Image Scan (AIM: IGE), the specialist supplier of X-ray screening systems to the security and industrial inspection markets, provides a trading update ahead of its Annual General Meeting to be held at 13:30 today.
Key Points:
- Renewed focus on organic growth following lack of shareholder support for an acquisition
- Sales behind management expectations at the end of H1 due to contract delays with international Government customers but are expected to recover during H2 to meet expectations for the full year
- Healthy opportunity pipeline continuing to grow in both security and industrial
- New product development programme well underway targeted at new security product sector
- Discussions progressing to expand product range through partnership with other X-ray companies
An organic growth plan has been developed with the short-term goal of returning the Company’s performance to the level achieved in FY 2017 and to develop a sustainable platform for long term growth. This plan is driven by new initiatives to expand both the Company’s product range and its market access.
In addition to sustaining the pace of innovation in its portable X-ray products, the Company has started a project, based on the Company’s existing range of technologies, to develop a new security X-ray system, designed for a similar but different group of customers from the bomb squads at whom the portable range is targeted. Discussions are advancing to further broaden the product range through partnership with other security technology companies.
Significant new channel partners have been appointed in South America and Europe and these are managed by the recently appointed sales manager. A tour of South America produced a strong pipeline of opportunities.
Government procurement processes are lengthy and not always predictable in their timing and sales intake is running behind management expectations for the half year. However, with customer decisions due on several significant projects, the level of activity is expected to increase in the second half and the Company expects to achieve market expectations for the full year.
Image Scan’s Chairman and Chief Executive, Bill Mawer, commented:
“We are now moving forward rapidly with our recovery plan with the short-term aim to drive strong organic growth, diversifying our sources of revenue to deliver sustainable performance improvement and renew shareholder and investor confidence to the point where growth by acquisition can again be contemplated.”
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