1Spatial Holdings Regulatory News (SPA)

28 October 2011

Avisen plc (AIM: AVI)

("Avisen", the "the Group" or "Company")

Interim Results for the six month period ended 31 July 2011

The directors of Avisen (the ''Board'')(AIM:AVI), the business technology and profit improvement specialist, is pleased to announce the Company's unaudited interim results for the six month period ended 31 July 2011.

Highlights

Current year

Financial highlights

·; Turnover from continuing operations increased by 53 per cent to £2.6m (6 months 2010: £1.7m)

·; Adjusted* EBITDA from continuing operations of £0.6m (6 months 2010: loss of £0.5m)

·; Overall profit for the period after tax of £0.8m, (6 months 2010: loss of £6.6m after impairment of £4.5m in relation to the acquisition of Xploite plc)

·; Strong balance sheet at 31 July 2011 with £2.9m of cash and no debt (31 January 2011 net cash of £0.2m)

·; The Avisen trading business generated revenues of £2.5m and adjusted* EBITDA of £1m

·; The Storage Fusion trading business generated revenues of £0.2m and broke even at an adjusted* EBITDA level

·; Disposed of Inca Software Limited (''Inca'') for £7.3m of cash resulting in an accounting profit on disposal of £0.4m, following the write-off of goodwill and intangible assets of £7.6m

*Adjusted for strategic, integration and other one off items

Operational highlights

·; In July, a contract was signed with Unilever plc (''Unilever'') to supply a global cost to serve solution, demonstrating Avisen's ability in the 'Big Data' market

·; Storage Fusion finalised the development of the Portal enabled Storage Resource Analysis ("SRA") product, which will enable it to be sold as 'Software as a Service'' (''SaaS'')

·; In June, Storage Fusion signed a sales contract with a global information technology company for its SRA Software product

Post Balance Sheet Highlights

·; On 7 October 2011, the Company announced a transaction to acquire the entire issued share capital of 1Spatial Holdings plc (''1Spatial'') for a consideration £4.7m to be satisfied by the issue of shares in Avisen ("the Transaction"). Subject to, inter alia, various shareholder approvals, the scheme is expected to become effective on 25 November 2011

·; In September, Storage Fusion signed a further two contracts, with a US Storage Consultant and another global technology company

Commenting on the results, Marcus Hanke, CEO of Avisen, says:

"We have demonstrated successful trading performance during the period as well as securing a number of key contracts. This gives us a strong platform for growth going forward. We are excited for the future and feel confident that, subject to completion of the 1Spatial Transaction, the enlarged group will be well positioned for growth and the generation of increased shareholder value''

For further information, please contact:

Chairman's statement

I am pleased to present the results of the group for the six month period ended 31 July 2011. We have had a successful first half of the year both from a results perspective and from a strategic perspective. Comparing the 6 months for July 2010 to the 6 months to July 2011, all of our performance measures have improved. Most notably, our overall profit after tax from total operations has improved from a £6.6m loss in 2010 to a £0.8m profit in 2011.

In my July 2011 Chairman's statement I commented on our future, which would be to invest in our current businesses and actively pursue acquisition opportunities. I am pleased to report that we have been taking great steps in the right direction to achieve this, with investment in both the Avisen trading business and Storage Fusion, giving rise to success and more recently the announcement of the proposed Transaction with 1Spatial.

We are very excited about the Transaction. Avisen had secured a strong financial position following the disposal of Inca and signing the Unilever contract. We needed to add scale to our business but also wanted a business which had significant Intellectual Property Rights in its own right and combined with Avisen would provide a leveraged opportunity. We considered a number of opportunities before deciding that 1Spatial was a prospect where we felt that there would be the greatest ability to extract value across the new combined group. Subject to certain conditions and various shareholder approvals, the Transaction is due to complete on 25 November 2011 and, should it do so, we will able to include two months trading results of 1Spatial in our year end results to 31 January 2012.

Overall results for the six months to July 2011 (with comparison to July 2010)

Results from continuing operations for the six month period ended 31 July 2011 include turnover of £2.6m (6 months 2010: £1.7m), adjusted EBITDA of £0.6m (6 months 2010: loss of £0.5m) and a profit for the period after tax of £0.4m (6 months 2010: loss of £6.5m following a one off impairment charge of £4.5m on the acquisition of Xploite plc).

