17 August 2015
Ubisense Group plc
Interim results for the six months ended 30 June 2015
Ubisense Group plc (“Ubisense” or the “Company”) (AIM: UBI), a market leader in enterprise location intelligencesolutions, announces its interim results for the six months ended 30 June 2015

Overview

Financialhighlights

Operational
highlights



The strategic shift to Solutions, including the ongoing exit from certain low margin
consulting services contracts, continues, however contract slippage with Solutions
customers has led to disappointing first half revenuesThe good pipeline of Solutions opportunities to be closed in the second half,
including contracts that have slipped from the first half, together with a strategic
focus on accelerating partner channel development to expand business scale andreach, give confidence on the full year outturn

Significant restructuring is being implemented to focus sales and marketing activity
in key geographies, reducing operating costs which had accelerated ahead ofrevenue growthTotal revenue was £10.4m (H1 2014: £17.3m)

Solutions revenue was £5.7m (H1 2014: £8.5m), and represents an increased
proportion of total revenue at 55% (H1 2014: 49%)



Recurring revenues up £0.5m to £4.0m (H1 2014: £3.5m)

Adjusted EBITDA* loss of £3.7m (H1 2014: £0.2m profit)

Reported operating loss of £7.3m (H1 2014: £2.0m loss) including £1.9m nonrecurring costs (H1 2014: £0.3m)

Adjusted diluted loss per share** 19.0p (H1 2014: 5.5p loss)Placing of £10m before expenses to strengthen the balance sheet and invest in
growth of the Solutions business

Cash and cash equivalents of £7.8m and net funds of £2.5m

Increased the working capital bank facility from £5.0m to £8.0m in June 2015 tosupport company growth. Total debt facilities of £9.1m, of which £5.3m drawn at
30 June. Net funds of £2.5m ensure that HSBC bank covenants at 30 June 2015 aresatisfied

Significant orders during the period from both new and existing customers;
including strategic wins at General Motors, Magna Steyr and Telus



RTLS Dimension4 product completed first production deployment acceptanceSignificant Geospatial myWorld product sale with a key North American
communications provider and good pipeline of new opportunities in North America
and Japan

Major restructuring into two business lines (RTLS & Geospatial) removing
headcount, ceasing market entry investment and exiting low margin consulting
services in certain geographies to deliver run rate cost savings of over £2m

Richard Green, Chief Executive, commented,“The results for the first half are clearly disappointing. We have continued to execute our shift to software solutions, byexiting the consulting services business in Europe which combined with customer order slippage resulted in a significant
revenue decrease in the first half. As a result of our strategic review and significant restructuring activities, headcountreductions and withdrawal from certain markets will result in a sustainable cost base in line with our revenue expectations
for the second half. Having made the investment in our two business lines and developed next generation products overthe past 3 years, whilst building up a blue chip customer base, the group is now better positioned to scale with its strategic
partner channels such as Atlas Copco. As a result the Group is confident it is in a position to deliver a full year outturn inline with the Board's expectations followed by growth in the longer term.”
Page 1 of 18

* Measured as operating profit excluding depreciation, amortisation, share-based payments charge and non-recurring costs such as
intercompany foreign exchange and reorganisation costs.
** Earnings measured as profit for the period excluding amortisation on acquired intangible assets, share-based payments charge
and non-recurring costs such as acquisition and reorganisation costs.

Contact
Ubisense Group plc
Richard GreenTim Gingell

Tel: + 44 (0) 1223 535170

Numis Securities Limited
Simon Willis, Jamie Lillywhite (Corporate Finance)
Rupert Krefting (Corporate Broking)Tel: + 44 (0) 20 7260 1000

Redleaf Communications
Rebecca Sanders-Hewett, Richard Gotla,
David Ison, Harriet Lynch

Tel: +44 (0) 20 7382 4730

About Ubisense
Ubisense (AIM: UBI), a global leader in enterprise location intelligence solutions, helps manufacturing,
communications and utility companies improve operational efficiency and boost profitability. Ubisense location
intelligence systems bring clarity to complexity, enabling customers to revolutionise their operational effectivenessin a measurable way. Founded in 2002, Ubisense is headquartered in Cambridge, England, with offices in North
America, France, Germany, Japan, and Singapore. For more information visit: www.ubisense.net.

