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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| 1Spatial Plc | AQSE:SPA.GB | Aquis Stock Exchange | Ordinary Share | GB00BFZ45C84 |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 71.50 | 67.00 | 73.00 | 71.98 | 70.00 | 71.50 | 34 | 16:29:45 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Jan 2023 to Jan 2025
TIDMSPA
RNS Number : 4521X
1Spatial Plc
26 April 2023
This announcement contains inside information for the purposes of article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018.
26 April 2023
1Spatial plc
("1Spatial", the "Group" or the "Company")
Final results for the year ended 31 January 2023
1Spatial, (AIM: SPA), 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 2023.
-- Significant high-value contracts signed in FY 2023 combined with a strong pipeline of prospects.
-- Organic revenue growth achieved from new customer wins and expansion contracts in all regions.
-- A significant increase in Group profit before tax compared to FY 2022.
Financial highlights
Hot Features
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31 January 31 January Change
2023 2022
GBPm GBPm %
Group revenue 30.0 27.0 +11
Recurring revenue 14.8 12.2 +21
Term licences revenue 5.2 2.9 +79
Group total ARR* 15.8 13.4 +18
Term licences ARR* 5.6 4.1 +37
Group gross profit 15.5 13.9 +12
Adjusted EBITDA** 5.0 4.2 +19
Adjusted EBITDA** margin (%) 16.7 15.5 +1.2pp
Operating profit 1.3 0.4 +225
Profit before tax 1.0 0.2 +400
Earnings per share - basic
(p) 1.0 0.3 +233
Earnings per share - diluted
(p) 0.9 0.3 +200
Net cash*** 3.1 3.2 (3)
* Annualised recurring revenue ("ARR") - Annualised Recurring Revenue ("ARR") is the annualised value at the year-end of committed recurring contracts for term licences and support & maintenance.
** Adjusted EBITDA - Adjusted EBITDA is a company-specific measure which is calculated as operating profit/(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.
*** Net cash - Net cash is gross cash less bank borrowings.
Operational highlights
-- Approximately 50% of revenue represented by recurring revenue with year-on-year term licence revenue growth of 79%.
-- Continued R&D investment in innovative solutions creating market-leading Location Master Data Management ('LMDM') platform.
-- Inflationary cost pressures across the business being well managed, with the increasing strength of the balance sheet providing the confidence to continue investment into people and offering.
-- Named among the top 100 organisations featured in the 2023 UK's Most Loved Workplace(R) list, backed by Best Practice Institute ('BPI') research and analysis.
Outlook
-- Trading in the current financial year has started positively with a significantly growing sales pipeline.
-- Two new SaaS offerings in trials with customers, representing an additional avenue for growth.
-- Increased investment to accelerate scale up of the sales team to capture the substantial opportunity presented.
-- Continuing growth of ARR and revenue backlog provides comfort during challenging macro environment.
-- While cognisant of inflationary cost pressures, the Board remains confident in delivering further progress in FY 2024.
Commenting on the update, 1Spatial CEO, Claire Milverton, said:
"This year confirmed that 1Spatial sits right at the heart of numerous changes across multiple sectors. We secured a number of high-profile wins, invested in our technology and sales team, and expanded our customer and partner networks to position the business to serve a range of customers globally.
"Looking ahead, we continue to see multiple areas of significant opportunity, particularly in the US and for our new SaaS offerings. Through the launch of our cloud platform we are adding a new layer of potential growth, targeting niche areas of the location market where we have identified significant demand and low levels of competition. We believe these offerings have the potential to be transformational for 1Spatial.
"Trading in the new financial year has begun positively. Our growing sales pipeline and increased levels of recurring revenue provide the Board with confidence in the Group's prospects. We will continue to invest in our sales team and offering in order to capture what we believe to be a considerable long-term growth opportunity."
For further information, please contact:
1Spatial plc 01223 420 414 Claire Milverton / Stuart Ritchie Liberum (Nomad and Broker) 020 3100 2000 Max Jones / Edward Mansfield / Miquela Bezuidenhoudt Alma PR 020 3405 0205 Caroline Forde / Hannah Campbell 1spatial@almapr.co.uk
1Spatial plc's LEI Number is: 213800VG7OZYQES6PN67
About 1Spatial plc
1Spatial plc is a global leader in providing Location Master Data Management ('LMDM') software and solutions, primarily to the Government, Utilities and Transport sectors. Our global clients include national mapping and land management agencies, utility companies, transportation organisations, government and defence departments.
Today - as location data from smartphones, the Internet of Things and great lakes of commercial Big Data increasingly drive commercial decision-making - our technology drives efficiency and provides organisations with confidence in the data they use.
We unlock the value of location data by bringing together our people, innovative solutions, industry knowledge and our extensive customer base. We are striving to make the world more sustainable, safer and smarter for the future. We believe the answers to achieving these goals are held in data. Our 1Spatial Location Master Data Management (LMDM) platform incorporating our 1Integrate rules engine delivers powerful data solutions and focused business applications on-premise, on-mobile and in the cloud. This ensures data is current, complete, and consistent through the use of automated processes and always based on the highest quality information available.
1Spatial plc is AIM-listed, headquartered in Cambridge, UK, with operations in the UK, Ireland, USA, France, Belgium, Tunisia and Australia.
For more information visit www.1spatial.com
Chairman's Report
1Spatial has delivered another year of solid growth, securing landmark new customers across our key geographies, many of which have the potential for further expansion. We have increased investment in the business, adding to our team and product and thereby enhancing the ability of the business to scale through the sale of repeatable business applications and software solutions.
Despite the current macro environment, digital transformation and government investment initiatives continue at pace and are driving a substantial need for data management tools, particularly those capable of managing complex location data. 1Spatial is increasingly being chosen as the provider for these projects sitting at the heart of this rapidly increasing demand.
Our key financial objectives for the year were to grow recurring revenues, while generating funds to be reinvested into the business. We are making meaningful progress against our strategic priorities and I am delighted to report that we achieved double-digit revenue and profit growth this year. Our focus on growing recurring revenue can be seen in the increasing proportion of recurring revenues we are now generating, which now account for approximately 50% of total revenue. The Group has successfully managed inflationary pressures, achieving adjusted EBITDA growth, resulting in our second year of operating profit and profit before tax.
Operational successes
We have won several new landmark customers across all regions, with particular success in the UK and the US, some of which provide us with secure long-term levels of annual recurring revenue ('ARR') and excellent references and opportunities to increase revenues within these accounts.
People
During FY 2023, we invested in the expansion of our senior leadership team to ensure we have the depth of management to deliver our growth strategy and have been encouraged by the immediate positive impacts the new team members have made. We were delighted to welcome Stuart Ritchie to the Board as CFO in December 2022; he will provide great financial leadership to the business alongside Claire and the team, as we seek to capture the considerable opportunity ahead of us. On behalf of the Board, I would like to thank Andrew Fabian for the role he has played as CFO in seeing 1Spatial safely into its next stage of growth, providing the business with a solid financial platform to support its evolving SaaS business model.
Environmental, Social and Governance ('ESG')
Like many businesses, ESG is very important to 1Spatial as we strive to make the world safer, smarter and more sustainable for the future. This year, we launched our ESG strategy and established an ESG steering committee. During the coming year, we also plan to undertake a detailed carbon assessment, starting with our UK operations, further details of which are set out in the Annual Report.
Summary and outlook
This year 1Spatial has become a more robust business with an increasing ability to capture the increasing demand for accurate and usable location data. We are successfully delivering against our three-year growth plan, improving profits and cash generation, whilst continuing to invest in our platform which will act as a catalyst for future expansion.
Looking ahead, we continue to see significant opportunities from the US, from our expanding partner network and from our investment in our market-leading cloud platform. Through the launch of our cloud platform, we are adding a new layer of potential growth, targeting niche areas of the location market where we have identified significant demand and low levels of competition, for example our automated solution for the creation of traffic management plans ('TMPA').
We enter the new financial year in a strong position and we believe the investments made over the past year in our people and technology position us well to take advantage of the huge opportunity that is ahead. With a strong sales backlog and increased levels of recurring revenue, I am confident the Group's success over the past 12 months is set to continue.
Andy Roberts
Non-Executive Chairman
CEO Review
This has been another year of progress for 1Spatial achieving growth despite a difficult economic backdrop, delivering across our strategic growth pillars of Innovation, Customer Relationships and Smart Partnerships.
Resilient financial performance
The Group achieved double-digit revenue growth in the year, with an increasing proportion of recurring revenues, which now account for approximately 50% of total revenue. Within that, high margin software term licence revenue increased by 79% to over GBP5 million.
