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1Spatial (AIM: SPA) Announces Final Results for the year ended 31 January 2021

Final results for the year ended 31 January 2021

1Spatial, a global leader in Location Master Data Management (LMDM) software and solutions, is pleased to announce audited final results for the year ended 31 January 2021.

Highlights

 

31 January

2021

£m

31 January

2020

£m

Change

%

Revenue

24.6

23.4

+5

Gross margin (%)

53

52

+1pp

Adjusted EBITDA*

3.6

3.2

+12

Adjusted EBITDA* margin (%)

14.8

13.8

+1.0pp

Operating loss

(1.2)

(1.5)

-19

Loss before tax

(1.4)

(1.7)

-17

Loss per share – basic and diluted (p)

(1.0)

(1.4)

-29

Operating cash generated

4.0

0.6

+596

Free cash flow**

0.9

(2.4)

n/a

Group financial highlights

Current trading & Outlook

Commenting on the results, 1Spatial CEO, Claire Milverton, said: "We entered FY21 in a considerably improved financial and strategic position, following the successful conclusion of the three-year turnaround plan and were set for a year of growth. While the emergence of the Coronavirus in early 2020 re-shaped the year for us, we are proud of how our teams responded and of the results delivered, achieving growth in all our key financial metrics, winning new customers in all of our regions and bringing new offerings to market.

“We sit right at the heart of changes across multiple sectors. Whether that be in helping governments and energy providers prepare to meet the green agenda, supporting the investment in infrastructure upgrades as the world’s economies prepare for post-Covid recovery, or implementing new digital transformation strategies. The positive market environment is translating into a growing sales pipeline of opportunities across new and existing customers, both direct and through our partners.

“While the Board remains aware of the need to manage potential risks arising from the Covid-19 pandemic, the strength of trading in the first two months of the year, increase in committed revenue and depth of the sales pipeline and positive market landscape provide the Board with confidence in a successful year of growth ahead and exciting long-term future for 1Spatial.”

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 as amended by The Market Abuse (Amendment) (EU Exit) Regulations 2019.

For further information, please contact:

1Spatial plc

01223 420 414

Claire Milverton / Andrew Fabian

Liberum (Nomad and Broker)

020 3100 2000

Neil Patel / Cameron Duncan / Ed Phillips / Miquela Bezuidenhoudt

Alma PR

020 3405 0205

Caroline Forde / Justine James / Molly Gretton

1spatial@almapr.co.uk

About 1Spatial plc

Unlocking the Value of Location Data

1Spatial plc is a global leader in providing Location Master Data Management (LMDM) software, solutions and business applications, primarily to the Government, Utilities and Transport sectors via the 1Spatial platform. Our solutions ensure data governance, facilitating the efficient, effective and sustainable operation of customers around the world. Our global clients include national mapping and land management agencies, utility companies, transportation organisations, government and defence departments.

Today, when using and sharing trusted data provides significant opportunities for businesses and governments to deliver against important sustainability and Net Zero goals, our vision is clear - to make the world safer, smarter and more sustainable by unlocking the value in data, enabling better decisions and greater insights.

The 1Spatial platform is a comprehensive set of data and system agnostic LMDM software components which helps ensure master data is compliant, current, complete, consistent, and coordinated – and that customers can be confident it will remain that way as it evolves. 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.

Our domain expertise and data agnostic approach allows us to be an integral and important part of the Geospatial Ecosystem, supporting the wider digital economy. We partner with major technology consultancies and GIS providers such as ESRI and bring together our people, innovative solutions, industry knowledge and experience from our extensive customer base to deliver world class solutions.

1Spatial plc is AIM-listed, headquartered in Cambridge, UK, with operations in the UK, Ireland, USA, France, Belgium, Tunisia, and Australia.

Chairman’s report

Despite the temporary hiatus caused by the pandemic in some parts of the Group, this year has seen us achieve good progress on both our financial goals and strategic development. The two main contributors to our robust trading results were the resilience of the industry markets we target, being Government, Utilities and Transport, and the quality of our people, who swiftly adapted to home working and remote delivery of projects, while continuing to innovate.

Despite a Covid-19 related dip in new business generation in the first half, the second half of the year showed a strong performance, with a number of significant contract wins and new clients added in all geographies. It was rewarding to see the smart partnership programme starting to bear fruit, with joint wins with Ordnance Survey, Esri, and Michael Baker and smaller vendors, in a host of clients.

We continue to transition our core technology, products and services to meet the growing demand for SaaS- based repeatable solutions that will give us much higher levels of growth and recurring revenue. At the same time we are investing hard in developing an increasingly valuable portfolio of location based data applications to really capitalise on the increasing demand we are seeing for useable, accurate Industry applications that can dramatically improve the economics and business models of our clients.

As with many industries, the pandemic has driven an acceleration of digital transformation initiatives across our customer base. These, coupled with government initiatives such as increased infrastructure investment and the launch of sustainability programmes, are driving a substantial heightening of awareness and comprehension of the value of location-based data across the globe, providing an increasingly supportive market backdrop for our offerings.

Financials

As in the prior year, our key financial objectives in FY21 were to grow recurring revenues, ensure improved profitability at adjusted* EBITDA level and improved operating cash generation. While Covid-19 slowed the rate of new customer wins through the middle part of the year, particularly in our French operations, the results for the year ended 31 January 2021 reflect the ongoing improvement in these metrics. We have delivered a robust financial performance, growing revenues and adjusted EBITDA profit levels, whilst achieving the important milestone of generating positive free cash flow**.

Group revenues increased by 5% to £24.6m (FY20: £23.4m), with recurring revenue, as a percentage of total revenue, increasing to 43% (FY20: 41%), as the business focuses on developing and selling repeatable software solutions under a SaaS model. Adjusted EBITDA* increased by 12% to £3.6m (FY20:

£3.2m) with a higher margin of 14.8% (FY20: 13.8%). Operating cash inflow (before strategic, integration and other non-recurring items) more than doubled to £4.2m (FY20: £1.9m) with the Group being free cash flow ** positive £0.9m, even after non-recurring one-off items.

These positive results, delivered against the difficult backdrop of the pandemic, provide the business with a strengthening financial footing on which to continue to carefully invest in our products and operations in order to capture more of the growing location data market.

Board and corporate governance

We welcomed Andrew Fabian to the board as Interim CFO in June 2020 and were pleased to formalise his appointment as CFO in October 2020. His understanding of technology businesses and the transition to the cloud is proving incredibly valuable and he is a great addition to the team.

Corporate governance is continually assessed at 1Spatial and we have provided more information on this in the Corporate Governance Report included in this Annual Report. Peter Massey is Chair of the Remuneration Committee, Francis Small is the Chair of the Audit Committee and I am Chair of the Nomination Committee.

Our people

This year, more than ever, we have seen the quality of our teams shine through. Their energy, commitment and passion for customer service has not wavered through this, the most difficult of years for many and I would like to thank every member of 1Spatial for all the effort they have exerted on our customers’ behalf. Our priority continues to be on ensuring the wellbeing of our teams around the world, providing them with the right, healthy environment to continue to deliver the high-quality service our customers expect of 1Spatial.

Environmental, Social and Governance (ESG)

At 1Spatial we are striving to make the world safer, smarter and more sustainable for the future. We provide our clients with solutions to support their ESG goals and as a Company we are proactive in evaluating what we can do to innovate and reduce our impact on the environment.

We help our customers unlock the hidden value in their data and provide significant opportunities to support businesses and governments to deliver against important sustainability goals. Be it horizontally between internal business departments, vertically up and down the external supply chain, or across a vast public accessed information infrastructure, our solutions underpin the efficient, effective and sustainable operation of established and emerging industries.

Given the nature of what we do, we have a low impact on the environment but we do lots of things to improve and offset our carbon footprint such as donations to the Woodland Trust to offset travel. From a social perspective we have an active team which has been really focussed during the Covid period on mental health and wellbeing activities. From a governance perspective we have a number of accreditations to ensure appropriate safeguarding our customer’s data.

Looking forward

We have entered the new year with a record level of contracted future revenue, a wide range of customers in stable industry segments and growing proof of delivery both in Europe and the USA. We will continue to monitor the evolving situation in relation to Covid-19, the size of the opportunity ahead and increased win rate provides me and the Board with confidence that we are well placed to deliver sustainable growth at scale and that 1Spatial has an exciting long-term future.

