Half-year Results

RNS Number : 5875N

The Vitec Group PLC

10 August 2017

 

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. THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION. 10 August 2017 The Vitec Group plc Half Year Results to 30 June 2017 Significant strategic progress transforming the Group The Vitec Group plc ("Vitec" or "the Group"), the international provider of products and solutions for the broadcast and photographic markets, announces its results for the half year ended 30 June 2017. Results % change at constant exchange rates H1 2017 H1 2016 % change Total Continuing** Total operations Adjusted revenue* £187.6m £171.1m +9.6% -1.2% +3.1% Adjusted operating profit* £21.2m £17.4m +21.8% +6.3% +9.6% Adjusted profit before tax* £19.3m £15.5m +24.5% +10.9% +14.7% Adjusted basic earnings per share* 31.7p 24.6p +28.9% Interim dividend per share 10.4p 9.9p +5.1% Free cash flow+ £19.4m £22.6m Net debt £(52.6)m £(72.8)m Statutory results Continuing operations Revenue £164.9m £144.0m Operating profit £18.3m £13.1m Profit before tax £16.4m £11.2m Profit/(loss) after tax from discontinued operations £0.8m £(0.5)m Basic earnings per share from continuing and discontinued operations 32.0p 17.1p Highlights • Significant progress executing our strategy to transform the Group • Continued underlying growth for the Group led by higher technology businesses • Adjusted operating margin* improved from 10.2% to 11.3% • ROCE++ at 19.4% (FY 16: 17.5%) benefited from higher adjusted operating profit*, lower assets and favourable FX in H1 • Disposals of US broadcast services ("Bexel") and Haigh-Farr will further improve ROCE++ and margins • Strong cash generation with 115% operating cash conversion† * In addition to statutory reporting, Vitec reports total performance for continuing and discontinued operations on an adjusted basis before charges associated with acquisition of businesses, restructuring costs and gain on disposal of business as described on page 2. ** Both Bexel and Haigh-Farr have been classified as discontinued operations in the current period.  The remaining businesses within the Group are classified as continuing operations.  All comparatives have been classified on the same basis. + Free cash flow: cash generated from operations in the period after net capital expenditure, net interest and tax paid. ++ ROCE (Return on Capital Employed) is calculated as adjusted operating profit* for the last twelve months divided by average total assets less current liabilities excluding the current portion of interest-bearing borrowings. † Cash generated from operating activities after net capital expenditure, before restructuring costs paid divided by adjusted operating profit*
Commenting on the results, Stephen Bird, Group Chief Executive, said:  "We made significant progress during the first half by streamlining the Group's portfolio of businesses and continue to execute our strategy in all areas, particularly by launching new products. The Photographic Division continues to perform well and the market is showing signs of recovery.  The Broadcast Division benefited from further growth in our higher technology businesses.  A challenging US studio market has been partly offset by good underlying performance in Europe and the Middle East, while Wooden Camera is performing ahead of expectations. Strong cash generation and a robust balance sheet support our clear growth strategy and the disposals of Haigh-Farr and Bexel will improve Group margins and ROCE. On the back of a good trading performance and continued underlying growth, the Board's expectations for the full year are unchanged, assuming no significant change in exchange rates." For further information please contact:     The Vitec Group plc Telephone: [phone] Stephen Bird, Group Chief Executive Kath Kearney-Croft, Group Finance Director MHP Communications Telephone: [phone] Tim Rowntree/ Ollie Hoare Vitec will present its results to analysts at 8.30am on Thursday, 10 August 2017.  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: www.vitecgroup.com/investors/results-reports-and-presentations/ Notes to Editors: Vitec is a leading global provider of premium branded products and solutions to the fast changing and growing "image capture and sharing" market. Vitec's customers include broadcasters, independent content creators, photographers and enterprises, and our activities comprise: design, manufacture and distribution of high performance products and solutions including camera supports, wireless systems, robotic camera systems, prompters, LED lights, mobile power, monitors and bags. We employ around 1,600 people across the world in ten different countries and are organised in two Divisions: Broadcast and Photographic. The Vitec Group plc is listed on the London Stock Exchange with 2016 revenue of £376.2 million. More information can be found at: www.vitecgroup.com LEI number: 2138007H5DQ4X8YOCF14 Notes * - Adjusted performance is before £4.5m charges associated with acquisition of businesses (H1 2016: £2.7m), £nil restructuring costs (H1 2016: £2.1m) and £3.2m gain on disposal of business (H1 2016: £nil). Charges associated with acquisition of businesses consisted of £4.5m amortisation of acquired intangible assets (H1 2016: £2.7m), £nil purchase price adjustment (H1 2016: £0.2m credit), and £nil transaction costs relating to acquisition of businesses (H1 2016: £0.2m). - Adjusted performance for continuing operations is before £3.3m charges associated with acquisition of businesses (H1 2016: £2.2m) and £nil restructuring costs (H1 2016: £1.8m). Charges associated with acquisition of businesses consisted of £3.3m amortisation of acquired intangible assets (H1 2016: £2.2m), £nil purchase price adjustment (H1 2016: £0.2m credit), and £nil transaction costs relating to acquisition of businesses (H1 2016: £0.2m). - Adjusted earnings per share is earnings before restructuring costs, charges associated with acquisition of businesses and gain on disposal of business divided by the weighted average number of ordinary shares in issue. - Where adjusted performance measures are provided, they are compared to the equivalent measures in the prior period. 1 This statement is based on information sourced from management estimates and includes comparing performance at constant exchange rates to assist in understanding the underlying performance of the Group. 2 H1 2017 average exchange rates: £1 = $1.27, £1 = €1.16, €1 = $1.09, £1 = Yen142. 3 H1 2016 average exchange rates: £1 = $1.43, £1 = €1.29, €1 = $1.11, £1 = Yen160.
H1 2017 management & financial review H1 2017 H1 2016 % Change % Change  at constant exchange rates Revenue Total £187.6m £171.1m +9.6% -1.2% Continuing operations £164.9m £144.0m +14.5% +3.1% Adjusted operating profit* Total £21.2m £17.4m +21.8% +6.3% Continuing operations £21.6m £17.1m +26.3% +9.6% Adjusted profit before tax* Total £19.3m £15.5m +24.5% +10.9% Continuing operations £19.7m £15.2m +29.6% +14.7% Adjusted EPS* Total 31.7p 24.6p +28.9% Continuing operations 34.2p 23.9p +43.1% Revenue from continuing operations increased by 14.5% to £164.9 million (H1 2016: £144.0 million) and adjusted operating profit* from continuing operations was 26.3% higher at £21.6 million (H1 2016: £17.1 million).  At constant exchange rates, revenue from continuing operations was 3.1% higher and adjusted operating profit* from continuing operations increased by 9.6%.  Lower broadcast activity in the more mature US markets was offset by growth in sales of higher technology and photographic products. The Broadcast Division grew revenue from continuing operations by 15.0% to £86.5 million and adjusted operating profit* from continuing operations increased by 29.3% to £10.6 million.  Revenue growth includes £4.1 million from the 2016 acquisitions of Offhollywood and Wooden Camera.  There was continued growth in higher technology products including wireless transmitters and receivers, camera monitors, and robotics supported by new product launches.  At constant exchange rates revenue from continuing operations increased by 3.2% and adjusted operating profit* from continuing operations was 10.3% higher than the prior period. The Photographic Division grew revenue by 14.0% to £78.4 million and adjusted operating profit* increased by 23.6% to £11.0 million, benefiting from higher sales of video and lighting products, as well as increased revenue through its e-commerce and owned distribution channels.  At constant exchange rates revenue increased by 3.0% and adjusted operating profit* was 8.9% higher than the prior period. Group gross margin from continuing operations at 44.7% was higher than the prior period (H1 2016: 42.4%) reflecting growth in higher technology sales, favourable sales mix and prior year acquisitions.    Adjusted operating expenses* from continuing operations were £8.1 million higher than H1 2016 at £52.1 million.  This mainly reflects an adverse currency impact of £3.8 million, and investments in our higher technology and photographic businesses to drive sales and future growth.  This has been partly offset by restructuring savings from the prior year actions that were successfully completed.  Investment in new product development at £8.0 million (H1 2016: £6.1 million) was higher than the prior period at 5.0% of Group product sales from continuing operations (H1 2016: 4.4%) mainly due to incremental higher technology R&D investment. As expected, there was a net foreign exchange benefit versus H1 2016 of £2.7 million on our adjusted operating profit* from continuing operations of £21.6 million mainly due to a stronger US Dollar and Euro.   Adjusted profit before tax* from continuing operations of £19.7 million was £4.5 million higher than the prior period (H1 2016: £15.2 million).  Statutory profit before tax from continuing operations of £16.4 million (H1 2016: £11.2 million) was after £3.3 million charges associated with acquisition of businesses (H1 2016: £2.2 million) and £nil restructuring costs (H1 2016: £1.8 million). Adjusted earnings per share* from continuing operations increased by 43.1% to 34.2 pence per share (H1 2016: 23.9 pence per share).  Basic earnings per share from continuing operations was 30.3 pence per share (H1 2016: 18.2 pence per share). Free cash flow+ of £19.4 million (H1 2016: £22.6 million) includes the benefits from higher operating profit and lower capital expenditure partly offset by a working capital outflow of £2.0 million in H1 2017 (H1 2016: £8.6 million inflow) principally driven by an increase in inventory where inventory levels at the end of 2016 were particularly low.  H1 2016 free cash flow+ also included an exceptionally large inflow on working capital reductions across the Group, a £4.0 million inflow from the Olympics and proceeds of £3.9 million from the sale of the Bury St. Edmunds manufacturing site.   Net debt at 30 June 2017 was £52.6 million (30 June 2016: £72.8 million). The decrease in net debt resulting from cash flows was £19.8 million (H1 2016: £9.9 million). This was after: a £1.6 million earnout payment on Wooden Camera in respect of their strong FY16 performance; £7.7 million of dividend payments (H1 2016: £6.7 million); a net cash inflow of £11.1 million on the disposal of Haigh-Farr;  and a net favourable foreign exchange impact of £2.7 million principally driven by US Dollar denominated debt.  Vitec repaid its $50 million private placement facility in full, funded by the Revolving Credit Facility, in the period. The Group's balance sheet remains strong with a year-end net debt to adjusted EBITDA* ratio of 0.9 times (30 June 2016: 1.3 times). The Board has declared an interim dividend of 10.4 pence per share (H1 2016: 9.9 pence per share).  The dividend will be paid on Friday, 20 October 2017 to shareholders on the register at the close of business on Friday, 22 September 2017. + Free cash flow: cash generated from operations in the period after net capital expenditure, net interest and tax paid.

