SHARES in IndigoVision rocketed more than 16 percent yesterday after the Scottish video-networking specialist unveiled record profits and sales on the back of a global shift from analogue to digital surveillance systems.

The Edinburgh-based company, which is listed on the Alternative Investment Market and for several years has remained one of Scotland's technology hopefuls, posted a pre-tax profit of GBP2.04m for the year to the end of July, almost treble the GBP680,000 pre-tax profit it posted the previous year.

Marcus Kneen, Indigo's chief financial officer, yesterday enthused: "Our profits have been rising pretty fast over the past couple of years, but more than GBP2m is really something else. That's a real profit."

At the same time sales surged 37per cent to GBP18.4m, compared with GBP13.4m a year earlier.

Indigo, which employs 55 of its 118-strong global staff in Scotland, has reinvented itself since 2003, when its share price tumbled below 30p, changing its business model from licensing its technology to becoming a manufacturer and distributor.

Its shares peaked at more than 1000p last year - but they have been hit hard during the market volatility of the past 12 months.

None the less, Indigo's shares yesterday closed up 16.5 percent, or 70p, at 495p.

The company's products are based on its own technology, which provides customers with a complete digital video management system that comes with networked recorders, control units and small networked camera systems that allow high-speed, high-resolution video images to be sent over the internet.

Indigo has struggled in the past because of a general resistance to digital technology in the analogue-dominated security surveillance marketplace - but that resistance now appears to be waning.

Indigo reported a 51 percent increase in sales in North and South America to GBP5.5m. In Europe, the Middle East and Africa (EMEA), sales rose 45 percent to GBP10.2m.

Its technology is now fieldproven in critical applications throughout the world, demonstrating its robustness and the cost-effectiveness of internet protocol video.

Oliver Vellacott, the chief executive, said: "We are particularly pleased with the sales increases in the Americas of 51per cent and EMEA of 45per cent and to have tripled profits against a more difficult economic backdrop."