IndigoVision eyes bigger share of CCTV market

Published 1 October 2009

Scottish CCTV maker sees 60 percent surge in profits, offers maiden dividend; recent contracts have included an order for 1,000 cameras for the U.S.-Canadian border — the largest project in the world using high-density surveillance equipment

IndigoVision, the maker of Internet-based CCTV surveillance systems, shrugged off the worldwide economic downturn to announce a maiden dividend for investors and a 60 percent-plus surge in profits after striking a string of big global deals.

The Edinburgh-based company, which has helped provide security cover for three G8 summits and four Olympic Games and is fast becoming one of Scotland’s brightest technology stars, also said there was plenty more in the pipeline amid the steady global shift from analogue to digital surveillance systems.

The Scotland Herald’s Mark Smith writes that Indigo, whose systems are used in 31 airports around the world, as well as bus and rail stations, ports, 18 casinos, and throughout the education, health, retail, and government sectors in 80 countries, said “90% of this transition” from analogue to digital “is still to take place.”

Marcus Kneen, Indigo’s chief financial officer, told the Herald: “The growth this year has been exceptional, and while we are cautious because of the prevailing economic conditions, we believe growth will continue. We’re quietly confident.”

Pre-tax profits at the company, which employs 80 of its 130 staff in Edinburgh, climbed 60.2 percent to £3.3 million for the year to the end of July, compared with £2 million the previous year.

Revenues climbed to a record £26.4 million, against £18.4 million last time on the back of significant growth in North America, where sales doubled to £11.2 million, and by 50 percent to £3.9 million in the Asia-Pacific region.

Smith writes that Indigo has also benefited from a recession-fueled surge in shoplifting and fraud as firms ranging from John Lewis to casinos in Arizona and California and Butlins in Bognor Regis splashed out on state-of-the-art digital security systems.

Kneen added that its retail business was growing strong because Indigo’s systems not only provided surveillance and alarm systems, but measured footfall. Work with the petrochemicals sector is also increasing, with security deals on Sakhalin pipeline, the natural gas transport system in the Far East.

Notable recent contracts have included an order for 1,000 cameras for the U.S.-Canadian border — the largest project in the world using high-density surveillance equipment — and the Santiago metro in Chile, as well as airport security systems in Shanghai and Delhi.

Kneen also said Indigo had recently won a contract to provide digital systems in 700 branches of a North American bank. He said it was “too early” to announce the name of the bank.

The company’s products are based on its own technology, which provides customers with a complete digital video management system with networked recorders, control units, and small networked camera systems that allow high-speed, ultra-high-resolution video images to be sent over the Internet.

Indigo has struggled in the past because of a general resistance to digital technology in the analogue-dominated security surveillance marketplace - but that resistance now appears to be waning.

Kneen also said the company would this year continue to invest heavily in research and development — and while declining to be specific about the investment figure, he said it would be “significantly” more than the £2.3 million Indigo invested last year.

We have an aggressive expansion plan and we are investing heavily in engineering,” he said. “We have always invested heavily in R&D, and because of this we are often first to market. Our engineering team in Edinburgh does an absolutely world-class job. These are not the kind of systems you buy off the shelf. A large amount of our engineering is based on the needs of our partners and customers, which means we are able to respond quickly to demands for adds-on to systems and to specific needs.”

Meanwhile, shares in Indigo, listed on the Alternative Investment Market, yesterday fell 5.6%, or 40p, to 675p after profit-taking in the wake of more than a month of steady rises - although brokers believe they are worth 850p.

As to the maiden dividend — shareholders the other day were offered a 5p dividend — Kneen said: “We’ve had investors with us since the 1990s. I think investors should be rewarded.”