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.
IMAGE
SCAN HOLDINGS PLC
("Image
Scan" or the "Company")
Interim
Results
Image Scan (AIM: IGE),
the specialist supplier of X-ray screening
systems for security and industrial inspection, is delighted to
announces its interim results for the six months ended 31 March
2024 ("H1 2024" or the "Period").
Financial summary:
· Order
intake £1,136k (H1 2023: £1,858k)
· Revenue was at £1,061k (H1 2023: £1,459k)
· Gross
profit margin of 54% (H1 2023: 48%)
· Loss
before taxation of £119k (H1 2023: profit before tax of
£16k)
· Period
end bank balance was £759k (H1 2023: £1,003k)
· Period
end orderbook of £729k (H1 2023: £1,116k)
Operational highlights:
· Launch
of ThreatScan®-AS2 product to extend the portable product
family
· Customer deliveries and satisfaction maintained by effective
management of supply chain challenges
· Research and development effort focussed on developing high
precision portable x-ray products
· New
ThreatScan®-AS1 product contract wins in Europe, Middle East, Asia
and Indian Sub-continent
· Opportunity pipeline at a significantly higher level than at
the same period in FY23
Post Period-end highlights
· Have
secured an initial order of c£300k from a partner to supply them
with ThreatScan®-AS1 portable X-ray systems pursuant to a framework
work contract the partner has won. Further comparable orders are
expected over the period of the partner's two-year framework
contract.
Vince Deery, Chief Executive Officer of Image
Scan commented:
"We are very pleased with the reception to our
new products especially the ThreatScan®-AS1 which has become
readily accepted and adopted by the marketplace and orders are
being received from across the globe. We are also seeing the number
of opportunities for this product increasing as the participation
in large volume government tenders is now more accessible to which
the recently announced order is testament.
"The recent launch of the ThreatScan®-AS2 also adds to the
positive response from the marketplace, and will provide even
greater opportunity for the partner network to offer a
comprehensive range of portable x-ray products.
"The H1 2024 performance is a reduction over the same period
last year, however, the pipeline is buoyed by the introduction of
the new products and the participation in a large volume mainly
government opportunities. The increase in margin reflects the
product mix and great efforts on combatting inflationary pressures.
Taking into consideration our careful cost management and the
opportunity pipeline, the Board is confident of delivering a full
year performance in line with market
expectations."
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
-ENDS-
Image Scan Holdings
plc
Tel: +44 (0) 1509
817400
Vincent Deery CEO
Sarah Atwell-King, CFO & Company
Secretary
WH Ireland
Limited - Nominated
Advisor and Corporate Broker
Tel: +44 (0) 207 220 1666
Mike Coe/Sarah Mather (Corporate
Finance)
ABOUT IMAGE SCAN HOLDINGS
PLC
About Image Scan Holdings
plc
The core activity of the Group is
the manufacture of portable X-ray systems for security and counter
terrorism applications. The Group recently launched a cabinet X-ray
machine and is replacing its Axis range of checkpoint X-ray systems
with new machines developed with a partner. All these products are
taken to market across the world through a strong network of
international partners.
In addition, over the last sixteen
years, Image Scan has developed and manufactured industrial X-ray
inspection systems, the MDXi range. The primary market for these
systems is in automotive emissions control where they are used for
quality control inspection of catalytic converters and diesel
particulate filters.
The visibility and reach of the
Company's 3DX-Ray brand has been further strengthened through a new
LinkedIn profile focussed on its EOD and counter-terrorism
activities. This can be found at: https://www.linkedin.com/company/3dx-ray/
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
Chief Executive Officer'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
Following a successful return to
profit in 2023, trading for H1 2024 was slow in terms of sales and
order intake.
Revenue for the Period was £1,061k
(H1 2023: £1,459k). Gross profit margin increased 6% for the Period
to 54% (H1 2023: 48%).
Operating expenses were stable at
£691k (H1 2023: £688k), reflecting strong cost control
efforts.
The reduced level of sales led to a
pre-tax loss of £119k in H1 2024 (H1 2023: pre-tax profit of
£16k).
The Company finished H1 2024 with an
order book of £729k (H1 2023: £1,116k).
As at the period end the Company had
a cash balance of £759k (H1 2023: £1,003k) and no debt.
Review of the period
As previously reported, the results
for FY 2024 will be significantly second half weighted. H1 2024 saw
a slowdown in terms of sales and order intake, following a
successful return to profit in 2023, but has created a pipeline of
sales opportunities that will benefit the second half when
converted. Therefore, the Company remains confident of meeting
market expectations for the year.
