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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Indigovision Group Plc | LSE:IND | London | Ordinary Share | GB0032654534 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 391.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMIND
RNS Number : 2955Y
IndigoVision Group PLC
02 March 2017
IndigoVision Group plc ("IndigoVision" or "The Group")
Final results for the year ended 31 December 2016
IndigoVision (AIM: IND.L), a leader in intelligent networked video security systems for government, critical infrastructure, transport, city monitoring and casinos, announces its results for the year ended 31 December 2016.
Financial Highlights
-- Revenues of $46.0m (2015: $47.1m) -- Underlying operating profit(1) $0.4m (2015 operating loss: $0.7m) -- Profit before tax $0.1m (2015: loss $0.7m) -- Net cash balance of $6.2m (2015: $2.8m) -- Adjusted earnings per share(2) 9.0 cents (2015: 0.0 cents) before deferred tax -- Diluted loss per share 37.3 cents (2015 loss per share: 6.5 cents) -- Proposed final dividend of 3.0 pence per share (2015: 2.5 pence per share)
Operating Highlights
-- Management action returned the business to operating profitability in 2016:
o New senior management and strengthened sales leadership in the Americas and EMEA
o Overheads before foreign exchange gains/losses reduced by 7% to $23.2m (2015: $25.0m)
-- Large project wins:
o Healthcare
o Education
o Banking
o Safe cities
o Casinos
-- Restructure of hardware design capability completed in January 2016 -- Successful launch of three-tiered Control Center software in November 2016
-- Sale volumes of software licenses, cameras and encoders all increased by over 25% year-on-year.
Marcus Kneen, Chief Executive, commented
"The results for 2016 were a good improvement on 2015, notwithstanding falling prices across the market as a whole. The tiered camera offering we introduced last year has been well received and we have now extended this concept to software, enabling IndigoVision's products to be competitive in all sectors of the market. We look forward to making further progress in 2017, with a strengthened team, broader product offering, and new market opportunities."
(1) Underlying operating profit represents operating profit of $0.06m prior to the exceptional bad debt provision of $0.30m
2 Adjusted earnings per share is based on the loss after tax of $2.79m prior to the exceptional bad debt provision of $0.30m and the deferred tax asset adjustment of $3.16m
Notes to editors
About IndigoVision
IndigoVision designs and manufactures high performance, video security systems for a wide range of users from large scale and complex security installations to small, eight camera systems. From video capture and transmission to analysis and storage, IndigoVision networked video security systems provide the best quality and most secure video evidence, using market leading compression technology to minimise network bandwidth usage and reduce storage costs.
Enquiries to:
IndigoVision Group +44 (0) 131 475 plc Marcus Kneen (CEO) 7200 Chris Lea (CFO) N+1 Singer, Nominated +44 (0) 131 603 Advisor Sandy Fraser 6873
Shareholder information
Our website can be accessed at www.indigovision.com and contains substantial information about our business. The website also carries copies of prior year accounts and stock exchange announcements.
Shareholder calendar
18 May 2017 Annual General Meeting 25 May 2017 Dividend paid
Chairman's Statement
During 2016, the Group continued to make progress and adjust to new market conditions. Performance improved as the year progressed - second half sales were 11% higher than the first half - and second half underlying operating profits were $0.63m, compared with an operating loss of $0.28m in the first half. Underlying operating profit in 2016 amounted to $0.36m, an improvement of $1.11m over the prior year.
Progress to date, and the strong cash position, has encouraged the board to recommend to shareholders an increased dividend and a final dividend of 3.0 pence per share is proposed, 20% higher than last year.
Financial results
Revenue for the year ended 31 December 2016 was $46.0m (2015: $47.1m). Sales volumes increased by over 25% but this was offset by lower unit prices.
Notwithstanding the reduction in unit selling prices, gross margins were broadly maintained, averaging 50.9% for 2016, compared with 51.4% the previous year. Overheads, before the exceptional bad debt provision of $0.3m, were 7% lower at $23.2m (2015: $25.0m) as savings previously made were maintained.
