Image Scan develops state-of-the-art 3D and 2D x-ray technology ‘solutions’ for a burgeoning band of customers. As well as inspection services for industry, its security portfolio includes a unique 3D baggage inspection system for airport security and a portable system currently in use by the British Transport Police for bomb and suspect-package detection.

Image Scan listed on AIM in 2002 to cash in on heightened security fears in the wake of 9/11. With hindsight, flotation occurred too early in the group’s development and it is only now that the pieces are falling into place from an investment point of view.

A pre-close update for the year to September ’06 highlighted strong trading, a torrent of recent orders and the likelihood of a move into the black this year. Turnover for 2006 exceeded £1.4m, representing 70% growth year-on-year, and annual losses were significantly reduced.

More importantly, the year-end order book had grown by 600% to £1.7m and loans have been deferred to free more working capital to service spiraling orders arising from contract wins including a £1m deal for x-ray inspection systems with British Nuclear Group. In a further major endorsement, the TSA – the United States transport sector purchasing authority – has extended its collaboration contract with the group, and claims Image Scan’s 3D x-ray imaging technology provides far better ‘threat detection rates’ than conventional 2D baggage inspection systems.

Bolder investors could profit on Image Scan, which boasts ingenious technology, is moving towards meaningful profits and provides a twin play on industry regulation and the worldwide demand for advance x-ray baggage scanning. Speculative buy.