Andy Roberts

Non-Executive Chairman

During the year we have continued to innovate in both areas and accelerated the development of our SaaS multi-tenancy cloud platform as a vehicle for further growth and accessibility of our solutions.

Data Management Solutions

1Integrate

1Integrate is our patented no-code rules engine – this continues to be enhanced to make it more powerful and more capable for automated data validation and processing.

During the year, the work to handle full 3D solid data has delivered initial Proof of Concepts. For example, we are working with a major National Mapping Agency on the production of their 3D buildings.

Additional data services support has been added to allow direct access to data from Esri ArcGIS Feature Services and Open Geospatial Consortium Web Feature Services as well as many enhancements to empower users and make them more effective and efficient. In addition, a number of enhancements have been made which extend the flexibility and efficiency of our delivery via the cloud.

1Data Gateway

1Data Gateway is our self-service web-portal for spatial data validation, processing and analytics. Following its successful launch in March 2020, 1Data Gateway now also provides schema mapping so that data in varying structures can be applied to the same set of rules as well as other controls such as the ability to apply customer branding and styling to the portal. API extensions which allow systems to talk to each other, have been completed to allow access to data quality, validation and usage statistics through external dashboarding tools i.e., Google Big Query, for partners or customers.

Business Applications

We provide two types of business applications to meet our customer’s needs. Applications can either plug directly into the 1Spatial Platform or alternatively can plug into the 1Spatial Platform whilst also utilising the benefits of the Esri technology.

1Biz Server

For those business applications built on Esri technology, we have developed, the 1Spatial Business Server (1Biz Server). By deploying the most up to date Esri and 1Spatial releases through the 1Biz Server, we will transform the speed and delivery of these updates to our customers.

We continue to assess opportunities to launch Business Applications, targeting specific location data-based issues within our three target industries. New Applications developed this year along with those that have been further enhanced are as follows:

1Water

We have scaled up work on 1Water for water network management based on our strong Esri partnership, which has enabled us to gain the Esri Utility Network Management Specialty designation.

Next-Generation-911

An exciting new innovation being worked on for our US Market is the Next-Generation-911 App. This provides validation of network data, address data and the National Emergency Numbers Association (NENA) to help emergency service departments, improve disparate or incomplete data, in order to create a single source of truth.

Traffic Management Plan Automation (TMPA)

The TMPA has moved from Proof of Concept, with a goal to have a release-ready Minimum Viable Product in FY 22 for beta testing with our customers and partners. This will be a true SaaS solution for automatically laying out equipment such as signs, cones and traffic lights around UK road works. It makes use of Ordnance Survey GB’s data hub and is built from the 1Integrate rules engine in the 1Spatial Platform. This solution will automate the production of traffic management plans in a more efficient, sustainable way and importantly help improve the safety of workers and the public around the 4 million highway excavations that are made every year in the UK*.

*source https://highways.today/2020/03/04/excavation-highways-uk/

Cloud platform – SaaS multi-tenancy cloud platform

The cloud platform will enable us to increase our addressable market and existing customer demand for web-based access to our solutions, the need for which has been particularly highlighted by the move to remote working. The multi-tenancy SaaS will be more cost effective for 1Spatial as we will be managing fewer deployments and the elastic nature of the platform architecture will limit cloud hosting costs. We are also building targeted services and solutions on the platform which we can issue on a Pay-per-use basis such as TMPA, providing the Group with exciting new go to market models, lowering the price point for new customers onto the platform.

  1. Customer Relationships

    We continued to strengthen our relationships with our customers throughout the year by maximising webinar opportunities across all territories to overcome reduced face to face events. We held our annual Smarter Data, Smarter World Conference as a virtual event. Taking place over 4 days online the conference was a huge success with 652 registrations from 363 organisations in 47 countries, a significant increase on prior, non-digital events.

    We also implemented a global content strategy, increasing the amount of content we have issued online, and launched our new global website, with fresh, engaging content, aligned to our vision and values and great user experience. Since launching the new website, we have seen a considerable increase in online engagement, with sessions per user increasing by 43%, pages viewed in these sessions increasing 41% and the average session duration has increased 84%, demonstrating the increased relevance of our product offering and marketing messages to our target markets.

    The success of our customer focus, combined with ongoing transition to term licencing, can be seen in the 10% growth in Annual Recurring Revenue driven both by new customer wins and expansion of existing customer accounts.

    Land & Expand

    The Group delivered a healthy number of new customer wins in the year across all regions, including a number of strategic wins within our LMDM offering, with the USA performing particularly well. This was also good considering the backdrop of the first half of the year where customers were harder to secure, due to the uncertainty caused by Covid-19. We now have around 600 customers on recurring contracts and a customer base of over 1,000 in total across the Group, providing a strong basis for future expansion.

    Solutions most in demand in the year were 1Data Gateway and 1Integrate in the USA and the UK, with Utilities and Urban Planning (arcOpole Pro) Esri-based business applications being strongest in France and Europe. We are seeing an increasing number of coupled 1Data Gateway and 1Integrate sales, with the 1Data Gateway portal proving to be a compelling sales tool, enabling new prospects to quickly visualise how we can transform their data collection, cleansing and management.

    New clients added in the year included the Environment Agency in the UK, the US Geological Survey and the State of California’s Office of Emergency Services in the USA and in France, a French military organisation, the Seine Grand Lacs (the Seine River Management Agency) and the city of Asnières sur Seine.

    The Group secured multiple customer expansion contracts in the year, with notable expansions with Northern Gas Networks in the UK, a $2.6m 5-year contract with the State of Michigan to deliver the second

    phase of their Geographic Framework and expansion contracts in France with the Euro Metropole of Strasbourg, the Metropole of Nantes’ Water Department and a large French water utility company.

    In France, eleven existing customers have commenced migration from the Group’s legacy platform, to the Esri platform, paving the way for future expansion.

    Our longstanding customers, such as Ordnance Survey, Ordnance Survey Ireland, the Rural Payments Agency, Gas of Strasbourg and Engie (France), have also continued to expand the solutions and services we provide.

  2. Smart Partnerships

We made good progress in the year adding or strengthening partnerships in each of our three areas of focus to extend our market reach: major technology consultancies, software platform providers, and adjacent industry specialists. We are increasingly being utilised by our partners as their data integrity provider, cleansing the data before passing it back through wider systems.

Our strong partnership with Esri France is generating increasing interest in the local authority and utility market and was strengthened post period end through the winning of a prestigious Esri award, for 1Spatial’s innovative and extensive product integration within Esri’s ArcGIS Enterprise. This followed 1Spatial being given Esri Utility Network Management Specialty designation, recognising 1Spatial's knowledge and expertise within utilities and the implementation of Water Solutions.

In the UK, we have also partnered with Esri UK on the Northern Gas Networks Utility Network Migration, the first such migration to take place in the UK.

Our new partnership with Ordnance Survey has seen us secure the prestigious pilot for the Energy Networks Association and we have started joint webinars demonstrating how the combination of data from Ordnance Survey’s new Data Hub with the 1Spatial software can help build trust in data. We continue to win and look at new opportunities with our partner Version1, which is providing promising new business opportunities.

Our Michael Baker relationship in the USA continues to bring new customers.

We continue to work on new partnership opportunities in all geographic markets and to provide more focus on this key growth pillar we hired a new global partner manager in April 2021.

European re-structuring

Post year end, we announced the final stage of the integration of Geomap-Imagis, which was acquired in May 2019. Our European operations now operate under one regional management structure, focus all our resources on maximising our Esri relationship, and delivering the growth opportunities in our extensive European customer base.

Corporate activity

We will continue to identify strategic and bolt-on acquisitions to complement our organic growth.

Strategic priorities for the year ahead

We will continue to focus on the three pillars of our growth strategy. Key initiatives will be investment into our delivery resource, marketing and sales teams, particularly in the USA, to capitalise on our successes in FY21 and deliver on the data governance opportunity. We will work closely with Esri, particularly in France, where we see great opportunity to expand our customer base and continue the successful migration of our customers onto the new Esri platform and our Esri based business applications. In the UK, we see a growing opportunity to work on large government contracts, building back post-Covid-19 and as they and other partners embrace the sharing of data to meet Environment and Social initiatives. We see a growing opportunity to cross-sell our business applications, developed France and the UK, into our other territories and offer our 1Integrate and 1Data Gateway solutions into France. We will continue to expand our capability and expertise in our Tunisia centre of excellence, providing increased development support and cost-effective delivery capacity to the Group.

