For chief executive Nick Bolton, Oxford Metrics’ (OMG) full-year results to September were “all about up” – a broadly accurate summation. Strong top-line momentum meant accelerated progress further down the P&L, with adjusted pre-tax profits for the software provider rising by nearly a third to £5.2m. Meanwhile, cash from operations climbed by a fifth to £6.7m, underpinning management’s decision to hike the dividend substantially – with a 1p special payout bringing the effective yield to 3.5 per cent.
Following a period of investment in FY2017, the group made good progress in the second year of its five-year strategy to double profits and triple recurring revenues, evidenced by a 190 basis point uplift in the gross margin, while recurring revenues (ARR) have increased by 42 per cent since the start of the plan.
Segmentally, Yotta – which provides cloud-based infrastructure asset management – enjoyed a 95.3 per cent retention rate among software-as-a-service customers. But an ARR growth rate of 16.5 per cent to £5.7m was slightly below bosses’ expectations after slower-than-anticipated international momentum. Meanwhile, Vicon, which offers motion-measurement analysis, “really did have a stonking year”, according to Mr Bolton – reporting record revenues of £24.4m and adjusted pre-tax profits of £7.3m – well ahead of management’s expectations.
House broker N+1 Singer expects adjusted pre-tax profits of £6m and EPS of 3.7p for FY2019 (from £5.2m and 3.5p in FY2018).
| OXFORD METRICS (OMG) | ||||
| ORD PRICE: | 71.5p | MARKET VALUE: | £89m | |
| TOUCH: | 70-73p | 12-MONTH HIGH: | 83p | LOW: 58p |
| DIVIDEND YIELD: | 2.1% | PE RATIO: | 22 | |
| NET ASSET VALUE: | 24p* | NET CASH: | £12.2m | |
| Year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2014 | 25.6 | -0.1 | -0.1 | 0.50 |
| 2015 | 25.7 | 4.8 | 3.9 | 0.65 |
| 2016 | 26.3 | 5.1 | 3.9 | 1.00 |
| 2017 | 29.2 | 3.7 | 2.6 | 1.20 |
| 2018** | 31.7 | 4.6 | 3.2 | 1.50 |
| % change | +9 | +25 | +27 | +25 |
| Ex-div: | 13 Dec | |||
| Payment: | 7 Mar | |||
| *Includes intangible assets of £12.4m or 10p a share. **Excludes special dividend of 1p – payable on 25 Jan 2019 to shareholders on the register on 14 Dec 2018 (ex-date 13 Dec 2018.) | ||||
