Interim Results

RNS Number : 8472F

OMG PLC

30 May 2013

 



30 May 2013

OMG plc

("OMG" or the "Group")

Interim Results for the six months ended 31 March 2013

OMG plc (LSE: OMG), the technology group providing image understanding products for the entertainment, defence, life science and engineering industries, announces interim results for the six months ended 31 March 2013.

Financial Key Points

·     Group Revenue of £13.0m (H1 FY12: £13.6m)

·     Group Adjusted* Loss before Tax of £0.2m (H1 FY12: Adjusted* PBT of £0.7m)

o  Overall Group trading is in line with market expectations at half year end

o  Increased investment in OMG Life to prepare Autographer for volume launch

·     Group Cash position stable at £4.0m (H1 FY12: £3.9m)

Operational Key Points

·     Vicon

o  Launched Apex - a new 3D interaction device for the engineering market

o  Continued sales traction from Bonita mid-range of cameras

o  Vicon technology used in chart-topping video games including Dead Island Riptide, Call of Duty: BlackOps II and God of War: Ascension, and also in the forthcoming summer blockbuster film, World War Z

·     Yotta

o  Continued good sales momentum for SaaS-based Horizons platform

o  Significant multi-year contract wins nationwide including Cardiff, Carillion M40, West Sussex, Hillingdon and others

o  Five accredited survey vehicles now live with promising survey pipeline for H2

·     2d3

o  New versions of Tungsten, TacitView and Catalina software suites launched

o  Partnership announced with Insitu Inc., a wholly owned subsidiary of The Boeing Company, for Tungsten software

o  US sequestration has delayed the timing and shape of certain deals but pipeline remains strong

·     OMG Life

o  Increased investment in Autographer to provide a platform for growth

o  250 devices rigorously field tested and reviewed worldwide

o  Autographer product now ready for volume shipping, commencing 30 July 2013

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

"The first half of this year has seen a number of developments. Some of those, particularly in 2d3, have been challenging where we find ourselves with a great product, a strong customer pipeline, but also uncertainty in US Government budgets caused by sequestration. In spite of that, we've made a good number of real steps forward for the business in H1, such as further sales momentum with our Horizons platform in Yotta, the continued appeal of our Bonita range in Vicon and the finishing touches we've put to our ground breaking Autographer product. That work has required greater investment than we first envisaged, but the Board firmly believes that it will help to generate important sales progress in the second half and beyond."

* Profit Before Tax from continuing operations before Group recharges adjusted for share based payments, amortisation of intangibles arising on acquisition, fair value adjustment to contingent consideration, unwinding of discount on contingent consideration, acquisition costs and redundancy costs. (See note 3)

For further information please contact:

OMG plc	[phone]
Nick Bolton, CEO
David Deacon, CFO
FTI Consulting	[phone]
Matt Dixon / Emma Appleton / Charles Palmer
N+1 Singer (NOMAD to OMG)	[phone]
Shaun Dobson / Jenny Wyllie

About OMG plc

OMG plc (Oxford Metrics Group. LSE: OMG) is a group of technology companies producing image understanding products and services for the entertainment, defence, life science and engineering industries.

Be it for capturing the movements of actors (for the movie industry), sportsmen (for video games or improving team performance), or children with Cerebral Palsy, rehab patients and animals (for medical, life science and research industries); or recording the condition of highways and the assets that surround them; or even providing image intelligence and situational awareness from drone aircraft. Through this diversified offering the Group has earned its strong international reputation for precision from pixels.

Founded in 1984, the Group is headquartered in Oxford, UK, and has four offices in the US and two in the UK. It has customers in over 50 countries and is a quoted company listed on AIM, a market operated by the London Stock Exchange. The Group trades through four operating subsidiaries: Vicon, the world leader movement analysis systems; 2d3 Sensing, providing video intelligence software for defence and civil applications, Yotta DCL, our infrastructure software and services business and OMG Life, our consumer subsidiary.

The Group's global clients spanning the worlds of science, medicine, sport, engineering, gaming, film and broadcast include: major hospitals and research facilities such as Guy's Hospital, Nuffield Orthopaedic Centre and Loughborough University, engineering industry leaders including: Ford Motor Company, BMW, Airbus and Toyota, and in the entertainment sector; Sony, Industrial Light and Magic, Sega, Nintendo, UbiSoft, EA and Square Enix. Infrastructure clients include Highways Agency, Atkins and Cumbria, Derbyshire and Pembrokeshire County Councils amongst others.

For more information about OMG and its subsidiaries, visit

www.omgplc.com, www.vicon.com, www.2d3.com, www.yottadcl.com and www.autographer.com 

Chairman and Chief Executive's Statement

The first half of this year has been a busy period for OMG across all areas of our business. In this first six months, we have continued to refine and develop our core Vicon technology; sharpened our execution within Yotta; consolidated 2d3's presence in the US defence market; and tuned the Autographer product so it is now ready for shipping in volume.

