Preliminary results

Fusionex International plc

("Fusionex" or "the Company" or "the Group")

Preliminary results for the year ended 30 September 2013

Fusionex, an award-winning and market leading international provider of enterprise software specialising in Analytics and Big Data solutions, is pleased to announce maiden full year results for the year ended 30 September 2013.

Financial Highlights:

Operational Highlights:

· Launch of GIANT, the Company's Big Data Analytics software solution in December 2013

· Strategic partnerships signed with Cloudera and Hortonworks, two leading Hadoop distribution platform providers, which in conjunction with GIANT provide a complete enterprise Big Data offering to organisations

· Client renewal rate in excess of 95% with continued demand for the Company's products

· A positive order book with a 35% increase in new customers

· Investment in R&D fuelling innovation and customer traction

· Strategy to broaden geographical reach showing positive results, products being particularly well received in Asia Pacific, UK and US

· Plan to invest and develop indirect channel (partner channel network) to capitalise on market opportunities and to reach out to a wider audience, in a scalable way

Ivan Teh, Chief Executive of Fusionex commented:

"Our first year as a listed Company has proven to be a period of significant development for Fusionex, not only have we had a strong year financially but we have also taken the business through a period of significant growth.

"Our IPO in December 2012 has aided this development so far and we are confident that the launch of our Big Data Analytics solution, GIANT, will be a key catalyst for further progress and is expected to yield positive sales momentum in the near term."

For further details:

Fusionex

Operational Review

Introduction

The last twelve months have been a significant period of development for the Company, highlighted both by the Group's successful listing on AIM in December 2012 and a solid 12 months of trading. The Group's strong financial performance and the on-going development of its software solutions, which now includes the successful launch of its Big Data Analytics product, GIANT, in December 2013, leaves the Group well placed to continue delivering success.

Revenue during the period grew by 42% to RM44.4 million (2012: RM31.3 million) while the Group's Profit Before Tax (PBT) grew from RM15.0 million to RM20.5 million. EBITDA grew to RM22.1 million (2012: RM 16.4 million) and Profit After Tax (PAT) reached RM 19.0 million (2012 RM 13.1 million) an increase of 45% over the same period.

The Board intends to announce an interim dividend for the year ending 30 September 2014.

Market Overview

Demand for Fusionex's solutions remains high. Gartner has predicted that Business Intelligence and Analytics will remain as the top focus for CIOs and this trend is set to continue through to 2017. Previously, Gartner mentioned that the top four business priorities are increasing enterprise growth, delivering operational results, reducing enterprise costs and attracting and retaining new customers. These priorities are what Fusionex's products and solutions are designed to address.

"Major changes are imminent to the world of BI and analytics," said Roy Schulte, vice president and distinguished analyst at Gartner. "As the cost of acquiring, storing and managing data continues to fall, companies are finding it practical to apply BI and analytics in a far wider range of situations."

Fusionex outperformed market trends in the period ended 30 September 2013 by delivering more than 40% growth (Gartner reported a flat worldwide IT spend in 2013). Moving into 2014, Gartner forecasts that Enterprise software spending will total $320 billion, growing 6.8 % on 2013. Gartner also predicts that Business Intelligence and Analytics will remain a top focus for CIOs through to 2017.

Growth Strategy

The Company has a clear growth strategy, as outlined below, which is being pursued by the management team. These are as follows:

· Focus on product development in order to expand its software solutions portfolio by building out the functionality and features surrounding its products and solutions

· Leverage new opportunities around the launch of the Company's Big Data Analytics product offering - GIANT

· Target new customers in existing markets by developing sales and marketing strategies and by providing further investment in sales executives and branding activities

· Expand Fusionex's talent pool by recruiting skilled personnel for enterprise sales, marketing and R&D.

