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OXFORD METRICS PLC
ANNUAL REPORT AND
FINANCIAL STATEMENTS
FOR THE YEAR ENDED
30 SEPTEMBER 2018
COMPANY NO 3998880
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OXFORD METRICS PLC ANNUAL REPORT 2018
Contents
Chairman’s Statement
Strategic Report
Report of the Directors
Corporate Governance Report
Report on Directors’ Remuneration
Independent Auditor’s Report
Consolidated Income Statement
Consolidated Statement of Comprehensive Income
Consolidated and Company Statement of Financial Position
Consolidated and Company Statement of Cashflows
Consolidated Statement of Changes in Equity
Company Statement of Changes in Equity
Notes to the Financial Statements
Company Information
Notice of Annual General Meeting
Form of Proxy
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OXFORD METRICS PLC ANNUAL REPORT 2018
CHAIRMAN’S STATEMENT
Roger Parry
Group revenue from continuing operations grew 8.6% to £31.7m (FY17: £29.2m) in headline terms and 10.7% at constant
currency. Adjusted PBT* from continuing operations rose to £5.2m (FY17: £3.9m). Revenue and Adjusted PBT* were both in
line with market expectations. The company reports another year of strong cash generation with £12.2m in cash at year-end
(FY17: £9.2m), after accounting for payment of the final FY17 dividend of £1.5m (FY16 Dividend: £1.2m) and receipt of the net
consideration of £1.3m for the disposal of our legacy Surveying business.
In light of the strong cash performance we are pleased to propose a 25% increase in our final dividend to 1.50p per share
(FY17: 1.20p) in line with our progressive dividend policy and aim of average Ordinary Dividend Cover of 2.0x earnings,
as declared in our five-year plan. We continue to be a highly cash-generative business, and following a review of the Group’s
working capital needs, current M&A opportunities, current contractual obligations and the need to maintain a robust Balance
Sheet to navigate economic uncertainties, the Board is pleased to propose the payment of a Special Dividend of
1.00p per share (FY17: Nil), which effectively returns the net proceeds from the disposal of Yotta Surveying.
STRATEGY PROGRESS
As we enter Year 3 of our current five-year plan to “amplify the core”, the results confirm we are making good progress towards
achieving our objectives. As a reminder, our strategy recognises the high quality of both of our subsidiaries and, given both
have exciting markets, differentiated products and loyal customers, we aim to amplify their visible, material capabilities. In
doing this, we committed to achieving two clear publicly-measurable metrics of doubling profits and tripling recurring revenues
over the five-year period and we are pleased to report, two years in, we remain on track to deliver these key goals.
• Double profits: following a period of investment through FY17, Adjusted PBT* has now been restored to above FY16
pre-investment levels as promised; and
•
Triple recurring revenues: Annual Recurring Revenue (‘ARR’) as of 30 September 2018 has increased 42% since the
commencement of the five-year Strategic Plan, driven mainly by Horizons and Alloy. Along with growing interest in Vicon’s
Software-as-a-Service (‘SaaS’) offering, IMU Step, we remain confident that our goal will be achieved.
BOARD
Over the past 12 months there have been a number of changes to the Board. In February 2018 we announced the retirement
of our founder, Dr Julian Morris, who has been involved in every step of growing the business from a fledgling start-up to a
world-class software company serving thousands of customers across the globe. His insight and leadership over that time
have been invaluable and we thank him for his deep contribution to the business and wish him well in his retirement.
Furthermore, in June 2018, we announced the addition of a new Non-Executive Director to the Board in David Quantrell,
a highly qualified technology executive. David has more than 30 years of experience in senior management roles across the
software sector, including international SaaS businesses. He has held senior positions at Clarify, Nortel, McAfee and HP and is
already providing immediate, valuable input at both Vicon and Yotta. We look forward to drawing on David’s insights to drive
further progress across the Group.
Lastly, I want to thank the stakeholders in our business for all their contributions over the past year – our amazing staff in our
offices worldwide, our shareholders for their continuing support, our partners and distributors in all the markets we serve and,
most importantly, our ever-expanding number of valued customers, who will always be the very centre of our focus.
* Profit Before Tax before group recharges adjusted for share based payments, amortisation of intangibles arising on
acquisition, fair value adjustments to IMeasureU consideration, impairment of Pimloc investment and exceptional costs.
The statutory equivalents and reconciliation of the adjusted numbers shown in this statement are disclosed in notes 4 and 6.
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OXFORD METRICS PLC ANNUAL REPORT 2018
STRATEGIC REPORT
OPERATIONAL REVIEW
Nick Bolton, CEO
This was another year of achievement for Oxford Metrics, with our focused strategy and investment translating into strong
growth and record revenues at Vicon, our highest level of recurring revenues at Yotta and clear operational progress at both
companies. Two years into our five-year plan we are pleased to report we remain firmly on track to achieve it.
Furthermore, our markets and our understanding of them have developed over those years, especially at Vicon, where the
business has delivered a 43% increase in revenues over the past three years. We believe something material is changing in
Vicon’s market, which offers the opportunity to bring forward returns by accelerating specific product and market development
in the current year.
VICON
KPI
Vicon
Revenue
PBT
FY18
£24.4m
FY17
£22.5m
FY18
£5.5m
FY17
£3.8m
Adjusted PBT*
FY18
£7.3m
FY17
£5.6m
2017/18 was an outstanding year for Vicon. The business achieved record revenues, improved Product Gross Margin to 73.4%
(FY17: 73.2%) and a record Adjusted PBT well ahead of our expectations. Indeed this excellent result at Vicon means we are
essentially a year ahead of our internal plans for this business – a lead we intend to preserve by bringing forward some planned
investment.
It has also been a year of strategic development. Our strategy for Vicon, as outlined in our five-year plan, remains unchanged -
to make targeted investments to maintain our market-leading position and extend our capability into new markets. Pleasingly,
we are now seeing a noticeable increase in movement measurement applications from a broader variety of markets than ever
before.
Motion measurement in the Augmented Age
We believe this demand is being driven by the arrival of the Augmented Age, where our lives are becoming increasingly
enhanced and augmented through digital interfaces (smartphones, robots, autonomous vehicles and virtual reality). In this new
Age, we require these interfaces and machines to understand human movement as well as humans do. Of course, Vicon has
been doing this since 1984 and now holds a high degree of proprietary software IP relating to this. What has changed over the
past three years is that human movement tracking is entering the mainstream - our smartphones can track head movement
and our watches can measure body movement. We are seeing this need for human movement tracking emerging in a wide
variety of sectors and we are well positioned to exploit these opportunities.
In order to do this, we are focussing the business on two important growth vectors: our Established Markets and new Adjacent
Vertical markets.
Established Markets – making the strong even stronger
Vicon has long been the innovator in optical motion measurement, and over the past year, we delivered more customer
solutions than ever before. We have achieved this success by expanding our addressable market and the appeal of our
solutions through the addition of inertial and active optical capabilities. Our inertial sensors enable us to measure movement
anywhere and for long periods of time, and our active optical capability increases the flexibility of our solutions.
Our strategy of broadening the appeal of our products and differentiation in our markets through targeted investment in
product including integration of inertial technology is clearly delivering, and, given the expanded interest in human movement
measurement, we plan to bring forward our planned product investment. This means investing an additional £0.7m in FY19
into this Established Markets business in order to accelerate our opportunity and deliver new products that we anticipate will
be on sale in FY20.
Adjacent Verticals – driving technology leadership into new growth opportunities
Our Adjacent Vertical markets represent new markets for Vicon, where we have seen early collective interest in our solutions
from pioneer customers. In FY18, these new Adjacent Verticals already made up 3.5% of revenues. Such markets offer a
meaningful expansion of our addressable market and equally are of an appropriate size and structure that we are able to
address them. We are currently pursuing two such vertical markets in Location-based Virtual Reality (‘LBVR’) and Elite Sports –
both of which have seen strong progress in FY18. As a result, we plan to bring forward our plans and invest a further £0.8m to
build out our commercial capability in these growing markets.
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OXFORD METRICS PLC ANNUAL REPORT 2018
Location-based Virtual Reality
2018 saw an explosion in Vicon’s work in LBVR - an emerging form of entertainment where participants share collective VR
experiences in a specific location, such as a shopping mall, cinema or museum. In these experiences, users are free to walk
within a virtual world and interact with each other, whether that be enacting a scene from a movie franchise, wandering the
surface of Mars or playing a truly interactive video game with friends. In order to deliver such compelling experiences, the
users and the objects they interact with have to be accurately tracked in real-time with very low latency. This is where Vicon
excels.
In August 2018, we launched Vicon Origin, a specific solution for LBVR, to further extend our product differentiation in this
growing marketplace. The Origin solution consists of a new suite of products built to serve current and future demands of the
LBVR market.
During the year we established key customer relationships across the world, including Bandai Namco in Japan, Dreamscape
Immersive in the US and VR Arcade in the Netherlands. This market is developing quickly and we look forward to updating the
market as Vicon-powered solutions are rolled out globally.
Elite Sports
We also made good progress in our Elite Sports vertical market during the year. In this market, our customers use our software
to better understand the athlete in training, especially when they are recovering from injury. Principally this is through our IMU
Step software, which is provided on a Software as a Service (‘SaaS’) basis, with customers committing typically to a three-year
contract.
The software enables coaches to gain an objective measure of the load an athlete endures in their lower limbs during training.
It is a unique solution which is biomechanically-verified and is proving a powerful tool for our first customers, including the
Hospital for Special Surgery, University of Memphis and New South Wales Institute of Sport (NSWIS).
Other Verticals
We continue to monitor and develop other adjacent vertical market opportunities and where we see exciting, addressable
markets where we can offer differentiated solutions, we will look to add further vertical growth through both organic and
inorganic developments. Furthermore, where possible, we will aim to pursue these vertical markets on a SaaS-basis to improve
the visibility of our revenues and profits.
YOTTA
KPI
Yotta
Revenue
PBT
FY18
£7.3m
FY17
£6.6m
FY18
(£1.0m)
FY17
(£0.4m)
Adjusted PBT*
FY18
£0.4m
FY17
£0.7m
2017/18 was a year of mixed fortunes for Yotta – on the one hand our more mature UK business strode forward, achieving
ARR growth as expected, a 6% increase in Consulting revenues and successful disposal of our legacy UK Surveying business
in June 2018. On the other hand, our newer International business grew more slowly than planned, despite some good
customer wins. This led to a divisional result that was slightly behind our expectations. Internationally, we have now taken
steps to focus on our Indirect and OEM channels, where we have seen success, and have reduced investment in direct
international operations. These changes will yield a net cost saving of around £0.4m per year.
ARR grew 16.5% to £5.7m (FY17: £4.9m), a solid performance, but slightly behind where we would like it to be. Despite this,
we continue to make progress in important areas. Firstly, Yotta reported a high rate of customer retention at 95.3% (FY17:
98.8%) thus providing the business with a predictable high-quality revenue stream. Secondly, the value of ARR at Yotta already
covers the entire payroll cost of the business as at 30th September 2018 and 74% measured against all current operating
costs on an annualised basis. During FY19, ARR is expected to cover all operating costs.
Our strategy to drive growth within Yotta’s three important vectors continues and we have seen progress in all these over the
past 12 months:
Direct
ARR from our direct operations grew during the year with wins including Glasgow, Cambridgeshire and at Auckland Motorways
in New Zealand. The enterprise system deal at Glasgow was of particular note because of its size and the breadth of its
application, which includes Environmental Services, Highways and Street Lighting. We also saw direct Alloy deployments go
live during the year including at Stockton and Poole.
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OXFORD METRICS PLC ANNUAL REPORT 2018
Our direct consulting team delivered a number of important customer projects during the year including one for Amey
Sheffield, where we created a bespoke model within Horizons for their PFI contract, and at Townsville, Australia, where we
were engaged in a water mains modelling project to deliver deterioration models and works plans for the replacement of aging
water mains in the city.
Indirect
Our indirect business recorded a number of notable wins during the year, including deals in Colombia at Itineris and Abertis
Bitumix, in Germany at VIA IMC and at Volker and Dura Vermeer in the Netherlands. We now have a total of 28 international
customers, up from 14 at the end of last financial year.
OEM
During the year we signed two OEM partners: Pavement Management Services (‘PMS’) in Australia and Tvilight in the
Netherlands. As previously announced, Tvilight is a Smart City solution provider focused on the European market, whose new
CityManager platform is now powered by Alloy. PMS are a solutions provider in the Australian Highways market, who now offer
Horizons to enable their customers to optimise their strategic asset planning. PMS successfully secured and implemented the
win at Townsville.
We continue to explore further OEM relationships, especially those that can give us access to otherwise unaddressed vertical
markets, such as water and energy.
Product progress
Alloy and Horizons continue to be heralded by the marketplace and we continue to broaden its appeal and its applicability.
During this first year of its commercial life, Alloy received a number of upgrades, which were all aimed at expanding both the
UK and international appeal of the product.
These improvements included the addition of the Green Spaces module, Data Explorer and Export and also Mesh Integrations,
which enable Alloy to monitor and control third-party equipment or assets directly from within our software. This included
integrating the location of service vehicles in the London Borough of Newham through Exactrak and even the automatic
remote watering of a living wall of plants in bus shelters in Australia.
Looking ahead to the first half of FY19, the next major Alloy release will include an Environmental Services capability that will
bring a state-of-the-art software solution to this segment of the local government marketplace, which, given the increasing
focus on recycling, is expected to enhance ARR growth.
CURRENT TRADING AND OUTLOOK
We remain firmly on track with the targets set out in our five-year plan. Both businesses have started the new financial year
well. The Vicon sales pipeline for Quarter 1 is 42% higher than the same time last year, Yotta has a sales pipeline opportunity
for the full year 50% higher than the same time last year.
We operate two market-leading businesses in growing global markets with highly differentiated software products and clear
strategies to continue to drive growth. Our continued strategic investment will support our organic growth initiatives, but we
will also continue to explore acquisition opportunities which can accelerate our strategies within our chosen markets.
We are an international business with staff and customers around the world. We are a net exporter from the UK and given the
nature of our solutions are largely software, we do not anticipate any negative impact to our business from the eventual
outcome of Brexit. These factors and an ever-strengthening pipeline lead us to conclude the year ahead shows every sign of
being yet another exciting year for Oxford Metrics.
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OXFORD METRICS PLC ANNUAL REPORT 2018
FINANCIAL REVIEW
David Deacon, CFO
INCOME STATEMENT
The Group reported revenues of £31.7m (FY17: £29.2m) representing a headline improvement of 8.6%. With a third of the
Group’s revenues derived from the USA this performance was affected by a foreign exchange headwind, where the average
rate for the year was $1.35 (FY17: $1.27). Taking account of this £0.6m effect the underlying revenue growth was 10.7%. From
an Adjusted PBT* perspective the impact was £0.2m as the Group remains naturally hedged to some extent, given we have
USA operations and purchase certain components in US Dollars.
The disposal of Yotta Surveying was finally completed during the year resulting in a loss on disposal net of tax of £0.5m
(FY17: £1.8m).
Gross Profit margins improved to 72.4% (FY17: 70.5%), reflecting a greater proportion of software-related income, and
improved in real terms year-on-year by £2.3m to £22.9m.
Reviewing the cost base within the Income Statement:
•
•
•
Sales, Support and Marketing costs increased due to the annualised effect of investments in Yotta related to the Five-year
Strategic Plan, together with further investments in both Vicon and Yotta during the current year.
Research & Development expensed through the Income Statement increased slightly to £3.3m (FY17: £3.1m) being the
annualised effect of investments in Yotta to support the Five-year Strategic Plan in the previous year. Total R&D investment
including capitalised development costs of £2.1m (FY17: £1.8m) increased reflecting additional product development
within Vicon to £5.4m (FY17: £4.9m).
The Administration charge has risen year-on-year by £0.3m. Increased costs included amortisation for acquired
intangibles, property-related costs, IT costs and adverse FX movements. These costs were mitigated to some extent by
£0.4m credit relating to an adjustment to fair value of deferred consideration payable for the IMeasureU acquisition.
Adjusted PBT* for continuing operations of £5.2m (FY17: £3.9m) has been determined after adding back non-cash moving
items such as Amortisation of Acquired Intangibles, Share Option charge, impairment of investment in Pimloc and Exceptional
Items, which in this year includes an adjustment to fair value of deferred consideration payable for IMeasureU Limited.
STATEMENT OF FINANCIAL POSITION
Goodwill and Intangibles
The movement in Goodwill and Intangibles arises due to capitalisation of R&D of £2.1m (FY17: £1.8m), amortisation of
development costs £1.2m (FY17: £1.3m) and the amortisation of acquired intangibles of £0.6m (FY17: £0.5m).
Property, Plant and Equipment
The increase in Property, Plant and Equipment relates primarily to the relocation of Vicon UK to new premises near Oxford
which offer much improved customer-facing and manufacturing facilities. The addition in this Financial Year relates to the
completion of this relocation.
Investments
The year-on-year movement relates to the impairment of investment in Pimloc Limited. The carrying value has been reduced
by our share of post-acquisition losses from Pimloc’s trading. The net effect accounts for the movement year-on-year.
Inventories
The inventory position at the end of the financial year was £2.4m (FY17: £3.3m). The movement is largely accounted for by a
very strong September close for Vicon and a slightly higher Inventory last year pending the relocation of Vicon manufacturing
to a new facility in October 2017.
Trade and other receivables
At the year-end Accounts Receivable and other receivables increased to £10.6m (FY17: 10.0m). The overall increase primarily
related to accrued income in Yotta from longer term consultancy contracts.
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OXFORD METRICS PLC ANNUAL REPORT 2018
Current Liabilities
The year on year decrease in Trade and Other Payables is accounted for by a reduction in Trade Payables for continuing
operations at the year-end of £1.6m (FY17: £2.4m) arising from payment of earlier inventory replenishment in anticipation of
higher September shipments in Vicon.
Non-current Liabilities
The year-on-year movement is accounted for by a reduction in the Contingent Consideration payable in relation to the
acquisition of IMeasureU Limited of £0.3m (FY17: £0.7m).
STATEMENT OF CASHFLOWS
The Group finished the year with cash of £12.2m (FY17: £9.2m) after receipt of the net consideration of £1.3m for the disposal
of our legacy Surveying business. Cash generated from operating activities was £6.7m (FY17: £5.6m). The deployment of this
cash included the 2017 Final Dividend payment of £1.5m (FY17: £1.2m).
TAX
The Group tax charge this year was £0.6m (FY17: £0.5m) representing a blended rate of 12.1% (FY17: 14.5%) This increase is
largely due trading performance which has been partly mitigated by lower US marginal rate of tax 25% (FY17: 38%). The level
of Group R&D activities in the UK, where the marginal rate of tax of 17% (FY17: 17%), continues to have beneficial effect on
the level of corporation tax payable in the UK given the reliefs available.
The Deferred Tax Asset reduced to £0.2m (FY17: £0.4m) whilst the Deferred Tax Liability increase slightly to £1.8m (FY17: £1.6m).
KEY PERFORMANCE INDICATORS
The Group relies on financial key performance indicators including revenue, profit before tax and adjusted profit before tax (see
note 6) to measure the performance of the Group described below. The Group does not use non-financial key performance
indicators to measure performance.
PRINCIPAL RISKS AND UNCERTAINTIES
The management of the business and the execution of the Group’s strategy are subject to a number of risks. The Group
monitors these risks on a continual basis through the use of a Risk Register and through market intelligence provided by
operational management and determines mitigation plans and actions accordingly. During the financial year under review the
risk profile of the Group has not changed significantly. The key business risks affecting the Group’s ability to deliver on its
strategic objectives are set out below:
Product and technology risk
The Group operates in a complex and competitive technological environment. The business requires continual investment and
innovation in its products and services to maintain its competitive position. In order to mitigate this risk the business has
invested in product marketing with the objective of focusing research and development with specific measurable aims and
goals to meet market needs. The business coordinates each development project with Board monitoring and project
management principles in order to mitigate the length of time that products take to enter the market.
Suppliers
The Group sources certain product components which are only available from a small number of specialist suppliers.
Disruption to the supply chain could have an adverse effect on the business. Where possible, such risks are mitigated by
ensuring ownership of design and intellectual property and maintaining appropriate inventory levels.
Employee Retention
The Group’s performance depends largely on its skilled staff. The loss of key individuals and the inability to recruit individuals
with the right experience and skills could adversely impact the Group’s results. To mitigate these matters, the Group aims to
put in place appropriate management structures and provide competitive remuneration, including share options and where
possible provide continuing career development for key personnel.
Market
The Group operates in multiple geographical markets so there is a risk that territory and global macro-economic conditions
may result in one or more of these markets being adversely affected and the revenues of the business impacted accordingly.
However, by virtue of selling in multiple geographical markets the impact of localised economic downturn in one or a number
of markets is minimised.
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OXFORD METRICS PLC ANNUAL REPORT 2018
The Group operates in multiple service and product segments with specific risks and uncertainties including:
•
Vicon Group
Vicon operates in three distinct areas described below. In mitigation of the risks identified Vicon operates in multiple
geographies, through well-established distributors, who provide insight into local markets and an effective defence
against competitive activity. Furthermore, Vicon has a well-established and respected brand and through continual
innovation maintains a competitive advantage over the competition.
