Half Yearly Report

29 August 2012

ServicePower Technologies plc

("ServicePower" or the "Company")

Half-yearly Report

ServicePower (AIM: SVR), a market leader for outsourced service and field management, announces its half-yearly report for the period ended 30 June 2012.

Financial Highlights

·; Revenue of £5.6 million (H1 2011: £6.5 million)

·; Gross profit £2.4 million (H1 2011: £3.7 million)

·; Loss before tax £0.6 million (H1 2011: profit £0.9 million)

·; Cash balance of £4.1 million as at 30 June 2012 (30 June 2011: £3.8 million and 31 December 2011: £5.5 million)

Operational Highlights

·; Further development of and investment in product set including the integration of ServiceMarket and ServiceBroker

·; Three new ServiceOperations contracts with leading North American suppliers of electronics and appliances

·; Further contracts secured post period end include four ServiceOperations contracts in the US and UK and a significant renewal with E.ON

Mark Duffin, CEO, ServicePower said,"ServicePower has made good operational progress in the period, implementing several new customer sites, increasing the capabilities of its product sets and investing in sales and marketing. The Group is actively working on converting several significant opportunities in both the UK and US in the near-term, and with a stable recurring revenue base, enlarged product portfolio and large market opportunity is confident in the long-term prospects for the business."

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About ServicePower

ServicePower Technologies Plc is the only company that can provide a complete, global field management platform that controls all elements of the service lifecycle from offering an appointment, assigning resource and dispatching work through to tracking resources, processing claims and providing business intelligence and analytical reports. With advanced intelligence-based scheduling, dispatch and open market auction software, as well as access to a global network of 86,000 repair and installation technicians, we enable companies to control and schedule work using a mixed resource pool of employees and independent contractors. ServicePower provides solutions that cross all industries. Current customers include Assurant Solutions, Mitsubishi, Farmers Insurance and Pitney Bowes.

ServicePower is listed on the AIM market of the London Stock Exchange with the ticker SVR.L. For more information please visit www.ServicePower.com

Joint statement of the Chairman and Chief Executive

Introduction

ServicePower has made good operational progress in the period, implementing several new customer sites, increasing the capabilities of its product sets and investing in sales and marketing. ServicePower is a leader in its industry, with a broad spectrum of increasingly global and blue chip customers. The economic conditions continue to have an impact on sales cycles, delaying the decision making process, however the Group is actively working on several prospects and the Board believes the demonstrable return on investment (ROI) of ServicePower's products and services, through increased efficiency of field service delivery, mean ServicePower is increasingly well placed for future growth.

The Group continues to focus on the delivery of high margin scheduling software, hosting and Software as a Service (SaaS) products. This approach will improve the business' profit margins and also increases ServicePower's stability and scalability; providing a platform for sustainable growth in future years.

The Board continues to view the sales pipeline favourably, yet conservatively, and remains focussed on delivering increased profitability; whilst at the same time continuing to evaluate acquisitions which would accelerate the Company's growth into new market sectors.

Financial Review

Total revenue as reported for the 6 months decreased by 14% to £5.6 million (H1 2011: £6.5 million). Within this, ServiceOperations revenue increased by 18% to £2.0 million (H1 2011: £1.7 million) whilst ServiceScheduling licence and consultancy revenue decreased by 25% to £3.6 million (H1 2011: £4.8 million). In the prior year, ServiceOperations licences (H1 2011: £0.8 million) and ServiceOperations implementation and support (H1 2011: £0.1 million) were included in ServiceScheduling licences and implementation and support respectively. Taking this into account, underlying revenue for the 6 months for ServiceScheduling decreased by 10% to £3.6 million (H1 2011 restated: £4.0 million) and ServiceOperations revenue decreased by 20% to £2.0 million (H1 2011 restated: £2.5 million).

Total cost of sales in the 6 months increased to £3.2million (H1 2011: £2.8 million) due to increased headcount and a change in the revenue mix in ServiceScheduling.

A breakdown of revenue as reported from the ServiceScheduling segment is as follows:

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

The Company continued to invest in maintaining functionalities across all of its product range, investing £0.4 million in H1 2012 (H1 2011: £0.4 million).

Gross profit for the period decreased to £2.4 million (H1 2011: £3.7 million) and there was a loss before tax of £0.6 million (H1 2011: profit before tax £0.9 million).

The adjusted loss before tax was £0.4 million (H1 2011: profit before tax £1.2 million). The adjusted loss (H1 2011:profit) before tax refers to the loss before tax adjusted for a foreign exchange translation loss (H1 2011:profit) of £0.1 million (H1 2011: £0.3 million).

The basic and diluted loss per share for the half year was 0.30p (H1 2011: basic and diluted earnings per share of 0.48p).

Cash balances were £4.1 million at 30 June 2012 comparable to the cash balances at 30 June 2011 of £3.8 million. Cash balances at 31 December 2011 were £5.5 million.

The directors are not recommending the payment of a dividend at this time as the Company wishes to retain a strong balance sheet that will allow it to evaluate acquisition targets in line with its stated strategy (2011: same).

