Interim Results for the 6 months ended 31 March 20

RNS Number : 5439N

Oxford Metrics PLC

21 May 2020

 

21st May 2020

Oxford Metrics plc

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

Interim Results for the six months ended 31 March 2020

Oxford Metrics plc (LSE: OMG), the international software company servicing government, life sciences, entertainment and engineering markets, announces interim results for the six months ended 31 March 2020.

	H1 FY20	H1 FY19
Revenue	£15.0m	£16.1m
Annualised Recurring Revenue	£6.8m	£5.9m
Adjusted Profit before Tax*	£0.3m	£1.7m
Statutory Profit/(Loss) before Tax	(£0.1m)	£1.2m
Net Cash	£10.8m	£10.9m
Cash as at 20 May 2020	£14.2m	-

* Profit/(loss) Before Tax from continuing operations before Group recharges adjusted for share-based payments, amortisation of intangibles arising on acquisition, change in fair value of deferred consideration payable and unwinding of associated discount factor, Pimloc and exceptional costs

Commenting on the results Nick Bolton, Chief Executive said:

"The Group had a strong start to FY20 , recording our second highest ever first half revenue performance. COVID-19 forced lockdowns in March caused a delay in shipment of Vicon orders during the final two weeks of the period which meant we carried orders into the second half. Post period end, these have now been largely shipped to customers.

This first half performance owes much to the hard work of our people whom I would like to thank for adapting brilliantly to this new working environment and for their ongoing efforts to service our global customer base. 

The strategic progress we have been seeking to maintain around growing our recurring revenue base and developing our credentials in Yotta as a true SaaS business has continued.

Our business, like any other, is not immune to the effects of COVID-19 and we continue to monitor the evolving situation closely. The Group's fundamentals remain strong and our robust balance sheet will help Oxford Metrics to navigate the current challenges, whilst continuing to drive innovation."

Financial Highlights

●	Strong performance until last two weeks of March as a result of the government imposed restrictions and shutdowns in response to COVID-19
●	Headline Group revenue of £15.0m, down 6.5% (H1 FY19: £16.1m), as unable to fulfil £1.1m of Vicon orders during last two weeks of the first half due to global operational shutdowns. These orders have now been largely shipped to customers and will be recognised in the second half of the year . This delay in shipments had a £0.9m impact on profitability
●	The Group reported an adjusted profit before tax £0.3m (H1 FY19: £1.7m)
●	Adjusted earnings per share 0.17p (H1 FY19: 1.18p)
●	Cash generated from operations (before paying interest and tax) £1.0m (H1 FY19: £3.3m)
●	Strong balance sheet with no debt and cash of £10.8m as at 31 March 2020 (H1 FY19: £10.9m) after the payment of a final dividend. Cash position at 20th May £14.2m
●	Growth initiatives at Yotta yielding results: o  Improved visibility with Annualised Recurring Revenue ('ARR') up 14.6% year-on-year o  95.8% (FY19: 93.2%) retention of growing SaaS customer base

Operational Highlights

Strategy for Vicon: strengthen and protect profitable market leader

●	Notable wins with game companies Konami in Japan together with Tencent and miHoYo in China
●	Continued innovation to enhance Capture.U app for iPhone/iPad, allowing physiotherapists and sports scientists to analyse motion on the go and see human skeletal movement and inertial measurements overlaid onto live video in real-time
●	IMU Step, the SaaS solution for our Elite Sports offering, continues to gain traction with new wins in the NBA, NFL, MLB, NRL and AFL as well as with a number of collegiate athletic and health science programmes including University of Kentucky, University of Montana and Harvard Medical School

Strategy for Yotta: develop cloud-based software products and grow recurring revenue

●	Strong sales performance for our Connected Asset Management Software-as-a-Service (SaaS), Alloy
●	New wins across the UK, including: Warwickshire, South Gloucestershire, City of York, Somerset, Worcestershire and at waste services contractor, Ubico
●	Notable international activity in Australasia with Alloy roll-outs at Auckland System Management and a new win in Australia at City of Parramatta
●	New flagship partnerships secured: o  Panasonic to run Alloy on their in-cab devices in waste collection vehicles o  Telensa, the UK's largest provider of smart IoT streetlights, to provide a seamless lighting solution and control groups of streetlights o  bbits as part of their "Love Clean Streets" initiative

Outlook and Guidance

●	We are currently not experiencing any supply chain issues but will continue to take prudent actions as needed
●	The Group is mindful of the current unprecedented macro-economic environment therefore has elected for the time being to withdraw market guidance for the full year
●	Clear guidance will be reinstated at such time as when visibility improves
●	Our strong fundamentals provide confidence that the Group can navigate the current challenges

For further information please contact:

Oxford Metrics	[phone]
Nick Bolton, CEO
David Deacon, CFO
FTI Consulting	[phone]
Matt Dixon / Emma Hall / Jamille Smith / Greg Hynes
N+1 Singer (NOMAD and Broker)	[phone]
Shaun Dobson / George Tzimas (Corporate Finance) Tom Salvesen (Corporate Broking)

About Oxford Metrics

Oxford Metrics develops and markets analytics software for motion measurement and infrastructure asset management to customers in over 70 countries worldwide. Our list of clients across the globe is as diverse as the markets we operate in; we help highways authorities manage and maintain their road networks, hospitals and clinicians decide therapeutic strategies and Hollywood studios create stunning visual effects. And the diversity of applications is growing all the time.

