IND.L Regulatory News (IND)

14 Sep 2006 07:00

IndigoVision Group PLC14 September 2006 14 September 2006 IndigoVision Group plc ("IndigoVision") Preliminary Results for the year to 31 July 2006 Highlights Financial Highlights • Total revenues more than doubled to £7.6m• Product revenues increased by 95% to £6.9m• First annual profit before taxation of £0.44m, last year loss £1.90m• Net cash balances increased from £1.1m to £1.5m Operating Highlights • EMEA revenues increased 83% from £2.4m to £4.4m• APAC revenues increased 535% from £0.3m to £1.8m• Americas revenues increased by 49% from £0.9m to £1.4m• Sales offices established in China, India, Mexico, Scandinavia and Baltic• New range of IP Dome Cameras• New advanced video analytics and enterprise alarm management• Major new installations in all major geographies in rail, casinos and airports Oliver Vellacott, Chief Executive, said: "I am pleased to be able to report that the group has returned its first fullyear profit in a second year of very good growth in a rapidly developing market.These results demonstrate the excellent progress we are making in allterritories. IndigoVision's complete end-to-end digital video and alarm management enablescost effective solutions for public security and timely response to emergencysituations. We expect rapid growth to continue in the first half of the current year and areconfident for the year as a whole, as the market shift from analog to IP videocontinues, and the benefit from the investment in sales flows through tooperating results." Enquiries to: IndigoVision plc Oliver Vellacott, CEO +44 (0) 131 475 7200 Marcus Kneen, CFO Chairman's statement In the year to 31 July 2006, IndigoVision passed the crucial milestone of itsfirst annual operating profit. The year was again one of very good growth inturnover, against closely controlled cost increases, as the market up take ofinternet protocol (IP) video technology accelerated. The customer basebroadened in all the major markets and we are clear that the market is currentlyset for a continued period of growth. We now believe the time is right to makea planned substantial increase in the sales force to ensure that IndigoVisiontakes maximum advantage of the outstanding opportunity available to it. Results Turnover for the year to 31 July 2006 increased by 110% to £7.6m (2005-£3.6m)with product revenues almost doubling to new record levels. Americas salesincreased 49% compared with 2005. Europe, Middle East and Africa salesincreased 83% compared with 2005. Asia sales increased 535% compared with 2005.The geographical split of revenues was Europe, Middle East and Africa: 58% (2005-67%), Americas: 18% (2005-25%) and Asia: 24% (2005-8%). Operating costincreases were held to 5%. Year end actual headcount increased from 44 to 55. The cashflow from operating activities improved from an outflow of £2.7m to aninflow of £0.4m for the year. The net cash balance at 31 July 2006 was £1.5m(2005-£1.1m). About IndigoVision IndigoVision is a leading manufacturer of complete end-to-end IP networkeddigital video and alarm management solutions principally for the securitymarket. IndigoVision solutions are today being used to secure mission criticalfacilities across the world in ports, rail, road, airports, banks, casinos,schools, industrial, mining, government, prisons, police and the military.IndigoVision serves these markets in partnership with some 140 authorisedinstallers in over 30 countries, each of which is required to undergocomprehensive training. Field proven worldwide IndigoVision solutions are used in 26 airports, six major rail networks, two ofthe world's top 5 banks and prestigious municipal projects in London, Californiaand Singapore. IndigoVision was chosen for the 2006 Turin Winter Olympics, the2004 Athens Olympics and the 2006 Soccer World Cup in Germany. IndigoVisionsolutions are tried and tested worldwide. They vary in scale from small singlesites to large complex enterprise systems, and are intrinsically tolerant tonetwork, storage and/or power failure. The forefront of IP Video technology IndigoVision's 'Control Center' enterprise video management software drives itsrange of over 160 hardware products which connect analog CCTV and IndigoVisionIP cameras to networks in order to transmit and record DVD quality video using a'virtual matrix'. 