Loss reversed at video firm
Product changes put IndigoVision in profit
Scottish video security company IndigoVision returned to profitability following a restructuring of its balance sheet and product development.
The Edinburgh-based company said second half sales were 11% higher than the first half – and second half underlying operating profits were $0.63m, compared with an operating loss of $0.28m in the first half.
Underlying operating profit in 2016 amounted to $0.36m, an improvement of $1.11m over the prior year.
Progress to date, and the strong cash position, has encouraged the board to recommend an increased dividend and a final dividend of 3p per share, 20% higher than last year.
The group has undertaken a review of its balance sheet and its internal controls and says an additional bad debt provision of $0.30m has been recognised relating to an historic situation. Net of this provision, the operating profit for the year was $0.06m (2015: operating loss of $0.74m)
The group continues to benefit from research and development tax credits which resulted in a net current tax credit of $0.37m (2015: $0.75m).
Chairman Hamish Grossart said: “The return to profitability in 2016 is very positive, as is the evidence that IndigoVision is adapting well to changed market conditions.
“The group continues to strengthen its software development team and aims to launch three further releases of its control centre software in 2017, offering increased features and functionality for the benefit of its customers.
“The start of 2017 was quiet, but sales and orders strengthened markedly in February. The immediate outlook looks encouraging and the group continues to invest in strengthening the sales team in its key markets. The board therefore currently expects that 2017 will see IndigoVision report further progress. “
Marcus Kneen, chief executive, added: “The results for 2016 were a good improvement on 2015, notwithstanding falling prices across the market as a whole.
“The tiered camera offering we introduced last year has been well received and we have now extended this concept to software, enabling IndigoVision’s products to be competitive in all sectors of the market.
“We look forward to making further progress in 2017, with a strengthened team, broader product offering, and new market opportunities.”
· Revenues of $46.0m (2015: $47.1m)
· Underlying operating profit $0.4m (2015 operating loss: $0.7m)
· Profit before tax $0.1m (2015: loss $0.7m)
· Net cash balance of $6.2m (2015: $2.8m)
· Adjusted earnings per share 9.0 cents (2015: 0.0 cents) before deferred tax
· Diluted loss per share 37.3 cents (2015 loss per share: 6.5 cents)
· Proposed final dividend of 3.0 pence per share (2015: 2.5 pence per share)
· Management action returned the business to operating profitability in 2016:
o New senior management and strengthened sales leadership in the Americas and EMEA
o Overheads before foreign exchange gains/losses reduced by 7% to $23.2m (2015: $25.0m)
· Large project wins:
o Safe cities
· Restructure of hardware design capability completed in January 2016
· Successful launch of three-tiered Control Center software in November 2016
· Sale volumes of software licences, cameras and encoders all increased by over 25% year-on-year.