Posts Tagged ‘John Hawkins’

Vislink Revenue Declines 15% in 1H 2016; Forecasts Breach of Debt Covenants

Analysis, Broadcaster Financial Results, Quarterly Results | Posted by Josh Stinehour
Oct 05 2016

UK-based Vislink plc, which owns broadcast industry brands Advent, Link, MRC Gigawave, and Pebble Beach, announced results for the first half of 2016.  1H 2016 revenue was £22.6 million, a decline of 15% versus the first half of 2015.  vislink

Vislink was anticipating challenging results for the first half of 2016 having published a negative trading update on July 6, 2016.  The trading update warned sales in Vislink’s Communication System (“VCS”) business were below management expectations.  In addition, the July update indicated the further restructuring of VCS would necessitate a non-cash write-off of £6 – £9 million and additional annual cost reductions of £1 – £2 million.  This adds to last year’s restructuring of the division when headcount was decreased 26% and a £2.5 million charge was incurred.

The underperformance of VCS caused Vislink to consume its entire banking facility and will subsequently force Vislink to breach its debt covenants.  Once Vislink is officially out of compliance with its financing arrangements, the Company’s bankers may call for repayment of existing loans – which Vislink does not have the cash to repay.  While this represents a material uncertainty for the Company, Management did indicate it is engaged in constructive discussions with its bankers.

In order to improve cash generation, Vislink’s management is canceling the Company’s dividend until debt drop below EBITDA, canceling its equity incentive program for senior management, and will “continue to examine the appropriateness of the Board and Group structure.”

The announcement has resulted in a greater than 50% decline in Vislink’s stock price decline from close on September 29, 2016.  Measured against Vislink’s 52 week stock price, the decline is greater than 75%.

Net loss for the first half of 2016 was £32.2 million or 26.9p per share, compared to a net loss of £0.9 million or 0.4p per share in the year-earlier period.

1H 2016 operating loss was £32.0 million versus an operating loss of £0.8 million during 1H 2015.  Operating losses included non-cash write downs of £23.3 million for goodwill and acquired intangibles as well as a write-down of £6.3 million of inventory and capitalized development costs.

A majority of Vislink’s goodwill write-down was associated with the Broadcast division (excluding Pebble Beach).  The entire £20.6 million of goodwill for Vislink’s Broadcast division was written down.

Given the magnitude of the non-cash items it is informative to review operating cash flow for the period.  During the first six months of 2016 operating cash usage was £1.2 million, compared to generation of £0.8 million during the first half of 2016.

The results for the first half benefited from a positive £2.2 million foreign currency translation based on a weaker GBP.

Broadcast Performance:

Vislink’s broadcast revenue for the first half of 2016 was £20.6 million, a 7.6% decrease versus broadcast revenue in 1H 2015.  The decline was primarily related to an 18.5% year-over-year drop in the revenue of Vislink’s Communication Systems (“VCS”) business.

Management attributed the decline in VCS to a combination of a general pause in spending ahead of the adoption of next-generation technologies and a reduction in spend from broadcasters driven by a diversion of budgets from infrastructure to investing in content.

Pebble Beach revenue for 1H 2016 was £5.4 million, a slight decrease of 1.4% when compared to the first half of 2015.  In the commentary accompanying the earnings release, the Company highlighted a 53.3% growth in Pebble Beach’s order book to £5.4 million during the 1H 2016 (1H 2015: £3.5 million).

Revenue by Region:

  • Revenue from the UK & Europe region was £7.6 million during the first half of the year, an increase of 20.1% over the first half of 2015. The UK & Europe represented 33.6% of total revenue for the first six months of the year, versus 23.7% in the same period of 2015.
  • Revenues from the Americas were £7.9 million, a 27.4% decrease against 1H 2015. On a percentage basis, Americas was 35% of total revenue for the first half of 2016, down from 40.6% in 1H 2015.
  • First half 2016 revenue from the Middle East and Africa (MEA) was £3.2 million, down 3.2% versus 1H 2015. The MEA region represented 14.2% of revenue in 1H 2016, up from 12.4% during the first half of 2015.
  • APAC revenue in 1H 2016 was £1.9 million, up 4.1% versus the comparable 2015 period. APAC revenue was 8.4% of total revenue in 1H 2016, up from 7.1% in 1H 2015.

