REG - 1Spatial Plc - Interim Results
10/10/2023 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20231010:nRSJ4840Pa&default-theme=true
RNS Number : 4840P 1Spatial Plc 10 October 2023
10 October 2023
1Spatial plc (AIM: SPA)
("1Spatial", the "Group" or the "Company")
Interim Results for the six-month period ended 31 July 2023 ("H1 2024")
Delivering significant 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 2023.
H1 2024 highlights
· Group revenue up 11% to £15.5m driven by:
o 24% increase in recurring revenue to £8.2m (H1 2023: £6.6m), representing
53% of total revenue (H1 2023: 47%)
o 100% increase in Term Licences revenue to £3.4m (H1 2023: £1.7m), including
the first contribution from our newly launched SaaS offerings
o Continued strong progress in the US, with US revenue increasing 27% in the
period (24% at constant currency) (H1 2023: 16%)
· Group ARR growth of 10% with a Term Licence ARR growth of 27%
· Group gross profit margin increase from 50% to 52% driven by increases in
revenue across the Group
· Adjusted EBITDA of £1.7m down 16% reflecting investment in sales resource,
inflationary cost increases and foreign exchange movements
· Approximately £1m of annualised non-revenue generating costs taken out of the
business in H1 primarily in Europe
· Board confident in achieving results for FY 2024 in line with market
expectations
Financial highlights
Half-year to 31 July 23 Half-year to 31 July 22
Growth
£m £m %
Group revenue 15.5 14.0 +11
Recurring revenue 8.2 6.6 +24
Term licences revenue 3.4 1.7 +104
Group Total ARR 16.7 15.2 +10
Term licences ARR 6.6 5.2 +27
Group gross profit 8.0 7.0 +16
Group gross profit margin (%) 52 50 +2
Adjusted EBITDA 1.7 2.0 (16)
Adjusted EBITDA margin (%) 11 14 (3pp)
Operating (loss)/profit (0.3) 0.4 n/a
(Loss)/profit before tax (0.5) 0.3 n/a
(Loss)/earnings per share - basic and diluted (p) (0.5) 0.2 n/a
Net cash 0.5 2.3 (77)
Group operational highlights
Enterprise business
· Secured first contract with the State of Oregon, bringing the number of US
States as customers to 18, each with significant expansion potential
· Expansion deals with the California Department of Transportation (Caltrans),
US Federal Highways, Ordnance Survey Great Britain, Land and Property Services
and a major European aerospace company
· Three new water customers: Yorkshire Water Services in the UK, Société
Walloon Des Eaux in Belgium and Hunter Water in Australia
· Successful launch of the first phase of the NUAR Project ('National
Underground Asset Register') on 5 April 2023
· Significant increase in sales pipeline across our territories with conversion
of these opportunities expected in H2 and into the new financial year
SaaS Solutions
· The launch of cloud platform and "light version" of our NG9-1-1 solution
suitable for counties and cities within each US state, a US$345m ARR market
opportunity, five contract wins to date
· 1Streetworks, automating traffic management plans, a £400m ARR market
opportunity, launched with five trials ongoing, first material contract
expected to be signed imminently onto an annual deal
Outlook
· High level of renewals in the second half of the year and healthy pipeline
driving expected improvement in performance in H2
· Trading in the second half has started positively and the Board remains
confident in delivering results for FY 2024 in line with expectations
Commenting on the results, 1Spatial CEO, Claire Milverton, said:
"The Group's achievements over the past six months demonstrate that our
investments in our product and business development teams are translating into
growth. We envisage that these investments will lead to further growth
throughout the remainder of the financial year and into next year. Our ability
to secure and deliver significant contracts with blue-chip customers points to
our potential as we continue to build a world class geospatial business with
strong recurring revenues.
"Over the last five years we have invested significant financial resources
into developing our SaaS solutions. With the successful launch of two of these
solutions in the first half of FY2024, we have opened up a transformational
opportunity with a significant and growing pipeline. We look to the future
with confidence."
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
Alma PR 020 3405 0205
Caroline Forde / Hannah Campbell 1spatial@almapr.co.uk
Alternative Performance Measures ('APMs')
The Group uses certain Alternative Performance Measures to enable the users of
the Group's financial statements to understand and evaluate the performance of
the Group consistently over different reporting periods. APMs are non-GAAP
company specific measures. As these are non-GAAP measures, they should not be
considered as replacements for IFRS measures. The Group's definition of
non-GAAP measures may not be comparable to other similarly titled measures
reported by other companies. A description of the measures set out above is
included below with a reconciliation to the closest GAAP measure included in
the notes to the consolidated condensed interim financial report.
