Preliminary Results

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RNS Number : 3533H
Oxford Metrics PLC
03 December 2020
 

3rd December 2020

Oxford Metrics plc

 

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

 

Preliminary Results for the financial year ended 30 September 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 -

 

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 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 / Matthew O'Dowd

 

FTI Consulting                                                                                      +44 (0) 20 3727 1000

Matt Dixon / Emma Hall / Jamille Smith / Greg Hynes

 

About Oxford Metrics

 

Oxford Metrics develops and markets analytics software for motion measurement and infrastructure asset management to clients 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 market-leading divisions: our motion measurement division, Vicon, and our infrastructure asset management division, 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, Amey in the UK and VicRoads in Australia.

 

Founded in 1984, the Group is headquartered in Oxford with offices in Leamington Spa, Gloucester, California, Colorado, 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's Statement

As we review what has been a most unexpected 2020, we find three key themes emerging, which demonstrate both the strengths of the business today and, perhaps more importantly, where the opportunities lie for the future.

 

·     

Oxford Metrics is a resilient business well placed to adapt to changes to the economy arising from the pandemic. Over the past year the Group has clearly demonstrated its strength and agility in the face of unanticipated challenges, moving quickly to adapt to the new environment to continue to serve our customers.

 

 

·   

Short-term sales have been held back but the main growth drivers in our two divisions are accelerating. Although the pandemic did cause a delay in closing sales over the second half of the financial year, we have seen signs of an acceleration of market trends which should benefit us in the future.

 

 

·   

Our strong financial platform affords us the opportunity to bring forward growth plans. Through these unprecedented times we have continued to be profitable and generate cash. Our strong fundamentals and robust financial position provide us with a solid platform to weather challenges presented in the on-going economic environment, re-prioritise and fast track organic growth opportunities and expedite acquisition opportunities.

 

These themes are reflected in our headline financial performance for the 12 months to 30th September 2020 with the Group reporting revenue of £30.3m (FY19: £35.3m) and an Adjusted PBT* of £2.6m (FY19: £5.5m) despite the unprecedented market conditions. Furthermore, we are pleased to report that these results include a profitable second half for our Yotta subsidiary following several years of investment in its transition to a Software-as-a-Service offering ('SaaS'), enhancing the Group's recurring revenue base and forward visibility.

 

We continued to improve the quality of our earnings by increasing our Annual Recurring Revenue ('ARR') to £6.8m (FY19: £6.2m). This growth was achieved by our Yotta subsidiary, which signed £1.0m in new ARR during the financial year (FY19: £1.0m) whilst retention rates fell slightly to 91.7% (FY19: 94.8%).

 

The Group reports another year of cash generation with operating cash flow of £6.4m (FY19: £7.7m). The Group had £14.9m in cash as of 30 September 2020 (30 September 2019: £13.8m) having paid a final 2019 dividend of £2.3m (2018: £1.9m) during the year. In the light of this cash performance and confidence in our resilience as a business but tempered by the continued economic uncertainty, the Board proposes maintaining our final dividend at 1.80p per share (FY19 Final Dividend: 1.80p) this year. Our dividend policy remains to make the pay-out progressive with the aim of maintaining an average dividend cover of approximately 2 times Adjusted* Earnings per Share.

 

Finally, I would like to thank all stakeholders in our business for their exceptional contributions over the past year - our outstanding global team and their families who adapted so well to the new operational environment, and our shareholders, partners and customers who continued to support us in these most challenging of times.

 

Roger Parry

Chair

* 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.

 

CEO STATEMENT

2019/20 was a challenging year, but despite the COVID-19 pandemic both divisions made progress that will benefit both towards our short-term goals and broader strategic aims.

STRATEGIC REVIEW

As the Chairman has already introduced in his review, we saw three key strategically relevant themes develop over the past 12 months. These are worth explaining in detail in order to understand both the historical performance and where the business can go from here.

1. Resilient business well placed to adapt to the post-pandemic economy

From March 2020, we moved quickly to remain fully functional whilst ensuring the safety of our people and customers. None of our employees were furloughed and we serviced our global customer base remotely. For those who could not work from home, we put in place safe working environments and practices and saw no significant hiatus in our ability to fulfil customer orders at Vicon or deliver implementation projects at Yotta. The team adapted brilliantly to this new remote working model.

 

Looking forward, evidence from our sales and client service teams suggests that customers have changed the way they want to engage with us as a result of the pandemic. We have stayed close to customers throughout the pandemic and are fortunate to have strong, established and well-respected brands which provide the environment of trust to enable the whole sales process to be conducted without the same number of face-to-face meetings. Whilst we still expect to make some sales in traditional ways, we believe we can increase sales efficiency by making full use of remote working.

2. Short-term sales delay but macro growth drivers accelerating

The second observation is that although the pandemic caused a short-term delay to sales across both divisions, we saw stronger macro winds of positive market change which, we believe, will assist in driving our growth in the future.

 

During the lockdowns and throughout the second half, the sales delay arose from some of our customers having to shut down their operations and activities which meant our planned sales to them were deferred. In some cases, this was customers needing to address immediate operational needs, temporarily de-prioritising adoption or upgrade of our technology. For example, where Local Authorities needed to focus on the reconfiguration of their services, such as waste collection or home care, given the new lockdown environments. This switch of focus delayed procurement processes, rather than causing their cancellation, and as we move into 2021 we see a broad picture of a return to more normal Local Authority procurement cycles. Indeed, we are encouraged by the interest shown by new customers. In the case of Yotta we believe the strong word-of-mouth approval from users of our software is creating interest from a wider range of UK Local Authorities, and Vicon's motion measurement technology is finding a wider range of potential end-users as new use cases continue to emerge.

 

Despite the pandemic causing a short-term sales delay, it also accelerated broader changes prevalent in our markets - all of which are positive for the long-term success of the Group.

