1Spatial Holdings Regulatory News (SPA)

24 September 2013

1Spatial plc (AIM: SPA)

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

Interim Results for the six month period ended 31 July 2013

The Board of Directors of 1Spatial (the ''Board''), the Spatial Big Data company listed on AIM ispleased to announce the Company's unaudited Interim Results for the six month period ended 31 July 2013.

Financial highlights

· Revenue from operations increased 18% to £7.6m (H1 2012: £6.4m)

· Significant increase in overall Adjusted* EBITDA on the prior period with an increase of 2255% to £0.5m (H1 2012: £20k)

· Improved underlying result of loss after tax £0.5m (H1 2012: loss of £1.1m)

· Successful placing raising £17.1m (net of expenses) to support future growth strategy

· Acquisition of 90% of Star-Apic for £5.2m

· Period end net cash position of £14.2m

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

Operational highlights

· Share placing raising £17.1m 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; and

- product development, marketing and further potential acquisition opportunities

· David Richards appointed as Deputy Non-Executive Chairman

· Delivery of 1Spatial Management Suite (1SMS) at Ordnance Survey Ireland (OSi)

· Continued delivery on US Census contract providing core infrastructure spatial technology enabling Census to lay the foundations for the 2020 decennial census

· Star-Apic selected to provide its Elyx Smart City solution to manage the water, sewage and electricity networks for the municipalities of Rabat, Tangier and Tetouan in Morocco. The contract is worth approximately €1.4m and will be delivered during this and the next financial year.

· Successful initial 'on-boarding' of the Star-Apic acquisition and development of a robust integration plan

· 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

Post Period-End Highlights

· Today, 24th September 2013, 1Spatial launches its 1Spatial Management Suite (1SMS) for general release at the Asia Geospatial Forum in Malaysia. This innovative data management solution enables users to efficiently plan, maintain and publish large amounts of spatial data, whilst automating production workflows.  

Commenting on the results CEO, Marcus Hanke, said:

 "1Spatial has entered an exciting growth phase following a successful placing and a highly complementary acquisition, helping to move 1Spatial's strategic development forward and expand the business.

It is the Board's view that the Company is well placed to capitalise on opportunities in the spatial Big Data market particularly with the today's general release of 1SMS and the other exceptional product offerings that it has along with a strong management team. 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 has increased the scale to the business as well as future growth opportunities with management working over the rest of the financial year implementing the robust integration plan.

The Board is encouraged by the progress made during this half year and we look forward to the future with confidence."

Chairman's Statement

1Spatial is a software and solutions provider to national mapping and charting agencies, utility 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 is to be a key provider of Spatial Big Data Solutions providing end users of data with both assurance over its quality, and insight into its significance. 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.

I am delighted to present the results of the Group for the six month period ended 31 July 2013 which reports revenues of £7.6m and an Adjusted* EBITDA of £0.5m. The results for the period demonstrates growth in both revenues and profits and the Company has a strong balance sheet following a share placing raising £17.1m in June to support the Group's future strategy and growth plans.

The company's long term growth strategy is based on maximising the opportunities in the 1Spatial business. In line with this strategy, the Group acquired 90% of Star-Apic for £5.2m of cash in June 2013. The Directors believe that Star-Apic is an important and highly complementary 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 and vice-versa.

During the period there has been a successful initial 'on-boarding' of the Star-Apic acquisition. The management team expects the integration to be completed by the start of the new financial year. Key points of the integration include:

· Integrated product roadmap across the Group maximising 'Best of Breed' Technology from both 1Spatial and Star Apic

· Synergy across customer base

· Value Proposition and Go to Market Strategies

· Organisation structure based on optimising key capabilities across the Group

· Change management process

· Business operational processes and tools aligned for One Version of the Truth across the Group

· Brand migration plan

David Richards, CEO of WANdisco plc, has also joined the Board as Deputy Non-Executive Chairman, bringing over 15 years' experience in the Software industry to the Group. David's insight into the US market, will help 1Spatial's to target opportunities in this high potential growth market. I welcome him to the Board during this exciting period of growth for 1Spatial.

