Vislink - An idea for your ISA. Tuesday's Report on UK-Analyst is from t1ps.com

Vislink - An idea for your ISA A report from t1ps.com Today on UK-Analyst.com we bring you an exclusive report on Vislink, one of t1ps.com's ISA ideas of the month for August. Every month the analysts at t1ps provide two research reports on shares which have good growth potential, frequently offer a decent dividend yield and which they believe are ideal for tucking away in a stocks & shares ISA. And that's not all! Every year t1ps.com also offers 20 hot new tips, with frequent updates on their progress, along with "buy", "hold" and "sell" investment advice. Subscribers to t1ps also benefit from the thrice weekly diaries of infamous bear raider Evil Knievil, reviews of the latest IPOs, a free ticket to the UK's top investment show, Master Investor, worth £49.99 and lots lots more.... While the success of the tips on t1ps.com varies, and some have gone down in value, from the beginning of the site in the summer of 2000 to the end of May 2012 the average gain per tip on t1ps.com was 42.7%, with an average holding period of 35 months. This excludes the bid-offer spread and dealing costs, but also dividends, which in various cases have been/are substantial. To see all this for as little as £73 for a year's membership... CLICK HERE to join t1ps.com now And here's why the t1ps analysts Vislink is a stock to watch... Vislink (VLK) is a global technology business specialising in secure communications and services for the news & entertainment and law enforcement & public safety markets; its products include microwave radio, satellite transmission and wireless camera systems. The group's strategic focus is the design, manufacture, sale, installation and maintenance of wireless, video and IP technologies together with the supporting management systems. Following a restructuring conducted by a reinvigorated management team, the company has set itself the target of profitable growth to annualised revenues of £80 million within three years, with an adjusted operating profit margin of 10%. The firm holds a 20% share of the global broadcast contribution sector, which remains a very fragmented market, pointing to further bolt-on acquisitions in the future. Now that the 'heavy lifting' of restructuring is behind it, Vislink can concentrate on moving towards its operational goals. The turnaround in profitability during the second half of 2011 was impressive, and was accompanied by significant progress with gross margins (42.6% vs 39% in H1). It is also worth noting that this was achieved despite only 4% growth in underlying sales (due to weakness in developed markets) and that Gigawave, acquired in June 2011, did not contribute to the recovery in profits. With this in mind, there is plenty of room for outperformance in 2012, flowing from a £1.4 million reduction in overheads following the integration of Gigawave, decent growth in emerging markets and a potential recovery in developed markets. Revenues from continuing operations came in 16.7% higher at £50.3 million in 2011 (up 4% on an underlying basis i.e. excluding the acquisition of Gigawave), while the adjusted (pre-amortisation of intangibles and non-recurring costs) operating loss was reduced to just £0.2 million from £8.4 million in 2010. Moreover, the company recorded an adjusted operating profit of £1.7 million for the second half compared to a £1.9 million loss in first half, demonstrating the significant progress made in turning the company around, and reflecting a 22% reduction in total underlying operating costs to £22.7 million. After returning £6.6 million to shareholders (£5.2 million through a tender offer and the rest through dividends), expending a net £5 million through investing activities (including £3.8 million on acquiring Gigawave) and paying off £0.9 million of debt, while generating a net £0.5 million from operating activities, the net cash position fell from £22.2 million to £10 million as of 31st December 2011. Meanwhile, the order book stood at £12.4 million at period end, up from £6.6 million a year earlier. Risk Warning: The value of investments can go down as well as up. Investing in equities can lose you part or all of your capital. Smaller company shares can be relatively illiquid and thus hard to trade. And that makes such investments more of a high risk than larger company shares. Financial spread betting is high risk activity, losses from which are potentially unlimited. UK-Analyst.com is owned by t1ps.com Ltd which is authorised and regulated by the Financial Services Authority and can be contacted at Third Floor, 3 London Wall Buildings, London EC2M 5SY. This year, Vislink traded profitably and in line with management expectations for the quarter ended 31st March 2012, with revenue coming in at £13.7 million (+61% reported and +37% underlying) and an order intake of £13.4 million (+43% reported and +16% underlying). This is clearly a very healthy performance and was achieved through good growth in both broadcast and surveillance markets. Net cash at period end stood at £8.7 million, with the reduction partly due to the £0.5 million deferred consideration for Gigawave. “Assuming the business hits its target and a 10x PER rating, would suggest a realistic share price target above 50p”, notes broker Northland. Singer concurs: “Note that management is targeting £80m of revenues and £8m EBIT (10% operating margin) by 2014, which is significantly above our current estimates. Continued evidence that it can deliver close to these medium-term targets should result in significant upside.” Broker Singer anticipates an adjusted pre-tax profit of £2.7 million during the current year, rising to £4.2 million in 2013. Earnings per share estimates of 1.7p for 2012 and 2.7p for 2013 imply respective headline multiples of 19.4 and 12.2, but this is before taking into account net cash, which currently accounts for just under a third of the market cap. A maintained dividend payment of 1.25p adds a prospective yield of c.3.8% into the bargain. There is an interesting re-rating underway here, which we believe has the potential to continue for some time if the firm can meet its targets over the medium term. For more ISA ideas, share tips, investment advice and lots, lots more... CLICK HERE to join t1ps.com now

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