TIDMSPA
RNS Number : 7984O
1Spatial Plc
22 May 2018
22 May 2018
1Spatial plc (AIM: SPA)
("1Spatial", the "Company" or the "Group")
Final results for the year ended 31 January 2018
Good progress on turnaround plan, aligned for growth
The Board of directors of 1Spatial (the "Board"), 1Spatial, the
global geospatial software and solutions company, is pleased to
announce the Company and consolidated group's (the "Group") audited
final results for the year ended 31 January 2018.
Highlights
The Group's Board of Directors decided during the year to focus
on the valuable Geospatial business and dispose of its controlling
interest in the non-core Enables IT business; this disposal was
completed in March 2018. The Group's results for the year therefore
reflect separately the results of continuing and discontinued
activities.
Group financial highlights
2018 2017
Operations Continuing Discontinued Total Continuing Discontinued Total
GBPm GBPm GBPm GBPm GBPm GBPm
Revenue 16.9 5.6 22.5 15.1 9.5 24.6
Gross profit 8.9 1.7 10.6 8.3 2.2 10.5
Adjusted *
EBITDA before
central costs 2.0 0.5 2.5 1.5 - 1.5
Central costs (1.6) - (1.6) (2.4) - (2.4)
Adjusted *
EBITDA after
central costs 0.4 0.5 0.9 (0.9) - (0.9)
Operating (loss)/profit (1.8) (1.2) (3.0) (15.7) (3.3) (19.0)
Net cash generated
from/(used)
in operating
activities 0.7 0.1 0.8 (1.2) 0.4 (0.8)
The discontinued operations in the table above include Avisen UK
Limited, Storage Fusion Limited, Enables IT Inc., Enables IT
Limited and Enables IT Group Limited. The operations of Enables IT
Limited and Enables IT Group Limited were discontinued in the year
ended 31 January 2018, so the figures for the year ended 31 January
2017 above have been restated to include these two entities in
discontinued operations so that the continuing operations reflect a
like for like comparison.
*Adjusted for strategic, integration, other irregular items and
share-based payment charge
Continuing operations
-- Revenues from continuing operations of GBP16.9m (2017: GBP15.1m), up GBP1.8m (12%)
-- Revenues increased across all territories and across all revenue streams:
-- licence revenues increased 73% to GBP2.5m
-- service revenues increased 9% to GBP7.2m
-- support & maintenance revenues increased 2% to GBP7.2m
-- Gross profit improvement from GBP8.3m to GBP8.9m
-- Increase in adjusted* EBITDA on prior year, up GBP1.3m to
GBP0.4m profit (2017: GBP0.9m loss)
-- GBP13.9m improvement in operating losses, from GBP15.7m to GBP1.8m
-- Market-focussed development spend of GBP1m (2017: GBP3.5m)
-- Increase of GBP1.9m in operating cash flows from GBP1.2m outflow to GBP0.7m inflow
Discontinued operations
-- Loss from discontinued operations of GBP1.3m (2017: GBP3.4m loss)
All operations
-- Improvement in free cash flows ** of GBP4.6m, from a GBP4.9m
cash outflow in 2017 to a GBP0.3m cash outflow in 2018
-- Loss after tax of GBP2.5m (2017: GBP18.3m)
-- Impairments of continuing operations totalling GBP0.4m (2017:
GBP9.4m): no impairment of goodwill (2017: GBP5.1m), GBP0.2m of
acquired intangibles (software) (2017: GBP1.5m of customer lists
and software) and GBP0.2m (2017: GBP2.8m) of capitalised
development costs, net of impairment reversals of capitalised
development costs of GBP0.5m (2017: GBPnil)
-- Impairments of discontinued operations totalling GBP1.2m
(2017: GBP1.8m): GBP0.5m (2017: GBP0.9m) of goodwill, GBP0.6m of
acquired intangibles (customer lists and contracts) (2017: GBPnil),
no impairment of capitalised development costs (2017: GBP0.9m) and
GBP0.1m of impairments of assets held for sale (2017: GBPnil)
-- Net funds of GBP0.3m (2017: GBP0.6m)
** free cash flows: net cash generated from/(used in) operating
activities less purchase of property, plant and equipment and less
expenditure on product development and intellectual property
capitalised
Group operational highlights
-- Significant financial benefits being driven from the strong
financial and operational platform, including:
- New management structure with clear profit and loss accountability
- Key management roles aligned to our strategy as a solutions provider
- Customer-centric approach which is enabling the 'land and expand' approach
- Leveraging our existing intellectual property and working collaboratively with key partners
-- Focussed approach to sales in three key sectors of
Government, Utilities and Transportation, giving rise to increased
sales across all territories and key customer wins as follows:
- UK - Northern Gas Networks framework contract with the value
of the contract now four times that at the time of signing in
September 2017
- US - Two US Federal Government contracts with the Federal
Highways Administration (FHWA) and National Oceanic and Atmospheric
Administration (NOAA)
- US - Five State contracts with Michigan, Nebraska, New Jersey
and Arkansas, for software and services
- US - Four Department of Transport contracts with Kansas,
Arizona, District of Columbia and Arkansas, for software and
services
- France/Belgium - European Satellite Centre in Madrid, for software and services
-- Market-led innovation with returns on investment coming
through in the last part of the year ended 31 January 2018 and
significant returns anticipated in coming years, including:
- Increased data types added to the core 1Integrate product
which will allow increased addressable sales in our existing
sectors, as well as new sectors
- Re-purposing and enhancing existing technology to address customer-specific needs
- Developing the new Data Gateway product which is an additional
module for our existing core 1Integrate product which was released
to the market after the year-end
Post year-end highlights
-- Disposal of the Group's significant share of loss-making
business Enables IT Group in March 2018 for GBP1. Exercise of the
Enables IT Inc. buyers' option to purchase the remaining minority
interest in Enables IT Inc. in March 2018.
-- GBP0.5m reduction to GBP2.5m in the banking overdraft
facility with Natwest Bank plc, renewed in May 2018, which provides
sufficient working capital for the business for the foreseeable
future.
-- Customer contract win after the year-end:
- Land and Property Services, Northern Ireland, in April 2018
Commenting on the results, 1Spatial CEO, Claire Milverton
said:
"We have achieved significant progress on our turnaround
strategy which is clearly evidenced by increased revenues, improved
profitability and cash generation. Not only have we turned the
business around, but we have also identified significant
opportunities for future growth, from both our existing and new
clients. We have had a record number of new customer wins and our
customer-focussed approach is leading to new innovation insights
which we can replicate and deliver to current and tangential
markets.
Next year will be about maintaining the strong financial and
operating disciplines that we adopted this year, but also about
forging ahead with customer and market-led innovation, where we
believe we can significantly enhance the value of the Group into
the future."
For further information, please contact:
1Spatial plc 01223 420 414
Andrew Roberts / Claire Milverton
FTI Consulting 020 3727 1000
Dwight Burden / Alex Le May
N+1 Singer 020 7496 3000
Shaun Dobson / Lauren Kettle
LEI Code: 213800VG7OZYQES6PN67
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 national mapping and land
management agencies, utilities, transportation organisations,
government departments, 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.
For more information visit www.1spatial.com
Chairman's report
I am pleased to present my second report for 1Spatial plc, for
the year ended 31 January 2018. During this period, I was Executive
Chairman until 31 January 2018 and transitioned to Non-Executive
Chairman with effect from 1 February 2018.
The Group's Board of Directors decided during the year to focus
on the valuable Geospatial business and dispose of its controlling
interest in the non-core Enables IT business, which completed in
March 2018. The Group's results for the year therefore reflect
separately the results of continuing and discontinued
activities.
Results
Our key objectives for the year to 31 January 2018 were to
ensure that we generated cash and were profitable at adjusted
EBITDA level, as well as follow through on key strategic
initiatives which will drive revenue growth for both the year
ending 31 January 2019 and future financial years.
The results for the year ended 31 January 2018 reflect the
successful execution of the plan; for example, the Group generated
a total adjusted EBITDA* profit from all operations of GBP0.8m (as
shown in the Group highlights section), ahead of management's
expectations. The operating loss from continuing operations (after
strategic, integration, other irregular items and share-based
payment charge) has improved by GBP13.9m, from GBP15.7m to GBP1.8m.
The Group closed the financial year within its banking facilities
with net funds of GBP0.3m at 31 January 2018.
The actual results for the year from continuing operations were
revenues of GBP16.9m (2017: GBP15.1m), adjusted EBITDA profit of
GBP0.4m (2017: adjusted EBITDA loss of GBP0.9m), an operating loss
of GBP1.8m (2017: GBP15.7m), a loss from discontinued operations of
GBP1.3m (2017: loss of GBP3.4m) and a loss for the year of GBP2.5m
(2017: GBP18.3m). The Group generated operating cash inflows of
GBP0.8m (2017: operating cash outflows of GBP0.8m).
The Board
In my previous report, I stated that we would look to strengthen
the Board and we executed on this with the appointment of Francis
Small as a Non-Executive Director on 1 August 2017. Francis brings
significant experience from his financial services background. He
was with Ernst & Young from 1979 to 2015 where he held several
key positions, including as London head of corporate finance and
then UK head of corporate finance, global vice chair and then
managing partner of UK & Europe transaction advisory services,
global leader of sovereign wealth funds (based in the Middle East)
and ultimately senior partner for international clients.
Following a successful period in the role of Acting CEO, Claire
Milverton was appointed CEO on 9 October 2017. On the same date,
Nicole Payne was appointed CFO.
I continued in the role of Executive Chairman until 31 January
2018 before returning to Non-Executive Chairman following the good
progress made on the turnaround strategy, led by Claire Milverton
and her team.
On 14 March 2018, Nick Habgood left the Board. Nick made a
valuable contribution to the Board and, because of his renewed
confidence in the Company's progress, together with his other
portfolio commitments, he felt it was the appropriate time to step
down. Azini Capital remain a supportive shareholder of
1Spatial.
We are looking to strengthen the Board with another
Non-Executive Director. We have made good progress on this and have
met with some excellent candidates; an update will be provided in
due course.
Corporate governance
Corporate Governance is taken very seriously at 1Spatial and is
continually assessed. We have a great team of experienced
individuals on our Board, including Francis Small. He has been
working closely with our Company Secretary to ensure that our
current Corporate Governance processes and procedures are fit for
purpose and where necessary update and improve our controls. We
have provided more information on this on page 24 of the Annual
Report.
Francis is now Chairman of the Remuneration Committee and Audit
Committee. I am Chairman of the Nomination Committee.
Looking forward
1Spatial is well positioned in the Geospatial market. We have a
clear strategy and have developed cutting edge, patented technology
that has given us market-leading IP. Our longer-term ambition is
not just to extend our technology in the Geospatial market, but
also to establish a leading position in Location Master Data
Management in our target sectors of government, utilities and
transportation.
Early trading in Q1 2019 has been strong, and our teams are well
positioned, motivated and energised. The objectives for the
financial year to January 2019 are a laser focus on sustained
growth and capitalising on the platform that was established during
the last financial year, leveraging our technology and key
partnerships.
