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COMMUNISIS PLC INTERIM REPORT

2015

P123 Designed, produced and deployed by Communisis plc

Communisis plcLongbow House14-20 Chiswell StreetLondon EC1Y 4TWTel: +44 (0) 207 382 8950

www.communisis.com

Communication, channelled

COM-P123-InterRep-Cover.indd 3 10/08/2015 12:06

Andy Blundell Chief Executive Officer 30 July 2015

The growth momentum at Communisis continues, driven by our focus on enduring client relationships and higher margin services.

Looking ahead, supported by a strong pipeline of opportunities, the Board is confident about the Group’s prospects for the remainder of the year.


ContentsHighlights .................................................................................. 4

Strategy and Implementation .............................................. 6

Financial Statements .............................................................13Consolidated Income Statement................................................................................14Consolidated Statement of Comprehensive Income .................................................. 15Consolidated Balance Sheet ....................................................................................... 16Consolidated Cash Flow Statement ............................................................................ 17Consolidated Statement of Changes in Equity ............................................................ 18Notes to the Consolidated Financial Statements ........................................................ 19

Shareholder Information .....................................................28

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3

COM-P123-InterRep-15.indd 3 11/08/2015 13:07

Continued GrowthIntegrated agency model developed and launched as PSONA

• Life Marketing Consultancy (“Life”), an insight-led shopper marketing agency, acquired in January 2015

Significant new multi-year contractual relationships secured or retained

• AXA UK for incoming and outgoing marketing and customer communication services. Awarded in February 2015 for a six-year term

• EE for marketing communications. Extended for two years until March 2017

• A long-standing client in the utility sector for outgoing transactional communication services. Selected for a five-year extension until October 2020

Overseas expansion• Three new locations in Bucharest,

Milan and Warsaw

• New consumer goods clients have scaled up activities through the main European hubs

• A strong pipeline of opportunities with blue-chip consumer goods clients across Europe

Operational highlights

HighlightsFinancial highlights

4

HIGHLIGHTS

Comparison of H1 2015 to H1 2014 As Reported As Reported As Constant H1 2015 H1 2014 Reported Currency*

Total revenue £174.6m £169.3m +3% +6%Adjusted operating profit** £7.2m £6.1m +18% +25%Adjusted operating margin** 6.0% 5.2% +16% +20%Profit after tax £2.5m £2.2m +15% +29%Adjusted earnings per share*** 2.01p 1.75p +15% +23%Dividend per share 0.73p 0.67p +9% +9%Free cash flow £6.0m £1.1m Bank debt £32.1m £33.9m

* Constant currency: the reported numbers excluding the e¡ects of changes in exchange rates on the translation into sterling of results denominated in foreign currencies.** Adjusted operating profit and operating margin (excluding pass through): before exceptional items and the amortisation of acquired intangibles. *** Adjusted earnings per share: fully diluted and excluding the after tax e¡ects of exceptional items and the amortisation of acquired intangibles.

• Strong growth in profitability, operating margin and earnings per share, driven by enduring client relationships and higher margin services

• Improved free cash flow and reduced bank debt

• Dividend increase for the fifth consecutive year, in line with progressive dividend policy

Profit After Tax

3.0

2.5

2.0

1.5

1.0

0.5

0.0H1 2013 H1 2014 H1 2015

£m

Adjusted Earnings Per Share

2.1

1.8

1.5

1.2

0.9

0.6

0.3

0.0H1 2013 H1 2014 H1 2015

Penc

e pe

r sha

re

Free Cash Flow

8.06.04.02.00.0

(2.0)(4.0)(6.0)(8.0)

(10.0) H1 2013 H1 2014 H1 2015

£m

H1 2011 H1 2012 H1 2013 H1 2014 H1 2015

0.50pps

0.8

0.7

0.6

0.5

0.4

0.3

0.2

0.1

0.0

Penc

e per

shar

e

+9%

0.55pps0.60pps

0.67pps0.73pps

+10%+16%

+9%+12%

Progressive Dividend Policy


Continued GrowthIntegrated agency model developed and launched as PSONA

• Life Marketing Consultancy (“Life”), an insight-led shopper marketing agency, acquired in January 2015

Significant new multi-year contractual relationships secured or retained

• AXA UK for incoming and outgoing marketing and customer communication services. Awarded in February 2015 for a six-year term

• EE for marketing communications. Extended for two years until March 2017

• A long-standing client in the utility sector for outgoing transactional communication services. Selected for a five-year extension until October 2020

Overseas expansion• Three new locations in Bucharest,

Milan and Warsaw

• New consumer goods clients have scaled up activities through the main European hubs

• A strong pipeline of opportunities with blue-chip consumer goods clients across Europe

Operational highlights

InnovationNew digital services platform developed

• Provides multi-channel customer messaging services

• Successfully used by Nationwide Building Society for messages associated with its enabling of Apple Pay

Won gold and bronze POPAI awards for innovative point-of-purchase and in-store communications

Communisis plc Interim Report 2015

5

Comparison of H1 2015 to H1 2014 As Reported As Reported As Constant H1 2015 H1 2014 Reported Currency*

Total revenue £174.6m £169.3m +3% +6%Adjusted operating profit** £7.2m £6.1m +18% +25%Adjusted operating margin** 6.0% 5.2% +16% +20%Profit after tax £2.5m £2.2m +15% +29%Adjusted earnings per share*** 2.01p 1.75p +15% +23%Dividend per share 0.73p 0.67p +9% +9%Free cash flow £6.0m £1.1m Bank debt £32.1m £33.9m

* Constant currency: the reported numbers excluding the e¡ects of changes in exchange rates on the translation into sterling of results denominated in foreign currencies.** Adjusted operating profit and operating margin (excluding pass through): before exceptional items and the amortisation of acquired intangibles. *** Adjusted earnings per share: fully diluted and excluding the after tax e¡ects of exceptional items and the amortisation of acquired intangibles.

H1 2015

H1 2015

+9%

0.73pps


InnovationThe Group has developed a new digital services platform that provides multi-channel customer messaging services. This allows clients to improve their customers’ experience by delivering communications where, when and how they want to receive them. It was used successfully by Nationwide Building Society, one of the first Building Societies in the UK to enable Apple Pay, to send messages associated with this new payment system.

Communisis has won gold and bronze POPAI awards in recognition of its innovative and effective in-store and point-of-purchase displays for its Lacoste and Duracell/Furby (Hasbro) clients. The POPAI Awards represent the best that the retail marketing industry has to offer in all areas of in-store communication.

Segmental resultsRevenue, operating profit and margins before exceptional items are reported in three segments, being Design, Produce and Deploy. Pass through revenue, being those purchased materials that are passed on to clients at cost with no added value, are reported separately, as are unallocated central costs that support integrated service offerings.

The translation of foreign currency results into sterling has had a material impact on the reported numbers for the first time in 2015 due, principally, to the weakening of the euro. To illustrate the underlying performance, these currency effects have been eliminated when referring to a constant currency comparison in the following commentary.

Performance ReviewThe Group’s aspiration and strategic initiatives, set out below, were described in the Strategic Report within the 2014 Annual Report. This review summarises the performance against those strategic initiatives and the key financial targets during the first half of 2015.

Aspiration The Group’s aspiration is to be a market leader in providing personalised customer communication services both in the UK and internationally.

The key financial targets for the medium term are to deliver a double-digit margin on sales (excluding pass through) and to derive more than 20% of total revenues from overseas sources whilst continuing to grow UK sales. The new longer-term goal is for overseas revenues to account for one third of the total.

Strategic initiatives The Group’s aspiration is pursued through a number of strategic initiatives including:

• growing sales both organically and through niche acquisitions;

• extending activities to broaden and deepen the service offering;

• further diversifying the client portfolio beyond the financial services sector;

• following international clients into overseas markets;

• investing in specialist, market-leading technologies; and

• continuing to optimise the direct cost and overhead base.

Improvement in margins is delivered through the combined effect of better capacity utilisation, the benefit of cost reduction programmes, synergies from acquisitions and a focus on growing volumes of high margin services.

Improving the capital structure and managing the exposure to the pension deficit are also priorities as is the adoption of a progressive dividend policy that is important for most investor categories.

Summary financial performanceCommunisis continued to deliver profitable growth with an improved operating margin in the first half of 2015. The results were on target and considerably ahead of the same period last year, enabling the Group to maintain its progressive dividend policy. The interim dividend for the first six months of 2015 has consequently been increased by 9%.

Additional profitability and tight working capital control with the benefit of a tax repayment, delivered strong operating cash flow during the period. With capital expenditure falling toward a normal maintenance level, the Group generated significantly more free cash; a trend that is expected to continue for the next few years.

Further details are included in the segmental results and cash and net debt sections of this report.

Growth New business development included the award of a six-year contract with AXA UK (“AXA”) for the provision of incoming and outgoing marketing and operational customer communication services including creative, print, digital and postal distribution and document management services. The contract covers all AXA’s brands including SunLife, Wealth, Insurance and PPP healthcare.

Under the outsourcing arrangements, the Group has assumed responsibility for a number of AXA’s existing UK inbound and print centres including those at Lytham St Anne’s, Ipswich, Bristol and Basingstoke with around 115 staff transferring to Communisis under TUPE regulations.

The initial transition phase was successfully completed and the contract went live at the end of April 2015 as planned.

After competitive tendering processes, EE extended its marketing communications contract for two years until March 2017 and a long-standing client in the utility sector selected Communisis for the provision of outgoing transactional communication services for a further five years until October 2020.

Overseas expansion Overseas expansion of the Group’s brand activation services has continued in 2015. Three new locations have been added in Bucharest, Milan and Warsaw and activities have been scaled up through the main European hubs with new clients in the drinks, food, pharmaceutical and technology sectors. These market share gains will help to offset a fall in demand from lower margin UK print sourcing clients.

The pipeline of opportunities with blue-chip consumer goods groups across Europe is strong, offering good potential for profitable growth.

