REG - Image Scan Holdings - Interim Results

Image Scan HoldingsAnnouncement

26/04/2023 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230426:nRSZ4309Xa&default-theme=true

RNS Number : 4309X  Image Scan Holdings PLC  26 April 2023

 

This announcement contains inside information for the purposes of Article 7 of
the UK version of Regulation (EU) No 596/2014 which is part of UK law by
virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR"). Upon
the publication of this announcement via a Regulatory Information Service,
this inside information is now considered to be in the public domain.

26 April 2023

Image Scan Holdings plc

("Image Scan", the "Company" or the "Group")

 

INTERIM RESULTS

 

Image Scan, (AIM: IGE) specialists in the field of X-ray imaging for the
security and industrial inspection markets, today announces its interim
results for the six months ended 31 March 2023. The previously reported
stronger momentum that was evident through trade shows and demonstrations has
resulted in an improved performance compared to the same period last year.

Financial summary:

·    Order intake increased by 81% to £1,858k (H1 2022: £1,029k)

·    Revenue was 85% higher at £1,459k (H1 2022: £790k)

·    Gross profit margin of 48% (H1 2022: 52%)

·    Profit before taxation of £16k (H1 2022: loss of £345k)

·    Period end bank balance was £1,003k (H1 2022: £777k)

·    Period end orderbook of £1,116k (H1 2022: £721k)

 

Operational highlights:

·    Large volume portable X-ray system order delivered to a Spanish
security customer

·    Customer deliveries and satisfaction maintained by effective
management of supply chain challenges

·    Research and development effort focussed on developing high end
portable products, taking advantage of grant funding support.

·    Attended Middle Eastern regional trade show with valuable support
from DIT Internationalisation Fund

·    Global activity recovering after a covid hiatus, demonstrated by
contracts from territories including Democratic Republic of Congo, Togo,
Brazil, and Columbia

 

Vince Deery, Chief Executive Officer of Image Scan commented: "We are pleased
with the financial results for the first half of the year and our operational
highlights demonstrate our continued commitment to delivering high-quality
products and services to our customers.

The half year performance demonstrates a substantial improvement over the same
period last year with the higher levels of activity reported at the
commencement of the financial period successfully converted into contracts and
delivery of product to customers. The decline in margin reflects the product
mix and pressures of the global economic conditions. With careful cost
management and continued improved market activity and product innovation we
hope to maintain the momentum to deliver a full year in line with market
expectations.

As part of the Board's succession plan, Dr Richard Leaver has stated his
intention to resign as Vice Chairman and will leave the Board at the end of
the financial year. On behalf of the Board, I would like to thank Richard, and
acknowledge his dedication, support, and guidance to the Company over the
years of his valuable service."

For further information on the Company, please visit: www.ish.co.uk
(file:///C:/Users/sm.1110/AppData/Local/Microsoft/Windows/INetCache/Content.Outlook/SJJWVR80/ish.co.uk)
 and for further information on its products, please visit: www.3dx-ray.com
(http://www.3dx-ray.com)

 

 Enquiries:
 Image Scan Holdings plc                        Tel: +44 (0) 1509 817 400

 Vincent Deery CEO                              ir@ish.co.uk (about:blank)

 Sarah Atwell King, CFO and Company Secretary

 W H Ireland - Nominated Adviser and Broker     Tel: +44 (0)20 7220 1666

 Mike Coe/Sarah Mather (Corporate Finance)

 

 

CEO's statement

Introduction

Image Scan Holdings plc is a specialist in innovative X-ray technology,
operating globally in the security and industrial inspection sectors. The
Company's principal activity is the design, manufacture, and supply of both
portable and fixed X-ray security screening systems to governments, security
organisations and law enforcement agencies. The Company also supplies
high-quality screening systems used in the manufacture of catalytic converters
and diesel particulate filters.

 

Financial results

Order intake for the first six months ended 31 March 2023 ("H1 2023")
increased by 81% to £1,858k (H1 2022: £1,029k). Revenues increased by 85% to
£1,459k (H1 2022: £790k). Gross margin on those revenues was at 48% (H1
2022: 52%), the reduction due to the mix of products sold and global
inflationary pressures.

