new-york-city-1030778_1920 (1)

Making GIS data useable for a variety of verticals

1Spatial 28 September 2022 Update
Download PDF

1Spatial

Making GIS data useable for a variety of verticals

H123 interims

Technology

28 September 2022

Price

41p

Market cap

£45m

Net cash (£m) at 31 July 2022 excluding lease liabilities

2.3

Shares in issue

110.5m

Free float

79%

Code

SPA

Primary exchange

AIM

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

(2.4)

(11.5)

(3.4)

Rel (local)

9.6

(7.0)

3.1

52-week high/low

53.5p

36.0p

Business description

1Spatial’s core technology validates, rectifies and enhances customers’ geospatial data. The combination of its software and advisory services reduces the need for costly manual checking and correcting of data.

Next events

FY23 trading update

March 2023

Analysts

Dan Ridsdale

+44 (0)20 3077 5729

Ken Mestemacher, CFA

+44 (0)20 3077 5700

1Spatial is a research client of Edison Investment Research Limited

1Spatial (SPA) delivered another period of robust results in H123, with annualised recurring revenue (ARR) up 29% y-o-y, revenues growing 11% and EBITDA rising 10%. 1Spatial’s success in driving transformational growth was marked by several contract wins with significant amounts of recurring revenue, the expansion of smart partnerships and further penetration of the US market. We maintain our FY23 and FY24 estimates and watch for catalysts that signal 1Spatial’s plan is continuing to bear fruit. Although 1Spatial trades at a discount to peers, we expect there could be a reduction in the gap if management continues successfully executing its growth strategy.

Year end

Revenue (£m)

EBITDA*
(£m)

EBIT*

(£m)

EPS*

(p)

P/revenue

(x)

EV/EBITDA

(x)

P/E

(x)

01/21

24.6

3.6

0.4

0.2

1.8

11.8

236.4

01/22

27.0

4.2

1.3

0.8

1.7

10.3

53.0

01/23e

29.0

4.9

2.0

1.2

1.6

8.8

33.9

01/24e

31.2

5.7

2.7

2.3

1.5

7.5

17.9

Note: *EBITDA, EBIT and EPS exclude amortisation of acquired intangibles, exceptional items and share-based payments.

H123: Growth in recurring revenues drive results

In the second year of 1Spatial’s three-year growth plan, 1Spatial delivered solid growth in recurring revenues across the globe. Total ARR was up 29% y-o-y to £15.2m, supported by UK/Ireland ARR climbing 58% and US ARR gaining 27% (both at constant currency) in H123. Total revenues were lifted 11% y-o-y to £14m.

Maintaining our FY23 and FY24 estimates

Management reiterated its FY23 expectations and with a healthy pipeline in place and recent contract wins lifting 1Spatial’s ARR, we also maintain our current estimates, including 7% and 8% growth in FY23 and FY24, respectively. Management’s ‘land and expand’ strategy in the US continued delivering contract wins marked by substantial future scalable and recurring revenues. The expansion of 1Spatial’s smart partnerships has continued, adding further credibility to management’s growth strategy.

Making data useful is where value is found

We see the GIS market as poised for rapid growth, driven by the substantial growth of data generated every day by sensors, the Internet of Things and mobile devices, and we estimated the GIS market could grow 20%+ pa over the next decade. We believe untapped value is found in companies like 1Spatial that operate in a niche position and can turn GIS data into something useful for a wide variety of use cases.

Valuation: Potential for reducing the valuation gap

1Spatial trades at 1.6x FY23e revenue, less than half its software and data management peers. A peer multiple of 3.6x implies a 97p share price, a 133% premium to the current price. While some of the lower multiples could reflect 1Spatial’s lower projected growth versus peers, we expect there could be a reduction in the gap if 1Spatial keeps developing smart partnerships and further expanding in the US.

Results driven by 29% cc growth in recurring revenues

Continuing its transformational growth journey, 1Spatial generated solid results in H123 (see Exhibit 1). In what is the second year of management’s three-year growth plan, revenue was up double-digits over H122 (11% constant and in local currency), driven by £6.6m in recurring revenues (up 18% y-o-y) and £1.7m in term licence revenue (up 67% y-o-y). 1Spatial’s successful geographic expansion continued, with key regions UK/Ireland rising 26% (in constant currency terms) and the US growing 6% (constant currency), while Europe was up 2% (constant currency).

Total ARR, a key performance indicator marking 1Spatial’s ongoing transformation to a software-as-a-service (SaaS) business with a growing portion of recurring revenue, reached £15.2m, up 29% yo-y, with term licence ARR more than doubling year-on-year to £5.2m.

