Oxford Metrics : Preliminary Results 2022

6 December 2022

Oxford Metrics plc

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

Preliminary Results for the financial year ended 30 September 2022

- Year of strategic progress with disposal of Yotta -

- Record order book underpins more than half FY23 revenue expectation -

- Overall strong demand picture provides encouraging momentum into new year -

Oxford Metrics plc (LSE: OMG), the smart sensing software company servicing life sciences, entertainment and engineering markets, announces preliminary results for the financial year ended 30 September 2022.

	FY22	% Change	FY21
Revenue #	£28.8m	+4.5%	£27.6m
Adjusted Profit Before Tax*#	£2.6m	-35.5%	£4.0m
Adjusted* Basic Earnings per Share #	2.55p	-6.6%	2.73p
Ordinary Dividend per Share	2.50p	+25%	2.00p
Statutory Profit after Tax	£46.9m	+1498.5%	£2.9m
Statutory Basic Earnings per Share	36.70p	+1481.9%	2.32p
Net Cash**	£67.7m	+194.8%	£23.0m
Orders-in-hand	£24.0m	+306.8%	£5.9m

• Profit Before Tax before Group recharges adjusted for share-based payments, amortisation and impairment of intangibles arising on acquisition, additional Contemplas consideration deemed remuneration and exceptional costs
• Including Fixed Term Deposits

# Continuing operations

Financial Highlights (for continuing operations)

• Headline revenue of £28.8m (FY21: £27.6m), up 4.5%, up 0.5% on a constant currency basis with global supply chain constraints leading to deferment of £3.5m orders unable to ship in FY22
• Adjusted Profit Before Tax* at £2.6m (FY21: £4.0m), reflecting measured investment in five-year plan and the impact of deferred orders
• Debt free with strong net cash position of £67.7m (FY21: £23.0m), strengthened by sale of Yotta
• Board proposes increasing final dividend to 2.50p per share (FY21: 2.00p)

Operational Highlights

Clear need for Vicon's market-leading offering drives strong demand and revenue growth

• Largest-everorder book as at 30th September 2022 of £24.0m (FY21: £5.9m)
• Strong demand across all our market segments:

1. Buoyant demand in Entertainment accounting for 58.6% of orders in hand, including contract wins with Dark Matters, to deploy Vicon's Vero solution Shōgun software in France's first virtual production studio, ByteDance, which purchased a large system to evolve the next viral dance

move, and Industrial Light & Magic to create the highly acclaimed Abba Voyage experience

1. Life Sciences revenues grew 16.3% and account for 22.6% of the orders in hand, including Saarland University acquiring a system in a collaboration with NASA, ESA & DLR, the German

Aerospace Centre, for large scale studies into the Musculoskeletal (MSK) aging process

1. Location-basedEntertainment recovery is well underway reporting year-on-year revenue growth of 220.7% and accounts for 12.0% of orders in hand, including additional contracts with

Sandbox VR, MackNext, and Immersive Gamebox

• 1. Engineering revenues reported 3.2% decrease year-on-year, including a contract win with TU Delft's Department of Cognitive Robotics who bought a system to extend their work in robotics
• Encouraging traction with new flagship system - Valkyrie, providing momentum into the new year
• Most recent acquisition, Contemplas, now integrated

Successful sale of Yotta to Causeway Technologies for £52.0m

• All cash transaction realises investment made in Yotta at an attractive multiple
• Provides even greater clarity to go-forward growth path building more connected business
• Boosts near-term financial firepower to accelerate M&A as well as ongoing organic investments

Outlook and Guidance

• Vicon enters new financial year with well over half of revenue expectation underpinned by orders in hand
• Demand remains strong and we believe supply chain constraints are gradually easing
• Vicon will continue to invest in augmenting capabilities to sense, analyse and apply our technology
• As a more focussed business, supported by positive fundamentals, we are well placed to capitalise on the Smart Sensing opportunity that lies ahead
• M&A pipeline focussed on acquisitions in known markets of entertainment, Life Sciences, engineering and sports, and on companies which possess hard-to-replicate, deep Intellectual Property in integrated Smart Sensing and attractive financial metrics

Commenting on the results Nick Bolton, Chief Executive said:

"Year one of our five-year plan has marked significant change and progress for Oxford Metrics, as we seek to build a growing, connected enterprise focussed on the expanding market opportunities in smart sensing systems, through organic and inorganic investment.

