Half Yearly Report

RNS Number : 9044P

1Spatial Plc

31 October 2012

 



31 October 2012

1Spatial plc (AIM: SPA)

("1Spatial", the "Group" or the "Company")

Interim Results for the six month period ended 31 July 2012

The board of directors of 1Spatial (the ''Board''), the business technology and profit improvement specialist, are pleased to announce the Company's unaudited interim results for the six month period ended 31 July 2012.

Highlights

Financial highlights

·      Turnover from continuing operations increased by 146 per cent. to £6.4m (6 months 2011: £2.6m)

·      Adjusted* EBITDA from continuing operations of £20k (6 months 2011: £0.6m)

·      Overall loss for the period after tax of £1.1m (6 months 2011: profit of £0.8m)

·      Strong balance sheet at 31 July 2012 with £3.1m of net cash (31 January 2012 net cash of £2.7m)

·      The 1Spatial trading business generated revenues of £5m and Adjusted* EBITDA of £0.7m

·      The Avisen trading business generated revenues of £1.2m and Adjusted* EBITDA of £0.1m

·      The Storage Fusion trading business generated revenues of £0.2m and broke even at an Adjusted* EBITDA level

Operational highlights

·      Restructuring of the 1Spatial Business to enable execution of new strategy for growth and scale

·      Focus on product development and software licence sales for National Mapping Agencies (NMA's) within 1Spatial Business

·      Reduction in headcount within the Group with annualised cost savings of £0.7m with no direct impact on revenues

·      Rebranding of 1Spatial Business to raise market visibility as a leading global provider of spatial Big Data management

·      Product realignment and development to scale product offerings across cloud and on-premise within the 1Spatial Business

·      Avisen continues successful global roll out of the 'Cost to Serve' project for Unilever plc ("Unilever")

·      Management remains confident in Storage Fusion's product and ability to increase scale.  During the period we have been focusing on product development in areas such as virtualisation and chargeback which extends the Company's functional reach

·      Closure of loss making Avisen BV business in the Netherlands

Post Balance Sheet Highlights

·      On 3 October, the Company announced that a five year contract has been entered into to provide a US Government Bureau with software and related services

·      On 17 October, the Company announced that it had been selected as a preferred bidder in a significant contract tender to Ordnance Survey Ireland ("OSi").  The contract is to provide OSi with a geospatial management solution and will, if awarded, include the sale of software licences, services, support and maintenance 

*Adjusted for strategic, integration and other exceptional items

Commenting on the results, Marcus Hanke, CEO of 1Spatial, says:

"We aligned against our core goals set at the beginning of this period, to focus on the right organisational structure, operating model, products and brand. These are now in place and are being well received by customers, partners and the market. We have secured some good customer wins across the Group and further strengthened our strategic relationship with some accounts. I am confident we are now in a great position to build on the foundations already laid and to achieve growth for the business."

For further information, please contact:

1Spatial plc
Marcus Hanke (CEO)/Claire Milverton (CFO)	Tel: [phone]
Strand Hanson Limited	Tel: [phone]
James Harris / Andrew Emmott / James Bellman
Bishopsgate Communications	Tel: [phone]
Nick Rome/Sam Allen [e-mail]

Chairman's statement

I am delighted to present the results of the Group for the six month period ended 31 July 2012. The results for this period show growth in revenues as a result of the inclusion of the 1Spatial operating business ("1Spatial Business") that was acquired in November 2011. 

The Board believes that management have made excellent progress during this period, particularly with respect to the 1Spatial Business.  Management has spent considerable time and effort putting a new operational structure in place to enable execution of a revised strategy. This strategy is based on exploiting the opportunities in its intellectual property offering. The Board believes this new strategy puts the business in an excellent position to achieve long term growth and scalability.  The Group is beginning to see the success of these changes with the new contract prospects that were recently announced to the market. Leveraging the already strong position that the 1Spatial Business has in managing the world's largest spatial 'Big Data', this offering can be scaled and make claim to a large percentage of the spatial 'Big Data' market.

As noted in my January 2012 Chairman's statement, we did not expect the benefits of this revised strategy to come into effect until the second half of this financial year. The initial phase of adjustment, which included re-defining roles and responsibilities of employees, was finalised during October 2012 and has resulted in an overall reduction of headcount.  The Group will not get the full benefit of these cost savings until the year ended 31 January 2014.  These annualised cost savings are in excess of £0.7m and we anticipate only a negligible impact on revenues.

