Final Results - Year Ended 31 December 1999

Vitec Group PLC 10 March 2000 VITEC GROUP plc 1999 YEAR END RESULTS Vitec Group, the supplier of equipment to the world's television entertainment, photographic and retail markets today, announces results for the twelve months to 31 December 1999. 12 months ended 31 December 1999 1998 Turnover £171.4m £162.3m Profit before tax* £37.1m £39.3m Headline earnings per 54.3p 58.2p share Dividend per share 18.5p 16.1p *before goodwill amortisation/exceptional - Second half rebound produces good result - Consolidated sales up by 6% - Total dividend up 15% - Record operating cash flow of £51.1m - Share repurchases reduce equity by 16.5% - Philip Cushing appointed new Chief Executive Commenting on the results Malcolm Baggott, retiring Chief Executive, said: 'After a slower start to the year the group rebounded in the second half to report another set of good results and this trend has continued in the first two months of 2000. Record cash generation has also enabled us to improve balance sheet efficiency by share repurchases of 16.5% of the group's equity' Vitec Group plc Tel: 01494 679 800 Alison Carnwath, Chairman Malcolm Baggott, Chief Executive Richard Green, Group Financial Director Financial Dynamics Tel: 0171 831 3113 Charles Watson Richard Mountain Mob: 07909 684466 OVERVIEW Vitec is announcing another set of strong results and for the sixth year in succession, the Directors are recommending a dividend increase of 15% for the year, with a final dividend of 13.6p (1998 : 11.8p) making a total dividend of 18.5p for 1999 (1998 : 16.1p). The Photographic and Retail Display Division produced its best ever profits. The Broadcast Camera Systems results were affected by continuing reorganisation costs of Vinten in both the UK and the USA; the Communications and Audio Division continued to grow strongly; and the Broadcast Services Division produced double digit profit growth. Group sales increased by just under 6% to £171.4 million (1998 : £162.3 million) and earnings before interest, tax and goodwill amortisation was £38.2 million(1998 : £40.0 million). The effects of acquisitions in 1999 were immaterial to these results. Operating cash flow was £51.1 million, a record for the group and an increase of 18% over 1998 (£43.3 million): free cash flow was £21.4million, almost double the figure for 1998 (£11.0 million). Headline earnings per share was approximately 7% lower at 54.3p (1998 : 58.2p) as the tax charge for the group rose to 30.7% (1998 : 27.6%) OPERATIONAL REVIEW Photographic & Retail Display Sales of £69.5 million were 10.7% higher than 1998 (£62.8 million). This included first year sales by Litec of £1.4 million. Operating profits of Manfrotto, Bogen and Alu Italy all increased over 1998 but were adversely affected by a poor performance from Gitzo in France and some price pressure for Alu in the USA. Despite these effects, operating profits of £19.7 million were at record levels. Broadcast Camera Systems For the full year, sales were flat at £59.9 million. Although there were record profits from Anton/Bauer and Sachtler's profits were level with 1998, profits at Vinten were depressed due to reorganisation costs and lower sales volumes in the Americas. Profits for the year of £13.1 million were 16.0% down on 1998 (£15.6 million). Communications & Audio Sales for the Communications and Audio Division, which included a full year forDrake, were up by 33.6% at £15.9 million (1998 : £11.9 million); 1999 included a contribution of £0.5 million from Vega. Profits of Clear-Com were slightly down as it invested more in research and development. Drake is now revitalised and had a very good first full year. Overall, profits improved by 21.4% to £1.7 million (1998 : £1.4 million). Broadcast Services Broadcast Services revenues showed a modest increase over 1998 with sales of £26.1 million (1998 : £25.4 million). Prior year revenues included a substantial contribution from the Winter Olympics held in Nagano, Japan. As a result of better product mix, cost reductions and other profitability improvement programmes, operating profits were up by 12.1% at £3.7 million (1998 : £3.3 million). CORPORATE ACTIVITY There were no significant