Oxford Metrics : Interim Results 2023

6th June 2023

Oxford Metrics plc

("Oxford Metrics", the "Company" or the "Group")

Interim Results for the six months ended 31 March 2023

Strongest ever half year revenue performance

Healthy order book provides confidence for the second half

Investing organically whilst actively pursuing the right acquisitions

Well placed to deliver full year performance above current market expectations

Oxford Metrics plc (LSE: OMG), the smart sensing software company, servicing life sciences, entertainment and engineering markets, announces unaudited interim results for the six months ended 31 March 2023.

	H1 FY23	H1 FY22	%
Revenue	£21.3m	£12.6m	+70%
Adjusted Profit before Tax*	£4.1m	£0.3m	+1263%
Adjusted* Basic Earnings per Share	2.64p	0.41p	+544%
Statutory Profit/(Loss) before Tax	£3.9m	£0.6m	+543%
Statutory Basic Earnings per Share	2.49p	0.65p	+283%
Dividend paid	£3.3m	£2.5m	+28%
Net Cash	£63.6m	£19.6m	+224%
Order book **	£22.0m	£13.1m	+68%

• Profit/(loss) Before Tax from continuing operations before Group recharges adjusted for share-based payments, amortisation of intangibles arising on acquisition and exceptional costs
• FY22 comparative restated at $1.23/£ exchange rate

Commenting on the results Nick Bolton, Chief Executive said:

"I am delighted to announce that Oxford Metrics is reporting its strongest ever half year trading performance, driven by the buoyant demand in all our market segments and supported by a healthy order book of £22.0m as we move into the second half.

We are on a mission to create a Group focussed on expanding market opportunities in smart sensing. In year two of delivering our five-year plan, the Group has continued to make progress to scale us towards our goals, with continued organic investment in our current product offering and new products that are well-positioned to deliver growth in the future. We continue to actively pursue M&A to find the right acquisitions, for the right reasons, at the right price.

Given the Group's performance, coupled with an encouraging sales pipeline and forward visibility of second half revenues, the Board believes that Oxford Metrics is well placed to deliver on our promise of FY23 being a year of opportunity and growth."

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Financial Highlights

• Record first half with headline Group revenue of £21.3m, up 69.6% (H1 FY22: £12.5m). On a constant currency basis underlying growth was 62.5%, benefitting from buoyant order demand at Vicon
• Group adjusted profit before tax of £4.1m (H1 FY22: £0.30m)
• Adjusted earnings per share of 2.64p (H1 FY22: 0.41p)
• Clear visibility with order book of £22.0m (H1 FY22**: £13.1m)
• Strong balance sheet with net cash position of £63.6m as at 31 March 2023 (H1 FY22: £19.6m)
• Cash generated by operations of £0.4m (H1 FY22: £3.1m) with cash deployed for working capital purposes to augment inventory and underpin second half performance

Operational Highlights

With stepped-up production, Vicon delivers strong revenue and profit performance

• Vicon's revenue grew 69.6%, at a headline level, to £21.3m (H1 FY22: £12.5m)
• Buoyant demand continues:

1. Order in-take in H1 of £19.8m

• 1. Orders-in-handas at 31 March 2023 of £22.0m
• Vicon secured its largest ever deal for its recently released Valkyrie system
• Strong revenue performance across all market segments:
  Entertainment revenue up 178.2% to £11.0m as demand across film, TV and video games continued through the half
• 1. Cover, a new state-of-the-art studio in Tokyo, is now hosting 200 Valkyrie cameras

for a wide range of content production

• 1. Segment benefitted from £3.5m of orders deferred from FY22 and fulfilled in H1
• Life Sciences revenue grew by 25.5% to £5.8m with strong orders in hand of £6.1m
• 1. Victoria University, in Melbourne Australia, added a 40 camera Valkyrie system to

an already large Vicon system capability

• 1. Our tracking capability is aiding Victoria University to become the first university in the world to be an official FIFA Research Institute for Football Technology
• Engineering grew 15.8% to £3.1m with continued use of Vicon systems for the development of robots and robotic capabilities
• Location-basedEntertainment (LBE) grew 6.7% to £1.4m with partners continuing to roll-out Vicon tracking systems with future promising opportunities
• 1. Sandbox VR announced the opening of its 37th facility in Kentucky; and

