Last checked at 8 Dec 2009 07:00
Vislink plc
Trading Update
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 a trading update in respect of the financial year ended 31 December 2009.
Current trading
At the time of the interim results and in our last Interim Management Statement, we said that the outcome for the year depended upon the conversion of the prospects in our News & Entertainment (N&E) and Law Enforcement & Public Safety (LE&PS) business units. Across both the N&E and LE&PS markets, there has been a significant amount of contract slippage as customers have delayed tendering and placing major orders. Vislink too has also been impacted by the slippage of several major prospects which means that it will not meet the levels of revenue originally anticipated for the 2009 financial year. We anticipate that there will be a revenue shortfall of between £5.0m and £7.5m. As a result, our operating profit will be proportionately lower by our gross margin percentage.
Despite this contract slippage, order in-take continues to increase. The run rate order intake in N&E has increased by 32 per cent in the five months to November compared to the first half of the year. In LE&PS, the run rate order intake is 57 per cent up over the first half. Our Marine & Energy and Services business units continue to trade in line with expectations.
This momentum in the business combined with the operational improvements and cost savings outlined below, means that we remain confident about the Group's prospects for 2010. The slippage of existing contract opportunities together with increasing enquiries and growing pipelines across our four business units, all help underpin current market expectations for next year.
The Group has executed its strategy to trade through four Business Units (News & Entertainment, Law Enforcement & Public Safety, Marine & Energy and Services). We will have delivered all the objectives we set at the start of the year that were within our control. We will have consolidated our UK operations before the end of the year on to one site; we have reduced our space and operating costs in the US following the end of the 2GHz relocation programme; we have expanded the quality, depth and geographic spread of our sales organisations; we have continued to introduce new advanced products to meet our customers' needs, including the recently announced suite of eleven Kamelyon products for the law enforcement market.
Outlook
The company will continue to invest in sales and product development, and in systems to reduce costs and improve service. We will be leaving 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 in 2010.
Duncan Lewis,
Chief Executive
8th December 2009
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For further information, please contact:
Duncan Lewis, Chief Executive 01488 685500
James Trumper, Group Finance Director 01488 685500
James Macey White, Hudson Sandler 0207 796 4133