INDIGOVISION, the video security specialist, saw its shares tumble 16 per cent yesterday after warning that its profits would miss City hopes because of weaker-than-expected sales.
The Edinburgh-based group recently hailed a record sales haul for the 12 months to the end of July, but told investors that tough trading across the Asia Pacific and Latin America regions had offset healthy growth elsewhere during its “fifth” quarter.
Yesterday’s trading update revealed group sales of £43.4 million for the 15 months to the end of October – 9 per cent ahead of the same period a year earlier – with gross margins in line with its expectations.
However, the firm – which is changing its financial year-end from July to December – took a £330,000 hit due to the strength of sterling. It is due to adopt the dollar for presenting its financial performance because its global business mainly uses the US currency for pricing.
IndigoVision, led by chief executive Marcus Kneen, supplies high-definition CCTV security systems for airports, casinos and prisons around the world. Recent one-off projects include the World Cup in Brazil and Glasgow’s Commonwealth Games.
It said: “In the fifth quarter, covering August to October, good rates of sales growth continued both in North America and in Europe, Middle East and Africa, but this was offset by lower sales in Latin America and Asia Pacific.
“As a result of the lower-than-expected sales in the fifth quarter, the group currently anticipates that operating profits before foreign exchange movements for the 17-month period to 31 December will fall short of existing market forecasts.”
In the wake of the profit alert, shares in the Aim-quoted company fell as low as 374p before ending down 71.5p at 381p.
Speaking to The Scotsman from Singapore, Kneen said: “In Latin America we’ve had five very good years in a row, and there’s going to be a bad year at some point, but customers like our products. You’re going to get bumps in the road but I’m totally confident about our direction of travel.”
Headquartered in Edinburgh, where about half of its 180 employees work, the firm has staff in 23 countries selling its intelligent video security systems.
The company’s technology has also been adopted for industrial applications, and mining giant Rio Tinto uses it to control driverless trains and trucks in Western Australia.
IndigoVision, which was founded in 1994, is due to announce its final results towards the end of February. It insisted that the medium-term outlook for the business “remains favourable”.
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