Half Yearly Report

22 September 2014

NetDimensions (Holdings) Limited

("NetDimensions" or the "Company" or the "Group")

Interim Results for the period ending 30 June 2014

NetDimensions (AIM: NETD; OTCQX: NETDY), a global provider of performance, knowledge, and learning management systems, is pleased to announce its interim results for the period ending 30 June 2014.

Financial Highlights

· 40% GAAP revenue growth to US$9.1M (2013 H1: US$6.5M)

· 49% invoiced sales growth to US$9.1M (2013 H1: US$6.1M)

· 38% increase in deferred revenue to US$7.6M (2013 H1: US$5.5M)

· 50% GAAP revenue growth in our global hosted secure Software as a Service ("SaaS") offering to US$3.9M (2013 H1: US$2.6M)

Operations Highlights

· 32 new clients added in the period with a combined contracted value of US$3.8M, including Chase Bank Kenya Limited, Credit Corp Group Limited, Community Memorial Health System, PeaceHealth, University of Kansas Hospital, UAP Insurance and IDEXX Europe B.V.

· Number of active users were 4.7M at the end of the period (2013 H1: 2.8M), including up to 1M users at not-for-profit organisations

· Invoiced sales from new business was up 79% to US$3.4M (2013 H1: US$1.9M) representing 37% of total invoiced sales (2013 H1: 31%)

· The average deal size for direct new clients in the period increased to US$93K (2013 H1: US$63K), an increase of 48% over prior period

· Invoiced sales to clients in high-consequence industries represented 83% (2013 H1: 70%) of total invoiced sales for the period

· Positioned again as a 'Core Leader' in the 2014 release of the unique European learning and talent market insight report, Elearnity 9-Grid™ for Learning Management Systems (LMS)

Roger Durn, Chairman of NetDimensions, commented: "The financial results for the period ending 30 June 2014 saw excellent progress with accelerated growth in both revenue and invoiced sales, both of which were substantially higher than in the prior period.

"These numbers reflect the success of our Business plan implemented last year. The Investment phase for this has now been substantially completed such that the Company is well positioned to benefit from the many identified opportunities within our target markets. The Board will now focus on driving additional growth both organically and by selective acquisitions and we are confident of achieving further successes going forward."

The interim report will be available on the Company's website.

Enquiries:

About NetDimensions

Established in 1999, NetDimensions (AIM: NETD; OTCQX: NETDY) is a global provider of performance, knowledge and learning management solutions.

NetDimensions provides companies, government agencies and other organizations with talent management solutions to personalize learning, share knowledge, enhance performance, foster collaboration and manage compliance programs for employees, customers, partners and suppliers.

Recognized as one of the talent management industry's top-rated technology suppliers, NetDimensions has been chosen by leading organizations worldwide including ING, Cathay Pacific, Hunter Douglas, Chicago Police Department, Geely Automotive, Fugro Group and Fresenius Medical Care. 

NetDimensions is ISO 9001 certified and NetDimensions hosted services are ISO 27001 certified.

For more information, visit www.NetDimensions.com or follow @netdimensions on Twitter.

Chairman's Statement for the Period Ended 30 June 2014

The Company has made good progress in the six months to 30 June 2014 and I am pleased to report that revenue for the period was US$9.1M, an increase of 40% (2013 H1: US$6.5M).

This is the best interim performance in NetDimension's history. The 40% growth in revenue is a substantial increase over the 2013 H1 revenue growth of 10%, with the accelerated growth providing confidence that the growth in the Company is gaining momentum in a traditionally second half weighted business. Invoiced sales were also US$9.1M for the period, an increase of 49% (2013 H1: US$6.1M).

These headline numbers are an encouraging early indication of the success of the Business plan that the Board implemented last year to substantially grow sales revenues.

Financial Highlights

· 40% GAAP revenue growth to US$9.1M (2013 H1: US$6.5M)

· 49% invoiced sales growth to US$9.1M (2013 H1: US$6.1M)

· 38% increase in deferred revenue to US$7.6M (2013 H1: US$5.5M)

· 50% GAAP revenue growth in our global secure Software as a Service ("SaaS") offering to US$3.9M (2013 H1: US$2.6M)

Financial Summary

The financial results for the period ending 30 June 2014 saw excellent progress with accelerated growth in both revenue and invoiced sales both of which were substantially higher than in the prior period.

The Group continues to improve direct sales activity and in the period the proportion of invoiced sales from direct clients was US$8M representing 88% (2013 H1: 83%) of total invoiced sales.

The North America region performed strongly in the period and accounted for 46% of Group revenues. The North America region included a full 6 months contribution from the new Healthcare division. Europe, Middle East & Africa ("EMEA") comprised 39% of Group revenues and Asia Pacific including China 12%. The rest of the world made up 3%.