Page 2 of 18

Interim management report

Overview
In the first half of 2015, the Group has continued its shift from low margin consulting services to selling and deliveringsolutions based on our own IP. These changes we have implemented have resulted in significant revenue reduction
compared to last year as a disappointingly slow closure rate on new Solutions contracts in the first half has failed tooffset the anticipated revenue shortfall from the historic services business.
Strategy
The strategy of the Group is to:Continue to evolve as a global, scalable Solutions-based business
Develop next-generation platforms & applications that deliver strong ROI to our customers and partners
Use strategic channel partners to extend reach within our vertical markets, expand our delivery capability andenhance margin growth

The business focuses its resources on delivering business critical location intelligence technology in markets where
we add the most value. As our market footprint increases, our reputation with our customers continues to be one ofvalue, reliability and exceptional service.
Business development
In our RTLS business, considerable effort and investment in Europe, North America and Japan has resulted in Ubisense
securing contracts with major manufacturing customers with global presence. Deployment extensions continue to besigned, with Smart Factory being implemented by a growing number of OEMs and across an ever increasing numberof production lines. This business allows for ROI enhancement through our systems provided to customers and is a
key driver for the widespread adoption of Smart Factory implementations to manufacturers around the globe.
Our Geospatial business continues to demonstrate continued growth with contract wins during the period for the
myWorld application in a large US communication network operator. Our position in the North American market isstrengthening, supported by our continued shift towards a Solutions-focused model. Initial contacts have also been
secured with Japanese water companies during the period for the myWorld product.
However market entry investments in territories such as South Korea and the Philippines have taken longer than
anticipated and are being discontinued, particularly where our reach can be extended more effectively by our strategic
partners.
Partnerships
In the RTLS business, the strategic partnership with Atlas Copco has supported contract wins during the period on 3
continents, two with completely new Automotive OEMs to the Group. In addition, but still at an early stage, were sales
wins with other partners including Siemens and Meiji Denki during the period. Strategically, we will look to expand in
the focus on partnerships to deliver cost efficient business growth.
Restructuring
Following a strategic review of the business operations, we have restructured into two operating divisions (RTLS and
Geospatial) to better align our costs against the revenues of each product line. This streamlining of the organisation
has completed the exit of the consulting services business in Europe, removed significant central overheads anddiscontinued investment in territories yet to show a return (South Korea & Philippines). By the end of the year theheadcount is expected to be in the region of 190 employees (30 June 2015: 200 employees, 31 December 2014: 250)
driving a run rate cost reduction of approximately £2 million per annum compared to the H1 operating costs. The
result will be a cost base that the business can more comfortably support.
First half results included an exceptional charge of £1.9 million (H1 2014: £0.3 million) covering £0.8 million
redundancy and headcount exit costs, £0.7 million exit costs and provisions relating to South Korea and Philippines,and £0.4 million unrealised intercompany foreign exchange costs.

Page 3 of 18

Interim management report

Board changes and management teamOn 30 April 2015, Peter Harverson was appointed Vice Chairman and engaged to drive leadership of sales activities,
and subsequently to assist shaping the restructuring of the Group.
On 29 June 2015, the Group announced that Robert Parker would leave the company. Whilst the Board undertakes aprocess to appoint a replacement CFO, Tim Gingell has been appointed internally as Interim CFO.
Operating and financial review
Orders
The first half of 2015 saw new customer orders of £8.5 million (H1 2014: £14.2 million), and the customer order bookas at 30 June 2015 stood at £9.4 million (H1 2014: £15.8 million).
Revenue
Following our strategic review, the focus remains on building solutions sales to customers, and the Group isreorganising into two business lines RTLS and Geospatial based on the key product suites (Smart Factory and
myWorld respectively), recognising that it must focus on the key customer relationships and markets for its products.
In the full year results, the group anticipates delivering additional segmental reporting separating the RTLS and
Geospatial divisions, however as the restructuring decision has only recently been actioned it is still too early toprovide accurate revenue, gross margin and contribution data. During the first half, the Group was managed with two
distinct revenue streams:

Solutions – revenues driven from the Ubisense RTLS and Geospatial product suites (Smart Factory, myWorld
respectively), technical expertise and exclusive reseller arrangements. A solution sale will include a mixture ofapplication software (licences in perpetuity and subscription based), installation and commissioning services,
hardware and maintenance and support. Margins in any given period will vary depending upon the make-up andphase of the given set of Solutions being delivered. The Group sees this revenue stream as critical to driving the
growth and profitability of the business.
Services – Geospatial revenues not involving the Ubisense product suites as defined above.

