18 May 2016 07:00
18 May 2016
The Vitec Group plc
AGM Update
The Vitec Group plc ("Vitec" or the "Group"), the international provider of products and services for the Broadcast and Photographic markets, issues its update ahead of the AGM to be held later today. The statement covers: a trading update for the first four months of the current financial year; a brief summary of Vitec's strategy; an update on net debt; and the scheduled half year results release date.
Trading Update
Vitec performed as expected and in line with the same period last year for the first four months of the year. The Board's expectations for the full year remain unchanged. As expected, we anticipate that the Group's performance in the second half of the year will benefit from the Rio 2016 Olympics; the previously announced restructuring activities that are progressing to plan; and from a stronger US Dollar and Euro.
The Group continues to focus on its core Broadcast and Photographic markets and is investing in and growing sales in new technologies and the APAC region. Our core Broadcast and Photographic markets are expected to grow in the medium-term driven by the increase in the capture and sharing of high quality images, and by the continued evolution of new technologies.
Our Broadcast division is continuing to develop and grow its higher technology products businesses. During the period we launched a number of innovative products including large High Dynamic Range (HDR) monitors and we demonstrated our virtual reality capabilities at the recent NAB show in Las Vegas. In April 2016 we acquired some of the assets of Offhollywood Digital, LLC, for an initial consideration of £1.5 million. Offhollywood provides camera-back modules for RED cameras and other services to a similar customer base to that serviced by our existing higher technology businesses.
The Photographic division has benefitted from restructuring actions that we have taken this year. Recent underlying market data from the Camera & Imaging Products Association (CIPA) shows that the Photographic market is stabilising. We continue to make investments to grow our owned distribution channels, including the previously announced acquisition of our former distribution partner in the Netherlands in January 2016.
Strategy
Our strategy remains one of growing the Group's core business by leveraging our premium brands and strong market positions supported by investing in new products. This includes developing and launching new premium products and services, particularly for the growing number of independent content creators.
The Group remains in a sound financial position and continues to allocate resources to the faster growing technologies and regions, and to identify and make appropriate, value-adding acquisitions. The capital allocation policy also includes reinvesting to drive organic growth and continuing to implement a progressive dividend policy.
Net Debt
We continue to operate with a strong balance sheet and are maintaining our focus on cash generation through prudent management of our working capital and capital investment. At 30 April 2016, Group net debt was as expected at £86.4 million. This reflects seasonality and is after £5.1 million of cash outflows relating to acquisitions, £3.0 million cash outflow on the previously announced restructuring, and a £1.3 million negative impact from foreign exchange. This compares to net debt of £76.3 million at 31 December 2015.
Half Year Results
Vitec is scheduled to release its half year results announcement on Thursday 4 August 2016.
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 2016: £1 = $1.43, £1 = €1.29, €1 = $1.11, £1 = Yen162
2. Average foreign exchange rates in 2015: £1 = $1.52, £1 = €1.35, €1 = $1.13, £1 = Yen181
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 2015 revenue of £317.8 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 for photographic and video cameras 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 with respect to the financial condition, performance, position, strategy, results and plans of The Vitec Group plc (the "Group" or the "Company") 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 Company undertakes no obligation to publically revise or update any forward-looking statements or adjust them for future events or developments. Nothing in this announcement should be construed as a profit forecast.
The information in this announcement does not constitute an offer to sell or an invitation to buy shares in the Company in any jurisdiction or an invitation or inducement to engage in any other investment activities. The release or publication of this announcement in certain jurisdictions may be restricted by law. Persons who are not resident in the United Kingdom or who are subject to other jurisdictions should inform themselves of, and observe, any applicable requirements.