Final Results

25 March 2015

ServicePower Technologies plc

("ServicePower" or the "Company")

Final Results

ServicePower (AIM:SVR), a market leader for field service management software, announces its audited results for the year ended 31 December 2014.

Financial summary

· Revenues decreased 9% to £12.7 million (2013: £14.0 million)

o Reflecting wind-down of low margin service contracts and the mix of SaaS vs licence sales

· SaaS revenue increased 17% to £2.85 million (2013: £2.43 million)

o Representing 22% of total revenues

· Gross profit decreased by 9% to £6.0 million (2013: £6.6 million) due to the mix of SaaS vs licence sales

· Gross margin increased to 47.5% (2013: 47.3%)

· Loss after tax of £0.9 million (2013: profit £0.2 million), 2013 benefited from £0.65m FX gain and gain on bargain purchase of £0.4 million

· Basic and diluted loss per share of 0.5p (2013: earnings per share of 0.1p)

· Consistent cash balance of £2.7 million (2013: £2.7 million)

Operational highlights

· High client retention - 17 new contracts signed (13 with existing customers)

· ServiceScheduling - launched new functionality for new verticals

o Launch of global contract in UK - further rollouts Brazil, Mexico and France

o New global 5 year contract in US - expanding to over 20 more countries by 2017

o New contract for deployment in Germany

· Largest implementation of ServiceClaims and SeviceDispatch successfully completed

· ServiceMobility fully transitioned to the cloud - hosted on Amazon Web Services

· ServiceOperations launched with 7 new clients - now largest managed network in UK

· Working on new intellectual property in partnership with the Knowledge Transfer Partnership ("KTP")

· Named as Visionary by Gartner in Magic Quadrant for Field Service Management

· Won 2014 M2M Evolution for IoT Excellence Award

Marne Martin, CEO of ServicePower, commented:

"Upgrading existing customers in order to facilitate additional product and license sales was a large focus in 2014, as was growing SaaS revenue which grew by more than 15% from 2013 to 2014, and is now 22% of total turnover. With our demonstrated ability to win new customers and the investment in our global field management platform, ServicePower is positioned for a strong performance in 2015 and beyond. Trading in 2015 has begun positively, and we are confident of a successful outcome to the year."

For further information, please contact:

About ServicePower

ServicePower, publicly traded on the AIM market operated by the London Stock Exchange (AIM:SVR), allows companies to manage their employed field resources in the best suited geography, ensure they have the right mix of skills, and outside this geography create a network of independent, authorised service contractors whose costs are efficiently managed by our sophisticated warranty management software. The schedules and routes for both the employed field resources and the independent servicers are optimised by ServicePower's technology to ensure the right balance between the cost of operations and ensuring customers receive a superior service experience.

ServicePower Technologies Plc

Joint Statement of the Chairman and Chief Executive

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ServicePower Technologies Plc ("ServicePower") provides the leading wholly-configurable optimisation technology in the field service industry for employed and contracted technicians, with now an accelerated trajectory of new features and algorithms as well as cloud/SaaS product options for existing and new customers. The patented technology provides field service organisations with a fully mobilised scheduling and dispatch solution which can be used to dynamically route and dispatch employed, contracted 3rd party or on demand field resources, based on robust rules based logic that enables clients to mix resources to achieve productivity, cost, margin and customer service objectives.

In December 2014, ServicePower was named a Visionary by Gartner in the Magic Quadrant for Field Service Management, and earlier in the year received the 2014 M2M Evolution for IOT Excellence Award from TMC and Crossfire Media.

Upgrading existing customers in order to facilitate additional product and license sales was a large focus in 2014, as was growing SaaS revenue. While this had a negative impact on revenue year on year, SaaS revenue grew by more than 15% from 2013 to 2014, and is now 22% of total turnover. Investment into new marketing, sales processes and teams lead to more opportunities both in 2014 and coming into the new year. Client retention remained very high, with 17 new contracts (13 with existing customers) being signed in 2014. Enterprise sales cycles remain long, typically 12-24 months, but the focus on ServicePower's core products and partnering with customers is achieving results.