 

Operating expenses decreased by 8% to £688k (H1 2022: £749k), reflecting
organisational changes and the successful award of a number of grants made
within the year.

 

The overall effect of increased sales coupled with reduced overheads led to a
pre-tax profit of £16k in H1 2023 (H1 2022: loss of £345k).

 

Stock decreased to £569k (H1 2022: £581k; Sept 22 £629k).

 

The Company finished H1 2023 with an order book of £1,116k (H2 2022: £721k)
and a cash balance increase to £1,003k (H1 2022: £777k FY22 £690k) putting
the Company in a stronger position for H2 2023.

 

Overview

The improved sales reflect the previously reported higher activity levels in
the marketplace. We hope these levels continue, which combined with our cost
control and organisational changes will assist the Company to deliver
according to market expectations. The improved £1,116k order book will be
largely delivered in this financial year.

 

Careful attention has been paid to costs and stock levels to ensure the
correct balance is struck between satisfying customer lead time and managing
cash reserves, this will continue in the second half. The ongoing difficult
economic outlook and inflationary pressures will continue to impact margins.

 

The product development program continues to focus on additional options for
the higher precision portable X-ray imaging systems and has been supported
financially by a number of grant awards.

 

Organisational change

Internal restructuring has taken place over the period which has been executed
with pleasing levels of staff engagement and support.

 

As part of the Board's succession plan, Dr Richard Leaver has stated his
intention to resign as Vice Chairman and will leave the Board at the end of
the financial year. The Board would like to thank Richard, and acknowledge his
dedication, support, and guidance to the Company over the years of his
valuable service.

 

 

Outlook

The increased level of foot fall at security trade shows globally and the
improved level of demonstration activity by our sales team and the partner
network builds confidence that the improvement in the business shown in the
first half can continue into the second half.

 

Some Asian territories disappointingly have yet to recover to the levels of
business we have experienced previously, however, with the wider demonstration
and introduction of the higher value ThreatScan®-AS1 product going well, we
are anticipating trading in line with market expectations for the year.

 

 

Vince Deery

Chief Executive Office

26 April 2023

 

 

Consolidated income statement

For the six months ended 31 March 2023

 

                                Note  Six months      Six months      Year ended

                                      ended           ended           30 September

                                      31 March 2023   31 March 2022    2022

                                      (Unaudited)     (Unaudited)

                                      £'000           £'000           (Audited)

                                                                      £'000

 Revenue                              1,459           790             2,002
 Cost of sales                        (752)           (383)           (924)
 Gross profit                         707             407             1,078
 Operating expenses                   (688)           (749)           (1,421)
 Operating profit/(loss)              19              (342)           (343)
 Finance income                       2               -               -
 Interest payable                     (5)             (3)             (6)
 Profit/(loss) before taxation        16              (345)           (349)
 Taxation                             -               -               78
 Profit/(loss) for the period         16              (345)           (271)

 

                                       Pence  Pence   Pence
 Earnings per share
 Basic profit/(loss) per share     3   0.01   (0.25)  (0.20)
 Diluted profit/(loss) per share       0.01   (0.25)  (0.20)

 

 

Consolidated statement of changes in equity

For the six months ended 31 March 2023

 

                                                    Note  Six months      Six months      Year ended

                                                          ended           ended           30 September

                                                          31 March 2023   31 March 2022    2022

                                                          (Unaudited)     (Unaudited)     (Audited)

                                                          £'000           £'000           £'000
 Opening equity shareholders' funds                       1,388           1,649           1,649
 Shares issued                                            -               10              10
 Profit/(loss) attributable to equity shareholders        16              (345)           (271)
 Closing equity shareholders' funds                       1,404           1,314           1,388

 

 

Consolidated statement of financial position

As at 31 March 2023

 

                                 As at           As at           As at

                                 31 March 2023   31 March 2022   30 September

                                 (Unaudited)     (Unaudited)      2022

                                 £'000           £'000           (Audited)

                                                                 £'000
 Non-current assets
 Intangible and tangible assets  514             425             464
                                 514             425             464
 Current assets
 Inventories                     569             581             629
 Trade and other receivables     440             591             638
 Cash and cash equivalents       1,003           777             690
                                 2,012           1,949           1,957
 Total assets                    2,526           2,374           2,421
 Current liabilities
 Trade and other payables        981             874             869
 Non-current liabilities         141             186             164
 Total liabilities               1,122           1,060           1,033
 Net assets                      1,404           1,314           1,388

