Final Results

RNS Number : 2145I

1Spatial Plc

01 July 2013

 



1 July 2013

1Spatial plc (AIM: SPA)

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

Final results for the year ended 31 January 2013

The Board of Directors of 1Spatial plc (the "Board"), the AIM Spatial Big Data Company, is pleased to announce the Company and consolidated group's (the "Group") audited final results for the year ended 31 January 2013.

Highlights

Financial highlights

·      Revenue from operations increased to £12.1m (2012: £5.2m)

·      1Spatial division achieved revenues of £9.7m and Adjusted* EBITDA of £1.4m (2 months 2012: revenues of £1.5m and Adjusted* EBITDA of £0.3m)

·      Avisen division generated revenues of £2.0m and Adjusted* EBITDA of £29k (2012: revenues of £3.3m and Adjusted* EBITDA of £0.3m)

·      Storage Fusion division generated revenues of £0.4m and Adjusted* EBITDA of £8k (2012: revenues of £0.4m and Adjusted* EBTIDA loss of £13k)

·      Overall Adjusted* EBITDA loss of £0.5m (2012: £0.5m)

·      Overall loss for the year of £4.4m following impairment of goodwill and intangible assets of £3.5m (2012: loss of £1.4m)

·      Cash and cash equivalents** balance at 31 January 2013 of £3.2m (2012: £2.7m)

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

** As defined as cash, cash equivalents and short term investments and other financial assets

Operational highlights

·      Restructuring of the 1Spatial Business to enable execution of new growth strategy

·      Rebranding of 1Spatial Business to raise market visibility as a leading global provider of spatial Big Data management

·      Focus on product development for National Mapping Agencies (NMA's) within 1Spatial Business

·      Product realignment and development to scale product offerings across cloud and on-premise within the 1Spatial Business

·      Global Launch of 1Edit, a powerful spatial data editing solution with innovative touch screen and desktop compatible for Data Capture & Edit in the field or office.

·      Won a strategically important contract with US Census to provide software and related services

·      Won a significant contract with Ordnance Survey Ireland (OSi), the first customer of our new geospatial management suite "1SMS"

Post Period-End Highlights

·      On 24 May 2013 1Spatial announced the placing of new Shares, raising approximately £17m of cash for the Group (after commission and expenses) to fund:

-     acquisition of 90% of Star-Apic,  a leading European provider of Geographic Information Systems ("GIS") software and solutions;

-     additional working capital for the enlarged Group;

-     a sales and support centre in the Middle East; and

-     product development, marketing and further potential acquisition opportunities.

·      Placing Shares admitted to trading on 13 June 2013

·      David Richards appointed as Deputy Non-Executive Chairman

·      On 14 May 2013, launched new 1EDIT software at Rotterdam Geo Spatial conference

Commenting on the results, CEO, Marcus Hanke of 1Spatial plc, said: "1Spatial is entering an exciting growth phase following a successful Placing to raise funds for a highly complementary acquisition as well as the future strategic development and expansion of the business.

It is the Board's view that the Company is well placed to capitalise on opportunities in the spatial Big Data market with a strong team in place and an exceptional product offering. The Company has an impressive and growing customer base and a healthy pipeline of opportunities including National Mapping Agencies and blue-chip companies.

The addition of Star-Apic gives increased scale to the business as well as future growth opportunities with management will be working over the next six months to integrate the two businesses.

The Board is encouraged by the progress made during the start of the current financial year, and looks forward to the future with confidence."

For further information, please contact:

1Spatial plc	020 7382 8952
Marcus Hanke / Claire Milverton
FTI Consulting	020 7831 3113
Sophie McMillan / Lucy Delaney
Nplus1 Singer	020 7496 3000
Shaun Dobson / Matthew Thomas

Chairman's Statement

1Spatial is a software and solutions provider to national mapping and charting agencies, utilities companies and defence and government departments globally. Our technologies allow customers to make key business decisions by capturing, managing, processing and analysing spatial data - in a way that traditional technologies do not allow. With over 40 years of continual innovation and development, our products make the huge data they manage scalable, flexible and highly accurate.