Since October 2013, a number of our most important initiatives have started to deliver real traction. For example, within Yotta, our Horizons software continues to prove its potential by achieving seven new wins and helping to inject an element of visibility and predictability to revenues here. Similarly, within Vicon, the latest Bonita range of mid-priced cameras that we introduced in May of last year has helped to stimulate upgrades from existing customers to higher value T-Series systems. This is an encouraging trend and we expect to see more of it in future years.

We have also seen challenges during the period that have held back progress in certain areas. Our product offering within 2d3, for example, remains excellent and interest from customers remains high. Sequestration in the US, however, has pushed out the timing of certain deals and altered the shape and scope of others. Whilst it is easy to be frustrated by events of this kind, we remain firmly of the view that our long-term position in this market is strong. A number of potential customers are actively seeking ways to work around sequestration issues to ensure they can purchase our technologies. That will inevitably take time to deliver results, but it is an indication of our products' strengths and an encouraging signal to us as a Board.

In spite of short term challenges, our attention remains firmly focused on the long term potential for our Group. To that end, innovation has been a key feature of the first half of the year. Each of our innovations, be it Autographer, our new Apex product within Vicon or our new fleet of vehicles within Yotta, has been developed to target a real, emerging sales opportunity. Our task in the second half is to focus on realising this opportunity. The important and significant investments we have made in recent months will play a key role in helping us achieve this goal.

Financial Summary

KPI	H1 FY13	H1 FY12	Change
Group Revenue	£13.0m	£13.6m	-£0.6m
Group Cash position	£4.0m	£3.9m	+£0.1m
Group Adjusted* - (Loss) Profit before Tax	(£0.2m)	£0.7m	-£0.9m

During the first half, Group revenue decreased year on year by 4.0% to £13.0m (H1 FY12: £13.6m). The Group reports an adjusted* loss before tax for the period of £0.2m (H1 FY12: Profit £0.7m). Overall, the Group excluding OMG Life is trading as expected and consistent with market expectations but the increase in costs in OMG Life to prepare Autographer for volume shipment largely accounts for the decrease in profits compared to the first half of last year. Cash at bank as at 31 March 2013 stood at £4.0m (H1 FY12: £3.9m).

OMG Vicon

	Revenue		PBT		Adjusted* PBT
	H1 FY13	H1 FY12	H1 FY13	H1 FY12	H1 FY13	H1 FY12
Vicon UK	£4.2m	£4.7m	£1.9m	£1.4m	£1.4m	£0.9m
Vicon US	£4.1m	£4.3m	£0.4m	£0.3m	£1.6m	£1.6m
Total Vicon	£8.3m	£9.0m	£2.3m	£1.7m	£3.0m	£2.5m
HoM	£1.2m	£1.5m	(£0.4m)	£0.0m	(£0.4m)	(£0.0m)

Our Vicon systems' business reported a solid start to FY13 with an improved adjusted* PBT of £3.0m (H1 FY12: £2.5m), despite seeing a modest decline in revenues (H1 FY13: £8.3m vs. H1 FY12: £9.0m). This improved profit position reflects the cost reduction measures implemented in the first half of FY12 and the changing nature of the mix of product revenues. It is worth noting this revenue performance was achieved from a diverse set of countries and without any dependency on any single large deals; the largest system purchase in the first half totalled £230,000. This indicates the broad geographic appeal of the differentiated product and the robustness of the subsidiary's revenues.

The product highlight of the half was the launch and shipment of the company's new Apex product. Apex is a 3D interaction device about the size of a small football. The device is held in the hand and enables users to manipulate objects in virtual reality environments. This enables engineers to get a better understanding of the impact of their design choices before going into production. Apex is a great new addition to the company's offer in the engineering market and we expect it to drive sales in this sector through the second half and into next year.

Bonita sales continue to grow as a proportion of overall shipments. Bonita is Vicon's entry-level camera range and has opened the world of precision tracking which Vicon has always offered, at a more accessible price point. Bonita uses all the same software as the top-end product, the T-Series, enabling the customer to preserve their learning investment as they grow with the company's product ranges. In fact, we saw a number of Bonita customers upgrade their systems to T-Series in the first half.

The outlook for Vicon Systems for the second half is positive, with further shipments of the new product releases, the business expects Vicon to deliver market expectations.

House of Moves, our motion capture and animation services studio in Los Angeles, reported revenues of £1.2m (H1 FY12 £1.5m) and an adjusted* operating loss of £0.4m (H1 FY12: Breakeven) before allocation of Group overheads. The entertainment market as a whole remains unpredictable and, as a consequence, demand for our services remain volatile.

