Interim Management Statement and Strategy Update

RNS Number : 6376R

Vislink PLC

08 November 2011

 



Vislink plc                                                                                                                               

Interim Management Statement and Strategy Update

8 November 2011

Vislink plc ("The Group"), the global technology business specialising in high performance communications products and services for the News & Entertainment and Law Enforcement & Public Safety markets, today publishes a trading update in respect of the financial period ending 7 November 2011. In addition the Board is today announcing an overview of the Group strategy for the next three years.

Trading

The Group traded in line with management expectations for the quarter ended 30 September 2011; in particular we traded at an unaudited adjusted¹ operating profit in the quarter of £0.6 million compared with an adjusted¹ operating loss in the first six months to 30 June 2011 of £1.9 million.

Group revenue for the quarter was £14.8 million (2010: £11.9 million). Underlying revenue, being revenue excluding revenue from Gigawave, was up 6 per cent at £12.6 million. Orders received in the period were £14.4 million (2010: £13.0 million). Year to date underlying orders received are 9 per cent up on 2010 at £36.2 million (2010: £33.1 million) whilst total orders received year to date, including the contribution from Gigawave, were £39.5 million. At 30 September 2011 the order book was £15.0 million (30 June 2011: £15.4 million). We have seen increased demand for our broadcast products in the Middle East and South America.  The Group is on track with its restructuring, cost reductions and margin improvement plans.

The Group held net cash of £8.2 million at 30 September 2011 (30 June 2011: net cash of £9.2 million). Since 30 June 2011 the Group has paid the annual dividend to shareholders that accounted for £1.4 million of cash outflow.

Note

¹ Defined as operating profit/loss  before the amortisation and impairment of goodwill and acquired intangibles, and other non-recurring costs.

Financial position

There have been no significant changes in the financial position of the Group since the announcement of the half-year results at 30 June 2011 save for the information contained within this Interim Management Statement.

The Board

The Board has been strengthened by the appointment of two experienced non-executive directors on 1 October 2011; Andrew Sleigh and John Varney.

Andrew Sleigh has extensive research, technology and leadership experience within the defence sector, working primarily within the Ministry of Defence and later as part of the management team that in 2001 created QinetiQ as a private sector company. Andrew was the Group Managing Director of the Defence and Technology sector at QinetiQ plc and subsequently went on to become the Group Technology Officer.  He left QinetiQ plc in 2009 to pursue an advisory and portfolio career.  Andrew currently holds several advisory positions, including Vice Chair to the European Advisory Group for security research.

John Varney has spent 35 years in the broadcast industry, including Director of Technology and Chief Technology Officer for Granada.  Between 2002 and 2006 he was Global Chief Technology Officer at the BBC, where he oversaw major engineering changes both at the Corporation and in the wider broadcast engineering market.  As a respected executive in the industry, he has spent the last five years working as an advisor and NED for emerging technology companies, combined with work across a broad range of organisations both inside and outside the broadcast sector.  John is a member of OFCOM's Advisory Committee for England.

Strategy

The Board, including the new non-executive directors, has undertaken a full review of the business including an assessment of growth opportunities and technology drivers.

The core competence of Vislink is in the collection and delivery of high quality video and associated data from the field to point of usage. Vislink provides solutions to two core markets: the broadcast market for the collection of live news, sport & entertainment events and  the video surveillance market including law enforcement & public safety customers.

The Group will continue to exploit the strengths of our established brands - Advent, Gigawave, Link, MRC and PMR. We will also maintain investment through our core product development programme, particularly in IT based technologies such as IP transport over 3G/4G and WiFi infrastructures.

The Board believe that the Group is capable of exploiting the continuing growth of video content contribution both in its traditional broadcast markets and also in other vertical markets, providing the technologies for surveillance applications, which will be achieved through partnerships.

Vislink currently has the widest product portfolio in the broadcast contribution sector and is the number one supplier in what is today a fragmented market. Our market share currently is circa 20% of the global market which is estimated to be c.£230 million and projected to grow to c.£270 million by 2015.

We will continue to maintain our market-leading position with the provision of wireless video delivery and miniaturisation as demonstrated through our on-board applications in Formula 1, the Americas Cup and Moto GP. Our products maintain leading edge capabilities, tracking the trends in use of 3G/4G and IP gateway delivery technologies. We wish to extend the use of our technologies, principally through partnerships, into the semi-professional and pro-sumer market.

We plan to leverage our technologies into the surveillance markets beyond our existing Law Enforcement and Public Safety customers, where we are already a leader in airborne video surveillance applications used in helicopters, the associated command and control support vehicles and hand held devices. For example there is a growing demand for unmanned aircraft and other vehicles where our expertise in providing wireless video contribution is transferable. We plan to access these opportunities through partnerships. Furthermore we have identified applications for our products in defence, mining and utility verticals that provide incremental revenue opportunities beyond our core broadcast and surveillance business.

We will create a software and services culture within the Group allowing us to build recurring revenues into our business model - our intention is to build more of a solutions, services and software offering to our customers. This will take us time to build but ultimately will provide the recurring revenues and visibility that our current business model does not provide us with. We will also seek "bolt on" acquisitions to strengthen our software and services capabilities exploiting the growth of cloud based IP transport technologies and content tagging.

The financial goal is for profitable growth to £80 million of annualised revenues within 3 years (2010: £43.1 million) with an adjusted operating margin of 10%.

Summary

The improved order intake for the Group provided us with an order book of circa £15.0 million at the start of the fourth quarter. We remain optimistic that the final quarter of 2011 will show further improvement in trading; our key performance metrics are continuing to move us forward in a positive direction. The Group has strengthened the Board with the addition of two new non-executive directors, John Varney and Andrew Sleigh, both of whom provide an in depth knowledge of the broadcast and surveillance markets. They have already contributed to the formation of our strategy review and three year plan. The Group is returning to profit and has net cash. We have a realistic strategy which will provide long term growth and generate positive shareholder value.

 
John Hawkins

Executive Chairman

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For further information, please contact:

John Hawkins, Executive Chairman                                 [phone]

James Trumper, Group Finance Director                          [phone]

Charlie Jack, Hudson Sandler                                         [phone]                                                  

About Vislink plc

Vislink plc is a global technology business specialising in the collection and delivery of high quality video and associated data from the field to point of usage. Vislink provides solutions to the broadcast market for the collection of live news, sport & entertainment events and to the video surveillance market including law enforcement & public safety customers. With offices in the UK, USA, Dubai, and Singapore we employ over 280 people worldwide and have net assets of £50 million. Our solutions include the design and manufacture of microwave radio, satellite transmission, wireless camera and marine systems; our manufacturing operations are in the UK and the USA.

The Company is fully listed on the London Stock Exchange (LSE:VLK). For further information, visit www.vislink.com.

Forward looking statements

Certain statements in this report are forward-looking. Although the Group believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurance that these expectations will prove to have been correct. Because these statements involve risks and uncertainties, actual results may differ materially from those expressed or implied by these forward-looking statements. The Group undertakes no obligation to update any forward-looking statements whether as a result of new information, future events or otherwise.

 

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