TIDMIGE
RNS Number : 4361J
Image Scan Holdings PLC
27 April 2022
Image Scan Holdings plc
Interim Report 2022
27/04/2022
IMAGE SCAN HOLDINGS PLC
("Image Scan" or the "Company")
(AIM: IGE)
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 2022. During
the first six months the overall level of trading was
disappointing, though some important new customers were acquired,
and a significant new product was launched.
Financial summary:
-- Order intake increased to GBP1,029k (H1 2021: GBP938k)
-- Revenue was GBP790k (H1 2021: GBP868k)
-- Gross profit margin of 52% (H1 2021: 55%)
-- Loss before taxation of GBP345k (H1 2021: loss of GBP201k)
-- Period end bank balance was GBP777k (H1 2021: GBP1.1m)
-- Period end orderbook of GBP721k (H1 2021: GBP702k)
Operational highlights:
-- New, highly integrated ThreatScan(R)-AS1 portable X-Ray system launched
-- New portable X-ray orders from UK police forces
-- First order from a US federal agency in the period
-- New global customer for industrial X-ray systems
-- All customer deadlines met despite global supply chain disruptions
As indicated in our trading update on 22 February 2022, while we
expect the overall financial year to be stronger in H2 2022, it is
unlikely H2 2022 will be sufficiently strong to enable the Company
to fully recover the H1 2022 loss. We therefore expect to trade in
line with market expectations for the year as a whole.
Bill Mawer, Chairman and Chief Executive Officer of Image Scan
commented: "The overall level of trading in our first half is
disappointing, an indication of the sluggish recovery of our
markets from the impact of the COVID-19 pandemic. We consider the
ThreatScan(R)-AS1 portable X-ray system to be our most significant
product launch for some years. This project has aimed to develop
the best performing portable X-ray system in the world and the
initial customer response has been very positive. We look for a
number of delayed government procurements for portable X-ray
systems to finally close and are working hard to ensure this
happens early in the second half. The slowdown in the automotive
market is impacting our industrial activity, though the acquisition
of a new customer in this space is a positive development."
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.
For further information on the Company, please visit:
www.ish.co.uk and for further information on its
products, please visit: www.3dx-ray.com
Enquiries:
Image Scan Holdings plc Tel: +44 (0) 1509 817
William Mawer, Executive Chairman 400
Sarah Atwell King, Finance Director and Company ir@ish.co.uk
Secretary
----------------------
W H Ireland - Nominated Adviser and Broker Tel: +44 (0) 207 220
Mike Coe/Sarah Mather (Corporate Finance) 1666
----------------------
Chairman'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 2022 ("H1
2022") increased by 10% to GBP1,029k (H1 2021: GBP938k) and
included the acquisition of some significant new customers for both
industrial and security systems. Revenues declined by 9% to GBP790k
(H1 2021: GBP868k). Gross margin on those revenues was at 52% (H1
2021: 55%), the reduction in part due to increased costs for
materials, components and shipping.
Operating expenses increased to GBP752k (H1 2021: GBP682k),
reflecting the loss of government COVID-19 support schemes and
higher expenditure on marketing and travel. The latter was driven
by the re-opening of travel routes and the return of security trade
shows, which provide an important showcase for the Company's
products. The overall effect of reduced sales and margin, coupled
with higher costs, led to a loss in H1 2022 of GBP345k (H1 2021:
loss of GBP201k).
Stock increased to GBP581k (H1 2021: GBP366k). Part of this
increases was driven by decisions to hold higher than normal
quantities of parts, in particular electronic components, as a
buffer against anticipated shortages and price increases. The
process of amortising appropriate research and development spend,
which began in FY 2021, led to an increase in non-current assets to
GBP425k (H1 2021: GBP360k).
The Company finished H1 2022 with an orderbook of GBP721k (H1
2021: GBP702k) and positive cash balance of GBP777k (H1 2021:
GBP1.1m).
Overview
As in the same period last year, the overall level of trading
was disappointing, with delays to several significant overseas
government procurements. However, our high-value ThreatScan(R)-LSC
portable X-ray system, which combines large format and compact
detector panels in a single package, is proving popular with UK
police forces. We now have three customers in this sector. We have
also received a portable X-Ray order from a US Federal agency and
found new customers for the Axis-CXi cabinet X-ray system.
