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Preliminary Results for year ended September 2017

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.



Image Scan (AIM: IGE), the specialist supplier of X-ray screening systems to the security and industrial inspection markets, today announces preliminary results for the year ended 30 September 2017.


  • Total order intake for the year increased 25% to £5.4m (2016: £4.3m)
  • Sales increased 50% to £5.0m (2016: £3.3m) at a gross margin of 38% (2016: 42%)
  • Pre-tax trading profit increased 350% to £477k (2016: £105k)
  • Closing order book of £2.1m (2016: £1.7m) and cash of £1.3m (2016 £1.1m)
  • Portable X-ray systems sold extensively in Asia, the Middle East and Europe
  • Growing sales to customers in the Indian subcontinent
  • Compact portable X-ray detector developed and launched
  • Continuing sales of industrial inspection systems


Bill Mawer, Chairman and Chief Executive of Image Scan, commented: “For a second consecutive year, sales of our range of portable X-ray systems to both current customers and first-time users increased considerably. We launched important new products and opened up promising new markets, a real team effort. I am also pleased with the continued progress in our supply chain and manufacturing processes, and with the growing library of positive feedback from users.

We started the new year with a record order book but have yet to finalise extended delivery dates on a portion of those orders. We continue to target large, multi-unit orders across our markets and this remains our primary short-term focus. In growing our order intake, we are focussed on diversifying our customer base, as in both our security and industrial businesses, a significant portion of the revenue is currently dependent on a small group of customers. In order to maximise the revenue from our well-developed route to market, we also plan to work towards adding new product lines to our portfolio during the coming year, beyond our current portable and industrial X-ray systems. This will be achieved through internal development, through partnerships or by acquisition and we can see opportunities in each of these areas.”


Image Scan Holdings plc                                                    Tel: +44 (0) 1509 817400

William Mawer, Chairman

Sarah Atwell-King, Company Secretary


Cantor Fitzgerald Europe                                                   Tel: +44 (0) 207 894 7000

Rick Thompson / David Foreman (Corporate Finance)

Alex Pollen / Caspar Shand Kydd (Sales)


About Image Scan Holdings plc
Image Scan Holdings plc (AIM: IGE) is focused on the development and commercialisation of market leading real-time X-ray solutions for use in the global Security and Industrial inspection markets.  The Company’s Security portfolio includes the ThreatScan® range of portable bomb and suspect package detection systems; the Axis range of baggage inspection systems; and SVXi, a small vehicle inspection system.  The Industrial inspection solutions include the MDXi product range, cabinet X-ray systems for laboratories and production lines.  The Company was founded in 1996 and joined AIM in 2002.


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



I am pleased to report on the results for Image Scan Holdings plc for the year ended 30 September 2017. The year saw substantial increases in both orders and sales and, with overheads under tight control, pre-tax profits grew strongly.


Order intake during 2017 totalled £5.4m (2016: £4.3m) and featured strong demand for portable X-ray systems. Revenue for the year was £5.0m (2016: £3.3m) and the business generated a pre-tax profit of £477k (2016: £105k). The Company closed the year with a record orderbook of £2.1m (2016: £1.7m) and a positive cash balance of £1.3m (2016: £1.1m).


In April the Company successfully raised £525k through a placing of 9,500,000 new ordinary shares at a price of 5.25 pence per share with new and existing institutional investors and a subscription of 500,000 new shares by William Mawer, Chairman and Chief Executive Officer, at the same price.


The Company’s product strategy for the portable X-ray market has been to develop a modular and flexible systems that allows precise targeting of the performance requirements and budget availability in particular regional markets and for individual customer groups. That strategy has led to significant breakthroughs in markets in the Indian subcontinent with several new customers purchasing systems during the year, particularly the ‘entry level’ ThreatScan®-Lite system. Sales also grew in South East Asia and Europe.


Industrial X-ray systems, were delivered to manufacturing plants in the UK, Eastern Europe and South America and an important customer started to deploy the system into its global manufacturing centres after extensive trials at its European base.

An accelerated product development project led to the launch of the ThreatScan®-LS3, a new compact detector panel for use in portable X-ray systems. This system makes the technology of the ThreatScan®-LS1 available in the more compact package required by certain customer groups, notably the more mobile threat investigation teams. First customer deliveries were made in 2017. The decision to prioritise the LS3 development was driven by market demand and resulted in a delay in the launch of the Precision Linescan Detector (“PLD”).  A second prototype of the PLD has now been built. The unit is currently being tested and was exhibited for the first time at the Milipol security show in Paris in November.