Life Sciences – Our customers are primarily Medical and Educational Institutions funded largely, but not
exclusively, by Government which are subject to National budgetary decisions although in many markets these
areas of spend are protected to some extent.
Engineering – The majority of our customers are largely commercial organisations whose investment decisions are
determined by general macro-economic conditions in their markets so revenues can be affected accordingly. The
remaining customers tend to be higher education research establishments whose funding is ultimately controlled
by National Budgetary decisions.
Entertainment – Our customers are commercial organisations who produce content for the Film, TV and Video
Game market place. Spending in this market tends to be erratic and ultimately driven by consumer demand for
content which by virtue of this market place cannot always be guaranteed.
•
Yotta Group
Infrastructure (including Highways, Street works and Street lighting) – The majority of our customers are ultimately
funded by the UK Government so spending is subject to National Budgetary decisions and priorities. In mitigation, the
business secures long-term service contracts and recurring annual support contracts whenever possible.
Financial
The business has outlined its principal financial risks in note 18 to the accounts. These are broadly summarised as foreign
currency and credit risks. Typically, a third of the Group’s revenues are generated from its US subsidiaries in US dollars,
together with some overseas territories which purchase in US dollars and Euros. Changes in exchange rate could have an
adverse effect on revenues and profitability of the Group. Where possible the Group aims to mitigate this by making purchases
and engaging personnel in local markets.
Non-Financial
The business continually assesses its exposure to non-financial risks. These are broadly summarised as competition,
reputation and product related risks. The Board is cognisant of this information when determining business strategy.
Brexit
Since the decision by the UK to leave the European Union the depreciation of Sterling has had an impact on the cost of goods
imported. In order to mitigate this risk the supply chain is being actively managed. It is uncertain whether tariffs will be applied
to goods exported from the UK into the European Union and the Board are developing plans to minimise any potential impact.
SUMMARY
In summary, Oxford Metrics enters the new financial year with a robust Balance Sheet including a strong cash position and no
debt.
On behalf of the Board
Nick Bolton
Chief Executive and Director
3 December 2018
* Profit Before Tax before group recharges adjusted for share based payments, amortisation of intangibles arising on
acquisition, fair value adjustments to IMeasureU consideration, impairment of Pimloc investment and exceptional costs. The
statutory equivalents and reconciliation of the adjusted numbers shown in this statement are disclosed in notes 4 and 6.
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OXFORD METRICS PLC ANNUAL REPORT 2018
REPORT OF
THE DIRECTORS
The directors present their report together with the audited consolidated and parent Company financial statements for the year
ended 30 September 2018.
Business review
Oxford Metrics plc is a holding Company. The nature of the Group’s operations and its principal activities are set out in the
Strategic Report on pages 3 to 8. Its subsidiary undertakings are shown in note 14. The Strategic Report includes details of the
market overview; key growth drivers; our business model; strategic objectives; principal risks and uncertainties; key
performance indicators and a summary of 2017/18 performance.
Likely future developments
The Group’s likely future developments are discussed within the Strategic Report on page 3.
Share capital
The Company has one class of ordinary shares which carry no right to a fixed income. Full details of changes in share capital
during the year are shown in note 22 to the financial statements. Details of employee share options are set out in note 23.
Dividends
The directors have announced a special dividend of 1.00 pence per share which will absorb an estimated £1,249,000 of
shareholders’ funds. This dividend will be paid on 25 January 2019 to shareholders on the register of members at close of
business on 14 December 2018.
The directors are proposing a final dividend in respect of the financial year ended 30 September 2018 of 1.50 pence per share
which will absorb an estimated £1,874,000 of shareholders’ funds. This dividend, if approved, will be paid on 7 March 2019 to
shareholders on the register of members at close of business on 14 December 2018.
Research and development
During the year, the Group’s continuing operations expensed £3,336,000 (2017: £3,144,000) and discontinued operations
expensed £69,000 (2017: £218,000) in research costs. In addition, £2,125,000 (2017: £1,822,000) of development costs were
capitalised.
Research and development costs are principally the costs of employees involved in research and development, together with
related equipment and materials for hardware development and external costs. Further information regarding the nature and
value to the Group of this expenditure is explained in the Strategic Report.
Directors and their interests
The interests of the directors in the shares of the Company and their interest in options over the shares of the Company at
30 September 2018 are disclosed in the Report on Directors’ Remuneration.
The directors who served during the year were as follows:
Roger Parry
Jonathon Reeve
Adrian Carey
David Quantrell (appointed 21 June 2018)
Julian Morris (resigned 22 February 2018)
Nick Bolton
David Deacon
Catherine Robertson
At the Annual General Meeting of the Company, David Quantrell, Adrian Carey and Jonathon Reeve representing one third of
the Board, will retire and, being eligible, offer themselves for re-election.
Financial instruments
Information about the Group’s management of financial risk can be found in note 18 of the financial statements.
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OXFORD METRICS PLC ANNUAL REPORT 2018
Directors’ indemnity insurance
The directors confirm that qualifying third party indemnity provisions are held.
Employees
The Group ensures that all employees are kept informed, as far as is practical, with regard to the activities of the Group. This is
achieved through the use of staff briefings and electronic communications. It is the Group’s aim that recruitment and
development of staff should be determined solely on ability and other relevant requirements of the job. Disabled persons and
those who become disabled are given the same consideration as others and, depending on their skills, will enjoy the same
prospects as other staff.
The Group considers all forms of discrimination to be unacceptable in the workplace and is committed to promoting equality of
opportunity for all staff and job applicants. This includes in job advertisements, recruitment and selection, training and
development, opportunities for promotion, conditions of service, pay and benefits, conduct at work, disciplinary and grievance
procedures, and termination of employment.
The Group’s policies on Health & Safety are continually under review, ensuring that current practices comply with the laws
applicable in the countries in which it operates.
Going concern
After making relevant enquiries, reviewing the cash flow forecasts for the two year period from the 30 September 2018 and
considering the Group’s risk profile, the directors consider the Group to have adequate resources to continue in operational
existence for the foreseeable future. For this reason they continue to adopt the going concern basis in preparing the financial
statements.
Statement on disclosure of information to auditors
So far as each director is aware, there is no relevant audit information of which the Group’s auditors are unaware. Relevant
information is defined as “information needed by the Group’s auditors in connection with preparing their report”.
Each director has taken all the steps (such as making enquiries of other directors and the auditors and any other steps
required by the director’s duty to exercise due care, skill and diligence) that they ought to have taken as a director in order to
make themselves aware of any relevant audit information and to establish that the Group’s auditors are aware of that
information.
Statement of directors’ responsibilities
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law
and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have
elected to prepare the Group and Company financial statements in accordance with International Financial Reporting
Standards (IFRSs) as adopted by the European Union. Under company law the directors must not approve the financial
statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and Company and of
the profit or loss of the Group for that period. The directors are also required to prepare financial statements in accordance
with the rules of the London Stock Exchange for companies trading securities on the Alternative Investment Market.
In preparing these financial statements, the directors are required to:
•
select suitable accounting policies and apply them consistently;
• make judgements and accounting estimates that are reasonable and prudent;
•
•
state whether they have been prepared in accordance with IFRSs as adopted by the European Union, subject to any
material departures disclosed and explained in the financial statements;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will
continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s
transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to
ensure that the financial statements comply with the requirements of the Companies Act 2006. They are also responsible for
safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and
other irregularities.
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OXFORD METRICS PLC ANNUAL REPORT 2018
Website publication
The directors are responsible for ensuring the annual report and the financial statements are made available on a website.
Financial statements are published on the Group’s website in accordance with legislation in the United Kingdom governing the
preparation and dissemination of financial statements, which may vary from legislation in other jurisdictions. The maintenance
and integrity of the Group’s website is the responsibility of the directors. The directors’ responsibility also extends to the
ongoing integrity of the financial statements contained therein.
Auditors
BDO LLP offer themselves for reappointment as auditors and a resolution will be proposed at the AGM to approve the auditors
reappointment.
On behalf of the Board
David Deacon
Director
3 December 2018
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OXFORD METRICS PLC ANNUAL REPORT 2018
CORPORATE
GOVERNANCE REPORT
Directors’ statement on corporate governance
The Board of Directors is accountable to shareholders for the good corporate governance of the Group. During the year the
Group formally adopted the Quoted Companies Alliance Corporate Governance Code (the QCA Code). The QCA Code aims to
apply the key elements of the UK Corporate Governance Code and other relevant governance guidance to the needs of small
and medium-sized listed PLCs. Details of how we apply the Code and ensure good governance over the business is now
available for all stakeholders to review and understand on our corporate website at oxfordmetrics.com/code. An extract is
provided below.
Establish a strategy and business model which promotes long-term value for shareholders
Our strategy and current five-year plan were launched in December 2016 and set out in the company’s Annual Report and
Accounts. Subsequent Annual Report and Accounts update shareholders as to how the strategy and plans are progressing.
Specifically, the Strategic Report section of the Annual Report and Accounts covers our business model, our strategy and how
we aim to drive long-term value for shareholders.
Embed effective risk management, considering both opportunities and threats throughout the organisation
Internal Audits
The Company has an internal audit function and conducts system audits periodically which include;
•
•
•
•
•
•
•
•
•
ISO9001:2015 Quality Management Systems Vicon Denver – Annually,
ISO9001:2015 Quality Management Systems Vicon Yarnton – 5 times per year,
ISO13485:2016 Medical Quality Management Systems Vicon Yarnton – 5 times per year,
93/42/EEC as amended Medical Devices Directive Production Quality Vicon Yarnton,
ISO9001:2015 Quality Management Systems Yotta – 4 times per year,
ISO14001:2015 Environmental Management Systems Yotta – 4 times per year,
ISO27001:2013 Information Security Management Systems Yotta – 4 times per year,
Information Asset Penetration Testing - Internal 12 days per year and external 7 days per year,
RAPID7 and Business Continuity Exercises.
Risk management and risk register
The Board has embedded an effective risk management framework to identify, evaluate and manage opportunities and risks, in
order to execute the strategy and five-year business plan. The principal risks and uncertainties are discussed in the Strategic
Report on page 7. The Company’s risk register is compiled annually, by non-executive Director, Jonathon Reeve, with input
from senior members of staff from across the Company and presented to the Board to inform its strategy review, and to enable
the Board to identify, manage, and mitigate risks.
Maintain the board as a well-functioning, balanced team led by the Chair
There are three executive, and four non-executive Board members. All non-executive Board members are considered
independent with the exception of Jonathon Reeve who has served on the Board for a period of twelve years and therefore we
do not consider him to be independent. The Board operates formally through meetings of the full Board, and informally through
regular contact between Directors. Matters reserved for the Board include strategy, review and approval of budgets and
forecasts, financial performance and reporting, dividends, risk management, major capital expenditure, and M&A.
The Board is kept informed outside its formal meetings by monthly reports from the Chief Executive that include information on
the Company’s financial and operational performance. Board agenda and information relating to the agenda are sent to Board
members before all formal Board meetings. Board minutes are circulated to all members within 7 days of each Board meeting.
The Remuneration Committee members are Jonathon Reeve (Chair) and Adrian Carey who meet formally on at least two
occasions annually. No director has been absent from a committee meeting. The terms of reference of the Remuneration
Committee is available on page 15 of the Company’s Admission Document.
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OXFORD METRICS PLC ANNUAL REPORT 2018
The Audit Committee members are Adrian Carey and David Quantrell, who meet formally at least two occasions annually. No
director has been absent from a committee meeting. The terms of reference of the Audit Committee is available on page 15 of
the Company’s Admission Document.
The Board acts as a whole as the Nominations Committee and meets when a new director needs to be appointed.
Appointments to the Board are made by consultation with, and the agreement of, the whole Board. Suitable candidates are
sought through external senior recruitment consultants.
The Board meets formally six times a year. No director has been absent from a Board meeting during the 12 months from
1st October 2017 to 30th September 2018 months except for Catherine Robertson who was given permission by the Chair to
absent herself from a Board meeting in order to attend to urgent company business.
Non-executive directors are expected to devote as much time as is necessary for the proper performance of their duties, at a
minimum, 15 days per year or more if serving on a committee. Executive directors are full-time employees and expected to
devote as much time as is necessary for the proper performance of their duties, there is no specific time commitment.
Ensure that between them the directors have the necessary up-to-date experience, skills and capabilities
Directors’ biographies are summarised below and are available on the corporate website.
Roger Parry – Chairman
Roger joined the board in June 2016 with an extensive career in the media sector. Currently Chairman of YouGov plc, Mobile
Streams plc plus a number of private companies. He has held a variety of Chairman roles including Johnston Press plc, Future
plc and Shakespeare’s Globe. Previously he was CEO of Clear Channel International and More Group plc and spent three
years with McKinsey, the international consulting firm and prior to that was a TV and radio journalist with the BBC and ITV.
Adrian Carey – Non-executive Director
Adrian joined the board in November 2012 with almost 30 years of boardroom experience in technology, legal and educational
service sectors. He has been Chairman and Non-executive director to a number of listed, PE and venture backed businesses.
He is currently Non-executive director of Blacktrace Holdings Ltd, BC Arch Ltd and Chairman of the charity OXPIP. In his
earlier career he held a number of other NED positions and was CEO for three companies over 17 years.
David Quantrell – Non-executive Director
David joined the Board in June 2018 with more than 30 years of senior management experience across a range of high growth
global software businesses including HP, Mercury Interactive and McAfee. Most recently he was Senior Vice President and a
member of the Global Management Team at Box, the cloud storage company, where he helped to establish the brand in
Europe in a period where the Company experienced dramatic growth and a successful IPO.
Jonathon Reeve – Non-executive Director
Jonathon joined the Board in 2006. A professional engineer with more than 35 years’ experience in the Royal Navy where he
served on the Navy Board and subsequently as a consultant engineer to a wide range of companies, both large and small. He
brings particular experience in the management of change and risk, key elements of Board focus in a rapidly changing
technology company.
Nick Bolton – CEO
Nick joined Oxford Metrics Ltd (pre-IPO OMG) in 1995 and spent four years establishing the company’s motion capture
products in the entertainment market. In 1999, he left to pursue a series of successful product management and marketing
roles within international technology businesses, including Micromuse and start-up Lexicle. In 2002, he joined AIM-listed
Mediasurface, with responsibility for all the company’s marketing activities and in 2005, returned to join the Oxford Metrics
management team.
David Deacon – CFO
David joined Oxford Metrics in 2008 as Chief Financial Officer. Before joining he was CFO of AIM listed Mediasurface for five
years where he successfully floated the business in 2004 and concluded the disposal of the business in 2008 to Alterian plc.
Prior to this he held senior financial positions with R.L Polk & Co, Wonderware Inc. and Kalamazoo Computer Group plc.
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OXFORD METRICS PLC ANNUAL REPORT 2018
Cathy Robertson – Executive Director and Company Secretary
Cathy joined Oxford Metrics in 1985 and was Financial Controller for 10 years. She has over 30 years’ experience in law,
finance, and administration. Prior to joining the Group she began her career with the UK subsidiary of a US company, working
with the founders to establish a thriving electronics business.
Directors are able at the Company’s expense to seek independent professional advice and training as required to support their
role either as a member of a Board committee or for any matter within the terms of reference of the Board. A list of the
Company’s external advisors is available on page 64.
The Audit Committee works with the company’s auditor BDO. The Company Secretary is supported by N+1 Singer, (NOMAD),
and Goodman Derrick LLP. The Remuneration Committee is supported by PwC on matters falling under its terms of reference,
and the Company Secretary. The Company Secretary advises the Board on a range of regulatory and compliance matters.
Evaluate board performance based on clear and relevant objectives, seeking continuous improvement
An overview of Directors’ responsibilities can be found within the Report of the Directors’ on page 10.
The Chief Executive’s objectives are set by the Chair and the Remuneration Committee in consultation with other non-
executive Board members, and the objectives of the executive directors are set by the Chair and the Remuneration Committee
in consultation with the Chief Executive. The Board has an annual effectiveness review cycle consisting of reviews of the
performance of executive members of the Board by the Non-executive Board members, and a review of the Chairman’s
performance by all other non-executive and executive directors.
The Board reviews its performance against its objectives to provide entrepreneurial leadership of the Company within a
framework of prudent and effective controls, set the Company’s strategic aims and ensure the necessary resources are in
place to meet these aims, to provide effective leadership to ensure the Company’s values and standards are upheld, and to
fulfil its obligations to shareholders and stakeholders.
Non-executive directors are expected to devote as much time as is necessary for the proper performance of their duties, at a
minimum, 15 days per year or more if serving on a committee. This will include attendance at a minimum of six Board
meetings, the AGM, at least one annual Board away day a year, at least one site visit a year, meetings of the non-executive
directors, meetings with shareholders, meetings forming part of the Board evaluation process and updating and training
meetings. All the executive directors are full time employees of the company.
The Board keeps the issue of Board effectiveness under continual review and will continue to consider best practice in matters
relating to Board effectiveness, consistent with the size, range of activities, and stage of development of the Company.
Succession plans for all members of the company’s Board and senior managerial roles across the Company are in place and
are regularly reviewed.
Promote a corporate culture that is based on ethical values and behaviours
The Board is committed to promoting a socially responsible culture throughout the Company and encouraging high ethical
standards in all its activities. The Company’s culture is communicated to the employees through engagement, and employees
are expected to exercise high ethical and moral standards at all times in their dealings with the Company’s stakeholders. The
Company has an anti-bribery policy and is committed to the elimination of modern slavery and human trafficking in its supply
chain.
The Company’s recruitment and employment policies are under continual review in order to maintain high ethical standards
and best practice, and to provide a working environment in which its employees are able to realise their potential and
contribute to the business. Applications are given full and fair consideration irrespective of nationality, ethnic origin, religion,
disability, sexual orientation, age, marital or civil partnership status or gender identity. The Company is committed to providing
for the health and safety of its employees and visitors to its premises through use of best practice and regular audits of the
Company’s Health and Safety policy and practices by external consultants.
Communicate how the company is governed and is performing by maintaining a dialogue with shareholders and other
relevant stakeholders
The Company holds an Annual General Meeting annually in February. Agendas for General Meetings for the last 5 financial
years are available on the corporate website. There have been no resolutions put to a general meeting that have resulted in
less than 80% of the votes cast in favour of the resolution in the last 5 years. The Company’s historic annual reports are
available here.
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OXFORD METRICS PLC ANNUAL REPORT 2018
The Board consider that information available in these and previous Financial Statements together with the corporate website
provide sufficient information with regard to the reporting of the Audit Committee and Remuneration Committee activity. The
Board will continue to review the disclosure of the Audit and Remuneration Committee.
As well as the Company’s general meeting with shareholders, the Chief Executive and Chief Financial Officer give formal
presentations to significant shareholders twice each year and have primary responsibility for communicating the views of these
shareholders to the Board.
The Board does not currently recognise any constraints or circumstances that affect the Company uniquely.
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OXFORD METRICS PLC ANNUAL REPORT 2018
REPORT ON DIRECTORS’
REMUNERATION
The Directors’ Remuneration Report Regulations are not a requirement for AIM listed companies. However, set out below are
certain disclosures relating to directors’ remuneration.
Remuneration Committee
The Remuneration Committee is made up of two non-executive directors. The terms of reference of the Committee are to
review and make recommendations to the Board regarding the terms and conditions of employment of the executive directors.
Service agreements
No director has a service agreement with a notice period that exceeds 12 months.
Policy on directors’ remuneration
The remuneration is set by comparison to market rates at levels to attract, retain and motivate the best staff, recognising that
they are key to the ongoing success of the business.
Directors’ remuneration
The remuneration of directors who served during the year, excluding share based payments, was as follows:
Salary
£’000
Bonus
£’000
Gains on
the exercise
of share
options
£’000
Benefits
in kind
£’000
R Parry (Chairman)
J Reeve (Non Executive Director)
A Carey (Non Executive Director)
D Quantrell (Non Executive Director)
J Morris (Non Executive Director)
N Bolton (Chief Executive Officer)
C Robertson (Secretary and
Executive Director)
D Deacon (Chief Finance Officer)
65
34
34
9
14
261
125
197
739
Directors’ share options
-
-
-
-
-
123
29
74
226
-
-
-
-
3
1
1
1
6
-
-
-
-
-
740
-
370
2018
2018
Pension
Total contributions
£’000
£’000
-
-
-
-
-
-
65
34
34
9
17
1,125
155
642
1,110
2,081
17
-
17
2017
2017
Pension
Total contributions
£’000
£’000
66
33
33
-
35
382
152
266
967
-
-
-
-
1
-
16
-
17
Interests in share options for directors who served during the year were as follows:
A Carey
C Robertson
N Bolton
N Bolton
D Deacon
D Deacon
At 30 September
2018
Number
At 1 October
2017
Number
Exercise price
Exercise period
31.18p
59.06p
0.25p
0.00p
0.25p
0.00p
77,194
400,000
-
1,200,000
-
600,000
2,277,194
400,000
77,194 September 2015 to September 2023
September 2019 to July 2027
1,208,500 September 2015 to September 2022
December 2019 to December 2026
1,200,000
604,250 September 2015 to September 2022
December 2019 to December 2026
600,000
4,089,944
The vesting of options, other than the long term incentive plans (LTIPs) described below, takes place proportionally over time
which is typically a period of three years. The vesting of options is not subject to any performance criteria, other than remaining
in employment.
