The Edinburgh-based company said it would seek to buy back up to 375,000 shares – amounting to about 5 per cent of its issued share capital – by using its existing cash resources to make market purchases “from time to time”.
• READ MORE: IndigoVision says outlook is positive as sales grow
Aim-quoted IndigoVision, which last week said that its outlook was “more positive than it has been for some time” following an improvement in sales and orders, said the buyback scheme would benefit its earnings per share and help to close a “persistent gap” between the market value of the company and the board’s assessment of its intrinsic value.
The firm, led by chief executive Marcus Kneen, added that its board’s policy was to maintain a “strong balance sheet” with net cash resources to provide the flexibility for investment “should the right opportunities arise”.
Nominated adviser N+1 Singer has been tasked with executing the share buybacks, with a maximum price to be paid of no more than 105 per cent of the average closing price for the five days leading up to any purchase. Shares in IndigoVision closed at 226p yesterday.
IndigoVision’s largest shareholder is Swiss investment fund New Pistoia Income, which has a stake of almost 30 per cent. The City’s takeover panel has confirmed that any purchase that takes New Pistoia’s holding above the 30 per cent threshold will not trigger an obligation for it to mount a full takeover offer for the company.
Results in March showed that IndigoVision returned to the black in 2016 with an underlying operating profit of $359,000 (£276,000), compared with a $743,000 loss in 2015.
The company said last week that, during the four months to April, software licence and camera volumes had shown “strong” year-on-year growth of 28 per cent and 10 per cent respectively, following a quiet start to the year.