Interim Results for the 6 months ended 31.03.2019

RNS Number : 7439B
Oxford Metrics PLC
11 June 2019
 

11 June 2019

Oxford Metrics plc

 

 ("Oxford Metrics", the "Company" or the "Group")

Interim Results for the six months ended 31 March 2019

 

 

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 2019.

 

 

Summary of Results

 

H1 FY19

H1 FY18

% Change

Revenue

£16.1m

£14.3m

+12.6%

Adjusted Profit before Tax*

£1.7m

£1.5m

+16.1%

Statutory Profit before Tax

£1.2m

£1.2m

-1.5%

Statutory Earnings per Share

0.86p

0.58p

+48.3%

Net Cash

£10.9m

£9.2m

+18.7%

* 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

Financial Highlights

·      Headline Group revenue of £16.1m, up 12.6% (H1 FY18: £14.3m)

Group revenue up 10.4% on a constant currency basis

·      Adjusted profit before tax up 16.1% to £1.7m (H1 FY18: £1.5m)

·      Cash generated from operations (before paying interest and tax) £3.3m (H1 FY18: £3.5m)

·      Cash of £10.9m as at 31 March 2019 (H1 FY18: £9.2m) after the payments of a final and special dividend worth £3.1m

·      Growth initiatives at Yotta yielding results:

Annualised Recurring Revenue ('ARR') up 10.7% year-on-year

93.2% (FY18: 95.3%) retention of growing SaaS customer base

As at 10th June 2019, ARR stood at £6.0m

·      Headline Vicon revenue up 14.4% year-on-year (11.5% at constant currency) against a strong comparator

Operational Highlights

 

·    Five-year "amplify the core" strategic growth plan launched in 2016, with aim to drive growth by building on core strengths and capabilities of subsidiaries

·    Good progress in Third Year of plan leveraging investments made in previous years to broaden product range and expand addressable markets

·    Vicon capitalising on its leadership position in its established markets, with a particularly strong performance in Engineering which grew 89% year-on-year

·    Vicon seeing increasing traction for Location-based Virtual Reality ('LBVR') solution which now accounts for 8% of first-half revenue

·    Established new partnership with Sandbox VR, who immediately purchased systems from Vicon, with significant opportunity to scale the partnership over time

·    IMU Step, SaaS solution for elite sports, continues to build momentum with universities and trials being undertaken by a number of major sporting franchises

·    Yotta launched a new Waste and Environmental Management module for Alloy expanding its addressable market and the pipeline continues to build following sales team changes

 

Commenting on the results Nick Bolton, Chief Executive Officer said:

 

"We have made a positive start to the year, delivering record revenue and double-digit revenue and earnings growth. Driving that performance was Vicon, which delivered revenue growth of 14%, securing deals with NASA's Jet Propulsion Lab and Square Enix to consolidate our leadership position in the Engineering and Entertainment markets.

 

This year we have also seen the Location-based Virtual Reality market really beginning to take off. The scale of this market is significant, our partners are now launching new locations across multiple geographies and we signed an exciting new partnership with Sandbox VR.

 

The focused investments we are making this year will help us to capture these new opportunities and launch new products to drive future growth. As we move into the second half, our pipeline of sales for both Yotta and Vicon is strong, underpinning our confidence in delivering in-line with market expectations for the full year."

 

 

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 / Harry Staight

 

 

 

N+1 Singer (NOMAD to OMG)

+44 (0) 20 7496 3000

Shaun Dobson / Jen Boorer (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

 

 

 

 

 

Chairman and Chief Executive's Statement

 

KPI

Revenue

PBT

Adjusted PBT*

 

H1 FY19

H1 FY18

H1 FY19

H1 FY18

H1 FY19

H1 FY18

Group

£16.1m

£14.3m

£1.2m

£1.2m

£1.7m

£1.5m

 

Overall the Group has traded well in the first half setting a new record for revenue performance on a continuing operations basis of £16.1m (H1 FY18: £14.3m), up 12.6% on last year at a headline level and 10.4% on a constant currency basis and reporting Adjusted PBT* up 16.1% to £1.7m (H1 FY18: £1.5m). The cash position, having paid a Final and Special Dividend of £3.1m in the first half, finished at £10.9m as at 31 March 2019 (H1 FY18: £9.2m). Cash generated from operations during the first half was £3.3m (H1 FY18: £3.5m); the slight decline accounted for by the intentionally higher inventory position in preparation for Brexit. The Group remains debt-free.

