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Research: TMT
1Spatial has won its first two contracts for 1Streetworks, the company’s SaaS-based Traffic Management Plan Automation product. This is an important development for the company in that the potential addressable market for this product is large; management estimates around £250m for low speed roads in the UK alone and 1Spatial looks well positioned to gain a significant market share. 1Streetworks also runs on the company’s newly launched cloud-based platform, representing an important milestone in 1Spatial’s migration to a scalable, SaaS-based model. Both contracts are for a three-month term initially, with the intention to move to annual or multi-year contracts upon successful completion. We are not changing our estimates at this stage. Further deal flow for 1Streetworks (or other SaaS products), together with the continuation of these initial deals to longer engagements, could be the catalyst for stronger growth and margin expansion to become priced in.
Written by
1Spatial |
First wins for key SaaS product |
Contract wins |
TMT |
19 June 2023 |
Share price performance
Business description
Analysts
1Spatial is a research client of Edison Investment Research Limited |
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1Spatial has won its first two contracts for 1Streetworks, the company’s SaaS-based Traffic Management Plan Automation product. This is an important development for the company in that the potential addressable market for this product is large; management estimates around £250m for lowspeed roads in the UK alone and 1Spatial looks well positioned to gain a significant market share. 1Streetworks also runs on the company’s newly launched cloud-based platform, representing an important milestone in 1Spatial’s migration to a scalable, SaaS-based model. Both contracts are for a three-month term initially, with the intention to move to annual or multi-year contracts upon successful completion. We are not changing our estimates at this stage. Further deal flow for 1Streetworks (or other SaaS products), together with the continuation of these initial deals to longer engagements, could be the catalyst for stronger growth and margin expansion to become priced in.
Year |
Revenue |
EBITDA (£m) |
EBIT* |
EPS* |
EV/EBITDA |
P/E |
01/22 |
27.0 |
4.2 |
1.3 |
0.8 |
12.1 |
60.5 |
01/23 |
30.0 |
5.0 |
2.0 |
1.2 |
10.1 |
39.5 |
01/24e |
31.4 |
5.2 |
2.2 |
1.4 |
9.7 |
35.2 |
01/25e |
33.6 |
6.2 |
3.3 |
2.1 |
8.1 |
23.3 |
Note: *EBIT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
1Streetworks automates the production of traffic management plans, diversion routing and asset inventory lists in the UK and is one of the company’s first products using its new cloud-based platform. The product is built using 1Spatial’s core technology: the 1Integrate, a geospatial rules engine. Development of the product involved at least 18-months work in translating the rules from the ‘Red Book’ (Safety at Street Works and Road Works) into 1Integrate and, hence, we believe barriers to entry for replicating this product should be meaningful.
The contracts are with a major utility network operator and a large traffic management organisation. 1Streetworks will initially be piloted for an initial threemonth period, with management expecting this to move to annual or multiyear contracts if these initial engagements are successful.
The addressable market for 1Streetworks is potentially transformative for 1Spatial. Firstly, the return on investment from deploying the software should be strong. Management estimates that the automation process can reduce the creation of a traffic management plan to minutes, rather than hours or days. They estimate the addressable market for the product on low-speed roads in the UK alone is c £250m. Initial work to expand the product to cover high-speed roads or new geographies with similar rules to the UK has already started. With the foundational work done, digitising new (similar) rule sets is expected to take substantially less time.
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