Preliminary Results for the financial year ended 30 September 2020

Dec 3, 2020

- Resilient business well placed to adapt to the post-pandemic economy -
- Short-term sales delay but macro growth drivers accelerating -
- Strong financial platform affords us the opportunity to bring forward growth plans -

3 December 2020 - Oxford Metrics plc (LSE: OMG), the international software company servicing government, life sciences, entertainment and engineering markets, announces preliminary results for the financial year ended 30 September 2020.

  FY20 FY19
Revenue  £30.3m  £35.3m
Annual Recurring Revenue £6.8m £6.2m
Adjusted Profit Before Tax* £2.6m £5.5m
Adjusted Basic Earnings per Share  2.05p 3.96p
Ordinary Dividend per Share 1.80p 1.80p
Statutory Profit before Tax £1.6m £4.7m
Statutory Basic Earnings per Share  1.28p 3.33p
Net Cash £14.9m  £13.8m
Operating Cashflow £6.4m £7.7m

*Profit Before Tax before Group recharges adjusted for share-based payments, amortisation of intangibles arising on acquisition, fair value adjustments to IMeasureU purchase consideration, impairment of Pimloc investment and exceptional costs.

Financial Highlights

  • Headline revenue of £30.3m (FY19: £35.3m), down 14.3% (down 13.9% on a constant currency basis)
  • Improved quality of earnings, with Annual Recurring Revenue (‘ARR’) of £6.8m (FY19: £6.2m)
  • Adjusted Profit Before Tax* at £2.6m (FY19: £5.5m), largely reflecting short term sales delays with some Vicon customers
  • Continued cash generation, with £14.9m in net cash (FY19: £13.8m) and operating cashflow of £6.4m (FY19: £7.7m)
  • Board proposes maintaining our final dividend at 1.80p per share (FY19: 1.80p) this year

Operational Highlights

Yotta benefiting from acceleration of Digital Transformation in public asset management

  • Major milestone achieved: H2 profitability delivered following transition to SaaS model
  • Improved quality of earnings with our highest level of ARR, up 8.3% to £6.8m at year-end
  • Contracts secured in H1 were successfully implemented remotely, despite lockdowns
  • Customers are prioritising Digital Transformation to enable remote working, with several new flagship partnerships secured including Telensa, the UK's largest provider of smart IoT streetlights, to provide a seamless lighting solution and control groups of streetlights
  • New business wins across UK local government driving ARR growth including South Gloucestershire, Warwickshire, Somerset, Worcestershire and City of York

Vicon impacted by pandemic-related sales delay, but seeing broader range of applications continue to emerge

  • Vicon reported a decline in revenue of 19.6% to £22.8m (FY19: £28.3m). COVID-19 affected all segments to varying degrees with short-term sales delay, especially in USA, interrupting continuous growth since 2015
  • Signed four new Location-based Virtual Reality (“LBVR”) partners and strengthened relationships with others including Europa-Park, one of the world’s leading theme parks, despite partners slowing rollouts due to COVID-19
  • Vicon’s motion measurement technology is finding a wide range of new use cases including collective VR experiences as well as virtual film and TV production enabling low cost, high quality production with fewer people on set for Vicon customers such as Rebellion Film Studios, Silverspoon and Industrial Light and Magic

Outlook and Guidance

  • Both businesses have started the new financial year well, however the COVID-19 pandemic is ongoing, so uncertainty remains
  • Vicon’s sales pipeline for Q1 is comparable overall with this time last year (pre-COVID)
  • Vicon's longer-term sales pipeline together with a rollover of opportunity from FY20 into FY21 suggests recovery is underway across almost all geographies but for the time being the USA remains subdued
  • Yotta’s ARR sales pipeline is healthy and we anticipate further ARR additions of at least £1.0m, a stable cost base and a full year of profitability
  • We will continue to invest organically to drive growth as well as exploring acquisition opportunities which can accelerate our strategies in our chosen markets
  • Our strong fundamentals stand us in good stead to navigate current challenges

Commenting on the results Nick Bolton, Chief Executive said:

“We’re extremely proud of how the business has navigated a challenging year, to deliver continued strategic progress, showing itself to be a resilient and agile organisation. Our performance owes much to our employees who have adapted brilliantly, and I would like to thank every one of them for their continued innovation and dedication to servicing our global customer base.

Although the pandemic has caused short-term sales delays, particularly in the USA, it has also accelerated positive market drivers, which will underpin our future growth. Yotta has been a beneficiary of the acceleration in the Digital Transformation of public asset management, reporting growth in Annual Recurring Revenue ('ARR'), driven by an increased need for Yotta software to manage new ways of remote working. Vicon has continued to see the move of motion measurement into the mainstream, as companies plan to enhance their solutions with motion tracking capabilities, such as the emerging opportunities in virtual film production.

As we enter a new financial year uncertainty remains as the pandemic continues. That said, both of our divisions have started the year well, and the combination of our robust financial position and a tailwind from structural growth drivers puts us in a strong position both to navigate any further challenges that may arise and bring forward our growth plans.”

For the full Preliminary Results click here.

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Oxford Metrics