TIDMSPA
RNS Number : 7513C
1Spatial Plc
20 October 2015
20 October 2015
1Spatial plc (AIM: SPA)
("1Spatial", the "Group" or the "Company")
Interim Results for the six month period ended 31 July 2015
The Board of Directors of 1Spatial (the "Board"), the AIM
Spatial Big Data company today announces the Group's unaudited
interim results for the six month period ended 31 July 2015.
Highlights
Financial highlights
-- Revenues of GBP8.4m including recurring revenues of GBP3.6m (43%)
-- Client software maintenance renewal rate of 98%, with 614 new
orders below US$1m across the group in the period
-- Improvement in gross profit margin from 52% to 56% reflecting
focus on strong commercial management. Adjusted* EBITDA of
GBP0.9m
-- Robust period-end net cash position of GBP6.4m
-- Growing pipeline of opportunities at high margins enhanced by
growing strategic relationships with enterprise vendors.
-- Acquisition of 47 per cent of US distributor Laser Scan Inc.
(LSI) in February for GBP1.5m allowing the Group to strengthen its
position within this key market
-- Acquisition of Enables IT Group plc for GBP1.8m of shares
enhancing the managed services and cloud services offering
-- Outlook for 2015 maintained
*Adjusted for strategic, integration, other one-off items and
share-based payment charge
Operational highlights
-- Continued focus on R&D, further development of scalable open technology in order to:
- Widen addressable market
- Increase global reach
- Quicken route to market
- Enable integration with enterprise technology vendors
-- Continued focus on important US markets
- Segmentation of our US market into two divisions - Government and Corporate Commercial
- Delivering on target on US Census contract
- Increased investment focused sales and marketing execution
- Enhancing relationships with key Federal Government Agencies
-- Increase marketing activity to support revenue generation:
- Participation and sponsorship of Esri User Conferences in the UK, Europe and US
- Key business development activities around the Geospatial marketplace
- Launch of 1Integrate for ArcGIS service
Post Period-End Highlights
Contract win of US$1m post period end to provide geospatial
services to a US Federal Government Agency reflecting strengthening
of US presence
Commenting on the results CEO, Marcus Hanke, said:
"The first half of this year has been one of significant
operational progress on our stated aims. We are delighted to have
developed a scalable, open product that we believe will secure
future growth for the Group.
Revenues came in lower year-on-year due to a number of factors,
therefore the full year results will have a greater weighting to
the second half compared to previous years, but our pipeline
remains strong and we expect to convert a good proportion of the
opportunities over the next six months. In terms of profitability,
our focus on higher margin work has improved our gross margin to
record levels. The Board still expects to deliver growth in
Adjusted* EBITDA for the full year to January 2016 in line with
market expectations.
Looking ahead, the Board remains confident and believe that the
Company's stated strategy positions 1Spatial for future, scalable
growth in an exciting market space."
Business review
The Group reports revenue of GBP8.4m and Adjusted* EBITDA of
GBP0.9m. These results are a reduction on the prior half year
numbers; however, management believes the Group is still on track
to meet full year expectations which is an overall increase on the
prior year revenues and Adjusted* EBITDA.
The key reasons for the decline in revenues and Adjusted* EBITDA
are the strengthening of the sterling against the euro and
Australian dollar, a greater second half weighting of service
delivery revenues due to re-deployment of manpower to development
of 'Open' technology, an expected second half weighting of deals
and licence revenue and the strategic exit from low-margin revenues
in Australia.
The Group acquired Enables IT Group for GBP1.8m (valued as at 25
June 2015) of shares on 23 July 2015 and whilst this did not have
an impact on the period under review, its revenues and results will
be included in full year numbers to 31 January 2016.
The Group is still on track with its stated strategic objectives
and has made significant progress in the period with the
development of its 'open' technology; in particular the development
of 1Integrate on the Esri platform, known as '1Integrate for
ArcGIS' which it is set to launch in the second half of the
year.
The Group enters the second half of the year with an order
backlog and a healthy pipeline of sales opportunities, enhanced by
the Esri relationship coupled with a strong balance sheet and cash
position.
Corporate transactions
The Company has made two strategic investments in the period
under review as summarise below:
Laser Scan Inc. (LSI)
On 3 February 2015, the Company acquired 47 per cent of Laser
Scan Inc. (LSI) for a cash consideration of US$2.25m (GBP1.5m). LSI
is the sole distributor for 1Spatial products and solutions across
the Americas and the two companies have worked closely together on
strategic accounts including the United States Census Bureau and
the Brazilian Army. LSI's personnel already have expert knowledge
of 1Spatial's solutions and this transaction will secure 1Spatial's
American base, bringing additional opportunities and enabling
growth across this significant market.
Under the terms of the sale and purchase agreement, 1Spatial has
an option to acquire the remaining 53 per cent of the share capital
of LSI in two tranches (on 1 February 2016 and 1 February 2017) for
the total sum of US$2.55m, payable in cash or by the issue of new
ordinary shares in 1Spatial. If this option is not exercised, the
seller has the right to buy back the holding for US$1.125m, being
50 per cent of the original consideration.
Enables IT Group plc
On 23 July 2015, 1Spatial plc acquired 100% of Enables IT Group
plc for GBP1.8m of shares (valued as at 25 June 2015). Enables IT
Group is a leading provider of cloud computing, managed and
professional services and was acquired in order to broaden and
enhance the enlarged Group's managed services and cloud services
offering.