In the six month period under review, total revenues were £10.4 million (H1 2014: £17.3 million). Solutions revenue
was £5.7 million (H1 2014: £8.5 million), with growth expected in the second half as has been the trend in prior years
as customers deploy their capital budgets later in the year and as a result of Solutions contract slippage from the first
half. Services revenue was £4.7 million (H1 2014: £8.9 million) with the expected decline resulting from exiting low
margin business.
A significant proportion of our revenues and margins relate to a small number of large Solutions deals, the timing of
which is not solely within our control, and each can carry a significant impact on our results in any single reporting
period. However, revenues from managed services, maintenance and support grew to £4.0 million (H1 2014: £3.5
million) or 38.4% of total revenues (H1 2014: 20.1%) as the installed base of products increases with our customers.
As a global business with activities focused in Europe, the Americas and Asia Pacific, the reported results are subject
to exchange rate volatility. During the period, sterling has strengthened against the US dollar, Euro and Japanese Yen;currencies in which the Group derives a significant proportion of its revenues. If currency exchange rates had
remained constant in H1 2015 compared to H1 2014, the Board estimates that Group reported revenues would havebeen £0.4 million higher.
To mitigate currency effects, the Group’s policy is to maintain natural hedges where possible by matching foreign
currency revenues and expenditure. The Board regularly reviews the forecast currency requirements and at this stage,
does not consider external hedging arrangements for profit and loss items to be appropriate for the Group.
Gross margin
The gross margin decreased by 2.8 basis points to 31.1% (H1 2014: 33.9%). Gross margin is significantly dependent
on the product mix within the revenue streams with higher gross margin revenues being recognised on signature of
new contracts than during the delivery phase. Despite the increased proportion of Solutions revenue, the delays on
the signature of new Solutions contracts has driven the reduction in the gross margin percentage.

Page 4 of 18

Interim management report

Operating and financial review (continued)
Operating expenses
Operating expenses increased to £10.5 million (H1 2014: £7.9 million) due to a significant increase in non-recurringcosts (£1.9 million, H1 2014: £0.3 million) relating to the restructuring of the business and cessation of investment incertain markets. Operating expenses include sales & marketing, product marketing, product development, general &administration, foreign exchange and exceptional costs.
Other operating expenses (which excludes depreciation, amortisation and exceptional costs) increased to £6.9m (H1
2014: £5.7m, H2 2014: £6.4m) driven by headcount increases and additional marketing spend through the first half.
Restructuring and streamlining of the organisation will continue to reduce these costs going forward, driving a run
rate cost reduction of approximately £2 million per annum compared to the H1 operating costs.
Gross expenditure on product development was £1.4 million (H1 2014: £1.8 million) reflecting continued investment
in our flagship Smart Factory and myWorld products. Capitalised product development costs at £1.2 million (H1 2014:£1.3 million) represented 86% (H1 2014: 74%) of gross development spend whilst amortisation of the capitalised
development costs was £1.3 million (H1 2014: £1.2 million).
EBITDA and operating profit
Group adjusted EBITDA for the period was a loss of £3.7 million (H1 2014: £0.2 million profit). The operating loss forthe period was £7.3 million (H1 2014: £2.0 million loss) and loss before tax for the period was £7.5 million (H1 2014:£2.1 million loss). The operating loss and loss before tax includes amortisation and depreciation charges of £1.7
million (H1 2014: £1.8 million).
Interest and tax
Net interest payable for the period was £192,000 (H1 2014: £64,000) mainly reflecting the finance charge in renewing
the working capital facility and repaying the acquisition loan.
The Group has a net tax credit of £44,000 (H1 2014: £84,000 net credit), as a result of non-cash deferred tax on
capitalised development costs and acquired intangible assets and a small tax charge in two subsidiary companies.
Management’s best estimate of the effective current tax rate in all other group companies is nil due to the availabilityof prior years’ losses.
EPS and dividends
Adjusted diluted loss per share was 19.0 pence (H1 2014: 5.5 pence loss). Reported basic and diluted loss per share
was 27.3 pence (H1 2014: 8.8 pence loss). The Board does not feel it appropriate at this time to commence paying
dividends.
Balance sheet, cash and cash flow
The Group has a robust balance sheet with shareholder funds at 30 June 2015 of £21.0 million (31 December 2014:£18.8 million). The Group raised £9.6 million net in May 2015 through a placing of 11,111,112 shares in the Company.
The Group has a three year working capital facility of £8.0 million which was extended with HSBC in June 2015 (31December 2014: £5.0 million) of which £4.5 million was drawn down at 30 June 2015 (31 December 2014: £4.0
million).
The 200 million Japanese Yen (JPY) denominated loan (£1.1 million) was renewed with Mizuho Bank in June 2015
with 160 million JPY drawn down (31 December 2014: 170 million JPY), taking advantage of the low interest rates
available in that region and acting as a natural hedge against the Group’s assets in Asia.
Following the fund raising and extension of the HSBC working capital facility, the Group repaid the outstandingbalance on the acquisition loan (31 December 2014: £2.0 million).
Cash held on the balance sheet at 30 June 2015 was £7.8 million (31 December 2014: £3.7 million) and net funds at
30 June 2015 were £2.5 million (31 December 2014: £3.2 million net debt).

