Oxford Metrics (LSE:OMG) — Preliminary Results

0:01 Good morning and welcome to the Oxford METRICS Annual Results Investor Presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and can be submitted at any time via the Q and A tab situated on the right hand corner of your screen. Simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company will review all questions submitted today and publish responses where it is appropriate to do so. Before we begin, I would like to submit the following poll.

0:32 I would now like to hand you over to Nick Bolton, CEO. Good morning, sir. Good morning, Alex, and good morning, everyone, and welcome to this, our Investor Meet company, presentation for our annual results for OXFORD METRICS for the period that closed on the 09/30/2021. And this year has marked significant change in strategic progress for OXFORD METRICS. As a reminder of that, in October 2021, we laid out our five year plan to create a more focused group, and I'm pleased to say in our first year, we've done exactly that. In May, we achieved a premium disposal of our Yossa subsidiary for £52,000,000. And in August, we launched our new generation motion capture platform, Vicon Valkyrie.

1:17 So today, we stand as an enterprise with a clear focus and deep resources to drive the next chapter of growth.

1:26 In terms of the structure for this presentation, I'll shortly hand you over to David Deacon, our CFO, to take you through the financial performance. I will then take the baton back and update you on our progress through our five year plan. And lastly, we will then look forward to the outlook for the business for the year ahead. So without any further ado, David, over to you. Thank you, Nick. I would also like to add my welcome to this morning's presentation. Firstly I'll kick off with some headlines starting top left. So overall our revenues were up 4.5% year on year. The results did benefit from a FX tailwind, so on a constant FX basis underlying growth was near a half a percent year on year. We are also reporting our largest ever order book of £24,000,000 up from £5,900,000 a year ago and a headline profit after tax is reported at £46,700,000 which obviously includes the yacht of disposal compared with a profit of £2,900,000 a year ago.

2:30 Moving to the second row, on an adjusted PBT basis which excludes non cash related items and exceptional costs, a profit of £2,600,000 is reported compared with £4,000,000 last year. The outcome reflects our measured investment during the year and supply chain constraints that resulted in the deferment of £3,500,000 worth of orders into FY 2023. A little later I will explain the bridge between the two years in some more detail. This translated into an adjusted EPS of 2.55p compared with 2.73 a year ago and we finished the year with a headline cash position of £67,700,000 which included the cash generated from the yacht disposal of £47,100,000 and the payment of a final dividend of 2,540,000 Moving to the third row, we're announcing a proposed final dividend of 2.5p per share, which represents a 25% increase over last year.

3:33 During the year, Vicom invested 2,800,000 in new IP, up from 1,900,000 last year. The increase was largely due to the launch of the new high end Valkyrie camera. The inventory position at 4,500,000 is up compared to last September. The increase is largely due to the deferment of sales orders into the next financial year. Our inventory consists of mostly components required to assemble cameras and of course this is not possible if one particular part is not available so our inventory level reflects this. And for those of you that read the annual report and get as far as page 64, you may also note the inventory included some finished goods as well but it's of course important to understand that we ultimately ship systems which consists of a variety of finished items together with the cameras of course. An incomplete system is of no use to a customer so we do not part ship.

4:34 As we start the new financial year, the supply chain situation is easing. The introduction of the new camera Valkyrie uses the latest tech which is easier to source. A lot of the supply chain challenge in FY twenty twenty two was around sourcing components for the outgoing Vantage camera that Valkyrie replaced. The supply chain situation more generally is improving but it is too early to rule out the disruption given various macro global conditions. Will now take a look at the FY22 trading performance in some more detail, starting with revenue which I will look at in three different ways. So firstly, historically we are now focused on Viacom and I thought it would be worthwhile to reflect on Viacom's fortunes over the past ten years.

5:25 So after a steady start from 2015 through to 2019, Viacom reported consistent revenue growth equivalent to 10% cumulative growth rate driven by the wider adoption of our technology across all markets and the introduction of a broader range of camera solutions. In 2020, of course, this momentum was disrupted by the pandemic which was followed by a recovery in 2021 and the post pandemic supply chain challenges has lingered on, resulting in a constrained FY '22 at 28,800,000. Had we shipped a further 3,500,000 referred to in the September trading update, the story for the year would have been much improved and the growth trajectory would have been restored.

