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Botched acquisition and loss of major order sees Image Scan swing to a loss

“Image Scan grew rapidly in both sales and profits between 2015 and 2017 and so the cancelled order and the failure of the attempted acquisition have come as disappointments”
x ray machine
Image Scan had to pay £250,000 in legal fees and other costs, only to not go ahead with the acquisition

Image Scan Holdings Plc (LON:IGE) swung to an annual loss last year, capping off a tough period that the x-ray screening systems maker will be glad to see the back of.

The AIM company posted a loss of £154,000 in the 12 months ended September, compared to a profit of £480,000 a year earlier.

Much of the reversal was down to the aborted acquisition of Todd Research at the end of summer, with Image Scan having to back out of the deal after failing to get the support of its largest shareholder.

Image Scan ended up forking out £250,000 in legal bills and other costs, despite not going through with the purchase.

READ: Image Scan predicts full-year loss after mixed 2018

That wasn’t the only issue though. The cancellation of a large order from a major customer in Asia meant sales slipped to £3.5mln (2017: £5.0mln).

“Image Scan grew rapidly in both sales and profits between 2015 and 2017 and so the cancelled order and the failure of the attempted acquisition have come as disappointments. A decline in portable X-ray orders has exacerbated this,” said chairman and chief executive Bill Mawer.

“Our order pipeline is strong, we have strengthened our team and re-focused our research and development activity to drive the business forward through organic growth.”

Image Scan expects sales of its portable X-ray systems to pick up in the current year.

The company added it will target the Chinese market, where it has seen growing demand for its products of late.

Shares fell 9% on Wednesday morning to 2.6p, valuing the firm at less than £5mln.

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