The Group's solutions are often needed to work alongside and
interoperate with the technology of other vendors. The 1Spatial
Directors believe the ability to work seamlessly with other
technologies is increasingly important and further developing this
capability at a product level is an important area of focus for the
1Spatial Group. 1Spatial Group's strategy includes providing
software solutions that are 'open' and which will work well with
key vendors in the field including Esri. 1Spatial intends to use
Enables IT's data centers and managed service solutions in both the
UK and US to provide cost effective managed service and cloud
services to 1Spatial Group's businesses. The transaction will also
support the Group's growing need for a more formalised and
structured internal IT department as the Group grows and moves into
new markets and territories.
A number of other opportunities were identified during the
period which would help 1Spatial satisfy its strategic ambition, a
selection of which remains under review.
Strategy and performance
During this year, we have continued to develop and build upon
our corporate strategy, determined in 2013. We have established new
structures to support future growth, seized opportunities where
they aligned with our strategy and reviewed areas that were not
performing as expected. Where necessary, we have made changes to
adapt to market or other external forces.
Progress has been made in all four strategy areas: product and
service offerings, geographical coverage, organisational structure
and brand.
Product and service offerings
At the heart of 1Spatial's strategy is the opportunity to
capitalise on the Company's intellectual property - built up over
forty years' expertise and innovation - through a platform and
suite of off-the-shelf software products.
1Spatial's Unique Selling Point (USP) is its approach to Spatial
Big Data; its quality, aggregation and enrichment. Our scalable
software enables these processes to be automated, providing
customers with efficiency savings and consistently high quality
spatial data that they can sell onto their clients or use in their
own internal processes.
The nature of 1Spatial's expertise means that our solutions are
often found at the heart of complex installations, working
alongside and interoperating with the technology of other vendors.
The ability to work ever more seamlessly with other technologies is
increasingly important. It is our intention to provide software
solutions that are 'open' and which will work well with key vendors
in the field. In line with this strategic objective, during the
period we have put significant investment into our open technology
and in particular the integration with the Esri platform.
We are seeing a greater need in the market to provide cloud and
managed service offerings to our customers and we are looking to
utilise Enables IT Group's product suite to facilitate this.
During the period we also continued to develop our data services
platform known as Sitemap which leverages 'Open Data'
opportunities. This is an exciting opportunity for the Group which
we will continue to develop in the second half of the year with an
anticipated commercialisation date of Q3 next financial year.
Geographical coverage
The Group's headquarters are in Cambridge, UK; our offices in
France and Belgium cover French-speaking markets, especially in
Africa. We also have an Asia-Pacific office in Sydney, Australia
and an office in Ireland. We are supported by a global network of
partners including those in the USA, Malaysia and Brazil.
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1Spatial's geographic reach continues to increase through
acquisition, opening new offices and forging new partnerships. Our
investment in LSI, discussed above, will strengthen 1Spatial's
presence in the Americas and enable us to drive more opportunities
there.
Organisational structure
We continue to review our organisational structures which are
aligned to specific industry sectors (which support and are
supported by the development of industry-specific applications).Key
sectors for 1Spatial include utilities, national mapping and land
registration agencies, telecommunications and defence.
1Spatial's professional services team is seen as a leader in
spatial consultancy services and works with leading organisations
and government bodies around the globe. Demand for geospatial data
has never been greater. Data accuracy and the ability to manage
multiple data sets are essential to effective and informed
decision-making.
Our development team is now centred in our Cambridge
headquarters where our product development roadmap is determined
and we continue to draw on regional development expertise in other
territories.
We are in the process of evolving the organisational structure
in the second half of the year given the acquisition of Enables IT
Group plc and the launch of our 1Integrate for ArcGIS solution.
Building the brand and creating demand
We continue and are consistent in our marketing and sales
strategy along key industry sectors and focus countries. Marketing
and sales are an important area of investment in the coming year,
as we build the brand across target industries and geographies, and
create the demand for existing and new products.
From a global perspective the US remains a key target market for
us and with the addition of Enables IT, provides a further foothold
in the market and product offerings. We will leverage our existing
customer base in the US market across the Group and open cross-sell
opportunities and customer reference to support our go-to
market.
The Esri market is key for us as we build upon our awareness
following the sponsorship and attendance at a number of key Esri
user groups in the UK and the US. We are also sponsors of the
forthcoming Esri Europe User Conference and Middle East and Africa
conference providing exposure of our offering to thousands of Esri
users, raising awareness and demand for 1Integrate for ArcGIS.
There will also be local in-market targeted campaigns for
1Integrate for ArcGIS in the key UK and US markets in H2, to create
demand.
Successful campaigns and participation in industry-focused
global events has resulted in a pipeline of potential new customers
and partners that the sales team will engage in the coming year.
These targeted activities, improving our brand reach and
establishing local sales structures are laying a solid foundation
for development in the years to come and a healthy pipeline for the
coming financial year.
Enables IT will undergo a brand refresh in H2, to gain
consistency and alignment across their offices in the UK, US and
South Africa. Also this will support the go-to-market plan and our
opportunity to leverage their services and offerings across the
wider Group.
Board and people
In January 2015 David Richards took on the role as interim
Non-Executive Chairman following the retirement of Steve Berry. The
Board is progressing its search for the right person as a
replacement for Steve Berry but in the meantime, David Richards and
Marcus Yeoman are still in a position to give 1Spatial the support
it requires.
1Spatial's success, the business relationships it has built and
the reputation it enjoys within the field of Spatial Big Data, is
entirely due to its management team and employees across the world.
1Spatial people are approachable, smart, innovative and agile.
