IQGeo Group plc(the "Company" or the "Group")Interim results for the six months ended 30 June 2019
Significant progress against strategic priorities
IQGeo Group plc (AIM: IQG), a market leading provider of geospatial productivity and collaboration software for thetelecommunications and utilities industries, is pleased to announce its interim results for the six months ended 30 June
2019.
IQGeo (myWorld) operational highlights:
Five new logos signed in the first half including a major North American telecoms operator and our first
customers in Europe. A further three logos signed in the second half so far.

Investment in sales resource delivering client wins across main regions and improved pipelineIncreased sales momentum from the subscription model following successful introduction at the start of theyearInvestment in product innovation resonating with both new and existing customers with newly launched
products; Network Revenue Optimizer, Construction Manager and Operations Manager all generated sales
Group financial highlights:
Bookings of orders related to myWorld increased by over 100% to £2.5 million during H1 2019
Total revenue generated from myWorld products increased to 65% (H1 2018: 45%)
Net cash balance of £26.0 million at 30 June 2019 (31 Dec 2018: £30.9 million) following payment of costs
associated with RTLS SmartSpace business disposal but prior to shareholder return of £11.0 million via a
Tender Offer completed in SeptemberPro-forma net cash balance (taking account of the Tender Offer and costs) of £15.0m as at 30 June 2019
Outlook:End market conditions remain favourable as customers focus on digital transformationAnnual Recurring Revenues including subscription and M&S is currently £1.6m.
Expect continued strategic progress in the second half: strong growth in myWorld orders, continued pipeline
expansion and good growth in subscription ordersCash outflow in H2 will be similar to H1. Operating cashflow in 2020 and beyond is expected to significantly
improve as continued sales momentum builds on our base of existing subscription revenues
Richard Petti, Chief Executive Officer, said:“I’m very pleased to report on a first half where we have made significant progress. Our investment in product innovationand sales resource have delivered a more than doubling in bookings for our core myWorld software while we have added
five new client logos. These include a top 10 North American telecoms operator and the first new European client fromour regional sales office.
Whilst we transition towards a subscription model, we recognise that some customers prefer perpetual licence and arealso mindful of the impact that this transition has on our cash flows. We therefore expect to continue blending perpetual
licences wins with subscription deals. Our subscription offering is particularly attractive to mid and small sized operators
where we are seeing high levels of traction. At the same time the enterprise-grade quality of the software is also driving
interest from large scale utilities and telecommunication providers.
We now have 7 customers signed up on a subscription basis generating an Annual Recurring Revenues of £0.4m froma standing start at the beginning of the year
The favourable market conditions reported in the 2018 annual accounts are continuing, driven by the digitaltransformation of our target markets. Combined with our unique and differentiated product set and refreshed sales
infrastructure this is driving an improved pipeline and provides confidence in the business’ opportunity and prospects forthe future.”

Page 1 of 18

For further information contact:
IQGeo Group plc
Richard Petti
Tim Gingell+44 1223 606655

finnCap Ltd
Henrik Persson, Anthony Adams (Corporate Finance)
Tim Redfern, Richard Chambers (ECM)+44 20 7220 0500

Tulchan Communications LLPJames Macey White, Matt Low, Deborah Roney+44 20 7353 4200

Notes to Editors
About IQGeo
IQGeo™ (AIM: IQG) a leading developer of geospatial software for the telecommunications and utility industries,
accelerating productivity and collaboration across enterprise planning, design, construction and maintenance processes.
Our reality-centric solutions create and maintain a real-time, accurate view of complex network assets, dramatically
improving data quality and currency. IQGeo’s open, mobile-first architecture streamlines operational processes using
any device, in the office or in the field, enabling greater business collaboration. We help network operators meet theirdigital transformation ambitions, saving time and money, while improving safety and enhancing customer satisfaction.
Headquartered in Cambridge, with offices in Denver, Frankfurt and Tokyo, we work with some of the largest network
infrastructure operators in the world. For more information visit: https://www.iqgeo.com/

Page 2 of 18

Chief Executive Officer’s statement
Overview
Our first six months of trading as IQGeo saw bookings for our core myWorld products increase by more than 100% to£2.5 million. Five new logos were signed, and we expanded our penetration with existing customers through the sale of
new products. Having only introduced the subscription model at the start of the year we have seen good progress inaccelerating this type of business whilst recognising that some customers continue to prefer perpetual licence deals.
Having signed up another three subscription deals since 30 June, we now have 7 customers signed up on a subscription
basis that will generate Annual Recurring Revenues of £0.4m.
Pipeline generation for telecommunications and utility industries continues to develop in all our three geographies: North
America, Europe and Japan.
Strategy
IQGeo is a rapidly growing, global software business that accelerates productivity and collaboration for our
telecommunications and utilities customers. I am pleased to say that in the first half of 2019 we have made tangible steps
in our strategy across all areas of our business.
1.

Regional Growth
While our traditional strength in North America continues with new signings in the USA and Canada, we havealso signed our first new customers in Europe thanks to our investment in a new European sales office.

2.

