REG - Image Scan Holdings - Interim Results
30/04/2024 07:00
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RNS Number : 4768M Image Scan Holdings PLC 30 April 2024
This announcement contains inside information for the purposes of Article 7
of the UK version of Regulation (EU) No 596/2014 which is part of UK law by
virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR"). Upon
the publication of this announcement via a Regulatory Information Service,
this inside information is now considered to be in the public domain.
IMAGE SCAN HOLDINGS PLC
("Image Scan" or the "Company")
Interim Results
Image Scan (AIM: IGE), the specialist supplier of X-ray screening systems
for security and industrial inspection, is delighted to announces its interim
results for the six months ended 31 March 2024 ("H1 2024" or the "Period").
Financial summary:
· Order intake £1,136k (H1 2023: £1,858k)
· Revenue was at £1,061k (H1 2023: £1,459k)
· Gross profit margin of 54% (H1 2023: 48%)
· Loss before taxation of £119k (H1 2023: profit before tax of
£16k)
· Period end bank balance was £759k (H1 2023: £1,003k)
· Period end orderbook of £729k (H1 2023: £1,116k)
Operational highlights:
· Launch of ThreatScan®-AS2 product to extend the portable product
family
· Customer deliveries and satisfaction maintained by effective
management of supply chain challenges
· Research and development effort focussed on developing high
precision portable x-ray products
· New ThreatScan®-AS1 product contract wins in Europe, Middle
East, Asia and Indian Sub-continent
· Opportunity pipeline at a significantly higher level than at the
same period in FY23
Post Period-end highlights
· Have secured an initial order of c£300k from a partner to supply
them with ThreatScan®-AS1 portable X-ray systems pursuant to a framework work
contract the partner has won. Further comparable orders are expected over the
period of the partner's two-year framework contract.
Vince Deery, Chief Executive Officer of Image Scan commented:
"We are very pleased with the reception to our new products especially the
ThreatScan®-AS1 which has become readily accepted and adopted by the
marketplace and orders are being received from across the globe. We are also
seeing the number of opportunities for this product increasing as the
participation in large volume government tenders is now more accessible to
which the recently announced order is testament.
"The recent launch of the ThreatScan®-AS2 also adds to the positive response
from the marketplace, and will provide even greater opportunity for the
partner network to offer a comprehensive range of portable x-ray products.
"The H1 2024 performance is a reduction over the same period last year,
however, the pipeline is buoyed by the introduction of the new products and
the participation in a large volume mainly government opportunities. The
increase in margin reflects the product mix and great efforts on combatting
inflationary pressures. Taking into consideration our careful cost management
and the opportunity pipeline, the Board is confident of delivering a full year
performance in line with market expectations."
For further information on the Company, please visit: www.ish.co.uk
(http://www.ish.co.uk/) and for further information on its products, please
visit: www.3dx-ray.com (http://www.3dx-ray.com/)
-ENDS-
Image Scan Holdings plc
Tel: +44 (0) 1509 817400
Vincent Deery CEO
Sarah Atwell-King, CFO & Company Secretary
WH Ireland Limited - Nominated Advisor and Corporate Broker Tel: +44
(0) 207 220 1666
Mike Coe/Sarah Mather (Corporate Finance)
ABOUT IMAGE SCAN HOLDINGS PLC
About Image Scan Holdings plc
The core activity of the Group is the manufacture of portable X-ray systems
for security and counter terrorism applications. The Group recently launched a
cabinet X-ray machine and is replacing its Axis range of checkpoint X-ray
systems with new machines developed with a partner. All these products are
taken to market across the world through a strong network of international
partners.
In addition, over the last sixteen years, Image Scan has developed and
manufactured industrial X-ray inspection systems, the MDXi range. The primary
market for these systems is in automotive emissions control where they are
used for quality control inspection of catalytic converters and diesel
particulate filters.
The visibility and reach of the Company's 3DX-Ray brand has been further
strengthened through a new LinkedIn profile focussed on its EOD and
counter-terrorism activities. This can be found at:
https://www.linkedin.com/company/3dx-ray/
(https://www.linkedin.com/company/3dx-ray/)
(https://www.linkedin.com/company/3dx-ray/)
For further information on the Company, please visit: www.ish.co.uk
(http://www.ish.co.uk/) - and for further information on its products,
please visit: www.3dx-ray.com (http://www.3dx-ray.com/)
Chief Executive Officer's statement
Introduction
Image Scan Holdings plc is a specialist in innovative X-ray technology,
operating globally in the security and industrial inspection sectors. The
Company's principal activity is the design, manufacture, and supply of both
portable and fixed X-ray security screening systems to governments, security
organisations and law enforcement agencies. The Company also supplies
high-quality screening systems used in the manufacture of catalytic converters
and diesel particulate filters.
