DELIVERING
CONFIDENCE IN
DATA
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FOR A SAFER,
SMARTER
AND MORE
SUSTAINABLE
WORLD
2023
Annual Report
& Accounts
Contents
1Spatial plc Annual Report & Accounts 2023
DISCOVER
WHAT'S INSIDE
OVERVIEW
02 At a Glance
04 Investment Case
06 Highlights
08 Our Purpose
10 Our People
INVESTMENT
CASE
FINANCIAL
HIGHLIGHTS
04
06
STRATEGIC
REPORT
12 Chairman’s Statement
14 Market Overview
18 Our Business Model
20 The 1Spatial Platform
22 CEO’s Review
28 Strategic Framework
36 CFO’s Review
40
Environmental, Social
and Governance
52 Principal Risks and Uncertainties
56 Section 172 Statement
CHAIRMAN’S
STATEMENT
12
CEO’S
REVIEW
22
CFO’S REPORT
ESG REPORT
36
40
Overview
Strategic Report
Corporate Governance
Financial Statements
01
OUR 2023
REPORT
GOVERNANCE
58 Board of Directors
60 Corporate Governance Report
62 Audit Committee Report
64 Directors’ Remuneration Report
68 Directors’ Report
70 Directors’ Responsibilities Statement
OUR PURPOSE
08
OUR PEOPLE
10
FINANCIAL
STATEMENTS
71
77
Independent Auditor’s Report
Consolidated Statement
of Comprehensive Income
Consolidated Statement
of Financial Position
Consolidated Statement
of Changes in Equity
78
79
81
80
114
Consolidated Statement
of Cash Flows
Notes to the Financial
Statements
Company Statement
of Financial Position
Company Statement
of Changes in Equity
Notes to the Company
Financial Statements
123 Company Information
115
116
02
At a Glance
1Spatial plc Annual Report & Accounts 2023
DELIVERING
CONFIDENCE
1Spatial is a global leader
in Location Master Data
Management (‘LMDM’).
Accurate and reliable location data provides
significant opportunities for businesses and
governments to deliver against important
sustainability and Net Zero goals, improve
operational efficiencies and contribute to a
better society for all.
1Spatial is a leader in delivering Location Master Data Management
(‘LMDM’) software and solutions. We help solve our customers’ data
challenges by building strong data foundations and delivering innovative
solutions for confident and informed decision-making, with location
data as a key enabler. Our user-friendly, no-code, cloud-enabled solutions
and business applications facilitate automated data governance while
delivering increased efficiencies and significant cost-savings –
contributing to a safer, smarter and more sustainable world.
Our global clients include national mapping and land management
agencies, utility companies, transportation organisations, government,
public safety and defence departments.
Our Vision
To be the world’s most trusted provider of Location Master Data
Management (‘LMDM’).
Our Mission
Our mission is to develop automated solutions and applications
that instil confidence in data. We do this with our 1Spatial platform –
automatically auditing, validating, cleansing, synchronising, updating
and analysing data at speed and at scale – delivering reliable data
and developing innovative solutions that help our customers make
better-informed decisions.
347Employees worldwide
OUR PARTNERS
OVER 1,000 CUSTOMERS
Overview
Strategic Report
Corporate Governance
Financial Statements
03
IN DATA
7Operational countries 25Locations of our key customers
United Kingdom
United States
France
Belgium
Republic of Ireland
Tunisia
Australia
Australia
Belgium
Canada
Denmark
France
Germany
Gibraltar
India
Ireland
Indonesia
Italy
Luxembourg
Monaco
Morocco
Netherlands
New Zealand
Norway
Philippines
Republic of Ireland
Singapore
South Africa
Spain
Tunisia
United Kingdom
USA
Industries
CORE INDUSTRY SECTORS
GOVERNMENT &
PUBLIC SAFETY
Helping governments manage, share and
use data to accelerate delivery of
economic, social and environmental
benefits, enabling better decisions and
greater insights.
UTILITIES
Providing utility organisations with
confidence in their data as they
increasingly transform into digital
organisations with machine learning,
digital twins and preventative action
being common practice.
TRANSPORTATION
& INFRASTRUCTURE
Enabling organisations to effectively manage
complex supply chains, deliver a dependable
service and excellent customer experience,
while reducing carbon emissions and
environmental impacts for the industry.
04
Investment Case
1Spatial plc Annual Report & Accounts 2023
REASONS
TO INVEST
Growing market opportunities
• 1Spatial sits right at the heart of significant growth
opportunities across multiple sectors, enabling a smarter,
safer and more sustainable world. We work together with
government, utility and transport sectors around the world
to meet the green agenda, support the investment in
infrastructure upgrades and help organisations implement
strategies in response to the digital transformation taking
place across all industries.
• We collaborate with global partners on large-scale data
transformation projects and tap into a broader network
of prospective clients. We harness innovation through
collaborative partnerships to create technology that
solves emerging industry needs.
• The Geospatial Information Systems Market is currently
worth US$10 billion, which is estimated to more than
double by 2027 to US$21 billion, and secondly, the
mainstream Master Data Management market, which
is worth US$16.6 billion but estimated to triple by 2030
to US$54 billion.
• The US market is a significant growth opportunity for
the Group, particularly with our Next Generation 9-1-1
(‘NG9-1-1’) solution where there is a potential US$100
million market opportunity.
• The traffic management market is a significant growth
opportunity for the Group with its Traffic Management
Plan Automation (‘TMPA’) solution for the production of
automated traffic management plans where there is a
potential £250 million market opportunity for low-speed
roads in the UK.
Pioneering technology and long-standing
location data expertise
• We are pioneers in the auditing, validation, cleansing,
synchronising, updating and analysing of location data, and our
technology is recognised as being of a world-class standard.
• Our market-leading technology powers some of the world’s
largest location data implementations, such as the US Census
Bureau, the UK National Underground Asset Register (‘NUAR’)
and HS2, also in the UK.
• We understand the complexity of location data formats and
sources, the rules that need to be applied to validate data and
how to resolve issues that arise from complex data integration
and transformation projects.
• Our domain expertise has been honed over 30 years, which
presents a high barrier to entry.
• Our patented technology enables us to validate, map and
integrate data from multiple sources, systems and formats at
speed and at scale, without requiring the data to be centralised
beforehand. Our technology can be used to process both
spatial and non-spatial data.
“ Our focus on growing recurring
subscription term licences, our SaaS
strategy and other recurring revenue
from long-term contracts will
continue to deliver revenue growth
with improved gross margins.”
Valuable
customer base
Scalable
business model
• We have a customer base of over 1,000
• We are transitioning to a SaaS
organisations, providing a strong
foundation for growth, as we seek
to expand these relationships and
generate additional opportunities.
• While this is already an extensive
delivery and business model, with
a growing proportion of recurring
software revenue.
• We have built an elastic, multi-tenant
cloud platform to support increased
Strengthening
financial position
• We are delivering growing revenues
with our global offering and clients in
25 countries.
• Our focus on growing recurring
subscription term licences, our SaaS
strategy and other recurring revenue
customer base, we believe, as leaders
market penetration and scalable growth.
from long-term contracts will continue
in location data validation and
management, we are at an early stage
of our growth journey.
• Our commitment to service excellence
• We have a substantial opportunity in the
USA – our IP currently underpins key
population communication platforms
including in California, New York and
to deliver revenue growth with
improved gross margins.
• We have a positive adjusted EBITDA
and profit-before-tax position and
means we benefit from high levels of
Arkansas – our solutions are applicable
our operations generate cash.
customer retention.
for the towns and cities across 50 states.
• Our balance sheet is strong with a net
• We forge strong relationships with an
cash position.
expanding list of partners, providing
additional sales and marketing reach.
Overview
Strategic Report
Corporate Governance
Financial Statements
05
IN
1SPATIAL
Growing market opportunities
Pioneering technology and long-standing
location data expertise
• 1Spatial sits right at the heart of significant growth
• We are pioneers in the auditing, validation, cleansing,
opportunities across multiple sectors, enabling a smarter,
synchronising, updating and analysing of location data, and our
safer and more sustainable world. We work together with
technology is recognised as being of a world-class standard.
• Our market-leading technology powers some of the world’s
largest location data implementations, such as the US Census
Bureau, the UK National Underground Asset Register (‘NUAR’)
and HS2, also in the UK.
• We understand the complexity of location data formats and
sources, the rules that need to be applied to validate data and
how to resolve issues that arise from complex data integration
and transformation projects.
• Our domain expertise has been honed over 30 years, which
presents a high barrier to entry.
• Our patented technology enables us to validate, map and
integrate data from multiple sources, systems and formats at
speed and at scale, without requiring the data to be centralised
beforehand. Our technology can be used to process both
spatial and non-spatial data.
government, utility and transport sectors around the world
to meet the green agenda, support the investment in
infrastructure upgrades and help organisations implement
strategies in response to the digital transformation taking
place across all industries.
• We collaborate with global partners on large-scale data
transformation projects and tap into a broader network
of prospective clients. We harness innovation through
collaborative partnerships to create technology that
solves emerging industry needs.
• The Geospatial Information Systems Market is currently
worth US$10 billion, which is estimated to more than
double by 2027 to US$21 billion, and secondly, the
mainstream Master Data Management market, which
is worth US$16.6 billion but estimated to triple by 2030
to US$54 billion.
• The US market is a significant growth opportunity for
the Group, particularly with our Next Generation 9-1-1
(‘NG9-1-1’) solution where there is a potential US$100
million market opportunity.
• The traffic management market is a significant growth
opportunity for the Group with its Traffic Management
Plan Automation (‘TMPA’) solution for the production of
automated traffic management plans where there is a
potential £250 million market opportunity for low-speed
roads in the UK.
Valuable
customer base
• We have a customer base of over 1,000
Scalable
business model
• We are transitioning to a SaaS
organisations, providing a strong
foundation for growth, as we seek
to expand these relationships and
generate additional opportunities.
• While this is already an extensive
customer base, we believe, as leaders
in location data validation and
management, we are at an early stage
of our growth journey.
• Our commitment to service excellence
means we benefit from high levels of
customer retention.
delivery and business model, with
a growing proportion of recurring
software revenue.
• We have built an elastic, multi-tenant
cloud platform to support increased
market penetration and scalable growth.
• We have a substantial opportunity in the
USA – our IP currently underpins key
population communication platforms
including in California, New York and
Arkansas – our solutions are applicable
for the towns and cities across 50 states.
• We forge strong relationships with an
expanding list of partners, providing
additional sales and marketing reach.
Strengthening
financial position
• We are delivering growing revenues
with our global offering and clients in
25 countries.
• Our focus on growing recurring
subscription term licences, our SaaS
strategy and other recurring revenue
from long-term contracts will continue
to deliver revenue growth with
improved gross margins.
• We have a positive adjusted EBITDA
and profit-before-tax position and
our operations generate cash.
• Our balance sheet is strong with a net
cash position.
“ We have a substantial opportunity in the USA – our
IP currently underpins key population communication
platforms including in California, New York and
Arkansas – our solutions are applicable for the towns
and cities across 50 states.”
06
2023 Highlights
1Spatial plc Annual Report & Accounts 2023
FINANCIAL
AND
Group revenue
£30.0m
2022: £27.0m
11%
Group total ARR*
£15.8m
2022: £13.4m
18%
Recurring revenue*
£14.8m
2022: £12.2m
21%
Term licences ARR*
£5.6m
2022: £4.1m
37%
Term licences revenue*
£5.2m
2022: £2.9m
79%
Group gross profit
£15.5m
2022: £13.9m
12%
Adjusted EBITDA*
Adjusted EBITDA margin (%)*
Operating profit
£5.0m
2022: £4.2m
19%
16.7%
2022: 15.5%
1.2pp
Profit before tax
Earnings per share – basic/diluted
£1.0m
2022: £0.2m
400%
£1.0m / £.0.9m
2022: £0.3m (basic and diluted restated)
233%/200%
£1.3m
2022: £0.4m
225%
Net cash*
£3.1m
2022: £3.2m
3%
Overview
Strategic Report
Corporate Governance
Financial Statements
07
OPERATIONAL
HIGHLIGHTS
Highlights
Operational highlights
Outlook
Group revenue increased from
£27.0 million in FY 2022 to
£30.0 million in FY 2023
representing year-on-year growth
of 11% and resulting in an annual
increase of 12% in gross profit.
Operating profit grew to
approximately £1.3 million from
£0.4 million in the previous year
with profit before tax up to
£1.0 million from £0.2 million
against the same period last year.
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.
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.
Trading in the current financial
year has started positively and,
while cognisant of inflationary
cost pressures, the Board remains
confident in delivering results for
FY 2024, in line with expectations.
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® list
backed by Best Practice Institute
(‘BPI’) research and analysis.
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.
Continuing to invest in sales team
and offering to capture the
opportunity.
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.
* Alternative Performance Measures (‘APMs’)
The Group uses certain Alternative Performance Measures to enable the users of the Group’s financial statements to understand and evaluate the
performance of the Group consistently over different reporting periods. APMs are non-GAAP company specific measures. As these are non-GAAP
measures, they should not be considered as a replacements for IFRS measures. The Group’s definition of non-GAAP measures may not be comparable
to other similarly titled measures reported by other companies. A description of the measures set out above is included below with a reconciliation to
the closest GAAP measure included in note 2 to the consolidated financial statements.
APM
Explanation of APM
Recurring revenue (s) Recurring Revenue is the value of committed recurring contracts for term licences and support & maintenance recorded in the year.
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.
08
Our Purpose
1Spatial plc Annual Report & Accounts 2023
UNLOCKING
THE VALUE OF
Our Purpose
Our purpose is to help customers make confident and informed decisions
by unlocking the value of location data for a safer, smarter and more
sustainable world. We help our customers make critical location-based
decisions in many different ways.
Safer
With our technology, we help to
accurately locate underground
pipes, eliminating the incidence of
utility strikes, thereby contributing
to the prevention of injuries and
delivering substantial cost-savings
every year.
Our solutions help emergency
centres in the USA correctly locate
and route emergency services calls,
helping to improve response times,
alleviate the impact of disasters and
contribute to life-saving emergency
rescue operations.
Refer to the section on work we’ve
done in the USA for NG9-1-1 on
page 32.
Smarter
Local and national governments
use our technology to make
informed, evidence-based decisions
when setting regulations, collecting
taxes and providing public services,
contributing to significant savings
in public spending.
See how we’ve helped the Rural
Payments Agency improve their
decision-making by automating
their location data management
on page 30.
More sustainable
As organisations work towards
achieving their Net Zero goals, we
create data platforms for modelling
green decisions and reducing
carbon emissions.
See how we’re helping
organisations meet their Net Zero
goals by reading our partner
section on page 34.
Overview
Strategic Report
Corporate Governance
Financial Statements
09
LOCATION
DATA
Our Stakeholders
Delivering value
to all shareholders
Supporting the
environment, our
people and all
stakeholders is
fundamental to
what drives us
as a business.
Planet
We are committed to embedding
sustainability at the core of our
business. Not only do we support
the United Nation’s Sustainable
Development Goals through the
work we do for our clients, but
through our own ESG strategy and
sustainability initiatives. Our ESG
strategy and framework which,
combined with our purpose, will
guide our decision-making about
the assets we deploy and the
outputs we produce.
Customers
We work closely with our
customers to identify and
understand their business issues.
Increasingly, customers cite
sustainability, health and safety,
and infrastructure investment as
key drivers. Helping them make
data-enabled decisions drives
development of innovative
solutions and applications, which
in turn drives our business growth.
People
Our dedicated, committed and
passionate team is the cornerstone
of our success. Our culture is
open, supportive, inclusive and
encouraging. Guided by our
purpose and underpinned by our
values (We Respect, We Innovate,
We Collaborate, We Trust and
We Care), we believe in the
concept of 1Team to achieve
sustainable outcomes.
Suppliers
& Partners
We strongly value the business
relationships with our suppliers
and partners and the opportunities
created by working together.
Through partnerships we learn,
share best practice and set future
goals so that we can bring our
software and solutions to new
geographic regions and industries
and provide additional scale to our
capabilities. Our commitment to
ESG means we are taking steps to
embed sustainable practices across
our supply chain.
Shareholders
We believe that our purpose is
material to the performance of
our business and aim to generate
increasing value for our investors
while managing within the risk,
governance and compliance
frameworks that guide us. We aim
to engage openly, consistently
and transparently with our
shareholders through formal AGMs,
results announcements and
presentations, investor roadshows
and conferences and updates on
our website.
10
Our People
1Spatial plc Annual Report & Accounts 2023
PEOPLE – THE
LIFEBLOOD
Jessica Sims
HEAD OF GLOBAL
PEOPLE
“ Our approach to our people
continues to focus on wellbeing,
inclusion and employee experience.
By upholding our values we have
built an employee culture based on
respect, trust, caring, collaboration
and innovation. We are continuing to
ensure fulfilment of roles, through
meaningful work, recognition,
communication, and meeting
individual development needs.”
Our people are the lifeblood of 1Spatial.
We aim to hire, nurture and develop
the best, most diverse teams to help
our clients solve their most important
problems and deliver sustained outcomes.
The work we do lends a sense of purpose to our
employees, and as a Company, we are passionate
about corporate citizenship and making our
world better.
Promoting engagement
We believe in supporting employees through a
positive, flexible and inclusive working environment
built on a foundation of mutual trust and respect.
One of the highlights of 2022 was our inclusion in
Newsweek’s Top 100 Most Loved Workplace®
organisations in the UK, backed by Best Practice
Institute (‘BPI’) research and analysis. 1Spatial was
selected because of our commitment to putting
people at the heart of our business, the trust being
placed in employees to make decisions and execute
work, the accessibility of our leadership team,
employee work/life balance and our focus on
employee wellbeing.
Overview
Strategic Report
Corporate Governance
Financial Statements
11
OF
1SPATIAL
Key findings from our
employee engagement
survey:
82.3%
are happy with their line
manager relationship;
74.2%
consider at least one
colleague a friend;
84.2%
feel respected and trusted by
their line manager and peers;
70.0%
agree that they are regularly
updated with relevant
1Spatial news.
Wellbeing
Employee wellbeing is important to us,
and we provide mental health awareness
training, mental health first aiders (in the
UK) and regular social events to help
employees take time out from their
working day. In keeping with current
employee expectations, 1Spatial supports
flexible working across all countries.
Culture, diversity and inclusion
Our team ethos is not only demonstrated
by our ongoing commitment to equality
and diversity but is also reflected in our
open office space which encourages
conversation, cooperation and
collaboration between colleagues at
every level in every department.
Our people are passionate about making
a difference in the world, volunteering
their time, energy and skills in support of
good causes. We recognise these
contributions as part of our ESG strategy.
Attracting and retaining talent
Our ability to recruit and retain key staff
is critical to delivering our strategy.
Crafting suitable employee benefits and
retention programmes is vital to talent
management. We continue to review
employee needs and develop benefits to
meet those needs wherever possible,
including supporting flexible working, and
other benefits such as extended holidays
and enhanced pension contributions.
We are driven by our five core values
Skills development
All employees have a personal
development allowance to help them
shape their own learning. We are
undertaking a process to ensure all
employees have a formal Learning
and Development plan to identify
training needs and build employee
skills. We also offer professional
qualifications through apprenticeship
programmes and cross-departmental
training and movement.
WE
INNOVATE
WE
COLLABORATE
WE
TRUST
WE
CARE
WE
RESPECT
STRATEGIC
REPORT
12
Chairman’s Statement
1Spatial plc Annual Report & Accounts 2023
CONFIDENT IN OUR
PERFORMANCE
WITH ANOTHER
“ 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.”
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.
Overview
Strategic Report
Corporate Governance
Financial Statements
13
11%
Group revenues
increased by 11% to
£30.0m (FY22: £27.0m)
19%
Adjusted EBITDA
increased by 19%
to £5.0m (FY22: £4.2m)
YEAR OF
SOLID GROWTH
Summary and outlook
This year 1Spatial has become a more
robust business with an increasing ability
to capture the growing 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’).
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.
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.
Our ESG report is included on page 40.
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.
Andy Roberts
NON-EXECUTIVE CHAIRMAN
25 April 2023
14
Market Overview
1Spatial plc Annual Report & Accounts 2023
A
TRANSFORMATIVE
Location data is helping to improve responses to the great
challenges we now face such as climate change, while also
enhancing the planning and delivery of more immediate projects
related to infrastructure, construction, housing, transport, retail,
the environment, and emergency response services.
Our
market
Supporting digital
transformation goals
Data is a critical
enabler for growth
Several major trends are driving
geospatial industry growth, including
the acceleration of digitalisation, the
integration of geospatial and new
technologies (such as 3D, machine
learning and Artificial Intelligence),
the need to meet Net Zero goals, the
increasing trend to develop smart cities
and digital twins, and infrastructure
stimulus investment plans.
The International Data Corporation’s
Customer Insights and Analysis Group
indicates that worldwide digital
transformation technology investments
will total more than US $7.4 trillion
in 2023, of which quality data is a
critical enabler.3
1Spatial operates at the intersection
of two growing global markets: the
geospatial market – often referred to
as the GIS (or Geographic Information
Systems) market – and master data
management (a technology discipline
that ensures the uniformity, accuracy and
accountability of shared data assets).
The global geographic information
system (GIS) market size reached
US$ 10.1 billion in 2021. Looking forward,
the IMARC Group expects the market to
reach US$ 21.1 billion by 2027, exhibiting
at a CAGR of 13.1% during 2022–2027.1
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 15.8% during the forecast period.2
We believe this intersection is a unique
position in the market and refer to it as
Location Master Data Management (‘LMDM’).
Sustainability goals, and the move to
a data-driven economy, continue to
drive unprecedented growth in both the
quantity of location data and the need
for applications to derive value from it.
80% of all data collected now has a
location component to it (according to a
survey by ESRI, a global specialist in GIS,
location intelligence and mapping software).
In fact, a recent global survey run by local
intelligence company Carto (a leading
location intelligence platform) found that
94% of large businesses collect and/or
store location data.
This growing business need means
that location data is becoming more
“mainstream” as enterprise and
government organisations place an
increasing emphasis on its importance. The
variety of formats and repositories of this
data, however, mean that much is currently
unusable – fuelling the growth of solutions
that will unlock the power of these datasets.
Overview
Strategic Report
Corporate Governance
Financial Statements
15
GROWTH
OPPORTUNITY
The 1Spatial Platform incorporates a
complete set of Location Master Data
Management (LMDM) software
components that can be used to enable
customers to unlock the value within all
their data (spatial and non-spatial) to
achieve their objectives. The importance
of location-based solutions and the
resilience of the data that underpins
these solutions have become imperative
for organisations to provide the required
services to their customers or citizens.
1
2
3
https://www.imarcgroup.com/
geographic-information-system-market
Polaris market research
(https://www.polarismarketresearch.com/
industry-analysis/master-data-management-
market)
https://www.helpnetsecurity.com/
2019/10/30/dx-technology-investments
16
Market Overview continued
1Spatial plc Annual Report & Accounts 2023
A TRANSFORMATIVE
GROWTH OPPORTUNITY
CONTINUED
Our applications
Next Generation 9-1-1
(‘NG9-1-1’)
We estimate that the addressable market
for our NG9-1-1 application can be broken
down into two tiers:
1.
2.
US States – with 50 states we
estimate that the addressable
market for our enterprise version
is approximately US$7.5 million of
Annual Recurring Revenue (ARR).
US Counties and Cities – our
SaaS-based validation application
enables cities and counties to
validate their location data prior
to submission to the state. With
23,000 cities and counties, the
addressable market is estimated
at US$100 million+.
Traffic Management Planning
Automation (‘TMPA’)
The addressable market for our Traffic
Management Planning Automation
SaaS-based application for low-speed
roads in the United Kingdom is estimated
at £250 million.
Our expertise
The forecast growth of the GIS
(‘Geographic Information Systems’)
market is attracting more software
providers into the market; however,
we believe very few have the comparable
experience and expertise in location data
and the breadth of knowledge of the
sector. This makes 1Spatial a significant
and important part of the global
geospatial ecosystem. This growth of the
market provides opportunities for us to
partner with organisations that have
applications or customers, but not the
necessary location data management
skills, products or solutions, creating a
barrier to entry. Moreover, our close
relationship with Esri Inc., the global
market leader in GIS database software,
gives us additional credibility, while
enhancing our market reach and visibility.
We focus on three industries where
accuracy of location and geospatial data
are critical: Government, Utilities and
Transport. This focus spans across four
geographic markets: the UK and Ireland,
USA, Europe, and Australia.
At the heart of multiple
themes: accurate,
shareable location data
There is a growing awareness across
multiple industries that location data is
a vital element in the delivery of more
efficient, faster and safer services. With
location data increasingly being used
as the main point of reference when
connecting multiple systems, there is
a need for that data to be accurate
and shareable.
Sustainability drivers
In the past, our offerings have
traditionally been used to address
customer needs such as increased
efficiencies or cost savings, but
increasingly these drivers are now around
sustainability, health and/or safety and
infrastructure investment. Our rules
engine, 1Integrate and its companion web
portal 1Data Gateway are consistently
being recognised as powerful tools to
ensure good quality data.
The macro environment
Despite the current macro environment,
digital transformation and government
investment initiatives continue to drive
a substantial need for data management
tools, particularly those capable of
managing complex location data. At the
macro level, we believe themes such as
the 17 United Nations (UN) Sustainable
Development Goals (SDGs), a universal
call for action to end poverty, hunger
and protect the planet, and specific
government initiatives, such as President
Biden’s investment in infrastructure
development and climate change projects
will continue to be long-term drivers of
the need for accurate, location-based,
shareable data.
Overview
Strategic Report
Corporate Governance
Financial Statements
17
Key Industry Drivers
MACRO THEMES
ESG and sustainable
development goals
• 169 targets to measure
• Mapping and location data play
a significant role
• A need for improved data quality
driven by the United Nations
TARGET MARKETS
Government
Investment Initiatives
• US$2 Trillion infrastructure
investment – USA
• £600 billion investment –
“Build Back Better” and the
“Levelling Up Agenda” – UK
• €806 billion Next Generation
EU – European Commission
• US$500 million funding for
Next Generation 9-1-1 projects
Digital
Economy
• Drive for digital representation
of assets (digital twins)
• Greater need to share data
across organisations and the
public sector
• Increasing demand for cloud
first and SaaS-enabled solutions
Government
Utilities
Transport
MARKET DRIVERS
Sustainability
(drive to Net Zero)
Infrastructure
Investment
Health & Safety
18
Our Business Model
1Spatial plc Annual Report & Accounts 2023
Our business
model is built on
core strategies
driving improved
performance and
creating innovative
new products.
ENABLING
CRITICAL
Strategic
Pillar
Innovation
Be innovative in how we
develop and use our core
products and technology
How we prioritise our
business activities
Resources and
relationships we rely upon
Business
• Financial performance
• Investor growth
• Customer needs
Business
• Financial capital
• Industry expertise
• Customers
• Partners
Read more about innovation
in practice on page 30
Read more about our
performance on page 22
Customer Relationships
Be approachable through
customer-guided innovation
and market research
ESG
• People
• Planet
• Product
• Practices
ESG
• Our people, customers,
partners and suppliers
• Shareholders
• Governing institutions
Read more about customer
relationships in practice
on page 32
Read more about ESG
on page 40
Read more about ESG
on page 40
Smart Partnerships
Be smart in how we
work with our partners
Technology
• Innovation
• SaaS-enablement
Technology
• 1Spatial Platform
Read more about smart
partnerships in practice
on page 34
Read more about the 1Spatial
Platform on page 20
Read more about the 1Spatial
Platform on page 20
Overview
Strategic Report
Corporate Governance
Financial Statements
19
DECISION-
MAKING
Our
Output
Our
revenue sources
Our
differentiators
Location Master
Data Management (‘LMDM’)
As location data specialists, we help
our customers improve and automate
their location data management
processes, delivering significant cost
and time savings, and crucially, data
that can be trusted.
Products
Our 1Spatial Platform consists of
a complete set of LMDM software
components, which combine servers,
portals, dashboards, SDKs (software
development kits), APIs (application
programming interface), data
connectors, applications, our patented
1Integrate rules engine and our 1Data
Gateway self-service web portal.
Applications and solutions
Our applications and solutions
dramatically reduce the time and cost
required to create and maintain smarter
data, automating costly, error-prone
and time-consuming manual processes
to enable informed decisions.
Licencing
Consulting services
Maintenance and
support contracts
Read more about Location Master
Data Management, our 1Spatial
Platform and our solutions and
applications on page 20
Read more about
our revenue streams
on page 22
Speed and scale
Our technology can process data at speed and at
scale, unlike many of our competitors, powering
some of the largest spatial data sets in the world,
including US Census Bureau and Ordnance Survey.
Data and system agnostic
Technology lock-in is not necessary because we do
not require the data to be centralised beforehand.
Spatial and non-spatial data
Although our technology has been developed
to work with location data, it can process both
spatial (including 3D data) and non-spatial data,
which sets us apart from traditional master data
management providers.
No-code rules engine
The no-code interface means no programming is
required and there is no wait time for developers
to make the changes required by the data team.
Configuration
Our off-the-shelf technology can be rapidly
configured against business rules for any scenario
or standard and deployed in a relatively short
space of time, reducing the time to delivery, risk
and upfront investment.
Automation
With automation, data governance becomes
a repeatable process, enforcing data quality
throughout the whole data management cycle,
saving customers time and costs in continual
data maintenance.
20
The 1Spatial Platform
1Spatial plc Annual Report & Accounts 2023
THE 1SPATIAL
PLATFORM
Automated data governance and
Location Master Data Management
The 1Spatial Platform is a complete set of Location Master
Data Management (‘LMDM’) software components, which
combines servers, portals, dashboards, SDKs, APIs, data
connectors, business-focused applications, our patented
1Integrate rules engine and our web-based data upload
portal, 1Data Gateway.
BUSINESS APPLICATIONS
1Water
1Telecoms
1Water is a business application for
water network management. This
global solution has been built on top
of the Esri platform and works with
the new Esri Utility Network Model.
We have used this solution to
successfully migrate our existing
French customers in the water sector
to the Esri platform and intend to
market this solution globally. We have
already secured ten utility clients in
France since its launch late in 2021.
1Telecoms is a business application for
fibre optic and telecommunications
networks, built on the Esri platform.
