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OXFORD METRICS PLC
Earnings Release • Dec 6, 2022
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Earnings Release
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National Storage Mechanism | Additional information 
RNS Number : 6768I
Oxford Metrics PLC
06 December 2022
6 December 2022
Oxford Metrics plc
("Oxford Metrics", the "Company" or the "Group")
Preliminary Results for the financial year ended 30 September 2022
- Year of strategic progress with disposal of Yotta -
- Record order book underpins more than half FY23 revenue expectation -
- Overall strong demand picture provides encouraging momentum into new year -
Oxford Metrics plc (LSE: OMG), the smart sensing software company servicing life sciences, entertainment and engineering markets, announces preliminary results for the financial year ended 30 September 2022.
| FY22 | % Change | FY21 | |
| Revenue # | £28.8m | +4.5% | £27.6m |
| Adjusted Profit Before Tax*# | £2.6m | -35.5% | £4.0m |
| Adjusted* Basic Earnings per Share # | 2.55p | -6.6% | 2.73p |
| Ordinary Dividend per Share | 2.50p | +25% | 2.00p |
| Statutory Profit after Tax | £46.9m | +1498.5% | £2.9m |
| Statutory Basic Earnings per Share | 36.70p | +1481.9% | 2.32p |
| Net Cash** | £67.7m | +194.8% | £23.0m |
| Orders-in-hand | £24.0m | +306.8% | £5.9m |
* Profit Before Tax before Group recharges adjusted for share-based payments, amortisation and impairment of intangibles arising on acquisition, additional Contemplas consideration deemed remuneration and exceptional costs
** Including Fixed Term Deposits
# Continuing operations
Financial Highlights (for continuing operations)
· Headline revenue of £28.8m (FY21: £27.6m), up 4.5%, up 0.5% on a constant currency basis with global supply chain constraints leading to deferment of £3.5m orders unable to ship in FY22
· Adjusted Profit Before Tax* at £2.6m (FY21: £4.0m), reflecting measured investment in five-year plan and the impact of deferred orders
· Debt free with strong net cash position of £67.7m (FY21: £23.0m), strengthened by sale of Yotta
· Board proposes increasing final dividend to 2.50p per share (FY21: 2.00p)
Operational Highlights
Clear need for Vicon's market-leading offering drives strong demand and revenue growth
· Largest-ever order book as at 30th September 2022 of £24.0m (FY21: £5.9m)
· Strong demand across all our market segments:
o Buoyant demand in Entertainment accounting for 58.6% of orders in hand, including contract wins with Dark Matters, to deploy Vicon's Vero solution Shōgun software in France's first virtual production studio, ByteDance, which purchased a large system to evolve the next viral dance move, and Industrial Light & Magic to create the highly acclaimed Abba Voyage experience
o Life Sciences revenues grew 16.3% and account for 22.6% of the orders in hand, including Saarland University acquiring a system in a collaboration with NASA, ESA & DLR, the German Aerospace Centre, for large scale studies into the Musculoskeletal (MSK) aging process
o Location-based Entertainment recovery is well underway reporting year-on-year revenue growth of 220.7% and accounts for 12.0% of orders in hand, including additional contracts with Sandbox VR, MackNext, and Immersive Gamebox
o Engineering revenues reported 3.2% decrease year-on-year, including a contract win with TU Delft's Department of Cognitive Robotics who bought a system to extend their work in robotics
· Encouraging traction with new flagship system - Valkyrie, providing momentum into the new year
· Most recent acquisition, Contemplas, now integrated
Successful sale of Yotta to Causeway Technologies for £52.0m
· All cash transaction realises investment made in Yotta at an attractive multiple
· Provides even greater clarity to go-forward growth path building more connected business
· Boosts near-term financial firepower to accelerate M&A as well as ongoing organic investments
Outlook and Guidance
· Vicon enters new financial year with well over half of revenue expectation underpinned by orders in hand
· Demand remains strong and we believe supply chain constraints are gradually easing
· Vicon will continue to invest in augmenting capabilities to sense, analyse and apply our technology
· As a more focussed business, supported by positive fundamentals, we are well placed to capitalise on the Smart Sensing opportunity that lies ahead
· M&A pipeline focussed on acquisitions in known markets of entertainment, Life Sciences, engineering and sports, and on companies which possess hard-to-replicate, deep Intellectual Property in integrated Smart Sensing and attractive financial metrics
Commenting on the results Nick Bolton, Chief Executive said:
"Year one of our five-year plan has marked significant change and progress for Oxford Metrics, as we seek to build a growing, connected enterprise focussed on the expanding market opportunities in smart sensing systems, through organic and inorganic investment.
During the year, we successfully divested Yotta, creating a more focussed group while bringing further clarity to our go-forward strategy; a laser focus on our market-leading Vicon business. At the same time, we have continued to push boundaries to extend our sensing capabilities, bringing to market Valkyrie - our new flagship solution - to capture motion more accurately than ever before.
We enter a new financial year with our largest ever set of orders-in-hand and demand for our systems remains buoyant. While we have seen a deferment of shipments due to wider global supply chain constraints, this situation is gradually improving, and our commercial momentum is regaining pace. The Board is encouraged by the overall strong demand picture for our market-leading products.
As a more focussed business with a strengthened balance sheet and strong fundamentals, the Board looks forward to the new financial year which is set to be a year of opportunity and growth for Oxford Metrics."
For further information please contact:
| Oxford Metrics | +44 (0) 1865 261860 |
| Nick Bolton, CEO | |
| David Deacon, CFO | |
| Numis Securities Limited | +44 (0)20 7260 1000 |
| Simon Willis / Hugo Rubinstein / Tejas Padalkar | |
| FTI Consulting | +44 (0)20 3727 1000 |
| Matt Dixon / Emma Hall / Jamille Smith / Jemima Gurney |
About Oxford Metrics
Oxford Metrics develops software that enables the interface between the real world and its virtual twin. Our smart sensing software helps over 10,000 customers in more than 70 countries, including all of the world's top 10 games companies and all of the top 20 universities worldwide. Founded in 1984, we started our journey in healthcare, expanded into entertainment, winning an OSCAR® and an Emmy®, then moved into defence and engineering. We have a track record of creating value by incubating, growing and then augmenting through acquisition, unique technology businesses.
