REG - 1Spatial Plc - Interim results
28/09/2022 07:00
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RNS Number : 9132A 1Spatial Plc 28 September 2022
28 September 2022
1Spatial plc (AIM: SPA)
("1Spatial", the "Group" or the "Company")
Interim Results for the six-month period ended 31 July 2022 ("H1 2023")
Delivering further revenue and ARR growth
1Spatial, (AIM: SPA), a global leader in Location Master Data Management
(LMDM) software and solutions, is pleased to announce interim results for the
six months ended 31 July 2022.
H1 2023 highlights
· Group revenue up 11% driven by growth in recurring revenue:
o 18% increase in recurring revenue to £6.6m (H1 2022: £5.6m),
representing 47% of total revenue (H1 2022: 45%)
o 67% increase in Term Licences revenue to £1.7m (H1 2022: £1.0m)
· Annualised Recurring Revenue ("ARR") up 29%:
o ARR* up 29% to £15.2m (H1 2022: £11.8m at constant currency)
o 115% increase in Term Licences ARR* to £5.2m (H1 2022: £2.4m at
constant currency)
· Profit before tax of £0.3m (H1 2022: loss of £0.3m)
Financial highlights
Half-year to 31 July 22 Half-year to 31 July 21 Change
Growth
£m £m £m %
Group revenue 14.0 12.6 1.4 11
Recurring revenue 6.6 5.6 1.0 18
Term licences revenue 1.7 1.0 0.7 67
Group Total ARR* 15.2 11.8 3.4 29
Term licences ARR* 5.2 2.4 2.8 115
Group gross profit 7.0 6.4 0.6 9
Adjusted EBITDA** 2.0 1.8 0.2 10
Adjusted EBITDA** margin (%) 14.4 14.5 (0.1) (0.1pp)
Operating profit/(loss) 0.4 (0.2) 0.6 n/a
Profit/(loss) before tax 0.3 (0.3) 0.6 n/a
Earnings/(loss) per share - basic and diluted (p) 0.2 (0.2) 0.4 n/a
Net cash*** 2.3 2.8 (0.5) (17)
* Annualised Recurring Revenue (ARR) is the annualised value at the
period-end of committed recurring contracts for term licences and support
& maintenance. Term licences ARR is the annualised value at the period-end
of committed recurring contracts for term licences.
** 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 but excludes lease liabilities
Group operational highlights
· Significant new customer wins, including contracts with High
Speed Two (HS2) and a European Aerospace company
· Planned launch of multi-tenancy SaaS-based solutions in H2,
including Next Generation 9-1-1 (NG911) and Traffic Management Plan
Automation, expected to provide significant future growth opportunities
· Post period-end secured two significant contracts with the State
of Arkansas and Eastern Transportation Coalition, demonstrating further US
momentum
· Solid progress made developing an ESG strategy on which the Board
plans to provide an update in the 2023 Annual report
Outlook
· Trading in the second half has started positively and the Board
remains confident in delivering results for FY 2023 in line with management's
expectations
Commenting on the results, 1Spatial CEO, Claire Milverton, said:
"This has been another period of solid growth driven by a combination of new
customer wins, expansion of our partner network and a positive market
landscape. Digital transformation and the growing need for better quality,
shareable location data to support infrastructure investment continue to drive
demand for 1Spatial's solutions.
"We see a substantial opportunity to take further market share across our key
regions as we look to the second half. We have good visibility into full year
revenues and are focussed on continuing the significant progress made building
recurring revenues in line with our three-year growth plan. With a strong
pipeline and investment made to date, the Board remains confident in
delivering results for FY23 in line with management's expectations."
The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulation
(EU) No. 596/2014 as amended by The Market Abuse (Amendment) (EU Exit)
Regulations 2019.
For further information, please contact:
1Spatial plc 01223 420 414
Claire Milverton / Andrew Fabian
Liberum (Nomad and Broker) 020 3100 2000
Neil Patel / Cameron Duncan / Kate Bannatyne / Miquela Bezuidenhoudt
Alma PR 020 3405 0205
Caroline Forde / Hannah Campbell / Stephen Samuel 1spatial@almapr.co.uk
About 1Spatial plc
Unlocking the Value of Location Data
1Spatial plc is a global leader in providing Location Master Data Management
(LMDM) software, solutions and business applications, primarily to the
Government, Utilities and Transport sectors via the 1Spatial platform. Our
solutions ensure data governance, facilitating the efficient, effective and
sustainable operation of customers around the world. Our global clients
include national mapping and land management agencies, utility companies,
transportation organisations, government and defence departments.
Today, when using and sharing trusted data provides significant opportunities
for businesses and governments to deliver against important sustainability and
Net Zero goals, our vision is clear: to make the world safer, smarter and more
sustainable by unlocking the value in data, enabling better decisions and
greater insights.
The 1Spatial platform is a comprehensive set of data and system agnostic LMDM
software components which helps ensure master data is compliant, current,
complete, consistent, and coordinated - and that customers can be confident it
will remain that way as it evolves. It allows them to master their data on any
device, anywhere, anytime and can be deployed as SaaS in the cloud,
on-premise, or as a hybrid of both.
