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1Spatial Plc (SPA)

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Tuesday 10 October, 2017

1Spatial Plc

Interim Results

RNS Number : 1287T
1Spatial Plc
10 October 2017
 

10 October 2017

 

1Spatial plc (AIM: SPA)

 

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

 

Interim Results for the six month period ended 31 July 2017

 

Turnaround delivering improved results

 

The Board of Directors of 1Spatial (the ''Board''), the software solutions provider and global leader in geospatial data management, is pleased to announce the Group's interim results for the six month period ended 31 July 2017.

 

Highlights                                                                                         

 

In January 2017, the new management team set in place a clear plan to achieve a strong financial and operational platform for the business which would be evidenced through the generation of cash, growing profits and sustainable growth.

 

The financial performance in this half year provides clear evidence that the turnaround plan is working. 

 

Financial highlights

 

·      Revenues grew by 2% from £11.9m to £12.1m

High-margin Geospatial underlying revenues** up by 19% from £7.2m to £8.6m

In line with strategy, the low-margin hardware revenues from IT managed services business have reduced by £1m in the period

Continued strong recurring revenues base

·          Total cost base (including capitalised costs) reduced by 8% (£1.1m).  This equates to an annualised cost saving of £2.2m.

·        Gross profit margin increased from 39% to 43%

·        Adjusted EBITDA* on a like-for-like basis1 has improved from a loss of £0.4m to a profit of £0.3m

·        Operating loss reduced 37% from £1.9m to £1.2m

·        £2.7m positive swing in cash flow in the period (outflow of £0.3m compared to an outflow of £3m in H1 2016/17)

Net cash balance at 31 July 2017 of £0.3m (31 January 2017: £0.6m)

Overdraft facility of £3m renewed in May 2017

·        Significantly reduced loss after tax of £1.4m (year ended 31 January 2017: £18.3m loss: H1 2016/17 loss of £2.1m)

·        The board believes that that the current bank overdraft facility is sufficient to support the Company's working capital requirements

 

 

Operational highlights

 

·      Sales increased in all geographic segments with a focus on three key sectors of Land Management, Utilities and Transportation

The enhanced sales strategy refocused on the key sectors has delivered growth from existing clients as well as established relationships with new potential customers

 

·      Key customer wins:          

UK - major contract with Northern Gas Networks (NGN). This will run for an initial three year period with an option to extend for a further three years

US - strategically important contract with the US Federal Highways Administration (FHWA) for software and services together with ongoing support and maintenance for four option years (total value US$540k)

US - strategically important contract with the National Oceanic and Atmospheric Administration (NOAA) for software and services together with ongoing support and maintenance for four option years (total value US$207k)

 

·      Portfolio streamlined with:

Disposal of significant share of loss-making business Enables IT Inc. in March 2017 for £0.1m receivable

Acquisition of the remaining 27% of the Company's exclusive US distributor 1Spatial Inc. strengthening the Group's ability to serve key US customers and partners such as US Census and ESRI

Acquisition of the remaining 51% of Sitemap, strengthening the Group's technology platform

 

 

Board changes

·       The board has continued to be strengthened and includes the following changes :

Francis Small appointed to the Board as a Non-Executive Director on 1 August 2017

Claire Milverton appointed CEO from 9 October 2017

Nicole Payne appointed CFO from 9 October 2017

 

Commenting on the results 1Spatial CEO, Claire Milverton, said:

 

"The first half has shown considerable progress on our turnaround strategy. The focus on execution, and a greater engagement with our existing clients has seen an increase in revenues.  Emphasis on growing our client base has also seen wins with a number of exciting new clients such as Northern Gas Networks and the Federal Highways Agency.  From a financial perspective through increased sales and operational effectiveness we've also delivered a substantial improvement in profitability and cash flow, both of which remain key priorities for us going forward.

We are confident for the full year and that through our strategy of working in partnership with our customers to provide them with technology enabled innovative solutions, we are well placed to grow a substantial, profitable and cash-generative business out into the future".

 

 

* Adjusted for strategic, integration, other one-off items and share-based payment charge 

** Underlying revenue - revenue on a like-for-like1 basis, at constant currency (prior period figures at current period exchange rates)

1 Like-for-like - prior half year revenues include £0.4m of revenues arising from recharges to associates, that are not recurring in the current half year as a result of these associates now being wholly-owned and the revenue being eliminated on consolidation

 

For further information, please contact:

 

1Spatial plc

01223 420 414

Andrew Roberts / Claire Milverton

 

 

 

N+1 Singer

020 7496 3000

Shaun Dobson / Lauren Kettle

 

 

 

FTI Consulting

020 3727 1000

Dwight Burden / Alex Le May

[email protected]

 

About 1Spatial

1Spatial plc is a group of market leading software and solutions companies trading under the brands 1Spatial and Enables IT.

1Spatial

1Spatial is a software solutions provider and global leader in managing geospatial data. We work with our clients to deliver real value by making data current, complete and consistent through the use of automated processes - ensuring that decisions are always based on the highest quality information available.

Our unique, rules-based approach delivers enterprise-scale, cross-platform automation to all stages of the data lifecycle. It builds confidence in the data while reducing the time and cost of stewardship.

Our global clients include utilities, national mapping and land management agencies, government departments, transportation organisations, emergency services, defence and census bureaus.  A leader in our field, we have a wealth of experience and a record of continual innovation and development. We partner with some of the leading technology vendors including, ESRI and Oracle.

We have offices in the UK, US, France, Belgium, Ireland and Australia. 