The financial results for 2014 represent a strong growth in SaaS contracts. Client contracts were renewed showing a high retention rate, with new clients won and there was continued strong interest in the overall product suite. Technologically, the Company continues to improve its product suite year on year with growing awareness of our brand in the marketplace. Additionally, the Company is moving away from low or no margin pass-through business contracted prior to 2013 which had the impact of reducing revenue by more than £500,000 in 2014.

With £2.7 million of cash at year end, the same cash balance as at year end 2013, the fundamentals of the business remain strong, with ServicePower having a powerful Field Service technology platform that is progressively differentiating itself from the competition.

Historically, the Company has reported revenues in two segments: ServiceScheduling (including ServiceMobility and Smart Services/Broker) and ServiceOperations (including ServiceClaims and ServiceDispatch and ServiceMarket). The Company is moving to reporting revenue in the following groupings of SaaS, Managed Services, License/Support and Maintenance, which fits with the migration to a single integrated platform for products and the launch of new cloud functionality for customers.

Continuous product investment and innovation in new cutting edge mobile technology and connected services, utilising M2M and IoT (Internet of Things), strategic alliances and partnerships, and increasing capabilities in implementation and deployment services are driving increasing global momentum. Additional languages are being implemented with further expansion into four new countries in 2015 already contracted for.

Product development to launch the on-premise version of ServiceMobility was completed in 2013 and in 2014 we completed the transition to the cloud version hosted on Amazon Web Services. The company has an exciting roadmap for 2015 for expanding the functionality of ServiceMobility to provide a competitive and integrated field service management product for small and medium business enterprises.

ServiceScheduling launched new functionality during 2014, related to new verticals such as facility management and further competitive advantages were also built out in the verticals where we already have a strong presence such as insurance, security and manufacturing. The Company partnered with the Knowledge Transfer Partnership ("KTP") in late 2014 to begin working on research for new algorithms and other intellectual property related to unique use cases. The momentum with ServiceOperations and the roll-out of new functionality in 2014 was impressive. The Company completed one of the largest ServiceClaims and ServiceDispatch implementations in its history, and we are now expanding into Canada with the same client in 2015. ServiceOperations today supports 80% of North American consumer electronics warranty and service contract claim processing. The momentum in the United Kingdom has also accelerated with the new deals being signed in late 2014 and early 2015.

The Board is focused on generating increased organic profits, building channels and alliances, and winning new customers in the verticals where its products are best suited. The Company will continue making progress towards the creation of a unified platform while, at the same time, utilising its capabilities to partner with other technology providers that are already engaged in complimentary activities in field service or are looking to strategically improve their position or enter the field service market.

Financial Review

Total revenue for the year decreased by 9% to £12.7 million (2013: £14.0 million), although SaaS revenue grew by £0.4 million, representing an increase of more than 17% for that segment of revenue. Excluding the low margin pass-through contract that is tailing off and will expire in 2015, ServiceScheduling segment licence and consultancy revenue decreased by 6% to £5.6 million (2013: £6.0 million) due to efforts to upgrade customers for which additional professional services revenue was not able to be recognised and delays in implementing new contracts and pipeline wins. The low margin pass-through contract previously reported in the ServiceScheduling segment that is winding down decreased by 31% to £1.1 million (2013: £1.6 million). Mobility, included within the ServiceScheduling segment, decreased by 18% to £0.9 million (2013: £1.1 million) given the investments and team allocation to building out the cloud product in 2014.

ServiceOperations revenue decreased by 8% to £5.9 million (2013: £6.4 million), including £0.9 million in license sales (2013: £6.4 million), mainly due to a 5% decline in the UK ServiceOperations segment as lower margin managed service contracts were allowed to expire given the focus on winning software rather than managed service business.

The Company continued to invest in expanding functionalities across all of its product range as well as its unified platform activities, investing £1.1 million in 2014 (2013: £1.0 million) in its organic development efforts separate from acquisitions. Of the £1.1 million invested in 2014 £0.7 million was capitalised based on development activities across ServiceScheduling, Service Operations and SmartServices/ServiceBroker in accordance with IAS 38.

Gross profit for the period decreased by 8% to £6.0 million (2013: £6.6 million), although the percentage gross margin remained consistent year on year. Loss before tax was £1.0 million (2013: profit before tax of £0.05 million).

