MORT-Final-Results : 24 July 2017

("Mortice" or the "Company" or the "Group")

Strong growth continues to exceed expectations

Mortice Limited (AIM: MORT), the AIM listed security and facilities management company, announces its audited results for the year ended 31 March 2017. In terms of both revenue and profitability the Company is slightly ahead of already upgraded market expectations.

 Revenues up 36.7% to $181.01m (FY 2016: $133.04m)

• Security services sales up 29% to $98.2m (FY 2016: $76.2m) - 54% of Group revenues (FY 2016: 57%)

• Facilities Management revenues up 45% to $82.5m (FY 2016: $56.8m) - 46% of Group revenues

  (FY 2016: 43%)

• Geographical revenue mix :

  ▪ India 64% (FY 2016: 75%)

  ▪ UK 31% (FY 2016: 23%)

  • Singapore 5% (FY 2016: 2%)

     EBITDA up 114 % to $10.3 m (FY 2016: $4.8m)

• EBITDA margin of 5.7% (FY 2016: 3.6%) driven by increased revenues, synergies and cost control

 PBT up 232 % to $5.4m (FY 2016: $1.6m)

• Placing in December 2016 raised £2.3m

  o Reduced indebtedness and provided balance sheet flexibility to pursue growth opportunities

   Net debt of $13.5m (FY 2016: $14.5m)

  Operational Highlights

• New clients added during the period, including: J&K Bank, Amazon and Kotak Mahindra Bank in India and Amey, CBRE and the University of Arts London in the UK.

• More than 90% of income generated from repeat business

• Appointment of two new non-executive directors

• Cost optimisation programme undertaken with Office & General ("O&G") and Frontline Security Pte. Ltd ("Frontline") fully integrated and rebranded

• Growing global footprint

• £4.5m acquisition of Manchester-based Elite Cleaning & Environmental Services Ltd ("Elite") on a cash- free, debt-free basis

  o Acquisition brings further growth in UK operations, opportunity to build on existing blue-chip client base and is earnings enhancing

  Commenting, Manjit Rajain, Executive Chairman of Mortice, said: "The Company expects to build on the strong performance achieved during the period. Having fully integrated O&G and Frontline we have a strong international presence and as such are being asked to tender for an increasing number of global contracts. Furthermore, the current year has started well with high levels of organic growth as well as the first contributions from Elite, which was acquired in April 2017.

  "Importantly, the large proportion of repeat business provides a strong foundation for growth and ensures high levels of visibility and confidence regarding future performance. The Company has come a long way in the last few years and has a model in place that looks set to underpin continued growth. Margins have already improved significantly, which is a testament to our cost control and our ability to bid for and win profitable underlying work. With still further margin improvement expected from streamlined operations, a strong and growing list of blue chip clients and increasing demand across both the security and facilities management parts of the business, we are extremely excited about our growth prospects."

  Certain information contained in this announcement would have constituted inside information (as defined by Article 7 of Regulation (EU) No 596/2014) prior to its release as part of this announcement.

  Enquiries:

  Mortice Limited	www.morticegroup.com
  Manjit Rajain, Executive Chairman	Tel: +91 981 800 0011
  finnCap Ltd	Tel: 020 7220 0500
  Adrian Hargrave / Giles Rolls / Alex Price (Corporate Finance)
  Tony Quirke (Corporate Broking)
  Walbrook PR	Tel: 020 7933 8780 or mortice@walbrookpr.com
  Paul McManus/ Sam Allen/ Nick Rome	Mob: 07980 541 893 / 07884 664 686/ 07748325236

  About Mortice Limited

  Mortice (AIM: MORT), is an AIM listed security and facilities management company, incorporated in Singapore and based in India with additional operations in Singapore and the UK.