The group returned to operating profit in the second half of 2016 and, as expected, the second half performance exceeded first half losses. The underlying operating profit for 2016 amounted to $0.36m, a substantial improvement from losses of $0.74m in 2015.
In recent months, the Group has undertaken a review of its balance sheet and its internal controls. Following this review, and an assessment based on current information of the likely recoverability of certain receivables dating back to 2014, an additional bad debt provision of $0.30m has been recognised. As these amounts do not relate to recent trading results of the Group, they have been disclosed separately within administrative expenses and are added back in the calculation of underlying operating profit. Net of this increase in the bad debt provision, the operating profit for the year was $0.06m (2015: operating loss of $0.74m)
The group continues to benefit from research and development tax credits which resulted in a net current tax credit of $0.37m (2015: $0.75m).
The group has substantial historic UK tax losses, which amounted to $26.9m as at 31 December 2016. As intimated with the interim results, the group has re-assessed the likely rate of future utilisation of these losses over the medium term in the light of recent trading results, planned reductions in future UK corporation tax rates and the continuing availability of research and development tax credits. As a result, the carrying value of the Group's deferred tax asset has been reduced by $3.16m to $1.69m. This non-cash reduction has been charged to the profit and loss account in 2016.
Adjusted earnings per share (before the deferred tax asset adjustment) amounted to 9.0 cents (2015: 0.0 cents). The fully diluted loss per share was 37.3 cents (2015: 6.5 cents).
The net cash balance at 31 December 2016 was a healthy $6.20m (2015: $2.76m), with the increase primarily due to improved working capital management. The Group had borrowings of $0.05m at 31 December 2016 (2015: $nil), and has available a bank overdraft facility of $4.0m, which was not utilised during the year.
Sales and Markets
Sales volumes of software licenses, cameras and encoders all increased by between 26% and 28% year on year, with cameras benefitting from a broadening of the range and the introduction of a variety of products with differing price points.
Regionally, EMEA accounted for $22.5m or 49% of sales (2015: $19.4m, 41%). Within this, the Middle East region grew by 34%. The UK market performed well, in local currency terms, but the strengthening US dollar resulted in a 13% reduction in the dollar value of sterling local currency sales, and the strong dollar similarly impacted revenues across the EMEA region as a whole.
Sales in the combined Americas region declined 19% year on year, largely due to reduced activity in the oil driven economies of Latin America. The exceptions to this were the safe cities projects in Latin America, where the Group enjoys a strong market share, and the casino sector in North America. USA senior management has been changed and continues to be strengthened, with recruitment continuing in a number of US regional sales territories to ensure a fully distributed sales team.
Asia Pacific had a steady year, with sales increasing 3% to $5.2m (2015: $5.0m). The new sales team in Australia is rebuilding market share, with a strong focus on cities, universities and traffic systems.
Products
IndigoVision's product strategy remains the design and sale of a software-led complete end-to-end video security solution, inclusive of video management software, cameras, encoders, storage devices and integration to security and operational systems. There are few competitors that provide such a full end-to-end solution, and buyers value the system reliability inherent in the complete solution, as well as the ease of one-stop sourcing.
Three enhanced versions of Control Center 13, IndigoVision's video management software, were released in 2016. In November, the Group launched a three-tier version of Control Center 14, which is expected to open up segments of the market where IndigoVision has not operated historically. This broadening of the product offering is expected to create additional sales opportunities and to help to reduce the volatility which arises from the Group's exposure to individually large projects.
During 2016, the Group launched 45 new products, including 23 cameras and 11 network video recorders. Capital investment in environmental test chambers increased the hardware testing capacity by 50%, enabling the group to bring new products to market more quickly.
Board Changes
As reported at the half year, after nine years with the Group, the last four of which were as CFO, Holly McComb stepped down from the Board on 31 May 2016. The Board are grateful to Holly for her contribution. Holly's successor, Chris Lea, was appointed as a Director on 19 May 2016 and took up his role as CFO on 4 July 2016.