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. Big Data has increased the demand for information management specialists and software firms specialising only in data management and analytics; this industry is valued at several billion dollars globally and continues to grow significantly each year.

The year ended 31 January 2013 has been a year of achieving focus and clarity around the strategic direction of the business.  This was further supported post year-end by a share placing raising approximately £17m (after expenses) to support the Group's future strategy and growth plans including potential acquisitions, geographic expansion, product development and potential future acquisitions.   In particular, it has enabled the group to acquire 90% of Star-Apic for £5.2m (excluding direct costs of acquisition) a leading European provider of Geographic Information Systems ("GIS") software and solutions, specialising in land and infrastructure management.  The Directors believe that Star-Apic is an important and highly complementary bolt-on acquisition, significantly enhancing 1Spatial's capability in the rapidly growing spatial Big Data market, and leveraging the opportunity for 1Spatial Products into the Star-Apic customer base.

In addition, post year-end, David Richards, CEO of WANdisco plc, joined the Board as Deputy Non-Executive Chairman, bringing over 15 years experience in the Software industry to the Group.  David's knowledge of the US market which is identified as a key market for growth for the 1Spatial business, is of particular importance.  I welcome him to the Board during this exciting period of growth for 1Spatial.  I reported in my half year statement that the company made excellent progress during the period, particularly with respect to the 1Spatial division.  This success continued in the second half of the year, namely with the award of two strategically important contracts for US Census and Ordnance Survey Ireland (OSi). These contracts demonstrate the pedigree of the spatial Big Data product suite we offer, allowing these organisations to capture, process and query huge amounts of spatial data, which must be highly accurately in near real-time.

For OSi, 1Spatial will provide an 'end to end' National Mapping Solution. OSi will be 1Spatial's flagship first customer for the new 1Spatial Management Suite (1SMS) which will be launched in August 2013.

We are very excited about our next generation products in the 1SMS. Our continued investment in development has enabled us to bring to the market products that provide an innovative approach to the way organisations manage, process and analyse spatial data, and we believe it's a step change from what traditional technologies currently allow. In May we launched 1Edit, a revolutionary, touch screen compatible solution for fast and intuitive data-editing in the field or office, and we have received significant interest in 1Edit from both customers and prospects alike.

Our contract with the US Census further strengthens the long standing engagement we have with Census to provide automated process to bring together geospatial data from various sources. With the large, complex, mission critical and growing spatial data that Census holds we are regarded as a strategic partner to help them progress towards 2015 for the decennial census, at which time the US Census will be updated continuously in near real-time.

The company's long term growth strategy is based on exploiting the opportunities in its scalable intellectual property offerings from both the 1Spatial business and the Star-Apic business.  The Directors believe that the acquisition of Star-Apic will provide:

·        a utilities solution that can be sold into existing customers and markets as well as into new customers and markets;

·        access to new markets, such as France and North Africa;

·        additional services and products to the Group's existing customer base. The Elyx software platform is built on the same core technology as 1Spatial's technology and can be integrated into the 1Spatial Management Suite easily and efficiently;

·        a map publishing tool (Mercator) to produce digital and paper maps which can be added onto 1SMS;

·        additional resource to develop new products aligned to customer needs; and

·        opportunities for the 1Spatial product offerings across the Star-Apic customerbase.

And lastly, I would like 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.

Financial position

Group revenue for the year was £12.1m up from £5.2m in 2012 due to the 12 month contribution from the 1Spatial Business that was acquired in November 2011.  On a like-for-like basis, revenue growth was down on the prior year by £0.8m mainly as a result of reduced revenues in the Avisen business.  In 2012 Avisen made a one-off licence sale in excess of £1.5m that was not repeated in 2013.