The year to date has seen extensive
marketing activities; the team has been actively attending
exhibitions in Europe and the Middle East and
going on territory visits, to showcase and demonstrate the enhanced
product portfolio. The focus has been on the latest addition to the
product family, the ThreatScan®-AS2, a very thin and light weight
imaging panel ideal for rapid response Counter Explosive Ordnance
operations using a backpack deployment, which was launched
at the Middle Eastern Security Exhibition in January
2024.
The introduction of the
ThreatScan®-AS2 complements the ThreatScan®-AS1, expanding outreach
to a broader customer and more sophisticated territory base, and is
providing opportunities via partners in larger volume tender
processes that were historically unavailable to Image
Scan.
The year-to-date contracts have
witnessed a broad geographic spread of customers from territories
including Europe, South East Asia, China, India, Middle East and
Australasia and activity levels in the marketplace remain strong
and are improved by the new product portfolio. Pleasingly, the
Group has received orders from new territories,
notably Spain and Switzerland for Axis-CXi, the
cabinet-based x-ray system for screening mail, parcels and small
baggage for potentially harmful items and contraband.
We continue to adeptly manage the
reduction in industrial business supporting the catalyst market
(associated with the internal combustion engine), as this sector
undergoes geographic migration to lower cost-based locations. Image
Scan is focusing on service and support revenue rather than relying
on capital equipment sales.
Stock levels are being managed
carefully to ensure customer delivery expectations are achieved.
Stock levels have increased since a low at the 2023 year end
(following strong sales) back to more normal levels and in
anticipation of a stronger second half sales
performance.
The product development program
continues to focus on additional options for the higher precision
portable X-ray imaging systems and widening the scope of
opportunity for our global partner network to participate in all
portable x-ray competitions regardless of their location or
technical specifications.
Post Period-end highlights
As announced on Monday 29 April 2024
the Company has won an initial order of c£300k from a partner to
supply them with ThreatScan®-AS1 portable X-ray systems pursuant to
a framework contract the partner has secured with a European
Ministry of Defence (MOD) organisation.
The initial order of ThreatScan®-AS1
portable X-ray system's valued at approximately £300k and is
scheduled for delivery in H2 FY24. Further orders are expected over
the period of the partner's two-year framework contract albeit the
volume and timing of subsequent orders is as yet not
certain.
This order represents a major
milestone for Image Scan, marking the first large-scale order for
the recently released ThreatScan-AS1 for use by a European military
organisation. It validates the Company's product development
strategy to develop and deliver higher-performance solutions in the
portable x-ray market.
Outlook
The introduction of the higher value
ThreatScan®-AS1 complemented by the ThreatScan®-AS2, demonstration
activity, the level of attendance at security trade shows globally,
the order outlined above and the opportunity pipeline built with
ours partners instils growing confidence for the future. The orders
received in H1 2024 combined with the significantly improved
(compared to the same period of FY23) sales pipeline will deliver
increased sales in the second half such that we remain confident of
meeting market expectations for the year.
The Board continue to look create
strategic opportunities to expand the business organically through
partnerships and via acquisitions. The Board, with the support of
the Company's largest shareholder, has commenced
a process of identifying and analysing organisations offering
complementary products or technology that would benefit from Image
Scan's well developed partner network.
