Final results for the year ended 31 January 2018

RNS Number : 7984O

1Spatial Plc

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
	£m	£m	£m	£m	£m	£m
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 £16.9m (2017: £15.1m), up £1.8m (12%)

· Revenues increased across all territories and across all revenue streams:

· licence revenues increased 73% to £2.5m

· service revenues increased 9% to £7.2m

· support & maintenance revenues increased 2% to £7.2m

· Gross profit improvement from £8.3m to £8.9m

· Increase in adjusted* EBITDA on prior year, up £1.3m to £0.4m profit (2017: £0.9m loss)

· £13.9m improvement in operating losses, from £15.7m to £1.8m

· Market-focussed development spend of £1m (2017: £3.5m)

· Increase of £1.9m in operating cash flows from £1.2m outflow to £0.7m inflow

Discontinued operations

· Loss from discontinued operations of £1.3m (2017: £3.4m loss)

All operations

· Improvement in free cash flows ** of £4.6m, from a £4.9m cash outflow in 2017 to a £0.3m cash outflow in 2018

· Loss after tax of £2.5m (2017: £18.3m)

· Impairments of continuing operations totalling £0.4m (2017: £9.4m): no impairment of goodwill (2017: £5.1m), £0.2m of acquired intangibles (software) (2017: £1.5m of customer lists and software) and £0.2m (2017: £2.8m) of capitalised development costs, net of impairment reversals of capitalised development costs of £0.5m (2017: £nil)

· Impairments of discontinued operations totalling £1.2m (2017: £1.8m): £0.5m (2017: £0.9m) of goodwill, £0.6m of acquired intangibles (customer lists and contracts) (2017: £nil), no impairment of capitalised development costs (2017: £0.9m) and £0.1m of impairments of assets held for sale (2017: £nil)

· Net funds of £0.3m (2017: £0.6m)

** 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 £1. Exercise of the Enables IT Inc. buyers' option to purchase the remaining minority interest in Enables IT Inc. in March 2018.

· £0.5m reduction to £2.5m 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 £0.8m (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 £13.9m, from £15.7m to £1.8m. The Group closed the financial year within its banking facilities with net funds of £0.3m at 31 January 2018.

The actual results for the year from continuing operations were revenues of £16.9m (2017: £15.1m), adjusted EBITDA profit of £0.4m (2017: adjusted EBITDA loss of £0.9m), an operating loss of £1.8m (2017: £15.7m), a loss from discontinued operations of £1.3m (2017: loss of £3.4m) and a loss for the year of £2.5m (2017: £18.3m). The Group generated operating cash inflows of £0.8m (2017: operating cash outflows of £0.8m).

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 £15.1m to £17m. 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 costs £m	Geospatial £m	Total £m	Central costs £m	Geospatial £m	Total £m
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
	£m		£m
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 £1.2m and third-party licence revenues up by close to 50% on the previous year at £1.3m. 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 (£1m in the current year, £3.5m 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 £0.5m (33%) to £2m, being a testament to our people, our products and the execution of our strategy.

Central costs have been pared back to £1.6m, 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 £13.9m to a £1.8m loss and adjusted EBITDA from continuing operations is £0.4m - a significant improvement on the previous year of £1.3m.

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
	£m	£m

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. £1.6m relates to amortisation (2017: £1.9m), £0.4m relates to impairment (2017: £9.4m), and £0.5m relates to impairment reversals (2017: £nil). £0.2m 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 £0.2m impairment relates to the capitalised development costs of 1Spatial Group due to there being limited sales and pipeline to support their carrying value. The £0.5m 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 £m	2017 £m
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 £1.3m 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 £0.8m (2017: £1.0m). 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 £1.4m in the year. The impact of discontinued operations that are not included in the current year balances is £1.2m. The remaining decrease in the year of £0.2m relates to £1m additions to development costs, £0.2m software arising on the acquisition of Sitemap Ltd, net of amortisation charges of £1.6m, impairment charges of £0.4m and impairment reversals of £0.5m.

