Vislink (VLK) - discussion and information thread
I thought it would be a good idea to start some more active discussion threads on interesting (I.e. potentially under-valued) companies.
So here is some information on Vislink (LON:VLK) for reference purposes, and please feel free to comment on the company below, so that we can build up a reference library of comments & information about the company on this thread, hopefully without the background noise that you sometimes see elsewhere.
I think it would be great to differentiate the boards here as being for balanced & informed discussion, so equal consideration given to bull and bear points, rather than the feral bullfest that you see on other sites (pun fully intended!).
If this format proves useful, let's set up more threads, and cover loads of companies. Anyone can start a thread. So how about members setting up similar (or better!) discussion threads for your favourite shares here, and then taking ownership of the thread, and keeping the header post up to date? Just an idea.
UK - Full Listing (therefore eligible for ISA)
Ticker: VLK
No. Shares in issue = 113.9m (as at 22 Jun 2013)
Market Cap = £36.7m at 32.25p (mid price, 21 Jun 2013)
Head Office: Hungerford, Berkshire.
Executive Directors: John Hawkins (Exec Chairman), Ian Davies (FD)
Click here to visit Vislink's website
Useful investor presentation dated 22 May 2013
3 year chart compared with FTSE Small Caps Index (static, as at 21 Jun 2013):
(follow-up point - how do I include live charts here? needs 2 or 3 here ideally? Will update when I've figured out how to do it!)
Recent Stockopedia content in date order
21 Jun 2013: Small Cap Report - comment on Director buys
15 May 2013: 5 stocks beating earnings expectations, article from Ben Hobson which includes Vislink.
23 Apr 2013: Small Cap Report - comment on IMS
13 Apr 2013: Write-up on Vislink by ExpectingValue, also useful comments from others following article.
8 Apr 2013: Small Cap Report - brief comment on article in FT
25 Mar 2013: Small Cap Report - my first mention of the company, and I buy shares at 30.5p
Other content
Insert links to useful articles, posts, etc from other sources here.
RNS announcements Director Dealings Edison Research Notes
Bull Points
- Strong balance sheet, including £8.1m net cash (at 31 Dec 2012)
- Good dividend yield of 3.9% (1.25p paid in 2012, divided by share price of 32.25p)
- Strong 2012 results, moved from small loss to £3.1m adjusted operating profit
- 2.5p historic adjusted EPS for 2012, so reasonable PER of 12.9*
- Forecast EPS of 2.85p for 2013, giving forward PER of 11.3*
- Potential bid target.
- Company claims global market leadership (20%) for wireless video products for broadcasting industry.
- Management are targeting run rate of £80m turnover, and £8m profits by end of 2014.
- Outlook statement on 25 Mar 2013 indicated strong pipeline for 2013.
* = based on share price of 32.25p
Bear Points
- Security business lacks scale.
- Serial disappointer under previous management.
- Lack of recurring revenues, so heightened risk of lumpy sales.
- £80m/8m targets by end 2014 looking unrealistic.
- One-off benefit in 2012 from UK Olympics/Police contracts?
- Order intake in Q1 was slightly down on prior year, at £13.3m (vs. £13.4m LY)
- Very small Director shareholdings & unusual to have Executive Chairman (no CEO)
Major Shareholders
Unusually, Vislink only discloses the nominees for >3% shareholders. We need to check with the NOMAD whether that is permitted, as surely they should be disclosing the beneficial owners, not the intermediary?
These are the latest >3% shareholdings as stated on Morningstar on 22 Jun 2013:
- Ferlim Nominees 25.2%
- Barclays Stockbrokers 6.6%
- HSBC Global Custody Nominees 4.1%
- L R Nominees 3.7%
- TD Waterhouse 3.7%
Pension deficit?
Freehold property?
Anything else I should include here?
Please add your comments & any additional information you find to this discussion thread below.
If possible, can we try to stick to useful & factual posts only, and not "ooh the price has gone down 1p, level 2 firming up, etc" type posts, which are just clutter that obscure more useful posts.