During the prior year a new LTIP was implemented with an exercise price of 0.00p. These share options will vest in a quantity
subject to the achievement of certain performance targets based on total shareholder returns over a period of 36 consecutive
months which commenced on 1 January 2016. This 36 month performance period ends on 31 December 2018 and it is
considered likely, given the information available to date, that these options will vest in full.
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OXFORD METRICS PLC ANNUAL REPORT 2018
The average share price for the year was 69.16 pence (2017: 51.29 pence) and the closing share price was 76.70 pence
(2017: 58.75 pence).
Directors’ interests
The directors who held office at the end of the financial year had the following beneficial interests in the ordinary share capital
of Oxford Metrics plc at 30 September 2018 and at 1 October 2017 according to the register of directors’ interests.
Ordinary shares
of 0.25p
2017
Number
2018
Number
Percentage of issued
share capital
2017
%
2018
%
194,093
36,288
200,774
1,439,201
2,383,565
1,146,821
153,770
36,288
200,721
1,439,201
1,791,246
850,661
0.16
0.03
0.16
1.15
1.91
0.92
0.12
0.03
0.16
1.17
1.46
0.69
R Parry
J Reeve
A Carey
C Robertson
N Bolton
D Deacon
By order of the Remuneration Committee
Jonathon Reeve
Chairman
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OXFORD METRICS PLC ANNUAL REPORT 2018
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
OXFORD METRICS PLC
Opinion
We have audited the financial statements of Oxford Metrics plc (the ‘parent company’) and its subsidiaries (the ‘group’) for the
year ended 30 September 2018 which comprise the Consolidated Income Statement, Consolidated Statement of
Comprehensive Income , Consolidated and Company Statement of Financial Position, Consolidated and Company Statement
of Cashflows, Consolidated and Company Statement of Changes in Equity and notes to the financial statements, including
a summary of significant accounting policies.
The financial reporting framework that has been applied in the preparation of the financial statements is applicable law and
International Financial Reporting Standards (IFRSs) as adopted by the European Union and, as regards the parent company
financial statements, as applied in accordance with the provisions of the Companies Act 2006.
In our opinion:
•
•
•
•
the financial statements give a true and fair view of the state of the group’s and of the parent company’s affairs as at
30 September 2018 and of the group’s profit for the year then ended;
the group financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union;
the parent company financial statements have been properly prepared in accordance with IFRSs as adopted by the
European Union and as applied in accordance with the provisions of the Companies Act 2006; and
the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial
statements section of our report. We are independent of the group and the parent company in accordance with the ethical
requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard as
applied to listed entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you
where:
•
•
the directors’ use of the going concern basis of accounting in the preparation of the financial statements is not
appropriate; or
the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant
doubt about the group’s or the parent company’s ability to continue to adopt the going concern basis of accounting for
a period of at least twelve months from the date when the financial statements are authorised for issue.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial
statements of the current period and include the most significant assessed risks of material misstatement (whether or not due
to fraud) we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in
the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the
financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these
matters.
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OXFORD METRICS PLC ANNUAL REPORT 2018
We set out below the risks that had the greatest impact on our audit strategy and scope:
Revenue recognition
Risk
Response
The group’s revenue recognition policies are included with the
accounting policies on pages 30 and 31 and the components
of revenue are set out in notes 3 and 4.
We reviewed the revenue recognition policies applied to each
of the group’s revenue streams and considered their
compliance with IAS18 ‘Revenue’.
We tested a sample of revenue transactions for each material
income stream to determine correct valuation and check the
completeness of revenue and that it was accurately recorded
within the accounting system in the correct accounting
period.
We tested deferred revenue by re-performing calculations for
a sample of deferred balances. We reviewed management’s
assessment of support cost deferrals, including expected
future costs, analysis of historic costs and data and assessed
whether assumptions made are appropriate.
Based on the results of our work we concurred with
management’s application of the group’s revenue recognition
policies.
The group’s revenue is a key performance indicator for the
market upon which the results of the group will be assessed.
The group primarily generated revenue from continuing
activities from two main operating businesses:
–
–
Vicon – which sells motion capture camera systems and
related hardware, software and support; and,
Yotta – focussed on the sale of software and associated
services. These are sold on a SAAS and perpetual license
and maintenance basis.
Management exercises judgement in recognising revenue as
set out in note 3(e) to the financial statements, including the
extent of deferral of income relating to ongoing support and
maintenance obligations in Vicon.
In view of the judgements involved we considered that these
matters gave rise to a significant risk of misstatement in the
financial statements. Significant risks over revenue
recognition include:
–
Incorrect calculation and appropriate judgement in the
estimation of support revenues to be deferred; and
– Completeness of revenue and ensuring that revenue is
recorded in the accounting system in the correct period.
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OXFORD METRICS PLC ANNUAL REPORT 2018
Development expenditure capitalisation and carrying value
Risk
Response
We reviewed the policies and procedures regarding research
and development expenditure and considered their
compliance with the requirements of IFRSs.
For each significant development project, we:
–
–
–
tested a sample of expenditure to third party
documentation and timecard records;
reviewed management’s assessment by project and
challenged their assumptions at the balance sheet date
through discussion with management and comparison to
other corroborating evidence; and,
evaluated management’s use of updated sales forecasts
by project, in consideration of useful economic life.
We also reviewed management’s impairment considerations
by development project where necessary, which included
assessment of the reasonableness of key assumptions.
Based on the results of our work we concurred with
management’s accounting for the capitalisation and
assessment of carrying values of development expenditure
and that it was in accordance with the accounting standards.
The group incurs substantial development costs of which
certain amounts are capitalised as intangible assets.
Development costs of £2,124k (2017: £1,822k) were
capitalised in the year across various key projects.
Capitalised development expenditure is amortised over a
period of 2 to 7 years, which is based on the expected
lifecycle of the product developed. At 30 September 2018
the group’s carrying value of development costs is £5,723k
(2017: £4,775k).
Development costs are a significant expense and asset of the
group. Manipulation of those costs capitalised could have a
material impact on the profit performance of the group in the
current year and going forward.
The group’s policy is included with the accounting policies on
page 31 and the significant judgements are set out in note 3.
Management exercises judgement in consideration of
individual projects, including the expected future economic
benefits, the allocation of resources and the period over
which they anticipate return.
In view of the judgements involved we considered that these
matters gave rise to a significant risk of misstatement in the
financial statements.
Risks over existence, accuracy and valuation of capitalised
development costs include:
– Overstatement of the balance as a result of including
expenditure amounts which do not meet the criteria for
capitalisation under IFRSs;
–
–
–
Existence of costs captured within the timecard system
and subsequently capitalised;
Projects no longer meeting the criteria for capitalisation
and the potential for impairment; and,
Inaccurate periods for useful economic life leading to
errors in the amortisation charge.
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OXFORD METRICS PLC ANNUAL REPORT 2018
Carrying value of goodwill and other recognised intangibles
Risk
Response
The group’s accounting policy for intangible assets is
included within the accounting policies on page 31 and the
significant judgements are set out in note 3. The components
of intangible assets are set out in note 11.
Acquisitions have given rise to significant intangible asset
balances. At 30 September 2018 the group’s goodwill and
other recognised intangible assets comprise £3,623k (2017:
£3,611k) of goodwill, £2,139k (2017: £2,490k) of intellectual
property and £876k (2017: £1,193k) of customer contracts
and related relationships.
In accordance with IFRSs, at the end of the reporting period,
management have assessed whether there is any indication
that the above assets may be impaired.
Significant judgement is exercised when determining the
variables and assumptions used to calculate the values in use
of cash generating units (“CGU’s”), which were used to
determine whether there is any impairment of goodwill and
intangible assets (IP and customer relationships).
Given the results for the first full year post-acquisition of the
Vicon IMU business have not met expectations compared to
budget there was a risk of impairment of the related goodwill
and other recognised intangibles.
Our application of materiality
We reviewed the policies and procedures regarding carrying
value of goodwill and intangibles and considered their
compliance with the requirements of IFRSs.
For each significant CGU, we:
-
reviewed management’s impairment reviews which
included discounted cash flow forecasts. We reviewed
the detailed forecasts and supporting evidence for
management’s reviews to substantiate the underlying
assumptions including predicted growth rates;
- we used our own valuations specialists to consider the
appropriateness of discount rates used; and,
-
reviewed and challenged management assumptions,
including revenue performance and profitability in FY18
against budgeted expectations.
Based on the results of our work we concurred with
management’s assessment of the goodwill impairment and
that the remaining carrying values require no impairment.
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements.
For planning, we consider materiality to be the magnitude by which misstatements, including omissions, could influence the
economic decisions of reasonable users that are taken on the basis of the financial statements. In order to reduce to an
appropriately low level the probability that any misstatements exceeded materiality, we use a lower level, “performance
materiality”, to determine the extent of testing needed. Importantly, misstatements below these levels will not necessarily be
evaluated as immaterial as we also take account of the nature of identified misstatements, and the particular circumstances of
their occurrence, when evaluating their effect on the financial statements as a whole.
The materiality for the group financial statements as a whole was set at £295,000 (2017: £300,000). This was determined with
reference to the group’s profit before tax (2017: group’s revenue). Performance materiality was set at 75% of the group
materiality level.
Where financial information from components was audited separately, component materiality was set for this purpose at lower
levels, varying between 47% and 88% of group materiality.
We agreed with the Audit Committee that we would report to the committee all individual audit differences in excess of
£14,750. We also agreed to report differences below this threshold that, in our view, warranted reporting on qualitative
grounds.
An overview of the scope of our audit
The group comprised the parent company and 8 trading subsidiaries, Vicon Motion Systems Limited, Vicon Motion Systems
Inc, Yotta Limited, Yotta Surveying Limited, Yotta Pty Ltd, OMG Life Ltd, IMeasureU Limited, IMeasureU Inc and 5 dormant
companies.
Full scope audits of Vicon Motion Systems Limited, Yotta Limited and OMG Life Ltd were performed by BDO LLP.
Vicon Motion Systems Inc is based in Denver, in the United States of America, and as a significant component of the group,
a full scope audit was performed by a member of the BDO US Alliance network.
There has been a change in scope from the prior year with regards to Yotta Surveying Limited due to its disposal from the
group. Group level procedures were performed by BDO LLP on both Yotta Surveying Limited and IMeasureU Limited.
21
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OXFORD METRICS PLC ANNUAL REPORT 2018
Analytical procedures were performed at group level on Yotta Pty Limited, IMeasureU Inc and the 5 dormant companies which
were not subject to audit as they are not significant to the group.
The group audit team was actively involved in directing the audit strategy of the component auditor in Denver. The group audit
team reviewed in detail the findings of work performed and considered the impact of these upon the group audit opinion.
Other information
The directors are responsible for the other information. The other information comprises the information included in the annual
report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not
cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the
audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material
misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material
misstatement of the other information. If, based on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
•
•
the information given in the strategic report and the directors’ report for the financial year for which the financial
statements are prepared is consistent with the financial statements; and
the strategic report and the directors’ report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the
course of the audit, we have not identified material misstatements in the strategic report or the directors’ report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report
to you if, in our opinion:
•
•
•
adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been
received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement set out on page 10, the directors are responsible for the
preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control
as the directors determine is necessary to enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the group’s and the parent company’s ability
to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis
of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have
no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
22
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OXFORD METRICS PLC ANNUAL REPORT 2018
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting
Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Use of our report
This report is made solely to the parent company’s members, as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so that we might state to the parent company’s members those
matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law,
we do not accept or assume responsibility to anyone other than the parent company and the parent company’s members as a
body, for our audit work, for this report, or for the opinions we have formed.
Simon Brooker (Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor
Reading
United Kingdom
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
23
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OXFORD METRICS PLC ANNUAL REPORT 2018
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 30 SEPTEMBER 2018
Revenue
Cost of sales
Gross profit
Sales, support and marketing costs
Research and development costs
Administrative expenses
Other operating income
Operating profit
Finance income
Finance expense
Share of post-tax loss of equity accounted associate
Profit before taxation
Taxation
Profit from continuing operations
Loss from discontinued operations, net of tax
Profit attributable to owners of the parent during the year
Earnings per share for profit on continuing operations attributable to owners of
the parent during the year
Basic earnings per ordinary share (pence)
Diluted earnings per ordinary share (pence)
Earnings per share for profit on total operations attributable to owners of
the parent during the year
Basic earnings per ordinary share (pence)
Diluted earnings per ordinary share (pence)
CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME FOR THE YEAR
ENDED 30 SEPTEMBER 2018
Net profit for the year
Other comprehensive income
Items that will or may be reclassified to profit or loss
Exchange differences on retranslation of overseas subsidiaries
Recycling of hedging instrument
Total other comprehensive expense
Total comprehensive income for the year attributable to owners of the parent
The notes on pages 29 to 65 are an integral part of these financial statements.
24
Note
4
5
8
10
5
9
9
9
9
2018
£’000
31,656
(8,743)
22,913
(7,526)
(3,336)
(7,467)
173
4,757
73
(172)
(75)
4,583
(556)
4,027
2017
£’000
29,155
(8,599)
20,556
(6,753)
(3,144)
(7,231)
297
3,725
29
-
(87)
3,667
(533)
3,134
(484)
(2,127)
3,543
1,007
3.23p
3.12p
2.55p
2.49p
2.84p
2.75p
0.82p
0.80p
Group
2018
£’000
3,543
(173)
-
(173)
3,370
Group
2017
£’000
1,007
(208)
158
(50)
957
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OXFORD METRICS PLC ANNUAL REPORT 2018
CONSOLIDATED AND COMPANY STATEMENT OF FINANCIAL
POSITION AS AT 30 SEPTEMBER 2018
COMPANY NUMBER: 3998880
Non-current assets
Goodwill and intangible assets
Property, plant and equipment
Financial asset - investments
Deferred tax asset
Current assets
Inventories
Trade and other receivables
Current tax debtor
Cash and cash equivalents
Assets classified as held for sale
Current liabilities
Trade and other payables
Current tax liabilities
Note
11
13
14
19
15
16
25
17
Group
2018
£’000
12,361
2,496
157
230
15,244
2,403
10,576
101
12,229
25,309
Group
2017
£’000
Company
2018
£’000
Company
2017
£’000
12,069
1,948
232
377
14,626
3,330
9,992
-
9,185
22,507
-
29
14,152
143
14,324
-
16,567
-
1,231
17,798
-
37
14,227
232
14,496
-
11,281
-
2,698
13,979
-
3,047
-
1,000
(8,167)
-
(8,167)
(9,086)
(408)
(9,494)
(7,082)
-
(7,082)
(7,193)
-
(7,193)
Liabilities directly associated with assets classified
as held for sale
25
-
(584)
-
-
Net current assets
Total assets less current liabilities
17,142
32,386
15,476
30,102
10,716
25,040
7,786
22,282
Non-current liabilities
Other liabilities
Provisions
Deferred tax liability
Net assets
Capital and reserves attributable to
owners of the parent
Share capital
Shares to be issued
Share premium account
Retained earnings
Foreign currency translation reserve
Total equity shareholders’ funds
20
21
19
22
24
24
24
24
(631)
(8)
(1,777)
(2,416)
(1,003)
(185)
(1,619)
(2,807)
-
-
-
-
-
-
-
-
29,970
27,295
25,040
22,282
312
65
17,327
12,022
244
29,970
308
65
17,302
9,549
71
27,295
312
65
17,327
7,458
(122)
25,040
308
65
17,302
4,688
(81)
22,282
The profit of the Company for the year ended 30 September 2018 was £4,029,000 (30 September 2017: loss of £1,173,000).
The financial statements on pages 24 to 65 were approved and authorised for issue by the Board of Directors on 3 December
2018 and signed on its behalf by
Nick Bolton
Director
David Deacon
Director
The notes on pages 29 to 65 are an integral part of these financial statements.
25
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OXFORD METRICS PLC ANNUAL REPORT 2018
CONSOLIDATED AND COMPANY STATEMENT OF CASHFLOWS
FOR THE YEAR ENDED 30 SEPTEMBER 2018
Group
2017
£’000
Company
2018
£’000
Company
2017
£’000
Note
Cash flows from operating activities
Operating profit/(loss) from continuing operations
Operating loss from discontinued operations
Group operating profit/(loss)
Depreciation and amortisation
Impairment of intangibles
Impairment of investment
Loss/(profit) on the sale of property, plant and equipment
Profit on sale of intellectual property to associate undertaking
Loss on disposal of subsidiary undertaking
Share-based payments
Exchange adjustments
Decrease/(increase) in inventories
(Increase)/decrease in receivables
(Decrease)/increase in payables
Cash generated from operating activities
Group
2018
£’000
4,757
(483)
4,274
2,479
-
-
3
-
445
323
89
941
(184)
(1,635)
6,735
3,725
(2,139)
1,586
2,166
1,630
-
(39)
(208)
-
142
(360)
(640)
664
655
5,596
Tax (paid)/received
(727)
18
(720)
-
(720)
21
-
-
-
-
896
145
(43)
-
(953)
(109)
(763)
-
(5,964)
-
(5,964)
24
-
6,558
-
(208)
-
119
40
-
(1,902)
1,482
149
-
Net cash from operating activities
6,008
5,614
(763)
149
Cash flows from investing activities
Purchase of property, plant and equipment
Purchase of intangible assets
Proceeds on disposal of property, plant and equipment
Interest received
Interest arising on contingent consideration
Proceeds on disposal of subsidiary undertakings
net of cash disposed of
Acquisition of subsidiary undertaking net of cash acquired
Net cash used in investing activities
Cash flows from financing activities
Issue of ordinary shares
Equity dividends paid
(1,243)
(2,125)
154
73
(172)
1,295
(76)
(1,680)
(1,822)
55
29
-
2,109
(2,042)
(2,094)
(3,351)
(14)
-
-
8
-
772
-
766
(22)
-
-
13
-
-
-
(9)
29
(1,499)
473
(1,224)
29
(1,499)
473
(1,224)
10
26
30
Net cash used in financing activities
(1,470)
(751)
(1,470)
(751)
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of the period
Cash and cash equivalents at end of the period
Amount included in cash and cash equivalents
Amount included in assets classified as held for sale
Total cash and cash equivalents at end of the period
2,444
9,785
12,229
12,229
-
12,229
1,512
(1,467)
(611)
8,273
2,698
3,309
9,785
9,185
600
9,785
1,231
1,231
-
1,231
2,698
2,698
-
2,698
The notes on pages 29 to 65 are an integral part of these financial statements.
26
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OXFORD METRICS PLC ANNUAL REPORT 2018
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2018
Foreign
Cash flow currency
hedging translation
reserve
reserve
£’000
£’000
Total
£’000
26,829
1,007
279
-
(208)
(208)
-
-
-
-
-
158
118
(1,224)
473
142
71
-
27,295
3,543
173
-
-
-
-
173
106
(1,499)
29
323
244
29,970
(158)
-
-
158
-
-
-
-
-
-
-
-
-
-
-
-
Group
Balance as at 1 October 2016
Net profit for the year
Share
capital
£’000
303
-
Shares
to be
issued
£’000
65
-
Share
premium
account
£’000
16,834
-
Retained
earnings
£’000
9,506
1,007
Exchange differences on retranslation
of overseas subsidiaries
Recycling of hedging instrument
Tax recognised directly in equity
Transactions with owners:
Dividends
Issue of share capital
Share based payment charge
-
-
-
-
5
-
-
-
-
-
-
-
-
-
-
-
468
-
Balance as at 30 September 2017
308
65
17,302
Net profit for the year
Exchange differences on retranslation
of overseas subsidiaries
Tax recognised directly in equity
Transactions with owners:
Dividends
Issue of share capital
Share based payment charge
-
-
-
-
4
-
-
-
-
-
-
-
-
-
-
-
25
-
Balance as at 30 September 2018
312
65
17,327
-
-
118
(1,224)
-
142
9,549
3,543
-
106
(1,499)
-
323
12,022
The notes on pages 29 to 65 are an integral part of these financial statements.
27
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OXFORD METRICS PLC ANNUAL REPORT 2018
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2018
Foreign
Cash flow currency
hedging translation
reserve
reserve
£’000
£’000
Total
£’000
23,824
(1,173)
41
158
64
(1,224)
473
119
(122)
-
41
-
-
-
-
-
(81)
22,282
-
4,029
(41)
(41)
-
-
-
-
95
(1,499)
29
145
(122)
25,040
(158)
-
-
158
-
-
-
-
-
-
-
-
-
-
-
-
Company
Balance as at 1 October 2016
Net loss for the year
Share
capital
£’000
303
-
Shares
to be
issued
£’000
65
-
Share
premium
account
£’000
16,834
-
Retained
earnings
£’000
6,902
(1,173)
Exchange differences on retranslation
of overseas subsidiaries
Loss on hedging instrument
Tax recognised directly in equity
Transactions with owners:
Dividends
Issue of share capital
Share based payment charge
-
-
-
-
5
-
-
-
-
-
-
-
-
-
-
-
468
-
Balance as at 30 September 2017
308
65
17,302
Net profit for the year
Exchange differences on retranslation
of overseas subsidiaries
Tax recognised directly in equity
Transactions with owners:
Dividends
Issue of share capital
Share based payment charge
-
-
-
-
4
-
-
-
-
-
-
-
-
-
-
-
25
-
Balance as at 30 September 2018
312
65
17,327
-
-
64
(1,224)
-
119
4,688
4,029
-
95
(1,499)
-
145
7,458
The notes on pages 29 to 65 are an integral part of these financial statements.
