Pebble Beach Regulatory News (PEB)

19 Nov 2008 07:00



19 November 2008

Vislink plc

Interim Management Statement

Vislink plc ("The Group"), a leading supplier of microwave radio and satellite transmission products for the broadcast and security markets and of CCTV systems for the marine safety market, today publishes its Interim Management Statement for the trading period from 1 July 2008 to 18 November 2008 as required by the Financial Services Authority's Disclosure and Transparency Rules.

Current trading and outlook

The Board expects Group revenue for the current year to be at the upper end of market expectations. As set out in our interim statement, operating margins in the US business of MRC have continued to come under pressure through changes in product mix and the increased costs of working to complete the BAS 2GHz relocation programme in the USA. As a result of this, the Board expects earnings for the current financial year to be marginally below market expectations. All other Group businesses continue to trade in line with our expectations.

As anticipated by the Board and referred to in our interim statement, the run-off of the BAS 2GHz relocation programme has affected the Group's headline performance. Therefore in line with expectations, third quarter orders received were down 20 per cent compared with the third quarter last year to £24.3 million at constant exchange rates, and sales for the period were down 11 per cent at £23.7 million. 

Group headline order intake for the nine months ending 30th September 2008 was down 13.0 per cent to £68.0 million, and the headline revenue for the period declined 5 per cent to £70.2 million. However, order in-take for the nine months ending 30th September 2008, excluding the BAS 2GHz programme, increased by 4 per cent year on year, and revenue for the period, excluding the BAS 2GHz programme, increased by 14 per cent year on year at constant exchange rates. Outside of the BAS 2GHz relocation programme, the US businesses showed revenue growth in both services and broadcast operations. The UK Radio Frequency business, which sells into markets outside of the Americas, has recently seen a slow down in orders in the third quarter and their revenue is marginally behind last year. Hernis continues to perform strongly with year on year growth. 

Financial position

The Group balance sheet remains strong. Since the Interim Results the Group has paid $10.8 million in respect of the acquisition of Pacific Microwave Research Inc, which specialises in the design, engineering and manufacture of analogue and digital video transmission systems for security markets. The acquisition is in line with the Group's strategy to exploit its technology in related market sectors. At the end of the third quarter the Group had net debt of £1.1 million (30 June 2008 - net cash of £6.5 million).

Management and strategy

Duncan Lewis succeeded Ian Scott-Gall as Chief Executive on 1 October 2008. 

For 2009, we continue to see growth opportunities in Law Enforcement & Security, Services and in our niche in the Marine, Oil & Gas industries. However, with the anticipated successful completion of the BAS 2GHz relocation programme, our broadcast markets look more uncertain both in the US and internationally especially if customers' capital budgets come under pressure, given the outlook for the current economic environment.

In response to the broader economic environment, the Group will look to continue to drive profitability and cash generation by investing in its key markets and technologies, coupled with its normal attention to cost-containment throughout 2009. The Board expects to make a further trading and strategy update towards the end of January 2009.

Tim Trotter, Chairman, commented, " We are delighted that Duncan has joined the Group. We have a strong balance sheet, competitive products, and we have built strong positions in our core markets. We have plans to invest in new products to retain our competitiveness and develop our new markets. We have good geographic reach, from Asia and the Middle East through to Europe and the USA, and we shall continue to invest in building our sales presence in areas where we have been less well represented to date. We shall ensure we tackle any perceived weaknesses in our operations, build on our strengths and, over time, accelerate the profitable growth of the Group."

Cautionary statement

This press release contains certain forward-looking statements that are made in good faith based on the information available at the time of its approval. It is believed that the expectations reflected in these forward-looking statements are reasonable but they may be affected by a number of risks and uncertainties that are inherent in any forward-looking statement, which could cause actual results to differ materially from those currently anticipated. 

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