TIDMOMG
RNS Number : 6492V
Oxford Metrics PLC
05 December 2023
5 December 2023
Oxford Metrics plc
("Oxford Metrics", the "Company" or the "Group")
Preliminary Results for the financial year ended 30 September
2023
- Record Revenue and Adjusted PBT performance, ahead of market
expectations
- Continued innovation unveiling our new markerless technology
at Siggraph 2023
- In FY23 Vicon manufactured more camera systems than ever
before
- Enter FY24 with strong order book and visibility on over half
of revenue expectations
Oxford Metrics plc (LSE: OMG), the smart sensing and software
company servicing life sciences, entertainment and engineering
markets , announces preliminary results for the financial year
ended 30 September 2023.
Continuing Operations FY23 % Change FY22
Revenue GBP44.2m +53.5% GBP28.8m
-------- -------- --------
Adjusted Profit Before Tax* GBP6.5m +151.9% GBP2.6m
-------- -------- --------
Adjusted* Basic Earnings per Share 4.57p +79.2% 2.55p
-------- -------- --------
Ordinary Dividend per Share 2.75p +10% 2.50p
-------- -------- --------
Statutory Profit after Tax GBP5.7m +66.5% GBP3.4m
-------- -------- --------
Statutory Basic Earnings per Share 4.35p +63.5% 2.66p
-------- -------- --------
Net Cash** GBP64.8m -4.3% GBP67.7m
-------- -------- --------
Orders-in-hand GBP11.5m -52.2% GBP24.0m
-------- -------- --------
* Profit Before Tax before Group recharges adjusted for
share-based payments, amortisation and impairment of intangibles
arising on acquisition and additional Contemplas consideration
deemed remuneration.
** Including Fixed Term Deposits and Bank overdraft.
Financial Highlights
-- Record headline revenue of GBP44.2m (FY22: GBP28.8m), (up 53.5%,
up 52.4% on a constant currency basis), driven by demand for
our new flagship system, Valkyrie
-- Gross Profit of 65.0% (FY22: 67.5%), reflecting the use of higher
cost components acquired during the supply chain challenge of
the last few years and changes in product mix
-- Adjusted Profit Before Tax* at GBP6.5m (FY22: GBP2.6m), up 151.9%
year on year, reflecting the strong revenue performance as well
as a planned increase in R&D to deliver the five-year plan and
the benefit of increased interest income
-- Strong balance sheet with net cash position of GBP64.8m (FY22:
GBP67.7m), well placed to pursue M&A aspect of the five-year
plan
-- Board proposes increased final dividend to 2.75p per share (FY22:
2.50p), up 10.0% year on year
Operational highlights
Strong execution of orders and continued buyout demand drives
revenue growth
-- Order book as of 30(th) September 2023 of GBP11.5m (FY22: GBP24.0m),
reflecting the more normalised buying cycles following the global
supply chain challenges now largely abated
-- Strong demand across all our market segments
-- Entertainment: Buoyant demand continued, with revenue up 82%,
accounting for 43% of orders in hand
o Contract wins for major Valkyrie Stages at Cover Japan,
Dimension Studio & PUBG Madison
-- Engineering: revenues up 56% year on year, accounting for 22%
of orders in hand
o Contract wins with ITESM, University of Arizona and University
of Manitoba
-- Life Sciences: revenues grew 40%, accounting for 29% of the
orders in hand
o Notable deals include Hospital Israelita Albert Einstein
(HIAE), University of Padova, Victoria University and University
of Rochester Medical Centre
-- Location-based Entertainment (LBE): reported a slight decline
year on year of 5% following exceptional growth, accounts for
6% of orders in hand
o Sandbox VR announced their 45(th) location and Immersive
Gamebox opened their 30(th) location in the year, all powered
by Vicon technology
-- Valkyrie, Vicon's flagship system, continued to drive revenues
and orders in the year
-- Markerless technology demonstrated at Siggraph 2023 was well-received
o Technology demonstration of markerless technology follows
over four years of R&D focussing on the integration of machine
learning and AI into markerless motion capture
o Established our Pioneer Programme, working closely with
both customers and prospects to help refine the product
as we start to commercialise markerless
-- Imogen Moorhouse appointed Group CEO 1 October 2023
Extending smart sensing capabilities via M&A - Industrial
Vision Systems (IVS)
-- Post period end on 1(st) November 2023, acquired Industrial Vision
Systems Ltd ("IVS") adding smart manufacturing to our market-leading
portfolio
o Brings specialised machine learning AI technology for automated
quality control, meeting companies' requirements for a "right
first time" solution
o IVS adds IP rich, hard-to-replicate vision software and
machine technology, bringing over 23 years of experience
in smart vision technology
o IVS' systems spot patterns and anomalies in real-time manufacturing
quality control, ensuring precise and repeatable solutions
that continuously learn based on image data
Outlook
-- With encouraging demand, Vicon enters the new financial year
with over GBP11.5m orders in hand and a strong and executable
pipeline
-- Trading in the first months of the financial year has been in
line with our expectations
-- Over half of revenue expectations for the full year is underpinned
by orders in hand and a strong sales pipeline.
-- FY2024 will see the beginning of the commercialisation of our
new markerless technology
-- Modest expectations for new markerless technology expected in
FY24 ahead of contributing more material revenues in FY25
-- Following the successful acquisition of IVS in November 2023
the Group will continue to pursue M&A opportunities in known
markets possessing hard-to-replicate, deep Intellectual Property
in integrated smart sensing with attractive financial metrics
Commenting on the results Imogen Moorhouse, Chief Executive
said:
"I am delighted to report my first set of results as CEO of
Oxford Metrics. Two years into our five-year strategy, we are
reporting record revenue and adjusted PBT performance for FY23.
This result builds on from our strongest-ever first half as Vicon
executed against orders and continued demand for our smart sensing
technology continued, driven by positive uptake of our new system,
Valkyrie.
Our team this year has continued to innovate, manufacturing more
advanced camera systems than ever before. At our industry
conference Siggraph 2023, we showed the world our new markerless
technology. This technological advancement represents a pivotal
moment and is expected to drive growth once commercialised in
FY24.
We continue to pursue M&A opportunities to unlock growth and
new market opportunities. Post period end, we successfully
delivered on our promise of acquisition activity adding smart
manufacturing to our market-leading portfolio with Industrial
Vision Systems.
Vicon enters the new financial year with well over half of
revenue expectations underpinned by orders in hand and a strong
sales pipeline. With an energised team, a clear roadmap and
continued market demand, the Board looks forward to the new
financial year which is set to see further underlying growth in our
existing markets whilst laying the foundations for future growth
including the commercialisation of markerless technology."
For further information please contact :
+44 (0) 1865
Oxford Metrics 261860
Imogen Moorhouse, CEO
David Deacon, CFO
+44 (0)20 7260
Deutsche Numis 1000
Simon Willis / Hugo Rubinstein / Tejas Padalkar
+44 (0)20 3727
FTI Consulting 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(R) and an Emmy(R), 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. 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
Chairman's Statement
I am delighted to report that Oxford Metrics has delivered a
strong financial performance during 2023 reporting both record
revenue and Adjusted PBT results. Valkyrie, the Group's most
advanced motion capture system to date, launched in July 2022, has
continued to drive revenues and has been positively received and
widely adopted by new and existing customers alike.
