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17 Nov 2009 07:00
17 November 2009
The Vitec Group plc
Interim Management Statement
Vitec, the international provider of products and services for the broadcast, photographic, MAG (Military, Aerospace and Government) and entertainment industries, announces the following Interim Management Statement for the period from 1 July 2009 to 16 November 2009.
Current trading
Since we reported our half year results, overall activity levels in our markets have stabilised, following the significant decline experienced in the first half. Margins have improved, supported as expected by the implementation of the previously announced cost reduction programme, forecast to generate £22m of annualised benefits at a cost of £11m.
After the particularly marked decline in the first half in Videocom's markets (previously Broadcast Systems), revenues have stabilised in the period, and there is evidence of some previously deferred orders now being placed. At RF Extreme, product deliveries under the BAS contract have now ended, as expected, and further success in the MAG market has resulted in replacement non-Broadcast business being secured in law enforcement.
Activity levels in the Imaging business have remained consistent with the first half, supported by recent product introductions - in particular from Gitzo. Demand in Staging has continued at the subdued levels experienced in the first half.
Our Services division continues to experience ongoing weak demand from US broadcasting markets. In spite of this, the division has secured rental contracts for important new major events, including the US Tennis Open coverage, and a multi-year guaranteed revenue contract with Olympic Broadcast Services - the host broadcast provider for the International Olympic Committee.
Financial position
At 31 October 2009, Group net debt was £48.4 million, compared to £52.6 million at 30 June 2009. Since the half year the Group has paid the Interim Dividend of £3.1 million. The Group has a committed multi-currency loan facility of £125 million, which expires in August 2013, and was utilising £56.6 million of the facility as at 31 October 2009.
Foreign exchange
At our current estimates of sales and profit for the rest of the second half, and at the current level of Group hedging in place, a favourable impact of over c. £10 million on 2009 operating profit compared to 2008 would arise. This is dependent on current exchange rates in our main operating currencies (US dollar and Euro) continuing throughout 2009 (see note 2, 3).
Strategic Direction
As previously announced, the Group presented an updated Strategic Direction to Investors, Shareholders and Analysts on 22 October. The materials presented are available on the Group's website, www.vitecgroup.com.
Outlook
The Board's expectation of trading performance for the year is unchanged. The decisive and well targeted cost saving actions already announced are on track and will lead to improving profitability in the second half. The ongoing increased focus on cash will continue the strong cash generation experienced in the first half. The Directors believe that these management actions will position the Group well for 2010, as it implements its chosen strategy.
Forthcoming announcements
Our preliminary results announcement will be on 2 March 2010.
ENDS
Enquiries:
The Vitec Group plc
Stephen Bird, Chief Executive Telephone: 020 8939 4650
Richard Cotton, Group Finance Director
Financial Dynamics
Susanne Yule / Sophie Kernon Telephone: 020 7269 7121
Vitec is an international Group, providing products and services to the broadcast, photographic, MAG and entertainment industries. Vitec is based on strong, well known, premium brands that professionals and keen amateurs rely on. Vitec is organised in three divisions: Videocom, Imaging & Staging and Services.
Videocom designs and distributes systems and products used in broadcasting and live entertainment, for studio and outside broadcasts, film production and government.
Imaging and Staging designs, manufactures and distributes equipment and accessories for professionals and keen amateurs in photography, video and events.
Services provides equipment rental and technical support for camera, video, audio and wireless communication technology used by TV production teams and film crews.
More information can be found at: www.vitecgroup.com.
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