OMG Yotta

	Revenue		PBT		Adjusted* PBT
	H1 FY13	H1 FY12	H1 FY13	H1 FY12	H1 FY13	H1 FY12
Yotta UK	£2.5m	£2.0m	(£0.5m)	(£0.4m)	(£0.2m)	(£0.2m)

Yotta reported revenues up 24.4% compared to the same period last year at £2.5m (H112: £2.0m). Despite challenging weather during the winter months, which affected operational efficiency, revenues increased following a further seven Horizon software deals in the first half. Horizons is provided as a Software as a Service (SaaS) product, so customers pay a repeatable annual fee to gain access to the product's capabilities. In addition, professional services consulting revenues also improved which, together with the increased software revenues, saw the revenue mix shift favourably away from weather-dependent surveying revenues.

There were significant multi-year contract wins at Cardiff, Carillion M40, West Sussex and the London Borough of Hillingdon amongst others. Of particular note was the East Sussex strategic partnership win. Yotta has provided highway surveying to East Sussex for many years and this award, won through competitive tendering, highlights the value the company can offer through its Horizons product and its consultancy services, particularly in the area of strategic advice. The range of work will include consolidating networks, generating National Indicator and Whole of Government Accounting reports and helping with gap analysis to identify existing and missing data.

Post period end, Yotta has been awarded a contract to help Hertfordshire County Council - a longstanding client - to develop cost-effective asset data collection regimes to manage and improve its road network. This contract was won through competitive tender process and validates the strength of Yotta's broader-based offer.

The outlook for the second half is encouraging, the company now runs a fleet of five accredited highways measurement vehicles which are now engaged in revenue earning activities including the premier TRACS contract with the Highways Agency announced previously. The pipeline for Horizons is also promising for the second half, so as a whole Yotta is expected to deliver market expectations.

OMG 2d3

	Revenue		PBT		Adjusted* PBT
	H1 FY13	H1 FY12	H1 FY13	H1 FY12	H1 FY13	H1 FY12
UK	£0.2m	£0.2m	(£0.2m)	(£0.1m)	(£0.1m)	£0.0m
US	£0.8m	£0.9m	(£1.0m)	(£0.5m)	(£0.7m)	(£0.3m)
Total 2d3	£1.0m	£1.1m	(£1.2m)	(£0.6m)	(£0.8m)	(£0.3m)

2d3, our intelligence from imagery business serving the defence and civil aviation industry, reported revenues of £1.0m (H1 FY12: £1.1m) and an adjusted* operating loss of £0.8m (H1 FY12 loss: £0.3m) before allocation of Group overheads. The increased loss reflects the Group's increased investment in demand generation, including the recruitment in the first half of three industry veterans into business development roles. These investments are building on the success the business enjoyed in the second half of last year, when the company was awarded two software license deals in excess of $1m each.

The business as a whole is largely dependent on the US Defence market and as a consequence revenues are skewed toward the second half as was the case last year. Whilst the Group believes that defence budgets for Intelligence, Surveillance and Reconnaissance ('ISR') will ultimately be protected, the announcement by the US Government of sequestration measures in March 2013 affecting military budgets has resulted in some uncertainty. For 2d3, this has manifested itself with a number of deals being subject to delay and in some cases deals which had been previously a co-operative acquisition by several defence agencies have now been split into separate opportunities.

2d3 were busy in the first half introducing new versions of their software suite, including Tungsten, TacitView and Catalina. More recently, they have launched a further capability in those products, Reticle FMV (Full Motion Video) metadata improvement and geo-registration. The geospatial data in video streams from aerial sources is often of poor quality with frequent errors and containing no information as to where the image is positioned on the earth's surface. Reticle offers both automatic and user-managed remedies enabling the creation of more useful intelligence product from surveillance imagery with better geospatial accuracy.

On the partnership side, 2d3 announced it will supply Insitu Inc., a wholly owned subsidiary of The Boeing Company, with Tungsten, 2d3's digital media management and exploitation software. Tungsten will be integrated into Insitu's ICOMC2 (Insitu Common Open-Mission Management Command and Control) solution. This allows users to access multiple video streams simultaneously from an unmanned aircraft in real-time. Going forward Tungsten will play an integral role in ICOMC2's motion imagery infrastructure.

The 2d3 pipeline for the second half is the highest ever but the sales effort to close and manage multiple opportunities is an additional challenge and problematic to forecast. In summary, sequestration does not appear to have reduced the opportunity for 2d3 but some deals expected in FY13 are now likely to shift into FY14. From a revenue perspective the Board believes that the operation is on target to fulfil market expectations but will require closure of other revenue opportunities in a currently uncertain defence market to hit profit targets as well.

