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Interim Results 2016

Improved performance in both security and industrial sectors

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 2016 which are in line with the Board’s expectations. Given performance during the first six months the Board remains confident of meeting market expectations for the year to 30 September 2016.

Financial summary:

  • Order intake for the period of £1,314k (2015: £977k)
  • Revenue of £1,372k (2015: £863k)
  • Gross profit margin of 44% (2015: 36%)
  • Loss before taxation of £64k (2015: £387k)
  • Period end bank balance of £532k (2015: £455k)
  • Period end order book of £634k (2015: £536k)

Operational highlights:

  • New portable X-ray system demonstrated worldwide
  • Multi unit portable X-ray orders received
  • Good progress with Government supported Precision Linescan Detector development
  • Continued new orders for industrial inspection systems
  • Growth in customer funded research and development for industrial systems

Bill Mawer, Chairman and Chief Executive Officer of Image Scan, commented: “This period shows a marked improvement in the Company’s performance, driven by growing sales of standard products in both the security and industrial sectors. Our new systems are well positioned in the very active portable X-ray inspection market and sales have substantially increased from the prior year. It has been gratifying to see the return of substantial multi-unit government orders.
The increase in our industrial inspection activity shows Image Scan’s ability to benefit from our deep and longstanding relationships with a number of key customers in the automotive emissions control area. We hope to further strengthen these relationships and extend the deployment of our systems across these customers’ global manufacturing operations.
Although we start the second half of the year with a healthy order book, the business will be focussed on continuing the momentum so far achieved and winning further orders.”

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
Sarah Atwell King, Company Secretary Tel: +44 (0) 1509 817 400

Cantor Fitzgerald Europe (Nominated Adviser and Broker)
Rick Thompson / David Foreman / Michael Reynolds / David Banks 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 2016 of £1,372k (2015: £863k) represented a significant increase over the prior period. Security sales were £741k (2015: £669k). There was a significant change in security product mix, with almost double the number of portable X-ray units being sold, including two significant multi-unit orders. These increases in portable unit sales offset a decrease in the number of Axis Conveyor systems sold and lead to an improved gross margin for security of 41% (2015: 32%). Industrial sales were £631k (2015: £194k) reflecting an increase of activity in this area.

Overheads were tightly managed at £670k (2015: £697k). The post-tax loss in the business narrowed significantly to £44k (2015: £335k) while growth in orders seen at the end of the previous financial year continued with new orders received during the period totalling £1,314k (2015: £977k) leaving the Company with a period end order book of £634k (2015: £536k).

The company held £532k in cash at the period end (2015: £455k).

The sales team have continued to demonstrate our range of portable X-ray systems to customers and partners around the world. Important new customers, who have placed their first orders for these systems, have been found in the Middle East, Canada and Europe. The research and development team is working to further extend the portable X-ray products range. This activity includes the development of the Precision Linescan Detector with our partner Ibex Innovations. This Government supported programme continues to make good progress and high resolution images of complex objects have already been produced.

The industrial inspection business area, focussed on scanning catalytic converters and diesel particulate filters in the automotive industry, continues to grow with 3 units in the order book at the period end. Additionally, orders totalling approximately £150k for customer funded development are allowing additional features to be added to these systems.

The nuclear project, which had a negative impact on company performance for a number of years, has completed all its milestones and reached the end of its warranty period and an ongoing support contract has been put in place with the end user.

The Company’s commitment to process improvement and quality continues and in December 2015 our quality systems were recertified by an independent assessor as compliant to ISO 9001.

The market for security X-ray systems remains strong, reflecting the existence of a continuing terrorist threat and the impact of recent incidents in Paris and Brussels. This has led to multi-unit procurements of our portable X-ray systems and we have submitted tenders against Government requirements for further multi-unit orders on which decisions are expected in the second half of FY 2015/16. Discussions with current and potential customers support the requirement for the Precision Linescan Detector and we remain confident that this system will do well following its anticipated launch in financial year 2017.

In the industrial area we believe that increased demands for in-line quality assurance in the manufacture of automotive emission control systems will continue to drive demand for Image Scan’s suite of inspection products. We are enhancing the product range through a combination of customer funded and self-funded research and development.

