2014 Half Year Results

Transcription

1 VISLINK Live Video that Captivates 2014 Half Year Results 2 September 2014

2 Agenda Overview & What We Do Financial Review Operational and Strategic Review John Hawkins Ian Davies John Hawkins Question and Answer Session Appendices: Our Business Financial Information 2

3 Overview Hardware The broadcast market has been challenging for our hardware business. We have taken timely action to reduce costs. Brands We have also seen an improved trading trend, with the order book strengthened in Q2. Our MSAT satellite communications system has achieved WGS certification. This provides significantly improved opportunities for revenues effectively doubles the size of the available market. Strategic partnership with TVU Networks gives us the unique ability to combine best-in-class transmission solutions with a powerful back end distribution, delivering end to end video solutions. Software 18 March Acquisition of Pebble Beach Systems (PBS), a leading provider of automation, channel in a box and content management solutions for broadcasters and satellite and cable operators for a net consideration of 9m. Post acquisition Pebble Beach Systems has traded ahead of management expectations. Post Period End Tuesday 2nd September Announced new OEM agreement with Harmonic Inc. (Nasdaq: HLIT), a worldwide leader in video delivery infrastructure for emerging television and video services. The partnership will enable Harmonic to sell packages, integrated with PBS systems, to the international broadcast market. The partnership will also result in Harmonic placing orders valued at 2m in 2014 and sees Harmonic acquiring four million Vislink shares priced at 50p via way of a placing. 3

4 HARDWARE TECHNOLOGY 4

5 SOFTWARE SOLUTIONS Pebble Beach Systems solutions control Content Acquisition, Management and Delivery.for broadcasters worldwide Business Management Content Acquisition Content Delivery Multi-Channel Control Final Standings Customer Benefits: Enables asset monetisation, significantly improved functionality, reduced headcounts, faster channel launches, greater reliability 5

6 FINANCIAL REVIEW IAN DAVIES 6

7 Results Overview Results for the six months ended 30 June m m Order intake Revenue Adjusted operating profit Adjusted operating margin 1 6.3% 7.2% Adjusted profit before tax Reported operating profit and profit before tax Adjusted earnings per share 1 1.2p 1.8p Reported earnings per share 1.7p 1.3p Cash generated from operating activities Net (debt)/cash (0.3) Adjusted to exclude the amortisation and impairment of goodwill and acquired intangibles, and other non-recurring costs. 7

8 Revenue Bridge 8

9 Operating Profit Bridge H adjusted operating profit 1.7 million (H1 2013: profit of 2.0 million) Overall gross margin up by 1.2pts to 42.8% Acquisitions contribute 1.5m adjusted operating profit in H1 9

10 Capitilsed/Amortisation NBV Millions Investment in New Technologies Capitalised Development Costs H1 FY13 H2 FY13 H1 FY Capitalised Development Costs NBV Development Costs Amortisation of Development Costs 10

11 Cash Flow and New Facility New 10.0 million debt facility in March m utilised to acquire Pebble Beach Systems in H Net Debt of 0.3m at June 14 11

12 Financial Summary Order intake of 33.3m Revenue of 27.1m Adjusted Operating Profit Book to bill of m 1.4m 1.7m 2.0m 2.3m 1.7m Adjusted operating profit of 1.7m Adjusted operating profit up 3.4% on a constant currency basis 2010H H H1 ( 1.9m) 2011 H H H H1 2013H H1 Group generated 5.5m of cash, with Net Debt of only 0.3m Adjusted Earnings per Share of 1.2p* ( 5.1m) ( 3.3m) *Adjusted operating profit is operating profit from continuing operations before the amortisation and impairment of acquired intangibles, and other non-recurring costs. Adjusted earnings per share is calculated on the same basis after taking account of related tax effects. 12

13 OPERATIONAL AND STRATEGIC REVIEW JOHN HAWKINS 13

14 HARDWARE TECHNOLOGY Broadcast, Security and Defence Broadcast Against the background of a low opening order book and a relatively low order intake in Q1 FY14, hardware revenue improved towards the end of the half. Action to reduce costs in the hardware business and the benefits of this will be seen in the second half. We have retained our strong engineering base and channels to market, which are also being strengthened by our strategic partnerships. Brands Surveillance, Security and Defence Our hardware surveillance business continues to see good opportunities. Early in 2014 we won a multimillion pound contract in public safety in the UK which will significantly contribute to our operating profit in the financial year The long decision cycles has resulted in some key surveillance hardware opportunities moving into the second half of the financial year. Amplifier Technology earn targets were not achieved, however, the Group sees good opportunities. We were also pleased to announce in the period a key strategic partnership with TVU Networks. 14

15 HARDWARE TECHNOLOGY VISLINK and TVU Partnership 15

16 ACQUISITION OF PEBBLE BEACH SYSTEMS

17 SOFTWARE SOLUTIONS Pebble Beach Systems Market-leading software products, Automation products suitable for multichannel playout as well as high pressure live programming such as news or sports. Supporting new technologies such as IPTV and interactive television. Clients include TV Globo Brazil, MBC UAE, Fox News, Banderaintes Brazil, OSN UAE, Viasat UK and ZDF Germany - installations in over 60 countries. Brands Total consideration of 14.9m 12.9m in cash and 2.0m in new Vislink ordinary shares. Purchased with in excess of 6.0m cash on the balance sheet. Resulting in an effective net consideration of 9.0m. Strong performance post acquisition (18 March 2014) Revenue of 3.1m in three and a half months. Resulting in profit of 1.1m. Ahead of management expectations. 17

