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Other considerations aside, it would seem that the seller(s) is/are back. I wouldn't be wholly surprised to see this morning's early gain pared back later in the day. It's all a bit galling.
I'm not saying there aren't synergies. I'm just saying that the synergies aren't as "transparent" as you suggest from the RNS. I think the company could have spelt out the benefits better in the RNS.
As far as I'm aware, OMG's current engineering offering is built around design and modelling, rather than real-time manufacturing. On the other hand, it would seem that IVS's current offering is built around not-intrusive, real-time inspection. They're not necessarily complimentary but, that said, it would appear that OMG sees a business opportunity to augment IVS's existing static sensing with its own dynamic sensing. I'm not exactly sure what that would mean in practise; I have a vague idea but I'm not sure how much larger the addressable market would be (it sounds a bit niche).
It’s always good to hear different angles. However, I’ll go with what the Company is saying re strategic synergies.
“ Expanding market opportunities in smart sensing: by leveraging the Group's platform, IVS will have the access, expertise and resources to scale. There are clear opportunities to expand its geographic footprint and grow its IP-rich static technology offering with prospects to benefit from Vicon's dynamic sensing.”
"Strategic synergies seem very transparent"
On the face of it I don't thinks it's at all transparent. For starters OMG and IVS seem to operate in different market sectors with (seemingly) different requirements and little or no apparent crossover. IVS's 6% annual organic growth looks pretty anaemic (albeit better than no growth or sales in decline). One would assume that OMG sees the opportunities to cross-sell and grow both businesses although how the engineering modelling features of the one and the manufacturing inspection features of the other are complimentary is not abundantly clear from the RNS.
Clearly OMG has cash resources that could potentially create expansion opportunities for IVS that it would not currently be able to pursue as a standalone company. Also, being part of a bigger, financially sound group could create additional sales opportunities for IVS (some businesses are reluctant to deal with small suppliers).
We'll have to see but I certainly hope that OMG is not buying IVS with a view to just maintaining its existing sales growth.
Paying 10x EBIT does look (slightly) expensive when you consider that OMG, as of this morning, is currently valued at only c8.5x forecast FY23 PBT (after you strip out its cash pile).
Https://businesscloud.co.uk/news/oxford-metrics-plc-senses-value-in-8-1m-swoop/
What makes you think they overpaid?
It’s been a very long wait since the sale of Yotta back in May 2022. Months of due diligence no doubt and the strategic synergies seem very transparent. An exciting acquisition imo.
I suspect they maybe overpaid. I topped up after results as I think OMG is very undervalued. Prima facia I am unsure about todays acquisition. Let's see how the market sees it on open.
He he, that made me smile
All things considered, it's been a fairly anaemic share price response to yesterday's RNS. When they said come back on St Ledger's Day I didn't realise that they meant next year!
Mmmm very annoying those sellers
Despite all that, selling persists. There's no satisfying some investors it would appear.
Sounds good
Revenue & PBT market expectations eclipsed.
Bolt on “ The Group finished the year with a robust cash position of £64.8m and no debt.”
Strong order book going into new financial year.
Back to £1+ in near term very likely.
And then we see if that holds.
took a couple of days but nice to see it picking trades now.
Broker notes seem bullish with new ceo
Either that or there's a seller holding back the rise.
but, either way, the seller sells and then it rises or the buyer has their fill and the sp rises.
90p+ in mind...
A growth sector and 2/3 of mkt cap in cash. The shares seem very weak, for what looks on the surface an attractive investment.
Especially with this kind of unannounced news.
https://oxfordmetrics.com/news/2023-08-01/vicon-enters-markerless-market-with-unparalleled-accuracy
Trading would have to completely nosedive to only produce 3.8p for this year, with 2.5p in the bag. I wouldn't pay too much attention to broker forecasts
Consensus for both FY23 and FY24 is much lower than that and has been reduced in the last week
Stockopedia reported consensus forecasts
2.5p earnings were achieved in H1, so at least 5p for FY? H2 usually more weighted too. I would be hoping for at least 7p FY 24, which net of cash would put this on a forward PE of 10.
Hello,
Who gave those forecasts please?
6th June 2023
Adjusted* Basic Earnings per Share 2.64p
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.
3rd August - forecast FY23 eps 3.523p FY24 4.163p
10th August - forecast FY23 eps 3.235p FY24 3.895p
i.e. reduction in forecast of 8.2% for FY23 and 6.5% for FY24
what is going on here? Slipping out a profit warning reduction through the brokers while claiming they will be ahead of forecasts