Since the launch of the Group's current five-year plan, we have
continued to invest in the future of the business. Over the Summer,
at Siggraph, the premier conference for computer graphics and
interactive techniques, hosted in Los Angeles, we were able to
reveal the fruits of our innovation efforts over the past four
years to unveil our new markerless technology. Following successful
public demonstrations, this development represents a pivotal moment
for the business and, once commercialised, is expected to help
drive growth over the coming years.
Given the record performance in FY23, the addition of Industrial
Vision Systems (IVS) acquired in November 2023 and the
commercialisation of markerless, we remain on track to achieve our
five-year plan which aims to grow revenues 2.5x to GBP70m whilst
delivering an Adjusted PBT* margin of 15% by the end of the
FY26.
The Group reported revenues of GBP44.2m (FY22: GBP28.8m),
adjusting for the deferment of GBP3.5m of orders we were unable to
ship in September 2022; the underlying growth was strong
nonetheless at 26%. An Adjusted PBT* of GBP6.5m (FY22: GBP2.6m) is
reported, equivalent to a return on sales of 14.8% (FY22: 9.0%).
The order book for the year ahead stands at GBP11.5m (FY22:
GBP24.0m) which represents a more reasonable lead time for our
customers, following the easing of supply chain constraints, which
we will seek to maintain in the future.
The Group reports a statutory Profit after tax for all
operations of GBP5.7m (FY22: GBP46.9m) which last year included the
disposal of the Yotta business at a highly attractive valuation and
on a continuing basis a statutory Profit after tax of GBP5.7m
(FY22: GBP3.4m) is reported. The net cash position including Fixed
Term Deposits was GBP64.8m (FY22: GBP67.7m). After the continued
investment in the business and the deployment of cash for working
capital purposes during the year, the net cash position remains
significant and available for the execution of our M&A
plans.
The Board proposes a 10% increase to our final dividend to 2.75p
per share (FY22 Final Dividend: 2.50p) this year. We remain
committed to our progressive dividend policy and aims to achieve
average dividend cover of approximately two-times Adjusted PBT* per
share over time.
The success of our business depends on having engaged and
dedicated employees. This is reflected in our very high retention
rate, 89% globally, of which we are very proud. We understand the
importance of environmental and social sustainability within our
own operations and our supply chain, and we are taking steps to
reduce our impact on the environment from redesigning our products
and transforming our operational processes. As an important part of
our investment in the future of the business, we have published our
Environmental, Social and Governance initiatives on our
sustainability webpage oxfordmetrics.com/sustainability , and we
have published our Streamlined Energy and Carbon Reporting ('SECR')
data in this year's Annual Report. The Board is committed to taking
a holistic view of the business and we will continue to update and
review our sustainability webpage throughout 2024.
I would like to take the opportunity on behalf of the Board and
our colleagues to thank our former CEO, Nick Bolton, who
contributed an enormous amount. Nick successfully led the Group
over the last 18 years leaving it well positioned to capitalise on
the opportunities ahead of us today. We wish him all the very best
in his new role. Following a thorough and orderly CEO transition
process, we are delighted to have appointed Imogen Moorhouse, to
step up into CEO of Oxford Metrics to lead us forward.
We are very fortunate to have a natural successor; Imogen knows
our business inside and out, having spent 22 years at Vicon, the
last 12 of which as Vicon CEO. Through this time Imogen has grown
the business organically and via M&A and has been integral to
the development and implementation of the Group's five-year growth
plan.
We were also pleased to announce the acquisition of Industrial
Vision Systems. The acquisition is immediately earnings enhancing,
adding smart manufacturing to our portfolio and increasing our
presence in the Engineering market. Along with our new IVS
colleagues and energised team, I look forward to continuing to work
with Imogen as we move ahead to achieve our aims of creating a
Group focussed on expanding market opportunities in smart
sensing.
Lastly, I would like to thank everyone involved in supporting
and building our business - our customers, our shareholders, our
partners, and, of course, our brilliant team across the world who
responded magnificently, not least the production team who, this
year, manufactured more camera systems than ever before.
Roger Parry
Chair
CEO STATEMENT
After 12 years as operational CEO for Vicon I am delighted to
have taken on the Oxford Metrics CEO role at such an exciting time
for the Group.
Delivering the five-year growth plan for Oxford Metrics is my
key focus, having worked very closely with my predecessor, Nick
Bolton, to formulate the Group's next chapter. In year two of the
plan, 2023 has certainly been a year of powering up, delivering a
record performance from our Vicon division and unveiling yet more
innovation, making our markerless technology a reality at Siggraph.
Post year end, we acquired Industrial Vision Systems in November
and are encouraged by our start to the new financial year.
We enter year three of the plan in a strong position. Over FY23
I have grown the senior leadership team at Vicon with a series of
new appointments.
With an energised team and clear roadmap, we are well-positioned
to deliver on the target of growing revenues 2.5x whilst delivering
an Adjusted PBT* margin of 15% by the end of the plan. At the core
of the plan is the three elements of smart sensing: sense, analyse
and apply:
1. Extend our sensing capabilities
Firstly, we seek growth by extending our sensing methods through
R&D, M&A and fostering key supplier partnerships, which
broadens the applicability of our solutions and expands our
addressable market.
At Siggraph, we unveiled our markerless technology, receiving a
very positive market reaction. At the same time, we launched a
Pioneer Programme allowing customers and prospects to work with us
on executing product delivery to ensure we capture both the
technical, user experience, operational and commercial aspects of
the delivery in the right way.
With our post year end acquisition of IVS, we have added machine
vision techniques used in the growing smart manufacturing market,
an adjacent industry to Vicon, and one where there are clear
opportunities to expand its geographic footprint and grow its
IP-rich static technology offering with prospects to benefit from
Vicon's dynamic sensing. We're excited about the opportunity ahead
to extend into yet more applications and industries as inspection
automation becomes more mainstream and smart manufacturing becomes
the standard.
2. Enhance the analysis we can perform
Secondly, we seek to augment the analysis our customers can
undertake with our software, thus broadening the range of
applications to which our systems can be applied.
Vicon's new life sciences reporting tool, Nexus Insight, is a
good example of this. Nexus Insight simplifies reporting, making it
easier for customers to visualise, interpret, share, analyse and
compare their data. This new tool takes motion capture data,
turning it into clear, easy to understand, accessible reports.
3. Apply our IP by embedding in other companies' solutions
Finally, we aim to grow by seeing our deep technology
incorporated into other business' products and services - which
aims to expand our addressable market as we drive the integration
of our sensing and analysis IP to specific application domains.
Currently, the best example of our embedding opportunity is in
the Location-based Entertainment (LBE) market and in FY23 we saw
encouraging next phase rollouts by our partners Sandbox VR and
Immersive Gamebox. Sandbox VR recently announced their 45(th)
location while Immersive Gamebox have opened their 30(th) location
in the year with exciting news announced of their multi-million
pound agreement with Merlin entertainments across the UK, Europe,
the USA, and Australia. The multi-territory partnership is intended
to create immersive experiences that will engage and connect
players of all ages, using the Gamebox suite of IP partnerships
that include Paw Patrol, Ghostbusters, Netflix, and the Angry Birds
game.
In addition, there are opportunities for IVS' proprietary vision
modules to be embedded by providers into their solutions in smart
manufacturing process to ensure "right first time" products.