Transition to Subscription
We are making good progress in our transition to a software subscription licensing model whilst at the sametime managing the impact this transition has on our cashflow by continuing to offer perpetual licence deals
where appropriate. The subscription model enables customers to reduce the upfront investment and build up
licence numbers based on demand and usage. For IQGeo it creates long term relationships that will naturally
expand with further usage and provides an effective platform to cross-sell additional solutions while generating
ongoing revenues. We see this approach being particularly successful among the ‘Tier Two’ operators in ourmarkets (mid and small size operators) which has become an increasing focus for our sales and marketing
activity.

3.

Product Innovation
Our continued investment in product development is also beginning to deliver results off the back of the products
launched in H1 2019. We have closed business for our new Network Revenue Optimizer, Construction
Manager, and Operations Manager. These new products combined with our existing mobile-first myWorld
platform and the impending launch of Network Manager, our next generation geospatial solution, are creatinga very competitive and comprehensive product line.

Business development
Following the disposal of the RTLS SmartSpace business in 2018, we invested in additional development, sales andsupport infrastructure to best position IQGeo to capture the market opportunity. This included the recruitment ofexperienced quota-carrying personnel and software developers.
The business has also changed the way it priced and sold myWorld to encourage more long-term subscriptions andrecurring revenue in line with our strategy. We transitioned our pricing schemes to a usage-based model which provide
our customers better price points to start using myWorld and better aligns value with increased usage as system
integration and user adoption grows.
Our sales activity is led by progress in the North American market having secured several high-profile customers fromentrenched competitors and have built a healthy pipeline in both the telecoms and utility markets.
In North America we have successfully signed new business contracts with large regional utilities as well as a significant
top 10 telecoms operator with over 18.6 million subscribers for a solution that will be used by both its fixed and wirelessbusiness lines.

Page 3 of 18

Chief Executive Officer’s statement continued
In Europe our newly-formed sales team closed their first contracts in the telecoms space, establishing critically importantreference customers that will help to accelerate future pipeline growth. Sales in Japan remain satisfactory as we workwith our reseller partners to target strategic utility operators.
Product innovation
IQGeo’s product strategy is well differentiated from that of its competitors and is resonating with both existing customers
and new opportunities. Unlike other vendors, our solution sits across the entire network lifecycle (from design, toconstruction, to operationalization and support) and offers an ‘office to field’ solution that replaces multiple disconnected
systems.
This approach is proving popular with medium and smaller sized operators who do not have the IT resources or budget
to buy and integrate several systems for managing their network. Larger operators also see opportunities for savingsand efficiency by targeting systems sitting alongside their GIS (such as construction management) and activating thisfunctionality within myWorld.
Board changes
There were two significant changes to the IQGeo Board of Directors in the first half of 2019. Paul Taylor was confirmedin the role of Non-Executive Chairman and Andy MacLeod has joined the Board as a new Independent Non-Executive
Director. A telecommunications expert with an extensive industry pedigree, Andy brings a rich depth of experience in IT
technology and operations for fixed line and wireless communications.
Capital reduction and Tender offer
Following the court approved Capital Reduction in July 2019, the Company returned £11.0 million of its cash balance,
following the Ubisense sale, to Shareholders in September 2019 pursuant to the published Tender Offer. In establishingthe quantum of the Tender Offer, the Board considered the controlled investment strategy required to support theCompany's growth ambitions as well as the working capital needs of the business going forward.
Current trading and outlook
The sales momentum generated in the first half has continued into the second. We have already closed an additional
three new logos and are continuing to build our annual recurring subscription revenue base which now stands at £0.4m.
Overall for 2019 we expect myWorld orders to grow strongly, offsetting the planned step away from third party business.
The second half is expected to see continued improvement in the pipeline and good growth in subscription orders
delivering a modest improvement in myWorld revenue over 2018 and a similar level of operating cash outflow to the firsthalf of 2019. As we move into 2020, operating cashflow is expected to improve significantly, as continued sales
momentum builds on our base of subscription revenues.
Richard Petti
Chief Executive Officer

Page 4 of 18

Chief Financial Officer’s statement
The Group is focused on growing own product myWorld revenues which include generating recurring revenues from both
software subscription products, selling perpetual software licences and maintenance and support contracts, anddelivering consultancy services revenues. Additionally, the Group has a legacy operation that provides lower margin
consultancy services connected to third party products which have declined in the current period in line with expectations
and may decline in future periods.
OrdersBookings of orders related to myWorld increased by over 100% to £2.5 million during H1 2019 (H1 2018: £1.2 million)
following investment in sales capability across the organisation. As at 30 September 2019, seven new subscription
customers across all geographies with Annual Recurring Revenue (ARR) of £0.4m have been signed.
Bookings of orders related to third-party Geospatial Services were minimal (H1: 2018: £3.0m) but a £1m+ order has been
received after the period end from an existing customer for additional consultancy services for 2021.
myWorld order backlog as at 30 June 2019 was £1.7 million (H1 2018: £1.5 million). Third-party Geospatial Services
order backlog was £0.9 million (H1: 2018: £2.6m).
Revenue
Revenue composition by revenue stream is summarised in the table below:
Geospatial revenue
SoftwareH1 2019£’000
737% of total
revenue20%