We are on track to launch our multi-tenant SaaS platform by the end of the current financial year, increasing our addressable market, meeting existing customer demand for web-based solutions, providing more flexible “pay as you go” pricing structures and lowering the price point for entry for new customers. We believe the launch of the platform can be transformational for the Group in future years.

Our financial goals will be to increase revenue growth underpinned by growing annual recurring revenue and continue our trajectory of increased profitability at adjusted* EBITDA level and higher cash generation over the long-term.

COVID-19

At the date of this report, most sites continue to work on a remote basis, providing outstanding support to our customers. We anticipate a phased return to office working through the course of 2021, in line with local government guidelines in each territory, providing our teams with the opportunity to once more interact with each other face to face, while retaining the benefits of increased digital connections across the business.

We chose to maintain all of our skilled workforce during the Covid-19 period, receiving no support under the UK Government job retention scheme, although, we received financial support of £0.3m in some overseas territories, where there was a greater impact. We increased our funding from corporate lenders in H1 2021 by £1.8m. We controlled expenditure tightly throughout the year, deferring some discretionary spending. However, we benefited from our extensive customer base, healthy levels of recurring revenue and growing contracted order book, to prove resilient during an unprecedented year.

1Team

We are passionate about looking after our staff and have actively promoted the importance of mental health and happiness during the year. Taking the time to be kind to yourself is something we urge all our staff to do and as part of our commitment to their well-being, we rolled out initiatives such as well-being months, mental health awareness training, mental health first aiders and internal events and initiatives to encourage staff to take time out from their working day.

We are always looking at ways to ensure equality and diversity across our company and an inclusive, welcoming working environment for everyone. Over the past year, we have created global initiatives to celebrate: International Women’s Day, World Food Day, Diwali, Thanksgiving, Mental Health Awareness Week, Earth Day and Health and Happiness month.

The teams have shown extraordinary ingenuity and commitment, really stepping up in this challenging time, for which the Board and I thank them wholeheartedly. We believe one of the positive impacts of this year has been the increased connectivity across our geographic regions, with the increased use of digital communications bringing us closer during our shared challenges.

Current Trading & Outlook

There is an increasing need for clean, accessible and up to date location data to support many new initiatives. These include investment in infrastructure, building new greener initiatives, such as an enhanced electricity network to support growth in electric vehicles and helping governments to achieve their sustainability goals.

Trading in the new financial year has begun positively and in line with Board expectations, with several new contracts secured and growth in the sales pipeline. New customers won since the year end include:

We sit right at the heart of changes across multiple sectors. Whether that be in helping governments and energy providers prepare to meet the green agenda, supporting the investment in infrastructure upgrades

as the world’s economies prepare for post-COVID recovery, or implementing new digital transformation strategies. The positive market environment is translating into a growing sales pipeline of opportunities across new and existing customers, both direct and through our partners.

While the Board remains aware of the need to manage potential risks arising from the Covid-19 pandemic, the strength of trading in the first two months of the year, increase in committed revenue and depth of the sales pipeline and positive market landscape provide the Board with confidence in a successful year of growth ahead and exciting long-term future for 1Spatial.

Claire Milverton

Chief Executive Officer

CFO review

Summary

The Group delivered a robust financial performance in the year, growing revenues and adjusted EBITDA* profit levels, whilst achieving the important milestone of generating positive free cash flow**.

Revenue

Group revenue increased by 5% to £24.6m from £23.4m in FY 2020. Whilst this included a full year’s contribution from the Geomap-Imagis (GI) acquisition, compared to nine months in the prior year, it was a solid result against the challenges of the Covid-19 pandemic.

Recurring revenue

The business strategy is to grow revenue from repeatable business solutions on longer-term contracts, including transitioning towards selling recurring term subscription licences, rather than one-off perpetual licences. With this focus in mind, the business achieved a growth in revenue of 11% (excluding the impact of the reduction in perpetual licence revenue), and recurring revenue, as a percentage of total revenue, increased to 43% (FY 2020: 41%). Revenue by type is shown below:

Revenue by type
 

FY 2021

FY 2020

% change

Recurring revenue ***

10.6

9.6

10%

Services

11.1

10.0

11%

Revenue (excluding perpetual licences)

21.7

19.6

11%

Perpetual licences

2.9

3.8

(24%)

Total revenue

24.6

23.4

5%

Percentage of recurring revenue

43%

41%

  

* Adjusted EBITDA is a company-specific measure, which is calculated as operating loss before depreciation (including right of use asset depreciation), amortisation and impairment of intangible assets, share-based payment charge and strategic, integration, and other non-recurring items

** Free cash flow is defined as net increase/ (decrease) in cash for the year before cash flows from the acquisition of subsidiaries, cash flows from new borrowings and repayments of borrowings and cash flow from new share issue.

*** Recurring revenue comprises term licences and support and maintenance revenue.

Whilst these recurring term licence sales require the support of a level of services, the proportion of total revenue from term licences is expected to increase, and revenue from perpetual licences is likely to continue to decrease. Recurring revenue also includes support and maintenance from customers with perpetual licences; this revenue is expected to transition in time to being part of the subscription licences.

ARR

The Annualised Recurring Revenue (“ARR”) (annualised value at the year-end of committed recurring contracts for licences and support & maintenance) increased in the year by 10% from £10.2m to £11.2m as at 31 January 2021. The growth rates varied by region as shown in the table below with the US growing at the fastest rate of 24%. The overall renewal rate was 90%.

ARR by region
 

FY 2021

FY 2020

% growth

UK/Ireland

3.88

3.32

17%

Europe

5.04

4.96

2%

US

1.24

1.00

24%

Australia

1.05

0.90

17%

Total ARR

11.21

10.18

10%

Committed revenue

The level of committed revenue (revenue for future services, licences and support contracts committed contracted at the balance sheet date) increased significantly in the year from the business focus of extending the commitment periods and duration of contracts, as well as signing some higher value service contracts. The level of committed project services revenue increased by 26% from £4.5m to £5.7m.

The combination of committed revenue and a strong and growing pipeline of prospects means that the business starts the current financial year with a good likelihood of making further progress on its revenue growth plan. With the business focus on developing and selling repeatable software solutions under a SaaS model, there is an increased level of revenue visibility, which allows the Board to plan future investment with confidence.

Regional revenue

Revenue growth by region is shown in the table below:

Regional revenue
 

FY 2021

FY 2020

% change

UK/Ireland

8.44

8.81

(4%)

Europe

11.15

10.24

9%

US

2.91

2.25

29%

Australia

2.10

2.08

1%

Total revenue

24.60

23.38

5%

Revenue in the UK/Ireland region fell by 4% but this was largely due to timing of closing some contracts as total sales orders signed grew in the year. Revenue in the European business was lower on a like for like basis mainly due to Covid-19-related project delays (following the postponement of the French local elections in H1), although overall revenues in Europe grew by 9%, benefitting from three additional months of acquired revenues. Pleasingly, there was a pick-up in revenue in the European operations in H2 FY 2021. Revenue in the US, which now represents 12% of Group revenue, had the highest growth rate at 29%.

Gross profit margin

The gross margin increased year on year to 53% from 52%. Within the cost of sales, the Group received

£0.3m of grants from overseas governments as part of business support schemes in relation to Covid-19. Going forward, the management team are focused on driving improvements to the gross margin levels.

Adjusted EBITDA*

The adjusted EBITDA* (as defined above) increased by 12% to £3.6m from £3.2m in the prior year with a higher margin of 14.8% (FY 2020: 13.8%). Cost management was an important focus during FY 2021 and expenses are constantly reviewed to ensure the level is appropriate for the structure of the business. Administrative expenses increased over the comparable period mainly because of the additional three months of the acquired business.

Strategic, integration and other non-recurring items

The final step in the integration of Geomap-Imagis (“G-I”), acquired in May 2019, was completed and our European operations now operate under one regional management structure. As part of the restructuring, two of the G-I founders and former directors are leaving the business and the restructuring will lead to some cost savings, which will allow the business to invest in further expansion. The costs amounting to £0.56m (FY 2020: £1.20m) have been included in strategic, integration and other non-recurring items.

Operating loss and loss before tax

The Group recorded a reduced operating loss of £1.2m compared to £1.5m in the prior year and the Group’s loss before tax reduced to £1.4m from £1.7m for the comparable period. The results were impacted by the strategic, integration and other non-recurring items, as well as a number of non-cash charges including amortisation of acquired intangibles and share-based payments.

Taxation

The net tax credit for the period was £0.3m (FY 2020: £0.2m).