The basic and diluted loss per share for the full year was 0.5p.

Cash balances were £2.7 million at 31 December 2014, consistent with the cash balances at 31 December 2013 of £2.7 million.

Operational Review

Creating a complete field services platform

Developed as an industry agnostic platform, the ServicePower software supports clients ranging from insurance, third party administration and home warranty providers, to manufacturers of appliances and electronics, heating and air systems, food service, and pool and spa products. Clients also include global retailers, telecom providers, utilities, social housing, facilities management, direct mail/digital messaging, and information/media measurement, in addition to fire and security and managed print services.

As a result of building the platform to contain all of the necessary tools, a customer can now turn to ServicePower to manage the complete lifecycle of a job, using a variety of field resources, from optimised scheduling and 3rd party dispatch, to mobile status updates, job based parts management, signature capture, GPS tracking, 3rd party claim payments and analytics.

2014 saw ServicePower continue its focus on going back to basics to rebuild its brand awareness in its core product lines, utilising the strength of its products and customer relationships, as well as driving product investments that position the company more strongly against the competition.

Our platform, as the leading wholly configurable optimisation technology, has been developed over 20 years by field service experts and is unique in the industry. The patented Simulated Annealing technology and proprietary travel matrix engine provides field service organisations with a fully mobilised scheduling and dispatch solution which can be used to route and dispatch employed, contracted 3rd party or on demand field resources, based on robust rules based logic that enables clients to mix resources to achieve productivity, cost, margin, and customer service objectives. It intelligently schedules the best technicians for the best job, with the right parts to get the job completed the first time. It also provides robust logic to manage SLA (service level agreement) work and complex jobs that other competitive rules based products cannot deliver.

Our M2M/Internet of Things ("IoT") connected services technology, a partnership with global device or other product manufacturers and a leading M2M technology provider enables proactive automation of field based events and tie in with our Smart Services business and parts logic in order to provide far superior results for customers compared to competitors which simply monitor GPS devices.

ServiceScheduling

ServiceScheduling had increased interest in 2014 with the release of version nine of the software, a 100% renewal rate of customers (including transitioning many customers to an auto renewal relationship), and the addition of some new customers. The average longevity of ServiceScheduling customer relationships and the average number of technicians/jobs scheduled each day are industry leading. ServicePower continues to expand the reach and functionality of its Scheduling product defending its position as the leading wholly configurable optimisation technology in the field service marketplace. Increased momentum is being seen going into 2015, and there were two global deals won in 2014 for Scheduling on a SaaS basis that will be implemented in 2015.

ServiceOperations

ServiceOperations had a good year in terms of commercializing new client wins and building transactional volume. Key US customers include Electrolux, General Electric, Global Warranty Group, AIG Warranty, Bosch, Square Trade, Brandsmart, Haier America, and many others. Key clients in the UK include Richer Sounds, John Lewis and others. A key new implementation in 2014 was with Electrolux Home Appliances now covering the entire product platform.

The Market

The field service industry is one which is rapidly evolving. Increased competition in service, changing customer dynamics and reduced margins are driving field service organisations toward technology which can be used to improve their competitive edge, increase productivity and efficiency, as well as improve customer service through frequent communications via consumer centric channels like email, mobile 'apps' and social media. These, alongside new technologies like social, mobile, cloud, analytics and IoT are revolutionizing field service. Customers also expect scheduled appointments to eliminate wasted time, and technicians are prepared and knowledgeable enough to complete the job on the first visit.

Smart appliances and connected services or machine to machine technology are driving even more change as field service organisations strive to proactively address repair and maintenance issues, in an effort to reduce costs and improve margin, while anticipating outages and improving customer service.

ServicePower, the acknowledged leader in wholly configurable optimisation technology, provides a global, fully mobilized field service management software platform used by clients to improve productivity and efficiency, intelligently schedule appointments, SLA and complex jobs, as well as parts. It automates and enables proactive response to issues detected through connected devices. Our field service platform also enables clients to fully mobilise their field resources through a cutting edge mobile application, which we are working to expand into an SMB fully functional cloud product. Features such as invoicing and payment capture have already been launched in early 2015.