Financial performance
Income statement
The Group's revenues of GBP8.4m and Adjusted* EBITDA of GBP0.9m
were lower year on year due to the below factors. The Board remains
confident on hitting revenue targets for the full year:
Adjusted*
Note Revenue EBITDA
GBPm GBPm
Prior half year to July 2014 10.1 1.2
Effect of foreign exchange
rates in 2015 a. (0.7) (0.2)
Australia exit of third-party
revenues and service revenues b. (0.4) (0.0)
Revenue reduction - timing
and revenue recognition in
2015 c. (0.6) (0.1)
Six months to July 2015 8.4 0.9
======== ==========
a. Revenues and Adjusted* EBITDA from France, Belgium, Ireland
and Australia have been adversely affected by foreign exchange
movements as the sterling rate has strengthened against the euro
and Australian dollar. This impact is GBP0.7m on revenues and
GBP0.2m on Adjusted* EBITDA. Revenues at constant currency were
down 11%.
b. The Group's Australian operation had a low-margin contract
with a third party to distribute and support and maintain their
software. The gross margin on this contract was worth 20% to the
Group. This contract was exited in the prior year and therefore
there is no equivalent revenue in this half year. In addition there
were some services associated to this contract. Whilst the loss to
revenue on this contract was GBP0.4m, the impact on the Adjusted*
EBITDA was negligible.
c. Revenue reduction - timing and revenue recognition has an
impact of GBP0.6m on revenues and GBP0.1m on Adjusted* EBITDA.
There are two key elements to this line item as follows:
- Re-deployment of teams to focus on development of technology.
Service revenue is
recognised on delivery of the services. During the period there
has been a focus on the
development of the technology which has consequently led to less
client work being carried out to fulfil existing orders.
- Perpetual licences. There is a reduction in perpetual licences
sold in the period. The reason
for this is twofold; firstly there were a number of licence
deals that were due to close in H1
that are now being delayed to H2. Secondly there is a trend of
new deals in the market starting to take the form of annual
licencing rather than perpetual licencing with annual support and
maintenance. This is an industry trend and whilst may give a dip on
short-term revenues and profit, will provide longer term
straight-line revenues with greater visibility on earnings rather
than the peaks and troughs of perpetual licencing.
A summary of the income statement to Adjusted* EBITDA level is
set out below:
H1
2015 H2 2014
GBPm GBPm
Revenue 8.4 10.1
Cost of sales (3.7) (4.9)
Gross profit 4.7 5.3
------ --------
Gross profit % 56% 52%
Administrative expenses (3.8) (4.1)
Adjusted* EBITDA 0.9 1.2
------ --------
Whilst the revenue and gross profit are down when compared to
the prior period last year, the overall gross profit percentage has
improved to 56% which is a significant improvement on the prior
year given the backdrop of reduced perpetual licence sales which
are generally at a high margin. The improved gross profit
percentage is as a result of strict commercial process and
procedures being brought in across the Group and exiting from
lower-margin reseller contracts as the business looks to deploy
resources in the most value added areas. In January 2015 some
restructuring took place in France and Belgium, which lowered
overall cost base for this half year and has therefore had a
positive impact although this has been offset by some increased
cost in the UK to support the development strategy.
Our revenue streams continue to be licence fees, services and
support and maintenance. The proportion that these streams
represent of total revenue is approximately 15%, 42% and 43% (2014:
20%, 40% and 40%). The main reduction in the period is with respect
to licence revenues as noted above in part c.). We still continue
to maintain our strong support and maintenance revenue stream which
provides good visibility on revenues and provides a strong customer
base to build relationships and provide additional engagements.
Given the costs of the subsidiaries which are denominated in
euros and Australian dollars as well as the revenues, there is some
natural hedging which takes place thus reducing the impact on the
overall Adjusted* EBITDA. In addition, the reduction in the
Australian revenues has had minimal impact on Adjusted* EBITDA
given the low margins of this revenue. So whilst there is a
reduction in revenues of GBP1.7m in the period, the impact on
Adjusted* EBITDA is only GBP0.3m.
A summary of the results from Adjusted* EBITDA to the loss for
the period is set out below
2015 2014
GBPm GBPm
Adjusted* EBITDA 0.9 1.2
Depreciation (0.1) (0.1)
Amortisation and impairment
of intangibles assets (0.8) (0.5)
Share-based payments
charge (0.5) (0.5)
Exceptional items (0.8) (1.0)
Operating loss (1.3) (0.7)
------ -------
Net finance costs (0.1) -
Share of associates'
loss (0.1) -
Loss before tax (1.5) (0.7)
------ -------
Tax - (0.1)
Loss for the period (1.5) (0.8)
------ -------
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Depreciation, amortisation and the share-based payment charges
are in line with the previous period. The exceptional costs in the
period mainly relate to professional costs for corporate
transactions such as the LSI and Enables IT Group plc transactions.
The amount of cost in relation to the corporate transactions is
GBP0.4m.
In addition, during the period, a review was undertaken of the
pension provision in France. A small provision was put in place at
the time of acquisition but further investigations have identified
that this provision should be higher and therefore an exceptional
one-off additional amount of GBP0.2m has been provided. There are
other costs of redundancy etc. of GBP0.2m.
Of the finance cost of GBP0.1m, GBP28k relates to interest paid
on the Belgium loan. The remainder is foreign exchange losses
arising on intercompany balances in overseas subsidiaries where the
balances are denominated in GBP.
The share of associates' loss is in relation to Sitemap Ltd and
LSI and information on these two associated undertakings is set out
in note 9 to the half year statement. From an Adjusted EBITDA
perspective, these businesses are break even.
Balance sheet
A summary of the balance sheet is set out below:
2015 2014
GBPm GBPm
Non-current assets 20.6 16.3
Current assets 16.1 17.0
Current liabilities (11.2) (9.8)
Non-current liabilities (2.2) (2.0)
23.3 21.5
------- ------
The main reason for the overall increase in the various line
items in the balance sheet is the inclusion of the Enables IT Group
Ltd balance sheet at 31 July 2015. Whilst the full balance sheet is
included in the half year statement, the results of Enables IT
Group Ltd is minimal since it was only acquired shortly before the
half year end.
