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Growing interest in imaging boosts OMG

Investors sent the imaging specialist's shares up 2 per cent after a strong first-half showing
May 18, 2016

Film studios, local government, research labs and consumer electronics companies snapped up imaging technology from OMG (OMG) in the six months to 31 March. Rising sales helped the group, which counts Ford and Sony among its customers, swing to an operating profit of £0.6m.

IC TIP: Buy at 45p

Revenues climbed 8 per cent in the Vicon division as its revamped range of motion-capture cameras attracted customers including Duke University and Industrial Light and Magic, which worked on visual effects for The Revenant and Star Wars: The Force Awakens. Sales rose by the same amount in the Yotta business, as local authorities clamoured for software to help them manage traffic lights, highways and other infrastructure assets. The division also signed its first nine overseas customers, and a greater focus on subscriptions drove its annualised recurring revenues up 26 per cent.

The budding OMG Life division didn't generate any revenue, but ongoing work with two large technology companies could lead to its first licensing deal. Management also revealed plans to spin out nascent image-tagging technology into a new company, in return for a stake of about 35 per cent.

Broker N+1 Singer expects pre-tax profits of £4.4m in the year to September, giving EPS of 2.9p (from £2.4m and 1.8p in FY2015).

 

OMG (OMG)
ORD PRICE:45pMARKET VALUE:£54m
TOUCH:44-46p12-MONTH HIGH:48pLOW: 35p
DIVIDEND YIELD:1.4%†PE RATIO:25
NET ASSET VALUE:20p*NET CASH:£5.8m

Half-year to 31 MarTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
201511.3-1.4-0.5nil
201612.20.60.2nil
% change+8---

*Includes intangible assets of £12.8m, or 11p a share

†Excludes special dividends of 4.5p and 5p a share in 2015, and 3.75p a share in 2016