Pebble Beach Systems Group results to be 'materially below' expectations

6th Feb 2017 10:25

(ShareCast News) - Shares in Pebble Beach Systems Group, formerly Vislink, tanked on Monday as the software firm said that its results for 2016 will be "materially below" expectations, due to the "lengthy sales process" as it sold its hardware business.A fall in the company's performance was due to "uncertainty caused by the lengthy sale process" as it sold Vislink Communication Systems, its hardware division, for about $16m to XG Technology, which included "significant write offs" to recognise the final sale price.The performance at the other division of Pebble Beach Systems was also "slightly below" expectations, but the company was confident that growth would return in 2017 due to its pipeline and order intake in January, which was its "highest since 2014".Pebble Beach also announced that its credit facility was increased to £17.8m in the weeks immediately prior to the sale.While the initial proceeds of £5.5m received from the sale of VCS will reduce its loans in the medium-term, under the terms of the business purchase agreement the company has to settle creditors in VCS that are over 30 days old.The company also said that it is not expected that the current level of bank financing will reduce before mid-March as it needs to settle the creditors and due to short-term financing advisory costs.Furthermore, the deferred payment of about £8m due mid-March is expected to reduce bank borrowings significantly.Shares in Pebble Beach Systems Group were down 39.57% to 10.50p at 1013 GMT.