Image Scan still feeling Covid-19 impact

Security and industrial inspection x-ray technology company Image Scan said the impact of the Covid-19 pandemic was still being felt in its first half on Wednesday, but said there was a “sufficiently strong” order book and pipeline of new business for it to anticipate a stronger second half.

The AIM-traded firm reported revenue of £0.87m for the six months ended 31 March, down from £2.3m year-on-year, although its gross profit margin improved to 55% from 45%.

It swung to a loss before tax of £0.2m from a profit of £0.18m a year earlier, while its bank balance stood at £1m at period end, broadly in line with the £1.1m it reported a year earlier.

Order intake for the period totalled £0.94m, down from £1.5m year-on-year, with the order book standing at £0.7m as at 31 March, down from £0.93m year-on-year.

The company’s order book increased to £1.5m by 27 April, the board noted, including a large portable x-ray contract win in Asia.

On the operational front, Image Scan said it received its first order for a new conveyor x-ray system from the United States in the period, added a new portable x-ray customer in Canada, and secured a contract to supply portable x-ray systems to the Royal Air Force.

New orders were also received for industrial screening systems, with the company’s research and development effort supported by customer funding.

The board said the firm had a “sufficiently strong” pipeline of new orders to continue to trade in line with market expectations for the year ending 30 September, which are for sales of £3m and a loss of £0.2m.

“We expected that the Covid-19 pandemic would continue to impact the flow of new orders into the business in the first half of this financial year, and that impact is reflected in these results,” said chairman and chief executive officer Bill Mawer.

“However, we are delighted that our new products are finding their first customers and that we have been able to open up new markets in North America and the UK.”

Mawer said the new portable x-ray order and the company’s “strong” new business pipeline pointed to a stronger performance in the second half, though it was monitoring the potential impact of coronavirus outbreaks in important markets such as India and Brazil closely.

“Nonetheless, we will continue our ambitious new product development programme as this is putting us in a strong position for when the effects of the pandemic diminish.”

At 1426 BST, shares in Image Scan Holdings were down 6.21% at 2.72p.