IndigoVision is playing for high stakes

Published on Thursday 6 August 2009 21:28

HIGH-ROLLING casinos and Canadian border police have helped IndigoVision, the Edinburgh-based digital CCTV firm, to zoom in on bumper profits.

Operating profit at the Aim-listed company will be "materially ahead of market expectations", the company said yesterday after a 43 per cent leap in revenues.

Turnover for the year to 31 July should reach 26.3 million, the board estimated, after a "strong" second half to its financial year, particularly during July.

The group said sales growth was strong in North America, the Middle East and Asia-Pacific, buoyed by deals with airports, casinos and banks.

The shares shot up nearly 20 per cent as analysts said the firm's pre-tax profits may rise from the forecast 2m to 3m.

In March, the company signed its first contract with a casino on Las Vegas's famous "strip", supplying surveillance equipment to the M Casino.

Last month, Indigo won a contract from the Canadian authorities to supply high-definition CCTV cameras to monitor the country's border with the United States.

Using the new multi-million-dollar HD system, border patrol officers can monitor vehicles' number plates at remote locations from a central control room and communicate with the drivers.

The Canadian deal – which covers 31 of a possible 139 border crossing points – is worth "several millions dollars" to the company, which already draws annual revenues of about $8m (4.8m) from Canada.

IndigoVision's other clients include ScottishPower and Edinburgh Castle, and the firm has supplied two Olympic games and the 2006 World Cup in Germany. The company's systems are used in 28 airports and 27 casinos throughout the world, shipping to 82 countries, and there are IndigoVision's own staff in 22 nations.

In the six months to 31 January, revenue had increased 16 per cent to 10.7m but operating profit fell 7 per cent to 1.2m, illustrating the accelerated sales growth in the second half of the company's financial year.

Marcus Kneen, IndigoVision's chief financial officer, said: "The advantage we have is that we're selling into a lot of different countries.

"There are tortuous econo-mic conditions in various markets but if you have a good enough spread geographically and across different sectors then you have more chance of being able to deliver a good set of results."

Kneen said IndigoVision – which has about 126 staff mainly in three hubs in Edinburgh, Singapore and New Jersey – was "cautious" on the outlook for the year ahead but added that the company was competing for a lot of contracts.

Greig Aitken, an analyst at house broker Brewin Dolphin, upgraded his 2010 revenue forecast by 10 per cent to 28.9m.

Aitken added that the strong growth was a testament to management's sales strategy and the "strength of its products".

IndigoVision's shares closed up 19.8 per cent or 80p at 485p.