REG - 1Spatial Plc - Final Results
24/04/2024 07:00
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RNS Number : 7739L 1Spatial Plc 24 April 2024
This announcement contains inside information for the purposes of article 7 of
the Market Abuse Regulation (EU) 596/2014 as it forms part of domestic law by
virtue of the European Union (Withdrawal) Act 2018.
24 April 2024
1Spatial plc
("1Spatial", the "Group" or the "Company")
Final results for the year ended 31 January 2024
1Spatial, (AIM: SPA), a global leader in Location Master Data Management
('LMDM') software and solutions, is pleased to announce audited final results
for the year ended 31 January 2024.
· Group revenue increased 8% to £32.3 million, resulting in an annual increase
of 15% in gross profit.
· Recurring revenue accounts for 56% of total revenues (FY 2023: 49%) driven by
year-on year term licence revenue growth of 60%
· We launched our SaaS businesses in the period with £0.2 million of revenue
generated from initial trials
· Annualised recurring revenue ('ARR') increased by 9% to £17.2 million
· Operating profit grew to approximately £1.4 million (FY 2023: £1.3 million)
despite the increases in inflationary costs
Financial highlights
31 January 31 January Change
2024 2023
£m £m %
Group revenue 32.3 30.0 8
Recurring revenue 18.1 14.8 22
Term licences revenue 8.3 5.2 60
SaaS solutions revenue 0.2 - 100
Group total ARR* 17.2 15.8 9
Term licences ARR 7.7 5.6 38
Group gross profit 17.9 15.5 15
Adjusted EBITDA** 5.5 5.0 10
Adjusted EBITDA margin (%) 17.0 16.7 0.3
Operating profit 1.4 1.3 8
Profit before tax 1.1 1.0 10
Earnings per share - basic (p) 1.1 1.0 10
Earnings per share - diluted (p) 1.0 0.9 11
Net cash*** 1.1 3.1 (65)
* Annualised recurring revenue ('ARR') is the annualised value at the year-end
of committed recurring contracts for term licences and support and
maintenance.
** Adjusted EBITDA is a company-specific measure which is calculated as
operating profit/(loss) before depreciation (including right of use asset
depreciation), amortisation and impairment of intangible assets, share-based
payment charge and strategic, integration, and other non-recurring items.
*** Net cash is gross cash less bank borrowings.
Operational highlights
· Our Enterprise business secured multi-year contracts across all of our key
geographies, demonstrating the quality of our products and the strength of our
customer relationships.
o The UK increased its footprint across the utilities sector, secured multi-year
contract renewals with key customers and developed the collaboration with UK
government agencies and strategic partners
o The US continues to represent a significant opportunity for the Group. We now
partner with 18 US states, following the addition of the State of Oregon in
the year, and continue to develop expansion opportunities with existing
customers
o Europe has completed its transition from declining legacy software, winning
considerable contracts at the end of the year, positioning the region for
growth in FY 2025
· Continued R&D investment in innovative solutions - launching two
high-margin SaaS solutions, NG-9-1-1 and 1Streetworks, both targeting sizeable
niche markets
· 1Streetworks contract secured in February 2024 with UK Power Networks, with
the opportunity to expand
· Five NG-9-1-1 SaaS contracts secured
Outlook
· There has been a solid start to trading in the current financial year with a
growing sales pipeline and two significant framework agreements secured, with
the State of Texas and UK Cabinet Office
· Anticipate growing contribution in FY 2025 and beyond from 1Streetworks and
NG-9-1-1 SaaS sales, which represent a significant avenue for margin growth
and cash generation
· Measured additional investment in FY 2025 in US Enterprise and 1Streetworks
sales teams, where we see considerable opportunity, based on our proven
offerings and established customer relationships
· While cognisant of inflationary cost pressures, the Board remains confident in
delivering further progress in FY 2025 with a further growth step up in FY
2026 as the Company benefits from the current ongoing investment
Commenting on the update, 1Spatial CEO, Claire Milverton, said:
"The Group's financial performance this Year demonstrates the successful
progress we are making towards transitioning to a high margin, recurring
software licence business. Our strategic investments in product development
across both the Enterprise and SaaS divisions are yielding positive results
and unlocking new markets, providing excitement for the future. We will
continue to invest in our US Enterprise and 1Streetworks sales teams to
capture what we believe to be a considerable long-term growth opportunity.
We have had a solid start to trading in the new financial year. With a growing
sales pipeline and increased levels of recurring revenue, the Board is
confident in delivering further progress in FY 2025."
For further information, please contact:
1Spatial plc 01223 420 414
Claire Milverton / Stuart Ritchie
Liberum (Nomad and Broker) 020 3100 2000
Max Jones / Edward Mansfield / Anake Singh
Alma Strategic 020 3405 0205
Caroline Forde / Hannah Campbell 1spatial@almastrategic.co.uk
1Spatial plc's LEI Number is: 213800VG7OZYQES6PN67
About 1Spatial plc
1Spatial plc is a global leader in providing Location Master Data Management
('LMDM') software and solutions, primarily to the Government, Utilities and
Transport sectors. Our global clients include national mapping and land
management agencies, utility companies, transportation organisations,
government and defence departments.
Today - as location data from smartphones, the Internet of Things and great
lakes of commercial Big Data increasingly drive commercial decision-making -
our technology drives efficiency and provides organisations with confidence in
the data they use.
We unlock the value of location data by bringing together our people,
innovative solutions, industry knowledge and our extensive customer base. We
are striving to make the world more sustainable, safer and smarter for the
future. We believe the answers to achieving these goals are held in data. Our
1Spatial Location Master Data Management (LMDM) platform incorporating our
1Integrate rules engine delivers powerful data solutions and focused business
applications on-premise, on-mobile and in the cloud. This ensures data is
current, complete, and consistent through the use of automated processes and
always based on the highest quality information available.
1Spatial plc is AIM-listed, headquartered in Cambridge, UK, with operations in
the UK, Ireland, USA, France, Belgium, Tunisia and Australia.
For more information visit www.1spatial.com
Chairman's Statement
1Spatial has maintained its growth trajectory in FY 2024, successfully
continuing its transition to a business that has productised its valuable IP
and data expertise into scalable software solutions, including SaaS and
recurring revenues.
Our Enterprise business, which supports some of the world's largest
organisations and government led initiatives in their major digital
transformation initiatives, secured multi-year contracts in the year across
all of our key geographies, clearly demonstrating the quality of our products
and the strength of our customer relationships.
Through leveraging the revenue generated from the success of the Enterprise
business, the Group has developed a scalable cloud platform and launched two
high-margin SaaS solutions, NG-9-1-1 and 1Streetworks, both targeting sizeable
niche markets, which has set the business up for accelerated future growth
over the medium term.
It is evident that the reorganisation of the Group that has taken place over
the last few years has now resulted in a business with the ability to grow
across all markets. The UK continues to win and deliver on significant
contracts for the UK government such as the National Underground Asset
Register ("NUAR"). The US continues to represent a significant opportunity for
the Group, building on the successes to date with the likes of Google and
CalTrans, and we now have 18 US states as customers and a reinvigorated sales
team into which we will continue to invest in FY 2025. Europe has completed
its transition from declining legacy software and starting to move into
growth, and Australia has likewise delivered an increasing level of
proprietary software deals in the year.
The churn in our customer base is low, demonstrating the value our customers
place not only on our offerings but also the support they receive from our
knowledgeable team.
ESG and people
ESG is at the centre of 1Spatial's business; our products offer more
sustainable, safer and smarter solutions. We revised our ESG strategy in 2023
and undertook a detailed carbon assessment, results of which are included in
the ESG report. With the move back towards normal business travel, including
general commuting and customer and supplier meetings, there has been an
increase in carbon usage since last year, but we have a clear list of actions
to reduce this to Net Zero by 2050.
As we position ourselves to scale, it is crucial we have the right people in
place to execute our strategic priorities, and continuing to invest in our
sales and marketing team is a key focus for the year ahead.
Summary and outlook
FY 2024 represented the tipping point in the business with recurring revenues
now representing the majority of the business; alongside the successful
commercial launch of two new SaaS products which each represent substantial
opportunities. We have entered the new year with good momentum, as evidenced
by the execution of the UKPN 1Streetworks contract and further Enterprise
wins, and I am confident in our ability to deliver sustained growth and create
long-term value for our shareholders.
Andy Roberts
Non-Executive Chairman
CEO Review
1Spatial's FY 2024 performance is testament to the Group's dedication to
growth and innovation as we continue in our steady transition from a
predominantly services led business towards higher margin, recurring software
licences. Our strategic investments in product development and business
expansion have yielded positive results, delivering revenue growth of 8% to
£32.3m, with approximately 56% (FY2023: 49%) represented by recurring
revenue. Within recurring revenues, software term licence revenue has
increased by 60% to £8.3m (FY 2023: £5.2m) with double digit growth across
the UK, US and Australia.