An important milestone in H1 2022 was the market launch of the
new ThreatScan(R)-AS1 portable X-Ray system. This is the first time
the Company has used amorphous silicon detector technology, which
is the same technology used in the majority of medical X-ray
systems. The new system is highly integrated, combining generator,
detector panel, computer, touch-screen display, Wi-Fi unit and
power supplies in a single rugged case. A second tablet computer
adds further flexibility in the use of the system. In what has
become a crowded market, this bold move by the Company aims to
provide the best performing portable X-ray system in the world.
Initial response from early demonstrations in the Middle East and
the UK, has been positive. The system will be demonstrated at
security trade shows in Singapore and North America in the next few
months.
Development of the new Axis conveyor X-ray systems was delayed
somewhat due to the focus on the ThreatScan(R)-AS1 which is now
complete, and the system will be offered to customers in the second
half of FY2022. Following signature of a distribution agreement, we
added the Serstech range of portable chemical analysers to our
product range and are now presenting these to our global customers
and partners. We are also offering other third-party products to
customer and distribution partners through our website.
In the industrial market, with the automotive industry heavily
impacted by COVID-19, it is encouraging that the business was both
able to gain a new customer and received follow-on orders from
existing customers. All our industrial service contracts were
maintained through the continuing pandemic, despite the
difficulties arising from travel restrictions.
Global supply chains have been considerably disrupted by
multiple factors and this is reflected in price inflation and
shortages across multiple commodities and components. Transport
costs have also increased dramatically. The Company has worked hard
to isolate itself as far as possible from the effects of these
trends. However, we have had to accept higher prices for scarce
electronics components and have taken decisions to protect
production schedules by holding higher stock levels of certain
items than would be normal to ensure customer deliveries continue
to be made on time.
Outlook
The pandemic continues to impact global trade and travel, and
only recently has attendance at security trade shows and
demonstrations to overseas customers restarted. This has been a far
from ideal environment in which to launch our ambitious new
portable X-ray system but, with additional demonstration units in
production, promotion of this important system is a key focus for
H2 2022. We look for a number of delayed government procurements
for portable X-ray systems to finally close and are working hard to
ensure this happens sufficiently quickly to impact second half
sales for FY 2022.
The automotive sector will be slow to recover from COVID-19 and
our business in this sector is likely to be impacted while our
customers adjust their manufacturing footprint to reflect the
magnitude and distribution of global demand for catalytic
converters. This makes our success in winning a new customer even
more important, and it is to be hoped that their trial of the first
machine leads to the same type of global deployment carried out by
our other industrial customers. We have now successfully imaged
components for an automotive fuel cell manufacturer and will
continue to explore opportunities in this area.
As indicated in our trading update on 22 February 2022, while we
expect the overall financial year to be stronger in H2 2022, it is
unlikely H2 2022 will be sufficiently strong to enable the Company
to fully recover the H1 2022 loss. We therefore expect to trade in
line with market expectations for the year as a whole.
Bill Mawer
Executive Chairman
27/04/2022
Consolidated income statement
For the six months ended 31 March 2022
Six months Six months Year ended
ended ended 30 September
31 March 31 March
2022 2021 2021
(Unaudited) (Unaudited) (Audited)
Note GBP'000 GBP'000 GBP'000
------------
Revenue 790 868 2,873
------------ ------------ -------------
Cost of sales (383) (387) (1,359)
------------ ------------ -------------
Gross profit 407 481 1,514
------------ ------------ -------------
Operating expenses (752) (682) (1,325)
------------ ------------ -------------
Operating (loss)/profit (345) (201) 189
------------ ------------ -------------
Finance income - - -
----- ------------ ------------ -------------
Loss/(profit) before taxation (345) (201) 189
------------ ------------ -------------
Taxation - - 51
------------ ------------ -------------
Loss/(profit) for the period (345) (201) 240
------------ ------------ -------------
Pence Pence Pence
Earnings per share
---- ------ ------ -----
Basic profit per share [3] (0.25) (0.15) 0.18
---- ------ ------ -----
Diluted profit per share (0.25) (0.15) 0.17
------ ------ -----
Consolidated statement of changes in equity
For the six months ended 31 March 2022
Six months Six months Year ended
ended ended 30 September
31 March 31 March
2022 2021 2021
(Unaudited) (Unaudited) (Audited)
Note GBP'000 GBP'000 GBP'000
------------
Opening equity shareholders' funds 1,649 1,409 1,409