1Spatial people are approachable, smart, innovative and agile.
As we look forward to future growth, I would like to take this
opportunity to welcome those who have joined 1Spatial plc during
the year and to thank everyone for their continuing hard work and
dedication. I am confident that we are well placed to grow 1Spatial
into a substantial, profitable and cash-generative business for
years to come.
*Adjusted for strategic, integration, other irregular items and
share-based payment charge
Andy Roberts
Non-Executive Chairman
Strategic report
CEO review
Overview of Group and key objectives
The year ended 31 January 2018 was a successful period of
executing on the objectives of our three-year turnaround plan,
announced in January 2017. We set out to establish a strong
financial and operational platform for the business, which would be
evidenced through cash, growing profits and sustainable growth. The
financial performance set out in this this report, including
profitability at an adjusted EBITDA level; being ahead of market
expectations, provides clear evidence that the turnaround plan is
working and we are confident about our prospects for the year
ahead.
We disposed of the non-core Enables IT business in March 2018,
which now allows a clearer focus on the valuable 1Spatial
geospatial business, which we believe is at an inflection point. We
enter FY2019 with a business that is transformed, refocussed and
with a fixed overhead; we have automated our processes; we have put
a platform in place for significant growth; we continue to win
further contracts, and remain committed to our principles of
providing great solutions to our customers. This combination of
refocussed strategy and a strong execution team should see our
adjusted EBITDA multiply.
1Spatial has a great team, customers and software, which
automates the validation, correction and integration of large data
sets. Our heritage is in spatial data in the geospatial sector and
we have customers in sectors ranging from national mapping to
utilities, but we believe much of our future growth could come from
other sectors where companies want to integrate spatial and
non-spatial data in an automated and consistent way.
The turnaround that took place during the year was focussed on
leveraging the Company's assets of software, customers and people
and setting a clear strategic path for execution. There is still
some work to do on refining processes and procedures but there is
now a clear strategy that is working and there is a clearly
defined, significant opportunity for 1Spatial in both our existing
and new geographic markets such as the US as well as new industry
markets such as facilities management. We also continue to work
with key partners such as the most significant player in the
Geospatial market, Esri, and we are engaging regularly with the
teams in each of the countries of our operational territories to
identify points of collaboration to achieve a win position for both
companies.
We have a refreshed innovation process that commenced in the
second half of the year. We launched our new Data Gateway product
on 9 May 2018, an additional module for 1Integrate and we also
added some new data types to our core 1Integrate technology e.g.
CAD data, that has allowed us to get into the potential new markets
of facilities management and location master data management. We
have also identified several market-led solutions where we can
embed our core 1Integrate software including hosted SaaS solutions.
There should be exciting developments and revenue generating
opportunities in relation to these solutions during the coming
financial year.
In my 2017 review I set out several key objectives, as part of
this report I have re-visited these to demonstrate that significant
progress has been made. These objectives are set out below:
Focus on the core business
As a result of the Board's primary focus on the core high-margin
Geospatial division and an increasing level of risk associated with
the recurring revenues of Enables IT, the Board resolved to dispose
of its controlling stake in the Enables IT business that took place
in March 2018. The Enables IT business is included as discontinued
activities in the consolidated statement of comprehensive
income.
With the disposal of Enables IT, there is now laser focus on the
Group's core Geospatial business. The core Geospatial business has
performed better than management's expectations, ending the year
with higher revenues and adjusted EBITDA than expected. The results
are a significant improvement on the prior year and are testament
to the quality of the strategy, solutions and the high-class team
at 1Spatial.
Clear strategy and go-to-market plan
Provide Innovative Software Solutions to the Geospatial Sector
with a focus on the automation of data cleansing and
integration
Our current strategy and go-to-market plan continues to be that
of an Innovative Software Solutions provider primarily to the
Geospatial Sector with a focus on the automation of cleansing,
processing and integrating large amounts of spatial data using our
key software tool, 1Integrate. Spatial data is data or information
that identifies the geographic location of features and boundaries
on Earth, usually stored as coordinates and topology, and is data
that can be mapped. The volumes of spatial data that are being
captured by companies which needs to be cleansed, processed and
integrated with other data is increasing at dramatic rates and this
increase in volumes works to the strengths of the 1Integrate
product.
Our patented spatial data rules engine, 1Integrate, that can be
bought stand-alone (vendor agnostic), or integrated within our
partner's platform, Esri, is proving to be a great success with our
existing and new clients, particularly in the US where we are
having major successes as evidenced by our wins with new customers
in the year with Michigan State (US$766k contract) and Federal
Highways Administration (an initial value of US$339k, or US$540k if
the option to extend is exercised).
Focus on key sectors and significant new potential sector in
facilities management
We have stayed focussed on three key sectors during the year to
maintain deep domain expertise and manage resources efficiently.
During the year, we have identified that selling our software as
part of a solution to address an industry or customer's business
needs is having more success than selling a rules engine to cleanse
spatial data. Our key sectors are Government (National mapping/Data
providers), Utilities and Transportation agencies.
Transportation was a new sector for this financial year and we
had particular success in the US, working with four State
Departments of Transport. We also had success with a proof of
concept for a major rail infrastructure company in the UK, which,
once contracts are finalised, is likely to be a significant revenue
stream for the UK business during the coming financial year. The US
operation has not focussed on the utilities sector yet but this is
a definite opportunity for growth in the future.
During the year, we performed a strategically important proof of
concept for US$80k with a significant US technology vendor to help
them clean and integrate their CAD data (computer-aided design)
data into their Geographic Information System (GIS). Using
1Integrate, we were able to identify and correct the issues and
integrate the data into the GIS system. Two previous companies had
been engaged to do this and had failed. We are now in the process
of engaging with this client on a more formal basis to perform work
on a number of their campuses worldwide. Given this success and
another two opportunities that have now arisen in this sector we
will consider adding Facilities Management as a fourth go-to-market
sector for the next financial year, which we believe has the
potential to gain traction globally.
Broad geographic reach
We have offices and direct sales operations in UK, Ireland, USA,
France, Belgium and Australia. Our overall strategy is to provide
the software solutions as noted above but there are slight
differences in the go-to-market approach in each market given
competition, market needs and scale.
An example of this is within the US, where there are significant
opportunities for our software in the government sector, at the
Federal level as well as in the states, cities and counties where
the specific spatial data issues are concentrated. Given the
volumes of data collected and need for automation within the
processes, it is the environment where our software and current
business model work best. Within our US business, we had three
clients in 2015 and 20 clients at 31 January 2018. We have won
three new clients during the first quarter of 2019 with an average
sales value of $120,000. Invariably the significant benefits that
we are providing to customers in each government department spreads
by word of mouth to other departments and it is providing a
platform for growth.
Organisational structure aligned to strategy
In my last report, I stated that ensuring the alignment of
organisation structure and strategy would be key to future success
and I believe that the structure we now have in place is optimal.
During the year, roles and responsibilities with clear
accountabilities have been set out. There are now country-focussed
structures with top level direction and sharing of information
being provided by myself and my top team including my CFO, CTO, COO
and the new role of CSO (Chief Solutions Officer) that I put in
place this year to support our solutions strategy.
Drive revenue growth
Focus on new and existing customers
Our key focus for this financial year was to drive revenue
growth from both existing and new customers, which we achieved. Our
enhanced sales team and market focussed customer centric solutions
approach saw revenues increasing by 13% from GBP15.1m to GBP17m.
There were no losses to our recurring support and maintenance base
during the year.
Key wins in the year, demonstrating progress with new customers
include:
- UK - Northern Gas Networks: a key utility framework contract
for 1Spatial which has grown in value by four times since the time
of signing
- US - Two US Federal Government contracts with FHWA and NOAA, for software and services
- US - Five State contracts with Michigan, Nebraska, New Jersey
and Arkansas, for software and services
- US - Four Department of Transport contracts with Kansas,
Arizona, District of Columbia and Arkansas, for software and
services
- France/Belgium - European Satellite Centre, for software and services
We see further significant opportunities to work with our
customers to provide additional benefits beyond the initial scope
of work.
Business model
Our solutions are based on technology (our own technology or
partner technology) plus services, which are generally for
implementation/configuration. The US business has a larger
proportion of software sales in its revenue compared with services,
whereas in Europe, the solutions contain a larger proportion of
services. Since May 2018, we have made some changes to our business
model and pricing to stop perpetual licencing and move to
subscription and term licencing. This change is aligned to the rest
of the industry and but also protects our core 1Integrate asset
which we have, in past, not always monetised appropriately given
the value that our clients and customers receive.
Focussed innovation
To continue our growth plans we must continue to innovate our
technology and solutions. All innovation in the business is now
focussed, customer-led and our strategy of being close to our
customers enables us to work with them on these innovation ideas
that can then be replicated across the industry sectors.
The innovation does not just mean being innovative with our own
technology but also how we can integrate and be innovative with our
partners such as Esri. Under the leadership of my CTO and CSO, we
now have a very exciting roadmap and opportunities for innovation
during the next financial year.
Innovations during the year to January 2018 included the release
of our Data Gateway product, which is an extension of our
1Integrate product and is a simple web interface, which provides
easy access for users to upload and validate spatial data files and
download the results. We also added a number of new data types to
our core 1Integrate technology e.g. CAD data that has allowed us to
get into the potential new market of facilities management.
Through innovation, we have also identified several market-led
solutions where we can embed our core 1Integrate software including
some hosted SaaS solutions. There should be exciting developments
and revenue generating opportunities in relation to these solutions
during the next financial year when we release them to the market.
If we put the customer at the heart of the business and work to
address their business need and provide them with the most
appropriate solution then this should be a winning formula.
Outlook
We have continued to build on our success in FY2018 into Q1 of
the current year. We deepened our existing customer relationship
with Land & Property Services (the Northern Irish Mapping
Agency) in April 2018 with a new contract to provide software and
services for up to another 10 years. We have also continued to
drive forward in the US business with another three new customer
wins.
We are committed to investing in innovation and working with our
partners to provide the best solution for our customers and are
excited about the new opportunities that are emerging through the
partnership approach with our clients such as facilities management
and location master data management.
Our backlog of orders and pipeline is continuing to grow and we
look forward to an exciting year of continued profitable growth as
well as focussing on new innovations which we believe could
significantly enhance shareholder value in the longer term.
Claire Milverton
Chief Executive Officer
CFO review
The financial year to 31 January 2018 bears out the focussed
execution on the turnaround programme, with improvements in
continuing operations' revenues and adjusted EBITDA, and operating
cash inflows where these were outflows last year.
Results
The Board focusses on adjusted EBITDA as a key KPI as it
reflects the underlying performance of the business. It is also a
measure used by its broker and the rest of the financial markets
including other brokers and analysts. A summary of the continuing
operations compared to the previous year are set out below.
