TIDMSPA
RNS Number : 6802P
1Spatial Plc
14 October 2019
14 October 2019
1Spatial plc (AIM: SPA)
("1Spatial", the "Group" or the "Company")
Interim Results for the six-month period ended 31 July 2019
Continued strategic progress - confident on delivering full year
results
Highlights
-- Good progress during the period, with underlying growth in
existing Solutions business, completion of strategic acquisition
Geomap-Imagis ("GI") and further investment in its strategic
cloud-based SaaS platform
-- Acquisition of GI in France for GBP6m coupled with the
signing of a significant global commercial partnership agreement
with Esri Inc. The acquisition, partly funded by an oversubscribed
placing of GBP2.9m, is immediately earnings-enhancing and
integrating well.
-- Adjusted EBITDA at GBP1.7m, an increase of 170% YoY
(including 3 months of GI post-acquisition results and IFRS 16
'Leases' adjustments)
-- Development of strategic multi-tenancy cloud-based SaaS
platform for LMDM Application Services
-- As a result we are confident of delivering full year results in line with expectations
Half-year Half-year
to to
31 July 31 July variance variance
19 18
GBPm GBPm GBPm %
Continuing operations
Revenue 10.9 8.8 2.1 23%
Gross profit 5.7 4.6 1.1 25%
Adjusted* EBITDA 1.7 0.6 1.1 170%
Operating loss (0.6) (0.7) 0.1 (14%)
Loss after tax (0.6) (0.6) 0.0 9%
Continuing operations on a like-for-like ("LFL") basis
Revenue - existing business 8.9 8.8 0.1 1%
Revenue - acquisition (3 months) 2.0 -
Total revenue 10.9 8.8
Adjusted* EBITDA - existing
business 0.8 0.6 0.2 25%
Adjusted* EBITDA - acquisition 0.5 -
(3 months)
Adjusted* EBITDA impact of 0.4 -
IFRS 16 'Leases'
Total Adjusted EBITDA 1.7 0.6
* Adjusted for strategic, integration, other irregular items and
share-based payment charge
Commenting on the results, 1Spatial CEO, Claire Milverton,
said:
"Today's results demonstrate that 1Spatial is coming to the end
of the three-year turnaround phase of our vision for the business.
We have improved visibility of recurring revenues and growth in
profits. We are improving our technology and customer service
proposition, and the acquisition of GI coupled with the significant
commercial partnership with Esri has allowed us to align our French
& Belgian business to the rest of the group, thereby executing
on one of the last major strategic issues of the turnaround.
Looking forward we believe the future is extremely exciting. We
are looking to accelerate growth, improve our customer proposition
and invest in repeatable spatial solutions. Our goal is to become a
market leader in Location Master Data Management through our
strategic cloud-based SaaS platform. The platform we have now laid
provides the Company with opportunities perfectly suited to our
heritage and innovation abilities, providing significant potential
for accelerating growth."
Financial highlights
Revenues
-- Higher-quality revenues:
o Strategic shift from perpetual revenues in prior half-year to
term revenues
o Good visibility on future results with over 43% of run-rate
revenue now recurring with both a strong pipeline and a significant
order backlog at 31 July 2019
-- Revenue growth in existing business of GBP0.1m despite
strategic shift from perpetual to term licencing. The revenue can
be split into two streams as follows:
o Core spatial Solutions revenues of GBP6.4m (72% of total
existing business revenue) increased by GBP0.5m (8%) - progress in
all geographies
o Non-core GIS (Geographic Information System) revenues of
GBP2.5m (28% of total existing business revenue) decreased by
GBP0.4m (13%) in line with management expectations, and will
transition to Solutions revenues following the acquisition of
GI
-- 3-month revenue contribution from the acquisition of GI of GBP2m
Profitability
-- Like-for-like Adjusted* EBITDA of GBP0.8m in existing
business (both Solutions and GIS) in line with management's
expectations for the half-year
-- Significant contribution from GI acquisition to adjusted*
EBITDA of GBP0.5m in the first 3 months.
-- Operating loss improved by GBP0.1m to GBP0.6m despite an
increased share-based payment charge for new share-based plans
issued in September 2018, an increase in amortisation of intangible
assets and one-off deal costs in relation to the acquisition of
GI
Cash
-- Cash and cash equivalents of GBP4m at 31 July 2019 with net cash of GBP3.3m
-- GBP2.9m (net) raised from shareholders and GBP1.5m of own
cash resources used to fund the initial acquisition payment for GI
(GBP4.4m in total)
-- Cash used in operations, including one-off deal costs for acquisition, of GBP1.8m
o Operating cash outflow of GBP1.9m before strategic,
integration and other exceptional items, reflecting our seasonal
renewal cycle and a concentration of sales being delivered/closed
in June/July with resulting cash being received in the second
half
-- In August and September 2019, EUR1.8m of bank loans were
secured to provide additional working capital during seasonal
cycles and support the integration phases of the French
acquisition
Acquisition of Geomap-Imagis group
-- Total consideration of GBP6m of which GBP4.4m paid in cash
and GBP0.6m of shares issued upon completion in May 2019. A further
GBP0.6m to be paid in cash 13 months following completion and
GBP0.4m of shares to be issued in March 2023
-- GI is a geospatial solutions company based in France and an
Esri Gold partner. GI have a number of innovative solutions built
on the Esri platform and a 4D infrastructure solution on their own
platform
-- The strategic acquisition supported the Global partner
agreement that 1Spatial signed with Esri in May 2019, which
provided a migration path for existing 1Spatial customers in France
and Belgium as well as training on the Esri platform
Operational highlights
Continued investment in technology and multi-tenancy cloud-based
SaaS platform to maintain our leading position in the industry
-- Dedicated team focussed on the development of our strategic
multi-tenancy cloud-based SaaS platform for Application Services
including Location Master Data Management (LMDM)
-- Continued development of our core solutions and consolidation
of technology suite post-acquisition of GI
Spatial Solutions business
-- Growth in Spatial Solutions business continued, driven by
strategy of "land and expand" within the three key sectors of
Government, Utilities and Transportation
-- The integration of GI is on track, with initial cost
synergies already actioned and taking effect. Additional cost and
revenue synergies have been identified and the majority of these
are expected to take effect from the start of the next financial
year
-- New significant customer wins in:
-- Government
o France- Sale of Arcopole software solution to a number of local governments for EUR0.4m
o UK and Ireland - software and services contract for GBP0.9m to
support Ireland's Property Registration Authority ("PRA") with the
digital transformation of its land records
o UK - No1 Aeronautical Information Documents Unit ("No1 AIDU")
contract for over GBP1m for software and services
-- Utilities
o UK - Contract with Enterprise Innovation Centre for
development of a proof of concept for our Traffic Management Plan
Automation solution for GBP0.4m
o France (GI*) - Sale of Telco network management solutions to
Mont-Blanc Tunnel Company for EUR0.2m
-- Transportation
o France (GI*) - Road and street management solutions to county councils for EUR0.4m
o USA - Expansion contract with Caltrans (California Department
of Transport) for US$0.4 to improve their Transport Asset
Management database
*Sales made since acquisition by 1Spatial
Post balance sheet events
-- Significant contract wins across all geographies including a
strategic win with the Greater London Authority on the London
Underground Asset Register (LUAR) pilot contract, following a
competitive tender process
-- EUR1.8m of bank loans were secured in August and September
2019 providing additional working capital during seasonal cycles
and supporting the integration phases of the French acquisition
For further information, please contact:
1Spatial plc 01223 420 414
Andrew Roberts / Claire Milverton
/ Nicole Payne
N+1 Singer 020 7496 3000
Shaun Dobson / Lauren Kettle (Corporate
Finance)
Tom Salvesen (Corporate Broking)
FTI Consulting 020 3727 1000
Dwight Burden / Alex Le May 1spatial@fticonsulting.com
1Spatial
1Spatial is a technology-enabled solutions provider supplying
vertically-focussed business applications to industry sectors where
the accuracy of location and geospatial data is key. It is a global
leader in managing geospatial data, with the goal to be a market
leader in Location Master Data Management through its cloud-based
SaaS platform.
