6th Aug 2015 08:35
LONDON (Alliance News) - The Vitec Group PLC Thrusday said it is focusing on delivering an "acceptable performance" for its full year in a challenging market environment, as it reported a fall in pretax profit for its first half.
Vitec provides products and services for the broadcast and photographic markets.
The company posted a pretax profit of GBP12.0 million for the half year to end-June, down from GBP14.9 million a year before, as a rise in revenue to GBP155.9 million from GBP152.9 million was offset by higher operating expenses and cost of sales, and GBP2.6 million in costs associated with acquired businesses.
The company said its gross margin fell to 41.2% from 43.0%, mostly as a result of a hit from the strength of sterling and big events like the 2014 Sochi Winter Olympics and FIFA World Cup not recurring. Additionally, operating expenses were increased partly as a result of investment in new product development.
Revenue growth was driven by new product launches and acquisitions. In its broadcast division, revenue rose 11.4%, bolstered by acquisitions. This offset a decline in the photographic division, where lower sales through third-party distributors offset increased revenues through its owned distribution channels.
Vitec said that after "several challenging years" in the photographic market it can now see some signs of stabilisation, including an increase in demand for compact system cameras.
It proposed an interim dividend of 9.5 pence, up from 9.3 pence a year before.
The company said that whilst it sees signs of stabilisation its markets are still uncertain, and it is focused on delivering an "acceptable performance" in this environment. Looking beyond to 2016, it expects to benefit from further growth in new product sales and major sporting events.
"We are pleased to have grown sales despite challenging markets by investing additional resources in driving new product sales in line with our strategy. Good progress continues to be made across the group on new product development," said Chief Executive Stephen Bird in a statement.
Shares in Vitec were down 5.8% at 612.48 pence Thursday morning.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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