Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on VISLINK PLC. We currently have 25 research reports from 4 professional analysts.
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Shareholder approval sought for revised terms
19 Jan 17
Vislink has modified the terms of the agreement to sell the assets of Vislink Communication Systems (VCS). The total consideration payable remains $16m. This will now be split into an initial cash consideration of $6.5m and $9.5m deferred consideration payable in secured loan notes, which must be redeemed within 45 days of the disposal completing. Shareholder approval of the modified terms is required before the disposal can complete. We leave our estimates, which assume that VCS remains within the group, unchanged and will review them on completion.
Strong growth in software, hardware declining
21 Dec 16
Vislink has announced that trading for FY16 is in line with management expectations, with Q4 exhibiting the usual seasonal uplift. In addition, on Friday, it announced it had entered into a business purchase agreement to sell the assets of Vislink Communications Systems (VCS) for $16m, progressing from the informal agreement in principle announced in October, to a detailed formal agreement. The disposal remains conditional on shareholder approval. We leave our estimates, which assume that VCS remains within the group, unchanged and will review them when shareholder approval has been received.
Conditional sale of hardware division
28 Oct 16
Vislink has announced that it has entered into a conditional agreement to sell the assets of Vislink Communication Systems (VCS) for $16m. The transaction is expected to be subject to shareholder approval and to close by end FY16. The deal frees management to focus on the software division, which reported a strong increase in order intake during H116, in contrast to the hardware division where H116 revenues fell by 19%, taking the division and the group into the red. The deal also solves the debt problem, leaving the group substantially debt-free. Net debt had reached £8.8m at end June and in September the group was fully utilising its £15.0m revolving credit facility, potentially breaching bank covenants.
Opening a new chapter
21 Oct 16
A lot can happen in 1 ½ weeks. Firstly on the 12th October, Vislink announced that its broadcast software arm, Pebble Beach Systems (PBS), had traded strongly – reporting H1 order intake up 53% LFL. Then the following day, Finance Director (Ian Davies) resigned with immediate effect due to personal health-related reasons, with the shares hitting an all-time low of 8p. Finally the stock has almost doubled to 15.5p over the past 2 days, on the back of positive news that the Board has conditionally agreed to dispose of its hardware division, Vislink Communication Systems (VCS), to xG Technology Inc (Nasdaq: XGTI) for $16m (or c. £13m gross, representing 0.4x 2016 sales). We think xG Tech is a logical home for VCS, since it is already a leader in providing secure, always-on, wireless communications for many mission critical sectors, such as the armed forces, emergency services, public safety, telemedicine, etc. The transaction is subject to shareholder approval (date to be confirmed), and if authorised as anticipated, should close by the end of 2016. Proceeds (say £12m net) have been ear-marked to pay back the vast majority of the company’s £15m revolving credit facility with Santander - thus leaving the business “substantially debtfree”.
Decisive action being taken
30 Sep 16
Given July’s profit warning, Vislink’s interims this morning were never going to be pretty. H1’16 orders and turnover fell 21% and 15% respectively to £22.3m and £22.6m, reflecting ongoing difficulties at VSC (where sales dropped -18.5% to £17.2m) as broadcasters continued to divert budgets from infrastructure to content and transition to IP technologies (re delayed orders). Accordingly this pushed group adjusted EBIT to a loss of -£1.1m (vs £2.2m LY) - excluding £2.2m of forex gains which were credited to reserves - with net debt rising to £8.8m from £5.75m as at December. £1.9m of R&D was capitalised vs £1.6m of amortisation charged to the P&L.
Fast-forward on transition to software
28 Jul 16
Vislink has announced that FY16 performance will be materially below previous estimates because of weakness in the hardware division (VCS). Management has instigated a restructuring of this division, accelerating the transformation of the group into one where two-thirds of operating profits are derived from software activities. Progress executing this transformation should prompt a partial recovery in the share price.
20 Apr 17
TEP’s trading update for the year to March 2017 highlights modest growth as expected, with a total dividend of 48p (25p final dividend) in line (49pE). FY18 forecasts are trimmed 3% at adjusted PBT level, to remain in line with FY17, with better quality customers taking all possible services – at a higher cost of acquisition but better prospective year 2 margins. With the positive outlook that a narrowing of the gap between standard variable energy tariffs and aggressively priced introductory deals has led to an encouraging upward trend in Q4 to March, prospects for restored growth in revenue (FY18) and profit (FY19) are strong. Improved incentivisation of the self employed salesforce, after a few years of lower growth, is complemented by the imminent addition of Home Insurance, adding sales momentum and increased customer interest as utility prices rise. With the double upside to the £70m tender offer in summer, and the June release of FY19 forecasts illustrating growth following greater detail available at prelims, the future is brighter for TEP. Target 1360p reiterated.
Northland Capital Morning Report
02 Dec 15
Divergence looks set to dominate the final month of 2015 and set the tone for 2016. The European Central Bank is widely expected to extend its QE economic stimulus programme and could reduce its overnight deposit rate further in an attempt to boost inflation, and more stimulus could come from Japan and China. Meanwhile the Federal Reserve is now expected to lift rates from historic lows. Higher US rates will impact not only the cost of capital in the US but also emerging markets where growth remains much weaker and leverage high. The move by the ECB is unlikely to have a major impact, however, as it is an extension rather than a new tool and the headlines continue to be dominated by politics rather than financial markets (Isis, the refugee/migrant crisis, tensions between Russia and Turkey etc). The respective moves are likely to further weaken the euro in 2016. The UK sits somewhere in the middle. November’s Autumn Statement saw the Chancellor drop his tax credit reduction plans and benefit from a surprise £27bn improvement in the Office for Budget Responsibility’s five year public finances forecast, based on higher tax revenue and lower debt interest. The general shift away from austerity, the protection of tax credits and increased minimum wage should ensure further economic growth.
Strong performance in the non-legacy business
20 Apr 17
TomTom reported Q1 revenues of €212.7m, down 2% yoy and 19.9% sequentially. Consumer decreased by 16% yoy to €98m, representing the main down-mover. The three other businesses combined grew by 14.1% to €114.7m, with in decreasing order Automotive (€41.1m, +38.4% yoy), Telematics (€40.6m, +9.4%) and Licensing (€33m, -2.1%). The gross margin came in at 62.2%, up 540bp yoy, while the EBIT margin lost 30bp to -2.3% (-€4.8m). EPS came in at €-0.02 and adjusted EPS at €0.03. The company re-iterated its guidance for FY17 with adjusted EPS of around €0.25 and revenues of between €1,025 and €1,050m.
31 Jan 17
Alumasc (ALU): Interims show strong sales growth but some margin pressure (BUY) | Joules Group (JOU): Marginal increase to FY17E forecast (BUY) | CityFibre* (CITY): Prospects shine (CORP) | Nasstar* (NASA): Trading update (CORP) | SCS Group (SCS): LFL order intake slowed during Q2 (BUY)