12 May 2015 07:00
12 May 2015
The Vitec Group plc
Trading Update
The Vitec Group plc ("Vitec" or the "Group"), the international provider of products and services for the Broadcast and Photographic markets, announces the following trading update for the first four months of the financial year, ahead of the Annual General Meeting to be held later today.
The Group performed satisfactorily in the first four months of the year. Market conditions remain challenging although showing some signs of stabilisation. The Board remains confident about the mid-term prospects for the Group and its expectations for the full year remain unchanged.
As previously reported, Vitec's first half results will reflect the non-repeat of the significant performance at the 2014 Sochi Winter Olympics and a negative impact from foreign exchange; consequently, the first half results are expected to be lower than the same period last year. A stronger performance is anticipated in the second half of the year as the Group's markets start to recover, supported by new product sales. The foreign exchange impact principally reflects the unwinding of previous cash-flow hedges put in place as part of the Group's well-established hedging policy. If exchange rates remain at current levels, Vitec will benefit from a stronger US dollar, partially offset by a weaker Euro, from 2016 onwards.
The Broadcast Division performed broadly in line with the same period last year in variable market conditions after adjusting for foreign currency and the non-repeat of the Winter Olympics. In February 2015, Vitec acquired the business and net assets of Paralinx, a US producer of high quality wireless video systems, for a net cash consideration of up to £4.1 million ($6.3 million). This business has been successfully integrated into the Teradek wireless products business.
The Photographic Division traded in line with our expectations. The Division continues to benefit from the release of new products including its ranges of tripods and bags and the recent launch of the iPad-based Manfrotto Digital Director which has received positive feedback from customers.
At 30 April 2015, Group net debt was as expected at £86.3 million, reflecting seasonality and after £8.7 million of cash outflows relating to acquisitions as well as the impact of foreign exchange on US dollar debt, and cash spent on the previously announced restructuring. This compares to net debt of £70.9 million at 31 December 2014.
"Investing For Growth" Presentation
On 22 April 2015 the Group held a presentation for institutional investors and analysts on "Investing for Growth". Copies of the presentation slides are available on the Group's website.
The presentation reviewed how Vitec has been streamlined and strengthened over the last four years and is well placed to drive sales growth as its markets recover. The summary points were:
· Core Broadcast and Photographic markets are showing some signs of stabilising and are expected to grow in the mid-term;
· Vitec is well placed to capitalise on these markets given its strong brands, market positions and global distribution;
· There is a clear strategy focussed on improving the core business, including sales to independent content creators; expanding Vitec's presence and sales in APAC; and continuing to make value-adding acquisitions;
· Vitec has a strong platform to succeed with an improved new product development process, a greater technology focus and a stronger organisation.
Half Year Results
Vitec is scheduled to release its half year results announcement on Thursday 6 August 2015.
Enquiries:
The Vitec Group plc
Stephen Bird, Group Chief Executive
Paul Hayes, Group Finance Director
Telephone: 020 8332 4600
FTI Consulting
Nick Hasell / Susanne Yule
Telephone: 020 3727 1340
Notes:
1. Average foreign exchange rates in the period from January to April 2015: £1 = $1.52, £1 = €1.35, €1 = $1.13, £1 = Yen181
2. Average foreign exchange rates in 2014: £1 = $1.65, £1 = €1.24, €1 = $1.33, £1 = Yen174
A Snapshot of The Vitec Group
Vitec is a global provider of premium branded products and services to the Broadcast and Photographic markets. Vitec is listed on the London Stock Exchange with 2014 revenue of £309.6 million.
The Group is organised in two Divisions:
The Broadcast Division designs, manufactures and distributes premium branded products for broadcasting, film and video production for broadcasters and independent content creators. It also provides premium services including equipment rental and technical solutions to TV production teams and film crews.
The Photographic Division designs, manufactures and distributes premium branded equipment and provides dedicated solutions to professional and non-professional image takers.
More information can be found at: www.vitecgroup.com.
This announcement contains forward-looking statements that are based on management's current expectations or beliefs as well as assumptions about future events. These are subject to risk factors associated with, amongst other things, the economic and business circumstances occurring from time to time in the countries and sectors in which the Group operates. It is believed that the expectations reflected in these statements are reasonable but they may be affected by a wide range of variables which could cause actual results, and Vitec's plans and objectives, to differ materially from those currently anticipated or implied in the forward-looking statements. Investors should not place undue reliance on any such statements. Nothing in this announcement should be construed as a profit forecast.