Vitec Group 1H 2014 Results: Videocom Down 1%, Bexel up 39.9%

Posted by Joe Zaller
Aug 14 2014

The Vitec Group, which owns more than a dozen brands in the broadcast industry as well as technical services company Bexel, said that its total revenue for the first six months of 2014 was £152.9m, a decrease of 3% versus the first six months of 2013.

Operating profit for the first half of 2014 was £19.2m, down 3% versus last year.

Despite the lower top-line results the company achieved an operating margin of 12.6%, equal to the first six months of 2013.

On organic basis at constant currency, its revenue was up 3.8% versus the first half of 2013, and that its operating profit increased by 6.3%

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Vitec Videocom Division

Vitec’s broadcast-focused Videocomm division is made up of more than dozen brands that serve various parts of the broadcast industry: Anton/Bauer, Autoscript, Camera Corps, Teradek, The Camera Store, Haigh-Farr, Litepanels, Microwave Service Company, Nucomm, OConnor, Petrol Bags, RF Central, Sachtler, Vinten and Vinten Radamec.

For the first six months of 2014, Videocom revenue was £69.5m, down 1% versus the first six months of 2013.

Videocom operating profit for 1H 2014 was £8.5m, down 2.3% versus last year, resulting in an operating margin of 12.2%, flat with the year earlier period. Operating profit on a constant exchange rate basis was up by 1.2%.

Profitability was helped by the cost control measures and a restructuring program of the Videocom division, which Vitec says is now largely complete.  The company also said that it has also close to completing completed the relocation of certain UK manufactured products to Costa Rica completed to schedule in the first half of 2014.

The company also said that it results were helped by the Sochi Winter Olympics, and a strong performance from Teradek, which was acquired by the Vitec Group during the second half of 2013. Based on the success of Teradek during the period, Vitec made a $3.2m “earnout” payment to Teradek’s former shareholders in March 2014. This consisted of $2.4m in cash, and 72,933 new Vitec ordinary shares worth a further $800,000.

Offsetting the strength of Teradeck and the boost from the Olympics was a poor performance by the IMT business, a “relatively small part of the Videocom division” that provides microwave and which provides wireless microwave products to customers in the Military, Aerospace and Government (MAG) market.

 

Vitec Group 1H 2014 -- Videocom performance

 

The IMT business posted a loss of £1.1m during the first half of 2014, compared to a profit of £1.4m for the same period a year ago.  IMT’s 1H 2014 revenue was £5.8m, down 35% versus the same period last year. For the full year 2013, IMT broke even on revenue of £14m

As a result of the poor performance in MAG space, which Vitec says is an “increasingly challenging market that has become overly price driven,” the company has decided to exit its IMT business, and is currently assessing its options of a sale or closure.”

Vitec says that the divestiture of the IMT business will allow it to focus the Videocom division on its core broadcast activities.

The company highlighted the performance of several its brands, saying:

Our camera supports brands experienced a lower level of project activity. However we have continued to grow sales of our premium robotics products across all regions

 

  • Prompters performed in line with last year

 

  • Litepanels LED lighting products and Anton/Bauer mobile power products performance has been lower than expected. We are in the process of broadening our LED lighting product range to maintain our leading position in the market, and are launching some new, innovative mobile power products.

 

  • The Teradek business that we acquired in H2 2013 is performing well with strong growth post-acquisition. The business continues to develop innovative products, including the new Bolt wireless transmitter that was released in July 2014 and further product launches are planned for later in the year.

 

 

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Vitec Services Division (Bexel) Revenue Jumps 39.9 Percent

For the first half of 2014, revenue from Vitec’s Services Division, which primarily comes from Bexel, was £19.8m, up 39.9% versus the first six months of 2013.

Vitec Group 1H 2014 -- Services (Bexel) performance

The company attributed Bexel’s growth to contracts associated with the Sochi Winter Olympics, the FIFA World Cup, and an increase in in its rental business.

Bexel’s operating profit for 1H 2014 was £2.1m compared to £200,000 last year.  This translates to an operating margin of 10.9% for the first half of 2014, versus an operating margin of 1.4% for the year ago period.

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M&A Activity: Two Businesses Acquired During 1H 2014

Vitec purchased to companies during the first six months of 2014.

In March 2014, the Videocom division acquired the assets of the Specialty Cameras division of SIS Outside Broadcasts Limited through a business combination for a cash consideration of £1.8m, and a potential earnout of up to £1.4m. The deal gives Vitec new specialty camera including the “Stump Cam” used in international cricket matches, and the “Plunge Cam” that tracks high divers from the dive to underwater.

In April 2014, Vitec reached an agreement to acquire UK teleprompter vendor Autocue, for a net consideration of £6m. This deal has yet to close, as it is subject to clearance by the UK Competition and Markets Authority.

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Related Content:

Press Release: The Vitec Group plc Half Year Results to 30 June 2014

Press Release: The Vitec Group plc 2013 Full Year Results

Previous Year: Vitec Group 1H 2013 Results: Videocom Revenue Down 5.1 Percent, Bexel Flat

Broadcast Vendor M&A: Vitec Buys Teradeck for $15 Million

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