Currency in GBP
Last close As at 07/06/2023
GBP0.49
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GBP54m
Research: TMT
1Spatial has announced a sizeable contract with a major European aerospace company worth circa €3m over five years. Notably, the deal is the first major win for the company’s new 1Telecomms solution (together with 1Integrate) supporting a win in the aerospace industry, a new vertical for the business. We believe that this provides evidence that the company’s development of app solutions can broaden the company’s addressable market. We believe that the broader market for geospatial solutions is set to deliver sustained double-digit growth and that 1Spatial’s is carving out an increasingly strong position within the market. We believe that the company’s current valuation (FY23e EV/sales 1.8x) does not reflect 1Spatial’s potential.
1Spatial |
Flying high with a major EU aerospace company |
Contract win |
Technology |
19 July 2022 |
Share price performance Business description
Analysts
1Spatial is a research client of Edison Investment Research Limited |
1Spatial has announced a sizeable contract with a major European aerospace company worth circa €3m over five years. Notably, the deal is the first major win for the company’s new 1Telecomms solution (together with 1Integrate) supporting a win in the aerospace industry, a new vertical for the business. We believe that this provides evidence that the company’s development of app solutions can broaden the company’s addressable market. We believe that the broader market for geospatial solutions is set to deliver sustained double-digit growth and that 1Spatial’s is carving out an increasingly strong position within the market. We believe that the company’s current valuation (FY23e EV/sales 1.8x) does not reflect 1Spatial’s potential.
Year end |
Revenue |
EBITDA* (£m) |
EBIT* |
EPS* |
EV/sales |
EV/EBITDA (x) |
P/E |
01/21 |
24.6 |
3.6 |
0.4 |
0.2 |
2.1 |
13.4 |
270.9 |
01/22 |
27.0 |
4.2 |
1.3 |
0.8 |
1.9 |
11.6 |
60.8 |
01/23e |
29.0 |
4.9 |
2.0 |
1.2 |
1.8 |
9.9 |
38.9 |
01/24e |
31.2 |
5.7 |
2.7 |
2.3 |
1.7 |
8.5 |
20.6 |
Note: *EBITDA, EBIT and EPS exclude amortisation of acquired intangibles, exceptional items and share-based payments.
Notably, the deal ties together two of 1Spatial’s key offerings – its flagship data management and migration product (1Integrate) and one of its new app solutions, in this case 1Telecomms. The client will use the solution together with the ESRI GIS platform as a basis for establishing a new telecom asset management software system covering four countries. The project consists of two phases across the five years: the implementation phase (FY23) will include the use of 1Integrate for the data migration and data management aspects of the implementation. Once that is complete, the 1Telecomms solution will help the client manage its telecom assets across FY24–27.
The deal with a key European commercial client marks the first major win for the company's 1Telecomms solution, providing good evidence that the company’s development of business applications can enlarge the company’s total addressable market. Other applications include 1Water, Next Generation 9-1-1, US Highways Performance Management, Traffic Management and Crash Mapping.
The €3m deal consists of c €0.7m in implementation services (FY23), then c €0.6m per year from FY24–27 in recurring software licence and managed services revenue.
The deal provides further support for our estimates for this year and beyond and we believe that 1Spatial’s potential for delivering robust, scalable growth continues to strengthen. The company is positioned at the intersection of two large, high-growth markets in geospatial and master data management, and continues to win flagship clients in the US, UK and EU. The company is making good progress in migrating its revenue mix towards repeatable or recurring software sales and we believe its current valuation of 1.8x FY23e EV/sales does not reflect its growth and margin expansion potential.
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