Last checked at 13 Jun 2012 07:00
Image Scan Holdings plc
Interim report 2012
13 June 2012
IMAGE SCAN HOLDINGS PLC
("Image Scan" or the "Company")
(AIM: IGE)
INTERIM RESULTS
FOR THE SIX MONTHS ENDED 31 MARCH 2012
Image Scan, the AIM-listed specialist supplier of real-time 3D and 2D x-ray screening systems to the homeland security and industrial inspection markets, today announces its interim results for the six months ended 31 March 2012.
Financial summary:
·; Revenue more than doubled to £1,760,000 (2011: £772,000)
·; Gross profit margin at 37% (2011: 41%)
·; Overheads at £653,000 (2011: £582,000)
·; Profit on ordinary activities after taxation of £6,000 (2011: loss £266,000)
·; Company at break-even for second consecutive six month period
·; Current cash balance of £569,000
Operational highlights:
·; Current year order intake to date of £2million, mostly deliverable in this financial year
·; Steady flow of orders across both the security and industrial sectors
·; Two further sales of the SVXi, small vehicle x-ray inspection system
·; First sales of two industrial inspection systems targeted at new markets
Brian Emslie, Chairman of Image Scan, commented: "The interim results reflect the continued efforts being made to improve trading performance. In particular, breaking even over a twelve month period for the first time is a significant milestone for the Company, which has been achieved through the execution of the strategy implemented three years ago. The Company now needs to move into the next stage of development creating a platform for medium-term growth and sustainable value. This will require the Board to revisit the strategy and to consider investment in additional products and markets. Worldwide economies remain unpredictable making the outlook generally uncertain, however the Company is becoming better established in both the Security and Industrial markets."
Enquiries:
Image Scan Holdings plc Tel: +44 (0) 1509 503 400
Brian Emslie, Chairman
Louise George, CEO
ir@ish.co.uk
Seymour Pierce Tel: +44 (0) 207 107 8000
Sarah Jacobs/Tom Sheldon
Richard Redmayne
Introduction
I am pleased to present the Company's interim results for the six months ended 31 March 2012, with the Company having achieved a break-even result for the second consecutive six month period. The order book of £2.3million at the start of the year gave the Company a solid foundation for a significant increase in revenue in the first six months of 2012 and the continuing flow of orders in the year means that the order book remains strong.
Financial results
Revenue for the six months at £1,760,000 (2011: £772,000) was more than double that of last year with strong contribution from both sectors. The margin has been reduced to 37% (2011: 41%) as a result of increasing competition within the market in general and more specifically by the part-shipment of the SVXi small vehicle inspection contract secured in August 2011 on which margins are low due to the significant investment in incremental development of this product.
Overheads of £653,000 (2011: £582,000) reflect the increase in marketing expenditure mainly in attendance at exhibitions and overseas travel, increased R&D spend in developing the product range and increased staff costs in terms of overtime and contractors to support current levels of operations. The resultant operating profit was £6,000 (2011: loss £266,000) and the profit per share was 0.01p (2011: loss per share of 0.43p).
The cash position at the start of the year was supported by advance contract payments of £520,000. By the end of the period, the cash balance had fallen to £122,000 (2011: £197,000) but at that time the Company was in the final phase of a substantial contract deliverable in May against which payment of £730,000 was due. Having received these funds, the current cash position is now £569,000. The Company has an agreed £100,000 overdraft facility with the Royal Bank of Scotland.
Overview
Security revenue in the period was £1,120,000 (2011: £267,000) and builds on the sound performance in the second half of 2011, with sales across the security portfolio. Revenue in the period included £570,000 of the aforementioned SVXi contract and the sale of an AXIS-3D baggage screening system into a prestigious London site. Industrial revenue of £640,000 was supported by further progress on the nuclear contract secured in 2011, some high margin contract industrial inspection business and three repeat sales of the MDXi-400 system.
Outlook
The order intake in the year to date of £2m comprises £1.3m of security sales and £0.7m of industrial. Security sales include two further orders for the SVXi small vehicle x-ray inspection system, one of which involved a composite sale including two standard size AXIS baggage screening systems and one of the larger tunnel size system launched last year. Sales of the portable FlatScan product range continue to perform well with good worldwide representation. Industrial orders include contracts both for our existing product range and for two new applications, one in the automotive sector and the other in the field of medical devices. These new systems will require further investment into product development, in particular into the software element and the Company intends to resource accordingly.
Having focused on executing the strategy put in place three years ago, the achievement of break-even performance for the past twelve months is a significant milestone for the Company. In order to move towards sustainable performance and growth, the Board is revisiting the Company strategy to form a longer-term view of how to develop our product offering to strengthen the product range and to open up new market opportunities. The potential additional investment required in both our engineering and sales teams to support the implementation of this revised strategy is currently being considered by the Board.