Gross margins fell about 110bp y-o-y to 49.5%, as inflationary pressures, employee retention efforts and global macroeconomic events affected costs. While 1Spatial was able to increase pricing somewhat, the timing of those increases will be felt more in H223. Adjusted EBITDA was lifted 10% y-o-y to £2.0m, with margins down slightly to 14.4%. 1Spatial reported EPS of 0.19p, up from a 0.18p loss in H122.

Free cash flow (FCF) improved to a £0.88m outflow from a £1.42m outflow in H122 due to increasing revenues, though offset by higher working capital requirements for recent large deals, increased investments in R&D and increased staffing costs. Net cash fell slightly to £2.3m from H122’s £2.8m due to the aforementioned factors. FCF and net cash for the remainder of the year depend on the swings in working capital and the cash impact of recently signed large deals.

Exhibit 1: Summary of H123 results

£m

H123

H122

Y-o-y

Revenues

14.0

12.3

11%

Total ARR*

15.2

11.8

29%

UK/Ireland ARR

6.3

4.0

58%

US ARR

2.1

1.7

27%

Europe ARR

5.1

4.8

6%

Australia ARR

1.7

1.3

30%

Term licences ARR

5.2

2.4

115%

Gross profit

7.0

6.4

9%

Gross margin %

49.5

50.6

(1.1)%

Adjusted EBITDA

2.0

1.8

10%

Adjusted EBITDA margin %

14.4

14.5

(0.1)%

Normalised operating profit (adjusted EBIT)

0.7

0.4

87%

Normalised net income

0.5

0.2

126%

Reported net income

0.2

(0.2)

N/A

Basic reported EPS (p)

0.2

(0.2)

N/A

FCF

(0.9)

(1.4)

N/A

Net cash

2.3

2.8

(17)%

Source: 1Spatial, Edison Investment Research. Note: *ARR includes committed recurring contracts for term licenses and support & maintenance.

US and UK continue producing scalable growth

As noted in our previous report, the US provides a great opportunity for 1Spatial to drive scalable growth, and is a key factor in its ‘land and expand’ strategy. Management has previously won contracts in several influential US states, including California and Michigan, for solutions such as 1Spatial’s Next Generation 911 Emergency Services system (NG 911).

1Spatial generated a steady stream of wins during H123 from new and existing customers across the US (see Exhibit 2), with the majority expected to provide substantial future recurring revenues. Notable wins included: a $1.4m expansion contract with California’s Department of Transportation (DOT) won via a partnership with Rizing, a five-year contract with the University of Maryland’s CATT labs worth an initial $0.6m, the first contracts with the States of New York (for various proof of concepts) and Arkansas, the eighth US state to choose the NG911 solution. Notably, 1Spatial also closed post-period deals with Massachusetts DOT for $0.4m as part of the Eastern Transportation Coalition (a partnership of 18 states and Washington DC, with a potential total value of up to $15m over eight years), and a first contract with the State of Indiana for proof-of-concept projects. These wins indicate that 1Spatial’s strategic plan in the US continues to be successful.

The UK also saw strong growth during H123. Contract wins included £0.9m over two years with High Speed 2 (HS2) to build a data validation gateway, with potential for further expansion, and a multi-year call-off contract with the Department for Environment, Food and Rural Affairs (DEFRA) that enables DEFRA and associates to license 1Integrate and procure data management implementation services through G-Cloud 12. Progress also continues on two major contracts signed last year (UK government and the National Underground Asset Register (NUAR)) with both expected to provide future growth opportunities.

Management also continues planning the launch of 1Spatial’s multi-tenancy SaaS-based solutions in H223, including NextGen 911 and Traffic Management plan, expected to provide significant future growth.

Exhibit 2: Notable recent contract wins

Period

Date

Contract Win

Total amount

(local currency, m)

Contract length

(years)

H223

TBD

State of Indiana

TBD

TBD

H223

5-Sep-22

Massachusetts DOT (Eastern Transport Coalition framework)

$0.4

8

H123

5-Sep-22

State of Arkansas

$1.2

7

H123

19-Jul-22

Major European Aerospace Company

€3.0

5

H123

11-Jul-22

CATT Lab at University of Maryland

$0.6

5

H123

8-Jun-22

High Speed 2

£0.9

4

H123

23-May-22

State of New York

Not released

Not released

H123

11-May-22

California DOT

$1.4

4

H123

16-Feb-22

State of Montana

$0.8

3

H222

7-Dec-21

Rural Payments Agency

£0.6

2

H222

13-Oct-21

Northern Ireland's Land and Property Services

-

7

H222

27-Sep-21

Department of UK Government

£8.0

5

H222

13-Sep-21

Geospatial Commission, NUAR

£6.5

3

Source: 1Spatial, Edison Investment Research

Reference contract wins and partnerships boost credibility

Management won several sizable contracts that provide excellent referenceability as well as long-term ARRs, including with HS2, a major European aerospace company, the State of New York and a framework contact with the Eastern Transportation Coalition. For instance, New York, California and Michigan are very influential among US states, and we believe those contract wins should boost the prospects of 1Spatial’s continued expansion in the US to other states, as evidenced by the recent win in Arkansas.