New markerless technology
Markerless motion capture enables 3D motion capture without the
need to wear motion capture suits or attach reflective markers,
active markers or inertial sensors. The technology uses the latest
machine learning and AI techniques to process video imagery to
create 3D visualisations. In a similar way to how Large Language
Models are used to drive AI Chatbots, we are building our own
proprietary Large Video Models to develop and improve the
markerless technology. We showcased our new markerless technology
platform in the summer showing the technique seamlessly working in
a six-participant real-time immersive VR experience with our LBE
partner Dreamscape.
In its nascent state, markerless technology is not yet as
accurate as existing marker-based systems so will be a
complementary solution. The markerless solution will therefore be
suited to situations where it is not practical or desirable to add
markers to the subject or where commercial imperatives mean
efficiency is key. We expect the markerless technology to have
immediate applicability in the LBE and Entertainment segments and,
over time, will become relevant in Life Sciences in clinical
situations as the technique is validated against marker-based data.
Markerless is a complementary capture technique to marker-based and
will be of value to most of Vicon's existing 10,000 global
customers, as well as expanding our TAM by appealing to those who
cannot use markers to adopt the technology.
Ultimately, the markerless product solution will incorporate
elements of cloud infrastructure and delivery, exploring the
opportunity for subscription and annual recurring revenue (ARR)
models alongside the traditional capital goods model.
M&A
During the year, we continued to actively pursue M&A
opportunities to complement the five-year plan. Our recent
acquisition of IVS in November 2023 fits into our five-year plan
and is a good strategic fit, serving as an example of the types of
targets we are seeking to acquire. IVS has deep Intellectual
Property in integrated smart sensing; has a position of strength in
its niche market; is culturally a good fit; has an attractive
financial profile and will be immediately earnings enhancing.
Oxford Metrics has a disciplined approach to M&A - we are
absolutely determined to find the right acquisitions, at the right
price, for the right reasons.
Our M&A pipeline continues to develop and evolve and
includes greater focus on certain market opportunities, for example
smart manufacturing is emerging as a strong adjacent technology
market with global growth potential.
Quadrants of Growth
OPERATIONAL REVIEW
KPI Revenue PBT Adjusted PBT*
FY23 FY22 FY23 FY22 FY23 FY22
--------- --------- -------- -------- ---------- ----------
Vicon GBP44.2m GBP28.8m GBP4.6m GBP2.7m GBP8.2m GBP5.4m
--------- --------- -------- -------- ---------- ----------
Plc - - GBP1.6m - (GBP1.7m) (GBP2.8m)
--------- --------- -------- -------- ---------- ----------
Group GBP44.2m GBP28.8m GBP6.2m GBP2.7m GBP6.5m GBP2.6m
--------- --------- -------- -------- ---------- ----------
Record revenues are reported of GBP44.2m (FY22: GBP28.8m)
representing an increase of 53.5% (52.4% on a constant currency
basis). Order intake for the full year was GBP31.7m (FY22:
GBP46.9m) reflecting a normalisation of customer buying behaviour
compared to last year in which customers were placing orders in
advance following the disruption caused by the pandemic and
subsequent supply chain challenges. As of 30(th) September 2023,
the order book stood at GBP11.5m (FY22: GBP24.0m) representing a
normalisation of customer buying patterns. Given the operational
benefits of having an order book, the business will seek to
maintain an order book broadly equivalent to a quarter's revenue in
the future.
Continued buoyant performance in our Entertainment segment,
which saw year on year revenue growth of 82% and accounts for 43%
of orders in hand. Cover Japan purchased a large number of Valkyrie
cameras for four motion capture stages to allow V-tubers to capture
and purchase content for their channels. Double Negative's
partnership with Dimension Studio continued with the purchase of an
In-Camera Visual Effects stage which is being shipped globally for
projects coming to a theatre or streaming service very soon. While
in the USA, PUBG Madison installed the first Valkyrie stage in that
territory.
Life Sciences, traditionally our cornerstone market, saw year on
year revenue growth of 40% and accounts for 29% of the orders in
hand. The Hospital Israelita Albert Einstein (HIAE), the largest
gait lab in Brazil, upgraded their system and in Italy the
University of Padova's Industrial Engineering in Sports Department
are using the new Valkyrie 8 for high speed analysis with the
Italian Paralympic team. Elsewhere, in Australia, Victoria
University continue to provide gold standard testing for FIFA's
research using the Valkyrie 16 and 26 systems, and in the US, the
University of Rochester Medical Centre have installed multiple
Valkyrie laboratories for spine and other biomechanical
research.
Engineering reported year on year revenue growth of 56% and
accounts for 22% of orders in hand. ITESM, a private university in
Monterrey, Mexico installed a Valkyrie system for drone tracking
whilst the University of Arizona also purchased Valkyrie 26 cameras
to track tiny 'crazyfly' drones. While the University of Manitoba
acquired a large Valkyrie system for both Unmanned Aerial Vehicle
(UAV) and ground robot tracking in an indoor agriculture research
facility.
LBE reported a slight revenue decline year on year of 5% and
accounts for 6% of orders in hand. Despite this, LBE remains an
attractive market and presents a clear growth opportunity going
forward, but for the time being remains sensitive to customer roll
out plans and consumer acceptance of this exciting application. Our
partner Sandbox VR recently announced their 45(th) location and
Immersive Gamebox opened their 30(th) location in the year with
exciting news announced of their multi-million pound and
multi-territory agreement with Merlin Entertainments, a family
entertainment company.
Overall, Entertainment represented the largest segment of
revenues but given strong performances in Life Sciences and
Engineering in the second half, it is likely that we can expect a
more even balance of revenues in the year ahead.
Included in the Gross Profit, the Product gross margin was 68.0%
(FY22: 70.5%). This was largely driven by more expensive components
as a consequence of the challenging supply chain constraints over
the past two years together with product mix. The supply chain
constraints have, for the most part, returned to normal so
replenishment of Inventory will be at lower cost. The overall cost
base increased during the year reflecting the investment set out in
our five-year plan, the resources are now largely all in place.
Given the above, Vicon reported an improved Adjusted PBT* of
GBP8.2m (FY22: GBP5.4m).
In addition to our markerless development outlined earlier, FY23
also saw the development and release of numerous software updates
that serve our existing markets including Tracker 4.0 in
Engineering, Shogun 1.09 and Shogun 1.10 in Entertainment, Nexus
2.15 and Nexus Insight in Life Sciences and Evoke 1.6 in the LBE
market. All these releases kept our solutions relevant, and at the
cutting edge, ensuring the best customer experience.
CURRENT TRADING AND OUTLOOK
With ongoing market demand, Vicon starts the new financial year
with an Order Book of GBP11.5m which, together with a growing sales
pipeline, provides the business with visibility on over a half of
expected revenues for the year ahead. The year ahead will also see
the start of the commercialisation of our markerless technology. In
this regard, revenue expectations for the year ahead from that
product are modest ahead of a more expected material contribution
in FY25.
In FY23 we saw decline in product gross margins arising from
supply chain cost pressures; the supply chain situation has now
normalised, and we expect to see recovery closer to historic
performance in FY24.
