Indigovision Share Discussion Threads

[exotic] 17/5/2018 07:19

17 May 2018

IndigoVision Group plc ("IndigoVision" or the "Group")

AGM Trading Update

At the Annual General Meeting to be held at 11am today, the Board will update shareholders on trading as follows:

"IndigoVision reports that, in the four months to 28 April 2018, sales have shown double digit growth over the prior year with a corresponding reduction in losses, in line with expectations. As in previous years, sales are expected to be weighted towards the second half of the year and the nature of our business is that the precise timing of our orders is difficult to predict. Nevertheless, the current indicators support the Board's target to at least break even in the current year.

In line with the Company's innovative product roadmap, IndigoVision launched a number of new products at the recent ISC West trade show in April 2018. Following the launch of its award winning CyberVigilant product last year, IndigoVision's patent pending technology can now be deployed within much of the Company's range of cameras, providing a cost effective tool for monitoring cyber attacks at the edge of a customer's video surveillance network. The Company also launched the Integra all-in-one device, combining video storage and its Control Center video management software in a single piece of hardware. The Integra device is expected to drive new revenue from the SME market in the latter part of the year".

[balcony] 17/5/2018 07:16

Maybe a good entry point.

[dozey3] 25/4/2018 13:32

Two years ago I ditched my holding for 167 having given up on them. Today out of the blue an AR for 2017 arrived, so had another look. Shows just what a crock it has become. Don’t have much luck with Scottish-based companies, and guess the new tax regime won’t help. Not tempted.

[cliffpeat] 11/4/2018 08:29

An interesting tweet this morning (@IndigoVision).

It looks as if IND may be re-thinking or testing their target market sectors.

The tweet claims that "#Integra™: Control Room in a Box" is perfect for "small to medium enterprise sites such as #Retail, #Education, #Banking and #Hospitality".

I hope that they are using The Business Model Canvas or similarly structured discipline to identify and test, refine and align their value propositions to find and confirm the most viable potential customer sectors.

However - the web site is still appalling and needs a professional overhaul in my opinion. It probably reflects the lack of a marketing led strategy.

A competent internal or outsourced marketing director and team is still (and urgently) required to support the technical and sales operations.

If CJohn's comments at #3944 are a sound summary of IND's commercial challenge - and if they cannot carve a profitable niche in the market - it seems to me that positioning the company for a sale might be the best strategy.

How could they achieve a premium business sale value? One way might be to slash costs and trim the product range to ensure a profitable year or two.

(I wonder whether part of such a plan might be to spin off the technical product development team as a separate business.)

Just musing and hoping.

DYOR

[cjohn] 08/3/2018 15:11

I've been happy to take modest profits here with the price around 130p.

It still looks attractive on asset grounds, given that the price is below net current assets.

But the business is a poor one economically: a small multi-national with all the high costs of maintaining a presence in many different markets, plus facing fierce local competition in each one, not to mention Chinese companies competing on price.

Their cutting-edge technology is simply not necessary for nearly all their potential client firms; the cheaper Chinese manufacturers' product is pefectly adequate.

[arthur_lame_stocks] 01/3/2018 18:39

I'm surprised the price hasn't fallen on today's pretty awful results. I can't think of a good reason to buy these except maybe the balance sheet but that is slowly disappearing too along with turnover and margins.

[michaelmouse] 01/3/2018 07:48

Wrote this article back in 2013:-



Sadly the results this morning are awful. Now loss making and the dividend has been cut. Targeting break even in 2018. Too little too late??

NAV is ok against market cap, but cash diminished quickly last year and I'd worry that 2018 could see further cash burn?

I wish them well but certainly not tempted to buy back in now, if ever. Feels like they missed their opportunity in mid-2000's.

[she-ra] 05/1/2018 14:12

Until the next profit warning.

[iain123] 05/1/2018 13:51

still selling:

hxxp://www.reliablesecurity.com/soboba-casino-project-awarded-rssd/

[spooky] 05/1/2018 13:39

Looks as though everyone that wanted out is out.

[hugepants] 27/12/2017 09:31

Is H2 trading likely to be around break-even at the operating level?
I make it net working capital of 153p, and tangible NAV of 183p, at end June. However cash is down to only $2.5M (24p per share) as of the November trading update

[dangersimpson2] 30/11/2017 12:36

CliffPeat,

Agreed but I think that is why no takeover has happened - any interested parties will have spoken to New Pistoia & Sorbus and likely be met with a £3+ price tag.

An approach to Grossart while he was chairman would be an approach to the company. Now he has retired he could be sounded out privately but remember he bought at £2.60 only 6 months ago.

A successful takeover would be great since it would likely be at a price 2-3x the current market price it is just highly unlikely given the level that the largest holders would want to support it.

[cjohn] 30/11/2017 10:06

I've bought a modest holding here.

In my opinion, economically, the business is a poor one, for reasons I've already outlined. But on a positive front, management has been poor too, so there's much room for improvement.

That having been said, I'm buying becasue of the discount to current and tangible assets which is over-done.

[spooky] 30/11/2017 09:59

If it doesn't get bought out down here, something is seriously wrong.

[cliffpeat] 30/11/2017 09:26

dangersimpson2

RNS today: SVS Church House Deep Value Investments Fund have added and now hold more than 3% of IND.