OMG Life

	Revenue		PBT		Adjusted* PBT
	H1 FY13	H1 FY12	H1 FY13	H1 FY12	H1 FY13	H1 FY12
OMG Life UK	£0.0m	£0.0m	(£1.1m)	(£0.3m)	(£1.0m)	(£0.3m)

As highlighted at the AGM in March 2013, the Company has increased investment in OMG Life, our consumer market subsidiary, to provide a platform for growth. As a result, the operation reported an adjusted* loss of £1.0m (H1 FY12 Loss £0.3m).

In the first half, the Company has been focussed on bringing its first product, Autographer, to market. Autographer is the world's first automatic wearable camera and generated a significant amount of market interest following its launch in September 2012. Since then the Company has manufactured over 250 devices, which have been in active use around the world. All the feedback from the millions of unique images captured has been used to fine-tune both the technology and the proposition to ensure the product fully meets the demands of the consumer marketplace.

The pioneers who have been using these first Autographers have provided us with a range of new insights into the product's benefits. Users valued the truly natural, unposed nature of the images and the fact that the camera didn't interrupt the event they were wanting to capture - they could get on with rowing the boat, climbing the mountain and enjoying the moment rather than having to think about getting their camera out. The unique, wide-angle lens was viewed as an essential part of the product which added creative interest and wider context to all images - ensuring no action was missed, capturing landscapes from captivating new perspectives and portraying more life than a standard narrow angle lens. They loved the way the camera and software allowed them to manage a large number of images and simply create a video storyboard from the sequence of pictures; they saw the output as neither photography nor video but something new and exciting - Autography.

These behavioural insights have been used to hone our marketing plans and equally the large body of images taken through the testing process have been used to optimise the technology. The camera now takes the very best possible shot in a wide variety of environments and situations - indoors and outdoors, portraits and landscapes, rural and urban.

All this excellent work means the product is now ready for volume shipping, which will begin on 30 July 2013. The product will be sold direct online via www.autographer.com. Due to the high level of global interest in the product, availability will be staggered by region so initial demand can be managed. Shipping will commence into European countries and then open up to the US and wider thereafter. As the volumes develop we will update the market in the full year results.

Given the size of the market opportunity across the globe, it is clear Autographer has the potential to transform the shape of the Group, by providing an outlet for our excellent previously B2B only technology in the broader consumer marketplace. We look forward to updating the market with volume sales data at the time of the full year results. In the meantime, the blog on the Autographer website is the best way to stay up-to-date with developments and share in the excitement of the project.

Outlook

As is typical for our Group, we anticipate delivering a second half trading performance that is stronger than the first half. At a Group level we anticipate our full year revenue performance will be in line with current market expectations, driven both by continued sales of existing products and a full trading opportunity for new products introduced in the first half. The second half will see us achieve a number of important trading milestones, such as the first volume sales of Autographer and increased adoption of Horizons by new and existing Yotta customers.

Whilst this strong trading expectation reaffirms our belief in the Group's product offering and strategy, we believe that our profitability performance for the full year will now be a degree below current market expectations. Primarily this is due to the important investments we have made in bringing Autographer to market: a product that will help to generate sales momentum in the second half and beyond.

The Board remains confident in the Group's strategy; in the strength of its offering and position in key markets; and of its ability to deliver sustained, balanced and profitable growth over the long term.

CONDENSED CONSOLIDATED INCOME STATEMENT

		Six months ended 31 March 2013	Six months ended 31 March 2012	Year ended  30 September 2012
		(unaudited)	(unaudited)	(audited)
	Note	£'000	£'000	£'000
Revenue	2	13,044	13,587	29,504
Cost of sales		(5,599)	(5,780)	(11,797)
Gross profit		7,445	7,807	17,707
Sales, support and marketing costs		(2,178)	(2,139)	(4,681)
Research and development		(1,929)	(1,195)	(2,697)
Administrative expenses - exceptional		-	(186)	(203)
- other		(3,946)	(3,937)	(7,986)
Other income		22	23	168
Operating (loss)/profit		(586)	373	2,308
Finance income		5	3	8
Finance expense		(155)	(1)	(540)
(Loss)/profit before taxation	2,3	(736)	375	1,776
Taxation	4	232	(58)	(685)
(Loss)/profit from continuing operations		(504)	317	1,091
Profit/(loss) on discontinued operation net of tax		2	(36)	(34)
(Loss)/profit for the period attributable to owners of the parent during the period		(502)	281	1,057
Basic (loss)/earnings per share (pence)	5	(0.70)p	0.39p	1.48p
Diluted (loss)/earnings per share (pence)	5	(0.70)p	0.39p	1.43p
Continuing operations
Basic (loss)/earnings per share (pence)	5	(0.70)p	0.44p	1.53p
Diluted (loss)/earnings per share (pence)	5	(0.70)p	0.44p	1.47p

