Last checked at 27 Oct 2009 07:00
Vislink plc
Interim Management Statement
Vislink plc ("The Group"), the global technology business specialising in secure communications for the News & Entertainment, Law Enforcement & Public Safety, Marine & Energy and the related Services markets, today publishes its Interim Management Statement for the trading period from 1 July 2009 to 26 October 2009 as required by the UK Listing Authorities Disclosure and Transparency Rules.
Current trading
The Group now trades through four Business Units (News & Entertainment, Law Enforcement & Public Safety, Marine & Energy and Services) which were created on 19 January 2009. All four Business Units sell the technologies and products of the whole Group.
The benefits of the redirection of strategy and of the re-organisation of the Group are increasingly visible. During the third quarter, the development of a new family of core technologies has been completed based in part on the capabilities of Pacific Microwave Research, which we acquired in September 2008. The technologies have been applied to a new suite of ground-breaking products for the Law Enforcement & Public Safety market to be launched in the fourth quarter, including body-worn surveillance systems, and video transmission from unmanned vehicles or aircraft. The same technologies will be applied to new products in development for News & Entertainment and Marine & Energy. The modular approach makes product design faster, manufacturing costs lower, and better financial returns as the investment in technology is amortised across all our business units.
The Group continues to identify ways to improve efficiencies in its operations and reduce overheads. The Group will complete the consolidation of its UK operations on to one site in Hemel Hempstead by the end of the year; it is in the process of selling its site in Chesham and the sale is expected to be completed before year end. The pilot for the roll-out of the new Group wide CRM/ERP system has been completed, and roll-out will commence in the fourth quarter.
Trading in this period has been in line with the Board's expectations. Underlying order intake at constant exchange rates, excluding the 2GHz US spectrum relocation programme, was up on the third quarter of last year by 6.0 per cent, whilst underlying revenue on the same basis was down 1.0 per cent. The small revenue decline reflected the lower underlying order intake from broadcasters in the second quarter. Headline order intake in the third quarter was £20.1 million, 21 per cent down on last year at constant exchange rates whilst headline revenue was £19.7 million, 24 per cent down on the same period last year. The 2GHz US spectrum relocation programme is coming to an end, with the final shipment to be delivered in the fourth quarter.
We have seen year on year order growth of 96 per cent in our Law Enforcement & Public Safety businesses, 69 per cent for Services and 6.6 per cent in Marine & Energy. Headline orders within our News & Entertainment Division have declined by 54 per cent; underlying orders, excluding orders from the 2GHz US spectrum relocation programme, have reduced by 35 per cent. Broadcasters in both the USA and Europe have been deferring capital expenditure which had led to a slowdown in orders in those markets; however there was a notable pick-up in orders received in the third quarter relative to the second quarter (up 37 per cent). We are seeing accelerating growth in orders in the Asia/Pacific region and in the Middle East following the recruitment of additional sales staff in these regions as we continue our strategy for international expansion. In line with the Group's strategy to reduce its dependency upon revenues from broadcasters, revenues from News & Entertainment business represented 45 per cent of total revenues in the nine month period to 30 September 2009 compared to 63 per cent last year.
The Group's order book remains strong at £30.8 million at the end of the quarter (30 June 2009: £31.4 million).
Financial position
There have been no significant changes in the financial position of the Group since the announcement of the half-year results at 30th June 2009 save for the information contained within this Interim Management Statement.
The Group balance sheet remains strong. At the end of the third quarter, the Group had net debt of £2.0 million (30th June 2009: net cash £3.1 million) after tax and dividend payments in the period. The Group expects to be cash generative over the year as a whole.
Outlook
As previously stated, 2009 is a year of transition for the Group while the new Business Units implement the strategy introduced at the beginning of the year, increasing the focus on the customer and more effectively cross selling the technologies and products of the whole Group. This is being undertaken at a time when customer ordering patterns are less predictable in the current economic environment.
As we indicated at the time of the interim results, the outcome for the year continues in particular to depend upon the conversion of the prospects in our News & Entertainment and Law Enforcement & Public Safety business units. We are seeing a growing level of enquiries amongst our broadcast customers and the challenge remains to convert these to sales this year. Our pipeline in the Law Enforcement & Public Safety market continues to grow but order placement remains dependent upon the timing of political decisions; we have recently secured an order for over £0.5 million which had been expected in the second quarter and others of a similar size remain in sight. The order backlogs in our Marine & Energy and Services divisions underpin their revenue and so far, they are remaining resilient to the economic climate.
The company will continue to invest in sales and product development, and in systems to reduce cost and improve service. The goal remains to leave 2009 with a reduced cost base and accelerating growth in our chosen sectors as we focus our resources more effectively. The Board remains confident about the prospects for the Group.
Duncan Lewis,
Chief Executive
27 October 2009
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For further information, please contact:
Duncan Lewis, Chief Executive 01488 685500
James Trumper, Group Finance Director 01488 685500
James White, Hudson Sandler 0207 796 4133