H1 2018£’000
682% of total
revenue
12%

Year onyear growth8%

Maintenance and support

589

16%

411

7%

43%

Services

1,027

28%

1,456

26%

(29)%

Total revenue generated from myWorld products

2,353

65%

2,549

45%

(8)%

Geospatial services from third party products

1,292

35%

3,150

55%

(59)%

Total revenue

3,645

100%

5,699

100%

(36)%

The commercial model is evolving with a strong focus on building a subscription-based software business and long-term
relationships with customers. This approach enables more customers to start with smaller deployments which can thenbe grown over time. Ultimately this approach will provide greater stability to income and operations in future periods but
will have the impact of deferring revenue recognition in the short term. In the first half of 2019 revenue from perpetualsoftware licences grew by 8% with minimal subscription revenues being recognised in the period. Recurring maintenanceand support revenues continued to grow to over £0.5m registering 43% growth over the same period in 2018.
Gross profit
Geospatial gross profit
Gross profit/gross profit margin

H1 2019
£’000
1,226

Gross
margin %34%

H1 2018
£’000
2,469

Gross
margin %43%

Grossmargin mvt(9%)

Gross margin percentage has decreased during 2019 by 9%. The change in approach to the subscription-based model
has resulted in a short-term decline of revenues generated from myWorld products. While the revenue mix has moved infavour of higher margin software and maintenance and support revenues, the significant reduction in services revenue
which has a fixed cost of delivery, has led to an overall decline in the gross margin during the first half of 2019. Increasesof recurring subscription and maintenance & support revenues, together with new staff completing their training andoffering better utilisation, are expected to drive an improvement to both gross profit and gross margin percentage in futurereporting periods.

Page 5 of 18

Chief Financial Officer’s statement continued
Operating expenses and adjusted EBITDA from continuing operations
Operating expenses were £4.4 million (H1 2018: £3.0 million) and are summarised as follows:
H1 2019

H1 2018

£’000

£’000

Other operating expenses

4,022

2,626

Depreciation

139

123

Amortisation and impairment

406

371

Share option expense

6

118

(151)

54

Unrealised foreign exchange on intercompany trading balances
Non-recurring items
Total operating expense

-

(247)

4,422

3,045

Other operating expenses of the Group include sales, product development, marketing and administration costs.
Sales costs have increased during H1 2019 as a result of headcount being added to develop sales channels in both theNorth American and European utilities and telecoms markets.
Product development and product marketing costs have increased as the Group focuses on creating the next generation
geospatial platform.
The H1 2018 other operating costs reported above include an allocation of the administration and marketing costs of theGroup which supported both the Geospatial and discontinued RTLS SmartSpace divisions during 2018. Accordingly, theH1 2018 other operating costs reported above do not reflect a realistic cost base to support the standalone IQGeo
business. H1 2019 other operating expenses are based on the IQGeo operating model which includes short-term serviced
office leases in Cambridge, Frankfurt and Tokyo together with a subscription-based IT environment which provides thecompany with a flexible cost base from which to develop with minimal capital expenditure other than product development.
Adjusted EBITDA from continuing operations excludes amortisation and impairment, depreciation, share option expense,
foreign exchange gains/losses on intercompany trading balances and non-recurring items and is reported as it reflects
the performance of the Group. Adjusted EBITDA for the period was a £2.8 million loss (H1 2018: £0.2 million).
The operating loss for the period from continuing operations was £3.2 million (H1 2018: £0.6 million).
EPS and dividends
Adjusted diluted loss per share from continuing operations was 4.6 pence (H1 2018: 0.9 pence). Reported basic anddiluted loss per share from continuing operations was 4.4 pence (H1 2018: 0.8 pence).
Consolidated statement of financial position and cash flow.
Cash as at 30 June 2019 was £26.0 million (31 December 2018: £30.9m, 30 June 2018: £5.8m).
The net cash outflows from operating activities were £3.6 million (H1 2018: £1.3 million).
Discontinued operations
On 31 December 2018 the Group received a net sum of £27.1 million cash consideration from the sale of the RTLS
SmartSpace business, after settlement of all outstanding debt of the Group, including the balance on the HSBC loan of£1.8 million.
During H1 2019, the Group received an additional £1.1 million cash consideration in respect of the sale as a result of the
finalisation of the completion accounts. This sum was greater than the £0.8 million asset recognised within the balance
sheet as at 31 December 2018, creating a £0.3 million gain on disposal during the H1 2019 period.
Additionally, during H1 2019, £1.8 million of costs associated with the disposal were paid.

