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OXFORD METRICS PLC
ANNUAL REPORT AND
FINANCIAL STATEMENTS
FOR THE YEAR ENDED
30 SEPTEMBER 2020
COMPANY NO 03998880
Perivan 260241
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OXFORD METRICS PLC ANNUAL REPORT 2020
Contents
Chairman’s Statement
Strategic Report
Report of the Directors
Corporate Governance Report
Audit Committee 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 2020
CHAIRMAN’S STATEMENT
As we review what has been a most unexpected 2020, we find three key themes emerging, which demonstrate both the
strengths of the business today and, perhaps more importantly, where the opportunities lie for the future.
• Oxford Metrics is a resilient business well placed to adapt to changes to the economy arising from the pandemic.
Over the past year the Group has clearly demonstrated its strength and agility in the face of unanticipated challenges,
moving quickly to adapt to the new environment to continue to serve our customers.
•
Short-term sales have been held back but the main growth drivers in our two divisions are accelerating. Although
the pandemic did cause a delay in closing sales over the second half of the financial year, we have seen signs of an
acceleration of market trends which should benefit us in the future.
• Our strong financial platform affords us the opportunity to bring forward growth plans. Through these unprecedented
times we have continued to be profitable and generate cash. Our strong fundamentals and robust financial position
provide us with a solid platform to weather challenges presented in the on-going economic environment, re-prioritise and
fast track organic growth opportunities and expedite acquisition opportunities.
These themes are reflected in our headline financial performance for the 12 months to 30th September 2020 with the Group
reporting revenue of £30.3m (FY19: £35.3m) and an Adjusted PBT* of £2.6m (FY19: £5.5m) despite the unprecedented market
conditions. Furthermore, we are pleased to report that these results include a profitable second half for our Yotta subsidiary
following several years of investment in its transition to a Software-as-a-Service offering ('SaaS'), enhancing the Group’s
recurring revenue base and forward visibility.
We continued to improve the quality of our earnings by increasing our Annual Recurring Revenue (‘ARR’) to £6.8m
(FY19: £6.2m). This growth was achieved by our Yotta subsidiary, which signed £1.0m in new ARR during the financial
year (FY19: £1.0m) whilst retention rates fell slightly to 91.7% (FY19: 94.8%).
The Group reports another year of cash generation with operating cash flow of £6.4m (FY19: £7.7m). The Group had £14.9m in
cash as of 30 September 2020 (30 September 2019: £13.8m) having paid a final 2019 dividend of £2.3m (2018: £1.9m) during
the year. In the light of this cash performance and confidence in our resilience as a business but tempered by the continued
economic uncertainty, the Board proposes maintaining our final dividend at 1.80p per share (FY19 Final Dividend: 1.80p) this
year. Our dividend policy remains to make the pay-out progressive with the aim of maintaining an average dividend cover of
approximately 2 times Adjusted* Earnings per Share.
Finally, I would like to thank all stakeholders in our business for their exceptional contributions over the past year – our
outstanding global team and their families who adapted so well to the new operational environment, and our shareholders,
partners and customers who continued to support us in these most challenging of times.
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 2020
STRATEGIC REPORT
Nick Bolton, CEO
2019/20 was a challenging year, but despite the COVID-19 pandemic both divisions made progress that will benefit both
towards our short-term goals and broader strategic aims.
STRATEGIC REVIEW
As the Chairman has already introduced in his review, we saw three key strategically relevant themes develop over the past 12
months. These are worth explaining in detail in order to understand both the historical performance and where the business
can go from here.
1. Resilient business well placed to adapt to the post-pandemic economy
From March 2020, we moved quickly to remain fully functional whilst ensuring the safety of our people and customers. None of
our employees were furloughed and we serviced our global customer base remotely. For those who could not work from
home, we put in place safe working environments and practices and saw no significant hiatus in our ability to fulfil customer
orders at Vicon or deliver implementation projects at Yotta. The team adapted brilliantly to this new remote working model.
Looking forward, evidence from our sales and client service teams suggests that customers have changed the way they want
to engage with us as a result of the pandemic. We have stayed close to customers throughout the pandemic and are fortunate
to have strong, established and well-respected brands which provide the environment of trust to enable the whole sales
process to be conducted without the same number of face-to-face meetings. Whilst we still expect to make some sales in
traditional ways, we believe we can increase sales efficiency by making full use of remote working.
2. Short-term sales delay but macro growth drivers accelerating
The second observation is that although the pandemic caused a short-term delay to sales across both divisions, we saw
stronger macro winds of positive market change which, we believe, will assist in driving our growth in the future.
During the lockdowns and throughout the second half, the sales delay arose from some of our customers having to shut down
their operations and activities which meant our planned sales to them were deferred. In some cases, this was customers
needing to address immediate operational needs, temporarily de-prioritising adoption or upgrade of our technology. For
example, where Local Authorities needed to focus on the reconfiguration of their services, such as waste collection or home
care, given the new lockdown environments. This switch of focus delayed procurement processes, rather than causing their
cancellation, and as we move into 2021 we see a broad picture of a return to more normal Local Authority procurement cycles.
Indeed, we are encouraged by the interest shown by new customers. In the case of Yotta we believe the strong word-of-mouth
approval from users of our software is creating interest from a wider range of UK Local Authorities, and Vicon’s motion
measurement technology is finding a wider range of potential end-users as new use cases continue to emerge.
Despite the pandemic causing a short-term sales delay, it also accelerated broader changes prevalent in our markets – all of
which are positive for the long-term success of the Group.
In Yotta, we have witnessed an acceleration in the Digital Transformation of public asset management. With asset maintenance
and service teams across the UK now having to work and be managed remotely - be that assigning work, reporting
inspections or collecting waste - local government customers need digital tools to help them run their services in this new way.
This "shift to digital" was already underway but the pandemic has accelerated the need for tools like Yotta's to seamlessly
manage this new remote way of working.
At Vicon, the macro driver is the move of motion measurement into the mainstream and into everyday life – watches which
measure our steps, robotics which assist our lives, and smartphones which can now track skeletal movement. The pandemic
has made companies look to bring forward remote sensing or operations projects, which requires a capability to measure
motion within their products and services. For example, non-contact passenger security systems which will remotely track our
movements and behaviours to ensure public safety; or virtual film production which requires fewer people simultaneously on
set; or in monitoring patients post-orthopaedic surgery at home avoiding the need to bring patients into traditional healthcare
environments. This acceleration in the move to remote sensing in more markets is further validation of Vicon’s broader
application and bodes well for this division's continuing long-term success.
3. Strong financial platform affords us the opportunity to bring forward growth plans
The Group's finances are in robust shape. We generated cash despite the exceptional trading environment. We have no debt,
exercise tight financial controls and we are maintaining our dividend this year, without impacting our ability to invest in the
future of the business. Given the strength of this financial position and the accelerated macro picture in both our divisions, we
are now in a position to bring forward our growth plans through both organic and inorganic development.
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Organic growth
Both divisions have organic growth opportunities. At Yotta, we estimate we hold around 12% of the UK market for applications
we serve. Over the past 12 months with growing ARR levels, we have demonstrated we have a compelling proposition with our
innovative product, Alloy. Several flagship partnerships have been secured including: with Panasonic to run Alloy on their in-
cab devices in waste collection vehicles; with Telensa, the UK's largest provider of smart IoT streetlights, to provide a seamless
lighting solution; and control groups of streetlights and with bbits as part of their "Love Clean Streets" initiative. Over the
coming year we will continue to invest in both market and product development with a key focus on the UK market.
At Vicon, our organic plans fall into two specific growth vectors: Established Markets and Adjacent Verticals. In our Established
Markets business, where we hold a market-leading position, we will continue to invest in R&D to provide the most capable
platform for our customers to undertake their work and maintain that leadership role. Our Adjacent Verticals opportunity
continues to grow as more markets recognise the value motion measurement can bring to their specific vertical
implementation. We can see this in the interest in our elite sports solutions from the new markets of orthopaedic rehabilitation
and military performance management, and also in the emerging opportunity to exploit our Location-based Virtual Reality
('LBVR') solution further in the enterprise and defence markets.
As we look to exploit these adjacent market opportunities, we are developing and working with a network of carefully selected
partners, who provide complementary technology and/or channels to market. We now have 14 such partners in total. This
partner-centric approach means the business can focus on its core competency of measurement capability and avoid the
expensive market start-up costs of channel development and whole product investment.
Inorganic growth
Given our strong financial position we are actively investigating acquisition opportunities to strengthen both of our existing
divisions. Using a strict criteria lens, we are exploring opportunities in software related to measurement and data analysis with
niche commercial applications.
In our asset management division, this means expanding our geographical and/or vertical market customer footprint. We know
Alloy can manage almost any type of asset and thus has applications outside its current markets, therefore we can accelerate
its adoption by adding organisations with existing successful customer relationships in those markets.
In our motion measurement division, we have two broad target areas. Firstly, companies which hold complementary sensing
and measuring technologies which can be incorporated into the Vicon proposition, and secondly companies which hold
material end-user market positions which would benefit from motion-enabling or bringing our existing 3D capabilities to their
marketplaces.
Our strategy and strong financial position enable us to drive our software into more applications, amplifying the core of what
we do.
OPERATIONAL REVIEW
2019/20 was a challenging year operationally but despite the COVID-19 pandemic both Vicon and Yotta made progress and
growth trends have accelerated that will benefit the longer-term for both divisions.
Asset Management Division – Yotta
KPI
Asset Management
Revenue
PBT
FY20
£7.5m
FY19
£7.0m
FY20
(£1.3m)
FY19
(£1.5m)
Adjusted PBT*
FY20
(£0.1m)
FY19
(£0.2m)
Our Asset Management division, Yotta, reported its highest level of ARR of £6.8m on 30th September 2020 (30th September
2019: £6.2m) and customer retention of 91.7% (FY19: 94.8%). Having reported additions to ARR in the first half of £0.8m,
progress was muted in the third quarter due to the pandemic, but the market has since adapted and momentum driven by
ongoing Digital Transformation saw additions rise in the fourth quarter to record total additions for the year of £1.0m.
Reported headline revenue increased by 7.3% to £7.5m (FY19: £7.0m) and the division reported an Adjusted PBT* loss of
£0.1m (FY19 Loss: £0.2m). Our shareholders will be aware that we have been investing in Yotta for several years and
consequently the business has been loss-making. Having completed its transition to SaaS, we are delighted to report that the
business produced a £0.4m profit in the second half and is now profitable on a run-rate basis at the current level of ARR and
normal levels of consulting revenue, so a major milestone has been achieved by the business.
This growth in ARR was driven by some excellent competitive wins across UK local government, including at South
Gloucestershire, Warwickshire, Somerset, Worcestershire and City of York. Furthermore, because of lockdowns, contract wins
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secured in the first part of the year were successfully implemented remotely. This worked well and, indeed, we have been able
to get many customers live and continue to implement with others, some of which without ever meeting them in person.
During Q3 Yotta saw sales wins pause, but the processes around pipeline generation and activity did not. Yotta’s sales team
worked on modifying their customer and prospect engagement models to reflect the new situation and activity levels in the
earlier part of sales campaigns remained high. Q4 saw many of the stalled latter-stage campaigns restart and close due to
reduced pressure on Local Authority authorisation processes.
We are now seeing activity levels grow throughout Yotta's sales processes, with many new and existing prospects and
customers citing a higher priority for capable and robust systems to help them operate in a world where remote services are
needed. This is accelerating the need for systems to aid implementation of Digital Transformation processes, where customers
want or need to engage online and not in person. Alloy’s connectivity and flexible data model means that it is ideally placed to
help customers react to situations for which they have not planned. New services or asset classes can easily be created by
them using standard tools. Similarly, connections to new audiences or other systems are equally available.
With the expectation that at least another £1.0m will be added to ARR in FY21, our Asset Management division is well placed
to deliver a full year of profitability ahead.
Motion Measurement Division – Vicon
KPI
Revenue
PBT
Motion measurement
FY20
£22.8m
FY19
£28.3m
FY20
£2.7m
FY19
£6.3m
Adjusted PBT*
FY20
£4.8m
FY19
£8.1m
Vicon reported a decline in revenue of 19.6% to £22.8m (FY19: £28.3m) which has interrupted continuous growth since 2015.
The COVID-19 pandemic affected all market segments but to varying degrees. Hardest hit was the Engineering segment, down
31.2% and the Life Sciences segment down 25.8%. In contrast the Entertainment segment was down by only 1.0% and
Adjacent Verticals (including primarily LBVR) was down 5.1%.
Gross margin on reported revenue was 73.6% (FY19: 74.0%) so largely comparable with last year, but the impact in real terms
was a loss of gross margin of around £4.0m compared to last year. The impact on Adjusted PBT* was mitigated to some extent
by lower commissions and primarily from Lockdown-related savings. For example, travel-related costs, marketing events and
other areas of discretionary spend were substantially lower than last year. Consequently, Vicon reported a lower Adjusted PBT*
of £4.8m (FY19: £8.1m).
