Blur : Unaudited interim results for the 6 months ended 30 June 2016

10 August 2016

blur Group plc

("blur Group", "blur", the "Group" or the "Company")

Unaudited Interim Results

blur Group, the world's first enterprise services platform and marketplace, is pleased to present its unaudited interim results for the six months ended 30 June 2016. This period saw a continued focus on the larger Enterprise opportunities that drive higher margin revenues, lower costs, improved EBITDA and cash burn.

• EBITDA** loss reduced by 54% compared to H1 2015

• Cash burn, excluding foreign exchange, reduced by 58% compared to H1 2015. Cash collections improved

• Enterprise-­focused model producing higher quality revenue streams

• Pilot phases, that could lead to wider roll out programs, in progress with a number of large Enterprise customers

• Total revenues lower due to reduction in low margin, small business revenues

• Higher margin revenues improved 75% Q2 vs. Q1 2016. $0.07m in H1 2016

• Focus on Enterprise customers drives further improvements in operational gearing

**before share based payments and foreign exchange differences

"During H1 2016, we have seen continued validation of our Enterprise strategy with the proportion of Enterprise services projects being placed on the platform growing in the period. We have seen a reduction in revenues overall, as the project revenue we derive from the small business continues to be replaced by higher margin Enterprise customers, improving both blur's operational leverage and margins. These results indicate the medium to long term benefits we can expect from working with larger Enterprises.

"By focussing on our Enterprise strategy, blur's operational efficiency has continued to improve. Post-­proof of concept, blur no longer uses digital marketing tools, such as Pay Per Click, to attract higher volumes of lower quality projects to the platform. Instead we work closely with targeted, larger Enterprise customers to gain a deep understanding of their business and how we might best partner with them to reduce their indirect business services spend. As indirect business services spend can make up around 20% of overall business spend, our approach can have a considerable impact on the cost base of these Enterprises and as such blur is working toward long term, significant relationships with these Enterprises.

"This strategy allows us to generate higher margin revenues, predominantly through license and subscription income derived from providing access to our Marketplace. We've seen the start of income being derived from our Premium Services products, and expect these offerings to become increasingly relevant to our Enterprise customers as we work together to develop wider adoption of our platform across their businesses.

"With the reduction in low margin, small business revenues, the higher quality nature of our customer base means that blur is able to improve, and increasingly automate, its delivery processes, with H1 2016 achieving a reduction in delivery staff costs of 60% compared to H1 2015. Despite the overall revenue reduction in the period, that automation and increased efficiency saw the business generate a gross profit in Q2 2016. This gross profit has been driven by working ever more closely with our customers to drive projects to a successful conclusion rather than, as was the case in the earlier years, through the application, against ultimately unsuccessful projects, of a Cancellation fee.

"By reducing the number of small business customers, we have also been able to gain efficiency in other areas of our business. This is reflected in total administrative expenses falling by 46% compared to H1 2015. Our costs of bad debts have been positively transformed with a small credit in H1 2016, compared to a $0.4m charge in H1 2015 and we've also reduced our headcount costs by 40% as our platform has matured into an increasingly fully automated, Enterprise-­class tool.

"Across a number of verticals, we see increasing engagement from larger Enterprises as the wider macro-­ economic environment affects the leadership priorities in these organisations. Cost control, supporting cash optimisation, has moved up the CEO's and CFO's agenda and while the long sales cycles will mean it will take time for those trends to positively impact blur's revenues, we remain convinced that partnering with larger Enterprises and working towards a wider adoption of blur's platform is the right strategy to support blur's path to sustainable profitability."

blur Group plc investors@blurgroup.com

Tim Allen, CFO Tel: +44 (0) 1392 927189

N+1 Singer

Shaun Dobson/Jen Boorer Tel: +44 (0) 20 7496 3000

Yellow Jersey PR

Alistair de Kare-­Silver Tel: +44 (0) 7825 916715

Since 2010, blur Group has been helping enterprises worldwide eliminate waste and inefficiency in their indirect procurement process through its market leading Enterprise Services Platform & Marketplace. To date over 65,000 businesses, including companies like, Tesco, Danone, Trinity Mirror, and PwC, have adopted blur's platform to either buy or sell services online submitting over $500m of services requirements to blur Group's platform.

blur Group is a public company listed on the London Stock Exchange's AIM market (BLUR) and is headquartered in the UK with regional sales offices in the US and Europe.

blur Group operates an Enterprise Services Platform that helps private and public sector organizations eliminate the waste and inefficiency inherent in the purchasing of business services. It combines cloud software and managed services which include sourcing, supplier short listing, contract and project management with payment processing and reporting.

Organizations such as Danone and the University of Greenwich increasingly trust blur to source, manage and deliver their business service needs. blur's Marketplace has the world's largest number of approved organizations supplying business services.

During H1 2016, blur continued to widen its engagement with large Enterprise customers, with an increasing proportion of its project base being submitted by Enterprise customers:

• blur defines the Enterprise as a business with 50 or more employees

  In addition, blur continued to see high rates of repeat business in the period with 95% of all projects kicked off in H1 2016 coming from existing customers.

  Enterprise pipeline

  During the period, blur kicked off projects from four new Enterprise customers:

  • US-­based Systems Integrator

  • UK-­based law firm

  • UK-­based multi-­platform media organization

  • Multinational real estate service firm

    These four new customers are all at an early stage of using blur's platform to reduce their indirect spend. Typically, the early stages of blur's engagements with its Enterprise customers consist of two phases:

  • Pre-­pilot -­ blur and the Enterprise work together to demonstrate the benefits of blur's platform, analyze the organization's indirect spend data, calculate potential savings and identify projects that would be suitable for a Pilot

  • Pilot -­ the Enterprise places a small number of lower value projects through blur's platform to support the business case for wider adoption

In H1 2016, blur worked with, among others, the following three customers:

Beyond the successful completion of the pilot phase, blur works toward wider adoption of its platform as organizations seek to reduce their indirect business services spend by using the Group's combination of cloud software and managed services.

Following the completion of blur 5.0 in 2015, the Group is now working on its blur 6.0 release which focuses on functionality specifically designed for the Enterprise customer. During the first half, blur delivered a number of enhancements to the platform including multi-­account management and improved platform messaging capability.

In addition, blur launched its ROI (Return on Investment) calculator in the period. This tool combines specific customer data with blur's industry expertise, including data compiled over many distinct industries, to produce analysis of the savings that the use of blur's Marketplace may generate. blur has found that the ROI calculator helps our Enterprise customers come to an earlier recognition and understanding of the size of their indirect spend and the savings that can be made by working with blur.

Philip Letts

Chief Executive Officer 10 August 2016