REG - 1Spatial Plc - Final results for the year ended 31 January 2017 <Origin Href="QuoteRef">SPA.L</Origin> - Part 2
23/05/2017 07:07
- Part 2: For the preceding part double click ID:nRSW9299Fa
Total comprehensive loss attributable to equity
shareholders of the Parent arises from:
- Continuing operations (14,258) (515)
- Discontinued operations (3,799) 443
(18,057) (72)
Note 2017£'000 2016£'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 (2.53) 0.00
From continuing operations 15 (2.04) (0.09)
From discontinued operations 15 (0.49) 0.09
Diluted (loss)/earnings per share (2.53) 0.00
From continuing operations 15 (2.04) (0.09)
From discontinued operations 15 (0.49) 0.09
* Adjusted for strategic, integration, other one-off items (note 3) and share-based payment charge.
Registered company number (England): 5429800
Consolidated statement of financial position
As at 31 January 2017
*Restated
Note 2017£'000 2016£'000
Assets
Non-current assets
Intangible assets including goodwill 5 11,968 18,900
Property, plant and equipment 1,057 1,638
Interests in associates 6 - 1,577
Total non-current assets 13,025 22,115
Current assets
Trade and other receivables 7 8,929 10,815
Current income tax receivable - 391
Cash and cash equivalents 8 1,285 4,996
Total current assets 10,214 16,202
Assets of disposal group classified as held for sale 9 547 -
Total assets 23,786 38,317
Liabilities
Current liabilities
Bank borrowings (681) -
Trade and other payables 10 (12,072) (10,686)
Current income tax liabilities (23) -
Obligations under finance leases (11) -
Provisions 11 (242) (385)
Total current liabilities (13,029) (11,071)
Non-current liabilities
Obligations under finance leases (53) -
Defined benefit pension obligation (614) (457)
Deferred tax 12 (421) (1,122)
Total non-current liabilities (1,088) (1,579)
Liabilities of disposal group classified as held for sale 9 (447) -
Total liabilities (14,564) (12,650)
Net assets 9,222 25,667
Share capital and reserves
Share capital 13 16,449 16,223
Share premium account 13 22,931 22,264
Own shares held 13 (303) (306)
Equity-settled employee benefits reserve 13 3,254 2,688
Merger reserve 13 15,347 15,347
Reverse acquisition reserve 13 (11,584) (11,584)
Currency translation reserve 13 (142) (432)
Accumulated losses (36,992) (18,533)
Total equity attributable to shareholders of the parent 8,960 25,667
Non-controlling interests 262 -
Total equity 9,222 25,667
* During the course of the integration of the Enables IT group, additional
loss-making contract provisions were identified as being required on
acquisition. As these were identified within 12 months of the acquisition,
they have been reflected as fair value adjustments at acquisition in
accordance with IFRS 3, 'Business combinations'. The adjustment has been to
increase goodwill and provisions by £41,000.
Consolidated statement of changes in equity
For the year ended 31 January 2017
£'000 Share capital Share premium account Own shares held Equity-settled employee benefits reserve Merger reserve Reverseacquisitionreserve Currency translation reserve Accumulated losses Total equity attributable to shareholders of the parent Non-controlling interest Total equity
Balance at 1 February 2015 15,572 20,608 (306) 1,711 13,900 (11,584) (292) (18,601) 21,008 - 21,008
Comprehensive (loss)/income
Profit for the year - - - - - - - 12 12 - 12
Other comprehensive income/(loss)
Actuarial gains arising on defined benefit pension - - - - - - - 56 56 - 56
Exchange differences on translating foreign operations - - - - - - (140) - (140) - (140)
Total other comprehensive (loss)/income - - - - - - (140) 56 (84) - (84)
Total comprehensive (loss)/income - - - - - - (140) 68 (72) - (72)
Transactions with owners
Proceeds from shares issued (note 13) 651 1,656 - - 1,447 - - - 3,754 - 3,754
Recognition of share-based payments - - - 977 - - - - 977 - 977
651 1,656 - 977 1,447 - - - 4,731 - 4,731
Balance at 31 January 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 income/(loss)
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 (loss)/income - - - - - - 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 interestNon-controlling interest arising on acquisition - - - - - - - - - 150 150
- - - - - - - - - 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
Consolidated statement of cash flows
For the year ended 31 January 2017
Note 2017£'000 2016£'000
Cash flows from operating activities
Cash used in operations (a) (1,061) (721)
Interest received 3 74
Interest paid (169) (105)
Tax received 425 55
Net cash used in operating activities (802) (697)
Cash flows from investing activities
Acquisition of subsidiary (net of cash acquired) 9 (852) 465