The Group trades through Vicon, a world leader in motion measurement analysis to thousands of customers worldwide, including Guy's Hospital, Industrial Light & Magic, MIT and NASA.
The Group is headquartered in Oxford with offices in California, Colorado, Germany and New Zealand. 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
2021/22 was a year of important change for Oxford Metrics. At the start of the financial year, we launched our new five-year strategy through which we aim to grow revenues 2.5x whilst delivering an Adjusted PBT* margin of 15% by the end of the plan. In May, we announced the disposal of Yotta for £52m, which now allows us to focus on growth through the lens of the faster growing Vicon, a world leader in motion tracking. We then, in July, launched our most advanced motion capture system, Vicon Valkyrie, which captures motion more accurately than ever before and, which we expect will drive revenues in the next financial year and beyond. All this provides us with a springboard from which to focus on building a higher growth, more connected Group.
But the year was not without its frustrations. We were subject to the well-publicised global supply chain challenge faced by many industries in a post-pandemic world. This was made all the more frustrating given the high level of market demand we experienced and continue to experience for our solutions. As of 30 September 2022, our order book stood at £24.0m (FY21: £5.9m), a record level for our business. Despite this buoyant market demand, we were unable to fulfil some customer orders, which moved approximately £3.5m of orders into the new financial year. Although some uncertainty remains, the overall supply chain picture continues to improve, and we expect these orders to ship in the first half of the new financial year. The launch of our Valkyrie system that uses the latest component technology rather than legacy components used in the outgoing Vantage system will also help ease the situation.
For continuing operations, revenues of £28.8m (FY21: £27.6m) are reported and an Adjusted PBT* of £2.6m (FY21: £4.0m), which reflects the deferment of £3.5m orders we were unable to ship in September 2022.
The Group reports a statutory Profit after tax of £46.9m (FY21: £2.9m) with a bolstered cash position including Fixed Term Deposits of £67.7m (FY21: £23.0m, following the disposal of our Yotta business at a highly attractive valuation.
The Board proposes to increase our final dividend to 2.50 per share (FY21 Final Dividend: 2.00p) this year. We remain committed to our progressive dividend policy and will to aim to achieve average dividend cover of approximately two-times Adjusted PBT* per Share over time.
I would like to take this opportunity to recognise the outstanding contribution made by Dr Tom Shannon, one of our founders, who passed away in August 2022. Tom was one of the original team which founded Oxford Metrics in 1984 and has been part of the business ever since. Tom's contribution was felt across the entire business from R&D to quality management, from compliance to commercials. There is no doubt Tom helped make Oxford Metrics the great business it is today and we owe him our deep gratitude.
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.
Roger Parry
Chair
CEO STATEMENT
As we enter a new financial year, our vision for Oxford Metrics is clear. Our current five-year plan, set out in our annual report last year, aims to build a growing enterprise focussed on the expanding market opportunities in smart sensing systems, through organic and inorganic investment. Such sensor-based, analytical systems offer the possibility to transparently enhance our lives: enabling the digital to interface directly with the real world.
In our plan, we describe the coming of the Augmented Age, where humans partner with technology to achieve what neither can alone. For this augmented partnership to thrive, technologies are needed which have the ability to perceive us and our surroundings. They must be able to sense and understand every dimension of our world in real-time: humans, objects, movements, environments. Ever since our founding in 1984, this has been our domain and where our deep Intellectual Property resides powering the interface between the real world and its virtual twin. And importantly, we stand to gain as this smart sensing is applied to an increasing number of end market applications.
Our plan looks to capitalise on exactly this expanded opportunity by focussing on driving each of the three elements of smart sensing: sense, analyse and apply.
1. Extend our sensing capabilities
Our first thread is to extend our sensing methods through R&D, M&A and fostering key supplier partnerships, which broadens the applicability of our solutions and thus expands our addressable market. Here, we are focussed on building and acquiring a consistent, integrated core technology stack. Although the end market applications may be new, there will always be a tie-back to this central capability of integrated smart sensing systems.
A good example of this over the past year was the introduction of Vicon's new flagship motion tracking system, Valkyrie. This new solution pushes the envelope of measurement capability further than any previous Vicon generation. The system can measure smaller movements, more accurately, in larger volumes and at higher speeds. We believe these newly extended powers will address the growing demand for larger volume measurement driven by trends in the engineering, sports performance analysis and visual effects markets.
2. Enhance the analysis we can perform
Secondly, we seek to augment the analysis our customers can undertake with our software and thus broaden further the range of applications to which our systems can be applied. Again, this will be pursued through both organic and inorganic means. Expanding the analysis our customers can undertake with our systems has the potential to both grow our market opportunity and fill out our solutions in our existing markets.
We are constantly working to improve Vicon's suite of analysis software. For example, in March, we introduced a new version of our innovative Capture.U app. The app working with Vicon's Blue Trident inertial sensor, can now be used in an educational and training context. For universities and schools, it provides a means to develop practical understanding of human movement to build on their theoretical models. It helps the student apply their knowledge by engaging them to perform specific movements, such as squats, bicep curls and shoulder raises, then guiding the user in analysing and interpreting the data captured.
3. Embed our IP in other companies' solutions
Finally, we aim to grow by seeing our deep technology incorporated into other business' products and services. This aims to expand our addressable market as we drive the integration of our sensing and analysis IP to specific application domains. Over the past year we have both opened up our technology to selected partners and invested in specific resources to identify, partner and support such embedding companies.
