Half Yearly Report

RNS Number : 2345M

The Vitec Group PLC

22 August 2013



NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR FROM ANY JURISDICTION WHERE TO DO THE SAME WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION.

22 August 2013

The Vitec Group plc

Half Year Results to 30 June 2013

A further improvement in operating margins in challenging markets

The Vitec Group plc (Vitec or The Group), the international provider of products and services for the Broadcast & Video, Photographic, and MAG (Military, Aerospace and Government) markets, announces its results for the half year ended 30 June 2013.

Results

H1 2013

H1 2012

% Change

% Change

Organic CER**

Revenue

£157.6m

£176.5m

-10.7%

-9.0%

Operating profit*

£19.8m

£18.9m

4.8%

0.0%

Profit before tax*

£17.6m

£17.5m

0.6%

-1.6%

Adjusted earnings per share*

27.4p

27.0p

1.5%

Operating profit

£12.3m

£17.2m

-28.5%

Profit before tax

£10.1m

£15.8m

-36.1%

Basic earnings per share

14.9p

24.2p

-38.4%

Free cash flow

£7.9m

(£2.9m)

Net debt

£67.5m

£70.0m

Interim dividend per share

8.9p

8.5p

4.7%

Key points



Half year results in line with expectations with a 4.8% increase in operating profit*



Further improvement in margins with a 190 bps increase in operating margin* to 12.6%



First half sales in line with the second half of 2012 (excluding London Olympics)



Videocom Division performed well in a challenging Broadcast & Video market; MAG activities benefited from contract awards



Imaging Division delivered a good profit in a challenging market



Restructuring and cost management to deliver increased savings



Strong free cash flow after £3.5 million of restructuring spend



We are on track to meet our full year expectations

* Before restructuring costs and charges associated with acquired businesses. Restructuring costs in H1 2013 were £6.2 million (H1 2012: £nil) and charges associated with acquired businesses were £1.3 million for the amortisation of acquired intangible assets (H1 2012: £1.6 million), £nil of transaction costs relating to an acquisition (H1 2012: £0.3 million) and £nil contingent consideration on previous acquisitions (H1 2012: £0.2 million).

** Organic CER: At Constant Exchange Rates on a comparative basis, excluding year on year effect of acquisition and disposal.

Free cash flow: cash generated from operations in the financial period after restructuring cash flows, net capital expenditure, net interest and tax paid.

Commenting on the results, Stephen Bird, Group Chief Executive, said:

Overall trading was in line with our expectations during the first half of 2013 as Vitec has increased profits and further improved margins. Our revenue was below the strong first half of 2012 but the level of sales was similar to the second half of 2012 (after adjusting for the London Olympics).

Within the Videocom Division, the Broadcast & Video activities performed well in a challenging market and the Divisions MAG results benefited from a $5.8 million contract with the U.S. Department of Justice. The Imaging Division made good progress despite the continuation of the more challenging market that started to impact us in the second half of last year. The Imaging Division continues to grow its market share and this will be supported by new product launches planned for later this year.

We are on target to deliver the significant cost reductions previously outlined in our 2012 full year results announcement. We will supplement these with specific rationalisation actions within our Imaging and Services Divisions which we believe will deliver further attractive returns.

Our longer-term growth prospects continue to be positive and we are well positioned to benefit from any upturn in our markets. Our order visibility remains limited but our first half year performance was consistent with our normal phasing and we are on track to meet our full year expectations.

Enquiries:

The Vitec Group plc

Telephone: 020 8332 4600

Stephen Bird, Group Chief Executive

Paul Hayes, Group Finance Director

FTI Consulting

Nick Hasell / Susanne Yule

Telephone: 020 7269 7291

Notes 1. This statement is based on information sourced from management estimates.

2. H1 2013 average exchange rates: £1 = $1.54, £1 = 1.17, 1 = $1.31.

3. H1 2012 average exchange rates: £1 = $1.58, £1 = 1.21, 1 = $1.30.

Vitec is an international Group principally serving customers in the Broadcast & Video, Photographic and Military, Aerospace and Government (MAG) markets. Listed on the London Stock Exchange with 2012 revenue of £345.3 million, Vitec is based on strong, well known, premium brands on which its customers worldwide rely. Vitec is organised in three Divisions: Videocom, Imaging and Services.

Videocom designs and distributes systems and products used in broadcasting and live entertainment, film and video production and MAG.

Imaging designs, manufactures and distributes equipment and accessories for photography and video.

Services provides equipment rental, workflow design and technical support to TV production teams and film crews.

More information can be found at: www.vitecgroup.com.

Vitec will be presenting its results to analysts at 10.30am on Thursday 22 August 2013. An audio recording of the presentation, along with the presentation slides, will be available on our website after the meeting. Users can pre-register to access the recording and slides using the following link: http://www.vitecgroup.com/HalfYearResults2013/

H1 2013 Management & Financial Review

Vitec delivered improved margins* in each Division in the first half of 2013 in challenging markets. Our performance benefited from the restructuring actions we took in the period and from a continued focus on cost management.

Reported revenue fell by 10.7% to £157.6 million (H1 2012: £176.5 million) with o

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