Our rules engine, 1Integrate, and cloud portal, 1Data Gateway, are recognised both by our customers and a growing number of influential partners, as powerful tools to ensure good quality data and trust when sharing data. Through our offering, we help over 1,000 customers, spanning key sectors such as government, utilities and transportation, make better business decisions and move towards a smarter world, through improved accuracy and sharing of location data.
We are global leaders in providing Location Master Data Management and this proposition is at the intersection of two global growing markets. Firstly, the global geographic information system ('GIS') market size reached US$ 10.1 billion in 2021. Looking forward, the IMARC Group expects the market to reach US$ 21.1 billion by 2027, a CAGR of 13.1% during 2022-2027. Similarly, the global master data management market was valued at US$16.68 billion in 2022 and is expected to grow to US$ 54 billion by 2030 at a CAGR of 15.8% during the forecast period according to Polaris Market Research.
US delivering strong growth
The US has been key to the Group's expansion, being the most significant contributor of recurring revenue with growth of 45% in annualised recurring revenue at constant currency. During the year, we successfully sold and implemented 1Integrate and 1Data Gateway in several clients, both new and expanding on existing contracts, building our annual recurring revenue from our repeatable solutions such as Next Generation 9-1-1.
US legislation requires all states to upgrade their emergency services and public safety systems. Building digital platforms and incorporating the use of location data to support Next Generation ('NG') 9-1-1 services and ensure a modern and safe emergency response system. Our NG-9-1-1 solution, now being implemented in eight US states, ensures that emergency services are using validated, integrated and up-to-date data and ultimately that the teams on the ground can respond to incidents more quickly.
The launch of our cloud platform in January 2023 also means we now offer a "light version" NG9-1-1 SaaS solution aimed at the counties and cities within each state, significantly increasing our addressable opportunity. We continue to invest in this solution and the trials are progressing as planned.
There is also sizeable opportunity for growth within each state by launching additional solutions, including Highway Performance Monitoring Systems ('HPMS') and Conflation. HPMS offers US highway agencies the ability to fully comply with reporting requirements on the use of the routes within their jurisdiction. The Conflation solution enables the aggregation of large quantities of data, the automatic selection of the best quality data points and the generation of an accurate, reliable whole data set. We have already seen success in California where we have doubled the initial annual term licence revenue through the upsell of additional solutions.
This all contributes to a high-margin medium-term opportunity, based around our own IP and channels to market that can transform the economics of our US operation. Further out we have the opportunity for expansion into Canada and Latin America.
Europe
In FY 2022, Europe was the most significant geographical component at a revenue level. However, year- on-year growth of 1% in FY 2023 led to this segment dropping behind the UK in FY 2023. Europe experienced some delays in FY 2023 transitioning its large customer base away from perpetual licences, but we are encouraged by the year-on-year increase of 15% in Europe's Annual Recurring Revenue ('ARR') as well as a significant increase in term licence revenue compared to last year. On 1 February 2023, we appointed a highly experienced European Sales Director to lead this transition and to focus our teams on sales of proprietary product.
UK
In the UK, we have delivered top and bottom-line growth through new multi-year contracts across different sectors. We signed our first contract with HS2, to build a data validation gateway, which has significant potential for further expansion. The gateway solution will enable HS2 to validate the quality, conformance and design of construction-related data submitted by their supply chain, which in turn will contribute to the efficiency and effective information delivery on Europe's largest infrastructure project.
We are pleased that the first phase of the NUAR Project ('National Underground Asset Register') (also known as the MVP stage), has now been completed and launched by government on 5 April 2023. This first phase of NUAR contains data from public and private sector organisations which own pipes and cables in North East England, Wales and London including all of the major energy and water providers.
Successes such as these in the UK, and the considerable size of our sales pipeline, give us the confidence to continue to invest in the business. We have the right structure to deliver on the growing opportunity as we move into the final year of our three-year growth plan.
Strategic review
We are building our highly scalable business on three pillars: Innovation, Customer Relationships and Smart Partnerships and I am proud to report considerable progress against all three throughout the year.
Innovation
Innovation lies at the heart of 1Spatial and during the year we invested in our market-leading platform to ensure our patented software remains at the forefront of the expanding industry. Our software can handle huge volumes of complex data allowing our customers not only to ensure accuracy and security but also save significant amounts of time and money, giving them the ability to solve complex challenges in the management of their spatial and non-spatial data.
The 1Spatial Platform for Location Master Data Management can be split into two key areas, one of which is Data Management Solutions (managing data to ensure it is correct, consistent and compliant) which we continued to invest in throughout the year, including in our patented 1Integrate rules engine and our cloud-enabled portal 1Data Gateway, to improve the user experience. This innovation in both 1Integrate and 1Data Gateway facilitated further growth and accessibility of our solutions and the development team continue to assess the products against both customer and market needs.
The second key area is Business Applications where we have expanded our addressable market opportunity through the launch of new offerings and cloud-based versions of some core solutions, making our technology available to mid-tier organisations.
We provide two types of business applications to meet our customers' 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.
Applications plugged directly into the 1Spatial Platform
-- Specific Business Applications - term licences (cloud enabled)
We have targeted applications such as those for NG9-1-1 which are cloud enabled and can reside within a customer's own infrastructure, within their own private cloud or 1Spatial can offer a hosted solution.
-- Specific Business Applications - SaaS applications
This year, we continued the development of our Traffic Management Plan Automation ('TMPA') solution for production of traffic management within minutes. This is a UK application and is currently undergoing trials by selected customers.
-- Validation Applications (Validation as a Service - VaaS)
These applications validate data to a pre-defined set of rules and return a report and visual map-based representation of the errors. The first of these applications is NG9-1-1 which we have now launched and is undergoing trials. We have also identified a number of other VaaS solutions across our territories which we will be looking to trial during H2 of FY24.
Both the Specific Business Applications and Validation Applications provide the Group with potential exciting new "go to" market models, lowering the price point for new customers onto the platform, making our technology available to mid-tier organisations.
-- Launch of 1Spatial cloud platform
During the year, we finalised the majority of the development on the 1Spatial cloud platform which will allow us to sell the cloud solutions noted above. The multi-tenancy SaaS platform will be more cost effective for 1Spatial as we will be managing fewer deployments and the elastic nature of the platform architecture is more cost efficient.
Applications using the benefits of Esri technology
To meet our customers' needs we also invested in our Esri based business applications, such as 1Water and 1Telecomms which manage water and telecom networks respectively. Whilst these applications are being sold to new customers they are also necessary to facilitate the migration from the Group's legacy Elyx platform to Esri-supported solutions.
Customer relationships
We continued to strengthen our relationships with existing customers throughout the year and secured landmark new customer wins across all territories, with particular growth in the UK and US, including high-profile national-level digital transformation initiatives. This has demonstrated 1Spatial's increasing ability to secure larger contracts across key geographies and to design, deliver and implement large-scale critical systems. We typically expand our customer relationships over time, as we identify additional areas in which our software and expertise can support our customers.
This year we undertook a customer satisfaction survey with our global key accounts and, although we recognise there are areas to address, compared to the 40+ industry average of B2B software and SaaS organisations, we are satisfied with the results of an overall 8.1 Net Promoter Score. (Source: Retently B2B sample of 10,000 B2B organisations)
The success of our customer focus, combined with ongoing transition to term licencing, can be seen in the 26% growth in Annualised Recurring Revenue driven both by new customer wins and expansion of existing customer accounts.
Land and expand
Key new customer wins include:
-- High Speed Two (HS2) - supporting the UK's new high speed rail network to build a data validation gateway (GBP0.9m over two years with the potential for expansion for a further two years).
-- Major multi-year contract with a leading European aerospace agency - for s oftware licenses, including 1Telecomms and 1Integrate, for the implementation and subsequent annual recurring software and managed services. The total value of the contract over five years is approximately EUR3 million .
-- Five year contract with University of Maryland CATT Labs - with an initial value of around US$0.6 million, which will be recognised over the five-year period, adding to the Group's annual recurring revenue.
-- Contract with the state of New York - for various proof-of-concept projects using 1Integrate and 1Data Gateway.
-- Seven year contract with the state of Arkansas - for NG9-1-1, for US$1.2 million over the period and now the eighth US state to select the solution.
-- Contract with the Eastern Transportation Coalition, a partnership of 18 US east coast states and Washington DC, which has secured its first contract through the marketplace, for US$400k with Massachusetts Department of Transportation.
-- Contract with the state of Indiana - for various proof-of-concept projects using 1Integrate and 1Data Gateway.