AcquisitionCommunisis continued to develop its differentiated and integrated agency model during the period with the launch of PSONA as a new agency brand and the acquisition of Life Marketing Consultancy (“Life”), an insight-led shopper marketing agency that was completed in January 2015.

Strategy and Implementation

6

STRATEGY AND IMPLEMENTATION


InnovationThe Group has developed a new digital services platform that provides multi-channel customer messaging services. This allows clients to improve their customers’ experience by delivering communications where, when and how they want to receive them. It was used successfully by Nationwide Building Society, one of the first Building Societies in the UK to enable Apple Pay, to send messages associated with this new payment system.

Communisis has won gold and bronze POPAI awards in recognition of its innovative and effective in-store and point-of-purchase displays for its Lacoste and Duracell/Furby (Hasbro) clients. The POPAI Awards represent the best that the retail marketing industry has to offer in all areas of in-store communication.

Segmental resultsRevenue, operating profit and margins before exceptional items are reported in three segments, being Design, Produce and Deploy. Pass through revenue, being those purchased materials that are passed on to clients at cost with no added value, are reported separately, as are unallocated central costs that support integrated service offerings.

The translation of foreign currency results into sterling has had a material impact on the reported numbers for the first time in 2015 due, principally, to the weakening of the euro. To illustrate the underlying performance, these currency effects have been eliminated when referring to a constant currency comparison in the following commentary.

Additional profitability and tight working capital control with the benefit of a tax repayment, delivered strong operating cash flow during the period. With capital expenditure falling toward a normal maintenance level, the Group generated significantly more free cash; a trend that is expected to continue for the next few years.

Further details are included in the segmental results and cash and net debt sections of this report.

Growth New business development included the award of a six-year contract with AXA UK (“AXA”) for the provision of incoming and outgoing marketing and operational customer communication services including creative, print, digital and postal distribution and document management services. The contract covers all AXA’s brands including SunLife, Wealth, Insurance and PPP healthcare.

Under the outsourcing arrangements, the Group has assumed responsibility for a number of AXA’s existing UK inbound and print centres including those at Lytham St Anne’s, Ipswich, Bristol and Basingstoke with around 115 staff transferring to Communisis under TUPE regulations.

The initial transition phase was successfully completed and the contract went live at the end of April 2015 as planned.

After competitive tendering processes, EE extended its marketing communications contract for two years until March 2017 and a long-standing client in the utility sector selected Communisis for the provision of outgoing transactional communication services for a further five years until October 2020.

Overseas expansion Overseas expansion of the Group’s brand activation services has continued in 2015. Three new locations have been added in Bucharest, Milan and Warsaw and activities have been scaled up through the main European hubs with new clients in the drinks, food, pharmaceutical and technology sectors. These market share gains will help to offset a fall in demand from lower margin UK print sourcing clients.

The pipeline of opportunities with blue-chip consumer goods groups across Europe is strong, offering good potential for profitable growth.

AcquisitionCommunisis continued to develop its differentiated and integrated agency model during the period with the launch of PSONA as a new agency brand and the acquisition of Life Marketing Consultancy (“Life”), an insight-led shopper marketing agency that was completed in January 2015.


7


ProfitabilityThe table below is an extract from the Group’s segmental Income Statement.

HY 2015 HY 2014 £m £m

Revenue

Design 16.5 11.5

Produce 78.2 77.8

Deploy 24.1 27.0

Pass Through 55.8 53.0

174.6 169.3

Adjusted profit from operations

Design 2.0 1.6

Produce 9.7 8.7

Deploy 5.8 5.6

Central costs (6.6) (6.5)

Corporate costs (3.7) (3.3)

7.2 6.1

Amortisation of acquired intangibles (0.8) (0.4)

Profit from operations before exceptional items 6.4 5.7

Contribution to overheads (on adjusted operating profit excluding pass through)

Design 12.2% 13.9%

Produce 12.5% 11.2%

Deploy 24.1% 20.7%

Operating margin (on adjusted operating profit excluding pass through) 6.0% 5.2%

Exceptional items (1.4) (1.2)

Profit from operations after exceptional items 5.0 4.5

Net finance costs (1.8) (1.6)

Profit before tax 3.2 2.9

Tax (0.7) (0.7)

Profit after tax 2.5 2.2

Earnings per share

Basic (p) 1.20 1.11

Adjusted (p) 2.08 1.79

Adjusted fully diluted (p) 2.01 1.75

Total revenue was 3% ahead at £174.6m (H1 2014 £169.3m), 6% on a constant currency basis. The proportion derived from overseas was 18% (H1 2014 19%) still close to the medium-term target of 20% but adversely affected by the currency translation effects.

Revenue

50.0

75.0

100.0

125.0

150.0

175.0

200.0

£m

H1 2011 H1 2012 H1 2013 H1 2014 H1 2015

Revenue excluding pass throughTotal revenue

Adjusted operating profit increased 18% to £7.2m (H1 2014 £6.1m), 25% on a constant currency basis. The operating margin, a key financial metric, improved to 6.0% (H1 2014 5.2%) with further enhancements expected in the second half of the year, as higher seasonal revenues are generated from a comparable cost base, taking the margin further toward the double-digit target in the full year.

Progress towards double-digit returns

*H1 2011 *H1 2012 H1 2013 H1 2014 H1 2015

£3.3m

0

1

2

3

4

5

6

7

8

%£m

5.6%5.2%

6.0%

4.9%

4.0%

£4.3m

£5.1m

£6.1m

£7.2m

Operating margin (on sales excluding pass through)Adjusted operating profit

* restated for the e�ects of IAS19R

0.0

4.0

1.0

5.0

2.0

7.0

3.0

6.0

All segments contributed to the overall increase in revenue on a constant currency basis but Deploy and the associated pass through revenue were broadly flat on a reported basis, as about half of the transactions were euro denominated and therefore of lower value when translated into sterling. The mix of Deploy revenues varies between periods reflecting changing patterns of geographic demand coupled with a diversification and expansion of the client

8



ProfitabilityThe table below is an extract from the Group’s segmental Income Statement.

HY 2015 HY 2014 £m £m

Revenue

Design 16.5 11.5

Produce 78.2 77.8

Deploy 24.1 27.0

Pass Through 55.8 53.0

174.6 169.3

Adjusted profit from operations

Design 2.0 1.6

Produce 9.7 8.7

Deploy 5.8 5.6

Central costs (6.6) (6.5)

Corporate costs (3.7) (3.3)

7.2 6.1

Amortisation of acquired intangibles (0.8) (0.4)


Contribution to overheads (on adjusted operating profit excluding pass through)

Design 12.2% 13.9%

Produce 12.5% 11.2%

Deploy 24.1% 20.7%

Operating margin (on adjusted operating profit excluding pass through) 6.0% 5.2%


Profit from operations after exceptional items 5.0 4.5

Net finance costs (1.8) (1.6)

Profit before tax 3.2 2.9

Tax (0.7) (0.7)

Profit after tax 2.5 2.2

Earnings per share

Basic (p) 1.20 1.11

Adjusted (p) 2.08 1.79

Adjusted fully diluted (p) 2.01 1.75

xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx

portfolio. Design revenue was substantially higher, reflecting a full six months’ contribution from the agencies acquired during 2014 and in early 2015 together with a recovery in the data services business following its repositioning in analytics and to appeal to broader market sectors than its historic focus on insurance. The overall increase in Produce revenue was the net effect of a number of offsetting factors. Volumes eroded faster than expected in chequebooks but more slowly in transactional activities as customers appeared to show some reluctance to migrate from paper to digital formats at the rate anticipated. These reductions were offset by the benefit of a full six months’ contribution from incoming customer communications services (acquired under a contract with Lloyds Banking Group (“LBG”) in February 2014) and growth in digital distribution, both of which are higher margin services, together with better than expected demand for direct mail.

The changing mix of activities toward higher margin services, coupled with the benefit of process improvement and cost reduction within the Produce segment, resulted in a substantial improvement in the adjusted operating profit and margin despite the adverse foreign currency translation effect. Segmental margins were also better within the Produce and Deploy segments but somewhat lower than the prior period in Design. This reflected some price pressure from larger clients but also the effect of a seasonal trading pattern in shopper marketing. With this activity, which is new in 2015, revenues and profits tend to be weighted toward the second half of the year whilst the cost base is more evenly spread. The full year margin should therefore be higher with the benefit of these later revenues.

The exceptional charge of £1.4m includes further restructuring costs principally associated with the ongoing integration of the LBG activities and professional fees incurred in connection with the acquisition of Life. A further £0.5m of exceptional integration charges is anticipated in the second half of the year.

The 2015 tax charge is based on the estimated effective rate for the year of 22.9% which is higher than the UK standard rate of 21.25% as it includes the taxation of certain overseas profits in higher-rate jurisdictions.

Profit after tax increased by 15% to £2.5m (H1 2014 £2.2m), 29% on a constant currency basis. Basic earnings per share were 8% higher at 1.20p (H1 2014 1.11p), 22% on a constant currency basis, which is lower than the growth rate for profit after tax due to the dilutive effect of new shares issued in connection with acquisitions.

Dividends of 1.33p per share were paid in the first half of 2015 in respect of 2014 and an interim dividend of 0.73p per share will be paid for 2015, an increase of 9% on the prior year. The dividend will be paid on 8 October 2015 to shareholders on the register at the close of business on 11 September 2015.

Total revenue was 3% ahead at £174.6m (H1 2014 £169.3m), 6% on a constant currency basis. The proportion derived from overseas was 18% (H1 2014 19%) still close to the medium-term target of 20% but adversely affected by the currency translation effects.

Revenue

50.0

75.0

100.0

125.0

150.0

175.0

200.0

£m

H1 2011 H1 2012 H1 2013 H1 2014 H1 2015

Revenue excluding pass throughTotal revenue

Adjusted operating profit increased 18% to £7.2m (H1 2014 £6.1m), 25% on a constant currency basis. The operating margin, a key financial metric, improved to 6.0% (H1 2014 5.2%) with further enhancements expected in the second half of the year, as higher seasonal revenues are generated from a comparable cost base, taking the margin further toward the double-digit target in the full year.

