Half-year Report

RapidCloud International Plc

("RapidCloud", the "Company" or the "Group")

Half Yearly Report

RapidCloud International plc (AIM:RCI), the computing services, web-hosting and web-solutions provider based in Southeast Asia, announces its results for the six months ended 30 June 2016.

Financial highlights

· Revenue of RM 7.5m (H1 2015: RM 7.8m)

o Recurring revenue now 52% of total revenues (H1 2015: 43%)

· Gross Profit increased 7% to RM4.8m (H1 2015: RM4.4m)

o Gross profit margin of 64% (H1 2015: 57%)

· Operating Profit flat at RM0.6m (H1 2015: RM 0.6m)

· Net cash as of 30 June 2016 of RM3.3m (31 Dec 2015: RM 6.8m)

o Net trade receivables RM13.5m (31 Dec 2015: RM13.8m)

Operational highlights

· Launched SalesMAP, a Sales Management, Automation & Productivity tool for businesses

· Launched Ximplify, an enterprise grade messaging and collaboration system

· Appointment of Symphonet Malaysia and Interlink Thailand as strategic partners

· E-commerce contract win for Wellmart Online Sdn Bhd, a subsidiary of Delloyd Ventures Group

· Strategic Partnership with AliCloud for South East Asia

Post period-end highlights

· Appointment as a channel sales partner for Alibaba.com across Malaysia

· API Gateway contract win for Sime Darby Global Services Centre Sdn Bhd, a subsidiary of Sime Darby Group

Raymond Chee, Chief Executive of RapidCloud, said: "The financial results for the six-month period reflected the downturn in our end markets witnessed at the end of 2015. Furthermore, we no longer expect sequential revenue growth in the second half of the current year and now believe the full year results for the 12 months to December 2016 will be similar to last year, which is below current market expectations.

"Notwithstanding the difficult trading environment, I am pleased with the operational progress the Company has made during the six months to 30 June 2016. During the period, the Company has developed new products, launched several high value enterprise grade software packages and signed significant strategic agreements with distributors and Alibaba, one of the world's largest e-commerce organisations.

"As a result of the operational progress, I believe the Company is now in a much stronger position that it has historically and whilst I do not expect sales at accelerate during the remainder of the current year, I remain confident that the Company is well placed to benefit from any upturn in its end markets in 2017 and beyond"

Enquiries

About RapidCloud

RapidCloud, provides computing services, web-hosting and proprietary web-solutions, such as web-site building and e-commerce solutions. The Company is based in Southeast Asia and is one of the few solutions providers in the region to deliver its offerings through all three available Cloud Computing segments, i.e. Software-as-a-Service, Infrastructure-as-a-Service and Platform-as-a-Service.

Formed in 1999 the Company has a well-established cloud offering with a customer base of over 43,000. These are predominantly SMEs but also include blue-chip clients such as Deloitte, BAE Systems and Canon, for which RapidCloud's extensive R&D department creates bespoke software solutions.

RapidCloud currently has operations in Malaysia, Indonesia, Singapore, Thailand and the Philippines. According to industry research commissioned by RapidCloud from Frost & Sullivan in 2013, the Cloud Computing industry in Asia Pacific is expected to grow at a CAGR of 49.6% between 2013 and 2015, giving a market size of US45.6 billion by 2015. RapidCloud International plc was admitted to AIM on 14 August 2013. For further information, please visit www.rapidcloudasia.com

CHAIRMAN'S REVIEW

Our strategy in the first half of 2016 was to continue investing in the Company's products and services to expand the scale and geographic coverage of the business. To achieve this rapidly and with minimum expense, the Company chose to engage with channel partners such as Alibaba and Celcom to achieve that goal during the year to date.

Although market conditions continue to be difficult, we have maintained our footprint and customer base, in addition to continuing to developing our core product suite including Sales Automation Tools, enterprise email, corporate site-builders and enterprise e-commerce systems, which can be customised by our extensive SME customer base.

Since IPO, having completed a three-year term as chairman I have decided that with the publishing of these results, now is right time for a new Chairman to take the Company onto its next phase. Conversations are underway to identify my replacement and in the meantime Mr. Brian Wong, Audit Committee Chairman will become Interim non-executive Chairman. As a partner with PKF Malaysia as well as a non-executive director of two other publicly quoted companies, I am sure he will provide a seamless transition to the full-time Chairman.

I would like to thank all of our employees and shareholders for their continued support and contribution during the period under review and I wish the company every success in the second half of 2016 and in the coming years.

