The words 1Spatial (SPA:AIM), profit warning and share price collapse, have an uncanny habit of appearing together, and here they come again today. The stock is down 32% today at 1.88p, valuing the geo-location technology provider at £13.7m. That's less than half what it was three months ago, two-thirds below the levels of February and an appalling 82% down since January 2014.
The latest blow comes from contracts slipping to the right, meaning a massive miss at the adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) line, where the Cambridge-based company now expects to report a marginal loss for the year to 31 January 2017. Analysts had been hoping for £4.3m profit on the adjusted EBITDA line on £23.4m revenue.
Alongside the warning 1Spatial also announced the closure of its tiny Storage Fusion analytics software business and sale of its Avisen consulting business for £0.1m. The price of the latter action may look surprising since the unit is reported to have generated £300,000 of operating profit in the year to January 2016 on £1.4m revenues.
Shares has previously flagged the considerable doubts about the company's strategic direction, going as far as to hint at the possibility of 'destroying shareholder value as it attempts to reverse an operating performance that fails to live up to the hype.' That's what we wrote on 25 June 2015 when the share price was trading at 6.25p, and since then 70% of value has been lost.
House broker N+1 Singer isn't even confident enough to adjusted its forecasts, choosing to pull its estimates for now.
'We are putting our forecasts under review as the group assesses both the cost base and assets of the company, as management seeks to preserve cash and maintain its core focus,' says analyst Tintin Stormont today.
After a pretty dismal first half, and now this, the prospects of 1Spatial look increasingly bleak and we wouldn't be surprised if management tried to find a buyer for the business.