 

Enables IT

 

Enables IT provides IT Managed Services. It offers public, private and hybrid cloud offerings with everything from Backup-as-a-service through to managed desktops. Their end-to-end IT capability provides everything from consultancy and project management, to the installation of physical infrastructure.

Clients trust Enables IT to manage their systems and secure their data. From Healthcare to Education and from Financial Services to Legal, leading organisations rely on Enables IT to ensure their IT is an asset, not a liability.

To find our more, visit www.1spatial.com

 

 

 

 

Half-year review

 

In January 2017, the new management team set in place a clear plan to achieve a strong financial and operational platform for the business which would be evidenced through cash, growing profits and sustainable growth. This plan was the result of a full strategic review to develop a clear focus for the Group going forwards and included streamlining the business into two core units, the alignment of the Group to better meet market needs, and creation of an organisational structure that provides clear responsibilities and accountability.

 

The financial performance in this half year provides clear evidence that the turnaround plan is working. 

 

Our strategy

 

1Spatial is a software solutions provider and global leader in managing geospatial data. We work with our clients to deliver real value by making data current, complete and consistent through the use of automated processes; ensuring that decisions are always based on the highest quality information available. Our own software architectures are 'Open' which allows us to integrate with other vendors' technology and enables us to provide the most appropriate solution to our clients.

Our key focus is across three sectors, namely Land Management, Utilities and Transportation and we operate globally but have offices in the UK, US, France, Belgium, Ireland and Australia. 

During the period, we have continued to develop and deliver our world-class technology, increase our market reach and cemented strategic relationships with key partners to ensure that we deliver the right solutions to our clients. We have continued to invest in sales and marketing ensuring that these investments are aligned to our strategy. 

 

Financial performance

 

Revenue growth

 

Our enhanced sales team helped deliver revenue growth in all geographies, and, the quality of this revenue has improved with a higher proportion of licence revenue driving additional service revenues. 

 

The Group's revenue mix continued to improve in the first half. Revenues were up 19 per cent. in the higher-margin Geospatial business (£1.3m on a like-for-like basis, at constant currency), and Enables IT sales reduced by £1m as we chose to move away from lower-margin hardware revenue.

 

Our sales strategy focuses on both growing existing accounts, and building new relationships across our key verticals; Land Management, Utilities and Transport. During the period, the majority of growth in revenue was derived from existing customers. Post period end, new contracts have been secured for new customers such as NGN (UK), FHWA (US), NOAA (US), reflecting the sales execution efforts made in the first half.

 

As well as growing revenues, it is also key that we maintain our recurring support and maintenance revenues; initiatives have been put in place during the period to ensure this is achieved.

 

Cost savings

 

During the period, we have delivered on our plan to reduce costs by £1.1m (8 per cent.) - this equates to £2.2m annualised costs. These costs also include the cost of capitalised development.  We now believe that the cost structure is much better aligned with the current business needs.

 

 

Gross profit

 

Gross profit in the period improved from 39 per cent. to 43 per cent. even after significantly less direct costs were capitalised, in the period (£0.5m compared to £1.9m in H1 2016/17). This improvement is due to better project management on professional service contracts and increased high-margin software sales in the period.

 

Adjusted EBITDA and cash flow

The actions to grow quality revenues and reduce costs resulted in a transition from an adjusted EBITDA loss (on a like-for-like basis) of £0.4m in the prior period to a profit of £0.3m. This has also resulted in a positive impact on cash, with a cash inflow from operations of £0.2m (after cash one-off costs of £0.5m) compared with a cash outflow from operations in the prior period of £0.9m.

 

Overall net cash flow has shown a £2.7m positive swing year-on-year (outflow of £0.3m compared to an outflow of £3m in H1 2016/17). The net cash balance at 31 July 2017 was £0.3m (31 January 2017: £0.6m).  The overdraft facility of £3m was renewed in May 2017.

 

Loss for the period

 

Loss after tax of £1.4m for the period is significantly reduced (year ended 31 January 2017: £18.3m loss, H1 2016/17 loss: £2.1m). This loss is the adjusted EBITDA figure less depreciation, amortisation and impairment, strategic, integration, other one-off items, share-based payment charges, net finance costs and income tax.

 

 

Balance sheet

 

The net asset position at 31 July 2017 is £8.5m, down from £9.2m at 31 January 2017. The balance of non-current assets remains the same at £13.0m as a result of acquiring control of Sitemap Ltd in the period (£0.2m intangibles on acquisition), net of amortisation of existing intangible assets. No further goodwill arises on acquisition of the final 27 per cent. of 1Spatial Inc. Net current assets are down by £0.8m, £0.3m of this is cash and the remainder is working capital. The line item "other components of equity" arose on the acquisition of the final 27 per cent. of 1Spatial Inc. after eliminating non-controlling interest.

 

 

Outlook 

 

The key objective for the management team for the remainder of the year to 31 January 2018 is to ensure that the Group's realigned focus and revised strategy continues to drive cash generation and profitable adjusted EBITDA, as well as follow through on key strategic initiatives which will boost revenue growth.

The second half of the year has started well and whilst there are always challenges in any business and in particular during a turnaround year, we are confident of meeting full year expectations.

 

Looking forward

1Spatial is well-positioned in a fast-growing part of the market and has developed a unique patented technology to deliver targeted solutions to our existing and potential customers. 

