Wednesday, 6 December 2017
Oxford Metrics plc
("Oxford Metrics" or the "Group")
Preliminary Results for the financial year ended 30 September 2017
Oxford Metrics (OMG plc LSE: OMG), the international software company servicing government, life sciences, entertainment and engineering markets, announces preliminary results for the financial year ended 30 September 2017.
Financial Key Points
· Group Revenue from continuing operations increased 10.7% to £29.2m (FY16: £26.3m), up 7.6% at constant currency.
o Yotta revenue up 12.3% to £6.6m (FY16: £5.9m). Adjusted PBT* £0.7m (FY16: £1.4m) reflecting planned investment.
o Vicon revenue up 10.3% to £22.5m (FY16: £20.4m). Adjusted PBT* £5.6m (FY16: £5.9m) reflecting lower Grant Income.
· Group Adjusted PBT* of £3.9m (FY16: £5.1m), ahead of market expectations following planned investment in Yotta.
· Strong net cash balance at 30 September 2017 of £9.8m (FY16: £8.3m), of which £0.6m is disclosed in Assets held for sale.
· Proposed dividend increased by 20% to 1.20p per share (FY16:1.00p), in line with our stated progressive dividend policy and dividend cover objective.
Operational Key Points
· Strategy for Yotta: develop cloud-based software products, expand internationally and grow recurring revenues.
o Successful launch of Alloy, the cloud-based asset management platform for the digital future.
o Secured 6 new Alloy licences in September - 3 in Australia and 3 in the UK.
o Expansion of international channel presence in FY17 to 5 distributors (FY16: 2) which now enables Yotta to reach 23 countries (FY16: 4).
o 76 (FY16: 63) customers now use Horizons worldwide, up 20%, with a quarter of customers located outside the UK.
o Process ongoing to dispose of the surveying business. Completion expected in the first half of FY18.
· Strategy for Vicon: strengthen and protect a profitable market leader.
o Organic expansion with the launch of three new products:
§ Vicon Vertex, new measurement system tapping into Virtual Reality applications.
§ Cara Lite, new lighter weight head-mounted facial capture system.
§ Vicon Shōgun, new software for the film and video game market.
o Acquisition of IMeasureU which broadens addressable market and provides opportunity to build meaningful SaaS-based recurring revenue stream.
o Vicon's motion measurement products used on films including Kingsman: Golden Circle and Blade Runner 2049.
Strategy Progress
· Five-year strategic growth plan launched in December 2016 with two key financial objectives: by 2021, we aim to double Group profit and to triple recurring revenues.
· FY17: Year One marked the start of the investment phase and progress has been strong so far:
o Annualised Recurring Revenues (ARR) strengthened by 22% to £4.9m at 30 September 2017 (FY16: £4.0m).
o Profitability ahead of market expectations.
· FY18: Year Two to amplify growth of our recurring revenues and growth in profitability.
* Profit Before Tax from continuing operations before Group recharges adjusted for share based payments, amortisation of intangibles arising on acquisition, acquisition related costs, Pimloc and redundancy costs. The statutory equivalents and reconciliation of the adjusted numbers shown in this statement are disclosed in notes 3 and 5.
Commenting on the results Nick Bolton, Chief Executive Officer, Oxford Metrics said:
"I'm delighted with the strong performance this year. Following the launch of our strategy last year we have driven double-digit revenue growth across Yotta and Vicon. Annualised Recurring Revenues, a key metric for our five year plan, has improved 22% as Yotta transformed into a pure-play software and services business. This performance came as the Group made a number of strategic investments to drive future revenue growth.
At Vicon we have launched new products to strengthen our position as a profitable market leader and acquired IMeasureU which adds a further growth dimension to the business. At Yotta, we have invested in our international distribution channels and launched our new cloud-based asset management platform Alloy. We move into Year Two of our plan as a stronger business and have confidence in our growth prospects for the year ahead."
For further information please contact:
Oxford Metrics |
+44 (0) 1865 261860 |
Nick Bolton, CEO |
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David Deacon, CFO |
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FTI Consulting |
+44 (0) 20 3727 1021 |
Matt Dixon / Emma Hall / Harry Staight |
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N+1 Singer (NOMAD to OMG) |
+44 (0) 20 7496 3000 |
Shaun Dobson / Jen Boorer |
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About Oxford Metrics
Oxford Metrics develops and markets analytics software for motion measurement and infrastructure asset management to customers in over 70 countries worldwide. Our list of clients across the globe is as diverse as the markets we operate in; we help highways authorities manage and maintain their road networks, hospitals and clinicians decide therapeutic strategies and Hollywood studios create stunning visual effects. And the diversity of applications is growing all the time.