6:14 The second take on revenue is looking at it geographically. Post the disposal of Yotta, the chart is less UK biased. Vicon UK revenues were down from FY21 to 8% which means of course that 92% of revenues came from international markets which is obviously great for UK PLC. North America where we have direct operations was up 11.7% but to be fair the performance in The US was flattered by FX, underlying growth was nearer 1%. Asia Pacific was up 6.9% driven by entertainment and Europe was up 6.4. And finally the third way of looking at revenue is from a segmental perspective. The analysis to the left tells the story of FY22 from a reported perspective but it is important to keep an eye on the right hand column at the same time being the order book.

7:11 Taken together we have seen growth across all segments. Our customers across all segments continue to do very interesting things with our technology. In the engineering segment, the Department of Cognitive Robotics at TU Delft in The Netherlands bought a system to extend their work in robotics which included human robot interaction. The use in this context continues to grow more broadly.

7:38 In entertainment reported revenues were 15.7% down but the market remains buoyant evidenced by the order book that already exceeds FY22. And most of the deals done in FY22 included ByteDance, the owner of TikTok who purchased a large system as they look to evolve the next viral dance move. I myself never quite mastered flossing but hey, we're waiting to see what they come up with next. And of course I must mention Industrial Light and Magic who merged the physical and the digital to create the highly acclaimed and very successful ABBA Voyage experience. In addition, an emerging market is V Tubing which apparently involves the live streaming of virtual characters to fans.

8:24 Sophisticated so called VTubers are now beginning to use Viacom systems to drive full three d virtual characters. The trend started in Japan a couple of years ago and has now spread to The USA where we use social media influencer Matt Workman to publicize his use of a Vicon Vero system on his YouTube channel. Off the back of this, we've received some orders. Not sure that I'm the demographic for this to be honest, I've not even TikTok'd but hey waiting to see what they come up with next and this is yet another exciting application of Viacom's three d capture technology. In life sciences this year included Saarland University who acquired a system for a collaboration with NASA, the European Space Agency and the German Aerospace Centre for large scale studies into the musculoskeletal ageing process including investigating physical decline when immobilised.

9:22 For example, if you find yourself overwintering in Antarctica or you find yourself on the International Space Station, you will be affected. And in location based entertainment, well this has finally got back on track reporting significant year on year growth and also has orders in hand that already exceed FY 2022. Taken together, overall revenues were up 4.5% and orders on hand were up from five point nine to twenty four million. And post year end order intake remains healthy which includes our largest ever single order which will be reflected in engineering in the year to come. So the revenue performance resulted in an adjusted PBT of £2,600,000 in comparison with last year. The year on year profit movement is illustrated in the following bridge.

10:17 So on the left is the £4,000,000 adjusted profit we reported last year. To this I have added the FX benefit given the weakness of sterling towards the end of FY22 this amounted to a 500,000 favourable adjustment. Moving on we also saw a change in our gross margin. On the one hand we generated more gross margin by dint of more revenues but we have also seen some gross margin erosion due to supply chain cost of goods pressure. This resulted in gross margin reduction of around three percentage points which was all to do really with the outgoing Vantage camera. From a cost perspective, we have also seen an increase. Firstly, we have a full year of contentless in the numbers which is part of the answer adding 1,100,000 to the cost base.

11:07 Secondly, we have seen an underlying rise in the cost base of £2,500,000 and there are several reasons for this. Firstly, we've definitely seen a normalisation of costs during the pandemic and through into 2021, marketing, travel and other operational costs were lower than normal. Overall business as usual costs are up around £1,800,000 of the £2,500,000 you see there. For example, marketing was 500,000 up. And secondly, we're investing more as we signaled in the preliminary results to augment our capabilities to sense, analyse and apply our technology. As I've already mentioned, R and D capitalisation was up £900,000 and this was due to the launch of the high end Valkyrie camera which is really a one in seven year event so R and D capitalisation was high.

11:59 But I expect this to return to more normal levels in the year ahead. Amortization was a little lower and the final piece of the jigsaw is interest received. So the moment we received cash for the yachtter disposal this went on to fixed term deposits and generated 300,000 and therefore you then arrive at the 2,600,000 adjusted profit on the right hand side. So in summary, the reported numbers do not really tell the whole story. The revenues were up 4.5% but we were constrained by supply chain but on the plus side we have a £24,000,000 order book that goes a long way to underpin FY '23. We report an adjusted PBT of £2,600,000 but this too has been impacted by the deferment of the 3,500,000 revenues into FY '23.