Dividends
In view of the return to operating profitability for the year as a whole, and the improved cash balances, the Board is recommending a dividend of 3.0 pence per share (2015: 2.5 pence per share). The dividend, if approved, will be paid on 25 May 2017 to shareholders on the register on 21 April 2017.
Current trading and outlook
The return to profitability in 2016 is very positive, as is the evidence that IndigoVision is adapting well to changed market conditions.
The Group continues to strengthen its software development team and aims to launch three further releases of its Control Centre software in 2017, offering increased features and functionality for the benefit of its customers.
The start of 2017 was quiet, but sales and orders strengthened markedly in February. The immediate outlook looks encouraging and the group continues to invest in strengthening the sales team in its key markets. The Board therefore currently expects that 2017 will see IndigoVision report further progress.
Hamish Grossart
Chairman
1 March 2017
Consolidated statement of comprehensive income
For the year ended 31 December 2016
Hot Features
Premium
2016 2015
$'000 $'000
--------------------------------------------- --- ---------- ---------
Revenue - 45,923 47,093
Cost of sales (22,558) (22,881)
-------------------------------------------------- ---------- ---------
Gross profit 23,365 24,212
Research and development expenses (3,358) (4,399)
Selling and distribution expenses (15,574) (15,834)
Administrative expenses - (4,605) (4,786)
Foreign exchange gain 231 64
-------------------------------------------------- ---------- ---------
Operating profit /(loss) 59 (743)
-------------------------------------------------- ---------- ---------
Analysed as:
Underlying operating profit/(loss) 359 (743)
Exceptional bad debt expense (300) -
--------------------------------------------- --- ---------- ---------
Financial expense - (10)
-------------------------------------------------- ---------- ---------
Profit/(loss) before tax 59 (753)
Income tax (charge)/credit (2,851) 269
-------------------------------------------------- ---------- ---------
Loss for the period attributable
to equity holders of the parent (2,792) (484)
-------------------------------------------------- ---------- ---------
Analysed as:
Underlying profit for the period
attributable to equity holders
of the parent 672 1
Exceptional bad debt expense (300) -
Deferred tax adjustment (3,164) (485)
-------------------------------------------------- ---------- ---------
Other comprehensive income
Foreign exchange translation
differences on foreign operations (510) (509)
-------------------------------------------------- ---------- ---------
Total comprehensive loss for
the year attributable to equity
holders of the parent (3,302) (993)
-------------------------------------------------- ---------- ---------
Basic loss per share (cents) (37.3) (6.5)
-------------------------------------------------- ---------- ---------
Diluted loss per share (cents) (37.3) (6.5)
-------------------------------------------------- ---------- ---------
Adjusted profit per share (cents) 9.0 0.0
-------------------------------------------------- ---------- ---------
Consolidated balance sheet
As at 31 December 2016
2016 2015
$'000 $'000
------------------------------------- --- ------- --------------
Non-current assets
Property, plant and equipment 1,236 1,443
Intangible assets 22 72
Deferred tax 1,687 4,852
------------------------------------------ ------- --------------
Total non-current assets 2,945 6,367
------------------------------------------ ------- --------------
Current assets
Inventories 8,072 9,494
Trade and other receivables 12,772 12,575
Cash and cash equivalents 6,203 2,763
------------------------------------------ ------- --------------
Total current assets 27,047 24,832
------------------------------------------ ------- --------------
Total assets 29,992 31,199
------------------------------------------ ------- --------------
Current liabilities
Trade and other payables 9,990 7,668
Provisions 138 137
------------------------------------------ ------- --------------
Total current liabilities 10,128 7,805
------------------------------------------ ------- --------------
Non-current liabilities
Provisions 45 45
Other non-current liabilities 33 3
------------------------------------------ ------- --------------
Total non-current liabilities 78 48
------------------------------------------ ------- --------------
Total liabilities 10,206 7,853
------------------------------------------ ------- --------------
Net assets 19,786 23,346
------------------------------------------ ------- --------------
Equity
Called up share capital 120 120
Share premium account 2,684 2,684
Other reserve 8,080 8,080
Translation reserve (341) 169
Profit and loss account 9,243 12,293
------------------------------------------ ------- --------------
Total equity attributable to equity
holders of the parent 19,786 23,346
------------------------------------------ ------- --------------