2018 2017
Central Geospatial Total Central Geospatial Total
costs GBPm GBPm costs GBPm GBPm
GBPm GBPm
Revenue - 16.9 16.9 - 15.1 15.1
Cost of sales - (8.0) (8.0) - (6.8) (6.8)
-------- ----------- ------ -------- ----------- -------
Gross profit - 8.9 8.9 - 8.3 8.3
Gross profit
% 53% 53% 55% 55%
Administrative
expenses * (1.6) (6.9) (8.5) (2.4) (6.8) (9.2)
-------- ----------- ------ -------- ----------- -------
Adjusted * EBITDA (1.6) 2.0 0.4 (2.4) 1.5 (0.9)
-------- ----------- ------ -------- ----------- -------
Loss before tax (1.8) - (1.8) (5.3) (10.4) (15.7)
-------- ----------- ------ -------- ----------- -------
*Adjusted for strategic, integration, other irregular items and
share-based payment charge
Geospatial revenue includes the provision of software and
services for the management of geospatial data, as well as a number
of recurring revenue contracts from large customers with
well-established relationships.
The revenue split is as follows:
2018 proportion 2017 proportion
GBPm GBPm
Licences - own 1.2 7% 0.6 4%
Licences - third-party 1.3 8% 0.9 6%
Services 7.2 42% 6.6 43%
Support and maintenance - own 6.2 37% 6.2 41%
Support and maintenance - third-party 1.0 6% 0.8 6%
----- -----
16.9 15.1
----- -----
Licence revenues have grown significantly on the previous year,
across all territories, with our own licence revenues doubling to
GBP1.2m and third-party licence revenues up by close to 50% on the
previous year at GBP1.3m. Our own higher-margin licence revenues
are a greater proportion of total licence revenues, growing from
40% last year to 48% this year.
Service revenues have grown 9% in the year and make up the
significant proportion of our revenue at 42% of the total, with
substantial revenues in the year coming from the Rural Payments
Agency and the US Census Bureau (contributing just over 20% to
total service revenues).
Our own support and maintenance revenues remain strong and
third-party support and maintenance revenues have shown a 25%
improvement - we have approximately 380 customers on support and
maintenance.
The gross profit percentage for the year was down slightly on
the prior year, from 55% to 53%. The Group's accounting policy is
to capitalise development costs to the statement of financial
position, based on qualifying criteria, but had these development
costs (GBP1m in the current year, GBP3.5m in the previous year),
been expensed, the gross profit percentage would have improved from
32% to 47% year on year (the capitalised development costs relate
to staff that work on both commercial and development
projects).
Admin expenses in the Geospatial segment have increased 1% on
the previous year.
Overall, the adjusted EBITDA trading results for the Geospatial
division have improved by GBP0.5m (33%) to GBP2m, being a testament
to our people, our products and the execution of our strategy.
Central costs have been pared back to GBP1.6m, a decrease of 33%
on the previous year due mainly to the restructuring of the Board
of Directors. The resulting overall loss before tax from continuing
operations has improved by GBP13.9m to a GBP1.8m loss and adjusted
EBITDA from continuing operations is GBP0.4m - a significant
improvement on the previous year of GBP1.3m.
As noted in the CEO review, the Board resolved to dispose of its
controlling stake in the Enables IT UK operations (the decision was
made by the year-end, albeit the sale wasn't completed until March
2018) for two reasons; due to an increasing level of risk
associated with the recurring revenues of Enables IT, and to allow
management to focus on the higher-margin Geospatial business.
Enables IT met the definition as being held for sale at the
year-end, so its results are presented as a single line in the
statement of comprehensive income, as 'Loss for the year from
discontinued operations', together with the tail-end of the Storage
Fusion operations at the start of the financial year, after it was
closed down in December 2016, and Enables IT Inc. just before the
Group's controlling interest was sold to US management in March
2017.
Overall result for the year
2018 2017
GBPm GBPm
Adjusted* EBITDA profit/(loss) 0.4 (0.9)
Depreciation (0.2) (0.3)
Amortisation and impairment of intangible assets (1.5) (11.3)
Share-based payment credit/(charge) 0.5 (0.6)
Strategic, integration and other irregular items (1.0) (2.6)
Operating loss (1.8) (15.7)
Net finance cost (0.2) -
Share of associates' results - (0.2)
Loss before tax (2.0) (15.9)
Tax 0.8 1.0
------ -------
Loss for the year - continuing operations (1.2) (14.9)
Loss for the year - discontinued operations (1.3) (3.4)
------ -------
Result for the year (2.5) (18.3)
------ -------
* Adjusted EBITDA is stated net of certain strategic,
integration, other irregular costs and share option credit/charge.
See note 3 to the Accounts for further information.
Amortisation and impairment of intangible assets
The most significant line item in the classifications below
adjusted EBITDA is the amortisation and impairment of intangible
assets. GBP1.6m relates to amortisation (2017: GBP1.9m), GBP0.4m
relates to impairment (2017: GBP9.4m), and GBP0.5m relates to
impairment reversals (2017: GBPnil). GBP0.2m of the impairment
relates to acquired intangibles of Sitemap Ltd, being software that
was impaired due to the Group's strategy not currently prioritising
resources on this product. The remaining GBP0.2m impairment relates
to the capitalised development costs of 1Spatial Group due to there
being limited sales and pipeline to support their carrying value.
The GBP0.5m impairment reversal relates to capitalised development
costs of 1Spatial Belgium, based on the improvement in the
company's expected future cashflows.
Share-based payment credit/(charge)
The share option charge represents the 'non-cash' charge under
IFRS 2 attributable to issuing share options this financial year.
The credit is due to the effect of leavers in the year.
Strategic, integration and other irregular items
2018 2017
GBPm GBPm
Costs associated with corporate transactions
and other strategic costs 0.1 0.2
Integration costs associated with Enables IT
and 1Spatial Inc. business - 0.1
System development costs - 0.1
Restructuring and redundancy costs 0.9 0.9
Write off of accrued revenue on settlement of
a contractual dispute 0.1 -
Gain on bargain purchase (0.1) -
(Release of amount payable to)/provision for
amount receivable from Sitemap Ltd (0.0) 1.3
Total 1.0 2.6
=============================================== ====== ======
Given the Group's involvement in corporate transactions, it
incurs irregular costs that affect the overall underlying results
of the business. Where possible the Group seeks to separate these
out along with any other irregular items that the Board believe
should be shown separately in this category.
A summary of key transactions within this category, are set out
above with further details provided in note 3. The overall figure
has decreased compared to the previous year with the majority of
the decrease stemming from the GBP1.3m provision in the previous
year for amounts receivable from its associate company, Sitemap
Ltd, that were of a funding nature.
Tax
The tax credit for the Group is GBP0.8m (2017: GBP1.0m). This is
largely a result of the deferred tax impact on the impairments in
the year.
Loss for the year from discontinued operations
The losses for the year from discontinued operations relate to
the closure of Storage Fusion, the sale of the controlling interest
in Enables IT Inc. (US business) in March 2017, and the sale of the
controlling interest in the Enables IT UK business that occurred in
March 2018. The controlling interest in Enables IT was sold after
the year-end but was classified as discontinued given that the
Board had made a decision to sell this prior to the year-end.
Statement of financial position
Non-current assets
Intangible assets including goodwill
Goodwill and intangible assets decreased by GBP1.4m in the year.
The impact of discontinued operations that are not included in the
current year balances is GBP1.2m. The remaining decrease in the
year of GBP0.2m relates to GBP1m additions to development costs,
GBP0.2m software arising on the acquisition of Sitemap Ltd, net of
amortisation charges of GBP1.6m, impairment charges of GBP0.4m and
impairment reversals of GBP0.5m.
Property, plant and equipment
Property, plant and equipment decreased by GBP0.7m in the year.
The impact of discontinued operations that are not included in the
current year balances is GBP0.3m; after these are taken into
account, the remaining GBP0.4m decrease is due to GBP0.4m of
depreciation charges (GBP0.2m of which relate to continuing
operations).
Current assets
Trade and other receivables
Trade and other receivables balances are GBP5.5m at the
year-end, a decrease of GBP3.4m on the prior year balance of
GBP8.9m. The impact of discontinued operations that are not
included in the current year balances is GBP1.6m. The remaining
GBP1.8m decrease relates to a GBP1.1m decreases in trade
receivables, together with a GBP0.7m decrease in accrued
income.
Cash balance
Net funds reduced from GBP0.6m in the prior year to GBP0.3m. The
analysis of this is discussed in the cash flow section below.
Assets and liabilities of disposal group classified as held for
sale
In accordance with IFRS 5, the assets and liabilities of Enables
IT Group Limited and Enables IT Limited (which was identified as a
disposal group held for sale) were written down to their fair value
less costs to sell of GBP1.
Current liabilities
Trade and other payables balances are GBP9m, a decrease of
GBP3.1m on the prior year balance of GBP12.1m. The impact of
discontinued operations that are not included in the current year
balances is GBP2.7m. The remaining GBP0.4m decrease is a GBP0.6m
decrease in deferred income net of increases of GBP0.1m each in
trade payables and other taxation and social security balances.
Non-current liabilities
The decrease of GBP0.2m in the deferred tax liability is mainly
attributable to the impact of the impairments in the year referred
to in the Tax section above.
Share capital and reserves
Share capital increased by GBP0.3m in the year as a result of
the shares issued to acquire the remaining 27% of 1Spatial Inc. and
controlling interest of Sitemap Ltd in April 2017. Accumulated
losses increased GBP2.5m with the loss for the year as noted
above.
Cash flow
The year-end cash and cash equivalents position was GBP1.3m
(2017: GBP1.3m). The Group had net funds of GBP0.3m (2017:
GBP0.6m).
A cash flow bridge is presented below which reconciles the
adjusted* EBITDA to the year-end cash balance. This is a different
format to the presentation shown in the Accounts.
2018
GBPm
Adjusted* EBITDA profit - continuing operations 0.4
Adjusted* EBITDA profit - discontinuing
operations 0.5
Tax and interest 0.6
Exceptional items (paid) (0.8)
Expenditure on product development and intellectual
property capitalised (1.0)
Working capital movements (0.2)
Disposal of subsidiary 0.1
Effect of forex 0.3
---------------------------------------------------- ------------------------
Net cash outflow (0.1)
Cash and cash equivalents in assets held
for sale (Enables IT) (0.2)
Opening net funds 0.6
Closing net funds 0.3
* Adjusted EBITDA is stated net of certain strategic,
integration, other irregular costs and share option charge. See
note 3 to the Accounts for further information
The net cash outflow in the year of GBP0.1m is significantly
reduced on the net cash outflow in the previous year (GBP4.8m).
This is mainly due to improved Adjusted * EBITDA, less expenditure
on product development and less net purchases of property, plant
and equipment.
1Spatial Inc. (previously LSI)
In February 2016, the Group exercised its option to acquire a
further 26% of 1Spatial Inc. for the sum of US$1.3m (GBP0.9m). The
Group funded this acquisition through a small fund raise of
GBP0.9m. This brought 1Spatial plc's total holding in 1Spatial Inc.
to 73%. During the year, in April 2017, the Group exercised its
final option to acquire the remaining 27% for US$0.9m (GBP0.7m)
through the issue of shares, taking its ownership to 100%. This
acquisition positions us to achieve our strategic goals across the
Group. The US is an area of focus for growth and we continue to
work alongside key customers and partners such as US Census and
ESRI to achieve progress in this region.
