REG - Oxford Metrics PLC - Interim Results for the 6 months ended 31 March 20
21st May 2020
Oxford Metrics plc
("Oxford Metrics", the "Company" or the "Group")
Interim Results for the six months ended 31 March 2020
Oxford Metrics plc (LSE: OMG), the international software company servicing government, life sciences, entertainment and engineering markets, announces interim results for the six months ended 31 March 2020.
H1 FY20
H1 FY19
Revenue
£15.0m
£16.1m
Annualised Recurring Revenue
£6.8m
£5.9m
Adjusted Profit before Tax*
£0.3m
£1.7m
Statutory Profit/(Loss) before Tax
(£0.1m)
£1.2m
Net Cash
£10.8m
£10.9m
Cash as at 20 May 2020
£14.2m
-
* Profit/(loss) Before Tax from continuing operations before Group recharges adjusted for share-based payments, amortisation of intangibles arising on acquisition, change in fair value of deferred consideration payable and unwinding of associated discount factor, Pimloc and exceptional costs
Commenting on the results Nick Bolton, Chief Executive said:
"The Group had a strong start to FY20, recording our second highest ever first half revenue performance. COVID-19 forced lockdowns in March caused a delay in shipment of Vicon orders during the final two weeks of the period which meant we carried orders into the second half. Post period end, these have now been largely shipped to customers.
This first half performance owes much to the hard work of our people whom I would like to thank for adapting brilliantly to this new working environment and for their ongoing efforts to service our global customer base.
The strategic progress we have been seeking to maintain around growing our recurring revenue base and developing our credentials in Yotta as a true SaaS business has continued.
Our business, like any other, is not immune to the effects of COVID-19 and we continue to monitor the evolving situation closely. The Group's fundamentals remain strong and our robust balance sheet will help Oxford Metrics to navigate the current challenges, whilst continuing to drive innovation."
Financial Highlights
●
Strong performance until last two weeks of March as a result of the government imposed restrictions and shutdowns in response to COVID-19
●
Headline Group revenue of £15.0m, down 6.5% (H1 FY19: £16.1m), as unable to fulfil £1.1m of Vicon orders during last two weeks of the first half due to global operational shutdowns. These orders have now been largely shipped to customers and will be recognised in the second half of the year. This delay in shipments had a £0.9m impact on profitability
●
The Group reported an adjusted profit before tax £0.3m (H1 FY19: £1.7m)
●
Adjusted earnings per share 0.17p (H1 FY19: 1.18p)
●
Cash generated from operations (before paying interest and tax) £1.0m (H1 FY19: £3.3m)
●
Strong balance sheet with no debt and cash of £10.8m as at 31 March 2020 (H1 FY19: £10.9m) after the payment of a final dividend. Cash position at 20th May £14.2m
●
Growth initiatives at Yotta yielding results:
o Improved visibility with Annualised Recurring Revenue ('ARR') up 14.6% year-on-year
o 95.8% (FY19: 93.2%) retention of growing SaaS customer base
Operational Highlights
Strategy for Vicon: strengthen and protect profitable market leader
●
Notable wins with game companies Konami in Japan together with Tencent and miHoYo in China
●
Continued innovation to enhance Capture.U app for iPhone/iPad, allowing physiotherapists and sports scientists to analyse motion on the go and see human skeletal movement and inertial measurements overlaid onto live video in real-time
●
IMU Step, the SaaS solution for our Elite Sports offering, continues to gain traction with new wins in the NBA, NFL, MLB, NRL and AFL as well as with a number of collegiate athletic and health science programmes including University of Kentucky, University of Montana and Harvard Medical School
Strategy for Yotta: develop cloud-based software products and grow recurring revenue
●
Strong sales performance for our Connected Asset Management Software-as-a-Service (SaaS), Alloy
●
New wins across the UK, including: Warwickshire, South Gloucestershire, City of York, Somerset, Worcestershire and at waste services contractor, Ubico
●
Notable international activity in Australasia with Alloy roll-outs at Auckland System Management and a new win in Australia at City of Parramatta
●
New flagship partnerships secured:
o Panasonic to run Alloy on their in-cab devices in waste collection vehicles
o Telensa, the UK's largest provider of smart IoT streetlights, to provide a seamless lighting solution and control groups of streetlights
o bbits as part of their "Love Clean Streets" initiative
Outlook and Guidance
●
We are currently not experiencing any supply chain issues but will continue to take prudent actions as needed
●
The Group is mindful of the current unprecedented macro-economic environment therefore has elected for the time being to withdraw market guidance for the full year
●
Clear guidance will be reinstated at such time as when visibility improves
●
Our strong fundamentals provide confidence that the Group can navigate the current challenges
For further information please contact:
Oxford Metrics
+44 (0) 1865 261860
Nick Bolton, CEO
David Deacon, CFO
FTI Consulting
+44 (0) 20 3727 1021
Matt Dixon / Emma Hall / Jamille Smith / Greg Hynes
N+1 Singer (NOMAD and Broker)
+44 (0) 20 7496 3000
Shaun Dobson / George Tzimas (Corporate Finance)
Tom Salvesen (Corporate Broking)
About Oxford Metrics
Oxford Metrics develops and markets analytics software for motion measurement and infrastructure asset management to customers in over 70 countries worldwide. Our list of clients across the globe is as diverse as the markets we operate in; we help highways authorities manage and maintain their road networks, hospitals and clinicians decide therapeutic strategies and Hollywood studios create stunning visual effects. And the diversity of applications is growing all the time.