It is aimed at operators, engineering
and construction firms and local
authorities, enabling them to optimise
processes around the construction,
deployment, operation and
maintenance of telecommunications
assets. It also helps them accurately
locate their indoor and outdoor
telecommunications infrastructure
while improving inventory
management and maintenance.
A central geospatial
data ecosystem
The 1Spatial Platform is an integrated
data system – an ecosystem where
data can be shared – either across the
business or with other organisations.
Often, this data may already exist
elsewhere (internally or externally),
but the organisation has not had the
means to access this data. With our
technology, our customers can
access this untapped source of data
– saving them significant amounts of
time and money.
Since data (and specifically location
data) is often collected and stored in
silos, in different standards and
formats and of differing levels of data
quality, it needs to be audited and
assessed against specific standards or
criteria (‘business rules’) before it can
be trusted. To rely on this shared data,
there needs to be a mechanism to
validate its accuracy.
Overview
Strategic Report
Corporate Governance
Financial Statements
1Water
arcOpole PRO 1Telecomms
1SPATIAL BUSINESS APPS
9-1-1
HPMS
Term / VaaS
1Streetworks
/TMPA
SaaS
1SPATIAL BUSINESS APPS
A N A LY S E
VALIDATE
UPDATE
SYNCHRONISE
C L E A N S E
Data standards
and rules
Data standards and
rules are configured
against which
the data needs
to conform to.
DATA
S0URCES
3D
NON-SPATIAL
DATA
SOURCES
CAD
GEOCOBIE
SPATIAL
SYSTEMS
CUSTOMERS
9-1-1
SPATIAL
NON-SPATIAL
21
Customers can analyse
the data and use it
for decision-making.
Data is audited and
validated against
standards and rules.
Errors/non-conformances
are flagged for manual
correction, or by applying
automatic corrections.
The data is synchronised
across the data ecosystem.
Any changes to the data
will be continually checked
and updated.
Data is ingested into
the platform from
various formats,
systems and sources.
Next Generation 9-1-1
(‘NG9-1-1’)
Our Next Generation 9-1-1 Solution
ensures that emergency services are
using validated and integrated location
data and that any issues with the data
are rectified as quickly as possible.
The automated process saves time and
resources, providing a single source of
truth for multiple emergency services
departments. By having a complete
dataset, the emergency service
departments will be able to react to
incidents faster, and make decisions
confidently, based on quality data.
We are making significant headway
in the US with this application, and
to date, we have secured contracts
with eight federal states.
US Highways Performance
Management System
(‘HPMS’)
1Streetworks/Traffic
Management Planning
Automation
HPMS was developed in collaboration
with the US Federal Highway
Administration. The application
automates the process of validating
and preparing the highway/roads data
for submittal to the Federal Highway
Agency, which was formerly a very
arduous process. HPMS data
submission is critical to each of the
50 states in the US, as it determines
the Federal Highway funds to be
allocated to each state each year.
This repeatable solution for state
Departments of Transportation
provides recurring annual term licence
and services contracts. Customers
already include the Federal Highway
Administration, and the Departments
of Transport for Massachusetts, West
Virginia and Pennsylvania.
1Streetworks is a business unit that
has developed our Traffic Management
Planning Automation application,
enabling the automatic generation of
statutory traffic management plans
around essential roadworks.
Maintenance, repairs and excavations
on roads to access utility pipelines and
cables is often unavoidable and, in the
UK, there are approximately 2.5 million
works on low-speed roads each year.
Each one must be planned, and a
significant amount of time is required
for the creation of an approved, compliant
traffic management plan. We believe
the market opportunity for the
application to be significant and trials
have now commenced with several
organisations across the UK. Initial
feedback from these trials is positive.
22
CEO’s Review
1Spatial plc Annual Report & Accounts 2023
CONFIDENT IN OUR
PERFORMANCE,
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.
“ 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.”
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 £5 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$10.1billion
in 2021. Looking forward, the IMARC
Group expects the market to reach
US$21.1 billion by 2027, exhibiting at
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 NG9-1-1 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.
Overview
Strategic Report
Corporate Governance
Financial Statements
23
PEOPLE,
PRODUCTS
AND
PLATFORM
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 ARR (‘Annual
Recurring Revenue’) 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.
Revenue by region
UK/Ireland
Europe
US
Australia
40%
37%
14%
9%
Claire Milverton
CHIEF EXECUTIVE OFFICER
24
CEO’s Review continued
1Spatial plc Annual Report & Accounts 2023
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 underlying 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 the
production of traffic management plans
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.
Overview
Strategic Report
Corporate Governance
Financial Statements
25
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
1Telecoms 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.
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.
*
Source: Retently B2B sample of 10,000 B2B organisations.
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 (£0.9m
over two years with the potential for
expansion for a further two years).
• Major multi-year contract with a
leading European aerospace agency –
for software licences, including
1Telecoms and 1Integrate, for the
implementation and subsequent annual
recurring software and managed
services. The total value of the contract
over five years is approximately
€3 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.
26
CEO’s Review continued
1Spatial plc Annual Report & Accounts 2023
• 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.
• 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
These new clients provide secure
long-term levels of ARR and excellent
references and opportunities to increase
revenues within these accounts.
Partnerships have played a critical role
in enabling us to secure new customers
in the year, demonstrating the credibility
of these businesses.
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 –
£1.2 million over five years.
• Another contract win with Defra and
RPA to support its field collection
system – £0.5 million (£0.4 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 – €0.3 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.
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®
Overview
Strategic Report
Corporate Governance
Financial Statements
27
list backed by Best Practice Institute
(‘BPI’) research and analysis. This was
based on our scores on their Love of
Workplace Index™, 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-level
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
25 April 2023
28
Strategic Framework
1Spatial plc Annual Report & Accounts 2023
Building a highly scalable
business based on our
three strategic pillars
We have now completed two years of
our three-year strategy, having made
strong progress across all three pillars.
We are proud of our world-class,
dedicated, passionate and driven team
of people who embody our brand
values. Their ability to continually
innovate while delivering the highest
levels of customer satisfaction means
that our strategic growth pillars are
built on secure foundations.
OUR
STRATEGY
INNOVATION
Be innovative in how we develop and use our core
products and technology
Objectives
• Data management solutions: We will enhance our core 1Integrate rules
engine, using new technologies to improve our competitive positioning.
• Business applications: We will develop and bring to market powerful business
applications developed to meet our customer needs, focusing on the sectors in
which we have extensive expertise and proven competitive advantage.
• Cloud platform: We will deliver our business applications quickly and
efficiently. We will develop a scalable, multi-tenant cloud platform, which
provides customers access to configured versions of our business applications.
Progress
• 1Integrate continues to evolve; we have added more powerful capabilities and
enabled it to handle even more types of data and API access.
• 1Integrate can now validate data schemas (the structure of the data) as well as
the data content, and we made it easier to define powerful schema
transformations for data migration and ETL (extracting, transforming and
loading of data) projects.
• 1Integrate’s user interface is brand new, modernised following iterative usability
testing to provide an improved user experience and increased productivity.
• The modern design is future-proofed for further enhancements, ready for
release by Q2 2023.
• We added further enhancements to 1Data Gateway, including many security and
enterprise integration capabilities, as well as containerised deployments.
• Our 1Streetworks Automated Traffic Management Planning Automation is
already being trialled by several customers.
• We continue to evolve and roll out validation applications to support NG9-1-1
and Highways Performance Management System projects.
• Our Mobile capabilities – which enable the rules engine to be run on mobile
devices – became more powerful with an improved user experience and went
live with new customers.
• Our cloud capabilities continue to evolve for the global business and global
marketplace, with streamlined deployments and advanced logging and analytics
for our SaaS products and solutions.
Read more about our 1Spatial
platform on page 20
Overview
Strategic Report
Corporate Governance
Financial Statements
29
FOR
GROWTH
CUSTOMER
RELATIONSHIPS
SMART
PARTNERSHIPS
Be approachable through customer-guided
innovation and market research
Be smart in how we work with our partners
Objectives
Objectives
• Develop solutions to address problems: We will leverage
our customer relationships to identify business problems
and develop business applications to solve them.
• Major tech and GIS Partners: We will partner with major
technology consultancies and GIS providers in complex
customer programmes.
• First to market: We will be first to market with innovative
• Software Partners: We will collaborate with software
solutions for wide-ranging business problems in our
target markets.
platform providers such as Esri to enhance their offerings
through the development of pre-built business applications.
• Land and expand: We will use our sector-specific business
• Complementary domain expertise Partners: We will
applications to secure new customers and expand our
engagements through the cross-sell of additional solutions,
1Integrate and business applications.
partner with other organisations to enter adjacent industry
verticals, where our location data expertise can
complement their domain expertise.
Progress
Progress
• The success of our customer focus, combined with ongoing
transition to term licencing, can be seen in the 18% growth
in Annual Recurring Revenue (‘ARR’) driven both by new
customer wins and expansion of existing customer accounts.
• New contract wins in five US states for various solutions,
including our Next Generation 9-1-1 application, supporting
our expansion strategy and growth in the USA.
• A key new contract win with HS2 (High Speed Rail), Europe’s
largest infrastructure project.
• A new major multi-year contract win with a leading
European aerospace agency.
• An expansion contract with the state of California over
four years.
• Two expansion contracts with the Department of
Environment, Food and Rural Affairs (‘Defra’).
• An expansion managed service for a major utility
organisation in France.
• A renewal of services for Google Real Estate and Workplace
Services in the USA.
• A contract win with Highlander Tek in the USA.
• We’ve been selected as preferred providers on several
frameworks, including the UK Home Office Strategic
Delivery Partner Framework with CGI, and Atos’ Horizons
programme for SME partners.
• We have forged stronger relationships with leading
technology consultancies including Infosys, Rizing,
Enzen and PA Consulting.
• We continue to strengthen and expand our relationships
with key players in the geospatial sector such as Esri,
Hexagon, Ordnance Survey and Safe Software, as well
as forging closer ties with our existing partners Atkins,
Version1 and QinetiQ.
• We are actively collaborating with partners on several
major projects, such as Atkins and Ordnance Survey on
the National Underground Asset Register (‘NUAR’), the
state of California with Rizing (now part of Wipro), and
with Version1 on Land and Property Services in
Northern Ireland.
Read more about our contract wins
in our CEO’s Report on page 22
Read more about our
partnerships on page 34
30
Strategic Framework – Innovation in Practice
1Spatial plc Annual Report & Accounts 2023
DRIVING
INNOVATION
The Rural Payments Agency (‘RPA’) makes
payments of over £2 billion per year to farmers,
traders and land owners, to support farmers’
incomes and rural development.
Case study
Rural Payments Agency,
United Kingdom
Many farmers rely on these payments,
therefore prompt, accurate payments
are essential.
Data for the Rural Payment service is
managed by the Land Management
System (‘LMS’), holding geospatial
master data that includes 2.5 million land
parcels and 3.4 million land cover records
required to manage farm payments. It is
supported by a team of land digitisers
who convert farmers’ paper submissions
into geospatial data and manage any
subsequent changes, updates or
corrections. The LMS enables the
verification of changes using remotely
sensed geospatial data (such as aerial
photography) and farm inspections.
Supporting digital and data
driven decision-making
The Rural Payments Agency – and its
sponsor, the Department for
Environment, Food & Rural Affairs
(‘Defra’) – have an aim of becoming more
digital and data-driven; using data to
support faster, more accurate decisions.
To achieve this, the LMS data must be
kept accurate and current.
1Spatial, in partnership with partners
Version 1, was awarded the contract to
support the management of geospatial
data infrastructures to the LMS, and with
Location Master Data Management.
“1Spatial’s involvement has
helped us meet our performance
targets and move towards our
goal of becoming an increasingly
digital and data-driven
organisation.”
Brian O’Toole,
Geospatial Lead, Rural Payments Agency
Brian O’Toole
GEOSPATIAL LEAD
RURAL PAYMENTS
AGENCY
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Financial Statements
31
FOR A
SUSTAINABLE
FUTURE
“ From the beginning, 1Spatial has impressed with
its partnership approach, its engineering rigour
and its geospatial expertise.”
Brian O’Toole – Geospatial Lead, Rural Payments Agency
Faster updates
Prior to 1Spatial getting involved, the
validation of geospatial data updates was a
major constraint on the system. Updates
submitted by inspectors or from aerial
photography needed validation by land
digitisers. At the start of the contract, there
was a backlog of hundreds of updates that
required checking.
As a result, a substantially increased
proportion of data submissions was being
checked and validated automatically,
reducing the number requiring expert,
manual intervention significantly. RPA’s team
of land digitisers could then focus their
expertise on the remaining, more difficult
exceptions.
Using our experience of similar situations and
with the support of our 1Integrate software,
the 1Spatial team reviewed and updated the
pre-existing automated data validation rules.
Several improvements made automatic
validation of data much more efficient.
The project resulted in a more accurate,
up-to-date geospatial dataset, enabling
better decision-making, while improved
access to the updated geospatial dataset
through services ensures a consistent
approach to the digitising and editing of data.
32
Strategic Framework – Customer Relations
1Spatial plc Annual Report & Accounts 2023
FORGING
STRONG
Case study
Sheila Steffenson
CEO
1SPATIAL INC. USA
We have built solid and lasting relationships
with customers across eight states in the USA,
to help them respond to Next Generation 9-1-1
(‘NG9-1-1’), a US Government-led initiative that
involves a transition to using geospatial data
for faster and more accurate 9-1-1 call routing.
Next Generation 9-1-1, USA
NG9-1-1 will enable first responders to
receive essential location information
from 9-1-1 calls, as well as improving the
management of call overload in situations
such as natural disasters. Transitioning to
NG9-1-1 will improve 9-1-1 call handling
and response times to dispatch life-
saving resources to those in need.
State-wide data validation and
integration are critical factors
for success
State entities, cities, counties, and public
safety answering points (‘PSAPs’) need
to conform with specific standards to
provide data to a private network that
enables emergency services and
data communications.
However, there are significant state-wide
variations in data standards and a lack
of coordination between jurisdictions.
The process of identifying errors in their
data is often a manual one, resulting in a
significant investment in time and costs.
Some entities have found that an
automated solution can take years to
be developed and deployed.
“We absolutely recommend 1Spatial. Not
just because of the functionality they’re
providing us in terms of scalability and
customisation, but also because of the
culture of the organisation. The people
that become part of your team are great
to work with. They are curious, problem
solvers, they have great senses of
humour, and those are our favourite sorts
of people to work with.”
Natalie Lee – Geospatial Data Programs
Manager, State of Georgia
Overview
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Corporate Governance
Financial Statements
33
CUSTOMER
RELATIONS
“ At 1Spatial, we consider our customers as partners and our main
priority. We are constantly looking for ways to enhance our offerings
to better support them. We continually explore new opportunities
where our rules can be enhanced and/or used in other use cases
within our client or partner organisations, thereby creating additional
value that extends further across the entity – and beyond NG9-1-1.”
Sheila Steffenson – CEO, 1Spatial Inc. USA
Automated data validation
1Spatial’s offering includes a configurable
enterprise solution for state entities, as
well as a more affordable, pre-configured
Software-as-a-Service (SaaS) solution for
cities and counties.
Trusted by eight US states
To date, we have delivered our configurable
software and solutions to eight states:
Arizona, Arkansas, California, Georgia,
Michigan, Minnesota, Montana and
New Jersey.
Dedicated to solving our
customers’ problems
1Spatial’s Public Safety NG9-1-1 solution
combines its powerful rules engine
1Integrate with its 1Data Gateway self-
service cloud platform to support these
public safety entities in their data-
readiness needs. Working closely with our
customers, pre-configured rules have been
aligned to relevant standards and state-
specific requirements which identify exactly
where the data requires adjustment,
enabling users to immediately and
accurately pinpoint problems and errors
that can then be rectified quickly.
The completeness and
accuracy of data is essential
in an NG9-1-1 project
With the automated data validation process,
the data is guaranteed to be accepted,
reducing unnecessary reworks and providing
assurance that calls are routed to the correct
PSAP, thereby ensuring that the right
emergency services teams are dispatched
as quickly as possible.
34
Strategic Framework – Partnerships in Practice
1Spatial plc Annual Report & Accounts 2023
COLLABORATING
Our partners are leaders in their fields that
share 1Spatial’s ethos of making the world
safer, smarter and more sustainable.
Case study
In the past year, we’ve taken significant
strides in expanding and forging new
partner relationships since appointing
our dedicated partner manager, Warren
Gilmour, in April 2021. Through our
delivery partners, we’ve been selected
as preferred providers for location data
management projects on several
frameworks, including the UK Home
Office Strategic Delivery Partner
Framework with CGI, and Atos’s Horizons
programme for SME partners. We have
also forged stronger relationships with
Infosys, Enzen, Version 1, QinetiQ and
PA Consulting.
Moreover, we continue to focus on
expanding our relationships with key
players in the geospatial sector such
as Esri, Hexagon and Safe Software.
“By harnessing technology to enable data
sharing, we’re able to transform how we
deliver projects and infrastructure by
unlocking improvements in safety,
certainty and efficiency. Working with
1Spatial and the Ordnance Survey to
develop the National Underground Asset
Register is a truly exciting and
transformative project for the
infrastructure sector.”
Guy Ledger, Digital Director, Atkins
“At Version 1, we consider 1Spatial to
be an excellent strategic partner. Our
businesses collaborate to deliver
excellence to our customers; marrying
our complementary competencies to
create value-add propositions.
Furthermore, our core values are closely
aligned and demonstrated in our work
together. Our partnership with 1Spatial is
central not only to our work with our
customers such as RPA, Defra and LPS
but also to Version 1’s broader growth
strategy across the UK and Ireland’s
public sectors.”
James Mayo, Senior Account Manager,
Version 1
Warren Gilmour
GLOBAL PARTNER
MANAGER
1SPATIAL
Overview
Strategic Report
Corporate Governance
Financial Statements
35
FOR
GROWTH
“ We continuously strive to deliver the very best solutions for our
customers. Building and maintaining close relationships with partners
means we bring additional value to our customers in areas where
highly specialist domain knowledge and capabilities are key success
factors. Harnessing these relationships, combined this with the power
of our 1Spatial platform, means we can reach a growing platform of
new customers and markets, and achieve a greater impact at scale.”
Warren Gilmour, Global Partner Manager, 1Spatial
National Underground Asset
Register Project (‘NUAR’)
Client: Geospatial Commission
Partner: Atkins
1Spatial was appointed by engineering
consultancy firm Atkins to support its data
transformation and ingestion requirements
for the NUAR project. The project is being
led by the UK Geospatial Commission,
supported by Atkins and UK mapping
agency Ordnance Survey. NUAR will
improve the efficiency and safety of
underground works by creating a digital
map of underground pipes and cables of
England and Wales. The project, when
complete, will revolutionise the way the UK
installs, maintains, and repairs its buried
infrastructure. The UK does not currently
have a single platform that allows
consistent access to data related to
underground assets. More than 650 asset
owners are required to share their data via
1Spatial’s online portal 1Data Gateway, while
1Integrate transforms the data from their
source representation to a target NUAR
data model. 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.
36
CFO’s Review
1Spatial plc Annual Report & Accounts 2023
DELIVERING
DOUBLE-DIGIT
GROWTH IN
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.
“Group revenue increased by
11% (9% at constant currency) to
£30.0m from £27.0m in FY 2022.”
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 £5.4 million (FY 2022:
£2.5 million). Increases in these key
financial metrics have allowed the Group
to continue significant investment into
development of its proprietary technology.
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.
Revenue
Group revenue increased by 11%
(9% at constant currency) to
£30.0 million from £27.0 million
in FY 2022.
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:
ARR
The Annualised Recurring Revenue
(‘ARR’) increased by 17% from
£13.4 million to £15.8 million as at
31 January 2023 with ARR attributable
to term licences growing by £1.1 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.
Revenue by type
Recurring revenue
Services
Revenue (excluding perpetual licences)
Perpetual licences
Total revenue
Percentage of recurring revenue
FY 2023
£m
FY 2022
£m
%
change
14.76
13.52
28.28
1.72
30.00
49%
12.18
12.36
24.54
2.49
27.03
45%
21%
9%
15%
(31%)
11%
Overview
Strategic Report
Corporate Governance
Financial Statements
37
Profit before tax
400%
2023
2022
£0.2m
£1.0m
Group Recurring Revenue
21%
2023
2022
£14.8m
£12.2m
Annualised Recurring Revenue
17%
2023
2022
£15.8m
£13.4m
ANNUAL
REVENUES
AND
ADJUSTED
EBITDA
ARR by region
UK/Ireland
Europe
US
Australia
Total ARR
FY 2023
£m
FY 2022
£m
% growth
6.51
5.49
2.22
1.56
15.78
5.93
4.79
1.40
1.32
13.44
10%
15%
59%
18%
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 £10 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
UK/Ireland
Europe
US
Australia
Total revenue
FY 2023
£m
FY 2022
£m
%
change
% change
(constant fx)
11.92
11.01
4.30
2.77
30.00
9.93
10.88
3.72
2.50
27.03
20%
1%
16%
11%
11%
20%
1%
3%
6%
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%.
Stuart Ritchie
CHIEF FINANCIAL OFFICER
38
CFO’s Review continued
1Spatial plc Annual Report & Accounts 2023
Operating profit and profit before tax
The Group achieved an operating profit of £1.3 million (FY 2022:
£0.4 million) and profit before tax of £1.0 million (FY 2022:
£0.2 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 £14k (FY £0.2 million).
The 2022 tax credit is as restated following a prior year
adjustment leading to the creation of a deferred tax asset.
Balance sheet
The Group’s net assets increased to £17.4 million at
31 January 2023 (2021: £15.5 million), mainly due to the overall
profit after tax adjusted for currency differences in reserves.
Trade and other receivables increased in the year to £14.2 million
(FY 2022: £12.3 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 £15.8 million (2022:
£13.3 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 £5.4 million
(2022: £2.8 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.
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 £5.0 million from
£4.2 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 £0.2 million relating to the change
of the Chief Financial Officer (‘CFO’) in December 2022. Costs
include all payments due to the outgoing CFO on exit together
with any professional services fees incurred in onboarding his
replacement, drafting of contracts, share options and tax advice.
Operating cash flow
Cash generated from operations
Add back: Cash flow on strategic, integration and other non-recurring items
Cash generated from operations before strategic, integration and other non-recurring items
Free cash flow
Cash generated from operations before strategic, integration and other non-recurring items
Net interest paid
Net tax received
Expenditure on product development and intellectual property capitalised
Purchase of property, plant and equipment
Lease payments
Free cash flow before strategic, integration and other non-recurring items
Cash flow on strategic, integration and other non-recurring items
Free cash flow
FY 2023
£’000
FY 2022
£’000
5,352
48
5,400
FY 2023
£’000
5,400
(210)
179
(3,854)
(163)
(1,099)
253
(48)
205
2,497
294
2,791
FY 2022
£’000
2,791
(134)
176
(2,449)
(164)
(1,088)
(868)
(294)
(1,162)
Overview
Strategic Report
Corporate Governance
Financial Statements
39
Investment in R&D
Development costs capitalised in the year increased to
£3.9 million (FY 2022 £2.4 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, 1Telecoms and 1Water. Amortisation of development
costs was £1.6 million (FY 2022 £1.7 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 £3 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 £2.0 million (2022:
£2.4 million). The amount repayable in FY 2024 is approximately
€0.7 million (£0.6 million). With a gross cash position of
£5.0 million at 31 January 2023 (FY 2022: £5.6 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
Throughout this Annual Report, 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. Reconciliations are provided in
note 2 to the consolidated financial statements on page 78.
APMs have been provided for the following reasons:
• to present users of the Annual Report 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 Annual Report
about our financial performance or financial position
Stuart Ritchie
CHIEF FINANCIAL OFFICER
25 April 2023
The following APMs appear in this annual report
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
revenue (‘ARR’)
Annualised Recurring 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.
40
Environmental, Social and Governance
1Spatial plc Annual Report & Accounts 2023
OUR ESG
There has never been a better time for technology and expertise to come together
and address the ESG challenges facing businesses today. Our purpose is to help
customers make confident and informed decisions by unlocking the value of location
data for a safer, smarter and more sustainable world. We are proud to be helping our
clients and partners speed up their transitions to Net Zero and jointly find solutions
to a more sustainable future for all.
In this journey towards improved sustainability, we are committed to transparency.
Operating responsibly to deliver innovation is core to our beliefs, and we recognise
that ESG accountability not only governs what we do and how we do it but extends
to our supply chain, customers, communities and the planet.
MATERIALITY ASSESSMENT
A materiality assessment is an important step toward assessing
an organisation’s present understanding and future preparation
toward ESG initiatives. In FY 2023 we finalised our ESG material
priorities list after collaborating with a broad range of internal
and external stakeholders to gather feedback on important and
relevant ESG topics with the greatest potential impact.
This included gathering information from key leaders,
partners, employees, investors and customers; to inform
this work and ensure that we are aligning with our strategy,
supporting business growth while positively impacting
stakeholders. We identified 13 material issues that have been
plotted on the below graph by order of importance to either
stakeholders or the business.
Materiality Matrix
Data privacy and security
Digital
capabilities
Employee Experience
Nurturing and developing talent
Energy and climate impact
Environmental stewardship
Health and safety
Community impact
Diversity,
equality and
inclusion
Leadership and
business ethics
Material use and waste
Supply chain management
9
8
7
6
5
4
3
2
1
0
l
s
r
e
d
o
h
e
k
a
t
S
o
t
e
c
n
a
t
r
o
p
m
I
0
1
2
3
4
5
6
7
8
9
Importance to 1Spatial
Overview
Strategic Report
Corporate Governance
Financial Statements
41
STRATEGY
OUR ESG
OBJECTIVES
With FY2022 being our baseline
year, we recognise that the efforts
described in this report are part
of an ongoing journey and require
continuous commitment, reviews
and improvement. As we move
forward, we will adjust and iterate
to develop pragmatic and workable
solutions that address the needs
of our stakeholders.
Planet
People
Products
Practices
Set out in the following pages are
our ESG objectives, split into four
categories of Planet, People,
Products and Practices.
The Process
Following the materiality assessment, we grouped the 13 issues into four focus areas,
upon which we based our sustainability framework. We engaged with business leaders
across the four focus areas to develop our ESG commitments and targets. We then
presented the ESG strategy to our senior management team and Board for approval.
The ESG Steering Committee
Our cross-functional ESG team includes leaders from across the business that
set our ESG priorities and pave the way to increasing 1Spatial’s ESG impact.
The team comprises:
Ben Crowther, Technical Author
Robert Chell, Chief Product Officer
Julia Dutton, Global Head of Marketing
Claire Milverton, Chief Executive Officer
Seb Lessware, Chief Technology Officer
Lianne Tydeman, Group Financial
Controller
Gavin Jolley, IT Infrastructure and
Environment Manager
Mahima Gupta, UK Head of People
Jessica Sims, Global Head of People
Stuart Ritchie, Chief Financial Officer
In addition to the above individuals, input is sought from the Group’s country
managers and their teams in the US, France and Australia.
42
Environmental, Social and Governance continued
1Spatial plc Annual Report & Accounts 2023
PLANET –
EMBRACING
Energy and climate impact
• Work towards compliance with the
recommendations of our Carbon
Reduction Plan* in the UK.
Environmental stewardship
• Contribute to environmental
projects through sponsorship
or donations.
Material use and waste
• Create awareness about waste
reduction and recycling across all
our offices globally in FY23/24.
• Continue to monitor our carbon
inventory and extend carbon
assessments to other regions,
as well as undertake a Scope 3
assessment and full Net Zero
roadmap for our UK operations
and value chain in FY23/24.
• Establish short-term carbon
reduction initiatives in the UK in
FY23/24, rolling this out to other
regions in the next two years.
• Develop a sustainable travel policy
• Maintain compliance with
globally by January 2024.
• Achieve 100% awareness
organisation-wide about our ESG
strategy and associated carbon
reduction group efforts through
a staff engagement programme
in FY23/24.
ISO:14001-2015 (the environmental
management standard) and
relevant compliance obligations
in the UK.
OUR PROGRESS SO FAR
Carbon inventory
A carbon inventory is a collection of all
sources of carbon the entity produces
or is responsible for in the process of
conducting its operations. The primary
metric is carbon dioxide equivalent
(CO2 e). Emissions are broken down
into three categories, per the
Greenhouse Gas (‘GHG’) Protocol.
Scope 1
All direct emissions from the activities of
an organisation or under their control.
Example: Fuel combustion on-site such
as gas boilers, fleet vehicles, and
air-conditioning leaks.
Scope 2
Indirect emissions from electricity
purchased and used by the organisation.
Emissions are created during the
production of the energy and eventually
used by the organisation.
Scope 3
All other indirect emissions from
activities of the organisation, occurring
from sources that they do not own but
impact. These are usually the greatest
share of the carbon footprint, covering
emissions associated with business
travel, procurement, waste generation,
and product manufacturing.
The following guidelines were used:
• Carbon Reduction Plan – In accordance
with the UK Government Procurement
Policy Note 06/21
• Streamlined Energy and Carbon
Reporting Requirements (‘SECR’)
• Greenhouse Gas Protocol
Our baseline carbon emissions are
depicted in the table above, according
to PPN 06/21.
1Spatial’s UK Carbon Reduction Plan was
published in September 2022 to comply
with the UK Government Procurement
Policy Note 06/21 and sets out our
commitment to achieving Net Zero
emissions by 2050. Note: The Carbon
Reduction Plan includes additional
sub-categories from Scope 3, in line
with PPN 06/21.
Our UK Baseline Carbon
Emissions – FY2022
(PPN 06/21)
In accordance with our Carbon Reduction
Plan, UK baseline emissions in the financial
year of 1 February 2021 to 31 January 2022
were 64.4 tCO2e. To continue our progress
of achieving Net Zero by 2050, we have
adopted the following carbon reduction
targets. We will undertake a review of
these during the coming financial year
with a detailed Net Zero strategy.
We project that the intensity of our total
carbon emissions will decrease over the
next fifteen years to 0.3 tCO2e/FTE (full
time equivalent employee) by 2036. This
is a reduction of 50%.
