Final Results

RNS Number : 7259I

1Spatial Plc

30 July 2012

 



30 July 2012

1Spatial plc (AIM: SPA)

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

Final results for the year ended 31 January 2012

The board of directors of 1Spatial plc (the "Board"), the AIM quoted business technology and profit improvement specialist, is pleased to announce the Company and consolidated group's (the "Group") audited final results for the year ended 31 January 2012.

Highlights

Current year

·      Revenue from continuing operations increased from £2.6m in 2011 to £5.2m in 2012

·      Improvements in adjusted* EBITDA from an adjusted EBITDA loss of £1.5m in 2011 to an adjusted EBITDA loss of £0.5m in 2012

·      Operating loss from continuing operations of £1.6m (2011: £7.8m)

·      Disposed of Inca Software in April 2011 for £7.3m

·      Acquired 1Spatial Holdings plc (''1Spatial Business'') on 28 November 2011 for £5.1m

·      Cash balance at end of January 2012 of £2.7m (2011: £0.5m)

·      In July 2011, the Group entered into a contract with Unilever to supply a global cost to serve solution for Unilever's global supply chain and customer service function. The contract comprised the sale of a perpetual software licence and the provision of services over a three year period.

*Adjusted for strategic, integration and other one-off items

Post Balance Sheet Highlights

·      In March 2012, Gartner's report on the Magic Quadrant for Storage Resource Management and SAN Management Software noted Storage Fusion as a new vendor within the segment.

·      Receipt of deferred consideration from disposal of Inca of £1.3m on 1 April 2012.

Commenting on the results announcement Marcus Hanke, CEO of 1Spatial plc, said:

"I am pleased to report improvements in the Group's results for the year ended 31 January 2012. The Board's decision to invest in the 1Spatial Group will strengthen business moving forward. The 1Spatial Group has a strong customer base in some of the world's largest National Mapping Agencies and we intend to put a strong focus on product development and the innovation of its intellectual property and offerings. 

The Board is in the process of finalising an internal review of the Group's operations and this will put the Group in a strong position to start a phase of organic growth and operating cash flow generation. I look forward to providing shareholders with further updates during the remainder of 2012."

For further information, please contact:

1Spatial plc

Marcus Hanke (CEO)/Claire Milverton (CFO)                                                                                Tel: [phone]

Strand Hanson Limited

James Harris/Paul Cocker                                                                                                                Tel: [phone]

Bishopsgate Communications                                                      

Nick Rome/Sam Allen                                                                                                                        Tel: [phone]

Chairman's Statement

The year ended 31 January 2012 has been a very progressive year and has seen much change for the Group.  With the disposal of Inca in April 2011 and the acquisition of the 1Spatial Business in November 2011, there has been a lot of focus on corporate transactions. However, despite this, there has still been some positive financial improvements within the existing businesses of both Avisen UK and Storage Fusion. 

The Board's decision to invest in the 1Spatial Business will strengthen the strategy for the business moving forward. The 1Spatial Business has a strong customer base in some of the world's largest National Mapping Agencies ("NMAs") and these relationships have been built over many years throughout the history of the company. The 1Spatial Business product manages data for many of the NMAs and this puts 1Spatial Business as a strategic partner and provider of technology in this market. 1Spatial Business will put a continued focus on product development and the innovation of its intellectual property and offerings, providing both on-premise and Cloud solutions through its recently launched 1Spatial Cloud platform.

The common focus for all companies within the Group going forward, is to provide end users of data with both assurance over its quality and insight into its significance. This is part of the 'Big Data' concept. Big Data is a term applied to data sets whose size is beyond the ability of commonly used software tools to capture, manage, and process the data. Big data has increased the demand for information management specialists and software firms specialising only in data management and analytics; this industry is several billion dollars globally and continues to grow significantly each year.

The Board has undertaken review of the Group's operations as a result of the acquisition and believes that the full benefits of this review will come into effect in the second half of the next financial year ending January 2013.

I was delighted to take up the role as non-executive Chairman of the Group following the acquisition of 1Spatial Business, and having previously served as the Chairman of 1Spatial Business, I can bring my existing knowledge and experiences to the new enlarged Board. Mark Battles, who was the previous interim non-executive Chairman, is now a non-executive Director on the Board. I believe that the new Board brings the combined balance of knowledge and relevant expertise required to take the new Group forward. Existing members of the Board are Marcus Hanke (CEO), Claire Milverton (CFO), Marcus Yeoman and Mark Battles (Non-executives).  New members of the Board from the 1Spatial Business are myself and Mike Sanderson (Director of Strategy). Nic Snape left the business in June 2012 and we thank him for his efforts over the last 10 years and wish him well in his new ventures. 