The cost base increased in FY23, reflecting the planned
investment to deliver the five-year plan. We feel the key resources
to deliver the plan are in place and will open a new dedicated
markerless facility in Oxford in FY24. More generally the cost base
is not immune to the current inflationary environment, so some
underlying increase is to be expected.
The Group remains in good financial health which includes a net
cash position of GBP64.8m. With these resources the Group can move
forward with confidence and in a strong position both to pursue
further M&A in line with the five-year plan and enhance
earnings per share.
The Board looks forward to the new financial year which is set
to see further underlying growth in our existing markets whilst
laying the foundations for future growth including the rollout of
markerless in Vicon.
Imogen Moorhouse
CEO
* Profit Before Tax before Group recharges adjusted for
share-based payments, amortisation and impairment of intangibles
arising on acquisition and additional Contemplas consideration
deemed remuneration.
FINANCIAL REVIEW
Income Statement
The Group reported revenue from continuing operations of
GBP44.2m (FY22: GBP28.8m) representing a headline increase of
53.5%. The year on year FX effects were modest: on a constant FX
basis revenues increased by 52.4%. From a geographical perspective,
our Asia Pacific region had a strong year driven by Entertainment
reporting 74.8% year on year growth, whilst Vicon USA, our largest
market in the year reported year on year growth of 61.0%.
Gross Profit margin declined to 65.0% (FY22: 67.5%), which
reflected the usage of higher cost components acquired during the
supply chain challenge of the last few years and product mix within
year. In real terms Gross Profit improved year on year by GBP9.3m
to GBP28.7m.
Reviewing the cost base within the Income Statement:
-- Sales, Support and Marketing costs increased by GBP1.6m which
was largely due to increased revenue generation activity, additional
marketing resources and commission.
-- Research & Development expensed through the Income Statement
was GBP6.5m (FY22: GBP3.5m). The continual investment and innovation
in product and services is necessary to maintain the Group's
competitive position; this included a number of the new products
released during the financial year. In addition, the markerless
project, described in the CEO review was expensed during the
year as research into the technology progressed toward a marketable
and capitalisable product in the future.
-- Administration expenses. Excluding the presentational effect
of the Yotta disposal, the underlying increase was GBP1.7m
from continuing operations which was due to augmentation of
back office and operational management together with performance
related payments.
Adjusted PBT* of GBP6.5m (FY22: GBP2.6m) has been determined
after adding back to the Statutory PBT GBP6.3m (FY22: GBP2.7m)
non-cash items such as amortisation and impairment of acquired
intangibles, share option charge and non-recurring items. A full
reconciliation is available in note 6.
Compared to the first half, second half profitability did
benefit both from an increased gross margin as a result of higher
revenues and from additional Interest received, however the
Adjusted PBT performance in the second half of GBP2.4m compared
with a first half performance of GBP4.1m. The imbalance was largely
caused by costs incurred or accrued in the second half that in
practice relate to the full year, such as higher marketing and
performance related incentives finalised at the end of the year.
Taking this effect into account underlying profitability in the
second half was similar to the first half.
Statement of Financial Position
Goodwill and intangibles
The overall balance was largely unchanged at GBP10.2m (FY22:
GBP10.1m) reflecting the addition of GBP2.1m (FY22: GBP3.4m) of
capitalised development in the year less amortisation and
impairment of development costs GBP1.7m (FY22: GBP1.4m) and the
amortisation and impairment of acquired intangibles of GBP0.3m
(FY22: GBP0.3m).
Property, plant and equipment
The value of fixed assets increased to GBP2.5m (FY22: GBP1.6m).
The movement arising due to investment of GBP1.5m (FY22: GBP0.6m)
in the year which included Leasehold Improvements for the new
Denver office, a variety of IT related equipment and a Dreamscape
pod. Depreciation charge for the year of GBP 0. 6m (FY22:
GBP0.4m).
Right of use assets (IFRS16)
The value of Right of Use assets increased to GBP3.1m (FY22:
GBP1.4m) during the year which reflected the commencement of a new
lease for our US operations in Denver and a rent review of at our
Oxford facility.
Investments
The investment of GBP0.2m (FY22: GBP0.2m) relates to a minority
interest in Trensl Inc. which provides training VR solutions for
the military and healthcare (rehabilitation). The investment comes
back-to-back with an exclusive supply agreement to provide all
systems.
Inventories
The inventory position at the end of the financial year was
GBP7.2m (FY22: GBP4.5m). Given the supply chain situation over the
past few years, the Group decided to deploy cash during the year to
increase inventory in order to hedge against any further
disruption. The supply chain has for the most part normalised, so
inventory is expected to return to a lower level in the year
ahead.
Trade and other receivables
At the year-end Trade and other receivables were GBP9.9m (FY22:
GBP7.4m). The net overall increase is due to higher Vicon Trade
receivables GBP7.6m (FY22: GBP5.3m), which reflected the pattern of
trading in FY23 and Accrued interest GBP0.6m (FY22: GBP0.3m).
Current liabilities
At the year-end, Trade and other payables were GBP11.3m (FY22:
GBP11.3m). Whilst there was no change overall trade payables
decreased at the year-end to GBP 3.8m (FY22: GBP4.0m), accruals
were higher at GBP3. 5m (FY22: GBP1.9m) and Vicon support contract
liabilities were lower at GBP3. 7m (FY22: GBP5.1m) due in part to
exceptional level of customer deposits last year.
The bank overdraft of GBP1.2m (FY22: GBP0.0m) relates to a
subsidiary current account where there is technically no legal
right of set-off, we are therefore required to present this balance
separately.
The lease liabilities balance reported at GBP0.7m (FY22:
GBP0.4m) represents the value of lease payments due within one year
relating to right of use assets.
Non-current liabilities
The GBP0.2m decrease in other liabilities are due to Vicon
Support contract liabilities.
The lease liabilities balance reported of GBP2.5m (FY22:
GBP1.1m) represents the value of lease payments due greater than
one year relating to right of use assets which has increased due to
changes described in Right of Use assets.
Statement of cashflows
The Group finished the year with Net cash of GBP64.8m (FY22:
GBP67.7m) including Fixed Term deposits of GBP42.0m (FY22:
GBP55.0m). The amount on fixed term deposit was reduced at year-end
in readiness for the acquisition of IVS post yearend.
Cash generated by operating activities was GBP3.2m (FY22:
GBP3.5m).
The deployment of this cash included continued investment in
development giving rise to a purchase of intangibles of GBP2.1m
(FY22: GBP3.5m), payment of dividends of GBP3.2m (FY22: GBP2.5m)
and the aforementioned increase in Inventory.
Surplus cash not required for the day to day working capital
needs of the business is on a variety of 3-12 month bank deposits
with NatWest and Lloyds Bank. Interest received in cash for the
year was GBP1.2m (FY22: GBP0.0m).
Tax
The Group tax charge this year is GBP0.6m (FY22: Credit
GBP0.7m). The tax credit in the prior year arose due to various
deferred tax adjustments including but not exclusively Research
& Development tax credits which continues to have a beneficial
effect on the level of corporation tax payable in the UK.
The Group has a net deferred tax liability of GBP1.1m (FY22:
GBP0.9m).