1Spatial provides its customers with business-focussed
applications where there is a reliance on location or geospatial
data. It delivers real value by using its patented 1Integrate tool
to ensure that the underlying data is current, complete and
consistent using automated processes. This ensures that decisions
are always based on the highest quality information available.
Our global clients include national mapping and land management
agencies, utilities, transportation organisations, government
departments, emergency services, defence and census bureaus.
Today - as location data from smartphones, the Internet of
Things and great lakes of commercial Big Data increasingly drive
commercial decision-making - our technology is used by a wide range
of commercial and government organisations from utilities and
transport businesses, to facilities management companies.
1Spatial plc is AIM-listed, headquartered in Cambridge, UK, with
operations in the UK, Ireland, France, Belgium, Australia and
USA.
To find our more, visit www.1spatial.com
Half-year review
The first half has been a period of good progress for 1Spatial
as we approach the end of our three-year turnaround plan announced
in January 2017. In this plan, we set out to establish a strong
financial and operational platform for the business, evidenced
through improved cash generation, growing adjusted EBITDA and
sustainable growth.
During the period, we addressed a key strategic issue for
1Spatial, in aligning our French and Belgian businesses with the
rest of the Group as solutions providers. We entered into a new
contract with global GIS provider Esri Inc. and we acquired an
Esri-based solutions provider, Geomap-Imagis (GI). The Board
believes this deal, in addition to aligning our French and Belgian
business, represents a significant opportunity for the Group and
there are several synergistic benefits still to come through,
notwithstanding that GI made an Adjusted EBITDA profit of GBP0.5m
on a standalone basis in the three months to July 2019.
Our existing Solutions business continues to progress well with
improved underlying growth and a focus on quality of revenue with
our strategic shift from perpetual licencing to term licencing.
Our strategy is to maintain strong profitable growth within our
Solutions business in our target sectors of Government, Utilities
and Transportation, with a longer-term goal of establishing a
leading position in Location Master Data Management through our
cloud-based SaaS platform. This platform started to take shape
during the period with a dedicated team on the project and senior
management focus. We anticipate that the first component will be
available for general release by the end of the calendar year.
These half-year results demonstrate good progress against our
strategic goals, and we are confident that we will meet market
expectations for the full year.
Our strategy for growth
Innovative Spatial Solutions (77% of revenues)
1Spatial's growth strategy is to provide repeatable innovative
spatial solutions to our blue-chip, international client base with
a key focus around data management, quality and enhancement using
our patented, rules-based technology, 1Integrate.
During the period, excluding the acquisition of GI group,
Solutions revenues increased by 8% to GBP6.4m. The acquisition of
GI in the period bought GBP2m of new revenues to the Group in the
first 3 months following acquisition, which includes recurring
licence and support and maintenance solutions as well as services.
These revenues fit in our key sectors of Government, Utilities and
Transportation and include solutions built on the market leading
Esri platform.
Sectors and geographic spread
Our focus is the sale of our Geospatial solutions in three key
sectors, being Government, Utilities and Transportation, operating
across the UK & Ireland, USA, France & Belgium, and
Australia.
Partners
We have a valuable partnership network with key operators in the
Geospatial market to drive growth. Our own software architectures
are 'Open' - allowing us to integrate our solutions with Esri, Open
Source and other vendors' technology.
Following the recent acquisition of GI and the global deal with
Esri, we will be building more solutions based on the Esri
platform. Esri is the global market leader in geographic
information system (GIS) software, location intelligence, and
mapping. Building solutions on the Esri platform provides 1Spatial
with greater market reach and access as well as ensuring customers
have solutions which meet their business needs.
Technology
One of our key projects under the leadership of our Cambridge
innovation team is the development of our multi-tenancy SaaS
platform for Application Services including Location Master Data
Management (LMDM). This ensures that the 1Spatial solutions,
underpinned by our rules engine, are more accessible to our current
and potential customers. Our first component of this platform is
scheduled to be available by the end of this calendar year.
A core strategic benefit of the acquisition of GI was the chance
to acquire an additional portfolio of technology. During the GI
integration phase, we will continue to assess our technology
portfolio to understand solutions which we can take to market
globally or where there is a duplication of technology, which ones
we will retire/invest in going forwards. 1Spatial's heritage is
around management of data quality and we still seek to leverage
this position going forward within our technology suite. Where
possible we will be looking to ensure 1Integrate is part of our
solution portfolio.
During the period we have also made good progress with other key
projects including 3D, mobile and other innovative solutions in
order to drive new customer conversion and support our "land and
expand" strategy.
Geomap-Imagis - acquisition, integration and synergies
-- In early May 2019, 1Spatial France acquired GI, a geospatial
solutions company based in France and an Esri Gold partner. GI have
a number of innovative solutions built on the Esri platform and a
4D infrastructure solution on their own platform. The strategic
acquisition supported the Global partner agreement that 1Spatial
signed with Esri in May 2019, which provided a migration path for
existing 1Spatial customers in France and Belgium as well as
training on the Esri platform. GI have experience in the same
industry markets as 1Spatial (Government, Utilities and
Transportation) and have a customer base of around 500. They have a
127-strong workforce, including a flexible offshore workforce in
Tunisia. GI has strong recurring revenues and contributed GBP2m to
revenue and GBP0.5m to adjusted* EBITDA in the first three months
of ownership.
-- A full integration plan was put together for the acquisition.
This was split between Day 1 readiness, first 100 days and then 100
days to two years. The first 100 days have now been completed and
all findings and integration work has been positive. Key actions
that have taken place are - onsite introductions, team building,
onsite functional audits, customer engagement, new organisational
structure and confirmed target operating model. A key deliverable
of the combined new French business and the rest of the Group is to
develop global business applications on the Esri platform where a
market need is identified in our key markets of government,
utilities and transportation.
-- There are a number of synergies arising from the acquisition
that have already been identified and achieved and those that are
planned for the next financial year. The synergies include both
cost and revenue synergies. The revenue synergies are unlikely to
impact the business until the next financial year. Training on the
Esri platform for the 1Spatial team started in September 2019 and
the kick-off meeting for technology innovation is planned for
mid-October at the Esri Head office in Redlands, California.
The future
We now have a solid operating platform and much of the work we
now need to do will be positioning ourselves for the future
scalable growth. The majority of this will be in our key
territories and also with respect to the potential growth with our
cloud-based SaaS platform for Application Services including
LMDM.