Property, plant and equipment

Property, plant and equipment decreased by £0.7m in the year. The impact of discontinued operations that are not included in the current year balances is £0.3m; after these are taken into account, the remaining £0.4m decrease is due to £0.4m of depreciation charges (£0.2m of which relate to continuing operations).

Current assets

Trade and other receivables

Trade and other receivables balances are £5.5m at the year-end, a decrease of £3.4m on the prior year balance of £8.9m. The impact of discontinued operations that are not included in the current year balances is £1.6m. The remaining £1.8m decrease relates to a £1.1m decreases in trade receivables, together with a £0.7m decrease in accrued income.

Cash balance

Net funds reduced from £0.6m in the prior year to £0.3m. 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 £1.

Current liabilities

Trade and other payables balances are £9m, a decrease of £3.1m on the prior year balance of £12.1m. The impact of discontinued operations that are not included in the current year balances is £2.7m. The remaining £0.4m decrease is a £0.6m decrease in deferred income net of increases of £0.1m each in trade payables and other taxation and social security balances.

Non-current liabilities

The decrease of £0.2m 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 £0.3m 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 £2.5m with the loss for the year as noted above.

Cash flow

The year-end cash and cash equivalents position was £1.3m (2017: £1.3m). The Group had net funds of £0.3m (2017: £0.6m).

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
	£m
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 £0.1m is significantly reduced on the net cash outflow in the previous year (£4.8m). 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 (£0.9m). The Group funded this acquisition through a small fund raise of £0.9m. 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 (£0.7m) 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 £0.2m 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 £'000	2017 £'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 £'000	2017 £'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 £'000	2017 £'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 ended 31 January 2018 £'000	Share capital	Share premium account	Own shares held	Equity-settled employee benefits reserve	Merger reserve	Reverse acquisition reserve	Currency translation reserve	Purchase of non-controlling interest reserve	Accumulated losses	Total equity attributable to shareholders of the parent	Non-controlling interest	Total equity
Balance at 1 February 2016	16,223	22,264	(306)	2,688	15,347	(11,584)	(432)	-	(18,533)	25,667	-	25,667
Comprehensive (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 £23k	226	656	-	-	-	-	-	-	-	882	-	882
Recognition of share-based payments	-	-	-	566	-	-	-	-	-	566	-	566
	226	667	3	566	-	-	-	-	-	1,462	-	1,462
Transactions with non-controlling interest Non-controlling interest arising on acquisition	-	-	-	-	-	-	-	-	-	-	150	150
Balance at 31 January 2017	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 £'000	2017 £'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 £'000	2017 £'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 £'000	2017 £'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 £'000		2017 £'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 due within 1 year	Finance leases due after 1 year		Bank overdraft		Total
		£'000	£'000		£'000		£'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 (£000) 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:

31 January 2018	Central costs £'000	Geospatial £'000	Cloud £'000	Total £'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)

31 January 2018	Central costs £'000	Geospatial £'000	Cloud £'000	Total £'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.

31 January 2017	Central costs £'000	Geospatial £'000	Cloud £'000	Total £'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)

31 January 2017	Central costs £'000	Geospatial £'000	Cloud £'000	Total £'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 £'000	2017 £'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 Continuing £'000	2018 Discontinued £'000	2018 Total £'000	2017 Continuing £'000	2017 Discontinued £'000	2017 Total £'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 Continuing £'000	2018 Discontinued £'000	2018 Total £'000	2017 Continuing £'000	2017 Discontinued £'000	2017 Total £'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 Continuing £'000	2018 Discontinued £'000	2018 Total £'000	2017 Continuing £'000	2017 Discontinued £'000	2017 Total £'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 £'000	2017 £'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 £44,000 in respect of an amount owed by the Group to Sitemap Ltd.