Page 5 of 18

Interim management report

Operating and financial review (continued)
The main components of the cash movements in the first six months of 2015 included net receipts of £9.6 million froma placing to institutional shareholders (H1 2014: £4.0 million); the net repayment of bank loans of £1.5 million (H1
2014: £1.3 million drawdown); outflows of £1.3 million (H1 2014: £1.9 million) for capital investment productdevelopment and plant and equipment; and an operating cash outflow of £2.4 million (H1 2014: £1.7 million outflow).
Capital structure
The issued share capital at 30 June 2015 was 36,295,935 (31 December 2014: 25,062,842) ordinary shares of £0.02
each. The increase of 11,233,093 shares relates to 11,111,112 shares issued in the June 2015 placing and 121,981
share option exercises by employees. No share options were granted to employees in the period, and the total numberof unexercised share options at 30 June 2015 was 2,078,423.
Risks and uncertainties
The Board continuously assesses and monitors the key risks of the business. The key risks that could affect the Group’s
medium term performance, and the factors which mitigate these risks, have not significantly changed from those setout on pages 25 to 27 of the Group’s Annual Report for 2014, a copy of which is available from our website
www.ubisense.net.
Current trading and outlook
Ubisense has started the second half of 2015 with a lower cost base and a refreshed market focus through the RTLS
and Geospatial business lines, and a commitment to complete the market exits outlined. The Group has entirely
assessed its order pipeline, including the Solutions contracts which slipped from the first half, and is comfortable withthe level and deliverability of this pipeline. This together with the decisive action taken on costs, the benefit of which
will be felt in the second half, means that the Group is confident it is on track to deliver full year results in line with
the Board's expectations, notwithstanding the disappointing first half performance.

Page 6 of 18

Interim income statement
For the six months ended 30 June 2015
Six months to

Six months to

12 months to

30 June 2015

30 June 201431 December 2014

unauditedunaudited

audited

Notes

£’000

£’000

£’000

4

10,357

17,33135,051(7,133)(11,455)(21,053)

3,224

5,876

13,998Operating expenses(10,541)(7,891)(18,579)

Operating loss

(7,317)(2,015)(4,581)

3,224

5,876

13,998Other operating expenses(6,877)(5,695)(12,094)

Adjusted EBITDA(3,653)

181

1,904

Depreciation

(204)

(170)

(359)

Amortisation of acquired intangible assets

(156)

(374)

(751)

(1,343)(1,300)(2,937)

(33)

(37)

(75)

(1,928)(315)(2,363)Operating loss

(7,317)(2,015)(4,581)

Net finance costs

(192)

(64)

(197)

Loss before tax(7,509)(2,079)(4,778)

9)
44

84

736

(7,465)(1,995)(4,042)(7,330)(2,121)(4,085)

(135)

126

43

Revenues
Cost of revenues
Gross profit

Analysed as:
Gross profit

Amortisation of other intangible assets
Share-based payments charge
Non-recurring costs

5

Income tax
Loss for the period
Loss attributable to:Equity shareholders of the Company
Non-controlling interest
Loss per share attributable to equity shareholdersof the parent (pence)
Basic

6

(27.3)(8.8)(16.7)

Diluted6(27.3)(8.8)(16.7)The notes 1 to 10 are an integral part of these condensed interim financial statements.

Page 7 of 18

Interim statement of comprehensive income
For the six months ended 30 June 2015

Loss for the period

Six months to
30 June 2015
unaudited£’000

Six months to
30 June 2014
unaudited£’000

12 months to
31 December 2014
audited£’000(7,465)(1,995)(4,042)

29

(208)

(531)

(7,436)(2,203)(4,573)

Other comprehensive income:Items that may be reclassified subsequently to profit and loss
Exchange difference on retranslation of net assets and results ofoverseas subsidiaries
Total comprehensive income for the period

Page 8 of 18

Interim statement of changes in equity
For the six months ended 30 June 2015

Sharecapital
£’000

Share
premium
£’000

Share
based
payment
reserve£’000

461

24,050746(221)(6,342)

18,694554

19,248Loss for the period--£’000--(2,121)(2,121)126(2,121)

Exchange difference on retranslationof net assets and results of overseas
subsidiaries

-

-

-

(173)

-

(173)

(35)

(173)

Total comprehensive income for the period

-

-

-

(173)

(2,121)(2,294)91(2,203)

