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31 October 2012
1Spatial plc (AIM: SPA)
(“1Spatial”, the “Group” or the “Company”)
Interim Results for the six month period ended 31 July 2012
The board of directors of 1Spatial (the ‘‘Board’’), the business technology and profit improvement specialist, are pleased to announce the Company’s unaudited interim results for the six month period ended 31 July 2012.
Highlights
Financial highlights Turnover from continuing operations increased by 146 per cent. to £6.4m (6 months 2011: £2.6m) Adjusted* EBITDA from continuing operations of £20k (6 months 2011: £0.6m) Overall loss for the period after tax of £1.1m (6 months 2011: profit of £0.8m) Strong balance sheet at 31 July 2012 with £3.1m of net cash (31 January 2012 net cash of £2.7m) The 1Spatial trading business generated revenues of £5m and Adjusted* EBITDA of £0.7m The Avisen trading business generated revenues of £1.2m and Adjusted* EBITDA of £0.1m The Storage Fusion trading business generated revenues of £0.2m and broke even at an Adjusted* EBITDA
level
Operational highlights Restructuring of the 1Spatial Business to enable execution of new strategy for growth and scale Focus on product development and software licence sales for National Mapping Agencies (NMA’s) within
1Spatial Business Reduction in headcount within the Group with annualised cost savings of £0.7m with no direct impact on
revenues Rebranding of 1Spatial Business to raise market visibility as a leading global provider of spatial Big Data
management Product realignment and development to scale product offerings across cloud and on-premise within the
1Spatial Business Avisen continues successful global roll out of the 'Cost to Serve' project for Unilever plc (“Unilever”) Management remains confident in Storage Fusion’s product and ability to increase scale. During the
period we have been focusing on product development in areas such as virtualisation and chargeback which extends the Company’s functional reach
Closure of loss making Avisen BV business in the Netherlands
Post Balance Sheet Highlights On 3 October, the Company announced that a five year contract has been entered into to provide a US
Government Bureau with software and related services
On 17 October, the Company announced that it had been selected as a preferred bidder in a significant contract tender to Ordnance Survey Ireland ("OSi"). The contract is to provide OSi with a geospatial management solution and will, if awarded, include the sale of software licences, services, support and maintenance
*Adjusted for strategic, integration and other exceptional items
Commenting on the results, Marcus Hanke, CEO of 1Spatial, says:
“We aligned against our core goals set at the beginning of this period, to focus on the right organisational structure, operating model, products and brand. These are now in place and are being well received by customers, partners and the market. We have secured some good customer wins across the Group and further strengthened our strategic relationship with some accounts. I am confident we are now in a great position to build on the foundations already laid and to achieve growth for the business."
For further information, please contact:
1Spatial plc
Marcus Hanke (CEO)/Claire Milverton (CFO) Tel: +44 (0)20 3527 5004
Strand Hanson Limited Tel: +44 (0)20 74093 494James Harris / Andrew Emmott / James Bellman
Bishopsgate Communications Tel: +44 (0)20 7562 3350Nick Rome/Sam [email protected]
Chairman’s statement
I am delighted to present the results of the Group for the six month period ended 31 July 2012. The results for this period show growth in revenues as a result of the inclusion of the 1Spatial operating business ("1Spatial Business") that was acquired in November 2011.
The Board believes that management have made excellent progress during this period, particularly with respect to the 1Spatial Business. Management has spent considerable time and effort putting a new operational structure in place to enable execution of a revised strategy. This strategy is based on exploiting the opportunities in its intellectual property offering. The Board believes this new strategy puts the business in an excellent position to achieve long term growth and scalability. The Group is beginning to see the success of these changes with the new contract prospects that were recently announced to the market. Leveraging the already strong position that the 1Spatial Business has in managing the world’s largest spatial 'Big Data', this offering can be scaled and make claim to a large percentage of the spatial 'Big Data' market.