-- Contract with Highlander Tek in the USA for licence fees for 1Integrate and 1Data Gateway, for US$90k, a geospatial platform that provides delivery-specific location information to streamline the shipping process from quote to delivery to payment.
These new clients provide secure long-term levels of ARR and excellent references and opportunities to increase revenues within these accounts.
Customer expansion contracts in the period, included:
-- Department of Environment, Food and Rural Affairs ('Defra') to support the Land Management System, operated by Defra's Rural Payments Agency ('RPA'), in partnership with Version 1 - GBP1.2 million over five years.
-- Another contract win with Defra and RPA to support its field collection system - GBP0.5 million (GBP0.4 million licence over two years).
-- Multi-year framework agreement with Land and Property Services in Northern Ireland in partnership with Version 1, to support the Department of Finance's ongoing programme of Digital Transformation.
-- Managed service for a major utility organisation in France in support of the deployment of 1Water - EUR0.3 million.
-- US$1.4 million expansion contract with the state of California over four years - secured in partnership with Rizing (now Wipro), a global SAP partner. The state of California is an existing client of 1Spatial, having already selected 1Spatial's Next Generation 9-1-1 solution.
-- Additional services and licences for Google Real Estate and Workplace Services - US$0.9 million (US$0.3 million licence).
-- In France, 32 existing customers have completed or commenced migration from the Group's legacy Elyx platform to Esri-supported solutions, including 1Water.
Smart partnerships
Partnerships have played a critical role in enabling us to secure new customers in the year, demonstrating the credibility of these businesses.
Key focus areas have been to identify and extend our relationships with large global corporates, where location data management forms part of a larger customer bid, and to extend our technology partnerships with Esri and other geospatial vendors such as Hexagon Geospatial.
Key partnership highlights include the signing of a teaming agreement (delivery partnership) with CGI Inc., one of the world's largest independent IT and business consulting services firms, to be a strategic delivery partner on a five-year contract with the Home Office. We also started working in partnership with ATOS, a global leader in digital transformation and Rizing (now part of Wipro), a global SAP partner. We secured a four-year contract with the California Department of Transportation ('Caltrans') which was won in conjunction with Rizing and is an indication that our strategic growth plan in the US continues to bear fruit.
Large global corporates
We are increasingly being selected as the data integrity provider within a consortium, cleansing the data before passing it back through wider systems. The depth of our data domain expertise and the enterprise grade of our software means we are one of the few technology partners able to work on the scale that our partners need.
New partners we have commenced work with this year include Atkins, Qinetiq and Landmark. We also strengthened our longstanding partnership with both Version1 and Ordnance Survey.
Technology partnership - Esri
Our long-term partnership with Esri is a key differentiator for us in many markets and provides a major opportunity as we build our own IP solutions. Esri is the global market leader in GIS with a network of over 2,700 partners around the world. We are engaging with our European contacts to showcase our Utility Network Migration Capabilities to different geographies across Europe.
Corporate activity
We will continue to identify potential strategic and bolt-on acquisitions to complement our organic growth.
People
The success of our business is a tribute to our employees' commitment and knowledge. We continue to invest in our people, providing them with the tools and training to support and allow them to realise their potential. The success of this is evidenced through our selection as one of the top 100 organisations featured on the 2023 UK's Most Loved Workplace(R) list backed by Best Practice Institute ('BPI') research and analysis. This was based on our scores on their Love of Workplace Index(TM), which surveys employees on employee satisfaction and sentiment, including the level of respect, collaboration, support, and sense of belonging they feel inside the Company.
We continue to roll out mental health awareness training, internal events and initiatives to encourage staff to take time out from their working day and have appointed mental health first aiders. We kicked off our annual wellbeing month in September 2022 and held a range of activities including an employee volunteering community clean-up day in the UK.
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, Thanksgiving, Mental Health Awareness Week, Earth Day and Health and Happiness Month.
We continuously monitor the skills and expertise of the senior leadership teams across all of our regions. During the latter stages of FY23 and early part of FY24, we brought a highly experienced Sales Director into each of our European and US businesses. These individuals will enable us to deliver on the growing opportunities ahead of us and to ensure we have the ability to grow our sales pipeline across our key geographies.
During the year we carried out an employment engagement survey to determine employee satisfaction. We were delighted with the overall results and feel that we have developed a great team spirit as an organisation. The survey showed that over 80% of our people are happy with their line manager relationship and feel respected and trusted by their line manager and peers and 70% of colleagues felt that they were regularly informed with relevant 1Spatial news. We will continue to survey the team and strive to improve our scores each year.
The teams continue to show ingenuity and commitment day-to-day, and live our values as revised in 2021: We Respect, We Innovate, We Collaborate, We Trust and We Care. As a Board, we thank them wholeheartedly; their ability to innovate continually whilst delivering the highest levels of customer satisfaction means that our growth pillars are built on very secure foundations.
Strategic priorities for the year ahead
As we move into our final year of our three-year growth plan, we will continue to invest in the business to take advantage of the huge opportunity ahead. Through the launch of our cloud platform in January 2023, we have added a new layer of potential growth, targeting niche areas of the location market where we have identified significant demand and low levels of competition.
We will continue to grow our pipeline and invest in the business and our people to support our expanded customer base. The Group remains focused on increased revenue growth, underpinned by growing annual recurring revenue, increased profitability at adjusted EBITDA level and higher cash generation over the long-term.
Current trading and outlook
This year confirmed that 1Spatial sits right at the heart of numerous changes across multiple sectors. We secured a number of high-profile wins, invested in our technology and sales team, and expanded our customer and partner networks to position the business to serve a range of customers globally.
Looking ahead, we see multiple areas of significant opportunity, particularly in the US and for our new SaaS offerings. Through the launch of our cloud platform we are adding a new layer of potential growth, targeting niche areas of the location market where we have identified significant demand and low levels of competition. We believe these offerings have the potential to be transformational for 1Spatial.
Trading in the new financial year has begun positively. Our growing sales pipeline and increased levels of recurring revenue provide the Board with confidence in the Group's prospects, and we will continue to invest in our sales team and offering to capture what we believe to be a considerable long-term growth opportunity.
Claire Milverton
Chief Executive Officer
CFO review
In FY 2023 the Group continued to build on foundations set in the previous year by delivering double-digit growth in annual revenues, future recurring revenues and adjusted EBITDA. The improvement in the financial performance, notably in operating profit and profit before tax, has resulted in an increase of 112% in cash generated from operations to GBP5.4 million (FY 2022: GBP2.5 million). Increases in these key financial metrics have allowed the Group to continue significant investment into development of its proprietary technology.
Revenue
Group revenue increased by 11% (9% at constant currency) to GBP30.0 million from GBP27.0 million in FY 2022.
Recurring revenue
The business strategy is to grow revenue from repeatable business solutions on long-term contracts by increasing sales of term licences (rather than one-off perpetual licences) and increasing the proportion of recurring revenue compared to services. As a result, excluding the impact of the reduction in perpetual licence revenue, the business achieved a year-on-year growth in total revenue of 15%. Recurring revenue, as a percentage of total revenue, increased to almost 50% (FY 2022: 45%).
Revenue by type is shown below:
Revenue by type
FY 2023 FY 2022
GBPm GBPm % change
Recurring revenue 14.76 12.18 21%
Services 13.52 12.36 9%
Revenue (excluding perpetual
licences) 28.28 24.54 15%
Perpetual licences 1.72 2.49 (31%)
Total revenue 30.00 27.03 11%
Percentage of recurring revenue 49% 45%
Annualised Recurring Revenue
The Annualised Recurring Revenue ('ARR') increased by 17% from GBP13.4 million to GBP15.8 million as at 31 January 2023 with ARR attributable to term licences growing by GBP1.1 million. The growth rate varied by region with the US region growing at 59%, boosted by the several multi-year term licence sales. The overall renewal rate improved to 94% (FY 2022: 93%) providing a strong platform for the current year.
ARR by region
FY 2023 FY 2022
GBPm GBPm % growth
UK/Ireland 6.51 5.93 10%
Europe 5.49 4.79 15%
US 2.22 1.40 59%
Australia 1.56 1.32 18%
-------- -------- ---------
Total ARR 15.78 13.44 17%
-------- -------- ---------
Committed revenue
The level of committed services revenue, which has reduced since the start of the year as services revenue on the major projects we won last year is recognised, nevertheless remains high at approximately GBP10 million and provides strong revenue visibility, underpinning the Group's strong financial footing.
