Gross profit margin

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

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

Adjusted EBITDA*

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

Strategic, integration and other non-recurring items

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

Operating loss and loss before tax

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

Taxation

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

Balance sheet

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

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

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

Cash flow

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

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

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

• Free cash flow 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.

  Within investing activities, the deferred consideration of €0.7m (£0.6m) on the acquisition of Geomap Imagis, was paid as planned in H1 2021.

  Investment in R&D

  Development costs capitalised in the year amounted to £2.1m (FY 2020 £2.2m). Amortisation of development costs was £1.9m (FY 2020 £1.2m).

  Financing

  The Group arranged additional bank loans of £1.8m on reasonable commercial terms. At the year-end the total loans outstanding were £3.0m. These have been extended to 5-year loans following the exercise of an option in the original agreement and the amount repayable in FY 2022 is approximately €0.5m (£0.4m). With a gross cash position of £7.3m at 31 January 2021 (FY 2020 £5.1m) and positive operating cash generation, the business is in a much stronger financial position than a year ago, which gives the Board the confidence to continue to invest in its three-pillared growth plan.

  Going forward, the Board and management teams are focused on increasing revenues, in particular recurring revenues, whilst maintaining or improving the Group’s profitability and cash generation.

  Andrew Fabian

  Chief Financial Officer

  Key Performance Indicators

  Key income statement KPIs are set out below. There are no non-financial KPIs.

  	2021	2020	Change	Change
  Revenue growth	£m	£m	£m	%
  Recurring revenue	10.6	9.6	1.0	10%

  Total revenues	24.6	23.4	1.2	5%
  Gross profit margin	53%	52%	1%	2%
  Adjusted * EBITDA	3.6	3.2	0.4	12%
  Free cash flow **	0.9	(2.4)	3.3	n/a
  * Adjusted EBITDA is a company-specific measure which is calculated as operating loss before depreciation (including right of use asset depreciation), amortisation and impairment of intangible assets, share-based payment charge and strategic, integration, and other non-recurring items.
  ** Free cash flow is defined as net increase/ (decrease) in cash for the year before cash flows from the acquisition of subsidiaries, cash flows from new borrowings and repayments of borrowings and cash flow from new share issue.

  Environmental, Social and Governance

  Our Vision

  At 1 Spatial, we are striving to make the world safer, smarter and more sustainable for the future. We believe the answers to achieving these goals are held in data and are passionate about working with our customers to unlock the value of their location data - Smarter Data, Smarter World

  Our World Better

  At 1Spatial we are an important part of the Geospatial Ecosystem where using and sharing data provides significant opportunities to support businesses and governments to deliver against important sustainability goals.

  Our domain expertise and Location Master Data Management approach which is data and system agnostic allows us to be an integral and important part of this Ecosystem. A good example of this is where we are working with our partner, Ordnance Survey, on a proof of concept to build a digital map of the UK’s energy system that uses the power of data to support a more efficient pathway to Net Zero. A key driver of this map is for planning, managing and sharing the location of Electric Vehicle charging points and builds on the recommendations of the UK Government’s Energy Data Taskforce

  Our vision at 1Spatial is to “help our customers unlock the value of their location data” which could also be interpreted as “making better use of data that they already have”. We help our customers do this by using our software tools to improve the quality of their data so it is fit for purpose within important use cases. This is a huge economic efficiency for our customers as the cost and time to acquire new spatial data, for example through field collection, can often be very high and therefore have a negative impact on the environment. Our 1Spatial suite of business applications together with those of our partners, can be deployed to make use of this data for specific business needs.

  In the past we’ve seen a lot of these business needs around efficiencies or cost savings but more and more we are seeing the drivers of these solutions around sustainability, social matters, health and safety and regulatory compliance.

  Some examples of these include the following:

  • The work we are doing in the US with a number of 911 Emergency Services departments to ensure that they have consistent and accurate address data to improve emergency vehicle response times which will ultimately result in saving lives.

  • In the UK we have an incident management mobile application that allows the utility engineers to manage customers on a real time basis, going door to door to check customer safety and prioritise visits to vulnerable customers.

  • In France we are working with the Société Wallonne des Eaux (SWDE), as part of their move to become more sustainable in the management of their water resources. SWDE relies on systems and the expertise of 1Spatial to carry out innovative projects, to improve the efficiency of distribution networks enabling SWDE to reduce its water losses by several million m³ in a few years.