APM Explanation of APM
Recurring Revenue (s) Recurring Revenue is the value of committed recurring contracts for term
licences and support & maintenance recorded in the year.
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 &
maintenance.
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.
Net cash Net cash is gross cash less bank borrowings.
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
We are very pleased with the performance of the Group's enterprise business in
the first six months of the year, most notably delivering 11% revenue growth
and 27% growth in term licence ARR as we secured new wins and delivered on
milestones of significant contracts signed in previous years. These new
customer wins build on the secure, long-term levels of ARR we have generated
and provide significant opportunities to expand and drive incremental revenues
in the future.
The growing revenue generated by our enterprise business in recent years has
provided funding for the development of two high margin SaaS solutions
launched at the end of calendar 2022, 1Streetworks and a SaaS version of our
NG9-1-1 solution. These applications present a transformational growth
opportunity in the medium term and are a major focus for the Group.
SaaS sales have already exceeded our expectations with our first customer
contracts signed in the period. In the US, we signed five new contracts for
the SaaS version of our NG9-1-1 solution, targeting US counties. This rapid
adoption of the product demonstrates the value offered to the customer and
provides the Group with an opportunity to rapidly scale up into a substantial
market opportunity.
In the UK, we secured five customers for paid for trials of 1Streetworks. With
the utilities sector being a primary target vertical for this product, we are
delighted to report that, following successful completion of a trial, a large
utility provider is in the final stages of contracting an annual licence. This
independent commercial validation provides the Company with a case study that
management can use to accelerate market adoption over the next 12 months. The
speed of conversion from trial to annual contract demonstrates the relevance
of our new SaaS product to this sector.
While we have seen significant growth in revenue and gross profit contribution
compared to the previous year, the investment we made in our sales function
together with inflationary increases and adverse foreign exchange movements
have diluted EBITDA margins and resulted in a decrease of approximately £0.3m
in EBITDA. While the increases in operating costs were in line with forecasts,
the management team has taken steps to address the cost base in Europe by
removing £1m annualised costs from non-revenue generating activities. As a
larger proportion of the term licence renewals are weighted towards the second
half of the year management remains confident of delivering material cash and
EBITDA generation before the end of the financial year.
The Group remains focussed on investing in and developing our cloud platform
to set our SaaS businesses up for success. We also see continuing investment
in our enterprise business as critical to our growth strategy. Digital
transformation, and the growing need for better, more accurate and shareable
data to support infrastructure investment continues to drive demand for our
solutions across our target markets, being Government, Utilities and
Transport.
The Group has a strong order book, a growing recurring revenue stream and a
strong sales pipeline for its enterprise business as well as a potentially
transformational pipeline for its SaaS based solutions, underpinning the
Board's confidence in the Group's ability to deliver against its growth
strategy and achieve results for FY 2024 in line with expectations.
Successful launch and first sales of SaaS solutions
The expansion of the 1Spatial Cloud platform includes our multi-tenancy SaaS
based solutions - NG9-1-1 and 1Streetworks (formerly Traffic Management Plan
Automation). These applications considerably increase our addressable market
and provide the potential for significant expansion of high margin software
revenue.
The launch of our cloud platform in January 2023 means we can now offer a
"light version" of our NG9-1-1 solution aimed at the counties and cities
within each US state, significantly increasing our addressable opportunity. We
have now secured five contract wins for this solution and have further trials
underway. There is an addressable market of over US$345m ARR for our NG9-1-1
SaaS solution and we are currently targeting up to 15% market share. In Q4,
the team will be working on advancing our offering with an Esri integration,
aiming at driving adoption of the product.
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.
1Streetworks 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 traffic management plans that are both
consistent and compliant. It has the potential to revolutionise the traffic
management planning industry. This solution is now being trialled by five
customers across the UK, with final contractual discussions for an annual
licence underway with a large utility company.
There are currently over 2.5 million roadworks each year on low-speed roads
alone. This is expected to increase to approximately 4 million per year. The
catalyst for this increase is the planned electrification of the UK (for
example: installation of electric vehicle charging points) as well as the roll
out of new telecoms fibre across the country. We estimate that the total
addressable market will be in excess of £400m in the coming years.
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 ones to expand our addressable market.
In terms of new product development, we recently developed additional rules
based cleansing applications, such as NG9-1-1, focused on specific industry
verticals, leveraging the power of our 1Integrate rules engine to automate
data ingestion. The development of these innovative products will provide us
with a pipeline of product launches for 2024 and beyond.
We also continue to build our product portfolio. Two core components that
underpin our SaaS Solutions and the 1Spatial Platform have also been enhanced
to make even the most complex data supply chains even easier to manage.
