OXFORD METRICS PLC
ANNUAL REPORT AND
FINANCIAL STATEMENTS
FOR THE YEAR ENDED
30 SEPTEMBER 2019
COMPANY NO 03998880
OXFORD METRICS PLC ANNUAL REPORT 2019
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 and 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 2019
CHAIRMAN’S STATEMENT
We are pleased to report another year of clear growth for the business, setting a new record for revenue performance whilst
delivering tangible strategic progress. Revenue from continuing operations grew 11.7% to £35.3m (FY18: £31.7m) and
Adjusted PBT* from continuing operations was up 5.7% at £5.5m (FY18: £5.2m). The Company reports another year of strong
cash generation, finishing with £13.8m at year-end (FY18: £12.2m) having paid a special dividend of £1.2m (2018: Nil) and the
final 2018 dividend of £1.9m (2018: £1.5m) during the year.
Further, in light of the strong cash performance we are pleased to propose a 20% increase in our final dividend to 1.80p per
share (FY18: 1.50p) 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.
Strategic Progress
Just over half-way through our current five-year plan, the business has made demonstrable progress over the past year
through our “amplify the core” strategy. This strategy recognises we operate in exciting markets, with differentiated products
and loyal customers, and from this strong platform we aim to amplify their visible, material capabilities.
Indeed, this platform has driven our software into yet more applications over the past 12 months. Our ingenious customers
have been using our software – sometimes in the cloud, sometimes running on specialised hardware – to improve innumerable
walks of life by measuring and analysing the metrics that matter most to them. Through our software, our customers have
accelerated the rehab of injured elite athletes; they have created new immersive, free-to-roam Virtual Reality (VR) experiences;
they have made highways safer and cheaper to maintain; and they have made sure domestic waste is efficiently collected from
our doorsteps. The demand for more precise capture and analysis of data is clear and in an ever-increasing number of
applications, measurement matters.
Our software captures, analyses and presents data, which enables our customers to optimise the metrics that matter most to
make better informed decisions, manage processes and assets. Our focus is all about those metrics – helping customers
acquire them, analyse them and act on them. In this way, we enable customers to see something that could otherwise not be
seen – measurement is in our DNA and is our common thread.
We deliver this strategy through three key organic mechanisms within our existing divisions; all of which were utilised over the
past year.
• Using market and technology insights to guide R&D investment to increase product range and solution differentiation.
• Developing new adjacent vertical and geographical market opportunities either directly or indirectly through partners.
•
Improving quality of earnings through developing SaaS opportunities, which are recurring and high quality in nature,
wherever possible, and building long-term relationships with repeat customers.
Furthermore, the Company is actively seeking to deploy cash resources to augment organic growth through earnings-accretive
acquisitions, which would aim to extend product range, grow market share and/or increase differentiation.
Board
In February 2019 we announced the retirement of long-standing Non-Executive Director and Chair of our Remuneration
Committee, Jonathon Reeve. Amongst many achievements whilst on the Board, as a former Rear Admiral in the Navy,
Jonathon made an invaluable contribution to the growth of our defence-focussed subsidiary, 2d3, and its eventual premium
sale to Boeing in April 2015 for $25M. On behalf of shareholders and employees alike, I wish to thank Jonathon for his great
work and wish him a fulfilling and relaxing retirement.
On November 21st 2019, we appointed Naomi Climer to replace Jonathon as Chair of the Remuneration Committee. Naomi
has had a successful executive career in broadcast, media and the communications technology sectors with the BBC, ITV
Digital and Sony. Naomi is currently a Non-Executive Board Member at Sony UK Technology Centre, a Non-Executive Director
at Focusrite plc, Chair at the International Broadcasting Convention Council (an advisory body), Trustee and Vice President at
the Royal Academy of Engineering, Co-chair at the Institute for the Future of Work and a Member of the Science and
Technology Awards Committee. I welcome Naomi to our Board and look forward to working with her and the rest of Board as
we further grow the business.
Lastly, I want to thank the stakeholders in our business for all their contributions over the past year – our outstanding team in
our offices worldwide, our shareholders, our partners and most importantly our customers.
Roger Parry
Chair
* Profit Before Tax before Group recharges adjusted for share-based payments, amortisation of intangibles arising on
acquisition, fair value adjustments to IMeasureU purchase consideration, impairment of Pimloc investment and exceptional
costs.
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OXFORD METRICS PLC ANNUAL REPORT 2019
STRATEGIC REPORT
OPERATIONAL REVIEW
2018/19 was another exciting year for the business with progress being made across both divisions. Our motion measurement
division, Vicon, reports record revenues for the fourth year in a row – up over 65% since FY15. Our infrastructure asset
management division, Yotta, grew its level of SaaS contracts to £6.2m by September 30th 2019.
Motion Measurement Division – Vicon
KPI
Revenue
PBT
Motion Measurement
FY19
£28.3m
FY18
£24.4m
FY19
£6.3m
FY18
£5.5m
Adjusted PBT*
FY19
£8.1m
FY18
£7.3m
This time last year, we discussed how the market for motion measurement was growing as a result of the arrival of the
Augmented Age, where our lives become increasingly enhanced and augmented through digital interfaces. In this Age, new
applications for motion measurement continue to emerge, these interfaces need to understand movement as well as humans
do. Of course, we have been doing this since 1984 and we now hold a high degree of proprietary software IP relating to this.
Just as trialled, we can see over the past 12 months how movement tracking is entering the mainstream – smartwatches,
fitness trackers, smartphones, robots, VR rigs and vehicles now routinely track movement.
This has two clear benefits for us. Firstly, more customers use our measurement platform to help them design an engineer the
motion-understanding products and systems required in the Augmented Age. This is in part what has driven the growth in
sales in our Established Markets segment during this reporting period. Secondly, it opens up new Adjacent Vertical market
opportunities where we offer a more complete solution for a specific domain. For example, in Elite Sports, our sensors and
software are being used to provide the Strength and Conditioning Coach with precise lower limb load data for a recovering
athlete during their rehabilitation process.
Established Markets – leader of the pack
2018/19 was an excellent year for our Established Markets. The business achieved record revenues, growing revenues 12.3%
year-on-year whilst improving Product Gross Margin to 74.0% (FY18: 73.4%).
Engineering Segment – Up 37.7%
The Engineering market segment performed well throughout the year, the customer list included new contracts with European
Space Agency, Thales Alenia Space, Northrup Grumman and NASA’s Jet Propulsion Lab.
Life sciences segment – Up 6.0%
There were also good wins in the Life Sciences market with a number of long-term Vicon customers all upgrading. This
included Robert Gordon University, Staffordshire University and the Human Performance Lab at Imperial College London, and
also The Shriners Group of Hospitals upgraded several sites in the US. There were also new site wins including an exceptional
order from a major sports apparel business, The University of West Scotland and Vilnius University Children’s Hospital.
With the launch of our all new Blue Trident inertial sensor in June, we also saw growing take-up of inertial measurement in our
markets. One such deal was with Red Bull for its Diagnostics and Training Centre in Austria. This site was an existing Vicon
optical measurement customer where they use the system to help rehabilitate and train Red Bull’s world-class athletes across
a multitude of sport disciplines such as athletics, ultrarunning and triathlon. This year they added Vicon inertial tracking so they
obtain precise diagnostic metrics relating to asymmetry and limb loading during training.
Entertainment segment – Up 7.6%
We built on a strong first half performance in the Entertainment market, which included large system wins at NC Soft in South
Korea and Square Enix in Japan. This strong market performance was underpinned by 34.4% year-on-year growth in the Asia
Pacific region. In the UK, games company Ninja Theory, creators of Hellblade and many other titles, invested in a significant
Vicon system to help drive their future game development.
To assist in the company’s future growth, we introduced a number of new products during the year. This included the latest
version of our flagship animation software, Shogun 1.3, which amongst other new innovative features, added practical high-
fidelity finger tracking which previously was only available using expensive third party setups.
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OXFORD METRICS PLC ANNUAL REPORT 2019
Adjacent Verticals – applied metrics for growth
Two years ago, our Adjacent Verticals segment made up less than 0.1% of total divisional revenues. In FY18, the segment
made up 3.4% of revenues and over the past year now make up 6.6% of revenues. These adjacent markets represent vertical
market opportunities, where our broad capability motion measurement systems are tailored and enhanced to provide an end-
to-end solution for the target customer. They 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 saw good market and product progress in 2018/19.
Location-based Virtual Reality
Our LBVR business continued to gain traction. LBVR is an emerging form of entertainment where participants share collective
VR experiences in a specific location, such as a shopping mall, cinema, theme-park or museum. In these experiences, users
are free to walk around and interact with each other – all within a virtual world. Vicon’s software tracks the complex movement
of these users and various props which delivers simplicity, accuracy and resilience.
We now have nine partners in the LBVR marketplace, who incorporate our systems into their entertainment centres. 2019 saw
us add Sandbox VR and VR Arcade to that group of partners. VR Arcade now have five centres open in two different countries
and Sandbox VR have 12 centres operating in six different countries. Indeed, Sandbox plan to open 40 experience rooms
across 12 new locations around the world, so there is significant opportunity to scale these partnerships over time.
We recently added the ViperX to our dedicated LBVR line, which enables the capture of larger volumes including “maze”
environments, which enables LBVR operators to run multiple parties through the same facility at the same time. This means the
operator can gain greater throughput from a single venue.
Elite Sports
Turning to our Elite Sports vertical, we grew SaaS revenues here with new customer wins with elite teams in basketball,
football and baseball amongst others. As a reminder, we provide a unique lower-limb load monitoring software, IMU Step. This
unique software, provided on a Software-as-a-Service (SaaS) basis, enables coaches to gain an objective measure of the load
an athlete endures in their lower limbs during training.
To further enhance the market, we introduced the Blue Trident sensor and a new iOS app Capture.U in June 2019. Blue Trident
is waterproof and includes two inertial sensors – one capturing the highest peaks of elite athlete activity and the other tracks
lower intensity movement. The Blue Trident also includes a gyroscope to record angular velocity and a magnetometer to
determine direction as well. The new iOS app Capture.U, receives data from Blue Trident in real-time and delivers analysis on
an iPad or iPhone – another step for motion measurement into the mainstream. This increased sophistication in measurement
and analysis opens up many new opportunities going forward.
2018/19 saw some great wins at leading sports teams and institutions, including Texas Tech University, Exponent, UNC Chapel
Hill, Airforce Academy, Stephen F. Austin University, University of Kentucky, University of Memphis and the University of
Tennessee Knoxville. Further we have recently been awarded a patent in the US for our unique approach to load management.
Given our growing market traction in Elite Sports, we plan to invest a further £0.5m in sales and marketing efforts in the year
ahead.
Other Vertical Opportunities
As part of our push into vertical markets, we also continue to explore OEM relationships, where Vicon’s tracking capability is
embedded in other companies’ end market solutions. We have a number of such engagements already, including Motek and
Innovative Sports Training. Ultimately our aim is to see Vicon software running on a wide variety of platforms, empowering the
Augmented Age with motion tracking excellence.
Asset Management Division – Yotta
KPI
Asset Management
Revenue
PBT
FY19
£7.0m
FY18
£7.3m
FY19
(£1.5m)
FY18
(£1.0m)
Adjusted PBT*
FY19
(£0.2m)
FY18
£0.4m
Our Asset Management division, Yotta, continued its transition to a SaaS-based business during the year, reporting our highest
level of ARR of £6.2m on 30th September 2019 (30th September 2018: £5.7m) coupled with high levels of customer retention
at 94.8% (FY18: 95.3%). We are pleased to report ARR has progressed to £6.5m as of 2nd December 2019. At this level ARR
is now 79% of all current operating costs so with expected further growth we look forward to a profitable year ahead which will
enhance what is already a valuable SaaS based business.
