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SPA has announced that following a successful trial, UK Power Networks has signed a contract to deploy 1Streetworks, 1Spatial’s traffic plan automation application. This is a landmark win for this key SaaS product, the market opportunity for which management sizes at £400m for UK low-speed roads alone. The contract is worth at least £0.34m over 12 months, but with scope to significantly exceed this over time and UK Power Networks advocacy for the product is notable. A growing pipeline of paid trials with other clients provide further evidence that 1Spatial is moving closer to delivering an acceleration in operationally geared recurring revenue growth.
1Spatial |
Landmark 1Streetworks contract |
Contract win |
Software and comp services |
22 February 2024 |
Share price performance
Business description
Next events
Analysts
1Spatial is a research client of Edison Investment Research Limited |
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1Spatial has announced that following a successful trial, UK Power Networks has signed a contract to deploy 1Streetworks, 1Spatial’s traffic plan automation application. This is a landmark win for this key SaaS product, the market opportunity for which management sizes at £400m for UK low-speed roads alone. The contract is worth at least £0.34m over 12 months, but with scope to significantly exceed this over time and UK Power Networks advocacy for the product is notable. A growing pipeline of paid trials with other clients provide further evidence that 1Spatial is moving closer to delivering an acceleration in operationally geared recurring revenue growth.
Year end |
Revenue (£m) |
EBITDA* |
EBIT* |
EPS* |
EV/EBITDA |
P/E |
01/22 |
27.0 |
4.2 |
1.3 |
0.8 |
14.7 |
69.9 |
01/23 |
30.0 |
5.0 |
2.0 |
1.2 |
12.3 |
45.6 |
01/24e |
32.1 |
5.5 |
2.6 |
1.6 |
11.1 |
34.8 |
01/25e |
35.2 |
6.5 |
3.6 |
2.3 |
9.4 |
24.5 |
Note: *EBITDA, EBIT and EPS exclude amortisation of acquired intangibles, exceptional items and share-based payments.
Live deployment, important reference customer
UK Power Networks is a high-profile reference customer for 1Streetworks. The business maintains and operates the electricity networks for London, the South East and East of England. This involves a significant volume of roadworks each of which requires a traffic management plan to be submitted to the local authority. This contract win follows the completion of a trial in Surrey in which the implementation of 1Streetworks reduced the average connection time by 25% across around 300 roadworks sites, while reducing surveyor time spent producing traffic management plans from hours to minutes. Paul Dooley, from UK Power Networks, presented details on this trial and the benefits gained from of using 1Streetworks at 1Spatial’s user conference last November. UK Power Networks SDSW Presentation
Scope for significant expansion, growing pipeline
The minimum value for this contract is £0.34m over 12 months, but we believe this has the potential to expand significantly with good surveyor uptake and adoption in additional regions or departments. 1Spatial also has paid trials ongoing with four other customers, while a number of others are expected to start this year.
Milestone on the way to faster, scalable growth
Further conversion of these opportunities should generate significant incremental, high margin recurring revenues, although, due to the use-based business model, the contribution to FY25 estimates will depend on the timing of deal flow and uptake. We are not changing our estimates at this stage but believe that this milestone, together with the solid progress 1Spatial is making with its enterprise business, brings the company closer to delivering an acceleration in operationally geared recurring revenue growth. We look to further progress with 1Streetworks, and NG-911, the company’s other key SaaS product, as the key milestones for this potential to be reflected in our estimates and the company’s valuation.
Exhibit 1: Financial summary
£’k |
2021 |
2022 |
2023 |
2024e |
2025e |
||
Year end 31 January |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
