11th June 2024
Oxford Metrics
plc
("Oxford Metrics", the
"Company" or the "Group")
Interim Results for the six
months ended 31 March 2024
On track first half
revenues, driven by strong execution
Vicon secures seven
markerless cornerstone customers to redefine future of motion
capture
Industrial Vision Systems,
performing well, opening up smart manufacturing
opportunities
>90% full year revenue
visibility, a growing pipeline and resources for targeted
M&A
Oxford Metrics plc (LSE: OMG), the
smart sensing and software company, servicing life sciences,
entertainment and engineering markets, announces unaudited interim
results for the six months ended 31 March 2024.
Commenting on the results Imogen Moorhouse, Chief Executive,
said: "Now over halfway into delivering our five-year plan, our
teams are in full execution mode. I'm pleased to announce that we
are making clear progress both operationally and financially
towards our goals, as we report on track first half revenues,
demonstrating strong Vicon execution.
Our recent acquisition of Industrial Vision Systems has been
a successful move, it's performing well and we are excited about
the opportunity to drive yet more applications into the smart
manufacturing space. We have the financial resources to do so and
are working on a number of interesting M&A opportunities to
build out our presence in this growing vertical.
As Vicon works towards commercialising markerless, which
enables 3D motion capture without the need to wear motion capture
suits or markers, we are working with seven cornerstone customers
to make the product the gold standard.
Looking ahead, Oxford Metrics enters the second half with
>90% visibility of full year revenues and with a growing
pipeline, the Board believes the Group is well placed to deliver
results in line with current market
expectations."
Continuing Operations
|
H1 FY24
|
H1 FY23
|
%
|
Revenue
|
£23.5m
|
£21.3m
|
+10.5%
|
Adjusted Profit before Tax*
|
£4.0m
|
£4.5m
|
-9.4%
|
Adjusted* Basic Earnings per Share
|
2.63p
|
2.94p
|
-10.5%
|
Statutory Profit/(Loss) before Tax
|
£2.8m
|
£3.4m
|
-17.0%
|
Statutory Basic Earnings per Share
|
2.13p
|
2.59p
|
-17.8%
|
Dividend paid
|
£3.6m
|
£3.2m
|
+9.0%
|
Net Cash
|
£54.8m
|
£63.6m
|
-13.9%
|
|
H1 FY24
|
FY23
|
H1 FY23
|
Order Book**
|
£3.0m
|
£11.3m
|
£21.9m
|
* Profit/(loss) Before Tax from
continuing operations before Group recharges adjusted for
share-based payments, amortisation of intangibles arising on
acquisition and exceptional costs
** FY23 comparative restated at $1.25/£ exchange
rate
Financial Highlights
●
|
Headline Group revenue of £23.5m,
up 10.5% (H1 FY23: £21.3m).
|
●
|
Group adjusted profit before tax of
£4.0m (H1 FY23: £4.5m), reflecting planned investment in the
five-year plan to develop and commercialise markerless.
|
●
|
Order book of £3.0m (FY23: £11.3m /
H1 FY23**: £21.9m), reflecting normalisation of customer buying
behaviour post supply chain challenges.
|
|
○
|
Strong sales pipeline with >90%
visibility on full year revenue.
|
●
|
Adjusted earnings per share 2.63p
(H1 FY23: 2.94p).
|
●
|
Strong balance sheet with net cash
position of £54.8m as at 31 March 2024 (H1 FY23: £63.6m), providing
considerable resources to continue pursuing targeted
M&A.
|
●
|
Cash generated by operations of
£2.2m (H1 FY23: £0.4m) with cash deployed for working capital
purposes to augment inventory and underpin second half
performance.
|
Operational Highlights
First half revenue driven by strong
execution
●
|
Vicon's revenue grew 2.2%, at a
headline level, to £21.8m (H1 FY23: £21.3m), (on a constant currency basis
underlying growth was 3.3%), driven by Vicon's strong
execution.