Established Markets – strength in leadership
In order to maintain our leadership position in our most developed markets we continued to invest in R&D and product
innovation throughout the year, which saw us deliver over 20 new software releases over the year. This included the addition of
a Machine Learning-based hand and finger tracking solution in Shogun, our Entertainment market solution, and new versions
of Nexus, our flagship Life Sciences software.
We also updated our iPhone/iPad app, Capture.U, several times during the year. This innovative app uses both Apple's iOS
skeletal tracking, now enhanced with the LIDAR sensors on-board the Pro versions of the iPad and iPhone, and our own Blue
Trident Inertial Measurement Units. The app enables researchers to see human skeletal movement and inertial measurements
overlaid on live video in real-time. This enables a low-cost entry point for physiotherapists and sports scientists to use Vicon
technology to analyse motion in a highly portable, intuitive manner.
These new capabilities combined with Vicon's clear market differentiation helped win deals around the world. This included an
especially strong performance in the Asia Pacific region with wins at Tencent, Konami and ASICS.
Adjacent Markets – developing new growth vectors
In addition to growing our Established Market business, we also seek further growth by applying our technology to newer
markets which offer higher levels of potential growth. We are focussed on two specific opportunities: LBVR and Elite Sports.
LBVR revenue of £1.7m (FY19: £1.8m) was recorded with the planned rollouts by our partners slowing as a result of COVID-19.
That said, we signed four new partners over the full course of the year, and existing partner Europa-Park, one of the world’s
leading theme parks, introduced their very large free-roaming LBVR experience aimed at the theme park market. Furthermore,
partners also found there is interest in the enterprise market for their collective VR experiences, where we fulfilled a number of
orders for this broader enterprise market.
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Our elite sports offering, IMU Step, made progress during the year. Prior to lockdown and the suspension of virtually all elite
sports, we won new teams in the NBA, NFL, MLB, NRL and AFL as well as with a number of collegiate athletic and health
science programmes including at the University of Kentucky and the University of Montana. We also engaged in a number of
exploratory partnership programmes which would see our technology embedded in others' sports solutions. Since the gradual
return of elite sports, we have seen some degree of life returning to the market, and we have also identified new markets for
our solution in orthopaedic rehabilitation and military performance management, which we are now pursuing.
CURRENT TRADING AND OUTLOOK
Both businesses have started the new financial year well, however the COVID-19 pandemic is on-going, so uncertainty
remains which continues to affect certain end-markets.
Vicon's current sales pipeline includes a rollover of opportunity from FY20 into FY21 that is expected to benefit future quarters.
The timing and recognition of these potential orders is taking longer than normal as customers adapt purchasing plans to suit
their own financial and operational circumstances. In the immediate short-term our sales pipeline for Q1 is comparable overall
with this time last year (pre-COVID). This combined with longer term sales pipeline data suggests recovery is underway in our
Rest-of-World markets but for the time being the USA remains subdued.
Yotta has a strong ARR sales pipeline for the full year, consistent with adding at least another £1.0m gross additions to ARR
during the financial year. With this anticipated growth in ARR and a stable cost base, Yotta can look forward to a full year of
profitability.
We operate two market-leading divisions in expanding global markets with highly differentiated software products and clear
strategies to continue to drive progress - amplifying our core. We will continue to both invest in our organic growth and explore
acquisition opportunities, which together can accelerate our strategies within our chosen markets.
Returning to the three themes of 2020, we enter FY21 a resilient Group with two fundamentally strong and profitable
businesses, both of which are seeing an acceleration in favourable market dynamics. This platform together with our robust
Balance Sheet mean we feel confident in our ability to adapt, innovate and navigate any further challenges that may arise
whilst driving organic and inorganic growth.
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FINANCIAL REVIEW
David Deacon, CFO
INCOME STATEMENT
The Group reported revenue of £30.3m (FY19: £35.3m) representing a headline decline of 14.3%, and on a constant FX basis
the decline was 13.9%. The segmental revenue analysis illustrates that all market segments were affected and from a
geographic standpoint, the USA market suffered more than most, down £5.0m compared with last year.
Gross Profit margin reduced slightly to 69.0% (FY19: 71.2%), reflecting a slight change in the mix of revenue. Gross Profit
declined year on year by £4.3m to £20.9m.
Reviewing the cost base within the Income Statement:
•
•
Sales, Support and Marketing costs decreased by £1.3m which was largely due to marketing and operational savings
arising from COVID-19 lockdowns and subsequent virtual operations for the remainder of the financial year, as well as
lower sales commissions.
Research & Development expensed through the Income Statement was £4.2m (FY19: £4.2m). Total R&D including
capitalised development costs of £2.5m (FY19: £2.2m) was £6.7m (FY19: £6.4m), the overall increase was due to the R&D
amortisation and impairment charge of £1.8m (FY19: £1.6m). The continual investment and innovation in product and
services is necessary to maintain the Group’s competitive position and a number of the new products and services
released during the financial year and described in the CEO review are already gaining traction in the market.
•
Administration expenses were largely unchanged overall.
Adjusted PBT* of £2.6m (FY19: £5.5m) has been determined after adding back to the Statutory PBT £1.6m (FY19: £4.7m)
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 which
this year included aborted M&A costs of £0.2m. 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 £2.5m (FY19: £2.2m),
amortisation and impairment of development costs £1.8m (FY19: £1.6m) and the amortisation of acquired intangibles of £0.6m
(FY19: £0.6m).
Property, plant and equipment
The decline arose due to the net effect of capital expenditure of £0.3m (FY19: £0.5m) and a depreciation charge of £0.6m
(FY19: £0.6m).
Right of use assets
The Group has now adopted IFRS16. The balance reported of £2.2m (FY19: £0.0m) represents the value of property and
assets utilised by the Group.
Investments
The year-on-year movement relates to an investment of £0.2m for a minority interest in Trensl Inc. which provides training VR
solutions for the military and healthcare (rehabilitation). The investment comes back-to-back with an exclusive Supply
Agreement to provide all systems. The year on year movement also includes the impairment of our investment in Pimloc
Limited being our share of post-acquisition losses from Pimloc’s trading.
Inventories
The inventory position at the end of the financial year was £3.4m (FY19: £3.2m).
Trade and other receivables
At the year-end trade and other receivables decreased to £9.2m (FY19: £11.7m). The overall decrease is largely due to
accounts receivable that was lower compared to a particularly strong September 2019 revenue in the USA.
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Current liabilities
The year-on-year decline in trade and other payables is accounted for by a decrease in trade payables at the year-end to
£2.0m (FY19: £2.9m) which relates to the shipment of goods in September 2019 being greater than September 2020.
The lease liabilities balance reported of £0.4m (FY19: £0.0m) represents the value of lease payments due within one year
relating to right of use assets given the adoption of IFRS16.
Non-current liabilities
The lease liabilities balance reported of £1.9m (FY19: £0.0m) represents the value of lease payments due greater than one year
relating to right of use assets given the adoption of IFRS16.
STATEMENT OF CASHFLOWS
The Group finished the year with cash of £14.9m (FY19: £13.8m).
Cash generated from operating activities was £6.4m (FY19: £7.7m) which included a working capital inflow arising from a
reduction in accounts receivables of £2.2m. The deployment of this cash included continued investment in development giving
rise to a purchase of intangibles of £2.5m (FY19: 2.2m) and payment of dividends of £2.3m (FY19: £3.1m).
TAX
The Group tax charge this year was £0.0m (FY19: £0.5m). This decrease for the most part is due to the recognition of tax
losses that can be Group relieved in the future. The level of Group R&D activities in the UK where the marginal rate of tax
is 19% (FY19: 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 £1.0m (FY19: £0.4m) due to the aforementioned recognition of losses whilst the deferred
tax liability increased slightly to £2.0m (FY19: £1.8m) due to a change of deferred taxation rates.
KEY PERFORMANCE INDICATORS
The Group relies on financial key performance indicators including revenue, profit before tax, adjusted profit before tax (see
note 7) and cash generation 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
have appropriate management structures and provide competitive remuneration, including share options and where possible
provide continuing career development for key personnel. The Group’s culture, values and behaviours create an environment
that respects and values staff, making Oxford Metrics an attractive and inclusive place to work.
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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.
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 20 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.
COVID-19
The COVID-19 pandemic is on-going and uncertainty exists regarding the timing and success of a vaccine that would facilitate
a return to normal trading conditions. In the immediate future this risk may continue to disrupt demand and our customers’
ability to take delivery of our products and services. In mitigation, the Group have adapted working practices to ensure the safe
continuation of manufacturing and the delivery of services through remote methods to fulfil demand.
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.
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Section 172 Statement
Board engagement with our stakeholders
Section 172 of the Companies Act 2006 requires a director of a Company to act in the way he or she considers, in good faith,
would be most likely to promote the success of the Company for the benefit of its shareholders as a whole. In doing this,
section 172 requires a director to have regard, among other matters, to: the likely consequences of any decision in the long-
term; the interests of the Company’s employees; the need to foster the Company’s business relationships with customer and
suppliers; the impact of the Company’s operations on the community and the environment; the desirability of the Company
maintaining a reputation for high standards of business conduct; and the need to act fairly with shareholders of the Company.
During the year directors considered the factors set out above in discharging their duties under section 172. The stakeholders
we considered in this regard are the people who work for us, buy from us, supply to us, own us, regulate us as well as the
wider community and environment. The Board recognise that building strong relationships with our stakeholders will help us
deliver our strategy in line with our long-term values and operate the business in a sustainable way.
During the year the Board regularly received reports from Executive Management on issues concerning employees, customers,
suppliers, investors and on wider issues concerning the environment, communities, regulators and governments to the extent
appropriate, which it took into account in its decision-making process under section 172 in relation to risks and uncertainties
described in the Strategic Report on page 8. In addition to this, the Board sought to understand the interests and views of the
Group’s stakeholders by engaging with them directly as follows.
•
•
•
•
•
The Board received employee updates from Executive Management using various metrics and feedback tools including
performance appraisals and training needs and engaged with employees in two-way meetings to ensure that employees
were kept well-informed about the business and in particular this year our response to the COVID-19 pandemic to ensure
that we remained a trusted and safe employer.
The Board regularly received updates on feedback from investors from the Chairman, CEO and CFO who met frequently
with institutional investors to discuss and provide updates about – and seek feedback on – the business, strategy, long-
term financial performance, directors’ remuneration policy and dividend policy to the extent appropriate. Members of the
Board also met Shareholders at the AGM.
Through professional services and support functions who engage directly with customers through on-site and remote
meetings the Executive Team continued to foster good customer engagement and receive valuable feedback to ensure
customer satisfaction and retention.
Through professional Supply Chain Management who engage directly with suppliers through on-site and remote meetings,
the Executive Team ensured the interests of suppliers were regularly considered and provided demand forecasts where
appropriate.
Throughout the year, the Board continued to oversee the management and operation of worldwide business activities in
conformity with applicable laws and regulations whilst maintaining the Company’s reputation for integrity and fairness in
business dealings with third parties.
Aware of the interests of all stakeholders the directors were focussed on developing annual recurring revenues across the
Group whilst leveraging the core IP across the business during the year. The directors continued to evaluate numerous merger
and acquisition opportunities that would support growth and amplify the effectiveness of the existing operations of the Group.
The Board believe that no particular stakeholder was disadvantaged as a result of decisions taken during the year and were
consistent with protecting the long-term interest of stakeholders whilst promoting the long-term success of the business for
the benefit of shareholders.
For further details of how the Board operated and the way in which decisions were made, including key activities during the
financial year ended 30 September 2020 and Board governance, see pages 14 to 17 and the Board Committee reports
thereafter.
On behalf of the Board
Nick Bolton
Chief Executive and Director
2 December 2020
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OXFORD METRICS PLC ANNUAL REPORT 2020
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 2020.
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 10. Its subsidiary undertakings are shown in note 16. 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 2019/20 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 24 to the financial statements. Details of employee share options are set out in note 25.
Dividends
The directors are proposing a final dividend in respect of the financial year ended 30 September 2020 of 1.80 pence per share
which will absorb an estimated £2,263,000 of shareholders’ funds. This dividend, if approved, will be paid on 5 March 2021 to
shareholders on the register of members at close of business on 11 December 2020.
Research and development
During the year, the Group’s continuing operations expensed £4,213,000 (2019: £4,184,000) in research costs. In addition,
£2,511,000 (2019: £2,196,000) 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 2020 are disclosed in the Report on Directors’ Remuneration.
The directors who served during the year were as follows:
Roger Parry
Jonathon Reeve (retired 31 January 2020)
Adrian Carey
David Quantrell
Naomi Climer (appointed 20 November 2019)
Nick Bolton
David Deacon
Catherine Robertson
At the Annual General Meeting of the Company, Nick Bolton, Adrian Carey and David Deacon representing one third of the
Board, will retire and, being eligible, offer themselves for re-election.
Financial instruments
Information about the Group’s management of financial risk can be found in note 20 of the financial statements.
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OXFORD METRICS PLC ANNUAL REPORT 2020
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 and safety are continually under review, ensuring that current practices comply with the laws
applicable in the countries in which it operates.
Going concern
In determining the appropriate basis of preparation of the financial statements, the directors are required to consider whether
the Group can continue in operational existence for the foreseeable future.
