20th May 2025 11:51
(Alliance News) - Image Scan Holdings PLC on Tuesday said its loss widened in the first half of its current financial year, as delays to a significant defence contract weigh on its earnings and outlook.
Shares in Image Scan were down 17% at 1.38 pence each in London on Tuesday morning. The stock is now down 19% over the past year.
The Leicestershire, England-based provider of X-ray screening systems said its pretax loss widened to GBP422,000 in the six months that ended March 31, from GBP120,000 the year before.
Revenue falls 68% to GBP350,000 from GBP1.1 million, while operating expenses are reduced by 8.8% to GBP630,000 from GBP691,000.
The decline in earnings was largely driven by ongoing delays in the "substantial" defence contract that Image Scan secured during the prior year, the company said.
Image Scan in October 2024 finalised a contract for the supply of its ThreatScan X-ray system with UK defence contractor NP Aerospace Ltd. The contract is worth about GBP3 million over its 36-month term. Revenue from the deal was initially expected during the first half of the year, but has not yet begun.
"The progress of this contract remains outside of our control, which is a source of uncertainty and frustration," Image Scan said.
The company's order book stood at GBP4.7 million on March 31, Image Scan added, up from GBP759,000 a year prior.
"H1 performance is disappointing...The current geopolitical situation and the resulting uncertainty have further affected budgets and customer decisions, adding to these challenges," said Chief Executive Officer Vince Deery.
"While we are optimistic about our opportunity pipeline, which includes some significant prospects, the timing of both these opportunities and the delayed defence contract introduces uncertainty into our view of our full-year performance.
"We are continuing an active program to promote and demonstrate our broader product range, alongside careful cost management. We believe this will position us strongly to capitalise when the delays to the large defence contract are resolved and global market conditions improve."
By Emily Parsons, Alliance News reporter
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