CSF : HALF-YEAR RESULTS for 6 months ended 30 September 2018

27 November 2018

CSF Group plc

("CSF" or "the Group")

HALF-YEAR RESULTS

For the six months ended 30 September 2018

CSF Group plc (AIM: CSFG), a provider of data centre facilities and services in South East Asia, today announces its unaudited half-year results for the six months ended 30 September 2018.

Financial highlights:

• ● Group revenue of RM9.9m (£1.8m*) (H1 2018#: RM11.9m (£2.2m*)).

• ● Gross profit margin of 34.8% (H1 2018#: gross profit margin of 45.1%).

• ● Loss before tax of RM1.2m (£0.2m*) (H1 2018#: profit before tax of RM2.0m (£0.4m*)).

• ● Earnings per share: loss of 0.78 sen (0.15p*) per share (H1 2018#: earnings of 0.81 sen (0.15p*) per share).

• ● Net cash generated from operating activities of RM3.0m (£0.6m*) (H1 2018#: net cash generated from operating activities of RM4.3m (£0.8m*)).

• ● Closing unrestricted cash position as at 30 September 2018 of RM52.6m (£9.7m*) (31 March 2018: RM49.2m (£9.1m*)).

• ● Net assets as at 30 September 2018 of RM56.8m (£10.5m*) (31 March 2018: RM58.1m (£10.7m*)).

Operational highlights:

• ● Continuing to seek potential customers for the capacity at the Group's remaining data centres.

• ● Exploring value-added services to increase the Group's revenue stream.

• ● Continuing to seek to improve operational efficiency.

• * The figures in pounds Sterling are included solely for convenience. The figures in pounds Sterling are stated, as a matter of arithmetical computation only, on the basis of all current and prior year balances being translated from Malaysian Ringgits into pounds Sterling at the rate prevailing on 30 September 2018 of RM5.4070 : £1.00. This translation should not be construed as meaning that the Malaysian Ringgit amounts actually represent, have been, or could be converted into the stated number of pounds Sterling.

• # The 6-month financial period from 1 April 2017 to 30 September 2017.

For further information:

CSF Group plc

Phil Cartmell, Chairman

Allenby Capital Limited (Nominated Adviser & Broker)

Nick Naylor / Alex Brearley

+603 8311 9563

+44 (0)20 3328 5656

CHAIRMAN'S STATEMENT

Overview of the six months ended 30 September 2018

The Group's monthly revenue is still insufficient to cover its monthly operating overheads, and this has been exacerbated by intense competition and pricing pressure experienced by the maintenance and the design and development segments of the Group's business. The Board also notes that significant capital expenditure will be required for the replacement of aging equipment at the CX1 data centre and will continue to work closely with management in the careful planning and implementation of the Group's capital expenditure budget.

The Board will continue to support the efforts of management in implementing its stated business strategies for growing the rental revenue of the CX1 data centre, albeit limited by space and power capacity, growing the design and development and maintenance business, and identifying further cost reduction measures, with the objective of preserving the Group's financial resources.

The Group incurred a loss for the financial period of RM1.3m (£0.2m*) (H1 2018: profit of RM1.3m (£0.2m*)). The loss was mainly attributable to a net provision of allowance for doubtful debts of RM0.7m (£0.1m*) and the absence of dividend income of RM0.7m (£0.1m*) received in June 2017, in conjunction with the disposal of the Group's 20% equity interest in an associate in Vietnam which was completed during the financial year ended 31 March 2017.

As at 30 September 2018, the Group had cash and cash equivalents of RM52.6m (£9.7m*) (31 March 2018: RM49.2m (£9.1m*)). This represents the cash that is available to the Group, and excludes restricted cash items, such as fixed deposits pledged for banking facilities and deposits held on behalf of the Company's Employee Benefit Trust.

Current trading

As highlighted in the Group's results for the year ended 31 March 2018, which were announced in July 2018, the Group continues to follow-up on a number of key strategic initiatives and is pursuing a pipeline of potential customers and business alliances and remains focused on these plans going forward.

The Board and management have also undertaken a number of strategic initiatives to seek to improve the Group's cash reserves, secure new customers, create additional revenue streams and strive to improve operational efficiency.

The Board and management will continue to implement measures to reduce the burn rate of the Group's cash reserves. The Board will continue to ensure that there is no significant cash outlay other than the sums required to cover the committed lease rentals and other necessary operating overheads, subject to any further capital expenditure to replace ageing equipment or expenditure required to generate new revenue streams.

Outlook

The Board and management team remain focused in implementing the Group's key strategies, as outlined above, and on pursuing the pipeline of potential customers and business alliances.

Dividends

The Board does not propose any payment of dividends in respect of the six month period ended 30 September 2018.

Trading in the Company's shares on AIM

On 12 November 2018 the Company announced that, following its extraordinary general meeting held on 24 September 2018 and the resignation of Mr Phil Cartmell as the Company's Chairman and as a director with effect from the close of business on 31 December 2018, its nominated adviser, Allenby Capital Limited ("Allenby Capital"), gave the Company three months' notice of its resignation, pursuant to the nominated adviser agreement between the Company and Allenby Capital. As a consequence, Allenby Capital will cease to act as the Company's nominated adviser at the close of business on 31 December 2018. The Company also announced that it had recently met with a number of potential replacement nominated advisers, but was turned down by them for various reasons.

The board of CSF has been unable to make further progress on this matter since 12 November 2018 and, as a consequence, it now believes that it will not be possible for the Company to appoint a replacement nominated adviser before 31 December 2018. If the Company fails to appoint a replacement nominated adviser before the close of business on 31 December 2018, the Company's shares will be suspended from trading on AIM there afterwards. If, following such suspension, the Company fails to appoint a replacement nominated adviser within one month of the date that its shares are suspended from trading on AIM, the admission of the Company's shares to trading on AIM will be cancelled.

Phil Cartmell

Chairman CSF Group plc

*The figures in pounds Sterling are included solely for convenience. The figures in pounds Sterling are stated, as a matter of arithmetical computation only, on the basis of all current and prior year balances being translated from Malaysian Ringgits into pounds Sterling at the rate prevailing on 30 September 2018 of RM5.4070 : £1.00. This translation should not be construed as meaning that the Malaysian Ringgit amounts actually represent, have been, or could be converted into the stated number of pounds Sterling.

CHIEF FINANCIAL OFFICER'S REVIEW

Introduction

The Group recorded a basic loss per share ("LPS") of 0.78 sen (0.15p*) (H1 2018: earnings of 0.81 sen (0.15p*)).

Financial results