CHEIF EXECUTIVE'S REVIEW

Financial Performance

Revenue for the six-month period to 30 June 2016 was RM7,512k, which generated a gross profit of RM4,772k. The improvement of gross margin, from 57% to 64%, was a direct result of an improved sales mix and higher price points of some of the new software products being offered by the Company.

Other operating income increased to RM192k from RM97k.

Administrative expenses increased 11% to RM4,354k from RM3,936k as the Company invested in product development and sales support to increase coverage in terms of capabilities and geographical reach.

Operating profit and profit before tax therefore remained largely flat year on year at RM610k and RM598k respectively. Income tax increased to RM70k from RM21k as the company moved to a more normal tax environment post IPO.

However, profit attributable to ordinary shareholders, decreased to RM602k from RM767k which decreased basic and diluted earnings per share to 2.72sen (1H15: 4.11) and 2.64 (1H15: 3.97) respectively as the weighted average number of shares increased from 18,656,752 to 22,149,086 as a result of the equity placing in the previous year.

Cash outflow from operations for the half year in 2016 was RM1,569k, versus a cash inflow for the respective period in 2015 of RM904k, primarily due to the increase in receivables and payables as trading activity increased towards the period end.

Purchase of property, plant and equipment remained steady at RM1,070k (1H15: RM847k) as the company invested in infrastructure to service larger clients secured post the balance sheet date and software expenditure fell marginally to RM409k (1H15: RM510k) as certain software development programmes came to a close.

Cash and cash equivalents as of 30 June 2016 was RM3,325k, down from RM6,794k as of 31 December 2015.

Operational Review

During the six-month period to 30 June 2016, the Company launched a Disaster Recovery as a Service ("DRaaS") solution, appointed distributors in Thailand & Malaysia in addition to announcing a contract win worth approximately RM550,000 and, perhaps most importantly, signed a major strategic partnership with AliCloud for South East Asia.

DRaaS Service

DRaaS is a cloud delivered disaster recovery managed service for protecting companies from loss of mission critical data in the event of a man-made or natural disaster. It is designed to ensure business continuity by minimising downtime and disruption in the event of server failure or other disaster.

Strategic Distribution Partnerships

RapidCloud has also successfully signed two strategic partnerships with Symphonet Sdn Bhd ("Symphonet") in Malaysia and Interlink Communication PCL ("Interlink") in Thailand to market its new disaster recovery as a service managed services.

Symphonet is a Malaysian fibre optic network operator offering dedicated high speed data Internet connections, wireless, Ethernet, leased lines, IP CCTV solutions, network services and network security services to over 1,000 businesses, large corporations and commercial buildings in Malaysia.

Interlink is one of the largest fibre optic backbone providers in Thailand. It is publicly traded on the mainboard of the Stock Exchange of Thailand (SET). Interlink is engaged in implementation of high speed structured telecommunication networks and distribution of networking solutions. Riding on the advanced fibre-optic technology, enterprise customers and service providers are able to benefit from Interlink's leading-edge fibre optical network nationwide.

Both strategic partnerships allow Symphonet and Interlink to offer its customers a selection of RapidCloud's enterprise applications, beginning with DRaaS packaged together with their fibre connectivity, to provide a seamless and reliable high-speed transfer of critical data between the customer's primary server and RapidCloud's DRaaS facility.

Contract Win Worth RM550,000

During the period, the Company announced a contract win with Wellmart Online Sdn Bhd ("Wellmart"), a subsidiary of the automotive & plantation conglomerate Delloyd Ventures Group, for the Company's e-commerce portal system development tools and consulting services. The contract is expected to generate revenue of approximately RM550,000 in its first year of operation.

Wellmart is a multichannel e-commerce marketplace providing one-stop online shopping solution for specialised automotive parts targeting the Association of Southeast Asian Nations ("ASEAN") market. The solution will be built on the RapidCloud PortalWEB platform, supported by its responsive web and mobile app (iOS & Android) user interface, to provide customers with an effortless shopping experience and retailers with simple and direct access. By leveraging the RapidCloud partner eco-system, Wellmart is able to integrate this platform with its logistics partner to automate the operational processes.

RapidCloud will also be providing its comprehensive ecommerce consulting services to Wellmart from Infrastructure to platform, to user experience and go-to-market strategies leveraging on its digital and social media marketing capability.