Our most progressed embedding opportunities are in the Location-based Entertainment (LBE) market and, as we emerged from the period of pandemic-related lockdowns, we saw a number of those partners restart their roll-outs during the second half including Sandbox VR, who most recently announced the opening of their 30th location, MackNext, who installed their second Yullbe VR experience at Miniature Wonderland in Hamburg and Immersive Gamebox, who have plans for over 250 sites over the next three years.
Through these three mutually reinforcing mechanisms we will continue to drive growth. But over the past year, this has mostly been the result of organic initiatives. As previously communicated, we have the financial firepower for M&A and while our ambition remains, the environment for M&A has materially changed over the past six months. Although public company valuation multiples have reduced, private company valuations metrics are only now starting to reflect these lower levels. This has meant a price mismatch between buyer and seller, which has made concluding transactions tougher. We will still continue to pursue our carefully selected targets, but we will only do so at a price that represents fair value for our shareholders.
It is also worth adding that the sale of Yotta in May 2022, does not change our vision or plan but it does enable us to bring increased financial firepower to execute our growth. With a stronger balance sheet, we have the opportunity to accelerate our pace of growth through lifting our ambition to complete a number of larger transactions. We continue to hold a pipeline of M&A opportunities which fit well within this clear, coherent plan. Our pipeline is focussed on acquisitions in markets we understand well, entertainment, Life Sciences, engineering and sports, and on companies which possess hard-to-replicate, deep IP in integrated smart sensing. The right targets also possess attractive cashflow metrics, good-to-high revenue visibility or strong position in a niche market, and able management teams who share our cultural values. We look forward to announcing deals as the markets normalise.
OPERATIONAL REVIEW
| KPI | Revenue | PBT | Adjusted PBT* | |||
| FY22 | FY21 | FY22 | FY21 | FY22 | FY21 | |
| Vicon | £28.8m | £27.6m | £2.7m | £3.5m | £5.4m | £6.8m |
| Plc | - | - | - | £0.1m | (£2.8m) | (£2.8m) |
| Group | £28.8m | £27.6m | £2.7m) | £3.6m | £2.6m | £4.0m |
Despite achieving revenue growth of 4.5% (0.5% on a constant currency basis), the results achieved do not reflect the underlying strength of the business, and in particular the strong demand across all our market segments. Strong demand for our products during the year resulted in accumulating a record orderbook at the end of the financial year of £24.0m (FY21: £5.9m). Despite the constraints, reported revenues were up 4.5% at £28.8m (FY21: £27.6m).
There has been strong demand in the Entertainment segment which, although it saw a 15.7% decline year-on-year in revenue as a result of deferred orders, accounted for 58.6% of orders in hand. Life sciences, traditionally our cornerstone market saw revenue growth of 16.3% and accounted for 22.6% of the orders in hand. The recovery in Location-based Entertainment is well underway reporting year-on-year revenue growth of 220.7% and accounted for 12.0% of orders in hand. Engineering reported a small 3.2% decrease in reported revenues year-on-year and accounted for 6.8% of orders in hand.
Product gross margin was 70.5% (FY21: 72.6%). Two factors account for the net decline, with a favourable revenue mix being more than offset by gross margin erosion arising from more expensive components which accounted for approximately 3 percentage points of the decline. The overall cost base increased as we began to invest in the five-year plan though, given the possibility of supply chain constraints, the pace investment was measured, which resulted in a Vicon reported Adjusted PBT* of £5.4m (FY21: £6.8m).
Vicon's customers continued to extend the possibilities of our systems with some notable highlights over the past 12 months. We saw success in our Life Sciences market, including Saarland University acquiring a system for a collaboration with NASA, ESA & DLR, the German Aerospace Centre, for large scale studies into the Musculoskeletal (MSK) aging process, including investigating physical decline when immobilised; for example when overwintering in Antarctica or on the International Space Station.
In our Entertainment market, ByteDance purchased a large entertainment system as they look to evolve the next viral dance move, and longstanding Vicon customer, Industrial Light & Magic, merged the physical and the digital to create the highly acclaimed Abba Voyage experience. While in our Engineering vertical market, the Department of Cognitive Robotics at TU Delft, bought a system to extend their work in robotics, which includes human-robot interaction.
2022 also saw the rise of the use of Vicon motion capture for VTubing, where virtual characters are live streamed to fans. This trend has been growing for a while. Amazon reports that last year VTubing content grew 467% year-on-year on Twitch, and in 2020 some 38% of YouTube's 300 most profitable channels were from VTubers. At the low end, content creators can drive a 2D avatar from their webcam. But now increasingly, popular VTubers, especially in Japan, are using sophisticated Vicon capture setups to drive full 3D characters. This is yet another exciting application of Vicon's 3D capture technology.
CURRENT TRADING AND OUTLOOK
With strong market demand, Vicon start the new financial year with an Order Book of £24.0m which will underpin over half of the full year revenue expectations. Based on order intake so far in the new financial year which, includes our largest ever single order, demand remains strong. With regards to the supply chain constraints, the Board believes the situation is gradually improving and the launch of our Valkyrie system that uses the latest component technology rather than legacy components used in the outgoing Vantage system will also help ease the situation. That said, the global supply chain picture and more general global uncertainties means further supply chain disruption cannot be entirely ruled out.
Overall, the fundamentals at Vicon remain positive and the business is well placed to capitalise on the substantial market opportunity in the year ahead. As part of the new five-year strategic plan, Vicon will continue to invest to augment our capabilities to sense, analyse and apply our technology. The £2.3m investment previously announced was tempered in FY22 and is set to increase to £2.8m on an annualised basis. The investment compared to the current cost base will be reflected in FY23 by an increase of £0.8m and by a further £1.0m in FY24.
