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SPA.GB 1Spatial Plc

69.40
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Share Name Share Symbol Market Type Share ISIN Share Description
1Spatial Plc AQSE:SPA.GB Aquis Stock Exchange Ordinary Share GB00BFZ45C84
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  -0.10 -0.14% 69.40 68.00 71.00 69.50 69.40 69.50 1,400 10:53:07
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1Spatial Plc Interim Results (4840P)

10/10/2023 7:00am

UK Regulatory


1Spatial (AQSE:SPA.GB)
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TIDMSPA

RNS Number : 4840P

1Spatial Plc

10 October 2023

10 October 2023

1Spatial plc (AIM: SPA)

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

Interim Results for the six-month period ended 31 July 2023 ("H1 2024")

Delivering significant revenue and ARR growth

1Spatial, (AIM: SPA), a global leader in Location Master Data Management (LMDM) software and solutions, is pleased to announce interim results for the six months ended 31 July 2023.

H1 2024 highlights

 
      --   Group revenue up 11% to GBP15.5m driven by: 
                o   24% increase in recurring revenue to GBP8.2m ( H1 2023: GBP6.6m), representing 53% of total 
                     revenue ( H1 2023: 47%) 
                o   100% increase in Term Licences revenue to GBP3.4m (H1 2023: GBP1.7m), including the first 
                     contribution from our newly launched SaaS offerings 
                o   Continued strong progress in the US, with US revenue increasing 27% in the period (24% at 
                     constant currency) (H1 2023: 16%) 
      --   Group ARR growth of 10% with a Term Licence ARR growth of 27% 
      --   Group gross profit margin increase from 50% to 52% driven by increases in revenue across the 
            Group 
      --   Adjusted EBITDA of GBP1.7m down 16% reflecting investment in sales resource, inflationary 
            cost increases and foreign exchange movements 
      --   Approximately GBP1m of annualised non-revenue generating costs taken out of the business in 
            H1 primarily in Europe 
      --   Board confident in achieving results for FY 2024 in line with market expectations 
 

Financial highlights

 
 
                                                      Half-year to 31 July 23   Half-year to 31 July 22 
                                                                                                            Growth 
                                                               GBPm                      GBPm                % 
 
 Group revenue                                                 15.5                      14.0               +11 
      Recurring revenue                                         8.2                       6.6               +24 
      Term licences revenue                                     3.4                       1.7               +104 
 
 Group Total ARR                                               16.7                      15.2               +10 
      Term licences ARR                                         6.6                       5.2               +27 
 
 Group gross profit                                             8.0                       7.0               +16 
 Group gross profit margin (%)                                   52                        50                +2 
 Adjusted EBITDA                                                1.7                       2.0               (16) 
 Adjusted EBITDA margin (%)                                     11                        14               (3pp) 
 Operating (loss)/profit                                       (0.3)                      0.4               n/a 
 (Loss)/profit before tax                                      (0.5)                      0.3               n/a 
 (Loss)/earnings per share - basic and diluted (p)             (0.5)                      0.2               n/a 
 Net cash                                                       0.5                       2.3               (77) 
 

Group operational highlights

Enterprise business

 
      --   Secured first contract with the State of Oregon, bringing the number of US States as customers 
            to 18, each with significant expansion potential 
      --   Expansion deals with the California Department of Transportation (Caltrans), US Federal Highways, 
            Ordnance Survey Great Britain, Land and Property Services and a major European aerospace company 
      --   Three new water customers: Yorkshire Water Services in the UK, Société Walloon Des 
            Eaux in Belgium and Hunter Water in Australia 
      --   Successful launch of the first phase of the NUAR Project ('National Underground Asset Register') 
            on 5 April 2023 
      --   Significant increase in sales pipeline across our territories with conversion of these opportunities 
            expected in H2 and into the new financial year 
 

SaaS Solutions

 
      --   The launch of cloud platform and "light version" of our NG9-1-1 solution suitable for counties 
            and cities within each US state, a US$345m ARR market opportunity, five contract wins to date 
      --   1Streetworks, automating traffic management plans, a GBP400m ARR market opportunity, launched 
            with five trials ongoing, first material contract expected to be signed imminently onto an 
            annual deal 
 

Outlook

 
      --   High level of renewals in the second half of the year and healthy pipeline driving expected 
            improvement in performance in H2 
      --   Trading in the second half has started positively and the Board remains confident in delivering 
            results for FY 2024 in line with expectations 
 

Commenting on the results, 1Spatial CEO, Claire Milverton, said:

"The Group's achievements over the past six months demonstrate that our investments in our product and business development teams are translating into growth. We envisage that these investments will lead to further growth throughout the remainder of the financial year and into next year. Our ability to secure and deliver significant contracts with blue-chip customers points to our potential as we continue to build a world class geospatial business with strong recurring revenues.

"Over the last five years we have invested significant financial resources into developing our SaaS solutions. With the successful launch of two of these solutions in the first half of FY2024, we have opened up a transformational opportunity with a significant and growing pipeline. We look to the future with confidence."

For further information, please contact:

 
 1Spatial plc                                    01223 420 414 
 Claire Milverton / Stuart Ritchie 
 Liberum (Nomad and Broker)                      020 3100 2000 
 M ax Jones / Edward Mansfield 
 Alma PR                                         020 3405 0205 
 Caroline Forde / Hannah Campbell        1spatial@almapr.co.uk 
 

Alternative Performance Measures ('APMs')

The Group uses certain Alternative Performance Measures to enable the users of the Group's financial statements to understand and evaluate the performance of the Group consistently over different reporting periods. APMs are non-GAAP company specific measures. As these are non-GAAP measures, they should not be considered as replacements for IFRS measures. The Group's definition of non-GAAP measures may not be comparable to other similarly titled measures reported by other companies. A description of the measures set out above is included below with a reconciliation to the closest GAAP measure included in the notes to the consolidated condensed interim financial report.

 
 APM                    Explanation of APM 
 Recurring Revenue      Recurring Revenue is the value of committed 
  (s)                    recurring contracts for term licences and support 
                         & maintenance recorded in the year. 
                       ----------------------------------------------------- 
 Annualised Recurring   Annualised Recurring Revenue ("ARR") is the 
  Revenue ("ARR")        annualised value at the year-end of committed 
                         recurring contracts for term licences and support 
                         & maintenance. 
                       ----------------------------------------------------- 
 Adjusted EBITDA        Adjusted EBITDA is a company-specific measure 
                         which is calculated as operating profit/(loss) 
                         before depreciation (including right of use 
                         asset depreciation), amortisation and impairment 
                         of intangible assets, share-based payment charge 
                         and strategic, integration, and other non-recurring 
                         items. 
                       ----------------------------------------------------- 
 Net cash               Net cash is gross cash less bank borrowings. 
                       ----------------------------------------------------- 
 

About 1Spatial plc

Unlocking the Value of Location Data

1Spatial plc is a global leader in providing Location Master Data Management (LMDM) software, solutions and business applications, primarily to the Government, Utilities and Transport sectors via the 1Spatial platform. Our solutions ensure data governance, facilitating the efficient, effective and sustainable operation of customers around the world. Our global clients include national mapping and land management agencies, utility companies, transportation organisations, government and defence departments.

Today, when using and sharing trusted data provides significant opportunities for businesses and governments to deliver against important sustainability and Net Zero goals, our vision is clear: to make the world safer, smarter and more sustainable by unlocking the value in data, enabling better decisions and greater insights.

The 1Spatial platform is a comprehensive set of data and system agnostic LMDM software components which helps ensure master data is compliant, current, complete, consistent, and coordinated - and that customers can be confident it will remain that way as it evolves. It allows them to master their data on any device, anywhere, anytime and can be deployed as SaaS in the cloud, on-premise, or as a hybrid of both.