|
●
|
Order book returns to more normal
levels:
|
|
○
|
Vicon customer buying behaviour
normalising - a trend we expect to continue.
|
|
○
|
Total Order in-take in H1 of
£15.0m (H1 FY23: £19.8m).
|
|
○
|
Total Orders-in-hand as at 31
March 2024 of £3.0m (FY23: £11.3m / H1 FY23: £21.9m).
|
●
|
Engineering revenues of
£4.8m, up 56.6%.
|
|
○
|
Contracts secured for automotive,
aerospace and metrology sectors.
|
|
○
|
Satellite Applications Catapult is
using Vicon to track robots and simulate orbital
environments.
|
●
|
Life Sciences revenues of
£8.0m, up 38.3%.
|
|
○
|
Valkyrie accreditation with UK
Conformity Assessment (UKCA) medical device mark, enabling systems
to be delivered to hospitals around the world including:
|
|
|
▪
|
New customers: Hong Kong
Children's Hospital, Yamagata University Hospital (Japan), Vinmec
International Hospital (Vietnam);
|
|
|
▪
|
Long-standing customers:
Guy's & St Thomas' (UK), Shriners Children's Hospital (USA);
and
|
|
|
▪
|
The Nuffield Orthopaedic Centre in
Oxford, one of Vicon's first-ever customers.
|
|
○
|
New Valkyrie customer, University
of Sydney
|
|
|
▪
|
Using system for research into
head injuries with Rugby League and Rugby Union.
|
|
|
▪
|
Aim to reduce players concussions
in the sport.
|
●
|
Entertainment revenues of
£8.5m, down 22.8%, following a very strong FY23 APAC performance
that is now seeing delayed effects from the global games industry
contraction.
|
|
○
|
Valkyrie delivered, through
partner Lux Machina, to London College of Fashion and MyWorld, a
new global centre of creative technology.
|
|
○
|
Paper Games, in China, added an
additional large Valkyrie system to add realism to their
female-focused games and their VTuber, Nikki.
|
●
|
Location-based Entertainment (LBE) revenues of £0.4m, down 73.7%, due to delayed partner
rollouts that we expect to deliver in H2 FY24.
|
|
○
|
Sandbox VR, now operating in over
46 locations in multiple countries.
|
|
○
|
New partnership with Apparel
Group:
|
|
|
▪
|
Plan to open 25 new locations by
2028;
|
|
|
▪
|
Across the UAE, Kingdom of Saudi
Arabia, Qatar, Kuwait, Bahrain and Oman.
|
|
○
|
Immersive Gamebox trialling
experiences across Merlin Entertainment sites following
multi-million pound and multi-territory agreement.
|
●
|
Markerless becoming a reality and presents a significant
opportunity
|
|
○
|
Vicon has now partnered with seven
cornerstone customers.
|
|
○
|
Together we are further developing
and testing the technology for commercialisation.
|
|
○
|
Cutting-edge advancements will
redefine motion capture and content production.
|
●
|
With our focus firmly on
markerless - where we see the largest growth opportunity - we have
taken a strategic decision to discontinue IMeasureU (IMU) New
Zealand operations.
|
|
○
|
Actively engaged in planned
discussions to sell the IP.
|
Smart manufacturing
●
|
Acquisition of Industrial Vision
Systems ("IVS") completed and is performing well.
|
●
|
Delivered revenues of £1.8m in the
first half and an orderbook of £1.0m.
|
●
|
Brings new niche market strength
in smart manufacturing.
|
●
|
High precision, automated quality
control used across numerous industries.
|
●
|
Multiple new contracts secured as
demand continues for automated inspection and quality
control.
|
●
|
IVS goes into the second half with
a healthy sales pipeline and clear growth
opportunities as part of Oxford Metrics.
|
Outlook
●
|
>90% visibility of full year
revenues and a growing sales pipeline ahead of this time last
year.
