IndigoVision aims to boost workforce after sales soar
Company returns to profit after pricing changes and cost cuts
INDIGOVISION chief executive Marcus Kneen has said the video security firm expects to expand its engineering workforce in Scotland this year as it feels the benefit of action take to address tough market conditions.
Mr Kneen noted IndigoVision has enjoyed a big increase in sales volumes after expanding its range to appeal to a wider customer base.
The company moved to a pricing system based on having entry level, mid range and high end hardware systems in 2015. It applied the same approach to its software with great success last year.
“The available market has expanded considerably,” said Mr Kneen.
He added: “I am pretty confident that in the course of 2017 we will be increasing the number of engineers in Edinburgh.”
IndigoVision employs 92 staff in total in Edinburgh including head office workers.
It shed around four posts early last year under a plan to refocus spending on software rather than hardware engineering.
Asked if he was concerned about the implications of Brexit for the firm, which does lots of business overseas, Mr Kneen said: “It’s something that we keep an eye on, it’s a set of risks but there are changes in other parts of the world that represent risks.”
He added: “There’s still construction work going on, there’s still airports, there’s still improvements people are making.”
IndigoVision is likely to benefit from strong construction activity which will increase demand for security systems for buildings.
Mr Kneen was speaking after the London-listed company announced a return to profitability it said reflected management action.
The firm made $0.4 million (£0.32m) underlying profit in 2016 compared with a $0.7m loss in the preceding year.
He said: “The results for 2016 were a good improvement on 2015, notwithstanding falling prices across the market as a whole.”
Total revenues fell to $46m from $47.1m.
Mr Kneen noted the company’s move to tiered pricing formed part of the response to the challenges IndigoVision faced in 2015 as a result of the oil and gas market downturn and the fall in the iron ore price.
In its results for 2015 IndigoVision highlighted the impact of a fall in sales in countries such as Brazil, Canada and Australia which appeared to be related to commodity market developments.
Yesterday the company said sales in the Americas fell 19 per cent year on year in 2016, largely due to reduced activity in the oil driven economies of Latin America. Sales in the Middle East increased by 34 per cent.
The company said the UK performed well in pound terms but the strength of the dollar limited the impact on sales revenues, which the company reports in the US currency.
IndigoVision has moved to beef up its US sales function.
It felt the benefit last year of cost cutting moves made in 2015. Overheads fell seven per cent in 2016, to $23.2m from $25m in the preceding year, excluding foreign currency effects.
Noting the cost savings had been retained, Mr Kneen said the company expects to consolidate the increase in profitability this year with a view to investing in growth. “In the course of time we will have more engineers than we have ever employed,” he predicted.
IndigoVision declared a final dividend of 3p per share, against 2.5p last time.
Shares in the firm closed up six per cent, 10.5p, at 183p.
The firm said sales volumes of software licences, cameras and encoders increased by between 26 per cent to 28 per cent annually in 2016.
IndigoVision also noted a broadening of the camera range and the introduction of products with differing price points.