1Spatial Plc (SPA) Earnings Call Transcript & Summary

Good morning, and welcome to the 1Spatial plc investor presentation. Throughout this recorded presentation, investors will be in listen-only mode. [Operator Instructions] Before we begin, I'd like to set the following poll. And I'd now like to hand over to Claire Milverton-Clark, the CEO. Good morning.

Good morning, everyone, and thanks very much for the introduction, [indiscernible]. So yes, here we are, the 1spatial Year-End Results to the 31st of January 2023. And I'm really pleased to introduce today Stuart Ritchie, our new fantastic CFO, who joined us just at the end of December, quite a busy time for us for the rest of the year end, January. So -- let you say hello, Stuart.

Hi, there. I'll provide a more thorough introduction when I get to my section, but thanks for the introduction, Claire.

Right. So what are we going to cover today? So a quick overview from me, background on the business for those of you that are not familiar with us, then we head into the financial performance. And then with Stuart, a key focus for FY '24 going forward, then objectives and outlook, and we'll have some time for Q&A at the end. The presentation is about 30 minutes. So a quick overview about who we are and what we do. And I really do believe we have a unique proposition at 1spatial. We're a software and solutions company helping our customers to make critical decisions from data with a real specialism and location data. The location data is more complicated than standard data and this is why I feel that we've really got a strong position and a strong niche. We've got a market-leading software platform for location master data management, I'll take you through that in a bit more detail in a moment. But while we've got this unique proposition is that we sit at the intersection of 2 key global growing markets. On the left-hand side, in the yellow is the Geospatial information systems business. And we have some history in here, and we have a lot of partners that are working here like Esri an Ordnance Survey. But we don't just work in this sector, we work at the intersection of this sector and the more mainstream master data management sector, which is dominated by the more mainstream companies such as IBM or CGI. And what we provide to our customers is the best of both worlds because we can do spatial and nonspatial with data agnostic and system agnostic and it's our patented rules engine that can process huge amounts of complex data. And we look at the moment, some of the key wins that we're having, like with the National Underground asset register and HS2. And I strongly believe it's because of this unique proposition that we have. We have a number of key market drivers: government investment initiatives, investment in infrastructure, building back better, building back greener. And digital transformation is key across all of our sectors. Doing more with less, they're doing more with less, getting digital systems and data to correct so that they can plan for today and also for tomorrow. And ESG is a very top level driver for everything we do. We have over 1,000 customers globally across a range of sectors, but predominantly in government utilities and transport and these are pretty resilient sectors in our economic climate. We work with a number of powerful partners, and they're key to our growth strategy, and I'll talk about that later on. And from a revenue perspective, it's all about focusing on growing annual recurring revenues from our software sets. And we have a good geographic spread, U.K. and Ireland, Europe, U.S. and Australia and key growth areas are the U.S. and U.K. So I just wanted to give you a flavor, a bit more about what it is that we do. And I'm going to take you back to a week ago, which was when I went to London to city hall for the launch of the MVP of the National Underground Asset Editor, for those of you who don't know 1Spatial very well, the government is looking to create a register of all the pipes and cables underground. And at 1Spatial, we've been engaged to do that, the data management side, bringing in all the data from all the 650 asset holders across the U.K., and it was really exciting to be there. And just see people really enthused about this, which is perfect from our perspective because we want these initiatives to carry on because they really are good for the whole of the economy. And actually, it was also -- that if any of you heard it -- it was actually very widely publicized. It was on the Today program. It was on BBC News. So very exciting for me, and I'm really happy to be there with the government. And interestingly, in the afternoon, we went out to HS2 and what we were doing is we were taking the tablet with the National Underground register pipes and looking down the holes at HS2 to see if it corresponded, it was just by coincidence that -- if any of you who have looked at this release, you'll know that we won HS2 in the year, which again is bringing all the data together this time, not the asset owners of all the pipes underground, but this is all about the contractors that are building HS2, building up the bridges, that tracks, the stations. And what we did with them is, is really, again, another pilot of bringing in all the data -- just from a selected number of the contractors in Phase II. And again, I'm really pleased to report that is going -- well, it's actually now we've really finished back these work now. So now where we're looking to see, well, HS2, how can we expand that? What else do we need to actually do this properly and start getting it into production. So Yes, a very exciting week for me last week. It's lovely to see everything that we're doing coming good. And why did we win these contracts? And I believe it truly is that unique position, our market-leading software platform. And this isn't just something that's happening in the U.K., but it is something that's happening globally, and that's really exciting for us too. If there's one thing I want you to take out of today is I really believe we are a transformational growth point for 1Spatial because we're going to use this platform or we actually are using this platform to build SaaS solutions. And these will really have a transformational growth for 1Spatial. And I'm going to talk about at the end, a traffic management plan where we're really using our core technology to do that. And just a quick summary for those of you who haven't seen it before of our market-leading platforms. When I think about our business in 3 key product areas. So at the middle, we've got our 1Integrate and 1Data Gateway, and this is where we really do these large projects, we do have quite a bit of services and partners are really required. And we don't win the [indiscernible] directly. We had to go through actions. We're -- because we're a fairly small still. We don't get on to the big framework. So it's really important that we have these relationships. But you can see in the yellow there, that's where we're bringing all the data through out -- from all the different sources into our 1Data Gateway that we released 3 years ago. And then we've got our patented rules engine and where all the magic happens. And the rules going in there on the left-hand side, in the gray is really important and I keep hold of that because I'm going to tell you more about that later on. And then in France, we have our business applications on top of the Esri platform. And on the right-hand side, this is a bit of what I'm really excited about. This is where we get real feasibility of software solutions in the U.S. settings like NG9-1-1 where we have much more targeted rules, where you can cookie cutter, and I'll tell you more about that later on. But this is where the traffic management plan is and where our best solutions are going to be. So really exciting for us. I do believe we need all 3 aspects to our business and particularly the core. But yes, that, in summary, is our way our business is fit up and where our technology fits. So in terms of the current year, this has been a year of focused investment in delivery so we've been investing in our cloud platform and 1Spatial platform, and this has been enabling us to release the SaaS solutions, and we'll talk about traffic management plan at later on, really launched that this year, early this year. We've been investing in sales team and processes. We've actually taken on 3 new sales directors in this new financial year, so FY '24, and we're really investing in our partner program. And the strategic focus is on the software license sales. But this has resulted in really good key wins and an expanded offer rate. So we've had a high value of contracts line in the year. We've got a good strong growing pipeline of prospects. We've got significant growth in recurring revenue. The U.S. is our largest contributor of annual recurring revenue growth. We moved into profitability, good cash, and we've got these SaaS offerings, which I'm really excited about. And so we've got this really strong basis on which to build as we head into the next financial year. And it's important to win new bid deals, and we are winning. We've landed new cost contracts in the period across all of our 3 key geographies and we've been expanding. There's always a lot you can do with data. So land and expand strategy is really key. Okay. And I'm now going to hand over to Stuart, who's going to take us through the numbers for last year.

