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Wynyard Group Delivers 63% Revenue Growth

Wynyard Group Delivers 63% Revenue Growth

Wynyard Group announces financial results for the year to 31 December 2013

Auckland, 24 February 2014 – Wynyard Group (WYN) has emerged as a market leader in critical threat assessment and advanced crime analytics software. The problems Wynyard’s software help solve including drug smuggling, human trafficking, gun running, financial and cyber crime continue to grow in scale, complexity and global impact.

Wynyard has secured a strong position in the high growth advanced crime analytics category with a powerful hard-to-copy software platform. Advanced crime analytics is a new discipline that combines the power of big data and advanced analytics, with leading crime science research and tradecraft to solve and prevent crime.

Wynyard raised new capital through an initial public offering (IPO) in 2013. This capital provided the company with the confidence and resources to rapidly expand its international sales, marketing and services operations, and continue investment in its risk management and advanced crime analytics product.

As a result of the amalgamation undertaken prior to and as a lead up to Wynyard’s NZX listing, the reported final results incorporate the nine-month trading period to 31 December 2013. The results for this nine-month period show that Wynyard Group reported audited revenue and other income of $17.0 million with a net loss after taxation of $10.1 million, including one-off initial public offering and listing costs.

Consistent with the Wynyard Group Investment Statement and Prospectus, dated 6 June 2013, the Directors believe that it is appropriate to consider the full twelve-month trading results to 31 December 2013 against prior year actuals and pro-forma financial information.

TWELVE MONTH PERFORMANCE HIGHLIGHTS TO 31 DECEMBER 2013

Unaudited Pro-Forma 2013 Full Year Actual2012 Full Year ActualPro-Forma 2013 Full Year Prospective
Total Revenue$21.7m$13.3m$21.5m
Net Loss After Tax($11.2m)($3.7m)($10.1m)
Cash at Bank$17.0m$0.6m$20.8m
Licenced End-Users110,80059,600
Revenue per Employee$162,000$125,000$160,000

REVENUE BY TYPE

Unaudited Pro-Forma 2013 Full Year Actual2012 Full Year ActualYoY ChangePro-Forma 2013 Full Year Prospective
Recurring$12.8m$9.2m+39%$12.8m
Non-Recurring$5.0m$1.6m+213%$3.4m
Professional Services$3.3m$1.7m+94%$5.1m
Other$0.6m$0.7m-14%$0.2m
Total$21.7m$13.3m+63%$21.5m

COMMENTARY

2013 was an exciting year for Wynyard Group, with the major focus following IPO being deployment of capital and resources to expand Wynyard’s global customer base and extend Wynyard’s product leadership position.

1. Wynyard’s total revenue grew by 63% over the same period last year to $21.7 million, exceeding the IPO prospective revenue forecast
Recurring revenue was 59% of total revenue and increased 39% to $12.8 million. Recurring revenue includes software-as-a-service (SaaS) subscription revenue together with software maintenance and support revenue from cloud and on-premise software deployments.

Non-recurring licence revenue, a key driver of future recurring revenue, increased by 213% to $5.0 million with strong new licence sales across all product lines.

Professional services revenue increased by 94% year-on-year to $3.3 million. Wynyard delivered its total revenue target with $1.8m less professional services effort than its IPOprospective financial information forecast. This is a favourable metric, substantiating Wynyard’s commercial-off-the-shelf product value proposition and the future scalability of Wynyard’s deployment model.

By product, revenue from Wynyard Risk Management grew by 38% to $6.5 million and Advanced Crime Analytics revenue increased 42% to $11.9 million. Advanced Crime Analytics revenue includes sales of Wynyard’s intelligence, investigations and digital forensics solutions.

By industry, 43% of Wynyard’s revenue was derived from the financial services sector, 24% from government and 33% from other sectors - mainly critical national infrastructure.

2. Wynyard expanded its footprint into South East Asia, opened new offices in the UAE and USA, and grew the Wynyard team from 106 to 151 full time employees
Wynyard now has offices in six strategic locations across three regions and has nearly doubled the size of its sales and marketing team.

In 2013, 64% of Wynyard’s revenue was from Asia Pacific where the company secured new contracts with New Zealand Police and Serious Fraud Office, two key Australian Federal Government agencies, Thai Customs Department, Queensland Rail and one of the region’s primary intelligence agencies.

EMEA (Europe, Middle East and Africa) contributed 27% of Wynyard’s total revenue following the launch of Wynyard’s financial crime detection SaaS platform in the United Arab Emirates and United Kingdom. New contracts were signed with a number of UAE-based exchange bureaus and Saudi Arabia’s leading wealth management institution. In Europe, Wynyard’s contract with a leading UK crime investigation agency was extended, one of the world’s top five banks became a customer and Wynyard was selected by a recognised inter-governmental organisation responsible for coordinating a global effort against drugs and trans-national organised crime.

