16 August 2016
Ubisense Group plc
Interim results for the six months ended 30 June 2016
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 2016.

Overview

 First half revenues marginally ahead of 2015 achieved on a significantly reduced costbase
 Focused on delivering operational efficiencies for our customers and expanding theirdeployments, whilst building a pipeline of new opportunities.

Financialhighlights

 Total revenue was £10.7m (H1 2015: £10.4m)
 Adjusted EBITDA* loss of £0.6m (H1 2015: £3.7m loss)
 Reported operating loss of £0.8m (H1 2015: £7.3m loss) Adjusted diluted loss per share** 1.2p (H1 2015: 19.0p loss) Placing of new shares raised £4.8m before expenses to strengthen the balance sheet
and invest in the growth of the business Cash and cash equivalents of £5.0m and net funds of £1.0m

Operational
highlights

 RTLS wins delivering growth in Japan, as well as extension orders from existingcustomers in other geographies Launched new generation single sensor RTLS system, AngleID, suitable for sellingthrough third party channels
 New Geospatial myWorld utility customer contracted together with additional licencesales to existing Geospatial myWorld North American communication network
operators
 Extensions and incremental Geospatial services contracts won with existing longterm customers

Peter Harverson, Executive Chairman, commented,“The results for the first half show significant progress in stabilising the business on a lower cost base. Our continued
investment in product development is focused on providing large scale enterprise solutions that deliver proven return on
investment. Our priority now is on growing revenues with new and existing customers as well as leveraging our partner
relationships.”* Measured as operating profit excluding depreciation, amortisation 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 and non-recurring costs such as
acquisition and reorganisation costs.

Contact
Ubisense Group plc
Peter Harverson, Tim Gingell

Tel: + 44 (0) 1223 535170

Numis Securities Limited
Simon Willis, Jamie Lillywhite, Toby Adcock

Tel: + 44 (0) 20 7260 1000

Redleaf Communications
Rebecca Sanders-Hewett, David Ison, Sam Modlin

Tel: +44 (0) 20 7382 4730

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

Page 1 of 17

Interim management report

Overview
In the first half of 2016, the Group traded in line with the Board’s expectations in both divisions, with some revenue
growth, and costs significantly below the first half of 2015. Contract wins were achieved from both new and existingcustomers in both divisions despite the challenging economic environment.
Strategy
The strategy of the Group is:

Maintain and expand the significant deployments of Ubisense solutions with major enterprises in both divisions
Develop next-generation platforms & applications that deliver strong ROI to our customers, and enable value tobe realised from our intellectual property
Use strategic partners to extend reach within our vertical markets, expand our delivery capability and enhancemargin growthBusiness development
In our RTLS business, considerable effort and investment in Europe and North America has resulted in Ubisensedelivering large scale enterprise solutions to major manufacturing customers with global presence. The first half of2016 has seen growth in Ubisense’s newest RTLS market, Japan, together with deployment extensions in the othergeographies.
Ubisense launched its AngleID product providing an easy to install single sensor RTLS solution which will suit certain
applications requiring less accuracy and a lower total cost of ownership. AngleID should provide incremental RTLS
revenues in 2017 with partners being key to driving volumes.
The Geospatial business delivered myWorld contract wins with our existing North American communication network
operators as well as a new North American utility. Our position in the North American market continues to strengthen
as customers recognize the importance of our new myWorld product releases further enabling workforce mobility, as
well as the enhanced integration functionality to work with multiple GIS databases.
The Geospatial services business secured contract renewals and extensions with its largest customers who recognize
the value of our long term relationship in terms of cost effective, knowledgeable and well managed delivery.
The Company continues to build its partnership activities in both divisions and across all geographies, and seesdeveloping these partner relationships as key to the future growth of the Company.
Restructuring
Whilst the significant restructuring that commenced in 2015 is now substantially complete, we continue to closely
monitor our cost base to ensure that it remains aligned to revenues.
First half results included non-recurring items of £1.5 million net profit (H1 2015: £1.9 million costs). This related toa foreign exchange gain of £1.6 million on intercompany trading balances (H1 2015: £0.4 million costs) offset by a
£0.1m loss on redundancy and reorganisation costs (H1 2015: £1.5 million).
Board changes and management teamOn 18 May 2016, the Company announced that Richard Green would leave the company. Peter Harverson has become
executive chairman taking on responsibility for the strategy and operations of the Company. The Board is actively
engaged in seeking a replacement CEO. The Company also announced the appointment of Oliver Scott as a nonexecutive director.
On 10 August 2016, the Company announced that Tim Gingell was confirmed in the role of Chief Financial Officer andappointed to the Board.