Overall net profits for the period including both continuing and discontinued operations were £0.8m (6 months 2010: loss of £6.6m). Adjusted profit per share was 0.26 pence (6 months 2010: loss was 0.13 pence) and basic profit per share from continuing operations was 0.18 pence, (6 months 2010: loss was 3.45 pence).

Avisen UK

During the first half of this year we invested heavily in securing the Unilever 'Global Cost to Serve' contract for its global supply chain and customer service function. This was a pivotal contract which demonstrated that we could deliver a 'Cost to Serve' solution to a world leading company. The increasing focus on 'Big Data', analysing large data sets, is set to become a key basis of competition, underpinning new waves of productivity growth, innovation, and consumer surplus going forward. It was therefore imperative that we secured this contract which provides the blueprint for future sales in this area. The contract will provide a number of revenue streams including licence fees, support and maintenance fees, managed service fees and consultancy fees for an initial period of three years. During the period we have also worked with a number of blue chip clients developing proof of concept 'Cost to Serve' solutions. As well as delivering these 'Cost to Serve' solutions, we have also been working with our other key customers during the period including Atkins and Tesco Direct.

The un-predictable nature of revenue and the significant lead time from initial customer interest to fulfilment is an unavoidable factor of our business. However, the Board has a strong belief in the management team's ability to secure and fulfil new contracts, particularly following the success of the Unilever contract and I am pleased that we can see a pipeline of opportunities arising for the future.

Avisen's revenue in the period improved by 49% compared with the previous period to £2.5m (6 months 2010: £1.7m). The primary driver for the increase was the recognition of the Unilever licence revenues. Improved gross margins and cost control gives an Adjusted EBITDA profit of £1.0m for the 6 month period (6 months 2010: £0.3m). This is an increase of 233% on the prior period at the adjusted EBITDA performance level.

Storage Fusion

We have also invested heavily in our Storage Fusion business to extend the vendor storage arrays we support, and to develop a portal to enable our SRA product to be delivered as a true ''software as a service'' solution. This is the first portal enabled storage assessment service in the market place. The product is now starting to generate genuine traction in the market place; which is demonstrated by the significant amount of interest from a number of global storage vendors and the signing of three major contracts in the last four months (June to September). The sales pipeline is very strong, however we have been limited by resources and have therefore taken steps to recruit additional staff to meet the demand.

Storage Fusions' revenue in the period was £0.2m, as compared with £0.1m in the corresponding period last year (Storage Fusion was acquired on 27 April 2010). There is therefore low revenue growth year on year, however as noted above, there were some key contracts signed very recently, the impact of which is not fully reflected in these results.

Storage Fusion made a small adjusted EBITDA loss in the period of £0.1m (2010: adjusted EBITDA profit of £0.1m). The overhead cost amounting to £0.2m was slightly increased on the prior year; One key aspect of the Storage Fusion business is that any new sales contracts won have a significant effect on profitability as there is no direct cost of sale associated with the transaction.

Head office costs

Total head office costs in the period have reduced to £0.3m from £0.8m in the previous comparative period. This is as a result of closely monitoring, reviewing and cutting head office costs. In addition, in 2010, there were a number of Directors on the Board, following the Xploite transaction, who left at the end of July 2010.

Inca software

Avisen disposed of Inca Software on 1 April 2011. The Inca business comprised two acquisitions made in 2009 for a total consideration of £4m in Avisen plc shares. Avisen plc was approached in December 2010 with a cash offer for the business of £7.3m (£6m on completion and £1.3m on 1 April 2012). The overall gain on disposal following the write off of goodwill and intangible assets of £7.6m was £0.4m.

The Board believed that it was in the best interests of the shareholders to accept this offer. Our decision to accept the offer was influenced by the constant margin pressure the division faced and our concerns surrounding our ability to scale the business and be up to date with the latest SaaS technologies without further significant investment. We have used the cash to invest in both Avisen and Storage Fusion and going forward will use it to invest in 1Spatial, subject to the successful completion of the Transaction.

In the two month period prior to disposal, Inca was break even at a post-tax position.

Consolidated statement of financial position

The assets and liabilities of Inca are classified as 'Held for sale' in the January 2011 numbers. Following the disposal of Inca in April 2011, these assets and liabilities do not form part of the Avisen group balance sheet as at 31 July 2011.

Non-current assets £3.1m at 31 July 2011 (£3.0m at 31 January 2011)

The main component of non-current assets is goodwill and intangible assets in relation to the Storage Fusion business. The main movements on the balance are capitalisation of research & development costs of £0.2m and amortisation of £0.2m.