Page 6 of 18

Chief Financial Officer’s statement continued
Repurchase of share capital
On 2 August 2019, the Company announced a proposed tender offer to repurchase up to a maximum of 28,260,869 of
the Company's Ordinary Shares at a price of 46 pence per Ordinary Share.
Following approval of the tender offer by a General Meeting of Shareholders on 22 August 2019, the tender offer
completed on 30 August 2019 resulting in the share capital reducing by 23,803,690 and £10,949,697 of surplus funds
being returned to shareholders in September 2019.
Following completion of the tender offer and as at 27 September 2019, the issued share capital was 49,498,429 ordinary
shares of £0.02 each
Kestrel Partners LLP, represented on the Board by Oliver Scott, is the Company's largest Shareholder, with an interestof 25.98% in the Company's issued share capital prior to the repurchase of shares, fully participated in the Tender Offer.
Following the completion of the Tender Offer Kestrel Partners LLP hold 23.58 % of the share capital.
Robert Sansom, a director of IQGeo, fully participated in the Tender Offer and following its completion now holds 7.74 %of the share capital.
Risks and uncertainties
The Board continuously assesses and monitors the key risks of the business. The key risks that could affect the Group’s
performance, and the factors which mitigate these risks, have not significantly changed from those set out on pages 26
to 29 of the Group’s Annual Report for 2018 (a copy of which is available from our website www.iqgeo.com).
Tim Gingell
Chief Financial Officer

Page 7 of 18

Consolidated income statement
for the six months ended 30 June 2019

Notes

Revenue4

6 months to
30 June 2019
unaudited£’000

6 months to
30 June 2018
unaudited£’000

12 months to
31 December 2018
audited
£’000

3,645

5,699

9,979

Cost of revenues(2,419)(3,230)(5,599)Gross profit

1,226

2,469

4,380

Operating expenses(4,422)(3,045)(5,971)

Operating loss

(3,196)(576)(1,591)Gross profit

1,226

2,469

4,380

Other operating expenses(4,022)(2,626)(5,446)

Adjusted EBITDA

Analysed as:(2,796)(157)(1,066)

Depreciation

(139)

(123)

(273)

Amortisation and impairment of other intangible assets

(406)

(371)

(774)

Share option expense

(6)

(118)

(248)

Unrealised foreign exchange gains/(losses) on intercompany
trading balances

151

(54)

151

-

247

619

(3,196)(576)(1,591)

Non-recurring items

6

Operating loss
Net finance income/(costs)
Loss before tax
Income tax
Loss from continuing operations
Profit/(loss) from discontinued operations
Profit/(loss) for the year

5

35

(8)

(13)

(3,161)(584)(1,604)

(32)

(12)

(39)

(3,193)(596)(1,643)329(2,196)21,485(2,864)(2,792)

19,842(4.4p)(0.8p)(2.2p)

Loss per share - continuing operations
Basic and diluted

Page 8 of 18

Consolidated statement of comprehensive income
for the six months ended 30 June 2019
6 months to
30 June 2019
unaudited£’000

6 months to
30 June 2018
unaudited£’000

12 months to
31 December 2018
audited£’000

Loss from continued operations
Profit/(loss) from discontinued operations(3,193)329(596)(2,196)(1,643)
21,485

Profit/(loss) for the year
Other comprehensive income:Items that may be reclassified subsequently to profit and loss
Exchange difference on retranslation of net assets and results ofoverseas subsidiaries from continuing operations
Reclassification to income statement for discontinued operations(2,864)(2,792)

19,842

(128)
-

17
-

(50)
216

Total comprehensive profit/(loss) for the year

(2,992)(2,775)20,008Page 9 of 18

Consolidated statement of changes in equity
for the six months ended 30 June 2019
Attributable to equity shareholders of the parent company

Balance at 1 January 2018

Sharecapital
£’000

Share
premium£’000

Share based
payment
reserve£’000

Translation
reserve£’000

Retainedearnings£’000

Sub-total£’000

Noncontrollinginterest
£’000

Total
£’000

1,462

46,3751,139(2,037)(35,260)

11,679434

12,113

Loss for the period
Exchange difference on retranslation of net assets andresults of overseas subsidiaries

-

-

-

-

(2,792)(2,792)-(2,792)

-

-

-

17

-

17

-

17

Total comprehensive loss for the period
Reserve credit for equity-settled share-based payment
Acquisition of non-controlling interest

-

-

159
-

17
-

(2,792)282(2,775)
159
282

(434)

(2,775)
159(152)

Transactions with owners

-

-

159

-

282

441

(434)

7

1,462

46,375

1,298(2,020)(37,770)

9,345

-

9,345

Profit for the period
Recycled translation reserve
Exchange difference on retranslation of net assets andresults of overseas subsidiaries

-

-

-

216

22,634-

22,634216-

22,634
216

-

-

-

(67)

-

(67)

-

(67)

Total comprehensive profit for the year
Lapse of share options
Reserve credit for equity-settled share-based payment

-

-

(725)
144

149
-

22,634725-

22,783
144-

22,783
144

Acquisition of non-controlling interest

-

-

-

-

-

-

-

-

Transactions with owners

-

-

(581)

-

725

144

-

144

Balance at 30 June 2018 (unaudited)

Balance at 31 December 2018

1,462

46,375717(1,871)(14,411)32,272-32,272

Loss for the period
Exchange difference on retranslation of net assets andresults of overseas subsidiaries

-

-

-

-

(2,864)(2,864)-(2,864)

-

-

-

(128)

-

(128)

-

(128)