Thanks very much indeed, Claire. So as I mentioned, I joined the company towards the back end of last year. So I've been in place, I guess, for about 4 months now. And I suppose it's been a very busy first 4 months with the year-end figures, annual audit and budget. And I'm really looking forward and excited about the position the company is now in. We really feel like it's at a point of inflection going forward, and I'll come on and talk about what our plans are for the future. What I'm going to start with, though, is I'm going to start with our key financial highlights from FY '23. So a very encouraging FY '23. As we can see, our revenue at a top line level grew by 11% year-on-year to GBP 30 million. So we've tipped over the GBP 30 million revenue mark, which is ahead of the expectations. But a very encouraging part of that revenue is the quality of the revenue we're now generating. So the recurring revenue element now is almost 50%, in FY '23, it was 49%, and we expect that proportion of overall revenue to tip over the 50% mark in FY '24. So we've increased 4 percentage points compared to last year, which is some really excellent progress and in line with the strategic focus and priorities that we had last year and those strategic focuses and priorities that we've got going into the future in FY '24 and FY '25 and beyond. The gross profit level, in spite of the hyperinflationary backdrop has remained constant at 52% year-on-year, which is really encouraging. And at a top line level, we can see that the gross profit has increased in line with the revenue amount at 11% year-on-year. A very healthy adjusted EBITDA amount for the current year has been generated at almost GBP 5 million, so GBP 3,000 off the GBP 5 million mark, a real significant increase compared to last year. So we can see the effect of the term license sales that we've been generating and all the recurring revenue elements of it falling down to the EBITDA line, generating higher EBITDA amounts and therefore, a higher adjusted EBITDA margin compared to last year. So we're now at 17% compared to 15% last year, which is really encouraging in terms of the sales mix. The costs that get us back to the operating profit level remain relatively consistent and similar to the previous year, but -- as a result of the increases in revenue and EBITDA, we can see a huge increase in the operating profit that we generated in FY '23 compared to last year. So we're now tipping over at GBP 1.3 million compared to GBP 400,000 last year, which is extremely encouraging, a 202% increase year-on-year. And as we go into the new year with an increase and bolstered level of recurring revenue compared to nonrecurring revenue, we're confident that these results can be repeated and beaten. As we move then into the cash flow for FY '23 compared to last year, we can see that we had an excellent performance in terms of cash flow generation and development. We increased from 5 -- from GBP 2.8 million to GBP 5.4 million. So that's a hugely significant increase. In terms of the amount of cash that we paid out and the cash that we got in from nonoperating cash generation. We can see that the largest increase in that is the expenditure on the product development. Claire mentioned in her opening presentation parts that we have been focusing on the development of our products making sure that they're fit for purpose and right for the market. And this year has been a year of investment in our cloud product and our SaaS offering. And we're confident that at the end of FY '23, we're in a very, very strong position going into FY '24 in terms of our product set. It's also notable that we generated free cash flow this year for the first time. So GBP 205,000 is a marginal free cash flow contribution, but a significant increase from the cash used last year of GBP 1.2 million, you can see down at the bottom on the right-hand side. In terms of the facilities, we are engaged in a number of long-term contracts, Claire alluded to those earlier on in the presentation. We did, therefore, negotiate banking facilities last year, a revolving credit facility of GBP 3 million, that expires in June 2025. So we're very confident with the liquidity of the group going into the new year. Net cash, it's worth noting has remained consistent with last year. So net cash is the amount that we have in our accounts, the gross cash, less our loan obligations that are mainly in Europe, we remain consistent year-on-year at a level of 3.1%. However, we did make a contingent consideration payment during the course of the year of 0.4. And along with other items, which contribute about GBP 1 million, our net cash position is much larger. We also made interest payments last year. As I move then into the financial highlights on a regional basis, we're extremely happy with the performance that we carried out in the U.K. and Ireland and the U.S. particularly. We can see huge levels of growth in both of those countries, a 20% year-on-year in the U.K., 16% year-on-year in the U.S. So some very favorable performances there. Australia did grow at a similar level, but it sells less in the way of our own proprietary software. It's mainly a reseller or third-party software. But in spite of that, the encouraging revenue growth does lead to a larger EBITDA