1Spatial plc is AIM-listed, headquartered in Cambridge, UK, with operations in the UK, Ireland, USA, France, Belgium, Tunisia and Australia.

www.1spatial.com

Half-year review

We are very pleased with the performance of the Group's enterprise business in the first six months of the year, most notably delivering 11% revenue growth and 27% growth in term licence ARR as we secured new wins and delivered on milestones of significant contracts signed in previous years. These new customer wins build on the secure, long-term levels of ARR we have generated and provide significant opportunities to expand and drive incremental revenues in the future.

The growing revenue generated by our enterprise business in recent years has provided funding for the development of two high margin SaaS solutions launched at the end of calendar 2022, 1Streetworks and a SaaS version of our NG9-1-1 solution. These applications present a transformational growth opportunity in the medium term and are a major focus for the Group.

SaaS sales have already exceeded our expectations with our first customer contracts signed in the period. In the US, we signed five new contracts for the SaaS version of our NG9-1-1 solution, targeting US counties. This rapid adoption of the product demonstrates the value offered to the customer and provides the Group with an opportunity to rapidly scale up into a substantial market opportunity.

In the UK, we secured five customers for paid for trials of 1Streetworks. With the utilities sector being a primary target vertical for this product, we are delighted to report that, following successful completion of a trial, a large utility provider is in the final stages of contracting an annual licence. This independent commercial validation provides the Company with a case study that management can use to accelerate market adoption over the next 12 months. The speed of conversion from trial to annual contract demonstrates the relevance of our new SaaS product to this sector.

While we have seen significant growth in revenue and gross profit contribution compared to the previous year, the investment we made in our sales function together with inflationary increases and adverse foreign exchange movements have diluted EBITDA margins and resulted in a decrease of approximately GBP0.3m in EBITDA. While the increases in operating costs were in line with forecasts, the management team has taken steps to address the cost base in Europe by removing GBP1m annualised costs from non-revenue generating activities. As a larger proportion of the term licence renewals are weighted towards the second half of the year management remains confident of delivering material cash and EBITDA generation before the end of the financial year.

The Group remains focussed on investing in and developing our cloud platform to set our SaaS businesses up for success. We also see continuing investment in our enterprise business as critical to our growth strategy. Digital transformation, and the growing need for better, more accurate and shareable data to support infrastructure investment continues to drive demand for our solutions across our target markets, being Government, Utilities and Transport.

The Group has a strong order book, a growing recurring revenue stream and a strong sales pipeline for its enterprise business as well as a potentially transformational pipeline for its SaaS based solutions, underpinning the Board's confidence in the Group's ability to deliver against its growth strategy and achieve results for FY 2024 in line with expectations.

Successful launch and first sales of SaaS solutions

The expansion of the 1Spatial Cloud platform includes our multi-tenancy SaaS based solutions - NG9-1-1 and 1Streetworks (formerly Traffic Management Plan Automation). These applications considerably increase our addressable market and provide the potential for significant expansion of high margin software revenue.

The launch of our cloud platform in January 2023 means we can now offer a "light version" of our NG9-1-1 solution aimed at the counties and cities within each US state, significantly increasing our addressable opportunity. We have now secured five contract wins for this solution and have further trials underway. There is an addressable market of over US$345m ARR for our NG9-1-1 SaaS solution and we are currently targeting up to 15% market share. In Q4, the team will be working on advancing our offering with an Esri integration, aiming at driving adoption of the product.

1Streetworks automates the production of traffic management plans, diversion routing and asset inventory lists in the UK, producing a comprehensive, site-specific traffic management plan in just a few minutes.

1Streetworks is the first solution in the market to fully automate the production of traffic management plans, significantly shortening the time, effort and cost it takes to produce traffic management plans that are both consistent and compliant. It has the potential to revolutionise the traffic management planning industry. This solution is now being trialled by five customers across the UK, with final contractual discussions for an annual licence underway with a large utility company.

There are currently over 2.5 million roadworks each year on low-speed roads alone. This is expected to increase to approximately 4 million per year. The catalyst for this increase is the planned electrification of the UK (for example: installation of electric vehicle charging points) as well as the roll out of new telecoms fibre across the country. We estimate that the total addressable market will be in excess of GBP400m in the coming years.

Innovation

As well as the launch of our first two SaaS solutions, we continue to innovate, augmenting the capabilities of our existing offerings and developing new ones to expand our addressable market.

In terms of new product development, we recently developed additional rules based cleansing applications, such as NG9-1-1, focused on specific industry verticals, leveraging the power of our 1Integrate rules engine to automate data ingestion. The development of these innovative products will provide us with a pipeline of product launches for 2024 and beyond.

We also continue to build our product portfolio. Two core components that underpin our SaaS Solutions and the 1Spatial Platform have also been enhanced to make even the most complex data supply chains even easier to manage.

 
      --   1Integrate went through its next major release - v4.0. This introduced a brand-new user interface, 
            expertly reworked for a smooth user experience and huge productivity gains. Building the rules 
            that define the specific data processing tasks has never been faster. 
      --   1Data Gateway also went through similar UI and API improvements. This allows us to improve 
            the speed, consistency, and quality of how we release and deploy our world-class SaaS rules-based 
            solutions (defined in 1Integrate) to our customers. How we repeatedly promote SaaS solutions 
            through different environments has never been easier. 
 

We plan to leverage this innovation and development by considering entry into new markets and verticals such as the Built Environment in the UK and 1Streetworks in Canada.

Enterprise business expansion

US

The US continues to be the most significant contributor of recurring revenue growth with 56% at constant currency compared to the same period in the prior year. We appointed a new Head of Sales in the US helping to drive pipeline growth and pipeline conversion to ensure we capitalise on the huge opportunity in this region. We are already seeing the benefit of this appointment in new opportunities across our customer base.

We secured our first contract with the State of Oregon using our 1Integrate and 1DataGateway products - the initial contract value is $0.4m over two years with a number of future expansion opportunities. The Group now has 18 US States as customers, each with significant expansion potential. We secured our second contract with the California Department of Transportation (Caltrans), in partnership with Rizing, a global SAP partner, bringing the total ARR derived from this customer to $0.4m demonstrating our ability to execute on the opportunity.

We expanded our existing contract with Federal Highways through the sale of additional 1Integrate licences generating incremental ARR of $150K, bringing total ARR on the account to $200K.

UK

We have seen good growth in the UK during the half, in addition to the five trials secured for 1Streetworks.

We secured our first contract with Yorkshire Water Services for GBP650K. The contract was to replace the company's GIS platform technology and network data model to enable visualisation of GIS data, configuration of GIS business applications and integration of the new GIS with wider business applications across the company. Our team was selected to undertake the transformation project using Esri technology due to the significant experience we have in the sector.

We strengthened our relationship with Ordnance Survey Great Britain through a two-year contract renewal, worth approximately GBP1.5m, and will see 1Spatial's specialist team provide software and support services to Ordnance Survey's Data Management System. We also secured a further software and services contract with existing customer Land and Property Services in conjunction with our partner Version1, with a contract value of GBP0.2m. Land and Property Services (LPS) is a division within the Department of Finance (DoF) in Northern Ireland who collect, process and manage land and property information.

We are pleased that the first phase of the NUAR Project ('National Underground Asset Register') (also known as the MVP stage), has now been completed and was launched by government on 5 April 2023. This first phase of NUAR contains data from public and private sector organisations which own pipes and cables in North-East England, Wales and London including all the major energy and water providers. The size of the dataset continues to grow and has received excellent feedback from all stakeholders.