· 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.
· 1Data Gateway also went through similar UI and API improvements. This allows
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.
We plan to leverage this innovation and development by considering entry into
new markets and verticals such as the Built Environment in the UK and
1Streetworks in Canada.
Enterprise business expansion
US
The US continues to be the most significant contributor of recurring revenue
growth with 56% at constant currency compared to the same period in the prior
year. We appointed a new Head of Sales in the US helping to drive pipeline
growth and pipeline conversion to ensure we capitalise on the huge opportunity
in this region. We are already seeing the benefit of this appointment in new
opportunities across our customer base.
We secured our first contract with the State of Oregon using our 1Integrate
and 1DataGateway products - the initial contract value is $0.4m over two years
with a number of 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, a global SAP partner, bringing the total ARR
derived from this customer to $0.4m demonstrating our ability to execute on
the opportunity.
We expanded our existing contract with Federal Highways through the sale of
additional 1Integrate licences generating incremental ARR of $150K, bringing
total ARR on the account to $200K.
UK
We have seen good growth in the UK during the half, in addition to the five
trials secured for 1Streetworks.
We secured our first contract with Yorkshire Water Services for £650K. The
contract was to replace the company's GIS platform technology and network data
model to enable visualisation of GIS data, configuration of GIS business
applications and integration of the new GIS with wider business applications
across the company. 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 £1.5m, 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, with a contract value of £0.2m. 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.
We are pleased that the first phase of the NUAR Project ('National Underground
Asset Register') (also known as the MVP stage), has now been completed and was
launched by government on 5 April 2023. This first phase of NUAR contains data
from public and private sector organisations which own pipes and cables in
North-East England, Wales and London including all the major energy and water
providers. The size of the dataset continues to grow and has received
excellent feedback from all stakeholders.
Europe
In Belgium, we secured an initial four-year contract with Société Walloon
Des Eaux using our 1Water application. The contract includes a four-year
extension resulting in a total contract value of €3m, including ARR from
licence sales of €230K.
During the half, a major European aerospace company, initially secured in July
2022, contracted 1Spatial for additional complementary services due to a
change in the project scope. The value of the award was €240K.
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 6 months carrying a
value totalling AUS$200K with the possibility to extend.
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 are now developing these objectives through industry benchmarking, peer
review and business consultations. We reported on the key focus areas in our
FY23 Annual Report.
During the first half of FY 2024, we started rolling out ISO27001 to the UK
and other Group entities, as well as an electric first initiative as our car
fleet comes up for renewal. We have also started to gather information around
carbon reporting across the Group. We plan to report on our continental
European, US and Australian businesses' carbon emissions, as well as extending
the scope of our UK disclosures (scope 3), in the FY 2024 Annual Report.
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. The success of this approach is
evidenced by the Group's selection as one of the top 100 organisations
featured on the 2023 UK's Most Loved Workplace ®. 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 are transitioning from a predominantly services-based business to one which
has productised its valuable IP and data expertise into scalable software
solutions including SaaS. We sit at the heart of the transformation taking
place across multiple sectors, with our growing levels of recurring revenue
providing confidence to continue investing in our scalable solutions. We
remain focused on the conversion of our substantial sales pipeline, which will
in turn drive revenue growth and margin expansion.
With a sales focused team, compelling offering, a growing recurring revenue
stream and a strong sales pipeline for our enterprise business as well as a
potentially transformational pipeline for our SaaS based solutions, we believe
the business is well placed to deliver and capitalise on the huge market
opportunity ahead.
Trading in the second half is in line with expectations with several new
contracts secured. While cognisant of inflationary cost pressures, the Board
remains confident in delivering results for FY 2024 in line with expectations.
Claire Milverton
Chief Executive Officer
Financial performance
Summary
The Group delivered a solid financial performance in the period with further
growth in revenues and ARR. The increase in revenue generated compared to the
prior period supports the increase in investment in innovation and sales
resources required to secure higher value longer-term recurring contracts and
pipeline growth.
Revenue
Group revenue increased by 11% to £15.53m from £14.03m in H1 2023. 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 24% to
£8.2m from £6.6m and the Group achieved organic growth in revenue of 11%.
The revenue by type is shown below:
Revenue by type
H1 2024 H1 2023 % change
Recurring revenue [term licences, SaaS + S&M] 8.18 6.62 24%
Services 6.65 6.44 3%
Revenue (excluding perpetual licences) 14.83 13.06 14%
Perpetual licences 0.70 0.97 (28%)
Total revenue 15.53 14.03 11%
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 2023, we have increased the
annualised value of term licences by 27% overall (23% for 1Spatial solutions),
as shown in the table below.
