Image Scan

In a disappointing update that decimated an already low share price, x-ray imaging group Image Scan warned of losses of £600,000 for the year to September, wider than the £500,000 deficit incurred in 2006.

The company behind an innovative baggage inspection system for airports as well as a portable bomb and suspect package detection system favoured by the police said second-half order conversion disappointed. As a result, an order book worth £1.7m at the start of the year fell to a half-year £945,000 and is expected to fall further by year-end, with some sales simply failing to materialise and two major orders ‘lost’.

As chief executive Nicholas Fox explained: ‘The scale of the orders at the start of 2007 precluded us from pursuing and responding to enquiries within appropriate timescales.’ The enthusiastic Fox is looking to strengthen and restructure the group’s internal structure. He is firmly in charge of sales in the wake of the surprise resignation of sales director Robin Higgons in July, insists prospects are increasing globally and sees good growth over the next 12 to 18 months.

Investors can take some comfort from the fact that annual turnover should be north of £1.5m, above last year’s £1.4m, and year-end cash will be circa £1.4m following a £3m fundraising at 15p in June. Though its technology has the wow factor, this perennial loss-maker will need to go some to restore battered investor confidence. Avoid.

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