28
252680 Oxford Metrics AR pp29-pp66.qxp_252680 Oxford Metrics AR pp26-pp65.qxp 11/12/2018 14:48 Page 29
OXFORD METRICS PLC ANNUAL REPORT 2018
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2018
1.
Basis of preparation of the financial statements
The consolidated and parent Company financial statements of Oxford Metrics plc have been prepared in accordance with
International Financial Reporting Standards as adopted by the European Union (IFRS as adopted by the EU), IFRIC
interpretations and the Companies Act 2006 applicable to companies reporting under IFRS.
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 areas involving a higher degree
of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial
statements are disclosed in note 3.
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not
presented its own income statement in these financial statements.
Changes in accounting standards
International Accounting Standards (IAS/IFRS)
The following amendments to standards have been adopted during the period:
•
•
Amendments to IAS 12 ‘Recognition of deferred tax assets for unrealised losses’
Amendments to IAS 7 ‘Statement of cash flows’
The adoption of the above amendments to standards has not had a material impact on the financial statements during the
period ended 30 September 2018.
At the date of authorisation of these financial statements the following standards, amendments to standards and interpretations,
which have not been adopted early in these financial statements, were issued by the IASB, but not yet effective:
•
•
•
•
•
•
•
•
•
•
•
IFRS 9 ‘Financial instruments’
IFRS 15 ‘Revenue from contracts with customers’
IFRS 16 ‘Leases’
IFRS 17 ‘Insurance Contracts’
Amendments to IAS 40 ‘Transfers of investment property’
Amendments to IFRS 15 ‘Revenue from contracts with customers’
Amendments to IFRS 2 ‘Share based payments’
Amendments to IFRS 4 ‘Insurance contracts’
Amendments to IFRIC 22 ‘Foreign currency transactions and advance consideration’
Amendments to IFRIC 23 ‘Uncertainty over income tax treatments’
Annual improvements to IFRS’s (2014-2016) cycle
At the date of authorisation of these financial statements, the directors have considered the standards and interpretations
which have not been applied in these financial statements that were in issue but not yet effective (and in some cases had not
yet been adopted by the EU). The directors consider that IFRS 9 ‘Financial instruments’, IFRS 15 ‘Revenue from contracts with
customers’ and IFRS 16 ‘Leases’ are relevant to the Group.
IFRS 15 ‘Revenue from contracts with customers’ is applicable for periods beginning on or after 1 January 2018. Under
IFRS 15, revenue should be recognised to depict the transfer of goods and services to customers in an amount that reflects
the consideration to which the entity expects to be entitled. IFRS 15 also includes specific guidance for multi element
arrangements, contract costs and disclosures. An assessment has been made of the impact of IFRS 15 on the way in which
revenue will be recognised across the Group. Whilst most revenue streams within Yotta and Vicon will not be materially
affected by the move to IFRS 15, there will be an impact on the way in which revenue from system sales within Vicon is
recognised. These system sales are multi element and include the sale of hardware, software and ongoing support.
29
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OXFORD METRICS PLC ANNUAL REPORT 2018
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2018
The Group is still gathering data to finalise the impact on its result for 2018 had IFRS 15 been applied this year, but estimates
that revenue from continuing operations would have been approximately £872,000 lower with a corresponding increase in
deferred income. This increase in deferred income is due to a change from internal cost to external sales price basis on the
recognition of support revenue from multi element sales. Furthermore, the tax charge for continuing operations would be
approximately £148,000 lower, with profit after tax from continuing operations and net assets therefore being approximately
£724,000 lower. Reported basic and diluted earnings per share from continuing operations for the year ended 30 September
2018 would have been 2.65p and 2.56p respectively. There would have been no impact on discontinued operations.
The Group will apply a cumulative adjustment on adoption of IFRS 15 and therefore do not expect the reported results for the
year ended 30 September 2018 to change.
Under IFRS 16 ‘Leases’ all leases are accounted for under a single accounting model for the lessee. All leases with a term of
more than 12 months will result in the recognition of an asset and liability, unless the underlying asset is of low value, and
depreciation of lease assets will be recognised separately from interest on lease liabilities in the income statement. Leases
currently designated as operating leases in note 29 will be impacted. The Group is currently working to finalise the impact on
its financial statements when it adopts IFRS 16 on 1 October 2019 but estimates that both the lease liability and right of use
asset to be recognised will be approximately £2,000,000. The directors do not consider the application of IFRS 16, once
effective, to have a material impact on the consolidated income statement.
The directors are also assessing whether the application of IFRS 9, once effective, will have a material impact on the results
of the Group.
Adoption of the other standards and interpretations referred to above is not expected to have a material impact on the results
of the company. Application of these standards may result in some changes in presentation of information within the
Company’s financial statements.
2.
Accounting policies
The principal accounting policies applied in the preparation of these consolidated and parent Company financial statements
are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.
Basis of consolidation
The consolidated financial statements consolidate those of the Company and all of its subsidiary undertakings drawn up to
30 September 2018.
Where the company has control over an investee, it is classified as a subsidiary. The company controls an investee if all three
of the following elements are present: power over the investee, exposure to variable returns from the investee, and the ability of
the investor to use its power to affect those variable returns. Control is reassessed whenever facts and circumstances indicate
that there may be a change in any elements of control.
Subsidiary undertakings are fully consolidated from the date on which control is transferred to the Group. They are
deconsolidated from the date on which control ceases. Acquisitions of subsidiaries are dealt with by the acquisition method of
accounting from the date of acquisition. Inter-company balances and transactions are eliminated on consolidation.
Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating
Decision Maker. The Chief Operating Decision Maker has been identified as the Board of Directors of Oxford Metrics plc.
Revenue
Revenue represents the fair value of consideration received or receivable arising from the provision of goods and services to
third party customers, net of VAT, and trade discounts.
Within Vicon and Yotta revenue is recognised on the delivery of the product or service, with a deferral made for the fair value of
the undelivered element under the terms of the sale. This undelivered element relates to ongoing hardware and software
support, the fair value of which is calculated by reference to the anticipated cost, plus a margin, of providing the support
service and is consistent with the stand alone selling price of this element of the sale. Revenue not recognised in the income
statement under this policy is classified as deferred income in the statement of financial position. Revenue from services is
recognised as the work is performed. Revenue is only recognised where there is appropriate evidence of an arrangement,
where the consideration is fixed and determinable and where collectability is reasonably assured.
30
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OXFORD METRICS PLC ANNUAL REPORT 2018
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2018
Within Vicon a small number of sales are made through independent third party distributors. In this instance revenue is
recognised on delivery of the product to the distributor. No sales to third party distributors are made on a sale or return basis.
Within Yotta, survey contracts are accounted for in accordance with IAS 18, ‘Revenue’. Where the outcome of the contract can
be estimated reliably, revenue is recognised by reference to the total sales value and the stage of completion of the survey
contracts. The Group has adopted the following policy for assessing the stage of completion of these survey contracts, this
has been determined with reference to the proportion of total cost incurred;
•
•
90% of the contract value is recognised based on the number of kilometres surveyed, expressed as a percentage of the
total kilometres surveyed;
10% of the contract value is recognised after the survey has been completed and the data delivered to the customer.
The related profit includes results attributable to contracts completed and in progress where a profitable outcome can be
prudently foreseen.
Where revenue earned exceeds amounts invoiced it is included within trade and other receivables as amounts due from
customers for contract work. Receipts in excess of recognised turnover are included within trade and other payables under
payments on account in respect of contract work. The amount of costs incurred on survey contracts, net of amounts
transferred to cost of sales is included in long term contract balances within inventories.
Government grants
Grants from the Government are recognised at their fair value where there is a reasonable assurance that the grant will be
received and that the Group will comply with all attached conditions. Government grants relating to costs are deferred and
recognised in the income statement over the period necessary to match them with the costs that they are intended to
compensate. Grants received are included within other operating income in the income statement.
Goodwill and intangible assets
Goodwill is carried at cost less any provision for impairment. Intangible assets are valued at cost less amortisation and any
provisions for impairment.
Goodwill arising on business combinations (representing the excess of fair value of the consideration given over the fair value
of the separable net assets acquired) is capitalised and its subsequent measurement is based on annual impairment reviews,
with any impairment losses recognised immediately in the income statement. For business combinations completed after
1 January 2010, direct costs of acquisition are recognised immediately in the income statement as an expense.
The Group has elected to apply IFRS 3, ‘Business combinations’ prospectively from the date of transition to IFRS and
therefore goodwill written off to reserves prior to 1 October 2006 has not been reinstated on transition to IFRS.
Externally acquired intangible assets
Intangible assets are capitalised at cost and amortised to nil by equal annual instalments over their estimated useful
economic life.
Intangible assets are recognised on business combinations if they are separable from the acquired entity. The amounts
ascribed to such intangibles are arrived at by using appropriate valuation techniques (see note 3). The significant intangibles
recognised by the Group and their useful economic lives are as follows:
•
•
•
Brand name
Customer relationships
Intellectual property
over 10 years
over 8 years
over 3-10 years
31
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OXFORD METRICS PLC ANNUAL REPORT 2018
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2018
Internally generated intangible assets (research and development costs)
Expenditure on internally developed products is capitalised if it can be demonstrated that:
•
•
•
•
•
•
It is technically feasible to develop the product for it to be sold;
Adequate resources are available to complete the development;
There is an intention to complete and sell the product;
The Group is able to sell the product;
Sale of the product will generate future economic benefits; and
Expenditure on the project can be measured reliably.
Capitalised development costs are amortised over the periods the Group expects to benefit from selling the products
developed, which is estimated to be 3 - 7 years. The amortisation expense is included within research and development
expenses in the consolidated income statement.
Development expenditure not satisfying the above criteria and expenditure on the research phase of internal projects are
recognised in the consolidated income statement as incurred.
Impairment of non-financial assets (excluding inventories and deferred tax assets)
Impairment tests on goodwill are undertaken annually at the financial year end. Other non-financial assets are subject to
impairment tests whenever events or changes in circumstances indicate that their carrying amount may not be recoverable.
Where the carrying value of an asset exceeds its recoverable amount (i.e. the higher of value in use and fair value less costs to
sell), the asset is written down accordingly.
Where it is not possible to estimate the recoverable amount of an individual asset, the impairment test is carried out on the
smallest group of assets to which it belongs for which there are separately identifiable cash flows; (its cash generating unit).
Goodwill is allocated on initial recognition to each of the Group’s CGU’s that are expected to benefit from the synergies of the
combination giving rise to the goodwill.
Impairment charges are included in profit or loss, except to the extent they reverse gains previously recognised in other
comprehensive income. An impairment loss recognised for goodwill is not reversed.
Property, plant and equipment
Property, plant and equipment is stated at cost less accumulated depreciation. Depreciation is calculated to write down the
cost less estimated residual value of all tangible fixed assets by equal annual instalments over their expected useful lives. The
rates applicable are:
•
•
•
•
•
Computers and equipment
Furniture and fixtures
Motor vehicles
Demonstration equipment
Leasehold improvements
25% - 50%
20% or 50%
25%
25% or 50%. Some demonstration equipment held within the Vicon Group is not
depreciated as its residual value exceeds its cost.
Over the lower of the life of the asset and the remaining period of the lease.
The assets’ residual values and useful lives are reviewed and adjusted if appropriate at each statement of financial position
date. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is
greater than its estimated recoverable amount. Gains and losses on disposal are determined by comparing the proceeds with
the carrying amount and are recognised in the income statement.
Investments in subsidiaries
Investments are included at cost less provision for impairment.
Inventories
Inventories are stated at the lower of historical cost and net realisable value, on a first in first out basis, after making allowance
for obsolete and slow moving items. Net realisable value is the estimated selling price in the ordinary course of business less
applicable variable selling expenses.
32
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OXFORD METRICS PLC ANNUAL REPORT 2018
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2018
Non-current assets and disposal groups
Non-current assets and disposal groups are classified as held for sale when:
•
•
•
•
•
•
They are available for immediate sale
Management is committed to a plan to sell
It is unlikely that significant changes to the plan will be made or that the plan will be withdrawn
An active programme to locate a buyer has been initiated
The asset or disposal group is being marketed at a reasonable price in relation to its fair value, and
A sale is expected to complete within 12 months from the date of classification.
Non-current assets and disposal groups classified as held for sale are measured at the lower of:
•
•
Their carrying amount immediately prior to being classified as held for sale in accordance with the group's accounting
policy; and
Fair value less costs of disposal.
Following their classification as held for sale, non-current assets (including those in a disposal group) are not depreciated. The
results of operations held for sale are included in the consolidated statement of comprehensive income up to the date of disposal.
A discontinued operation is a component of the Group’s business that represents a separate major line of business or
geographical area of operations or is a subsidiary acquired exclusively with a view to resale, that has been disposed of, has
been abandoned or that meets the criteria to be classified as held for sale.
Discontinued operations are presented in the consolidated income statement separately from continuing operations in a
section identified as relating to discontinued operations and prior year results have been restated.
Associates
Where the Group has the power to participate in (but not control) the financial and operating policy decisions of another entity,
it is classified as an associate. Associates are initially recognised in the consolidated statement of financial position at cost.
Subsequently associates are accounted for using the equity method, where the Group’s share of post-acquisition profits and
losses and other comprehensive income is recognised in the consolidated income statement and consolidated statement of
comprehensive income (except for losses in excess of the Group’s investment in the associate unless there is an obligation to
make good those losses).
Profits and losses arising on transactions between the Group and its associates are recognised only to the extent of unrelated
investors’ interests in the associate. The investor’s share in the associate’s profits and losses resulting from these transactions
is eliminated against the carrying value of the associate.
Any premium paid for an associate above the fair value of the Group’s share of the identifiable assets, liabilities and contingent
liabilities acquired is capitalised and included in the carrying amount of the associate. Where there is objective evidence that
the investment in an associate has been impaired the carrying amount of the investment is tested for impairment in the same
way as other non-financial assets.
Financial assets
The Group and Company classifies its financial assets into one of the categories discussed below, depending on the purpose
for which the asset was acquired. The Group has not classified any of its financial assets as held to maturity.
Loans and receivables: Loans and receivables comprise trade and other receivables and cash and cash equivalents in the
balance sheet. The accounting policies for these assets are discussed below.
Available-for-sale: Available-for-sale financial assets comprise the equity investment in a business start-up incorporated in
Germany (see note 14). Available-for-sale financial assets are measured at fair value with gains or losses recognised directly in
equity through the statement of changes in equity and recycled into the income statement on sale or impairment of the asset.
Financial liabilities
The Group and Company classifies its financial liabilities into the category below.
Other financial liabilities: Other financial liabilities include trade payables and other short term monetary liabilities. The
accounting policies for these liabilities are discussed below.
33
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OXFORD METRICS PLC ANNUAL REPORT 2018
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2018
Trade and other receivables
Trade receivables do not carry interest and are initially recognised at fair value and subsequently carried at amortised cost
using the effective interest rate method. A provision for impairment of trade receivables is established when there is
objective evidence that the Group will not be able to collect all amounts due according to the original terms of the
receivables. Trade receivables are assessed individually for impairment. Such provisions for impairment are recorded in a
separate allowance account with the loss being recognised within administrative expenses in the income statement. On
confirmation that the trade receivable will not be collectable, the gross carrying value of the asset is written off against the
associated provision.
Cash and cash equivalents
Cash and cash equivalents include cash in hand, net deposits held at call with banks and other short term highly liquid
investments with original maturities of less than three months.
Trade and other payables
Trade payables and other short term monetary liabilities are recognised at fair value and subsequently held at amortised cost.
Current and deferred taxation
Deferred tax assets and liabilities are recognised where the carrying amount of an asset or liability in the statement of financial
position differs from its tax base, except for differences arising on:
•
•
•
The initial recognition of goodwill;
The initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the
transaction affects neither accounting nor taxable profit; and
Investments in subsidiaries and jointly controlled entities where the Group is able to control the timing of the reversal of
the difference and it is probable that the difference will not reverse in the foreseeable future.
Recognition of deferred tax assets is restricted to those instances where it is probable that taxable profit will be available
against which the difference can be utilised.
The amount of the asset or liability is determined using tax rates that have been enacted or substantively enacted by the
statement of financial position date and are expected to apply when the deferred tax liabilities/(assets) are settled/(recovered).
Deferred tax assets and liabilities are offset when the Group has a legally enforceable right to offset current tax assets and
liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority on either:
•
•
The same taxable Group company; or
Different Group entities which intend either to settle current tax assets and liabilities on a net basis, or to realise the
assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax assets or
liabilities are expected to be settled or recovered.
Foreign currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic
environment in which the entity operates (the functional currency). The financial statements are presented in Sterling (£) which is
also the Company’s functional currency.
Transactions in foreign currencies are recorded at the exchange rate ruling at the date of the transaction. Monetary assets and
liabilities in foreign currencies are translated at the rates of exchange ruling at the balance sheet date. Any gain or loss arising
from a change in exchange rates subsequent to the date of the transaction is included as an exchange gain or loss in the
income statement.
For consolidation purposes assets and liabilities of foreign subsidiaries that have a functional currency different from the
presentation currency are translated at the rates of exchange ruling at the balance sheet date. Income statements of such
undertakings are translated on a monthly basis at the month end exchange rate. Exchange differences arising on these
translations are taken to the foreign currency translation reserve through the statement of comprehensive income.
34
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OXFORD METRICS PLC ANNUAL REPORT 2018
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2018
Employee benefits
Contributions to pension schemes
The Group accounts for pensions and similar employee benefits under IAS 19 ‘Employee benefits’. The Group operates
defined contribution pension schemes for both its UK and US employees. The pension costs charged against profits represent
the amount of the contributions payable to the scheme in respect of the accounting period.
Employee share option schemes
The Group operates an equity settled share based compensation plan. The fair value of the employee services received in
exchange for the grant of the options is recognised as an expense in the income statement over the vesting period of the grant
with a corresponding adjustment to equity. The total amount to be expensed over the vesting period is determined by
reference to the fair value of the options granted, excluding the impact of any non market vesting conditions (for example,
profitability and sales growth targets). Non market vesting conditions are included in assumptions about the number of options
that are expected to vest. At each statement of financial position date the entity revises its estimates of the number of options
that are expected to vest. It recognises the impact of the revision to original estimates, if any, in the income statement, with a
corresponding adjustment to equity.
Operating leases
Leases in which a significant proportion of the risks and rewards of ownership are retained by the lessor are classified as
operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the
income statement on a straight line basis over the period of the lease.
Where properties are sublet the rental income received is recognised as other income in the income statement on a straight
line basis over the lease term.
Dividend distribution
Dividends are recognised when they become legally payable. In the case of interim dividends, this is when they are paid.
In the case of final dividends, this is when approved by the shareholders at the annual general meeting.
Provisions
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is more
likely than not that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated.
Provisions are not recognised for future operating losses. Provisions are measured at the present value of the expenditure
expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value
of money and the risks specific to the obligation.
3. Critical accounting estimates and judgements
The Group makes certain estimates and assumptions regarding the future. Estimates are continually evaluated based on
historical experience and other factors, including expectations of future events that are believed to be reasonable under the
circumstances. In the future, actual experience may differ from these estimates and assumptions. The estimates and
assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within
the next financial year are discussed below.
Estimates, judgements and assumptions
(a)
Estimate of useful lives of intangible assets
Intangible assets are amortised over their estimated useful lives. Useful lives are based on management’s estimates of
the period that the assets will generate revenue, which are periodically reviewed for continued appropriateness. Changes
to estimates can result in significant variations in the carrying value and amounts charged to the consolidated income
statement in specific periods. Customer relationships are amortised over 8 years. If this estimate increased by 10% the
decrease in the amortisation charge for the year would be £41,000 (2017: £41,000). If this estimate decreased by 10%
the increase in the amortisation charge for the year would be £37,000 (2017: £37,000). Within development costs there
are a significant number of different projects across the Group. The useful life of each project is assessed on an individual
basis. The directors do not consider it meaningful to provide a sensitivity analysis in this context due to the number of
individual projects involved. More detail including carrying values is included in note 11.
35
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OXFORD METRICS PLC ANNUAL REPORT 2018
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2018
(b)
Judgements concerning the capitalisation of development costs
Development costs are capitalised according to the criteria set out in IAS 38. Management make assumptions as to when
these criteria have been met and consequently the date from which the costs for a project are capitalised. Management
review the carrying value of capitalised development costs on an annual basis and consider indicators of impairment.