All trading businesses, namely 1Spatial, Avisen and Storage Fusion made positive adjusted EBITDA contributions to the Group.  Overall, the Group has recorded an adjusted EBITDA loss of £0.5m, substantially due to head office costs of £2.0m. Over time, management has implemented plans to scale the operations in order absorb the fixed overhead costs associated with being a listed entity. With the acquisition of Star-Apic and good prospects for the other businesses, covering these costs will be achievable.

The overall net loss for the year is £4.4m. The main reason for the loss is due to the impairment of the Avisen and Storage Fusion goodwill and intangible assets of £2.6m as well as £0.9m of amortisation of intangible assets and other exceptional items. Whilst the Directors remain optimistic with respect to the long term prospects of the Avisen and Storage Fusion businesses, there remains challenges in the short term based on the current pipeline of opportunities.   

We have a strong balance sheet post year end following the placing.  After the acquisition of Star-Apic, the cash and cash equivalents balance as at 25 June is £14m.

Strategy and reorganisation

In the last annual report, our long term 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 have made significant progress in this respect during the year and post year-end.  The cash received from the placing and the acquisition of Star-Apic puts the Group in a good position for long term growth and scalability.  The Company is now under one common branding of 1Spatial, but with three trading subsidiaries, 1Spatial Business, Avisen UK and Storage Fusion.

1Spatial Division

The 1Spatial division has a strong customer base, working with some of the world's largest National Mapping Agencies (NMAs).  These relationships have been built over many years.

1Spatial's strategy is to achieve growth in our current marketplace, leverage our brand and scale the business into new geographical markets. Key to this success will be a major focus on partnerships, so that we can leverage our technology offerings and provide more options for our customers.  Two successes during the period that are testament to our strategy are the contract wins with the Irish Mapping agency (OSi) and US Census.

Building on the current strong customer base, the growth strategy for the business will be to continue to focus on the NMA market along with key vertical sectors such as utilities, which is where the Star-Apic acquisition will be a key addition.

Avisen UK

Avisen continues to provide profitability improvement services to its clients, which include Tesco and Unilever. 

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. 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

1Spatial is entering an exciting growth phase following a successful Placing to raise funds for a highly complementary acquisition as well as the future strategic development and expansion of the business.

It is the Board's view that the Company is well placed to capitalise on opportunities in the spatial Big Data market with a strong team in place and an exceptional product offering. The company has an impressive and growing customer base and a healthy pipeline of opportunities including National Mapping Agencies and blue-chip companies.

The addition of Star-Apic gives increased scale to the business as well as future growth opportunities with management working over the next six months to integrate the two businesses. 

The Board is encouraged by the progress made during the start of the current financial year, and looks forward to the future with confidence.

S Berry

Chairman

1 July 2013

1Spatial plc

Consolidated statement of comprehensive income

Year ended 31 January 2013

	Note	2013 £'000	2012 £'000
Revenue		12,079	5,228
Cost of sales		(6,973)	(3,373)
Gross profit		5,106	1,855
Other operating income		21	-
Administrative expenses		(9,912)	(3,454)
		(4,785)	(1,599)
Adjusted* EBITDA		(533)	(512)
Less: depreciation		(152)	(42)
Adjusted* EBITA		(685)	(554)
Less: amortisation and impairment of intangible assets		(3,478)	(505)
Less: strategic, integration and other one off items	3	(622)	(540)
Operating loss		(4,785)	(1,599)
Finance income		14	26
Finance costs		(9)	(20)
Net finance income		5	6
Loss before tax		(4,780)	(1,593)
Income tax credit	4	387	173
Loss from continuing operations	2	(4,393)	(1,420)
Discontinued operations
(Loss)/profit from discontinued operations		-	(54)
Gain on disposal of discontinued operations		-	464
Loss for the year		(4,393)	(1,010)
Other comprehensive income
Exchange differences arising on translation of net assets of foreign operations		35	6
Other comprehensive income for the year, net of tax		35	6
Total comprehensive loss
Loss for the year		(4,393)	(1,010)
Total comprehensive loss attributable to equity shareholders of the Company		(4,358)	(1,004)
Loss per ordinary share expressed in
pence per ordinary share from continuing operations:
Basic	8	(1.25)	(0.57)
Diluted	8	(1.25)	(0.57)
Loss per ordinary share expressed in
pence per ordinary share from operations:
Basic	8	(1.25)	(0.59)
Diluted	8	(1.25)	(0.59)
*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 2013