Also included in non-current assets is GBP1.8m in relation to
the investments in associated undertakings in Sitemap Ltd and
LSI.
Cash flow
A reconciliation from Adjusted* EBITDA to cash is set out
below:
GBPm
Adjusted* EBITDA 0.9
Exceptional items
paid (1.6)
Working capital
movements 0.1
Acquisition of LSI (1.5)
Cash acquired with
Enables IT Group
Ltd 0.5
Capital expenditure
including R&D (1.8)
Issue of shares
(Azini Capital) 1.9
Other (including
warrant cash in) 0.1
Net cash outflow (1.4)
Opening net cash 7.8
Closing net cash 6.4
------
Whilst there was a net cash outflow in the period, the above
summary details some of the key cash outflows which are
strategically important for the Group including the transaction
with LSI and the investment in the R&D activities. From a
trading perspective the main cash outflow was the payment of
exceptional costs which includes transaction costs in relation to
the acquisitions and reorganisation costs of approximately GBP1.1m
in relation to the France and Belgium businesses which were accrued
in January 2015 but paid out in February 2015.
The Company was pleased to secure an investment from Azini
Capital in May 2015 which strengthened the balance sheet
position.
Conclusion
During the period, we have continued to develop and deliver our
world-class technology, increased our market and global reach and
cemented strategic relationships with key partners. We have also
delivered Adjusted* EBITDA profits of GBP0.9m, which whilst behind
the previous year, we still expect to be up year on year due to a
second half weighting.
Post period end, we announced a contract win of US$1m post
period end to provide geospatial services to a US Federal
Government Agency.
Innovation remains important to us, with internal development
and new intellectual property, such as that owned by Sitemap,
continuing to strengthen our business. At the same time, we
continue to evaluate potential strategic future acquisitions which
would add value or new capabilities to the Group. We have solid
foundations in place and clear objectives across the business. Our
product offering is more defined and we look forward to working
with our new associate, LSI, which will help us develop our
presence in the important US market. Strategic partnerships, like
the one with Esri, along with our move towards increased software
interoperability and openness, will help us gain market share and
growth in all markets.
Outlook
In our January 2015 annual report that the year ending 31
January 2016 we explained that this year will be one of
consolidation and targeted investment to position the Group best
for the future. We stated that we would continue to support our
existing customers and develop the business along the lines
discussed above; continuing to develop innovative, off-the-shelf
software supported by our professional services, supporting
strategically important industry sectors and exploiting opportunity
across geographic markets.
We believe that it is vital for growth and future shareholder
value that we make continued investment in our spatial software so
that it can be seamlessly integrated with other vendor platforms.
As a result of this investment, there will continue to be
significant research and development costs during the second half
of the year. Some revenue-generating resource will continue to be
used during this development phase which will have an impact on
revenue growth in the short-term; however, it is the opinion of the
Board that this is a necessary investment to secure future scalable
growth and value for the Group.
As anticipated, our revenue mix and cash outflow profile has
continued to adapt and develop during the first half of the year -
a trend we expect to continue for the rest of the financial year.
We have a strong balance sheet and a significant secured order
book, alongside a healthy pipeline of opportunities; which we
expected to be weighted towards the second half of the year. Whilst
these changes have had a detrimental impact on our headline figures
in the first half, with revenue and Adjusted EBITDA slightly lower
than expected, the Group is continually reviewing ways to mitigate
against this; as a result seeing gross margins improving to record
levels. The Board is encouraged by the progress made during the
current financial year, remains confident on its expectations for
the full year and looks forward to the future with confidence.
For further information, please contact:
020 3427
1Spatial plc 5004
Marcus Hanke / Claire Milverton
020 3727
FTI Consulting 1000
Dwight Burden / Alex Le May /
Karen Tang
020 7496
N+1 Singer 3000
Shaun Dobson / Lauren Kettle
Notes to Editors:
About 1Spatial:
1Spatial manages the world's largest Spatial Big Data and works
with users and creators of the largest geospatial databases,
helping them collect, store, manage and interpret location-specific
information.
1Spatial's clients include national mapping and cadastral
agencies, utility and telecommunications companies, and government
departments including emergency services, defence and census
bureaus.
A leader in the field, 1Spatial has over forty years' experience
and a record of continual innovation and development. Today, with
an ever increasing reliance on spatial and location-critical data,
demand for our expertise has never been greater.
