Preliminary Results

Fusionex International plc

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

Preliminary results for the year ended 30 September 2016

Fusionex (AIM: FXI), a multi-award winning international software solutions provider specialising in Big Data Analytics, Artificial Intelligence ("AI") and the Internet of Things ("IoT"), is pleased to announce its preliminary results for the year ended 30 September 2016 after a period of continued strong progress.

Financial highlights

· Increasing GIANT sales resulting in a 23% increase in revenue to RM94.6m (RM77.0m: 2015)

· Gross profit increased 26% to RM74.0m (RM58.9m: 2015), presenting a gross profit margin of 78%

· EBITDA* significantly ahead of expectations, with RM15.4m achieved (RM35.0m: 2015), despite significant planned investments in marketing, product development and geographical expansion

· Cash and cash equivalents of RM94.2m, up from RM57.7m in 2015

· Cash conversion was RM17.5m representing 114% of EBITDA

· Debtor collection in 2016 decreased to 78 days from more than 100 days in 2015. Out of the RM20.1m of outstanding trade receivables at the financial year end, circa 85% has been collected to date

*EBITDA (RM million) is derived from PBT (RM4.6m: 2016; RM28.4m: 2015), plus amortisation of intangible assets (RM7.7m: 2016; RM4.6m: 2015), plus depreciation of property, plant and equipment (RM2.7m: 2016; RM2.2m: 2015), plus impairment loss on trade receivables (RM0.7m: 2016; nil: 2015), minus net interest income (RM0.3m: 2016; RM0.2m: 2015).

Operational highlights

· More than three-fold increase in Big Data Analytics product (GIANT) customers to 115 (36: 2015), underpinning strong execution in sales and delivery

o Recent customer wins / new partners include the following:

§ Significant win with the Malaysian Stock Exchange

§ Multi-million dollar win with an Asian resort

§ Million dollar contract with a global media conglomerate

§ Strategic partnership signed with US-based Hadoop industry leader Cloudera

§ Million dollar win with an Asian bank

o Planned increased investment in marketing and brand awareness underpinning increases in direct and indirect sales

o Continuing sales momentum with additional 48 customers in first four months of the financial year to 31 January 2017 (163 total cumulative GIANT customers as at 31 January 2017)

o Customers expanding across multiple sectors including retail, manufacturing, travel & hospitality, financial services and healthcare

· Successful transitioning from a predominantly licence-based sales model, to subscription-based model ongoing (FY2016: 37% of sales, RM35.0m; FY2015: 22% of sales, RM16.2m), up by more than 100% in subscription revenue. Coupled with Maintenance & Services revenue, the recurring revenue for FY2016 stood at more than 60% of total revenue. This:

o Demonstrates a rapidly expanding subscription customer base

o Underpins strong growth over the coming financial periods with a very strong recurring revenue model

· Client retention remains high at more than 90%

· Investments in geographical expansion

o Expanded to the Philippines, a bustling market with 120 million people

· Continued investments in Research & Development ("R&D") of GIANT:

o Capitalisation amounted to RM26.4m in 2016, representing 28% of total sales for the year (in line with our budget of 25% - 30%). Investments in R&D is expected to continue for the near term, as there is significant advancement in this fast growing space of Big Data, the Internet of Things, Machine Learning and Artificial Intelligence. Amortisation recorded in 2016 amounted to RM7.7m. This is circa 30% of the capitalised amount for 2016

o On track to launch Fusionex GIANT 2017 with major enhanced features to provide Big Data solutions for SME and large enterprises. GIANT 2017 will also address different price points and budgets, equipped with the ability to support any industry and any data

· Continued expansion of selected, quality channels to market:

o Blue-chip companies within our partner channel network providing international sales opportunities (Dell, Cloudera, Microsoft, Avnet)

o Channel partners contributing over 30% of revenue

Ivan Teh, Chief Executive of Fusionex, commented:

"We are delighted by the progress made in 2016. Fusionex has made excellent strategic progress following the major enhancements to GIANT in 2016, which has enabled the Company to expand to new market segments and increase our customers worldwide.

This progress has underpinned our strengthening financial and market position, as well as demonstrated that our focused investment in research & development and marketing is enabling Fusionex to accelerate growth and leverage the Big Data opportunity.

With the impressive momentum continuing in the first four months of the year, a solid pipeline of new customers and the launch of our market-leading GIANT 2017 product on the horizon, the Company is excited and confident in its ability to realise its significant growth opportunity."

- Ends -

For further details:

Fusionex

Chairman's Statement

I am delighted to report on another very successful year for the Company during which, in spite of many global instabilities, we have seen significant traction with customers for our Data Analytics solutions whilst continuing to make substantial investments in our technologies to ensure we maintain our competitive edge.