Building upon the strong foundation of our Enterprise business, we
successfully introduced two high-margin SaaS solutions to the market in the
year, which are already unlocking new markets, and we remain committed to
developing our product portfolio to capture new opportunities and drive
sustained growth.
The growing demand for up-to-date trusted location data presents extensive
opportunities for 1Spatial. The global geospatial analytics market size is
projected to grow from $79 billion in 2023 to $207 billion by 2030, at a CAGR
of 14.7%. The significant growth of the market is mostly attributed to the
increasing use of advanced technologies, such as AI, expert systems, machine
learning and widespread adoption of 5G technology. All of these new advanced
technologies depend on one thing - trusted, accurate and up to date data and
that is what we enable at 1Spatial.
Our strategic positioning at the forefront of this transformation enables us
to capitalise on emerging growth areas, as demonstrated by the recent UKPN
1Streetworks contract and NG-9-1-1 initiatives in the US.
I am extremely proud of the team's performance in FY 2024 which is enabling
the successful transition to a business model centred around scalable software
solutions. Looking forward we have scoped the market opportunity, the route to
market and have the technology developed. Our focus is now on execution with
investment in the near term to drive sales and secure the substantial
opportunity ahead of us.
Successful launch and sales of SaaS solutions: 1Streetworks and NG-9-1-1
The expansion of the 1Spatial Cloud platform includes the launch of our
multi-tenancy SaaS based solutions - 1Streetworks (formerly Traffic Management
Plan Automation) and NG-9-1-1. These applications considerably increase our
addressable market and provide the potential for significant expansion of high
margin software revenue.
We believe the potential addressable markets for 1Streetworks and NG-9-1-1 are
£400 million and $350 million respectively.
SaaS revenues generated in FY 2024 amounted to £0.2 million from initial
trials with growth from both solutions anticipated in FY 2025 and beyond.
1Streetworks
1Streetworks automates the production of traffic management plans, diversion
routing and asset inventory lists in the UK, producing a comprehensive,
site-specific traffic management plan in just a few minutes. The solution is
highly scalable, with high gross margins and an already enthusiastic reception
from our target customers.
Currently, utility companies and contractors face the arduous task of
designing compliant traffic management plans to secure permits for road works,
navigating complex legal regulations outlined in the red book codes of
practice. Traditional processes leave room for human error, inviting potential
fines for non-compliance. 1Streetworks, powered by our patented rules engine
1Integrate, encodes the red book guidelines and is the first solution in the
market to fully automate the production of traffic management plans,
significantly shortening the time, effort and cost it takes to produce plans
that are both consistent and compliant.
With the utilities sector being a primary target vertical for this product, we
were delighted to report that, following successful completion of a trial, UK
Power Networks signed an initial 12-month contract to use our 1Streetworks
software to revolutionise streetworks planning, in January 2024. The contract
will deliver a minimum of £0.34m of SaaS revenue with the potential for
considerable expansion. UK Power Networks has 190,000km of cables and delivers
thousands of streetworks every year across London, the South-East and East of
England, to maintain safe and reliable power supplies to 19 million people.
We are now investing in the expansion of the 1Streetworks sales and marketing
teams which will have incremental cost implications in FY 2025, with the
benefits flowing through in FY 2026 and beyond. We have initiated a three-year
plan based around expanding our service further into Tier 1 contractors,
traffic management companies, local authorities and the transportation sector,
in addition to utilities.
We also currently have four ongoing trials, with an additional ten expected to
commence in the first half of the year. We anticipate that each 1Streetworks
deal could potentially secure Annual Recurring Revenue ('ARR') ranging from
£100k to £3 million depending on the sector and size of the end customer.
We have set ambitious revenue targets for 1Streetworks, including reaching
£40 million in annual recurring SaaS revenues in the next five years, with
the operational leverage of the platform delivering EBITDA margins far above
the Group average.
NG-9-1-1
Our Public Safety NG-9-1-1 solution combines a powerful rules engine and data
aggregator with a self-service cloud platform to support public safety
entities with their data readiness needs. The launch of our cloud platform
means we can now offer a "light version" of our NG-9-1-1 solution aimed at the
counties and cities within each US state, significantly increasing our
addressable opportunity. We secured five contract wins for this solution in
the year and have further trials underway. The adoption of the product
demonstrates the value offered to the customer and provides the Group with an
opportunity to scale up into a significant market opportunity.
In the second half of the year, following customer feedback, the team worked
on advancing our offering with an Esri integration, aimed at promoting the
product's use across the Esri user base. We are now exploring a go-to-market
strategy involving partner collaboration to complement our direct sales
approach and accelerate growth across the US. This will provide wider market
coverage of this key market.
With the potential addressable market of approximately $350 million ARR for
our NG-9-1-1 SaaS solution, our refined sales approach has been designed to
enable us to capitalise on this significant opportunity.
Innovation
As well as the launch of our first two SaaS solutions, we continue to
innovate, augmenting the capabilities of our existing offerings and developing
new products in response to needs of our customers. In H1 FY 2024, we
developed additional rules-based cleansing applications leveraging the power
of our 1Integrate rules engine to automate data ingestion for use on projects
such as the National Underground Asset Register.
We continue to focus on extending our cloud capability. Core components that
underpin our SaaS solutions and 1Integrate product have been enhanced to make
even the most complex data supply chains even easier to manage, notably:
· 1Integrate went through its next major release - v4.0. This introduced a
brand-new user interface, expertly reworked for a smooth user experience and
huge productivity gains. Building the rules that define the specific data
processing tasks has never been faster. Its support for data and models was
also extended to work with models like IFC, the Esri Utility Network Model and
CAD, so we can offer more services and support to our Utilities, Government
and Transport customers, as well as commercial customers like Google.
· 1Data Gateway also went through similar UI and API improvements allowing us to
improve the speed, consistency, and quality of how we release and deploy our
world-class SaaS rules-based solutions (defined in 1Integrate) to our
customers. How we repeatedly promote SaaS solutions through different
environments has never been easier.
To further extend our reach of 1Data Gateway into the Esri customer base, we
also launched 1Data Gateway for ArcGIS Pro, a revolutionary Data Quality
add-in for Esri ArcGIS Pro (Esri's flagship desktop GIS). There is existing
Esri integration with 1Data Gateway (e.g. with ArcGIS Dashboards) and
1Integrate (e.g. ArcGIS Feature Services). Now we have extended the
integration further for Esri users who use ArcGIS Pro on the desktop.
Enterprise business expansion
The "Land and Expand" strategy is continuing to deliver organic growth, and
alongside our 1Streetworks and NG-9-1-1 offerings, we believe the opportunity
for 1Spatial has never been greater.
UK
In addition to the transformational opportunity presented by 1Streetworks in
the UK, we also made good progress across our Enterprise business in the year.
We secured our first contract with Yorkshire Water Services for £650K. The
contract was to replace the company's GIS platform technology and our team was
selected to undertake the transformation project using Esri technology due to
the significant experience we have in the sector.
We strengthened our relationship with Ordnance Survey Great Britain through a
two-year contract renewal, worth approximately £1.5 million, and will see
1Spatial's specialist team provide software and support services to Ordnance
Survey's Data Management System. We also secured a further software and
services contract with existing customer Land and Property Services in
conjunction with our partner Version1. Land and Property Services ('LPS') is a
division within the Department of Finance ('DoF') in Northern Ireland who
collect, process and manage land and property information.
In November 2023, the government announced that NUAR ('National Underground
Asset Register') was made available across England and Wales and that MVP
coverage will be expanded to Northern Ireland by spring 2024 with the platform
becoming fully operational across the three nations by the end of 2025. NUAR
is a digital map of underground pipes and cables expected to provide £5
billion of economic growth to England, Wales and Northern Ireland. We are
extremely proud to have been an integral part of this successful project. It
demonstrates our world leading geospatial capabilities and our ability to
deliver on complex projects at scale. Our 1Spatial platform is responsible for
transforming, validating, and maintaining the data from all contributing asset
owners, demonstrating our world leading technology and skilled team.
In early FY 2025, we were selected by our long-standing partner CGI for
inclusion in the Cabinet Office Strategic Delivery Partner ecosystem.
Alongside CGI, we will be working with the Cabinet Office over a five-year
period to deliver a range of digital, data and technology services and
products in support of Cabinet Office Business Units.
US
During the year, the US continued to contribute to the Group's recurring
revenue growth with a 23% increase compared to the prior year.
We secured our first contract with the State of Oregon using our 1Integrate
and 1DataGateway products - the initial contract value is $0.4 million over
two years with several future expansion opportunities. The Group now has 18 US
States as customers, each with significant expansion potential.