4. Income tax charge/(credit)

	2018 £'000	2017 £'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 £'000	2017 £'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 £'000	Brands £'000	Customers and related contracts £'000	Software £'000	Development costs £'000	Website costs £'000	Intellectual property £'000	Total £'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 £37,000 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 £'000	Brands £'000	Customers and related contracts £'000	Software £'000	Development costs £'000	Website costs £'000	Intellectual property £'000	Total £'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 £4,844,000 (2017: £4,653,000) internally generated capitalised software development costs that meet the definition of an intangible asset. The amortisation charge of £1,674,000 (2017: £2,390,000) 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
Goodwill	Enables IT £'000	1Spatial £'000	1Spatial France / Belgium £'000	Total £'000	Avisen & Enables IT £'000	1Spatial £'000	1Spatial France / Belgium £'000	Total £'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 £nil and the impairment charge amounting to £480,000 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

£'000

2017

£'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 activity	Place of incorporation (or registration) and operation	Proportion of ownership interest		Proportion of voting power held
			31 January 2018	31 January 2017	31 January 2018	31 January 2017
Sitemap Ltd (Note 1)	Location-based software	United Kingdom	100%	49%	100%	49%
1Spatial Inc. (Note 2)	Location-based 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 2017	31 January 2017
	£'000	£'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 2017	31 January 2017
	£'000	£'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

Current	2018 £'000	2017 £'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 £1,961,000 (2017: £3,808,000) 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 £413,000 (2017: £1,118,000) 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 £'000	2017 £'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 £38,000 were impaired (2017: £626,000) and provided for.

The ageing of these receivables is as follows:

	2018 £'000	2017 £'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 £'000	2017 £'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 £1.257m. The Group does not hold any collateral as security.

8. Cash and cash equivalents

2018

£'000

2017

£'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 £1 (at present value).

Assets of disposal group classified as held for sale:

	2018 £'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 £226,000 cash and cash equivalents)	707
Total	1,031

Liabilities of disposal group classified as held for sale:

	2018 £'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 £'000	2017 £'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 £166,000.

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 £100,000 due in March 2019. Its results were as follows:

	2018 £'000	2017 £'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 £'000	2017 £'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 £nil (2017: £1.169m - loss).

10. Trade and other payables

Current
	2018 £'000	2017 £'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 contracts £'000	Restructuring provision £'000	Total £'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, plant and equipment £'000	Tax losses £'000	Accelerated tax depreciation £'000	Intangibles £'000	Other temporary differences £'000	Total £'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 £2,598,000 (2017: £3,893,000) in respect to losses amounting to £15,207,000 (2017: £14,214,000) 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 asset £'000	Deferred tax liability £'000	Total £'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

Allotted and fully paid

2018

Number

2017

Number

Ordinary shares of 1p each

763,652,144

738,135,558

Deferred shares of 4p each

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 £1,000,000 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 of shares	Allotted, called up and fully paid shares £'000	Share premium account £'000	Own shares held £'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 £739,000 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 £200,000 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 £306,000. 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 £200,000 in shares. The Company's investment in Sitemap to date has funded the development of a solution which locates and visualises sites which best fit commercial and residential property developer needs.

	£'000
Value of consideration - issue of equity instruments	200
Total purchase consideration	200

Fair values of assets and liabilities at the date of acquisition:	£'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 (£1.5m).

On 29 February 2016, the Group exercised its call option to acquire a further 26% shareholding in 1Spatial Inc. for US$1.3m (£0.9m), 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 £739,000 (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:

	£'000
Value of consideration	2,719
Total purchase consideration	2,719

Fair values of assets and liabilities at the date of acquisition:	£'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 £350,000 in relation to the assembled workforce and £1,960,000 in relation to synergies with the 1Spatial business. The fair value of trade and other receivables is £363,000 and includes trade receivables of £254,000 which is expected to be fully collectable.

Costs relating to the acquisition of £31,000 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 £2,368,000 and a net profit of £446,000 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 £22,239,000 and £14,674,000 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 £'000	2017 £'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 Number 000s	2017 Number 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 Pence	2017 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

Companies

1Spatial (SPA)

Monday, 20th January 2025

COMPANIES COVERED:

WG. RCH PODP

News publisher Reach surges on trading update and Wood Group makes modest gains following news of contact win, but the EV charging company Pod Point struggles as private retail market woes weigh on sales.

Full Archive

UK 100

Latest directors dealings

39 minutes ago Zigup
1 hour ago Primorus Investments
5 hours ago Optima Health
5 hours ago Seeing Machines Ltd. NPV (DI)
5 hours ago Safestore Holdings

All directors dealings today