During the year, our revenues grew by 23% to RM94.6 million, driven by new customer wins for our flagship end-to-end Data Analytics software GIANT. It is very encouraging to note also that our customer base continues to expand across multiple sectors, including retail, travel, media, hospitality as well as the financial services and healthcare sectors, all of which offer tremendous opportunities and demonstrate the extensive market reach for our product offerings.

As anticipated, 2016 was a year of significant investment for the Company as we put in place the building blocks for accelerating growth and positioning the Company to be able to take full advantage of the fast emerging opportunities for Big Data solutions, of which Fusionex remains one of the leading providers. The investments made, utilising the 2015 funds raised, were in anticipation that the Company would be willing to trade-off short term profitability during this investment period to pursue mid to long term sustainable growth. In the event EBITDA achieved was RM15.4 million which was well ahead of expectations, demonstrating the quality of our team and their ability to carefully manage resources.

Our balance sheet remains very strong with cash and cash equivalents of RM94.2 million aided by a significant improvement in debtor days in trade receivables during the year. Unfortunately, however, the unexpected fall in the value of the Pound Sterling during the year did have an adverse impact on our bottom line, whereas in previous years the impact of currency fluctuations has been positive.

Once again, the Company has been recognised by many trade bodies and associations as a leader in its sector. Fusionex was awarded the highly coveted Asian-Oceanic Computing Industry Organisation (ASOCIO) Award for Outstanding ICT Company for the second year in a row. Additionally, Fusionex was awarded the PIKOM Leadership Excellence Award by the National ICT Association of Malaysia, as well as the Award for Outstanding Excellence by the Malaysian Retail Chain Association (MRCA). Fusionex also received special mention in Gartner's 2016 Magic Quadrant Report, where we are listed as a "vendor of interest" in Real-Time Process and Operational Intelligence.

We are constantly looking at ways to improve our technologies, particularly their ease of use and intuitiveness so that they become even more productive tools for users. This year we are launching our next generation Big Data Analytics software solution, Fusionex GIANT 2017, which we are confident will address the ever-growing demand for data analytics in real business applications, as well as for AI components in a world of increasing prevalence of robotics, voice command-activated technologies and even driverless cars.

2016 was a year of continued growth, technological innovation and investment in our people and infrastructure. I am very pleased to report that the sales momentum we experienced in 2016 has continued strongly in 2017, and I am confident that this will be reflected in an ever-improving set of results as the year progresses.

I would like to take this opportunity to thank all of our staff for their outstanding achievements and hard work over the past year. I would also like to thank you, our shareholders, for your continued support.

Chief Executive's Review

Overview

In 2016 Fusionex worked towards and laid a very strong foundation for the future. We continued to invest in our core operations, i.e. our award winning Big Data Analytics, IoT and AI offerings; we invested in geographical expansion to new locations; we strengthened our partner channel network; we also increased our brand awareness and marketing reach. All this and more has propelled the Company towards a new level of international growth and opportunities.

Winning a raft of awards and continuing our strong momentum, the Fusionex team worked in unison to exceed expectations. We also welcomed new clients on board while maintaining a high client retention rate of more than 90%, thanks to the increasing adoption of our flagship Big Data Analytics product (GIANT). Despite economic concerns emanating from Europe and leadership changes in the United States, Fusionex has maintained its resilience, consistency and focus.

Humanising Technology

Fusionex has been making waves in industries beyond the typical reach of our counterparts. We believe technology has the ability to provide solutions in virtually every sector, ranging from the physical realm of manufacturing and city planning, the psychological realm of retail customer behaviour, or even the digital realm of financial risk management.

From an industry outlook perspective, IT spend is forecasted to maintain a stable trajectory this year. Global Research house Gartner has forecasted worldwide IT spend to reach $3.5 trillion in 2017. Software and IT services spend is projected to grow to $357 billion and $943 billion respectively in 2017.

Our upcoming, new and vastly improved Big Data Analytics software, Fusionex GIANT 2017 (previewed in Community Technology Preview (CTP) mode in the fourth quarter of 2016), is a game-changing solution. It features major upgrades and enhancements compared to its predecessor, which includes AI components that customers need increasingly in this data-driven era.

According to International Data Corporation (IDC), worldwide adoption of AI across a range of industries would result in AI solutions expanding by a compound annual growth rate (CAGR) of 55.1% over the period of 2016 - 2020. Such solutions are expected to drive worldwide revenues from $8 billion in 2016 to more than $47 billion in 2020.

