TIDMIGE
RNS Number : 3152D
Image Scan Holdings PLC
26 April 2017
Image Scan Holdings plc
Interim report 2017
26/04/2017
IMAGE SCAN HOLDINGS PLC
("Image Scan" or the "Company")
(AIM: IGE)
INTERIM RESULTS
Good momentum in core markets delivers growth
Image Scan, (AIM: IGE) specialists in the field of X-ray imaging
for the security and industrial inspection markets today announces
its interim results for the six months ended 31 March 2017. Given
performance during the first six months, the Board remains
confident of meeting market expectations for the year to 30
September 2017.
Financial summary:
-- Revenue up 50% to GBP2.1m (2016: GBP1.4m)
-- Gross profit margin down to 39% due to sales mix (2016: 44%)
-- Profit before taxation of GBP111k (2016: loss of GBP44k)
-- Period end bank balance of GBP469k (2016: GBP532k)
-- Period end order book up 48% to GBP940k (2016: GBP634k)
-- Order intake of GBP1.3m (2016: GBP1.3m)
Operational highlights:
-- 70% increase in number of portable X-ray units sold over the prior period
-- Major customer deliveries made ahead of schedule
-- New portable X-ray customers in Asian and European markets
-- New compact detector panel developed and launched at Asian security exhibition
-- Development phase of the Government supported Precision Linescan Detector project completed
-- Industrial inspection system selected for a new plant by a
recent customer, following extensive trials
Bill Mawer, Chairman and Chief Executive Officer of Image Scan,
commented: "This period shows continued strong momentum in the
business with sales and profits well ahead of the equivalent period
in the prior year, while order intake remained constant. The
ThreatScan(R)-LS1 system has continued to be popular with military
and police bomb technicians around the world and has now been
joined by the compact ThreatScan(R)-LS3. This new unit offers the
same superior performance as the LS1 but in a compact format that
can be deployed in a backpack by mobile explosives ordnance
disposal teams. The forthcoming ThreatScan(R)-PLD (Precision
Linescan Detector), developed with Government support, will
complete the renewal of our portable X-ray product range, in line
with the strategy set out two years ago.
In our industrial inspection area, new orders have been received
and the activity levels remain high, both on new unit sales and
customer funded development work.
The order pipeline in both of our principal markets remains
robust and, with new products being introduced to the market, the
company looks to the future with confidence."
For further information on the Company, please visit:
www.ish.co.uk and for further information on its products, please
visit: www.3dx-ray.com
Enquiries:
------------------------------------------ ------------------
Image Scan Holdings plc Tel: +44 (0) 1509
Bill Mawer, Chairman and Chief Executive 817 400
Officer ir@ish.co.uk
Sarah Atwell King, Company Secretary
------------------------------------------ ------------------
Cantor Fitzgerald Europe (Nominated Tel: +44 (0) 207
Adviser and Broker) 894 7000
Rick Thompson / David Foreman / Michael
Reynolds (Corporate Finance)
David Banks /Alex Pollen (Sales)
------------------------------------------ ------------------
Chairman's statement
Introduction
Image Scan Holdings plc is a specialist in innovative X-ray
technology, operating globally in the security and industrial
inspection sectors. The Group's principal activity is the design,
manufacture and supply of both portable and fixed X-ray security
screening systems to governments, security organisations and law
enforcement agencies. The Group also supplies high-quality image
acquisition systems for non-destructive testing to commercial
organisations worldwide.
Financial results
Revenues for the six months ended 31 March 2017 were GBP2.1m
(2016: GBP1.4m), 50% higher than the prior period. The improved
performance was driven by portable X-ray system sales, the number
of units delivered increasing by 70%. Gross margin was reduced at
39% (2016: 44%) due to changes in the sales mix.
New customers, using Image Scan products for the first time,
have been achieved in both Asia and Europe. Despite the 50%
increase in activity levels, overheads were tightly controlled at
GBP695k (2016: GBP670k). This allowed the business to make a
post-tax profit of GBP111k (2016: loss of GBP64k).
New orders were received for both security and industrial units,
total new orders being similar to the prior period at GBP1.3m
(2016: GBP1.3m), leaving the Company with a period end order book
up 48% at GBP940k (2016: 634k).