Balance sheet

The Group’s net assets reduced to £14.7m from £15.5m at 31 January 2020. The reduction was mainly due to the overall loss after tax offset by currency gains in reserves.

Trade and other receivables increased in the year to £10.9m (FY 2020: £9.9m), mainly due to increased trade debtors and accrued income at year end following contract wins in Q4. Whilst there was also some increase in average debtor days outstanding, this was largely due to lengthening payment cycles with no material impact on the assessment of overall debtor collectability. The increase in trade and other payables from £11.4m to £13.4m was primarily driven by an increase in deferred income to £5.9m (FY 2020: £4.9m)

and an increase in other taxation and social security. The company benefitted from a deferral of some indirect taxes of £0.4m in the year, which will be repaid in FY 2022.

Cash flow

Operating cash flow inflow (before strategic, integration and other non-recurring items) more than doubled to £4.2m in FY 2021 compared to £1.9m in FY 2020.

Operating cash flow

FY 2021

FY 2020
 

£'000

£'000

Cash generated from operations

3,983

572

Add back: Cashflow on strategic, integration and other non-recurring items

173

1,289

Cash generated from operations before strategic, integration and other non- recurring items

4,156

1,861

Indeed, the focus on working capital and cost control has also resulted in free cash flow* being positive (at

£0.9m), even after non-recurring one-off items, as shown in the table below:

Free cash flow

FY 2021

FY 2020
 

£'000

£'000

Cash generated from operations before strategic, integration and other non- recurring items

4,156

1,861

Net interest paid

(179)

(144)

Net tax received

484

313

Expenditure on product development and intellectual property capitalised

(2,120)

(2,188)

Purchase of property, plant and equipment

(192)

(132)

Lease payments

(1,069)

(792)

Free cash flow before strategic, integration and other non-recurring items

1,080

(1,082)

Cashflow on strategic, integration and other non-recurring items

(173)

(1,289)

Free cash flow *

907

(2,371)

More information with respect to how the Directors of 1Spatial are fulfilling duties to promote the success of the company which includes the interests of various stakeholders such as Employees, Customers, Suppliers and Partners is set out within the Section 172 of the Annual Report.

Governance

It’s an exciting time to be part of a growing digital economy and data driven sector and whilst promoting the use of data is important, safeguarding the use of location data is absolutely key. Governments globally have set guidelines around areas such as data access, privacy, ethics and security. We adhere to these standards globally and good governance over customer data is central to everything we have been doing for a numbers of years. More and more we work with our customers on their projects directly through the cloud and so we do not have to take local copies of data which improves security around this. We take significant steps to ensure high security around our IT systems with adoption of security standards such as Cyber Essentials.

In the UK and USA we are ISO 9001 accredited. This means that we have stringent quality processes ensuring governance in all our processes, projects and efforts. Quality processes are well documented and followed by all teams.

At 1Spatial we are committed to good Corporate Governance and adhere to the standards contained in the Corporate Governance Code for Small and Mid-Size Quoted Companies (QCA Code).

Consolidated statement of comprehensive income For the year ended 31 January 2021

 

Note

2021

£’000

2020

£’000

Revenue

3

24,600

23,385

Cost of sales

  

(11,451)

(11,123)

Gross profit

  

13,149

12,262

Administrative expenses

  

(14,395)

(13,800)
   

(1,246)

(1,538)

Adjusted EBITDA *

  

3,632

3,226

Less: depreciation

  

(202)

(152)

Less: depreciation on right of use asset

11

(1,106)

(878)

Less: amortisation and impairment of intangible assets

6

(2,806)

(2,169)

Less: share-based payment charge

  

(272)

(398)

Less: strategic, integration and other non-recurring items

4

(492)

(1,167)

Operating loss

  

(1,246)

(1,538)

Finance income

  

39

40

Finance costs

  

(226)

(235)

Net finance cost

  

(187)

(195)

Loss before tax

  

(1,433)

(1,733)

Income tax credit

5

308

248

Loss for the year

  

(1,125)

(1,485)

Loss for the year attributable to:

Equity shareholders of the Parent

  

(1,125)

(1,485)
   

(1,125)

(1,485)

Other comprehensive (expense)/income

Items that may subsequently be reclassified to profit or loss:

Actuarial (losses)/gains arising on defined benefit pension, net of tax

  

(15)

40

Exchange differences arising on translation of net assets of foreign operations

  

148

(120)

Other comprehensive income/(loss) for the year, net of tax

  

133

(80)

Total comprehensive loss for the year

  

(992)

(1,565)

Total comprehensive loss attributable to the

equity shareholders of the Parent

  

(992)

(1,565)
 

Note

2021

£’000

2020

£’000

Loss per ordinary share attributable to the owners of the Parent during the year (expressed in pence per ordinary share):

Basic and diluted loss per share

15

(1.0)

(1.4)

* Adjusted EBITDA is a company-specific measure which is calculated as operating loss before depreciation (including right of use asset depreciation), amortisation and impairment of intangible assets, share-based payment charge and strategic, integration, and other non-recurring items (see note 4)

Consolidated statement of financial position As at 31 January 2021

 

Note

2021

£’000

2020

£’000

Assets

Non-current assets

Intangible assets including goodwill

6

15,187

15,560

Property, plant and equipment

  

392

374

Right of use assets

11

2,694

3,272

Total non-current assets

  

18,273

19,206

Current assets

Trade and other receivables

7

10,890

9,930

Current income tax receivable

  

164

233

Cash and cash equivalents

8

7,278

5,108

Total current assets

  

18,332

15,271

Total assets

  

36,605

34,477

Liabilities

Current liabilities

Bank borrowings

9

(470)

(135)

Trade and other payables

10

(13,418)

(11,439)

Lease liabilities

11

(925)

(957)

Deferred consideration

12

-

(599)

Total current liabilities

  

(14,813)

(13,130)

Non-current liabilities

Bank borrowings

9

(2,542)

(1,086)

Lease liabilities

11

(1,743)

(2,340)

Deferred consideration

12

(390)

(370)

Defined benefit pension obligation

  

(1,606)

(1,417)

Deferred tax

13

(776)

(679)

Total non-current liabilities

  

(7,057)

(5,892)

Total liabilities

  

(21,870)

(19,022)

Net assets

  

14,735

15,455

Share capital and reserves

Share capital

14

20,150

20,150

Share premium account

14

30,479

30,479

Own shares held

14

(303)

(303)

Equity-settled employee benefits reserve

  

3,604

3,332

Merger reserve

  

16,465

16,465

Reverse acquisition reserve

  

(11,584)

(11,584)

Currency translation reserve

  

332

184

Accumulated losses

  

(43,931)

(42,791)

Purchase of non-controlling interest reserve

  

(477)

(477)

Total equity

  

14,735

15,455

For the year ended 31 January 2021

£’000

Share capital

Share premium account

Own shares held

Equity- settled employee benefits reserve

Merger reserve

Reverse acquisition

reserve

Currency translation

reserve

Purchase of

non- controlling

interest reserve

Accumulated

losses

Total equity

Balance at 1 February 2019

18,971

28,661

(303)

2,934

16,030

(11,584)

304

(477)

(41,346)

13,190

Comprehensive income/(loss)

Loss for the year

-

-

-

-

-

-

-

-

(1,485)

(1,485)

Other comprehensive income/(loss)

Actuarial gains arising on defined benefit pension

-

-

-

-

-

-

-

-

40

40

Exchange differences on translating foreign operations

-

-

-

-

-

-

(120)

-

-

(120)

Total other comprehensive income/(loss)

-

-

-

-

-

-

(120)

-

40

(80)

Total comprehensive income/(loss)

-

-

-

-

-

-

(120)

-

(1,445)

(1,565)

Transactions with owners

Issue of share capital, net of share issue costs

1,179

1,818

-

-

435

-

-

-

-

3,432

Recognition of share-based payment expense

-

-

-

398

-

-

-

-

-

398
 

1,179

1,818

-

398

435

-

-

-

-

3,830
                     

Balance at 31 January 2020

20,150

30,479

(303)

3,332

16,465

(11,584)

184

(477)

(42,791)

15,455

Comprehensive loss

Loss for the year

-

-

-

-

-

-

-

-

(1,125)

(1,125)

Other comprehensive loss

Actuarial gains arising on defined benefit pension

-

-

-

-

-

-

-

-

(15)

(15)