The Group trades through two subsidiaries: Vicon and Yotta. Vicon is the world's leader in high precision motion measurement analysis to thousands of customers worldwide, including Guy's Hospital, EA Sports, MIT and NASA and our software is used in an ever expanding range of applications. Yotta provides cloud-based infrastructure asset management software to central and local government agencies and other infrastructure owners. Yotta has a large number of high profile clients including Highways England and Amey in the UK and VicRoads in Australia amongst others.

Founded in 1984 our Group is headquartered in Oxford with offices in Leamington Spa, Gloucester, Los Angeles, Denver, Singapore and Auckland. Since 2001, Oxford Metrics (LSE: OMG), has been a quoted company listed on AIM, a market operated by the London Stock Exchange.

For more information about Oxford Metrics, visit www.oxfordmetrics.com

 

Chief Executive's Statement

COVID-19 Response

The Group had a strong start to 2019/20, recording our second highest ever first half revenue performance. When COVID-19 struck, we rapidly introduced measures to protect and ensure the safety of our people. As a global business, we have the infrastructure in place for our teams to stay closely connected and operate seamlessly from wherever they are. Almost all staff have been working remotely since lockdown commenced and no one has been furloughed. The team has adapted brilliantly to this new working environment and I thank them for their flexibility and dedication.

March is always a particularly busy month and for the last two weeks of the month we were unable to complete the shipment of customer systems within our Vicon business, because of the lockdowns in place in the UK and US. This led to us carrying over £1.1m orders into the second half, which have now been largely shipped to customers and will be recognised in the second half.

Following a closure of four weeks, a small number of Vicon production staff have now returned to company offices to ensure systems can be manufactured and delivered to customers. This required adapting working practices to protect employees, including moving to a two-shift work pattern, introducing a one-way system around the building and increasing the spacing between workstations. This team deserves a special thanks as their commitment and ingenuity has enabled us to continue to make and ship systems to our customers around the world.

Across the business, our teams have been working hard to ensure customers have what they need to continue to access our solutions and services. This has included, where our customers are running essential public or health services, extending additional software licenses free of charge to support their expanded work teams.

Looking to the future, although none of us can be certain of the challenges the aftermath of this pandemic will bring, the business stands resilient and ready. We have an improved level of revenue visibility and a strong balance sheet with £14.2m in cash as at 20 May 2020 and the Group remains debt-free. We are diversified across multiple vertical markets with long-term positive growth drivers, and hold powerful competitive positions with multiple defensible barriers to entry. We offer products and services which are clearly differentiated from our competitors and most often distinguished by the strength of our technology. We operate in over 70 countries worldwide and have no significant exposure to those sectors most affected by lockdowns, such as the travel and hospitality industries.

The commitment of the whole team places the Group in a strong position to navigate the challenges likely to arise from the impact of COVID-19.

Trading Performance

KPI	Revenue		PBT		Adjusted PBT*
	H1 FY20	H1 FY19	H1 FY20	H1 FY19	H1 FY20	H1 FY19
Group	£15.0m	£16.1m	(£0.1m)	£1.2m	£0.3m	£1.7m

The Group reports a strong revenue performance, recording our second highest ever first half revenues. However, COVID-19 government imposed restrictions and lockdowns in March caused a delay in customer shipments at Vicon during the final two weeks of the first half, which led to carrying forward £1.1m of orders (H1 FY19: nil) into the second half of the year. These orders largely account for the decline compared to last year. Consequently, the Group reports total revenues of £15.0m (H1 FY19: £16.1m), down 6.5% on last year's record at a headline level and 7.0% on a constant currency basis.

The enforced delay to revenue recognition largely accounts for the decline in reported Adjusted PBT* to £0.3m (H1 FY19: £1.7m).

In line with our strategic plan to increase the visibility of revenues and profits, the Group increased Annual Recurring Revenues ('ARR') by 14.6% year-on-year to £6.8m (H1 FY19: £5.9m).

The cash position, having paid a final dividend of £2.3m in the first half, finished at £10.8m as at 31 March 2020 (H1 FY19: £10.9m). Cash generated from operations during the first half was £1.0m (H1 FY19: £3.3m); the decline accounted for by the aforementioned trading performance.

Asset Management Division - Yotta

KPI	Revenue		PBT		Adjusted PBT*
	H1 FY20	H1 FY19	H1 FY20	H1 FY19	H1 FY20	H1 FY19
Yotta	£3.7m	£3.5m	(£1.2m)	(£1.0m)	(£0.5m)	(£0.2m)

Yotta reported software revenues up 4.6% to £3.7m (H1 FY19: £3.5m). Annualised Recurring Revenues ('ARR') as at 31 March 2020 grew 14.6% year-on-year to £6.8m (H1 FY19: £5.9m). The retention rate also improved to 95.8% (H1 FY19: 93.2%). We can also report that additions in the first half of £0.8m are contracted over the next three to four years with a Total Contract Value over this period of £2.8m.The first half delivered a strong sales performance for our Connected Asset Management Software-as-a-Service (SaaS), Alloy. There were new wins across UK local government, including at Warwickshire, South Gloucestershire, Blackburn with Darwen, City of York, Somerset, Worcestershire and at waste services contractor, Ubico. There was also good customer activity in Australasia with roll-outs at Auckland System Management and a new win in Australia at City of Parramatta.

Yotta also announced new partnerships during the first half with three key providers in the marketplace: with Panasonic to run Alloy on their in-cab devices in waste collection vehicles; with bbits for their 'Love Clean Streets' product to provide an integrated platform for feedback between the council and citizen; and with Telensa, the UK's largest provider of smart IoT streetlights, Alloy enables a completely seamless lighting solution to control groups of streetlights and other wirelessly connected sensors. It was also a strong period for Yotta's professional services group with a five-year agreement with South Tyneside for Horizons and asset management consultancy, eight Alloy "go-lives" during the period and 12 migrations underway from Mayrise to Alloy.

