Trading Update

IDE Group Holdings Plc

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

Trading Update

IDE, the mid-market network, cloud and IT Managed Services provider, is pleased to provide an update on the Group's trading performance for the year to 31 December 2018.

As announced on 10 January 2019, £7.2 million of annualised staff cost reductions were implemented in 2018, with further reductions identified since the year end bringing the total to £7.8 million. Various operational cost savings have also been realised including a reduction in software licencing costs and property costs.

The Board is pleased to report that as a result of these cost savings the trading performance of the Group improved in the second half of the year. Furthermore, the Company reached a settlement in relation to an outsourced service contract which will result in a saving of c.£3 million over the next three years, therefore the provision made at the time of the interim results has now been reversed. Consequently, the Group now expects to report a significantly reduced loss at Adjusted EBITDA* level for the full year compared to that reported in the interim results for the six months to 30 June 2018. Following the rationalisation of the cost base, the Group expects to report a much improved trading performance in 2019.

In addition to the progress having been made in relation to the Group's cost base, several of the Group's material customers renewed their contracts with IDE towards the end of the year, some on a multi-year basis; these contracts have a total contract value of c.£3.6 million.

In January 2019 IDE announced a £10 million loan note issue, supported by the Company's largest shareholders, the proceeds of which would be used to repay the Group's outstanding debt facilities with National Westminster Bank plc and provide additional working capital. The loan notes provide long term funding for the Group, thereby affording security for all the Group's stakeholders and providing a secure financial platform on which IDE can build.

* before net finance costs, tax, depreciation, impairment charges, amortisation, exceptional items and share based payment charges