Cheers, Paul.
Disclaimer
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6 comments
I reviewed Vislink (LON:VLK) interim results to 30 Jun 2013 here:
http://www.stockopedia.com/content/small-cap-value-report-29-aug-vlk-pgb-76675/
Dear Paul
Thank you for your daily comments. Having heard John Hawkins in his recent video and noting that he was the CEO of Anite when he brought it from a loss of £68m to a profit of £30m I am glad that he appears to have a hands on managment style bearing in mind that this is a turnaround situation. The video may give us some guidance on what to expect this year from VLK. Revenue for 2012 is not easy to evaluate. The sales for 2012 were £57.2m being UK £37.8m, US £25.3m both less inter-segmental items £5.9m (I'm not sure what these comprise), split broadly 56% UK and 43% US. Broadcast revenue was £47.1m being UK and Europe £12.3m, Americas £20.3m, Middle East and Africa £8.1m and Asia Pacific £6.4m. Surveillance total sales were £10.1m of which £2m was contributed by Gigawave bought in 2011. Operating profit was £3.1m being UK £4.9m, US.£0.4m and central costs were £2.2m. We are told that the bulk of the surveillance business was in the US directly/indirectly to the government.The numbers are a skewed, I think because a number of sales to other countries go through the US. The goal of VLK, stated in its accounts, is to grow the business to sales of £80m and operating profit of 10% and this was repeated by JH in the video but he did say that he expected growth by 2014 to £65m, a tad more than shown in the Stockopedia estimates and that he would expect an acquisition to produce another £15m sales and profits of £3m With regard to the proposed increase in profits from £3.1m to £5m he said that cost reductions were coming through in both broadcast and surveillance and that all major regions were profitable from business perspectives. He also implied that economies of scale were showing benefits when he said that the growing pipeline could produce profits of £300/400k on each £1m earned. JH said that the short term managment bonuses were geared to analyst's forcasts of £4.2m profits. The current brokers' forcasts are for 2013 profits to be £3.15m and £3.5m for 2014. Brokers' estimates are frequently short of the mark it being better not to be over optimistic.It seems reasonable to expect that these may be exceeded because the benefit of year on year R&D of circa £5m + increased sales, particularly in the US, combined with cost cutting. There has been no suggestion that sales in the US and consequently profits are causing concern, on the contrary, JH said that he expected formal approval of surveillance equipment by the US goverment in Q3 this year, presumably for sales direct to the government by VLK and that surveillance sales would reach £20m by the end of 2014. The annual report considered that debtors could be a problem but VLK was taking action by restricting credit and obtaining upfront payments where appropriate; in addition currency fluctuations could have a material effect on growing sales to the US. The outlook looks good for VLK and in my view the prospective earnings are justified and there is good reason to believe they will be exceeded. Best wishes, Delpher
Dear Paul
You mentioned in you daily stock report, that you went to a presentation by VLK yesterday evening, could we have some feedback please?
Regards
M51
Hi M51,
Better still, you can watch the presentation yourself, Equity Development have published a video of last night's company presentation from Vislink (requires registration):
http://equitydevelopment.co.uk/index.php?p=research/company/229/1/Vislink
It gives a good overview of the company, and in my view sounds potentially exciting about their growth plans. The Chairman's delivery is fairly flat, but that's just his style.
Cheers, Paul.
Dear Paul
Thank you for the link, just watched the presentation, lots to like, hope they can achieve their objectives. Another share, I have been looking at FRP - you wrote about it on the 3rd June, how do you see the value, now the price has softened a tad?
Kind regards
M51
Hi M51,
I agree there's a lot to like with VLK, if they achieve their objectives. No guarantees of course, we'll just have to see how it pans out.
This thread is company specific to Vislink (LON:VLK), so I won't comment on Fairpoint here, but just do a search to view my recent comments on it, if that's OK.
Cheers, Paul.