Europe

In Belgium, we secured an initial four-year contract with Société Walloon Des Eaux using our 1Water application. The contract includes a four-year extension resulting in a total contract value of EUR3m, including ARR from licence sales of EUR230K.

During the half, a major European aerospace company, initially secured in July 2022, contracted 1Spatial for additional complementary services due to a change in the project scope. The value of the award was EUR240K.

Australia

The Group secured its first 1Integrate licence contract in Australia winning Hunter Water, a state-owned corporation providing drinking water, wastewater, recycled water and storm water services to 500,000 people in the Lower Hunter Region in New South Wales. The contract is initially for 6 months carrying a value totalling AUS$200K with the possibility to extend.

ESG and People

We continue to make good progress with the development of our ESG strategy. In March 2022, we kicked off a stakeholder materiality assessment to determine the priority areas. We consulted with more than 150 customers, employees, board members and senior management, shareholders, partners and suppliers to understand what areas are considered as most important for our stakeholders. We are now developing these objectives through industry benchmarking, peer review and business consultations. We reported on the key focus areas in our FY23 Annual Report.

During the first half of FY 2024, we started rolling out ISO27001 to the UK and other Group entities, as well as an electric first initiative as our car fleet comes up for renewal. We have also started to gather information around carbon reporting across the Group. We plan to report on our continental European, US and Australian businesses' carbon emissions, as well as extending the scope of our UK disclosures (scope 3), in the FY 2024 Annual Report.

Our people are critical to the success of the Group. We continue to invest in our people, providing them with the tools and training to support them and allow them to realise their potential. The success of this approach is evidenced by the Group's selection as one of the top 100 organisations featured on the 2023 UK's Most Loved Workplace (R). We actively encourage our people to pursue activities that help them in their day-to-day work life and offer a professional development allowance for them to use as they see fit. We firmly believe that investing in and empowering our people fosters loyalty, team spirit and engenders trust which are all to the benefit both the Group and its people. We support our people in their charitable activities and organise team and company-wide events to recognise important milestones throughout the year such as mental health awareness.

Current trading and outlook

We are transitioning from a predominantly services-based business to one which has productised its valuable IP and data expertise into scalable software solutions including SaaS. We sit at the heart of the transformation taking place across multiple sectors, with our growing levels of recurring revenue providing confidence to continue investing in our scalable solutions. We remain focused on the conversion of our substantial sales pipeline, which will in turn drive revenue growth and margin expansion.

With a sales focused team, compelling offering, a growing recurring revenue stream and a strong sales pipeline for our enterprise business as well as a potentially transformational pipeline for our SaaS based solutions, we believe the business is well placed to deliver and capitalise on the huge market opportunity ahead.

Trading in the second half is in line with expectations with several new contracts secured. While cognisant of inflationary cost pressures, the Board remains confident in delivering results for FY 2024 in line with expectations.

Claire Milverton

Chief Executive Officer

Financial performance

Summary

The Group delivered a solid financial performance in the period with further growth in revenues and ARR. The increase in revenue generated compared to the prior period supports the increase in investment in innovation and sales resources required to secure higher value longer-term recurring contracts and pipeline growth.

Revenue

Group revenue increased by 11% to GBP15.53m from GBP14.03m in H1 2023. The business strategy is to grow recurring revenue from repeatable business solutions on longer-term contracts, including recurring term licences, rather than one-off perpetual licences. In FY 2021, the Board approved a three-year revenue growth plan, with increased planned spending on technology, sales and delivery capacity in order to effect a step change in revenue growth. As a result of this focus, recurring revenue in the period increased by 24% to GBP8.2m from GBP6.6m and the Group achieved organic growth in revenue of 11%. The revenue by type is shown below:

 
 Revenue by type 
                                      H1 2024   H1 2023   % change 
 Recurring revenue [term licences, 
  SaaS + S&M]                            8.18      6.62        24% 
 Services                                6.65      6.44         3% 
 Revenue (excluding perpetual 
  licences)                             14.83     13.06        14% 
 Perpetual licences                      0.70      0.97      (28%) 
 Total revenue                          15.53     14.03        11% 
 

Growth in term licence ARR

We are growing term licences from our proprietary solutions but we also sell third-party products on a standalone basis or to support our own solution sales. In the twelve-month period to 31 July 2023, we have increased the annualised value of term licences by 27% overall (23% for 1Spatial solutions), as shown in the table below.

 
                                  H1 2024   H1 2023   Growth 
 ARR for term licences - owned       5.01      4.07      23% 
 ARR for term licences - third 
  party                              1.55      1.10      41% 
                                 --------  -------- 
 ARR for term licences - total       6.56      5.17      27% 
 

Annualised Recurring Revenue

The Annualised Recurring Revenue ("ARR") (annualised value at the period-end of committed recurring contracts for term licences and support and maintenance) increased by 10% from GBP15.0m at 31 July 2022 to GBP16.5m as at 31 July 2023. The growth rates varied by region as shown in the table below with most regions growing total ARR and the US growing at the fastest rate of 22%. The UK also had an excellent growth rate at 10%. Europe's ARR growth rate was modest at 9%. The overall renewal rate remains high at around 94%.

 
 
   ARR by region 
                    H1 2024   H1 2023   Growth 
 UK/Ireland            6.95      6.30      10% 
 Europe                5.56      5.09       9% 
 US                    2.56      2.09      22% 
 Australia             1.58      1.72      -8% 
                   --------  --------  ------- 
 Total ARR            16.65     15.20      10% 
                   --------  --------  ------- 
 
 

Committed services revenue

The level of committed services revenue, which has reduced since the start of the year as services revenue on our major projects won last year is recognised, nevertheless remains high at GBP10.6m and provides strong revenue visibility, underpinning the Group's strong financial footing.

The combination of growing ARR, committed services revenue backlog and a strong pipeline of prospects means that the business is on track to make further progress on its revenue growth plan. With the business focus on developing and selling repeatable software solutions under a SaaS model, there is an increased level of revenue visibility, which allows the Board to continue to invest with confidence.

Regional revenue

Revenue by region is shown in the table below:

 
 Regional revenue 
                                                        Growth 
                                         Growth    % (constant 
                     H1 2024   H1 2023        %            fx) 
 UK/Ireland             6.37      5.62      13%            13% 
 Europe                 5.12      5.31     (4%)           (7%) 
 US                     2.29      1.80      27%            24% 
 Australia              1.75      1.30      35%            40% 
                    --------  -------- 
                       15.53     14.03      11%             9% 
                    --------  -------- 
 
 

It was pleasing to achieve double-digit revenue growth overall, which was driven mainly by the strong growth in the UK, Australia and the US following excellent contract wins last year, offset by the results in Europe. In Europe, revenue was impacted by the timing of closing a major contract at the end of H1 with an estimated annual licence revenue of EUR0.5m. This contract is now expected to close at the end of FY 2024. The delay in conversion of this opportunity resulted in a reduction of 7% at constant currency compared to the previous year. Going forward, all regions will continue to focus on increasing their sales of higher margin owned technology sold as term licences.

Gross profit margin

In spite of inflationary increases we have seen across our cost base over the last 12 months, the gross profit margin increased two percentage points to 52% (H1 FY23: 50%) through the increase of subscriptions pricing and charge out rates.

Cost management continues to be an important focus during FY 2024. Although the business is incurring some planned increases in costs to support future revenue growth, the management team will remain focused on driving improvements to the gross margin levels through revenue growth of higher margin term licences.

