1Spatial PLC shares fell on Wednesday as it said it has seen a greater than expected decrease in services revenue.
The Cambridge, England-based data management software company said the decrease in services revenue is mostly due to the delay in the start of a large Belgian contract.
It said delivery on the contract has now started and activity has continued to increase.
Shares in 1Spatial were down 9.6% to 57.84 pence in London at midday on Wednesday.
1Spatial said group revenue increased 3.4% to £33.4 million in the 12 months to the end of January from £32.3 million in the 2024 financial year.
The company said software sales exceeded expectations, increasing by 35% to £11.5 million from £8.5 million.
The impact of lower service revenue on adjusted earnings before interest, tax, depreciation and amortisation was offset by the business mix of higher margin software revenues with a reduced cost base, 1Spatial said.
It expects to report adjusted Ebitda of ‘at least’ £5.6 million, up marginally from £5.5 million in the previous year.
‘These results have been delivered against a backdrop of contract delays due to governmental changes in the UK and US,’ 1Spatial said.
Looking ahead, 1Spatial said the new financial year had ‘begun positively’ with ‘a number of new customer contracts in the final stages of negotiation’.
The firm said it has a ‘robust pipeline for new business and renewals’ and expects to sign a third contract for 1Streetworks in the first quarter.
Chief Executive Officer Claire Milverton said: ‘We’ve made some good progress across the group this year and I’m especially pleased that we’ve delivered an increase in software revenues ahead of our expectations, as well as reporting the first significant sales of our higher margin 1Streetworks SaaS solution, with a further material contract in advanced negotiations.
‘With recurring revenue now accounting for 62% of total revenue, the investments that we’ve made in our software platform as well as new sales resource and leadership hires, we look forward to a positive year ahead.’
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