Current assets (including cash) of £8.2m (£1.6m at 31 January 2011)

Total current assets comprise trade and other receivables of £5.3m (January 2011: £1.2m) and cash of £2.9m (January 2011: £0.4m). The increase in trade and other receivables of £4.1m is predominately due to an increase in trade receivables (mainly in respect of the Unilever contract) and £1.3m of deferred consideration receivable from the disposal of Inca.

The increase in the cash balance is due to the net proceeds received on the sale of Inca less costs resulting from investment in Avisen and Storage Fusion over the last few months. More details on the cash flow are given below.

Current liabilities of £3.2m (£3.3m at 31 January 2011)

Following the receipt of the cash from the disposal of Inca, trade and other payables have reduced by £0.1m. The group does not have any current tax liabilities or borrowings at 31 July 2011.

Non-current liabilities of £0.3m (£0.3m at 31 January 2011)

At 31 July 2011, this balance relates to a deferred tax liability of £0.3m. At 31 January 2011 this balance comprised 0.2m of deferred tax and £0.1m of borrowings (now repaid).

Share capital and reserves of £7.8m (£7.0m at 31 January 2011)

The only movement within share capital and reserves from January 2011 is the profit made by the group of £0.8m.

Statement of cashflows

The group had cash of £2.9m and no debt as at 31 July 2011 (31 January 2011: Net cash of £0.2m). The most significant inflow in the period was the cash inflow from the sale of Inca of £5.4m (after costs and net of cash balance transferred with Inca). The main cash outflow in the period is with respect to operations, of £2.9m. Following the receipt of the Inca cash we paid off certain long-standing liabilities and used the remainder of the cash to invest in securing the Unilever contract. The nature of our business is that we have significant upfront costs in securing contracts in terms of salary and wages costs of our consultants, who will deliver the 'Proof of concept' to the client. In addition, we encounter long credit terms with the majority of our customers, which has a negative effect on working capital as the majority of our costs are payable immediately. We also invested £0.2m in research and development to continue our development of our SRA software and portal in our Storage Fusion business.

Conclusion and outlook

We have had a successful trading performance during the period, secured a number of key contracts and agreed the terms of an exciting acquisition opportunity, which gives us a platform for growth. We look forward to the future with confidence and, subject to successful completion of the Transaction, we are excited about the opportunity for the growth of the enlarged group as a combined entity with 1Spatial, where there should be an ample opportunity for mutual growth and increased shareholder value.

M Battles

Chairman

28 October 2011

*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:

1 Principal activity

Avisen 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 20 Station Road, Gerrards Cross, Buckinghamshire, SL9 8EL. 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 interim results for the six months ended 31 July 2011, have been prepared on the going concern basis, which assumes that the Group will continue in operational existence for the foreseeable future.

The accounting policies applied in the interim consolidated financial information are consistent with those of the annual financial statements for the year ended 31 January 2011 as described in those financial statements except for the impact of the standards applicable for the current financial position described below:

New and amended standards adopted by the Group

The following new standards and amendments to standards are mandatory for the first time for the financial year The accounting policies applied in the interim consolidated financial information are consistent with those of the annual financial statements for the year ended 31 January 2011 as described in those financial statements except for the impact of the standards applicable for the current financial position described below:

• Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected total annual profit or loss.

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:• 'Improvements to International Financial Reporting Standards 2010';• IAS 24 (Revised), 'Related party disclosures';• IAS 32 (Amendment), 'Financial instruments: Presentation on classification of rights issues';• IFRIC 14 (Amendment), 'IAS 19 - Prepayments of a minimum funding requirement';• IFRIC 19, 'Extinguishing financial liabilities with equity instruments'.

3 Earnings/Loss per share

Basic earnings/(loss) 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.

4 Nature of financial information

The interim information set out above is neither audited nor reviewed and does not represent the statutory financial statements within the meaning of section 435 of the Companies Act 2006 for Avisen plc or for any of the entities comprising the Avisen Group for the period ended 31 July 2011.

The statutory financial statements for the preceding financial year ended 31 January 2011 were filed with the Registrar and included an unqualified auditors' report.

5 Dividends

No dividend is proposed for the six months ended 31 July 2011 (31 January 2011: nil; 31 July 2010: nil).

6 Segmental information