4th Jun 2014 08:24
LONDON (Alliance News) - OMG PLC Wednesday reiterated confidence in meeting market expectations for the full year even as it reported a wider pretax loss the half year to end-March due to its new consumer segment struggling to take off.
OMG produces imaging technology for a variety of markets.
The company posted a pretax loss of GBP2.1 million, widened from a GBP736,000 loss in the previous year, as revenue rose to GBP14.3 million from GBP13.0 million, boosted by its acquisition of Mayrise in July 2013, but this was offset by higher costs mostly relating to the company's new consumer segment OMG Life.
In OMG Life, the company posted a pretax loss of GBP2.2 million, widened from GBP1.1 million, due to an increase in research and development amortisation of GBP500,000, and increased sales and marketing activity.
The company said that, due to the newness of the products and its relatively limited marketing resources, it had not been able to engage with as many customers as it would have like to. However, OMG highlighted the growing trend of 'wearable' technology as a key market for its Autographer wearable camera.
OMG said Autographer has been picked up by a number of specialist stores, and it is continuing discussions with larger US and European retail chains. It is also considering how to add value to the product through its intellectual property. It has filed patents on some of its wearable imaging and image management software.
It is also in discussions about potential licensing and partnerships of this intellectual property.
In its motion capture business Vicon, pretax profit declined to GBP1.6 million from GBP2.3 million during the year, as a weaker performance in the US offset growth in the UK and rest of the world. Margins continued to face pressure from the competitive entertainment market.
During the year, the division won new customers including video-game studios Quantic Dream and Konami for motion capture cameras. It also signed up the US Army Research Lab and Naval Warfare Systems Command for UAV tracking systems.
Vicon's systems were also used for game and film releases during the year, including the Oscar winning 'Gravity', Electronic Art's 'Battlefield 4', and the upcoming 'Transformers: Age of Extinction'.
In OMG's surveying, software and services business Yotta, the company posted a pretax loss of GBP200,000, narrowed from GBP500,000, as revenues were boosted by the incorporation of Mayrise. During the year Yotta won further software customers including the London Borough of Tower Hamlets, Telfor And Wrekin Council and Gloucestershire County Council.
It also won a contract with the Highways Agency for its Horizon software as a service.
Yotta's survey activities were hit by the wet winter. However, it won new business with the Liverpool, Hertfordshire and Hampshire Councils.
OMG's 2d3 business, which provides imagery products for the defence and civil aviation industry, saw a pretax loss of GBP1.0 million, narrowed from GBP1.2 million, as a strong performance in the UK helped boost results. The company secured further contracts with the US National Geospatial Agency, and the UK Ministry of Defence.
This business is expected to see results skewed towards the second half, as its year end coincides with the US fiscal year end, and it remains dependent on the US Defence market.
Excluding OMG life, the company expects to meet market expectations for revenue and pretax profit, and said its overall loss from OMG Life will be in line with market expectations.
Shares in OMG were trading down 1.8% at 27.00 pence Wednesday morning.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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