Page 2 of 17

Interim management report

Operating and financial review
OrdersCustomer orders in the first half of 2016 were £11.7 million (H1 2015: £8.5 million), and the order book backlog as at
30 June 2016 stood at £10.4 million (H1 2015: £9.4 million).
Revenue
The Company has been reorganized into two separate business divisions RTLS and Geospatial which are based on the
Company’s Smart Factory and myWorld product suites respectively. Each division provides software solutions andservices to enterprise customers.
In the first half of 2016, total revenues were £10.7 million (H1 2015: £10.4 million). RTLS revenue was £2.7 million(H1 2015: £2.9 million). Geospatial revenue was £8.0 million (H1 2015: £7.5 million).
As an international business with activities focused in Europe, the Americas and Asia Pacific, the reported results are
subject to exchange rate volatility. At the end of the period, following the Brexit vote, sterling weakened against the
US dollar, Euro and Japanese Yen currencies in which the Company derives the majority of its revenues. If currency
exchange rates had remained constant in H1 2016 compared to H1 2015, the Company estimates that reported
revenues would have been £0.4 million lower.
To mitigate the impact of exchange rate volatility, the Company’s policy is to maintain natural hedges where possible
by matching foreign currency revenues and expenditure. The Board reviews the forecast currency requirements and,at this stage, does not consider external hedging arrangements for profit and loss items to be appropriate for theCompany.
Gross margin
The overall gross margin increased by 10 percentage points to 41% (H1 2015: 31%) following the restructuring andrefocus of the Company in 2015. Gross margin is significantly impacted by the revenue mix between product,
maintenance and support, and services work, which is in turn dependent on the type and delivery stage of a particular
contract.
For the RTLS division, the gross margin increased to 41% (H1 2015 20%), whilst for the Geospatial division the grossmargin increased to 40% (H1 2015 38%).
Operating expenses
Operating expenses decreased to £5.1 million (H1 2015: £10.5 million) and included £1.5 million non-recurringincome (H1 2015: £1.9 million costs). The reduction in operating expenses demonstrates the ongoing cost run-rate
impact of the 2015 restructuring of the business together with a £1.6 million gain relating to foreign exchange on
unrealized intercompany trading balances. Operating expenses include sales and marketing, product marketing,product development, general and administration, foreign exchange and exceptional costs.
Other operating expenses (which excludes depreciation, amortisation and non-recurring costs) decreased to £5.0m(H1 2015: £6.9m, H2 2015: £6.0m).
Gross expenditure on product development was £0.9 million (H1 2015: £1.4 million) reflecting continued investment
in our flagship Smart Factory and myWorld products. Capitalised product development costs of £0.9 million (H1 2015:£1.2 million) represented 93% (H1 2015: 86 %) of gross development spend whilst amortisation of the capitalised
development costs was £1.34 million (H1 2015: £1.3million).
EBITDA and operating profit
The Company made an adjusted EBITDA loss for the period of £0.6 million (H1 2015: £3.7 million loss) excluding nonrecurring items. The operating loss for the period was £0.8 million (H1 2015: £7.3 million loss) and loss before tax
for the period was £0.9 million (H1 2015: £7.5 million loss). The operating loss and loss before tax includes
amortisation and depreciation charges of £1.6 million (H1 2015: £1.7 million).