margin at the bottom line for the group as a whole. So very encouraging signs from Australia. Europe is still in transition. So we are adopting across the group, the strategy of selling term licenses and going forward, the SaaS solution, Europe has a lot of legacy perpetual licenses where we're trying to move our customer base from a perpetual license model onto a term licenses model. We noted at the half year last year that it is taking a little bit longer to transition that over because of the number of customers that are in Europe but we're confident that all the new customers and the expansion into the existing large customers, it will be a term license and a SaaS sale approach first. And then over the course of the next -- over the course of the next periods, we will try and transition those smaller customers on to a term license model. But all in all, an excellent growth pattern across our geographies. We consider the proportion of revenue there on the bottom right, the significant components are the U.K. and Ireland and Europe. But we're very, very excited about the U.S. opportunity. Currently, that only makes 14% of our revenue. And going forward, with our strategy, we are looking to increase that as a proportion of the total revenue that we generate. So we touched on recurring revenue growth, and we've had some excellent performances this year in terms of revenue growth in the recurring revenue element. So we've gone up from a GBP 12.2 million contribution at a revenue level to a GBP 14.8 million contribution. And we can see that split fairly evenly between the U.K. and the U.S. and Europe, so some excellent performances there. And it gives us real confidence going into the new year with a significant amount of recurring revenue that's already been booked. So as -- as I mentioned, as a proportion of the overall revenue that we generate, we're almost tipping over at the 50% mark. So very encouraging signs going forward in terms of the revenue mix that we're generating at the moment and the plans for the new year. So on an annualized basis, then we're seeing also some significant increase, slightly higher increases in the in-year recurring revenue growth due to the timing of deals when they close. The annual recurring revenue was up 17%. So again, it's some very encouraging signs. And you can see -- in the bottom right, the split is between Europe, U.K. and Ireland and the U.S., which are the significant drivers in the increase. U.S. is operating from a lower base, but the opportunity in the market there is much larger. So we're confident that, that is going to be a significant contributor to the revenue line in the future years. That really deals with the FY '23 performance and how we've done compared to FY '22. We're confident that we're on a very positive trajectory. We're increasing to the recurring revenue and we're focused on generating increases at the gross margin level and also the EBITDA level. So in the middle of this slide here, you can see where we currently are. So in terms of our revenue split, there's very little, if any, generated by the SaaS products, that we're going to -- that we've talked about and that we're going to be talking about later on in this presentation. But as we move into the future, the significant proportion of our revenue, our strategic priority is to make sure that, that the significant proportion of our revenue is generated by our SaaS offering. And our SaaS offering has a much higher gross margin and therefore, EBITDA margin contribution than the existing business. We believe that the SaaS business has the potential to really transition. And it's a real point of inflection that has the ability to really move the business forward in terms of gross margin and EBITDA contribution. So how are we going to do that? So at the moment, we've been focusing on development and investment in our tech and investment in our people and making sure that we've got the right salespeople and the right sales teams in place to sell what is a really, really exciting product set in the SaaS environment and also our existing product, the one -- the existing engine products that we have. So we anticipate that we're going to continue to invest in these products going forward, but we've got the right team in place to really deliver and drive the sales of those products. So '24 and '25 are going to be really exciting years for us, a real point of inflection of the company. So in summary then, what are our goals? At the moment, the main goal and the strategic focus is making sure that we really capitalize on the investment that we've made to date. So we've invested a lot in our products. We're really satisfied with them. We've got excellent feedback on them. So it's about making sure that we really deliver now and drive the sales through. And as a result of those sales and those initiatives, we should really see some increases in the gross margin contribution and EBITDA all the way down to the profit before tax line. So that's the focus going forward. We have a really strong base going into the new year. So I'm really satisfied and happy with the position that we're currently in and the opportunities that we have for capitalization and for real growth, they're really there. So really excited about the future.