Major Strategic Partnership with AliCloud for South East Asia

In March 2016, the Company announced its wholly owned subsidiary, RapidCloud (M) Sdn. Bhd., had signed a strategic partnership and distributorship with Alibaba.com Singapore E-commerce Private Limited ("AliCloud"), the international business and cloud computing arm of the Alibaba Group (NYSE:BABA).

Alibaba Cloud Computing, otherwise known as AliCloud, is one of the world's largest e-commerce companies, and was established in 2009 to operate the network that powers Alibaba's extensive online and mobile commerce ecosystem with a comprehensive suite of cloud computing services globally. AliCloud develops highly scalable cloud computing and data management services for over 1,800,000 customers worldwide, providing both large and small international businesses, financial institutions, governments and other organizations with flexible, cost-effective solutions for networking and IT needs.

The partnership will allow RapidCloud to offer AliCloud's public cloud infrastructure, consulting, managed services, training and support across its offices in South East Asia. RapidCloud will also be making its key products available from AliCloud platform as a total service offering to its customers. After six months of research and development, RapidCloud's key products such as its enterprise content management system, sales automation tool and document management have already been developed to be tightly integrated onto AliCloud platform. This will allow Alibaba and AliCloud users to be able to subscribe to such services easily.

The benefits of having RapidCloud's products on AliCloud platform include better reliability, faster access from various locations, including China and better scalability. At the same time, RapidCloud will also be working together with AliCloud and its parent company Alibaba to implement various go to market strategies and cross-selling opportunities.

Post Period End

In July 2016, the Company was selected by Sime Darby Global Services Centre Sdn. Bhd. ("Sime Darby"), a subsidiary of Malaysian conglomerate Sime Darby Group, for the integration between the IFCA Enterprise Resource Planning ("ERP") System and ReadSoft Process Director Business Automation tool worth approximately RM200,000.

The project, which involves the deployment of an integrated API Gateway Middleware developed by the Company, will allow Sime Darby Global Services Centre to deliver cost efficiencies and embedded controls that, in turn, enhance the service effectiveness by reducing the complexity of its system management and increasing agility with improving access to information.

RapidAPI gateway achieves this by streamlining the management and operation of applications whilst, at the same time, enhancing security and regulatory compliance. The solution is ideal for organisations that are exposed to management and security challenges, such as Governments, Telcos, Internet Service Providers and large-scale enterprises, given the existence of the large and diverse number of applications running within their network.

In August 2016, the Company was appointed by Alibaba.com, a global B2B platform of Alibaba Group, as an authorised Gold Supplier membership channel sales partner for Malaysia.

This appointment will enable RapidCloud to help Alibaba.com enroll Malaysian SMEs into its Gold Supplier membership, offering Alibaba.com's Malaysian Gold Supplier members, typically exporters, traders, retailers and manufacturers, certain value-added services via the international business-to-business platform operated by Alibaba.com. In addition, RapidCloud will be able to up-sell its existing software suite including digital marketing, e-commerce and sales automation tools, e-mail and cloud services as well as provide local support and training services to both existing and prospective Alibaba.com Malaysian Gold Supplier members.

This agreement, which is complementary to the partnership with Alibaba Cloud (the cloud computing arm of Alibaba Group) announced on 8 March 2016, positions RapidCloud well to sell both Alibaba tools and services and its own proprietary software to Alibaba.com Gold Supplier members to enable them to rapidly expand the volume of transactions they complete, thereby adding significant value to those enterprises.

RapidCloud will initially deploy at least 30 of its existing sales people to capture this market opportunity over the first six months of the agreement, which will expand to at least 40 sales people within the first year of the agreement.

I would like to take this opportunity to thank, David, non-executive Chairman, for his guidance, support and expertise for the past three years since IPO and wish him well for the future. The Company now begins its search for a new Chairman to take the Company onto its next phase. Conversations are underway to identify David's replacement. In the meantime, I welcome Mr. Brian Wong, Audit Committee Chairman, who will become Interim non-executive Chairman.

Outlook

We expect the challenging trading environment experienced in the first half to continue through the remainder of the current financial year. We therefore expect the financial results for the 12 months to December 2016 will now be similar to last year, which is below current market expectations.

However, the Company will continue to invest in its own corporate development to expand the number of products, services and territories it currently targets.

Furthermore, with strategic distributors and partners now in place, the business is now on a much sounder footing than ever before and is well placed to benefit from any upturn in its end markets.

