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Interim Results 2015

Image Scan, (AIM: IGE) specialists in the field of innovative real-time X-ray imaging for the Security and Industrial Inspection markets, today announces its interim results for the six months ended 31 March 2015.

Financial summary:

  • Revenue £863,000 (2014: £1,678,000)
  • Gross profit margin of 36% (2014: 31%)
  • Loss after taxation of £335,000 (2014: £36,000)
  • Period end bank balance of £455,000 (2014: £25,000)

Operational highlights:

  • Replacement X-ray generator performing well for first customers
  • New portable X-ray product launched and first orders received
  • Research and development expenditure increased to £219,000 (2014: £95,000)
  • Strong international orders for Axis conveyor X-ray systems
  • Management team strengthened with new operations manager and (post period end) additional sales manager
  • New range of portable X-ray systems under the name “Threatscan” launched at Counter Terror Expo post period end
  • First order received for new ultra-thin detector panel post period end

Bill Mawer, Chairman and Chief Executive Officer of Image Scan, commented: “We have previously commented that order intake in the period was slow with the new portable X-ray generator only becoming available mid-way through the period. However we increased our research and development expenditure significantly and, at the end of the period, achieved the launch of new portable X-ray detector panels and new software. These elements integrate with the new generators to give the Company a highly competitive range of portable X-ray systems, well suited to a variety of customer applications. It is gratifying to have received the first orders for our new ultra-thin Threatscan LS1 detector panel.”

Demand for portable X-ray systems remains strong so the current focus of the business is on moving the new range of portables into volume production while supporting the newly enhanced sales team and our distributors with live equipment demonstrations. We will then shift the focus of the R and D team into expansion of the product range beyond the portable X-ray systems.”

For further information on the Company, please visit: and for further information on its products, please visit:

Image Scan Holdings plc
Bill Mawer, Chairman and Chief Executive Officer

Tel: +44 (0) 1509 817 400 Email:

Cantor Fitzgerald Europe (Nominated Adviser)
Rick Thompson / David Foreman / Michael Reynolds (Corporate Finance)

David Banks / Tessa Sillars (Corporate Broking)

Tel: +44 (0) 207 894 7000

Chairman’s statement
Image Scan Holdings plc is a specialist in innovative real-time X-ray technology, operating globally in the security and industrial inspection sectors. The Group’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 Group also supplies high-quality image acquisition systems for non-destructive testing to commercial organisations worldwide.

Financial results
Revenue for the six months ended 31 March 2015 was significantly down over the period at £863,000 (2014: £1,678,000), with 77% of sales (2014: 85%) coming from the security market. Of this, only £362,000 (2014: £752,000) came from portable X-ray systems, reflecting the delayed availability of the replacement portable X-ray generator from our US-based supplier. However, gross margin improved to 36% (2014: 31%) supported by high margin service contracts on industrial systems.

An increased focus and investment in research and development saw expenditure more than double to £219,000 (2014: £95,000). Overhead expenses were carefully controlled and remained approximately flat at £478,000 (2014: £481,000). An operating loss of £387,000 (2014: £59,000) was somewhat ameliorated by research and development tax credits of £52,000 (2014: £23,000) giving a loss after tax of £335,000 (2014: £36,000).

The Company held £455,000 (2014: £25,000) cash at the end of the period.

The portable X-ray development programme, which includes the external development of X-ray generators and the internal development of detector panels and software, proceeded more slowly than planned during the period and the resultant delays in availability of these new systems to the sales team impacted order intake. However, these systems have now been shown at the Counter Terror Expo at Olympia and sparked high levels of interest from customers. The Axis conveyor X-ray systems achieved strong order intake over the period with orders for 22 units added to the 14 units that were carried forward into the reporting period. 13 of these units were sold in the period with the remainder due for delivery in the second half of the year.

An experienced operations manager was recruited and has already contributed to both on-time delivery and cost control.

A single industrial testing unit was sold to the Company’s main automotive customer; whilst service revenue was strong at £125,000 (2014: £50,000).

The portable X-ray market remains strong, driven by concerns over a variety of terrorist threats, not least those from ISIS and the potential for ISIS trained militants to return to their country of origin. A number of countries are planning large multi-unit procurements. Demonstrator models for the new portable X-ray systems are starting to be deployed worldwide through the sales team and the distributor network in order to drive early uptake. This effort has been supported by recruitment of an experienced security sales manager who is starting to develop the European portable X-ray market.

Strong demand for the Axis system supports the desirability of re-engineering this system.

The Company is currently working on a new strategy for the industrial inspection market. Overall growth in the automotive sector, where most of Image Scan’s units are placed, remains strong with KPMG forecasting 5% CAGR (1) over the next five years. The new strategy will be focused on improvements to both product range and routes to market in this sector.

With the launch of the new portable X-ray products, I am confident that we now have a highly competitive range of systems and an excellent route to market. I intend for portable X-ray to be the foundation of the Company’s recovery and growth and the basis from which we develop our position in adjacent markets. The staff at Image Scan are enthusiastic, dedicated and creative and on behalf of my fellow Board members and shareholders, I would like to formally thank our staff for their contribution during this period.

Bill Mawer
Chairman and Chief Executive Officer
2 June 2015
(1) KPMG report ‘Global Automotive Retail Market’ – September 2013.