Major use cases for AI and Big Data initiatives, which attract the most investment and attention, include but are not limited to automated customer service agents, diagnosis and treatment systems, fintech, smart healthcare, smart manufacturing, smart cities and nations, marketing analytics and fraud analysis, just to name a few.

To ride this next wave of the 4th industrial revolution, Fusionex continues to strive to make it easier for users at all levels to carry out data analysis, cognitive computing and AI via an intuitive interface, where users are able to derive insights from their data by just asking pertinent questions - effectively talking and interacting with the software like one would via a personal consultant or data officer.

Throughout 2016, Fusionex GIANT has been very well received, particularly from the retail, travel and hospitality, manufacturing, smart buildings, smart cities as well as financial services industries. In 2017, we target to release an exciting next-generation version of GIANT.

Fusionex continues to make strategic investments in our R&D to derive better ways to humanise technology, creating a data-driven culture for any individual or organisation that it comes across. Staying ahead of market trends, our R&D team constantly looks at ways to make our technology smarter and more user-friendly for everyone.

Our achievements to date

We never rest on our laurels. Clinching awards and receiving valued recognition has spurred our team to strive for even greater achievements. We do not settle for being second best.

From a global front, Fusionex was cited as a vendor of interest in Gartner's 2016 Magic Quadrant report, particularly in "Real-Time Process and Operational Intelligence". The numerous awards won by Fusionex in 2016 include winning the Outstanding ICT Company award from the Asian-Oceanian Computing Industry Organization (ASOCIO) for the second consecutive year.

2016 also saw the expansion and strengthening of the Fusionex Partner Network. Cloudera joined forces with Fusionex via a strategic partnership that allows both companies to extend their reach across the global marketplace.

These milestones form but a few of the many achievements that Fusionex has attained in the last financial year.

Growth strategy

It is noteworthy that we expect the upcoming release of GIANT 2017 to be a game changer and a catalyst for further growth, as the new platform will cater to users and customers of all shapes and sizes, be it Enterprise customers, SME customers or even smaller firms. GIANT 2017 will be made simple and will come in different editions. There are already customers trialing GIANT 2017 and we expect them to convert to full users shortly after we officially launch this exciting platform.

Our enterprise sales continues to grow consistently, whereas a newer SME segment is showing tremendous potential and growth trajectory (FY2016 recorded more than 300% growth in the number of SME customers). This is set to be the impetus of our growth as the SME market not only contributed in terms of customer count, but also strong revenue.

Future outlook

Amidst economic concerns and cautious market sentiments, Fusionex more than delivered on its promises, grew steadily in 2016 and was again ahead of expectations.

The Group's strong recurring revenue and solid customer base is poised to increase even further with the many new customer wins and our planned transition to a primarily SaaS based company. We maintain our focus in constantly investing in innovation to keep our offerings exciting, fresh, and ahead of the market.

We see 2017 as a very promising year. If we capitalise on the opportunities appropriately; if we stay true to our course of investing towards ingenuity, quality and innovation; and if we maintain our principles of being a forerunner and leader in our space, we are very confident that we will accomplish much more in the upcoming year and the years to come.

Financial Review

For the year under review, Fusionex has grown the Group's revenue with a double-digit growth rate while maintaining its positive contribution in terms of the Group's profitability.

Revenue

Group revenue has continued to grow and has increased by 23% to RM94.6 million. Revenue contribution from products amounted to 88.6% of the total annual revenue, with the balance from professional services.

The Group has continued to expand its market presence in the Asia Pacific region. Asia Pacific remains the Group's market stronghold and the contribution from this region amounted to 81% of the total revenue. This positive growth of the Group's revenue and market share has been attributed to its strong customer wins, coupled with the rich functionalities and features of the Group's Big Data Analytics offering. Contributions from its partner channel networks that have been implemented by the Group as another channel to reach targeted markets, have also had a positive impact on the growth of its revenue base.

The Group's gross profit has increased by 26% to RM74.0 million, from RM58.9 million in 2015. For the financial period, the Group has continued to invest in research and development to develop a new version of GIANT as well as to continuously enhance and expand the features and functionalities of the Group's core products and offerings. A total amount of RM26.4 million has been expended and capitalised by the Group into its research and development expenditure for the year.

EBITDA and profitability

Contrary to initial estimates for the relevant financial year, the Group has maintained positive EBITDA for the financial year under review, where its EBITDA stands at RM15.4 million (2015: RM35.0 million). In achieving the Group's plan to develop newer and better functionalities for its core products alongside expansion into other market regions in Asia Pacific. The reduction in profitability arose as a result of the Group increasing its expenditure towards marketing programmes and events, procuring of equipment, infrastructure, and cloud and other IT services, geographical and office expansion as well as into the development of its core products all in accordance with its initial plans. The Group still maintains a positive net profit for the year of RM1.4 million despite the significant increase in investments in the business for FY2016.