· Expand product reach within Fusionex's existing client base by encouraging greater levels of cross-selling and up-selling

· Focus on geographic expansion by strengthening its presence in Singapore and Thailand and establishing a presence in Hong Kong, Greater China Region, Indonesia, Vietnam, Philippines, and Australia

· Increase operational footprint in Malaysia, a core home market

· Establish a partner channel network to widen Fusionex's reach to a wider audience and introduce an indirect sales channel

Operational Review

Fusionex finished the financial year strongly, growing both revenues and profit, and continues to see good levels of demand for both products and services. The Company's listing on AIM continues to drive momentum for the business providing a significant catalyst for enhancing the Company's profile globally whilst strengthening the balance sheet, underpinning investment in both people and products. There has also been a near doubling of new business leads witnessed since the IPO, in particular for larger contract values spread over longer time periods.

Renewal rates have also stayed strong with over 95% of Fusionex's clients renewing their contracts this year. This excellent customer retention also provides an opportunity for the business to cross-sell the new Big Data offerings to the existing client base, a significant organic growth opportunity for the Group.

Management are also seeing an increasing openness from its customers towards a subscription based revenue model. The Group now offers this SaaS ('Software as a Service') model and this option highlights the impact of GIANT and the significant opportunity to upsell the product across multiple customer channels.

During the period, management has made good progress delivering the Group's stated growth strategy of broadening Fusionex's geographical reach and continuing to develop its Big Data offerings and capabilities. The Group's business pipeline remains strong with new customer mandates such as Schlumberger, China Light & Power, UEM Sunrise, Volvo, Toyota, Mitsui, Hitachi, Jones Lang LaSalle, Tune Group, Guinness and many more being secured during the period. The UK and US are proving to be robust markets for Fusionex, while the Asia Pacific region has shown significant growth where Fusionex's brand and product recognition is high.

Sectors which have provided particularly consistent levels of growth include Travel & Hospitality, Leisure and Retail. These specific sectors demonstrate the strength of consumer spending in the Asia Pacific region and the growing need for our customers to analyse more complex and varied data in an optimised way. Fusionex believes that established clients in these sectors will also provide a significant opportunity for GIANT and are already in active discussions to embrace our product.

Through a period of significant investment and product transition Fusionex has seen further traction coming from broader geographical markets and sectors. For example, the new Hong Kong office secured its first client during the period and is now acting as a gateway to the mainland Chinese market. The Group also continues to build its business within the more mature markets in Europe and the United States, where it has generated strong revenues in the period.

This on-going demand is further strengthened by increased awareness of Fusionex's brand and product offerings, particularly across Asia Pacific, where Fusionex recently won Microsoft's Asia Pacific Award for Business Intelligence, marking the second consecutive year that Fusionex has earned the distinction of being recognised as a key Microsoft Business Intelligence Partner, highlighting the quality of its BI and Analytics product.

The Group has won numerous awards in 2013 including the Data Analytics & Innovation Award at the Big Data World Asia event, and the SiTF awards for Best Application and Best Emerging Technology. In November 2013, Fusionex was also awarded the prestigious Asia Pacific ICT Alliance (APICTA) Award for the highly coveted Best Application Tools and Platform category. APICTA is the largest ICT alliance in the Asia Pacific region, currently comprising of more than 15 key member economies including Australia, Brunei, Hong Kong, India, Indonesia, Korea, Macao, Malaysia, Philippines, Singapore and Thailand. The Best Application Tools and Platforms category was highly competitive as it was also a category for Analytics and Big Data providers to showcase their solutions.  

Launch of GIANT

GIANT sets a new benchmark in functionality and access to Big Data Analytics. It is a crucial step forward for Fusionex that is part of the Group's roadmap to evangelise how people and organisations use Big Data. The Group believes that GIANT is a disruptive, innovative product that will help tame the Big Data challenge.  

In conjunction with the commercial launch of GIANT, Fusionex also announced a strategic partnership with two of the most established Big Data distribution platform providers, Cloudera and Hortonworks, providing a significant route to market. Cloudera and Hortonworks provide world renowned Hadoop distribution (distro) platforms, while GIANT offers unique and powerful Big Data Analytics capabilities. Together this partnership creates a complete enterprise Big Data offering which Fusionex believes will be a positive move for the business in the generation of cross-referral opportunities.

