For the first time since the 1950’s UK Pension Funds have more bonds ( 43%) than equities (38%).

Source: Financial Times


Lastweek …

… was regressive with the FTSE 100 closing at 5769 which was  1.7% down . The FTSE 250 fell 2.3% and the Aim All Share at 694 declined 1.3%. There was no support from Greece budget austerity riots or UK Industrial Production. The falls were however mainly inspired by four more years of Obama and the trigger of automatic spending cuts in 2013 with little incentive for an early agreement. This will be a developing narrative for market sentiment over the next few months.

This week …

… UK Inflation will be reported on Tuesday. It is currently  deflating, with the CPI at 2.2% (2.5%) and wider RPI (including housing) is 2.6% (2.9%), which is the lowest since 2009. The BOE Inflation report is on Wednesday and the as yet un-achieved Inflation target remains 2% but it is now within reach. Unemployment which is currently 7.9% will also be reported on Wednesday and may stabilize. There is a library-full of Euro numbers this week which is in summary likely to show that Germany is OK and the rest going the wrong way.  Although markets are not expensive there is likely to be no cause for improvement.


Company Reports

GVislink (VLK) – £29.89m@26.25p

Investment ready

The 3Q trading update showed accelerating profitability compared to losses. As this solutions provider, for the collection and delivery of high-quality video and associated data from the field to point of usage, is reaching critical mass. Revenues for the 9 months ended September 2012, are up by 18% to £41.3m giving an operating profit of £2.0m compared with an adjusted loss of £1.3m. Growth is being achieved with new product development such as the recently-launched Mantis MSAT, the world’s smallest and lightest satellite data terminal, which is suitable for both broadcast and surveillance markets. Other key initiatives are the development of products such as the LiveGear-branded product range, which has taken Vislink into the emerging market for collection of video content over IP networks and distribution via the cloud and penetration of new segments such as unmanned aerial vehicles. Also geographically they are focused on high-growth emerging markets such as Brazil, which is expected to benefit from the Rio Olympics and 2014 World Cup. Profits for the full year December 2012 are forecast for £2.7m giving EPS of 1.8p and a prospective P/E of 14.2x. For 2013 the prospective P/E falls to 9.0 x with a yield of 4.9%.


The balance sheet has £6.3m net cash at the end of Q312 allowing for complimentary acquisitions.


Getech (GTC) – £14.3m@49p

More than a growing yield

GETECH provides data, studies and services to the oil & gas sector and the mining sector and recently reported finals to the yearend July. The   business is characterised by large unpredictable contracts so the potential importance of a single deal in any one year critical. This is something that management is well aware of and they have moved to change that in the past year by signing multi-year deals. Data sales were the vast majority of revenues two years ago and they still contributed £3.3m of last year’s revenues of £6.44m and that includes a $1.28m purchase of Russian Arctic shelf magnetic data by oil major. Finals show a profit of £1.25m on revenues of £6.44m for an historic P/E of 15.5x while yielding 2.9%. Forecasts July 2013 are for profit of £1.4m for an EPS of 3.5p for a prospective P/E of 14x with a 3.7% yield  with a 1.1p dividend .


Net cash was £2.6m at the end of July 2012. The dividend is covered 3.2 times. GETECH has gone a long way to restoring its dividend to its previous levels and the company is financially strong enough for the dividend to surpass the 1.3p a share paid out for the year to July 2008.

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