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

		Six months ended 31 March 2013	Six months ended  31 March 2012	Year ended  30 September 2012
		(unaudited)	(unaudited)	(audited)
	Note	£'000	£'000	£'000
Net (loss)/profit for the period		(502)	281	1,057
Other comprehensive income
Currency translation differences		199	29	(52)
Tax recognised directly in equity		40	14	(2)
Total other comprehensive income		239	43	(54)
Total comprehensive income for the period attributable to the owners of the parent		(263)	324	1,003

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

		31 March 2013	31 March 2012	30 September 2012
		(unaudited)	(unaudited)	(audited)
	Note	£'000	£'000	£'000
Non-current assets
Intangible assets		6,057	4,426	5,329
Goodwill		6,886	6,665	6,638
Property, plant and equipment		2,275	2,144	2,162
Financial asset - investment		69	69	69
Deferred tax asset		855	700	362
		16,142	14,004	14,560
Current assets
Inventories		2,478	1,876	1,874
Trade and other receivables		7,353	7,770	9,415
Cash and cash equivalents		3,959	3,934	4,341
		13,790	13,580	15,630
Current liabilities
Trade and other payables		(6,253)	(4,863)	(6,115)
Current tax liabilities		(104)	(1)	(36)
		(6,357)	(4,864)	(6,151)
Net current assets		7,433	8,716	9,479
Total assets less current liabilities		23,575	22,720	24,039
Non-current liabilities
Financial liabilities		(1,486)	(1,964)	(2,255)
Deferred tax liability		(1,911)	(1,468)	(1,742)
		(3,397)	(3,432)	(3,997)
Net assets		20,178	19,288	20,042
Capital and reserves attributable to the owners of the parent
Share capital	6	182	179	179
Shares to be issued		65	65	65
Share premium account		7,029	7,002	7,028
Merger reserve		4,008	3,546	3,546
Retained earnings		8,716	8,436	9,245
Foreign currency translation reserve		178	60	(21)
Total equity shareholders' funds		20,178	19,288	20,042

CONDENSED CONSOLIDATED STATEMENT OF CASHFLOWS

		Six months ended 31 March 2013	Six months ended 31 March 2012	Year ended 30 September 2012
		(unaudited)	(unaudited)	(audited)
	Note	£'000	£'000	£'000
Cash flows from operating activities
Operating (loss)/profit		(586)	373	2,308
Depreciation and amortisation		710	724	1,387
Impairment of intangibles		-	396	456
Share based payments		654	6	80
Exchange adjustments		(320)	308	288
Increase in inventories		(567)	(132)	(135)
Decrease/(increase) in receivables		2,344	507	(1,162)
(Decrease)/increase in payables		(936)	350	1,245
Cash generated from continuing operations		1,299	2,532	4,467
Discontinued operations		17	(9)	(19)
Cash generated from operating activities		1,316	2,523	4,448
Tax paid		(10)	48	50
Net cash from operating activities		1,306	2,571	4,498
Cash flows from investing activities
Purchase of property, plant and equipment		(381)	(222)	(535)
Purchase of intangible assets		(1,054)	(1,007)	(2,315)
Proceeds on disposal of property, plant and equipment		6	27	174
Interest received		5	3	8
Net cash used in investing activities		(1,424)	(1,199)	(2,668)
Cash flows from financing activities
Issue of ordinary shares		1	5	6
Payment of finance lease liabilities		(66)	(9)	(53)
Interest element of finance lease repayments		(5)	(1)	(3)
Equity dividends paid		(255)	(214)	(214)
Net cash used in financing activities		(325)	(219)	(264)
Net (decrease)/increase in cash and cash equivalents		(443)	1,153	1,566
Cash and cash equivalents at beginning of the period		4,341	2,817	2,817
Effect of exchange rate changes		61	(36)	(42)
Cash and cash equivalents at end of the period		3,959	3,934	4,341

CONDENSED CONSOLIDATED STATEMENT OF CHANGES TO EQUITY

	Share Capital	Shares to be issued	Share premium account	Merger reserve	Retained earnings	Foreign currency translation reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Balance as at 1 October 2012	179	65	7,028	3,546	9,245	(21)	20,042
Total comprehensive income for the period	-	-	-	-	(462)	199	(263)
Transactions with owners:
Dividends	-	-	-	-	(255)	-	(255)
Shares issued	3		1	462	-	-	466
Movement in relation to share based payments	-	-	-	-	188	-	188
Balance as at 31 March 2013	182	65	7,029	4,008	8,716	178	20,178
Balance as at 1 October 2011	178	65	6,998	3,546	8,349	31	19,167
Total comprehensive income for the period	-	-	-	-	295	29	324
Transactions with owners:
Dividends	-	-	-	-	(214)	-	(214)
Shares issued	1		4	-	-	-	5
Movement in relation to share based payments	-	-	-	-	6	-	6
Balance as at 31 March 2012	179	65	7,002	3,546	8,436	60	19,288
Balance as at 1 October 2011	178	65	6,998	3,546	8,349	31	19,167
Total comprehensive income for the period	-	-	-	-	1,055	(52)	1,003
Transactions with owners:
Dividends	-	-	-	-	(214)	-	(214)
Issue of share capital	1	-	30	-	-	-	31
Movement in relation to share based payments	-	-	-	-	55	-	55
Balance as at 30 September 2012	179	65	7,028	3,546	9,245	(21)	20,042