Progress towards double-digit returns

*H1 2011 *H1 2012 H1 2013 H1 2014 H1 2015

£3.3m

0

1

2

3

4

5

6

7

8

%£m

5.6%5.2%

6.0%

4.9%

4.0%

£4.3m

£5.1m

£6.1m

£7.2m

Operating margin (on sales excluding pass through)Adjusted operating profit

* restated for the e¢ects of IAS19R

0.0

4.0

1.0

5.0

2.0

7.0

3.0

6.0

All segments contributed to the overall increase in revenue on a constant currency basis but Deploy and the associated pass through revenue were broadly flat on a reported basis, as about half of the transactions were euro denominated and therefore of lower value when translated into sterling. The mix of Deploy revenues varies between periods reflecting changing patterns of geographic demand coupled with a diversification and expansion of the client

9



Cash flow and net debtThe table below summarises the cash flows for the period and the closing net debt position.

HY 2015 HY 2014 £m £m


Depreciation and other non-cash items 6.4 5.6

Increase in working capital (0.6) (0.2)

Pension scheme contributions (0.6) (0.6)

Interest and tax (0.5) (1.9)

Net operating cash flow before exceptional items 11.1 8.6


Net operating cash flow 9.4 6.7

Net capital expenditure (3.4) (5.6)

Free cash flow 6.0 1.1

Investment in new contracts (1.1) (1.4)

Acquisition of subsidiary undertakings – (5.8)

Dividends paid (2.8) (2.3)

Debt arrangement fees – (0.1)

Share issues net of directly attributable expenses – 0.3

Other (0.7) (0.3)

Decrease / (increase) in bank debt 1.4 (8.5)

Opening bank debt (33.5) (25.4)

Closing bank debt (32.1) (33.9)

Bank debt (32.1) (33.9)

Unamortised borrowing costs 0.4 0.6

Net bank debt (31.7) (33.3)

Finance lease creditor (2.4) (2.9)

Promissory loan notes (9.3) –

Net debt (43.4) (36.2)

The net cash inflow of £1.4m was used to reduce bank debt at the period end to £32.1m, a level that was less than 50% of the Group’s facilities of £70m. Intra-period fluctuations in working capital increased the level of indebtedness between reporting periods so that average bank debt during the period was £44.5m. Bank debt at the period end and average bank debt during the period were respectively 1.1 times and 1.6 times EBITDA for the twelve months to June 2015. Interest cover from adjusted operating profit for the period was 4 times. Both measures reflect the Group’s disciplined approach to debt management.

The promissory loan notes associated with the Life acquisition of £9.3m increased net debt at 30 June 2015 to £43.4m.

Net operating cash flow was £2.7m better than in the corresponding period of 2014 due to increased profitability, working capital management and a tax repayment. Lower capital expenditure at a more normal maintenance level, following a period of significant investment in new capacity, resulted in a £4.9m improvement in free cash flow, a trend that is expected to continue.

There was no net cash payment for the acquisition of Life as the initial consideration was satisfied by the issue of promissory loan notes and new shares.

The dividend payments represented the final dividend for 2014 with the higher amount reflecting both the 11% increase in the dividend per share for that year and the greater number of shares in issue.

Bank Debt and Facilities

60.0

70.0

80.0

50.0

40.0

30.0

20.0

10.0

0.012M to June 11 12M to June 12 12M to June 13 12M to June 14 12M to June 15

£m

Total facilitiesAverage intra period bank debtPeriod end bank debt

Board appointmentsIn May 2015, Non-Executive Director Peter Harris was appointed as Senior Independent Director in addition to his role as Audit Committee Chairman.

OutlookThe Group’s continued success in winning and retaining multi-year contracts for customer communication services, together with its growing reputation for delivering brand activation services across Europe, is building a strong pipeline of work and opportunities with an increasing number of blue-chip clients.

With the prospect of ongoing revenue growth, improving profitability and cash generation, the Board is confident about the Group’s prospects for the remainder of the year.

Andy Blundell Chief Executive Officer

Mark Stoner Finance Director

10



Cash flow and net debtThe table below summarises the cash flows for the period and the closing net debt position.

HY 2015 HY 2014 £m £m


Depreciation and other non-cash items 6.4 5.6

Increase in working capital (0.6) (0.2)

Pension scheme contributions (0.6) (0.6)

Interest and tax (0.5) (1.9)

Net operating cash flow before exceptional items 11.1 8.6


Net operating cash flow 9.4 6.7

Net capital expenditure (3.4) (5.6)

Free cash flow 6.0 1.1

Investment in new contracts (1.1) (1.4)

Acquisition of subsidiary undertakings – (5.8)

Dividends paid (2.8) (2.3)

Debt arrangement fees – (0.1)

Share issues net of directly attributable expenses – 0.3

Other (0.7) (0.3)

Decrease / (increase) in bank debt 1.4 (8.5)

Opening bank debt (33.5) (25.4)

Closing bank debt (32.1) (33.9)

Bank debt (32.1) (33.9)

Unamortised borrowing costs 0.4 0.6

Net bank debt (31.7) (33.3)

Finance lease creditor (2.4) (2.9)

Promissory loan notes (9.3) –

Net debt (43.4) (36.2)

The net cash inflow of £1.4m was used to reduce bank debt at the period end to £32.1m, a level that was less than 50% of the Group’s facilities of £70m. Intra-period fluctuations in working capital increased the level of indebtedness between reporting periods so that average bank debt during the period was £44.5m. Bank debt at the period end and average bank debt during the period were respectively 1.1 times and 1.6 times EBITDA for the twelve months to June 2015. Interest cover from adjusted operating profit for the period was 4 times. Both measures reflect the Group’s disciplined approach to debt management.

The promissory loan notes associated with the Life acquisition of £9.3m increased net debt at 30 June 2015 to £43.4m.

Bank Debt and Facilities

60.0

70.0

80.0

50.0

40.0

30.0

20.0

10.0

0.012M to June 11 12M to June 12 12M to June 13 12M to June 14 12M to June 15

£m

Total facilitiesAverage intra period bank debtPeriod end bank debt

Board appointmentsIn May 2015, Non-Executive Director Peter Harris was appointed as Senior Independent Director in addition to his role as Audit Committee Chairman.

OutlookThe Group’s continued success in winning and retaining multi-year contracts for customer communication services, together with its growing reputation for delivering brand activation services across Europe, is building a strong pipeline of work and opportunities with an increasing number of blue-chip clients.

With the prospect of ongoing revenue growth, improving profitability and cash generation, the Board is confident about the Group’s prospects for the remainder of the year.

Andy Blundell Chief Executive Officer

Mark Stoner Finance Director

11



121212


13

Financial Statements


Consolidated Statement of Comprehensive Incomefor the half year ended 30 June 2015

Half year Half year Year ended ended ended 30 June 30 June 31 Dec 2015 2014 2014 (unaudited) (unaudited) (audited) £000 £000 £000

Profit / (loss) for the period 2,486 2,170 (15,109)

Other comprehensive income / (loss) to be reclassified to profit or loss in subsequent periods:

Exchange di�erences on translation of foreign operations (521) (223) (296)

Gain / (loss) on cash flow hedges taken directly to equity 81 15 (252)

Income tax thereon (17) (4) 50

Items not to be reclassified to profit or loss in subsequent periods:

Actuarial losses on defined benefit pension plans (135) (3,812) (11,329)

Income tax thereon 27 762 2,266

Other comprehensive loss for the period, net of tax (565) (3,262) (9,561)

Total comprehensive income / (loss) for the period, net of tax 1,921 (1,092) (24,670)

Attributable to:

Equity holders of the parent 1,921 (1,092) (24,670)

The accompanying notes are an integral part of these Consolidated Financial Statements.

Consolidated Income Statementfor the half year ended 30 June 2015

Half year ended Half year ended Year ended 30 June 2015 30 June 2014 31 Dec 2014 (unaudited) (unaudited) (audited)

Before Before Before amortisation Amortisation amortisation Amortisation amortisation Amortisation of acquired of acquired of acquired of acquired of acquired of acquired intangibles intangibles intangibles intangibles intangibles intangibles and and and and and and exceptional exceptional exceptional exceptional exceptional exceptional items items Total items items Total items items Total Note £000 £000 £000 £000 £000 £000 £000 £000 £000

Revenue 1 174,576 – 174,576 169,343 – 169,343 343,026 – 343,026

Changes in inventories of finished goods and work in progress (613) – (613) 357 – 357 303 – 303

Raw materials and consumables used (88,719) – (88,719) (97,436) – (97,436) (188,330) – (188,330)

Employee benefits expense (47,338) (805) (48,143) (41,791) (706) (42,497) (87,301) (3,258) (90,559)

Other operating expenses (25,235) (551) (25,786) (19,441) (501) (19,942) (41,178) (21,421) (62,599)

Depreciation and amortisation expense (5,495) (783) (6,278) (4,973) (429) (5,402) (10,505) (1,008) (11,513)

Profit / (loss) from operations 1 7,176 (2,139) 5,037 6,059 (1,636) 4,423 16,015 (25,687) (9,672)

Finance revenue 3 113 – 113 6 – 6 6 – 6

Finance costs 3 (1,925) – (1,925) (1,550) – (1,550) (3,592) – (3,592)

Profit / (loss) before taxation 5,364 (2,139) 3,225 4,515 (1,636) 2,879 12,429 (25,687) (13,258)

Income tax expense 4 (1,065) 326 (739) (1,012) 303 (709) (3,060) 1,209 (1,851)

Profit / (loss) for the period attributable to equity holders of the parent 4,299 (1,813) 2,486 3,503 (1,333) 2,170 9,369 (24,478) (15,109)

Earnings / (loss) per share 5

On profit / (loss) for the period attributable to equity holders and from continuing operations

– basic 2.08p 1.20p 1.79p 1.11p 4.75p (7.67) p

– diluted 2.01p 1.16p 1.75p 1.08p 4.62p (7.45) p

Dividend per share 6

– paid 1.33p 1.20p 1.84p

– proposed 0.73p 0.67p 1.33p

Dividends paid and proposed during the period were £2.8 million and £1.5 million respectively (30 June 2014 £2.3 million and £1.3 million respectively, 31 December 2014 £3.7 million and £2.8 million respectively).