Group statement of changes in equity
For the year ended 31 December 2016
Share Share Other Translation Retained Total
capital premium reserve reserve earnings equity
------------------------------
Group $'000 $'000 $'000 $'000 $'000 $'000
------------------------------ --------- --------- --------- ------------ ---------- --------
Balance at 31 December
2014 119 2,666 8,080 678 13,371 24,914
Total comprehensive income
Loss for the year - - - - (484) (484)
Difference on translation - - - (509) - (509)
------------------------------ --------- --------- --------- ------------ ---------- --------
Total comprehensive income - - - (509) (484) (993)
------------------------------ --------- --------- --------- ------------ ---------- --------
Transactions with the
owners of the Company
Share options exercised
by employees 1 18 - - - 19
Equity-settled transactions,
including deferred tax
effect - - - - (21) (21)
Dividends paid to equity
holders - - - - (573) (573)
------------------------------ --------- --------- --------- ------------ ---------- --------
Total transactions with
the owners of the company 1 18 - - (594) (575)
------------------------------ --------- --------- --------- ------------ ---------- --------
Balance at 31 December
2015 120 2,684 8,080 169 12,293 23,346
Total comprehensive income
Loss for the year - - - - (2,792) (2,792)
Difference on translation - - - (510) - (510)
------------------------------ --------- --------- --------- ------------ ---------- --------
Total comprehensive income - - - (510) (2,792) (3,302)
------------------------------ --------- --------- --------- ------------ ---------- --------
Transactions with the
owners of the Company
Equity-settled transactions,
including deferred tax
effect - - - - 28 28
Dividends paid to equity
holders - - - - (286) (286)
------------------------------ --------- --------- --------- ------------ ---------- --------
Total transactions with
the owners of the Company - - - - (258) (258)
------------------------------ --------- --------- --------- ------------ ---------- --------
Balance at 31 December
2016 120 2,684 8,080 (341) 9,243 19,786 ------------------------------ --------- --------- --------- ------------ ---------- --------
Consolidated statement of cash flows
For the year ended 31 December 2016
2016 2015
$'000 $'000
Cash flows from operating activities
Loss for the year (2,792) (484)
Adjusted for:
Depreciation and amortisation 906 1,124
Financial expense - 10
Share based payment expense 38 9
Foreign exchange (231) 267
Loss/(gain) on disposal of fixed
assets 104 (25)
Income tax credit 1,435 (269)
Decrease in inventories 1,422 902
Decrease in trade and other
receivables 491 5,105
Increase/(decrease) in trade
and other payables 2,304 (5,010)
Increase in provisions 1 -
--------------------------------------- -------- -----------------------------
Cash generated from operations 3,678 1,629
Income taxes repaid 708 (15)
--------------------------------------- -------- -----------------------------
Net cash inflow from operating
activities 4,386 1,614
--------------------------------------- -------- -----------------------------
Cash flows from investing activities
Interest paid - (10)
Acquisition of property, plant
and equipment (663) (819)
Acquisition of intangible assets (41) (15)
Proceeds from the sale of fixed 4 -
assets
--------------------------------------- -------- -----------------------------
Net cash outflow from investing
activities (700) (844)
--------------------------------------- -------- -----------------------------
Cash flows from financing activities
Proceeds from the issue of share
capital - 19
Dividends paid (286) (573)
--------------------------------------- -------- -----------------------------
Net cash outflow from financing
activities (286) (554)
--------------------------------------- -------- -----------------------------
Net increase in cash and cash
equivalents 3,400 216
Cash and cash equivalents at
31 December 2,763 2,559
Effect of exchange rate fluctuations
on cash held 40 (12)
--------------------------------------- -------- -----------------------------
Cash and cash equivalents at
31 December 6,203 2,763
--------------------------------------- -------- -----------------------------
Notes to the accounts:
1. Principal activities
The principal activity of the Group continues to be the design, development, manufacture and sale of networked video security systems. Cameras, encoders, network video recorders and software are designed both internally and with technology partners and manufactured in Asia and Europe. The Group's end to end IP video security systems allow full motion video to be transmitted worldwide, in real time, with digital quality and security, over local or wide area networks, wireless links or the internet, using market leading compression technology to minimize usage of network bandwidth
2. Basis of preparation and accounting policies
The financial statements are presented in US Dollars, rounded to the nearest thousand. They are preared on a historical cost basis.