12:54 The group finished the year with £67,700,000 and we're proposing the dividend for 2.5p up 25%. So the balance sheet is strong and we clearly have the financial firepower to execute our M and A ambitions in the year ahead and more on this in the presentation from Munich. Thank you all very much, back to you. Great, thank you David for taking us through that. Well let's move on now then and talk about our progress against the five year plan that we launched, as I said, in October 2021. So let's start there. As a reminder, really, the five year growth plan, this was all about leveraging our opportunity in integrated smart sensing. What we mean by integrated smart sensing is looking after data all the way on the journey from SENSE through its analysis and on to its application in the end domain. We look after the data on that journey in order to maximize the intelligence that our customers can derive from that sensing, from that analysis.

13:56 The five year plan is based on both organic investment and inorganic investment to drive growth in a synergistic way. And we have three specific vectors of expansion that we're driving. Firstly, to extend the sensing capabilities, so enable more ways to actually sense and measure information and data. Secondly, to then enhance the analysis of that data, broaden our abilities for analysis. And then lastly, in the applied phase, see our technology embedded in other companies' solutions. Through those three vectors, our aim is to expand the market applicability and therefore the total addressable market for which our technology can serve. And through those efforts, the aim is to increase revenues to two and a half times the 2021 level and return the business to its historic adjusted PBT level of 15%.

14:52 Well, let me me kick on then from there. I've really I've got three slides to take you through each of those three growth vectors. And we're gonna go through each of those in turn. The first one is about extending our sensing capabilities. And this is all about improving the existing ways that we sense. So we sense both through the optical systems from little markers like these. We also sense through the inertial sensors, the blue trident sensor. I mean, there are also other ways that we can do it for video and so forth. So it's about improving those existing methods, but also then augmenting that with new ways to sense. So some examples of that are video sensing. You might remember we made the acquisition of Contemplas back in August 2021. And the great thing about Contemplas technology is it can undertake measurements with just video in itself. No need to actually place necessarily targets on the subject.

15:43 Secondly, are technologies like LiDAR now emerging. LiDAR is a technology that's coming out of the autonomous vehicle industry, There's a great deal of investment going into solid state LiDAR, so rather than needing moving elements, that's gonna be solid state. And we'd like to benefit from some of the crumbs from their table. Spot fabrics now, it's possible to have fabrics

16:03 in which you can weave in electronic elements which effectively can measure things like angle and so forth. And all of those are ways that effectively new ways to sense that can then come into our existing capabilities analysis software. Software. Now we're driving that both organically and inorganically. And probably the biggest news over the past twelve months was the introduction of our new Vicon Valkyrie system in July 2022. And as David said, that's a one in seven year event. Our previous generation Vantage camera was introduced in July of, 2015. And the new generation Vicon system, it really sets the bar even higher, within the marketplace. So we've launched our flagship system within this is the VK 26 that offers 26 megapixels at a native full

16:56 frame resolution of 150 frames a second. This means that we can now see and measure elements that are further away, that we can therefore measure larger volumes and also measure them, measure some of those objects in higher degrees of accuracy. And for us what that means is that that's expanded market opportunity And especially in the high end metrology space, so that would be part of our engineering market.

17:21 And also in those leading edge applications in virtual production, where they're really trying to push the edges of what's possible within those virtual stages. So that's vector number one, extending our sensing capabilities. Then turning then to analysis. This is all about taking our existing analytics capabilities and building on those to broaden the range of applications to which our solutions can be applied. And probably the biggest or an important piece of news over the past twelve months was the launch of our Capture You new version application in 1.2. This is an app that runs on an iPhone or an Android phone or an iPad. And it works with our Blue Trident inertial sensor. You can also see on the slide there in the middle.

18:09 And it enables the enhancements specifically about expanding its capability and use within educational training context. So now it's possible for perhaps a biomechanic student to work with a colleague during a lab session, put the markers

18:23 on one of them, have them do a series of moves, and then together the team can then analyse the data. The goal really there is to effectively get people to touch Vicon within their training, so when they then end up in the workplace, they're already familiar with Vicon and its broad capabilities. Specifically in the analysis area, we've identified a number of M and A targets that we're looking to

18:48 focus on, especially in areas of biomechanical modelling. This is where, just because you've measured where the marker is, we need to understand how the movement of that marker relates to the underlying biomechanics. And that's exactly where modelling comes in. It translates the marks on the outside of the skin to describe the underlying movement within the musculoskeletal system. We have some modelling tools in house, we'd like to see those enhanced. And secondly, it's about finding those acquisitions that would be also enhance analysis of non optical data. So be that one of the other mechanisms that I mentioned previously, video data for example, or other forms of inertial data. So that is our second vector about enhancing the analysis. And then turning then to our third area of embedding the RIP in other companies' applications.