This is broken down into separate targets
for our Operational and Value Chain
emissions:
a) We project that our Operational carbon
emissions in the UK will decrease
absolutely over the next five years by
4.2% each year (a total of 21% by 2027)
b) We project that our Value Chain carbon
emissions will decrease in intensity
over the next five years by 7% each
year (a total of 30% by 2027).
Overview
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Corporate Governance
Financial Statements
43
OUR
RESPONSIBILITY
Carbon Intensity Reduction: Projected vs. Actual (FY2022)
0.64
0.6
0.56
0.52
0.48
0.45
E
T
F
/
e
2
O
C
0.43
0.42
0.4
0.395
0.38
0.37
0.36
0.34
0.33
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
Target Emissions
Actual Emissions
Scope 2 indirect emissions (purchased
electricity) for this year of reporting
are 32.29 tCO2e, resulting from the
consumption of 166,959 kWh of
electricity purchased and consumed
in day-to-day business operations.
This represents a carbon reduction
of 11.79% from last year (Figure 1).
Our operations have an intensity metric
of 0.40 tCO2e per staff number for this
reporting year. This represents an
increase in the operational carbon
intensity of 0.17% from our previous
reporting year.
SECR: Second year of
reporting – FY2023
We undertook our second SECR
assessment for the period 1 February 2022
to 31 January 2023, the results of which
can be found in the table on the next page.
Our Scope 1 and 3 direct emissions
(combustion of natural gas and
transportation fuels) for this year of
reporting are 16.76 tCO2e, resulting from
the direct combustion of 71,988 kWh of
fuel. This represents a carbon increase
of 240.07% from last year (Figure 1).
This increase is due to a return to
“business as usual” following the
relaxation of COVID-19 restrictions, with
staff travel and event attendance once
again resuming and returning to
pre-pandemic levels, in addition to an
increase in overall full-time employees.
OTHER ACTIONS
• During the FY 2023/2024 we plan to
undertake a Scope 3 carbon emissions
analysis of our UK operations and
value chain.
• We are committed to ensuring that
our UK operations meet the ISO
14001:2015 standard, which is an
accepted international framework
for environmental management.
• We plan to conduct a Scope 1 and 2
carbon emissions analysis of our US,
French and Australian operations
during FY 2024.
• Development of a formal global policy
around waste management, recycling
and sustainable travel.
• In terms of short-term carbon reduction
measures, The Crown Estate have funded
energy saving works on the head office
building in the UK which included:
– installation of PIR sensors on
toilet lights
– removal of gas radiators in toilets
and atrium and replacement with
electric heaters
– reduction of temperature in common
areas by 1 degree
– replacement of water heater in plant
room for a more energy efficient
electric version
44
Environmental, Social and Governance continued
1Spatial plc Annual Report & Accounts 2023
SECR REPORT – STREAMLINED ENERGY
AND CARBON REPORTING
Table 1: 1Spatial plc UK Total
Energy Consumption (kWh)
Table 2: 1Spatial plc UK Total
Location-based Emissions (tCO2e)
Utility and Scope
Scope 1 Total
Gaseous and other fuels (Scope 1)
Transportation (Scope 1)
2022
Consumption
(kWh)
2021
Consumption
(kWh)
10,077
2,861
7,216
4,977
3,870
1,107
Utility and Scope
Scope 1 Total
Gaseous and other fuels (Scope 1)
Transportation (Scope 1)
Scope 2 Total
166,959
172,378
Scope 2 Total
Grid-supplied electricity (Scope 2)
166,959
172,378
Grid-supplied electricity (Scope 2)
Scope 3 Total
Transportation (Scope 3)
61,922
61,922
16,996
16,996
Scope 3 Total
Transportation (Scope 3)
2022
Emissions
(tCO2e)
Location-
based
2021
Emissions
(tCO2e)
Location-
based
2.26
0.52
1.74
32.39
32.29
14.5
14.5
0.97
0.71
0.26
36.6
36.6
3.96
3.96
Total
238,957
194,350
Total
49.04
41.53
ENERGY EFFICIENCY NARRATIVE
We are committed to year-on-year improvements in our operational energy
efficiency. A register of energy efficiency measures has been compiled,
with a view to implementing these measures in the next five years.
Measures ongoing
and undertaken
through 2021/22
Measures prioritised
for implementation
in 2022/23
Tennyson House
Long-term targets
The Crown Estate has funded energy
saving works on Tennyson House
(head office building) recently:
Over the last year, our focus has been on
formalising policy and long-term targets,
as well as identifying strategic ESG goals:
• Installation of PIR sensors on
toilet lights.
• Removal of gas radiators in toilets
and atrium and replacement with
electric heaters.
• Reduction of temperature in common
areas by one degree.
• Replacement of water heater in plant
room for a more energy efficient
electric version.
• Developed a Carbon Reduction plan
to the standard of PPN/0621.
• Developed a comprehensive
ESG strategy which includes
measurable targets.
Reporting
Methodology
This report (including the Scope 1, 2 and
3 consumption and CO2e emissions data)
have been developed and calculated
using the GHG Protocol – A Corporate
Accounting and Reporting Standard
(World Business Council for Sustainable
Development and World Resources
Institute, 2004); Greenhouse Gas
Protocol – Scope 2 Guidance (World
Resources Institute, 2015); ISO 14064-1
and ISO 14064-2 (ISO, 2018; ISO, 2019a);
Environmental Reporting Guidelines:
Including Streamlined Energy and
Carbon Reporting Guidance (HM
Government, 2019).
Overview
Strategic Report
Corporate Governance
Financial Statements
45
Table 3: 1Spatial plc UK Emissions
Intensity Metric
Utility and Scope
Location-based tCO2e
2022
% Change
All Scopes tCO2e per Staff Number
0.4
0.17%
Government Emissions Factor Database
2022 version 1 has been used, utilising
the published kWh gross calorific value
(CV) and kgCO2e emissions factors
relevant for reporting period 01/02/2022
– 31/01/2023.
All consumption data for 1Spatial plc
was complete for the reporting period.
Therefore, no estimations were required.
Intensity metrics have been calculated
using total tCO2e figures and the
selected performance indicator
agreed with 1Spatial plc for the
relevant report period.
The significant jump in transport
consumption this reporting period in
comparison with the previous reporting
period can be attributed to an increase in
operations and return to usual business
activities following the impact of
lockdown due to COVID-19.
Staff number
18.4%
2022
2021
122
103
46
Environmental, Social and Governance continued
1Spatial plc Annual Report & Accounts 2023
PEOPLE –
PASSIONATE
ABOUT
Diversity, Equity and Inclusion
• Provide a diverse and inclusive
working culture for all which
includes:
– Fair pay for all staff
– Health and wellbeing support
to promote the mental, physical
and financial wellbeing of all of
our employees.
• Maintain a 30% target for
women in leadership roles
over a three-year period.
Employee experience
• Undertake employee satisfaction
assessment with at least 85%
participation globally, to set
targets for improvement.
• Assess and encourage positive
relationships between both line
managers and peers through regular
check-ins and employee feedback.
Nurturing and developing talent
• Establish formal Learning and
development plans for at least
80% of employees in FY23/24.
• Offer relevant training opportunities
to all employees.
Community impact
• Create opportunities for employees
to participate in volunteering days,
with a target of 70% of employees
taking part in one volunteering
day per year (where events are
local to employees).
• Provide formal recognition through
global corporate communications
of employees who participate in
charitable causes.
Overview
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Corporate Governance
Financial Statements
47
MAKING A
DIFFERENCE
IN THE WORLD
OUR PROGRESS SO FAR
Whether supporting humanitarian relief,
improving water sanitation or managing
flood defences, our team delivers results
that make a real difference to people’s
lives. Our motivation is rooted in our
desire to help users realise the power
of their data to make better decisions
that benefit us all – from enabling the
emergency services response, to
ensuring the safe supply of water and gas.
We are proud of our selection to
Newsweek’s Top 100 Most Loved
Workplaces in the UK list, and we are
using the information from our first global
employee engagement survey to improve
our overall employee experience.
We strive to create a culture where our
employees feel engaged and motivated.
Our ability to recruit and retain key staff
is critical to delivering on our strategy.
We have appointed a dedicated
recruitment team to help source highly
skilled individuals to our key offices, and
this year we will be undertaking a global
employee benefits assessment review.
In addition, we implemented a new
recruitment platform and updated the
careers section on our UK website to
support the team in securing candidates
for specific roles.
We recognise that people are our most
important asset, and we aim to create an
environment that cultivates excellence,
promotes our values and encourages
diversity. We continue to embed our new
values through communication and
awareness programmes, including our
1Awards programme that recognises
outstanding contributions by employees
who embody our values.
When asked to provide input into our ESG
strategy, employees listed ‘Employee
experience’ and ‘nurturing and developing
talent’ among their top three material
issues. We have now set goals and
objectives for these two key areas in our
ESG framework. We also undertook an
employee engagement survey towards
the end of 2022 and plan to use the
insights gained to address employee
needs. Overall, 84% of employees
responded to the survey.
We continue to identify employee
needs and craft appropriate solutions
to meet global and regional
expectations. In May 2022, members
of our leadership team visited our
Tunisian office to solidify our values
and get further insights into the
employee experience in this region.
Feedback from this trip will be used
to tailor-make regional employee
benefits in line with regional
expectations. We also celebrated
global wellbeing in September and
October, with a range of hybrid and
in-office events such as team building
activities, physical and mental
wellbeing sessions and an online talk
by a mental wellbeing expert.
Read more about the results
of the employee engagement
survey page 10
48
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1Spatial plc Annual Report & Accounts 2023
PRODUCTS –
DELIVERING
EFFICIENCIES
Digital capabilities
• Take a “cloud first” approach to product
development, including deployment options via
SaaS, delivering computer power in a serverless
way to allow more control over energy
consumption through executing automation
processes on demand.
• Simplify and minimise data-handling to avoid
unnecessary data usage which can slow systems
down, adds no value to the data, introduces extra
cost and energy consumption. Formalise a process
in our integrated management system.
• Maintain “privacy and security by design”
in our products. Carry out Penetration testing
of all SaaS products where required, and
follow recommendations.
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Corporate Governance
Financial Statements
49
AND
CONFIDENCE
IN DATA
OUR PROGRESS SO FAR
We continue to deliver products and services that
help organisations achieve their Net Zero goals,
but to do so responsibly means also mitigating the
embodied climate impact of our products.
Reducing climate risks from our products is
therefore at the core of our business model and
ESG strategy.
This year we established a dedicated cloud team to
help us focus on how we go to market, improve our
SaaS competencies and deliver the maximum value
for our customers, using the minimal amount of
computing power.
As we move to launch our next major release of
our flagship product, 1Integrate, we have worked
hard to ensure we are ready for the planned
penetration testing over the next financial year,
to ensure we continue to maintain privacy and
security by design.
50
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1Spatial plc Annual Report & Accounts 2023
PRACTICES –
COMMITTED TO
ACCOUNTABILITY
Data privacy and security
• Aim to achieve ISO 27001 industry
certification in our UK office (a
“gold standard” for how data
security is managed and enforced)
in the next 18 months.
• 100 % of global staff to complete
cyber security staff awareness
training every six months.
• Continue ensuring staff awareness
around data retention and data
handling policies and processes to
minimise the risk of data breaches.
Compliance and regulation
• Maintain compliance with all
relevant corporate governance
and company law regulations.
Health and safety
• Provide a safe and healthy working
environment for all, ensuring all
office environments comply with
local health and safety regulations.
Leadership and business ethics
• Create ongoing opportunities
for the development of leaders
through informal learning, training,
assessments and mentoring or
coaching where relevant.
• Launch the company Code of
Conduct and ensure 100% of
employees and Directors are
briefed on the code in
FY2023/2024.
Supply chain management
• Undertake an assessment of critical
suppliers* to our operations in the
UK to ensure they meet our
supplier standards, relating to
regulatory requirements, Code of
Business Conduct, information
security arrangements, supply
chain management and carbon
emissions information.
* Critical suppliers: suppliers whose products or
services have a direct impact on the ability of
1Spatial to satisfy customers’ requirements,
with a meaningful level of spend.
Overview
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Corporate Governance
Financial Statements
51
AND
TRANSPARENCY
OUR PROGRESS SO FAR
This year we launched a Company Code of Conduct
and revised our supplier standards to contribute to
achieving our ESG objectives. We continue to focus
on the importance of data privacy and cyber
security, with staff awareness programmes
managed and monitored regularly, while making
good progress towards achieving ISO/IEC 27001
certification, a gold standard in information
security management best practice.
We are planning to launch our new supplier
assessment process during the financial year,
which will request details on information security,
supply chain management and environmental
impacts. We will also ensure suppliers sign our
code of business conduct and confirm compliance
with the relevant legislation. Moreover, we publish
specific policy statements for different areas such
as anti-bribery, public interest disclosure
(whistleblowing), Modern Slavery Act, equality and
diversity, environmental management, quality
management and health and safety. For more
information see: https://1spatial.com/legal/
52
Principal Risks and Uncertainties
1Spatial plc Annual Report & Accounts 2023
The management of the business and the execution of the Group’s
strategies are subject to a number of risks. In the opinion of the Board,
the principal business risks affecting the Group, and the controls and
mitigation to manage these risks, are as follows:
Principal risk
Potential impact
Mitigation and controls
Macro economic or
political changes
(e.g. escalation of
war in Ukraine) and
impact on customers
and operations
With the uncertainty across global markets
emerging from the COVID-19 pandemic, which is
now exacerbated by the war in Ukraine and the
impact in particular on the global energy markets,
there is the risk that companies and government
agencies are under more pressure to reduce
spending budgets. New projects may require a
more robust business case before investing in
technology and services which could impact or
lengthen deal sales cycles and reduce deal size.
Whilst there are macro economic risks, they may
provide an opportunity for 1Spatial. The large fiscal
stimuli in major economies and the green agenda may
also provide a cushion to these risks. Our automated
technology enables customers to achieve greater
internal efficiencies and therefore should reduce
customers’ total costs in the long run. The Group is
also mitigating this risk by looking to diversify the
industry sectors and geographies in which it operates.
Key management
and employees may
leave the business
There is a risk that key management and
employees leave the business, having a
detrimental effect on the operations of
the business.
Reliance on
key customers
The Group has traditionally had some client
concentration and over reliance on certain key
customers. There is a risk with this narrow
approach that disruption within one or two
clients can have an adverse effect on overall
Group performance.
There are also risks that arise from signing higher
value contracts and managing the relationship
with customers through partners on larger
projects, as well as managing the recruitment of
additional resources, project scope and ensuring
profitable delivery.
In order to mitigate this risk, the Group aims to create
a rewarding working environment that will help retain
staff by offering competitive salaries and benefits,
structured career paths, tailored training and by
encouraging a culture of free thinking and innovation.
The Group has an established employee share plan
which key employees participate in. Further awards
are planned in future years to incentivise management
and employees. This is part of the reward structure to
deliver long-term value and align the interests of key
people with those of the Company’s shareholders.
We continuously monitor and seek feedback on our
employees’ workplace health and wellbeing including
mental health. As described in the People Report on
page 10, we conduct regular office-based events
to foster engagement with our staff and encourage
our people to participate in anonymous surveys to
enable the organisation to continuously improve as
an employer.
The Group continues to invest in its relationships with
key customers that it has successfully retained over
many years, while also maintaining a strategy to
extend and diversify its customer base. The shift to
subscription-based (term licence) revenues from
perpetual licences across the Group will also reduce
the financial impact of peaks and troughs that can
occur with any individual key customer project delays.
We continue to invest in the relationships with our key
partners, which we see as core to our growth strategy.
As part of this we have recruited a global partner
manager to focus on managing our key relationships
in a more professional way. We have also recruited a
Chief Commercial Officer who is focusing on managing
our project delivery and exploring ways that we can
improve our project management.
As recurring revenue from term licences increases,
the percentage of annual revenue that is at risk from
any disruption from key customers will be reduced.
Overview
Strategic Report
Corporate Governance
Financial Statements
53
Principal risk
Potential impact
Mitigation and controls
Growth management
The Group is focused on revenue growth – both
organically, through the launch of new SaaS
solutions and potentially through acquisitions –
to increase our market reach in the geographies
that we currently operate in, as well as the
solutions that we offer in those geographies.
Organic growth
If the Group is unable to manage expansion
effectively, its business and financial results
could suffer. There are potential risks to
achieving revenue growth from competitors
with open system offerings and similar solutions.
There are also greater challenges arising from
managing larger, longer-term complex projects.
Growth from sale of new SaaS solutions
Over the last number of years, we have devoted
investment and resources to developing our
SaaS offering, primarily the TMPA and NG9-1-1
products. We believe there is a significant
market opportunity in these areas and limited
competition. These products are substantially
complete. Despite the go-to-market strategy
that we have developed, there is a risk that the
revenue we generate could be slightly delayed.
Inorganic growth
The risks associated with inorganic growth
include the delivery of market penetration
through the integration of the acquisitions,
conversion of leads to sales, and control of
increases in fixed operating costs to support
revenue growth.
The business development strategy is closely
monitored by the senior team and the Group’s pipeline
of opportunities is regularly reviewed at sales and
Board meetings.
The investment in core solutions together with the
development of new business applications, particularly
those delivered through the cloud, will enable the
Group to scale more rapidly. The risk of poor project
management and overruns has been mitigated by the
recruitment of a Chief Commercial Officer whose remit
includes improving management of project delivery
and services financial performance.
In order to mitigate this risk to an acceptable level, we
have subjected these products to extensive internal
testing and are in the process of trialling them with a
number of key prospects. Very positive feedback on
the trials and on the demonstrations at industry events
has been received to date.
Additionally, we have engaged a number of industry
experts and sales professionals to focus specifically on
market development and deal closure.
The successful integration of any acquisition is a key
Board priority to ensure that it brings the required
synergies and benefits to the Group. The Group
conducts rigorous due diligence as part of any
potential acquisition to ensure financial, operational
and technological aspects are understood.
54
Principal Risks and Uncertainties continued
1Spatial plc Annual Report & Accounts 2023
Principal risk
Potential impact
Mitigation and controls
A major technology
failure may
adversely disrupt
operations
Breaches of the Group’s digital security through
cyber-attacks or otherwise, or failure of the
Group’s digital infrastructure could seriously
disrupt operations, including the provision
of customer services, and result in a decline
in revenues.
The Group continues to invest in resources to enhance
site resilience and defences, improving network
monitoring and reviewing the incident response
processes to mitigate the impact of a security breach.
A data breach may
adversely impact
operations and
damage business
reputation
Reliance on key
software partners
Breaches of the Group’s digital security through
cyber-attacks or otherwise, or failure of the
Group’s digital infrastructure could result in the
loss or misuse of sensitive information, including
client data. Legal or regulatory breaches could
result in potential liability, and reputational
damage among the customer base leading to a
decline in revenues as well as significant penalties
or fines.
The Group continues to invest in technical and security
resources and regularly reviews its information
security policies and procedures to ensure it reduces
the risk, and mitigates the impact, of any potential data
security breach. The Group has ISO 9001 (QMS Quality
Management System Certification) accreditation in
some countries.
The Group works with key partners in each
geospatial market to provide customers with
software and services. Our software tools can be
bought stand-alone or within our partners’
platforms. The Group therefore has reliance on
maintaining good relationships with key partners
to provide software and services to customers.
There is a risk that these partners may have
application software issues that impact 1Spatial’s
ability to deliver projects on time and to budget.
The Group’s management team works to maintain
good relationships with its partners in each country,
including regular meetings throughout the year.
Escalation routes are established to ensure any issues
can be mutually resolved quickly.
The management team works with each partner to
identify points of collaboration to achieve, wherever
possible, a win for both companies.
Loss of intellectual
property
Failure to protect the Group’s intellectual
property may result in another party using its
proprietary technology without authorisation.
The Group’s intellectual property is protected in the
USA by a patent. The source code for all 1Spatial
software is securely stored and backed-up in
Atlassian’s BitBucket, a leading industry-standard
cloud-based source code repository system. In order
to minimise the disclosure of intellectual property
outside the organisation, the Group relies on
confidentiality agreements with its employees,
customers, suppliers, consultants and others to
protect its intellectual property rights. These are
backed up with strict operational IT policies for user
offboarding which are audited and compliant with ISO
9001 and Cyber Essentials Plus.
Overview
Strategic Report
Corporate Governance
Financial Statements
55
Principal risk
Potential impact
Mitigation and controls
Managing
inflationary cost
pressures
As the risk of increasing inflation (and indeed,
potential stagflation) affects our costs, primarily
salary costs of our workforce, there is a risk that
the Group’s profitability will suffer.
In order to minimise inflationary risks to profitability,
we have reviewed all our charge-out rates for
consultants, country by country, as well as product and
solution prices and applied increases accordingly.
Where applicable, we have amended sales contract
terms to ensure inclusion of appropriate RPI increases.
We have undertaken salary benchmark reviews in
order to ensure that we continue to pay competitively.
Where we have core software solutions that we use to
support the business, we have sought to lock in prices
on a longer-term contract basis, where it makes
commercial sense to do so.
Pandemic (e.g.
COVID-19) disrupts
business operations
The impact of further lockdowns and extended
social distancing restrictions that may result as a
consequence of the ongoing global pandemic,
could have an impact on the ability of employees
to deliver services and support to customers. It
could also impact our ability to generate new
business, given the limited ability to host physical
user events for our customers and attend industry
exhibitions and events. A continued or new future
lock-down of customer offices may reduce our
ability to carry out our consulting services and
delay or reduce income during these restrictions.
We successfully facilitated a move to remote working
across all our sites in March 2020, enabling the Board
to function and management teams and staff to
maintain engagement with our customers and key
stakeholders. In the last two financial years we
successfully continued to evolve a hybrid approach
to operations and client delivery. We provided our
customers with user events on a virtual basis during
this time through webinars and also attending events
and exhibitions on a virtual basis, although in-person
or hybrid events are now returning.
Currency fluctuation As an international Group, with revenue and costs
in foreign currencies, the financial results are
exposed to currency movements, predominantly
US$ and EUR.
The Group seeks to reduce foreign exchange
exposures arising from transactions in various
currencies. There is a high degree of natural hedging of
revenues with costs in overseas operations. Any
residual currency exposure is managed by using spot
and forward currency contracts to offset that risk as
soon as the currency exposure is known with
reasonable certainty.
56
Section 172 Statement
1Spatial plc Annual Report & Accounts 2023
The Directors have fulfilled their responsibilities under Section 172
of the Companies Act 2006, which requires them to act in the way
they consider, in good faith, would be most likely to promote the
success of the Company for the benefit of its members as a whole.
Engaging with stakeholders is very
important to 1Spatial and in this section
we explain in more detail how 1Spatial
does this. We understand that effective
engagement with stakeholders at
Board level is crucial to fulfilling
1Spatial’s purpose.
The essentials of our care for the
workforce and community and other
stakeholders, as well as continued
commitment to leadership, corporate
governance, effective decision-making
and access to relevant and timely
information remain our priority. These
factors are especially important today.
The likely consequences
of any decisions in
the long term
The Board has three strategic growth
pillars for FY23 and beyond, which are:
innovation, customer relationships and
smart partnerships. These pillars reflect
the need to consider the interests of our
staff and the need to keep pace with
market initiatives and technological
changes, so the business is appropriately
positioned to take best advantage of
market conditions. The strategic pillars
are cascaded down to all the entities
and individuals within the business
through our Global Business Objectives
Setting process, our monthly Global
Management Meetings, and regular
financial reporting processes.
The interests of
our employees
Engaged, enabled, empowered employees
who contribute to the best of their
potential are fundamental to the
long-term success of the business.
We employ and develop high calibre
staff and we maintain oversight of their
performance through performance
review processes and personal
development programmes.
We actively support equality, diversity
and inclusivity and we do as much as
we can to ensure a positive environment
for health and wellbeing. We offer
appropriate levels of remuneration which
we benchmark using professional
advisers and market surveys. We value
our employees’ thoughts and ideas and
two-way communication is actively
sought and encouraged. During the year
a number of staff surveys were carried
out in each region to assess employees
wellbeing given the particularly difficult
circumstances this year. Matters covered
included health and safety, working at
home, ensuring that employees felt
supported during the pandemic and views
and opinions around returning to the
work place. During this year we continued
to operate lots of wellbeing activities,
which focus on promoting mental and
physical health.
During the COVID-19 pandemic, we took
advice from local governments in the
countries that we operate in to safeguard
our employees and subcontractors, the
majority of which have been working
remotely, with regular check-ins with
other members of staff. To maintain
mental health and connectedness in this
difficult time, staff have had access to
wellbeing resources, and regularly meet
online to support each other,
participating in weekly social activities.
As a Group, we will be guided by the
advice of governments across our
territories on maintaining measures
to protect our employees’ health as
the social distancing restrictions
are adjusted.
Building and sustaining
a positive corporate
culture across the Group
The Board gives active consideration on
an ongoing basis to how we demonstrate
the positive corporate culture and
conduct at 1Spatial. These matters are
important as they affect all stakeholders.
The Board recognises that determining
and embedding a high standard of
corporate culture within the business is
essential to ensure the Group preserves
and maintains its long-established
reputation for high standards of business
conduct, and also to ensure the business
remains sustainable, maximising any
competitive advantage this provides over
the longer term and building value for
shareholders. Last year we established
our new values We Respect, We Innovate,
We Collaborate, We Trust and We Care
and we continue to encourage staff to
embrace them in everything they do.
The need to foster the Group’s
business relationships with
customers, partners, suppliers
and others
1Spatial customers are key to the
long-term success of our business. We
develop relationships with our customers
based on mutual trust and our ability to
meet their needs effectively. We focus on
understanding what they want and put
that at the centre of our decision-making
to create meaningful partnerships so that
we understand how our customers’
requirements evolve. This is key to our
Land and Expand approach of developing
our customer relationships, enabling
us to derive insights from our customers
to inform future product development
and innovation.
Business is also sourced through our
invaluable partnership networks with key
players in the location field such as Esri,
Ordnance Survey and VertiGIS. They are
key business partners and we set out our
relationship in terms of business or
service level agreements. We maintain
oversight of these arrangements as well
as making sure our customers receive
appropriate levels of disclosure.
Overview
Strategic Report
Corporate Governance
Financial Statements
57
The impact of the
Group’s operations
on the community
1Spatial is a responsible member of its
global and local community as it reflects
our culture and matters to our staff and
local community. 1Spatial has a strong
culture of supporting staff in both
individual and group volunteering and
fundraising initiatives. To maintain
direction and drive momentum our senior
team coordinates corporate social
responsibility activities within the Group.
Each year, our staff volunteer their time,
energy and skills for projects that support
global good causes. Two such initiatives
are Missing Maps, a project to map the
most crisis-prone parts of the world and
Map Action, a project to create maps in
countries affected by war and other
crises (such as Ukraine, Turkey and
Syria). Our staff also support schemes
that give something back to our local
community, for example food banks and
homeless charities.
Our data management solutions and
business applications not only increase
the effectiveness of our customer
organisations but also increase social
responsiveness; a number of these are
set out in our ESG Report.
The impact of the
Group’s operations
on the environment
1Spatial’s purpose is to make the world
more sustainable, safer and smarter for
the future. While many of our solutions
are aimed at helping our customers save
money and be more efficient, they also
ensure that data is correct for enabling
our customers to address environmental
issues in their business.
We take our environmental consciousness
and apply it to our day-to-day operations,
adhering to the internationally recognised
ISO 14001:2015 standard in the UK. By
following this standard, we can ensure
that our operations are carried out in an
efficient and environmentally considerate
manner, and our Environmental Policy
represents our commitment to this promise.
The desirability of the
Group maintaining a
reputation for high standards
of business conduct
1Spatial seeks to achieve and maintain
a reputation for demonstrating a high
standard of business conduct as this
has a positive impact on interactions
with utility firms and governmental
bodies in particular. In several territories
we comply with ISO 9001 Quality
Management certification to provide
the framework and guidance to ensure
that we consistently meet our
customers’ expectations and
regulatory requirements.
The need to act fairly and
engage with shareholders
of the Group
We have an on-going dialogue with
shareholders through road shows to
formally communicate the Group’s
financial results on a yearly and half-
yearly basis, as well as periodic capital
market days. The Chairman meets
regularly with investors to hear their
perspective of Group performance and
the priorities they feel that the Group
should be pursuing. Investor feedback
is also provided by the Group’s NOMAD,
following investor road shows, in order
for the Board to build on its alignment
of the Group’s strategy to business
objectives and communicate these in
a clear manner.
Our Annual General Meeting enables
us to gather our shareholders’ views
while also particularly giving our
non-institutional shareholders the
opportunity to hear directly from the
Chairman and the Board. Shareholders
can view and manage their holdings
using an online share portal and are able
to access press releases and regulatory
news via our website.
Material decisions impacting
stakeholders which took
place in the year ended
31 January 2023
Material decisions taken during the
year included the decision to increase
spending of free cash flow on sales and
delivery capacity in order to aim to
secure higher value contracts, as well
as increasing spending on R&D and
innovation in cloud technology, as part
of the three-year growth plan.
For the purpose of this statement
detailed descriptions of the decisions
taken are limited to those of strategic
importance. The Board made these
decisions based on full consideration of
and interactions with both internal and
external stakeholders, including
employees, customers and shareholders.
Signed on behalf of the Board
Stuart Ritchie
CHIEF FINANCIAL OFFICER
25 April 2023
58
Board of Directors
1Spatial plc Annual Report & Accounts 2023
Our Board of Directors
possess a diverse
range of skills and
experience and take
overall responsibility
for the organisation’s
strategic direction
and governance. They
are the driving force
behind our response
to our environmental,
social and governance
(‘ESG’) initiatives.
Board Committees
Nomination Committee
Remuneration Committee
Audit Committee
Claire Milverton
CHIEF EXECUTIVE OFFICER (‘CEO’)
Stuart Ritchie
CHIEF FINANCIAL OFFER (‘CFO’)
Appointed
October 2017
December 2022
Stuart joined the Board as Chief Financial
Officer in December 2022. He is an
experienced finance director with a
strong background in publicly quoted
international technology companies.
Most recently Stuart was Group CFO at
Fusion Global Limited, a provider of
SaaS-based workflow software that
generated £30 million in annual revenue
across its US, UK and continental
European operations.
His previous roles include global head
of accounting and external reporting at
ZEAL Network SE, a Frankfurt-listed
eCommerce group. Stuart is a fellow of
the Institute of Chartered Accountants,
qualifying with EY.