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OXFORD METRICS PLC ANNUAL REPORT 2019
Reported headline revenues of £7.0m (FY18: £7.3m) were slightly down on last year for two reasons. Firstly we have been
transitioning from a perpetual licence model to a pure SaaS model, which meant we reported only £0.2m in perpetual licenses
this year versus the £0.5m the year before. This transition to SaaS is now complete and we do not anticipate any perpetual
licenses in the year ahead. Secondly, the progress achieved in ARR was not fully reflected in the headline revenue due to
delays with customer-driven implementations.
Yotta’s three growth vectors all saw progress over the year, with a notable performance from our Direct segment, driven in part
by changes we made at the start of the financial year.
Direct
Having re-organised our direct operations early in the financial year, including bringing on a new sales lead, our pipelines and
sales have been improving through the year. We now have 138 Local Authority customers using at least one piece of our
software, of a UK total of 408 Local Authorities and remain confident about further prospects. Amongst other deals, there were
new wins at Bury, Barnsley, West Lancashire, Hillingdon and Kent County Council, and extensions of either contract length or
software footprint at many customers, including Kingston and Sutton, Wigan, Northumberland and Plymouth.
Our most notable international win was in New Zealand at Auckland System Management (ASM), a joint venture between the
New Zealand Transport Authority (NZTA), Fulton Hogan and HEB Construction, a Vinci company. ASM is now using Yotta’s
innovative software, Alloy, as a single platform to manage all their Intelligent Transport System assets which are used on the
motorways in and around Auckland, connecting multiple stakeholders and enabling them to bridge operational silos across the
organisation. It will also allow them to deploy sensor technology into the network feeding real-time data into Alloy, so ASM can
improve service levels and offer live reporting of issues and resolutions to customers.
Our Infrastructure Asset Management consultancy team delivered revenues of £1.6m (FY18: £1.8m), which were lower due to
the aforementioned delays with customer implementations. This team helps customers get the most out of their Yotta software
implementations by providing advice on such matters as providing Brighton and Hove with consultancy to help them evidence
their bid for Incentive Fund funding from the DfT, providing Westminster City Council with their value management analysis and
approach as well as working with Sunderland Council to deliver Life Cycle Planning and Investment Scenario modelling to
support future investment on their highways network.
Indirect
Our indirect business, where we aim to grow through a channel of independent market-focussed resellers, recorded a number
of notable wins during the year. These include CCFC Highway and Bogota Airport in Colombia, where Horizons is in use to
assist in strategic asset management planning.
OEM & Partnerships
During FY19 Yotta established a Major Accounts function that is targeted on developing the relationships with large,
multi-national contractors and central government agencies. Yotta has long standing relationships with many such
organisations, including Balfour Beatty, Amey, Fulton Hogan, Welsh Government and Highways England. Working with such
organisations enables us to sell into larger, integrated opportunities, where software is only a component of the solution
required.
Product progress
Our Yotta development team has delivered significant improvements in Horizons and Alloy platforms during FY19. These
developments have served to both broaden and deepen the functional footprint of both products, thereby expanding our
applicability and revenue opportunities with customers.
Version 2 of Alloy includes significant upgrades in the Workflow system that allows users to define business processes and
Alloy Mobile, which continues to deliver class-leading experience to mobile workforces. New functionality is available in Alloy
Blueprints (provides users with standardised, best-practice workflows and asset designs), In-Cab Street Cleansing and
Domestic Waste have also been released and have directly lead to wins at Chorley, Hillingdon and Barnsley.
CURRENT TRADING AND OUTLOOK
As we enter a new financial year both businesses have started well. Vicon’s sales pipeline for the first Quarter is 9% higher
than the same time last year, and Yotta has a sales pipeline opportunity for the full year consistent with adding £1m to ARR
during the financial year.
We operate two market-leading divisions 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.
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OXFORD METRICS PLC ANNUAL REPORT 2019
We are a global business with customers in over 70 countries worldwide. As such, we are a net exporter from the UK and
currently we do not anticipate any negative impact to our business from the eventual outcome of Brexit. 2018/19 was a year of
good growth for the business and with our targeted investments in organic opportunities bearing fruit and strengthened
positions in all our markets we look forward to bringing yet more innovation, more SaaS and more growth in the year ahead.
Nick Bolton
CEO
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OXFORD METRICS PLC ANNUAL REPORT 2019
FINANCIAL REVIEW
David Deacon, CFO
INCOME STATEMENT
The Group reported revenues of £35.3m (FY18: £31.7m) representing a headline improvement of 11.7%. IFRS15 has now been
fully implemented but in this year of transition it is worth noting that had revenues been recognised under IAS18 reported
revenues would have been £0.3m higher.
With a third of the Group’s revenues derived from the USA weighted toward the second half, this performance was affected by
a foreign exchange headwind in the first half and a tailwind in the second half. The average rate for the year was $1.27 (FY18:
$1.35) so revenue did benefit by £0.5m and taking account of this effect the underlying revenue growth was 10% (FY18:
11.0%). From an Adjusted PBT* perspective the net benefit was £0.2m given the Group remains naturally hedged to some
extent given we have USA operations and purchase certain components in US dollars.
Gross Profit margin reduced slightly to 71.2% (FY18: 72.4%), reflecting a slight change in the mix of revenues, in real terms
Gross Profit improved year on year by £2.3m to £25.2m.
Reviewing the cost base within the Income Statement:
•
•
•
Sales, Support and Marketing costs increased by £1.1m largely due to increased Sales and Marketing activity within Vicon
during the year. Vicon operates in multiple geographical markets so additional expenditure was necessary to properly
exploit business opportunities in these markets.
Research & Development expensed through the Income Statement was £4.2m (FY18: £3.3m). Total R&D including
capitalised development costs of £2.2m (FY18: £2.1m) was £6.4m (FY18: £5.4m), the overall increase reflected additional
R&D resources and expenses largely within Vicon and a £0.4m increase in the R&D amortisation charge. The continual
investment and innovation in product and services is necessary to maintain the Group’s competitive position. New
products and services released during the financial year are described in the CEO review.
The apparent increase in the Administrative Expenses is due to credit adjustments relating to the fair value of Deferred
Consideration payable for the IMU acquisition of £0.2m (FY18 £0.6m), underlying Administration costs were therefore
unchanged.
Adjusted PBT* for continuing operations of £5.5m (FY18: £5.2m) has been determined after adding back to the Statutory PBT
£4.7m (FY18: £4.6m) non-cash moving items such as Amortisation of Acquired Intangibles, Share Option charge, Impairment
of Investment in Pimloc, adjustment to fair value of Deferred Consideration payable for IMeasureU Limited and non-recurring
exceptional items. A full reconciliation is available in note 7.
STATEMENT OF FINANCIAL POSITION
Goodwill and Intangibles
The modest increase in Goodwill and Intangibles represents the net effect of capitalised R&D of £2.2m (FY18: £2.1m),
amortisation of development costs £1.6m (FY18: £1.2m) and the amortisation of acquired intangibles of £0.6m (FY18: £0.7m).
Property, Plant and Equipment
Capital expenditure of £0.5m (FY18: £1.2m) returned to a more normal level in the financial year following the relocation of
Vicon to new premises near Oxford and refurbishment of Yotta Offices in prior years. The depreciation charge was £0.6m
(FY18: £0.6m).
Investments
The year on year movement relates to the impairment of our 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 £3.2m (FY18: £2.4m). The movement is largely attributed to
additional inventory of £0.5m held to avoid disruption arising from Brexit.
Trade and other receivables
At the year-end Trade and other receivables increased to £11.7m (FY18: £10.6m). The overall increase related primarily to
Accounts Receivable following particularly strong September revenues in the USA.
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OXFORD METRICS PLC ANNUAL REPORT 2019
Current Liabilities
The year on year increase in Trade and other payables is accounted for by an increase in Trade Payables at the year-end at
£2.9m (FY18: £1.6m) which is trading pattern related to goods shipped in September and an increase in Deferred Income
£4.9m (FY18: £3.5m) arising from the treatment under IFRS15 for the most part.
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 to £0.0m (FY18: £0.3m) and an increase in Deferred Income to £0.5m (FY18: £0.3m)
STATEMENT OF CASHFLOWS
The Group finished the year with cash of £13.8m (FY18: £12.2m). Cash generated from operating activities was £7.7m (FY18:
£6.7m). The deployment of this cash included the 2018 Final Dividend and Special Dividend payment totalling £3.1m (FY18:
£1.5m). Proceeds from the disposal of subsidiary undertakings was £0.0m (FY18: £1.3m), in the prior year the Group disposed
of Yotta Surveying.
TAX
The Group tax charge this year was £0.5m (FY18: £0.6m) representing a blended rate of 10.8% (FY18: 12.1%). This decrease
is due in part to lower US based profits where the marginal rate of tax is 25% (FY18: 25%). The level of Group R&D activities in
the UK where the marginal rate of tax of 19% (FY18: 19%) continues to have a beneficial effect on the level of corporation tax
payable in the UK given the reliefs available.
The Deferred Tax Asset increased to £0.4m (FY18: £0.2m) due to an increase in the notional gain on exercise of outstanding
options compared to last year whilst the Deferred Tax Liability remained relatively unchanged at £1.8m (FY18: £1.8m).
KEY PERFORMANCE INDICATORS
The Group relies on financial key performance indicators including revenue, profit before tax and adjusted profit before tax (see
note 7) 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, with the US being a significant market, 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 2019
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 key distributors, who provide insight into local markets and an effective defence
against competitive activity. Disruption to Vicon’s relationship with these key distributors would have an adverse effect on
the business. However, 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 19 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 and inventory levels increased. 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
2 December 2019
* Adjusted PBT for continuing operations has been determined after adding back non-cash moving items such as share-based
payments, amortisation of intangibles arising on acquisition, fair value adjustments to IMeasureU purchase 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 5 and 7.
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OXFORD METRICS PLC ANNUAL REPORT 2019
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 2019.
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 9. Its subsidiary undertakings are shown in note 15. 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 2018/19 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 23 to the financial statements. Details of employee share options are set out in note 24.
Dividends
The directors are proposing a final dividend in respect of the financial year ended 30 September 2019 of 1.80 pence per share
which will absorb an estimated £2,252,000 of shareholders’ funds. This dividend, if approved, will be paid on 28 February 2020
to shareholders on the register of members at close of business on 13 December 2019.
Research and development
During the year, the Group’s continuing operations expensed £4,184,000 (2018: £3,336,000) and discontinued operations
expensed £nil (2018: £69,000) in research costs. In addition, £2,196,000 (2018: £2,125,000) 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 2019 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
Nick Bolton
David Deacon
Catherine Robertson
At the Annual General Meeting of the Company, Roger Parry and Catherine Robertson representing one third of the Board, will
retire and, being eligible, offer themselves for re-election. Naomi Climer, appointed 20 November 2019, will also retire and,
being eligible, offer herself for re-election.
Financial instruments
Information about the Group’s management of financial risk can be found in note 19 of the financial statements.
10
OXFORD METRICS PLC ANNUAL REPORT 2019
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 2019 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.
11
OXFORD METRICS PLC ANNUAL REPORT 2019
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
2 December 2019
12
OXFORD METRICS PLC ANNUAL REPORT 2019
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 prior 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
The Board is responsible for ensuring the Group has effective and sound systems of internal controls, which are designed to
manage, but not eliminate, the risk of failure to achieve business objectives and provide reasonable assurances against
material misstatements and loss. The day to day management and monitoring of the Group’s internal control systems is
delegated to the Chief Financial Officer.