The Group trades through two subsidiaries: Vicon and Yotta. Vicon is the world's leader in high precision motion measurement analysis to thousands of customers worldwide, including Guy's Hospital, EA Sports, MIT and NASA and our software is used in an ever expanding range of applications. Yotta provides cloud-based infrastructure asset management software to central and local government agencies and other infrastructure owners. Yotta has a large number of high profile clients including Highways England and Amey in the UK and VicRoads in Australia amongst others.
Founded in 1984 our Group is headquartered in Oxford with offices in Leamington Spa, Gloucester, California, Colorado, Singapore and Auckland. Since 2001, Oxford Metrics (LSE: OMG), has been a quoted company listed on AIM, a market operated by the London Stock Exchange.
For more information about Oxford Metrics, visit www.oxfordmetrics.com
Chairman's statement
Roger Parry
We are pleased to report another strong operating performance over the past financial year. We have delivered, indeed exceeded, our financial goals and the business has also made substantial strategic progress towards the objectives outlined in our five-year plan which we announced in December 2016. As shareholders will know, the plan is simple - to amplify the existing core strengths of our business and, in doing this, achieve our aim of doubling profits and tripling recurring revenue over the five-year period.
'Year One' marked the start of the investment phase of our strategic plan and has seen the Group add new staff to drive international growth and product development, launch a number of new products and invest in new growth opportunities via the acquisition of IMeasureU Limited. Now as we enter FY18, we begin the second phase of our strategic plan - to amplify growth of our recurring revenues and profits.
Group revenue from continuing operations grew 10.7% to £29.2m (FY16: £26.3m) in headline terms and 7.6% at constant currency. Adjusted PBT* from continuing operations was, as predicted, down on last year at £3.9m (FY16: £5.1m) reflecting the investment in business development, product development and back-office infrastructure to accelerate Yotta's strategic plans. The company reports another year of strong cash generation with £9.8m in cash at year-end (FY16: £8.3m), after accounting for payment of the final 2016 dividend of £1.0m (2015: £0.8m) and the initial consideration of £2.0m for the acquisition of IMeasureU. Given the pending disposal of the Surveying business announced in June, £0.6m is expected to be included in the disposal and is disclosed within assets held for sale.
Further, in light of the strong financial performance we are pleased to propose a 20% increase in our final dividend to 1.20p per share (FY16: 1.00p) in line with our progressive dividend policy and aim of average dividend cover of 2.0x, outlined in our five-year plan.
Strategic PROGRESS
We are now one year into our five-year strategic plan "to amplify the core". This carefully considered plan sets out our desire to focus our resources and capital allocation on, firstly, the strategic development of Yotta through growing international reach into new geographical markets and expanding the capabilities of our software, and secondly, strengthening and growing our Vicon business. These organic development plans would be undertaken whilst considering acquisition opportunities for both businesses where there is a strategic rationale to strengthen and leverage our technical and/or market expertise.
I am pleased to report good progress on all fronts. During the year, Yotta focussed on becoming a software and services business. First, this meant the planned disposal of surveying activities, which is expected to complete in the first half of the current financial year. Second, the business developed its international sales channels - Yotta now has the ability to reach customers in 23 countries (FY16: 4). The expansion of our market reach has successfully laid the foundations for the year ahead and has been coupled with Yotta's release of the first modules of Alloy, our next generation Infrastructure Asset Management SaaS solution. The software has been widely acclaimed and, better still, even though it was only available for a single month of the reported period, has registered wins in both the UK and abroad. These wins and others helped Yotta record a strong 22% increase in Annualised Recurring Revenues (ARR) to £4.9m at 30 September 2017 (FY16: £4.0m) from which £4.3m was recognised in the financial year; this is a key metric for the five-year plan and we are pleased to report it is on track.
Turning to Vicon, we have continued to work hard to maintain and extend its global reach. Here the company strengthened its market-leading position with the launch of Shōgun, our software solution for the entertainment segment and, of course, we completed the acquisition of IMeasureU. We believe this acquisition will expand Vicon's addressable market and create a meaningful recurring revenue stream within this already dependable business.
Outlook
Our strategic direction remains unchanged. During this first year of our five-year plan, we have laid the foundations to accelerate Yotta's growth and strengthen Vicon's market position. FY18 marks the start of the second year of our strategic plan to amplify growth of our recurring revenues and profitability. In the year ahead we will seek to restore headline Adjusted PBT* to at least pre-investment levels in Yotta through revenue growth and continued investment. We will continue to consider acquisitions where there is a clear opportunity to strengthen and leverage our existing capabilities.