In line with the above expectation, the Group's Adjusted* EBITDA in the period was £20k compared to a profit of £0.6m in 2011.  The 2011 figure was partly a result of the large licence sale to Unilever which has not been repeated in this period, however the Group has already had success with licence sales during the second half of the year.  Firstly, with the sale to the US Government Bureau which was announced on 3 October 2012 and secondly with the announcement of the preferred supplier status with Ordnance Survey Ireland announced on 17 October 2012, which we are hopeful will result in a firm order in the near term. One of the key focus areas of the Group's new strategy going forward is focus on product development and software licence sales for National Mapping Agencies ("NMA's") and this profitable revenue stream is expected to increase in the second half of the year and in future years.

In my last statement, I noted that management was still keen to review other acquisition opportunities to accelerate the growth of the business and provide more scale and synergistic opportunities.  Whilst the new licence sales and cost reductions should enhance profitability, the Board still believes an acquisition will increase earnings potential and therefore continues to review potential opportunities. 

The common focus for all companies within the Group is to provide end users of data with assurance over its quality and insight into its significance.  This is part of the 'Big Data' concept.   

Also during the period, we recruited a new Group Marketing Director, Alison Masters. Alison has been in senior positions at both Oracle and Microsoft and has significant experience in the IT sector. We believe Alison is a significant asset to the Group and will be key in driving all the Group's businesses forward.

Financial position

Revenues for the six months were £6.4m, which is a 146 per cent. improvement on the revenues of the previous period of £2.6m.  The main reason for this is the inclusion of the 1Spatial Business in these 2012 results.  Included within the revenues of £6.4m is £1.5m of recurring annuity revenues in relation to support and maintenance. 

The Adjusted* EBITDA profit measure is £20k compared with £0.6m in the previous period as a result of the Avisen revenues attributable to Unilever as noted above.

Amortisation has increased from £0.2m to £0.5m as a result of the inclusion of the 1Spatial acquisition in the results to July 2012.  In addition, strategic and other exceptional items have also increased from zero to £0.3m mainly as a result of the costs associated with redundancies. 

During the period, the Group closed down its loss making Avisen Netherlands business. This has been disclosed in discontinued operations and made an adjusted* EBITDA loss of £50k. This closure will have a positive impact on the results of the Group in the second half.

Taking account of the above items, the overall result for the six month period to July 2012 for all operations was a loss of £1.1m compared with a profit of £0.8m in the previous six months. 

The Company had a strong balance sheet at 31 July 2012 with net assets of £10.1m compared with net assets of £7.9m at 31 July 2012.  The increase is net assets is as a result of the inclusion of the 1Spatial Business.  The net asset position includes a strong cash position of £3.1m with minimal borrowings. 

The cash flow from operations was an outflow for the period as a result of the exceptional one-off costs in the period mainly in respect of redundancies.  There are further redundancy costs to be charged in the second half of the year, but once these payments are finalised we expect the Group to be cash positive on a monthly basis from an operations perspective. Overall cash generated in the period was £0.3m. The key components of this were the cash outflow from operating activities of £0.4m coupled with £1.3m deferred cash consideration received in respect of the disposal of Inca in 2011 and other smaller outflows including fixed assets of £0.4, deferred consideration payable and debt repayments totalling £0.2m.

Trading business update

As mentioned earlier, the Group has been undergoing a period of review particularly within the 1Spatial Business.  An update on the activities of each trading entity is set out below:

1Spatial Business

Revenues for the six month period were £5.0m and adjusted* EBITDA was £0.7m.  Management were pleased with these results in light of the fact that this period was a phase of review and consolidation.  With the new management team and strategy in place the Board believes that the business is in a good position for future profitability from both a revenue growth perspective and a lower fixed cost base (c.£0.7m annualised cost savings made).

With the focus on our product offering and positioning, we now have greater clarity and opportunity to market and sell our products. With the comprehensive offering of the '1Spatial Management Suite', which provides the full spatial data management solution, we can now offer a scalable approach through the product family to a greater market potential than previously. In addition, with our revised '1Spatial Cloud' offering we can supplythis to a broader market, not only directly, but also through our growing partner network.