In the early months of 2020, a global pandemic had broken out causing governments around the world to impose various
restrictions on economies and human populations. The going concern review considered the potential impact of the pandemic
on the following keys areas:
Market considerations
The Group’s primary markets are life sciences, entertainment, engineering, elite sports and local government asset
management. The directors have assessed the impact of COVID-19 on these markets and consider that they have largely
continued to operate through the pandemic. The Group has continued to trade through this period and continue to see
opportunities for growth in its key markets despite the pandemic.
Operational readiness
The manufacturing facilities have remained operational with the Company implementing government advice in ‘social
distancing’ and other measures, including the introduction of a two-shift pattern to reduce the risk of transmission. The Group
has also successfully transitioned the non-manufacturing roles to remote working during this period. As well as maintaining our
operational readiness from an internal perspective, the Group has not been significantly impacted by any supply chain issues
during the pandemic.
Financial considerations
The Company has no external financing and as at the balance sheet date had cash balances of £14.9 million. The financial
strength of the Group allowed it to trade through the lockdowns in a relatively strong position.
Stress testing
Continued uncertainty around the scale, timing and impact of COVID-19 means that forecasting the impact with any degree of
accuracy is difficult. The directors have therefore performed stress testing to model a significant level of sales decline to
assess the impact on cash flow. The results of this analysis is that the directors are confident that the business has sufficient
cash liquidity to sustain very significant and prolonged reductions in trading revenue.
Brexit
As well as the impact of COVID-19 the directors have also considered the impact of Brexit on the ability of the Group to
continue as a going concern. Based on our assessment of the potential impact of a no deal Brexit on Tariffs (both on exports
and imports) and on the business in terms of our people, the directors have concluded that appropriate mitigation strategies
can be put in place and that this will not have a material effect on the Group.
The directors, having prepared cash flow forecasts and given due consideration to the impact of COVID-19 on the Group’s
markets, operations and financial risk, as well as the expected impact of Brexit, have assessed that there is no material
uncertainty with the Group’s ability to continue operating as a going concern for a period in excess of 12 months from the date
of signing the financial statements. For this reason, the directors continue to adopt the going concern basis in preparing the
financial statements.
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OXFORD METRICS PLC ANNUAL REPORT 2020
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.
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 2020
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OXFORD METRICS PLC ANNUAL REPORT 2020
CORPORATE
GOVERNANCE REPORT
Directors’ statement on corporate governance
The Board of Directors is accountable to shareholders for the good corporate governance of the Group. In 2018 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
financial statements. Subsequent annual report and financial statements update shareholders as to how the strategy and plans
are progressing. Specifically, the Strategic Report section of the annual report and financial statements 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, David Quantrell,
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.
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.
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OXFORD METRICS PLC ANNUAL REPORT 2020
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.
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. The 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 2019 to 30th September 2020.
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, Senior Independent 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 and Remuneration 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.
Naomi Climer – Non-executive Director, Chair of Remuneration Committee and member of Audit Committee
On 20 November 2019, we appointed Naomi Climer to replace Jonathon Reeve 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.
Nick Bolton – Chief Executive Officer
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 and was subsequently appointed CEO.
David Deacon – Chief Financial Officer
David joined Oxford Metrics in 2008 as Chief Financial Officer. Before joining he was CFO of AIM listed Mediasurface for five
years where he successfully floated the business in 2004 and concluded the disposal of the business in 2008 to Alterian plc.
Prior to this he held senior financial positions with R.L Polk & Co, Wonderware Inc. and Kalamazoo Computer Group plc.
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OXFORD METRICS PLC ANNUAL REPORT 2020
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. During the year the Company Secretary was supported by
N+1 Singer, Oxford Metrics plc’s Nominated Advisor, and Goodman Derrick LLP. Numis Securities Ltd were appointed
Nominated Advisor and Sole Broker with effect from 13 November 2020.
The Remuneration Committee is supported by PwC and Mercer Kepler 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 13.
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.
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 by 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.
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OXFORD METRICS PLC ANNUAL REPORT 2020
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 are 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 Naomi Climer (Chair), David Quantrell and Adrian Carey who meet formally on at
least two occasions annually. No director has been absent from a committee meeting. The terms of reference of the
Remuneration Committee is available on page 15 of the Company’s Admission Document. Full information on the
Remuneration Committee and its policies are discussed in the Report on Directors’ Remuneration on page 19.
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.
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OXFORD METRICS PLC ANNUAL REPORT 2020
AUDIT COMMITTEE
REPORT
The Audit Committee members are Adrian Carey (Chair), Naomi Climer and David Quantrell, who meet formally on at least two
occasions annually. Jonathon Reeve resigned during the year. 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.
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.
By order of the Audit Committee
Adrian Carey
Chair
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OXFORD METRICS PLC ANNUAL REPORT 2020
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 three 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
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;
deliver a clear, transparent and fair process;
provide an appropriate degree of alignment between executive remuneration and the remuneration policies that apply to
the wider workforce; and
reinforce the Group’s culture and values.
Directors’ remuneration
The remuneration of directors who served during the year, excluding share option charges, was as follows:
Salary
£’000
Bonus
£’000
Benefits
in kind
£’000
2020
Pension
2020
Total contributions
£’000
£’000
2019
Pension
2019
Total contributions
£’000
£’000
R Parry (Chairman)*
J Reeve (Non Executive Director)
A Carey (Non Executive Director)
D Quantrell (Non Executive Director)
N Climer (Non Executive Director)
N Bolton (Chief Executive Officer)
C Robertson (Secretary and Executive Director)
D Deacon (Chief Financial Officer)
65
12
37
32
24
297
133
226
826
-
-
-
-
-
97
26
66
189
-
-
-
-
-
1
2
1
4
65
12
37
32
24
395
161
293
1,019
-
-
-
-
-
-
19
-
19
65
37
76
32
-
305
150
255
920
-
-
-
-
-
-
18
-
18
* Roger Parry’s remuneration includes £25,000 (2019: £25,000) of shares issued in satisfaction of salary, see note 24.
Directors’ share options
Interests in share options for directors who served during the year were as follows:
C Robertson
N Bolton
D Deacon
Exercise price
59.06p
0.00p
0.00p
At 30 September
2020
Number
At 1 October
2019
Number
400,000
1,200,000
600,000
2,200,000
400,000
1,200,000
600,000
2,200,000
Exercise period
September 2019 to July 2027
December 2019 to December 2026
December 2019 to December 2026
19
260241 Oxford Metrics AR pp02-pp25.qxp 09/12/2020 13:06 Page 20
OXFORD METRICS PLC ANNUAL REPORT 2020
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 93.41 pence (2019: 84.21 pence) and the closing share price was 82.50 pence (2019:
89.00 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 2020 and at 1 October 2019 according to the register of directors' interests.
Ordinary shares
of 0.25p
2019
Number
2020
Number
Percentage of issued
share capital
2019
%
2020
%
257,803
-
278,111
50,000
1,439,201
2,383,565
1,146,821
229,554
-
278,059
50,000
1,439,201
2,383,565
1,146,821
0.21
-
0.22
0.04
1.14
1.90
0.91
0.18
-
0.22
0.04
1.15
1.90
0.92
R Parry
N Climer
A Carey
D Quantrell
C Robertson
N Bolton
D Deacon
By order of the Remuneration Committee
Naomi Climer
Chair
20
260241 Oxford Metrics AR pp02-pp25.qxp 09/12/2020 13:06 Page 21
OXFORD METRICS PLC ANNUAL REPORT 2020
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 2020 which comprise the Consolidated Income Statement, the Consolidated Statement of
Comprehensive Income, Statements of Financial Position for the Group and Parent Company, Statements of Cashflows for the
Group and Parent Company, Statements of Changes in Equity for the Group and Parent Company 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 2020 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.
21
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OXFORD METRICS PLC ANNUAL REPORT 2020
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 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.
Management exercises judgement in recognising revenue,
including the extent of the impact on deferral of revenue
relating to ongoing support and maintenance obligations.
There is a risk that revenue may not be recognised in the
correct period with inappropriate cut-off being applied around
the year end, or the support and maintenance elements of
sales made pre year end not being appropriately deferred.
This risk of inappropriate deferral arises from the potential
that management either do not correctly identify or value
(based on the appropriate allocation of the transaction price)
the revenue related to future services and therefore do not
accurately defer the related revenue.
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 review of a sample of contracts.
We tested a sample of revenue transactions for each material
income stream to verify that revenue was accurately recorded
within the accounting system in the correct accounting
period. The testing was performed through agreement to
evidence of work performed, and recalculation of revenue
recognition based on the identified performance obligations
and allocation of discounts and standalone prices.
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 was 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
recognised and judgements made are in accordance with the
Group’s revenue recognition accounting policy and the
requirements of IFRS 15.
22
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OXFORD METRICS PLC ANNUAL REPORT 2020
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 on
page 34 and the significant judgements are set out in note 3.
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.
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.
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 management’s estimate of useful economic life
and impairment considerations, by reviewing actual sales
achieved and challenging the 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.
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 on page 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. No
impairment was identified as at the balance sheet date.
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 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;
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 considered
management’s assessment of impairment to be appropriate.
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OXFORD METRICS PLC ANNUAL REPORT 2020
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 £280,000 (2019: £320,000). This was determined with
reference to the Group’s turnover, of which it represents 0.9% (2019: 7% of profit before tax). Turnover was considered the
most appropriate measure in assessing performance of the Group for the current year due to the year on year volatility in profit
before tax compared to previous financial periods. Performance materiality was set at 70% (2019: 75%) of the Group
materiality level, being £196,000 (2019: £240,000).
Where financial information from components was audited separately, component materiality was set for this purpose at lower
levels, varying between £100,000 and £250,000.
The materiality for the Parent Company was set at £100,000 (2019: £115,000). This was determined with reference to the
Parent Company’s loss before tax. Performance materiality was set at 70% (2019: 75%) of Parent Company materiality, being
£70,000 (2019: £86,250).
We agreed with the Audit Committee that we would report to the committee all individual audit differences in excess of £8,400
(2019: £16,000). We also agreed to report differences below this threshold that, in our view, warranted reporting on
qualitative grounds.
An overview of the scope of our audit
The Group has 12 components 4 of which were considered to be individually significant, being Oxford Metrics Plc (the Parent
Company), Vicon Motion Systems Limited, Vicon Motion Systems Inc and Yotta Limited. The Group also has 4 non-significant
trading subsidiaries being; Yotta Pty Limited, IMeasureU Limited, IMeasureU Inc, 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
the Group audit team.
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 US member firm of the BDO International network.
Group level procedures were performed on material balances and transactions by the Group audit team on IMeasureU Ltd and
Yotta Pty Limited.
Analytical procedures were performed at Group level by the Group audit team on IMeasureU Inc, IMeasureU Limited and the
2 dormant companies.
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 remotely, reviewed in detail the findings of work performed and considered the impact of
these upon the Group audit opinion.
Other information
The Directors are responsible for the other information. The other information comprises the information included in the annual
report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not
cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the
audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material
misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material
misstatement of the other information. If, based on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
24
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OXFORD METRICS PLC ANNUAL REPORT 2020
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
•
•
the information given in the strategic report and the Directors’ report for the financial year for which the financial
statements are prepared is consistent with the financial statements; and
the strategic report and the Directors’ report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Group and the Parent Company and its environment obtained in the
course of the audit, we have not identified material misstatements in the strategic report or the Directors’ report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report
to you if, in our opinion:
•
•
•
adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit have not been
received from branches not visited by us; or
the Parent Company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of Directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Responsibilities of Directors
As explained more fully in the Statement of Directors’ responsibilities set out on page 13, 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
260241 Oxford Metrics AR pp26-pp30.qxp 09/12/2020 13:07 Page 26
OXFORD METRICS PLC ANNUAL REPORT 2020
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 30 SEPTEMBER 2020
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 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 2020
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 (expense)/income
Total comprehensive income for the year attributable to owners of the parent
Note
4
6
9
11
6
10
10
10
10
2020
£’000
30,298
(9,400)
20,898
(7,341)
(4,213)
(7,813)
163
1,694
20
(103)
(29)
1,582
22
1,604
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
-
13
1,604
4,178
1.28p
1.26p
3.33p
3.24p
1.28p
1.26p
3.34p
3.25p
Group
2020
£’000
1,604
(353)
(353)
1,251
Group
2019*
£’000
4,178
271
271
4,449
*The Group has applied IFRS 16 using the modified retrospective approach. Under this method the comparative information is
not restated. See note 31.
The notes on pages 31 to 67 are an integral part of these financial statements.