	Notes	2013 £'000	2012 £'000
Assets
Non-current assets
Intangible assets including goodwill	5	6,928	9,735
Property, plant and equipment		266	244
Total non-current assets		7,194	9,979
Current assets
Inventories		14	41
Trade and other receivables		2,783	5,551
Current income tax receivable		107	60
Cash and cash equivalents	6	3,216	2,734
Total current assets		6,120	8,386
Total assets		13,314	18,365
Liabilities
Current liabilities
Trade and other payables		(5,686)	(6,018)
Current income tax liabilities		(7)	(92)
Borrowings		(49)	(51)
Total current liabilities		(5,742)	(6,161)
Non-current liabilities
Borrowings		-	(51)
Deferred tax		(748)	(1,035)
Total non-current liabilities		(748)	(1,086)
Total liabilities		(6,490)	(7,247)
Net assets		6,824	11,118
Share capital and reserves
Share capital	7	12,572	12,556
Share premium account	7	6,503	6,455
Own shares held		(306)	(306)
Share based payment reserve		387	387
Merger reserve		13,900	13,900
Reverse acquisition reserve		(11,584)	(11,584)
Currency translation reserve		2	(33)
Accumulated losses		(14,650)	(10,257)
Total equity attributable to shareholders of the parent		6,824	11,118

1Spatial plc

Consolidated statement of changes in equity

Year ended 31 January 2013

£'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 2012	12,556	6,455	(306)	387	13,900	(11,584)	(33)	(10,257)	11,118
Comprehensive income
Loss for the year	-	-	-	-	-	-	-	(4,393)	(4,393)
Other comprehensive income
Exchange differences on translating foreign operations	-	-	-	-	-	-	35	-	35
Total other comprehensive income	-	-	-	-	-	-	35	-	35
Total comprehensive income	-	-	-	-	-	-	35	(4,393)	(4,358)
Transactions with owners
Shares issued in the year (note 7)	16	48	-	-	-	-	-	-	64
	16	48	-	-		-	-	-	64
Balance at 31 January 2013	12,572	6,503	(306)	387	13,900	(11,584)	2	(14,650)	6,824
£'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
Gain on disposal of subsidiary	-	-	-	-	-	-	6	-	6
Exchange differences on translating foreign operations	-	-	-	-	-	-	6	-	6
Total other comprehensive income	-	-	-	-	-	-	6	(1,010)	(1,004)
Total comprehensive income
Transactions with owners	-	-	-	-	-	-	-	-	-
Shares issued in the year	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

1Spatial plc

Consolidated statement of cash flows

Year ended 31 January 2013

		Notes	2013 £'000	2012 £'000
Cash flows from operating activities
Cash generated/(used) in operations		(a)	127	(3,225)
Interest received			14	26
Interest paid			(9)	(37)
Tax (paid)/received			(34)	232
Net cash used in operating activities			98	(3,004)
Cash flows from investing activities
Acquisition of subsidiaries (net of cash acquired)			-	661
Cash received on disposal of subsidiary			1,300	5,189
Purchase of property, plant and equipment			(231)	(156)
Expenditure on product development capitalised			(671)	(476)
Proceeds from sale of property, plant and equipment			31	6
Net cash generated from investing activities			429	5,224
Cash flows from financing activities
Increase in factoring account			-	121
Repayment of borrowings			(51)	(100)
Net cash (used in)/generated from financing activities			(51)	21
Net increase in cash and cash equivalents			476	2,241
Cash and cash equivalents at start of year			2,734	493
Effects of foreign exchange on cash and cash equivalents			6	-
Cash and cash equivalents at end of year		(b)	3,216	2,734
	Cash flows from discontinued operations can be summarised for each of the main cash flow headings as follows:
			2013 £'000	2012 £'000
	Cash flows from operating activities
	Net cash used in operating activities		-	(133)
	Cash flows from investing activities
	Net cash generated from investing activities		-	5,189
	Cash flows from financing activities
	Net cash generated from investing activities		-	121