David Deacon
CFO
* Profit Before Tax before Group recharges adjusted for
share-based payments, amortisation and impairment of intangibles
arising on acquisition and additional Contemplas consideration
deemed remuneration and exceptional costs.
consolidated INCOME statement
for the year ended 30 september 2023
All amounts relate to continuing operations 2023 2022
Note GBP'000 GBP'000
------------------------------------------------------- ---- -------- --------
Revenue 3 44,240 28,816
Cost of sales (15,497) (9,352)
------------------------------------------------------- ---- -------- --------
Gross profit 28,743 19,464
Sales, support and marketing costs (8,202) (6,608)
Research and development costs (6,543) (3,547)
Administrative expenses (9,146) (6,814)
Operating profit 4,852 2,495
Finance income 1,561 305
Finance expense (163) (67)
Profit before taxation 3,5 6,250 2,733
Taxation 7 (594) 665
------------------------------------------------------- ---- -------- --------
Profit from continuing operations 5,656 3,398
------------------------------------------------------- ---- -------- --------
Profit from discontinued operations net of tax - 43,519
------------------------------------------------------- ---- -------- --------
Profit attributable to owners of the parent during
the year 5,656 46,917
------------------------------------------------------- ---- -------- --------
Earnings per share for profit on continuing operations
attributable to owners of the parent during the
year
Basic earnings per ordinary share (pence) 8 4.35p 2.66p
Diluted earnings per ordinary share (pence) 8 4.32p 2.62p
Earnings per share for profit on total operations
attributable to owners of the parent during the
year
Basic earnings per ordinary share (pence) 8 4.35p 36.70p
Diluted earnings per ordinary share (pence) 8 4.32p 36.11p
COnsolidated statement of
comprehensive income FOR THE YEAR
ED 30 sEPTEMBER 2023
Group Group
2023 2022
GBP'000 GBP'000
----------------------------------------------------- ------- -------
Net profit for the year 5,656 46,917
------------------------------------------------------ ------- -------
Other comprehensive expense
Items that will or may be reclassified to profit
or loss
Exchange differences on retranslation of overseas
subsidiaries (110) 953
Total other comprehensive expense (110) 953
------------------------------------------------------ ------- -------
Total comprehensive income for the year attributable
to owners of the parent 5,546 47,870
------------------------------------------------------ ------- -------
consolidated statement of financial position AS AT 30 september
2023
Restated
COMPANY NUMBER: 03998880 Group Group
2023 2022
GBP'000 GBP'000
-------------------------------------- -------- --------
Non-current assets
Goodwill and intangible assets 10,203 10,081
Property, plant and equipment 2,480 1,638
Right of use assets 3,135 1,367
Financial asset - investments 236 236
Deferred tax asset - -
-------------------------------------- -------- --------
16,054 13,322
Current assets
Inventories 7,240 4,462
Trade and other receivables 9,907 7,397
Current tax receivable - 254
Fixed term deposits 42,000 55,000
Cash and cash equivalents 23,965 12,679
-------------------------------------- -------- --------
83,112 79,792
Current liabilities
Trade and other payables (11,304) (11,287)
Current tax payable (275) -
Bank overdraft (1,174) -
Lease liabilities (724) (440)
(13,477) (11,727)
Net current assets 69,635 68,065
-------------------------------------- -------- --------
Total assets less current liabilities 85,689 81,387
-------------------------------------- -------- --------
Non-current liabilities
Other liabilities (820) (965)
Lease liabilities (2,498) (1,064)
Provisions (48) (40)
Deferred tax liability (1,118) (932)
-------------------------------------- -------- --------
(4,484) (3,001)
-------------------------------------- -------- --------
Net assets 81,205 78,386
-------------------------------------- -------- --------
Capital and reserves attributable
to
owners of the parent
-------------------------------------- -------- --------
Share capital 326 324
Shares to be issued 65 65
Share premium account 19,487 19,094
Retained earnings 60,451 57,917
Foreign currency translation reserve 876 986
-------------------------------------- -------- --------
Total equity shareholders' funds 81,205 78,386
-------------------------------------- -------- --------
consolidated STATEMENT of CASHFLOWS
For the YEAR ended 30 september 2023
Group Group
2023 2022
GBP'000 GBP'000
----------------------------------------- -------- --------
Cash flows from operating activities
Profit for the year 5,656 46,917
Income tax expense/(credit) 594 (934)
Finance income (1,561) (305)
Finance expense 163 114
Dividends receivable - -
Depreciation and amortisation 2,898 2,555
Impairment of intangible assets 217 -
Profit on sale of property, plant
and equipment (8) -
Profit on disposal of discontinued
operation - (43,578)
Share-based payments 59 139
Increase in inventories (2,799) (1,919)
(Increase)/decrease in receivables (2,274) (3,664)
Increase/(decrease) in payables 205 4,187
Cash generated from operating activities 3,150 3,512
Tax received/(paid) 209 (248)
----------------------------------------- -------- --------
Net cash from operating activities 3,359 3,264
Cash flows from investing activities
Purchase of property, plant and
equipment (1,499) (588)
Purchase of intangible assets (2,127) (3,464)
Disposal of discontinued operation,
net of cash disposed of - 47,141
Proceeds on disposal of property,
plant and equipment 8 37
Cash placed on fixed term deposits (67,000) (65,000)
Fixed term deposits maturing 80,000 10,000
Interest received 1,219 28
-----------------------------------------
Net cash generated from/(used in)
investing activities 10,601 (11,846)
Cash flows from financing activities
Principal paid on lease liabilities (579) (460)
Interest paid (4) -
Interest paid on lease liabilities (159) (112)
Issue of ordinary shares 370 583
Equity dividends paid (3,246) (2,542)
----------------------------------------- -------- --------
Net cash used in financing activities (3,618) (2,531)
----------------------------------------- -------- --------
Net increase/(decrease) in cash
and cash equivalents 10,342 (11,113)
Cash and cash equivalents at beginning
of the period 12,679 22,957
Exchange (loss)/gain on cash and
cash equivalents (230) 835
Cash and cash equivalents at end
of the period 22,791 12,679
----------------------------------------- -------- --------
Cash and cash equivalents included
in current assets 23,965 12,679
Bank overdraft included in current
liabilities (1,174) -
----------------------------------------- -------- --------
22,791 12,679
----------------------------------------- -------- --------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEARED 30
SEPTEMBER 2023
Foreign
Share currency
Share Shares premium Retained translation
Group capital to be issued account earnings reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------- -------- ------------- -------- --------- ------------ -------
Balance as at 30 September
2021 317 65 18,483 13,538 33 32,436
Net profit for the year - - - 46,917 - 46,917
Exchange differences on
retranslation of overseas
subsidiaries - - - - 953 953
Transactions with owners:
Tax recognised directly
in equity in relation to
employee share option schemes - - - (99) - (99)
Dividends - - - (2,542) - (2,542)
Issue of share capital 7 - 611 - - 618
Share based payment charge - - - 103 - 103
Balance as at 30 September
2022 324 65 19,094 57,917 986 78,386
Net profit for the year - - - 5,656 - 5,656
Exchange differences on
retranslation of overseas
subsidiaries - - - - (110) (110)
Transactions with owners:
Tax recognised directly
in equity in relation to
employee share option schemes - - - 90 - 90
Dividends - - - (3,246) - (3,246)
Issue of share capital 2 - 393 - - 395
Share based payment charge - - - 34 - 34
Balance as at 30 September
2023 326 65 19,487 60,451 876 81,205
------------------------------- -------- ------------- -------- --------- ------------ -------
1. B asis of preparation of the financial information
The financial information in this preliminary announcement has
been prepared in accordance with the recognition and measurement
criteria of IFRS. This announcement does not itself contain
sufficient information to comply with IFRS. The Company expects to
publish full financial statements that comply with IFRS on 5
December 2023.
