Keep watching Indigovision

Keep your eye out for Indigovision’s interim results 10 March 2011 (also the date for Avesco’s AGM).

I bought shares in Indigovision several years ago for 62p and sold a third of my holding some time ago at just over £9 per share. Daft though it might sound, even though the share price has fallen well below those giddy heights, in the longer term I might regret selling any at all. We shall see.

Indigovision is a leading IP-CCTV company that has achieved outstanding growth over a relatively short period of time. When I bought into Indigovision, revenues were around the £2m mark with losses to match. I’d like to say that I could see the huge potential for the company, but that would be dishonest. I originally invested because its market capitalization was around two thirds of its current assets (which included a substantial cash element), and I thought that if it doesn’t make it then the chances are it will be taken over. One other swaying factor was that they had won the contract for the Athens Olympics. Not bad for a tiny loss-making Scottish technology company.

Indigovision has of course gone on to prosper and become a very profitable, debt free company with a hugely impressive global client list. Dividend payments have also been introduced.

It’s a terrific growth story and yet Indigovision’s p/e ratio is very modest indeed (compared with other growth companies), and I am hopeful that 2011 will see a marked increase in revenues and profits with a consequent re-rating and substantial uplift in the share price.

At the very least, if revenues and profits disappoint then I wouldn’t be surprised to see opportunists start sweet talking Oliver Vellacott and the board of directors, perhaps leading to an offer substantially above the current share price.