Interim Results

30 September 2014

RapidCloud International plc

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

Interim results for the six months ended 30 June 2014

RapidCloud International (AIM: RCI), the Southeast Asia based software solutions provider offering subscription services through all segments of cloud computing, announces its half year results for the six months ended 30 June 2014.

Financial highlights

· Revenue growth of 26% to RM 6.1m (H1 2013: RM 4.8m)

· Recurring revenues 48.9% of total revenues (H1 2013: 33%)

· Gross profit increase of 10% to RM 3.9m (H1 2013: RM 3.5m)

· Gross profit margin 64%* (H1 2013: 73%)

· Operating profit RM 1.2m** (H1 2013: RM 1.9m)

· Profit after tax of RM 1.1m (H1 2013: RM 1.9m)

· Cash at 30 June 2014 of RM 6.0m (c. £1.2m) (H1 2013: RM 8.3m)

· Trade receivables reduced to RM 4.7m from RM 6.1m at 31 December 2013 (H1 2013: RM 2.5m)

*Gross profit margin decreased primarily as the result of increase in staff numbers to 87 at 30 June 2014 from 58 at 31 December 2013

**includes ongoing costs associated with being a listed entity and not present in H1 2013's numbers of RM 0.6m and additional depreciation and amortisation costs of RM 0.3m.

Operational highlights

· Established Indonesian subsidiary PT. RapidCloud Indonesia

· Increase in sales and technical staff numbers to 87 (31 Dec 2013: 58)

· Launch of several in-house developed products including RapidAPI, RapidSITE, RapidCRM & RapidSearch

Post period-end highlights

· Completed an earnings enhancing acquisition of Exxelnet Solutions Pte. Ltd ("Exxelnet"), a Singaporean web development firm for RM 5m (c.£0.95m)

· Equity fundraising of RM 3m (c. £0.6m)

· Awarded prestigious Emerging Business Excellence Award at Sin Chew Business Excellence Awards 2014

· Revenues of RM 2.6m combined for July and August 2014 showing positive revenue growth post period-end

· Total customers grew to over 40,000 (including 2,000 from acquisition of Exxelnet)

Raymond Chee, Chief Executive of RapidCloud, commented: "The first half of the year has been a period of considerable investment during which time we continued to develop our product offerings, greatly increased our staff numbers, expanded our geographic reach, enhanced our infrastructure and improved brand awareness through additional advertising and marketing campaigns.

Following the year end we have continued to invest primarily through the earnings enhancing acquisition of Exxelnet, further demonstrating our commitment to expanding into new geographies. As one of the world's major commercial hubs, Singapore represents a potentially lucrative and strategically important territory into which we can now fast track the launch of our products and services.

The investments we have made during 2014 leave us better positioned as a Company and we are confident of accelerated growth going forward.

For further information, please visit www.rapidcloudasia.com or contact:

Chairman's statement

As stated at the time of RapidCloud's IPO, our strategy has been to invest in the Company in order to increase our scale and geographic coverage as well as to accelerate product development. We have continued to deliver against that goal during the first half of 2014.

We have committed significant investment into the business, both during and following the period under review, and this has seen our business expand into the new geographies of Indonesia and Singapore, an increase in the number of technical and sales staff within the Group and the evolution of our offerings leading to new revenue streams being developed.

During the period we established offices in Jakarta, Indonesia, establishing the subsidiary PT RapidCloud Indonesia. This business is performing well and has already signed a number of contracts which we expect to recognise in the second half of 2014. In addition, we expanded into Singapore post-period end through the earnings enhancing acquisition of Exxelnet Solutions Pte. Ltd and this has already provided us with numerous cross-selling opportunities.

Both our Indonesian and Singaporean acquisitions are in strategically important territories, Indonesia being the largest economy in Southeast Asia with a population of 240 million and Singapore being the largest financial centre in Southeast Asia and fourth largest in the world. Singapore is also home to the Asian headquarters of a number of global blue chip organisations.

Our sales and technical teams grew from 58 staff members at 31 December 2013 to 87 at 30 June 2014 demonstrating our commitment to increasing our capabilities in these two areas of the Company. The Exxelnet Solutions acquisition also brought with it a talented team of software engineers, particularly in the field of web search engines including a number of former Google employees.

Investment was also made into infrastructure during the period having established new headquarters in Kuala Lumpur giving us significant capacity for further expansion. The new headquarters include a 24/7 network operation centre for our technical team to monitor network and server performance as well as training facilities for clients to aid in the handover process for the increasingly extensive and complex projects we are now able to deliver.

Finally, we increased investment into advertising and marketing in order to increase awareness of RapidCloud's brands and products and this is resulting in a positive effect on our pipeline of new business.

We have a well-balanced business between enterprise and hosting revenue streams with growth in enterprise sales resulting from the numerous new products introduced during the period. This is helping to underpin our target of recurring revenue accounting for over 50% of total revenue.