The company held GBP469k in cash at the period end (2016:
GBP532k).
Overview
The strong performance of our manufacturing and supply chain
management functions continued into FY2017, with several large
customer orders delivered ahead of schedule. We achieved
manufacturing efficiencies in response to the continued high volume
of activity, working closely with key component and subsystem
suppliers.
Our portable X-ray systems continue to be displayed and trialled
across the world and this has led to valuable new orders and a
strong pipeline of further opportunities. During the period, it was
decided to accelerate the planned development of a compact detector
panel designated the ThreatScan(R)-LS3. In less than two months the
system was designed, prototyped and tested before being integrated
into our control software and sent to an Asian security exhibition
for customer presentations. The success of this exercise
demonstrated the advantages of the flexible, modular architecture
used in both the hardware and software of our X-ray systems.
The development phase of the government grant supported project
to design a new generation of Precision Linescan Detectors has come
to an end and the prototype will be on display for the first time
at the Security and Counter Terror exhibition at Olympia in May.
The outstanding pre-launch tasks relate to final optimisation of
the software and transfer to production. Once this is complete,
Image Scan's portable X-ray product range will include two X-ray
generators, three sizes of detector panels with varying performance
options, a complete suite of control and image analysis software
and a wide range of ancillaries, all developed over the last 30
months.
In the industrial inspection business area, where the Company
provides machines for scanning catalytic converters and diesel
particulate filters in the automotive industry, applications
development work focussed on techniques for scanning larger parts
and on greater software integration across machines. A relatively
recent customer, who has been carrying out an extended evaluation
of the MDXi400 industrial inspection system, ordered a new unit for
operational deployment in Eastern Europe, an important
milestone.
The Company continues to focus on Quality Control and process
improvements with new metrics and management systems introduced
during the period.
Outlook
The Company's much expanded range of portable X-ray inspection
systems leaves it well positioned to benefit from continued high
levels of focus on the ongoing global threat of terrorist attack.
Further enhancements and innovations are planned that should allow
the Company to maintain its recent momentum in this exciting
market.
Our industrial customers report a strengthening focus on
automotive emission controls, with new and tighter regulations
being introduced in several territories. This should drive demand
for emission control systems and strengthen the need for quality
control in their manufacture, both trends that support deployment
of our highly specialised X-ray inspection systems.
Our short-term focus is to accelerate the marketing of the new
range of portable X-ray machines to security customers around the
world, building on the considerable momentum already achieved,
while increasing the deployment of our inspection systems in
automotive emissions control. However, the Board believes the
Company is capable of further expansion and is looking for
additional opportunities for both organic and acquisition
growth.
The staff at Image Scan are enthusiastic, dedicated and creative
and on behalf of my fellow Board members, I would like to formally
thank our staff for their contribution during this period.
Bill Mawer
Chairman and Chief Executive Officer
25/04/2017
Consolidated income statement
For the six months ended 31 March 2017
Six months Year
Six months ended
ended ended 30 September
31 March 31 March
2017 2016 2016
(Unaudited) (Unaudited) (Audited)
Note GBP'000 GBP'000 GBP'000
------------------------------- ----- ---------------- ------------------ -----------------
Revenue 2,086 1,372 3,315
-------------------------------------- ---------------- ------------------ -----------------
Cost of sales (1,280) (766) (1,911)
-------------------------------------- ---------------- ------------------ -----------------
Gross profit 806 606 1,404
-------------------------------------- ---------------- ------------------ -----------------
Other Operating Income [3] - 20 78
------------------------------- ----- ---------------- ------------------ -----------------
Operating expenses (695) (670) (1,378)
-------------------------------------- ---------------- ------------------ -----------------
Operating profit /(loss) 111 (44) 104
-------------------------------------- ---------------- ------------------ -----------------
Finance income - - 1
-------------------------------------- ---------------- ------------------ -----------------
Profit/ (loss) before taxation 111 (44) 105
-------------------------------------- ---------------- ------------------ -----------------
Taxation - - -
------------------------------- ----- ---------------- ------------------ -----------------