Looking ahead for FY '24, what are the key focus areas? Well, it's going to be U.S., partners and our really first SaaS solution that we're really getting behind, which is a traffic management plan under the banner of [1 Street Works]. So just in terms of the U.S., just to stand back a bit, if you think about the U.K., we have one Department of Transport. In the U.S., they have a Department of Transport per state. And therefore, you get this real cookie cutter of solutions and improved margins. So for example, in the U.K., we've got these great projects such as the National underground asset register, but there's only one of those. And we only have department transport. So we find a solution that such as we are now looking at and -- I know a lot of you are aware of, NG9-1-1 for emergency services. We win that in one state, and we can take that around multiple states. And that repeatability gives us obviously good scalable opportunities but also more profitability because you're repeating the same solution 50 times. So we believe in the states, there's an addressable market of $1 million, so $50 million is 50 million as an addressable market. And the way that we do that is we land in a state with an engagement, and then we look to grow it, our land and expand strategy. So in the year, we were -- we won a number of new states. So we won New York, Indiana and Arkansas with our NG9-1-1 solution. So that's really great. And then obviously, we expanded as well. So we expanded in California. We expanded in Maryland, we got on a framework for the transportation companies in the sort of Eastern Part of the U.S. So that's not all of our land. It's just a flavor of them. So we've got this 50 million opportunity in the states, and that's where we're selling term license. There will be a bit of services to that because even with NG9-1-1, you have to put it into the state and the services could vary depending on how much plugging in they want into other systems and to other bits and pieces. But now let's move into the SaaS world, and we are focusing on traffic management plan first because there is much more of a quicker market and bigger market to offer in the short term. But we're not neglecting the SaaS, and we have got some trials going on for our NG9-1-1 SaaS. So when I talk about SaaS, I mean one, installation of the software on our multi-tenancy cloud platform, and you can open it up potentially to 23,000 cities and counties. And we believe that is a $100 million market opportunity. And the pricing for that is around 7,000 -- we do it based on population. So it's 7,000 if you're a small city and county, 15,000, if you are a medium-size and 30,000 if you're large. So there is this scale of opportunity out there, but it's going to take time. So we've got to sell quite a lot of 7s or 15s or 30s to get to that 100 million. But we do believe it's there, and it's something that we're doing, and we are doing the trials. To be honest, trials are going really well. There's a kind of extra bits that we might put in our platform in H2, but this is something we are definitely going to launch. And I'm really pleased to note that we've got a new sales director in the U.S. from April 23. So we literally just joined this month. And that's going to really help us develop and scale the team. We've done really well in the U.S. We've got a fantastic CEO there, [indiscernible]. She's done an amazing job of growing us and where we started the in the first months that we've got. But we really need to grow more because the opportunity is just so far. So she is really going to be sort of looking at our big accounts, Google, Federal. And obviously, working with our new sales director. He's going to be building those teams out. We've got some investment in next year, ready for obviously, with the Sales Director, but also 10 additional heads on top of our 30 in the U.S. to really capitalize on the opportunity there. So that's the U.S. The next thing I want to talk about is growth with partners. You'll recognize this diagram from the beginning, where, as I said that we were the intersection of 2 key global growing markets, and we need partners in both sides. So if you think about the platform for 'National Underground Asset Register, we're bringing in data from all different data sources. So all these different asset owners who have spatial data in all sorts of different systems could be an Esri, Hexagon Ordnance Survey. So it's really important that we still have a really good understanding of spatial data because that's what our offering is a fundamentally based on. But we really need these relationships. We need to understand the systems and the data. So on that side, it's really important we work with the geospatial information systems partners. Obviously, in France, we've got our platform built -- we've got our solutions, which are built on the SV platform. But on the right-hand side, this is a bit that's really interesting for me. This is what we get in the market access. So we would have been able to win the National Underground Asset Register unless we'd engage with Atkins because we just went on the framework. And there's big massive digital transformation projects happening. We can't do all of it. We would have focus on the bit that we're really good at, which is this intersection bringing spatial world and nonspatial world ever, lots of different data types, lots of data because there's no one else, I believe, really focusing on this. So that's what we're doing. But it's really important to get in with these -- big sort of partners and we've won some new engagements in the year with rising CGI and ATOS. And really, really excited, and we've got a new partner actually not so much new, has been in for over a year Warren Gilmour, ex IBM, who's really helping us to expand those partner offerings. And we've got some really good ones now. I think we now it's about working with them is a quote there from the work that we're delivering Atkins. So we're working with Atkins on the National Underground Asset Register has been a real success. Obviously, we launched the MVP. I talked about earlier. But there's other opportunities we believe that we can really go forward with the Atkins in the U.K., so that's exciting. Okay, then on to the final bit, which is a bit -- Well, Stuart talked about and I've talked about, this is the bit that we really do feel is a transformational growth opportunity for it. So just to give you a quick high level about what traffic management plan is. If you want to dig a hole in the road, you can't just go ahead and do that. You're going to have to -- you have to go and apply to the local authority that you want to do it. And you have to give them something called the traffic management plan. So they can see on the left-hand side is an example of a traffic management plan and it sort of shows where you're going to put the cones and slowing downside. And behind that is a rulebook that did take how you lay out all those cones and signage. And that's what we've done. We're able to create a SaaS solution which automatically creates these traffic management plans in 2 minutes. And if you look to the right-hand side of the slide, you can see how this has been architected because it is fundamentally our platform that is powering this. So the diagram you will be familiar with from the one earlier. So the data that we're taking in is from Ordnance Survey. So that's big part of the data. And we're also taking in some data from what -- some information from what [ 3 words ]. So if you're a utility company, we need to dig up somewhere in a country lane, there isn't a post code. You need the what 3 words -- I'm sure most of you are familiar with that. So that's the data we're bringing into our platform. There is a lovely front end on it, but actually behind the scenes, it's 1Data Gateway that's bringing in the data and that it's the 1Integrate that's during the real magic. So it's taking the rules from the rule book. So that rate book there is book that says, this is how you create traffic management plan. And it's our 1Integrate that's bringing the data from Ordnance Survey, that will book together to create this traffic management plan in 2 minutes. Now I've got a video that I'm going to share with you now. So I'm not going to spoil it because there's some good information in this video, but I will come back after the video and talk about it a little more. [Presentation]

