10 May 2017 07:00
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR FROM ANY JURISDICTION WHERE TO DO THE SAME WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION. THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION.
10 May 2017
The Vitec Group plc
Trading Update
Continued Progress
The Vitec Group plc ("Vitec" or the "Group"), the international provider of products and services for the Broadcast and Photographic markets, provides the following update on trading for the first four months, the disposal of Haigh-Farr, Inc. and full year outlook.
Current trading performance
The Board is encouraged with performance during the period from 1 January 2017 to 30 April 2017. Positive momentum has been maintained and we are performing slightly ahead of our expectations, mainly due to continued organic sales growth and a further benefit from foreign exchange.
Our higher technology broadcast businesses continued to grow, supported by a number of new product launches. The Photographic Division has started the year well and continued to outperform the market.
Disposal of Haigh-Farr, Inc.
On 9 May 2017 we sold our non-core Haigh-Farr defence antennas business based in New Hampshire, USA, to Haigh-Farr Acquisitions, Inc., which is owned by Haigh-Farr's current management, David and Norene Farr. This deal was completed for an initial cash consideration of $15.8 million (£12.2 million); there is a further potential earn-out of up to $10 million in cash depending on future performance of the business. The net cash proceeds will be used to pay down Group borrowings.
Haigh-Farr generated an operating profit of $2.1 million (£1.5 million) in 2016 on sales of $12.9 million (£9.6 million). As at 31 December 2016, net assets1 were $20.8 million (£16.8 million) and gross assets1 were $22.8 million (£18.4 million). The disposal is expected to be slightly dilutive to adjusted earnings per share for the current financial year.
This disposal allows Vitec to continue to focus on driving growth in its core, premium branded broadcast and photographic markets.
Net debt
Vitec's balance sheet has been further strengthened by continued strong cash generation over the first four months of the year. Net debt as at 30 April 2017 was £70.8 million (31 December 2016: £75.1 million) and this will be reduced by the net cash consideration received from the disposal of Haigh-Farr.
The Group will repay the $50 million private placement facility when it expires on 11 May 2017. For the remainder of 2017, it is anticipated that this will lead to a £0.7 million reduction in the Group's ongoing financing costs.
Full year outlook
Overall, the Board now expects Vitec's full year results to be slightly ahead of current market consensus. This is the result of good underlying trading, a continued tailwind from foreign currency translation and lower financing costs more than offsetting the ongoing profit impact from the sale of Haigh-Farr.
Stephen Bird, Group Chief Executive, commented:
"Our performance in the first four months demonstrates the continued progress made to transform the Group. We are outperforming our markets and our higher technology businesses continue to grow.
As a result, we are pleased to increase our outlook for the current year."
Site Visit to Vitec's Photographic Division
On Thursday 11 May, Vitec will host a site visit to its Photographic Division's operations in Bassano, Italy, for institutional investors and analysts. An overview of the Division's strategy, performance and product development highlights will be covered. Copies of the presentations will be made available on the Group's website after the event. No material new financial information will be disclosed.
Half Year Results
Vitec is scheduled to release its half year results announcement on Thursday 10 August 2017.
Enquiries:
The Vitec Group plc
Stephen Bird, Group Chief Executive
Kath Kearney-Croft, Group Finance Director
Telephone: 020 8332 4600
MHP Communications
Tim Rowntree
Jamie Ricketts
Ollie Hoare
Telephone: 020 3128 8100
Notes:
1. Balance sheet figures for Haigh-Farr exclude cash and intercompany items
2. Average foreign exchange rates in the period from January to April 2017: £1 = $1.26, £1 = €1.17, €1 = $1.07, £1 = Yen141
3. Average foreign exchange rates in 2016: £1 = $1.35, £1 = €1.22, €1 = $1.10, £1 = Yen147
4. Nothing in this announcement should be construed as a profit forecast
Notes to Editors:
Vitec is a leading global provider of premium branded products and services to the fast changing and growing "image capture and sharing" market.
Vitec's customers include broadcasters, independent content creators, photographers and enterprises, and our activities comprise: design, manufacture and distribution of high performance products and software including camera supports, wireless systems, robotic camera systems, prompters, LED lights, mobile power, monitors and bags; and premium services including technical solutions, systems integration and equipment rental for TV production teams, film crews and enterprises.
We employ around 1,700 people across the world in ten different countries and are organised in two Divisions: Broadcast and Photographic.
The Vitec Group plc is listed on the London Stock Exchange with 2016 revenue of £376.2 million.
More information can be found at: www.vitecgroup.com.
LEI number: 2138007H5DQ4X8YOCF14
This announcement contains forward-looking statements with respect to the financial condition, performance, position, strategy, results and plans of The Vitec Group plc based on Management's current expectations or beliefs as well as assumptions about future events. These forward-looking statements are not guarantees of future performance. Undue reliance should not be placed on forward-looking statements because, by their very nature, they are subject to known and unknown risks and uncertainties and can be affected by other factors that could cause actual results, and the Group's plans and objectives, to differ materially from those expressed or implied in the forward-looking statements. The Group undertakes no obligation to publically revise or update any forward-looking statements or adjust them for future events or developments.