Key features of GIANT include:

· A simple, user friendly interface which bridges the gap between business and technology through advanced visualisation and simple 'drag & drop' and 'point & click' options instead of coding requirements

· With GIANT, users are shielded from programming complexities - No ETL or Map Reduce, Pig, Hive Programming

· GIANT processes and seamlessly integrates data from a multitude of sources including structured, semi-structured and unstructured data

· GIANT is hardware agnostic and can be deployed to either HP, DELL or IBM servers

· GIANT can be deployed on premise, in the 'Cloud', or even used in a hybrid environment

· Leverage existing platforms, such as open source Apache Hadoop, while utilising GIANT's Big Data Analytics and processing capabilities.

· GIANT supports multiple devices and form factors, and therefore results and visualisation can also be rendered and accessed from virtually any device, e.g. iPhone, Android, Tablet, PC, laptop etc.

It is Fusionex's view that 'simplifying', 'humanising' and 'making sense' of Big Data, in a cost-optimised and commercially feasible way, will go a long way in helping organisations derive true business value. Fusionex GIANT is designed to be deliberately intuitive and specialised training is not required to connect to the designated data sources and derive meaningful and valuable business insights. Management believes the launch of GIANT is a significant milestone for the Company, and the Group is in advanced negotiations with a number of new and existing customers.

Sales Channel Partnerships

Traditionally Fusionex has used direct sales initiatives to drive revenue growth but is now in the process of establishing an indirect sales channel. Following the launch of GIANT, Fusionex established strategic partnerships with two leading platform distribution providers: Hadoop and Hortonworks. Fusionex is planning to actively pursue indirect sales partnerships with reputable global, regional and local partners to help accelerate the significant sales growth potential of GIANT.

The Group's strategic plan is to establish one to two key partnerships over the current financial year which management believe has the potential to deliver substantial business value and synergy.

Research and Development

Research and development remains a key business driver for the Group as it seeks to maintain its competitive advantage in delivering software solutions. The on-going development of the Group's Big Data software product GIANT has been a significant milestone but remains a key focus for the team.

The Group's R&D team will continue to develop new features, with GIANT providing a self-service mode now in development.

Current Trading and Outlook

The last 12 months have seen the Group deliver a strong financial performance with demand for its software products gathering significant momentum. The period has seen large levels of investment and product development which will take the business through important changes and growth in the near term. The successful launch of GIANT is expected to be a significant catalyst for the Group with a number of active discussions already taking place with prospective and existing customers.

Key sectors such as Retail, Travel & Hospitality and Leisure have shown strong growth momentum and offer good opportunities for cross-selling within existing customers.

The Board remains confident that continued investment in sales and marketing initiatives, sales pipeline conversion and the creation of an indirect sales channel will continue to accelerate growth.

Financial Review

The Group has been progressing well for the year under review following the Company's admission to the AIM in London on 18 December 2012 with double digit percentage increases in key revenue and profitability metrics.

The Group generated a net profit of RM19million on revenue of RM44.4million for the financial year ended 30 September 2013.

Revenue

Group revenue increased by 42% to RM44.4 million (2012 : RM31.3 million) with 83% of the Group's total revenue contributed from sale of products.

Services revenue declined by 21% which is in line with the Group's strong focus on products instead of services. The Group has also encouraged its customers to leverage on its self-service tools to implement solutions. This increased focus on products affords the Group to accelerate its product development which will bring immediate and long term growth.

The Asia Pacific region, being a burgeoning economic region, was the main contributor to the Group's revenue and its contribution amounted to 78% of the total revenue. In addition to the Malaysia, Singapore and Thailand markets, the Group has expanded to Greater China, Indonesia and Australia as planned during the Group's admission, culminating in further opportunities in new markets.

Gross Profit

Gross profit of the Group has increased by 48% over the year to RM34.3million (2012 : RM23.2million). The amortisation cost for the year has increased to RM1.1million from RM0.63million (2012) with product enhancements costs that had been capitalised being charged out as amortisation over the year when the relevant product enhancements were commercialised in the year.

