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Andor raises growth expectations

07 Jun 2011

Manufacturer of high-performance cameras reports a 42% increase in revenue, and is further boosted by a record order for its 'Neo' product in DNA sequencing equipment.

Shares in Andor Technology, the high-end camera specialist spun out of Queen’s University in Belfast, UK, in 1989, have risen sharply after the company reported a strong increase in revenues, profit and its order pipeline.

In its interim results statement, for the six months ended March 31, revenues grew 42% to £28.3 million. Operating profit jumped by 40% to £4.5 million, with Andor electing to distribute a record £0.7 million in profit-related pay to its employees, of which there are some 260.

And after booking its largest-ever single order – a $2.1 million deal for the OEM version of the company's new sCMOS “Neo” camera to be used in DNA sequencing – Andor also reported an order book that has swelled 48% since last year and which now stands at £15.5 million.

Discussing the strong interim performance, CEO Conor Walsh said: "We have successfully taken the momentum from last year through into the first six months of this year, continuing to execute our strategy which is delivering returns for all of our stakeholders."

"We will stay focused on investment and innovation, ensuring that Andor remains a global leader in its selected markets capable of capitalizing on the numerous exciting commercial opportunities ahead of us."

Organic growth
The CEO will be particularly gratified that much of the business growth has been from the underlying organic business. That grew 33%, with recent acquisitions of Bitplane and Photonic Instruments contributing the remaining 9% sales increase compared with last year.

Measures previously taken to address a decline in systems sales are also bearing fruit, with Andor reporting an 86% increase in sales. When contributions from Photonic Instruments are counted, total systems revenues rose to £6.1 million, more than double the interim results figure in 2010. Andor said that it had now addressed problems with imaging software noted by customers, with the chairman and CEO reporting:

“We think this is a perfect example of what the team at Andor does well. Last year our customers told us we had issues with our imaging software. We analyzed the feedback from the market and quickly decided on the necessary course of action.”

“We allocated resource internally to deliver a series of new releases which have been well received. We increased the customer's choice by partnering with the current software market leader. We revisited our sales channels and expanded it in a number of regions using our established brand and network. Finally, we appointed the founder of Bitplane as our Group Director of Software, with the objective of elevating our software to be on a par with our hardware.”

Neo production ramp
Meanwhile, the unexpected level of demand for its Neo camera (see video below) has prompted Andor to add manufacturing capacity for the product – although demand is still outstripping supply. "All necessary steps have been taken to ramp up production and reduce lead times, which have reduced by four weeks during May," Andor said.

Sales of Neo are reported through Andor’s OEM business unit, where sales have grown 18% to £6.4 million. As well as the record order for its incorporation in DNA sequencing equipment, Andor says that it has received another order for 100 cameras to be used in a Raman spectroscopy application.

Andor's management said that it now expected full-year business to exceed previous guidance issued in March, news that sent the company’s stock price up nearly 10% to around 533p in early trading on the London Stock exchange on June 7.

"There is a momentum in the business that gives us confidence looking to the full year and beyond,” said the management team. “We have expanded our distribution channels, adding some of the largest players in the industry, and this has introduced new customers that would not have been exposed to Andor in the past."

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