Financial position

Revenues for the year were £5.2m, which is a 100 per cent. increase on the 2011 figure of £2.6m.  Included within these revenues were two months of revenues from 1Spatial Business totalling £1.5m. 

Both the Avisen UK and 1Spatial Business made positive adjusted EBITDA contributions to the Group of £0.3m each (1Spatial Business's EBITDA for two months). The Storage Fusion business broke even for the year at an adjusted EBITDA level. The overall Group's adjusted EBITDA was a loss of £0.5m, which was a significant improvement on the prior year EBITDA loss of £1.5m. The overall adjusted EBITDA loss of £0.5m is due to head office costs which are approximately £1.1m. The Group has made no secret of the need to scale the operations to absorb the overhead costs associated with being a listed entity. With a full year's trading from 1Spatial Business and good prospects for the other businesses, covering these costs going forward should be achievable. 

The overall net loss for the year is £1.0m, which is a significant improvement on the net loss in 2011 of £7.2m.  The overall loss is partly as a result of £0.5m amortisation of intangible assets, £0.5m of strategic, integration and other one off items mainly resulting from the 1Spatial Business acquisition and integration process, and a profit on disposal of Inca Software Ltd of £0.5m.

We have a strong balance sheet at the end of the year with a £2.7m cash balance (2011: £0.5m).  Whilst we received £5.2m on the disposal of Inca in the year, we have incurred certain cash outflows required to ensure adequate support for the Unilever contract, the ongoing head office costs and deal transaction costs. Once all the strategic and reorganisation costs associated with 1Spatial Business have been finalised, we expect the ongoing trading businesses to be cash flow positive.

Strategy and reorganisation

In the last annual report, our stated strategy was to continue to grow organically and acquisitively, and to convert this growth into higher profit and improved cash flow for distribution to our shareholders; we feel we have made firm progress in this respect during the year. However, the Board believes that this cash is needed to support its next phase of growth under the 1Spatial name and will therefore not be distributing back to shareholders at this stage. As noted above, we are now under one common branding, however, we still have three trading subsidiaries, namely 1Spatial Business, Avisen UK and Storage Fusion. Taking each entity in turn:

1Spatial Business

As noted above, 1Spatial Business has a strong customer base in some of the world's largest National Mapping Agencies (NMAs), and these relationships have been built over many years.

Building on the current strong customer base, the growth strategy for the business will be to continue our focus on the NMA market along with key vertical sectors such as utilities, transport and defence. 1Spatial Business played a key role in delivering Ordnance Survey GB's Geospatial Data Management System which went live in 2011. The UK now co-chairs a UN committee of experts focussed on providing the UN with accurate geographic information in order to monitor the Millennium Development Goals, so 1Spatial is in a strong position to capitalise on a range of opportunities in the big data NMA space. In addition, the utilities are focussed on smartgrids and the installation of smart meters for which spatial data is key to management and strengthens the requirement for the 1Spatial Business offering. Given our recent success at United Utilities Group plc with a project focused on data quality, we have a strong proof point for further development into this market.

In addition, the Board is encouraged by the application of the company's Patented Oracle 3D Topology developed in conjunction with its government defence and military clients around the world and has sanctioned further market investment in this area.

As part of our revised strategy we are addressing the ways in which we can achieve growth for the business in our marketplace, leverage our brand and scale the business on a global basis. Key to this success will be a major focus on partnerships as part of the plan, so that we may leverage our technology offerings and provide more options for our customer base.  One such partnership is with Google, where we have become an Enterprise Partner and will be using Google's technology and world-class platform to amplify Big Data issues for our customers and prospects. We will continue to develop our already strong partnerships with Oracle, Trimble and ESRI.

Avisen UK

Avisen continues to provide profitability improvement services to its clients which include Tesco and Unilever.  There continues to be significant opportunities within this part of the business.

Storage Fusion

Storage Fusion continues to develop, adding clients and partners to its unique storage resource analytical software and providing insight into these organisations' complex infrastructures; the Board is confident of securing further storage vendor partnerships during the remainder of this year to significantly enhance revenue and profitability. With its Cloud enabled offering it provides a cost effective way to measure data storage usage and consumption, and with the huge growth forecast in the SAAS marketplace the Storage Fusion product is very attractive.

Conclusion and outlook

Following the internal review, the Board believes that the Group is in a strong position to start a phase of organic growth and operating cash flow generation.

Whilst the addition of the 1Spatial Business gives more scale to the business, management remains keen to review other acquisition opportunities to accelerate the growth of the business and provide more scale and synergistic opportunities.

I would also like to take this opportunity to thank the management team and all of our employees for their hard work and dedication. This has enabled us to navigate a challenging environment and strongly position 1Spatial for the future.