Exchange differences on translating foreign operations

-

-

-

-

-

-

148

-

-

148

Total other comprehensive (loss)/income

-

-

-

-

-

-

148

-

(15)

133

Total comprehensive loss

-

-

-

-

-

-

148

-

(1,140)

(992)

Transactions with owners

Recognition of share-based payment expense

-

-

-

272

-

-

-

-

-

272
 

-

-

-

272

-

-

-

-

-

272

Balance at 31 January 2021

20,150

30,479

(303)

3,604

16,465

(11,584)

332

(477)

(43,931)

14,735

Consolidated statement of changes in equity

Consolidated statement of cash flows For the year ended 31 January 2021

 

Note

2021

£'000

2020

£'000

Cash flows from operating activities

Cash generated from operations

8 (a)

3,983

572

Interest received

  

39

40

Interest paid

  

(218)

(184)

Tax received

  

484

313

Net cash generated from operating activities

  

4,288

741

Cash flows from investing activities

Acquisition of subsidiary (net of cash acquired)

12

-

(2,151)

Purchase of property, plant and equipment

  

(192)

(132)

Capitalisation of development costs and other intangibles

6

(2,120)

(2,188)

Net cash used in investing activities

  

(2,312)

(4,471)

Cash flows from financing activities

New borrowings

  

1,800

672

Repayment of borrowings

  

(146)

(133)

Repayment of lease obligations

11

(1,069)

(792)

Payment of deferred consideration on acquisition

12

(585)

-

Net proceeds of share issue

14

-

2,805

Net cash generated from financing activities

  

-

2,552

Net increase/(decrease) in cash and cash equivalents

  

1,976

(1,178)

Cash and cash equivalents at start of year

  

5,108

6,358

Effects of foreign exchange on cash and cash equivalents

  

194

(72)

Cash and cash equivalents at end of year

8 (b)

7,278

5,108

Notes to the financial statements For the year ended 31 January 2021

1. Basis of preparation

The preliminary information of 1Spatial plc have been prepared in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006. The “requirements of the Companies Act 2006” here means accounts being prepared in accordance with “international accounting standards” as defined in section 474(1) of that Act, as it applied immediately before IP completion day (end of transition period), including where the company also makes use of standards which have been adopted for use within the United Kingdom in accordance with regulation 1(5) of the International Accounting Standards and European Public Limited Liability Company (Amendment etc.) (EU Exit) Regulations 2019. The consolidated financial statements have been prepared under the historical cost convention.

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies.

The results shown for the year ended 31 January 2021 and 31 January 2020 are audited. The consolidated financial information contained in this announcement does not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006. Statutory accounts of the Company in respect of the financial year ended 31 January 2021 were approved by the Board of directors on 27 April 2021 and will be delivered to the Registrar of Companies in due course. The report of the auditors on those accounts was unqualified and did not contain an emphasis of matter paragraph nor any statement under Section 498 of the Companies Act 2006.

  1. Going concern

    The Board used as its basis for the going concern review the budget for the FY22 year, rolled out to 30 April 2022 using part of its forecast for FY 2023, so that a full 12-month period from the date of signing the FY21 Annual Report and Accounts is considered. Due to the uncertainty created by COVID-19, in addition to applying the normal sensitivities to cash flows, the going concern review also included a reverse-stress test to demonstrate that even if new business and renewals are severely impacted by further lockdowns and impacts of the pandemic, the finances of the Group are in a robust position.

    The Group started the prior financial year on 1 February 2020 with cash of £5.1m and borrowings of £1.2m, giving net funds (before lease liabilities) of £3.9m. The Group started the current financial year on 1 February 2021 with cash of

    £7.3m and debt of £3.0m, giving net funds (before lease liabilities) of £4.3m, having increased its net cash in the year even after paying £0.6m of deferred consideration.

    Despite the pandemic, the year ended 31 January 2021 was a year of revenue, adjusted EBITDA* and operating cash flow growth. The two main contributors to this were the Group’s industry markets, Government, Utilities and Transport, not being adversely affected by Covid-19, and swiftly adapting to home working and remote delivery of projects.

    There was a Covid-19 related dip in new business generation in the first half, particularly in Europe, but the second half showed a strong performance, with a number of significant contract wins and new clients added in all Geographies.

    The growth of the pipeline of new business opportunities, and accelerated win rate in recent months, provides the Board with confidence that 1Spatial is on a path of profitable growth. We have entered the new year with a record level of contracted future revenue, a wide range of customers in stable industry segments of Government, Utilities and Transport and growing proof of delivery both in Europe and the USA.

    The Board has concluded, after reviewing the work performed and detailed above, that the Group has adequate resources to continue in operation for at least 12 months from the date of approval of the financial statements. Accordingly, they have adopted the going concern basis in preparing these financial statements.

  2. Segmental information

The chief operating decision-maker has been identified as the Board of Directors, which makes the Group’s strategic decisions. The Group is now focused on developing and selling repeatable solutions and recurring term licences globally, with associated support services. As such, the Board considers that the Group operates with only one segment and one CGU under one global strategy and the results are accordingly presented as group results only.

The following table provides an analysis of the Group’s revenue by type.

Revenue by type
 

2021

£’000

2020

£’000

Term licences

1,100

1,000

Support & maintenance - own

7,800

7,000

Support & maintenance – third party

1,700

1,600

Recurring revenue

10,600

9,600

Services

11,100

10,000

Perpetual licences - own

1,400

1,400

Perpetual licences – third party

1,500

2,400

Total revenue

24,600

23,400

The Group’s operations are located in the United Kingdom, Europe (Ireland, France and Belgium) the United States, Tunisia and Australia. The following table provides an analysis of the Group’s revenue by geographical destination.

Revenue by region
 

2021

£’000

2020

£’000

UK

7,160

7,381

Europe

11,460

11,080

US

2,908

2,250

Rest of World

3,072

2,674

Total revenue

24,600

23,385

The Board assesses the performance of the Group based on a measure of adjusted EBITDA. Adjusted EBITDA is a company-specific measure which is calculated as operating loss before depreciation (including right of use asset depreciation), amortisation and impairment of intangible assets, share-based payment charge and strategic, integration, and other non-recurring items (see note 4).

The following table provides an analysis of the Group’s revenue by country of domicile, split by whether the revenue is recognised at a point in time or over time.

 

2021

£’000

2020

£’000

UK/Ireland

8,443

8,810

At a point in time

1,081

1,651

Over time

7,362

7,159

Europe

11,150

10,242

At a point in time

1,687

2,158

Over time

9,463

8,084

United States

2,908

2,250

At a point in time

987

864

Over time

1,921

1,386

Australia

2,099

2,083

At a point in time

742

915

Over time

1,357

1,168
 

24,600

23,385

As at 31 January 2021, costs to obtain and fulfil a contract of £197,000 were included in other receivables (2020:

£113,000). Amortisation of costs to obtain and fulfil a contract for the year ended 31 January 2021 were £109,000 (2020: £71,000). The Group has no significant concentration risk with no major customers representing more than 10% of Group revenue. (2020: nil).

The Group has significant contract balances (both assets and liabilities), which arise out of the ordinary course of its operations. Contract assets include accrued income, which arises where chargeable work is performed, and the revenue is recognised based upon satisfaction of performance obligations in advance of invoicing the client. This can arise because, particularly for some larger projects, client invoicing may be in stages and linked to project milestones. Once an invoice is raised then the related accrued income will be reduced by the invoiced amount.

Significant contract liabilities arise when a client has been invoiced annually in advance (for example, for annual support and maintenance contracts) and the revenue is recognised on a monthly basis over the year. In that case, the initial invoiced amount is fully deferred and then released to the profit and loss over the course of the contract.

The following table provides an analysis of the Group’s non-current assets by location.

 

2021

£’000

2020

£’000

UK/Ireland

6,772

7,223

Europe

8,741

8,950

United States

2,755

3,007

Rest of World

5

26

Total

18,273

19,206

4. Strategic, integration and other non-recurring items

In accordance with the Group's policy for strategic, integration and other non-recurring items, the following charges were included in this category for the year:

 

2021

£’000

2020

£’000

Costs associated with the acquisition and integration of Geomap-Imagis

555

1,198

Net credits associated with the disposal of Enables IT

(63)

(31)

Total

492

1,167

Costs of £0.6m in relation to the acquisition and integration of the Geomap-Imagis acquisition comprise professional fees associated with integrating the operations, costs of legal and operational merger activities and redundancies as part of the restructuring.