Page 3 of 17

Interim management report

Operating and financial review (continued)
Interest and tax
Net interest payable for the period was £146,000 (H1 2015: £192,000).
The Company has a net tax credit of £112,000 (H1 2015: £44,000 net credit), primarily as a result of non-cash deferred
tax on capitalised development costs and acquired intangible assets. Management’s best estimate of the effective
current tax rate in all other group companies is nil due to the availability of prior years’ losses.
EPS and dividends
Adjusted diluted loss per share was 1.2 pence (H1 2015: 19.0 pence loss). Reported basic and diluted loss per share
was 1.8 pence (H1 2015: 27.3 pence loss). The Board does not feel it appropriate at this time to commence paying
dividends.
Balance sheet, cash and cash flow
The Company’s balance sheet has shareholder funds at 30 June 2016 of £15.3 million (31 December 2015: £11.9
million), having raised £4.5 million net in April 2016 through a placing of 19,230,000 shares in the Company.
As at 30 June 2016, the Company had a three year working capital facility with HSBC bank of £8.0 million (31December 2015: £8.0 million) of which £4.0 million was drawn down (31 December 2015: £4.5 million). HSBC
confirmed to the Company that it waived its right to take action in relation to certain notified covenant defaults thatexisted at 31 December 2015 and 31 March 2016. There have been no further covenant defaults since these dates. The
Company has agreed the outline terms of a 5 year repayment loan with HSBC bank which will replace the existingworking capital facility.
The 200 million Japanese Yen (JPY) denominated loan (£1.3 million) with Mizuho Bank was repaid in March 2016.
Cash held on the balance sheet at 30 June 2016 was £5.0 million (31 December 2015: £5.4 million) and net funds at
30 June 2016 were £1.0 million (31 December 2015: £1.2 million net debt).
The main components of the cash movements in the first six months of 2016 included net receipts of £4.5 million froma placing to institutional shareholders (H1 2015: £9.6 million); the net repayment of bank loans of £1.8 million (H1
2015: £1.5 million drawdown); outflows of £0.9 million (H1 2015: £1.3 million) for capital investment in productdevelopment and plant and equipment; and an operating cash outflow of £2.6 million (H1 2015: £3.5 million outflow)of which £1.9 million outflow is working capital related (£0.8 million related to non-recurring costs accrued in 2015).
Capital structure
The issued share capital at 30 June 2016 was 55,883,154 (31 December 2015: 36,620,247) ordinary shares of £0.02
each. The increase of 19,262,907 shares relates to 19,230,000 shares issued in the April 2016 placing and 32,907
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 2016 was 1,150,448.
Risks and uncertainties
The Board continuously assesses and monitors the key risks of the business. With the exception of general risks arisingfrom the UK EU Referendum result, to which the Company is exposed in a similar way to other exporters, the key risks
that could affect the Company’s performance, and the factors which mitigate these risks, have not significantly changed
from those set out on pages 25 to 27 of the Company’s Annual Report for 2015 (a copy of which is available from our
website www.ubisense.net).
Current trading and outlook
The Company separation of the Group’s activities into two distinct operating units has enabled the Board to develop
clearer strategies for each division. Although we have reduced the Group’s cost base, we continue to invest in nextgeneration platforms and applications that deliver strong ROI to our customers. Our priority now is to expand thenumber and size of deployments of Ubisense solutions with major enterprise customers in both divisions. We are also
developing our channel partner relationships to extend reach within our vertical markets, expand our delivery
capability and enhance margin growth. The Company is on track to deliver full year results in line with the Board's
expectations.
Page 4 of 17

Interim income statement
For the six months ended 30 June 2016
6 months to

6 months to

12 months to

30 June 2016

30 June 201531 December 2015

unauditedunaudited

audited

Notes

£’000

£’000

£’000

4.1

10,674

10,35721,982(6,344)(7,133)(14,290)

4,330

3,224

7,692

(5,081)(10,541)(24,671)(751)(7,317)(16,979)

4,330

3,224

7,692

(4,967)(6,910)(12,914)

