Software acquisition drives profits upgrade
Vislink Plc (LONDON:VLK) 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.
Management notes that the operating profit for the group’s software business is likely to be higher than anticipated, following a better than expected end to the year. Trading so far in FY15 has been in line with market expectations. Following the acquisition of Pebble Beach Systems in March 2014, a developer and supplier of playout automation, Channel in a Box and content management software for TV broadcasters and cable & satellite operators, a significant proportion of group profit is now derived from higher-margin software business. This enables the group to achieve its profits targets on a lower level of sales. Management expects group FY14 revenues to be approximately £62m.
We leave our FY14 estimates unchanged, noting the potential for adjustment in the PBT and EPS numbers and a downwards movement in revenues to reflect the management statement.
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