SPA 1spatial Plc

This announcement contains inside information for the purposes of article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018.

 

24 April 2024

 

1Spatial plc

 

("1Spatial", the "Group" or the "Company")

 

Final results for the year ended 31 January 2024

 

1Spatial, (AIM: SPA), a global leader in Location Master Data Management ('LMDM') software and solutions, is pleased to announce audited final results for the year ended 31 January 2024.

 

·	Group revenue increased 8% to £32.3 million, resulting in an annual increase of 15% in gross profit.
·	Recurring revenue accounts for 56% of total revenues (FY 2023: 49%) driven by year-on year term licence revenue growth of 60%
·	We launched our SaaS businesses in the period with £0.2 million of revenue generated from initial trials
·	Annualised recurring revenue ('ARR') increased by 9% to £17.2 million
·	Operating profit grew to approximately £1.4 million (FY 2023: £1.3 million) despite the increases in inflationary costs

 

Financial highlights

	31 January  2024 £m	31 January  2023 £m	Change   %
Group revenue	32.3	30.0	8
Recurring revenue	18.1	14.8	22
Term licences revenue	8.3	5.2	60
SaaS solutions revenue	0.2	-	100
Group total ARR*	17.2	15.8	9
Term licences ARR	7.7	5.6	38
Group gross profit	17.9	15.5	15
Adjusted EBITDA**	5.5	5.0	10
Adjusted EBITDA margin (%)	17.0	16.7	0.3
Operating profit	1.4	1.3	8
Profit before tax	1.1	1.0	10
Earnings per share - basic (p)	1.1	1.0	10
Earnings per share - diluted (p)	1.0	0.9	11
Net cash***	1.1	3.1	(65)

 

* Annualised recurring revenue ('ARR') is the annualised value at the year-end of committed recurring contracts for term licences and support and maintenance.

** Adjusted EBITDA is a company-specific measure which is calculated as operating profit/(loss) before depreciation (including right of use asset depreciation), amortisation and impairment of intangible assets, share-based payment charge and strategic, integration, and other non-recurring items.

*** Net cash is gross cash less bank borrowings.

Operational highlights

·	Our Enterprise business secured multi-year contracts across all of our key geographies, demonstrating the quality of our products and the strength of our customer relationships.
	o	The UK increased its footprint across the utilities sector, secured multi-year contract renewals with key customers and developed the collaboration with UK government agencies and strategic partners
	o	The US continues to represent a significant opportunity for the Group. We now partner with 18 US states, following the addition of the State of Oregon in the year, and continue to develop expansion opportunities with existing customers
	o	Europe has completed its transition from declining legacy software, winning considerable contracts at the end of the year, positioning the region for growth in FY 2025
·	Continued R&D investment in innovative solutions - launching two high-margin SaaS solutions, NG-9-1-1 and 1Streetworks, both targeting sizeable niche markets
·	1Streetworks contract secured in February 2024 with UK Power Networks, with the opportunity to expand
·	Five NG-9-1-1 SaaS contracts secured

 

Outlook

·	There has been a solid start to trading in the current financial year with a growing sales pipeline and two significant framework agreements secured, with the State of Texas and UK Cabinet Office
·	Anticipate growing contribution in FY 2025 and beyond from 1Streetworks and NG-9-1-1 SaaS sales, which represent a significant avenue for margin growth and cash generation
·	Measured additional investment in FY 2025 in US Enterprise and 1Streetworks sales teams, where we see considerable opportunity, based on our proven offerings and established customer relationships
·	While cognisant of inflationary cost pressures, the Board remains confident in delivering further progress in FY 2025 with a further growth step up in FY 2026 as the Company benefits from the current ongoing investment

 

Commenting on the update, 1Spatial CEO, Claire Milverton, said:

 

"The Group's financial performance this Year demonstrates the successful progress we are making towards transitioning to a high margin, recurring software licence business. Our strategic investments in product development across both the Enterprise and SaaS divisions are yielding positive results and unlocking new markets, providing excitement for the future. We will continue to invest in our US Enterprise and 1Streetworks sales teams to capture what we believe to be a considerable long-term growth opportunity.

We have had a solid start to trading in the new financial year. With a growing sales pipeline and increased levels of recurring revenue, the Board is confident in delivering further progress in FY 2025."

 

 

 

For further information, please contact:

 

1Spatial plc	01223 420 414
Claire Milverton / Stuart Ritchie
Liberum (Nomad and Broker)	020 3100 2000
Max Jones / Edward Mansfield / Anake Singh
Alma Strategic	020 3405 0205
Caroline Forde / Hannah Campbell	1spatial@almastrategic.co.uk

 

1Spatial plc's LEI Number is: 213800VG7OZYQES6PN67

 

 

About 1Spatial plc

1Spatial plc is a global leader in providing Location Master Data Management ('LMDM') software and solutions, primarily to the Government, Utilities and Transport sectors. Our global clients include national mapping and land management agencies, utility companies, transportation organisations, government and defence departments.