Cash disposed with subsidiary (48) -
Acquisition of investment in associate 6 - (1,498)
Purchase of property, plant and equipment (574) (841)
Proceeds from sale of property, plant and equipment 84 52
Proceeds from sale of building (asset previously held for sale) - 687
Expenditure on product development and intellectual property capitalised (3,552) (3,011)
Net cash used in investing activities (4,942) (4,146)
Cash flows from financing activities
Repayment of borrowings - (438)
Net proceeds of share issue 13 896 1,940
Net cash generated from financing activities 896 1,502
Net decrease in cash and cash equivalents (4,848) (3,341)
Cash and cash equivalents at start of year 4,996 8,250
Less cash and cash equivalents in assets held for sale (51) -
Effects of foreign exchange on cash and cash equivalents 507 87
Cash and cash equivalents at end of year (b) 604 4,996
Cash flows of discontinued operations included above
2017£'000 2016£'000
Net cash generated from/(used in) operating activities 434 (217)
Net cash used in investing activities (668) (344)
Total (234) (561)
Notes to the consolidated statement of cash flows
(a) Cash used in operations
Note 2017£'000 2016£'000
Loss before tax including discontinued operations (19,455) (491)
Adjustments for:
Share of net loss of associates 266 421
Net finance cost 176 31
Depreciation 795 427
Amortisation and impairment of intangible assets 14,445 1,474
Share-based payment charge 566 977
Net foreign exchange movement (544) (202)
Loss on disposal of building (asset previously held for sale) - 272
Loss on disposal of property, plant and equipment 33 18
Decrease/(increase) in trade and other receivables 2,233 (3,012)
Increase in trade and other payables 538 134
Decrease in provisions (155) (1,283)
Increase in defined benefit pension obligation 41 513
Cash used in operations (1,061) (721)
(b) Reconciliation of net cash flow to movement in net funds
2017£'000 2016£'000
Decrease in cash in the year (4,848) (3,341)
Net cash outflow in respect of borrowings paid - 438
Changes resulting from cash flows (4,848) (2,903)
Less cash and cash equivalents in assets held for sale (51) -
Effect of foreign exchange 507 82
Change in net funds (4,392) (2,821)
Net funds at beginning of year 4,996 7,817
Net funds at end of year 604 4,996
Analysis of net funds
Cash and cash equivalents classified as:
Current assets 1,285 4,996
Bank and other loans (681) -
Net funds at end of year 604 4,996
Notes to the preliminary information
For the year ended 31 January 2017
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 preliminary
information is 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 2016.
The results shown for the year ended 31 January 2017 and 31 January 2016 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 2017 were approved by the Board of directors
on 22 May 2017 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. (previously Laser Scan Inc.)) and Cloud, (Avisen,
Enables IT, Storage Fusion 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 previously operated by the Group, of Avisen and Storage Fusion.
Avisen, Enables IT Inc. and Storage Fusion have been treated as discontinued
operations in this preliminary information, 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.
2. Segmental information
The segment information provided to the Board for the reportable segments for
the year ended 31 January 2017 is as follows:
31 January 2017 Central costs£'000 Geospatial£'000 Cloud£'000 Total£'000
Revenue - 15,133 6,932 22,065
Cost of sales - (6,868) (5,518) (12,386)
Gross profit - 8,265 1,414 9,679
Total administrative expenses (5,157) (18,758) (1,214) (25,129)
Adjusted EBITDA (2,352) 1,478 467 (407)
Less: depreciation (57) (240) (155) (452)
Less: amortisation and impairment of intangible assets - (11,323) (85) (11,408)
Less: share-based payment charge (550) (16) - (566)
Less: strategic, integration and other one-off items (2,198) (392) (27) (2,617)
Total operating (loss)/profit (5,157) (10,493) 200 (15,450)
Finance income - 176 - 176
Finance cost (116) (85) (7) (208)
Net finance (cost)/income (116) 91 (7) (32)
Share of net loss of associates accounted for using the equity method - (39) (227) (266)
Loss before tax (5,273) (10,441) (34) (15,748)
Tax - 1,081 (93) 988
Loss for the year (5,273) (9,360) (127) (14,760)
Loss for the year from discontinued operations - - (3,542) (3,542)
Loss 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) (127) (14,760)
- Discontinued operations - - (3,542) (3,542)
(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 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 2017 with