Financial performance
Revenue
Overall, total revenues are GBP10.9m, which includes GBP2m of GI
revenues. Existing Group revenues therefore, were GBP8.9m, with
organic growth of GBP0.1m (1%) on the previous period but, as
noted, we split this into two revenue streams being Spatial
Solutions and GIS. The GIS revenues are mainly from our existing
French/Belgian business and as noted earlier in this report, we are
looking to transition these revenues to Solutions revenues through
the acquisition of GI. The split of Solution and GIS revenues is
set out below:
-- Spatial Solutions business (77% of revenue):
o Revenues have grown by GBP0.5m (8%) on the prior period taking
the revenues before GI to GBP6.4m, with progress in all
territories. In particular, the underlying revenue in our US
Solutions business* has increased by 75% from GBP0.6m to GBP1m
o This is against a backdrop of GBP0.6m of perpetual licences
included in the prior period (before the Group shifted to a term
licence model)
o GI adds a further GBP2m of revenue to the Solutions
business
-- GIS business (23% of revenue):
o Recurring revenues in our GIS business are down by GBP0.3m to
GBP1.3m, which is offset by a GBP0.2m increase in licence
revenue
* Excludes large cyclical US Census Bureau revenues
Gross profit margin
Gross profit margin for the existing business (before GI) of 53%
is slightly up on last half-year's 52% margin, as the revenue mix
this half-year has not changed significantly from the prior
half-year. GI's gross profit margin of 50% combined with the margin
of the existing business weights the overall margin at 52%. We
expect to see improvements in gross margin as the benefits of
integration with the wider Group flow through.
Adjusted* EBITDA
Total adjusted* EBITDA is GBP1.7m which includes GBP0.5m
reflecting three months' trade in GI.
On a like-for-like basis (before GBP0.4m of adjustments for IFRS
16 'Leases'), the adjusted* EBITDA of the existing business (before
GI) has increased by GBP0.2m to GBP0.8m, with GBP0.1m of this
improvement driven from additional revenues and GBP0.1m driven from
administration cost savings.
Operating loss
Total operating loss of GBP0.6m is after including GI's GBP0.1m
operating profit. Therefore, on a like-for-like basis, the
operating loss of the existing business is GBP0.7m, in line with
last half-year's operating loss of GBP0.7m.
The increase in the existing business' Adjusted* EBITDA of
GBP0.2m was offset by GBP0.2m of share-based payment charges
following the share incentive scheme established in September 2018
(there were no charges in the last half-year). In addition to this,
amortisation charges are up GBP0.1m following the business
combination accounting for GI, and one-off deal costs related to
the acquisition of GI are up GBP0.1m compared to the last
half-year.
Note that the depreciation charge of GBP0.5m includes a GBP0.4m
charge following the application of IFRS 16 'Leases', which became
effective this half-year (see note 14 for further detail) so the
residual cost of GBP0.1m in the existing business is in line with
last half-year's charge.
Cash flow
Net cash at the period end of GBP3.3m comprises cash and cash
equivalents of GBP4m and bank loans of GBP0.7m. The bank loan was
acquired on the purchase of the Geomap-Imagis Group during the
period.
During the period we completed an oversubscribed placing to
raise GBP2.9m and used GBP1.5m of our own cash resources to fund
the initial acquisition payment for GI (GBP4.4m in total). GI had
GBP2.2m of their own cash and cash equivalents so the cash position
at acquisition as stated in the statement of cash flows is
GBP2.2m.
Cash used in operations in the period of GBP1.9m represents
GBP1.2m from ordinary activities, and GBP0.7m from strategic,
integration and other exceptional items and share-based payment
charges. The outflow is in line with our half-year expectations
given the Group's seasonal working capital cycle and cashflow from
continuing operations is expected to unwind in the second half.
In addition, following the submission of our year end annual
report to January 2019, our group credit rating improved which is a
result of the strengthened balance sheet, through the August 2018
fund raise, and improved results. This is a good position for us to
be in for customer acquisition purposes going forwards.
Subsequent to the half-year in August and September 2019,
EUR1.8m of bank loans were secured on attractive terms to provide
additional working capital during seasonal cycles and support the
integration phases of the French acquisition.
Balance sheet
At 31 July 2019, net assets were up GBP3.4m, most of which is
attributable to the French acquisition: GBP5.9m of non-current
assets including goodwill and intangible assets were created on
acquisition, net of GBP0.9m deferred tax liabilities on the
acquired intangible assets. Deferred consideration of GBP1m on the
French acquisition offsets this, as does the acquired defined
benefit pension obligation of GBP0.8m.
Outlook
The start of the second half has seen continued progress against
our growth strategy and additional new contract wins in our target
sectors of Government, Utilities and Transportation. This underpins
the Group's confidence of delivery on market expectations for the
full year. We remain aware of the wider geo-political issues, but
diversified portfolio of solutions, including some market-leading
IP assets gives us confidence for the future.
Looking forward
1Spatial is ideally positioned in the Geospatial market with a
clear strategy, and a solid underlying business. We have cutting
edge, patented technology with market-leading intellectual
property, high quality staff and a blue-chip customer base, and as
such are confident in our plans for the future.
Looking ahead, we are well placed to grow a substantial,
profitable and cash-generative business over the long-term.
Condensed consolidated statement of comprehensive income
Six months ended 31 July 2019
Audited Unaudited
Unaudited * *
Six
Six months months
ended Year ended ended
31 July 31 January 31 July
2019 2019 2018
Continuing operations Note GBP'000 GBP'000 GBP'000
-------------------------------------------------------------- ----- ----------- ------------ ----------
Revenue 10,861 17,624 8,833
Cost of sales (5,138) (8,449) (4,243)
-------------------------------------------------------------- ----- ----------- ------------ ----------
Gross profit 5,723 9,175 4,590
Administrative expenses (6,363) (10,803) (5,336)
-------------------------------------------------------------- ----- ----------- ------------ ----------
(640) (1,628) (746)
Adjusted* EBITDA 1,655 1,188 613
Less: depreciation (506) (141) (78)
Less: amortisation and impairment of intangible assets 8 (974) (1,785) (890)
Less: share-based payment charge (222) (218) -
Less: strategic, integration and other irregular items 7 (593) (672) (391)
-------------------------------------------------------------- ----- ----------- ------------ ----------
Operating loss (640) (1,628) (746)
Finance income 36 8 18
Finance cost (62) (199) (98)
-------------------------------------------------------------- ----- ----------- ------------ ----------
Net finance cost (26) (191) (80)
Loss before tax (666) (1,819) (826)
Income tax credit 40 389 254
-------------------------------------------------------------- ----- ----------- ------------ ----------
Loss for the period from continuing operations (626) (1,430) (572)
Discontinued operations
Loss for the year from discontinued operations (attributable
to equity holders of the company) - (270) (266)
-------------------------------------------------------------- ----- ----------- ------------ ----------
Loss for the period attributable to:
Equity shareholders of the parent (626) (1,700) (838)
(626) (1,700) (838)
============================================================== ===== =========== ============ ==========
Other comprehensive loss
Items that may subsequently be reclassified
to profit or loss:
Exchange differences on translating foreign operations 358 80 (21)
Other comprehensive profit/(loss) for the period,
net of tax 358 80 (21)
============================================================== ===== =========== ============ ==========
Total comprehensive loss for the period (268) (1,620) (859)
============================================================== ===== =========== ============ ==========
Total comprehensive loss attributable to:
Equity shareholders of the parent (268) (1,620) (859)
(268) (1,620) (859)
============================================================== ===== =========== ============ ==========
Total comprehensive loss attributable
to equity shareholders of the Parent
arises from:
Continuing operations (268) (1,350) (593)
Discontinued operations - (270) (266)
(268) (1,620) (859)
============================================================== ===== =========== ============ ==========
* Not adjusted for the impact of IFRS 16: 'Leases', adopted for the first time
in the six months ended 31 July 2019 (note 14).