Yotta's product line-up was also enhanced in the first half to ensure the product keeps pace with market demand and opportunity. For example, Street Manager functionality was delivered on time to enable 80+ customers to work with the Department for Transports new Street Manager initiative, and Custom Reports and a Task Assignment Tool were also added to Alloy.

The transition to a 100% SaaS Business model is complete so Yotta reported no perpetual licenses in the first half (H1 FY19: £0.2m). This factor together with increased R&D Amortisation led to an increase in Adjusted PBT loss of £0.5m (H1 FY19 £0.2m). The Group has worked hard to pivot and transition Yotta's business model, which is now providing the Group with higher than ever levels recurring revenue and enhanced visibility. Notwithstanding challenges that may arise from COVID-19, Yotta is well placed to deliver a profitable second half.

Motion measurement division - Vicon

KPI	Revenue		PBT		Adjusted PBT*
	H1 FY20	H1 FY19	H1 FY20	H1 FY19	H1 FY20	H1 FY19
Vicon	£11.3m	£12.5m	£0.9m	£2.2m	£2.0m	£3.3m

Vicon reported revenues of £11.3m (H1 FY19: £12.5m), representing a year-on-year reduction of 9.6% at a headline level (10.3% on a constant currency basis). Vicon carried over £1.1m of orders which could not be shipped during the last two weeks of the half due to enforced restrictions in response to COVID-19.

Vicon also reported a slight decline in gross margin at 73.8% (H1 FY19: 75.4%) in the first half which was revenue mix related. This together with an increase in investment of £0.2m in Elite Sports and an additional £0.1m of R&D Amortisation led to a Vicon reported Adjusted PBT* of £2.0m (H1 FY19: £3.3m) and an unadjusted profit before tax of £0.9m (H1 FY19: £2.2m).

The implementation of our "amplify the core" strategy at Vicon aims to strengthen and protect a profitable market leader, driving the business through two key growth vectors, Established Markets and Adjacent Verticals - both saw notable highlights during the first half.

Established Markets - strength in leadership

During the first half we enhanced our product lines in most of our vertical markets, including adding a Machine Learning-based finger-tracking solution in Shogun 1.3 for the entertainment market and hard synchronisation with our Blue Trident Inertial Measurement Units ('IMU') in Nexus 2.10 targeted at our Life Sciences customers. This helped drive strong sales of our Blue Trident devices, especially in North America.

We also updated the ground-breaking Capture.U app for iPhone/iPad which uses Vicon inertial sensors. By leveraging Apple's Augmented Reality Kit 3 in iOS 13, researchers can now see human skeletal movement and inertial measurements overlaid on live video in real-time. This enables a low-cost entry point for physiotherapists and sports scientists to use Vicon technology to analyse motion in a highly portable, intuitive manner.

These new innovations combined with Vicon's existing clear market differentiators helped underpin the first half performance which included notable wins in the Asia Pacific region with game companies Konami in Japan and Tencent and miHoYo in China.

Adjacent Markets - developing new growth vectors

In addition to growing our Established Market business, we also seek further growth by applying our motion measurement technology to more nascent markets but with the opportunity for higher levels of growth. We are currently focussed on two specific opportunities: Location-based Virtual Reality ('LBVR') and Elite Sports.

LBVR revenues of £0.7m (H1 FY19: £0.4m) improved compared to the first half last year. As expected, compared to the second half of last year traction was slower as our partner organisations began to roll out their VR experiences worldwide and fine-tune their business models. We remain excited about the opportunity for growth in this segment but we do recognise it is likely that revenues will be adversely affected for a time following the COVID-19 pandemic with ongoing social distancing measures in place.

Our Elite sports offering, IMU Step made further progress in the first half. We added comprehensive Impact Load assessment, enabling coaches to examine the loading outcomes of specific activities, drills and training days, and their respective effects on an athlete's workload.

IMU Step continues to gain recognition and respect within the marketplace and as a result of increased investment in our sales channel of £0.2m compared to the same period last year, we won new teams in the NBA, NFL, MLB, NRL and AFL as well as with a number of collegiate athletic and health science programmes including at University of Kentucky, University of Montana and Harvard Medical School.

Outlook

As we enter our traditionally stronger second half, we are mindful of the current unprecedented macro-economic environment and how this might affect our business. Our primary focus is on ensuring the well-being and safety of our employees and ensuring we can provide an uninterrupted service to all our customers.

At Vicon, the revenue risk relates to whether customers delay or otherwise defer system acquisitions or upgrades, especially in Vicon's European and North American markets. On a positive note, in Vicon's Asia-Pacific region, business activity appears to have restarted so timing here is currently more predictable.

At Yotta the business is relatively well placed as revenues are largely pre-contracted with government customers delivering fully hosted, cloud software, so forecast variability relates only to whether the business can sign new software contracts.

From a cost perspective, across the Group we will continue to take prudent actions as needed and it is worth noting we are not currently experiencing any supply chain issues.

As a consequence, the Group has elected for the time being to withdraw market guidance for the full year. It is the Group's intention that, at such time as visibility improves, clear guidance can be reinstated.

That said, COVID-19 does not change the robust fundamentals of the Group which remains a resilient business with exciting growth prospects. We have a strong balance sheet with £14.2m in net cash and remain debt-free. Our clear strategic "amplify the core" plan, reduces risk by staying close to the customers and technologies we know best and markets where we lead. In addition, in line with our strategy we will continue to seek earnings-accretive acquisitionsto extend product range, grow market share and/or increase differentiation to augment this growth.