1Spatial plc is AIM-listed, headquartered in Cambridge, UK, with operations in
the UK, Ireland, USA, France, Belgium, Tunisia and Australia.
www.1spatial.com (http://www.1spatial.com)
Half-year review
Following the launch of our three-year growth plan in 2021, we are already a
financially, operationally, and culturally stronger business, as demonstrated
by the progress made in the first half of this financial year. The growth in
our revenues, annual recurring term licence revenue and the number of
substantial new wins, many of which have potential for future expansion,
confirm that we are successfully delivering against our three-pillared growth
strategy focused on innovation, customers and smart partnerships.
We achieved Group revenues of £14.0m (H1 FY 2022: £12.6m), whilst at the
same time increasing investment in the business.
At our FY 2022 results, I stated that the Board and I believed we were
embarking on a transformational growth opportunity based on three key reasons:
- The customer and partner credibility we are gaining in the market
- The significantly growing market that we operate in
- The investment we have made in our market leading software platform
During the first half of FY 2023, these reasons have become even more
apparent.
Customer and partner credibility
We have achieved significant wins with new customers including HS2, a major
European Aerospace company, the first win with the State of New York and a
framework contract with the Eastern Transportation Coalition. Post period end,
we secured our eighth NG911 competitive contract with the State of Arkansas.
These new clients provide us with secure long-term levels of ARR and they
provide excellent references and opportunities to increase revenues within
these accounts.
Our relationship with key partners continues to expand and during the period
we have signed a teaming agreement (delivery partnership) with CGI Inc., one
of the world's largest independent IT and business consulting services firms,
to be a strategic delivery partner on a five-year contract with the Home
Office. Whilst we have no current indication of the value of our element, the
total contract for CGI is initially valued at £95m. We have also started
working in partnership with ATOS, a global leader in digital transformation
and Rizing (now part of Wipro), a global SAP partner. The four-year contract
with the California Department of Transportation (Caltrans) was won in
conjunction with Rizing and is an indication that our strategic growth plan in
the US continues to bear fruit and our reputation within the largest
transportation system in the nation continues to strengthen.
Work on the large contracts secured in the previous financial year continue to
progress well, enabling us to strengthen our relationships with key partners
including the Geospatial Commission, QinetiQ and Atkins, adding to our
credibility in the market by working with large customers and partners.
Significantly growing market
We are global leaders in providing Location Master Data management and this
proposition is at the intersection of two global growing markets. Firstly, the
Geospatial Information Systems Market is currently worth US$10bn, which is
estimated to more than double by 2027 to US$21bn, and secondly, the mainstream
Master Data Management market, which is worth US$12bn but estimated to
quadruple by 2027 to US$47bn.
Despite the current macro-economic conditions, digital transformation, and the
growing need for better, more accurate and shareable data to support
infrastructure investment continues to drive demand for our solutions within
our target markets, being Utilities, Transport and Government, where we are
increasingly considered as specialists in this area. We are also continuing to
see significant budgets in these areas committed from governments globally.
Investment in our market leading software platform
We have continued to invest in our market leading platform including
investment in:
- Our core data management solutions such as our patented 1Integrate
rules engine and our cloud-enabled portal, 1Data Gateway, to improve the user
experience
- Our Esri based Business Applications such as 1Water and 1Telecomms
which are currently focused on the European market
- Our cloud platform ready for the launch of multi-tenancy cloud-based
solutions, which are still on track to launch before the end of H2 2023. This
includes Traffic Management Plan Automation (TMPA) in the UK and NG 9-1-1 in
the USA for the cities and the counties.
Growth strategy
UK
We have seen strong growth in the UK during the half, with the signing of our
first significant contract with HS2, to build a data validation gateway, which
has significant potential for further expansion. The total contract value over
the two years is £0.9m, with potential options to extend for a further two
years.
The gateway solution will enable HS2 to validate the quality, conformance and
design of construction-related data submitted by their Supply Chain, which in
turn will contribute to the efficiency and effective information delivery on
Europe's largest infrastructure project. This is a demonstration of 1Spatial's
increasing ability to secure larger contracts across our key geographies and
to design, deliver and implement large-scale critical systems.
We also signed a multi-year 1Integrate
(https://eur03.safelinks.protection.outlook.com/?url=https%3A%2F%2F1spatial.com%2Fproducts%2F1integrate%2F&data=05%7C01%7Candrew.fabian%401spatial.com%7C7aecf0a5e65343664a4308da9d848063%7C27170d82c2e7473fbdbf488cf747b269%7C0%7C0%7C637995489676990497%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C7000%7C%7C%7C&sdata=ZZgAc2x5%2FBsEi0aYGDVFv3rPDr79UxEv0vHpXsc6%2BZQ%3D&reserved=0)
call-off contract with the Department for Environment, Food and Rural
Affairs
(https://eur03.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.gov.uk%2Fgovernment%2Forganisations%2Fdepartment-for-environment-food-rural-affairs&data=05%7C01%7Candrew.fabian%401spatial.com%7C7aecf0a5e65343664a4308da9d848063%7C27170d82c2e7473fbdbf488cf747b269%7C0%7C0%7C637995489676990497%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C7000%7C%7C%7C&sdata=BdliX77K9iewZ5v0AC15YEACaUbIhG9f0O%2BRSZruUTA%3D&reserved=0)
(DEFRA). The contract enables DEFRA and its associates to license 1Integrate
and procure its data management implementation services through the enterprise
licence agreement on G-Cloud 12. DEFRA is responsible for improving and
protecting the environment and this contract complements our relationship of
over ten years in supporting and developing its data management, data
governance and data quality capabilities.