 

This pleasing trading performance is being driven by our five-year strategic plan, launched in 2016, which aims to "amplify the core". Through this plan we aim to broaden and enhance future profit streams, improve the quality of future earnings and ultimately accelerate future growth. As we reach the half way point of our plan, overall progress has been strong and we remain on track.

 

Vicon - continuing momentum

 

KPI

Revenue

PBT

Adjusted PBT*

 

H1 FY19

H1 FY18

H1 FY19

H1 FY18

H1 FY19

H1 FY18

Vicon

£12.5m

£11.0m

£2.2m

£2.0m

£3.3m

£3.0m

 

Revenue momentum achieved by Vicon in the last financial year continued into the first half of FY19 with record headline revenues of £12.5m (H1 FY18: £11.0m), improving 14.4% year-on-year on a constant currency basis equating to 11.5% underlying growth. Vicon reported Adjusted PBT* of £3.3m (H1 FY18: £3.0m) and an unadjusted profit before tax of £2.2m (H1 FY18: £2.0m). Vicon also reported improved product gross margins at 75.4% (H1 FY18: 72.6%) in the first half.

 

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 - making the strong even stronger

 

Now 35 years since its original founding, Vicon has long been the market leader in its space but it still continues to break new ground, inspired by a material increase in movement measurement applications from a broader variety of markets than ever before. We believe this is driven by the arrival of the Augmented Age, where our lives are becoming increasingly enhanced and augmented through digital interfaces. Responding to this increased market interest, we have broadened the appeal of our products through targeted investments since the start of the strategic plan. For example, introduced in April 2017, Vicon Shōgun, our software for Visual Effects customers, made our solutions more accessible and productive. This broadened appeal across our solutions is driving the growth reported in this set of Interim Results. As previously announced, this strategy has seen considerable success and we have accelerated investment this year to deliver new products to market for FY20 and drive future growth.

 

The Engineering market segment performed particularly well in the first half, delivering 89% year-on-year growth. Amongst the many new contracts won across a variety of geographies, notable were those with Northrop Grumman and NASA's Jet Propulsion Lab.

 

In the Entertainment market, we delivered a strong performance, landing large system wins at NC Soft in South Korea and Square Enix in Japan. This drove 67% growth for Vicon in the Asia Pacific region over the same period last year. In the UK, games company Ninja Theory, creators of Hellblade and many other titles, invested in a significant size Vicon system to help drive their future game development.

 

There were good contract wins in the Life Sciences market with long-term Vicon customer KTH Stockholm upgrading and further wins at Deakin University, Shriners' Hospitals, Athlone University and University of Western Scotland.

 

Adjacent Markets - capitalising on new growth opportunities

 

Our adjacent market business delivered an outstanding performance, reporting a tripling of revenues over the same period last year, albeit off a low base. Our adjacent markets represent vertical market opportunities, where our broad motion tracking capability is tailored to provide an end-to-end complete solution for the customer. Currently we are pursuing two specific vertical opportunities: Location-based Virtual Reality (LBVR) and Elite Sports.

 

Firstly, our LBVR business continued to gain momentum, with LBVR sales now accounting for 8% of Vicon's first-half revenues. LBVR is an emerging form of entertainment where participants share collective VR experiences in a specific location, such as a shopping mall, cinema, theme-park or museum. In these experiences, users are free to walk around and interact with each other - all within a virtual world. Vicon's software tracks the complex movement of these users and various props which delivers simplicity, accuracy and resilience.

 

Having broadened our product range with Vicon Origin, we saw real progress in this LBVR market, rolling out our products across multiple site locations in multiple geographies with both existing and new partners. One of those new partners is Sandbox VR, a market leader in LBVR with a total of seven active locations currently. Their latest and most ambitious experience, Amber Sky 2088, will be powered by Vicon. As part of the partnership, Sandbox has initially purchased a series of seed systems from Vicon. Some of these will be used at Sandbox's existing locations in Hong Kong, upgrading their current solution. Sandbox plan to open 40 experience rooms across 12 new locations around the world, so there is significant opportunity to scale the partnership over time.

