Latest Scottish firm with designs on stock market float

I-design, which is based in Newport-on-Tay, is expected to raise 3.5 million and be valued at almost 10m when its shares begin trading on AIM on Friday.

Although small in scale, the listing provides further evidence that home-spun businesses are prepared to go public during a period which has seen a string of Scottish firms, including ScottishPower and property firm Halladale, disappear from the market.

Last week, Superglass, the Stirling-based insulation manufacturer, made its debut on the main London market in a move that valued it at more than 100m - the biggest Scottish flotation since Standard Life last July.

Others, such as Argent Energy, the Lanarkshire renewable fuels group, are known to be gearing up to go public.

The stock market push also runs counter to the current trend for listed companies to sell out to cash-rich private equity players.

Founded in 1991 by its chief executive, Ana Stewart, i-design has developed a product that allows banks to run third-party advertising campaigns across their ATM networks.

It claims that its system is the only one in the UK to combine the software and media sales capability necessary to enable network owners to generate revenue from such advertising. The technology also offers advertisers the ability to target specific consumers groups. Rising operational costs and a backlash against ATM charges have forced banks and building societies to look at alternative ways to generate additional revenue.

Customers already on i-design's books include HSBC and the Nationwide Building Society. Advertising campaigns have been run for the likes of EasyJet, Kwik-Fit and Vodafone.

The firm said its "ATM:ad" system was now in use at more than 2,100 cash machines - still a fraction of the 60,000 ATMs estimated to be installed around the UK.

Stewart, who has repositioned i-design to focus wholly on the ATM marketing tool, said: "We have developed an unrivalled ATM advertising solution which enables network owners to generate additional revenues and advertisers to target customers across multiple networks.

"This is an exciting period of growth for us as we seek to expand our sales both in the UK and abroad, and we believe that admission to AIM will enhance our status and provide us with a strong foundation for growth."

The company is chaired by Jim Faulds, the advertising industry veteran who also chairs Dunfermline Building Society and sits on the boards of the Scottish Exhibition Centre and energy consultant Wood Mackenzie.

Faulds is one of two non-executive directors at i-design - the other being Mark Hogarth, the head of investment at Edinburgh-based finance house Sigma Capital Group.

Stewart said the proceeds of the flotation would be used for product development, to expand its London-based sales team and to attack new territories including Germany, Spain and the US.

Arbuthnot Securities is acting as the company's nominated adviser and broker.

For the six months to the end of March, i-design posted an operating loss of 176,000 on revenues of 515,000. That compares with sales of 679,000 and a deficit of 626,000 for the year to September 2006.

SCOTSMAN COMMENT

SCOTLAND has lost more than its fair share of plcs over the last couple of years.

It's reassuring, therefore, to see a growing band of indigenous companies take the plunge and go for a stock market listing. Heartening also to see that they come from a variety of industry backgrounds.

Of course, becoming a publicly quoted entity is not the most appropriate route for every business.

Plenty of mid-sized companies are growing their sales and profits, taking on additional workers and acquiring other businesses without the "distraction" of outside shareholders.

It's fair to say that the number of listings over the past year amounts to a trickle rather than a flood.

Undertake a regional breakdown of the London market and Scotland plc is still punching below its weight.