Total comprehensive loss for the period
Issue of new share capital
Lapse of share options
Reserve debit for equity-settled share-based payment

4
-

26
-

(6)
(57)
(116)

(128)
-

(2,864)6
57-(2,992)
30
(116)

-

(2,992)30(116)

Transactions with owners

4

26

(179)

-

63

(86)

-

(86)

1,466

46,401538(1,999)(17,212)29,194-29,194

Balance at 30 June 2019 (unaudited)

Page 10 of 18

Consolidated statement of financial position
for the six months ended 30 June 2019At
30 June 2019
unaudited£’000

At
30 June 2018
unaudited£’000

At
31 December 2018
audited
£’000

1,329
107
191
2,000

2,812
645
2,512
-

1,235
84
304
2,000

Total non-current assets

3,627

5,969

3,623

Current assets
Inventories
Trade and other receivables
Cash and cash equivalents

2,857
26,035

1,742
7,602
5,788

3,586
30,915

Total current assets

28,892

15,13234,501

Total assets

32,51921,101

38,124

Liabilities
Current liabilities
Trade and other payables
Current tax liabilities
Lease obligation
Bank loans(2,709)
(184)
(196)
-

(6,578)
(817)
(750)

(5,080)
(232)
(232)
-

Total current liabilities(3,089)(8,145)(5,544)

(236)
-

(500)
(40)
(1,928)(1,000)
(143)

(231)
(77)
-

Notes

AssetsIntangible assets
Property, plant and equipment
Right of use assets
Investments

89Non-current liabilities
Deferred income tax liabilities
Trade and other payables
Lease obligation
Bank loans
Other payables
Total non-current liabilities(236)(3,611)(308)

Total liabilities(3,325)(11,756)(5,852)

Net assets
Equity attributable to owners of the parent company
Ordinary share capital
Share premium
Share based payment reserve
Translation reserve
Retained earnings

29,194

9,345

32,272

1,466
46,401538(1,999)(17,212)

1,462
46,375
1,298(2,020)(37,770)

1,462
46,375717(1,871)(14,411)

29,194

9,345

32,272Equity attributable to shareholders of the Company

1010Page 11 of 18

Consolidated statement of cash flows
for the six months ended 30 June 2019
6 months to
30 June 2019
unaudited£’000

6 months to
30 June 2018
unaudited£’000

12 months to
31 December 2018
audited£’000(3,161)-(584)(2,217)(1,604)(824)

Loss before tax from operating activities
Adjustments for:
Depreciation
Amortisation and impairment
Loss on the disposal of property, plant and equipment
Revaluation of intercompany balances
Share-based payment charge
Gain on sale of Japan business
Finance income
Finance costs(3,161)(2,801)(2,428)

139
406
(151)
6
(41)
6

605
1,003
54
159
(247)
(6)
90

1,081
2,025
14
(151)
303
(619)
(8)
156

Operating cash flows before working capital movement
Change in inventories
Change in receivables
Change in payables(2,796)
(107)
(612)

(1,143)(283)
2,785(2,571)

373
198
2,012
(2,071)

Cash generated from operations before tax(3,515)(1,212)

512

(77)

(107)

407

Net cash flows from operating activities(3,592)(1,319)919

Cash flows from investing activities
Purchases of property, plant and equipment
Expenditure on intangible assets
Cash received on sale of the RTLS SmartSpace business unit
Cash in RTLS SmartSpace business unit at disposal
Disposal costs in relation to the RTLS SmartSpace business unit
Sale of Japan Geospatial third party services business
Interest received

(50)
(493)
1,060
(1,766)
33

(247)
(880)
417
6

(316)
(1,844)28,882(2,313)
(704)
569
8

Net cash flows from investing activities(1,216)(704)

24,282

(117)
30

(750)
(59)
(273)
(152)
-

(2,500)
(73)
(743)
(152)
-

Notes

Operating activities
Loss before tax from continuing operations
Loss before tax from discontinued operations

Net income taxes received/(paid)

Cash flows from financing activities
Repayment of borrowings
Interest paid
Payment of lease liability
Purchase of non-controlling interest
Proceeds from the issue of ordinary share capital
Net cash flows from financing activities(87)(1,234)(3,468)Net increase in cash and cash equivalents
Cash and cash equivalents at start of period
Exchange differences on cash and cash equivalents(4,895)30,91515(3,257)
9,114(69)