The Group remains in good financial health which includes a cash position of £67.7m which will enable the business to pursue our investment strategy including the ability to execute acquisition opportunities as the markets normalise that will accelerate our strategy.
The successful sale of Yotta brings even greater clarity to our go-forward growth plan and our energy and excitement to capitalise on the smart sensing opportunity that lies ahead. The Board looks forward to the new financial year which is set to be a year of opportunity and growth.
Nick Bolton
CEO
* Profit Before Tax before Group recharges adjusted for share-based payments, amortisation and impairment of intangibles arising on acquisition, additional Contemplas consideration deemed remuneration and exceptional costs
FINANCIAL REVIEW
Disposal of Yotta
In May 2022, the Group completed the disposal of the Yotta subsidiary for a headline consideration of £52.0m. After customary adjustments for working capital and Debt-like items the sale generated a profit on disposal after costs of £43.6m. The net cash generated by the transaction was £47.1m.
The disposal has resulted in a significant change to the year-on-year comparison in the Income Statement, Statement of Financial Position and Statement of Cash which is highlighted as appropriate in this Financial Review.
Income Statement
The Group reported revenue from continuing operations of £28.8m (FY21: £27.6m) representing a headline increase of 4.5%, on a constant FX basis revenues increased by 0.5%. From a geographical perspective, our Asia Pacific region had a strong year driven by Entertainment, Europe also reported growth of 6.4% and Vicon USA reported 11.7% headline growth though on a constant FX basis growth was nearer 0.7%.
Gross Profit margin held steady at 67.5% (FY21: 68.8%), reflecting a favourable change in the mix of revenue and gross margin erosion of approximately 3 percentage points during the year arising from supply chain constraints. In real terms Gross Profit improved year on year by £0.5m to £19.5m.
Reviewing the cost base within the Income Statement:
· Sales, Support and Marketing costs increased by £1.3m which was largely due to increased marketing efforts and commission together with operational activity returning to near normal levels post the pandemic.
· Research & Development expensed through the Income Statement was £3.5m (FY21: £3.5m). The continual investment and innovation in product and services is necessary to maintain the Group's competitive position which included a number of the new products released during the financial year, some of which are described in the CEO review.
· Administration expenses increased by £0.4m which was due to £0.2m additional consideration for the Contemplas acquisition arising from growth in ARR and other corporate costs. Adjusted PBT* of £2.6m (FY21: £4.0m/£4.5m on a constant currency basis) has been determined after adding back to the Statutory PBT £2.7m (FY21: £3.6m) non-cash items such as amortisation and impairment of acquired intangibles, share option charge and non-recurring exceptional items. A full reconciliation is available in note 6.
Statement of Financial Position
Goodwill and intangibles
The movement this year is a net £3.5m reduction. The movement is accounted for by the disposal of Yotta which accounted for £5.1m of Goodwill and Intangibles as at the end of FY22 offset by the net effect during the year of capitalised R&D of £3.4m (FY21: £2.8m), amortisation and impairment of development costs £1.4m (FY21: £2.2m) and the amortisation and impairment of acquired intangibles of £0.3m (FY21: £1.5m).
Property, plant and equipment
A small decline of £0.1m is reported. The net movement reflects the disposal of £0.3m relating to Yotta and the net effect during the year of additions of £0.6m (FY21: £0.2m) and the depreciation of £0.4m (FY21: £0.5m).
Right of use assets (IFRS16)
The decrease of £0.6m is largely accounted for by the disposal of £0.7m Right of Use assets relating to Yotta.
Investments
The investment of £0.2m 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 £4.5m (FY21: £2.5m). The higher inventory position largely reflecting the cost of goods relating to the £3.5m deferred orders into the next financial year.
Trade and other receivables
At the year-end Trade and other receivables were £7.4m (FY21: £6.1m). The net overall increase is due to higher Vicon Trade receivables £5.3m (FY21: £2.9m), which reflected a higher final quarter revenue performance compared to last year, Accrued interest £0.3m (FY21: £0.0m), higher Other Debtors £1.0m (FY21: £0.1m) being mostly VAT repayment due from HMRC offset by the disposal of Yotta that accounted for £2.5m of Trade and Other receivables at the end of FY21.
Current liabilities
At the year-end, Trade and other payables were £11.3m (FY21: £12.5m). The net decrease is due to the disposal of Yotta that accounted for £4.3m of Trade and other payables at the end of FY21 offset by an increase in trade payables at the year-end to £4.0m (FY21: £2.3m), lower accruals £1.9m (FY21: £2.5m) and higher Vicon support contract liabilities £5.1m (FY21: £3.1m).
The lease liabilities balance reported at £0.4m (FY21: £0.6m) represents the value of lease payments due within one year relating to right of use assets. The overall decrease was accounted for by the disposal of Yotta lease liabilities and amortisation.
Non-current liabilities
The £0.1m increase in Other liabilities is due to Vicon Support contract liabilities.
The lease liabilities balance reported of £1.1m (FY21: £1.6m) represents the value of lease payments due greater than one year relating to right of use assets.
Statement of cashflows
The Group finished the year with cash of £67.7m (FY21: £23.0m) including Fixed Term deposits of £55.0m (FY21: £Nil).
Cash generated by operating activities was £3.5m (FY21 Cash generated: £14.5m).
The deployment of this cash included continued investment in development giving rise to a purchase of intangibles of £3.5m (FY21: 2.8m) and payment of dividends of £2.5m (FY21: £2.3m).
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. Interest received in the year was £0.3m (FY21:£Nil).
Tax
The Group tax credit this year is £0.7m (FY21: Charge £0.6m). The tax credit for the year arose due 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 deferred tax asset decreased to £1.6m (FY21: £1.9m) arising from a decrease in the asset associated with the notional gain on exercise of share options and the disposal of Yotta offset by an increase in unrelieved losses carried forward. The deferred tax liability decreased to £2.5m (FY21: £3.1m) largely arising from the disposal of Yotta.