|
●
|
Deploying resources to actively
pursue M&A to build out smart manufacturing and IVS.
|
●
|
Encouraged by feedback of
markerless advancements as our teams and partners work hard to
commercialise the offering, optimising the future of motion
capture.
|
●
|
Going forward we do not expect to
maintain a significant order book with the return to customer
trading patterns consistent with those seen
pre-pandemic.
|
●
|
New CFO designate, Zoe Fox to be
appointed Group CFO effective 1 July 2024.
|
●
|
The Board believes Oxford Metrics
is well placed to deliver full year results in line with current
market expectations.
|
For further information please contact:
Oxford Metrics
|
+44 (0)1865 261860
|
Imogen Moorhouse, CEO
|
|
David Deacon, CFO
|
|
|
|
Deutsche Numis
|
+44 (0)20 7260 1000
|
Simon Willis / Hugo Rubinstein /
Tejas Padalkar
|
|
|
|
FTI Consulting
|
+44 (0)20 3727 1000
|
Matt Dixon / Emma Hall / Jamille
Smith / Jemima Gurney
|
|
|
|
About Oxford Metrics
Oxford Metrics is a smart sensing
and software company that enables the interface between the real
world and its virtual twin. Our smart sensing technology helps over
10,000 customers in more than 70 countries, including all of the
world's top 10 games companies and all of the top 20 universities
worldwide. Founded in 1984, we started our journey in healthcare,
expanded into entertainment, winning an OSCAR® and an Emmy®, moved
into defence, engineering and smart manufacturing. We have a strong
track record of creating value by incubating, growing and then
augmenting through acquisition, unique technology
businesses.
The Group trades through its
market-leading division Vicon and, recently acquired, Industrial
Vision Systems, adding niche market strength in smart
manufacturing. Vicon is a world leader in motion measurement
analysis to thousands of customers worldwide, including Red Bull,
Imperial College London, Dreamscape Immersive, Industrial Light
& Magic, and NASA. Industrial Vision Systems is a specialist in
machine vision software and technology for high precision,
automated quality control systems trusted by blue-chip, smart
manufacturing companies across the globe including BD, DePuy,
Jaguar Land Rover, Johnson & Johnson, Zytronic and
Alkegen.
The Group is headquartered in
Oxford with offices in California, Colorado, Auckland, and Kempten.
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
Now in year three and just over
halfway into delivering our five-year plan, the team is in full
execution mode, and we are making clear progress towards our goals.
Today, we report an on track
first half revenue performance, driven by strong
Vicon execution.
During the half, we welcomed
Industrial Vision Systems into the Group. An earnings enhancing
acquisition taking us into a new market - smart manufacturing. We
are excited about the opportunities this move brings to extend into
yet more applications.
Our team at Vicon has been making
good progress commercialising markerless. Markerless will be a key part of the future of our industry,
enabling 3D motion capture without the need to wear motion capture
suits or markers, using the latest machine learning and AI
techniques to process video imagery to create 3D visualisations. As
part of our Pioneer Programme to further develop and test the
markerless technology, Vicon has now partnered with seven
cornerstone customers to get the delivery and commercialisation
right and set the gold standard.
In March, after 15 years as our
CFO, David Deacon announced his desire to move away from a
full-time executive role with these Interims being his last. I
would like to take the opportunity to thank David for his years of
service. David will remain with the business for a period of time
to ensure a smooth handover to our CFO designate, Zoe Fox, who will
be appointed as the Group's CFO from 1 July 2024.
As expected, the Vicon business
has returned to pre-pandemic trading patterns. Our order book has
returned to more normal levels as customer demand and buying
behaviours have normalised post the
pandemic disruption and the well-documented global supply chain
challenges throughout that time. This continues the trend we saw in
the second half of FY23 which saw us close the year with
orders-in-hand of £11.3m.
As our teams focus their attention
and innovation efforts on commercialising markerless - where we see
clear growth opportunities - we have taken a strategic decision to
discontinue IMeasureU (IMU), our New Zealand operation and are
actively engaged in discussions to sell the IP.