 

In Yotta, we have witnessed an acceleration in the Digital Transformation of public asset management. With asset maintenance and service teams across the UK now having to work and be managed remotely - be that assigning work, reporting inspections or collecting waste - local government customers need digital tools to help them run their services in this new way. This "shift to digital" was already underway but the pandemic has accelerated the need for tools like Yotta's to seamlessly manage this new remote way of working.

 

At Vicon, the macro driver is the move of motion measurement into the mainstream and into everyday life - watches which measure our steps, robotics which assist our lives, and smartphones which can now track skeletal movement. The pandemic has made companies look to bring forward remote sensing or operations projects, which requires a capability to measure motion within their products and services. For example, non-contact passenger security systems which will remotely track our movements and behaviours to ensure public safety; or virtual film production which requires fewer people simultaneously on set; or in monitoring patients post-orthopaedic surgery at home avoiding the need to bring patients into traditional healthcare environments. This acceleration in the move to remote sensing in more markets is further validation of Vicon's broader application and bodes well for this division's continuing long-term success.

3. Strong financial platform affords us the opportunity to bring forward growth plans

The Group's finances are in robust shape. We generated cash despite the exceptional trading environment. We have no debt, exercise tight financial controls and we are maintaining our dividend this year, without impacting our ability to invest in the future of the business. Given the strength of this financial position and the accelerated macro picture in both our divisions, we are now in a position to bring forward our growth plans through both organic and inorganic development.

Organic growth

Both divisions have organic growth opportunities. At Yotta, we estimate we hold around 12% of the UK market for applications we serve. Over the past 12 months with growing ARR levels, we have demonstrated we have a compelling proposition with our innovative product, Alloy. Several flagship partnerships have been secured including: with Panasonic to run Alloy on their in-cab devices in waste collection vehicles; with Telensa, the UK's largest provider of smart IoT streetlights, to provide a seamless lighting solution; and control groups of streetlights and with bbits as part of their "Love Clean Streets" initiative. Over the coming year we will continue to invest in both market and product development with a key focus on the UK market.

 

At Vicon, our organic plans fall into two specific growth vectors: Established Markets and Adjacent Verticals. In our Established Markets business, where we hold a market-leading position, we will continue to invest in R&D to provide the most capable platform for our customers to undertake their work and maintain that leadership role. Our Adjacent Verticals opportunity continues to grow as more markets recognise the value motion measurement can bring to their specific vertical implementation. We can see this in the interest in our elite sports solutions from the new markets of orthopaedic rehabilitation and military performance management, and also in the emerging opportunity to exploit our Location-based Virtual Reality ('LBVR') solution further in the enterprise and defence markets.

 

As we look to exploit these adjacent market opportunities, we are developing and working with a network of carefully selected partners, who provide complementary technology and/or channels to market. We now have 14 such partners in total. This partner-centric approach means the business can focus on its core competency of measurement capability and avoid the expensive market start-up costs of channel development and whole product investment.

Inorganic growth

Given our strong financial position we are actively investigating acquisition opportunities to strengthen both of our existing divisions. Using a strict criteria lens, we are exploring opportunities in software related to measurement and data analysis with niche commercial applications.

 

In our asset management division, this means expanding our geographical and/or vertical market customer footprint. We know Alloy can manage almost any type of asset and thus has applications outside its current markets, therefore we can accelerate its adoption by adding organisations with existing successful customer relationships in those markets.

 

In our motion measurement division, we have two broad target areas. Firstly, companies which hold complementary sensing and measuring technologies which can be incorporated into the Vicon proposition, and secondly companies which hold material end-user market positions which would benefit from motion-enabling or bringing our existing 3D capabilities to their marketplaces.

 

Our strategy and strong financial position enable us to drive our software into more applications, amplifying the core of what we do. 

 

OPERATIONAL REVIEW

2019/20 was a challenging year operationally but despite the COVID-19 pandemic both Vicon and Yotta made progress and growth trends have accelerated that will benefit the longer-term for both divisions.

Asset Management Division - Yotta

KPI

Revenue

PBT

Adjusted PBT*

 

FY20

FY19

FY20

FY19

FY20

FY19

Asset Management

£7.5m

£7.0m

(£1.3m)

(£1.5m)

(£0.1m)

(£0.2m)

 

Our Asset Management division, Yotta, reported its highest level of ARR of £6.8m on 30th September 2020 (30th September 2019: £6.2m) and customer retention of 91.7% (FY19: 94.8%). Having reported additions to ARR in the first half of £0.8m, progress was muted in the third quarter due to the pandemic, but the market has since adapted and momentum driven by ongoing Digital Transformation saw additions rise in the fourth quarter to record total additions for the year of £1.0m.

 

Reported headline revenue increased by 7.3% to £7.5m (FY19: £7.0m) and the division reported an Adjusted PBT* loss of £0.1m (FY19 Loss: £0.2m). Our shareholders will be aware that we have been investing in Yotta for several years and consequently the business has been loss-making. Having completed its transition to SaaS, we are delighted to report that the business produced a £0.4m profit in the second half and is now profitable on a run-rate basis at the current level of ARR and normal levels of consulting revenue, so a major milestone has been achieved by the business.

 

This growth in ARR was driven by some excellent competitive wins across UK local government, including at South Gloucestershire, Warwickshire, Somerset, Worcestershire and City of York. Furthermore, because of lockdowns, contract wins secured in the first part of the year were successfully implemented remotely. This worked well and, indeed, we have been able to get many customers live and continue to implement with others, some of which without ever meeting them in person.

 

During Q3 Yotta saw sales wins pause, but the processes around pipeline generation and activity did not. Yotta's sales team worked on modifying their customer and prospect engagement models to reflect the new situation and activity levels in the earlier part of sales campaigns remained high. Q4 saw many of the stalled latter-stage campaigns restart and close due to reduced pressure on Local Authority authorisation processes.