We are pleased with the recent preferred supplier status given to the Company by OSi, evidence of the strength of our relationship with this long standing customer, and also the recognition of our expertise in data quality with the customer win at the US Government Bureau. 

Avisen

Avisen had revenues in the period of £1.2m (2011: £2.5m) and an adjusted EBITDA of £0.1m (2011: £1.0m).  The reason for the decrease in revenues and profit was due to the large perpetual licence sale to Unilever in 2011 ("Cost to Serve Project") as noted above, which was not repeated in 2012.  During the period to July 2012 the Company has continued to work on the Unilever Cost to Serve Project and is in the process of delivering the solution globally.  The profitability of the Company has also suffered due to the high staff fixed cost base. Management have left the cost base at this level for the period to allow development of the product and service offering to other potential customers. Management intend to place more focus on this business in the second half of the year and review the cost base.  On a positive note, the Company continues to be actively involved in a number of potential opportunities within the Unilever business and is hopeful that some additional revenues will transpire as a result of this in the second half of the year.

Storage Fusion

Storage Fusion had revenues in the period of £0.2m (2011: £0.2m) and an adjusted EBITDA of £37k (2011: loss of £55k).  Revenues are at the same level as 2011 which is slightly behind the Board's expectation for this half year,  however the Board is still confident in its product offering and believes it will be able to secure further storage vendor partnerships during the remainder of the year in order to enhance revenue and profitability.  With its Cloud enabled offering, it provides a cost effective way to measure data storage usage and consumption, and with the huge growth forecast in the software-as-a-service ("SaaS") marketplace, the Storage Fusion product is very attractive and has great potential. The Storage Fusion brand has recently been refreshed and the product offering redefined to offer greater clarity, along with releasing a new product offering focusing on the virtualisation and chargeback markets.

This business will be a key area of focus for the management team during the second half of the year, and we will build on the recent additions to the product offering to broaden the market and sales potential.

Head office costs

Total head office costs in the period have increased to £0.8m from £0.4m in the previous comparative period.  This is as a result of the additional head office costs incurred by the 1Spatial Business.  These costs should decrease in the second half as a result of the departure of former director Nicholas Snape in June 2012.      

Conclusion and outlook

The last six months have been a period of consolidation.  We have revised our strategy within the 1Spatial Business and have the right people in place to support this strategy along with a significantly reduced fixed cost base.  Since the period end we have also secured a key contract with a US Government Agency and have been made a preferred supplier on a pivotal key contract in the NMA market.  We have some areas to focus on within the Avisen and Storage Fusion businesses during the second half of the year, but we anticipate having these in a significantly better position by the year end. 

Between now and the year end we have a lot of hard work to do but believe we have excellent prospects to improve our results and cash flow generation in the shortand longer term.

S Berry

Chairman

31 October 2012

Consolidated statement of comprehensive income 6 months ended 31 July 2012		Unaudited		Audited		Unaudited
		Six months ended 31 July 2012		Year ended 31 January 2012	Six months  ended 31 July 2011
	Notes	£'000		£'000		£'000
Continuing operations
Revenue		6,420		5,228		2,628
Cost of sales		(3,672)		(3,373)		(1,324)
Gross profit		2,748		1,855		1,304
Administrative expenses		(3,649)		(3,454)		(882)
		(901)		(1,599)		422
Adjusted* EBITDA		20		(512)		615
Less: depreciation		(81)		(42)		(7)
Adjusted* EBITA		(61)		(554)		608
Less: amortisation and impairment of intangible assets		(502)		(505)		(178)
Less: strategic, integration and other exceptional items	8	(338)		(540)		-
Operating (loss)/profit		(901)		(1,599)		430
Finance income		1		26		-
Finance costs		(4)		(20)		(8)
Net finance costs		(3)		6		(8)
(Loss)/Profit before tax		(904)		(1,593)		422
Income tax (charge)/credit		(57)		173		(12)
(Loss)/Profit from continuing operations		(961)		(1,420)		410
Discontinued operations
(Loss)/Profit from discontinued operations	6	(89)		(54)		433
(Loss)/Profit on disposal of subsidiary		(77)		464		-
(Loss)/Profit for the period		(1,127)		(1,010)		843
Other comprehensive income
Exchange differences on translating foreign operations		34		6		-
Gain on disposal of subsidiary undertaking		-		-		-
Other comprehensive income for the period, net of tax		34		6		-
Total comprehensive (loss)/profit attributable to equity shareholders of the Company		(1,093)		(1,004)		843
* Adjusted for strategic, integration and other exceptional items (note 8).
(Loss)/Earnings per ordinary share expressed in pence per ordinary share from continuing operations:
Basic	3	(0.27)		(0.57)		0.18
Diluted	3	(0.27)		(0.57)		0.18
(Loss)/Earnings per ordinary share expressed in pence per ordinary share from operations:
Basic	3	(0.32)		(0.59)		0.37
Diluted	3	(0.32)		(0.59)		0.37

