Interim Results
OMG PLC
11 June 2001
OMG plc
Interim Results
OMG plc, the group that delivers electronics and software products based upon
3-dimensional information contained in 'the moving image' to the
entertainment, medical, scientific and engineering industries, is pleased to
announce its maiden interim results for the six months ended 31 March, 2001.
Highlights
+ Six months Turnover up 58% to £4.6million (2000: £2.9million)
+ Six months Operating Profit up 86% to £0.6million (2000: £
0.3million)
+ Earnings per share up 77% to 0.99p per share
+ Successful flotation on AIM raising £5.2million
+ Vicon Motion Systems provides content tools for new generation games
consoles: Sony PlayStation 2, Microsoft XBox
+ Vicon technology successfully applied in high profile feature films:
Pearl Harbour, The Mummy Returns, Gladiator
Commenting on the results, Sir Peter Thompson, Chairman said:
'The last six months have proved to be very eventful for OMG and I am
delighted to report on our achievements over this period. As well as achieving
strong growth in both sales and profits we have also completed a successful
flotation that has provided the funds for substantial future development. As a
group delivering high technology products to potentially large markets, away
from the vagaries of consumer telecommunications and Internet commerce, OMG
feels confident of substantial and sustained organic growth in a trading
environment that remains exciting, both in the short and long term.'
For further information, please contact:
OMG plc 01865 261800
Julian Morris, Chief Executive
OMG: www.omg3d.com
Buchanan Communications 020 7466 5113
Tim Thompson/Bobbie Swanson
Chairman's Statement for the six month period ended 31 March 2001
highlights
+ Six months Turnover up 58% to £4.6million
+ Six months Operating Profit up 86% to £0.6million
+ Earnings per share advance 77%
+ Successful flotation on AIM raising £5.2million net
+ Heavy research and marketing development programme planned
Welcome
This is the first financial statement published by OMG plc since the company
was admitted to AIM on 10 April 2001. Accordingly, I should like to welcome
our new shareholders who we hope will enjoy a long association with the
company.
Trading Results
I am pleased to report strong growth in both sales and profits during the
first 6 months of the current financial year to 31 March 2001.
Turnover rose to £4,560,000 (2000 £2,884,000), an increase of 58% over the
same period in the previous year. Operating profits rose by 86% to £586,000
(2000 £315,000). Earnings per share increased by 77% to 0.99p (2000 0.56p).
The growth in turnover was entirely attributable to the group's motion capture
and analysis businesses, Vicon Motion Systems Limited and Vicon Motion Systems
Inc (USA). The visual geometry business, 2d3 Limited, successfully completed
development work and third party testing of its first product, but shipments
have only begun since the half-year ended.
DIVIDENDS
As indicated in the flotation Prospectus the directors are not declaring a
dividend in relation to these results, but the issue of dividend policy will
be kept under review.
Current Trading
OMG sells highly specialised products into a wide range of markets in the
entertainment, medical, engineering and research industries. On the evidence
of growth in unit sales over the period reported here and into the second
half, demand for the group's products in all these markets is healthy and
growing. Growth in the entertainment and research sectors has been
particularly strong.
While the group anticipates continued further revenue growth in the second
half, the funds raised at the time of flotation are now being invested in
staff and infrastructure. As a result costs are also expected to increase at a
greater rate than sales for the year as a whole.
Vicon Motion Systems
In spite of intense competition for new customers in all geographical markets,
Vicon Motion Systems' motion capture and analysis products have proved their
technical superiority and popularity with both new and existing users.
As indicated in the Prospectus issued in connection with the flotation, Vicon
Motion Systems expects growth to continue strongly in the entertainment
markets, with particularly high demand for motion capture in the production of
content for the new generation of games consoles such as Sony PS2 and
Microsoft XBox. Motion capture is also finding increasing use in commercials
and popular music videos. Vicon technology has been applied successfully in a
growing number of high-profile feature films, such as Enemy at the Gates, The
Mummy Returns, Pearl Harbour and, of course, Oscar-winning Gladiator. While
not the major contributors of motion capture sales revenue for the group, such
productions provide an all-important quality reference for the visual effects
industry.
As well as maintaining steady revenues from its gait analysis business, Vicon
Motion Systems' Science and Engineering division has won a number of new key
customers as part of its plan to extend the range of applications of its
technology. Amongst these Peugeot and BMW perform ergonomic tests on car
drivers, while US Army TACOM makes similar tests on the occupants of fighting
vehicles. US Naval Research Laboratory trains marines in virtual environments,
while ASICS tests sports footwear. Loma Linda Hospital plans and controls
positron-beam radiotherapy, while Lund University Architecture Department
plans highly-flexible internal building layouts. The range of applications for
motion capture and analysis is steadily expanding.