Loss per ordinary share from continuing and discontinued operations
attributable to the owners of the parent during the year (expressed
in pence per ordinary share):
Basic loss per share 4 (0.60) (1.97) (1.10)
From continuing operations (0.60) (1.65) (0.75)
From discontinued operations (0.00) (0.31) (0.35)
Diluted loss per share 4 (0.60) (1.97) (1.10)
From continuing operations (0.60) (1.65) (0.75)
From discontinued operations (0.00) (0.31) (0.35)
* Adjusted for strategic, integration and other irregular items
(note 7) and share-based payment.
Condensed consolidated statement of financial position
As at 31 July 2019
Audited Unaudited
Unaudited * *
As at As at As at
31 July 31 January 31 July
2019 2019 2018
-------------------------------------- ----- ---------- ------------ ----------
Note GBP'000 GBP'000 GBP'000
-------------------------------------- ----- ---------- ------------ ----------
Assets
Non-current assets
Intangible assets including goodwill 8 16,331 10,194 10,234
Property, plant and equipment 442 285 304
Right-of-use assets 14 3,365 - -
Total non-current assets 20,138 10,479 10,538
-------------------------------------- ----- ---------- ------------ ----------
Current assets
Trade and other receivables 9 9,431 4,998 5,443
Current income tax receivable 156 125 200
Cash and cash equivalents 4,001 6,358 734
-------------------------------------- ----- ---------- ------------ ----------
Total current assets 13,588 11,481 6,377
-------------------------------------- ----- ---------- ------------ ----------
Total assets 33,726 21,960 16,915
-------------------------------------- ----- ---------- ------------ ----------
Liabilities
Current liabilities
Bank borrowings (732) - (2,188)
Lease liabilities 14 (931) - -
Trade and other payables 10 (9,641) (7,901) (8,108)
Deferred consideration 12 (613) - -
Current income tax liabilities - - (32)
Provisions (81) - (6)
Total current liabilities (11,998) (7,901) (10,334)
-------------------------------------- ----- ---------- ------------ ----------
Non-current liabilities
Lease liabilities 14 (2,432) - -
Deferred consideration 12 (380) - -
Defined benefit pension obligation (1,504) (677) (645)
Deferred tax (836) (192) (233)
Total non-current liabilities (5,152) (869) (878)
-------------------------------------- ----- ---------- ------------ ----------
Total liabilities (17,150) (8,770) (11,212)
Net assets 16,576 13,190 5,703
====================================== ===== ========== ============ ==========
Share capital and reserves
Share capital 11 20,150 18,971 16,705
Share premium account 30,479 28,661 22,931
Own shares held (303) (303) (303)
Equity-settled employee benefits
reserve 3,156 2,934 2,716
Merger reserve 16,465 16,030 16,030
Reverse acquisition reserve (11,584) (11,584) (11,584)
Currency translation reserve 662 304 203
Accumulated losses (41,972) (41,346) (40,518)
Purchase of non-controlling interest
reserves (477) (477) (477)
-------------------------------------- ----- ---------- ------------ ----------
Equity attributable to shareholders
of the parent company 16,576 13,190 5,703
-------------------------------------- ----- ---------- ------------ ----------
Total equity 16,576 13,190 5,703
====================================== ===== ========== ============ ==========
* Not adjusted for the impact of IFRS 16: 'Leases', adopted
for the first time in the six months ended 31 July 2019 (note
14).
Condensed
consolidated
statement
of changes in
equity
Period ended
31 July 2019
Purchase
Equity-settled of
Share Own employee Reverse Currency non-controlling Non-
Share premium shares benefits Merger acquisition translation interest Accumulated Total controlling Total
GBP'000 capital account held reserve reserve reserve reserve reserve losses * interest equity
Balance at 1
February 2018 16,705 22,931 (303) 2,716 16,030 (11,584) 224 (477) (39,452) 6,790 - 6,790
--------------- -------- -------- ------- --------------- -------- ------------ ------------ ---------------- ------------ -------- ------------- --------
Adjustment on
initial
application
of IFRS 15
'Revenue from
contracts
with
customers' (194) (194) (194)
--------------- -------- -------- ------- --------------- -------- ------------ ------------ ---------------- ------------ -------- ------------- --------
Balance at 31
January 2018 16,705 22,931 (303) 2,716 16,030 (11,584) 224 (477) (39,646) 6,596 - 6,596
--------------- -------- -------- ------- --------------- -------- ------------ ------------ ---------------- ------------ -------- ------------- --------
Comprehensive
income/(loss)
Loss for the
year - - - - - - - - (1,700) (1,700) - (1,700)
Other
comprehensive
(loss)/income
Exchange
differences
on
translating
foreign
operations - - - - - - 80 - - 80 - 80
Total other
comprehensive
income - - - - - - 80 - - 80 - 80
--------------- -------- -------- ------- --------------- -------- ------------ ------------ ---------------- ------------ -------- ------------- --------
Total
comprehensive
(loss)/income - - - - - - 80 - (1,700) (1,620) - (1,620)
--------------- -------- -------- ------- --------------- -------- ------------ ------------ ---------------- ------------ -------- ------------- --------
Transactions
with owners
recognised
directly in
equity
Issue of share
capital, net
of share
issue costs 2,266 5,730 - - - - - - - 7,996 - 7,996
Recognition of
share-based
payments - - - 218 - - - - - 218 - 218
--------------- -------- -------- ------- --------------- -------- ------------ ------------ ---------------- ------------ -------- ------------- --------
2,266 5,730 - 218 - - - - - 8,214 - 8,214
--------------- -------- -------- ------- --------------- -------- ------------ ------------ ---------------- ------------ -------- ------------- --------
Balance at
31 January
2019
(Audited) 18,971 28,661 (303) 2,934 16,030 (11,584) 304 (477) (41,346) 13,190 - 13,190
=============== ======== ======== ======= =============== ======== ============ ============ ================ ============ ======== ============= ========
Comprehensive
loss
Loss for the
period - - - - - - - - (626) (626) - (626)
Other
comprehensive
income
Exchange
differences
on
translating
foreign
operations - - - - - - 358 - - 358 - 358
--------------- -------- -------- ------- --------------- -------- ------------ ------------ ---------------- ------------ -------- ------------- --------
Total other
comprehensive
income - - - - - - 358 - - 358 - 358
--------------- -------- -------- ------- --------------- -------- ------------ ------------ ---------------- ------------ -------- ------------- --------
Total
comprehensive
(loss)/income - - - - - - 358 - (626) (268) - (268)
--------------- -------- -------- ------- --------------- -------- ------------ ------------ ---------------- ------------ -------- ------------- --------
Transactions
with owners
recognised
directly in
equity
--------------- -------- -------- ------- --------------- -------- ------------ ------------ ---------------- ------------ -------- ------------- --------
Issue of share
capital 1,179 1,818 - - 435 - - - - 3,432 - 3,432
Recognition of
share-based
payments - - - 222 - - - - - 222 - 222
--------------- -------- -------- ------- --------------- -------- ------------ ------------ ---------------- ------------ -------- ------------- --------
1,179 1,818 - 222 435 - - - - 3,654 - 3,654
--------------- -------- -------- ------- --------------- -------- ------------ ------------ ---------------- ------------ -------- ------------- --------
Balance at
31 July 2019
(Unaudited) 20,150 30,479 (303) 3,156 16,465 (11,584) 662 (477) (41,972) 16,576 - 16,576
=============== ======== ======== ======= =============== ======== ============ ============ ================ ============ ======== ============= ========
* Total equity attributable to the equity shareholders of the
parent.
