IndigoVision shares slip as forecasts take a hit

INDIGOVISION, the Scottish CCTV systems manufacturer, yesterday confirmed that profits would be lower than expected, but insisted the company was on course for growth.

Shares fell 25p or 10.9 per cent to close at 205p. Marcus Kneen, chief financial officer, blamed the fall on a small number of trades among private investors.

Group profits before tax for the year to 31 July should come in at 1.2 million, which is lower than market estimates, although sales will be 28.9m, or 3 per cent above last year.

The company first warned investors in June that trading had under-performed forecasts. In a pre-close trading statement yesterday, it said sales had risen strongly in Latin America and were satisfactory in Asia Pacific. But they were down in North America, Europe, the Middle East and Africa.

In North America US sales increased by 28 per cent, but were offset by a 35 per cent fall in Canada. Six sales managers have been hired.

Sales growth of 18 per cent in Northern Europe was offset by a 12 per cent reduction in business in the UK and 9 per cent lower sales in Southern Europe, Middle East and Africa. This reflects differing regional economies within Europe and weaker conditions in the Middle East, it said.

The fall in UK sales was largely expected as a result of public expenditure cuts, said the company. In developing regions, now amounting to one-third of group sales, there were contract successes in Australia, Brazil, China and Colombia.

After its earlier warning on profits the company lost a deal in Arizona, which was based on false assumptions that the company had financial problems, said Kneen.

The company said it remains financially strong, with 5m of cash and sufficient bank facilities to provide strong liquidity. The flow of new products has strengthened and should continue to develop.