On target first half trading
KPI
|
Revenue
|
PBT
|
Adjusted
PBT*
|
|
H1
FY24
|
H1
FY23
|
H1
FY24
|
H1
FY23
|
H1
FY24
|
H1
FY23
|
Vicon
|
£21.7m
|
£21.3m
|
£1.9m
|
£3.4m
|
£4.3m
|
£5.4m
|
IVS
|
£1.8m
|
-
|
£0.3m
|
-
|
£0.5m
|
-
|
Group
|
-
|
-
|
£1.2m
|
£0.6m
|
(£0.8m)
|
(£0.9m)
|
Continuing
|
£23.5m
|
£21.3m
|
£3.4m
|
£4.0m
|
£4.0m
|
£4.5m
|
Discontinued
|
£0.0m
|
£0.0m
|
(£1.4m)
|
(£0.1m)
|
(£0.5m)
|
(£0.4m)
|
Group
|
£23.5m
|
£21.3m
|
£2.0m
|
£3.9m
|
£3.5m
|
£4.1m
|
The Group reports revenues of
£23.5m (H1 FY23: £21.3m), up 10.5% at a
headline level. The Group also reports an Adjusted PBT* of £4.0m (H1 FY23: £4.5m), which largely
reflects the net effect of increased revenues less planned
investment in the five-year plan to develop markerless technology, additional Vicon Sales & Marketing
investment, increased property related costs and some inflationary
related increases.
Vicon successfully stepped-up
volume again, delivering most of the opening order book whilst at
the same time booking new orders in the first half of £14.0m. The
current Vicon orderbook stands at £2.0m and we expect this to be
delivered in the second half.
Our acquisition of IVS was
completed and is performing well, reporting revenues of £1.8m and
an Adjusted profit of £0.5m in the first half; further, the
business has an orderbook of £1.0m and a healthy sales
pipeline.
Vertical market segments
performance was as follows:
Engineering
Engineering reported revenues of
£4.9m (H1 FY23: £3.1m) representing growth of 56.6%.
Common applications for Vicon
solutions in the Engineering market include Unmanned Aerial Vehicle
(UAV) and robot tracking, robotics development and evaluating
product designs in manufacturing, ergonomics and research.
Contracts were secured from automotive, aerospace and metrology
sectors. Of note is the work being carried out at Satellite
Applications Catapult. Catapult added cameras to their existing
Vicon system which they use to help them track robots and simulate
orbital environments to prepare for servicing, refuelling and
assembly operations in space.
Life Sciences
Life Sciences reported revenues of
£8.1m (H1 FY23: £5.8m) representing growth of 38.3%. Valkyrie
successfully achieved the UK Conformity Assessment (UKCA) medical
device mark accreditation, a new and more stringent classification
on patient safety and device performance, part of the UK Medical
Device Regulations (MDR). This accreditation enabled Valkyrie
systems to be delivered to hospitals around the world
including:
●
|
New customers, Hong Kong
Children's Hospital, Yamagata University Hospital (Japan), Vinmec
International Hospital (Vietnam);
|
●
|
Long-standing customers Guy's
& St Thomas's Hospital (UK), Shriners Children's Hospital
(USA); and
|
●
|
The Nuffield Orthopaedic Centre,
(UK) one of Vicon's first-ever customers.
|
Our new customer, University of
Sydney, invested in a Valkyrie solution for research into head
injuries with Rugby League and Rugby Union players with the aim of
studying safer tackling techniques that could reduce the risk of
concussions in sport.
Entertainment
Entertainment reported revenues of
£8.5m (H1 FY23 £11.0m) representing a decline of 22.8%. This
follows a very strong FY23 performance in APAC that is now seeing
delayed effects from the global games industry
contraction.
Through our customer and partner,
Lux Machina, Valkyrie solutions were delivered to London College of
Fashion and MyWorld, a new global centre of creative technology.
