Time looks to be finally up for Vislink (VLK:AIM) and a sale of the broadcast and public safety wireless specialist looks like its best option. Beleaguered shareholders can only pray that the business can attract buyers.

A 15% fall in half year revenues and a £1.1m slump into the operating red barely scratch the surface of its problems. The immediate issue is shoring up a battered balance sheet to ensure that there is something left to salvage after breaching bank covenants which, in a worst case scenario, could jeopardise the company's very survival.

Vislink studio camera

Optimistic projections around the sales pipeline of its software business Pebble Beach Systems pail versus a cost-saving restructuring of Vislink Communication Systems (VCS) and axed dividends until bank debt hits one-times EBITDA. Management have some tricky talks with lenders ahead and, after today's share price collapse - down 45% to 8.75p – presumably wit major shareholders too. Vislink is now valued at barely £12m.

If investors are spitting feathers at least they are in the company of John Hawkins too. In March the Vislink executive chairman put close on £100,000 of his own cash into the business when the share price was at 27.75p, the fifth time he has done so, but his luck hasn't got any better.


Massive forecasts cuts are flooding through. 'We are taking a further cut to our VCS forecasts and now expect the group as a whole to be loss-making in full year 2016 with uplifts in the following years largely accounted for by cost savings coming through,' says N+1 Singer analysts Tintin Stormont and Oliver Knott.

From today's standpoint that looks like an optimistic assessment, as you might expect from the house broker.

Megabuyte analyst Indraneel Arampatta argably sums things up better. 'The net result of the cash flow issues is that, while the interims are prepared on a going concern basis, there are very significant caveats and material uncertainty about the company's ability to continue to trade as a going concern.'

Issue Date: 30 Sep 2016