19:39 That is really because we cannot operate directly in all end markets for motion measurement. In other video presentations that are available on our oximetrics..com website, I describe really about the broad

19:51 capability of motion measurement and how we feel it's going be applied to a wide variety of markets in this coming of the augmented age. And I'd encourage you if you'd like a bit more detail on that to look at some of the videos on the web site there. But of course in all of those end markets, we can't play in all of them. We haven't got a right to win within all of those. And so our goal with this thread is to really drive embedding in other people's solutions who had the other elements that are required for a successful whole products within those end markets. And over the past twelve months, we've been driving that embedding through two specific activities. Firstly, opening up our technology so that it's easier for partners to integrate more deeply with the Vicon data streams and analysis engine. And secondly, we've invested in dedicated resources to manage that partnership relationship.

20:39 The challenges and the opportunities of managing a partner relationship partnership relationship are different than those actually where we're selling directly to an end customer of a biocon system. So now we've got a dedicated group just focused on that area.

20:52 I think it's worth mentioning that perhaps the most advanced area of seeing our technology embedded in other people's solutions is in the area of location based entertainment. It's really starting to see a bit of return to expansion post pandemic over the past six months. And then there'd be three organisations I'd pick out and highlight, which are the three images you see on the slide there. MacNext is our partner in Roost in Germany. It's the group that's the technology partner behind Europa Park, if you have ever visited that theme park with your families. They have a unique experience called You'll Be, which again I would encourage you to check out some YouTube videos of, and they have just opened the second instance of that in Miniature Wonderland in Hamburg. So if your Christmas plans take you to Hamburg, I'd encourage you to go and visit that. If alternatively your Christmas celebrations take you to London, Sandbox VR have just opened a facility between Hoban and Tottenham Court Road, so you could go and attend their site. Sandbox themselves actually just opened their thirtieth facility.

21:57 So really starting to see their expansion ramp up. And then lastly, Immersive Gamebox that we've talked about before within our presentations. They have some very exciting plans over the next three years where they plan to open two fifty sites. And again, a different experience from Sandbox, and I think they've now got three in London, one in Arndale and Manchester, and also now one in Yorkshire. So again, a bit broader spread across the country. I'd encourage you to take your families to enjoy those experiences over this Christmas period. Now, I've highlighted on those three slides talking about extending sensing, enhancing analysis, and seeing our technology embedded in other people's solutions.

22:45 Or really on more of the organic side, but I wanted to pick out a specific focus on what we're doing with the M and A tool. Because clearly now having disposed of the Yotter business, we sit on some deep resources that allow us to drive growth through the M and A tool. And really the M and A tool supports each three of those vectors, extended sensing, enhanced analysis and embedding IP. We apply strict criteria to those acquisitions. We're looking for deep tech businesses, ones that are IP rich with hard to replicate, well fortified technology and markets. We're looking for businesses that have got attractive cash flow metrics with good high revenue visibility, or even just a strong position within a niche market as does in itself.

23:40 And we're also looking for those organisations that have got able management teams who share our cultural values. Know, haven't got an army of people just sitting on the bench at Vicod waiting to go and run someone else's business. We want to bring in talent when we bring in acquisitions. Our plan there is to identify latent value, buy at a fair price, and then look to improve it through strategy, technology transfer, careful R and D, really driving out the synergies, be they synergies of channel, of technology, or even just actually some extra financial resources to drive their own growth harder. We have multiple integration choices within the business, we could deep integrate it into the Vicom subsidiary, all the way through to actually it sitting as a standalone subsidiary reporting into group. So that gives us a bit more extra scope and flexibility to bring those businesses into the group.

24:31 It is worth saying that we're also doing that within the markets that we understand well, so entertainment, life sciences, sports and engineering, and they've all got to fortify that whole integrated smart sensing opportunity that I outlined at the start of my little section. However, is worth saying that the M and A environment over the past six to nine months has materially changed. For me, my own view is that there's a price mismatch going on between public and private markets. Public has seen their ratings re rated more harshly and that's yet to really ripple through into private markets. We will continue to pursue those carefully selected targets, but we will only do a deal at a price that represents fair value for shareholders.