The Group trades through two subsidiaries: Vicon and Yotta. Vicon is the world's leader in high precision motion measurement analysis to thousands of customers worldwide, including Guy's Hospital, EA Sports, MIT and NASA and our software is used in an ever expanding range of applications. Yotta provides cloud-based infrastructure asset management software to central and local government agencies and other infrastructure owners. Yotta has a large number of high profile clients including Highways England and Amey in the UK and VicRoads in Australia amongst others.
Founded in 1984 our Group is headquartered in Oxford with offices in Leamington Spa, Gloucester, Los Angeles, Denver, Singapore and Auckland. Since 2001, Oxford Metrics (LSE: OMG), has been a quoted company listed on AIM, a market operated by the London Stock Exchange.
For more information about Oxford Metrics, visit www.oxfordmetrics.com
Chief Executive's Statement
COVID-19 Response
The Group had a strong start to 2019/20, recording our second highest ever first half revenue performance. When COVID-19 struck, we rapidly introduced measures to protect and ensure the safety of our people. As a global business, we have the infrastructure in place for our teams to stay closely connected and operate seamlessly from wherever they are. Almost all staff have been working remotely since lockdown commenced and no one has been furloughed. The team has adapted brilliantly to this new working environment and I thank them for their flexibility and dedication.
March is always a particularly busy month and for the last two weeks of the month we were unable to complete the shipment of customer systems within our Vicon business, because of the lockdowns in place in the UK and US. This led to us carrying over £1.1m orders into the second half, which have now been largely shipped to customers and will be recognised in the second half.
Following a closure of four weeks, a small number of Vicon production staff have now returned to company offices to ensure systems can be manufactured and delivered to customers. This required adapting working practices to protect employees, including moving to a two-shift work pattern, introducing a one-way system around the building and increasing the spacing between workstations. This team deserves a special thanks as their commitment and ingenuity has enabled us to continue to make and ship systems to our customers around the world.
Across the business, our teams have been working hard to ensure customers have what they need to continue to access our solutions and services. This has included, where our customers are running essential public or health services, extending additional software licenses free of charge to support their expanded work teams.
Looking to the future, although none of us can be certain of the challenges the aftermath of this pandemic will bring, the business stands resilient and ready. We have an improved level of revenue visibility and a strong balance sheet with £14.2m in cash as at 20 May 2020 and the Group remains debt-free. We are diversified across multiple vertical markets with long-term positive growth drivers, and hold powerful competitive positions with multiple defensible barriers to entry. We offer products and services which are clearly differentiated from our competitors and most often distinguished by the strength of our technology. We operate in over 70 countries worldwide and have no significant exposure to those sectors most affected by lockdowns, such as the travel and hospitality industries.
The commitment of the whole team places the Group in a strong position to navigate the challenges likely to arise from the impact of COVID-19.
Trading Performance
KPI
Revenue
PBT
Adjusted PBT*
H1 FY20
H1 FY19
H1 FY20
H1 FY19
H1 FY20
H1 FY19
Group
£15.0m
£16.1m
(£0.1m)
£1.2m
£0.3m
£1.7m
The Group reports a strong revenue performance, recording our second highest ever first half revenues. However, COVID-19 government imposed restrictions and lockdowns in March caused a delay in customer shipments at Vicon during the final two weeks of the first half, which led to carrying forward £1.1m of orders (H1 FY19: nil) into the second half of the year. These orders largely account for the decline compared to last year. Consequently, the Group reports total revenues of £15.0m (H1 FY19: £16.1m), down 6.5% on last year's record at a headline level and 7.0% on a constant currency basis.
The enforced delay to revenue recognition largely accounts for the decline in reported Adjusted PBT* to £0.3m (H1 FY19: £1.7m).
In line with our strategic plan to increase the visibility of revenues and profits, the Group increased Annual Recurring Revenues ('ARR') by 14.6% year-on-year to £6.8m (H1 FY19: £5.9m).
The cash position, having paid a final dividend of £2.3m in the first half, finished at £10.8m as at 31 March 2020 (H1 FY19: £10.9m). Cash generated from operations during the first half was £1.0m (H1 FY19: £3.3m); the decline accounted for by the aforementioned trading performance.
Asset Management Division - Yotta
KPI
Revenue
PBT
Adjusted PBT*
H1 FY20
H1 FY19
H1 FY20
H1 FY19
H1 FY20
H1 FY19
Yotta
£3.7m
£3.5m
(£1.2m)
(£1.0m)
(£0.5m)
(£0.2m)
Yotta reported software revenues up 4.6% to £3.7m (H1 FY19: £3.5m). Annualised Recurring Revenues ('ARR') as at 31 March 2020 grew 14.6% year-on-year to £6.8m (H1 FY19: £5.9m). The retention rate also improved to 95.8% (H1 FY19: 93.2%). We can also report that additions in the first half of £0.8m are contracted over the next three to four years with a Total Contract Value over this period of £2.8m.The first half delivered a strong sales performance for our Connected Asset Management Software-as-a-Service (SaaS), Alloy. There were new wins across UK local government, including at Warwickshire, South Gloucestershire, Blackburn with Darwen, City of York, Somerset, Worcestershire and at waste services contractor, Ubico. There was also good customer activity in Australasia with roll-outs at Auckland System Management and a new win in Australia at City of Parramatta.
Yotta also announced new partnerships during the first half with three key providers in the marketplace: with Panasonic to run Alloy on their in-cab devices in waste collection vehicles; with bbits for their 'Love Clean Streets' product to provide an integrated platform for feedback between the council and citizen; and with Telensa, the UK's largest provider of smart IoT streetlights, Alloy enables a completely seamless lighting solution to control groups of streetlights and other wirelessly connected sensors. It was also a strong period for Yotta's professional services group with a five-year agreement with South Tyneside for Horizons and asset management consultancy, eight Alloy "go-lives" during the period and 12 migrations underway from Mayrise to Alloy.
