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IndigoVision – 2016 results, a speculative buy?

By Steve Moore | Thursday 2 March 2017


Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.


Previously writing on networked video security systems group IndigoVision (IND) late last year, I concluded that further trading and financial comfort was required. I now note the shares currently on the rise on the back of results for the 2016 calendar year.

These note “underlying operating profit $0.4m (2015 operating loss: $0.7m)” - though the 2016 number is before a $0.3 million bad debt provision and, compared to 2015, benefits by $0.2 million in foreign exchange and more than $1 million in “research and development expenses” reduction (to $3.4 million).

Revenue was 2.5% lower, at $45.9 million, and after also particularly $0.7 million of tax paid, mitigated by a $4.2 million working capital improvement, net cash was increased by $3.4 million to $6.2 million. Current assets over total liabilities were though slightly lower – though still $16.8 million. The company also updates;

“The start of 2017 was quiet, but sales and orders strengthened markedly in February. The immediate outlook looks encouraging and the group continues to invest in strengthening the sales team in its key markets. The board therefore currently expects that 2017 will see IndigoVision report further progress… Progress to date, and the strong cash position, has encouraged the board to recommend… a final dividend of 3p per share is proposed, 20% higher than last year.”

Noted “falling prices across the market as a whole” somewhat concern, but the balance sheet in comparison to a current sub £14 million ($17.2 million) market cap and the stated “encouraging” immediate outlook suggest good value. With also though self-admitted “volatility which arises from the group's exposure to individually large projects”, there is clear risk but with the balance sheet backing there looks enough to justify a speculative buy.


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