S Berry

Chairman

30 July 2012

1Spatial plc

Consolidated statement of comprehensive income

Year ended 31 January 2012

	Note	2012 £'000	2011 £'000
Revenue		5,228	2,631
Cost of sales		(3,373)	(1,940)
Gross profit		1,855	691
Administrative expenses		(3,454)	(8,465)
		(1,599)	(7,774)
Adjusted* EBITDA		(512)	(1,481)
Less: depreciation		(42)	(5)
Adjusted* EBITA		(554)	(1,486)
Less: amortisation and impairment of intangible assets		(505)	(4,788)
Less: strategic, integration and other one off items	3	(540)	(1,500)
Operating loss		(1,599)	(7,774)
Finance income		26	-
Finance costs		(20)	(27)
Net finance income/(cost)		6	(27)
Loss before tax		(1,593)	(7,801)
Income tax credit	4	173	159
Loss from continuing operations		(1,420)	(7,642)
Discontinued operations
(Loss)/profit from discontinued operations		(54)	458
Gain on disposal of discontinued operations	8	464	-
Loss for the year		(1,010)	(7,184)
Other comprehensive income
Exchange differences arising on translation of net assets of foreign operations		6	(61)
Gain on disposal of subsidiary undertaking	8	-	142
Other comprehensive income for the year, net of tax		6	81
Total comprehensive loss
Loss for the year		(1,010)	(7,184)
Total comprehensive loss attributable to equity shareholders of the Company		(1,004)	(7,103)
Loss per ordinary share expressed in
pence per ordinary share from continuing operations:
Basic	10	(0.57)	(3.69)
Diluted	10	(0.57)	(3.69)
Loss per ordinary share expressed in
pence per ordinary share from operations:
Basic	10	(0.59)	(3.47)
Diluted	10	(0.59)	(3.47)
*Adjusted for strategic, integration and other one off items (note 3)

1Spatial plc

Consolidated statement of financial position                                                             Registered number: 5429800

As at 31 January 2012

	Notes	2012 £'000	2011 £'000
Assets
Non-current assets
Intangible assets including goodwill	5	9,735	3,014
Property, plant and equipment		244	19
Total non-current assets (excluding assets classified as held for sale)		9,979	3,033
Current assets
Inventories		41	-
Trade and other receivables		5,551	1,042
Current income tax receivable		60	137
Cash and cash equivalents		2,734	419
Total current assets (excluding assets of disposal group classified as held for sale)		8,386	1,598
Assets of disposal group classified as held for sale	9	-	10,242
Total current assets		8,386	11,840
Total assets		18,365	14,873
Liabilities
Current liabilities
Trade and other payables		(6,018)	(3,271)
Current income tax liabilities		(92)	-
Borrowings		(51)	(44)
Total current liabilities (excluding liabilities of disposal group classified as held for sale)		(6,161)	(3,315)
Liabilities of disposal group classified as held for sale	9	-	(4,257)
Total current liabilities		(6,161)	(7,572)
Non-current liabilities
Borrowings		(51)	(62)
Deferred tax		(1,035)	(232)
Total non-current liabilities		(1,086)	(294)
Total liabilities		(7,247)	(7,866)
Net assets		11,118	7,007
Share capital and reserves
Share capital	6	12,556	11,335
Share premium account		6,455	6,455
Own shares held		(306)	(306)
Share based payment reserve		387	387
Merger reserve		13,900	10,006
Reverse acquisition reserve		(11,584)	(11,584)
Currency translation reserve		(33)	(39)
Accumulated losses		(10,257)	(9,247)
Total equity attributable to shareholders of the parent		11,118	7,007