 

We are now seeing activity levels grow throughout Yotta's sales processes, with many new and existing prospects and customers citing a higher priority for capable and robust systems to help them operate in a world where remote services are needed. This is accelerating the need for systems to aid implementation of Digital Transformation processes, where customers want or need to engage online and not in person. Alloy's connectivity and flexible data model means that it is ideally placed to help customers react to situations for which they have not planned. New services or asset classes can easily be created by them using standard tools. Similarly, connections to new audiences or other systems are equally available.

 

With the expectation that at least another £1.0m will be added to ARR in FY21, our Asset Management division is well placed to deliver a full year of profitability ahead.

Motion Measurement Division - Vicon

KPI

Revenue

PBT

Adjusted PBT*

 

FY20

FY19

FY20

FY19

FY20

FY19

Motion measurement

£22.8m

£28.3m

£2.7m

£6.3m

£4.8m

£8.1m

 

Vicon reported a decline in revenue of 19.6% to £22.8m (FY19: £28.3m) which has interrupted continuous growth since 2015. The COVID-19 pandemic affected all market segments but to varying degrees. Hardest hit was the Engineering segment, down 31.2% and the Life Sciences segment down 25.8%. In contrast the Entertainment segment was down by only 1.0% and Adjacent Verticals (including primarily LBVR) was down 5.1%.

 

Gross margin on reported revenue was 73.6% (FY19: 74.0%) so largely comparable with last year, but the impact in real terms was a loss of gross margin of around £4.0m compared to last year. The impact on Adjusted PBT* was mitigated to some extent by lower commissions and primarily from Lockdown-related savings. For example, travel-related costs, marketing events and other areas of discretionary spend were substantially lower than last year. Consequently, Vicon reported a lower Adjusted PBT* of £4.8m (FY19: £8.1m).

Established Markets - strength in leadership

In order to maintain our leadership position in our most developed markets we continued to invest in R&D and product innovation throughout the year, which saw us deliver over 20 new software releases over the year. This included the addition of a Machine Learning-based hand and finger tracking solution in Shogun, our Entertainment market solution, and new versions of Nexus, our flagship Life Sciences software.

 

We also updated our iPhone/iPad app, Capture.U, several times during the year. This innovative app uses both Apple's iOS skeletal tracking, now enhanced with the LIDAR sensors on-board the Pro versions of the iPad and iPhone, and our own Blue Trident Inertial Measurement Units. The app enables researchers to 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 capabilities combined with Vicon's clear market differentiation helped win deals around the world. This included an especially strong performance in the Asia Pacific region with wins at Tencent, Konami and ASICS.

Adjacent Markets - developing new growth vectors

In addition to growing our Established Market business, we also seek further growth by applying our technology to newer markets which offer higher levels of potential growth. We are focussed on two specific opportunities: LBVR and Elite Sports.

 

LBVR revenue of £1.7m (FY19: £1.8m) was recorded with the planned rollouts by our partners slowing as a result of COVID-19. That said, we signed four new partners over the full course of the year, and existing partner Europa-Park, one of the world's leading theme parks, introduced their very large free-roaming LBVR experience aimed at the theme park market. Furthermore, partners also found there is interest in the enterprise market for their collective VR experiences, where we fulfilled a number of orders for this broader enterprise market.

 

Our elite sports offering, IMU Step, made progress during the year. Prior to lockdown and the suspension of virtually all elite sports, 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 the University of Kentucky and the University of Montana. We also engaged in a number of exploratory partnership programmes which would see our technology embedded in others' sports solutions. Since the gradual return of elite sports, we have seen some degree of life returning to the market, and we have also identified new markets for our solution in orthopaedic rehabilitation and military performance management, which we are now pursuing.

CURRENT TRADING AND OUTLOOK

Both businesses have started the new financial year well, however the COVID-19 pandemic is on-going, so uncertainty remains which continues to affect certain end-markets.

 

Vicon's current sales pipeline includes a rollover of opportunity from FY20 into FY21 that is expected to benefit future quarters. The timing and recognition of these potential orders is taking longer than normal as customers adapt purchasing plans to suit their own financial and operational circumstances. In the immediate short-term our sales pipeline for Q1 is comparable overall with this time last year (pre-COVID). This combined with longer term sales pipeline data suggests recovery is underway in our Rest-of-World markets but for the time being the USA remains subdued.

 

Yotta has a strong ARR sales pipeline for the full year, consistent with adding at least another £1.0m gross additions to ARR during the financial year. With this anticipated growth in ARR and a stable cost base, Yotta can look forward to a full year of profitability.

 

We operate two market-leading divisions in expanding global markets with highly differentiated software products and clear strategies to continue to drive progress - amplifying our core. We will continue to both invest in our organic growth and explore acquisition opportunities, which together can accelerate our strategies within our chosen markets.

 

Returning to the three themes of 2020, we enter FY21 a resilient Group with two fundamentally strong and profitable businesses, both of which are seeing an acceleration in favourable market dynamics. This platform together with our robust Balance Sheet mean we feel confident in our ability to adapt, innovate and navigate any further challenges that may arise whilst driving organic and inorganic growth.

 

Nick Bolton

CEO

FINANCIAL REVIEW

Income Statement

The Group reported revenue of £30.3m (FY19: £35.3m) representing a headline decline of 14.3%, and on a constant FX basis the decline was 13.9%. The segmental revenue analysis illustrates that all market segments were affected and from a geographic standpoint, the USA market suffered more than most, down £5.0m compared with last year.

 

Gross Profit margin reduced slightly to 69.0% (FY19: 71.2%), reflecting a slight change in the mix of revenue. Gross Profit declined year on year by £4.3m to £20.9m.