The Group also received £63,000 further receipts related to the disposal of Enables IT in a prior year.

  1. Income tax credit

     

    2021

    £’000

    2020

    £’000

    Current tax

    UK corporation tax on income for year

    (187)

    (212)

    Foreign tax

    73

    (6)

    Adjustments in respect of prior years

    (268)

    48

    Total current tax

    (382)

    (170)

    Deferred tax (note13)

    Origination and reversal in temporary differences

    (111)

    (78)

    Effect of tax rate change on opening balance

    11

    -

    Adjustments in respect of prior years

    174

    -

    Total deferred tax

    74

    (78)
         

    Total tax credit

    (308)

    (248)

    Factors affecting the tax credit for the year:

    The tax credit for the year is higher (2020: lower) than the standard rate of corporation tax in the UK. The differences are explained below:

     

    2021

    £’000

    2020

    £’000

    Loss on ordinary activities before tax

    (1,433)

    (1,733)
     

    (1,433)

    (1,733)

    Loss on ordinary activities before tax multiplied by the effective rate of corporation tax in the UK of 19% (2020: 19%)

    (272)

    (330)

    Effect of:

    Expenses not deductible for tax purposes

    22

    157

    Adjustment in respect of R&D tax credits

    (191)

    (153)

    Effect of movement in deferred tax rate

    27

    (80)

    Utilisation of losses not previously recognised for tax purposes

    (170)

    (19)

    Deferred tax not recognised on losses carried forward

    440

    20

    Adjustments in respect of prior years

    (94)

    34

    Differences in tax rates applicable to overseas subsidiaries

    (70)

    123

    Total credit for year

    (308)

    (248)

    The relevant deferred tax balances have been measured at 19% for the current year-end, being the tax rate enacted by the reporting date (2020: 17%).

    In the Spring Budget 2021, the Government announced that from 1 April 2023 the corporation tax rate would increase to 25%. As the proposal to change the rate had not been substantively enacted at the balance sheet date, its effects are not included in these financial statements. However, it is likely that the overall effect of the change, had it been substantively enacted by the balance sheet date, would be to increase the deferred tax charge for the period of

    £71,500 and to increase the deferred tax liability by £71,500.

  2. Intangible assets including goodwill

     

    Goodwill

    £'000

    Brands

    £’000

    Customers

    and related contracts

    £’000

    Software

    £’000

    Development

    costs

    £’000

    Website costs

    £’000

    Intellectual property

    £’000

    Total

    £’000

    Cost

    At 1 February 2020

    17,291

    452

    4,579

    6,487

    16,932

    30

    66

    45,837

    Additions

    -

    -

    -

    75

    2,039

    -

    6

    2,120

    Written-off

    -

    -

    -

    -

    -

    (30)

    		  

    (30)

    Effect of foreign exchange

    156

    12

    185

    195

    314

    -

    -

    862

    At 31 January 2021

    17,447

    464

    4,764

    6,757

    19,285

    -

    72

    48,789

    Accumulated impairment and amortisation

    At 1 February 2020

    11,363

    204

    3,113

    4,185

    11,374

    30

    8

    30,277

    Amortisation

    -

    47

    422

    445

    1,889

    -

    3

    2,806

    Written-off

    -

    -

    -

    -

    -

    (30)

    -

    (30)

    Effect of foreign exchange

    185

    1

    106

    66

    191

    -

    -

    549

    At 31 January 2021

    11,548

    252

    3,641

    4,696

    13,454

    -

    11

    33,602

    Net book amount at 31 January 2021

    5,899

    212

    1,123

    2,061

    5,831

    -

    61

    15,187

    The net book amount of development costs includes £5,831,000 (2020: £5,558,000) internally generated capitalised software development costs that meet the definition of an intangible asset. The amortisation charge of £2,806,000 (2020: £2,058,000) is included in the administrative expenses in the statement of comprehensive income.

    The key assumptions used in the value in use calculations were the pre-tax discounts rate applied (13%) and growth assumptions. Sales forecasts and their corresponding costs for the Group in relation to the business applications for the five-year period ending 31 January 2026 are likely to increase by 12% p.a. overall. No impairment is required as no individual asset has a higher carrying value than its value in use.

     

    Goodwill

    £'000

    Brands

    £’000

    Customers

    and related contracts

    £’000

    Software

    £’000

    Development

    costs

    £’000

    Website costs

    £’000

    Intellectual property

    £’000

    Total

    £’000

    Cost

    At 1 February 2019

    16,161

    232

    2,843

    4,421

    15,012

    30

    66

    38,765

    Arising on acquisition

    1,338

    226

    1,847

    2,164

    -

    -

    -

    5,575

    Additions

    -

    -

    -

    -

    2,188

    -

    -

    2,188

    Effect of foreign exchange

    (208)

    (6)

    (111)

    (98)

    (268)

    -

    -

    (691)

    At 31 January 2020

    17,291

    452

    4,579

    6,487

    16,932

    30

    66

    45,837

    Accumulated impairment and amortisation

    At 1 February 2019

    11,533

    165

    2,754

    3,850

    10,232

    30

    7

    28,571

    Amortisation

    -

    40

    433

    385

    1,197

    -

    3

    2,058

    Impairment

    -

    -

    -

    -

    111

    -

    -

    111

    Effect of foreign exchange

    (170)

    (1)

    (74)

    (50)

    (166)

    -

    (2)

    (463)

    At 31 January 2020

    11,363

    204

    3,113

    4,185

    11,374

    30

    8

    30,277

    Net book amount at 31 January 2020

    5,928

    248

    1,466

    2,302

    5,558

    -

    58

    15,560

    Impairment tests for goodwill

    Goodwill is assessed for the Group as a whole as the Group operates with one segment and one CGU. The Group has moved from two CGUs to one as the Group now manages its operations under one global strategy and the European acquisition is now fully integrated into the business. All aspects of the business are focusing now on growing recurring revenue of repeatable solutions using technology that will be deployed globally under a single strategy. Products developed by regional development teams are marketed globally.

    2021

    2020

     

    Goodwill

    Total

    £’000

    Total

    £’000

    Opening carrying value 5,928 4,628

    image

    image

    Arising on acquisition - 1,338 Effect of foreign exchange (29) (38) Closing carrying value 5,899 5,928

    Basis for calculation of recoverable amount

    The Group has prepared, and formally approved, a five-year plan for its CGU (based on a formal 3-year plan extended for two more projected years). The detailed plan put together by the management team and the Board makes estimates for revenue and gross profit expectations. This is from both contracted and pipeline revenue streams. It also takes account of historical success of winning new work and has been prepared in accordance with IAS 36, ‘Impairment of Assets’.

    The key assumptions used in the value in use calculations were the pre-tax discount rates applied (13%) and the growth assumptions. Growth in sales and corresponding costs for the five-year period has been forecast at 12% and 6% per annum respectively.

    The rates used in the above assumptions are consistent with management’s knowledge of the industry and strategic plans going forward. The assumptions noted above have been given in terms of revenue and overhead percentage growth. For 2022 and subsequent years, the assumption has been provided in terms of growth on the prior year EBITDA. The terminal growth rate of 2% does not exceed the long-term growth rate for the business in which the CGUs operate. The discount rate used is pre-tax and reflect specific risks relating to the Group. The forecasts are most sensitive to changes in revenue and overhead assumptions (taken together as the EBITDA). However, there are no major changes to the key assumptions which would cause the goodwill to be impaired.

    There would have to be a reduction in forecast EBITDA by 24% in the year ending 31 January 2022 for the headroom to be removed.

    Current

    2021

    £’000

    2020

    £’000

    Trade receivables

    5,607

    5,012

    Less: provision for impairment of trade receivables

    (80)

    (68)
     

    5,527

    4,944

    Other receivables

    1,497

    1,431

    Prepayments and accrued income

    3,866

    3,555
     

    10,890

    9,930

  3. Trade and other receivables

    Total

    £’000

    At 1 February 2020

    2,613

    Accrued revenue invoiced in the year

    (2,613)

    Revenue accrued in the year

    2,847

    Foreign exchange difference

    103

    At 31 January 2021

    2,950

    Below is a reconciliation of the movement in accrued income:

    The fair value of the Group's trade receivables and other receivables is the same as its book value stated above. No interest is charged on overdue receivables.

    At 31 January 2021, trade receivables of £3,541,000 (2020: £3,681,000) were fully performing. Before accepting any new customer, the Group assesses the potential customer’s credit quality and defines credit limits by customer.