H1 2024 H1 2023 Growth
ARR for term licences - owned 5.01 4.07 23%
ARR for term licences - third party 1.55 1.10 41%
ARR for term licences - total 6.56 5.17 27%
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 10% from £15.0m at 31 July 2022 to £16.5m as at 31
July 2023. The growth rates varied by region as shown in the table below with
most regions growing total ARR and the US growing at the fastest rate of
22%. The UK also had an excellent growth rate at 10%. Europe's ARR growth
rate was modest at 9%. The overall renewal rate remains high at around 94%.
ARR by region
H1 2024 H1 2023 Growth
UK/Ireland 6.95 6.30 10%
Europe 5.56 5.09 9%
US 2.56 2.09 22%
Australia 1.58 1.72 -8%
Total ARR 16.65 15.20 10%
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 high at £10.6m 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 2024 H1 2023 Growth % Growth % (constant fx)
UK/Ireland 6.37 5.62 13% 13%
Europe 5.12 5.31 (4%) (7%)
US 2.29 1.80 27% 24%
Australia 1.75 1.30 35% 40%
15.53 14.03 11% 9%
It was pleasing to achieve double-digit revenue growth overall, which was
driven mainly by the strong growth in the UK, Australia and the US following
excellent contract wins last year, offset by the results in Europe. In Europe,
revenue was impacted by the timing of closing a major contract at the end of
H1 with an estimated annual licence revenue of €0.5m. This contract is now
expected to close at the end of FY 2024. The delay in conversion of this
opportunity resulted in a reduction of 7% at constant currency compared to the
previous year. Going forward, all regions will continue to focus on increasing
their sales of higher margin owned technology sold as term licences.
Gross profit margin
In spite of inflationary increases we have seen across our cost base over the
last 12 months, the gross profit margin increased two percentage points to 52%
(H1 FY23: 50%) through the increase of subscriptions pricing and charge out
rates.
Cost management continues to be an important focus during FY 2024. Although
the business is incurring some planned increases in costs to support future
revenue growth, the management team will remain focused on driving
improvements to the gross margin levels through revenue growth of higher
margin term licences.
Adjusted EBITDA
The adjusted EBITDA decreased by 16% to £1.7m from £2.0m in the prior period
with EBITDA margin also lower than the prior period at 10.9% (H1 2023: 14.4%).
This decrease was due primarily to the continued investment in our sales
resource. As a sales-led organisation, targeted investment in people is
critical to ensure that we achieve our strategic sales objectives and we will
continue to invest to execute our strategy. To enable further planned
investment in this area, the management team carried out a review of
operational and R&D costs in the half, taking £1m of non-revenue
generating expenditure out of the business on an annualised basis. With the
combination of the cost reduction program and a larger weighting of term
licence renewals in the second half of the year, we will recoup the EBITDA
shortfall in the next six months. We will also have the headcount to deliver
the sale of SaaS product in the second half and into the new financial year.
Operating (loss)/profit
The Group recorded an operating loss of £0.3m compared to a profit of £0.4m
in the prior year. Excluding the impact of restructuring costs (£0.3m), which
were incurred primarily in our European operation, the Group reported a
marginal profit. We are satisfied with the result for the period and are
confident that the restructuring carried out will benefit of the Group's
success in the medium term.
Taxation
The tax charge for the period was £0.1m (H1 2023: £0.1m).
Balance sheet
The Group's net assets increased to £16.7m at 31 July 2023 (H1 2023:
£15.7m). Intangible assets increased to £18.5m (H1 2023: £15.9m), mainly
due to increased R&D expenditure on our SaaS products. The drive to
increase investment in our SaaS offerings has yielded its first results in the
first six months of the year with a number of deals signed in the US and five
trials signed in the UK. We will continue to invest in these product sets as
we are confident that conversion of further opportunities will result in
significant top line and EBITDA growth.
Cash flow
Cash generated from operations was £0.7m (H1 2023: £1.3m). This decrease was
driven primarily by a higher cost base notably through increases in headcount,
professional fees, legal expenses and exceptional items. While we did observe
an increase in revenue generated, the incremental cost base was in excess of
any additional cash generated from sales. With the traction demonstrated by
the sales team over the last six months, the timing of term licence renewals
weighted towards the second half of the year, the non-recurrence of
exceptional costs incurred in the half and the positive impact from the
restructuring carried out in first half of the year, we are confident that the
cash inflow in the second half of the year will be improved on the first half.
Free cash outflow in the first half of the year was £2.5m (H1 FY23: £0.9m).