All income and expenses relate to continuing operations.

14


Consolidated Statement of Comprehensive Incomefor the half year ended 30 June 2015


Profit / (loss) for the period 2,486 2,170 (15,109)

Other comprehensive income / (loss) to be reclassified to profit or loss in subsequent periods:

Exchange di�erences on translation of foreign operations (521) (223) (296)

Gain / (loss) on cash flow hedges taken directly to equity 81 15 (252)

Income tax thereon (17) (4) 50

Items not to be reclassified to profit or loss in subsequent periods:

Actuarial losses on defined benefit pension plans (135) (3,812) (11,329)

Income tax thereon 27 762 2,266

Other comprehensive loss for the period, net of tax (565) (3,262) (9,561)

Total comprehensive income / (loss) for the period, net of tax 1,921 (1,092) (24,670)

Attributable to:

Equity holders of the parent 1,921 (1,092) (24,670)


Consolidated Income Statementfor the half year ended 30 June 2015

Half year ended Half year ended Year ended 30 June 2015 30 June 2014 31 Dec 2014 (unaudited) (unaudited) (audited)

Before Before Before amortisation Amortisation amortisation Amortisation amortisation Amortisation of acquired of acquired of acquired of acquired of acquired of acquired intangibles intangibles intangibles intangibles intangibles intangibles and and and and and and exceptional exceptional exceptional exceptional exceptional exceptional items items Total items items Total items items Total Note £000 £000 £000 £000 £000 £000 £000 £000 £000

Revenue 1 174,576 – 174,576 169,343 – 169,343 343,026 – 343,026

Changes in inventories of finished goods and work in progress (613) – (613) 357 – 357 303 – 303

Raw materials and consumables used (88,719) – (88,719) (97,436) – (97,436) (188,330) – (188,330)

Employee benefits expense (47,338) (805) (48,143) (41,791) (706) (42,497) (87,301) (3,258) (90,559)

Other operating expenses (25,235) (551) (25,786) (19,441) (501) (19,942) (41,178) (21,421) (62,599)

Depreciation and amortisation expense (5,495) (783) (6,278) (4,973) (429) (5,402) (10,505) (1,008) (11,513)

Profit / (loss) from operations 1 7,176 (2,139) 5,037 6,059 (1,636) 4,423 16,015 (25,687) (9,672)

Finance revenue 3 113 – 113 6 – 6 6 – 6

Finance costs 3 (1,925) – (1,925) (1,550) – (1,550) (3,592) – (3,592)

Profit / (loss) before taxation 5,364 (2,139) 3,225 4,515 (1,636) 2,879 12,429 (25,687) (13,258)

Income tax expense 4 (1,065) 326 (739) (1,012) 303 (709) (3,060) 1,209 (1,851)

Profit / (loss) for the period attributable to equity holders of the parent 4,299 (1,813) 2,486 3,503 (1,333) 2,170 9,369 (24,478) (15,109)

Earnings / (loss) per share 5

On profit / (loss) for the period attributable to equity holders and from continuing operations

– basic 2.08p 1.20p 1.79p 1.11p 4.75p (7.67) p

– diluted 2.01p 1.16p 1.75p 1.08p 4.62p (7.45) p

Dividend per share 6

– paid 1.33p 1.20p 1.84p

– proposed 0.73p 0.67p 1.33p

Dividends paid and proposed during the period were £2.8 million and £1.5 million respectively (30 June 2014 £2.3 million and £1.3 million respectively, 31 December 2014 £3.7 million and £2.8 million respectively).


All income and expenses relate to continuing operations.


15


Consolidated Cash Flow Statementfor the half year ended 30 June 2015

Consolidated Balance Sheet30 June 2015


ASSETS Non-current assetsProperty, plant and equipment 24,599 24,509 25,246

Intangible assets 193,789 195,841 175,545

Trade and other receivables 446 240 265

Deferred tax assets 4,622 3,091 4,726

223,456 223,681 205,782

Current assetsInventories 6,808 8,131 8,379

Trade and other receivables 66,833 61,285 56,098

Cash and cash equivalents 25,915 21,095 24,503

99,556 90,511 88,980

TOTAL ASSETS 323,012 314,192 294,762

EQUITY AND LIABILITIESEquity attributable to the equity holders of the parentEquity share capital 51,868 49,728 49,757

Share premium 10,043 8,032 8,036

Merger reserve 11,427 11,427 11,427

ESOP reserve (10) (72) (72)

Capital redemption reserve 1,375 1,375 1,375

Cumulative translation adjustment (1,156) (562) (635)

Retained earnings 45,556 70,380 45,818

Total equity 119,103 140,308 115,706

Non-current liabilitiesInterest-bearing loans and borrowings 59,398 56,438 59,612

Trade and other payables 17,929 3,915 2,638

Financial liability 192 – 273

Retirement benefit obligations 39,224 31,432 39,098

116,743 91,785 101,621

Current liabilitiesInterest-bearing loans and borrowings 606 885 738


Income tax payable 2,172 1,291 382

Provisions 666 641 631

Financial liability – 6 –

87,166 82,099 77,435

Total liabilities 203,909 173,884 179,056

TOTAL EQUITY AND LIABILITIES 323,012 314,192 294,762


Half year Half year Year ended ended ended 30 June 30 June 31 Dec 2015 2014 2014 (unaudited) (unaudited) (audited) Note £000 £000 £000

Cash flows from operating activities

Cash generated from operations 7 9,977 8,699 21,987

Interest paid (1,108) (732) (1,799)

Interest received 7 6 6

Income tax received / (paid) 571 (1,191) (2,914)

Net cash flows from operating activities 9,447 6,782 17,280

Cash flows from investing activities

Acquisition of subsidiary undertakings (net of cash acquired) (37) (5,818) (6,476)

Purchase of property, plant and equipment (2,320) (4,141) (6,532)

Proceeds from the sale of property, plant and equipment 110 5 602

Purchase of intangible assets (2,308) (2,765) (8,524)

Net cash flows from investing activities (4,555) (12,719) (20,930)

Cash flows from financing activities

Share issues net of directly attributable expenses 20 310 343

New borrowings – 11,000 14,000

Debt arrangement fees (10) (100) (100)

Dividends paid 6 (2,758) (2,333) (3,665)

Net cash flows from financing activities (2,748) 8,877 10,578

Net increase in cash and cash equivalents 2,144 2,940 6,928

Cash and cash equivalents at 1 January 24,503 18,642 18,642

Exchange rate e�ects (732) (487) (1,067)

Cash and cash equivalents at end of period 25,915 21,095 24,503

Cash and cash equivalents consist of:



16


Consolidated Cash Flow Statementfor the half year ended 30 June 2015

Consolidated Balance Sheet30 June 2015


ASSETS Non-current assetsProperty, plant and equipment 24,599 24,509 25,246

Intangible assets 193,789 195,841 175,545

Trade and other receivables 446 240 265

Deferred tax assets 4,622 3,091 4,726

223,456 223,681 205,782

Current assetsInventories 6,808 8,131 8,379

Trade and other receivables 66,833 61,285 56,098


99,556 90,511 88,980

TOTAL ASSETS 323,012 314,192 294,762

EQUITY AND LIABILITIESEquity attributable to the equity holders of the parentEquity share capital 51,868 49,728 49,757

Share premium 10,043 8,032 8,036

Merger reserve 11,427 11,427 11,427

ESOP reserve (10) (72) (72)

Capital redemption reserve 1,375 1,375 1,375

Cumulative translation adjustment (1,156) (562) (635)

Retained earnings 45,556 70,380 45,818

Total equity 119,103 140,308 115,706

Non-current liabilitiesInterest-bearing loans and borrowings 59,398 56,438 59,612


Financial liability 192 – 273

Retirement benefit obligations 39,224 31,432 39,098

116,743 91,785 101,621

Current liabilitiesInterest-bearing loans and borrowings 606 885 738


Income tax payable 2,172 1,291 382

Provisions 666 641 631

Financial liability – 6 –

87,166 82,099 77,435

Total liabilities 203,909 173,884 179,056

TOTAL EQUITY AND LIABILITIES 323,012 314,192 294,762


Half year Half year Year ended ended ended 30 June 30 June 31 Dec 2015 2014 2014 (unaudited) (unaudited) (audited) Note £000 £000 £000

Cash flows from operating activities

Cash generated from operations 7 9,977 8,699 21,987

Interest paid (1,108) (732) (1,799)

Interest received 7 6 6

Income tax received / (paid) 571 (1,191) (2,914)

Net cash flows from operating activities 9,447 6,782 17,280

Cash flows from investing activities

Acquisition of subsidiary undertakings (net of cash acquired) (37) (5,818) (6,476)

Purchase of property, plant and equipment (2,320) (4,141) (6,532)

Proceeds from the sale of property, plant and equipment 110 5 602

Purchase of intangible assets (2,308) (2,765) (8,524)

Net cash flows from investing activities (4,555) (12,719) (20,930)

Cash flows from financing activities

Share issues net of directly attributable expenses 20 310 343

New borrowings – 11,000 14,000

Debt arrangement fees (10) (100) (100)

Dividends paid 6 (2,758) (2,333) (3,665)

Net cash flows from financing activities (2,748) 8,877 10,578

Net increase in cash and cash equivalents 2,144 2,940 6,928

Cash and cash equivalents at 1 January 24,503 18,642 18,642

Exchange rate e�ects (732) (487) (1,067)