Furthermore, 1Spatial’s ‘smart partnerships’ continued to expand with large customers and partners, both providing deal flow and adding credibility to management’s growth strategy. As we discussed in a prior note, one pillar of 1Spatial’s growth strategy is to collaborate with select partners in bidding on large contracts where 1Spatial’s role is to be a data integrity provider. In management’s view, 1Spatial’s reputation as ‘best in breed’ continues to be why it is chosen to perform this key role. For instance, management recently signed a teaming agreement with CGI, one of the world’s largest independent IT and business consulting services firms, to be a strategic delivery provider on a five-year contract with the UK Home Office. 1Spatial also started working in partnership with ATOS, a global leader in digital transformation, and Rizing, a global SAP partner. Notably, the contract win with California DOT in May 2022 was won in conjunction with Rizing.

GIS industry: Finding value in making data more usable

We believe the GIS industry is exciting and poised to grow rapidly. Every day, an explosion of data is generated, with billions of data sets from satellites, sensors, big data, mobile devices, the Internet of Things and connected vehicles. Management estimates that 80% of data sets have some sort of locational component, whether it be a vehicle’s position, the location of a city’s assets, the weather, the nearest tower to a cell phone, and identification of approved or unapproved individuals in a university or company warehouse. And the rate and amounts of GIS data generated and collected will only continue to increase over time; we believe market growth rates could reach 20%+ over the next decade.

Because large amounts of raw GIS data are being collected and generated every day, a significant opportunity lies in managing and organising that data to make it useable by companies, analysts and the general public. The ability to turn GIS data into something useful for applications and insights is where we believe value lies. This includes preparing data for useability by machine learning and artificial intelligence, for farmers and agricultural firms who want location data to improve crop yields and efficiencies, for governments that want up to date intelligence on developments across the globe (eg Ukraine war), etc. These expanding use cases require higher-quality GIS data, as customers want to be confident that what they get is accurate and free from errors, which is where 1Spatial’s proven ability to validate, rectify, correct and enhance GIS data becomes valuable.

Finally, the GIS industry is fragmented, made up of several hundred firms involved in different aspects of the industry with no two to three firms dominating the entire market. As such, it presents small and medium investors with numerous opportunities to gain GIS market exposure, including 1Spatial and others who can dominate their niche sectors.

Financials: Maintaining our estimates

Management reiterated that it remains confident in delivering FY23 results in line with expectations. Based on 1Spatial’s solid H123 results, we maintain our forecasts, although we make a small tweak to deferred compensation for post-period activity. This change does not affect earnings but it does slightly impact cash from operations. The company’s pipeline seems healthy with several potential deals from across the globe, and the two post-period-end deals for Massachusetts DOT ($0.4m with a potential contract value of $15m over eight years as part of the Eastern Transportation Coalition) and State of Indiana for proof-of-concept projects provide a head-start for H223. While 1Spatial continues building up layers of recurring revenues from contract wins, we do recognize that global macro events and inflationary pressures could have an impact on 1Spatial’s growth and margins. On the other hand, the repeatable nature of many of the deal wins indicates there is likely more to come and our estimates may prove to be conservative.

We continue to forecast £29m in FY23e revenues, up 7% from FY22, with EBITDA reaching £4.9m. However, we reduce our period-end net cash to £3.1m from £3.5m due to the aforementioned post-period activity. We also project the adjusted FCF (which excludes the deferred compensation) pattern to change from an outflow in H123 to an inflow in H223, leading to about £0.3m in FY23e adjusted FCF. FY24e should maintain the same trend, with sales up 8% to £31.2m and EBITDA of £5.7m.

Valuation: Patience could be rewarded

At a price of 41.0p, 1Spatial trades at about 1.6x FY23e revenue, less than half of its software and data management peers at 3.6x (see Exhibit 3). 1Spatial trades at an 8.8x FY23e EV/EBITDA multiple, a 43% discount to its peers such as Hexagon and IQGeo (see Exhibit 4). Some of the multiple gap could reflect 1Spatial’s smaller size or lower FY23e projected growth (7% vs peers at 12%).