We would like to thank all of our employees and shareholders for their continued support and contribution to our successful growth during the period under review and looking forward we remain confident of further success in the second half of 2014.

David Cotterell

Chairman

Chief Executive's review

Financial performance

Our core business continued to perform well during the period, recording revenue growth of 26% to RM 6.1m (H1 2013: RM 4.8m). This was particularly pleasing given our focus being firmly on investment during the period. Typically revenues are weighted toward the second half and this is likely to be accentuated further in 2014 as a result of the Exxelnet acquisition.

Gross profit increased 10% to RM 3.9m (H1 2013: RM 3.5m) with gross profit margin decreasing to 64% (H1 2013: 73%). The primary reason for the increased cost of sales was the investment in technical and sales staff. As at 30 June 2013 technical and sales employees totalled 47, at 31 December 2013 they totalled 58 and at 30 June 2014 the total number was 87, inclusive of the 3 staff members in our Indonesian operations. There is a period while new sales staff are being trained where they represent a cost to the business while not generating revenues. With our new sales staff, both from organic growth and through the acquisition of Exxelnet, now fully integrated into the business we expect the new sales staff to contribute positively in second half of 2014.

Operating profit of RM1.2m decreased by 39% to RM 1.2m (H1 2013: RM 1.9m). The decline resulted from three elements, including over RM 0.7m of amortisation and depreciation as the result of increased investment into product and infrastructure, RM 0.4m of additional investment into advertising and marketing, and RM 0.6m of ongoing costs associated with RapidCloud now being a listed entity that were not present in the comparative period. With our ongoing MSC status (a government tax scheme designed to promote adoption of IT technology in Malaysia) giving tax exemption on profits generated in Malaysia this translated to a profit after tax of RM 1.1m (H1 2013: RM 1.9m).

The cash position remained steady during the period with RM 6.0m at 30 June 2014 (c. £1.2m) against RM 6.2m at 31 December 2013.

A placing raised £600,000 (before expenses) in July of this year. The net proceeds of the placing were used to fund the SGD1.0 million (c. £0.475 million) cash element of the Exxelnet acquisition, the remainder being used to provide additional working capital.

Trade receivables reduced to RM 4.7m (31 December 2013: RM 6.1m)

Operational developments

During the first half of the year we continued to invest into accelerating our global expansion, increasing sales capabilities and developing our enterprise offerings.

Our technical staff numbers grew from 31 at 31 December 2013 to 40 at 30 June 2014. As the result of this investment into our technical resources we are able to rapidly develop and deploy an increasing number of enterprise offerings for our clients of ever greater complexity. Through modular development methods we are then able to roll these solutions out to our extended client base.

Sales staff numbers grew from 27 at 31 December 2013 to 47 at 30 June 2014. This significant growth in sales staff, combined with and our newly integrated approach to global sales, means the roll-out of these products can be effected quickly and efficiently across all of the growing number of geographies in which we are present leading to numerous cross-selling opportunities.

Our geographic expansion has also continued apace during the period including the establishment of operations in Indonesia, the fourth most populous country in the world and, post-period end, the acquisition of Exxelnet, giving us a presence in Singapore, the fourth largest financial centre in the world. The following gives a breakdown of some of the developments during 2014 in the core geographies in which we are present including contract wins for our enterprise offerings:

Malaysia

Post-period end we secured a contract with a leading Malaysian airline to provide cargo management, tracking and reporting systems with comprehensive Business Intelligence (BI) analysis. The initial contract is for a six figure sum in RM and will be recognised in the current financial year. We have also won a contract to provide public and private scalable cloud infrastructure services to the business registrar of one of the countries in Southeast Asia, again for an RM six figure sum which will be recognised in the current financial year. This is further evidence of our growing presence in the public sector and a strong endorsement of the quality of our offerings.

In addition, our Malaysia operations, Emerge Systems (M) Sdn. Bhd., was recently week awarded the prestigious Sin Chew Business Excellence Award 2014 under the category of Emerging Business Excellence Award. Sin Chew is the largest Chinese newspaper in Malaysia.

Singapore

In August RapidCloud acquired Exxelnet, a Singaporean web development, hosting and search-engine optimisation firm, for c. £0.95 million. The acquisition is a close strategic fit with RapidCloud providing the Company with a profitable business in the lucrative territory of Singapore, the fourth largest financial centre in the world. Exxelnet also brought with it a highly skilled workforce and a solid customer base. It is RapidCloud's intention to cross-sell its existing product portfolio into this customer base and to sell Exxelnet's solutions into RapidCloud's existing 38,000 customers.

Exxelnet has over 2,000 customers and generated revenues of SGD1.5 million (£0.7 million) and PBT of SGD0.33 million (£0.16 million) for the year ended 31 December 2013 (unaudited). Alongside numerous operational synergies, and in line with the Company's strategy of geographic expansion, the acquisition has enabled the fast track the launch of RapidCloud's existing services into Singapore.

