Preliminary unaudited results

SyQic plc

("SyQic" or the "Group")

Preliminary unaudited results

SyQic plc (AIM:SYQ), a fast growing OTT provider of paid mobile video content across mobile and internet enabled consumer devices, today announces its maiden set of preliminary results for the year ended 31 December 2013.

Financial highlights

Key achievements since IPO

Jamal Hassim, Group Chief Executive Officer of SyQic, commented: "The Group has made considerable progress in terms of its technology development across both its YooMob and Yoonic platforms during the period. Following the pilot launch of the Yoonic OTT service in the UK in December 2013, we have now fully launched our OTT offering to the Bangladeshi community and are preparing for future launches to other migrant communities in the UK including Filipino, Nepalese, Polish, Turkish, Indonesian and Malaysian, amongst many others. At the same time, we have made substantial progress in increasing the breadth of our video content library to make our OTT service as compelling as possible.

"Our YooMob platform continues to grow from strength to strength in Asia. We continue to build new telco operator relationships on an ongoing basis, to provide branded video services to their subscriber bases. Whilst our relationships with telcos remain important in the short to medium-term, going forward we view our OTT business as the key growth driver and the avenue with the most potential.

"SyQic is operating in a market where market conditions are becoming increasingly conducive to consuming video content on mobile. In particular we believe that an increasingly mobile global population wants to maintain contact with their culture and uses video content to stay in touch.

"Drawing from our experience with the Bangladeshi OTT launch, we expect to be able to announce a programme of additional OTT launches in the coming months. At the same time, we anticipate adding to our content library as well as evaluating potential acquisition opportunities."

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Notes to Editors:

SyQic is a fast growing OTT (Over The Top) provider of live TV and on-demand paid video content across mobile internet-enabled consumer electronics devices such as mobile phones and tablets through its "Yoonic" platform. Yoonic utilises efficient mobile video streaming as its core offering and allows for close to high definition streaming, utilising adaptive bit-rate streaming technology that matches the available bandwidth through the Group's proprietary encoding methodology, and can stream as low as 80kbps.

The Group has access to over 40,000 hours of online video-on-demand content as well as over 200 live television feeds comprising English and International video content as well as content for a number of 'home markets.' The content is delivered through SyQic's platforms via a number of channels in the movies, drama, music, sports, news, lifestyle and general entertainment genres.

The Group, which is incorporated in Jersey and headquartered in the UK, already has a significant service footprint in the Philippines, Indonesia and Malaysia. The Group has recently launched an international OTT service for the Bangladeshi community in the UK and Malaysia, with Singapore and the Middle East to follow. The Filipino and other migrant content launches are planned in the near term for the UK, Europe, the Middle East and the Far East.

Chairman's statement

Business review

2013 was a transformational and very exciting year for SyQic, culminating in the successful admission to AIM on 4 December 2013. The Board was also pleased to announce the launch of Yoonic, SyQic's 'Over-the-top' ("OTT") mobile video streaming platform, as well as making considerable progress with partners in terms of content acquisition. The ground breaking Yoonic OTT service was launched, and the YooMob telco oriented platform was significantly enhanced during the period, with additional functionality and new innovations to the services being successfully carried out.

During the period, the Board made a number of strategic changes to the Group's routes to market. This was the result of considerable market research and obtaining customer feedback in order to refine the Group's offering to make it as compelling as possible to potential customers and has led to the Group targeting communities individually. This has had an unexpected benefit for SyQic as it means that launches can occur internationally on a simultaneous basis, thereby reaching as broad an audience as possible.

In response to the feedback that was obtained from the initial phase of the launch of Yoonic to the Bangladeshi community, the Group is adapting its model and refining its routes to market. Take up of the service has been very encouraging and there has also been substantial interest from retailers in the UK, Europe, the Middle East, Malaysia and Singapore to offer the service to their Bangladesh and other migrant customers.