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 8. The Chief Financial Officer ensures that the Group’s risk management framework and culture are embedded
within the business. The executive directors provide assurance to the Board, through the Audit Committee, that risks are
appropriately monitored, escalated and managed within the risk appetite of the Board.
The Company’s risk register is compiled annually, by non-executive director and Audit Committee member, 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. Jonathon Reeve will be retiring from the board at the next
AGM and responsibilities for the risk register will pass to non-executive director and Audit Committee member David Quantrell.
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.
13
OXFORD METRICS PLC ANNUAL REPORT 2019
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 investor relations, strategy, review and approval of
budgets and forecasts, financial performance and reporting, dividends, risk management, major capital expenditure, and
Mergers, Acquisitions and disposals.
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 Board meets formally six times a year. No director has been absent from a Board meeting during the 12 months from 1st
October 2018 to 30th September 2019 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, Chair of Audit Committee and member of Remuneration Committee
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 a Non-executive director of Blacktrace Holdings 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, member of Audit Committee
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, Chair of Remuneration Committee and member of Audit Committee (retired
November 2018)
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.
Naomi Climer – Non-executive Director
On 20 November 2019, we appointed Naomi Climer to replace Jonathon as Chair of the Remuneration Committee. Naomi has
had a successful executive career in broadcast, media and the communications technology sectors with the BBC, ITV Digital
and Sony. Naomi is currently a Non-Executive Board Member at Sony UK Technology Centre, a Non-Executive Director at
Focusrite plc, Chair at the International Broadcasting Convention Council (an advisory body), Trustee and Vice President at the
Royal Academy of Engineering, Co-chair at the Institute for the Future of Work and a Member of the Science and Technology
Awards Committee.
14
OXFORD METRICS PLC ANNUAL REPORT 2019
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.
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 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 68.
A formal evaluation of the performance of the Directors is conducted annually and the Directors are able to seek independent
training and development as required to support their roles.
The Audit Committee works with the company’s auditor BDO LLP. 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 11.
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 reviews conducted during the year concluded that the
Chairman and executive directors continue to contribute effectively to the Board.
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.
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.
15
OXFORD METRICS PLC ANNUAL REPORT 2019
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 at Company
meetings and other means, and employees are expected to exercise high ethical and moral standards at all times in their
dealings with the Company’s stakeholders. The Board monitor and promote this corporate culture by engaging in open
feedback with employees.
The Company has an anti-bribery policy and is committed to the elimination of modern slavery and human trafficking in its
supply chain.
The Board sets clear expectations regarding the Group’s culture, values and behaviours. We believe that it is vital that the
Board and our employees behave in a way that reflects the underlying values of the business.
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 also
available on the website.
This Annual report and Financial Statements is available on the website and hard copies are distributed to all shareholders.
The Board consider that information available in these and previous Annual Report and 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 disclosures of the Audit and Remuneration Committees.
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 Chairman has also had an occasional meeting with shareholders and financial advisors.
The Board does not currently recognise any constraints or circumstances that affect the Company uniquely.
The Remuneration Committee members are Jonathon Reeve (Chair) and Adrian Carey who meet formally on at least two
occasions annually. Naomi Climer will replace Jonathon Reeve as Chair of the Remuneration Committee upon his retirement.
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. Full information on the Remuneration Committee and its policies are
discussed in the Report on Directors’ Remuneration on page 18.
The Audit Committee members are Adrian Carey, Jonathon Reeve and David Quantrell, who meet formally on 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 Committee has a calendar of events agreed each year and
senior managers and the external auditors (BDO LLP) may attend meetings at the request of the Committee.
The key responsibilities of the Audit Committee are:
– monitoring the integrity of the financial statements, including approving any material changes in accounting policy,
reviewing the financial statements, and any market announcements relating to the Group’s financial performance;
–
reviewing the integrity of internal financial controls, risk management systems and codes of corporate conduct and ethics;
– making recommendations to the Board regarding the engagement of external auditors.
16
OXFORD METRICS PLC ANNUAL REPORT 2019
During the year, the topics subject to Committee discussion at formal scheduled Committee meetings included:
•
•
•
•
•
review of the risk register, assessing how each risk identified is being monitored and ensuring the process of how these
risks are being actively managed is in place;
receipt and consideration of reports from the external auditors regarding the scope and findings of their audit of the annual
report;
recommendation of the annual report and half-year report to the Board for approval, together with the management
representation letter and audit fees;
review of audit and non-audit related fees paid to the external auditors and monitoring the independence of the external
auditors; and
review and consideration of accounting treatment policy changes in line with industry practice, as recommended by
external auditors.
To ensure the objectivity and independence of the external auditors, any service provided by the external auditors must be
approved in accordance with the Group’s policy on auditor independence and the provision of non-audit services, which is
consistent with the UK Auditing Practices Board’s Ethical Standards for Auditors.
The external auditor is only selected to provide non-audit services if they are well placed to provide the required service at a
competitive cost and the Committee is satisfied that the assignment will not impair their objectivity. In accordance with relevant
professional standards, the external auditors have confirmed their independence as auditors in a letter to the Directors. Details
of fees paid to the external auditors for both audit and non-audit services are given in note 6 to the financial statements.
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.
17
OXFORD METRICS PLC ANNUAL REPORT 2019
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. The Group’s remuneration policy aims to:
–
–
–
–
–
provide market competitive total compensation;
differentiate on merit and performance;
emphasise variable performance driven remuneration;
align senior management with shareholders’ interests; and
deliver a clear, transparent and fair process.
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
2019
2019
Pension
Total contributions
£’000
£’000
2018
2018
Pension
Total contributions
£’000
£’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)
Directors’ share options
65
37
37
32
-
261
125
195
752
-
-
-
-
-
43
23
59
125
-
-
-
-
-
1
2
1
4
-
-
39
-
-
-
-
-
39
65
37
76
32
-
305
150
255
920
-
-
-
-
-
-
18
-
18
65
34
34
9
17
1,125
155
642
2,081
-
-
-
-
-
-
17
-
17
Interests in share options for directors who served during the year were as follows:
A Carey
C Robertson
N Bolton
D Deacon
At 30 September
2019
Number
At 1 October
2018
Number
Exercise price
Exercise period
31.18p
59.06p
0.00p
0.00p
-
400,000
1,200,000
600,000
2,200,000
77,194 September 2015 to September 2023
September 2019 to July 2027
December 2019 to December 2026
December 2019 to December 2026
400,000
1,200,000
600,000
2,277,194
18
OXFORD METRICS PLC ANNUAL REPORT 2019
The vesting of options 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.
The average share price for the year was 84.21 pence (2018: 69.16 pence) and the closing share price was 89.00 pence (2018:
76.70 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 2019 and at 1 October 2018 according to the register of directors’ interests.
Ordinary shares
of 0.25p
2018
Number
2019
Number
Percentage of issued
share capital
2018
%
2019
%
229,554
36,288
278,059
50,000
1,439,201
2,383,565
1,146,821
194,093
36,288
200,774
-
1,439,201
2,383,565
1,146,821
0.18
0.03
0.22
0.04
1.15
1.90
0.92
0.16
0.03
0.16
1.15
1.91
0.92
R Parry
J Reeve
A Carey
D Quantrell
C Robertson
N Bolton
D Deacon
By order of the Remuneration Committee
Jonathon Reeve
Chairman
19
OXFORD METRICS PLC ANNUAL REPORT 2019
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 2019 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 2019 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.
20
OXFORD METRICS PLC ANNUAL REPORT 2019
We set out below the risks that had the greatest impact on our audit strategy and scope:
Revenue recognition
Key Audit Matter
The Group’s revenue recognition policies are included with
the accounting policies in note 2 on pages 32 and 33 and the
components of revenue are set out in note 4.
The Group’s revenue is a key performance indicator for the
market upon which the results of the Group will be assessed.
The implementation of IFRS 15 ‘Revenue from Contracts with
Customers’ required management to assess their revenue
recognition policies against that standard and make
amendments as necessary.
Management exercises judgement in recognising revenue,
including the extent of the impact on deferral of revenue
relating to ongoing support and maintenance obligations in
Vicon.
There is a risk that revenue, including deferred revenue, could
be calculated incorrectly, or allocated to the wrong period and
therefore we considered revenue recognition to be a key audit
matter.
Response
We reviewed the revenue recognition policies applied to each
of the Group’s revenue streams and considered their
compliance with IFRS 15 ‘Revenue from Contracts with
Customers’. Our work included review and challenge of
management’s identification of performance obligations,
transaction price allocation and assessment of compliance
through examining a sample of contracts.
We tested a sample of revenue transactions for each material
income stream to check that revenue was accurately
recorded within the accounting system in the correct
accounting period. The testing was performed through
agreement to contract and recalculation of revenue
recognition.
We tested deferred revenue by re-performing calculations for
a sample of deferred balances, and checked that the
appropriate revenue deferral for contracts containing multiple
performance obligations was made in accordance with the
accounting standards. Each included review of underlying
contracts and other supporting documentation.
A sample of accrued income balances were agreed to
supporting documentation such as contracts and evidence of
work performed. Where applicable balances were verified to
post year end invoices.
Key observations
Based on the results of our work we consider that revenue
has been recognised in accordance with the Group’s revenue
recognition accounting policy and the requirements of
IFRS 15.
21
OXFORD METRICS PLC ANNUAL REPORT 2019
Development expenditure capitalisation and carrying value
Key Audit Matter
Response
The Group incurs substantial development costs of which
certain amounts are capitalised as intangible assets. The
Group’s policy is included with the accounting policies in note
2 on page 34 and the significant judgements are set out in
note 3.
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.
Management exercises judgement in consideration of the
carrying value 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 the
capitalisation and carrying value of development expenditure
to be a key audit matter.
We reviewed the policies and procedures regarding research
and development expenditure capitalisation of costs, and
considered their compliance with the requirements of the
accounting standards.
For each significant development project, we:
–
–
–
substantively agreed a sample of expenditure to third
party documentation and timecard records to check that
they meet the criteria for capitalisation in accordance
with the accounting standards;
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,
assessed managements estimate of useful economic life
and impairment considerations, with reference to sales
forecasts for each project.
Key Observations
Based on the results of our work we consider the judgements
made by management are reasonable and the accounting is
in accordance with the accounting standards.
22
OXFORD METRICS PLC ANNUAL REPORT 2019
Carrying value of goodwill and other recognised intangibles
Key Audit Matter
Response
The Group’s accounting policy for intangible assets is
included within the accounting policies in note 2 on pages 33
and 34 and the significant judgements are set out in note 3.
The components of intangible assets are set out in note 12.
We reviewed the policies and procedures regarding the
carrying value of goodwill and intangibles and considered
their compliance with the requirements of the accounting
standards.
In accordance with accounting standards, 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).
In view of the judgements involved, we considered that these
matters give rise to a key audit matter.
For each significant CGU, we:
–
–
–
–
critically assessed 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;
used our own valuations specialists to consider the
appropriateness of discount rates used;
reviewed and challenged management assumptions,
including revenue performance and profitability in FY19
against budgeted expectations; and,
re-performed management’s sensitivity analysis
calculations to assess the impact of changes in
assumptions on the forecasts.
Key Observations
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.
Our application of materiality
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements.