We enter a new financial year in a solid position with good visibility of the sales pipelines for the year ahead and an improving quality to our revenues. The teams are energised with innovative new products, new resources and new markets to tap. Given that, we start with a good degree of confidence in our prospects for the year ahead.
* Profit Before Tax from continuing operations before Group recharges adjusted for share based payments, amortisation of intangibles arising on acquisition, acquisition related costs, Pimloc and redundancy costs. The statutory equivalents and reconciliation of the adjusted numbers shown in this statement are disclosed in notes 3 and 5.
Operational Review
Nick Bolton, CEO
YOTTA
KPI |
Revenue |
PBT |
Adjusted PBT* |
|
FY17 |
FY16 |
FY17 |
FY16 |
FY17 |
FY16 |
Yotta |
£6.6m |
£5.9m |
(£0.4m) |
£0.4m |
£0.7m |
£1.4m |
Given the pending disposal of the Yotta Surveying business, the results and commentary reported here now relate exclusively to Yotta software operations.
Yotta reported revenues of £6.6m (FY16: £5.9m), up 12.3% year-on-year. This increase has been achieved through growth in both software and related consulting services. In particular, the annual value of recurring revenues improved by 22% to £4.9m (September 2016: £4.0m) and retention of the growing SaaS customer base improved to 99% (FY16: 92%). Reflecting the planned growth investments over the year, Yotta reported an Adjusted Profit Before Tax* of £0.7m (FY16: £1.4m).
Perhaps the most significant operational achievement was the introduction of Alloy - Yotta's next generation asset management platform. Shipping in September 2017, Alloy helps infrastructure owners (central and local government, contractors) optimise the maintenance and management of their key infrastructure assets, such as highways, drainage and street lights. The platform is very flexible and can be easily adapted for new geographies by the users themselves. Despite only starting to sell the product a month before year-end, we successfully landed six new licences - three in the UK and three in Australia.
The business created a number of other notable headlines. Firstly, we saw keen interest for our software in adjacent areas such as the waste and environmental services market. The efficient and effective management of waste services remains a key focus for local government and Yotta continues to be a valuable component in delivering such services under ever increasing demands. Yotta's clearly differentiated software in this area, which includes both cloud and mobile solutions, led to key contract wins at a number of customers, including Slough, the London Borough of Merton, Bristol and Fife. This last deal is especially significant as it represents another win in Scotland, a key target market for the business.
The year also saw our relationship with Highways England deepen. The agency operates, maintains and modernises the Strategic Road Network in England, whilst only 2% of the roads in England by length, it carries a third of all traffic. Highways England first started using Yotta's strategic asset management SaaS software, Horizons, in 2013 and this year extended its use with the award of a two year extension to the existing engagement. Building on the success of Horizons, Highways England added Yotta's street-lighting module to their solution as well.
Elsewhere, Horizons had a positive year with notable new business wins at Northamptonshire and Warwickshire and in several London Boroughs. The number of users increased by 20% to 76 (FY16: 63) of which 25% are outside the UK.
Our recently established direct operation in Australia made further progress. In the first half of the year, we added resources in sales and consulting services and one year on from adopting the solution, Horizons' customer, VicRoads, the State of Victoria's road and traffic authority, publicly shared the benefits of our innovative software. To crown a key year in the development of Yotta's Australian business, the first three Alloy orders were from this territory.
Yotta's Consultancy team had a great year, recording its highest ever level of consulting revenues at £1.7m (FY16: £1.4m) (up 21% year-on-year). The consulting group offer a range of key services covering both technical and operational aspects to running the company's software. Dorset County Council, an existing user of Horizons, took full advantage of our services to successfully implement a new Code of Practice that introduced a risk approach to highways management.
Yotta Strategy Progress
The strategy at Yotta is to build a much more valuable business by accelerating our product and market development plans. Key to the growth plan is Alloy which represents a new vision for infrastructure asset management software. As such, we have been hiring new development staff to speed up the roll out of our Alloy product vision and building out our international distribution network by adding new channel staff and new distributors.
In this already well established software market, Alloy represents a new, modern vision for infrastructure assessment management. Currently existing legacy vendors provide highly fragmented solutions, often based on the local requirements of the particular geographical market they serve. As a result, vendors find it hard to expand beyond their native country. Alloy represents an alternative approach. The software runs exclusively in the cloud, has been written to be multi-language and is fully customisable. We believe with the shift towards the digital management of these assets and services it is possible to build a single suite of products, which can meet the specific needs of each country's marketplace both today and in their digital futures. Alloy is the connected asset management platform for the digital future.