 

Today - as location data from smartphones, the Internet of Things and great lakes of commercial Big Data increasingly drive commercial decision-making - our technology drives efficiency and provides organisations with confidence in the data they use.

 

We unlock the value of location data by bringing together our people, innovative solutions, industry knowledge and our extensive customer base.  We are striving to make the world more sustainable, safer and smarter for the future. We believe the answers to achieving these goals are held in data. Our 1Spatial Location Master Data Management (LMDM) platform incorporating our 1Integrate rules engine delivers powerful data solutions and focused business applications on-premise, on-mobile and in the cloud. This ensures data is current, complete, and consistent through the use of automated processes and always based on the highest quality information available.

 

1Spatial plc is AIM-listed, headquartered in Cambridge, UK, with operations in the UK, Ireland, USA, France, Belgium, Tunisia and Australia.

 

For more information visit www.1spatial.com

 

 

 

Chairman's Statement

1Spatial has maintained its growth trajectory in FY 2024, successfully continuing its transition to a business that has productised its valuable IP and data expertise into scalable software solutions, including SaaS and recurring revenues.

 

Our Enterprise business, which supports some of the world's largest organisations and government led initiatives in their major digital transformation initiatives, secured multi-year contracts in the year across all of our key geographies, clearly demonstrating the quality of our products and the strength of our customer relationships.

 

Through leveraging the revenue generated from the success of the Enterprise business, the Group has developed a scalable cloud platform and launched two high-margin SaaS solutions, NG-9-1-1 and 1Streetworks, both targeting sizeable niche markets, which has set the business up for accelerated future growth over the medium term.

 

It is evident that the reorganisation of the Group that has taken place over the last few years has now resulted in a business with the ability to grow across all markets. The UK continues to win and deliver on significant contracts for the UK government such as the National Underground Asset Register ("NUAR"). The US continues to represent a significant opportunity for the Group, building on the successes to date with the likes of Google and CalTrans, and we now have 18 US states as customers and a reinvigorated sales team into which we will continue to invest in FY 2025. Europe has completed its transition from declining legacy software and starting to move into growth, and Australia has likewise delivered an increasing level of proprietary software deals in the year.

 

The churn in our customer base is low, demonstrating the value our customers place not only on our offerings but also the support they receive from our knowledgeable team.

 

ESG and people

 

ESG is at the centre of 1Spatial's business; our products offer more sustainable, safer and smarter solutions. We revised our ESG strategy in 2023 and undertook a detailed carbon assessment, results of which are included in the ESG report. With the move back towards normal business travel, including general commuting and customer and supplier meetings, there has been an increase in carbon usage since last year, but we have a clear list of actions to reduce this to Net Zero by 2050.

 

As we position ourselves to scale, it is crucial we have the right people in place to execute our strategic priorities, and continuing to invest in our sales and marketing team is a key focus for the year ahead.

 

Summary and outlook

 

FY 2024 represented the tipping point in the business with recurring revenues now representing the majority of the business; alongside the successful commercial launch of two new SaaS products which each represent substantial opportunities. We have entered the new year with good momentum, as evidenced by the execution of the UKPN 1Streetworks contract and further Enterprise wins, and I am confident in our ability to deliver sustained growth and create long-term value for our shareholders.

 

Andy Roberts

Non-Executive Chairman

 

 

 

CEO Review

1Spatial's FY 2024 performance is testament to the Group's dedication to growth and innovation as we continue in our steady transition from a predominantly services led business towards higher margin, recurring software licences. Our strategic investments in product development and business expansion have yielded positive results, delivering revenue growth of 8% to £32.3m, with approximately 56% (FY2023: 49%) represented by recurring revenue. Within recurring revenues, software term licence revenue has increased by 60% to £8.3m (FY 2023: £5.2m) with double digit growth across the UK, US and Australia.

Building upon the strong foundation of our Enterprise business, we successfully introduced two high-margin SaaS solutions to the market in the year, which are already unlocking new markets, and we remain committed to developing our product portfolio to capture new opportunities and drive sustained growth.

 

The growing demand for up-to-date trusted location data presents extensive opportunities for 1Spatial. The global geospatial analytics market size is projected to grow from $79 billion in 2023 to $207 billion by 2030, at a CAGR of 14.7%. The significant growth of the market is mostly attributed to the increasing use of advanced technologies, such as AI, expert systems, machine learning and widespread adoption of 5G technology. All of these new advanced technologies depend on one thing - trusted, accurate and up to date data and that is what we enable at 1Spatial.