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 £320,000 (2018: £295,000). This was determined with
reference to the Group’s profit before tax which is considered the most appropriate measure in assessing performance of the
Group. The materiality used represents approximately 7% (2018: 7%) of profit before tax of the Group. Performance materiality
was set at 75% (2018: 75%) of the Group materiality level, being £240,000 (2018: £221,250)
Where financial information from components was audited separately, component materiality was set for this purpose at lower
levels, varying between £1,500 and £270,000.
The materiality for the Parent Company was set at £115,000 (2018: £115,000). This was determined with reference to the
Parent Company’s loss before tax. Performance materiality was set at 75% (2018: 75%) of Parent Company materiality, being
£86,250 (2018: £86,250).
We agreed with the Audit Committee that we would report to them all individual audit differences in excess of £16,000 (2018:
£14,750). We also agreed to report differences below this threshold that, in our view, warranted reporting on qualitative
grounds.
23
OXFORD METRICS PLC ANNUAL REPORT 2019
An overview of the scope of our audit
The Group has 12 components of which 4 were considered to be individually significant, being Oxford Metrics Plc (the parent
Company), Vicon Motion Systems Limited, Vicon Motions Systems Inc and Yotta Limited. The Group also has 4 non-significant
trading subsidiaries being; Yotta Pty Limited, IMeasureU Limited, IMeasureU Inc, and IMeasureU Ltd; 2 non trading
subsidiaries and 2 dormant companies.
Full scope audits of the parent Company, 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.
Group level procedures were performed by BDO LLP on IMeasureU Ltd and Yotta Pty Limited.
Analytical procedures were performed at Group level by BDO LLP on IMeasureU Inc, IMeasureU Limited, OMG Inc. and the 2
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 attended the close meeting in person, 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 and Financial Statements, 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.
24
OXFORD METRICS PLC ANNUAL REPORT 2019
Responsibilities of Directors
As explained more fully in the Statement of Directors’ Responsibilities set out on page 11, 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.
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).
25
OXFORD METRICS PLC ANNUAL REPORT 2019
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 30 SEPTEMBER 2019
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
Profit/(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 2019
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
Total other comprehensive income
Total comprehensive income for the year attributable to owners of the parent
Note
4
6
9
11
6
10
10
10
10
2019
£’000
35,350
(10,166)
25,184
(8,663)
(4,184)
(7,875)
202
4,664
66
(2)
(59)
4,669
(504)
4,165
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
13
(484)
4,178
3,543
3.33p
3.24p
3.23p
3.12p
3.34p
3.25p
2.84p
2.75p
Group
2019
£’000
4,178
271
271
4,449
Group
2018*
£’000
3,543
173
173
3,716
*The Group has applied IFRS 15 using the cumulative effect method. Under this method the comparative information is not
restated. See note 32.
The notes on pages 31 to 67 are an integral part of these financial statements.
26
OXFORD METRICS PLC ANNUAL REPORT 2019
CONSOLIDATED AND COMPANY STATEMENT OF FINANCIAL
POSITION AS AT 30 SEPTEMBER 2019
COMPANY NUMBER: 03998880
Note
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
Current liabilities
Trade and other payables
Net current assets
Total assets less current liabilities
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
12
14
15
20
16
17
18
21
22
20
23
25
25
25
25
Group
2019
£’000
12,449
2,280
98
405
15,232
3,236
11,687
177
13,837
28,937
(10,733)
(10,733)
18,204
33,436
(462)
(16)
(1,797)
(2,275)
Group
2018
£’000
Company
2019
£’000
Company
2018
£’000
12,361
2,496
157
230
15,244
2,403
10,576
101
12,229
25,309
(8,167)
(8,167)
17,142
32,386
(631)
(8)
(1,777)
(2,416)
-
37
14,635
250
14,922
-
9,155
-
4,700
13,855
(5,921)
(5,921)
7,934
22,856
-
-
-
-
-
29
14,571
143
14,743
-
16,567
-
1,231
17,798
(7,082)
(7,082)
10,716
25,459
-
-
-
-
31,161
29,970
22,856
25,459
313
65
17,417
12,851
515
31,161
312
65
17,327
12,022
244
29,970
313
65
17,417
5,061
-
22,856
312
65
17,327
7,877
(122)
25,459
*The Group has applied IFRS 15 using the cumulative effect method. Under this method the comparative information is not
restated. See note 32.
The profit of the Company for the year ended 30 September 2019 was £51,000 (30 September 2018: profit of £4,029,000).
The Company Statement of Financial Position for 2018 and 2019 has been adjusted for the treatment of the equity accounted
share based compensation scheme, see note 31.
The financial statements on pages 26 to 67 were approved and authorised for issue by the Board of Directors on 2 December
2019 and signed on its behalf by
Nick Bolton
Director
David Deacon
Director
The notes on pages 31 to 67 are an integral part of these financial statements.
27
OXFORD METRICS PLC ANNUAL REPORT 2019
CONSOLIDATED AND COMPANY STATEMENT OF CASHFLOWS
FOR THE YEAR ENDED 30 SEPTEMBER 2019
Group
2019
£’000
Group
2018*
£’000
Company
2019
£’000
Company
2018*
£’000
Note
Cash flows from operating activities
Operating profit/(loss) from continuing operations
Operating profit/(loss) from discontinued operations
Group operating profit/(loss)
Depreciation and amortisation
Loss on the sale of property, plant and equipment
Loss on disposal of subsidiary undertaking
Share-based payments
Exchange adjustments
(Increase)/decrease in inventories
(Increase)/decrease in receivables
Increase/(decrease) in payables
Cash generated from operating activities
4,664
21
4,685
2,761
-
-
264
134
(823)
(949)
1,600
7,672
4,757
(483)
4,274
2,479
3
445
323
89
941
(184)
(1,635)
6,735
200
-
200
12
-
-
141
(105)
-
7,412
(1,159)
6,501
Tax paid
(369)
(727)
-
(720)
-
(720)
21
-
896
145
(43)
-
(953)
(109)
(763)
-
Net cash from operating activities
7,303
6,008
6,501
(763)
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 paid
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
(467)
(2,196)
79
23
(2)
43
-
(141)
(1,243)
(2,125)
154
73
-
(172)
1,295
(76)
(2,661)
(2,094)
(29)
-
9
22
-
-
-
-
2
(14)
-
-
8
-
-
772
-
766
91
(3,125)
29
(1,499)
91
(3,125)
29
(1,499)
11
29
Net cash used in financing activities
(3,034)
(1,470)
(3,034)
(1,470)
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of the period
1,608
12,229
2,444
9,785
3,469
(1,467)
1,231
2,698
Cash and cash equivalents at end of the period
13,837
12,229
4,700
1,231
*The Group has applied IFRS 15 using the cumulative effect method.Under this method the comparative information is not
restated. See note 32.
The notes on pages 31 to 67 are an integral part of these financial statements.
28
OXFORD METRICS PLC ANNUAL REPORT 2019
CONSOLIDATED AND COMPANY STATEMENT OF CHANGES IN
EQUITY FOR THE YEAR ENDED 30 SEPTEMBER 2019
Group
Balance as at 1 October 2017*
Net profit for the year
Exchange differences on retranslation
of overseas subsidiaries
Transactions with owners:
Tax recognised directly in equity in relation to
employee share option schemes
Dividends
Issue of share capital
Share based payment charge
Balance as at 30 September 2018 as
previously stated
Impact of change in accounting policy-
IFRS 15 Revenue from contracts with
customers (see note 32)
Balance as at 1 October 2018 as restated
Net profit for the year
Exchange differences on retranslation of
overseas subsidiaries
Transactions with owners:
Tax recognised directly in equity in relation
to employee share option schemes
Dividends
Issue of share capital
Share based payment charge
Share
capital
£’000
308
-
Shares
to be
issued
£’000
65
-
Share
premium
account
£’000
17,302
-
Foreign
currency
Retained translation
reserve
earnings
£’000
£’000
9,549
3,543
71
-
Total
£’000
27,295
3,543
-
-
-
4
-
-
-
-
-
-
-
-
-
25
-
-
173
173
106
(1,499)
-
323
-
-
-
-
106
(1,499)
29
323
312
65
17,327
12,022
244
29,970
-
312
-
-
-
-
1
-
-
65
-
-
-
-
-
-
-
(664)
-
(664)
17,327
-
11,358
4,178
244
-
29,306
4,178
-
-
-
90
-
-
271
271
176
(3,125)
-
264
12,851
-
-
-
-
176
(3,125)
91
264
515
31,161
Balance as at 30 September 2019
313
65
17,417
*The Group has applied IFRS 15 using the cumulative effect method. Under this method the comparative information is not
restated. See note 32.
The notes on pages 31 to 67 are an integral part of these financial statements.
29
OXFORD METRICS PLC ANNUAL REPORT 2019
CONSOLIDATED AND COMPANY STATEMENT OF CHANGES IN
EQUITY FOR THE YEAR ENDED 30 SEPTEMBER 2019
Share
premium
account
£’000
17,302
Foreign
currency
Retained translation
reserve
earnings
£’000
£’000
Total
£’000
4,688
(81)
22,282
-
241
-
241
4,929
4,029
(81)
22,523
-
4,029
-
(41)
(41)
95
(1,499)
-
145
178
7,877
51
(122)
116
(3,125)
-
264
5,061
-
-
-
-
-
95
(1,499)
29
145
178
(122)
25,459
-
122
51
-
-
-
-
-
-
116
(3,125)
91
264
22,856
Company
Balance as at 1 October 2017
Share based payment prior year
adjustment (see note 31)
Balance as at 1 October 2017 as restated
Net profit for the year
Exchange differences on retranslation of
overseas subsidiaries
Transactions with owners:
Tax recognised directly in equity in relation
to employee share options
Dividends
Issue of share capital
Share based payment charge
Share based payment prior year
adjustment (note 31)
Balance as at 30 September 2018
as restated
Net profit for the year
Transfer between reserves
Transactions with owners:
Tax recognised directly in equity in relation
to employee share options
Dividends
Issue of share capital
Share based payment charge
Share
capital
£’000
308
-
308
-
-
-
-
4
-
-
Shares
to be
issued
£’000
65
-
65
-
-
-
-
-
-
-
17,302
-
-
-
-
25
-
-
312
65
17,327
-
-
-
-
1
-
-
-
-
-
-
-
-
-
-
-
90
-
Balance as at 30 September 2019
313
65
17,417
The notes on pages 31 to 67 are an integral part of these financial statements.
30
OXFORD METRICS PLC ANNUAL REPORT 2019
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2019
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 is a public limited company and is incorporated in England. The address of its registered office can be found on
page 68.
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 standards, amendments to standards and interpretations have been adopted during the period:
•
•
•
IFRS 9 ‘Financial instruments’
IFRS 15 ‘Revenue from contracts with customers’
Amendments to IFRS 15 ‘Revenue from contracts with customers’
At the date of authorisation of these financial statements the following 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 16 ‘Leases’
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 16 ‘Leases’ is relevant to the Group.
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 28 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 £2,151,000. There is no impact on the Company. The directors do not consider
the application of IFRS 16, once effective, to have a material impact on the consolidated income statement. The Group will
adopt the modified retrospective approach to the application of IFRS 16 which does not require the restatement of
comparative periods. The right-of-use asset recognised will be equal to the lease liability which is calculated as the present
value of remaining lease payments at the date of transition. Under the modified retrospective approach the Group will be taking
the following practical expedients:
•
•
•
not recognising leases whose term ends within 12 months of the date of initial application of IFRS 16;
excluding initial direct costs from the measurement of the right-of-use asset at the date of initial application;
the use of hindsight, such as in determining the lease term for leases that contain options.
Adoption of all other standards and interpretations not yet effective are not expected to have a material impact on the results
of the Company.