18 SOFTWARE SOLUTIONS New Agreement with Harmonic Inc New OEM agreement with Harmonic Inc announced Tuesday 2 nd September. Harmonic (Nasdaq:HLIT) is the worldwide leader in video delivery infrastructure for emerging television and video services. The Company s production-ready innovation enables content and service providers to efficiently create, prepare, and deliver differentiated services for television and new media video platforms. The agreement will enable Harmonic to sell, via a single point, a series of integrated packages designed to deliver premium channel in a box solutions with automation, to the international broadcast market. The packages, which combine the benefits of Pebble Beach Systems marketleading Marina next generation automation system with Harmonic s widely adopted integrated channel devices. Harmonic Inc and Pebble Beach Systems will also work closely together to develop bespoke solutions and cross sell each other s products. Brands 18

19 SOFTWARE SOLUTIONS New Agreement with Harmonic Inc Deal structure A three year agreement with the ability to extend for a further two years. As part of the deal, Harmonic Inc will place orders valued at 2.0m in 2014 to secure product for onward sale in its integrated packages. This will also result in a positive cash flow in H2 FY14. Brands Investment In parallel with the strategic supply partnership, Harmonic Inc has decided to acquire four million shares in Vislink Plc at 50 pence per share. Strategic Rational The agreement is another key strategic partnership for Vislink Plc and reinforces its strategy of moving into Software and providing Product Leadership and Complete Customer Solutions across its businesses. The agreement will also accelerate the market insight and channels to market of two successful groups. 19

20 Strategy: Goal and Roadmap Restructuring and cost reduction with margin improvements Improve service & support Return to quarterly profits Acquisition of Gigawave Profitable organic growth through focus on specific geographic regions Partnerships to expand vertical exploitation of technology Bolt on acquisition Strategic partnerships Cellular & IP products launched Maintain focus on organic growth Develop recurring revenue Revenue of 80m Minimum adjusted operating profit margin of 10% Move into Software Develop recurring revenue Surveillance, Security and Defence - Target Revenues > 25% Acquisitions and Partnerships To support strategy 20

21 Margins Expansion of Available Market Core Surveillance Broadcast Cellular Estimated 50m Play-out Automation (inc. CiaB) Estimated 200m Core Broadcast 230m* K4one 200m* K4one Cash generation 21

22 Outlook Our markets continue to be challenging, however Vislink enters the second half of 2014 buoyed by a solid order book and pipeline, with the Group set to benefit from: New software business performing strongly. WGS certification for MSAT. Multimillion pound contract in UK public safety, further delivery in H2. New OEM with Harmonic agreement with orders placed in H2. Move to AIM (January 2014), easing the financial burden of making acquisitions. Brands 2014 is a transitional and transformational year for the Vislink Group, with the acquisition of our software division and the announcement of the strategic agreement with Harmonic Inc. As the proportion of our business coming from higher margin software becomes more significant, the target revenue needed to generate our long noted operating profit target will change. The Company remains committed to its target operating profit of 8m through both organic growth and bolt-on acquisitions. The Board remains confident about continuing to trade in line with market expectations and the future prospects for the Group 22

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24 Appendices 24

25 Consolidated statement of profit or loss Review of trading H m H1 FY13 m Revenue Cost of sales (15.5) (16.3) Gross profit Sales and marketing (4.3) (5.0) Research and development (2.2) (2.1) Administrative costs (3.4) (2.6) Other income/(expense) 0.4 (0.6) Operating profit Operating profit is analysed as: Adjusted operating profit amortisation of acquired intangibles (0.9) (0.6) Net non-recurring income

26 Consolidated statement of financial position Balance Sheet H FY13 m Delta m m Non-current assets Intangible assets Property, plant and equipment Deferred tax assets (1.5) Net current assets Inventories Trade & other receivables (0.2) Cash Current liabilities (22.4) (13.5) (8.9) (4.1) Non-current liabilities (6.3) (3.2) (3.1) Net assets Number of shares in issue ('million) Net asset value per share (pence)

27 Consolidated statement of cash flows Cash-flow H FY13 m m Cash-flows from operating activities Cash generated from operations Taxation (paid)/received (0.1) (0.1) Net cash generated from operating activities Cash-flows from investing activities Acquisition of subsidiary (net of cash acquired) (7.0) (2.0) Deferred consideration in respect of acquisition 0.0 (0.4) Proceeds from sale of property, plant and equipment Purchase of property, plant and equipment (0.5) (0.5) Expenditure on capitalised development costs (2.0) (4.5) Net cash used in investing activities (9.5) (7.3) Cash-flows from financing activities New Borrowings Dividend paid to shareholders 0.0 (1.4) Net cash generated/(used) in financing activities 8.0 (1.4) Net increase/(decrease) in cash and cash equivalents 4.0 (4.5) Effect of foreign exchange rate changes Cash and cash equivalents at 1 January Cash and cash equivalents Net Debt (0.3)

28 Come visit us at IBC 2014, stand 1.A69 and stand 8.C71 28