Significant progress executing our strategy Vitec operates in the fast growing "image capture and sharing" market.  Technology is driving fundamental changes to this market and Vitec's unique heritage and credibility of our premium brands enables us to capitalise on those changes. We have grown our addressable markets and end users from traditional broadcast and photographic customers to newer faster growing market segments, like new media which includes social media.  These include independent content creators and enterprises that are increasingly using high quality video for their communication. Vitec continues to lead the market with its range of products and solutions.  We have developed a significantly higher technology business by expanding our capabilities and designing products for the growing independent content creator markets and new image capture devices. We continue to successfully transform Vitec by executing our growth strategy focused on five main strategic priorities: 1. To improve the core by improving and strengthening our business model while continuing to innovate. 2. To maintain investment into new and faster growing markets and technologies to underpin future growth. 3. To continue to get closer to our end customers by owning more distributors and optimising our e-commerce activities. 4. To focus on geographical expansion, especially in APAC, which we believe has good medium-term growth opportunities. 5. To supplement our many organic growth opportunities with carefully targeted acquisitions and corporate development. Disposals On 1 August 2017 we sold Bexel to NEP Supershooters L.P., a subsidiary of NEP Group Inc., for a gross cash consideration of $35.0 million (£26.5 million) and net cash proceeds of $32.0 million (£24.2 million).  Estimated net assets at completion were $25.0 million (£18.9 million).  The disposal represents a further step in the transformation of the Group and is in line with Vitec's stated aim of seeking to improve operating margins across the business. We disposed of the non-core Haigh-Farr business on 9 May 2017.  There was a gain on the disposal of the business before tax of £3.2 million (H1 2016: £nil). These disposals enable Vitec to focus on driving growth in its core, premium branded broadcast and photographic markets.