2d3
2d3 is earning its first revenues in the second half of 2000/2001. The
extensive third party test programme for its first product boujou has been
conducted by leading visual effects companies in the UK and US. This programme
has proved so successful that a number of feature films and TV commercials
have been released containing shots 'tracked' using boujou even before the
product has officially been released for sale.
Boujou has also been very favourably reviewed in the trade press. The
marketing momentum of these achievements, and the lack of any known competing
products with comparable specifications are together expected to lead to a
strong sales build up in the second half of the year.
Staff
OMG's business relies, above all else, on the group's ability to recruit the
highest quality of staff and to apply their skills and labours to the
efficient creation of wealth.
The total of OMG employees grew from 44 on 30 September 2000 to 57 on 31 March
2001, an increase of 30%.
In the second half of 2000/2001, the company plans a significant increase in
the rate of recruitment in order to achieve the planned growth targets. Whilst
this may result in costs increasing at a greater rate than sales in the short
term, it is only through the employment of highly qualified new staff that the
planned growth will be achieved.
New appointments will be made in almost all areas, particularly electronic and
software development, sales, and customer support. In the recent past, the
group has not found it easy to attract suitably qualified and experienced
staff. However, recent experience suggests that this situation is improving.
Two main factors appear most relevant; the increased profile of OMG as an AIM
listed public company, and reduced competition for similar staff in other
parts of the UK technology sector.
Outlook
The outlook for OMG is exciting, in both the short and long term. As a group
delivering high technology products to potentially large markets away from the
vagaries of consumer telecommunications and Internet commerce, OMG feels
confident of substantial and sustained organic growth.
The £5.2 million of net new funds raised by the recent placing came too late
to have any impact on the results reported here. These funds together with
OMG's pre-placing cash resources will support an investment cycle planned to
last between 12 and 24 months. Through this investment cycle, the group will
seek to broaden both its product range and the size and scope of its markets.
It must be remembered that this investment will mainly be in research and
market development costs which are written off as they are incurred with a
consequential impact on profitability.
Results of this quality are not achieved without the dedicated effort and
innovation of all members of staff. On behalf of the shareholders we would
like to thank them.
We look forward to reporting on the group's further progress at the time of
publication of the results for the full year.
Sir Peter Thompson Julian Morris
Chairman Chief Executive
8 June 2001
GROUP PROFIT AND LOSS ACCOUNT
For the period ended 31 March 2001
Unaudited six Unaudited six (Note 1)
months to 31 months to 31 Twelve months to
March March 30 September
2001 2000 2000
£'000 £'000 £'000
Turnover 4,560 2,884 6,780
Cost of sales 1,519 1,208 2,527
Gross profit 3,041 1,676 4,253
Administrative expenses (2,579) (1,440) (3,442)
Grants receivable 124 79 178
Operating profit 586 315 989
Interest receivable and 22 24 54
similar income
Profit on ordinary 608 339 1,043
activities before
taxation
Tax on profit on ordinary (201) (110) (356)
activities
Retained profit for the 407 229 687
period
Basic earnings per share 0.99p 0.56p 1.67p
(Note 2)
Diluted earnings per 0.79p 0.44p 1.33p
share (Note 2)
GROUP BALANCE SHEET AT 31 March 2001
Unaudited six Unaudited six (Note 1)
months to 31 March months to 31 March Twelve
months to
2001 2000 30
September
2000
£'000 £'000 £'000
Fixed assets
Tangible assets 369 133 152
Current assets
Stocks 674 460 414
Debtors 2,323 944 2,116
Cash and short term deposits 1,383 1,412 900
4,380 2,816 3,430
Creditors - amounts falling
due within one year
Trade and other creditors 1,183 608 602
Corporation tax 589 246 426
1,772 854 1,028
Net current assets 2,608 1,962 2,402
Total assets less current 2,977 2,095 2,554
liabilities
Capital and reserves
Share capital 103 101 101
Share premium account 15 1 1
Profit and loss account 2,859 1,993 2,452
2,977 2,095 2,554
GROUP CASH FLOW STATEMENT
For the period ended 31 March 2001
Unaudited six Unaudited six (Note 1)
months to 31 March months to 31 March Twelve
months to
30
September
2001 2000 2000
£'000 £'000 £'000
Net cashflow from operating 750 80 (318)
activities
Returns on investments and
servicing of finance
Interest received 22 24 54
Taxation (38) (8) (74)
Capital expenditure
Purchase of tangible fixed (267) (53) (164)
assets
Sale of tangible fixed - - 13
assets
Financing
Issue of share capital 16 - -
Increase/(decrease) in cash 483 43 (489)
NOTES TO THE INTERIM STATEMENT
1. PREPARATION OF THE INTERIM FINANCIAL INFORMATION
The financial information for each of the six month periods ended 31 March
2000 and 31 March 2001 is unaudited and does not constitute statutory accounts
within the meaning of the Companies Act 1985. It has been prepared using
accounting policies consistent with those set out in the statutory accounts of
Vicon Motion Systems Limited, the then parent company of the group, for the
year ended 30 September 2000.