The number of portable X-ray systems sold increased by 65% in comparison to the prior year, much of the growth coming from markets in South East Asia and the Indian subcontinent. The year-end orderbook included over 80 portable systems, scheduled for delivery during FY2018. The majority of units sold were ThreatScan®-LS1 system following a major sales campaign during the prior year. That sales campaign has continued with units shown at major security equipment exhibitions and demonstrated at customer sites. However, several multi unit orders were received for the entry level ThreatScan®-Lite system. The launch of the compact ThreatScan®-LS3 system makes the technology and advanced image performance of the LS1 system available to users requiring a small imaging panel. It is now possible to provide a complete portable X-ray system in a backpack for users needing this flexibility.

Conveyor X-ray systems were sold to customers in the Middle East and a small number of MailScan systems from our UK manufacturing partner were sold to international customers.

The decision to prioritise the LS3 development was driven by market demand and resulted in a delay in the launch of the Precision Linescan Detector (“PLD”).  This system has been developed with support of a grant from Innovate UK, the UK Government’s innovation funding body. A second prototype of the PLD has been built, and is being tested. The system will be exhibited for the first time at the Milipol security show in Paris in November.

Industrial inspection systems, used for quality control in the manufacture of catalytic converters and diesel particulate filters in the automotive industry, were manufactured during the period and delivered to plants in UK, Eastern Europe and South America. We are working with our customers in this industry to explore and develop even more sophisticated testing regimes.


In response to both the growing volume of sales and our desire to continue to improve on-time delivery and quality performance, we continued a strong drive for operational improvement in the Company and its processes. Manufacturing volume varied widely through the year and tight control of the manufacturing process allowed us to recruit and train temporary staff at peak periods with no loss of quality.  The factory was re-laid out in the year, providing a 30% increase in capacity. There is further room for growth if required.

The support of the supply chain has also been important, and we now have a number of key suppliers working under framework contracts that allow us to call forward components as we need them rather than having to hold expensive stock in Image Scan or accept long lead times.


The Company started the year with an order book of £1.7m (2016: £0.7m), won new orders worth £5.4m (2016: £4.3m) and made sales of £5.0m (2016: £3.3m), finishing the year with an order book of £2.1m (2016: £1.7m).

Gross margin on sales remained strong at 38% (2016: 42%). The small decrease reflected a change in product mix and selective use of aggressive pricing to break into new markets. Overheads increased to £1.5m (2016: £1.4m) and included substantial budgeted expenditure on both research and development and sales and marketing. This represented a relative decrease to 30% of sales (2016: 42% of sales).

Profit before tax increased to almost 10% of sales at £477k (2016: £105k).

The business finished the year with a positive cash balance of £1.3m (2016: £1.1m)



The Company starts 2018 with a robust orderbook, although we need to finalise the extended delivery dates on a proportion of those orders.  The Company has an encouraging sales pipeline and a product range that allows a wide range of customers and markets to be addressed.  Further portable X-ray product launches are planned during the year and these should allow the company to continue to extend its customer base. The security equipment market continues to be very active, reflecting the continuing high level of the terrorist threat, as portable X-ray systems are important tools for early detection/identification of a threat and often one of the first security technologies to be deployed after a threat is detected.  We expect continuing healthy demand for these products.


We expect tighter legislation around vehicle emissions, particularly of diesel engines, to drive a continued focus on manufacturing quality in catalytic converters and diesel particulate filters. As a major supplier of automated X-ray inspection systems to this industry we expect these trends to continue to drive demand for our MDXi range of systems.


While the Company does receive valuable service and support revenue, this is its only recurring revenue. The Company has seen a growth in the number of support contracts in the year.  The Company will be very focussed on maintaining the strong order intake of the last 18 months in order to continue the momentum recently established. We are considering adding additional resource to the sales team to support this effort.


The outlook for the Company remains positive in all its major markets with the key short-term focus being to drive sales and diversify our sources of revenue.  Opportunities for further strategic expansion continue to be explored.


Over the next few years we intend to reinvest any profit made into the business and do not anticipate paying a dividend.