The combination of growing ARR, committed services revenue backlog and a strong pipeline of prospects means that the business is on track to make further progress on its revenue growth plan. With the business focus on developing and selling repeatable software solutions, there is an increased level of revenue visibility, which allows the Board to continue to invest with confidence.
Regional revenue
Regional revenue
% change
FY 2023 FY 2022 (constant
GBPm GBPm % change fx)
UK/Ireland 11.92 9.93 20% 20%
Europe 11.01 10.88 1% 1%
US 4.30 3.72 16% 3%
Australia 2.77 2.50 11% 6%
-------- -------- --------- -----------
Total revenue 30.00 27.03 11% 9%
-------- -------- --------- -----------
Revenue (at constant currency) grew organically in all regions, with overall revenue growth of 11%. The UK/Ireland region had a further year of double-digit growth, with a revenue increase of 20%. In Europe, revenue was impacted by the timing of closing contracts during the year and a slower transition to a recurring term licence model than anticipated. This resulted in modest growth of 1% at constant currency. The US had a strong year with a large increase in sales of term licences, increasing total ARR by 59%. Combined with a lower level of services, the revenue growth in the year in the US was more modest than in previous years at 16%. In Australia, where revenue is primarily derived from third-party software deals, we experienced more competitive pricing pressure, combined with the transition from perpetual to term licences, which resulted in only 6% growth in revenue at constant currency. Going forward, all regions will continue to focus on increasing sales of higher margin owned technology sold as term licences.
Gross profit margin
The gross margin grew by 11% but gross margin % was the same as the prior year at 52%. The Board approved expenditure increases in sales and delivery capacity in order to secure higher value contracts; and increased spending on R&D, which is included within the cost of sales, is expected to yield higher gross margins in future years. Going forward, the management team are also focused on driving improvements to gross margin through revenue growth of higher margin term licences and SaaS solutions.
Adjusted EBITDA
The adjusted EBITDA increased by 19% to GBP5.0 million from GBP4.2 million in the prior year resulting in a higher adjusted EBITDA margin of 16.7% (FY 2022: 15.5%). Cost management remains an important focus and expenses are constantly reviewed to ensure the level is appropriate for the structure of the business during this growth phase.
Strategic, integration and other non-recurring items
Included within strategic, integration and other non-recurring items are costs amounting to GBP0.2 million relating to the change of Chief Financial Officer ('CFO') in December 2022. Costs include all payments due to the outgoing CFO on exit together with professional services fees incurred in onboarding his replacement, drafting of contracts, share options and tax advice.
Operating profit and profit before tax
The Group achieved an operating profit of GBP1.3 million (FY 2022: GBP0.4 million) and profit before tax of GBP1.0 million (FY 2022: GBP0.2 million), representing a further year of significantly improved profitability for the Group compared to the prior year.
Taxation
The net tax credit for the period was GBP14k (FY 2022: GBP0.2 million). The 2022 tax credit is as restated following a prior year adjustment leading to the recognition of a deferred tax asset.
Balance sheet
The Group's net assets increased to GBP17.4 million at 31 January 2023 (2022: GBP15.5 million), mainly due to the overall profit after tax adjusted for currency differences in reserves.
Trade and other receivables increased in the year to GBP14.2 million (FY 2022: GBP12.3 million), mainly due to increased accrued income at year-end and timing of invoicing and payment receipts attributable to the increased level of revenue. Trade and other payables increased in the year to GBP15.8 million (2022: GBP13.3 million) due to timing of payments around year end and increases in the levels of recurring cost around the Group.
Cash flow
Operating cash inflow (before strategic, integration and other non-recurring items) increased significantly to GBP5.4 million (2022: GBP2.8 million ) due to continued focus on improving working capital on larger projects, resulting in a significant improvement in free cash flow in the year. As part of the three-year growth plan, the Group has been investing in expanding the sales and delivery team and investment in product development and this impacted the operating cash flow and free cash flow as shown below.
FY FY 2022
Operating cash flow 2023
GBP'000 GBP'000
-------- --------
Cash generated from operations 5,352 2,497
Add back: Cash flow on strategic, integration
and other non-recurring items 48 294
-------- --------
Cash generated from operations before
strategic, integration and other non-recurring
items 5,400 2,791
-------- --------
FY FY 2022
Free cash flow 2023
GBP'000 GBP'000
-------- --------
Cash generated from operations before
strategic, integration and other non-recurring
items 5,400 2,791
Net interest paid (210) (134)
Net tax received 179 176
Expenditure on product development and
intellectual property capitalised (3,854) (2,449)
Purchase of property, plant and equipment (163) (164)
Lease payments (1,099) (1,088)
-------- --------
Free cash flow before strategic, integration
and other non-recurring items 253 (868)
Cash flow on strategic, integration and
other non-recurring items (48) (294)
-------- --------
Free cash flow 205 (1,162)
-------- --------
Investment in R&D
Development costs capitalised in the year increased to GBP3.9 million (FY 2022 GBP2.4 million) as the business has increased its investment in its technology and business solutions. The key areas where spending increased were on the cloud platform for solutions such as Traffic Management Plan in the UK and NG9-1-1 in the US, and other technology such as 1integrate, 1Data Gateway, 1Telecomms and 1Water. Amortisation of development costs was GBP1.6 million (FY 2022 GBP1.7 million).
Financing
The Group's financial position is supported by long-term bank loans. As the number of higher value sales contracts has increased, the Board decided to put in place a GBP3 million Revolving Credit Facility. The facility, arranged in June 2022, is committed for three years and priced on competitive terms. The facility was undrawn as at 31 January 2023 and 25 April 2023.
At the end of January 2023, the remaining principal balance outstanding on the long-term loans was GBP2.0 million (2022: GBP2.4 million). The amount repayable in FY 2024 is approximately EUR0.7 million (FY 2022: GBP0.6 million). With a gross cash position of GBP5.0 million at 31 January 2023 (FY 2022: GBP5.6 million), a growing adjusted EBITDA and positive operating cash generation, the business is in a healthy financial position, which gives the Board the confidence to continue to invest.
Going forward, the Board and management teams are focused on increasing revenues, in particular recurring revenues, whilst improving the Group's profitability and cash generation.
Alternative Performance Measures
Certain analyses include Alternative Performance Measures ("APMs") which are not defined by generally accepted accounting principles (GAAP) as defined under UK-adopted international accounting standards or other generally accepted accounting principles. We believe this information, along with comparable GAAP measurements, is useful to investors because it provides a basis for measuring our operating performance. Our management and Board of Directors uses these financial measures, along with the most directly comparable GAAP financial measures, in evaluating our operating performance. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with GAAP. Wherever appropriate and practical, we provide reconciliation to relevant GAAP measures.
APMs have been provided for the following reasons:
-- to present users of the financial statements with a clear view of what we consider to be the results of our underlying operations, aiding the understanding of management analysis and enabling consistent comparisons over time
-- to provide additional information to users of the financial statements about our financial performance or financial position
The following APMs appear in this document:
# APM Explanation of APM
1 Recurring revenue (s) Recurring Revenue is the value of
committed recurring contracts for
term licences and support & maintenance
recorded in the year.
---------------------- ----------------------------------------------
2 Annualised recurring Annualised Recurring Revenue ("ARR")
revenue ("ARR") is the annualised value at the year-end
of committed recurring contracts
for term licences and support &
maintenance.
---------------------- ----------------------------------------------
3 Adjusted EBITDA Adjusted EBITDA is a company-specific
measure which is calculated as operating
profit/(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.
---------------------- ----------------------------------------------
4 Operating cashflow Operating cashflow is a company-specific
measure which is calculated as cash
generated from operations excluding
cash flow on strategic, integration
and other non-recurring items.
---------------------- ----------------------------------------------
5 Free cashflow 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. But excludes
lease liabilities.
---------------------- ----------------------------------------------
6 Net cash Net cash is gross cash less bank
borrowings.
