Vislink's cutting edge technology enables the collection of high quality live video, wirelessly, from the "scene to the screen". Its two core markets are broadcast (80% of sales; news, sport and entertainment) and surveillance (20%; law enforcement, armed forces and public safety).
Today's 2013 prelims were in line with consensus, registering positive y-o-y trends in orders £60.1m (+20.1%), sales £59.9m (+4.7%), EBITA £4.3m (+40.3%), margins 7.2% (vs 5.4% 2012) and adjusted EPS 3.2p (+45.5%). Net cash closed December at £3.7m, with the dividend steady at 1.25p, reflecting favourable future growth opportunities.
Vislink is the leading player and product leader in the £232m broadcast market, enjoying a c.20% share. The company further extended its reach into studio applications last week by snapping up Pebble Beach Systems (PBS) for £9m on a cash/debt free basis. PBS is a leading global developer of digital archiving, content management and automated play-out software for TV broadcasters, cable and satellite operators.
Outside of broadcasting, Vislink is also leveraging its expertise into the £200m surveillance/defence sector, where the police and armed forces require real-time information to respond quickly to events.
Going forward, we believe the stock could be set for a break-out year. Indeed, based on a 13x 2016 EBITA multiple, discounting back at 12% and adjusting for proforma net debt of £3.3m - we initiate coverage with a target price of 70p/share, versus 49p last closing price.