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1Spatial Non-Executive Chairman, Andrew Roberts, CEO, Claire Milverton, Andrew Fennel, Managing Director – Roads, and Stuart Ritchie, CFO introduce their 1Streetworks solution, outlining how it can be used to revolutionise complex streetworks planning and the potential addressable market.
Watch the video here: https://www.piworld.co.uk/company-videos/1spatial-spa-introduction-to-1streetworks-march-24/
Or listen to the podcast here: https://piworld.podbean.com/e/1spatial-spa-introduction-to-1streetworks-march-24/
FTM, the RNS stated a recording would be made available; but following the link just now, the slide deck is there but no webinar recording. It is worth a watch, you could chase their comms agency for a link.
Missed the presentation, but had a quick shufti through the slides. HAving not heard the presentation, I'm unsure how to read Milverton's claim that SPA has sufficient cash (£1.1m) and facilities to cover working capital requirements and planned investment. Share price has reacted to Milverton and the FDs modest purchases after hrs last might and this morning.
Event currently live.
Presentation being used.
https://ukinvestormagazine.co.uk/wp-content/uploads/2024/03/1Spatial-March-13th-.pdf?mc_cid=399bdbc67c&mc_eid=def2491a52
GLA
17,700 shares about £10K....hardly pushing the boat out but right signal...
Anyone attend today's event or get access to the recording? can't see it on the website yet and curious how it was received.
Guess I'll know when I turn on my laptop tomorrow how it was received. Fingers crossed.
I don’t think you’re an idiot at all WHL. I think yesterday’s RNS has shaken confidence and dented Milverton’s credibility. I remember a/o asking about CM on a results call about pricing strategy for the new software products like 1streetworks, querying if they were being positioned too cheaply, and CM brushing them aside.
Milverton has never given a figure for the contract pipeline. That lack of visibility means that financial planning is a nightmare - and without that they cannot make proper capital allocation. So Spa is now in a tricky situation - I don’t think Milverton fully realises this. IMO the obvious way forward is for CM to raise new equity because otherwise they seem likely to be treading water for quite some time. Also worth reminding ourselves that we also have a new untested CFO, who’s trying to manage Milverton and get to grips with new role, and perhaps it’s he who has influenced the sudden change in strategy?
Who knows what’s happening but I think the company needs fresh equity and probably needs to be part of a bigger group.
Fair to say the much anticipated acceleration of revenues from contracts and new products hasn't materialized to the degree anticipated.
I was always fairly comfortable with SPA given they have funded expansion from revenue but that clear sky is now cloudy given cash position. Prior years cash has been around $3M mark: 2021 - $2.8M, 2022 - $3.2M, 2023 - $3.1M and now lowest at $1.1M.
FTM makes a logical point that current wallet doesn't support global ambitions so capital maybe required. I sincerely hope I am wrong but seen this movie all too often before with early stage companies.
Regrettably sold up and moved on as risk has increased, which is a shame as been here since 2021 but banked my profits and will monitor situation. (Probably look like an idiot tomorrow when SP moves back to mid 60's!!)
GLA
I too am very disappointed by the TU. It raises a huge number of questions in my mind about strategic direction and the leadership. Reading the TU , and not between the lines, clear to me that Milverton's global ambitions for the business have been pared back - they just can't generate the cash & working capital needed for the growth propsects they've banged on about. Looking at the RNS:
Revs of +6%: nothing to get excited about at all.....really pedestrian
Recurring revs +18%: these are growing at a decent clip , and recurring SAAS revs growing even more smartly, but forecasting revenue growth with any confidence is a nightmare here. The lumpiness of the contracts means there's sod all visibility...and even when there is, closing deals seems to take forever ( look at UK power deal: it took 6 months to sign from Milverton's "It's imminent" comment in October)
EBITDA +10%: again, hardly shooting out lights! But my real worry is Milverton's comment "Despite the impact of inflationary cost increases." Presumably she means staff wage costs, business rates etc, as thes are surely the main cost items.....if thats the case, then is Milverton actually saying that they've been unable to recoup part of the cost increases they're seeing through price increases to customers or put it another way, are they sellling the products too cheaply ? Not a pretty picture. And the big drop in net cash position, notwithstanding the brief, to my mind, working cap reversal wasn't flagged at all, given the analysts were miles off.
Finally, the strategy seems all over the place:
first they announce a big push to invest in sales & marketing for 1streetworks (something that hasn't been discussed prior to now). I certainly thought Milverton had already put that piece in place - clearly not! So it looks like working capital requirements are going to rise substantially over next 12 months, meaning they need to find the cash to fund it, which means imho that Milverton will have to raise new capital.
and
second, Milverton flgs another big change of direction in the USA, for the other great flagship product NG911, in which they've invested huge amounts , and spoekn about at length. Supposedly they have a great and strong relationship with the individual states so this sudden change in approach is unnerving. What I'm afriad it tells me is (1) current US approach isn't working anything like as well or as quickly as MIlverton assumed and told us) AND
(2) they can't afford to invest in salesforce in US & at the same time build 1streetworks in UK, so they are going to partially outsource the US meaning they'll have to share revenues, profits, & lose some degree of control.
Seems incredible to me that these strategic changes have been highlighted in a TU, almost as if Milverton thought that we already knew the above changes, which we didnt.