David Deacon
CFO
* Profit Before Tax before Group recharges adjusted for share-based payments, amortisation and impairment of intangibles arising on acquisition, additional Contemplas consideration deemed remuneration and exceptional costs
consolidated INCOME statement
for the year ended 30 september 2022
| 2022 | 2021 | ||
| Note | £'000 | £'000 | |
| Revenue | 3 | 28,816 | 27,571 |
| Cost of sales | (9,352) | (8,589) | |
| Gross profit | 19,464 | 18,982 | |
| Sales, support and marketing costs | (6,608) | (5,336) | |
| Research and development costs | (3,547) | (3,511) | |
| Administrative expenses | (6,814) | (6,438) | |
| Operating profit | 2,495 | 3,697 | |
| Finance income | 305 | 4 | |
| Finance expense | (67) | (67) | |
| Profit before taxation | 3,5 | 2,733 | 3,634 |
| Taxation | 7 | 665 | (574) |
| Profit from continuing operations | 3,398 | 3,060 | |
| Profit from discontinued operations net of tax | 10 | 43,519 | (125) |
| Profit attributable to owners of the parent during the year | 46,917 | 2,935 | |
| Earnings per share for profit on continuing operations attributable to owners of the parent during the year | |||
| Basic earnings per ordinary share (pence) | 8 | 2.66p | 2.42p |
| Diluted earnings per ordinary share (pence) | 8 | 2.62p | 2.40p |
| Earnings per share for profit on total operations attributable to owners of the parent during the year | |||
| Basic earnings per ordinary share (pence) | 8 | 36.70p | 2.32p |
| Diluted earnings per ordinary share (pence) | 8 | 36.11p | 2.30p |
COnsolidated statement of
comprehensive income FOR THE YEAR
ENDED 30 sEPTEMBER 2022
| Group | Group | ||
| 2022 | 2021 | ||
| £'000 | £'000 | ||
| Net profit for the year | 46,917 | 2,935 | |
| Other comprehensive expense | |||
| Items that will or may be reclassified to profit or loss | |||
| Exchange differences on retranslation of overseas subsidiaries | 953 | (129) | |
| Total other comprehensive expense | 953 | (129) | |
| Total comprehensive income for the year attributable to owners of the parent | 47,870 | 2,806 |
consolidated statement of financial position AS AT 30 september 2022
| COMPANY NUMBER: 03998880 | Group | Group | |
| 2022 | 2021 | ||
| £'000 | £'000 | ||
| Non-current assets | |||
| Goodwill and intangible assets | 10,081 | 13,543 | |
| Property, plant and equipment | 1,638 | 1,756 | |
| Right of use assets | 1,367 | 1,978 | |
| Financial asset - investments | 236 | 236 | |
| Deferred tax asset | 1,588 | 1,877 | |
| 14,910 | 19,390 | ||
| Current assets | |||
| Inventories | 4,462 | 2,494 | |
| Trade and other receivables | 7,397 | 6,099 | |
| Current tax receivable | 254 | 118 | |
| Fixed term deposits | 55,000 | - | |
| Cash and cash equivalents | 12,679 | 22,957 | |
| 79,792 | 31,668 | ||
| Current liabilities | |||
| Trade and other payables | (11,287) | (12,504) | |
| Lease liabilities | (440) | (582) | |
| (11,727) | (13,086) | ||
| Net current assets | 68,065 | 18,582 | |
| Total assets less current liabilities | 82,975 | 37,972 | |
| Non-current liabilities | |||
| Other liabilities | (965) | (883) | |
| Lease liabilities | (1,064) | (1,563) | |
| Provisions | (40) | (32) | |
| Deferred tax liability | (2,520) | (3,058) | |
| (4,589) | (5,536) | ||
| Net assets | 78,386 | 32,436 | |
| Capital and reserves attributable to owners of the parent |
|||
| Share capital | 324 | 317 | |
| Shares to be issued | 65 | 65 | |
| Share premium account | 19,094 | 18,483 | |
| Retained earnings | 57,917 | 13,538 | |
| Foreign currency translation reserve | 986 | 33 | |
| Total equity shareholders' funds | 78,386 | 32,436 | |
CONSOLIDATED STATEMENT OF CASHFLOWS
FOR THE year ENDED 30 SEPTEMBER 2022
| Group | Group | ||
| 2022 | 2021 | ||
| £'000 | £'000 | ||
| Cash flows from operating activities | |||
| Profit for the year | 46,917 | 2,935 | |
| Income tax (credit)/expense | (934) | 286 | |
| Finance income | (305) | (4) | |
| Finance expense | 114 | 106 | |
| Dividends receivable | - | - | |
| Depreciation and amortisation | 2,555 | 3,339 | |
| Impairment of intangible assets | - | 1,341 | |
| Increase in fair value of investment | - | (68) | |
| Profit on disposal of discontinued operation | (43,578) | - | |
| Share-based payments | 139 | 98 | |
| Exchange adjustments | - | (69) | |
| (Increase)/ decrease in inventories | (1,919) | 1,144 | |
| (Increase)/decrease in receivables | (3,664) | 3,126 | |
| Increase/(decrease) in payables | 4,187 | 2,223 | |
| Cash generated from operating activities | 3,512 | 14,457 | |
| Tax paid | (248) | (102) | |
| Net cash from operating activities | 3,264 | 14,355 | |
| Cash flows from investing activities | |||
| Purchase of property, plant and equipment | (588) | (239) | |
| Purchase of intangible assets | (3,464) | (2,778) | |
| Disposal of discontinued operation, net of cash disposed of | 47,141 | - | |
| Proceeds on disposal of property, plant and equipment | 37 | 11 | |
| Cash placed on fixed term deposits | (65,000) | - | |
| Fixed term deposits maturing | 10,000 | - | |
| Interest received | 28 | 4 | |
| Dividends received | - | - | |
| Acquisition of subsidiary undertaking net of cash acquired | - | (1,149) | |
| Net cash used in investing activities | (11,846) | (4,151) | |
| Cash flows from financing activities | |||
| Principal paid on lease liabilities | (460) | (504) | |
| Interest paid | - | (1) | |
| Interest paid on lease liabilities | (112) | (105) | |
| Issue of ordinary shares | 583 | 687 | |