We are also making good progress on implementing the solutions on the two
major contracts (UK Government contract and NUAR) signed in FY 2022, and these
are expected to provide growth opportunities in the future.
Successes such as these, and the considerable size of our sales pipeline, give
us the confidence to continue to invest in the business, to ensure we have the
right structure to deliver on the growing opportunity as we move into the
second half of the year and beyond.
Europe
We continue to push the European market to transition from the perpetual
licence model to the term licences structure but this is not as well advanced
as in the UK and US. We signed a major five-year contract with a European
aerospace company with a total value over the five years of approximately
€3m including around €0.7m implementation services and around €0.6m per
annum (for four years commencing in FY 2024) of software licence and managed
services revenue. The timing of closing this contract combined with fewer
recurring term licences impacted the revenue in the period which grew at 2% at
constant currency.
US
The US is a key geography for our growth strategy to provide scalability. For
example, there is only one department of transport (DOT) in the UK whereas
there are 50 in the US, presenting a major opportunity for the business going
forward. The success of our strategy can be seen in our growing profile in
North America. During the first half, we successfully sold and implemented
1Integrate and 1Data Gateway in a number of clients, both new and expanding on
existing contracts, building our annual recurring revenue from our repeatable
solutions such as NG 9-1-1.
Notable new customer wins in the US in the period include:
· US$1.4m expansion contract with the State of California over four
years - secured in partnership with Rizing (now Wipro), a global SAP partner.
The State of California is an existing client of 1Spatial, having already
selected 1Spatial's Next Generation 9-1-1 solution.
· First contract with University of Maryland CATT Labs - Five-year
contract with initial value of around $0.6m, which will be recognised over the
five-year period, adding to the Group's annual recurring revenue.
· First contract with the State of New York - for various proof of
concept projects using 1Integrate and 1Data Gateway.
· First contract with the State of Arkansas - for NG 9-1-1, a
seven-year contract for $1.2m over the period and now the eighth US State to
select the solution.
Post-period end we also closed the following sales:
· First contract with the Eastern Transportation Coalition, a
partnership of 18 US east coast States and Washington DC, which has secured
its first contract through the marketplace, for US$400k with Massachusetts
Department of Transportation. The total potential contract value for
conflation within this ETC framework agreement is estimated to be up to US$15m
over eight years.
· First contract with the State of Indiana - for various proof of
concept projects using 1Integrate and 1Data Gateway.
People
At the heart of our growth pillars is our 1Team, a world class, committed team
of people who embody our values of We Respect, We Innovate, We Collaborate, We
Trust and We Care.
During the period we were delighted to have been certified as a Most Loved
Workplace®, backed by Best Practice Institute (BPI) research and analysis.
This was based on our scores on their Love of Workplace Index™, which
surveys employees on various elements around employee satisfaction and
sentiment, including the level of respect, collaboration, support, and sense
of belonging they feel inside the Company.
Communication with our staff and maintaining wellbeing is crucial, especially
in the current macroeconomic environment. We have regular global company
meetings and actively promote the importance of mental health. As part of our
commitment to their well-being, we continue to roll out initiatives such as
mental health awareness training, internal events and initiatives to encourage
staff to take time out from their working day and have appointed mental
health first aiders. We kicked off our annual wellbeing month in September
2022 and we are planning a range of activities including an employee
volunteering community clean-up day in the UK.
We are always looking at ways to ensure equality and diversity across our
company and an inclusive, welcoming working environment for everyone. Over
the past year, we have created global initiatives to celebrate: International
Women's Day, World Food Day, Diwali, Thanksgiving, Mental Health Awareness
Week, Earth Day and Health and Happiness month.
The teams continue to show ingenuity and commitment day-to-day, for which the
Board and I thank them wholeheartedly. Their ability to innovate continually
whilst delivering the highest levels of customer satisfaction means that our
growth pillars are built on very secure foundations.
ESG
We made good progress with the development of our ESG strategy. In March we
kicked off a stakeholder materiality assessment to determine the priority
areas of our ESG strategy. We consulted with more than 150 stakeholders during
this process, consisting of customers, employees, board members and senior
management (representing 'the business'), shareholders, partners and
suppliers. During this process, we identified 13 issues that were considered
of high importance. These 13 issues will be consolidated into key focus areas,
linked to specific targets and objectives. These objectives will be developed
through industry benchmarking, peer review and business consultations. We aim
to complete this process during this financial year and expect to report back
on our ESG strategy in our 2023 Annual Report.
Strategic priorities for H2 2023
Our focus remains on the three pillars of our growth strategy and we continue
to invest in order to position the business to take advantage of the huge
opportunity ahead.
The expansion of the 1Spatial Cloud platform will be a key strategic focus for
the Group and the planned launch of our multi-tenancy SaaS based solutions
later in H2 2023, including NG911 and Traffic Management Plan, will enable us
to increase our addressable market and existing customer demand for web-based
access to our solutions.
We will continue to grow our pipeline and invest in the business and its
people to support our expanded customer base. In terms of our financial goals,
the Group remains focused on increased revenue growth, underpinned by growing
annual recurring revenue and to continue our trajectory of increased
profitability at adjusted EBITDA level and higher cash generation over the
long-term.