Clients may also manage, dispatch and pay 3rd party service providers, seamlessly mixing a variety of labour sources to achieve organisational metrics such as cost and margin, while managing seasonal demand spike and meeting customer response time expectations.

Completing our platform, business intelligence provides clients with the ability to monitor, analyse and adjust its processes based on data collected from across the field service organisation. As part of our SmartServices offering we are seeking to provide customers with more consulting services around the analysis and recommendations of our business intelligence product.

Strategic alliances

In recent months we have renewed our focus on strategic partnerships and alliances, extending our market reach and product suite capabilities. Interest in reseller and strategic partnerships has grown in early 2015 following the release of the Visionary ranking for ServicePower within the Gartner Magic Quadrant for Field Service Management.

The Company is also building stronger partnerships with system integrators to leverage their abilities both in terms of client referrals and implementation support to facilitate increased growth rates anticipated in the ServiceScheduling and ServiceMobility segment especially.

Growth Strategy

ServicePower has entered 2015 continuing to drive its strategy for growth, based around four key areas of focus. These are:

1) Growth of ServiceScheduling and mobility licence sales through cross-selling, direct sales and channel relationships

ServiceScheduling is the foundation of the ServicePower platform. We are acknowledged by customers and analysts as one of the best in the world at scheduling with our multi-layer, cost versus rules based optimisation, having invested 20 years of development into the software. Our ability to deliver a truly enterprise level solution, as evidenced by our long standing global tier 1 customer base, is a strong foundation upon which to grow. We believe opportunities for licence growth exist across both our core and additional industry verticals, in many geographies. Demand is growing for our ServiceScheduling and Mobility products from existing clients, new clients and through channel partners that see the fit for their business and/or product lines. Brand awareness is building around the technological benefits of the dual optimisation and cost-based optimisation versus the standard rules based optimisation of many of the competitors. The mobility product likewise is unique in its field service application layer, ability to sync across multiple devices, and the flexibility of its implementation model.

2) Growth of ServiceOperations through adding new clients, launching new products with existing clients and growing SaaS revenue

ServiceOperations is experiencing a steady growth in interest in the marketplace. Being an independent provider of a truly multi-tenant SaaS platform is valued and the Company is winning business from competitors, especially with the dispatch functionality for the management of work to be performed by contractors. Our full service outsourcing business is providing attractive options for customers seeking a professionally managed network for either supplementary or fully outsourced service network recruitment and management.

3) Technology integration and development

The Company's focus is on technology, solving today's field service challenges, and investing in the future of both the multi-channel labour model and parts. Efforts are underway to continue the integration of the new products with the new functionality being released. In addition the Company is transitioning the core products to a unified platform and a common technology stack, whilst transitioning more infrastructure to the cloud.

4) International expansion and reach into new verticals

We have entered the new year with a more mature pipeline of opportunities in our core geographies. A number of global deals are being implemented over the next 24 months, and additional leads are being generated in new geographies. In order to support these opportunities, additional language capabilities and functionality (like latitude-longitude travel matrices) were added to the Scheduling platform in 2014 with further languages and capabilities being implemented in 2015 and 2016 in order to support the global roll-out. Likewise, additional feature functions are being added in to the Scheduling product; these are being driven by both our existing customers and prospects with which we are in discussion. ServiceMobility is now Unicode and fully cloud, ready for international deployment. Efforts in 2015 will drive further improvement in the ServiceOperations application to support customer needs beyond North America and the United Kingdom.

We are seeing additional opportunities in new verticals, such as unregulated utilities, telecoms, facilities management, retail and the manufacturing industries, which have similar drivers to our core verticals.

Board Changes

In March 2014, Lindsay Bury stepped down as Chairman remaining on the Board of Directors and Hugh Fitzwilliam-Lay was appointed as Chairman. In June 2014, Tajinder Sandhu was appointed to the Board as Chief Financial Officer

Outlook

With demonstrated ability to win new customers and the validation by Gartner of the investment in strategic innovation and development of our global field management platform, ServicePower is positioned for a strong performance in 2015 and beyond. Our growing, prestigious client base, including some of the best known brands in the world, is proof of our commitment to providing the best, most complete, and technologically advanced field management tool in the world. Trading in 2015 has begun positively, and we are confident of a successful outcome to the year.