(c)
Estimate of share based payments
The Group operates a number of equity settled share based remuneration schemes for employees. Employee services
received, and the corresponding increase in equity, are measured by reference to the fair value of the equity instruments
at the date of grant, excluding the impact of any non-market vesting conditions. The fair value of share options is
estimated using the Monte Carlo option pricing model on the date of grant based on certain assumptions. Those
assumptions are described in note 23 and include, among others, the expected volatility and expected life of the option.
More details including carrying values are disclosed in note 23.
(d)
Determination of fair values of intangible assets acquired in business combinations
The fair value of intellectual property acquired in business combinations is based on the royalty relief method. The fair
value of the intellectual property acquired with IMeasureU Limited during the prior year was determined using a discount
factor of 12% and royalty rate of 17%. If the estimation of the discount factor had increased by 1% the resulting fair
value of the intellectual property at 30 September 2018 would have decreased by £118,000 (2017: £131,000). If the
estimation of the discount factor had decreased by 1% the resulting fair value of the intellectual property at
30 September 2018 would have increased by £128,000 (2017: £143,000). If the estimation of the royalty rate had
increased/decreased by 1% the resulting fair value of the intellectual property at 30 September 2018 would have
increased/decreased by £125,000 (2017: £139,000).
The fair values of customer relationships acquired through business combinations in prior years are based on the
discounted cash flows expected to be derived from the use and eventual sale of the asset. If the estimation of the discount
rate of 14% used in this calculation had increased by 1% the fair value of the customer relationships at 30 September 2018
would have decreased by £28,000 (2017: £38,000). If the estimation of the discount rate of 14% had decreased by 1% the
fair value of the customer relationships at 30 September 2018 would have increased by £29,000 (2017: £40,000).
The contingent consideration payable on the acquisition of ImeasureU Limited has been calculated using managements
estimate of the most likely outcome regarding the achievement of certain performance conditions. This contingent
consideration has been discounted at a rate of 35% and translated into Sterling at the spot rate at 30 September 2018.
A sensitivity analysis of these estimations is provided in note 18.
(e)
Revenue recognition estimations
The Group reviews recognition of revenue with respect to hardware and software sales where they include an element of
provision for additional services, such as support and maintenance, in line with IAS 18.
The Group’s selling price for hardware sales includes support and maintenance servicing and therefore the Group defers
an element of revenue which is recognised over a subsequent period. Typically, the servicing is for a period of one year
from date of sale, but can be up to five years. Management believes that, based on past experience with similar revenue
streams and actual support costs, an estimate of deferral of between 1% and 3% per year, dependent upon the specific
CGU, is appropriate and is consistent with the current level of support costs. If management’s estimate of the
appropriate level of revenue deferral increased by 1% the Group’s consolidated net income in 2018 would have
decreased by £146,000 (2017: £216,000). If management’s estimate of the appropriate level of revenue deferral
decreased by 1% the Group’s consolidated net income in 2018 would have increased by £146,000 (2017: £216,000).
Within Yotta surveying, revenue is recognised on survey contracts by reference to the total sales value and the stage of
completion of the survey contracts. The Group has adopted the following policy for assessing the stage of completion of
these survey contracts, this has been determined with reference to the proportion of total cost incurred;
• 90% of the contract value is recognised based on the number of kilometres surveyed, expressed as a percentage of
the total kilometres surveyed;
• 10% of the contract value is recognised after the survey has been completed and the data delivered to the customer.
Yotta surveying has been disposed of during the year and was classified as held for sale at 30 September 2017. The directors
consider that a sensitivity analysis regarding the estimations used above would not be meaningful in this context.
36
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OXFORD METRICS PLC ANNUAL REPORT 2018
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2018
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, formerly
OMG plc, (“the Board”) as the CODM. The business segment reporting reflects the Group’s management and internal reporting
structure.
The Group comprises the following business segments:
•
•
Vicon Group: This is the development, production and sale of computer software and equipment for the engineering,
entertainment and life science markets; and
Yotta Group: This is the provision of software and services for the management of infrastructure assets and highways
surveying services (which were sold during the year) for the Government Agencies, Local Government and major
infrastructure contractors. Yotta surveying was discontinued during the prior year and is shown within discontinued
operations.
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 sales from Vicon UK to Vicon USA in the year ended 30 September
2018 are £4,414,000 (2017: £5,103,000).
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.
37
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OXFORD METRICS PLC ANNUAL REPORT 2018
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2018
Business segments are analysed below:
Vicon UK
Vicon USA
Vicon Group
Yotta
Continuing operations
Yotta Surveying (note 10)
Discontinued operations
Oxford Metrics Group
Vicon revenue by market
Engineering
Entertainment
Life sciences
Vicon Group*
Group revenue by type
Sale of hardware
Sale of software
Rendering of services
Continuing operations
Sale of software
Rendering of services
Discontinued operations
Oxford Metrics Group
Yotta revenue by type
Software and related services
Continuing operations
Surveying services
Discontinued operations
Yotta Group
Revenue
2018
£’000
13,964
10,418
24,382
7,274
31,656
1,693
1,693
2017
£’000
11,342
11,170
22,512
6,643
29,155
2,842
2,842
33,349
31,997
4,367
7,153
12,862
24,382
21,687
4,289
5,680
31,656
12
1,681
1,693
4,767
6,661
11,084
22,512
20,240
3,603
5,312
29,155
-
2,842
2,842
33,349
31,997
7,274
7,274
1,693
1,693
6,643
6,643
2,842
2,842
8,967
9,485
* This additional information is provided to the Chief Operating Decision Maker. Further analysis by market is not available.
38
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OXFORD METRICS PLC ANNUAL REPORT 2018
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2018
By destination
UK
Germany
Bulgaria
Poland
Netherlands
France
Switzerland
Rest of Europe
Canada
USA
Rest of North America
Australia
Hong Kong
Japan
Rest of Asia Pacific
Other
Continuing operations
UK
Discontinued operations
Oxford Metrics Group
By origin
UK
North America
Asia Pacific
Continuing operations
UK
Discontinued operations
Oxford Metrics Group
39
Revenue
2018
£’000
9,978
1,078
9
145
662
348
409
1,802
420
9,357
123
685
1,766
3,257
939
678
2017
£’000
8,512
554
301
-
677
208
170
687
1,455
9,640
145
1,106
1,948
2,441
549
762
31,656
29,155
1,693
1,693
2,842
2,842
33,349
31,997
20,849
10,419
388
31,656
1,693
1,693
17,722
11,170
263
29,155
2,842
2,842
33,349
31,997
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OXFORD METRICS PLC ANNUAL REPORT 2018
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2018
Adjusted
2018
profit/(loss) Adjusting
before tax
£’000
Group Profit/(loss)
items recharges before tax
£’000
£’000
£’000
2,916
4,372
7,288
105
-
105
1,309
(3,195)
(1,886)
4,330
1,177
5,507
437
(2,556)
(472)
(219)
(993)
2,879
(1,028)
104
Adjusted
profit/(loss)
before tax
£’000
1,418
4,226
5,644
670
(2,398)
4,583
3,916
2017
Adjusting
items
£’000
Group
recharges
£’000
Profit/(loss)
before tax
£’000
(221)
-
(221)
(445)
3
(663)
1,653
(3,237)
(1,584)
(641)
2,639
2,850
989
3,839
(416)
244
414
3,667
Vicon UK
Vicon USA
Vicon Group
Yotta
Unallocated
Continuing
operations
OMG Life Group
Yotta Surveying
Unallocated
Discontinued
operations
Oxford
Metrics Group
5,169
(586)
51
(89)
-
(38)
-
(445)
-
(445)
5,131
(1,031)
-
-
-
-
-
-
Adjusted profit before tax is detailed in note 6.
Vicon UK
Vicon USA
Vicon Group
Yotta
Unallocated
Continuing operations
Yotta Surveying
Discontinued operations
Oxford Metrics Group
51
(534)
-
(483)
(183)
213
(158)
12
(1,609)
-
-
(414)
-
(171)
(1,810)
(158)
(128)
(1,597)
(414)
(2,139)
4,100
3,788
(2,260)
-
1,528
Segment depreciation and amortisation
2017
£’000
2018
£’000
1,525
57
1,582
775
21
2,378
101
101
2,479
1,188
45
1,233
666
24
1,923
1,873
1,873
3,796
40
252680 Oxford Metrics AR pp29-pp66.qxp_252680 Oxford Metrics AR pp26-pp65.qxp 11/12/2018 14:48 Page 41
OXFORD METRICS PLC ANNUAL REPORT 2018
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2018
Non-current assets
2017
£’000
2018
£’000
Additions to
non-current assets
2017
£’000
2018
£’000
Carrying amount of
segment assets
2017
£’000
2018
£’000
Carrying amount of
segment liabilities
2018
2017
£’000
£’000
8,899
797
9,696
5,212
-
5,212
328
8
-
8,495
825
9,320
4,793
-
4,793
501
12
-
2,006
164
2,170
1,177
-
1,177
14
-
-
6,313
40
6,353
603
-
603
272
-
-
22,522
5,995
28,517
16,093
-
16,093
1,987
(6,044)
-
18,380
5,782
24,162
15,399
-
15,399
3,613
(6,041)
3,047
(4,485)
(1,698)
(6,183)
(3,910)
-
(3,910)
(490)
-
-
(5,717)
(1,639)
(7,356)
(3,996)
-
(3,996)
(908)
(41)
(584)
Vicon UK
Vicon USA
Vicon Group
Yotta
Yotta Surveying
Yotta Group
Unallocated
OMG Life Group*
Held for sale
Oxford Metrics Group
15,244
14,626
3,361
7,228
40,553
40,180
(10,583)
(12,885)
* 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):
Loss/(profit) on disposal of property, plant and equipment
Depreciation of property, plant and equipment - owned (note 13)
Amortisation of customer relationships (note 11)
Amortisation of intellectual property (note 11)
Amortisation of development costs (note 11)
Impairment of intangible fixed assets (note 11)
Share based payments – equity settled (note 23)
Operating lease charges – land and buildings
Foreign exchange loss/(gain)
Profit on transfer of intellectual property to equity accounted associate
Grant income receivable
2018
£’000
3
570
314
350
1,245
-
323
567
213
-
(173)
2017
£’000
(39)
409
314
187
1,256
1,630
142
641
(95)
(208)
(89)
During the year the Group obtained the following services from the Group’s auditors and its associates as detailed below:
Fees payable to the Company’s auditor for the audit of the parent Company and
consolidated financial statements
Fees payable to the Company’s auditor for other services:
The audit of financial statements of subsidiaries pursuant to legislation
Tax services
Other services
Fees payable to associates of the Company’s auditor for other services
Audit services include £13,000 in respect of the Company (2017: £13,000).
41
2018
£’000
2017
£’000
37
37
27
-
17
35
47
27
13
16
118
138
252680 Oxford Metrics AR pp29-pp66.qxp_252680 Oxford Metrics AR pp26-pp65.qxp 11/12/2018 14:48 Page 42
OXFORD METRICS PLC ANNUAL REPORT 2018
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2018
6. Reconciliation of adjusted profit/(loss) before tax
The adjusted profit/(loss) 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/(loss) before tax to adjusted profit/(loss) 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.
Profit before tax – continuing operations
Share based payments – equity settled
Amortisation of intangibles arising on acquisition
Redundancy costs
Costs associated with acquisition of subsidiary undertaking
Adjustment to fair value of deferred consideration payable and unwinding of discount factor
Income from transfer of intellectual property to equity accounted associate
Share of post-tax loss of equity accounted associate
Reapportion Group overheads
Adjusted profit before tax – continuing operations
Loss before tax – discontinued operations
Share based payments – equity settled
Impairment of intangible assets
Loss on disposal of subsidiary undertaking
Reapportion Group overheads
Adjusted loss before tax – discontinued operations
2018
£’000
4,583
323
645
-
-
(457)
-
75
-
5,169
(483)
-
-
445
-
(38)
2017
£’000
3,667
153
485
9
137
-
(208)
87
(414)
3,916
(2,139)
(11)
1,608
-
414
(128)
Total adjusted profit before tax – all operations
5,131
3,788
The adjusted profit before tax for the Vicon and Yotta business segments which are included within the Group’s continuing
operations is shown in detail below;
Profit before tax
Share based payments – equity settled
Amortisation of intangibles arising on acquisition
Costs associated with acquisition of subsidiary undertaking
Adjustment to fair value of deferred consideration payable and unwinding of discount factor
Reapportion Group overheads
Adjusted profit before tax
Vicon Group
2018
£’000
5,507
110
242
-
(457)
1,886
7,288
2017
£’000
3,839
23
61
137
-
1,584
5,644
42
252680 Oxford Metrics AR pp29-pp66.qxp_252680 Oxford Metrics AR pp26-pp65.qxp 11/12/2018 14:48 Page 43
OXFORD METRICS PLC ANNUAL REPORT 2018
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2018
Profit before tax – continuing operations
Share based payments – equity settled
Amortisation of intangibles arising on acquisition
Redundancy costs
Reapportion Group overheads
Adjusted profit before tax – continuing operations
Yotta Group
2018
£’000
(1,028)
69
403
-
993
437
2017
£’000
(416)
12
424
9
641
670
The redundancy costs in the year ended 30 September 2017 are associated with OMG Life Group and the restructuring of the
Yotta UK business segment.
Further details of the adjustment to fair value of the deferred consideration payable can be found in note 26.
7. Directors and employees
Staff costs during the year were as follows:
Wages and salaries
Share-based payments
Social security costs
Other pension costs
The average number of employees of the Group during the year was:
Development
Sales and customer support
Production and production services
Management and administration
Group
2018
£’000
13,135
323
1,302
609
15,369
Group
2017
£’000
12,662
142
1,318
528
14,650
Company
2018
£’000
Company
2017
£’000
1,353
145
248
56
1,802
1,371
119
169
50
1,709
2018
Number
2017
Number
59
69
80
26
234
49
59
89
24
221
The average number of employees of the Company during the year was 10 (2017:10) all of which are classified as management
and administration.
Details of individual directors’ remuneration are included in the Report on Directors’ Remuneration. For the purposes of IAS 24
‘Related party disclosures’ the directors are considered key management.
Key management personnel compensation:
Wages and salaries
Share-based payments
Social security costs
Other pension costs
Benefits in kind
The number of directors accruing benefits under Group pension schemes was 1 (2017: 2).
43
2018
£’000
965
101
283
17
6
2017
£’000
962
115
118
17
5
1,372
1,217
252680 Oxford Metrics AR pp29-pp66.qxp_252680 Oxford Metrics AR pp26-pp65.qxp 11/12/2018 14:48 Page 44
OXFORD METRICS PLC ANNUAL REPORT 2018
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2018
Exercise of directors’ share options
During the year two directors (2017: no directors) exercised share options. The aggregate of the gains made on these exercises
in the table above is calculated on the difference between the option price and the mid-market price at the time of exercise.
Additional details can be obtained from the Report on Directors’ Remuneration on page 16.
8.
Taxation
The tax is based on the profit for the year and represents:
United Kingdom corporation tax at 19.0% (2017: 19.5%)
Overseas taxation
Adjustments in respect of prior year
Current taxation
Deferred taxation (note 19)
Total taxation expense
Continuing and discontinued operations:
Income tax expense from continuing operations
Income tax expense from discontinued operations excluding gain on sale (note 10)
Total tax expense:
Income tax expense excluding tax on sale of discontinued operations
Income tax credit on gain on sale of discontinued operations (note 10)
2018
£’000
164
230
(25)
369
188
557
2018
£’000
556
4
560
2018
£’000
560
(3)
557
2017
£’000
251
722
(21)
952
(431)
521
2017
£’000
533
6
539
2017
£’000
539
(18)
521
At 30 September 2018, the Group had an undiscounted deferred tax asset of £230,000 (2017: £422,000). The asset comprises
principally short term timing differences and future tax relief available on the exercise of outstanding employee share options in
Oxford Metrics plc.
Deferred tax assets and liabilities have been measured at an effective rate of 17% and 25% in the UK and USA, respectively
(2017: 17% and 38%, respectively) and are detailed in note 19.
The inclusion of legislation to reduce the main rate of corporation tax from 20% to 19% from 1 April 2017 and then a further
reduction to 17% from 1 April 2020 was substantively enacted on 15 September 2016.
44
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OXFORD METRICS PLC ANNUAL REPORT 2018
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2018
The tax assessed for the year is lower than the standard rate of corporation tax in the UK of 19.0% (2017: higher than the
standard rate of 20%).
The differences are explained as follows:
Profit on ordinary activities before tax
Expected tax income based on the standard rate of
corporation tax in the UK of 19.0% (2017: 19.5%)
Effect of:
Expenses not deductible for tax purposes
Tax gain on sale of discontinued operation in excess of book gain
Unrelieved current year losses
Adjustments to tax charge in respect of prior year current tax
Adjustments to tax charge in respect of prior year deferred tax
Higher rates on overseas taxation
Amounts credited directly to equity
Current tax benefit of share options exercised
Research and development tax credit
Share based payments
Effect of rate change
Total tax expense
9.
Earnings/(loss) per share
2018
£’000
4,100
2017
£’000
1,528
779
(47)
48
179
(25)
(19)
93
164
(211)
(487)
48
35
557
298
388
-
-
(21)
-
160
75
(75)
(305)
39
(38)
521
2018
–––––––––––––––––––––––––––––––––––
Weighted
average
number of
shares
‘000
Earnings/
(loss)
£’000
Per share
amount
(pence)
2017
–––––––––––––––––––––––––––––––––––
Weighted
average
number of
shares
‘000
Earnings/
(loss)
£’000
Per share
amount
(pence)
Continuing operations
Basic earnings per share
Earnings attributable to ordinary
shareholders
Dilutive effect of employee share options
Diluted earnings per share
Discontinued operations
Basic loss per share
Loss attributable to ordinary shareholders
Dilutive effect of employee share options
Diluted loss per share
Total operations
Basic earnings per share
Earnings attributable to ordinary
shareholders
Dilutive effect of employee share options
Diluted earnings per share
4,027
-
4,027
124,569
4,327
128,896
(484)
-
(484)
124,569
4,327
128,896
3,543
-
3,543
124,569
4,327
128,896
3.23
(0.11)
3.12
(0.39)
-
(0.39)
2.84
(0.09)
2.75
3,134
-
3,134
122,705
3,322
126,027
(2,127)
-
(2,127)
122,705
3,322
126,027
1,007
-
1,007
122,705
3,322
126,027
2.55
(0.06)
2.49
(1.73)
-
(1.73)
0.82
(0.02)
0.80
Basic earnings per share is calculated by dividing the profit/(loss) attributable to equity holders of the Company by the
weighted average number of ordinary shares in issue during the year.
45
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OXFORD METRICS PLC ANNUAL REPORT 2018
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2018
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.
For discontinued operations the outstanding share options are anti-dilutive and therefore there is no difference between the
basic and diluted loss per share.
10. Discontinued operations
On 22 May 2018 the Group sold its 100% interest in Yotta Surveying Limited for a total consideration of £1,575,000. Yotta
Surveying Limited was classified as held for sale at 30 September 2017 (see note 25). Since disposal Yotta Surveying Limited
has changed its name to Ginger Lehman Limited.
The post-tax loss on disposal of Yotta Surveying Limited was determined as follows;
Cash consideration received
Total consideration receivable at fair value
Cash disposed of
Transaction costs
Net cash inflow on disposal of Yotta Surveying Limited
Net assets disposed (other than cash):
Intangibles
Property, plant and equipment
Inventory
Trade and other receivables
Other assets
Trade and other payables
Other liabilities
Pre-tax loss on disposal of Yotta Surveying Limited
Related tax expense
Loss on disposal of Yotta Surveying Limited
Result of Yotta Surveying Group
Revenue
Expenses other than finance costs
Tax credit
Loss from selling discontinued operation after tax
Loss for the year
2018
£’000
1,575
1,575
281
227
1,067
893
72
10
194
630
(44)
(243)
1,512
(445)
-
(445)
2017
£’000
2,842
(4,652)
29
-
(1,781)
2018
£’000
1,693
(1,782)
-
(445)
(534)
During the year ended 30 September 2016 the decision was taken by the Group to discontinue the OMG Life Group cash
generating unit.
46
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OXFORD METRICS PLC ANNUAL REPORT 2018
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2018
Result of OMG Life Group
Expenses other than finance costs
Tax expense
Loss for the year
2018
£’000
51
(4)
47
The sale of House of Moves Inc. was completed on 15 October 2014 for a total consideration of $1,300,000.
Result of House of Moves
Gain from selling discontinued operation after tax
Profit for the year
2018
£’000
3
3
2017
£’000
(171)
(35)
(206)
2017
£’000
1
1
The result in the period for House of Moves is as a result of differences in foreign exchange rates on the deferred consideration
received.
On 8 April 2015, the Group sold its 100% interest in 2d3 Limited, 2d3 Inc. and Sensing Systems Inc. for a total consideration of
$23,144,000.
Result of 2d3 Group
Recycling of hedging instrument
Gain from selling discontinued operation after tax
Loss for the year
2018
£’000
-
-
-
2017
£’000
(158)
17
(141)
The gain in the prior period for 2d3 Group is as a result of differences in foreign exchange rates on the deferred consideration
received.