Notes to the consolidated statement of cash flows

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

		2013 £'000	2012 £'000
Continuing operations
Loss before tax		(4,780)	(1,593)
Adjustments for:
Depreciation charge		152	42
Amortisation		903	505
Impairment		2,513	-
Expense recognised in respect of shares issued in exchange for consulting services		64	-
Net foreign exchange movement		29	6
Loss on disposal of property, plant and equipment		26	-
Loss on disposal of goodwill		62	-
Decrease/(Increase) in inventories		27	(29)
Decrease/(Increase) in trade and other receivables		1,468	(1,073)
Decrease in trade and other payables		(332)	(961)
Finance (income) - net		(5)	(6)
Cash generated from/ (used in) continuing operations		127	(3,109)

Discontinued operations
Net loss before tax		-	(54)
Adjustments for:
Depreciation charge		-	19
Amortisation and impairment		-	68
Increase in trade and other receivables		-	(137)
(Decrease) in trade and other payables		-	(29)
Finance cost - net		-	17
Cash generated from discontinued operations		-	(116)
Cash generated/(used) in operations		127	(3,225)

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

		2013 £'000	2012 £'000
Increase in cash in the year		476	2,241
Net cash outflow from decrease in bank loans		51	100
Net cash outflow/(inflow) in respect of factoring		-	(121)
Changes resulting from cash flows		527	2,220
Loans and finance leases acquired with subsidiary		-	(96)
Factoring account acquired with subsidiary		-	277
Effect of foreign exchange		8	-
Change in net funds		535	2,401
Net funds at beginning of year		2,632	231
Net funds at end of year		3,167	2,632
Analysis of net funds
Cash and cash equivalents classified as:
-       Current assets		3,216	2,734
Other loans		(49)	(102)
Net funds at end of year		3,167	2,632

Notes to the financial statements

For the year ended 31 January 2013

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 2013.

The preliminary results for the year ended 31 January 2013 have been prepared in accordance with the accounting policies set out in its annual report for the period 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.

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.

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 2013 is as follows:

	Head Office	Avisen	Storage Fusion	1Spatial	Total
31 January 2013	£'000	£'000	£000	£'000	£'000
Continuing operations
Revenue	-	1,995	397	9,687	12,079
Less intersegment sales	-	-	-	-	-
Total revenue from third parties	-	1,995	397	9,687	12,079
Cost of sales	-	(1,517)	-	(5,456)	(6,973)
Gross profit	-	478	397	4,231	5,106
Other operating income	13	5	-	3	21
Total administrative expenses	(2,156)	(1,364)	(2,750)	(3,642)	(9,912)
Adjusted EBITDA	(1,956)	29	8	1,386	(533)
Less: depreciation	(21)	(11)	(46)	(74)	(152)
Adjusted EBITA	(1,977)	18	(38)	1,312	(685)
Less: amortisation and impairment of intangible assets	-	(693)	(2,409)	(376)	(3,478)
Less: strategic, integration and other one-off items	(166)	(206)	94	(344)	(622)
Total operating (loss)/profit	(2,143)	(881)	(2,353)	592	(4,785)

		Head Office	Avisen	Storage Fusion	1Spatial	Total
31 January 2013		£'000	£'000	£'000	£'000	£'000
Finance income		12	-	-	2	14
Finance cost		(2)	(2)	(1)	(4)	(9)
Net finance income/(cost)		10	(2)	(1)	(2)	5
(Loss)/profit before tax		(2,133)	(883)	(2,354)	590	(4,780)
Tax		-	2	266	119	387
(Loss)/profit for the year from continuing operations		(2,133)	(881)	(2,088)	709	(4,393)