26
260241 Oxford Metrics AR pp26-pp30.qxp 09/12/2020 13:07 Page 27
OXFORD METRICS PLC ANNUAL REPORT 2020
CONSOLIDATED AND COMPANY STATEMENT OF FINANCIAL
POSITION AS AT 30 SEPTEMBER 2020
COMPANY NUMBER: 3998880
Non-current assets
Goodwill and intangible assets
Property, plant and equipment
Right of use assets
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
Lease liabilities
Net current assets
Total assets less current liabilities
Non-current liabilities
Other liabilities
Lease 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
Note
12
14
15
16
21
17
18
19
15
22
15
23
21
24
26
26
26
26
Group
2020
£’000
12,551
1,937
2,182
305
974
17,949
3,439
9,224
82
14,940
27,685
(9,931)
(426)
(10,357)
17,328
35,277
(609)
(1,909)
(24)
(1,994)
(4,536)
Group
2019*
£’000
Company
2020
£’000
Company
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)
-
30
-
14,802
298
15,130
-
6,173
-
5,049
-
37
-
14,635
250
14,922
-
9,155
-
4,700
11,222
13,855
(3,078)
-
(3,078)
8,144
23,274
(5,921)
-
(5,921)
7,934
22,856
-
-
-
-
-
-
-
-
-
-
30,741
31,161
23,274
22,856
314
65
17,763
12,437
162
30,741
313
65
17,417
12,851
515
31,161
314
65
17,763
5,132
-
23,274
313
65
17,417
5,061
-
22,856
*The Group has applied IFRS 16 using the modified retrospective approach. Under this method the comparative information is
not restated. See note 31.
The profit of the Company for the year ended 30 September 2020 was £2,126,000 (30 September 2019: profit of £51,000).
The financial statements on pages 26 to 67 were approved and authorised for issue by the Board of Directors on 2 December
2020 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
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OXFORD METRICS PLC ANNUAL REPORT 2020
CONSOLIDATED AND COMPANY STATEMENT OF CASHFLOWS
FOR THE YEAR ENDED 30 SEPTEMBER 2020
Cash flows from operating activities
Operating profit/(loss) from continuing operations
Operating profit from discontinued operations
Group operating profit/(loss)
Depreciation and amortisation
Impairment of intangible assets
Impairment of investment
Share-based payments
Exchange adjustments
(Increase)/decrease in inventories
Decrease/(increase) in receivables
(Decrease)/increase in payables
Cash generated from operating activities
Group
2020
£’000
Group
2019*
£’000
Company
2020
£’000
Company
2019*
£’000
Note
1,694
-
1,694
3,448
72
-
160
(200)
(225)
2,248
(771)
6,426
4,664
21
4,685
2,761
-
-
264
134
(823)
(949)
1,600
7,672
(123)
-
(123)
18
-
98
160
(52)
-
2,924
(517)
2,508
200
-
200
12
-
-
141
(105)
-
7,412
(1,159)
6,501
Tax paid
(157)
(369)
-
-
Net cash from operating activities
6,269
7,303
2,508
6,501
Cash flows from investing activities
Purchase of property, plant and equipment
Purchase of intangible assets
Purchase of investment
Proceeds on disposal of property, plant and equipment
Interest received
Interest paid
Interest arising on contingent consideration
Acquisition of subsidiary undertaking net of cash acquired
(310)
(2,511)
(236)
33
20
(103)
-
(128)
(467)
(2,196)
-
79
23
(2)
43
(141)
Net cash used in investing activities
(3,235)
(2,661)
(11)
-
(236)
-
19
-
-
-
(228)
(29)
-
-
9
22
-
-
-
2
Cash flows from financing activities
Issue of ordinary shares
Equity dividends paid
29
322
(2,253)
91
(3,125)
322
(2,253)
91
(3,125)
Net cash used in financing activities
(1,931)
(3,034)
(1,931)
(3,034)
Net increase in cash and cash equivalents
1,103
1,608
349
3,469
Cash and cash equivalents at beginning of the period
13,837
12,229
4,700
1,231
Cash and cash equivalents at end of the period
14,940
13,837
5,049
4,700
*The Group has applied IFRS 16 using the modified retrospective approach. Under this method the comparative information is
not restated. See note 31.
The notes on pages 31 to 67 are an integral part of these financial statements.
28
260241 Oxford Metrics AR pp26-pp30.qxp 09/12/2020 13:07 Page 29
OXFORD METRICS PLC ANNUAL REPORT 2020
CONSOLIDATED AND COMPANY STATEMENT OF CHANGES IN
EQUITY FOR THE YEAR ENDED 30 SEPTEMBER 2020
Group
Balance as at 1 October 2018
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
Shares
to be
issued
£’000
Share
premium
account
£’000
Foreign
currency
Retained translation
reserve
earnings
£’000
£’000
Total
£’000
65
17,327
11,358
244
29,306
Share
capital
£’000
312
-
-
-
-
1
-
-
-
-
-
-
-
-
-
-
-
90
-
4,178
-
4,178
-
271
271
176
(3,125)
-
264
-
-
-
-
176
(3,125)
91
264
Balance as at 30 September 2019*
313
65
17,417
12,851
515
31,161
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
-
-
-
-
1
-
-
-
-
-
-
-
-
-
-
-
346
-
Balance as at 30 September 2020
314
65
17,763
1,604
-
1,604
-
(353)
(353)
100
(2,253)
-
135
12,437
-
-
-
-
100
(2,253)
347
135
162
30,741
*The Group has applied IFRS 16 using the modified retrospective approach. Under this method the comparative information is
not restated. See note 31.
The notes on pages 31 to 67 are an integral part of these financial statements.
29
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OXFORD METRICS PLC ANNUAL REPORT 2020
CONSOLIDATED AND COMPANY STATEMENT OF CHANGES IN
EQUITY FOR THE YEAR ENDED 30 SEPTEMBER 2020
Company
Balance as at 1 October 2018
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
Shares
to be
issued
£’000
Share
premium
account
£’000
Foreign
currency
Retained translation
reserve
earnings
£’000
£’000
Total
£’000
65
17,327
7,877
(122)
25,459
Share
capital
£’000
312
51
(122)
-
122
51
-
-
-
-
-
1
-
-
-
-
-
-
-
-
-
-
-
90
-
116
(3,125)
-
264
Balance as at 30 September 2019
313
65
17,417
5,061
Net profit for the year
Transactions with owners:
Tax recognised directly in equity in relation
to employee share options
Dividends
Issue of share capital
Share based payment charge
-
-
-
1
-
-
-
-
-
-
-
-
-
346
-
Balance as at 30 September 2020
314
65
17,763
2,126
63
(2,253)
-
135
5,132
The notes on pages 31 to 67 are an integral part of these financial statements.
30
-
-
-
-
-
-
-
-
-
-
-
116
(3,125)
91
264
22,856
2,126
63
(2,253)
347
135
23,274
260241 Oxford Metrics AR pp31-pp56.qxp 09/12/2020 13:07 Page 31
OXFORD METRICS PLC ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2020
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.
Going concern
In determining the appropriate basis of preparation of the financial statements, the directors are required to consider whether
the Group can continue in operational existence for the foreseeable future.
In the early months of 2020, a global pandemic had broken out causing governments around the world to impose various
restrictions on economies and human populations. The going concern review considered the potential impact of the pandemic
on the following keys areas:
Market considerations
The Group’s primary markets are life sciences, entertainment, engineering, elite sports and local government asset
management. The directors have assessed the impact of COVID-19 on these markets and consider that they have largely
continued to operate through the pandemic. The Group has continued to trade through this period and continue to see
opportunities for growth in its key markets despite the pandemic.
Operational readiness
The manufacturing facilities have remained operational with the Company implementing government advice in ‘social
distancing’ and other measures, including the introduction of a two-shift pattern to reduce the risk of transmission. The Group
has also successfully transitioned the non-manufacturing roles to remote working during this period. As well as maintaining our
operational readiness from an internal perspective, the Group has not been significantly impacted by any supply chain issues
during the pandemic.
Financial considerations
The Company has no external financing and as at the balance sheet date had cash balances of £14.9 million. The financial
strength of the Group allowed it to trade through the lockdowns in a relatively strong position.
Stress testing
Continued uncertainty around the scale, timing and impact of COVID-19 means that forecasting the impact with any degree of
accuracy is difficult. The directors have therefore performed stress testing to model a significant level of sales decline to
assess the impact on cash flow. The results of this analysis is that the directors are confident that the business has sufficient
cash liquidity to sustain very significant and prolonged reductions in trading revenue.
Brexit
As well as the impact of COVID-19 the directors have also considered the impact of Brexit on the ability of the Group to
continue as a going concern. Based on our assessment of the potential impact of a no deal Brexit on Tariffs (both on exports
and imports) and on the business in terms of our people, the directors have concluded that appropriate mitigation strategies
can be put in place and that this will not have a material effect on the Group.
The directors, having prepared cash flow forecasts and given due consideration to the impact of COVID-19 on the Group’s
markets, operations and financial risk, as well as the expected impact of Brexit, have assessed that there is no material
uncertainty with the Group’s ability to continue operating as a going concern for a period in excess of 12 months from the date
of signing the financial statements. For this reason, the directors continue to adopt the going concern basis in preparing the
financial statements.
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.
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OXFORD METRICS PLC ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2020
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 and more detail
can be found in note 31:
•
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 adoption of these standards and interpretations not yet effective are not expected to have a
material impact on the results of the Company.
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 2020. 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 2020.
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 2020.
Where the Company has control over an investee, it is classified as a subsidiary. The company controls an investee if all three
of the following elements are present: power over the investee, exposure to variable returns from the investee, and the ability of
the investor to use its power to affect those variable returns. Control is reassessed whenever facts and circumstances indicate
that there may be a change in any elements of control.
Subsidiary undertakings are fully consolidated from the date on which control is transferred to the Group. They are
deconsolidated from the date on which control ceases. Acquisitions of subsidiaries are dealt with by the acquisition method of
accounting from the date of acquisition. Inter-company balances and transactions are eliminated on consolidation.
Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision
Maker. The Chief Operating Decision Maker has been identified as the Board of Directors of Oxford Metrics plc.
Revenue
Revenue represents the fair value of consideration received or receivable arising from the provision of goods and services to
third party customers, net of VAT, and trade discounts. Revenue has been recognised in the year ended 30 September 2020 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.
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OXFORD METRICS PLC ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2020
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.
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 payables in 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.
Government grants
Grants from the Government are recognised at their fair value where there is a reasonable assurance that the grant will be
received and that the Group will comply with all attached conditions. Government grants relating to costs are deferred and
recognised in the income statement over the period necessary to match them with the costs that they are intended to
compensate. Grants received are included within other operating income in the income statement.
Goodwill and intangible assets
Goodwill is carried at cost less any provision for impairment. Intangible assets are valued at cost less amortisation and any
provisions for impairment.
Goodwill arising on business combinations (representing the excess of fair value of the consideration given over the fair value
of the separable net assets acquired) is capitalised and its subsequent measurement is based on annual impairment reviews,
with any impairment losses recognised immediately in the income statement. For business combinations completed after
1 January 2010, direct costs of acquisition are recognised immediately in the income statement as an expense.
The Group has elected to apply IFRS 3, ‘Business combinations’ prospectively from the date of transition to IFRS and
therefore goodwill written off to reserves prior to 1 October 2006 has not been reinstated on transition to IFRS.
Externally acquired intangible assets
Intangible assets are capitalised at cost and amortised to nil by equal annual instalments over their estimated useful economic
life.
Intangible assets are recognised on business combinations if they are separable from the acquired entity. The amounts
ascribed to such intangibles are arrived at by using appropriate valuation techniques (see note 3). The significant intangibles
recognised by the Group and their useful economic lives are as follows:
•
•
•
Brand name
Customer relationships
Intellectual property
over 10 years
over 8 years
over 2-10 years
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OXFORD METRICS PLC ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2020
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.
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.
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OXFORD METRICS PLC ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2020
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.
Leases
The Group accounts for a contract, or portion of a contract, as a lease when it conveys the right to use an asset for a period of
time in exchange for consideration. Leases are those contracts that satisfy the following criteria:
a)
b)
c)
There is an identified asset;
The Group obtains substantially all the economic benefits from use of the asset; and
The Group has the right to direct use of the asset.
The Group considers whether the supplier has all the economic benefits from use of the asset, the Group considers only the
economic benefits that arise from the asset, not those incidental to legal ownership or other potential benefits.
In determining whether the Group has the right to direct use of the asset, the Group considers whether it directs how and for
what purpose the asset is used throughout the period of use. If there are no significant decisions to be made because they are
pre-determined due to the nature of the asset, the Group considers whether it was involved in the design of the asset in a way
that pre-determines how and for what purpose the asset will be used throughout the period of use. If the contract or portion of
a contract does not satisfy these criteria, the Group applies other applicable IFRSs rather than FRS16.
All leases are accounted for by recognising a right of use asset and a lease liability except for:
•
•
Leases of low value assets; and
Leases with a duration of 12 months or less.
IFRS 16 was adopted on 1 October 2019 without restatement of comparative figures. For an explanation of the transitional
adjustments that were applied at 1 October 2019 see note 31. The following policies apply subsequent to the date of initial
application.
Lease liabilities are measured at the present value of the contractual payments due to the lessor over the lease term, with the
discount rate determined by reference to the rate inherent in the lease unless (as is typically the case) this is not readily
determinable. In this case the Group’s incremental borrowing rate on commencement of the lease is used.
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OXFORD METRICS PLC ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2020
On initial recognition the carrying value of the lease liability also includes:
•
•
•
Amounts expected to be payable under any residual value guarantee;
The exercise price of any purchase option granted in favour of the Group if it is reasonably certain to assess that option;
Any penalties payable for terminating the lease, if the term of the lease has been estimated on the basis of the
termination option being exercised.