Result of all discontinued operations
Revenue
Expenses other than finance costs
Recycling of hedging instrument
Tax (expense)/credit
(Loss)/gain from selling discontinued operation after tax
Loss for the year
The statement of cash flows includes the following amounts relating to discontinued operations:
Operating activities
Tax received/(paid)
Proceeds on disposal of discontinued operations net of cash disposed of
Other investing activities
Net cash flow from discontinued operations
47
2018
£’000
1,693
(1,731)
-
(4)
(442)
(484)
2018
£’000
(784)
-
1,295
(5)
506
2017
£’000
2,842
(4,823)
(158)
(6)
18
(2,127)
2017
£’000
(305)
229
2,109
16
2,049
252680 Oxford Metrics AR pp29-pp66.qxp_252680 Oxford Metrics AR pp26-pp65.qxp 11/12/2018 14:48 Page 48
OXFORD METRICS PLC ANNUAL REPORT 2018
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2018
The deferred consideration receivable in respect of the sale of House of Moves totals $nil (2017: $300,000). The fair value of
this at 30 September 2017 was £170,000.
11. Goodwill and intangible fixed assets
Group
Cost
At 1 October 2017
Additions
Translation difference
At 30 September 2018
Amortisation
At 1 October 2017
Charge for the year
Translation difference
At 30 September 2018
Net book value at 30 September 2018
Net book value at 30 September 2017
All development costs are internally generated.
Customer
relationships
£’000
Intellectual Development
property
£’000
costs
£’000
Goodwill
£’000
2,459
-
(3)
2,456
1,266
314
-
1,580
876
1,193
3,235
-
(1)
3,234
745
350
-
1,095
2,139
2,490
14,498
2,125
-
16,623
9,723
1,177
-
10,900
5,723
4,775
3,611
-
12
3,623
-
-
-
-
3,623
3,611
Total
£’000
23,803
2,125
8
25,936
11,734
1,841
-
13,575
12,361
12,069
On 27 June 2017 Vicon Motion Systems Ltd acquired 100% of the share capital of IMeasureU Ltd. On acquisition
£2,448,000 of intellectual property and £1,076,000 of goodwill was recognised as an intangible fixed asset. Further details
are included in note 26.
Group
Cost
At 1 October 2016
Additions
Acquired through business combinations
Reclassified as available for sale
Translation difference
At 30 September 2017
Amortisation
At 1 October 2016
Charge for the year
Impairment
Reclassified as available for sale
Translation difference
At 30 September 2017
Net book value at 30 September 2017
Net book value at 30 September 2016
Total
£’000
22,315
1,822
3,524
(3,839)
(19)
23,803
11,229
1,757
1,630
(2,878)
(4)
11,734
12,069
11,086
Brand
Customer
name relationships
£’000
£’000
Intellectual Development
costs
£’000
property
£’000
Goodwill
£’000
789
-
2,448
-
(2)
3,235
558
187
-
-
-
745
2,490
231
13,245
1,822
-
(569)
-
14,498
8,897
1,256
21
(451)
-
9,723
4,775
4,348
4,999
-
1,076
(2,452)
(12)
3,611
-
-
1,609
(1,609)
-
-
3,611
4,999
83
-
-
(81)
(2)
-
83
-
-
(81)
(2)
-
-
-
3,199
-
-
(737)
(3)
2,459
1,691
314
-
(737)
(2)
1,266
1,193
1,508
48
252680 Oxford Metrics AR pp29-pp66.qxp_252680 Oxford Metrics AR pp26-pp65.qxp 11/12/2018 14:48 Page 49
OXFORD METRICS PLC ANNUAL REPORT 2018
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2018
None of the goodwill included in the tables above has been internally generated.
During the prior year the decision was taken to discontinue the Yotta Surveying cash generating unit. Subsequently the value
of the goodwill in relation to this cash generating unit was impaired resulting in an impairment loss of £1,609,000.
Current estimates of the remaining useful economic lives of the intangible assets are as follows:
Customer relationships
Intellectual property
Development costs
Goodwill
12.
Goodwill and impairment
2-3 years
7-9 years
1-5 years
Indefinite
Details of goodwill allocated to cash generating units for which the amount of goodwill so allocated is significant in comparison
to total goodwill is as follows:
Vicon:
Vicon USA cash generating unit (Peak)
Vicon UK cash generating unit (IMeasureU)
Yotta:
Yotta cash generating unit
Goodwill carrying value
2017
£’000
2018
£’000
533
1,076
2,014
3,623
521
1,076
2,014
3,611
The recoverable amounts of all the CGU’s have been determined from value in use calculations based on cash flow projections
from formally approved budgets covering the financial years ending 30 September 2019 and 30 September 2020.
The recoverable amount for the CGUs that hold a significant proportion of the Group’s overall goodwill balance are as follows:
•
•
Vicon UK (IMeasureU) exceeds its carrying amount by £7.1m (2017: £16.0m); and
Yotta (previously known as Mayrise) exceeds its carrying amount by £23.8m (2017: £30.2m).
Other major assumptions are as follows (the growth rate applies only to the period beyond the formal budgeted period with
the value in use calculation based on the budgeted cash flows up to 30 September 2020 and assumes a perpetuity based
terminal value).
Pre tax discount rate
Average operating margin
Growth rate
Pre tax discount rate
Average operating margin
Growth rate
Peak
2018
%
12.2
38.5
1.0
Peak
2017
%
12.1
40.8
1.0
IMU
2018
%
12.4
27.8
11.2
IMU
2017
%
12.4
29.9
11.2
Yotta
2018
%
12.2
17.8
4.0
Yotta
2017
%
12.1
12.0
4.0
49
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OXFORD METRICS PLC ANNUAL REPORT 2018
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2018
Operating margins have been based on past experience and future expectations in the light of anticipated economic and
market conditions. Discount rates are based on the Group’s WACC adjusted to reflect management’s assessment of specific
risks related to the cash generating unit. Growth rates beyond the formally budgeted period are based on economic data
pertaining to the region concerned.
A sensitivity analysis has been performed to establish how a change in the key assumptions would impact the value in use. All
discount rates would have to move significantly in order for the carrying values to be impaired. A growth rate of 0% would not
result in any of the carrying values being impaired. The operating margins would have to move significantly in order for
goodwill carrying values to be impaired.
13. Property, plant and equipment
Group
Cost
At 1 October 2017
Additions
Disposals
Translation differences
At 30 September 2018
Depreciation
At 1 October 2017
Charge for the year
Disposals
Translation differences
At 30 September 2018
Net book value at 30 September 2018
Net book value at 30 September 2017
Group
Cost
At 1 October 2016
Additions
On acquisition
Disposals
Transferred to available for sale
Translation differences
At 30 September 2017
Depreciation
At 1 October 2016
Charge for the year
Disposals
Transferred to available for sale
Translation differences
At 30 September 2017
Net book value at 30 September 2017
Net book value at 30 September 2016
Computers
and
equipment
£'000
Furniture
and Demonstration
Leasehold
fixtures
£'000
equipment
£'000
improvements
£'000
Total
£'000
2,066
397
(214)
2
2,251
1,658
257
(208)
1
1,708
543
408
553
70
(204)
-
419
279
94
(203)
-
170
249
274
445
320
(163)
4
606
47
41
(14)
1
75
531
398
1,394
450
(8)
1
1,837
526
145
(7)
-
664
1,173
868
Computers
and
equipment
£’000
Furniture
and
fixtures
£’000
Motor Demonstration
equipment
£’000
vehicles
£’000
Leasehold
improvements
£’000
150
6
-
(32)
(124)
-
-
101
21
(30)
(92)
-
-
-
49
334
343
-
(231)
-
(1)
445
242
35
(229)
-
(1)
47
398
92
556
848
-
(10)
-
-
1,394
471
65
(10)
-
-
526
868
85
2,605
315
7
(362)
(491)
(8)
2,066
2,195
243
(350)
(424)
(6)
1,658
408
410
395
168
-
(9)
(1)
-
553
244
45
(9)
(1)
-
279
274
151
50
4,458
1,237
(589)
7
5,113
2,510
537
(432)
2
2,617
2,496
1,948
Total
£’000
4,040
1,680
7
(644)
(616)
(9)
4,458
3,253
409
(628)
(517)
(7)
2,510
1,948
787
252680 Oxford Metrics AR pp29-pp66.qxp_252680 Oxford Metrics AR pp26-pp65.qxp 11/12/2018 14:48 Page 51
OXFORD METRICS PLC ANNUAL REPORT 2018
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2018
Company
Cost
At 1 October 2017
Additions
Disposals
At 30 September 2018
Depreciation
At 1 October 2017
Charge for the year
Disposals
At 30 September 2018
Net book value at 30 September 2018
Net book value at 30 September 2017
Company
Cost
At 1 October 2016
Additions
Disposals
At 30 September 2017
Depreciation
At 1 October 2016
Charge for the year
Disposals
At 30 September 2017
Net book value at 30 September 2017
Net book value at 30 September 2016
14.
Investments
Computers
and
equipment
£’000
278
14
(96)
196
242
21
(96)
167
29
36
Computers
and
equipment
£’000
256
22
-
278
221
21
-
242
36
35
Furniture
and
Leasehold
fixtures improvements
£’000
£’000
203
-
(203)
-
202
-
(202)
-
-
1
8
-
(8)
-
8
-
(8)
-
-
-
Furniture
and
Leasehold
fixtures improvements
£’000
£’000
203
-
-
203
199
3
-
202
1
4
8
-
-
8
8
-
-
8
-
-
Total
£’000
489
14
(307)
196
452
21
(306)
167
29
37
Total
£’000
467
22
-
489
428
24
-
452
37
39
Shares in subsidiary undertakings – cost
At 1 October
Additions
Impairment
Transferred to available for sale
At 30 September
Investment in associate – equity accounted
At 1 October
Additions
Share of post-tax loss of equity accounted associate
At 30 September
Other investment – cost and fair value
At 1 October and 30 September
Total financial assets – investments
51
Group
2018
£’000
Group
2017
£’000
Company
2018
£’000
Company
2017
£’000
-
-
-
-
-
163
-
(75)
88
69
157
-
-
-
-
-
-
250
(87)
163
69
232
13,995
-
-
-
13,995
163
-
(75)
88
69
14,340
7,210
(6,555)
(1,000)
13,995
-
250
(87)
163
69
14,152
14,227
252680 Oxford Metrics AR pp29-pp66.qxp_252680 Oxford Metrics AR pp26-pp65.qxp 11/12/2018 14:48 Page 52
OXFORD METRICS PLC ANNUAL REPORT 2018
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2018
During the prior year 100% of the share capital of Yotta Limited and Mayrise Services Limited was transferred from Yotta
Surveying Limited to Oxford Metrics plc.
Oxford Metrics plc’s investment in Yotta Surveying Limited was impaired during the year ended 30 September 2017 by
£6,555,000.
Details of the Company's undertakings, all of which are wholly owned and included within the consolidated financial
statements, are as follows:
Name of entity
Principal activity
Vicon Motion Systems
Limited
Development, production and sale of
computer software and equipment
Yotta Limited
(formerly Mayrise Limited)
Provision of computer software, hardware
and maintenance contracts
Mayrise Services Limited
Dormant holding company
Mayrise Systems Limited*
Dormant holding company
Yotta Pty Limited*
Provision of computer software, hardware
and maintenance contracts
Country of
incorporation
England
England
England
England
Australia
OMG Life Limited
Non trading company
England
Vicon Motion Systems, Inc.* Sales, marketing and customer support
USA
IMeasureU Ltd*
Development and sale of computer
software and equipment
New Zealand
OMG, Inc.
Non trading company
IMeasureU, Inc.*
Development and sale of computer
software and equipment
Oxford Metrics Limited
Non trading company
USA
USA
Ireland
Registered office
6 Oxford Industrial Park,
Yarnton, Oxfordshire,
OX5 1QU
6 Oxford Industrial Park,
Yarnton, Oxfordshire,
OX5 1QU
6 Oxford Industrial Park,
Yarnton, Oxfordshire,
OX5 1QU
6 Oxford Industrial Park,
Yarnton, Oxfordshire,
OX5 1QU
Allan Hall Business
Advisors Pty Ltd, Suite 126,
117 Old Pittwater Rd,
Brookvale NSW 2100
6 Oxford Industrial Park,
Yarnton, Oxfordshire,
OX5 1QU
7388 South Revere
Parkway, Suite 901,
Centennial, Colorado
5 Water Street, Grafton,
Auckland, 1023,
New Zealand
7388 South Revere
Parkway, Suite 901,
Centennial, Colorado
7388 South Revere
Parkway, Suite 901,
Centennial, Colorado
6th floor South Bank
House, Barrow street,
Dublin 4
* Investment held indirectly.
52
252680 Oxford Metrics AR pp29-pp66.qxp_252680 Oxford Metrics AR pp26-pp65.qxp 11/12/2018 14:48 Page 53
OXFORD METRICS PLC ANNUAL REPORT 2018
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2018
Available-for-sale investment
During the year ended 30 September 2005 the Company acquired 12% of the equity in a business start-up incorporated in
Germany in return for a capital injection of €100,000 (£69,000). There were no disposals or impairment provisions on the
available-for-sale financial asset in the year ended 30 September 2018 or 2017. This investment is stated at fair value which is
also its cost as at 30 September 2018.
Investment in Associate
During the year ended 30 September 2017 the Company acquired a 25% shareholding in Pimloc Limited, an equity accounted
associate. Further details can be found in the Financial Review within the Strategic Report.
15.
Inventories
Finished goods
Component parts
Group
2018
£’000
462
1,941
2,403
Group
2017
£’000
952
2,378
3,330
Company
2018
£’000
Company
2017
£’000
-
-
-
-
-
-
The cost of inventories recognised as an expense and included in cost of sales is £6,473,000 (2017: £5,994,000). During the
year £nil of inventories were impaired (2017: £123,000). £37,000 of inventories were written off (2017: £133,000) and included
within cost of sales.
16. Trade and other receivables
Trade receivables
Provision for impairment of trade receivables
Net trade receivables
Amounts owed by other Group undertakings
Other debtors
Prepayments and accrued income
Deferred consideration receivable
Group
2018
£’000
8,691
-
8,691
-
215
1,670
-
10,576
Group
2017
£’000
8,693
(237)
8,456
-
210
1,156
170
9,992
Company
2018
£’000
Company
2017
£’000
-
-
-
16,355
23
189
-
16,567
-
-
-
11,053
34
194
-
11,281
Amounts owed by other Group undertakings are repayable on demand and do not carry interest (see note 31).
As of 30 September 2018 trade receivables of £1,262,000 (2017: £2,152,000) were past due but not impaired. These relate to a
number of independent customers for whom there is no recent history of default. The ageing analysis of these trade
receivables from date of invoice is as follows:
Up to 3 months
3 to 6 months
Over 6 months
Group
2018
£’000
1,022
64
176
1,262
Group
2017
£’000
1,841
43
268
2,152
Company
2018
£’000
Company
2017
£’000
-
-
-
-
-
-
-
-
53
252680 Oxford Metrics AR pp29-pp66.qxp_252680 Oxford Metrics AR pp26-pp65.qxp 11/12/2018 14:48 Page 54
OXFORD METRICS PLC ANNUAL REPORT 2018
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2018
As of 30 September 2018 trade receivables of £nil (2017: £237,000) were impaired. The amount of the provision was £nil as of
30 September 2018 (2017: £237,000). The ageing of these receivables is as follows:
Over 6 months
Group
2018
£’000
-
Group
2017
£’000
237
Company
2018
£’000
Company
2017
£’000
-
-
The carrying amounts of the Group and Company’s trade and other receivables are denominated in the following currencies:
Sterling
Euro
US Dollar
NZ Dollar
AUS Dollar
Group
2018
£’000
7,360
88
2,922
74
132
10,576
Movements in the provision for impairment of trade receivables are as follows:
At 1 October
(Credited)/provided during the year
At 30 September
Group
2018
£’000
237
(237)
-
Group
2017
£’000
7,438
180
2,169
53
152
9,992
Group
2017
£’000
13
224
237
Company
2018
£’000
Company
2017
£’000
11,567
-
-
-
-
11,567
6,280
-
-
-
-
6,280
Company
2018
£’000
Company
2017
£’000
-
-
-
-
-
-
The movement on the provision for impairment of trade receivables has been included in administrative expenses in the
income statement.
Other classes of financial assets included within trade and other receivables do not contain impaired assets.
The maximum exposure to credit risk at the reporting date is the fair value of each receivable set out above.
17. Trade and other payables
Trade payables
Amounts payable to group undertakings
Social security and other taxes
Other creditors
Contingent consideration payable (note 26)
Corporation tax
Accruals
Deferred income
Group
2018
£’000
1,643
-
293
271
163
2
2,279
3,516
8,167
Group
2017
£’000
2,386
-
249
256
333
-
2,509
3,353
9,086
Company
2018
£’000
Company
2017
£’000
57
6,594
-
-
-
-
431
-
7,082
95
6,538
-
-
-
-
560
-
7,193
The contingent consideration payable relates to the acquisition of IMeasureU Limited during the prior year, see note 26.
Amounts payable to Group undertakings are payable on demand and do not carry interest.
54
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OXFORD METRICS PLC ANNUAL REPORT 2018
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2018
18. Financial instruments
The Group and Company’s financial instruments comprise cash and short term deposits, debtors and creditors that arise
directly from its operations. The risks associated with these financial instruments and the Group’s policies for managing those
risks are outlined below.
Interest rate risk of financial assets
Surplus cash funds are deposited with UK clearing banks on a short term basis for periods of less than three months. The
interest rates earned (all of which are variable throughout the year) are compared with those available from other financial
institutions of comparable credit status.
The rate of interest earned during the year on cash deposits was 0.11% (2017: 0.23%).
–––––––––––––––––––––––––––––––––––––––––––––––
Total
£’000
GBP Euro
£’000 £’000
AUS$
£’000
US$
£’000
NZ$
£’000
2018
2017
–––––––––––––––––––––––––––––––––––––––––––––
AUS$
Total
£’000 £’000
US$
£’000
GBP
£’000
NZ$
£’000
Euro
£’000
Cash at bank
and in hand 9,414
Included in
held for sale -
Group cash at
bank and in hand 9,414
101
2,656
-
-
101
2,656
30
-
30
28 12,229
5,845
97
3,138
-
-
600
-
-
28 12,229
6,445
97
3,138
85
-
85
20 9,185
-
600
20 9,785
2018
–––––––––––––––––––––––––––––––––––––
Total
£’000
Euro
£’000
US$
£’000
GBP
£’000
2017
–––––––––––––––––––––––––––––––––––––
Total
£’000
GBP
£’000
US$
£’000
Euro
£’000
Company cash at bank
and in hand
1,231
-
-
1,231
2,698
-
-
2,698
Management considers a 0.75 basis point move in interest rates to be reasonably possible. If the interest rates in effect during
the year had moved by plus or minus 0.75 basis points and all other variables held constant the Group’s profit for the year
ended 30 September 2018 would decrease by £8,000/increase by £57,000 (2017: decrease by £14,000/increase by £46,000).
There would be no impact on other equity reserves.
As disclosed in note 14 the Group has an equity investment of £69,000 (2017: £69,000) denominated in Euros. This is
accounted for as an available-for-sale investment and is measured at fair value in the balance sheet with gains or losses
recognised directly in equity.
The Group and Company do not have any longer term foreign currency cash holdings.
Borrowing facilities
The Group and Company have no borrowings.
The Group operates a Multi-Currency Balance Management Arrangement between certain Group companies. This
arrangement may result in individual accounts of certain entities showing debit balances. However, due to the arrangements in
place, such debit balances do not incur interest charges and the Group position must always result in a net deposit balance as
there is no borrowing facility. Therefore, such accounts are presented net as cash and cash equivalents on the face of the
Consolidated and Company Statement of Financial Position.
55
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OXFORD METRICS PLC ANNUAL REPORT 2018
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2018
Risk management
The Group is exposed through its activities to the following financial risks:
Liquidity risk
At 30 September 2018 the Group’s cash and short term deposits amounted to £12,229,000 (2017: £9,785,000). The Group had
no financial borrowing obligations.
All financial liabilities are due within five years.
Management does not consider liquidity to be a key risk.
Credit risk
Sales are made on a basis designed to minimise so far as possible the risk of non-payment in each case. Balances owing from
customers are reviewed at least monthly, and action is taken where considered appropriate with a view to achieving timely
settlement, see note 16.
The Group and Company are continually reviewing the credit risk associated with holding money on deposit in banks and seek
to mitigate this risk by spreading deposits between banks with high credit status.
Foreign currency risk
The Group’s foreign exchange transaction exposure arises principally in the UK subsidiaries from trading with US subsidiary
undertakings and third parties in Europe and the Far East. The Group’s policy is to reduce exposure to revaluation of monetary
assets and liabilities. Under the policy, assets and liabilities held in currencies other than a Company’s functional currency are
minimised through intercompany trading.
The Group considers the volatility of currency markets over the year to be representative of the potential foreign currency risk it
is exposed to. The main currency the Group’s results were exposed to at the year end was the US dollar and over the year the
volatility of this currency was 9.0% (2017: 9.8%). If Sterling had strengthened against the dollar at year end by 10% it would
have increased the Group profit by £189,000 (2017: increased Group profit by £152,000). If Sterling had weakened against the
dollar at year end by 10% it would have decreased the Group profit by £235,000 (2017: decreased Group profit by £185,000).