25:17 So we need some of those markets to really move a little in order to make sure that there's fair value for shareholders there, but M and A remains a very important part of our plans. So that's where we are really with the strategy over the past twelve months. Now let's look forward at the outlook now really for the next period. As David said, we enter the new financial year with a very strong backlog and orders in hand and with a very strong demand picture. And you can see that through that over half the revenue expectation is underpinned by orders in hand and we've only been signing more deals since the end of last year, including signing our largest ever single order.

26:03 It's fair to say that supply chain constraints are gradually easing, certainly as David said, assisted by the introduction of the Valkyrie solution, but macro uncertainty remains. We continue to invest in augmenting our capabilities on an organic way through sense analyse apply to broaden our market applicability, as I've described earlier in this presentation. And we also continue to seek the right acquisitions, but at the right price to see an amplification of that value. What that all means is that we feel we're very well placed to capitalise on the smart sensing opportunity. Indeed, in summary, this first year of our five year plan was one of significant change, but also one of progress for OXFORD METRICS.

26:52 And now as a more focused business with a strengthened balance sheet and strong fundamentals, and an easing supply chain, and ongoing strong demand, in the marketplace, for our products and our our solutions, really, look forward to a new financial year of opportunity and growth. Thank you for listening. Nick, David, thank you very much indeed for your presentation. Ladies and gentlemen, please continue to submit your questions using the q and a tab situated on the top right corner of your screen. While the company take a few moments to review those questions submitted today, I would like to remind you that a recording of this presentation along with a copy of the slides and the published q and a can be accessed via your investor dashboard. Nick, David, as you can see, we have received a number of questions throughout today's presentation and thank you to all investors for submitting their questions. Nick, could I please ask you to read out the questions and give responses where appropriate to do so and I'll pick up from you at the end. Thank Thank you. Great.

27:52 Thank you. Thank you, Alex. David, I'm going to come to you for the second question on the list from from Jabbard A about buying back shares. So I'll come to you that in a moment. Don't forget to unmute your camera. So your microphone, you can unmute the camera, but unmute the microphone. Let me take first of all a question that came in pre registered from Steve Evans. Thanks very much Steve for coming in early with those questions. And again, I'd encourage IMC attendees, you can always ask questions actually before the session. So please go ahead and do that when we run these things again. And Steve's question is, Immersive Gamebox are hoping to open two fifty new venues in the next three years. How much do Viacom stand to gain if they manage to achieve this?

28:39 Thanks for the question. And I think it's worth saying that all of the different partners, first of all, that we've got within location based entertainment have slightly different solution needs. So an order from Sandbox is different from an order for a new site from Immersive Gamebox and you know and so on and so forth. Immersive Gamebox have a tremendous solution. The number of pods they have in their different sites vary slightly, but they're sort of between four and six pods per site. And in each one of those pods, they currently configure four cameras per pod. So a site might be somewhere between sixteen and twenty four cameras. And so you can do then do the maths on the number of venues beyond that. For us, it's a very exciting opportunity because really all of that, as well as the rollouts from Immersive Gamebox, from Sandbox, from Dreamscape and so forth, are all really effectively opportunity that's layered on top of the existing opportunity where we sell to an R and D unit inside a games company or university research centre. So I hope that answers your questions Steve.

29:46 David, why don't you read out the next question from Javed and then answer that. Yeah sure. So Javed has said, would the company consider buying back its own shares rather than further acquisitions? He goes on to say, I believe it would be hard to find large acquisitions on more attractive valuations than your own shares. I mean our primary goal here is obviously to succeed in terms of M and A but I think if we were unsuccessful and Nick has said that you know the environment is challenging, we certainly would consider returning funds to shareholders. There's obviously many mechanisms to do that and I think probably our most likely mechanism would be a tender offer but you know that's a little way off yet, we're you know really focused on the M and A side for the time being.

30:45 Great thanks David. I'm going to pick off the next question which is from someone curiously called Nick B and I've got to promise the audience it's not me asking myself questions, honestly I haven't touched the keyboard But welcome, Mick. To answer your question is, how are your competition performing in the current environment? Any opportunities you can take advantage of? Our three principal competitors, so there are others as well, are OXFORD METRICS from The US and Qualysys from Sweden. And actually, there's two private businesses or other. OXFORD METRICS is owned by a Chinese conglomerate, and we can't actually see their numbers. Qualysys is a little easier, but of course, it always lags the period quite significantly than the one we're actually trading in.