Okay. So I hope you enjoyed that video. It should have given you a good flavor of what the solution is doing. So just to recap a couple of the key points. I mean, it's the first solution to the market to fully automate the production and traffic management plan. They're currently either done manually or really just drawing in CAG. There's nothing that actually automate in 2 minutes, the creation of a compliant plan because we're using data and we're using a rule book. It ensures compliance with rules. It says time and money, including fines and addresses work resource and skills issues. And that case study that was on the video is true. We actually sat with someone who is a very competent traffic management planner and he said, on average, on a good day, he could do 9 plans in 1 day. But when we sat with him, using our software and sort of ticking -- running the plans through that. We've managed to do with us 15 plans in 1 hour, which is transformational. We can actually do in every 2 minutes, but offers in reality, 15 plans in an hour is amazing versus 9 in 1 day. This is a GBP 250 million market opportunity just for low-speed rows. And it's currently costing around GBP 500 million, but that really is just the cost of doing the plan. There's lots of other costs associated with this by fines -- and by planning, meaning people going back and forth to [indiscernible] which is costing probably thousands each plan. But the market opportunity calculation is based on GBP 2.5 million in the year and our initial costing that we're going to go out to the market is GBP 100 a plan. Yes. Over the years, this has been something that I've been really developing since I've been CEO. It's been a bit to stop start with COVID, but we really have developed it over last 3 years. The last year, I've got the real traffic management experts on Board in my business now, they have really helped us power through this, and that's been a lot of the R&D expense this year. But there has been true rigorous review by the whole organization, including people on our Board. So we are absolutely happy that we've got a really solid proposition and solution here. And we are building big pipeline [indiscernible]. We've gone -- we've got a number of opportunities in our pipeline. All the technical users we show it to -- that without fail go, wow, we need one of these. So -- we're now starting to get into -- we're not -- we are doing demos and being with people, but we've not just let everyone have access to our platform. We are going to charge for access to do sort of trial period and that's what we're now sort of in procurement. So it could be a [indiscernible], you take the software for a 3-month period, you can do 400 plans, get the organization using it because we believe once these organizations are using it, they won't go back. So we are very excited about it. So we've got opportunities for trials in the pipeline. We've also got the big full-blown opportunities in the pipeline, and it was growing. I was at the Hawk highways event on Tuesday, I was in Manchester in [indiscernible] that's right. And -- we showed this just before the break. And then at the break time, we had 20 people asked and wanting to get demos on this, and this is the local authority. So there's 3 key customers for this, you've got utilities, traffic management companies and then the local authorities. And the sort of final point that is very exciting, as Stuart mentioned before, this is really is pure SaaS. No service revenues, quick to access, one platform to manage and we should be getting gross margins of around 80% on this. So it really is exciting. So what are the objectives and outlook for FY '24? Well, we just got to get on with capitalizing on this traffic management opportunity in the U.K. We've got to capitalize on the opportunity in the U.S. We're going to continue to invest in our platform. It will probably be a similar level to last year, but we still need to invest in all these products and SaaS solutions. We're going to maintain and expand our partnership strategy in all key geographies. And obviously, we want to push all the financials for it. So in terms of outlook, we had a solid FY '23 performance with high profile wins in all key geographies, really given us confidence for the future. Trading in the new financial year has begun positively, really growing the pipeline and we're continuing to grow our annual recurring revenues, which is really important, along with our backlog of revenues has really provides us comfort in this challenging macro environment. And we are increasing investment in our sales, particularly in the U.S. and behind these SaaS solutions to really scale up and capture this substantial opportunity that we have in the U.S. and with traffic management. So that's it from me, and I look forward to answering any questions.