Right of use assets are initially measured at the amount of the lease liability, reduced for any lease incentives received, and
increased for:
•
•
•
Lease payments made at or before commencement of the lease;
Initial direct costs incurred; and
The amount of any provision recognised where the Group is contractually required to dismantle, remove or restore the
leased asset.
Subsequent to initial measurement lease liabilities increase as a result of interest charged at a constant rate on the balance
outstanding and are reduced for lease payments made. Right of use assets are amortised on a straight line basis over the
remaining term of the lease or over the remaining useful economic life of the asset if, rarely, this is judged to be shorter than
the lease term.
When the Group revises its estimate of the term of any lease, it adjusts the carrying amount of the lease liability to reflect the
payments to make over the revised term, which are discounted at the same discount rate that applied on lease
commencement. The carrying value of lease liabilities is similarly revised when the variable element of future lease payments
dependent on a rate or index is revised. In both cases an equivalent adjustment is made to the carrying value of the right of
use asset, with the revised carrying amount being amortised over the remaining revised lease term.
When the Group renegotiates the contractual terms of a lease with the lessor, the accounting depends on the nature of the
modification:
•
•
If the renegotiation results in one or more additional assets being leased for an amount commensurate with the
standalone price for the additional rights of use obtained, the modification is accounted for as a separate lease in
accordance with the above policy.
In all other cases where the renegotiation increases the scope of the lease, the lease liability is remeasured using the
discount rate applicable on the modification date, with the right of use asset being adjusted by the same amount. If the
renegotiation results in a decrease in the scope of the lease, both the carrying amount of the lease liability and right of
use asset are reduced by the same proportion to reflect the partial or full termination of the lease with any difference
recognised in profit or loss. The lease liability is then further adjusted to ensure its carrying amount reflects the amount of
the renegotiated payments over the renegotiated term, with the modified lease payments discounted at the rate
applicable on the modification date. The right of use asset is adjusted by the same amount.
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.
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OXFORD METRICS PLC ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2020
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 statement of financial position.
Fair value through profit or loss: This category includes equity investments which are 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.
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.
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OXFORD METRICS PLC ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2020
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
Where properties are sublet and designated as operating leases, the rental income received is recognised as other income in
the income statement on a straight line basis over the lease term.
Dividend distribution
Dividends are recognised when they become legally payable. In the case of interim dividends, this is when they are paid. In the
case of final dividends, this is when approved by the shareholders at the annual general meeting.
Provisions
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is more
likely than not that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated.
Provisions are not recognised for future operating losses. Provisions are measured at the present value of the expenditure
expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value
of money and the risks specific to the obligation.
3. Critical accounting estimates and judgements
The Group makes certain estimates and assumptions regarding the future. Estimates are continually evaluated based on
historical experience and other factors, including expectations of future events that are believed to be reasonable under the
circumstances. In the future, actual experience may differ from these estimates and assumptions. The estimates and
assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within
the next financial year are discussed below.
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OXFORD METRICS PLC ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2020
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 2019 the amortisation charge for the year would have increased by £1,960,000.
More detail including carrying values is included in note 12.
(b)
Estimation of future cashflows and determination of the discount rate in goodwill impairment reviews
The recoverable amounts of the cash generating units are determined from value in use calculations based on cash flow
projections. Changes in the cash flow projections and the discount rates used in these calculations can result in
significant variations in the recoverable amounts of the cash generating units. More detail can be found in note 13.
(c)
Judgements concerning the determination of the lease term for some contracts where the Group is a lessee, and
incremental borrowing rates used to measure lease liabilities
The Group has some property leases which include break clauses and in accordance with IFRS 16 the Group must
assess whether, at 30 September 2020, is it reasonably certain that these break clauses will be exercised. Significant
judgement is also required to determine the Group’s incremental borrowing rate at the date of commencement of the
leases recognised under IFRS 16. More detail can be found in note 15.
(d)
Judgements concerning the treatment of a sublease as an operating lease
The Group acts as an intermediate lessor on one of its property leases in which part of the right of use asset is sublet to a
third party. Management considers that this sublease meets the definition of an operating lease under IFRS 16 and the
rental income received is recognised as other income in the income statement on a straight line basis over the
sublease term.
(e)
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
All revenue is from continuing operations.
Revenue
Vicon UK
Vicon USA
Vicon Group
Yotta
Oxford Metrics Group
2020
£’000
13,540
9,228
22,768
7,530
30,298
2019
£’000
14,638
13,692
28,330
7,020
35,350
39
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OXFORD METRICS PLC ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2020
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
Russia
Rest of Europe
Canada
USA
Rest of North America
Australia
Hong Kong
Japan
South Korea
Rest of Asia Pacific
Other
Oxford Metrics Group
2020
Vicon UK Vicon USA
£’000
£’000
12,240
1,300
13,540
2,831
10,709
13,540
2,248
613
231
449
189
294
350
1,003
-
1
6
1,307
3,205
3,061
323
260
-
13,540
7,231
1,997
9,228
8,617
611
9,228
-
-
-
-
-
-
-
-
1,006
7,706
227
-
-
-
-
-
289
9,228
Yotta
£’000
1,775
5,755
7,530
6,420
1,110
7,530
7,227
-
-
29
-
-
-
2
-
-
-
256
-
-
-
-
16
7,530
Total
£’000
21,246
9,052
30,298
17,868
12,430
30,298
9,475
613
231
478
189
294
350
1,005
1,006
7,707
233
1,563
3,205
3,061
323
260
305
30,298
40
260241 Oxford Metrics AR pp31-pp56.qxp 09/12/2020 13:07 Page 41
OXFORD METRICS PLC ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2020
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
Russia
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
£’000
Vicon USA
£’000
13,507
1,131
14,638
3,440
11,198
14,638
1,662
969
327
585
535
285
46
812
-
646
-
327
2,788
3,570
1,464
565
57
14,638
11,784
1,908
13,692
12,044
1,648
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
27,032
8,318
35,350
22,295
13,055
35,350
8,239
993
327
727
535
285
46
816
905
12,745
110
545
2,788
3,570
1,464
565
690
35,350
41
260241 Oxford Metrics AR pp31-pp56.qxp 09/12/2020 13:07 Page 42
OXFORD METRICS PLC ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2020
Vicon revenue by market
Engineering
Entertainment
Life sciences
Established markets
Adjacent verticals
Vicon Group*
Yotta revenue by type
Software and related services
Yotta Group
Group revenue by type
Sale of hardware
Sale of software
Rendering of services
Oxford Metrics Group
Group revenue by origin
UK
North America
Asia Pacific
Oxford Metrics Group
2020
£’000
4,139
6,732
10,117
20,988
1,780
22,768
2019
£’000
6,015
6,802
13,637
26,454
1,876
28,330
7,530
7,530
7,020
7,020
18,221
4,494
7,583
30,298
20,796
9,228
274
30,298
23,710
7,023
4,618
35,350
21,268
13,692
390
35,350
*This additional information is provided to the Chief Operating Decision Maker. Further analysis by market is not available.
42
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OXFORD METRICS PLC ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2020
Contract balances
2020
Contract assets
£’000
Contract liabilities
£’000
At 1 October 2019
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 2020
787
(1,518)
-
1,141
-
1
411
5,370
-
(9,498)
-
10,062
(84)
5,850
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 2020 2021 2022
£’000 £’000
Support contracts 2,649 604
Software contracts 1,477 862
4,126 1,466
At 30 September 2019 2020 2021
£’000 £’000
Support contracts 2,410 753
Software contracts 752 681
3,162 1,434
2023
£’000
376
473
849
2022
£’000
430
492
922
2024
£’000
299
301
600
2023
£’000
285
133
418
2025
£’000
281
-
281
2024
£’000
250
10
260
2026
£’000
8
-
8
2025
£’000
257
-
257
43
260241 Oxford Metrics AR pp31-pp56.qxp 09/12/2020 13:07 Page 44
OXFORD METRICS PLC ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2020
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
(“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 for Government
Agencies, Local Government and major infrastructure contractors.
Other unallocated costs represent head office expenses not recharged to subsidiary companies.
Inter segment transfers are priced along the same lines as sales to external customers, with an appropriate discount being
applied to encourage use of Group resources. This policy was applied consistently throughout the current and prior year. There
were no significant inter segment transfers during the current or prior year.
Intra segment sales between Vicon UK and Vicon USA are eliminated prior to management and internal reporting, and hence
are not shown separately in the analysis below. The total intra segment sales between Vicon UK and Vicon USA in the year
ended 30 September 2020 are £3,766,000 (2019: £7,630,000).
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.
Adjusted
2020
profit/(loss) Adjusting
before tax
£’000
Group Profit/(loss)
items recharges before tax
£’000
£’000
£’000
1,571
3,277
4,848
(115)
(2,174)
(275)
-
(275)
(398)
(304)
393
(2,218)
(1,825)
1,689
1,059
2,748
(758)
2,583
(1,271)
105
Adjusted
profit/(loss)
before tax
£’000
2,354
5,760
8,114
(230)
(2,421)
2,559
(977)
-
-
-
-
2,559
(977)
-
-
-
-
1,582
5,463
-
-
21
21
1,582
5,484
(794)
2019
Adjusting
items
£’000
Group
recharges
£’000
Profit/(loss)
before tax
£’000
(125)
-
(125)
(469)
(200)
(794)
-
-
3,248
(4,976)
(1,728)
(808)
2,536
-
-
-
-
5,477
784
6,261
(1,507)
(85)
4,669
21
21
4,690
Vicon UK
Vicon USA
Vicon Group
Yotta
Unallocated
Continuing
operations
OMG Life Group
Discontinued
operations
Oxford
Metrics Group
Adjusted profit before tax is detailed in note 7.
Vicon UK
Vicon USA
Vicon Group
Yotta
Unallocated
Oxford Metrics Group
Segment depreciation and amortisation
2019
£’000
2020
£’000
2,263
208
2,471
1,031
18
3,520
1,898
64
1,962
787
12
2,761
44
260241 Oxford Metrics AR pp31-pp56.qxp 09/12/2020 13:07 Page 45
OXFORD METRICS PLC ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2020
Non-current assets
2019
£’000
2020
£’000
Additions to
non-current assets
2019
£’000
2020
£’000
Carrying amount of
segment assets
2019
£’000
2020
£’000
9,581
1,071
10,652
8,642
838
9,480
3,221
317
3,538
1,667
55
1,722
23,320
5,938
29,258
22,687
8,824
31,511
Carrying amount of
segment liabilities
2020
2019
£’000
£’000
(5,827)
(2,802)
(8,629)
(5,781)
(2,973)
(8,754)
Vicon UK
Vicon USA
Vicon Group
Yotta Group
6,664
5,366
1,806
912
16,511
13,069
(5,856)
(3,852)
Unallocated
OMG Life Group*
633
-
386
-
247
-
29
-
Oxford Metrics Group
17,949
15,232
5,591
2,663
5,917
(6,052)
45,634
5,641
(6,052)
44,169
(408)
-
(402)
-
(14,893)
(13,008)
* 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):
Depreciation of right of use assets (note 15)
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)
Impairment of development costs (note 12)
Share based payments – equity settled
Share option charges (note 25)
Operating lease charges – land and buildings
Foreign exchange loss
Grant income receivable
2020
£’000
528
610
312
245
1,753
72
25
135
-
(24)
(163)
2019
£’000
-
621
314
245
1,581
-
25
264
607
98
(202)
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 (2019: £13,000).
2020
£’000
2019
£’000
50
60
63
23
196
37
42
24
18
121
45
260241 Oxford Metrics AR pp31-pp56.qxp 09/12/2020 13:07 Page 46
OXFORD METRICS PLC ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2020
7. Reconciliation of adjusted profit before tax
The adjusted profit before tax is considered by the Board to more accurately reflect the underlying operating performance of
the business on a go-forward basis and complements the statutory measure as reported in the Consolidated Income
Statement.
The reconciliation of profit before tax to adjusted profit provided below includes items that are:
•
•
non-recurring in nature, such as redundancy costs incurred from time to time, acquisition costs and results of the
Group’s equity accounted associate, which are not core to operations or future operating performance.
non-cash moving items which arise from the accounting treatment of share based payments and the amortisation of
acquired intangibles which affect neither future operating performance nor cash generation.
The above definition has been consistently applied historically and is the measure by which the market generally judges PBT
performance.