 

Our strategic positioning at the forefront of this transformation enables us to capitalise on emerging growth areas, as demonstrated by the recent UKPN 1Streetworks contract and NG-9-1-1 initiatives in the US.

 

I am extremely proud of the team's performance in FY 2024 which is enabling the successful transition to a business model centred around scalable software solutions. Looking forward we have scoped the market opportunity, the route to market and have the technology developed. Our focus is now on execution with investment in the near term to drive sales and secure the substantial opportunity ahead of us.

 

Successful launch and sales of SaaS solutions: 1Streetworks and NG-9-1-1

 

The expansion of the 1Spatial Cloud platform includes the launch of our multi-tenancy SaaS based solutions - 1Streetworks (formerly Traffic Management Plan Automation) and NG-9-1-1. These applications considerably increase our addressable market and provide the potential for significant expansion of high margin software revenue.

 

We believe the potential addressable markets for 1Streetworks and NG-9-1-1 are £400 million and $350 million respectively.

 

SaaS revenues generated in FY 2024 amounted to £0.2 million from initial trials with growth from both solutions anticipated in FY 2025 and beyond.

 

1Streetworks

1Streetworks automates the production of traffic management plans, diversion routing and asset inventory lists in the UK, producing a comprehensive, site-specific traffic management plan in just a few minutes.  The solution is highly scalable, with high gross margins and an already enthusiastic reception from our target customers.

 

Currently, utility companies and contractors face the arduous task of designing compliant traffic management plans to secure permits for road works, navigating complex legal regulations outlined in the red book codes of practice. Traditional processes leave room for human error, inviting potential fines for non-compliance. 1Streetworks, powered by our patented rules engine 1Integrate, encodes the red book guidelines and is the first solution in the market to fully automate the production of traffic management plans, significantly shortening the time, effort and cost it takes to produce plans that are both consistent and compliant.

 

With the utilities sector being a primary target vertical for this product, we were delighted to report that, following successful completion of a trial, UK Power Networks signed an initial 12-month contract to use our 1Streetworks software to revolutionise streetworks planning, in January 2024. The contract will deliver a minimum of £0.34m of SaaS revenue with the potential for considerable expansion. UK Power Networks has 190,000km of cables and delivers thousands of streetworks every year across London, the South-East and East of England, to maintain safe and reliable power supplies to 19 million people.

 

We are now investing in the expansion of the 1Streetworks sales and marketing teams which will have incremental cost implications in FY 2025, with the benefits flowing through in FY 2026 and beyond. We have initiated a three-year plan based around expanding our service further into Tier 1 contractors, traffic management companies, local authorities and the transportation sector, in addition to utilities. 

 

We also currently have four ongoing trials, with an additional ten expected to commence in the first half of the year. We anticipate that each 1Streetworks deal could potentially secure Annual Recurring Revenue ('ARR') ranging from £100k to £3 million depending on the sector and size of the end customer.

 

We have set ambitious revenue targets for 1Streetworks, including reaching £40 million in annual recurring SaaS revenues in the next five years, with the operational leverage of the platform delivering EBITDA margins far above the Group average.

 

NG-9-1-1

Our Public Safety NG-9-1-1 solution combines a powerful rules engine and data aggregator with a self-service cloud platform to support public safety entities with their data readiness needs. The launch of our cloud platform means we can now offer a "light version" of our NG-9-1-1 solution aimed at the counties and cities within each US state, significantly increasing our addressable opportunity. We secured five contract wins for this solution in the year and have further trials underway. The adoption of the product demonstrates the value offered to the customer and provides the Group with an opportunity to scale up into a significant market opportunity.

 

In the second half of the year, following customer feedback, the team worked on advancing our offering with an Esri integration, aimed at promoting the product's use across the Esri user base. We are now exploring a go-to-market strategy involving partner collaboration to complement our direct sales approach and accelerate growth across the US. This will provide wider market coverage of this key market.

 

With the potential addressable market of approximately $350 million ARR for our NG-9-1-1 SaaS solution, our refined sales approach has been designed to enable us to capitalise on this significant opportunity.

 

Innovation

 

As well as the launch of our first two SaaS solutions, we continue to innovate, augmenting the capabilities of our existing offerings and developing new products in response to needs of our customers. In H1 FY 2024, we developed additional rules-based cleansing applications leveraging the power of our 1Integrate rules engine to automate data ingestion for use on projects such as the National Underground Asset Register.