Adjusted EBITDA(637)(3,686)(5,222)

Depreciation

(175)

(204)

(388)

Amortisation of acquired intangible assets

(91)

(156)

(309)

(1,378)(1,343)(6,985)

1,530(1,928)(4,075)

Operating loss

(751)

(7,317)(16,979)

Net finance costs

(146)

(192)

(289)

Loss before tax(897)(7,509)(17,268)

112

9)
44

632

(785)

(7,465)(16,636)(778)(7,330)(16,569)

(7)

(135)

(67)

Revenues
Cost of revenues
Gross profit
Operating expenses
Operating loss
Analysed as:
Gross profit
Other operating expenses

Amortisation of other intangible assets
Non-recurring items

5

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

6

(1.8)

(27.3)(52.3)

Diluted6(1.8)(27.3)(52.3)The notes 1 to 10 are an integral part of these condensed interim financial statements.

Page 5 of 17

Interim statement of comprehensive income
For the six months ended 30 June 2016

Loss for the period

6 months to
30 June 2016
unaudited£’000

6 months to
30 June 2015
unaudited£’000

12 months to
31 December 2015
audited
£’000

(785)

(7,465)(16,636)

(378)

29

139

(1,163)(7,436)(16,497)

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 6 of 17

Interim statement of changes in equity
For the six months ended 30 June 2016

Sharecapital
£’000

Share
premium
£’000

Share
based
payment
reserve£’000

501

28,051

821(685)(10,427)

18,261

530

18,791

Loss for the period--£’000--(7,330)(7,330)(135)(7,465)

Exchange difference on retranslationof 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)

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

Loss for the period

-

-

-

-

(9,239)(9,239)68(9,171)

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

-

-

-

88

-

88

22

110

Total comprehensive income for the period

-

-

-

88

(9,239)(9,151)90(9,061)

Reserve credit for equity-settled
share-based payment

-

-

21

-

-

21

-

21

Issue of new share capital

6-

Premium on new share capital-

39

Share issue costs

-

(26)

Transactions with owners

6

13

21

732

37,422875

Loss for the period

-

-

-

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

Total comprehensive income for the period-

Reserve credit for equity-settled
share-based payment

Balance at 1 January 2015 (audited)

Issue of new share capital

Translati
onreserve£’000

Retainedearnings£’000

Subtotal£’000

Noncontrollinginterest
£’000

Total
£’000

(448)

(448)

6

6
-

-

-

39

-

39
(26)

(26)
-

40

-

40

(26,996)

11,494456

11,950

-

(778)

(778)

(7)

(785)

-

(469)

-

(469)

91

(378)

-

-

(469)

(778)

(1,247)84(1,163)

-

-

43

-

-

43

-

43

386

-

-

-

-

386

-

386

Premium on new share capital

-

4,427

-

-

-

4,427

-

4,427

Share issue costs

-

(295)

-

-

-

(295)

-

(295)

386

4,132

43

-

-

4,561

-

4,561

1,118

41,554918(1,008)(27,774)

14,808

Balance at 31 December 2015

Issue of new share capital

Transactions with owners
Balance at 30 June 2016 (unaudited)

(539)

540

15,348Page 7 of 17

Interim statement of financial position
At 30 June 2016

Notes

At
30 June2016
unaudited£’000

At
30 June2015
unaudited£’000

At
31 December
2015
audited£’000

7

10,113

13,872

9,786

871

1,064

943

10,984

14,936

10,729Inventories

2,703

2,509

2,815

Trade and other receivables

8,946

10,123

9,277

Cash and cash equivalents

5,049

7,806

5,392

Total current assets

16,69820,43817,484

Total assets

27,68235,37428,213-(829)(1,123)

Trade and other payables(6,420)(7,217)(8,629)Total current liabilities(6,420)(8,046)(9,752)(1,146)(1,191)(1,157)

AssetsNon-current assets
Intangible assets
Property, plant and equipment
Total non-current assets
Current assets