Yotta's product line-up was also enhanced in the first half to ensure the product keeps pace with market demand and opportunity. For example, Street Manager functionality was delivered on time to enable 80+ customers to work with the Department for Transports new Street Manager initiative, and Custom Reports and a Task Assignment Tool were also added to Alloy.
The transition to a 100% SaaS Business model is complete so Yotta reported no perpetual licenses in the first half (H1 FY19: £0.2m). This factor together with increased R&D Amortisation led to an increase in Adjusted PBT loss of £0.5m (H1 FY19 £0.2m). The Group has worked hard to pivot and transition Yotta's business model, which is now providing the Group with higher than ever levels recurring revenue and enhanced visibility. Notwithstanding challenges that may arise from COVID-19, Yotta is well placed to deliver a profitable second half.
Motion measurement division - Vicon
KPI
Revenue
PBT
Adjusted PBT*
H1 FY20
H1 FY19
H1 FY20
H1 FY19
H1 FY20
H1 FY19
Vicon
£11.3m
£12.5m
£0.9m
£2.2m
£2.0m
£3.3m
Vicon reported revenues of £11.3m (H1 FY19: £12.5m), representing a year-on-year reduction of 9.6% at a headline level (10.3% on a constant currency basis). Vicon carried over £1.1m of orders which could not be shipped during the last two weeks of the half due to enforced restrictions in response to COVID-19.
Vicon also reported a slight decline in gross margin at 73.8% (H1 FY19: 75.4%) in the first half which was revenue mix related. This together with an increase in investment of £0.2m in Elite Sports and an additional £0.1m of R&D Amortisation led to a Vicon reported Adjusted PBT* of £2.0m (H1 FY19: £3.3m) and an unadjusted profit before tax of £0.9m (H1 FY19: £2.2m).
The implementation of our "amplify the core" strategy at Vicon aims to strengthen and protect a profitable market leader, driving the business through two key growth vectors, Established Markets and Adjacent Verticals - both saw notable highlights during the first half.
Established Markets - strength in leadership
During the first half we enhanced our product lines in most of our vertical markets, including adding a Machine Learning-based finger-tracking solution in Shogun 1.3 for the entertainment market and hard synchronisation with our Blue Trident Inertial Measurement Units ('IMU') in Nexus 2.10 targeted at our Life Sciences customers. This helped drive strong sales of our Blue Trident devices, especially in North America.
We also updated the ground-breaking Capture.U app for iPhone/iPad which uses Vicon inertial sensors. By leveraging Apple's Augmented Reality Kit 3 in iOS 13, researchers can now see human skeletal movement and inertial measurements overlaid on live video in real-time. This enables a low-cost entry point for physiotherapists and sports scientists to use Vicon technology to analyse motion in a highly portable, intuitive manner.
These new innovations combined with Vicon's existing clear market differentiators helped underpin the first half performance which included notable wins in the Asia Pacific region with game companies Konami in Japan and Tencent and miHoYo in China.
Adjacent Markets - developing new growth vectors
In addition to growing our Established Market business, we also seek further growth by applying our motion measurement technology to more nascent markets but with the opportunity for higher levels of growth. We are currently focussed on two specific opportunities: Location-based Virtual Reality ('LBVR') and Elite Sports.
LBVR revenues of £0.7m (H1 FY19: £0.4m) improved compared to the first half last year. As expected, compared to the second half of last year traction was slower as our partner organisations began to roll out their VR experiences worldwide and fine-tune their business models. We remain excited about the opportunity for growth in this segment but we do recognise it is likely that revenues will be adversely affected for a time following the COVID-19 pandemic with ongoing social distancing measures in place.
Our Elite sports offering, IMU Step made further progress in the first half. We added comprehensive Impact Load assessment, enabling coaches to examine the loading outcomes of specific activities, drills and training days, and their respective effects on an athlete's workload.
IMU Step continues to gain recognition and respect within the marketplace and as a result of increased investment in our sales channel of £0.2m compared to the same period last year, we won new teams in the NBA, NFL, MLB, NRL and AFL as well as with a number of collegiate athletic and health science programmes including at University of Kentucky, University of Montana and Harvard Medical School.
Outlook
As we enter our traditionally stronger second half, we are mindful of the current unprecedented macro-economic environment and how this might affect our business. Our primary focus is on ensuring the well-being and safety of our employees and ensuring we can provide an uninterrupted service to all our customers.
At Vicon, the revenue risk relates to whether customers delay or otherwise defer system acquisitions or upgrades, especially in Vicon's European and North American markets. On a positive note, in Vicon's Asia-Pacific region, business activity appears to have restarted so timing here is currently more predictable.
At Yotta the business is relatively well placed as revenues are largely pre-contracted with government customers delivering fully hosted, cloud software, so forecast variability relates only to whether the business can sign new software contracts.
From a cost perspective, across the Group we will continue to take prudent actions as needed and it is worth noting we are not currently experiencing any supply chain issues.
As a consequence, the Group has elected for the time being to withdraw market guidance for the full year. It is the Group's intention that, at such time as visibility improves, clear guidance can be reinstated.
That said, COVID-19 does not change the robust fundamentals of the Group which remains a resilient business with exciting growth prospects. We have a strong balance sheet with £14.2m in net cash and remain debt-free. Our clear strategic "amplify the core" plan, reduces risk by staying close to the customers and technologies we know best and markets where we lead. In addition, in line with our strategy we will continue to seek earnings-accretive acquisitions to extend product range, grow market share and/or increase differentiation to augment this growth.