 

Turning to our Elite Sports vertical, this business line saw growing understanding of our lower-limb load monitoring software, IMU Step. This unique software, provided on a Software-as-a-Service (SaaS) basis, enables coaches to gain an objective measure of the load an athlete endures in their lower limbs during training. The first half saw product trials being undertaken by major sporting franchises and some satisfying wins, including the University of Memphis and the University of Tennessee Knoxville. Recognising the unique capability of the solution, our patent applications for the technology are making good progress.

 

Lastly as part of our push into vertical markets, we are pursuing further OEM relationships, where Vicon's tracking capability is embedded in other companies' end market solutions. We have a number of such engagements already, including Motek and Innovative Sports Training. Ultimately our aim is to see Vicon software running on a wide variety of platforms, empowering the Augmented Age with motion tracking excellence.

 

 

Yotta - driving innovation, winning market share

 

KPI

Revenue

PBT

Adjusted PBT*

 

H1 FY19

H1 FY18

H1 FY19

H1 FY18

H1 FY19

H1 FY18

Yotta

£3.5m

£3.3m

(£1.0m)

(£0.8m)

(£0.2m)

(£0.1m)

 

Yotta reported software revenues up 6.8% to £3.5m (H1 FY18: £3.3m). Annualised Recurring Revenues ('ARR') as at 31 March 2019 grew 10.7% year-on-year to £5.9m (H1 FY18: £5.3m). Overall growth in the first half was muted by a lower retention rate of 93.2% (FY18: 95.3%) largely due to the anticipated termination of one unused software element by one specific customer who continues to use Yotta software. As at 10 June 2019, ARR stood at £6.0m.

 

Our market-defining SaaS software, Alloy, saw growing levels of interest and market adoption during the first half. This is driven by strengthened capabilities across our maturing platform. Of particular note is the new Blueprints feature, which enables faster on-boarding of new customers and helps drive partner differentiation. Furthermore, a new version of Alloy has just been released, adding Waste and Environmental Management functionality, broadening the Total Addressable Market for the product.

 

We also started to see our enhanced subscription offer be taken up by a growing number of customers. This new programme enables a customer to subscribe to a combined offer of SaaS software and relevant services, where the customer receives a number of credits that can be used to acquire services from Yotta on a use-it-or-lose-it basis. This enables customers to get more out of our solutions in an easy-to-use manner.

 

We are winning an increased number of contracts with longer than average durations. Total Contract Value ('TCV'), being the sum of ARR over the life of the contract, of all deals in the first half was £1.5m  (H1 FY18: £1.2m) and since the start of the second half we have added a further £0.5m TCV to that. We continue to drive this business to capture a greater market share and as a result Yotta reported an Adjusted* loss before tax of £0.2m (H1 FY18: £0.1m loss) and an unadjusted loss before tax of £1.0m (H1 FY18: £0.8m loss).

 

As previously announced, we implemented changes early in the financial year to our sales approach and made modest changes to the cost base. Given the length of sales cycles in the markets we serve, the benefits of these changes are expected to emerge in the second half. The early signs are encouraging with a healthy sales pipeline.

 

Yotta is driving growth through three important vectors: direct sales, indirect sales via a network of independent international resellers and through OEMs, where third-party companies re-label our software products as their own and then market them through their existing sales teams.

 

·    Direct - sales grew through wins across the UK, including Bury Metropolitan Borough Council, Chorley Council and Northamptonshire County Council. Bury plans to use Alloy to help manage the reactive maintenance of its highway networks and street lighting assets, enabling them to inspect and fix potholes and street lights more efficiently. Northamptonshire Highways have replaced legacy software from a competitor with Alloy, which provides an end-to-end workflow management solution from the reporting of a pothole through to its repair.

 

·    Resellers (Indirect) - Following changes to our sales approach implemented early in the financial year, we are now focussing on key international partners in Europe and South America. This has led to some notable wins at Aeropuerto de Bogotá and Concesiones CCFC.

 

·    OEM - We currently have two OEM partners within Highways (in Australia and the Netherlands) and we are now actively engaged in pursuing partnerships in other asset-rich vertical markets, such as other forms of Transportation and Utilities.