21,733
9,114
68

Cash and cash equivalents at end of period

26,035

5,788

30,915

Page 12 of 18

Notes to the interim consolidated financial statements
1 General information
IQGeo Group plc (“the Company”) and its subsidiaries (together, “the Group”) delivers software solutions that integrate
data from any source – geographic, real-time asset, GPS, location, corporate and external cloud-based sources – into alive geospatial common operating picture, empowering all users in the customer’s organisation to access, input andanalyse operational intelligence to proactively manage their networks, respond quickly to emergency events andeffectively manage day-to-day operations.
The Group has its main operations in the UK, USA, Canada, Germany and Japan and sells its products and services
mainly in North America, Japan and Europe.
The Company is a public limited company which is listed on the Alternative Investment Market (“AIM”) of the London
Stock Exchange (IQG) and is incorporated and domiciled in the United Kingdom. The address of its registered office is
CB1 Business Centre, 20 Station Road, Cambridge CB1 2JD.
On 31 December 2018 the Group sold its RTLS SmartSpace business unit (presented as discontinued operations within
the consolidated income statement). On 2 January 2019, the Company was renamed IQGeo Group plc (formerly
Ubisense Group plc).
The condensed consolidated interim financial statements were approved by the Board of Directors for issue on 27
September 2019.
The condensed consolidated interim financial statements do not comprise statutory accounts within the meaning ofsection 434 of the Companies Act 2006. Statutory accounts for the year ended 31 December 2018 were approved by the
Board of Directors on 10 April 2019 and delivered to the Registrar of Companies. The report of the auditors on thoseaccounts was unqualified, did not contain a material uncertainty related to going concern paragraph and did not containany statement under section 498 of the Companies Act 2006.
The condensed consolidated interim financial statements have been reviewed, not audited.
2 Basis of preparation
The condensed consolidated interim financial statements should be read in conjunction with the annual financial
statements of the Group and are prepared in accordance with IFRSs as adopted by the European Union.
Going concern basis
The Group’s forecasts and projections, taking account of reasonably possible changes in trading performance, support
the conclusion that there is a reasonable expectation that the Company and the Group have adequate resources tocontinue in operational existence for the foreseeable future, a period of not less than twelve months from the date of thisreport. The Group therefore continues to adopt the going concern basis in preparing its condensed consolidated interim
financial statements.
For the purposes of the preparation of the consolidated financial statements, the Group has applied all standards andinterpretations as adopted in the European Union that are effective and applicable for accounting periods beginning on
or before 1 January 2019. There are no standards in issue and not yet adopted that will have a material impact on thefinancial statements.
3 Accounting policies
The accounting policies adopted in the preparation of the condensed consolidated interim financial statements areunchanged from those set out in the Group’s consolidated financial statements for the year ended 31 December 2018.
4 Segmental information
4.1 Operating segments
Management provides information reported to the Chief Operating Decision Maker (CODM) for the purpose of assessing
performance and allocating resources. The CODM is the Chief Executive Officer.
The continuing Geospatial operations are reported to the CODM as a single business unit.
The performance of the discontinued RTLS SmartSpace business unit is disclosed within note 5.

Page 13 of 18

Notes to the interim consolidated financial statements continued
4.2 Revenue by type of the continuing Geospatial operations
The following table presents the different revenue streams of the Geospatial business unit:

6 months to
30 June 2019
unaudited£’000

6 months to
30 June 2018
unaudited£’000

12 months to
31 December 2018
audited£’000

Software
Maintenance and support
Services

737
589
1,027

682
411
1,456

1,395
918
2,424

Total revenue generated from myWorld products
Geospatial services from third party products

2,353
1,292

2,549
3,150

4,737
5,242

Total revenue

3,645

5,699

9,979

4.3 Geographical areas of continuing operations
The Board and Management Team also review the revenues on a geographical basis, based around the regions where
the Group has its significant subsidiaries or markets.
The Group’s revenue from external customers in the Group’s domicile, the UK, and its major worldwide markets havebeen identified on the basis of the customers’ geographical location and is presented below:

UK
Germany
Europe otherUSA
CanadaJapan
Rest of World

6 months to
30 June 2019
unaudited£’000

6 months to
30 June 2018
unaudited£’000

12 months to
31 December 2018
audited
£’000

17
73
2,711
685
149
10

14
2
3,552
916
1,203
12

14
3
7,041
1,596
1,302
23

3,645

5,699

9,979

5 Discontinued operations
On 31 December 2018 the Group disposed of its RTLS SmartSpace business unit for a consideration of up to £35.0
million with £30.0 million paid in cash on completion (subject to adjustments for net debt and net working capital) in
addition to a £2.0 million roll over investment and further £3.0 million earn-out consideration.
The disposal of the RTLS SmartSpace business followed reorganisation involving the creation of new legal entities within
the UK, USA, Canada, Germany and Japan regions. The Group completed a reorganisation whereby the trade and assetsof the RTLS SmartSpace and Geospatial business units were separated into different legal entities in each country. The
restructured RTLS SmartSpace group of legal entities, headed by Ubisense Limited, was disposed of on 31 December
2018. Central functions such as finance and IT were allocated between the RTLS SmartSpace and Geospatial legal
entities so that both divisions could continue trading post disposal. This was supported through a transition services
agreement between IQGeo and the discontinued business.
The earn-out consideration of £3.0 million is subject to the RTLS SmartSpace business unit meeting the following
milestones;£1.5 million is payable if revenue achieved for the year ended 31 December 2018 is £16.4 million. This milestone
was not met.
£1.5 million is payable if revenue achieved for the year ended 31 December 2019 is £22.0 million.

Page 14 of 18

Notes to the interim consolidated financial statements continued

If the first milestone is not met, the full £3.0 million will be paid if the revenue for the 2019 period meets the2019 target plus the shortfall of the target of the 2018 period. Accordingly, the full £3.0 million earn-out would
be achieved if the 2019 revenue for the RTLS SmartSpace business exceeds £22.9 million.

