Vislink faces interim loss
Article Date: Jul 08 2010Secure communications specialist Vislink says it will show an operating loss for the first half-year on turnover down 13 per cent to £34 million.
The fully-listed company, which made a sharply reduced £480,000 pre-tax profit on the first half of last year and a drastically reduced £58,000 pre-tax for all of 2009, says it now sees 'some signs' of an economic recovery benefiting its business, but does not expect 2010's turnover to exceed last year's £85 million.
Steered by chief executive Duncan Lewis, Vislink, which caters for the news and entertainment, law enforcement, public safety, marine and energy markets, says its order intake fell 23 per cent year-on-year in the first six months, while the order backlog at the end of June was £1.2 million lower at £16.5 million. The company notes that its pipeline of sales opportunities is still growing, but warns that the prospects of turning these into orders remain 'opaque'.
Other factors have dented Vislink's profitability, including staff lay-off costs, restructuring expenses and the cost of a mooted takeover in China that was abandoned after due diligence. Sterling's weakness against the US dollar during the period did not help, either, with most of the company's debt denominated in dollars, and net cash of £600,000 at the end of December became net debt of £3.1 million at the end of June.
Lewis says Vislink's continuing cost reductions, including sourcing from Asia, will not harm the company's ability to take advantage of an economic recovery, with engineering investment maintained and new products introduced. He is reviewing the composition of the group and will take his conclusions to the board before the end of the year.
Shares in Vislink have fallen from 31.5p to 18p over the past year, to value the company at £25 million. They are a medium-term recovery speculation.
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