In addition to the decrease in cash generated from operations for the same
period in the prior year, the investment in software and research and
development has also increased (£1.0m compared to the prior period). The
increase in cost is focussed on the development of our cloud and SaaS product
(£0.6m of software and research and development time) and investment in
products developed in collaboration with major partners (£0.4m) where
opportunities for sales have already been identified. The expected full year
R&D spend remains in line with forecast and all development costs are
consistent with our strategic objectives.
Free cash flow H1 2024 H1 2023
£'000 £'000
Cash generated from operations 683 1,343
Net interest paid (138) (75)
Net tax paid (59) (26)
Expenditure on software, product development and intellectual property (2,565) (1,563)
capitalised
Purchase of property, plant and equipment (35) (104)
Lease payments (384) (454)
Free cash outflow (2,498) (879)
Investment in R&D
Development costs capitalised in the period amounted to £2.1m (H1 2023:
£1.6m). Amortisation of development costs was £0.9m (H1 2023: £0.7m). The
increased R&D expenditure primarily relates to the investment in
cloud-based SaaS solutions and development of product where opportunities have
already been identified.
Financing
The Group has a £3m Revolving Credit Facility to ensure that the Group's
working capital position is strengthened. The secured facility, arranged in
June 2022, is committed for three years and priced on competitive terms. As at
31 July 2023 there was £1.1m drawn from the facility which we intend to repay
by the end of the financial year.
Condensed consolidated statement of comprehensive income
Six months ended 31 July 2023
Unaudited Unaudited Audited
Six months ended Six months ended Year ended
31 July 2023 31 July 2022 31 January 2023
Note £'000 £'000 £'000
Revenue 4 15,537 14,028 30,002
Cost of sales (7,496) (7,078) (14,504)
Gross profit 8,041 6,950 15,498
Administrative expenses (8,359) (6,589) (14,244)
(318) 361 1,254
Adjusted EBITDA 3 1,686 2,017 4,997
Less: depreciation (86) (105) (253)
Less: depreciation on right of use asset (394) (491) (1,056)
Less: amortisation and impairment of intangible assets 7 (1,120) (915) (2,048)
Less: share-based payment charge (14) (145) (192)
Less: strategic, integration and other non-recurring items (390) - (194)
Operating (loss)/profit (318) 361 1,254
Finance income 9 7 19
Finance cost (147) (101) (229)
Net finance cost (138) (94) (210)
(Loss)/profit before tax (456) 267 1,044
Income tax (charge)/credit 5 (59) (60) 14
(Loss)/profit for the period (515) 207 1,058
Other comprehensive income
Items that may subsequently be reclassified to profit or loss:
Actuarial gains/(losses) arising on defined benefit pension, net of tax - - 162
Exchange differences on translating foreign operations (189) 210 415
Other comprehensive (loss)/income for the period, net of tax (189) 210 577
Total comprehensive (loss)/gain for the period attributable to the equity (704) 417 1,635
shareholders of the Parent
(Loss)/profit per ordinary share from continuing operations attributable to
the equity shareholders of the Parent during the period (expressed in pence
per ordinary share):
Unaudited Unaudited Audited
Six months ended Six months ended Year ended
31 July 2023 31 July 2022 31 January 2023
Basic (loss)/earnings per share 6 (0.5) 0.2 1.0
Diluted (loss)/earnings per share 6 (0.5) 0.2 0.9
Condensed consolidated statement of financial position
As at 31 July 2023
Unaudited Audited Unaudited
As at As at As at
31 July 2023 31 January 2023 31 July 2022
Note £'000 £'000 £'000
Assets
Non-current assets
Intangible assets including goodwill 8 18,531 17,408 15,940
Property, plant and equipment 265 302 376
Right-of-use assets 1,621 1,609 2,000
Total non-current assets 20,417 19,319 18,316
Current assets
Trade and other receivables 9 12,322 14,151 12,305
Current income tax receivable 44 35 179
Cash and cash equivalents 10 3,250 5,036 4,529
Total current assets 15,616 19,222 17,013
Total assets 36,033 38,541 35,329
Liabilities
Current liabilities
Bank borrowings 10 (1,745) (660) (643)
Trade and other payables 11 (13,196) (15,797) (12,741)
Lease liabilities (523) (608) (621)
Deferred consideration - (28) (370)
Total current liabilities (15,464) (17,093) (14,375)
Non-current liabilities
Bank borrowings 10 (962) (1,322) (1,562)
Lease liabilities (1,178) (1,077) (1,348)
Deferred consideration - - -
Defined benefit pension obligation (1,178) (1,154) (1,319)
Deferred tax (547) (544) (1,058)
Total non-current liabilities (3,865) (4,097) (5,287)
Total liabilities (19,329) (21,190) (19,662)
Net assets 16,704 17,351 15,667
Share capital and reserves
Share capital 12 20,161 20,155 20,150
Share premium account 30,497 30,488 30,479