Operating Expenses by Function:

  • R&D expenses recognized in 1H 2016 were £3.6 million, a 29.5% increase over 1H 2015. As a percentage of revenue, R&D expense was 16.1%, a substantial increase from the 10.6% in 1H 2015.  During the first half, Vislink wrote down £0.8 million of capitalized R&D investment.  Management did not identify the associated products or technologies associated with the write down.
  • Sales and marketing (S&M) expenses were £4.6 million, a slight rise of 1.4% against 1H 2015 S&M expense level. On a percentage basis S&M was 20.2%, an increase over the 17.0% of revenue from 1H 2015.
  • Administrative expenses were £2.9 million, a decrease of 28% versus the first half of 2015.

Cash and Debt Levels:

Vislink had a cash balance of £3.1 on June 30, 2016, down from £3.2 at the end of 2015.  During the same time period, the Company’s debt balance increased to £12.0 million from £9.0 at the end of 2015.  These developments have increased Vislink’s net debt to £8.8 million.  This compares to net debt levels of £5.7 million at 2015 year end and £1.2 million at the end of the first half of 2015.

In the release Management indicted debt has increased further since the end of the June and Vislink is now using its entire Revolving Credit Facility of £15.0 million.

Business Outlook:

Vislink’s order book at June 30, 2016 was £11.4 million, an increase of 60.5% over the same date last year.

In their prepared remarks Management discussed the organic growth of Pebble Beach, its pipeline of software bolt-on acquisitions, and its continued focus growing Vislink’s software business.  The below slide is taken from the Vislink’s presentation on the first half results.

 

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“We continue to see significant underlying organic growth in our software business with a strong order intake which has carried through into H2.  The long term prospects for Pebble Beach Systems continue to improve as we augment our core enterprise software solutions with cloud enabled software applications. We also have a pipeline of partners and software bolt-on acquisitions which will further enhance the Group strategy of building a high margin, cash generative software business” said John Hawkins Executive Chairman of Vislink.

 

 

Related Content:

Press Release on Vislink 1H 2016 Results

Management Presentation on Vislink 1H 2016 Results

Trading Update on Vislink 1H 2016 Preliminary Results

 

 

© Devoncroft Partners 2009-2016.  All Rights Reserved.

 

 

Vislink Reduces Headcount 26% in Communications Division. Reports 2015 Results.

Analysis, Broadcast technology vendor financials, Quarterly Results | Posted by Josh Stinehour
Mar 25 2016

UK-based Vislink plc, which owns broadcast industry brands Advent, Link, MRC Gigawave, and Pebble Beach, announced full year 2015 results.  2015 revenue was £57.8 million, a decline of 6.7% versus 2014 revenue. vislink

The revenue decline was attributable to Vislink’s surveillance business, which completed a large one-time order in the first half of 2015.

Net income for 2015 was (£0.9) or (0.7p) per share, compared to net income of £3.7 or 3.2p per share in 2014.

2015 operating income was (£0.8) versus operating income of £5.5 during 2014.  It is important to note management capitalizes a portion of R&D expense, which is therefore not reflected in the current period’s operating expenses and instead amortized over future periods.

R&D expenses recognized in 2015 were £5.8, a 3.6% increase over 2014.  As a percentage of revenue, R&D expense was 10%, a slight increase from the 9% in 2014.  The increase was attributable to the addition of a full 12 months of Pebble Beach (acquired in March of 2014).

Sales and marketing (S&M) expenses were £9.4, a rise of 6.8% against 2014 S&M.  On a percentage of revenue basis S&M was 16.3%, an increase over the 14.2% of revenue from 2014.

Administrative expenses were £6.1, a decrease of 10% versus 2014 levels.  The decrease in administrative expenses was the result of a restructuring of the Vislink Communications Systems division.

Headcount for the Communications System division decreased from 250 at the end of 2014 to 185 at the end of 2015 – a 26% decline for the year.  The Company incurred a charge of £2.5 related to the restructuring.

In contrast, the headcount of Vislink’s Pebble Beach increased from 63 at the start of the year to 75 at the end of the year.

Vislink ended 2015 with a cash balance of £3.3, down from £8.4 at the end of 2014.