Although we start the second half of the year with a healthy order book, the business will be focussed on continuing the momentum so far achieved, winning further orders and supporting the continued development of new products. The staff at image Scan are enthusiastic, dedicated and creative and on behalf of my fellow Board members, I would like to formally thank our staff for their contribution during this period.

Bill Mawer
Chairman and Chief Executive Officer

 Consolidated income statement
 For the six months ended 31 March 2016


Note Six months
31 March 2016
Six months
31 March 2015
Year ended
30 September
Revenue    1,372       863    1,707
Cost of sales      (766)      (553)   (1,058)
Gross profit       606       310        649
Administrative expenses      (670)      (697)  (1,290)
Operating loss        (64)      (387)      (641)
Finance revenue            –           –           1
 Loss before taxation        (64)      (387)      (640)
 Taxation         20         52          90
 Loss for the period        (44)      (335)       (550)



Note Pence Pence Pence
Earnings per share
Basic and diluted loss per share [3) (0.04) (0.27) (0.44)

Consolidated statement of changes in equity
For the six months ended 31 March 2016

Note Six months
31 March 2016
Six months
31 March 2015
Year ended
30 September
Opening equity shareholders’ funds       617    1,156   1,156
Shares issued during the year            –           –          –
Share issue costs            –           –          –
Share-based payments  [4]           8           5        11
Loss attributable to equity shareholders        (44)      (335)    (550)
       561       826     617

Consolidated statement of financial position
As at 31 March 2016


Note As at
31 March 2016
As at
31 March 2015
As at
30 September
Non-current assets
Plant and equipment         11          5         4
        11          5         4
Current assets
Inventories       459      659     571
Trade and other receivables       334      459     294
Cash and cash equivalents       532      455     469
Current tax asset         20      124       90
   1,345   1,697  1,424
Total assets    1,356   1,702  1,428
Current liabilities
Trade and other payables        742      845     778
 Non-current liabilities
 Provisions for liabilities and charges          33         31       33
 Total liabilities        775       876      811
 Net assets        581       826      617
 Share capital     1,256    1,256   1,256
 Share premium account     7,935    7,935   7,935
 Retained earnings   (8,610)   (8,365)  (8,574)
 Equity shareholders’ funds        581       826      617

This interim financial information was approved by the Board of Directors on 18/04/2016.

Bill Mawer
Chairman and Chief Executive Officer

Consolidated cash flow statement
For the six months ended 31 March 2016

Note Six months
31 March 2016
Six months
31 March 2015
Year ended
30 September
Cash flows from operating activities
Operating loss       (64)      (387)      (641)
Adjustments for:
Depreciation           2           3           5
Impairment of inventories         10         10         18
Increase in provision for warranty            –           9         12
Decrease/(increase) in inventories       102      (338)      (258)
(Increase) in trade and other receivables        (40)      (277)      (112)
(Decrease)/increase in trade and other payables        (36)       482       414
Share-based payment charge           8           5         11
Net cash (used) in operating activities        (18)      (493)      (551)
Corporation tax recovered          90           –         72
Net cash inflow/(outflow) from operating activities          72      (493)      (479)
 Cash flows from investing activities
 Interest Received            –           –           1
 Purchase of property, plant and equipment           (9)           –          (1)
 Net cash used in investing activities           (9)           –            –
 Cash flows from financing activities
 Proceeds from issue of share capital            –           –           –
 Financial costs of fundraising            –           –           –
 Net cash from financing activities            –           –           –
 Net (decrease)/ increase in cash and cash equivalents         63      (493)      (479)
 Cash and cash equivalents at beginning of period       469       948        948
 Cash and cash equivalents at end of period       532       455        469

Notes to the unaudited interim financial statements
For the six months ended 31 March 2016

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 2016 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 2015.

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 2015 does not constitute the full statutory accounts for that period. The annual report and financial statements for the year ended 30 September 2015 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 2015 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 £43,845 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 £8,492 (2015: £5,000) 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 2016 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 9Q