1Spatial's (LON:SPA) trading update flags that group performance is expected to be in line with expectations. The core GIS business traded better than expected at both the revenue and EBITDA levels, but a deterioration in prospects for the non-core Enables business has prompted a disposal of 80.1% of this business to management for a £1. While the low consideration is underwhelming, our investment case has always been predicated on the growth and recovery prospects for GIS. It is encouraging that GIS performance is tracking ahead and greater focus on this business should support both prospects and the investment case.
Core GIS business outperforming expectations
The underlying positive news is that the core GIS business traded better than expected at both the revenue (Edison £16.5m +9% y-o-y) and EBITDA level (Edison £1.8m +24% y-o-y, excl central costs). Previous newsflow has indicated the business has been making good progress on a number of fronts, particularly in Europe within the utilities market, and now in the key US market with government agencies, supported by the ESRI partnership.
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