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Image Scan higher as it swings to profit amid sales surge

The X-ray screening specialist attributed the positive swing in full year profits to a “strong first half", although it added that its second half had seen a “lower level of activity” as coronavirus led to a slowdown in new business

Image Scan Holdings PLC - Image Scan higher as it swings to profit amid sales surge

Image Scan Holdings PLC (LON:IGE), a supplier of X-ray screening systems for security and industrial inspection markets, saw its shares rise on Friday after the AIM-listed firm swung to a profit in its full year following a surge in sales.

For the year ended September 30, the company reported a pre-tax trading profit of £113,000 compared to a £402,000 loss in the previous year, while sales jumped 50% to £3.5mln.

Image Scan attributed the positive swing in profits to a “strong first half, building on a large portable X-ray order won at the end of the previous year”, although it added that its second half had seen a “lower level of activity” as coronavirus led to a slowdown in new business.

However, despite this, the firm said it has continued to receive orders and run its manufacturing site, while cost and stock management had made it “strongly cash generative”.

Looking ahead, Image Scan said it has “continued to receive a steady stream of smaller orders” and that it expects to be “well positioned” with its X-ray product range when procurement returns to more normal levels.

“We aim to make the first sales of our new cabinet X-ray systems in the current financial period and expect growth beyond that… It is hard to anticipate when spending on security systems might return to more normal levels, but we are confident that our expanded product range and wide market access puts us in a good position to benefit when that happens”, the company added.

However, heading into the new financial year, Image Scan said without the “exceptionally strong order book” that had characterised the start of the prior year as well as current delays to the placing of large orders meant it expected a “challenging year ahead”, although it added that its cash balance provided confidence that it could weather the uncertainties.

"It is gratifying to be able to report a profit in the middle of such a difficult period for manufacturers around the world. The [coronavirus] pandemic has impacted our customers, our supply chain and our staff. However, I am proud of the way the whole company has pulled together through this period to keep the business operating and to be able to deliver a profit for the year that exceeded our earlier estimates”, Image Scan chairman and chief executive Bill Mawer said in a statement.

“The recent launch of the Axis-CXi cabinet X-ray machine is an exciting step forward for the company and should bring new customers and new sources of revenue. With our strong cash position and our ambitious product development programme we look to emerge from the pandemic well-placed for the future”, he added.

Shares in Image Scan rose 7% to 2.3p in early trading.

Quick facts: Image Scan Holdings PLC

Price: 3 GBX

AIM:IGE
Market: AIM
Market Cap: £4.09 m
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