6th Jul 2016 07:31
LONDON (Alliance News) - Vislink PLC on Wednesday said full-year results will be materially below previous estimates as a lower-than-expected trading performance in the first half of 2016 is anticipated to continue into the second half.
Shares in Vislink were trading down 39% at 20.10 pence on Wednesday morning following the announcement.
Vislink, which provides technology services to the broadcasting, surveillance and public safety markets, said it experienced a slower order intake in the software division Pebble Beach Systems in the second quarter, while sales in Vislink Communication Systems also were below management expectations.
Vislink expects a stronger order intake for Pebble Beach Systems in the third quarter, meaning that division should still meet management expectations for the full year, but Vislink Communication Systems' weak performance is expected to carry on into the second half.
Restructuring plans as the company transitions to a software and services business will incur a non-cash write-off between GBP6 million and GBP9 million, although this will eventually result in a "more focused range of products", Vislink said, while further reducing costs by GBP1 million to GBP2 million per year.
Vislink added that its bank has agreed to defer covenant tests until the end of July from the end of June due to Vislink's worse-than-expected trading.
It will also review its dividend policy in light of the restructuring plans and will provide further information on this when it releases its first-half results.
"As the lower than expected trading performance of VCS in the first half is expected to continue into the second half, the board believes that the financial performance of the group for the full year will be materially below previous estimates," Vislink said in a statement.
"The group remains focused on transitioning to a software and services business, represented by increasing visibility of revenues and accordingly will continue to invest in PBS to deliver organic growth whilst growing our software division through acquisitions," the company added.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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