In June 2013, Wynyard opened a new office in Arlington, VA. The Americas contributed 9% of Wynyard’s revenue, including a new contract with a top 20 company in the Fortune 500. In the United States, Wynyard made good progress on building a sales pipeline in financial services and state and federal government.

3. Wynyard Group signed 47 new paying customers and increased licenced end-users by 86% from 59,600 to 110,800
Wynyard is focused on embedding its core advanced crime analytics platform in strategic growth customers and sectors and aggressively growing the licenced end-user base.

By focusing on core platform penetration, Wynyard is positioning itself as the new industry standard for advanced crime analytics software. By maximising the licenced end-user base, Wynyard is growing its captive market for new software features and content in Wynyard’s product roadmap. These new features and content will grow recurring revenue and activate a network-effect across the customer organisation, adjacent agencies and globally where front-line users collaborate operationally, share workflow or data.

4. Wynyard won the 2013 Most Innovative Hi-Tech Software Product award at the NZ H-Tech Awards and was named Asia Pacific Category Winner in the 2014 RiskTech100 report by Chartis
Wynyard is now recognised as a leader and covered by the world’s top technology research analysts Gartner, Forrester and Chartis. Managing Partner at Chartis, Peyman Mestchian stated, “Organisations are looking to take advantage of link analysis, predictive modeling, artificial intelligence and real-time tools. Wynyard’s focus on smart tools for operational risk, anti-money laundering and anti-fraud management position it as an emerging leader in this space.”

Wynyard delivered new releases of its Risk Management and Advanced Crime Analytics solution in 2013, as well as pre-configured solutions for mobile device analytics, advanced traffic analysis, gun crime and open-source intelligence.

In 2013, Wynyard appointed an Advisory Board of former London Metropolitan Police and US Federal Bureau of Investigations directors, and formed an alliance with the University College London (UCL) Jill Dando Institute of Security and Crime Science (JDI). These appointments and partnerships when combined with Wynyard’s proven software design and engineering expertise, deep industry experience and international distribution network ensure Wynyard is well positioned to extend its product leadership position.

5. Total expenditure, excluding IPO costs, was $32.6 million, $1.5 million higher than IPO prospective financial information and in line with Wynyard’s November trading update
Additional expenditure was incurred on new business development initiatives, including bringing forward the recruitment of new sales and professional services staff. This had a concurrent effect of increasing on-boarding costs including induction, training and other overhead costs. Wynyard also increased investment in SaaS infrastructure in the Middle East and the United Kingdom.

One-off costs for professional and advisory fees associated with the establishment of Wynyard as a stand-alone business in six jurisdictions were higher than forecast. This was offset by the timing of capital expenditure depreciation and software amortisation.

6. Net cashflow for the year was $16.5 million against a forecast of $20.3 million, with $2.3 million being a cash collection timing difference
The timing difference is between revenue recognition and invoicing of software licences and the ultimate cash collection. Higher than anticipated IPO costs of $0.5m, increased operating expenditure, and other working capital differences account for the balance.

7. Looking forward, Wynyard is focused on increasing its financial services and government customer base in the Americas and expanding its partner channels to market
Wynyard Group’s prospective financial information forecast in its June 2013 prospectus was $27 million revenue in the year to 31 December 2014. While it is only two months into the new financial year, given Wynyard’s sales pipeline, and the size and growth profile of the risk management and advanced crime analytics software market, the Board is increasingly confident the group is likely to exceed this target. During the first quarter of 2014, management are continuing to review organisation and product readiness for acceleration of its Americas and global partner channel strategy.

Wynyard Group Managing Director, Craig Richardson, said the company would continue to invest for growth in 2014 and 2015.

“Wynyard is strongly positioned in the new fast growing advanced crime analytics market. While the end game for Wynyard is a highly profitable company with lifetime customers, investing for growth and continued momentum is critical at this stage to extend Wynyard’s product leadership position and global market share.”

Additional commentary is included in the Wynyard Group Limited 2013 Financial Statements (specifically note 26), which have also been released today. Wynyard’s 2013 Annual Report will be sent to shareholders at the end of March 2014.

About Wynyard Group: Know the threats, connect the dots and uncover the truth.

Wynyard Group is a market leader in critical threat assessment and advanced crime analytics software for government, financial services and critical national infrastructure. Wynyard’s powerful software helps assess threats, surface hidden relationships give new meaning to events and identify people of interest.

Wynyard customers include Fortune 500 companies and leading government security agencies. The company has offices in the United Kingdom, United States, Canada, United Arab Emirates, Australia and New Zealand.

For more information visit www.wynyardgroup.com

ENDS

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