Acquity Group Limited Reports Results for First Quarter 2013

Acquity Group Limited

Consolidated Statements of Comprehensive Income - Unaudited

(Amounts in thousands, except per share data)

Three Month Periods Ended

March 31, 2013

March 31, 2012

Revenues

$      33,763

100.0%

$     34,493

100.0%

Cost of revenues

20,563

60.9%

18,458

53.5%

Gross profit

13,200

39.1%

16,035

46.5%

Selling and marketing expenses

2,919

8.6%

2,110

6.1%

Administrative expenses 

8,829

26.1%

6,707

19.4%

Costs associated with initial public offering

-

0.0%

116

0.3%

Operating profit

1,452

4.3%

7,102

20.6%

Other non-operating expense, net

(5)

0.0%

-

0.0%

Finance income/(costs), net

19

0.1%

(15)

(0.0%)

Equity in losses of associates

-

0.0%

(442)

(1.3%)

Profit before tax

1,466

4.3%

6,645

19.3%

Income tax expense

642

1.9%

2,864

8.3%

Profit

$            824

2.4%

$       3,781

11.0%

Profit/(loss) attributable to:

Equity holders of the Company

$            824

2.4%

$       3,845

11.1%

Non-controlling interests

-

0.0%

(64)

(0.2%)

Profit

$            824

2.4%

$       3,781

11.0%

Other comprehensive profit:

Profit

$            824

2.4%

$       3,781

11.0%

Currency translation differences

(2)

0.0%

(2)

(0.0%)

Comprehensive profit

$            822

2.4%

$       3,779

11.0%

Comprehensive profit attributable to:

Equity holders of the Company

$            822

2.4%

$       3,843

11.1%

Non-controlling interests

-

0.0%

(64)

(0.2%)

Comprehensive profit

$            822

2.4%

$       3,779

11.0%

Profit per share attributable to equity holders of the Company:

American depositary shares ⁽¹⁾

$          0.04

$         0.21

Ordinary shares

$          0.02

$         0.10

Shares used in computing profit per share:

American depositary shares ⁽¹⁾

23,516.4

18,738.6

Ordinary shares

47,032.8

37,477.3

On May 2, 2012, the Company completed the IPO of its American depositary shares representing ordinary shares and is now listed on NYSE MKT under the stock symbol "AQ." Pursuant to our registration statement filed with the U.S. Securities and Exchange Commission, each American depositary share presented in the consolidated statement of comprehensive income represents two ordinary shares outstanding.

Acquity Group Limited

Consolidated Balance Sheets - Unaudited

(Amounts in thousands)

March 31, 2013

December 31, 2012

Assets

Non-current assets:

Property and equipment, net

$            5,571

$               5,872

Intangible assets

23,204

23,849

Other non-current assets

87

87

Investment in associates

189

189

Deferred tax assets

6,043

5,985

35,094

35,982

Current assets:

Trade receivables, net

27,483

26,641

Unbilled receivables

10,779

9,865

Due from customers under fixed-price contracts

479

62

Prepayments and other receivables

1,945

1,852

Cash and cash equivalents

31,387

36,454

72,073

74,874

Total assets

$        107,167

$           110,856

Equity and Liabilities

Equity:

Issued capital

$                   5

$                      5

Capital reserve

96,577

96,577

Additional paid in capital

622

-

Other comprehensive profit

(2)

-

Retained loss

(3,335)

(4,159)

Equity attributable to equity holders of the Company

93,867

92,423

Non-current liabilities:

Other

6,856

6,590

6,856

6,590

Current liabilities:

Trade payables

1,971

2,343

Other payables and accruals

4,314

8,508

Due to customers under fixed-price contracts

159

154

Accrued income taxes

-

838

6,444

11,843

Total liabilities

13,300

18,433

Total equity and liabilities

$        107,167

$           110,856

Acquity Group Limited

Consolidated Statements of Changes in Equity - Unaudited

(Amounts in thousands)

Issued

Capital

Capital

Reserve

Additional
Paid in
Capital

Other
Comprehensive
Income

Retained
Profit/(Loss)

Equity Attributable
To Equity Holders
Of The Company

Non-Controlling
Interests

Total Equity

As of 1 January 2012

$        4

$   71,030

$             -

$                68

$       (7,413)

$            63,689

$                745

$      64,434

Profit/(loss) for the period

-

-

-

-

3,845

3,845

(64)

3,781

Other comprehensive profit

-

-

-

2

-

2

-

2

Total for the period

-

-

-

2

3,845

3,847

(64)

3,783

As of 31 March 2012

$        4

$   71,030

$             -

$                70

$       (3,568)

$            67,536

$                681

$      68,217

Profit/(loss) for the period

-

-

-

-

1,154

1,154

(40)

1,114

Other comprehensive profit

-

-

-

(69)

-

(69)

-

(69)

Issuance of American depositary shares ⁽¹⁾

1

28,666

-

-

-

28,667

-

28,667

American depositary shares offering costs ⁽¹⁾

-

(3,119)

-

-

-

(3,119)

-

(3,119)

Total for the period

1

25,547

-

(69)

1,154

26,633

(40)

26,593

As of 30 June 2012

$        5

$   96,577

$            -

$                  1

$        (2,414)

$           94,169

$                641

$       94,810

Profit/(loss) for the period

-

-

-

-

3,177

3,177

(42)

3,135

Other comprehensive profit

-

-

-

(44)

-

(44)

-

(44)

Total for the period

-

-

-

(44)

3,177

3,133

(42)

3,091

As of 30 September 2012

$        5

$   96,577

$             -

$              (43)