We secured our second contract with the California Department of
Transportation (Caltrans), in partnership with Rizing for $0.4 million ARR
demonstrating our ability to execute on the opportunity. As the second
contract with Caltrans, secured alongside Rizing, we are realising the
strength of the long-standing partnership and demand for 1Spatial's unique
technology.
We also expanded our existing contracts with Federal Highways and Google REWS
during the year.
The Group also signed its first framework agreement with the state of Texas
post-period end for our Software, Commercial Off-the-Shelf (COTS) and Related
Services, through the Department of Information Resources (DIR). The DIR
delivers technology solutions to state and local government entities within
Texas to ensure the technology is secure, cost-effective and forward looking
and this contract will enable all departments to procure 1Spatial's software
and services without going to formal tender.
Europe
Our focus in Europe in FY 2024 has been to generate awareness for our new
applications and to build a strong pipeline for future years, as demonstrated
by the multi-year contract we secure with a leading Distribution System
Operator for electricity and gas networks in Belgium, in January 2024. The
contract is for geospatial data processing services using 1Spatial's
1Integrate product as well as the Group's geospatial data production
services.
Also in Belgium, we secured an initial four-year contract with Société
Walloon Des Eaux using our 1Water application. In France, we secured a
three-year contract extension with a major European utility customer for
1Spatial's GIS Framework and 1Integrate products, extending the term from one
year to three years.
In Germany, we secured a four-year contract with ATKIS-1Gen, a working group
of ADV (Arbeitsgemeinschaft der Vermessungsverwaltungen der Laender) that
coordinates surveying and mapping in Germany, focused on the development of a
cloud-based generalisation product that will replace on-premise technology.
Australia
The Group secured its first 1Integrate licence contract in Australia winning
Hunter Water, a state-owned corporation providing drinking water, wastewater,
recycled water and storm water services to 500,000 people in the Lower Hunter
Region in New South Wales. The contract is initially for six months carrying a
value totalling AUS$200K with the possibility to extend.
Smart partnerships
Partnerships play a critical role in enabling us to secure new customers.
During the year we continued to win work and deliver solutions alongside our
trusted partners including Esri, CGI, Atkins Realis, Rizing, Qinetiq and
Ordnance Survey.
The strengthening of our long-term partnership with Esri was of particular
importance during the year, in terms of technology and providing enhanced go
to market strategies across our SaaS offerings including NG-9-1-1. Esri is the
global market leader in GIS with a network of over 2,700 partners around the
world.
The past year's progress exemplifies our effective establishment of a
partnership strategy with Esri on a global scale. Moving forward, our primary
objectives include further identifying and nurturing relationships with major
multinational corporations, particularly those where location data management
is integral to broader customer bids.
ESG and People
We continue to make good progress with the development of our ESG strategy. In
March 2022, we kicked off a stakeholder materiality assessment to determine
the priority areas. We consulted with more than 150 customers, employees,
Board members and senior management, shareholders, partners and suppliers to
understand what areas are considered as most important for our stakeholders.
We continue to develop these objectives through industry benchmarking, peer
review and business consultations. Reporting on the key focus areas is
included in the ESG section of this FY 2024 Annual Report.
During the first half of FY 2024, we started rolling out ISO27001 to all Group
entities. Our UK operations were successfully accredited in March 2024 with
further accreditations for other Group entities anticipated in FY 2025. As
advised in the previous year, we have included additional carbon reporting
across all Group entities in our ESG report and plan to increase the level of
reporting in the FY 2025 Annual Report to demonstrate the progress that we
have made.
Our people are critical to the success of the Group. We continue to invest in
our people, providing them with the tools and training to support them and
allow them to realise their potential. We actively encourage our people to
pursue activities that help them in their day-to-day work life and offer a
professional development allowance for them to use as they see fit. We firmly
believe that investing in and empowering our people fosters loyalty, team
spirit and engenders trust which are all to the benefit both the Group and its
people. We support our people in their charitable activities and organise team
and Company-wide events to recognise important milestones throughout the year
such as mental health awareness.
Current trading and outlook
We had a good year with our Enterprise business, gaining more customers and
sales worldwide and growing recurring revenue, setting us up for long-term
success. With its patented rules engine, the Enterprise business has created
the operating cash to fund the powerful SaaS solutions that target niche
markets and have the potential to transform 1Spatial's financial profile.
In FY 2025, a key focus is to prioritise securing sales of our SaaS
applications, recognising their transformative potential for driving growth.
We will maintain consistent levels of product investment to ensure that our
industry-leading cloud platform continues to deliver the best possible
customer experience and product performance. Additionally, we will continue to
invest in sales and marketing teams for 1Streetworks and develop an innovative
partner-enabled approach for NG-9-1-1, aimed at accelerating our growth
trajectory.
A second key focus is the enterprise opportunity in the US, where we see a
considerable expansion opportunity, based on the strength of our offerings and
existing customer relationships. We are therefore investing in further
enterprise sales resource to enable a greater focus on achieving our ambitions
of $1 million revenue per state.
The growth of the sales team to execute on the 1Streetworks and US
opportunities will lead to a limited amount of incremental investment in the
short term. We are confident that given our inherent scalable platform that
attractive returns from this extra investment will start to be seen in FY
2026.
We have seen a solid start to trading in the new financial year, including the
securing of two new framework agreements with the State of Texas and the UK
Cabinet Office through our partner CGI. A growing sales pipeline, increased
levels of recurring revenue and a good level of committed services revenue
provide the Board with confidence in the Group's prospects.
Claire Milverton
Chief Executive Officer
CFO review
Delivering double-digit growth in recurring revenues and adjusted EBITDA
In FY 2024 the Group delivered solid growth in annual revenues with double
digit growth in both recurring revenues and adjusted EBITDA. In spite of
inflationary cost increases, we recorded an 8% increase in operating profit
and a 10% increase in profit before tax. Increases in these key financial
metrics have allowed the Group to continue to invest resources into our SaaS
businesses and cloud platform.
Revenue
Group revenue increased by 8% to £32.3 million from £30.0 million in FY
2023.
Recurring revenue
The business strategy is to grow revenue from repeatable business solutions on
long-term contracts by increasing sales of term licences (rather than one-off
perpetual licences) and increasing the proportion of recurring revenue
compared to services. As a result, excluding the impact of the reduction in
perpetual licence revenue, the business achieved a year-on-year growth in
total revenue of 9%. Recurring revenue, as a percentage of total revenue,
increased to 56% (FY 2023: 49%).
Revenue by type
FY 2024 FY 2023 % change
£m £m
Recurring revenue 18.11 14.76 23%
Services 12.93 13.60 (5%)
Revenue (excluding perpetual licences) 31.04 28.36 9%
Perpetual licences 1.27 1.64 (23%)
Total revenue 32.31 30.00 8%
Percentage of recurring revenue 56% 49%
Annualised Recurring Revenue
The Annualised Recurring Revenue ('ARR') increased by 9% from £15.8 million
to £17.2 million as at 31 January 2024 with ARR attributable to term licences
growing by £2.1 million. The overall renewal rate for existing customers
under contract decreased marginally to 93% (FY 2023: 94%) which still provides
a strong platform for the current year.
ARR by region
FY 2024 FY 2023 % growth
£m £m
UK/Ireland 7.24 6.51 11%
Europe 5.63 5.49 3%
US 2.54 2.22 14%
Australia 1.80 1.56 15%
Total ARR 17.21 15.78 9%
Committed revenue
The level of committed services revenue, which has reduced since the start of
the year as services revenue on the major projects we won last year is
recognised, nevertheless remains high at approximately £10 million and
provides strong revenue visibility, underpinning the Group's strong financial
footing.
The combination of growing ARR, committed services revenue backlog and a
strong pipeline of prospects means that the business is on track to make
further progress on its revenue growth plan. With the business focus on
developing and selling repeatable software solutions, there is an increased
level of revenue visibility, which allows the Board to continue to invest with
confidence.
Regional revenue
Regional revenue - point of origin
FY 2024 FY 2023 % change
£m £m
UK/Ireland 13.25 11.92 11%
Europe 11.03 11.01 0%
US 4.71 4.30 10%
Australia 3.32 2.77 20%
Total revenue 32.31 30.00 8%
All operating regions recorded double-digit growth with the exception of
Europe resulting in overall revenue growth of 8%. Revenue growth in the
UK/Ireland and the US was driven by significant in year term licence sales to
new and existing customers. In Australia, despite competitive pricing
pressure, revenue grew by 20% and included our first 1Integrate licence sale
in the territory. In Europe, revenue was impacted by the timing of closing
contracts towards the end of the year. Although revenue was flat, the European
operation successfully signed two significant multi-year contracts during FY
2024 with expected revenues of approximately €7.1 million to be recognised
over the life of the contract. These wins give clear visibility of revenue
into FY 2025 and beyond. Going forward, all regions will continue to focus on
increasing term licence sales of proprietary technology and SaaS solutions.
