Oxford Metrics Share Discussion Threads

[nakedmolerat] 12/12/2024 09:49

Ex-div date 12 Dec 2024 (Thu)

[lennonsalive] 12/12/2024 08:46

Why the drop this morning?

[simon gordon] 11/12/2024 16:34

PI World - 11/12/24:

Talking Tech – Episode 13: Oxford Metrics (OMG) & FD Technologies (FDP)

[chrisdgb] 11/12/2024 08:20

Hoping for a decent recovery here into 25'.......

[rambutan2] 05/12/2024 20:56

From city Wire today:

Oxford Metrics (OMG), the developer of smart sensors, is making ‘operational progress’ despite cyclical challenges, says Deutsche Numis.

Analyst Tintin Stormont retained her ‘buy’ recommendation and increased the target price from 95p to 110p on the stock, which rose 2.8% to 59.8p yesterday, but has tumbled 44.6% in 2024 to date.

Full-year 2024 revenues came in 6% lower at £41.5m year-on-year, with profit before tax falling to £3.7m from £7.5m the year before. Stormont said that all the figures were ‘slightly above our revised expectations’ after the September warning of over-extended buying cycles.

‘As expected, entertainment has been impacted the most, reflecting the widely reported slowdown in the global games industry and subsequent content creation contraction,’ said Stormont.

‘Engineering and life sciences were also impacted, reflecting delays in academic funding. The group ended the period with just over £50m of cash. Post period-end the group announced a return of cash of £6m via a share buyback.’

[mirabeau] 05/12/2024 16:50

Commenting on the results Imogen O'Connor, Chief Executive said: "Against an exceptionally strong prior year comparator where our teams delivered more camera systems than ever before, the trend of extended buying really developed in September - historically our busiest month - impacting the overall result today. While conversion rates in the final month of the year were below historical levels, our Entertainment segment was affected most, reflecting the slowdown in the global games industry and subsequent content creation contraction. Geographically, UK and Europe tracked ahead with North America and APAC behind FY23.



Our teams have been working hard as we look to commercialise markerless - the future of our industry with Vicon setting the gold standard. Commercial delivery is in final stages and set to contribute modest revenue including annual recurring revenue in FY25.



Positioning the business for future success we have also extended our capabilities into a new growth area this year, establishing a presence in smart manufacturing. Having secured Industrial Vision Systems our first acquisition, we were delighted to welcome measurement specialists, Sempre into Oxford Metrics, post period end. With a strong balance sheet, we're well placed to capture more of this growth market as inspection automation becomes mainstream and smart manufacturing becomes the standard.



FY25 trading has started in line with management expectations with a continuation of the normalised buying behaviour and trading patterns seen in the latter part of FY24. With a continued focus on cost, efficiency and reallocating resources to high-impact areas, we are positioning the business for success in 2025 and beyond."

[sev22] 05/12/2024 10:24

Analysts are being too cautious with this software stock.

Earnings downgrade hurts the smart sensing and software group, but it’s still well placed to recover.

Published on December 3, 2024
by Simon Thompson

*Full-year revenue down 6 per cent to £41.5mn
*Adjusted pre-tax profit halved to £3.7mn
*Underlying earnings per share (EPS) down from 5.3p to 3p
*Dividend per share up 18 per cent to 3.25p
*Closing net cash of £50.7mn (39p)
*5.5 per cent dividend yield

Smart sensing and software group Oxford Metrics (OMG:59.5p) issued a profit warning at the end of its financial year, so the sharp fall in profits had been well flagged (‘Oxford Metrics’ warning hits shares – but all is not lost’, 23 September 2024).

The issue is that customers are being more cautious, which has lengthened buying cycles and pushed several opportunities in the sales pipeline into the new financial year. In particular, the entertainment sector was impacted by the slowdown in the global games industry and subsequent contraction in content creation. The segment reported 23 per cent lower 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.

So, although revenue was at the top of the revised £40mn-£42mn range in the 12 months to 30 September 2024, it was still well below last year’s revenue of £44.2mn. The impact on earnings was accentuated because Oxford Metrics is a high-margin business that generates a gross margin of 67 per cent, a contributory factor behind the 51 per cent decline in adjusted pre-tax profit to £3.7mn on 6 per cent lower annual revenue.

Prospects for the new financial year.

