Shares digital

The image group is on target with US defence

by Russ Mould

A second breakthrough contract in the US for OMG’s (OMG:AIM) 2d3 unit is further proof the company is successfully driving its expertise into new growth markets and investors should seek to pick up the stock. Recent weakness means the shares lie at 50p – some 24% below their year high.

Visual geometry specialist OMG has scooped a $300,000 deal from the US Defense Threat Reduction Agency (DTRA) to develop a proof-of-concept software application to recreate 3-D maps of terrain and measure objects as seen from unmanned aerial vehicles (UAVs).

This contract win follows a deal to deploy 2d3’s technology in UAVs manufactured by US defence giant Northrop Grumman to help the units sense and avoid other aircraft. The Oxford firm had already won similar deals from the UK’s Ministry of Defence last summer.

OMG’s other early-stage units, 3-D mapping business Yotta and visual services arm Springboard, have also continued to show good momentum. Interim sales at Yotta reached £2.6 million and Springboard, which was only launched in April, won its first deal in July – a $120,000 contract from US conglomerate GE.

For a firm that generates roughly half of its sales in America, the dollar’s surge to $1.7667 against the pound, 16% above where it was last November, is a further plus, even if the firm’s US operations mean the effect is largely translational rather than transactional.

Shares says: A prospective PE of 17.2 is misleading as the trio of new units are in loss and the core business Vicon looks undervalued. Buy