In September 2017 we shipped our first two Alloy modules, Core Assets and Street Lighting, and more features and modules are in development. Our international channel presence was expanded in FY17 to 5 distributors (FY16: 2), expanding Yotta's reach into 23 countries (FY16: 4) achieving a key objective of the 5 year Strategic Plan. We will continue through FY18 to establish a presence in territories that suit our products' strengths. In all but the UK, Australia and New Zealand, where we have direct operations, distribution is via non-exclusive third-party organisations, all of which have established positions in their local infrastructure asset management markets.
Building on this strong organic growth platform, we are constantly looking at acquisitions which can amplify the strengths of Yotta's existing plans and approach. All-in-all, 2016-17 provides a great foundation and as we enter 2017-18 Yotta is well positioned to deliver its part in our five-year plan. Alloy's first modules are in market and in use, our international distribution system is broader than ever before and we have a clear vision for its future.
Vicon
KPI |
Revenue |
PBT |
Adjusted PBT* |
|
FY17 |
FY16 |
FY17 |
FY16 |
FY17 |
FY16 |
Vicon |
£22.5m |
£20.4m |
£3.8m |
£4.5m |
£5.6m |
£5.9m |
Vicon also had a positive year reporting a record level of revenues on both a headline and a constant currency basis. Vicon revenues were £22.5m (FY16: £20.4m), up 10.3% on a headline basis and 6.3% at constant currency. Vicon reported an Adjusted PBT* of £5.6m (FY16: £5.9m). Grant Income of £0.1m (FY16: £1.0m) was significantly lower than the exceptional amount of the previous year which accounts for the decline in Adjusted PBT*, though this was nearly mitigated by lower associated costs and improved product gross margin performance 73.2% (FY16: 72.0%), reflecting ongoing supply chain initiatives and a favourable product mix. The overall performance did benefit from movements in foreign exchange rates compared to last year, which is discussed further in the Financial Review section.
Over recent years Vicon has focussed on broadening its product portfolio to increase our relevance to our marketplaces and customers, and grow the Total Addressable Market (TAM) of our solutions. The company continued to achieve this through both organic and inorganic activity during 2016-17.
Turning first to organic expansion, Vicon introduced three new products to the market:
§ Vicon Vertex is a new type of measurement system which enables tracking in small environments where there is very little room for siting traditional measurement apparatus. This flexible but diminutive measurement system is of particular use in automotive, life sciences and, perhaps most importantly, in Virtual Reality (VR) applications - a growing area of our business.
§ Cara Lite is a new lighter weight version of the Vicon Cara head-mounted facial capture system. It can operate with one or two sensors, delivering a more flexible system, which can be set up more rapidly.
§ Vicon Shōgun, is our first new software to the film and video game market since 2007. The goal of the product is to significantly improve our users' ability to capture and process animations, enhancing the quality and sophistication of the films, games and TV shows they go on to produce, whilst reducing production costs.
In addition to these organically-driven product range expansions, Vicon acquired IMeasureU, the Inertial Measurement Unit (IMU) tracking pioneer, in June 2017. Based in Auckland, New Zealand, the company has developed wearable IMU motion sensors combined with proprietary software to provide high fidelity movement and workload data. These wearable sensors are lightweight and small, about the size of a £2 coin, and are attached directly to a subject, enabling researchers to monitor and manage that subject's performance and assist in their recovery following injury. While the sensors do not offer the same positional accuracy as a Vicon optical measurement system, no additional external apparatus is required.
Expanding Vicon's product range in previous years has proven a successful approach to sales growth. As an example of this the Vicon Vero system, released in June 2016, was the best-selling Vicon system over the past year, achieving 36% year-on-year growth for this important mid-market segment.
Lastly, a Vicon update would be incomplete without reference to its work in blockbuster movies. This year, amongst other releases, Vicon customer, Framestore, was acclaimed for its work on sequel movie, Kingsman: Golden Circle. Using a 16-sensor Vicon system, Framestore was able to create digital doubles for scenes in the film where a large crowd becomes trapped in a football stadium. The film has been well received across the world, hitting the number one spot in box office takings in a range of countries, including breaking a box office record in its opening weekend in South Korea.
Vicon Strategy Progress
The key strategic development in 2017 was the acquisition IMeasureU. The decision to acquire IMeasureU delivers on one of the commitments made under our strategic plan: to invest in Vicon as a profitable market leader and improve our product offering. The addition has opened up a route for Vicon to apply motion measurement in almost any environment and at a relatively low cost. IMeasureU's IMU sensors are a natural extension of the Vicon product suite and the combination accelerates Vicon's product roadmap and brings forward product release plans in this growing space.