Industrial Vision Systems (IVS), a specialist in developing machine vision software systems that was acquired 13 months ago, has closed several large deals worth more than £1.3mn in sales, which has contributed to a healthy order book. The group’s smart manufacturing division has made a good start, too, having made a maiden £2.9mn revenue contribution in the 2024-25 financial year.

In addition, the board is deploying the group’s bumper cash pile to make earnings-accretive bolt-on acquisitions. The recent acquisition of Gloucester-based The Sempre Group, a measurement specialist that helps blue-chip manufacturers be more efficient and improve quality, looks like a smart deal (‘This company's recovery potential is severely underrated’, 4 November 2024). It is part of Oxford Metrics' drive into smart manufacturing and offers synergies with IVS.

Sempre offers a range of bespoke metrology solutions to address quality and automation challenges in the aerospace, automotive, medical, energy and precision engineering sectors. For instance, its technology is used to measure the wingspans for aircraft and precision of bone screws and joint implants. Sempre was purchased for £5.5mn, representing a reasonable multiple of eight times the 2023 pre-tax profit of £0.7mn.

Impact on forecasts.

Although analysts at Deutsche Numis see some encouraging pockets of activity, they feel it is prudent to reflect more caution in their forecasts until there is more consistent demand recovery.

So, even after factoring in a maiden £0.8mn operating profit contribution from Sempre, a doubling of IVS operating profit to £0.6mn, £1.5mn of interest income and a £0.3mn rise in central overheads to £3.8mn, the brokerage only expects adjusted pre-tax profit to edge up to £3.9mn (17 per cent downgrade) on 15 per cent higher revenue of £47.9mn in the 12 months to 30 September 2025. Expect net cash of £46.7mn (30 November 2024) to fall to £41.8mn (30 September 2025) after factoring in a £6mn share buy-back programme and the Sempre acquisition.

The downgrade is disappointing, but it’s already factored into the valuation as the group’s enterprise valuation of £30mn equates to 12.5 times the bottom-of-the-cycle operating profit estimates of £2.4mn for the new financial year.

Indeed, Deutsche Numis’s target price of 95p (from 110p) still supports 61 per cent share price upside. Moreover, shareholders will be pressing management to deploy more of the cash pile on bolt-on acquisitions, so there is scope for mergers and acquisition-driven upgrades as the year progresses. I certainly would not be selling out the high-yielding shares at this depressed level. HOLD.

[wololol] 03/12/2024 16:23

Hannah Gibson linkedin just nowI'm excited to share that we've hit a new record peak of 500,000 orders per week! It's a real privilege to provide the weekly shop to half a million households - that's a lot of customers who have filled their fridges and cupboards, and fed their families, with the food we delivered straight to their doors last week.We couldn't have achieved this without the support of our amazing partners, suppliers and colleagues who work tirelessly to ensure we can continue to deliver unbeatable choice, unrivalled service and reassuringly good value for our customers - so THANK YOU!And of course... we celebrated with food. Thanks Biscuiteers for the special biscuits! Onto the next 500,000....

[lennonsalive] 03/12/2024 14:32

Simon Thompson will put out another review soon no doubt

[cellars] 03/12/2024 13:33

I wonder if some sales have been deferred pending commercial availability of Markerless??

[lennonsalive] 03/12/2024 08:27

These are unaudited as well

[lennonsalive] 03/12/2024 07:28

OMG reported FY24 revenue of £41.5m, down 6% YOY, and adjusted PBT of £3.7m, down 51%. Net cash at £50.7m. H2 impacted by delayed purchases. Dividend up 18%.

[boystown] 04/11/2024 17:09

Tipped by Simon Thompson today:

This company's recovery potential is severely underrated

- £5.5mn earnings-accretive acquisition
- £6mn share buy-back programme
- Rated on eight times operating profit estimates to enterprise valuation

Shares in smart sensing and software group Oxford Metrics (OMG: 59.5p) have yet to react to the smart-looking acquisition of Gloucester-based The Sempre Group, a measurement specialist that helps blue-chip manufacturers be more efficient and improve quality – ultimately saving time and money.

Trusted by more than 25 well-known manufacturers including Renishaw, Micro-Vu and Jenoptik, Sempre offers its customers an extensive range of bespoke metrology solutions to address quality and automation challenges in the aerospace, automotive, medical, energy and precision engineering sectors. For instance, customers use its technology for the measurement of wingspans for airliners and measuring compliance and the precision of bone screws and joint implants.