Adjusted EBITDA

The adjusted EBITDA decreased by 16% to GBP1.7m from GBP2.0m in the prior period with EBITDA margin also lower than the prior period at 10.9% (H1 2023: 14.4% ). This decrease was due primarily to the continued investment in our sales resource. As a sales-led organisation, targeted investment in people is critical to ensure that we achieve our strategic sales objectives and we will continue to invest to execute our strategy. To enable further planned investment in this area, the management team carried out a review of operational and R&D costs in the half, taking GBP1m of non-revenue generating expenditure out of the business on an annualised basis. With the combination of the cost reduction program and a larger weighting of term licence renewals in the second half of the year, we will recoup the EBITDA shortfall in the next six months. We will also have the headcount to deliver the sale of SaaS product in the second half and into the new financial year.

Operating (loss)/profit

The Group recorded an operating loss of GBP0.3m compared to a profit of GBP0.4m in the prior year. Excluding the impact of restructuring costs (GBP0.3m), which were incurred primarily in our European operation, the Group reported a marginal profit. We are satisfied with the result for the period and are confident that the restructuring carried out will benefit of the Group's success in the medium term.

Taxation

The tax charge for the period was GBP0.1m (H1 2023: GBP0.1m).

Balance sheet

The Group's net assets increased to GBP16.7m at 31 July 2023 (H1 2023: GBP15.7m). Intangible assets increased to GBP18.5m (H1 2023: GBP15.9m), mainly due to increased R&D expenditure on our SaaS products. The drive to increase investment in our SaaS offerings has yielded its first results in the first six months of the year with a number of deals signed in the US and five trials signed in the UK. We will continue to invest in these product sets as we are confident that conversion of further opportunities will result in significant top line and EBITDA growth.

Cash flow

Cash generated from operations was GBP0.7m (H1 2023: GBP1.3m). This decrease was driven primarily by a higher cost base notably through increases in headcount, professional fees, legal expenses and exceptional items. While we did observe an increase in revenue generated, the incremental cost base was in excess of any additional cash generated from sales. With the traction demonstrated by the sales team over the last six months, the timing of term licence renewals weighted towards the second half of the year, the non-recurrence of exceptional costs incurred in the half and the positive impact from the restructuring carried out in first half of the year, we are confident that the cash inflow in the second half of the year will be improved on the first half.

Free cash outflow in the first half of the year was GBP2.5m (H1 FY23: GBP0.9m). In addition to the decrease in cash generated from operations for the same period in the prior year, the investment in software and research and development has also increased (GBP1.0m compared to the prior period). The increase in cost is focussed on the development of our cloud and SaaS product (GBP0.6m of software and research and development time) and investment in products developed in collaboration with major partners (GBP0.4m) where opportunities for sales have already been identified. The expected full year R&D spend remains in line with forecast and all development costs are consistent with our strategic objectives.

 
 Free cash flow                                  H1 2024   H1 2023 
                                                 GBP'000   GBP'000 
                                                --------  -------- 
 Cash generated from operations                      683     1,343 
 Net interest paid                                 (138)      (75) 
 Net tax paid                                       (59)      (26) 
 Expenditure on software, product development 
  and intellectual property capitalised          (2,565)   (1,563) 
 Purchase of property, plant and equipment          (35)     (104) 
 Lease payments                                    (384)     (454) 
                                                --------  -------- 
 Free cash outflow                               (2,498)     (879) 
                                                --------  -------- 
 

Investment in R&D

Development costs capitalised in the period amounted to GBP2.1m (H1 2023: GBP1.6m). Amortisation of development costs was GBP0.9m (H1 2023: GBP0.7m). The increased R&D expenditure primarily relates to the investment in cloud-based SaaS solutions and development of product where opportunities have already been identified.

Financing

The Group has a GBP3m Revolving Credit Facility to ensure that the Group's working capital position is strengthened. The secured facility, arranged in June 2022, is committed for three years and priced on competitive terms. As at 31 July 2023 there was GBP1.1m drawn from the facility which we intend to repay by the end of the financial year.

 
 Condensed consolidated statement of comprehensive income 
  Six months ended 31 July 2023 
                                                        Unaudited    Unaudited       Audited 
                                                       Six months   Six months 
                                                            ended        ended    Year ended 
                                                          31 July      31 July    31 January 
                                                             2023         2022          2023 
 
                                                Note      GBP'000      GBP'000       GBP'000 
---------------------------------------------  -----  -----------  -----------  ------------ 
 Revenue                                          4        15,537       14,028        30,002 
 Cost of sales                                            (7,496)      (7,078)      (14,504) 
---------------------------------------------  -----  -----------  -----------  ------------ 
 Gross profit                                               8,041        6,950        15,498 
 Administrative expenses                                  (8,359)      (6,589)      (14,244) 
---------------------------------------------  -----  -----------  -----------  ------------ 
                                                            (318)          361         1,254 
---------------------------------------------  -----  -----------  -----------  ------------ 
 Adjusted EBITDA                                 3          1,686        2,017         4,997 
 Less: depreciation                                          (86)        (105)         (253) 
 Less: depreciation on right of use 
  asset                                                     (394)        (491)       (1,056) 
 Less: amortisation and impairment 
  of intangible assets                           7        (1,120)        (915)       (2,048) 
 Less: share-based payment charge                            (14)        (145)         (192) 
 Less: strategic, integration and other 
  non-recurring items                                       (390)            -         (194) 
---------------------------------------------  -----  -----------  -----------  ------------ 
 Operating (loss)/profit                                    (318)          361         1,254 
 Finance income                                                 9            7            19 
 Finance cost                                               (147)        (101)         (229) 
---------------------------------------------  -----  -----------  -----------  ------------ 
 Net finance cost                                           (138)         (94)         (210) 
 (Loss)/profit before tax                                   (456)          267         1,044 
 Income tax (charge)/credit                      5           (59)         (60)            14 
---------------------------------------------  -----  -----------  -----------  ------------ 
 (Loss)/profit for the period                               (515)          207         1,058 
 
   Other comprehensive income 
 Items that may subsequently be reclassified 
  to profit or loss: 
 Actuarial gains/(losses) arising on 
  defined benefit pension, net of tax              -            -                        162 
 Exchange differences on translating 
  foreign operations                                        (189)          210           415 
 Other comprehensive (loss)/income 
  for the period, net of tax                                (189)          210           577 
=============================================  =====  ===========  ===========  ============ 
 Total comprehensive (loss)/gain for 
  the period attributable to the equity 
  shareholders of the Parent                                (704)          417         1,635 
=============================================  =====  ===========  ===========  ============ 
 
 
 
 (Loss)/profit per ordinary share from continuing operations 
  attributable to the equity shareholders of the Parent during 
  the period (expressed in pence per ordinary share): 
 
                                           Unaudited    Unaudited       Audited 
                                          Six months   Six months          Year 
                                               ended        ended         ended 
                                             31 July      31 July    31 January 
                                                2023         2022          2023 
 Basic (loss)/earnings per share      6        (0.5)          0.2           1.0 
 Diluted (loss)/earnings per share    6        (0.5)          0.2           0.9 
 
 
 