Cash and cash equivalents at end of period 25,915 21,095 24,503

Cash and cash equivalents consist of:



17



Capital Cumulative Issued Share Merger ESOP redemption translation Retained Total capital premium reserve reserve reserve adjustment earnings equity £000 £000 £000 £000 £000 £000 £000 £000

As at 1 January 2015 49,757 8,036 11,427 (72) 1,375 (635) 45,818 115,706

Profit for the year – – – – – – 2,486 2,486

Other comprehensive loss – – – – – (521) (44) (565)

Total comprehensive income – – – – – (521) 2,442 1,921

Employee share option schemes – value of services provided – – – – – – 214 214

Shares issued – exercise of options 114 4 – – – – (98) 20

Acquisition of subsidiaries 1,997 2,003 – – – – – 4,000

Shares issued from ESOP – – – 62 – – (62) –

Dividends paid – – – – – – (2,758) (2,758)

As at 30 June 2015 (unaudited) 51,868 10,043 11,427 (10) 1,375 (1,156) 45,556 119,103

As at 1 January 2014 48,601 6,799 11,427 (77) 1,375 (339) 73,369 141,155

Profit for the period – – – – – – 2,170 2,170

Other comprehensive loss – – – – – (223) (3,039) (3,262)

Total comprehensive loss – – – – – (223) (869) (1,092)


Shares issued – exercise of options 298 12 – – – – – 310

Acquisition of subsidiaries 829 1,221 – – – – – 2,050


Dividends paid – – – – – – (2,333) (2,333)

As at 30 June 2014 (unaudited) 49,728 8,032 11,427 (72) 1,375 (562) 70,380 140,308

As at 1 January 2014 48,601 6,799 11,427 (77) 1,375 (339) 73,369 141,155

Loss for the year – – – – – – (15,109) (15,109)


Total comprehensive loss – – – – – (296) (24,374) (24,670)





Dividends paid – – – – – – (3,665) (3,665)

As at 31 December 2014 (audited) 49,757 8,036 11,427 (72) 1,375 (635) 45,818 115,706


Consolidated Statement of Changes in Equityfor the half year ended 30 June 2015

Notes to the Consolidated Financial Statements

for the half year ended 30 June 2015

1 Segmental information

Business segments

The segment results for the half year ended 30 June 2015 are as follows:

Pass Central Corporate Design Produce Deploy Through Costs Costs Total £000 £000 £000 £000 £000 £000 £000

Revenue 16,451 78,199 24,089 55,837 – – 174,576

Profit from operations before amortisation of acquired intangibles and exceptional items 2,003 9,745 5,794 – (6,596) (3,770) 7,176

Amortisation of acquired intangibles (659) (124) – – – – (783)

Profit from operations before exceptional items 1,344 9,621 5,794 – (6,596) (3,770) 6,393

Exceptional items (179) (593) – – 7 (591) (1,356)

Profit from operations 1,165 9,028 5,794 – (6,589) (4,361) 5,037

The segment results for the half year ended 30 June 2014 were as follows:


Revenue 11,566 77,784 27,024 52,969 – – 169,343




Exceptional items – (939) – – (198) (70) (1,207)


The segment results for the year ended 31 December 2014 were as follows:


Revenue 26,497 150,708 55,175 110,646 – – 343,026


Amortisation of acquired intangibles (597) (411) – – – – (1,008)


Exceptional items (548) (23,730) (52) – (29) (320) (24,679)

Loss from operations 2,212 (5,250) 13,760 – (13,448) (6,946) (9,672)

18


Capital Cumulative Issued Share Merger ESOP redemption translation Retained Total capital premium reserve reserve reserve adjustment earnings equity £000 £000 £000 £000 £000 £000 £000 £000

As at 1 January 2015 49,757 8,036 11,427 (72) 1,375 (635) 45,818 115,706

Profit for the year – – – – – – 2,486 2,486

Other comprehensive loss – – – – – (521) (44) (565)

Total comprehensive income – – – – – (521) 2,442 1,921


Shares issued – exercise of options 114 4 – – – – (98) 20

Acquisition of subsidiaries 1,997 2,003 – – – – – 4,000


Dividends paid – – – – – – (2,758) (2,758)

As at 30 June 2015 (unaudited) 51,868 10,043 11,427 (10) 1,375 (1,156) 45,556 119,103

As at 1 January 2014 48,601 6,799 11,427 (77) 1,375 (339) 73,369 141,155

Profit for the period – – – – – – 2,170 2,170


Total comprehensive loss – – – – – (223) (869) (1,092)





Dividends paid – – – – – – (2,333) (2,333)

As at 30 June 2014 (unaudited) 49,728 8,032 11,427 (72) 1,375 (562) 70,380 140,308

As at 1 January 2014 48,601 6,799 11,427 (77) 1,375 (339) 73,369 141,155

Loss for the year – – – – – – (15,109) (15,109)


Total comprehensive loss – – – – – (296) (24,374) (24,670)





Dividends paid – – – – – – (3,665) (3,665)

As at 31 December 2014 (audited) 49,757 8,036 11,427 (72) 1,375 (635) 45,818 115,706


Consolidated Statement of Changes in Equityfor the half year ended 30 June 2015


for the half year ended 30 June 2015

1 Segmental information

Business segments

The segment results for the half year ended 30 June 2015 are as follows:


Revenue 16,451 78,199 24,089 55,837 – – 174,576




Exceptional items (179) (593) – – 7 (591) (1,356)


The segment results for the half year ended 30 June 2014 were as follows:


Revenue 11,566 77,784 27,024 52,969 – – 169,343




Exceptional items – (939) – – (198) (70) (1,207)


The segment results for the year ended 31 December 2014 were as follows:


Revenue 26,497 150,708 55,175 110,646 – – 343,026


Amortisation of acquired intangibles (597) (411) – – – – (1,008)


Exceptional items (548) (23,730) (52) – (29) (320) (24,679)

Loss from operations 2,212 (5,250) 13,760 – (13,448) (6,946) (9,672)

19




for the half year ended 30 June 2015 (continued)

2 Amortisation of acquired intangibles and exceptional items

Half year Half year Year ended ended ended 30 June 30 June 31 Dec 2015 2014 2014 £000 £000 £000

Profit from operations is arrived at after charging the following items:

Acquisition and set up costs 529 198 389

Exceptional restructuring costs 780 939 3,258

Pension deficit reduction projects 47 70 164

Contingent consideration write o� – – (500)

Trade name write o� – – 368

Impairment of goodwill – – 21,000

Exceptional items 1,356 1,207 24,679

Non-exceptional depreciation and amortisation – amortisation of acquired intangibles 783 429 1,008

2,139 1,636 25,687

Acquisition and set up costs relate to non-recurring professional fees for acquisition related activities.

During the first half of 2015 the Group incurred £780,000 (30 June 2014 £939,000, 31 December 2014 £3,258,000) in respect of organisational restructuring which included ongoing integration costs relating to the new Design agency PSONA, and LBG activities. Of the £780,000, £338,000 is unpaid at 30 June 2015.

The pension deficit reduction costs relate to legal and consultancy expenses of £47,000 (30 June 2014 £70,000, 31 December 2014 £164,000) for projects undertaken during 2015. These have been fully paid at 30 June 2015.

3 Net finance costs


Interest on financial assets measured at amortised cost 7 6 6

Interest on financial liabilities measured at amortised cost (1,219) (810) (2,416)

Net interest from financial assets and financial liabilities not at fair value through Income Statement (1,212) (804) (2,410)

Gain / (loss) on foreign currency financial liabilities 106 (151) –

Retirement benefit related cost (706) (589) (1,176)

Net finance costs (1,812) (1,544) (3,586)

4 Income taxThe tax charge on continuing operations for the period is based upon an e�ective rate of 22.9%.

The provision for deferred tax has been made at 20% reflecting the legislation included in Finance Act 2014 reducing the rate of Corporation Tax to 20% from 1 April 2015.



5 Earnings per share


Basic and diluted earnings per share are calculated as follows:

Profit / (loss) attributable to equity holders of the parent 2,486 2,170 (15,109)

Weighted average number of ordinary shares (excluding treasury shares) for basic earnings per share (‘000) 207,166 195,218 197,111

E�ect of dilution:

Share options 6,686 5,013 5,764

Weighted average number of ordinary shares (excluding treasury shares) adjusted for the e�ect of dilution (‘000) 213,852 200,231 202,875

18,722 (30 June 2014 134,675, 31 December 2014 134,675) shares were held in trust at 30 June 2015.

Earnings per share from continuing operations before exceptional items and amortisation of acquired intangibles

Net profit from continuing operations before exceptional items and amortisation of acquired intangibles, attributable to equity holders of the parent is derived as follows:


Profit / (loss) after taxation from continuing operations 2,486 2,170 (15,109)


Taxation on the above (169) (217) (736)

Amortisation of acquired intangibles 783 429 1,008


Taxation – adjustments in respect of prior years – – (271)

Profit after taxation from continuing operations excluding exceptional items and amortisation of acquired intangibles 4,299 3,503 9,369

Adjusted earnings per share:

Basic 2.08p 1.79p 4.75p

Diluted 2.01p 1.75p 4.62p

The basis of measurement of adjusted EPS is to reflect more accurately the measure of EPS used by the market. Adjusted earnings per share uses the same weighted average number of ordinary shares as reported above.

20




2 Amortisation of acquired intangibles and exceptional items


Profit from operations is arrived at after charging the following items:

Acquisition and set up costs 529 198 389

Exceptional restructuring costs 780 939 3,258

Pension deficit reduction projects 47 70 164

Contingent consideration write o� – – (500)

Trade name write o� – – 368

Impairment of goodwill – – 21,000


Non-exceptional depreciation and amortisation – amortisation of acquired intangibles 783 429 1,008

2,139 1,636 25,687

Acquisition and set up costs relate to non-recurring professional fees for acquisition related activities.