Profit before tax – continuing operations
Share option charges
Amortisation of intangibles arising on acquisition
Redundancy costs
Aborted transaction 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 before tax – discontinued operations
Adjusted profit before tax – discontinued operations
2020
£’000
1,582
135
541
74
198
-
29
2,559
-
-
2019
£’000
4,669
264
541
125
-
(195)
59
5,463
21
21
Total adjusted profit before tax – all operations
2,559
5,484
Adjusted 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)
Adjusted 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)
2.05p
2.02p
3.96p
3.86p
2.05p
2.02p
3.97p
3.87p
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 option charges
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
Vicon Group
2020
£’000
2,748
33
242
-
1,825
4,848
2019
£’000
6,261
78
242
(195)
1,728
8,114
46
260241 Oxford Metrics AR pp31-pp56.qxp 09/12/2020 13:07 Page 47
OXFORD METRICS PLC ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2020
Loss before tax
Share option charges
Amortisation of intangibles arising on acquisition
Redundancy costs
Reapportion Group overheads
Adjusted loss before tax
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
Yotta Group
2020
£’000
(1,271)
25
299
74
758
(115)
2019
£’000
(1,507)
45
299
125
808
(230)
Group
2020
£’000
13,424
160
1,290
634
15,508
Group
2019
£’000
13,449
289
1,306
610
15,654
Company
2020
£’000
Company
2019
£’000
1,335
102
160
56
1,653
1,314
191
174
55
1,734
2020
Number
2019
Number
69
70
50
26
215
65
70
49
26
210
The average number of employees of the Company during the year was 10 (2019:10) all of which are classified as management
and administration.
Details of individual directors’ remuneration are included in the Report on Directors’ Remuneration. For the purposes of IAS 24
‘Related party disclosures’ the directors are considered key management.
Key management personnel compensation:
Wages and salaries
Share-based payments
Social security costs
Other pension costs
Benefits in kind
The number of directors accruing benefits under Group pension schemes was 1 (2019: 1).
Exercise of directors’ share options
During the year no directors (2019: one director) exercised share options.
47
2020
£’000
1,015
69
112
19
4
1,219
2019
£’000
877
124
131
18
4
1,154
260241 Oxford Metrics AR pp31-pp56.qxp 09/12/2020 13:07 Page 48
OXFORD METRICS PLC ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2020
9.
Taxation
The tax is based on the profit for the year and represents:
United Kingdom corporation tax at 19.0% (2019: 19.0%)
Overseas taxation
Adjustments in respect of prior year
Current taxation
Deferred taxation (note 21)
Total taxation (credit)/expense
Continuing and discontinued operations:
Income tax (credit)/expense from continuing operations
Income tax expense from discontinued operations
Total taxation (credit)/expense
2020
£’000
89
297
(56)
330
(352)
(22)
2020
£’000
(22)
-
(22)
2019
£’000
324
222
1
547
(35)
512
2019
£’000
504
8
512
At 30 September 2020, the Group had an undiscounted deferred tax asset of £974,000 (2019: £405,000). The asset comprises
principally short term timing differences, future tax relief available on the exercise of outstanding employee share options in
Oxford Metrics plc and unrelieved trading losses carried forward for which recoverability is reasonably certain.
Deferred tax assets and liabilities have been measured at an effective rate of 19% and 25% in the UK and USA, respectively
(2019: 17% and 25%, respectively) and are detailed in note 21.
The tax assessed for the year is lower than the standard rate of corporation tax in the UK of 19.0% (2019: lower than the
standard rate of 19%).
The differences are explained as follows:
2020
£’000
1,582
300
90
(37)
90
(14)
(56)
86
(621)
140
(22)
2019
£’000
4,690
891
43
-
126
(4)
1
33
(525)
(53)
512
Profit on ordinary activities before tax
Expected tax income based on the standard rate of
corporation tax in the UK of 19.0% (2019: 19.0%)
Effect of:
Expenses not deductible for tax purposes
Recognition of previously unrecognised deferred tax asset
Unrelieved current year losses
Utilisation of losses brought forward
Adjustments to tax charge in respect of prior year current tax
Higher rates on overseas taxation
Research and development tax credit
Effect of tax rate change
Total tax (credit)/expense
48
260241 Oxford Metrics AR pp31-pp56.qxp 09/12/2020 13:07 Page 49
OXFORD METRICS PLC ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2020
10. Earnings/(loss) per share
2020
–––––––––––––––––––––––––––––––––––
Weighted
average
number of
shares
‘000
Per share
amount
(pence)
Earnings
£’000
2019
–––––––––––––––––––––––––––––––––––
Weighted
average
number of
shares
‘000
Per share
amount
(pence)
Earnings
£’000
Continuing operations
Basic earnings per share
Earnings attributable to ordinary shareholders
Dilutive effect of employee share options
Diluted earnings per share
Discontinued operations
Basic earnings per share
Loss attributable to ordinary shareholders
Dilutive effect of employee share options
Diluted earnings per share
Total operations
Basic earnings per share
Earnings attributable to ordinary shareholders
Dilutive effect of employee share options
Diluted earnings per share
1,604
-
1,604
125,568
2,083
127,651
1.28
(0.02)
1.26
4,165
-
4,165
125,038
3,250
128,288
-
-
-
125,568
2,083
127,651
-
-
-
13
-
13
125,038
3,250
128,288
1,604
-
1,604
125,568
2,083
127,651
1.28
(0.02)
1.26
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
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.
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 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
2020
£’000
-
-
-
2019
£’000
21
(8)
13
There are no amounts included in the statement of cash flows relating to discontinued operations.
49
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OXFORD METRICS PLC ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2020
12. Goodwill and intangible fixed assets
Group
Cost
At 1 October 2019
Additions
Translation difference
At 30 September 2020
Amortisation
At 1 October 2019
Charge for the year
Impairment
Translation difference
At 30 September 2020
Net book value at 30 September 2020
Net book value at 30 September 2019
All development costs are internally generated.
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
Customer
relationships
£’000
Intellectual Development
property
£’000
costs
£’000
Goodwill
£’000
2,455
-
1
2,456
1,893
312
-
2
2,207
249
562
3,234
-
1
3,235
1,340
245
-
1
1,586
1,649
1,894
18,819
2,511
-
21,330
12,481
1,753
72
-
14,306
7,024
6,338
3,655
-
(26)
3,629
-
-
-
-
-
3,629
3,655
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
Total
£’000
28,163
2,511
(24)
30,650
15,714
2,310
72
3
18,099
12,551
12,449
Total
£’000
25,936
2,196
31
28,163
13,575
2,140
(1)
15,714
12,449
12,361
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
0-1 years
6-7 years
0-10 years
Indefinite
50
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OXFORD METRICS PLC ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2020
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
2019
£’000
2020
£’000
539
1,076
2,014
3,629
565
1,076
2,014
3,655
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 2021 and 30 September 2022.
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 £8.3m (2019: £13.5m); and
Yotta (previously known as Mayrise) exceeds its carrying amount by £26.5m (2019: £18.1m).
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 2022 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
2020
%
15.0
38.0
1.0
Peak
2019
%
12.2
45.2
1.0
IMU
2020
%
22.0
5.0
5.0
IMU
2019
%
12.4
34.4
11.2
Yotta
2020
%
11.0
15.0
4.0
Yotta
2019
%
12.2
6.5
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
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OXFORD METRICS PLC ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2020
14. Property, plant and equipment
Group
Cost
At 1 October 2019
Additions
Disposals
Translation differences
At 30 September 2020
Depreciation
At 1 October 2019
Charge for the year
Disposals
Translation differences
At 30 September 2020
Net book value at 30 September 2020
Net book value at 30 September 2019
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
Total
£’000
5,183
310
(450)
(21)
5,022
2,903
610
(417)
(11)
3,085
1,937
2,280
Total
£’000
5,113
467
(421)
24
5,183
2,617
621
(342)
7
2,903
2,280
2,496
Computers
and
equipment
£’000
Furniture
and Demonstration
equipment
£’000
fixtures
£’000
Leasehold
improvements
£’000
2,489
171
(221)
(10)
2,429
2,019
309
(215)
(7)
2,106
323
470
425
2
(3)
(1)
423
262
55
(3)
(1)
313
110
163
742
77
(28)
(10)
781
110
26
(2)
(3)
131
650
632
1,527
60
(198)
-
1,389
512
220
(197)
-
535
854
1,015
Computers
and
equipment
£’000
Furniture
and Demonstration
equipment
£’000
fixtures
£’000
Leasehold
improvements
£’000
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
2,251
231
(4)
11
2,489
1,708
308
(2)
5
2,019
470
543
52
260241 Oxford Metrics AR pp31-pp56.qxp 09/12/2020 13:07 Page 53
OXFORD METRICS PLC ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2020
Company
Cost
At 1 October 2019
Additions
Disposals
At 30 September 2020
Depreciation
At 1 October 2018
Charge for the year
Disposals
At 30 September 2020
Net book value at 30 September 2020
Net book value at 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
Computers
and equipment
£’000
214
11
(70)
155
177
18
(70)
125
30
37
Computers
and equipment
£’000
196
29
(7)
(4)
214
167
12
(2)
177
37
29
53
260241 Oxford Metrics AR pp31-pp56.qxp 09/12/2020 13:07 Page 54
OXFORD METRICS PLC ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2020
15. Leases
All leases comprise only fixed payments over the lease term.
Right of use assets
Group
At 1 October 2019
Additions
Depreciation
Translation differences
At 30 September 2020
Lease liabilities
Group
At 1 October 2019
Additions
Interest expense
Lease payments
Translation differences
At 30 September 2020
The maturity analysis of lease liabilities at 30 September 2020 is as follows:
Group
Up to 3 months
Between 3-12 months
Between 1-2 years
Between 2-5 years
Over 5 years
Land and
buildings
£’000
Motor
Vehicles
£’000
2,521
179
(523)
(19)
2,158
11
18
(5)
-
24
Land and
buildings
£’000
Motor
Vehicles
£’000
2,740
179
100
(688)
(19)
2,312
11
18
1
(7)
-
23
Total
£’000
2,532
197
(528)
(19)
2,182
Total
£’000
2,751
197
101
(695)
(19)
2,335
Lease
liabilities
£’000
12
32
124
205
1,962
2,335
The Group sometimes negotiates break clauses in its property leases. On a case by case basis, the Group will consider
whether the absence of a break clause would expose the Group to excessive risk. Typically, factors considered in deciding to
negotiate a break clause include:
•
•
The length of the lease term; and
The economic stability of the environment in which the property is located.
At 1 October 2019 and 30 September 2020 the carrying amount of lease liabilities are reduced by the amount of payments that
would be avoided from exercising break clauses because on both dates it was not considered reasonably certain that the
Group would not exercise its right to break the leases.
At 30 September 2020 the total future minimum sublease payments expected to be received under non - cancellable
subleases was £45,000 (2019: £89,000).
54
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OXFORD METRICS PLC ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2020
16.
Investments
Shares in subsidiary undertakings – cost
At 1 October as previously stated
Share based payment prior year adjustment
At 1 October as restated
Capital contribution
Impairment
At 30 September
Investment in associate – equity accounted
At 1 October
Share of post-tax loss of equity accounted associate
At 30 September
Other investments – cost and fair value
At 1 October
Addition
At 30 September
Total financial assets - investments
Group
2020
£’000
Group
2019
£’000
Company
2020
£’000
Company
2019
£’000
-
-
-
-
-
-
29
(29)
-
69
236
305
305
-
-
-
-
-
-
88
(59)
29
69
-
69
98
14,537
-
14,537
58
(98)
14,497
29
(29)
-
69
236
305
13,995
419
14,414
123
-
14,537
88
(59)
29
69
-
69
14,802
14,635
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
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
55
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OXFORD METRICS PLC ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2020
Name of entity
Principal activity
Vicon Motion Systems, Inc.* Sales, marketing and customer support
IMeasureU Limited*
Development and sale of computer
software and equipment
OMG, Inc.
Non trading company
IMeasureU, Inc.*
Development and sale of computer
software and equipment
Country of
incorporation
USA
New Zealand
USA
USA
IMeasureU Limited*
Sale of computer software and equipment
England
Oxford Metrics Limited
Non trading company
Ireland
Registered office
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 investments
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.
During the year ended 30 September 2020 the Company acquired 3% of the equity in a business start-up incorporated in the
US in return for a total consideration of $300,000 (£236,000). 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 2020 or 2019.
Investment in Associate
During the year ended 30 September 2017 the Company acquired 25% of the ordinary share capital of Pimloc Limited, an
equity accounted associate incorporated in England, whose registered office is 6 Oxford Industrial Park, Yarnton, Oxfordshire,
OX5 1QU.
56
260241 Oxford Metrics AR pp57-pp68.qxp 09/12/2020 13:08 Page 57
OXFORD METRICS PLC ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2020
17.
Inventories
Finished goods
Component parts
Group
2020
£’000
2,097
1,342
3,439
Group
2019
£’000
1,869
1,367
3,236
Company
2020
£’000
Company
2019
£’000
-
-
-
-
-
-
The cost of inventories recognised as an expense and included in cost of sales is £5,999,000 (2019: £7,298,000).
During the year £444,000 of inventories were impaired (2019: £53,000). Inventories written off and included within cost of sales
were £nil (2019:£58,000).
18. 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
2020
£’000
7,656
(110)
7,546
-
65
1,613
9,224
Group
2019
£’000
9,614
-
9,614
-
306
1,767
11,687
Company
2020
£’000
Company
2019
£’000
-
-
-
5,918
43
212
6,173
-
-
-
8,956
9
190
9,155
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 2020. 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
2020
£’000
6,319
123
2,567
60
155
9,224
Group
2019
£’000
6,582
245
4,705
35
120
11,687
Company
2020
£’000
Company
2019
£’000
6,173
-
-
-
-
6,173
9,074
-
-
81
-
9,155
57
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OXFORD METRICS PLC ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2020
Movements in the provision for impairment of trade receivables are as follows:
At 1 October
Credited during the year
At 30 September
Group
2020
£’000
-
110
110
Group
2019
£’000
Company
2020
£’000
Company
2019
£’000
-
-
-
-
-
-
-
-
-
The movement on the provision for impairment of trade receivables has been included in administrative expenses in the
income statement.