| Equity dividends paid | (2,542) | (2,264) | |
| Net cash used in financing activities | (2,531) | (2,187) | |
| Net (decrease)/increase in cash and cash equivalents | (11,113) | 8,017 | |
| Cash and cash equivalents at beginning of the period | 22,957 | 14,940 | |
| Exchange gain/(loss) on cash and cash equivalents | 835 | - | |
| Cash and cash equivalents at end of the period | 12,679 | 22,957 | |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 SEPTEMBER 2022
| Group | Share capital |
Shares to be issued |
Share premium account | Retained earnings | Foreign currency translation reserve | Total |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
| Balance as at 30 September 2020 | 314 | 65 | 17,763 | 12,437 | 162 | 30,741 |
| Net profit for the year | - | - | - | 2,935 | - | 2,935 |
| Exchange differences on retranslation of overseas subsidiaries | - | - | - | - | (129) | (129) |
| Transactions with owners: | ||||||
| Tax recognised directly in equity in relation to employee share option schemes | - | - | - | 368 | - | 368 |
| Dividends | - | - | - | (2,264) | - | (2,264) |
| Issue of share capital | 3 | - | 720 | - | - | 723 |
| Share based payment charge | - | - | - | 62 | - | 62 |
| 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 |
1. Basis 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 6 December 2022.
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 435 of the Companies Act 2006 for the years ended 30 September 2022 and 30 September 2021 but is derived from those accounts. The statutory accounts for the year ended 30 September 2021 have been delivered to the Registrar of Companies and those for the year ended 30 September 2022 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 2022 or 30 September 2021.
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 2022.
3. Revenue from contracts with customers
| 2022 | 2021 | |
| Revenue | £'000 | £'000 |
| Continuing operations | ||
| Vicon UK | 17,338 | 17,260 |
| Vicon USA | 11,478 | 10,311 |
| 28,816 | 27,571 | |
| Timing of the transfer of goods and services |
Vicon UK | Vicon USA | Total |
| 2022 | £'000 | £'000 | £'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 |
| Timing of the transfer of goods | |||
| and services | Vicon UK | Vicon USA | Total |
| 2021 | £'000 | £'000 | £'000 |
| Point in time | 15,606 | 8,353 | 23,959 |
| Over time | 1,654 | 1,958 | 3,612 |
| Total | 17,260 | 10,311 | 27,571 |
| Contract Counterparties | |||
| Direct to consumers | 4,750 | 9,265 | 14,015 |
| Third party distributor | 12,510 | 1,046 | 13,556 |
| Total | 17,260 | 10,311 | 27,571 |
| By destination | |||
| UK | 3,519 | - | 3,519 |
| Germany | 1,591 | - | 1,591 |
| Italy | 484 | - | 484 |
| Netherlands | 435 | - | 435 |
| France | 220 | - | 220 |
| Poland | 355 | - | 355 |
| Rest of Europe | 1,601 | - | 1,601 |
| Total Europe | 4,686 | - | 4,686 |
| Canada | - | 1,221 | 1,221 |
| USA | - | 8,920 | 8,920 |
| Rest of North America | 2 | 104 | 106 |
| Total North America | 2 | 10,245 | 10,247 |
| Australia | 530 | - | 530 |
| Hong Kong | 1,277 | - | 1,277 |
| Japan | 3,290 | - | 3,290 |
| South Korea | 1,364 | - | 1,364 |
| China | 2,254 | - | 2,254 |
| Rest of Asia Pacific | 338 | - | 338 |
| Total Asia Pacific | 9,053 | - | 9,053 |
| Other | - | 66 | 66 |
| Total | 17,260 | 10,311 | 27,571 |
| 2022 £'000 |
2021 £'000 |
|
| Vicon revenue by market - Continuing operations | ||
| Engineering | 5,581 | 5,763 |
| Entertainment | 10,023 | 11,884 |
| Life sciences | 10,589 | 9,106 |
| Location based entertainment | 2,623 | 818 |
| Total | 28,816 | 27,571 |
| Group revenue by type Continuing operations |
||
| Sale of hardware | 22,700 | 22,496 |
| Sale of software | 1,970 | 1,662 |
| Rendering of services | 3,009 | 2,485 |
| SaaS | 193 | 141 |
| Support | 944 | 787 |
| Total | 28,816 | 27,571 |
| Group revenue by origin | ||
| Continuing operations | ||
| UK | 16,010 | 17,000 |
| Europe | 1,312 | 238 |
| North America | 11,478 | 10,311 |
| Asia Pacific | 16 | 22 |
| Total | 28,816 | 27,571 |
Contract balances
| 2022 | ||
| Contract assets | Contract liabilities | |
| £'000 | £'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 |
| 2021 | ||
| Contract assets | Contract liabilities | |
| £'000 | £'000 | |
| At 1 October 2020 | 411 | 5,850 |
| Transfers from contract assets to trade receivables | (1,525) | - |
| On acquisition | - | 227 |
| Amounts included in contract liabilities recognised as revenue during the period | - | (13,459) |
| Excess of revenue recognised over cash during the period | 1,375 | - |
| Cash received in advance of performance and not recognised as revenue during the period | - | 14,926 |
| Foreign exchange differences | - | (70) |
| At 30 September 2021 | 261 | 7,474 |
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 software and 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 for which the practical expedient in paragraph 121(a) of IFRS 15 applies. 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 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 and beyond |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
| Support contracts | 3,143 | 595 | 239 | 75 | 44 | 11 |
| At 30 September 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
| Support contracts | 2,550 | 428 | 263 | 83 | 22 | 11 |
The remaining performance obligations at 30 September 2021 in the table above exclude those relating to Yotta Group.