Broadcast Performance:

Vislink’s broadcast revenue for the 2015 year was £50.2, a 9% increase versus broadcast revenue in 2014.  The gain was primarily related to the inclusion a full 12 months of Pebble Beach.

Pebble Beach revenue for 2015 was £10.9 million.  Vislink acquired Pebble Beach in March of the 2014, so year-over-year comparisons are not appropriate.  During the earning release, management highlighted a $2.0 million (USD) order received from Scripps Group in 2015.

Broadcast revenue for Vislink’s Communications Systems division was £39.3 million for 2015, an increase of 4% over the prior year.

Broadcast Regional Performance:

The table below from Vislink’s earning release shows a complete breakdown of the Company’s broadcast revenue by geographic region.

vislink-geo-table-2015

Business Outlook:

In a December 8, 2015 press release Vislink had alluded to an upcoming acquisition, stating “the Company is in advanced discussions with a small bolt-on acquisition, which would provide software to broadcasters and be highly complementary to Pebble Beach Systems’ existing broadcast solutions.”  There was no acquisition announcement as part of Vislink’s release.

Within the earnings release, management cited recent product releases positioning Vislink to benefit from technology transitions related to IP and virtualized software.

Executive Chairman of Vislink, John Hawkins said “We continue to transition to a software and services business represented by the evolving profit mix within the business. Pebble Beach Systems has had a strong financial performance in 2015 as it continues to expand its sales activities through its key partnerships and increasing geographic presence.  In its core broadcast markets Vislink Communication Systems found market conditions in 2015 challenging and they are expected to remain variable in 2016. However, the significant restructuring of Vislink Communication Systems, coupled with the investment and launch of new products and an increasing order pipeline, provides an encouraging platform for improved results from Vislink Communication Systems.”

 

Related Content:

Vislink 2015 Earnings Press Release

Vislink 2015 Earnings Presentation

 

 

© Devoncroft Partners 2009 – 2016. All Rights Reserved.

 

 

Vislink Broadcast Revenue Declines 10 Percent in 1H 2014, Expects Improved Second Half

broadcast technology market research, Broadcast technology vendor financials, Broadcast Vendor M&A, Quarterly Results | Posted by Joe Zaller
Sep 08 2014

UK-based Vislink plc, which owns broadcast industry brands Advent, Link, MRC Gigawave, and Pebble Beach, announced that its total revenue from continuing operations for the first six months of 2014 was £27.1m, down 3.2% versus the same period a year ago.

Pre-tax profit for 1H 2014 was £2m, up from a net profit of £1.4m during the same period a year ago.

 

Broadcast Performance:

The company’s broadcast industry revenue for the first half of 2014 was £21.1m, down 10.2% versus the first six months of 2013. Vislink attributed the lower year-on-year broadcast revenue to market uncertainty and longer decision making cycles.

Broadcast orders during 1H 2014 were £21.5m, down 22.9% versus the first six months of 2013.

The table below shows a complete breakdown of Vislink’s broadcast revenue by geographic region.

 

Vislink - Broadcast Revenus 1H 2014

 

Vislink’s 1H 2014 broadcast revenue includes a contribution from Pebble Beach Systems, which was acquired by Vislink in March 2014 for $24.7m.

In the 3.5 months since it was acquired, Pebble Beach contributed £3.1m, and generated an adjusted operating profit of £1.1m.  The company said that Pebble Beach “is developing very quickly and continues to trade ahead of our expectations at the time of acquisition.”

Following on from the success of the Pebble Beach deal, Vislink telegraphed to the market its intent to make more acquisitions in the future, saying its move to the AIM stock market “has simplified and reduced the financial burden of making acquisitions, giving us continued benefits for bolt-on acquisitions.”

“Whilst the broadcast market has been challenging for our hardware business, overall, we are encouraged with these results,” said Vislink Chairman John Hawkins. “We have taken timely action to reduce costs in our Hardware Division and we have seen an improved trading trend, the order book strengthened in Q2 and the orders to sales ratio is better than 1.

“We are delivering on our software strategy with Pebble Beach Systems performing ahead of expectations. The Group’s revenue has benefitted from the change in revenue balance, with software providing longer term visibility. The partnership with Harmonic Inc, which is being announced later today, represents further excellent opportunities for the Group.”