31:31 But beyond all of that, clearly we do see the competitors at trade shows and so forth, and I think it's fair to say that first of all as you saw from David's revenue graph, the market overall is growing for, for motion measurement and for integrated smart sensing, which a which is a good thing. And I think also, I think it's fair to say that we feel, confident about our market position, especially now given the introduction of the flagship solution in, Valkyrie. So, another way to maybe just look at this is that, you know, I started off, working for OXFORD METRICS in, in sales within the entertainment side. I was the first hire on that side. And if I was a salesman now on the entertainment side, I'd feel pretty confident about my abilities to win against the competition given the great strength that we've got within the customer base and within the newly launched product. So hopefully that gives you some color around the competition question.

32:24 David did you want to pick off David S's question there? David S has asked what is your appetite for further acquisitions, How had the Contemplus integration gone and what lessons for the future deals? Well yeah, we certainly do have an appetite for further acquisitions and the most recent one Contemplus has gone very well operationally, it's fully integrated and if you look closely in the accounts you'll also see that we pay further consideration in the year just gone. Contempla succeeded in achieving their first threshold for annual recurring revenues. In terms of lessons, I think there's another question coming up actually which will probably cover that off but I think we have learned our lessons from the past.

33:22 So yeah I think we'll pick up the rest of that a bit later Nick. Okay well thanks for covering that David. I'm going to answer now the question from SAPP and then perhaps David you could pick off the last two remaining questions after that. So SAPP asks, for the M and A, are you at any specific part of SENSE, Analyze, Apply? And also, which sector, engineering, entertainment, etcetera? I think it's straightforward. The answer on this is that we're interested in in all three areas of SENSE, Analyze, and Apply, and across those four markets of engineering, entertainment, sports and life sciences. And that really does provide us with a landscape on which we can then fill the hopper with a broader set of opportunities.

34:09 I think it's fair to say that we aren't going to go into the hardcore sensor market. So where we bought the inertial sensor solution from the business in New Zealand, I Measure U, that was really for what they were doing with that sensor. I don't see us going into the, say, image sensor business. Yeah? I think there are plenty of great companies there who serve them a variety of markets, but still it makes sense for us to, live from live from the products that they bring out rather than necessarily owning that asset. I'm not ruling that out, but more it's maybe about people who are using a specific off the peg sense, if it's a way they've applied it in order to gather sensed data that we've been monitoring.

34:56 The analysis side, I think that's an obvious place for us to play. As I said, the Contemplus deal falls exactly squarely in that space, And that really means that we can then leverage our existing customer relationships, 10,000 customers worldwide in over 70 different countries, and then actually have effectively have analysis software that will ignore augment both the appeal to existing audience, as well as to broaden the marketplace. And then even on the apply side, there are organisations who've got good embedding sales relationships with a variety of organisations. And if we can if we can find one of those businesses to add to our group, we can then give them access to the back catalogue of OXFORD METRICS capability and see that move through that channel. So the answer really is all three vectors and all four vertical markets.

35:44 Okay David back to you. Thank you Nick. So Vishal has asked the 15% adjusted PBT target, does this need rebasing given if you put your net cash on 4% deposit, hypothetically this would double your FY22 PBT. Should we be focused instead on EBIT margins? I think when the target was originally conceived, expect to do M and A obviously over the coming years and those acquisitions will add profits and earnings in the future. So for me, the adjusted PBT target still stands including interest but preferably it will include income from new acquisitions.

36:33 But I do take your point and also keeping an eye on both frankly, adjusted PBT and EBIT and I would draw your attention to the progressive note that is available on the website. In the headlines you've got the choice there of adjusted PBT and EBIT so yeah keep an eye on both. Jeremy Beers asked what experience do the OMG team have of successful acquisitions? Well I like to think we have been reasonably successful. I mean M and A is fraught with challenges but just looking back during my tenure, we acquired Sensing Systems in San Francisco to augment our defence business and that cost us about 8 to $9,000,000 on a very attractive multiple.