The preparation of financial statements in conformity with IFRS
requires the use of certain critical accounting estimates. It also
requires management to exercise judgement in the process of
applying the Group's accounting policies which affect the reported
amount of assets and liabilities at the statement of financial
position date and the reported amounts of revenues and expenses
during the reported period. Although the estimates are based on
management's best knowledge of the amount, event or actions, actual
results may ultimately differ from those estimates.
The financial information set out in this preliminary
announcement does not constitute statutory accounts as defined in
Section 434 of the Companies Act 2006 for the years ended 30
September 2023 and 30 September 2022 but is derived from those
accounts. The statutory accounts for the year ended 30 September
2022 have been delivered to the Registrar of Companies and those
for the year ended 30 September 2023 will be delivered following
the Company's annual general meeting. The auditors have reported on
those accounts: their report was unqualified, did not contain
references to any matters to which the auditors drew attention by
way of emphasis and did not contain a statement under Section 498
of the Companies Act 2006 for the year ended 30 September 2023 or
30 September 2022.
2. Basis of consolidation
The consolidated financial information incorporates the results
of the Company and all of its subsidiary undertakings drawn up to
30 September 2023.
3. Revenue from contracts with customers
All revenue is from continuing operations.
2023 2022
Revenue GBP'000 GBP'000
---------------------- ------- -------
Continuing operations
Vicon UK 25,545 17,338
Vicon USA 18,695 11,478
---------------------- ------- -------
44,240 28,816
---------------------- ------- -------
Timing of the transfer
of goods Total
and services Vicon UK Vicon USA
2023 GBP'000 GBP'000 GBP'000
------------------------ ---------- ----------- -------
Point in time 23,714 16,032 39,746
Over time 1,831 2,663 4,494
------------------------ ---------- ----------- -------
Total 25,545 18,695 44,240
------------------------ ---------- ----------- -------
Contract Counterparties
------------------------ ---------- ----------- -------
Direct to consumers 5,341 17,673 23,014
Third party distributor 20,204 1,022 21,226
------------------------ ---------- ----------- -------
Total 25,545 18,695 44,240
------------------------ ---------- ----------- -------
By destination
------------------------ ---------- ----------- -------
UK 3,176 - 3,176
Germany 1,973 - 1,973
Italy 633 - 633
Netherlands 646 - 646
France 155 - 155
Poland 178 - 178
Spain 88 - 88
Ireland 565 - 565
Rest of Europe 1,087 - 1,087
------------------------ ---------- ----------- -------
Total Europe 5,325 - 5,325
------------------------ ---------- ----------- -------
Canada 9 1,878 1,887
USA 12 16,533 16,545
Total North America 21 18,411 18,432
------------------------ ---------- ----------- -------
Australia 939 13 952
Hong Kong 2,517 - 2,517
Japan 5,680 - 5,680
South Korea 2,835 - 2,835
China 3,957 - 3,957
India 574 - 574
Rest of Asia Pacific 397 - 397
------------------------ ---------- ----------- -------
Total Asia Pacific 16,899 13 16,912
------------------------ ---------- ----------- -------
Other 124 271 395
------------------------ ---------- ----------- -------
Total 25,545 18,695 44,240
------------------------ ---------- ----------- -------
Timing of the transfer
of goods Total
and services Vicon UK Vicon USA
2022 GBP'000 GBP'000 GBP'000
---------- ----------- -------
Point in time 15,494 9,175 24,669
Over time 1,844 2,303 4,147
------------------------ ---------- ----------- -------
Total 17,338 11,478 28,816
------------------------ ---------- ----------- -------
Contract Counterparties
------------------------ ---------- ----------- -------
Direct to consumers 4,256 10,529 14,785
Third party distributor 13,082 949 14,031
------------------------ ---------- ----------- -------
Total 17,338 11,478 28,816
------------------------ ---------- ----------- -------
By destination
------------------------ ---------- ----------- -------
UK 2,396 - 2,396
Germany 2,156 - 2,156
Italy 304 - 304
Netherlands 441 - 441
France 473 - 473
Poland 332 - 332
Spain 260 - 260
Rest of Europe 1,022 - 1,022
------------------------ ---------- ----------- -------
Total Europe 4,988 - 4,988
------------------------ ---------- ----------- -------
Canada 39 1,008 1,047
USA 24 10,197 10,221
Rest of North America - 177 177
------------------------ ---------- ----------- -------
Total North America 63 11,382 11,445
------------------------ ---------- ----------- -------
Australia 797 - 797
Hong Kong 2,539 - 2,539
Japan 2,334 - 2,334
South Korea 1,314 - 1,314
China 2,158 - 2,158
Rest of Asia Pacific 532 - 532
------------------------ ---------- ----------- -------
Total Asia Pacific 9,674 - 9,674
------------------------ ---------- ----------- -------
Other 217 96 313
------------------------ ---------- ----------- -------
Total 17,338 11,478 28,816
------------------------ ---------- ----------- -------
2023 2022
GBP'000 GBP'000
------------------------------------- --------- ---------
Vicon revenue by market - Continuing
operations
Engineering 8,708 5,581
Entertainment 18,193 10,023
Life sciences 14,841 10,589
Location based entertainment 2,498 2,623
Total 44,240 28,816
------------------------------------- --------- ---------
Group revenue by
type
Continuing operations
Sale of hardware 36,158 22,700
Sale of software 1,974 1,970
Rendering of services 5,209 3,009
SaaS - 193
Support 899 944
----------------------- ------ ------
Total 44,240 28,816
----------------------- ------ ------
Group revenue by origin
Continuing operations
UK 23,690 16,010
Europe 1,852 1,312
North America 18,695 11,478
Asia Pacific 3 16
------------------------ ------ ------
Total 44,240 28,816
------------------------ ------ ------
Contract balances
2023
Contract assets Contract liabilities
GBP'000 GBP'000
---------------------------------------------- --------------- --------------------
At 1 October 2022 - 6,043
Amounts included in contract liabilities
recognised as revenue during the period - (18,400)
Cash received in advance of performance
and not recognised as revenue during the
period - 17,138
Foreign exchange differences - (253)
At 30 September 2023 - 4,528
---------------------------------------------- --------------- --------------------
2022
Contract assets Contract liabilities
GBP'000 GBP'000
---------------------------------------------- --------------- --------------------
At 1 October 2021 261 7,474
Transfers from contract assets to trade
receivables (520) -
Amounts included in contract liabilities
recognised as revenue during the period - (23,176)
Excess of revenue recognised over cash during
the period 770 -
Cash received in advance of performance
and not recognised as revenue during the
period - 26,670
Disposal (511) (5,325)
Foreign exchange differences - 400
At 30 September 2022 - 6,043
---------------------------------------------- --------------- --------------------
Contract assets and contract liabilities are included within
trade and other assets and trade and other payables and other
liabilities respectively on the face of the statement of financial
position. They arise primarily from the Group's support contracts
which are delivered over time and where the cumulative payments
received from customers at each balance sheet date do not
necessarily equal the amount of revenue recognised on the
contract.