 

Yotta's long-term opportunity remains strong. In the geographical markets Yotta serves, there is a clear need for infrastructure assets to be better managed. Yotta's software suite does exactly that - effectively and efficiently.

 

Outlook

 

As we look to the second half, the Board is encouraged by the strong pipeline of sales opportunities in both Vicon and Yotta. Vicon's qualified sales pipeline is currently 11% higher than this time last year and Vicon orders-in-hand for the remainder of the financial year are encouraging. Following changes made to the sales team at Yotta, pipelines continue to grow in this subsidiary and the benefits of those changes are expected to emerge in the second half. The H2 outlook for the Group is promising.

 

We continue to pursue our organic "amplify the core" growth strategy and remain on track to achieve the objectives set out in our five-year plan. Complementing this, the Group will also continue to explore value-enhancing acquisition opportunities.

 

Notwithstanding macro-economic factors, the Board remains confident that, with the expected performance across the business, the Group is on track to deliver in line with current market expectations for the year as a whole.

 

 

* 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

 

           

 

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

 

 

*The Group has applied IFRS 15 using the cumulative effect method.  Under this method the comparative information is not restated.  See note 8.

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

 

Trade and other payables

 

(9,420)

(7,515)

(8,167)

 

*The Group has applied IFRS 15 using the cumulative effect method.  Under this method the comparative information is not restated.  See note 8.

 

CONDENSED CONSOLIDATED STATEMENT OF CASHFLOWS

 

 

 

Six months

ended

31 March

2019

Six months ended

31 March

2018*

Year

ended

30 September 2018*

 

*The Group has applied IFRS 15 using the cumulative effect method.  Under this method the comparative information is not restated.  See note 8.

 

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 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 (see note 8)

-

-

-

(872)

-

(872)

Balance as at 1 October 2018 as restated

312

65

17,327

11,150

244

29,098

Net profit for the period

-

-

-

1,113

-

1,113

 

 

 

 

 

 

 

Exchange difference 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 based payments

-

-

-

122

-

122

Balance as at 31 March 2019

313

65

17,391

9,393

244

27,406

 

 

 

 

 

 

 

Balance as at 1 October 2017*

308

65

17,302

9,549

71

27,295

Net profit for the period

-

-

-

477

-

477

Exchange differences on retranslation of overseas subsidiaries

-

-

-

-

(115)

(115)

Tax recognised directly in equity

-

-

-

110

-

110

Transactions with owners:

 

 

 

 

 

 

Dividends

-

-

-

(1,499)

-

(1,499)

Issue of share capital

4

-

25

-

-

29

Movement in relation to share options

-

-

-

163

-

163

Balance as at 31 March 2018*

312

65

17,327

8,800

(44)

26,460

 

 

 

 

 

 

 

Balance as at 1 October 2017*

308

65

17,302

9,549

71

27,295

Net profit for the year

-

-

-

3,543

-

3,543

Exchange differences on retranslation of overseas subsidiaries

-

-

-

-

173

173

Tax recognised directly in equity

-

-

-

106

-

106

Transactions with owners:

 

 

 

 

 

 

Dividends

-

-

-

(1,499)

-

(1,499)

Issue of share capital

4

-

25

-

-

29

Movement in relation to share options

-

-

-

323

-

323

Balance as at 30 September 2018*

312

65

17,327

12,022

244

29,970

 

*The Group has applied IFRS 15 using the cumulative effect method.  Under this method the comparative information is not restated.  See note 8.

 

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 2019 comprise the Company and its subsidiaries (together referred to as the "Group").

 

At the date of authorisation of these financial statements the following standards, amendments to standards and interpretations, which have not been adopted early in these financial statements, were issued by the IASB, but not yet effective:

 

•     IFRS 16 'Leases'

•     Amendments to IFRS 9 'Financial Instruments'

•     Amendments to IFRS 3 'Business Combinations'

•     Amendments to references to the Conceptual Framework in IFRS Standards

•     Amendments to IAS 1 'Presentation of Financial Statements'

•     Amendments to IAS 8 'Accounting Policies, Changes in Accounting Estimates and Errors'

•     Amendments to IAS 28 'Investments in Associates and Joint Ventures'

•     Amendments to IAS 19 'Employee Benefits'

•     Amendment to IFRIC 23 'Uncertainty over Income Tax Treatments

•     Annual improvements to IFRS's (2015-2017) cycle

 

At the date of authorisation of these financial statements, the directors have considered the standards and interpretations which have not been applied in these financial statements that were in issue but not yet effective (and in some cases had not yet been adopted by the EU). 