 

Reviewing the cost base within the Income Statement:

 

·     

Sales, Support and Marketing costs decreased by £1.3m which was largely due to marketing and operational savings arising from COVID-19 lockdowns and subsequent virtual operations for the remainder of the financial year, as well as lower sales commissions.

 

 

·     

Research & Development expensed through the Income Statement was £4.2m (FY19: £4.2m). Total R&D including capitalised development costs of £2.5m (FY19: £2.2m) was £6.7m (FY19: £6.4m), the overall increase was due to the R&D amortisation and impairment charge of £1.8m (FY19: £1.6m). The continual investment and innovation in product and services is necessary to maintain the Group's competitive position and a number of the new products and services released during the financial year and described in the CEO review are already gaining traction in the market.

 

 

·     

Administration expenses were largely unchanged overall.

 

Adjusted PBT* of £2.6m (FY19: £5.5m) has been determined after adding back to the Statutory PBT £1.6m (FY19: £4.7m) non-cash moving items such as amortisation of acquired intangibles, share option charge, impairment of investment in Pimloc, adjustment to fair value of deferred consideration payable for IMeasureU Limited and non-recurring exceptional items which this year included aborted M&A costs of £0.2m. A full reconciliation is available in note 6.

Statement of Financial Position

Goodwill and intangibles

The modest increase in goodwill and intangibles represents the net effect of capitalised R&D of £2.5m (FY19: £2.2m), amortisation and impairment of development costs £1.8m (FY19: £1.6m) and the amortisation of acquired intangibles of £0.6m (FY19: £0.6m).

Property, plant and equipment

The decline arose due to the net effect of capital expenditure of £0.3m (FY19: £0.5m) and a depreciation charge of £0.6m (FY19: £0.6m).

Right of use assets

The Group has now adopted IFRS16. The balance reported of £2.2m (FY19: £0.0m) represents the value of property and assets utilised by the Group.

Investments

The year-on-year movement relates to an investment of £0.2m for a minority interest in Trensl Inc. which provides training VR solutions for the military and healthcare (rehabilitation). The investment comes back-to-back with an exclusive Supply Agreement to provide all systems. The year on year movement also includes the impairment of our investment in Pimloc Limited being our share of post-acquisition losses from Pimloc's trading.

Inventories

The inventory position at the end of the financial year was £3.4m (FY19: £3.2m).

Trade and other receivables

At the year-end trade and other receivables decreased to £9.2m (FY19: £11.7m). The overall decrease is largely due to accounts receivable that was lower compared to a particularly strong September 2019 revenue in the USA.

Current liabilities

The year-on-year decline in trade and other payables is accounted for by a decrease in trade payables at the year-end to £2.0m (FY19: £2.9m) which relates to the shipment of goods in September 2019 being greater than September 2020.

 

The lease liabilities balance reported of £0.4m (FY19: £0.0m) represents the value of lease payments due within one year relating to right of use assets given the adoption of IFRS16.

Non-current liabilities

The lease liabilities balance reported of £1.9m (FY19: £0.0m) represents the value of lease payments due greater than one year relating to right of use assets given the adoption of IFRS16.

Statement of cashflows

The Group finished the year with cash of £14.9m (FY19: £13.8m).

 

Cash generated from operating activities was £6.4m (FY19: £7.7m) which included a working capital inflow arising from a reduction in accounts receivables of £2.2m. The deployment of this cash included continued investment in development giving rise to a purchase of intangibles of £2.5m (FY19: 2.2m) and payment of dividends of £2.3m (FY19: £3.1m)

Tax

The Group tax charge this year was £0.0m (FY19: £0.5m). This decrease for the most part is due to the recognition of tax losses that can be Group relieved in the future. The level of Group R&D activities in the UK where the marginal rate of tax is 19% (FY19: 19%) continues to have a beneficial effect on the level of corporation tax payable in the UK given the reliefs available.

 

The deferred tax asset increased to £1.0m (FY19: £0.4m) due to the aforementioned recognition of losses whilst the deferred tax liability increased slightly to £2.0m (FY19: £1.8m) due to a change of deferred taxation rates.

 

David Deacon

CFO

* 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.

 

consolidated INCOME statement

for the year ended 30 september 2020

 

 

 

2020

2019*

 

Note

£'000

£'000

Revenue

3

30,298

35,350

Cost of sales

 

(9,400)

(10,166)

 

 

 

 

Gross profit

 

20,898

25,184

Sales, support and marketing costs

 

(7,341)

(8,663)

Research and development costs

 

(4,213)

(4,184)

Administrative expenses

 

(7,813)

(7,875)

Other operating income

 

163

202

 

 

 

 

Operating profit

 

1,694

4,664

Finance income

 

20

66

Finance expense

 

(103)

(2)

Share of post-tax loss of equity accounted associate

 

(29)

(59)

 

 

 

 

Profit before taxation

3,5

1,582

4,669

Taxation

7

22

(504)

Profit from continuing operations

 

1,604

4,165

 

 

 

 

Profit from discontinued operations, net of tax

 

-

13

Profit attributable to owners of the parent during the year

 

 

 

1,604

 

 

4,178

 

 

 

 

 

 

 

 

Earnings per share for profit on continuing operations attributable to owners of the parent during the year

 

 

 

Basic earnings per ordinary share (pence)

8

1.28p

3.33p

Diluted earnings per ordinary share (pence)

8

1.26p

3.24p

 

 

 

 

Earnings per share for profit on total operations attributable to owners of the parent during the year

 

 

 

Basic earnings per ordinary share (pence)

8

1.28p

3.34p

Diluted earnings per ordinary share (pence)

8

1.26p

3.25p

 

 

 

 

 

COnsolidated statement of

comprehensive income FOR THE YEAR

ENDED 30 sEPTEMBER 2020

 

 

 

 

 

 

 

2020

2019*

 

 

£'000

£'000

Net profit for the year

 

1,604

4,178

Other comprehensive income

 

 

 

Items that will or may be reclassified to profit or loss

 

 

 

Exchange differences on retranslation of overseas subsidiaries

 

(353)

271

Total other comprehensive (expense)/income

 

(353)

271

Total comprehensive income for the year attributable to owners of the parent

 

1,251

4,449

 

* The Group has applied IFRS 16 using the modified retrospective approach.  Under this method the comparative information is not restated. 

