It didn’t take long for investors to find out whether Avigilon’s (TSX:AVO) momentum as a private company would continue as a public one.
On Monday, less than a week after the Vancouver based maker of high-definition surveillance cameras and equipment began trading, the company released its Q3 2011 results.
The numbers reveal a company showing few signs of slowing down. Avigilon’s Q3 revenue was $15.1 million, an increase of 82% over Q3 2010 revenue of $8.3 million. Margins were up too, if less dramatically, to 45.7%, from 45.5% in Q3 2010. The company is on pace to do about $60 million in revenue this year, after recording just $5.2 million in 2008.
The recent riots in London and Vancouver this past year were, of course, unrelated. But each dramatically underscored one of the main sources of demand for improving the quality of video surveillance. While camera phones are ubiquitous, Avigilon’s digital video is crisp enough to be useful in circumstances where facial recognition is a must. Security is a major driver for the adoption of higher quality cameras, and Avigilon aims to be a reliable low cost provider.
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Avigilon’s first opportunity to address the capital markets was in the form of a conference call to discuss its Q3 Monday. On that call, CEO Alex Fernandes made it clear that pushing the company’s revenue numbers, not its earnings, is his main priority right now. “Maximizing bottom line is not a primary focus” he said, adding that the “time is right for the company to increase market share.” Fernandes points to a market for Avigilon’s products that is growing rapidly, citing forecasts that say video surveillance is a $16 billion Market that will nearly double to $29 billion within four years. He pointed out that 80% all video surveillance cameras are analog, leaving lots of room for the kind of growth the company has grown used to.
One recent report from Electronics.ca Publications called Global Video Surveillance Market, Applications and Management Services Forecasts is even more bullish, estimating that the global market for video surveillance will reach $37.7 billion in 2015.
Fernandes says the video surveillance market is highly fragmented right now, which makes the timing of the company’s IPO important, because he believes the increased financial stability that comes with the IPO will help it in the eyes of customers. Avigilon raised $20 million by selling 4,444,446 of its shares at $4.50. It will use this money, says Fernandes, to increase its market share and visibility. The company will hire more salespeople, increase the number of reseller partners and double its product development team. It will also try and expand its reach to places like India, China and Latin America, where it currently has little presence. Most of the company’s sales are in North America, such as its recent $2.3 million order from a large airport in Texas, the company’s largest sale to date.
Avigilon’s IPO is the third high-profile IPO of a Canadian tech company this year, joining Toronto’s NexJ Systems (TSX:NXJ), which raised $43.6 million in May and Burlington’s Ecosynthetix (TSX:ECO), which completed a $100 million IPO in August.
Shares of Avigilon closed Monday up a penny to $4.53.
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