Liabilities
Current liabilities
Bank loans10

Non-current liabilities
Deferred tax liability
Bank loans

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

Other liabilities

9

(768)

(666)

(854)

Total non-current liabilities(5,914)(6,357)(6,511)

Total liabilities(12,334)(14,403)(16,263)

15,34820,971

11,950

1,118

726

732

41,55437,40937,422

918

854

875

Translation reserve(1,008)

(627)

(539)

Retained earnings(27,774)(17,757)(26,996)

14,808(20,605)

11,494

540

366

456

15,34820,971

11,950Net 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 8 of 17

Interim statement of cash flows
For the six months ended 30 June 2016
6 months to
30 June2016
unaudited£’000

6 months to
30 June2015
unaudited£’000

12 months to
31 December
2015
audited
£’000

(897)

(7,509)(17,268)

Depreciation

175

204

388

Amortisation

1,469

1,499

7,294

Loss on disposal of property, plant and equipment

10

-

-

Share-based payment charge

27

33

54

Non-cash non-recurring items(1,651)

602-

Finance income

(26)

(12)

(12)

Finance costs

172

204

301

Operating cash flows before working capital movements(721)(4,979)(9,243)

Change in inventories

112

(231)

66

Change in receivables

331

5,365

6,264

Change in payables(2,295)(2,536)(1,010)Cash used in operations before tax(2,573)(2,381)(3,923)

3

(1)

436

(2,570)(2,382)(3,487)

-

-

(3)

(36)

(99)

(196)

-

-

4

(873)

(1,154)(2,652)

26

12

12

(883)

(1,241)(2,835)

-

4,500

522

(1,623)(6,000)(2,000)Interest paid

(172)

(191)

(277)

Proceeds from the issue of share capital

4,517

9,582

9,602

Net cash flows from financing activities

2,722

7,891

7,847

Net increase in cash and cash equivalents

(731)

4,268

1,525

Cash and cash equivalents at start of period

5,392

3,697

3,697

388

(159)

170

)
5,049

7,806

5,392

Loss before tax
Adjustments for:

Net income taxes received/(paid)
Net cash flows from operating activities
Cash flows from investing activities
Disposal of subsidiaries, net of cash disposed
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
Proceeds of borrowings
Repayment of borrowings

Exchange differences on cash and cash equivalents
Cash and cash equivalents at end of period

Page 9 of 17

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 and Japan, selling mainly to customers in theAmericas, 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 15
August 2016.
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 2015 were approved by
the Board of Directors on 6 April 2016 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 2015.
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 10 of 17

Notes to the interim financial statements
4 Segmental information
Management has determined the operating segments to be the group’s Divisions based on the information reported to
the Chief Operating Decision Maker (CODM) for the purpose of assessing performance and allocating resources. The
CODM is the Executive Chairman.
The Real-Time Locations Systems (RTLS) Division takes real-time location date from Ubisense’s own sensing hardware,or from standards-based integration with third party hardware, and transforms this data into high value spatial event
information, delivering highly reliable, automatic, adaptive asset identification, precise real-time location and spatial
monitoring to offer meaningful insights that help businesses make smarter decisions.
The Geospatial division delivers software solutions that integrates data from any source – geographic, real-time asset,
GPS, location, corporate and external cloud based sources – into a live geospatial common operating picture,empowering all users in the customer’s organisation to access, input and analyse operational intelligence to proactively
manage their networks, respond quickly to emergency events and effectively manage day-to-day operations.
Each operating segment is managed separately by a business unit leader as each deal with different technologies andpredominately separate customer bases. The performance of the operating segments is assessed on a measure ofcontribution, being gross profit less sales and business unit marketing expenditure. Assets and liabilities are notpresented to the CODM on a divisional basis.
Costs incurred centrally or not directly attributable to either the RTLS or Geospatial division are reported in the Central
division. The results of each segment are prepared using accounting policies consistent with those of the Group as awhole. No intra-segmental transactions are reported.