 
 Condensed consolidated statement of financial position 
  As at 31 July 2023 
                                                                  Unaudited       Audited   Unaudited 
                                                                      As at         As at       As at 
                                                                    31 July    31 January     31 July 
                                                                       2023          2023        2022 
--------------------------------------------------------  -----  ----------  ------------  ---------- 
                                                           Note     GBP'000       GBP'000     GBP'000 
--------------------------------------------------------  -----  ----------  ------------  ---------- 
 Assets 
 Non-current assets 
 Intangible assets including goodwill                       8        18,531        17,408      15,940 
 Property, plant and equipment                                          265           302         376 
 Right-of-use assets                                                  1,621         1,609       2,000 
 Total non-current assets                                            20,417        19,319      18,316 
--------------------------------------------------------  -----  ----------  ------------  ---------- 
 Current assets 
 Trade and other receivables                                9        12,322        14,151      12,305 
 Current income tax receivable                                           44            35         179 
 Cash and cash equivalents                                  10        3,250         5,036       4,529 
--------------------------------------------------------  -----  ----------  ------------  ---------- 
 Total current assets                                                15,616        19,222      17,013 
--------------------------------------------------------  -----  ----------  ------------  ---------- 
 Total assets                                                        36,033        38,541      35,329 
--------------------------------------------------------  -----  ----------  ------------  ---------- 
 Liabilities 
 Current liabilities 
 Bank borrowings                                            10      (1,745)         (660)       (643) 
 Trade and other payables                                   11     (13,196)      (15,797)    (12,741) 
 Lease liabilities                                                    (523)         (608)       (621) 
 Deferred consideration                                                   -          (28)       (370) 
 Total current liabilities                                         (15,464)      (17,093)    (14,375) 
--------------------------------------------------------  -----  ----------  ------------  ---------- 
 Non-current liabilities 
 Bank borrowings                                            10        (962)       (1,322)     (1,562) 
 Lease liabilities                                                  (1,178)       (1,077)     (1,348) 
 Deferred consideration                                                   -             -           - 
 Defined benefit pension obligation                                 (1,178)       (1,154)     (1,319) 
 Deferred tax                                                         (547)         (544)     (1,058) 
 Total non-current liabilities                                      (3,865)       (4,097)     (5,287) 
--------------------------------------------------------  -----  ----------  ------------  ---------- 
 Total liabilities                                                 (19,329)      (21,190)    (19,662) 
 Net assets                                                          16,704        17,351      15,667 
========================================================  =====  ==========  ============  ========== 
 
 Share capital and reserves 
 Share capital                                              12       20,161        20,155      20,150 
 Share premium account                                               30,497        30,488      30,479 
 Own shares held                                                       (28)         (139)       (303) 
 Equity-settled employee benefits 
  reserve                                                             4,136         4,122       4,075 
 Merger reserve                                                      16,465        16,465      16,465 
 Reverse acquisition reserve                                       (11,584)      (11,584)    (11,584) 
 Currency translation reserve                                           312           501         296 
 Accumulated losses                                                (42,778)      (42,180)    (43,434) 
 Purchase of non-controlling interest 
  reserves                                                            (477)         (477)       (477) 
--------------------------------------------------------  -----  ----------  ------------  ---------- 
 Equity attributable to shareholders 
  of the Parent company                                              16,704        17,351      15,667 
--------------------------------------------------------  -----  ----------  ------------  ---------- 
 Total equity                                                        16,704        17,351      15,667 
========================================================  =====  ==========  ============  ========== 
 
 
 
 
 
 Condensed 
 consolidated 
 statement 
 of changes in 
 equity 
 Period ended 
 31 July 2023 
                                                                                                      Purchase 
                                               Equity-settled                                         of 
                             Share     Own        employee                  Reverse      Currency     non-controlling 
                   Share    premium   shares      benefits      Merger    acquisition   translation   interest          Accumulated    Total 
   GBP'000        capital   account    held        reserve      reserve     reserve       reserve     reserve              losses      equity 
 
 Balance at 31 
  January 2022 
  as restated 
  (Audited)        20,150    30,479    (303)            3,930    16,465      (11,584)            86             (477)      (43,236)    15,510 
---------------  --------  --------  -------  ---------------  --------  ------------  ------------  ----------------  ------------  -------- 
 Comprehensive 
 income/(loss) 
 Profit for the 
  year                  -         -        -                -         -             -             -                 -         1,058     1,058 
 Other 
 comprehensive 
 income/(loss) 
---------------  --------  --------  -------  ---------------  --------  ------------  ------------  ----------------  ------------  -------- 
 Actuarial 
  gains arising 
  on 
  defined 
  benefit 
  pension               -         -        -                -         -             -             -                 -           162       162 
 Exchange 
  differences 
  on 
  translating 
  foreign 
  operations            -         -        -                -         -             -           415                 -             -       415 
 Total other 
  comprehensive 
  (loss)/income         -         -        -                -         -             -           415                 -           162       577 
---------------  --------  --------  -------  ---------------  --------  ------------  ------------  ----------------  ------------  -------- 
 Total 
  comprehensive 
  (loss)/income         -         -        -                -         -             -           415                 -         1,220     1,635 
---------------  --------  --------  -------  ---------------  --------  ------------  ------------  ----------------  ------------  -------- 
 Transactions 
 with owners 
 recognised 
 directly in 
 equity 
 Recognition of 
  share-based 
  payments              -         -        -              192         -             -             -                 -             -       192 
 Issue of share 
  capital               5         9        -                -         -             -             -                 -             -        14 
 Transfer of 
  treasury 
  shares                -         -      164                -         -             -             -                 -         (164)         - 
---------------  --------  --------  -------  ---------------  --------  ------------  ------------  ----------------  ------------  -------- 
                        5         9      164              192         -             -             -                 -         (164)       206 
---------------  --------  --------  -------  ---------------  --------  ------------  ------------  ----------------  ------------  -------- 
 
   Balance at 
   31 January 
   2023 
   (Audited)       20,155    30,488    (139)            4,122    16,465      (11,584)           501             (477)      (42,180)    17,351 
===============  ========  ========  =======  ===============  ========  ============  ============  ================  ============  ======== 
 Comprehensive 
 income/(loss) 
 Profit for the 
  period                -         -        -                -         -             -             -                 -         (515)     (515) 
 Other 
 comprehensive 
 income 
 Exchange 
  differences 
  on 
  translating 
  foreign 
  operations            -         -        -                -         -             -         (189)                 -             -     (189) 
---------------  --------  --------  -------  ---------------  --------  ------------  ------------  ----------------  ------------  -------- 
 Total other 
  comprehensive 
  (loss)/income         -         -        -                -         -             -         (189)                 -         (515)     (704) 
---------------  --------  --------  -------  ---------------  --------  ------------  ------------  ----------------  ------------  -------- 
 Total 
  comprehensive 
  (loss)/income         -         -        -                -         -             -         (189)                 -         (515)     (704) 
 Transactions 
 with owners 
 recognised 
 directly in 
 equity 
 Recognition of 
  share-based 
  payments              -         -        -               14         -             -             -                 -             -        14 
 Issue of share 
  capital               6         9                                                                                                        15 
 Transfer of 
  treasury 
  shares                                 111                                                                                   (83)        28 
---------------  --------  --------  -------  ---------------  --------  ------------  ------------  ----------------  ------------  -------- 
                        6         9        -               14         -             -         (189)                 -         (515)     (648) 
---------------  --------  --------  -------  ---------------  --------  ------------  ------------  ----------------  ------------  -------- 
 
   Balance at 
   31 July 2023 
   (Unaudited)     20,161    30,497     (28)            4,136    16,465      (11,584)           312             (477)      (42,778)    16,704 
===============  ========  ========  =======  ===============  ========  ============  ============  ================  ============  ======== 
 
 
 
 
 
                                                                                                          Purchase 
                                               Equity-settled                                                of 
                             Share     Own        employee                  Reverse      Currency      non-controlling 
                   Share    premium   shares      benefits      Merger    acquisition   translation       interest       Accumulated    Total 
   GBP'000        capital   account    held        reserve      reserve     reserve       reserve          reserve          losses      equity 
 