respect to total assets and total liabilities are measured in a manner
consistent with that of the preliminary information. 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 2016 Central costs£'000 Geospatial£'000 Cloud£'000 Total£'000
Revenue - 15,957 2,305 18,262
Cost of sales - (6,172) (1,505) (7,677)
Gross profit - 9,785 800 10,585
Total administrative expenses (3,216) (7,480) (562) (11,258)
Adjusted EBITDA (2,105) 4,659 348 2,902
Less: depreciation (74) (220) (68) (362)
Less: amortisation and impairment of intangible assets - (1,114) (42) (1,156)
Less: share-based payment charge (690) (286) - (976)
Less: strategic, integration and other one-off items (347) (734) - (1,081)
Total operating (loss)/profit (3,216) 2,305 238 (673)
Finance income 9 65 - 74
Finance cost (3) (95) (3) (101)
Net finance income/(cost) 6 (30) (3) (27)
Share of net loss of associates accounted for using the equity method - (148) (273) (421)
(Loss)/profit before tax (3,210) 2,127 (38) (1,121)
Tax - 495 8 503
(Loss)/profit for the year (3,210) 2,622 (30) (618)
Profit for the year from discontinued operations - - 630 630
(Loss)/profit for the year attributable to: (3,210) 2,622 600 12
Equity holders of the parent (3,210) 2,622 600 12
Non-controlling interest - - - -
(3,210) 2,622 600 12
(Loss)/profit for the year from:
- Continuing operations (3,210) 2,622 (30) (618)
- Discontinued operations - - 630 630
(3,210) 2,622 600 12
31 January 2016 Central costs£'000 Geospatial£'000 Cloud£'000(restated*) Total£'000
Segment assets 1,304 28,536 8,477 38,317
Segment liabilities (1,241) (8,132) (3,277) (12,650)
Segment net assets 63 20,404 5,200 25,667
* During the course of the integration of the Enables IT group, additional
loss-making contract provisions were identified as being required on
acquisition. As these were identified within 12 months of the acquisition,
they have been reflected as fair value adjustments at acquisition in
accordance with IFRS 3, 'Business combinations'. The adjustment has been to
increase goodwill and provisions by £41,000.
The following table provides an analysis of the Group's non-current assets
located in all countries in which the entity holds assets.
2017£'000 2016(restated*)£'000
United Kingdom (being the Company's country of domicile) 8,965 11,650
Europe 1,498 7,406
United States 2,556 3,047
Rest of World 6 12
13,025 22,115
The following table represents major customers where revenues exceed 10% of the Group's revenue.
Operating segment 2017£'000 2016£'000
Customer 1 Cloud 5,300 -
The Group's operations are located in the UK, Ireland, Australia, the United
States and mainland Europe. The following table provides an analysis of the
Group's revenue by geographical destination.
2017Continuing£'000 2017Discontinued£'000 2017Total£'000 2016Continuing£'000 2016Discontinued£'000 2016Total£'000
United Kingdom 11,293 565 11,858 8,609 1,215 9,824
Europe 6,479 2 6,481 5,905 1 5,906
United States 2,653 1,738 4,391 1,392 881 2,273
Rest of World 1,640 230 1,870 2,356 379 2,735
22,065 2,535 24,600 18,262 2,476 20,738
The following table provides an analysis of the Group's revenue by country of
domicile.
2017Continuing£'000 2017Discontinued£'000 2017Total£'000 2016Continuing£'000 2016Discontinued£'000 2016Total£'000
United Kingdom 12,442 797 13,239 11,023 1,595 12,618
Europe 6,121 - 6,121 6,222 - 6,222
United States 2,262 1,738 4,000 171 881 1,052
Rest of World 1,240 - 1,240 846 - 846
22,065 2,535 24,600 18,262 2,476 20,738
The following table provides an analysis of the Group's revenue by category.
2017Continuing£'000 2017Discontinued£'000 2017Total£'000 2016Continuing£'000 2016Discontinued£'000 2016Total£'000
Licences 1,458 69 1,527 2,713 199 2,912
Services 7,872 995 8,867 7,080 1,421 8,501
Support and maintenance 8,770 1,223 9,993 7,418 779 8,197
Products 3,965 248 4,213 882 77 959
Other - - - 169 - 169
22,065 2,535 24,600 18,262 2,476 20,738
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:
2017£'000 2016£'000
Costs associated with corporate transactions and other strategic costs 228 630
Integration costs associated with Enables IT and 1Spatial Inc. business 121 121
Loss-making contract release in Belgium - (254)
Defined benefit pension provision in France - 454
Loss on sale of building in Belgium - 272
System development costs 105 11
Restructuring and redundancy costs 844 129
Provision for amount receivable from Sitemap Ltd 1,334 -
Release of liability for sales tax exposure - (411)
Other (15) 129
Total 2,617 1,081
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 on the acquisition of Enables IT and 1Spatial Inc.
include rebranding costs and other costs of aligning operating strategies and
sales and marketing strategies.