I want to express my sincere
gratitude to the team for their ongoing commitment to making this
strategy a reality
Vince Deery
Chief Executive
Officer
Consolidated income statement
For
the six months ended 31 March 2024
|
Note
|
Six months
ended
31 March
2024
(Unaudited)
£'000
|
Six
months
ended
31 March
2023
(Unaudited)
£'000
|
Year
ended
30
September
2023
(Audited)
£'000
|
Revenue
|
|
1,061
|
1,459
|
2,963
|
Cost of sales
|
|
(492)
|
(752)
|
(1,528)
|
Gross profit
|
|
569
|
707
|
1,435
|
Gross profit %
|
|
54%
|
48%
|
48%
|
Operating expenses
|
|
(691)
|
(688)
|
(1,354)
|
Other operating income
|
|
-
|
-
|
15
|
Operating (loss)/profit
|
|
(122)
|
19
|
96
|
Finance income
|
|
5
|
2
|
7
|
Interest payable
|
|
(2)
|
(5)
|
(6)
|
(Loss)/profit before taxation
|
|
(119)
|
16
|
97
|
Taxation
|
|
-
|
-
|
26
|
(Loss)/profit for the period
|
|
(119)
|
16
|
123
|
|
|
Pence
|
Pence
|
Pence
|
Earnings per share
|
|
|
|
|
Basic (loss)/profit per
share
|
3
|
(0.09)
|
0.01
|
0.09
|
Diluted (loss)/profit per
share
|
|
(0.09)
|
0.01
|
0.09
|
Consolidated statement of changes in equity
For
the six months ended 31 March 2024
|
Note
|
Six months
ended
31 March
2024
(Unaudited)
£'000
|
Six
months
ended
31 March
2023
(Unaudited)
£'000
|
Year
ended
30
September
2023
(Audited)
£'000
|
Opening equity shareholders'
funds
|
|
1,511
|
1,388
|
1,388
|
(Loss)/profit attributable to equity
shareholders
|
|
(119)
|
16
|
123
|
Closing equity shareholders'
funds
|
|
1,392
|
1,404
|
1,511
|
Consolidated statement of financial position
As
at 31 March 2024
|
As at
31 March
2024
(Unaudited)
£'000
|
As
at
31 March
2023
(Unaudited)
£'000
|
As
at
30
September
2023
(Audited)
£'000
|
Non-current assets
|
|
|
|
Intangible and tangible
assets
|
488
|
514
|
481
|
|
488
|
514
|
481
|
Current assets
|
|
|
|
Inventories
|
495
|
569
|
349
|
Trade and other
receivables
|
514
|
440
|
634
|
Cash and cash equivalents
|
759
|
1,003
|
958
|
|
1,768
|
2,012
|
1,941
|
Total assets
|
2,256
|
2,526
|
2,422
|
Current liabilities
|
|
|
|
Trade and other payables
|
753
|
981
|
784
|
Non-current liabilities
|
111
|
141
|
127
|
Total liabilities
|
864
|
1,122
|
911
|
Net
assets
|
1,392
|
1,404
|
1,511
|
|
|
|
|
Equity
|
|
|
|
Share capital
|
1,368
|
1,368
|
1,368
|
Share premium account
|
8,333
|
8,333
|
8,333
|
Retained earnings
|
(8,309)
|
(8,297)
|
(8,190)
|
Equity shareholders' funds
|
1,392
|
1,404
|
1,511
|
Consolidated cash flow statement
For
the six months ended 31 March 2024
|
Six months
ended
31 March
2024
(Unaudited)
£'000
|
Six months ended 31 March
2023 (Unaudited) £'000
|
Year
ended
30
September
2023
(Audited)
£'000
|
Cash flows from operating activities
|
|
|
|
Operating (loss)/profit
|
(119)
|
19
|
96
|
Adjustments for:
|
|
|
|
Depreciation
|
6
|
8
|
7
|
Amortisation of
intangibles
|
24
|
22
|
61
|
Amortisation of right of use
asset
|
17
|
21
|
38
|
Impairment of inventories
|
(5)
|
(14)
|
(54)
|
(Increase)/decrease in
inventories
|
(141)
|
74
|
334
|
Decrease/(increase) in trade and
other receivables
|
82
|
172
|
(40)
|
(Decrease)/increase in trade and
other payables
|
(6)
|
105
|
(81)
|
(Decrease)/increase in provision for
warranty
|
(6)
|
3
|
(4)
|
Net
cash (used in)/generated from operating
activities
|
(148)
|
410
|
357
|
Corporation tax recovered
|
-
|
-
|
71
|
Net
cash (outflow)/ inflow from operating activities
|
(148)
|
410
|
428
|
|
|
|
|
Cash flows from investing activities
|
|
|
|
Interest received
|
5
|
2
|
7
|
Purchase of intangible
assets
|
(37)
|
(80)
|
(124)
|
Net
cash used in investing activities
|
(32)
|
(78)
|
(117)
|
|
|
|
|
Cash flows from financing activities
|
|
|
|
Lease payments
|
(19)
|
(19)
|
(43)
|
Net
cash used in financing activities
|
(19)
|
(19)
|
(43)
|
|
|
|
|
Net
(decrease)/increase in cash and cash equivalents
|
(199)
|
313
|
268
|
Cash and cash equivalents at
beginning of period
|
958
|
690
|
690
|
Cash and cash equivalents at end of period
|
759
|
1,003
|
958
|
Notes to the unaudited interim financial
statements
For
the six months ended 31 March 2024
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 2024 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 2023.
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 2023 does not constitute the full statutory
accounts for that period. The annual report and financial
statements for the year ended 30 September 2023 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 2023 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 £119k
(H1 2023 profit £16k) 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.