IPO

SyQic was delighted to join AIM on 4 December 2013, having raised £3.2 million via Allenby Capital in an over-subscribed fundraise, of which £2.45 million was raised as new equity for the Company. The proceeds of the Placing, along with existing cash resources, are being used to launch the Group's services in the UK and continental Europe. These funds are also being utilised for the purposes of content acquisition, research and development, development of a new payment method, establishing local and regional distribution hubs and sales and marketing. The Board is pleased that these areas are being progressed since the IPO and will continue to be the focus of the Group's efforts.

Prospects for 2014

The Group is in an important stage of its development, and 2014 will see the continuing enhancement of both the YooMob and Yoonic platforms, and growth of landings and geographical footprint where the service is made available. The Board is pleased that the market environment for SyQic's services is very positive particularly as the consumption of data on mobile devices continues to grow, and the global migrant market that the Group is targeting is significant.

Appreciation

On behalf of the Board I would like to express my deep appreciation to the management and staff for their dedication and hard work in meeting the challenges for the past year and the successful IPO of the Company. I would also like to thank our investors, customers and partners for their strong support.

William Liu Wei Hai

Non-Executive Chairman

14 May 2014

Group Chief Executive's statement

Results

The Board is pleased to report the Group's maiden Preliminary Results on the back of an exciting year, which showed considerable growth in revenues to £4.71 million, from £3.91 million in 2012, an increase of 20%. Particularly pleasing was the fact that the second half of 2013 was very strong with revenues during the second half of 2013 almost double the revenues achieved in the same period in 2012. Profit before tax was £0.10 million (2012: £0.63 million), caused by an increase in investment in manpower as the roll out of Yoonic and YooMob evolve, as well as AIM transaction costs of £0.47 million. The slightly lower 2013 net profit can also be attributed to the Group's treatment of development costs that were fully expensed during the year as opposed to being capitalised and then amortised as has occurred in previous years in accordance with IFRS. Earnings per share excluding AIM transaction costs were 3.63 pence (basic) (2012: 4.15 pence) and 2.91 pence (diluted) (2012: 3.26 pence) and after AIM transaction costs totaled 0.64 pence (basic) and 0.51 pence (diluted).

The Group's net cash position is robust at £1.05 million as at 31 December 2013 (2012: £0.05 million), with total assets of £5.72 million (2012: £3.23 million). Trade receivables increased to £3.7 million from £2.3 million in 2012. Of this amount £3.3 million is owed by one customer with which the Group has agreed a repayment plan under which the full amount will be repaid in monthly instalments by June 2016.

The Board was pleased that the Group's successful admission to AIM on 4 December 2013 raised £3.2 million via Allenby Capital in an over-subscribed fundraise, of which £2.45 million was raised as new equity for the Company. As announced at the time of the IPO, these funds are being used to roll out the Group's Yoonic service internationally, and part of this has already been utilised in the successful launch of the Group's service to the Bangladeshi communities in the UK and Malaysia.

Yoonic launch

The Board was pleased to announce the pilot launch of Yoonic, the Group's OTT platform to provide live TV and on-demand paid video content to mobile devices, in the UK on 20 December 2013. Yoonic has efficient mobile video streaming as its core offering and allows for close to high definition streaming, with the ability to stream as low as 80kbps, and to scale very quickly.

Following this successful pilot launch, the Group has responded to the feedback and adapted its offering as a result. Key to this is the Group's shift from a general roll-out plan to a phased one with each launch being specifically targeted and focused on a particular migrant community. This has the advantage that each community can be reached simultaneously across the multiple territories in which SyQic operates meaning that the Group can reach significant numbers of potential users of the service for minimal incremental marketing spend.

