JCURVE SOLUTIONS LTD — Annual Report 2016

Aug 22, 2016

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23 August 2016

Manager of Company Announcements ASX Limited Level 6, 20 Bridge Street SYDNEY NSW 2000

By E-Lodgement

JCurve's Annual Financial Results

Results for Announcement to the Market

The operating results for the year to 30 June 2016 are shown with comparisons to the previous corresponding period, being the year ended 30 June 2015.

	Year ended 30 June 2016 $	Year ended 30 June 2015 $	Percentage increase / (decrease) over previous corresponding period
Revenue	9,472,993	11,343,889	16% decrease
Earnings/(loss) before interest, taxation, depreciation and amortisation(EBITDA)	(3,112,240)	(6,082,687)	49% increase *
Net loss after tax	(2,781,707)	(5,622,893)	51% increase *
Profit/(loss) from ordinary activities after tax attributable to members	(2,781,707)	(5,622,893)	51% increase *
Net profit/(loss) for the period attributable to members	(2,781,707)	(5,622,893)	51% increase *

• improvement on prior period

Dividends

No dividends were paid during the financial year. The Board advises that it does not intend to declare a final dividend for the financial year, and it will consider reinstating the dividend policy in the future.

Net Tangible Assets / Earnings Per Share

	30 June 2016	30 June 2015
Net tangible assets per ordinary share for continuing operations	0.14 cents	0.07 cents
Basic lossper ordinaryshare for continuingoperations	(0.84) cents	(1.72) cents

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Independent Audit Report

The information outlined above is presented in accordance with ASX Listing Rule 4.3A and the Corporations Act 2001 ( Corporations Act ). The Appendix 4E is based on the audited Annual Financial Report for the year ended 30 June 2016. The Independent Audit Report is included in the Annual Financial Report.

Accounting Policies, Estimation Methods and Measurements

The accounting policies, estimation methods and measurement bases used in the Appendix 4E is the same as those used in the previous annual report and half-year report.

Explanation of Result

Revenue declined 16% to $9.5 million compared to $11.3 million in the previous corresponding period. Revenue is in line with the guidance that was provided to the market in February 2016, which was revenue in the range of $9.5 million to $10.5 million. The main reason for the decline in revenue on the previous corresponding period was the continuing decline in TEMs revenue recognised due to structural changes within the industry ($1.3 million) and the effects of discontinued operations from 2015 which had contributed $1.4 million to the 2015 result. Pleasingly the JCurve software ERP division experienced $0.9 million of growth for the year ending 30 June 2016.

The following are comments on the Group’s main revenue streams:

1. The JCurve cloud software and solutions revenue has increased by $0.9 million over the past year and there is a strong growing pipeline of annuity revenue which continues to increase year on year.

2. Despite riding the long-tail of the TEMs industry, the TEMs revenue continues to decrease due to the structural changes in the industry. The TEMS team continues to invest in customer relationships and consider opportunities for the TEMS solutions owned by JCurve.

3. Our South African TEMS revenue stream ceased in the previous year as previously announced.

	Year ended	Year ended
	30 June 2016	30 June 2015
	$ millions	$ millions
Revenue	9.5	11.3
EBITDA loss	(3.1)	(6.1)
Add back: Impairment	3.0	5.2
Add back: Income tax credit	0.3	0.6
EBITDA(before impairment and after income tax credit)	0.2	(0.3)

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The financial performance for the year has been encouraging and is a significant improvement on the previous corresponding period. The EBITDA loss for the year was $3.1 million compared to a loss of $6.1 million in the previous corresponding period. The majority of the EBITDA loss is attributed to a $3.0 million impairment charge in respect of the write down of the carrying value of the Full Circle and Phoneware Intangible Assets recognised in the half year ended 31 December 2015. A full breakdown of the impairment charge is included in Note 12 to the Annual Financial Report.

We are pleased to report that the EBITDA (before impairment and after income tax credit) result for the year is a $0.2 million profit which is above the NPAT (excluding impairment) guidance range of a $0.2 million loss to $0.1 million profit. The EBITDA (excluding impairment) result for the year was a loss of $0.1 million which is also above the guidance range of a $0.2 million loss to $0.5 million loss.

Furthermore, the Group’s June 2016 cash position increased by $0.4 million over the past 12 months to $2.4 million which places JCurve Solutions Limited in a very strong position for the start of the new financial year.

Yours faithfully

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Bruce Hatchman Chairman

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