Gross profit margin
The gross margin grew by 15% in value terms and by 3% compared to the prior
year to a level of 55%. The Board approved expenditure increases in sales and
delivery capacity in order to secure higher value contracts; and increased
spending on R&D, which is included within the cost of sales, is expected
to yield higher gross margins in future years. The in-year cost increases have
been more than offset by increases in levels of recurring revenue which have
had a positive impact on gross profit. Going forward, the management team will
continue to focus on driving improvements to gross margin through revenue
growth of higher margin term licences and SaaS solutions.
Adjusted EBITDA
The adjusted EBITDA increased by 10% to £5.5 million from £5.0 million in
the prior year resulting in an increase in adjusted EBITDA margin to 17.0% (FY
2023: 16.7%). Inflationary cost increases have been more than offset by
increases in levels of recurring revenue. Cost management remains an important
focus and expenses are constantly reviewed to ensure the level is appropriate
for the structure of the business during this growth phase.
Strategic, integration and other non-recurring items
Costs amounting to £0.7 million relate primarily to the restructuring of the
European business during the year, which is expected to result in
approximately £1 million of cash savings on an annualised basis.
Operating profit and profit before tax
The Group achieved an operating profit of £1.4 million (FY 2023: £1.3
million) and profit before tax of £1.1 million (FY 2023: £1.0 million),
representing a further year of improved profitability for the Group at an
operating and profit before tax level. The increase in gross profit was
largely offset by increased headcount costs, amortisation charges, strategic
items, interest charges and adverse FX movements resulting in a profit before
tax figure consistent with the prior year.
Taxation
The net tax credit for the period was £123k (FY 2023: £14k).
Balance sheet
The Group's net assets increased to £18.3 million at 31 January 2024 (2023:
£17.4 million), mainly due to the overall profit after tax adjusted for
currency differences in reserves.
Trade and other receivables decreased in the year to £12.8 million (FY 2023:
£14.2 million), mainly due to increased levels of receivable collections
around year end. Trade and other payables decreased in the year to £14.0
million (FY 2023: £15.8 million) due primarily to the timing of payments
around year end.
Cash flow
Operating cash inflow before strategic, integration and other non-recurring
items was slightly lower than the prior year at £5.3 million due to adverse
working capital movements resulting from the timing of payments around
year-end with receipts of £0.7m immediately post year end. As a result, free
cash flow declined by approximately £2.0m due to:
· £1.4m increased investment in R&D as the Group focusses on
transition to enterprise / SaaS
· £0.6m increase in strategic, integration and other non-recurring
items from European restructuring which is one off and will realise annualised
savings of €1m
· £0.1m increased interest costs from RCF drawn down used to fund
R&D and restructuring costs
The level of R&D spend for FY 2024 is expected to decrease in FY 2025 by
approximately £0.5m with further reductions expected in future years as we
continue to rationalise our product portfolio.
Operating cash flow FY 2024 FY 2023
£'000 £'000
Cash generated from operations 4,618 5,352
Add back: Cash flow on strategic, integration and other non-recurring items 667 48
Cash generated from operations before strategic, integration and other 5,285 5,400
non-recurring items
Free cash flow FY 2023 FY 2022
£'000 £'000
Cash generated from operations before strategic, integration and other 5,285 5,400
non-recurring items
Expenditure on product development and intellectual property capitalised (5,295) (3,854)
Lease payments (948) (1,099)
Net interest paid (355) (210)
Net tax received 140 179
Purchase of property, plant and equipment (67) (163)
Free cash flow before strategic, integration and other non-recurring items (1,240) 253
Cash flow on strategic, integration and other non-recurring items (667) (48)
Free cash flow (outflow) (1,907) 205
Investment in R&D
Development costs capitalised in the year increased to £5.3 million (FY 2023
£3.9 million) as the business has increased its investment in its technology
and business solutions. The key areas where spending increased were on the
cloud platform for solutions such as 1Streetworks in the UK and NG-9-1-1 in
the US, and other technology such as 1Integrate, 1Data Gateway, 1Telecomms and
1Water. Amortisation of development costs was £2.0 million (FY 2023 £1.6
million).
Financing
The Group's financial position is supported by long-term bank loans,
specifically a committed Revolving Credit Facility in the UK by 1Spatial plc
("RCF") and bank loans taken out by 1Spatial France during the COVID-19
pandemic ("French bank loans"). The RCF was put in place in June 2022 in
response to an increase in the number of higher value sales contracts that the
Group was entering into. The RCF is a £3 million 3-year committed facility
priced on competitive terms. The French bank loans were taken out in 2020 in
response to the COVID-19 pandemic and will be repaid over the next 3 years.
At the end of January 2024, the remaining principal balance outstanding on the
Group's loans was £3.2 million (FY 2023: £2.0 million), with £1.9 million
relating to the RCF and £1.3 million relating to the French bank loans. The
amount repayable in FY 2025 is approximately €0.7 million (FY 2023: €0.7
million). In year investments made in the sales and product development
functions continue to lay a strong foundation for future performance. Combined
with the European restructuring and focus on a more discrete product
portfolio, we have the resources to continue to grow. With a gross cash
position of £4.3 million at 31 January 2024 (FY 2023: £5.0 million), undrawn
liquidity on the committed RCF of £1.1 million, a growing adjusted EBITDA and
positive operating cash generation, the business is in a healthy financial
position, which gives the Board the confidence to continue to invest.
Alternative Performance Measures
Throughout this Annual Report, certain analyses include Alternative
Performance Measures ('APMs') which are not defined by generally accepted
accounting principles ('GAAP') as defined under UK-adopted international
accounting standards or other generally accepted accounting principles. We
believe this information, along with comparable GAAP measurements, is useful
to investors because it provides a basis for measuring our operating
performance. Our management and Board of Directors uses these financial
measures, along with the most directly comparable GAAP financial measures, in
evaluating our operating performance. Non-GAAP financial measures should not
be considered in isolation from, or as a substitute for, financial information
presented in compliance with GAAP. Wherever appropriate and practical, we
provide reconciliation to relevant GAAP measures.
APMs have been provided for the following reasons:
· to present users of the Annual Report with a clear view of what we consider to
be the results of our underlying operations, aiding the understanding of
management analysis and enabling consistent comparisons over time
· to provide additional information to users of the Annual Report about our
financial performance or financial position
The following APMs appear in this annual report.
# APM Explanation of APM
1 Recurring revenue (s) Recurring revenue is the value of committed recurring contracts for term
licences and support & maintenance recorded in the year.
2 Annualised recurring revenue ('ARR') Annualised recurring revenue ('ARR') is the annualised value at the year-end
of committed recurring contracts for term licences and support and
maintenance.
3 Adjusted EBITDA Adjusted EBITDA is a company-specific measure which is calculated as operating
profit/(loss) before depreciation (including right of use asset depreciation),
amortisation and impairment of intangible assets, share-based payment charge
and strategic, integration, and other non-recurring items.
4 Operating cashflow Operating cashflow is a company-specific measure which is calculated as cash
generated from operations excluding cash flow on strategic, integration and
other non-recurring items.
5 Free cashflow Free cash flow is cash from operations after deducting cash outflows for
interest, capital expenditure and lease payments.
6 Net cash Net cash is gross cash less bank borrowings.
7 Available Liquidity Available liquidity is the Group's gross cash balances less the undrawn
element of the Group's revolving credit facility. Details of the revolving
credit facility is more fully described in Note 1.1 to the consolidated
financial statements.