Most recently, Paper Games in China added an additional large
Valkyrie system to their existing Valkyrie solution to add realism
to their female-focused games and their VTuber, Nikki, who live
streams weekly.
Location-based Entertainment (LBE)
LBE reported revenues of £0.4m (H1
FY23: £1.4m) representing a decline of 73.7% due to delayed partner
rollouts that we expect to deliver throughout the rest of
FY24.
Our partner, Sandbox VR, is now
operating in 46 locations in multiple countries and continues to
expand. Sandbox VR recently announced it is partnering with Apparel
Group and plans on opening 25 new locations across the UAE, Kingdom
of Saudi Arabia, Qatar, Kuwait, Bahrain, and Oman by 2028.
Elsewhere, our partner Immersive Gamebox is trialling experiences
across Merlin Entertainment sites, following its multi-million
pound and multi-territory agreement.
Smart manufacturing
Encouragingly, multiple new
contracts have been secured in the first half as demand continues
for automated inspection and quality control. The medical sector
saw the largest growth in the first half, including:
●
|
A leading London hospital invested
in a semi-automatic inspection system to verify if particulates are
present in fluid filled glass containers that would otherwise
contaminate the chemical-based product.
|
●
|
A new medical client invested in
six inspection systems, three units for integration within existing
production lines and three high-speed standalone pellet inspection
machines.
|
●
|
Multiple contracts were secured
worldwide for inspection systems for high-speed contact lens
production lines including an automated inspection system for a new
Spanish-based contact lens manufacturer. A new automotive client
invested in an automated battery verification end of line solution
and a US owned, UK-based aerospace manufacturer invested in our
market leading industry 5.0 smart workbench solution for its
assembly line.
|
Overall, Vicon reported a gross
margin at 68.7% (H1 FY23: 69.1%) in the first half as anticipated
and is attributed to the mix of revenues arising from both the
specific geographic spread of revenues and the various margin
contributions of each product line. As the residual supply chain
costs begin to normalise, together with other initiatives, we
expect gross margin to show improvement in the second
half.
Given the above revenue and gross
margin performance coupled with a rise in the underlying cost base,
before Group costs, Vicon reported an Adjusted PBT* of £4.3m (H1
FY23: £5.3m) and an unadjusted profit before tax of £1.9m (H1 FY23:
£3.4m) and IVS reported an Adjusted Profit of £0.5m.
Returning to the Balance Sheet,
the cash position, having paid a final dividend of £3.6m and
deployed £6.2m on the acquisition of IVS in the first half,
finished at £54.8m as at 31 March 2024 (H1 FY23: £63.6m). Cash
generated by operations during the first half was £2.2m compared
with £0.4m in the first half of last year.
Vicon inventory at £9.0m (H1 FY23:
£6.4m) is higher than typical due to a planned increase which is
largely for operational reasons and is expected to be reduced to
around £7.0m by the end of the financial year.
Sense. Analyse. Apply - Five-year plan
progress
During the half, we continued to
make good progress against our five-year plan, which aims to
increase FY21 revenues 2.5x and deliver an adjusted profit before
tax margin of 15% by the end of FY26. The plan is all about
extending our sensing capabilities, enhancing analysis modes and
embedding our IP in other areas. This is being achieved through a
measured approach with both organic and inorganic
investment.