 

We continue to focus on extending our cloud capability. Core components that underpin our SaaS solutions and 1Integrate product have been enhanced to make even the most complex data supply chains even easier to manage, notably:

 

·

1Integrate went through its next major release - v4.0. This introduced a brand-new user interface, expertly reworked for a smooth user experience and huge productivity gains. Building the rules that define the specific data processing tasks has never been faster. Its support for data and models was also extended to work with models like IFC, the Esri Utility Network Model and CAD, so we can offer more services and support to our Utilities, Government and Transport customers, as well as commercial customers like Google.

·

1Data Gateway also went through similar UI and API improvements allowing us to improve the speed, consistency, and quality of how we release and deploy our world-class SaaS rules-based solutions (defined in 1Integrate) to our customers. How we repeatedly promote SaaS solutions through different environments has never been easier.

To further extend our reach of 1Data Gateway into the Esri customer base, we also launched 1Data Gateway for ArcGIS Pro, a revolutionary Data Quality add-in for Esri ArcGIS Pro (Esri's flagship desktop GIS). There is existing Esri integration with 1Data Gateway (e.g. with ArcGIS Dashboards) and 1Integrate (e.g. ArcGIS Feature Services). Now we have extended the integration further for Esri users who use ArcGIS Pro on the desktop.

 

Enterprise business expansion

 

The "Land and Expand" strategy is continuing to deliver organic growth, and alongside our 1Streetworks and NG-9-1-1 offerings, we believe the opportunity for 1Spatial has never been greater.

 

UK

In addition to the transformational opportunity presented by 1Streetworks in the UK, we also made good progress across our Enterprise business in the year.

 

We secured our first contract with Yorkshire Water Services for £650K. The contract was to replace the company's GIS platform technology and our team was selected to undertake the transformation project using Esri technology due to the significant experience we have in the sector.

 

We strengthened our relationship with Ordnance Survey Great Britain through a two-year contract renewal, worth approximately £1.5 million, and will see 1Spatial's specialist team provide software and support services to Ordnance Survey's Data Management System. We also secured a further software and services contract with existing customer Land and Property Services in conjunction with our partner Version1. Land and Property Services ('LPS') is a division within the Department of Finance ('DoF') in Northern Ireland who collect, process and manage land and property information.

 

In November 2023, the government announced that NUAR ('National Underground Asset Register') was made available across England and Wales and that MVP coverage will be expanded to Northern Ireland by spring 2024 with the platform becoming fully operational across the three nations by the end of 2025. NUAR is a digital map of underground pipes and cables expected to provide £5 billion of economic growth to England, Wales and Northern Ireland. We are extremely proud to have been an integral part of this successful project. It demonstrates our world leading geospatial capabilities and our ability to deliver on complex projects at scale. Our 1Spatial platform is responsible for transforming, validating, and maintaining the data from all contributing asset owners, demonstrating our world leading technology and skilled team.

 

In early FY 2025, we were selected by our long-standing partner CGI for inclusion in the Cabinet Office Strategic Delivery Partner ecosystem. Alongside CGI, we will be working with the Cabinet Office over a five-year period to deliver a range of digital, data and technology services and products in support of Cabinet Office Business Units.

 

US

During the year, the US continued to contribute to the Group's recurring revenue growth with a 23% increase compared to the prior year.

 

We secured our first contract with the State of Oregon using our 1Integrate and 1DataGateway products - the initial contract value is $0.4 million over two years with several future expansion opportunities. The Group now has 18 US States as customers, each with significant expansion potential.

 

We secured our second contract with the California Department of Transportation (Caltrans), in partnership with Rizing for $0.4 million ARR demonstrating our ability to execute on the opportunity. As the second contract with Caltrans, secured alongside Rizing, we are realising the strength of the long-standing partnership and demand for 1Spatial's unique technology.

 

We also expanded our existing contracts with Federal Highways and Google REWS during the year.

 

The Group also signed its first framework agreement with the state of Texas post-period end for our Software, Commercial Off-the-Shelf (COTS) and Related Services, through the Department of Information Resources (DIR). The DIR delivers technology solutions to state and local government entities within Texas to ensure the technology is secure, cost-effective and forward looking and this contract will enable all departments to procure 1Spatial's software and services without going to formal tender. 

 

Europe

Our focus in Europe in FY 2024 has been to generate awareness for our new applications and to build a strong pipeline for future years, as demonstrated by the multi-year contract we secure with a leading Distribution System Operator for electricity and gas networks in Belgium, in January 2024. The contract is for geospatial data processing services using 1Spatial's 1Integrate product as well as the Group's geospatial data production services. 

 

Also in Belgium, we secured an initial four-year contract with Société Walloon Des Eaux using our 1Water application. In France, we secured a three-year contract extension with a major European utility customer for 1Spatial's GIS Framework and 1Integrate products, extending the term from one year to three years.

