Utilitywise plc Half Yearly Report -3-

The Group ended the half year with a net cash balance excluding finance leases of GBP2.2m compared to a small net debt figure at 31 January 2014 of GBP0.1m. The cash flow in the period has seen capital expenditure on the new offices of GBP1.6m which was paid out of a GBP2m cash contribution to cover this that was received prior to the year ended 31 July 2014. Other significant cash flows included a share award related PAYE payment of GBP4m that was made immediately after the year end. The main trading related item is the increase in the net accrued revenue balance in the period. This is to a large extent a result of the contract extension business undertaken that has seen revenue recognised shown as accrued revenue. The net accrued revenue balances are discounted at the cost of debt of our customers which in our case is 3%.

Balance Sheet

As at 31 January 2015 the Group had total net assets of GBP39.6m compared to GBP29.3m at the end of January 2014. As mentioned above, property, plant and equipment (PPE) have increased following the fit out costs associated with the new Head Office. There was no acquisition activity in the six months and as such the Goodwill and Intangible Assets balances remained at brought forward levels with the latter suffering the normal level of amortisation.

The growth in net assets with the exception of the PPE investment has seen the net accrued revenue balance increase from GBP10.1m to GBP21.6m. This represents future cash flows which are contracted by a utility provider with our end user business customers and which are paid to the Group by the underlying Utility provider. To a large extent the increase in net accrued revenue has arisen as a result of the contract extension business undertaken in our Enterprise division. The net accrued revenue balance has a maturity profile which has c41% due within one year and the balance of 59% extending in to the future with c40% due after 31 July 2017. As we are not an energy supplier, any variability over the cash flows receivable from the utility provider will only arise if an end business user defaults or consumes less than 85% of the energy consumption anticipated at the start of its contract. This is because the Group recognises 85% of the expected revenue from energy supply to a business end user at the start of each contract.

Dividend

The Board is proposing an interim dividend of 1.7p per share payable on 20(th) June 2015 to shareholders on the register at close of business on 22 May 2015, with an associated ex-dividend date of 21 May 2015.

INDEPENDENT REVIEW REPORT TO UTILITYWISE PLC

Introduction

We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 31 January 2015 which comprises the condensed consolidated statement of total comprehensive income, the condensed consolidated statement of financial position, the condensed consolidated statement of changes in equity, the condensed consolidated cash flow statement and related notes.

We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

Directors' responsibilities

The interim report, including the financial information contained therein, is the responsibility of and has been approved by the directors. The directors are responsible for preparing the interim report in accordance with the rules of the London Stock Exchange for companies trading securities on AIM which require that the half-yearly report be presented and prepared in a form consistent with that which will be adopted in the company's annual accounts having regard to the accounting standards applicable to such annual accounts.

As disclosed in note 1, the annual financial statements of the group are prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting", as adopted by the European Union.

Our responsibility

Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

Our report has been prepared in accordance with the terms of our engagement to assist the company in meeting the requirements of the rules of the London Stock Exchange for companies trading securities on AIM and for no other purpose. No person is entitled to rely on this report unless such a person is a person entitled to rely upon this report by virtue of and for the purpose of our terms of engagement or has been expressly authorised to do so by our prior written consent. Save as above, we do not accept responsibility for this report to any other person or for any other purpose and we hereby expressly disclaim any and all such liability.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity", issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 31 January 2015 is not prepared, in all material respects, in accordance with International Accounting Standard 34, as adopted by the European Union, and the rules of the London Stock Exchange for companies trading securities on AIM.

BDO LLP

Chartered Accountants and Registered Auditors

Location

United Kingdom

Date

BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).

Condensed consolidated statement of total comprehensive income - Unaudited

 
                                    Six months   Six months     Year ended 
                                       ended        ended 
                                    31 January   31 January      31 July 
                                       2015          2014          2014 
                             Note      GBP           GBP           GBP 
 Revenue                      3     29,886,253    20,979,641     48,641,855 
 
 Cost of sales                      16,413,806    11,936,057     26,585,832 
 
 Gross profit                       13,472,447     9,043,584     22,056,023 
 
 Other operating income                126,125       152,704        327,647 
 Exceptional contingent 
  consideration release                      -             -      2,000,000 
                                   -----------  ------------  ------------- 
 Total operating income                126,125       152,704      2,327,647 
 
 Administrative expenses             7,192,107     4,978,110     10,621,221 
 Exceptional items                   (194,484)             -      2,021,790 
                                   -----------  ------------  ------------- 
 
   Total administrative 
   expenses                          6,997,623     4,978,110     12,643,011 
 
 Profit from operations 
  before exceptional 
  items                              6,406,465     4,218,178     11,762,449 
 Exceptional items                     194,484             -       (21,790) 
--------------------------  -----  -----------  ------------  ------------- 
 Profit from operations              6,600,949     4,218,178     11,740,659 
 
 Finance income                         50,709         4,453        103,697 
 Finance expense                       261,397       174,582        476,393 
                                   -----------  ------------  ------------- 
 
 Profit before tax                   6,390,261     4,048,049     11,367,963 
 
 Tax expense                         1,417,318       654,430      2,101,925 
                                   -----------  ------------  ------------- 
 
 Profit for the period 
  attributable to equity 
  holders of the parent 
  company                            4,972,943     3,393,619      9,266,038 
 
 Other comprehensive 
  income (net of tax) 
 Items to be reclassified 
  to profit or loss 
  in subsequent periods                159,641             -       (77,308) 
 Total comprehensive 
  income attributable 
  to equity holders 
  of the parent company              5,132,584     3,393,619      9,188,730 
 
 
 Earnings per share 
  for profit attributable 
  to the owners of the 
  parent during the 
  period 
 Basic                          6        0.067         0.047          0.127 
 Diluted (pence)                6        0.065         0.044          0.121