Image Scan Holdings Regulatory News (IGE)

22 February 2022

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

Image Scan Holdings plc

("Image Scan" or the "Company")

Trading update ahead of AGM

Image Scan, (AIM: IGE) specialists in the field of real-time X-ray imaging for the security and industrial inspection markets, provides an update ahead of its Annual General Meeting being held later today.

Key points:

· New portable X-ray system launched at Dubai security show

· Image Scan appointed global distributor for Serstech AB

· Portable X-ray sale to US Federal agency

· Change of board roles from 1 January

· Trading continues to be impacted by COVID-19

· Company will be loss-making for the first half of the financial year

· Board considers the loss may not be recovered by end of the financial year

The new ThreatScan®-AS1 fully integrated portable X-ray system, together with a new, high energy, X-ray generator, was launched at a Dubai security exhibition held in January and there were encouraging levels of interest from both customers and trading partners. Manufacturing of the first batch of production units is about to start, and some of these will be used as demonstrators by our sales team and international sales partners. The first sale of a portable X-ray system to a US Federal agency was an important milestone in our targeting of the North American market.

Sales of the Company's industrial scanners continue to be impacted by disruption in the automotive industry, where both customer demand and global supply chains have been adversely affected by COVID-19. However, the Company recently received an order for a new machine and has been performing trial inspections of parts for a potential new customer in the same industry. As part of its diversification plan, trial inspections of parts for a fuel cell company have also been carried out.

Initiatives to further expand the footprint of the Company included entering into a distributor agreement with Serstech AB, under which we are taking their sophisticated, hand-held chemical analysers to the global security market.

As part of the Board's succession plan, Vincent Deery was appointed as Interim CEO on 1 January 2022. William Mawer now performs the role of Executive Chairman.

In the first half of FY22, COVID-19 has continued to impact customer spending, the operation of our sales and service functions, our international supply chain, and our staff. Orders have been delayed, causing the momentum built up in the second half of FY21 to stall. This is now expected to result in the Company making a significant loss for the first half.

The result for the year as a whole was, and still is, expected to be second half weighted but while we have a strong pipeline of orders across many parts of the world, the timing of those orders is hard to predict in the current environment, and the Board therefore believes it is unlikely that the second half will be sufficiently strong to enable the Company to fully recover the first half loss.

Bill Mawer, Chairman and Chief Executive Officer of Image Scan commented: "It is disappointing that our order intake has stalled in the first half of the year. While international travel for trade shows and demonstrations is still limited, we have a healthy pipeline of new business. However, it will take some time for that business to come through. Together with the loss of COVID-19 Government support mechanisms, this gives us less confidence in our original expectation for the current financial year. The positive response to the launch of our new products gives us confidence for the longer term but, in the continuing, challenging environment, it has to be expected that it will take a while for order levels to recover."

The Company's Annual General Meeting, which will take place on 22 February at 13.30. It will be a hybrid meeting, with options for attendance at its Barrow-upon-Soar facility and on-line. The Board will make a brief video presentation available on the Company's website www.3dx-ray.com immediately after the AGM.

The Company will provide further detail in its interim results in April 2022.

-ENDS-

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