1Spatial |
Expanded integration into Esri |
New product launch |
Software & comp services |
7 July 2016 |
Share price performance
Business description
Next event
Analyst
1Spatial is a research client of Edison Investment Research Limited |
1Spatial has announced that its 1Integrate product is being integrated into Esri’s field worker solution, Collector for ArcGIS. This significantly expands the company’s addressable user base within Esri and marks a further step forward in the company’s open technology strategy.
Year end |
Revenue (£m) |
PBT* (£m) |
EPS* (p) |
DPS (p) |
EV/EBIT (x) |
P/E (x) |
01/15 |
19.6 |
1.8 |
0.27 |
0.0 |
12.2 |
15.7 |
01/16 |
20.7 |
2.5 |
0.29 |
0.0 |
10.4 |
14.7 |
01/17e |
27.4 |
1.9 |
0.23 |
0.0 |
15.3 |
18.5 |
01/18e |
28.1 |
2.3 |
0.28 |
0.0 |
11.9 |
15.2 |
Note: *PBT and EPS are normalised, excluding acquired intangible amortisation, exceptional items and share-based payments. EPS is fully diluted.
In a further expansion of its relationship with Esri, 1Spatial has announced that its 1Integrate product is now being integrated into Esri’s field worker solution, Collector for ArcGIS solution. Collector for ArcGIS is installed in mobile devices (eg tablets, specialist surveying terminals) enabling field workers (eg surveyors) to collect and update information to their spatial database while working in the field. The integration of 1Integrate enables the newly surveyed data to be validated and accurately consolidated with the existing geographical database in the field. The benefits of this include improving the efficiency and accuracy of collecting new data and also enabling field workers to make better informed decisions while in the field.
Through expanding its reach to field workers the integration significantly enlarges 1Spatial’s addressable market within Esri’s customer base although the annual subscription for 1Integrate in Collector is likely to be lower than the £1,500 per year per seat charge for 1Integrate in the ArcGIS product.
As detailed in our initiation report In a position to scale, our forecasts reflect the fact that investment in transforming the business model is negatively affecting FY17e EPS by at least 35%. However, adjusting for this, we believe 1Spatial’s valuation is substantially underpinned by the established businesses and the company is establishing a strong platform to scale. Our DCF analysis suggests that penetrating a mere 0.22% of the global GIS user base would justify a 10p share price. The latest development expands the ability to reach further into this addressable market. While the timing and rate of uptake via partners remains difficult to gauge at this early stage, we believe positive newsflow regarding GIS partner customer uptake or new enterprise database partners should be key catalysts for upside.
Exhibit 1: Financial summary
£'000s |
2015 |
2016 |
2017e |
2018e |
||
31-January |
IFRS |
IFRS |
IFRS |
IFRS |
||
PROFIT & LOSS |
||||||
Revenue |
|
|
19,598 |
20,738 |
27,357 |
28,089 |
Delivery costs |
(8,804) |
(8,960) |
(12,732) |
(12,045) |
||
Gross Profit |
10,794 |
11,778 |
14,625 |
16,044 |
||
EBITDA |
|
|
3,052 |
3,677 |
3,897 |
4,685 |
Operating Profit (before amort. and except.) |
1,857 |
2,485 |
1,797 |
2,264 |
||
Acquired Intangible Amortisation |
(255) |
(709) |
(900) |
(900) |
||
Exceptionals |
(2,345) |
(1,140) |
(500) |
0 |
||
Share based payments |
(723) |
(1,398) |
(1,177) |
(1,177) |
||
Operating Profit |
(1,466) |
(762) |
(780) |
187 |
||
Net Interest |
(56) |
(31) |
74 |
50 |
||
Profit Before Tax (norm) |
|
|
1,801 |
2,454 |
1,871 |
2,314 |
Profit Before Tax (FRS 3) |
|
|
(1,522) |
(793) |
(706) |
237 |
Tax |
5 |
805 |
141 |
(47) |
||
Profit After Tax (norm) |
1,801 |
2,033 |
1,671 |
2,067 |
||
Profit After Tax (FRS 3) |
(1,517) |
12 |
(565) |
190 |
||
Average Number of Shares Outstanding (m) |
650.4 |
691.3 |
725.2 |
734.6 |
||
EPS - normalised (p) |
|
|
0.28 |
0.29 |
0.23 |
0.28 |
EPS - normalised fully diluted (p) |
|
|
0.27 |
0.29 |
0.23 |
0.28 |
EPS - (IFRS) (p) |
|
|
(0.23) |
0.00 |
(0.08) |
0.03 |
Dividend per share (p) |
0.0 |
0.0 |
0.0 |
0.0 |
||
Gross Margin (%) |
55.1 |
56.8 |
53.5 |
57.1 |
||
EBITDA Margin (%) |
15.6 |
17.7 |
14.2 |
16.7 |
||
Operating Margin (before GW and except.) (%) |
9.5 |
12.0 |
6.6 |
8.1 |
||
BALANCE SHEET |
||||||
Fixed Assets |
|
|
15,781 |
22,074 |
24,503 |
25,034 |
Intangible Assets |
14,729 |
18,859 |
21,488 |
23,796 |
||
Tangible Assets |
552 |
1,638 |
1,438 |
1,238 |
||
Investments |
500 |
1,577 |
1,577 |
0 |
||
Current Assets |
|
|
16,831 |
16,202 |
14,604 |
14,463 |
Stocks |
0 |
0 |
0 |
0 |
||
Debtors |
7,453 |
10,815 |
10,815 |
10,500 |
||
Cash |
8,250 |
4,996 |
3,398 |
3,572 |
||
Other |
1,128 |
391 |
391 |
391 |
||
Current Liabilities |
|
|
(9,716) |
(11,030) |
(10,144) |
(10,544) |
Creditors |
(9,474) |
(11,030) |
(10,144) |
(10,544) |
||
Short term borrowings |
(242) |
0 |
0 |
0 |
||
Long Term Liabilities |
|
|
(1,888) |
(1,579) |
(1,579) |
(1,579) |
Long term borrowings |
(191) |
0 |
0 |
0 |
||
Other long term liabilities |
(1,697) |
(1,579) |
(1,579) |
(1,579) |
||
Net Assets |
|
|
21,008 |
25,667 |
27,385 |
27,374 |
CASH FLOW |
||||||
Operating Cash Flow |
|
|
353 |
(771) |
1,811 |
4,700 |
Net Interest |
(56) |
179 |
74 |
50 |
||
Tax |
5 |
(105) |
141 |
(47) |
||
Capex |
(2,621) |
(3,800) |
(3,601) |
(3,601) |
||
Acquisitions/disposals |
(500) |
(1,498) |
(928) |
(928) |
||
Financing |
(209) |
3,092 |
905 |
0 |
||
Dividends |
0 |
0 |
0 |
0 |
||
Net Cash Flow |
(3,028) |
(2,903) |
(1,598) |
174 |
||
Opening net debt/(cash) |
|
|
(10,845) |
(7,817) |
(4,996) |
(3,398) |
HP finance leases initiated |
0 |
0 |
0 |
0 |
||
Other |
0 |
82 |
(0) |
0 |
||
Closing net debt/(cash) |
|
|
(7,817) |
(4,996) |
(3,398) |
(3,572) |
Source: Edison Investment Research, company data
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