Image Scan Holdings soars despite taking revenue hit

Image Scan Holdings shares leapt on Thursday after the company said it expects to meet full year expectations despite disappointing first-half sales.

The AIM traded company, which provides X-ray imaging technology for the security and industrial inspection markets, reported interim revenue of £1.4m for the six months ended 31 March, down 28% compared to the same period last year, while the company swung from a profit before tax of £39,000 to a loss of £178,000.

Revenues were behind management expectations, in what Image Scan described as a reflection of "the unpredictable nature of government procurement processes", though activity is expected to increase in the second half of the year as customer decisions are due on several key projects.

Image Scan will start the second half of the year with a £1m order book, down from £1.1m at the same point last year, while cash and cash equivalents remained flat at £0.8m at the end of the period.

The company said it has a good pipeline of opportunity for its security offering and is expanding its market footprint by adding new partners to its network, while demand among major industrial customers is being driven by tighter emissions control legislation in countries such as India and China.

Bill Mawer, chairman and chief executive of Image Scan, said: "The recent decline in the share price is clearly disappointing for all shareholders. Our short-term strategy is a simple one: to take more of our X-ray inspection systems, to more markets, as fast as possible. The entire staff of the company is focused to this activity."

Image Scan Holdings' shares were up 13.96% at 1.51p at 0921 BST.