This shift in focus from targeting a range of nationalities in one location, to targeting a single migrant community at a time across a number of territories, has been a significant one that refocuses the Group's marketing activities. Consequently the Group is developing individual sites for each targeted community, addressing their specific requirements (including language needs), and is launching these sites internationally, thereby reaching much larger potential audiences. This has meant some renegotiation with content providers to amend the terms under which the content can be distributed but this has been completed successfully and future agreements will be entered into on this basis.

Since the period just ended, the other significant development in the roll out of Yoonic has been in the area of payment options. The addition of a PIN based scratchcard payment method was announced on 27 March 2014, and is a significant step forward in terms of ease of use of the platform. From the feedback obtained during the pilot launch of Yoonic, it has become apparent that it is considerably more attractive to have a pre-payment option available, rather than expecting customers to submit their payment details online.

The Board believes that having this tangible relationship with consumers will have a beneficial effect on the initial take up of the service and help in the proliferation of the Yoonic brand, thereby enhancing the ongoing usage rates. These cards will have distinct designs to target the relevant community for each launch. The scratchcard model is a well established model amongst the demographic that the Group is targeting and the Board believes that this will be a compelling payment method for the service.

The scratchcards are already on sale in the UK and Malaysia in various retail outlets in central hubs of the Bangladeshi community. In the UK the scratch cards are already available at more than twenty retailers in London and Luton, and the Group is in the process of signing up more outlets in the Midland, the North and Scotland. In Malaysia the Group had partnered with the largest distributor of prepaid scratchcards and this has resulted in them being available nationally. In Singapore, the Group is in the midst of partnering Singapore Post and 7-Eleven; both being major retailers, to make the scratch cards available nationwide. The Group is currently putting in place a scratch card distribution network in the Middle East. These distribution points, with some additions, will also serve to distribute scratch cards for the other migrant groups as well.

The Group has also initiated a peer to peer marketing methodology within each migrant group to enhance the viral effect to promote the Yoonic service within each Community. This method will be replicated for each migrant group. The viral activity is enhanced by the Group's participation and presence at Community events, and partnerships formed with Community based media.

The Board is excited to progress this strategy in terms of the way that it will target its potential customer base and also to continue to develop the technology and payment options for consumers. The initial launch of Yoonic has been successful for the international Bangladesh community, and this will be followed by further launches. This is a significant development in the growth of the Group as the launch of the Yoonic OTT model is the commencement of a major new revenue contributor. It is anticipated that the OTT income will become the main revenue driver for the Group supported by the YooMob telco oriented service which will become a relatively smaller revenue contributor. The take up for the Bangladesh service has been very positive and the Group anticipates that this will be the case for the other migrant segments as well.

YooMob

The Group's YooMob platform streams video content to a broad range of mobile devices including to basic feature mobile phones. YooMob continues to be a core product for SyQic in the short to medium term and SyQic increased the number of telco companies that are a part of the YooMob network during the period. In the medium to long term, the Board anticipates that Yoonic, which represents a step change in the Group's operations, enhanced user experience and functionality, will overtake YooMob but, in the meantime, YooMob continues to grow steadily, providing a foundation for the phased rollouts of Yoonic.

In 2013 the YooMob service was enhanced by the Group's in-house R&D division and is now available on more handsets with a number of new features, such as the introduction of catch-up TV, allowing users to view live content at a later date, and at increasing level of high quality content that is being delivered at a resolution close to high definition.

The Group has recently launched new telco services including SmartFren in Indonesia and a second service with Maxis in Malaysia. Further launches are being prepared with XL in Indonesia, MPT in Myanmar and Banglalink in Bangladesh.

Partnerships

Content acquisition is one of SyQic's key strengths, with over 20,000 titles of online video-on-demand content and over 70 live television feeds, across a range of genres including movies, drama, music, sports, news, lifestyle and general entertainment genres. In 2013 SyQic developed these relationships significantly, signing agreements with major broadcasters and content providers for content in a number of new countries.