Consolidated statement of financial position As at 31 July 2012		Unaudited		Audited		Unaudited
		As at 31 July 2012		As at 31 January 2012		As at 31 July 2011
	Notes	£'000		£'000		£'000
Assets
Non-current assets
Intangible assets	9	3,907		4,133		869
Goodwill	9	5,540		5,602		2,156
Property, plant and equipment		257		244		35
Total non-current assets		9,704		9,979		3,060
Current assets
Inventories		32		41		-
Trade and other receivables		4,876		5,551		5,325
Current income tax receivables		7		60		-
Cash and cash equivalents		3,059		2,734		2,898
Total current assets		7,974		8,386		8,223
Total assets		17,678		18,365		11,283
Liabilities
Current liabilities
Trade and other payables		(6,409)		(6,018)		(3,175)
Current tax liabilities		(37)		(92)		-
Borrowings		(50)		(51)		-
Total current liabilities		(6,496)		(6,161)		(3,175)
Non-current liabilities
Borrowings		-		(51)		-
Deferred tax		(1,092)		(1,035)		(258)
Total non-current liabilities		(1,092)		(1,086)		(258)
Total liabilities		(7,588)		(7,247)		(3,433)
Net assets		10,090		11,118		7,850
Share capital and reserves
Share capital	10	12,572		12,556		11,335
Share premium account		6,504		6,455		6,455
Own shares held		(306)		(306)		(306)
Share based payment reserve		387		387		387
Merger reserve		13,900		13,900		10,006
Reverse acquisition reserve		(11,584)		(11,584)		(11,584)
Currency translation reserve		1		(33)		(39)
Accumulated losses		(11,384)		(10,257)		(8,404)
Total equity attributable to shareholders of the parent		10,090		11,118		7,850

Consolidated statement of changes in equity Period ended 31 July 2012 £'000			Share capital	Share premium Account	Own shares held	Share based payments reserve	Merger reserve	Reverse acquisition reserve	Currency translation reserve	Accumulated losses	Total
Balance at 1 February 2011			11,335	6,455	(306)	387	10,006	(11,584)	(39)	(9,247)	7,007
Comprehensive income
Loss for the year			-	-	-	-	-	-	-	(1,010)	(1,010)
Other comprehensive income/(expense)
Exchange differences on translating foreign operations			-	-	-	-	-	-	6	-	6
Total other comprehensive income			-	-	-	-	-	-	6	-	6
Total comprehensive (expense)/income			-	-	-	-	-	-	6	(1,010)	(1,004)
Transactions with owners
Shares issued in the year			1,221	-	-	-	-	-	-	-	1,221
Premium on issuance of shares to acquire subsidiary			-	-	-	-	3,894	-	-	-	3,894
			1,221	-	-	-	3,894	-	-	-	5,115
Balance at 31 January 2012			12,556	6,455	(306)	387	13,900	(11,584)	(33)	(10,257)	11,118
Comprehensive income
Loss for the year			-	-	-	-	-	-	-	(1,127)	(1,127)
Other comprehensive income/(expense)
Exchange differences on translating foreign operations			-	-	-	-	-	-	34	-	34
Total other comprehensive income			-	-	-	-	-	-	34	-	34
Total comprehensive (expense)/income			-	-	-	-	-	-	34	(1,127)	(1,093)
Transactions with owners
Shares issued in the year			16	-	-	-	-	-	-	-	16
Premium on issuance of			-	49	-	-	-	-	-	-	49
			16	49	-	-	-	-	-	-	65
Balance at 31 July 2012			12,572	6,504	(306)	387	13,900	(11,584)	1	(11,384)	10,090

