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Preliminary Results

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 2019.


  • Strong order bookings of £3.9m (2018: £2.8m)
  • Gross margin increased to 54% (2018: 47%)
  • Operating loss before tax £403k (2018: operating profit of £48k)
  • Period-end orderbook more than tripled to £1.7m (2018: £465k)
  • Year-end cash balance of £640k (2018: £782k) and high level of stock
  • Significant portable X-ray order from a European customer
  • New security screening system in development
  • New international sales partners appointed


Bill Mawer, Chairman and Chief Executive of Image Scan, commented: “It is disappointing to be reporting a decline in sales and profits. However, while the portable X-ray market has undoubtably become more competitive, recent orders show that our strong product range and focused international sales activity can still deliver. I am pleased to report that we start the new financial year with an order book that includes more portable systems than were delivered in all of last year.

In FY 2020 we will continue our focus on expanding the security product range and filling gaps in our international partner network as we look to drive organic growth in our key markets. We will also seek out larger security screening projects that build on our capability and expertise. The industrial screening market continues to present opportunities for growth as emissions control legislation tightens in key markets and we look for new customers for our sophisticated X-ray systems.

The company has started the new year strongly and we expect to see a material improvement in our performance in the year.”



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 / William Goode (Corporate Finance)

Caspar Shand Kydd (Sales)


Person responsible: The person responsible for arranging the release of this announcement on behalf of Image Scan is William Mawer.


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:




The results for the Image Scan Group for the year ending 30 September 2019 reflect the low order book with which the Group started the year and a long period where order intake continued at a relatively subdued level.  Orders were impacted by delays or cancellations to procurement programmes by key international customers. Additionally, sales of industrial systems returned to a more normal level after the record high of the previous year. However, the final quarter saw a turnaround in order intake, with some significant portable X-ray contracts being received, and the Group finished the period with a strong order book.


Following an intensive effort by the sales team, total order booking in the year was up 39% at £3.9m (2018: £2.8m).

Sales reduced to £2.4m (2018: £3.5m) impacted by delays in Government orders and a fall in sales to the Indian subcontinent where, for the second year, budgets have been tight. This region did, however, see a number of deployments of industrial units. Margins strengthened to 54% (2018: 47%) partly driven by new service contracts on the exceptionally high number of industrial units deployed in FY 2018.

Overheads rose slightly to £1.68m (2018: £1.60m) largely due to small, planned increases in research & development and marketing spend. The pre-tax trading loss for the year was £403k (2018: operating profit of £48k).

The financial position of the Group remained strong with net assets of £1.27m (2018: £1.63m) at the year end which includes a cash balance of £640k (2018: £782k). The Group has been able to meet its working capital requirements for the year under review. The period ended with an orderbook of £1.7m (2018: £465k), most of which should be delivered in the first half of FY 2020.

The Group currently holds high levels of stock, particularly part-complete portable X-ray systems. With most of this stock allocated to the recently received orders, the stock level is expected to decline over the next few months. A stock control policy, constantly reviewed by management, strikes a balance between control of working capital and the need to offer short delivery times to customers.


The business started the year with only a small order book and much of this was delivered in the first quarter. Some significant orders that had been expected during the year were delayed, in some cases until late in the final quarter, leaving the business with an overall reduction in sales but a strong  year end order book.

Throughout the year the business worked very closely with a key partner in a European country on a large portable X-ray project. The customer’s procurement process involved extensive trials and evaluations over a long period and, as might be expected for such a significant project, attracted a large field of portable X-ray competitors. The contract, worth over £800k was eventually received only in the final month of the year, too late for sales to be delivered in the reporting period. An additional significant contract won close to the year end, this time from an Asian customer, further added to the order book. The Group aims to deliver both of these orders in the first half of FY 2020.

An intensive marketing effort saw the Group undertake demonstrations and trials across the globe and especially in in Europe, South America, Asia and the Middle East. New partners were taken on in a number of important territories and opportunities were identified in new markets.

