Good morning. Regulars here will know that I've been keen on Vislink (LON:VLK) since the Spring, based on a sensible turnaround strategy under new management, a series of positive trading statements, broker upgrades, and a strong Balance Sheet with net cash, and the icing on the cake being a helpful dividend yield too. So from my perspective, this share pretty much defined GARP (growth at reasonable price) when I originally bought in around the 30p level earlier this year. So you might think that with the shares 60% higher now (currently 48p) that they are fully priced? Actually, I don't think they are - because, as is often the case with improving performance, the broker forecasts seem too cautious, lagging behind the company's recovery.

In this case, Vislink has repeatedly stated its target of achieving £80m turnover and £8m operating profit by the end of calendar 2014. There has been slight confusion over whether that means for that financial year, or to have reached an annualised run rate of those levels by Dec 2014. I asked this question directly of management at a meeting myself & other investors had with them earlier this year, and they rather confusingly said that they had used the two terms interchangeably in previous announcements. So I was left somewhat unsure, but they seemed to be saying that the £80m turnover & £8m profit target was for the year-ended 31 Dec 2014.

That target is once again reiterated today, and they say will be achieved by a mixture of organic growth and further bolt-on acquisitions. The company spends a high proportion of turnover on R&D, so that is a big plus (since that tends to drive better performance). Also, it has net cash available for smallish acquisitions, and management with a track record of making large numbers of acquisitions in previous roles - which should lead to the right decisions being made here.

The key paragraph in their IMS this morning says, reassuringly;

 

Since the half year results overall trading has been in line with our expectations and although our order book visibility remains limited, we remain on track to meet the Board's expectations for the full year.

 

The limited visibility comment is just the nature of the business unfortunately. Vislink are trying to build recurring revenue streams, and that…

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