1Spatial plc

Consolidated statement of changes in equity

Year ended 31 January 2012

£'000	Share Capital	Share Premium Account	Own Shares Held	Share Based Payments Reserve	Merger Reserve	Reverse Acquisition Reserve	Currency Translation Reserve	Accumulated Losses	Total Equity
Balance at 1 February 2011	11,335	6,455	(306)	387	10,006	(11,584)	(39)	(9,247)	7,007
Comprehensive income
Loss for the year	-	-	-	-	-	-	-	(1,010)	(1,010)
Other comprehensive income
Exchange differences on translating foreign operations	-	-	-	-	-	-	6	-	6
Total other comprehensive income	-	-	-	-	-	-	6	-	6
Total comprehensive income	-	-	-	-	-	-	6	(1,010)	(1,004)
Transactions with owners
Shares issued in the year (note 6)	1,221	-	-	-	-	-	-	-	1,221
Premium on issuance of shares to acquire subsidiary	-	-	-	-	3,894	-	-	-	3,894
	1,221	-	-	-	3,894	-	-	-	5,115
Balance at 31 January 2012	12,556	6,455	(306)	387	13,900	(11,584)	(33)	(10,257)	11,118
£'000	Share Capital	Share Premium Account	Own Shares Held	Share Based Payments Reserve	Merger Reserve	Reverse Acquisition Reserve	Currency Translation Reserve	Accumulated Losses	Total Equity
Balance at 1 February 2010	7,162	6,463	-	951	4,830	(11,584)	22	(2,722)	5,122
Comprehensive income
Loss for the year	-	-	-	-	-	-	-	(7,184)	(7,184)
Other comprehensive income
Gain on disposal of subsidiary (note 8)	-	-	-	(122)	-	-	-	142	20
Exchange differences on translating foreign operations	-	-	-	-	-	-	(61)	-	(61)
Total other comprehensive income	-	-	-	(122)	-	-	(61)	142	(41)
Total comprehensive income	-	-	-	(122)	-	-	(61)	(7,042)	(7,225)
Transactions with owners
Shares issued in the year	4,173	(8)	-	75	-	-	-	-	4,240
Premium on issuance of shares to acquire subsidiary	-	-	-	-	5,176	-	-	-	5,176
Transfer on lapse of share based payment	-	-	-	(517)	-	-	-	517	-
Shares held in treasury resulting from disposal of subsidiary	-	-	(306)	-	-	-	-	-	(306)
	4,173	(8)	(306)	(442)	5,176	-	-	517	9,110
Balance at 31 January 2011	11,335	6,455	(306)	387	10,006	(11,584)	(39)	(9,247)	7,007

1Spatial plc

Consolidated statement of cash flows

Year ended 31 January 2012

	Notes	2012 £'000	2011 £'000
Cash flows from operating activities
Cash used in operations	(a)	(3,225)	(604)
Interest received		26	-
Interest paid		(37)	(142)
Tax received/(paid)		232	(77)
Net cash used in operating activities		(3,004)	(823)
Cash flows from investing activities
Acquisition of subsidiaries (net of cash acquired)	7	661	2,291
Disposal of subsidiaries (net of cash disposal)		-	(405)
Cash received on disposal of subsidiary		5,189	-
Purchase of property, plant and equipment		(156)	(175)
Expenditure on product development		(476)	(185)
Proceeds from sale of property, plant and equipment		6	-
Net cash generated from investing activities		5,224	1,526
Cash flows from financing activities
Increase/(decrease) in factoring account		121	(144)
Finance lease principal payments		-	(7)
Repayment of borrowings		(100)	(250)
Net cash generated/(used in) from financing activities		21	(401)
Net increase in cash and cash equivalents		2,241	302
Cash and cash equivalents at start of year		493	183
Effects of foreign exchange		-	8
Cash and cash equivalents at end of year	(b)	2,734	493
Classified as:
Current assets		2,734	419
Assets held for sale (see note 9)		-	74
During the year the acquisition of 1Spatial Holdings Limited constituted material non-cash transactions.  Cash flows from discontinued operations can be summarised for each of the main cash flow headings as follows:
		2012 £'000	2011 £'000
Cash flows from operating activities
Net cash (used in)/generated from operating activities		(133)	(651)
Cash flows from investing activities
Net cash used in investing activities generated from/(used in)		5,189	(571)
Cash flows from financing activities
Net cash generated from/(used in) investing activities		121	(244)

Notes to the consolidated statement of cash flows

(a) Cash (used in)/generated from operations

		2012 £'000	2011 £'000
Continuing operations
Loss before tax		(1,593)	(7,801)
Adjustments for:
Depreciation charge		42	5
Amortisation and impairment		505	4,788
Inventories		(29)	-
(Increase)/Decrease in trade and other receivables		(1,073)	3,123
Decrease in trade and other payables		(961)	(1,268)
Finance cost - net		(6)	27
Foreign currency adjustment		6	-
Cash used in continuing operations		(3,109)	(1,126)

Discontinued operations
Net loss before tax		(54)	348
Adjustments for:
Depreciation charge		19	64
Amortisation and impairment		68	406
Increase in trade and other receivables		(137)	(489)
(Decrease)/increase in trade and other payables		(29)	78
Finance cost - net		17	115
Cash generated from discontinued operations		(116)	522
Cash used in operations		(3,225)	(604)