The Board values greatly the considerable efforts made by our staff and, on behalf of the Directors, I would like to take this opportunity to personally thank staff and shareholders for their continued commitment to Image Scan.



William Mawer


5 December 2017





Note     2017




Continuing operations          
REVENUE 3     5,033,636 3,314,806
Cost of sales       (3,104,007) (1,911,046)
Gross profit       1,929,629 1,403,760
Other operating income 4     57,166 77,790
Operating expenses

Research and development expenses





Total administrative expenses (1,509,704) (1,376,768)
OPERATING PROFIT/(LOSS) 5     477,091 104,782
Finance income       286 671
PROFIT/(LOSS) BEFORE TAXATION       477,377 105,453
Taxation 7     102,811






        Pence Pence
Earnings per share 8        
Basic       0.45 0.08
Diluted       0.43 0.08




Note     2017




Property, plant and equipment 9     26,842 16,796
        26,842 16,796
Inventories 11     1,094,879 504,584
Trade and other receivables 12     1,660,489 842,376
Cash and cash equivalents 13     1,253,114 1,054,588
        4,008,482 2,401,548
TOTAL ASSETS       4,035,324 2,418,344
Trade and other payables 14     2,166,248 1,627,061
Warranty provision 15     47,977 51,232
        2,214,225 1,678,293
NET ASSETS       1,821,099 740,051
Share capital 17     1,357,046 1,256,046
Share premium account       8,317,410 7,934,528
Retained earnings       (7,853,357) (8,450,523)






CONSOLIDATED Share capital


Share premium


Retained earnings





As at 1 October 2015   1,256,046 7,934,528 (8,573,938) 616,636
Profit for the year and total comprehensive income/(expenditure) for the year   105,453 105,453
Share-based transactions   17,962 17,962
As at 30 September 2016   1,256,046 7,934,528 (8,450,523) 740,051
Shares issued during the year   101,000 426,000 527,000
Share issue Costs   (43,118)   (43,118)
Profit for the year and total comprehensive income/(expenditure) for the year   580,188 580,188
Share-based transactions   16,978 16,978
As at 30 September 2017   1,357,046 8,317,410 (7,853,357) 1,821,099



  Note   2017




Cash flows from operating activities          
Operating profit before research and development expenditure     768,684 422,623  
Research and development expenditure     (291,593) (317,841)  
Operating profit     477,091 104,782  
Adjustments for:          
Depreciation     12,975 6,215  
Impairment of inventories     30,116 13,335  
(Increase)/decrease in inventories (620,411) 52,582    
Increase in trade and other receivables (715,301) (458,695)  
Increase in trade and other payables     539,186 849,168  
(Decrease)/increase in warranty provisions     (3,255) 18,052  
Share-based payments     16,978 17,962  
Cash generated (used in)/from operating activities     (262,621) 603,401  
Corporation tax recovered      
Net cash flows (used in)/generated from operating activities     (262,621) 603,401  
Cash flows from investing activities          
Interest received     286 671  
Purchase of property, plant and equipment   9   (23,021) (18,942)  
Net cash used in investing activities       (22,735)  (18,271)  
Proceeds from issue of share capital       527,000  
Financial costs of fundraising       (43,118)  
Net cash generated from financing activities     483,882  
Net INCREASE in cash and cash equivalents 198,526 585,130  
Cash and cash equivalents at beginning of year     1,054,588 469,458  
Cash and cash equivalents at end of year 13   1,253,114 1,054,588  


Notes to the preliminary statement
1. Basis of preparation
The financial information set out above does not constitute the Company’s statutory accounts for the years ended 30 September 2017 and 30 September 2016 but is derived from those accounts. Statutory accounts for 2016 have been delivered to the Registrar of Companies, and those for 2017 will be delivered following the Company’s Annual General Meeting. The auditors have reported on those accounts; their reports were unqualified and did not contain statements under Section 498 of the Companies Act 2006.

  1. IFRS 2 ‘Share-based payments’
    Operating expenses includes a charge of £16,978 (2016: £17,962) after valuation of the Company’s employee share options schemes in accordance with IFRS 2 ‘Share-based payments’. 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 statement of changes in equity.
  2. .Earnings per share

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.  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.






Profit for the year       580,188 105,453  
Weighted average number of ordinary shares in  issue     129,512,227 125,604,577  
Basic profit per share       0.45p 0.08p  
Diluted profit per share        0.43p 0.08p