Vislink Plc (LON:VLK)’s FY15 results show management taking action to rebalance the group towards software-related activities in response to structural changes in the global broadcast industry. These actions had an adverse impact on FY15 pre-exceptional and reported profit, but position the group to take advantage of the growth segments in the broadcast industry.
Progress distorted by one-off contract in FY14
FY15 group revenues fell by 7% year-on-year to £57.8m, ahead of our £54.2m estimate. The sales decline reflects a full year contribution from PBS, strong underlying growth in software (PBS) sales and modest growth in hardware broadcast sales as VCS took market share, all of which was offset by the non-repeat of a major surveillance order that primarily benefited FY14. FY15 group adjusted PBT declined by 41% to £4.4m (in line with our estimates) as a result of the absence of the major surveillance order and investment in PBS’s sales and software development capability. The dividend was held at FY14 levels to retain cash for investment in the existing businesses and to make acquisitions.
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