 Balance at 31 
  January 2022 
  (Audited)        20,150    30,479    (303)            3,930    16,465      (11,584)            86              (477)      (43,236)    15,510 
---------------  --------  --------  -------  ---------------  --------  ------------  ------------  -----------------  ------------  -------- 
 Comprehensive 
 loss 
 Loss for the 
  period                -         -        -                -         -             -             -                  -           207       207 
 Other 
 comprehensive 
 (loss)/income 
 Exchange 
  differences 
  on 
  translating 
  foreign 
  operations            -         -        -                -         -             -           210                  -             -       210 
---------------  --------  --------  -------  ---------------  --------  ------------  ------------  -----------------  ------------  -------- 
 Total other 
  comprehensive 
  (loss)/income         -         -        -                -         -             -           210                  -           207       417 
---------------  --------  --------  -------  ---------------  --------  ------------  ------------  -----------------  ------------  -------- 
 Total 
  comprehensive 
  (loss)/income         -         -        -                -         -             -           210                  -           207       417 
---------------  --------  --------  -------  ---------------  --------  ------------  ------------  -----------------  ------------  -------- 
 Transactions 
 with owners 
 recognised 
 directly in 
 equity 
---------------  --------  --------  -------  ---------------  --------  ------------  ------------  -----------------  ------------  -------- 
 Recognition of 
  share-based 
  payments              -         -        -              145         -             -             -                  -             -       145 
---------------  --------  --------  -------  ---------------  --------  ------------  ------------  -----------------  ------------  -------- 
                        -         -        -                -         -             -             -                  -             -         - 
---------------  --------  --------  -------  ---------------  --------  ------------  ------------  -----------------  ------------  -------- 
 
   Balance at 
   31 July 2022 
   (Unaudited)     20,150    30,479    (303)            4,075    16,465      (11,584)           296              (477)      (43,029)    16,072 
===============  ========  ========  =======  ===============  ========  ============  ============  =================  ============  ======== 
 
 
 
 Condensed consolidated statement of cash flows 
  Period ended 31 July 2023 
                                                   Unaudited    Unaudited       Audited 
                                                  Six months   Six months 
                                                       ended        ended    Year ended 
                                                     31 July      31 July    31 January 
                                                        2023         2022          2023 
                                           Note      GBP'000      GBP'000       GBP'000 
----------------------------------------  -----  -----------  -----------  ------------ 
 Cash flows from operating activities 
 Cash generated from operations             10           683        1,343         5,352 
 Interest received                                         9            6            19 
 Interest paid                                         (147)         (81)         (229) 
 Tax paid                                               (59)         (26)           (-) 
 Tax received                                              -            -           179 
 Net cash from operating activities                      486        1,242         5,321 
----------------------------------------  -----  -----------  -----------  ------------ 
 Cash flows from investing activities 
 Purchase of property, plant and 
  equipment                                             (35)        (104)         (163) 
 Expenditure on product development 
  and intellectual property capitalised              (2,565)      (1,563)       (3,854) 
 Net cash used in investing activities               (2,600)      (1,667)       (4,017) 
----------------------------------------  -----  -----------  -----------  ------------ 
 Cash flows from financing activities 
 Proceeds from loans and borrowings                    1,100                        500 
 Repayment of loans and borrowings                     (313)        (206)       (1,043) 
 Repayment of lease obligations                        (384)        (454)       (1,088) 
 Payment of deferred consideration 
  on acquisition                                        (27)            -         (352) 
 Net proceeds from share issue                            16            -            14 
 Net cash used in financing activities                   392        (660)       (1,980) 
----------------------------------------  -----  -----------  -----------  ------------ 
 Net decrease in cash and cash 
  equivalents                                        (1,722)      (1,085)         (676) 
 Cash and cash equivalents at start 
  of period                                            5,036        5,623         5,623 
 
   Effects of foreign exchange on 
   cash and cash equivalents                            (64)          (9)            89 
 Cash and cash equivalents at 
  end of period                             10         3,250        4,529         5,036 
----------------------------------------  -----  -----------  -----------  ------------ 
 
 
 

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 Tennyson House, Cambridge Business Park, Cowley Road, Cambridge, CB4 0WZ. The registered number of the Company is 5429800.

The principal activity of the Group is the development and sale of software along with related consultancy and support.

2. Basis of preparation

This condensed consolidated interim financial report for the half-year reporting period ended 31 July 2023 has been prepared in accordance with UK adopted IAS 34 Interim Financial Reporting. The interim report does not include all the information required for a complete set of IFRS financial statements. Accordingly, this report is to be read in conjunction with the annual report for the year ended 31 January 2023 and any public announcements made by 1Spatial Plc during the interim reporting period. The annual financial statements of the Group were prepared in accordance UK adopted international accounting standards.

The accounting policies adopted in the preparation of the interim financial statements are consistent with those followed in the preparation of the Group's consolidated financial statements as at and for the year ended 31 January 2023.The Group has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective.

Several amendments and interpretations apply for the first time in 2022, but do not have a material impact on the interim financial statements of the Group.

The financial information for the six months ended 31 July 2023 and 31 July 2022 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 2023 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.

These interim financial statements were authorised for issue by the Company's Board of Directors on 10 October 2023.

3. Alternative Performance Measures ('APMs')

The Group uses certain Alternative Performance Measures to enable the users of the Group's financial statements to understand and evaluate the performance of the Group consistently over different reporting periods. APMs are non-GAAP company specific measures. As these are non-GAAP measures, they should not be considered as replacements for IFRS measures. The Group's definition of non-GAAP measures may not be comparable to other similarly titled measures reported by other companies. A description of the measures set out above is included below with a reconciliation to the closest GAAP measure included in the notes to the consolidated condensed interim financial report.

 
 APM                    Explanation of APM 
 Recurring Revenue      Recurring Revenue is the value of committed 
  (s)                    recurring contracts for term licences and support 
                         & maintenance recorded in the year. 
                       ----------------------------------------------------- 
 Annualised Recurring   Annualised Recurring Revenue ("ARR") is the 
  Revenue ("ARR")        annualised value at the year-end of committed 
                         recurring contracts for term licences and support 
                         & maintenance. 
                       ----------------------------------------------------- 
 Adjusted EBITDA        Adjusted EBITDA is a company-specific measure 
                         which is calculated as operating profit/(loss) 
                         before depreciation (including right of use 
                         asset depreciation), amortisation and impairment 
                         of intangible assets, share-based payment charge 
                         and strategic, integration, and other non-recurring 
                         items. 
                       ----------------------------------------------------- 
 Operating cashflow     Operating cashflow is a company-specific measure 
                         which is calculated as cash generated from 
                         operations excluding cash flow on strategic, 
                         integration and other non-recurring items. 
                       ----------------------------------------------------- 
 Free cashflow          Free cash flow is defined as net increase/(decrease) 
                         in cash for the year before cash flows from 
                         the acquisition of subsidiaries, cash flows 
                         from new borrowings and repayments of borrowings 
                         and cash flow from new share issue. But excludes 
                         lease liabilities. 
                       ----------------------------------------------------- 
 Net cash               Net cash is gross cash less bank borrowings. 
                       ----------------------------------------------------- 
 
 
 Recurring Revenue                                      H1 2024   H1 2023     FY2023 
-----------------------------------------------------  --------  --------  --------- 
 Total Revenue                                           15,537    14,028     30,002 
 Adjustments: 
 Services                                               (6,653)   (6,438)   (13,601) 
 Perpetual Licences - own                                 (188)     (271)      (393) 
 Perpetual Licences - third party                         (508)     (695)    (1,253) 
-----------------------------------------------------  --------  --------  --------- 
 Recurring Revenue                                        8,188     6,624     14,755 
-----------------------------------------------------  --------  --------  --------- 
 
