Imogen , if the Vicon business is still the world leader and is going to regain its former heights this is the opportunity of a lifetime to buy back stock at an incredibly cheap valuation . Don't dabble around with daily buybacks , make a thumping tender offer at a small premium (55-60p) and retire as many shares as you can in a hurry . £20 million on a tender offer would still leave room to do another acquisition in the smart manufacturing business but I honestly believe the value in your own shares is far superior to anything that you will find in an acquisition |
 Update from Simon T:
Oxford Metrics: Cash-rich software stock makes smart moves
Aim: Share price: 57.5p
Bid-offer spread: 57-58p
Market value: £72.8mn
Net cash equates to more than half the market capitalisation
Prospective dividend yield of 6.4 per cent
Earnings recovery forecast in 2025-26 financial year
Oxford Metrics (OMG), the smart sensing software company servicing life sciences, entertainment and engineering markets, downgraded earnings guidance last autumn.
The issue is that customers are being more cautious, which has lengthened buying cycles and pushed several opportunities in the sales pipeline into the 2025 financial year. In particular, the entertainment sector has been impacted by the slowdown in the global games industry and subsequent contraction in content creation. The segment reported 23 per cent lower annual revenue of £15.9mn, representing 38 per cent of the group total. Both the life sciences and engineering segments, accounting for 56 per cent of Oxford Metrics’ annual revenue, performed better but still reported single-digit revenue declines due to delays in academic funding.
As a result, last year’s revenue of £41.5mn was well below 2023's figure of £44.2mn. Moreover, the revenue shortfall had an accentuated impact on earnings because Oxford Metrics is a high-margin business that boasts a gross margin of 66 per cent. In fact, pre-tax profit halved from £7.5mn to £3.7mn, albeit the group was up against a tough comparable in the prior year. The share price has performed poorly since I included the shares in my portfolio last year. That said, there is recovery potential.
Catalysts for recovery
Industrial Vision Systems (IVS), a specialist in developing machine vision software systems acquired by the group 15 months ago, has closed several deals worth more than £1.3mn in sales, which has contributed to a healthy order book. Oxford Metrics’ smart manufacturing division has made a good start to the new financial year, too, having made a maiden £2.9mn revenue contribution in the 2024-25 financial year.
Also, the directors highlight progress in markerless technology, a key area of future growth. Ahead of commercial launch in the current financial year, three more blue-chip partners have entered the beta testing programme to take the total to 10 cornerstone customers.
The board is also deploying the group’s net cash (pre-IFRS 16 leases) of £50.7mn to make earnings-accretive bolt-on acquisitions. Post the 2024 financial year-end, Oxford Metrics acquired Gloucester-based The Sempre Group, a measurement specialist that helps blue-chip manufacturers across the aerospace, automotive, medical, energy and precision engineering sectors to be more efficient and improve quality. Sempre was purchased for £5.5mn, representing a reasonable multiple of eight times the 2023 pre-tax profit of £0.7mn.
So, after factoring in a maiden operating profit contribution from Sempre, a doubling of IVS operating profit to £0.6mn, £1.6mn of interest income and a small rise in central overheads, analysts at Progressive Equity Research expect adjusted pre-tax profit to edge up to £3.8mn on 13 per cent higher revenue of £47.9mn in the 12 months to 30 September 2025. On this basis, the shares are rated on a forward price/earnings (PE) ratio of 22.
However, that rating is inflated due to the bumper cash pile. After factoring in a £6mn ongoing share buyback programme and settling the Sempre acquisition, analysts expect net cash of £38.3mn (pre-IFRS 16 lease liabilities) at the 2025 financial year-end (30 September 2025), a sum that equates to 52 per cent of the current market capitalisation.
On this basis, Oxford Metrics’ enterprise valuation equates to 15.6 times bottom-of-the-cycle operating profit estimates of £2.2mn for the current financial year, and 9.9 times next year’s forecasts, a rating that fails to reflect the earnings recovery potential. Buy. |
Is anyone on here planning to go to the AGM tomorrow? Last year, they issued an AGM TU so I guess we'll see the same again. |
OMG are on the Mello show tonight...
Join us for MelloMonday on tonight at 5.30pm.