Profit/(loss) for the period 111 (44) 105
-------------------------------------- ---------------- ------------------ -----------------
Pence Pence Pence
-------------------------------- ---- ----- ------ -----
Earnings per share
-------------------------------- ---- ----- ------ -----
Basic profit/(loss) per share [4] 0.09 (0.04) 0.08
-------------------------------- ---- ----- ------ -----
Diluted profit/(loss) per share 0.09 - 0.08
-------------------------------------- ----- ------ -----
Consolidated statement of changes in equity
For the six months ended 31 March 2017
Six Six Year
months months ended
ended ended 30 September
31 March 31 March
2017 2016 2016
(Unaudited) (Unaudited) (Audited)
Note GBP'000 GBP'000 GBP'000
------------------------------------- ----- ------------- ------------- -------------
Opening equity shareholders' funds 740 617 617
-------------------------------------------- ------------- ------------- -------------
Share-based payments [5] 5 8 18
------------------------------------- ----- ------------- ------------- -------------
Profit/(loss) attributable to equity
shareholders 111 (44) 105
-------------------------------------------- ------------- ------------- -------------
856 581 740
------------------------------------------- ------------- ------------- -------------
Consolidated statement of financial position
As at 31 March 2017
As at As at
31 March
2017 As at 30 September
(Unaudited) 31 March
2016 2016
GBP'000 (Unaudited) (Audited)
GBP'000 GBP'000
--------------------------------------- ------------ ------------ ------------------
Non-current assets
--------------------------------------- ------------ ------------ ------------------
Plant and equipment 31 11 17
--------------------------------------- ------------ ------------ ------------------
31 11 17
--------------------------------------- ------------ ------------ ------------------
Current assets
--------------------------------------- ------------ ------------ ------------------
Inventories 700 459 504
--------------------------------------- ------------ ------------ ------------------
Trade and other receivables 652 354 842
--------------------------------------- ------------ ------------ ------------------
Cash and cash equivalents 469 532 1,055
--------------------------------------- ------------ ------------ ------------------
1,821 1,345 2,401
--------------------------------------- ------------ ------------ ------------------
Total assets 1,852 1,356 2,418
--------------------------------------- ------------ ------------ ------------------
Current liabilities
--------------------------------------- ------------ ------------ ------------------
Trade and other payables 929 742 1,627
--------------------------------------- ------------ ------------ ------------------
Non-current liabilities
--------------------------------------- ------------ ------------ ------------------
Provisions for liabilities and charges 67 33 51
--------------------------------------- ------------ ------------ ------------------
Total liabilities 996 775 1,678
--------------------------------------- ------------ ------------ ------------------
Net assets 856 581 740
--------------------------------------- ------------ ------------ ------------------
Equity
--------------------------------------- ------------ ------------ ------------------
Share capital 1,256 1,256 1,256
--------------------------------------- ------------ ------------ ------------------
Share premium account 7,935 7,935 7,935
--------------------------------------- ------------ ------------ ------------------
Retained earnings (8,335) (8,610) (8,451)
--------------------------------------- ------------ ------------ ------------------
Equity shareholders' funds 856 581 740
--------------------------------------- ------------ ------------ ------------------
Consolidated cash flow statement
For the six months ended 31 March 2017
Six Six Year
months months ended
ended ended 30 September
31 March 31 March
2017 2016 2016
(Unaudited) (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
------------------------------------------- ------------- -------------- ---------------
Cash flows from operating activities
------------------------------------------- ------------- -------------- ---------------
Operating profit/(loss) 111 (44) 105
------------------------------------------- ------------- -------------- ---------------
Adjustments for:
------------------------------------------- ------------- -------------- ---------------
Depreciation 6 2 6
------------------------------------------- ------------- -------------- ---------------
Impairment of inventories 13 10 14
------------------------------------------- ------------- -------------- ---------------
Increase in provision for warranty 16 - 18
------------------------------------------- ------------- -------------- ---------------
(Increase)/decrease in inventories (209) 102 53
------------------------------------------- ------------- -------------- ---------------
Decrease/(increase) in trade and other
receivables 190 30 (459)
------------------------------------------- ------------- -------------- ---------------