Broadcast Division The Broadcast Division designs, manufactures, distributes and provides premium branded products and solutions for broadcasters, film and video production companies, independent content creators and enterprises.   Adjusted* Statutory Broadcast Division Continuing operations H1 2017 H1 2016 % Change % Change at constant exchange rates H1 2017 H1 2016 Revenue £86.5m £75.2m +15.0% +3.2% £86.5m £75.2m Operating profit £10.6m £8.2m +29.3% +10.3% £7.4m £5.7m Operating margin 12.3% 10.9% +140 bps +70 bps 8.6% 7.6% * For Broadcast, before charges associated with acquisition of businesses of £3.2m (H1 2016: £1.9m) and £nil restructuring costs (H1 2016: £0.6m). Revenue from continuing operations for H1 2017 was £86.5 million, an increase of 15.0% on the prior period.  At constant exchange rates revenue from continuing operations was 3.2% higher than the prior period. Revenue from higher technology products increased from the prior period.  Sales of wireless transmitters and receivers, camera monitors, and robotics continue to perform well.  SmallHD delivered good growth in the first half of the year compared to the prior period, benefiting from previous investment in its new monitor technology and from new product launches.  Wooden Camera, the high quality branded camera accessories business that we acquired in September 2016, is performing ahead of our expectations.  The market for our traditional large studio supports has been more challenging in the US although this was partly offset by better conditions in Europe and the Middle East. We continued to invest in new product development with our focus on new markets and technology.  New products launched in the period include a new line of Teradek encoders, new ranges of SmallHD monitors, Wooden Camera Universal Follow Focus, Autoscript Intelligent Prompting, and Litepanels Astra and Sola LED lights. Adjusted operating profit* from continuing operations increased by £2.4 million to £10.6 million and was 10.3% higher than the prior period at constant exchange rates.  This reflects growth in higher technology products, favourable sales mix, and a contribution of £1.7 million from acquisitions. Adjusted* Statutory Broadcast Division Discontinued operations H1 2017 H1 2016 % Change % Change at constant exchange rates H1 2017 H1 2016 Revenue £22.7m £27.1m -16.2% -25.3% £22.7m £27.1m Operating (loss)/ profit £(0.4)m £0.3m £(1.6)m £(0.5)m Earnings per share (2.5)p 0.7p 1.7p (1.1)p * For Broadcast discontinued operations, before amortisation of acquired intangible assets of £1.2m (H1 2016: £0.5m) and £nil restructuring costs (H1 2016: £0.3m). Revenue from discontinued operations was £22.7 million (H1 2016: £27.1 million) and adjusted operating loss* from discontinued operations was £0.4 million (H1 2016: £0.3 million profit) on lower sales at Haigh-Farr and lower activity in US asset rentals in a non-Olympic year. Revenue from the broadcast services business was lower than the prior period.  The lower activity impacting the business' profitability from the end of last year continued into H1 2017 as the traditional US asset rentals market in which this business operates became increasingly competitive.  We carefully reviewed the business and its fit with our strategic priorities and subsequently agreed to sell Bexel to NEP Supershooters L.P., a subsidiary of NEP Group Inc., for a gross cash consideration of $35.0 million (£26.5 million) and net cash proceeds of $32.0 million (£24.2 million). This deal completed on 1 August 2017.

Photographic Division The Photographic Division designs, manufactures and distributes premium branded equipment for photographic and video cameras and provides dedicated solutions to professional and non-professional image makers.  This consists primarily of camera supports, tripods, camera bags, lighting supports, LED lights, lighting controls and filters.  It also supplies an expanding range of premium accessories for smartphones, action cameras and drones. Adjusted* Statutory Photographic Division H1 2017 H1 2016 % Change % Change at constant exchange rates H1 2017 H1 2016 Revenue £78.4m £68.8m +14.0% +3.0% £78.4m £68.8m Operating profit £11.0m £8.9m +23.6% +8.9% £10.9m £7.4m Operating margin 14.0% 12.9% +110 bps +70 bps 13.9% 10.8% * For Photographic, before charges associated with acquisition of businesses of £0.1m (H1 2016: £0.3m) and £nil restructuring costs (H1 2016: £1.2m). The Photographic Division grew revenue by 14.0% to £78.4 million and adjusted operating profit* by 23.6% to £11.0 million.  Excluding the favourable effect of foreign exchange, revenue was 3.0% higher and adjusted operating profit* increased by 8.9%. We have grown sales in our owned distribution and e-commerce channels, both directly and through sales to our major online partners including Amazon.  We are pleased with this progress as we are now seeing the return on our previous investment in this infrastructure that enables us to get closer to our customers on a global scale.  Our partnership with Leica has progressed in the period with Gitzo distributed through their stores world-wide. We have successfully grown our sales of video supports, along with filters and light shapers designed for professional and non-professional image makers.  Manfrotto bags are also performing well.  The Photographic Division has a good market share in the APAC region.  We have progressively grown sales in APAC during H1 2017 by £3.9 million supported by our direct distribution in China, Hong Kong and Japan.  APAC sales made up 28% of Photographic revenue in H1 2017 (H1 2016: 26%). Recent Camera and Imaging Products Association (CIPA) data is encouraging with signs of the interchangeable lens cameras (ILC) market stabilising and showing recovery over the last eight months.   Adjusted operating profit* grew by £2.1 million to £11.0 million and was 8.9% higher than the prior period at constant exchange rates.  This reflects the increase in revenue and favourable sales and channel mix.

Board changes On 24 April 2017, Kath Kearney-Croft was appointed Group Finance Director of the Company and on 28 April 2017, Paul Hayes ceased to be a director of the Company. Martin Green was appointed an Executive Director of the Company on 4 January 2017.

Principal risks and uncertainties The principal risks and uncertainties that may affect our performance are unchanged from those set out on pages 28 and 29 of the Annual Report & Accounts 2016. The Directors continue to regard these as the principal risks and uncertainties facing the Group. Vitec is exposed to a number of risk factors which may affect its performance.  The Group has a well-established framework for reviewing and assessing these risks on a regular basis, and has put in place appropriate processes and procedures to mitigate against them.  However, no system of control or mitigation can completely eliminate all risks.  In summary, the principal risks facing the Group are around: • Demand for Vitec's products • New markets and channels of distribution • Acquisitions • Pricing pressure • Dependence on key suppliers • Dependence on key customers • People • Laws and regulations • Reputation of the Vitec Group • Foreign exchange rates • Business continuity and IT security • Effectiveness and impact of restructuring projects Forward-looking statements This announcement contains forward-looking statements with respect to the financial condition, performance, position, strategy, results and plans of the Group based on Management's current expectations or beliefs as well as assumptions about future events.  These forward-looking statements are not guarantees of future performance.  Undue reliance should not be placed on forward-looking statements because, by their very nature, they are subject to known and unknown risks and uncertainties and can be affected by other factors that could cause actual results, and the Group's plans and objectives, to differ materially from those expressed or implied in the forward-looking statements.  The Company undertakes no obligation to publically revise or update any forward-looking statements or adjust them for future events or developments.  Nothing in this announcement should be construed as a profit forecast. The information in this announcement does not constitute an offer to sell or an invitation to buy shares in the Company in any jurisdiction or an invitation or inducement to engage in any other investment activities.  The release or publication of this announcement in certain jurisdictions may be restricted by law.  Persons who are not resident in the United Kingdom or who are subject to other jurisdictions should inform themselves of, and observe, any applicable requirements. This announcement contains brands and products that are protected in accordance with applicable trademark and patent laws by virtue of their registration. Responsibility statement of the Directors in respect of the Half Year Results to 30 June 2017 We confirm that to the best of our knowledge: • the condensed set of financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU. The Half Year Results announcement report includes a fair review of the information required by: (a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the current financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and (b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the Group during that period; and any changes in the related party transactions described in the last annual report that could do so. Outlook On the back of a good trading performance and continued underlying growth, the Board's expectations for the full year are unchanged, assuming no significant change in exchange rates. For and on behalf of the Board Stephen Bird Kath Kearney-Croft Group Chief Executive Group Finance Director

INDEPENDENT REVIEW REPORT TO THE VITEC GROUP PLC 

Conclusion 

We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2017, which comprises Condensed Consolidated Income Statement, Consolidated Statement of Comprehensive Income, Condensed Consolidated Balance Sheet, Consolidated Statement of Changes in Equity, Condensed Consolidated Statement of Cash Flows and the related explanatory notes. 