The research and development team continued to develop upgrades to the range of portable X-ray systems, including new digital communications technology and an “Image Stitching” feature which allows a series of images taken of a large object to be combined into a single high-resolution picture of the threat. Additionally, the team produced an engineering development model for a completely new X-ray system using the core “Linescan” detector technology for a new application, quite separate from portable X-ray. Following extensive engineering evaluation, a full prototype is now in development and the product should be released in FY 2020.

A new measurement technique has been developed for the MDXi range of industrial X-ray systems and is currently being marketed to our key customers with a view to deploying the algorithms into our large installed base of systems during FY 2020. Deliveries of industrial systems were down from the record seen in FY 2018 but the order book is again building in this area. The number of support contracts increased as the systems deployed in FY 2018 came into service and this work provides valuable, and growing, sustainable income, with the support team regularly visiting our key customers’ international manufacturing sites and carrying out preventative maintenance.


The Group continued to upgrade and improve its internal processes during the period, in line with its ISO 9001:2015 compliant quality system. The Continuous Improvement process drove on-time delivery and quality performance. An extensive review of the supply chain was carried out with potential improvements in cost and quality identified and implemented. A UK based supplier for a large machined component, hitherto sourced from Belgium, was identified and vetted, reducing the scope for post Brexit disruption of supply for this important item. Other initiatives focussed on cross functional teamwork within the business and improvements to the working environment within the Group’s factory units near Loughborough.


The core strategy continues to be to build the Group through a combination of organic and acquisition growth. However, the Board recognizes that the opportunities for acquisition will be limited by the current low share price and market capitalisation. For these reasons the short-term strategy is focussed on organic growth, with the immediate target of returning sales and profits to the 2017 level, while laying the foundations for further growth beyond this.

The key elements of this organic growth strategy are the further enhancement of the portable X-ray range in order to strengthen the position in this highly competitive market; the development of new products based on the Group’s core technologies and the further expansion of the product range through partnering with other security technology companies. We will continue to look for new and stronger sales partners in the more attractive regional markets and will seek out additional users for our portable X-ray systems beyond the conventional “bomb squad” market.

The Group will look to further strengthen the industrial product range and increase its deployment into the international manufacturing operations of current customers, while looking to add new customers in this important sector. We will continue to develop the product line and recently added important new analysis techniques which we hope to deploy during FY 2020.

The Board’s longer-term ambition to increase the critical mass of the business through carefully selected acquisitions remains.


The substantial portable X-ray orders won towards the end of the period demonstrate that our product technology and our sales team and our strong network of international partners, can continue to create and win opportunities in the security marketplace. However, some countries, including the UK, have decreased their assessment of the security threat level, which might be expected to lead to softness of budgets for security equipment. Additionally, portable X-ray is a small, niche market, within which many governments have sufficient equipment to meet their short-term needs and face an increasing choice of suppliers when they do run procurement programmes in this category. In response to this, the Group is planning upgrades to its portable X-ray systems and is focussing attention on less highly penetrated markets such as those in South America and Eastern Europe. The strength of our partner network should allow us rapidly to get new products into the market as they become available.

While sales of industrial systems returned to a more normal level in FY 2019, we continue to see opportunity in the market for inspecting automotive catalytic converters and diesel particulate filters. Our key customers are building capacity in a number of territories, not least China and India, and we are seeing new orders for systems to be deployed in these markets.

In the longer term, the Board continues to believe that a blend of organic and acquisition growth is the best way to deliver shareholder value, as the greater scale will provide both protection from market shocks and stronger amortisation of the relatively high fixed costs associated with a stock market listing.


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


3 December 2019







As restated



REVENUE 2,365,202 3,464,910
Cost of sales (1,086,595) (1,819,617)
Gross profit 1,278,607 1,645,293
Operating expenses

Research and development expenses





Total administrative expenses (1,681,310) (1,597,029)






Exceptional costs (250,458)
OPERATING LOSS (402,703) (202,194)
Finance income 892 344
LOSS BEFORE TAXATION (401,811) (201,850)
Taxation 33,939 (17,839)






Pence Pence
Earnings per share 3
Basic (0.27) (0.16)
Diluted (0.27) (0.16)