$             763

$           97,302

$                 599

$       97,901

Loss for the period

-

-

-

-

(4,922)

(4,922)

(571)

(5,493)

Other comprehensive profit

-

-

-

43

-

43

(28)

15

Total for the period

-

-

-

43

(4,922)

(4,879)

(599)

(5,478)

As of 31 December 2012

$        5

$   96,577

$             -

$                  -

$        (4,159)

$           92,423

$                      -

$      92,423

Profit for the period

-

-

-

-

824

824

-

824

Share based payments

-

-

622

-

-

622

-

622

Other comprehensive profit

-

-

-

(2)

-

(2)

-

(2)

Total for the period

-

-

622

(2)

824

1,444

-

1,444

As of 31 March 2013

$        5

$   96,577

$        622

$               (2)

$        (3,335)

$           93,867

$                     -

$      93,867

During the three month period ended June 30, 2012, the Company recorded an additional issued capital and capital reserve related to the issuance of the Company's IPO of American depositary shares, which began trading on NYSE MKT on April 27, 2012, and was offset by costs associated with the IPO in accordance with IFRS rules.

Acquity Group Limited

Consolidated Statements of Cash Flows - Unaudited

(Amounts in thousands)

Three Month Periods Ended

March 31, 2013

March 31, 2012

Operating activities:

Profit before tax

$        1,466

$          6,645

Adjustments to reconcile profit before tax to net cash flows from operating activities:

Non-cash:

Depreciation of property and equipment

679

481

Amortization of intangible assets and straight-line rent

626

652

Impairment loss of trade receivables

222

126

Finance costs, net

(19)

15

Equity in losses of associates

-

442

Share based payments

622

-

Other

3

2

Working capital adjustments:

Trade receivables and unbilled receivables

(1,978)

(6,010)

Due from customers under fixed-price contracts

(417)

(222)

Prepayment and other receivables

(4)

(667)

Trade payables

(372)

366

Other payables and accruals

(4,165)

(2,342)

Due to customers under fixed-price contracts

5

(23)

Other non-current assets

-

(4)

Income tax paid

(1,357)

(189)

Net cash flows used in operating activities

(4,689)

(728)

Investing activities:

Purchase of property and equipment

(378)

(881)

Increase in restricted cash

-

(2,162)

Net cash flows used in investing activities

(378)

(3,043)

Net decrease in cash and cash equivalents

(5,067)

(3,771)

Cash and cash equivalents at the beginning of the period

36,454

6,875

Cash and cash equivalents at the end of the period

$      31,387

$           3,104

Acquity Group Limited

Reconciliation of Non-IFRS Financial Measures to IFRS Profit - Unaudited ⁽¹⁾ 

(Amounts in thousands, except per share data)

Three Month Periods Ended

March 31, 2013

March 31, 2012

IFRS profit attributable to equity holders, as reported

$             824

$         3,845

Finance (income)/costs, net

(19)

15

Income tax expense

642

2,864

Depreciation and amortization:

Property and equipment

679

481

Intangible assets

645

645

Costs associated with initial public offering ⁽²⁾

-

116

Equity in losses of associates

-

442

Share based payments

622

-

Non-IFRS adjusted EBITDA

$         3,393

$          8,408

Three Month Periods Ended

March 31, 2013

March 31, 2012

IFRS operating profit, as reported

$         1,452

$          7,102

Costs associated with initial public offering ⁽²⁾

-

116

Amortization of intangible assets

645

645

Share based payments

622

-

Non-IFRS operating profit

$         2,719

$          7,863

Three Month Periods Ended

March 31, 2013

March 31, 2012

IFRS profit attributable to equity holders, as reported

$            824

$          3,845

Costs associated with initial public offering ⁽²⁾

-

116

Amortization of intangible assets, net of tax

387

381

Share based payments, net of tax

398

-

Non-IFRS adjusted profit

$         1,609

$          4,342

Adjusted profit per share attributable to equity holders of the Company:

American depositary shares ⁽³⁾

$           0.07

$            0.23

Ordinary shares

$           0.03

$            0.12

Shares used in computing profit per share:

American depositary shares ⁽³⁾

23,516.4

18,738.6

Ordinary shares

47,032.8

37,477.3

(1)

The Company includes these adjusted calculations for the three month periods ended March 31, 2013 and March 31, 2012 because management believes they are useful to investors in that they provide for greater transparency with respect to supplemental information used by management in its financial and operational decision making.

Accordingly, the Company believes that the presentation of this analysis, when used in conjunction with IFRS financial measures, is a useful financial analysis tool that can assist investors in assessing the Company's operating performance and underlying prospects. This analysis should not be considered in isolation or as a substitute for profit/(loss) prepared in accordance with IFRS. This analysis, as well as the other information in this press release, should be read in conjunction with the Company's financial statements and related footnotes contained in the documents that the Company files with the U.S. Securities and Exchange Commission.

(2)

The three month period ended March 31, 2012 includes costs associated with the Company's IPO of American depositary shares, which began trading on NYSE MKT on April 27, 2012. The Company recorded this charge in accordance with IFRS rules, which allow the Company to (1) fully capitalize costs directly attributable to the IPO and (2) capitalize a portion of costs indirectly attributable to the IPO, based on the size of the offering.

(3)

On May 2, 2012, the Company completed the IPO of its American depositary shares representing ordinary shares and is now listed on NYSE MKT under the stock symbol "AQ." Pursuant to our registration statement filed with the U.S. Securities and Exchange Commission, each American depositary share presented in the Reconciliation of Non-IFRS Financial Measures to IFRS Profit represents two ordinary shares outstanding.