Sitemap
In April 2017, 1Spatial acquired the 51% of Sitemap Ltd that it
did not already own for GBP0.2m through the issue of shares. The
Company's investment in Sitemap to date has funded the development
of a solution that locates and visualises sites that best fit
commercial and residential property developer needs. The offering
is still under development with market analysis, research and
business development opportunities being reviewed.
With the final increase in our interests of 1Spatial Inc. and
Sitemap Ltd to 100%, we now have full control of the strategic
direction of all companies across the Group and a clear roadmap to
drive profitable growth.
Consolidated statement of comprehensive income
For the year ended 31 January 2018
Note 2018 2017
GBP'000 GBP'000
----------------------------------------- ----- --------- ---------
Continuing operations
Revenue 2 16,938 15,133
Cost of sales (7,994) (6,868)
----------------------------------------- ----- --------- ---------
Gross profit 8,944 8,265
Administrative expenses (10,749) (23,915)
----------------------------------------- ----- --------- ---------
(1,805) (15,650)
Adjusted* EBITDA 403 (874)
Less: depreciation (231) (297)
Less: amortisation and impairment
of intangible assets 5 (1,474) (11,323)
Add/less: share-based payment
charge 538 (566)
Less: strategic, integration
and other irregular items 3 (1,041) (2,590)
----------------------------------------- ----- --------- ---------
Operating loss (1,805) (15,650)
Finance income 36 176
Finance costs (187) (201)
----------------------------------------- ----- --------- ---------
Net finance cost (151) (25)
Share of net loss of associates
accounted for using the equity
method 6 - (266)
Loss before tax (1,956) (15,941)
Income tax credit 4 753 1,081
Loss for the year from continuing
operations (1,203) (14,860)
Discontinued operations
Loss for the year from discontinued
operations (attributable to equity
holders of the company) 9 (1,255) (3,442)
Loss for the year attributable
to:
Equity shareholders of the Parent (2,458) (18,423)
Non-controlling interest - 121
----------------------------------------- ----- --------- ---------
(2,458) (18,302)
========================================= ===== ========= =========
Other comprehensive income
Items that may subsequently be
reclassified to profit or loss:
Actuarial losses arising on defined
benefit pension, net of tax (2) (36)
Exchange differences arising
on translation of net assets
of foreign operations 366 281
Other comprehensive profit for
the year, net of tax 364 245
Total comprehensive loss for
the year (2,094) (18,057)
----------------------------------------- ----- --------- ---------
Total comprehensive (loss)/profit
attributable to:
Equity shareholders of the Parent (2,094) (18,169)
Non-controlling interest - 112
----------------------------------------- ----- --------- ---------
(2,094) (18,057)
========================================= ===== ========= =========
Total comprehensive loss attributable
to equity
shareholders of the Parent arises
from:
* Continuing operations (1,030) (14,359)
* Discontinued operations (1,064) (3,698)
----------------------------------------- ----- --------- ---------
(2,094) (18,057)
========================================= ===== ========= =========
Note 2018 2017
GBP'000 GBP'000
(Loss)/earnings 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)/earnings per share (0.32) (2.51)
From continuing operations 15 (0.15) (2.04)
From discontinued operations 15 (0.17) (0.47)
Diluted (loss)/earnings per share (0.32) (2.51)
From continuing operations 15 (0.15) (2.04)
From discontinued operations 15 (0.17) (0.47)
* Adjusted for strategic, integration, other irregular items
(note 3) and share-based payment charge.
Registered company number (England): 5429800
Consolidated statement of financial position
As at 31 January 2018
Note 2018 2017
GBP'000 GBP'000
-------------------------------------- ----- --------- ---------
Assets
Non-current assets
Intangible assets including goodwill 5 10,540 11,968
Property, plant and equipment 333 1,057
Interests in associates 6 - -
Total non-current assets 10,873 13,025
-------------------------------------- ----- --------- ---------
Current assets
Trade and other receivables 7 5,510 8,929
Current income tax receivable 221 -
Cash and cash equivalents 8 1,319 1,285
Total current assets 7,050 10,214
-------------------------------------- ----- --------- ---------
Assets of disposal group classified
as held for sale 9 1,031 547
-------------------------------------- ----- --------- ---------
Total assets 18,954 23,786
-------------------------------------- ----- --------- ---------
Liabilities
Current liabilities
Bank borrowings (1,051) (681)
Trade and other payables 10 (9,003) (12,072)
Current income tax liabilities (32) (23)
Obligations under finance leases - (11)
Provisions 11 (148) (242)
-------------------------------------- ----- --------- ---------
Total current liabilities (10,234) (13,029)
-------------------------------------- ----- --------- ---------
Non-current liabilities
Obligations under finance leases - (53)
Defined benefit pension obligation (635) (614)
Deferred tax 12 (264) (421)
Total non-current liabilities (899) (1,088)
-------------------------------------- ----- --------- ---------
Liabilities of disposal group
classified as held for sale 9 (1,031) (447)
Total liabilities (12,164) (14,564)
-------------------------------------- ----- --------- ---------
Net assets 6,790 9,222
====================================== ===== ========= =========
Share capital and reserves
Share capital 13 16,705 16,449
Share premium account 13 22,931 22,931
Own shares held 13 (303) (303)
Equity-settled employee benefits
reserve 13 2,716 3,254
Merger reserve 13 16,030 15,347
Reverse acquisition reserve 13 (11,584) (11,584)
Currency translation reserve 13 224 (142)
Accumulated losses (39,452) (36,992)
Purchase of non-controlling interest
reserve (477) -
-------------------------------------- ----- --------- ---------
Total equity attributable to
shareholders of the parent 6,790 8,960
Non-controlling interests - 262
Total equity 6,790 9,222
====================================== ===== ========= =========
Consolidated statement of changes in equity
For the year Share Share Own Equity-settled Merger Reverse Currency Purchase of Accumulated Total equity Non-controlling Total
ended 31 January capital premium shares employee reserve acquisition translation non-controlling losses attributable interest equity
2018 account held benefits reserve reserve interest to
GBP'000 reserve reserve shareholders
of the
parent
----------------- -------- -------- ------- --------------- -------- ------------ ------------ ---------------- ------------ ------------- ---------------- ---------
Balance at 1
February 2016 16,223 22,264 (306) 2,688 15,347 (11,584) (432) - (18,533) 25,667 - 25,667
----------------- -------- -------- ------- --------------- -------- ------------ ------------ ---------------- ------------ ------------- ---------------- ---------
Comprehensive
(loss)/income
Loss for the
year - - - - - - - - (18,423) (18,423) 121 (18,302)
Other
comprehensive
(loss)/income
----------------- -------- -------- ------- --------------- -------- ------------ ------------ ---------------- ------------ ------------- ---------------- ---------
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
Exercise of
share options - 11 3 - - - - - - 14 - 14
Proceeds from
shares issued
(note 13) net
of
share issue
costs of GBP23k 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 16,449 22,931 (303) 3,254 15,347 (11,584) (142) - (36,992) 8,960 262 9,222
----------------- -------- -------- ------- --------------- -------- ------------ ------------ ---------------- ------------ ------------- ---------------- ---------
Comprehensive
loss
Loss for the
year - - - - - - - - (2,458) (2,458) - (2,458)
Other
comprehensive
(loss)/income
----------------- -------- -------- ------- --------------- -------- ------------ ------------ ---------------- ------------ ------------- ---------------- ---------
Actuarial losses
arising on
defined benefit
pension - - - - - - - - (2) (2) - (2)
Exchange
differences on
translating
foreign
operations - - - - - - 366 - - 366 - 366
----------------- -------- -------- ------- --------------- -------- ------------ ------------ ---------------- ------------ ------------- ---------------- ---------
Total other
comprehensive
income/(loss) - - - - - - 366 - (2) 364 - 364
----------------- -------- -------- ------- --------------- -------- ------------ ------------ ---------------- ------------ ------------- ---------------- ---------
Total
comprehensive
(loss)/income - - - - - - 366 - (2,460) (2,094) - (2,094)
----------------- -------- -------- ------- --------------- -------- ------------ ------------ ---------------- ------------ ------------- ---------------- ---------
Transactions
with owners
Issue of shares
to acquire
remaining
interest in
Sitemap Ltd 56 - - - 144 - - - - 200 - 200
Acquisition of
shares in
1Spatial Inc 200 - - - 539 - - (477) - 262 (262) -
Recognition of
share-based
payments - - - (538) - - - - - (538) - (538)
----------------- -------- -------- ------- --------------- -------- ------------ ------------ ---------------- ------------ ------------- ---------------- ---------
256 - - (538) 683 - - - - (76) - (338)
----------------- -------- -------- ------- --------------- -------- ------------ ------------ ---------------- ------------ ------------- ---------------- ---------
Balance at 31
January 2018 16,705 22,931 (303) 2,716 16,030 (11,584) 224 (477) (39,452) 6,790 - 6,790
----------------- -------- -------- ------- --------------- -------- ------------ ------------ ---------------- ------------ ------------- ---------------- ---------
Consolidated statement of cash flows
For the year ended 31 January 2018
Note 2018 2017
GBP'000 GBP'000
Cash flows from operating activities
Cash from/(used in) operations (a) 245 (1,061)
Interest received 3 3
Interest paid (170) (169)
Tax received 751 425
------------------------------------------- -----
Net cash generated from/(used in)
operating activities 829 (802)
------------------------------------------- ----- --------- ---------
Cash flows from investing activities
Acquisition of subsidiary (net
of cash acquired) 14 15 (852)
Cash disposed with subsidiary - (48)
Disposal of subsidiary 100 -
Purchase of property, plant and
equipment (96) (574)
Proceeds from sale of property,
plant and equipment 80 84
Expenditure on product development
and intellectual property capitalised (1,019) (3,552)
Net cash used in investing activities (920) (4,942)
------------------------------------------- ----- --------- ---------
Cash flows from financing activities
Repayment of borrowings (5) -
Net proceeds of share issue 13 - 896
Net cash (used in)/generated from
financing activities (5) 896
------------------------------------------- ----- --------- ---------
Net decrease in cash and cash equivalents (96) (4,848)
Cash and cash equivalents at start
of year 604 4,996
Less cash and cash equivalents
in assets held for sale (226) (51)
Effects of foreign exchange on
cash and cash equivalents (14) 507
------------------------------------------- ----- --------- ---------
Cash and cash equivalents at end
of year (b) 268 604
=========================================== ===== ========= =========
Cash flows of discontinued operations included above
2018 2017
GBP'000 GBP'000
Net cash generated from operating activities 101 434
Net cash used in investing activities (33) (668)
Total 68 (234)
---------------------------------------------- --------- ---------
Notes to the consolidated statement of cash flows
(a) Cash generated from/(used in) operations
Note 2018 2017
GBP'000 GBP'000
------------------------------------------- ----- --------- ---------
Loss before tax including discontinued
operations (3,424) (19,455)
Adjustments for:
Share of net loss of associates - 266
Net finance cost 167 176
Depreciation 376 795
Amortisation and impairment of intangible
assets 1,558 14,445
Impairment of assets held for sale 9 1,220 -
Share-based payment charge (538) 566
Net foreign exchange movement 271 (544)
Loss on disposal of assets held
for sale 199 -
Loss on disposal of property, plant
and equipment 9 33
Gain on bargain purchase 14 (100) -
Decrease in trade and other receivables 2,791 2,233
(Decrease)/increase in trade and
other payables (2,205) 538
Increase/(decrease) in provisions (83) (155)
Increase in defined benefit pension
obligation 4 41
Cash generated from/(used in) operations 245 (1,061)
=========================================== ===== ========= =========
(b) Reconciliation of net cash flow to movement in net funds
2018 2017
GBP'000 GBP'000
---------------------------------------------- -------------- --------------
Decrease in cash in the year (96) (4,848)
Net cash outflow in respect of borrowings
paid - -
Changes resulting from cash flows (96) (4,848)
Less cash and cash equivalents in
assets held for sale (226) (51)
Effect of foreign exchange (14) 507
Change in net funds (336) (4,392)
Net funds at beginning of year 604 4,996
---------------------------------------------- -------------- --------------
Net funds at end of year 268 604
============================================== ============== ==============
Analysis of net funds
Cash and cash equivalents classified
as:
Current assets 1,319 1,285
Bank and other loans (1,051) (681)
---------------------------------------------- -------------- --------------
Net funds at end of year 268 604
============================================== ============== ==============
c) Reconciliation of movement in
liabilities from financing activities
Finance leases Finance leases
due within due after
1 year 1 year Bank overdraft Total
GBP'000 GBP'000 GBP'000 GBP'000
Debt as at 1 February 2016 - - - -
Acquisitions - finance
lease 17 62 - 79
Cashflows (6) - 681 675
-------------- -------------- -------------- -------
Debt as at 31 January 2017 11 62 681 754
-------------- -------------- -------------- -------
Cashflows (5) - 370 365
Disposals - finance lease (6) (62) - (68)
Debt as at 31 January 2018 - - 1,051 1,051
-------------- -------------- -------------- -------
Notes to the accounts
For the year ended 31 January 2018
1. Basis of preparation
The preliminary information of 1Spatial plc is prepared in
accordance with International Financial Reporting Standards (IFRS)
and IFRS Interpretations Committee (IFRS IC) interpretations as
adopted by the European Union and the Companies Act 2006 applicable
to companies reporting under IFRS ,and comply with Article 4 of the
EU IAS Regulation.