A May 2017 report by market analyst P&S Market Research estimates the size of the global GIS software, services and hardware market at $9.0bn and forecasts that it will grow at a 10.1 per cent. CAGR to reach $17.5bn by 2023. To ensure that we are positioned at the forefront of this sector, we continue to invest in our technology platform and make it accessible to other vendors - a key element of our strategy for scalable revenue growth to reach a growing addressable market.  

We have a strong and focussed management team, which combined with our in-depth subject matter expertise and technology-led solutions and services, gives the business the opportunity to develop into a significant force in the market.

 

Looking ahead, we are well placed to grow a substantial, profitable and cash-generative business over the long term.

 

 

Condensed consolidated statement of comprehensive income

Six months ended 31 July 2017

 

 

Unaudited

Audited

Unaudited

 

 

Six months ended

31 July 2017

Year ended

31 January 2017

Six months ended

31 July 2016

 

 

 

 

*Restated

Continuing operations

Note

£'000

£'000

£'000

Revenue

 

12,150

22,065

11,893

Cost of sales

 

(6,913)

(12,386)

(7,281)

Gross profit

 

5,237

9,679

4,612

Administrative expenses

 

(6,476)

(25,129)

(6,470)

 

 

(1,239)

(15,450)

(1,858)

Adjusted* EBITDA

 

303

(407)

40

Less: depreciation

 

(203)

(452)

(222)

Less: amortisation and impairment of intangible assets

 

(660)

(11,408)

(948)

Less: share-based payment charge

 

(118)

(566)

(355)

Less: strategic, integration and other one-off items

7

(561)

(2,617)

(373)

Operating loss

 

(1,239)

(15,450)

(1,858)

Finance income

 

42

176

177

Finance cost

 

(76)

(208)

(110)

Net finance (cost)/income

 

(34)

(32)

67

Share of net loss of associates accounted for using the equity method

 

 

-

 

(266)

(237)

Loss before tax

 

(1,273)

(15,748)

(2,028)

Income tax credit

 

72

988

20

Loss for the period from continuing operations

 

(1,201)

(14,760)

(2,008)

Discontinued operations

 

 

 

 

 

Loss for the year from discontinued operations (attributable to equity holders of the company)

 

 

(184)

 

(3,542)

(106)

Loss for the period attributable to:

 

 

 

 

Equity shareholders of the parent                                                                                                 

 

(1,385)

(18,423)

(2,193)

Non-controlling interest                                                                                                                        

 

-

121

79

                                                                                                                                                               

 

(1,385)

(18,302)

(2,114)

 

Other comprehensive loss

 

 

 

 

Items that may subsequently be reclassified to profit or loss:

 

 

 

Actuarial gains arising on defined benefit pension, net of tax

-

(36)

-

Exchange differences on translating foreign operations

 

311

 

281

615

Other comprehensive loss for the period, net of tax

 

311

245

615

Total comprehensive loss

 

(1,074)

(18,057)

(1,499)

Total comprehensive loss attributable to:

 

 

 

 

Equity shareholders of the parent                                                                                                 

 

(1,074)

18,169

(1,578)

Non-controlling interest                                                                                                                        

 

-

112

79

                                                                                                                                                               

 

(1,074)

(18,057)

(1,499)

 

Total comprehensive loss attributable to equity shareholders of the Parent arises from:

 

 

 

Continuing operations

(1,126)

(14,258)

(1,302)

Discontinued operations

52

(3,799)

(197)

                                                                                                                                                               

 

(1,074)

(18,057)

(1,499)

 

* Restated to classify Enables IT Inc., Storage Fusion Limited and Avisen UK Limited as discontinued operations.

Loss per ordinary share from continuing and discontinued operations attributable to the owners of the parent during the year (expressed in pence per ordinary share): 

 

Basic loss per share

4

(0.18)

(2.53)

(0.30)

 

From continuing operations

 

(0.16)

(2.04)

(0.29)

 

From discontinued operations

 

(0.02)

(0.49)

(0.01)

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted loss per share

4

(0.18)

(2.53)

(0.30)

 

From continuing operations

 

(0.16)

(2.04)

(0.29)

 

From continuing operations

 

(0.02)

(0.49)

(0.01)

 

 

* Adjusted for strategic, integration and other exceptional items and share-based payment (note 7).

 

Condensed consolidated statement of financial position A

As at 31 July 2017a0

 

 

Unaudited

 

Audited

 

Unaudited

 

 

 

As at

31 July 2017

As at

31 January 2017

As at

31 July 2016

 

Note

£'000

£'000

£'000

Assets

 

 

 

 

Non-current assets

 

 

 

 

Investments

9

25

-

-

Intangible assets including goodwill

 

12,116

11,968

22,813

Property, plant and equipment

 

779

1,057

1,577

Interests in associates

10

-

-

29

Other non-current assets

9

100

-

-

Total non-current assets

 

13,020

13,025

24,419

Current assets

 

 

 

 

Inventories

 

-

-

16

Trade and other receivables

11

6,045

8,929

9,952

Current income tax receivable

 

-

-

8

Cash and cash equivalents

 

2,293

1,285

2,482

Total current assets

 

8,338

10,214

12,458

Assets of disposal group classified as held for sale

   9

-

547

-

Total assets

 

21,358

23,786

36,877

Liabilities

 

 

 

 

Current liabilities

 

 

 

 

Bank Borrowings

 

(1,953)

(681)

(118)

Trade and other payables

12

(9,712)

(12,072)

(9,481)

Current income tax liabilities

 

(23)

(23)

(17)

Obligations under finance lease

 

-

(11)