Skills and experience
Claire is passionate about leading and
working collaboratively, making the best
of her team’s skills to create a great
organisation and a positive culture –
extending this approach to all other
stakeholders, including customers
and partners.
Claire believes that working collaboratively
with clients and partners is a key way to
accelerate growth – it’s important to
provide “best of breed” solutions to deliver
against customer and market needs.
Good data governance and data quality
are at the heart of 1Spatial. Having
worked in finance, Claire is no stranger
to issues in relation to poor quality data.
Claire recognises the importance of
creating economic value from data
investment – whether that is to address
issues such as sustainability or to
improve customer efficiencies.
Claire has spent a significant number of
years in the technology sector – from
both her time working at 1Spatial as CFO
(from 2010 to 2017, prior to being
appointed to CEO), and through her
experience at PwC, where she was an AIM
market and technology specialist. Claire
is a qualified Chartered Accountant.
Overview
Strategic Report
Corporate Governance
Financial Statements
59
Andrew Roberts
NON-EXECUTIVE CHAIRMAN
Francis Small
NON-EXECUTIVE DIRECTOR
Peter Massey
NON-EXECUTIVE DIRECTOR
September 2016
August 2017
July 2018
Andrew brings significant experience
to 1Spatial from both a technology and
equity capital markets perspective.
Andrew led the Innovation Group plc from
2009 until its sale to Carlyle Group in
2016 for £500 million. During this time,
the company grew to be a global
business, providing business services and
software solutions. He has also been
chairman of Kewill plc, a leading
international supply chain software
business, non-executive director and
chairman of Civica, a leading UK IT
services business. Prior to this, he was
non-executive chairman of Vega Group
plc until its sale in 2008 to Finmeccanica
SPA for £61 million.
Andrew started his career at ICL and then
led the management team that turned
around private equity-owned Data
Sciences (then a leading BPO business)
which was sold to IBM in 1996.
Francis brings significant experience from
his capital markets and financial services
background, having been at EY (Ernst &
Young) from 1979 to 2015 where he held
key positions, including as UK head of
Corporate Finance, global vice chair and
then managing partner of UK & Europe
Transaction Advisory Services, global
leader of sovereign wealth funds and
ultimately, senior partner for
international clients.
During his time at EY, Francis had
responsibility for a wide range of teams
and divisions, overseeing strategy
development while delivering revenue
growth. He worked closely with notable
businesses including 3i, Arcelor Mittal,
Rexam, TPG and UBS. Francis is Non-
Executive Chairman of Quixant plc, an
AIM-listed technology company. He
also chairs the Board of Governors at
Kingston University. He was previously
Chair of British Business Investments,
a government-backed investment
company that helps provide finance
to UK SME businesses.
Francis graduated from Cambridge
University with a degree in law, is a
chartered accountant and a Fellow
of the ICAEW.
Peter brings significant industry
expertise and strategic insight to
the Board in the key focus areas of
government, utilities and transport,
which he has developed through a
long career, driving business growth
within these industries.
Peter has held a number of senior
executive positions during his career,
including the following:
• Advisory board member, Space
Time Insight Inc. (USA/UK)
• Director of transformation at
National Grid plc. (UK/USA)
• Director, distribution support at
National Grid plc.
• Head of Network Sales at National
Grid plc
• Head of Network Services at
Transco plc
Peter is the founder and director of
Upcurve Limited, which provides
management consultancy services in
areas of asset management, IT-led
transformational change and
performance growth for organisations
– from start-ups to established
multi-national organisations.
Peter is a chartered engineer and
graduated from the University of
Salford with a BSc (Hons) in Natural
Gas Engineering.
60
Corporate Governance Report
1Spatial plc Annual Report & Accounts 2023
An Introduction
from the Chairman
In the year ended 31 January 2023, we
continued to adhere to a high standard of
ethics, values and corporate social
responsibility. These principles continue
to underpin our governance procedures
and the strategic and management
decisions we make. We continue to assess
and develop internal processes to ensure
we maintain the robustness of decision-
making. More details of what we, as a
Board, have been focusing on throughout
this financial year is set out in our Section
172 Statement (‘s172 Statement’).
We will continue to ensure the Board and
its committees function effectively, that
all Directors provide strong and valuable
contributions and that no individual or
group dominates the Board’s decision-
making process. The Board has delegated
specific responsibilities to the Audit,
Remuneration and Nomination Committees,
details of which are set out in this report.
As a Board we also set clear expectations
concerning the Group’s culture, values
and behaviours. We believe in order for
us to execute on our customer centric
solutions approach it is vital that the
Board and all our employees act in a way
that reflects the underlying values of the
business. Our core brand values are: We
Respect, We Innovate, We Collaborate, We
Trust and We Care. We expect everyone
throughout the Group to adhere to these
values. Our s172 Statement gives more
details of how we continue to ensure the
wellbeing and best interests of all our
employees around the Group.
The Board has adopted the high
standards of corporate governance
contained in the Corporate Governance
Code for Small and Mid-Size Quoted
Companies (‘QCA Code’). Details of how
we comply with the QCA Code are set out
in our Statement of Compliance, which is
updated annually, a copy of which can be
found on our website www.1spatial.com.
The Board
Composition
The composition of the Board is shown
on pages 58 and 59. The current
Directors possess a range of skill sets,
capabilities and experience gained from
diverse backgrounds, thereby enhancing
the Board by bringing a wide spectrum of
knowledge and expertise.
The role and operations
of the Board
The role of the Board is to ensure delivery
of the business strategy and long-term
shareholder value. The general
obligations of the Board and the roles and
responsibilities of the Chairman and the
Chief Executive Officer are set out in a
formal Board responsibilities statement
approved by the Board. The Board fulfils
its role by approving the annual
strategic plan and monitoring business
performance throughout the year. The
Board held 11 formal scheduled Board
meetings during the financial year and in
addition held a number of unscheduled
ad-hoc meetings, e.g. to approve signing
of major contracts, to review and assess
financial budgets and short-term strategy
solutions. Most Board meetings in the
financial year were held remotely,
although we are moving back to
in-person Board meetings as our
workforce returns to the office following
the COVID-19 restrictions. There is in
place a schedule of matters reserved for
Board approval that can be found on the
Company’s website www.1spatial.com.
The Board have approved an annual
Board calendar setting out the dates,
location (subject to any remote working
restrictions) and standing agenda items
for each formal scheduled Board and
Committee meeting and scheduled Board
calls. Board papers are circulated to
Directors in advance of scheduled and
unscheduled meetings, which are of an
appropriate quality to enable the
Directors to fulfil their obligations and
adequately monitor the performance of
the business. Directors who are unable to
attend a meeting are expected to provide
their comments to the Chairman, the
Chief Executive Officer, or the Company
Secretary, as appropriate. The Board also
receives management information on a
regular basis that sets out the
performance of the business. The Chief
Executive Officer and Chief Financial
Officer are invited to attend the Audit
and Remuneration Committee meetings,
if appropriate.
During the year, the topics subject to
Board discussion at formal scheduled
Board meetings included:
• Strategic plan and annual forecast
and budget;
• Health and safety matters;
• Investor relations;
• Financial and operational performance;
• Project updates;
• Market and competitor reports;
• Approval of high-value sales contracts:
• Financing activities and facility
agreements;
• Approval of Annual and Half-year Reports;
• Governance updates and the EU Market
Abuse Regime;
• Industry regulatory and compliance
developments;
• Any residual COVID-19 – related issues
• Risk and internal controls;
• General Data Protection Regulation
(‘GDPR’); and
• Related-party transactions.
Attendance at scheduled Board Meetings
during the year is shown below:
Formal scheduled Board
meetings during the year
ended 31 January 2023
Maximum
possible
attendance
Meetings
attended
11
11
10
11
11
1
11
11
10
11
11
1
Director
A Roberts
(Chairman)
C Milverton
A Fabian*
F Small
P Massey
S Ritchie**
*
**
Resigned from the Board of Directors
on 19 December 2022
Appointed to the Board of Directors
on 19 December 2022
Advice, insurance
and indemnities
All Directors have access to the services
of the Company Secretary and may take
independent professional advice at the
Company’s expense in conducting their
duties. The Company provides indemnity
insurance cover for its Directors and
officers, which is reviewed and
renewed annually.
Overview
Strategic Report
Corporate Governance
Financial Statements
61
Conflicts
Succession planning
Nomination Committee
Consideration of Directors’ interests is
a standing agenda item at each formal
scheduled Board meeting. Each Director
is required to disclose any actual or
potential conflicts of interest and a
register of Directors’ interests is
maintained by the Company Secretary.
If there is a conflict of interest or a matter
relating to a particular Director or a
related-party transaction, then the Board
understands that the relevant Director
shall excuse themselves from the
discussion. Each year updated schedules
of interests for all Directors are circulated
to the Board for information and formal
approval, where appropriate.
Board evaluation
A formal evaluation of the performance
and effectiveness of the Board and its
Committees was conducted for the year
ended 31 January 2023, the results for
which were shared and discussed in
March 2023. The scope of the evaluation
was discussed and agreed with the
Chairman, a Non-Executive Director and
the Company Secretary. The evaluation
was implemented by means of a
questionnaire. The final evaluation report
highlighted a number of positive
messages regarding issues such as – the
role of the Chair, the board structure and
roles, decision-making and external and
internal communications. The topics that
required additional focus at future Board
meetings included on-going Board
training and succession, development
of the Group’s “purpose” and messaging
to improve presentations to shareholders,
and evolution of the Group’s ESG strategy.
Board development
All new Directors appointed to the Board
receive a comprehensive induction. In the
year ended 31 January 2023 the Board,
with the Company Secretary, updated the
structured training and development
programme including strategic issues,
legal issues and environmental, social and
governance (‘ESG’) issues. The
Company’s Nomad is invited to attend a
Board meeting each year to update the
Board on their general and statutory
duties and current best practice
governance issues and senior technical
experts will present to the Board in
calendar year 2023 on topics such as
ESG, as well as regulatory and industry-
related issues.
Succession continues to be a key priority
for the Board. The current Directors
possess a range of skill sets, capabilities
and experience gained from diverse
backgrounds, thereby enhancing the
Board by bringing a wide spectrum of
knowledge and expertise. The Board has
approved a succession policy and
discussions are ongoing regarding short
and long-term succession for both
Directors and the senior management
team. You can find more about the
experience and expertise of the current
members of the Board on the Company’s
website www.1spatial.com.
Reappointment of Directors
at the Annual General Meeting
The Articles of Association provides that
a third of Directors retire annually by
rotation and, if eligible, offer themselves
for re-election. However, in accordance
with good governance principles, at
each AGM all the Directors retire and,
subject to being eligible, offer themselves
for re-election.
Relations with investors
The Company produces this Annual
Report that is available on the Investor
Relations section of the Company’s
website and distributed to those
shareholders who have requested to
receive hard copies. The Company’s
website www.1spatial.com contains
information on the Group, matters
reserved for the Board, the Company’s
Articles of Association, the Committees’
terms of references, copies of all
documents sent to shareholders and all
market and regulatory announcements.
The Board ensures that financial
reporting and operational updates are
communicated to the market on a timely
basis and give an accurate and balanced
assessment of the business. The
Company’s share dealing policy sets out
how the Directors meet their obligations
under the AIM rules in this regard and
how the advisers are involved in the
market communications process
coordinated by the Company Secretary.
Board committees
The terms of reference of the Board’s
Committees, as summarised below, are all
available in full on the Investor Relations
section of the Company’s website at
www.1spatial.com.
Membership
A Roberts (Chair)
F Small (Member)
In the year ended 31 January 2023, all
senior management appointments, as
well as succession plans for the Board
and senior management, were dealt with
by the entire Board. The recruitment
process involved both the Non-Executive
and Executive Directors to ensure that
any appointments made strengthened
and diversified the composition and skill
set of the existing Board. Instead of
holding a Nomination Committee
meeting, the Board meetings throughout
the year included discussions about
senior management, recruitment and
succession planning in line with the
Group strategy.
The key responsibilities of the
Nomination Committee are:
i) Recommending Director nominees
to the Board;
ii) Recommending Committee Chairs
and membership to the Board and
Committees;
iii) When appropriate, taking into account
the current stage of the Company’s
development, reviewing succession
plans for the Board and Committees;
iv) Making recommendations to the
Board in respect of the re-
appointment of any Non-Executive
Director at the conclusion of their
specified term of office taking into
account their performance and their
contribution together with the
knowledge, skills, leadership and
experience requirements of the
Board and Committees;
v) Regularly reviewing the structure,
size and composition (including the
balance of skills, diversity, knowledge
and experience) required for the
Board and making recommendations
to the Board with regard to any changes.
Remuneration Committee
Full information on the composition, role,
operation and meeting attendance of the
Remuneration Committee is set out in the
Remuneration Report on page 64.
62
Audit Committee Report
1Spatial plc Annual Report & Accounts 2023
Following the recommendation of the Audit Committee and passing
of the shareholder resolution at the Annual General Meeting in 2022,
BDO LLP (‘BDO’) were re-appointed as external auditors for the Group
for the financial year ended 31 January 2023.
AUDIT COMMITTEE
MEMBERSHIP
F Small (Chair)
A Roberts
P Massey
MEETING ATTENDANCE
Attendance at scheduled Committee
Meetings during the year is shown
below. Additional ad-hoc meetings
by conference call were also held
during the year.
Director
F Small (Chair)
A Roberts
P Massey
Maximum
possible
attendance
Meetings
attended
2
2
2
2
2
2
The Committee has a calendar of
activities agreed each year. Senior
management and the external auditors
(BDO) may attend meetings at the
request of the Committee.
The key responsibilities of the Audit
Committee are:
i) Monitoring the integrity of financial
statements, including approving any
material changes in accounting policy,
reviewing the financial statements,
and any market announcements
relating to the Group’s financial
performance;
ii) Reviewing the integrity of internal
financial control and risk management
systems and codes of corporate
conduct and ethics and any published
statements regarding these systems
and codes;
iii) Making recommendations to the
Board regarding the engagement of
the external auditors, approving their
terms of engagement, monitoring
their objectivity and performance
and setting policy regarding the
provision of non-audit services by
the external auditors;
iv) Reviewing the plan, scope and results
of the annual audit, the external
auditors’ letter of comments and
management’s response thereto; and
v) Receiving reports from the CFO relating
to risk control and management’s
response to the findings.
During the year, the topics discussed
at formal scheduled Committee
meetings included:
• Review of the risk register, assessing
how each risk identified is being
monitored and ensuring the process
of how these risks are being actively
managed is in place;
• Receipt and consideration of reports
from the external auditors regarding
the scope and findings of their audit
of the Annual Report;
• Recommendation of the Annual
Report and Half-year Report to the
Board for approval, together with the
management representation letter
and audit fees;
• Review of audit and non-audit related
fees paid to the external auditors and
monitoring the independence of the
external auditors;
• Review and consideration of accounting
treatment policy changes in line with
industry practice, as recommended by
external auditors; and
• Review and update of the terms of
reference of the Audit Committee.
To ensure the objectivity and
independence of the external auditors,
any service provided by the external
auditors must be approved in accordance
with the Group’s policy on auditor
independence and the provision of
non-audit services, which is consistent
with the UK Auditing Practices Board’s
Ethical Standards for Auditors.
The external auditor is only selected to
provide non-audit services if they are well
placed to provide the required service at
a competitive cost and the Committee is
satisfied that the assignment will not
impair their objectivity.
Overview
Strategic Report
Corporate Governance
Financial Statements
63
“ The systems of internal control
are designed to cover all business,
financial, reputational and legal risks
of the Group and are embedded
within the operations of the Group.”
In accordance with relevant professional
standards, the external auditors have
confirmed their independence as auditors
in a letter to the Directors. Details of fees
paid to the external auditors for both
audit and non-audit services are given in
the note 6(a) to the financial statements.
The non-audit services in the year related
to work performed in relation to payroll,
tax compliance and company secretarial
services to 1Spatial Australia Pty Limited.
Internal control
The Board is responsible for ensuring the
Group has effective and sound systems
of internal controls, which are designed
to manage, but not eliminate, the risk of
failure to achieve business objectives
and provide reasonable, but not absolute,
assurance against material misstatements
and loss. The day-to-day management
and monitoring of the Group’s systems
of internal control is delegated to the
Chief Financial Officer.
The Chief Financial Officer ensures that
the Group’s risk management framework
and control culture are embedded within
the business, the Executive Directors
provide assurance to the Board, through
the Audit Committee, that risks are
monitored, appropriately escalated
and managed within the risk appetite
of the Board.
The systems of internal control are
designed to cover all business, financial,
reputational and legal risks of the Group
and are embedded within the operations
of the Group.
The financial reporting controls in place
are designed to maintain proper
accounting records and provide reasonable
assurance concerning the accuracy and
integrity of financial information reported
both internally and externally.
In accordance with the QCA Code and
best practice guidance for Directors on
internal controls issued by the Financial
Reporting Council, the Board, with the
advice of the Audit Committee, has
reviewed the effectiveness of the
systems of internal control for the year to
31 January 2023. As part of this review,
the Board received assurances from the
Chief Executive Officer and the Chief
Financial Officer of 1Spatial plc that the
Directors’ Responsibilities Statement on
page 70 is founded on a sound system of
risk management and internal controls
and that the systems of internal controls
are operating effectively in all material
respects in relation to reporting financial
risks and the mitigation of material
business risks.
Alternative Performance
Measures (‘APMs’)
The Audit Committee has reviewed the
APMs included in the CFO Review on
page 36 as well as the reconciliation
between the APMs and the closest GAAP
measure included in note 1 to the
consolidated financial statements of the
Group on page 77. The Audit Committee
is satisfied that the reconciliation
between APMs and GAAP measures is
appropriate and that the Board’s
rationale for including the APMs is fair,
balanced and understandable.
Going concern
As disclosed in the going concern section
of note 2 of the consolidated financial
statements, Summary of significant
accounting policies, a cash-flow model for
the period to July 2024 was prepared,
focusing on the impacts of a macro
economic shock (e.g. from the
escalation of the war in Ukraine,
further pandemic restrictions or
further increases in inflation) and the
actions the Board can take to
mitigate those impacts. Sensitivity
analysis was performed on the macro
economic shock stress-tested budget
model, requiring a decline in the Group’s
revenues of more than 14% (with no
changes to spending) before the Group
runs out of resources, given the net funds
in place.
Taking into account the cash flow
projections approved by the Board of
Directors, the Directors have formed a
judgement that, at the time of approving
these financial statements, there is a
reasonable expectation that the Group
has adequate resources and likely income
to continue in operational existence for
the foreseeable future. Thus, they
continue to adopt the going concern
basis of accounting in preparing the
annual financial statements.
Francis Small
CHAIRMAN OF THE AUDIT COMMITTEE
25 April 2023
64
Directors’ Remuneration Report
1Spatial plc Annual Report & Accounts 2023
The Board considers that appropriate remuneration policies are a key
driver of performance and a central element of corporate strategy.
REMUNERATION
COMMITTEE MEMBERSHIP
P Massey (Chair)
A Roberts
F Small
MEETING ATTENDANCE
The Committee meets at least twice a
year and at other times during the year
as agreed between the members of the
Committee. Committee membership
and attendance at scheduled Committee
Meetings during the year is shown below.
Director
P Massey
A Roberts
F Small
Maximum
possible
attendance
Meetings
attended
5
5
5
5
4
5
Annual Statement
Dear Shareholder
Remuneration
Committee Membership
On behalf of the Board, I am pleased to
present the Directors’ Remuneration
Report for the year to 31 January 2023.
As the Company is listed on the
Alternative Investment Market (‘AIM’), we
are required to comply with AIM Rule 19
in respect of remuneration disclosures.
However, we also provide additional
disclosures to those required by AIM Rule
19 on a voluntary basis, in line with AIM
best practice, to enable shareholders to
better understand and consider our
remuneration arrangements. This report
is divided into three sections, these being:
• This Annual Statement, which
summarises the Committee and its
work, remuneration outcomes in
respect of the year just ended and
how the Remuneration Policy will
be operated for the forthcoming
financial year;
• The Remuneration Policy Report,
which summarises the Company’s
Remuneration Policy; and
• The Annual Report on Remuneration,
which discloses how the Remuneration
Policy was implemented in the year to
31 January 2023 in detail and how the
Policy will operate for the year to
31 January 2024.
Senior management attend meetings at
the request of the Committee and recuse
themselves from discussions and decisions
taken by the Remuneration Committee in
respect of their own remuneration.
Committee Responsibilities
The Remuneration Committee
determines and agrees with the Board
the broad policy for the remuneration
of the Group’s employees, as well as
reviewing the ongoing appropriateness
and relevance of the Group’s remuneration
policy, ensuring that it is structured in a
way that aligns reward with performance,
shareholder interests and the long-term
interests of the business.
The key responsibilities of the
Committee are:
• Determining the total individual
remuneration packages, including
pension arrangements, of the
Chairman, Executive Directors
and senior management;
• Reviewing and approving share
incentive plans and non-material
changes to them;
• Approving and determining targets
including the annual discretionary
bonus scheme; and
Overview
Strategic Report
Corporate Governance
Financial Statements
65
As a Committee, we recognise the need
to foster good relations with our
shareholders and encourage open
dialogue. The Chairman of the
Remuneration Committee is available for
discussion with institutional investors
concerning the Company’s approach to
remuneration at any time. We trust you
will find this report to be informative and
look forward to receiving your support at
our forthcoming AGM.
Peter Massey
CHAIRMAN OF THE
REMUNERATION COMMITTEE
25 April 2023
• Reviewing and approving the scope
of any termination payments and
severance terms for Executive
Directors, ensuring that contractual
terms on termination and any payments
made are fair to the individual and the
Company, that failure is not rewarded
and that the duty to mitigate loss is
fully recognised.
The full terms of reference of the
Remuneration Committee are
available on the Company’s website
(www.1spatial.com) and on request
from the Company Secretary.
Advisors to the Committee
FIT Remuneration Consultants LLP was
appointed to provide independent advice
to the Remuneration Committee as and
when required in respect of remuneration
quantum and structure and developments
in governance and best practice more
generally. FIT is a member and signatory
of the Remuneration Consultants Group
and voluntarily operates under the Code
of Conduct in relation to executive
remuneration consulting in the UK,
details of which can be found at
www. remunerationconsultantsgroup.com.
Implementation of the
Remuneration Policy
for FY 2024
The Committee intends to operate the
Remuneration Policy for Executive
Directors as follows:
• The CEO’s base salary will be reviewed
by the Remuneration Committee during
FY24 and remains at a level of £217,000
at 1 February 2023;
• The CFO recently joined the business
and his base salary remains at
£160,000 at 1 February 2023. His salary
will be reviewed by the Remuneration
Committee during FY24;
• Pension and benefit provision
remain unchanged;
• Annual bonus provision for the CEO will
continue to be capped at 100% of salary
based on profit and strategic targets
with a cashflow underpin;
• The Committee will consider the extent
to which share awards will be granted to
Executive Directors during FY24.
66
Directors’ Remuneration Report continued
1Spatial plc Annual Report & Accounts 2023
Directors’ Remuneration policy
The Board considers that appropriate remuneration policies are
a key driver of performance and a central element of corporate
strategy. The Group remuneration policy aims to:
The Group remuneration policy has a strong focus on variable
compensation as the Board believes that the interests of the
business, shareholders and employees are best served by
containing fixed remuneration costs and maximising the proportion
of total remuneration that is directly performance related.
• provide market competitive total compensation;
• motivate, retain and promote individual and corporate
outperformance;
• differentiate on merit and performance;
• emphasise variable performance-driven remuneration;
• ensure adherence to the Group’s Code of Conduct;
• align senior management with shareholders’ interests; and
• deliver clarity, transparency and fairness of process.
Directors’ service contracts/letters
of appointment
The Chief Executive Officer and the Chief Financial Officer have
a service agreement with the Company, which is terminable by
either party on not less than 12 months’ and six months’ notice
respectively. There are no provisions for remuneration payable
on early termination. The Non-Executive Directors serve the
Company under formal letters of appointment that are terminable
on six months’ written notice which sets out their role, obligations
as a Director and the expected time commitment required.
Summary of Directors’ Remuneration Policy
Component
Purpose and link to strategy
Operation
Base salary
Taxable
Benefits
Pension
To provide a competitive
base salary to attract,
motivate and retain
Directors with the
experience and
capabilities to achieve
the strategic aims.
To provide market-
competitive benefits
package.
Maximum
Performance
n/a
n/a
Normally reviewed annually after considering
pay levels at comparably sized listed companies
and sector peers, the performance, role and
responsibility of each Director, market conditions
and the Company’s performance and the level
of pay across the Group as a whole
Market consistent benefits may be provided
to Directors.
n/a
n/a
To provide an appropriate
level of retirement benefit.
Pension provision may be paid as a pension
and/or cash allowance
10% of salary
n/a
Annual bonus To reward performance
against annual targets
which support the strategic
direction of Group.
Long-term
Incentive
Provision
To drive and reward
the achievement of
longer-term objectives
and align management
with shareholders.
Awards are based on annual performance
Conditional shares, nil cost or nominal cost or
market value share options granted under the
2018 1Spatial employee share plan
All-employee
share awards
To align management
with employees and
shareholders.
Any awards granted will be consistent with
prevailing HMRC tax-favoured all-employee
share plans
Non-Executive
Directors
The Committee determines
the Chairman’s fee. Fees
for the Non-Executive
Directors are agreed
by the Chairman and
Chief Executive.
Fees are reviewed annually taking into account
the level of responsibility and relevant experience.
Fees may include a basic fee and additional fees
for further responsibilities. Fees are normally paid
in cash. Travel and other reasonable expenses
incurred in the course of performing their duties
may be reimbursed
Normally
capped at
100% of
salary
Normally
capped at
100% of
salary
Sliding scale
financial and/or
personal/strategic
targets
Performance may
be based on
financial, share
price and/or
strategic metrics
Prevailing
HMRC limits
n/a
n/a
n/a
Overview
Strategic Report
Corporate Governance
Financial Statements
67
Annual Report on Remuneration
Directors’ emoluments and compensation (audited)
Details of individual Executive Directors’ remuneration for those Directors that served during the current year are as follows:
EXECUTIVE DIRECTORS
C Milverton
S Ritchie1
Total Executive Directors
NON-EXECUTIVE DIRECTORS
A Roberts
F Small
P Massey
Total Non-Executive Directors
FORMER DIRECTORS
A Fabian2
Total Board
1. Appointed 19 December 2022
Year
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
Salary
£000
Pension4
£000
Benefits5
£000
Bonus6
£000
Other
£000
Total
£000
217
208
19
–
236
208
81
76
46
41
46
41
173
158
165
160
574
526
22
22
1
–
23
22
–
–
–
–
–
–
–
–
–
–
23
22
15
15
–
–
15
15
–
–
–
–
–
–
–
–
13
13
28
28
–
38
–
–
–
38
–
–
–
–
–
–
–
–
–
15
–
53
–
–
–
–
–
–
–
–
–
–
–
–
–
–
87
87
–
254
283
20
–
274
283
81
76
46
41
46
41
173
158
265
188
712
629
2
Stepped down from the Board on 19 December 2022 and ceased employment on 28 February 2023. Included in the 2023 Other figure of £87,000 is
amounts paid to Mr Fabian on exit from the business. This amount forms part of the strategic, integration and other non-recurring items more fully
described in note 7 to the consolidated financial statements.
Directors’ interests in share awards (audited)
As at 31 January 2023, the Directors held the following share options:
C Milverton
C Milverton
C Milverton
A Fabian
A Fabian
S Ritchie
1 February
2022
Number
1,226,947
769,793
25,000
330,000
25,000
–
2,376,740
Granted
Number
Lapsed
Number
–
–
–
–
–
–
–
(82,421)
–
–
(330,000)
(18,750)
–
(431,171)
31 January
2023
Number
1,144,526
769,793
25,000
–
6,250
–
1,945,569
EMI share
option
Number
494,526
–
–
–
–
–
494,526
Executive
unapproved
share option
Number
650,000
769,793
25,000
–
6,250
–
1,451,043
Exercise
price
pence
0p
46.5p
26.5p
0p
26.5p
n/a
Directors’ share interests (audited)
The beneficial interests of the Directors in shares of the Company as at 31 January 2023 are shown below:
A Roberts
C Milverton
S Ritchie
F Small
P Massey
Ordinary shares
586,190
616,335
–
13,294
91,813
Approved and signed on behalf of the Board
Peter Massey
REMUNERATION COMMITTEE CHAIR
25 April 2023
68
Directors’ Report
1Spatial plc Annual Report & Accounts 2023
The Directors present their Annual
Report on the affairs of the Company
and the Group, together with the audited
consolidated financial statements and
the Independent Auditor’s Report for
the year ended 31 January 2023, in
accordance with UK adopted international
accounting standards and in conformity
with the requirements of the Companies
Act 2006. The information in the
Chairman’s Report, the Corporate
Governance report and the Directors’
Responsibilities Statement form part
of the Directors’ Report.
The Directors’ Report contains certain
forward-looking statements and forecasts
with respect to the financial condition,
results, operations and business of
1Spatial plc that may involve risk and
uncertainty because they relate to events
and depend on circumstances that will
occur in the future. There are a number of
factors that could cause actual results or
developments to differ materially from
those expressed or implied by these
forward-looking statements and
forecasts. Nothing in this Annual Report
to shareholders should be construed as
a profit forecast.
Principal activities
The principal activity of the Group is
the development and distribution of
innovative software solutions along with
associated consultancy and support
related to Location Master Data
Management (‘LMDM’). The principal
activity of the Company is that of a
parent holding company which manages
the Group’s strategic direction and
underlying subsidiaries.
1Spatial plc is a company incorporated in
the United Kingdom. The registered office
of the Company is Tennyson House,
Cambridge Business Park, Cowley Road,
Cambridge, Cambridgeshire, England,
CB4 0WZ.
Details of the business activities during
the year can be found in the Strategic
Report on pages 12 to 57.
Results and dividends
The results for the Group for the year and
the Group and Company’s financial
position at the end of the year are shown
in the attached financial statements.
The results for 2022 are as restated
due to a prior year adjustment to
recognise a deferred tax asset.