The preliminary information has been prepared on the historical
cost basis, except for the revaluation of certain financial
instruments. The Group financial statements are presented in
Sterling and all values are rounded to the nearest thousand pounds
(GBP000) except when otherwise indicated.
The accounting policies adopted in the preparation of the
preliminary information are consistent with those followed in the
preparation of the financial statements for the year ended 31
January 2017.
The results shown for the year ended 31 January 2018 and 31
January 2017 are audited. The consolidated financial information
contained in this announcement does not constitute statutory
accounts within the meaning of Section 434 of the Companies Act
2006. Statutory accounts of the Company in respect of the financial
year ended 31 January 2018 were approved by the Board of directors
on 21 May 2018 and will be delivered to the Registrar of Companies
in due course. The report of the auditors on those accounts was
unqualified and did not contain an emphasis of matter paragraph nor
any statement under Section 498 of the Companies Act 2006.
2. Segmental information
Management has determined the operating segments based on the
reports reviewed by the Board that are used to make strategic
decisions.
The United Kingdom is the home country of the Group. For
management purposes during the year, the Group was organised into
the following operating divisions - Central costs, Geospatial
(1Spatial Group including France and Belgium and 1Spatial Inc.) and
Cloud (Enables IT and Storage Fusion, which are both included
within discontinued operations, and Sitemap). These divisions are
the basis on which the Group reports its segmental information. The
Geospatial business represents the core 1Spatial business which has
offices in the UK (Cambridge), Ireland, France, Belgium, Australia
and the USA (Washington DC). The Cloud Services division represents
the Enables IT business plus the two smaller businesses operated by
the Group, of Storage Fusion and Sitemap. Enables IT and Storage
Fusion have been treated as discontinued operations in these
financial statements, within the Cloud segment. The Central costs
mainly represent costs associated with 1Spatial plc including costs
of the Board of Directors and other costs which are not specific to
any of the other segments. Examples of cost include the Group
accounting function and marketing. It also includes costs
associated with being an AIM listed company and other statutory
costs including audit fees.
The Board assesses the performance of the operating segments
based on a measure of adjusted EBITDA. This measurement basis
excludes the effects of strategic, integration and other one-off
items from the operating segments.
The segment information provided to the Board for the reportable
segments for the year ended 31 January 2018 is as follows:
Central Geospatial Cloud Total
costs GBP'000 GBP'000 GBP'000
31 January 2018 GBP'000
Revenue - 16,938 - 16,938
Cost of sales - (7,994) - (7,994)
------------------------------------- --------- ----------- --------- ---------
Gross profit - 8,944 - 8,944
Total administrative expenses (1,742) (8,874) (133) (10,749)
Adjusted EBITDA (1,601) 2,035 (31) 403
Less: depreciation (15) (215) (1) (231)
Less: amortisation and impairment
of intangible assets - (1,274) (200) (1,474)
Add/Less: share-based payment
charge 551 (13) - 538
Less: strategic, integration
and other irregular items (677) (463) 99 (1,041)
------------------------------------- --------- ----------- --------- ---------
Total operating (loss)/profit (1,742) 70 (133) (1,805)
Finance income - 36 - 36
Finance cost (124) (63) - (187)
------------------------------------- --------- ----------- --------- ---------
Net finance cost (124) (27) - (151)
Share of net loss of associates
accounted for using the equity
method - - - -
Loss before tax (1,866) 43 (133) (1,956)
Tax - 748 5 753
------------------------------------- --------- ----------- --------- ---------
(Loss)/profit for the year (1,866) 791 (128) (1,203)
Loss for the year from discontinued
operations (166) - (1,089) (1,255)
------------------------------------- --------- ----------- --------- ---------
(Loss)/profit for the year
attributable to:
Equity holders of the parent (2,032) 791 (1,217) (2,458)
Non-controlling interest - - - -
------------------------------------- --------- ----------- --------- ---------
(2,032) 791 (1,217) (2,458)
===================================== ========= =========== ========= =========
(Loss)/profit for the year
from:
- Continuing operations (1,866) 791 (128) (1,203)
- Discontinued operations (166) - (1,089) (1,255)
---------------------------- -------- ---- -------- --------
(2,032) 791 (1,217) (2,458)
============================ ======== ==== ======== ========
Central Geospatial Cloud Total
costs GBP'000 GBP'000 GBP'000
31 January 2018 GBP'000
Segment assets 69 17,632 1,253 18,954
Segment liabilities (2,705) (8,382) (1,077) (12,164)
---------------------------------- --------- ----------- --------- ---------
Segment net (liabilities)/assets (2,636) 9,250 176 6,790
================================== ========= =========== ========= =========
The revenue from external parties reported to the Board is
measured in a manner consistent with that in the statement of
comprehensive income.
The amounts provided to the Board in the year ended 31 January
2018 with respect to total assets and total liabilities are
measured in a manner consistent with that of the financial
statements. Assets are allocated based on the operations of the
segment and the physical location of the asset. Liabilities are
allocated based on the operations of the segment.
Central Geospatial Cloud Total
costs GBP'000 GBP'000 GBP'000
31 January 2017 GBP'000
Revenue - 15,133 - 15,133
Cost of sales - (6,868) - (6,868)
------------------------------------- --------- ----------- --------- ---------
Gross profit - 8,265 - 8,265
Total administrative expenses (5,157) (18,758) - (23,915)
Adjusted EBITDA (2,352) 1,478 - (874)
Less: depreciation (57) (240) - (297)
Less: amortisation and impairment
of intangible assets - (11,323) - (11,323)
Less: share-based payment charge (550) (16) - (566)
Less: strategic, integration
and other irregular items (2,198) (392) - (2,590)
------------------------------------- --------- ----------- --------- ---------
Total operating loss (5,157) (10,493) - (15,650)
Finance income - 176 - 176
Finance cost (116) (85) - (201)
------------------------------------- --------- ----------- --------- ---------
Net finance (cost)/income (116) 91 - (25)
Share of net loss of associates
accounted for using the equity
method - (39) (227) (266)
Loss before tax (5,273) (10,441) (227) (15,941)
Tax - 1,081 - 1,081
------------------------------------- --------- ----------- --------- ---------
Loss for the year (5,273) (9,360) (227) (14,860)
Loss for the year from discontinued
operations - - (3,442) (3,442)
(Loss)/profit for the year
attributable to:
Equity holders of the parent (5,273) (9,481) (3,669) (18,423)
Non-controlling interest - 121 - 121
------------------------------------- --------- ----------- --------- ---------
(5,273) (9,360) (3,669) (18,302)
===================================== ========= =========== ========= =========
Loss for the year from:
- Continuing operations (5,273) (9,360) (227) (14,860)
- Discontinued operations - - (3,442) (3,442)
--------------------------- -------- -------- -------- ---------
(5,273) (9,360) (3,669) (18,302)
=========================== ======== ======== ======== =========
Central Geospatial Cloud Total
costs GBP'000 GBP'000 GBP'000
31 January 2017 GBP'000
Segment assets 323 19,422 4,041 23,786
Segment liabilities (2,304) (8,966) (3,294) (14,564)
--------------------- --------- ----------- --------- ---------
Segment net assets (1,981) 10,456 747 9,222
===================== ========= =========== ========= =========
The following table provides an analysis of the Group's
non-current assets located in all countries in which the entity
holds assets.
2018 2017
GBP'000 GBP'000
United Kingdom (being the Company's country
of domicile) 6,132 8,965
Europe 2,235 1,498
United States 2,501 2,556
Rest of World 5 6
--------- ----------
10,873 13,025
========= ==========
No customer of the Group is considered to be a major customer
where revenues exceed 10% of the Group's revenue.
The Group's operations are located in the United Kingdom, Europe
(Ireland, France and Belgium) the United States and Australia. The
following table provides an analysis of the Group's revenue by
geographical destination.
2018 2018 2018 2017 2017 2017
Continuing Discontinued Total Continuing Discontinued Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
United Kingdom 5,004 5,441 10,445 4,359 7,498 11,857
Europe 7,302 - 7,302 6,480 2 6,482
United States 2,590 137 2,727 2,653 1,738 4,391
Rest of
World 2,042 - 2,042 1,641 229 1,870
------------ -------------- --------- ------------ -------------- ---------
16,938 5,578 22,516 15,133 9,467 24,600
============ ============== ========= ============ ============== =========
The following table provides an analysis of the Group's revenue
by country of domicile.