We have clearly differentiated products from our competitors and we address diversified markets across over 70 countries worldwide, thus limiting our exposure to any one market or geography. We have growing contracted recurring revenues, approaching a fifth of Group revenues. Given these strong fundamentals, the Board is confident the Group can navigate the current challenges and will indeed thrive in the future.
* Profit/(loss) Before Tax from continuing operations before Group recharges adjusted for share-based payments, amortisation of intangibles arising on acquisition, change in fair value of deferred consideration payable and unwinding of associated discount factor, Pimloc and exceptional costs.
CONDENSED CONSOLIDATED INCOME STATEMENT
Six months ended
31 March
2020
Six months ended
31 March
2019*
Year
ended
30 September 2019*
(unaudited)
(unaudited)
(audited)
Note
£'000
£'000
£'000
Revenue
2
15,016
16,055
35,350
Cost of sales
(4,491)
(4,394)
(10,166)
Gross profit
10,525
11,661
25,184
Sales, support and marketing costs
(4,186)
(4,262)
(8,663)
Research and development
(2,196)
(2,112)
(4,184)
Administrative expenses
(4,258)
(4,161)
(7,875)
Other operating income
58
104
202
Operating (loss)/profit
(57)
1,230
4,664
Finance income
13
12
66
Finance expense
(49)
(43)
(2)
Share of post-tax loss of equity accounted associate
(18)
(33)
(59)
(Loss)/profit before taxation
(111)
1,166
4,669
Taxation
(94)
(257)
(504)
(Loss)/profit from continuing operations
(205)
909
4,165
(Loss)/profit from discontinued operations, net of tax
-
(4)
13
(Loss)/profit for the period attributable to
owners of the parent during the period
(205)
905
4,178
Earnings per share for profit on continuing operations attributable to owners of the parent during the year
Basic (loss)/earnings per share (pence)
6
(0.17p)
0.73p
3.33p
Diluted (loss)/earnings per share (pence)
6
(0.17p)
0.71p
3.24p
Earnings per share for profit on total operations attributable to owners of the parent during the year
Basic (loss)/earnings per share (pence)
6
(0.17p)
0.73p
3.34p
Diluted (loss)/earnings per share (pence)
6
(0.17p)
0.71p
3.25p
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Six months ended
31 March
2020
Six months ended
31 March
2019*
Year
ended
30 September 2019*
(unaudited)
(unaudited)
(audited)
£'000
£'000
£'000
Net (loss)/profit for the period
(205)
905
4,178
Other comprehensive income
Items that will or may be reclassified to profit or loss
Exchange differences on retranslation of overseas subsidiaries
171
-
271
Total other comprehensive income
171
-
271
Total comprehensive income for the period attributable to the owners of the parent
(34)
905
4,449
*The Group has applied IFRS 16 using the modified retrospective approach. Under this method the comparative information is not restated. See note 9.
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
31 March
2020
31 March
2019*
30 September
2019*
(unaudited)
(unaudited)
(audited)
Note
£'000
£'000
£'000
Non-current assets
Goodwill and intangible assets
12,420
12,389
12,449
Property, plant and equipment
2,218
2,428
2,280
Right of use assets
9
2,013
-
-
Financial asset - investments
317
125
98
Deferred tax asset
664
426
405
17,632
15,368
15,232
Current assets
Inventories
3,684
3,080
3,236
Trade and other receivables
11,412
9,488
11,687
Current tax debtor
300
72
177
Cash and cash equivalents
10,848
10,949
13,837
26,244
23,589
28,937
Current liabilities
Trade and other payables
(9,905)
(9,420)
(10,733)
Lease liabilities
9
(469)
-
-
(10,374)
(9,420)
(10,733)
Net current assets
15,870
14,169
18,204
Total assets less current liabilities
33,502
29,537
33,436
Non-current liabilities
Other liabilities
(369)
(317)
(462)
Lease liabilities
9
(1,794)
-
-
Provisions
(20)
(12)
(16)
Deferred tax liability
(2,001)
(1,802)
(1,797)
(4,184)
(2,131)
(2,275)
Net assets
29,318
27,406
31,161
Capital and reserves attributable to the owners of the parent
Share capital
7
314
313
313
Shares to be issued
65
65
65
Share premium account
17,707
17,391
17,417
Retained earnings
10,546
9,393
12,851
Foreign currency translation reserve
686
244
515
Total equity shareholders' funds
29,318
27,406
31,161
*The Group has applied IFRS 16 using the modified retrospective approach. Under this method the comparative information is not restated. See note 9.
