1Spatial - Solid progress on several geospatial fronts

1Spatial’s (SPA’s) FY22 reported results surpassed our expectations. Revenues grew 10% to £27m with annualised recurring revenues up 26% (constant currency) to £13.4m, while SPA reported its first group profit before tax in over a decade. SPA’s results were driven by record contract wins across both new and existing customers, ongoing development of smart partnerships and expansion in the key US market. While it trades at a sizable discount to its software peers, we see opportunities to reduce the gap if it continues executing on its growth strategy.