RNS Number:3901Z
IndigoVision Group PLC
07 March 2006
7 March 2006
IndigoVision Group plc ("IndigoVision")
Results for the six months to 31 January 2006
Highlights
Financial Highlights
* Turnover up 132% to #2.98m
* Product revenues up 95% to #2.48m
* Gross margin improved from 56% to 68%
* Maiden operating profit of #0.15m, an improvement of #1.38m on last year
Operating Highlights
* Product revenue growth in all markets;
- APAC up 446%
- EMEA up 104%
- Americas up 25%
* Sales coverage broadened;
- representative offices established in France and Malaysia
- direct sales force expanded and strengthened
* Product range greatly improved;
- powerful real time video analytics introduced
- IP video dome cameras launched
* Major installations grow in number;
- Turin Winter Olympics 2006
- 21st airport project worldwide
- plus numerous projects in our other key markets: ports, rail, road, air,
banking, casinos, universities, industrial, mining, government, prisons,
police, military and schools
Oliver Vellacott, Chief Executive, said:
"The first six months of this year have produced rapid revenue growth,
substantial gross margin improvement and a maiden operating profit earlier than
expected. More importantly the quality and range that we offer has been taken
to another level, and our products are now demonstrably becoming the technology
of choice. The shift in our markets from analogue to IP is accelerating. We
therefore expect growth to continue apace."
Notes to Editors
About IndigoVision
IndigoVision provides complete end-to-end enterprise-class video and alarm
management solutions. IndigoVision has developed and owns all its technology,
including a rich suite of hardware products and the associated complete system
management software.
IndigoVision's 'Control Center' software is a complete enterprise-class digital
video and alarm management system, including full administration, live
monitoring, and incident investigation tools. This software drives a suite of
hardware products which connect traditional analogue cameras, monitors and
alarms to the network, and which record and playback video over the network to
any location. IndigoVision also has a range of sophisticated analytic tools that
semi-automate the processes of detecting incidents in both live and recorded
video. The system locates possible incidents, freeing up human operator resource
to verify those incidents.
IndigoVision partners with local integrators and installers to deploy systems to
end users. These solutions deliver excellent video and audio, markedly reduce
storage costs, and enable super-fast access to recorded footage.
IndigoVision is headquartered in Edinburgh, Scotland.
Enquiries to:
IndigoVision plc Oliver Vellacott CEO ++44 (0) 131 475 7200
Marcus Kneen CFO
Results for the six months to 31 January 2006
Chairman's Statement
The last six months have seen continued strong growth in sales and gross margin
as a result of further growth in the sales team, and further market-leading
developments of the product range. The market for IP Video continues to grow at
an increasing rate.
Results
Turnover for the six months to 31 January 2006 increased by 132% to #2.98m (2005
3/4#1.29m). Product revenue increased by 95% to #2.48m and licensing income
increased to #0.50m. Product revenue accounted for five sixths of turnover.
The geographical split of revenues was Europe, Middle East and Africa: 53% (2005
3/461%), Americas: 18% (20053/433%), Asia: 12% (20053/45%) and licensing and
royalty: 17% (20053/41%). Europe, Middle East and Africa achieved year on year
growth in product sales of 104%, Americas 25%, and Asia 446%.
Gross margin percentage increased to 68% (20053/456%). Part of this improvement
was as a result of the increase in licensing income as a proportion of turnover,
and part to an increase in the gross margin achieved on products as production
volumes increased. The higher sales and improved gross margin percentage
resulted in the overall gross margin increasing almost threefold to #2.02m.
Year on year operating costs were reduced by 4% to #1.87m (20053/4#1.95m).
Within overhead is a shift in resource in support of sales and future sales
growth, and an increase in overall headcount from 44 to 50. As a result of this
improvement in sales and gross margin and the continuing close control of costs,
IndigoVision achieved its first operating profit for a six month period a little
earlier than we expected. Operating profit was #0.15m, an improvement of #1.38m
over the operating loss sustained in the first half of last year. After
interest income, profit before taxation was #0.18m.
For the first time, IndigoVision achieved positive operating cash flow over a
six month period. Operating cash flow amounted to #0.20m for the six months to
31 January 2006, compared with an outflow of #1.84m in the corresponding period
last year. The net cash position at 31 January 2006 was #1.39m (20053/4#1.89m).
Net cash at the last year end, 31 July 2005, was #1.13m.