---------------------- ----------------------------------------------
Stuart Ritchie
Chief Financial Officer
Consolidated statement of comprehensive income
For the year ended 31 January 2023
2023 2022
(restated)*
Note GBP'000 GBP'000
--------------------------------------- ------- ---------- --------------
Revenue 3 30,002 27,027
Cost of sales (14,504) (13,078)
--------------------------------------- ------- ---------- --------------
Gross profit 15,498 13,949
Administrative expenses (14,244) (13,534)
--------------------------------------- ------- ---------- --------------
1,254 415
Adjusted EBITDA 4,997 4,182
Less: depreciation (253) (198)
Less: depreciation on right of
use asset 11 (1,056) (989)
Less: amortisation and impairment
of intangible assets 6 (2,048) (2,254)
Less: share-based payment charge (192) (326)
Less: strategic, integration
and other non-recurring items 4 (194) -
--------------------------------------- ------- ---------- --------------
Operating profit 1,254 415
Finance income 19 14
Finance costs (229) (209)
--------------------------------------- ------- ---------- --------------
Net finance cost (210) (195)
Profit before tax 1,044 220
Income tax credit 5 14 163
Profit for the year 1,058 383
Profit for the year attributable
to:
Equity shareholders of the Parent 1,058 383
1,058 383
======================================= ======= ========== ==============
Other comprehensive income
Items that may subsequently
be reclassified to profit or
loss:
Actuarial gains arising on defined
benefit pension, net of tax 162 113
Exchange differences arising
on translation of net assets
of foreign operations 415 (246)
Other comprehensive income/(loss)
for the year, net of tax 577 (133)
Total comprehensive gain for
the year 1,635 250
--------------------------------------- ------- ---------- --------------
Total comprehensive gain attributable
to the
equity shareholders of the Parent 1,635 250
2023 2022
(restated)*
Note GBP'000 GBP'000
Earnings per ordinary share
attributable to the owners of
the Parent during the year (expressed
in pence per ordinary share):
Basic earnings per share 15 1.0 0.3
Diluted earnings per share 15 0.9 0.3
* The 2022 Consolidated statement of comprehensive income has
been restated for the recognition of deferred tax.
Registered company number (England): 5429800
Consolidated statement of financial position
As at 31 January 2023
2023 2022
(restated)**
Note GBP'000 GBP'000
---------------------------------------------------------------------------------------------------------------------------------- ------- ---------- ---------------
Assets
Non-current assets
Intangible assets including goodwill 6 17,408 15,003
Property, plant and equipment 302 350
Right of use assets 11 1,609 1,747
Total non-current assets 19,319 17,100
---------------------------------------------------------------------------------------------------------------------------------- ------- ---------- ---------------
Current assets
Trade and other receivables 7 14,151 12,271
Current income tax receivable 35 124
Cash and cash equivalents 8 5,036 5,623
Total current assets 19,222 18,018
---------------------------------------------------------------------------------------------------------------------------------- ------- ---------- ---------------
Total assets 38,541 35,118
---------------------------------------------------------------------------------------------------------------------------------- ------- ---------- ---------------
Liabilities
Current liabilities
Bank borrowings 9 (660) (531)
Trade and other payables 10 (15,797) (13,284)
Lease liabilities 11 (608) (748)
Deferred consideration 12 (28) (340)
Total current liabilities (17,093) (14,903)
---------------------------------------------------------------------------------------------------------------------------------- ------- ---------- ---------------
Non-current liabilities
Bank borrowings 9 (1,322) (1,861)
Lease liabilities 11 (1,077) (976)
Deferred consideration 12 - (27)
Defined benefit pension obligation (1,154) (1,276)
Deferred tax 13 (544) (565)
Total non-current liabilities (4,097) (4,705)
---------------------------------------------------------------------------------------------------------------------------------- ------- ---------- ---------------
Total liabilities (21,190) (19,608)
---------------------------------------------------------------------------------------------------------------------------------- ------- ---------- ---------------
Net assets 17,351 15,510
================================================================================================================================== ======= ========== ===============
Share capital and reserves
Share capital 14 20,155 20,150
Share premium account 14 30,488 30,479
Own shares held 14 (139) (303)
Equity-settled employee benefits reserve 4,122 3,930
Merger reserve 16,465 16,465
Reverse acquisition reserve (11,584) (11,584)
Currency translation reserve 501 86
Accumulated losses (42,180) (43,236)
Purchase of non-controlling interest reserve (477) (477)
---------------------------------------------------------------------------------------------------------------------------------- ------- ---------- ---------------
Total equity 17,351 15,510
================================================================================================================================== ======= ========== ===============
** The 2022 Consolidated statement of financial position has been restated for the recognition of deferred tax.
Consolidated statement of changes in equity
For the year Share Share Own Equity-settled Merger Reverse Currency Purchase of Accumulated Total
ended 31 capital premium shares employee reserve acquisition translation non-controlling losses equity
January 2023 account held benefits reserve reserve interest
GBP'000 reserve reserve
--------------- -------- -------- ------- --------------- -------- ------------ ------------ ---------------- ------------ -------
Balance at 31
January 2021
as previously
reported 20,150 30,479 (303) 3,604 16,465 (11,584) 332 (477) (43,931) 14,735
Prior year
adjustment - - - - - - - - 199 199
Balance at 31
January 2021
as restated 20,150 30,479 (303) 3,604 16,465 (11,584) 332 (477) (43,732) 14,934
--------------- -------- -------- ------- --------------- -------- ------------ ------------ ---------------- ------------ -------
Comprehensive
profit
Profit for the
year - - - - - - - - 383 383
Other
comprehensive
loss
--------------- -------- -------- ------- --------------- -------- ------------ ------------ ---------------- ------------ -------
Actuarial
gains arising
on defined
benefit
pension - - - - - - - - 113 113
Exchange
differences
on
translating
foreign
operations - - - - - - (246) - - (246)
--------------- -------- -------- ------- --------------- -------- ------------ ------------ ---------------- ------------ -------
Total other
comprehensive
(loss)/income - - - - - - (246) - 113 (133)
--------------- -------- -------- ------- --------------- -------- ------------ ------------ ---------------- ------------ -------
Total
comprehensive
income - - - - - - (246) - 496 250
--------------- -------- -------- ------- --------------- -------- ------------ ------------ ---------------- ------------ -------
Transactions
with owners
Recognition of
share-based
payment
expense - - - 326 - - - - - 326
- - - 326 - - - - - 326
--------------- -------- -------- ------- --------------- -------- ------------ ------------ ---------------- ------------ -------
Balance at 31
January 2022
as restated 20,150 30,479 (303) 3,930 16,465 (11,584) 86 (477) (43,236) 15,510
--------------- -------- -------- ------- --------------- -------- ------------ ------------ ---------------- ------------ -------
Comprehensive
profit
Profit for the
year - - - - - - - - 1,058 1,058
Other
comprehensive
income
--------------- -------- -------- ------- --------------- -------- ------------ ------------ ---------------- ------------ -------
Actuarial
gains arising
on defined
benefit
pension - - - - - - - - 162 162
Exchange
differences
on
translating
foreign
operations - - - - - - 415 - - 415
--------------- -------- -------- ------- --------------- -------- ------------ ------------ ---------------- ------------ -------
Total other
comprehensive
income - - - - - - 415 - 162 577
--------------- -------- -------- ------- --------------- -------- ------------ ------------ ---------------- ------------ -------
Total
comprehensive
income - - - - - - 415 - 1,220 1,635
--------------- -------- -------- ------- --------------- -------- ------------ ------------ ---------------- ------------ -------
Transactions
with owners
Recognition of
share-based
payment
expense - - - 192 - - - - - 192
Issue of share
capital 5 9 14
Transfer of
treasury
shares 164 (164) -
--------------- -------- -------- ------- --------------- -------- ------------ ------------ ---------------- ------------ -------
5 9 164 192 - - - - (164) 206
--------------- -------- -------- ------- --------------- -------- ------------ ------------ ---------------- ------------ -------
Balance at 31
January 2023 20,155 30,488 (139) 4,122 16,465 (11,584) 501 (477) (42,180) 17,351
--------------- -------- -------- ------- --------------- -------- ------------ ------------ ---------------- ------------ -------
Consolidated statement of cash flows
For the year ended 31 January 2023
Note 2023 2022
GBP'000 GBP'000
Cash flows from operating activities
Cash generated from operations 8 (a) 5,352 2,497
Interest received 19 12
Interest paid (229) (146)
Tax paid (-) (24)
Tax received 179 200
--------------------------------------- ------
Net cash generated from operating
activities 5,321 2,539
--------------------------------------- ------ --------- ---------
Cash flows from investing activities
Purchase of property, plant and
equipment (163) (164)
Expenditure on development costs
and other intangibles 6 (3,854) (2,449)
Net cash used in investing activities (4,017) (2,613)
--------------------------------------- ------ --------- ---------
Cash flows from financing activities
Proceeds from loans and borrowings 500 -
Repayment of loans and borrowings (1,043) (423)
Repayment of lease obligations 11 (1,099) (1,088)
Payment of deferred consideration
on acquisition 12 (352) -
Net proceeds from share issue 14
Net cash used in financing activities (1,980) (1,511)
--------------------------------------- ------ --------- ---------
Net decrease in cash and cash
equivalents (676) (1,585)
Cash and cash equivalents at start
of year 5,623 7,278
Effects of foreign exchange on
cash and cash equivalents 89 (70)
--------------------------------------- ------ --------- ---------
Cash and cash equivalents at end
of year 8 (b) 5,036 5,623
======================================= ====== ========= =========
Notes to the financial statements
For the year ended 31 January 2023
1. Basis of preparation
The preliminary information of 1Spatial plc has been prepared in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006. 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 2023 and 31 January 2022 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 2023 were approved by the Board of directors on 25 April 2023 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.