We have clearly differentiated products from our competitors and we address diversified markets across over 70 countries worldwide, thus limiting our exposure to any one market or geography. We have growing contracted recurring revenues, approaching a fifth of Group revenues. Given these strong fundamentals, the Board is confident the Group can navigate the current challenges and will indeed thrive in the future.

* Profit/(loss) Before Tax from continuing operations before Group recharges adjusted for share-based payments, amortisation of intangibles arising on acquisition, change in fair value of deferred consideration payable and unwinding of associated discount factor, Pimloc and exceptional costs.

 

CONDENSED CONSOLIDATED INCOME STATEMENT

			Six months ended 31 March 2020	Six months ended  31 March 2019*	Year ended  30 September 2019*
			(unaudited)	(unaudited)	(audited)
		Note	£'000	£'000	£'000
	Revenue	2	15,016	16,055	35,350
	Cost of sales		(4,491)	(4,394)	(10,166)
	Gross profit		10,525	11,661	25,184
	Sales, support and marketing costs		(4,186)	(4,262)	(8,663)
	Research and development		(2,196)	(2,112)	(4,184)
	Administrative expenses		(4,258)	(4,161)	(7,875)
	Other operating income		58	104	202
	Operating (loss)/profit		(57)	1,230	4,664
	Finance income		13	12	66
	Finance expense		(49)	(43)	(2)
Share of post-tax loss of equity accounted associate			(18)	(33)	(59)
	(Loss)/profit before taxation		(111)	1,166	4,669
	Taxation		(94)	(257)	(504)
	(Loss)/profit from continuing operations		(205)	909	4,165
	(Loss)/profit from discontinued operations, net of tax		-	(4)	13
	(Loss)/profit for the period attributable to owners of the parent during the period		(205)	905	4,178
	Earnings per share for profit on continuing operations attributable to owners of the parent during the year
	Basic (loss)/earnings per share (pence)	6	(0.17p)	0.73p	3.33p
	Diluted (loss)/earnings per share (pence)	6	(0.17p)	0.71p	3.24p
	Earnings per share for profit on total operations attributable to owners of the parent during the year
	Basic (loss)/earnings per share (pence)	6	(0.17p)	0.73p	3.34p
	Diluted (loss)/earnings per share (pence)	6	(0.17p)	0.71p	3.25p

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

		Six months ended 31 March 2020	Six months ended  31 March 2019*	Year ended  30 September 2019*
		(unaudited)	(unaudited)	(audited)
		£'000	£'000	£'000
Net (loss)/profit for the period		(205)	905	4,178
Other comprehensive income
Items that will or may be reclassified to profit or loss
Exchange differences on retranslation of overseas subsidiaries		171	-	271
Total other comprehensive income		171	-	271
Total comprehensive income for the period attributable to the owners of the parent		(34)	905	4,449

*The Group has applied IFRS 16 using the modified retrospective approach.  Under this method the comparative information is not restated.  See note 9.

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

		31 March 2020	31 March 2019*	30 September 2019*
		(unaudited)	(unaudited)	(audited)
	Note	£'000	£'000	£'000
Non-current assets
Goodwill and intangible assets		12,420	12,389	12,449
Property, plant and equipment		2,218	2,428	2,280
Right of use assets	9	2,013	-	-
Financial asset - investments		317	125	98
Deferred tax asset		664	426	405
		17,632	15,368	15,232
Current assets
Inventories		3,684	3,080	3,236
Trade and other receivables		11,412	9,488	11,687
Current tax debtor		300	72	177
Cash and cash equivalents		10,848	10,949	13,837
		26,244	23,589	28,937
Current liabilities
Trade and other payables		(9,905)	(9,420)	(10,733)
Lease liabilities	9	(469)	-	-
		(10,374)	(9,420)	(10,733)
Net current assets		15,870	14,169	18,204
Total assets less current liabilities		33,502	29,537	33,436
Non-current liabilities
Other liabilities		(369)	(317)	(462)
Lease liabilities	9	(1,794)	-	-
Provisions		(20)	(12)	(16)
Deferred tax liability		(2,001)	(1,802)	(1,797)
		(4,184)	(2,131)	(2,275)
Net assets		29,318	27,406	31,161
Capital and reserves attributable to the owners of the parent
Share capital	7	314	313	313
Shares to be issued		65	65	65
Share premium account		17,707	17,391	17,417
Retained earnings		10,546	9,393	12,851
Foreign currency translation reserve		686	244	515
Total equity shareholders' funds		29,318	27,406	31,161

*The Group has applied IFRS 16 using the modified retrospective approach.  Under this method the comparative information is not restated.  See note 9.    

