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IndigoVision – trading update, shares good value?

By Steve Moore | Friday 2 December 2016

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 video security systems group IndigoVision (IND), I concluded that although a market cap of sub £11.5 million suggested there potentially good value, trading concerns saw it for now remain on the watchlist. The following updates on the back of a “Trading Update” announcement.

This reports second half year revenue higher than in both the first half and the corresponding period in 2015 and that “after losses in the first half… expects to report a profitable outcome for the year to 31 December 2016 as a whole… The group expects to finish the year with an improved net cash balance year-on-year (2015: net cash of $2.8m)”.

I look forward to the results detail – having noted that much of the reduced half-year loss was found in a reduction in R&D expenditure and swing in foreign exchange and that cash increased whilst current assets over liabilities reduced. The company reports “the working capital improvements previously reported have been maintained”.

The half-year balance sheet saw me note there potentially good value here, but I was wary that “the timing of a number of customer projects remains uncertain”. The company also now updates that it “successfully launched its tiered Control Center video management software as planned on 1 November 2016. This expansion of the software range is expected to widen the available market opportunities for the group and reduce, over time, the volatility arising from larger, project-related sales”.

This is thus something to monitor going forward, but for now, with the shares little changed on my prior update and ahead of updates providing further trading and financial comfort, the stock remains on my watchlist.

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