During the period the Group adopted IFRS 15 'Revenue from contracts with customers' and IFRS 9 'Financial Instruments'.  The impact of adopting IFRS 15 is shown in note 8, the impact of adopting IFRS 9 is not material.  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 2018.  They are in accordance with IAS 34.

 

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 2018 are not the statutory accounts but have been extracted from the Group's 2018 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.  Segmental reporting

 

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 and highways surveying services (which were disposed of during the year ended 30 September 2018) for the 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: 

Revenue from contracts with customers

 

 

Revenue

 

Six months ended

31 March

 2019

Six months ended

31 March

 2018

Year

 ended

30 September

2018

 

(unaudited)

(unaudited)

(audited)

 

£'000

£'000

£'000

Vicon UK

7,063

6,315

13,964

Vicon USA

5,466

4,635

10,418

Vicon Group

12,529

10,950

24,382

 

 

 

 

Yotta

3,526

3,303

7,274

Continuing operations

16,055

14,253

31,656

 

 

 

 

Yotta surveying

-

1,208

1,693

Discontinued operations

-

1,208

1,693

 

 

 

 

Oxford Metrics Group

16,055

15,461

33,349

 

 

 

Vicon revenue by market

 

 

 

Engineering

3,287

1,740

4,367

Entertainment

3,298

2,951

7,153

Life sciences

5,944

6,259

12,862

Vicon Group*

12,529

10,950

24,382

 

 

Group revenue by type

 

 

 

Sale of hardware

10,449

9,419

21,687

Sale of software

3,506

1,831

4,289

Rendering of services

2,100

3,003

5,680

Continuing operations

16,055

14,253

31,656

 

 

 

 

Sale of software

-

-

12

Rendering of services

-

1,208

1,681

Discontinued operations

-

1,208

1,693

 

 

 

 

Oxford Metrics Group

16,055

15,461

33,349

 

 

Yotta revenue by type

 

 

 

Software and related services

3,526

3,303

7,274

Continuing operations

3,526

3,303

7,274

 

 

 

 

Surveying services

-

1,208

1,693

Discontinued operations

-

1,208

1,693

 

 

 

 

Yotta Group

3,526

4,511

8,967

 

 

 

*This additional information is provided to the Chief Operating Decision Maker.  Further analysis by market is not available.

 

 

 

 

 

 

 

 

 

Revenue

 

Six months ended

31 March

 2019

Six months ended

31 March

 2018

Year

 ended

30 September

2018

 

(unaudited)

(unaudited)

(audited)

 

£'000

£'000

£'000

By destination

 

 

 

UK

3,994

5,106

9,978

Germany

376

313

1,078

Poland

-

52

145

Netherlands

540

254

662

France

160

110

348

Switzerland

121

130

409

Rest of Europe

616

753

1,811

Canada

424

224

420

USA

4,911

4,002

9,357

Rest of North America

123

-

123

Australia

288

340

685

Hong Kong

1,526

683

1,766

Japan

1,739

1,443

3,257

Korea

937

209

270

Rest of Asia Pacific

212

133

669

Other

88

501

678

Continuing operations

16,055

14,253

31,656

 

 

 

 

UK

-

1,208

1,693

Discontinued operations

-

1,208

1,693

 

 

 

 

Oxford Metrics Group

16,055

15,461

33,349

 

 

 

By origin

 

 

 

UK

10,406

9,410

20,849

North America

5,466

4,635

10,419

Asia Pacific

183

208

388

Continuing operations

16,055

14,253

31,656

 

 

 

 

UK

-

1,208

1,693

Discontinued operations

-

1,208

1,693

 

 

 

 

Oxford Metrics Group

16,055

15,461

33,349

 

 

 

Segment depreciation and amortisation

 

Six months ended

31 March

 2019

Six months ended

31 March

 2018

Year

 ended

30 September

2018

 

(unaudited)

(unaudited)

(audited)

 

£'000

£'000

£'000

Vicon UK

923

751

1,525

Vicon USA

32

27

57

Vicon Group

955

778

1,582

 