Consolidated statement of changes in equity Period ended 31 July 2012 £'000

Share capital

Share premium Account

Own shares held

Share based payments reserve

Merger reserve

Reverse acquisition reserve

Currency translation reserve

Accumulated losses

Total

Balance at 1 February 2011		11,335	6,455	(306)	387	10,006	(11,584)	(39)	(9,247)	7,007
Comprehensive income
Profit for the year		-	-	-	-	-	-	-	843	843
Total comprehensive income		-	-	-	-	-	-	-	843	843
Balance at 31 July 2011		11,335	6,455	(306)	387	10,006	(11,584)	(39)	(8,404)	7,850

Consolidated statement of cashflows Period ended 31 July 2012			Unaudited		Audited		Unaudited
			31 July 2012		31 January 2012		31 July 2011
	Notes		£'000		£'000		£'000
Cash flows from operating activities
Cash used in from operations	a)		(475)		(3,225)		(2,933)
Interest received			1		26		-
Interest paid			(4)		(37)		(25)
Tax received			60		232		151
Net cash used in operating activities			(418)		(3,004)		(2,807)
Cash flows from investing activities
Acquisition of subsidiaries (net of cash acquired)			-		661		-
Cash received on disposal of subsidiary			1,300		5,189		5,404
Purchase of intangible assets			-		-		(3)
Purchase of property, plant and equipment			(94)		(156)		(23)
Expenditure on product development			(276)		(476)		(185)
Proceeds from sale of property, plant and equipment			-		6		4
Deferred consideration payable			(136)		-		-
Net cash generated from investing activities			794		5,224		5,197
Cash flows from financing activities
Increase in overdraft			-		-		-
Decrease in factoring account			-		121		121
Finance lease principal payments			-		-		-
Repayment of borrowings			(51)		(100)		(106)
Net cash generated (used in)/from financing activities			(51)		21		15
Net increase in cash and cash equivalents			325		2,241		2,405
Cash and cash equivalents at start of period			2,734		493		493
Cash and cash equivalents at end of period			3,059		2,734		2,898

Net of disposal costs and cash balance disposed.

Cash flows from discontinued operations can be summarised for each of the main cash flow headings as follows:

	31 July 2012		31 January 2012		31 July 2011
	£'000		£'000		£'000
Cash flows from operating activities
Net cash generated from/(used in) operating activities	20		(133)		(143)
Cash flows from investing activities
Net cash generated from investing activities	1,300		5,189		5,381
Cash flows from financing activities
Net cash generated from financing activities	-		121		121

a) Cash used in operations		Unaudited As at 31 July 2012		Audited As at 31 January 2012		Unaudited As at 31 July 2011
		£'000		£'000		£'000
Continuing operations
(Loss)/Profit before tax		(904)		(1,593)		422
Adjustments for:
Finance cost - net		3		(6)		8
Depreciation charge		81		42		7
Amortisation and impairment		502		505		178
Decrease/(Increase) in Inventories		9		(29)		-
(Increase) in trade and other receivables		(712)		(1,073)		(2,983)
Increase/(Decrease) in trade and other payables		529		(961)		(439)
Intercompany funding		(36)		-		-
Foreign currency adjustment		33		6		-
Cash used in continuing operations		(495)		(3,109)		(2,807)
Discontinued operations
Net loss		(89)		(54)		(12)
Adjustments for:
Finance cost - net		-		17		17
Depreciation charge		-		19		19
Amortisation and impairment		-		68		68
Increase/(Decrease) in trade and other receivables		25		(137)		(137)
Increase/(Decrease) in trade and other payables		48		(29)		(81)
Intercompany funding		36		-		-
Cash generated from discontinued operations		20		(116)		(126)
Cash used in operations		(475)		(3,225)		(2,933)
b) Reconciliation of net cash flow to movement in net funds
	Unaudited As at 31 July 2012			Audited As at 31 January 2012		Unaudited As at 31 July 2011
		£'000		£'000		£'000
Increase in cash in the year		325		2,241		2,405
Net cash inflow from increase in bank		51		100		106
Net cash inflow in respect of factoring		-		(121)		(121)
Changes resulting from cash flows		376		2,220		2,390
Loans and finance leases acquired with subsidiary		-		(96)		-
Factoring disposed with Inca		-		277		277
Effect of foreign exchange		1		-		-
Change in net funds		377		2,401		2,667
Net funds at beginning of period		2,632		231		231
Net funds at end of period		3,009		2,632		2,898
Analysis of net funds/(debt)
Cash and cash equivalents		3,059		2,734		2,898
Bank loans		-		(102)		-
Other loans		(50)		-		-
Net funds at end of period		3,009		2,632		2,898

1          Principal activity

1Spatial plc is a public limited company which is listed on the AIM London Stock Exchange and is incorporated and domiciled in the UK.  The address of the registered office is Pannell House, Park Street, Guildford, GU1 4HN.  The registered number of the company is 5429800.