During the first half of 2015 the Group incurred £780,000 (30 June 2014 £939,000, 31 December 2014 £3,258,000) in respect of organisational restructuring which included ongoing integration costs relating to the new Design agency PSONA, and LBG activities. Of the £780,000, £338,000 is unpaid at 30 June 2015.

The pension deficit reduction costs relate to legal and consultancy expenses of £47,000 (30 June 2014 £70,000, 31 December 2014 £164,000) for projects undertaken during 2015. These have been fully paid at 30 June 2015.

3 Net finance costs


Interest on financial assets measured at amortised cost 7 6 6

Interest on financial liabilities measured at amortised cost (1,219) (810) (2,416)

Net interest from financial assets and financial liabilities not at fair value through Income Statement (1,212) (804) (2,410)

Gain / (loss) on foreign currency financial liabilities 106 (151) –

Retirement benefit related cost (706) (589) (1,176)

Net finance costs (1,812) (1,544) (3,586)

4 Income taxThe tax charge on continuing operations for the period is based upon an e�ective rate of 22.9%.

The provision for deferred tax has been made at 20% reflecting the legislation included in Finance Act 2014 reducing the rate of Corporation Tax to 20% from 1 April 2015.



5 Earnings per share


Basic and diluted earnings per share are calculated as follows:

Profit / (loss) attributable to equity holders of the parent 2,486 2,170 (15,109)

Weighted average number of ordinary shares (excluding treasury shares) for basic earnings per share (‘000) 207,166 195,218 197,111

E�ect of dilution:

Share options 6,686 5,013 5,764

Weighted average number of ordinary shares (excluding treasury shares) adjusted for the e�ect of dilution (‘000) 213,852 200,231 202,875

18,722 (30 June 2014 134,675, 31 December 2014 134,675) shares were held in trust at 30 June 2015.

Earnings per share from continuing operations before exceptional items and amortisation of acquired intangibles

Net profit from continuing operations before exceptional items and amortisation of acquired intangibles, attributable to equity holders of the parent is derived as follows:


Profit / (loss) after taxation from continuing operations 2,486 2,170 (15,109)



Amortisation of acquired intangibles 783 429 1,008


Taxation – adjustments in respect of prior years – – (271)

Profit after taxation from continuing operations excluding exceptional items and amortisation of acquired intangibles 4,299 3,503 9,369

Adjusted earnings per share:

Basic 2.08p 1.79p 4.75p

Diluted 2.01p 1.75p 4.62p

The basis of measurement of adjusted EPS is to reflect more accurately the measure of EPS used by the market. Adjusted earnings per share uses the same weighted average number of ordinary shares as reported above.

21





6 Dividends paid and proposed


Declared and paid during the periodAmounts recognised as distributions to equity holders in the period:Final dividend of the year ended 31 December 2013 of 1.20p per share – 2,333 2,333Interim dividend of the year ended 31 December 2014 of 0.67p per share – – 1,332Final dividend of the year ended 31 December 2014 of 1.33p per share 2,758 – –

2,758 2,333 3,665

Proposed for approval by the Board (not recognised as a liability at period end)Interim equity dividend on ordinary shares for 2015 of 0.73p (30 June 2014 interim 0.67p, 31 December 2014 final 1.33p) per share 1,515 1,333 2,754

7 Cash generated from operations


Continuing operations

Profit / (loss) before tax 3,225 2,879 (13,258)

Adjustments for:

Amortisation of intangible assets arising on business acquisitions 783 429 1,008

Depreciation and other amortisation 5,495 4,973 10,505


(Profit) / loss on sale of property, plant and equipment (67) (5) 85

Share-based payment charge 214 218 493

Net finance costs 1,812 1,544 3,586

Additional contribution to the defined benefit pension plan (575) (575) (1,150)

Cash cost of exceptional items (1,684) (1,890) (5,055)

Changes in working capital:

Decrease in inventories 1,810 1,614 1,361

Increase in trade and other receivables (8,159) (10,468) (5,678)

Increase in trade and other payables 5,767 8,773 5,411

Cash generated from operations 9,977 8,699 21,987



8 AcquisitionsOn 5 January 2015, the Group acquired the entire share capital of Life Marketing Consultancy Limited (“Life”). Life is an award-wining, research and insight-led shopper marketing agency. Life’s clients are leading consumer goods groups especially in the food, drinks, technology and pharmaceutical sectors.

The acquisition was at an enterprise value (on a debt free, cash free basis) of £22,600,000, including Life’s net assets at completion of £1,400,000. The consideration payable by Communisis amounted to a maximum of £23,300,000, including acquired cash of £743,000.

Communisis has acquired Life for an initial consideration of £14,000,000. The initial consideration was satisfied by the issue of a two-year, bank guaranteed promissory note of £9,300,000, £700,000 in cash, and through the issue to the vendors of 7,988,015 new ordinary shares of 25p each in the share capital of Communisis (the “Initial Consideration Shares”) to the value of £4,000,000, based on an average middle market closing price of 50.1 pence per ordinary share. The Initial Consideration Shares will rank equally in all respects with Communisis’ existing ordinary shares. The Initial Consideration Shares are subject to an absolute lock-in for one year after the acquisition. After the first anniversary of the acquisition the Initial Consideration Shares will only be tradable in an orderly market basis through the Group’s brokers.

As part of the purchase agreement two contingent consideration mechanisms have been agreed. An amount of up to a maximum of £6,000,000 (the “Earn Out Consideration”) will be payable to the sellers at the end of the earn-out period (being the two years ended 31 December 2016) subject to the company generating an average adjusted EBITDA of £3,000,000. If the company fails to generate an average adjusted EBITDA of £3,000,000, but generates an average adjusted EBITDA greater than £1,900,000, contingent consideration of 5.4545 times the excess over £1,900,000 will be paid. If the company fails to generate an average adjusted EBITDA of greater than £1,900,000 no contingent consideration will be payable under this mechanism. Two-thirds of the Earn Out Consideration will be satisfied in cash and will therefore total a maximum of £4,000,000, and one-third will be satisfied by the issue of new ordinary shares of 25p each in the share capital of Communisis (the “Earn Out Consideration Shares”). As at the date of acquisition, the fair value of the Earn Out Consideration has been estimated at £4,640,000, determined using a probability-weighted payout approach.

An amount up to a maximum of £3,300,000 (the “Additional Consideration”) will be payable to the sellers based on the achievement of defined synergies over Life’s three financial years ended 31 December 2017. The Additional Consideration is payable in cash. As at the date of acquisition, the fair value of the Additional Consideration has been estimated at £2,517,000, determined using a probability-weighted payout approach. As at the acquisition date, the fair value of all contingent consideration was estimated to be £7,157,000. Significant unobservable valuation inputs are provided below:

Probability-adjusted EBITDA of Life during the earn-out period £2,800,000 – £3,200,000 Synergies generated over the 3 years ended 31 December 2017 £3,000,000 – £3,600,000 Discount rate 8.3%

Significant decrease in the EBITDA or synergies of Life would result in lower fair value of the contingent consideration liability, while significant increase (decrease) in the discount rate would result in lower (higher) fair value of the liability.

As at 30 June 2015, there have been no changes to the valuation inputs in determining the fair value of the contingent consideration.

22




6 Dividends paid and proposed


Declared and paid during the periodAmounts recognised as distributions to equity holders in the period:Final dividend of the year ended 31 December 2013 of 1.20p per share – 2,333 2,333Interim dividend of the year ended 31 December 2014 of 0.67p per share – – 1,332Final dividend of the year ended 31 December 2014 of 1.33p per share 2,758 – –

2,758 2,333 3,665

Proposed for approval by the Board (not recognised as a liability at period end)Interim equity dividend on ordinary shares for 2015 of 0.73p (30 June 2014 interim 0.67p, 31 December 2014 final 1.33p) per share 1,515 1,333 2,754

7 Cash generated from operations


Continuing operations

Profit / (loss) before tax 3,225 2,879 (13,258)

Adjustments for:

Amortisation of intangible assets arising on business acquisitions 783 429 1,008

Depreciation and other amortisation 5,495 4,973 10,505


(Profit) / loss on sale of property, plant and equipment (67) (5) 85

Share-based payment charge 214 218 493

Net finance costs 1,812 1,544 3,586

Additional contribution to the defined benefit pension plan (575) (575) (1,150)

Cash cost of exceptional items (1,684) (1,890) (5,055)

Changes in working capital:

Decrease in inventories 1,810 1,614 1,361

Increase in trade and other receivables (8,159) (10,468) (5,678)

Increase in trade and other payables 5,767 8,773 5,411

Cash generated from operations 9,977 8,699 21,987



8 AcquisitionsOn 5 January 2015, the Group acquired the entire share capital of Life Marketing Consultancy Limited (“Life”). Life is an award-wining, research and insight-led shopper marketing agency. Life’s clients are leading consumer goods groups especially in the food, drinks, technology and pharmaceutical sectors.

The acquisition was at an enterprise value (on a debt free, cash free basis) of £22,600,000, including Life’s net assets at completion of £1,400,000. The consideration payable by Communisis amounted to a maximum of £23,300,000, including acquired cash of £743,000.

Communisis has acquired Life for an initial consideration of £14,000,000. The initial consideration was satisfied by the issue of a two-year, bank guaranteed promissory note of £9,300,000, £700,000 in cash, and through the issue to the vendors of 7,988,015 new ordinary shares of 25p each in the share capital of Communisis (the “Initial Consideration Shares”) to the value of £4,000,000, based on an average middle market closing price of 50.1 pence per ordinary share. The Initial Consideration Shares will rank equally in all respects with Communisis’ existing ordinary shares. The Initial Consideration Shares are subject to an absolute lock-in for one year after the acquisition. After the first anniversary of the acquisition the Initial Consideration Shares will only be tradable in an orderly market basis through the Group’s brokers.