EBITDA and profitability

EBITDA for the period was RM22.1million (2012 : RM16.4million) representing an increase of RM5.7million (35%). Even with the increase in depreciation expenses for the year - due to higher computer equipment and peripherals being purchased for the increase in staffing and sales and implementation activities, and amortisation expenses for commercialisation of the product enhancements - the Group has been able to increase its operating profit (profit before tax) by RM5.4million to RM20.5million (2012 : RM15.1million) representing an increment of 36%.

Net profit (profit after tax) for the year has increased by RM5.9million (45%) from last year to RM19.0million (2012 : RM13.1million). Notwithstanding the increase in the costs and expenses of the Group, net margin improved marginally to 43% (2012 : 42%).

Taxation

The Group operates in certain geographical areas in which the income generated has been exempted from taxation or subject to tax allowances. As a result, the Group was subject to minimal taxation which resulted in the effective tax rate of the Group being in the region of 7% (2012 : 13%).

Table - Selected Income Statement Extract

Cash flow

Flotation of the Group in December 2012 resulted in the Group raising GBP12million gross. The net proceeds were being used principally to fund product development, expand the Group's sales capabilities and provide additional working capital for the Group's operation.

The Group continued to generate strong cash flows from its operations with stronger inflows in the second half of the year. In March 2013, the Group acquired a Grade A MSC status office unit of 38,000sq ft at Plaza 33, for the Group's head office in Malaysia for a consideration of RM27.4million. The MSC status head office will be used to support the key operational initiatives of the Group which includes R&D for the new products and enhancements, sales and marketing and geographical expansion.

With the strengthening of the Group's continuing operations, cash generated from operations for the year has improved and is standing at RM62million for the financial year of 30 September 2013.

The principal movements in the net cash were as follows:-

Borrowings and Bank Facilities

Total borrowings of the Group have increased by RM21million to RM27m (2012 : RM6million) principally from the drawdown of the mortgage loan to acquire the MSC status Grade A office unit for the Group's head office in Malaysia. The acquisition of the office unit was funded by internal funds of RM6m and bank borrowings of RM21million.

Equity

The equity of the Group was strong for the year and the equity balance stands at RM86.5million (2012 : RM18.7million) with the continuous profit improvement of the Group and strengthening of the Group's balance sheet. Earnings per share (EPS) of the Group has increased to RM0.45 (2012 : RM0.36).

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (CONTINUED)

NOTES TO THE PRELIMINARY ANNOUNCEMENT

For the year ended 30 September 2013

1. Basis of preparation

The financial information set out in this preliminary announcement is abridged and does not constitute the Company's statutory financial statements for the year ended 30 September 2013. The financial information has been extracted from the financial statements for the year ended 30 September 2013, which were approved by the Board on 14 January 2014 and on which the auditors have reported without qualification. The 2013 Annual Report will be distributed to shareholders and made available on the Company's website at http://www.fusionex-international.com. It will also be filed with the Companies Registered Office.

The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union ("EU") issued by the International Accounting Standards Board ("IASB"), including related interpretations issued by the International Financial Reporting Interpretations Committee ("IFRIC") and using accounting policies which are consistent with those applied in the Admission Document.

IFRS does not provide specific guidance on accounting for common control transactions. Therefore, the Directors have selected an accounting policy using the 'hierarchy' described in paragraphs 10-12 of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors. The hierarchy permits the consideration of pronouncement of other standard-setting bodies. The Directors have adopted a policy of accounting for business combinations between entities under common control in accordance with guidance under US GAAP 805-10-15. This guidance produces a result that is similar to pooling. The consolidated accounts have therefore been prepared as if each of the entities within the Group at 30 September2012 had been held by Fusionex International Plc from the earlier of 1 October2011 or date of incorporation. The difference between the carrying value of the investment and nominal value of the shares of subsidiaries upon consolidation under the merger accounting principles.

The consolidated financial statements are presented in RM, which is the Group's presentation currency.

2. Property, plant and equipment

During the year ended 30 September 2013, the Group acquired assets amounting to RM28,559,175 (2012: RM410,000).