In the previous year we identified additional costs related to the defined
benefit pension scheme operated by 1Spatial France, the subsidiary acquired in
June 2013. The Group revised its approach to estimating the liability in that
year which gave rise to the increased cost. This year there is no such
exceptional cost; the associated costs and income have been recognised within
administrative costs, finance costs and other comprehensive income.
During the year the Group invested a significant amount in redesigning its
website and HR system.
Substantial cost was incurred in the year to restructure the Group and the
Board of Directors; compensation for loss of office of £375,000 has been
included in the amount above.
The Group provided for amounts due from associate Sitemap Ltd totalling
£1,334,000 in the year; these amounts relate to funding the activities of
Sitemap Ltd.
4. Income tax charge/(credit)
2017£'000 2016£'000
Current tax
UK corporation tax on income for year - 45
Foreign tax 33 39
Adjustments in respect of prior years (22) (175)
Total current tax 11 (91)
Deferred tax (note 12)
Origination and reversal in temporary differences (960) (412)
Effect of decreased tax rate on opening deferred tax position (39) -
Total deferred tax (999) (412)
Total tax credit (988) (503)
Factors affecting the tax credit for the year:
The tax assessed for the year is higher (2016: lower) than the standard rate
of corporation tax in the UK. The differences are explained below:
2017£'000 2016£'000
Loss on ordinary activities before tax (15,748) (1,121)
(15,748) (1,121)
Loss on ordinary activities before tax multiplied by the effective rate of corporation tax in the UK of 20% (2016: 20.16%) (3,150) (226)
Effect of:
Expenses not deductible for tax purposes 1,452 240
Income not taxable - (193)
Overseas tax rates higher than UK tax rates (530) (147)
Tax losses for which no deferred tax asset was recognised 1,198 76
Adjustments in respect of prior years (22) (175)
Impact of change in tax rate 64 (78)
Total tax credit for year (988) (503)
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
*Restated
Goodwill £'000 Brands £'000 Customers andrelated contracts£'000 Software £'000 Developmentcosts £'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 - 23 366 436 1,212 - - 2,037
Amortisation - discontinued operations - - 46 - 307 - - 353
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 at31 January 2017 4,977 113 1,161 1,024 4,653 - 40 11,968
* During the course of the integration of the Enables IT group, additional
loss-making contract provisions were identified as being required on
acquisition. As these were identified within 12 months of the acquisition,
they have been reflected as fair value adjustments at acquisition in
accordance with IFRS 3, 'Business combinations'. The adjustment has been to
increase goodwill and provisions by £41,000.
*Restated
Goodwill £'000 Brands £'000 Customers andrelated contracts£'000 Software £'000 Developmentcosts £'000 Website costs £'000 Intellectual property £'000 Total £'000
Cost
At 1 February 2015 13,268 232 2,357 4,053 5,635 30 18 25,593
Arising on acquisition of Enables IT 1,348 - 1,307 - - - - 2,655
Additions - - - - 3,003 - 8 3,011
Effect of foreign exchange (106) - 16 6 80 - - (4)
At 31 January 2016 14,510 232 3,680 4,059 8,718 30 26 31,255
Accumulated impairment and amortisation
At 1 February 2015 6,355 73 567 1,958 1,881 30 - 10,864
Amortisation - 23 287 409 755 - - 1,474
Effect of foreign exchange - - 5 3 9 - - 17
At 31 January 2016 6,355 96 859 2,370 2,645 30 - 12,355
Net book amount at31 January 2016 8,155 136 2,821 1,689 6,073 - 26 18,900
The net book amount of development costs includes £4,653,000 (2016:
£6,073,000) internally generated capitalised software development costs that
meet the definition of an intangible asset. The amortisation charge of
£2,037,000 (2016: £1,474,000) 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 1Spatial and 1Spatial France and 1Spatial
Belgium's 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.
2017 2016
Goodwill Avisen & Enables IT£'000 1Spatial£'000 1Spatial France / Belgium£'000 Total£'000 *RestatedAvisen & Enables IT£'000 1Spatial£'000 1Spatial France / Belgium£'000 Total£'000
Opening NBA 1,073 3,960 3,122 8,155 339 3,346 3,228 6,913
Arising on acquisition - 2,310 -
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