As noted in my January 2012 Chairman’s statement, we did not expect the benefits of this revised strategy to come into effect until the second half of this financial year. The initial phase of adjustment, which included re-defining roles and responsibilities of employees, was finalised during October 2012 and has resulted in an overall reduction of headcount. The Group will not get the full benefit of these cost savings until the year ended 31 January 2014. These annualised cost savings are in excess of £0.7m and we anticipate only a negligible impact on revenues.
In line with the above expectation, the Group’s Adjusted* EBITDA in the period was £20k compared to a profit of £0.6m in 2011. The 2011 figure was partly a result of the large licence sale to Unilever which has not been repeated in this period, however the Group has already had success with licence sales during the second half of the year. Firstly, with the sale to the US Government Bureau which was announced on 3 October 2012 and secondly with the announcement of the preferred supplier status with Ordnance Survey Ireland announced on 17 October 2012, which we are hopeful will result in a firm order in the near term. One of the key focus areas of the Group’s new strategy going forward is focus on product development and software licence sales for National Mapping Agencies ("NMA’s") and this profitable revenue stream is expected to increase in the second half of the year and in future years.
In my last statement, I noted that management was still keen to review other acquisition opportunities to accelerate the growth of the business and provide more scale and synergistic opportunities. Whilst the new licence sales and cost reductions should enhance profitability, the Board still believes an acquisition will increase earnings potential and therefore continues to review potential opportunities.
The common focus for all companies within the Group is to provide end users of data with assurance over its quality and insight into its significance. This is part of the ‘Big Data’ concept.
Also during the period, we recruited a new Group Marketing Director, Alison Masters. Alison has been in senior positions at both Oracle and Microsoft and has significant experience in the IT sector. We believe Alison is a significant asset to the Group and will be key in driving all the Group's businesses forward.
Financial position
Revenues for the six months were £6.4m, which is a 146 per cent. improvement on the revenues of the previous period of £2.6m. The main reason for this is the inclusion of the 1Spatial Business in these 2012 results. Included within the revenues of £6.4m is £1.5m of recurring annuity revenues in relation to support and maintenance.
The Adjusted* EBITDA profit measure is £20k compared with £0.6m in the previous period as a result of the Avisen revenues attributable to Unilever as noted above.
Amortisation has increased from £0.2m to £0.5m as a result of the inclusion of the 1Spatial acquisition in the results to July 2012. In addition, strategic and other exceptional items have also increased from zero to £0.3m mainly as a result of the costs associated with redundancies.
During the period, the Group closed down its loss making Avisen Netherlands business. This has been disclosed in discontinued operations and made an adjusted* EBITDA loss of £50k. This closure will have a positive impact on the results of the Group in the second half.
Taking account of the above items, the overall result for the six month period to July 2012 for all operations was a loss of £1.1m compared with a profit of £0.8m in the previous six months.
The Company had a strong balance sheet at 31 July 2012 with net assets of £10.1m compared with net assets of £7.9m at 31 July 2012. The increase is net assets is as a result of the inclusion of the 1Spatial Business. The net asset position includes a strong cash position of £3.1m with minimal borrowings.
The cash flow from operations was an outflow for the period as a result of the exceptional one-off costs in the period mainly in respect of redundancies. There are further redundancy costs to be charged in the second half of the year, but once these payments are finalised we expect the Group to be cash positive on a monthly basis from an operations perspective. Overall cash generated in the period was £0.3m. The key components of this were the cash outflow from operating activities of £0.4m coupled with £1.3m deferred cash consideration received in respect of the disposal of Inca in 2011 and other smaller outflows including fixed assets of £0.4, deferred consideration payable and debt repayments totalling £0.2m.
Trading business update
As mentioned earlier, the Group has been undergoing a period of review particularly within the 1Spatial Business. An update on the activities of each trading entity is set out below:
1Spatial Business
Revenues for the six month period were £5.0m and adjusted* EBITDA was £0.7m. Management were pleased with these results in light of the fact that this period was a phase of review and consolidation. With the new management team and strategy in place the Board believes that the business is in a good position for future profitability from both a revenue growth perspective and a lower fixed cost base (c.£0.7m annualised cost savings made).
