IndigoVision raises divi by 25% after record operating profits

Former chief executive Oliver Vellacott was ousted in December, with finance director Marcus Kneen taking over his role.

The boardroom coup sparked a tentative takeover approach by Vellacott and Scottish Equity Partners, which was believed to have been at about 400p a share.

IndigoVision’s shares hit 412p yesterday before profit-taking dragged the stock down to close 10p lower at 367.5p.

Operating profits for the six months to 31 January jumped by 14 per cent to a record £1.59 million boosted by price increases and tight control of costs.

Pre-tax profits – which took into account a £210,000 payment to Vellacott in lieu of his 12 months’ notice period – and £90,000 in advisers’ fees in dealing with the potential takeover – fell to £1.3m from £1.4m. The exceptional costs had already been flagged.

The jump in operating profits boosted the amount of cash in hand to £7.2m from £5.4m at the half-way stage last year. The firm also has no bank debt.

Higher operating margins allowed the revamped board to increase the interim dividend by a quarter to 5p.

Chairman Hamish Grossart said: “IndigoVision has the potential to be substantially larger than it is today, and has positioned itself well in a growing market, but much remains to be done to achieve its potential.

“The restructured management team has got off to an excellent start.”

Kneen added: “These are strong first-half results. The second half has got off to an encouraging start with orders up on the same period last year.”

Sales fell by 4 per cent year-on-year to £14.5m but Grossart said they could return to growth during the second half.

More details were released yesterday of Vellacott’s departure. Grossart said Vellacott turned down the post of deputy executive chairman and so his contract was terminated. Vellacott, who founded the business in 1994, still holds a 23 per cent stake in the company.