  Mortice operates under two brands, in India:

  • Peregrine - provision of guarding and security services to a wide range of clients from blue-chip companies, smaller businesses, commercial and private properties, and individuals.
  • Tenon - provision of a full range of facilities management services to corporate occupiers, owners and developers of real estate. Clients include respected blue-chip and home-grown companies. Within the Tenon group of companies Mortice also offers security surveillance services through its subsidiary Soteria and mechanical and engineering services via Rotopower.

The business is growing and profitable and is focused on expanding its geographical footprint and growing through targeted acquisitions, as well as organically.

In 2015, the Company established Tenon UK and through this wholly owned subsidiary acquired UK based Office & General Group Limited, an independent property service company specialising in cleaning and providing support services such as environmental solutions and built fabric maintenance in the UK. Office & General Group Limited has been fully integrated and re-branded as Tenon FM Ltd. For more information see: www.tenon-fm.com/what-we-do

In April 2017, Tenon UK completed the acquisition of Manchester-based Elite Cleaning & Environmental Services Ltd ("Elite"). Elite has a strong blue-chip client base, which is complementary to the Company's existing UK portfolio.

In November 2015, the Company acquired a 51% majority stake in Singapore-based security company Frontline Security Pte. Ltd, and has an option to acquire an additional 25% within three years.

www.brrmedia.co.uk/broadcasts/57c94e8cd6c09fd74b0ae623/mortice-unlocking-potential

This was another period of strong growth across all parts of the business as Mortice expanded operations in India, Singapore and the UK. Having fully bedded in O&G and Frontline, the Company benefited from a streamlined operations platform as it focused on winning and servicing new clients. Building on a robust first half, the Company's strong performance during the second half of the year was pleasing, reflecting the benefits of the expanded global reach.

As well as servicing existing long-term contracts Mortice continued to win new business, benefiting from its growing international reach and offering. As such, India accounted for 64% of revenues (2016: 75%) with the relative decline in percentage terms in line with management's expectations. India continues to provide strong growth opportunities with the securities market expected to grow in excess of 20% per year with a shift towards 'compliant' security services and outsourced facilities management underpinning continued growth opportunities.

It is worth noting that the biggest tax Reform in India - The Goods and Service Tax was implemented on 01 July 2017. This will bring in some positive changes in the industry - namely higher GDP growth, lower inflation and a simple tax structure, resulting in increased transparency and we expect a positive knock-on effect for our operations.

The internationalisation of the Company's operations meant that it benefited from growing levels of cross selling to existing clients with global operations while also tendering for an increasing number of facilities management and security contracts outside of India.

The Company continued to trade strongly in the UK having fully integrated and rebranded O&G, which added several new contracts and further grew its blue-chip customer base. O&G continued to strengthen its relationships with universities, following up last year's £55m contract with the University of Herefordshire with the appointment to London Universities' £60m framework during the period under review while also strengthening its relationship with the University of Arts London.

Revenues grew 36% to $181.01.5m (FY 2016: $133.04m) during the period with profits before tax of $5.4m (FY 2016: $1.6m), as the Company continued to benefit from margin growth having rebranded operations and rebased its capital structure. All parts of the business benefited from growing demand from existing and new clients as the Company continued to increase its international presence as well as cross-selling capabilities. Furthermore, the like-for-like performance of operations in India was strong with sales growing to $115.4m.

Approximately $66m of sales were from outside of India with UK-based property service company O&G contributing $55.5m, compared to $30.9m for the seven months trading post acquisition last year. Singapore- based Frontline contributed $10.2m compared to $2.9m for the five months trading post acquisition last year.

EBITDA was $10.3m compared to $4.8m the previous year, This reflected an increased EBITDA margin of 5.7% (FY 2016: 3.6%) driven by synergies, cost control and revenue growth. PBT for the period under review was

$5.4m, compared to $1.6m the previous year.

During the financial year, the Company raised £2.3m via a placing in order to reduce net debt, which was

$13.5m as at 31 March 2017 (FY 2016: $14.5m), while providing it with additional balance sheet flexibility to pursue various growth opportunities.