Remaining performance obligations
The majority of the Group's contracts are for the delivery of
goods and services within the next 12 months. However, some
software and support contracts are for a period greater than 12
months and the amount of revenue that will be recognised in future
periods on these contracts is as follows:
At 30 September 2029 and
2023 2024 2025 2026 2027 2028 beyond
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------ ------- ------- ------- ------- ------- --------
Support contracts 3,707 493 199 86 39 4
------------------ ------- ------- ------- ------- ------- --------
At 30 September 2028 and
2022 2023 2024 2025 2026 2027 beyond
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------ ------- ------- ------- ------- ------- --------
Support contracts 3,143 595 239 75 44 11
------------------ ------- ------- ------- ------- ------- --------
4. Segmental analysis
Segment information is presented in the financial statements in
respect of the Group's business segments, which are reported to the
Chief Operating Decision Maker (CODM). The Group has identified the
Board of Directors of Oxford Metrics plc ("the Board") as the CODM.
The business segment reporting reflects the Group's management and
internal reporting structure.
The Group comprises the following business segments:
-- Vicon Group: This is the development, production and sale of
computer software and equipment for the engineering, entertainment
and life science markets; and
Other unallocated costs represent head office expenses not
recharged to subsidiary companies.
Inter segment transfers are priced along the same lines as sales
to external customers, with an appropriate discount being applied
to encourage use of Group resources. This policy was applied
consistently throughout the current and prior year. There were no
significant inter segment transfers during the current or prior
year.
Intra segment sales between Vicon UK and Vicon USA are
eliminated prior to management and internal reporting, and hence
are not shown separately in the analysis below. The total intra
segment sales between Vicon UK and Vicon USA in the year ended 30
September 2023 are GBP10,376,000 (2022: GBP5,718,000).
Segment assets consist primarily of property, plant and
equipment, intangible assets, inventories and trade and other
receivables. Unallocated assets comprise deferred taxation,
investments and cash and cash equivalents.
2023 2022
Adjusted Adjusted
profit/(loss) Profit/(loss) profit/(loss) Profit/(loss)
before Adjusting Group before before Adjusting Group before
tax items recharges tax tax items recharges tax
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------ ------------- --------- ---------- ------------- ------------- --------- ---------- -------------
Continuing
operations
Vicon UK 1,692 (287) 2,852 4,257 1,590 (434) 1,426 2,582
Vicon USA 6,542 - (6,162) 380 3,848 - (3,712) 136
------------ ------------- --------- ---------- ------------- ------------- --------- ---------- -------------
Vicon Group 8,234 (287) (3,310) 4,637 5,438 (434) (2,286) 2,718
------------ ------------- --------- ---------- ------------- ------------- --------- ---------- -------------
Unallocated (1,689) (8) 3,310 1,613 (2,840) (86) 2,941 15
Total
continuing
operations 6,545 (295) - 6,250 2,598 (520) 655 2,733
------------ ------------- --------- ---------- ------------- ------------- --------- ---------- -------------
Adjusted profit before tax is detailed in note 6.
Segment depreciation and amortisation
2023 2022
GBP'000 GBP'000
---------------------------- ------------------- ------------------
Continuing operations
Vicon UK 2,742 1,810
Vicon USA 328 203
---------------------------- -------------------
Vicon Group 3,070 2,013
---------------------------- -------------------
Unallocated 45 59
---------------------------- -------------------
Total continuing operations 3,115 2,072
---------------------------- -------------------
Discontinued operations
Yotta - 483
Oxford Metrics Group 3,115 2,555
---------------------------- ------------------- ------------------
Non-current Additions to Carrying amount Carrying amount
assets non-current assets of segment assets of segment liabilities
2023 2022 2023 2022 2023 2022 2023 2022
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------- -------- -------- ---------- --------- --------- --------- ------------ -----------
Vicon UK 12,763 11,635 3,885 3,304 28,161 29,566 (10,717) (9,817)
Vicon USA 3,010 1,416 1,998 566 13,107 6,445 (6,116) (4,476)
---------------- -------- -------- ---------- --------- --------- --------- ------------ -----------
Vicon Group 15,773 13,051 5,883 3,870 41,268 36,011 (16,833) (14,293)
---------------- -------- -------- ---------- --------- --------- --------- ------------ -----------
Yotta Group - - - 661 - - - -
Unallocated 281 271 55 8 63,950 63,155 (1,128) (435)
OMG Life Group* - - - - (6,052) (6,052) - -
Oxford Metrics
Group 16,054 13,322 5,938 4,539 99,166 93,114 (17,961) (14,728)
---------------- -------- -------- ---------- --------- --------- --------- ------------ -----------
* The negative balance within segment assets represents a cash
overdraft which is part of the Group's cash offset facility.
5. Profit for the year
The profit for the year is stated after charging /
(crediting):
2023 2022
GBP'000 GBP'000
------------------------------------------------------ ------- -------
Amortisation of right of use assets 523 496
Depreciation of property, plant and equipment - owned 639 424
Amortisation of intellectual property 274 272
Amortisation of development costs 1,462 1,363
Impairment of development costs 217 -
Share based payments - equity settled 25 36
Share option charges 34 103
Foreign exchange (gain)/loss (108) 487
------------------------------------------------------ ------- -------
6. Reconciliation of adjusted profit before tax
The adjusted profit before tax is considered by the Board to
more accurately reflect the underlying operating performance of the
business on a go-forward basis and complements the statutory
measure as reported in the Consolidated Income Statement.
The reconciliation of profit before tax to adjusted profit
provided below includes items that are:
-- non-recurring in nature, such as redundancy costs incurred
from time to time, acquisition costs and results of the Group's
equity accounted associate, which are not core to operations
or future operating performance.
-- non-cash moving items which arise from the accounting treatment
of share based payments and the amortisation of acquired intangibles
which affect neither future operating performance nor cash generation.
The above definition has been consistently applied historically
and is the measure by which the market generally judges PBT
performance.
2023 2022
GBP'000 GBP'000
---------------------------------------------------- ------- -------
Profit before tax - continuing operations 6,250 2,733
Share option charges 34 103
Amortisation of intangibles arising on acquisition 261 261
Costs associated with the acquisition of Contemplas - 156
Reapportion Group overheads - (655)
Adjusted profit before tax - continuing operations 6,545 2,598
---------------------------------------------------- ------- -------
Adjusted earnings per share for
profit on continuing operations
attributable to owners of the parent
during the year
Basic earnings per share (pence) 4.57p 2.55p
Diluted earnings per share (pence) 4.54p 2.51p
The adjusted profit before tax for the Vicon business segment is
shown in detail below;
Vicon Group
2023 2022
Continuing operations GBP'000 GBP'000
---------------------------------------------------- ------- -------
Profit before tax 4,637 2,718
Share option charges 26 17
Amortisation of intangibles arising on acquisition 261 261
Costs associated with the acquisition of Contemplas - 156
Reapportion Group overheads 3,310 2,286
Adjusted profit before tax 8,234 5,438
---------------------------------------------------- ------- -------
The Group overheads in the tables above include head office
expenses recharged to subsidiaries.