The financial information for the year ended 30 September 2000 has been
extracted from the consolidated financial information set out in the
Prospectus of OMG plc dated 28 March 2001, which was based on the audited
financial statements of Vicon Motion Systems Limited for the three years ended
30 September 2000 and the unaudited financial information of Vicon Motion
Systems Inc. The Accountants' Report prepared by Grant Thornton in connection
with this information for the purposes of the Prospectus was unqualified, and
the Prospectus has been filed with the Registrar of Companies.
2. EARNINGS PER SHARE
The calculation of the basic earnings per share is based on the earnings
attributable to ordinary shareholders divided by 41,102,000, the number of
shares in OMG plc immediately prior to the Placing of ordinary shares in
accordance with the Prospectus dated 28 March 2001. 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.
3. PRO FORMA BALANCE SHEET
The following unaudited pro forma balance sheet has been prepared to
illustrate the effect of the Placing of ordinary shares in accordance with the
Prospectus of OMG plc dated 28 March 2001 on the assets, liabilities and
capital and reserves of the Group. It is based on the unaudited balance sheet
of the Group at 31 March 2001 adjusted to reflect the proceeds of the Placing
net of issue costs, and because of its nature may not give a true picture of
the financial position of the Group following the Placing.
Unaudited 31 March Placing Pro
2001 proceeds Forma
net of issue
costs
£'000 £'000 £'000
Fixed assets
Tangible assets 369 369
Current assets
Stocks 674 674
Debtors 2,323 2,323
Cash and short term deposits 1,383 5,208 6,591
4,380 5,208 9,588
Creditors - amounts falling due
within one year
Trade and other creditors 1,183 1,183
Corporation tax 589 589
1,772 1,772
Net current assets 2,608 5,208 7,816
Total assets less current liabilities 2,977 5,208 8,185
Capital and reserves
Share capital 103 20 123
Share premium account 15 5,188 5,203
Profit and loss account 2,859 - 2,859
2,977 5,208 8,185
4. RECONCILIATION OF OPERATING PROFIT TO NET CASH OUTFLOW FROM OPERATING
ACTIVITIES
Unaudited six Unaudited six (Note 1)
months to 31 March months to 31 March Twelve
months to
30
September
2001 2000 2000
£'000 £'000 £'000
Operating profit 586 315 989
Depreciation 50 46 133
Profit on sale of tangible - - (2)
fixed assets
Increase in stock (260) (95) (49)
Increase in debtors (207) (312) (1,496)
Increase in creditors 581 126 107
Net cash inflow/(outflow) from 750 80 (318)
operating activities
5. RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS
Unaudited six months Unaudited six months (Note 1)
to 31 March to 31 March Twelve
months to
30
September
2001 2000 2000
£'000 £'000 £'000
Increase/(decrease) in 483 43 (489)
cash for the period
Currency movements - - 20
Change in net funds for 483 43 (469)
the period
Opening net funds 900 1,369 1,369
Closing net funds 1,383 1,412 900
6. 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 for one month from today.
INDEPENDENT REVIEW REPORT TO OMG PLC
Introduction
We have been instructed by the company to review the financial information set
out on pages 4 to 9 and we have read the other information contained in the
interim report and considered whether it contains any apparent misstatements
or material inconsistencies with the financial information.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by the directors. The
responsibility includes ensuring that the accounting policies and presentation
applied to the interim figures should be consistent with those applied in
preparing the preceding annual accounts except where any changes, and the
reasons for them, are disclosed.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999
/4 'Review of Interim Financial Information' issued by the Auditing Practices
Board. A review consists principally of making enquiries of management and
applying analytical procedures to the financial information and underlying
financial data and, based thereon, assessing whether the accounting policies
and presentation have been consistently applied unless otherwise disclosed. A
review excludes audit procedures such as tests of controls and verification of
assets, liabilities and transactions. It is substantially less in scope than
an audit performed in accordance with Auditing Standards and therefore
provides a lower level of assurance than an audit. Accordingly, we do not
express an audit opinion on the financial information.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 31 March 2001.
GRANT THORNTON
REGISTERED AUDITORS
CHARTERED ACCOUNTANTS
OXFORD
8 June 2001
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