Stuart Ritchie
Chief Financial Officer
Consolidated statement of comprehensive income
For the year ended 31 January 2024
2024 2023
£'000 £'000
Note
Revenue 3 32,315 30,002
Cost of sales (14,389) (14,504)
Gross profit 17,926 15,498
Administrative expenses (16,514) (14,244)
1,412 1,254
Adjusted EBITDA 5,479 4,997
Less: depreciation (180) (253)
Less: depreciation on right of use asset 11 (787) (1,056)
Less: amortisation and impairment of intangible assets 6 (2,440) (2,048)
Less: share-based payment credit/(charge) 33 (192)
Less: strategic, integration and other non-recurring items 4 (693) (194)
Operating profit 1,412 1,254
Finance income 52 19
Finance costs (407) (229)
Net finance cost (355) (210)
Profit before tax 1,057 1,044
Income tax credit 5 123 14
Profit for the year 1,180 1,058
Profit for the year attributable to:
Equity shareholders of the Parent 1,180 1,058
1,180 1,058
Other comprehensive income
Items that may subsequently be reclassified to profit or loss:
Actuarial (loss)/gains arising on defined benefit pension, net of tax (43) 162
Exchange differences arising on translation of net assets of foreign (196) 415
operations
Other comprehensive (loss)/income for the year, net of tax (239) 577
Total comprehensive gain for the year 941 1,635
Total comprehensive gain attributable to the
equity shareholders of the Parent 941 1,635
2024 2023
£'000 £'000
Note
Earnings per Ordinary Share attributable to the owners of the Parent during
the year (expressed in pence per Ordinary Share):
Basic earnings per share 15 1.1 1.0
Diluted earnings per share 15 1.0 0.9
Registered company number (England): 5429800
Consolidated statement of financial
position
As at 31 January 2024
2024 2023
£'000 £'000
Note
Assets
Non-current assets
Intangible assets including goodwill 6 19,951 17,408
Property, plant and equipment 192 302
Right of use assets 11 1,306 1,609
Restricted cash 75 -
Total non-current assets 21,524 19,319
Current assets
Trade and other receivables 7 12,770 14,151
Current income tax receivable - 35
Cash and cash equivalents 8 4,260 5,036
Total current assets 17,030 19,222
Total assets 38,554 38,541
Liabilities
Current liabilities
Bank borrowings 9 (647) (660)
Trade and other payables 10 (14,004) (15,797)
Current income tax payable (99) -
Lease liabilities 11 (584) (608)
Deferred consideration 12 - (28)
Total current liabilities (15,334) (17,093)
Non-current liabilities
Bank borrowings 9 (2,534) (1,322)
Lease liabilities 11 (820) (1,077)
Defined benefit pension obligation (1,222) (1,154)
Deferred tax 13 (337) (544)
Total non-current liabilities (4,913) (4,097)
Total liabilities (20,247) (21,190)
Net assets 18,307 17,351
Share capital and reserves
Share capital 14 20,155 20,155
Share premium account 14 30,508 30,488
Own shares held 14 (14) (139)
Equity-settled employee benefits reserve 4,089 4,122
Merger reserve 16,465 16,465
Reverse acquisition reserve (11,584) (11,584)
Currency translation reserve 305 501
Accumulated losses (41,140) (42,180)
Purchase of non-controlling interest reserve (477) (477)
Total equity 18,307 17,351
Consolidated statement of changes in equity
For the year ended 31 January 2024 Share capital Share premium account Own shares held Equity-settled employee benefits reserve Merger reserve Reverse Currency translation reserve Purchase of non-controlling interest reserve Accumulated losses Total equity
£'000 acquisition
reserve
Balance at 31 January 2022 as restated 20,150 30,479 (303) 3,930 16,465 (11,584) 86 (477) (43,236) 15,510
Comprehensive profit
Profit for the year - - - - - - - - 1,058 1,058
Other comprehensive loss
Actuarial gains arising on defined benefit pension - - - - - - - - 162 162
Exchange differences on translating foreign operations - - - - - - 415 - - 415
Total other comprehensive (loss)/income - - - - - - 415 - 162 577
Total comprehensive income - - - - - - 415 - 1,220 1,635
Transactions with owners
Recognition of share-based payment expense - - - 192 - - - - - 192
Issue of share capital 5 9 14
Transfer of treasury shares 164 (164) -
5 9 164 192 - - - - (164) 206
Balance at 31 January 2023 20,155 30,488 (139) 4,122 16,465 (11,584) 501 (477) (42,180) 17,351
Comprehensive profit
Profit for the year - - - - - - - - 1,180 1,180
Other comprehensive loss
Actuarial loss arising on defined benefit pension - - - - - - - - (43) (43)
Exchange differences on translating foreign operations - - - - - - (196) - - (133)
Total other comprehensive loss - - - - - - (196) - (43) (176)
Total comprehensive income - - - - - - (196) - 1,054 921
Transactions with owners
Recognition of share-based payment credit - - - (33) - - - - - (33)
Issue of shares held in treasury (including exercise of share options) - 20 125 (97) 48
- 20 125 (33) - - - - (97) 15
Balance at 31 January 2024 20,155 30,508 (14) 4,089 16,465 (11,584) 305 (477) (41,140) 18,307
Consolidated statement of cash flows
For the year ended 31 January 2024
Note 2024 2023
£'000 £'000
Cash flows from operating activities
Cash generated from operations 8 (a) 4,674 5,352
Interest received 52 19
Interest paid (407) (229)
Tax paid (35) -
Tax received 175 179
Restricted cash
(75) -
Net cash generated from operating activities 4,384 5,321
Cash flows from investing activities
Purchase of property, plant and equipment (67) (163)
Expenditure on development costs and other intangibles 6 (5,295) (3,854)
Net cash used in investing activities (5,362) (4,017)
Cash flows from financing activities
Proceeds from loans and borrowings 1,900 500
Repayment of loans and borrowings (639) (1,043)
Repayment of lease obligations 11 (904) (1,099)
Payment of deferred consideration on acquisition 12 - (352)
Net proceeds from share issue 19 14
Net cash used in financing activities 376 (1,980)
Net decrease in cash and cash equivalents (602) (676)
Cash and cash equivalents at start of year 5,036 5,623
Effects of foreign exchange on cash and cash equivalents (174) 89
Cash and cash equivalents at end of year 8 (b) 4,260 5,036
Notes to the financial statements
For the year ended 31 January 2023
1. Basis of preparation
The preliminary information of 1Spatial plc has been prepared in accordance
with international accounting standards in conformity with the requirements of
the Companies Act 2006. The consolidated financial statements have been
prepared under the historical cost convention.
The preparation of financial statements in conformity with IFRS requires the
use of certain critical accounting estimates. It also requires management to
exercise its judgement in the process of applying the Group's accounting
policies.
The results shown for the year ended 31 January 2024 and 31 January 2023 are
audited. The consolidated financial information contained in this announcement
does not constitute statutory accounts within the meaning of Section 434 of
the Companies Act 2006. Statutory accounts of the Company in respect of the
financial year ended 31 January 2024 were approved by the Board of directors
on 23 April 2024 and will be delivered to the Registrar of Companies in due
course. The report of the auditors on those accounts was unqualified and did
not contain an emphasis of matter paragraph nor any statement under Section
498 of the Companies Act 2006.
2. Going concern
The Board used as its basis for the going concern review the budget for the FY
2025 year, rolled out to 30 April 2025 using part of its forecast for FY 2026,
so that a full 12-month period from the date of signing the FY 2024 Annual
Report (the 'Assessment Period') and Accounts is considered.
All operating regions recorded double-digit growth with the exception of
Europe, which was flat compared to the prior year. Revenue growth in the
UK/Ireland, the US and Australia was driven by significant in year term
licence sales with new and existing customers. In Europe, revenue was impacted
by the timing of closing contracts towards the end of the year. In spite of
the revenue decrease, the European operation successfully signed two major
separate multi-million Euro contracts towards the end of FY 2024 which gives
clear visibility of revenue into FY 2025 and beyond. Going forward, all
regions will continue to focus on increasing sales of higher margin owned
technology sold as term licences.
FY 2024 was a year of increased revenue and operating profit as well as
double-digit growth in recurring revenue and increased adjusted EBITDA.
Metrics for future years are positive with Annualised Recurring Revenue
('ARR') increasing to approximately £17m (FY 2023: approximately £16m)
driven primarily by term licence sales in the UK and the US. Additionally, the
value of committed service orders going into FY 2025 remains strong at
approximately £10m. We anticipate that revenue on these orders will be
recognised in FY 2025. We entered the current year with a record level of
contracted future revenue, a wide range of customers in stable industry
segments of Government, Utilities and Transport and growing proof of delivery
in all regions.
The operating cash flow generated in FY 2024 was positive but was impacted by
working capital requirements on larger projects and the Group's decision to
continue to invest in growing the business and its product offerings.
The Group started the current financial year on 1 February 2024 with cash of
£4.3m plus the undrawn Revolving Credit Facility ('RCF') to give the Group
Available Liquidity of approximately £5.4m.
Based on management's base case forecast the Group is able to meet liabilities
as they fall due and operate within available facilities throughout the
assessment period.
In addition to the base case, management also considered sensitivities in
respect of potential stress tests, a reverse stress test and the mitigating
actions available to management. The modelling of the downside scenarios
assessed if there was a significant risk to the Group's liquidity. These
scenarios make assumptions on revenue declines and costs savings in relation
to people costs and other general operating costs.
Under the stress tests the Group is still able to meet liabilities as they
fall due and operate within available facilities throughout the assessment
period.