 

 

consolidated statement of financial position AS AT 30 september 2020

 

 

 

 

 

2020

2019*

 

£'000

£'000

Non-current assets

 

 

Goodwill and intangible assets

12,551

12,449

Property, plant and equipment

1,937

2,280

Right of use assets

2,182

-

Financial asset - investments

305

98

Deferred tax asset

974

405

 

17,949

15,232

Current assets

 

 

Inventories

3,439

3,236

Trade and other receivables

9,224

11,687

Current tax debtor

82

177

Cash and cash equivalents

14,940

13,837

 

27,685

28,937

 

 

 

Current liabilities

 

 

Trade and other payables

(9,931)

(10,733)

Lease liabilities

(426)

-

 

(10,357)

(10,733)

 

 

 

Net current assets

17,328

18,204

Total assets less current liabilities

35,277

33,436

 

 

 

Non-current liabilities

 

 

Other liabilities

(609)

(462)

Lease liabilities

(1,909)

-

Provisions

(24)

(16)

Deferred tax liability

(1,994)

(1,797)

 

(4,536)

(2,275)

 

 

 

Net assets

30,741

31,161

 

 

 

Capital and reserves attributable to

owners of the parent

 

 

Share capital

314

313

Shares to be issued

65

65

Share premium account

17,763

17,417

Retained earnings

12,437

12,851

Foreign currency translation reserve

162

515

Total equity shareholders' funds

30,741

31,161

 

 

 

* The Group has applied IFRS 16 using the modified retrospective approach.  Under this method the comparative information is not restated.

  

 

consolidated STATEMENT of CASHFLOWS

For the YEAR ended 30 september 2020

 

 

 

 

 

2020

2019*

 

£'000

£'000

Cash flows from operating activities

 

 

Operating profit/(loss) from continuing operations

1,694

4,664

Operating profit from discontinued operations

-

21

Group operating profit/(loss)

1,694

4,685

 

 

 

Depreciation and amortisation

3,448

2,761

Impairment of intangible assets

72

-

Impairment of investment

-

-

Share-based payments

160

264

Exchange adjustments

(200)

134

(Increase)/decrease in inventories

(225)

(823)

Decrease/(increase) in receivables

2,248

(949)

(Decrease)/increase in payables

(771)

1,600

Cash generated from operating activities

6,426

7,672

 

 

 

Tax paid

(157)

(369)

 

 

 

Net cash from operating activities

6,269

7,303

 

 

 

Cash flows from investing activities

 

 

Purchase of property, plant and equipment

(310)

(467)

Purchase of intangible assets

(2,511)

(2,196)

Purchase of investment

(236)

-

Proceeds on disposal of property, plant and equipment

33

79

Interest received

20

23

Interest paid

(103)

(2)

Interest arising on contingent consideration

-

43

Acquisition of subsidiary undertaking net of cash acquired

(128)

(141)

 

 

 

Net cash used in investing activities

(3,235)

(2,661)

 

 

 

Cash flows from financing activities

 

 

Issue of ordinary shares

322

91

Equity dividends paid

(2,253)

(3,125)

 

 

 

Net cash used in financing activities

(1,931)

(3,034)

 

 

 

Net increase in cash and cash equivalents

1,103

1,608

 

 

 

Cash and cash equivalents at beginning of the period

13,837

12,229

 

 

 

 

 

 

Cash and cash equivalents at end of the period

14,940

13,837

 

 

 

 

* The Group has applied IFRS 16 using the modified retrospective approach.  Under this method the comparative information is not restated. 

 

 

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 SEPTEMBER 2020

 

 

 

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 1 October 2018

312

65

17,327

11,358

244

 

 

 

 

 

 

 

Net profit for the year

-

-

-

4,178

-

4,178

 

 

 

 

 

 

 

Exchange differences on retranslation of overseas subsidiaries

-

-

-

-

271

271

 

 

 

 

 

 

 

Transactions with owners:

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax recognised directly in equity in relation to employee share option schemes

-

-

-

176

-

176

 

 

 

 

 

 

 

Dividends

-

-

-

(3,125)

-

(3,125)

 

 

 

 

 

 

 

Issue of share capital

1

-

90

-

-

91

 

 

 

 

 

 

 

Share based payment charge

-

-

-

264

-

264

 

 

 

 

 

 

 

Balance as at 30 September 2019*

313

65

17,417

12,851

515

31,161

 

 

 

 

 

 

 

Net profit for the year

-

-

-

1,604

-

1,604

 

 

 

 

 

 

 

Exchange differences on retranslation of overseas subsidiaries

-

-

-

-

(353)

(353)

 

 

 

 

 

 

 

Transactions with owners:

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax recognised directly in equity in relation to employee share option schemes

-

-

-

100

-

100

 

 

 

 

 

 

 

Dividends

-

-

-

(2,253)

-

(2,253)

 

 

 

 

 

 

 

Issue of share capital

1

-

346

-

-

347

 

 

 

 

 

 

 

Share based payment charge

-

-

-

135

-

135

 

 

 

 

 

 

 

Balance as at 30 September 2020

314

65

17,763

12,437

162

30,741

 

*The Group has applied IFRS 16 using the modified retrospective approach. Under this method the comparative information is not restated. 

 

 

1.     Basis of preparation of the financial information

 

The financial information in this preliminary announcement has been prepared in accordance with the recognition and measurement criteria of IFRS.  This announcement does not itself contain sufficient information to comply with IFRS. The Company expects to publish full financial statements that comply with IFRS on 3rd December 2020.