During the year, we successfully divested Yotta, creating a more focussed group while bringing further clarity to our go-forward strategy; a laser focus on our market-leading Vicon business. At the same time, we have continued to push boundaries to extend our sensing capabilities, bringing to market Valkyrie - our new flagship solution - to capture motion more accurately than ever before.

We enter a new financial year with our largest ever set of orders-in-hand and demand for our systems remains buoyant. While we have seen a deferment of shipments due to wider global supply chain constraints, this situation is gradually improving, and our commercial momentum is regaining pace. The Board is encouraged by the overall strong demand picture for our market-leading products.

As a more focussed business with a strengthened balance sheet and strong fundamentals, the Board looks forward to the new financial year which is set to be a year of opportunity and growth for Oxford Metrics."

For further information please contact:
Oxford Metrics	[phone]
Nick Bolton, CEO
David Deacon, CFO
Numis Securities Limited	[phone]
Simon Willis / Hugo Rubinstein / Tejas Padalkar
FTI Consulting	[phone]
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 Vicon, 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, Germany and New Zealand. 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

CHAIRMAN'S STATEMENT

2021/22 was a year of important change for Oxford Metrics. At the start of the financial year, we launched our new five- year strategy through which we aim to grow revenues 2.5x whilst delivering an Adjusted PBT* margin of 15% by the end of the plan. In May, we announced the disposal of Yotta for £52m, which now allows us to focus on growth through the lens of the faster growing Vicon, a world leader in motion tracking. We then, in July, launched our most advanced motion capture system, Vicon Valkyrie, which captures motion more accurately than ever before and, which we expect will drive revenues in the next financial year and beyond. All this provides us with a springboard from which to focus on building a higher growth, more connected Group.

But the year was not without its frustrations. We were subject to the well-publicised global supply chain challenge faced by many industries in a post-pandemic world. This was made all the more frustrating given the high level of market demand we experienced and continue to experience for our solutions. As of 30 September 2022, our order book stood at £24.0m (FY21: £5.9m), a record level for our business. Despite this buoyant market demand, we were unable to fulfil some customer orders, which moved approximately £3.5m of orders into the new financial year. Although some uncertainty remains, the overall supply chain picture continues to improve, and we expect these orders to ship in the first half of the new financial year. The launch of our Valkyrie system that uses the latest component technology rather than legacy components used in the outgoing Vantage system will also help ease the situation.

For continuing operations, revenues of £28.8m (FY21: £27.6m) are reported and an Adjusted PBT* of £2.6m (FY21: £4.0m), which reflects the deferment of £3.5m orders we were unable to ship in September 2022.

The Group reports a statutory Profit after tax of £46.9m (FY21: £2.9m) with a bolstered cash position including Fixed

Term Deposits of £67.7m (FY21: £23.0m, following the disposal of our Yotta business at a highly attractive valuation.

The Board proposes to increase our final dividend to 2.50 per share (FY21 Final Dividend: 2.00p) this year. We remain committed to our progressive dividend policy and will to aim to achieve average dividend cover of approximately two- times Adjusted PBT* per Share over time.

I would like to take this opportunity to recognise the outstanding contribution made by Dr Tom Shannon, one of our founders, who passed away in August 2022. Tom was one of the original team which founded Oxford Metrics in 1984 and has been part of the business ever since. Tom's contribution was felt across the entire business from R&D to quality management, from compliance to commercials. There is no doubt Tom helped make Oxford Metrics the great business it is today and we owe him our deep gratitude.

Lastly, I would like to thank everyone involved in supporting and building our business - our customers, our shareholders, our partners, and, of course, our brilliant team across the world.