The company ended 1H 2014 with £7.7m of cash. There was a net cash inflow from operating activities in the period of £5.5m, up significantly from £1.6m for the first half of 2013.

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Harmonic Acquires 3.6 Percent of Vislink, Signs £2 Million OEM Deal

Separately, Vislink announced that Harmonic has acquired 3.6% of the company, through the purchase of 4 million new ordinary shared valued at £0.50 each. Vislink says it will use the investment from Harmonic to further strengthen its balance sheet.

In parallel with the investment, Harmonic has also signed £2m OEM contract with Vislink, through which Harmonic sell playout solutions from Pebble Beach Systems to broadcast industry customers. Vislink acquired Pebble Beach in March 2014 for $24.7m.

Under the terms of the OEM deal, Harmonic will place an initial order for software licenses of £2.0m, receivable in 2014, to secure Pebble Beach Systems’ products for onward sale in its integrated package.

Vislink says the deal with Harmonic “should contribute to improved profitability and penetration of Pebble Beach Systems software globally in the second half [of 2014].”

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Outlook:

Vislink said it has “an improved outlook for the broadcast market,” and anticipates improved trading in the second half of 2014.

For the past several years, Vislink has told the market its goal is to increase its revenue to £80 million, with 10% return on sales.

However, in its latest earnings announcement, the company has changed this position slightly, saying “As the proportion of our business coming from higher margin software becomes more significant, the target revenue needed to generate our long stated operating profit target will change. The Company remains committed to its target operating profit of £8.0m through both organic growth and bolt-on acquisitions.”

“2014 represents a transitional and transformational year for the Group and with the increasing focus on our software division, we believe that this will enhance the Group’s overall quality of earnings in 2014 and beyond,” said Hawkins.

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Related Content:

Press Release: Vislink plc half year results for the six months ended 30 June 2014

Harmonic Invests in Vislink, Signs £2 Million OEM Order for Pebble Beach Software

Broadcast Vendor M&A: Vislink Buys Pebble Beach for $24.7 Million

 

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© Devoncroft Partners 2009 – 2014. All Rights Reserved.

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Harmonic Invests in Vislink, Signs £2 Million OEM Order for Pebble Beach Software

Broadcast technology vendor financials, Broadcast Vendor M&A | Posted by Joe Zaller
Sep 08 2014

Playout and compression specialist Harmonic has acquired 3.6% of UK-based Vislink plc, through the purchase of 4 million new ordinary shares valued at £0.50 each.

Vislink says it will use the investment from Harmonic to further strengthen its balance sheet.

In parallel with the investment, Harmonic has also signed £2m OEM contract with Vislink, through which Harmonic sell playout solutions from Pebble Beach Systems to broadcast industry customers. Vislink acquired Pebble Beach in March 2014 for $24.7m.

Under the terms of the OEM deal, Harmonic will place an initial order for software licenses of £2.0m, receivable in 2014, to secure Pebble Beach Systems’ products for onward sale in its integrated package.

Vislink says the deal with Harmonic “should contribute to improved profitability and penetration of Pebble Beach Systems software globally in the second half [of 2014].”

“This agreement is another key strategic partnership for Vislink and reinforces our strategy of moving into software and providing customer centric, solution-led and best-in-class products which enable Vislink to successfully capture new expanded markets,” said Vislink Executive Chairman John Hawkins. “This agreement will also provide significant new channels to market for our software solutions. We are delighted to welcome Harmonic as a partner and shareholder.”

“We are pleased to seal this strategic partnership with Vislink and become aligned with their interests as a shareholder,” said Harmonic SVP Peter Alexander. “We are both innovation leaders in video, and see significant synergy across our customer base and product lines. Together we can grow market share and broaden our addressable markets globally.”

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Related Content:

Press Release: Pebble Beach Systems To Partner With Harmonic Inc

Broadcast Vendor M&A: Vislink Buys Pebble Beach for $24.7 Million

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© Devoncroft Partners 2009 – 2014. All Rights Reserved.

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Broadcast Vendor M&A: Vislink Buys Pebble Beach for $24.7 Million

Broadcast technology vendor financials, Broadcast Vendor M&A, Quarterly Results | Posted by Joe Zaller
Mar 19 2014

Vislink announced that it has acquired playout automation specialist Pebble Beach Systems for $24.7m (£14.9m). Pebble Beach will operate as a stand-alone unit within Vislink, and will continue to be run by its management, including founder Peter Hajittofi.