2018 2018 2018 2017 2017 2017
Continuing Discontinued Total Continuing Discontinued Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
United Kingdom 5,671 5,441 11,112 5,510 7,729 13,239
Europe 7,151 - 7,151 6,121 - 6,121
United States 2,556 137 2,693 2,262 1,738 4,000
Rest of
World 1,560 - 1,560 1,240 - 1,240
------------ -------------- --------- ------------ -------------- ---------
16,938 5,578 22,516 15,133 9,467 24,600
============ ============== ========= ============ ============== =========
The following table provides an analysis of the Group's revenue
by category.
2018 2018 2018 2017 2017 2017
Continuing Discontinued Total Continuing Discontinued Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Licences 2,515 - 2,515 1,458 69 1,527
Services 7,178 1,281 8,459 6,571 2,296 8,867
Support
and maintenance 7,228 1,377 8,605 7,104 2,889 9,993
Products 17 2,920 2,937 4,213 4,213
16,938 5,578 22,516 15,133 9,467 24,600
============ ============== ========= ============ ============== =========
3. Strategic, integration and other irregular items
In accordance with the Group's policy for strategic, integration
and other irregular items, the following charges were included in
this category for the year:
2018 2017
GBP'000 GBP'000
Costs associated with corporate transactions
and other strategic costs 101 228
Integration costs associated with Enables IT
and 1Spatial Inc. business - 121
System development costs - 105
Restructuring and redundancy costs 946 832
Write-off of accrued revenue on settlement of
a contractual dispute 138 -
Gain on bargain purchase (100) -
(Release of amount payable to)/provision for
amount receivable from Sitemap Ltd (44) 1,334
Other - (30)
Total 1,041 2,590
=============================================== ========= =========
Corporate transactions and other strategic costs comprise broker
costs, due diligence and other advisory fees. In addition, and in
line with our stated strategy, the Company assessed other potential
acquisitions during the year and used various advisers to assist
with this process and the overall strategic direction of the
Company.
Integration costs incurred in the prior year on the acquisition
of Enables IT and 1Spatial Inc. include rebranding costs and other
costs of aligning operating strategies and sales and marketing
strategies.
Substantial cost was incurred over the current and prior year to
restructure the Group and the Board of Directors and is included
within restructuring and redundancy costs.
Write-off of accrued revenue comprises revenue which was accrued
in prior years, but due to a contract dispute which arose towards
the end of the current year, was not ultimately recoverable as part
of the settlement agreement reached with the customer. Disputes of
this nature, and particularly this magnitude, occur very
infrequently.
The gain on bargain purchase arose on acquisition of the
controlling interest in Sitemap Ltd.
In advance of the Group's purchase of the remaining 51% interest
in Sitemap Ltd, the Group received a waiver of GBP44,000 in respect
of an amount owed by the Group to Sitemap Ltd.
4. Income tax charge/(credit)
2018 2017
GBP'000 GBP'000
Current tax
UK corporation tax on income for year - -
Foreign tax 49 33
Adjustments in respect of prior years (720) (22)
----------------------------------------- --------- ---------
Total current tax (671) 11
----------------------------------------- --------- ---------
Deferred tax (note 12)
Origination and reversal in temporary
differences (111) (1,053)
Effect of decreased tax rate on opening
deferred tax position 29 (39)
Total deferred tax (82) (1,092)
----------------------------------------- --------- ---------
Total tax credit (753) (1,081)
----------------------------------------- --------- ---------
Factors affecting the tax credit for the year:
The tax credit for the year is higher (2017: lower) than the
standard rate of corporation tax in the UK. The differences are
explained below:
2018 2017
GBP'000 GBP'000
Loss on ordinary activities before tax (1,956) (15,941)
--------------------------------------------------- --------- ---------
(1,956) (15,941)
--------------------------------------------------- --------- ---------
Loss on ordinary activities before tax
multiplied by the effective rate of corporation
tax in the UK of 19.16% (2017: 20%) (375) (3,188)
Effect of:
Expenses not deductible for tax purposes 153 1,667
Income not taxable (40) -
Overseas tax rates higher than UK tax
rates (30) (7)
Tax losses for which no deferred tax
asset was recognised 202 485
Adjustments in respect of prior years (720) (22)
Impact of change in tax rate 57 (16)
--------------------------------------------------- --------- ---------
Total tax credit for year (753) (1,081)
--------------------------------------------------- --------- ---------
The adjustment in respect of prior years arose due to the group
electing to receive an R&D tax credit in relation to the
periods 31 January 2016 and 2017 in the form of cash during the
year.
Changes to the UK corporation tax rates were substantively
enacted as part of the Finance Bill 2015 (on 26 October 2015) and
Finance Bill 2016 (on 7 September 2016). These changes included
amongst other things, the reduction in the main rate of UK
corporation tax to 19% with effect from 1 April 2017 and to 17%
with effect from 1 April 2020, so the relevant deferred tax
balances have been re-measured at 17% for the current year end.
5. Intangible assets including goodwill
Goodwill Brands Customers Software Development Website Intellectual Total
and costs costs property
related
contracts
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 1 February 2017 16,409 232 3,660 4,195 12,632 30 40 37,198
Arising on
acquisition - - - 200 - - - 200
Additions - - - - 1,005 - 11 1,016
Reclassified as
held for sale (480) - (850) - - - - (1,330)
Disposals - - - - - - - -
Effect of foreign
exchange 79 - 37 25 100 - - 241
---------------------
At 31 January 2018 16,008 232 2,847 4,420 13,737 30 51 37,325
--------------------- --------- --------- ----------- --------- ------------ --------- ------------- ---------
Accumulated
impairment
and amortisation
At 1 February 2017 11,432 119 2,499 3,171 7,979 30 - 25,230
Reclassified as
held for sale - - (213) - - - - (213)
Amortisation -
continuing
operations - 23 179 246 1,139 - 2 1,589
Amortisation -
discontinued
operations - - 85 - - - - 85
Impairment -
continuing
operations - - - 183 186 - - 369
Reversal of prior
year impairment
- continued
operations - - - - (484) - - (484)
Effect of foreign
exchange 79 - 32 25 73 - - 209
At 31 January 2018 11,511 142 2,582 3,625 8,893 30 2 26,785
--------------------- --------- --------- ----------- --------- ------------ --------- ------------- ---------
Net book amount
at
31 January 2018 4,497 90 265 795 4,844 - 49 10,540
===================== ========= ========= =========== ========= ============ ========= ============= =========
The impairments and reversal of prior year impairments recorded
in the year for software and development costs arose on the review
of the Group's expected future cash flows that would arise from the
assets. A product return on investment assessment was also
performed for assets within development costs to identify the
current and future profitability of these assets.
In the case of software, the asset arising on acquisition was
fully impaired. In the case of the impairment of development costs,
a value in use calculation for the asset in question was performed
using a pre-tax discount rate of 16% and forecast revenue and costs
to complete. If revenues were 10% lower than the impairment charge
would have been GBP37,000 larger.
In the prior year, certain development cost assets (as well as
goodwill) were impaired in the 1Spatial France / Belgium CGU,
following an impairment review. In the current year, part of the
impairment recorded in respect of other intangible assets was
reversed. The key assumptions used in the value in use calculation
were the pre-tax discount rate applied (17%) and the forecast
growth in sales. Growth is forecast at 10% for the years ending 31
January 2020 and the next three years and 2% thereafter.
The rates used in the above assumptions are consistent with
management's knowledge of the industry and strategic plans going
forward.
The terminal growth rate of 2% does not exceed the long-term
growth rate for the business in which the CGU operates. Discount
rates used are pre-tax and reflect specific risks relating to the
relevant segments. The forecasts are most sensitive to changes in
revenue and overhead assumptions.
Goodwill Brands Customers Software Development Website Intellectual Total
and costs costs property
related
contracts
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 1 February 2016 14,510 232 3,680 4,059 8,718 30 26 31,255
Arising on
acquisition 2,310 - 250 - - - - 2,560
Additions - - - 11 3,527 - 14 3,552
Reclassified as
held for sale (469) - (458) - - - - (927)
Disposals (339) - - - - - - (339)
Effect of foreign
exchange 397 - 188 125 387 - - 1,097
---------------------
At 31 January 2017 16,409 232 3,660 4,195 12,632 30 40 37,198
--------------------- --------- --------- ----------- --------- ------------ --------- ------------- ---------
Accumulated
impairment
and amortisation
At 1 February 2016 6,355 96 859 2,370 2,645 30 - 12,355
Reclassified as
held for sale - - (69) - - - - (69)
Amortisation -
continuing
operations - 23 281 436 1,212 - - 1,952
Amortisation -
discontinued
operations - - 131 - 307 - - 438
Impairment -
continuing
operations 5,077 - 1,214 281 2,799 - - 9,371
Impairment -
discontinued
operations - - - - 874 - - 874
Effect of foreign
exchange - - 83 84 142 - - 309
At 31 January 2017 11,432 119 2,499 3,171 7,979 30 - 25,230
--------------------- --------- --------- ----------- --------- ------------ --------- ------------- ---------
Net book amount
at
31 January 2017 4,977 113 1,161 1,024 4,653 - 40 11,968
===================== ========= ========= =========== ========= ============ ========= ============= =========
The net book amount of development costs includes GBP4,844,000
(2017: GBP4,653,000) internally generated capitalised software
development costs that meet the definition of an intangible asset.
The amortisation charge of GBP1,674,000 (2017: GBP2,390,000) is
included in the administrative expenses in the statement of
comprehensive income.
Impairment tests for goodwill
Goodwill is allocated to the Group's cash-generating units
(CGUs). The basis of the allocation is made to those CGUs that are
expected to benefit from the business combination in which the
goodwill arose, identified according to operating segment. Although
the 1Spatial and the 1Spatial France/Belgium CGUs are both in the
Geospatial segment, they use different technologies and generate
largely independent cash flows. A summary of the goodwill
allocation is presented below.
2018 2017
--------------------------------------------
1Spatial Avisen 1Spatial
Enables France & Enables France
IT 1Spatial / Belgium Total IT 1Spatial / Belgium Total
Goodwill GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Opening
carrying
value 480 4,493 4 4,977 1,073 3,960 3,122 8,155
Arising
on acquisition - - - - - 2,310 - 2,310
Reclassified
as held
for sale (480) - - (480) (254) (215) - (469)
Disposal - - - - (339) - - (339)
Impairment - - - - - (1,562) (3,515) (5,077)
Foreign
exchange - - - - - - 397 397
--------- --------- ----------- --------- ----------- --------- ----------- ---------
Closing
carrying
value - 4,493 4 4,497 480 4,493 4 4,977
========= ========= =========== ========= =========== ========= =========== =========
Subsequent to Enables IT being classified as held-for-sale,
goodwill relating to Enables IT has been impaired to GBPnil and the
impairment charge amounting to GBP480,000 has been included within
profit/loss from discontinued operations for the year.
