VTC.L Regulatory News (VTC)

16 Jul 2009 07:00



16 July 2009

The Vitec Group plc

Period end trading update

The Board of The Vitec Group plc ("Vitec") announces the following update on trading for the six months ended 30 June 2009. Its interim results will be announced on 26 August 2009.

Current trading

The anticipated first half trading performance for the Group overall is in line with the Board's expectations, reflecting materially weaker markets than last year, mitigated by strong cost reduction actions and favourable foreign exchange effects (see note 2), as indicated in the Interim Management Statement of 19 May 2009.

Revenue in H1 2009 was approximately 1% higher than H1 2008. In constant currency, before acquisitions and the disposal, Group revenue was down around 20%, in line with the Board's expectations. Imaging market resilience continues to be more than offset by Broadcasting and Staging market weakness.

Cash generation has been stronger, due to tight cash management, with net debt expected to be at a broadly similar level to December 2008 - this being after payment of the final dividend and acquisition earn out payments.

Divisional performance

In Broadcast Systems, H1 revenue declined by approximately 10%, or 30% in constant currency, before acquisitions. Camera Dynamics, Anton/Bauer and Clear-Com all suffered from weaker demand, whilst RF Extreme continued to perform well both in the broadcast business - including the tail end of the BAS contract - and in securing non broadcast business in the MAG (Military Aviation and Government) market. The Litepanels LED lighting business acquired in August 2008 continues to grow, up 5% on H1 2008 in constant currency.

In Imaging & Staging we saw H1 revenue increase approximately 13%, or a decline of 8% in constant currency, before the previously announced IFF disposal. Imaging Accessories' volumes have held up well, helped by continuing growth from the Kata bags business which grew by over 40% over H1 2008 in constant currency. Staging Systems' demand has been materially weaker, but the business has coped better with this shortfall, due to significant cost restructuring actions both last year and in the current period.

Broadcast Services has suffered from the effects of reduced programme making in the US broadcast market due to depressed broadcaster advertising revenue. Its H1 revenue increased by approximately 8%, or a decline of 19% in constant currency. The business is actively identifying new revenue-generating opportunities and recently concluded an agreement with Sony to manage the demonstration inventory for its new HSC and HXC studio cameras on a pan-US basis.

Outlook for 2009

The Board's view of the prospects for the full year remains unchanged, notwithstanding the present economic volatility and low visibility. 

Ends

Enquiries: 

Notes

This statement is based on information sourced from management estimates.

Exchange rates for our main operating currencies (the US dollar, Euro and Yen) remain very volatile. If current exchange rates continue throughout 2009 (see note 3, 4), at our current estimates of sales volumes and profit for the rest of the year and at the current level of Group hedging in place, a favourable impact of over £10 million on 2009 operating profit compared to 2008 would arise.

Current market exchange rates: £1 = $1.63 £1 = €1.17, €1 = $1.40

2008 average market exchange rates: £1 = $1.85, £1 = €1.26, €1 = $1.46

Statements made in this announcement that look forward in time or that express management's beliefs, expectations or estimates regarding future occurrences are "forward-looking statements" within the meaning of the United States federal securities laws. These forward-looking statements reflect Vitec's current expectations concerning future events and actual results may differ materially from current expectations or historical results. 

Vitec is an international Group, principally serving customers in the worldwide media sector with products and services for the broadcast, entertainment and photographic industries. Vitec is based on strong, well known, premium brands that professionals rely on. Vitec is organised in three divisions: Imaging & Staging, Broadcast Systems and Broadcast Services. More information can be found at: www.vitecgroup.com.