Operational Review

Extended product portfolio

With the addition of ServiceMarket and ServiceBroker to its portfolio, ServicePower has significantly extended its product portfolio. ServiceMarket is a web-based marketplace on which pre-approved servicers can 'bid' for service jobs advertised by retailers, incorporating a payment system. ServiceBroker allows clients to direct work between various channels of employed engineers, the independent servicer network or ServiceMarket. These combined with the existing ServiceScheduling and ServiceOperations tools provide the first and only global field management platform. This sees the evolution of ServicePower from the provider of a niche software solution to one with an end-to-end field services platform, enabling our customers to use resource pools independently or mix resource pools together, thus providing control over their ability to execute work within desired cost and time parameters.

ServicePower will continue to invest in its technology platform in the second half of the year and beyond, integrating the new elements of the platform, adding further functionality and supporting the next generation of ServicePower products using cloud technology.

Customer implementations

Implementation of contracts won in 2011 continued in the first half of the year, with good progress being made at the RSPCA, Steritech and HomeServe, all of which the Group anticipates being live within the next six months. The North American electronics market has been a source of recent success, with three ServiceOperations contracts signed post-period end.

New customer signings have continued into the second half of the year, with a further 4 ServiceOperations contracts secured since the period end. A significant contract renewal has also taken place, with ServicePower signing two-year extension worth £1.2m to its major contract with E.ON UK, one of the UK's leading integrated power and gas companies.

Growth Strategy

ServicePower's expanded product set, strengthened market position and growing number of successful customer reference sites both in the UK and US provide a broad platform on which to build. In the Group's core verticals of white goods, consumer electronics, insurance and energy, ServicePower will continue to seek new opportunities whilst also bringing in expertise in additional vertical markets into the Group through new hires.

Outlook

The Group is actively working on converting several significant opportunities in both the UK and US in the near-term, and with a stable recurring revenue base, enlarged product portfolio and large market opportunity is confident in the long-term prospects for the business.

Lindsay Bury, Chairman Mark Duffin, CEO 29 August 2012

ServicePower Technologies plc

All amounts relate to continuing activities.

ServicePower Technologies plc

ServicePower Technologies plc

ServicePower Technologies plc

The half-yearly report was approved by the Board of Directors and authorised for issue on 29 August 2012

and was signed on its behalf by:

M Duffin

Director

ServicePower Technologies plc

ServicePower Technologies plc

1. General information

The half-yearly report has been prepared on the basis of the accounting policies set out in the Group's financial statements for the year ended 31 December 2011. The annual figures set out in this document do not constitute statutory financial statements within the meaning of section 434 of the Companies Act 2006. A copy of the 2011 statutory accounts has been delivered to the Registrar of Companies. The report was unqualified and did not contain statements under section 498(2) or (3) of the Companies Act 2006, or include a reference to any matter to which the auditors drew attention by way of emphasis of matter without qualifying their report.

 The half-yearly report has not been audited or reviewed by the Company's auditor pursuant to the Auditing Practices Board guidance on "Review of Interim Financial Information."

2. Accounting policies

The condensed set of financial statements has been prepared using policies consistent with IFRS as adopted by the European Union. The same accounting policies and methods of computation are followed in the condensed set of financial statements as applied in the Group's latest audited financial statements for the year ended 31 December 2011 and published by the Group on 22 March 2012. While the financial figures in the half-yearly report have been computed in accordance with IFRSs applicable to interim periods, this half-yearly report does not contain sufficient information to constitute an interim financial report as that term is defined in IAS 34.

Going concern

The Group recognises that 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.

During the period, the Group has continued its Service Operations business, which provides a regular revenue stream and cash funding to the Group and in 2012 the Group continues to monitor costs closely in order to conserve cash.

At 30 June 2012 the Group had net assets of £2,724,000 including £4,134,000 of cash and cash equivalents (31 December 2011 - net assets of £3,186,000 including £5,473,000 of cash and cash equivalents and 30 June 2011 - net assets of £3,232,000 including £3,837,000 of cash and cash equivalents).

Based on cash flow forecasts which take into account current sales orders and expected conversion of opportunities, expenditure forecasts and the Group's current cash balance, the directors consider it appropriate to prepare the Group's half-yearly report on the going concern basis.

3. Business segments

Segment information reported externally is analysed on the basis of the Group's business streams, namely Service Scheduling, which provides scheduling solutions and Service Operations, which provides claims and despatch processing in the consumer electronics market. This method of segment analysis is also used to report to the Board and the Chief Executive.

Segment information about these businesses is presented below:

In the prior year, Operations licence, implementation and support (H1 2011: £900,000) revenue was included in Scheduling. Therefore underlying revenue for the period for Scheduling was £3,851,000 and Operations revenue was £2,645,000. Underlying segment profit for the period Scheduling and Operations was £3,982,000 and £1,076,000 respectively.

3. Business segments (continued)

Segment assets

4. Taxation on loss from ordinary activities

No tax charge arises in the current period due to the tax losses available. A tax charge of £nil arose in the periods ended 30 June 2011 and £82,000 was payable at 31 December 2011.

5. (Loss)/earnings per share

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

(Loss)/earnings

In the current period, the convertible loan notes and share options are anti-dilutive. At 31 December and 30 June 2011, the convertible loan notes were anti-dilutive and the share options were dilutive. The dilutive effect in those periods was not material.

ServicePower Technologies plc

6. Note to the cash flow statement