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2017 is not prepared, in all material respects, in accordance with IAS 34 Interim Financial Reporting as adopted by the EU and the Disclosure Guidance and Transparency Rules ("the DTR") of the UK's Financial Conduct Authority ("the UK FCA").   

Scope of review 

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the Auditing Practices Board for use in the UK.  A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures.  We read the other information contained in the half-yearly financial report and consider whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements. 

A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit.  Accordingly, we do not express an audit opinion. 

Directors' responsibilities 

The half-yearly financial report is the responsibility of, and has been approved by, the directors.  The directors are responsible for preparing the half-yearly financial report in accordance with the DTR of the UK FCA. 

As disclosed in note 1, the annual financial statements of the group are prepared in accordance with International Financial Reporting Standards as adopted by the EU.  The directors are responsible for preparing the condensed set of financial statements included in the half-yearly financial report in accordance with IAS 34 as adopted by the EU. 

Our responsibility 

Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review. 

The purpose of our review work and to whom we owe our responsibilities

This report is made solely to the company in accordance with the terms of our engagement to assist the company in meeting the requirements of the DTR of the UK FCA.  Our review has been undertaken so that we might state to the company those matters we are required to state to it in this report and for no other purpose.  To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company for our review work, for this report, or for the conclusions we have reached. 

Adrian Wilcox

For and on behalf of KPMG LLP 

Chartered Accountants 

15 Canada Square

Canary Wharf

London

E14 5GL  

9 August 2017

Condensed Consolidated Income Statement
For the half year ended 30 June 2017
			Half year to 30 June 2017	Half year to 30 June 2016	Year to 31 December 2016
	Notes		£m	£m	£m
Revenue	2		164.9	144.0	318.9
Cost of sales			(91.2)	(82.9)	(183.5)
Gross profit			73.7	61.1	135.4
Operating expenses			(55.4)	(48.0)	(105.0)
Operating profit			18.3	13.1	30.4
Comprising
- Operating profit before charges associated with acquisition of businesses and restructuring costs			21.6	17.1	41.4
- Charges associated with acquisition of businesses	3		(3.3)	(2.2)	(7.6)
- Restructuring costs	3		-	(1.8)	(3.4)
			18.3	13.1	30.4
Net finance expense	4		(1.9)	(1.9)	(4.0)
Profit before tax			16.4	11.2	26.4
Comprising
- Profit before tax, excluding charges associated with acquisition of businesses and restructuring costs			19.7	15.2	37.4
- Charges associated with acquisition of businesses	3		(3.3)	(2.2)	(7.6)
- Restructuring costs	3		-	(1.8)	(3.4)
			16.4	11.2	26.4
Taxation	7		(2.9)	(3.1)	(1.5)
Profit from continuing operations			13.5	8.1	24.9
Profit/(loss) after tax from discontinued operations	8		0.8	(0.5)	(15.9)
Profit attributable to owners of the parent			14.3	7.6	9.0
Earnings per share from continuing and discontinued operations	5
Basic earnings per share			32.0p	17.1p	20.2p
Diluted earnings per share			31.7p	17.0p	20.1p
Average exchange rates
Euro			1.16	1.29	1.22
US$			1.27	1.43	1.35

Consolidated Statement of Comprehensive Income
For the half year ended 30 June 2017
	Half year to 30 June 2017	Half year to 30 June 2016	Year to 31 December 2016
	£m	£m	£m
Profit for the period	14.3	7.6	9.0
Other comprehensive income:
Items that will not be reclassified to profit or loss:
Remeasurements of defined benefit obligation	2.1	(3.6)	(6.4)
Related tax	(0.4)	0.5	1.0
Items that are or may be reclassified to profit or loss:
Foreign exchange gain recycled to the Income Statement on disposal of business	(8.8)	-	-
Currency translation differences on foreign currency subsidiaries	(6.5)	22.8	37.7
Net investment hedges - net gain/(loss)	2.5	(9.9)	(16.6)
Cash flow hedges - reclassified to the Income Statement	2.7	0.5	0.8
Cash flow hedges - effective portion of changes in fair value	2.2	(5.2)	(4.6)
Related tax	(1.2)	0.9	0.9
Other comprehensive (expense)/income, net of tax	(7.4)	6.0	12.8
Total comprehensive income for the period attributable to owners of the parent	6.9	13.6	21.8

Condensed Consolidated Balance Sheet
As at 30 June 2017
		30 June 2017		30 June 2016		31 December 2016
	Notes	£m		£m		£m
Assets
Non-current assets
Intangible assets		81.0		96.9		99.0
Property, plant and equipment		29.0		57.1		54.0
Trade and other receivables		0.9		0.7		0.9
Derivative financial instruments		0.4		-		0.2
Deferred tax assets		24.9		17.8		26.6
		136.2		172.5		180.7
Current assets
Inventories		61.9		61.4		57.9
Trade and other receivables		53.5		59.2		66.2
Derivative financial instruments		0.8		-		0.2
Current tax assets		0.9		1.0		0.7
Cash and cash equivalents		18.7		20.9		17.1
Assets of the disposal group classified as held for sale	8	22.6		-		-
		158.4		142.5		142.1
Total assets		294.6		315.0		322.8
Liabilities
Current liabilities
Bank overdrafts		-		-		0.3
Interest-bearing loans and borrowings		0.5		0.1		40.9
Trade and other payables		50.8		55.5		55.3
Derivative financial instruments		1.6		5.1		4.8
Current tax liabilities		10.7		7.7		8.1
Provisions		2.3		4.0		4.9
Liabilities of the disposal group classified as held for sale	8	4.3		-		-
		70.2		72.4		114.3
Non-current liabilities
Interest-bearing loans and borrowings		70.8		93.6		51.0
Derivative financial instruments		0.1		1.6		1.2
Other payables		0.8		-		-
Post-employment obligations		11.1		10.1		13.0
Provisions		0.7		0.7		1.1
Deferred tax liabilities		2.3		2.4		2.4
		85.8		108.4		68.7
Total liabilities		156.0		180.8		183.0
Net assets		138.6		134.2		139.8
Equity
Share capital		9.0		8.9		9.0
Share premium		15.5		14.5		15.4
Translation reserve		4.0		8.6		16.8
Capital redemption reserve		1.6		1.6		1.6
Cash flow hedging reserve		(0.2)		(4.8)		(3.9)
Retained earnings		108.7		105.4		100.9
Total equity		138.6		134.2		139.8
Balance Sheet exchange rates
Euro		1.14		1.20		1.17
US$		1.30		1.34		1.24