While the achievement of an additional £3.0 million earn-out cash consideration remains possible, no contingent asset
has been recognised within statement of financial position as at 31 December 2018 or 30 June 2019. Management
believe that this is appropriate as achievement of the milestones is dependent on the new management team’s strategy
and performance, over which IQGeo have no influence as a non-controlling shareholder.
The following information is attributable to the RTLS SmartSpace business unit;
Income statement for Discontinued operations
6 months to
30 June 2019
unaudited£’000

6 months to
30 June 2018
unaudited£’000

12 months to
31 December 2018
audited£’000

Revenue
Cost of revenues

-

4,630
(2,869)15,519(7,402)Gross profit
Operating expenses

-

1,761
(3,902)

8,117(8,804)

Operating loss-

(2,141)(687)

Analysed as:
Gross profit
Other operating expenses

-

1,761
(2,747)

8,117(6,204)

Adjusted EBITDA
Depreciation
Amortisation and impairment of other intangible assets
Share option expense
Reorganisation costs

-

(986)
(482)
(632)
(41)
-

1,913
(808)
(1,251)(55)(486)

Operating loss-

(2,141)(687)

Net finance costs

-

(76)

(137)

Loss before tax
Income tax-(2,217)
21

(824)
(57)

Loss from discontinued operations prior to gain on disposal-(2,196)(881)

Gain on disposal of the RTLS SmartSpace business unit

329-

22,366

Profit/(loss) from discontinued operations329(2,196)21,485

6 Non-recurring items
The following item is associated with the sale on 30 March 2018 of the Group’s Japan third party geospatial services
business including the Geoplan brand name for a gross consideration of JPY 100 million (£0.7 million). This has beencredited to the income statement in arriving at a gain before tax.
Alongside this transaction, the 23% non-controlling interest of Geoplan Company Limited was acquired. The acquisitionof this non-controlling interest gave the Group 100% ownership of its remaining Japanese operations.
6 months to
30 June 2019
unaudited£’000

6 months to
30 June 2018
unaudited£’000

12 months to
31 December 2018
audited£’000

Sale of Japan Geospatial third party services business

-

247

619

Total non-recurring items

-

247

619

The sale of the Japan Geospatial third-party services business has not been presented as a discontinued operation
because these Geospatial services will be provided to customers based in other regions of the Group’s continuing
operations. Additionally, the Japan Geospatial operations will continue, albeit solely focused on selling IQGeo products
and related services. The sold Geospatial business did not represent a significant part of the global business.

Page 15 of 18

Notes to the interim consolidated financial statements continued
7 Earnings per share (EPS)
6 months to
30 June 2019
unaudited£’000

6 months to
30 June 2018
unaudited£’000

12 months to
31 December 2018
audited£’000(3,193)329(2,864)(596)(2,196)(2,792)(1,643)
21,485
19,84273,26073,08873,088

72

230

257

73,33273,31873,345

Continuing operations EPS
Basic and diluted EPS (pence)

(4.4)

(0.8)

(2.2)

Discontinued operations EPS
Basic and diluted EPS (pence)

0.4

(3.0)

29.4

Continuing and discontinued operations EPS
Basic and diluted EPS (pence)

(3.9)

(3.8)

27.1

Earnings attributable to Ordinary Shareholders
Loss from continuing operations
Gain /(loss) from discontinued operations
Gain /(loss) from continuing and discontinued operations
Number of shares
Weighted average number of ordinary shares for the purposes ofbasic EPS (’000)
Effect of dilutive potential ordinary shares:– Share options (’000)
Weighted average number of ordinary shares for the purposes ofdiluted EPS (’000)

Basic earnings per share is calculated by dividing profit/(loss) for the period attributable to ordinary shareholders of theCompany by the weighted average number of ordinary shares outstanding during the period. For diluted earnings per
share, the weighted average number of shares is adjusted to allow for the effects of all dilutive share options and warrants
outstanding at the end of the year. Options have no dilutive effect in loss-making years and are therefore not classified
as dilutive for Discontinued and Total EPS since their conversion to ordinary shares does not decrease earnings per
share or increase loss per share from continuing operations.
The Group also presents an adjusted diluted earnings per share figure which excludes share-based payments charge,
unrealised foreign exchange gains/(losses) on intercompany trading balances and non-recurring items from themeasurement of profit for the period.

Continuing operations
Continued earnings for the purposes of diluted EPS being net loss
attributable to equity holders of the parent company (£’000)
Adjustments:
Reversal of share-based payments charge (£’000)
Unrealised foreign exchange gains/(losses) on intercompany tradingbalances
Reversal of non-recurring items (£’000)

6 months to
30 June 2019
unaudited£’000

6 months to
30 June 2018
unaudited£’000

12 months to
31 December 2018
audited£’000(3,193)(596)(1,643)

6

118

248

(151)
-

54
(247)

(151)
(619)

Net adjustments (£’000)

(145)

(75)

(522)

Adjusted earnings (£’000)(3,338)(671)(2,165)

(4.6)

(0.9)

(3.0)

Adjusted diluted EPS from continuing operations (pence)

The adjusted EPS information is considered to provide a fairer representation of the Group’s trading performance.
Options have no dilutive effect in loss-making years.