31
OXFORD METRICS PLC ANNUAL REPORT 2019
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2019
Audit Exemption
IMeasureU Limited, a 100% owned subsidiary undertaking incorporate in England, has claimed the audit exemption under
Companies Act 2006 Section 479A with respect to the year ended 30 September 2019. The parent Company, Oxford Metrics
plc, has given a statement of guarantee under Companies Act 2006 Section 479C, whereby Oxford Metrics plc will guarantee
outstanding liabilities to which IMeasureU Limited are subject as at 30 September 2019.
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 2019.
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 (formerly
OMG 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. Revenue has been recognised in the year ended 30 September 2019 by
applying IFRS 15, the policies adopted are set out below:
Performance obligations and timing of revenue recognition
The majority of the Group’s revenue is derived from selling goods with revenue recognised at a point in time when control of
the goods has transferred to the customer. This is generally when the goods are delivered to the customer.
Some of the Group’s software and service revenue streams are typically recognised on an over time basis, with the revenue
earned recognised on a straight-line basis over the term of the contract. A deferral is made for the proportion of revenue
allocated to the undelivered element of the performance obligation based upon the standalone selling price of the individual
performance obligation under the terms of the sale.
Within Vicon a 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 revenue from the sale of software is recognised over the term of the contract on a straight line basis until all
performance obligations are fulfilled.
Determining the transaction price and allocating amounts to performance obligations
The Group’s revenue is derived from fixed price contracts and therefore the amount of revenue attributable to each contract is
determined by reference to those fixed prices.
32
OXFORD METRICS PLC ANNUAL REPORT 2019
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2019
Within Vicon, system sales are multi element arrangements and include the sale of software, hardware and ongoing support.
Under IFRS 15 the support element of the system sale has been identified as a separate performance obligation because
support services are sold on a standalone basis and the system can operate without them. Revenue is recognised over time as
this obligation is fulfilled. Where discounts are given these are allocated on a proportionate basis to the hardware and software
elements of the system sale. The revenue attributable to the support element of the system sale is calculated by reference to
the equivalent standalone selling price of the support had it not been included within a system sale, less any attributable
discount.
Where revenue is recognised over time any deferred income balances are included in trade and other payable on the
Statement of Financial Position. Any accrued income balances are included within trade and other receivables. Revenue from
the sale of goods relates to the sale of items held within inventory. For service and support contracts revenue is recognised
over time by reference to the term of the contract until all performance obligations are fulfilled and consequently no asset for
work in progress is recognised.
The comparatives for the year ended 30 September 2018 applied IAS 18 with the policy below being followed:
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 standalone 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.
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.
The Group no longer has this revenue stream in the year ended 30 September 2019.
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.
33
OXFORD METRICS PLC ANNUAL REPORT 2019
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2019
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 2-10 years
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 – 10 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.
34
OXFORD METRICS PLC ANNUAL REPORT 2019
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2019
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.
Discontinued operations
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.
35
OXFORD METRICS PLC ANNUAL REPORT 2019
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2019
Financial assets
The Group and Company classifies its financial assets into the categories below.
Amortised cost: These assets arise principally from the provision of goods and services to customers (e.g. trade receivables
and accrued income). They are initially recognised at fair value plus transaction costs that are directly attributable to their
acquisition or issue and are subsequently carried at amortised cost using the effective interest rate method, less provision for
impairment.
Impairment provisions for current and non-current trade receivables are recognised based on the simplified approach within
IFRS 9 using a provision matrix in the determination of the lifetime expected credit losses. During this process the probability
of the non-payment of the trade receivables is assessed. This probability is then multiplied by the amount of the expected
credit loss arising from default to determine the lifetime expected credit loss for the trade receivables. For trade receivables,
which are reported net, such provisions are recorded in a separate provision account with the loss being recognised within
administrative expenses in the consolidated 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.
Impairment provisions for receivables from related parties and loans to related parties are recognised based on a forward
looking expected credit loss model. The methodology used to determine the amount of the provision is based on whether
there has been a significant increase in credit risk since the initial recognition of the financial asset. For those where the credit
risk has not increased significantly since initial recognition of the financial asset, twelve month expected credit losses along
with gross interest income are recognised. For those for which credit risk has significantly increased, lifetime expected credit
losses along with the gross interest income are recognised. For those that are determined to be credit impaired, lifetime
expected credit losses are recognised along with interest income on a net basis.
The Group’s financial assets measured at amortised cost comprise trade and other receivables and cash and cash equivalents
in the balance sheet.
Fair value through profit or loss: This category includes an equity investment which is held in the Consolidated Statement of
Financial Position at fair value with changes in the fair value being recognised in the Consolidated Income Statement.
Financial liabilities
The Group and Company classifies its financial liabilities into the categories below.
Amortised cost: Financial liabilities include trade payables and other short-term monetary liabilities. Trade payables and other
short-term monetary liabilities are recognised at fair value and subsequently held at amortised cost.
Fair value through profit or loss: This category includes contingent consideration payable which is held in the Consolidated
Statement of Financial Position at fair value with changes in the fair value being recognised in the Consolidated Income
Statement.
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.
36
OXFORD METRICS PLC ANNUAL REPORT 2019
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2019
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.
Taxation recognised directly in equity is in relation to tax on the employee share option charge for the year recognised in the
income statement.
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.
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.
37
OXFORD METRICS PLC ANNUAL REPORT 2019
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2019
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. 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. If the remaining useful economic life of each
project decreased by 50% at 1 October 2018 the amortisation charge for the year would have increased by £1,481,000.
More detail including carrying values is included in note 12.
(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.
4. Revenue from contracts with customers
Vicon UK
Vicon USA
Vicon Group
Yotta
Continuing operations
Yotta Surveying (note 11)
Discontinued operations
Oxford Metrics Group
38
Revenue
2019
£’000
14,638
13,692
28,330
7,020
35,350
-
-
2018
£’000
13,964
10,418
24,382
7,274
31,656
1,693
1,693
35,350
33,349
OXFORD METRICS PLC ANNUAL REPORT 2019
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2019
Timing of the transfer of goods and services
Point in time
Over time
Oxford Metrics Group
Contract Counterparties
Direct to consumers
Third party distributor
Oxford Metrics Group
By destination
UK
Germany
Italy
Netherlands
France
Switzerland
Rest of Europe
Canada
USA
Rest of North America
Australia
Hong Kong
Japan
South Korea
Rest of Asia Pacific
Other
Oxford Metrics Group
2019
Vicon UK Vicon USA
£’000
£’000
13,507
1,131
14,638
4,170
10,468
14,638
1,662
969
327
585
535
285
858
-
646
-
327
2,788
3,570
1,464
565
57
14,638
11,802
1,890
13,692
12,638
1,054
13,692
-
-
-
-
-
-
-
905
12,099
110
-
-
-
-
-
578
13,692
Yotta
£’000
1,741
5,279
7,020
6,811
209
7,020
6,577
24
-
142
-
-
4
-
-
-
218
-
-
-
-
55
7,020
Total
£’000
27,050
8,300
35,350
23,619
11,731
35,350
8,239
993
327
727
535
285
862
905
12,745
110
545
2,788
3,570
1,464
565
690
35,350
39
OXFORD METRICS PLC ANNUAL REPORT 2019
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2019
Vicon revenue by market
Engineering
Entertainment
Life sciences
Established markets
Adjacent verticals
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
2019
£’000
6,015
6,802
13,637
26,454
1,876
28,330
23,710
7,023
4,618
35,350
-
-
-
2018
£’000
4,367
6,322
12,860
23,549
833
24,382
21,687
4,289
5,680
31,656
12
1,681
1,693
35,350
33,349
7,020
7,020
-
-
7,274
7,274
1,693
1,693
7,020
8,967
*This additional information is provided to the Chief Operating Decision Maker. Further analysis by market is not available.
40
OXFORD METRICS PLC ANNUAL REPORT 2019
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2019
By destination
UK
Germany
Italy
Netherlands
France
Switzerland
Rest of Europe
Canada
USA
Rest of North America
Australia
Hong Kong
Japan
South Korea
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
Revenue
2019
£’000
8,239
993
327
727
535
285
862
905
12,745
110
545
2,788
3,570
1,464
565
690
35,350
-
-
2018
£’000
9,978
1,078
159
662
348
409
1,797
420
9,357
123
685
1,766
3,257
305
634
678
31,656
1,693
1,693
35,350
33,349
21,268
13,692
390
35,350
-
-
35,350
20,849
10,419
388
31,656
1,693
1,693
33,349
41
OXFORD METRICS PLC ANNUAL REPORT 2019
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2019
Contract balances
2019
Contract assets
£’000
Contract liabilities
£’000
At 1 October 2018
Cumulative catch up adjustments
Transfers from contract assets to trade receivables
Amounts included in contract liabilities recognised as revenue during the period
Excess of revenue recognised over cash during the period
Cash received in advance of performance and not recognised as revenue during
the period
Foreign exchange differences
At 30 September 2019
666
-
(3,944)
-
4,065
-
-
787
3,848
872
-
(8,486)
-
9,173
(37)
5,370
Contract assets and contract liabilities are included within trade and other assets and trade and other payables respectively on
the face of the statement of financial position. They arise primarily from the Group’s software and support contracts which are
delivered over time and where the cumulative payments received from customers at each balance sheet date do not
necessarily equal the amount of revenue recognised on the contract.
Remaining performance obligations
The majority of the Group’s contracts are for the delivery of goods and services within the next 12 months for which the
practical expedient in paragraph 121(a) of IFRS 15 applies. However, some software and support contracts are for a period
greater than 12 months and the amount of revenue that will be recognised in future periods on these contracts is as follows:
At 30 September 2019 2020 2021
£’000 £’000
Support contracts 2,410 753
Software contracts 752 681
3,162 1,434
2022
£’000
430
492
922
2023
£’000
285
133
418
2024
£’000
250
10
260
2025
£’000
257
-
257
5.
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 prior year) for the Government Agencies, Local Government and major
infrastructure contractors. Yotta surveying was sold 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
2019 are £7,630,000 (2018: £4,414,000).
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.
42
OXFORD METRICS PLC ANNUAL REPORT 2019
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2019
Adjusted
2019
profit/(loss) Adjusting
before tax
£’000
Group Profit/(loss)
items recharges before tax
£’000
£’000
£’000
2,354
5,760
8,114
(230)
(2,421)
(125)
-
(125)
(469)
(200)
3,248
(4,976)
(1,728)
5,477
784
6,261
(808)
2,536
(1,507)
(85)
Adjusted
profit/(loss)
before tax
£’000
2,916
4,372
7,288
437
(2,556)
5,463
(794)
21
-
-
21
-
-
-
-
5,484
(794)
-
-
-
-
-
-
4,669
5,169
21
-
-
21
51
(89)
-
(38)
4,690
5,131
(1,031)
2018
Adjusting
items
£’000
Group
recharges
£’000
Profit/(loss)
before tax
£’000
105
-
105
(472)
(219)
(586)
-
(445)
-
(445)
1,309
(3,195)
(1,886)
(993)
2,879
-
-
-
-
-
-
4,330
1,177
5,507
(1,028)
104
4,583
51
(534)
-
(483)
4,100
Vicon UK
Vicon USA
Vicon Group
Yotta
Unallocated
Continuing
operations
OMG Life Group
Yotta Surveying
Unallocated
Discontinued
operations
Oxford
Metrics Group
Adjusted profit before tax is detailed in note 7.