At our recent Capital Markets Day in April 2024 the progress made
through our investment efforts were on display. Now past the
halfway point of the five-year plan, we have made clear progress,
including:
●
|
Showcasing our markerless
technology in action used in Dreamscape's 'The Clockwork Forest' VR
experience and seeing how IVS is a great new addition - with
positive feedback from those who were able to experience the demos
first-hand. To see more on this watch our videos of the day
here.
|
●
|
In November 2023 we acquired IVS,
an earnings enhancing acquisition taking us into smart
manufacturing, opening up new opportunities for growth and adding
even more great names to our strong client roster.
|
●
|
In August 2023, we unveiled the
new markerless technology to extend our sensing
capabilities.
|
●
|
In July 2022, Vicon launched the
premium Valkyrie camera to drive organic motion capture
growth.
|
●
|
Successful sale of Yotta to
Causeway Technologies for £52m in May 2022 - at a premium valuation
that provided a strong cash balance to pursue our growth
ambition.
|
Having started the five-year plan
in 2021 with continuing revenues of £27.5m, all from our motion
capture business Vicon, we are aiming for £70m revenues by the end
of FY26.
Five-year plan investment
Markerless - now a reality
Since unveiling our markerless
technology at Siggraph 2023, Vicon has partnered with seven
cornerstone customers as part of their Pioneer Program to further
develop and test the markerless technology. These cornerstone
partners include some of the leading brands in game and film
industries and have been carefully selected for their
groundbreaking innovations in animation and virtual production.
Feedback so far has been encouraging as our teams and partners work
hard to commercialise the offering, optimising the future of motion
capture and setting the gold standard.
M&A
We continue to actively pursue
M&A that aligns with our strict criteria. We are primarily
targeting between £3-9m in revenues in smart manufacturing, as we
aim to build out from the IVS acquisition. We are actively working
on a number of opportunities within the smart manufacturing space
that deliver this goal and have discovered a broad and diverse
range of opportunities.
Quadrants of
growth
Outlook
We enter the second half with a
growing sales pipeline well ahead of this time last year and
>90% visibility of full year revenues.
We continue to deploy internal and
external resources into M&A to deliver on the inorganic
component of the five-year strategic plan. Whilst we recognise the
Group has considerable cash resources, the Board remain resolute
that every acquisition we make will be the right one, for the right
reasons and at the right price.
Given the first half performance
and visibility of the second half, the Board believe Oxford Metrics
are well placed to deliver a performance for the full year in line
with current market expectations.
* Profit/(loss) Before Tax from continuing operations before
Group recharges adjusted for share-based payments, amortisation of
intangibles arising on acquisition and exceptional
costs.
CONDENSED CONSOLIDATED INCOME
STATEMENT
|
|
Six months
ended
31 March
2024
|
Six
months ended
31
March
2023
|
Year
ended
30
September 2023
|
|
|
(unaudited)
|
(unaudited)
|
(audited)
|
|
Note
|
£'000
|
£'000
|
£'000
|
Revenue
|
2
|
23,523
|
21,285
|
44,240
|
Cost of sales
|
|
(7,806)
|
(7,132)
|
(15,497)
|
Gross profit
|
|
15,717
|
14,153
|
28,743
|
Sales, support and marketing
costs
|
|
(4,531)
|
(3,609)
|
(8,169)
|
Research and development
|
|
(2,971)
|
(3,358)
|
(6,599)
|
Administrative expenses
|
|
(5,890)
|
(3,671)
|
(8,786)
|
Operating profit
|
|
2,325
|
3,515
|
5,189
|
Finance income
|
|
1,199
|
547
|
1,561
|
Finance expense
|
|
(132)
|
(48)
|
(163)
|
Profit before taxation
|
|
3,392
|
4,014
|
6,587
|
Taxation
|
|
(598)
|
(648)
|
(611)
|
Profit from continuing
operations
|
|
2,794
|
3,366
|
5,976
|
Loss from discontinued operations,
net of tax
|
|
(1,382)
|
(123)
|
(320)
|
Profit for the period attributable to
owners of the parent during the period
|
|
1,412
|
3,243
|
5,656
|
|
|
|
|
|
Earnings per share for profit on continuing operations
attributable to owners of the parent during the
year
|
|
|
|
|
Basic earnings per share
(pence)
|
6
|
2.13p
|
2.59p
|
4.59p
|
Diluted earnings per share
(pence)
|
6
|
2.10p
|
2.55p
|
4.56p
|