Interim Management Statement

RNS Number : 1564M

Vislink PLC

19 May 2010

 



Vislink plc                                                                                                                               

Interim Management Statement

Vislink plc ("The Group"), the global technology business specialising in secure communications products and services for the News & Entertainment, Law Enforcement & Public Safety, Marine & Energy markets, today publishes a trading update in respect of the financial period ending 31 March 2010.

Current trading

Trading for the first three months to 31 March 2010 has remained mixed and continues the trend we described at the time of the announcement of our 2009 full year results. Underlying revenue for the first quarter, which excludes revenue from the completed US 2GHz relocation programme, was 1 per cent up on the first quarter of 2009. Underlying order intake for the same period was down 15 per cent which will result in revenue in the second quarter being lower than in the corresponding period last year. The order backlog at the end of the first quarter was £17.6 million (31 December 2009, £20.3 million).

Growth in all our markets depends upon the economic recovery. We continue to see signs of this across the Group.  Our sales pipelines (being the total value of identified opportunities) have grown by around 15 per cent since January; however visibility as to when opportunities will be converted into orders remains opaque. 

Since the end of the first quarter we have converted some significant opportunities suggesting that market conditions may be slowly normalising. Our Law Enforcement & Public Safety business unit has been informed that it has won an order for over $5.5m million (£3.8 million) for digital microwave equipment for a US Federal agency and has just won an order in Europe for £0.2 million. Vislink Services has recently been awarded contracts worth £0.35 million for fixed earth station projects in Europe.

Corporate activity

The Group explored the possibility of acquiring a business in Asia to which it would have transferred much of its manufacturing and which would have provided a base for further expansion into the region.  We aborted the transaction in the light of discoveries at the end of due diligence.   The Group is now building its own sourcing and test capability in Singapore on the back of its current operations, which will lead to further improvements in product margins. These improvements together with the £2.1 million of overhead cost reductions made in January following the completion of the 2GHz relocation programme, underpin our drive to improve margins.

The costs of legal and accounting fees of the aborted acquisition will be reported in our interim financial statements and will be around £0.6 million.

Financial Position

With aborted acquisition costs, modest restructuring costs, investments in Asia and adverse foreign exchange movements from the Group's principal debt being held in US dollars, as a natural hedge against future cash flows, the Group ended the quarter with net debt of £1.6 million (31 December 2009: net funds of £0.6 million).

Summary

The Board remains confident about the prospects for the Group as the economy recovers. Sales pipelines are growing, although customer ordering patterns remain difficult to predict. As a result of the slow order in-take in the first quarter, the Board anticipates that the outturn for the first half of the year will be below that of the first half of last year, and the results for the year will be heavily weighted towards the second half.

Duncan Lewis,

Chief Executive

19^th May 2010

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For further information, please contact:

Duncan Lewis, Chief Executive                                                   01488 685500

James Trumper, Group Finance Director                                      01488 685500

Charlie Jack, Hudson Sandler                                                     0207 796 4133                                                  

About Vislink plc

The Vislink Group is strategically focussed on providing secure communication technologies to customers in its chosen markets. We specialise in wireless, video and IP technologies together with the supporting management systems. We have four international business units organised to serve its customers in News & Entertainment, Law Enforcement & Public Safety, Marine & Energy and the related Services markets. With offices in the UK, USA, Norway, Dubai, South Africa and Singapore we employ over 450 people worldwide and have net assets in excess of £50 million. Our products include the design and manufacture of microwave radio, satellite transmission, wireless camera and marine CCTV systems; our manufacturing operations are in the UK, Norway and the USA.

 

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