Other classes of financial assets included within trade and other receivables do not contain impaired assets.
The maximum exposure to credit risk at the reporting date is the fair value of each receivable set out above.
19. 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
2020
£’000
2,004
-
246
847
-
-
1,593
5,241
9,931
Group
2019
£’000
2,935
-
277
310
128
-
2,175
4,908
10,733
Company
2020
£’000
Company
2019
£’000
85
2,626
-
-
-
-
367
-
3,078
41
5,522
-
-
-
-
358
-
5,921
The contingent consideration payable in the prior year relates to the acquisition of IMeasureU Limited.
Amounts payable to Group undertakings are payable on demand and do not carry interest.
20. Financial instruments
The Group and Company's financial instruments comprise cash and short term deposits, debtors and creditors that arise
directly from its operations. The risks associated with these financial instruments and the Group's policies for managing those
risks are outlined below.
Interest rate risk of financial assets
Surplus cash funds are deposited with UK clearing banks on a short term basis for periods of less than three months. The
interest rates earned (all of which are variable throughout the year) are compared with those available from other financial
institutions of comparable credit status.
The rate of interest earned during the year on cash deposits was 0.19% (2019: 0.24%).
–––––––––––––––––––––––––––––––––––––––––––––––
Total
£’000
GBP Euro
£’000 £’000
AUS$
£’000
US$
£’000
NZ$
£’000
2020
2019
–––––––––––––––––––––––––––––––––––––––––––––
AUS$
Total
£’000 £’000
GBP
£’000
US$
£’000
Euro
£’000
NZ$
£’000
Group cash at
bank and in hand 10,979
186
3,550
79
146 14,940
9,533
319
3,829
109
47 13,837
58
260241 Oxford Metrics AR pp57-pp68.qxp 09/12/2020 13:08 Page 59
OXFORD METRICS PLC ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2020
All of the Company’s cash at bank and in hand in the current and prior year is held in GBP.
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 2020 would decrease by £20,000/increase by £77,000 (2019: decrease by £22,000/increase by £71,000).
There would be no impact on other equity reserves.
As disclosed in note 16 the Group has equity investments of £305,000 (2019: £69,000) denominated in Euros and US dollars.
These investments are 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 2020 the Group's cash and short term deposits amounted to £14,940,000 (2019: £13,837,000). 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 18.
The Group and Company are continually reviewing the credit risk associated with holding money on deposit in banks and seek
to mitigate this risk by spreading deposits between banks with high credit status.
Foreign currency risk
The Group’s foreign exchange transaction exposure arises principally in the UK subsidiaries from trading with US subsidiary
undertakings and third parties in Europe and the Far East. The Group’s policy is to reduce exposure to revaluation of monetary
assets and liabilities. Under the policy, assets and liabilities held in currencies other than a Company’s functional currency are
minimised through intercompany trading.
The Group considers the volatility of currency markets over the year to be representative of the potential foreign currency risk it
is exposed to. The main currency the Group’s results were exposed to at the year end was the US dollar and over the year the
volatility of this currency was 8.8% (2019: 8.2%). If Sterling had strengthened against the dollar at year end by 10% it would
have increased the Group profit by £272,000 (2019: increased Group profit by £213,000). If Sterling had weakened against the
dollar at year end by 10% it would have decreased the Group profit by £332,000 (2019: decreased Group profit by £260,000).
59
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OXFORD METRICS PLC ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2020
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
2020
––––––––––––––––––––––––––––––––––––––––––––––––––
Total
£’000
Sterling
£’000
Euro
£’000
US$
£’000
NZ$
£’000
-
4,084
(2,006)
(304)
-
(18)
(570)
-
-
209
-
-
(665)
4,084
(2,024)
––––––––––––––––––––––––––––––––––––––––––––––––––
Total
£’000
Sterling
£’000
Euro
£’000
US$
£’000
NZ$
£’000
2019
-
4,084
(1,211)
(2,175)
-
(17)
27
-
-
413
-
-
(1,735)
4,084
(1,228)
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 16);
Contingent consideration payable (note 19).
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.
In the prior year the contingent consideration payable on the purchase of IMeasureU Ltd has been discounted at a rate of 35%
and translated into Sterling at the spot rate at 30 September 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 at 30 September 2019. If the spot
rate at 30 September 2019 had increased by 10% the fair value of the deferred consideration payable at that date would have
decreased by £12,000 with a corresponding increase in the profit for the year ended 30 September 2019. If the spot rate at
30 September 2019 had decreased by 10% the fair value of the deferred consideration payable at that date would have
increased by £14,000 with a corresponding decrease in the profit for the year ended 30 September 2019.
60
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OXFORD METRICS PLC ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2020
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
2020
£’000
7,546
59
411
14,940
305
23,261
Group
2020
£’000
2,004
24
1,593
-
3,621
Group
2019
£’000
Company
2020
£’000
Company
2019
£’000
9,614
32
850
13,837
69
24,402
-
-
-
5,049
305
5,354
-
-
-
4,700
69
4,769
Group
2019
£’000
Company
2020
£’000
Company
2019
£’000
2,935
16
2,175
128
5,254
85
-
367
-
452
41
-
358
-
399
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.
61
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OXFORD METRICS PLC ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2020
21. 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 2018 230 (1,777) 143
Credited to the income statement (note 9) 43 (8) 20
Charged directly to equity 132 (12) 87
At 30 September 2019 405 (1,797) 250
Charged to the income statement (note 9) 560 (208) 12
Charged directly to equity 9 11 36
At 30 September 2020 974 (1,994) 298
-
-
-
-
-
-
-
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
Unrelieved losses carried forward
Short term timing differences
Recognised – liability
Recognition of intangible asset
Capital allowances in excess of depreciation
Group
2020
£’000
22
386
497
69
974
10
366
-
29
405
(523)
(1,471)
(1,994)
(582)
(1,215)
(1,797)
Group
2019
£’000
Company
2020
£’000
Company
2019
£’000
4
294
-
-
298
-
-
-
4
246
-
-
250
-
-
-
Deferred tax assets and liabilities have been measured on an undiscounted basis at an effective tax rate of 19% and 25%
(30 September 2019: 17% and 25%) in the UK and USA, respectively. As at 30 September 2020, the Group has un-provided
deferred tax assets of £861,000 arising on unrelieved trading losses for which recoverability is not certain (2019: £787,000).
The gross amount of these losses is £4,025,000 (2019: £3,962,000).
22. Other liabilities
Deferred income
Group
2020
£’000
609
Group
2019
£’000
462
Company
2020
£’000
Company
2019
£’000
-
-
The deferred income above relates to revenue from support contracts which cover a period of more than 12 months from
30 September 2020.
62
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OXFORD METRICS PLC ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2020
23. Provisions
At 1 October 2019
Credited to income statement – leasehold dilapidations
At 30 September 2020
Group Company
£’000 £’000
16
8
24
-
-
-
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.
24. Share capital
Allotted, called up and fully paid
125,734,658 shares of 0.25p (2019: 125,138,130 shares of 0.25p)
2020 2019
£’000 £’000
314
313
During the year ended 30 September 2020 568,279 shares (2019: 197,194 shares) were issued relating to share options that
were exercised. In addition 28,249 shares (2019: 35,461 shares) were issued to the non-executive chairman, Roger Parry, in
satisfaction of salary.
At 30 September 2020 options were outstanding over 4,681,000 ordinary shares of 0.25p each (2019: 5,289,278) including
those held by directors as follows:
Number of shares
over which options granted
1,800,000
50,000
2,831,000
Exercise price
Exercise period
0.00p
33.12p
59.06p
December 2019 to December 2026
March 2015 to March 2022
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 2020 was 82.50p (2019: 89.00p) and the range during the year was
71.00p to 125.50p (2019: 64.00p to 98.49p). Shares to be issued are detailed in the Statement of Changes in Equity.
25. 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.
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OXFORD METRICS PLC ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2020
A reconciliation of option movements over the year to 30 September 2020 is shown below:
Outstanding at 1 October
Exercised
Forfeited
Outstanding at 30 September
Exercisable at 30 September
2020
––––––––––––––––––––––––
Weighted
average
exercise
price
(pence)
Number
‘000
2019
–––––––––––––––––––––––
Weighted
average
exercise
price
(pence)
Number
‘000
5,289
568
40
4,681
2,956
38.45
56.60
59.06
36.07
40.64
5,901
197
415
5,289
1,799
39.74
33.77
59.06
38.45
57.56
The weighted average share price at the date of exercise for options exercised during the year ended 30 September 2020 was
97.58p (2019: 83.26p).
Share options outstanding at the year end
Range of
exercise
prices
(pence)
0.00
33.12
35.43
59.06
2020
2019
–––––––––––––––––––––––––––––––––––– ––––––––––––––––––––––––––––––––––––
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
-
2,831
6
1
-
7
0.00
33.12
35.43
59.06
1,800
50
59
3,380
7
2
5
8
The total charge for the year relating to employee share based payment plans was £135,000 (2019: £264,000), all of which
related to equity-settled share based payment transactions.
There were no options granted in the year ended 30 September 2020 or 30 September 2019.
Details of directors’ interests in share options are shown in the Report on Remuneration.
26. Movement in reserves
The movement in reserves are disclosed fully within the Consolidated and Company Statement of Changes in Equity on
page 29. 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.
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OXFORD METRICS PLC ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2020
27. Pensions
The Company operates a defined contribution pension scheme for the benefit of the UK employees. The assets of the scheme
are administered by trustees in a fund independent from those of the Group. The amount charged under this scheme to the
income statement during the year was £534,000 (2019: £504,000).
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 £73,000 (2019: £78,000).
28. Government grants
During the year £163,000 (2019: £202,000) of Government grants were recognised in the income statement. These grants
significantly relate to funding for research projects.
There are no unfulfilled conditions or other contingencies attached to the government grants recognised in the current or prior
periods.
29. Dividends
Equity – ordinary
Final 2018 paid in 2019 (1.50 pence per share)
Special paid in 2019 (1.00 pence per share)
Final 2019 paid in 2020 (1.80 pence per share)
2020
£’000
-
-
2,253
2,253
2019
£’000
1,875
1,250
-
3,125
The directors are proposing a final dividend in respect of the financial year ended 30 September 2020 of 1.80 pence per share
(2019: 1.80 pence per share) which will absorb an estimated £2,263,000 of shareholders’ funds. This dividend will be paid on 5
March 2021 to shareholders who are on the register of members at close of business on 11 December 2020 subject to
approval at the AGM. These dividends have not been accrued in these financial statements.
30. Related party transactions
The key management personnel are deemed to be the directors. During the year short term employee benefits of £1,013,000
(2019: £898,000) were paid to the directors. In addition share based payments of £69,000 (2019: £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 Limited (formerly Mayrise Limited)
Mayrise Systems Limited
IMeasureU (NZ) Limited
IMeasureU Inc.
OMG Inc.
Outstanding balances
2019
£’000
2020
£’000
Transactions in year
2019
£’000
2020
£’000
1,068
(1,331)
4,850
-
-
-
(1,295)
3,292
5,506
(1,924)
3,442
-
-
8
(3,598)
3,434
(4,438)
593
1,408
-
-
(8)
2,303
(142)
(4,419)
(2,588)
(2,250)
123
(74)
8
2,873
(6,327)
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 £2,583,000 (2019: £2,536,000). Other transactions
arise from treasury cash management between the Company and its subsidiaries.
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OXFORD METRICS PLC ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2020
In accordance with IFRS 9 all balances are stated at amortised cost. The amount receivable from IMeasureU (NZ) Ltd is stated
net of a provision of £209,000 (2019: £155,000) and the amount receivable from IMeasureU Inc. is stated net of a provision of
£50,000 (2019: £nil).
There are also balances due from OMG Life Limited of £2,222,000 (2019: £2,222,000) and IMeasureU (UK) Ltd of £44,000
(2019: £nil) which are fully impaired. The amount recognised as a credit in the year in respect of provisions against receivables
from related parties was £147,000 (2019: £244,000).
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 £nil (2019: £24,000) to recover costs paid by Oxford Metrics plc on their
behalf. At the year end the balance outstanding was £nil (2019: £nil).
Dividends received by directors of the Company during the year were as follows:
Roger Parry
Jonathon Reeve
Adrian Carey
David Quantrell
Nick Bolton
David Deacon
Catherine Robertson
2020
£’000
2019
£’000
5
-
4
1
43
21
26
6
1
5
-
60
29
36
31. Changes in accounting policies
The Group has adopted IFRS 16 with the date of initial application being 1 October 2019.
Effective 1 January 2019, IFRS 16 has replaced IAS 17 ‘Leases’ and IFRIC 4 ‘Determining whether an Arrangement Contains a
Lease’.
