AIM-stock swung to an EBITDA loss of £0.4m and increased operating losses by £14.8m
Companies: 1Spatial Plc
Shares in 1Spatial fell nearly 14% early on Tuesday after the microcap spatial software group moved to a loss in its final results. The Cambridge-based firm burned significant cash during the year and saw its gross profit margin fall 14% to 44%.
Despite 20% revenue growth, thanks to a full-year contribution from Enables IT UK, the firm swung to an EBITDA loss of £0.4m (from £2.9m profit) and increased operating losses by £14.8m.
Organic revenues were down 20%, with weak licence sales impacting profitability and cash generation. Net funds fell to £600k from £5m in 2016.
Broker N+1 Singer said it had been a difficult year, with mixed execution impacting its organic revenue growth and profitability:
"The group moved to a loss and burned a significant amount of cash. Significant board and management change in H2 led to a re-focusing of the business, substantially reducing costs and improving commercial focus. Early trading in Q1 was strong and above budget. While there remains a lot to do, the signs are encouraging that the group can continue to rebuild value over and above the recent share price gains."
The AIM-listed firm impaired £12.9m during the year, with £3.5m from discontinued operations and £9.4m from continuing operations: £5.1m of goodwill, £1.5m of acquired intangibles, and £2.8m of capitalised development costs.
There was also a considerable change in the Board during the year, with Ex-CEO Marcus Hanke replaced by Claire Milverton at the end of December, as well as the appointment of Andy Roberts as Chairman, and Nicole Payne as FD. Non-Exec Director Marcus Yeoman also resigned, and Chairman Mike Sanderson retired.
Despite the update, Exec Chairman Andy Roberts took a bullish tone about the company's prospects, saying it was well-positioned in an "interesting" market, with unique tech that needed to be exploited:
"We have a strong management team, which combined with our in-depth subject matter expertise and technology-led solutions and services, gives the business the opportunity to develop into a significant force in the market."
The stock recovered slightly shortly after opening.
