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Writer's pictureMark Watson-Mitchell

1Spatial – Yesterday’s Interims Show The Recent Contract Wins Giving The Group Added Attractions, Brokers Going For Up To 140p For Its Shares, Now 66.50p

The Cambridge-based 1Spatial (LON:SPA) yesterday announced its Interim Results for the six months to end-July.


The £74.5m capitalised group, which is a global leader in Location Master Data Management software and solutions, reported a 5% increase in its first-half revenues to £16.2m (£15.5m) and an encouraging 60% fall in its pre-tax losses to £0.2m (£0.5m loss).


The company, which not only has operations in the UK but also in Ireland, the USA, France, Belgium, Tunisia, and Australia, provides its LMDM software, solutions and business applications, primarily to the Government, Utilities and Transport sectors via the 1Spatial platform and its SaaS offerings.


Its solutions ensure data governance, facilitating the efficient, effective and sustainable operation of customers around the world. It allows them to master their data on any device, anywhere, anytime and can be deployed as SaaS in the cloud, on-premise, or as a hybrid of both.


The group’s global clients include national mapping and land management agencies, utility companies, transportation organisations, government and defence departments.


Management Comment


CEO Claire Milverton stated that:


"We have enjoyed a positive first half of the year, successfully executing on our key strategic initiatives.


Notable achievements include the timely deployment of 1Streetworks within UK Power Networks, strategic expansion into new US states and sectors and strategic hires to set the business up for further growth. 


Looking forward, our primary focus will be on accelerating the momentum of our SaaS offerings, converting our expanding pipeline and further penetrating the substantial US market.


The notification of the award of a second major 1Streetworks deal for £1m (subject to contract), coupled with a growing NG9-1-1 pipeline, reinforces our confidence in continued progress throughout the remainder of the year."


Analyst Views


At Panmure Liberum, its analysts Andrew Ripper and Harvey Robinson have upped their Buy rating on the group’s shares, looking for 90p (80p).


They suggest that there is increasing evidence that the group is at an inflection point, especially following the recent contract wins announced by the company.


They estimate that for the current year to end-January 2025, the group will see an increase in its sales to £37.0m (£32.3m), lifting its pre-tax profits to £2.2m (£2.1m) and its earnings to 1.9p (1.8p) per share.


For next year they go for £40.0m sales, £3.9m profits and 3.0p per share in earnings.


Andrew Darley and Michael Hill, at Cavendish Capital Markets, initiating their forecasts, have a punchier share Price Objective of 140p.


This year they look for £36.1m revenues, and £2.2m adjusted pre-tax profits, but with earnings easing fractionally to 1.7p per share.


While over at Edison Investment Research, analyst Dan Ridsdale considers that the group’s contract momentum underpins its growth prospects.


On a discounted cash flow analysis, they indicate 100p a share being readily achievable.


For the current year, he has estimates of £35.8m sales, £2.4m EBIT, with 1.4p earnings per share.


Ridsdale goes for £38.7m in revenues in the 2026 year, with £3.8m EBIT, generating 2.6p in earnings per share.


In My View


I do like the basis of this group’s offerings both in the UK and globally, with an emphasis upon its potential in the US.


On the face of it though, its shares, now at 66.50p, appear expensively rated, but as the group builds up its annual recurring revenues, I feel that the profits really will drop to the bottom line quite impressively.


That gives credence to the Price Objectives put forward by the analysts.



Finally, it is worth noting that yesterday, after the results announcement, CEO Claire Milverton added another 45,349 shares to her holding in the company, purchased at 66p, taking her stake up to 764,125 shares.

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