ServicePower Technologies Plc

Strategic Report

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Principal activities, trading review and future developments

The principal activity of the Group is the sale, hosting and implementation of field service management software, outsourcing and management of dispatch, claims and warranty processing, and the sale of GPS and mobility products.

Operations: ServicePower's focus is on providing technology solutions, services, and industry expertise globally to allow service businesses to operate with maximum efficiency. The Group's solutions and services enable our customers to address the three key service delivery challenges: i) offer a higher quality of service, ii) reduce the cost of service delivery, and iii) grow revenue and profitability. The Group's head office is based in McLean, VA, with offices in Stockport, United Kingdom and Santa Ana, CA in the USA. The Group has three subsidiaries, ServicePower Business Solutions Limited in the UK, ServicePower Inc and Service Network LLC in the USA.

Markets: The market for the Group's technology solutions and services is global, with most of its existing sales to companies throughout North America and the UK. Customers interested in the Group's solutions and services are those that employ in-house service engineers, or utilise a network of independent service contractors to respond to a request for service. These companies vary in size from large corporations with their own service engineers to small independent organisations with less than five technicians. ServicePower's enterprise optimisation software, ServiceScheduling, is targeted at those organisations which employ the greatest numbers and the ServiceOperations software is targeted at companies that manage service delivery through independent service companies. As part of the Group's total service product offering, our clients can, and sometimes do, outsource part or all of their service delivery operations. This service is delivered throughout North America, the United Kingdom and parts of Europe. In the future, the Group anticipates broadening its geographical reach.

Sales and marketing: In 2014, 66% (2013: 35%) of Group turnover (£8.4 million) was generated in North America (2013: £4.8 million). The Group continues to capitalise on the hundreds of man years of development already invested in its products. 2014 saw further investment which brought a number of new products into the fold through internal developing and acquisition of source code. Clients continue to upgrade to the latest version 9 of Scheduling. In 2014, 54% of revenue was generated from ServiceScheduling and 46% from ServiceOperations, (2013: 54% and 46%, respectively) the change in percentage from the prior year being due to the change in product mix during the year. Further development includes the development of a unified platform, the maturation of ServiceBroker and migration of clients to more hosted and cloud-based solutions.

Research and development: To maintain the Group's leading edge software-based solutions, £1.1 million (2013: £1.0 million) in research and development costs were incurred in the year; of which £0.7 million was capitalised (2013: £0.6 million) The Group has research and development centres in North America and the United Kingdom that employed an average of 26 staff (2013:23), through which the Group develops its own intellectual property. In addition, to meet the demand for further customer enhancements, the Group has both acquired intellectual property such as the Mobility product and has brought its Quality Assurance activities back internally rather than it being outsourced to an offshore company. Development costs capitalised in 2014 relate to final development of the acquired Mobility software as well as integrating the product into the existing suite of products, as well as the development of the Group's Scheduling and Broker software.

Contract values: Customers can either i) buy a one-time perpetual licence for ServiceScheduling with an annual fee for support and maintenance and new releases or ii) pay for the use of the licence and maintenance on a hosted or SaaS basis. This latter type of contract is variable in size and can range in value and term, depending upon the nature of the contract. Revenue from ServiceOperations is typically earned from a cost per transaction approach.

Key performance indicators (KPIs)

ServicePower operates in a complex and specialised field using a business model of a software sales company; the primary objective is to sell software licenses or hosted solutions using its software. In ServiceOperations, the goal is to maximise the number of transactions through the software. The KPIs of the Group have been identified as follows.

Revenue and deferred and accrued income: In the year, invoiced sales for the Group were £12.8 million (2013: £14.3 million). £12.7 million was recognised as revenue (2013: £14.0 million) and held in the balance sheet was deferred income of £2.7 million (2013: £2.6 million) and accrued income of £0.2 million (2013: £0.2 million). This provides an indication of the value of support and maintenance contracts that have been invoiced and paid, but not yet completed, and the value of transactional jobs completed but yet to be invoiced.

