Pre Close Trading Update
30 October 2017
The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain
PRE-CLOSE TRADING UPDATE
Image Scan (AIM: IGE), the specialist supplier of X-ray screening systems to the security and industrial inspection markets provides a pre-close trading update ahead of its results for the year ended 30 September 2017.
· Sales of £5.0m (2016: £3.3m) at a gross margin of 39% (2016: 42%)
· Unaudited profit before tax of approximately £480k (2016: £105k)
· Sales of portable X-ray systems increased 65% over the prior year
· ThreatScan®-LS1 systems sold extensively in Asia, the Middle East and Europe, while the entry level ThreatScan®-Lite system sold strongly in the Indian subcontinent
· New customers gained in all target export markets
· New compact detector panel, the ThreatScan®-LS3, was launched and sales generated
· Industrial systems were delivered in the UK, Eastern Europe and South America
· Record order intake for the year totalled £5.4m (2016: £4.3m)
· Outstanding order book at the end of the period of £2.1m (2016: £1.7m)
· £1.2m of cash at the end of the period (2016: £1.1m)
Sales increased by over 50% to £5.0m (2016: £3.3m) driven primarily by a 65% increase in the number of portable X-ray systems sold to customers around the world. The Company made strong progress in penetrating new markets in the Indian subcontinent, achieved primarily with the entry level ThreatScan®-Lite system. This vindicates the Company’s product strategy, developing different system configurations to match the price and performance requirements of individual regional markets and customer types.
Industrial inspection X-ray units for inspection of catalytic converters in the automotive industry were delivered to customers in the UK, Eastern Europe and South America. An important customer started to deploy the system into its global manufacturing centres after extensive trials at its European base.
Gross margins decreased slightly to 39% (2016: 42%) reflecting a change in product mix and selective use of aggressive pricing to break into new markets. Overheads increased to £1.5m (2016: £1.3m) and included substantial budgeted expenditure on both Research and Development and Sales and Marketing. This represented a relative decrease to 30% of sales (2016: 39% of sales). Subject to any audit adjustments, profit before tax increased to almost 10% of sales at approximately £480k (2016: £105k).
The research and development team successfully developed and integrated upgrades into the ThreatScan®-LS1 system during the year and the smaller ThreatScan®-LS3 was launched after an accelerated development programme. The decision to prioritise the LS3 development was driven by market demand and resulted in a delay in the launch of the Precision Linescan Detector (“PLD”). However, a second prototype of the PLD has been built, is being tested and will be exhibited for the first time at the Milipol security show in Paris in November.
Having secured a record level of orders during the year totaling £5.4m (2016: £4.3m), the Company starts FY 2018 with an order book of £2.1m (2016: £1.7m). The year ended with a positive cash balance of £1.2m (2016: £1.1m).
The Company expects to announce its preliminary results in early December.
Image Scan’s Chairman and Chief Executive, Bill Mawer, commented: “To achieve a 50% growth in sales and a five-fold increases in profit is an achievement the directors and staff are exceptionally proud of. We have successfully launched important new products and penetrated valuable new markets. I was also pleased with how our operations team and our supply chain handled wide variations in our manufacturing activity though the year. We start the new year with a good order book, new products and an ambitious team, who are looking to continue the strong momentum of the Company.”
For further information, please contact:
Image Scan Holdings plc Tel: +44 (0) 1509 817400
William Mawer, Chairman
Sarah Atwell-King, Company Secretary
Cantor Fitzgerald Europe Tel: +44 (0) 207 894 7000
Rick Thompson / David Foreman (Corporate Finance)
Alex Pollen / Caspar Shand Kydd (Sales)
About Image Scan Holdings plc
Image Scan Holdings plc (AIM: IGE) is focused on the development and commercialisation of market leading real-time X-ray solutions for use in the global Security and Industrial inspection markets. The Company’s Security portfolio includes the ThreatScan® range of portable bomb and suspect package detection systems; the Axis range of baggage inspection systems; and SVXi, a small vehicle inspection system. The Industrial inspection solutions include the MDXi product range, cabinet X-ray systems for laboratories and production lines. The Company was founded in 1996 and joined AIM in 2002.