 

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise judgement in the process of applying the Group's accounting policies which affect the reported amount of assets and liabilities at the statement of financial position date and the reported amounts of revenues and expenses during the reported period.  Although the estimates are based on management's best knowledge of the amount, event or actions, actual results may ultimately differ from those estimates.

 

The financial information set out in this preliminary announcement does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006 for the years ended 30 September 2020 and 30 September 2019 but is derived from those accounts. The statutory accounts for the year ended 30 September 2019 have been delivered to the Registrar of Companies and those for the year ended 30 September 2020 will be delivered following the Company's annual general meeting. The auditors have reported on those accounts: their report was unqualified, did not contain references to any matters to which the auditors drew attention by way of emphasis and did not contain a statement under Section 498 of the Companies Act 2006 for the year ended 30 September 2020 or 30 September 2019.

 

2.     Basis of consolidation

 

The consolidated financial information incorporates the results of the Company and all of its subsidiary undertakings drawn up to 30 September 2020.

 

3.     Revenue from contracts with customers

 

All revenue is from continuing operations.

 

 

                                                                                                                                                               

 

2020

2019

Revenue

£'000

£'000

 

 

 

Vicon UK

13,540

14,638

Vicon USA

9,228

13,692

Vicon Group

22,768

28,330

 

 

 

Yotta

7,530

7,020

 

 

 

Oxford Metrics Group

30,298

35,350

 

 

 

 

 

 

 

 

 

Timing of the transfer of goods

2020

and services

Vicon UK

Vicon USA

Yotta

Total

 

£'000

£'000

£'000

£'000

 

 

 

 

 

Point in time

12,240

7,231

1,775

21,246

Over time

1,300

1,997

5,755

9,052

Oxford Metrics Group

13,540

9,228

7,530

30,298

 

 

 

 

 

Contract Counterparties

 

 

 

 

 

Direct to consumers

2,831

8,617

6,420

17,868

Third party distributor

10,709

611

1,110

12,430

Oxford Metrics Group

13,540

9,228

7,530

30,298

 

 

 

 

 

By destination

 

 

 

 

 

UK

2,248

-

7,227

9,475

Germany

613

-

-

613

Italy

231

-

-

231

Netherlands

449

-

29

478

France

189

-

-

189

Switzerland

294

-

-

294

Russia

350

-

-

350

Rest of Europe

1,003

-

2

1,005

Canada

-

1,006

-

1,006

USA

1

7,706

-

7,707

Rest of North America

6

227

-

233

Australia

1,307

-

256

1,563

Hong Kong

3,205

-

-

3,205

Japan

3,061

-

-

3,061

South Korea

323

-

-

323

Rest of Asia Pacific

260

-

 

260

Other

-

289

16

305

Oxford Metrics Group

13,540

9,228

7,530

30,298

 

 

 

 

 

 

2019

Timing of the transfer of goods

and services

Vicon UK

Vicon USA

Yotta

Total

 

£'000

£'000

£'000

£'000

 

 

 

 

 

Point in time

13,507

11,784

1,741

27,032

Over time

1,131

1,908

5,279

8,318

Oxford Metrics Group

14,638

13,692

7,020

35,350

 

 

 

 

 

Contract Counterparties

 

 

 

 

 

Direct to consumers

3,440

12,044

6,811

22,295

Third party distributor

11,198

1,648

209

13,055

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

Russia

46

-

-

46

Rest of Europe

812

-

4

816

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

 

 

 

 

 

 

 

 

 

 

                                                                                        

 

 

2020

£'000

 

2019

£'000

Vicon revenue by market

 

 

Engineering

4,139

6,015

Entertainment

6,732

6,802

Life sciences

10,117

13,637

Established markets

20,988

26,454

 

 

 

Adjacent verticals

1,780

1,876

Vicon Group*

22,768

28,330

 

 

Yotta revenue by type

 

 

Software and related services

 

7,530

 

7,020

 

 

 

Yotta Group

7,530

7,020

 

 

Group revenue by type

 

 

Sale of hardware

18,221

23,710

Sale of software

4,494

7,023

Rendering of services

7,583

4,618

 

 

 

Oxford Metrics Group

30,298

35,350

 

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

 

 

 

 

2020

2019

 

£'000

£'000

Revenue by origin

 

 

UK

20,796

21,268

North America

9,228

13,692

Asia Pacific

274

390

Oxford Metrics Group

30,298

35,350

 

 

 

 

 

Contract balances

 

 

2020

 

Contract assets

Contract liabilities

 

£'000

£'000

 

 

 

At 1 October 2019

787

5,370

 

 

 

Transfers from contract assets to trade receivables

(1,518)

-

 

 

 

Amounts included in contract liabilities recognised as revenue during the period

 

-

 

(9,498)

 

 

 

Excess of revenue recognised over cash during the period

1,141

-

 

 

 

Cash received in advance of performance and not recognised as revenue during the period

 

-

 

10,062

 

 

 

Foreign exchange differences

1

(84)

 

 

 

At 30 September 2020

411

5,850

 

2019

 

Contract assets

Contract liabilities

 

£'000

£'000

 

 

 

At 1 October 2018

666

3,848

Cumulative catch up adjustments

-

872

 

 

 

Transfers from contract assets to trade receivables

(3,944)

-

 

 

 

Amounts included in contract liabilities recognised as revenue during the period

-

(8,486)

 

 

 

Excess of revenue recognised over cash during the period

4,065

-

 

 

 

Cash received in advance of performance and not recognised as revenue during the period

-

9,173

 

 

 

Foreign exchange differences

-

(37)

 

 

 

At 30 September 2019

787

5,370

 

Contract assets and contract liabilities are included within trade and other assets and trade and other payables respectively on the face of the statement of financial position. They arise primarily from the Group's software and support contracts which are delivered over time and where the cumulative payments received from customers at each balance sheet date do not necessarily equal the amount of revenue recognised on the contract.