Consolidated income statement
For the six months ended 31 March 2015

Notes Six months
31 March 2015
Six months
31 March 2014
Year ended
30 September
£’000 £’000 £’000
Revenue 863 1,678 2,195
Cost of sales (553) (1,161) (1,522)
Gross profit 310 517 673
Administrative expenses (697) (576) (1,197)
Operating loss (387) (59) (524)
Finance revenue 1
Loss before taxation (387) (59) (523)
Taxation 52 23 72
Loss for the period (335) (36) (451)
Pence Pence Pence
Earnings per share
Basic and diluted loss per share [3] (0.27) (0.05) (0.57)


Consolidated statement of changes in equity
For the six months ended 31 March 2015

Note Six months
31 March 2015
Six Months ended 31 March 2014
Year Ended 30 September
Opening equity shareholders’ funds 1,156 677 677
Shares issued during the year 970
Shares issued during the year in payment of creditors 35
Share issue costs (78)
Share-based payments [4] 5 3
Loss attributable to equity shareholders (335) (36) (451)
826 641 1,156

Consolidated statement of financial position
As at 31 March 2015


Notes As at
31 March 2015
As at
31 March 2014
As at 30 September
Non-current assets
Plant and equipment
5 16 8
5 16 8
Current assets
Inventories 659 352 331
Trade and Other Receivables 459 651 182
Cash and cash equivalents 455 25 948
Current tax asset 124 59 72
1,697 1,087 1,533
Total assets 1,702 1,103 1,541
Current liabilities
Trade and other payables 845 440 363
Non-current liabilities
Provisions for liabilities adn charges 31 22 22
Total liabiliites 876 462 385
Net assets 826 641 1,156
Share Capital 1,256 763 1,256
Share premium account 7,935 7,501 7,935
Retained earnings (8,365) (7,623) (8,034)
Equity shareholders’ funds 826 641 1,156

This interim financial information was approved by the Board of Directors on 2 June 2015.

Bill Mawer
Chairman and Chief Executive Officer

Consolidated cash flow statement
For the six months ended 31 March 2015

Notes Six months
31 March 2015
Six Months ended 31 March 2014
Year Ended 30 September
£’000 £’000 £’000
Cash flows from operating activities
Operating loss (387) (59) (524)
Adjustments for:
Depreciation 3 7 13
Impairment of inventories 10 45
Transfer of fixed assets to stock 2 6
Increase in provision for warranty 9
(Increase)/decrease in inventories (338) 106 83
(Increase)/decrease in trade and other receivables (277) 469 938
Increase/(decrease) in trade and other payables 482 (509) (585)
Share-based payment charge 5 38
Net cash (used in/generated from operating activities (493) 16 14
Corporation tax recovered 36
Net cash (outflow)/inflow from operating activities (493) 16 50
Cash flows from investing activities
Purchase of property, plant and equipment (3) (6)
Net cash used in investing activities (3) (6)
Cash flows from financing activities
Proceeds from issue of share capital 970
Financial costs of fundraising (78)
Net cash from financing activities 892
Net (decrease)/ increase in cash and cash equivalents (493) 13 936
Cash and cash equivalents at beginning of period 948 12 12
Cash and cash equivalents at endof period 455 25 948


Notes to the unaudited interim financial statements
For the six months ended 31 March 2015

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 2015 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 2014.

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 2014 does not constitute the full statutory accounts for that period. The annual report and financial statements for the year ended 30 September 2014 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 2014 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 after taxation of £335,000 and on 125,604,577 ordinary shares in issue throughout the period.

IAS 33 requires presentation of diluted EPS when a company could be called upon to issue shares that would decrease net profit or increase net loss per share. Earnings or loss per share would not be affected by the exercise of out-of-the-money options since it is inappropriate to assume that option holders would act irrationally. Accordingly, as there are no other diluting future share issues, diluted EPS equals basic EPS.

4 IFRS 2 ‘Share-based payments’
Operating expenses includes a charge of £5,000 (2014: £nil) after valuation of the Company’s employee share option schemes in accordance with IFRS 2. Under this standard, the fair value of the options at the grant date is spread over the vesting period. These items have been added back in the consolidated statement of changes in equity.

5 Additional copies
Further copies of the 2015 interim report are available on the Company’s website,, and from the Company’s registered office, 16-18 Hayhill Industrial Estate, Sileby Road, Barrow-upon-Soar, Leicestershire LE12 8LD.

Professional advisers

William Mawer
Executive Chairman/Chief Executive Officer

Vincent Deery
Sales and Marketing Director

Richard Leaver
Non-executive Director

Timothy Jackson
Non-executive Director

Company Secretary
Sarah Atwell-King

Registered Office
16-18 Hayhill Industrial Estate
Sileby Road
Leicestershire LE12 8LD

Company number

Nominated adviser and broker
Cantor Fitzgerald Europe
One Churchill Place
Canary Wharf
London EC14 5RB

Principal bankers
Royal Bank of Scotland plc
8 South Parade
Nottingham NG1 2JS

Browne Jacobson
44 Castle Gate
Nottingham NG1 7BJ

Neville Registrars Ltd
Neville House
18 Laurel Lane
Halesowen B63 3DA

Wilkins Kennedy LLP
Statutory Auditor
Chartered Accountants
Bridge House
London Bridge
London SE1 9QR

Image Scan Holdings plc
16-18 Hayhill Industrial Estate
Sileby Road
Leicestershire LE12 8LD
Tel: +44 (0)1509 817 400
Fax: +44 (0)1509 817 401