Oxford Metrics Reports H1 Loss Amid Strategic Shifts and Acquisitions, Backs Full-Year Outlook

The Headline Numbers: A Strategic Pause Before the Next Leap

Oxford Metrics (LSE: OMG) delivered interim results for H1 FY25 (ended 31 March 2025) that, on the surface, show a step back. Revenue dipped 14% year-on-year to £20.1m, swinging from a £3.7m statutory profit before tax in H1 FY24 to a £0.7m loss. Adjusted EBIT also landed in the red at £0.4m, compared to a £3.0m profit last year. The culprit? An exceptionally strong H1 FY24, fuelled by delivering a record order book built up during pandemic-era supply chain snarls. CEO Imogen O’Connor was clear: this wasn’t a trend expected to continue, and the dip was in line with management expectations. Crucially, the full-year outlook remains unchanged.

Digging Deeper: Why the Dip?

• Tough Comps: H1 FY24 benefited massively from clearing that pandemic backlog – including fulfilling the largest single order in company history. Customer buying patterns normalised in H2 FY24, setting a more sustainable baseline.
• Investment Phase: Significant resources were poured into launching the next-gen Vicon Markerless platform and integrating acquisitions (Sempre in H1, Amber Optix post-period).
• US Funding Headwinds: Recent policy shifts in the US led to reduced grants/funding for institutional/academic customers (a key US market segment), causing some project delays/cancellations.
• Margin Mix: Revenue growth came from the lower-margin Smart Manufacturing division (boosted by Sempre), pulling the Group gross margin down slightly to 65.5% (H1 FY24: 66.8%).

Despite the loss, the balance sheet remains a fortress. Net cash stands at £39.9m (down from £54.8m, but still substantial), bolstered by strong operating cash flow of £2.8m. This war chest funded the acquisitions (£5.5m for Sempre, £0.8m for Amber Optix), a progressive dividend hike (£4.2m paid, up from £3.6m), and a share buyback (£3.6m spent so far). Tellingly, the Board just extended the buyback by another £4m, taking the total programme to £10m – a clear signal of confidence in intrinsic value.

Motion Capture: Weathering the Storm & Planting Seeds for the Future

Revenue here fell 32% to £14.8m, mirroring the Group trend against that tough prior year comparator. Margins held up well. While the core marker-based business saw solid progress (new contracts/upgrades globally, e.g., Brazil rehab hospitals, major entertainment producers in US/Japan/Korea, Sandbox VR expansion), the real story is Vicon Markerless.

• Launched Successfully: Debuted in March 2025 at the Game Developer Conference. No suits, no markers – faster, easier motion capture.
• Positive Early Feedback: Beta tested with industry giants like Industrial Light & Magic, Gearbox, Dreamscape Immersive (who are already using it live).
• Building the Pipeline: Over 250 global demos conducted post-period. Modest FY25 revenue expected, but this is the start of a crucial new software/services revenue stream.

Regional demand is mixed: improving in South America, APAC, and Europe for Entertainment/Life Sciences, but hampered by the US funding environment.