Delays and disposals

1Spatial’s pipeline has not converted as expected thus far in H2, and given the shift to a subscription weighted model, such deals which do come in between now and the end of January are unlikely to contribute significantly to the P&L. As a result the company expects to be marginally loss-making at the EBITDA level versus our £3.7m profit previously. We welcome the exit from the non-core Avisen and Storage Fusion businesses in the name of improving focus. We still believe that the company’s core strategy of building the GIS business around higher-margin and recurring revenue lines is sound, although – as is often the case – the transition is proving more protracted and painful than initially anticipated.