 

 

 

Yotta

393

377

775

Unallocated

5

11

21

Continuing operations

1,353

1,166

2,378

 

 

 

 

Yotta surveying

-

79

101

Discontinued operations

-

79

101

 

 

 

 

Oxford Metrics Group

1,353

1,245

2,479

 

 

Six months ended 31 March 2019 (unaudited)

Six months ended 31 March 2018 (unaudited)

Year ended 30 September 2018 (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

1,208

(174)

699

1,733

947

(107)

335

1,175

2,916

105

1,309

4,330

Vicon USA

2,098

-

(1,666)

432

2,034

-

(1,212)

822

4,372

-

(3195)

1,177

Vicon Group

3,306

(174)

(967)

2,165

2,981

(107)

(877)

1,997

7,288

105

(1,886)

5,507

 

 

 

 

 

 

 

 

 

 

 

 

 

Yotta

(191)

(284)

(495)

(970)

(125)

(246)

(391)

(762)

437

(472)

(993)

(1,028)

Unallocated

(1,386)

(105)

1,462

(29)

(1,367)

(122)

1,438

(51)

(2,556)

(219)

2,879

104

Continuing operations

 

1,729

 

(563)

 

-

 

1,166

 

1,489

 

(475)

 

170

 

1,184

 

5,169

 

(586)

 

-

 

4,583

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OMG Life Group

 

(3)

 

-

 

-

 

(3)

 

18

 

-

 

-

 

18

 

51

 

-

 

-

 

51

Yotta surveying

-

-

-

-

(123)

-

(170)

(293)

(89)

(445)

-

(534)

Discontinued operations

 

(3)

 

 

-

 

-

 

(3)

 

(105)

 

-

 

(170)

 

(275)

 

(38)

 

(445)

 

-

 

(483)

 

 

 

 

 

 

 

 

 

 

 

 

 

Oxford Metrics Group

 

1,726

 

(563)

 

-

 

1,163

 

1,384

 

(475)

 

-

 

909

 

5,131

 

(1,031)

 

-

 

4,100

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-current assets

Additions to non-current assets

Carrying amount of segment assets

Carrying amount of segment liabilities

 

Six months ended 31 March 2019 (unaudited)

Six months  ended 31 March 2018 (unaudited)

Year ended 30 September 2018   (audited)

Six months ended 31 March 2019 (unaudited)

Six months  ended 31 March 2018 (unaudited)

Year ended 30 September 2018   (audited)

Six months ended 31 March 2019 (unaudited)

Six months  ended 31 March 2018 (unaudited)

Year ended 30 September 2018   (audited)

Six months ended 31 March 2019 (unaudited)

Six months  ended 31 March 2018 (unaudited)

Year ended 30 September 2018   (audited)

 

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

 

 

 

 

 

 

 

 

 

 

 

 

 

Vicon UK

8,838

8,629

8,899

759

885

2,006

20,924

18,022

22,522

(5,312)

(4,910)

(4,485)

Vicon USA

858

788

797

31

137

164

6,196

4,764

5,995

(2,125)

(1,303)

(1,698)

Vicon Group

9,696

9,417

9,696

790

1,022

2,170

27,120

22,786

28,517

(7,437)

(6,213)

(6,183)

 

 

 

 

 

 

 

 

 

 

 

 

 

Yotta

5,301

4,912

5,212

462

497

1,177

15,978

15,558

16,093

(3,644)

(3,705)

(3,910)

Yotta Group

5,301

4,912

5,212

462

497

1,177

15,978

15,558

16,093

(3,644)

(3,705)

(3,910)

 

 

 

 

 

 

 

 

 

 

 

 

 

Unallocated

364

300

328

-

2

14

1,905

2,610

1,987

(470)

(344)

(490)

OMG Life Group*

 

7

 

11

 

8

 

-

 

-

 

-

 

(6,046)

 

(6,042)

 

(6,044)

 

-

 

-

 

-

Held for sale

-

-

-

-

-

-

-

2,247

-

-

(437)

-

 

 

 

 

 

 

 

 

 

 

 

 

 

Oxford Metrics Group

 

15,368

 

14,640

 

15,244

 

1,252

 

1,521

 

3,361

 

38,957

 

37,159

 

40,553

 

(11,551)

 

(10,699)

 

(10,583)

 

*The negative balance within segment assets represents a cash overdraft which is part of the Group's cash offset facility.