 (b) Reconciliation of net cash flow to movement in net (debt)/funds

		2012 £'000	2011 £'000
Increase in cash in the year		2,241	302
Net cash inflow from increase in bank loans		100	250
Net cash (outflow)/inflow in respect of factoring		(121)	144
Cash outflow in respect of finance leases		-	7
Changes resulting from cash flows		2,220	703
Loans and finance leases acquired with subsidiary		(96)	-
Factoring account acquired with subsidiary		277	-
Effect of foreign exchange		-	-
Change in net funds/(debt)		2,401	703
Net (debt)/ funds at beginning of year		231	(480)
Net funds/(debt) at end of year		2,632	223
Analysis of net funds/(debt)
Cash and cash equivalents classified as:
-       Current assets		2,734	419
-       Assets held for sale		-	74
Factoring account		-	(156)
Bank loans and overdraft		-	(106)
Other loans		(102)	-
Net funds/(debt) at end of year		2,632	231

Notes to the financial statements

For the year ended 31 January 2012

1 Basis of preparation 

The financial information included in this preliminary announcement does not comprise statutory accounts within the meaning of Section 434 of the Companies Act 2006, but has been extracted from the statutory financial statements for the year ended 31 January 2012.

The preliminary results for the year ended 31 January 2012 have been prepared in accordance with the accounting policies set out in its annual report for the period ended 31 January 2011.

These policies have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union (IFRSs as adopted by the EU), IFRIC interpretations and the Companies Act 2006 applicable to companies reporting under IFRS. The consolidated results have been prepared under the historical cost convention, as modified for any financial assets which are stated at fair value through profit or loss. The results have been prepared in Sterling as this represents the functional currency of the Group and figures have been rounded to the nearest thousand.

The accounting policies used in the preparation of these financial statements are consistent with those used in the preparation of the audited financial statements for the year ended 31 January 2012.

These accounts have been audited and the audit report is unqualified and does not contain a 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 four operating divisions - Head Office, Avisen, Storage Fusion and 1Spatial.  These divisions are the basis on which the Group reports its segmental information.  Where applicable, the reportable operating segments derive their revenue primarily from the sale of consultancy and software.

The Board assesses the performance of the operating segments based on a measure of adjusted EBITDA and adjusted EBITA.  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 2012 is as follows:

		Head Office	Avisen		Storage Fusion		1Spatial		Total
31 January 2012		£'000	£'000		£000		£'000		£'000
Continuing operations
Revenue		-	3,305		390		1,533		5,228
Less intersegment sales		-	-		-		-		-
Total revenue from third parties		-	3,305		390		1,533		5,228
Cost of sales		-	(2,595)		-		(778)		(3,373)
Gross profit		-	710		390		755		1,855
Total administrative expenses		(1,661)	(410)		(847)		(536)		(3,454)
Adjusted EBITDA		(1,134)	305		(13)		330		(512)
Less: depreciation		(11)	(7)		(13)		(11)		(42)
Adjusted EBITA		(1,145)	298		(26)		319		(554)
Less: amortisation and impairment of intangible assets		-	(8)		(431)		(66)		(505)
Less: strategic, integration and other one-off items		(516)	10		-		(34)		(540)
Total operating (loss)/profit		(1,661)	300		(457)		219		(1,599)
Finance income		17	8		-		1		26
Finance cost		(5)	(3)		(1)		(11)		(20)
Net finance income/(cost)		12	5		(1)		(10)		6
(Loss)/profit before tax		(1,649)	305		(458)		209		(1,593)
Tax credit		-	43		129		1		173
(Loss)/profit for the year from continuing operations		(1,649)	348		(329)		210		(1,420)
				Inca		South Africa		Total
				£000		£'000		£'000
Discontinued operations
Revenue				1,145		-		1,145
Less intersegment sales				-		-		-
Total revenue from third parties				1,145		-		1,145
Cost of sales				(722)		-		(722)
Gross profit				423		-		423
Total administrative expenses				(415)		(45)		(460)
Adjusted EBITDA				95		-		95
Less: depreciation				(19)		-		(19)
Adjusted EBITA				76		-		76
Less: amortisation and impairment of intangible assets				(68)		-		(68)
Less: strategic, integration and other one-off items				-		(45)		(45)
Total operating profit/(loss)				8		(45)		(37)
Finance income				-		-		-
Finance cost				(17)		-		(17)
Net finance cost				(17)		-		(17)
Loss before tax				(9)		(45)		(54)
Tax credit				-		-		-
Loss for the year from discontinued operations				(9)		(45)		(54)
		Head Office	Avisen	Storage Fusion		1Spatial		Total
31 January 2012		£'000	£'000	£'000		£'000		£'000
Segment assets		2,352	4,208	2,320		9,485		18,365
Segment liabilities		(2,132)	(587)	(343)		(4,185)		(7,247)
Segment net assets/(liabilities)		220	3,621	1,977		5,300		11,118