Current trading and outlook
We believe we are just at the start of the transformation of our market.
Evidenced by the number and size of wins in this half, we sit right at the
heart of the changes across multiple sectors.
With a strong sales pipeline in all regions, positive market landscape and the
investments we continue to make in our technology, we are well-positioned to
capitalise on the expanding market opportunity. Our expanding partner networks
and growing levels of recurring revenue will enable us to continue to execute
successfully on the remainder of our three-year growth plan.
Trading in the second half is in line with Board expectations with several new
contracts secured. While cognisant of inflationary cost pressures, the Board
remains confident in delivering results for FY 2023 in line with management's
expectations.
Claire Milverton
Chief Executive Officer
Financial performance
Summary
The Group delivered a solid financial performance in the period, with further
growth in revenues, ARR and adjusted EBITDA profit levels, while increasing
its spending on innovation, pre-sales and delivery capacity in order to
continue to secure higher value longer-term recurring contracts.
Revenue
Group revenue increased by 11% to £14.0m (11% at constant currency) from
£12.6m in H1 2022. The business strategy is to grow recurring revenue from
repeatable business solutions on longer-term contracts, including recurring
term licences, rather than one-off perpetual licences. In FY 2021, the Board
approved a three-year revenue growth plan, with increased planned spending on
technology, sales and delivery capacity in order to effect a step change in
revenue growth. As a result of this focus, recurring revenue in the period
increased by 18% to £6.6m from £5.6m and the Group achieved organic growth
in revenue of 11%. The revenue by type is shown below:
Revenue by type
H1 2023 H1 2022 % change
Recurring revenue * 6.62 5.63 18%
Services 6.44 5.93 9%
Revenue (excluding perpetual licences) 13.06 11.56 13%
Perpetual licences 0.97 1.08 (10%)
Total revenue 14.03 12.64 11%
* Recurring revenue comprises term licences and support and maintenance
revenue.
Growth in term licence ARR
We are growing term licences from our proprietary solutions but we also sell
third-party products on a standalone basis or to support our own solution
sales. In the twelve-month period to 31 July 2022, we have increased the
annualised value of term licences by 115% overall (141% for 1Spatial
solutions), as shown in the table below.
H1 2023 H1 2022* Growth
ARR for term licences - owned 4.07 1.69 141%
ARR for term licences - third party 1.09 0.71 54%
ARR for term licences - total 5.16 2.40 115%
* ARR for H1 2022 has been restated at constant fx.
Annualised Recurring Revenue
The Annualised Recurring Revenue ("ARR") (annualised value at the period-end
of committed recurring contracts for term licences and support and
maintenance) increased by 29% (at constant currency) from £11.8m at 31 July
2021 to £15.2m as at 31 July 2022. The growth rates varied by region as shown
in the table below with all regions growing total ARR and the UK growing at
the fastest rate of 58%. The US and Australia also had excellent growth
rates. Europe's ARR growth rate was modest at 6% reflecting a slower
transition to recurring term licences in the region. The overall renewal rate
remains high at around 94%.
ARR by region
H1 2023 H1 2022* Growth
UK/Ireland 6.30 4.00 58%
Europe 5.09 4.82 6%
US 2.09 1.65 27%
Australia 1.72 1.32 30%
Total ARR 15.20 11.79 29%
* ARR for H1 2022 has been restated at constant fx.
Committed services revenue
The level of committed services revenue, which has reduced since the start of
the year as services revenue on our major projects won last year is
recognised, nevertheless remains historically high at £11.6m 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 under a SaaS model, there
is an increased level of revenue visibility, which allows the Board to
continue to invest with confidence.
Regional revenue
Revenue by region is shown in the table below:
Regional revenue
H1 2023 H1 2022 Growth % Growth % (constant fx)
UK/Ireland 5.62 4.45 26% 26%
Europe 5.31 5.31 0% 2%
US 1.80 1.55 16% 6%
Australia 1.30 1.33 (2)% (5)%
14.03 12.64 11% 11%
It was pleasing to achieve double-digit revenue growth overall, which was
driven mainly by the strong growth in the UK and US following excellent
contract wins last year, offset by the results in Europe and Australia. In
Europe, revenue was impacted by the timing of closing a major contract and a
slower transition to a recurring term licence model, resulting in only modest
growth of 2% at constant currency. In Australia, where revenue is primarily
derived from third party software deals, we experienced more competitive
pricing pressure, combined with the transition from perpetual to term
licences, which resulted in a 5% fall in revenue at constant currency. Going
forward, all regions will continue to focus on increasing their sales of
higher margin owned technology sold as term licences.
Gross profit margin
As we moved into a higher inflationary environment, the business increased its
pricing and charge out rates to offset actual and expected cost increases.
However, the gross margin reduced to 50% compared to 51% and this was partly
due to the timing impact of cost increases being ahead of the effect of
increased prices.
Cost management continues to be an important focus during FY 2023, although
the business is incurring some planned increases in costs in order to support
future revenue growth. The management team decided to increase employee
salaries at a higher level than in the past with the aim of retaining and
motivating our skilled team and this had an impact on gross margin and EBITDA
margin. Going forward, the management team are focused on driving improvements
to the gross margin levels, through revenue growth of higher margin term
licences.