2. Going concern
The Board used as its basis for the going concern review the budget for the FY 2024 year, rolled out to 31 July 2024 using part of its forecast for FY 2025, so that a full 12-month period from the date of signing the FY 2023 Annual Report and Accounts is considered. In addition to applying the normal sensitivities to cash flows, the going concern review included a reverse-stress test to demonstrate that even if new business and renewals are severely impacted, the finances of the Group remain robust.
The year ended 31 January 2023 saw a record year for revenues and profits for the Group with a strong performance in all regions. FY 2023 was a year of increased revenue, operating profit, profit before tax as well as double-digit growth in recurring revenue, increased adjusted EBITDA and a significant increase in the operating cash conversion to approximately 106% (FY 2022: 60%). Metrics for future years are positive with Annualised Recurring Revenue ("ARR") increasing to approximately GBP16m (FY 2022: approximately GBP13m) driven primarily by term licence in the US. Additionally, the value of committed service orders going into FY 2024 remains strong at approximately GBP10m. We anticipate that revenue on these orders will be recognised in FY 2024. We entered the current 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 in all regions.
The operating cash flow generated in FY 2023 was positive but was impacted by working capital requirements on larger projects and the Group's decision to continue to invest in growing the business. The Group entered into a Revolving Credit Facility ("RCF") in June 2022 denominated in GBP with a limit of GBP3m and an expiry date of 22 June 2025.
The Group started the current financial year on 1 February 2023 with cash of GBP5.0m and debt of GBP1.9m, giving net funds (before lease liabilities) of GBP3.1m. Including the new RCF facility, the Group's liquidity is approximately GBP6.1m.
The Board has concluded, after reviewing the work 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.
3. 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
2023 2022
GBP'000 GBP'000
Term licences 5,167 2,940
Support and maintenance - own 6,727 7,350
Support and maintenance - third party 2,861 1,890
Recurring revenue 14,755 12,180
Services 13,601 12,357
Perpetual licences - own 393 800
Perpetual licences - third party 1,253 1,690
Total revenue 30,002 27,027
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
2023 2022
GBP'000 GBP'000
UK 10,454 8,903
Europe 12,173 11,583
US 4,325 3,721
Rest of World 3,050 2,820
--------- ---------
Total revenue 30,002 27,027
--------- ---------
The Board assesses the performance of the Group based on adjusted EBITDA. Adjusted EBITDA is a company-specific measure which is calculated as operating profit 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). As these are non-GAAP measures, they should not be considered as replacements for IFRS measures. The Group's definition of these non-GAAP measures may not be comparable to other similarly titled measures reported by other companies.
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.
2023 2022
GBP'000 GBP'000
UK/Ireland 11,921 9,926
At a point in time 2,185 2,257
Over time 9,736 7,669
-------------------- --------- ---------
Europe 11,011 10,875
At a point in time 2,011 1,796
Over time 9,000 9,079
-------------------- --------- ---------
United States 4,303 3,721
At a point in time 2,159 1,286
Over time 2,144 2,435
-------------------- --------- ---------
Australia 2,767 2,505
At a point in time 1,070 1,040
Over time 1,697 1,465
-------------------- --------- ---------
30,002 27,027
==================== ========= =========
As at 31 January 2023, costs to obtain and fulfil a contract of GBP109,000 were included in other receivables (2022: GBP169,000). Amortisation of costs to obtain and fulfil a contract for the year ended 31 January 2023 were GBP75,000 (2022: GBP54,000). The Group has no significant concentration risk with no major customers representing more than 10% of Group revenue (2021: 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.
2023 2022
GBP'000 GBP'000
UK/Ireland 7,790 6,800
Europe 7,869 7,645
United States 3,656 2,650
Rest of World 4 5
Total 19,319 17,100
=============== ========= =========
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:
2023 2022
GBP'000 GBP'000
Amounts paid relating to change of CFO 194 -
Total 194 -
======================================= ========= =========
The cash impact in FY 2023 relating to the strategic, integration and other non-recurring items was GBP48,000 (2022: GBP294,000).
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 left the business and the parties amended the original SPA as explained below.
Under the original terms, the Group agreed to pay the vendors consideration, which included EUR1,166,999 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, EUR726,459 was satisfied immediately upon Completion, with the balance of EUR440,540 originally 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 entered into an Amendment Agreement with 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, EUR408,701 of the Deferred Share Consideration Amount.
The balance of consideration EUR31,839 was issued in shares on 31 March 2023.
5. Income tax credit
2023 2022
(restated)
GBP'000 GBP'000
Current tax
UK corporation tax on income for year (57) (172)
Foreign tax 79 40
Adjustments in respect of prior years (15) (19)
--------------------------------------------------- ---------- -------------
Total current tax credit 7 (151)
--------------------------------------------------- ---------- -------------
Deferred tax
Origination and reversal in temporary differences (58) (83)
Effect of tax rate change on opening balance 38 71
Adjustments in respect of prior years (1) -
Total deferred tax (21) (12)
--------------------------------------------------- ---------- -------------
Total tax credit (14) (163)
--------------------------------------------------- ---------- -------------
Factors affecting the tax credit for the year:
The differences between the standard rate of corporation tax in the UK and the actual tax credit are explained below:
2023 2022
(restated)
GBP'000 GBP'000
Profit on ordinary activities before tax 1,044 220
--------------------------------------------------- ---------- -------------
Profit/(loss) on ordinary activities before tax
multiplied by the effective rate of corporation
tax in the UK of 19% (2022: 19%) 198 42
Effect of:
Expenses not deductible for tax purposes 96 55
Adjustment in respect of R&D tax credits (312) (238)
Effect of movement in deferred tax rate 38 71
Utilisation of losses not previously recognised
for tax purposes (66) (348)
Deferred tax not recognised on losses carried
forward 110 212
Adjustments in respect of prior years (15) (19)
Differences in tax rates applicable to overseas
subsidiaries (47) 37
Other differences (16) 25
Total tax credit for the year (14) (163)
--------------------------------------------------- ---------- -------------
The relevant deferred tax balances have been measured at 25% for the current year-end, being the tax rate enacted by the reporting date (2022: 25%).
6. Intangible assets including goodwill
Goodwill Brands Customers Software Development Intellectual Total
and costs property
related
contracts
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 1 February
2022 17,194 450 4,547 6,574 21,228 72 50,065
Additions - - - 39 3,815 - 3,854
Effect of foreign
exchange 478 12 191 186 554 - 1,421
-------------------
At 31 January
2023 17,672 462 4,738 6,799 25,597 72 55,340
------------------- --------- --------- ----------- --------- ------------ ------------- ---------
Accumulated
impairment and
amortisation
At 1 February
2022 11,330 291 3,640 4,958 14,826 17 35,062
Amortisation - 22 149 227 1,644 6 2,048
Effect of foreign
exchange 187 5 144 109 377 - 822
At 31 January
2023 11,517 318 3,933 5,294 16,847 23 37,932
------------------- --------- --------- ----------- --------- ------------ ------------- ---------
Net book amount
at
31 January 2023 6,155 144 805 1,505 8,750 49 17,408
=================== ========= ========= =========== ========= ============ ============= =========
Net book amount
at
31 January 2022 5,864 159 907 1,616 6,402 55 15,003
=================== ========= ========= =========== ========= ============ ============= =========
The net book amount of development costs includes GBP8,750,000 (2022: GBP6,402,000) internally generated capitalised software development costs that meet the definition of an intangible asset. The amortisation charge of GBP2,048,000 (2022: GBP2,254,000) is included in the administrative expenses in the statement of comprehensive income.
The key assumptions used in the value in use calculation were the pre-tax discount rate applied (14% (FY 2022: 13%)), revenue growth rates of 9.5% per annum and cost growth rates of 7% per annum for the five-year period from 1 February 2023 to the year ending 31 January 2028. The Board approved budget for the year ending 31 January 2024 was used as the basis for the Group's value in use calculation. Results for the next four years were calculated using the above assumptions to derive the Group's value in use. No impairment is required as no individual asset has a higher carrying value than its value in use.