(Decrease)/increase in trade and other
payables (698) (36) 849
------------------------------------------- ------------- -------------- ---------------
Share-based payment charge 5 8 18
------------------------------------------- ------------- -------------- ---------------
Net cash (used)/generated in operating
activities (566) 72 604
------------------------------------------- ------------- -------------- ---------------
Corporation tax recovered - - -
------------------------------------------- ------------- -------------- ---------------
Net cash (outflow)/inflow from operating
activities (566) 72 604
------------------------------------------- ------------- -------------- ---------------
Cash flows from investing activities
------------------------------------------- ------------- -------------- ---------------
Interest Received - - 1
------------------------------------------- ------------- -------------- ---------------
Purchase of property, plant and equipment (20) (9) (19)
------------------------------------------- ------------- -------------- ---------------
Net cash used in investing activities (20) (9) (18)
------------------------------------------- ------------- -------------- ---------------
Net (decrease)/increase in cash and cash
equivalents (586) 63 586
------------------------------------------- ------------- -------------- ---------------
Cash and cash equivalents at beginning
of period 1,055 469 469
------------------------------------------- ------------- -------------- ---------------
Cash and cash equivalents at end of period 469 532 1,055
------------------------------------------- ------------- -------------- ---------------
Notes to the unaudited interim financial statements
For the six months ended 31 March 2017
1 Basis of preparation
The interim financial statements, which are unaudited, have been
prepared on the basis of the accounting policies expected to apply
for the financial year to 30 September 2017 and in accordance with
recognition and measurement principles of International Financial
Reporting Standards ('IFRSs') as endorsed by the European Union.
The accounting policies applied in the preparation of these interim
financial statements are consistent with those used in the
financial statements for the year ended 30 September 2016.
The interim financial statements do not include all of the
information required for full annual financial statements and do
not comply with all the disclosures in IAS 34 'Interim financial
reporting'. Accordingly, whilst the interim statements have been
prepared in accordance with IFRSs, they cannot be construed as
being in full compliance with IFRSs.
The financial information for the year ended 30 September 2016
does not constitute the full statutory accounts for that period.
The annual report and financial statements for the year ended 30
September 2016 have been filed with the Registrar of Companies. The
Independent auditor's report on the report and financial statements
for the year ended 30 September 2016 was unqualified, did not draw
attention to any matters by way of emphasis, and did not contain a
statement under Section 498(2) or 498(3) of the Companies Act
2006.
2 Going concern
The interim financial information has been prepared on a going
concern basis, which assumes that the Company will have adequate
resources to continue in operational existence for the foreseeable
future.
3 Other Operating Income
In the comparative results presented, R&D tax credits have
been reclassified from taxation to other operating income as the
Board has decided that this reflects nature on the income.
The R&D tax credits in the year have been decreased due to
part of the spending being met by an Innovate UK grant and also due
to the limits on the amount credits which can be claimed
4 Earnings per share ('EPS')
Basic earnings per ordinary share is based on the profit on
ordinary activities before taxation of GBP111,570 and on
125,604,577 ordinary shares in issue throughout the period.
Diluted profit/(loss) per share is calculated by adjusting the
weighted average number of ordinary shares in issue on the
assumption of conversion of dilutive potential ordinary shares,
based on the share price at the end of the period. The Company's
dilutive potential ordinary shares are shares issued under the
Company's Enterprise Management Incentive ('EMI') scheme and
options issued under the Company's Unapproved scheme.
5 IFRS 2 'Share-based payments'
Operating expenses includes a charge of GBP4,691 (2016:
GBP8,492) after valuation of the Company's employee share option
schemes in accordance with IFRS 2. Under this standard, the fair
value of the options at the grant date is spread over the vesting
period. These charges have been credited to equity in accordance
with IFRS2 as presented in the consolidated statement of changes in
equity.
6 Additional copies
Further copies of the 2017 interim report are available on the
Company's website, www.ish.co.uk, and from the Company's registered
office, 16-18 Hayhill Industrial Estate, Sileby Road,
Barrow-upon-Soar, Leicestershire LE12 8LD.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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