IndigoVision posts a loss after sales slowdown
The Edinburgh-based firm, which provides digital CCTV systems for clients including airports, banks and casinos, also scrapped its interim dividend after being hit by “economic and political challenges” in some regions.
However, chairman Hamish Grossart said trading was expected to pick up in the second half, and the company expects to recommend a final dividend alongside its full-year results.
He added: “The pipeline of large projects for the second half is significantly stronger than the first half and, as a consequence of this and management actions taken to reduce costs, profitability in the second half is expected comfortably to exceed first half losses.”
Despite Grossart’s upbeat comments, shares in the Aim-quoted firm ended the session down 24p at 219.5p – a decline of almost 10 per cent. IndigoVision warned in April that its annual results would fall short of City hopes following a sales slowdown.
The company said at the time that sales were “lumpy” in nature and it had been unable to replicate a large number of contract wins it enjoyed a year ago.
Yesterday, the firm – headed by chief executive Marcus Kneen – posted a pre-tax loss of $1.26 million (£810,000) for the six months to the end of June, compared with a $1.73m profit a year earlier.
First-half revenues dropped 29 per cent to $22.6m, with sharp sales falls in Asia Pacific and Latin America, where trading was hit by a “rapid reduction” in spending across the Brazilian oil and gas market.
Kneen said: “Latin America and the Middle East are now starting to show an improving sales trend. The group’s activity is weighted towards enterprise markets where revenues are materially impacted by project timing and the wider economic backdrop, and these factors affected the first-half performance.”
However, he said project wins were set to pick up as the year progresses, highlighting the Americas and Middle East as particular hot spots of activity.
“Although the first half was disappointing, IndigoVision is in a good position to progress in the second half,” Kneen told investors.
During the first half, IndigoVision launched its first wearable camera to be fully integrated into its core video management software, aimed at front-line staff such as the police, emergency services, healthcare workers and security staff. The device is designed to reduce aggressive behaviour, provide audio and video evidence and reduce potential liability claims, the firm said.
It also picked up “major project wins” in Colombia, an Egyptian bank and a large casino in California, along with installations for the industrial, mining, petrochemicals, residential, retail and telecoms sectors.
IndigoVision, founded in 1994, is also set to roll out a revamp of its brand during the final quarter of the year, which Grossart said was designed to improve leads for its sales account managers.
He added: “We continue to believe that the discipline of paying dividends to shareholders benefits the business and its planning.
“It is also our policy that dividends relate to earnings and, given the first-half loss, the board has decided not to pay an interim dividend this year. We currently expect to recommend a final dividend to shareholders along with the annual results.”