Adjusted EBITDA
The adjusted EBITDA increased by 10% to £2.0m from £1.8m in the prior
period. The EBITDA margin was slightly lower than the prior period at 14.4%
(H1 2022: 14.5%).
Operating profit and profit before tax
The Group recorded an operating profit of £0.4m compared to a loss of £0.2m
in the prior year, continuing the improving financial trend of the business.
Profit before tax was £0.3m (H1 2022: loss before tax £0.3m).
Taxation
The tax charge for the period was £0.1m (H1 2022: credit of £0.1m).
Balance sheet
The Group's net assets increased to £15.7m at 31 July 2022 (H1 2022:
£14.6m). Trade and other receivables increased year on year to £12.3m (H1
2022: £9.4m), mainly due to increased accrued income at period end following
recent contract wins.
Cash flow
Operating cash flow inflow was £1.3m (H1 2022: £0.6m). This was higher than
the prior year primarily due to the reversal of some Covid support and the
cash impact of the European integration costs incurred in H1 FY 2022. Cash
flow has also been impacted by the requirement for higher working capital on
larger projects and the planned increase in R&D expenditure, which is
incurred ahead of expected higher future licence revenue. Whilst the free cash
flow* was negative in H1 2023 (H2 is typically stronger for cash generation
than H1), there was nevertheless an improvement year on year, even after
increased R&D spending, as shown in the table below:
Free cash flow H1 2023 H1 2022
£'000 £'000
Cash generated from operations 1,343 646
Net interest paid (75) (105)
Net tax paid (26) -
Expenditure on product development and intellectual property capitalised (1,563) (1,291)
Purchase of property, plant and equipment (104) (88)
Lease payments (454) (580)
Free cash flow * (879) (1,418)
* Free cash flow is defined as net increase/(decrease) in cash for the year
before cash flows from the acquisition of subsidiaries, cash flows from new
borrowings and repayments of borrowings and cash flow from new share issue.
After the period end, £0.2m has been received in relation to R&D tax
credit from HMRC. We also paid earlier in September 2022, €408k related to
the remaining deferred consideration on the GI acquisition completed in 2019.
Investment in R&D
Development costs capitalised in the period amounted to £1.6m (H1 2022:
£1.3m). Amortisation of development costs was £0.7m (H1 2022: £0.9m).
The increased R&D expenditure primarily relates to the investment in
cloud-based SaaS solutions.
Financing
As the number of higher value sales contracts has increased, the Board decided
that it would be prudent to put in place a £3m Revolving Credit Facility to
ensure that the Group's working capital position is strengthened. The
resulting secured facility, arranged in June 2022, is committed for three
years and priced on competitive terms. As at 31 July 2022 the facility was
undrawn.
The Group repaid as scheduled £0.2m (H1 2022: £0.2m) in relation to its
existing long-term bank loans. At the period-end the total loans outstanding
were £2.2m (H1 2022: £2.7m). With a gross cash position of £4.5m at 31 July
2022 (H1 2022: £5.5m) and with a growing order backlog and pipeline, and with
the revolving credit facility in place, the business is in a strong financial
position, which gives the Board the confidence to continue to invest.
Going forward, the Board and management teams are focused on increasing
revenues, in particular recurring revenues, whilst improving the Group's
profitability and cash generation.
Andrew Fabian
Chief Financial Officer
Condensed consolidated statement of comprehensive income
Six months ended 31 July 2022
Unaudited Audited Unaudited
Six months ended Year ended Six months ended
31 July 2022 31 July 2021
31 January 2022
Note £'000 £'000 £'000
Revenue 3 14,028 27,027 12,637
Cost of sales (7,078) (13,078) (6,237)
Gross profit 6,950 13,949 6,400
Administrative expenses (6,589) (13,534) (6,556)
361 415 (156)
Adjusted EBITDA* 2,017 4,182 1,830
Less: depreciation (105) (198) (99)
Less: depreciation on right of use asset (491) (989) (503)
Less: amortisation and impairment of intangible assets 7 (915) (2,254) (1,184)
Less: share-based payment charge (145) (326) (200)
Operating profit/(loss) 361 415 (156)
Finance income 7 14 5
Finance cost (101) (209) (110)
Net finance cost (94) (195) (105)
Profit/(loss) before tax 267 220 (261)
Income tax (charge)/credit 4 (60) (43) 61
Profit/(loss) for the period 207 177 (200)
Other comprehensive income
Items that may subsequently be reclassified to profit or loss:
Actuarial gains/(losses) arising on defined benefit pension, net of tax - 113 -
Exchange differences on translating foreign operations 210 (246) (166)
Other comprehensive income/(loss) for the period, net of tax 417 (133) (166)
Total comprehensive gain/(loss) for the period attributable to the equity 417 44 (366)
shareholders of the Parent
* 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
Profit/(loss) per ordinary share from continuing operations attributable to
the equity shareholders of the Parent during the period (expressed in pence
per ordinary share):
Unaudited Audited Unaudited
Six months ended Year ended Six months ended
31 July 2022 31 January 2022 31 July 2021
Basic earnings/(loss) per share 5 0.2 0.2 (0.2)
Diluted earnings/(loss) per share 5 0.2 0.2 (0.2)
Condensed consolidated statement of financial position
As at 31 July 2022
Unaudited Audited Unaudited
As at As at As at
31 July 2022 31 January 2022 31 July 2021
Note £'000 £'000 £'000
Assets
Non-current assets
Intangible assets including goodwill 7 15,940 15,003 14,994