The Directors do not recommend the
payment of a dividend (FY 2022: £nil).
Business review and future
developments
The requirements of the business review
have been considered within the
Chairman’s Report on pages 12 to 13 and
the Strategic Report on pages 12 to 57.
Principal risks and
uncertainties
For further details on principal risks and
uncertainties, refer to pages 52 to 55.
Financial instruments
Financial risk management
objectives and policies
During the year the Group’s principal
financial instruments were bank loans,
trade receivables and cash. The main
purpose of these financial instruments is
to provide finance for the Group’s
operations. The Group has various other
financial instruments such as trade
receivables and trade payables which
arise directly from its operations.
The main risks arising from the Group’s
financial instruments have been liquidity
risk, interest rate risk, credit risk, and
capital risk. The Board reviews and agrees
policies for managing each of these risks
and they are summarised below.
Liquidity risk
The Group’s finance department’s
primary objective is to ensure the Group
maintains sufficient funds to support the
ongoing strategic and trading activities of
the Group. Detailed forecasting is carried
out at local level in the operating
companies of the Group and this is
combined into a Group cash flow forecast.
The Group forecasts are reviewed closely
to ensure that sufficient headroom in
available funding is in place.
Interest rate risk
The Group’s income and operating cash
flows are substantially independent of
changes in market interest rates. Bank
loan interest is charged on a fixed rate
basis. Given the magnitude of the bank
loans and low interest rates that range
between 0% and 3.4% (with a weighted-
average interest rate of 2.3% at the
year-end), the Board does not consider
it appropriate to hedge the interest
rate risk.
Credit risk
The Group trades only with recognised,
creditworthy third parties and
independent credit checks and credit
limits are managed by the trading
entities. Credit limits can only be
exceeded if authorised by the 1Spatial
plc Board. Receivable balances are
monitored on an ongoing basis with the
result that the Group’s exposure to bad
debts is not significant, especially given
past payment history of longstanding
customers. There are no significant
concentrations of credit risk within
the Group.
Credit risk also arises from cash and cash
equivalents with banks and financial
institutions. For banks and financial
institutions, only independently rated
parties with a minimum rating of “A”
are used for significant cash deposits.
Capital risk management
The Group’s objectives when managing
capital are to safeguard the Group’s
ability to continue as a going concern in
order to provide returns for shareholders
and benefits for other stakeholders and
to maintain an optimal capital structure
to reduce the cost of capital within an
acceptable level of risk. In order to
maintain or adjust the capital structure,
the Group may issue new shares, raise
finance through increasing debt or sell
assets/businesses to reduce debt. The
Group monitors its capital risk by
ensuring the level of debt and gearing is
reasonable based on the projected cash
flows and related risks.
The capital structure of the Group at
31 January 2023 consists of cash
and cash equivalents of £5.1 million
(2022: £5.6 million), bank borrowings
of £2.0 million (2022: £2.4 million), and
equity attributable to shareholders of
1Spatial plc of £16.3 million (2022:
£15.1 million).
Research and development
The Group performs research and
development activities as described
within the Strategic Report on pages
12 to 57. The Group expenses research
activities to the statement of
comprehensive income and capitalises
development activities should the cost
meet the relevant criteria. During the
year, £3.8 million was capitalised
(2022: £2.4 million), £2.4 million
(2022: £1.7 million) was expensed and
there were no impairments (2022: nil).
Overview
Strategic Report
Corporate Governance
Financial Statements
69
Employees
The Group places considerable value on
the involvement of its employees and has
continued its practice of keeping them
informed of matters affecting them as
employees and the various factors
affecting the performance of the Group.
This has been of even greater importance
during the last two years with remote
working and other restrictions due to
COVID-19, with the Group implementing
increased frequency of team meetings,
line manager one-to-one meetings and
Group-wide communications.
The Directors recognise that continued
and sustained improvement in the
performance of the Group depends on its
ability to attract, motivate and retain
employees of the highest calibre; and to
this end, the Group issued new share
options to certain key management and
employees under the employee share
plan in 2020, as part of the three-year
plan. Furthermore, the Directors believe
that the Group’s ability to sustain a
competitive advantage over the long
term depends in a large part on ensuring
that all employees contribute to the
maximum of their potential. The Group is
committed to improving the performance
of all employees through development
and training.
The Group is an equal opportunity
employer. The Group’s policies seek to
promote an environment free from
discrimination, harassment and
victimisation and to ensure that no
employee or applicant is treated less
favourably on the grounds of gender,
marital status, age, race, colour,
nationality or national origin, disability or
sexual orientation, or is disadvantaged by
conditions or requirements that cannot
objectively be justified. Entry into, and
progression within the Group, is solely
determined based on work criteria and
individual merit.
The Group continues to give full and
fair consideration to applications for
employment made by disabled persons,
having regard to their respective aptitudes
and abilities. The policy includes, where
practicable, the continued employment
of those who may become disabled during
their employment and the provision of
training and career development and
promotion, where appropriate.
The Group holds regular meetings with
employees to inform them of the
development of the business and to
provide them with information on matters
of concern to them as employees.
Consultation with employees has
continued at all levels, with the aim of
ensuring that their views are taken in to
account when decisions are made that
are likely to affect their interests.
Changes in share capital
Details of movements in share capital
are set out in note 20 to the financial
statements.
Directors
The Directors who served throughout the
year and up to the date of approval of the
financial statements, unless otherwise
stated, were as follows:
Name
Age Position
Date of Appointment
Date of Resignation
A Roberts
70
Non-Executive
Chairman
19 September 2016
C Milverton 48
Chief Executive Officer 9 October 2017
A Fabian
61
Chief Financial Officer
16 June 2020
19 December 2022
F Small
65 Non-Executive Director
1 August 2017
P Massey
60 Non-Executive Director
10 July 2018
S Ritchie
43
Chief Financial Officer
19 December 2022
Details of the current Directors’
experience and expertise can be found on
the Company’s website www.1spatial.com
which does not form part of this report.
Directors’ interests
Details of the share interests of the
Directors, their service contracts and
terms of appointment are shown in the
Remuneration Report.
Directors’ indemnities
and insurance
As permitted by the Articles of
Association, the Directors have the
benefit of an indemnity which is a
Name
Columbia Threadneedle Investments
Canaccord Genuity Wealth Management
Azini Capital Partners
J O Hambro Capital Management
BGF Investment Management
Octopus Investment Nominees
Herald Investment Management
qualifying third-party indemnity provision
as defined by Section 234 of the
Companies Act 2006. The indemnity was
in force throughout the last financial year
and is currently in force. The Company
also purchased and maintained
throughout the financial year Directors’
and Officers’ liability insurance in respect
of itself and its Directors and officers.
Substantial interests
The Directors have been notified of the
following substantial shareholdings in
excess of 3% of the voting share capital
of the Company as at 4 April 2023:
Number of shares
Percentage of issued
share capital
22,097,231
18,717,922
13,709,535
9,000,000
6,930,100
4,156,943
3,950,000
20.00%
16.91%
12.41%
8.15%
6.27%
3.76%
3.58%
Except as referred to above, the Directors are not aware of any person who was
interested in 3% or more of the issued share capital of the Company or could directly
or indirectly, jointly or severally, exercise control.
Acquisition of the Company’s own shares
The Company did not acquire any of its shares during the year ended 31 January 2023
(FY 2022: nil).
Independent auditors
A resolution to reappoint BDO LLP as the Company’s auditors and to authorise the
Board to determine the auditors’ remuneration will be proposed at the 2023 Annual
General Meeting.
70
Directors’ Responsibilities Statement
1Spatial plc Annual Report & Accounts 2023
The Directors are responsible for preparing the Annual Report and the
financial statements in accordance with applicable law and regulation.
Company law requires the Directors to
prepare financial statements for each
financial year. Under that law the
Directors have prepared the Group
financial statements in accordance with
UK-adopted international accounting
standards and in conformity with the
requirements of the Companies Act 2006
and Company financial statements in
accordance with United Kingdom
Generally Accepted Accounting Practice
(United Kingdom Accounting Standards,
comprising FRS 101 “Reduced Disclosure
Framework”, and applicable law). Under
company law the Directors must not
approve the financial statements unless
they are satisfied that they give a true
and fair view of the state of affairs of the
Group and Company and of the profit or
loss of the Group and Company for that
period. In preparing the financial
statements, the Directors are required to:
• select suitable accounting policies and
then apply them consistently;
• state whether applicable IFRSs have
been followed for the Group financial
statements and United Kingdom
Accounting Standards, comprising
FRS 101, have been followed for the
Company financial statements,
subject to any material departures
disclosed and explained in the
financial statements;
• make judgements and accounting
estimates that are reasonable and
prudent; and
• prepare the financial statements on
the going concern basis unless it is
inappropriate to presume that the
Group and Company will continue
in business.
The Directors are also responsible for
safeguarding the assets of the Group
and Company and hence for taking
reasonable steps for the prevention and
detection of fraud and other irregularities.
The Directors are responsible for keeping
adequate accounting records that are
sufficient to show and explain the Group
and Company’s transactions and disclose
with reasonable accuracy at any time the
financial position of the Group and
Company and enable them to ensure
that the financial statements comply
with the Companies Act 2006.
The Directors are responsible for the
maintenance and integrity of the
Company’s financial statements
published on the ultimate parent
company’s website. Legislation in
the United Kingdom governing the
preparation and dissemination of
financial statements may differ from
legislation in other jurisdictions.
The Directors consider that the Annual
Report and financial statements,
taken as a whole, is fair, balanced and
understandable and provides the
information necessary for shareholders
to assess the Group and Company’s
performance, business model
and strategy.
Each of the Directors, whose names and
functions are listed in the Directors’
Report confirm that, to the best of
their knowledge:
• the Group financial statements, which
have been prepared in accordance with
international accounting standards in
conformity with the requirements of the
Companies Act 2006, give a true and fair
view of the assets, liabilities, financial
position and loss of the Group; and
• the Directors’ Report includes a fair
review of the development and
performance of the business and the
position of the Group and Company,
together with a description of the
principal risks and uncertainties that
it faces.
Statement of disclosure
of information to auditors
In the case of each Director in office at
the date the Directors’ Report is approved:
• so far as the Director is aware, there is
no relevant audit information of which
the Group and Company’s auditors are
unaware; and
• they have taken all the steps that they
ought to have taken as a Director in
order to make themselves aware of any
relevant audit information and to
establish that the Group and Company’s
auditors are aware of that information.
Signed by order of the Board
Susan Wallace
COMPANY SECRETARY
• the Company financial statements,
25 April 2023
which have been prepared in
accordance with United Kingdom
Generally Accepted Accounting Practice
(United Kingdom Accounting Standards,
comprising FRS 101 “Reduced
Disclosure Framework”, and applicable
law), give a true and fair view of the
assets, liabilities, financial position
and loss of the Company;
Registered Office:
Tennyson House
Cambridge Business Park
Cowley Road
Cambridge
CB4 0WZ
Overview
Strategic Report
Corporate Governance
Financial Statements
71
Independent Auditor’s Report
to the members of 1Spatial plc
Opinion on the financial statements
In our opinion:
• the financial statements give a true and fair view of the state of the Group’s and of the Parent Company’s affairs as at 31 January
2023 and of the Group’s profit for the year then ended;
• the Group financial statements have been properly prepared in accordance with UK adopted international accounting standards;
• the Parent Company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted
Accounting Practice; and
• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006
We have audited the financial statements of 1Spatial plc (the ‘Parent Company’) and its subsidiaries (the ‘Group’) for the year ended
31 January 2023 which comprise the consolidated statement of comprehensive income, the consolidated and company statements of
financial position, the consolidated and company statements of changes in equity, the consolidated statement of cash flows and the
notes to the financial statements, including a summary of significant accounting policies.
The financial reporting framework that has been applied in the preparation of the Group financial statements is applicable law and UK
adopted international accounting standards. The financial reporting framework that has been applied in the preparation of the Parent
Company financial statements is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 101
Reduced Disclosure Framework (United Kingdom Generally Accepted Accounting Practice)
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities
under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our
report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We remain independent of the Group and the Parent Company in accordance with the ethical requirements that are relevant to our
audit of the financial statements in the UK, including the FRC’s Ethical Standard as applied to listed entities, and we have fulfilled our
other ethical responsibilities in accordance with these requirements.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate. Our evaluation of the Directors’ assessment of the Group and the Parent
Company’s ability to continue to adopt the going concern basis of accounting included;
• Obtained an understanding of the director’s process for producing cash forecasting models, including the inputs and assumptions
used in those models.
• Understanding and challenging the forecasts for the Group including underlining assumptions in the forecasts. This included
comparing forecast revenue and costs with historical trends and historic forecasts with actual results to consider the accuracy
of the directors’ forecasting. We also assessed the forecast revenue against the Group’s revenue pipeline.
• Performing analysis of changes in key assumptions including a reasonably possible (but not unrealistic) reduction in forecast revenue
to understand the sensitivity in the cash flow forecasts.
• Reviewing the bank loan documents to understand the terms and repayment profile and comparing these to the Group’s forecasts.
• Reviewing the terms of the revolving credit facility to assess the availability thereof during the going concern period and terms
attached to utilising the facility.
• Review of the post year-end cash position to assess any potential unexpected deterioration in balances held.
• Consideration of the potential impacts of the recent issues facing Silicon Valley Bank on going concern.
• A review of the appropriateness of the Directors’ statements in note 2 of the financial statements as to whether it discloses all the
relevant events and assumptions made to adopt the going concern basis of accounting in preparation of the financial statements.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the Group and the Parent Company’s ability to continue as a going concern
for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections
of this report.
72
Independent Auditor’s Report continued
to the members of 1Spatial plc
1Spatial plc Annual Report & Accounts 2023
Overview
Coverage
61% (2022:55%) of Group profit before tax
Key audit matters (KAM)
85% (2022:85%) of Group revenue
82% (2022:80%) of Group total assets
Revenue recognition
Capitalisation of development costs*
Impairment of goodwill and other intangible assets*
31 January 2023
31 January 2022
* Capitalisation of the development costs and Impairment of goodwill and other intangible assets were no longer considered
to be KAMs as they were not assessed to be significant risks in the current year. The methodology used by management to
account for these was deemed appropriate and we did not anticipate material error.
Materiality
Group financial statements as a whole
£300,000 (2022: £270,000) based on 1% of revenue (2022: 1% of revenue).
An overview of the scope of our audit
Our Group audit was scoped by obtaining an understanding of the Group and its environment, including the Group’s system of internal
control, and assessing the risks of material misstatement in the financial statements. We also addressed the risk of management
override of internal controls, including assessing whether there was evidence of bias by the Directors that may have represented a risk
of material misstatement.
Based on our assessment of the Group, we determined there to be three significant components, 1Spatial plc, 1Spatial Group Limited
and 1Spatial France S.A.S., which were subject to full scope audits. The Group audit team performed the audits of 1Spatial plc and
1Spatial Group Limited. We instructed BDO’s member firm in France as component auditor, to perform a full scope audit of the financial
information of 1Spatial France S.A.S..
In addition, the Group audit team performed the following:
• Specified audit procedures were performed by the Group audit team over the revenue, deferred revenue, trade receivables and
accrued revenue for 1Spatial Inc., a non-significant component.
The financial information of the remaining non-significant components were subject to analytical review procedures performed by the
Group audit team. The work above, together with additional procedures performed at Group level over the consolidation process gave
us the evidence we needed for our opinion on the financial statements as a whole.
Our involvement with component auditors
For the work performed by component auditors, we determined the level of involvement needed in order to be able to conclude
whether sufficient appropriate audit evidence has been obtained as a basis for our opinion on the Group financial statements as
a whole. Our involvement with the component auditor included the following:
• Group instructions were issued to the component auditor detailing risks identified for the component and related audit procedures
to be performed for the financial statement areas together with the allocated component materiality threshold.
• We conducted numerous video and conference calls throughout the audit period to ensure we obtained a full understanding of the
operational activities of the component.
• We also attended the audit planning, update and clearance meetings with the component auditor.
• We performed a detailed review of the submitted reporting deliverables and reviewed the work undertaken by our component auditor
by reviewing their working papers, and findings.
Overview
Strategic Report
Corporate Governance
Financial Statements
73
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud)
that we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit,
and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements
as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key audit matter
Revenue Recognition
Refer to Note 2 and Note 5
The Group derives revenue from the sale
of products and rendering of services
to customers.
These products and services are sold either
individually or in software and service
bundles and revenue is recognised at either
a point in time or over time, depending on
whether the performance obligations are
distinct and when the performance
obligation is satisfied.
We considered the significant audit
risks arising from recognition of revenue
as follows:
1)
Services revenue is recognised based
upon the stage of completion of the
service project. There is a risk the
stage of completion which is based
on a percentage of completion basis
for services projects open at the
year-end is incorrect or subject to
management override.
2) Software revenue for right to use and
perpetual licences is recognised at a
point in time. There is a risk due to fraud
or error that revenue on such licences is
not recognised in the correct period
based on when the performance
obligation is satisfied.
For these reasons, revenue recognition was
determined to be a key audit matter.
How the scope of our audit addressed the key
audit matter
Our audit procedures included the
following:
• We obtained an understanding of the key
revenue processes from inception to
disclosure in the financial statements.
• We assessed whether group’s revenue
recognition policy is in accordance with
the applicable accounting standards.
• For a sample of services revenue
contracts open at year end, we assessed
the percentage of completion based on
timesheet information and total expected
hours for the service delivery.
We recalculated revenue recognised
based on the percentage of completion
of the fair value of the services revenue
per the contract with the customer.
We recalculated accrued and deferred
income for such contracts based on
revenue recognised versus invoice raised.
• For a sample of licence revenue
recognised at a point in time around year
end, we agreed to customer contract,
invoice, and evidence of delivery of the
performance obligation by agreeing to
support for delivery of licence keys to
check revenue was recognised for the
correct licence amount and in the
correct period.
• We recalculated a sample of deferred
revenue balances as at the year end
to confirm accuracy of the revenue
recognition.
Key observations:
Based on the work performed we consider
that the Group’s revenue recognition
accounting policy is appropriate, and that
revenue has been recognised in accordance
with the Group’s revenue policy.
74
Independent Auditor’s Report continued
to the members of 1Spatial plc
1Spatial plc Annual Report & Accounts 2023
Our application of materiality
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements.
We consider materiality to be the magnitude by which misstatements, including omissions, could influence the economic decisions
of reasonable users that are taken on the basis of the financial statements.
In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower materiality
level, performance materiality, to determine the extent of testing needed. Importantly, misstatements below these levels will not
necessarily be evaluated as immaterial as we also take account of the nature of identified misstatements, and the particular
circumstances of their occurrence, when evaluating their effect on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole and performance materiality
as follows:
Group financial statements
Parent company financial statements
£
£
31 January 2023
31 January 2022
31 January 2023
31 January 2022
Materiality
300,000
270,000
106,000
175,000
Basis for determining materiality 1% of revenue
Rationale for the benchmark
applied
Revenue was considered to be the most
appropriate benchmark as it is a consistent
indicator of the performance of the Group for
users of the financial statements and given the
Directors’ current focus on revenue growth.
35% of Group
materiality
65% of Group
materiality
The materiality of the Parent Company was
capped at a percentage of Group materiality to
respond to aggregation risk.
Performance materiality
225,000
202,000
79,000
131,000
Basis for determining
performance materiality
31 January 2023: 75% (31 January 2022: 75%) of materiality based on our understanding of the
Group, risk assessment procedures performed, and the nature and extent of misstatements
identified in previous audits and the expectations in relation to misstatements for the current year.
Component materiality
We set materiality for each component of the Group based on a percentage of between 35% and 90% (2022: 65% and 68%) of Group
materiality dependent on the size and our assessment of the risk of material misstatement of that component. Component materiality
ranged from £106,000 to £270,000, (2022: £175,000 to £184,000). In the audit of each component, we further applied performance
materiality levels of 75% (2022: 75%) of the component materiality to our testing to ensure that the risk of errors exceeding
component materiality was appropriately mitigated.
Reporting threshold
We agreed with the Audit Committee that we would report to them all individual audit differences in excess of £9,000 (2022: £8,000).
We also agreed to report differences below this threshold that, in our view, warranted reporting on qualitative grounds.
Other information
The directors are responsible for the other information. The other information comprises the information included in the Annual Report
other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other
information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion
thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially
misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this
gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude
that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Overview
Strategic Report
Corporate Governance
Financial Statements
75
Other Companies Act 2006 reporting
Based on the responsibilities described below and our work performed during the course of the audit, we are required by the
Companies Act 2006 and ISAs (UK) to report on certain opinions and matters as described below.
Strategic report and
Directors’ report
Matters on which we
are required to report
by exception
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the Strategic report and the Directors’ report for the financial year for which the
financial statements are prepared is consistent with the financial statements; and
• the Strategic report and the Directors’ report have been prepared in accordance with applicable
legal requirements.
In the light of the knowledge and understanding of the Group and Parent Company and its environment
obtained in the course of the audit, we have not identified material misstatements in the strategic report
or the Directors’ report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006
requires us to report to you if, in our opinion:
• adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit
have not been received from branches not visited by us; or
• the Parent Company financial statements are not in agreement with the accounting records and returns; or
• certain disclosures of Directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Responsibilities of Directors
As explained more fully in the Directors’ responsibilities statement, the Directors are responsible for the preparation of the financial
statements and for being satisfied that they give a true and fair view, and for such internal control as the Directors determine is
necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Group’s and the Parent Company’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the Directors either intend to liquidate the Group or the Parent Company or to cease operations, or have no realistic
alternative but to do so.
76
Independent Auditor’s Report continued
to the members of 1Spatial plc
1Spatial plc Annual Report & Accounts 2023
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a
high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Extent to which the audit was capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities, including fraud is detailed below:
• We obtained an understanding of the legal and regulatory frameworks that are applicable to the Group and its components and
determined that the most significant laws and regulations which are directly relevant to specific assertions in the financial statements
are those that relate to the accounting frameworks, Companies Act 2006 and rules of the London Stock Exchange for companies
trading securities on AIM, data privacy and the relevant tax compliance regulations.
• We understood how the Group is complying with those frameworks by making enquiries of management and those responsible for
legal and compliance procedures. We corroborated our enquiries through our review of board minutes and papers provided to the
Audit Committee.
• We also reviewed the Group’s tax computations and returns and financial statements disclosures against the requirements of the
relevant tax legislation and applicable accounting frameworks respectively.
• We assessed the susceptibility of the Group’s financial statements to material misstatement, including how fraud might occur,
by meeting with management to understand where they considered there was a susceptibility to fraud.
• Our audit planning identified fraud risks in relation to management override of control and risk of fraud in revenue recognition
which has been assessed as a Key Audit Matter above.
• We obtained an understanding of the processes and controls that the Group has established to address risks identified, or that
otherwise prevent, deter and detect fraud and how management monitors the processes and controls.
• We communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and component
auditors and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
• In response to the risk of management override of control, our procedures included journal entry testing, with a focus on large or
unusual transactions based on our knowledge of the business which where agreed to supporting documentation where applicable;
and enquiries with Group Management and those charged with governance regarding an instances of known or suspected fraud
during the year.
Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that the risk
of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may
involve deliberate concealment by, for example, forgery, misrepresentations or through collusion. There are inherent limitations in the
audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions
reflected in the financial statements, the less likely we are to become aware of it.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities.
This description forms part of our auditor’s report.
Use of our report
This report is made solely to the Parent Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act
2006. Our audit work has been undertaken so that we might state to the Parent Company’s members those matters we are required
to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Parent Company and the Parent Company’s members as a body, for our audit work, for this
report, or for the opinions we have formed.
Leighton Thomas (Senior Statutory Auditor)
FOR AND ON BEHALF OF BDO LLP, STATUTORY AUDITOR
London, UK
25 April 2023
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
Overview
Strategic Report
Corporate Governance
Financial Statements
77
Consolidated Statement of Comprehensive Income
For the year ended 31 January 2023
Revenue
Cost of sales
Gross profit
Administrative expenses
Adjusted EBITDA
Less: depreciation
Less: depreciation on right of use asset
Less: amortisation and impairment of intangible assets
Less: share-based payment charge
Less: strategic, integration and other non-recurring items
Operating profit
Finance income
Finance costs
Net finance cost
Profit before tax
Income tax credit
Profit for the year
Profit for the year attributable to:
Equity shareholders of the Parent
Other comprehensive income
Items that may subsequently be reclassified to profit or loss:
Actuarial gains arising on defined benefit pension, net of tax
Exchange differences arising on translation of net assets of foreign operations
Other comprehensive income/(loss) for the year, net of tax
Total comprehensive gain for the year
Total comprehensive gain attributable to the equity shareholders
of the Parent
Earnings per ordinary share attributable to the owners of the Parent during
the year (expressed in pence per ordinary share):
Basic earnings per share
Diluted earnings per share
Note
5
11
16
10
22
7
6(a)
8
8
8
9
18
23
23
2023
£’000
30,002
(14,504)
15,498
(14,244)
1,254
4,997
(253)
(1,056)
(2,048)
(192)
(194)
1,254
19
(229)
(210)
1,044
14
1,058
1,058
1,058
162
415
577
1,635
1,635
1.0
0.9
2022
(restated)*
£’000
27,027
(13,078)
13,949
(13,534)
415
4,182
(198)
(989)
(2,254)
(326)
–
415
14
(209)
(195)
220
163
383
383
383
113
(246)
(133)
250
250
0.3
0.3
*
The 2022 Consolidated statement of comprehensive income has been restated for the recognition of deferred tax (see note 26).
78
Consolidated Statement of Financial Position
As at 31 January 2023
1Spatial plc Annual Report & Accounts 2023
Assets
Non-current assets
Intangible assets including goodwill
Property, plant and equipment
Right of use assets
Total non-current assets
Current assets
Trade and other receivables
Current income tax receivable
Cash and cash equivalents
Total current assets
Total assets
Liabilities
Current liabilities
Bank borrowings
Trade and other payables
Lease liabilities
Deferred consideration
Total current liabilities
Non-current liabilities
Bank borrowings
Lease liabilities
Deferred consideration
Defined benefit pension obligation
Deferred tax
Total non-current liabilities
Total liabilities
Net assets
Share capital and reserves
Share capital
Share premium account
Own shares held
Equity-settled employee benefits reserve
Merger reserve
Reverse acquisition reserve
Currency translation reserve
Accumulated losses
Purchase of non-controlling interest reserve
Total equity
Note
10
11
16
12
13
14
15
16
17
14
16
17
18
19
20
20
20
22
21
21
21
21
2023
£’000
17,408
302
1,609
19,319
14,151
35
5,036
19,222
38,541
(660)
(15,797)
(608)
(28)
(17,093)
(1,322)
(1,077)
–
(1,154)
(544)
(4,097)
(21,190)
17,351
20,155
30,488
(139)
4,122
16,465
(11,584)
501
(42,180)
(477)
17,351
2022
(restated)**
£’000
15,003
350
1,747
17,100
12,271
124
5,623
18,018
35,118
(531)
(13,284)
(748)
(340)
(14,903)
(1,861)
(976)
(27)
(1,276)
(565)
(4,705)
(19,608)
15,510
20,150
30,479
(303)
3,930
16,465
(11,584)
86
(43,236)
(477)
15,510
** The 2022 Consolidated statement of financial position has been restated for the recognition of deferred tax (see note 26).
The financial statements on pages 77 to 113 were approved and authorised for issue by the Board on 25 April 2023 and signed on its behalf by:
Stuart Ritchie
DIRECTOR
25 April 2023
Registered company number (England): 5429800
Overview
Strategic Report
Corporate Governance
Financial Statements
79
Consolidated Statement of Changes in Equity
For the year ended 31 January 2023
Share
capital
Share
premium
account
Own
shares
held
Equity-
settled
employee
benefits
reserve
Merger
reserve
Reverse
acquisition
reserve
Currency
translation
reserve
Purchase
of
non-
controlling
interest
reserve
Accumulated
losses
Total
equity
20,150 30,479
(303)
3,604 16,465
(11,584)
332
(477)
(43,931) 14,735
–
–
–
–
–
–
–
–
199
199
20,150 30,479
(303)
3,604 16,465
(11,584)
332
(477)
(43,732) 14,934
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
326
326
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(246)
(246)
(246)
–
–
–
–
–
–
–
–
–
383
383
113
113
–
(246)
113
(133)
496
250
–
–
326
326
20,150 30,479
(303)
3,930 16,465
(11,584)
86
(477)
(43,236)
15,510
–
–
–
–
–
–
5
–
5
–
–
–
–
–
–
9
–
9
–
–
–
–
–
–
–
–
–
–
–
–
164
164
192
–
–
192
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
415
415
415
–
–
–
–
–
–
–
–
–
–
–
–
–
1,058
1,058
162
162
–
415
162
577
1,220
1,635
–
–
(164)
192
14
–
(164)
206
20,155 30,488
(139)
4,122 16,465
(11,584)
501
(477)
(42,180)
17,351
£’000
Balance at
31 January 2021
as previously reported
Prior year adjustment
(see note 27)
Balance at 31 January
2021 as restated
Comprehensive profit
Profit for the year
Other comprehensive loss
Actuarial gains arising on
defined benefit pension
Exchange differences on
translating foreign
operations
Total other comprehensive
(loss)/income
Total comprehensive
(loss)/income
Transactions with owners
Recognition of share-based
payment expense
Balance at 31 January 2022
as restated
Comprehensive profit
Profit for the year
Other comprehensive
income
Actuarial gains arising on
defined benefit pension
Exchange differences on
translating foreign
operations
Total other comprehensive
income
Total comprehensive
income
Transactions with owners
Recognition of share-based
payment expense
Issue of share capital
Transfer of treasury shares
Balance at
31 January 2023
80
Consolidated Statement of Cash Flows
For the year ended 31 January 2023
1Spatial plc Annual Report & Accounts 2023
Cash flows from operating activities
Cash generated from operations
Interest received
Interest paid
Tax paid
Tax received
Net cash generated from operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
Expenditure on development costs and other intangibles
Net cash used in investing activities
Cash flows from financing activities
Proceeds from loans and borrowings
Repayment of loans and borrowings
Repayment of lease obligations
Payment of deferred consideration on acquisition
Net proceeds from share issue
Net cash used in financing activities
Note
13 (a)
11
10
16
17
Net decrease in cash and cash equivalents
Cash and cash equivalents at start of year
Effects of foreign exchange on cash and cash equivalents
Cash and cash equivalents at end of year
13 (b)
2023
£’000
5,352
19
(229)
(–)
179
5,321
(163)
(3,854)
(4,017)
500
(1,043)
(1,099)
(352)
14
(1,980)
(676)
5,623
89
5,036
2022
£’000
2,497
12
(146)
(24)
200
2,539
(164)
(2,449)
(2,613)
–
(423)
(1,088)
–
–
(1,511)
(1,585)
7,278
(70)
5,623
Overview
Strategic Report
Corporate Governance
Financial Statements
81
Notes to the Financial Statements
For the year ended 31 January 2023
1. General information
The consolidated financial statements for the year ended 31 January 2023 comprise 1Spatial plc (‘the Company’) and its subsidiaries
(together ‘the Group’).