We anticipate the acquisition will drive growth through three principal vectors:
· Expansion of Vicon's Total Addressable Market. The lower price point of the IMU measurement system opens access to a broader marketplace and, because IMU measurement can be used virtually anywhere, a greater range of measurement applications are made possible.
· Cross selling of IMU sensors through Vicon's well-established distribution channels. The IMU sensor is relevant to almost all of Vicon's existing vertical markets, but in particular our 1,200 sports sciences customers.
· Accelerate Vicon's roadmap. IMeasureU offers a unique growth opportunity in elite sports. Here the proposition is to use the IMU sensors to measure and track, on an on-going basis, the limb load a player experiences during training. Our cloud-based SaaS solution, IMU Step, enables coaches to keep track of training load and thus maintain an appropriate training regime especially when the player is recovering from injury. This opportunity is expected to create meaningful recurring revenues.
As we continue to drive the business forward, progress made this year through product innovation and acquisition provides multiple drivers of growth for the year ahead.
Conclusion
Operationally it was a strong period for Oxford Metrics as a whole: Yotta transformed into a focussed software and services business, we delivered a record year at Vicon and secured the acquisition of IMeasureU. In addition to the year's tactical operational achievements, strategic gains have also been made, with clear progress made in Year One of the five-year plan.
So with the first year of our five-year plan complete, we enter the second year as a stronger business with stronger growth prospects. We thank all our stakeholders - customers, staff, shareholders and partners - for their contributions in 2017 and we look forward to the progress we can make together into 2018 and beyond.
* Profit Before Tax from continuing operations before Group recharges adjusted for share based payments, amortisation of intangibles arising on acquisition, acquisition related costs, Pimloc and redundancy costs. The statutory equivalents and reconciliation of the adjusted numbers shown in this statement are disclosed in notes 3 and 5.
FINANCIAL REVIEW
David Deacon, CFO
Income Statement
The Group reported revenues of £29.2m (FY16: £26.3m) representing a headline improvement of 10.7%. With over a third of the Group's revenues derived from the USA this performance did benefit from a favourable average foreign exchange rate of $1.27 (FY16: $1.42). Taking account of this benefit of £0.8m, the underlying revenue growth was still a pleasing 7.6%. From an Adjusted PBT* perspective the benefit was £0.2m (meaning underlying PBT growth was 5.7%) since the Group is naturally hedged through our USA operations and the acquisition of certain components in US dollars.
Gross Profit in percentage terms remained relatively unchanged at 70.5% (FY16: 70.9%) reflecting a slight change in revenue mix but improved year-on-year in real terms from £18.7m to £20.6m.
Reviewing the cost base on the face of the Income Statement:
Sales, Support and Marketing costs increased during the year due to planned investments in Yotta to support the Five-year Strategic Plan and in Vicon Support operations.
Research & Development expensed through the Income Statement decreased during the year though total R&D investment including capitalised R&D of £1.8m (FY16: £1.4m) remained largely unchanged.
The Administration charge has risen year-on-year by £1.6m. The increase reflects higher performance related payments to management, additional IT infrastructure costs in Yotta, additional Quality related costs and increases arising from costs in the US being converted at a lower exchange rate.
The Group has reported Other Operating Income of £0.3m (FY16: £1.0m). Grant Income in Vicon at £0.1m (FY16: £1.0m) was modest this year compared to a rather exceptional FY16 that included the RTDA project funded by Innovate UK. Other Income this year also includes £0.2m relating to the transfer of IP to Pimloc Limited.
Adjusted PBT* for continuing operations of £3.9m (FY16: £5.1m) has been determined after adding back non-cash moving items such as Amortisation of Acquired Intangibles, Share Option charge, Pimloc and Exceptional Items, which in this year includes acquisition costs relating to IMeasureU Limited. The overall decline in Adjusted PBT* is due to the planned investment in Yotta's expansion per the Five-year Strategic Plan and the net impact of lower Grant Income.
The loss from discontinued operations of £2.1m (FY16: £2.4m) includes the £1.6m impairment of Goodwill relating to Data Collection Limited which is included in the Assets held for sale pending disposal of Yotta Surveying and residual costs of £0.2m relating to OMG Life Limited that was discontinued in FY16.
Statement of Financial Position
Goodwill and Intangibles
The movement in Goodwill and Intangibles relates to the addition of Goodwill arising on the acquisition of IMeasureU Limited of £1.1m. The Goodwill relating to Data Collection Limited of £2.4m was transferred into Assets held for sale and impaired by £1.6m.