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

NOTES TO THE CONDENSED CONSOLIDATED INTERIM STATEMENTS

1.   Basis of preparation

OMG 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 2013 comprise the Company and its subsidiaries (together referred to as the "Group").

The following IFRIC amendments and IASs have been issued by the IASB, but are applicable to future periods. They are not expected to have any material impact on the Group's reporting:

·     IFRS 9 'Financial Instruments'

·     IFRS 10 'Consolidated Financial Statements'

·     IFRS 11 'Joint Arrangements'

·     IFRS 12 'Disclosure of Interests in Other Entities'

·     IFRS 13 'Fair Value Measurement'

·     IAS 27 'Separate Financial Statements'

·     IAS 28 'Investments in Associates and Joint Ventures'

·     IFRIC 20 'Stripping Costs in the Production Phase of a Surface Mine'

·     Amendments to IFRS1 ' Government Loans'

·     Amendments to IFRS7 ' Disclosures: Offsetting Financial Assets and Financial Liabilities'

·     Amendments to IAS 19 'Employee Benefits'

·     Amendments to IAS 32  'Offsetting Financial Assets and Financial Liabilities'

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 2012. They are in accordance with IAS 34.

The interim financial statements have not been audited or reviewed and the financial information contained in this report does not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006. The comparative figures for the year ended 30 September 2012 are not the statutory accounts but have been extracted from the Group's 2012 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. 

Segmental reporting

Segment information is presented in the condensed consolidated interim financial statements in respect of the Group's business segments, which are reported to the Chief Operating Decision Maker (CODM). The Group has identified the Board of Directors of OMG 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;

Yotta Group: This is services for the management of infrastructure and taxation, highway surveying and associated software development;

2d3 Group:  This is the development and sale of computer software and equipment for the defence market;

OMG Life:  This is the direct to consumer segment currently engaged in product development.

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

Business segments are analysed below:

	Revenue				(Loss)/profit before tax
	Six months ended 31 March 2013 (unaudited)	Six months  ended 31 March 2012 (unaudited)		Year ended 30 September 2012   (audited)	Six months ended 31  March 2013 (unaudited)		Six months       ended 31 March 2012 (unaudited)	Year ended 30 September 2012  (audited)
	£'000	£'000		£'000	£'000		£'000	£'000
Vicon UK	4,227	4,664		9,055	1,879		1,446	2,854
Vicon USA	4,125	4,292		7,915	431		301	378
House of Moves USA	1,204	1,461		4,024	(391)		(50)	917
Vicon Group	**9,556	**10,417		20,994	1,919		1,697	4,149
Yotta UK	2,457	1,975		4,278	(496)		(406)	(803)
Yotta Group	2,457	1,975		4,278	(496)		(406)	(803)
2d3 UK	209	264		467	(182)		(55)	(255)
2d3 USA	805	882		3,662	(1,007)		(531)	(99)
2d3 Group	1,014	1,146		4,129	(1,189)		(586)	(354)
OMG Life	17	49		103	(1,110)		(319)	(1,151)
Unallocated	-	-		-	140		(11)	(65)
Continuing operations	13,044	13,587		29,504	(736)		375	1,776
Yotta USA - discontinued operation	-	-		-	2		(36)	(33)
OMG Group	13,044	13,587		29,504	(734)		339	1,743