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.
During the year the Group comprised 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
· Yotta Group: This is the provision of software and services for the management of infrastructure assets for Government Agencies, Local Government and major infrastructure contractors. Yotta Group was disposed of during the year.
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 2022 are £5,718,000 (2021: £4,439,000).
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.
| 2022 | 2021 | |||||||
| Adjusted profit/(loss) before tax | Adjusting items | Group recharges | Profit/(loss) before tax | Adjusted profit/(loss) before tax | Adjusting items | Group recharges | Profit/(loss) before tax | |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
| Continuing operations | ||||||||
| Vicon UK | 1,590 | (434) | 1,426 | 2,582 | 3,229 | (1,344) | 1,130 | 3,015 |
| Vicon USA | 3,848 | - | (3,712) | 136 | 3,562 | - | (3,065) | 497 |
| Vicon Group | 5,438 | (434) | (2,286) | 2,718 | 6,791 | (1,344) | (1,935) | 3,512 |
| Unallocated | (2,840) | (86) | 2,941 | 15 | (2,763) | 30 | 2,855 | 122 |
| Total continuing operations | 2,598 | (520) | 655 | 2,733 | 4,028 | (1,314) | 920 | 3,634 |
Adjusted profit before tax is detailed in note 6.
| Segment depreciation and amortisation | ||
| 2022 £'000 |
2021 £'000 |
|
| Continuing operations | ||
| Vicon UK | 1,810 | 3,436 |
| Vicon USA | 203 | 208 |
| Vicon Group | 2,013 | 3,644 |
| Unallocated | 59 | 38 |
| Total continuing operations | 2,072 | 3,682 |
| Discontinued operations | ||
| Yotta | 483 | 998 |
| Oxford Metrics Group | 2,555 | 4,680 |
| Non-current assets | Additions to non-current assets | Carrying amount of segment assets | Carrying amount of segment liabilities | |||||
| 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
| Vicon UK | 12,825 | 10,324 | 3,304 | 2,137 | 30,757 | 22,962 | (11,007) | (8,702) |
| Vicon USA | 1,585 | 941 | 566 | 33 | 6,613 | 6,971 | (4,644) | (2,989) |
| Vicon Group | 14,410 | 11,265 | 3,870 | 2,170 | 37,370 | 29,933 | (15,651) | (11,691) |
| Yotta Group | - | 7,262 | 661 | 1,078 | - | 13,193 | - | (5,952) |
| Unallocated | 500 | 863 | 8 | 94 | 63,384 | 13,984 | (665) | (979) |
| OMG Life Group* | - | - | - | - | (6,052) | (6,052) | - | - |
| Oxford Metrics Group | 14,910 | 19,390 | 4,539 | 3,342 | 94,702 | 51,058 | (16,316) | (18,622) |
* 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):
| 2022 | 2021 | |
| £'000 | £'000 | |
| Amortisation of right of use assets | 496 | 522 |
| Depreciation of property, plant and equipment - owned | 424 | 495 |
| Amortisation of customer relationships | - | 249 |
| Amortisation of intellectual property | 272 | 261 |
| Amortisation of development costs | 1,363 | 1,812 |
| Impairment of development costs | - | 360 |
| Impairment of intellectual property | - | 981 |
| Share based payments - equity settled | 36 | 36 |
| Share option charges | 103 | 62 |
| Operating lease charges - land and buildings | - | 3 |
| Foreign exchange loss | 487 | 10 |
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.
| 2022 | 2021 | |
| £'000 | £'000 | |
| Profit before tax - continuing operations | 2,733 | 3,634 |
| Share option charges | 103 | 51 |
| Amortisation of intangibles arising on acquisition | 261 | 258 |
| Impairment of intangible arising on acquisition | - | 981 |
| Reorganisation costs | - | 6 |
| Costs associated with the acquisition of Contemplas | 156 | 86 |
| Adjustment to fair value of investment | - | (68) |
| Reapportion Group overheads | (655) | (920) |
| Adjusted profit before tax - continuing operations | 2,598 | 4,028 |
| Adjusted earnings per share for profit on continuing operations attributable to owners of the parent during the year | ||||
| Basic earnings per share (pence) | 2.55p | 2.73p | ||
| Diluted earnings per share (pence) | 2.51p | 2.71p |
The adjusted profit before tax for the Vicon and Yotta business segments (note 4) is shown in detail below;
| Vicon Group | ||
| 2022 | 2021 | |
| Continuing operations | £'000 | £'000 |
| Profit before tax | 2,718 | 3,512 |
| Share option charges | 17 | 13 |
| Amortisation of intangibles arising on acquisition | 261 | 258 |
| Impairment of intangible arising on acquisition | - | 981 |
| Reorganisation costs | - | 6 |
| Costs associated with the acquisition of Contemplas | 156 | 86 |
| Reapportion Group overheads | 2,286 | 1,935 |
| Adjusted profit before tax | 5,438 | 6,791 |
| Yotta Group | ||
| 2022 | 2021 | |
| Discontinued operations | £'000 | £'000 |
| Profit before tax | 43,250 | (413) |
| Profit on disposal of discontinued operation | (43,578) | - |
| Share option charges | - | 11 |
| Amortisation of intangibles arising on acquisition | - | 249 |
| Reorganisation costs | 93 | 26 |
| Reapportion Group overheads | 655 | 920 |
| Adjusted profit before tax | 420 | 793 |
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:
| 2022 | 2021 | |
| £'000 | £'000 | |
| United Kingdom corporation tax at 19.0% (2021: 19.0%) | 462 | 60 |
| Overseas taxation | 69 | 228 |
| Adjustments in respect of prior year | (79) | (3) |
| Current taxation | 452 | 285 |
| Deferred taxation | (1,386) | 1 |
| Total taxation (credit)/expense | (934) | 286 |
Continuing and discontinued operations:
| 2022 | 2021 | |
| £'000 | £'000 | |
| Income tax (credit)/expense from continuing operations | (665) | 574 |
| Income tax credit from discontinued operations excluding gain on sale (note 10) | (269) | (288) |
| Total tax (credit)/ expense | (934) | 286 |
At 30 September 2022, the Group had an undiscounted deferred tax asset of £1,588,000 (2021: £1,877,000). 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 (2021: 25%).