With the focus on our product offering and positioning, we now have greater clarity and opportunity to market and sell our products. With the comprehensive offering of the '1Spatial Management Suite', which provides the full spatial data management solution, we can now offer a scalable approach through the product family to a greater market potential than previously. In addition, with our revised '1Spatial Cloud' offering we can supplythis to a broader market, not only directly, but also through our growing partner network.
We are pleased with the recent preferred supplier status given to the Company by OSi, evidence of the strength of our relationship with this long standing customer, and also the recognition of our expertise in data quality with the customer win at the US Government Bureau.
Avisen
Avisen had revenues in the period of £1.2m (2011: £2.5m) and an adjusted EBITDA of £0.1m (2011: £1.0m). The reason for the decrease in revenues and profit was due to the large perpetual licence sale to Unilever in 2011 ("Cost to Serve Project") as noted above, which was not repeated in 2012. During the period to July 2012 the Company has continued to work on the Unilever Cost to Serve Project and is in the process of delivering the solution globally. The profitability of the Company has also suffered due to the high staff fixed cost base. Management have left the cost base at this level for the period to allow development of the product and service offering to other potential
customers. Management intend to place more focus on this business in the second half of the year and review the cost base. On a positive note, the Company continues to be actively involved in a number of potential opportunities within the Unilever business and is hopeful that some additional revenues will transpire as a result of this in the second half of the year.
Storage Fusion
Storage Fusion had revenues in the period of £0.2m (2011: £0.2m) and an adjusted EBITDA of £37k (2011: loss of £55k). Revenues are at the same level as 2011 which is slightly behind the Board’s expectation for this half year, however the Board is still confident in its product offering and believes it will be able to secure further storage vendor partnerships during the remainder of the year in order to enhance revenue and profitability. With its Cloud enabled offering, it provides a cost effective way to measure data storage usage and consumption, and with the huge growth forecast in the software-as-a-service ("SaaS") marketplace, the Storage Fusion product is very attractive and has great potential. The Storage Fusion brand has recently been refreshed and the product offering redefined to offer greater clarity, along with releasing a new product offering focusing on the virtualisation and chargeback markets.
This business will be a key area of focus for the management team during the second half of the year, and we will build on the recent additions to the product offering to broaden the market and sales potential.
Head office costs
Total head office costs in the period have increased to £0.8m from £0.4m in the previous comparative period. This is as a result of the additional head office costs incurred by the 1Spatial Business. These costs should decrease in the second half as a result of the departure of former director Nicholas Snape in June 2012.
Conclusion and outlook
The last six months have been a period of consolidation. We have revised our strategy within the 1Spatial Business and have the right people in place to support this strategy along with a significantly reduced fixed cost base. Since the period end we have also secured a key contract with a US Government Agency and have been made a preferred supplier on a pivotal key contract in the NMA market. We have some areas to focus on within the Avisen and Storage Fusion businesses during the second half of the year, but we anticipate having these in a significantly better position by the year end.
Between now and the year end we have a lot of hard work to do but believe we have excellent prospects to improve our results and cash flow generation in the shortand longer term.