Vicon UK
Vicon USA
Vicon Group
Yotta
Unallocated
Continuing operations
Yotta Surveying
Discontinued operations
Oxford Metrics Group
Segment depreciation and amortisation
2018
£’000
2019
£’000
1,898
64
1,962
788
13
2,763
-
-
2,763
1,525
57
1,582
775
21
2,378
101
101
2,479
43
OXFORD METRICS PLC ANNUAL REPORT 2019
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2019
Non-current assets
2018
£’000
2019
£’000
Additions to
non-current assets
2018
£’000
2019
£’000
Carrying amount of
segment assets
2018
£’000
2019
£’000
8,642
838
9,480
8,899
797
9,696
1,667
55
1,722
2,006
164
2,170
22,687
8,824
31,511
22,522
5,995
28,517
Carrying amount of
segment liabilities
2019
2018
£’000
£’000
(5,781)
(2,973)
(8,754)
(4,485)
(1,698)
(6,183)
Vicon UK
Vicon USA
Vicon Group
Yotta Group
5,366
5,212
912
1,177
13,069
16,093
(3,852)
(3,910)
Unallocated
OMG Life Group*
386
-
328
8
29
-
14
-
Oxford Metrics Group
15,232
15,244
2,663
3,361
5,641
(6,052)
44,169
1,987
(6,044)
40,553
(402)
-
(490)
-
(13,008)
(10,583)
* The negative balance within segment assets represents a cash overdraft which is part of the Group’s cash offset facility.
6.
Profit for the year
The profit for the year is stated after charging/(crediting):
Loss on disposal of property, plant and equipment
Depreciation of property, plant and equipment – owned (note 14)
Amortisation of customer relationships (note 12)
Amortisation of intellectual property (note 12)
Amortisation of development costs (note 12)
Share based payments – equity settled (note 24)
Operating lease charges – land and buildings
Foreign exchange loss
Grant income receivable
2019
£'000
-
621
314
245
1,581
264
607
98
(202)
2018
£'000
3
570
314
350
1,245
323
567
213
(173)
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
Fees payable to associates of the Company’s auditor for other services
Audit services include £13,000 in respect of the Company (2018: £13,000).
2019
£'000
2018
£'000
37
42
24
18
121
37
37
27
17
118
44
OXFORD METRICS PLC ANNUAL REPORT 2019
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2019
7. 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
Adjustment to fair value of contingent consideration payable and unwinding of discount factor
Share of post-tax loss of equity accounted associate
Adjusted profit before tax – continuing operations
Profit/(loss) before tax – discontinued operations
Loss on disposal of subsidiary undertaking
Adjusted profit/(loss) before tax – discontinued operations
2019
£'000
4,669
264
541
125
(195)
59
5,463
21
-
21
2018
£'000
4,583
323
645
-
(457)
75
5,169
(483)
445
(38)
Total adjusted profit before tax – all operations
5,484
5,131
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
Adjustment to fair value of contingent consideration payable and unwinding of discount factor
Reapportion Group overheads
Adjusted profit before tax
Loss before tax – continuing operations
Share based payments – equity settled
Amortisation of intangibles arising on acquisition
Redundancy costs
Reapportion Group overheads
Adjusted (loss)/profit before tax – continuing operations
45
Vicon Group
2019
£'000
6,261
78
242
(195)
1,728
8,114
2018
£'000
5,507
110
242
(457)
1,886
7,288
Yotta Group
2019
£'000
(1,507)
45
299
125
808
(230)
2018
£'000
(1,028)
69
403
-
993
437
OXFORD METRICS PLC ANNUAL REPORT 2019
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2019
8. 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
2019
£'000
13,474
264
1,306
610
15,654
Group
2018
£'000
13,135
323
1,302
609
15,369
Company
2019
£'000
Company
2018
£'000
1,364
141
174
55
1,734
1,353
145
248
56
1,802
2019
Number
2018
Number
65
70
49
26
210
59
69
80
26
234
The average number of employees of the Company during the year was 10 (2018:10) 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
2019
£'000
877
124
131
18
4
2018
£'000
965
124
283
17
6
1,154
1,395
The number of directors accruing benefits under Group pension schemes was 1 (2018: 1).
Exercise of directors’ share options
During the year one director (2018: two 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 18.
46
OXFORD METRICS PLC ANNUAL REPORT 2019
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2019
9.
Taxation
The tax is based on the profit for the year and represents:
United Kingdom corporation tax at 19.0% (2018: 19.0%)
Overseas taxation
Adjustments in respect of prior year
Current taxation
Deferred taxation (note 20)
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 11)
2019
£'000
2018
£'000
324
222
1
547
(35)
512
2019
£'000
504
8
512
2019
£'000
512
-
512
164
230
(25)
369
188
557
2018
£'000
556
4
560
2018
£'000
560
(3)
557
At 30 September 2019, the Group had an undiscounted deferred tax asset of £405,000 (2018: £230,000). 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
(2018: 17% and 25%, respectively) and are detailed in note 20.
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.
The tax assessed for the year is lower than the standard rate of corporation tax in the UK of 19.0% (2018: lower than the
standard rate of 19%).
47
OXFORD METRICS PLC ANNUAL REPORT 2019
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2019
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% (2018: 19.0%)
Effect of:
Expenses not deductible for tax purposes
Tax gain on sale of discontinued operation in excess of book gain
Unrelieved current year losses
Utilisation of losses brought forward
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
Research and development tax credit
Effect of rate change
Total tax expense
10. Earnings/(loss) per share
2019
£'000
4,690
891
43
-
126
(4)
1
-
33
(525)
(53)
512
2018
£'000
4,100
779
(46)
48
179
-
(25)
(19)
93
(487)
35
557
2019
–––––––––––––––––––––––––––––––––––
Weighted
average
number of
shares
‘000
Earnings/
(loss)
£’000
Per share
amount
(pence)
2018
–––––––––––––––––––––––––––––––––––
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
4,165
-
4,165
125,038
3,250
128,288
13
-
13
125,038
3,250
128,288
4,178
-
4,178
125,038
3,250
128,288
3.33
(0.09)
3.24
0.01
-
0.01
3.34
(0.09)
3.25
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
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.
48
OXFORD METRICS PLC ANNUAL REPORT 2019
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2019
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.
11. Discontinued operations
During the year ended 30 September 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. Since disposal Yotta Surveying
Limited has changed its name to Ginger Lehman Limited.
Result of Yotta Surveying Group
Revenue
Expenses other than finance costs
Loss from selling discontinued operation after tax
Loss for the year
2019
£'000
-
-
-
-
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.
Result of OMG Life Group
Expenses other than finance costs
Tax expense
Loss for the year
2019
£'000
21
(8)
13
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
2019
£'000
-
-
The result in the prior period for House of Moves is as a result of differences in foreign exchange rates on the deferred
consideration received.
Result of all discontinued operations
Revenue
Income/(expenses) other than finance costs
Tax expense
(Loss)/gain from selling discontinued operation after tax
Loss for the year
49
2019
£'000
-
21
(8)
-
13
2018
£'000
51
(4)
47
2018
£'000
3
3
2018
£'000
1,693
(1,731)
(4)
(442)
(484)
OXFORD METRICS PLC ANNUAL REPORT 2019
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2019
The statement of cash flows includes the following amounts relating to discontinued operations:
Operating activities
Proceeds on disposal of discontinued operations net of cash disposed of
Other investing activities
Net cash flow from discontinued operations
12. Goodwill and intangible fixed assets
2019
£'000
-
-
-
-
Group
Cost
At 1 October 2018
Additions
Translation difference
At 30 September 2019
Amortisation
At 1 October 2018
Charge for the year
Translation difference
At 30 September 2019
Net book value at 30 September 2019
Net book value at 30 September 2018
All development costs are internally generated.
Group
Cost
At 1 October 2017
Additions
Translation difference
At 30 September 2018
Amortisation
At 1 October 2017
Charge for the year
At 30 September 2018
Net book value at 30 September 2018
Net book value at 30 September 2017
Customer
relationships
£’000
Intellectual Development
property
£’000
costs
£’000
Goodwill
£’000
2,456
-
(1)
2,455
1,580
314
(1)
1,893
562
876
3,234
-
-
3,234
1,095
245
-
1,340
1,894
2,139
16,623
2,196
-
18,819
10,900
1,581
-
12,481
6,338
5,723
3,623
-
32
3,655
-
-
-
-
3,655
3,623
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
None of the goodwill included in the tables above has been internally generated.
Current estimates of the remaining useful economic lives of the intangible assets are as follows:
Customer relationships
Intellectual property
Development costs
Goodwill
1-2 years
7-8 years
1-10 years
Indefinite
50
2018
£'000
(784)
1,295
(5)
506
Total
£’000
25,936
2,196
31
28,163
13,575
2,140
(1)
15,714
12,449
12,361
Total
£’000
23,803
2,125
8
25,936
11,734
1,841
13,575
12,361
12,069
OXFORD METRICS PLC ANNUAL REPORT 2019
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2019
13. Goodwill and impairment
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
2018
£'000
2019
£'000
565
1,076
2,014
3,655
533
1,076
2,014
3,623
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 2020 and 30 September 2021.
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 £13.5m (2018: £7.1m); and
Yotta (previously known as Mayrise) exceeds its carrying amount by £18.1m (2018: £23.8m).
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
2019
%
12.2
45.2
1.0
Peak
2018
%
12.2
38.5
1.0
IMU
2019
%
12.4
34.4
11.2
IMU
2018
%
12.4
27.8
11.2
Yotta
2019
%
12.2
6.5
4.0
Yotta
2018
%
12.2
17.8
4.0
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.
51
OXFORD METRICS PLC ANNUAL REPORT 2019
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2019
14. Property, plant and equipment
Group
Cost
At 1 October 2018
Additions
Disposals
Translation differences
At 30 September 2019
Depreciation
At 1 October 2018
Charge for the year
Disposals
Translation differences
At 30 September 2019
Net book value at 30 September 2019
Net book value at 30 September 2018
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
Total
£'000
5,113
467
(421)
24
5,183
2,617
621
(342)
7
2,903
2,280
2,496
Total
£'000
4,458
1,237
(589)
7
5,113
2,510
537
(432)
2
2,617
2,496
1,948
Computers
and
equipment
£'000
Furniture
and Demonstration
equipment
£'000
fixtures
£'000
Leasehold
improvements
£'000
2,251
231
(4)
11
2,489
1,708
308
(2)
5
2,019
470
543
419
5
-
1
425
170
92
-
-
262
163
249
606
210
(85)
11
742
75
41
(8)
2
110
632
531
1,837
21
(332)
1
1,527
664
180
(332)
-
512
1,015
1,173
Computers
and
equipment
£'000
Furniture
and Demonstration
equipment
£'000
fixtures
£'000
Leasehold
improvements
£'000
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
2,066
397
(214)
2
2,251
1,658
257
(208)
1
1,708
543
408
52
OXFORD METRICS PLC ANNUAL REPORT 2019
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2019
Company
Cost
At 1 October 2018
Additions
Transfer to subsidiary undertaking
Disposals
At 30 September 2019
Depreciation
At 1 October 2018
Charge for the year
Disposals
At 30 September 2019
Net book value at 30 September 2019
Net book value at 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
15.
