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LONDON (Alliance News) - Shares in x-ray screening systems maker Image Scan Holdings PLC dropped sharply Friday after it said it expects to make a full year loss and that it will now focus on organic growth instead of acquisitions following the failure of an earlier attempt.
Shares in Image Scan were 14% lower at 3.21 pence on Friday.
For the year ending September, the firm expects to see the number of industrial X-ray inspection system units sold to hit a record high. This was after the second half of the year saw the "strong sales" seen in the first half continue.
During the year, its two largest industrial customers both bought new units for deployment into their global catalytic converter manufacturing operations. Image Scan added that "valuable" support contracts had also been put in place for these new units.
Portable X-ray systems sales, however, had been "slower than hoped" in the second half.
"There is no evidence that this decline in orders reflects anything other than changing Government budget schedules and the typically "lumpy" order intake that has been a characteristic of the business from time to time," Image Scan said in a statement. "Interest in the range of systems remains high and the volume of quotations made to customers is strong."
Image Scan emphasised, however, that orders for financial 2018 are still being received. It is, therefore, trying to finalise several of these before the end of financial 2018.
In total, Image Scan expects total sales to be between GBP3.4 million and GBP3.8 million. Gross margin is also expected to increase due to a good performance in its profitable industrial business.
The lower revenue combined with its aborted fundraise and acquisition means that the firm expects to make a loss in financial 2018.
In July, Image Scan proposed buying Todd Research for GBP3.3 million in a cash-and-share deal. In early September, however, its largest investor voted down the deal at its general meeting.
The failed fundraise and acquisition is expected to result in GBP270,000 in exceptional costs for the firm.
"I am confident in our portable and industrial X-ray products and we plan to develop new products, serving a wider segment of the security market, during financial 2019," Image Scan Chairman & Chief Executive Officer Bill Mawer said. "Additionally, we are looking to strengthen our sales team. I expect the company to be focused on organic growth for a period before revisiting its acquisition ambitions."
Image Scan will provide a further trading statement for its full year on October 24.
