A sharp drop in orders during the fourth quarter and decision to strip out a number of delayed US government contracts took some of the gloss off Vislink’s (VLK) first annual profit since 2008. Order intake at the broadcasting and surveillance equipment specialist fell 5 per cent last year to £50.1m and the order book more than halved to £5.2m. Still, this is lumpy rather than cyclical work and a strong pipeline of orders suggests further growth in 2013.
N+1 Singer certainly thinks so. Cost-cutting, new products and a full contribution from the acquisition of Gigawave generated a bigger than expected underlying operating profit of £3.1m, but the broker expects Vislink to make £4.1m this year and adjusted EPS of 2.65p (2.51p in 2012). Clearly, sales of Gigawave’s on-board cameras and transmitters for broadcasting motor racing events helped earnings. Revenue jumped a fifth in the UK and Europe to £37.8m and profit doubled to £4.9m. Crucially, the US division swung to a £0.4m profit on cost-cutting and US Presidential election business.
Vislink’s smaller surveillance division also felt the Gigawave effect, although its new lightweight satellite terminal MSAT chipped in most following first sales to the UK military. Sales jumped a quarter to £10.1m and special forces elsewhere are interested. Next year’s World Cup in Brazil and the Olympics there in 2016 should be lucrative, too, and the switch to 4G and upgrades to HD will force broadcasters to buy new kit. And look out for more acquisitions given Vislink still wants £80m of revenue and make a £8m profit in 2014.
VISLINK (VLK) | ||||
|---|---|---|---|---|
| ORD PRICE: | 31.5p | MARKET VALUE: | £35.9m | |
| TOUCH: | 31-32p | 12-MONTH HIGH: | 37p | LOW: 24p |
| DIVIDEND YIELD: | 4.0% | PE RATIO: | 17 | |
| NET ASSET VALUE: | 42p* | NET CASH: | £8.1m | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 101.0 | 0.6 | -1.1 | 1.00 |
| 2009 | 53.7 | -6.1 | -0.6 | 1.25 |
| 2010 | 43.1 | -21.7 | -14.1 | 1.25 |
| 2011 | 50.3 | -3.6 | -2.6 | 1.25 |
| 2012 | 57.2 | 2.2 | 1.9 | 1.25 |
| % change | +14 | - | - | - |
Ex-div: 26 Jun Payment: 19 Jul *Includes intangible assets of £28.7m, or 25p per share | ||||