  • We are helping the Environment Agency in the UK with their Net Zero planning by helping them to understand where their assets are to be able to ensure protection of homes, businesses, and communities from the risk of flooding.

  • We are supporting states such as Michigan in in the US with their underlying master data to ensure they can make trusted decisions for the state and its citizens.

  • We support national mapping agencies such as Ordnance Survey Great Britain and Ordnance Survey Ireland which are using the authoritative data to support the nation including Covid-19 related issues.

  Whether creating these specific customer business applications or supporting national mapping agencies so they can help manage the Covid-19 pandemic, our team delivers results that make a real difference to people’s lives.

  As a member of the Geospatial Community, the natural world is an inspiration for the whole of the 1Spatial team. We know that, together, we can make our world better. We support our people who each year volunteer their time, energy and skills for global good causes. The Missing Maps Project, which aims to map the most crisis-prone parts of the world, and the humanitarian mapping charity, MapAction are two organisations that are particularly close to our hearts. We regularly participate in local, national and international charity fundraisers. Our team in the UK recently raised money to mark 72 years of the NHS.

  Over the past few years, we have raised funds for charities such as Cancer Council, Care International, Red Nose Day, Save the Children, The Trussell Trust, MapAction, Macmillan Cancer Support, Oxfam, Age UK, Philippines Typhoon Appeal, WinterComfort and Arthur Rank Hospice Charity.

  Environmental

  We are committed to find ways to reduce our impact on the environment. We have made significant carbon emissions reductions during the past year and are committed to continuing these.

  Our move to home working in all offices over the pandemic has reduced our travel related pollution, and improved staff well-being with regards to work/life balance. We’ve taken project work online, using remote systems to manage

  interactions with our clients which has further reduced travel pollution. Moving forward to a post-Covid workplace, we’ve implemented systems that allow greater flexibility for staff and have an ongoing commitment to support staff to work remotely.

  Some of our current environmental initiatives include:

  • In some countries there are subsidies available for using public transport or bikes. We promote and encourage these schemes to staff in all applicable offices.

  • We have created a “Climate Neutral Website” through a fully traceable scheme that offsets carbon emissions with a project in the DR Congo.

  • We have recycling initiatives across our offices including recycling our computer equipment. We actively source and choose recycled stationary and other office supplies wherever possible.

  • Our Paris office in France and our Vienna office in the US are “green” buildings.

  • We donated to Toilet Twinning: a charity focusing on hygiene education and latrine building in communities without ready access to safe water, sanitation and healthcare.

  • We have electric car charging points in some of our office car parks and will be considering hybrid vehicles as lease car renewals come up.

    In the UK we are certified to ISO 14001:2015 which is a standard related to environmental management that exists to help organisations minimize how their operations negatively affect the environment; comply with applicable laws, regulations, and other environmental requirements; and continually improve

    Social

    1Spatial is a team where everyone makes a difference. From our developers, testers and engineers to our consultants, marketing professionals and senior managers, everyone contributes to our success.

    But making a difference goes beyond our day-to-day business and the work we provide as part of our professional roles. Our 1Team have come together to create staff led committees for Social, Community and Environmental initiatives, each working to run schemes and activities which will directly benefit local communities and the world around them. We are very proud of all our staff who volunteer their time, energy and skills for local and worldwide charities and good causes.

    We are also passionate about looking after our staff and actively promote the importance of mental health and happiness. Taking the time to be kind to yourself is something we urge all our staff to do and as part of our commitment to their well-being, we have started to roll out the following initiatives across our offices:

  • Mental health awareness training

  • Mental health first aiders

  • Internal events and initiatives to encourage staff to take time out from their working day

    We are always looking at ways to ensure equality and diversity across our company and an inclusive, welcoming working environment for everyone.

    Over the past year we have celebrated: International Women’s Day, World Food Day, Diwali, Thanksgiving, Mental Health Awareness Week, Earth Day and Health and Happiness month.

    Some of the other social activities organised by our 1Team include:

  • 1Global Challenge – all staff were encouraged to "Get Active”, “Get Creative” and “Get experimental”

  • Creating a 1Spatial Cookbook with recipes from around the world

  • Online fitness and relaxation sessions

  • Flexible working to further support employees especially during the pandemic

  • Regular team meetings and all employee global sessions to help communication and ensure all team members feel involved and part of the 1Team.

  • A variety of social activities across the offices for team members to join in quizzes and games (played at a local and global level).

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