1Spatial operates globally, and has a portfolio of customers
both in the Commercial and Government sector, with headquarters in
Cambridge, UK and offices in France, Belgium, Ireland and
Australia. To find out more, visit www.1spatial.com
Condensed consolidated statement of comprehensive
income
Six months ended 31 July 2015
Unaudited Audited Unaudited
Six months Year Six months
ended ended ended
31 July 31 January 31 July
2015 2015 2014
---------------------------------- ----- ----------- ------------ -------------
Note GBP'000 GBP'000 GBP'000
---------------------------------- ----- ----------- ------------ -------------
Revenue 8,445 19,598 10,139
Cost of sales (3,738) (8,804) (4,877)
---------------------------------- ----- ----------- ------------ -------------
Gross profit 4,707 10,794 5,262
Administrative expenses (5,961) (12,260) (5,920)
---------------------------------- ----- ----------- ------------ -------------
(1,254) (1,466) (658)
Adjusted* EBITDA 860 3,052 1,231
Less: depreciation (145) (267) (135)
Less: amortisation and
impairment of intangible
assets (687) (1,183) (452)
Less: share-based payment
charge (489) (723) (355)
Less: strategic, integration
and other one-off items 7 (793) (2,345) (947)
---------------------------------- ----- ----------- ------------ -------------
Operating (loss)/profit (1,254) (1,466) (658)
Finance income 38 30 19
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Finance costs (134) (86) (45)
---------------------------------- ----- ----------- ------------ -------------
Net finance costs (96) (56) (26)
Share of net loss of
associates accounted
for using the equity
method (139) - -
(Loss)/Profit before
tax (1,489) (1,522) (684)
Income tax (charge)/credit (36) 5 (70)
---------------------------------- ----- ----------- ------------ -------------
(Loss)/Profit for the
period (1,525) (1,517) (754)
================================== ===== =========== ============ =============
Loss for the period attributable
to:
Equity shareholders of
the parent (1,525) (1,517) (754)
Non-controlling interest - - -
---------------------------------- ----- ----------- ------------ -------------
(1,525) (1,517) (754)
================================== ===== =========== ============ =============
Other comprehensive loss
Items that may subsequently
be reclassified to profit
or loss:
Exchange differences
on translating foreign
operations (539) (316) (210)
Other comprehensive loss
for the period, net of
tax (539) (316) (210)
================================== ===== =========== ============ =============
Total comprehensive loss (2,064) (1,833) (964)
================================== ===== =========== ============ =============
Total comprehensive loss
attributable to:
Equity shareholders of
the parent (2,064) (1,833) (964)
Non-controlling interest - - -
---------------------------------- ----- ----------- ------------ -------------
(2,064) (1,833) (964)
================================== ===== =========== ============ =============
* Adjusted for strategic, integration and other
exceptional items and share-based payment (note
7).
(Loss)/Earnings per ordinary share expressed
in pence per ordinary share:
Basic 4 (0.23) (0.23) (0.12)
================================== ===== =========== ============ ===========
Diluted 4 (0.23) (0.23) (0.12)
================================== ===== =========== ============ ===========
Adjusted earnings/(loss) per ordinary share
expressed in pence per ordinary share:
Basic 4 0.13 0.47 0.19
================================== ===== =========== ============ ===========
Diluted 4 0.13 0.45 0.18
================================== ===== =========== ============ ===========
Condensed consolidated statement of financial
position
As at 31 July 2015
Unaudited Audited Unaudited
As at As at As at
31 July 31 January 31 July
2015 2015 2014
-------------------------------- ----- ---------- ------------ ----------
Note GBP'000 GBP'000 GBP'000
-------------------------------- ----- ---------- ------------ ----------
Assets
Non-current assets
Intangible assets including
goodwill 17,210 14,729 14,615
Property, plant and equipment 1,569 552 1,729
Interests in associates 9 1,859 500 -
Total non-current assets 20,638 15,781 16,344
-------------------------------- ----- ---------- ------------ ----------
Current assets
Inventories 21 - 18
Trade and other receivables 8,364 7,453 6,848
Current income tax receivable - 134 42
Cash and cash equivalents 6,739 8,250 10,129
Assets classified as held
for sale 927 994 -
-------------------------------- ----- ---------- ------------ ----------
Total current assets 16,051 16,831 17,037
-------------------------------- ----- ---------- ------------ ----------
Total assets 36,689 32,612 33,381
-------------------------------- ----- ---------- ------------ ----------
Liabilities
Current liabilities
Trade and other payables (10,363) (8,301) (9,770)
Current income tax liabilities (23) (22) (43)
Borrowings (201) (242) (39)
Provisions (606) (1,151) -
Total current liabilities (11,193) (9,716) (9,852)
-------------------------------- ----- ---------- ------------ ----------
Non-current liabilities
Borrowings (179) (191) (258)
Deferred tax (2,036) (1,697) (1,762)
Total non-current liabilities (2,215) (1,888) (2,020)
-------------------------------- ----- ---------- ------------ ----------
Total liabilities (13,408) (11,604) (11,872)
Net assets 23,281 21,008 21,509
================================ ===== ========== ============ ==========
Share capital and reserves
Share capital 10 16,223 15,572 15,572
Share premium account 22,376 20,608 20,608
Own shares held (306) (306) (306)
Equity-settled employee
benefits reserve 2,125 1,711 1,343
Merger reserve 15,404 13,900 13,900
Reverse acquisition reserve (11,584) (11,584) (11,584)
Currency translation reserve (831) (292) (186)
Accumulated losses (20,126) (18,601) (17,838)
-------------------------------- ----- ---------- ------------ ----------
Total equity attributable
to shareholders of the
parent company 23,281 21,008 21,509