 

In Germany, we secured a four-year contract with ATKIS-1Gen, a working group of ADV (Arbeitsgemeinschaft der Vermessungsverwaltungen der Laender) that coordinates surveying and mapping in Germany, focused on the development of a cloud-based generalisation product that will replace on-premise technology.  

 

Australia

The Group secured its first 1Integrate licence contract in Australia winning Hunter Water, a state-owned corporation providing drinking water, wastewater, recycled water and storm water services to 500,000 people in the Lower Hunter Region in New South Wales. The contract is initially for six months carrying a value totalling AUS$200K with the possibility to extend.

Smart partnerships

Partnerships play a critical role in enabling us to secure new customers. During the year we continued to win work and deliver solutions alongside our trusted partners including Esri, CGI, Atkins Realis, Rizing, Qinetiq and Ordnance Survey.

 

The strengthening of our long-term partnership with Esri was of particular importance during the year, in terms of technology and providing enhanced go to market strategies across our SaaS offerings including NG-9-1-1. Esri is the global market leader in GIS with a network of over 2,700 partners around the world.

 

The past year's progress exemplifies our effective establishment of a partnership strategy with Esri on a global scale. Moving forward, our primary objectives include further identifying and nurturing relationships with major multinational corporations, particularly those where location data management is integral to broader customer bids.

 

ESG and People

 

We continue to make good progress with the development of our ESG strategy. In March 2022, we kicked off a stakeholder materiality assessment to determine the priority areas. We consulted with more than 150 customers, employees, Board members and senior management, shareholders, partners and suppliers to understand what areas are considered as most important for our stakeholders. We continue to develop these objectives through industry benchmarking, peer review and business consultations. Reporting on the key focus areas is included in the ESG section of this FY 2024 Annual Report.

 

During the first half of FY 2024, we started rolling out ISO27001 to all Group entities. Our UK operations were successfully accredited in March 2024 with further accreditations for other Group entities anticipated in FY 2025. As advised in the previous year, we have included additional carbon reporting across all Group entities in our ESG report and plan to increase the level of reporting in the FY 2025 Annual Report to demonstrate the progress that we have made.

 

Our people are critical to the success of the Group. We continue to invest in our people, providing them with the tools and training to support them and allow them to realise their potential. We actively encourage our people to pursue activities that help them in their day-to-day work life and offer a professional development allowance for them to use as they see fit. We firmly believe that investing in and empowering our people fosters loyalty, team spirit and engenders trust which are all to the benefit both the Group and its people. We support our people in their charitable activities and organise team and Company-wide events to recognise important milestones throughout the year such as mental health awareness.

 

Current trading and outlook

 

We had a good year with our Enterprise business, gaining more customers and sales worldwide and growing recurring revenue, setting us up for long-term success. With its patented rules engine, the Enterprise business has created the operating cash to fund the powerful SaaS solutions that target niche markets and have the potential to transform 1Spatial's financial profile.

 

In FY 2025, a key focus is to prioritise securing sales of our SaaS applications, recognising their transformative potential for driving growth. We will maintain consistent levels of product investment to ensure that our industry-leading cloud platform continues to deliver the best possible customer experience and product performance. Additionally, we will continue to invest in sales and marketing teams for 1Streetworks and develop an innovative partner-enabled approach for NG-9-1-1, aimed at accelerating our growth trajectory.

 

A second key focus is the enterprise opportunity in the US, where we see a considerable expansion opportunity, based on the strength of our offerings and existing customer relationships. We are therefore investing in further enterprise sales resource to enable a greater focus on achieving our ambitions of $1 million revenue per state.

 

The growth of the sales team to execute on the 1Streetworks and US opportunities will lead to a limited amount of incremental investment in the short term. We are confident that given our inherent scalable platform that attractive returns from this extra investment will start to be seen in FY 2026.

 

We have seen a solid start to trading in the new financial year, including the securing of two new framework agreements with the State of Texas and the UK Cabinet Office through our partner CGI. A growing sales pipeline, increased levels of recurring revenue and a good level of committed services revenue provide the Board with confidence in the Group's prospects.

 

Claire Milverton
Chief Executive Officer

 

 

 

CFO review

 

Delivering double-digit growth in recurring revenues and adjusted EBITDA

In FY 2024 the Group delivered solid growth in annual revenues with double digit growth in both recurring revenues and adjusted EBITDA. In spite of inflationary cost increases, we recorded an 8% increase in operating profit and a 10% increase in profit before tax. Increases in these key financial metrics have allowed the Group to continue to invest resources into our SaaS businesses and cloud platform.