Own shares held (28) (139) (303)
Equity-settled employee benefits reserve 4,136 4,122 4,075
Merger reserve 16,465 16,465 16,465
Reverse acquisition reserve (11,584) (11,584) (11,584)
Currency translation reserve 312 501 296
Accumulated losses (42,778) (42,180) (43,434)
Purchase of non-controlling interest reserves (477) (477) (477)
Equity attributable to shareholders of the Parent company 16,704 17,351 15,667
Total equity 16,704 17,351 15,667
Condensed consolidated statement of changes in equity
Period ended 31 July 2023
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 2022 as restated (Audited) 20,150 30,479 (303) 3,930 16,465 (11,584) 86 (477) (43,236) 15,510
Comprehensive income/(loss)
Profit for the year - - - - - - - - 1,058 1,058
Other comprehensive income/(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 (loss)/income - - - - - - 415 - 1,220 1,635
Transactions with owners recognised directly in equity
Recognition of share-based payments - - - 192 - - - - - 192
Issue of share capital 5 9 - - - - - - - 14
Transfer of treasury shares - - 164 - - - - - (164) -
5 9 164 192 - - - - (164) 206
20,155 30,488 (139) 4,122 16,465 (11,584) 501 (477) (42,180) 17,351
Balance at 31 January 2023 (Audited)
Comprehensive income/(loss)
Profit for the period - - - - - - - - (515) (515)
Other comprehensive income
Exchange differences on translating foreign operations - - - - - - (189) - - (189)
Total other comprehensive (loss)/income - - - - - - (189) - (515) (704)
Total comprehensive (loss)/income - - - - - - (189) - (515) (704)
Transactions with owners recognised directly in equity
Recognition of share-based payments - - - 14 - - - - - 14
Issue of share capital 6 9 15
Transfer of treasury shares 111 (83) 28
6 9 - 14 - - (189) - (515) (648)
20,161 30,497 (28) 4,136 16,465 (11,584) 312 (477) (42,778) 16,704
Balance at 31 July 2023 (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 2022 (Audited) 20,150 30,479 (303) 3,930 16,465 (11,584) 86 (477) (43,236) 15,510
Comprehensive loss
Loss for the period - - - - - - - - 207 207
Other comprehensive (loss)/income
Exchange differences on translating foreign operations - - - - - - 210 - - 210
Total other comprehensive (loss)/income - - - - - - 210 - 207 417
Total comprehensive (loss)/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) (43,029) 16,072
Balance at 31 July 2022 (Unaudited)
Condensed consolidated statement of cash flows
Period ended 31 July 2023
Unaudited Unaudited Audited
Six months ended Six months ended Year ended
31 July 2023 31 July 2022 31 January 2023
Note £'000 £'000 £'000
Cash flows from operating activities
Cash generated from operations 10 683 1,343 5,352
Interest received 9 6 19
Interest paid (147) (81) (229)
Tax paid (59) (26) (-)
Tax received - - 179
Net cash from operating activities 486 1,242 5,321
Cash flows from investing activities
Purchase of property, plant and equipment (35) (104) (163)
Expenditure on product development and intellectual property capitalised (2,565) (1,563) (3,854)
Net cash used in investing activities (2,600) (1,667) (4,017)
Cash flows from financing activities
Proceeds from loans and borrowings 1,100 500
Repayment of loans and borrowings (313) (206) (1,043)
Repayment of lease obligations (384) (454) (1,088)
Payment of deferred consideration on acquisition (27) - (352)
Net proceeds from share issue 16 - 14
Net cash used in financing activities 392 (660) (1,980)
Net decrease in cash and cash equivalents (1,722) (1,085) (676)
Cash and cash equivalents at start of period 5,036 5,623 5,623
(64) (9) 89
Effects of foreign exchange on cash and cash equivalents
Cash and cash equivalents at end of period 10 3,250 4,529 5,036
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 2023 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 2023 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 2023.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 2023 and 31 July
2022 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 2023 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 10 October 2023.
3. Alternative Performance Measures ('APMs')
The Group uses certain Alternative Performance Measures to enable the users of
the Group's financial statements to understand and evaluate the performance of
the Group consistently over different reporting periods. APMs are non-GAAP
company specific measures. As these are non-GAAP measures, they should not be
considered as replacements for IFRS measures. The Group's definition of
non-GAAP measures may not be comparable to other similarly titled measures
reported by other companies. A description of the measures set out above is
included below with a reconciliation to the closest GAAP measure included in
the notes to the consolidated condensed interim financial report.