Under the terms of the deal, Vislink will pay £12.9m in cash, and £2m in newly issued Vislink shares.  Pebble Beach management must hold the new shares for at least two years. Vislink says the “transaction will be immediately earnings enhancing.”

For the fiscal year ended June 20, 2013, Pebble Beach had revenue of £5.64m, EBITDA of £1.3m, and profit before tax of £1.3m.  Thus the deal values the company at approximately 2.5x revenue, and 11.4x EBITDA. After backing out the £5.9m in cash Pebble Beach had in the bank, the net price paid by Vislink was £9m, valuing the deal at approximately 1.6x revenue and  7x EBITDA.

The fact that Vislink has made an acquisition is not surprising.

The company, which had revenue of £28m for the first half of 2013, has told the market for the past several years that it intends to grow its revenue to £80m, with 10% return on sales, by the end of 2014.  

Vislink, which recently moved its listing to the UK AIM market, has long-telegraphed telegraphed its intention to buy companies to achieve its stated goals for revenue growth and profitability.

In its most recent half-yearly results, company management said “we remain on track to grow the business to achieve turnover of £80m and £8m adjusted operating profit by the end of FY2014, and we intend to support this by a number of bolt on acquisitions in addition to achieving organic growth.”

However, it is interesting to note that Vislink decided to buy a  company in a different part of the broadcast value chain to help it achieve its stated intentions.

Vislink, which owns the Advent, Gigawave, Link, MRC, and PMR brands, is best known for its RF, microwave, and satellite communication products that are used by broadcasters in live production environments such as news and sports.

Pebble Beach products are used in broadcast playout applications, which does not have the same emphasis on live events.

Having said that, Vislink says that the Pebble Beach team will “assist Vislink in expanding its software capability as a Group,” so the acquisition could be the first of several deals that mark the beginning of a new business focus at Vislink.

Vislink explained the rationale for the deal saying Pebble Beach’s technology is complementary to its own, and that “the acquisition of Pebble Beach will move Vislink into the provision of software solutions for playout with advanced software technology,” and that “Vislink will now be able to offer broadcasters a complete ‘scene to screen’ solution.”  Vislink also highlighted the fact that Pebble Beach “will gain from access to significantly increased sales channels through the global network of over 900 broadcasters that Vislink works with as well as its international network of offices.”

“The acquisition fits perfectly into our long term strategy of acquiring software and services capability that we hope to drive recurring revenues for the group,” said Vislink chairman John Hawkins.

UK-based Pebble Beach has 60 employees, and regional offices in Dubai, Singapore, and the USA.

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Related Content:

Press Release: Vislink Acquires Pebble Beach

Broadcast Vendor M&A: Vislink Buys Amplifier Technology for up to $6.2 Million

Vislink Revenue Declines 7 Percent in Q3 2012, Reaffirms Plan to Double Revenue By End of 2014

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© Devoncroft Partners 2009 – 2014. All Rights Reserved.

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Revenue and Profits Jumps at Vislink in 1H 2012

Broadcast technology vendor financials, Quarterly Results | Posted by Joe Zaller
Sep 03 2012

UK-based Vislink plc, which owns the Advent, Link, MRC and Gigawave brands, announced that its revenue from continuing operations for the first six months of 2012 was £27.5, up 38% versus the same period a year ago. Excluding the contribution from Gigawave, which was acquired by Vislink in June 2011, the company’s revenue was £22.4m, up 17% versus the first half of 2011.

Broadcast revenue in 1H 2012 was £24.2m, up 46% versus the first half of 2011, and down 6% versus the second half of 2011.  The 1H broadcast revenue figure includes a contribution of £4.2m from Gigawave, which has added incremental revenues in markets outside of the Americas. Weakness in South America led to a 52% decline in the region to £1.5m, but this was offset by strong performances in Europe and North America.

The company posted a pre-tax profit of £1.4m, compared to a pre-tax loss of £1.9m last year.  On an operating basis, the company reported a profit of £700,000, versus an operating loss of £3.7m last year.