The Group's relationships with telco operators continues to broaden, with new agreements signed during the period to extend the scope of YooMob, particularly in territories such as the Philippines and Indonesia. Further developments are anticipated in advance of the next roll-outs in Myanmar, Indonesia and Bangladesh.

Geographic markets

The Board believes that its strategy of targeting each community group on an individual basis and launching services to that group simultaneously internationally will be beneficial to the Group in terms of customer adoption of the offering.

Importantly the Group aims to establish regional distribution networks that can be used in successive migrant community launches. For example, the distribution network that is being established in the Middle East as part of the launch of the Bangladesh offering, can then be used to launch the Filipino, Nepalese, Turkish and Polish products, and then any others that the Group rolls-out there.

The key geographic markets are broad, but with a targeted approach to marketing to one specific community at a time, the Board believes that SyQic will be in a strong position to increase subscription numbers. The Yoonic service is already available in the UK and Malaysia but will be expanded into Europe, the Middle East, Singapore, the United States and Oceania in the coming months.

Marketing

The Group is striving to reach each community at the relevant touch point and is therefore targeting a very specific and targeted range of news websites, groups and associations, and community leaders in various locations.

The Group has plans to develop affiliate programme that will incentivise customers to introduce other members to the service.

On a broader scale, management has recognised that there are particular locations that communities gravitate to, such as international money transfer facilities, and plans to establish a presence in such locations.

As the roll-out of Yoonic continues to progress, it is anticipated that the Marketing Team will be further strengthened. In particular it is essential that migrant marketing managers are hired to lead each migrant push so that there is greater understanding of the marketing nuances required to address the needs of each migrant group.

Research and development

Research and development is at the core of the Group's activities and was a continued focus during the period. As the Group executes the phased launch of Yoonic, development of the platform continues as well as the ongoing development of YooMob.

Investment into research and development has been in line with the management expectations for the year, with the Yoonic platform being successfully built in order to ensure that it is fully scaleable as the roll-out continues into new territories. The Board believes that the foundations for growth are in place and the Group is now in a position to scale the business up.

Another focus of the research and development has been the strengthening of SyQic's service security, content distribution, content database and systems to manage customer data. Data storage has been increased in order to prepare for the forthcoming launches, whereby the volume of content stored will need to grow significantly.

SyQic ultimately intends for its platforms to become a hub for its users to interact and build communities. Research is being carried out on an ongoing basis in order to enhance the user experience and functionality, particularly in terms of new applications for both Android and iOS devices. Interactive features such as blogging, chatting, gaming and social networking are all being explored, with the aim of making the service as engaging as possible in order to ensure customer retention.

The Group is developing the technology to closely monitor user behaviour, which will enable analysis of how customers are utilising the service and consequently identify trends and up-sell to existing users.

At the time of the IPO the Board stated that 40% of the proceeds of that fundraise would be used to fund research and development and anticipates that a number of new features will be announced over the coming months. It is anticipated that the Group's expenditure on research and development will continue at a similar pace as the enhancement of the service continues.

The Group is currently in advanced discussions with University College London, the University of Wales and the National University of Singapore to advance research collaboration in a number of key areas that will exponentially advance the Group's technology offering. Working with these academic institutions is anticipated to allow the Group to tap a wider knowledge pool and research base that the Group alone would be capable of.

The Group is also continuing its UK university internship programme which has yielded great talent for the Group's Development Team.

Outlook

The coming months will be significant for the Group as it rolls out Yoonic across the key markets of the Bangladeshi, Filipino, Nepalese, Turkish and Polish communities. The ongoing development in infrastructure in the various countries that the Group is targeting is an additional driver of growth for the platform. SyQic will be looking at reaching out to other migrant groups in the latter part of the year including to the Hispanic community in the US.

With the completion of the launch of the Bangladesh service, the Group's marketing effort is now in full swing. The next launch will be for the Filipino community and further announcements will be made at the appropriate time.