The table below shows the extent to which Group companies have monetary assets/(liabilities) in currencies other than their
local currency.
Functional currency of
operation:
Sterling
US dollar
NZ dollar
Functional currency of
operation:
Sterling
US dollar
2018
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
Total
£’000
Sterling
£’000
AUS$
£’000
Euro
£’000
NZ$
£’000
US$
£’000
-
4,084
(1,833)
(2,597)
-
5
(918)
-
-
-
-
10
208
-
-
(3,307)
4,084
(1,818)
2017
–––––––––––––––––––––––––––––––––––––––
Total
£’000
Sterling
£’000
Euro
£’000
US$
£’000
-
4,084
(2,072)
-
216
-
(1,856)
4,084
Derivative financial instruments at fair value through profit or loss
At the current and prior year end, the Group had no forward contracts outstanding that are held at fair value through profit or
loss.
56
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OXFORD METRICS PLC ANNUAL REPORT 2018
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2018
Fair value of financial assets and financial liabilities
Fair value measurement
A number of assets and liabilities included in the Group’s financial statements require measurement at, and/or disclosure of,
fair value. The fair value measurement of the Group’s financial and non-financial assets and liabilities utilises market observable
inputs and data as far as possible. Inputs used in determining fair value measurements are categorised into different levels
based on how observable the inputs used in the valuation technique utilised are (the ‘fair value hierarchy’):
Level 1: Quoted prices in active markets for identical items (unadjusted)
Level 2: Observable direct or indirect inputs other than Level 1 inputs
Level 3: Unobservable inputs (i.e. not derived from market data).
The classification of an item into the above levels is based on the lowest level of the inputs used that has a significant effect on
the fair value measurement of the item. Transfers of items between levels are recognised in the period they occur.
The Group measures some items at fair value which are all classified as Level 3, with the exception of the cash flow forward
foreign exchange contract which is classified as level 2:
•
•
Financial instruments (notes 2, 14 and 18);
Deferred consideration receivable (notes 10 and 16).
The Group’s finance team performs valuations of financial items for financial reporting purposes, including Level 3 fair values.
Valuation techniques are selected based on the characteristics of each instrument, with the overall objective of maximising the
use of market-based information.
The fair value technique has not been used to value the Group’s equity investment, however cost is not materially different to
fair value in the Board’s opinion.
In the prior year the deferred consideration receivable on the sale of the House of Moves cash generating unit was discounted
at a rate of 8% and translated into Sterling at the spot rate at 30 September 2017. If management’s estimate of the applicable
discount rate differed by 1% the fair value of the deferred consideration would have increased/decreased by £6,000 and there
would have been a corresponding increase/decrease in the interest recognised in the profit for the period of £2,000. If the spot
rate at 30 September 2017 had increased by 10% the fair value of the deferred consideration receivable would have decreased
by £15,000 with a corresponding decrease in the profit for the year.
The contingent consideration payable on the purchase of IMeasureU Ltd has been discounted at a rate of 35% and translated
into Sterling at the spot rate at 30 September 2018. If management’s estimate of the applicable discount rate differed by 1%
the fair value of the deferred consideration would increase/decrease by £3,000 (2017: £13,000). If the spot rate at 30
September 2018 had increased by 10% the fair value of the deferred consideration payable would have decreased by £42,000
(2017: £95,000) with a corresponding increase in the profit for the year. If the spot rate at 30 September 2018 had decreased
by 10% the fair value of the deferred consideration payable would have increased by £51,000 (2017: £117,000) with a
corresponding decrease in the profit for the year.
For more detailed information in relation to the fair value measurement of the items above, please refer to the applicable notes.
Where applicable, cost is deemed not to be materially different to fair value in the Boards opinion in determining carrying value
of financial assets and liabilities.
57
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OXFORD METRICS PLC ANNUAL REPORT 2018
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2018
The carrying value of the Group and Company’s financial assets and liabilities is as follows:
Financial assets
Loans and receivables
Trade receivables
Other debtors
Accrued income
Deferred consideration receivable
Cash and cash equivalents
Available for sale
Equity investment
At 30 September
Financial liabilities
Other financial liabilities
Trade payables
Provisions
Contingent consideration payable
Accruals
At 30 September
Capital management
Group
2018
£’000
8,691
97
714
-
12,229
69
21,800
Group
2018
£’000
1,643
8
462
2,279
4,392
Group
2017
£’000
8,456
16
476
170
9,185
69
21,419
Group
2017
£’000
2,386
185
1,050
2,509
6,714
Company
2018
£’000
Company
2017
£’000
-
-
-
-
1,231
69
1,300
-
-
-
-
2,698
69
3,767
Company
2018
£’000
Company
2017
£’000
57
-
-
433
490
95
-
-
560
655
The Group manages its capital to ensure that entities in the Group will be able to continue as going concerns while maximising
the return to shareholders.
The Group considers its capital to comprise ordinary share capital, shares to be issued, share premium and accumulated
retained earnings. The foreign currency translation reserve and cash flow hedging reserve are not considered capital. There
have been no changes in what the Group considers to be capital from the prior year.
In order to maintain or adjust its working capital at an acceptable level and meet strategic investment needs, the Group may
adjust the amount of dividends paid to shareholders, return capital to shareholders or sell assets.
The Group does not seek to maintain any debt to capital ratio, but will consider investment opportunities on their merits and
fund them in the most effective manner.
58
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OXFORD METRICS PLC ANNUAL REPORT 2018
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2018
19. Deferred tax
At 1 October 2016
Credited to the income statement (note 8)
Charged directly to equity
Reclassified as held for sale
Arising on acquisition of subsidiary
At 30 September 2017
Charged to the income statement (note 8)
Charged directly to equity
Reclassified from held for sale
At 30 September 2018
The following table summarises the provided tax asset and liability.
Recognised – asset
Depreciation in excess of capital allowances
Tax relief on unexercised employee share options
Short term timing differences
Included in assets classified as held for sale
Deferred tax asset
Recognised – liability
Recognition of intangible asset
Tax on gain on discontinued operations – deferred consideration
Capital allowances in excess of depreciation
Included in liabilities directly associated with assets
classified as held for sale
Deferred tax liability
Group
Group
Deferred Deferred tax
liability
tax asset
£’000
£’000
Company
Company
Deferred Deferred tax
liability
tax asset
£’000
£’000
311
74
37
(45)
-
377
(94)
(53)
-
230
Group
2018
£’000
15
193
22
230
-
230
(648)
-
(1,129)
(1,777)
-
(1,777)
(1,640)
357
(3)
79
(412)
(1,619)
(94)
(4)
(60)
(1,777)
146
22
64
-
-
232
(20)
(69)
-
143
-
-
-
-
-
-
-
-
-
-
Group
2017
£’000
Company
2018
£’000
Company
2017
£’000
12
236
174
422
(45)
377
(803)
(15)
(880)
(1,698)
79
(1,619)
7
136
-
143
-
143
-
-
-
-
-
-
6
226
-
232
-
232
-
-
-
-
-
-
Deferred tax assets and liabilities have been measured on an undiscounted basis at an effective tax rate of 17% and 25%
(30 September 2017: 17% and 38%) in the UK and USA, respectively. As at 30 September 2018, the Group has un-provided
deferred tax assets of £658,000 arising on unrelieved trading losses for which recoverability is not certain (2017: £649,000).
The gross amount of these losses is £3,498,000 (2017: £3,819,000).
59
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OXFORD METRICS PLC ANNUAL REPORT 2018
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2018
20. Other liabilities
Deferred income
Contingent consideration payable (note 26)
Group
2018
£’000
332
299
631
Group
2017
£’000
286
717
1,003
Company
2018
£’000
Company
2017
£’000
-
-
-
-
-
-
The deferred income above relates to revenue from support contracts which cover a period of more than 12 months from
30 September 2018.
The contingent consideration payable relates to the acquisition of IMeasureU Limited during the year.
21. Provisions
At 1 October 2017
Credited to income statement – leasehold dilapidations
At 30 September 2018
Group
£’000
Company
£’000
185
(177)
8
-
-
-
Leasehold dilapidations relate to the estimated cost of returning the Group’s leasehold properties to their original state at the
end of the lease in accordance with the lease terms.
22. Share capital
Allotted, called up and fully paid
124,905,475 shares of 0.25p (2017: 123,052,402 ordinary shares of 0.25p)
2018
£’000
312
2017
£’000
308
During the year ended 30 September 2018 1,812,750 shares (2017: 1,676,174 shares) were issued relating to share options
that were exercised. In addition 40,323 shares were issued to the non-executive chairman, Roger Parry, in satisfaction of
salary.
At 30 September 2018 options were outstanding over 5,901,472 ordinary shares of 0.25p each (2017: 7,714,222) including
those held by directors as follows:
Number of shares
over which options granted
1,800,000
77,194
50,000
179,278
3,795,000
Exercise price
Exercise period
0.00p
31.18p
33.12p
35.43p
59.06p
December 2019 to December 2026
September 2015 to September 2023
March 2015 to March 2022
March 2016 to March 2025
September 2019 to July 2027
Details of directors’ interests in share options are shown in the Report on Remuneration.
The market price of the ordinary shares at 30 September 2018 was 76.70p (2017: 58.75p) and the range during the year was
57.56p to 80.60p (2017: 44.00p to 60.25p). Shares to be issued are detailed in the Statement of Changes in Equity.
60
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OXFORD METRICS PLC ANNUAL REPORT 2018
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2018
23. Share based payments
The Group operates a number of share based remuneration schemes for employees introduced in 2001. Under these schemes
the board can grant options over shares in the Company to employees of the Group. Options are granted with a fixed exercise
price equal to the market price of the shares under option at the date of grant. The contractual life of an option is 10 years.
Awards under the share based remuneration schemes are generally reserved for employees at senior management level and
above.
Options granted under the share based remuneration schemes generally become exercisable on the second anniversary of the
date of grant. Exercise of an option is subject to continued employment. Options were valued using the Monte-Carlo option-
pricing model. No performance conditions were included in the fair value calculations, except for market-related conditions.
A reconciliation of option movements over the year to 30 September 2018 is shown below:
Outstanding at 1 October
Granted
Exercised
Forfeited
Outstanding at 30 September
Exercisable at 30 September
2018
––––––––––––––––––––––––
Weighted
average
exercise
price
(pence)
Number
‘000
2017
–––––––––––––––––––––––
Weighted
average
exercise
price
(pence)
Number
‘000
7,714
-
1,813
-
5,901
306
30.46
-
0.25
-
39.74
33.98
4,129
5,595
1,676
334
7,714
2,053
16.63
40.06
26.66
39.27
30.46
4.14
The weighted average share price at the date of exercise for options exercised during the year ended 30 September 2018 was
61.50 pence (2017: 49.64 pence).
Share options outstanding at the year end
Range of
exercise
prices
(pence)
0.00
0.25
31.18
33.12
35.43
59.06
2018
2017
–––––––––––––––––––––––––––––––––––– ––––––––––––––––––––––––––––––––––––
Weighted
average
contractual
remaining
life
(years)
Weighted
average
exercise Number of
shares
(‘000)
Weighted
average
contractual
remaining
life
(years)
Weighted
average
exercise
price
(pence)
Number of
shares
(‘000)
price
(pence)
0.00
0.25
31.18
33.12
35.43
59.06
1,800
-
77
50
179
3,795
8
-
5
3
6
9
0.00
0.25
31.18
33.12
35.43
59.06
1,800
1,813
77
50
179
3,795
9
5
6
5
7
10
The total charge for the year relating to employee share based payment plans was £323,000 (2017: £142,000), all of which
related to equity-settled share based payment transactions.
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OXFORD METRICS PLC ANNUAL REPORT 2018
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2018
There were no options granted in the year ended 30 September 2018. The assumptions used in the calculation of the fair value
of the options granted during the year ended 30 September 2017 were as follows:
Expected volatility (%)(1)
Expected life (years)(2)
Risk free rate (%)(3)
Exercise price (pence)
Vesting period (years)
Option life (years)
LTIP
37.6
5
0.68
0.00
1-3
10
Other
37.8
5
0.43
59.06
1-3
10
Notes
(1)
(2)
(3)
The expected volatility is based on historical volatility over the last 5 years.
The expected life is the expected period to exercise.
The risk free rate of return is the yield on zero-coupon UK government bonds of a term consistent with the assumed
option life.
The weighted average grant date fair value of options granted in the year ended 30 September 2017 was 18.47p.
Details of directors’ interests in share options are shown in the Report on Remuneration.
24. Movement in reserves
The movement in reserves are disclosed fully within the Consolidated and Company Statement of Changes in Equity on
pages 27 and 28. The description of the nature and purpose of each reserve within owner’s equity is as follows:
Reserve
Description and purpose
Share capital
Shares to be issued
Share premium account
Foreign currency translation
Retained earnings
Amount subscribed for share capital at nominal value.
Shares to be issued to Bartle Bogle Hegarty in exchange for services received.
Amount subscribed for share capital in excess of nominal value.
Gains/losses arising on retranslation of the net assets of overseas operations into sterling.
Cumulative net gains and losses recognised in the consolidated income statement.
25. Assets and liabilities classified as held for sale
During the prior year the Board announced its intention to dispose of the Yotta Surveying cash generating unit.
The following major classes of assets and liabilities relating to Yotta Surveying were classified as held for sale in the
consolidated statement of financial position at 30 September 2017.
Goodwill and intangible assets
Property, plant and equipment
Deferred tax asset
Inventory
Trade and other receivables
Cash and cash equivalents
Assets held for sale
Trade and other payables
Deferred tax liability
Liabilities associated with assets held for sale
Yotta Surveying
2017
£’000
961
99
45
10
1,332
600
3,047
505
79
584
An impairment loss of £1,609,000 on the measurement of the Yotta Surveying cash generating unit goodwill to fair value was
recognised and included within administrative expenses during the year ended 30 September 2017.
62
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OXFORD METRICS PLC ANNUAL REPORT 2018
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2018
Within the Company the investment in Yotta Surveying Limited of £1,000,000 was classified as held for sale at 30 September
2017. There were no liabilities associated with assets held for sale.
An impairment loss of £6,558,000 was recognised and included within administrative expenses during the year ended
30 September 2017 in Oxford Metrics plc on the measurement of the investment in Yotta Surveying Limited to fair value.
26. Business combination in prior period
On 27 June 2017 the Group purchased 100% of the share capital of IMeasureU Limited, a company registered in New
Zealand, whose principal activity is the provision of computer software for a total consideration with a fair value of up to
£3,224,000. This includes deferred contingent consideration with a fair value on the date of acquisition of up to £1,116,000
subject to certain performance conditions being met. At 30 September 2017 the fair value of deferred contingent consideration
was adjusted to £1,050,000 as a result of foreign exchange movements. The purchase has been accounted for as an
acquisition.
All intangible assets have been recognised at their respective provisional fair values. The residual excess over the net assets
acquired, including intangible assets, is recognised as goodwill in the financial statements.
The total goodwill arising on acquisition was £1,076,000 which is subject to an annual impairment review.
The fair value of the business assets acquired was as follows:
Intellectual property
Property, plant and equipment
Inventory
Accounts receivable
Other debtors
Cash
Accounts payable
Other creditors
Deferred tax liability
Net business assets acquired
Consideration:
Cash
Deferred contingent consideration
Total consideration
Goodwill arising
Book value
£’000
26
7
2
44
1
66
(1)
(7)
-
Fair
valuation
£’000
2,422
-
-
-
-
-
-
(412)
138
2,010
Fair
value
£’000
2,448
7
2
44
1
66
(1)
(7)
(412)
2,148
£’000
2,108
1,116
3,224
1,076
The cash consideration paid, net of cash acquired of £66,000 was £2,042,000.
The intangible assets acquired as part of the business combination significantly relate to intellectual property.
The main factors leading to the recognition of goodwill are the presence of certain intangible assets, such as the assembled
workforce of the acquired entity, that do not qualify for separate recognition and synergistic cost savings that result in the
Group being prepared to pay a premium.
The contingent consideration is denominated in New Zealand dollars and is dependent upon certain revenues being achieved
in the period commencing on the date of acquisition and ending on 30 September 2019. The fair value of the contingent
consideration payable has been measured using a discount rate of 35%. The contingent consideration is payable 20 days after
each earn out review date. At the date of acquisition the undiscounted value of possible outcomes was between £nil and
£2,900,000.
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OXFORD METRICS PLC ANNUAL REPORT 2018
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2018
An adjustment to reduce the fair value of deferred contingent consideration by £628,000 was recognised during the year in line
with revised revenue forecasts over the remaining performance period. During the year ended 30 September 2018 £76,000 of
contingent consideration was paid. At 30 September 2018 the fair value of the remaining contingent consideration is £462,000,
of which £163,000 is due in less than 1 year.
The acquired business contributed revenues of £74,000 and a loss before tax of £132,000 to the Group for the period from
27 June 2017 to 30 September 2017. If the acquisition had occurred on 1 October 2016, Group revenue from continuing
operations would have been £29,353,000 and profit before tax from continuing operations would have been £3,343,000. These
amounts have been calculated using the Group’s accounting policies.
The costs associated with the acquisition of IMeasureU Limited amounted to £137,000 and have been recognised as an
expense in the year. They have been included within the income statement as part of administrative expenses.
27. Pensions
The Company operates a defined contribution pension scheme for the benefit of the UK employees. The assets of the scheme
are administered by trustees in a fund independent from those of the Group. The amount charged under this scheme to the
income statement during the year was £499,000 (2017: £451,000).
Pension contributions are also paid for the benefit of US employees under the 401k savings plan scheme, a US government
savings scheme. The amount charged under this scheme to the income statement during the year was £76,000 (2017:
£58,000).
28. Government grants
During the year £173,000 (2017: £89,000) of Government grants were recognised in the income statement. These grants
significantly relate to funding for research projects.
There are no unfulfilled conditions or other contingencies attached to the government grants recognised in the current or prior
periods.
29. Commitments under operating leases
At 30 September 2018 the Group had the following gross minimum lease payments under non - cancellable operating leases:
Not later than one year
Later than one year and not later than five years
Later than five years
Land and Buildings
2017
£’000
2018
£’000
607
1,898
588
3,093
419
2,012
887
3,318
At 30 September 2018 the total future minimum sublease payments expected to be received under non - cancellable
subleases was £134,000 (2017: £179,000).
30. Dividends
Equity - ordinary
Final 2017 paid in 2018 (1.20 pence per share)
Final 2016 paid in 2017 (1.00 pence per share)
2018
£’000
1,499
-
1,499
2017
£’000
-
1,224
1,224
The directors have announced a special dividend of 1.00p per share which will absorb an estimated £1,249,000 of
shareholders’ funds. This dividend will be paid on 25 January 2019 to shareholders on the register of members at close of
business on 14 December 2018.
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OXFORD METRICS PLC ANNUAL REPORT 2018
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2018
The directors are proposing a final dividend in respect of the financial year ended 30 September 2018 of 1.50 pence per share
(2017: 1.20 pence per share) which will absorb an estimated £1,874,000 of shareholders’ funds. This dividend will be paid on
7 March 2019 to shareholders who are on the register of members at close of business on 14 December 2018 subject to
approval at the AGM. These dividends have not been accrued in these financial statements.
31. Related party transactions
The key management personnel are deemed to be the directors. During the year short term employee benefits of £989,000
(2017: £985,000) were paid to the directors. In addition share based payments of £101,000 (2017: £115,000) were charged to
the income statement in respect of share options held by the directors. For further information see note 7.
The Company has outstanding balances and transactions with its subsidiaries as set out below:
Vicon Motion Systems Limited
Vicon Motion Systems, Inc
Yotta Surveying Limited (formerly Yotta Limited)
Yotta Limited (formerly Mayrise Limited)
Mayrise Systems Limited
OMG Life Limited
IMeasureU Limited
OMG, Inc.
Outstanding balances
2017
£’000
2018
£’000
Transactions in year
2017
£’000
2018
£’000
9,925
664
-
5,692
(123)
-
74
(6,471)
9,761
6,119
670
615
3,649
(123)
-
-
(6,415)
4,515
3,806
(6)
(615)
2,043
-
-
74
(56)
5,246
3,138
109
(6,520)
3,304
(123)
-
-
(1,482)
(1,574)
Outstanding balances are unsecured and repayable on demand, they do not carry interest. Consideration for these outstanding
balances is expected to be in the form of cash or through the transfer of services.
The transactions in the year include head office recharges to subsidiaries of £2,879,000 (2017: £2,639,000). Other transactions
arise from treasury cash management between the Company and its subsidiaries.
The amount receivable from OMG Life Limited is stated net of a provision of £2,621,000 (2017: £2,621,000) and the amount
recognised as an expense in the year in respect of doubtful debts from related parties was £nil (2017: credit of £268,000).
During the prior year West Eight Investments Limited, a company in which Roger Parry is a shareholder, invoiced Oxford
Metrics plc £30,000 for consultancy services. At 30 September 2017 and 2018 the balance outstanding was £nil.