Investments
Shares in subsidiary undertakings – cost
At 1 October as previously stated
Share based payment prior year adjustment (note 31)
At 1 October as restated
Share based payment prior year adjustment (note 31)
Capital contribution
At 30 September
Investment in associate – equity accounted
At 1 October
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
53
Computers
and
equipment
£’000
196
29
(7)
(4)
214
167
12
(2)
177
37
29
Computers
and
equipment
£’000
278
14
(96)
196
242
21
(96)
167
29
36
Furniture
and
Leasehold
fixtures improvements
£’000
£’000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Furniture
and
Leasehold
fixtures improvements
£’000
£’000
203
-
(203)
-
202
-
(202)
-
-
1
8
-
(8)
–
8
-
(8)
-
-
-
Total
£’000
196
29
(7)
(4)
214
167
12
(2)
177
37
29
Total
£’000
489
14
(307)
196
452
21
(306)
167
29
37
Group
2019
£’000
Group
2018
£’000
Company
2019
£’000
Company
2018
£’000
-
-
-
-
-
-
88
(59)
29
69
98
-
-
-
-
-
-
163
(75)
88
69
157
13,995
419
14,414
-
123
14,537
88
(59)
29
69
13,995
241
14,236
178
-
14,414
163
(75)
88
69
14,635
14,571
OXFORD METRICS PLC ANNUAL REPORT 2019
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2019
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
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 Limited*
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
USA
USA
IMeasureU Limited*
Sale of computer software and equipment
England
Oxford Metrics Limited
Non trading company
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
6 Oxford Industrial Park,
Yarnton, Oxfordshire,
OX5 1QU
6th floor South Bank
House, Barrow street,
Dublin 4
*Investment held indirectly.
IMeasureU Limited, incorporated in England, is exempt from the requirements of the Companies Act relating to the audit of
individual accounts by virtue of Section 479A.
Equity 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). This investment is stated at fair value through profit or loss,
which is not materially different to cost. There were no movements in fair value during the year ended 30 September 2019 or
2018.
Investment in Associate
During the year ended 30 September 2017 the Company acquired a 25% shareholding in Pimloc Limited, an equity accounted
associate.
54
OXFORD METRICS PLC ANNUAL REPORT 2019
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2019
16.
Inventories
Finished goods
Component parts
Group
2019
£’000
1,828
1,408
3,236
Group
2018
£’000
462
1,941
2,403
Company
2019
£’000
Company
2018
£’000
-
-
-
-
-
-
The cost of inventories recognised as an expense and included in cost of sales is £7,298,000 (2018: £6,473,000).
During the year £53,000 of inventories were impaired (2018: £nil). £58,000 of inventories were written off (2018: £37,000) and
included within cost of sales.
17. 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
Group
2019
£’000
9,614
-
9,614
-
306
1,767
Group
2018
£’000
8,691
-
8,691
-
215
1,670
11,687
10,576
Company
2019
£’000
Company
2018
£’000
-
-
-
8,956
9
190
9,155
-
-
-
16,355
23
189
16,567
Amounts owed by other Group undertakings are repayable on demand and do not carry interest (see note 30).
The Group applies the IFRS 9 simplified approach to measuring expected credit losses using a lifetime expected credit loss
provision for trade receivables and contract assets. To measure expected credit losses on a collective basis, trade receivables
and contract assets are grouped based on similar credit risk and ageing. The contract assets have similar risk characteristics
to the trade receivables for similar types of contracts.
The expected loss rates are based on the Group’s historical credit losses experienced over the three year period prior to the
period end. The historical loss rates are then adjusted for current and forward looking information on macroeconomic factors
affecting the Group’s customers.
The expected loss rates are based on the Group’s historical credit losses experienced over the three year period prior to 30
September 2019. The ageing categories used for the provision matrix are: current, up to 30 days past due, 31 to 60 days past
due, 61 to 90 days past due, and more than 90 days past due. The historical loss rates are then adjusted for current and
forward looking information on macroeconomic factors affecting the Group’s customers. At 30 September 2019 the lifetime
expected credit loss for trade receivables and contract assets was immaterial to the Group.
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
2019
£’000
6,582
245
4,705
35
120
Group
2018
£’000
7,360
88
2,922
74
132
11,687
10,576
Company
2019
£’000
Company
2018
£’000
9,074
-
-
81
-
9,155
16 ,567
-
-
-
-
16,567
55
OXFORD METRICS PLC ANNUAL REPORT 2019
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2019
Movements in the provision for impairment of trade receivables are as follows:
At 1 October
Credited during the year
At 30 September
Group
2019
£’000
-
-
-
Group
2018
£’000
237
(237)
-
Company
2019
£’000
Company
2018
£’000
-
-
-
-
-
-
The movement on the provision for impairment of trade receivables in the prior year 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.
18. Trade and other payables
Trade payables
Amounts payable to Group undertakings
Social security and other taxes
Other creditors
Contingent consideration payable
Corporation tax
Accruals
Deferred income
Group
2019
£’000
2,935
-
277
310
128
-
2,175
4,908
10,733
Group
2018
£’000
1,643
-
293
271
163
2
2,279
3,516
8,167
Company
2019
£’000
Company
2018
£’000
41
5,522
-
-
-
-
358
-
5,921
57
6,594
-
-
-
-
431
-
7,082
The contingent consideration payable relates to the acquisition of IMeasureU Limited.
Amounts payable to Group undertakings are payable on demand and do not carry interest.
19. 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.
56
OXFORD METRICS PLC ANNUAL REPORT 2019
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2019
The rate of interest earned during the year on cash deposits was 0.24% (2018: 0.11%).
–––––––––––––––––––––––––––––––––––––––––––––––
Total
£’000
GBP Euro
£’000 £’000
AUS$
£’000
US$
£’000
NZ$
£’000
2019
2018
–––––––––––––––––––––––––––––––––––––––––––––
AUS$
Total
£’000 £’000
US$
£’000
Euro
£’000
NZ$
£’000
GBP
£’000
Group cash at bank
and in hand 9,533
319
3,829
109
47 13,837
9,414
101
2,656
30
28 12,229
2019
–––––––––––––––––––––––––––––––––––––
Total
£’000
Euro
£’000
US$
£’000
GBP
£’000
2018
–––––––––––––––––––––––––––––––––––––
Total
£’000
US$
£’000
GBP
£’000
Euro
£’000
Company cash at bank
and in hand
4,700
-
-
4,700
1,231
-
-
1,231
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 2019 would decrease by £22,000/increase by £71,000 (2018: decrease by £8,000/increase by £57,000).
There would be no impact on other equity reserves.
As disclosed in note 15 the Group has an equity investment of £69,000 (2018: £69,000) denominated in Euros. This is
measured at fair value through profit or loss in the Statement of Financial Position with movements in fair value recognised in
the Consolidated Income Statement.
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.
Risk management
The Group is exposed through its activities to the following financial risks:
Liquidity risk
At 30 September 2019 the Group’s cash and short term deposits amounted to £13,837,000 (2018: £12,229,000). 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 17.
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.
57
OXFORD METRICS PLC ANNUAL REPORT 2019
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2019
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 8.2% (2018: 9.0%). If Sterling had strengthened against the dollar at year end by 10% it would
have increased the Group profit by £213,000 (2018: increased Group profit by £189,000). If Sterling had weakened against the
dollar at year end by 10% it would have decreased the Group profit by £260,000 (2018: decreased Group profit by £235,000).
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
NZ dollar
2019
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
Total
£’000
Sterling
£’000
AUS$
£’000
Euro
£’000
NZ$
£’000
US$
£’000
-
4,084
(1,211)
(2,175)
-
(17)
27
-
-
-
-
-
413
-
-
(1,735)
4,084
(1,228)
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)
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:
•
•
Equity investment (note 15);
Contingent consideration payable (note 18).
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.
58
OXFORD METRICS PLC ANNUAL REPORT 2019
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2019
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 2019. If management’s estimate of the applicable discount rate differed by 1%
the fair value of the deferred consideration would increase/decrease by £nil (2018: £3,000). If the spot rate at 30 September
2019 had increased by 10% the fair value of the deferred consideration payable would have decreased by £12,000 (2018:
£42,000) with a corresponding increase in the profit for the year. If the spot rate at 30 September 2019 had decreased by 10%
the fair value of the deferred consideration payable would have increased by £14,000 (2018: £51,000) 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.
The carrying value of the Group and Company’s financial assets and liabilities is as follows:
Financial assets
Amortised cost
Trade receivables
Other debtors
Accrued income
Cash and cash equivalents
Fair value through profit or loss
Equity investment
At 30 September
Financial liabilities
Amortised cost
Trade payables
Provision
Accruals
Fair value through profit or loss
Contingent consideration payable
At 30 September
Capital management
Group
2019
£’000
9,614
32
850
13,837
8,691
97
714
12,229
69
69
24,402
21,800
Group
2018
£’000
Company
2019
£’000
Company
2018
£’000
-
-
-
4,700
69
4,769
-
-
-
1,231
69
1,300
Group
2019
£’000
2,935
16
2,175
128
5,254
Group
2018
£’000
Company
2019
£’000
Company
2018
£’000
1,643
8
2,279
462
4,392
41
-
358
-
399
57
-
431
-
488
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.
59
OXFORD METRICS PLC ANNUAL REPORT 2019
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2019
20. Deferred tax
Group
Group
Deferred Deferred tax
liability
tax asset
£’000
£’000
Company
Company
Deferred Deferred tax
liability
tax asset
£’000
£’000
At 1 October 2017 377 (1,619) 232
Credited to the income statement (note 9) (94) (94) (20)
Charged directly to equity (53) (4) (69)
Reclassified from held for sale - (60) -
At 30 September 2018 230 (1,777) 143
Charged to the income statement (note 9) 43 (8) 20
Charged directly to equity 132 (12) 87
At 30 September 2019 405 (1,797) 250
-
-
-
-
-
-
-
-
Amounts charged directly to equity relate to movements in deferred tax balances arising on employee share options and
foreign exchange movements.
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
Recognised – liability
Recognition of intangible asset
Capital allowances in excess of depreciation
Group
2019
£’000
10
366
29
405
15
193
22
230
(582)
(1,215)
(1,797)
(648)
(1,129)
(1,777)
Group
2018
£’000
Company
2019
£’000
Company
2018
£’000
4
246
-
250
-
-
-
7
136
-
143
-
-
-
Deferred tax assets and liabilities have been measured on an undiscounted basis at an effective tax rate of 17% and 25% (30
September 2018: 17% and 25%) in the UK and USA, respectively. As at 30 September 2019, the Group has un-provided
deferred tax assets of £787,000 arising on unrelieved trading losses for which recoverability is not certain (2018: £658,000).
The gross amount of these losses is £3,962,000 (2018: £3,498,000).
21. Other liabilities
Deferred income
Contingent consideration payable
Group
2019
£’000
462
-
462
Group
2018
£’000
332
299
631
Company
2019
£’000
Company
2018
£’000
-
-
-
-
-
-
The deferred income above relates to revenue from support contracts which cover a period of more than 12 months from 30
September 2019.
The contingent consideration payable relates to the acquisition of IMeasureU Limited during the year ended 30 September
2017.
60
OXFORD METRICS PLC ANNUAL REPORT 2019
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2019
22. Provisions
At 1 October 2018
Credited to income statement – leasehold dilapidations
At 30 September 2019
Group Company
£’000 £’000
8
8
16
-
-
-
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.
23. Share capital
Allotted, called up and fully paid
125,138,130 shares of 0.25p (2018: 124,905,475 shares of 0.25p)
2019 2018
£’000 £’000
313
312
During the year ended 30 September 2019 197,194 shares (2018: 1,812,750 shares) were issued relating to share options that
were exercised. In addition 35,461 shares were issued to the non-executive chairman, Roger Parry, in satisfaction of salary.
At 30 September 2019 options were outstanding over 5,289,278 ordinary shares of 0.25p each (2018: 5,901,472) including
those held by directors as follows:
Number of shares
over which options granted
1,800,000
50,000
59,278
3,380,000
Exercise price
Exercise period
0.00p
33.12p
35.43p
59.06p
December 2019 to December 2026
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 2019 was 89.00p (2018: 76.70p) and the range during the year was
64.00p to 98.49p (2018: 57.56p to 80.60p). Shares to be issued are detailed in the Statement of Changes in Equity.