 

Remaining performance obligations

 

The majority of the Group's contracts are for the delivery of goods and services within the next 12 months for which the practical expedient in paragraph 121(a) of IFRS 15 applies.  However, some software and support contracts are for a period greater than 12 months and the amount of revenue that will be recognised in future periods on these contracts is as follows:

 

At 30 September 2020

2021

2022

2023

2024

2025

2026

 

£'000

£'000

£'000

£'000

£'000

£'000

 

 

 

 

 

 

 

Support contracts

2,649

604

376

299

281

8

Software contracts

1,477

862

473

301

-

-

 

4,126

1,466

849

600

281

8

  

 

At 30 September 2019

2020

2021

2022

2023

2024

2025

 

£'000

£'000

£'000

£'000

£'000

£'000

 

 

 

 

 

 

 

Support contracts

2,410

753

430

285

250

257

Software contracts

752

681

492

133

10

-

 

3,162

1,434

922

418

260

257

 

 

4.   Segmental analysis

 

Segment information is presented in the 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 engineering, entertainment 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.

 

Inter segment transfers are priced along the same lines as sales to external customers, with an appropriate discount being applied to encourage use of Group resources.  This policy was applied consistently throughout the current and prior year.  There were no significant inter segment transfers during the current or prior year.

 

Intra segment sales between Vicon UK and Vicon USA are eliminated prior to management and internal reporting, and hence are not shown separately in the analysis below.  The total intra segment sales between Vicon UK and Vicon USA in the year ended 30 September 2020 are £3,766,000 (2019: £7,630,000).

 

Segment assets consist primarily of property, plant and equipment, intangible assets, inventories and trade and other receivables.  Unallocated assets comprise deferred taxation, investments and cash and cash equivalents.

 

 

 

2020

2019

 

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

 

 

 

 

 

 

 

 

 

Vicon UK

1,571

(275)

393

1,689

2,354

(125)

3,248

5,477

Vicon USA

3,277

-

(2,218)

1,059

5,760

-

(4,976)

784

Vicon Group

4,848

(275)

(1,825)

2,748

8,114

(125)

(1,728)

6,261

 

 

 

 

 

 

 

 

 

Yotta

(115)

(398)

(758)

(1,271)

(230)

(469)

(808)

(1,507)

Unallocated

(2,174)

(304)

2,583

105

(2,421)

(200)

2,536

(85)

Continuing operations

 

2,559

 

(977)

 

-

 

1,582

 

5,463

 

(794)

 

-

 

4,669

 

 

 

 

 

 

 

 

 

OMG Life Group

 

-

 

-

 

-

 

-

 

21

 

-

 

-

 

21

Discontinued operations

 

-

 

-

 

-

 

-

 

21

 

-

 

-

 

21

 

 

 

 

 

 

 

 

 

Oxford Metrics Group

 

2,559

 

(977)

 

-

 

1,582

 

5,484

 

(794)

 

-

 

4,690

 

Adjusted profit before tax is detailed in note 6.

 

Segment depreciation and amortisation

 

2020

£'000

2019

£'000

 

 

 

Vicon UK

2,263

1,898

Vicon USA

208

64

Vicon Group

2,471

1,962

 

 

 

Yotta

1,031

787

Unallocated

18

12

Oxford Metrics Group

3,520

2,761

 

 

 

Non-current assets

Additions to non-current assets

Carrying amount of segment assets

Carrying amount of segment liabilities

 

2020

2019

2020

2019

2020

2019

2020

2019

 

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

 

 

 

 

 

 

 

 

 

Vicon UK

9,581

8,642

3,221

1,667

23,320

22,687

(5,827)

(5,781)

Vicon USA

1,071

317

5,938

8,824

(2,802)

(2,973)

Vicon Group

10,652

3,538

1,722

29,258

31,511

(8,629)

(8,754)

 

 

 

 

 

 

 

 

 

Yotta Group

6,664

5,366

1,806

912

16,511

13,069

(5,856)

(3,852)

 

 

 

 

 

 

 

 

 

Unallocated

633

386

247

29

5,917

5,641

(408)

(402)

OMG Life Group*

 

-

 

-

 

-

 

-

 

(6,052)

 

(6,052)

 

-

 

-

 

 

 

 

 

 

 

 

 

Oxford Metrics Group

 

17,949

 

15,232

 

5,591

 

2,663

 

45,634

 

44,169

 

(14,893)

 

(13,008)

 

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

 

 

5.   Profit for the year

 

The profit for the year is stated after charging / (crediting):

 

2020

2019

 

£'000

£'000

Depreciation of right of use assets

528

-

Depreciation of property, plant and equipment - owned

610

621

Amortisation of customer relationships

312

314

Amortisation of intellectual property

245

245

Amortisation of development costs

1,753

1,581

Impairment of development costs

72

-

Share based payments - equity settled

25

25

Share option charges

135

264

Operating lease charges - land and buildings

-

607

Foreign exchange loss

(24)

98

Grant income receivable

(163)

(202)

 

6.   Reconciliation of adjusted profit before tax

 

The adjusted profit before tax is considered by the Board to more accurately reflect the underlying operating performance of the business on a go-forward basis and complements the statutory measure as reported in the Consolidated Income Statement.

The reconciliation of profit before tax to adjusted profit provided below includes items that are:

non-recurring in nature, such as redundancy costs incurred from time to time, acquisition costs and results of the Group's equity accounted associate, which are not core to operations or future operating performance.

non-cash moving items which arise from the accounting treatment of share based payments and the amortisation of acquired intangibles which affect neither future operating performance nor cash generation.

The above definition has been consistently applied historically and is the measure by which the market generally judges PBT performance.