CONDENSED CONSOLIDATED STATEMENT OF CASHFLOWS
Six months
ended
31 March
2020
Six months ended
31 March
2019*
Year
ended
30 September 2019*
(unaudited)
(unaudited)
(audited)
£'000
£'000
£'000
Cash flows from operating activities
Operating (loss)/profit from continuing operations
(57)
1,230
4,664
Operating (loss)/profit from discontinued operations
-
(3)
21
Group operating (loss)/profit
(57)
1,227
4,685
Depreciation and amortisation
1,787
1,353
2,761
Share based payments
71
122
264
Exchange adjustments
174
5
134
(Increase)/decrease in inventories
(448)
(677)
(823)
Decrease/(increase) in receivables
261
1,089
(949)
(Decrease)/increase in payables
(802)
132
1,600
Cash generated from operating activities
986
3,251
7,672
Tax paid
(190)
(59)
(369)
Net cash from operating activities
796
3,192
7,303
Cash flows from investing activities
Purchase of property, plant and equipment
(251)
(293)
(467)
Purchase of intangible assets
(1,183)
(1,068)
(2,196)
Purchase of investment
(236)
-
-
Proceeds on disposal of property, plant and equipment
11
54
79
Acquisition of subsidiary undertaking net of cash acquired
(128)
(74)
(141)
Interest arising on contingent consideration
-
(43)
43
Interest received
13
12
23
Interest Paid
(49)
-
(2)
Net cash used in investing activities
(1,823)
(1,412)
(2,661)
Cash flows from financing activities
Issue of ordinary shares
291
65
91
Equity dividends paid
(2,253)
(3,125)
(3,125)
Net cash used in financing activities
(1,962)
(3,060)
(3,034)
Net (decrease)/increase in cash and cash equivalents
(2,989)
(1,280)
1,608
Cash and cash equivalents at beginning of the period
13,837
12,229
12,229
Cash and cash equivalents at end of the period
10,848
10,949
13,837
*The Group has applied IFRS 16 using the modified retrospective approach. Under this method the comparative information is not restated. See note 9.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES TO EQUITY
Share
Capital
Shares
to be
issued
Share premium account
Retained earnings
Foreign currency translation reserve
Total
£'000
£'000
£'000
£'000
£'000
£'000
Balance as at 30 September 2019*
313
65
17,417
12,851
515
31,161
Net profit for the period
-
-
-
(205)
-
(205)
Exchange difference on retranslation of overseas subsidiaries
-
-
-
-
171
171
Tax recognised directly in equity
-
-
-
82
-
82
Transactions with owners:
Dividends
-
-
-
(2,253)
-
(2,253)
Issue of share capital
1
-
290
-
-
291
Movement in relation to share based payments
-
-
-
71
-
71
Balance as at 31 March 2020
314
65
17,707
10,546
686
29,318
Balance as at 30 September 2018 as previously stated
312
65
17,327
12,022
244
29,970
Impact of change in accounting policy - IFRS 15 Revenue from contracts with customers
-
-
-
(664)
-
(664)
Balance at 1 October 2018 as restated*
312
65
17,327
11,358
244
29,306
Net profit for the period
-
-
-
905
-
905
Exchange differences on retranslation of overseas subsidiaries
-
-
-
-
-
-
Tax recognised directly in equity
-
-
-
133
-
133
Transactions with owners:
Dividends
-
-
-
(3,125)
-
(3,125)
Issue of share capital
1
-
64
-
-
65
Movement in relation to share options
-
-
-
122
-
122
Balance as at 31 March 2019
313
65
17,391
9,393
244
27,406
Balance as at 30 September 2018 as previously stated
312
65
17,327
12,022
244
29,970
Impact of change in accounting policy - IFRS 15 Revenue from contracts with customers
-
-
-
(664)
-
(664)
Balance at 1 October 2018 as restated*
312
65
17,327
11,358
244
29,306
Net profit for the period
-
-
-
4,178
-
4,178
Exchange differences on retranslation of overseas subsidiaries
-
-
-
-
271
271
Tax recognised directly in equity
-
-
-
176
-
176
Transactions with owners:
Dividends
-
-
-
(3,125)
-
(3,125)
Issue of share capital
1
-
90
-
-
91
Movement in relation to share options
-
-
-
264
-
264
Balance as at 30 September 2019
313
65
17,417
12,851
515
31,161
*The Group has applied IFRS 16 using the modified retrospective approach. Under this method the comparative information is not restated. See note 9.
The accompanying notes are an integral part of this interim financial information.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM STATEMENTS
1. Basis of preparation
Oxford Metrics Plc, (the "Company") is a company domiciled in England. The condensed consolidated interim financial statements of the Company for the six months ended 31 March 2020 comprise the Company and its subsidiaries (together referred to as the "Group").
During the period the Group adopted IFRS 16 'Leases' and the impact of adopting IFRS 16 is shown in note 9. Otherwise, the condensed consolidated interim financial statements have been prepared using accounting policies consistent with those of the annual financial statements for the year ended 30 September 2019. They are in accordance with IAS 34. Other new and amended standards and interpretations issued by the IASB that will apply for the first time in the next annual financial statements are not expected to impact the Group as they are either not relevant to the Group's activities or require accounting which is consistent with the Group's current accounting policies.
The interim financial statements have not been audited or reviewed and the financial information contained in this report does not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006. The comparative figures for the year ended 30 September 2019 are not the statutory accounts but have been extracted from the Group's 2019 financial statements which have been delivered to the Registrar of Companies. The auditors' report on those financial statements was unqualified did not contain references to any matters to which the auditors drew attention without qualifying the report and did not contain a statement under Section 498(2) or (3) of the Companies Act 2006.
2. Revenue from contracts with customers
Six months ended
31 March
2020
Six months ended
31 March
2019
Year
ended
30 September
2019
(unaudited)
(unaudited)
(audited)
£'000
£'000
£'000
Vicon UK
7,068
7,063
14,638
Vicon USA
4,260
5,466
13,692
Vicon Group
11,328
12,529
28,330
Yotta
3,688
3,526
7,020
Oxford Metrics Group
15,016
16,055
35,350
Vicon revenue by market
Engineering
1,948
3,287
6,015
Entertainment
3,170
3,072
6,802
Life sciences
5,454
5,731
13,637
Established markets
10,572
12,090
26,454
Adjacent verticals
756
439
1,876
Vicon Group
11,328
12,529
28,330
Group revenue by type
Sale of hardware
8,917
10,449
23,710
Sale of software
2,293
3,506
7,023
Rendering of services
3,806
2,100
4,618
Oxford Metrics Group
15,016
16,055
35,350
Yotta revenue by type
Software and related services
3,688
3,526
7,020
Yotta Group
3,688
3,526
7,020
*This additional information is provided to the Chief Operating Decision Maker. Further analysis by market is not available.