Basis for calculation of recoverable amount
The Group has prepared, and formally approved, a five-year plan
for each CGU. The detailed plan put together by the management team
and the Board makes judgements and assessments on revenue and gross
profit expectations. This is from both contracted and pipeline
revenue streams. It also takes account of historic success of
winning new work and has been prepared in accordance with IAS 36,
'Impairment of Assets'.
The key assumptions used in the value in use calculations were
the pre-tax discount rates applied (16%) for all CGUs and the
growth assumptions for each CGU. 1Spatial (excluding France and
Belgium) has forecast growth in sales and corresponding costs for
the year ending 31 January 2019 of (18% and 6% respectively).
Growth is forecast at 10% for the following three years, 5% in year
four and 2% thereafter.
The rates used in the above assumptions are consistent with
management's knowledge of the industry and strategic plans going
forward. The assumptions noted above have been given in terms of
revenue and overhead percentage growth. For 2019 and subsequent
years, the assumption has been provided in terms of growth on the
prior year EBIT. The terminal growth rate of 2% for 1Spatial does
not exceed the long-term growth rate for the business in which the
CGUs operate. Discount rates used are pre-tax and reflect specific
risks relating to the relevant segments. The forecasts are most
sensitive to changes in revenue and overhead assumptions (taken
together as the EBIT).
6. Interests in associates
Investments in associates are stated at cost less provision for
any impairment.
Associates are accounted for using the equity method in these
consolidated financial statements as set out in the Group's
accounting policies.
2018 2017
GBP'000 GBP'000
Carrying value recognised in the statement
of financial position at 31 January - -
Share of net loss recognised in the statement
of comprehensive income: - 266
Details of the associate at 31 January 2018 are as follows:
Name Principal Place of Proportion of ownership Proportion of voting
activity incorporation interest power held
(or registration)
and operation
31 January 31 January 31 January 31 January
2018 2017 2018 2017
Sitemap
Ltd
(Note Location-based
1) software United Kingdom 100% 49% 100% 49%
1Spatial
Inc.
(Note Location-based
2) software United States 100% 73% 100% 73%
Note 1: A 49 per cent. share of Sitemap Ltd was first acquired
on 30 January 2015. On 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.
Sitemap Ltd became a subsidiary from 11 April 2017 and was
included as part of consolidated results from that date.
Note 2: 1Spatial Inc. - 47 per cent. of 1Spatial Inc. was first
acquired on 3 February 2015 by 1Spatial Holdings Limited (a
wholly-owned subsidiary of 1Spatial plc). On 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 29 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 associates (and not the Group's share
of those amounts).
Summarised statement of financial position
Sitemap Ltd
As at
11 April 31 January
2017 2017
GBP'000 GBP'000
(Note 3)
Current assets 146 54
Non-current assets 202 1,055
Current liabilities (1,311) (1,395)
Non-current liabilities (34) -
------------------------- --------- -----------
Net liabilities (997) (286)
------------------------- --------- -----------
Summarised statement of comprehensive income
Sitemap Ltd
For the period ended
11 April 31 January
2017 2017
GBP'000 GBP'000
Revenue - -
Gross profit - (120)
Administrative expenses (876) (274)
Adjusted EBITDA (1) (124)
Less: depreciation (1) (4)
Less: amortisation
and impairment of intangible
assets (874) (111)
Less: strategic, integration
and other one-off items - (155)
------------------------------- ---------- -----------
Operating loss (876) (394)
Net finance cost - -
Pre-tax loss from continuing
operations (876) (394)
Taxation 165 -
Post-tax profit/(loss)
from continuing operations (711) (394)
There are no items in other comprehensive income or expense.
Note 3: The investment in Sitemap Ltd was made on 30 January
2015. It became a subsidiary in April 2017 when the Group purchased
a further 51% of the share capital of Sitemap Ltd. The summarised
statement of financial position relating to Sitemap Ltd above is as
at the date before it ceased to be an associate, and the summarised
statement of comprehensive income relating to Sitemap Ltd above is
for the period that it was an associate.
7. Trade and other receivables
2018 2017
Current GBP'000 GBP'000
Trade receivables 2,412 5,552
Less: provision for impairment of trade
receivables (38) (626)
----------------------------------------- --------- ---------
2,374 4,926
Other taxes and social security 38 144
Other receivables 1,351 1,278
Prepayments and accrued income 1,747 2,581
5,510 8,929
----------------------------------------- --------- ---------
The fair value of the Group's trade receivables and other
receivables is the same as its book value stated above. No interest
is charged on overdue receivables.
At 31 January 2018, trade receivables of GBP1,961,000 (2017:
GBP3,808,000) were fully performing. The Group has provided fully
for all receivables which are not considered recoverable. Before
accepting any new customer, the Group assesses the potential
customer's credit quality and defines credit limits by
customer.
At 31 January 2018, trade receivables of GBP413,000 (2017:
GBP1,118,000) were past due but not impaired. The ageing analysis
of these customers is set out below. There has been no change in
the credit quality of these balances; they relate to customers
where there is no history of default and are still considered fully
recoverable.
2018 2017
GBP'000 GBP'000
Up to 3 months overdue 315 1,025
3 to 6 months overdue 35 12
6 to 12 months overdue 19 81
> 12 months overdue 44 -
------------------------
413 1,118
------------------------ --------- ---------
As of 31 January 2018, trade receivables of GBP38,000 were
impaired (2017: GBP626,000) and provided for.
The ageing of these receivables is as follows:
2018 2017
GBP'000 GBP'000
Up to 3 months overdue - 114
3 to 6 months overdue - 33
6 to 12 months overdue - 352
> 12 months 38 127
38 626
------------------------ --------- ---------
Movements on the Group provision for impairment of trade
receivables are as follows:
2018 2017
GBP'000 GBP'000
At 1 February 626 45
Creation of provision 6 581
Utilisation of provision (594) -
At 31 January 38 626
-------------------------- --------- ---------
The creation of the provision for impaired receivables has been
included in administrative expenses in the statement of
comprehensive income.
The other classes within trade and other receivables do not
contain impaired assets and the Group expects to recover these in
full. There are no financial assets whose terms have been
renegotiated that would otherwise be past due or impaired.
The maximum exposure to credit risk at the reporting date is the
carrying value of each class of receivable noted above and accrued
income amounting to GBP1.257m. The Group does not hold any
collateral as security.
8. Cash and cash equivalents
2018 2017
GBP'000 GBP'000
Cash at bank and in hand 1,319 1,285
1,319 1,285
-------------------------- --------- ---------
The fair value of the Group's cash and cash equivalents is the
same as its book value stated above.
9. Assets classified as held for sale and discontinued operations
Asset classified as held for sale
The assets and liabilities related to Enables IT Group Limited
and Enables IT Limited have been presented as held for sale
following the decision by the Board to seek buyers for the business
during the year. The Board approved the disposal with the
completion date for the transaction being after the year-end, on 15
March 2018. In accordance with IFRS 5, the assets and liabilities
held for sale were written down to their fair value less costs to
sell of GBP1 (at present value).
Assets of disposal group classified as held for sale:
2018
GBP'000
Property, plant and equipment 302
Goodwill 480
Intangible assets 637
Other non-current assets 125
Impairment to fair value less costs to sell (1,220)
Other current assets (including GBP226,000 cash and cash
equivalents) 707
Total 1,031
---------------------------------------------------------- ---------
Liabilities of disposal group classified as held for sale:
2018
GBP'000
Trade and other payables 270
Other current liabilities 657
Other long-term liabilities 93
Provisions 11
Total 1,031
----------------------------- ---------
Discontinued operations
Enables IT Group Limited
Enables IT Group Limited, and its wholly owned subsidiary
Enables IT Limited, was sold on 15 March 2018 to the management of
the company. Its results were as follows:
2018 2017
GBP'000 GBP'000
Revenue 5,442 6,932
Expenses (5,258) (6,739)
Profit before tax of discontinued operations 184 193
Tax 16 (93)
--------------------------------------------------- --------- ---------
Profit after tax of discontinued operations 200 100
--------------------------------------------------- --------- ---------
Pre-tax result recognised on re-measurement of
assets of disposal group (1,220) -
Tax - -
--------------------------------------------------- --------- ---------
After tax result recognised on the re-measurement
of assets of disposal group (1,220) -
--------------------------------------------------- --------- ---------
(Loss)/profit for the year from discontinued
operations (1,020) 100
--------------------------------------------------- --------- ---------
Included within 1Spatial plc are expenses attributable to the
discontinued operations of Enables IT amounting to GBP166,000.
Enables IT Inc.
Enables IT Inc. was sold during the year, on 3 March 2017, to
the management of the company for deferred cash consideration of
GBP100,000 due in March 2019. Its results were as follows:
2018 2017
GBP'000 GBP'000
Revenue 137 1,738
Expenses (395) (1,813)
Loss before tax of discontinued operations (258) (75)
Tax - 8
--------------------------------------------------- --------- ---------
Loss after tax of discontinued operations (258) (67)
--------------------------------------------------- --------- ---------
Pre-tax result recognised on re-measurement of
asset of disposal group 9 (1,172)
Tax - -
--------------------------------------------------- --------- ---------
After tax result recognised on the re-measurement
of assets of disposal group 9 (1,172)
--------------------------------------------------- --------- ---------
Loss for the year from discontinued operations (249) (1,239)
--------------------------------------------------- --------- ---------
Storage Fusion
Storage Fusion Limited's trade was discontinued in December
2016. Its results were as follows:
2018 2017
GBP'000 GBP'000
Revenue - 69
Expenses (15) (1,203)
Loss before tax of discontinued operations (15) (1,134)
Tax 195 157
---------------------------------------------------- --------- ---------
Profit/(loss) after tax of discontinued operations 180 (977)
---------------------------------------------------- --------- ---------
Pre-tax result recognised on re-measurement of
assets of disposal group - (157)
Tax - -
---------------------------------------------------- --------- ---------
After tax result recognised on the re-measurement
of assets of disposal group - (157)
---------------------------------------------------- --------- ---------
Profit/(loss) for the year from discontinued
operations 180 (1,134)
---------------------------------------------------- --------- ---------
Avisen UK Limited was sold on the 2 December 2016. The loss for
the year from the discontinued operation
is GBPnil (2017: GBP1.169m - loss).
10. Trade and other payables
Current
2018 2017
GBP'000 GBP'000
Trade payables 1,437 1,824
Other taxation and social security 2,055 2,350
Other payables 552 566
Accrued liabilities 631 1,254
Deferred income 4,328 6,078
9,003 12,072
------------------------------------ --------- ---------
The Directors consider that the book value of trade payables,
taxation, other payables, accrued liabilities and deferred income
approximates to their fair value at the reporting date.
11. Provisions
Provision
for long-term Restructuring
contracts provision Total
GBP'000 GBP'000 GBP'000
At 1 February 2017 119 123 242
Additional provision
in the year - 105 105
Amounts utilised during
the year (108) (80) (188)
Transferred to liabilities
of discontinued operations
held for sale (11) - (11)
Exchange difference - - -
----------------------------- --------------- -------------- ---------
At 31 January 2018 - 148 148
----------------------------- --------------- -------------- ---------
Current - 148 148
Non-current - - -
----------------------------- --------------- -------------- ---------
Provision for long-term contracts
The Group provides for obligations arising under loss-making
contracts on identification of the contract being loss-making.
