Shares in 1Spatial (AIM:SPA) dropped 12% on Wednesday after the company warned that slower procurement and decision-making, particularly in the UK, would weigh on growth in the current financial year.
The caution came despite a solid set of full-year results, with software revenues up 35% to £11.5 million and recurring revenue rising to 62% of the total. Annualised recurring revenue also grew 14% to £19.7 million, reflecting continued demand for the company’s geospatial data software.
However, investors focused on the outlook, where management flagged that delays seen in the second half of last year were expected to persist.
Focusing on the positives, 1Spatial added that strong technology, expanding market presence, and a growing pipeline of contracts left it well placed to deliver longer-term growth.
It said a third major deal for its high-margin 1Streetworks product had now been secured and that further gains in SaaS revenues and recurring income were expected in 2026.
The shares were changing hands for 44.88p.