-------------------------------- ----- ---------- ------------ ----------
Condensed consolidated statement of changes in equity
Period ended 31 July 2015
Equity-settled
Share Own employee Reverse Currency Non-
Share premium shares benefits Merger acquisition translation Accumulated Total controlling Total
GBP'000 capital account held reserve reserve reserve reserve losses * interest equity
Balance at 1
February
2014 15,572 20,608 (306) 988 13,900 (11,584) 24 (17,084) 22,118 - 22,118
--------------- -------- -------- ------- --------------- -------- ------------ ------------ ------------ -------- ------------- --------
Comprehensive
income/(loss)
Loss for the
year - - - - - - - (1,517) (1,517) - (1,517)
Other
comprehensive
income/(loss)
Exchange
differences
on
translating
foreign
operations - - - - - - (316) - (316) - (316)
Total other
comprehensive
loss - - - - - - (316) - (316) - (316)
--------------- -------- -------- ------- --------------- -------- ------------ ------------ ------------ -------- ------------- --------
Total
comprehensive
loss - - - - - - (316) (1,517) (1,833) - (1,833)
--------------- -------- -------- ------- --------------- -------- ------------ ------------ ------------ -------- ------------- --------
Transactions
with owners
Recognition of
share-based
payments - - - 723 - - - - 723 - 723
--------------- -------- -------- ------- --------------- -------- ------------ ------------ ------------ -------- ------------- --------
- - - 723 - - - - 723 - 723
--------------- -------- -------- ------- --------------- -------- ------------ ------------ ------------ -------- ------------- --------
Balance at
31 January
2015
(MORE TO FOLLOW) Dow Jones Newswires
October 20, 2015 02:00 ET (06:00 GMT)
(Audited) 15,572 20,608 (306) 1,711 13,900 (11,584) (292) (18,601) 21,008 - 21,008
=============== ======== ======== ======= =============== ======== ============ ============ ============ ======== ============= ========
Comprehensive
income/(loss)
Loss for the
period - - - - - - - (1,525) (1,525) - (1,525)
Other
comprehensive
income/(loss)
Exchange
differences
on
translating
foreign
operations - - - - - - (539) - (539) - (539)
--------------- -------- -------- ------- --------------- -------- ------------ ------------ ------------ -------- ------------- --------
Total other
comprehensive
loss - - - - - - (539) - (539) - (539)
--------------- -------- -------- ------- --------------- -------- ------------ ------------ ------------ -------- ------------- --------
Total
comprehensive
loss - - - - - - (539) (1,525) (2,064) - (2,064)
--------------- -------- -------- ------- --------------- -------- ------------ ------------ ------------ -------- ------------- --------
Transactions
with owners
Issue of share
capital 651 1,768 - (75) 1,504 - - - 3,848 - 3,848
Recognition of
share-based
payments - - - 489 - - - - 489 - 489
651 1,768 - 414 1,504 - - - 4,337 - 4,337
--------------- -------- -------- ------- --------------- -------- ------------ ------------ ------------ -------- ------------- --------
Balance at
31 July 2015
(Unaudited) 16,223 22,376 (306) 2,125 15,404 (11,584) (831) (20,126) 23,281 - 23,281
=============== ======== ======== ======= =============== ======== ============ ============ ============ ======== ============= ========
* Total equity attributable to the equity shareholders of the
parent.
Condensed consolidated statement of changes in equity
Period ended 31 July 2014
Equity-settled
Share Own employee Reverse Currency Non-
Share premium shares benefits Merger acquisition translation Accumulated Total controlling Total
GBP'000 capital account held reserve reserve reserve reserve losses * interest equity
Balance at 1
February
2014 15,572 20,608 (306) 988 13,900 (11,584) 24 (17,084) 22,118 - 22,118
--------------- -------- -------- ------- --------------- -------- ------------ ------------ ------------ ------- ------------- --------
Comprehensive
income/(loss)
Loss for the
period - - - - - - - (754) (754) - (754)
Other
comprehensive
income/(loss)
Exchange
differences
on
translating
foreign
operations - - - - - - (210) - (210) - (210)
--------------- -------- -------- ------- --------------- -------- ------------ ------------ ------------ ------- ------------- --------
Total other
comprehensive
loss - - - - - - (210) - (210) - (210)
--------------- -------- -------- ------- --------------- -------- ------------ ------------ ------------ ------- ------------- --------
Total
comprehensive
loss - - - - - - (210) (754) (964) - (964)
--------------- -------- -------- ------- --------------- -------- ------------ ------------ ------------ ------- ------------- --------
Transactions
with owners
Recognition of
share-based
payments - - - 355 - - - - 355 - 355
- - - 355 - - - - 355 - 355
--------------- -------- -------- ------- --------------- -------- ------------ ------------ ------------ ------- ------------- --------
Balance at 31
July 2014
(Unaudited) 15,572 20,608 (306) 1,343 13,900 (11,584) (186) (17,838) 21,509 - 21,509
=============== ======== ======== ======= =============== ======== ============ ============ ============ ======= ============= ========
* Total equity attributable to the equity shareholders of the
parent.
Condensed consolidated statement of cash flows
Period ended 31 July 2015
Unaudited Audited Unaudited
31 July 31 January 31 July
2015 2015 2014
Note GBP'000 GBP'000 GBP'000
-------------------------------- ------ ---------- ----------- ----------
Cash flows from operating
activities
Cash (used in)/generated
from operations a) (581) 379 442
Interest received 38 30 19
Interest paid (134) (86) (45)
Tax received/(paid) 122 (21) (45)
Net cash (used in)/generated
from operating activities (555) 302 371
---------------------------------------- ---------- ----------- ----------
Cash flows from investing
activities
Acquisition of subsidiaries
(net of cash acquired) 465 - -
Acquisition of interest
in associate (1,498) (500) -
Purchase of property,
plant and equipment (550) (258) (152)
Expenditure on product
