Vislink (VLK) chairman John Hawkins says the half-way mark “is less about results and more about strategy”. He’s referring to Vislink’s latest interim numbers, which are mixed at best, and his decision to shift the group's focus away from the flagging hardware division and towards the growing software business.
That shift explains the show-stealing deal with NASDAQ-listed group Harmonic Inc (US:HLIT), announced alongside the results. Harmonic has signed up to sell “special versions” of Vislink’s newly acquired Pebble Beach Systems software to the international broadcast market, placing an initial order worth £2m. Harmonic also snapped up 4m Vislink shares at a price of 50p each as part of the agreement. Mr Hawkins sees the share purchase as an important part of the transaction, as it cements a “strategic link” between the two companies.
Even as the software business rapidly evolves, Vislink's hardware division continues to suffer. In the first half, the numbers suffered from an uncertain broadcast market and delays to surveillance contracts. But Mr Hawkins expects a resilient second half, and the order book looked far stronger at the end of June - at £13.2m, up from £5.6m last December. A number of new products are also due for release, while lower hardware costs should boost underlying profitability.
Analysts at N+1 Singer expect pre-tax profits of £6.6m in 2014, giving EPS of 3.9p.
| VISLINK (VLK) | ||||
|---|---|---|---|---|
| ORD PRICE: | 44p | MARKET VALUE: | £ 50m | |
| TOUCH: | 44-45p | 12-MONTH HIGH: | 53p | LOW: 39p |
| DIVIDEND YIELD: | 2.8% | PE RATIO: | 13 | |
| NET ASSET VALUE: | 46p* | NET DEBT: | 1% | |
| Half-year to 30 June | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 28.0 | 1.4 | 1.3 | 0 |
| 2014 | 27.1 | 2.0 | 1.7 | 0 |
| % change | -3 | +43 | +31 | - |
Ex-div:n/a Payment:n/a *Includes intangible assets of £43.9m or 39p per share | ||||