------------ ------------ -------------
Shares Issued 10 - -
------------ ------------ -------------
(Loss)/profit attributable to equity
shareholders (345) (201) 240
------------ ------------ -------------
Closing equity shareholders' funds 1,314 1,208 1,649
------------ ------------ -------------
Consolidated statement of financial position
As at 31 March 2022
As at As at As at
31 March 31 March
2022 2021 30 September
(Unaudited) (Unaudited) 2021
GBP'000 GBP'000 (Audited)
GBP'000
Non-current assets
------------ ------------ -------------
Intangible and tangible assets 425 61 360
------------ ------------ -------------
425 61 360
------------ ------------ -------------
Current assets
------------ ------------ -------------
Inventories 581 366 393
------------ ------------ -------------
Trade and other receivables 591 404 741
------------ ------------ -------------
Cash and cash equivalents 777 1,048 1,186
------------ ------------ -------------
1,949 1,818 2,320
------------ ------------ -------------
Total assets 2,374 1,879 2,680
------------ ------------ -------------
Current liabilities
------------ ------------ -------------
Trade and other payables 874 671 836
------------ ------------ -------------
Non-current liabilities 186 - 195
------------ ------------ -------------
Total liabilities 1,060 671 1,031
------------ ------------ -------------
Net assets 1,314 1,208 1,649
------------ ------------ -------------
Equity
------------ ------------ -------------
Share capital 1,368 1,363 1,363
------------ ------------ -------------
Share premium account 8,333 8,328 8,328
------------ ------------ -------------
Retained earnings (8,387) (8,483) (8,042
------------ ------------ -------------
Equity shareholders' funds 1,314 1,208 1,649
------------ ------------ -------------
Consolidated cash flow statement
For the six months ended 31 March 2022
Six months Year ended
ended 30 September
31 March
2022 2021
(Unaudited) (Audited)
GBP'000 Six months
ended 31
March 2021
(Unaudited)
GBP'000 GBP'000
Cash flows from operating activities
------------ ------------ -------------
Operating (loss)/profit (345) (201) 189
------------ ------------ -------------
Adjustments for:
------------ ------------ -------------
Depreciation 7 10 8
------------ ------------ -------------
Amortisation of Intangibles 12 - 19
------------ ------------ -------------
Impairment of inventories 5 9 -
------------ ------------ -------------
Amortisation of right of use asset 23 21 43
------------ ------------ -------------
(Decrease)/increase in provision for
warranty (13) (9) 12
------------ ------------ -------------
(Increase)/decrease in inventories (196) 75 57
------------ ------------ -------------
Decrease/(increase) in trade and other
receivables 148 (90) (426)
------------ ------------ -------------
Increase/(decrease) in trade and other
payables 67 (98) 45
------------ ------------ -------------
Lease Interest (3) - 4
------------ ------------ -------------
Net cash used in operating activities (295) (283) (49)
------------ ------------ -------------
Corporation tax recovered (5) (1) 51
------------ ------------ -------------
Net cash outflow from operating activities (300) (284) 2
------------ ------------ -------------
Cash flows from investing activities
------------ ------------ -------------
Interest received - - -
------------ ------------ -------------
Purchase of intangible and tangible
assets (103) (7) (130)
------------ ------------ -------------
Net cash used in investing activities (103) (7) (130)
------------ ------------ -------------
Cash flows from financing activities
------------ ------------ -------------
Share Issue 10
------------ ------------ -------------
(Repayment)/proceeds from bank loan - (50) (50)
------------ ------------ -------------
Lease payments (16) (21) (46)
------------ ------------ -------------
Net cash used in financing activities (6) (71) (96)
------------ ------------ -------------
Net decrease in cash and cash equivalents (409) (362) (224)
------------ ------------ -------------
Cash and cash equivalents at beginning
of period 1,186 1,410 1,410
------------ ------------ -------------
Cash and cash equivalents at end of
period 777 1,048 1,186
------------ ------------ -------------
Notes to the unaudited interim financial statements
For the six months ended 31 March 2022
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 2022 and in accordance with
recognition and measurement principles of International Financial
Reporting Standards ('IFRSs') as endorsed by the European Union.
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 2021.
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 2021
does not constitute the full statutory accounts for that period.
The annual report and financial statements for the year ended 30
September 2021 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 2021 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 loss on
ordinary activities before taxation of GBP345k 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.
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IR QQLFLLZLZBBD
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April 27, 2022 02:00 ET (06:00 GMT)
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