The Group saw substantial revenue growth in all its major markets including the North America market with revenues up 45% to US$4.2M (2013 H1: US$2.9M), the EMEA market up 35% to US$3.5M (2013 H1: US$2.6M) and the Asia Pacific market including China up 57% to US$1.1M (2013 H1: US$0.7M).

The revenue for the period included US$1.4M (2013 H1: US$0.2M) from NetDimensions Healthcare, our new Healthcare division formed on the 1st March 2013 on the back of the acquisition of eHealthcareIT.

The growth was driven by increased revenue for our global secure SaaS offering, a full contribution from our new Healthcare division and growth in revenue from our expanded global services division ("GSD"). In addition, the Group ended the period with a strong deferred revenue balance of US$7.6M (2013 H1: US$5.5M), some 38% higher than the prior period balance.

The Group continues to focus on supplying software via its global secure SaaS offering and we are pleased to report that revenue from this product offering increased by 50% to US$3.9M (2013 H1: US$2.6M). The new expanded GSD performed well with revenues increasing by 88% in the period to US$1.5M (2013 H1: US$0.8M).

The Group's adjusted loss before tax, excluding net foreign exchange gain / (loss) (US$3K), intangible asset amortisation (US$0.2M) and non-cash share-based payments (US$0.2M), was US$2.0M (2013 H1: US$2.7M). NetDimensions' fully disclosed loss before tax reduced by 25% to US$2.4M (2013 H1: US$3.2M).

Cash used in operating activities was US$0.9M in the period (2013 H1: US$1.5M) as improvements in working capital helped to offset the impact of the loss. The Group's cash balance remained healthy at US$7.1M (2013 H1: US$10.2M).

Operations Review

In 2013 the Board commenced the implementation of the 3-year Business plan to substantially increase market share, targeting clients operating in high consequence industries within the Talent Management Systems ("TMS") market. A substantial part of the investment was completed in 2013 and the results for this period are the first since the completion of this investment.

I am pleased to report on the following progress:

· 32 new clients added in the period with a combined contracted value of US$3.8M, including Chase Bank Kenya Limited, Credit Corp Group Limited, Community Memorial Health System, PeaceHealth, University of Kansas Hospital, UAP Insurance and IDEXX Europe B.V.

· Number of active users were 4.7M at the end of the period (2013 H1: 2.8M), including up to 1M users at not-for-profit organisations

· Invoiced sales from new business was up 79% to US$3.4M (2013 H1: US$1.9M) representing 37% of total invoiced sales (2013 H1: 31%)

· The average deal size for direct new clients in the period increased to US$93K (2013 H1: US$63K), an increase of 48% over prior period

· Invoiced sales to clients in high-consequence industries represented 83% (2013 H1: 70%) of total invoiced sales for the period

· Positioned again as a 'Core Leader' in the 2014 release of the unique European learning and talent market insight report, Elearnity 9-Grid™ for Learning Management Systems (LMS)

To take advantage of the opportunity that increasing demand from clients operating in high-consequence industries offers, the Company has restructured and expanded its service offerings. The professional services team has been re-organised into a Global Services Division ("GSD") with a Global Head of Services running the division as a profit centre.

The Company believes there are substantial sales opportunities in expanding the service offerings to new and existing clients. To take advantage of this opportunity the GSD will be organised into several practices, each with its own sales target and business plan. The initial core practices will be the Implementation Practice, Added Value Practice (customisation, reporting, integration, and upgrades), Training Practice and Consulting Practice (deployment, analytics and portals).

Outlook

These numbers reflect the success of our Business plan implemented last year. The Investment phase for this has now been substantially completed such that the Company is well positioned to benefit from the many identified opportunities within our target markets. The Board will now focus on driving additional growth both organically and by selective acquisitions and we are confident of achieving further successes going forward.

NetDimensions is performing in line with current consensus analyst expectations and, with the Company gaining momentum, the Board expects further growth going forward. With the global talent management software sector growing by 17% in 2013 to $5bn+ (Bersin by Deloitte) and being projected to grow by a further 17% in 2014 to $6bn+, the Board will continue to explore new markets and opportunities for expansion.