	Head Office	Avisen	Storage Fusion	1Spatial	Total
31 January 2013	£'000	£'000	£'000	£'000	£'000
Segment assets	1,325	1,459	342	10,188	13,314
Segment liabilities	(863)	(528)	(709)	(4,390)	(6,490)
Segment net assets/(liabilities)	462	931	(367)	5,798	6,824

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 2013 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:

	2013	2012
Continuing operations	£'000	£'000
Strategic costs	14	301
Costs of duplication and integration	608	239
Total - continuing operations	622	540
Discontinued operations:
Strategic costs	-	45
Costs of duplication and integration	-	-
Total - discontinued operations	-	45
Total	622	585

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

4  Income tax credit

	2013	2012
	£'000	£'000
Continuing operations
Current tax	(42)	-
Adjustment in respect of prior years	(58)	(150)
Deferred tax
Reversal in timing differences	(190)	(6)
Change in rates of taxation	(97)	(17)
Current tax credit	(387)	(173)
Discontinued operations
Current tax	-	-
Deferred tax	-	-
Total tax credit	(387)	(173)

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:

	2013	2012
	£'000	£'000
Loss before tax - continuing operations	(4,780)	(1,593)
Profit before tax - discontinued operations	-	410
	(4,780)	(1,183)
Loss before tax multiplied by the average effective rate of tax in the UK of 24.33% (2012: 26.33%)	(1,163)	(311)
Effect of:
Expenses not deductible for tax purposes	914	1,325
Income not taxable	(3)	(1,433)
Capital allowances in excess of depreciation	14	4
Tax losses not utilised	266	546
Relief for gain on sale	-	(122)
Other timing differences	(260)	(15)
Adjustments to tax charge in respect of previous periods	(58)	(150)
Impact of change in tax rate	(97)	(17)
	(387)	(173)

The standard rate of corporation tax in the UK changed from 26% to 24% with effect from 1 April 2012. Accordingly, the company's profits for this accounting period are taxed at an effective rate of 24.33%. Legislation to reduce the main rate of corporation tax from 24% to 23% from 1 April 2013 was included in the Finance Act 2012 and substantively enacted on 3 July 2012 and so the relevant deferred tax balances have been re-measured at 23% for the current year end.

Further reductions to the main rate were announced in the Autumn Statement 2012 (reducing the rate to 21% from 1 April 2014) and Budget 2013 (reducing the rate to 20% from 1 April 2015).  Neither change had been substantively enacted at the reporting date; therefore they are not included in these financial statements.

5 Intangible assets including goodwill

	Goodwill	Brands	Customers and related contracts	Software	Development costs		Total
						Website costs
At 31 January 2013	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Cost
At 1 February 2012	10,102	232	899	3,149	1,007	30	15,419
Additions	-	-	-	-	671	-	671
Disposals	(62)	-	-	-	-	-	(62)
At 31 January 2013	10,040	232	899	3,149	1,678	30	16,028
Accumulated impairment and amortisation
At 1 February 2012	4,500	4	21	594	535	30	5,684
Impairment	1,855	-	-	75	585	-	2,513
Amortisation	-	23	129	529	222	-	903
At 31 January 2013	6,355	27	150	1,198	1,340	30	9,100
Net book amount at 31 January 2013	3,685	205	749	1,951	388	-	6,928

Impairment tests for goodwill and intangibles

Goodwill is allocated to the Group's cash-generating units (CGUs) identified.  The basis of the allocation is made to those CGU's that are expected to benefit from the business combination in which the goodwill arose, identified according to operating segment.   A summary of the goodwill allocation is presented below.