The Group's momentum from 2013 has been continued into 2014 and revenue for the first three months of 2014 was £2.0 million (unaudited) representing an improvement of over 600% on the same period in 2013. This period is marginally below the levels of revenue earned in the fourth quarter in 2013. However that period benefitted from an enhanced festive season peak period during December. As a consequence of the continuing strong billings in the first quarter of 2014, trade receivables have increased further since the year end although the Board remain confident in the payment arrangements that are already in place. The Group's largest customer, PT Nextnation Prisma has fully adhered to the payment plan entered into in 2013 and the original £2.4 million receivable has now been reduced to £1.8 million as at 31 March 2014. A new payment plan has been agreed with PT Nextnation Prisma to settle the 2013 receivable by June 2016.

The general industry wide developments continue to drive the progress of SyQic's service, as 'all you can eat' data plans become widespread, growing international migration and the consumer's appetite to consume video on mobile devices continues to grow. Given this environment and the growing market that it is creating, the Board is pleased to look to the future with increased confidence.

Jamal Hassim

Group Chief Executive Officer

14 May 2014

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2013

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2013

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2013 (continued)

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2013

NOTES TO THE FINANCIAL INFORMATION

1. General information

The company is a public company limited by shares and incorporated in Jersey. The company is domiciled in Jersey and the registered office is 13-14 Esplanade, St Helier, Jersey, Channel Islands, JE1 1BD.

The principal activity of the company is a provider of live TV and on-demand paid video content across various types of internet-enabled consumer electronics devices.

2. Basis of preparation

The consolidated financial information has been prepared in accordance with International Financial Reporting Standards as adopted by the European Union ("IFRS") issued by the International Accounting Standards Board ("IASB") including related interpretations issued by the International Financial Reporting Interpretations Committee ("IFRIC") and using the accounting policies which are consistent with those adopted in the Part IV of the AIM Admission Document of SyQic plc dated 29 November 2013 as well as applying the following accounting policy in respect of the basis of consolidation as extracted from the draft financial statements:

"The company was incorporated, under the laws of Jersey, on 13 November 2013 and on 4 December 2013 acquired the entire share capital of SyQic Capital Private Limited. As a result of this transaction, the ultimate shareholders in SyQic Capital Private Limited received shares in the company in direct proportion to their original shareholdings in SyQic Capital Private Limited.

In determining the appropriate accounting treatment for this transaction, the Directors considered IFRS 3 "Business Combinations" (Revised 2008). However, they concluded that this transaction fell outside the scope of IFRS 3 (revised 2008) since the transaction described above represents a combination of entities under common control.

In accordance with IAS 8 "Accounting Policies, changes in accounting estimates and errors", in developing an appropriate accounting policy, the Directors have considered the pronouncements of other standard setting bodies and specifically looked to accounting principles generally accepted in the United Kingdom ("UK GAAP") for guidance (FRS 6 - Acquisitions and mergers) which does not conflict with IFRS and reflects the economic substance of the transaction.

Under UK GAAP, the assets and liabilities of both entities are recorded at book value, not fair value. Intangible assets and contingent liabilities are recognised only to the extent that they were recognised by the legal acquirer in accordance within applicable IFRS, no goodwill is recognised, any expenses of the combination are written off immediately to the income statement and comparative amounts, if applicable, are restated as if the combination had taken place at the beginning of the earliest accounting period presented.

Therefore, although the group reconstruction did not become unconditional until 28 November 2013, the consolidated financial information is presented as if the Group structure has always been in place, including the activity from incorporation of the group's principal subsidiary. Both entities had the same management as well as majority shareholders."

The financial information is presented in sterling unless otherwise stated, which is the currency of the primary economic environment in which the holding company operates. All values are rounded to the nearest thousand pounds except where otherwise indicated. They have been prepared under the historical cost convention, except for financial instruments that have been measured at fair value through profit and loss.

