23 March 2020
1Spatial, (AIM: SPA) today provides an update on trading for the financial year ended 31 January 2020.
The Board is pleased to report on another year of solid strategic progress and strengthening financials, delivering double-digit revenue and adjusted EBITDA* growth.
The Company expects to report revenue and adjusted EBITDA for the year ended 31 January 2020 in-line with consensus expectations, with revenues of no less than £23.0m (FY19: £17.6m) and adjusted EBTIDA* of at least £3.0m (FY19: £1.2m). Revenues include recurring software revenues of £9.5m (FY19: £7.5m).
The Company was Free Cash Flow positive in H2, with a gross cash balance at 31 January 2020 of £5.1m (£3.9m net of loans) (31 July 2019: £4.0m, £3.3m net of loans) not withstanding some delay in cash collection at year end, and exceptional cash outgoings of £1.0m relating to the acquisition and integration of Geomap-Imagis ("GI").
Following the acquisition of GI in May 2019, the Company expects to report an amortisation of acquired intangibles charge of approximately £0.8m for FY20. This charge has no impact on Group cash flow.
A key focus in the year was the successful integration of the acquisition of GI in France and closer integration with the Esri, Inc platform, the global market leader in GIS software. These initiatives have increased new customer wins and cross-selling to existing customers in France in the second half of the year.
The US division was a strong growth driver for the Group, securing contracts with five US State Departments for Transport, and has a growing pipeline of additional customer opportunities for the year ahead, demonstrating the potential for this market.
Importantly, the Group increased R&D investment in the year, and in March 2020 the Company announced the launch of 1Data Gateway, a web based Portal through which cloud-versions of its Apps will be accessible, with the first App being in relation to Data Supply Chain Management.
COVID-19
Coronavirus (COVID-19) continues to have an unprecedented impact globally and we have updated our business continuity plans accordingly. We have always made use of remote working and have now extended this to all our staff. So far we are continuing business as usual, signing and delivering on contracts. We have seen little disruption in the day to day business in our key territories which include the UK, US, France, Belgium and Australia but we are cognisant that this could change. If in the coming months we were to see some slow- down in our customer win rate and activities, then we would take appropriate action.
Given our high level of recurring revenue, our strong backlog of contracted future revenue, and our software supporting mission critical operations at many of our customers, we believe our business to be well positioned to withstand this period.
We continue to monitor the situation closely as it develops and will update investors further at the time of our Final Results, to be released in May 2020.
Claire Milverton, CEO of 1Spatial, commented, "This has been another year of strategic progress for 1Spatial, delivering growth in multiple geographies while investing for the future. The team completed the acquisition and successful integration of Geomap-Imagis, which was both immediately earnings enhancing and strategically important, strengthening our position in France and Belgium as well as our relationship with Esri Inc. The US division has been an excellent growth driver and we are encouraged by the scale of the opportunity it represents, demonstrated by the growing pipeline of opportunities. We secured a greater number of new customers in the year across the Group, indicating a growing ability to deliver on our sales pipeline.
"Our focus on transitioning the business model away from the perpetual software licence model towards higher margin, recurring software revenues is resulting in an increased quality of earnings. While cognisant of the rapidly evolving situation with COVID-19, our high levels of recurring revenues, strong balance sheet and wide spread of customers provide the business with a level of resilience and we are confident in our ability to work through these challenging times ."
- Adjusted for strategic, integration, other irregular items and share-based payment charge.