THE new management at IndigoVision has said the video security company is making good progress following the shakeup at the business, which posted a $1.1 million first half loss yesterday when shares in the firm tumbled seven per cent.
The operating loss was up $0.4m on the first half last year but in line with expectations. However, Edinburgh-based IndigoVision cautioned that measures introduced by Donald Trump may pose challenges.
The company relies on supply chains that span the globe. It uses cameras sourced from China in systems that are sold to clients in the USA.
In its results for the six months to 30 June, IndigoVision noted the tariffs imposed on China by President Trump and security restrictions placed on the use of some products in the USA.
“The high pace of change in this regard brings a corresponding amount of uncertainty, however the Group does not currently foresee these factors impacting materially on our ability to fulfil contractual commitments in the US,” said George Elliott, who became chairman in July last year. “Also our developing supply chain partnerships and flexibility diminish our reliance on specific companies and Chinese manufacturers.”
Chief financial officer Chris Lea said IndigoVision has been doing contingency planning in respect of Brexit, noting the form this will take remains unclear.
However, the firm has no plans to shift any activity from the UK. The research and development operation is based in Edinburgh, where IndigoVision employs around 70 people.
The company said: “The current indicators continue to support the Board’s target to at least break even in the current year and for the business to deliver an increase in revenues and acceptable levels of profitability from 2019.”
Chief executive Pedro Simoes noted IndigoVision grew sales in the first half as it reaped the benefits of a change of strategy and a new performance culture.
The security industry veteran became chief executive in January. IndigoVision parted company with former chief executive Marcus Kneen in November
The company has moved to become more sales and marketing focused while broadening its product range to attract more customers.
In April it launched a new system called Integra to target the Small and Medium Sized Enterprise market, which has attracted a strong pipeline of orders.
IndigoVision has added the capacity to detect attempts by hackers to access systems it supplies, which has been well received.
Mr Simoes said he was particularly pleased with the pace of technology innovation across the group. IndigoVision will continue to add new technologies to its offering to ensure it remains exciting. It could make bolt-on acquisitions to help with this.
The firm increased sales by 9.5% in the first half, to $22.2m, from $20.3m last time. Its gross profit margin improved to 58.0% from 51.5% reflecting factors such as product mix.
Overheads increased by 21% in the first half to $13.9m. Mr Elliott said the increase in overheads had an impact in the first half, with stronger revenue and improved gross margin.
Revenues fell 6% in the first half last year.
Shares in Aim-listed IndigoVision closed down 8.5p at 108p.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here