Condensed consolidated statement of changes in equity
Period ended 31 July 2018
Purchase
Equity-settled of
Share Own employee Reverse Currency non-controlling Non-
Share premium shares benefits Merger acquisition translation interest Accumulated Total controlling Total
GBP'000 capital account held reserve reserve reserve reserve reserve losses * interest equity
Balance at 1
February 2018 16,705 22,931 (303) 2,716 16,030 (11,584) 224 (477) (39,452) 6,790 - 6,790
--------------- --------- --------- -------- --------------- --------- ------------ ------------ ----------------- ------------ -------- ------------- ---------
Change in
accounting
policy (228) (228) (228)
--------------- --------- --------- -------- --------------- --------- ------------ ------------ ----------------- ------------ -------- ------------- ---------
Restated total
equity as
at 1 February
18 16,705 22,931 (303) 2,716 16,030 (11,584) 224 (477) (39,680) 6,562 - 6,562
--------------- --------- --------- -------- --------------- --------- ------------ ------------ ----------------- ------------ -------- ------------- ---------
Comprehensive
income/(loss)
Loss for the
period - - - - - - - - (838) (838) - (838)
Other
comprehensive
income/(loss)
Exchange
differences
on
translating
foreign
operations - - - - - - (21) - - (21) - (21)
--------------- --------- --------- -------- --------------- --------- ------------ ------------ ----------------- ------------ -------- ------------- ---------
Total other
comprehensive
income - - - - - - (21) - - (21) - (21)
--------------- --------- --------- -------- --------------- --------- ------------ ------------ ----------------- ------------ -------- ------------- ---------
Total
comprehensive
(loss) - - - - - - (21) - (838) (859) - (859)
--------------- --------- --------- -------- --------------- --------- ------------ ------------ ----------------- ------------ -------- ------------- ---------
Balance at 31
July 2018
(Unaudited) 16,705 22,931 (303) 2,716 16,030 (11,584) 203 (477) (40,518) 5,703 - 5,703
=============== ========= ========= ======== =============== ========= ============ ============ ================= ============ ======== ============= =========
* Total equity attributable to the equity shareholders of the
parent.
Condensed consolidated statement of cash flows
Period ended 31 July 2019
Audited Unaudited
Unaudited * *
31 July 31 January 31 July
2019 2019 2018
Note GBP'000 GBP'000 GBP'000
---------------------------------------- ------ ---------- ----------- ----------
Cash flows from operating activities
Cash used in operations a) (1,927) (749) (1,278)
Interest received - 24 1
Interest paid (62) (199) (101)
Tax received 149 410 221
Net cash used in operating activities (1,840) (514) (1,157)
------------------------------------------------ ---------- ----------- ----------
Cash flows from investing activities
Acquisition of subsidiaries (net (2,151) - -
of cash acquired)
Purchase of property, plant and
equipment (70) (94) (43)
Expenditure on product development
and intellectual property capitalised (874) (1,300) (547)
Net cash used in investing activities (3,095) (1,394) (590)
------------------------------------------------ ---------- ----------- ----------
Cash flows from financing activities
Repayment of obligations under - -
leases (431)
Net proceeds of share issue 2,915 7,996 -
Net cash generated from financing
activities 2,484 7,996 -
------------------------------------------------ ---------- ----------- ----------
Net (decrease)/increase in cash
and cash equivalents (2,451) 6,088 (1,747)
Cash and cash equivalents at start
of period 6,358 268 268
Effects of foreign exchange on
cash and cash equivalents 94 2 25
Cash and cash equivalents at end
of period 4,001 6,358 (1,454)
------------------------------------------------ ---------- ----------- ----------
* Not adjusted for the impact of IFRS 16: 'Leases', adopted for
the first time in the six months ended 31 July 2019 (note 14).
Notes to the condensed consolidated statement of cash flows
a) Cash used in operations
Unaudited Audited Unaudited
As at 31 As at
As at January 31 July
31 July 2019 2019 2018
GBP'000 GBP'000 GBP'000
---------------------------------------- -------------- --------- ----------
Loss before tax including discontinued
operations (666) (2,085) (1,092)
Adjustments for:
Net finance cost 62 175 100
Depreciation 506 141 78
Amortisation and impairment 974 1,785 890
Share-based payment (credit)/charge 222 218 -
(Increase)/Decrease in trade and
other receivables (1,366) (184) (531)
(Increase)/Decrease in trade and
other payables (1,498) (656) (517)
Increase/(Decrease) in provisions 38 (148) (142)
Increase in defined benefit pension - 44 -
obligation
Net foreign exchange movement (199) (39) (64)
Cash used in operations (1,927) (749) (1,278)
---------------------------------------- -------------- --------- ----------
b) Reconciliation of net cash flow to movement in net funds
Unaudited Audited Unaudited
As at 31 As at
As at January 31 July
31 July 2019 2019 2018
GBP'000 GBP'000 GBP'000
---------------------------------------- -------------- --------- ----------
(Decrease)/Increase in cash in the
period (2,451) 6,088 (1,747)
---------------------------------------- -------------- --------- ----------
Changes resulting from cash flows (2,451) 6,088 (1,747)
Loans taken on, on acquisition of (732) - -
subsidiary
Effect of foreign exchange 94 2 25
---------------------------------------- -------------- --------- ----------
Change in net funds (3,089) 6,090 (1,722)
Net funds at beginning of period 6,358 268 268
----------------------------------------
Net funds at end of period 3,269 6,358 (1,454)
---------------------------------------- -------------- --------- ----------
Analysis of net funds
Cash and cash equivalents classified
as:
Current assets 4,001 6,358 734
Bank and other loans (732) - (2,188)
Net funds at end of period 3,269 6,358 (1,454)
---------------------------------------- -------------- --------- ----------
Notes to the Interim Financial Statements
1. Principal activity
1Spatial plc is a public limited company which is listed on the
AIM London Stock Exchange and is incorporated and domiciled in the
UK. The address of the registered office is Tennyson House,
Cambridge Business Park, Cowley Road, Cambridge, CB4 0WZ. The
registered number of the Company is 5429800.
The principal activity of the Group is the development and sale
of IT software along with related consultancy and support. The
principal activity of the Company is that of a parent holding
company which manages the Group's strategic direction and
underlying subsidiaries.
2. Basis of preparation
The condensed consolidated interim financial information for the
six months ended 31 July 2019, has been prepared in accordance with
the accounting policies that are expected to be adopted in the
Group's full financial statements for the year ended 31 January
2020 and are not expected to be significantly different to those
set out in the Group's audited financial statements for the year
ended 31 January 2019, except for the adoption of IFRS 16 'Leases'
which became effective in the half-year ended 31 July 2019 (see
note 14).
The financial information for the half-years ended 31 July 2019
and 31 July 2018 is neither audited nor reviewed and does not
constitute statutory financial statements within the meaning of
section 434(3) of the Companies Act 2006 for 1Spatial plc or for
any of the entities comprising the 1Spatial Group. Statutory
financial statements for the preceding financial year ended 31
January 2019 were filed with the Registrar and included an
unqualified auditors' report.
