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Management reshuffle brings new focus to Image Scan

25 February 2009

News in early February that a possible sale was now off the cards at specialist x-ray equipment business Image Scan Holdings plc proved to be something of a red herring.

By confirming it was no longer toying with the idea of a deal, the company raised eyebrows among City folk and industry peers who pondered how it could ever have been considering the option in the first place.

Strong technology or not, given the inclement market conditions and depressed share price the premium on any sale would surely have been in doubt.

As it turned out, the news was coupled to the finishing touches of a strategic review at Image Scan and the point about a possible sale simply reflected some management box ticking, according to newly-appointed CEO Louise George.

Instead, a reshuffle of the top team has been completed, with Ms George moving from FD and previous CEO Nick Fox making the switch to head the company’s technical and business development interests. According to Ms George, the new set up means Fox can now focus on giving the company’s sales efforts the attention they deserve.

For 13 years Image Scan has been making sophisticated 2D and 3D x-ray systems that are used by industrial and security clients ranging from Johnson Matthey to the British Transport Police. Housed in a sophisticated R&D and office facility in Melton Mowbray in Cambridgeshire, the company supplies systems to customers around the world and is currently seeing significant interest from the Far East, with recent notable successes in China and India.

Despite not yet managing to notch up sufficient sales to breakeven, the company has over-achieved in some areas – notably in catching the attention of some big name clients. In summer 2006 it won a £1m contract to put in place quality assurance systems for British Nuclear Group and as recently as last December it won a £630k deal to supply baggage checking systems to China.

According to Ms George, the company’s ability to fight off top-tier competitors when tendering for these contracts is a reflection of the quality of its systems, the credibility of its listing on London’s AIM market and its ability to respond quickly to enquiries. However, she says it must now do far more to hone its sales and marketing operations – which will be a priority under the new management set-up.

In turn, the company has responded to the wider economic slowdown by cutting back on overheads and reducing headcount, largely by pulling down the number of R&D staff, but still with the intention of piling more resources into sales.

Early developments on the sales side look promising. A recent £200,000 order for x-ray equipment for use at the main railway station in Delhi has led the company to begin talks with potential partners in India ahead of a much stronger sales effort there. However, Ms George says the complexities of selecting the right partner are demanding some careful attention by the board.

The recent sales successes in China and India, coupled with a follow-up contract with Johnson Matthey in Japan have inevitably given the company renewed confidence in its abilities (as an independent entity). With a reinvigorated management team, slashed overheads and stronger sales focus, Ms George says the company is optimistic about its future.

www.ish.co.uk