 

2020

2019

 

£'000

£'000

Profit before tax - continuing operations

1,582

4,669

Share option charges

135

264

Amortisation of intangibles arising on acquisition

541

541

Redundancy costs

74

125

Aborted transaction costs

198

-

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

-

(195)

Share of post-tax loss of equity accounted associate

29

59

Adjusted profit before tax - continuing operations

2,559

5,463

 

 

 

Profit before tax - discontinued operations

-

21

Adjusted profit before tax - discontinued operations

-

21

 

 

 

Total adjusted profit before tax - all operations

2,559

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)

 

 

2.05p

3.96p

Diluted earnings per share (pence)

 

 

2.02p

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)

 

 

2.05p

3.97p

Diluted earnings per share (pence)

 

 

2.02p

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

 

2020

2019

 

£'000

£'000

Profit before tax

2,748

6,261

Share option charges

33

78

Amortisation of intangibles arising on acquisition

242

242

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

-

(195)

Reapportion Group overheads

1,825

1,728

Adjusted profit before tax

4,848

8,114

 

 

 

 

Yotta Group

 

2020

2019

 

£'000

£'000

Loss before tax - continuing operations

(1,271)

(1,507)

Share option charges

25

45

Amortisation of intangibles arising on acquisition

299

299

Redundancy costs

74

125

Reapportion Group overheads

758

808

Adjusted loss before tax - continuing operations

(115)

(230)

 

 

 

7.   Taxation

 

The tax is based on the profit for the year and represents:

 

2020

2019

 

£'000

£'000

United Kingdom corporation tax at 19.0% (2019: 19.0%)

89

324

Overseas taxation

297

222

Adjustments in respect of prior year

(56)

1

Current taxation

330

547

Deferred taxation

(352)

(35)

Total taxation (credit)/expense

(22)

512

 

Continuing and discontinued operations:

 

2020

2019

 

£'000

£'000

Income tax (credit)/expense from continuing operations

(22)

504

Income tax expense from discontinued operations

-

8

Total taxation (credit)/expense

(22)

512

 

At 30 September 2020, the Group had an undiscounted deferred tax asset of £974,000 (2019: £405,000).  The asset comprises principally short term timing differences, future tax relief available on the exercise of outstanding employee share options in Oxford Metrics plc and unrelieved trading losses carried forward for which recoverability is reasonably certain.

Deferred tax assets and liabilities have been measured at an effective rate of 19% and 25% in the UK and USA, respectively (2019: 17% and 25%, respectively).

 

The tax assessed for the year is lower than the standard rate of corporation tax in the UK of 19.0% (2019: lower than the standard rate of 19%). The differences are explained as follows:

 

2020

2019

 

£'000

£'000

Profit on ordinary activities before tax

1,582

4,690

Expected tax income based on the standard rate of
corporation tax in the UK of
19.0% (2019: 19.0%)

300

891

Effect of:

 

 

Expenses not deductible for tax purposes

90

43

Recognition of previously unrecognised deferred tax asset

(37)

-

Unrelieved current year losses

90

126

Utilisation of losses brought forward

(14)

(4)

Adjustments to tax charge in respect of prior year current tax

(56)

1

Higher rates on overseas taxation

86

33

Research and development tax credit

(621)

(525)

Effect of tax rate change

140

(53)

Total tax (credit)/expense

(22)

512

8.   Earnings per share

 

2020

2019

 

Earnings

Weighted average number of shares

Per share amount

Earnings

Weighted average number of shares

Per share amount

 

£'000

'000

(pence)

£'000

'000

(pence)

Continuing operations

 

 

 

 

 

 

Basic earnings per share

 

 

 

 

 

 

Earnings attributable to ordinary shareholders

1,604

125,568

1.28

4,165

125,038

3.33

Dilutive effect of employee share options

-

2,083

(0.02)

-

3,250

(0.09)

Diluted earnings per share

1,604

127,651

1.26

4,165

128,288

3.24

Discontinued operations

 

 

 

 

 

 

Basic earnings per share

 

 

 

 

 

 

Loss attributable to ordinary shareholders

-

125,568

-

13

125,038

0.01

Dilutive effect of employee share options

-

2,083

-

-

3,250

-

Diluted earnings per share

-

127,651

-

13

128,288

0.01

Total operations

 

 

 

 

 

 

Basic earnings per share

 

 

 

 

 

 

Earnings attributable to ordinary shareholders

1,604

125,568

1.28

4,178

125,038

3.34

Dilutive effect of employee share options

-

2,083

(0.02)

-

3,250

(0.09)

Diluted earnings per share

1,604

127,651

1.26

4,178

128,288

3.25

 

Basic earnings per share is calculated by dividing the profit/(loss) attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the year.

 

Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares (share options).  For share options a calculation is done to determine the number of shares that could have been acquired at fair value (determined as the average annual market share price of the Company's shares) based on the monetary value of the subscriptions rights and outstanding share based payment charges attached to outstanding share options.  The number of shares calculated as above is compared with the number of shares that would have been issued assuming the exercise price of the share options.

 

For discontinued operations the outstanding share options are anti-dilutive and therefore there is no difference between the basic and diluted loss per share.

 

9.   Dividends

 

2020

2019

Equity - ordinary

£'000

£'000

Final 2018 paid in 2019 (1.50 pence per share)

-

1,875

Special paid in 2019 (1.00 pence per share)

-

1,250

Final 2019 paid in 2020 (1.80 pence per share)

2,253

-

 

2,253

3,125

 

The directors are proposing a final dividend in respect of the financial year ended 30 September 2020 of 1.80 pence per share (2019: 1.80 pence per share) which will absorb an estimated £2,263,000 of shareholders' funds.  This dividend will be paid on 5 March 2021 to shareholders who are on the register of members at close of business on 11 December 2020 subject to approval at the AGM. These dividends have not been accrued in these financial statements.

 

10.  Copies of announcement

 

Copies of this announcement 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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