Bookings in 1H 2012 were £25.4m, up 2% versus last year, but underlying orders (excluding the contribution from Gigawave) were down 14% to £20.5m.  The order backlog at the end of the first six months of 2012 was £10.4m, down 16% versus the same period last year.

The company attributed its reduced order intake to lower demand for satellite terminals in the broadcast market.  However, it expects to see improvement in the second half of 2012 thanks to newly introduced products.

Gross margins for the first half of the year were 40.4%, up 1.4 percentage points versus last year.  The company said its margin expansion was due to lower manufacturing overhead costs thanks to a focus on cost control.  The materials margin was 52.4%, down slightly from last year.

The company ended 1H 2012 with £8.4m of cash, down from £10.1m six months ago.  The company says its cash flow will improve in the second half of the year as it reduces its working capital following an inventory build in the first half of 2011 for the London Olympics.

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Outlook

The company reiterated its objective of reaching £80m of sales and £8m of pre-tax profit within three years, saying this goal seems remains realistic and achievable.

Vislink executive chairman CEO John Hawkins said that the company will “continue to seek “bolt on” acquisitions to strengthen our software and services capabilities that exploit the growth of cloud based IP transport technologies.

“We believe that the Group is capable of exploiting the continuing growth of video content contribution both in our traditional broadcast market and also in other vertical markets that, with the development of unlicensed spectrums include opportunities within the pro-sumer markets. The second half has begun positively with orders received of £11.0m (2011: £8.4m) in the 8 weeks to 25 August as we have secured some significant prospects that experienced delays in the first half. The full year outcome is subject to this order intake level continuing throughout the third quarter.

“We are cautiously optimistic that the second half of 2012 will show further improvement in trading. We have a strong order book which underpins our third quarter revenue.”

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Press Release: Vislink plc – 2012 Interim Results Announcement

Vislink Says its Revenue is Up 61 Percent Through April 2012

Vislink Reports Full Year 2011 Results, Reaffirms Goal of Growing Revenue by 60% Within Three Years

Vislink Reports Small Loss in 1H 2011, Announces Strategic Review

More Broadcast Vendor M&A: Vislink Completes Acquisition of Gigawave for £3.75 Million

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© Devoncroft Partners. All Rights Reserved.

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Vislink Reports Full Year 2011 Results, Reaffirms Goal of Growing Revenue by 60% Within Three Years

Broadcast technology vendor financials, Quarterly Results | Posted by Joe Zaller
Mar 27 2012

Vislink plc, which owns the Advent, Gigawave, Link and MRC brands, reported that its revenue for the full year 2011 was £50.3m and increase of 17% versus 2010.

On an organic basis (excluding the £4.5m contribution from Gigawave, which was acquired in June 2011) revenue was £44.7m, up 4% versus 2010.

Broadcast revenue was £42.3m (84% of total revenue), an increase of 16% versus the previous year. Excluding the contribution from Gigawave, 2011 broadcast sales were up 3% versus 2010.

On a geographic basis, broadcast revenue dropped 14% in both Western Europe and North America, the company’s two largest markets.  These declines were offset by strong growth in the Latin America and MEA regions, where sales in 2011 were up 63% and 61% respectively compared to the same period a year ago. APAC revenue was down 1%.

 

Guidance:

Vislink reaffirmed its strategic goal of achieving profitable growth to revenue of £80m within 3 years with an adjusted operating profit margin of 10%.  The company said it expects to meet this goal through a combination of organic growth at 10 -15% per year and “bolt on” acquisitions that strengthen its software and services capabilities, and exploit the growth of cloud based IP transport technologies and content tagging.

 

“2011 was a year of transition for the Group.” said company chairman John Hawkins.  “We achieved the objective of returning the business to profit in the second half of the year; we have growth in underlying revenue and orders received and we have increased our order book. We have improved our margins, substantially reduced the underlying cost base and simplified the management structure.  We have a good strategy based primarily on organic growth coupled with seeking out acquisitions in cellular and IP-driven technology. The successful execution of the strategy will provide long term growth and generate an increase in shareholder value. ”

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Related Content:

Press release: Vislink plc, Results for the year ended 31 December 2011

Previous Quarter: Vislink Reports Q3 2011 Results, Outlines Plans to Double Revenue Over Next Three Years

Vislink plc – Interim results for the six months ended 30 June 2011

More Broadcast Vendor M&A: Vislink Completes Acquisition of Gigawave for £3.75 Million

Vislink Interim Management Statement for 1H 2011

Vislink Says Orders Up in Q1, Expects to Post Smaller Loss for First Half of 2011

Previous Year: Vislink News & Entertainment Revenue Declined 28 Percent in 2010

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© Devoncroft Partners. All Rights Reserved.

