Orders for Vislink's (VLK) high-tech broadcast and surveillance equipment rocketed by a third during the first half to £33.6m and adjusted pre-tax profit rose 43 per cent to £2m. Analysts at N+1 Singer have upgraded earnings forecasts for next year by 22 per cent following the acquisition of Amplifier Technology (AT), which makes 'jammers' for the defence and surveillance market. With further bolt-on acquisitions highly likely, further upgrades are, too.
Having spent £2m of its £7.2m period-end cash pile on AT, N+1 Singer expects Vislink to report full-year adjusted pre-tax profit of £4.2m and EPS of 2.7p, up from £3.1m and 2.5p in 2012, rising to £5.9m and 3.6p next year. AT makes money, but Vislink needs more to hit its year-end 2014 target of £80m in sales and £8m of adjusted operating profit.
Sales at the core broadcast division fell slightly to £23.5m, despite a big order from the Middle East, and new products must drive growth here. Yet, surveillance revenue leapt 35 per cent to £4.5m, and demand is growing fast, especially in South America, where Mexico needs help patrolling its borders and Brazil is fighting smugglers in the Amazon. And, despite flat US sales, the decision-making process there is speeding up slightly. Elsewhere, a new strategic partnership with C-Com Satellite Systems could open up opportunities in the oil and gas sector. Expect first benefits next year.
VISLINK (VLK) | ||||
|---|---|---|---|---|
| ORD PRICE: | 42p | MARKET VALUE: | £47.8m | |
| TOUCH: | 41-42p | 12-MONTH HIGH: | 43p | Low: 24.4p |
| DIVIDEND YIELD: | 3% | PE RATIO: | 16 | |
| NET ASSET VALUE: | 42p* | NET CASH: | £7.2m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 27.5 | 0.73 | 0.50 | nil |
| 2013 | 28.0 | 1.42 | 1.30 | nil |
| % change | +2 | +94 | +160 | - |
*Includes intangible assets of £29.6m, or 26p a share | ||||
