BrainJuicer Group PLC

("BrainJuicer" or "the Company")

Interim Results for the Six Months ended 30 June 2014

BrainJuicer Group PLC (AIM: BJU), the innovative international market research agency, today announces its Interim Results for the six months ended 30 June 2014.

Highlights

Commenting on the Company's results, John Kearon, Founder and Chief Juicer of BrainJuicer, said:

 "We've seen healthy growth in our Behavioural Science based 'Juicy' products reflecting continued underlying progress in our largest clients.  Growth overall would have been more significant were it not for a decline in our lower margin qualitative Juice Generation business which is particularly lumpy.  Whilst, as always, we have limited revenue visibility, we believe we are on track to meet market profit expectations for the full year and continue to help our clients build famous brands."

The Company can be found at www.brainjuicer.com.

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Interim Statement

Revenue grew a relatively modest 4% in the first half of the year, against currency headwinds.  In constant currency terms, revenue was up a more healthy 10%.  The currency movements however helped our costs and this together with a lower bonus accrual meant that costs were flat despite a rise in headcount.  Operating profit grew by 18%.  With the exception of the payment of last year's large staff bonus in February this year (£1,908,000), most of our profits turned into cash flow.  We returned £3,421,000 to shareholders in the form of dividends and share buy-backs (net of option exercise proceeds, and including cash settlement of management equity awards), and finished the half year with cash of £2,528,000 and no debt.  Our growth, as always, was entirely organic and there were no particularly large one-off or unusual items affecting our financial statements.

While our revenue grew modestly overall, revenue from our core quantitative services, comprising our mainstream quantitative research solutions (such as Predictive Markets and our ComMotion advertising testing technique), grew by a more substantial 10%.  This part of our business made up 86% of our revenue, is the main source of our profits, is easier to scale, and is the main driver of our anticipated future growth.  Within this we have also made progress in pushing our "Juicy" solutions (distinctive, higher-margin and strategically important), which are up from 66% of revenue in H1 2013 (and 74% over the whole of 2013) to 82% in H1 2014.

That said, revenue declined in our two biggest markets, the UK and the US, by 4% and 5% respectively against fairly strong comparatives.  However, revenue in the US grew by 5% in constant currency terms, and we don't believe the performance in either region is indicative of a systemic problem.  In Continental Europe, our third biggest region, revenue grew 6% (and by 10% after adjusting for a large Japanese client, previously serviced from Germany, which we transferred to our China team) against a fairly weak comparative.  Our China and Singapore region grew revenue 65% (but by 45% after adjusting for that self same client) and revenue from our Brazilian office increased by 24%.  In India we are continuing to start well.

As a whole, our growth would have been more significant were it not for a decline in what we call our Juice Generation business.  This is where we provide qualitative (as opposed to quantitative) research and more of a consultative service.  Juice Generation revenue is particularly lumpy in nature and not a good indicator of underlying progress.  Moreover, it was only 12% of our total revenue in H1 2014 (H1 2013: 18%) and is unlikely to become a much more meaningful percentage in the future.  This is not to say that Juice Generation is an unimportant component of our business, as it has strategic value beyond the revenue it generates.  For example it enables us to respond to clients' difficult marketing challenges and so can promote our standing within client organisations; it allows us to interact with clients at more senior levels; and it reinforces our positioning as a creative research agency.  The same is true of our new behavioural consultancy service, which has similar strategic value and yet generates only a small percentage of our revenue.

Moving on to costs, direct costs, being external project related costs, remained a consistent percentage of revenue, at 22% of revenue (compared to 21% in H1 2013) and so gross profit grew at a similar rate to revenue.  Overhead costs, excluding bonus accrual, grew by 6%, in line with growth in average headcount which increased by 5% to 144 people.  This increase predominantly reflects increases in our account management teams as we continue to strengthen our client service capability.  Earlier in the year we were facing (and announced at the time of our AGM in May) the prospect of a large share based payment charge relating to management and employee stock options, following the steep rise in our share price.  With the more recent reduction in our share price, the share based payment charge (and related national insurance) for H1 2014 settled back to a less material £213,000 (H1 2013: £96,000).  We reduced our bonus accrual to 4% of salary costs from 12% this time last year, and as a result total overheads (including bonus accrual) were flat year-on-year.

Operating profit grew 18% to £1,536,000, and pre-tax and post-tax profit both grew at a similar rate (17% in both cases).  Fully diluted earnings per share however increased by only 12%.  This was because of the dilution caused by equity-based awards granted to the management team following maturity of its long-term value creation incentive scheme in April.  Some of the awards were cash-settled (see below) which mitigated the dilutive impact on our equity, but the majority were settled in the form of 544,968 zero cost stock options as originally intended.

There was a net cash outflow (excluding cash returned to shareholders) of £147,000, compared to an inflow of £1,948,000 in H1 last year.  The difference is largely down to the 2013 bonus of £1,908,000 paid in February 2014.  By comparison, the 2012 staff bonus paid in February 2013, was negligible.  We paid £3,421,000 to shareholders, and this was by way of: 2013 final and special dividends (£1,890,000); share buy-backs net of option proceeds (£551,000); and cash-settled management team long-term incentive awards (£980,000).  Our cash of £2,528,000 (and no debt) at 30 June 2014 was down significantly on the £6,188,000 of cash we had at 31 December 2013, but still ample for our anticipated working capital needs.

We will be paying an interim dividend of 1.0p per share, up from 0.9p per share last year.  We have set out full details in note 5 to the accompanying interim financial statements.

Outlook

In summary, while the headline figures paint a relatively flat revenue picture over the first six months of the year, the performance of our core quantitative business, particularly when allowing for the adverse currency movements we've experienced, reflects continued progress, within our large clients in particular. We therefore remain confident in our positioning and where we are in terms of achieving our long-term aims.  We also believe we are on track to meet market profit expectations for the full year.  However, we have to inject our usual caveat: we have little revenue visibility and plenty of volatility within individual clients, and so cannot anticipate with any certainty how our results will unfold in the short term.

John Kearon                                                                            James Geddes

Chief Juicer                                                                              Chief Financial Officer

5 YEAR SUMMARY  (£000 unless specified otherwise)

CONDENSED CONSOLIDATED INCOME STATEMENT

FOR THE SIX MONTHS ENDED 30 JUNE 2014

All of the activities of the Group are classed as continuing.