Consolidated Statement of Changes in Equity
For the half year ended 30 June 2017
	Share capital	Share premium	Translation reserve	Capital redemption reserve	Cash flow hedging reserve	Retained earnings	Total equity
	£m	£m	£m	£m	£m	£m	£m
Balance at 1 January 2017	9.0	15.4	16.8	1.6	(3.9)	100.9	139.8
Total comprehensive income for the period
Profit for the period	-	-	-	-	-	14.3	14.3
Other comprehensive (expense)/income for the period	-	-	(12.8)	-	3.7	1.7	(7.4)
Contributions by and distributions to owners
Dividends paid	-	-	-	-	-	(7.7)	(7.7)
Own shares purchased	-	-	-	-	-	(1.3)	(1.3)
New shares issued	-	0.1	-	-	-	-	0.1
Share-based payment charge, net of tax	-	-	-	-	-	0.8	0.8
Balance at 30 June 2017	9.0	15.5	4.0	1.6	(0.2)	108.7	138.6
	Share capital	Share premium	Translation reserve	Capital redemption reserve	Cash flow hedging reserve	Retained earnings	Total equity
	£m	£m	£m	£m	£m	£m	£m
Balance at 1 January 2016	8.9	14.3	(4.3)	1.6	(1.0)	106.8	126.3
Total comprehensive income for the period
Profit for the period	-	-	-	-	-	7.6	7.6
Other comprehensive income/(expense) for the period	-	-	12.9	-	(3.8)	(3.1)	6.0
Contributions by and distributions to owners
Dividends paid	-	-	-	-	-	(6.7)	(6.7)
New shares issued	-	0.2	-	-	-	-	0.2
Share-based payment charge, net of tax	-	-	-	-	-	0.8	0.8
Balance at 30 June 2016	8.9	14.5	8.6	1.6	(4.8)	105.4	134.2

Condensed Consolidated Statement of Cash Flows
For the half year ended 30 June 2017
								Half year to 30 June		Half year to 30 June		Year to 31 December
								2017		2016		2016
					Notes			£m		£m		£m
Cash flows from operating activities
Profit for the period								14.3		7.6		9.0
Adjustments for:
Taxation								3.7		3.1		1.5
Depreciation								6.9		7.2		15.3
Amortisation of intangible assets								6.1		4.2		11.0
Impairment of intangible assets								-		-		12.1
Net gain on disposal of property, plant and equipment and software								(0.5)		(1.0)		(1.5)
Fair value (losses)/gains on derivative financial instruments								(0.3)		0.4		0.4
Share-based payment charge								0.8		0.8		1.6
Earnout payments and purchase price adjustment								-		(0.2)		1.2
Profit on disposal of business								(3.2)		-		-
Net finance expense								1.9		1.9		4.0
Operating profit before changes in working capital and provisions								29.7		24.0		54.6
(Increase)/decrease in inventories								(8.2)		4.1		11.2
Decrease/(increase) in receivables								4.8		(2.8)		(4.5)
Increase in payables								1.4		7.3		5.3
Decrease in provisions								(1.0)		(1.4)		(1.8)
Cash generated from operating activities								26.7		31.2		64.8
Interest paid								(1.7)		(2.1)		(5.2)
Tax paid								(2.0)		(2.2)		(7.2)
Net cash from operating activities								23.0		26.9		52.4
Cash flows from investing activities
Proceeds from sale of property, plant and equipment and software								2.4		5.7		9.0
Purchase of property, plant and equipment								(3.7)		(8.7)		(13.4)
Capitalisation of software and development costs								(2.3)		(1.3)		(3.4)
Acquisition of businesses, net of cash acquired								(1.6)		(5.1)		(20.3)
Disposal of business						8		11.1		-		-
Cash outflow on previous disposal								(0.2)		(1.1)		(1.5)
Net cash from/(used in) investing activities								5.7		(10.5)		(29.6)
Cash flows from financing activities
Proceeds from the issue of shares								0.1		0.2		1.2
Own shares purchased								(1.3)		-		(0.1)
Repayment of interest-bearing loans and borrowings								(18.1)		(5.0)		(13.6)
Dividends paid								(7.7)		(6.7)		(11.1)
Net cash used in financing activities								(27.0)		(11.5)		(23.6)
Increase/(decrease) in cash and cash equivalents						9		1.7		4.9		(0.8)
Cash and cash equivalents at 1 January								16.8		12.5		12.5
Effect of exchange rate fluctuations on cash held								0.2		3.5		5.1
Cash and cash equivalents at the end of period (1)						9		18.7		20.9		16.8
(1)  Cash and cash equivalents include bank overdrafts in the balance sheet
1 Accounting policies
Reporting entity
The Vitec Group plc (the "Company") is a company domiciled in the United Kingdom.  These condensed consolidated interim financial statements as at and for the half year ended 30 June 2017 comprise the Company and its subsidiaries (together referred to as the "Group").
Basis of preparation and statement of compliance
These condensed consolidated interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting. The accounting policies applied in the preparation of this interim financial information are consistent with the policies applied by the Group in the consolidated financial statements as at and for the year ended 31 December 2016 which were prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union. It does not include all of the information required for full annual financial statements and should be read in conjunction with the consolidated financial statements of the Group as at and for the year ended 31 December 2016.
The comparative figures for the year ended 31 December 2016 do not constitute statutory accounts for the purpose of section 435 of the Companies Act 2006. The auditors have reported on the 2016 accounts, and these have been filed with the Registrar of Companies; their report was unqualified, did not include a reference to any matters to which the auditors drew attention by way of emphasis, and did not contain a statement under section 498(2) or (3) of the Companies Act 2006.
The preparation of interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense.  Actual results may differ from these estimates.
In preparing these condensed consolidated interim financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements as at and for the year ended 31 December 2016.
These condensed consolidated interim financial statements were approved by the Board of Directors on 9 August 2017.
Going concern
The Directors have made appropriate enquiries and consider that the Group has adequate resources to continue in operational existence for the foreseeable future, which comprises the period of at least 12 months from the date of the half year results. There are no material uncertainties that would prevent the Directors from being unable to make this statement. Accordingly, the Directors continue to adopt the going concern basis in preparing the financial statements.
New standards and interpretations not yet adopted
The following standards, amendments to standards and interpretations will become effective for the Group in future years.
IFRS 15 "Revenue from Contracts with Customers"
The adoption of this standard requires the separation of performance obligations within contracts with customers, and the contractual value to be allocated to each of the performance obligations. Revenue is then recognised as each performance obligation is satisfied. This standard will replace existing revenue recognition standards. The Group is currently performing a detailed assessment of the impact of the application of IFRS 15 and expects to disclose additional quantitative information before it adopts IFRS 15.
IFRS 9 "Financial Instruments"
This standard covers the classification, measurement, impairment and derecognition of financial assets and financial liabilities together with a new hedge accounting model.
IFRS 16 "Leases"
The standard is effective for annual periods beginning on or after 1 January 2019. The adoption of this standard removes the distinction between operating and finance leases and will result in all operating leases, above a de minimis level, being capitalised with the associated assets and liabilities being brought on to the Balance Sheet.
The Group has not yet quantified the impact on its reported assets and liabilities of the adoption of IFRS 16. The quantitative effect will depend on, inter alia, the transition method chosen, the extent to which the Group uses the practical expedients and recognition exemptions, and any additional leases that the Group enters into. The Group expects to disclose its transition approach and quantitative information before adoption.
2. Segment reporting
Reportable segments
For the half year ended 30 June 2017
The US broadcast services business and Haigh-Farr defence antennas business, both part of the Broadcast Division, have been classified as discontinued operations in the current period. Their performance in this period and comparative periods is therefore part of discontinued operations as presented in Note 8 and is excluded from segmental performances below.
	For the half year to 30 June
From continuing operations:	Broadcast		Photographic					Corporate and unallocated			Consolidated
	2017	2016	2017	2016				2017	2016		2017		2016
	£m	£m	£m	£m				£m	£m		£m		£m
Revenue from external customers:
Sales	83.1	71.4	78.4	68.8				-	-		161.5		140.2
Services	3.4	3.8	-	-				-	-		3.4		3.8
Total revenue from external customers	86.5	75.2	78.4	68.8				-	-		164.9		144.0
Inter-segment revenue (1)	0.2	0.2	0.4	0.1				(0.6)	(0.3)		-		-
Total revenue	86.7	75.4	78.8	68.9				(0.6)	(0.3)		164.9		144.0
Segment result	10.6	8.2	11.0	8.9				-	-		21.6		17.1
Amortisation of acquired intangible assets	(3.2)	(1.9)	(0.1)	(0.3)				-	-		(3.3)		(2.2)
Restructuring costs	-	(0.6)	-	(1.2)				-	-		-		(1.8)
Fair value adjustment to contingent consideration on previous acquisitions	-	0.2	-	-				-	-		-		0.2
Transaction costs relating to acquisition of businesses	-	(0.2)	-	-				-	-		-		(0.2)
Operating profit	7.4	5.7	10.9	7.4				-	-		18.3		13.1
Net finance expense											(1.9)		(1.9)
Taxation											(2.9)		(3.1)
Profit for the period											13.5		8.1
Segment assets	128.0	116.1	96.4	94.5				3.1	0.4		227.5		211.0
Unallocated assets
Cash and cash equivalents								18.7	20.9		18.7		20.9
Current tax assets								0.9	1.0		0.9		1.0
Deferred tax assets								24.9	17.8		24.9		17.8
Total assets											272.0		250.7
Segment liabilities	31.6	29.6	31.6	27.5				4.2	8.3		67.4		65.4
Unallocated liabilities
Interest-bearing loans and borrowings								71.3	93.7		71.3		93.7
Current tax liabilities								10.7	7.7		10.7		7.7
Deferred tax liabilities								2.3	2.4		2.3		2.4
Total liabilities											151.7		169.2
(1) Inter-segment pricing is determined on an arm's length basis.

