TIDMVTC
RNS Number : 6236Z
Vitec Group PLC (The)
21 May 2019
21 May 2019
The Vitec Group plc
AGM Update
Trading in line with expectations; significant investment in
on-line capabilities
The Vitec Group plc ("Vitec" or "the Group"), the international
provider of premium branded products and solutions to the fast
moving and growing "image capture and content creation" market,
issues the following announcement ahead of its Annual General
Meeting taking place later today.
Current trading
The Group's trading for the four months ended 30 April 2019 was
in line with expectations:
-- Production Solutions performed strongly in a non-Olympic
year, with new product launches from Litepanels lights, Anton/Bauer
batteries, Autoscript prompters and Vinten robotics, targeted at
both independent content creators and broadcasters.
-- Creative Solutions continued to grow and has recently
introduced the next generation of Teradek 4K wireless transmitters
incorporating unique Amimon technology, new SmallHD monitors and
integrated products which leverage the Division's unique
competitive edge. The integration of Amimon is on track and the
ongoing SmallHD insurance claim is offsetting lost profit from
delayed product launches resulting from the disruption last
year.
-- Imaging Solutions continued to outperform a challenging
market through expanding into adjacent market segments and the
ongoing transition to the e-commerce channel. The value of total
cameras sold has remained constant since December 2015(1) and we
are encouraged by the trend towards higher value Compact System
Cameras where our accessories have a higher attachment rate. The
integration of Syrp is complete and we have moved Rycote from
Creative Solutions to Imaging Solutions where it is more aligned
with our target audio customer base.
The Board's expectations for achieving progress in 2019 are
unchanged.
Investing in Imaging Solutions' on-line capabilities
The Group announces a significant investment in its web
marketing and e-tail capabilities in its Imaging Solutions
Division, specifically to recruit a global team to transform its
digital competencies, and to reorganise the sales and marketing
network by distribution channel.
This restructuring mirrors the consolidation in Europe of major
e-commerce customers and will enable the Group to take strategic
advantage of further growth in the higher margin e-commerce
channel. It will also support Vitec's ambition to remain the
world's leading imaging accessories company. Over time, the changes
are expected to enable revenue growth, deliver improved customer
service, reduce operating costs and improve operating margins.
The total investment is expected to be c. EUR8.5 million (GBP7.5
million), to be incurred primarily in 2019 and 2020 and, given the
one-off nature of the project, will be excluded from adjusted
profit before tax. Savings are expected to build over time to an
annual run rate of c. EUR3.0 million (GBP2.6 million) by the end of
2021.
Balance sheet
Vitec's financial position remains strong. As highlighted at the
Full Year results, cash performance for 2019 will be strongly
weighted towards the second half, as a result of seasonality and
further planned increases in working capital related to new product
development in the first half. As a result of this investment, we
now expect net debt (pre-IFRS 16) to be broadly flat
year-on-year.
Board changes
As previously announced, Ian McHoul succeeds John McDonough as
Chairman of the Company at the conclusion of the AGM today.
Half Year results
Vitec is scheduled to release its Half Year results announcement
on Thursday 8 August 2019.
Stephen Bird, Group Chief Executive, commented:
"Following a record financial performance in 2018, Vitec
continues to consolidate its position and to deliver progress.
"The investment in Imaging Solutions is an important strategic
move at the right time, and will support further growth, enabling
us to take advantage of retail trends towards e-commerce where we
outperform the competition and enjoy higher margins.
"Whilst we remain mindful of geopolitical challenges, we are
pleased to confirm that our outlook for the current year is
unchanged, and H2 weighted as highlighted at the Full Year results.
We expect a strong 2020, given the summer Olympics, US Presidential
elections and the targeted growth initiatives already
implemented."
For further information please
contact:
The Vitec Group plc Telephone: 020 8332 4600
Stephen Bird, Group Chief Executive
Kath Kearney-Croft, Group Finance
Director
MHP Communications Telephone: 020 3128 8771
Tim Rowntree/Ollie Hoare
Notes to Editors:
Vitec is a leading global provider of premium branded products
and solutions to the fast moving and growing "image capture and
content creation" 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 solutions including camera supports, camera mounted
electronic accessories, robotic camera systems, prompters, LED
lights, mobile power, monitors, bags, motion control and noise
reduction equipment.
We employ around 1,800 people across the world in 13 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
Full Year 2018 revenue of GBP385.4 million.
More information can be found at: www.vitecgroup.com
LEI number: 2138007H5DQ4X8YOCF14
Notes:
1. Camera and Imaging Products Association data
2. Estimated foreign exchange rate: GBP1 = EUR1.14
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END
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