Brian Emslie
Chairman
12 June 2012
Six months ended | Six months ended | Year ended | |
31 March 2012 | 31 March 2011 | 30 September 2011 | |
(Unaudited) | (Unaudited) | (Audited) | |
£ | £ | £ | |
Revenue | 1,760 | 772 | 2,174 |
Cost of sales | (1,102) | (456) | (1,273) |
Gross profit | 658 | 316 | 901 |
Administrative expenses | (653) | (582) | (1,169) |
Operating profit/(loss) | 5 | (266) | (268) |
Finance revenue | 1 | - | 1 |
Profit/(loss) before taxation | 6 | (266) | (267) |
Taxation | - | - | 30 |
Profit/(loss) for the period | 6 | (266) | (237) |
Pence | Pence | Pence | |
Earnings per share | |||
Basic and diluted earnings/(loss) per share | 0.01 | (0.43) | (0.36) |
Six months to | Six months to | Year to | |
31 March 2012 | 31 March 2011 | 30 September 2011 | |
(Unaudited) | (Unaudited) | (Audited) | |
£ | £ | £ | |
Opening equity shareholders' funds | 907 | 814 | 814 |
Issue of shares - at par | - | - | 150 |
Issue of shares - share premium | - | - | 140 |
Share-based payments | - | 2 | 4 |
Profit /(loss) attributable to equity shareholders | 6 | (266) | (201) |
913 | 550 | 907 |
As at | As at | As at | |
31 March 2012 | 31 March 2011 | 30 September 2011 | |
(Unaudited) | (Unaudited) | (Audited) | |
£ | £ | £ | |
Non-current assets | |||
Plant and equipment | 47 | 43 | 44 |
Intangible assets | - | - | - |
47 | 43 | 44 | |
Current assets | |||
Inventories | 696 | 320 | 315 |
Trade and other receivables | 437 | 460 | 567 |
Cash and cash equivalents | 122 | 197 | 945 |
Current tax asset | - | - | 29 |
1,255 | 977 | 1,856 | |
Total assets | 1,302 | 1,020 | 1,900 |
Current liabilities | |||
Trade and other payables | 390 | 459 | 999 |
Non-current liabilities | |||
Provisions for liabilities and charges | 34 | 11 | 29 |
Total liabilities | 424 | 470 | 1,028 |
Net assets | 878 | 550 | 872 |
Equity | |||
Share capital | 763 | 613 | 763 |
Share premium account | 7,501 | 7,361 | 7,501 |
Retained earnings | (7,386) | (7,424) | (7,392) |
Equity shareholders' funds | 878 | 550 | 872 |
This interim financial information was approved by the Board of Directors on 12 June 2012.
Brian S Emslie
Chairman
Six months to | Six months to | Year to | |
31 March 2012 | 31 March 2011 | 30 September 2011 | |
(Unaudited) | (Unaudited) | (Audited) | |
£ | £ | £ | |
Cash flows from operating activities | |||
Operating profit/(loss) | 5 | (266) | (268) |
Adjustments for: | |||
Depreciation | 16 | 21 | 39 |
Increase in inventories | (381) | (47) | (42) |
Decrease/(increase) in trade and other receivables | 130 | (140) | (246) |
(Decrease)/increase in trade and other payables | (604) | 266 | 825 |
Share-based payment charge | - | 2 | 4 |
Corporation tax recovered | 29 | 28 | 28 |
Net cash (outflow)/inflow from operating activities | (805) | (136) | 340 |
Cash flows from investing activities | |||
Interest received | 1 | - | 1 |
Purchase of property, plant and equipment | (19) | (17) | (36) |
Proceeds on disposal of property, plant and equipment | - | 2 | 2 |
Net cash used in investing activities | (18) | (15) | (33) |
Cash flows from financing activities | |||
Issue of ordinary share capital | - | - | 290 |
Net cash generated from financing activities | - | - | 290 |
Net (decrease)/increase in cash and cash equivalents | (823) | (151) | 597 |
Cash and cash equivalents at beginning of period | 945 | 348 | 348 |
Cash and cash equivalents at end of period | 122 | 197 | 945 |
1 Basis of preparation
The interim financial information for the six months ended 31 March 2012 has been prepared under International Financial Reporting Standards ('IFRS') as adopted by the EU in accordance with International Accounting Standard 34 'Interim Financial Reporting'. The interim financial statements have been prepared in accordance with the Company's accounting policies under IFRS and the historical cost convention. The interim financial statements are neither audited nor reviewed and do not constitute statutory accounts as defined by Section 434 of the Companies Act 2006. The comparatives for the financial year ended 30 September 2011 are not the Company's full statutory accounts for the year. The Auditors' report on those accounts was unqualified and did not contain a statement under Section 498 (2) or (3) of the Companies Act 2006. A copy of the statutory accounts for that year has been delivered to the Registrar of Companies.
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 Earnings per share ('EPS')
Basic earnings per ordinary share is based on the profit on ordinary activities after taxation of £6,000 and on 76,267,932 ordinary shares in issue throughout the period.
IAS 33 requires presentation of diluted EPS when a company could be called upon to issue shares that would decrease net profit or increase net loss per share. Earnings or loss per share would not be affected by the exercise of out-of-the-money options since it is inappropriate to assume that option holders would act irrationally. Accordingly as there are no other diluting future share issues, diluted EPS equals basic EPS.
4 IFRS 2 'Share-based payments'
Operating expenses includes a charge of £nil (2011: £2,000) 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 items have been added back in the consolidated statement of changes in equity.
5 Additional copies
Further copies of the interim report 2012 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.