Last checked at 14 Sep 2017 09:58
Edison Investment Research Limited Edison Investment Research Limited: Edison issues outlook on 1Spatial (SPA) 14-Sep-2017 / 09:56 GMT/BST London, UK, 14 September 2017 Edison issues outlook on 1Spatial (SPA) 1Spatial's restructured management team has made brisk progress in reducing overheads and realigning the business to deliver on the client-centric solutions model. The turnaround is still in its early stages, but we believe it could yield good results in a relatively short timeframe. The market for GIS technology is large and growing at a double-digit rate and we believe that 1Spatial has the customer base, technology and expertise to capitalise on this. Recent contract wins in the UK and the US indicate the turnaround is on track. We believe there is substantial intrinsic value within the business, which with continued execution should be unlocked. We reinstate forecasts at a cautious level (8% FY18 revenue growth), mindful that recoveries following substantial restructuring are often not smooth. However, if deal flow remains robust we could see upside and with the business forecast to trade close to break-even, any upside should gear strongly into earnings - particularly licensing income. In the medium term, we believe that the core GIS business should be able to achieve mid-teens operating margins. If the Geospatial business continues to show that it is on a growth and margin expansion trajectory, we believe that a 2x EV/sales ratio (implying 4.7p a share) would be readily justifiable. Valuing Enables IT at 5-7x EBITDA (0.3-0.4p a share) would suggest a 5p value for the group.Click here to view the full report. All reports published by Edison are available to download free of charge from its websitewww.edisoninvestmentresearch.com About Edison: Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world-renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisers and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting. Edison is authorised and regulated by the Financial Conduct Authority. Edison is not an adviser or broker-dealer and does not provide investment advice. Edison's reports are not solicitations to buy or sell any securities. For more information please contact Edison: Dan Ridsdale, +44 (0)20 3077 5729Bridie Barrett, +44 (0)20 3077 5700tech@edisongroup.com Learn more at www.edisongroup.com and connect with Edison on: LinkedIn https://www.linkedin.com/company/edison-investment-research Twitter www.twitter.com/Edison_Inv_ResYouTube www.youtube.com/edisonitv Dissemination of a FINANCIAL NEWS, transmitted by EQS Group.The issuer is solely responsible for the content of this announcement. |
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