development capitalised (1,262) (2,363) (1,224)
Proceeds from sale of
property, plant and equipment 56 37 -
Net cash used in investing
activities (2,789) (3,084) (1,376)
---------------------------------------- ---------- ----------- ----------
Cash flows from financing
activities
Increase in borrowings - 38 -
Repayment of borrowings (25) (47) (32)
Net proceeds from issue
of ordinary share capital 2,035 - -
Net cash generated from/(used
in) financing activities 2,010 (9) (32)
---------------------------------------- ---------- ----------- ----------
Net decrease in cash and
cash equivalents (1,334) (2,791) (1,037)
Cash and cash equivalents
at start of period 8,250 11,165 11,165
Effects of foreign exchange
on cash and cash equivalents (177) (124) 1
Cash and cash equivalents
at end of period 6,739 8,250 10,129
---------------------------------------- ---------- ----------- ----------
Notes to the condensed consolidated statement
of cash flows
a) Cash (used in)/generated
from operations
Unaudited Audited Unaudited
As at As at As at
31 July 31 January 31 July
2015 2015 2014
GBP'000 GBP'000 GBP'000
------------------------------------ ---------- ------------ ----------
Loss before tax (1,489) (1,522) (684)
Adjustments for:
Finance cost/(income) - net 96 56 26
Depreciation charge 145 267 135
Amortisation and impairment 687 1,183 452
Share-based payment charge 489 723 355
Loss on disposal of property, 18 - -
plant and equipment
(Increase)/decrease in inventories - 15 (3)
Decrease/(Increase) in trade
and other receivables (221) (1,020) 13
Increase/(Decrease) in trade
and other payables 82 192 257
Increase/(Decrease) in provisions (545) 485 -
Net foreign exchange movement 157 - (109)
Cash (used in)/generated from
continuing operations (581) 379 442
(MORE TO FOLLOW) Dow Jones Newswires
October 20, 2015 02:00 ET (06:00 GMT)
------------------------------------ ---------- ------------ ----------
b) Reconciliation of net cash flow to movement
in net funds
Unaudited Audited Unaudited
As at As at As at
31 July 31 January 31 July
2015 2015 2014
GBP'000 GBP'000 GBP'000
------------------------------------ ---------- ------------ ----------
(Decrease)/Increase in cash
in the year (1,334) (2,791) (1,037)
Net cash inflow in respect
of new borrowings - (38) -
Net cash outflow in respect
of borrowings repaid 25 47 32
------------------------------------ ---------- ------------ ----------
Changes resulting from cash
flows (1,309) (2,782) (1,005)
Loans acquired with subsidiary - - -
Effect of foreign exchange (149) (82) (8)
------------------------------------ ---------- ------------ ----------
Change in net funds (1,458) (2,864) (1,013)
Net funds at beginning of
period 7,817 10,681 10,845
------------------------------------
Net funds at end of period 6,359 7,817 9,832
------------------------------------ ---------- ------------ ----------
Analysis of net funds
Cash and cash equivalents
classified as:
* Current assets 6,739 8,250 10,129
Bank and other loans (380) (433) (297)
Net funds at end of period 6,359 7,817 9,832
------------------------------------ ---------- ------------ ----------
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 40 Dukes Place, London,
EC3A 7NH. 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
solutions in order to enhance overall profitability.
2. Basis of preparation
The condensed consolidated interim financial information for the
six months ended 31 July 2015, 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
2016 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 2015.
The financial information for the half years ended 31 July 2015
and 31 July 2014 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 2015 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
2015 is based on the estimated tax rates in the jurisdictions in
which the Group operates, for the year ending 31 January 2016.
4. (Loss)/Earnings per share
Basic (loss)/earnings per share is calculated by dividing the
(loss)/profit 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 As at As at
31 July 31 January 31 July
2015 2015 2014
GBP'000 GBP'000 GBP'000
---------------------------------- ---------- ------------ ----------
Loss attributable to equity
holders (1,525) (1,517) (754)
Adjustments:
Income tax charge/(credit) 36 (5) 70
Net finance cost 96 56 26
Share of net loss of associates 139 - -
Depreciation 145 267 135
Amortisation and impairment
of intangible assets 687 1,183 452
Share-based payment charge 489 723 355
Strategic, integration and other
one-off items 793 2,345 947
---------------------------------- ---------- ------------ ----------
Adjusted EBITDA 860 3,052 1,231
Unaudited Audited Unaudited
As at As at As at
31 July 31 January 31 July
2015 2015 2014
Pence Pence pence
---------------------------------- ---------- ------------ ----------
Basic earnings/(loss) per share (0.23) (0.23) (0.12)
---------------------------------- ---------- ------------ ----------
Diluted earnings/(loss) per
share (0.23) (0.23) (0.12)
---------------------------------- ---------- ------------ ----------
Adjusted basic earnings/(loss)
per share 0.13 0.47 0.19
---------------------------------- ---------- ------------ ----------
Adjusted diluted earnings/(loss)
per share 0.13 0.45 0.18
---------------------------------- ---------- ------------ ----------
Number Number Number
000s 000s 000s
--------------------------------- -------- -------- --------
Basic weighted average number
of ordinary shares 666,666 650,415 650,415
Impact of options and warrants 4,004 22,970 22,970
Diluted weighted average number
of ordinary shares 670,670 673,385 673,385
--------------------------------- -------- -------- --------
The information as at 31 July 2014 has been restated to include
depreciation in the adjustments to the loss attributable to equity
holders, so that the adjusted basic and diluted earnings per share
are based on Adjusted EBITDA.
5. Dividends
No dividend is proposed for the six months ended 31 July 2015
(31 January 2015: nil; 31 July 2014: nil).