||
INCOME STATEMENT |
|||||||
Revenue |
|
|
24,600 |
27,027 |
30,002 |
32,132 |
35,185 |
Cost of Sales |
(11,451) |
(13,078) |
(14,504) |
(14,620) |
(15,657) |
||
Gross Profit |
13,149 |
13,949 |
15,498 |
17,512 |
19,528 |
||
EBITDA |
|
|
3,632 |
4,182 |
4,997 |
5,541 |
6,539 |
Normalised operating profit |
|
|
435 |
1,302 |
2,026 |
2,588 |
3,586 |
Amortisation of acquired intangibles |
(917) |
(561) |
(386) |
(386) |
(386) |
||
Exceptionals |
(492) |
0 |
(194) |
0 |
0 |
||
Share-based payments |
(272) |
(326) |
(192) |
(192) |
(192) |
||
Reported operating profit |
(1,246) |
415 |
1,254 |
2,010 |
3,008 |
||
Net Interest |
(187) |
(195) |
(210) |
(215) |
(227) |
||
Joint ventures & associates (post tax) |
0 |
0 |
0 |
0 |
0 |
||
Exceptionals |
0 |
0 |
0 |
0 |
0 |
||
Profit Before Tax (norm) |
|
|
248 |
1,107 |
1,816 |
2,373 |
3,358 |
Profit Before Tax (reported) |
|
|
(1,433) |
220 |
1,044 |
1,795 |
2,780 |
Reported tax |
308 |
163 |
14 |
(381) |
(695) |
||
Profit After Tax (norm) |
198 |
886 |
1,362 |
1,779 |
2,519 |
||
Profit After Tax (reported) |
(1,125) |
383 |
1,058 |
1,414 |
2,085 |
||
Minority interests |
0 |
0 |
0 |
0 |
0 |
||
Discontinued operations |
0 |
0 |
0 |
0 |
0 |
||
Net income (normalised) |
198 |
886 |
1,362 |
1,779 |
2,519 |
||
Net income (reported) |
(1,125) |
383 |
1,058 |
1,414 |
2,085 |
||
Basic average number of shares outstanding (m) |
112 |
111 |
111 |
111 |
111 |
||
EPS - basic normalised (p) |
|
|
0.18 |
0.80 |
1.23 |
1.61 |
2.27 |
EPS - diluted normalised (p) |
|
|
0.17 |
0.77 |
1.20 |
1.57 |
2.22 |
EPS - basic reported (p) |
|
|
(1.01) |
0.35 |
0.95 |
1.28 |
1.88 |
Dividend (p) |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
||
Revenue growth (%) |
5.2 |
9.9 |
11.0 |
7.1 |
9.5 |
||
Gross Margin (%) |
53.5 |
51.6 |
51.7 |
54.5 |
55.5 |
||
EBITDA Margin (%) |
14.8 |
15.5 |
16.7 |
17.2 |
18.6 |
||
Normalised Operating Margin (%) |
1.8 |
4.8 |
6.8 |
8.1 |
10.2 |
||
BALANCE SHEET |
|||||||
Fixed Assets |
|
|
18,273 |
17,100 |
19,319 |
20,235 |
21,151 |
Intangible Assets |
15,187 |
15,003 |
17,408 |
18,372 |
19,336 |
||
Tangible Assets |
3,086 |
2,097 |
1,911 |
1,863 |
1,815 |
||
Investments & other |
0 |
0 |
0 |
0 |
0 |
||
Current Assets |
|
|
18,332 |
18,018 |
19,222 |
21,370 |
23,461 |
Stocks |
0 |
0 |
0 |
0 |
0 |
||
Debtors |
10,890 |
12,271 |
14,151 |
16,110 |
16,114 |
||
Cash & cash equivalents |
7,278 |
5,623 |
5,036 |
5,225 |
7,312 |
||
Other |
164 |
124 |
35 |
35 |
35 |
||
Current Liabilities |
|
|
14,813 |
14,903 |
17,093 |
18,911 |
19,641 |
Creditors |
13,418 |
13,284 |
15,797 |
16,558 |
17,288 |
||
Tax and social security |
0 |
0 |
0 |
0 |
0 |
||
Short term borrowings |
470 |
531 |
660 |
1,745 |
1,745 |
||
Other |
925 |
1,088 |
636 |
608 |
608 |
||
Long Term Liabilities |
|
|
7,057 |
5,110 |
4,097 |
3,737 |
3,737 |
Long term borrowings |
2,542 |
1,861 |
1,322 |
962 |
962 |
||
Other long term liabilities |
4,515 |
3,249 |
2,775 |
2,775 |
2,775 |
||
Net Assets |
|
|
14,735 |
15,105 |
17,351 |
18,957 |
21,234 |
Minority interests |
0 |
0 |
0 |
0 |
0 |
||
Shareholders’ equity |
|
|
14,735 |
15,105 |
17,351 |
18,957 |
21,234 |
CASH FLOW |
|||||||
Op Cash Flow before WC and tax |
2,961 |
4,048 |
4,593 |
5,326 |
6,311 |
||
Working capital |
791 |
(1,578) |
537 |
(1,198) |
726 |
||
Exceptional & other |
52 |
(107) |
12 |
0 |
0 |
||
Tax |
484 |
176 |
179 |
(381) |
(695) |
||
Net operating cash flow |
|
|
4,288 |
2,539 |
5,321 |
3,747 |
6,342 |
Capex |
(2,312) |
(2,613) |
(4,017) |
(3,255) |
(3,255) |
||
Acquisitions/disposals |
(585) |
0 |
0 |
0 |
0 |
||
Net interest |
0 |
0 |
0 |
0 |
0 |
||
Equity financing |
0 |
0 |
14 |
0 |
0 |
||
Dividends |
0 |
0 |
0 |
0 |
0 |
||
Other |
585 |
(1,708) |
(1,994) |
(303) |
(1,000) |
||
Net Cash Flow |
1,976 |
(1,782) |
(676) |
189 |
2,087 |
||
Opening net debt/(cash) |
|
|
(3,887) |
(4,403) |
(3,231) |
(3,054) |
(2,518) |
FX |
194 |
127 |
89 |
0 |
0 |
||
Other non-cash movements |
(1,654) |
483 |
410 |
(725) |
0 |
||
Closing net debt/(cash) |
|
|
(4,403) |
(3,231) |
(3,054) |
(2,518) |
(4,605) |
Source: Edison Investment Research, company accounts
|
|
Research: Healthcare
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