As part of the purchase agreement two contingent consideration mechanisms have been agreed. An amount of up to a maximum of £6,000,000 (the “Earn Out Consideration”) will be payable to the sellers at the end of the earn-out period (being the two years ended 31 December 2016) subject to the company generating an average adjusted EBITDA of £3,000,000. If the company fails to generate an average adjusted EBITDA of £3,000,000, but generates an average adjusted EBITDA greater than £1,900,000, contingent consideration of 5.4545 times the excess over £1,900,000 will be paid. If the company fails to generate an average adjusted EBITDA of greater than £1,900,000 no contingent consideration will be payable under this mechanism. Two-thirds of the Earn Out Consideration will be satisfied in cash and will therefore total a maximum of £4,000,000, and one-third will be satisfied by the issue of new ordinary shares of 25p each in the share capital of Communisis (the “Earn Out Consideration Shares”). As at the date of acquisition, the fair value of the Earn Out Consideration has been estimated at £4,640,000, determined using a probability-weighted payout approach.

An amount up to a maximum of £3,300,000 (the “Additional Consideration”) will be payable to the sellers based on the achievement of defined synergies over Life’s three financial years ended 31 December 2017. The Additional Consideration is payable in cash. As at the date of acquisition, the fair value of the Additional Consideration has been estimated at £2,517,000, determined using a probability-weighted payout approach. As at the acquisition date, the fair value of all contingent consideration was estimated to be £7,157,000. Significant unobservable valuation inputs are provided below:

Probability-adjusted EBITDA of Life during the earn-out period £2,800,000 – £3,200,000 Synergies generated over the 3 years ended 31 December 2017 £3,000,000 – £3,600,000 Discount rate 8.3%

Significant decrease in the EBITDA or synergies of Life would result in lower fair value of the contingent consideration liability, while significant increase (decrease) in the discount rate would result in lower (higher) fair value of the liability.

As at 30 June 2015, there have been no changes to the valuation inputs in determining the fair value of the contingent consideration.

23







8 Acquisitions (continued)Details of the consideration paid and fair values of assets and liabilities acquired are set out below. This transaction has been accounted for by the purchase method of accounting.

Fair value to Group £000

Property, plant and equipment 147

Customer relationships 2,511

Trade name 512

Work in progress 274

Trade and other receivables 3,950

Cash at bank 743

Trade and other payables (3,580)

Income tax payable (122)

Deferred tax (527)

Fair value of net assets acquired 3,908

Goodwill 17,249

Consideration 21,157

Satisfied by:

Initial consideration:

Cash 700

Shares 4,000

Loan Note 9,300

Contingent consideration:

Cash 5,610

Shares 1,547

Fair value at acquisition 21,157

The net cash outflow arising from the acquisition was as follows:

Cash consideration, as above (700)

Cash acquired, as above 743

Net inflow of cash 43

The results of this business are included within the Design business segment.

The goodwill recognised above comprises certain intangible assets that cannot be individually separated and reliably measured due to their nature. These items represent significant opportunities for synergy benefits and cost savings. Goodwill also comprises the value of Life’s assembled workforce of highly skilled marketing consultants. None of the goodwill recognised above is expected to be deductible for income tax purposes.

The acquired business contributed revenue of £4,926,000 and a loss of £106,000 from the date of acquisition (5 January 2015) to 30 June 2015. Acquisition and set up costs of £544,000 have been expensed and included in exceptional items.

8 Acquisitions (continued)In the period ending 30 June 2015, there have been no movements in contingent consideration for prior year acquisitions, and no changes to valuation inputs, with the exception of Jacaranda Productions Limited as outlined below.

On 25 April 2014, the Group acquired the entire issued share capital of Jacaranda Productions Limited (“Jacaranda”). On 30 June 2014 the Company’s name was changed to Psona Films Limited.

The consideration payable by Communisis amounted to £1,676,000, including acquired cash of £117,000. The consideration was satisfied in cash of £876,000 and through the issue of 913,242 new ordinary shares of 25p each in the share capital of Communisis (the “Consideration Shares”) to the value of £600,000 based on the middle market closing price of 65.7 pence per ordinary share.

As part of the purchase agreement a contingent consideration has been agreed. An amount equal to ten percent of annual gross profits of the company will be payable to the sellers at the end of each of the three earn-out periods, being the years ended 30 April 2015, 2016 and 2017. The total contingent consideration shall in no circumstance exceed the value of £500,000. As at the date of acquisition, the fair value of the contingent consideration was estimated at £200,000, determined using a discounted cash flow method. Significant unobservable valuation inputs are provided below:

Assumed Gross Profit of Jacaranda for the 3 year earn-out period £2,000,000 Discount rate 8.3%

As at 30 June 2015, there have been no changes to the valuation inputs in determining the fair value of the contingent consideration. A total of £80,000 was paid out under this arrangement for the earn-out period ended 30 April 2015. A reconciliation of the fair value of the contingent consideration liability is provided below:

£000

Initial fair value of the contingent consideration at acquisition date 200 Total consideration paid during period (80)

Contingent consideration carried forward 120


9 Directors’ responsibility statementThe directors are responsible for preparing the condensed set of financial statements, in accordance with applicable law and regulations. Andy Blundell, Chief Executive and Mark Stoner, Finance Director confirm that, to the best of their knowledge:

• the condensed set of Financial Statements on pages 13 to 27 has been prepared in accordance with IAS 34 – Interim Financial Reporting, as adopted by the European Union; and

• the information set out on this page and on pages 1 to 12 includes a fair review of the information required by Sections DTR 4.2.7R and DTR 4.2.8R of the Disclosure and Transparency Rules of the United Kingdom’s Financial Services Authority.

There were no related party transactions during the period which require disclosure.

24






8 Acquisitions (continued)Details of the consideration paid and fair values of assets and liabilities acquired are set out below. This transaction has been accounted for by the purchase method of accounting.

Fair value to Group £000

Property, plant and equipment 147

Customer relationships 2,511

Trade name 512

Work in progress 274

Trade and other receivables 3,950

Cash at bank 743

Trade and other payables (3,580)

Income tax payable (122)

Deferred tax (527)

Fair value of net assets acquired 3,908

Goodwill 17,249

Consideration 21,157

Satisfied by:

Initial consideration:

Cash 700

Shares 4,000

Loan Note 9,300

Contingent consideration:

Cash 5,610

Shares 1,547

Fair value at acquisition 21,157

The net cash outflow arising from the acquisition was as follows:

Cash consideration, as above (700)

Cash acquired, as above 743

Net inflow of cash 43


The goodwill recognised above comprises certain intangible assets that cannot be individually separated and reliably measured due to their nature. These items represent significant opportunities for synergy benefits and cost savings. Goodwill also comprises the value of Life’s assembled workforce of highly skilled marketing consultants. None of the goodwill recognised above is expected to be deductible for income tax purposes.

The acquired business contributed revenue of £4,926,000 and a loss of £106,000 from the date of acquisition (5 January 2015) to 30 June 2015. Acquisition and set up costs of £544,000 have been expensed and included in exceptional items.

8 Acquisitions (continued)In the period ending 30 June 2015, there have been no movements in contingent consideration for prior year acquisitions, and no changes to valuation inputs, with the exception of Jacaranda Productions Limited as outlined below.

On 25 April 2014, the Group acquired the entire issued share capital of Jacaranda Productions Limited (“Jacaranda”). On 30 June 2014 the Company’s name was changed to Psona Films Limited.

The consideration payable by Communisis amounted to £1,676,000, including acquired cash of £117,000. The consideration was satisfied in cash of £876,000 and through the issue of 913,242 new ordinary shares of 25p each in the share capital of Communisis (the “Consideration Shares”) to the value of £600,000 based on the middle market closing price of 65.7 pence per ordinary share.

As part of the purchase agreement a contingent consideration has been agreed. An amount equal to ten percent of annual gross profits of the company will be payable to the sellers at the end of each of the three earn-out periods, being the years ended 30 April 2015, 2016 and 2017. The total contingent consideration shall in no circumstance exceed the value of £500,000. As at the date of acquisition, the fair value of the contingent consideration was estimated at £200,000, determined using a discounted cash flow method. Significant unobservable valuation inputs are provided below:

Assumed Gross Profit of Jacaranda for the 3 year earn-out period £2,000,000 Discount rate 8.3%

As at 30 June 2015, there have been no changes to the valuation inputs in determining the fair value of the contingent consideration. A total of £80,000 was paid out under this arrangement for the earn-out period ended 30 April 2015. A reconciliation of the fair value of the contingent consideration liability is provided below:

£000

Initial fair value of the contingent consideration at acquisition date 200 Total consideration paid during period (80)

Contingent consideration carried forward 120


9 Directors’ responsibility statementThe directors are responsible for preparing the condensed set of financial statements, in accordance with applicable law and regulations. Andy Blundell, Chief Executive and Mark Stoner, Finance Director confirm that, to the best of their knowledge:

• the condensed set of Financial Statements on pages 13 to 27 has been prepared in accordance with IAS 34 – Interim Financial Reporting, as adopted by the European Union; and

• the information set out on this page and on pages 1 to 12 includes a fair review of the information required by Sections DTR 4.2.7R and DTR 4.2.8R of the Disclosure and Transparency Rules of the United Kingdom’s Financial Services Authority.

There were no related party transactions during the period which require disclosure.

25





10 Risks and UncertaintiesCommunisis has a robust internal control and risk management process outlined on page 48 of the Corporate Governance Report in the 2014 Annual Report.

The principal risks and uncertainties relating to the business at 31 December 2014 were set out in the Strategic Report on pages 22 to 23 of the 2014 Annual Report. These include the ability of the Group to adapt products and services to technological change, the degree of customer concentration within the Group, managing international exposure from expansion outside the UK, the smooth and uninterrupted operation of the Group’s IT networks to ensure safe guarding of data and uninterrupted delivery of products/services, talent and skills shortage, deterioration in the economic environment which may decrease the Group’s profitability, a high operational gearing which means that a reduction in revenues could significantly impact profitability, the Group being able to successfully integrate the operations of new acquisitions, the Group’s continuing obligations under defined benefit pension scheme arrangements and contingent liabilities arising from lease commitment guarantees on past disposals.