acquisitions made during the year and our surplus cash was used to effect share repurchases through both open market transactions and a tender offer. In total 16.5% of our equity was bought back at an average price of 620p per share which left the group with net debt of £27.8 million at the year-end. Interest cover remains high after these repurchases and the Group has considerable financial capacity. The Board continues to review suitable acquisitions in related businesses and in January 2000 we announced the purchase for US$12 million of most of the assets of the main competitor to Bexel, Duke City Video. These are currently being merged into Bexel. CHIEF EXECUTIVE In January this year the Board announced that Malcolm Baggott, our Chief Executive for the past ten years, wished to retire during the course of this financial year. Malcolm has been the architect of the Vitec Group and his tireless energy, combined with his effective leadership, have driven profits from £8.6 million in 1990 to £37.1 million today. Today, we announce the appointment of Philip Cushing to the position of the Group Chief Executive with effect from 28 April 2000. He brings to the Group a wealth of commercial, industrial and international experience gained most recently as Chief Executive of Inchcape plc and we are confident in his ability to take Vitec on to its next stage of development. FUTURE PROSPECTS Sixty per cent of the group profits are denominated in Euros and thirty six per cent are denominated in US dollars and therefore exchange rate movements can affect consolidated group profits. Nevertheless, sales in the second part of last year picked up strongly and this has continued in the first two months of this year. We have a talented group of executives heading our businesses and can look forward to the future with confidence. VITEC GROUP plc CONSOLIDATED PROFIT AND LOSS ACCOUNT for the year ended 31 December 1999 1999 1999 1999 1998 1998 1998 £'m £'m £'m £'m £'m £'m Before Goodwill Total Before Goodwill Total goodwill amortisation goodwill amortisation amortisation amortisation Turnover Continuing operations 169.5 - 169.5 159.9 - 159.9 Acquisitions 1.9 - 1.9 - - - Discontinued operation - - - 2.4 - 2.4 ______ ______ ______ ______ ______ ______ 171.4 - 171.4 162.3 - 162.3 Cost of sales (78.9) - (78.9) (75.5) - (75.5) ______ ______ ______ ______ ______ ______ Gross profit 92.5 - 92.5 86.8 - 86.8 Operating expenses (54.3) (0.5) (54.8) (46.8) (0.2) (47.0) Operating profit Continuing operations 38.0 (0.4) 37.6 39.8 (0.2) 39.6 Acquisitions 0.2 (0.1) 0.1 - - - Discontinued operation - - - 0.2 - 0.2 ______ ______ ______ ______ ______ ______ Group operating profit 38.2 (0.5) 37.7 40.0 (0.2) 39.8 Loss on sale of discontinued operation - - (0.6) - (0.6) ______ ______ ______ ______ ______ ______ Profit on ordinary activities before interest 38.2 (0.5) 37.7 39.4 (0.2) 39.2 ______ ______ ______ ______ Net interest payable (1.1) (0.7) ______ ______ Profit on ordinary activities before tax 36.6 38.5 Tax (11.4) (10.8) ______ ______ Profit on ordinary activities after tax 25.2 27.7 Minority interest - (0.1) ______ ______ Profit for the financial year 25.2 27.6 Dividends (7.6) (7.9) ______ ______ Retained profit 17.6 19.7 ______ ______ Basic earnings per share 53.3p 56.6p Diluted earnings per share 52.6p 56.1p Headline earnings per share 54.3p 58.2p The Board has recommended a final dividend of 13.6p per share (1998: 11.8p) which, together with the interim dividend of 4.9p (1998: 4.3p) totals 18.5p per share for the year (1998: 16.1p). The dividend is covered 3.4 times by earnings. If approved, it will be paid on 3 July 2000 to shareholders on the register at the close of business on 5 June 2000. The financial information in this announcement does not constitute the company's statutory accounts for the years ended 31 December 1999 or 1998 but is derived from those accounts. Statutory accounts for 1998 have been delivered to the registrar of companies, and those for 1999 will be delivered following the company's annual general meeting. The auditors have reported on the accounts; their report was unqualified and did not contain statements under section 237 (2) or (3) of the Companies Act 1985. VITEC