As restated



Intangible Assets 25,334 18,877
Property, plant and equipment 11,575 15,067
Deferred Tax Asset 7,150 37,344
44,059 71,288
Inventories 783,089 938,639
Trade and other receivables 663,959 783,470
Cash and cash equivalents 640,489 781,635
2,087,537 2,503,744
TOTAL ASSETS 2,131,596 2,575,032
Trade and other payables 848,037 909,966
Warranty provision 16,000 34,999
864,037 944,965
NET ASSETS 1,267,559 1,630,067
Share capital 1,363,546 1,363,546
Share premium account 8,327,910 8,327,910
Retained earnings (8,423,897) (8,061,389)





CONSOLIDATED Share capital


Share premium


Retained earnings





As at 1 October 2017 1,357,046 8,317,410 (7,853,357) 1,821,099
Loss for the year and total comprehensive income/(expenditure) for the year (219,689) (219,689)
Transactions with owners:
    Shares issued during the year 6,500 10,500 17,000
    Share issue Costs
    Share-based transactions 11,657 11,657
As at 30 September 2018 1,363,546 8,327,910 (8,061,389) 1,630,067
Loss for the year and total comprehensive income/(expenditure) for the year (367,872) (367,872)
Transactions with owners:
   Shares issued during the year
   Share issue Costs
   Share-based transactions 5,364 5,364
As at 30 September 2019 1,363,546 8,327,910 (8,423,897) 1,267,559







As restated



Operating profit before research and development expenditure and exceptional costs 5,828 431,451  
Research and development expenditure (408,531) (383,187)  
Exceptional costs (250,458)  
Operating loss (402,703) (202,194)  
Adjustments for:  
Depreciation 13,482 14,763  
Amortisation of intangible assets 10,458 1,081  
Impairment of inventories 13,297 43,602  
Decrease in inventories 142,253 112,638
Decrease in trade and other receivables 119,511 774,208  
Decrease in trade and other payables (61,929) (1,256,282)  
Decrease in warranty provisions (18,999) (12,978)  
Share-based payments 5,364 11,657  
Cash generated used in operating activities (179,266) (513,505)  
Corporation tax 64,133 47,628  
Net cash flows used in operating activities (115,133) (465,877)  
Interest received 892 344  
Purchase of intangibles (16,915) (19,958)  
Purchase of property, plant and equipment (9,990) (2,988)  
Net cash used in investing activities (26,013)  (22,602)  
Proceeds from issue of share capital 17,000  
Financial costs of fundraising  
Net cash generated from financing activities 17,000  
Cash and cash equivalents at beginning of year 781,635 1,253,114  



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 2019 and 30 September 2018 but is derived from those accounts. Statutory accounts for 2018 have been delivered to the Registrar of Companies, and those for 2019 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.


Restatement of comparative period results

The directors have reassessed the classification of the R&D tax credit in the statement of comprehensive income and decided to present this within taxation expense for the year ended 30 September 2019 rather than other operating income.  The comparative period has been restated to be consistent and £47,628 previously reported as other operating income has been reclassified and included in taxation expense.  This reclassification has also resulted in a restatement of the operating profit before research and development expenditure and exceptional costs and the corporate tax receipt in the cash flow statement.


In addition the directors have reassessed the classification of software and licensing and reclassified the presentation of this from property plant and equipment to intangible assets for the year ended 30 September 2019.  The comparative period figures have been restated to be consistent resulting in £19,958 being reclassified from property, plant and equipment to intangible assets for the year ended 30 September 2019.

The reclassifications explained above have not affected previously reported profit after tax or earnings per share.


  1. IFRS 2 ‘Share-based payments’

Operating expenses includes a charge of £5,364 (2018: £11,657) after valuation of the Group’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.


  1. 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.  The share options could potentially dilute basic earnings per share in the future, but were not included in a calculation of diluted earnings per share in the current year because they are antidilutive.





Loss for the year (367,872) (219,689)  
Weighted average number of ordinary shares in issue 136,354,577 135,774,838
Number of diluted shares 141,966,352 141,207,627
Basic loss per share (0.27p) (0.16p)  
Diluted loss per share (0.27p) (0.16p)