37:27 That business really unlocked The US market and gave us a great opportunity to develop that business, which ultimately led to the disposal to Boeing for $25,000,000 The Mayrise acquisition a few years back that formed the foundations to Yotta's success as it moved away from being a surveying business into a 100% software SaaS business. And we bought Mayrise on a multiple, on a very low multiple that you could probably only dream of today. But that I think was a very successful acquisition for us. Obviously ultimately led to the disposal recently to Causeway for £52,000,000 cash consideration.

38:13 More recently we bought iMeasure U in New Zealand. That too, that was an earn out deal. But the real nugget in there, Nick's already mentioned it, was the IMU sensor which fitted very nicely into the VICOM ecosystem and has been selling extremely well since then so I feel I Measure You was a success. And Contemplus too, that very much fitted with our strategic goals opening up video sensing from a strategic perspective and it's brought a lot to the parties. So I like to think we can offer evidence there of successful acquisitions. Excellent, thanks David. There's actually one more question coming from James Vee which we'll pick off. So you have a very impressive order book at the period end and large orders incoming since.

39:10 Might you run up against capacity constraints beyond just component availability? And what other operational issues does a strong demand pipeline create? Well, yes, it's a different type of problem, right? So when there's such strong demand in the marketplace, the way we handle production within, Vicon is through a very outsourced model. Most of it is here, within The UK or certainly within, Europe. So it's very near shored. So we have don't have that sort of vagaries of can we get stuff from the Far East to actually bring it in here. So we clearly have some supply chain that does stretch out there, but mostly it's here, within The UK. And so we make good use of that outsourced supply system.

40:00 So when we if we wanted to say double production, that doesn't mean a doubling of the number of people that we have working within production inside the our Oxford HQ. Rather, it's probably two or three people. I think we have is it nine, David, in production? So it would be a small add to expand that. But clearly, we do make greater demands of our supply chain. So yes, we do need the componentry in there, and we clearly give long visibility to our component suppliers so that they know where that is. I mean typically we run a period where we can rock and roll three months worth of orders, but these are exceptional times. And so we're giving very long forecasts, and as David might have pointed out from the inventory, we've taken a bit more stock and a commitment to stock in order to make sure we can do that. So really from a component availability, it's really about, you know, clear and open two way communication with our suppliers. I think it's also worth saying that the Valkyrie bill of materials was finalized in the crucible of the supply chain constraints.

41:04 And so in our conversations when we were bringing Valkyrie on stream and moving it into production, we can have very open conversations with those suppliers about, well, what is the allocation? When can we expect that? And so actually, think that's going to provide a great platform for us to be able to ramp up and scale up to that level. So that's really on the production side. Turning to the other aspects of operational issues of large levels of demand, well that really relates to support and installation. And so we've been hiring a few more people in support. We also leverage our own distributors and their support engineers to install those. Now customers also can sometimes can also self install, so that's available to them as well. But those are probably the two areas to focus on is what are we doing right within production to make sure we can meet that demand? And secondly, can we make sure that we can get our customers operational through the support and installation team? And I feel pretty good about those. We've seen this demand coming through, and so this has not been a surprise to us. It's something that we could build against.

42:06 So hopefully that covers your question, James. And hopefully that covers all the questions that any of you have had on this call. I think Alex, you're gonna come back in now? Nick, David, thank you for that and thank you. I think you've addressed those questions you can from investors. And of course the company will review all questions submitted today and we will publish responses on the Investor Meet company platform. Before redirecting investors to provide you with their feedback, which I know is particularly important to the company, could I please ask you for a few closing comments, Nick? Thank you. Sure. Well, firstly, thank you, Orey. Thank you for taking the time out of your schedules to attend our presentation this morning, during which we characterised the year as a period of significant change in strategic progress for OXFORD METRICS. We talked about the launch of the new five year plan, the premium disposal of the OTTR business and also the launch of Vicon Valkyrie. And all this progress is coupled with an ongoing strong demand picture. We have a healthy order book of £24,000,000 at the year end and since then we've signed our largest single, order.

43:09 We're also seeing an improving overall supply chain. We've talked about that during this presentation. Although global uncertainty does remain, we are clearly looking forward to an exciting year of growth ahead. Thanks again, and, I wish you all a happy Christmas and a happy New Year. Nick, David, thank you once again for updating investors today. Could I please ask investors not to close this session as you will now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations. This will only take a few moments to complete, and I'm sure will be greatly valued by the company. On behalf of the management team of OXFORD METRICS PLC, we would like to thank you for attending today's presentation. Good morning to you all. Thanks very much. Thank you.