CONDENSED CONSOLIDATED STATEMENT OF CASHFLOWS

		Six months ended 31 March 2020	Six months ended 31 March 2019*	Year ended 30 September 2019*
		(unaudited)	(unaudited)	(audited)
		£'000	£'000	£'000
Cash flows from operating activities
Operating (loss)/profit from continuing operations		(57)	1,230	4,664
Operating (loss)/profit from discontinued operations		-	(3)	21
Group operating (loss)/profit		(57)	1,227	4,685
Depreciation and amortisation		1,787	1,353	2,761
Share based payments		71	122	264
Exchange adjustments		174	5	134
(Increase)/decrease in inventories		(448)	(677)	(823)
Decrease/(increase) in receivables		261	1,089	(949)
(Decrease)/increase in payables		(802)	132	1,600
Cash generated from operating activities		986	3,251	7,672
Tax paid		(190)	(59)	(369)
Net cash from operating activities		796	3,192	7,303
Cash flows from investing activities
Purchase of property, plant and equipment		(251)	(293)	(467)
Purchase of intangible assets		(1,183)	(1,068)	(2,196)
Purchase of investment		(236)	-	-
Proceeds on disposal of property, plant and equipment		11	54	79
Acquisition of subsidiary undertaking net of cash acquired		(128)	(74)	(141)
Interest arising on contingent consideration		-	(43)	43
Interest received		13	12	23
Interest Paid		(49)	-	(2)
Net cash used in investing activities		(1,823)	(1,412)	(2,661)
Cash flows from financing activities
Issue of ordinary shares		291	65	91
Equity dividends paid		(2,253)	(3,125)	(3,125)
Net cash used in financing activities		(1,962)	(3,060)	(3,034)
Net (decrease)/increase in cash and cash equivalents		(2,989)	(1,280)	1,608
Cash and cash equivalents at beginning of the period		13,837	12,229	12,229
Cash and cash equivalents at end of the period		10,848	10,949	13,837

*The Group has applied IFRS 16 using the modified retrospective approach.  Under this method the comparative information is not restated.  See note 9.

CONDENSED CONSOLIDATED STATEMENT OF CHANGES TO EQUITY

	Share Capital	Shares to be issued	Share premium account	Retained earnings	Foreign currency translation reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Balance as at 30 September 2019*	313	65	17,417	12,851	515	31,161
Net profit for the period	-	-	-	(205)	-	(205)
Exchange difference on retranslation of overseas subsidiaries	-	-	-	-	171	171
Tax recognised directly in equity	-	-	-	82	-	82
Transactions with owners:
Dividends	-	-	-	(2,253)	-	(2,253)
Issue of share capital	1	-	290	-	-	291
Movement in relation to share based payments	-	-	-	71	-	71
Balance as at 31 March 2020	314	65	17,707	10,546	686	29,318
Balance as at 30 September 2018 as previously stated	312	65	17,327	12,022	244	29,970
Impact of change in accounting policy - IFRS 15 Revenue from contracts with customers	-	-	-	(664)	-	(664)
Balance at 1 October 2018 as restated*	312	65	17,327	11,358	244	29,306
Net profit for the period	-	-	-	905	-	905
Exchange differences on retranslation of overseas subsidiaries	-	-	-	-	-	-
Tax recognised directly in equity	-	-	-	133	-	133
Transactions with owners:
Dividends	-	-	-	(3,125)	-	(3,125)
Issue of share capital	1	-	64	-	-	65
Movement in relation to share options	-	-	-	122	-	122
Balance as at 31 March 2019	313	65	17,391	9,393	244	27,406
Balance as at 30 September 2018 as previously stated	312	65	17,327	12,022	244	29,970
Impact of change in accounting policy - IFRS 15 Revenue from contracts with customers	-	-	-	(664)	-	(664)
Balance at 1 October 2018 as restated*	312	65	17,327	11,358	244	29,306
Net profit for the period	-	-	-	4,178	-	4,178
Exchange differences on retranslation of overseas subsidiaries	-	-	-	-	271	271
Tax recognised directly in equity	-	-	-	176	-	176
Transactions with owners:
Dividends	-	-	-	(3,125)	-	(3,125)
Issue of share capital	1	-	90	-	-	91
Movement in relation to share options	-	-	-	264	-	264
Balance as at 30 September 2019	313	65	17,417	12,851	515	31,161

*The Group has applied IFRS 16 using the modified retrospective approach.  Under this method the comparative information is not restated.  See note 9.

The accompanying notes are an integral part of this interim financial information.

 

NOTES TO THE CONDENSED CONSOLIDATED INTERIM STATEMENTS

1.  Basis of preparation

Oxford Metrics Plc, (the "Company") is a company domiciled in England. The condensed consolidated interim financial statements of the Company for the six months ended 31 March 2020 comprise the Company and its subsidiaries (together referred to as the "Group").

During the period the Group adopted IFRS 16 'Leases' and the impact of adopting IFRS 16 is shown in note 9.  Otherwise, the condensed consolidated interim financial statements have been prepared using accounting policies consistent with those of the annual financial statements for the year ended 30 September 2019.  They are in accordance with IAS 34.  Other new and amended standards and interpretations issued by the IASB that will apply for the first time in the next annual financial statements are not expected to impact the Group as they are either not relevant to the Group's activities or require accounting which is consistent with the Group's current accounting policies.

The interim financial statements have not been audited or reviewed and the financial information contained in this report does not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006. The comparative figures for the year ended 30 September 2019 are not the statutory accounts but have been extracted from the Group's 2019 financial statements which have been delivered to the Registrar of Companies. The auditors' report on those financial statements was unqualified did not contain references to any matters to which the auditors drew attention without qualifying the report and did not contain a statement under Section 498(2) or (3) of the Companies Act 2006. 

