REG - Oxford Metrics PLC - Sale of Yotta

Oxford MetricsAnnouncement

30/05/2022 07:15

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RNS Number : 1604N  Oxford Metrics PLC  30 May 2022

30 May 2022

 

Oxford Metrics plc

 

("Oxford Metrics" or the "Group")

 

Sale of Yotta

 

Delivers significant value for Oxford Metrics shareholders

 

Brings increased clarity and focus to Oxford Metrics' five-year growth plan

 

Oxford Metrics plc (LSE: OMG), the smart sensing software company, servicing
life sciences, entertainment and engineering markets, today announces the sale
of its infrastructure asset management division, Yotta, to Causeway
Technologies for a cash consideration of £52.0 million.

 

Yotta today serves over 200 customers worldwide, providing software to assist
in the management of more than 35 million physical assets and related services
- including highways, street lighting, and waste management. Originally a
spin-out from Oxford Metrics' core technology, the Group has successfully
scaled Yotta and its operation in recent years, particularly increasing the
level of recurring revenue it generates and achieving full year profitability.
It has done so in a market which is increasingly distinct from the
Entertainment, Life Science and Engineering markets served by Vicon: the
Group's larger and higher-growth division.

 

Causeway - the UK's leading provider of software solutions to the construction
industry - has acquired Yotta as it continues its journey to digitise the
processes that underpin the construction and maintenance of infrastructure
assets. The Causeway team has a clear understanding of Yotta's software and is
well positioned to continue both its growth and innovation, with a vision to
create a truly integrated end-to-end solution that manages the entire asset
management lifecycle for local authorities and their contractors.

 

The sale not only delivers significant value for Oxford Metrics' shareholders
in the near-term, but also brings increased clarity and focus to the Group's
stated five-year growth plan. This plan, targeted at growing revenue by 2.5x
and returning the Group to 15% Adjusted PBT margins by the end of the plan,
can now be undertaken with one core technology stack, unlocking greater
operational leverage. The sale also brings greater coherence to the Group's
end markets, each of which is underpinned by structural growth drivers.

 

The proceeds from the sale will increase the Group's near-term financial
firepower to accelerate M&A and planned organic investments. In line with
the Group's strategy, these actions will aim to both broaden Vicon's product
bench and extend the Group's sensing and analysis capabilities. The Group will
continue to be disciplined in its approach to M&A, in line with the
criteria set out at the time of the 2020/21 results. This will enable the
Group to increase its addressable markets and scale as it progresses towards
its five-year financial and strategic goals.

 

For the financial year ended 30 September 2021, Yotta reported headline
revenue of £8.1m (c. 23 percent of FY21 Group Revenue), including its highest
level of Annual Recurring Revenue of £7.4m, Adjusted PBT of £0.8m (c. 10
percent of Group Adjusted PBT), statutory LBT of £0.4m and gross assets of
£13.2m. The cash consideration of £52m is subject to customary adjustments
for working capital and debt-like items.

 

Commenting on the sale, Nick Bolton, CEO of Oxford Metrics said:

 

"Today's sale of Yotta is an enabler of growth on multiple fronts. First, it
combines our excellent Yotta team and technology with a platform that can
unlock additional growth across Yotta's existing market - and in other
adjacencies. I am proud of the Yotta team's many achievements and I am
confident that, in combining with Causeway, many more achievements lie ahead.

 

For Oxford Metrics, today's sale not only realises the investment we have made
in Yotta at an attractive multiple, but it also brings even greater clarity to
our go-forward growth path. This clarity adds to our excitement, our energy
and our focus on the Smart Sensing opportunity that lies ahead. Our five-year
ambitions to increase revenues by 2.5x and to achieve a 15% adjusted profit
before tax margin remain unchanged. Now, through the lens of our Vicon
business and its core technology, we have the opportunity - and increased
financial firepower - to make organic and M&A investments that broaden our
product bench, extend our sensing and analysis capabilities and scale us
towards achieving our five-year strategic and financial goals."

 

Roger Parry, Chair of Oxford Metrics said:

 

"Last year the Board conducted a thorough strategic review, setting us on a
pathway for the next five years of growth. We decided to focus that pathway on
selected high growth markets, where Vicon's technology offer is a proven
success. Yotta has performed well under our stewardship, but it now makes
sense for it to join a company that offers a range of complementary solutions.
We believe Causeway will be an excellent home for the Yotta team. Oxford
Metrics has an ambitious and disciplined growth plan and we now have even
greater financial resource to execute against it."

 

 

For further information please contact:

 

Oxford
Metrics
+44 (0) 1865 261860

Nick Bolton, CEO

David Deacon, CFO

 

Numis Securities
Limited
+44 (0)20 7260 1000

Simon Willis / Hugo Rubinstein / Tejas Padalkar

 

FTI
Consulting
+44 (0) 20 3727 1000

Matt Dixon / Jamille Smith / Jemima Gurney

 

About Oxford Metrics

 

Oxford Metrics develops software that enables the interface between the real
world and its virtual twin. Our smart sensing software helps over 10,000
customers in more than 70 countries, including all of the world's top 10 games
companies and all of the top 20 universities worldwide. Founded in 1984, we
started our journey in healthcare, expanded into entertainment, winning an
OSCAR® and an Emmy®, then moved into defence and engineering. We have a
track record of creating value by incubating, growing and then augmenting
through acquisition, unique technology businesses.

 

The Group trades through its market-leading division: Vicon. Vicon is a world
leader in motion measurement analysis to thousands of customers worldwide,
including Guy's Hospital, Industrial Light & Magic, MIT and NASA.

 

The Group is headquartered in Oxford with offices in California, Colorado, 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
(http://www.oxfordmetrics.com)

 

 

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