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Vislink Reports Q3 2011 Results, Outlines Plans to Double Revenue Over Next Three Years

broadcast technology market research, Broadcast technology vendor financials, Quarterly Results | Posted by Joe Zaller
Nov 08 2011

UK-based Vislink plc, which owns the Advent, Link, MRC and Gigawave brands, issued a statement that provides an update on its Q3 2011 results, and outlines its strategy to double its revenue over the next three years.

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Trading Update

Vislink’s revenue for the quarter ended 30 September 2011 was £14.8m, an increase of 24% versus the same period a year ago, and in line with management’s expectations.  Excluding the contribution from Gigawave, which was acquired by Vislink in June of 2011, the company’s revenue was up 6% to £12.6m.

Order intake during the quarter was £14.4m, an increase of 11% versus the same period a year ago.

Year-to-date order intake is  £36.2, up 9% versus the same period a year ago.  Including the contribution from Gigawave, year-to-date order intake at the end of the quarter was £39.5m. At the end of the quarter the company’s order book stood at £15.0m. The company said it has seen increased demand for its broadcast products in the Middle East and South America.

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Company Strategy

Vislink says that following a full review of the business including an assessment of growth opportunities and technology drivers, it will:

  • continue to exploit the strengths of its established brands – Advent, Gigawave, Link, MRC and PMR

 

  • maintain investment through its core product development program particularly in IT based technologies such as IP transport over 3G/4G and WiFi infrastructures

 

  • exploit the continuing growth of video content contribution both in its traditional broadcast markets and also in other vertical markets

 

  • use partnerships to extend the use of its video technologies into semi-professional and prosumer markets

 

  • use partnerships to leverage its technologies into the surveillance markets beyond existing law enforcement and public safety customers

 

  • pursue applications for its products in defence, mining and utility verticals that provide incremental revenue opportunities beyond the core broadcast and surveillance business

 

  • create a software and services culture in order to build recurring revenues into the business model

 

  • seek “bolt on” acquisitions to strengthen its software and services capabilities exploiting the growth of cloud based IP transport technologies and content tagging

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Based on the above strategy, the company believes that it can double its revenue to £80m within three years, while delivering an adjusted operating margin of 10%.

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Company chairman John Hawkins said: “The improved order intake for the Group provided us with an order book of circa £15.0 million at the start of the fourth quarter. We remain optimistic that the final quarter of 2011 will show further improvement in trading; our key performance metrics are continuing to move us forward in a positive direction. The Group has strengthened the Board with the addition of two new non-executive directors, John Varney and Andrew Sleigh, both of whom provide an in depth knowledge of the broadcast and surveillance markets. They have already contributed to the formation of our strategy review and three year plan. The Group is returning to profit and has net cash. We have a realistic strategy which will provide long term growth and generate positive shareholder value.”

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Related Content:

Vislink Interim Management Statement and Strategy Update November 2011

Vislink plc – Interim results for the six months ended 30 June 2011

More Broadcast Vendor M&A: Vislink Completes Acquisition of Gigawave for £3.75 Million

Vislink Interim Management Statement for 1H 2011

Vislink Says Orders Up in Q1, Expects to Post Smaller Loss for First Half of 2011

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Vislink Reports Small Loss in 1H 2011, Announces Strategic Review

Broadcast technology vendor financials, Quarterly Results | Posted by Joe Zaller
Sep 02 2011

Vislink plc announced that its revenue from continuing operations for the first six months of 2011 was £20m, down 1% versus the same period a year ago. Excluding the contribution from Gigawave, which was acquired earlier this year, the company’s revenue for the first half of 2011 was £19.1m, a 6% decline versus last year.

The company’s operating loss for the period was £3.7m, which includes £0.6m charge for the amortization of acquired intangibles, and £1.2m for non-recurring costs including acquisition costs associated with Gigawave, and corporate restructuring.