Cash flow

The Group has generated positive cash flows from its operations. The well-managed operations of the Group during the financial year have resulted in the Group being able to maintain strong cash and cash equivalents of RM94.2 million at 30 September 2016 (2015: RM57.7 million).

Key performance indicators

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

Taxation

Income of the Group continues to be exempted from tax in certain countries of operations and for other non-tax exempted countries higher tax allowances were granted.

Borrowings and bank facilities

Total borrowings of the Group have decreased for the financial year to RM19.4 million. The decrease in the borrowings was mainly from the repayment of the term loan facilities for the Group's head office.

Equity

The total equity of the Group stands at RM194.2 million (2015: RM128.7 million). Earnings per share (EPS) of the Group continue to be positive at RM0.03.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 30 SEPTEMBER 2016

Notes to the financial information

For the year ended 30 September 2016

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 2016. The financial information has been extracted from the financial statements for the year ended 30 September 2016, which were approved by the Board on 13 March 2017 and on which the auditors have reported without qualification. The 2016 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) issued by the International Accounting Standards Board (IASB) as adopted by the European Union (EU), including related interpretations issued by the International Financial Reporting Interpretations Committee (IFRIC).

The accounting policies adopted by the Group are consistent with those of the previous financial year except in the current financial year, the Group has adopted all the new and revised standards and Interpretations of IFRS that are effective for annual periods beginning on or after 1 October 2015. The adoption of these standards and interpretations did not have any effect on the financial performance or position of the Group and the Company.

The directors proposed a single payment of an interim dividend and do not propose a final dividend in respect of the year ended 30 September 2016 (2015: nil).

2. Property, plant and equipment

During the year ended 30 September 2016, the Group acquired assets amounting to RM18,093,638 (2015: RM5,032,700).

3. Goodwill on consolidation

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

4. Intangible assets

5. Stated capital

The Company has an unlimited authorised share capital of ordinary shares of no par value.

On 15 October 2015, the Company announced a placing of 4,300,000 new ordinary shares at 325 pence per share to raise a total of GBP13.975million. The new ordinary shares represent 10% of the existing share capital of the Company.

6. Income tax expense

A reconciliation of income tax expense applicable to the profit before taxation at the statutory tax rate to the income tax expense at the effective tax rate of the Group is as follows:

7. Earnings per share

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

8. Dividends

9. Capital commitment

Authorised capital expenditure contracted but not provided for in the consolidated financial statements is for leasehold improvement and totals RM1,060,079 (2015: RM419,268).

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.

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 in a manner consistent with the information provided to the chief operating decision maker (the Executive Directors) in order to allocate resources to segments and to assess their performance. For management purposes, the Group is organised into business units based on geographical locations.

Geographical location

(1) Segment assets comprise total current and non-current assets less unallocated assets.

(2) Mainly related to central administrative functions and central treasury function's assets/liabilities.

(3) Segment liabilities comprise total current liabilities and non-current liabilities less unallocated liabilities.

(4) Mainly related to Asia Pacific intercompany sales.

Other segmental reporting

(1) Segment assets comprise total current and non-current assets less unallocated assets.

(2) Mainly related to central administrative functions and central treasury function's assets/liabilities.

(3) Segment liabilities comprise total current liabilities and non-current liabilities less unallocated liabilities.

(4) Mainly related to Asia Pacific intercompany sales.

Other segmental reporting

Business segments

Revenue for products relates to the sale of the Fusionex Data Management Platform and revenue derived from services relates to services provided by the Group to its clientele in association with the Group's Data Platform.

Major customers and partners

The following table outlines the number of customers and partners ("entities") in each year who individually represent in excess of 10% of the Group's revenue for that year:

* Entity A did not contribute in excess of 10% of the Group's revenue in 2015.

11. Subsequent events

On 22 December 2016, the Company announced that an employee benefit trust, the Fusionex Employee Benefit Trust (EBT), had been set up to incentivise employees of the Company and its subsidiaries through the award of a specified number of ordinary shares in the capital of the Company ("Awards").

The Awards shall not be granted to contractors or the Directors of the Company, and shall be subject to vesting and performance conditions.

The EBT subscribed for 7,095,000 new ordinary shares in the capital of the Company ("New Ordinary Shares").

Application was made for the New Ordinary Shares to be admitted to trading on AIM, and admission became effective in December 2016. Following admission, the Company's issued share capital consists of 54,395,000 ordinary shares.