Geographical segments
For the half year ended 30 June 2017
			Half year to 30 June					Half year to 30 June			Year to 31 December
			2017					2016			2016
			£m					£m			£m
Continuing operations - analysis of revenue from external customers, by location of customer
United Kingdom			19.0					16.1			34.8
The rest of Europe			39.9					33.8			75.4
North America			64.3					58.3			129.6
Asia Pacific			35.8					30.9			69.0
The rest of the World			5.9					4.9			10.1
Total revenue from external customers			164.9					144.0			318.9
The Group's operating segments are located in several geographical locations, and sell products and services on to external customers in all parts of the world.
3 Charges associated with acquisition of businesses, impairment of goodwill and restructuring costs
Charges associated with acquisition of businesses, impairment of goodwill and restructuring costs are excluded from key performance measures in order to more accurately show the underlying current business performance of the Group in a consistent manner. This also reflects how the business is managed and measured on a day-to-day basis. Restructuring costs include employment termination and other site rationalisation costs. Charges associated with acquisition of businesses include non-cash charges such as amortisation of acquired intangible assets and cash charges such as transaction costs and earnout payments.
			Half year to 30 June					Half year to 30 June			Year to 31 December
			2017					2016			2016
			£m					£m			£m
Analysis of operating expenses
Earnout payments and purchase price adjustment			-					0.2			(1.2)
Transaction costs relating to acquisition of businesses			-					(0.2)			(0.6)
Amortisation of acquired intangible assets			(3.3)					(2.2)			(5.8)
Charges associated with acquisition of businesses			(3.3)					(2.2)			(7.6)
Restructuring costs (1)			-					(1.8)			(2.9)
Other administrative expenses			(20.4)					(17.2)			(38.7)
Administrative expenses			(23.7)					(21.2)			(49.2)
Marketing, selling and distribution costs			(24.4)					(20.7)			(42.6)
Research, development and engineering costs			(7.3)					(6.1)			(13.2)
Total from continuing operations			(55.4)					(48.0)			(105.0)
Amortisation of acquired intangible assets			(1.2)					(0.5)			(2.1)
Impairment of goodwill			-					-			(12.1)
Restructuring costs			-					(0.3)			(1.8)
Other administrative expenses			(3.3)					(3.6)			(8.1)
Administrative expenses			(4.5)					(4.4)			(24.1)
Marketing, selling and distribution costs			(2.3)					(2.2)			(4.5)
Total from discontinued operations			(6.8)					(6.6)			(28.6)
(1) Of the total £3.4 million restructuring costs from continuing operations in the year to 31 December 2016, £2.9 million is in operating expenses and the remaining £0.5 million is included in cost of sales.
4 Net finance expense
				Half year to 30 June				Half year to 30 June			Year to 31 December
				2017				2016			2016
				£m				£m			£m
Finance income
Net currency translation gains				-				0.3			0.4
Finance expense
Net currency translation losses				(0.2)				-			-
Interest payable on interest-bearing loans and borrowings					(1.6)			(2.1)			(4.2)
Net interest expense on net defined benefit pension scheme liabilities						(0.1)		(0.1)			(0.2)
						(1.9)		(2.2)			(4.4)
Net finance expense						(1.9)		(1.9)			(4.0)
5 Earnings per share
Earnings per share ("EPS") is the amount of post-tax profit attributable to each share.
Basic EPS is calculated on the profit for the period divided by the weighted average number of ordinary shares in issue during the period.
Diluted EPS is calculated on the profit for the period divided by the weighted average number of ordinary shares in issue during the period, but adjusted for the effects of dilutive share options.
The Adjusted EPS measure is used by management to assess the underlying performance of the ongoing businesses, and therefore excludes restructuring costs, charges associated with acquisition of businesses, impairment of goodwill, and profit on disposal of business, all net of tax.
The calculation of basic, diluted and adjusted EPS is set out below:
									Half year to 30 June 2017			Half year to 30 June 2016
									£m			£m
Profit/(loss) for the financial period Continuing operations									13.5			8.1
Discontinued operations									0.8			(0.5)
									14.3			7.6
Add back charges associated with acquisition of businesses, impairment of goodwill, restructuring costs and profit on disposal of business, net of tax
Continuing operations									1.8			2.5
Discontinued operations									(1.9)			0.8
									(0.1)			3.3
Earnings before charges associated with acquisition of business, impairment of goodwill, restructuring costs and profit on disposal of business
Continuing operations									15.3			10.6
Discontinued operations									(1.1)			0.3
Earnings before charges associated with acquisition of businesses, impairment of goodwill, restructuring costs and profit on disposal of business									14.2			10.9
	Half year to 30 June			Half year to 30 June						Half year to 30 June
	2017	2016		2017			2016			2017			2016
	No.	No.		pence			pence			pence			pence
	Weighted average number of shares '000			Adjusted earnings per share						Earnings per share
From continuing and discontinued operations
Basic	44,741	44,511		31.7			24.6			32.0			17.1
Dilutive potential ordinary shares	371	80		(0.3)			(0.1)			(0.3)			(0.1)
Diluted	45,112	44,591		31.4			24.5			31.7			17.0
From continuing operations
Basic	44,741	44,511		34.2			23.9			30.3			18.2
Dilutive potential ordinary shares	371	80		(0.3)			(0.1)			(0.3)			(0.1)
Diluted	45,112	44,591		33.9			23.8			30.0			18.1
From discontinued operations
Basic	44,741	44,511		(2.5)			0.7			1.7			(1.1)
Dilutive potential ordinary shares	371	80		-			-			-			-
Diluted	45,112	44,591		(2.5)			0.7			1.7			(1.1)

