SHARES in CCTV provider IndigoVision have tumbled after it fell to a loss in the first half of this year as a result of weaker performance in Asia and Latin America.
The AIM-listed company reported revenue of $22.6 million in the six months to June 30, down 29 per cent from the $31.9m posted in the comparable period of 2014.
That pushed it to a pre-tax loss of almost $1.3m compared to a profit of $1.7m in the prior year. The company said around $230,000 of the loss was a result of currency fluctuation.
The Midlothian company, based near Penicuik, said Asia Pacific saw the greatest sales dip partly as it had previously reported a record performance but also amid weakness in commodity markets which is causing businesses to look at ways to cut spending.
In addition there was “significant” decline in Latin America as oil and gas companies in Brazil cut spending while IndigoVision also cited timings of its roll-out of CCTV in Colombian cities where it already supplies around 250 places.
Marcus Kneen, chief executive, said: “The parts of our business which were weaker were in the commodity driven economies – Brazil, Australia and Malaysia.”
The UK market was a bright spot with sales up 22 per cent on the back of police and city projects.
That included the start of a project upgrading video facilities in custody suites for the London Metropolitan Police and an extension to an existing deal covering the Rio de Janeiro metro system in Brazil.
Among the other contracts started in the first half of the year was the first stage of a roll-out to branches of an Egyptian bank.
Mr Kneen said: “We won a large project and hoped it would all go in the first half but that wasn’t possible. We got about one third so the rest is going in the second half. We have done 15 branches so far and will do a lot more.”
There was also a win for a casino in California in the United States. Mr Kneen said: “We are getting a growing name in the sector and have a good team so I think that will continue to build.”
There was also an extension to an existing deal covering the Rio de Janeiro metro system in Brazil.
Other industries IndigoVision won contracts in were petrochemical, rail, mining, telecoms, industrial, retail and residential sectors.
Mr Kneen confirmed the company had cut overheads in the first half of the year as a result of the reduction in activity.
Around 10 staff had left the business in the first part of the year while its Latin America division was also restructured.
Mr Kneen said IndigoVision had seen improvements steadily since the action it took in January and was now trading profitably.
He said: “We had a poor start and we had to realise it was a poor start and then do something about it. After we took the actions the results came through.
It is also why in the second half we think we will return to profit and are expecting the profits to be bigger than the loss we had in the first half.
“We have a good pipeline of large projects and a good book of orders already.”
IndigoVision decided not to pay an interim dividend but said it is hopeful of making a full-year payment.
The company, where Hamish Grossart is chairman, said it continued to invest in research and development with products such as a body worn video camera and a lower cost high definition camera range launched in the period.
Mr Kneen confirmed an oil company and a police force in the Middle East have already bought that product while trials with other potential customers are ongoing.
He said: “I think it is a product which could work for any public [facing] employee. People who are subject to verbal abuse which they shouldn’t have to tolerate.”
Shares in Indigovision fell xxxp, or xxx per cent, to xxxxxp.
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