 

3.  Reconciliation of adjusted profit/(loss) before tax

 

 

Six months ended

31 March

 2019

Six months ended

31 March

 2018

Year

 ended

30 September

2018

 

(unaudited)

(unaudited)

(audited)

 

£'000

£'000

£'000

Profit before tax - continuing operations

1,166

1,184

4,583

Share based payments - equity settled

122

163

323

Amortisation of intangibles arising on acquisition

270

333

645

Redundancy costs

117

-

-

Adjustment to fair value of deferred consideration payable and unwinding of associated discount factor

21

(71)

(457)

Share of post-tax loss of equity accounted associate

33

50

75

Reapportion Group overheads

-

(170)

-

Adjusted profit before tax - continuing operations

1,729

1,489

5,169

 

 

 

 

Loss before tax - discontinued operations

(3)

(275)

(483)

Loss on disposal of subsidiary undertaking

-

-

445

Reapportion Group overheads

-

170

-

Adjusted loss before tax - discontinued operations

(3)

(105)

(38)

 

 

 

 

Total adjusted profit before tax - all operations

1,726

1,384

5,131

 

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

 2019

Six months ended

31 March

 2018

Year

 ended

30 September

2018

 

(unaudited)

(unaudited)

(audited)

 

£'000

£'000

£'000

Profit before tax

2,165

1,997

5,507

Share based payments - equity settled

32

56

110

Amortisation of intangibles arising on acquisition

121

121

242

Adjustment to fair value of deferred consideration payable and unwinding of discount factor

21

(70)

(457)

Reapportion Group overheads

967

877

1,886

Adjusted profit before tax

3,306

2,981

7,288

 

 

 

 

 

 

 

 

 

Yotta Group

 

 

Six months ended

31 March

 2019

Six months ended

31 March

 2018

Year

 ended

30 September

2018

 

(unaudited)

(unaudited)

(audited)

 

£'000

£'000

£'000

Loss before tax

(970)

(762)

(1,028)

Share based payments - equity settled

18

34

69

Amortisation of intangibles arising on acquisition

149

212

403

Redundancy costs

117

-

-

Reapportion Group overheads

495

391

993

Adjusted (loss)/profit before tax

(191)

(125)

437

 

 

 

 

 

 

 

4.  Taxation

 

The Group's consolidated effective tax rate for the six months ended 31 March 2019 was 4.5% (for the six months ended 31 March 2018: 35.2%; for the year ended 30 September 2018: 13.6%).

 

In accordance with IAS 34 the tax charge for the half year is calculated on the basis of the estimated full year tax rate.

 
 

5.  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 2019 (unaudited)

31 March 2018 (unaudited)

30 September 2018 (audited)

 

Earnings/(loss)

Weighted average number of shares

Per share amount

Earnings/(loss)

Weighted average number of shares

Per share amount

Earnings/(loss)

Weighted average number of shares

Per share amount

 

£'000

'000

(pence)

£'000

'000

(pence)

£'000

'000

(pence)

Continuing operations

 

 

 

 

 

 

 

 

 

Basic earnings/(loss) per share

 

 

 

 

 

 

 

 

 

Earnings attributable to ordinary shareholders

1,117

124,970

0.89

746

124,230

0.60

4,027

124,569

3.23

Dilutive effect of employee share options

-

4,092

(0.03)

-

3,619

(0.02)

-

4,327

(0.11)

Diluted earnings/(loss) per share

1,117

129,062

0.86

746

127,849

0.58

4,027

128,896

3.12

Discontinued operations

 

 

 

 

 

 

 

 

 

Basic earnings/(loss) per share

 

 

 

 

 

 

 

 

 

Earnings attributable to ordinary shareholders

(4)

124,970

-

 

(269)

 

124,230

(0.22)

 

(484)

124,569

(0.39)

 

Dilutive effect of employee share options

-

4,092

-

-

3,619

-

-

4,327

-

Diluted earnings/(loss) per share

(4)

129,062

-

(269)

127,849

(0.22)

(484)

128,896

(0.39)

Total operations

 

 

 

 

 

 

 

 