The principal activities of the Company and its subsidiaries are described within the Directors’ report on page 68.
The Company is a public limited company whose shares are listed on the AIM London Stock Exchange and is incorporated and
domiciled in the United Kingdom. The address of its registered office is Tennyson House, Cambridge Business Park, Cowley Road,
Cambridge, Cambridgeshire, England, CB4 0WZ.
2. Summary of significant accounting policies
The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies
have been applied consistently throughout the year except where otherwise indicated.
Basis of preparation
The consolidated financial statements of 1Spatial plc have 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 areas involving a higher degree of
judgement and complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are
disclosed in note 4.
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 £16m (FY 2022: approximately £13m) driven
primarily by term licence sales in the US. Additionally, the value of committed service orders going into FY 2024 remains strong at
approximately £10m. 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 £3m and an expiry date of 22 June 2025.
The Group started the current financial year on 1 February 2023 with cash of £5.0m and debt of £1.9m, giving net funds (before lease
liabilities) of £3.1m. Including the new RCF facility, the Group’s liquidity is approximately £6.1m.
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.
Audit exemption
Subsidiary undertaking 1Spatial Holdings Limited has claimed the audit exemption under Companies Act 2006 Section 479A with
respect to the year ended 31 January 2023. The Group parent company, 1Spatial plc, has given a statement of guarantee under
Companies Act 2006 Section 479C, whereby 1Spatial plc will guarantee all outstanding liabilities to which the subsidiary company is
subject as at 31 January 2023. In addition, Aon Spásúil Limited has claimed the audit exemption under Irish Companies Act 2014
section 357 with respect to the year ended 31 January 2023. The Group parent company, 1Spatial plc has given a statement of
guarantee whereby it will guarantee all outstanding liabilities to which Aon Spásúil Limited is subject to at 31 January 2023.
82
Notes to the Financial Statements continued
For the year ended 31 January 2023
1Spatial plc Annual Report & Accounts 2023
2. Summary of significant accounting policies continued
Adoption of new and revised International Financial Reporting Standards (IFRSs)
The accounting policies adopted in these consolidated financial statements are consistent with those of the annual financial statements
for the year ended 31 January 2022.
(i) New standards, amendments and interpretations affecting amounts reported in the financial statements
The following amendments are effective for the period beginning 1 February 2022:
• Onerous Contracts – Cost of Fulfilling a Contract (Amendments to IAS 37);
• Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16);
• Annual Improvements to IFRS Standards 2018-2020 (Amendments to IFRS 1, IFRS 9, FRS 16 and IAS 41); and
• References to Conceptual Framework (Amendments to IFRS 3).
(ii) New standards, amendments and interpretations issued but not effective for the financial year beginning 1 February
2023 and not adopted early
There are a number of standards, amendments to standards, and interpretations which have been issued by the IASB that are effective
in future accounting periods that the Group has decided not to adopt early. The following amendments are effective for the period
beginning 1 February 2023:
• Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2);
• Definition of Accounting Estimates (Amendments to IAS 8); and
• Deferred Tax Related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12).
The following amendments are effective for the period beginning 1 February 2024:
• IFRS 16 Leases (Amendment – Liability in a Sale and Leaseback)
• IAS 1 Presentation of Financial Statements (Amendment – Classification of Liabilities as Current or Non-current)
• IAS 1 Presentation of Financial Statements (Amendment – Non-current Liabilities with Covenants)
These standards are not expected to have a material impact on the entity in the current or future reporting periods and on foreseeable
future transactions.
Basis of consolidation
The results and net assets of all subsidiary undertakings acquired are included in the statement of comprehensive income and
consolidated statement of financial position using the purchase method of accounting from the effective date at which control is
obtained by the Group. Subsidiary undertakings cease to be consolidated from the date at which the Group no longer retains control, or
from the date that the subsidiary is classified within disposal groups held for sale. The Group controls an entity when the Group is
exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its
power over the entity. All intercompany balances and transactions are eliminated in full. Accounting policies of subsidiaries are
changed where necessary to ensure consistent policies across the Group.
Fair value measurements
The disclosures in IFRS 13 must be made separately for each class of assets and liabilities. Appropriate classes of assets and liabilities
are determined by considering the nature, characteristics and risks of the asset or liability, and the level of the fair value hierarchy
within which the fair value measurement is categorised.
Business combinations
Acquisitions of subsidiaries and businesses are accounted for using the acquisition method. The cost of an acquisition is measured as
the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange. Where there is
deferred consideration payable in cash, the amount is discounted to its present value. The fair value of deferred cash consideration is
included within the Group’s financial statements as a liability.
Where there is deferred consideration payable in shares (and it is a fixed number of shares), the consideration is accounted for as equity to
be issued. Where there is deferred consideration payable in shares (and it is a fixed value payable in shares), the amount is discounted to
its present value and the fair value of deferred consideration is included within the Group’s financial statements as a liability.
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their
fair values at the acquisition date. The excess of the cost of acquisition over the fair value of the Group’s share of the identifiable net
assets acquired is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired,
the difference is recognised directly in the statement of comprehensive income. Acquisition related costs are expensed as incurred.
Overview
Strategic Report
Corporate Governance
Financial Statements
83
Transactions with non-controlling interests that do not result in loss of control are accounted for as equity transactions – that is as
transactions with owners in their capacity as owners. The difference between the fair value of any consideration paid and the relevant
share acquired of the carrying value of net assets of the subsidiary is regarded as equity.
Where a business combination is achieved in a series of transactions, the business combination’s cost is the aggregate of the fair values
of the assets given, liabilities assumed and equity instruments issued by the acquirer at the date of each transaction in the series. The
previously held interest is re-measured to fair value at the acquisition date, and a gain or loss is recognised in the statement of
comprehensive income.
Disposal of subsidiaries
The date of disposal of a subsidiary is the date on which control passes. The consolidated statement of comprehensive income includes
the results of a subsidiary up to the date of disposal; the gain or loss on disposal is the difference between (a) the carrying amount of
the net assets plus any attributable goodwill and amounts accumulated in other comprehensive income; and (b) the proceeds of sale.
Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker.
The chief operating decision-maker has been identified as the Board of Directors which makes the Group’s strategic decisions.
Foreign currency translation
(a) Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic
environment in which the entity operates (‘the functional currency’). The consolidated financial statements are presented in UK sterling
which is the Company’s functional and presentation currency. Foreign currency adjustments arise on translating the overseas
subsidiaries into the Group’s presentation currency.
(b) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at
year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the statement of
comprehensive income in the period in which they arise.
(c) Group companies
The results and financial position of all the Group entities (none of which has the currency of a hyper-inflationary economy) that have a
functional currency different from the presentation currency are translated into the presentation currency as follows:
i) assets and liabilities for each statement of financial position presented are translated at the closing rate at the date of that
statement of financial position;
ii) income and expenses for each statement of comprehensive income are translated at average exchange rates (unless this average is
not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and
expenses are translated at the rate on the dates of the transactions); and
iii) all resulting exchange differences are recognised as a separate component of equity.
(d) Goodwill and intangibles
Goodwill and intangibles adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign
operation and translated at the closing rate.
Revenue recognition
Revenue is recognised in accordance with IFRS 15, the policies adopted are set out below.
Revenue comprises the fair value of the consideration received or receivable for software licences, support and maintenance, professional
services (including distinct software development services) in the ordinary course of the Group’s activities. The consideration is
allocated between the individual performance obligations in a contract, and revenue is recognised when the associated performance
obligations are satisfied.
Revenue is allocated to the various performance obligations on a relative stand-alone selling price (‘SSP’) basis. The Group utilises
available data points based on relevant historical transactions, to establish the observable stand-alone selling prices to be used in
allocating transaction consideration. For observable stand-alone sales a reasonable range of prices will be determined to represent the
stand-alone selling price of that performance obligation. For performance obligations where observable stand-alone sales are not
available, SSP will be estimated using the following methods in the order set out below:
• Market price
• Expected cost plus a margin
• Residual approach
84
Notes to the Financial Statements continued
For the year ended 31 January 2023
1Spatial plc Annual Report & Accounts 2023
2. Summary of significant accounting policies continued
Revenue recognition continued
Revenue for each of the Group’s different performance obligations and how it is recognised is set out below.
Recurring revenue
Software licences
Fixed term software licence revenue is the sale of right to use the software and is recognised when the software is made available to
the customer (i.e. when control of the asset is transferred and the performance obligation is satisfied). Licence revenue is considered
right to use as the customer receives the right to download and use the software. Fixed term licence contracts are typically sold on
twelve-month terms and subject to annual renewal.
SaaS arrangements where customers access the functionality of a hosted software over the contract period without taking possession of
the software are deemed right of access. As such, the performance obligations are provided evenly over a defined term and the Group
recognises revenue over the period in which the subscriptions are provided as the service is delivered, generally on a straight-line basis.
Support and maintenance
Where the support and maintenance is sold for a fixed term and there is a continuing performance obligation, revenue is recognised
over the term of the agreement on a straight-line basis.
Where fees for support and maintenance are bundled with the licence fee, the transaction price is allocated to the distinct performance
obligations with revenue recognised when the performance obligation has been met. In order to determine the allocation to the distinct
elements, reference is made to market price or where there is no market price, the estimated standalone selling price for that
performance obligation.
Annualised recurring revenue
In addition to the recurring revenue streams explained above and disclosed in note 5 to the consolidated financial statements, the
Annual Report also makes reference to annualised recurring revenue (‘ARR’) and uses this measure to evaluate the Group’s
performance. Annualised Recurring Revenue (‘ARR’) is the annualised value at the year-end of committed recurring contracts for term
licences and support & maintenance. A reconciliation between the revenue recognised in the consolidated statement of comprehensive
income and the Group’s ARR for the current and prior year is included under the heading Alternative Performance Measures in this
note to the consolidated financial statements.
Services
Professional services
Revenue is recognised based upon stage of completion of the services project or where there are a series of distinct milestones, to the
completion of that element of the overall services project. The stage of completion is based on a percentage of completion basis, as
determined by the percentage of labour costs incurred to date compared to the total estimated labour costs of a contract. The nature
of some contracts in our European operations means the licence and implementation services are effectively part of a bundled
transaction and in those cases the revenue for the licence is recognised on a pro-rata basis to the service revenue recognition, given
that the customer is able to assume the benefits of the licences as the services are rendered.
Software development services
Revenue is recognised over time based upon stage of completion of the software project. The percentage of completion of the project
is arrived at by a considered objective review as to the work that has been carried out, against that which is yet to be completed, to
allow the project to be delivered to the customer. These reviews are carried out throughout the project. Where the Group has an
enforceable right to payment for performance to date, revenue is recognised using an input method based on costs incurred as a
proportion of total costs expected to be incurred. Where there is no enforceable right to payment for performance to date, revenue is
recognised based on an output method based on contract milestones achieved. Any costs relating to the element of the project not yet
being recognised as revenue are deferred, until the associated revenue is recognised, and included within other receivables.
Non-recurring revenue
Perpetual licences
Non-recurring perpetual software licences revenue is the sale of right to use the software and the term is undefined. Non-recurring perpetual
software licences revenue is recognised when the software is made available to the customer (i.e. when control of the asset is transferred and
the performance obligation is satisfied). Licence revenue is considered right to use as the customer receives the right to download and use
the software. This revenue is expected to transition in time to being part of recurring term or subscription licences.
Principal versus agent considerations
When the Group is involved in providing other party’s products to a customer, the Group determines whether it is a principal or an
agent for each specified good or service promised to the customer. A specified good or service is a distinct good or service (or a distinct
bundle of goods or services) to be provided to the customer. To determine the nature of its promise, the Group shall:
• identify the specified goods or services to be provided to the customer (which, for example, could be a right to a good or service to be
provided by another party); and
Overview
Strategic Report
Corporate Governance
Financial Statements
85
• assess whether it controls each specified good or service before that good or service is transferred to the customer. The Group is a
principal if it controls the specified good or service before that good or service is transferred to a customer. The following factors are
considered in the analysis:
– The entity which is primarily responsible for fulfilling the promise to provide the specified product.
– If the Group has inventory risk before the specified good or service has been transferred to a customer, or after transfer of control
to the customer.
• The Group has discretion in establishing the prices for the specified product.
The Group acts as principal when we control the specified good or service prior to transfer, with on-going obligations to deliver the
services, the revenue would be recognised over time. Where the Group acts as principal, the Group has determined the recognition
of revenue for perpetual licences is point in time whilst for support and maintenance it is recognised over time due to the on-going
obligations to deliver the support and maintenance.
Interest income
Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the
rate that discounts the estimated future cash receipts through the expected life of the financial asset to that asset’s net carrying amount.
Government grants
Government grants and other assistance are accounted for under IAS 20 Accounting for Government Grants and Disclosure of
Government Assistance. A government grant is recognised only when there is reasonable assurance that (a) the entity will comply with
any conditions attached to the grant and (b) the grant will be or has been received. The grant is recognised as income over the period
necessary to match them with the related costs, for which they are intended to compensate, on a systematic basis.
Assistance in the form of bank loans backed by government support that may be forgiven if certain conditions are met are initially
recorded as loans. When the conditions for forgiveness are met, or there is reasonable assurance that the conditions will be met, the
grant is credited to the profit and loss.
Deferred costs and deferred revenues
To the extent that the cost and revenue recognition differs from the contractual billing terms, costs are included in other receivables
and revenue is included in contract assets or contract liabilities. Incremental costs of obtaining a contract and costs to fulfil a contract
are included within other receivables if they are expected to be recovered. The costs are amortised on a systematic basis consistent
with the expected pattern of the transfer of services under the contract.
Strategic, integration and other non-recurring items
When items of income or expense are considered significant by virtue of their size, nature or incidence or which have a distortive effect
on current year earnings and are relevant to an understanding of the Group’s financial performance, they are disclosed separately
within the financial statements as Strategic, Integration or Other non-recurring items. Such items may include but are not limited to
restructuring charges and acquisition-related costs.
Current and deferred income tax
The tax charge for the year comprises current and deferred tax. Tax is recognised in the profit or loss, except to the extent that it
relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other
comprehensive income or directly in equity, respectively.
Current tax
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities, based
on tax rates and laws that are enacted or substantively enacted by the reporting date. Taxable profit differs from profit/(loss) as
reported in the consolidated statement of comprehensive income because of items of income or expense that are taxable or deductible
in other years and items that are never taxable or deductible.
Deferred tax
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial statements
and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all
taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that
it is probable that taxable profits will be available against which those deductible temporary differences can be utilised.
A deferred tax liability is provided on intangible assets acquired as part of a business combination. This results in an increase in residual
goodwill by the same amount. This liability has been recognised in accordance with IAS12.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled
or the asset realised, based on tax rates and laws that have been enacted or substantively enacted by the end of the financial year. The
measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group
expects, at the end of the financial year, to recover or settle that carrying amount of its assets and liabilities.
86
Notes to the Financial Statements continued
For the year ended 31 January 2023
1Spatial plc Annual Report & Accounts 2023
2. Summary of significant accounting policies continued
Current and deferred income tax continued
R&D tax credits
Companies within the Group may be entitled to claim special tax allowances in relation to qualifying research and development
expenditure, e.g. R&D tax credits. The Group accounts for such allowances as tax credits which means they are recognised when it is
probable that the benefit will flow to the group and that the benefit can be reliably measured. R&D tax credits reduce current tax
expense and, to the extent the amounts are due in respect of them and not settled by the statement of financial position date, reduce
current tax payable.
Intangible assets
(a) Goodwill
Goodwill arising in a business combination is recognised as an asset at the date that control is acquired. Goodwill represents the excess
of the cost of an acquisition over the fair value of the Group’s share of the net identifiable assets of the acquired subsidiary at the date of
acquisition. If, after reassessment, the Group’s interest in the fair value of the acquiree’s identifiable net assets exceeds the sum of the
consideration transferred, the excess is recognised immediately in profit and loss as a bargain purchase gain. Goodwill is tested annually
for impairment and carried at cost less accumulated impairment losses. Any impairment is charged to the statement of comprehensive
income and is not reversed. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity
sold. Goodwill is allocated to cash-generating units (‘CGUs’) for the purpose of impairment testing. The allocation is made to those CGUs
that are expected to benefit from the business combination in which the goodwill arose, identified according to the operating segment.
(b) Other intangible assets
Other intangible assets are carried at cost less accumulated amortisation and impairment losses.
An intangible asset acquired as part of a business combination is recognised outside goodwill if the asset is separable or arises from
contractual or other legal rights and its fair value can be measured reliably.
Expenditure on internally developed intangible assets, excluding development costs, is taken to the statement of comprehensive
income in the year in which it is incurred. Development expenditure is recognised as an intangible asset only if all of the following
conditions are met: an asset is created that can be identified; it is probable that the asset created will generate future economic
benefits; it is technically feasible that the asset can be completed so that it will be available for use or sale and there are sufficient
available resources to complete it; and the development costs can be measured reliably. The types of costs capitalised include
employee costs and subcontractor costs directly associated with development activity.
The amount initially recognised for internally generated intangible assets is the sum of the expenditure incurred from the date when
the intangible asset first meets the recognition criteria listed above. Where no internally generated intangible asset can be recognised,
development expenditure is recognised in the statement of comprehensive income in the period in which it is incurred. Capitalised
development costs are recorded as intangible assets and amortised from the point at which the asset is ready for use.
Subsequent to initial recognition, internally generated intangible assets are reported at cost less amortisation and accumulated
impairment losses. Internally generated intangible assets consist of development costs.
Amortisation is charged to profit or loss. Intangible assets with a finite life are amortised on a straight-line basis over their expected
useful lives, as follows:
Brands
Customer and related contracts
Software and intellectual property
Development costs
Impairment of non-financial assets
5 to 10 years
5 to 10 years
3 to 10 years
2 to 5 years
Assets that have an indefinite useful life, for example goodwill, are not subject to amortisation. These are tested annually for
impairment. Assets that are subject to depreciation or amortisation are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which
the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to
sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately
identifiable cash flows (cash-generating units). Non-financial assets other than goodwill that suffered an impairment are reviewed for
possible reversal of the impairment at each reporting date.
Overview
Strategic Report
Corporate Governance
Financial Statements
87
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses. Cost includes the original
purchase price of the asset and the costs attributable to bringing the asset to its working condition for its intended use.
Depreciation is provided at rates calculated to write off the cost or valuation of property, plant and equipment, less their estimated
residual value over their expected useful lives on the following basis:
Leasehold property improvements
Motor vehicles
Fixtures, fittings and equipment
Right of use assets
straight line over period of lease
25% to 33% per annum – straight line
20% to 33% per annum – straight line
straight line over period of lease
The Directors annually review the residual value and estimated useful lives of the property, plant and equipment.
The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds and the
carrying amount of the asset and is recognised in administrative expenses.
Leases
IFRS 16 requires lessees to recognise a lease liability that reflects future lease payments and a "right-of-use asset" in all lease contracts
within scope. IFRS 16 exempts lessees in short-term leases or when underlying asset has a low value.
The Group has elected to apply the practical expedient and not to recognise right-of-use assets and lease liabilities for leases with
low-value assets only. The lease payments associated with these leases is recognised as an expense on a straight-line basis over the
lease term.
At inception of a contract, the Group assesses whether a contract is, or contains, a lease based on whether the contract conveys the
right to control the use of an identified asset for a period of time in exchange for consideration.
The Group has elected to apply the practical expedient to account for each lease component and any non-lease components as a single
lease component.
The Group recognises a right-of-use asset and a lease liability at the lease commencement date.
The lease liability is initially measured at the present value of the following lease payments:
• Fixed payments
• Variable payments that are based on index or rate
• The exercise price of an extension or purchase option if reasonably certain to be exercised
• Payment of penalties for terminating the lease, if a termination option is reasonably certain to be exercised
The lease payments are discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s
incremental borrowing rate. The weighted average lessee’s incremental borrowing rate applied to the lease liabilities was 4.8%.
The right-of-use asset is initially measured based on the initial amount of the lease liability adjusted for any lease payments made at or before
the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to
restore the underlying asset or the site on which it is located, less any lease incentives received. The assets are depreciated to the earlier of
the end of the useful life of the right-of-use asset or the lease term using the straight-line method. The lease term includes periods covered by
an option to extend if the Company is reasonably certain to exercise that option. In addition, the right-of-use asset is periodically reduced by
impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in future lease
payments arising from a change in an index or rate, if there is a change in the Company’s estimate of the amount expected to be payable. A
corresponding adjustment is made to the carrying amount of the right-of-use asset or is recorded in profit or loss if the carrying amount of
the right-of-use asset has been reduced to zero.
Extension and termination options exist in the UK building lease. These terms are used to maximise operational flexibility in terms of
managing contracts. In determining the lease term, management considers all facts and circumstances that create an economic incentive to
exercise an extension option, or not exercise a termination option. Extension options are only included in the lease term if the lease is
reasonably certain to be extended. The assessment of whether the Group is reasonably certain to exercise an extension option is reviewed if a
significant event or a significant change in circumstances occurs which affects this assessment and is within the control of the Group.
88
Notes to the Financial Statements continued
For the year ended 31 January 2023
1Spatial plc Annual Report & Accounts 2023
2. Summary of significant accounting policies continued
Non-current assets or disposal groups classified as held for sale
Non-current assets or disposal groups classified as held for sale are measured at the lower of carrying amount and fair value less costs
to sell.
Non-current assets or disposal groups are classified as held for sale if their carrying amount will be recovered through a sale transaction
rather than through continuing use. The condition is regarded as met only when the sale is highly probable and the asset is available for
immediate sale in its present condition. Management must be committed to the sale which should be expected to qualify for recognition
as a completed sale within one year from the date of the classification.
Financial assets
The Group’s financial assets comprise ‘trade and other receivables’ and ‘cash and cash equivalents’ in the statement of financial position.
(a) Trade and other receivables
Trade receivables are amounts due from customers for services performed in the ordinary course of business. If collection is expected
in one year or less they are classified as current assets. If not, they are presented as non-current assets.
Trade receivables are initially recognised at fair value and subsequently held at amortised cost, less provision for impairment.
Appropriate allowances for estimated irrecoverable amounts are recognised in profit or loss. The Group has utilised the simplified
approach to measuring credit losses, using a lifetime expected loss allowance for all trade receivables and contract assets. When a
trade receivable is considered uncollectable, it is written off against the allowance account. Subsequent recoveries of amounts
previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are
recognised in profit or loss.
(b) Cash and cash equivalents
Cash and cash equivalents in the statement of financial position comprise readily accessible cash at bank and in hand. Bank accounts
held which have an original maturity of more than three months, or which are subject to significant restrictions over access, are not
presented as cash and cash equivalents. Such amounts are shown separately as short-term investments or other financial assets with
appropriate disclosure of the related terms.
For the purpose of the consolidated statement of cash flows, cash and cash equivalents consist of cash and cash equivalents as defined
above, net of outstanding bank overdrafts.
Financial liabilities
The Group classifies its financial liabilities as ‘trade and other payables’ and ‘borrowings’ according to the substance of the contractual
arrangements entered into.
(a) Trade and other payables
Trade and other payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from
suppliers. Accounts payable are classified as current liabilities if payment is due within 12 months or less. If not, they are presented as
non-current liabilities.
Trade and other payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.
(b) Borrowings
All borrowings are initially recognised at fair value less directly attributable transaction costs. After initial recognition, borrowings are
subsequently measured at amortised cost; any difference between the proceeds and the redemption value is recognised in the statement
of comprehensive income over the period of the borrowings using the effective interest method. Borrowings are classified as current
liabilities unless the Group has an unconditional right to defer settlement of a liability for at least 12 months after the reporting date.
Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that
the Group will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the
statement of financial position date, taking into account the risks and uncertainties surrounding the obligation.
(a) Restructurings
A restructuring provision is recognised when the Group has developed a detailed formal plan for the restructuring and has raised a valid
expectation in those affected that it will carry out the restructuring by starting to implement the plan or announcing its main features to those
affected by it. The measurement of a restructuring provision includes only the direct expenditures arising from the restructuring, which are
those amounts that are both necessarily entailed by the restructuring and not associated with the ongoing activities of the entity.
Overview
Strategic Report
Corporate Governance
Financial Statements
89
Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares, share options or share
warrants are shown in equity as a deduction, net of tax, from the proceeds.
Employee benefits
(a) Pensions
The Group operates various post-employment schemes, including both defined benefit and defined contribution pension plans.
A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. The Group has no legal
or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating
to employee service in the current and prior periods. A defined benefit plan is a pension plan that is not a defined contribution plan.
The defined benefit plan defines an amount of pension benefit that an employee will receive on retirement, dependent on factors such
as age, years of service and compensation.
The liability recognised in the statement of financial position in respect of defined benefit pension plans is the present value of the defined
benefit obligation at the end of the reporting period (there are no plan assets). The defined benefit obligation is calculated annually by
independent actuaries using the projected unit credit method. The present value of the defined benefit obligation is determined by
discounting the estimated future cash outflows using interest rates of high-quality corporate bonds that are denominated in the currency
in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related pension obligation.
Re-measurement gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited
to shareholders’ funds in other comprehensive income in the period in which they arise. The amount charged or credited to finance
costs is a net interest amount calculated by applying the liability discount rate to the net defined benefit liability. Past-service costs are
recognised immediately in the statement of comprehensive income.
For defined contribution plans, the Group pays contributions to publicly or privately administered pension insurance plans on a mandatory,
contractual or voluntary basis. The Group has no further payment obligations once the contributions have been paid. The contributions are
recognised as employee benefit expense when they are due. Prepaid contributions are recognised as an asset to the extent that a cash
refund or a reduction in the future payments is available.
Share-based payments
The Group operates a number of equity-settled, share-based payment compensation plans, under which the entity receives services
from employees as consideration for equity instruments (options) of the Group. The fair value of the employee service received in
exchange for the grant of the options is recognised as an expense over the vesting period. The total amount to be expensed over the
vesting period is determined by reference to the fair value of the options granted, including any market-based performance conditions
(for example, the Company’s share price), but excluding the impact of any service and non-market performance vesting conditions (for
example, profitability targets). Non-market vesting conditions are included in assumptions about the number of options that are
expected to vest. At each reporting date, the entity revises its estimates of the number of options that are expected to vest based on
the non-market vesting conditions. It recognises the impact of the revision to original estimates, if any, in the statement of
comprehensive income, a corresponding adjustment to equity.
Where options are exercised, the Company issues new shares. The proceeds received net of any directly attributable transaction costs
are credited to share capital (nominal value) and share premium when the options are exercised.
If a granted option is cancelled and regranted the increase in fair value of the granted option measured immediately before and after
the cancellation and regrant is added to the value of the employee’s service received in exchange for the grant
If an option is cancelled this is accounted for as an acceleration of the vesting period and any amount unrecognised is recognised
immediately.
(b) Other
Wages, salaries and social contributions, paid annual leave and sick leave, bonuses, and non-monetary benefits are accrued in the year
in which the associated services are rendered by the employees of the Group.
90
Notes to the Financial Statements continued
For the year ended 31 January 2023
1Spatial plc Annual Report & Accounts 2023
2. Summary of significant accounting policies continued
Alternative Performance Measures
The Group uses certain Alternative Performance Measures to enable the users of the Group’s financial statements to understand and
evaluate the performance of the Group consistently over different reporting periods. APMs are non-GAAP company specific measures.
As these are non-GAAP measures, they should not be considered as a replacements for IFRS measures. The Group’s definition of
non-GAAP measures may not be comparable to other similarly titled measures reported by other companies. Details of the Alternative
Performance Measures used together a reconciliation to the closest GAAP measure is included below:
Recurring Revenue
Total Revenue
Adjustments:
Services
Perpetual Licences – own
Perpetual Licences – third party
Recurring Revenue
Annualised Recurring Revenue
Recurring Revenue
Adjustments:
Timing difference on Net New Revenue in period
Annualised Recurring Revenue
Adjusted EBITDA
Profit before tax
Adjustments:
Depreciation
Amortisation and impairment of intangible assets
Share-based payment charge
Strategic, integration and other one-off items
Net finance cost
Adjusted EBITDA
Operating Cashflow
Cash generated from operations
Adjustments:
Cash flow on strategic, integration and other non-recurring items
Cash generated from operations before strategic, integration and other
non-recurring items
Free cash flow
Cash generated from operations before strategic, integration and other
non-recurring items
Adjustments:
Net interest paid
Net tax received
Expenditure on product development and intellectual property capitalised
Purchase of property, plant and equipment
Lease payments
Free cash flow before strategic, integration and other non-recurring items
Cash flow on strategic, integration and other non-recurring items
Free cash flow
Net Cash
Cash and cash equivalents
Adjustments:
Bank Borrowings – current
Bank Borrowings – non-current
Net Cash
FY2023
30,002
(13,601)
(393)
(1,253)
14,755
FY2023
14,755
1,018
15,773
FY2023
1,044
1,309
2,048
192
194
210
4,997
FY2023
5,352
48
5,400
FY2023
5,400
(210)
179
(3,854)
(163)
(1,099)
253
(48)
205
FY2023
5,036
(660)
(1,322)
3,054
FY2022
27,027
(12,357)
(800)
(1,690)
12,180
FY2022
12,180
1,260
13,440
FY2022
220
1,187
2,254
326
–
195
4,182
FY2022
2,497
294
2,791
FY2022
2,791
(134)
176
(2,449)
(164)
(1,088)
(868)
(294)
(1,162)
FY2022
5,623
(531)
(1,861)
3,231
Overview
Strategic Report
Corporate Governance
Financial Statements
91
3. Financial instruments
Financial assets and financial liabilities
The Group holds the following financial instruments:
Financial assets held at amortised cost
Trade and other receivables *
Cash and cash equivalents
Financial liabilities (amortised cost)
Bank borrowings
Trade and other payables **
At 31 January 2023
£’000
At 31 January 2022
£’000
12,901
5,036
17,937
1,982
4,555
6,537
11,188
5,623
16,811
2,392
4,686
7,078
*
excluding prepayments and VAT and costs incurred to fulfil or obtain a contract
** excluding contract liabilities as there is no obligation to pay cash. This also excludes statutory liabilities such as other taxation and social security.