    The Group applies the IFRS 9 simplified approach to measuring expected credit losses using a lifetime expected credit loss provision for trade receivables and contract assets. To measure expected credit losses on a collective basis, trade receivables and contract assets are grouped based on similar credit risk and aging. The contract assets have similar risk characteristics to the trade receivables for similar types of contracts. The expected credit losses are based on the Group’s historical credit losses which are then adjusted for current and forward-looking information on macroeconomic factors affecting the Group’s customers. The Group has identified gross domestic growth rates, unemployment rates and inflation rates as the key macroeconomic factors in the countries in which the Group operates.

    At 31 January 2021, trade receivables of £1,986,000 (2020: £1,262,000) were past due but not impaired. The ageing analysis of these customers is set out below. There has been no change in the credit quality of these balances; they relate to customers where there is no history of default and are still considered fully recoverable.

     

    2021

    £’000

    Weighted average loss rate

    Impairment

    loss allowance

    £’000

    Current

    3,541

    0.1%

    4

    Up to 3 months overdue

    1,392

    0.5%

    7

    3 to 6 months overdue

    149

    2.5%

    4

    6 to 12 months overdue

    272

    5.0%

    14

    > 12 months overdue

    253

    20.0%

    51
     

    5,607

    		  

    80

    .

     

    2020

    £’000

    Weighted average loss rate

    Impairment

    loss allowance

    £’000

    Current

    3,681

    0.1%

    4

    Up to 3 months overdue

    997

    1.5%

    15

    3 to 6 months overdue

    87

    5.0%

    5

    6 to 12 months overdue

    123

    10.0%

    13

    > 12 months

    124

    25.0%

    31
     

    5,012

    		  

    68

    The ageing of these receivables is as follows:

    As of 31 January 2021, trade receivables of £80,000 were impaired (2020: £68,000) and provided for. The trade receivables above include performance retentions on long-term contracts.

    Movements on the Group provision for impairment of trade receivables are as follows:

     

    2021

    £’000

    2020

    £’000

    At 1 February

    68

    13

    Created on acquisition

    -

    55

    Increase in provision

    12

    -

    At 31 January

    80

    68

    The other classes within trade and other receivables do not contain impaired assets and the Group expects to recover these in full. There are no financial assets whose terms have been renegotiated that would otherwise be past due or impaired.

    The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivable noted above. The Group does not hold any collateral as security.

  4. Cash and cash equivalents and notes to the consolidated statement of cash flows

     

    2021

    £’000

    2020

    £’000

    Cash at bank and in hand

    7,278

    5,108
     

    7,278

    5,108

    The fair value of the Group's cash and cash equivalents is the same as its book value stated above.

    Notes to the consolidated statement of cash flows

    1. Cash generated from operations

       

      2021

      £'000

      2020

      £'000

      Loss before tax

      (1,433)

      (1,733)

      Adjustments for:

      Finance income

      (39)

      (40)

      Finance cost

      226

      184

      Depreciation

      1,308

      1,030

      Amortisation of acquired intangibles

      917

      861

      Amortisation and impairment of development costs

      1,889

      1,308

      Share-based payment charge

      272

      398

      Net foreign exchange movement

      (34)

      167

      Increase in trade and other receivables

      (655)

      (2,377)

      Increase in trade and other payables

      1,446

      702

      Increase in defined benefit pension obligation

      86

      72

      Cash generated from operations

      3,983

      572
       

      2021

      £'000

      2020

      £'000

      Cash generated from operations before strategic, integration and other non-recurring items

      4,156

      1,861

      Cash flow on strategic, integration and other non-recurring items

      (173)

      (1,289)

      Cash generated from operations

      3,983

      572

    2. Reconciliation of net cash flow to movement in net funds

     

    2021

    £'000

    2020

    £'000

    Increase/(Decrease) in cash in the year

    1,976

    (1,178)

    Changes resulting from cash flows

    1,976

    (1,178)

    Net cash inflow in respect of new borrowings

    (1,800)

    (672)

    Change in net funds due to borrowings acquired

    -

    (731)

    Net cash outflow in respect of borrowings repaid

    146

    133

    Effect of foreign exchange

    57

    (23)

    Change in net funds

    379

    (2,471)

    Net funds at beginning of year

    3,887

    6,358

    Net funds at end of year

    4,266

    3,887

    Analysis of net funds

    Cash and cash equivalents classified as:

    Current assets

    7,278

    5,108

    Bank loans

    (3,012)

    (1,221)

    Net funds at end of year

    4,266

    3,887

    Net funds is defined as cash and cash equivalents net of bank loans.

    c) Reconciliation of movement in liabilities from financing activities
     

    Bank borrowings and leases due within 1 year

    Bank borrowings and leases due after 1 year

    Total
     

    £'000

    £'000

    £'000

    Total debt (including lease liabilities) as at 1 February 2020

    1,092

    3,426

    4,518

    Borrowings at 1 February 2020

    135

    1,086

    1,221

    New borrowings in the year

    -

    1,800

    1,800

    Repayment of borrowings

    (146)

    -

    (146)

    Foreign exchange difference

    11

    126

    137

    Borrowings before transfer

    -

    3,012

    3,012

    Transfer from due after 1 year to due within 1 year

    470

    (470)

    -

    Borrowings as at 31 January 2021

    470

    2,542

    3,012

    Lease liability at 1 February 2020

    957

    2,340

    3,297

    Cash movements:

    Lease payments

    (1,183)

    -

    (1,183)

    Rent concession

    (88)

    -

    (88)

    Non-cash movements:

    Additions in the year

    -

    586

    586

    Interest cost

    114

    -

    114

    Foreign exchange difference

    200

    (258)

    (58)

    Lease liability before transfer

    -

    2,668

    2,668

    Transfer from due after one year to due within one year

    925

    (925)

    -

    Lease liability as at 31 January 2021

    925

    1,743

    2,668

    Total debt (including lease liabilities) as at 31 January 2021

    1,395

    4,285

    5,680

  5. Bank borrowings

     

    2021

    £’000

    2020

    £’000

    Current bank borrowings

    470

    135

    Non-current bank borrowings

    2,542

    1,086
     

    3,012

    1,221

    Bank borrowings relate to bank loans 1Spatial France and Geomap-Imagis totalling. Bank loan interest is charged on a fixed rate basis with interest rates ranging between 0% and 3.1%, included the related guarantee costs.

    The loans are due for repayment over a five-year period, with a broadly even repayment pattern with approximately

    €0.5m (£0.4m) due for repayment in FY 2022. New borrowings in the year amounted to £1.8m. There are no financial covenants attached to the loans, nor is there any security applied. All loans are denominated in €.

  6. Trade and other payables

    Current
     

    2021

    £’000

    2020

    £’000

    Trade payables

    1,736

    2,143

    Other taxation and social security

    3,496

    2,477

    Other payables

    852

    996

    Accrued liabilities

    1,464

    905

    Deferred income

    5,870

    4,918
     

    13,418

    11,439

    The Directors consider that the book value of trade payables, taxation, other payables, accrued liabilities and deferred income approximates to their fair value at the reporting date.

    Below is a reconciliation of the movement in deferred income:

    Total

    £’000

    At 1 February 2020

    4,918

    Revenue recognised in the year

    (4,918)

    Revenue deferred at year end

    5,719

    Foreign exchange difference

    151

    At 31 January 2021

    5,870

  7. Leases

    Right of use assets

    £’000

    At 1 February 2020

    3,272

    Additions during the year

    598

    Depreciation

    (1,106)

    Foreign exchange difference

    (70)

    At 31 January 2021

    2,694
     

    31 January 2021

    £’000

    31 January 2020

    £’000

    Buildings

    2,428

    3,004

    Cars

    216

    221

    Others

    50

    47
     

    2,694

    3,272

    Lease liabilities

    £’000

    At 1 February 2020

    3,297

    Additions during the year

    586

    Rent concession

    (88)

    Interest cost

    114

    Cash paid

    (1,183)

    Foreign exchange difference

    (58)

    At 31 January 2021

    2,668
     

    31 January 2021

    £’000

    1 February 2020

    £’000

    Current

    925

    957

    Non-current

    1,743

    2,340
     

    2,668

    3,297

    Amounts recognised in profit or loss:

    Depreciation charge of right of use assets

    2021

    £’000

    2020

    £’000

    Buildings

    970

    759

    Cars

    104

    92

    Others

    32

    27
     

    1,106

    878

    The Group has elected to utilise the practical expedient for all rent concessions that met the criteria under the amendment to IFRS 16 (Covid-19-Related Rent Concessions). The effect of applying the practical expedient was a credit to administrative expenses of £88k (FY 20: nil).

