Last close As at 05/08/2026
EUR0.77
▲ −0.03 (−3.75%)
Market capitalisation
—
Research: TMT
FY19 represented a year of good strategic and financial progress for 1Spatial. It divested Enables IT, raised capital and shifted to subscription licensing, all while increasing revenue and EBITDA margins. Investment in innovative 3D, LMDM and mobile projects should begin to bear fruit in FY20 and ensure that this progress continues. The recent acquisition of Geomap-Imagis (GI) further enhances its technical capability. Factoring GI into our forecasts helps raise our FY21e adjusted EPS by 14% to 1.0p.
Written by
1Spatial |
Strategic and financial progress |
FY19 results |
Software & comp services |
14 May 2019 |
Share price performance
Business description
Next events
Analysts
1Spatial is a research client of Edison Investment Research Limited |
|||||||||||||||||||||||||||||||||||||||||||||||||
FY19 represented a year of good strategic and financial progress for 1Spatial. It divested Enables IT, raised capital and shifted to subscription licensing, all while increasing revenue and EBITDA margins. Investment in innovative 3D, LMDM and mobile projects should begin to bear fruit in FY20 and ensure that this progress continues. The recent acquisition of Geomap-Imagis (GI) further enhances its technical capability. Factoring GI into our forecasts helps raise our FY21e adjusted EPS by 14% to 1.0p.
Year end |
Revenue (£m) |
EBITDA* |
PBT* |
EPS* |
EV/Sales |
EV/EBITDA |
P/E |
01/18 |
16.9 |
0.4 |
(1.5) |
(2.3) |
2.0 |
85.6 |
N/A |
01/19 |
17.6 |
1.2 |
(0.9) |
(1.1) |
2.0 |
29.0 |
N/A |
01/20e |
22.8 |
2.1 |
0.8 |
0.7 |
1.5 |
16.6 |
51.4 |
01/21e |
25.6 |
2.7 |
1.4 |
1.0 |
1.3 |
12.6 |
36.0 |
Note: *EBITDA (adjusted), PBT and EPS (fully diluted) are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments. Forecasts include the consolidation of Geomap-Imagis from May 2019 onwards.
Financial progress
Reported revenue growth of 4.1% y-o-y does not provide the full picture. The adoption of IFRS 15 and the US government shutdown each affected growth by c 1%. In addition, from June 2018 the company began shifting away from selling one-off perpetual licences to focus on recurring licences, reducing upfront revenues to enhance long-term visibility. Adjusted EBITDA margins rose to 6.7% (4.4pp) y-o-y, driven primarily by a £0.6m reduction in operating costs.
Strategic progress
1Spatial made substantial progress against its transition plan in FY19. Divestment of Enables IT and capital-raising enhanced its focus, enabling increased investment in innovative 3D, location master data management (LMDM) and mobile initiatives, which should begin to bear fruit in FY20. The recent GI acquisition further enhances its capability with Esri platforms, market presence and scale. Significantly it should help stabilise 1Spatial’s performance in France and Belgium, where revenues fell 11% y-o-y in FY19 (see our note Fixing France – further evidence of execution).
Forecasts: GI raises FY21e adjusted EPS by 14%
Reflecting a full year of consolidation for GI and a modest adjustment to underlying estimates raises our FY21 EBITDA estimate by 24% and adjusted EPS by 14% to 1.0p (see Exhibit 1). We now forecast FCF of £0.7m in FY21 (vs £0.2m previously).
Valuation: Rating yet to reflect execution
1Spatial’s results highlight growing evidence of execution against its transition plan. While the shares have performed well since the GI acquisition (up 11%), at 1.3x FY21e EV/sales, the rating does not yet reflect this in our view. Based on an analysis of its peers, delivering a sector average EBITDA margin (c 15%) would justify a 2.0x EV/Sales multiple and a share price of 50p, c 39% above the current price.