The reverse test was used to find what would be the level of revenue decline
that would lead to insufficient liquidity in the Group before the end of the
assessment period. The available liquidity would be breached only if revenues
were 13% below management's forecast in the assessment period and no action
was taken on costs. As a result of completing this assessment management
considered the likelihood of the reverse stress test scenario arising to be
remote. In reaching this conclusion management considered:
● Revenue - the revenue pipeline, the level of annual recurring
revenue and the positive progress on SaaS sales
● Flexible cost base - a portion of the Group's costs are
discretionary in nature
● The ability to reduce development expenditure if revenue growth is
lower than forecast
The Directors continue to carefully monitor the current macroeconomic
environment, and its impact on the on the operations, revenues and growth
plans of the Group. The Group has not seen any significant impact on revenues
from the impact increased inflation. The Group's most significant exposure to
inflationary cost rises is from staff costs and Infrastructure services. The
Group is only marginally exposed to changes in interest rates due to interest
charged on the RCF. The interest rate for any drawn amounts on the RCF is
2.95% per annum over the Bank of England Sterling Overnight Index Average
('SONIA'). Interest on the French bank loans is charged on a fixed rate basis.
The Directors have also considered the conflict in Ukraine and Middle East,
and whilst the impact on the Group is currently deemed nil, the Directors
remain vigilant and ready to implement mitigation action in the event of any
impact.
The Directors are also not aware of any significant matters that occur outside
the going concern period that could reasonably possibly impact the going
concern conclusion. While the RCF (which has a limit of £3m and was £1.9m
drawn at year end) has an expiry date of 22 June 2025, the Directors are in
advanced negotiations for both an extension of the term and an increase in the
available facility. The increased facility is being sought to provide a secure
line of liquidity as our SaaS businesses continue to grow.
The Board has concluded, after reviewing the work detailed above, that the
Group has adequate resources to continue in operation for at least 12 months
from the date of approval of the financial statements. Accordingly, they have
adopted the going concern basis in preparing the financial statements.
3. Segmental information
The chief operating decision-maker has been identified as the Board of
Directors, which makes the Group's strategic decisions. The Group is now
focused on developing and selling repeatable solutions and recurring term
licences globally, with associated support services. As such, the Board
considers that the Group operates with only one segment and one CGU under one
global strategy and the results are accordingly presented as Group results
only.
The following table provides an analysis of the Group's revenue by type.
Revenue by type
2024 2023
£'000 £'000
Term licences 8,311 5,167
SaaS solutions 154 -
Support and maintenance - own 6,764 6,727
Support and maintenance - third party 2,878 2,861
Recurring revenue 18,107 14,755
Services 12,935 13,601
Perpetual licences - own 397 393
Perpetual licences - third party 876 1,253
Total revenue 32,315 30,002
The Group's operations are located in the United Kingdom, Europe (Ireland,
France and Belgium) the United States, Tunisia and Australia. The following
table provides an analysis of the Group's revenue by geographical destination.
Revenue by region
2024 2023
£'000 £'000
UK 11,967 10,454
Europe 11,887 12,173
US 4,735 4,325
Rest of World 3,726 3,050
Total revenue 32,315 30,002
The Board assesses the performance of the Group based on adjusted EBITDA.
Adjusted EBITDA is a company-specific measure which is calculated as operating
profit before depreciation (including right of use asset depreciation),
amortisation and impairment of intangible assets, share-based payment charge
and strategic, integration, and other non-recurring items (see note 4). As
these are non-GAAP measures, they should not be considered as replacements for
IFRS measures. The Group's definition of these non-GAAP measures may not be
comparable to other similarly titled measures reported by other companies.
The following table provides an analysis of the Group's revenue by country of
domicile of the selling entity, split by whether the revenue is recognised at
a point in time or over time.
2024 2023
£'000 £'000
UK/Ireland 13,252 11,921
At a point in time 3,935 2,185
Over time 9,317 9,736
Europe 11,030 11,011
At a point in time 2,160 2,011
Over time 8,870 9,000
United States 4,713 4,303
At a point in time 2,613 2,159
Over time 2,100 2,144
Australia 3,320 2,767
At a point in time 1,567 1,070
Over time 1,753 1,697
32,315 30,002
Total revenue at a point in time 10,275 7,425
Total revenue over time 22,040 22,577
As at 31 January 2024, costs to obtain and fulfil a contract of £52,000 were
included in other receivables (2023: £109,000). Amortisation of costs to
obtain and fulfil a contract for the year ended 31 January 2024 were £67,000
(2023: £75,000). The Group has no significant concentration risk with no
major customers representing more than 10% of Group revenue (2023: nil).
The Group has significant contract balances (both assets and liabilities),
which arise out of the ordinary course of its operations. Contract assets
include accrued income, which arises where chargeable work is performed, and
the revenue is recognised based upon satisfaction of performance obligations
in advance of invoicing the client. This can arise because, particularly for
some larger projects, client invoicing may be in stages and linked to project
milestones. Once an invoice is raised then the related accrued income will be
reduced by the invoiced amount.
Significant contract liabilities arise when a client has been invoiced
annually in advance (for example, for annual support and maintenance
contracts) and the revenue is recognised on a monthly basis over the year. In
that case, the initial invoiced amount is fully deferred and then released to
the profit and loss over the course of the contract.
The following table provides an analysis of the Group's non-current assets by
location.
2024 2023
£'000 £'000
UK/Ireland 9,455 7,790
Europe 8,355 7,869
United States 3,711 3,656
Rest of World 3 4
Total 21,524 19,319
4. Strategic, integration and other non-recurring items
In accordance with the Group's policy for strategic, integration and other
non-recurring items, the following charges were included in this category for
the year:
2024 2023
£'000 £'000
Restructuring 693 -
Amounts paid relating to change of CFO - 194
Total 693 194
Restructuring costs of £693,000 were incurred during FY 2024. These relate
primarily to our European operation, including the removal of certain
managerial positions across the region. Costs incurred include redundancy
costs and related legal fees.
The cash impact in FY 2024 relating to the strategic, integration and other
non-recurring items was £667,000 (2023: £48,000).
5. Income tax credit
2024 2023
£'000 £'000
Current tax
UK corporation tax on income for year 1 (57)
Foreign 126 79
tax
Adjustments in respect of prior years (42) (15)
Total current tax charge 85 7
Deferred tax (note 13)
Origination and reversal in temporary differences (208) (58)
Effect of tax rate change on opening balance - 38
Adjustments in respect of prior years - (1)
Total deferred tax (208) (21)
Total tax credit (123) (14)
Factors affecting the tax credit for the year:
The differences between the standard rate of corporation tax in the UK and the
actual tax credit are explained below:
2024 2023
£'000 £'000
Profit on ordinary activities before tax 1,057 1,044
254 198
Profit on ordinary activities before tax multiplied by the effective rate of
corporation tax in the UK of 24.03% (2023: 19%)
Effect of:
Expenses not deductible for tax purposes 15 96
Adjustment in respect of R&D tax credits (280) (312)
Effect of movement in deferred tax rate 6 38
Utilisation of losses not previously recognised for tax purposes - (66)
Deferred tax not recognised on losses carried forward (71) 110
Adjustments in respect of prior years (42) (15)
Differences in tax rates applicable to overseas subsidiaries (3) (47)
Other differences (2) (16)
Total tax credit for the year (123) (14)
The relevant deferred tax balances have been measured at 25% for the current
year-end, being the tax rate enacted by the reporting date (2023: 25%).
6. Intangible assets including goodwill
Goodwill Brands Customers and Software Development Intellectual property Total
related contracts costs
£'000
£'000
£'000 £'000 £'000 £'000 £'000
Cost
At 1 February 2023 17,672 462 4,738 6,799 25,597 72 55,340
Additions - - - 1 5,283 11 5,295
Effect of foreign exchange (223) (7) (108) (105) (372) - (815)
At 31 January 2024 17,449 455 4,630 6,695 30,508 83 59,820
Accumulated impairment and amortisation
At 1 February 2023 11,517 318 3,933 5,294 16,847 23 37,932
Amortisation - 23 151 237 2,023 6 2,440
Effect of foreign exchange (108) (3) (87) (66) (239) - (503)
At 31 January 2024 11,409 338 3,997 5,465 18,631 29 39,869
Net book amount at 6,040 117 633 1,230 11,877 54 19,951
31 January 2024
Net book amount at 6,155 144 805 1,505 8,750 49 17,408
31 January 2023
The net book amount of development costs includes £11,877,000 (2023:
£8,750,000) internally generated capitalised software development costs that
meet the definition of an intangible asset. The amortisation charge of
£2,440,000 (2023: £2,048,000) is included in the administrative expenses in
the statement of comprehensive income.
