Although we dont believe in timing the market or panicking over every stock fluctuation, understanding how a business is performing, competing and changing is vital to sensible investment.
Shares in Vislink(LSE: VLK) a company that provides high-quality video technology to the media, law enforcement and defence markets are currently down over15% in trading so far today, following publication of the companys results for the first half of 2014.
Adjust operating profit fell 15%, down to 1.7m, affected by adverse exchange rates (it was up 3.4% on a constant currency basis), on revenue that dipped 3.2%, to 27.1m.
Cash generation from operations rose almost 250%, up to 5.5m, and 33.3m of orders were received during the period, marginally down in real terms on H1 2013s 33.6m. Within that, orders received from the broadcast market fell 10.2%, to 21.1m, but surveillance-related orders soared 107%, to 11.8m.
The company reported a thatits software division is trading ahead of expectationsand that it expects acontinued strong performancefrom it in the second half. But Vislink said that delays to surveillance-related contracts and a broadcast market it described as uncertain had affected its hardware business.
Adjusted earnings per share (EPS) were down 33%, at 1.2p, and, as in previous years, the board did not recommend an interim dividend.
Commenting on the results, executive chairman John Hawkins said:
Whilst the broadcast market has been challenging for our hardware business, overall, we are encouraged with these results.
2014 represents a transitional and transformational year for the Group and with the increasing focus on our software division, we believe that this will enhance the Groups overall quality of earnings in 2014 and beyond.
The Group continues to trade in line with market expectations and the Board remains confident for the future prospects for the Group.
In a separate announcement, Vislink revealedthat its wholly-owned Pebble Beach subsidiary had signed a partnership agreement, worth an initial 2m of software orders, withHarmonic Inc, a global leader in video delivery infrastructures. Alongside thepartnershipdeal Harmonic will also be subscribing for 4m new shares in Vislink, at 50p per share, giving Harmonic a3.26% interest. Vislink says it will use the proceeds of the issueto strengthen its balance sheet.
Vislinks share price is now down 3.2% on this time last year, during which time theAIM All-Share index has gone up3%. However, over the past five years Vislink has left itsindex trailing, rising 70% compared with the AIM All-Shares 32% increase.
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Jon Wallis owns shares of Vislink. The Motley Fool UK has no position in any of the shares mentioned. We Fools don’t all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.