				Head Office		Avisen		Storage Fusion		Total
31 January 2011				£'000		£'000		£'000		£'000
Continuing operations
Revenue				-		2,597		230		2,827
Less intersegment sales				-		(196)		-		(196)
Total revenue from third parties				-		2,401		230		2,631
Cost of sales				-		(1,940)		-		(1,940)
Gross profit				-		461		230		691
Total administrative expenses				(7,221)		(559)		(685)		(8,465)
Adjusted EBITDA				(1,293)		(61)		(127)		(1,481)
Less: depreciation				-		-		(5)		(5)
Adjusted EBITA				(1,293)		(61)		(132)		(1,486)
Less: amortisation and impairment of intangible assets				(4,500)		(25)		(263)		(4,788)
Less: strategic, integration and other one-off items				(1,428)		(12)		(60)		(1,500)
Total operating loss				(7,221)		(98)		(455)		(7,774)
Finance income				-		-		-		-
Finance cost				(7)		(20)		-		(27)
Net finance cost				(7)		(20)		-		(27)
Loss before tax				(7,228)		(118)		(455)		(7,801)
Tax credit				-		137		22		159
(Loss)/profit for the year from continuing operations				(7,228)		19		(433)		(7,642)
Although South Africa did not meet the definition of an operating segment at year end, its results are shown below for comparative purposes.
					Inca		South Africa		Total
					£'000		£'000		£'000
Discontinued operations
Revenue					9,095		643		9,738
Less: intersegment sales					(19)		(9)		(28)
Total revenue from third parties					9,076		634		9,710
Cost of sales					(5,551)		(664)		(6,215)
Gross profit/(loss)					3,525		(30)		3,495
Total administrative expenses					(2,858)		(179)		(3,037)
Other operating income					4		1		5
Adjusted EBITDA					1,373		(208)		1,165
Less: depreciation					(64)		-		(64)
Adjusted EBITA					1,309		(208)		1,101
Less: amortisation and impairment of intangible assets					(406)		-		(406)
Less: strategic, integration and other one-off items					(232)		-		(232)
Total operating profit/(loss)					671		(208)		463
Finance income					-		-		-
Finance cost					(115)		-		(115)
Net finance cost					(115)		-		(115)
Profit/(loss) before tax					556		(208)		348
Tax					110		-		110
Post tax profit/(loss) from discontinued activities					666		(208)		458
	Head Office		Avisen			Storage Fusion		Inca		Total
31 January 2011	£'000		£'000			£'000		£'000		£'000
Segment assets	367		2,127			2,137		10,242		14,873
Segment liabilities	(2,911)		(915)			(204)		(3,836)		(7,866)
Segment net (liabilities)/assets	(2,544)		1,212			1,933		6,406		7,007

Sales between segments are carried out at arm's length.  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 2012 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.

3 Strategic, integration and other one off items

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

	2012	2011
Continuing operations	£'000	£'000
Strategic costs	301	496
Costs of duplication and integration	239	1,004
Total - continuing operations	540	1,500
Discontinued operations:
Strategic costs	45	-
Costs of duplication and integration	-	232
Total - discontinued operations	45	232
Total	585	1,732

The strategic costs in 2012 relate to the acquisition costs of the 1Spatial Business.  The costs of duplication and integration mainly relate to staff and other associated costs in relation to the integration and reorganisation of the 1Spatial Business following the acquisition.

4Income tax credit

	2012	2011
	£'000	£'000
Continuing operations
Current tax	-	-
Adjustment in respect of prior years	(150)	(137)
Deferred tax	(23)	(22)
Current tax credit	(173)	(159)
Discontinued operations
Current tax	-	-
Deferred tax	-	(110)
Total tax credit	(173)	(269)

The tax on the Group's loss before tax differs from the theoretical amount that would arise using the weighted average tax rate applicable to the consolidated entities as follows:

	2012	2011
	£'000	£'000
Loss before tax - continuing operations	(1,593)	(7,801)
Profit/(loss) before tax - discontinued operations	410	348
	(1,183)	(7,453)
Loss before tax multiplied by the average effective rate of tax in the UK of 26.33% (2011: 27%)	(311)	(2,012)
Effect of:
Expenses not deductible for tax purposes	1,325	997
Income not taxable	(1,433)	(15)
Capital allowances in excess of depreciation	4	(266)
Tax losses not utilised	546	1,185
Relief for gain on sale	(122)	(44)
Other timing differences	(15)	41
Adjustments to tax charge in respect of previous periods	(150)	(137)
Impact of change in tax rate	(17)	(18)
	(173)	(269)

During the year there was a change in the UK main corporation tax rate to 26%, which was substantially enacted on 29 March 2011 and was effective from 1 April 2011. A reduction to 25% was substantively enacted on 5 July 2011 and will be effective from 1 April 2012. Further reductions to the UK corporation tax rate were announced in the March 2011 Budget. The changes, which are expected to be enacted separately each year, propose to reduce the rate by 1% per annum to 23% by 1 April 2014.

