Profits fall at IndigoVision but revenues rise to record

Group Business Editor

Friday 8 March 2013

SCOTTISH video surveillance systems specialist IndigoVision has posted a fall in first-half earnings even though it notched up record revenues, but it is forecasting a rise in full-year operating profits.

IN FOCUS: Hamish Grossart and Marcus Kneen expect IndigoVision to have exciting news for Scotland this year. Picture: Stewart Attwood

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Ian McConnell Business Editor

IndigoVision, which is involved in video surveillance in about 80 cities and towns in Colombia in South America, including Medellin, and expects this number to rise to 120 by the year-end, yesterday reported revenues of £16.1 million for the six months to January 31.

This figure was up 11% on its previous first half and IndigoVision chairman Hamish Grossart declared it was also the highest recorded by the company in a six-month period.However, IndigoVision's pre-tax profits of £952,000 in the six months to January 31 were down from £1.297m in its previous first half. First-half operating profits fell from £1.293m to £926,000.The underlying falls were steeper, with the operating and pre-tax profit numbers for the prior first-half stated after charging £299,000 of costs classified as exceptional, including a payment in lieu of notice to founder and former chief executive Oliver Vellacott.Mr Grossart said the mix of projects completed in the six months to January 2013 had resulted in lower gross profit margins than the "very strong levels" of a year earlier.However, he highlighted IndigoVision's expectation that the "operating result" for the full financial year to next January would be better than the "strong outcome" for the prior 12 months. He also cited IndigoVision's expectation that this would be a record year for sales.Shares in IndigoVision yesterday dipped by 2.5p to 330p. They had dropped by 15.5% or 62p to 338p on November 8 last year, when the company issued a trading statement which Mr Grossart said at the time was telling the market it was "steady as she goes".IndigoVision chief executive Marcus Kneen, speaking from the Brazilian city of Sao Paulo, highlighted his company's presence in the global oil and gas sector. He named Brazilian oil giant Petrobras as a major customer, which used IndigoVision's technology to enable it to see and hear what was happening at its various sites and facilities.Mr Kneen also cited the ability of IndigoVision's software to handle large internet-protocol video surveillance systems.He said: "What is exciting is we have the capability to do very, very large systems."Mr Kneen highlighted his ambition for IndigoVision to undertake more work in its native Scotland.He said: "We are a Scottish company. We need to do a lot more work in Scotland."Explaining why IndigoVision had not done more business in Scotland in the past, Mr Kneen said: "The doors that open easiest are the ones you push open first."However, he added: "The exciting thing for me is, certainly in the next 12 months, we will be announcing some good wins in Scotland."He cited the Golden Jubilee National Hospital, at Clydebank near Glasgow, and ScottishPower as among IndigoVision's existing client base in Scotland.Meanwhile, Mr Kneen highlighted IndigoVision's ambitions to ramp up its presence in North America. He also declared that the company's video surveillance systems featured in three of China's top six airports.He cited a hike in IndigoVision's engineering spend, as well as moves to build the sales and marketing team.Mr Vellacott, who departed as chief executive abruptly in late 2011 after having three separate management buy-out (MBO) proposals rejected by IndigoVision's board as undervaluing the technology company, sold his stake of more than 22% in October last year. Scottish Equity Partners, which had backed Mr Vellacott's MBO attempts and then considered but decided against making a further offer proposal, also sold its 6.63% holding in October 2012 .After leaving the Midlothian-based firm, Mr Vellacott mounted then abandoned a bid to oust Mr Grossart as chairman.Asked if he had had contact recently with Mr Vellacott regarding the IndigoVision business, Mr Kneen replied: "No."IndigoVision employs about 150 people, including 84 in Scotland. It proposes to raise its interim dividend by 10% to 5.5p a share.

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Profits fall at IndigoVision but revenues rise to record

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