IND.L Regulatory News (IND)

IndigoVision Group PLC (the 'Company' or 'IndigoVision')

Period end trading update for the year to 31 July 2011

The board of IndigoVision, a leading global supplier of IP security systems, today releases a period end trading update for the financial year ended 31 July 2011.

Estimated turnover for the year to 31 July 2011 was £28.9m, 3% above last year. Generally sales lead times have lengthened as the year has progressed and as a result overall sales and consequently estimated trading profit are below our earlier expectations.

Sales growth was strong in Latin America (£3.89m, +41%), and satisfactory in Asia Pacific (£5.28m, +16%), but there was no overall growth in North America (£7.72m, -3%) and in Europe, Middle East and Africa (£12.0m, -2%).

Within North America, USA sales increased by 28%, but were offset by a 35% fall in Canada, as previous large roll-outs completed. New management in North America has appointed six new sales managers within an overall unchanged headcount. Sales growth of 18% in Northern Europe was offset by a 12% reduction in business in the UK, and 9% lower sales in Southern Europe, Middle East and Africa. This reflects differing regional economies within Europe and weaker conditions in the Middle East. The fall in UK sales was largely expected as public expenditure reductions took effect. In our developing regions, now amounting to one third of Group sales, successes include large projects in Brazil, Colombia, China and Australia in government, safe city and airport sectors, with prospective follow on work.

As expected, estimated gross margins were lower in 2011 at just under 56% as a result of the change in sales mix and of a small number of lower margin contracts (approximately 8% of sales) designed to open new territories with flagship reference projects. Continuing product quality improvements resulted in the cost of returns falling by a quarter compared with the previous year. Overheads are estimated to have grown 9% from £13.7m to £15.0m as investment in the sales team and engineering has continued.

Group profits before tax are estimated to be approximately £1.2m which is lower than market estimates. Cash balances at the year end are approximately £5.0m and, together with bank facilities, provide IndigoVision with strong liquidity.

Product releases during the year included a new HD PTZ dome camera, two software releases including the strategic 'ONVIF' common standard for video, a range of much improved Wide Dynamic Range fixed dome cameras and recorders with doubled capacity. These new and improved products should start to show through in Group revenues as next year progresses, and all have been well received by our partners. In the coming year an increase in the number of product releases is planned, including new entry level products.

This estimated trading performance for the year to 31 July 2011 is below earlier market expectations. However, although sales fell in two regions this was offset by good growth in the developing regions, the Group was profitable for the year as a whole, IndigoVision remains financially strong, and the flow of new product introductions has strengthened and should continue to develop. The management of the Group is firmly focused on achieving the gross and operating performance in future periods that is appropriate to IndigoVision's business against a backdrop of longer sales lead times and regionally divergent economic conditions.

The results for the year to 31 July 2011 are expected to be released on 21 September 2011 along with an update on current trading. 

Notes to Editors

About IndigoVision

IndigoVision is a leading manufacturer of end-to-end IP security management solutions. IndigoVision is widely chosen for applications in airports, cities, retail, ports, mining & petrochemicals, road & rail systems, education, finance, casinos, law enforcement, government and the military. These enterprise-class systems improve organizations' operational efficiency, enhance public safety and enable timely emergency response. 

IndigoVision is headquartered in Edinburgh UK, with its own local sales and support people in 24 countries across the world. IndigoVision partners with some 373 authorized system integrators and installers in 76 countries to provide local system design, installation and service to end users.

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