Increasingly worried about directors abilities
The software has been developed saves end user time and money so is it sold too cheaply at the moment only the employees benefitting
Yes a poor update all round including flat profits. I would like to know more about these restructuring costs as well. Poor timing from the recommendation in yesterday's Sunday Times. I still think the longer term share trend will be up, but as you (JW) point out a fundraising is likely.
That’s a drop, matter of time before funds required imo
Https://uk.investing.com/analysis/1spatial-landmark-1streetworks-contract-200601104
Bought a few more today following an initial buy earlier this week, looks very promising
Wow - an aim share that goes up !
A month on from my last comment and still no sign of any contract announcement! So that takes it over 4 months since Milverton confidently told us that the fisrt material contract was imminent!!!! Not the best communications from Milverton, and one can only conclude that things are not going as smoothly as she thought/was told. Finance Director has yet to purchase a single share, which may also indicate that negotiations have either stalled or there's a problem. Over to you, Claire!!!!!
Milverton needs to start thinking about expectation management as the longer this saga drags on, the more sceptical long-supportive shareholders are going to become about management ability to put the foot down on the accelerator. heading to end of Jan, and still no news on the imminent deal. Let's hope for management's and share price sake that this hasn't hit a hitch. Three poss scenarios:
1. Deal going ahead but timetable stretched, as bureaucrats slow to cross "ts" and dot "is" - neutral to positive
2. Deal parameters changing as a result of budgetary issues /pricing, leading to rengeotiation of terms - negative
3. Deal postponed or cancelled - negative
October 10th Interims:
"1Streetworks, automating traffic management plans, a £400m ARR market opportunity, launched with five trials ongoing, first material contract expected to be signed imminently onto an annual deal. "
Today's RNS has led to share price up 15% after upgrading forecasts for YE with eps forecast to be significantly ahead Revs at £44.2m = annualised growth of c66% YE ARR £21m up 40% YoY. Market cap is approaching £200m vs SPA at £60m......I know we are in different sectors & different client base, but our reliance on bureaucratic public sector /quasi public sector customers is really starting to impact us. Whilst we have had 3 good follow contracts, and have been fast out of the blocks, perception of the 2 businesses remains wildily different.
Milverton highlighted 1Streetworks first material contract as being expected to sign imminently back at the Interims in October! And yet still no news.......if this continues , I would be concerned if I were the management team that the lot up the road in Trumpington (IQGEO) start to consider the possibility of using their more highly rated paper to bid for Spa. The management seem very ambitious, and it would tick a load of boxes for them,: (1) add another profitable leg with established positions & growing prospects (2) provide rapid cost savings (both based up the road from each other) ; scale benefits in personnel, R&D, folding in our talent etc.....I hope our Board is alive to the prospect, and if it aint them it could easily be s/o like Capita with a new ex Amazon digital native onboard shortly keen to increase digital footprint & with strong public sector credentials ....
The tale of the tape is stark. Over the last 5 years: IQGEO is +350% vs SPA + 47% ; 3year IQGEO +200%, Spa + 80pc; 1year IQGEO + 34%; Spa 0%.
Milverton has come out of the blocks fast - 3 contract/contract extensions ….well done
Of course, this company has far more sources of revenue than Streetworks, so whilst frustrating, the delay should have been bearable. Unlike other tech companies focused on trying to sell their one SSAS application that they have brought to market, whilst burning through cash as contracts get delayed and delayed....
I assumed he must be an insider, so despite his wish to, could not be buying shares as he has information that others simply do not have. This confirms. It's interesting that getting the first major Streetworks contract over the line has been protracted - but I've heard from many tech companies that contracting with enterprise size customers was not fast last year and many were having to target new smaller clients because large customers were simply nervous and slow about committing non revenue generating opex/capex.
My hope is that when it comes, it will be worth the wait, and also with an update on pipeline.
Stuart Ritchie's response, might provide a bit of reassurance to holders:
Your query re why I had not purchased shares was forwarded to me by my marketing colleagues who monitor this inbox. Unfortunately due to circumstances beyond my control I have not yet been able to buy shares. As you will have noted from recent announcements we are shortly to sign our first 1Streetworks deal. Until the deal is concluded and announced to the market I have been unable to buy due to my position. The process has taken a few months - longer than I had hoped for due to circumstances, again, beyond my control.
It’s a great pity that you chose to sell your shares but I wanted to respond to you directly to confirm that as soon as the deal is closed, I will be buying shares.
Kind regards
Stuart Ritchie
Sold my holding today. In the last 2 webcasts Stuart Ritchie has stated he'll shortly be buying shares, in the last one he said definitely before the end of the year. Both statements have proved to be false. An untrustworthy CFO is a big red flag for me so I'm out. Gonna contact SPA and let them know my feelings also.
I presume the share trade at 14.4p is a spurious error.
1Spatial CEO, Claire Milverton and CFO, Stuart Ritchie present interim results for the six-month period ended 31 July 2023. The group delivered significant ARR and revenue growth.
Watch the video here: https://www.piworld.co.uk/company-videos/1spatial-spa-h1-2024-results-presentation-october-2023/
Or listen to the podcast here: https://piworld.podbean.com/e/1spatial-spa-h1-2024-results-presentation-october-2023/