The principal activity of the Group is a management consultancy and software business that provides companies with advice and solution in order to enhance overall profitability.

2          Basis of preparation

The interim results for the six months ended 31 July 2012, have been prepared on the going concern basis, which assumes that the Group will continue in operational existence for the foreseeable future. 

The accounting policies applied in the interim consolidated financial information are consistent with those of the annual financial statements for the year ended 31 January 2012 as described in those financial statements except for the impact of the standards applicable for the current financial position described below:

New and amended standards adopted by the Group

The following new standards and amendments to standards are mandatory for the first time for the financial year. The accounting policies applied in the interim consolidated financial information are consistent with those of the annual financial statements for the year ended 31 January 2012 as described in those financial statements except for the impact of the standards applicable for the current financial position described below:

• Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected total annual profit or loss.

The following amendments to existing standards and new interpretations became effective during the current period, but have no significant impact on the Group's financial statements:

· IFRS 1 (Amended), "First-time Adoption of International Financial Reporting Standards";  
· IFRS 7 (Amended), "Financial instruments: Disclosures";  
· IAS 12 (Amended), "Income taxes".




3          (Loss )/Earnings per share

Basic (loss)/earnings per share is calculated by dividing the profit/(loss) attributable to equity holders of the company by the weighted average number of ordinary shares in issue during the period.

	Unaudited Six months ended 31 July 2012			Audited Year ended 31 January 2012			Unaudited Six months ended 31 July 2011
	Continuing	Discontinued	Total	Continuing	Discontinued	Total	Continuing	Discontinued	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
(Loss)/Earnings attributable to equity holders	(961)	(166)	(1,127)	(1,420)	(54)	(1,474)	410	433	843
Adjustments:
Amortisation of intangible assets	502	-	502	505	68	573	178	68	246
Integration, strategic and other exceptional items	338	(39)	299	540	45	585	-	-	-
Adjusted (loss)/earnings	(121)	(205)	(326)	(375)	59	(316)	588	501	1,089
Basic earnings/(loss) per share	(0.27)	(0.05)	(0.32)	(0.57)	(0.02)	(0.59)	0.18	0.19	0.37
Diluted earnings/(loss) per share	(0.27)	(0.05)	(0.32)	(0.57)	(0.02)	(0.59)	0.18	0.19	0.37
Adjusted basic earnings/(loss) per share	(0.03)	(0.06)	(0.09)	(0.15)	0.02	(0.13)	0.26	0.22	0.48
Adjusted diluted earnings/(loss) per share	(0.03)	(0.06)	(0.09)	(0.15)	0.02	(0.13)	0.26	0.22	0.48
			Number			Number			Number
			000's			000's			000's
Basic weighted average number of shares			350,415			248,104			226,700
Impact of share options and warrants			-			-			-
Diluted weighted average number of shares			350,415			248,104			226,700

4          Nature of financial information

The interim information set out above is neither audited nor reviewed and does not represent the statutory financial statements within the meaning of section 434 of the Companies Act 2006 for 1Spatial plc or for any of the entities comprising the 1Spatial Group for the period ended 31 July 2012.

The statutory financial statements for the preceding financial year ended 31 January 2012 were filed with the Registrar and included an unqualified auditors' report.

5          Dividends

No dividend is proposed for the six months ended 31 July 2012 (31 January 2012: nil; 31 July 2011: nil).

