Half Year Results

Dissemination of a Regulatory Announcement that contains inside information according to REGULATION (EU) No 596/2014 (MAR)

Mortice Limited

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

Results for the Half Year ended 30 September 2017

Mortice Limited (AIM: MORT), the AIM listed security and facilities management company, announces its unaudited results for the half year ended 30 September 2017.

Financial results highlights:

· Revenues from operations grew by 16.6% to $106.3 m (HY 2016: $91.2m)

o Man Guarding business increased by 15.5% to $56.0m (HY 2016: $48.5m)

§ Contributing 53% of group revenues

o Facilities Management business revenue grew 17.6% to $50.0m (HY 2016: $42.5m)

§ Contributing 47% of group revenues

o 14.6% ($8.4m) growth from Indian Operations

o 19.8% ($6.7m) growth from the Tenon FM UK and Frontline

§ Tenon FM UK- Revenue $35.5m (HY 2016: $28.8m)

§ Frontline - Revenue $5.0m (HY 2016: $5m)

o Revenue MIX current year first half

§ India - 62%

§ UK - 33%

§ Singapore - 5%

· Adjusted EBITDA* marginally down 4% to $4.8m (HY 2016: $5.0m), primarily reflecting cost pressures on a specific contract that have now been resolved

· Adjusted profit before taxation* down 15.4% to $2.2m (HY 2016: $2.6m)

· Net debt of $17.6m (FY 2017: $13.5m)

*HY2016 Adjusted EBITDA and profit before tax excludes $0.5m of gains from financial liabilities measured at fair value

Operational highlights:

More than 150 new clients have been added, some of these are:

Carr Hill High School, CBRE, Cottam High School, Crescent, University of Wolverhampton, Matrix Academy Trust, Princess Royal Community Hospital, Royal College of Music, Twitter, University of Warwick, PepsiCo, Bharat Oman Refineries, HPCL-Mittal Energy, Infosys, RSPL Ltd., American Tower Corporation, Lanco, Tech Mahindra, Tata Power, MOODY'S, Lemon Tree, Amazon, I-gate, Titan Industries Ltd, Suzuki Motorcycles, B-38 Group, Gurukul kangari Vishvidyalaya etc.

· Strengthened its UK operations via the £4.5 million acquisition of Elite, acquired in April 2017, which won contracts with Surrey and Sussex Police and BMW adding £2.25m of annual revenues.

Post Period End:

· Share buyback of £2.3 m has been completed

· Share release 500,000 new ordinary shares of no par value to the O&G vendors as part of the obligations under SPA

Major Manjit Rajain, Executive Chairman of Mortice Limited, said:

"The Company has demonstrated once again its ability to integrate the businesses and drive the growth across the geography and business segments. The Group is investing heavily on technology via ERP, mobility solution, to drive internal efficiency and productivity as well as scale up its businesses.

The GST Implementation in the country provides a significant edge to the Company to scale up in a fastest growing economy in the world.

The Company remains on track to meet market expectations for full year ending 31 March 2018."

About Mortice Limited

Mortice (AIM: MORT), is an AIM listed security and facilities management company, incorporated in Singapore and based in India with additional operations in Singapore and the UK.

Mortice operates under two brands, in India:

§ Peregrine - provision of guarding and security services to a wide range of clients from blue-chip companies, smaller businesses, commercial and private properties, and individuals.

§ Tenon - provision of a full range of facilities management services to corporate occupiers, owners and developers of real estate. Clients include some of the world's most respected blue chip and home-grown companies. Within the Tenon group, Mortice also offers security surveillance services through its subsidiary Soteria and mechanical and engineering services via Roto Power

The business is growing and profitable and is focused on expanding its geographical footprint and growing through targeted acquisitions, as well as organically.

In 2015 the Company established Tenon UK and through this wholly owned subsidiary, acquired UK based Office & General Group Limited (O&G"), an independent property service company specialising in cleaning and providing support services such as environmental solutions and built fabric maintenance in the UK and Elite cleaning and environmental service Ltd providing facility management services based out of Manchester (UK) in April, 2017. In addition, the Company acquired a 51% majority stake in Singapore-based security company Frontline Security Pte. Ltd, and has an option to acquire an additional 25% within three years.

The unaudited interim financial statements will be available on the Company's website: www.morticegroup.com. 

Unaudited Condensed Consolidated statement of financial position

Unaudited condensed consolidated statement of profit or loss and other comprehensive income

(All amounts in United States Dollars, unless otherwise stated

The annexed notes form an integral part of and should be read in conjunction with these financial statements.

Unaudited condensed consolidated statement of changes in equity

(All amounts in United States Dollars, unless otherwise stated)

Unaudited condensed consolidated statements of cash flows

(All amounts in United States Dollars, unless otherwise stated)

Notes to unaudited condensed consolidated interim financial statements

1. Introduction

Mortice Limited ('the Company' or 'Mortice') was incorporated on 9 January 2008 as a public limited Company in the Republic of Singapore. The Company's registered office is situated at 36 Robinson Road, #17-01 City House, Singapore 068877.

The Company was listed on the Alternative Investment Market (AIM) of the London Stock Exchange on 15 May 2008. The Company together with its subsidiaries (hereinafter, together referred to as 'the Group') is engaged in providing services such as guarding services, facilities management services, mechanical and engineering maintenance services, installation of safety equipment and sale of such equipment. The Group's operations are spread across India, UK and Singapore. The various entities comprising the Group have been defined below.