6 months ended 30 June 2016

RTLS
£’000

Geospatial£’000

Central
£’000

Total
£’000

Revenue

2,654

7,973

47

10,674

Cost of sales(1,553)(4,782)(9)(6,344)Gross profit

1,101

3,191

38

4,330

(1,503)(840)(2,624)(4,967)

(402)

2,351

(2,586)(637)

Amortisation(1,469)(1,469)Depreciation

(175)

(175)

Non-recurring items

1,530

1,530

Operating loss

(2,700)(751)

Finance income

26

26

Finance costs

(172)

(172)

Loss before tax(2,846)(897)

Other administrative expenses
Adjusted EBITDA

Page 11 of 17

Notes to the interim financial statements

4 Segmental information (continued)

6 months ended 30 June 2015

RTLS
£’000

Geospatial£’000

Central
£’000

Total
£’000

Revenue

2,851

7,462

44

10,357

Cost of sales(2,293)(4,640)(200)(7,133)Gross profit

559

2,821

(156)

3,224

Other administrative expenses(2,444)(1,358)(3,108)(6,910)Adjusted EBITDA(1,885)

1,463(3,264)(3,686)

Amortisation(1,499)(1,499)Depreciation

(204)

(204)

Non-recurring items(1,928)(1,928)Operating loss

(6,895)(7,317)

Finance income

1212Finance costs

(204)

(204)

Loss before tax(7,087)(7,509)12 months ended 31 December 2015

RTLS
£’000

Geospatial£’000

Central
£’000

Total
£’000

Revenue

6,445

15,45879

21,982

Cost of sales(3,694)(10,544)(51)(14,290)

Gross profit

2,751

4,913

28

7,692

(2,810)(1,800)(8,304)(12,914)

(59)

3,113

(8,276)(5,222)

Amortisation(7,294)(7,294)

Depreciation

(388)

(388)

Non-recurring items(4,075)(4,075)

Operating loss

(20,033)(16,979)

Finance income

1212Finance costs

(301)

(301)

(20,322)(17,268)

Other administrative expenses
Adjusted EBITDA

Loss before tax

Page 12 of 17

Notes to the interim financial statements

4.1 Revenue by geography
The Board and Management Team also review the revenues on a geographical basis, based around the regions where
the Group has its significant subsidiaries or markets.
The Group's revenue from external customers in the Group's domicile, the UK, and its major worldwide markets havebeen identified on the basis of the customers' geographical location.
6 months to
30 June2016
unaudited£’000

6 months to
30 June2015
unaudited£’000

12 months to
31 December
2015
audited
£’000

217

196

487

Germany

1,215

1,283

3,074

France

257

234

616

Germany
Spain

247

28

212

Europe other

191

92

368

5,613

5,867

12,131

Canada

833

809

1,423

Japan

2,085

1,718

3,330

Asia Pacific other

5

130

337

Rest of World

11

-

4

10,674

10,35721,982

United Kingdom

USA

Total revenues

5 Non-recurring items
During the period, the Group recognized non-recurring items of £1,530,000 with £1,651,000 relating to unrealised
foreign exchange gains on intercompany trading balances and £121,000 for reorganisation costs mainly comprising
redundancy payments.
During 2015, the Group incurred non-recurring items of £4,075,000. £1,928,000 was incurred in H1 2015 relating to
unrealized foreign exchange losses on intercompany trading balances £393,000, redundancy and reorganisation costs
totaling £1,535,000. £2,147,000 was incurred in H2 2015 mainly relating to reorganisation costs.

Page 13 of 17

Notes to the interim financial statements

6

Earnings per share
6 months to
30 June2016
unaudited

6 months to
30 June2015
Unaudited

12 months to
31 December
2015
AuditedLoss for the period (£’000)(778)(7,330)(16,569)

Loss for the purposes of diluted earnings per share (£’000)(778)(7,330)(16,569)

Number of shares(778)
43,52926,85031,657

225

639

418

43,75427,48932,075

Basic loss per share (pence)(1.8)(27.3)(52.3)

Diluted loss per share (pence)(1.8)(27.3)(52.3)

Earnings

Basic weighted average number of shares (‘000)
Effect of dilutive potential ordinary shares:- Share options (‘000)
Diluted weighted average number of shares (‘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 2016 and2015 and 31 December 2015 is the same as the basic loss per share.