7. Taxation
The tax is based on the profit for the year and represents:
2023 2022
GBP'000 GBP'000
------------------------------------------------------ ------- -------
United Kingdom corporation tax at 22.0% (2022: 19.0%) 218 462
Overseas taxation 143 69
Adjustments in respect of prior year 15 (79)
------------------------------------------------------ ------- -------
Current taxation 376 452
Deferred taxation 218 (1,386)
------------------------------------------------------ ------- -------
Total taxation expense/(credit) 594 (934)
------------------------------------------------------ ------- -------
UK corporation tax has been calculated at 19.0% up to 31 March
2023 and 25.0% from 1 April 2023. This gives rise to a blended tax
rate of 22.0% for the year.
Continuing and discontinued operations:
2023 2022
GBP'000 GBP'000
--------------------------------------------------------- ------- -------
Income tax expense/(credit) from continuing operations 594 (665)
Income tax credit from discontinued operations excluding
gain on sale (note 11) - (269)
Total tax (credit)/ expense 594 (934)
--------------------------------------------------------- ------- -------
At 30 September 2023, the Group had an undiscounted deferred tax
asset of GBP1,618,000 (2022: GBP1,588,000). The asset comprises
principally short term timing differences, future tax relief
available on the exercise of outstanding employee share options in
Oxford Metrics plc and unrelieved trading losses carried forward
for which recoverability is reasonably certain.
Deferred tax assets and liabilities have been measured at an
effective rate of 25% in both the UK and USA (2022: 25%).
The tax assessed for the year is lower than the blended rate of
corporation tax in the UK of 22.0% (2022: lower than the standard
rate of 19%).
The differences are explained as follows:
2023 2022
GBP'000 GBP'000
--------------------------------------------------- ------- -------
Profit for the year 5,656 46,917
Income tax expense/(credit) including discontinued
operations 594 (934)
--------------------------------------------------- ------- -------
Profit on ordinary activities before tax 6,250 45,983
--------------------------------------------------- ------- -------
Expected tax income based on the blended rate of
corporation tax in the UK of 22.0% (2022: 19.0%) 1,375 8,737
Effect of:
Expenses not deductible for tax purposes 82 68
Book gain on disposal in excess of tax gain - (8,280)
Unrelieved current year losses 170 (335)
Utilisation of losses brought forward (21) -
Adjustments to tax charge in respect of prior year
current tax 15 (79)
Adjustments to tax charge in respect of prior year
deferred tax (309) (383)
Higher rates on overseas taxation 44 29
Research and development tax credit (682) (467)
Effect of tax rate change (80) (224)
--------------------------------------------------- ------- -------
Total tax expense/(credit) 594 (934)
--------------------------------------------------- ------- -------
During the prior year the UK Government substantively enacted an
increase in the corporation tax rate to 25.0% effective from 1
April 2023. The deferred tax asset and liability as at 30 September
2023 has been calculated based on the rate of 25.0% unless the
asset/liability is expected to be realised or settled before the
rate increase in which case the rate of 19.0% has been used.
8. Earnings per share
2023 2022
Weighted Weighted
average average
number Per share number of Per share
Earnings of shares amount Earnings shares amount
GBP'000 '000 pence GBP'000 '000 pence
Continuing operations
Basic earnings per share
Earnings attributable to
ordinary shareholders 5,656 130,162 4.35 3,398 127,840 2.66
Dilutive effect of employee
share options - 904 (0.03) - 2,081 (0.04)
Diluted earnings per share 5,656 131,066 4.32 3,398 129,921 2.62
---------------------------- -------- ---------- --------- -------- ---------- ---------
Discontinued operations
Basic earnings per share
Earnings attributable to
ordinary shareholders - 130,162 - 43,519 127,840 34.04
Dilutive effect of employee
share options - 904 - - 2,081 (0.54)
Diluted earnings per share - 131,066 - 43,519 129,921 33.50
---------------------------- -------- ---------- --------- -------- ---------- ---------
Total operations
Basic earnings per share
Earnings attributable to
ordinary shareholders 5,656 130,162 4.35 46,917 127,840 36.70
Dilutive effect of employee
share options - 904 (0.03) - 2,081 (0.59)
---------------------------- -------- ---------- --------- -------- ---------- ---------
Diluted earnings per share 5,656 131,066 4.32 46,917 129,921 36.11
---------------------------- -------- ---------- --------- -------- ---------- ---------
Basic earnings per share is calculated by dividing the profit
attributable to equity holders of the Company by the weighted
average number of ordinary shares in issue during the year.
Diluted earnings per share is calculated by adjusting the
weighted average number of ordinary shares outstanding to assume
conversion of all dilutive potential ordinary shares (share
options). For share options a calculation is done to determine the
number of shares that could have been acquired at fair value
(determined as the average annual market share price of the
Company's shares) based on the monetary value of the subscriptions
rights and outstanding share based payment charges attached to
outstanding share options. The number of shares calculated as above
is compared with the number of shares that would have been issued
assuming the exercise price of the share options.
9. Dividends
2023 2022
Equity - ordinary GBP'000 GBP'000
----------------------------------------------- ------- -------
Final 2021 paid in 2022 (2.00 pence per share) - 2,542
Final 2022 paid in 2023 (2.50 pence per share) 3,246 -
3,246 2,542
----------------------------------------------- ------- -------
The directors are proposing a final dividend in respect of the
financial year ended 30 September 2023 of 2.75 pence per share
(2022: 2.50 pence per share) which will absorb an estimated
GBP3,587,000 of shareholders' funds. This dividend will be paid on
14 February 2024 to shareholders who are on the register of members
at close of business on 15 December 2023 subject to approval at the
AGM. These dividends have not been accrued in these financial
statements.
10. Prior year restatement
The Group presented its deferred tax assets and liabilities
arising in the same tax jurisdictions on a gross basis in prior
periods rather than netting them off in accordance with IAS 12. The
incorrect treatment resulted in a presentational error whereby both
the Group deferred tax asset and liability were overstated by
GBP1,588,000 at 30 September 2022.
Impact on financial statements
Group
2022
Deferred tax asset GBP'000
---------------------------------------- -------
Deferred tax asset originally presented 1,588
Net of to correct presentation (1,588)
Deferred tax asset as restated -
---------------------------------------- -------
Group
2022
Deferred tax liability GBP'000
-------------------------------------------- -------
Deferred tax liability originally presented (2,520)
Net of to correct presentation 1,588
Deferred tax liability as restated (932)
-------------------------------------------- -------
There is a corresponding error at the beginning of the prior
period - the error and its correction at 1 October 2021 are set out
below:
Group
2021
Deferred tax asset GBP'000
---------------------------------------- -------
Deferred tax asset originally presented 1,877
Net of to correct presentation (1,877)
Deferred tax asset as restated -
---------------------------------------- -------
Group
2021
Deferred tax liability GBP'000
-------------------------------------------- -------
Deferred tax liability originally presented (3,058)
Net of to correct presentation 1,877
Deferred tax liability as restated (1,181)
-------------------------------------------- -------
11. Copies of announcement
Copies of this announcement will be available from the Company's
registered office at 6 Oxford Pioneer Park, Yarnton, Oxfordshire,
OX5 1QU and from the Company's website: www.oxfordmetrics.com .
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END
FR MZMGZGKZGFZG
(END) Dow Jones Newswires
December 05, 2023 02:00 ET (07:00 GMT)
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