Changes to forecasts
Exhibit 1 highlights the changes to headline forecasts, predominantly reflecting the consolidation of GI from May 2019 onwards. We conservatively assume a 29% or £5.7m increase in FY21 revenues and, including only very modest assumptions on cost savings, a 24% rise in EBITDA. Factoring in the issue of 12m additional shares (12%), our FY21 adjusted EPS estimate rises by 14% to 1.0p.
Exhibit 1: Changes to forecasts
FY19 |
FY20e |
FY21e |
|||||||
Old |
Change |
New |
Change (%) |
Old |
Change |
New |
Change (%) |
||
Revenue (£m) |
17.6 |
18.8 |
4.0 |
22.8 |
21.5 |
19.9 |
5.7 |
25.6 |
28.8 |
Adjusted EBITDA* (£m) |
1.2 |
1.7 |
0.4 |
2.1 |
22.4 |
2.2 |
0.5 |
2.7 |
24.1 |
Adjusted PBT* (£m) |
(0.9) |
0.5 |
0.3 |
0.8 |
58.7 |
1.1 |
0.3 |
1.4 |
24.5 |
Adjusted EPS* (p) |
(1.1) |
0.4 |
0.3 |
0.7 |
85.5 |
0.9 |
0.1 |
1.0 |
13.9 |
Source: Edison Investment Research. Note:*EBITDA, PBT and EPS (fully diluted) are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments. GI contribution from May 2019.
Exhibit 2: Financial summary
£'000s |
2016 |
2017 |
2018 |
2019 |
2020e |
2021e |
||
31-January |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
||
PROFIT & LOSS |
||||||||
Revenue |
|
|
18,300 |
15,133 |
16,938 |
17,624 |
22,836 |
25,638 |
Delivery costs |
(7,715) |
(6,868) |
(7,994) |
(8,449) |
(10,753) |
(12,325) |
||
Gross Profit |
10,585 |
8,265 |
8,944 |
9,175 |
12,083 |
13,313 |
||
Adjusted EBITDA |
|
|
2,902 |
(874) |
403 |
1,188 |
2,080 |
2,731 |
Operating Profit (before amort. and except.) |
|
|
1,584 |
(12,494) |
(1,302) |
(738) |
731 |
1,357 |
Acquired Intangible Amortisation |
(200) |
0 |
0 |
0 |
0 |
0 |
||
Exceptionals |
(1,081) |
(2,590) |
(1,041) |
(672) |
(500) |
0 |
||
Share based payments |
(976) |
(566) |
538 |
(218) |
(218) |
(218) |
||
Operating Profit |
(673) |
(15,650) |
(1,805) |
(1,628) |
13 |
1,139 |
||
Net Interest |
(27) |
(25) |
(151) |
(191) |
64 |
14 |
||
Other |
(421) |
(266) |
0 |
0 |
0 |
0 |
||
Profit Before Tax (norm) |
|
|
1,136 |
(12,785) |
(1,453) |
(929) |
794 |
1,370 |
Profit Before Tax (FRS 3) |
|
|
(1,121) |
(15,941) |
(1,956) |
(1,819) |
77 |
1,153 |
Tax |
503 |
1,081 |
753 |
389 |
150 |
150 |
||
Profit After Tax (norm) |
1,136 |
(12,785) |
(1,453) |
(929) |
779 |
1,139 |
||
Profit After Tax (FRS 3) |
(618) |
(14,860) |
(1,203) |
(1,430) |
227 |
1,303 |
||
Average Number of Shares Outstanding (m) |
691.3 |
728.9 |
63.3 |
87.4 |
104.9 |
111.2 |
||
EPS - normalised (p) |
|
|
0.16 |
(1.75) |
(2.30) |
(1.06) |
0.74 |
1.02 |
EPS - normalised fully diluted (p) |
|
|
0.16 |
(1.75) |
(2.30) |
(1.06) |
0.74 |
1.02 |
EPS - (IFRS) (p) |
|
|
(0.09) |
(2.04) |
(1.90) |
(1.64) |
0.22 |
1.17 |
Dividend per share (p) |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Gross Margin (%) |
57.8 |
54.6 |
52.8 |
52.1 |
52.9 |
51.9 |
||
EBITDA Margin (%) |