The acquisition is part of Oxford Metrics' drive into smart manufacturing and offers synergies with last autumn’s acquisition of Industrial Vision Systems (IVS), a specialist in developing machine vision software systems. Sempre will benefit from having access, advice and the resources to scale and expand into new markets and geographies, while IVS will gain access to Sempre's established sales and services organisation and benefit from its industry knowledge, customers, products and markets.

Importantly, Sempre’s directors will continue to lead the business forward, and founder and seller Mike John will stay on in a consulting role to ensure a smooth integration. Oxford Metrics is paying a £5mn cash consideration on completion, and there is a £0.5mn contingent earn-out based on performance targets being achieved. That seems fair given that Sempre has delivered annualised revenue growth of 8 per cent over the past four years and reported pre-tax profit of £0.7mn on revenue of £6.5mn in 2023. Current trading is consistent with a further improvement in performance, so the exit multiple of eight times 2023 pre-tax profit is reasonable, as is a multiple of 3.3 times book value.

Immediately earnings enhancing

Furthermore, the deal is immediately earnings enhancing. That’s because Oxford Metrics ended the 2024 financial year with net cash of £50mn (38p), so will be funding the deal from its cash resources. Alongside the announcement, Oxford Metrics also announced a £6mn on-market share buy programme, a sensible use of its cash pile given that it should also be accretive to earnings per share (EPS).

Although analysts at Progressive Equity Research have not adjusted their forecasts ahead of the group’s annual results on 3 December 2024, clearly there is upside to their current expectations of a sharp recovery in adjusted pre-tax profit from £3.4mn to £4.7mn and underlying EPS from 2.2p to 3p in the 12 months to 30 September 2025. A near-11-month contribution from Sempre should add £0.65mn to that profit forecast alone.

It’s worth flagging that Progressive Equity expects the £77.6mn market capitalisation group to deliver free cash flow of £9.6mn (7.4p) from operating cash flow of £10.2mn in the current financial year, so part of the investment in the acquisition and share buybacks will be funded from internal cash flow.

In fact, Oxford Metrics could buy back 10mn shares in issue for £6mn and still have a retained cash pile of £42mn by September 2025 after factoring in the £5mn upfront cash cost of acquiring Sempre, £3.6mn cash cost of a dividend that underpins a 5 per cent prospective dividend yield, and £2.5mn of other investments. However, shareholders are likely to be pressing the board to make further similar acquisitions to accelerate the profit recovery after the recent profit warning (‘Oxford Metrics’ warning hits shares – but all is not lost’, 24 September 2024).

Trading on price-to-book value parity and on eight times operating profit estimates to enterprise valuation, prospects for a 50 per cent-plus earnings recovery in the 2024-25 financial year (after factoring in Sempre’s contribution) is simply not in the price. For good measure, there is positive divergence on the chart, suggesting that the share price has bottomed out and a break-out from a base formation could be on the cards. A close above the 65p price level would be confirmation. Recovery buy.

[mfhmfh] 31/10/2024 19:27

Chelverton Asset Management Limited up to 5.32%

[rivaldo] 31/10/2024 09:20

Nice - J O Hambro Capital Management Limited have been buying and taken their stake above 3%, with 4m shares:

[pugugly] 29/10/2024 20:33

Share buyback a destruction of shareholders assets - share price goes down by some 2p rounded, since the start of the programme. Why?

[rossco] 29/10/2024 19:48

I have previously held OMG.
I almost bought back in in June when an “profits in line” announcement was made and the price fell below 100p.
Fortunately I decided just to monitor the price and with the news in September of profits going to be materially below expectations I have left well alone.
Looking at Progressive’s forecast of PBT of 3.4m I reckon that 70% will be finance income from the hoard of cash.
Can’t say I am impressed with board announcements since CEO was appointed in September last year.
Even the share buyback is not stopping the share price decline.

Going to wait until the next results announcement before making a decision to buy.

[tallprawn] 23/9/2024 07:05

Probably double that..

[johndoe23] 23/9/2024 07:02

Very poor management here

[scepticalinvestor] 23/9/2024 06:56

Ouch-15% open?

[lennonsalive] 23/9/2024 06:55

*Oxford Metrics' compiled market consensus as at 20 September 2024 is as follows: FY24 Revenue £48.6m / FY Adjusted PBT £7.8m.

[lennonsalive] 23/9/2024 06:55

The Group now expects to report revenues in the range of £40-£42million and is expected to result in Adjusted PBT* materially below current market expectations* for the financial year.