Goodwill Brands Customers and Software Development Intellectual property Total
related contracts costs
£'000
£'000
£'000 £'000 £'000 £'000 £'000
Cost
At 1 February 2022 17,194 450 4,547 6,574 21,228 72 50,065
Additions - - - 39 3,815 - 3,854
Effect of foreign exchange 478 12 191 186 554 - 1,421
At 31 January 2023 17,672 462 4,738 6,799 25,597 72 55,340
Accumulated impairment and amortisation
At 1 February 2022 11,330 291 3,640 4,958 14,826 17 35,062
Amortisation - 22 149 227 1,644 6 2,048
Effect of foreign exchange 187 5 144 109 377 - 822
At 31 January 2023 11,517 318 3,933 5,294 16,847 23 37,932
Net book amount at 6,155 144 805 1,505 8,750 49 17,408
31 January 2023
Net book amount at 5,864 159 907 1,616 6,402 55 15,003
31 January 2022
Impairment tests for goodwill
Goodwill is assessed for the Group as a whole as the Group operates with one
segment and one CGU as the Group manages its operations under one global
strategy. All aspects of the business are focusing now on growing recurring
revenue of repeatable solutions using technology that will be deployed
globally under a single strategy. Products developed by regional development
teams are marketed globally.
2024 2023
Goodwill Total Total
£'000 £'000
Opening carrying value 6,155 5,864
Effect of foreign exchange (115) 291
Closing carrying value 6,040 6,155
Basis for calculation of recoverable amount
The Group has prepared a five-year plan for its CGU (based on a formally
approved one year plan extended for four more projected years). The detailed
plan put together by the management team and the Board makes estimates for
revenue and gross profit expectations. This is from both contracted and
pipeline revenue streams. It also takes account of historical success of
winning new work and has been prepared in accordance with IAS 36: "Impairment
of Assets".
The key assumptions used in the value in use calculation were the pre-tax
discount rate applied (14% (FY 2023: 14%)), revenue growth rates of 9.5% per
annum and cost growth rates of 7% per annum for the five-year period from 1
February 2024 to the year ending 31 January 2029 and the EBITDA to cash
conversion is assumed to be 60% or greater. The Board approved budget for the
year ending 31 January 2025 was used as the basis for the Group's value in use
calculation. Results for the next four years were calculated using the above
assumptions to derive the Group's value in use. No impairment is required as
no individual asset has a higher carrying value than its value in use.
The rates used in the above assumptions are consistent with management's
knowledge of the industry and strategic plans going forward. The assumptions
noted above have been given in terms of revenue and overhead percentage
growth. For 2025 and subsequent years, the assumption has been provided in
terms of growth on the prior year EBITDA. The terminal growth rate of 2% does
not exceed the long-term growth rate for the business in which the CGUs
operate. The discount rate used is pre-tax and reflects specific risks
relating to the Group. The forecasts are most sensitive to changes in revenue
and overhead assumptions (taken together as the EBITDA). However, there are no
major changes to the key assumptions which would cause the goodwill to be
impaired.
There would have to be a reduction in forecast EBITDA by 24% for each year of
the five-year period ending 31 January 2029 for the headroom to be removed.
7. Trade and other receivables
Current 2024 2023
£'000 £'000
Trade receivables 4,423 4,992
Less: provision for impairment of trade receivables (19) (29)
4,404 4,963
Other receivables 1,338 2,044
Prepayments and accrued income 7,028 7,144
12,770 14,151
Below is a reconciliation of the movement in accrued income:
2024 2023
£'000 £'000
At 1 February 2023 6,004 5,075
Accrued revenue invoiced in the year (6,004) (5,075)
Revenue accrued in the year 5,927 5,947
Foreign exchange difference 69 57
At 31 January 2024 5,996 6,004
The fair value of the Group's trade receivables and other receivables is the
same as its book value stated above. No interest is charged on overdue
receivables.
At 31 January 2024, trade receivables of £3,405,000 (2023: £3,698,000) were
fully performing. Before accepting any new customer, the Group assesses the
potential customer's credit quality and defines credit limits by customer.
The Group applies the IFRS 9 simplified approach to measuring expected credit
losses using a lifetime expected credit loss provision for trade receivables
and contract assets. To measure expected credit losses on a collective basis,
trade receivables and contract assets are grouped based on similar credit risk
and aging. The contract assets have similar risk characteristics to the trade
receivables for similar types of contracts. The expected credit losses are
based on the Group's historical credit losses which are then adjusted for
current and forward-looking information on macroeconomic factors affecting the
Group's customers. The Group has identified gross domestic growth rates,
unemployment rates, interest rates and inflation rates as the key
macroeconomic factors in the countries in which the Group operates.
At 31 January 2024, trade receivables of £1,003,000 (2023: £1,269,000) were
past due but not impaired. The ageing analysis of these customers is set out
below. There has been no change in the credit quality of these balances; they
relate to customers where there is no history of default and are still
considered fully recoverable.
The ageing of these receivables is as follows:
2024 Weighted average loss rate Impairment loss allowance
£'000 £'000
Current 3,405 0.1% 4
Up to 3 months overdue 826 0.5% 4
3 to 6 months overdue 74 2.0% 2
6 to 12 months overdue 46 5.0% 2
> 12 months overdue 72 10.0% 7
4,423 19
2023 Weighted average loss rate Impairment loss allowance
£'000 £'000
Current 3,698 0.1% 4
Up to 3 months overdue 1,029 0.5% 5
3 to 6 months overdue 98 2.0% 2
6 to 12 months overdue 10 5.0% 1
> 12 months 157 10.0% 17
4,992 29
As of 31 January 2024, trade receivables of £19,000 were impaired (2023:
£29,000) and provided for.
The trade receivables above include performance retentions on long-term
contracts.
Movements on the Group provision for impairment of trade receivables are as
follows:
2024 2023
£'000 £'000
At 1 February 29 25
(Decrease) / increase (10) 4
At 31 January 19 29
The other classes within trade and other receivables do not contain impaired
assets and the Group expects to recover these in full. There are no financial
assets whose terms have been renegotiated that would otherwise be past due or
impaired.
The maximum exposure to credit risk at the reporting date is the carrying
value of each class of receivable noted above. The Group does not hold any
collateral as security.
8. Cash and cash equivalents and notes to the consolidated statement of
cash flows
2024 2023
£'000 £'000
Cash at bank and in hand 4,260 5,036
4,260 5,036
The fair value of the Group's cash and cash equivalents is the same as its
book value stated above.
Notes to the consolidated statement of cash flows
(a) Cash generated from operations
Note 2024 2023
£'000 £'000
Profit before tax 1,057 1,044
Adjustments for:
Finance income (52) (19)
Finance cost 407 229
Depreciation 967 1,309
Amortisation of acquired intangibles 391 386
Amortisation and impairment of development costs 2,049 1,662
Share-based payment credit (33) 192
Net foreign exchange movement - -
Decrease/(increase) in trade and other receivables 1,196 (1,426)
(Decrease)/increase in trade and other payables (1,314) 1,963
Increase in defined benefit pension obligation 6 12
Cash generated from operations 4,674 5,352
2024 2023
£'000 £'000
Cash generated from operations before strategic, integration and other 5,341 5,400
non-recurring items
Cash flow on strategic, integration and other non-recurring items (note 4) (667) (48)
Cash generated from operations 4,674 5,352
(b) Reconciliation of net cash flow to movement in net funds
2024 2023
£'000 £'000
(Decrease) in cash in the year (602) (676)
Changes resulting from cash flows (602) (676)
Net cash outflow in respect of borrowings repaid 639 543
Net cash inflow in respect of new borrowings (1,900)
Effect of foreign exchange (112) (44)
Change in net funds (1,975) (177)
Net funds at beginning of year 3,054 3,231
Net funds at end of year 1,079 3,054
Analysis of net funds
Cash and cash equivalents classified as:
Current assets 4,260 5,036
Bank loans (3,181) (1,982)
Net funds at end of year 1,079 3,054
Net funds is defined as cash and cash equivalents net of bank loans (and
excluding lease liabilities).
c) Reconciliation of movement in liabilities from financing activities
Bank borrowings and leases due within 1 year Bank borrowings and leases due after 1 year Total
£'000 £'000 £'000
Total debt (including lease liabilities) as at 1 February 2023 1,268 2,399 3,667
Borrowings at 1 February 2023 660 1,322 1,982
Repayment of borrowings (639) - (639)
New borrowings - 1,900 1,900
Foreign exchange difference (21) (41) (62)
Borrowings before transfer - 3,181 3,181
Transfer from due after 1 year to due within 1 year 647 (647) -
Borrowings as at 31 January 2024 647 2,534 3,181
Lease liability at 1 February 2023 608 1,077 1,685
Cash movements:
Lease payments (904) - (904)
Non-cash movements:
Additions in the year 199 315 514
Interest cost 97 - 97
Foreign exchange difference - 12 12
Lease liability before transfer - 1,404 1,404
Transfer from due after one year to due within one year 584 (584) -
Lease liability as at 31 January 2024 584 820 1,404
Total debt (including lease liabilities) as at 31 January 2024 1,231 3,354 4,585
9. Bank borrowings
2024 2023
£'000 £'000
Current bank borrowings 647 660
Non-current bank borrowings 2,534 1,322
3,181 1,982
Bank borrowings
Bank borrowings relate to amounts drawn on the Revolving Credit Facility
('RCF') amounting to £1.9m at 31 January 2024 (2023: £nil) together with
bank loans taken out by 1Spatial France totalling €1.5m (2023: €2.25m) in
2020 during the COVID-19 pandemic ('French bank loans'). The interest rate for
any drawn amounts on the RCF is 2.95% per annum over the Bank of England
Sterling Overnight Index Average ('SONIA'). Interest on the French bank loans
is charged on a fixed rate basis with interest rates ranging between 0% and
3.6%.
