It is often said that the quality of a business can be gauged simply by looking at its customer base. On this score Vislink must surely have a bright future. Long term clients include household names such as Al Jazeera and the Metropolitan Police – to which GoPro and Harmonic have been added over the past year - and more recently BT Sport, who in August teamed up with Vislink to televise (for the first time ever) a MotoGP World Championship event in Ultra HD/4K at Silverstone. Another major endorsement of the company’s capabilities by a tier 1 broadcaster.
Better still, we think UHD/4K could lead to the start of a significant new industry upgrade cycle (perhaps assisted too by the Olympics in Brazil and US Presidential Elections next year) - which together with the increasing need to deploy real-time mobile surveillance for public safety purposes (eg in UAVs, helicopters, etc) - should drive Vislink Communication Systems’ (VCS, representing 50% H1’15 profits) growth for the foreseeable future.
On top of this expertise in mission critical wireless video solutions, the group’s software division (Pebble Beach Systems) is also blazing a trail across the broadcast sector for the automated playout of content. Indeed Harmonic, its strategic partner in the US who white-labels PBS’ applications under the Polaris brand, praised the systems at its Q2 results in July, saying that they had already secured several contracts from a standing start only 9 months ago
We think these positive trends provide a strong backdrop for profitable growth – a fact borne out by today’s solid H1 numbers (EBITA up 26% to £2.2m) and the Board’s balanced outlook for the second half. Overall we expect H2’15 operating profit (see table below, in purple) to be £5.3m; not too dis-similar to last year’s £5.5m level.