Products and Services Offered by Oxford Metrics Group - Case Study Example

INTRODUCTION OMG (Oxford Metrics Group) is a supplier of motion capture and visual geometric systems for the life and sciences sectors. The market for these products is a niche one and is highly segmented and fragmented along the product lines that the players produce. This is a report about the OMG company and its forays into the market segments listed above along with the sectors in which it operates and the happenings I the company over the last twelve months. This report is being prepared upon request by ABC Investment Company that wants an overview of OMG and its presence in the various markets. This report highlights the successes of the OMG group of companies and details the strides made by them in recent years. The OMG group is listed on the Alternative Investment Market of the London Stock Exchange and is quite actively traded in this segment. This report covers the background of the company as well as the products and services being offered by the company. It also dwells on the sectors that the company operates in along with the news of the company over the last one year. The financials are touched upon briefly and the emphasis is on a factual information report about the group and its activities. BACKGROUND OF THE COMPANY The OMG group of companies are a conglomerate of three companies that cater to the motion capture and imaging solutions segment of the market. They produce visual geometric services to the life sciences, defence and engineering industries. The companies that make up the group are Vicon, 2d3 and Yotta. These companies operate in various segments of the market for visual and geometric applications and are among the market leaders in the respective segments. The OMG group of companies was founded in 1984 and is headquartered in Oxford, UK with its presence extending to over 50 countries across the globe. The reach of the OMG group is indeed large and its footprint wide in covering all the areas of the world and operating in segments that span the industries mentioned above. The OMG group is responsible for supplying night vision and motion capture devices to the defence sector as well and is among the preferred suppliers for the British Army. The group has offices in Colorado and California in the US and is in the process of expanding its operations there. The OMG group operates primarily through its subsidiaries - Vicon, the world’s biggest motion capture and movement analysis company, 2d3, a manufacturer of specialised image understanding software for entertainment and defence applications and Yotta, our 3D mapping business (OMG.com, 2009). The three subsidiaries of the company put together generate around $40 Million USD in sales every year and employ 120 people across the world. Among the subsidiaries, Vicon makes devices for capture of human and animal motion and tracking devices that help in visualising the motion in two dimensional and three dimensional modes. These products are used to provide high resolution images to the research laboratories and Vicon strives continuously to upgrade its products in cutting edge areas of the motion capture and image analysis space. The other group company, 2d3 specialises in making products that make better use of the imagery that they have and those products can be used for surveillance and tracking purposes. The company also makes products that are used in real time tracking and aerial surveillance from Unmanned Aerial Vehicles. These products find extensive application in the defence industries and as mentioned in the first section, OMG and its subsidiaries are among the preferred suppliers for the defence industry. The third group company, Yotta, specialises in providing highway authorities the necessary tools and means to capture images of moving cars and other vehicles and thus aid in their capability to monitor the movements of the vehicles and report violations if any. As can be seen in this section, OMG and its group companies are mainly into what can be called surveillance aiding devices and thus the market for their products are primarily defence and law enforcement agencies. In the aftermath of 911 when the surveillance was stepped up across the world, OMG found a readymade market for its products from intelligence agencies and agencies involved in surveillance of the public. PRODUCTS AND SERVICES The main products that the company makes are human animal motion 3D capture, government surveillance reconnaissance camera tracking software, architectural prototyping, highway data management, motion tacking cameras, software. The products and services that OMG supplies have to do with capture of moving objects and number and image identification devices that aid in visual and geometric capture of moving objects. The products that the group supplies include the license plate capture devices that are used by traffic enforcement authorities worldwide to check the license plates of the motorists and report violations. Apart from these products, the group also manufactures Cameras and CCD machine vision cameras that aid in the closed circuit capture of images and their representation across the segments. The group also makes and markets the Video Image grabber device that can be used to spot minute details in the video grabs made by the media and other sectors. The range of products and services that the company and its subsidiaries make are primarily in the motion capture and geometric vision aiding devices. The group specialises in making devices like the Video Image DSP signal boards that help in detecting the image at a very fine granular level and something that can be used in early warning systems that rely on analysis of images to detect warning signals. OPERATING SECTORS The company operates in the market segments related to visual and aerial surveillance and law enforcement. The digital camera processor products along with the motion capture products are used to analyse images and provide high resolution services to the defence and traffic management sectors. The company specialises in providing automatic machine vision enhancement products that help in scouring the images of machines and their operations resulting in a kind of robotic control of the machines. Apart from these sectors, the company also operates in the fields of research and development in the academic and high tech research fields. There are several universities in the UK that are consumers of the products that OMG makes and markets. These include the Leicester University and Loughborough University that specialise in high definition research on cutting edge topics and are consumers of the products that OMG makes. OVERVIEW OF THE LAST ONE YEAR The overview of the last one year would include the fact that revenue is up 7.0% to £13.6m (H108: £12.7m) on a year-on-year basis, the Adjusted profit before tax, pre-restructuring costs, of £1.1m (H108: £1.2m) and the Reported Profit before Tax of £0.9m (H108: £1.2m). Further, the cash position remains healthy at £2.1m (H108: £2.9m) following Vicon and Yotta restructuring and further investment in the future growth of the business and most importantly the Group remains debt-free. (OMG3d.com, 2009). Among the three subsidiaries, Vicon is showing the most promise whereas Yotta is coming under pricing pressure. However, the business pipeline is encouraging and the 2d3 company has shown further progress in its goal of establishing a presence in the European Market. THREATS AND OPPORTUNITIES As with several other companies, OMG and its group companies are feeling the effect of the recession and due to this Vicon has lost some revenues in the North American segment due to the prevailing economic conditions in the market there. According to the interim results for 2009, “The lengthened sales cycles and the general economic weaknesses in the US have had a marked impact on both Vicon and Yotta. This condition is further exacerbated by a rising dollar. Yotta has also suffered from pricing pressure in the UK” (Interim Report, 2009). The company has started to focus on the Chinese market and this is one segment where the company is showing promising results. This is the area of opportunity for the group and it is expected that they would make the most of this new market that is opening up. However, the company has to guard against rising costs and hence it is putting in place a comprehensive cost cutting mechanism that would deal with the rising costs of doing business. KEY FINDINGS In this section, we summarise the key findings of this report: - OMG or Oxford Metrics Group is the market leader in visual and geometric solutions - OMG is comprised of three subsidiaries: Vicon, 2d3 and Yotta - OMG has revenues of nearly $40 Million USD and employs 120 people - OMG has presence in 50 countries across the world and has an extensive footprint in the US - OMG is foraying into China and is looking at the country as a potential growth area - OMG primarily supplies products to the defence and law enforcement industries - The group makes products that aid in surveillance and monitoring of images and image capture devices - The group also supplies products to the academic and high tech research fields. - The last one year has been a mixed bag for OMG because of the economic slowdown - The group companies are coming under pricing pressure - The group has launched an initiative to cut costs and focus on strengthening its core areas Sources Interim Results for 2009. Retrieved Aug 25, 2009 from: http://www.omg3d.com/html/documents/OMGplcInterimResults230609.pdf Official Website of OMG group. Retrieved Aug 25, 2009 from: http://www.omg3d.com/html/index.html Overview of OMG. Retrieved Aug 25, 2009 from: http://www.medibix.com/company.jsp?company_id=9995447 Read More