 

Revenue

Group revenue increased by 8% to £32.3 million from £30.0 million in FY 2023.

 

Recurring revenue

The business strategy is to grow revenue from repeatable business solutions on long-term contracts by increasing sales of term licences (rather than one-off perpetual licences) and increasing the proportion of recurring revenue compared to services. As a result, excluding the impact of the reduction in perpetual licence revenue, the business achieved a year-on-year growth in total revenue of 9%. Recurring revenue, as a percentage of total revenue, increased to 56% (FY 2023: 49%).

 

 

Revenue by type
	FY 2024 £m	FY 2023 £m	% change
Recurring revenue	18.11	14.76	23%
Services	12.93	13.60	(5%)
Revenue (excluding perpetual licences)	31.04	28.36	9%
Perpetual licences	1.27	1.64	(23%)
Total revenue	32.31	30.00	8%
Percentage of recurring revenue	56%	49%

 

 

Annualised Recurring Revenue

The Annualised Recurring Revenue ('ARR') increased by 9% from £15.8 million to £17.2 million as at 31 January 2024 with ARR attributable to term licences growing by £2.1 million. The overall renewal rate for existing customers under contract decreased marginally to 93% (FY 2023: 94%) which still provides a strong platform for the current year.

 

ARR by region
	FY 2024 £m	FY 2023 £m	% growth
UK/Ireland	7.24	6.51	11%
Europe	5.63	5.49	3%
US	2.54	2.22	14%
Australia	1.80	1.56	15%
Total ARR	17.21	15.78	9%

 

Committed revenue

The level of committed services revenue, which has reduced since the start of the year as services revenue on the major projects we won last year is recognised, nevertheless remains high at approximately £10 million and provides strong revenue visibility, underpinning the Group's strong financial footing.

 

The combination of growing ARR, committed services revenue backlog and a strong pipeline of prospects means that the business is on track to make further progress on its revenue growth plan. With the business focus on developing and selling repeatable software solutions, there is an increased level of revenue visibility, which allows the Board to continue to invest with confidence.

 

Regional revenue

 

Regional revenue - point of origin
	FY 2024 £m	FY 2023 £m	% change
UK/Ireland	13.25	11.92	11%
Europe	11.03	11.01	0%
US	4.71	4.30	10%
Australia	3.32	2.77	20%
Total revenue	32.31	30.00	8%

 

All operating regions recorded double-digit growth with the exception of Europe resulting in overall revenue growth of 8%. Revenue growth in the UK/Ireland and the US was driven by significant in year term licence sales to new and existing customers. In Australia, despite competitive pricing pressure, revenue grew by 20% and included our first 1Integrate licence sale in the territory. In Europe, revenue was impacted by the timing of closing contracts towards the end of the year. Although revenue was flat, the European operation successfully signed two significant multi-year contracts during FY 2024 with expected revenues of approximately €7.1 million to be recognised over the life of the contract. These wins give clear visibility of revenue into FY 2025 and beyond. Going forward, all regions will continue to focus on increasing term licence sales of proprietary technology and SaaS solutions.

 

Gross profit margin

The gross margin grew by 15% in value terms and by 3% compared to the prior year to a level of 55%. The Board approved expenditure increases in sales and delivery capacity in order to secure higher value contracts; and increased spending on R&D, which is included within the cost of sales, is expected to yield higher gross margins in future years. The in-year cost increases have been more than offset by increases in levels of recurring revenue which have had a positive impact on gross profit. Going forward, the management team will continue to focus on driving improvements to gross margin through revenue growth of higher margin term licences and SaaS solutions.

 

Adjusted EBITDA

The adjusted EBITDA increased by 10% to £5.5 million from £5.0 million in the prior year resulting in an increase in adjusted EBITDA margin to 17.0% (FY 2023: 16.7%). Inflationary cost increases have been more than offset by increases in levels of recurring revenue. Cost management remains an important focus and expenses are constantly reviewed to ensure the level is appropriate for the structure of the business during this growth phase.

 

Strategic, integration and other non-recurring items

Costs amounting to £0.7 million relate primarily to the restructuring of the European business during the year, which is expected to result in approximately £1 million of cash savings on an annualised basis.

 

Operating profit and profit before tax

The Group achieved an operating profit of £1.4 million (FY 2023: £1.3 million) and profit before tax of £1.1 million (FY 2023: £1.0 million), representing a further year of improved profitability for the Group at an operating and profit before tax level. The increase in gross profit was largely offset by increased headcount costs, amortisation charges, strategic items, interest charges and adverse FX movements resulting in a profit before tax figure consistent with the prior year.

 

Taxation

The net tax credit for the period was £123k (FY 2023: £14k).