Roger Parry

Chair

CEO STATEMENT

As we enter a new financial year, our vision for Oxford Metrics is clear. Our current five-year plan, set out in our annual report last year, aims to build a growing enterprise focussed on the expanding market opportunities in smart sensing systems, through organic and inorganic investment. Such sensor-based, analytical systems offer the possibility to transparently enhance our lives: enabling the digital to interface directly with the real world.

In our plan, we describe the coming of the Augmented Age, where humans partner with technology to achieve what neither can alone. For this augmented partnership to thrive, technologies are needed which have the ability to perceive us and our surroundings. They must be able to sense and understand every dimension of our world in real-time: humans, objects, movements, environments. Ever since our founding in 1984, this has been our domain and where our deep Intellectual Property resides powering the interface between the real world and its virtual twin. And importantly, we stand to gain as this smart sensing is applied to an increasing number of end market applications.

Our plan looks to capitalise on exactly this expanded opportunity by focussing on driving each of the three elements of smart sensing: sense, analyse and apply.

1. Extend our sensing capabilities

Our first thread is to extend our sensing methods through R&D, M&A and fostering key supplier partnerships, which broadens the applicability of our solutions and thus expands our addressable market. Here, we are focussed on building and acquiring a consistent, integrated core technology stack. Although the end market applications may be new, there will always be a tie-back to this central capability of integrated smart sensing systems.

A good example of this over the past year was the introduction of Vicon's new flagship motion tracking system, Valkyrie. This new solution pushes the envelope of measurement capability further than any previous Vicon generation. The system can measure smaller movements, more accurately, in larger volumes and at higher speeds. We believe these newly extended powers will address the growing demand for larger volume measurement driven by trends in the engineering, sports performance analysis and visual effects markets.

2. Enhance the analysis we can perform

Secondly, we seek to augment the analysis our customers can undertake with our software and thus broaden further the range of applications to which our systems can be applied. Again, this will be pursued through both organic and inorganic means. Expanding the analysis our customers can undertake with our systems has the potential to both grow our market opportunity and fill out our solutions in our existing markets.

We are constantly working to improve Vicon's suite of analysis software. For example, in March, we introduced a new version of our innovative Capture.U app. The app working with Vicon's Blue Trident inertial sensor, can now be used in an educational and training context. For universities and schools, it provides a means to develop practical understanding of human movement to build on their theoretical models. It helps the student apply their knowledge by engaging them to perform specific movements, such as squats, bicep curls and shoulder raises, then guiding the user in analysing and interpreting the data captured.

3. Embed our IP in other companies' solutions

Finally, we aim to grow by seeing our deep technology incorporated into other business' products and services. This aims to expand our addressable market as we drive the integration of our sensing and analysis IP to specific application domains. Over the past year we have both opened up our technology to selected partners and invested in specific resources to identify, partner and support such embedding companies.

Our most progressed embedding opportunities are in the Location-based Entertainment (LBE) market and, as we emerged from the period of pandemic-related lockdowns, we saw a number of those partners restart their roll-outs during the second half including Sandbox VR, who most recently announced the opening of their 30th location, MackNext, who installed their second Yullbe VR experience at Miniature Wonderland in Hamburg and Immersive Gamebox, who have plans for over 250 sites over the next three years.

Through these three mutually reinforcing mechanisms we will continue to drive growth. But over the past year, this has mostly been the result of organic initiatives. As previously communicated, we have the financial firepower for M&A and while our ambition remains, the environment for M&A has materially changed over the past six months. Although public company valuation multiples have reduced, private company valuations metrics are only now starting to reflect these lower levels. This has meant a price mismatch between buyer and seller, which has made concluding transactions tougher. We will still continue to pursue our carefully selected targets, but we will only do so at a price that represents fair value for our shareholders.

It is also worth adding that the sale of Yotta in May 2022, does not change our vision or plan but it does enable us to bring increased financial firepower to execute our growth. With a stronger balance sheet, we have the opportunity to accelerate our pace of growth through lifting our ambition to complete a number of larger transactions. We continue to hold a pipeline of M&A opportunities which fit well within this clear, coherent plan. Our pipeline is focussed on acquisitions in markets we understand well, entertainment, Life Sciences, engineering and sports, and on companies