Goodwill Brands Customers Software Development Intellectual Total
and costs property
related
contracts
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 1 February
2021 17,447 464 4,764 6,757 19,285 72 48,789
Additions - - - 26 2,423 - 2,449
Written-off - - - - - - (30)
Effect of foreign
exchange (253) (14) (217) (209) (480) - (1,173)
At 31 January
2022 17,194 450 4,547 6,574 21,228 72 50,065
-------------------
Accumulated
impairment and
amortisation
------------------- --------- --------- ----------- --------- ------------ ------------- ---------
At 1 February
2021 11,548 252 3,641 4,696 13,454 11 33,602
Amortisation - 42 153 360 1,693 6 2,254
Written-off - - - - - - -
Effect of foreign
exchange (218) (3) (154) (98) (321) - (794)
At 31 January
2022 11,330 291 3,640 4,958 14,826 17 35,062
------------------- --------- --------- ----------- --------- ------------ ------------- ---------
Net book amount
at
31 January 2022 5,864 159 907 1,616 6,402 55 15,003
=================== ========= ========= =========== ========= ============ ============= =========
Impairment tests for goodwill
Goodwill is assessed for the Group as a whole as the Group operates with one segment and one CGU as the Group manages its operations under one global strategy. 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.
2023 2022
Total Total
Goodwill GBP'000 GBP'000
Opening carrying value 5,864 5,899
Effect of foreign
exchange 291 (35)
Closing carrying value 6,155 5,864
========= =========
Basis for calculation of recoverable amount
The Group has prepared a five-year plan for its CGU (based on a formally approved 1-year plan extended for four 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 (14%) and the growth assumptions. Growth in sales and corresponding costs for the five-year period has been forecast at 9.5% and 7% per annum respectively and the EBITDA to cash conversion is assumed to be 60% or greater.
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 2024 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 reflects 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 14% for each year of the five-year period ending 31 January 2028 for the headroom to be removed.
7. Trade and other receivables
2023 2022
Current GBP'000 GBP'000
Trade receivables 4,992 4,895
Less: provision for impairment of trade receivables (29) (25)
----------------------------------------------------- --------- ---------
4,963 4,870
Other receivables 2,044 1,413
Prepayments and accrued income 7,144 5,988
14,151 12,271
----------------------------------------------------- --------- ---------
Below is a reconciliation of the movement in accrued income:
2023 2022
GBP'000 GBP'000
At 1 February 2022 5,075 2,950
Accrued revenue invoiced in the
year (5,075) (2,950)
Revenue accrued in the year 5,947 5,188
Foreign exchange difference 57 (113)
At 31 January 2023 6,004 5,075
--------------------------------- --------- ---------
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 2023, trade receivables of GBP3,698,000 (2022: GBP3,650,000) 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, interest rates and inflation rates as the key macroeconomic factors in the countries in which the Group operates.
At 31 January 2023, trade receivables of GBP1,269,000 (2022: GBP1,220,000) 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.
The ageing of these receivables is as follows:
2023 Weighted Impairment
GBP'000 average loss
loss allowance
rate GBP'000
Current 3,698 0.1% 4
Up to 3 months overdue 1,029 0.5% 5
3 to 6 months overdue 98 2.0% 2
6 to 12 months overdue 10 5.0% 1
> 12 months overdue 157 10.0% 17
------------------------
4,992 29
------------------------ --------- --------- -----------
2022 Weighted Impairment
GBP'000 average loss
loss rate allowance
GBP'000
Current 3,653 0.1% 3
Up to 3 months overdue 853 0.5% 4
3 to 6 months overdue 242 2.0% 5
6 to 12 months overdue 36 5.0% 2
> 12 months 111 10.0% 11
4,895 25
------------------------ --------- ----------- -----------
As of 31 January 2023, trade receivables of GBP29,000 were impaired (2022: GBP25,000) 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:
2023 2022
GBP'000 GBP'000
At 1 February 25 80
Increase/(decrease) in provision 4 (55)
At 31 January 29 25
---------------------------------- --------- ---------
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.
8. Cash and cash equivalents and notes to the consolidated statement of cash flows
2023 2022
GBP'000 GBP'000
Cash at bank and in hand 5,036 5,623
5,036 5,623
-------------------------- --------- ---------
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
(a) Cash generated from operations
Note 2023 2022
GBP'000 GBP'000
-------------------------------------------- ------ --------- ---------
Profit before tax 1,044 220
Adjustments for:
Finance income (19) (14)
Finance cost 229 209
Depreciation 1,309 1,187
Amortisation of acquired intangibles 386 561
Amortisation and impairment of development
costs 1,662 1,693
Share-based payment charge 192 326
Net foreign exchange movement - 1
Increase in trade and other receivables (1,426) (1,784)
Increase in trade and other payables 1,963 206
Increase/(decrease) in defined benefit
pension obligation 12 (108)
Cash generated from operations 5,352 2,497
==================================================== ========= =========
2023 2022
GBP'000 GBP'000
------------------------------------------------- --------- ---------
Cash generated from operations before
strategic, integration and other non-recurring
items 5,400 2,791
Cash flow on strategic, integration
and other non-recurring items (note
4) (48) (294)
Cash generated from operations 5,352 2,497
================================================== ========= =========
(b) Reconciliation of net cash flow to movement in net funds
2023 2022
GBP'000 GBP'000
------------------------------------------- --------- ---------
(Decrease) in cash in the year (676) (1,585)
Changes resulting from cash flows (676) (1,585)
Net cash outflow in respect of borrowings
repaid 543 423
Effect of foreign exchange (44) 127
Change in net funds (177) (1,035)
Net funds at beginning of year 3,231 4,266
------------------------------------------- --------- ---------
Net funds at end of year 3,054 3,231
=========================================== ========= =========
Analysis of net funds
Cash and cash equivalents classified as:
Current assets 5,036 5,623
Bank loans (1,982) (2,392)
------------------------------------------- --------- ---------
Net funds at end of year 3,054 3,231
=========================================== ========= =========
Net funds is defined as cash and cash equivalents net of bank
loans (and excluding lease liabilities).
c) Reconciliation of movement in liabilities from financing activities
Bank borrowings Bank borrowings
and leases and leases
due within due after 1
1 year year Total
GBP'000 GBP'000 GBP'000
Total debt (including lease
liabilities) as at 1 February
2022 1,279 2,837 4,116
Borrowings at 1 February 2022 531 1,861 2,392
Repayment of borrowings (543) - (543)
Foreign exchange difference 12 121 133
---------------- --------------- -------
Borrowings before transfer - 1,982 1,982
Transfer from due after 1 year
to due within 1 year 660 (660) -
---------------- --------------- -------
Borrowings as at 31 January
2023 660 1,322 1,982
---------------- --------------- -------
Lease liability at 1 February
2022 748 976 1,724
Cash movements:
Lease payments (1,099) - (1,099)
Non-cash movements:
Additions in the year 779 - 779
Interest cost 88 - 88
Reclassifications (516) 709 193
---------------- --------------- -------
Lease liability before transfer - 1,685 1,685
Transfer from due after one year
to due within one year 608 (608) -
Lease liability as at 31 January
2023 608 1,077 1,685
---------------- --------------- -------
Total debt (including lease
liabilities) as at 31 January
2023 1,268 2,399 3,667
---------------- --------------- -------
9. Bank borrowings
2023 2022
GBP'000 GBP'000
Current bank borrowings 660 531
Non-current bank borrowings 1,322 1,861
1,982 2,392
----------------------------- --------- ---------
Bank borrowings
Bank borrowings relate to bank loans in 1Spatial France totalling EUR2.25m (2022: EUR2.87m). Bank loan interest is charged on a fixed rate basis with interest rates ranging between 0% and 3.6%, included the related guarantee costs.
The loans are due for repayment over the period to FY 2028, with a broadly even repayment pattern with approximately EUR0.7m (GBP0.6m) due for repayment in FY 2024. New borrowings in the year amounted to nil (2022: nil). There are no financial covenants attached to the loans, nor is there any security applied. All long-term loans are denominated in EUR.
Revolving credit facility
There are covenants associated with the Revolving Credit Facility ("RCF") in relation to the maximum gearing of the Group. The RCF is denominated in GBP, the facility limit is GBP3m with an expiry date of 22 June 2025. The interest rate for any drawn amounts is 2.95% per annum over the Bank of England Sterling Overnight Index Average ("SONIA"). There is a commitment fee of 1.15% per annum of any undrawn part of the Facility. This facility was undrawn as at 31 January 2023.
