28 September 2016 IBEX Global Solutions Plc ("IBEX", "IBEX Global, "the Company" or "the Group") Final Results for the Year Ended 30 June 2016

IBEX Global Solutions Plc (AIM: IBEX), a leading provider of contact centre services and other business process outsourcing (BPO) solutions, is pleased to announce its final results for the year ended 30 June 2016.

Financial Highlights:
  • Total Group revenue up 7.0% to $255.5 million (2015: $238.8 million)

  • Adjusted gross profit (excluding depreciation and amortisation) of $51.4 million (2015: $45.7 million)

  • Adjusted gross profit margin of 20.1% (2015: 19.1%)

  • Adjusted EBITDA* of $17.9 million (2015: $16.6 million)

  • Adjusted EBITDA* margin of 7.0% (2015: 6.9%)

  • Profit before tax of $7.1 million (2015: $7.2 million)

  • Net income of $6.5 million (2015: $6.4 million), equating to fully diluted EPS of 16.37 cents per share (2015:

    16.19 cents per share)

  • Net assets of $27.6 million as of 30 June 2016 (30 June 2015: $25.5 million)

  • Net debt of $32.5 million as of 30 June 2016 (30 June 2015: $18.6 million)

  • Intention to declare final dividend of 6.6 cents per share, representing a total dividend for the year of 11.7 cents per share

    Operational Highlights:
  • Improved and expanded Offshore and Nearshore operations, both of which contribute higher margin

  • Investments made to improve facilities in Pakistan and transform Senegal operations

  • Continued to be awarded additional work by existing client base

  • Won a number of blue-chip new clients which will support growth and profit performance

  • Selling, general & administrative (SG&A) expenses adjusted for depreciation at 13.1% of revenue, compares favourably to industry standards of 15-28%

  • Number of employees as of 30 June 2016 in excess of 15,500, up approximately 24% on prior period

*Adjusted for share-based payment, exceptional items and other income

Muhammad Ziaullah Khan Chishti, Chairman of the Group, commented:

"In his first full year as Chief Executive, Bob Dechant has made great progress in not only improving the financial performance of the Company but also in establishing a platform for future continued success.

"IBEX has managed to diversify its geographical and industry operations and enhance margin contribution, whilst also driving revenue growth from both our existing client base and new client wins. As such, I believe we are well placed to deliver better than market revenue growth and achieve double-digit EBITDA margins."

For further information, please visit www.ibexglobal.com or contact:

IBEX Global Solutions Plc Robert Dechant, CEO Karl Gabel, CFO

Tel: +44 800 043 4239

Liberum Capital Limited

Nominated Adviser and Joint Broker Steve Pearce

Richard Bootle Joshua Hughes

Tel: +44 20 3100 2000

Cenkos Securities PLC

Joint Broker Liz Bowman Camilla Hume

Tel: +44 20 7397 8900

Alma PR Limited

Public Relations Adviser Josh Royston

Robyn McConnachie

Tel: +44 7780 901 979

CHAIRMAN'S STATEMENT

I am pleased to announce this set of strong results, which marks the first full year under Bob Dechant's stewardship, and shows excellent progress in all key metrics across the Group as we continue to deliver efficiently against our growth strategy announced in February 2016. Our financial performance reflects not only very encouraging growth in volumes with existing clients, but also, importantly, an expansion in our client base. This success has been delivered through a combination of continued investment in front line call centre agents and new facilities, as well as the hard work and dedication of all our employees.

Financial Results

Revenues in the year to 30 June 2016 were $255.5 million, representing strong improvement compared with the previous year (2015: $238.8 million) and adjusted EBITDA (excluding share-based payment, exceptional items and other income) was $17.9 million (2015: $16.6 million), reflecting growth of 7.0% and 7.8%, respectively. Profit before tax was $7.1 million (2015: $7.2 million).

Operationally, previous investment in the Group's infrastructure continues to deliver improved efficiencies and capabilities which allow us to provide, we believe, world-class services to our growing client base. The Group performed well in each of its chosen geographies with a strong improvement in our Offshore operations in the Philippines. We also expanded our business into the Nearshore regions of Nicaragua and Jamaica launched mid- year and then took the strategic decision to invest further in our Jamaica facility, following greater than expected client demand. Whilst this investment resulted in an increase in capex and impacted negatively on EBITDA, the investment should lead to increased revenues and margins in fiscal year 2017 and beyond. A further pleasing trend, now consistently represented across reporting periods, has been the winning of new blue chip clients. We believe this highlights IBEX's growing presence as the provider of choice amongst the most successful class of global businesses.

Dividend

The Board hereby indicates its intent to pay a final dividend of 6.6 cents per share, representing a total dividend for the year of 11.7 cents per share. The final dividend will be declared ahead of the Annual General Meeting, and expected to be paid before the end of the calendar year, in line with previous periods.

IBEX is well-positioned to continue on its successful path and deliver world-class services for clients, opportunity for employees and growing shareholder value and returns. We look forward to the future with confidence.

Muhammad Ziaullah Khan Chishti Chairman's STRATEGIC REPORT Business and Financial Review

IBEX delivered a strong performance, both operationally and financially, during the fiscal year 2016. Operational improvements and strategic investment not only helped us to achieve significant increases in both revenues and profitability for the year under review but have also placed us in a strong position for further, continued growth in the years to come. The Group's organic growth, consistently delivered over successive periods, has continued to outperform industry averages and reflects the advantages of our business model. As a Group we are focused on enhancing IBEX's position as preferred BPO provider verses our larger competitors by delivering superior services to our clients and maintaining high levels of client satisfaction. We repay the confidence they show in us by helping them to better service their own end customers. This approach not only grows volumes with existing clients but also provides the Group with a steady stream of new client wins.