-

Provisions

 

(249)

(242)

(221)

Total current liabilities

 

(11,937)

(13,029)

(9,837)

Non-current liabilities

 

 

 

 

Obligations under finance lease

 

-

(53)

-

Defined benefit pension obligation

 

(640)

(614)

(507)

Deferred tax

 

(314)

(421)

(1,085)

Total non-current liabilities

 

(954)

(1,088)

(1,592)

Liabilities of disposal group classified as held for sale

9

-

(447)

-

Total liabilities

 

(12,891)

(14,564)

(11,429)

Net assets

 

8,467

9,222

25,448

 

 

 

 

 

Share capital and reserves

 

 

 

 

Share capital

13

16,705

16,449

16,449

Share premium account

 

22,931

22,931

22,931

Own shares held

 

(303)

(303)

(303)

Equity-settled employee benefits reserve

 

3,373

3,254

3,045

Merger reserve

 

16,030

15,347

15,347

Reverse acquisition reserve

 

(11,584)

(11,584)

(11,584)

Currency translation reserve

 

169

(142)

183

Accumulated losses

 

(38,377)

(36,992)

(20,726)

Other components of equity

 

(477)

-

-

Equity attributable to shareholders of the parent company

 

 

8,467

 

8,960

25,342

Non-controlling interests

 

-

262

106

Total equity

 

8,467

9,222

25,448

 

Condensed consolidated statement of changes in equity

Period ended 31 July 2017

 

 

 

£'000

Share capital

Share premium

account

Own shares held

Equity-settled employee benefits reserve

Merger reserve

Reverse acquisition reserve

Currency translation reserve

Other components of equity *

Accumulated losses

Total **

 

Non-

controlling

interest

 

 

Total

equity

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at 1 February 2016

16,223

22,264

(306)

2,688

15,347

(11,584)

(432)

-

(18,533)

25,667

-

25,667

Comprehensive income/(loss)

 

 

 

 

 

 

 

 

 

 

 

 

Loss for the year

-

-

-

-

-

-

-

-

(18,423)

(18,423)

121

(18,302)

Other comprehensive income/(loss)

 

 

 

 

 

 

 

 

 

 

 

 

Actuarial losses arising on defined benefit pension

-

-

-

-

-

-

-

-

(36)

(36)

-

(36)

Exchange differences on translating foreign operations

-

-

-

-

-

-

290

-

-

290

(9)

281

Total other comprehensive income/(loss)

-

-

-

-

-

-

290

-

(36)

254

(9)

245

Total comprehensive income/(loss)

-

-

-

-

-

-

290

-

(18,459)

(18,169)

112

(18,057)

Transactions with owners recognised directly in equity

 

 

 

 

 

 

 

 

 

 

 

 

Exercise of share options

-

11

3

-

-

-

-

-

-

14

-

14

Proceeds from shares issued net of share issue costs of £23k

226

656

-

-

-

-

-

-

-

882

-

882

Recognition of share-based payments

-

-

-

566

-

-

-

-

-

566

-

566

 

226

667

3

566

-

-

-

-

-

1,462

-

1,462

Transactions with non-controlling interest

Non-controlling interest arising on acquisition

-

-

-

-

-

-

-

-

-

-

150

150

 

Balance at 31 January 2017 (Audited)

16,449

22,931

(303)

3,254

15,347

(11,584)

(142)

-

(36,992)

8,960

262

9,222

 

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive income/(loss)

 

 

 

 

 

 

 

 

 

 

 

 

Loss for the period

-

-

-

-

-

-

-

-

(1,385)

(1,385)

-

(1,385)

Other comprehensive income/(loss)

 

 

 

 

 

 

 

 

 

 

 

 

Exchange differences on translating foreign operations

-

-

-

-

-

-

311

-

-

311

-

311

Total other comprehensive income

-

-

-

-

-

-

311

-

-

311

-

311

Total comprehensive income/(loss)

-

-

-

-

-

-

311

-

(1,385)

(1,074)

-

(1,074)

Transactions with owners recognised directly in equity

 

 

 

 

 

 

 

 

 

 

 

 

Issue of shares to acquire remaining interest in Sitemap Ltd (Note 13)

56

-

-

-

144

-

-

-

-

200

-

200

Acquisition of shares in 1Spatial Inc. (Note 13)

200

-

-

-

539

-

-

(477)

-

262

(262)

-

Recognition of share-based payments 

-

-

-

119

-

-

-

-

-

119

-

119

 

256

-

-

119

683

-

-

(477)

-

581

(262)

319

 

Balance at 31 July 2017 (Unaudited)

 

16,705

 

22,931

 

(303)

 

3,373

 

16,030

 

(11,584)

 

169

 

(477)

 

(38,377)

 

8,467

 

-

 

8,467

                           

               

* Other components of equity arose through the acquisition of further shares in 1Spatial Inc.