The accounting policies used in preparing the financial statements are set out in note 1 of the IndigoVision Group plc Annual Report 2016.
3. Annual accounts
The financial information set out in this announcement does not constitute the Group's statutory accounts for the year ended 31 December 2016 but is derived from those accounts. The statutory accounts of IndigoVision Group plc for 2015 have been delivered to the Registrar of Companies and those for 2016 will be delivered to the Registrar of Companies following the Company's annual general meeting. The auditors have reported on those accounts; their reports were unqualified and did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.
4. Segement reporting
Following a review of the current board reporting which is used in decision-making, in assessing performance and capital allocation, the format of the segment note (including comparatives) has been changed to reflect the current reporting position. The Board is seen as the Chief Operating Decision Maker and has determined that the segment reporting format is geographical based on the Group's management and internal reporting structure.
The Board reviews the Group's internal reporting in order to assess performance and to allocate resources. The Board assesses the performance of the following geographical sales regions: primarily Europe, the Middle East and Africa; the Americas and Asia Pacific and has therefore determined these as the operating segments.
The Board considers the performance of the operating segments based on regional sales and company-wide gross margin before warranty costs. The operating segments derive their revenue from the sale of software, hardware products and services. Capital is not allocated to geographical regions and substantially all of the Group's income and expenditure is incurred by its UK trading subsidiary, IndigoVision Limited. The information currently provided to the Board is measured in a manner which is consistent with the financial statements.
Segment information is also presented in the respect of the Group's products and services which have different economic characteristics, including the sale of end-to-end video security solutions, consultancy services and multi-year software upgrade plans.
Operating segments
Regional Sales 2016 2015
$'000 $'000
-------------------------------- ------- --------------------
Europe, Middle East and Africa 22,491 19,396
Americas 18,269 22,671
Asia Pacific 5,163 5,026
-------------------------------- ------- --------------------
45,923 47,093
-------------------------------- ------- --------------------
All sales are to third parties and all segment results are from continuing activities. The gross margin earned in each region is comparable and the majority of overheads are incurred centrally and are therefore unallocated to each region.
Revenues derived from external customers based in the UK were $6,675,000 (2015: $7,556,000)
Analysis of revenue
2016 2015
$'000 $'000
---------------------------- ------- -------
Revenues from:
Products/solutions 43,107 44,432
Support services 220 207
Software Upgrade Contracts 2,596 2,454
---------------------------- ------- -------
45,923 47,093
---------------------------- ------- -------
5. Operating profit/(loss)
2016 2015
$'000 $'000
---------------------- --------------------- --- ------- ----------------------
Operating profit/(loss) is stated
after charging:
Depreciation and amortisation 906 1,124
Exceptional bad debt expense 300 -
Net write down of inventories
to realisable value 499 598
Allowance for doubtful trade
receivables 22 437
Research & development expenditure 3,358 4,399
Share based payment expense 38 9
Redundancy costs 122 -
Fees payable to the Group's
auditor:
Audit of these financial statements
(Group and Company) 15 18
Audit of subsidiary companies 29 34
All other services - -
--------------------------------------------- -------- ------- ----------------------
The exceptional bad debt charge relates an assessment of the likely recoverability of certain receivables dating back to 2014 following a review.