1. Immersive Gamebox expect to be running 46 active facilities by the end of this year

Outlook

• Vicon has full visibility of second half revenues. Whilst being mindful of the production schedule and customer delivery requirements, we expect to see revenue growth in H2 2023 year-on-year
• Overall cost base in the second half is expected to rise, as costs continue to normalise following the pandemic and we continue with our investment plans to augment our ability to sense, analyse and apply
• We continue to actively pursue M&A to find the right acquisitions, for the right reasons, at the right price
• Considering the current order book, the expected rise in the cost base and with supply chain challenges diminished, the Board believes that Oxford Metrics is well placed to deliver full year results ahead of current market expectations.

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For further information please contact:
Oxford Metrics	+44	(0)1865 261860
Nick Bolton, CEO
David Deacon, CFO
Numis Securities Limited	+44	(0)20 7260 1000
Simon Willis / Hugo Rubinstein / Tejas Padalkar
FTI Consulting	+44	(0)20 3727 1000
Matt Dixon / Emma Hall / Jamille Smith / Jemima Gurney

About Oxford Metrics

Oxford Metrics develops software that enables the interface between the real world and its virtual twin. Our smart sensing software helps over 10,000 customers in more than 70 countries, including all of the world's top 10 games companies and all of the top 20 universities worldwide. Founded in 1984, we started our journey in healthcare, expanded into entertainment, winning an OSCAR® and an Emmy®, then moved into defence and engineering. We have a track record of creating value by incubating, growing and then augmenting through acquisition, unique technology businesses.

The Group trades through its market-leading division: Vicon. Vicon is a world leader in motion measurement analysis to thousands of customers worldwide, including Guy's Hospital, Industrial Light & Magic, MIT and NASA.

The Group is headquartered in Oxford with offices in California, Colorado, and Auckland. Since 2001, Oxford Metrics (LSE: OMG), has been a quoted company listed on AIM, a market operated by the London Stock Exchange. For more information about Oxford Metrics, visit www.oxfordmetrics.com

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Chairman and Chief Executive's Statement

The Group reports its strongest ever half year trading performance, continuing to enjoy ongoing buoyant demand, and thus maintaining a healthy order book of £22.0m going into the second half.

The business also made progress in the second year of our five-year strategic plan, with both organic investment in new product development which is destined to deliver revenue growth in the future, and as valuations start to normalise, actively engaging with a number of M&A opportunities.

Strong first half trading - both revenue and profit growth

KPI	Revenue	PBT	Adjusted PBT*
	H1 FY23	H1 FY22	H1 FY23	H1 FY22	H1 FY23	H1 FY22
Group	£21.3m	£12.6m	£3.9m	£0.6m	£4.1m	£0.3m

The Group reports revenues of £21.3m (H1 FY22: £12.6m), up 69.6% at a headline level and up 62.5% on a constant currency basis. H1 FY23 benefitted from the delivery of £3.5m of orders largely in the Entertainment segment, which were deferred from FY22 as outlined in our trading update on 27 September 2022. With supply chain challenges of last year diminished, Vicon successfully stepped up volume, delivering most of the opening order book whilst at the same time booking new orders in the first half of £19.8m, including Vicon's largest ever deal for our new Valkyrie system. This has served to build the current orderbook to £22.0m, which we expect to largely be delivered through the second half.

The Group also reports an improved Adjusted PBT* of £4.1m (H1 FY22: £0.3m), with the increase largely driven by delivery of the revenue performance whilst absorbing some inflationary cost pressures compared to the same time last year.

All vertical market segments performed well and reported growth through the first half.