Property, plant and equipment 376 350 376
Right-of-use assets 2,000 1,747 2,144
Total non-current assets 18,316 17,100 17,514
Current assets
Trade and other receivables 8 12,305 12,271 9,353
Current income tax receivable 179 124 279
Cash and cash equivalents 9 4,529 5,623 5,493
Total current assets 17,013 18,018 15,125
Total assets 35,329 35,118 32,639
Liabilities
Current liabilities
Bank borrowings 9 (643) (531) (468)
Trade and other payables 10 (12,741) (13,284) (10,469)
Lease liabilities (621) (748) (847)
Deferred consideration (370) (340) -
Total current liabilities (14,375) (14,903) (11,784)
Non-current liabilities
Bank borrowings 9 (1,562) (1,861) (2,217)
Lease liabilities (1,348) (976) (1,276)
Deferred consideration - (27) (376)
Defined benefit pension obligation (1,319) (1,276) (1,594)
Deferred tax (1,058) (970) (823)
Total non-current liabilities (5,287) (5,110) (6,286)
Total liabilities (19,662) (20,013) (18,070)
Net assets 15,667 15,105 14,569
Share capital and reserves
Share capital 11 20,150 20,150 20,150
Share premium account 30,479 30,479 30,479
Own shares held (303) (303) (303)
Equity-settled employee benefits reserve 4,075 3,930 3,804
Merger reserve 16,465 16,465 16,465
Reverse acquisition reserve (11,584) (11,584) (11,584)
Currency translation reserve 296 86 166
Accumulated losses (43,434) (43,641) (44,131)
Purchase of non-controlling interest reserves (477) (477) (477)
Equity attributable to shareholders of the Parent company 15,667 15,105 14,569
Total equity 15,667 15,105 14,569
Condensed consolidated statement of changes in equity
Period ended 31 July 2022
Share capital Share premium Own shares held Equity-settled employee benefits reserve Merger reserve Reverse acquisition reserve Currency translation reserve Purchase of non-controlling interest reserve Accumulated losses
account
£'000 Total
equity
Balance at 31 January 2021 (Audited) 20,150 30,479 (303) 3,604 16,465 (11,584) 332 (477) (43,931) 14,735
Comprehensive income/(loss)
Profit for the year - - - - - - - - 177 177
Other comprehensive income/(loss)
Actuarial gains arising on defined benefit pension - - - - - - - - 113 113
Exchange differences on translating foreign operations - - - - - - (246) - - (246)
Total other comprehensive (loss)/income - - - - - - (246) - 113 (133)
Total comprehensive (loss)/income - - - - - - (246) - 290 44
Transactions with owners recognised directly in equity
Recognition of share-based payments - - - 326 - - - - - 326
- - - 326 - - - - - 326
20,150 30,479 (303) 3,930 16,465 (11,584) 86 (477) (43,641) 15,105
Balance at 31 January 2022 (Audited)
Comprehensive income/(loss)
Profit for the period - - - - - - - - 207 207
Other comprehensive income
Exchange differences on translating foreign operations - - - - - - 210 - - 210
Total other comprehensive income - - - - - - 210 - 207 417
Total comprehensive income - - - - - - 210 - 207 417
Transactions with owners recognised directly in equity
Recognition of share-based payments - - - 145 - - - - - 145
- - - - - - - - - -
20,150 30,479 (303) 4,075 16,465 (11,584) 296 (477) (43,434) 15,667
Balance at 31 July 2022 (Unaudited)
Share capital Share premium Own shares held Equity-settled employee benefits reserve Merger reserve Reverse acquisition reserve Currency translation reserve Accumulated losses
account
£'000 Purchase of non-controlling interest reserve Total
equity
Balance at 31 January 2021 (Audited) 20,150 30,479 (303) 3,604 16,465 (11,584) 332 (477) (43,931) 14,735
Comprehensive loss
Loss for the period - - - - - - - - (200) (200)
Other comprehensive (loss)/income
Exchange differences on translating foreign operations - - - - - - (166) - - (166)
Total other comprehensive (loss)/income - - - - - - (166) - (200) (366)
Total comprehensive (loss)/income - - - - - - (166) - (200) (366)
Transactions with owners recognised directly in equity
Recognition of share-based payments - - - 200 - - - - - 200
- - - 200 - - - - - 200
20,150 30,479 (303) 3,804 16,465 (11,584) 166 (477) (44,131) 14,569
Balance at 31 July 2021 (Unaudited)
Condensed consolidated statement of cash flows
Period ended 31 July 2022
Unaudited Audited Unaudited
Six months ended Year ended Six months ended
31 July 2022 31 January 2022 31 July 2021
Note £'000 £'000 £'000
Cash flows from operating activities
Cash generated from operations 9 1,343 2,497 646
Interest received 6 12 5
Interest paid (81) (146) (110)
Tax paid (26) (24) -
Tax received - 200 -
Net cash from operating activities 1,242 2,539 541
Cash flows from investing activities
Purchase of property, plant and equipment (104) (164) (88)
Expenditure on product development and intellectual property capitalised (1,563) (2,449) (1,291)
Net cash used in investing activities (1,667) (2,613) (1,379)
Cash flows from financing activities
Repayment of borrowings (206) (423) (218)
Repayment of obligations under leases (454) (1,088) (580)
Net cash used in financing activities (660) (1,511) (798)
Net decrease in cash and cash equivalents (1,085) (1,585) (1,636)
Cash and cash equivalents at start of period 5,623 7,278 7,278
(9) (70) (149)
Effects of foreign exchange on cash and cash equivalents
Cash and cash equivalents at end of period 9 4,529 5,623 5,493
Notes to the Interim Financial Statements
1. Principal activity
1Spatial plc is a public limited company which is listed on the AIM London
Stock Exchange and is incorporated and domiciled in the UK. The address of
the registered office is Tennyson House, Cambridge Business Park, Cowley Road,
Cambridge, CB4 0WZ. The registered number of the Company is 5429800.