6 Interim dividend

After the balance sheet date, an interim dividend of 10.4 pence per share has been declared by the Directors, totalling £4.7 million (2016: 9.9 pence per share totalling £4.4 million). The dividend has not been provided for at half year and there are no tax consequences.

The dividend will be paid on Friday 20 October 2017 to shareholders on the register at the close of business on Friday 22 September 2017. The Company has a Dividend Reinvestment Plan that allows shareholders to reinvest dividends to purchase additional shares in the Company. For shareholders to apply the proceeds of this and future dividends to the plan, application forms must be received by the Company's Registrars by no later than Monday 25 September 2017. Existing participants in the Plan will automatically have the interim dividend reinvested. Details on the Plan can be obtained from Capita Asset Services on 0371 664 0381 or at www.signalshares.com. Calls are charged at the standard geographic rate and will vary by provider. If you are outside the United Kingdom, please call [phone]. Calls outside the United Kingdom will be charged at the applicable international rate. The lines are open from 9.00am to 5.30pm, Monday to Friday excluding public holidays in England and Wales.

7 Taxation
Income tax expense is recognised at an amount determined by multiplying the profit before tax for the interim reporting period by management's best estimate of the weighted-average annual income tax rate for the full financial year, adjusted for the tax effect of certain items recognised in full in the interim period.  As such, the effective tax rate in the interim financial statements may differ from management's estimate of the effective tax rate for the annual financial statements.
	Half year to 30 June		Half year to 30 June	Year to 31 December
	2017		2016	2016
	£m		£m	£m
The total taxation charge in the Income Statement is analysed as follows:
Summarised in the Income Statement as follows
Continuing operations
Current tax		(3.8)	(3.3)	(8.4)
Deferred tax		0.9	0.2	6.9
		(2.9)	(3.1)	(1.5)
Discontinued operations
Current tax		(0.4)	-	-
Deferred tax		(0.4)	-	-
		(0.8)	-	-
Continuing and discontinued operations
Current tax		(4.2)	(3.3)	(8.4)
Deferred tax		0.5	0.2	6.9
		(3.7)	(3.1)	(1.5)
Before charges associated with acquisition of businesses, impairment of goodwill, restructuring costs and profit on disposal of business Continuing operations
Current tax		(3.8)	(4.4)	(13.3)
Deferred tax		(0.6)	(0.2)	3.1
		(4.4)	(4.6)	(10.2)
Discontinued operations
Current tax		-	-	-
Deferred tax		(0.7)	-	-
		(0.7)	-	-
Continuing and discontinued operations
Current tax		(3.8)	(4.4)	(13.3)
Deferred tax		(1.3)	(0.2)	3.1
		(5.1)	(4.6)	(10.2)
Charges associated with acquisition of businesses, impairment of goodwill, restructuring costs and profit on disposal of business
Continuing operations
Current tax		-	1.1	4.9
Deferred tax		1.5	0.4	3.8
		1.5	1.5	8.7
Discontinued operations
Current tax		(0.4)	-	-
Deferred tax		0.3	-	-
		(0.1)	-	-
Continuing and discontinued operations
Current tax		(0.4)	1.1	4.9
Deferred tax		1.8	0.4	3.8
		1.4	1.5	8.7