6          Segmental information

	Head Office	Avisen	Storage Fusion	1Spatial	Total
31 July 2012	£'000	£'000	£000	£'000	£'000
Continuing operations
Revenue	-	1,199	216	5,005	6,420
Less intersegment sales	-	-	-	-	-
Total revenue from third parties	-	1,199	216	5,005	6,420
Cost of sales	-	(762)	-	(2,910)	(3,672)
Gross profit	-	437	216	2,095	2,748
Total administrative expenses	(807)	(381)	(449)	(2,012)	(3,649)
Adjusted EBITDA	(778)	88	37	673	20
Less: depreciation	(10)	(5)	(21)	(45)	(81)
Adjusted EBITA	(788)	83	16	628	(61)
Less: amortisation and impairment of intangible assets	-	-	(214)	(288)	(502)
Less: strategic, integration and other exceptional items	(19)	(27)	(35)	(257)	(338)
Total operating (loss)/profit	(807)	56	(233)	83	(901)
Finance income	-	-	-	1	1
Finance cost	(1)	(1)	(1)	(1)	(4)
Net finance	(1)	(1)	(1)	-	(3)
(Loss)/profit before tax	(808)	55	(234)	83	(904)
Tax charge	-	(1)	(30)	(26)	(57)
(Loss)/profit for the year from continuing operations	(808)	54	(264)	57	(961)
					Avisen
					£'000
Discontinued operations
Revenue					25
Less intersegment sales					-
Total revenue from third parties					25
Cost of sales					(3)
Gross profit					22
Total administrative expenses					(111)
Adjusted EBITDA					(50)
Less: depreciation					-
Adjusted EBITA					(50)
Less: amortisation and impairment of intangible assets					-
Less: strategic, integration and other exceptional items					(39)
Total operating loss					(89)
Finance income					-
Finance cost					-
Net finance cost					-
Loss before tax					(89)
Tax (charge)/credit					-
Loss for the period from discontinued operations					(89)

	Head Office	Avisen	Storage Fusion	1Spatial	Total
31 January 2012	£'000	£'000	£000	£'000	£'000
Continuing operations
Revenue	-	3,305	390	1,533	5,228
Less intersegment sales	-	-	-	-	-
Total revenue from third parties	-	3,305	390	1,533	5,228
Cost of sales	-	(2,595)	-	(778)	(3,373)
Gross profit	-	710	390	755	1,855
Total administrative expenses	(1,661)	(410)	(847)	(536)	(3,454)
Other operating income
Adjusted EBITDA	(1,134)	305	(13)	330	(512)
Less: depreciation	(11)	(7)	(13)	(11)	(42)
Adjusted EBITA	(1,145)	298	(26)	319	(554)
Less: amortisation and impairment of intangible assets	-	(8)	(431)	(66)	(505)
Less: strategic, integration and other exceptional items	(516)	10	-	(34)	(540)
Total operating (loss)/profit	(1,661)	300	(457)	219	(1,599)
Finance income	17	8	-	1	26
Finance cost	(5)	(3)	(1)	(11)	(20)
Net finance income/(cost)	12	5	(1)	(10)	6
(Loss)/profit before tax	(1,649)	305	(458)	209	(1,593)
Tax credit/(charge)	-	43	129	1	173
(Loss)/profit for the year from continuing operations	(1,649)	348	(329)	210	(1,420)
			Inca	South Africa	Total
			£000	£'000	£'000
Discontinued operations
Revenue			1,145	-	1,145
Less intersegment sales			-	-	-
Total revenue from third parties			1,145	-	1,145
Cost of sales			(722)	-	(722)
Gross profit			423	-	423
Total administrative expenses			(415)	(45)	(460)
Adjusted EBITDA			95	-	95
Less: depreciation			(19)	-	(19)
Adjusted EBITA			76	-	76
Less: amortisation and impairment of intangible assets			(68)	-	(68)
Less: strategic, integration and other exceptional items			-	(45)	(45)
Total operating profit/(loss)			8	(45)	(37)
Finance income			-	-	-
Finance cost			(17)	-	(17)
Net finance cost			(17)	-	(17)
Loss before tax			(9)	(45)	(54)
Tax credit			-	-	-
Loss for the year from discontinued operations			(9)	(45)	(54)