Nick Bolton, David Deacon, Catherine Robertson, Adrian Carey and Julian Morris are also shareholders of Pimloc Limited.
During the year the Company invoiced Pimloc Limited £31,000 (2017: £67,000) to recover costs paid by Oxford Metrics plc on
their behalf. At the year end the balance outstanding was £7,000 (2017: £5,000). Oxford Metrics plc have also paid a rent
deposit on behalf of Pimloc Limited of £8,000 which is included in prepayments at the year end.
Dividends received by directors of the company during the year were as follows:
Roger Parry
Jonathon Reeve
Adrian Carey
Julian Morris*
Nick Bolton
David Deacon
Catherine Robertson
2018
£’000
2017
£’000
2
-
2
-
29
14
17
2
-
2
-
18
9
14
* On 17 May 2016 Julian Morris transferred his entire shareholding to himself and his wife as the Trustees of The Appleton
Trust. The Trust has been established primarily for a class of potential beneficiaries including Julian Morris, his wife and
members of their family. Dividends received by the Trust during the year were £85,000 (2017: £81,000).
65
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OXFORD METRICS PLC ANNUAL REPORT 2018
COMPANY INFORMATION
Company registration number:
3998880
Registered office:
Directors:
Secretary:
Bankers:
Solicitors:
Broker and nominated advisor:
Registrars:
Auditors:
6 Oxford Industrial Park
Yarnton
Oxfordshire
OX5 1QU
Roger Parry (Non-executive Chairman)
Jonathon Reeve (Non-executive Director)
Adrian Carey (Non-executive Director)
David Quantrell (Non-executive Director)
Nick Bolton (Chief Executive)
David Deacon (Finance Director)
Catherine Robertson (Executive Director)
Catherine Robertson
National Westminster Bank plc
121 High Street
Oxford
OX1 4DD
Goodman Derrick LLP
10 St Bride St
London
EC4A 4AD
N+1 Singer Advisory LLP
1 Bartholomew Lane
London
EC2N 2AX
Link Asset Services
The Registry
34 Beckenham Road
Beckenham
Kent
BR3 4TU
BDO LLP
Level 12, Thames Tower
Station Road
Reading
Berkshire
RG1 1LX
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Notice of Annual General Meeting
This document is important and requires your immediate attention. If you are in any doubt as to what action to take
you are recommended to consult your stockbroker, solicitor, accountant or other independent adviser authorised
under the Financial Services and Markets Act 2000.
If you have sold or transferred all of your ordinary shares in Oxford Metrics plc, you should pass this document, together with
the accompanying form of proxy, to the person through whom the sale or transfer was made for the transmission to the
purchaser or transferee.
Oxford Metrics Plc
Notice of annual general meeting
Notice of the annual general meeting which has been convened for 21 February 2019 at 2.30pm at Oxford Metrics plc,
6 Oxford Industrial Park, Yarnton, Oxfordshire, OX5 1QU is set out below.
To be valid, forms of proxy must be completed and returned in accordance with the instructions printed thereon so as to be
received by the Company’s registrars, Link Asset Services, PXS 1, 34 Beckenham Road, Kent, BR3 4ZF as soon as possible
and in any event not later than 48 hours (excluding days that are not a working day) before the time appointed for holding the
meeting.
Notice is hereby given that the 2019 annual general meeting of Oxford Metrics plc (the “Company”) will be held at 6 Oxford
Industrial Park, Yarnton, Oxfordshire, OX5 1QU on 21 February 2019 at 2.30pm for the following purposes:
Ordinary business
1.
2.
3.
4.
5.
6.
To receive and adopt the financial statements of the Company for the financial year ended 30 September 2018 and the
reports of the directors and auditors on those financial statements.
To reappoint BDO LLP as auditors of the Company and to authorise the directors to determine the auditors’
remuneration.
To declare a final dividend of 1.5 pence per share on each of the Company’s ordinary shares for the financial year ended
30 September 2018.
To re-elect David Quantrell who retires by rotation in accordance with the Company’s articles of association and offers
himself for re-appointment by general meeting, as a director of the Company.
To re-elect Jonathon Reeve who retires by rotation in accordance with the Company’s articles of association and offers
himself for re-appointment by general meeting, as a director of the Company.
To re-elect Adrian Carey who retires by rotation in accordance with the Company’s articles of association and offers
himself for re-appointment by general meeting, as a director of the Company.
Special business
As special business to consider and, if thought fit, pass resolution 7 as an ordinary resolution and resolutions 8 and 9 as
special resolutions. For special resolutions to pass, at least three-quarters of the votes cast must be in favour of the resolution.
7.
That the directors be and are hereby generally and unconditionally authorised for the purposes of section 551 of the
Companies Act 2006 (the “Act”) to exercise all the powers of the Company to allot shares in the Company and grant
rights to subscribe for or convert any security into shares in the Company up to an aggregate nominal amount of
£156,132.
This authority shall apply in substitution for all previous authorities (but without prejudice to the validity of any allotment
pursuant to such previous authority) and shall unless previously revoked, varied or renewed by the Company in general
meeting, expire on 20 February 2024, save that the Company may before such expiry make any offer or agreement which
would or might require shares to be allotted or rights granted to subscribe for or convert any security into shares after
such expiry and the directors may allot shares or grant such rights in pursuance of any such offer or agreement as if the
power and authority conferred by this resolution had not expired.
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8.
Special Resolution. That, subject to the passing of resolution 7 above, the directors be and are hereby generally and
unconditionally given power for the purposes of section 570 of the Act to allot equity securities (within the meaning of
section 560 of the Act and to include the sale of treasury shares as referred to in section 560(3) of the Act) for cash
pursuant to the authority conferred by resolution 7 above, in each case as if section 561 of the Act did not apply to any
such allotment, provided that this power shall be limited to:
(a)
the allotment of equity securities in connection with an offer or pursuant to a rights issue, open offer or other
pro-rata issue made to:
i)
ii)
the holders of shares in the Company in proportion (as nearly as may be practicable) to the respective
numbers of shares held by them; and
holders of other equity securities, as required by the rights of those securities or, subject to such rights, as the
directors of the Company otherwise consider necessary, and the directors of the Company may impose any
limits or restrictions and make any arrangements which they consider necessary or appropriate to deal with
treasury shares, fractional entitlements, record dates, legal, regulatory or practical problems in, or under the
laws of, any territory or any other matter; and
(b)
(c)
the grant of options to subscribe for shares in the Company, and the allotment of such shares pursuant to the exercise
of options granted, under the terms of any share option scheme adopted or operated by the Company; and
the allotment of equity securities, other than pursuant to sub-paragraphs (a) and (b) above of this resolution, up to
an aggregate nominal amount of £31,226.
This power shall (unless previously renewed, varied or revoked by the Company in general meeting) expire on
20 February 2024, save that the Company may before the expiry of this power make any offer or enter into any
agreement which would or might require equity securities to be allotted, or treasury shares sold, after such expiry and the
directors may allot equity securities or sell treasury shares in pursuance of any such offer or agreement as if the power
conferred by this resolution had not expired.
9.
Special Resolution. That the Company be and is hereby generally and unconditionally authorised for the purposes of
section 701 of the Act to make market purchases (as defined in section 693(4) of the Act) of ordinary shares of 0.25 pence
each in the capital of the Company (“Ordinary Shares”) in such manner and on such terms as the directors of the Company
may from time to time determine, and where such shares are held as treasury shares, the Company may use them for the
purposes set out in sections 727 or 729 of the Act, including for the purpose of its employee share schemes, provided that:
(a)
(b)
(c)
the maximum number of Ordinary Shares authorised to be purchased is 12,490,547
the minimum purchase price which may be paid for any Ordinary Share is 0.25 pence (exclusive of expenses); and
the maximum purchase price which may be paid for any Ordinary Share is the higher of (in each case exclusive of
expenses):
i)
ii)
an amount equal to 105% of the average of the middle market quotations for an Ordinary Share as derived
from the London Stock Exchange Daily Official List for the five business days immediately preceding the day
on which the purchase is made; and
an amount equal to the higher of the price of the last independent trade and the highest current independent
bid as derived from the London Stock Exchange’s trading system known as SEAQ; and this authority shall
take effect on the date of passing of this resolution and shall (unless previously revoked, renewed or varied)
expire on the conclusion of the next annual general meeting of the Company after the passing of this
resolution or, if earlier, 15 months after the date of passing of this resolution, save in relation to purchases of
Ordinary Shares the contract for which was concluded before the expiry of this authority and which will or
may be executed wholly or partly after such expiry.
By order of the Board
Catherine Robertson
Company Secretary
3 December 2018
Registered office: 6 Oxford Industrial Park, Yarnton, Oxfordshire, OX5 1QU
The notes on voting procedures, together with explanatory notes on the resolutions to be put to the meeting, which follow,
form part of this notice.
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Notes:
1. Only holders of Ordinary Shares are entitled to attend and vote at this meeting. A member entitled to attend and vote at
the meeting is entitled to appoint another person as his proxy to exercise all or any of his rights to attend and to speak
and vote at the meeting and at any adjournment of it. Such a member may appoint more than one proxy in relation to the
meeting, provided that each proxy is appointed to exercise the rights attached to a different share or shares held by that
member. A member may only appoint a proxy using the procedures set out in these notes and the notes to the proxy
form. A proxy need not be a member of the Company. Completion and return of a form of proxy will not preclude a
member from attending and voting in person at the meeting or any adjournment of the meeting.
2.
3.
4.
5.
6.
7.
A form of proxy is provided with this notice and instructions for use are shown on the form. To be effective, the completed
form of proxy must be deposited at the office of the Company’s registrars, Link Asset Services, PXS 1, 34 Beckenham
Road, Kent BR3 4ZF, by not later than 48 hours (excluding days that are not a working day) before the start of the meeting
(or any adjournment of the meeting) together with, if appropriate, the power of attorney or other authority (if any) under
which it is signed or a notarially certified or office copy of such power of authority.
A vote withheld option is provided on the form of proxy to enable you to instruct your proxy not to vote on any particular
resolution, however, it should be noted that a vote withheld in this way is not a ‘vote’ in law and will not be counted in the
calculation of the proportion of the votes ‘For’ and ‘Against’ a resolution.
The Company, pursuant to Regulation 41 of the Uncertificated Securities Regulations 2001, specifies that only those
shareholders registered in the register of members of the Company at close of business on 19 February 2019 shall be
entitled to attend and vote at this annual general meeting in respect of such number of shares registered in their name at
that time. Changes to entries on the register of members after close of business on 19 February 2019 shall be
disregarded in determining the rights of any person to attend or vote at the meeting.
Copies of the service agreements of the executive directors and the letters of appointment of the non-executive directors
will be available for inspection during normal business hours from the date of dispatch of this notice until the date of the
meeting (Saturdays, Sundays and public holidays excepted) at the registered office of the Company and will also be
made available for inspection at the place of the annual general meeting for a period of 15 minutes prior to and during the
continuance of the meeting.
Any corporation which is a member can appoint one or more corporate representatives who may exercise on its behalf all
of its powers as a member provided that they do not so in relation to the same shares.
Except as provided above, members who wish to communicate with the Company in relation to the meeting should do
so by calling our shareholder helpline on 0871 664 0300 (calls cost 12p per minute plus network extras) or, if calling from
overseas, on +44 371 664 0300. Lines are open 9.00am – 5.30pm Monday to Friday. No other methods of
communication will be accepted.
Explanatory notes
Report and Accounts (Resolution 1)
The directors of the Company must present the accounts to the meeting.
Reappointment and remuneration of auditors (Resolution 2)
Resolution 2 proposes the reappointment of BDO LLP as auditors of the Company and authorises the directors to set their
remuneration.
Declaration of a dividend (Resolution 3)
A final dividend can only be paid after the shareholders at a general meeting have approved it. A final dividend of 1.5 pence per
Ordinary Share is recommended by the directors for payment to shareholders who are on the register of members at the close
of business on 14 December 2018. If approved, the date of payment of the final dividend will be 7 March 2019.
Re-election of directors (Resolutions 4, 5, and 6)
The Company’s articles of association require that all directors retire at least every three years and that all newly appointed
directors retire at the first annual general meeting following their appointment.
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At this meeting, David Quantrell, Jonathon Reeve, and Adrian Carey will retire and stand for re-election as directors. Having
considered the performance of and contribution made by each of the directors standing for re-election the board remains
satisfied that the performance of each of the relevant directors continues to be effective and to demonstrate commitment to
the role and, as such, recommends their re-election.
Directors’ authority to allot securities (Resolution 7)
Your directors may only allot shares or grant rights over shares if authorised to do so by shareholders. The authority granted at
the last annual general meeting will expire on the passing of this resolution or, if it is not passed, on 20 February 2024. The
authority in resolution 7 will allow the directors to allot new shares in the Company or to grant rights to subscribe for or convert
any security into shares in the Company up to a nominal value of £156,132.
As at 3 December 2018, the Company did not hold any shares in treasury. If the resolution is passed, the authority will expire
on 20 February 2024 unless previously revoked, varied or renewed.
Disapplication of pre-emption rights (Resolution 8)
If the directors wish to allot any of the unissued shares or grant rights over shares or sell treasury shares for cash (other than
pursuant to an employee share scheme) company law requires that these shares are first offered to existing shareholders in
proportion to their existing holdings. There may be occasions, however, when the directors will need the flexibility to finance
business opportunities by the issue of equity securities without a pre-emptive offer to existing shareholders. This cannot be
done under the Act unless the shareholders have first waived their pre-emption rights.
Resolution 8 asks the shareholders to do this and, apart from rights issues or any other pre-emptive offer concerning equity
securities and the grant of share options, the authority will be limited to allotment of equity securities for cash up to a
maximum number of 12,490,547; ordinary shares (which includes the sale on a non-pre-emptive basis of any shares held in
treasury). Shareholders will note that this resolution also relates to treasury shares and will be proposed as a special resolution.
This resolution seeks a disapplication of the pre-emption rights on a rights issue so as to allow the directors to make
exclusions or such other arrangements as may be appropriate to resolve legal or practical problems which, for example, might
arise with overseas shareholders.
If given, the authority will expire on 20 February 2024.
Authority to purchase own shares (Resolution 9)
In certain circumstances, it may be advantageous for the Company to purchase its own shares and resolution 9 seeks the
authority from shareholders to continue to do so. The directors will continue to exercise this power only when, in the light of
market conditions prevailing at the time, they believe that the effect of such purchases will be to increase earnings per share
and is in the best interests of shareholders generally. Other investment opportunities, appropriate gearing levels and the overall
position of the Company will be taken into account when exercising this authority.
Any shares purchased in this way will be cancelled and the number of shares in issue will be reduced accordingly, save that
the Company may hold in treasury any of its own shares that it purchases pursuant to the Act and the authority conferred by
this resolution. This gives the Company the ability to re-issue treasury shares quickly and cost-effectively and provides the
Company with greater flexibility in the management of its capital base. It also gives the Company the opportunity to satisfy
employee share scheme awards with treasury shares.
Once held in treasury, the Company is not entitled to exercise any rights, including the right to attend and vote at meetings in
respect of the shares. Further, no dividend or other distribution of the Company’s assets may be made to the Company in
respect of the treasury shares.
The resolution specifies the maximum number of Ordinary Shares that may be acquired and the maximum and minimum prices
at which they may be bought.
Resolution 9 will be proposed as a special resolution to provide the Company with the necessary authority. If given, this
authority will expire at the conclusion of the next annual general meeting of the Company in 2020 or, if earlier, the date which is
15 months after the date of passing of the resolution.
The directors intend to seek renewal of this power at subsequent annual general meetings.
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Form of Proxy
Notes for completion of the proxy form
1.
2.
3.
4.
5.
6.
As a member of the Company you are entitled to appoint another person as your proxy to exercise all or any of your
rights to attend, speak and vote at a general meeting of the Company. You must follow the appointment procedures set
out in these notes.
Completion and return of this proxy form or appointment of a proxy electronically using the CREST electronic proxy
appointment service will not preclude you from attending the meeting and voting in person. If you have appointed a
proxy and attend the meeting in person, your proxy appointment will automatically be terminated.
A proxy does not need to be a member of the Company but must attend the meeting to represent you. To appoint as
your proxy a person other than the chairman of the meeting, insert their full name in the box. If you sign and return this
proxy form with no name inserted in the box on page 73, the chairman of the meeting will be deemed to be your proxy.
Where you appoint as your proxy someone other than the chairman, you are responsible for ensuring that they attend the
meeting and are aware of your voting intentions. If you wish your proxy to make any comments on your behalf at the
meeting, you will need to appoint someone other than the chairman and give them the relevant instructions directly.
If you appoint a proxy to vote on your behalf at this annual general meeting, your voting rights will revert to you at the
conclusion of the annual general meeting or any adjournment of the annual general meeting.
You may appoint more than one proxy provided each proxy is appointed to exercise rights attached to different shares.
To appoint more than one proxy, please insert the name of each proxy to be appointed in the box on page 73 and insert
in brackets after each name the number of shares in respect of which each respective proxy is appointed.
To direct your proxy how to vote on the resolutions, please indicate how you wish your vote to be cast by placing ‘X’ in
the appropriate column. To abstain from voting on a resolution, select the relevant “Vote withheld” box. Please note that a
vote withheld is not a vote in law, which means that the vote will not be counted in the calculation of votes for or against
the resolution. If you either select the “Discretionary” option or if no specific direction as to how you wish your vote to be
cast is given, your proxy may vote or abstain, at his or her discretion. On any other business which is put before the
meeting (including a motion to adjourn the meeting or to amend a resolution) the proxy will vote (or abstain from voting)
at his or her discretion.
7.
To be valid, this proxy form must be:
(a) completed and signed;
8.
9.
10.
(b) sent or delivered to Link Asset Services, PXS 1, 34 Beckenham Road, Beckenham BR3 4ZF; and
(c) received by Link Asset Services, no later than 48 hours (excluding days that are not a working day) before the time
of the meeting.
If a member is a company, this proxy form must be executed under its common seal (or such form of execution as has
the same effect) or executed on its behalf by a duly authorised officer of the company or an attorney for the company.
A copy of the authorisation of such officer or attorney must be lodged with this proxy form.
If this proxy form is executed under a power of attorney or any other authority the original power or authority (or a duly
certified copy of such power or authority) must be lodged together with this proxy form.
In the case of joint holders, any one holder may sign the form of proxy but all the names of the joint holders should be
stated on this proxy form. If more than one of the joint holders purports to appoint a proxy, the appointment submitted by
the most senior holder will be accepted to the exclusion of the appointment(s) of the other joint holder(s), seniority being
determined by the order in which the names of the joint holders stand in the register of members of the Company in
respect of the joint holding (the first-named being the most senior).
11.
If you submit more than one valid proxy appointment in respect of the same shares, the appointment received last before
the latest time for the receipt of proxies will take precedence.
12. Any alterations made to this form should be initialled.
13. You may not use any fax number or email address or other electronic address provided in this proxy form to
communicate with the Company for any purposes other than those expressly stated.
If you have any queries completing this form please contact Link Asset Services on telephone number 0871 664 0300 (calls
cost 12p per minute plus network extras) or, if calling from overseas, on +44 371 664 0300. Lines are open 9.00am – 5.30pm,
Monday to Friday.
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Form of Proxy
For use at the annual general meeting to be held at 6 Oxford Industrial Park, Yarnton, Oxfordshire, OX5 1QU on
21 February 2019. Before completing this form, please read the explanatory notes opposite.
I/We ....................................................................................................................................................................................................
Of........................................................................................................................................................................................................
being [a] member[s] of Oxford Metrics plc (the “Company”), hereby appoint the chairman of the meeting or (see note 3)
...........................................................................................................................................................................................................
as my/our proxy (see note 4) to attend, speak and vote for me/us on my/our behalf at the annual general meeting of the
Company to be held on 21 February 2019 and at any adjournment of the meeting.
I/We have indicated with an ‘X’ in the appropriate spaces how I/we wish my/our votes to be cast and direct the proxy to vote
as indicated.
If this form is signed and returned without any indication as to how my/our proxy shall vote, my/our proxy may exercise his or
her discretion as to both how he or she votes (including as to any amendments to the resolutions) and whether or not he or she
abstains from voting.
I/We authorise my/our proxy to vote (or abstain from voting) as he or she thinks fit in relation to any other matter which is put
before the meeting.
Resolution. (Place X in appropriate box)
For
Against
Withheld
Discretionary
Ordinary business
1. To receive and adopt the financial statements for the
year ended 30 September 2018
✃
2. To re-appoint BDO LLP as auditors and authorise
the directors to fix their remuneration
3. To declare a final dividend
4. To re-elect David Quantrell as a director
5. To re-elect Jonathon Reeve as a director
6. To re-elect Adrian Carey as a director
Special business
7. To authorise the directors to allot shares pursuant to
section 551 of the Companies Act 2006 (the “Act”)
8. To authorise the directors to allot shares pursuant to
section 570 of the Act as if section 561 of the
Act did not apply
9.
To authorise the Company to make one or more
market purchases of ordinary shares in the company
Signature(s) ...................................Date ...................2019
Signature(s) ....................................Date .........................2019
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[Please return in envelope supplied]
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Perivan Financial Print 252680