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(Sharecast News) - 1Spatial shares were sliding on Monday, even after it reported a 9% rise in first-half revenue to 17.7m for the six months ended 31 July, driven by continued growth in recurring income and strategic contract wins in the UK and US.
Recurring revenue increased 20% year-on-year to 10.7m, accounting for 61% of total revenue compared with 55% a year earlier.
Annualised recurring revenue rose 11% to 19.9m.
Software-as-a-service (SaaS) and term licence sales grew strongly, with SaaS revenue up 300% to 0.8m and term licence revenue up 37% to 5.6m.
Adjusted EBITDA rose 5% to 2.1m, with the margin easing slightly to 11.9%.
The company said net borrowings increased to 2.5m from 0.9m a year earlier, reflecting continued investment in product development, partly offset by lower cash outflows.
It highlighted several multi-year licence agreements signed during the period, including $1.1m with Montana and 1.1m each with the Department for Environment, Food and Rural Affairs (Defra) and Network Rail.
Since the period end, 1Spatial said it had secured further major deals, including a $1.7m enterprise agreement with the California Department of Transportation and a 1m 1Streetworks contract with UK Power Networks.
The company said these agreements underpin a strong second-half pipeline and support its confidence in achieving full-year targets.
"We have delivered a positive first half, despite challenging global market conditions," said chief executive Claire Milverton.
"We have focused on the successful execution of our strategic priorities, expanding our engagements with existing customers and securing some good wins towards the end of the half and into the third quarter."
Milverton added that as the company looked ahead, its focus remained on accelerating SaaS adoption, converting its pipeline and deepening its presence in the "substantial" US market.
"We are confident the strength of our IP, breadth of customer base and expertise across our team mean we are well placed to deliver attractive growth and cash generation over the medium term."
The company said the second half has begun well, with a robust order book and European programme activity supporting expectations for results in line with management forecasts for the full year.
At 1042 BST, 1Spatial shares were down 3.35% at 52.67p.
Reporting by Josh White for Sharecast.com.