APM Explanation of APM
Recurring Revenue (s) Recurring Revenue is the value of committed recurring contracts for term
licences and support & maintenance recorded in the year.
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 &
maintenance.
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.
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.
Free cashflow 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.
But excludes lease liabilities.
Net cash Net cash is gross cash less bank borrowings.
Recurring Revenue H1 2024 H1 2023 FY2023
Total Revenue 15,537 14,028 30,002
Adjustments:
Services (6,653) (6,438) (13,601)
Perpetual Licences - own (188) (271) (393)
Perpetual Licences - third party (508) (695) (1,253)
Recurring Revenue 8,188 6,624 14,755
Annualised Recurring Revenue H1 2024 H1 2023 FY2023
Recurring Revenue 8,188 6,624 14,755
Adjustments:
Timing differences on Net New Revenue in period 8,457 8,571 1,018
Annualised Recurring Revenue 16,645 15,195 15,773
Adjusted EBITDA H1 2024 H1 2023 FY2023
(Loss)/profit before tax (456) 267 1,044
Adjustments:
Depreciation 480 596 1,309
Amortisation and impairment of intangible assets 1,120 915 2,048
Share-based payment charge 14 145 192
Strategic, integration and other one-off items 390 - 194
Net finance cost 138 94 210
Adjusted EBITDA 1,686 2,017 4,997
Operating Cashflow H1 2024 H1 2023 FY2023
Cash generated from operations 683 1,343 5,352
Adjustments:
Cash flow on strategic, integration and other non-recurring items 516 - 48
Cash generated from operations before strategic, integration and other 1,199 1,343 5,400
non-recurring items
Free cash flow H1 2024 H1 2023 FY2023
Cash generated from operations before strategic, integration and other 1,199 1,343 5,400
non-recurring items
Adjustments:
Net interest paid (138) (75) (210)
Net tax (paid)/received (59) (26) 179
Expenditure on product development and intellectual property capitalised (2,565) (1,563) (3,854)
Purchase of property, plant and equipment (35) (104) (163)
Lease payments (384) (454) (1,099)
Free cash flow before strategic, integration and other non-recurring items (1,982) (879) 253
Cash flow on strategic, integration and other non-recurring items (516) - (48)
Free cash flow (2,498) (879) 205
Net Cash H1 2024 H1 2023 FY2023
Cash and cash equivalents 3,250 4,529 5,036
Adjustments:
Bank Borrowings - current (1,745) (643) (660)
Bank Borrowings - non-current (962) (1,562) (1,322)
Net Cash 543 2,324 3,054
4. Revenue
The following table provides an analysis of the Group's revenue by type:
Revenue by type
H1 2024 H1 2023
£000 £000
SaaS Solutions 0.09 -
Term licences - own 2.45 1.14 114%
Term licences - third party 0.90 0.55 64%
SaaS and Term licences - total 3.44 1.69 103%
Support & maintenance 4.74 4.93 (4%)
Recurring revenue 8.18 6.62 24%
Services 6.65 6.44 3%
Perpetual licences - own 0.19 0.27 (27%)
Perpetual licences - third party 0.51 0.70 (30%)
Perpetual licences - total 0.70 0.97 (28%)
Total revenue 15.53 14.03 11%
Percentage of recurring revenue 53% 47%
5. Taxation
The tax charge on the result for the six months ended 31 July 2023 is based on
the estimated tax rates in the jurisdictions in which the Group operates for
the year ending 31 January 2024.
6. (Loss)/earnings per share
Basic (loss)/earnings per share is calculated by dividing the (loss)/profit
attributable to equity holders of the Company by the weighted average number
of ordinary shares in issue during the period.
Unaudited Unaudited Audited
Six months ended Six months ended
31 July 2023 31 July 2022 Year ended
31 January 2023
£'000 £'000 £'000
(Loss)/profit attributable to equity holders of the Parent (515) 207 1,058
Number Number Number
000s 000s 000s
Ordinary shares with voting rights 110,829 110,486 110,712
Deferred consideration payable in shares - 56 55
Basic weighted average number of ordinary shares 110,859 110,542 110,807
Impact of share options/LTIPs 3,264 3,890 2,845
Diluted weighted average number of ordinary shares 114,123 114,432 113,652
Unaudited Unaudited Audited
Six months ended Six months ended
31 July 2023 31 July 2022 Year ended
31 January 2023
Pence Pence Pence
Basic (loss)/earnings per share (0.5) 0.2 1.0
Diluted (loss)/earnings per share (0.5) 0.2 0.9
There is no material difference between basic earnings per share and diluted
earnings per share.
