IndigoVision confident after hit to profits

Digital CCTV specialist IndigoVision hiked its dividend despite a fall in profits, as it reported a “solid” start to trading in its new financial year.

The Edinburgh-based firm had already warned that the cost of investing in its products and sales teams would hit its bottom line in the 12 months to the end of July.

Full-year results confirmed that, although revenues were 6 per cent higher at £32 million, pre-tax profits of £2.1m were 13 per cent down on the year before.

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Chairman Hamish Grossart said the company’s product mix was evolving from encoders to “intelligent” cameras, which generate a lower margin for the company but provide a greater market opportunity. Intelligent cameras now account for half of the company’s sales.

Meanwhile the firm’s overheads rose 4 per cent due to increased investment in its sales and pre-sales support teams. The sales team headcount increased by 30 per cent during the year.

Lead times on the firm’s projects can be as long as two years and Grossart said the benefits of the substantial increase in headcount in the sales team are not expected to show through in revenues until the latter part of 2014.

Grossart, right, added: “IndigoVision has seen a solid start to the current year, with sales and order intake similar to last year.

“The markets in which IndigoVision operates are attractive and continue to grow strongly.”

He said the group stands ready to grow the sales and support teams further “as soon as returns on the recent headcount increases have been delivered”, in order to capture the growth in the market and develop the scale of the business over both the medium and long term.

Grossart said that IndigoVision was developing hardware, both in-house and with its technology partners, in order to expand its range of hardware more rapidly.

“Over the coming year, development will focus on high-performance, intelligent megapixel cameras and niche products for the oil and gas and transport segments, to strengthen the group’s position in these markets,” he added.

The board is recommending a final dividend of 5.5p per share, giving a total payout of 11p, compared to 10p the year before.

Chief executive Marcus Kneen said “a great deal” had been achieved to improve the firm’s global sales team and the competitiveness of the product offering, although work was still needed in Europe.

He said: “Asia Pacific and Latin America are delivering good growth, North America has been completely restructured and work continues to turn the Europe, Middle East and Africa region round.

“Customers comment on the new user-friendly software features, excellent service and rate of new product releases. We therefore remain confident in the long term prospects of the business.”