A strong Latin American market and a modest recovery in North America lay behind the resurgence in operating profits for security camera specialist IndigoVision (IND), despite the ongoing sales decline in Europe and the Middle East. And with gross profit margins recovering strongly, and given the company's high operational gearing, this meant a modest rise in revenues worked through to more than double underlying operating profits to £2.66m. Cash flow was strong, too, driving up net funds by a fifth to £6m and shareholders are being rewarded with a 70p a share special dividend to add to a hefty hike in the normal payout.
Revenues in Latin America jumped by over 50 per cent to £6m after management bolstered its sales presence in the region. The North American market also showed signs of recovery, with revenues rising by 5 per cent to £8.1m, although there was a notable difference in performance between Canada and the US; sales rose 21 per cent north of the 49th parallel, whereas the US declined by 5 per cent. As expected, sales in Europe and the Middle East suffered due to the eurozone's woes and ended the year down 9 per cent, at £10.9m.
Broker N+1 Brewin is holding its current year pre-tax profit estimate at £3.4m, giving EPS of 32.7p (from £2.7m and 25p in 2012), but notes "if current momentum is maintained we expect to upgrade later in the year".
INDIGOVISION (IND) | ||||
|---|---|---|---|---|
| ORD PRICE: | 415p | MARKET VALUE: | £31.1m | |
| TOUCH: | 410-420p | 12-MONTH HIGH: | 423p | LOW: 167p |
| DIVIDEND YIELD: | 2.4% | PE RATIO: | 19 | |
| NET ASSET VALUE: | 244p | NET CASH: | £6m | |
| Year to 31 Jul | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 18.4 | 2.03 | 91.7 | nil |
| 2009 | 26.3 | 3.26 | 34.1 | 5.0 |
| 2010 | 28.0 | 3.06 | 26.8 | 7.5 |
| 2011 | 28.8 | 1.21 | 8.40 | 7.5 |
| 2012* | 30.2 | 2.38 | 22.2 | 10.0 |
| % change | +5 | +97 | +164 | +33 |
Ex-div: 31 Oct Payment: 30 Nov *Dividend excludes a special dividend of 70p to be paid on 30 November 2012 | ||||