	Underlying (loss)/profit before tax			Non-current assets
	Six months ended 31 March 2013 (unaudited)	Six months  ended 31 March 2012 (unaudited)	Year ended 30 September 2012   (audited)	Six months ended 31 March 2013 (unaudited)	Six months ended 31 March 2012 (unaudited)	Year ended 30 September 2012  (audited)
	£'000	£'000	£'000	£'000	£'000	£'000
Vicon UK	1,897	1,427	2,842	2,521	2,250	2,377
Vicon USA	431	487	564	1,233	1,297	1,155
House of Moves USA	(391)	(50)	920	929	823	682
Vicon Group	1,937	1,864	4,326	4,683	4,370	4,214
Yotta UK	(416)	(357)	(677)	4,495	4,038	4,365
Yotta Group	(416)	(357)	(677)	4,495	4,038	4,365
2d3 UK	(177)	(55)	(255)	20	220	24
2d3 USA	(735)	(415)	738	4,920	4,505	4,641
2d3 Group	(912)	(470)	483	4,940	4,725	4,665
OMG Life	(1,091)	(319)	(1,142)	1,774	671	1,150
Unallocated	247	12	(27)	250	191	166
Continuing operations	(235)	730	2,963	16,142	13,995	14,560
Yotta USA - discontinued operations	2	(36)	(33)	-	9	-
OMG Group	(233)	694	2,930	16,142	14,004	14,560
	Six months ended 31 March 2013 (unaudited)	Six months  ended 31 March 2012 (unaudited)	Year ended 30 September 2012   (audited)
	£'000	£'000	£'000
Revenue by origin
UK	6,910	6,952	13,904
USA - continuing operations	6,134	6,635	15,600
Continuing operations	13,044	13,587	29,504
USA - discontinued operations	-	-	-
OMG Group	13,044	13,587	29,504
Revenue by destination
UK	3,096	2,995	6,298
Europe	1,310	1,363	2,679
North America	5,658	6,513	15,466
Asia Pacific	2,604	2,449	4,482
Other	376	267	579
Continuing operations	13,044	13,587	29,504
North America - discontinued operations	-	-	-
OMG Group	13,044	13,587	29,504

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

	Six months ended 31 March 2013 (unaudited)	Six months  ended 31 March 2012 (unaudited)	Year ended 30 September 2012   (audited)
	£'000	£'000	£'000
Revenue by market
Engineering	1,795	1,569	2,983
Entertainment	3,044	4,369	9,239
Life sciences	4,717	4,479	8,772
	9,556	10,417	20,994

An analysis of adjusted profit before tax net of Group recharges is provided below:

	Six months ended 31 March 2013 (unaudited)			Six months  ended 31 March 2012 (unaudited)			Year ended 30 September 2012   (audited)
	Under-lying    PBT	Group recharges	Adjusted PBT	Under-lying    PBT	Group recharges	Adjusted PBT	Under-lying    PBT	Group recharges	Adjusted PBT
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Vicon UK	1,897	(545)	1,352	1,427	(526)	901	2,842	(859)	1,983
Vicon USA	431	1,198	1,629	487	1,113	1,600	564	2,091	2,655
House of Moves USA	(391)	-	(391)	(50)	-	(50)	920	-	920
Vicon Group	1,937	653	2,590	1,864	587	2,451	4,326	1,232	5,558
Yotta UK	(416)	207	(209)	(357)	183	(174)	(677)	400	(277)
Yotta Group	(416)	207	(209)	(357)	183	(174)	(677)	400	(277)
2d3 UK	(177)	87	(90)	(55)	77	22	(255)	5	(250)
2d3 USA	(735)	75	(660)	(415)	78	(337)	738	315	1,053)
2d3 Group	(912)	162	(750)	(470)	155	(315)	483	320	803
OMG Life	(1,091)	71	(1,020)	(319)	62	(257)	(1,142)	132	(1,010)
Unallocated	247	(1,093)	(846)	12	(987)	(975)	(27)	(2,084)	(2,111)
Continuing operations	(235)	-	(235)	730	-	730	2,963	-	2,963

	Carrying amount of segment assets			Carrying amount of segment liabilities
	Six months ended 31 March 2013 (unaudited)	Six months  ended 31 March 2012 (unaudited)	Year ended 30 September 2012   (audited)	Six months ended 31 March 2013 (unaudited)	Six months  ended 31  March 2012 (unaudited)	Year ended 30 September 2012 (audited)
	£'000	£'000	£'000	£'000	£'000	£'000
Vicon UK	7,400	6,016	8,684	(2,337)	(2,104)	(2,309)
Vicon USA	4,627	4,971	4,069	(1,396)	(1,439)	(1,204)
House of Moves USA	1,880	1,696	1,802	(272)	(244)	(264)
Vicon Group	13,907	12,683	14,555	(4,005)	(3,787)	(3,777)
Yotta UK	8,862	8,780	8,122	(1,747)	(1,248)	(1,358)
Yotta Group	8,862	8,780	8,122	(1,747)	(1,248)	(1,358)
2d3 UK	1,632	2,395	1,447	(68)	(134)	(63)
2d3 USA	5,741	5,432	7,183	(3,030)	(2,518)	(3,594)
2d3 Group	7,373	7,827	8,630	(3,098)	(2,652)	(3,657)
OMG Life	(122)	(395)	(487)	(671)	(280)	(710)
Unallocated	(139)	(1,377)	(677)	(228)	(324)	(641)
Continuing operations	29,881	27,518	30,143	(9,749)	(8,291)	(10,143)
Yotta USA - discontinued operations	51	66	47	(5)	(5)	(5)
OMG Group	29,932	27,584	30,190	(9,754)	(8,296)	(10,148)

