumer and also facilitating the communication and interaction between businesses and consumers on mobile phone through a range of value-added mobile applications.

Information regarding the results of each reportable segment is included below. Performance is measured based on segment results as included in the reports that are reviewed by the Group's Chief Operating Decision Maker ("CODM") which is determined to be the board of directors.

The following tables present revenue and profit and certain assets and liability information regarding the Group's reportable segments:

Year ended 31 December 2014

*Unallocated expenses comprise payroll costs, amortisation of intangibles and central overheads such as rent, administration, overhead costs which are not allocated to individual reportable segments.

zamano plc & subsidiaries

Notes (continued)

3 Operating segments (continued)

* The unallocated assets principally comprise of software, group cash and deferred tax. The unallocated liabilities principally relate to loan liabilities.

zamano plc & subsidiaries

Notes (continued)

3 Operating segments (continued)

(As restated)

Year ended 31 December 2013

*Unallocated expenses comprise payroll costs, amortisation of intangibles and central overheads such as rent, administration, overhead costs which are not allocated to individual reportable segments.

zamano plc & subsidiaries

Notes (continued)

3 Operating segments (continued)

(As restated)

* The unallocated assets principally comprise intangibles and Group cash and deferred tax. The unallocated liabilities principally relate to loan liabilities.

zamano plc & subsidiaries

Notes (continued)

4 Income tax expense

 (a) Analysis of charge for the year:

zamano plc & subsidiaries

Notes (continued)

5 Earnings per share

Basic earnings per share amounts are calculated by dividing net profit for the year attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year. Diluted earnings per share amounts are calculated by dividing the net profit attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on the conversion of all the dilutive potential ordinary shares into ordinary shares.

The following reflects the income and share data used in the basic and diluted loss per share computations:

zamano plc & subsidiaries

Notes (continued)

6 Adjusted earnings per ordinary share

The following reflects adjusted earnings per share based on adjusted net income:

Reconciliation of reported operating profit across segments to earnings before interest, tax, depreciation and amortisation ("EBITDA").

zamano plc & subsidiaries

Notes (continued)

7 Impairment of goodwill

Goodwill arising from business combinations in prior years was tested for impairment at 31 December 2014. Based on this test, the directors have determined that no impairment charge is required (2013: €Nil) in the year.

For the purposes of the impairment testing, goodwill has been allocated to Cash Generating Units

("CGUs") which correspond to significant operating segments of the Group as follows:

2014 2013

€'000 €'000

Ireland 1,820 1,820

UK 4,245 4,245

_____ _____

6,065 6,065

_____ ____ _

The recoverable amount of the goodwill for each CGU has been determined based on a value-in-use calculation using cash flow projections based on EBITDA less capitalised research and development costs from financial budgets approved by senior management covering a one year period which have been rolled on for a further 4 year period.

Key assumptions used in value-in-use calculations

The calculation of value-in-use for each CGU is most sensitive to the following assumptions:

· the discount rate; and

· budgeted EBITDA growth rate

The discount rate reflects management's estimate of the risks specific to the CGU. In determining the appropriate discount rate, management has considered factors such as the average cost of capital and expected rate of return and has applied a pre-tax discount rate of 12.6% for both CGUs.

Another key assumption used within the cash flow projections is that EBITDA will grow at 3% per annum for both CGUs from FY2015 to forecast levels.

No reasonable charge in the assumptions would result in an impairment to the carrying value of goodwill.

zamano plc & subsidiaries

Notes (continued)

8 Related party disclosures

Compensation of key management

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Group, and includes the executive and non-executive directors and certain members of senior management.

Related party transactions

On 26 June 2014, Pageant Holdings Limited ("Pageant") acquired 1,533,333 ordinary shares in the company at a price of €0.03 per ordinary share pursuant to warrants issued to Pageant on 21 December 2012. Pageant now holds 26,938,510 ordinary shares in the company representing approximately 27.09% of the entire enlarged issued ordinary share capital of the company. Peter Furlong, a director of the company, is also a director of Pageant.

In addition during the year the company paid an arrangement fee of €46,000 to Pageant which arose on a loan liability settled in the prior year.

zamano plc & subsidiaries

Notes (continued)

9 Litigation

In the normal course of business, the Group is involved in various legal proceedings with third parties, the outcome of which is uncertain. Where appropriate, provision is made in the financial statements based on the directors' best estimate of the potential outcome of such proceedings. It is the policy of the Group to rigorously defend all legal actions taken against the Group.

10 Subsequent events

There have been no significant post balance sheet events.