S Berry
Chairman
31 October 2012
Consolidated statement of comprehensive income6 months ended 31 July 2012
Unaudited Audited UnauditedSix months
ended31 July 2012
Yearended 31
January 2012
Six months ended
31 July 2011
Notes £'000 £'000 £'000
Continuing operations
Revenue 6,420 5,228 2,628
Cost of sales (3,672) (3,373) (1,324)
Gross profit 2,748 1,855 1,304
Administrative expenses (3,649) (3,454) (882)(901) (1,599) 422
Adjusted* EBITDA 20 (512) 615
Less: depreciation (81) (42) (7)
Adjusted* EBITA (61) (554) 608
Less: amortisation and impairment of intangible assets (502) (505) (178)
Less: strategic, integration and other exceptional items 8 (338) (540) -Operating (loss)/profit (901) (1,599) 430
Finance income 1 26 -Finance costs (4) (20) (8)
Net finance costs (3) 6 (8)
(Loss)/Profit before tax (904) (1,593) 422
Income tax (charge)/credit (57) 173 (12)(Loss)/Profit from continuing operations (961) (1,420) 410
Discontinued operations
(Loss)/Profit from discontinued operations 6 (89) (54) 433
(Loss)/Profit on disposal of subsidiary (77) 464 -
(Loss)/Profit for the period (1,127) (1,010) 843
Other comprehensive incomeExchange differences on translating foreign operations 34 6 -Gain on disposal of subsidiary undertaking - - -
Other comprehensive income for the period, net of tax 34 6 -Total comprehensive (loss)/profit attributable to equity shareholders of the Company (1,093) (1,004) 843
* Adjusted for strategic, integration and other exceptional items (note 8).
(Loss)/Earnings per ordinary share expressed in pence per ordinary share from continuing operations:Basic 3 (0.27) (0.57) 0.18
Diluted 3 (0.27) (0.57) 0.18
(Loss)/Earnings per ordinary share expressed in pence per ordinary share from operations:Basic 3 (0.32) (0.59) 0.37
Diluted 3 (0.32) (0.59) 0.37
Consolidated statement of financial position AAs at 31 July 2012s at 31 July 2010 Unaudited Audited Unaudited
As at31 July 2012
As at31 January 2012
As at31 July 2011
Notes £'000 £'000 £'000
Assets
Non-current assets
Intangible assets 9 3,907 4,133 869
Goodwill 9 5,540 5,602 2,156
Property, plant and equipment 257 244 35
Total non-current assets 9,704 9,979 3,060
Current assets
Inventories 32 41 -
Trade and other receivables 4,876 5,551 5,325
Current income tax receivables 7 60 -
Cash and cash equivalents 3,059 2,734 2,898
Total current assets 7,974 8,386 8,223
Total assets 17,678 18,365 11,283
Liabilities
Current liabilitiesTrade and other payables (6,409) (6,018) (3,175)Current tax liabilities (37) (92) -Borrowings (50) (51) -
Total current liabilities (6,496) (6,161) (3,175)
Non-current liabilitiesBorrowings - (51) -Deferred tax (1,092) (1,035) (258)Total non-current liabilities (1,092) (1,086) (258)
Total liabilities (7,588) (7,247) (3,433)
Net assets 10,090 11,118 7,850
Share capital and reserves
Share capital 10 12,572 12,556 11,335
Share premium account 6,504 6,455 6,455
Own shares held (306) (306) (306)
Share based payment reserve 387 387 387
Merger reserve 13,900 13,900 10,006
Reverse acquisition reserve (11,584) (11,584) (11,584)
Currency translation reserve 1 (33) (39)
Accumulated losses (11,384) (10,257) (8,404)
Total equity attributable to shareholders of the parent 10,090 11,118 7,850
Consolidated statement of changes in equityPeriod ended 31 July 2012
£'000Share
capital
Share premiumAccount
Own shares
held
Share based payments
reserveMerger reserve
Reverse acquisition
reserve
Currency translation
reserveAccumulated
losses Total