For H1 FY 2024, 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.
7. Dividends
No dividend is proposed for the six months ended 31 July 2023 (31 January
2023: nil; 31 July 2022: nil).
8. 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 2023 17,672 462 4,738 6,799 25,597 72 55,340
Additions - - - 383 2,172 10 2,565
Effect of foreign exchange (233) (6) (93) (97) (316) - (745)
At 31 July 2023 17,439 456 4,645 7,085 27,453 82 57,160
Accumulated impairment and amortisation
At 1 February 2023 11,517 318 3,933 5,294 16,847 23 37,932
Amortisation - 11 76 116 914 3 1,120
Effect of foreign exchange 93 2 73 52 203 - 423
At 31 July 2023 11,424 327 3,936 5,358 17,558 26 38,629
Net book amount at 6,015 129 709 1,348 10,274 56 18,531
31 July 2023
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 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
9. Trade and other receivables
As at As at As at
31 July 2023 31 January 2023 31 July 2022
Current £'000 £'000 £'000
Trade receivables 4,173 4,992 2,701
Less: provision for impairment of trade receivables (22) (29) (25)
4,151 4,963 2,676
Other receivables 1,747 2,044 1,618
Prepayments and accrued income 6,424 7,144 8,011
12,322 14,151 12,305
10. Notes to the condensed consolidated statement of cash flows
a) Cash used in operations
Unaudited Unaudited Audited
Six months ended Six months ended
31 July 2023 31 July 2022 Year ended
31 January 2023
£'000 £'000 £'000
Profit/(loss) before tax (456) 267 1,044
Adjustments for:
Net finance cost 138 94 210
Depreciation 480 596 1,309
Amortisation of acquired intangibles 206 190 386
Amortisation and impairment of development costs 914 725 1,662
Share-based payment charge 14 145 192
Decrease/(increase) in trade and other receivables 1,580 216 (1,426)
(Decrease)/increase in trade and other payables (2,226) (668) 1,963
Increase/(decrease) in defined benefit pension obligation 33 24 12
Net foreign exchange movement - (246) -
Cash from operations 683 1,343 5,352
b) Reconciliation of net cash flow to movement in net funds
Unaudited Unaudited Audited
As at As at As at 31 January 2023
31 July 2023 31 July 2022
£'000 £'000 £'000
Decrease in cash in the period (1,722) (1,085) (676)
Changes resulting from cash flows (1,722) (1,085) (676)
Net cash inflow in respect of new borrowings (1,100) - -
Net cash outflow in respect of borrowings repaid 313 206 543
Effect of foreign exchange (2) (28) (44)
Change in net funds (2,511) (907) (177)
Net funds at beginning of period 3,054 3,231 3,231
Net funds at end of period 543 2,324 3,054
Analysis of net funds
Cash and cash equivalents classified as:
Current assets 3,250 4,529 5,036
Bank and other loans (2,707) (2,205) (1,982)
Net funds at end of period 543 2,324 3,054
Net funds is defined as cash and cash equivalents net of bank loans.
11. Trade and other payables
As at As at As at
31 July 2023 31 January 2023 31 July 2022
Current £'000 £'000 £'000
Trade payables 2,760 2,861 2,242
Other taxation and social security 2,671 3,653 2,993
Other payables 410 506 492
Accrued liabilities 1,307 1,229 1,651
Deferred income 6,048 7,548 5,363
13,196 15,797 12,741
12. Share capital
As at As at As at
31 July 2023 31 January 2023 31 July 2022
£'000 £'000 £'000
Allotted, called up and fully paid
110,859,545 (H1 FY 2024: FY 2023: 110,859,545) ordinary shares of 10p each 11,093 11,087 11,082
226,699,878 (H1 FY 2024 and FY 2023: 226,699,878) deferred shares of 4p each 9,068 9,068 9,068
20,161 20,155 20,150
There are 110,859,545 ordinary shares of 10p in issue, of which 29,899
ordinary shares are held in treasury. Consequently, the total number of voting
rights is 110,829,646.
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.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR UPGQPUUPWPGBRecent news on 1Spatial
See all newsREG - 1Spatial Plc - Final Results
AnnouncementREG - 1Spatial Plc - Notice of Results Presentations
AnnouncementREG - 1Spatial Plc - Director Share Purchase & PDMR Dealing
AnnouncementREG - 1Spatial Plc - Director Share Purchase & PDMR Dealing
AnnouncementREG - 1Spatial Plc - Employee Share Awards and PDMR Dealings
Announcement