3. Goodwill on consolidation

During the financial period, the Group assessed the recoverable amount of the goodwill and determined that no additional impairment is required. This assessment was done by comparing the gross profit to the value of goodwill for the entity whose acquisition gave rise to the goodwill.

4. Intangible assets

The intangible assets relate mainly to staff costs.

NOTES TO THE PRELIMINARY ANNOUNCEMENT (CONTINUED)

For the year ended 30 September 2013

5. Share capital

Fusionex International Plc was incorporated on 1 October 2012, with an authorised share capital of £1,000 divided into 1,000 ordinary shares of £1.00 each of which 2 ordinary shares of £1.00 each were subscribed by the shareholders.

On 15 October 2012, the Company passed a special resolution to convert itself to a no par value company with an unlimited share capital which is divided into ordinary shares with no par value.

On 14 November 2012, the Board approved the allotment and issue by the Company, on the date of completion of the Share Swap Agreement, of an aggregate of 34,999,998 Ordinary Shares, to certain of the holders of the share capital of Fusionex Corp Sdn. Bhd. and Adv Fusionex Sdn. Bhd. in consideration for the transfer of the entire issued share capital of Fusionex Corp Sdn. Bhd. and Adv Fusionex Sdn. Bhd. respectively to the Company. The aforementioned 34,999,998 Ordinary Shares were allotted and issued on 3 December 2012.

On 10 December 2012, the Board approved the allotment and issue by the Company on 17 December 2012 of 866,947 Placing Shares at the Placing Price (being the First Tranche Placing Shares and the Second Tranche Placing Shares) and the allotment, conditional on Admission, on 17 December 2012 of 7,133,053 Placing Shares (being the remaining Placing Shares), as well as the issue of these 7,133,053 Placing Shares on 18 December, in each case, at the Placing Price.

On 10 December 2012, the Board approved the allotment and issue by the Company, conditional on Admission, of 333,333 Ordinary Shares at the Placing Price to certain employees of the Group pursuant to the Employees' Share Scheme. The number of issued Ordinary Shares immediately following Admission amounted to 43,000,000.

The expenses in relation to the above corporate exercise amounting to RM6.6 million have been recognised in equity.

NOTES TO THE PRELIMINARY ANNOUNCEMENT (CONTINUED)

For the year ended 30 September 2013

6. Income tax expense

Tax expense is recognised based on an annual tax rate for the full financial year applied to the pre-tax income of the year.

7. Dividends

NOTES TO THE PRELIMINARY ANNOUNCEMENT (CONTINUED)

For the year ended 30 September 2013

8. Capital commitment

 Authorised capital expenditure contracted but not provided for in the Interim Financial Statements is analysed as follows:-

9. Earnings per share

The calculation for earnings per share, based on the weighted average number of shares, is shown in the table below:

Year ended 30 September

2013 2012

RM RM

Profit after tax attributable to owners of the Group 19,011,798 12,739,649

Weighted average number of shares:

Basic 41,940,639 34,999,998*

Diluted 41,940,639 34,999,998*

Earnings per share

Basic 45.30 36.40

Diluted 45.30 36.40

* Based on the number of ordinary shares issued pursuant to the corporate exercise in relation to admission onto AIM.

NOTES TO THE PRELIMINARY ANNOUNCEMENT (CONTINUED)

For the year ended 30 September 2013

10. Segment analysis

IFRS 8 requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the chief operating decision maker as defined in IFRS 8, in order to allocate resources to the segment and to assess its performance.

All other segments primarily comprise income and expenses relating to the Group's administrative functions. Interest income and interest expense are not allocated to segments, as this type of activity is driven by the central treasury function, which manages the cash position of the Group. Accordingly, this information is not separately reported to the Board for each reportable segment.

Operating segments are prepared ina manner consistent with the internal reporting provided to the Executive Directors as its chief operating decision maker in order to allocate resources to segments and to assess their performance. Formanagement purposes, the Group is organised into business units based on the products and services provided.

Operating segments

 Geographical location

NOTES TO THE PRELIMINARY ANNOUNCEMENT (CONTINUED)

For the year ended 30 September 2013

10. Segment analysis (continued)

Other segmental reporting