Exhibit 3: Price/revenue multiples versus peers

Exhibit 4: EV/EBITDA multiples versus peers

Source: Refinitiv, Edison Investment Research, as of 26 September 2022

Source: Refinitiv, Edison Investment Research, as of 26 September 2022

Exhibit 3: Price/revenue multiples versus peers

Source: Refinitiv, Edison Investment Research, as of 26 September 2022

Exhibit 4: EV/EBITDA multiples versus peers

Source: Refinitiv, Edison Investment Research, as of 26 September 2022

If 1Spatial continues growing its base of recurring revenues, generating significant contract wins in the UK and US, and keeps expanding in the US by adding scalable opportunities such as NextGen 911, we expect there could be a reduction in the valuation gap. However, closing the revenue multiple gap could take time, although our forecast for growth in FY24e (8% vs 9% consensus for peers) may bode well for 1Spatial’s efforts to reduce the disparity in growth.

Reaching an FY23e sector average price/revenue multiple of 3.6x would imply a share price of 97 pence, a 133% premium to the current price. If 1Spatial keeps developing its smart partnerships and/or adds more reference wins to its track record than we expect, then a future re-rating is possible.

Exhibit 5: Financial summary

£'000s

2021

2022

2023e

2024e

Year ending 31 January

IFRS

IFRS

IFRS

IFRS

PROFIT & LOSS

Revenue

 

 

24,600

27,027

29,000

31,200

Delivery costs

(11,451)

(13,078)

(14,094)

(15,101)

Gross Profit

13,149

13,949

14,906

16,099

EBITDA

 

 

3,632

4,182

4,906

5,699

Operating profit (before amort. and excepts.)

 

436

1,302

1,967

2,720

Goodwill and Acquired Intangible Amortisation

(917)

(561)

(600)

(600)

Exceptionals

(492)

-

-

-

Share based payments

(272)

(326)

(360)

(410)

Operating Profit

(1,245)

415

1,007

1,710

Net Interest

(187)

(195)

(186)

(186)

Other

-

-

-

-

Profit Before Tax (norm)

 

 

248

1,107

1,780

2,533

Profit Before Tax (FRS 3)

 

 

(1,433)

220

820

1,523

Tax

308

(43)

(205)

(381)

Profit After Tax (norm)

198

886

1,335

2,527

Profit After Tax (FRS 3)

(1,125)

177

615

1,142

Average Number of Shares Outstanding (m)

112

111

111

111

EPS - normalised (p)

 

 

0.18

0.80

1.21

2.29

EPS - normalised fully diluted (p)

 

 

0.17

0.77

1.21

2.29

EPS - (IFRS) (p)

 

 

(1.01)

0.16

0.56

1.03

Dividend per share (p)

-

-

-

-

Gross Margin (%)

53.5

51.6

51.4

51.6

EBITDA Margin (%)

14.8

15.5

16.9

18.3

Operating Margin (before GW and except.) (%)

1.8

4.8

6.8

8.7

BALANCE SHEET

Fixed Assets

 

 

18,273

17,100

17,850

18,600

Intangible Assets

15,187

15,003

15,753

16,503

Tangible Assets

392

350

350

350

Investments

2,694

1,747

1,747

1,747

Current Assets

 

 

18,332

18,018

18,865

20,883

Stocks

-

-

-

-

Debtors

10,890

12,271

13,200

14,200

Cash

7,278

5,623

5,541

6,559

Other

164

124

124

124

Current Liabilities

 

 

(14,813)

(14,903)

(15,129)

(15,879)

Creditors & other

(14,343)

(14,372)

(14,598)

(15,348)

Short term borrowings

(470)

(531)

(531)

(531)

Long Term Liabilities

 

 

(7,057)

(5,110)

(5,398)

(6,416)

Long term borrowings

(2,542)

(1,861)

(1,861)

(1,861)

Other long term liabilities

(4,515)

(3,249)

(3,537)

(4,555)

Net Assets

 

 

14,735

15,105

16,188

17,188

CASH FLOW

Operating Cash Flow

 

 

3,983

2,497

4,173

5,449

Net Interest

(179)

(134)

(186)

(186)

Tax

484

176

(205)

(381)

Capex

(2,312)

(2,613)

(2,764)

(2,764)

Acquisitions/disposals

(585)

-

-

-

Financing

-

-

-

-

Dividends

-

-

-

-

Other (Repayment of Leases, etc)

(1,069)

(1,088)

(1,100)

(1,100)

Net Cash Flow

322

(1,162)

(82)

1,018

Opening net debt/(cash)

 

 

(3,886)

(4,266)

(3,231)

(3,149)

HP finance leases initiated

-

-

-

-

Other

58

127

-

-

Closing net debt/(cash)

 

 

(4,266)

(3,231)

(3,149)

(4,167)

Source: 1Spatial, Edison Investment Research


General disclaimer and copyright

This report has been commissioned by 1Spatial and prepared and issued by Edison, in consideration of a fee payable by 1Spatial. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2022 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

General disclaimer and copyright

This report has been commissioned by 1Spatial and prepared and issued by Edison, in consideration of a fee payable by 1Spatial. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2022 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Share this with friends and colleagues

You may be interested in