Period end trading update

RNS Number : 1554Z

The Vitec Group PLC

16 July 2008

 



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. 

16 July 2008

The Vitec Group plc

Period end trading update

The Board of The Vitec Group plc ('Vitec') announces the following update on trading for the six months ended 30 June 2008. Its interim results will be announced on 27 August 2008.

Current trading

Sales in H1 2008 were approximately 24% higher than H1 2007. In constant currency, before acquisitions, Group sales were up around 5%. 

A robust first half trading performance is expected for the Group overall, despite adverse FX effects.

Divisional performance

In Imaging & Staging we saw H1 sales growth of approximately 10%, helped by the bringing in-house of the UK distribution and the progress of new products that have been recently brought to market. As expected, the weakening US dollar impacted margins. Approximately one third of the division's sales are to keen amateur photographers who buy digital-SLR cameras, a market that continues to grow (see note 5). Within Staging, there were no major projects in H1. New general managers have been appointed in both the US and European operations, we have announced the closure of the Tomcat (UK) facility, whose volume will transfer to other group plants, and we are in negotiations to take on a larger facility in Mexico.

In Broadcast Systems, H1 sales grew around 50%, with a strong performance from the Camera Dynamics business unit and from RF Systems. RF Systems is enjoying the benefits of market share growth and the volume flowing from the BAS relocation programme in the United States (which is scheduled to wind down towards the end of 2009). Of the two smaller units: Communications revenues continued to grow but, as expected, the Portable Power business is performing below last year. 

In H1 2007 we delivered a £0.6 million fibre project to the NFL and the start of this year saw the Writers' strike in Hollywood so, as anticipated, sales in Broadcast Services were below last year. Activity levels are presently ramping up ahead of the important H2 revenues from providing equipment and technical support for coverage of the Beijing Olympics.

As in prior years, we expect our interim debt figure to reflect the build up of finished goods stocks prior to the summer holiday period, and increased debtors due to higher sales. 

Outlook for 2008

Notwithstanding the present economic volatility, the Board's current view of the prospects for the full year remains unchanged. Overall the Board looks forward to continued progress in 2008.

Vitec continues to pursue acquisitions that complement its existing businesses and add further value for shareholders. 

Ends

Enquiries: 

The Vitec Group plc
Gareth Rhys Williams / Alastair Hewgill	Telephone: [phone]
Financial Dynamics
Richard Mountain / Sophie Kernon	Telephone: [phone]

Notes

1.    This statement is based on information sourced from management estimates.

2.    Whilst Vitec has significant production and sourcing in US dollars and has hedging  arrangements in place, movements in the $/£ and, particularly, $/€ rates can have a significant impact on reported results. After hedging, the Group expects to see an adverse effect of some £2.1 million on operating profit in 2008 compared to 2007 (compared to the guidance of £1.5 million adverse given in the IMS in May), if current exchange rates continue throughout 2008.

3.    Current market exchange rates: £1 = $2.01 £1 = €1.26, €1 = $1.60

4.    2007 average market exchange rates: £1 = $2.00, £1 = €1.47, €1 = $1.37

5.    The latest data from CIPA (the Camera & Imaging Products Association) up to the end of May shows shipments of Digital-SLR cameras grew by 23%, in line with the forecast growth of 22% for the whole of 2008.

6.    Statements made in this announcement that look forward in time or that express management's beliefs, expectations or estimates regarding future occurrences are 'forward-looking statements' within the meaning of the United States federal securities laws. These forward-looking statements reflect Vitec's current expectations concerning future events and actual results may differ materially from current expectations or historical results. 

7.  Vitec is an international Group, principally serving customers in the worldwide media sector with products and services for the broadcast, entertainment and photographic industries. Vitec is based on strong, well known, premium brands that professionals rely on. Vitec is organised in three divisions: Imaging & Staging, Broadcast Systems and Broadcast Services. More information can be found at: www.vitecgroup.com.

 

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