Balance at 1 February 2011 11,335 6,455 (306) 387 10,006 (11,584) (39) (9,247) 7,007Comprehensive incomeLoss for the year - - - - - - - (1,010) (1,010)Other comprehensive income/(expense)Exchange differences on translating foreign operations - - - - - - 6 - 6Total other comprehensive income - - - - - - 6 - 6Total comprehensive (expense)/income - - - - - - 6 (1,010) (1,004)
Transactions with ownersShares issued in the year 1,221 - - - - - - - 1,221Premium 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
Comprehensive incomeLoss for the year - - - - - - - (1,127) (1,127)Other comprehensive income/(expense)Exchange differences on translating foreign operations - - - - - - 34 - 34Total other comprehensive income - - - - - - 34 - 34Total comprehensive (expense)/income - - - - - - 34 (1,127) (1,093)
Transactions with ownersShares issued in the year 16 - - - - - - - 16Premium on issuance of - 49 - - - - - - 49
16 49 - - - - - - 65
Balance at 31 July 2012 12,572 6,504 (306) 387 13,900 (11,584) 1 (11,384) 10,090
Consolidated statement of changes in equityPeriod ended 31 July 2012
£'000Share
capital
Share premiumAccount
Own shares
held
Share based payments
reserveMerger reserve
Reverse acquisition
reserve
Currency translation
reserveAccumulated
losses Total
Balance at 1 February 2011 11,335 6,455 (306) 387 10,006 (11,584) (39) (9,247) 7,007Comprehensive income
Profit for the year - - - - - - - 843 843Total comprehensive income - - - - - - - 843 843
Balance at 31 July 2011 11,335 6,455 (306) 387 10,006 (11,584) (39) (8,404) 7,850
Consolidated statement of cashflowsPeriod ended 31 July 2012M ended 31 July 2010 Unaudited Audited Unaudited
31 July 2012 31 January 2012 31 July 2011Notes £'000 £'000 £'000
Cash flows from operating activitiesCash used in from operations a) (475) (3,225) (2,933)
Interest received 1 26 -
Interest paid (4) (37) (25)
Tax received 60 232 151
Net cash used in operating activities (418) (3,004) (2,807)
Cash flows from investing activitiesAcquisition of subsidiaries (net of cash acquired) - 661 -Cash received on disposal of subsidiary 1,300 5,189 5,404Purchase of intangible assets - - (3)
Purchase of property, plant and equipment (94) (156) (23)
Expenditure on product development (276) (476) (185)
Proceeds from sale of property, plant and equipment - 6 4Deferred consideration payable (136) - -
Net cash generated from investing activities 794 5,224 5,197
Cash flows from financing activitiesIncrease in overdraft - - -
Decrease in factoring account - 121 121
Finance lease principal payments - - -
Repayment of borrowings (51) (100) (106)
Net cash generated (used in)/from financing activities (51) 21 15
Net increase in cash and cash equivalents 325 2,241 2,405Cash and cash equivalents at start of period 2,734 493 493
Cash and cash equivalents at end of period 3,059 2,734 2,898Net 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:
31 July 2012 31 January 2012 31 July 2011
£'000 £'000 £'000Cash flows from operating activities
Net cash generated from/(used in) operating activities 20 (133) (143)
Cash flows from investing activities
Net cash generated from investing activities 1,300 5,189 5,381
Cash flows from financing activities
Net cash generated from financing activities - 121 121
a) Cash used in operations
UnauditedAs at 31 July
2012
AuditedAs at 31 January
2012
UnauditedAs at 31 July
2011
£'000 £'000 £'000Continuing operations(Loss)/Profit before tax (904) (1,593) 422Adjustments for:Finance cost - net 3 (6) 8Depreciation charge 81 42 7Amortisation and impairment 502 505 178Decrease/(Increase) in Inventories 9 (29) -(Increase) in trade and other receivables (712) (1,073) (2,983)Increase/(Decrease) in trade and other payables 529 (961) (439)Intercompany funding (36) - -Foreign currency adjustment 33 6 -
