Opening a new chapter

​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 conditio...

Decisive action being taken

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...

Update: Fast-forward on transition to software

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.

2016 to be 'materially below estimates'

​Vislink is a market leading, video capture and playout provider to the broadcast industry. Its cutting edge technology enables the collection of high quality live video, wirelessly, from the "scene to the screen".Unfortunately it appears our views earlier this year were too optimistic, after news yesterday that Vislink's hardware division (VCS) had traded materially below forecasts in H1'16, due to much tougher conditions across the patch, coupled with delays in launching some new products.As...

Update: FY15 - a year of transition

Vislink’s FY15 results show management taking action to rebalance the group towards software-related activities in response to structural changes in the global broadcast industry. These actions had an adverse impact on FY15 pre-exceptional and reported profit, but position the group to take advantage of the growth segments in the broadcast industry.

2016 diluted EPS set to jump 20.7% to 3.6p

​Vislink is a market leading, video capture and playout provider to the broadcast industry. Its cutting edge technology enables the collection of high quality live video, wirelessly, from the "scene to the screen". Its 3 core markets are broadcast hardware (68% of 2015 sales; news, sport and entertainment), surveillance equipment (13%; law enforcement, armed forces and public safety), and studio broadcast software (19%, or Pebble Beach Systems).Given the recent bounce in equities since mid-Feb...

Update: Orders for new IP products slipping into FY16

Vislink has announced that the timing of some VCS (hardware division) orders may slip from FY15 into FY16. It has also announced that is in the advanced stages of a small software acquisition. While it is still possible that our previous FY15 revenue estimates may be achieved, we take a prudent stance, revising our estimates and indicative valuation.

Update: Strategy continues to deliver profits growth

Vislink’s H115 results confirm the transformative impact of the Pebble Beach Systems (PBS) acquisition, which has improved both visibility of earnings and operating margin. Noting the improved hardware operating margins resulting from restructuring the manufacturing activities, we leave our adjusted pre-tax profit estimates unchanged, while reducing revenue estimates to reflect subdued broadcast hardware sales during the first half. We therefore continue to see fair value at 75p, even though t...

Outlook: An evolving point of view

Vislink has delivered the ambitious profits targets management set itself when embarking on its current strategy in 2011. This successful strategy has improved cash generation, visibility of earnings and operating margin. Crucially it has established a platform for expansion into a substantially larger available market to support further profits growth. Our estimates reflect an increased proportion of revenues generated by the highermargin software business and continue to see fair value at 75p.

Update: A new point of view

Since 2011 Vislink has pursued a successful strategy to expand outside its core broadcast contribution sector. The strategy has delivered the ambitious profits targets management set itself – improved cash generation, visibility of earnings and operating margin, and established a platform for expansion into a substantially larger available market to support further growth. We revise our estimates to reflect an increased proportion of revenues generated by higher margin software business and no...

Update: Software acquisition drives profits upgrade

Vislink has issued a trading update for the year ended December 2014. Management now expects operating profit (adjusted for the amortisation of goodwill and acquired intangibles and other non-recurring costs) to be ahead of market expectations.

Update: Live video that captivates

Looking at the short term, the interim results indicate Vislink remains on track to achieve management’s stated target of £8m adjusted annualised operating profit by end 2014. Longer term, the recent strategic partnership with Harmonic emphasises the significance of management’s decision to expand outside the core broadcast hardware market through the acquisition of software vendor Pebble Beach Systems (PBS) in March 2014. We continue to see fair value at 70p.

Institutional Comment: Daily comment

Flash note: Vislink to partner with Harmonic Inc

The interims indicate that Vislink remains on track to achieve management’s stated short-term target of £8m adjusted annualised operating profit by 2014. The new strategic partnership with Harmonic emphasises the significance of management’s decision to expand outside the core broadcast hardware market through the expansion of software vendor Pebble Beach Systems in March 2014. We leave our estimates broadly unchanged and continue to see fair value at 70p.