Financial risk factors
The Group’s activities expose it to a variety of financial risks: foreign currency risk, market risk (including cash flow and fair value
interest rate risk), credit risk, liquidity risk and capital risk.
Risk management is carried out by the finance team under policies approved by the Board of Directors. The Board provides principles
for overall risk management, as well as policies covering specific areas, such as interest rate risk, credit risk, foreign exchange risk and
use of derivative financial instruments and non-derivative financial instruments.
(a) Foreign currency risk
The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures. Foreign exchange
risk arises when future commercial transactions or recognised assets or liabilities are denominated in a currency that is not the entity’s
functional currency.
During the year, the Group had operating subsidiaries in Australia, the United States, Belgium, France, Tunisia and Ireland, whose
revenues and expenses are denominated in Australian dollars, US dollars, Euros or Tunisian dinars.
The carrying amounts of the Group’s foreign currency denominated monetary assets and monetary liabilities at the end of the
reporting year are as follows (CU being Currency Unit):
Euros
Australian dollars
US dollars
Canadian dollars
Moroccan dirham
Tunisian dinar
Danish krone
At 31 January 2023
£’000
At 31 January 2022
£’000
At 31 January 2023
CU’000
At 31 January 2022
CU’000
Net assets
2,207
225
2,017
4
1
(70)
10
4,395
1,420
294
1,204
8
128
224
–
3,278
2,508
395
2,487
7
7
(264)
88
1,704
561
1,617
15
1,554
869
–
92
Notes to the Financial Statements continued
For the year ended 31 January 2023
1Spatial plc Annual Report & Accounts 2023
3. Financial instruments continued
Financial risk factors continued
The following table details the Group’s sensitivity to a 10% strengthening of the currency unit (CU) against sterling. The sensitivity adjusts
their translation at the year end. 10% represents management’s assessment of the reasonably possible movement in exchange rates.
Australian dollar
currency impact
Euro
currency impact
US dollar
currency impact
At 31 January
2023
£’000
At 31 January
2022
£’000
At 31 January
2023
£’000
At 31 January
2022
£’000
At 31 January
2023
£’000
At 31 January
2022
£’000
Gain/(loss)
Net assets/(liabilities)
34
(15)
36
(46)
(67)
759
8
672
178
545
169
484
(b) Cash flow and interest rate risk
The Group’s exposure to interest rate risk relates primarily to its bank loans in 1Spatial France totalling approximately £2.0m at
the year-end (2022: £2.4m). Bank loan interest is charged on a fixed rate basis with interest rates ranging between 0% and 3.6%.
Given the magnitude of the bank loans and low interest rates that range between 0% and 3.6%, the Board does not consider it
appropriate to hedge the interest rate risk.
There is no interest on trade and other payables at 31 January 2023 (2022: nil).
Sensitivity analysis
The Group does not consider the cash flow and fair value interest rate risk to be significant. Should substantial debt be put in place in the
future with variable interest rates, the Board will consider whether it would be appropriate to hedge the cash flow and interest rate risk.
However, no such instrument has been taken out in the current or prior year. The Board will continue to keep this position under review.
Financial assets
Cash and cash equivalents
Financial liabilities
Bank borrowings
Cash and cash equivalents
Sterling
Euros
Australian dollars
US dollars
Tunisian dinar
Moroccan dirham
Bank borrowings
Sterling
Euros
US dollars
At 31 January 2023
£’000
At 31 January 2022
£’000
5,036
5,623
(1,982)
(2,392)
At 31 January 2023
£’000
At 31 January 2022
£’000
At 31 January 2023
CU’000
At 31 January 2022
CU’000
2,556
1,673
343
384
79
1
5,036
–
1,982
–
1,982
2,709
1,573
406
621
268
46
5,623
–
2,392
–
2,392
2,556
1,902
601
474
296
7
–
2,253
–
2,709
1,888
774
834
1,044
557
–
2,870
–
Cash and cash equivalents are placed upon deposit at the best market rates available (subject to the Group’s credit risk policy below)
should an excess above that required for working capital be held.
Other financial assets comprise trade receivables and other receivables as detailed in note 12.
Overview
Strategic Report
Corporate Governance
Financial Statements
93
(c) Credit risk
Credit risk is managed by the trading entities. Credit risk arises from exposure to outstanding customer receivables. Credit checking is
used; however, if there is no independent rating, management will assess the credit quality of the customer, taking into account its
financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance
with limits set by the Board. Credit risk also arises from cash and cash equivalents with banks and financial institutions. For banks and
financial institutions, only independently rated parties with minimum rating "A" are accepted.
The table below shows the ageing of customer receivables at the reporting date (shown net of provision for impairment). Refer to note
12 for further details.
Current
Up to 3 months overdue
3 to 6 months overdue
6 to 12 months overdue
> 12 months overdue
2023
£’000
3,694
1,024
96
9
140
4,963
2022
£’000
3,650
849
237
34
100
4,870
(d) Liquidity risk
Liquidity is managed so that sufficient funds are maintained to support the ongoing strategic and trading activities of the Group.
Management monitors rolling forecasts of the Group’s expected cash flow. The detailed forecasting is carried out at local level in the
operating companies of the Group. This is combined into a Group cash flow forecast.
The table below analyses the Group’s financial liabilities into relevant maturity groupings based on the remaining period at the statement
of financial position date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.
Balances due within 12 months equal their carrying balances as the impact of discounting is not significant.
At 31 January 2023
Bank borrowings
Trade and other payables*
Lease liabilities
At 31 January 2022
Bank borrowings
Trade and other payables*
Lease liabilities
Less than one year
£’000
Between
one and two years
£’000
Between
two and five years
£’000
660
4,555
608
5,823
665
–
555
1,220
657
–
522
1,179
Less than one year
£’000
Between
one and two years
£’000
Between
two and five years
£’000
531
4,870
748
6,149
624
–
506
1,130
1,237
–
470
1,707
*
Excludes contract liabilities as it is not a financial liability as there is no obligation to pay cash. This also excludes statutory liabilities such as other taxation
and social security.
(e) Capital risk
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide
returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Group may issue new shares or sell assets/businesses to reduce debt.
The Group monitors capital on the basis of the gearing ratio. This ratio is calculated as net funds/(debt) divided by total capital. Net funds are
calculated as cash and cash equivalents less total borrowings (including ‘current and non-current borrowings’ as shown in the consolidated
statement of financial position and excluding lease liabilities). Total capital is calculated as ‘equity’ as shown in the consolidated statement of
financial position plus net debt.
During the year ended 31 January 2023, the Group’s strategy, which is unchanged from the previous year, was to maintain the gearing
ratio below 50% and this has been maintained.
94
Notes to the Financial Statements continued
For the year ended 31 January 2023
1Spatial plc Annual Report & Accounts 2023
4. Significant accounting estimates and judgements
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of
future events that are believed to be reasonable under the circumstances. The Group makes estimates concerning the future. The resulting
accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk
of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
Impairment of goodwill and other intangible assets
The Group tests annually whether goodwill has suffered any impairment, in accordance with the accounting policy. Management
considers that it has only one cash generating unit as the business is managed under one global strategy. The recoverable amounts of
its cash-generating unit has been determined based on value in use. Management has also had to make significant estimates when
putting together the budgets and projections and in determining an appropriate discount rate, which are used in the value in use
calculations. These calculations require the use of estimates as further detailed in note 10.
Capitalisation of development expenditure
Management has to make judgements as to whether development expenditure has met the criteria for capitalisation or whether it
should be expensed in the year. Development expenditure is capitalised only after its reliable measurement, technical feasibility and
commercial viability can be demonstrated. In addition, estimates are made in relation to the impairment of capitalised expenditure
based on the projected revenues and margins to be earned from the related products.
In order to assess the commercial viability of the development of future solutions, management assesses the potential market for the
service and estimate the net present value of cash flows from the potential offering against the cost of development. Only if the return
on investment is above a minimum level set by the Board will the development be internally approved to proceed. Further information
regarding the accounting policy for research and development is detailed in Note 2.
Other estimates and assumptions include:
• Revenue recognition, namely percentage of completion for open service performance obligations as of year end
• Alternative performance measures
• Number of share options that will vest under share options schemes
• Defined benefit pension scheme (see note 18)
These areas of estimates and judgements are not considered significant on the basis that judgement and estimate methods used have
not materially altered year on year and they have not materially affected the reported numbers. The assumptions used are also not
considered to be materially uncertain. Estimates and judgements are made with reference to the Group’s accounting policies and
relevant financial reporting standards.
5. 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
Term licences
Support and maintenance – own
Support and maintenance – third party
Recurring revenue
Services
Perpetual licences – own
Perpetual licences – third party
Total revenue
2023
£’000
5,167
6,727
2,861
14,755
13,601
393
1,253
30,002
2022
£’000
2,940
7,350
1,890
12,180
12,357
800
1,690
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.
Overview
Strategic Report
Corporate Governance
Financial Statements
95
Revenue by region
UK
Europe
US
Rest of World
Total revenue
2023
£’000
10,454
12,173
4,325
3,050
30,002
2022
£’000
8,903
11,583
3,721
2,820
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 7). 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.
UK/Ireland
At a point in time
Over time
Europe
At a point in time
Over time
United States
At a point in time
Over time
Australia
At a point in time
Over time
2023
£’000
11,921
2,185
9,736
11,011
2,011
9,000
4,303
2,159
2,144
2,767
1,070
1,697
30,002
2022
£’000
9,926
2,257
7,669
10,875
1,796
9,079
3,721
1,286
2,435
2,505
1,040
1,465
27,027
As at 31 January 2023, costs to obtain and fulfil a contract of £109,000 were included in other receivables (2022: £169,000).
Amortisation of costs to obtain and fulfil a contract for the year ended 31 January 2023 were £75,000 (2022: £54,000). 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. Further information can be found in note 12.
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. Further information can be found in note 15.
The following table provides an analysis of the Group’s non-current assets by location.
UK/Ireland
Europe
United States
Rest of World
Total
2023
£’000
7,790
7,869
3,656
4
19,319
2022
£’000
6,800
7,645
2,650
5
17,100
96
Notes to the Financial Statements continued
For the year ended 31 January 2023
1Spatial plc Annual Report & Accounts 2023
6. (a) Operating profit
Operating profit is stated after charging:
Wages and salaries
Social security costs
Other pension costs
Share-based payment charge
Staff costs including Executive Directors
Depreciation of property, plant and equipment – owned assets
Lease depreciation
Amortisation and impairment of intangible assets
Net foreign exchange (gains)/losses
Short-term lease payments
Research costs
Auditors’ remuneration:
Fees payable to the Company’s auditors and its associates for the audit of the parent
company and consolidated financial statements
Fees payable to the Company’s auditors and its associates for other services:
• The audit of the Company’s subsidiaries
• Other Services – tax advisory and compliance
2023
£’000
15,085
2,450
1,120
192
18,847
253
1,056
2,048
(307)
99
818
178
15
15
2022
£’000
12,838
2,209
1,128
326
16,501
198
989
2,254
197
43
1,049
176
15
12
6. (b) Average monthly number of personnel employed (including Executive Directors)
Software developers
Consulting
Sales and marketing
Administration
Support
Directors
2023
Number
2022
Number
141
91
48
32
16
2
330
118
91
41
29
15
2
296
6. (c) Directors’ emoluments
Details of directors’ emoluments are included in the Directors’ Remuneration Report included on pages 64 to 67.
Overview
Strategic Report
Corporate Governance
Financial Statements
97
7. 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:
Amounts paid relating to change of CFO
Total
2023
£’000
194
194
2022
£’000
–
–
The cash impact in FY 2023 relating to the strategic, integration and other non-recurring items was £48,000 (2022: £294,000).
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 €1,166,999 to be satisfied by the issue by
1Spatial of ordinary shares (the ‘Consideration Shares’).
Of the consideration to be satisfied by the issue of the Consideration Shares, €726,459 was satisfied immediately upon Completion,
with the balance of €440,540 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, €408,701 of the Deferred Share Consideration Amount.
The balance of consideration €31,839 was issued in shares on 31 March 2023.
8. Finance income and costs
Finance income
Bank interest receivable
Finance costs
Interest expense
– Bank borrowings
– Bank charges
– Interest cost on defined benefit pension obligation
Lease interest
Net finance cost
2023
£’000
19
19
(73)
(53)
(15)
(88)
(229)
(210)
2022
£’000
14
14
(76)
(42)
(6)
(85)
(209)
(195)
98
Notes to the Financial Statements continued
For the year ended 31 January 2023
1Spatial plc Annual Report & Accounts 2023
9. Income tax credit
Current tax
UK corporation tax on income for year
Foreign tax
Adjustments in respect of prior years
Total current tax credit
Deferred tax (note 19)
Origination and reversal in temporary differences
Effect of tax rate change on opening balance
Adjustments in respect of prior years
Total deferred tax
Total tax credit
Factors affecting the tax credit for the year:
2023
£’000
2022
(restated)
£’000
(57)
79
(15)
7
(58)
38
(1)
(21)
(14)
(172)
40
(19)
(151)
(83)
71
–
(12)
(163)
2022
(restated)
£’000
220
42
55
(238)
71
(348)
212
(19)
37
25
(163)
The differences between the standard rate of corporation tax in the UK and the actual tax credit are explained below:
Profit on ordinary activities before tax
Profit/(loss) on ordinary activities before tax multiplied by the effective rate of
corporation tax in the UK of 19% (2022: 19%)
Effect of:
Expenses not deductible for tax purposes
Adjustment in respect of R&D tax credits
Effect of movement in deferred tax rate
Utilisation of losses not previously recognised for tax purposes
Deferred tax not recognised on losses carried forward
Adjustments in respect of prior years
Differences in tax rates applicable to overseas subsidiaries
Other differences
Total tax credit for the year
2023
£’000
1,044
198
96
(312)
38
(66)
110
(15)
(47)
(16)
(14)
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%).
Overview
Strategic Report
Corporate Governance
Financial Statements
99
10. Intangible assets including goodwill
Cost
At 1 February 2022
Additions
Effect of foreign exchange
At 31 January 2023
Accumulated impairment
and amortisation
At 1 February 2022
Amortisation
Effect of foreign exchange
At 31 January 2023
Net book amount at 31 January 2023
Net book amount at 31 January 2022
Goodwill
£’000
Brands
£’000
Customers
and related
contracts
£’000
Software
£’000
Development
costs
£’000
Intellectual
property
£’000
17,194
–
478
17,672
11,330
–
187
11,517
6,155
5,864
450
–
12
462
291
22
5
318
144
159
4,547
–
191
4,738
6,574
39
186
6,799
21,228
3,815
554
25,597
3,640
149
4,958
227
14,826
1,644
144
109
377
3,933
5,294
16,847
805
907
1,505
1,616
8,750
6,402
72
–
–
72
17
6
–
23
49
55
Total
£’000
50,065
3,854
1,421
55,340
35,062
2,048
822
37,932
17,408
15,003
The net book amount of development costs includes £8,750,000 (2022: £6,402,000) internally generated capitalised software
development costs that meet the definition of an intangible asset. The amortisation charge of £2,048,000 (2022: £2,254,000)
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.
Cost
At 1 February 2021
Additions
Written–off
Effect of foreign exchange
At 31 January 2022
Accumulated impairment
and amortisation
At 1 February 2021
Amortisation
Written–off
Effect of foreign exchange
At 31 January 2022
Net book amount at 31 January 2022
Goodwill
£’000
Brands
£’000
Customers
and related
contracts
£’000
Software
£’000
Development
costs
£’000
Intellectual
property
£’000
17,447
–
–
(253)
17,194
11,548
–
–
(218)
11,330
5,864
464
–
–
(14)
450
252
42
–
(3)
291
159
4,764
–
–
(217)
6,757
26
–
(209)
19,285
2,423
–
(480)
4,547
6,574
21,228
3,641
153
–
(154)
4,696
360
13,454
1,693
–
(98)
–
(321)
3,640
4,958
14,826
907
1,616
6,402
72
–
–
–
72
11
6
–
–
17
55
Total
£’000
48,789
2,449
(30)
(1,173)
50,065
33,602
2,254
–
(794)
35,062
15,003
100
Notes to the Financial Statements continued
For the year ended 31 January 2023
1Spatial plc Annual Report & Accounts 2023
10. Intangible assets including goodwill continued
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.
Goodwill
Opening carrying value
Effect of foreign exchange
Closing carrying value
2023
Total
£’000
5,864
291
6,155
2022
Total
£’000
5,899
(35)
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.
11. Property, plant and equipment
Leasehold property
improvements
£’000
Fixtures, fittings and
equipment
£’000
Cost
At 1 February 2022
Additions
Disposal
Exchange adjustment
At 31 January 2023
Accumulated depreciation
At 1 February 2022
Charge for the year
Disposal
Exchange adjustment
At 31 January 2023
Net book amount at 31 January 2023
323
5
–
18
346
230
65
–
15
310
36
Total
£’000
1,466
163
(8)
41
1,662
1,116
253
(8)
(1)
1,360
1,143
158
(8)
23
1,316
886
188
(8)
(16)
1,050
266
302
Overview
Strategic Report
Corporate Governance
Financial Statements
101
Leasehold property
improvements
£’000
Fixtures, fittings and
equipment
£’000
Cost
At 1 February 2021
Additions
Disposal
Exchange adjustment
At 31 January 2022
Accumulated depreciation
At 1 February 2021
Charge for the year
Disposal
Exchange adjustment
At 31 January 2022
Net book amount at 31 January 2022
398
9
(59)
(25)
323
273
46
(59)
(30)
230
93
Depreciation expense of £253,000 (2022: £198,000) has been charged in administrative expenses.
12. Trade and other receivables
Current
Trade receivables
Less: provision for impairment of trade receivables
Other receivables
Prepayments and accrued income
Below is a reconciliation of the movement in accrued income:
At 1 February 2022
Accrued revenue invoiced in the year
Revenue accrued in the year
Foreign exchange difference
At 31 January 2023
1,104
155
(130)
14
1,143
837
152
(130)
27
886
257
2023
£’000
4,992
(29)
4,963
2,044
7,144
14,151
2023
£’000
5,075
(5,075)
5,947
57
6,004
Total
£’000
1,502
164
(189)
(11)
1,466
1,110
198
(189)
(3)
1,116
350
2022
£’000
4,895
(25)
4,870
1,413
5,988
12,271
2022
£’000
2,950
(2,950)
5,188
(113)
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 £3,698,000 (2022: £3,650,000) were fully performing. Before accepting any new customer,
the Group assesses the potential customer’s credit quality and defines credit limits by customer.
102
Notes to the Financial Statements continued
For the year ended 31 January 2023
1Spatial plc Annual Report & Accounts 2023
12. Trade and other receivables continued
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 £1,269,000 (2022: £1,220,000) 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:
Current
Up to 3 months overdue
3 to 6 months overdue
6 to 12 months overdue
> 12 months overdue
Current
Up to 3 months overdue
3 to 6 months overdue
6 to 12 months overdue
> 12 months
2023
£’000
3,698
1,029
98
10
157
4,992
2022
£’000
3,653
853
242
36
111
4,895
As of 31 January 2023, trade receivables of £29,000 were impaired (2022: £25,000) 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:
At 1 February
Increase/(decrease) in provision
At 31 January
Weighted average
loss rate
Impairment loss
allowance
£’000
0.1%
0.5%
2.0%
5.0%
10.0%
4
5
2
1
17
29
Weighted average
loss rate
Impairment loss
allowance
£’000
0.1%
0.5%
2.0%
5.0%
10.0%
2023
£’000
25
4
29
3
4
5
2
11
25
2022
£’000
80
(55)
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.
Overview
Strategic Report
Corporate Governance
Financial Statements
103
13. Cash and cash equivalents and notes to the consolidated statement of cash flows
Cash at bank and in hand
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
Profit before tax
Adjustments for:
Finance income
Finance cost
Depreciation
Amortisation of acquired intangibles
Amortisation and impairment of development costs
Share-based payment charge
Net foreign exchange movement
Increase in trade and other receivables
Increase in trade and other payables
Increase/(decrease) in defined benefit pension obligation
Cash generated from operations
Note
22
Cash generated from operations before strategic, integration and other non-recurring items
Cash flow on strategic, integration and other non-recurring items (note 7)
Cash generated from operations
(b) Reconciliation of net cash flow to movement in net funds
(Decrease) in cash in the year
Changes resulting from cash flows
Net cash outflow in respect of borrowings repaid
Effect of foreign exchange
Change in net funds
Net funds at beginning of year
Net funds at end of year
Analysis of net funds
Cash and cash equivalents classified as:
Current assets
Bank loans
Net funds at end of year
Net funds is defined as cash and cash equivalents net of bank loans (and excluding lease liabilities).
2023
£’000
5,036
5,036
2023
£’000
1,044
(19)
229
1,309
386
1,662
192
–
(1,426)
1,963
12
5,352
2023
£’000
5,400
(48)
5,352
2023
£’000
(676)
(676)
543
(44)
(177)
3,231
3,054
5,036
(1,982)
3,054
2022
£’000
5,623
5,623
2022
£’000
220
(14)
209
1,187
561
1,693
326
1
(1,784)
206
(108)
2,497
2022
£’000
2,791
(294)
2,497
2022
£’000
(1,585)
(1,585)
423
127
(1,035)
4,266
3,231
5,623
(2,392)
3,231
104
Notes to the Financial Statements continued
For the year ended 31 January 2023
1Spatial plc Annual Report & Accounts 2023
13. Cash and cash equivalents and notes to the consolidated statement of cash flows
continued
(c) Reconciliation of movement in liabilities from financing activities
Total debt (including lease liabilities) as at 1 February 2022
Borrowings at 1 February 2022
Repayment of borrowings
Foreign exchange difference
Borrowings before transfer
Transfer from due after 1 year to due within 1 year
Borrowings as at 31 January 2023
Lease liability at 1 February 2022
Cash movements:
Lease payments
Non-cash movements:
Additions in the year
Interest cost
Reclassifications
Lease liability before transfer
Transfer from due after one year to due within one year
Lease liability as at 31 January 2023
Bank borrowings and
leases due within 1
year
£’000
Bank borrowings and
leases due after 1 year
£’000
1,279
531
(543)
12
–
660
660
748
(1,099)
779
88
(516)
–
608
608
2,837
1,861
–
121
1,982
(660)
1,322
976
–
–
–
709
1,685
(608)
1,077
Total
£’000
4,116
2,392
(543)
133
1,982
–
1,982
1,724
(1,099)
779
88
193
1,685
–
1,685
Total debt (including lease liabilities) as at 31 January 2023
1,268
2,399
3,667
14. Bank borrowings
Current bank borrowings
Non-current bank borrowings
2023
£’000
660
1,322
1,982
2022
£’000
531
1,861
2,392
Bank borrowings
Bank borrowings relate to bank loans in 1Spatial France totalling €2.25m (2022: €2.87m). 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 €0.7m (£0.6m)
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 €.
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 £3m 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.
Overview
Strategic Report
Corporate Governance
Financial Statements
105
15. Trade and other payables
Current
Trade payables
Other taxation and social security
Other payables
Accrued liabilities
Deferred income
2023
£’000
2,861
3,653
506
1,229
7,548
15,797
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:
At 1 February
Revenue recognised in the year
Revenue deferred at year end
Foreign exchange difference
At 31 January
16. Leases
Right of use assets
At 1 February 2022
Additions
Depreciation
Foreign exchange difference
At 31 January 2023
Buildings
Cars
Others
Lease liabilities
At 1 February 2022
Additions
Interest cost
Cash paid
Other adjustments
Foreign exchange difference
At 31 January 2023
Current
Non-current
2023
£’000
5,612
(5,612)
7,460
88
7,548
2023
£’000
1,490
82
37
1,609
2023
£’000
608
1,077
1,685
2022
£’000
2,227
2,924
534
1,987
5,612
13,284
2022
£’000
5,870
(5,870)
5,636
(24)
5,612
Total
£’000
1,747
893
(1,056)
26
1,609
2022
£’000
1,522
185
40
1,747
Total
£’000
1,724
779
88
(1,099)
163
30
1,685
2022
£’000
748
976
1,724
106
Notes to the Financial Statements continued
For the year ended 31 January 2023
1Spatial plc Annual Report & Accounts 2023
16. Leases continued
Amounts recognised in profit or loss:
Depreciation charge of right of use assets
Buildings
Cars
Others
2023
£’000
955
88
13
1,056
2022
£’000
866
96
27
989
17. 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 €7.0m (the ‘Consideration’). Full details of the acquisition were provided in the
Annual Report for the year ended 31 January 2020. As disclosed in note 7, there were some minor changes to the terms of the Share
Purchase agreement. The remaining balance payable at 31 January 2022 of €440,540 (equivalent to £380,000) was satisfied mainly in
cash (£352,000) in September 2022, with the balance settled by an issue of 57,685 ordinary shares of £0.10 on 31 March 2023. These
shares had a market value of €31,839 (£28,000) at the date of issue. There are no further elements of deferred consideration due to
the former shareholders of Geomap-Imagis Participations (‘Geomap-Imagis’).
18. Pension obligations
Defined benefit pension
1Spatial France SAS operates defined benefit pension schemes. The French pension system is operated on a “pay as you go” basis. Each
employee is entitled to receive a basic pension from the Social Security plus a complementary pension from the defined contribution
schemes ARRCO and AGIRC (AGIRC being solely for management). The lump sum retirement allowance must by law be paid by the
employer when an employee retires. The allowances to be paid to 1Spatial France’s employees are defined by the Collective Bargaining
Agreement of the R&D, IT and consulting firms (‘Syntec’).
The lump sum allowances to be paid on retirement are calculated as follows:
• For service up to 5 years: nil
• For service beyond 5 years: 1 month’s basic salary plus 1/5 of a month’s basic salary per year of service beyond 5 years
All permanent employees are covered by this scheme. The normal retirement age in France is 62 (62 in 2022). Benefit rights do not
vest before the normal retirement age.
The scheme is not externally funded through an insurance contract.
The risks of the scheme are as follows:
(a) Changes in bond yields
A decrease in corporate bond yields will increase plan liabilities.
(b) Life expectancy
Should the normal retirement age of 62 increase due to life expectancy increases, this will result in an increase in the plan’s liabilities.
(c) Inflation risk
The pension obligations are linked to inflation, and higher inflation will lead to higher liabilities.
A comprehensive actuarial valuation of the Company pension scheme, using the projected unit basis, was carried out at 31 January 2023
and 31 January 2022 by independent consulting actuaries. The valuations at those dates are based on the following assumptions:
Expected rate of salary increases
Discount rate
Rate of inflation
Retirement age – management
Retirement age – others
2023
2.50%
3.75%
2.20%
65
63
2022
2.00%
1.15%
1.90%
65
63
Overview
Strategic Report
Corporate Governance
Financial Statements
107
Annual staff turnover rates are as follows:
16–24 years
25–29 years
30–34 years
35–39 years
40–44 years
45–49 years
50 years and above
2023
20%
15%
10%
7%
5%
2%
0%
2022
20%
15%
10%
7%
5%
2%
0%
The turnover rates used are based on statistics over the last few years. These rates project 4.2 (2022: 3.95) resignations over the next
12 months.
Reconciliation of scheme liabilities:
At 1 February
Current service (cost)/credit
Interest expense
Benefit payments
Re-measurement gains
Exchange difference
At 31 January
2023
£’000
(1,276)
(74)
(15)
62
162
(12)
(1,153)
2022
£’000
(1,606)
42
(6)
66
113
115
(1,276)
The sensitivity of the defined benefit obligation to changes in the principal assumption is:
2023
Discount rate
2022
Discount rate
Total cost recognised as an expense:
Current service cost/(credit) – within administrative expenses
Interest cost – within finance costs
The amount recognised in other comprehensive income is:
Re-measurement gains
Deferred tax on re-measurements
Impact on defined benefit obligation
Change in
assumption
Increase in
assumption
Decrease in
assumption
0.25%
Decrease of 2.5%
Increase of 2.5%
Impact on defined benefit obligation
Change in
assumption
Increase in
assumption
Decrease in
assumption
0.25%
Decrease of 2.9%
Increase of 2.9%
2023
£’000
74
15
89
2023
£’000
216
(54)
162
2022
£’000
(42)
6
(36)
2022
£’000
138
(25)
113
108
Notes to the Financial Statements continued
For the year ended 31 January 2023
1Spatial plc Annual Report & Accounts 2023
18. Pension obligations continued
Defined benefit pension continued
Based on the demographic data and assumptions at 31 January 2023, a valuation was performed of the benefit expense for the
financial year ending 31 January 2024 and the projections were as follows:
Current service cost
Total service cost
Interest cost
Total net interest on defined benefit (liability)/asset
Total defined benefit cost for the year ending 31 January 2024
The expected benefit payments over the next 10 years are shown below:
FY24
FY25
FY26
FY27
FY28
FY29–FY33
£’000
(65)
(65)
(41)
(41)
(106)
£’000
55
21
39
47
110
711
Defined contribution pension
The Group operates several defined contribution plans, which receive fixed contributions from group companies. The Group’s legal or
constructive obligation for these plans is limited to the contributions. The expense recognised in the current year in relation to all
pension costs was £1,120,000 (2022: £1,128,000).
19. Deferred tax
The following are the major deferred tax liabilities and (assets) recognised by the Group and movements thereon during the current
year and prior reporting years.