The French bank loans are due for repayment over the next three years with a
broadly even repayment pattern. Approximately €0.7m (£0.6m) is due for
repayment in FY 2025. There are no financial covenants attached to the loans,
nor is there any security applied. All long-term loans are denominated in €.
There are certain covenants associated with the Revolving Credit Facility
('RCF') in relation to the maximum gearing of the Group. The RCF is
denominated in GBP, the facility limit is £3m (2023: £3m) with an expiry
date of 22 June 2025. The interest rate for any drawn amounts is 2.95% per
annum over the Bank of England Sterling Overnight Index Average ('SONIA').
There is a commitment fee of 1.15% per annum of any undrawn part of the
Facility.
10. Trade and other payables
Current
2024 2023
£'000 £'000
Trade payables 2,788 2,861
Other taxation and social security 2,907 3,653
Other payables 364 506
Accrued liabilities 1,071 1,229
Deferred income 6,874 7,548
14,004 15,797
The Directors consider that the book value of trade payables, taxation, other
payables, accrued liabilities and deferred income approximates to their fair
value at the reporting date.
Below is a reconciliation of the movement in deferred income:
2024 2023
£'000 £'000
At 1 February 7,548 5,612
Revenue recognised in the year (7,548) (5,612)
Revenue deferred at year end 6,950 7,460
Foreign exchange difference (76) 88
At 31 January 6,874 7,548
11. Leases
Right of use assets Total
£'000
At 1 February 2023 1,609
Additions 514
Depreciation (787)
Foreign exchange difference (29)
At 31 January 2024 1,306
2024 2023
£'000 £'000
Buildings 1,104 1,490
Cars 178 82
Others 24 37
1,306 1,609
Lease liabilities
Total
£'000
At 1 February 2023 1,685
Additions 514
Interest cost 97
Cash paid (904)
Foreign exchange difference 12
At 31 January 2024 1,404
2024 2023
£'000 £'000
Current 584 608
Non-current 820 1,077
1,404 1,685
Amounts recognised in profit or loss:
Depreciation charge of right of use assets 2024 2023
£'000 £'000
Buildings 677 955
Cars 99 88
Others 11 13
787 1,056
12. Business combinations
On 7 May 2019, the Company entered into share purchase agreements to acquire
the entire issued share capital of Geomap-Imagis Participations
('Geomap-Imagis') for a total consideration of €7.0m (the 'Consideration').
Full details of the acquisition were provided in the Annual Report for the
year ended 31 January 2020. The remaining balance payable at 31 January 2022
of €440,540 (equivalent to £380,000) was satisfied mainly in cash
(£352,000) in September 2022, with the balance settled in 57,685 Ordinary
Shares on 31 March 2023. These shares had a market value of €31,839
(£28,000) at the date of issue and were issued from treasury shares. There
are no further elements of deferred consideration due to the former
shareholders of Geomap-Imagis Participations ('Geomap-Imagis').
13. Deferred tax
The following are the major deferred tax liabilities and (assets) recognised
by the Group and movements thereon during the current year and prior reporting
years.
Tax losses Accelerated tax depreciation Intangibles Other temporary differences Total
£'000 £'000 £'000 £'000 £'000
At 31 January 2022 (950) - 1,543 (28) 565
Deferred tax (credit)/charge for year in profit or loss (77) - 76 (20) (21)
DT credit OCI - - - 54 54
Foreign exchange difference - - - (54) (54)
At 31 January 2023 (1,027) - 1,619 (48) 544
Deferred tax (credit) / charge for year in profit or loss (231) - (6) 30 (207)
DT charge OCI - - - 13 13
Foreign exchange difference - - - (13) (13)
At 31 January 2024 (1,258) - 1,613 (18) 337
Deferred income tax assets are recognised against tax loss carry-forwards to
the extent that the realisation of the related tax benefit through future
taxable benefits is probable. The Group did not recognise potential deferred
tax assets of £3,194,000 (2023: £3,243,000) in respect of losses amounting
to £12,965,000 (2022: £13,133,300) that can be carried forward against
future taxable income, on the grounds that at the balance sheet date their
utilisation is not considered probable. Losses have no expiry date.
The deferred tax balance is analysed as follows:
Deferred tax Deferred tax liability Total
asset £'000 £'000
£'000
Recoverable within 12 months - - -
Recoverable after 12 months - 1,613 1,613
Settled within 12 months (18) - (18)
Settled after 12 months (1,258) - (1,258)
(1,276) 1,613 337
14. Share capital, share premium account and own shares held
Allotted and fully paid 2024 2023
Number Number
Ordinary Shares of 10p each 110,859,545 110,859,545
226,699,878 226,699,878
Deferred shares of 4p each
Rights of shares
Ordinary Shares
The Ordinary Shares all rank pari passu, have the right to participate in
dividends and other distributions made by the Company, and to receive notice
of, attend and vote at every general meeting of the Company. On liquidation,
Ordinary Shareholders are entitled to participate in the assets available for
distribution pro rata to the amount credited as paid up on such shares
(excluding any premium).
Deferred shares
The deferred shares do not carry voting rights or a right to receive a
dividend. The holders of deferred shares will not have the right to receive
notice of any general meeting of the Company, nor have any right to attend,
speak or vote at any such meeting. The deferred shares will also be incapable
of transfer (other than to the Company). In addition, holders of deferred
shares will only be entitled to a payment on a return of capital or on a
winding up of the Company after each of the holders of Ordinary Shares has
received a payment of £1,000,000 in respect of each Ordinary Share.
Accordingly, the deferred shares will have no economic value. No application
will be made for the deferred shares to be admitted to trading on AIM nor to
trading on any other stock or investment exchange.
Voting Rights
1Spatial Plc has 110,859,545 (2023: 110,859,545) Ordinary Shares of 10p in
issue, of which a total of 15,399 (2023: 147,084) Ordinary Shares are held in
treasury. Therefore, the total number of Ordinary Shares with voting rights is
110,844,146 (2023: 110,712,461).
.
Number of shares Allotted, called up and fully paid shares Share Own shares held
£'000 premium £'000
account
£'000
At 31 January 2023 337,559,423 20,155 30,488 (139)
Share options exercised 74,000 - 20 -
Geomap-Imagis deferred consideration shares 57,685
Transfer of treasury shares (131,685) - - 125
At 31 January 2024 337,559,423 20,155 30,508 (14)
During the year, 74,000 Ordinary Shares were issued from Treasury shares for
consideration of £19,610 in settlement of share options exercised.
Own shares
The Group has 15,399 (FY 2023: 147,084) Ordinary Shares of 10p each and
3,500,000 deferred shares with a nominal value of 4p each held in treasury.
The original consideration paid was £0.3m. During the year 74,000 and 57,685
shares were transferred out of treasury to satisfy employee share awards and
Geomap-Imagis deferred consideration, respectively.
15. Earnings per Ordinary Share
Basic earnings per share is calculated by dividing the profit attributable to
equity holders of the Company by the weighted average number of Ordinary
Shares in issue during the year.
2024 2023
£'000 £'000
Profit attributable to equity shareholders of the Parent 1,180 1,058
2024 2023
Number Number
000s 000s
Ordinary Shares with voting rights 110,860 110,712
Deferred consideration payable in shares - 55
Basic weighted average number of Ordinary Shares 110,860 110,807
Impact of share options/LTIPS 1,842 2,845
Diluted weighted average number of Ordinary Shares 112,702 113,652
2024 2023
Pence Pence
Basic earnings/ per share 1.1 1.0
Diluted earnings/ per share 1.0 0.9
16. Availability of annual report and financial statements
Copies of the Company's full annual report and financial statements are
expected to be posted to shareholders in due course and, once posted, will
also be made available to download from the Company's website
at www.1spatial.com (http://www.1spatial.com/) .
1Spatial plc is registered in England and Wales with registered number
5429800. The registered office is c/o Tennyson House, Cambridge Business Park,
Cambridge, Cambridgeshire, CB4 0WZ.
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