NETDIMENSIONS (HOLDINGS) LIMITED

CONDENSED CONSOLIDATED INCOME STATEMENT

FOR THE SIX MONTHS ENDED 30 JUNE 2014

NETDIMENSIONS (HOLDINGS) LIMITED

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDED 30 JUNE 2014

NETDIMENSIONS (HOLDINGS) LIMITED

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2014

NETDIMENSIONS (HOLDINGS) LIMITED

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTHS ENDED 30 JUNE 2014

Attributable to equity holders of the Company

NETDIMENSIONS (HOLDINGS) LIMITED

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTHS ENDED 30 JUNE 2014

Attributable to equity holders of the Company

NETDIMENSIONS (HOLDINGS) LIMITED

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE SIX MONTHS ENDED 30 JUNE 2014

NETDIMENSIONS (HOLDINGS) LIMITED

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION

1 GENERAL INFORMATION

NetDimensions (Holdings) Limited (the "Company") was incorporated in the Cayman Islands as a limited liability company under theCompanies Law (2000) Revision on 10 July 2000.The address of its registered office is P.O. Box 309, Ugland House, South Church Street, George Town, Grand Cayman, Cayman Islands, British West Indies. The address of its head office and principal place of business in Hong Kong is 17/F., Siu On Centre, 188 Lockhart Road, Wan Chai, Hong Kong.

The principal activities of the Company and its subsidiaries (together the "Group") are licensing of computer software and the provision of related services.

The Company's ordinary shares were admitted to trading on the Alternative Investment Market ("AIM") operated by the London Stock Exchange. On 7 August 2012, the Company's ordinary shares were also admitted to trading on the OTCQX platform operated by OTC Markets Group, Inc.

This condensed consolidated interim financial information is presented in United States Dollars ("US$"), unless otherwise stated.

This condensed consolidated interim financial information for the six months ended 30 June 2013 and 2014 have not been audited.

2 SUMMARY OF SIGIFICANT ACCOUNTING POLICIES

(a) Basic of preparation

The Company has a financial year end date of 31 December. This condensed consolidated interim financial information for the six months ended 30 June 2014 has been prepared in accordance with International Accounting Standard ("IAS") 34, "Interim Financial Reporting". The condensed consolidated interim financial information should be read in conjunction with the annual financial statements for the year ended 31 December 2013, which have been prepared in accordance with International Financial Reporting Standards ("IFRS") issued by the International Accounting Standards Boards ("IASB").

(b) Significant accounting policies

Except as described below, the accounting policies applied are consistent with those of the annual financial statements for the year ended 31 December 2013, as described in those annual financial statements.

Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected total annual earnings.

(i) Effect of adopting new and amendments to standards and interpretations

The Group has adopted all of the new standards, amendments to standards and interpretations issued by IASB that are relevant to the Group's operations and mandatory for annual periods beginning on or after 1 January 2014. The adoption of these new standards, amendments to standards and interpretations did not result in a significant impact on the results and financial position of the Group.

NETDIMENSIONS (HOLDINGS) LIMITED

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION

2 BASIS OF PREPARATION AND ACCOUNTING POLICIES (CONTINUED)

(ii) New standards, amendments to standards and interpretations that have been issued but are not yet effective:

The Group will adopt the above new standards, amendments to standards and interpretations to existing standards as and when they become effective. The Group has already commenced the assessment of the impact to the Group and is not yet in a position to state whether these would have a significant impact on its results of operations and financial position.

NETDIMENSIONS (HOLDINGS) LIMITED

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION

3 ESTIMATES

The preparation of interim financial information requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.

In preparing this condensed consolidated interim financial information, the significant judgments made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were that same as those that applied to the consolidated financial statements for the year ended 31 December 2013, with the exception of changes in estimate that are required in determining the provision for income tax.

4 FINANCIAL RISK MANAGEMENT

The Group's activities expose it to a variety of financial risks: market risk (including foreign exchange risk and cash flow interest rate risk), credit risk and liquidity risk.

The condensed consolidated interim financial information does not include all financial risk management information and disclosures required in the annual financial statements, and should be read in conjunction with the Group's annual financial statements for the year ended 31 December 2013.

There have been no changes in the risk management department since year end or in any risk management policies since year end.

NETDIMENSIONS (HOLDINGS) LIMITED

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION

5 REVENUE AND SEGMENT INFORMATION

Revenue represents income from software licensing and the provision of hosting, support and maintenance, software customisation and implementation services during the period and is analysed as follows:

The chief operating decision-maker ("CODM") has been identified as the executive directors of the Company. Management has determined the operating segments based on the reports reviewed by the CODM that are used to assess performance and allocate resources. The CODM considers the business from the geographic perspective, including North America, Europe, Middle East and Africa ("EMEA"),Asia Pacific and Rest of the World, which are also the Group's reportable operating segments.

The Group's revenue is mainly derived from customers located in North America, EMEA, Asia Pacific and Rest of the World, while the Group's facilities and other assets are located predominantly in North America, EMEA, Asia Pacific and Rest of the World.