24. 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 vest proportionally over time which is typically a
period of 3 years from 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.
61
OXFORD METRICS PLC ANNUAL REPORT 2019
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2019
A reconciliation of option movements over the year to 30 September 2019 is shown below:
Outstanding at 1 October
Exercised
Forfeited
Outstanding at 30 September
Exercisable at 30 September
2019
––––––––––––––––––––––––
Weighted
average
exercise
price
(pence)
Number
‘000
2018
–––––––––––––––––––––––
Weighted
average
exercise
price
(pence)
Number
‘000
5,901
197
415
5,289
1,799
39.74
33.77
59.06
38.45
57.56
7,714
1,813
-
5,901
306
30.46
0.25
-
39.74
33.98
The weighted average share price at the date of exercise for options exercised during the year ended 30 September 2019 was
83.26 pence (2018: 61.50 pence).
Share options outstanding at the year end
Range of
exercise
prices
(pence)
0.00
31.18
33.12
35.43
59.06
2019
2018
–––––––––––––––––––––––––––––––––––– ––––––––––––––––––––––––––––––––––––
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
-
33.12
35.43
59.06
1,800
-
50
59
3,380
7
-
2
5
8
0.00
31.18
33.12
35.43
59.06
1,800
77
50
179
3,795
8
5
3
6
9
The total charge for the year relating to employee share based payment plans was £264,000 (2018: £323,000), all of which
related to equity-settled share based payment transactions.
There were no options granted in the year ended 30 September 2019 or 30 September 2018.
Details of directors’ interests in share options are shown in the Report on Remuneration.
25. Movement in reserves
The movement in reserves are disclosed fully within the Consolidated and Company Statement of Changes in Equity on
pages 29 and 30. 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.
62
OXFORD METRICS PLC ANNUAL REPORT 2019
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2019
26. 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 £504,000 (2018: £499,000).
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 £78,000 (2018:
£76,000).
27. Government grants
During the year £202,000 (2018: £173,000) 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.
28. Commitments under operating leases
At 30 September 2019 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
2018
£’000
2019
£’000
581
1,496
367
2,444
607
1,898
588
3,093
At 30 September 2019 the total future minimum sublease payments expected to be received under non – cancellable
subleases was £89,000 (2018: £134,000).
29. Dividends
Equity – ordinary
Final 2017 paid in 2018 (1.20 pence per share)
Special paid in 2019 (1.00 pence per share)
Final 2018 paid in 2019 (1.50 pence per share)
2019
£’000
-
1,250
1,875
3,125
2018
£’000
1,499
-
-
1,499
The directors are proposing a final dividend in respect of the financial year ended 30 September 2019 of 1.80 pence per share
(2018: 1.50 pence per share) which will absorb an estimated £2,252,000 of shareholders’ funds. This dividend will be paid on
28 February 2020 to shareholders who are on the register of members at close of business on 13 December 2019 subject to
approval at the AGM. These dividends have not been accrued in these financial statements.
63
OXFORD METRICS PLC ANNUAL REPORT 2019
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2019
30. Related party transactions
The key management personnel are deemed to be the directors. During the year short term employee benefits of £898,000
(2018: £989,000) were paid to the directors. In addition share based payments of £124,000 (2018: £124,000) were charged to
the income statement in respect of share options held by the directors. For further information see note 8.
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
IMeasureU Inc.
OMG Inc.
Outstanding balances
2018
£’000
2019
£’000
Transactions in year
2018
£’000
2019
£’000
5,506
(1,924)
-
3,442
-
-
-
8
(3,598)
3,434
9,925
664
-
5,692
(123)
-
74
-
(6,471)
9,761
(4,419)
(2,588)
-
(2,250)
123
-
(74)
8
2,873
(6,327)
3,806
(6)
(615)
2,043
-
-
74
-
(56)
5,246
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 £2,536,000 (2018: £2,879,000). Other transactions
arise from treasury cash management between the Company and its subsidiaries.
In accordance with IFRS 9 all balances are stated at amortised cost. The amount receivable from OMG Life Limited is stated
net of a provision of £2,222,000 (2018: £2,621,000) and the amount receivable from IMeasureU Ltd is stated net of a provision
of £155,000 (2018: £nil). The amount recognised as a credit in the year in respect of provisions against receivables from related
parties was £244,000 (2018: £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 £24,000 (2018: £31,000) to recover costs paid by Oxford Metrics plc on
their behalf. At the year end the balance outstanding was £nil (2018: £7,000). 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
Nick Bolton
David Deacon
Catherine Robertson
2019
£’000
2018
£’000
6
1
5
60
29
36
2
-
2
29
14
17
64
OXFORD METRICS PLC ANNUAL REPORT 2019
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2019
31. Prior year adjustment
The Group operates an equity accounted share based compensation scheme for employees of the Group. As the parent entity
has the obligation to settle, the charge relating to the employees of subsidiary entities should be accounted for in the parent
Company as a capital contribution, and thereby increasing the cost of investment with a corresponding entry to equity. In the
prior years this adjustment has not been made and therefore a prior year adjustment has been made to correct the opening
cost of investment and equity positions.
The incorrect treatment resulted in the cost of investment and equity both being understated by £241,000 and £419,000 at
1 October 2017 and 30 September 2018 respectively.
IFRS requires a 3rd balance sheet to be presented, however this is not considered material to the users of the accounts as only
2 specific line items mentioned above are affected and so this has not been presented.
32. Changes in accounting policies
The Group adopted IFRS 9 and IFRS 15 with the date of initial application being 1 October 2018.
The Group has applied IFRS 15 ‘Revenue from Contracts with Customers’ and IFRS 9 ‘Financial Instruments’ using the
cumulative effect method, i.e. by recognising the cumulative effect of initially applying IFRS 15 and IFRS 9 as an adjustment to
the opening balance of equity at 1 October 2018 and presenting in the Statement of Changes in Equity for the period ended 30
September 2019. Therefore, the comparative information has not been restated and continues to be reported under IAS 18 and
IAS 39. The details of the significant changes and quantitative impact of the changes are set out below.
Impact on Financial Statements
The following extracts summarise the impact on the Group consolidated financial statements of adopting IFRS 15 and IFRS 9
for the year ended 30 September 2019.
Trade and other payables
Total equity shareholders’ funds
30 September
2018 as
originally
presented
£’000
(8,167)
29,970
1 October
2018
IFRS 9 as restated
£’000
£’000
-
-
(8,831)
29,306
IFRS 15
£’000
(664)
(664)
The transitional adjustment recognised on the adoption of IFRS 15 is the net amount of a reduction in revenue of £872,000 and
an associated £208,000 tax credit. For tax purposes the £208,000 credit arises in the current year in respect of a retrospective
revenue adjustment.
Under IAS 18 revenue was 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 was calculated by reference to the anticipated cost, plus a margin, of providing the support service.
Revenue that was not recognised in the income statement under this policy was classified as deferred income in the statement
of financial position.
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 are not materially affected
by the application of IFRS 15, there is 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. Under IFRS 15 the
support element of the system sale has been identified as a separate performance obligation and revenue is recognised over
time as this obligation is fulfilled. The revenue attributable to the support element of a system sale is calculated by reference to
the equivalent standalone selling price of that support had it not been included within a system sale. In general, this has
resulted in a greater revenue deferral per system sale than under IAS 18.
65
OXFORD METRICS PLC ANNUAL REPORT 2019
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2019
IFRS 9 has replaced IAS 39 ‘Financial Instruments: Recognition and Measurement’. The adoption of IFRS 9 has had no
significant impact on the Group. The assessment of expected credit losses did not result in a provision being recognised in the
Statement of Financial Position due to the very low levels of historic credit losses within the Group.
Had the Group continued to report in accordance with IAS 18 ‘Revenue’, it would have reported the following amounts in the
financial statements for the year ended 30 September 2019.
Condensed consolidated income statement
Revenue
Finance income
Finance expense
Taxation
Profit for the period attributable to
owners of the parent during the period
Exchange differences on retranslation of overseas subsidiaries
Total comprehensive income for the period attributable to owners of the
parent during the period
As would
have been
reported
under
IAS 18
£’000
35,651
66
(2)
(581)
4,402
306
4,708
Effect
£’000
301
-
-
(77)
224
35
259
As reported
under IFRS 15
£’000
35,350
66
(2)
(504)
4,178
271
4,449
Earnings per share for profit on continuing operations attributable to owners
of the parent during the year
Basic earnings per share (pence)
Diluted earnings per share (pence)
3.33p
3.24p
0.18p
0.18p
3.51p
3.42p
Earnings per share for profit on total operations attributable to owners of
the parent during the year
Basic earnings per share (pence)
Diluted earnings per share (pence)
3.34p
3.25p
0.18p
0.18p
3.52p
3.43p
66
OXFORD METRICS PLC ANNUAL REPORT 2019
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2019
Condensed Consolidated Statement of Financial Position
Corporation tax debtor
Contract liabilities/deferred income (included in trade and other payables)
Total equity shareholders’ funds
As would
have been
reported
under
IAS 18
£’000
100
(3,744)
32,292
Effect
£’000
(77)
1,208
1,131
As reported
under IFRS 15
£’000
177
(4,952)
31,161
67
OXFORD METRICS PLC ANNUAL REPORT 2019
COMPANY INFORMATION
Company registration number:
03998880
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)
Naomi Climer (Non-executive Director)
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
68
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 13 February 2020 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 2020 annual general meeting of Oxford Metrics plc (the “Company”) will be held at 6 Oxford
Industrial Park, Yarnton, Oxfordshire, OX5 1QU on 13 February 2020 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 2019 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 1.80 pence per share on each of the Company’s ordinary shares for the financial year ended
30 September 2019.
To re-elect Naomi Climer who retires by rotation in accordance with the Company’s articles of association and offers
herself for re-appointment by general meeting, as a director of the Company.
To re-elect Roger Parry 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 Catherine Robertson who retires by rotation in accordance with the Company’s articles of association and
offers herself 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
£103,239.
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 12 February 2025, 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.
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:
69
(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 £31,284.
This power shall (unless previously renewed, varied or revoked by the Company in general meeting) expire on
12 February 2025, 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 12,513,813
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
2 December 2019
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.
70
Notes:
1.
2.
3.
4.
5.
6.
7.
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.
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 11 February 2020 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 11 February 2020 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 1.80 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 13 December 2019. If approved, the date of payment of the final dividend will be 28 February 2020.
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.
71
At this meeting, Naomi Climer, Roger Parry and Catherine Robertson 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 £103,239.
As at 2 December 2019, the Company did not hold any shares in treasury. If the resolution is passed, the authority will expire
on 12 February 2025 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 12,513,813; 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 12 February 2025.
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 2021 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.
72
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 75, 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 75 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)
(b)
(c)
completed and signed;
sent or delivered to Link Asset Services, PXS 1, 34 Beckenham Road, Beckenham BR3 4ZF; and
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).
8.
9.
10.
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.
73
74
Oxford Metrics plc
Form of Proxy
For use at the annual general meeting to be held at 6 Oxford Industrial Park, Yarnton, Oxfordshire, OX5 1QU on
13 February 2020. 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 13 February 2020 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 2019
✃
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 Naomi Climer as a director
5. To re-elect Roger Parry as a director
6. To re-elect Catherine Robertson 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 ...................2020
Signature(s) ....................................Date .........................2020
75
[Please return in envelope supplied]
76
Perivan 257346