The view of the Board of Directors is that the nature of the risks has not changed since 5 March 2015 and that they represent our current best understanding of the situation faced by the Group. In terms of risk mitigation, management will continue to be alert to the need for action in respect of any problems caused or exacerbated by the current economic climate, especially as it a�ects our ability to forecast reliably the market demand for some of our newer services.

11 Additional information

General information

The information for the year ended 31 December 2014 does not constitute statutory accounts as defined in section 435 of the Companies Act 2006. A copy of the statutory accounts for that year has been delivered to the Registrar of Companies. The financial information for the year ended 31 December 2014 has been extracted from the Group Financial Statements for that period. Those Financial Statements were prepared in accordance with IFRS as adopted by the EU. The auditors reported on those accounts: their report was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

The financial information for the half year ended 30 June 2015 and for the equivalent period in 2014 has not been audited. It has been prepared in accordance with IAS 34 (‘Interim Financial Reporting’) and on the basis of the accounting policies as set out in the 2014 Annual Report and Financial Statements.

Going Concern

The directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the interim report.

Introduction

We have been engaged by the Company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2015 which comprises the Consolidated Income Statement, the Consolidated Statement of Comprehensive Income, the Consolidated Balance Sheet, the Consolidated Cash Flow Statement, the Consolidated Statement of Changes in Equity and the related notes 1 to 11. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the company in accordance with guidance contained in International Standard on Review Engagements 2410 (UK and Ireland) “Review of Interim Financial Information Performed by the Independent Auditor of the Entity” issued by the Auditing Practices Board. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our work, for this report, or for the conclusions we have formed.

Directors’ Responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom’s Financial Conduct Authority.

As disclosed in note 11, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, “Interim Financial Reporting”, as adopted by the European Union.

Our Responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

Scope of Review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, “Review of Interim Financial Information Performed by the Independent Auditor of the Entity” issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2015 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom’s Financial Conduct Authority.

Ernst & Young LLP Leeds 30 July 2015

Independent review report to Communisis plcfor the half year ended 30 June 2015

26




10 Risks and UncertaintiesCommunisis has a robust internal control and risk management process outlined on page 48 of the Corporate Governance Report in the 2014 Annual Report.

The principal risks and uncertainties relating to the business at 31 December 2014 were set out in the Strategic Report on pages 22 to 23 of the 2014 Annual Report. These include the ability of the Group to adapt products and services to technological change, the degree of customer concentration within the Group, managing international exposure from expansion outside the UK, the smooth and uninterrupted operation of the Group’s IT networks to ensure safe guarding of data and uninterrupted delivery of products/services, talent and skills shortage, deterioration in the economic environment which may decrease the Group’s profitability, a high operational gearing which means that a reduction in revenues could significantly impact profitability, the Group being able to successfully integrate the operations of new acquisitions, the Group’s continuing obligations under defined benefit pension scheme arrangements and contingent liabilities arising from lease commitment guarantees on past disposals.

The view of the Board of Directors is that the nature of the risks has not changed since 5 March 2015 and that they represent our current best understanding of the situation faced by the Group. In terms of risk mitigation, management will continue to be alert to the need for action in respect of any problems caused or exacerbated by the current economic climate, especially as it a�ects our ability to forecast reliably the market demand for some of our newer services.

11 Additional information

General information

The information for the year ended 31 December 2014 does not constitute statutory accounts as defined in section 435 of the Companies Act 2006. A copy of the statutory accounts for that year has been delivered to the Registrar of Companies. The financial information for the year ended 31 December 2014 has been extracted from the Group Financial Statements for that period. Those Financial Statements were prepared in accordance with IFRS as adopted by the EU. The auditors reported on those accounts: their report was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

The financial information for the half year ended 30 June 2015 and for the equivalent period in 2014 has not been audited. It has been prepared in accordance with IAS 34 (‘Interim Financial Reporting’) and on the basis of the accounting policies as set out in the 2014 Annual Report and Financial Statements.

Going Concern

The directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the interim report.

Introduction

We have been engaged by the Company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2015 which comprises the Consolidated Income Statement, the Consolidated Statement of Comprehensive Income, the Consolidated Balance Sheet, the Consolidated Cash Flow Statement, the Consolidated Statement of Changes in Equity and the related notes 1 to 11. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the company in accordance with guidance contained in International Standard on Review Engagements 2410 (UK and Ireland) “Review of Interim Financial Information Performed by the Independent Auditor of the Entity” issued by the Auditing Practices Board. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our work, for this report, or for the conclusions we have formed.

Directors’ Responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom’s Financial Conduct Authority.

As disclosed in note 11, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, “Interim Financial Reporting”, as adopted by the European Union.

Our Responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

Scope of Review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, “Review of Interim Financial Information Performed by the Independent Auditor of the Entity” issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2015 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom’s Financial Conduct Authority.

Ernst & Young LLP Leeds 30 July 2015

Independent review report to Communisis plcfor the half year ended 30 June 2015

27



Registrar and shareholding enquiries

Administrative enquiries about the holding of Communisis shares, such as change of address, change of ownership and dividend payments should be directed to our registrar, Capita Asset Services:

By phone

0871 664 0300 (calls cost 10 pence per minute plus network extras; lines are open 9.00am to 5.30pm Monday to Friday). From overseas +44 203 728 5000.

By email

[email protected]

Alternatively you can use the Share Portal at www.capitashareportal.com. To register for this service, you will require your investor code which can be located on a recent tax voucher or on your share certificate.

For all other enquiries, please contact Capita Asset Services by post at the following address:

Capita Asset Services The Registry 34 Beckenham Road Beckenham Kent BR3 4TU

Shareholder InformationFinancial calendar30 July 2015 Interim results announcement

10 September 2015 Ex-dividend date – interim dividend

11 September 2015 Record date to be eligible for the interim dividend

8 October 2015 Interim dividend payment date

How to get in touch

Registered O�ce

Communisis plc Communisis House Manston Lane Leeds LS15 8AH Tel: +44 (0) 113 222 6500 Fax: +44 (0) 113 222 6501 Registered in England and Wales Number 02916113

Auditor

Ernst & Young LLP 1 Bridgewater Place Water Lane Leeds LS11 5QR

Stockbroker

Liberum Capital Limited Ropemaker Place 25 Ropemaker Street London EC2Y 9LY

Head O�ce

Communisis plc Longbow House 14-20 Chiswell Street London EC1Y 4TW Tel: +44 (0) 207 382 8950 Fax: +44 (0) 207 382 8951

Corporate Lawyers

Eversheds LLP Clarion Solicitors LLP Pinsent Masons LLP Ward Hadaway

Principal Bankers

Barclays Bank PLC HSBC Bank plc Lloyds Banking Group plc Royal Bank of Scotland plc

Company Secretary

Sarah Caddy

2828

SHAREHOLDER INFORMATION


Registrar and shareholding enquiries

Administrative enquiries about the holding of Communisis shares, such as change of address, change of ownership and dividend payments should be directed to our registrar, Capita Asset Services:

By phone

0871 664 0300 (calls cost 10 pence per minute plus network extras; lines are open 9.00am to 5.30pm Monday to Friday). From overseas +44 203 728 5000.

By email

[email protected]

Alternatively you can use the Share Portal at www.capitashareportal.com. To register for this service, you will require your investor code which can be located on a recent tax voucher or on your share certificate.

For all other enquiries, please contact Capita Asset Services by post at the following address:

Capita Asset Services The Registry 34 Beckenham Road Beckenham Kent BR3 4TU

Dividends

We encourage shareholders to have dividends paid directly into their bank account to ensure e�cient payment and cleared funds on the payment date. If you have a UK bank account you can sign up for this service on the Share Portal by clicking on “your dividend options” and following the on-screen instructions or by contacting Capita Asset Services on the number opposite.

Electronic Communications

We have written to all shareholders to advise that we intend to communicate with shareholders electronically going forward. Should you wish to continue to receive information in hard copy format please visit www.capitashareportal.com. You will require your investor code which can be located on a recent tax voucher or on your share certificate.

Boiler Room Scams

Unfortunately, we are aware that in the past some of our shareholders were targeted by fraudsters who made o�ers to buy their shares at prices substantially in excess of the market price. General information on boiler room scams and how to report a suspected scam, is available from the FCA’s website at www.fca.org.uk/consumers/scams

Shareholder InformationFinancial calendar30 July 2015 Interim results announcement

10 September 2015 Ex-dividend date – interim dividend

11 September 2015 Record date to be eligible for the interim dividend

8 October 2015 Interim dividend payment date

Head O�ce

Communisis plc Longbow House 14-20 Chiswell Street London EC1Y 4TW Tel: +44 (0) 207 382 8950 Fax: +44 (0) 207 382 8951

Corporate Lawyers

Eversheds LLP Clarion Solicitors LLP Pinsent Masons LLP Ward Hadaway

Principal Bankers

Barclays Bank PLC HSBC Bank plc Lloyds Banking Group plc Royal Bank of Scotland plc

Company Secretary

Sarah Caddy

2929




Andy Blundell Chief Executive Officer 30 July 2015

The growth momentum at Communisis continues, driven by our focus on enduring client relationships and higher margin services.

Looking ahead, supported by a strong pipeline of opportunities, the Board is confident about the Group’s prospects for the remainder of the year.


C M


COLOURCOLOUR


Non-printingColours

COMMUNISIS PLC INTERIM REPORT

2015

P123 Designed, produced and deployed by Communisis plc

Communisis plcLongbow House14-20 Chiswell StreetLondon EC1Y 4TWTel: +44 (0) 207 382 8950

www.communisis.com

Communication, channelled


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