The remaining carrying value of Goodwill relating to previous acquisitions of Peak Performance Technologies Inc., Mayrise Systems Limited ('Mayrise') and along with IMeasureU Limited ('IMU') have been reviewed in accordance with IAS 36 and remain unchanged.
Amortisation relating to Mayrise and IMU Acquired Intangibles has been charged to the P&L. This amounts to £0.5m (FY16: £0.4m).
Changes to Intangible Assets includes the addition of acquired IMU Intellectual Property £2.4m, capitalisation of R&D of £1.8m (FY16: £1.4m) and amortisation of development costs £1.3m (FY16: £1.1m).
Property, Plant and Equipment
The increase in Property, plant and equipment relates primarily to the relocation of Vicon (within Oxford) to new premises which offer much improved customer facing and manufacturing facilities. The addition to Leasehold Improvements accounts for £0.8m of the overall increase.
Investments
In October 2016 the Group took a minority shareholding in Pimloc Limited in exchange for IP that was contributed to the venture. The carrying value has been subsequently reduced by our share of post-acquisition losses from Pimloc's first year of trading. The net effect accounts for the movement year on year.
Inventories
The inventory position at the end of the financial year was £3.3m (FY16: £2.7m). Given the pending move of manufacturing to a new facility in October 2017, inventory at the year end was increased temporarily to hedge against any potential disruption that may have arisen during this period of transition.
Trade and other receivables
At the year-end Accounts Receivable stood at £8.7m (FY16: £9.8m). The decline relates largely to the Yotta Surveying business, classified as Assets held for sale which includes £0.8m of Accounts Receivable. The remainder of the overall decrease reflects lower September 2017 revenues compared to the same period last year. In October 2016, the remaining consideration of £1.9m relating to the disposal of 2d3 to Insitu/Boeing in April 2015 was received so Other Receivables have been reduced accordingly.
Current Tax Debtor
The Group pays corporation tax on account in the USA. In the previous year given the final result and inter-company recharges it was determined the Group had overpaid. This was refunded in the Financial Year under review.
Current Liabilities
Trade Payables for continuing operations remained largely unchanged at the year-end at £2.4m (FY16: £2.4m). Current liabilities now include the contingent consideration in relation to the acquisition of IMeasureU Limited of £0.3m.
Derivative Financial Liability
In October 2016 the Group received the remaining consideration relating to the disposal of 2d3 to Insitu/Boeing which crystallised this liability associated with hedging arrangements that had been put in place which accounts for the movement.
Current Tax Liabilities
The Group has tax liabilities with UK and USA tax authorities in relation to FY17 trading.
Non-current Liabilities
The year-on-year movement is accounted for by the Contingent Consideration payable in relation to the acquisition of IMeasureU Limited of £0.7m.
Statement of Cashflows
The Group finished the year with cash of £9.8m (FY16: £8.3m) including £0.6m expected to be included in the disposal of Yotta surveying and disclosed in Assets held for sale. Cash generated from operating activities was £5.6m (FY16: £4.4m). The deployment of this cash included the 2016 Final Dividend of £1.2m, the relocation to new premises £0.8m and the acquisition of IMeasureU Limited for initial consideration of £2.0m.
Tax
The Group tax charge this year was £0.5m (FY16: £0.4m) representing a blended rate of 14.5% (FY16: 7.8%) This increase is largely due to our strong performance in the US this year where the marginal rate of tax (38%) is significantly higher than the UK (19.5%). The level of Group R&D activities in the UK continues to have beneficial effect on the level of corporation tax payable in the UK given the reliefs available. Tax paid in the year was a small credit amount given the overpayment in the US in FY16.
The deferred tax asset remained largely unchanged £0.4m (FY16: £0.3m) as did the Deferred Tax Liability £1.6m (FY16: £1.6m).
Summary
In summary, Oxford Metrics had a most encouraging year and enters the new financial year with a robust Balance Sheet including a strong cash position and no debt.
* Profit Before Tax from continuing operations before Group recharges adjusted for share based payments, amortisation of intangibles arising on acquisition, acquisition related costs, Pimloc and redundancy costs. The statutory equivalents and reconciliation of the adjusted numbers shown in this statement are disclosed in notes 3 and 5.