Financial results
Following a successful return to profit in 2023, trading for H1 2024 was slow
in terms of sales and order intake.
Revenue for the Period was £1,061k (H1 2023: £1,459k). Gross profit margin
increased 6% for the Period to 54% (H1 2023: 48%).
Operating expenses were stable at £691k (H1 2023: £688k), reflecting strong
cost control efforts.
The reduced level of sales led to a pre-tax loss of £119k in H1 2024 (H1
2023: pre-tax profit of £16k).
The Company finished H1 2024 with an order book of £729k (H1 2023: £1,116k).
As at the period end the Company had a cash balance of £759k (H1 2023:
£1,003k) and no debt.
Review of the period
As previously reported, the results for FY 2024 will be significantly second
half weighted. H1 2024 saw a slowdown in terms of sales and order intake,
following a successful return to profit in 2023, but has created a pipeline of
sales opportunities that will benefit the second half when converted.
Therefore, the Company remains confident of meeting market expectations for
the year.
The year to date has seen extensive marketing activities; the team has been
actively attending exhibitions in Europe and the Middle East and going on
territory visits, to showcase and demonstrate the enhanced product portfolio.
The focus has been on the latest addition to the product family, the
ThreatScan®-AS2, a very thin and light weight imaging panel ideal for rapid
response Counter Explosive Ordnance operations using a backpack deployment,
which was launched at the Middle Eastern Security Exhibition in January 2024.
The introduction of the ThreatScan®-AS2 complements the ThreatScan®-AS1,
expanding outreach to a broader customer and more sophisticated territory
base, and is providing opportunities via partners in larger volume tender
processes that were historically unavailable to Image Scan.
The year-to-date contracts have witnessed a broad geographic spread of
customers from territories including Europe, South East Asia, China, India,
Middle East and Australasia and activity levels in the marketplace remain
strong and are improved by the new product portfolio. Pleasingly, the Group
has received orders from new territories, notably Spain and Switzerland for
Axis-CXi, the cabinet-based x-ray system for screening mail, parcels and small
baggage for potentially harmful items and contraband.
We continue to adeptly manage the reduction in industrial business supporting
the catalyst market (associated with the internal combustion engine), as this
sector undergoes geographic migration to lower cost-based locations. Image
Scan is focusing on service and support revenue rather than relying on capital
equipment sales.
Stock levels are being managed carefully to ensure customer delivery
expectations are achieved. Stock levels have increased since a low at the 2023
year end (following strong sales) back to more normal levels and in
anticipation of a stronger second half sales performance.
The product development program continues to focus on additional options for
the higher precision portable X-ray imaging systems and widening the scope of
opportunity for our global partner network to participate in all portable
x-ray competitions regardless of their location or technical specifications.
Post Period-end highlights
As announced on Monday 29 April 2024 the Company has won an initial order of
c£300k from a partner to supply them with ThreatScan®-AS1 portable X-ray
systems pursuant to a framework contract the partner has secured with a
European Ministry of Defence (MOD) organisation.
The initial order of ThreatScan®-AS1 portable X-ray system's valued at
approximately £300k and is scheduled for delivery in H2 FY24. Further orders
are expected over the period of the partner's two-year framework contract
albeit the volume and timing of subsequent orders is as yet not certain.
This order represents a major milestone for Image Scan, marking the first
large-scale order for the recently released ThreatScan-AS1 for use by a
European military organisation. It validates the Company's product development
strategy to develop and deliver higher-performance solutions in the portable
x-ray market.
Outlook
The introduction of the higher value ThreatScan®-AS1 complemented by the
ThreatScan®-AS2, demonstration activity, the level of attendance at security
trade shows globally, the order outlined above and the opportunity pipeline
built with ours partners instils growing confidence for the future. The orders
received in H1 2024 combined with the significantly improved (compared to the
same period of FY23) sales pipeline will deliver increased sales in the second
half such that we remain confident of meeting market expectations for the
year.
The Board continue to look create strategic opportunities to expand the
business organically through partnerships and via acquisitions. The Board,
with the support of the Company's largest shareholder, has commenced
a process of identifying and analysing organisations offering complementary
products or technology that would benefit from Image Scan's well developed
partner network.