The programme for the evening is as follows:
5:30pm Company Presentation from Time Finance plc
6pm Company Presentation from React Group plc
6:30pm Educational Presentation
6:45pm Company Presentation from Hercules Site Services plc
7:15pm BASH (Buy, Avoid, Sell, Hold) Panel featuring Mark Simpson (OMG) and Damian Cannon (SAAS)
For more information, click here:
There are lots of interesting sessions and all annual pass holders and individual ticket holders will be sent a recording of the show within 48 hours of registering. For half price tickets, use code MMSTOCKO50. |
Steven English piece on Vox Markets seems to have moved the dial https://www.youtube.com/live/zy1jvIWMcP8?si=LOMCQs5PglxRVwb1From 32.40 Seems to have bounced off the years low |
A better morning, but the sell off seems to come in the afternoons |
FYI Techinvest's January issue had OMG as a Buy. It concludes thus, noting the £59.7m or 45p per share of cash:
"While sales conversion rates in the final month of the year were below historical levels, the entertainment segment was affected most, reflecting the slowdown in the global games industry and subsequent content creation contraction.
Nevertheless, the board confirmed that trading in the new financial year had started in line with management expectations and with a continued focus on delivering cost and efficiency gains. New products are in the pipeline to stimulate growth and this includes the Markerless technology which the company has identified as a major driver of Vicon sales in the medium term. Markerless is in the final
stages of commercialisation and is expected to make a modest revenue contribution in fiscal 2025.
Alongside Vicon, Oxford Metrics now has two other smaller divisions, both acquired over the last twelve months. Industrial Vision Systems is a specialist in machine vision software and technology for high precision, automated quality control systems, while recent acquisition Sempre is a world leader in motion measurement
analysis. With these acquisitions Oxford Metrics has broadened its product offering and created a platform for new areas of growth, which the group’s cash-rich balance sheet can help fund.
Broker consensus forecast is for net profit of £3.23m and earnings per share of 2.6p for fiscal2025, rising to £4.1m and 3.3p respectively for fiscal 2026.
Trading on a cash adjusted P/E of 4.3 for the current year, we feel that the shares
are well placed for recovery as trading at Vicon returns to more normalised patterns. Buy" |
No idea. But everyday is a red day constantly. The BB kind worked and the price climbed back to 56p |
Who do think?Worth remembering that Nick Bolton alone had 2.5m left. They bought back 65k yesterday...G. |
Last year Vicon made an adjusted pbt of £5m. The year before it was £9m. It's clearly a valuable business. |
Persistent seller |
Assistant seller |
At this point Vicon is being attributed a value of 0 by the market ....46m year end cash , plus the two unrelated businesses they bought for ~14m gets you the whole market cap now ...If AI is going to make video games it still needs good data .. if you want to accurately reflect Ronaldo moving in a football game/obi wan Kenobi fighting droids with a light sabre you need motion capture to produce the highest fidelity reproductions . And there's a vast array of other uses which definitely need to capture the movement of the actual thing , be it for sports performance , drones , life sciences etc . Wouldn't be so naive as to think there's not a big profit warning coming but even if you write off Vicon as worthless , aren't the shares already priced right ? |
AGM is 19th February, may get update then..... |
The problem is for two years now the money from the yatto sale has just sat there and profits have gone down due to a poor order book. Now the money is going down too. |
They can go as low as possible whilst the seller is outdoing the buy backs and no institutions are investing. Although there would be point people might pile in when they feel it's a bargain |
Surely these can't go any lower, 46 million in cash, they could do a transformational acquisition with that or some vulture will buy these out......who's selling? |
Just rereading over the last results again. £46 million cash, although the buy backs will eat into that. Big drop in profits from fy23, hence the cautiousness here of investors. Need another update here to assess |
Own up, who's selling? |
The buybacks I think had made an impact in lifting the price slightly, however the communist government current economics are bringing down the whole market |
Last 5 years revenue at Vicon 22 , 27, 29 , 44 , 39 . You could take from that Vicon is a shrinking business , or that 2023 was an exceptional year as companies overstocked in a supply chain crisis and this is still a growth business . If you take the cash at year end , and the newly acquired business in a different industry being worth what they were recently acquired for , you're attributing almost no value to a 39m pound revenue , high gross margin , IP rich world leader in a growing field . AI is as much of an opportunity as a threat imo, as it makes data from motion capture more useful . The downside is very limited from here , the upside from a recovery at Vicon spectacular . Too much doom and gloom on AIM is setting us up for an amazing decade ... |
From the Small Cap Newsletter Oxford Metrics finally get round to presenting to individual shareholders via the InvestorMeetCompany platform a week after releasing their results. Of the 10 or so questions that SCLers reported asking on the call, only one was answered and that only partially. What little confidence remained in the new management team isn't so much ebbing away as flooding out. Unsurprisingly, the share price joined the receding tide. |
Results look OK. Divi up |
Lack of interest currently and a seller I think |
Customisable watchlists with full streaming quotes from leading exchanges, such as LSE, NASDAQ, NYSE, AMEX, Bovespa, BIT and more.
Hot Features
Premium