consolidated INCOME statement
for the year ended 30 september 2017
|
|
2017 |
2016 |
|
Note |
£'000 |
£'000 |
Revenue |
3 |
29,155 |
26,327 |
Cost of sales |
|
(8,599) |
(7,651) |
|
|
|
|
Gross profit |
|
20,556 |
18,676 |
Sales, support and marketing costs |
|
(6,753) |
(5,136) |
Research and development costs |
|
(3,144) |
(3,776) |
Administrative expenses |
|
(7,231) |
(5,679) |
Other operating income |
|
297 |
990 |
|
|
|
|
Operating profit |
|
3,725 |
5,075 |
Finance income |
|
29 |
45 |
Share of post-tax loss of equity accounted associate |
|
(87) |
- |
|
|
|
|
Profit before taxation |
3,4 |
3,667 |
5,120 |
Taxation |
6 |
(533) |
(400) |
Profit from continuing operations |
|
3,134 |
4,720 |
|
|
|
|
Loss from discontinued operations, net of tax |
|
(2,127) |
(2,449) |
Profit attributable to owners of the parent during the year |
|
1,007 |
2,271 |
|
|
|
|
|
|
|
|
Earnings per share for profit on continuing operations attributable to owners of the parent during the year |
|
|
|
Basic earnings per ordinary share (pence) |
8 |
2.55p |
3.92p |
Diluted earnings per ordinary share (pence) |
8 |
2.49p |
3.87p |
|
|
|
|
Earnings per share for profit on total operations attributable to owners of the parent during the year |
|
|
|
Basic earnings per ordinary share (pence) |
8 |
0.82p |
1.89p |
Diluted earnings per ordinary share (pence) |
8 |
0.80p |
1.86p |
|
|
|
|
COnsolidated statement of
comprehensive income FOR THE YEAR
ENDED 30 sEPTEMBER 2017
|
|
Group |
Group |
|
|
2017 |
2016 |
|
|
£'000 |
£'000 |
Net profit for the year |
|
1,007 |
2,271 |
Other comprehensive income |
|
|
|
Items that will or may be reclassified to profit or loss |
|
|
|
Exchange differences on retranslation of overseas subsidiaries |
|
(208) |
224 |
Loss on hedging instrument |
|
- |
(158) |
Recycling of hedging instrument |
|
158 |
- |
Total other comprehensive (expense)/income |
|
(50) |
66 |
Total comprehensive income for the year attributable to owners of the parent |
|
957 |
2,337 |
Total comprehensive income for 2016 has been restated to remove tax recognised directly in equity which was incorrectly included in the prior year.
consolidated statement of financial position AS AT 30 september 2017
COMPANY NUMBER: 3998880 |
|
Group |
Group |
|
|
2017 |
2016 |
|
|
£'000 |
£'000 |
Non-current assets |
|
|
|
Goodwill and intangible assets |
|
12,069 |
11,086 |
Property, plant and equipment |
|
1,948 |
787 |
Financial asset - investments |
|
232 |
69 |
Deferred consideration receivable |
|
- |
113 |
Deferred tax asset |
|
377 |
311 |
|
|
14,626 |
12,366 |
Current assets |
|
|
|
Inventories |
|
3,330 |
2,704 |
Trade and other receivables |
|
9,992 |
13,919 |
Current tax debtor |
|
- |
453 |
Cash and cash equivalents |
|
9,185 |
8,273 |
|
|
22,507 |
25,349 |
|
|
|
|
Assets classified as held for sale |
|
3,047 |
- |
|
|
|
|
Current liabilities |
|
|
|
Trade and other payables |
|
(9,086) |
(8,582) |
Derivative financial liability |
|
- |
(158) |
Current tax liabilities |
|
(408) |
- |
|
|
(9,494) |
(8,740) |
|
|
|
|
Liabilities directly associated with assets classified as held for sale |
|
(584) |
- |
|
|
|
|
Net current assets |
|
15,476 |
16,609 |
Total assets less current liabilities |
|
30,102 |
28,975 |
|
|
|
|
Non-current liabilities |
|
|
|
Other liabilities |
|
(1,003) |
(321) |
Provisions |
|
(185) |
(185) |
Deferred tax liability |
|
(1,619) |
(1,640) |
|
|
(2,807) |
(2,146) |
|
|
|
|
Net assets |
|
27,295 |
26,829 |
|
|
|
|
Capital and reserves attributable to owners of the parent |
|
|
|
Share capital |
|
308 |
303 |
Shares to be issued |
|
65 |
65 |
Share premium account |
|
17,302 |
16,834 |
Retained earnings |
|
9,549 |
9,506 |
Cash flow hedging reserve |
|
- |
(158) |
Foreign currency translation reserve |
|
71 |
279 |
Total equity shareholders' funds |
|
27,295 |
26,829 |
|
|
|
|
The loss of the Company for the year ended 30 September 2017 was £1,173,000 (30 September 2016: £911,000).