The Group adopted IFRS 16 using the modified retrospective approach without restatement of comparative figures. The Group
elected to apply the practical expedient to not reassess whether a contract contains a lease at the date of initial application.
Contracts entered into before the transition date that were not identified as leases under IAS 17 and IFRIC 4 were not
reassessed. The definition of a lease under IFRS 16 was applied only to contracts entered into on or after 1 October 2019.
IFRS 16 provides for certain optional practical expedients, including those related to the initial adoption of the standard. The
Group applied the following practical expedients when applying IFRS 16 to leases previously classified as operating leases
under IAS 17:
•
Applied the exemption not to recognise right of use assets and liabilities for leases with less than 12 months of lease
term remaining.
As a lessee, the Group previously classified leases as operating or finance leases based on its assessment of whether the
lease transferred substantially all of the risks and rewards of ownership. Under IFRS 16, the Group recognises right-of-use
assets and lease liabilities for most leases. However, the Group has elected not to recognise right-of-use assets and lease
liabilities for some leases of low value assets based on the value of the underlying asset when new or for short-term leases
with a lease term of 12 months or less.
On adoption of IFRS 16, the Group recognised right-of-use assets and lease liabilities in relation to leases of business
premises and vehicles, which had previously been classified as operating leases.
The lease liabilities were measured at the present value of the remaining lease payments, discounted using the relevant
incremental borrowing rate as at 1 October 2019. The Group’s incremental borrowing rate is the rate at which a similar
borrowing could be obtained from an independent creditor under comparable terms and conditions. The weighted-average
rate applied was 4.06%.
The right-of-use assets were measured at an amount equal to the lease liability, adjusted by the amount of any prepaid or
accrued lease payments.
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OXFORD METRICS PLC ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2020
The following table presents the impact of adopting IFRS 16 on the Statement of Financial Position at 1 October 2019:
Right of use assets
Lease liabilities
Accruals (included in trade and other payables)
30 September
2019 as
originally
presented
£’000
Effect of
IFRS 16
£’000
1 October
2019
£’000
-
-
(2,175)
2,532
(2,751)
219
2,532
(2,751)
(1,956)
The following table reconciles the minimum lease commitments disclosed in the Group’s Annual Financial Statements at 30
September 2019 to the amount of lease liabilities recognised on transition at 1 October 2019:
Minimum operating lease commitment at 30 September 2019
Additional lease commitments recognised under IFRS 16
Less short-term leases not recognised under IFRS 16
Undiscounted lease payments
Effect of discounting using the incremental borrowing rate at the date of initial application
Lease liabilities recognised at 1 October 2019
£’000
2,444
754
(16)
3,182
(431)
2,751
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OXFORD METRICS PLC ANNUAL REPORT 2020
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)
Adrian Carey (Non-executive Director)
David Quantrell (Non-executive Director)
Nick Bolton (Chief Executive Officer)
David Deacon (Chief Financial Officer)
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
Numis Securities Limited
10 Paternoster Square
London
EC4M 7LT
Link Group
The Registry
34 Beckenham Road
Beckenham
Kent
BR3 4TU
BDO LLP
Level 12, Thames Tower
Station Road
Reading
Berkshire
RG1 1LX
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Notice of Annual General Meeting
This document is important and requires your immediate attention. If you are in any doubt as to what action to take
you are recommended to consult your stockbroker, solicitor, accountant or other independent adviser authorised
under the Financial Services and Markets Act 2000
If you have sold or transferred all of your ordinary shares in Oxford Metrics plc, you should pass this document, together with
the accompanying form of proxy, to the person through whom the sale or transfer was made for the transmission to the
purchaser or transferee.
In the context of the health emergency linked to the COVID-19 pandemic, and in order to protect the health and the
safety of its employees and shareholders, the Board of Directors has decided to hold the 2021 annual general meeting
behind closed doors. Therefore, exceptionally, the annual general meeting will be held at the company’s registered
offices on Thursday 18 February 2021 with the minimum number of shareholders present as required to form a quorum
under the Company’s articles of association. The shareholders in attendance will be directors of the Company, subject
to social distancing measures in line with current government guidelines. To ensure safety, other shareholders will not
be able to gain access to the meeting.
Shareholders are invited to vote on the Resolutions to be put to the meeting by granting a proxy to the chair of the
meeting, using the Form of Proxy that follows this notice of AGM. There will be no other method of voting.
As the annual general meeting will be held behind closed doors, there will be an AGM webpage on the company’s
website oxfordmetrics.com/agm2021 where members can register to gain access to a special AGM Q&A webpage
where questions can be put, and questions and answers can be viewed. The directors of the company will endeavour
to provide answers to questions, and both questions and answers will be published on the AGM Q&A webpage for 7
days following the 2021 AGM. We will not publish any personal details including the name of any member who has
asked a question.
Oxford Metrics Plc
Notice of annual general meeting
Notice of the annual general meeting which has been convened for 18 February 2021 at 5pm at Oxford Metrics plc, 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 Group, 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 2021 annual general meeting of Oxford Metrics plc (the “Company”) will be held behind closed
doors at 6 Oxford Industrial Park, Yarnton, Oxfordshire, OX5 1QU on 18 February 2021 at 5pm 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 2020 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 2020.
To re-elect Nick Bolton 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 David Deacon who retires by rotation in accordance with the Company’s articles of association and offers
himself for re-appointment by general meeting, as a director of the Company.
To re-elect Adrian Carey who retires by rotation in accordance with the Company’s articles of association and offers
himself for re-appointment by general meeting, as a director of the Company.
Special business
As special business to consider and, if thought fit, pass resolution 7 as an ordinary resolution and resolutions 8 and 9 as
special resolutions. For special resolutions to pass, at least three-quarters of the votes cast must be in favour of the resolution.
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7.
8.
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
£104,779. 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 17 February 2026, 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.
Special Resolution. That, subject to the passing of resolution 7 above, the directors be and are hereby generally and
unconditionally given power for the purposes of section 570 of the Act to allot equity securities (within the meaning of
section 560 of the Act and to include the sale of treasury shares as referred to in section 560(3) of the Act) for cash
pursuant to the authority conferred by resolution 7 above, in each case as if section 561 of the Act did not apply to any
such allotment, provided that this power shall be limited to:
(a) the allotment of equity securities in connection with an offer or pursuant to a rights issue, open offer or other
prorate 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 £31,434.
This power shall (unless previously renewed, varied or revoked by the Company in general meeting) expire on 17
February 2026, 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 12,573,466
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)
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
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(ii)
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 2020
Registered office: 6 Oxford Industrial Park, Yarnton, Oxfordshire, OX5 1QU
The notes on voting procedures, together with explanatory notes on the resolutions to be put to the meeting, which follow,
form part of this notice.
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Notes:
1.
2.
3.
4.
5.
6.
7.
Only holders of Ordinary Shares are entitled to vote on the matters to be considered at this meeting. Aside from the
director members forming the quorum, no member will be allowed to attend the meeting in person and all voting will be
by proxy.
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 Group, 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.
CREST members who wish to appoint a proxy or proxies by utilising the CREST electronic proxy appointment service
may do so for the Meeting and any adjournment(s) of it by using the procedures described in the CREST Manual
(available from https://www.euroclear.com/site/ public/EUI). CREST Personal Members or other CREST sponsored
members, and those CREST members who have appointed a voting service provider(s), should refer to their CREST
sponsor or voting service provider(s), who will be able to take the appropriate action on their behalf. In order for a proxy
appointment made by means of CREST to be valid, the appropriate CREST message (a CREST Proxy Instruction) must
be properly authenticated in accordance with Euroclear UK & Ireland Limited's (EUI) specifications and must contain the
information required for such instructions, as described in the CREST Manual. The message must be transmitted so as to
be received by the issuer's agent (ID: RA10) by 5.00pm on 16 February 2021. For this purpose, the time of receipt will be
taken to be the time (as determined by the timestamp applied to the message by the CREST Applications Host) from
which the issuer's agent is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST.
CREST members and, where applicable, their CREST sponsors or voting service providers should note that EUI does not
make available special procedures in CREST for any particular messages. Normal system timings and limitations will
therefore apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member
concerned to take (or, if the CREST member is a CREST personal member or sponsored member or has appointed a
voting service provider(s), to procure that his CREST sponsor or voting service provider(s) take(s)) such action as shall be
necessary to ensure that a message is transmitted by means of the CREST system by any particular time.
In this connection, CREST members and, where applicable, their CREST sponsors or voting service providers are
referred, in particular, to those sections of the CREST Manual concerning practical limitations of the CREST system and
timings. The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5) (a)
of the Uncertificated Securities Regulations 2001
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 16 February 2021 shall be
entitled to vote on the matters to be considered 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 16
February 2021 shall be disregarded in determining the rights of any person to vote by proxy at the meeting.
Copies of the service agreements of the executive directors and the letters of appointment of the non-executive
directors, are under normal circumstances 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 also 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. Should a shareholder wish to view any of these
documents, please make a request by email to cathy.robertson@oxfordmetrics.com.
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 0371 664 0300 (Calls are charged at the standard geographic rate and will vary
by provider) 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.
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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 11 December 2020. If approved, the date of payment of the final dividend will be 5 March 2021.
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.
At this meeting, Nick Bolton, David Deacon and Adrian Carey will retire and stand for re-election as directors. Having
considered the performance of and contribution made by each of the directors standing for re-election the board remains
satisfied that the performance of each of the relevant directors continues to be effective and to demonstrate commitment to
the role and, as such, recommends their re-election.
Directors’ authority to allot securities (Resolution 7)
Your directors may only allot shares or grant rights over shares if authorised to do so by shareholders. The authority granted at
the last annual general meeting will expire on the passing of this resolution or, if it is not passed, on 12 February 2025. 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 £104,779. As at 3 December 2020, the Company did not hold
any shares in treasury. If the resolution is passed, the authority will expire on 17 February 2026 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 12,573,466 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 17 February 2026.
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.
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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 2022 or, if earlier, the date which is
15 months after the date of passing of the resolution. The directors intend to seek renewal of this power at subsequent annual
general meetings.
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Form of Proxy
In the context of the health emergency linked to the COVID-19 pandemic, and in order to protect the health and the
safety of its employees and shareholders, the Board of Directors has decided to hold the 2021 annual general meeting
behind closed doors. Therefore, exceptionally, the annual general meeting will be held at the company’s registered
offices on Thursday 18 February 2021 with the minimum number of shareholders present as required to form a
quorum under the Company’s articles of association. The shareholders in attendance will be directors of the
Company, subject to social distancing measures in line with current government guidelines. To ensure safety, other
shareholders will not be able to gain access to the meeting.
Shareholders are invited to vote on the Resolutions to be put to the meeting by granting a proxy to the chair of the
meeting, using the Form of Proxy that follows this notice of AGM. There will be no other method of voting.
As the annual general meeting will be held behind closed doors, there will be an AGM webpage on the company’s
website oxfordmetrics.com/agm2021 where members can register to gain access to a special AGM Q&A webpage
where questions can be put, and questions and answers can be viewed. The directors of the company will endeavour
to provide answers to questions, and both questions and answers will be published on the AGM Q&A webpage for 7
days following the 2021 AGM. We will not publish any personal details including the name of any member who has
asked a question.
Notes for completion of the proxy form for the 2021 annual general meeting
1.
2.
3.
4.
As a member of the Company, in normal circumstances, 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. However, for the 2021
AGM your proxy will only have the right to vote on your behalf. You must follow the appointment procedures set out in
these notes.
You must appoint the chair of the meeting as your proxy if you wish to vote on any of the resolutions to be put to the
meeting.
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.
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.
5.
To be valid, this proxy form must be:
(a)
(b)
(c)
completed and signed;
sent or delivered to Link Group, PXS 1, 34 Beckenham Road, Beckenham BR3 4ZF; and
received by Link Group, 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).
6.
7.
8.
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9.
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.
10. Any alterations made to this form should be initialled
11. 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 Group on telephone number 0371 664 0300 (Calls are
charged at the standard geographic rate and will vary by provider) or, if calling from overseas, on +44 371 664 0300. Lines are
open 9.00am – 5.30pm, Monday to Friday.
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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
18 February 2021. 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 chair of the meeting as my/our proxy (see note 2)
...........................................................................................................................................................................................................
to vote for me/us on my/our behalf at the annual general meeting of the Company to be held on 18 February 2021 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 2020
#
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 Nick Bolton as a director
5. To re-elect David Deacon as a director
6. To re-elect Adrian Carey as a director
Special business
7. To authorise the directors to allot shares pursuant
to section 551 of the Companies Act 2006 (the “Act”)
8. To authorise the directors to allot shares pursuant to
section 570 of the Act as if section 561 of the
Act did not apply
9.
To authorise the Company to make one or more
market purchases of ordinary shares in the company
Signature(s) ...................................Date ...................2021
Signature(s) ....................................Date .........................2021
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Please return in envelope supplied
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OXFORD METRICS PLC
ANNUAL REPORT AND
FINANCIAL STATEMENTS
FOR THE YEAR ENDED
30 SEPTEMBER 2020
COMPANY NO 03998880
Perivan 260241