After making enquiries, the Directors have a reasonable
expectation that the Company and the Group have adequate resources
to continue in operational existence for the foreseeable future.
Accordingly, they continue to adopt the going concern basis in
preparing the half-yearly condensed consolidated financial
statements.
3. Taxation
The tax expense on the result for the six months ended 31 July
2019 is based on the estimated tax rates in the jurisdictions in
which the Group operates, for the year ending 31 January 2020.
4. Loss per share
Basic loss per share is calculated by dividing the loss
attributable to equity holders of the Company by the weighted
average number of ordinary shares in issue during the period.
Unaudited Audited Unaudited
As at As at As at
31 July 31 January 31 July
2019 2019 2018
GBP'000 GBP'000 GBP'000
----------------------------------------- ---------- ------------ ----------
Loss attributable to equity holders
of the Parent (626) (1,700) (838)
Less: Loss from discontinued operations - (270) (266)
----------------------------------------- ---------- ------------ ----------
Loss from continuing operations (626) (1,430) (572)
Adjustments:
Income tax credit (9) (389) (200)
Deferred tax credit (31) - (54)
Net finance cost 26 191 80
Depreciation 506 141 78
Amortisation and impairment of
intangible assets 974 1,785 890
Share-based payment charge 222 218 -
Strategic, integration and other
irregular items 593 672 391
----------------------------------------- ---------- ------------ ----------
Adjusted EBITDA from continuing
operations 1,655 1,188 613
----------------------------------------- ---------- ------------ ----------
Number Number Number
000s 000s 000s
----------------------------------------- ---------- ------------ ----------
Basic and Diluted weighted average
number of ordinary shares 104,332 86,425 76,365
----------------------------------------- ---------- ------------ ----------
Unaudited Audited Unaudited
As at As at As at
31 July 31 January 31 July
2019 2019 2018
Pence Pence pence
------------------------------------------ ---------- ------------ ----------
Basic loss per share (0.60) (1.97) (1.10)
* from continuing operations (0.60) (1.65) (0.75)
* from discontinued operations (0.00) (0.31) (0.35)
------------------------------------------ ---------- ------------ ----------
Diluted loss per share (0.60) (1.97) (1.10)
* from continuing operations (0.60) (1.65) (0.75)
* from discontinued operations (0.00) (0.31) (0.35)
------------------------------------------ ---------- ------------ ----------
Basic adjusted EBITDA per share 1.59 1.06 0.45
* from continuing operations 1.59 1.37 0.80
* from discontinued operations 0.00 (0.31) (0.35)
------------------------------------------ ---------- ------------ ----------
Diluted adjusted EBITDA per share 1.59 1.06 0.45
* from continuing operations 1.59 1.37 0.80
* from discontinued operations 0.00 (0.31) (0.35)
------------------------------------------ ---------- ------------ ----------
The H1 FY19 EPS figures have been re-presented to reflect the
share consolidation which occurred in August 2018. As the option
awards are anti-dilutive, they have been excluded from the
calculation of diluted weighted average number of ordinary
shares.
5. Dividends
No dividend is proposed for the six months ended 31 July 2019
(31 January 2019: nil; 31 July 2018: nil).
6. Segmental information
Central IT Managed
costs Geospatial Services Total
31 July 2019 GBP'000 GBP'000 GBP'000 GBP'000
Revenue - 10,861 - 10,861
Cost of sales - (5,138) - (5,138)
--------------------------------------- --------- ----------- ----------- ---------
Gross profit - 5,723 - 5,723
Administrative expenses (975) (5,388) - (6,363)
Adjusted EBITDA (620) 2,275 - 1,655
Less: depreciation - (506) - (506)
Less: amortisation and impairment
of intangible assets - (974) - (974)
Less: share-based payment charge (65) (157) - (222)
Less: strategic, integration
and other irregular items (290) (303) - (593)
--------------------------------------- --------- ----------- ----------- ---------
Total operating (loss)/profit (975) 335 - (640)
Finance income 3 33 - 36
Finance cost (2) (60) - (62)
--------------------------------------- --------- ----------- ----------- ---------
Net finance (cost) / income 1 (27) - (26)
(Loss)/profit before tax (974) 308 - (666)
Tax - 40 - 40
(Loss)/profit for the period
from continuing operations (974) 348 - (626)
Loss for the period from discontinued - - - -
operations
--------------------------------------- --------- ----------- ----------- ---------
(Loss)/profit for the period (974) 348 - (626)
--------------------------------------- --------- ----------- ----------- ---------
Central IT Managed
costs Geospatial Services Total
31 January 2019 GBP'000 GBP'000 GBP'000 GBP'000
Revenue - 17,624 - 17,624
Cost of sales - (8,449) - (8,449)
--------------------------------------- --------- ----------- ----------- ---------
Gross profit - 9,175 - 9,175
Administrative expenses (1,971) (8,829) (3) (10,803)
Adjusted EBITDA (1,460) 2,651 (3) 1,188
Less: depreciation - (141) - (141)
Less: amortisation and impairment
of intangible assets - (1,785) - (1,785)
Less: share-based payment charge (53) (165) - (218)
Less: strategic, integration
and other irregular items (458) (214) - (672)
--------------------------------------- --------- ----------- ----------- ---------
Total operating (loss)/profit (1,971) 346 (3) (1,628)
Finance income 4 4 - 8
Finance cost (122) (77) - (199)
--------------------------------------- --------- ----------- ----------- ---------
Net finance cost (118) (73) - (191)
(Loss)/profit before tax (2,089) 273 (3) (1,819)
Tax - 387 2 389
(Loss)/profit for the period
from continuing operations (2,089) 660 (1) (1,430)
Loss for the period from discontinued
operations (163) - (107) (270)
--------------------------------------- --------- ----------- ----------- ---------
(Loss)/profit for the period (2,252) 660 (108) (1,700)
--------------------------------------- --------- ----------- ----------- ---------
6. Segmental information (continued)
Central IT Managed
costs Geospatial Services Total
31 July 2018 GBP'000 GBP'000 GBP'000 GBP'000
Revenue - 8,833 - 8,833
Cost of sales - (4,243) - (4,243)
--------------------------------------- --------- ----------- ----------- ---------
Gross profit - 4,590 4,590
Administrative expenses (1,040) (4,296) - (5,336)
-
--------------------------------------- --------- ----------- ----------- ---------
Adjusted EBITDA (773) 1,386 - 613
Less: depreciation - (78) - (78)
Less: amortisation and impairment
of intangible assets - (890) - (890)
Less: share-based payment charge - - - -
Less: strategic, integration
and other irregular items (267) (124) - (391)
--------------------------------------- --------- ----------- ----------- ---------
Total operating (loss)/profit (1,040) 294 - (746)
Finance income - 18 - 18
Finance cost (87) (11) - (98)
--------------------------------------- --------- ----------- ----------- ---------
Net finance (cost) / income (87) 7 - (80)
(Loss)/profit before tax (1,127) 301 - (826)
Tax - 254 - 254
(Loss)/profit for the period
from continuing operations (1,127) 555 - (572)
Loss for the period from discontinued
operations - - (266) (266)
--------------------------------------- --------- ----------- ----------- ---------
(Loss)/profit for the period (1,127) 555 (266) (838)
--------------------------------------- --------- ----------- ----------- ---------