** Total equity attributable to the equity shareholders of the parent.

 

 

 

Condensed consolidated statement of changes in equity

Period ended 31 July 2016

 

 

£'000

Share capital

Share premium

account

Own shares held

Equity-settled employee benefits reserve

Merger reserve

Reverse acquisition reserve

Currency translation reserve

Accumulated losses

Total *

 

Non-

controlling

interest

 

 

Total

equity

 

 

 

 

 

 

 

 

 

 

 

 

Balance at 1 February 2016

16,223

22,264

(306)

2,688

15,347

(11,584)

(432)

(18,533)

25,667

-

25,667

Comprehensive income/(loss)

 

 

 

 

 

 

 

 

 

 

 

Loss for the period

-

-

-

-

-

-

-

(2,193)

(2,193)

79

(2,114)

Other comprehensive income/(loss)

 

 

 

 

 

 

 

 

 

 

 

Exchange differences on translating foreign operations

-

-

-

-

-

-

615

-

615

-

615

Total other comprehensive loss

-

-

-

-

-

-

615

-

615

-

615

Total comprehensive loss

-

-

-

-

-

-

615

(2,193)

(1,578)

79

(1,499)

Transactions with owners recognised directly in equity

 

 

 

 

 

 

 

 

 

 

 

Exercise of share options

-

11

3

-

-

-

-

-

14

-

14

Issue of share capital

226

656

-

-

-

-

-

-

882

-

882

Recognition of share-based payments

-

-

-

357

-

-

-

-

357

-

357

 

226

667

3

357

-

-

-

-

1,253

-

1,253

Transactions with non-controlling interest

 

 

 

 

 

 

 

 

 

 

 

Non-controlling interest arising on acquisition

-

-

-

-

-

-

-

-

-

27

27

 

-

-

-

-

-

-

-

-

-

27

27

Balance at 31 July 2016 (Unaudited)

16,449

22,931

(303)

3,045

15,347

(11,584)

183

(20,726)

25,342

106

25,448

 

 

 

 

 

 

 

 

 

 

 

 

* Total equity attributable to the equity shareholders of the parent.

 

 

 

 

 

Condensed consolidated statement of cash flows

Period ended 31 July 2017

 

 

ended 31 July 2010

Unaudited

Audited

Unaudited

 

 

31 July 2017

31 January 2017

31 July 2016

 

Note

£'000

£'000

£'000

Cash flows from operating activities

 

 

 

 

Cash generated from/(used in) operations

a)

220

(1061)

(1,306)

Interest received

 

-

3

23

Interest paid

 

(74)

(169)

(77)

Tax received

 

66

425

420

Net cash generated from/(used in) operating activities

 

212

(802)

 

(940)

Cash flows from investing activities

 

 

 

 

Acquisition of subsidiaries (net of cash acquired)

 

15

(852)

(852)

Cash disposed with subsidiary

 

-

(48)

-

Purchase of property, plant and equipment

 

(58)

(574)

(251)

Expenditure on product development and intellectual property capitalised

 

(547)

(3,552)

(1,935)

Proceeds from sale of property, plant and equipment

 

139

84

82

Net cash used in investing activities

 

(451)

(4,942)

(2,956)

Cash flows from financing activities

 

 

 

 

Net proceeds from issue of ordinary share capital

 

-

896

896

Repayment of borrowings

 

(64)

-

-

Net cash (used in)/generated from financing activities

 

(64)

896

896

Net decrease in cash and cash equivalents

 

(303)

(4,848)

(3,000)

Cash and cash equivalents at start of period

 

604

4,996

4,996

Less cash and cash equivalents in assets held for sale

 

-

(51)

-

Effects of foreign exchange on cash and cash equivalents

 

39

507

368

Cash and cash equivalents at end of period

 

340

604

2,364

 

 

 

 

 

 

 

 

 

 

 

 

 

Notes to the condensed consolidated statement of cash flows

a) Cash generated from/(used in) operations

 

 

 

 

Unaudited

Audited

Unaudited

 

As at

31 July 2017

As at 31 January 2017

As at

31 July 2016

  

£'000

£'000

£'000

 

 

 

 

Loss before tax including discontinued operations

(1,521)

(19,455)

(2,101)

Adjustments for:

 

 

 

Share of net loss of associates

-

266

237

Net finance (income)/cost

74

176

(63)

Depreciation

203

795

296

Amortisation and impairment

660

14,445

1,175

Share-based payment charge

118

566

355

Loss on disposal of property, plant and equipment

10

33

32

Gain on bargain purchase

(9)

-

-

Loss on disposal of assets held for sale

199

-

-

Increase in inventories

-

-

(16)

Decrease in trade and other receivables

3,026

2,233

1,876

(Decrease)/Increase in trade and other payables

(2,578)

538

(2,356)

Increase/(Decrease) in provisions

7

(155)

(202)

Increase in defined benefit pension obligation

-

41

-

Net foreign exchange movement

31

(544)

(539)

Cash  generated from/(used in) operations 

220

(1,061)

(1,306)

 

 

b) Reconciliation of net cash flow to movement in net funds

 

Unaudited

Audited

Unaudited

 

As at

31 July 2017

As at 31 January 2017

As at

31 July 2016

  

£'000

£'000

£'000

Decrease in cash in the period

(303)

(4,848)

(3,000)

Changes resulting from cash flows

(303)

(4,848)

(3,000)

Less cash and cash equivalents in assets held for sale

-

(51)

-

Effect of foreign exchange

39

507

368

Change in net funds

(264)

(4,392)

(2,632)

Net funds at beginning of period 

604

4,996

4,996

Net funds at end of period 

340

604

2,364

 

 

 

 

Analysis of net funds

 

 

 

Cash and cash equivalents classified as:

 

 

 

Current assets

2,293

1,285

2,482

Bank and other loans

(1,953)

(681)

(118)

Net funds at end of period 

340

604

2,364

 

 

 

 

 

Notes to the Interim Financial Statements

 

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 Tennyson House, Cambridge Business Park, Cowley Road, Cambridge, CB4 0WZ.  The registered number of the Company is 5429800.

