Vitec retains full-year guidance despite 2.2% drop in revenue

Vitec retains full-year guidance despite 2.2% drop in revenue

Image capture product manufacturer Vitec Group plc (LON: VTC) booked weak fundamentals during the first half ended 30 June 2019.

The Company’s revenue dipped 2.2% on a constant currency year-on-year basis, to £184.2 million. While adjusted operating profit rose 0.5% to £25.8 million; adjusted profit before tax dipped 4.0% to £23.5 million, statutory operating profit dropped 8.7% to £18.9 million and statutory profit before tax dived 15.7% to £16.6 million.

Vitec Group also presented a somewhat mixed set of results on its shareholder yields. Adjusted basic earnings rose 1.0% to 39.9p per share and the Group declared an interim dividend for the first half of 12.3p a share, up 7.0% on-year. Conversely, statutory basic EPS collapsed 29.3% to 27.0p.

The Company said the integration of Amimon is complete and the launch of wireless video products into the broadcast sports market is set for 2020. The Group also said it was on track to take advantage of the growing e-commerce channel, with a restructuring of its Imaging Solutions sector.

 Vitec Group comments

Commenting on the results, Stephen Bird, Group Chief Executive, said,

“I am pleased with Vitec’s half year performance, where we delivered results in line with expectations despite some challenges. The integration of Amimon is complete and I am excited about the opportunity to grow our wireless video capabilities, particularly in the broadcast sports market. Imaging Solutions continued to outperform a disrupted market through expanding into adjacent market segments, and is transitioning to an e-commerce business model to support future growth.”  

“Over the last three years, the Group has continued to make progress executing its strategy to drive organic growth, improve margins and make value adding acquisitions. Our resources and investment are prioritised on developing new products for our faster growing brands and market segments, and our cost base is tightly managed. We also continue to look for further opportunities to add to our product portfolio.”

“Vitec is in good shape and is increasingly exposed to more growth segments of the “image capture and content creation” market. We are pleased to confirm that our outlook for the current year is unchanged, whilst we remain mindful of geopolitical challenges and FX movements. Notwithstanding these uncertainties, we continue to expect a strong 2020, benefitting from the summer Olympics, US Presidential elections and the targeted growth initiatives already underway.”

Investor notes

Following the announcement, the Company’s share price dipped 3.59% or 40.00p to 1,075.00p a share 08/08/19 16:27 BST. Peel Hunt analysts reiterated their ‘Buy’ stance on Vitec stock. The Group’s p/e ratio stands at 11.96, their dividend yield is 3.39%.

Elsewhere in the tech sector, there were updates from; TT Electronics (LON: TTG), SDL plc (LON: SDL), Dialight Plc (LON: DIA), Seeing Machines (LON: SEE) and Bidstack Group PLC (AIM: BIDS).