Vitec’s year-to-date performance in 2016 has been in line with the Board’s expectations (Vitec does not provide specific forecast guidance). The Company’s expectations for 2016 remain unchanged. First half 2016 results are scheduled for release on August 4, 2016.
The trading update reiterated management’s expectations to benefit from the Rio 2016 Olympics and ongoing restructuring activities. During the 2015 calendar year, one-off costs associated with the continued restructuring were approximately £10 million. The restructuring costs were predominantly attributable to streamlining activities in the Broadcast Division.
In addition, the press release referenced the opportunity to benefit from a weaker GBP versus the US Dollar and Euro.
The press release states that full year expectations remain unchanged based on exchange rates as of June 23, 2016. This was the date of the “Brexit” referendum in the UK. Since the results of the referendum the GBP has declined more than 10% versus the US Dollar and approximately 9% versus the Euro.
In terms of revenue profile, Vitec generated only 10% of 2015 revenue from the UK. 47% of 2015 revenue was from North America and 20% from Continental Europe. Because of this revenue profile, Vitec’s revenue results for 2016 should benefit from a weaker GBP currency.
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