Engineering

Engineering reported revenues of £3.1m (H1 FY22: £2.7m), representing growth of 15.8% and has orders-in-hand of £7.2m. A common application in the Engineering segment is the use of Vicon systems in the development of robots and robotic capabilities. Most recently the University of Manitoba acquired a large Valkyrie system for both Unmanned Aerial Vehicle (UAV) and ground robot tracking in an indoor facility. Their studies aim to increase the capacity in research and skills training of UAVs to help the local agricultural industry further embrace these technologies.

Entertainment

Entertainment reported revenues of £11.0m (H1 FY22 £4.0m) representing growth of 178.2%. Demand from across the film, TV and video game industries continued through the first half resulting in an £8.1m order book for the second half. Of particular note was the opening of Cover's new studio in Tokyo. This state-of-the-art facility hosts 200 Valkyrie cameras and is being used for a wide range of content production. More generally, the strength of the Asia Pacific region underpinned the performance with nearly half of revenues originating in Japan together with strong revenues in China and South Korea driven by a strong appetite for the new Valkyrie camera.

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Life Sciences

Life Sciences reported revenues of £5.8m (H1 FY22: £4.6m) representing growth of 25.5% and has strong orders-in-hand of £6.1m. Victoria University, based in Melbourne Australia, added a 40 camera Valkyrie system to an already large Vicon system capability. This enhanced tracking capability is part of Victoria University becoming the first university in the world to be an official FIFA Research Institute for Football Technology. The university first collaborated with FIFA in 2016 when it developed an innovative international standard for FIFA's quality program to assess the accuracy of Electronic Performance Tracking Systems (EPTS), now widely in use across the elite game.

Location-based Entertainment (LBE)

LBE reported revenues of £1.4m (H1 FY22: £1.3m) representing growth of 6.7% and has orders in hand of £0.6m. Reported growth reflects the delivery of existing orders to satisfy current rollouts by our customers. For example, Sandbox VR recently announced the opening of its 37th facility in Kentucky and Immersive Gamebox expects to be at 46 active facilities by the end of this year. Based on the future roll-out plans of certain key partners the prospect for meaningful future growth remains promising.

Overall, Vicon reported a gross margin of 69.1% (H1 FY22: 70.7%) in the first half. This marginal decline was anticipated and is attributed to the mix of revenues arising from both the specific geographic spread of revenues and the various margin contributions of each product line. Given the mix within the current order book, we expect gross margin to continue at this level throughout the rest of this year before seeing an improvement in the next financial year.

Given the above revenue and gross margin performance coupled with a rise in the underlying cost base, before Group costs, Vicon reported an Adjusted PBT* of £4.9m (H1 FY22: £1.8m) and an unadjusted profit before tax of £3.3m (H1 FY22: £0.6m).

Having paid a final dividend of £3.3m in the first half, the Group's cash position closed at £63.6m as at 31 March 2023 (H1 FY22: £19.6m). Cash generated by operations during the first half was £0.4m compared with £3.1m in the first half of last year.

In light of the ongoing strength of the orderbook, we have proactively deployed cash to increase inventory to £6.4m (H1 FY22: £2.8m / End FY22: £4.5m). Our decision to increase inventory underpins the second half and provides some protection against any supply chain disruption.

Five-year plan progress

As our strong organic growth illustrates, we continued to make good progress against our five- year plan, which aims to increase revenues 2.5x and deliver 15% adjusted profits. This plan, launched in October 2021, recognised something fundamental was changing across our markets and thus creating new opportunities. This change was driven by the arrival of the Augmented Age - an era where humans partner with machines to achieve what neither can alone. For this augmented partnership to thrive, we need technologies which have the ability to perceive us and our surroundings. Indeed, systems must be able to capture and understand every dimension of our world in real-time - humans, objects, movements, environments.

We term such technologies as smart sensing systems, where cameras and other sensors are deeply coupled with powerful software to enable machines to transparently enhance our lives. This has long been our core area of expertise but now they are finding valuable use in an increasing array of applications. Our plan looks to capitalise on this expanded opportunity in three key ways:

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