Vislink: Fast-Forward On Transition To Software
Edison | Jul 28, 2016 06:27AM ET
Vislink Plc (LON:VLK) has announced that FY16 performance will be materially below previous estimates because of weakness in the hardware division (VCS). Management has instigated a restructuring of this division, accelerating the transformation of the group into one where two-thirds of operating profits are derived from software activities. Progress executing this transformation should prompt a partial recovery in the share price.
VCS division underperforming
VCS sales during H116 were below management expectations for a combination of reasons discussed later, which were specific to this division. Management expects this divisional underperformance to continue into H216. In addition, H116 sales from the software division, Pebble Beach Systems (PBS), were below management expectations, though since this was related to contract decisions slipping from Q2 to Q3, and activity levels are strong, management expects the division to meet its expectations for the full year. We revise our estimates accordingly.
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