 Annualised Recurring Revenue                           H1 2024   H1 2023     FY2023 
-----------------------------------------------------  --------  --------  --------- 
 Recurring Revenue                                        8,188     6,624     14,755 
 Adjustments: 
 Timing differences on Net New Revenue in 
  period                                                  8,457     8,571      1,018 
-----------------------------------------------------  --------  --------  --------- 
 Annualised Recurring Revenue                            16,645    15,195     15,773 
-----------------------------------------------------  --------  --------  --------- 
 
 Adjusted EBITDA                                        H1 2024   H1 2023     FY2023 
-----------------------------------------------------  --------  --------  --------- 
 (Loss)/profit before tax                                 (456)       267      1,044 
 Adjustments: 
 Depreciation                                               480       596      1,309 
 Amortisation and impairment of intangible 
  assets                                                  1,120       915      2,048 
 Share-based payment charge                                  14       145        192 
 Strategic, integration and other one-off 
  items                                                     390         -        194 
 Net finance cost                                           138        94        210 
-----------------------------------------------------  --------  --------  --------- 
 Adjusted EBITDA                                          1,686     2,017      4,997 
-----------------------------------------------------  --------  --------  --------- 
 
 Operating Cashflow                                     H1 2024   H1 2023     FY2023 
 Cash generated from operations                             683     1,343      5,352 
 Adjustments: 
 Cash flow on strategic, integration and other 
  non-recurring items                                       516         -         48 
 Cash generated from operations before strategic, 
  integration and other non-recurring items               1,199     1,343      5,400 
 
 Free cash flow                                         H1 2024   H1 2023     FY2023 
-----------------------------------------------------  --------  --------  --------- 
 Cash generated from operations before strategic, 
  integration and other non-recurring items               1,199     1,343      5,400 
 Adjustments: 
 Net interest paid                                        (138)      (75)      (210) 
 Net tax (paid)/received                                   (59)      (26)        179 
 Expenditure on product development and intellectual 
  property capitalised                                  (2,565)   (1,563)    (3,854) 
 Purchase of property, plant and equipment                 (35)     (104)      (163) 
 Lease payments                                           (384)     (454)    (1,099) 
-----------------------------------------------------  --------  --------  --------- 
 Free cash flow before strategic, integration 
  and other non-recurring items                         (1,982)     (879)        253 
 Cash flow on strategic, integration and other 
  non-recurring items                                     (516)         -       (48) 
-----------------------------------------------------  --------  --------  --------- 
 Free cash flow                                         (2,498)     (879)        205 
 
 Net Cash                                               H1 2024   H1 2023     FY2023 
 Cash and cash equivalents                                3,250     4,529      5,036 
 Adjustments: 
 Bank Borrowings - current                              (1,745)     (643)      (660) 
 Bank Borrowings - non-current                            (962)   (1,562)    (1,322) 
 Net Cash                                                   543     2,324      3,054 
 
 

4. Revenue

The following table provides an analysis of the Group's revenue by type:

 
 Revenue by type 
                                     H1 2024   H1 2023 
                                      GBP000    GBP000 
 SaaS Solutions                         0.09         - 
 Term licences - own                    2.45      1.14    114% 
 Term licences - third party            0.90      0.55     64% 
                                    --------  -------- 
 SaaS and Term licences - total         3.44      1.69    103% 
 Support & maintenance                  4.74      4.93    (4%) 
                                    --------  -------- 
 Recurring revenue                      8.18      6.62     24% 
                                    --------  -------- 
 Services                               6.65      6.44      3% 
 Perpetual licences - own               0.19      0.27   (27%) 
 Perpetual licences - third party       0.51      0.70   (30%) 
                                    --------  -------- 
 Perpetual licences - total             0.70      0.97   (28%) 
                                    --------  -------- 
 Total revenue                         15.53     14.03     11% 
                                    --------  -------- 
 Percentage of recurring revenue         53%       47% 
 

5. Taxation

The tax charge on the result for the six months ended 31 July 2023 is based on the estimated tax rates in the jurisdictions in which the Group operates for the year ending 31 January 2024.

6. (Loss)/earnings per share

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

 
                                          Unaudited    Unaudited        Audited 
                                         Six months   Six months 
                                              ended        ended     Year ended 
                                            31 July      31 July     31 January 
                                               2023         2022           2023 
                                            GBP'000      GBP'000        GBP'000 
 (Loss)/profit attributable to equity 
  holders of the Parent                       (515)          207          1,058 
--------------------------------------  -----------  -----------  ------------- 
 
 
                                             Number       Number         Number 
                                               000s         000s           000s 
--------------------------------------  -----------  -----------  ------------- 
 Ordinary shares with voting rights         110,829      110,486        110,712 
--------------------------------------  -----------  -----------  ------------- 
 Deferred consideration payable 
  in shares                                       -           56             55 
--------------------------------------  -----------  -----------  ------------- 
 Basic weighted average number 
  of ordinary shares                        110,859      110,542        110,807 
--------------------------------------  -----------  -----------  ------------- 
 Impact of share options/LTIPs                3,264        3,890          2,845 
--------------------------------------  -----------  -----------  ------------- 
 Diluted weighted average number 
  of ordinary shares                        114,123      114,432        113,652 
--------------------------------------  -----------  -----------  ------------- 
 
 
                                       Unaudited    Unaudited        Audited 
                                      Six months   Six months 
                                           ended        ended     Year ended 
                                         31 July      31 July     31 January 
                                            2023         2022           2023 
                                           Pence        Pence          Pence 
-----------------------------------  -----------  -----------  ------------- 
 Basic (loss)/earnings per share           (0.5)          0.2            1.0 
-----------------------------------  -----------  -----------  ------------- 
 Diluted (loss)/earnings per share         (0.5)          0.2            0.9 
-----------------------------------  -----------  -----------  ------------- 
 

There is no material difference between basic earnings per share and diluted earnings per share.

For H1 FY 2024, basic loss per share and diluted loss per share are the same because the options are anti-dilutive. Therefore, they have been excluded from the calculation of diluted weighted average number of ordinary shares.

7. Dividends

No dividend is proposed for the six months ended 31 July 2023 (31 January 2023: nil; 31 July 2022: nil).

8. Intangible assets including goodwill

 
                           Goodwill   Brands     Customers     Software   Development   Intellectual    Total 
                                                 and related                 costs        property 
                                                  contracts 
                           GBP'000    GBP'000     GBP'000      GBP'000      GBP'000       GBP'000      GBP'000 
 Cost 
 At 1 February 
  2023                       17,672       462          4,738      6,799        25,597             72    55,340 
 Additions                        -         -              -        383         2,172             10     2,565 
 Effect of foreign 
  exchange                    (233)       (6)           (93)       (97)         (316)              -     (745) 
------------------------ 
 At 31 July 2023             17,439       456          4,645      7,085        27,453             82    57,160 
------------------------  ---------  --------  -------------  ---------  ------------  -------------  -------- 
 Accumulated impairment 
  and amortisation 
 At 1 February 
  2023                       11,517       318          3,933      5,294        16,847             23    37,932 
 Amortisation                     -        11             76        116           914              3     1,120 
 Effect of foreign 
  exchange                       93         2             73         52           203              -       423 
 At 31 July 2023             11,424       327          3,936      5,358        17,558             26    38,629 
------------------------  ---------  --------  -------------  ---------  ------------  -------------  -------- 
 Net book amount 
  at 
  31 July 2023                6,015       129            709      1,348        10,274             56    18,531 
========================  =========  ========  =============  =========  ============  =============  ======== 
 
 
                             Goodwill   Brands     Customers     Software   Development   Intellectual    Total 
                                                   and related                 costs        property 
                                                    contracts 
                             GBP'000    GBP'000     GBP'000      GBP'000      GBP'000       GBP'000      GBP'000 
 Cost 
 At 1 February 
  2022                        17,194      450        4,547        6,574       21,228           72        50,065 
 Additions                      -          -           -            7          1,556           -          1,563 
 Effect of foreign 
  exchange                     284         2           28           27          106            -           447 
-------------------------- 
 At 31 July 2022              17,478      452        4,575        6,608       22,890           72        52,075 
--------------------------  ---------  --------  -------------  ---------  ------------  -------------  -------- 
 
 
   Accumulated impairment 
   and amortisation 
 At 1 February 
  2022                        11,330      291        3,640        4,958       14,826           17        35,062 
 Amortisation                   -         11           73          103          725            3           915 
 Effect of foreign 
  exchange                      23         -           20           17          98             -           158 
 At 31 July 2022              11,353      302        3,733        5,078       15,649           20        36,135 
--------------------------  ---------  --------  -------------  ---------  ------------  -------------  -------- 
 Net book amount 
  at 
  31 July 2022                6,125       150         842         1,530        7,241           52        15,940 
==========================  =========  ========  =============  =========  ============  =============  ======== 
 
 
                           Goodwill   Brands     Customers     Software   Development   Intellectual    Total 
                                                 and related                 costs        property 
                                                  contracts 
                           GBP'000    GBP'000     GBP'000      GBP'000      GBP'000       GBP'000      GBP'000 
 Cost 
 At 1 February 2022         17,194      450        4,547        6,574       21,228           72        50,065 
 Additions                    -          -           -            39         3,815           -          3,854 
 Effect of foreign 
  exchange                   478        12          191          186          554            -          1,421 
------------------------ 
 At 31 January 
  2023                      17,672      462        4,738        6,799       25,597           72        55,340 
------------------------  ---------  --------  -------------  ---------  ------------  -------------  -------- 
 
 Accumulated impairment 
  and amortisation 
 At 1 February 2022         11,330      291        3,640        4,958       14,826           17        35,062 
 Amortisation                 -         22          149          227         1,644           6          2,048 
 Effect of foreign 
  exchange                   187         5          144          109          377            -           822 
 At 31 January 
  2023                      11,517      318        3,933        5,294       16,847           23        37,932 
------------------------  ---------  --------  -------------  ---------  ------------  -------------  -------- 
 Net book amount 
  at 
  31 January 2023           6,155       144         805         1,505        8,750           49        17,408 
========================  =========  ========  =============  =========  ============  =============  ======== 
 Net book amount 
  at 
  31 January 2022           5,864       159         907         1,616        6,402           55        15,003 
========================  =========  ========  =============  =========  ============  =============  ======== 
 

9. Trade and other receivables

 
                                               As at         As at      As at 
                                             31 July    31 January    31 July 
                                                2023          2023       2022 
  Current                                    GBP'000       GBP'000    GBP'000 
-----------------------------------------  ---------  ------------  --------- 
 Trade receivables                             4,173         4,992      2,701 
 Less: provision for impairment of trade 
  receivables                                   (22)          (29)       (25) 
-----------------------------------------  ---------  ------------  --------- 
                                               4,151         4,963      2,676 
 Other receivables                             1,747         2,044      1,618 
 Prepayments and accrued income                6,424         7,144      8,011 
-----------------------------------------  ---------  ------------  --------- 
                                              12,322        14,151     12,305 
-----------------------------------------  ---------  ------------  --------- 
 
 
 10. Notes to the condensed consolidated statement of cash flows 
 
   a) Cash used in operations 
                                                  Unaudited    Unaudited         Audited 
                                                 Six months   Six months 
                                                      ended        ended      Year ended 
                                                    31 July      31 July      31 January 
                                                       2023         2022            2023 
                                                    GBP'000      GBP'000         GBP'000 
----------------------------------------------  -----------  -----------  -------------- 
 
 Profit/(loss) before tax                             (456)          267           1,044 
 Adjustments for: 
 Net finance cost                                       138           94             210 
 Depreciation                                           480          596           1,309 
 Amortisation of acquired intangibles                   206          190             386 
 Amortisation and impairment of development 
  costs                                                 914          725           1,662 
 Share-based payment charge                              14          145             192 
 Decrease/(increase) in trade and other 
  receivables                                         1,580          216         (1,426) 
 (Decrease)/increase in trade and other 
  payables                                          (2,226)        (668)           1,963 
 Increase/(decrease) in defined benefit 
  pension obligation                                     33           24              12 
 Net foreign exchange movement                            -        (246)               - 
 Cash from operations                                   683        1,343           5,352 
----------------------------------------------  -----------  -----------  -------------- 
 
 b) Reconciliation of net cash flow to movement in net funds 
                                                  Unaudited    Unaudited         Audited 
                                                      As at        As at 
                                                    31 July      31 July        As at 31 
                                                       2023         2022    January 2023 
                                                    GBP'000      GBP'000         GBP'000 
----------------------------------------------  -----------  -----------  -------------- 
 Decrease in cash in the period                     (1,722)      (1,085)           (676) 
----------------------------------------------  -----------  -----------  -------------- 
 Changes resulting from cash flows                  (1,722)      (1,085)           (676) 
 
 Net cash inflow in respect of new borrowings       (1,100)            -               - 
 Net cash outflow in respect of borrowings 
  repaid                                                313          206             543 
 Effect of foreign exchange                             (2)         (28)            (44) 
----------------------------------------------  -----------  -----------  -------------- 
 Change in net funds                                (2,511)        (907)           (177) 
 Net funds at beginning of period                     3,054        3,231           3,231 
---------------------------------------------- 
 Net funds at end of period                             543        2,324           3,054 
----------------------------------------------  -----------  -----------  -------------- 
 
 
 
 
   Analysis of net funds 
 Cash and cash equivalents classified 
  as: 
 Current assets                                       3,250        4,529           5,036 
 Bank and other loans                               (2,707)      (2,205)         (1,982) 
 Net funds at end of period                             543        2,324           3,054 
----------------------------------------------  -----------  -----------  -------------- 
 

Net funds is defined as cash and cash equivalents net of bank loans.

11. Trade and other payables

 
                                                        As        As 
                                                        at        at 
                                          As at         31        31 
                                        31 July    January      July 
                                           2023       2023      2022 
  Current                               GBP'000    GBP'000     GBP'000 
------------------------------------  ---------  ---------  ---------- 
 Trade payables                           2,760      2,861       2,242 
 Other taxation and social security       2,671      3,653       2,993 
 Other payables                             410        506         492 
 Accrued liabilities                      1,307      1,229       1,651 
 Deferred income                          6,048      7,548       5,363 
------------------------------------  ---------  ---------  ---------- 
                                         13,196     15,797      12,741 
------------------------------------  ---------  ---------  ---------- 
 

12. Share capital

 
                                                         As at         As at      As at 
                                                       31 July    31 January    31 July 
                                                          2023          2023       2022 
                                                       GBP'000       GBP'000    GBP'000 
---------------------------------------------------  ---------  ------------  --------- 
 Allotted, called up and fully paid 
 110,859,545 (H1 FY 2024: FY 2023: 110,859,545) 
  ordinary shares of 10p each                           11,093        11,087     11,082 
 226,699,878 (H1 FY 2024 and FY 2023: 226,699,878) 
  deferred shares of 4p each                             9,068         9,068      9,068 
---------------------------------------------------  ---------  ------------  --------- 
                                                        20,161        20,155     20,150 
---------------------------------------------------  ---------  ------------  --------- 
 

There are 110,859,545 ordinary shares of 10p in issue, of which 29,899 ordinary shares are held in treasury. Consequently, the total number of voting rights is 110,829,646.

The deferred shares of 4p each do not carry voting rights or a right to receive a dividend. Accordingly, the deferred shares will have no economic value.

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