[Operator Instructions] I'd like to remind you that a recording of this presentation, along with a copy of the slides and the published Q&A can be accessed via your investor dashboard. As you can see, we received a number of questions throughout today's presentation. And Claire, if I could just ask you to read out those questions and give responses where it's appropriate to do so. I'll pick up for you at the end.

Okay. Well, let me take the first one from David B. Great progress and exciting prospects for 2 SaaS products. How do you identified other propositions that could be vetted to SaaS model? The answer is yes, and we are looking at a number of those. I don't really talk about everything because there's so much going on 1Spatial, we do need to focus. But we are looking. We always have -- we have our product owner who's looking -- well, how can we take this product to SaaS, and we are doing that. But if we just stick with the traffic management for a moment, there's so much opportunity in that. I don't want to -- we all have to have some limited sources. We don't want to get too sidetrack. So we do need to get some focus behind that. But if we just start with the traffic management, we've got it from those speed roads, 2.5 minutes. We're pretty much finished and we can add some other little edge capabilities that we've done on that really. We've got high-speed roads that we're going to be looking at next to the U.K. And then we believe the next territory is going to be [indiscernible] because they've got some similar rules out there, there's compliance. And we have to have a good data set, we have all [indiscernible]. We have to have a good data set [indiscernible]. So the answer is yes. We've got lots of ideas -- I have to keep a bit of a control of how much do those work on too many things and don't keep focused. But yes, there is a lot. And that's why it's really important to invest in our core platform as well as the SaaS solutions because one drives the other. So going on to the next question, [indiscernible] NG9-1-1, Stuart, -- or do we need to come back to that at the another time?

That's fine. I can take that. So the EPS figure in [indiscernible] now is an adjusted EBITDA figure. So it doesn't -- so it takes out amortization, depreciation and other sort of nonrecurring items. So that's why there's a difference between EPS figure because it's adjusted as a [indiscernible] figure based on the profit before tax divided by the number of shares in issue and then the diluted, which is the options. So that's that.