Revenue
Six months ended
31 March
2020
Six months ended
31 March
2019
Year
ended
30 September
2019
(unaudited)
(unaudited)
(audited)
£'000
£'000
£'000
By destination
UK
4,861
3,994
8,239
Germany
295
376
993
Italy
134
-
327
Netherlands
214
540
727
France
57
160
535
Switzerland
77
121
285
Rest of Europe
1,019
616
862
Canada
335
424
905
USA
3,652
4,911
12,745
Rest of North America
107
123
110
Australia
438
288
545
Hong Kong
1,462
1,526
2,788
Japan
1,904
1,739
3,570
Korea
152
937
1,464
Rest of Asia Pacific
126
212
565
Other
183
88
690
Oxford Metrics Group
15,016
16,055
35,350
By origin
UK
10,653
10,406
21,268
North America
4,259
5,466
13,692
Asia Pacific
104
183
390
Oxford Metrics Group
15,016
16,055
35,350
Timing of the transfer of goods
Six months ended 31 March 2020 (unaudited)
and services
Vicon UK
Vicon USA
Yotta
Total
£'000
£'000
£'000
£'000
Point in time
6,404
3,201
859
10,464
Over time
664
1,059
2,829
4,552
Oxford Metrics Group
7,068
4,260
3,688
15,016
Contract Counterparties
Direct to consumers
1,637
3,870
3,616
9,123
Third party distributor
5,431
390
72
5,893
Oxford Metrics Group
7,068
4,260
3,688
15,016
By destination
UK
1,314
-
3,547
4,861
Germany
295
-
-
295
Italy
134
-
-
134
Netherlands
192
-
22
214
France
57
-
-
57
Switzerland
77
-
-
77
Rest of Europe
1,017
-
2
1,019
Canada
-
335
-
335
USA
-
3,652
-
3,652
Rest of North America
3
104
-
107
Australia
335
-
103
438
Hong Kong
1,462
-
-
1,462
Japan
1,904
-
-
1,904
Korea
152
-
-
152
Rest of Asia Pacific
126
-
-
126
Other
-
169
14
183
Oxford Metrics Group
7,068
4,260
3,688
15,016
Timing of the transfer of goods
Year ended 30 September 2019 (audited)
and services
Vicon UK
Vicon USA
Yotta
Total
£'000
£'000
£'000
£'000
Point in time
13,507
11,802
1,741
27,050
Over time
1,131
1,890
5,279
8,300
Oxford Metrics Group
14,638
13,692
7,020
35,350
Contract Counterparties
Direct to consumers
4,170
12,638
6,811
23,619
Third party distributor
10,468
1,054
209
11,731
Oxford Metrics Group
14,638
13,692
7,020
35,350
By destination
UK
1,662
-
6,577
8,239
Germany
969
-
24
993
Italy
327
-
-
327
Netherlands
585
-
142
727
France
535
-
-
535
Switzerland
285
-
-
285
Rest of Europe
858
-
4
862
Canada
-
905
-
905
USA
646
12,099
-
12,745
Rest of North America
-
110
-
110
Australia
327
-
218
545
Hong Kong
2,788
-
-
2,788
Japan
3,570
-
-
3,570
South Korea
1,464
-
-
1,464
Rest of Asia Pacific
565
-
-
565
Other
57
578
55
690
Oxford Metrics Group
14,638
13,692
7,020
35,350
3. Segmental Analysis
Segment information is presented in the condensed consolidated interim financial statements in respect of the Group's business segments, which are reported to the Chief Operating Decision Maker (CODM). The Group has identified the Board of Directors of Oxford Metrics plc, ("the Board") as the CODM. The business segment reporting reflects the Group's management and internal reporting structure.
The Group comprises the following business segments:
Vicon Group: This is the development, production and sale of computer software and equipment for the entertainment, engineering and life science markets; and
Yotta Group: This is the provision of software and services for the management of infrastructure assets for Government Agencies, Local Government and major infrastructure contractors.
Other unallocated costs represent head office expenses not recharged to subsidiary companies.
