IEnergizer : Annual Report 2019-2020

Annual Report 2019-20

www.ienergizer.com

Contents

Overview

• 03 Overview and Highlights

• 07 Chairman's Statement

• 08 Executive Director's Statement

Corporate Governance

• 11 Board and Executive Management

• 12 Directors' Report

• 14 Corporate Governance

Financial Statements

• 17 Independent Auditor's Report

• 23 Consolidated Statement of Financial Position

• 25 Consolidated Income Statement

• 26 Consolidated Statement of Comprehensive Income

• 27 Consolidated Statement of Changes in Equity

• 29 Consolidated Statement of Cash Flows

• 31 Notes to Consolidated Financial Statements

iEnergizer Ltd.

("iEnergizer" or the "Company" or the "Group")

ANNUAL RESULTS FOR THE YEAR ENDED 31 MARCH 2020

iEnergizer, the technology services and media solutions leader for the digital age, reports annual results for the year ended March 31, 2020 with continued high revenue and margin growth generating a substantial return. This strong performance gives the Board confidence to continue the progressive dividend policy and propose a 8.4 pence final dividend payment to shareholders, representing a total dividend payment of 13.6 pence, a 31% increase compared to 2019.

Financial Highlights:

Enhanced profitability with revenue growth and margin improvements achieved through continued focus on higher margin work, the deepening of existing customer relationships and accrual of new customers, alongside active cost management across all verticals of the Group.

•  Total Revenue up 10.1% (2019: 12.9%) at $194.9m (2019: $177.1m)

•  Service Revenue up 9.7% (2019: 11.8%) at $191.0m (2019: $174.1m)

•  EBITDA1 up 19.3% (2019: 29.7%) at $59.7m (2019: $50.1m)

•  EBITDA margin at 30.7% (2019: 28.3%)

•  Operating Profit up 23.9% at $56.1m (2019: $45.3m)

•  Operating Profit margin increased to 28.8% (2019: 25.6%)

•  Profit Before Tax (PBT) up 28.7% at $52.5m (2019: $40.8m)

•  PBT margin increased to 27.0% (2019: 23.1%)

•  Earnings per share $0.24 (2019: $0.17)

•  Converted net Debt to net Cash $1.6m (2019: $3.9m)

•  Proposing dividend of 8.4p per ordinary share ($20.0m) (2019: 10.4p)

•  Paid interim dividend of 5.2p per ordinary share ($12.7m) (2019: nil p)

•  The total dividend of 13.6p per ordinary share ($32.7m) (2019: 10.4 p), an increase of 31%

Operational Highlights:

Continued focus on higher margin work and succeeding in securing further work with existing and new customers, supported by new product launches and growth in digital space.

•  Exceeded double-digit revenue growth for second year in a row, through: increased revenue share from key clients; multi-year contract wins from existing clients; extension of a higher margin client's scope of work; new product launches; and new customers.

•  Business Process Outsource revenue grew 18.5% year on year, exceeding our expectations and accounting for 63.2% of revenues (58.6% in 2019) as key customers continued to increase workload volumes. The focus remained on recurring revenue streams from long-term customer relationships across all verticals.

1 EBITDA has been calculated under the IFRS 16 accounting standards, under which a company's operating lease liabilities are shown as liabilities on the balance sheet, together with the related assets that correspond to the right to use such assets over the remaining life of the related lease contracts. If these impacts had not been taken into consideration, the EBITDA would have been $58.2m.

•  Content Services segment grew its EBITDA margins to 26.9% (2019: 23.4%), despite marginal 2.7% decrease in revenue over fiscal 2019 on account of structural pressures in the traditional publishing market, demonstrating higher operational efficiencies being achieved year on year. The division won a multi-year contract from an existing customer in the recently introduced SAAS product line of "Scipris". The division is continuing to invest in new service lines of AML/KYC services introduced in the previous year and has also started bidding for US Government Contracts for digital conversion.

•  More than 19% growth in EBITDA achieved over last fiscal year, due to revenue growth and continued focus on cost saving initiatives:

  • o Continued focus on division-specific higher margin work, particularly in non-voice based processes including content writing, financials, entertainment gaming support, content technology, e-Learning and digital solutions.

  • o Effective use of technology to handle greater volumes from key customers promoting automation in processes resulting in greater operational efficiency

  • o Conservation of "Other Costs" through effective resource utilization

•  US based sales team pursuing strategies to: enhance and grow key accounts; identify and win new business through new and existing customers; cross-sell and generate leads for additional services. Additionally, focusing on dedicated selling initiatives for New Product Launches and Service Lines

•  COVID-19 impact - Following the initial response to the lockdown in India, the Group has taken important steps to ensure that it is well positioned to fully support the requirements, health and wellbeing, of its clients and employees in this unprecedented period. The business is operating at 80% to 90% efficiency across all of its service lines as most employees have now been successfully transitioned into remote working. The Group's balance sheet, net cash position and its long-term customer relationships remain strong.

Dividends:

•  In line with the progressive dividend policy, the Company is pleased to announce an annual dividend of 8.4p with the Dividend record date of 3rd July, 2020.

•  The Company's Ordinary Shares are expected to go ex-dividend on 2nd July, 2020 and the dividend is expected to be paid on 31st July, 2020.

•  During fiscal 2020 the Company paid its shareholders an interim dividend of 5.2p with the record date of 22nd November, 2019.

•  These dividend payments reflect the Board's confidence in the Group's business plan and growth prospects.

Marc Vassanelli, Chairman of iEnergizer, commented:

"We are delighted to report another strong performance by iEnergizer, achieving double-digit growth in revenue and as guided on 9th June, exceeding market expectations for EBITDA, due to the significant progress made by colleagues across all divisions, focusing on high margin revenue.

"Reflecting the Group's strong balance sheet and the cash generative nature of the business, coupled with the Board's confidence in the business plan and growth prospects, we are pleased to announce an annual dividend of 8.4p for fiscal 2020, in line with the dividend policy adopted in 2019.

"Importantly, we have secured several new customers across all of our divisions, as well as maintaining and deepening relationships with our existing key customers. The business has maintained a successful focus on recurring revenue streams, and has continued to effectively offset pressure in the traditional publishing sector by capitalizing on iEnergizer's advantageous position to service existing and new customers' needs in the evolving digital technology landscape.

"During the unprecedented times of COVID-19, we remain in close discussions with our clients to ensure that we meet their needs and requirements throughout, while supporting our staff to work safely and remotely as per guidelines provided by the government, to serve clients at maximum capacity and efficiency on all our services.

"With iEnergizer's solid foundation, proven strength in operational execution, new sales initiatives, differentiated offerings, healthy balance sheet, and with substantial opportunities for further growth identified, the Board is confident in the Company's continued growth path as a unique, end-to-end digital solution enabler."

-Ends-

Enquiries: iEnergizer Ltd.

[phone]

Chris de Putron Mark De La Rue

FTI Consulting - Communications adviser Jonathon Brill / Eleanor Purdon

[phone]

Arden Partners-Nominated adviser and broker

[phone]

Ciaran Walsh / Steve Douglas / Dan Gee-Summons (Corporate Finance) James Reed-Daunter (Equity Sales)