8 Disposals, discontinued operations and non-current assets classified as held for sale Disposals
On 9 May 2017 the Group sold Haigh-Farr, Inc. ("Haigh-Farr"), a defence antennas business based in the US and included in the Broadcast Division, for an initial cash consideration of $15.8 million (£12.2 million), of which $0.8 million (£0.6 million) is deferred for twelve months from disposal date. A profit of £3.2 million arose on disposal after taking into account £0.5 million costs of disposal, net assets disposed (£17.3 million including £2.3 million of plant and equipment) and the previously recorded foreign exchange gain of £8.8 million that has been recycled to the Income Statement. The disposal enables management to place greater focus on opportunities in its core activities in the Broadcast and Photographic Divisions.
Discontinued operations In accordance with IFRS 5 "Non-current assets held for sale and discontinued operations", the assets and liabilities of the US broadcast services business which is part of the Broadcast Division, have been classified as a disposal group held for sale within the period. The business was disposed of on 1 August 2017 (see note 11).
Discontinued operations are businesses that have been sold, or which are held for sale. Both the US broadcast services business and Haigh-Farr have been classified as discontinued operations in the current period. The table below shows the results of the discontinued operations which are included in the Group Income Statement, Group Statement of Cash Flows and Group Balance Sheet respectively.
a)  Income Statement - discontinued operations		Half year to 30 June 2017 £m		Half year to 30 June 2016 £m		Year to 31 December 2016 £m
Revenue		22.7		27.1		57.3
Expenses		(24.3)		(27.6)		(73.2)
Operating loss		(1.6)		(0.5)		(15.9)
Comprising -  Operating (loss)/profit before amortisation of acquired intangible assets, impairment of goodwill and restructuring costs		(0.4)		0.3		0.1
-  Amortisation of acquired intangible assets		(1.2)		(0.5)		(2.1)
-  Impairment of goodwill		-		-		(12.1)
-  Restructuring costs		-		(0.3)		(1.8)
		(1.6)		(0.5)		(15.9)
Taxation		(0.7)		-		-
Loss after tax from discontinued operations		(2.3)		(0.5)		(15.9)
Gain on disposal of discontinued operation before tax		3.2		-		-
Taxation		(0.1)		-		-
Gain on disposal of discontinued operation after tax		3.1		-		-
Profit/(loss) after tax from discontinued operations attributable to owners of parent		0.8		(0.5)		(15.9)
b)  Statement of Cash Flows - discontinued operations		Half year to 30 June 2017		Half year to 30 June 2016		Year to 31 December 2016
		£m		£m		£m
Net cash from operating activities		2.8		11.3		8.6
Net cash from/(used in) investing activities(1)		12.1		(3.9)		(3.5)
Net cash from discontinued operations		14.9		7.4		5.1
(1) Half year to 30 June 2017 includes net proceeds of £11.1 million from the disposal of Haigh-Farr
c) Effect of disposal on the Group Balance Sheet					30 June 2017
					£m
Assets of the disposal group classified as held for sale
Property, plant and equipment					16.7
Inventories					0.1
Trade and other receivables					5.8
					22.6
Liabilities of the disposal group classified as held for sale
Trade and other payables					4.3

9 Analysis of net debt
The table below analyses the Group's components of net debt and their movements in the period:
	Half year to 30 June 2017	Half year to 30 June 2016	Year to 31 December 2016
	£m	£m	£m
Increase/(decrease) in cash and cash equivalents	1.7	4.9	(0.8)
Repayment of interest-bearing loans and borrowings	18.1	5.0	13.6
Decrease in net debt resulting from cash flows	19.8	9.9	12.8
Effect of exchange rate fluctuations on cash held	0.2	3.5	5.1
Effect of exchange rate fluctuations on debt held	2.5	(9.9)	(16.7)
Effect of exchange rate fluctuations on net debt	2.7	(6.4)	(11.6)
Movements in net debt in the period	22.5	3.5	1.2
Net debt at 1 January	(75.1)	(76.3)	(76.3)
Net debt at the end of the period	(52.6)	(72.8)	(75.1)
Cash and cash equivalents in the Balance Sheet	18.7	20.9	17.1
Bank overdrafts	-	-	(0.3)
Cash and cash equivalents in the Statement of Cash Flows	18.7	20.9	16.8
Interest-bearing loans and borrowings	(71.3)	(93.7)	(91.9)
Net debt at the end of the period	(52.6)	(72.8)	(75.1)
The Group repaid its Private Placement shelf facility of US$50 million when it expired in May 2017

10 Forward exchange contracts
The fair value of forward exchange contracts is determined by estimating the market value of that contract at the reporting date. Derivatives with a positive fair value are recorded as assets and negative fair values as liabilities, and presented as current or non-current based on their contracted maturity dates.
The following table shows the forward exchange contracts in place at the Balance Sheet date. These contracts mature in the next 24 months, therefore the cash flows and resulting effect on profit and loss are expected to occur within the next 24 months.
			As at 30 June 2017	Average exchange rate of contracts		As at 30 June 2016		Average exchange rate of contracts
	currency		millions			millions
Cash flow hedging contracts
USD / GBP forward exchange contracts	USD		14.4	1.32		14.3		1.52
USD / EUR forward exchange contracts	USD		35.9	1.13		43.3		1.15
EUR / GBP forward exchange contracts	EUR		20.7	1.20		28.2		1.31
JPY / GBP forward exchange contracts	JPY		586.6	150.2		1,061.5		169.2
JPY / EUR forward exchange contracts	JPY		1,071.5	122.3		1,266.7		129.4
A net loss of £2.2 million relating to forward exchange contracts was reclassified to the Income Statement, to match the crystallisation of the hedged forecast cash flows which affect the Income Statement.

Fair value hierarchy

The table below shows the carrying values and fair values of financial assets and liabilities:

	Carrying value 30 June	Fair value 30 June	Carrying value 30 June	Fair value 30 June
	2017	2017	2016	2016
	£m	£m	£m	£m
Forward exchange contracts - Assets	1.2	1.2	-	-
Forward exchange contracts - Liabilities	(1.7)	(1.7)	(6.7)	(6.7)
Cash at bank and in hand	18.7	18.7	20.9	20.9
Net trade receivables	41.8	41.8	44.1	44.1
Trade payables	(28.4)	(28.4)	(29.4)	(29.4)
Fixed rate borrowings	(2.3)	(2.3)	(38.7)	(39.4)
Floating rate borrowings	(69.0)	(69.0)	(55.0)	(55.0)
	(39.7)	(39.7)	(64.8)	(65.5)
The fair value of floating rate borrowings approximates to the carrying value because interest rates are at floating rates where payments are reset to market rates at intervals of less than one year.
The fair value of fixed rate borrowings is estimated by discounting the future contracted cash flow, using appropriate yield curves, to the net present values.
All financial instruments are deemed Level 2.

11 Post balance sheet events
On 1 August 2017 the Group sold its US broadcast services business which was included in the Broadcast Division, for a gross cash consideration of $35.0 million (£26.5 million). Net cash proceeds were $32.0 million (£24.2 million) and estimated net assets at completion were $25.0 million (£18.9 million). The previously recorded foreign exchange gain to be recycled to the Income Statement and the resulting profit on disposal have not yet been calculated. The disposal enables management to place greater focus on opportunities in its core activities in the Broadcast and Photographic Divisions.

 

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