Proactive Investors - Run By Investors For Investors

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.

View full IGE profile View Profile

Image Scan Holdings Plc Timeline

Related Articles

machines
February 04 2019
“We continue to focus on further strengthening our engineering capability and optimising quality management to meet the expected growth in demand for driver monitoring systems,” chief executive Ken Kroeger.
Iran sanctions cartoon
September 21 2018
The group has been providing baggage screening services at Freetown International Airport in Sierra Leone for the past five years
Biohazard symbol
December 10 2018
On 10 December, the group signed a 12-month contract with the agency, part of the US Department of Defense, carrying a value of US$1.99mln

© Proactive Investors 2019

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use