Okay. This is another question. [indiscernible] market cap is almost 3x higher than 1Spatial, revenues are similar and non-spatial is margin property. Why are they making more higher than it? Well, that's a really good question, and it's something we -- obviously don't completely understand why [ IPGO ] does create acts in the utilities and telco space. It is in the geospatial market. So we could look at it two ways where the IPGO is slightly overvalued or we are massively undervalued. And I don't know even if you saw the RNS this morning, but I bought 40,000 of shares yesterday because I do see us being very undervalued, and we are at that point of inflection. There's one from [indiscernible] here about a dividend [indiscernible] that we've got to wait before the company starts to pay the dividend. I'll let Stuart answer that but considering we have so much cash. We have got -- we generated operating cash this year, but we've got such a big opportunity ahead of us. We want to invest that cash back into the business, into R&D, into our products to really execute on the big opportunity that we have there. I mean, once we get to the SaaS and we're really masses our profits, our big EBITDA levels with big generations of cash, then we might look to do that. But I don't know if you want to add anything to that, Stuart.

I think you some [indiscernible] be honest. We've got -- we've got some really exciting opportunities. We're going to continue to invest where we see the requirement. And then if there's any opportunity for us to pay a dividend when we start generating significant amounts of margin from the SaaS offering, then it's certainly something that we're definitely going to be considering. But at the moment, as you say, it's a point of inflection. FY '24 is a transformational year, and we'll see where we are at the end of '24.

Okay. David B. In addition to your NG9-1-1 solution, are there other cookie cutter propositions in the range of contracts you sold in the U.S.? Yes, we've got a number that we sell, probably NG9-1-1 is the most repeatable and one that people can relate to. We have one called HPMS is around getting your data right, that you have to submit up from state level to federal level, and that's around -- they have to do that every year about quality of bridges, sidewalks and all of that, and we think that, that's a good cookie-cutter approach. We also have -- we've got a number of departments of transport that are doing that, and we think that could be a good growth area this year. We've got just our conflation products that we do, which is bringing 2 data sets together. I call that 1 plus 1 equals 3. So you might have some road day so that has -- you've had it for years. It has some information on it, I don't know, about side walks, trees, valleys in the road. And there's to be some new captures more accurate spatially up-to-date data is getting more accurately captured now. But you want to keep that information from the old data into the new. We often do a lot of completion project. So that expand in Maryland and the last logo, Eastern transportation Coalition it's a lot of those completion projects. And yes, we also got spatial data infrastructure that we do for Michigan. It's just helping them bring data together from lots of different sources to create a more format. So yes, we think we've got more than just NG9-1-1. Another question here from MGM. Can you update us on how the trial is going for TMP, which started in November? Has there been some pushback from industry and competitors? So I don't quite get all of that. But [indiscernible], in November, we launched. We did a soft launch of traffic management plan at the highway to [indiscernible] because we wanted to show everyone -- but we haven't really started -- we didn't have the cloud platform and everything in the proper state to really launch this until the start of this year. So we did really go properly to launch [indiscernible] this financial year in February. And the thing that we have found a little bit frustrating is just the -- I would say there's all the birth [indiscernible] and then -- which they're not the traffic management companies, they're very involved in -- and then there's some actual year for the government is all on March. So there's been a lot of focus on getting to KPIs and getting everything done before the end of March. And we still absolute massive reengagement in April, so since the 1st of April. But what we've been doing is that we've got all the technical buy-in, which is what I mentioned before, so all the technical buyers, we've got our 2 -- our Managing Director of traffic management and his associate [indiscernible] they've been going around and the people with the track management won't hit. So now we're really into the next phase which is how do we procure this and get this through the procurement level. So some of these deals, 90,000 plans in some utilities which could be GBP 9 million of annual recurring revenue. We're not going to get back to procurement. We're not that naive, but we've always -- what we want to start is trial packages, take 3 months, 400 plans, 50,000 use that from a department or whatever traffic management within your business, see how it's working for you, and then we can use that to help shape the procurement process to get the buy-in. And that's really going to be our plan in terms of going to market. David B. [indiscernible] we appears very attractive in the imperatives to market adoption, please do discuss the market dynamics and how solution will be received? I think the barriers to market adoption is quite disruptive. So we've got to go back to the video, you've got people, [indiscernible] screens. They've got some cat software they're currently used to draw. So if -- with traffic management companies, it could be potentially easier because they can just sort of take it and use it. But the utility companies and other organizations is going to be, we're not naive. It's going to be a bit of a sale to understand there might have to be changes internally. But there are bandwidth issues. So there's no will -- it's just maybe a cultural or operational barrier within the organization because the market is there, the need is there, compliant plans are needed -- so I'd say there's not apart from this internal aspect. I don't know if you want to talk a bit more about that, Stuart. Good observations, actually.