5 Intangible assets including goodwill

	Goodwill	Brands	Customers and related contracts	Software	Development costs		Total
						Website costs
At 31 January 2012	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Cost
At 1 February 2011	12,849	252	1,852	944	595	-	16,492
Additions	100	-	-	34	412	30	576
Acquisition of subsidiary	3,346	232	899	2,171	-	-	6,648
Disposals	(6,193)	(252)	(1,852)	-	-	-	(8,297)
At 31 January 2012	10,102	232	899	3,149	1,007	30	15,419
Accumulated impairment and amortisation
At 1 February 2011	4,500	53	545	243	438	-	5,779
Impairment	-	-	-	-	-	25	25
Amortisation	-	10	85	351	97	5	548
Disposals	-	(59)	(609)	-	-	-	(668)
At 31 January 2012	4,500	4	21	594	535	30	5,684
Net book amount at 31 January 2012	5,602	228	878	2,555	472	-	9,735

6 Share capital and share premium

	2012	2011
Allotted, called up and fully paid	Number	Number
Ordinary shares of 5p each	-	226,699,878
Ordinary shares of 1p each	348,769,274	-
Deferred shares of 4p each	226,699,878	-
Prior to the acquisition of 1Spatial Holdings plc on 28 November 2011, the company sub divided its existing share capital of 226,699,878 shares of 5p each to 226,699,878 shares of 1p each and 226,699,878 deferred shares. Ordinary shares of 5p each Ordinary shares of 1p each Deferred shares of 4p each At 1 February 2011 226,699,878 - - Sub division of shares (226,699,878) 226,699,878 226,699,878 Issue of shares - 122,069,396 - At 31 January 2012 - 348,769,274 226,699,878 Immediately following the Sub-division, each shareholder held one New 1Spatial plc Ordinary share of 1p each and  and one Deferred Share of 4p each in place of every one Existing 1Spatial plc Ordinary share of 5p each previously held in the capital of the Company.  Rights of shares Ordinary shares The rights attaching to the New 1Spatial plc Ordinary shares will in all material respects be the same as the rights attaching to the existing Shares.  Holders of New 1Spatial plc Converted Shares will 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, holders of New 1Spatial plc Converted Shares will continue to be 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 will 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.

7 Business Combinations

On 28 November 2011, 1Spatial plc acquired the entire share capital of 1Spatial Holdings plc.   

The Board's decision to invest in the 1Spatial Business was to strengthen the strategy for the business moving forward. The 1Spatial Business has a strong customer base in some of the world's largest National Mapping Agencies (NMAs) and these relationships have been built over a many years throughout the history of the company. The 1Spatial Business product manages data for many of the NMAs and this puts 1Spatial Business as a strategic partner and provider of technology in this market. 1Spatial will put a continued focus on product development and innovation of its intellectual property and offerings, providing both on-premise and Cloud solutions through its recently launched Socium 1Spatial Cloud platform.

The Group obtained control of 1Spatial Holdings plc on 28 November 2011 by virtue of its 100% interest in the shares and control of the Board of Directors.

Details of the provisional net assets acquired and goodwill are as follows:

	1Spatial
	£'000
Non Current Assets
Property, plant and equipment	118
Separately identified intangible assets * (note 5)	3,302
Current Assets
Work in progress	12
Trade receivables	1,679
Other receivables and prepayments	457
Cash and cash equivalents	661
Current Liabilities
Trade payables	(505)
Other payables and accruals	(2,946)
Borrowings	(96)
Current tax liabilities	(87)
Deferred tax liabilities	(826)
	1,769
Net assets acquired	1,769
Goodwill arising upon acquisition	3,346
Total consideration - satisfied by shares	5,115
Net cash inflow arising on acquisition	661

* Separately identifiable intangible assets on acquisition have been identified in respect of 1Spatial brand, customer and related contracts and software.

In addition to the above goodwill of £3,346,000, a further adjustment of £100,000 was made to goodwill in the year with respect to the prior year Xploite plc acquisition.  This adjustment related to the revision of certain items in the provisional fair value balance sheet at acquisition.  Total goodwill additions in the year are therefore £3,436,000 (note 5).

a)    Acquisition related costs

IFRS 3 (revised) was applied to the acquisition of 1Spatial Holdings Limited and its subsidiaries on 28 November 2011.  Acquisition related costs of £301,000 have been recognised in the income statement within strategic costs.

b)    Revenue and profit contribution

The acquired business contributed revenues of £1,533,000 and a net loss of £116,000 to the Group for the period since acquisition to 31 January 2012.  If the acquisition had occurred on 1 February 2011, consolidated revenue and consolidated loss for the year ended 31 January 2011 would have been £8,741,000 and £1,147,000 respectively.