Tax losses
£’000
Accelerated tax
depreciation
£’000
Intangibles
£’000
Other temporary
differences
£’000
Total
£’000
At 31 January 2021 as previously reported
Prior year adjustment
At 31 January 2021 as restated
Deferred tax (credit)/charge for year in profit or loss – restated
DT credit OCI
Foreign exchange difference
At 31 January 2022
Deferred tax (credit)/charge for year in profit or loss
DT charge OCI
Foreign exchange difference
At 31 January 2023
(562)
(199)
(761)
(189)
–
–
(950)
(77)
–
–
(1,027)
–
–
–
–
–
–
–
–
–
–
–
1,355
–
1,355
188
–
–
1,543
76
–
–
1,619
(17)
–
(17)
(11)
(25)
25
(28)
(20)
54
(54)
776
(199)
577
(12)
(25)
25
565
(21)
54
(54)
(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 £3,243,000 (2022:
£4,027,000) in respect of losses amounting to £13,133,300 (2022: £16,044,500) 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.
Overview
Strategic Report
Corporate Governance
Financial Statements
109
The deferred tax balance is analysed as follows:
Recoverable within 12 months
Recoverable after 12 months
Settled within 12 months
Settled after 12 months
Deferred
tax asset
£’000
–
–
(48)
(1,027)
(1,075)
Deferred
tax liability
£’000
235
1,384
–
–
1,619
Total
£’000
235
1,384
(48)
(1,027)
544
20. Share capital, share premium account and own shares held
Allotted and fully paid
Ordinary shares of 10p each
Deferred shares of 4p each
Rights of shares
2023
Number
2022
Number
110,859,545
226,699,878
110,805,795
226,699,878
Ordinary shares
The ordinary shares all rank pari passu, have the right to participate in dividends and other distributions made by the Company, and to
receive notice of, attend and vote at every general meeting of the Company. On liquidation, ordinary shareholders are entitled to
participate in the assets available for distribution pro rata to the amount credited as paid up on such shares (excluding any premium).
Deferred shares
The deferred shares do not carry voting rights or a right to receive a dividend. The holders of deferred shares will not have the right to
receive notice of any general meeting of the Company, nor have any right to attend, speak or vote at any such meeting. The deferred
shares will also be incapable of transfer (other than to the Company). In addition, holders of deferred shares will only be entitled to a
payment on a return of capital or on a winding up of the Company after each of the holders of ordinary shares has received a payment
of £1,000,000 in respect of each ordinary share. Accordingly, the deferred shares will have no economic value. No application will be
made for the deferred shares to be admitted to trading on AIM nor to trading on any other stock or investment exchange.
Voting Rights
1Spatial Plc has 110,859,545 (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 €0.03 million which were issued on 31st March 2023, in relation to the Geomap-
Imagis acquisition. See note 7.
At 31 January 2022
Issue of new shares
Transfer of treasury shares
Number of shares
337,505,673
53,750
At 31 January 2023
337,559,423
Allotted, called up and
fully paid shares
£’000
Share premium
account
£’000
Own shares held
£’000
20,150
5
–
20,155
30,479
9
–
30,488
(303)
–
164
(139)
On the 24th January 2023, 53,750 new ordinary shares of 10p each were issued for consideration of £14,244 in settlement of share
options exercised.
For details of the Group’s share option scheme, refer to note 22.
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 £0.3m. During the year 172,551 shares were transferred out of treasury to satisfy
employee share awards.
110
Notes to the Financial Statements continued
For the year ended 31 January 2023
1Spatial plc Annual Report & Accounts 2023
21. Other reserves
Equity-settled employee benefits reserve
The equity-settled employee benefits reserve arises from the requirement to reflect the fair value of share options vested during
the reporting period. For further detail see note 22.
Merger reserve
The merger reserve arises on the difference between the nominal value of shares issued and the premium payable to acquire shares
in another company.
Reverse acquisition reserve
The reverse acquisition reserve was created in accordance with IFRS 3, ‘Business combinations’. The reverse acquisition reserve arose
during the year ended 31 January 2010.
Currency translation reserve
The currency translation reserve arises on the translation of foreign entity balances where the functional currency is different from
the presentation currency.
Purchase of non-controlling interest reserve
The purchase of non-controlling interest reserve arises on purchase of further shares in a subsidiary of the Group already under the
control of the parent company, with the effect of increasing the percentage under control and reducing the percentage owned by the
non-controlling interest.
22. Share-based payments
The total charge for the year relating to share-based payment plans was £192,000 (2022: £326,000).
The estimated fair value of the employees’ services received in exchange for the grant of share options is measured at the grant date
and recognised as an expense on a straight-line basis over the vesting period, based upon the Group’s estimate of shares that will
eventually vest. Fair value is determined by reference to the Black-Scholes option pricing model. If a granted option is cancelled and
regranted the increase in fair value of the granted option measured immediately before and after the cancellation and regrant is added
to the value of the employee’s service received in exchange for the grant. If an option is cancelled this is accounted for as an
acceleration of the vesting period and any amount unrecognised is recognised immediately.
There were no new LTIP or share option awards made in the year.
Awards vesting/lapsing
2018 LTIP Awards subject to EBITDA target
During the year, 75% of the element of the 2018 LTIP awards subject to the share price condition vested as the financial target of 50p
share price was achieved on 23 June 2022 (i.e. in line with the 75% award level but below the 100% allocation level as shown in the
table below).
% vesting
50%
75%
100%
Target
40p
50p
60p
As a result, 412,322 options therefore vested on 23 June 2022 (subject to a holding period of one year 23 June 2023), whilst 157,076
lapsed as a result.
Overview
Strategic Report
Corporate Governance
Financial Statements
111
The reconciliation of options over the year to 31 January 2023 is shown below:
Outstanding brought forward
LTIPs granted during the year
Share options granted during the year
LTIPs exercised during the year
Share options exercised during the year
Lapsed during the year
Outstanding carried forward
Exercisable as at 31 January
2023
2022
Number
9,337,128
–
–
(172,551)
(53,750)
(828,826)
8,282,001
4,758,677
Weighted average
exercise price
26.9p
–
–
13.3p
28.2p
40.6p
Number
9,941,496
–
–
(604,368)
9,337,128
2,043,948
Weighted average
exercise price
26.4p
–
–
18.8p
26.9p
46.5p
The weighted average remaining contractual life of share options outstanding at the end of the year was 6.5 years (2022: 7.6 years).
The exercise prices of the outstanding options range between 0p and 46.5p.
23. 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.
Profit attributable to equity shareholders of the Parent
Ordinary shares with voting rights
Deferred consideration payable in shares
Basic weighted average number of ordinary shares
Impact of share options/LTIPS
Diluted weighted average number of ordinary shares
Basic earnings per share
Diluted earnings per share
24. Commitments
The future aggregated minimum payments under non-cancellable short-term leases are as follows:
Short-term lease commitments
No later than one year
Later than one year but no later than five years
Later than five years
2023
£’000
1,058
2023
Number
000s
110,712
55
110,807
2,845
113,652
2023
Pence
1.0
0.9
2023
£’000
8
–
–
8
2022
(restated)
£’000
383
2022
Number
000s
110,486
58
110,544
4,008
114,552
2022
(restated)
Pence
0.3
0.3
2022
£’000
9
–
–
9
Short-term lease payments in this note represent rentals payable by the Group for any of its items that are not recognised under
IFRS 16. These are made up smaller leases which are less than twelve months.
112
Notes to the Financial Statements continued
For the year ended 31 January 2023
25. Contingent liabilities
The Group has given performance guarantees on contracts as follows:
Euro
US dollar
Moroccan dirham
Tunisian dinar
Total
1Spatial plc Annual Report & Accounts 2023
2023
£’000
489
1
39
3
532
2022
£’000
465
1
39
2
507
26. 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 Group the asset meets the criteria for recognition. In addition, the offset criteria
of IAS12 are also met and therefore the deferred tax amounts are presented net in the 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.
Non-current liabilities: Deferred tax
Accumulated losses
Net assets / Total equity
Non-current liabilities: Deferred tax
Accumulated losses
Net assets / Total equity
Consolidated statement of comprehensive income
Income tax charge / (credit)
Profit for the year
2021
£’000
776
43,931
14,735
2022
£’000
970
43,641
15,105
Adjustment
£’000
(199)
(199)
199
Adjustment
£’000
(405)
(405)
405
2022
£’000
43
177
Adjustment
£’000
(206)
206
2021
Restated
£’000
577
43,732
14,934
2022
Restated
£’000
565
43,236
15,510
2022
Restated
£’000
(163)
383
Refer to note 19, Deferred tax, for the adjusted disclosure of deferred tax.
Earnings per share and diluted earnings per share adjusted disclosure is included in note 23.
Overview
Strategic Report
Corporate Governance
Financial Statements
113
27. Related-party transactions
(a) Key management compensation
The only key management personnel of the Group are the Directors. Details of the compensation of the key management personnel are
disclosed in the Directors’ Remuneration Report on page 67.
(b) Controlling party
There is no one party that controls the Group.
(c) Company and subsidiary
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are
not disclosed.
28. Subsidiaries and associates of the Group as at 31 January 2023
Description and
proportion of
share capital held
by 1Spatial plc
Description and
proportion of
share capital held
by Group
Country of
incorporation
or registration
Nature of
business
Registered
office address
1Spatial Holdings
Limited
Ordinary 100%
–
England & Wales Holding company Tennyson House, Cambridge Business
Park, Cowley Road, Cambridge,
Cambridgeshire, CB4 0WZ, UK
1Spatial Inc..
–
Ordinary 100%
United States
1Spatial Group Limited –
Ordinary 100%
England & Wales
Aon Spásúil Limited
1Spatial Australia Pty
Limited
–
–
Ordinary 100%
Ireland
Ordinary 100%
Australia
1Spatial Belgium SA
Ordinary 100%
–
Belgium
1Spatial France SAS
SARL Imagis-Tunisie
DMR Production
–
–
–
Ordinary 100%
France
Ordinary 100%
Tunisia
Ordinary 100%
Tunisia
Location-based
software
development
and consultancy
1Spatial US Inc.
Ordinary 100%
–
United States
Dormant
8614 Westwood Center Drive, Suite
# 450, Vienna, VA 22182, USA
Tennyson House, Cambridge Business
Park, Cowley Road, Cambridge,
Cambridgeshire, CB4 0WZ, UK
c/o Roberts Nathan LLP, First Floor,
11 Exchange Place, International
Financial Services Centre, Dublin 1,
Ireland
Level 4, 29 Kiora Road, Miranda,
NSW, 2228
13, Clos Chanmurly, 4000, Liège,
Belgium
Bureaux Now Connected, 23–25, Avenue
du Dr Lannelongue 75014 Paris, France
Immeuble Lloyd, Bureau 2A-B, Centre
Urbain Nord, 1003 Tunis, Tunisie
Immeuble Lloyd, Bureau 2A-B, Centre
Urbain Nord, 1003 Tunis, Tunisie
c/o The Corporation Trust Company,
Corporation Trust Center, 1209 Orange
Street, Wilmington, DE 19801, USA
114
Company Statement of Financial Position
As at 31 January 2023
1Spatial plc Annual Report & Accounts 2023
Assets
Fixed assets
Investments
Total fixed assets
Current assets
Debtors
Cash and cash equivalents
Total current assets
Creditors: amounts falling due within one year
Creditors
Deferred consideration
Total creditors due within less than one year
Creditors: amounts falling due after more than one year
Deferred consideration
Creditors: amounts falling due after more than one year
Total creditors
Net assets
Capital and reserves
Called up share capital
Share premium account
Own shares held
Share-based payments reserve
Merger reserve
Currency translation reserve
Accumulated losses (of which loss for the year was £597,000 (2022: £672,000))
Total equity
Note
3
4
5
6
7
7
9
9
9
2023
£’000
20,004
20,004
9,147
43
9,190
(2,383)
(28)
(2,411)
–
–
(2,411)
26,783
20,155
30,488
(139)
4,761
16,466
(125)
(44,823)
26,783
2022
£’000
19,838
19,838
10,323
531
10,854
(3,151)
(340)
(3,491)
(27)
(27)
(3,518)
27,174
20,150
30,479
(303)
4,569
16,466
(125)
(44,062)
27,174
The financial statements on pages 114 to 122 were approved and authorised for issue by the Board on 25 April 2023 and signed on its
behalf by
Stuart Ritchie
DIRECTOR
Registered company number (England): 5429800
Overview
Strategic Report
Corporate Governance
Financial Statements
115
Company Statement of Changes in Equity
For the year ended 31 January 2023
£’000
Share
capital
Share
premium
account
Own
shares
held
Share-
based
payments
reserve
Merger
reserve
Currency
translation
reserve
Accumulated
losses
Total
equity
Balance at 31 January 2021
20,150
30,479
(303)
4,243
16,466
(125)
(43,390)
27,520
Comprehensive loss
Loss for the year
Total comprehensive loss
Transactions with owners
Recognition of share-based payments
–
–
–
–
–
–
–
–
–
–
–
–
–
–
326
326
–
–
–
–
–
–
–
–
(672)
(672)
(672)
(672)
–
–
326
326
Balance at 31 January 2022
20,150
30,479
(303)
4,569
16,466
(125)
(44,062)
27,174
Comprehensive loss
Loss for the year
Total comprehensive loss
Transactions with owners
Issue of shares
Transfer of treasury shares
on exercise of options
Recognition of share-based payments
–
–
5
–
–
5
–
–
9
–
–
9
–
–
–
164
–
164
–
–
–
–
192
192
–
–
–
–
–
–
–
–
–
–
–
(597)
(597)
–
(164)
–
(164)
(597)
597
14
–
192
206
Balance at 31 January 2023
20,155
30,488
(139)
4,761
16,466
(125)
(44,823)
26,783
116
Notes to the Company Financial Statements
For the year ended 31 January 2023
1Spatial plc Annual Report & Accounts 2023
1. Summary of significant accounting policies
Basis of preparation
The Company financial statements have been prepared in accordance with Financial Reporting Standard 101, ‘Reduced Disclosure
Framework’ (FRS 101). The financial statements have been prepared under the historical cost convention, and in accordance with the
Companies Act 2006 as applicable to companies using FRS 101.
The preparation of financial statements in conformity with FRS 101 requires the use of certain critical accounting estimates. It also
required management to exercise its judgement in the process of applying the Company’s accounting policies. The estimates and
associated assumptions are based on industry experience and various other factors that are believed to be reasonable under the
circumstances.
The Directors have reviewed the estimates and assumptions used in the preparation of the financial statements. The estimates and
assumptions relating to the carrying value of investments have a significant risk of causing a material adjustment in the next financial
year. Refer to note 3 for further information.
The following exemptions from the requirement of IFRS have been applied in the preparation of these financial statements,
in accordance with FRS 101:
• IAS 7, ‘Statement of Cash Flows’
• The requirements in IAS 24, ‘Related Party Disclosures’ to disclose related party transactions entered into between two or more
members of a group, and to disclose compensation for key management personnel and amounts incurred by an entity for the
provision of key management personnel services that are provided by a separate management entity
• IFRS 7, ‘Financial Instruments: Disclosures’
• Paragraphs 45(b) and 46 to 52 of IFRS 2, ‘Share-based Payment’ (details of the number and weighted-average exercise prices
of share options, and how the fair value of goods or services received was determined)
• The requirements in IAS 8 to disclose information in relation to a new standard that has been issued but is not yet effective
The Company has taken advantage of Section 408 of the Companies Act 2006 and has not included a statement of comprehensive
income in these separate financial statements. The loss attributable to members of the company for the year ended 31 January 2023
is £597,000 (2022: £672,000).
The auditors’ remuneration for audit and other services is disclosed in note 6(a) to the consolidated financial statements.
The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been
applied consistently throughout all years presented except where otherwise indicated.
There is no one party which controls the Company.
Going concern
Taking into account the cash flow projections approved by the Board of Directors, the Directors have formed a judgement that, at the
time of approving these financial statements, there is a reasonable expectation that the Company has adequate resources to continue
in operational existence for the foreseeable future and therefore adopt the going concern basis for the financial statements.
Share-based payments
The Company operates a number of equity-settled, share-based payment compensation plans, under which the entity receives services
from employees as consideration for equity instruments (options) of the Company. The fair value of the employee service received
in exchange for the grant of the options is recognised as an expense. The total amount to be expensed over the vesting period is
determined by reference to the fair value of the options granted, including any market-based performance conditions (for example,
the Company’s share price) but excluding the impact of any service and non-market performance vesting conditions (for example,
profitability targets). Non-market vesting conditions are included in assumptions about the number of options that are expected
to vest.
At each reporting date, the entity revises its estimates of the number of options that are expected to vest based on the non-market
vesting conditions. It recognises the impact of the revision to original estimates, if any, in the statement of comprehensive income, with
a corresponding adjustment to equity. Where options are exercised, the Company issues new shares. The proceeds received net of any
directly attributable transaction costs are credited to share capital (nominal value) and share premium when the options are exercised.
The grant by the Company of options over its equity instruments to the employees of subsidiary undertakings in the Group is treated
as a capital contribution. The fair value of employee services received, measured by reference to the grant date fair value, is recognised
over the vesting period as an increase to investment in subsidiary undertakings, with a corresponding credit to equity.
Overview
Strategic Report
Corporate Governance
Financial Statements
117
Investments
Investments in group undertakings are carried at cost less any provision for impairment. The Company assesses investments for
impairment whenever events or changes in circumstances indicate that the carrying value of an investment may not be recoverable.
If any such indication of impairment exists, the Company makes an estimate of the recoverable amount. If the recoverable amount
of the cash-generating unit is less than the value of the investment, the investment is considered to be impaired and is written down
to its recoverable amount. An impairment loss is recognised immediately in the profit and loss account. Management has used
significant estimates and judgements when putting together the budgets and projections which are used in the value in use
calculations. These judgements are mainly in relation to projected revenues and margins. Refer to note 3 for further information.
Trade and other receivables
Trade receivables are amounts due from customers for services performed in the ordinary course of business. If collection is expected
in one year or less they are classified as current assets. If not, they are presented as non-current assets.
Trade receivables are initially recognised at fair value and subsequently held at amortised cost, less provision for impairment.
Appropriate allowances for estimated irrecoverable amounts are recognised in profit or loss. The Company has utilised the simplified
approach to measuring credit losses, using a lifetime expected loss allowance for all trade receivables and contract assets. When a
trade receivable is considered uncollectable, it is written off against the allowance account. Subsequent recoveries of amounts
previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are
recognised in profit or loss.
This loss allowance for intercompany receivables are based on management assumptions about the risk of default and expected loss
rates. Management has made estimations in making these assumptions and inputs to the impairment calculations which are based
on history, external conditions and forward looking scenarios.
Cash and cash equivalents
Cash and cash equivalents in the statement of financial position comprise readily accessible cash at bank and in hand. Bank accounts
held which have an original maturity of more than three months, or which are subject to significant restrictions over access, are not
presented as cash and cash equivalents. Such amounts are shown separately as short-term investments or other financial assets with
appropriate disclosure of the related terms.
Trade payables
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers.
Accounts payable are classified as current liabilities if payment is due within 12 months or less. If not, they are presented as non-
current liabilities.
Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.
Current tax
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities, based
on tax rates and laws that are enacted or substantively enacted by the reporting date. Taxable profit differs from profit as reported in
the statement of comprehensive income because of items of income or expense that are taxable or deductible in other years and items
that are never taxable or deductible.
Deferred tax
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial statements
and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all
taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that
it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred
tax assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition of other
assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled
or the asset realised, based on tax rates and laws that have been enacted or substantively enacted by the end of the reporting period.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the
Company expects, at the end of the reporting period, to recover or settle that carrying amount of its assets and liabilities.
118
Notes to the Company Financial Statements continued
For the year ended 31 January 2023
1Spatial plc Annual Report & Accounts 2023
1. Summary of significant accounting policies continued
Foreign currency
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at
year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the statement
of comprehensive income in the period in which they arise.
Employee pensions
The Company operates a stakeholder pension plan for which all employees are eligible. No employees have as yet joined the scheme.
Dividend income
Dividend income from investments is recognised when the shareholder’s right to receive payment has been established (provided that
it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably).
Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares, share options or share
warrants are shown in equity as a deduction, net of tax, from the proceeds.
Significant accounting estimates and judgements
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations
of future events that are believed to be reasonable under the circumstances.
The Company makes estimates concerning the future. The resulting accounting estimates will, by definition, seldom equal the related
actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of
assets and liabilities within the next financial year are discussed below.
Impairment of non-financial assets
The Company holds investments in group undertakings with a carrying value of £20,004,000. The key assumptions concerning the
carrying value of the investment in subsidiaries have been set out in note 3.
1.1 Financial risk management
The Company’s financial instruments comprise amounts due to/from subsidiary undertakings, cash and cash equivalents, other
receivables and trade and other payables. The Company’s approach to the financial risks is discussed in note 3, Financial Instruments,
to the consolidated financial statements.
Liquidity risk
The Company’s objective is to maintain a balance between continuity of funding and flexibility. The Company’s policy is to manage
working capital in order to ensure that liquidity is maintained so as to meet peak funding requirements.
Foreign currency risk
As at 31 January 2023 and 31 January 2022, there was no significant foreign exchange currency exposure to the Company.
Borrowing facilities
The Company has a £3m Revolving Credit Facility (FY 2022: £nil) at the reporting date to support working capital requirements.
The RCF is denominated in GBP 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 at 31 January 2023.
Overview
Strategic Report
Corporate Governance
Financial Statements
119
2. Directors’ emoluments
Details of Directors’ emoluments borne by the Company are disclosed in the Directors’ Remuneration Report on page 67.
This includes details of the highest paid Director.
3. Investments
Shares in group undertakings
Cost
At 1 February 2022
Capital contribution to subsidiaries
At 31 January 2023
Accumulated amounts provided
At 1 February 2022
At 31 January 2023
Net book amount
At 31 January 2023
At 31 January 2022
Shares in group undertakings
Cost
At 1 February 2021
Capital contribution to subsidiaries
At 31 January 2022
Accumulated amounts provided
At 1 February 2021
At 31 January 2022
Net book amount
At 31 January 2022
At 31 January 2021
Total
£’000
42,114
164
42,278
22,276
22,276
20,004
19,838
Total
£’000
41,886
228
42,114
22,276
22,276
19,838
19,610
The Company assesses investments for impairment whenever events or changes in circumstances indicate that the carrying value
of an investment may not be recoverable.
The recoverable amount of the investments held is determined from value in use calculations for the cash-generating unit (CGU)
covering a five-year period. The detailed plan put together by the management team and the Board makes assessments on 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. Details of the assumptions used are provided in note 10 to the consolidated financial statements.
120
Notes to the Company Financial Statements continued
For the year ended 31 January 2023
1Spatial plc Annual Report & Accounts 2023
4. Debtors
Amounts owed by group undertakings
Taxation and social security
Other receivables
Prepayments and accrued income
2023
£’000
8,863
35
7
242
9,147
2022
£’000
10,127
19
33
144
10,323
All amounts that fall due within one year are presented within current assets as required by the Companies Act. The amounts owed
by group undertakings are repayable on demand with no fixed repayment date although it is noted that a significant proportion of
the amounts may not be sought for repayment within one year depending on activity in the group companies. These amounts are
unsecured and interest free.
5. Cash and cash equivalents
Cash at bank and in hand
6. Creditors due in less than one year
Amounts owed to group undertakings
Trade payables
Taxation and social security
Other payables
Accrued liabilities
2023
£’000
43
2023
£’000
1,760
194
38
4
387
2,383
2022
£’000
531
2023
£’000
2,218
102
26
2
803
3,151
The carrying value of trade and other payables is consistent with their book values. It is the Company’s policy to settle trade payables
within normal credit terms. Amounts owed to group undertakings are unsecured, interest free and repayable on demand.
7. Deferred consideration
Disclosures in relation to the deferred consideration on the acquisition of the Geomap-Imagis group are made in note 17 to the
consolidated financial statements.
8. Share-based payments
Disclosures in relation to the share options in issue are made in note 22 to the consolidated financial statements.
Overview
Strategic Report
Corporate Governance
Financial Statements
121
9. Share capital, share premium account and own shares held
Allotted and fully paid
Ordinary shares of 10p each
Deferred shares of 4p each
Rights of shares
2023
Number
2022
Number
110,859,545
226,699,878
110,805,795
226,699,878
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).
On the 24th January 2023, 53,750 new ordinary shares of 10p each were issued for consideration of £14,244.
Deferred shares
The deferred shares do not carry voting rights or a right to receive a dividend. The holders of deferred shares will not have the right to
receive notice of any general meeting of the Company, nor have any right to attend, speak or vote at any such meeting. The deferred
shares will also be incapable of transfer (other than to the Company). In addition, holders of deferred shares will only be entitled to a
payment on a return of capital or on a winding up of the Company after each of the holders of ordinary shares has received a payment
of £1,000,000 in respect of each ordinary share. Accordingly, the deferred shares will have no economic value. No application will be
made for the deferred shares to be admitted to trading on AIM nor to trading on any other stock or investment exchange.
At 31 January 2022
Transfer of treasury shares
New issue of shares
At 31 January 2023
Number of shares
337,505,673
–
53,750
337,559,423
Allotted, called up
and fully paid shares
£’000
Share premium
account
£’000
Own shares held
£’000
20,150
–
5
20,155
30,479
–
9
30,488
(303)
(164)
–
(139)
Own shares
The Company has 147,084 (FY 2022: 319,635) ordinary shares of 10p and 3,500,000 deferred shares of 4p held in treasury. The original
consideration paid was £0.3m. During the year 172,551 shares were transferred out of treasury to satisfy employee share awards.
122
Notes to the Company Financial Statements continued
For the year ended 31 January 2023
1Spatial plc Annual Report & Accounts 2023
10. Subsidiaries and associates of the Company as at 31 January 2023
Description and
proportion of
share capital held
by 1Spatial plc
Description and
proportion of
share capital held
by Group
Country of
incorporation
or registration
Nature of
business
Registered
office address
1Spatial Holdings
Limited
Ordinary 100%
–
England & Wales Holding company Tennyson House, Cambridge Business
Park, Cowley Road, Cambridge,
Cambridgeshire, CB4 0WZ, UK
1Spatial Inc..
1Spatial Group
Limited
–
–
Ordinary 100%
United States
Ordinary 100%
England & Wales
Aon Spásúil Limited –
Ordinary 100%
Ireland
1Spatial Australia
Pty Limited
–
Ordinary 100%
Australia
1Spatial Belgium SA Ordinary 100%
–
Belgium
Location-based
software
development
and consultancy
1Spatial France SAS –
Ordinary 100%
France
SARL Imagis-Tunisie –
Ordinary 100%
Tunisia
DMR Production
–
Ordinary 100%
Tunisia
1Spatial US Inc.
Ordinary 100%
–
United States
Dormant
8614 Westwood Center Drive, Suite
# 450, Vienna, VA 22182, USA
Tennyson House, Cambridge Business
Park, Cowley Road, Cambridge,
Cambridgeshire, CB4 0WZ, UK
c/o Roberts Nathan LLP, First Floor, 11
Exchange Place, International Financial
Services Centre, Dublin 1, Ireland
Level 4, 29 Kiora Road, Miranda,
NSW, 2228
13, Clos Chanmurly, 4000, Liège,
Belgium
Bureaux Now Connected, 23–25, Avenue
du Dr Lannelongue 75014 Paris, France
Immeuble Lloyd, Bureau 2A-B, Centre
Urbain Nord, 1003 Tunis, Tunisie
Immeuble Lloyd, Bureau 2A-B, Centre
Urbain Nord, 1003 Tunis, Tunisie
c/o The Corporation Trust Company,
Corporation Trust Center, 1209 Orange
Street, Wilmington, DE 19801, USA
11. Contingent liabilities
As disclosed in note 2 of the consolidated financial statements, Summary of significant accounting policies, the Company has taken
advantage of the exemption available under Section 479A of the Companies Act 2006 in respect of the requirement for audit of certain
100% owned subsidiaries. In addition, Aon Spásúil Limited has claimed the audit exemption under Irish Companies Act 2014 section
357 with respect to the year ended 31 January 2023. 1Spatial plc has given a statement of guarantee whereby it will guarantee all
outstanding liabilities to which Aon Spásúil Limited is subject to at 31 January 2023. The Company guarantees the liabilities of the
company at the end of the year until those liabilities have been settled in full. The contingent liability at the year-end was £92,000
(2022: £48,000).
12. Subsequent events
On Friday, March 10, 2023, Silicon Valley Bank was closed by the California Department of Financial Protection & Innovation and
the FDIC was named Receiver. No advance notice is given to the public when a financial institution is closed. The FDIC has created
the Deposit Insurance National Bank of Santa Clara (DINB) to facilitate the resolution of Silicon Valley Bank. To protect the depositors,
the FDIC created the Deposit Insurance National Bank of Santa Clara (DINB) to allow depositors access to their insured deposits and
time to open accounts at other insured institutions.
The Company held no cash balances with Silicon Valley Bank and to date no exposures have been noted in our customer base.
Overview
Strategic Report
Corporate Governance
Financial Statements
123
Company Information
Directors
C Milverton
S Ritchie
A Roberts
F Small
P Massey
Chief Executive Officer
Chief Financial Officer
Non-Executive Chairman
Non-Executive Director
Non-Executive Director
Telephone
+44(0) 1223 420 414
Company Secretary
Ms Susan Margaret Wallace
Shakespeare Martineau LLP
No. 1 Colmore Square
Birmingham
B4 6AA
Company number
5429800
Registered address
Tennyson House
Cambridge Business Park
Cowley Road
Cambridge
CB4 0WZ
Independent auditors
BDO LLP
Chartered Accountants and
Statutory Auditors
55 Baker Street
London
W1U 7EU
Bankers
Natwest Plc
1st Floor, Rapid House
40 Oxford Road
High Wycombe
Buckinghamshire
HP11 2EE
Nominated adviser
and Broker
Liberum
Ropemaker Street
London
EC2Y 9LY
Legal adviser
Charles Russell Speechlys LLP
5 Fleet Place
London
EC4M 7RD
Registrars
Link Group
10th Floor, Central Square
29 Wellington Street
Leeds
LS1 4DL
Financial PR adviser
Alma PR
71–73 Carter Lane
London
EC4V 5EQ
CBP018732
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1Spatial plc
Tennyson House
Cambridge Business Park
Cowley Road
Cambridge
CB4 0WZ
www.1spatial.com