Reserve credit for equity-settled
share-based payment

-

-

37

-

-

37

-

37

40

-

-

-

-

40

-

40

-

4,222

-

-

-

4,222

-

4,222

Balance at 1 January 2014 (audited,
restated)

Issue of new share capital
Premium on new share capital

Translation
reserve£’000

Retainedearnings
£’000

(229)

Share issue costs

Subtotal£’000

Noncontrollinginterest
£’000

Total
£’000

(229)

(229)

Transactions with owners

40

3,993

37

-

-

4,070

-

4,070

Balance at 30 June 2014 (unaudited)

501

28,043783(394)(8,463)

20,470645

21,115

Loss for the period

-

-

-

-

(1,966)(1,966)(83)(2,049)Exchange difference on retranslation of net
assets and results of overseas subsidiaries

-

-

-

(291)

-

(291)

(29)

(320)

Total comprehensive income for the period

-

-

-

(291)

(1,966)(2,257)(112)(2,369)Reserve credit for equity-settled
share-based payment

-

-

38

-

-

38

-

38

Premium on new share capital

-

8

-

-

-

8

-

8

Transactions with owners

-

8

38

-

-

46

-

46

501

28,051

821(10,427)

18,261

530

18,791

Loss for the period

-

-

-

-

(7,330)(7,330)(135)(7,465)

Exchange difference on retranslation of net
assets and results of overseas subsidiaries

-

-

-

58

-

58

(29)

29

Total comprehensive income for the period

-

-

-

58

(7,330)(7,272)(164)(7,436)

Reserve credit for equity-settled
share-based payment

-

-

33

-

-

33

-

33

225

-

-

-

-

225

-

225

Premium on new share capital

-

9,806

-

-

-

9,806

-

9,806

Share issue costs

-

(448)

-

-

-

(448)

-

(448)

Transactions with owners

225

9,358

33

-

-

9,616

-

9,616

Balance at 30 June 2015 (unaudited)726

37,409854(627)(17,757)

20,605366

20,971

Balance at 31 December 2014 (audited)

Issue of new share capital(685)

Page 9 of 18

Interim statement of financial position
At 30 June 2015

Notes

At
30 June2015
unaudited£’000

At
30 June2014
unaudited£’000

RestatedAt
31 December
2014
audited£’000

713,872

15,834

14,363

Property, plant and equipment

1,064

819

1,112

Total non-current assets

14,936

16,653

15,475Inventories

2,509

3,031

2,881

Trade and other receivables

10,123

11,015

15,541

Cash and cash equivalents

7,806

5,537

3,697

Total current assets

20,43819,583

22,119Total assets

35,37436,236

37,594

(829)

(758)

(927)

Trade and other payables(7,217)(8,450)(9,816)

Total current liabilities(8,046)(9,208)(10,743)(1,191)(1,479)(1,336)

AssetsNon-current assets
Intangible assets

Current assets

Liabilities
Current liabilities
Bank loans10

Non-current liabilities
Deferred tax liability
Bank loans

10(4,500)(4,000)(6,000)

Other liabilities

9

(666)

(434)

(724)

Total non-current liabilities(6,357)(5,913)(8,060)Total liabilities(14,403)(15,121)(18,803)

20,971

21,115

18,791

726

501

501

37,40928,04328,051

854

783

821

Translation reserve

(627)

(394)

(685)

Retained earnings(17,757)(8,463)(10,427)

20,60520,47018,261

366

645

530

20,971

21,115

18,791

Net assets
EquityEquity attributable to owners of the parent company
Share capital
Share premium
Share based payment reserve

Equity attributable to owners of the parent company
Non-controlling interests
Total equity

8

The notes 1 to 10 are an integral part of these condensed interim financial statements.
Page 10 of 18

Interim statement of cash flows
For the six months ended 30 June 2015
Six months to
30 June2015
unaudited£’000

Six months to
30 June2014
unaudited£’000

12 months to
31 December
2014
audited£’000(7,509)(2,079)(4,778)Depreciation

204

170

359

Amortisation

1,499

1,674

4,956

-

-

22

Share-based payment charge

33

37

75

Non-cash non-recurring items

602

-

-

Finance income

(12)

(15)

(14)

Finance costs

204

79

211

(4,979)

(134)

831

Change in inventories

(231)

(443)

(293)

Change in receivables

5,365

490

(3,661)

Change in payables(2,536)(1,766)447

Cash used in operations before tax(2,381)(1,853)(2,676)

(1)

141

47

(2,382)(1,712)(2,629)

-

(176)

(509)

(99)

(345)

(885)

-

-

1

(1,154)(1,403)(3,500)

12

15

14

(1,241)(1,909)(4,879)Proceeds of borrowings

4,500

1,258

3,427

Repayment of borrowings(6,000)--Interest paid

(191)

