Good morning! Apologies for yesterday's report being extremely late, but I caught up in the evening and wrote a review of results from Vislink and Pilat Media. Click here to see that report.

I'm encouraged by the sound results from Vislink (LON:VLK), and more importantly the significant rise in their order book. Also, the small acquisition announced yesterday seems inspired, in bolting on a decent slug of additional profit, at very little cost. I'm not sure how they secured such a favourable deal, but it certainly seems as if patience has paid off. Management have proved good to their word of not doing acquisitions for the sake of doing deals, but waiting until the right deal can be done.

Broker forecasts for Vislink seem too low to me. N+1 indicate 2.7p adj. EPS for 2013, and 3.6p for 2014. Edison have raised their estimates to 3.0p for 2013 and 4.2p for 2014. Given that Vislink shares have so far risen to 42.5p, that still only puts them on a 10 times PER multiple for 2014, which leaves a decent amount of upside potential in the share price. I'm struggling to see why the PER should be under 15, especially given the still strong net cash position, which would justify a share price of c.63p, therefore I am happy to continue holding in the expectation of further share price rises.

 

 

 

The FTSE 100 Futures look fairly stable today, with an open slightly down (7 points) at 6,482.

 

 

 

Turning to today's results, there isn't a great deal going on in the small caps area. Interim results from equipment hire company, Lavendon (LON:LVD) don't look terribly exciting. Turnover for the six months to 30 Jun 2013 was slightly down at £113.6m, underlying operating profit up £0.5m to £13.9m, and due to a fall in their net finance expense, profit before tax rose from £8.6m last H1, to £11.1m this H1.

This go tme thinking, it's all very well churning out good profits when interest rates are very low, but equipment hire companies will all face much higher interest cost when interest rates rise. Perhaps that will be offset by increased demand in a recovering economy, but it's worth bearing in mind.

Forecast of 13.6p EPS this year look…

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