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.
6 months to
30 June2016
unaudited

6 months to
30 June2015
unaudited

12 months to
31 December
2015
auditedLoss for the purposes of diluted earnings per share (£’000)(778)(7,330)(16,569)

Adjustments(778)

Adjusted diluted earnings per share

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

91

156

309

Impairment of goodwill and acquired intangible assets (£’000)

-

-

4,043

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

43

33

54

Reversal of exceptional items (£’000)

121

1,928

4,075

Net adjustments (£’000)

255

2,117

8,481

Adjusted earnings (£’000)(523)(5,213)(8,088)Adjusted diluted loss per share (pence)

(523)
(1.2)

(19.0)(25.2)(1.2)

Page 14 of 17

Notes to the interim financial statements

7

Intangible assets
At
30 June2016
unaudited£’000

At
30 June2015
unaudited£’000

At
31 December
2015
audited£’000

Goodwill

4,891

8,155

4,271

Capitalised product development costs

3,604

4,045

3,980

Software

443

604

539

Acquired software products

75

162

114

Acquired customer relationships and backlog

1,100

906

882

Total other intangible assets

10,113

13,8729,786

At
30 June2016
unaudited£’000

At
30 June2015
unaudited£’000

At
31 December
2015
audited
£’000

1,118

726

732

At
30 June2016
unaudited£’000

At
30 June2015
unaudited£’000

At
31 December
2015
audited£’000

Number of shares at beginning of period

36,620,247

25,062,842

25,062,842

Issued under placing

19,230,000

11,111,112

11,111,112

Issued under share-based payment plans

32,907

121,981446,293

Change in number of shares in period

19,262,907

11,233,093

11,557,405

Number of shares at end of period

55,883,154

36,295,935

36,620,247

Net book amount

8

Share capital

Allotted, called-up and fully paid

Ordinary shares of £0.02 each

1,118

Movement in number of shares

Share capital movements
During the period, the Company issued 19,262,907 shares, increasing the total number of shares in issue from36,620,247 to 55,883,154 as follows:

19,230,000 shares at £0.25 per share for a total gross cash consideration of £4,807,500, with share issue costs of£295,000 written off against the share premium account; and32,907 share options exercised with an exercise price of £0.14 per share for total cash consideration of £4,607.

Page 15 of 17

Notes to the interim financial statements
9Interest in subsidiaries

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 2016, the contingent consideration payable is £580,000 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. As at 30 June
2016, the Group had an £8.0 million bank loan facility agreed with HSBC Bank Plc to provide working capital for theGroup. This loan is repayable in full in June 2018 by Ubisense Ltd, is secured on the fixed and floating assets of theGroup and attracts an interest charge of LIBOR + 3%. As at 30 June 2016, £4.0 million of the £8.0 million facility was
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).

As at 15 August 2016 the Group is finalising a new repayment loan facility for £4.0 million with HSBC Bank Plc and will
repay the outstanding balance on the existing £8.0 million facility. In line with the previous agreement, the new loan
will be secured on the fixed and floating assets of the Group and attracts an interest charge of LIBOR + 3%. Repaymentsof the loan by Ubisense Ltd are set at £0.75 million per annum on 31 December. The loan is subject to an operating
covenant linked to “operating cashflow” performance (profit or loss before tax adding back any non-recurring items,
finance costs, foreign exchange costs, depreciation, amortization or capitalization of product development) as follows:
2016 £2.25 million negative, 2017 £nil, 2018 and beyond £1 million positive.
The Group repaid a six month loan facility of 200 million Japanese Yen (JPY) in March 2016.

Page 16 of 17

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 2016 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 2016 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
15 August 2016

Page 17 of 17