I reported in my full year statement that the company won two strategically important contracts, Ordnance Survey Ireland (OSi), and US Census. For OSi, OSi is 1Spatial's flagship first customer for the new 1Spatial Management Suite (1SMS), providing the company with an 'end to end' National Mapping Solution, which was delivered in July 2013. We continue to provide core infrastructure spatial technology to US Census, allowing them to lay the foundations for the 2020 decennial census. Our contract with the US Census has gone from strength to strength this period. With the large, complex, mission critical and growing spatial data that Census holds, we have quickly positioned ourselves as a strategic partner.

In addition Star-Apic secured a notable contract win to deliver its Elyx Smart City solution to manage the water, sewage and electricity networks for the municipalities of Rabat, Tangier and Tetouan in Morocco. The contract, was won following a competitive international tender, is valued at €1.4m and relates to the provision of software and services, which will be delivered over the next 12 to 14 months.

During the period, we have continued to develop our product offering. We are particularly excited about our next generation products in the 1SMS and Star-Apic's Elyx software. 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. We will be continuing to invest in our 1SMS product suite and Star-Apic during the course of this year.

Whilst the integration of Star-Apic will be a key area of focus over the next few months, the management team have a key objective to promote market awareness of 1SMS following the launch of the product and where appropriate integrating Star-Apic products. Key events where the technology will be presented are;

• Geospatial World Forum in Malaysia - This is a core industry event and will be used as a launch pad for the 1SMS product

• Spatial Big Data Roadshows - These Roadshows are being run by the 1Spatial team and will start in London in October 2013 with events taking place in Manchester and Dublin in early 2014.

• WALIS Forum Perth - Senior local and central government event where the 1Spatial team will be showcasing 1SMS. This will take place in November 2013.

• Smart Cities Expo in Barcelona in November 2013 where 1Spatial will be showcasing a new go to market offering around Smart Cites which includes product across the portfolio of both Star-Apic and 1Spatial.

Fusion continue to focus on its core competencies in each relevant market and continue to leverage the long-term healthy relationships they have with key customers such as Unisys and Unilever while continuing to innovate product offerings.

Lastly, I would like to thank the management team and all of our employees for their hard work and dedication and welcome the Star-Apic employees to the Group.

Financial position

Group revenue for the period was £7.6m up from £6.4m in the 6 months to July 2012. The main reason for this increase was the inclusion of 1.5 months of revenue from the Star-Apic acquisition of £0.9m and also increased revenues in the 1Spatial business of £0.5m on the prior period. Revenues from Avisen and Storage Fusion were slightly down on the prior year however overall Adjusted* EBITDA profitability was up for these two businesses following a reduction in direct costs and overheads on the prior period.

All trading businesses, namely 1Spatial, Star Apic, Avisen and Storage Fusion made positive adjusted EBITDA contributions to the Group. Overall, the Group has recorded a significantly improved Adjusted* EBITDA profit on the prior period of £0.5m compared to £20k in the previous period.

The overall net loss for the year after tax is £0.3m (2012: loss of £1m). This is following £0.4m of amortisation and depreciation (2012: £0.6m) and Strategic and Integration costs of £0.5m (2012: 0.3m) mainly in relation to the acquisition and integration of Star-Apic.

We have a strong balance sheet as at 31 July end following the share placing. After the acquisition of Star-Apic we have £14.2m of net cash in the business. Net cash used in operating activities for the period was £0.9m which arose mainly as a result of cash outflows on exceptional items such as costs of acquisition of Star-Apic and working capital movements. Due to the nature of some of the larger contracts, there can be significant fluctuations on the cash inflows from debtors which has an effect on the working capital, for example just before the end of 31 January 2013, a large debtor paid c£0.8m which had a positive effect on the working capital for that period.

Taking each business segment in turn, I can comment on the results as follows:

1Spatial Business

Revenues in the 1Spatial business are up by 10% on the prior year to £5.5m. This is mainly as a result of the growth in licence sales in the period compared to the prior period. This has had a direct impact on the gross profit margin which has improved from 42% to 52%. The overheads have remained broadly static at £2m. This is a combination of cost reductions in certain areas coupled with pay rises and investment in areas such as sales and marketing. The overall Adjusted EBITDA was up by 92% to £1.3m.

