1Spatial - On board with HS2

1Spatial has announced a two-year contract to build a data verification gateway with High Speed Two (HS2). The deal is worth £0.9m over two years, the majority of which is likely to be a recurring software licence/subscription, with options to extend for a further two years beyond that. The deal provides support for our current estimates, but also highlights the company’s increasingly interesting strategic position as the go-to supplier of location master data management solutions in both the UK and United States. The company’s potential to deliver strong, scalable growth continues to strengthen. We do not believe that the company’s current valuation (EV/sales 1.9x) reflects this potential.