10. Trade and other payables
Current
2023 2022
GBP'000 GBP'000
Trade payables 2,861 2,227
Other taxation and social security 3,653 2,924
Other payables 506 534
Accrued liabilities 1,229 1,987
Deferred income 7,548 5,612
15,797 13,284
------------------------------------ --------- ---------
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:
2023 2022
GBP'000 GBP'000
At 1 February 5,612 5,870
Revenue recognised in the year (5,612) (5,870)
Revenue deferred at year end 7,460 5,636
Foreign exchange difference 88 (24)
At 31 January 7,548 5,612
-------------------------------- --------- ---------
11. Leases
Total
Right of use assets GBP'000
At 1 February 2022 1,747
Additions 893
Depreciation (1,056)
Foreign exchange difference 26
At 31 January 2023 1,609
----------------------------- ---------
2023 2022
GBP'000 GBP'000
Buildings 1,490 1,522
Cars 82 185
Others 37 40
1,609 1,747
----------- --------- ---------
Total
Lease liabilities GBP'000
At 1 February 2022 1,724
Additions 779
Interest cost 88
Cash paid (1,099)
Other adjustments 163
Foreign exchange difference 30
At 31 January 2023 1,685
----------------------------- ----------
2023 2022
GBP'000 GBP'000
Current 608 748
Non-current 1,077 976
1,685 1,724
------------- --------- ---------
Amounts recognised in profit or loss:
2023 2022
Depreciation charge of right of use assets GBP'000 GBP'000
Buildings 955 866
Cars 88 96
Others 13 27
1,056 989
-------------------------------------------- --------- ---------
12. Business combinations
On 7 May 2019, the Company entered into share purchase agreements to acquire the entire issued share capital of Geomap-Imagis Participations ("Geomap-Imagis") for a total consideration of EUR7.0m (the "Consideration"). Full details of the acquisition were provided in the Annual Report for the year ended 31 January 2020. As disclosed in note 4, there were some minor changes to the terms of the Share Purchase agreement. The remaining balance payable at 31 January 2022 of EUR440,540 (equivalent to GBP380,000) was satisfied mainly in cash (GBP352,000) in September 2022, with the balance settled by an issue of 57,685 ordinary shares of GBP0.10 on 31 March 2023. These shares had a market value of EUR31,839 (GBP28,000) at the date of issue. There are no further elements of deferred consideration due to the former shareholders of Geomap-Imagis Participations ("Geomap-Imagis").
13. 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.
Other
Accelerated temporary
Tax losses tax depreciation Intangibles differences Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 31 January
2021 as previously
reported (562) - 1,355 (17) 776
Prior year adjustment (199) - - - (199)
------------------------------ ----------- ------------------ ------------ ------------- ---------
At 31 January
2021 as restated (761) - 1,355 (17) 577
Deferred tax (credit)/charge
for year in profit
or loss - restated (189) - 188 (11) (12)
DT credit OCI - - - (25) (25)
Foreign exchange
difference - - - 25 25
At 31 January
2022 (950) - 1,543 (28) 565
Deferred tax (credit)
/ charge for year
in profit or loss (77) - 76 (20) (21)
DT charge OCI - - - 54 54
Foreign exchange
difference - - - (54) (54)
------------------------------ ----------- ------------------ ------------ ------------- ---------
At 31 January
2023 (1,027) - 1,619 (48) 544
------------------------------ ----------- ------------------ ------------ ------------- ---------
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 GBP3,243,000 (2022: GBP4,027,000) in respect of losses amounting to GBP13,133,300 (2022: GBP16,044,500) that can be carried forward against future taxable income, on the grounds that at the balance sheet date their utilisation is not considered probable. Losses have no expiry date.
The deferred tax balance is analysed as follows:
Deferred Deferred Total
tax tax liability GBP'000
asset GBP'000
GBP'000
Recoverable within 12 months - 235 235
Recoverable after 12 months - 1,384 1,384
Settled within 12 months (48) - (48)
Settled after 12 months (1,027) - (1,027)
------------------------------ --------- --------------- ---------
(1,075) 1,619 544
------------------------------ --------- --------------- ---------
14. Share capital, share premium account and own shares held
2023 2022
Allotted and fully paid Number Number
Ordinary shares of 10p each 110,859,545 110,805,795
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 GBP1,000,000 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 110,859,545 (2022: 110,805,795) ordinary shares
of 10p in issue, of which a total of 147,084 (2022: 319,635)
ordinary shares are held in treasury. Therefore, the total number
of ordinary shares with voting rights is 110,712,461* (2022:
110,486,160).
* In addition, deferred consideration shares with an approximate
value of EUR0.03 million (EUR0.4m at 31 January 2021) which were
issued on 31(st) March 2023, in relation to the Geomap-Imagis
acquisition.
Number Allotted, Share Own shares
of shares called premium held
up and account GBP'000
fully GBP'000
paid shares
GBP'000
At 31 January 2022 337,505,673 20,150 30,479 (303)
----------------------------- ------------ ------------- --------- -----------
Issue of new shares 53,750 5 9 -
----------------------------- ------------ ------------- --------- -----------
Transfer of treasury shares - - 164
----------------------------- ------------ ------------- --------- -----------
At 31 January 2023 337,559,423 20,155 30,488 (139)
----------------------------- ------------ ------------- --------- -----------
On the 24th January 2023, 53,750 new ordinary shares of 10p each were issued for consideration of GBP14,244 in settlement of share options exercised.
Own shares
The Group has 147,084 (FY 2022: 319,635) ordinary shares of 10p each and 3,500,000 deferred shares with a nominal value of 4p each held in treasury. The original consideration paid was GBP0.3m. During the year 172,551 shares were transferred out of treasury to satisfy employee share awards.
15. Earnings per ordinary share
Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the year.
2023 2022
(restated)
GBP'000 GBP'000
Profit attributable to equity shareholders
of the Parent 1,058 383
2023 2022
Number Number
000s 000s
Ordinary shares with voting rights 110,712 110,486
Deferred consideration payable in shares 55 58
--------------------------------------------- --------- -------------
Basic weighted average number of ordinary
shares 110,807 110,544
--------------------------------------------- --------- -------------
Impact of share options/LTIPS 2,845 4,008
--------------------------------------------- --------- -------------
Diluted weighted average number of ordinary
shares 113,652 114,552
--------------------------------------------- --------- -------------
2023 2022
(restated)
Pence Pence
Basic earnings/ per share 1.0 0.3
Diluted earnings/ per share 0.9 0.3
16. Prior year adjustment
The Group has a deferred tax liability in relation to temporary differences on intangibles assets in 1Spatial Group Limited. This deferred tax liability is partially offset by the recognition of a deferred tax asset in 1Spatial Group Limited.
In preparation of the consolidated financial statements for the year ended 31 January 2023, an error was noted in that a deferred tax asset in 1Spatial plc should have been recognised on consolidation to offset this deferred tax liability, as required by IAS12, Income taxes. This is because the taxable temporary differences associated with the intangible assets relates to the same tax authority (UK) as the 1Spatial plc deferred tax asset, and as such the asset meets the criteria for recognition. In addition, the offset criteria of IAS 12 are also met and therefore the deferred tax amounts are presented net in the consolidated statement of financial position.
The error has been corrected by restating each of the affected financial statement line items as follows:
Consolidated statement of financial position
A third consolidated statement of financial position has not been presented as the impact as of 1 February 2021 was not deemed to be material.
2021 Adjustment 2021
GBP'000 GBP'000 Restated
GBP'000
Non-current liabilities: Deferred tax 776 (199) 577
--------- ----------- ----------
Accumulated losses 43,931 (199) 43,732
--------- ----------- ----------
Net assets / Total equity 14,735 199 14,934
--------- ----------- ----------
2022 Adjustment 2022
GBP'000 GBP'000 Restated
GBP'000
Non-current liabilities: Deferred tax 970 (405) 565
--------- ----------- ----------
Accumulated losses 43,641 (405) 43,236
--------- ----------- ----------
Net assets / Total equity 15,105 405 15,510
--------- ----------- ----------
Consolidated statement of comprehensive income
2022 Adjustment 2022
GBP'000 GBP'000 Restated
GBP'000
Income tax charge / (credit) 43 (206) (163)
--------- ----------- ----------
Profit for the year 177 206 383
--------- ----------- ----------
Refer to note 13, Deferred tax, for the adjusted disclosure of deferred tax.
Earnings per share and diluted earnings per share adjusted disclosure is included in note 15.
17. 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.
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