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26 November 2020

The Vitec Group plc

Trading Update

The Vitec Group plc ("Vitec" or "the Group"), the international provider of premium branded hardware products and software solutions to the fast changing and growing "image capture and content creation" market, issues the following trading update for the four months to 31 October 2020.

Improved trading and outlook

Trading has continued to improve as the Group's end markets recover. Revenue was only c. 6% lower in the four months to 31 October 2020 compared to the same period last year and, as a result, we now expect FY 2020 adjusted profit before tax¹ to be slightly above current market expectations².

· Imaging Solutions' markets have recovered faster than expected, with evidence of retail restocking following the destocking in H1 2020. As a result, the Division had an encouraging performance with strong growth in JOBY smartphonography accessories and resilience in the professional and B2B markets. The previously announced expanded restructuring, to benefit from the growing high margin e-commerce channel, is on track³.

· For Production Solutions, the broadcast news market has remained largely open throughout the pandemic, while entertainment programmes and sports events have restarted but with reduced or no live audiences. The Division delivered a solid performance and continues to focus on driving operational efficiencies.

· Creative Solutions had an encouraging performance, with continued growth in IP streaming products and orders for the new 4K monitors, transmitters and receivers ahead of our expectations. We estimate that the cine market is currently about 50% closed⁴ and, although the scripted TV market is starting to recover, feature film production is recovering more slowly than expected. Creative Solutions remains focused on the significant multi-year potential from the technology upgrade from HD to 4K, as well as the additional growth opportunities from the structural changes to the market which should increase demand for monitoring and IP streaming products.

Balance sheet

We continue to take significant actions to optimise cash and our net debt at the end of October was £95.0 million. Based on current expectations, and subject to FX fluctuations, we now expect net debt at the end of FY 2020 to be slightly below the £96.0 million reported at the end of FY 2019.

Dividend

The Board is mindful of the importance of dividends to the Group's shareholders and, assuming the market recovery continues, would expect to resume dividends in 2021.

Stephen Bird, Group Chief Executive, commented:

"We are encouraged that trading has improved over the past few months and that we have seen a faster than expected recovery, even though our markets remain about 25% closed. As a result, although we have limited order visibility, we now expect the Group's FY 2020 adjusted PBT to be slightly above market expectations.

"For 2021, we are confident that the recovery in trading will continue, albeit not to the levels seen in 2019, and we expect to deliver strong cash generation.  

"Longer term, we are confident that our end market drivers remain intact and that our competitive position has been enhanced, leaving us well placed to benefit from the structural changes to the market."

Notes to Editors:

Vitec is a leading global provider of premium branded hardware products and software solutions to the fast changing and growing "image capture and content creation" market.

Vitec's customers include broadcasters, production and rental companies, independent content creators, photographers and enterprises. Our product portfolio includes camera supports, video transmission systems and monitors, smartphone accessories, robotic camera systems, prompters, LED lighting, mobile power, bags and motion control, audio capture and noise reduction equipment.

We employ around 1,600 people across the world in 11 different countries and are organised in three Divisions: Imaging Solutions, Production Solutions and Creative Solutions.

The Vitec Group plc is listed on the London Stock Exchange with 2019 revenue of £376.1 million.

More information can be found at: www.vitecgroup.com

LEI number: 2138007H5DQ4X8YOCF14

Notes