Pistoia, Sorbus/Farmiloe, Grossart and Church House now hold over 50% between them - I reckon this makes it easier for potential buyers to engage informally to test the water regarding a takeover and offer price range required to achieve these key investors' objectives.

Do you agree?

[dangersimpson2] 29/11/2017 11:56

It would make a lot of sense but then it would have made sense at pretty much any point during the last couple of years and it hasn't happened.

The sticking point I suspect is the level at which New Pistoia Income & Sorbus/Richard Farmiloe are willing to accept given they can block any offer.

Farmiloe was certainly willing to sell around £2.80 level in June but we are a long way from there. Sorbus (run by Farmiloe) were buying at £1.80 in March. So I think they would not accept any offer sub £2.

New Pistoia last bought at the £1.50 level but in the past they have bought above £3.50 and their average has to be north of £2.

So realistically I don't think an offer sub £2.50 would be successful and that sort of premium would be hard for a competitor to stump up even if they could partially fund it with IND's own NCA.

[cliffpeat] 29/11/2017 11:44

Prop_Joe Post 3929

I agree that it looks like one option and presumably depends on the attitude of New Pistoia Income Ltd which owns just over 30% of the shares according to the website.

Pistoia sold out their holding in Hornby this year.

Can't quickly find any information about them though HSBC Switzerland acted as their nominees in a transaction some years ago.

In terms of value of IND, I suspect there is a lot of sales and admin cost that could be eliminated (starting with Board salaries:) and there may well be value in under-exploited technology.

The 2016 accounts showed a gross profit of $23m. Assuming an acquirer could reduce other costs by 40% (mainly on sales and admin) they might compute an underlying addition to their profits of around $10m - less any one-off re-organisation cost.

Two scenarios:

1. A trade sale: If an acquirer pays $30m (say 3 x profit contribution) - say £22m for IND that comes to approaching £3 a share (7.5m shares)

A lot of assumptions and more knowledgeable holders may make better guesses.

2. Pistoia bid for the 70% they don't own at (say) £2 a share and prepare for a sale in a year or two at £3+

I bought a few more hoping for a take over or recovery in the next 6 months.

Just an opinion and as ever DYOR.

[iain123] 29/11/2017 11:07

Breaking the USA market is the key but it something IND have been trying to do unsuccessfully for years and years and years. Other markets seem to be doing OK which maybe implies the issue is local (marketing or sales?) Camera sales are booming. What was it, 10% growth last year and 25% the year before? If it hadn’t been for the collapse in camera prices driven by the Chinese our ‘too nice’ guy CEO would still have a job.

Maybe it’s the uncertainty over camera prices that have put predators off? You’d think as the pound is low would have attracted bids by now....if one was going to appear.

[spooky] 29/11/2017 09:47

I've thought that for a while, still waiting.........

[prop_joe] 29/11/2017 09:45

I wonder if a larger competitor will buy IND to drop their products and gross margin into their existing overhead structure.

With IND trading below net asset value I would have thought this could be done at a reasonable premium to the current share price while still generating an attractive low risk return to the acquirer?

[cockerhoop] 28/11/2017 12:34

Gross Margins

2012 59.0
2013 56.7
2014 57.9
2015 51.4
2016 50.9
2017H1 51.1

[cjohn] 28/11/2017 12:10

Hi Dangersimpson2,


Good reply. Thanks.


Their high cost business model means they have to sustain high gross margins - higher, in fact. But those gross margins will continue to attract in further competition. so operating margins will remain under pressure.

I don't belive those gross margins are sustainable- And I think they were higher in the past from memory.

[dangersimpson2] 28/11/2017 11:57

Although I have a certain sympathy for that view I think there is one flaw in that argument - the stable 50%+ Gross Margins.

That seems to suggest that they do have a sustainable competitive advantage in their products and the issue is in generating sales growth to capitilise on those advantages. It could be that there just isn't the market there for their products or it could be that their salesmanship has been poor. The recent board changes seem to indicate the latter but maybe they are misguided.

Being partially commoditised isn't necessarily an impediment to a reasonable rating - there are plenty of companies in areas like IoT & LED lighting that are mostly commoditised but manage to generate growth and are given pretty high ratings by the market. And all of these have much lower GM's than 50%.

There is no guarantee that IND will ever generate the sales growth but priced at a discount to NCAV they are priced for a slow decline and a trade sale of technology & assets to a competitor. If your belief is that this scenario is a certainty then there is no way you would hold IND for mediocre returns. If however there is even a small chance that they can generate sales growth in the medium term the probability weighted value of the company would be significantly above the current price. It feels very much like a heads I win tails I don't lose much type of investment at the current price.

[cjohn] 28/11/2017 11:35

They are a tiny muti-national with all the structural disadvantages that implies.

They have large costs from their numerous offices and countries of operations. And in each market, they face local and Chinese competitors.

The cheaper manufacturers offer perfectly adequate product - better than the top-of-the-line product of a few years ago. The vast mamority of companies do not need top-of-the-line, bang-up-to-date security products. This is a commoditised business where competition is based on cost.

This share is now approaching bargain territory. Its current value makes sense on economic grounds;. .

[she-ra] 27/11/2017 08:10

The worry is the money will eventually run out. Maybe they are wrong to get rid of the bean counter.