 

Balance sheet

The Group's net assets increased to £18.3 million at 31 January 2024 (2023: £17.4 million), mainly due to the overall profit after tax adjusted for currency differences in reserves.

 

Trade and other receivables decreased in the year to £12.8 million (FY 2023: £14.2 million), mainly due to increased levels of receivable collections around year end. Trade and other payables decreased in the year to £14.0 million (FY 2023: £15.8 million) due primarily to the timing of payments around year end.

 

Cash flow

Operating cash inflow before strategic, integration and other non-recurring items was slightly lower than the prior year at £5.3 million due to adverse working capital movements resulting from the timing of payments around year-end with receipts of £0.7m immediately post year end. As a result, free cash flow declined by approximately £2.0m due to:

 

·    £1.4m increased investment in R&D as the Group focusses on transition to enterprise / SaaS

·    £0.6m increase in strategic, integration and other non-recurring items from European restructuring which is one off and will realise annualised savings of €1m

·    £0.1m increased interest costs from RCF drawn down used to fund R&D and restructuring costs

 

The level of R&D spend for FY 2024 is expected to decrease in FY 2025 by approximately £0.5m with further reductions expected in future years as we continue to rationalise our product portfolio.

 

Operating cash flow		FY 2024	FY 2023
		£'000	£'000
Cash generated from operations		4,618	5,352
Add back: Cash flow on strategic, integration and other non-recurring items		667	48
Cash generated from operations before strategic, integration and other non-recurring items		5,285	5,400

 

Free cash flow		FY 2023	FY 2022
		£'000	£'000
Cash generated from operations before strategic, integration and other non-recurring items		5,285	5,400
Expenditure on product development and intellectual property capitalised		(5,295)	(3,854)
Lease payments		(948)	(1,099)
Net interest paid		(355)	(210)
Net tax received		140	179
Purchase of property, plant and equipment		(67)	(163)
Free cash flow before strategic, integration and other non-recurring items		(1,240)	253
Cash flow on strategic, integration and other non-recurring items		(667)	(48)
Free cash flow (outflow)		(1,907)	205

 

 

Investment in R&D

Development costs capitalised in the year increased to £5.3 million (FY 2023 £3.9 million) as the business has increased its investment in its technology and business solutions. The key areas where spending increased were on the cloud platform for solutions such as 1Streetworks in the UK and NG-9-1-1 in the US, and other technology such as 1Integrate, 1Data Gateway, 1Telecomms and 1Water. Amortisation of development costs was £2.0 million (FY 2023 £1.6 million).

 

Financing

The Group's financial position is supported by long-term bank loans, specifically a committed Revolving Credit Facility in the UK by 1Spatial plc ("RCF") and bank loans taken out by 1Spatial France during the COVID-19 pandemic ("French bank loans"). The RCF was put in place in June 2022 in response to an increase in the number of higher value sales contracts that the Group was entering into. The RCF is a £3 million 3-year committed facility priced on competitive terms. The French bank loans were taken out in 2020 in response to the COVID-19 pandemic and will be repaid over the next 3 years.

 

At the end of January 2024, the remaining principal balance outstanding on the Group's loans was £3.2 million (FY 2023: £2.0 million), with £1.9 million relating to the RCF and £1.3 million relating to the French bank loans. The amount repayable in FY 2025 is approximately €0.7 million (FY 2023: €0.7 million). In year investments made in the sales and product development functions continue to lay a strong foundation for future performance. Combined with the European restructuring and focus on a more discrete product portfolio, we have the resources to continue to grow. With a gross cash position of £4.3 million at 31 January 2024 (FY 2023: £5.0 million), undrawn liquidity on the committed RCF of £1.1 million, a growing adjusted EBITDA and positive operating cash generation, the business is in a healthy financial position, which gives the Board the confidence to continue to invest.

 

Alternative Performance Measures

Throughout this Annual Report, certain analyses include Alternative Performance Measures ('APMs') which are not defined by generally accepted accounting principles ('GAAP') as defined under UK-adopted international accounting standards or other generally accepted accounting principles. We believe this information, along with comparable GAAP measurements, is useful to investors because it provides a basis for measuring our operating performance. Our management and Board of Directors uses these financial measures, along with the most directly comparable GAAP financial measures, in evaluating our operating performance. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with GAAP. Wherever appropriate and practical, we provide reconciliation to relevant GAAP measures.

 

APMs have been provided for the following reasons:

 

·	to present users of the Annual Report with a clear view of what we consider to be the results of our underlying operations, aiding the understanding of management analysis and enabling consistent comparisons over time
·	to provide additional information to users of the Annual Report about our financial performance or financial position

 

The following APMs appear in this annual report.