Cash used in continuing operations (495) (3,109) (2,807)Discontinued operationsNet loss (89) (54) (12)Adjustments for:Finance cost - net - 17 17Depreciation charge - 19 19Amortisation and impairment - 68 68Increase/(Decrease) in trade and other receivables 25 (137) (137)Increase/(Decrease) in trade and other payables 48 (29) (81)Intercompany funding 36 - -Cash generated from discontinued operations 20 (116) (126)Cash used in operations (475) (3,225) (2,933)
b) Reconciliation of net cash flow to movement in net fundsUnaudited
As at31 July 2012
AuditedAs at
31 January 2012
UnauditedAs at
31 July 2011
£'000 £'000 £'000Increase in cash in the year 325 2,241 2,405Net cash inflow from increase in bank 51 100 106Net cash inflow in respect of factoring - (121) (121)Changes resulting from cash flows 376 2,220 2,390Loans and finance leases acquired with subsidiary - (96) -
Factoring disposed with Inca - 277 277Effect of foreign exchange 1 - -Change in net funds 377 2,401 2,667Net funds at beginning of period 2,632 231 231Net funds at end of period 3,009 2,632 2,898Analysis of net funds/(debt)Cash and cash equivalents 3,059 2,734 2,898Bank loans - (102) -Other loans (50) - -
Net funds at end of period 3,009 2,632 2,898
1 Principal activity1Spatial 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 preparationThe interim results for the six months ended 31 July 2012, 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 2012 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 GroupThe 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 2012 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:
IFRS 1 (Amended), “First-time Adoption of International Financial Reporting Standards”; IFRS 7 (Amended), “Financial instruments: Disclosures”; IAS 12 (Amended), “Income taxes”.
3 (Loss )/Earnings per shareBasic (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.
UnauditedSix months ended 31 July 2012
AuditedYear ended 31 January 2012
UnauditedSix months ended 31 July 2011
Continuing Discontinued Total Continuing Discontinued Total Continuing Discontinued Total£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
(Loss)/Earnings attributable to equity holders (961) (166) (1,127) (1,420) (54) (1,474) 410 433 843Adjustments:Amortisation of intangible assets 502 - 502 505 68 573 178 68 246Integration, strategic and other exceptional items 338 (39) 299 540 45 585 - - -Adjusted (loss)/earnings (121) (205) (326) (375) 59 (316) 588 501 1,089
Basic earnings/(loss) per share (0.27) (0.05) (0.32) (0.57) (0.02) (0.59) 0.18 0.19 0.37Diluted earnings/(loss) per share (0.27) (0.05) (0.32) (0.57) (0.02) (0.59) 0.18 0.19 0.37Adjusted basic earnings/(loss) per share (0.03) (0.06) (0.09) (0.15) 0.02 (0.13) 0.26 0.22 0.48Adjusted diluted earnings/(loss) per share (0.03) (0.06) (0.09) (0.15) 0.02 (0.13) 0.26 0.22 0.48
Number Number Number000’s 000’s 000’s
Basic weighted average number of shares 350,415 248,104 226,700Impact of share options and warrants - - -Diluted weighted average number of shares 350,415 248,104 226,700
4 Nature of financial informationThe interim information set out above is neither audited nor reviewed and does not represent the statutory financial statements within the meaning of section 434 of the Companies Act 2006 for 1Spatial plc or for any of the entities comprising the 1Spatial Group for the period ended 31 July 2012.
The statutory financial statements for the preceding financial year ended 31 January 2012 were filed with the Registrar and included an unqualified auditors’ report.