Operations
The first six months have seen a great deal of activity to provide the building
blocks for continuing growth. There are now over 1,000 installations of
IndigoVision technology worldwide, and through its sales network IndigoVision
serves over 100 system integrators and installer partners across the world.
IndigoVision solutions for security and monitoring applications are now
operating successfully in a broad spectrum of infrastructure and commercial
activities, including ports, rail, road, air, banking, casinos, university
campuses, industrial, mining, government, prisons, police, the military and
schools. During the period the 21st airport project worldwide was won. The
backbone of the entire security system for both the recent 2006 Winter Olympics
in Turin and the 2004 Olympics in Athens were IndigoVision.
This breadth of penetration is a good start to developing the potential of the
business. During the half year new representative offices were established in
France and Malaysia. The direct sales force was further expanded and
strengthened. Further development of the selling network will continue but at a
pace consistent with a self imposed requirement to fund growth from internally
generated funds.
Excellent progress was made during the half year on the continuing programme of
developing the range and quality of products and applications. Product
developments include the introduction of powerful real-time video analytics and
the launch of IP video dome cameras, both of which have received a very positive
response from installers and end users. Investment in product development will
continue to maintain IndigoVision's strong competitive position.
The market for IndigoVision is clearly growing. The rate of increase in sales,
the increasing number of enquiries, and the substantial growth in the pipeline
of potential future business all point to significant acceleration in the rate
at which this technology is being adopted at the expense of older, clumsier, and
less efficient solutions. This augurs well for the continuing development of
the business.
Current trading and outlook
The first half of the year has seen excellent progress for IndigoVision. Aside
from the improved results, much has been achieved in strengthening the product
range and sales force and in creating a much greater pipeline of potential
future business. Achieving better than breakeven and a positive operating cash
flow is an important milestone, but further improvements are still required.
Once the business is achieving consistent and growing profits and cash
generation, a more aggressive rate of expenditure on future growth will be
possible. We expect to make further progress towards this objective over the
next eighteen months.
Trading since the half year end is well ahead of the corresponding period last
year, and we are expecting good growth in the second half as a whole as the
increased sales resource takes effect. Looking forward, as larger contracts are
won, it is likely that there will be some gross margin reduction. The focus on
careful control of costs will continue, but we expect overheads for the year as
a whole to be higher than last year, as the impact of continuing to expand the
sales network takes effect.
The Board remains confident that the long-term future for IndigoVision is
attractive. The business has positioned its technology intelligently and
practically, and its market is likely to continue to grow quickly as an
increasing number of users realise the operational and financial benefits of
moving from analogue to IP video. This confidence is underpinned by the quality
of end user, the growing installed base, and the strong competitive position
that IndigoVision has now established.
HAMISH GROSSART
Chairman
06 March 2006
Consolidated profit and loss account
For the 6 months to 31 January 2006
Note 6 months to 6 months to Year to 31 July
31 January 31 January 2005
2006 2005
Unaudited Unaudited Audited
#000 #000 #000
Turnover 2,978 1,285 3,605
Cost of sales (958) (569) (1,549)
Gross profit 2,020 716 2,056
Research and development expenditure (617) (777) (1,447)
Other administrative expenses (1,249) (1,168) (2,613)
Operating profit / (loss) 154 (1,229) (2,004)
Interest receivable and similar income 25 68 102
Interest payable and similar charges - (1) (1)
Profit / (loss) on ordinary activities
before taxation 179 (1,162) (1,903)
Tax on profit / (loss) on ordinary
activities 87 87 87
Retained profit / (loss) for the period 266 (1,075) (1,816)
Profit / (loss) per ordinary share 3
Basic profit / (loss) per share 3.84p (15.53p) (26.23p)
Diluted profit per share 3.41p - -
Consolidated statement of total recognised gains and losses
For the 6 months to 31 January 2006