Yes, I suppose the feedback that we're really getting is that the people who are responsible for the traffic management plans do have bandwidth issues. I mean in terms of their capacity, we feel that we can really sort of go some way to addressing that through these plans. So I guess if -- and I talked about it before in terms of the fines that are levied on these companies as a result of either providing noncompliant traffic plans or not providing traffic plans in time, we feel that, that is really the sort of -- that's the strategy, and that's the proposition that we have for these larger companies where we can say, look, we can relieve your pressure or relief your workforce of some pressure, we can address some bandwidth issues, and then once the product is in, we know that we'll be able to -- they will see the benefit from it. Because the feedback that we've been getting when we're showing this product around has been absolutely excellent, from all the technical buyers are so interested in it, and everybody is really -- I suppose I'm very surprised that the actual quality of the products -- so we're satisfied. The product quality is absolutely there. It's about just propositioning it correctly to the traffic management companies, and we believe there really is an opportunity that's going to help both parties it's really going to help with bandwidth issues, it's really going to help get it in front of the right people so they can see how powerful the product is. So that will be my main observation.

Thank you. David B. Is all your IT investment made internally with our internal staff of resources? That's correct. Yes, it is. [indiscernible], what is the competition in the U.S. in the NG9-1-1 domain? So get at this question regularly, it's GEICO Michael Baker used to be a partner of Atkins [indiscernible] NG9-1-1 with them. And we want it together and then they said they didn't want to work with us anymore. They are still doing that implementation for that 1 state, still going on 18 months later. In that 18 months, we've won 8 states and all of our implementations are done in 6 months. There is competition, but we are winning in the market because we have a repeatable solution with a world-leading rules engine, managing all that data. So we're in a good position, but it is competitive. Tim M, do you want to do this cash flow one, Stuart?

Yes, I will. So -- so just to sort of answer this in reverse order, I don't think -- so will the company continue to be cash flow positive going forward? Or will you need to raise some more financing to grow the business. I think there's a correction let's say, grow the business. So yes, we do anticipate the company is going to be cash flow positive going forward. We do have these long-term projects that are ongoing in the U.K. that do bear on our working capital a bit, but we're satisfied that we've got enough other business there that's going to generate positive cash inflows going forward. And I did mention during the course of my presentation that we do have this revolving credit facility available, which increases our liquidity by GBP 3 million. So at the end of January '23, we had GBP 6.1 million liquidity. Going into 2024, I don't anticipate that we're going to need to raise more financing from anyone other than just drawing down the facility if we even need to. But as at the end of January and the end of April, so as of today, basically the facility is undrawn. So in short, no, I don't anticipate any further financing.

The next question from Mark, renewals are running at less than 100%. What are you losing to? -- i.e., competitive solutions -- put my spin on that and then Stuart can give you an answer on that. I mean -- we don't ever really get displaced in these big platforms and with our [indiscernible] data management. I think the more competitive pace that we do tend to lose more is in France, where we've got our solutions on the Esri platform. And I think that's the majority of where we get the attrition buck. I don't know if you wanted to add anything more on that, Stuart?

No, that's absolutely right. It is. I mean -- and let's just be clear. Our renewal rate here is increasing year-on-year from 93% to 94%. So that is a significant win rate. It shows that our products are really well-valued and very sticky in our customers. But as you say, Claire, there is a little bit of churn, but not a significant amount. And individually, the contracts that we are losing are relatively small. So yes, that's what I would add.

So Tim, how management incentivized to you and a substantial amount of shares options in addition to the recent purchase? So yes, we do have share option schemes, long-term incentive plans in place and yet I've been buying a lot of shares into my sit [indiscernible], myself over the last sort of few years or so. So as I said , I thought we have 40,000 yesterday because I really do think we are at this point of inflection.

And I do intend to buy something. I'm very confident in the trajectory of the company. But since I've joined, we've sort of been in close periods and all this type of stuff and -- so as soon as I'm able to, I will say buy some shares as why I'm very confident in the direction of the company.

I think actually manage to address every single question probably -- and of course, the company will review all the questions listed today and will publish those responses on the Investor Meet Company platform. But just before redirecting investors provide you that feedback, which knows particularly important to you both. Claire, could I just ask you for a few closing comments.

Yes, just give a initial one closing comment. I think we have got rock solid foundations with a major upside that could really transform the numbers. So we are very excited. And the traffic management plan is something that I have really progressed, with ever since I've been CEO. It's been a bit tough start, but we finally got to this point and that every single sign is very, very positive. So we're really excited about the future.

Stuart, thanks once again for updating investors today. Could I please ask investors not to close this session, I do now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations. So it will take a few moments to complete, some should be greatly valued by the company. On behalf of the management team of 1spatial plc, we'd like to thank you for attending today's presentation, and good morning to you all.