Vislink said it was seeing a “slow recovery” in its news & entertainment market, thanks to an increase in activity in South America, Asia and the Middle East that is being driven by current and upcoming political and sporting events. However, the company also said that the North American market “remains challenging.”

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Western Technical Services to be Retained

Vislink said that its Western Technical Services (WTS) subsidiary, which it had slated for disposal as part of a major corporate restructuring program, will now be retained and transitioned “from being a broadcast based business to developing alternative sources of revenue building on our established experience in designing and installing broadcast
infrastructure.” The company says it is doing this because it sees strategic value in its capability to provide full integration services to both its news and entertainment and law enforcement and public safety markets.  Vislink says that WTS will be incorporated into its US management structure, resulting in extract revenue synergies and a reduction in the overall US cost base.

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Strategy Under Review
Vislink said that its board is currently “undertaking a full review of the business that is focused on returning the Group to profitable growth by the end of 2011.”

This review will include an assessment of growth opportunities, both organic and through acquisition, and the technology drivers that underpin the market opportunity for Vislink. The review also recognizes the need to build sustainable recurring revenue opportunities, hence the decision to integrate WTS fully into the US business. The results of the review will be announced in October 2011.

Company chairman and CEO John Hawkins said that the company is “cautiously optimistic that the second half of 2011 will show further improvement in trading. We have a
strong order book which underpins our third quarter revenue.”

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Related Content:

Press Release: Vislink Interim results for the six months ended 30 June 2011

Press Release: Vislink Acquires Gigawave

Vislink Interim Management Statement for 1H 2011

Vislink News & Entertainment Revenue Declined 28 Percent in 2010

Vislink CEO to Step Down, Will be Replaced by New Chairman on Interim Basis

Vislink Lays off 25% of Workforce

Vislink Restructuring Operations. Announces M&A Program to Focus Business on IP Video for Broadcast and Public Safety Markets

Vislink Trading Update for 1H 2010

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More Broadcast Vendor M&A: Vislink Completes Acquisition of Gigawave for £3.75 Million

Broadcast Vendor M&A | Posted by Joe Zaller
Jun 03 2011

UK-based Vislink plc, which owns the Advent, Link, and MRC brands, announced that it has closed the acquisition of Gigawave. The purchase price was £3.75m, and Vislink says the deal will be accretive to earnings.

Gigawave designs and manufacturers wireless camera, microwave and antenna products for the broadcast market. For the year ended April 30, 2011 Gigawave posted a pre-tax loss of £430,000 on revenue of £10m.  In the previous year, the company lost £1m on revenue of £12.5m.

Under the terms of the deal Vislink is paying £1.75m cash up front and repaying £400,000 of shareholder loans. Vislink will then pay an additional £1m cash on each of the first and second anniversary of the transaction.

Vislink says that Gigawave, which currently employs 87 people, will be integrated into its UK operations, and will strengthen its position in its broadcast market by broadening the its capabilities in terms of engineering, product portfolio and geographic reach.

Henry Barczynski, Gigawave’s founder and current managing director will remain with Vislink after the transaction. He will become Vislink’s chief marketing officer and report to CEO John Hawkins.

Vislink first telegraphed its intention to buy Gigawave in November of 2010 when it said it was restructuring its operations to focus more fully on the broadcast and public safety markets. At that time Vislink said it expected to pay £5.75m for Gigawave, and Vislink’s then CEO Duncan Lewis was quoted in a Financial Times article as saying the acquisition of Gigawave would “send a signal to the market of how serious we are about news and entertainment.”

Then in a March 2011 trading update, Vislink indicated that the deal might not happen, saying “Whilst we continue to believe in the industrial logic of bringing Gigawave and Vislink and their associated brands together we have, to date, been unable to reach an agreement with the vendors.”

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Related Content:

Press Release: Vislink Acquires Gigawave

Vislink Interim Management Statement for 1H 2011

Vislink News & Entertainment Revenue Declined 28 Percent in 2010

Vislink CEO to Step Down, Will be Replaced by New Chairman on Interim Basis

Vislink Lays off 25% of Workforce

Vislink Restructuring Operations. Announces M&A Program to Focus Business on IP Video for Broadcast and Public Safety Markets

Vislink Trading Update for 1H 2010

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