Avisen

Avisen revenues were down on the previous period by 23% to £0.9m. Following this drop, the workforce was reduced accordingly. Management have good visibility over the pipeline of revenues in the Avisen business and have a team of contractors, which they can use to fulfil the pipeline requirements rather than having a fixed overhead cost which is difficult to manage. The Adjusted EBITDA was an increase of 65% to £0.1m on the prior year.

Storage Fusion

Revenues and adjusted EBITDA have remained broadly static compared to the prior year. Management will continue to review strategic options with regards to this business.

Head office costs

Head office costs of £1.1m (before exceptionals) are broadly in line with the full year figure for the financial year 2013 (£2m). There has been some additional cost in this year with regards to marketing and listing costs as the group seeks to grow its profile.

Strategy and reorganisation

In the last annual report, our long term stated strategy was to continue to grow organically and through acquisitions, 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 half year. 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 Group will continue to identify and assess opportunities for organic and acquisitive growth in strategic geographies to align to our strategy.

Conclusion and outlook

We are now in an exciting growth phase following a successful placing and a highly complementary acquisition, helping to move 1Spatial's strategic development forward and expand 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 has increased the scale of the business as well as future growth opportunities with management working over the rest of the financial year implementing the robust integration plan.

The Board is encouraged by the progress made during this half year and we look forward to the future with confidence.

S Berry

Chairman

24 September 2013

* Total equity attributable to the equity shareholders of the parent.

* Total equity attributable to the equity shareholders of the parent.

Net of disposal costs and cash balance disposed.

Cash flows from discontinued operations can be summarised for each of the main cash flow headings as follows:

Notes to the condensed consolidated statement of cashflows

Notes to the Interim Financial Statements

1 Principal activity

1Spatial plc is a public limited company which is listed on the AIM London Stock Exchange and is incorporated and domiciled in the UK. The address of the registered office is Pannell House, Park Street, Guildford, GU1 4HN. The registered number of the company is 5429800.

The principal activity of the Group is a management consultancy and software business that provides companies with advice and solution in order to enhance overall profitability.

2 Basis of preparation

The condensed consolidated interim financial information for the six months ended 31 July 2013, has been prepared in accordance with the accounting policies that are expected to be adopted in the Group's full financial statements for the year ended 31 January 2014 and are not expected to be significantly different to those set out in the Group's audited financial statements for the year ended 31 January 2013.

The financial information for the half years ended 31 July 2013 and 31 July 2012 is neither audited nor reviewed and does not constitute statutory financial statements within the meaning of section 434(3) of the Companies Act 2006 for 1Spatial plc or for any of the entities comprising the 1Spatial Group.

Statutory financial statements for the preceding financial year ended 31 January 2013 were filed with the Registrar and included an unqualified auditors' report.

After making enquiries, the directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the half-yearly condensed consolidated financial statements.

New and amended standards adopted by the Group

The following amendments to existing standards and new interpretations became effective during the current period, but have no significant impact on the Group's financial statements:

· IFRS 1 (Amended), "First Time Adoption"; · IFRS 10 (Amended), "Consolidated Financial Statements"; · IFRS 11 (Amended), "Joint Arrangement";

· IFRS 12 (Amended), "Disclosure of Interest in Other Entities";

· IFRS 13 (Amended), "Fair Value Measurement";

· IAS 19 (Amended), "Employee Benefits".3 Taxation

The tax expense on the profit for the six months ended 31 July 2013 is based on the estimated tax rates in the jurisdictions in which the Group operates, for the year ending 31 January 2014.

4 (Loss )/Earnings per share

Basic (loss)/earnings per share is calculated by dividing the profit/(loss) attributable to equity holders of the company by the weighted average number of ordinary shares in issue during the period.

5 Dividends

No dividend is proposed for the six months ended 31 July 2013 (31 January 2013: nil; 31 July 2012: nil).

6 Segmental information