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IndigoVision profit surge 'good news'

INDIGOVISION chief ­executive Marcus Kneen said that a surge in profits and revenues, including a long-awaited boost in the tricky US market, was a sign that his reorganisation of the company was feeding through to its bottom line.

The Scottish video surveillance company reported a 14% rise in revenue to £18.4 million in the first half of its financial year to January 31. The sales boost was amplified in its earnings, with pre-tax profits up 33.5% at £1.3m.

This takes profits back up to levels of two years ago, after a fall in 2013. Investors responded by sending its shares up 53.5p, or 15%, to 411p.

Mr Kneen, who took the reins at IndigoVision in 2011, said: "What we have done is repositioned the company. We have greatly expanded the range of products we have for sale. We have improved the management of the sales team."

He added: "It takes time for the benefit of that to come through."

Among its recent contract wins have been a deal for the 2014 World Cup, Edinburgh Airport and a "major sporting event in Scotland" this year, which Mr Kneen declined to name. A major boost to Indigovision was a 23% year-on-year rise in sales to £4.2m in the United States, where the company has suffered several years of flat or declining sales.

Mr Kneen said the performance in the US had been driven by a new sales director for the country, who was appointed 18 months ago.

He said of the US: "It is a big opportunity.

"The US has the biggest potential for the business.

"When you get the right team in position, the right leadership and the right product, you get results."

He said that sales in Asia, where revenues were up 23% at £3.2m, had also been strong as it secured its first contract with a casino in Macao.

In Latin America, where sales were up 13% in local currency terms, he conceded that growth was not as rapid as it had been.

But he added: "We are expecting some big projects."

The sales mix at the company has continued to move towards cameras, where 28% growth means they now account for 54% of revenue.

Sales of encoders, previously a dominant part of IndigoVision's product mix, continued to fall and accounted for just 21% of revenues in the period.

Storage and other income was up 24%, comprising a quarter of income.

Mr Kneen said: "Sales of our camera range were very encouraging and resulted in a strong financial performance.

"We have had a solid start to the second six months and the rate of order intake remains well ahead of last year."

IndigoVision will pay a 6p interim dividend on April 17.

Mr Kneen's predecessor Oliver Vellacott abruptly left the company in late 2011, after having three separate management buyout proposals rejected by IndigoVision's board.

Mr Vellacott sold his stake of more than 22% in October 2012 following a failed bid to oust IndigoVision's chairman Hamish Grossart.

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