30/03/2007
Analysts upgraded forecasts following record 2006 numbers from technology group Vislink, chaired by small-cap mover and shaker Bob Morton, who has made the personal decision not to stand for re-election at the forthcoming AGM after a 14-year stint.
The supplier of microwave and satellite video and data links into the broadcast, defence and security markets reported 18% annual sales growth to £100.5m, from which adjusted operating profits powered 71% north to a record £14.3m and ‘normalised’ pre-tax profits sparked up from £14m to £15m. Following a year of strong cash generation, the coffers were flush with £3.9m cash allowing for a doubled dividend of 1p. ‘Improvement in our margins is the key point,’ explained chief executive Ian Scott-Gall, pointing to a rise from 9.8% to 14.2%.
He said that the Advent, Link and MRC operations are all benefiting from burgeoning demand in global broadcast markets outside North America and that Norwegian CCTV business Hernis entered 2007 with a record order book. Growth in its marine, offshore and onshore markets is being fuelled by the spiralling oil price and the natural resources boom as oil and gas players invest in shipping and exploration projects. Scott-Gall also believes the success of the group’s technology within the broadcast industry is enabling Vislink to address the defence, law enforcement and security markets.
This year, house broker Investec forecasts a rise in pre-tax profits from £14m to £15m from sales approaching £102 million, giving earnings of 6.7p and a 1.1p dividend. ‘We have moved our stance to buy from hold,’ said the broker. ‘The business has clear momentum and the prospect of a modest upgrade remains.’ We are similarly bullish, with the business throwing off cash and the shares not overly expensive on a forward rating of 14.5 times. Buy.
| Market cap: | £132.7m |
| PE Forecast: | 14.5 |
| Share price: | 97.25p |
| LSE | £26.67m |
19.25p
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