(84)

(151)

Proceeds from the issue of share capital

9,582

4,033

4,041

Net cash flows from financing activities

7,891

5,207

7,317

Net increase in cash and cash equivalents

4,268

1,586

(191)

Cash and cash equivalents at start of period

3,697

3,964

3,964

Exchange differences on cash and cash equivalents

(159)

(13)

(76)

Cash and cash equivalents at end of period

7,806

5,537

3,697

Loss before tax
Adjustments for:

Loss on disposal of property, plant and equipment

Operating cash flows before working capital movements

Net income taxes received/(paid)
Net cash flows from operating activities
Cash flows from investing activities
Acquisition of subsidiaries, net of cash acquired
Purchases of property, plant and equipment
Proceeds on disposal of property, plant and equipment
Expenditure on intangible assets
Interest received
Net cash flows from investing activities
Cash flows from financing activities

Page 11 of 18

Notes to the interim financial statements
1 General information
Ubisense Group plc (‘the Company’) and its subsidiaries (together, ‘the Group’) deliver mission-critical location-based
smart technology which enables companies to optimise their business processes.
The Group has operations in the UK, USA, Canada, France, Germany, Japan, South Korea, and Singapore and sells
mainly in the Americas, Europe and Asia Pacific.
The Company is a public limited company which is listed on the Alternative Investment Market (‘AIM’) of the London
Stock Exchange (UBI) and is incorporated and domiciled in the UK. The address of its registered office is St. Andrew’s
House, St. Andrew’s Road, Chesterton, Cambridge, CB4 1DL.
The condensed consolidated interim financial statements were approved by the Board of Directors for issue on 14
August 2015.
The condensed consolidated interim financial statements do not comprise statutory accounts within the meaning ofsection 434 of the Companies Act 2006. Statutory accounts for the year ended 31 December 2014 were approved by
the Board of Directors on 16 March 2015 and delivered to the Registrar of Companies. The report of the auditors on
those accounts was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement
under section 498 of the Companies Act 2006.
The condensed consolidated interim financial statements have been reviewed, not audited.

2 Basis of preparation
The condensed consolidated interim financial statements should be read in conjunction with the annual financial
statements of the Group and are prepared in accordance with IFRSs as adopted by the European Union.
Going concern basis
The Group’s forecasts and projections, taking account of reasonably possible changes in trading performance, support
the conclusion that there is a reasonable expectation that the Company and the Group have adequate resources tocontinue in operational existence for the foreseeable future, a period of not less than twelve months from the date ofthis report. The Group therefore continues to adopt the going concern basis in preparing its condensed consolidated
interim financial statements.

3 Accounting policies
The accounting policies adopted in the preparation of the condensed consolidated interim financial statements areunchanged from those set out in the Group’s consolidated financial statements for the year ended 31 December 2014.
These policies have been consistently applied to all the periods presented.
The operations of the Group display a degree of seasonality with stronger performance typically seen in the second
half of the year. This is due to customers’ budgetary cycles and the capital nature of the products sold by the Group.

Page 12 of 18

Notes to the interim financial statements
4 Segmental information
IFRS 8 requires a “management approach” under which information in the financial statements is presented on thesame basis as that used for internal management reporting purposes. The Group was organised on a global basis as asingle Enterprise Location Intelligence business. This was the basis of the Group’s external market offering and internalorganisational and management structure and was the primary way in which the Chief Executive Officer, who is theChief Operating Decision Maker, receives financial information to assess Group performance. As a result, the Group has
therefore determined that it has only one reportable segment, for the first half, as defined by IFRS 8.
In the full year results, the group anticipates delivering additional segmental reporting separating the RTLS and
Geospatial divisions, however as the restructuring decision has only recently been actioned it is still too early to provide
accurate revenue, gross margin and contribution data.
The internal management accounting information is prepared on an IFRS basis but has a non-GAAP “Adjusted EBITDA”
as the primary measure of profit and this is reported on the face of the income statement.
In addition, the Board and the Executive Management Team consider the business to have two revenue streams withdifferent characteristics, Solutions and Services, which are generated from the same asset and cost base.

4.2 Revenue by nature
Six months to
30 June2015
unaudited£’000

Six months to
30 June2014
unaudited£’000

12 months to
31 December
2014
audited£’000

Solutions

5,704

8,476

20,067

Services

4,653

8,855

14,984

Total revenues

10,357

17,33135,051

Six months to
30 June2015
unaudited£’000

Six months to
30 June2014
unaudited£’000

12 months to
31 December
2014
audited
£’000

196

189

743

Americas

6,676

7,269

14,223

Europe

1,637

5,614

12,743

Asia Pacific

1,848

4,259

7,342

Total revenues

10,357

17,33135,0514.2 Revenue by geography

United Kingdom

Revenues from external customers in the Group’s domicile, the UK, as well as its major markets, Europe, Americas andAsia Pacific, have been identified on the basis of the customer’s geographical location.