These unaudited condensed consolidated financial statements were approved by the Board on 24th November 2017.

The immediate and ultimate holding company is Mancom Singapore PTE ltd, a company incorporated in Singapore. (In the previous year Mancom Holding Limited was the Ultimate holding company)

2. Basis of preparation

These condensed consolidated interim financial statements for the six months period ended 30 September 2017 have been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the European Union (EU), on a going concern basis. They do not include all of the information required in annual financial statements in accordance with IFRS, and should be read in conjunction with the consolidated financial statements of the Group for the year ended 31 March 2017.

The functional currency of the entities within the Group (other than the subsidiaries in Singapore & United Kingdom) is Indian Rupees ('INR'). The functional currency of subsidiary in Singapore is SGD & in United Kingdom is GBP. The Company has a functional currency of United States Dollars ('US$'). The group's management has chosen to present the consolidated financial statement in US$, the functional currency of the Company.

All inter-company transactions and balances are eliminated on consolidation and the unaudited condensed consolidated interim financial statements reflect external transactions only. The accounting periods of the subsidiaries are coterminous with that of the Company.

3. Significant accounting policies

The interim financial statements have been prepared in accordance with the accounting policies adopted in the Group's most recent annual financial statements for the year ended 31 March 2017.

4. Estimates

When preparing the interim financial statements, management undertakes a number of judgments, estimates and assumptions about recognition and measurement of assets, liabilities, income and expenses. The actual results may differ from the judgments, estimates and assumptions made by management, and will seldom equal the estimated results.

The judgments, estimates and assumptions applied in the interim financial statements, including the key sources of estimation uncertainty were the same as those applied in the Group's most recent annual financial statements for the year ended 31 March 2017.

5. Segment reporting

The Group has reported segment results based on internal management reporting information that is regularly reviewed by the Group's Chief Executive Officer and Chairman. Chief Executive Officer and Chairman have concluded that the operating segment disclosure should be based on service offered by Group.

The reportable segments identified by the group are: guarding services and facility management services.

The revenue and profit generated by each of Group's business segments are summarized as follows:

The totals presented for the Group's operating segments reconciliation to the Group's key financial

6. Property, plant and equipment - The acquisitions of property, plant and equipment, for the six months ended 30 September 2017 are US$ 633,055 (six months ended 30 September 2016: US$ 894,682 and for the twelve months ended 31 March 2017 are US$ 1,399,786 excluding property, plant and equipment acquired under business combination).

7. Earning per share

Both basic and diluted earnings per share have been calculated using the profit or loss attributable to shareholders of Mortice Limited as the numerator. Calculation of basic and diluted profit per share is as follows:

8. Related Party Transactions

A. Related party relationship

Disclosure of Related parties and relationship between the parties:

Ultimate Holding Company Mancom Singapore PTE Ltd

Entities on which KMP exercise significant influence: Peregrine Security Private Limited

(Where transaction occurred) Micro Azure Computers Private Limited

Significant related party transactions, other than those disclosed elsewhere in the financial statements, are as follows

 Transaction with key management: September

The outstanding balances payable to related parties under the category of key management as at 30 September 2017 and 30 September 2016 are US$ 5,508 and US$ 51,119 respectively.

9. Financial Instruments

(Financials assets and liabilities measured at amortised cost)

Fair values

The carrying amount of financial assets and liabilities with a maturity of less than one year is assumed to approximate their fair values.

However, the Group and the Company do not anticipate that the carrying amounts recorded at financial position date would be significantly different from the values that would eventually be received or settled.

The carrying amounts of assets and liabilities presented in the statement of financial position relate to the following categories of assets and liabilities:

10. Acquisition of Elite

Mortice Limited and its wholly-owned subsidiary, Tenon Facility Management UK Limited ("Tenon UK"), have acquired Manchester-based Elite Cleaning & Environmental Services Limited ("Elite") on 21 April 2017

Tenon UK, agreed to pay up to consideration on a cash free, debt free basis (subject to certain potential adjustments to be satisfied by:

- £3.35 million cash consideration, offset by £1.6m free cash in Elite;

- the allotment of 1,458,333 new ordinary shares of no par value ("Ordinary Shares" and "Consideration Shares"); and

- a conditional earn‐out payment of up to £1.0 million ("Earn out Consideration"),payable as to £700,000 in cash and £300,000 in new ordinary shares

The consideration shares have been allotted at 120p per new ordinary share. If the consideration shares are not admitted to trading on AIM within 60 days of 21 April 2017, a cash payment of £1,750,000 was required be paid to the Sellers by the Company in lieu of the allotment of such consideration Shares to the Sellers.

The full Earn-out consideration is payable on pre‐agreed targets, including annualized contracted revenue 12 months post completion of the Acquisition of at least £11.2m and an EBITDA in the earn-out period of at least £1m being achieved and is payable up to £700k cash and £300k in Ordinary Shares.

Each Seller has undertaken that he will not sell, transfer of otherwise dispose of, or create an encumbrance over, the consideration Shares (or any interest in them) prior to 31 March 2019 (the "Lock‐In") subject to certain customary exceptions. In addition, an option has been granted, to the Sellers, to require the Company to purchase the consideration Shares for 120 pence per share in the period for three months following the expiry of the Lock‐In period.

Assets acquired

11.  Post reporting date events

During the month of October, 2017 the Company has bought back 2.331 million shares and also released additional 0.5 million share to previous owners of O&G to fulfil its obligation under the SPA executed them.