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RNS Number : 9957N
Vitec Group PLC (The)
27 May 2020
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27 May 2020
The Vitec Group plc
AGM Update
The Vitec Group plc ("Vitec" or "the Group"), the international
provider of premium branded products and solutions to the fast
changing and growing "image capture and content creation" market,
issues the following announcement ahead of its Annual General
Meeting taking place later today.
Update on global operations
COVID-19 impacted Vitec early in the pandemic, with half of the
Group's revenue coming from products sourced from China and made in
Italy. We responded quickly, implementing significant and
far-reaching mitigating actions to cut costs and manage cash. The
year-on-year benefit of these cost actions is expected to be
between GBP20.0 - GBP25.0 million. We are using Government support
where possible to preserve the long-term capabilities of the
business.
All of our manufacturing sites are now operational, albeit we
are seeking to flex production with demand and carefully manage
inventory levels. The Group has worked with its manufacturing teams
and followed government guidelines to put stringent health &
safety and social distancing measures in place. The majority of our
offices remain closed due to government directives, with employees
working from home where possible, with minimal operational
disruption.
Current end market demand
Customer demand remains significantly impacted. The high-end
film and scripted TV production industry is shut down, sporting
events postponed, professional photographers impacted and many
retail outlets remain closed, and this has curtailed short-term
demand.
However, the Chinese market is slowly recovering and some market
segments (e.g. news, reality and documentary TV production)
continue to remain active. We are focusing our short-term efforts
in these areas, especially where Broadcasters and Enterprise
customers are using our products to help them work remotely and
keep their social distance, for example with robotic cameras and
remote streaming, monitoring and lighting equipment. We are also
seeing increased demand for our JOBY vlogging and smartphonography
products through online channels.
Current trading
Vitec felt the first effects of COVID-19 on its supply chain at
the end of February, with customer demand significantly impacted in
March and April. Revenue for the first quarter of 2020 was down c.
20% vs the prior year. Revenue for April 2020 was down c. 60% vs
the previous year, in line with our revised expectations, but
trading conditions in May are starting to improve. Interest costs
for the full year will rise by c. GBP1.0 million.
There remains considerable uncertainty in our markets but we
currently expect trading conditions to continue to improve in H2
2020, albeit at a slower rate than we had previously hoped. It
remains difficult to provide financial guidance for the full
year.
Financing and liquidity
Vitec has a robust financial position with liquidity, long-term
financing and short-term flexibility. As at 30 April 2020, the
Group's net debt was GBP113.4 million (31 December 2019 GBP96.0
million). We continue to take significant actions to optimise cash
and, based on current expectations, and subject to FX fluctuations,
we expect net debt at the end of FY 2020 to be broadly similar to
the end of FY 2019.
On 4 May 2020, the Group announced revised covenants for 2020
under its GBP165.0 million five-year Revolving Credit Facility
("RCF") and that we had further reinforced our liquidity position
by accessing the Bank of England's COVID Corporate Financing
Facility ("CCFF") scheme. As anticipated, the Group has drawn down
GBP30.0 million of the CCFF to repay part of the RCF.
Longer-term prospects
We firmly believe that Vitec's end markets will recover well
once the crisis is over as the demand for original content
continues to grow.
Our strategy for long-term growth remains just as relevant as it
was before the crisis:
-- In Creative Solutions, we remain focused on the significant
growth potential from the launch of our 4K eco-system of wireless
video products in the cine market;
-- In Imaging Solutions, we expect to benefit from the continued growth in JOBY vlogging and smartphonography accessories. Although there will be further disruption to the traditional photographic retail channel, the transition to the higher margin ecommerce channel will accelerate and we had already restructured our business to benefit from this continued change; and
-- In Production Solutions, we will benefit from the growth in
on-location lights and mobile power, robotic cameras and
voice-activated prompting, the rescheduling of major sporting
events to 2021, as well as targeting further operational
efficiencies.
As a result of the COVID-19 pandemic, we expect to see a
fundamental structural change in production with film and TV
companies demanding more distributed production with remote viewing
and remote-controlled products. We believe that this could
significantly benefit Vitec and we are actively looking at how we
can take advantage of these new opportunities.
AGM
Today's AGM is a closed meeting due to COVID-19 and will be held
at the Company's registered office. Shareholders should not attend
in person. The outcome of the AGM resolutions will be announced to
the market following the AGM.
For further information please
contact:
The Vitec Group plc Telephone: 020 8332 4602
Stephen Bird, Group Chief Executive
Martin Green, Group Finance Director
MHP Communications Telephone: 020 3128 8147
Tim Rowntree/Robert Collett-Creedy
Notes to Editors
Vitec is a leading global provider of premium branded products
and solutions to the fast changing 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 and accessories,
wired and wireless video transmission systems, robotic camera
systems, prompters, LED lights, mobile power, monitors, bags,
motion control, smartphone accessories, audio capture and noise
reduction equipment.
We employ around 1,600 people across the world in 11 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
2019 revenue of GBP376.1 million.
More information can be found at: www.vitecgroup.com
LEI number: 2138007H5DQ4X8YOCF14
This announcement contains inside information. The person
responsible for arranging the release of this announcement on
behalf of The Vitec Group plc is Jon Bolton, Group Company
Secretary.
This report contains certain forward-looking statements with
respect to the financial condition, results of operations, and
businesses of the The Vitec Group plc. These statements and
forecasts involve risk, uncertainty and assumptions because they
relate to events and depend upon circumstances that will occur in
the future. There are a number of factors that could cause actual
results or developments to differ materially from those expressed
or implied by these forward-looking statements. These
forward-looking statements are made only as at the date of this
announcement. Nothing in this announcement should be construed as a
profit forecast. Except as required by law, The Vitec Group plc has
no obligation to update the forward-looking statements or to
correct any inaccuracies therein.
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END
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