SPA has announced that following a successful trial, UK Power Networks has signed a contract to deploy 1Streetworks, 1Spatial PLC (LON:SPA)’s traffic plan automation application. This is a landmark win for this key SaaS product, the market opportunity for which management sizes at £400m for UK low-speed roads alone. The contract is worth at least £0.34m over 12 months, but with scope to significantly exceed this over time and UK Power Networks advocacy for the product is notable. A growing pipeline of paid trials with other clients provide further evidence that 1Spatial is moving closer to delivering an acceleration in operationally geared recurring revenue growth. 
Live deployment, important reference customer
UK Power Networks is a high-profile reference customer for 1Streetworks. The business maintains and operates the electricity networks for London, the South East and East of England. This involves a significant volume of roadworks each of which requires a traffic management plan to be submitted to the local authority. This contract win follows the completion of a trial in Surrey in which the implementation of 1Streetworks reduced the average connection time by 25% across around 300 roadworks sites, while reducing surveyor time spent producing traffic management plans from hours to minutes. Paul Dooley, from UK Power Networks, presented details on this trial and the benefits gained from of using 1Streetworks at 1Spatial’s user conference last November. UK Power Networks SDSW Presentation
Scope for significant expansion, growing pipeline
The minimum value for this contract is £0.34m over 12 months, but we believe this has the potential to expand significantly with good surveyor uptake and adoption in additional regions or departments. 1Spatial also has paid trials ongoing with four other customers, while a number of others are expected to start this year.
Milestone on the way to faster, scalable growth
Further conversion of these opportunities should generate significant incremental, high margin recurring revenues, although, due to the use-based business model, the contribution to FY25 estimates will depend on the timing of deal flow and uptake. We are not changing our estimates at this stage but believe that this milestone, together with the solid progress 1Spatial is making with its enterprise business, brings the company closer to delivering an acceleration in operationally geared recurring revenue growth. We look to further progress with 1Streetworks, and NG-911, the company’s other key SaaS product, as the key milestones for this potential to be reflected in our estimates and the company’s valuation.
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