 

The principal activity of the Group is the development and sale of IT software along with related consultancy and support.  The principal activity of the Company is that of a parent holding company which manages the Group's strategic direction and underlying subsidiaries.

 

 

2. Basis of preparation

 

The condensed consolidated interim financial information for the six months ended 31 July 2017, has been prepared in accordance with the accounting policies that are expected to be adopted in the Group's full financial statements for the year ended 31 January 2018 and are not expected to be significantly different to those set out in the Group's audited financial statements for the year ended 31 January 2017.

 

The financial information for the half years ended 31 July 2017 and 31 July 2016 is neither audited nor reviewed and does not constitute statutory financial statements within the meaning of section 434(3) of the Companies Act 2006 for 1Spatial plc or for any of the entities comprising the 1Spatial Group.  Statutory financial statements for the preceding financial year ended 31 January 2017 were filed with the Registrar and included an unqualified auditors' report.

After making enquiries, the Directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the half-yearly condensed consolidated financial statements.

 

3. Taxation

 

The tax expense on the result for the six months ended 31 July 2017 is based on the estimated tax rates in the jurisdictions in which the Group operates, for the year ending 31 January 2018.

 

 

4. Loss per share

 

Basic loss per share is calculated by dividing the loss attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the period.

 

 

Unaudited

Audited

Unaudited

 

As at

31 July 2017

As at

31 January 2017

As at

31 July 2016

  

£'000

£'000

£'000

Loss attributable to equity holders of the Parent

(1,385)

(18,423)

(2,193)

Less Loss from discontinued operations

(184)

(3,542)

(106)

Loss from continuing operations

(1,201)

(14,881)

(2,087)

 

 

 

 

Adjustments:

 

 

 

Profit attributable to non-controlling interest

-

121

79

Income tax credit

(72)

(988)

(20)

Net finance cost/(income)

34

32

(67)

Share of net loss of associates accounted for using the equity method

-

266

237

Depreciation

203

452

222

Amortisation and impairment of intangible assets

660

11,408

948

Share-based payment charge

118

566

355

Strategic, integration and other one-off items

561

2,617

373

Adjusted EBITDA from continuing operations

303

(407)

40

 

 

 

 

 

 

Number

Number

Number

  

000s

000s

000s

Basic weighted average number of ordinary shares

753,925

728,895

719,604

Impact of options and warrants

-

-

306

Diluted weighted average number of ordinary shares

753,925

728,985

719,910

 

 

Unaudited

Audited

Unaudited

 

As at

31 July 2017

As at

31 January 2017

As at

31 July 2016

 

Pence

Pence

pence

Basic loss per share

(0.18)

(2.53)

(0.30)

-       from continuing operations

(0.16)

(2.04)

(0.29)

-       from discontinued operations

(0.02)

(0.49)

(0.01)

Diluted loss per share

(0.18)

(2.53)

(0.30)

-       from continuing operations

(0.16)

(2.04)

(0.29)

-       from discontinued operations

(0.02)

(0.49)

(0.01)

Basic Adjusted EBITDA per share

0.02

(0.54)

0.04

-       from continuing operations

0.04

(0.06)

0.01

-       from discontinued operations

(0.02)

(0.49)

0.03

Diluted Adjusted EBITDA per share

0.02

(0.54)

0.04

-       from continuing operations

0.04

(0.06)

0.00

-       from discontinued operations

(0.02)

(0.49)

0.04

 

 

5. Dividends

No dividend is proposed for the six months ended 31 July 2017 (31 January 2017: nil; 31 July 2016: nil).

 

 

6. Segmental information

 

31 July 2017

Central costs

£'000

Geospatial

£'000

IT Managed Services

£'000

Total

£'000

 

 

 

 

 

Revenue

-

8,563

3,587

12,150

Cost of sales

-

(4,200)

(2,713)

(6,913)

Gross profit

-

4,363

874

5,237

 

 

 

 

 

Administrative expenses

(1,572)

(4,405)

(499)

(6,476)

 

 

 

 

 

Adjusted EBITDA

(803)

873

233

 

303

Less: depreciation

(15)

(110)

(78)

(203)

Less: amortisation and impairment of intangible assets

-

(612)

(48)

(660)

Less: share-based payment charge

(98)

(20)

-

(118)

Less: strategic, integration and other one-off items

(656)

(173)

268

(561)

Total operating (loss)/profit

(1,572)

(42)

375

(1,239)

 

 

 

 

 

Finance income

-

42

 

-

42

Finance cost

(47)

(26)

(3)

(76)

Net finance (cost) / income

(47)

16

(3)

(34)

 

 

 

 

 

(Loss)/profit before tax

(1,619)

(26)

372

(1,273)

 

 

 

 

 

Tax

-

63

9

72

 

 

 

 

 

(Loss)/profit for the period from continuing operations

(1,619)

37

381

(1,201)

Loss for the period from discontinued operations

-

-

(184)

(184)

(Loss)/profit for the period

(1,619)

37

197

(1,385)

 

 

31 January 2017

Central costs

£'000

Geospatial

£'000

IT Managed Services

£'000

Total

£'000

 

 

 

 

 

Revenue

-

15,133

6,932

22,065

Cost of sales

-

(6,868)

(5,518)

(12,386)

Gross profit

-

8,265

1,414

9,679

 

 

 

 

 

Administrative expenses

(5,157)

(18,758)

(1,214)

(25,129)

 

 

 

 

 

Adjusted EBITDA

(2,352)

1,478

467

(407)

Less: depreciation

(57)

