15th Jan 2009 07:00
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15 January 2009
The Vitec Group plc
2008 Post-close statement
The Board of The Vitec Group plc ("Vitec") makes the following statement relating to the year ended
31 December 2008 and provides an Outlook for 2009. Its preliminary results will be announced on 2 March 2009.
2008 results
Group sales in 2008 are expected to be around £335m, approximately 22% higher than 2007. In constant currency, before acquisitions, Group sales increased by around 4%. The Board expects the Group's results for 2008 to be in line with its expectations, despite redundancy costs of around £1m incurred in December.
Divisional performance
In Broadcast Systems, 2008 sales grew around 32%, with a strong performance from Camera Dynamics and RF Systems (which contributed 12 months of sales compared with 7 months in 2007). In constant currency, before acquisitions, sales increased by around 5%. RF Systems enjoyed the benefits of market share growth and the volume flowing from the BAS relocation programme in the United States (product sales for which are scheduled to cease in August 2009). Of the two smaller units, Communications revenue grew strongly while Mobile Power performed significantly below last year's level. Litepanels, acquired in late August 2008, made a very encouraging start.
In Imaging & Staging, 2008 sales grew approximately 16%, helped by bringing in-house
UK distribution, the launch of many new products, and the positive effect of foreign exchange translation. In constant currency, before acquisitions, sales increased by around 4%. Approximately
one third of the division's sales are to keen amateur photographers who buy digital SLR cameras, a market that grew strongly again in 2008 (see note 5). Despite a small improvement in €/$ exchange rates in the last quarter, the weaker average US dollar rate vs. 2007 impacted margins adversely.
Within Staging, although there were no major projects in the year, overall volumes were similar to 2007.
While Broadcast Services enjoyed a successful Beijing Olympics and the benefits of the US elections,
the Division still performed below expectations due to underlying weakness in the US broadcast rental market. Revenue in Sterling grew by about 9%, and by about 1% in Dollar terms.
Financial performance
The Group generated strong operating cash flows in the second half of 2008, due in part to a reduction in inventory levels in advance of an anticipated market downturn, and due in part to tight management of debtors. As reported in the November IMS, the improvement has essentially been offset by increased borrowing in Sterling, as the majority of our debt is in US Dollars, Euros and Yen (against which Sterling has weakened markedly). Our borrowings are used to hedge a c.50% proportion of our net assets in those foreign currencies and our shareholders funds have also risen significantly. We are currently using about half of our £125m loan facility, which is committed until August 2013.
Outlook for 2009
We continued to trade well up to the end of 2008 and, as stated earlier, the Board expects the Group's results for 2008 to be in line with its expectations.
During the last quarter of the year we saw a softening in demand and, although Q4 order intake increased by about 5% year on year, organic, constant currency order intake reduced by over 10%. At current exchange rates, this year's results will benefit from the translational impact of weaker Sterling, compared to 2008.
In the current economic climate our visibility remains limited and it is therefore difficult to provide guidance on how our various market segments will develop in 2009. However, based on our leading market positions, competitive cost base and strong balance sheet, the Board believes the Group is well positioned to address most potential outcomes.
Ends
Enquiries:
|
The Vitec Group plc |
|
|
Alastair Hewgill/ Richard Cotton |
Telephone: 020 8939 4650 |
|
Financial Dynamics |
|
|
Richard Mountain / Sophie Kernon |
Telephone: 020 7269 7121 |
Notes
1. This statement is based on information sourced from management estimates.
2. Whilst Vitec has significant production and sourcing in US dollars and has hedging
arrangements in place, movements in the $/£ and, particularly, $/€ rates can have a significant
impact on reported results. The Group will give an estimate of the effects of foreign currency
movements after hedging, on operating profit in 2009 compared to 2008 when it announces its
preliminary results on 2 March.
3. Current market exchange rates: £1 = $1.45 £1 = €1.10, €1 = $1.32
4. 2008 average market exchange rates: £1 = $1.85, £1 = €1.26, €1 = $1.47
5. The latest data from CIPA (the Camera & Imaging Products Association) for the 11 months to
the end of November 2008 shows that the number and value of Worldwide Digital-SLR camera
shipments grew by 33.7% and 22.9% respectively.
6. Statements made in this announcement that look forward in time or that express
management's beliefs, expectations or estimates regarding future occurrences are "forward-
looking statements" within the meaning of the United States federal securities laws. These
forward-looking statements reflect Vitec's current expectations concerning future events and
actual results may differ materially from current expectations or historical results.
7. Vitec is an international Group, principally serving customers in the worldwide media sector
with products and services for the broadcast, entertainment and photographic industries. Vitec
is based on strong, well known, premium brands that professionals rely on. Vitec is organised
in three divisions: Imaging & Staging, Broadcast Systems and Broadcast Services. More
information can be found at: www.vitecgroup.com.
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