Page 16 of 18

Notes to the interim consolidated financial statements continued
8 Intangible assets
At 30 June 2019
unaudited£’000

At 30 June 2018
unaudited£’000

At 31 December 2018
audited£’000

Capitalised product development costs
Software

1,244
85

2,628
184

1,213
22

Total intangible assets

1,329

2,812

1,235

Net book amount

9 Investments
At 30 June 2019, the Group holds a rollover investment in Abyssinian Topco Limited as part of the consideration for thesale of the RTLS SmartSpace business unit. Abyssinian Topco Limited is a UK registered company (company number
11649721) and is the parent company of Ubisense Limited which along with its subsidiary companies, comprise theformer RTLS SmartSpace business unit.
At 30 June 2019
unaudited£’000

At 30 June 2018
unaudited£’000

At 31 December 2018
audited
£’000

2,000

-

2,000

Investment in Abyssinian Topco Limited

10 Share capital and premium

Balance at 30 June 2018 and at 31 December 2018
Issued under share-based payment plans
Balance at 30 June 2019

Number ofordinary sharesof £0.02 each

Share capital£’000

Share premium
£’000

Total
£’000

73,087,904

1,462

46,37547,837214,2154

26

30

73,302,119

1,466

46,40147,867The Company has one class of ordinary shares which carry no right to fixed income.

11 Share options
On 14 December 2016 IQGeo Group plc implemented a new long-term incentive share option plan for Executive
Directors and key management. IQGeo Group plc granted 5,600,000 options of two pence each in the Company with an
exercise price set at the nominal value. The options vest if the Company’s share price exceeds 70p for 60 consecutive
calendar days between the 2nd and 3rd anniversary of issue and the period of employment continues for over three
years.
On 24 May 2018, 350,000 share options were issued at market value.
At 30 June 2019, the Group had the following share-based payment arrangements.

Arrangement

Options

Award
date
Year

Vests
Years

ExpiresYear

Exercise
price£Awardsoutstanding at
1 Jan 2019
NumberGrantedduringthe year
NumberExercisedduring theyear
NumberForfeited
during theyear
NumberAwardsoutstanding at
30 June 2019
NumberAwardsexercisable at
30 June 2019
Number2010

2011 – 13

2020

0.140

320,172-

214,215

6,000

99,957

99,95720112012 – 14

2021

1.050

100,200--

71,50028,70028,70020122013 – 15

2022

2.125

70,500--42,50028,00028,00020132014 – 16

2023

2.055

77,850--45,10032,75032,75020142015 – 17

2024

2.250

45,000--30,00015,00015,00020162017 – 19

2026

0.020

5,250,000-- 1,900,000

3,350,000-

20182019 - 21

2028

0.555

350,000---

350,000-

6,213,722-

214,215 2,095,100

3,904,407

204,207

0.138

-

0.119

1.001

Total
Weighted average exercise price (£)

0.14

0.174

Page 17 of 18

Independent review report to IQGeo Group plc
Introduction
We have reviewed the condensed set of financial statements in the half-yearly financial report of IQGeo Group plc (the‘company’) for the six months ended 30 June 2019 which comprises consolidated income statement, consolidated
statement of comprehensive income, consolidated statement of changes in equity, consolidated statement of financial
position, consolidated statement of cash flows and the related explanatory notes. We have read the other information
contained in the half yearly financial report and considered whether it contains any apparent misstatements or materialinconsistencies with the information in the condensed set of financial statements.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved by, the directors. The AIM rules of the
London Stock exchange required that the accounting policies and presentation applied to the financial information in
the half-yearly financial report are consistent with those which will be adopted in the annual accounts having regard to
the accounting standards applicable for such accounts.
As disclosed in note 2, the annual financial statements of the group are prepared in accordance with International
Financial Reporting Standards as adopted by the European Union. The condensed set of financial statements includedin this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, 'Interim
Financial Reporting', as adopted by the European Union.
Our responsibility
Our responsibility is to express a conclusion to the company on the condensed set of financial statements in the halfyearly financial report based on our review.
Scope of review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410,'Review of Interim Financial Information Performed by the Independent Auditor of the Entity'. A review of interim
financial information consists of making enquiries, primarily of persons responsible for financial and accounting
matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing (UK) and consequently does not enable us to obtainassurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we
do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial
statements in the half-yearly financial report for the six months ended 30 June 2019 is not prepared, in all material
respects, in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by theEuropean Union.
Use of our report
This report is made solely to the company, as a body, in accordance with International Standard on Review
Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information performed by the Independent Auditor of
the Entity'. Our review work has been undertaken so that we might state to the company those matters we are required
to state to them in an independent review report and for no other purpose. To the fullest extent permitted by law, we do
not accept or assume responsibility to anyone other than the company as a body, for our review work, for this report, orfor the conclusion we have formed.

Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
Cambridge
27 September 2019

Page 18 of 18