(240)

(155)

(452)

Less: amortisation and impairment of intangible assets

 

-

(11,323)

(85)

(11,408)

Less: share-based payment charge

(550)

(16)

-

(566)

Less: strategic, integration and other one-off items

(2,198)

(392)

(27)

(2,617)

Total operating (loss)/profit

(5,157)

(10,493)

200

(15,450)

 

 

 

 

 

Finance income

-

176

-

176

Finance cost

(116)

(85)

(7)

(208)

Net finance (cost) / income

(116)

91

(7)

(32)

 

 

 

 

 

Share of net loss of associates accounted for using the equity method

-

(39)

(227)

(266)

 

 

 

 

 

Loss before tax

(5,273)

(10,441)

(34)

(15,748)

 

 

 

 

 

Tax

-

1,081

(93)

988

 

 

 

 

 

Loss for the period from continuing operations

(5,273)

(9,360)

(127)

(14,760)

Loss for the period from discontinued operations

-

-

(3,542)

(3,542)

Loss for the period

(5,273)

(9,360)

(3,669)

(18,302)

 

 

6. Segmental information (continued)

 

31 July 2016

Central costs

£'000

Geospatial

£'000

IT Managed Services

£'000

Total

£'000

 

 

 

 

 

Revenue

-

7,229

4,664

11,893

Cost of sales

-

(3,448)

(3,833)

(7,281)

Gross profit

-

3,781

831

4,612

 

 

 

 

 

Administrative expenses

(1,763)

(4,054)

(653)

(6,470)

 

 

 

 

 

Adjusted EBITDA

(1,183)

908

315

40

Less: depreciation

(28)

(119)

(75)

(222)

Less: amortisation and impairment of intangible assets

-

(907)

(41)

(948)

Less: share-based payment charge

(275)

(80)

-

(355)

Less: strategic, integration and other one-off items

(277)

(75)

(21)

(373)

Total operating (loss)/profit

(1,763)

(273)

178

(1,858)

 

 

 

 

 

Finance income

-

177

-

177

Finance cost

(52)

(53)

(5)

(110)

Net finance (cost) / income

(52)

124

(5)

67

 

 

 

 

 

Share of net loss of associates accounted for using the equity method

-

(40)

(197)

(237)

 

 

 

 

 

Loss before tax

(1,815)

(189)

(24)

(2,028)

 

 

 

 

 

Tax

-

12

8

20

 

 

 

 

 

Loss for the period from continuing operations

(1,815)

(177)

(16)

(2,008)

Loss for the period from discontinued operations

-

-

(106)

(106)

Loss for the year

(1,815)

(177)

(122)

(2,114)

 

 

7. Strategic, integration and other one-off items

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

 

Six months ended

31 July 2017

Year ended

31 January 2017

Six months ended

31 July 2016

 

£'000

£'000

£'000

Costs associated with corporate transactions and other strategic costs

82

228

124

Restructuring and redundancy costs

549

844

197

Loan- write-backs

(44)

-

-

Integration costs associated with Enables IT and 1Spatial Inc. business

-

121

-

System development costs

 

105

 

Provision for amount receivable from Sitemap Ltd

-

1,334

-

Group rationalisation costs

-

-

26

Other

(26)

(15)

26

Total

561

2,617

373

 

 

 

 

8. Business combinations

On the 11 April 2017, the Group acquired the 51 per cent. of Sitemap Ltd that it did not already own for £200,000 in shares. The company's investment in Sitemap to date has funded the development of a solution which locates and visualises sites which best fit commercial and residential property developer needs.

 

The following table summarises the consideration paid for the Sitemap Ltd non-controlling interests and the fair value of assets acquired and liabilities at the acquisition date:

 

 

 

£'000

Value of consideration - issue of equity instruments

 

200

Total purchase consideration

 

200

 

 

 

Provisional fair values of assets and liabilities at the date of acquisition:

 

 

 

Intangible assets

 

200

Property, plant and equipment

 

2

Cash and cash equivalents

 

15

Trade and other receivables

 

6

Trade and other payables

 

(14)

Total identifiable net assets

 

209

 

 

 

-       Attributable to non-controlling interests

 

-

-       Attributable to equity shareholders of the parent

 

209

 

 

 

Gain on bargain purchase

 

(9)

Total consideration

 

200

 

 

 

Satisfied by:

 

 

-       Equity instruments (5,524,862 ordinary shares of 1Spatial plc)

 

200

Total consideration payable in shares

 

200

 

 

 

Net cash outflow arising on acquisition

 

 

-           Cash consideration

 

-

-           Less: cash and cash equivalents acquired

 

15

 

 

15

 

 

 

 

9. Investments

Investments are carried at fair value through profit or loss.

 

As at

31 July 2017

As at

31 January 2017

As at

31 July 2016

  

£'000

£'000

£'000

Non-listed investments

25

-

-

 

 

 

 

 

A 19.9 per cent. share of Enables IT Inc., with a fair value of £25,000, remains within investments following the part disposal of the previously wholly-owned entity.

 

A 80.1 per cent. share of Enables IT Inc. was sold on 3 March 2017 to the management of the company for a deferred consideration of £100,000 payable in 2019. The amount payable has been included within other non-current assets.

 

As at 31 January 2017, the assets and liabilities of the disposal group were classified as held for sale and the results of the company classified as discontinued operations in the current and comparative period.
 

10. Interests in associates

Investments in associates are stated at cost less provision for any impairment and are accounted for using the equity method.