The financial information set out in this preliminary announcement does not constitute audited financial statements for the year ended 31 December 2013. The financial information for the year ended 31 December 2013 is derived from those draft financial statements. The audit of the statutory accounts for the year ended 31 December 2013 is not yet complete. These accounts are expected to be finalised on the basis of the financial information presented by the directors in this preliminary announcement and will be delivered to the Jersey Companies Registry following the company's annual general meeting. Although the auditors have not yet reported on the financial statements for the year ended 31 December 2013, they currently anticipate issuing an unqualified report but with the following emphasis of matter:

"Emphasis of matter - trade receivables credit exposure

In forming our opinion on the financial statements, which is not modified, we have considered the adequacy of the disclosures in note 11 and 18(iii) to the financial statements concerning the credit exposure to the group's largest customer whose debt is included at a fair value of £3,294,444 (2012: £2,033,000) in these financial statements. The group has a repayment plan with the customer due to be fully settled in 2016 and, accordingly, £1,042,952 (2012: £309,000) is classified within current assets and £2,251,492 (2012: £1,724,000) within non-current assets. The directors of the Company are of the opinion that the debt will be fully recovered and, thus, no provision for impairment has been made within the financial statements as at 31 December 2013 (2012: nil). The financial statements do not include any adjustments that would result if the group was unable to recover these amounts in full."

The directors do not recommend the payment of a dividend.

The financial information set out in this announcement was approved and authorised for issue by the board of directors on 14 May 2014.

Copies of this financial information will be available on the Company's website.

3 BASIS OF CONSOLIDATION

The consolidated financial information includes the financial statements of all subsidiaries. The financial year ends of all entities in the Group are coterminous.

The financial statements of subsidiaries are included in the consolidated financial information from the date on which control over the operating and financial decisions is obtained and cease to be consolidated from the date on which control is transferred out of the Group. Control exists when the company has the power, directly or indirectly, to govern the financial and operating policies of an entity so as to obtain economic benefits from its activities.

All intercompany balances and transactions, including recognised gains arising from inter-group transactions, have been eliminated in full.

Unrealised losses are eliminated in the same manner as recognised gains except to the extent that they provide evidence of impairment.

The principal activities of the subsidiaries are as follows:

4. SEGMENTAL 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 (which takes the form of the board of directors of the Company) as defined in IFRS 8, in order to allocate resources to the segment and to assess its performance.

Based on management information there is only one operating segment. Revenues are reviewed based on the products and services provided.

The Directors of the Company consider the principal activity of the Group to be that of a provider of OTT live TV and on-demand paid video content across mobile, internet-enabled consumer electronics devices such as mobile phones and tablets, and to consummate one reportable segment, that of the provision of OTT live TV and on-demand paid video content services.

Revenues derived from major customers, which individually represent 10% or more of total revenue are as follows

All revenues were generated by operations in Asia in each of the two years ended 31 December 2013.

5. FINANCE INCOME AND (COSTS)

6. PROFIT BEFORE INCOME TAX

This is determined after charging / (crediting) the following:

The average number of employees, including the directors, during the year was as follows

Total remuneration of key management personnel, being the directors of the company, is set out below in aggregate for each of the relevant categories specified in IAS24, related party disclosures.

7. INCOME TAX EXPENSE / (RELEASE)

The major components of income tax expense / (release) for each year were:

A reconciliation of income tax expense / (release) applicable to the profit before taxation at the statutory tax rates to the income tax expense / (release) at the effective tax rate of the Subsidiaries is as follows:

There is no taxation arising from other comprehensive income.

8. Earnings per share

Basic earnings per share is calculated by dividing the profit attributable to equity holders by the weighted average number of ordinary shares in issue during the period, adjusted to reflect the conversion of the ordinary shares from SyQic Capital Pte Ltd to SyQic plc on a 1 for 1 basis on 19 November 2013.

Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential shares adjusted to reflect the conversion as mentioned above.

9. PROPERTY, PLANT AND EQUIPMENT