I want to express my sincere gratitude to the team for their ongoing
commitment to making this strategy a reality
Vince Deery
Chief Executive Officer
Consolidated income statement
For the six months ended 31 March 2024
Note Six months Six months Year ended
ended ended 30 September
31 March 2024 31 March 2023 2023
(Unaudited) (Unaudited)
£'000 £'000 (Audited)
£'000
Revenue 1,061 1,459 2,963
Cost of sales (492) (752) (1,528)
Gross profit 569 707 1,435
Gross profit % 54% 48% 48%
Operating expenses (691) (688) (1,354)
Other operating income - - 15
Operating (loss)/profit (122) 19 96
Finance income 5 2 7
Interest payable (2) (5) (6)
(Loss)/profit before taxation (119) 16 97
Taxation - - 26
(Loss)/profit for the period (119) 16 123
Pence Pence Pence
Earnings per share
Basic (loss)/profit per share 3 (0.09) 0.01 0.09
Diluted (loss)/profit per share (0.09) 0.01 0.09
Consolidated statement of changes in equity
For the six months ended 31 March 2024
Note Six months Six months Year ended
ended ended 30 September
31 March 2024 31 March 2023 2023
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Opening equity shareholders' funds 1,511 1,388 1,388
(Loss)/profit attributable to equity shareholders (119) 16 123
Closing equity shareholders' funds 1,392 1,404 1,511
Consolidated statement of financial position
As at 31 March 2024
As at As at As at
31 March 2024 31 March 2023 30 September
(Unaudited) (Unaudited) 2023
£'000 £'000 (Audited)
£'000
Non-current assets
Intangible and tangible assets 488 514 481
488 514 481
Current assets
Inventories 495 569 349
Trade and other receivables 514 440 634
Cash and cash equivalents 759 1,003 958
1,768 2,012 1,941
Total assets 2,256 2,526 2,422
Current liabilities
Trade and other payables 753 981 784
Non-current liabilities 111 141 127
Total liabilities 864 1,122 911
Net assets 1,392 1,404 1,511
Equity
Share capital 1,368 1,368 1,368
Share premium account 8,333 8,333 8,333
Retained earnings (8,309) (8,297) (8,190)
Equity shareholders' funds 1,392 1,404 1,511
Consolidated cash flow statement
For the six months ended 31 March 2024
Six months Six months ended 31 March 2023 (Unaudited) £'000 Year ended
ended 30 September
31 March 2024 2023
(Unaudited) (Audited)
£'000 £'000
Cash flows from operating activities
Operating (loss)/profit (119) 19 96
Adjustments for:
Depreciation 6 8 7
Amortisation of intangibles 24 22 61
Amortisation of right of use asset 17 21 38
Impairment of inventories (5) (14) (54)
(Increase)/decrease in inventories (141) 74 334
Decrease/(increase) in trade and other receivables 82 172 (40)
(Decrease)/increase in trade and other payables (6) 105 (81)
(Decrease)/increase in provision for warranty (6) 3 (4)
Net cash (used in)/generated from operating activities (148) 410 357
Corporation tax recovered - - 71
Net cash (outflow)/ inflow from operating activities (148) 410 428
Cash flows from investing activities
Interest received 5 2 7
Purchase of intangible assets (37) (80) (124)
Net cash used in investing activities (32) (78) (117)
Cash flows from financing activities
Lease payments (19) (19) (43)
Net cash used in financing activities (19) (19) (43)
Net (decrease)/increase in cash and cash equivalents (199) 313 268
Cash and cash equivalents at beginning of period 958 690 690
Cash and cash equivalents at end of period 759 1,003 958
Notes to the unaudited interim financial statements
For the six months ended 31 March 2024
1 Basis of preparation
The interim financial statements, which are unaudited, have been prepared on
the basis of the accounting policies expected to apply for the financial year
to 30 September 2024 and in accordance with recognition and measurement
principles of International Financial Reporting Standards ('IFRSs') as adopted
by the United Kingdom. The accounting policies applied in the preparation of
these interim financial statements are consistent with those used in the
financial statements for the year ended 30 September 2023.
The interim financial statements do not include all of the information
required for full annual financial statements and do not comply with all the
disclosures in IAS 34 'Interim financial reporting'. Accordingly, whilst the
interim statements have been prepared in accordance with IFRSs, they cannot be
construed as being in full compliance with IFRSs.
The financial information for the year ended 30 September 2023 does not
constitute the full statutory accounts for that period. The annual report and
financial statements for the year ended 30 September 2023 have been filed with
the Registrar of Companies. The independent auditor's report on the report and
financial statements for the year ended 30 September 2023 was unqualified, did
not draw attention to any matters by way of emphasis, and did not contain a
statement under Section 498(2) or 498(3) of the Companies Act 2006.
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 loss on ordinary activities
before taxation of £119k (H1 2023 profit £16k) and on 136,854,577 ordinary
shares in issue throughout the period.
Diluted profit per share is calculated by adjusting the weighted average
number of ordinary shares in issue on the assumption of conversion of dilutive
potential ordinary shares, based on the share price at the end of the
period. The Company's dilutive potential ordinary shares are shares issued
under the Company's Enterprise Management Incentive ('EMI') scheme and options
issued under the Company's Unapproved scheme.
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