2.  Revenue from contracts with customers
	Six months ended 31 March  2020	Six months ended 31 March  2019	Year  ended 30 September 2019
	(unaudited)	(unaudited)	(audited)
	£'000	£'000	£'000
Vicon UK	7,068	7,063	14,638
Vicon USA	4,260	5,466	13,692
Vicon Group	11,328	12,529	28,330
Yotta	3,688	3,526	7,020
Oxford Metrics Group	15,016	16,055	35,350

Vicon revenue by market
Engineering	1,948	3,287	6,015
Entertainment	3,170	3,072	6,802
Life sciences	5,454	5,731	13,637
Established markets	10,572	12,090	26,454
Adjacent verticals	756	439	1,876
Vicon Group	11,328	12,529	28,330

Group revenue by type
Sale of hardware	8,917	10,449	23,710
Sale of software	2,293	3,506	7,023
Rendering of services	3,806	2,100	4,618
Oxford Metrics Group	15,016	16,055	35,350

Yotta revenue by type
Software and related services	3,688	3,526	7,020
Yotta Group	3,688	3,526	7,020

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

	Revenue
	Six months ended 31 March  2020	Six months ended 31 March  2019	Year  ended 30 September 2019
	(unaudited)	(unaudited)	(audited)
	£'000	£'000	£'000
By destination
UK	4,861	3,994	8,239
Germany	295	376	993
Italy	134	-	327
Netherlands	214	540	727
France	57	160	535
Switzerland	77	121	285
Rest of Europe	1,019	616	862
Canada	335	424	905
USA	3,652	4,911	12,745
Rest of North America	107	123	110
Australia	438	288	545
Hong Kong	1,462	1,526	2,788
Japan	1,904	1,739	3,570
Korea	152	937	1,464
Rest of Asia Pacific	126	212	565
Other	183	88	690
Oxford Metrics Group	15,016	16,055	35,350

By origin
UK	10,653	10,406	21,268
North America	4,259	5,466	13,692
Asia Pacific	104	183	390
Oxford Metrics Group	15,016	16,055	35,350

Timing of the transfer of goods	Six months ended 31 March 2020 (unaudited)
and services	Vicon UK	Vicon USA	Yotta	Total
	£'000	£'000	£'000	£'000
Point in time	6,404	3,201	859	10,464
Over time	664	1,059	2,829	4,552
Oxford Metrics Group	7,068	4,260	3,688	15,016
Contract Counterparties
Direct to consumers	1,637	3,870	3,616	9,123
Third party distributor	5,431	390	72	5,893
Oxford Metrics Group	7,068	4,260	3,688	15,016
By destination
UK	1,314	-	3,547	4,861
Germany	295	-	-	295
Italy	134	-	-	134
Netherlands	192	-	22	214
France	57	-	-	57
Switzerland	77	-	-	77
Rest of Europe	1,017	-	2	1,019
Canada	-	335	-	335
USA	-	3,652	-	3,652
Rest of North America	3	104	-	107
Australia	335	-	103	438
Hong Kong	1,462	-	-	1,462
Japan	1,904	-	-	1,904
Korea	152	-	-	152
Rest of Asia Pacific	126	-	-	126
Other	-	169	14	183
Oxford Metrics Group	7,068	4,260	3,688	15,016

Timing of the transfer of goods	Year ended 30 September 2019 (audited)
and services	Vicon UK	Vicon USA	Yotta	Total
	£'000	£'000	£'000	£'000
Point in time	13,507	11,802	1,741	27,050
Over time	1,131	1,890	5,279	8,300
Oxford Metrics Group	14,638	13,692	7,020	35,350
Contract Counterparties
Direct to consumers	4,170	12,638	6,811	23,619
Third party distributor	10,468	1,054	209	11,731
Oxford Metrics Group	14,638	13,692	7,020	35,350
By destination
UK	1,662	-	6,577	8,239
Germany	969	-	24	993
Italy	327	-	-	327
Netherlands	585	-	142	727
France	535	-	-	535
Switzerland	285	-	-	285
Rest of Europe	858	-	4	862
Canada	-	905	-	905
USA	646	12,099	-	12,745
Rest of North America	-	110	-	110
Australia	327	-	218	545
Hong Kong	2,788	-	-	2,788
Japan	3,570	-	-	3,570
South Korea	1,464	-	-	1,464
Rest of Asia Pacific	565	-	-	565
Other	57	578	55	690
Oxford Metrics Group	14,638	13,692	7,020	35,350

3.  Segmental Analysis

Segment information is presented in the condensed consolidated interim financial statements in respect of the Group's business segments, which are reported to the Chief Operating Decision Maker (CODM). The Group has identified the Board of Directors of Oxford Metrics plc, ("the Board") as the CODM. The business segment reporting reflects the Group's management and internal reporting structure.

The Group comprises the following business segments:

Vicon Group:  This is the development, production and sale of computer software and equipment for the entertainment, engineering and life science markets; and

Yotta Group:  This is the provision of software and services for the management of infrastructure assets for Government Agencies, Local Government and major infrastructure contractors.

Other unallocated costs represent head office expenses not recharged to subsidiary companies.

Business segments are analysed below:

	Segment depreciation and amortisation
	Six months ended 31 March  2020	Six months ended 31 March  2019	Year  ended 30 September 2019
	(unaudited)	(unaudited)	(audited)
	£'000	£'000	£'000
Vicon UK	1,042	923	1,898
Vicon USA	31	32	64
Vicon Group	1,073	955	1,962
Yotta	423	393	788
Unallocated	9	5	13
Oxford Metrics Group	1,505	1,353	2,763