6. Income Taxes
2016 2015
$'000 $'000
-------------------------------------- --- ------- ---------------
Current tax (credit)/expense
UK tax (373) (526)
UK tax - prior year adjustment 40 (246)
Overseas tax 20 13
Overseas tax - prior year adjustment - 5
------------------------------------------- ------- ---------------
(313) (754)
------------------------------------------ ------- ---------------
Deferred tax expense/(credit)
Origination and reversal of
temporary differences 2,361 45
Reduction in tax rates 308 157
Adjustments relating to prior
year trading losses 495 283
------------------------------------------- -------
3,164 485
------------------------------------------ -------
Total income tax charge/(credit)
in income statement 2,851 (269)
------------------------------------------- ------- ---------------
The whole of the deferred tax charge for the year of $3.16m has been designated as an adjusting item.
The Group trades principally through its UK subsidiary, IndigoVision Limited. The current tax credit relates to research and development expenditure at 14.5%
The deferred tax expense of $2.36m arises principally in relation to the reassessment of the recoverability of UK tax losses of $26.9m as at 31 December 2016. The extent to which a deferred tax asset is recognised is dependent on estimates of future trading over an extended period of time and the extent to which research and development costs may be eligible for research and development tax credits in the future. The Group anticipates increasing its investment in research and development proportional to sales growth.
Based on the Group's trading assumptions the deferred tax asset will begin being realised from 2019 onwards, when the Group starts to generate taxable profits and will be realised over a period of five years. As a result, the deferred tax asset has been valued based upon a future UK Corporation tax rate of 17%.
There are a number of forecast scenarios showing potential recovery of the deferred tax asset over periods between three and 12 years, dependent upon a number of factors such as forecast sales growth and profitability, together with the level of research and development expenditure and the future UK tax regime.
The deferred tax asset is denominated in sterling and as such is subject to exchange rate fluctuations. Such exchange rate movements are dealt with as part of the deferred tax expense for the year.
7. Earnings per share
2016 2015
$'000 $'000
--------------------------------------------- --- -------- -------
Earnings per share
Loss for the year attributable
to equity shareholders (basic
and diluted) (2,792) (484)
Exceptional bad debt expense (300) -
Deferred tax adjustment 3,164 485
--------------------------------------------- -------- -------- -------
Adjusted profit for the year
attributable to equity shareholders 672 1
--------------------------------------------- -------- -------- -------
Cents Cents
--------------------------------------------- --- -------- -------
Basic earnings per share (37.3) (6.5)
Diluted earnings per share (37.3) (6.5)
Adjusted earnings per share 9.0 0.0
--------------------------------------------- -------- -------- -------
The weighted average number of ordinary shares used in the calculation of basic and diluted earnings per share for each period were calculated as follows:
2016 2015
Number Number
of shares of shares
--------------------------------------- ----------- -------------
Issued ordinary shares at start of
year 7,610,756 7,604,756
Effect of weighted average of shares
issued during the year from exercise
of employee share options - 4,451
Effect of purchase of own shares (134,238) (134,238)
--------------------------------------- ----------- -------------
Weighted average number of ordinary
shares for the year - for earnings
per share 7,476,518 7,474,969
Effect of share options in issue - -
--------------------------------------- ----------- -------------
The calculation of adjusted earnings per share for the year ended 31 December 2016 was based on the loss attributable to equity shareholders of $2,792,000 (2015 loss: $484,000), to which the deferred tax expense of $3,164,000 (2015: $485,000) and the exceptional bad debt expense of $300,000 (2015: $nil) have been added back and a weighted average number of ordinary shares during the year ending 31 December 2016 of 7,476,518 (2015: 7,474,969), calculated as shown above.
Adjusted earnings per share has been presented as the movements related to deferred tax are dependent on a series of assumptions with associated inherent uncertainties which introduce substantial volatility in the deferred tax income/expense from year to year. The Board believes an adjusted earnings per share measure is required to reflect its view of the underlying performance and to align more closely with management targets and rewards.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR UAVORBRAORUR
(END) Dow Jones Newswires
March 02, 2017 02:01 ET (07:01 GMT)
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