Consolidated Interim Statement of Comprehensive Income

for the six months ended 30 June 2016

Consolidated Interim Statement of Financial Position

as at 30 June 2016

Consolidated Interim Statement of Cash Flow

six months ended 30 June 2016

Consolidated Interim Statement of Cash Flow (continued)

six months ended 30 June 2016

Consolidated Interim Statement of Changes in Equity

six months ended 30 June 2016

Notes to the Financial Information

six months ended 30 June 2016

1. Accounting policies

This consolidated interim financial information, which is unaudited for the half-year ended 30 June 2016, has been prepared on a consistent basis in accordance with the International Financial Reporting Standards ('IFRS') as adopted by the European Union ('EU') issued by the International Accounting Standards Board ('IASB').

They do not contain all of the information required for the full financial statements and should be read in conjunction with the consolidated financial statements of the Group as at and for the year ended 31 December 2015. These interim financial statements do not constitute statutory accounts within the meaning of the Companies Act.

This consolidated interim financial information has been prepared in accordance with AIM Rules for Companies and IAS 34 'Interim Financial Reporting' and is presented in Malaysia Ringgit ('RM') which is the currency of the primary economic environment in which the Group operates. The functional currency for each individual entity is the local currency of that individual entity. All amounts are prepared to the nearest thousand (RM'000) except where otherwise indicated.

RapidCloud International plc ('RCI' or the 'Company') is a company registered and incorporated in Jersey on 15 March 2013. The address of the registered office is 13-14 Esplanade, St. Helier, Jersey, JE1 1BD.

2. Operating segments

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses. IFRS 8 'Operating Segments' requires disclosure of the operating segments that are reported to the Chief Operating Decision Maker ('CODM'). The CODM at the end of the financial period under review is the Board of Directors, who have responsibility for planning and controlling the activities of the Group. The Group's reportable segment has been identified as the provision of Cloud Computing services. Across the Group there is considered to be a commonality in the nature of services, the type of customer, the methods used to provide services and the regulatory environment.

All operations of the Group are carried out in South East Asia. All revenues therefore arise within South East Asia. No single external customer amounts to 10 per cent or more of the Group's revenues.

As the Group only has one reportable segment, no further segmental information is disclosed.

3. Earnings per share

The calculation of the basic and diluted earnings per share is based on the following:

If the basic earnings per share is diluted by the 650,000 deferred contingent shares to be issued as part of the acquisition of RapidCloud Singapore Pte. Ltd., the dilutive earnings per share would be 2.64 Sen (31 December 2015: 4.07 Sen; 30 June 2015: 3.97 Sen).

Notes to the Financial Information (continued)

six months ended 30 June 2016

4. Property, plant and equipment

Included within property, plant and equipment are motor vehicles acquired under hire purchase agreements with carrying values of RM731,000 (2015: 781,000)

4. Property, plant and equipment (continued)

Included within property, plant and equipment are motor vehicles acquired under hire purchase agreements with carrying values of RM639,000 (2014: 461,000)

4. Property, plant and equipment (continued)

Included within property, plant and equipment are motor vehicles acquired under hire purchase agreements with carrying values of RM781,000 (2014: 461,000)

5. Software development expenditure

Software development assets comprise capitalised development work on software products. These costs are internally generated wages and salaries costs arising from the Group's software development and are recognised only if all the following conditions are met:

· an asset is created that can be identified;

· it is possible that the asset created will generate future economic benefit; and

· the development cost of the asset can be measured reliably.

Once development has been completed the software development intangible assets are amortised on a straight-line basis over their useful lives, which is assessed annually and is currently considered to be 5 years.

The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Group makes an estimate of the asset's recoverable amount. An asset's recoverable amount is the higher of an asset's or cash-generating unit's fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

There have been no impairments in the period under review.

6. Trade and other receivables

The Group's normal trade credit terms range from 30 to 60 days, however, the Group's Government and Multinational customers enjoy credit terms of 90 to 120 days. Other credit terms are assessed and approved on a case-by-case basis. The Group has no significant concentration of credit risk that may arise from exposure to a single receivable. The Directors consider that the carrying amount of trade and other receivables approximates to their fair values. All of the Group's trade receivables have been reviewed for indicators of impairment. There was no impairment of trade receivables for the six months to 30 June 2016 (31 December 2015: RM252,000; 30 June 2015: RM Nil).

Trade receivables above include amount that are past due at the period-end but against which no allowance for doubtful receivables has been made because there has not been any significant change in credit quality and the amounts are still considered recoverable.

7. Share Capital

Authorised at 30 June 2016

An unlimited number of ordinary shares of no par value each

8. Subsequent events

There were no material events that occurred subsequent to the end of the reporting date to the date of approval of these financial statement