The Vitec Group, which owns more than a dozen brands in the broadcast industry as well as technical services company Bexel, released its results for 2015.
Total revenue was £317.8 million, an increase of 2.6% versus 2014. Operating profit was £35.4 million, a decline of 8.8% versus last year. On a constant currency basis, revenue increased 1.3% and operating profit decreased 1.8%.
In the earnings release, management highlighted the negative impact of currency, the disposal of IMT during 2014, and the softness in comparisons against 2014 given the non-repeat of large events.
Stephen Bird, Group Chief Executive commented, “We have continued to invest additional resources in driving new product sales in line with our strategy. As expected, the full year results reflect the non-repeat of the 2014 Sochi Winter Olympics and FIFA World Cup, and an anticipated negative impact from foreign exchange. There was growth in revenue and operating profit over the prior period excluding these items. The Group is making good progress in streamlining certain activities with lower growth prospects, with some further actions being taken to drive profitable growth.”
Vitec also announced it has sold its main UK Broadcast manufacturing site in Bury St Edmunds. The proceeds from the sale were £3.9 million. Vitec is planning to move the business to a smaller leased facility in the same region. In recent years, Vitec had transitioned a significant amount of its manufacturing to Costa Rica.
Vitec Broadcast Division:
Vitec’s Broadcast brands serve various parts of the broadcast industry: Anton/Bauer, Autocue, Autoscript, Bexel, Camera Corps, Teradek, Haigh-Farr, Litepanels, OConnor, Paralinx, Petrol Bags, Sachtler, SmallHD, Vinten and Vinten Radamec.
The Broadcast Division had revenue of £189.0 million in 2015, an increase of 10.5% versus 2014 when excluding the divested IMT’s revenue from 2014 (and up 7.0% on constant currency basis).
Vitec’s acquisitions of Paralinx (February 2015) and SmallHD (December 2014) contributed approximately 75% of the revenue increases over 2014.
Given the positive contribution from companies acquired through M&A actions, Vitec highlighted its acquisition track record in its presentation to investors.
Remarking on the Broadcast Division results, CEO Stephen Bird stated, “The Broadcast Division performed satisfactorily in variable market conditions. Our higher technology product businesses are performing well, including further strong growth of our wireless products. This partially offset lower sales of large camera supports, the non-repeat of major sporting events, and investments in the future growth of our higher technology businesses.”
Bird continued, “Broadcast Market continues to show some variability in demand with customers remaining cautious this is impacting large project activity. The US market has been more positive and Japan is performing well. However, conditions in EMEA are more challenging.”
Operating profit for the Broadcast Division in2015 was £20.3 million, a decrease of 4.2% versus the 2014 result (down 1.3% on constant currency basis). Operating profit is stated before restructuring costs and charges associated with acquired businesses.
Restructuring costs for 2015 were predominantly attributable to streamlining activities in the Broadcast Division.
These activities were announced as part of Vitec’s first half earnings release. Additional streamline actions for the entire company were announced in the year-end earnings release.
In aggregate, one-off costs associated with the continued restructuring are approximately £10 million, an increase from Management’s previous estimate of £6 million. The restructuring is focused on the UK, US, and Europe operations and will be completed by the end of 2016.
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