Sales up but margins down at IndigoVision

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IndigoVision, the Edinburgh-based CCTV systems maker, today announced a rise in first-quarter sales but its shares fell as it warned that margins were down and costs had risen as it invested in the development of new products.

Speaking at the firm’s annual meeting in Edinburgh, chairman Hamish Grossart said sales had risen by 6 per cent in the first three months of the year, while orders grew 10 per cent.

He told investors: “As expected, the mix of projects completed resulted in lower gross margins than last year’s very strong levels.

“Overheads rose in line with budgets, reflecting spend to support sales growth and further investment in engineering and product development, the key to long-term value.”

Shares in the firm were down almost 12 per cent at 352.5p following the update.

Last week it emerged that Scottish Equity Partners, which teamed up with IndigoVision founder Oliver Vellacott to mount a tentative takeover approach, had sold its entire 6.63 per cent stake in the technology firm.

Vellacott, who set up the business in 1994, was replaced as chief executive by former finance director Marcus Kneen in December.

Grossart said today that IndigoVision, which saw its operating profits more than double last year, is poised for further growth but it expects the benefits to be skewed towards the second half of the current year.

He added: “Looking to the longer term, management are tasked with increasing sales growth in line with the attractive and growing markets in which IndigoVision operates.”