  8. Business combinations

    On 7 May 2019, the Company entered into two share purchase agreements (each a “SPA”) to acquire the entire issued share capital of Geomap-Imagis Participations (“Geomap-Imagis”) (the “Acquisition”), for a total consideration of €7.0m (the “Consideration”). Full details of the acquisition were provided in the Annual Report for the year ended 31 January 2020. No changes were made in the year ended 31 January 2021 to the previously reported fair values and resulting goodwill.

    During the year, further costs were incurred associated with the acquisition and integration of the Geomap-Imagis Group amounting to £0.5m as disclosed in note 4.

    In June 2020, 1Spatial France paid the deferred consideration of €0.7m (£585,000) of the cash consideration which had been held in escrow until the first anniversary of Completion.

    As at 31 January 2021, a balance of €440,540 (£390,000) Consideration Shares remained outstanding to be satisfied on 30 March 2023.

    As disclosed in note 16, Post Balance Sheet Events, the terms of the Share Purchase agreement were amended.

  9. Deferred tax

    The following are the major deferred tax liabilities and (assets) recognised by the Group and movements thereon during the current year and prior reporting years.

     

    Tax losses

    £’000

    Accelerated

    tax depreciation

    £’000

    Intangibles

    £’000

    Other temporary differences

    £’000

    Total

    £’000

    At 1 February 2019

    (405)

    22

    586

    (11)

    192

    Acquired in the year

    (310)

    -

    1,059

    (188)

    561

    Deferred tax (credit)/charge for year in profit or loss

    100

    (22)

    (149)

    (7)

    (78)

    DT charge/(credit) OCI

    -

    -

    -

    23

    23

    Foreign exchange difference

    -

    -

    (20)

    1

    (19)

    At 31 January 2020

    (615)

    -

    1,476

    (182)

    679

    Deferred tax (credit)/charge for year in profit or loss

    53

    -

    (121)

    142

    74

    DT charge/(credit) OCI

    -

    -

    -

    5

    5

    Foreign exchange difference

    -

    -

    -

    18

    18

    At 31 January 2021

    (562)

    -

    1,355

    (17)

    776

    Deferred income tax assets are recognised against tax loss carry-forwards to the extent that the realisation of the related tax benefit through future taxable benefits is probable. The Group did not recognise potential deferred tax assets of £4,018,000 (2020: £3,859,000) in respect of losses amounting to £18,029,000 (2020: £18,442,000) that can be carried forward against future taxable income, on the grounds that at the balance sheet date their utilisation is not considered probable.

    The deferred tax balance is analysed as follows:

     

    Deferred tax

    asset

    £’000

    Deferred tax

    liability

    £’000

    Total

    £’000

    Recoverable within 12 months

    -

    356

    356

    Recoverable after 12 months

    -

    999

    999

    Settled within 12 months

    (85)

    -

    (85)

    Settled after 12 months

    (494)

    -

    (494)
     

    (579)

    1,355

    776

  10. Share capital, share premium account and own shares held

    Allotted and fully paid

    2021

    Number

    2020

    Number

    Ordinary shares of 10p each

    110,805,795

    110,805,795

    Deferred shares of 4p each

    226,699,878

    226,699,878

    Rights of shares

    Ordinary shares

    The ordinary shares all rank pari passu, have the right to participate in dividends and other distributions made by the Company, and to receive notice of, attend and vote at every general meeting of the Company. On liquidation, ordinary shareholders are entitled to participate in the assets available for distribution pro rata to the amount credited as paid up on such shares (excluding any premium).

    Deferred shares

    The deferred shares do not carry voting rights or a right to receive a dividend. The holders of deferred shares will not have the right to receive notice of any general meeting of the Company, nor have any right to attend, speak or vote at any such meeting. The deferred shares will also be incapable of transfer (other than to the Company). In addition, holders of deferred shares will only be entitled to a payment on a return of capital or on a winding up of the Company after each of the holders of ordinary shares has received a payment of £1,000,000 in respect of each ordinary share. Accordingly, the deferred shares will have no economic value. No application will be made for the deferred shares to be admitted to trading on AIM nor to trading on any other stock or investment exchange.

    Voting Rights

    1Spatial Plc has 110,805,795 ordinary shares of 10p in issue, of which a total of 319,635 ordinary shares are held in treasury. Therefore, the total number of ordinary shares with voting rights is 110,486,160*.

    * In addition, there are deferred consideration shares with an approximate value of €0.03 million (€0.4m at 31 January 2021) due to be issued in March 2023, in relation to the Geomap-Imagis acquisition. See note 16.
     

    Number of

    shares

    Allotted, called up and fully

    paid shares

    £’000

    Share premium account

    £’000

    Own shares

    held

    £’000

    At 1 February 2019

    325,731,767

    18,971

    28,661

    (303)

    Issue of shares

    11,773,906

    1,179

    2,119

    -

    Share issue costs

    -

    -

    (301)

    -

    At 31 January 2020 and at 31 January 2021

    337,505,673

    20,150

    30,479

    (303)

    There was no movement in share capital in the year. In the prior year, of the 11,773,906 shares were issued in the year relating to the Geomap-Imagis acquisition, 9,871,220 were issued for cash which increased share capital by £987,000 and share premium by £2,119,000 before share issue costs of £301,000. The remaining 1,902,686 were issued through acquisition of shares which increased share capital by £192,000 and increased the merger reserve by £435,000.

    Own shares

    The Group has 319,635 ordinary shares of 10p each and 3,500,000 deferred shares with a nominal value of 4p each held in treasury. The consideration paid was £306,000.

  11. Earnings/(loss) per ordinary share

    Basic (loss)/profit per share is calculated by dividing the loss attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the year.

     

    2021

    £’000

    2020

    £’000

    Loss attributable to equity shareholders of the Parent

    (1,125)

    (1,485)
     

    2021

    Number

    000s

    2020

    Number

    000s

    Ordinary shares with voting rights

    110,486

    107,284

    Deferred consideration payable in shares

    1,394

    1,154

    Basic weighted average number of ordinary shares

    111,880

    108,438

    Impact of share options/LTIPS

    2,495

    1,743

    Diluted weighted average number of ordinary shares

    114,375

    110,181
     

    2021

    Pence

    2020

    Pence

    Basic and diluted loss per share

    (1.0)

    (1.4)

    Basic loss per share and diluted loss per share are the same because the options are anti-dilutive. Therefore, they have been excluded from the calculation of diluted weighted average number of ordinary shares.

  12. Post balance sheet events

    Amendments to Geomap-Imagis Share Purchase Agreement (SPA)

    The final step in the integration of Geomap-Imagis (“G-I”), which was acquired in May 2019, was completed in March 2021. As part of the restructuring, two of the G-I founders and former directors will be leaving the business and the parties agreed to amend the original SPA as explained below.

    Under the original terms, the Group agreed to pay the vendors consideration, which included €1,166,999 to be satisfied by the issue by 1Spatial of ordinary shares (the "Consideration Shares").

    Of the consideration to be satisfied by the issue of the Consideration Shares, €726,459 was satisfied immediately upon Completion, with the balance of €440,540 to be satisfied on 30 March 2023 (the “Deferred Share Consideration Amount”). Accordingly, on Completion the Company issued to the vendors 1,902,686 new ordinary shares (the "Initial Consideration Shares"), subject to a lock up obligation until 31 December 2021.

    In connection with completion of the integration of G-I, the Group has entered into an Amendment Agreement with these two GI founders and former directors in March 2021 to amend the terms of the original agreement primarily as follows:

    • Release 1,765,173 of the Initial Consideration Shares (the “Released Shares”) from the above-mentioned lock up obligation; and

    • pay out in cash to certain of the vendors, at the earlier date of 10 September 2022, €408,701 of the Deferred Share Consideration Amount.

      Pursuant to the terms of the Amendment Agreement, the Released Shares remain subject to an orderly market provision for 3 months.

  13. Availability of annual report and financial statements

Copies of the Company's full annual report and financial statements are expected to be posted to shareholders in due course and, once posted, will also be made available to download from the Company's website at www.1spatial.com .

1Spatial plc is registered in England and Wales with registered number 5429800. The registered office is c/o Tennyson House, Cambridge Business Park, Cambridge, Cambridgeshire, CB4 0WZ.