Key Financial Performance Indicators (KPIs)

The principal KPIs used by the Board in measuring the performance of the Group continue to be Revenue, Cost of Sales, Selling, General & Administrative (SG&A) expenses, Adjusted EBITDA, Net Income and Net Debt.

It is important to note that the comparative figures for 2015 included considerable one-off project revenues of $5.2 million. Therefore, we have also included the comparative figures excluding those revenues in the proforma column below to provide an illustration of the ongoing, repeatable business of the period against 2015.

Proforma*

30 June 2016

30 June 2015

30 June 2015

Continuing Operations

$'000s

$'000s

$'000s

Revenue

255,510

238,806

233,590

Cost of Sales

213,225

200,027

200,027

Less depreciation and amortisation

(9,080)

(6,946)

(6,946)

204,145

193,081

193,081

Adjusted gross profit

51,365

45,725

40,509

Adjusted gross profit margin

20.1%

19.1%

17.3%

SG&A

34,539

30,017

30,017

Less depreciation and amortisation

(1,103)

(851)

(851)

33,436

29,166

29,166

Adjusted EBITDA

17,929

16,559

11,343

Adjusted EBITDA margin

7.0%

6.9%

4.9%

Depreciation and amortisation, exceptional items, finance costs, share-based payment, income tax and other income

11,443

10,146

Net income

6,486

6,413

Net income margin

2.5%

2.7%

* excluding $5.2 million one-off project revenue relating to expansion of one of major clients

Borrowings

38,701

21,609

Cash and cash equivalents

(6,245)

(3,011)

Net debt

32,456

18,598

The Income Statement KPIs above are in line with the Board's expectations.

Revenue for the year grew 7.0% to $255.5 million (2015: $238.8 million), or by 9.4% when excluding one-off items in the prior year (2015: $233.6 million). Whilst the growth in revenues was driven primarily by increasing business from our existing client base, of which our top four clients grew at 5%, the overall percentage of revenue contributed by them decreased slightly, a trend that we will look to continue as we attract further clients across various geographical and industrial verticals.

Adjusted EBITDA was 7.8% ahead of last year at $17.9 million (2015: $16.6 million). The main reason for this is the delivery against the Group's strategic objectives which has resulted in improved operations, driving greater efficiencies and also in concentrating on higher margin areas of growth. The Company sees the expansion of its presence in both the Offshore and Nearshore markets as a key part of its strategy to achieve double digit Adjusted EBITDA margins and will look to build a greater proportion of business in its Offshore and Nearshore markets.

As announced on 14 July 2016, Adjusted EBITDA was impacted by two factors, the Group's strategic decision to build its own facility in Jamaica in the fourth quarter to cater for excess client demand, and separately a merger between two existing clients which created higher than anticipated operating costs while we converted to a new integrated delivery model in the US region in the second half of the year. The Group expects to benefit from the Jamaica investment from the current period onwards, whilst the costs relating to the merger were a one-off event.

Profit before tax for the year slightly declined to $7.1 million; however on a proforma basis excluding one-off items, increased 255% (2015: $7.2 million) with fully diluted earnings per share slightly higher than the prior year at 16.37 cents (2015: 16.19 cents). Net debt (third party borrowings less cash and cash equivalents of $6.2 million) at the end of the year increased to $32.5 million (2015: $18.6 million), primarily through greater utilisation of line of credit due to decelerated receivables towards the close of financial year.

Operational Review

The Company has stated its target of achieving double digit EBITDA margins while developing the Company into a more repeatable and predictable business. I am pleased to report that we have made solid progress on these fronts. Importantly, as well as delivering improved financial performance for the year under review we believe we have made strategic investments in the business which will continue to provide further improvements to both the top and bottom line in the years to come.

In particular, the Group has had great success in improving and expanding its Offshore and Nearshore operations with over 1600 seats of new capacity, both of which contribute higher margin. Our sales and client facing teams have had great success in selling over 75% of this new capacity.

Nearshore operations were successfully established in the year in both Jamaica and Nicaragua with two blue chip clients launching in each of these territories with over 1100 seats of new capacity. Our Jamaica operations were initially established in conjunction with a partner. However, it soon became evident that the opportunity in that geography was significant enough to warrant further investment. As such, the Group took the strategic decision to exit its partnership relationship with a local Jamaican operator and build its own 720 seat facility which became operational on 1 July 2016. Whilst this had an impact on the year's EBITDA performance as a result of paying higher fees to the partner for the early exit and the associated costs for the buildout of our new facility, we believe it will prove of great benefit over the coming years. The facility provides IBEX with additional capacity to look after additional client operations in the current period and beyond with minimal additional capex required. Our Nicaragua business operations, with 450 seats of capacity, extends our capabilities to provide very good bilingual English and Spanish services (a key offering to clients providing goods or services to the Hispanic population) and has gone through successful launches whilst having ample capacity for growth for FY17.

In total, revenues from the Offshore and Nearshore operations totalled 39% of Group revenue compared with 28% in 2015. In order to achieve our target of double digit EBITDA margins, the Group will look to further increase the proportion of Group revenue that comes from Offshore and Nearshore operations, both through increasing the volume of work executed and clients in those geographies but also through maximising the efficiency and output of our US operations.

IBEX Global Solutions plc published this content on 28 September 2016 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 28 September 2016 20:30:02 UTC.

Original documenthttp://www.ibexcorp.com/pdf/IBEX%20Full%20Year%2016%20RNS%20FINAL%20280916.pdf

Public permalinkhttp://www.publicnow.com/view/5FDDCFDEB81B7E272D7ADC873FFCC8A41007F383