Page 13 of 18

Notes to the interim financial statements
5 Non-recurring costs
During the period, the Group incurred non-recurring expenditure totaling £1,928,000. This includes:
Re-organisation costs of £768,000 comprising mainly redundancy and other exit costs

Cost and provisions of £745,000 relating to exiting from South Korea and the PhilippinesForeign exchange losses on unrealised intercompany trading balances of £393,000, which will be nonrecurring due to the conversion of trading balances to long-term loans in H2 15Other non-recurring expenditure of £22,000.
During 2014, the Group incurred non-recurring items of £2,363,000. £315,000 was incurred in H1 2014 relating tostrategic Asia Pacific market entry. Additional non-recurring costs of £2,048,000 were incurred in H2 2014
compromising:Re-organisation costs of £458,000Further Asia Pacific market entry costs of £288,000 (total 2014 costs of £603,000)
Professional fees in connection with an acquisition that did not proceed of £34,000
Impairment of an acquired intangible asset of £1,268,000.

6

Earnings per share
Six months to
30 June2015
unaudited

Six months to
30 June2014
Unaudited

12 months to
31 December
2014
AuditedLoss for the period (£’000)(7,330)(2,121)(4,085)

Loss for the purposes of diluted earnings per share (£’000)(7,330)(2,121)(4,085)26,85024,03624,541

639

1,141

969

Diluted weighted average number of shares (‘000)

27,48925,17725,510

Basic loss per share (pence)(27.3)(8.8)(16.7)

Diluted loss per share (pence)(27.3)(8.8)(16.7)

Earnings

Number of shares
Basic weighted average number of shares (‘000)
Effect of dilutive potential ordinary shares:- Share options (‘000)

Basic earnings per share is calculated by dividing profit for the period attributable to ordinary shareholders of theCompany by the weighted average number of ordinary shares outstanding during the period. For diluted earnings per
share, the weighted average number of shares is adjusted to allow for the effects of dilutive share options. Options haveno dilutive effect in loss-making years, and hence the diluted loss per share for the periods ended 30 June 2015 and2014 and 31 December 2014 is the same as the basic loss per share.

Page 14 of 18

Notes to the interim financial statements
6 Earnings per share (continued)
The Group also presents an adjusted diluted earnings per share figure which excludes amortisation on acquired
intangible assets, share-based payments charge and non-recurring expenditure such as reorganisation costs from themeasurement of profit for the period.
Six months to
30 June2015
unaudited

Six months to
30 June2014
unaudited

12 months to
31 December
2014
audited(7,330)(2,121)(4,085)

Reversal of amortisation on acquired intangible assets (£’000)

156

374

751

Reversal of share-based payments charge (£’000)

33

37

75

Reversal of exceptional items (£’000)

1,928

315

2,363

Net adjustments (£’000)

2,117

726

3,189

Adjusted earnings (£’000)(5,213)(1,395)(896)

Adjusted diluted loss per share (pence)(19.0)

(5.5)

(3.5)

At
30 June2015
unaudited£’000

At
30 June2014
unaudited£’000

At
31 December
2014
audited£’000

Goodwill

8,155

9,587

8,224

Capitalised product development costs

4,045

4,056

4,227

Software

604

373

652

Acquired software products

162

377

228

Acquired customer relationships and backlog

906

1,441

1,032

13,872

15,834

14,363Adjusted diluted earnings per share

Loss for the purposes of diluted earnings per share (£’000)
Adjustments

7

Intangible assets

Net book amount

Total other intangible assets

Page 15 of 18

Notes to the interim financial statements
8

Share capital

Allotted, called-up and fully paidAt
30 June2015
unaudited£’000

At
30 June2014
unaudited£’000

At
31 December
2014
audited£’000

Ordinary shares of £0.02 each

726

501

501

Movement in number of sharesAt
30 June2015
unaudited£’000

At
30 June2014
unaudited£’000

At
31 December
2014
audited£’000

Number of shares at beginning of period

25,062,842

23,079,146

23,079,146

Issued under placing

11,111,112

1,929,589

1,929,589

Issued under share-based payment plans

121,981

28,917

54,107

Change in number of shares in period

11,233,093

1,958,506

1,983,696

Number of shares at end of period

36,295,935

25,037,652

25,062,842

Share capital movements
During the period, the Company issued 11,233,093 shares, increasing the total number of shares in issue from25,062,842 to 36,295,935 as follows:11,111,112 shares at £0.90 per share for a total gross cash consideration of £10,000,000, with share issue costs of£448,000 written off against the share premium account; and

121,981 share options exercised with a weighted average exercise price of £0.25 per share for total cash
consideration of £30,727.