Already earnings enhancing to the enlarged Group, Exxelnet has performed strongly since acquisition. New enterprise deals in Singapore include a contract to provide an e-commerce portal complete with membership management, loyalty programme, digital marketing and business intelligence modules worth approximately RM 0.25m. Furthermore, Exxelnet has signed a contract to provide a customised customer relationship management system complete with an e-mail marketing system and business intelligence capabilities worth approximately RM 0.27m.

With the profile of Exxelnet being similar to that of RapidCloud, the successful integration of the Singapore business is progressing rapidly. The integration of Exxelnet's Digital Marketing solutions into the RapidCloud business is expected to be launched Group-wide in Q4 2014.

Indonesia

Establishing a presence in Indonesia, Southeast Asia's largest economy, was a stated objective at the time of our IPO and following the successful completion of extensive regulatory procedures we incorporated PT. RapidCloud Indonesia as a wholly owned subsidiary of RapidCloud during H1 2014. We have established offices in Jakarta and have appointed a country manager and five sales executives.

Since this time our Indonesian business has performed very well and has already successfully closed a number of deals. In addition, we have recruited several channel partners and this process was accelerated following our successful hosting of a recent enterprise product seminar. Our recent acquisition of Exxelnet is also expected to accelerate our expansion in Indonesia.

Thailand

In Thailand we recently signed a strategic marketing partnership with KPV Group, one of the biggest privately-held conglomerates in Thailand with over 9,000 employees. We anticipate that this contract will contribute to the revenue of the Bangkok office substantially from the beginning of Q1 2015.

The Philippines

We have established a back-end search engine optimisation team and search-engine marketing team in The Philippines in order to support the Group. We also continued to add to our R&D resources during the period with R&D staff in the Philippines numbering 17 at 30 June 2014 up from 12 at 31 December 2014.

Outlook

The first half of the year has been a period of considerable investment during which time we further developed our offerings, greatly increased our staff numbers, expanded our geographic reach, enhanced our infrastructure and improved brand awareness through additional advertising and marketing campaigns.

Following the year end we continued to invest through the earnings enhancing acquisition of Exxelnet, further demonstrating our commitment to expanding into new geographies. As one of the world's major commercial hubs, Singapore represents a potentially lucrative and strategically important territory into which we can now fast track the launch of our products and services.

The investments we have made during 2014 leave us better positioned as a Company and we are confident of accelerated growth going forward.

Consolidated Interim Statement of Comprehensive Income

for the six months ended 30 June 2014

Consolidated Interim Statement of Financial Position

as at 30 June 2014

Consolidated Interim Statement of Cash Flows

Six months ended 30 June 2014

Consolidated Interim Statement of Changes in Equity

Six months ended 30 June 2014

Notes to the Financial Information

Six months ended 30 June 2014

1. Accounting policies

This consolidated interim financial information, which is unaudited for the half-year ended 30 June 2014, 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 2013. 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 of 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.

The consolidated financial information presented for the comparative period, the six months to 30 June 2013, is for RapidCloud Asia Berhad ('RCAB') and its subsidiaries (together the 'RCAB Group'). The group reconstruction, in which RapidCloud International plc ('RCI'), a company registered and incorporated in Jersey on 15 March 2013, acquired the entire share capital of RCAB, occurred prior to admission to the AIM market on 7 August 2013 and therefore subsequent to 30 June 2013, the reporting date for this comparative period.

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 RCI 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:

In order to provide meaningful comparative earnings per share information, the number of shares used to calculate the EPS in the comparative period is considered to be the number of shares in issue on the Group's admission to AIM.

There are no share options, warrants or other dilutive instruments in issue therefore the basic earnings is the same as dilutive earnings per share.

4. Property, plant and equipment

4. Property, plant and equipment (continued)

4. Property, plant and equipment (continued)

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

6. Trade and other receivables (continued)

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 2014 (31 December 2013: RM130,000; 30 June 2013: 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. Convertible preference shares

The comparative period cash balance includes restricted cash raised through the issue convertible preference shares prior to the Group's admission to AIM, which converted into Ordinary Shares in August 2013. There is no restricted cash as at 30 June 2014.

For further information about the convertible preference shares, please refer to the consolidated financial statements of the Company as at and for the year ended 31 December 2013.

8. Subsequent events

On 15 August 2014, the RCI announced the completion of the acquisition of 100% of the Ordinary Share capital of Exxelnet Solutions Pte Ltd ('Exxelnet'), a Singaporean web development firm, for a total aggregate consideration of circa £0.95 million of which half will be paid in cash and half in new ordinary shares of RCI.

In order to fund the cash required to complete the acquisition and to provide further working capital, RCI announced that, through a placing and subscription of 1,111,112 ordinary shares of nil par value at 54p per ordinary share, it has raised £600,000 (RM3,235,192) before expenses from both existing and new shareholders.