GROUP plc SEGMENTAL ANALYSIS for the year ended 31 December 1999 Activity analysis Turnover Operating Profit 1999 1998 1999 1998 £'m £'m £'m £'m Class of business Photographic and retail display 69.5 62.8 19.7 19.5 Broadcast camera systems 59.9 59.8 13.1 15.6 Communications and audio 15.9 11.9 1.7 1.4 Broadcast services 26.1 25.4 3.7 3.3 Goodwill amortisation - - (0.5) (0.2) ______ ______ ______ ______ 171.4 159.9 37.7 39.6 Discontinued operation - 2.4 - 0.2 ______ ______ ______ ______ 171.4 162.3 37.7 39.8 ______ ______ ______ ______ By destination By origin 1999 1998 1999 1998 £'m £'m £'m £'m Geographical turnover United Kingdom 7.7 8.0 23.4 21.8 The rest of Europe 44.0 37.2 66.5 59.7 The Americas 99.5 95.4 78.6 76.5 Asia and Australasia 17.5 16.4 2.9 1.9 Africa and Middle East 2.7 2.9 - - ______ ______ ______ ______ 171.4 159.9 171.4 159.9 Discontinued operation - 2.4 - 2.4 ______ ______ ______ ______ 171.4 162.3 171.4 162.3 ______ ______ ______ ______ VITEC GROUP plc CONSOLIDATED BALANCE SHEET as at 31 December 1999 1999 1998 £'m £'m Fixed assets Intangible assets 10.0 6.9 Tangible assets 37.5 37.0 ______ ______ 47.5 43.9 ______ ______ Current assets Stocks 29.1 30.6 Debtors 32.6 33.2 Cash at bank and in hand 32.8 26.5 ______ ______ 94.5 90.3 Creditors - due within one year (33.7) (30.0) ______ ______ Net current assets 60.8 60.3 ______ ______ Total assets less current liabilities 108.3 104.2 Creditors - due after more than one year (57.3) (16.2) Provisions for liabilities and charges (5.9) (5.9) ______ ______ Net assets 45.1 82.1 ______ ______ Capital and reserves Called up share capital 8.2 9.8 Share premium account 2.3 1.7 Capital redemption reserve 1.6 - Revaluation reserve 1.5 1.5 Profit and loss account 30.6 68.3 ______ ______ Shareholders' funds - equity 44.2 81.3 Minority interest - equity 0.9 0.8 ______ ______ 45.1 82.1 ______ ______ VITEC GROUP plc CONSOLIDATED CASH FLOW STATEMENT for the year ended 31 December 1999 1999 1998 £'m £'m Net cash inflow from operating activities 51.1 43.3 Returns on investments and servicing of finance Interest received 0.7 1.0 Interest paid (1.6) (1.8) ______ ______ Net cash outflow for returns on investments and servicing of finance (0.9) (0.8) ______ ______ Tax paid (10.6) (14.1) ______ ______ Capital expenditure Purchase of tangible fixed assets (10.7) (11.0) Sale of tangible fixed assets 0.3 0.4 ______ ______ Net cash outflow for capital expenditure (10.4) (10.6) Acquisitions and disposal Purchase of subsidiary undertakings (4.8) (9.4) Sale of subsidiary undertaking - 0.6 ______ ______ Net cash outflow for acquisitions and disposal (4.8) (8.8) Equity dividends paid (7.8) (6.8) ______ ______ Net cash inflow before use of liquid 16.6 2.2 resources and financing Management of liquid resources Cash funds under management - 5.2 Financing Issue of shares 0.6 0.5 Purchase of shares (50.7) - Net receipt/(repayment) of loans 41.1 (4.6) ______ ______ Net cash outflow from financing (9.0) (4.1) ______ ______ Increase in cash in the period 7.6 3.3 ______ ______ VITEC GROUP plc OTHER INFORMATION for the year ended 31 December 1999 Reconciliation of operating profit to net cash flow from operating activities 1999 1998 Continuing operations £'m £'m Operating profit 37.7 39.6 Goodwill amortisation 0.5 0.2 Depreciation 8.6 7.8 (Profit)/loss on sale of fixed assets (0.1) 0.2 Increase in provisions 0.3 0.2 Decrease/(increase) in stock 1.3 (1.5) Increase in debtors (0.6) (1.5) Increase/(decrease) in creditors 3.4 (2.4) ______ ______ 51.1 42.6 Discontinued operation - 0.7 ______ ______ Net cash inflow from operating activities 51.1 43.3 ______ ______ Total recognised gains and losses and reconciliation of shareholders' funds 1999 1998 £'m £'m Profit for the financial year 25.2 27.6 Exchange rate movements and related tax on foreign (4.6) 3.1 net investments ______ ______ Total recognised gains relating to the year 20.6 30.7 Dividends (7.6) (7.9) New share capital subscribed 0.6 0.5 Purchase of shares (50.7) - Writeback of goodwill from reserves - 0.7 ______ ______ (37.1) 24.0 Opening shareholders' funds 81.3 57.3 ______ ______ Closing shareholders' funds 44.2 81.3 ______ ______

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