 

As at

31 July 2017

As at

31 January 2017

As at

31 July 2016

  

£'000

£'000

£'000

Carrying value recognised in the statement of financial position

-

-

29

Share of net loss recognised in the statement of comprehensive income

-

266

237

 

 

 

 

 

The associates of the Group in the period are set out below:

 

Name

Principal activity

Place of incorporation (or registration) and operation

Proportion of ownership interest

%

Proportion of voting power held

%

 

 

 

31 July 2017

31 January 2017

31 July 2016

31 July 2017

31 January 2017

31 July 2016

Sitemap Ltd

Location-based software

(Note 1)

United Kingdom

100%

49%

49%

100%

49%

49%

 

 

 

 

 

 

 

 

 

1Spatial Inc.

Location-based software

(Note 2)

United States

100%

73%

73%

100%

73%

73%

Note 1: A 49 per cent. share of Sitemap Ltd was first acquired on 30 January 2015 and brought a new, although complementary, opportunity to the Group in its potential to generate revenue from data services. On the 11 April 2017, the Group acquired the remaining 51 per cent. of Sitemap Ltd that it did not already own for a consideration payable in shares, taking the Group's total holding in Sitemap Ltd to 100 per cent.

Note 2: 1Spatial Inc. - 47 per cent. of the sole US-based distributor of 1Spatial geospatial products and solutions across the Americas was first acquired on 3 February 2015 by 1Spatial Holdings Limited (a wholly-owned subsidiary of 1Spatial plc) to provide 1Spatial with long-term security of its Americas distribution channel, and ensure continuity of service to key customers. On the 29 February 2016, the Group acquired a further 26 per cent. shareholding in 1Spatial Inc., taking the total shareholding up to 73 per cent..  On 11 April 2017, the Group exercised its call option to acquire a further 27 per cent. of 1Spatial Inc., payable in shares, taking the Group's total holding in 1Spatial Inc. to 100 per cent.

 

1Spatial Inc. became a subsidiary from 26 February 2016 and was included as part of consolidated results from that date.

 

Summarised financial information for associates

The financial information reflects the amounts presented in the financial statements of the associate (and not the Group's share of those amounts).

Summarised statement of financial position

 

 

Sitemap Ltd

 

As at

 

11 April 2017

31 January 2017

 

£'000

£'000

 

Note 1

 

Current assets

21

54

Non-current assets

202

1,055

Current liabilities

(14)

(1,395)

Net liabilities

(209)

(286)

                                                                                                               

Note 1 - Sitemap Ltd's information shown here is as at 11 April 2017 (not 31 July 2017) when it ceased to be an associate and became a subsidiary of the Group.

Summarised statement of comprehensive income

 

Sitemap Ltd

 

 

For the period ended

 

 

11 April 2017

31 January 2017

 

 

 

£'000

£'000

 

 

 

Note 1

 

 

 

Revenue

-

-

 

 

 

 

 

 

 

Gross profit

-

(120)

 

 

 

 

 

 

 

Administrative expenses

(876)

(274)

 

 

 

 

 

 

 

Adjusted EBITDA

(1)

(124)

 

 

Depreciation

(1)

(4)

 

 

Amortisation of intangible assets

(18)

(111)

 

 

Strategic, integration and other one-off items *

(856)

(155)

 

 

 

 

 

 

 

Operating loss

(876)

(394)

 

 

 

 

 

 

 

Tax credit

74

-

 

 

 

 

 

 

 

Total comprehensive expense **

(802)

(394)

 

 

 

 

 

 

 

Share of associate - equity method ***

-

(193)

 

 

 

Note 1 - Sitemap Ltd's information for the period shown above is for the period that it was an associate - being 1 February to 11 April 2017.

 

*   Strategic, integration and other one-off items comprise the write-off of intangible assets prior to 1Spatial plc gaining control of Sitemap Ltd.             

**  Excludes write-off of inter-company loan balances prior to acquisition.

*** 1Spatial plc discontinued recognising its share of losses after these exceeded its interest in Sitemap Ltd.

 

 

 

11. Trade and other receivables

 

As at

31 July 2017

As at

31 January 2017

 Current 

£'000

£'000

Trade receivables

2,208

5,552

Less: provision for impairment of trade receivables

(20)

(626)

 

2,188

4,926

Other taxes and social security

215

144

Other receivables

1,415

1,278

Prepayments and accrued income

2,227

2,581

 

6,045

8,929

 

 

 

 

12. Trade and other payables

 

As at

31 July 2017

As at

31 January 2017

 Current 

£'000

£'000

Trade payables

1,739

1,824

Other taxation and social security

1,914

2,350

Other payables

594

566

Accrued liabilities

1,099

1,254

Deferred income

4,366

6,078

 

9,712

12,072

 

13. Share capital

 

As at

31 July 2017

As at

31 January 2017

 

£'000

£'000

Allotted, called up and fully paid

 

 

763,652,144 (Jan 2017: 738,135,558) ordinary shares of 1p each

7,637

7,381

226,699,878 (Jan 2017: 226,699,878) deferred shares of 4p each

9,068

9,068

 

16,705

16,449

 

On 11 April 2017, the Group acquired the remaining 27% of 1Spatial Inc. for £739,000 payable in shares in accordance with the terms set out in the share purchase agreement. 19,991,724 shares were issued for the remaining interest.

 

On 11 April 2017, the Group acquired the 51% of Sitemap Ltd that it did not already own for £200,000 in shares. 5,524,862 shares we issued for the remaining interest.

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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