Business segments are analysed below:
Segment depreciation and amortisation
Six months ended
31 March
2020
Six months ended
31 March
2019
Year
ended
30 September
2019
(unaudited)
(unaudited)
(audited)
£'000
£'000
£'000
Vicon UK
1,042
923
1,898
Vicon USA
31
32
64
Vicon Group
1,073
955
1,962
Yotta
423
393
788
Unallocated
9
5
13
Oxford Metrics Group
1,505
1,353
2,763
Six months ended 31 March 2020 (unaudited)
Six months ended 31 March 2019 (unaudited)
Year ended 30 September 2019 (audited)
Adjusted profit/(loss) before tax
Adjusting items
Group recharges
Profit/(loss) before tax
Adjusted profit/(loss) before tax
Adjusting items
Group recharges
Profit/(loss) before tax
Adjusted profit/(loss) before tax
Adjusting items
Group recharges
Profit/(loss) before tax
£'000
£'000
£'000
£'000
£'000
£'000
£'000
£'000
£'000
£'000
£'000
£'000
Vicon UK
689
(136)
188
741
1,208
(174)
699
1,733
2,354
(125)
3,248
5,477
Vicon USA
1,261
-
(1,080)
181
2,098
-
(1,666)
432
5,760
-
(4,976)
784
Vicon Group
1,950
(136)
(892)
922
3,306
(174)
(967)
2,165
8,114
(125)
(1,728)
6,261
Yotta
(464)
(229)
(479)
(1,172)
(191)
(284)
(495)
(970)
(230)
(469)
(808)
(1,507)
Unallocated
(1,171)
(61)
1,371
139
(1,386)
(105)
1,462
(29)
(2,421)
(200)
2,536
(85)
Continuing operations
315
(426)
-
(111)
1,729
(563)
-
1,166
5,463
(794)
-
4,669
OMG Life Group
-
-
-
-
(3)
-
-
(3)
21
-
-
21
Discontinued operations
-
-
-
-
(3)
-
-
(3)
21
-
-
21
Oxford Metrics Group
315
(426)
-
(111)
1,726
(563)
-
1,163
5,484
(794)
-
4,690
Non-current assets
Additions to non-current assets
Carrying amount of segment assets
Carrying amount of segment liabilities
Six months ended 31 March 2020 (unaudited)
Six months ended 31 March 2019 (unaudited)
Year ended 30 September 2019 (audited)
Six months ended 31 March 2020 (unaudited)
Six months ended 31 March 2019 (unaudited)
Year ended 30 September 2019 (audited)
Six months ended 31 March 2020 (unaudited)
Six months ended 31 March 2019 (unaudited)
Year ended 30 September 2019 (audited)
Six months ended 31 March 2020 (unaudited)
Six months ended 31 March 2019 (unaudited)
Year ended 30 September 2019 (audited)
£'000
£'000
£'000
£'000
£'000
£'000
£'000
£'000
£'000
£'000
£'000
£'000
Vicon UK
9,764
8,838
8,642
996
759
1,667
25,290
20,924
22,687
(6,057)
(5,312)
(5,781)
Vicon USA
1,420
858
838
23
31
55
6,351
6,196
8,824
(3,083)
(2,125)
(2,973)
Vicon Group
11,184
9,696
9,480
1,019
790
1,722
31,641
27,120
31,511
(9,140)
(7,437)
(8,754)
Yotta
5,798
5,301
5,366
410
462
912
14,569
15,978
13,069
(5,072)
(3,644)
(3,852)
Yotta Group
5,798
5,301
5,366
410
462
912
14,569
15,978
13,069
(5,072)
(3,644)
(3,852)
Unallocated
610
364
386
241
-
29
3,678
1,905
5,641
(346)
(470)
(402)
OMG Life Group*
-
7
-
-
-
-
(6,052)
(6,046)
(6,052)
-
-
-
Oxford Metrics Group
17,592
15,368
15,232
1,670
1,252
2,663
43,836
38,957
44,169
(14,558)
(11,551)
(13,008)
*The negative balance within segment assets represents a cash overdraft which is part of the Group's cash offset facility.
4. Reconciliation of adjusted profit/(loss) before tax
Six months ended
31 March
2020
Six months ended
31 March
2019
Year
ended
30 September
2019
(unaudited)
(unaudited)
(audited)
£'000
£'000
£'000
Profit before tax - continuing operations
(111)
1,166
4,669
Share based payments - equity settled
71
122
264
Amortisation of intangibles arising on acquisition
270
270
541
Redundancy costs
67
117
125
Adjustment to fair value of deferred consideration payable and unwinding of associated discount factor
-
21
(195)
Share of post-tax loss of equity accounted associate
18
33
59
Adjusted profit before tax - continuing operations
315
1,729
5,463
Loss before tax - discontinued operations
-
(3)
21
Adjusted loss before tax - discontinued operations
-
(3)
21
Total adjusted profit before tax - all operations
315
1,726
5,484
Adjusted earnings per share for profit on continuing operations attributable to owners of the parent during the year
Basic earnings per share (pence)
0.17p
1.18p
3.96p
Diluted earnings per share (pence)
0.17p
1.15p
3.86p
Adjusted earnings per share for profit on total operations attributable to owners of the parent during the year
Basic earnings per share (pence)
0.17p
1.17p
3.97p
Diluted earnings per share (pence)
0.17p
1.14p
3.87p
The adjusted profit before tax for the Vicon and Yotta business segments which are included within the Group's continuing operations is shown in detail below;
Vicon Group
Six months ended
31 March
2020
Six months ended
31 March
2019
Year
ended
30 September
2019
(unaudited)
(unaudited)
(audited)
£'000
£'000
£'000
Profit before tax
922
2,165
6,261
Share based payments - equity settled
15
32
78
Amortisation of intangibles arising on acquisition
121
121
242
Adjustment to fair value of deferred consideration payable and unwinding of discount factor
-
21
(195)
Reapportion Group overheads
892
967
1,728
Adjusted profit before tax
1,950
3,306
8,114
Yotta Group
Six months ended
31 March
2020
Six months ended
31 March
2019
Year
ended
30 September
2019
(unaudited)
(unaudited)
(audited)
£'000
£'000
£'000
Loss before tax
(1,172)
(970)
(1,507)
Share based payments - equity settled
13
18
45
Amortisation of intangibles arising on acquisition
149
149
299
Redundancy costs
67
117
125
Reapportion Group overheads
479
495
808
Adjusted loss before tax
(464)
(191)
(230)
5. Taxation
The Group's consolidated effective tax rate for the six months ended 31 March 2020 was 84% (for the six months ended 31 March 2019: 5%; for the year ended 30 September 2019: 11%).
In accordance with IAS 34 the tax charge for the half year is calculated on the basis of the estimated full year tax rate.
6. Earnings per share
The calculation of the basic earnings per share is based on the earnings attributable to ordinary shareholders divided by the weighted average number of shares in issue during the period. The calculation of diluted earnings per share is based on the basic earnings per share, adjusted to allow for the issue of shares on the assumed conversion of all dilutive options.