Page 16 of 18

Notes to the interim financial statements
9Interest in subsidiaries

9.1 Sale of subsidiary company
On 18 May 2015, the Group disposed of its 100% equity interest in its subsidiary, Geoplan Philippines Inc. for USD
1,000. At the previous period end of 31 December 2014, Geoplan Philippines Inc had net liabilities of £69,000 and there
was no material change in the carrying value of net assets between 31 December 2014 and the date of disposal.
9.2 Contingent consideration
The consideration to acquire the Geoplan group in December 2013 included cash, issue of Ubisense shares, deferredconsideration and contingent consideration. The deferred consideration was paid in full in January 2014.
Under the contingent cash consideration arrangement, the Group is required to pay additional amounts to vendors
based on the achievement of two separate performance milestones that may arise between 2014 and 2017 withcombined undiscounted range of outcomes between nil and 149 million Japanese Yen (JPY) (£nil to £892,000).
At acquisition, the fair value of the contingent consideration was 136 million JPY (£816,000) being management’s best
estimate of the probability-adjusted estimated discounted future cashflows. The discount rate used is 3.5%, based on
the Group’s estimated incremental borrowing rate for unsecured liabilities at the reporting date, and therefore reflects
the Group’s credit position. The fair value amount recognised for this arrangement is revised based on the most recent
management estimates and, as the liability is denominated in JPY, it is subject to the impact of exchange rates.
At 30 June 2015, the contingent consideration payable is £406,000 and is included in other non-current liabilities.

10 Bank loans
In June 2015, the Group renewed its working capital loan facilities and repaid its acquisition bank loan. The Group hasan £8.0 million bank loan facility agreed with HSBC Bank Plc to provide working capital for the Group. This loan is
repayable in full in June 2018 by Ubisense Ltd, is secured on the fixed and floating assets of the Group and attracts aninterest charge of LIBOR + 3%. As at 30 June 2015, £4.5 million of the £8.0 million facility is drawn down and is subject
to certain operating and net worth covenants of the business, being:Total senior debt (net of cash balances) not exceeding 2x Adjusted EBITDA;
Interest charges and repayments of principal due in the next 12 months in respect of borrowings whose originalstated term to maturity exceed 12 months not exceeding 3x Adjusted EBITDA; andTotal senior debt (net of cash balances) not exceeding 2.5x the aggregate of trade debtors (net of provisions) andwork-in-progress (Amounts recoverable on contracts).

The Group renewed a six month loan facility of 200 million Japanese Yen (JPY) in June 2015, which is repayable in
December 2015. The loan is unsecured and interest is payable at 0.99%. As at 30 June 2015, 160 million JPY of the 200
million JPY facility is drawn down.

Page 17 of 18

Independent review report to Ubisense Group plc
Introduction
We have been engaged by the company to review the financial information in the half-yearly financial report for thesix months ended 30 June 2015 which comprises the interim income statement, interim statement of comprehensive
income, interim statement of changes in equity, interim statement of financial position, interim statement of cash flows
and the related explanatory notes. We have read the other information contained in the half yearly financial reportand considered whether it contains any apparent misstatements or material inconsistencies with the information in
the condensed set of financial statements.
This report is made solely to the company in accordance with guidance contained in ISRE (UK and Ireland) 2410,'Review of Interim Financial Information performed by the Independent Auditor of the Entity'. Our review work has
been undertaken so that we might state to the company those matters we are required to state to them in a review
report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility toanyone other than the company, for our review work, for this report, or for the conclusion we have formed.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved by, the directors. The AIM rules of the
London Stock Exchange require that the accounting policies and presentation applied to the financial information in
the half-yearly financial report are consistent with those which will be adopted in the annual accounts having regard
to the accounting standards applicable for such accounts.
As disclosed in Note 2, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted
by the European Union. The financial information in the half-yearly financial report has been prepared in accordancewith the basis of preparation in Note 2.
Our responsibility
Our responsibility is to express to the Company a conclusion on the financial information in the half-yearly financial
report based on our review.
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 awareof 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 financial information in thehalf-yearly financial report for the six months ended 30 June 2015 is not prepared, in all material respects, inaccordance with the basis of accounting described in Note 2.
Grant Thornton UK LLP
Chartered Accountants
Registered Auditor
Cambridge
14 August 2015

Page 18 of 18