A breakdown of revenue from the ServiceScheduling segment is as follows including the reporting of the pass-through revenue related to the prime contract:

A breakdown of revenue from the ServiceOperations segment is as follows:

Monthly recurring revenue: ServicePower has many ServiceScheduling maintenance contracts that are renewable annually and provide regular monthly revenue. Recurring revenue also comes from ServiceOperations clients, provided they continue to renew and previous transaction volumes can be relied upon to continue into the future. The renewal rate of the Group's customers remains stable and high.

Gross margins and profit before tax: The outcomes of both gross margin and profit before tax is dependent upon sales volume and the mix of the business. The gross profit was £6.0 million in 2014 (2013: £6.6 million). The Group had a loss before tax of £1.0 million in 2014 (2013: profit before tax of £0.05 million).

Operating cash flow: ServicePower usually charges a percentage of the ServiceScheduling licence fee upon contract signature and the support and maintenance fees are invoiced annually in advance. This assists the Group with working capital requirements given that a significant proportion of costs are fixed employee-related costs. Trade debtors and other receivables at the end of the financial year were £2.5 million (2013: £3.4 million). Debtor days for the Group represented 39 days of invoiced sales compared to 68 days at the end of 2013. The trade and other creditors and accruals at the end of the financial year were £1.3 million (2013: £1.1 million) representing 67 creditor days (55 days in 2013). Cash inflow from operations for the year was £0.8 million (2013: outflow £1.4 million).

Cash at bank: The Board pays particular attention to the cash at bank and cash movements and regularly reviews cash forecasts to ensure the financial commitments of the Group are met. ServicePower closed the financial year with cash at bank, including short term deposits, of £2.7 million (2013: £2.7 million).

Employee recruitment and retention: The Group increased its average headcount in the year by 6 to 104 employees (2013: 98), primarily as a result of organic growth. ServicePower operates in a knowledge-based industry and requires a highly skilled workforce, particularly within the development teams. Consequently to maintain skill levels, flexibility and an ability to respond to market and client demands promptly, ServicePower has developed a partnership with an offshore development company, although the decision has been made to transition quality assurance activities back to the Company.

Commercial risks and uncertainties

The key commercial risks and uncertainties facing the Group are as follows:

Recruitment, retention and training of employees: ServicePower operates in a knowledge-based industry and recognises the importance of the recruitment and retention of its highly skilled workforce.

Reference customers: The Group sells on the basis of adding value to the customer. A significant amount of the sales success is dependent upon the continued goodwill of existing customers to host reference visits by potential customers. This involves presentations by senior staff to demonstrate the value of the offering, the non-financial benefits and a demonstration of the software operating in real time.

Customer procurement timescales: The Group sells to global organisations which may have lengthy procurement processes, occasionally stretching over a considerable number of months. The procurement may go through several budgeting cycles, require board approval, face competition from other non IT-related projects and key decision makers may move on. For these reasons, it is difficult to forecast securing individual contracts, and it is almost impossible to predict the precise timing of the signing of contracts.

Unpredictable cash flow: To date, a significant portion of cash receipts have come from the sale of large software licences. The signing of contracts by large corporate customers is very difficult to predict due to long procurement cycles. Consequently, the Group has sought to reduce the impact of such sales by focusing the revenue streams towards a transactional and SaaS approach and developing other means of managing the cash outflows, including identifying cost saving measures.

Exchange rate fluctuations: The Group has significant operations in North America and as such is exposed to movements in the US Dollar/Sterling exchange rate. This risk has historically been alleviated somewhat by the stability of the currencies and matching revenues and costs in the two currencies.

Technological advancement: The Group operates in markets where technical development of the products can be fast-paced. This is particularly relevant as regards the use of new cloud technology, and consequently the Group will continue to develop its products so they can interface with the latest technology and, if suitable, acquire selective companies that would facilitate this further.

Competition: The Group keeps up to date on the business activities of all existing major competitors in its markets as well as identifying new entrants who may potentially gain a foothold in the market. The Group ensures its pricing structure is competitive when faced with competition for new business and has an account management programme in place to ensure existing business is protected from competitors.

Capital structure

Details of the issued share capital, together with the details of the movements in the Company's issued share capital during the year are shown in note 16. The Company has one class of shares. The ordinary shares carry no right to fixed income and each share carries the right to vote at general meetings of the Company. The Company also has convertible loan notes with a carrying value at the year end of £1.0 million (2013: £0.9 million) as shown in note 8.