6. Segmental information
Central Cloud
costs Geospatial Services Total
31 July 2015 GBP'000 GBP'000 GBP'000 GBP'000
Revenue - 7,415 1,030 8,445
Cost of sales - (3,195) (543) (3,738)
------------------------------ --------- ----------- ---------- ---------
Gross profit - 4,220 487 4,707
Administrative expenses (1,986) (3,554) (421) (5,961)
Adjusted EBITDA (1,135) 1,721 274 860
Less: depreciation (38) (101) (6) (145)
Less: amortisation
and impairment of
intangible assets - (539) (148) (687)
Less: share-based
payment charge (430) (58) (1) (489)
Less: strategic, integration
and other one-off
items (383) (357) (53) (793)
------------------------------ --------- ----------- ---------- ---------
Operating (loss)/profit (1,986) 666 66 (1,254)
Finance income 8 30 - 38
Finance costs (1) (132) (1) (134)
------------------------------ --------- ----------- ---------- ---------
Net finance income
/ (costs) 7 (102) (1) (96)
Share of net loss
of associates (67) (72) - (139)
(Loss)/profit before
tax (2,046) 492 65 (1,489)
Tax - (31) (5) (36)
(Loss)/profit for
the year (2,046) 461 60 (1,525)
------------------------------ --------- ----------- ---------- ---------
Central Cloud
costs Geospatial Services Total
31 January 2015 GBP'000 GBP'000 GBP'000 GBP'000
Revenue - 17,934 1,664 19,598
Cost of sales - (8,000) (804) (8,804)
------------------------------ --------- ----------- ---------- ---------
(MORE TO FOLLOW) Dow Jones Newswires
October 20, 2015 02:00 ET (06:00 GMT)
Gross profit - 9,934 860 10,794
Administrative expenses (3,818) (7,758) (684) (12,260)
Adjusted EBITDA (2,506) 5,105 453 3,052
Less: depreciation (26) (234) (7) (267)
Less: amortisation
and impairment of
intangible assets - (1,084) (99) (1,183)
Less: share-based
payment charge (604) (129) 10 (723)
Less: strategic, integration
and other one-off
items (682) (1,482) (181) (2,345)
------------------------------ --------- ----------- ---------- ---------
Operating (loss)/profit (3,818) 2,176 176 (1,466)
Finance income 25 5 - 30
Finance costs (2) (81) (3) (86)
------------------------------ --------- ----------- ---------- ---------
Net finance income
/ (costs) 23 (76) (3) (56)
(Loss)/profit before
tax (3,795) 2,100 173 (1,522)
Tax - (38) 43 5
(Loss)/profit for
the year (3,795) 2,062 216 (1,517)
------------------------------ --------- ----------- ---------- ---------
Central
costs Geospatial Other Total
31 July 2014 GBP'000 GBP'000 GBP'000 GBP'000
Revenue - 9,375 764 10,139
Cost of sales - (4,417) (460) (4,877)
------------------------------ --------- ----------- --------- ---------
Gross profit - 4,958 304 5,262
Administrative expenses (1,805) (3,798) (317) (5,920)
Adjusted EBITDA (1,110) 2,262 79 1,231
Less: depreciation (12) (118) (5) (135)
Less: amortisation
and impairment of
intangible assets - (452) - (452)
Less: share-based
payment charge (302) (65) 12 (355)
Less: strategic, integration
and other one-off
items (381) (467) (99) (947)
------------------------------ --------- ----------- --------- ---------
Operating (loss)/profit (1,805) 1,160 (13) (658)
Finance income 16 3 - 19
Finance costs (1) (42) (2) (45)
------------------------------ --------- ----------- --------- ---------
Net finance income
/ (costs) 15 (39) (2) (26)
(Loss)/profit before
tax (1,790) 1,121 (15) (684)
Tax - (70) - (70)
(Loss)/profit for
the year (1,790) 1,051 (15) (754)
------------------------------ --------- ----------- --------- ---------
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 Six months
ended Year ended ended
31 July 31 January 31 July
2015 2015 2014
GBP'000 GBP'000 GBP'000
------------------------------------- ----------- ------------ -----------
Costs associated with corporate
transactions and other
strategic costs 410 514 93
Redundancy, relocation,
rebranding and other integration
costs 105 1,625 788
Provision for pension costs
in 1Spatial France 217 - -
Training and other costs
associated with the implementation
of the new ERP system 6 78 65
Other 55 128 1
------------------------------------- ----------- ------------
Total 793 2,345 947
------------------------------------- ----------- ------------ -----------
8. Business combinations
On 23 July 2015, 1Spatial plc acquired control of Enables IT
Group plc (now Enables IT Group Limited) by acquiring 100% of its
issued share capital for GBP1,812,878. Enables IT Group is a
leading provider of cloud computing, managed and professional
services and was acquired in order to broaden and enhance the
enlarged group's managed services and cloud services offering.
The following table summarises the consideration paid for the
Enables IT Group, the provisional fair value of assets acquired and
liabilities assumed at the acquisition date:
GBP'000
Value of consideration - issue of
equity instruments 1,813
--------
Total purchase consideration 1,813
========
Intangible assets
* Customer lists 1,410
Property, plant and equipment 704
Cash and cash equivalents 465
Inventories 35
Trade and other receivables 837
Current income tax receivables 1
Trade and other payables (2,347)
Deferred tax liabilities (51)
--------
Total identifiable net assets 1,054
Goodwill 759
--------
Total consideration 1,813
========
Satisfied by:
* Equity instruments (30,831,262 ordinary shares of
1Spatial plc) 1,813
--------
Total consideration transferred 1,813
========
Net cash outflow arising on acquisition
* Cash consideration -
* Less: cash and cash equivalents acquired 465
--------
465
========
Acquisition-related costs (included in administrative expenses
in the 1Spatial plc Statement of Comprehensive Income for the
period ended 31 July 2015) amounted to GBP253,000.
9. Interests in associates
Set out below are the associates of the Group:
Place Proportion of
of incorporation Proportion of voting power
Principal (or registration) ownership interest held
Name activity and operation % %
31 31 31 31 31 31
July January July July January July
2015 2015 2014 2015 2015 2014
Location-based
software
Sitemap (Note United
Ltd 1) Kingdom 49% 49% - 49% 49% -
Location-based
Laser software
Scan (Note United
Inc. 2) States 47% - - 47% - -
Note 1: Sitemap Ltd was acquired on 30 January 2015, and brings
a new, although complementary, opportunity to the Group in its
potential to generate revenue from data services.
Note 2: Laser Scan Inc. ("LSI") - the sole US-based distributor
of 1Spatial geospatial products and solutions across the Americas -
was 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. 47 per cent was acquired
for cash consideration of US$2.25m.
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