6 months to 6 months to Year to 31 July
31 January 31 January 2005
2006 2005
Unaudited Unaudited Audited
#000 #000 #000
Profit / (loss) for the period 266 (1,075) (1,816)
Loss on foreign currency translation (28) (5) -
Total recognised gains and (losses)
relating to the period 238 (1,080) (1,816)
Consolidated balance sheet
at 31 January 2006
As at 31 January As at 31 January As at 31 July
2006 2005 2005
Unaudited Unaudited Audited
Note #000 #000 #000 #000 #000 #000
Fixed assets
Tangible assets 155 173 159
Current assets
Stocks 532 518 353
Debtors 1,251 1,008 1,430
Cash at bank and in hand 1,388 1,894 1,132
3,171 3,420 2,915
Creditors: amounts
falling due within one
year (864) (633) (850)
Net current assets 2,307 2,787 2,065
Total assets less
current liabilities 2,462 2,960 2,224
Provisions for
liabilities and charges (75) (75) (75)
Net assets 2,387 2,885 2,149
Capital and reserves
Called up share capital 69 69 69
Share premium account 4 23,972 23,972 23,972
Other reserve 4 8,563 8,563 8,563
Profit and loss account 4 (30,217) (29,719) (30,455)
Shareholders' funds -
equity 2,387 2,885 2,149
Consolidated cash flow statement
For the 6 months to 31 January 2006
6 months to 31 6 months to 31 Year to 31
January 2006 January 2005 July 2005
Unaudited Unaudited Audited
Note #000 #000 #000 #000 #000 #000
Cash flow statement
Cash inflow / (outflow) from
operating activities 5 196 (1,837) (2,692)
Returns on investments and
servicing of finance
Interest received 25 68 102
Interest paid - (1) (1)
25 67 101
Taxation 87 - 87
Capital expenditure and
financial investment
Purchase of tangible fixed
assets (24) (17) (41)
Cash inflow / (outflow)
before management of liquid
resources and financing 284 (1,787) (2,545)
Financing
Repayment of loans - (19) (27)
Issue of share capital - 1 -
- (18) (27)
Increase / (decrease) in cash
in the period 284 (1,805) (2,572)
Reconciliation of net cash
flow to movement in net funds 6
Increase / (decrease) in cash
in the period 284 (1,805) (2,572)
Cash inflow/(outflow) from
increase/(decrease) in debt
and lease financing - 19 28
Translation adjustment (28) (5) -
Movement in net funds in the
period 256 (1,791) (2,544)
Net funds at the start of the
period 1,132 3,676 3,676
Net funds at the end of the
period 1,388 1,885 1,132
Notes to the accounts:
1. The interim financial information has been prepared on the basis of
accounting policies consistent with those applied in the accounts for the
year ended 31 July 2005. The information is unaudited and does not
comprise the statutory accounts of the group. The statutory accounts of
IndigoVision Group plc for the year ended 31 July 2005 have been filed with
the registrar of companies. KPMG Audit Plc have reported on the statutory
accounts; their report was unqualified and did not contain any statement
under section 237 of the Companies Act 1985.
2. This report was approved by the board of directors on 6 March 2006.
3. Profit / (loss) per ordinary share
Profit / (loss) per share is calculated as follows:
Six months to Six months to Year to
31 January 2006 31 January 31 July
2005 2005
#000 #000 #000
Profit / (loss) for the period 266 (1,075) (1,816)
Number Number Number
Weighted average number of shares
Basic weighted average shares in issue 6,923,976 6,921,976 6,923,976
Potential ordinary shares on exercise of share
options 872,100 631,500 559,100
Total number of shares 7,796,076 7,553,476 7,523,076
Basic profit / (loss) per share 3.84p (15.53p) (26.23p)
Diluted profit per share 3.41p - -
4. Share premium and reserves
Share Premium Other reserve Profit & Loss
Account Account
#000 #000 #000
At beginning of period 23,972 8,563 (30,455)
Retained profit for period - - 266
Currency exchange movements - - (28)
At end of period 23,972 8,563 (30,217)
5. Reconciliation of operating loss to operating cash flows
Six months to Six months to Year to
31 January 2006 31 January 31 July
2005 2005
#000 #000 #000
Operating profit / (loss) 154 (1,229) (2,004)
Depreciation 28 38 72
Foreign exchange adjustment on fixed assets - - 5
Increase in stocks (179) (267) (102)
Decrease/(Increase) in debtors 179 203 (306)
(Decrease)/increase in creditors 14 (582) (357)
Net cash inflow / (outflow) from operating
activities 196 (1,837) (2,692)
6. Analysis of net funds
At 1 August Cash flow Other non At 31 January
2005 cash changes 2006
#000 #000 #000 #000
Cash in hand and at bank 1,132 256 - 1,388
Total 1,132 256 - 1,388
7. Copies of this statement will be sent to all shareholders and will be
available for at least one month from the registered office, Charles Darwin
House, The Edinburgh Technopole, Edinburgh, EH26 0PJ, UK.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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