The principal activity of the Group is the development and sale of software
along with related consultancy and support.
2. Basis of preparation
This condensed consolidated interim financial report for the half-year
reporting period ended 31 July 2022 has been prepared in accordance with UK
adopted IAS 34 Interim Financial Reporting. The interim report does not
include all the information required for a complete set of IFRS financial
statements. Accordingly, this report is to be read in conjunction with the
annual report for the year ended 31 January 2022 and any public announcements
made by 1Spatial Plc during the interim reporting period. The annual financial
statements of the Group were prepared in accordance UK adopted international
accounting standards.
The accounting policies adopted in the preparation of the interim financial
statements are consistent with those followed in the preparation of the
Group's consolidated financial statements as at and for the year ended 31
January 2022.The Group has not early adopted any standard, interpretation or
amendment that has been issued but is not yet effective.
Several amendments and interpretations apply for the first time in 2022, but
do not have a material impact on the interim financial statements of the
Group.
The financial information for the six months ended 31 July 2022 and 31 July
2021 is neither audited nor reviewed and does not constitute statutory
financial statements within the meaning of section 434(3) of the Companies Act
2006 for 1Spatial plc or for any of the entities comprising the 1Spatial
Group. Statutory financial statements for the preceding financial year ended
31 January 2022 were filed with the Registrar and included an unqualified
auditors' report.
After making enquiries, the Directors have a reasonable expectation that the
Company and the Group have adequate resources to continue in operational
existence for the foreseeable future. Accordingly, they continue to adopt the
going concern basis in preparing the half-yearly condensed consolidated
financial statements.
These interim financial statements were authorised for issue by the Company's
Board of Directors on 27 September 2022.
3. Revenue
The following table provides an analysis of the Group's revenue by type:
Revenue by type
H1 2023 H1 2022
£000 £000
Term licences - own 1.14 0.61 87%
Term licences - third party 0.55 0.40 38%
Term licences - total 1.69 1.01 67%
Support & maintenance 4.93 4.62 7%
Recurring revenue 6.62 5.63 18%
Services 6.44 5.93 9%
Perpetual licences - own 0.27 0.31 (13%)
Perpetual licences - third party 0.70 0.77 (9%)
Perpetual licences - total 0.97 1.08 (10%)
Total revenue 14.03 12.64 11%
Percentage of recurring revenue 47% 45%
4. Taxation
The tax charge on the result for the six months ended 31 July 2022 is based on
the estimated tax rates in the jurisdictions in which the Group operates for
the year ending 31 January 2023.
5. Earnings/(loss) per share
Basic earnings/(loss) per share is calculated by dividing the profit/(loss)
attributable to equity holders of the Company by the weighted average number
of ordinary shares in issue during the period plus the €0.03m deferred
shares to be satisfied in March 2023.
Unaudited Audited Unaudited
Six months ended Six months ended
31 July 2022 Year ended 31 July 2021
31 January 2022
£'000 £'000 £'000
Profit/(loss) attributable to equity holders of the Parent 207 177 (200)
Number Number Number
000s 000s 000s
Ordinary shares with voting rights 110,486 110,486 110,486
Deferred consideration payable in shares 56 58 72
Basic weighted average number of ordinary shares 110,542 110,544 110,558
Impact of share options/LTIPs 3,890 4,008 -
Diluted weighted average number of ordinary shares 114,432 114,552 110,558
Unaudited Audited Unaudited
Six months ended Six months ended
31 July 2022 Year ended 31 July 2021
31 January 2022
Pence Pence Pence
Basic earnings/(loss) per share 0.2 0.2 (0.2)
Diluted earnings/(loss) per share 0.2 0.2 (0.2)
There is no material difference between basic earnings per share and diluted
earnings per share.
For H1 FY 2022, basic loss per share and diluted loss per share are the same
because the options are anti-dilutive. Therefore, they have been excluded from
the calculation of diluted weighted average number of ordinary shares.
6. Dividends
No dividend is proposed for the six months ended 31 July 2022 (31 January
2022: nil; 31 July 2021: nil).
