REG - Vislink PLC - Half year results <Origin Href="QuoteRef">VLK.L</Origin> - Part 2
30/09/2016 07:08
- Part 2: For the preceding part double click ID:nRSd2747La
recoverable against future profits.
7. DIVIDENDS
No interim dividend is proposed for the period. In respect of 2015 there was
no interim dividend and the final dividend of 1.5 pence per share was approved
at the Group's Annual General Meeting on 20 May 2016 and paid on 18 July 2016.
The total cash cost of the dividend was £1.8 million.
8. EARNINGS PER ORDINARY SHARE
Basic earnings per share is calculated by dividing the earnings attributable
to ordinary shareholders by the weighted average number of ordinary shares
outstanding during the period, excluding those held in the employee share
trust which are treated as cancelled. Earnings per share is calculated by
reference to a weighted average of 121,977,000 ordinary shares in issue during
the period (30 June 2015: 121,844,000 and 31 December 2015: 121,910,000).
For diluted earnings per share the weighted average number of ordinary shares
in issue is adjusted to assume conversion of all dilutive potential ordinary
shares. The dilutive shares are those share options granted to employees where
the exercise price is less than the average market price of the company's
ordinary shares during the period. At 30 June 2016 there were 2,704,000
dilutive share options (30 June 2015: 2,756,000 and 31 December 2015:
2,784,000) and the diluted loss per share was 26.9 pence (H1 2015: 0.4 pence)
compared to the basic loss per share of 26.9 pence (H1 2015: 0.4 pence).
Adjusted earnings
The directors believe that the adjusted operating profit, adjusted profit
before tax, adjusted earnings and adjusted earnings per share provide
additional useful information on underlying trends to shareholders. These
measures are used by management for internal performance analysis and
incentive compensation arrangements. The term "adjusted" is not a defined term
used under IFRS and may not therefore be comparable with similarly titled
profit measurements reported by other companies. The principal adjustments are
made in respect of the amortisation of acquired intangibles, impairment of
goodwill and non-recurring costs and their related tax effects.
The reconciliation between reported and adjusted earnings and basic earnings
per share for the continuing business is shown below:
Six months to Six months to Year ended
30 June 2016 30 June 2015 31 December 2015
Pence per share Pence per share Pence per share
£000 £000 £000
Reported (loss) / earnings per share (32,774) (26.9) (459) (0.4) (903) (0.7)p
Amortisation of acquired intangibles after tax 24,091 19.8 1,020 0.8 2,188 1.7p
Non-recurring costs after tax 5,087 4.2 1,382 1.2 2,449 2.0p
Adjusted (loss) / earnings per share (3,596) (2.9) 1,943 1.6 3,734 3.0p
9. PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASSETS
Six months to 30 June 2016 Six months to 30 June 2015 Year ended 31 December 2015
(Unaudited) (Unaudited) (Audited)
£000 £000 £000
Property, plant and equipment
Opening net book value as at 1 January 2,201 2,665 2,665
Additions 158 359 605
Disposals - (341) (339)
Depreciation (358) (421) (761)
Exchange adjustment 40 6 31
Closing net book value 2,041 2,268 2,201
Intangible assets
Capitalised development costs
Opening net book value as at 1 January 10,091 9,441 9,441
Additions 1,886 1,737 3,582
Amortisation (1,551) (1,411) (3,224)
Impairment (793) - -
Exchange adjustment 536 (37) 292
Capitalised development costs closing net book value 10,169 9,730 10,091
Goodwill and acquired intangible assets
Opening net book value as at 1 January 32,200 34,242 34,242
Additions - - 99
Disposals (99) (66) (61)
Amortisation and impairment (24,509) (1,210) (2,404)
Exchange adjustment 223 (48) 324
Goodwill and acquired intangible assets closing net book value 7,815 32,918 32,200
Total closing net book value of intangible assets 17,984 42,648 42,291
Historical goodwill acquired in business combinations was allocated, at
acquisition, to the cash-generating units (CGUs) that were expected to benefit
from those business combinations, being the markets that the Group serves,
namely Broadcast, Surveillance and Public Safety, Amplifier Technology Limited
and Pebble Beach Systems Limited.