consolidated STATEMENT of CASHFLOWS For the YEAR ended 30 september 2017
|
|
Group |
Group |
|
|
2017 |
2016 |
|
Note |
£'000 |
£'000 |
Cash flows from operating activities |
|
|
|
Operating profit/(loss) from continuing operations |
|
3,725 |
5,075 |
Operating loss from discontinued operations |
|
(2,139) |
(2,747) |
Group operating profit/(loss) |
|
1,586 |
2,328 |
|
|
|
|
Depreciation and amortisation |
|
2,166 |
2,016 |
Impairment of intangibles |
|
1,630 |
1,634 |
Impairment of investment |
|
- |
- |
(Profit)/loss on the sale of property, plant and equipment |
|
(39) |
9 |
Profit on sale of intellectual property to associate undertaking |
|
(208) |
- |
Share-based payments |
|
142 |
103 |
Exchange adjustments |
|
(360) |
(147) |
Increase in inventories |
|
(640) |
(674) |
Decrease/(increase) in receivables |
|
664 |
(1,950) |
Increase in payables |
|
655 |
1,088 |
Cash generated from operating activities |
|
5,596 |
4,407 |
|
|
|
|
Tax received/(paid) |
|
18 |
(1,301) |
|
|
|
|
Net cash from operating activities |
|
5,614 |
3,106 |
|
|
|
|
Cash flows from investing activities |
|
|
|
Purchase of property, plant and equipment |
|
(1,680) |
(526) |
Purchase of intangible assets |
|
(1,822) |
(1,425) |
Proceeds on disposal of property, plant and equipment |
|
55 |
122 |
Interest received |
|
29 |
45 |
Proceeds on disposal of subsidiary undertakings |
|
2,109 |
- |
Acquisition of subsidiary undertaking net of cash acquired |
|
(2,042) |
- |
|
|
|
|
Net cash used in investing activities |
|
(3,351) |
(1,784) |
|
|
|
|
Cash flows from financing activities |
|
|
|
Issue of ordinary shares |
|
473 |
517 |
Equity dividends paid |
8 |
(1,224) |
(5,304) |
|
|
|
|
Net cash used in financing activities |
|
(751) |
(4,787) |
|
|
|
|
Net increase/(decrease) in cash and cash equivalents |
|
1,512 |
(3,465) |
|
|
|
|
Cash and cash equivalents at beginning of the period |
|
8,273 |
11,738 |
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of the period |
|
9,785 |
8,273 |
|
|
|
|
Amount included in cash and cash equivalents |
|
9,185 |
8,273 |
Amount included in assets classified as held for sale |
|
600 |
- |
Total cash and cash equivalents at end of the period |
|
9,785 |
8,273 |
|
|
|
|
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 SEPTEMBER 2017
Group |
Share capital |
Shares to be issued |
Share premium account |
Retained earnings |
Cash flow hedging reserve |
Foreign currency translation reserve |
Total |
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
Balance as at 1 October 2015 |
294 |
65 |
16,326 |
12,315 |
- |
55 |
29,055 |
Net profit for the year |
- |
- |
- |
2,271 |
- |
- |
2,271 |
Exchange differences on retranslation of overseas subsidiaries |
- |
- |
- |
- |
- |
224 |
224 |
Loss on hedging instrument |
- |
- |
- |
- |
(158) |
- |
(158) |
Tax recognised directly in equity |
- |
- |
- |
121 |
- |
- |
121 |
Transactions with owners: |
|
|
|
|
|
|
|
Dividends |
- |
- |
- |
(5,304) |
- |
- |
(5,304) |
Issue of share capital |
9 |
- |
508 |
- |
- |
- |
517 |
Share based payment charge |
- |
- |
- |
103 |
- |
- |
103 |
Balance as at 30 September 2016 |
303 |
65 |
16,834 |
9,506 |
(158) |
279 |
26,829 |
Net profit for the year |
- |
- |
- |
1,007 |
- |
- |
1,007 |
Exchange differences on retranslation of overseas subsidiaries |
- |
- |
- |
- |
- |
(208) |
(208) |
Recycling of hedging instrument |
- |
- |
- |
- |
158 |
- |
158 |
Tax recognised directly in equity |
- |
- |
- |
118 |
- |
- |
118 |
Transactions with owners: |
|
|
|
|
|
|
|
Dividends |
- |
- |
- |
(1,224) |
- |
- |
(1,224) |
Issue of share capital |
5 |
- |
468 |
- |
- |
- |
473 |
Share based payment charge |
- |
- |
- |
142 |
- |
- |
142 |
Balance as at 30 September 2017 |
308 |
65 |
17,302 |
9,549 |
- |
71 |
27,295 |
|
|
|
|
|
|
|
|