Shares in IndigoVision plunged 19% after the company confirmed the rate of sales growth slowed sharply in the second half, although it confirmed it was still in line to triple its annual operating profits.

Shares in IndigoVision plunged 19% after the company confirmed the rate of sales growth slowed sharply in the second half as casinos and banks deferred projects, although it confirmed it was still in line to triple its annual operating profits.

The Edinburgh company, which supplies video networks that can be controlled by computers, said sales increased by 28% in the six months to July, compared with 48% in first six months.

Confirmation of the slowdown comes after IndigoVision said there were signs that the downturn in countries like the US and sectors like financial services could impact on the firm when announcing interim results in March.

As IndigoVision has won significant business from casino operators and banks, problems in either sector could have quite an impact on the firm.

Marcus Kneen, chief financial officer, noted that casinos were being hit by the decline in consumer confidence. "Any banks with any sense are putting capital expenditure on hold for six months."

However, Kneen stressed that this had resulted in customers delaying orders rather than cancelling them, "It is entirely logical."

Highlighting the fact that gross margins had been held at 71% in the second half, up 5% on last year, he said there had been no fundamental shift in the market.

Asked whether profitability had been maintained, net of selling and other expenses, he said details of operating margins were not being published yet.

However, he noted that IndigoVision had confirmed that "operating profits for the year just ended are expected to be broadly in line with market expectations, which are around three times the previous year's level".

Kneen said IndigoVision had been beefing up its sales function towards the end of the financial year, signalling its confidence.

The company sees big opportunities to grow in export markets like India and Brazil.

IndigoVision has recently completed a number of projects in China.

Kneen declined to say if the company had worked on any Olympic Games projects.

Investors appeared concerned by news of the slowing growth yesterday, when shares in IndigoVision closed down 110p at 465p.

However, Kneen shrugged off the movement.

"I don't think there's much rationality in stock markets at the moment. They are being driven by lots of factors.

"The reality is this business is growing very nicely"

The results for the year to July 31 are expected to be released on September 25.

In the six months to March, pre-tax profits surged more than 250% to nearly £1.3m. Operating margins jumped to 14%, compared to 6% in the same period a year earlier.