7. 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 period:
Six months Six months
ended Year ended ended
31 July 31 January 31 July
2019 2019 2018
GBP'000 GBP'000 GBP'000
---------------------------------------------- ----------- ------------ -----------
Costs associated with corporate transactions
and other strategic costs 15 332 238
Restructuring and redundancy costs - 213 153
Costs relating to the acquisition of 506 - -
the Geomap-Imagis group
Fees relating to the Employee Share Plan - 82 -
implemented in the year
Other 72 45 -
---------------------------------------------- ----------- ------------
Total 593 672 391
---------------------------------------------- ----------- ------------ -----------
8. Intangible assets including goodwill
Goodwill Brands Customers Software Development Website Intellectual Total
and related costs costs property
contracts
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 1 February
2019 16,161 232 2,843 4,421 15,012 30 66 38,765
Arising on
acquisition
(note 12) 2,316 - - 3,412 - - - 5,728
Additions - - - - 874 - - 874
Effect of foreign
exchange 327 - 77 259 288 - - 951
----------------------
At 31 July 2019 18,804 232 2,920 8,092 16,174 30 66 46,318
---------------------- --------- -------- ------------- --------- ------------ -------- ------------- --------
Accumulated
impairment
and amortisation
At 1 February
2019 11,533 165 2,754 3,850 10,232 30 7 28,571
Amortisation - 12 89 283 590 - - 974
Effect of foreign
exchange 130 - 77 59 176 - - 442
At 31 July 2019 11,663 177 2,920 4,192 10,998 30 7 29,987
---------------------- --------- -------- ------------- --------- ------------ -------- ------------- --------
Net book amount
at
31 July 2019 7,141 55 - 3,900 5,176 - 59 16,331
====================== ========= ======== ============= ========= ============ ======== ============= ========
8. Intangible assets including goodwill (continued)
Goodwill Brands Customers Software Development Website Intellectual Total
and related costs costs property
contracts
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 1 February 2018 16,008 232 2,847 4,420 13,737 30 51 37,325
Additions - - - - 1,285 - 15 1,300
Effect of foreign
exchange 153 - (4) 1 (10) - - 140
----------------------
At 31 January 2019 16,161 232 2,843 4,421 15,012 30 66 38,765
---------------------- --------- -------- ------------- --------- ------------ -------- ------------- --------
Accumulated
impairment
and amortisation
At 1 February 2018 11,511 142 2,582 3,625 8,893 30 2 26,785
Amortisation - 23 176 228 1,353 - 5 1,785
Effect of foreign
exchange 22 - (4) (3) (14) - - 1
At 31 January 2019 11,533 165 2,754 3,850 10,232 30 7 28,571
---------------------- --------- -------- ------------- --------- ------------ -------- ------------- --------
Net book amount
at
31 January 2019 4,628 67 89 571 4,780 - 59 10,194
====================== ========= ======== ============= ========= ============ ======== ============= ========
9. Trade and other receivables
As at As at
31 July 31 January
2019 2019
Current GBP'000 GBP'000
----------------------------------------- --------- ------------
Trade receivables 4,634 2,545
Less: provision for impairment of trade
receivables - (13)
----------------------------------------- --------- ------------
4,634 2,532
Other taxes and social security 168 102
Other receivables 1,739 1,106
Prepayments and accrued income 2,890 1,258
----------------------------------------- --------- ------------
9,431 4,998
----------------------------------------- --------- ------------
10. Trade and other payables
As at As at
31 July 31 January
2019 2019
Current GBP'000 GBP'000
------------------------------------ --------- ------------
Trade payables 2,295 1,439
Other taxation and social security 2,571 1,766
Other payables 498 441
Accrued liabilities 455 621
Deferred income 3,822 3,634
------------------------------------ --------- ------------
9,641 7,901
------------------------------------ --------- ------------
11. Share capital
As at As at
31 July 31 January
2019 2019
GBP'000 GBP'000
---------------------------------------------- --------- ------------
Allotted, called up and fully paid
110,805,795 (Jan 2019: 99,031,889) ordinary
shares of 10p each 11,082 9,903
226,699,878 (Jan 2019: 226,699,878) deferred
shares of 4p each 9,068 9,068
---------------------------------------------- --------- ------------
20,150 18,971
---------------------------------------------- --------- ------------
12. Business combinations
On 7 May 2019, the Company entered into two share purchase
agreements (each a "SPA") to acquire the entire issued share
capital of Geomap-Imagis Participations ("Geomap-Imagis") (the
"Acquisition"), for a total consideration of EUR7.0m (the
"Consideration").
The first SPA, between 1Spatial plc, its wholly owned subsidiary
1Spatial France SAS ("1Spatial France"), and certain individual
shareholders (the "Majority Vendors"), relates to 80 per cent. of
the voting rights of Geomap-Imagis (the "Majority SPA") and the
second SPA, between 1Spatial France and Esri France, relates to the
remaining 20 per cent. of the voting rights of Geomap-Imagis (the
"Esri SPA"). The SPAs have been entered into concurrently and are
inter-conditional.
Under the terms of the Majority SPA, the Group shall pay to the
Majority Vendors total consideration of EUR5,600,136, of which
EUR4,433,137 is to be satisfied in cash (the "Majority Cash
Consideration") by 1Spatial France with the balance of EUR1,166,999
to be satisfied by the issue by 1Spatial plc of new ordinary shares
in the capital of the Company (the "Consideration Shares").
Of the Majority Cash Consideration, EUR4,024,135 is to be paid
by 1Spatial France to the Majority Vendors immediately upon
completion of the Acquisition ("Completion"), with the balance of
EUR409,002 to be held in escrow until the first anniversary of
Completion.
Of the consideration to be satisfied by the issue of the
Consideration Shares, EUR726,459 was satisfied immediately upon
Completion and the balance of EUR440,540 will be satisfied on 30
March 2023. Accordingly, the Company has issued, conditional on
Completion, 1,902,686 new ordinary shares (the "Initial
Consideration Shares") at an effective price of 32.68 pence per
Initial Consideration Share. The Initial Consideration Shares are
subject to a lock up obligation until 31 December 2021.
Under the terms of the Esri SPA, 1Spatial France shall pay cash
consideration of EUR1.4 million; half upon Completion (the "First
Instalment") and half no later than 13 months following the
Completion date (the "Second Instalment"). 1Spatial has granted a
guarantee to Esri France to secure the payment of the Second
Instalment.
12. Business combinations (continued)
Alongside and in conjunction with the Acquisition, 1Spatial
France and 1Spatial Belgium ("1Spatial Europe") have entered into a
new partnership agreement with Esri Inc. ("Esri") (the "Partnership
Agreement"). The combination of the Partnership Agreement and
Acquisition is expected to significantly benefit the Company's
existing European customers in providing them with access to Esri's
market leading global GIS platform.
In addition to being immediately earnings enhancing, the
Acquisition offers a combination of specialised vertical business
applications and significant know-how in the Group's target
sectors, which can be delivered through the combination of 1Spatial
Europe and Geomap-Imagis.