6 months ended 31 July 2011		Head office	Avisen	Storage Fusion	Total
		£'000	£'000	£'000	£'000
Continuing operations
Revenue		-	2,452	176	2,628
Less: intersegment sales		-	-	-	-
Total revenue from third parties		-	2,452	176	2,628
Cost of sales		-	(1,313)	(11)	(1,324)
Gross profit		-	1,139	165	1,304
Total administrative expenses		(350)	(135)	(397)	(882)
Other operating income		8	-	-	8
Adjusted EBITDA		(341)	1,011	(55)	615
Less: depreciation		(1)	(3)	(3)	(7)
Adjusted EBITA		(342)	1,008	(58)	608
Less: amortisation and impairment of intangible assets		-	(4)	(174)	(178)
Less: strategic, integration and other exceptional items		-	-	-	-
Total operating profit/(loss)		(342)	1,004	(232)	430
Finance income		-	-	-	-
Finance cost		(3)	(5)	-	(8)
Net finance income/(cost)		(3)	(5)	-	(8)
(Loss)/Profit before tax		(345)	999	(232)	422
Tax credit/(charge)		-	14	(26)	(12)
Profit/(Loss) for the period from continuing operations		(345)	1,013	(258)	410
					Inca £'000
Discontinued operations
Revenue					1,145
Less: intersegment sales					(3)
Total revenue from third parties					1,142
Cost of sales					(722)
Gross profit					420
Total administrative expenses					(415)
Adjusted EBITDA					92
Less: depreciation					(19)
Adjusted EBITA					73
Less: amortisation and impairment of intangible assets					(68)
Less: strategic, integration and other exceptional items					-
Total operating profit					5
Finance income					-
Finance cost					(17)
Net finance cost					(17)
Loss before tax					(12)
Tax credit					-
Loss for the period from discontinued activities					(12)
Gain on disposal (see note 7)					445
Profit for the period from discontinued operations					433

7          Discontinued operations

On 16 July 2012 the Group closed its loss making subsidiary in the Netherlands, Avisen BV. 

The results of the subsidiary have been reported in the interim statements for the period ended 31 July 2012 as discontinued operations and its performance is detailed within the discontinued segmental analysis in note 5.

The comparative numbers have not been restated for the year ended January 2012 and six month period ended July 2011 as the impact is not deemed material in the context of these numbers. 

8          Strategic, integration and other exceptional items

In accordance with the Group's policy for strategic, integration and other exceptional items, the following charges were included in this category for the period:

	Six months ended 31 July 2012	Year ended 31 January 2012	Six months ended 31 July 2011
Continuing operations	£'000	£'000	£'000
Strategic costs	15	301	-
Costs of duplication and integration	323	239	-
Total - continuing operations	338	540	-
Discontinued operations
Costs of duplication and integration	39	45	-
Total - discontinued operations	39	45	-
Total	377	585	-

9          Intangible assets including goodwill

	Goodwill	Brands	Customers and related contracts	Software	Development costs		Total
						Website costs
At 31 July 2012	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Cost
At 1 February 2012	10,102	232	899	3,149	1,007	30	15,419
Additions	-	-	-	-	276	-	276
Disposals	(62)	-	-	-	-	-	(62)
At 31 July 2012	10,040	232	899	3,149	1,283	30	15,633
Accumulated impairment and amortisation
At 1 February 2012	4,500	4	21	594	535	30	5,684
Amortisation	-	12	64	265	161	-	502
Disposals	-	-	-	-	-	-	-
At 31 July 2012	4,500	16	85	859	696	30	6,186
Net book amount at 31 July 2012	5,540	216	814	2,290	587	-	9,447

	Goodwill	Brands	Customers and related contracts	Software	Development costs		Total
						Website costs
At 31 January 2012	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Cost
At 1 February 2011	12,849	252	1,852	944	595	-	16,492
Additions	100	-	-	34	412	30	576
Acquisition of subsidiary	3,346	232	899	2,171	-	-	6,648
Disposals	(6,193)	(252)	(1,852)	-	-	-	(8,297)
At 31 January 2012	10,102	232	899	3,149	1,007	30	15,419
Accumulated impairment and amortisation
At 1 February 2011	4,500	53	545	243	438	-	5,779
Impairment	-	-	-	-	-	25	25
Amortisation	-	10	85	351	97	5	548
Disposals	-	(59)	(609)	-	-	-	(668)
At 31 January 2012	4,500	4	21	594	535	30	5,684
Net book amount at 31 January 2012	5,602	228	878	2,555	472	-	9,735

10        Share capital

	As at 31 July 2012	As at 31 January 2012
	£'000	£'000
Allotted, called up and fully paid
350,415,354 (Jan 2012: 348,769,274) ordinary shares of 1p each	3,504	3,488
226,699,878 (Jan 2012: 226,699,878) deferred shares of 4p each	9,068	9,068
	12,572	12,556

 

END

 

 

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