Investors are yet to see the very best of Andor Technology, the developer and maker of high-performance digital cameras that floated on AIM a year ago, raising £4.5m at 90p.

Preliminary figures to September tallied with August’s profit warning, with EBITDA down 12% to £1.3m and pre-tax profits lower at £854,000 (£1.2m), despite Andor scoring record sales of £15.7m, an impressive 35% top-line hike.

Investment in R&D and a switch to a new purpose-built facility in Belfast held back profits, with short-term production delays during the shift over to semi-automated production delaying the delivery of some orders. However, more efficient production will cut costs and boost long-term productivity. Tellingly, production has already reached record levels over recent months.

Andor enjoyed double-digit sales growth in each of its core markets – such as the scientific research and the instrumentation OEM sectors – and has also made inroads into international space and security market. The group, which has always focused on ‘high-end’ cameras, is starting to compete with rivals in the mid-range camera market, a move that should open up new markets.

For September 2006, analysts predict pre-tax profits of £1.8m from a top-line £19m, giving earnings of 5.6p and a forward rating of 21 times. We feel there is more to come from Andor. Hold firm.