Mortice : MORT-HY-Results

Dissemination of a Regulatory Announcement that contains inside information according to REGULATION (EU) No 596/2014 (MAR)

Mortice Limited

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

Results for the Half Year ended 30 September 2016

Mortice Limited (AIM: MORT), the AIM listed security and facilities management company, announces its unaudited results for the half year ended 30 September 2016.

Financial results highlights:

• Revenues from operations grew by 79% to $91.1 m (HY 2015: $51.0m)

  • Man Guarding business increased by 40% to $48.5m (HY 2015: $34.5m)

    • Contributing 53% of group revenues

  • Facilities Management business revenue grew 158% to $42.5m (HY 2015: $16.5m)

    • Contributing 47% of group revenues

      • 22% ($10.4m) growth from Indian Operations

      • 57% ($29.7m) growth from the Office & General and Frontline

         O&G - Revenue $29m (HY 2015 $4.0m)

        • Frontline - Revenue $5m (HY 2015 - nil)

      • Revenue mix (HY-2016)

        • India - 63%

           UK - 32%

        • Singapore - 5%

• Adjusted EBITDA* increased more than 200% to $5.0m (HY 2015 $1.3m)

  • $1.85m of EBITDA increase from O&G and Frontline acquisitions.

     O&G -$0.90m (HY 2015 -$ 0.1 m)

    • Frontline -$0.95m (HY 2015 - Pre Acquisition period)

• Adjusted profit before taxation* increased to $2.6m (449%) (HY 2015: $0.3m)

 Net debt of $14.6m (FY 2016: $14.5m)

• Adjusted EBITDA and profit before tax excludes $0.5m of gains from financial liabilities measured at fair value

  Operational highlights:

  • 257 new clients added during the period

    • including Amazon, Torrent Pharma, JW Marriott, Thermal Power Corporation India, Renault Nissan, Samsung, Procter & Gamble, British School, Clariant , UOH , GAM-UK

  • More than 77% of income generated from repeat business

  • Appointment of two new Non-Executive Directors

  • Commencement of £55m contract with the University of Hertfordshire

  • O&G and Frontline were fully integrated into the business

    Post Period End:

  • Placing to raise £2.3m in December 2016 (the "Placing")

    • Proceeds to reduce indebtedness, providing balance sheet flexibility to pursue various growth opportunities

    • Effects of Placing expected to be earnings enhancing

  • O&G appointed to London Universities' £60m cleaning framework

  • Continuation of strong trading with the Company remaining on track to at least meet market expectations for full year ending 31 March 2017

Major Manjit Rajain, Executive Chairman of Mortice Limited, said:

"The strong momentum achieved during the period reflects the Company's ability to win new contracts across all parts of the business. Our underlying performance was especially pleasing, but the Group's performance has also been assisted by the performance of our acquired businesses, which have benefited from the backing of Mortice to accelerate their expansion. We are focused on becoming a global business operating in multiple geographic regions and are excited by the potential to further extend our reach.

"Our existing operations provide a solid foundation for growth as we continue to benefit from high levels of visibility thanks to long-term contracts and a retention rate of over 77%. We have a blue-chip client base with a growing ability to cross sell our services and, as such, we view the future with confidence. Additionally, we have a proven ability to execute acquisitions and will continue to evaluate opportunities to further consolidate our position.

"Furthermore, we have a strong pipeline of potential new and existing opportunities. There is significant scope for scalability across the Group's target markets and the contracts generated to date demonstrate the attraction of the enlarged Group's service offering. As such, we believe that visibility will continue to improve throughout the remainder of the year and we very much look forward to updating the market with further developments in due course."

Mortice Limited	www.morticegroup.com
Manjit Rajain, Executive Chairman	Tel: [phone]
finnCap Ltd	Tel: [phone]
Adrian Hargrave / Giles Rolls / Alex Price (Corporate Finance)
Tony Quirke (Corporate Broking)
Walbrook PR	Tel: [phone] or [e-mail]
Paul McManus / Nick Rome / Sam Allen	Mob: [phone]

About Mortice Limited

Mortice (AIM: MORT), is an AIM listed security and facilities management company, incorporated in Singapore and based in India with additional operations in Singapore and the UK.

Mortice operates under two brands, in India:

• Peregrine - provision of guarding and security services to a wide range of clients from blue-chip companies, smaller businesses, commercial and private properties, and individuals.
• Tenon - provision of a full range of facilities management services to corporate occupiers, owners and developers of real estate. Clients include some of the world's most respected blue chip and home- grown companies. Within the Tenon group, Mortice also offers security surveillance services through its subsidiary Soteria and mechanical and engineering services via Rotopower

The business is growing and profitable and is focused on expanding its geographical footprint and growing through targeted acquisitions, as well as organically.

In 2015 the Company established Tenon UK and through this wholly owned subsidiary, acquired UK based Office & General Group Limited (O&G"), an independent property service company specialising in cleaning and providing support services such as environmental solutions and built fabric maintenance in the UK. In

addition, the Company acquired a 51% majority stake in Singapore-based security company Frontline Security Pte. Ltd, and has an option to acquire an additional 25% within three years.

Chairman's Statement Overview

This was another period of excellent growth for the Company, as it generated strong organic growth with like- for-like profits and sales significantly ahead of the same period last year. In addition, the Company benefited from strong contributions from O&G and Frontline, which further strengthened the Company's overall performance during the period and will provide further opportunities for the Group to leverage its client base of international blue-chip clients. The Group won several high profile new contracts during the period with facilities management growing particularly strongly on the back of the strong contribution from O&G. With the acquisitions now fully bedded in, further benefits are expected during the second half with significant scope for new business from the framework agreement with London Universities.

India continues to provide a strong cornerstone for growth. Importantly, India is expected to continue to expand rapidly and underpin further growth with the security market expected to grow in excess of 20% per year. There is significant scope for the Company to grow its security service business at an even faster rate, as legislation is dictating a shift towards 'compliant' security services, benefitting established participants such as Peregrine.

Furthermore, the facilities management industry, in India, is also expected to continue its pace of growth as the trend towards outsourced facilities management continues. By way of example, in India the IT industry currently outsources approximately 60 per cent. of its facilities management, whilst the retail and manufacturing sectors only outsource approximately 15 per cent.

Results

Revenues grew 79% to $91.1m (HY 2015: $51.0m) during the period with profits of $3.1m (HY 2015: $0.3m). The underlying performance remained strong with growth across all parts of the business.

$34m of sales was contributed by O&G and Frontline.

Adjusted EBITDA for the period was $5.0m compared to $1.3m for the first half last year with adjusted PBT for the period $ 2.6m, compared to $0.3m in the first half last year. The Company remains confident about its prospects for the financial year ending 31 March 2017 as it benefits from business synergies and consolidation of the acquired businesses.

During the period, the Company's increased net borrowings remained broadly consistent at $14.6m.

Currency fluctuations impacted revenue growth in dollar terms from India. Sales grew 27% from INR 3.02 Bn to 3.85INR Bn, however once converted the increase was 22%, growing from $47.0m to $57.4m during the period.

The adjusted PBT was INR 146.7 m ($2.2m) and adjusted PAT was INR 109m ($1.6m) compared to INR 80.6m ($1.3m) and INR 54.7m ($0.9m) respectively, from the same period last year.

Sales from our guarding services division, Peregrine Services, grew 27% to $44m (HY 2015: $35m), accounting for 48% of group revenues. Key client wins included Amazon, Torrent Pharma, JW Marriott, Thermal Power Corporation India, Renault Nissan, Samsung, Procter & Gamble.

*Conversion rate 1 INR: $0.01