	Six months ended 31 March 2020 (unaudited)				Six months ended 31 March 2019 (unaudited)				Year ended 30 September 2019 (audited)
	Adjusted profit/(loss) before tax	Adjusting items	Group recharges	Profit/(loss) before tax	Adjusted profit/(loss) before tax	Adjusting items	Group recharges	Profit/(loss) before tax	Adjusted profit/(loss) before tax	Adjusting items	Group recharges	Profit/(loss) before tax
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Vicon UK	689	(136)	188	741	1,208	(174)	699	1,733	2,354	(125)	3,248	5,477
Vicon USA	1,261	-	(1,080)	181	2,098	-	(1,666)	432	5,760	-	(4,976)	784
Vicon Group	1,950	(136)	(892)	922	3,306	(174)	(967)	2,165	8,114	(125)	(1,728)	6,261
Yotta	(464)	(229)	(479)	(1,172)	(191)	(284)	(495)	(970)	(230)	(469)	(808)	(1,507)
Unallocated	(1,171)	(61)	1,371	139	(1,386)	(105)	1,462	(29)	(2,421)	(200)	2,536	(85)
Continuing operations	315	(426)	-	(111)	1,729	(563)	-	1,166	5,463	(794)	-	4,669
OMG Life Group	-	-	-	-	(3)	-	-	(3)	21	-	-	21
Discontinued operations	-	-	-	-	(3)	-	-	(3)	21	-	-	21
Oxford Metrics Group	315	(426)	-	(111)	1,726	(563)	-	1,163	5,484	(794)	-	4,690

	Non-current assets			Additions to non-current assets			Carrying amount of segment assets			Carrying amount of segment liabilities
	Six months ended 31 March 2020 (unaudited)	Six months  ended 31 March 2019 (unaudited)	Year ended 30 September 2019  (audited)	Six months ended 31 March 2020 (unaudited)	Six months  ended 31 March 2019 (unaudited)	Year ended 30 September 2019  (audited)	Six months ended 31 March 2020 (unaudited)	Six months  ended 31 March 2019 (unaudited)	Year ended 30 September 2019  (audited)	Six months ended 31 March 2020 (unaudited)	Six months  ended 31 March 2019 (unaudited)	Year ended 30 September 2019  (audited)
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Vicon UK	9,764	8,838	8,642	996	759	1,667	25,290	20,924	22,687	(6,057)	(5,312)	(5,781)
Vicon USA	1,420	858	838	23	31	55	6,351	6,196	8,824	(3,083)	(2,125)	(2,973)
Vicon Group	11,184	9,696	9,480	1,019	790	1,722	31,641	27,120	31,511	(9,140)	(7,437)	(8,754)
Yotta	5,798	5,301	5,366	410	462	912	14,569	15,978	13,069	(5,072)	(3,644)	(3,852)
Yotta Group	5,798	5,301	5,366	410	462	912	14,569	15,978	13,069	(5,072)	(3,644)	(3,852)
Unallocated	610	364	386	241	-	29	3,678	1,905	5,641	(346)	(470)	(402)
OMG Life Group*	-	7	-	-	-	-	(6,052)	(6,046)	(6,052)	-	-	-
Oxford Metrics Group	17,592	15,368	15,232	1,670	1,252	2,663	43,836	38,957	44,169	(14,558)	(11,551)	(13,008)

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

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

	Six months ended 31 March  2020	Six months ended 31 March  2019	Year  ended 30 September 2019
	(unaudited)	(unaudited)	(audited)
	£'000	£'000	£'000
Profit before tax - continuing operations	(111)	1,166	4,669
Share based payments - equity settled	71	122	264
Amortisation of intangibles arising on acquisition	270	270	541
Redundancy costs	67	117	125
Adjustment to fair value of deferred consideration payable and unwinding of associated discount factor	-	21	(195)
Share of post-tax loss of equity accounted associate	18	33	59
Adjusted profit before tax - continuing operations	315	1,729	5,463
Loss before tax - discontinued operations	-	(3)	21
Adjusted loss before tax - discontinued operations	-	(3)	21
Total adjusted profit before tax - all operations	315	1,726	5,484

Adjusted earnings per share for profit on continuing operations attributable to owners of the parent during the year
Basic earnings per share (pence)		0.17p	1.18p	3.96p
Diluted earnings per share (pence)		0.17p	1.15p	3.86p
Adjusted earnings per share for profit on total operations attributable to owners of the parent during the year
Basic earnings per share (pence)		0.17p	1.17p	3.97p
Diluted earnings per share (pence)		0.17p	1.14p	3.87p

The adjusted profit before tax for the Vicon and Yotta business segments which are included within the Group's continuing operations is shown in detail below;

		Vicon Group
	Six months ended 31 March  2020	Six months ended 31 March  2019	Year  ended 30 September 2019
	(unaudited)	(unaudited)	(audited)
	£'000	£'000	£'000
Profit before tax	922	2,165	6,261
Share based payments - equity settled	15	32	78
Amortisation of intangibles arising on acquisition	121	121	242
Adjustment to fair value of deferred consideration payable and unwinding of discount factor	-	21	(195)
Reapportion Group overheads	892	967	1,728
Adjusted profit before tax	1,950	3,306	8,114

		Yotta Group
	Six months ended 31 March  2020	Six months ended 31 March  2019	Year  ended 30 September 2019
	(unaudited)	(unaudited)	(audited)
	£'000	£'000	£'000
Loss before tax	(1,172)	(970)	(1,507)
Share based payments - equity settled	13	18	45
Amortisation of intangibles arising on acquisition	149	149	299
Redundancy costs	67	117	125
Reapportion Group overheads	479	495	808
Adjusted loss before tax	(464)	(191)	(230)

5.  Taxation

The Group's consolidated effective tax rate for the six months ended 31 March 2020 was 84% (for the six months ended 31 March 2019: 5%; for the year ended 30 September 2019: 11%).

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

6.  Earnings per share

The calculation of the basic earnings per share is based on the earnings attributable to ordinary shareholders divided by the weighted average number of shares in issue during the period.  The calculation of diluted earnings per share is based on the basic earnings per share, adjusted to allow for the issue of shares on the assumed conversion of all dilutive options.