5 DividendsNo dividend is proposed for the six months ended 31 July 2012 (31 January 2012: nil; 31 July 2011: nil).
6 Segmental information
Head Office AvisenStorage
Fusion 1Spatial Total31 July 2012 £'000 £'000 £000 £’000 £'000
Continuing operationsRevenue - 1,199 216 5,005 6,420Less intersegment sales - - - - -Total revenue from third parties - 1,199 216 5,005 6,420Cost of sales - (762) - (2,910) (3,672)Gross profit - 437 216 2,095 2,748
Total administrative expenses (807) (381) (449) (2,012) (3,649)
Adjusted EBITDA (778) 88 37 673 20Less: depreciation (10) (5) (21) (45) (81)Adjusted EBITA (788) 83 16 628 (61)Less: amortisation and impairment of intangible assets - - (214) (288) (502)Less: strategic, integration and other exceptional items (19) (27) (35) (257) (338)Total operating (loss)/profit (807) 56 (233) 83 (901)
Finance income - - - 1 1Finance cost (1) (1) (1) (1) (4)Net finance (1) (1) (1) - (3)
(Loss)/profit before tax (808) 55 (234) 83 (904)Tax charge - (1) (30) (26) (57)
(Loss)/profit for the year from continuing operations (808) 54 (264) 57 (961)
Avisen£'000
Discontinued operationsRevenue 25Less intersegment sales -Total revenue from third parties 25Cost of sales (3)Gross profit 22
Total administrative expenses (111)
Adjusted EBITDA (50)Less: depreciation -Adjusted EBITA (50)Less: amortisation and impairment of intangible assets -Less: strategic, integration and other exceptional items (39)Total operating loss (89)
Finance income -Finance cost -Net finance cost -
Loss before tax (89)Tax (charge)/credit -
Loss for the period from discontinued operations (89)
Head Office AvisenStorage
Fusion 1Spatial Total
31 January 2012 £'000 £'000 £000 £’000 £'000
Continuing operationsRevenue - 3,305 390 1,533 5,228Less intersegment sales - - - - -Total revenue from third parties - 3,305 390 1,533 5,228Cost of sales - (2,595) - (778) (3,373)Gross profit - 710 390 755 1,855
Total administrative expenses (1,661) (410) (847) (536) (3,454)Other operating income
Adjusted EBITDA (1,134) 305 (13) 330 (512)Less: depreciation (11) (7) (13) (11) (42)Adjusted EBITA (1,145) 298 (26) 319 (554)Less: amortisation and impairment of intangible assets - (8) (431) (66) (505)Less: strategic, integration and other exceptional items (516) 10 - (34) (540)Total operating (loss)/profit (1,661) 300 (457) 219 (1,599)
Finance income 17 8 - 1 26Finance cost (5) (3) (1) (11) (20)Net finance income/(cost) 12 5 (1) (10) 6
(Loss)/profit before tax (1,649) 305 (458) 209 (1,593)Tax credit/(charge) - 43 129 1 173
(Loss)/profit for the year from continuing operations (1,649) 348 (329) 210 (1,420)
IncaSouthAfrica Total
£000 £’000 £'000
Discontinued operationsRevenue 1,145 - 1,145Less intersegment sales - - -Total revenue from third parties 1,145 - 1,145Cost of sales (722) - (722)Gross profit 423 - 423
Total administrative expenses (415) (45) (460)
Adjusted EBITDA 95 - 95Less: depreciation (19) - (19)Adjusted EBITA 76 - 76Less: amortisation and impairment of intangible assets (68) - (68)Less: strategic, integration and other exceptional items - (45) (45)Total operating profit/(loss) 8 (45) (37)
Finance income - - -Finance cost (17) - (17)Net finance cost (17) - (17)
Loss before tax (9) (45) (54)Tax credit - - -
Loss for the year from discontinued operations (9) (45) (54)
6 months ended 31 July 2011 Head office Avisen Storage Fusion Total
£'000 £'000 £'000 £’000Continuing operationsRevenue - 2,452 176 2,628
Less: intersegment sales - - - -Total revenue from third parties - 2,452 176 2,628
Cost of sales - (1,313) (11) (1,324)Gross profit - 1,139 165 1,304
Total administrative expenses (350) (135) (397) (882)Other operating income 8 - - 8
Adjusted EBITDA (341) 1,011 (55) 615Less: depreciation (1) (3) (3) (7)
Adjusted EBITA (342) 1,008 (58) 608Less: amortisation and impairment of intangible assets - (4) (174) (178)
Less: strategic, integration and other exceptional items - - - -Total operating profit/(loss) (342) 1,004 (232) 430
Finance income - - - -
Finance cost (3) (5) - (8)Net finance income/(cost) (3) (5) - (8)
(Loss)/Profit before tax (345) 999 (232) 422Tax credit/(charge) - 14 (26) (12)
Profit/(Loss) for the period from continuing operations (345) 1,013 (258) 410Inca
£’000
Discontinued operationsRevenue 1,145
Less: intersegment sales (3)Total revenue from third parties 1,142
Cost of sales (722)Gross profit 420
Total administrative expenses (415)
Adjusted EBITDA 92
Less: depreciation (19)Adjusted EBITA 73Less: amortisation and impairment of intangible assets (68)Less: strategic, integration and other exceptional items -
Total operating profit 5
Finance income -
Finance cost (17)
Net finance cost (17)
Loss before tax (12)Tax credit -
Loss for the period from discontinued activities (12)Gain on disposal (see note 7) 445
Profit for the period from discontinued operations 433
7 Discontinued operations
On 16 July 2012 the Group closed its loss making subsidiary in the Netherlands, Avisen BV.