'Control Center' is supplied free of charge, with anunrestricted licence included in the cost of hardware. Networked Video Recordersdeliver best-in-class performance, recording 200 streams of full frame rate realtime video on a regular PC and allowing 24 hours of video to be scanned in just6 seconds. Although this system provides a complete solution for IP Video, thereis extensive integration with systems from other manufacturers including accesscontrol and intruder alarms. Real time advanced analytics for automateddetection of incidents include congestion detection, counterflow analysis, leftluggage detection and virtual tripwire. Current trading and outlook We are pleased that 2006 has shown that IndigoVision has broken into profit andthe task before the group's management is to grow operating margins to a moreacceptable level while continuing to generate substantial sales growth. The current year has started well, with product sales for the seven weeks sincethe year end 90% higher than the corresponding period last year. We expect therapid rate of sales growth achieved last year to continue in the first half andwe see every reason to plan for good growth for the year as a whole. In the current year, now that the sales infrastructure has been established, therate of increase in sales and marketing expenditure will be stepped up to makesure that IndigoVision takes maximum advantage of the opportunity before it.Consistent with that, the group's investment in stock of the faster sellingfinished goods will be materially increased as production batch sizes increaseto achieve manufacturing efficiency. In addition, research and developmentexpenditure will be increased to make sure that IndigoVision's market leadingposition is maintained. IndigoVision has an opportunity, with patience, to build a much bigger and moreprofitable business and the last two years have seen many of the building blocksput in place to achieve this. We expect the current year to show furtherprogress towards this goal. Consolidated profit and loss accountfor the year ended 31 July 2006 Note 2006 2005 £000 £000 Group Turnover 4 7,574 3,605Cost of sales (2,853) (1,549) ------ ------Gross profit 4,721 2,056Research and development expenditure (1,376) (1,447)Other administrative expenses (2,870) (2,613) ------ ------Group operating profit / (loss) 475 (2,004)Interest receivable and similar income 44 102Interest payable and similar charges (80) (1) ------ ------Profit / (loss) on ordinary activities before taxation 439 (1,903)Tax on profit / (loss) on ordinary activities 87 87 ------ ------Profit / (loss) for the financial year 526 (1,816) ------ ------ Profit / (loss) per ordinary shareBasic profit / (loss) per share 5 7.6p (26.23p)Diluted profit / (loss) per share 5 6.7p (26.23p) ------ ------ Turnover and profit / (loss) on ordinary activities before relate wholly tocontinuing activities. Consolidated balance sheetat 31 July 2006 Note 2006 2006 2005 2005 £000 £000 £000 £000Fixed assetsTangible assets 240 159 Current assetsStocks 398 353Debtors 2,105 1,430Cash at bank and in hand 1,454 1,132 ------ ------ 3,957 2,915Creditors: amounts falling due within one year (1,431) (850) ------ ------ Net current assets 2,526 2,065 ------ ------Total assets less current liabilities 2,766 2,224Provisions for liabilities and charges (90) (75) ------ ------ Net assets 2,676 2,149 ------ ------ Capital and reservesCalled up share capital 6 69 69Share premium account 7 23,974 23,973Other reserve 7 8,562 8,562Profit and loss account 7 (29,929) (30,455) ------ ------ Shareholders' funds - equity 2,676 2,149 ------ ------ Consolidated cash flow statementfor the year ended 31 July 2006 Note 2006 2005 £000 £000 Cash flow statement Cash inflow / (outflow) from operating activities 8 334 (2,692)Returns on investments and servicing of finance 44 101Taxation 87 87Capital expenditure (144) (41) ------ ------Cash inflow / (outflow) before financing 321 (2,545) Financing 1 (27) ------ ------Increase / (decrease) in cash in the year 322 (2,572) ------ ------ Reconciliation of net cash flowto movement in net funds 9 Increase / (decrease) in cash in the year 322 (2,572) Cash outflow from debt repayment - 28 ------ ------ Change in net debt resulting from cash flows 322 (2,544) ------ ------Movement in net funds in the year 322 (2,544)Net funds at the start of the year 1,132 3,676 ------ ------Net funds at the end of the year 1,454 1,132 ------ ------ Statement of total recognised gains and lossesfor the year ended 31 July 2006 Group 2006 2005 £000 £000 Profit / (loss) for the financial year 526 (1,816)Exchange differences on the retranslation of net investments - - ------ ------Total recognised gains and losses relating to the financial year 526 (1,816) ------ ------ Reconciliations of movements in shareholders' fundsfor the year ended 31 July 2006 Group Company 2006 2005 2006 2005 £000 £000 £000 £000 Profit / (loss) for the financial year 526 (1,816) (19) (2,359) Increase in share capital 1 1 1 1 ------ ------ ------ ------ Net increase / (reduction) in shareholders' funds 527 (1,815) (18) (2,358)Opening shareholders' funds 2,149 3,964 1,251 3,609 ------ ------ ------ ------ Closing shareholders' funds 2,676 2,149 1,233 1,251 ------ ------ ------ ------ Notes to the accounts: 1 Principal Activity The principal activity of the group is the design, manufacture, sale andlicensing of software and hardware products. 2 Accounting policies Basis of preparation The preliminary financial information has been prepared on the basis of theaccounting policies set out in the most recent set of financial statements forthe year ended 31 July 2005. These policies are detailed on pages 13 and 14 ofThe IndigoVision Group plc annual report for 2005. This report was approved by the board of directors on 13 September 2006. 3 Annual accounts The financial information set out in this announcement does not constitute theGroup's Statutory Accounts for the year ended 31 July 2005 or 2006 but isderived from those accounts. Statutory Accounts of IndigoVision Group plc for2005 have been delivered to the Registrar of Companies and those for 2006 willbe delivered to the Registrar of Companies following the Company's annualgeneral meeting. The auditors have reported on those accounts; their reportswere unqualified and did not contain a statement under section 237(2) or (3) ofthe Companies Act 1985. This report was approved by the Board of directors on 13 September 2006. 4 Segmental information 2006 2005 £000 £000Turnover by destinationEurope, Middle East & Africa 4,381 2,412Asia 1,823 287Americas 1,370 906 ------ ------ 7,574 3,605 ------ ------ 5 Profit / (loss) per share 2006 2005 £000 £000 Issued ordinary shares at start of period 6,924 6,920 Effects of shares issued during the period from exercise of employee share options 4 4 ------ ------Weighted average number of ordinary shares at end of period - for basic earnings per share 6,928 6,924 Effect of share options in issue 878 - ------ ------Weighted average number of ordinary shares at end of period - for diluted earnings per share 7,806 6,924 ------ ------ Basic earnings per share The calculation of basic earnings per share for the year ended 31 July 2006 wasbased on profit / (loss) attributable to ordinary shareholders of £526,000 (2005-(£1,816,000)) and a weighted average number of ordinary shares outstandingduring the year ended 31 July 2006 of 6,927,976 (2005-6,923,976), calculatedas shown above. Diluted earnings per share The calculation of diluted earnings per share for the year ended 31 July 2006was based on profit / (loss) attributable to ordinary shareholders of £526,000(2005-(£1,816,000)) and a weighted average number of ordinary sharesoutstanding during the year ended 31 July 2006 of 7,806,176 (2005-6,923,976),calculated as shown above. 6 Called up share capital 2006 2005 £000 £000AuthorisedEquity: Ordinary shares of 1p each 14,922 14,922 ------ ------Allotted, called up and fully paidEquity: 6,927,976 Ordinary shares of 1p each 69 69 (2005-6,923,976) ------ ------ 69 69 ------ ------ During the year 4,000 ordinary shares of 1p each were issued at 35p per sharepursuant to the exercise of options. 7 Share premium and reserves Share Profit premium Other and loss account reserve accountGroup £000 £000 £000 At beginning of year 23,973 8,562 (30,455)Retained profit for the year - - 526Premium on share capital 1 - - ------ ------ ------At end of year 23,974 8,562 (29,929) ------ ------ ------ 8 Reconciliation of operating profit / (loss) to operating cash flows 2006 2005 £000 £000 Operating profit (loss) 475 (2,004)Depreciation 61 72(Increase) in stocks (45) (102)(Increase) in debtors (675) (306)Increase/(decrease) in creditors 581 (357)Foreign exchange (loss) / profit (78) 5Movement in warranty provisions 15 - ------ ------Net cash inflow / (outflow) from operating activities 334 (2,692) ------ ------ 9 Analysis of net funds At beginning Cash flow At end of of year year £000 £000 £000 Cash in hand, at bank 1,132 322 1,454 ------ ------ ------Total 1,132 322 1,454 ------ ------ ------ This information is provided by RNS The company news service from the London Stock Exchange