There are no specific restrictions on the size of a holding nor on the transfer of shares, which are both governed by the Articles of Association and prevailing legislation. The directors are not aware of any agreements between holders of the Company's shares that may result in restrictions on the transfer of securities or voting rights.

No person has any special rights of control over the Company's share capital and all issued shares are fully paid.

With regard to the appointment and replacement of directors, the Company is governed by its Articles of Association, the Companies Act and related legislation. The Articles themselves may be amended by special resolution of the shareholders. The powers of directors are described in the Main Board Terms of Reference, copies of which are available on request.

Under its Articles of Association, the Company has authority to issue ordinary shares.

There is an agreement should the Company be taken over by a purchase of its shares that all existing employee share options would vest immediately. This is not considered to be significant in terms of likely impact on the business of the Group as a whole. Furthermore, the directors are not aware of any agreements between the Company and its directors or employees that provide compensation for loss of office or employment that occurs because of a takeover bid other than the normal severance provisions included by contract with a given employee in the case of termination.

ServicePower Technologies Plc

All amounts relate to continuing activities.

ServicePower Technologies Plc

ServicePower Technologies Plc

ServicePower Technologies Plc

ServicePower Technologies Plc

ServicePower Technologies Plc

Financial information for the year ended 31 December 2014

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1 General information

The financial information included in this preliminary announcement has been extracted from the audited annual financial statements of the group for the years ended 31 December 2014 and 2013. Those financial statements have been prepared in accordance with IFRS as adopted by the European Union.

While the financial information included in this preliminary announcement has been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards (IFRSs), this announcement does not itself contain sufficient information to comply with IFRSs. The group expects to publish full financial statements to comply with IFRSs in March 2014.

Going concern

A significant portion of cash receipts comes from the sale of large software licences. The signing of contracts by large corporate customers can be difficult to predict due to long procurement cycles and therefore there is uncertainty in forecasting the timing and quantum of cash receipts from these customers, which ultimately led to the loss incurred in the current year.

At 31 December 2014 the Group had net assets of £2.4 million including £2.7 million of cash and cash equivalents (31 December 2013: net assets of £3.2 million including £2.7 million of cash and cash equivalents).

In determining whether the Group's accounts can be prepared on the going concern basis, the directors considered the Group's business activities together with factors likely to affect its future development, performance and its financial position including cash flows, liquidity position and the principal risks and uncertainties relating to its business activities. In performing these reviews, the directors have taken account of reasonably foreseeable downside scenarios and appropriate mitigating actions in the event of such scenarios, which show that the Group should still be able to cover its costs should these circumstances arise.

Based on cash flow forecasts which take into account the directors' best estimate of current sales orders and opportunities, expenditure forecasts as well as the Group's current cash balance, the directors consider it appropriate to prepare the Group's financial statements on the going concern basis.

2 Revenue

An analysis of the Group's revenue is as follows:

3 Business segments

Segment information reported externally is analysed on the basis of the Group's business streams, namely ServiceScheduling software licences, which provide scheduling solutions, and ServiceOperations, which provides claims and despatch processing in the consumer electronics market.

Segment information about these businesses is presented below:

3 Business segments (continued)

Segment profit represent the profit earned by each segment without allocation of central administration costs, including directors' salaries, investment revenue and finance costs and income tax expense. This is the measure reported to the Group's Chief Executive for the purpose of resource allocation and assessment of segment performance.

Segment assets

For the purposes of monitoring segment performance and allocating resources between segments the Group's Chief Executive monitors the tangible, intangible and financial assets attributable to each segment. All assets are allocated to reportable segments with the exception of cash and cash equivalents and trade and other receivables of the parent company.

3 Business segments (continued)

Other segment information

The Group's revenues from its major products and services were as follows:

Geographical information

The Group's operations are located in the United States of America, the United Kingdom and the rest of Europe. The Group's revenue from external customers and information about its segment assets by geographical location are detailed below irrespective of the origin of the services:

Information about major customers

In 2014, included in revenues arising from ServiceScheduling were revenues of approximately £1.1 million from one customer, which represented 9% of Group revenue. In 2013 this customer contributed revenues of £1.6 million, which was 11% of Group revenue.