31 March 2020 (unaudited)
31 March 2019 (unaudited)
30 September 2019 (audited)
(Loss)/earnings
Weighted average number of shares
Per share amount
Earnings/(loss)
Weighted average number of shares
Per share amount
Earnings
Weighted average number of shares
Per share amount
£'000
'000
(pence)
£'000
'000
(pence)
£'000
'000
(pence)
Continuing operations
Basic (loss)/earnings per share
Earnings attributable to ordinary shareholders
(205)
125,434
(0.17)
909
124,970
0.73
4,165
125,038
3.33
Dilutive effect of employee share options
-
2,581
-
-
4,092
(0.02)
-
3,250
(0.09)
Diluted (loss)/earnings per share
(205)
128,015
(0.17)
909
129,062
0.71
4,165
128,288
3.24
Discontinued operations
Basic earnings/(loss) per share
Earnings attributable to ordinary shareholders
-
125,434
-
(4)
124,970
-
13
125,038
0.01
Dilutive effect of employee share options
-
2,581
-
-
4,092
-
-
3,250
-
Diluted earnings/(loss) per share
-
128,015
-
(4)
129,062
-
13
128,288
0.01
Total operations
Basic (loss)/earnings per share
Loss attributable to ordinary shareholders
(205)
125,434
(0.17)
905
124,970
0.72
4,178
125,038
3.34
Dilutive effect of employee share options
-
2,581
-
-
4,092
(0.02)
-
3,250
(0.09)
Diluted (loss)/earnings per share
(205)
128,015
(0.17)
905
129,062
0.70
4,178
128,288
3.25
7. Share capital
31 March
31 March
30 September
2020
2019
2019
(unaudited)
(unaudited)
(audited)
£'000
£'000
£'000
Allotted, called up and fully paid
125,639,658 shares of 0.25p (31 March 2019: 125,063,130 shares of 0.25p and 30 September 2019: 125,138,130 shares of 0.25p)
314
313
313
During the six month period ended 31 March 2020 there were 473,279 shares issued relating to share options that were exercised. In addition, 28,249 shares were issued to the non-executive Chairman, Roger Parry, in satisfaction of salary.
There were 122,194 shares issued in respect of share options exercised during the six months ended 31 March 2019 (year ended 30 September 2019: 197,194).
8. Dividends
The following dividends were recognised as distributions to equity holders in the period:
31 March
31 March
30 September
2020
2019
2019
(unaudited)
(unaudited)
(audited)
£'000
£'000
£'000
Final dividend for 2018 paid in 2019 - 1.50 pence per share
-
1,875
1,875
Special dividend paid in 2019 - 1.00 pence per share
-
1,250
1,250
Final dividend for 2019 paid in 2020 - 1.80 pence per share
2,253
-
-
2,253
3,125
3,125
The final dividend for 2019 was paid to shareholders on 28 February 2020 at 1.80 pence per share, a total of £2,253,000.
9. Changes in accounting policies
The Group has adopted IFRS 16 with the date of initial application being 1 October 2019.
Effective 1 January 2019, IFRS 16 has replaced IAS 17 'Leases' and IFRIC 4 'Determining whether an Arrangement Contains a Lease'.
The Group adopted IFRS 16 using the modified retrospective approach without restatement of comparative figures. The Group elected to apply the practical expedient to not reassess whether a contract contains a lease at the date of initial application. Contracts entered into before the transition date that were not identified as leases under IAS 17 and IFRIC 4 were not reassessed. The definition of a lease under IFRS 16 was applied only to contracts entered into on or after 1 October 2019.
IFRS 16 provides for certain optional practical expedients, including those related to the initial adoption of the standard. The Group applied the exemption not to recognise right-of-use assets and liabilities for leases with less than 12 months of lease term remaining as of the date of initial application, when applying IFRS 16 to leases previously classified as operating leases under IAS 17.
As a lessee, the Group previously classified leases as operating or finance leases based on its assessment of whether the lease transferred substantially all of the risks and rewards of ownership. Under IFRS 16, the Group recognises right-of-use assets and lease liabilities for most leases. However, the Group has elected not to recognise right-of-use assets and lease liabilities for some leases of low value assets based on the value of the underlying asset when new or for short-term leases with a lease term of 12 months or less.
On adoption of IFRS 16, the Group recognised right-of-use assets and lease liabilities in relation to leases of business premises and vehicles, which had previously been classified as operating leases.
The lease liabilities were measured at the present value of the remaining lease payments, discounted using the relevant incremental borrowing rate as at 1 October 2019. The Group's incremental borrowing rate is the rate at which a similar borrowing could be obtained from an independent creditor under comparable terms and conditions. The weighted-average rate applied was 4.06%.
The right-of-use assets were measured at an amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments.
Included in profit or loss for the period are £282,000 of amortisation of right-of-use assets and £48,000 of finance expenses on lease liabilities.
The following table reconciles the minimum lease commitments disclosed in the Group's Annual Financial Statements at 30 September 2019 to the amount of lease liabilities recognised on transition at 1 October 2019:
£'000
Minimum operating lease commitment at 30 September 2019
2,444
Less short-term leases not recognised under IFRS 16
(16)
Undiscounted lease payments
2,428
Effect of discounting using the incremental borrowing rate at the date of initial application
(278)
Lease liabilities recognised at 1 October 2019
2,150
10. Copies of the interim statement
Copies of the interim statement will be available from the Company's registered office at 6 Oxford Industrial Park, Yarnton, Oxfordshire OX5 1QU, and from the Company's website: www.oxfordmetrics.com.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.ENDIR PPUAAAUPUGQU
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