 Equity
 Share capital                   1,368           1,368           1,368
 Share premium account           8,333           8,333           8,333
 Retained earnings               (8,297)         (8,387)         (8,313)
 Equity shareholders' funds      1,404           1,314           1,388

 

 

Consolidated cash flow statement

For the six months ended 31 March 2023

 

                                                         Six months      Six months ended 31 March 2022 (Unaudited) £'000   Year ended

                                                         ended                                                              30 September

                                                         31 March 2023                                                       2022

                                                         (Unaudited)                                                        (Audited)

                                                         £'000                                                              £'000
 Cash flows from operating activities
 Operating profit/(loss)                                 19              (342)                                              (343)
 Adjustments for:
 Depreciation                                            8               7                                                  6
 Amortisation of intangibles                             22              12                                                 29
 Amortisation of right of use asset                      21              20                                                 40
 Impairment of inventories                               (14)            5                                                  (11)
 Increase/(decrease) in provision for warranty           3               (13)                                               (7)
 Decrease/(increase) in inventories                      74              (196)                                              (224)
 Decrease in trade and other receivables                 172             148                                                132
 Increase/(decrease) in trade and other payables         105             64                                                 41
 Net cash generated from/(used in) operating activities  410             (295)                                              (337)
 Corporation tax recovered                               -               (5)                                                48
 Net cash inflow/(outflow) from operating activities     410             (300)                                              (289)

 Cash flows from investing activities
 Interest received                                       2               -                                                  -
 Purchase of tangible assets                             -               -                                                  (2)
 Purchase of intangible assets                           (80)            (103)                                              (177)
 Net cash used in investing activities                   (78)            (103)                                              (179)

 Cash flows from financing activities
 Share issue                                             -               10                                                 10
 Lease payments                                          (19)            (16)                                               (38)
 Net cash used in financing activities                   (19)            (6)                                                (28)

 Net increase/(decrease) in cash and cash equivalents    313             (409)                                              (496)
 Cash and cash equivalents at beginning of period        690             1,186                                              1,186
 Cash and cash equivalents at end of period              1,003           777                                                690

 

Notes to the unaudited interim financial statements

For the six months ended 31 March 2023

 

1 Basis of preparation

The interim financial statements, which are unaudited, have been prepared on
the basis of the accounting policies expected to apply for the financial year
to 30 September 2023 and in accordance with recognition and measurement
principles of International Financial Reporting Standards ('IFRSs') as adopted
by the United Kingdom. The accounting policies applied in the preparation of
these interim financial statements are consistent with those used in the
financial statements for the year ended 30 September 2022.

 

The interim financial statements do not include all of the information
required for full annual financial statements and do not comply with all the
disclosures in IAS 34 'Interim financial reporting'. Accordingly, whilst the
interim statements have been prepared in accordance with IFRSs, they cannot be
construed as being in full compliance with IFRSs.

 

The financial information for the year ended 30 September 2022 does not
constitute the full statutory accounts for that period. The annual report and
financial statements for the year ended 30 September 2022 have been filed with
the Registrar of Companies. The independent auditor's report on the report and
financial statements for the year ended 30 September 2022 was unqualified, did
not draw attention to any matters by way of emphasis, and did not contain a
statement under Section 498(2) or 498(3) of the Companies Act 2006.

 

2 Going concern

The interim financial information has been prepared on a going concern basis,
which assumes that the Company will have adequate resources to continue in
operational existence for the foreseeable future.

 

3 Earnings per share ('EPS')

Basic earnings per ordinary share is based on the profit on ordinary
activities before taxation of £16k (H1 2022 loss of £345k) and on
136,854,577 ordinary shares in issue throughout the period.

 

Diluted profit per share is calculated by adjusting the weighted average
number of ordinary shares in issue on the assumption of conversion of dilutive
potential ordinary shares, based on the share price at the end of the
period.  The Company's dilutive potential ordinary shares are shares issued
under the Company's Enterprise Management Incentive ('EMI') scheme and options
issued under the Company's Unapproved scheme.

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  IR FLFSESIIEFIV