The tax assessed for the year is lower than the standard rate of corporation tax in the UK of 19.0% (2021: lower than the standard rate of 19%).
The differences are explained as follows:
| 2022 | 2021 | |
| £'000 | £'000 | |
| Profit for the year | 46,917 | 2,935 |
| Income tax (credit)/expense including discontinued operations | (934) | 286 |
| Profit on ordinary activities before tax | 45,983 | 3,221 |
| Expected tax income based on the standard rate of corporation tax in the UK of 19.0% (2021: 19.0%) |
8,737 | 612 |
| Effect of: | ||
| Expenses not deductible for tax purposes | 68 | 255 |
| Book gain on disposal in excess of tax gain | (8,280) | - |
| Unrelieved current year losses | (335) | (161) |
| Utilisation of losses brought forward | - | (32) |
| Adjustments to tax charge in respect of prior year current tax | (79) | (8) |
| Adjustments to tax charge in respect of prior year deferred tax | (383) | (62) |
| Higher rates on overseas taxation | 29 | 42 |
| Research and development tax credit | (467) | (310) |
| Effect of tax rate change | (224) | (50) |
| Total tax (credit)/expense | (934) | 286 |
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 2022 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
| 2022 | 2021 | |||||
| Earnings | Weighted average number of shares | Per share amount | Earnings | Weighted average number of shares | Per share amount | |
| £'000 | '000 | (pence) | £'000 | '000 | (pence) | |
| Continuing operations | ||||||
| Basic earnings per share | ||||||
| Earnings attributable to ordinary shareholders | 3,398 | 127,840 | 2.66 | 3,060 | 126,437 | 2.42 |
| Dilutive effect of employee share options | - | 2,081 | (0.04) | - | 993 | (0.02) |
| Diluted earnings per share | 3,398 | 129,921 | 2.62 | 3,060 | 127,430 | 2.40 |
| Discontinued operations | ||||||
| Basic earnings per share | ||||||
| Earnings attributable to ordinary shareholders | 43,519 | 127,840 | 34.04 | (125) | 126,437 | (0.10) |
| Dilutive effect of employee share options | - | 2,081 | (0.54) | - | 993 | - |
| Diluted earnings per share | 43,519 | 129,921 | 33.50 | (125) | 127,430 | (0.10) |
| Total operations | ||||||
| Basic earnings per share | ||||||
| Earnings attributable to ordinary shareholders | 46,917 | 127,840 | 36.70 | 2,935 | 126,437 | 2.32 |
| Dilutive effect of employee share options | - | 2,081 | (0.59) | - | 993 | (0.02) |
| Diluted earnings per share | 46,917 | 129,921 | 36.11 | 2,935 | 127,430 | 2.30 |
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
| 2022 | 2021 | |
| Equity - ordinary | £'000 | £'000 |
| Final 2020 paid in 2021 (1.80 pence per share) | - | 2,264 |
| Final 2021 paid in 2022 (2.00 pence per share) | 2,542 | - |
| 2,542 | 2,264 |
10. Discontinued operations
During the year the Group sold its 100% interest in Yotta Limited and Yotta Pty Limited (Yotta Group) for a total consideration of £49,105,000.
The transaction was based on an enterprise value of £52m and the final cash consideration was determined as follows;
| £'000 | |
| Enterprise value | 52,000 |
| Adjustments for debt-like items | (2,432) |
| Working capital adjustments | (463) |
| Cash consideration received | 49,105 |
The post-tax gain on disposal of discontinued operations was determined as follows;
| £'000 | |
| Cash consideration received | 49,105 |
| Cash disposed of | (1,629) |
| Transaction costs | (335) |
| Net cash inflow on disposal of discontinued operation | 47,141 |
| Net assets disposed (other than cash) | |
| Property, plant, and equipment | 281 |
| Intangibles | 5,400 |
| Trade and other receivables | 3,398 |
| Other financial assets | 2,085 |
| Trade and other payables | (5,997) |
| Other financial liabilities | (1,604) |
| 3,563 | |
| Pre-tax gain on disposal of discontinued operation | |
| Related tax expense | - |
| Gain on disposal of discontinued operation | 43,578 |
Result of Yotta Group
| 2022 | 2021 | |
| £'000 | £'000 | |
| Revenue | 5,604 | 8,056 |
| Expenses other than finance costs | (5,885) | (8,430) |
| Finance costs | (47) | (39) |
| Tax credit | 269 | 288 |
| Profit from selling discontinued operation after tax | 43,578 | - |
| Profit for the year | 43,519 | (125) |
The statement of cash flows includes the following amounts relating to discontinued operations:
| 2022 | 2021 | |
| £'000 | £'000 | |
| Operating activities | (1,228) | (2,658) |
| Investing activities | 44,851 | (900) |
| Financing activities | (109) | (189) |
| Net cash flow from discontinued operations | 43,514 | (3,747) |
11. Copies of announcement
Copies of this announcement will be available from the Company's registered office at 6 Oxford Industrial Park, Yarnton, Oxfordshire, OX5 1QU and from the Company's website: www.oxfordmetrics.com.
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