VIDEO surveillance specialist IndigoVision said cost-cutting, a re-positioning of the business, partnerships with Chinese manufacturers and growing demand in markets such as border control would lead to ‘improvements’ in 2016.
Addressing shareholders at the company’s annual meeting in Midlothian, chief executive Marcus Kneen said 2015 had been a “tumultuous journey” and added: “It’s credit to the whole team at IndigoVision that they bound together and got change happening – and happening quickly.”
Chief operating officer Paul Theasby explained why IndigoVision stopped developing hardware in house in 2015. This led to the loss of several jobs. “I’ve been watching Chinese and Asian manufacturers for five years and I’ve seen exponential increase in their capacity,” he said. “They start off just copying, but then they get smart and they get better. If you can’t beat them, join them. So we now have partnerships in Asia with some of the biggest manufacturers in the world. We’re talking about billion-dollar companies. One of the challenges [working with Asian manufacturers] is keeping up quality, and they are very keen to work with us on that topic.”
The range of products this opened up put IndigoVision “right up there with the best”, he said.
Mr Kneen said the profit of the two biggest Chinese companies was larger the the sales of the biggest Western company. “There’s no point competing with them,” he said. “We need to learn how to dance with the elephants, and that’s what we’re doing.”
Mr Theasby explained that the company’s internet-based closed-circuit television system could be integrated with infrastructure including perimeter fences and added: “In Europe we’re seeing an ingress of migrants coming in and we’re seeing big demand from that.”
IndigoVision has border control clients in regions in Canada, Mexico and Europe.
Mr Kneen added: “Certainly the border control market is much more active than it has been. But there are trouble spots globally, including the Middle East and Mexico.”
Marketing manager Paul Murphy noted that IndigoVision already had a footprint in four markets identified as ‘megatrends’ of the future – drones, wearable technology, big data and the internet of things. “We have integrated drone technology into our management software,” he explained. “We see drones as another source of video.”
The company also sells a body-worn camera called FrontLine that looks like a badge and is used by workers including police and hospital staff to protect against abusive behavior and false complaints.
Mr Kneen said IndigoVision’s technology had been used at five Olympic Games and that its customers in Scotland included the Edinburgh Military Tattoo, Police Scotland and ScottishPower. Other UK and international clients include Amazon, Ikea, Toyota, Qatar Airways, Shell, the BBC, BMW and London City Airport.
"We're a 21-year-old company that has survived a series of challenges over the years – and we're still on the pitch,” he added. "IndigoVision for many years has had promise. The challenge – because technology keeps moving – is to deliver that promise in terms of the business results."
Reading a trading update, chairman Hamish Grossart said revenues were “a little behind” last year, but operating performance was ahead as a result of action taken to adjust to market conditions.
“Efficiencies continue to be realised, cash balances are strong, and currency movements have benefited the group in the year to date,” he added. “Pricing pressure continues to be evident in the marketplace, but this has been ameliorated by higher sales volumes year on year and by product cost reductions aimed at maintaining gross margins.”
The low oil price and and competition from low-cost manufacturers in China saw the company slump to a $743,000 loss in 2015 from a $4 million profit in the previous 12 months.
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