	31 March 2020 (unaudited)			31 March 2019 (unaudited)			30 September 2019 (audited)
	(Loss)/earnings	Weighted average number of shares	Per share amount	Earnings/(loss)	Weighted average number of shares	Per share amount	Earnings	Weighted average number of shares	Per share amount
	£'000	'000	(pence)	£'000	'000	(pence)	£'000	'000	(pence)
Continuing operations
Basic (loss)/earnings per share
Earnings attributable to ordinary shareholders	(205)	125,434	(0.17)	909	124,970	0.73	4,165	125,038	3.33
Dilutive effect of employee share options	-	2,581	-	-	4,092	(0.02)	-	3,250	(0.09)
Diluted (loss)/earnings per share	(205)	128,015	(0.17)	909	129,062	0.71	4,165	128,288	3.24
Discontinued operations
Basic earnings/(loss) per share
Earnings attributable to ordinary shareholders	-	125,434	-	(4)	124,970	-	13	125,038	0.01
Dilutive effect of employee share options	-	2,581	-	-	4,092	-	-	3,250	-
Diluted earnings/(loss) per share	-	128,015	-	(4)	129,062	-	13	128,288	0.01
Total operations
Basic (loss)/earnings per share
Loss attributable to ordinary shareholders	(205)	125,434	(0.17)	905	124,970	0.72	4,178	125,038	3.34
Dilutive effect of employee share options	-	2,581	-	-	4,092	(0.02)	-	3,250	(0.09)
Diluted (loss)/earnings per share	(205)	128,015	(0.17)	905	129,062	0.70	4,178	128,288	3.25

7.  Share capital

	31 March	31 March	30 September
	2020	2019	2019
	(unaudited)	(unaudited)	(audited)
	£'000	£'000	£'000
Allotted, called up and fully paid
125,639,658 shares of 0.25p (31 March 2019: 125,063,130 shares of 0.25p and 30 September 2019: 125,138,130 shares of 0.25p)	314	313	313

During the six month period ended 31 March 2020 there were 473,279 shares issued relating to share options that were exercised.  In addition, 28,249 shares were issued to the non-executive Chairman, Roger Parry, in satisfaction of salary.

There were 122,194 shares issued in respect of share options exercised during the six months ended 31 March 2019 (year ended 30 September 2019: 197,194).

8.  Dividends

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

	31 March	31 March	30 September
	2020	2019	2019
	(unaudited)	(unaudited)	(audited)
	£'000	£'000	£'000
Final dividend for 2018 paid in 2019 - 1.50 pence per share	-	1,875	1,875
Special dividend paid in 2019 - 1.00 pence per share	-	1,250	1,250
Final dividend for 2019 paid in 2020 - 1.80 pence per share	2,253	-	-
	2,253	3,125	3,125

The final dividend for 2019 was paid to shareholders on 28 February 2020 at 1.80 pence per share, a total of £2,253,000. 

9.  Changes in accounting policies

The Group has adopted IFRS 16 with the date of initial application being 1 October 2019.

Effective 1 January 2019, IFRS 16 has replaced IAS 17 'Leases' and IFRIC 4 'Determining whether an Arrangement Contains a Lease'.

The Group adopted IFRS 16 using the modified retrospective approach without restatement of comparative figures. The Group elected to apply the practical expedient to not reassess whether a contract contains a lease at the date of initial application. Contracts entered into before the transition date that were not identified as leases under IAS 17 and IFRIC 4 were not reassessed. The definition of a lease under IFRS 16 was applied only to contracts entered into on or after 1 October 2019.

IFRS 16 provides for certain optional practical expedients, including those related to the initial adoption of the standard. The Group applied the exemption not to recognise right-of-use assets and liabilities for leases with less than 12 months of lease term remaining as of the date of initial application, when applying IFRS 16 to leases previously classified as operating leases under IAS 17.

As a lessee, the Group previously classified leases as operating or finance leases based on its assessment of whether the lease transferred substantially all of the risks and rewards of ownership. Under IFRS 16, the Group recognises right-of-use assets and lease liabilities for most leases. However, the Group has elected not to recognise right-of-use assets and lease liabilities for some leases of low value assets based on the value of the underlying asset when new or for short-term leases with a lease term of 12 months or less.

On adoption of IFRS 16, the Group recognised right-of-use assets and lease liabilities in relation to leases of business premises and vehicles, which had previously been classified as operating leases. 

The lease liabilities were measured at the present value of the remaining lease payments, discounted using the relevant incremental borrowing rate as at 1 October 2019. The Group's incremental borrowing rate is the rate at which a similar borrowing could be obtained from an independent creditor under comparable terms and conditions. The weighted-average rate applied was 4.06%.

The right-of-use assets were measured at an amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments.

Included in profit or loss for the period are £282,000 of amortisation of right-of-use assets and £48,000 of finance expenses on lease liabilities.

The following table reconciles the minimum lease commitments disclosed in the Group's Annual Financial Statements at 30 September 2019 to the amount of lease liabilities recognised on transition at 1 October 2019:

	£'000
Minimum operating lease commitment at 30 September 2019	2,444
Less short-term leases not recognised under IFRS 16	(16)
Undiscounted lease payments	2,428
Effect of discounting using the incremental borrowing rate at the date of initial application	(278)
Lease liabilities recognised at 1 October 2019	2,150

10.  Copies of the interim statement

Copies of the interim statement will be available from the Company's registered office at 6 Oxford Industrial Park, Yarnton, Oxfordshire OX5 1QU, and from the Company's website: www.oxfordmetrics.com .

 

END

 

 

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