8 Discontinued operations

On 1 April 2011 the Group transferred the entire interest in its subsidiary Inca Software Limited to Logicalis Limited. 

The assets and liabilities relating to Inca Software Limited were presented as held for sale at 31 January 2011 following their agreed disposal.  The results of the subsidiary were reported in the financial statements for the year ended 31 January 2011 as discontinued operations and its performance is detailed within the discontinued segmental analysis in note 2.

The carrying amounts of assets and liabilities as at 1 April 2011 were:

	£'000
Intangibles assets including goodwill	7,629
Property, plant and equipment	130
Total non-current assets	7,759
Trade and other receivables	2,458
Cash and cash equivalents	50
Total current assets	2,508
Total assets	10,267
Trade and other payables	(3,594)
Borrowings	(277)
Deferred tax liability	(421)
Total liabilities	(4,292)
Net assets	5,975

The gain on disposal is set out below:

	As at 1 April 2011 £'000
Consideration received or receivable:
Cash	6,000
Deferred consideration	1,300
Total disposal consideration	7,300
Carrying amount of net assets sold	(5,975)
Disposal costs	(861)
Gain on disposal before income tax	464
Income tax expense*	-
Gain on disposal after income tax	464

*No tax is due on the gain as any taxable gain on disposal was covered by Substantial Shareholder Exemption.

On 14 July 2010 the Group transferred the entire interest in its South African subsidiary Avisen (Pty) SA Limited and its subsidiary i-Centric (Pty) Limited, to K Jones, a director of Avisen (Pty) SA Limited.  The consideration of 3,500,000 shares in 1Spatial Plc with a fair value of £306,000 has been subsequently classified as Own shares held in equity.  This resulted in a gain on disposal of £142,000 which is classified within equity.

9 Disposal group

As at 31 January 2011, the assets and liabilities relating to Inca Software Limited, had been presented as held for sale following their agreed disposal in January 2011.  Completion of the transaction took place on 1 April 2011 (see note 8).

Details of the assets and liabilities at 31 January 2011 were as follows:

	£'000
Assets
Non current assets
Intangible assets including goodwill	7,699
Property, plant and equipment	148
	7,847
Current assets
Trade receivables	1,242
Other receivables and prepayments	1,079
Bank and cash balances	74
	2,395
Total assets of disposal group	10,242
Current liabilities
Trade payables	(1,031)
Other payables and accruals	(2,649)
Borrowings	(156)
Deferred tax	(421)
Total liabilities of disposal group	(4,257)

10 Earnings/(Loss) per ordinary share

Basic loss 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.

	Year ended 31 January 2012			Year ended 31 January 2011
	Continuing	Discontinued	Total	Continuing	Discontinued	Total
	£'000	£'000	£'000	£'000	£'000	£'000
(Loss)/profit attributable to equity holders	(1,420)	(54)	(1,474)	(7,642)	458	(7,184)
Adjustments:
Impairment of intangible assets	505	68	573	4,788	-	4,788
Integration, strategic and one off costs	540	45	585	1,500	232	1,732
Adjusted (loss/profit)	(375)	59	(316)	(1,354)	690	(664)
	Pence	Pence	Pence	Pence	Pence	Pence
Basic (loss)/profit per share	(0.57)	(0.02)	(0.59)	(3.69)	0.22	(3.47)
Diluted (loss)/profit per share	(0.57)	(0.02)	(0.59)	(3.69)	0.22	(3.47)
Adjusted basic (loss)/earnings per share	(0.15)	0.02	(0.13)	(0.65)	0.33	(0.32)
Adjusted diluted (loss)/ earnings per share	(0.15)	0.02	(0.13)	(0.65)	0.33	(0.32)
			Number 000's			Number 000's
Basic weighted average number of ordinary shares			248,104			206,977
Impact of share options and warrants			-			689
Diluted weighted average number of ordinary shares			248,104			207,666

Where there is a loss per share, the share options are not dilutive and hence the diluted earnings per share is the same as the basic.

11.   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 at Pannell House, Park Street, Guildford GU1 4HN.

12 Annual General Meeting

The Company's next Annual General Meeting ("AGM") will be held on 6 September and a formal Notice of AGM and proxy form have today been posted to those shareholders who have elected to receive hard copy shareholder communications from the Company and can also be downloaded from the Company's website at www.1spatial.com.

 

END

 

 

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