	Additions to non-current assets			Segment depreciation and amortisation
	Six months  ended 31  March 2013  (unaudited)	Six months  ended 31  March 2012 (unaudited)	Year ended 30 September 2012 (audited)	Six months  ended 31 March 2013 (unaudited)	Six months  ended 31  March 2012 (unaudited)	Year ended 30 September 2012 (audited)
	£'000	£'000	£'000	£'000	£'000	£'000
Vicon UK	371	486	926	237	277	483
Vicon USA	40	33	57	28	41	45
House of Moves USA	9	2	11	26	50	123
Vicon Group	420	521	994	291	368	651
Yotta UK	341	387	908	224	186	390
Yotta Group	341	387	908	224	186	390
2d3 UK	3	73	7	6	14	24
2d3 USA	49	24	401	179	146	296
2d3 Group	52	97	408	185	160	320
OMG Life	622	374	878	4	1	8
Unallocated	2	4	5	6	9	18
Continuing operations	1,437	1,383	3,193	710	724	1,387
Yotta USA - discontinued operations	-	-	-	-	-	-
OMG Group	1,437	1,383	3,193	710	724	1,387

Reconciliation of underlying (loss)/profit before tax

	Six months ended 31 March  2013	Six months ended 31 March  2012	Year  ended 30 September 2012
	(unaudited)	(unaudited)	(audited)
	£'000	£'000	£'000
(Loss)/profit before tax - continuing operations	(736)	375	1,776
Share based payments - equity settled	188	6	55
Amortisation of intangibles arising on acquisition	163	163	323
Fair value adjustment to contingent consideration	-	-	69
Unwinding of discount on contingent consideration	150	-	537
Redundancy costs	-	186	203
Underlying (loss)/profit before tax - continuing operations	(235)	730	2,963
Profit/(loss) before tax - discontinued operations	2	(36)	(33)
Underlying profit/(loss) before tax - discontinued operations	2	(36)	(33)
Total underlying (loss)/profit before tax - all operations	(233)	694	2,930

Redundancy costs in the prior year relate to the reorganisation of operations at Vicon Motion Systems, inc.

2.   Taxation

The Group's consolidated effective tax rate for the six months ended 31 March 2013 was 31.5% (for the six months ended 31 March 2012: 15.5%; for the year ended 30 September 2012: 38.6%).

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

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.

	Six months ended 31 March 2013	Six months ended 31 March 2012	Year ended 30 September 2012
	(unaudited)	(unaudited)	(audited)
	£'000	£'000	£'000
(Loss)/profit from continuing operations	(504)	317	1,091
(Loss)/profit attributable to ordinary shareholders	(502)	281	1,057
	000's	000's	000's
Weighted average number of ordinary shares for the purpose of basic earnings per share	72,325	71,348	71,453
Dilutive effect of employee share options	4,026	530	998
Dilutive effect of contingent  shares	-	-	1,563
Weighted average number of ordinary shares for the purpose of dilutive earnings per share	76,351	71,878	74,014
Continuing operations
Basic (loss)/earnings per share (pence)	(0.70)	0.44	1.53
Diluted (loss)/earnings per share (pence)	(0.70)	0.44	1.47
Total operations
Basic (loss)/earnings per share (pence)	(0.70)	0.39	1.48
Diluted (loss)/earnings per share (pence)	(0.70)	0.39	1.43

3.   Share capital

	31 March	31 March	30 September
	2013	2012	2012
	(unaudited)	(unaudited)	(audited)
	£'000	£'000	£'000
Authorised
100,000,000 ordinary shares of 0.25p	250	250	250
Allotted, called up and fully paid
72,945,951 shares of 0.25p (31 March 2012: 71,413,399 shares of 0.25p and 30 September 2012: 71,541,629 shares of 0.25p)	182	179	179

During the six month period ended 31 March 2013 1,400,988 shares were issued in relation to the contingent consideration payable for the acquisition of Sensing Systems Inc. In addition 3,334 shares were issued for cash in respect of share options exercised (six month period ended 31 March 2012: 65,000 shares).

During the year ended 30 September 2012 98,896 shares were issued to Sacker Gooding Limited as remuneration for services received. In addition 94,334 shares were issued relating to share option exercises

4.   Dividends

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

	31 March	31 March	30 September
	2013	2012	2012
	(unaudited)	(unaudited)	(audited)
	£'000	£'000	£'000
Final dividend for 2012 paid in 2013 - 0.35 pence per share	255	214	214

The final dividend for 2012 was paid to shareholders on 1 April 2013 at 0.35 pence per share, a total of £255,000.

5.   Copies of the interim statement

Copies of the interim statement will be sent to shareholders. Further copies will be available from the Company's registered office at 14 Minns Business Park, West Way, Oxford OX2 0JB, and from the Company's website: www.omgplc.com.

 

END

 

 

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