GBP'000
Majority Cash Consideration - on completion (EUR4,433,137) 3,823
Initial Consideration Shares - on completion (EUR726,459) 626
Deferred Consideration Shares - issued on 30 March
2023 (EUR440,540) 380
Majority SPA total consideration 4,829
Cash Consideration - First Instalment - on completion
(EUR700,000) 604
Deferred cash consideration - Second Instalment 13
months following completion (EUR711,375) 613
Esri SPA total consideration 1,217
Total purchase consideration 6,046
------------------------------------------------------------ --------
Provisional fair values of assets and liabilities
at the date of acquisition: GBP'000
Intangible assets * 3,412
Property, plant and equipment 147
Indemnification asset 154
Right of use asset 805
Cash and cash equivalents 2,276
Trade and other receivables 2,831
Tax asset 167
Trade and other payables (3,109)
Borrowings (732)
Lease liability (805)
Deferred tax liability (665)
Defined benefit pension obligation (751)
Total identifiable net assets 3,730
--------------------------------------------------- --------
Goodwill * 2,316
--------------------- ------
Total consideration 6,046
--------------------- ------
Satisfied by:
- Majority Cash Consideration - on completion (EUR4,433,137) 3,823
- Cash Consideration - First Instalment - on completion
(EUR700,000) 604
- Deferred cash consideration - Second Instalment
13 months following completion (EUR711,375) 613
- Equity instruments - on completion (1,902,686 ordinary
shares of 1Spatial plc) 626
- Equity instruments (ordinary shares of 1Spatial
plc to the value of EUR440,540) 380
-------------------------------------------------------------- --------
Total consideration transferred 6,046
-------------------------------------------------------------- --------
Cash consideration on completion 4,427
Less: cash and cash equivalents acquired (2,276)
Net cash outflow arising on completion 2,151
Deferred cash consideration 613
Net cash purchase consideration 2,764
-------------------------------------------------------------- --------
* This represents the provisional accounting for the split
between intangible assets and goodwill which will be finalised in
the annual report for the year ending 31 January 2020.
13. Post balance sheet events
In August and September 2019, EUR1.8m of bank loans were secured
to support the integration phases of the French acquisition and
provide additional working capital during seasonal cycles.
Integration loan:
On 19 August 2019, 1Spatial France SAS secured a EUR1,000,000
loan from Le Credit Lyonnais (LCL) to support the integration
phases of the French acquisition. The loan is for a duration of 4
years and 9 months, at a fixed rate of interest of 1.3% per year
(increased to 1.89% including insurance and warranty fees) and paid
quarterly. Funds can be withdrawn up until 16 May 2020 and any
funds not withdrawn by that date will be lost. As such, the total
loan may not be fully utilised. 1Spatial France SAS has not drawn
down any funds on this loan to date. Repayment of the loan will
commence from 16 August 2020, with 16 quarterly instalments ending
on 16 May 2024, assuming withdrawals are made.
Innovation loan:
On 10 September 2019, 1Spatial France SAS secured a EUR800,000
loan (less a EUR40,000 guarantee and EUR3,200 administrative costs)
from French Public Investment Bank, BPI France, to provide
additional working capital during seasonal cycles. The loan is for
a duration of 7 years, at a fixed rate of interest of 2.82% per
year. Quarterly interest payments are required from December 2019
up until December 2021. From 30 December 2021 until September 2026,
20 quarterly instalments of EUR40,000 will be repaid along with the
interest, with the final payment scheduled for 30 September
2026.
14. Changes in accounting policies
IFRS 16 'Leases' is effective for accounting periods beginning
on or after 1 February 2019 and replaces IAS 17 'Leases'. It
eliminates the classification of leases as either operating leases
or finance leases and, instead, introduces a single lessee
accounting model. The adoption of IFRS 16 resulted in the Group
recognising lease liabilities, and corresponding 'Right-of-use'
assets for arrangements that were previously classified as
operating leases.
The Group's principal lease arrangements are for property, most
notably a portfolio of office premises, and for a global car fleet,
utilised primarily by our sales and marketing teams. The Group has
adopted IFRS 16 using the simplified approach with the cumulative
effect of initially applying the standard as an adjustment to the
opening balance of retained earnings at 1 February 2019. The
standard permits a choice on initial adoption, on a lease-by-lease
basis, to measure the right-of-use asset at either its carrying
amount as if IFRS 16 had been applied since the commencement of the
lease, or an amount equal to the lease liability, adjusted for
accruals or prepayments. The Group has elected to measure the
right-of-use asset equal to the lease liability, with the result of
no net impact on opening retained earnings and no restatement of
prior period comparatives.
Initial adoption resulted in the recognition of right-of-use
assets of GBP3.8m and lease liabilities of GBP3.8m. The weighted
average incremental borrowing rate applied to the lease liabilities
on 1 February 2019 was 3.84%.
The Group is using one or more practical expedients on
transition to leases previously classified as operating leases,
including electing to apply a single discount rate to portfolios of
leases with similar characteristics, reliance on previous
assessments on whether arrangements contain a lease and whether
leases are onerous, excluding initial direct costs from the initial
measurement of the right-of-use asset, and using hindsight in
determining the lease term where the contract contains options to
extend or terminate the lease.
Key judgements made in calculating the initial impact of
adoption include determining the lease term where extension or
termination options exist. In such instances, all facts and
circumstances that may create an economic incentive to exercise an
extension option, or not exercise a termination option, have been
considered to determine the lease term. Extension periods (or
periods after termination options) are only included in the lease
term if the lease is reasonably certain to be extended (or not
terminated). Estimates include calculating the discount rate which
is based on the incremental borrowing rate.
The Group is applying IFRS 16's low-value and short-term
exemptions. While the IFRS 16 opening lease liability is calculated
differently from the previous operating lease commitment calculated
under the previous standard, there are no material differences
between the positions. The adoption of IFRS 16 has had no impact on
the Group's net cash flows, although a presentation change has been
reflected whereby cash outflows of GBP431k are now presented as
financing, instead of operating. Lease costs previously reported in
administrative expenses, now reported in depreciation and interest
charges result in a GBP472k benefit to adjusted EBITDA, with a
corresponding increase of GBP431k in the depreciation charge and a
GBP41k increase in the interest charge (the benefit to operating
loss is GBP41k with a corresponding increase in the interest
charge). Profit before tax, taxation and EPS have not been
significantly impacted.
Consolidated values affecting the P&L and Balance sheet from
1 February 2019 to 31 July 2019
Measurement of lease liabilities and right-of-use asset:
GBP'000
Operating lease commitments disclosed as at 31 January
2019 (840)
Add: finance lease liabilities recognised as at 31
January 2019 (2,118)
Lease liability recognised as at 31 January 2019 * (2,958)
Of which are:
Current lease liabilities (817)
Non-current lease liabilities (2,141)
Liabilities acquired on acquisition of the Geomap-Imagis
Group (852)
Lease liability recognised as at initial adoption (3,810)
Right-of-use asset recognised as at initial adoption 3,810
* This does not include the Geomap-Imagis Group's leases, as
they became part of the Group in May 2019
P&L impact for six months to 31 July 2019:
GBP'000
Depreciation charge (431)
Interest charge (41)
Foreign exchange charge (13)
Carrying amounts at 31 July 2019:
GBP'000
Right-of-use asset 3,365
Lease liability (3,363)
Split of Right-of-use asset at 31 July 2019 by type of
asset:
GBP'000
Buildings 3,089
Cars 207
Other 69
Total 3,365
Split of lease liability at 31 July 2019 by geography:
GBP'000
Europe (3,262)
USA (95)
Australia (6)
Total (3,363)
Split of lease liability at 31 July 2019 - current and
non-current:
GBP'000
Current (931)
Non-current (2,432)
Total (3,363)
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
IR DMMMGDMNGLZM
(END) Dow Jones Newswires
October 14, 2019 02:00 ET (06:00 GMT)
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