Brisk demand for high-tech camera equipment, coupled with restructuring gains, drove constant-currency sales up 3 per cent at Vitec (VTC) in the reported period. But reshaping the business has led to higher short-term costs, pushing underlying operating profit down 5 per cent to £17.4m.
Constant-currency sales climbed 4 per cent in the key broadcast business, which provides camera equipment to television broadcasters and film crews. Customers snapped up more advanced products such as wireless transmitters and portable power systems, and management inked a contract with the NFL to upgrade the communications infrastructure across its US football stadiums. But mixed trading in Europe, flagging sales of large camera supports and a tough comparative period for the Haigh-Farr antennas business meant operating profit there fell 12 per cent.
Underlying sales and operating profit both rose in the photography segment, which makes and sells camera accessories such as tripods and camera bags. New products such as TwistGrip - which connects any smartphone to any camera support - proved popular, and management is working with Apple to widen its offering in the tech giant's stores. Meanwhile, its £0.9m purchase of Dutch partner Provak has strengthened its distribution network.
Vitec's bosses anticipate a second-half boost from the Olympics in Brazil. Broker Investec expects adjusted pre-tax profit of £35.2m this calendar year, giving EPS of 55.3p (from £31.5m and 49.2p in 2015).
| VITEC (VTC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 564p | MARKET VALUE: | £251m | |
| TOUCH: | 555-564p | 12-MONTH HIGH: | 670p | LOW: 485p |
| DIVIDEND YIELD: | 4.4% | PE RATIO: | 21 | |
| NET ASSET VALUE: | 302p* | NET DEBT: | 54% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 156 | 12.0 | 18.9 | 9.5 |
| 2016 | 171 | 10.7 | 17.1 | 9.9 |
| % change | +10 | -11 | -10 | +4 |
Ex-div: 22 Sep Payment: 21 Oct *Includes intangible assets of £96.9m, or 218p a share | ||||