Included in revenues arising from ServiceOperations are revenues of approximately of £1.0 million (2013: £1.0 million), which arose from sales to a customer whose turnover represents 8% of Group revenue.

4 (Loss)/profit before taxation

(Loss)/profit before taxation has been arrived at after charging/(crediting):

Amounts payable to Deloitte LLP and their associates by the Group in respect of non-audit services were £9,000 (2013: £70,000).

5 Taxation

Corporation tax is calculated at 21.5% (2013: 23.25%) of the estimated assessable loss/profit for the year.

The credit for the year can be reconciled to the loss per the income statement as follows:

Subject to agreement with HMRC, the Group has taxable losses of approximately £16.9 million (2013: £16.7 million), which are available for offset against future trading profits. No deferred tax asset has been recognised on the basis of the uncertainty of the timing of new licence contracts, particularly given the long procurement processes for new licence agreements. In the opinion of the directors there is not sufficient evidence that the asset would be recoverable in the foreseeable future.

6 (Loss)/earnings per share

The calculation of the basic and diluted (loss)/earnings per share is based on the following data:

(Loss)/earnings

Number of shares

(Loss)/earnings per share

The convertible loan note and the share warrant issued in 2012 (which expired in 2013) have an anti-dilutive effect and therefore diluted (loss)/earnings per share are capped at basic (loss)/earnings per share.

7 Financial assets

Trade and other receivables

7 Financial assets (continued)

Included within other receivables is a performance bond with a customer for £26,746 (2013: £26,731). Of the trade receivables balance at the end of the year, £187,862 (2013: £246,063) is due from one of the Group's largest customers. There are 3 other customers who represent more than 30 per cent of the total balance of trade receivables.

Included in the Group's trade receivable balance are debtors with a carrying amount of £572,068 (2013: £1,175,170) which are past due but not impaired at the reporting date. In the year the Group has credited £44,000 against debtors with receivable amounts outstanding over 90 days and utilised a prior year provision of £24,000. The Group regards all other amounts as recoverable as there has not been a significant change in credit quality. The Group does not hold any collateral over any of these balances. On average past due receivables are 9 days overdue (2013: 28 days).

Ageing of past due but not impaired receivables

Movement in the allowance for doubtful debts

The allowance for doubtful receivables relates to balances which are all past due by greater than 90 days. In determining the recoverability of a trade receivable the Group considers any change in the credit quality of the receivable from the date credit was initially granted up to the reporting date. The directors consider that the carrying amount of trade and other receivables is approximately equal to fair value.

Bank balances and cash comprise cash held by the Group, short-term bank deposits with an original maturity of three months or less and letters of credit issued to third parties as guarantees of £66,739 (2013: £61,067). The carrying amount of these assets approximates their fair value.

Credit risk

The Group's principal financial assets are bank balances, cash and trade and other receivables.

8 Financial liabilities

Trade and other payables

Trade creditors and accruals principally comprise amounts outstanding for trade purchases and ongoing costs. The average credit period taken for trade purchases is 60 days (2013: 55 days).

The directors consider that the carrying amount of trade payables approximates to their fair value.

In 2008 the convertible loan notes were issued giving the investors the right to convert the loan note at the lower of 5 pence a share or the price paid for the new shares issued in the fundraising. The loan note would incur interest at 8%, which would compound every six months and roll up into the value of the note. The accounting treatment for the convertible loan notes is prescribed in IAS 39. The Company did not elect to use the fair value option for this instrument on initial recognition.

In 2014 accrued interest using the effective interest rate was £167,000 (2013: £167,000) and was expensed in the income statement.

9 Notes to the cash flow statement

The 2013 cash flow statement has been restated to present separately the cash outflow in relation to capitalised research and development expenditure that had been included within the net cash outflow from operating activities.

10. Non-statutory information

The financial information set out above does not constitute the Company's statutory accounts for the years ended 31 December 2014, 2013 or 2012, but is derived from those accounts. Statutory accounts for 2013 have been delivered to the Registrar of Companies and those for 2014 will be delivered following the Company's annual general meeting. The auditors have reported on those accounts; their reports were unqualified, did not draw attention to any matters by way of emphasis and did not contain statements under s498 (2) or (3) Companies Act 2006.