7. Intangible assets including goodwill
Goodwill Brands Customers and related contracts Software Development costs Intellectual property Total
£'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 - - - 7 1,556 - 1,563
Effect of foreign exchange 284 2 28 27 106 - 447
At 31 July 2022 17,478 452 4,575 6,608 22,890 72 52,075
Accumulated impairment and amortisation
At 1 February 2022 11,330 291 3,640 4,958 14,826 17 35,062
Amortisation - 11 73 103 725 3 915
Effect of foreign exchange 23 - 20 17 98 - 158
At 31 July 2022 11,353 302 3,733 5,078 15,649 20 36,135
Net book amount at 6,125 150 842 1,530 7,241 52 15,940
31 July 2022
Goodwill Brands Customers and related contracts Software Development costs Intellectual property Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Cost
At 1 February 2021 17,447 464 4,764 6,757 19,285 72 48,789
Additions - - - 22 1,269 - 1,291
Effect of foreign exchange (214) (8) (130) (125) (285) - (762)
At 31 July 2021 17,233 456 4,634 6,654 20,269 72 49,318
Accumulated impairment and amortisation
At 1 February 2021 11,548 252 3,641 4,696 13,454 11 33,602
Amortisation - 23 79 223 856 3 1,184
Effect of foreign exchange (131) (2) (90) (56) (183) - (462)
At 31 July 2021 11,417 273 3,630 4,863 14,127 14 34,324
Net book amount at 5,816 183 1,004 1,791 6,142 58 14,994
31 July 2021
Goodwill Brands Customers and related contracts Software Development costs Intellectual property Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Cost
At 1 February 2021 17,447 464 4,764 6,757 19,285 72 48,789
Additions - - - 26 2,423 - 2,449
Effect of foreign exchange (253) (14) (217) (209) (480) - (1,173)
At 31 January 2022 17,194 450 4,547 6,574 21,228 72 50,065
Accumulated impairment and amortisation
At 1 February 2021 11,548 252 3,641 4,696 13,454 11 33,602
Amortisation - 42 153 360 1,693 6 2,254
Effect of foreign exchange (218) (3) (154) (98) (321) - (794)
At 31 January 2022 11,330 291 3,640 4,958 14,826 17 35,062
Net book amount at 5,864 159 907 1,616 6,402 55 15,003
31 January 2022
Net book amount at 5,899 212 1,123 2,061 5,831 61 15,187
31 January 2021
8. Trade and other receivables
As at As at As at
31 July 2022 31 January 2022 31 July 2021
Current £'000 £'000 £'000
Trade receivables 2,701 4,895 2,858
Less: provision for impairment of trade receivables (25) (25) (59)
2,676 4,870 2,799
Other receivables 1,618 1,413 1,573
Prepayments and accrued income 8,011 5,988 4,981
12,305 12,271 9,353
9. Notes to the condensed consolidated statement of cash flows
a) Cash used in operations
Unaudited Audited Unaudited
Six months ended Six months ended
31 July 2022 Year ended 31 July 2021
31 January 2022
£'000 £'000 £'000
Profit/(loss) before tax 267 220 (261)
Adjustments for:
Net finance cost 94 195 105
Depreciation 596 1,187 602
Amortisation of acquired intangibles 190 561 328
Amortisation and impairment of development costs 725 1,693 856
Share-based payment charge 145 326 200
Decrease/(increase) in trade and other receivables 216 (1,784) 1,241
(Decrease)/increase in trade and other payables (668) 206 (2,527)
Increase/(decrease) in defined benefit pension obligation 24 (108) 43
Net foreign exchange movement (246) 1 59
Cash from operations 1,343 2,497 646
b) Reconciliation of net cash flow to movement in net funds
Unaudited Audited Unaudited
As at As at 31 January 2022 As at
31 July 2022 31 July 2021
£'000 £'000 £'000
Decrease in cash in the period (1,085) (1,585) (1,636)
Changes resulting from cash flows (1,085) (1,585) (1,636)
Net cash outflow in respect of borrowings repaid 206 423 218
Effect of foreign exchange (28) 127 (40)
Change in net funds (907) (1,035) (1,458)
Net funds at beginning of period 3,231 4,266 4,266
Net funds at end of period 2,324 3,231 2,808
Analysis of net funds
Cash and cash equivalents classified as:
Current assets 4,529 5,623 5,493
Bank and other loans (2,205) (2,392) (2,685)
Net funds at end of period 2,324 3,231 2,808
Net funds is defined as cash and cash equivalents net of bank loans.
10. Trade and other payables
As at As at As at
31 July 2022 31 January 2022 31 July 2021
Current £'000 £'000 £'000
Trade payables 2,242 2,227 1,789
Other taxation and social security 2,993 2,924 2,792
Other payables 492 534 430
Accrued liabilities 1,651 1,987 1,280
Deferred income 5,363 5,612 4,178
12,741 13,284 10,469
11. Share capital
As at As at As at
31 July 2022 31 January 2022 31 July 2021
£'000 £'000 £'000
Allotted, called up and fully paid
110,805,795 (H1 and FY 2022: 110,805,795) ordinary shares of 10p each 11,082 11,082 11,082
226,699,878 (H1 and FY 2022: 226,699,878) deferred shares of 4p each 9,068 9,068 9,068
20,150 20,150 20,150
There are 110,805,795 ordinary shares of 10p in issue, of which 319,635
ordinary shares are held in treasury. Consequently, the total number of voting
rights is 110,486,160.
The deferred shares of 4p each do not carry voting rights or a right to
receive a dividend. Accordingly, the deferred shares will have no economic
value.
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