28th Feb 2020 12:06
(Alliance News) - Vitec Group PLC on Friday posted a reduced annual profit due to retailer de-stocking, a non-repeating boost the year before from the Winter Olympics, and a fire the year before.
Shares in Vitec were down 6.3% at 858.00 pence in London at midday.
The photography and video products maker's revenue for 2019 fell 2.4% to GBP376.1 million from GBP385.4 million the year before, dragging pretax profit down 27% to GBP27.6 million from GBP37.9 million.
The weaker revenue performance came from "retailer destocking at Imaging Solutions, non-repeat of the Winter Olympics at Production Solutions, and slower than expected recovery at SmallHD in Creative Solutions following the fire in 2018".
The fire took place in April and was close to the SmallHD offices and warehouse, part of Vitec's Creative Solutions business. This resulted in damage to its stock.
On top of this weaker revenue, Vitec incurred GBP20.4 million worth of charges associated with business acquisitions and adjusting items, compared to GBP13.3 million in 2018.
Nonetheless, Vitec has chosen to increase its total dividend per share for the year by 5.4% to 39.0 pence from 37.0p.
Chief Executive Stephen Bird said: "For 2020, the group is focusing on the growth potential from the launch of the complete 4K eco-system in the cine market as well as new wireless products for the adjacent live production market, plus JOBY smartphonography accessories in the independent content creator market. We expect to benefit from further operational efficiencies in Production Solutions, the Summer Olympics and the US Presidential election."
At the same time, Bird noted that the company is likely to be hurt by the coronavirus outbreak, which has killed 2,788 people so far in mainland China and is spreading rapidly across the world
"Although the group's order visibility is limited, we remain confident in delivering further strategic progress in 2020. However, the duration and impact of COVID-19 is unknown at this stage and, given that half of our revenue comes from products either sourced from China or manufactured in Italy, on the basis of our current assumptions, we estimate that operating profit for first half of and 2020 will be impacted by GBP3.0 to GBP5.0 million. As a result, we expect 2020 to be more second half weighted than usual," said Bird.
By Anna Farley; [email protected]
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