The results of the subsidiary have been reported in the interim statements for the period ended 31 July 2012 as discontinued operations and its performance is detailed within the discontinued segmental analysis in note 5.
The comparative numbers have not been restated for the year ended January 2012 and six month period ended July 2011 as the impact is not deemed material in the context of these numbers.
8 Strategic, integration and other exceptional items
In accordance with the Group's policy for strategic, integration and other exceptional items, the following charges were included in this category for the period:
Six months ended 31 July 2012
Year ended 31 January 2012
Six months ended 31 July 2011
Continuing operations £'000 £'000 £'000
Strategic costs 15 301 -Costs of duplication and integration 323 239 -Total – continuing operations 338 540 -Discontinued operationsCosts of duplication and integration 39 45 -Total – discontinued operations 39 45 -Total 377 585 -
9 Intangible assets including goodwill
Goodwill Brands
Customers and
related contracts Software
Developmentcosts Total
Website costs
At 31 July 2012 £'000 £'000 £'000 £'000 £'000 £’000 £'000
CostAt 1 February 2012 10,102 232 899 3,149 1,007 30 15,419Additions - - - - 276 - 276Disposals (62) - - - - - (62)At 31 July 2012 10,040 232 899 3,149 1,283 30 15,633
Accumulated impairment and amortisationAt 1 February 2012 4,500 4 21 594 535 30 5,684Amortisation - 12 64 265 161 - 502Disposals - - - - - - -At 31 July 2012 4,500 16 85 859 696 30 6,186
Net book amount at31 July 2012 5,540 216 814 2,290 587 - 9,447
Goodwill Brands
Customers and
related contracts Software
Developmentcosts Total
Website costs
At 31 January 2012 £'000 £'000 £'000 £'000 £'000 £’000 £'000
Cost
At 1 February 2011 12,849 252 1,852 944 595 - 16,492
Additions 100 - - 34 412 30 576
Acquisition of subsidiary 3,346 232 899 2,171 - - 6,648
Disposals (6,193) (252) (1,852) - - - (8,297)
At 31 January 2012 10,102 232 899 3,149 1,007 30 15,419
Accumulated impairment and amortisation
At 1 February 2011 4,500 53 545 243 438 - 5,779
Impairment - - - - - 25 25
Amortisation - 10 85 351 97 5 548
Disposals - (59) (609) - - - (668)
At 31 January 2012 4,500 4 21 594 535 30 5,684
Net book amount at31 January 2012 5,602 228 878 2,555 472 - 9,735
10 Share capital
As at 31 July 2012 As at 31 January 2012£'000 £'000
Allotted, called up and fully paid350,415,354 (Jan 2012: 348,769,274) ordinary shares of 1p each 3,504 3,488226,699,878 (Jan 2012: 226,699,878) deferred shares of 4p each 9,068 9,068
12,572 12,556