 

#	APM	Explanation of APM
1	Recurring revenue (s)	Recurring revenue is the value of committed recurring contracts for term licences and support & maintenance recorded in the year.
2	Annualised recurring revenue ('ARR')	Annualised recurring revenue ('ARR') is the annualised value at the year-end of committed recurring contracts for term licences and support and maintenance.
3	Adjusted EBITDA	Adjusted EBITDA is a company-specific measure which is calculated as operating profit/(loss) before depreciation (including right of use asset depreciation), amortisation and impairment of intangible assets, share-based payment charge and strategic, integration, and other non-recurring items.
4	Operating cashflow	Operating cashflow is a company-specific measure which is calculated as cash generated from operations excluding cash flow on strategic, integration and other non-recurring items.
5	Free cashflow	Free cash flow is cash from operations after deducting cash outflows for interest, capital expenditure and lease payments.
6	Net cash	Net cash is gross cash less bank borrowings.
7	Available Liquidity	Available liquidity is the Group's gross cash balances less the undrawn element of the Group's revolving credit facility. Details of the revolving credit facility is more fully described in Note 1.1 to the consolidated financial statements.

 

 

Stuart Ritchie
Chief Financial Officer

 

 

 

Consolidated statement of comprehensive income

For the year ended 31 January 2024

	Note	2024 £'000	2023 £'000
Revenue	3	32,315	30,002
Cost of sales		(14,389)	(14,504)
Gross profit		17,926	15,498
Administrative expenses		(16,514)	(14,244)
		1,412	1,254
Adjusted EBITDA		5,479	4,997
Less: depreciation		(180)	(253)
Less: depreciation on right of use asset	11	(787)	(1,056)
Less: amortisation and impairment of intangible assets	6	(2,440)	(2,048)
Less: share-based payment credit/(charge)		33	(192)
Less: strategic, integration and other non-recurring items	4	(693)	(194)
Operating profit		1,412	1,254
Finance income		52	19
Finance costs		(407)	(229)
Net finance cost		(355)	(210)
Profit before tax		1,057	1,044
Income tax credit	5	123	14
Profit for the year		1,180	1,058
Profit for the year attributable to:
Equity shareholders of the Parent		1,180	1,058
		1,180	1,058
Other comprehensive income
Items that may subsequently be reclassified to profit or loss:
Actuarial (loss)/gains arising on defined benefit pension, net of tax		(43)	162
Exchange differences arising on translation of net assets of foreign operations		(196)	415
Other comprehensive (loss)/income for the year, net of tax		(239)	577
Total comprehensive gain for the year		941	1,635
Total comprehensive gain attributable to the
equity shareholders of the Parent		941	1,635

 

	Note	2024 £'000	2023 £'000
Earnings per Ordinary Share attributable to the owners of the Parent during the year (expressed in pence per Ordinary Share):
Basic earnings per share	15	1.1	1.0
Diluted earnings per share	15	1.0	0.9

 

 

                                                                                                Registered company number (England): 5429800

Consolidated statement of financial position                                                               

As at 31 January 2024

	Note	2024 £'000	2023 £'000
Assets
Non-current assets
Intangible assets including goodwill	6	19,951	17,408
Property, plant and equipment		192	302
Right of use assets	11	1,306	1,609
Restricted cash		75	-
Total non-current assets		21,524	19,319
Current assets
Trade and other receivables	7	12,770	14,151
Current income tax receivable		-	35
Cash and cash equivalents	8	4,260	5,036
Total current assets		17,030	19,222
Total assets		38,554	38,541
Liabilities
Current liabilities
Bank borrowings	9	(647)	(660)
Trade and other payables	10	(14,004)	(15,797)
Current income tax payable		(99)	-
Lease liabilities	11	(584)	(608)
Deferred consideration	12	-	(28)
Total current liabilities		(15,334)	(17,093)
Non-current liabilities
Bank borrowings	9	(2,534)	(1,322)
Lease liabilities	11	(820)	(1,077)
Defined benefit pension obligation		(1,222)	(1,154)
Deferred tax	13	(337)	(544)
Total non-current liabilities		(4,913)	(4,097)
Total liabilities		(20,247)	(21,190)
Net assets		18,307	17,351
Share capital and reserves
Share capital	14	20,155	20,155
Share premium account	14	30,508	30,488
Own shares held	14	(14)	(139)
Equity-settled employee benefits reserve		4,089	4,122
Merger reserve		16,465	16,465
Reverse acquisition reserve		(11,584)	(11,584)
Currency translation reserve		305	501
Accumulated losses		(41,140)	(42,180)
Purchase of non-controlling interest reserve		(477)	(477)
Total equity		18,307	17,351