 

Basic earnings/(loss) per share

 

 

 

 

 

 

 

 

 

Loss attributable to ordinary shareholders

1,113

124,970

0.89

477

124,230

0.38

3,543

124,569

2.84

Dilutive effect of employee share options

-

4,092

(0.03)

-

3,619

(0.01)

-

4,327

(0.09)

Diluted earnings/(loss) per share

1,113

129,062

0.86

477

127,849

0.37

3,543

128,896

2.75

 

6.  Share capital

 

 

31 March

31 March

30 September

 

2019

2018

2018

 

(unaudited)

(unaudited)

(audited)

 

£'000

£'000

£'000

Allotted, called up and fully paid

 

 

 

125,063,130 shares of 0.25p (31 March 2018: 124,905,475 shares of 0.25p and 30 September 2018: 124,905,475 shares of 0.25p)

313

312

312

 

During the six month period ended 31 March 2019 there were 122,194 shares issued relating to share options that were exercised.  In addition 35,461 shares were issued to the non-executive Chairman, Roger Parry, in satisfaction of salary.

 

There were 1,812,750 shares issued in respect of share options exercised during the six months ended 31 March 2018 (year ended 30 September 2018: 1,812,750).

 

 

 

7.  Dividends

 

The following dividends were recognised as distributions to equity holders in the period:

 

 

31 March

31 March

30 September

 

2019

2018

2018

 

(unaudited)

(unaudited)

(audited)

 

£'000

£'000

£'000

Final dividend for 2018 paid in 2019 - 1.50 pence per share

1,875

-

-

Special dividend paid in 2019 - 1.00 pence per share

1,250

-

-

Final dividend for 2017 paid in 2018 - 1.20 pence per share

-

1,499

1,499

 

3,125

1,499

1,499

 

The final dividend for 2018 was paid to shareholders on 7 March 2019 at 1.50 pence per share, a total of £1,875,000.  In addition, a special dividend of 1.00 pence per share was paid on 25 January 2019, a total of £1,250,000.

 

 

8.  Changes in accounting policies

 

The Group has applied IFRS 15 using the cumulative effect method, i.e. by recognising the cumulative effect of initially applying IFRS 15 as an adjustment to the opening balance of equity at 1 October 2018, and presenting in the Statement of Changes in Equity for the period ended 31 March 2019.  Therefore the comparative information has not been restated and continues to be reported under IAS 18.  The details of the significant changes and quantitative impact of the changes are set out below.

 

Sales of Vicon systems which include customer support

 

Under IAS 18 revenue was recognised on the delivery of the product or service, with a deferral made for the fair value of the undelivered element under the terms of the sale.  This undelivered element relates to ongoing hardware and software support, the fair value of which was calculated by reference to the anticipated cost, plus a margin, of providing the support service.  Revenue that was not recognised in the income statement under this policy was classified as deferred income in the statement of financial position.

 

Under IFRS 15, revenue should be recognised to depict the transfer of goods and services to customers in an amount that reflects the consideration to which the entity expects to be entitled.  IFRS 15 also includes specific guidance for multi element arrangements, contract costs and disclosures.  An assessment has been made of the impact of IFRS 15 on the way in which revenue will be recognised across the Group.  Whilst most revenue streams within Yotta and Vicon will not be materially affected by the move to IFRS 15, there will be an impact on the way in which revenue from system sales within Vicon is recognised.  These system sales are multi element and include the sale of hardware, software and ongoing support.  Under IFRS 15 the support element of the system sale has been identified as a separate performance obligation and revenue is recognised over time as this obligation is fulfilled.  The revenue attributable to the support element of a system sale is calculated by reference to the equivalent standalone selling price of that support had it not been included within a system sale.  In general, this has resulted in a greater revenue deferral per system sale than under IAS 18. 

 

Impact on Financial Statements

 

The following extracts summarise the impact on the Group consolidated financial statements of adopting IFRS 15 for the period ended 31 March 2019.  Had the Group continued to report in accordance with IAS 18 'Revenue', it would have reported the following amounts in the financial statements for the period ended 31 March 2019.

 

Condensed consolidated income statement

 

 

 

 

 

 

 

 

 

 

Condensed Consolidated Statement of Financial Position

 

 

 

9.  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.

 

 


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