Restructuring provision
The restructuring provision represents the cost of employee
terminations in the year and has been classified as a provision as
there is uncertainty over the timing and amount of settlement of
the future obligation.
12. Deferred tax
The following are the major deferred tax liabilities and assets
recognised by the Group and movements thereon during the current
year and prior reporting years.
Property, Other
plant Accelerated temporary
and equipment Tax losses tax depreciation Intangibles differences Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 February 2016 46 (1,124) 29 2,338 (167) 1,122
Acquired in the year
(under business
combination) - - - 100 - 100
Deferred tax
charge/(credit)
for year in profit
or loss - continuing
operations (11) 532 (20) (1,760) 167 (1,092)
Deferred tax charge
for year in profit
or loss - discontinuing
operations - - - 93 - 93
Deferred tax
charge/(credit)
for year in other
comprehensive income - - - 48 - 48
Disposals in the
year - 221 5 (76) - 150
---------------------------- --------------- ----------- ------------------ ------------ ------------- ---------
At 1 February 2017 35 (371) 14 743 - 421
Acquired in the year
(under business
combination) - - - 34 - 34
Deferred tax
charge/(credit)
for year in profit
or loss - continuing
operations - (55) 16 (43) - (82)
Deferred tax credit
for year in profit
or loss - discontinuing
operations (35) - - (14) - (49)
Disposals in the
year - - - (60) - (60)
At 31 January 2018 - (426) 30 660 - 264
---------------------------- --------------- ----------- ------------------ ------------ ------------- ---------
Deferred income tax assets are recognised against tax loss
carry-forwards to the extent that the realisation of the related
tax benefit through future taxable benefits is probable. The Group
did not recognise deferred tax assets of GBP2,598,000 (2017:
GBP3,893,000) in respect to losses amounting to GBP15,207,000
(2017: GBP14,214,000) that can be carried forward against future
taxable income, on the grounds that their utilisation is not
probable.
The deferred tax balance is analysed as follows:
Deferred tax Deferred tax Total
asset liability GBP'000
GBP'000 GBP'000
Recoverable within 12 months (126) - (126)
Recoverable after 12 months (300) - (300)
Settled within 12 months - 204 204
Settled after 12 months - 486 486
------------------------------ ------------- ------------- ---------
(426) 690 264
------------------------------ ------------- ------------- ---------
13. Share capital, share premium account and own shares held
2018 2017
Allotted and fully paid Number Number
Ordinary shares of 1p each 763,652,144 738,135,558
Deferred shares of 4p each 226,699,878 226,699,878
Rights of shares
Ordinary shares
The ordinary shares all rank pari passu, have the right to participate
in dividends and other distributions made by the Company, and
to receive notice of, attend and vote at every general meeting
of the Company. On liquidation, ordinary shareholders are entitled
to participate in the assets available for distribution pro rata
to the amount credited as paid up on such shares (excluding any
premium).
Deferred shares
The deferred shares do not carry voting rights or a right to
receive a dividend. The holders of deferred shares will not have
the right to receive notice of any general meeting of the Company,
nor have any right to attend, speak or vote at any such meeting.
The deferred shares will also be incapable of transfer (other
than to the Company). In addition, holders of deferred shares
will only be entitled to a payment on a return of capital or
on a winding up of the Company after each of the holders of ordinary
shares has received a payment of GBP1,000,000 in respect of each
ordinary share. Accordingly, the deferred shares will have no
economic value. No application will be made for the deferred
shares to be admitted to trading on AIM nor to trading on any
other stock or investment exchange.
Number Allotted, Share Own shares
of shares called premium held
up and account GBP'000
fully GBP'000
paid shares
GBP'000
At 1 February 2016 942,199,186 16,223 22,264 (306)
Exercise of share options - - 11 3
Issue of shares 22,636,250 226 679 -
Share issue costs - - (23) -
---------------------------- ------------ ------------- --------- -----------
At 31 January 2017 964,835,436 16,449 22,931 (303)
Issue of shares 25,516,586 256 - -
At 31 January 2018 990,352,022 16,705 22,931 (303)
---------------------------- ------------ ------------- --------- -----------
On 11 April 2017, the Group acquired the remaining 27% of
1Spatial Inc. for GBP739,000 payable in ordinary 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 GBP200,000 in ordinary shares.
5,524,862 shares were issued for the remaining interest.
Own shares
As a result of the disposal of Avisen (Pty) SA Limited on 14
July 2010, 3,500,000 shares with a nominal value of 5p each were
purchased and held in treasury. The consideration paid was
GBP306,000. On 28 November 2011, the Company sub-divided its
existing share capital of 5p shares into 1p ordinary shares and 4p
deferred shares. At 31 January 2018 the group had 3,500,000
ordinary shares at 1p and 3,500,000 deferred shares of 4p.
14. Business combinations
2018
On 11 April 2017 the Company acquired the 51% of Sitemap Ltd
that it did not already own for GBP200,000 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.
GBP'000
Value of consideration - issue of equity instruments 200
Total purchase consideration 200
------------------------------------------------------ --------
Fair values of assets and liabilities at the date
of acquisition: GBP'000
Intangible assets:
- Developed software 200
Property, plant and equipment 2
Cash and cash equivalents 15
Trade and other receivables 6
Trade and other payables (14)
Tax asset 125
Deferred tax liabilities (34)
Total identifiable net assets 300
--------------------------------------------------- --------
Gain on bargain purchase (100)
-------------------------- ------
Total consideration 200
-------------------------- ------
Satisfied by:
- Equity instruments (5,524,862 ordinary shares
of 1Spatial plc) 200
------------------------------------------------- ----
Total consideration transferred 200
Net cash inflow arising on acquisition
Cash and cash equivalents acquired 15
------------------------------------------------- ----
15
------------------------------------------------- ----
2017
On 3 February 2015 the Group entered into a share purchase
agreement to acquire 47% of US distributor 1Spatial Inc.
(previously Laser Scan Inc.), the US-based provider of spatial data
solutions for cash consideration of US$2.25m (GBP1.5m).
On 29 February 2016, the Group exercised its call option to
acquire a further 26% shareholding in 1Spatial Inc. for US$1.3m
(GBP0.9m), payable in cash, taking the Group's total holding in
1Spatial Inc. to 73%. 1Spatial Inc. is the sole distributor of
1Spatial geospatial products and solutions across the Americas,
which includes significant contracts with the US Census Bureau. The
acquisition strengthens 1Spatial's position within the US market,
which is a significant opportunity for the Group and will be a key
area of focus for the next financial year.
As part of the agreement signed on 3 February 2015, the Group
has the right to acquire the remaining 27% of 1Spatial Inc. from 1
February 2017. On 11 April 2017 the Group acquired the remaining
27% of 1Spatial Inc. for GBP739,000 (US$ 918,000) payable in shares
in accordance with the terms set out in the original share purchase
agreement.
The following table summarises the consideration paid for
1Spatial Inc., non-controlling interests and the fair value of
assets acquired and liabilities assumed at the acquisition
date:
GBP'000
Value of consideration 2,719
Total purchase consideration 2,719
------------------------------ --------
Fair values of assets and liabilities at the date
of acquisition: GBP'000
Intangible assets 250
Property, plant and equipment 36
Cash and cash equivalents 98
Trade and other receivables 363
Trade and other payables (87)
Deferred tax liabilities (100)
Total identifiable net assets 560
----------------------------------------------------- --------
- Attributable to non-controlling interests 151
- Attributable to equity shareholders of the parent 409
Goodwill 2,310
--------------------- ------
Total consideration 2,719
--------------------- ------
Satisfied by:
- Cash 2,448
- Share of associate losses (187)
- Balances due to the group waived on acquisition 458
--------------------------------------------------- ------
Total consideration transferred 2,719
--------------------------------------------------- ------
Goodwill represents approximately GBP350,000 in relation to the
assembled workforce and GBP1,960,000 in relation to synergies with
the 1Spatial business. The fair value of trade and other
receivables is GBP363,000 and includes trade receivables of
GBP254,000 which is expected to be fully collectable.
Costs relating to the acquisition of GBP31,000 have been
excluded from the consideration stated above and have been
recognised as a charge to the statement of comprehensive income
within administrative expenses.
The acquired business contributed revenues of GBP2,368,000 and a
net profit of GBP446,000 to the Group for the period since
acquisition to 31 January 2017. If the acquisition had occurred on
1 February 2016, consolidated revenue and consolidated loss for the
year ended 31 January 2017 would have been GBP22,239,000 and
GBP14,674,000 respectively.
15. Earnings/(loss) per ordinary share
Basic (loss)/profit 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
year.
2018 2017
GBP'000 GBP'000
Loss attributable to equity shareholders
of the Parent (2,458) (18,423)
Add profit attributable to non-controlling
interest - 121
Less loss from discontinued operations (1,255) (3,442)
------------------------------------------------- --------- ---------
Loss from continuing operations (1,203) (14,860)
Adjustments:
Profit attributable to non-controlling interest - 121
Income tax credit (753) (1,081)
Net finance cost 151 25
Share of net loss of associates accounted
for using the equity method - 266
Depreciation 231 297
Amortisation and impairment of intangible
assets 1,474 11,323
Share-based payment charge (538) 566
Integration, strategic and one-off costs 1,041 2,590
Adjusted EBITDA from continuing operations 403 (874)
------------------------------------------------- --------- ---------
2018 2017
Number Number
000s 000s
Basic weighted average number of ordinary
shares 758,828 728,895
Impact of share options and warrants - -
--------------------------------------------- -------- --------
Diluted weighted average number of ordinary
shares 758,828 728,895
--------------------------------------------- -------- --------
2018 2017
Pence Pence
Basic (loss)/earnings per share (0.32) (2.51)
- from continuing operations (0.15) (2.04)
- from discontinued operations (0.17) (0.47)
Diluted (loss)/earnings per share (0.32) (2.51)
- from continuing operations (0.15) (2.04)
- from discontinued operations (0.17) (0.47)
Basic adjusted EBITDA per share (0.11) (0.59)
- from continuing operations 0.06 (0.12)
- from discontinued operations (0.17) (0.47)
Diluted adjusted EBITDA per share (0.11) (0.59)
- from continuing operations 0.06 (0.12)
- from discontinued operations (0.17) (0.47)
16. Availability of annual report and financial statements
Copies of the Company's full annual report and financial
statements are expected to be posted to shareholders in due course
and, once posted, will also be made available to download from the
Company's website at www.1spatial.com.
The annual report and financial statements will also be made
available for inspection at the Company's registered office during
normal business hours on any weekday. 1Spatial plc is registered in
England and Wales with registered number 5429800. The registered
office is c/o Tennyson House, Cambridge Business Park, Cambridge,
Cambridgeshire, CB4 0WZ.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR ABMTTMBMTTLP
(END) Dow Jones Newswires
May 22, 2018 02:01 ET (06:01 GMT)
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