Segment performance is evaluated based on segment results, which is a measure of adjusted loss before income tax. The adjusted loss before income tax is measured consistently with the Group's loss before income tax, except that amortisation of intangible assets - customer base, unallocated corporate expenses, finance income, finance costs and impairment loss on available-for-sale financial assets are not allocated to individual segment.

Segment assets consist primarily of property, plant and equipment, intangible assets, accounts and other receivables, prepayments and deposits. Cash and bank balances for corporate use are excluded from segment assets.

NETDIMENSIONS (HOLDINGS) LIMITED

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION

5 REVENUE AND SEGMENT INFORMATION (CONTINUED)

Segmental information for the six months ended 30 June 2014 is as follows:

NETDIMENSIONS (HOLDINGS) LIMITED

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION

5 REVENUE AND SEGMENT INFORMATION (CONTINUED)

Segmental information for the six months ended 30 June 2013 is as follows:

NETDIMENSIONS (HOLDINGS) LIMITED

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION

6 OPERATING LOSS

Operating loss is stated after charging the following:

7 FINANCE INCOME, NET

NETDIMENSIONS (HOLDINGS) LIMITED

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION

8 LOSS PER SHARE

Basic

Basic loss per share is calculated by dividing the loss attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the period.

Diluted loss per share is the same as basic loss per share since the exercise of the outstanding share options would have an anti-dilutive effect for the six months ended 30 June 2013 and 2014.

9 PROPERTY, PLANT AND EQUIPMENT

NETDIMENSIONS (HOLDINGS) LIMITED

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION

10 INTANGIBLE ASSETS

11 CASH AND BANK BALANCES

NETDIMENSIONS (HOLDINGS) LIMITED

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION

12 SHARE CAPITAL

Notes:

(a) Pursuant to the terms and conditions of the letter of appointment with the non-executive directors of the Company, an aggregate of 50,000 ordinary shares of the Company were allotted to them as part of their remuneration package during the periods ended 30 June 2014 and 30 June 2013. The fair values of these shares amounting to US$48,629 and US$44,595 respectively have been recognised in the condensed consolidated income statement.

(b) During the periods ended 30 June 2014 and 30 June 2013, an aggregate of 673,000 and 232,500 share options were exercised with proceeds of US$237,347 and US$63,166, respectively. The weighted average market values per share at the date of exercise for these share options exercised during the periods ended 30 June 2014 and 30 June 2013 were GBP 72.3 pence and GBP 47.5 pence respectively.

(c) On 1 March 2013, the Company issued 1,500,000 new ordinary shares to the former shareholders of eHealthcareIT LLC ("eHealthcareIT") as part of purchase consideration of the business of eHealthcareIT. These ordinary shares rank pari passu in all respects with the existing ordinary shares. The fair value of these shares amounted to US$989,973.

(d) On 8 May 2013, the Company and the placing agent ("Panmure Gordon") entered into a Placing Agreement pursuant to which the Company appointed Panmure Gordon, as an agent to procure independent third parties to purchase 10,750,000 new ordinary shares at the placing price of GBP38 pence per share. The transaction was completed on 15 May 2013. Accordingly, 10,750,000 ordinary shares of US$0.001 each were issued at a premium of US$0.589 each. The proceeds from issue of these new ordinary shares of US$6,331,750, net of the direct transaction cost of US$261,724 was credited to the share capital and share premium account. These new ordinary shares rank pari passu in all respects with the existing ordinary shares.

NETDIMENSIONS (HOLDINGS) LIMITED

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION

13 EQUITY SETTLED SHARE-BASED PAYMENTS

Pursuant to the share option scheme (the "Plan") approved and adopted on 18 September 2000, the Board of Directors of the Company may offer eligibleemployees, directors and sales agentsrights to subscribe for shares of the Company. The Plan shall be valid and effective for a period of ten years. Pursuant to an ordinary resolution passed at the annual general meeting of the Company on 10 June 2011, the Plan expired on 17 September 2010 is renewed for a further period of ten years, and is to expire on 16 September 2020 (the "Renewed Plan"). The maximum aggregate number of ordinary shares of US$0.001 each which may be issued pursuant to the Renewed Plan is 6,000,000 ordinary shares. Pursuant to an ordinary resolution passed at the annual general meeting of the Company on 9 June 2014, the maximum aggregate number of ordinary shares be issued pursuant to the Renewed Plan increases from 6,000,000 to 10,000,000 ordinary shares. Options are granted at a price equal to the average market price of the Company's shares on the date of grant. The vesting period is ranged from one year to five years from the date of grant. If the options remain unexercised ten years after the date of grant, the options will expire. Optionsare forfeited if the relevant option holder leaves the Group before the options vest.

The following table discloses the movements of the Company's share options: