1Spatial warns of adj EBITDA loss

AIM-listed spatial data company 1Spatial Plc (LSE: SPA) has warned that it expects to deliver a marginal loss for the full-year when its results are released in early 2017.

In a trading update covering its H2 performance and the outlook for the full-year ending 31 January 2017, SPA said that a "number of factors", including transitioning to a new business model and extending industry sales cycles, had meant that it now expected to deliver a marginal adj EBITDA loss for the full-year.

"While 1Spatial's sales pipeline and order book remain robust, due to a number of factors, including transitioning the business model to one of annualised revenues and the extension of the industry sales cycles, timing of certain key contracts are now expected to fall into 2017."

City stockbroker N+1 Singer announced it was putting forecasts under review awaiting further details, with analyst Tintin Stormont saying the profit warning was due to the group transitioning to its new revenue model and an extending its sales cycle, meaning certain contracts would fall into 2017 instead:

"We are putting forecasts under review as we await further details of action plans to restore the group on a healthier footing. As part of today’s announcement, 1Spatial also announced the sale of Avisen (£0.1m consideration) and the closer of Storage Fusion.

 

Whilst these steps should be helpful in increasing focus, positive revenue traction will be required to buoy confidence in the group’s execution of its strategy."

The firm has sought to address the short-term challenges it faces by assessing its cost base and assets of the company, resulting in the sale of Avisen and the closure of Storage Fusion:

"...as management seek to preserve cash and maintain its core focus...

 

...the sale of its Avisen business for a consideration of £0.1m receivable in 12 months' time and the closure of Storage Fusion."

Shares in 1Spatial fell 27% as the market opened on Tuesday.