In accordance with the requirements of IAS 36 "Impairment of assets", goodwill
is required to be tested for impairment on an annual basis or when there is a
triggering event, with reference to the value of the cash-generating units in
question. The downturn in trading performance is considered to be a trigger
and an impairment review has been performed. The goodwill relating to the
Surveillance and Public Safety market was fully written down in 2010. The
Group acquired Amplifier Technology in 2013 which is a separate CGU and Pebble
Beach Systems in 2014 which is also a separate CGU, therefore impairment
reviews have been undertaken in respect of the Broadcast market and Amplifier
Technology. No impairment trigger is considered to exist for Pebble Beach
Systems. The carrying value of goodwill at 30 June 2016 is £3.3 million (2015:
£25.0 million) consisting of £nil for the Broadcast market (2015: £20.6
million), £nil for Amplifier Technology (2015: £1.1 million) and £3.3 million
for Pebble Beach Systems (2015: £3.3 million).
The carrying value of all CGUs (including goodwill) have been assessed with
reference to value in use over a projected period of four and a half years,
along with a terminal value. This reflects projected cash flows based on
management projections.
The key assumptions on which the value in use calculations are based relate to
business performance over the next four and a half years, long term growth
rates beyond 2016 and the discount rate applied. It has been assumed there
will be no long term growth of either Amplifier Technology or Broadcast and
growth of 3% for Pebble Beach Systems. In accordance with accounting
standards, it has also been assumed that there will be no savings resulting
from future restructuring which is yet to occur.
A pre-tax discount rate of 8.9 per cent (2014: 14.6 per cent) has been used.
In respect of the Broadcast market and Amplifier Technology the value in use
was found to be lower than the carrying value resulting in the impairment of
goodwill of £20.6m for Broadcast and £1.1m for Amplifier Technology.
10. CASH, BORROWINGS AND LOANS
The movements in cash and cash equivalents (net of overdrafts), borrowings and
loans in the period were as follows:
Net cash and cash equivalents Other borrowings Total net cash
£000 £000 £000
Six months ended 30 June 2016
At 1 January 2016 3,251 (9,000) (5,749)
Cash flow for the period before financing (3,209) - (3,209)
Movement in borrowings in the period 3,000 (3,000) -
Exchange rate adjustments 130 - 130
At 30 June 2016 3,172 (12,000) (8,828)
Six months ended 30 June 2015
At 1 January 2015 8,380 (8,000) 380
Cash flow for the period before financing (1,558) - (1,558)
Movement in borrowings in the period (600) 600 -
Exchange rate adjustments (42) - (42)
At 30 June 2015 6,180 (7,400) (1,220)
Year ended 31 December 2015
At 1 January 2015 8,380 (8,000) 380
Cash flow for the period before financing (4,346) - (4,346)
Movement in borrowings in the year 1,000 (1,000) -
Dividend paid to shareholders (1,830) - (1,830)
Exchange rate adjustments 47 - 47
At 31 December 2015 3,251 (9,000) (5,749)
The Group held cash of £3.2 million at the period-end and taken together with
the outstanding debt of £12.0 million, there was a net debt position of £8.8
million.
11. PROVISIONS FOR OTHER LIABILITIES AND CHARGES
Six months to 30 June 2016 Six months to 30 June 2015 Year ended 31 December 2015
(Unaudited) (Unaudited) (Audited)
£000 £000 £000
Warranty provision 199 269 188
Property provision 410 171 504
Rationalisation provision - 293 -
609 733 692
Amounts due within one year 537 733 272
Amounts due after one year 72 - 420
609 733 692
Warranty provisions are made in respect of the expected future warranty costs
in certain businesses based on historic actual costs. Warranty periods on
products are generally between one and two years.
The property provision consists of a provision for vacated leasehold
properties acquired as part of the Gigawave acquisition and a vacated property
provision for the Vislink International Hemel Hempstead site, created as a
result of the restructuring that was conducted in 2015.
The current period property provision movement relates to the release of some
of the vacant property provision for the Vislink International Hemel Hempstead
site.
The property provision represents the estimated future liabilities associated
with the properties.
12. NOTES TO THE CASH FLOW STATEMENT
Net cash flow from operating activities comprises:
Six months to 30 June 2016 Six months to 30 June 2015 Year ended 31 December 2015
(Unaudited) (Unaudited) (Audited)
£000 £000 £000
Loss before tax (32,162) (881) (994)
Depreciation 358 421 761
Profit on disposal of property, plant and equipment - (50) -
Amortisation and impairment of development costs 2,344 1,411 3,224
Amortisation and impairment of goodwill and acquired intangibles 24,509 1,209 2,404
Share based payment expenses 292 287 (43)
Finance income from continuing operations (2) (4) (8)
Finance costs from continuing operations 155 107 248
(Increase)/decrease in inventories 5,084 (1,258) 557
Decrease/(increase) in trade and other receivables 1,243 712 (2,411)
Decrease in payables (2,547) (1,301) (3,261)
(Decrease)/increase in provisions (93) 176 128
Net cash (outflow)/inflow from operating activities (819) 829 605
13. FOREIGN EXCHANGE RATES
The principal exchange rates used by the Group in translating overseas profits
and net assets into GBP are set out in the table below.