	2013
	Avisen	1Spatial	Storage Fusion	Total
	£'000	£'000	£'000	£'000
Goodwill
Opening NBA	1,024	3,346	1,232	5,602
Impairment/ Disposal	(685)	-	(1,232)	(1,917)
Closing NBA	339	3,346	-	3,685

Basis for calculation of recoverable amount

The Group has prepared, and formally approved, a two 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 in accordance with IAS 36 'Impairment of Assets'.

The rates used in the assumptions are consistent with management's knowledge of the industry

The growth rate for subsequent years 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.  A 5% decrease in revenue in Avisen for 2014 would result in a full impairment of the remaining goodwill and intangibles.

There would have to be a reduction in forecast revenue of 24% in the year ended 31 January 2014 and zero growth on this figure in 2015 for the headroom to be removed on 1Spatial.

As the goodwill and intangibles of Storage Fusion are now fully impaired there is no sensitivity to changes in future assumptions.

6 Cash and cash equivalents

	2013	2012
	£'000	£'000
Cash at bank and in hand	3,154	2,734
Financial assets - restricted access account	62	-
	3,216	2,734

The fair value of the Group's cash and cash equivalents is the same as its book value stated above. 

7 Share capital and share premium

	2013	2012
Allotted, called up and fully paid	Number	Number
Ordinary shares of 1p each	350,415,354	348,769,274
Deferred shares of 4p each	226,699,878	226,699,878

		Ordinary shares of 1p each	Deferred shares of 4p each
At 1 February 2012		348,769,274	226,699,878
Issue of shares		1,646,080	-
At 31 January 2013		350,415,354	226,699,878

On 3 February 2012 1Spatial plc issued 1,646,080 Ordinary shares of 1p each to unconnected third parties in lieu of services provided to the company.

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.

8 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 2013			Year ended 31 January 2012
	Continuing	Discontinued	Total	Continuing	Discontinued	Total
	£'000	£'000	£'000	£'000	£'000	£'000
(Loss)/profit attributable to equity holders	(4,393)	-	(4,393)	(1,420)	(54)	(1,474)
Adjustments:
Impairment of intangible assets	3,478	-	3,478	505	68	573
Integration, strategic and one off costs	622	-	622	540	45	585
Adjusted (loss/profit)	(293)	-	(293)	(375)	59	(316)
	Pence	Pence	Pence	Pence	Pence	Pence
Basic (loss)/profit per share	(1.25)	-	(1.25)	(0.57)	(0.02)	(0.59)
Diluted (loss)/profit per share	(1.25)	-	(1.25)	(0.57)	(0.02)	(0.59)
Adjusted basic (loss)/earnings per share	(0.08)	-	(0.08)	(0.15)	0.02	(0.13)
Adjusted diluted (loss)/ earnings per share	(0.08)	-	(0.08)	(0.15)	0.02	(0.13)
			Number 000's			Number 000's
Basic weighted average number of ordinary shares			350,402			248,104
Diluted weighted average number of ordinary shares			350,402			248,104

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.

9 Post Balance Sheet Events

Placing

On 12 June 2013 1Spatial completed the Placing of 300,000,000 new Ordinary Shares at the Placing Price of 6p per share with certain institutional investors, raising approximately £17m of net proceeds for the Company and equating to 46.1 per cent of the enlarged issued share capital.  The new Ordinary Shares will rank equally with the existing Ordinary Shares in the Company.  Following the admission, the company has 650,415,354 Ordinary Shares of 1p each in issue, with each share carrying the right to one vote.

Acquisition

Following the placing, on 14 June 2013, 1Spatial has completed the 90% acquisition of Star-Apic, the leading European provider of Geographic Information Systems ("GIS") software and solutions for approximately £5.2m.  It acquired approximately £1.5m of the net assets of the business that includes significant IPR, freehold property and cash. 

The results of the Star-Apic group for the year ended 31 December 2012 were revenues of £6.8m, Adjusted* EBITDA of £0.1m and Net profit of £0.1m. 

10   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.

11 Annual General Meeting

The Company's next Annual General Meeting ("AGM") will be held on 13 August 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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