15.9 |
N/A |
2.4 |
6.7 |
9.1 |
10.7 |
||
Operating Margin (before GW and except.) (%) |
8.7 |
N/A |
N/A |
N/A |
3.2 |
5.3 |
||
BALANCE SHEET |
||||||||
Fixed Assets |
|
|
22,115 |
13,025 |
10,873 |
10,479 |
11,479 |
12,279 |
Intangible Assets |
18,900 |
11,968 |
10,540 |
10,194 |
11,194 |
11,994 |
||
Tangible Assets |
1,638 |
1,057 |
333 |
285 |
285 |
285 |
||
Investments |
1,577 |
0 |
0 |
0 |
0 |
0 |
||
Current Assets |
|
|
16,202 |
11,442 |
7,050 |
11,481 |
14,378 |
16,686 |
Stocks |
0 |
0 |
0 |
0 |
0 |
0 |
||
Debtors |
10,815 |
8,929 |
5,510 |
4,998 |
8,600 |
10,200 |
||
Cash |
4,996 |
1,966 |
1,319 |
6,358 |
5,653 |
6,361 |
||
Other |
391 |
547 |
221 |
125 |
125 |
125 |
||
Current Liabilities |
|
|
(11,071) |
(13,029) |
(10,234) |
(8,578) |
(10,915) |
(13,277) |
Creditors & other |
(11,071) |
(12,348) |
(9,183) |
(8,578) |
(10,915) |
(13,277) |
||
Short term borrowings |
0 |
(681) |
(1,051) |
0 |
0 |
0 |
||
Long Term Liabilities |
|
|
(1,579) |
(1,535) |
(899) |
(192) |
(192) |
(192) |
Long term borrowings |
0 |
0 |
0 |
0 |
0 |
0 |
||
Other long-term liabilities |
(1,579) |
(1,535) |
(899) |
(192) |
(192) |
(192) |
||
Net Assets |
|
|
25,667 |
9,903 |
6,790 |
13,190 |
14,750 |
15,496 |
CASH FLOW |
||||||||
Operating Cash Flow |
|
|
(722) |
(1,061) |
245 |
(749) |
378 |
3,307 |
Net Interest |
(31) |
(166) |
(167) |
(175) |
64 |
14 |
||
Tax |
55 |
425 |
751 |
410 |
150 |
150 |
||
Capex |
(3,800) |
(4,042) |
(1,035) |
(1,394) |
(2,297) |
(2,100) |
||
Acquisitions/disposals |
(1,033) |
(900) |
115 |
0 |
(4,500) |
(500) |
||
Financing |
1,940 |
896 |
0 |
7,996 |
5,500 |
0 |
||
Dividends |
0 |
0 |
0 |
0 |
0 |
0 |
||
Net Cash Flow |
(3,342) |
(4,848) |
(91) |
6,088 |
(705) |
872 |
||
Opening net debt/(cash) |
|
|
(8,250) |
(4,996) |
(604) |
(268) |
(6,358) |
(5,653) |
HP finance leases initiated |
0 |
0 |
0 |
0 |
0 |
0 |
||
Other |
88 |
456 |
(245) |
2 |
0 |
0 |
||
Closing net debt/(cash) |
|
|
(4,996) |
(604) |
(268) |
(6,358) |
(5,653) |
(6,525) |
Source: Company data, Edison Investment Research. Note: Forecasts include the acquisition of GI from May 2019.
|
|
Research: Healthcare
Paion achieved a major milestone in April when partner Cosmo filed for approval of remimazolam in procedural sedation (PS) in the US. This adds to filings in Q418 by partners for general anaesthesia (GA) in Japan and for PS in China. Remimazolam is an ultra-short-acting sedative/anaesthetic that combines the best features of propofol and midazolam. We expect its rapid onset and offset of action combined with a favourable cardio-respiratory safety profile to drive market uptake, if approved. Paion intends to self-commercialise remimazolam for GA and PS in select countries in Europe if it gains approval. Additional partners are seeking approvals in other territories. We increase our valuation to €317m or €4.96 per share.