Six months to 30 June 2016 Six months to 30 June 2015 Year ended 31 December 2015
(Unaudited) (Unaudited) (Audited)
Average rate for the period
US dollar 1.4325 1.5151 1.5286
Period end rate
US dollar 1.3429 1.5729 1.4819
Independent review report to Vislink Plc
Report on the consolidated interim financial statements
Our conclusion
We have reviewed Vislink Plc's consolidated interim financial statements (the
"interim financial statements") in the half year results of Vislink Plc for
the 6 month period ended 30 June 2016. Based on our review, nothing has come
to our attention that causes us to believe that the interim financial
statements are not prepared, in all material respects, in accordance with
International Accounting Standard 34, 'Interim Financial Reporting', as
adopted by the European Union and the AIM Rules for Companies.
Emphasis of matter
Without modifying our conclusion on the interim financial statements, we have
considered the adequacy of the disclosure made in the basis of preparation
note made in note 2 to the consolidated interim financial information
concerning the Group's ability to continue as a going concern, and the
uncertainty regarding the ongoing support of the group's bankers. This
condition, along with the other matters explained in note 2 to the
consolidated interim financial information, indicate the existence of a
material uncertainty which may cast significant doubt about the group's
ability to continue as a going concern. The consolidated interim financial
information does not include the adjustments that would result if the company
was unable to continue as a going concern.
What we have reviewed
The interim financial statements comprise:
the consolidated group statement of financial position as at 30 June 2016;
the consolidated group income statement and consolidated statement of
comprehensive income for the period then
ended;
the consolidated group cash flow statement for the period then ended;
the consolidated statement of changes in shareholders equity for the period
then ended; and
the explanatory notes to the interim financial statements.
The interim financial statements included in the half year results have been
prepared in accordance with International Accounting Standard 34, 'Interim
Financial Reporting', as adopted by the European Union and the AIM Rules for
Companies.
As disclosed in note 2 to the interim financial statements, the financial
reporting framework that has been applied in the preparation of the full
annual financial statements of the Group is applicable law and International
Financial Reporting Standards (IFRSs) as adopted by the European Union.
Responsibilities for the interim financial statements and the review
Our responsibilities and those of the directors
The half year results, including the interim financial statements, is the
responsibility of, and has been approved by, the directors. The directors are
responsible for preparing the half year results in accordance with the AIM
Rules for Companies which require that the financial information must be
presented and prepared in a form consistent with that which will be adopted in
the company's annual financial statements.
Our responsibility is to express a conclusion on the interim financial
statements in the half year results based on our review. This report,
including the conclusion, has been prepared for and only for the company for
the purpose of complying with the AIM Rules for Companies and for no other
purpose. We do not, in giving this conclusion, accept or assume
responsibility for any other purpose or to any other person to whom this
report is shown or into whose hands it may come save where expressly agreed by
our prior consent in writing.
What a review of interim financial statements involves
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information
Performed by the Independent Auditor of the Entity' issued by the Auditing
Practices Board for use in the United Kingdom. A review of interim financial
information consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures.
A review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (UK and Ireland) and, consequently,
does not enable us to obtain assurance that we would become aware of all
significant matters that might be identified in an audit. Accordingly, we do
not express an audit opinion.
We have read the other information contained in the half year results and
considered whether it contains any apparent misstatements or material
inconsistencies with the information in the interim financial statements.
PricewaterhouseCoopers LLP
Chartered Accountants
Bristol
29 September 2016
a) The maintenance and integrity of the Vislink Plc website is the
responsibility of the directors; the work carried out by the auditors does not
involve consideration of these matters and, accordingly, the auditors accept
no responsibility for any changes that may have occurred to the interim
financial statements since they were initially presented on the website.
b) Legislation in the United Kingdom governing the preparation and
dissemination of financial statements may differ from legislation in other
jurisdictions.
This information is provided by RNS
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