Vitec (VTC) – a provider of equipment and services to broadcast and photographic markets – enjoyed a strong first half, comprising a record performance for both pre-tax profits and EPS. This was despite adverse currency movements, laid bare in a 4.8 percentage point separation between reported and adjusted revenues, not to mention the temporary closure of its North Carolina-based SmallHD business, after damage from a fire next door.
This fire meant that revenues for the overarching creative solutions division fell 10.1 per cent to £27.7m. Prior to the incident, SmallHD’s underlying sales had been growing at around 70 per cent each year, supporting growth of around 9 per cent for the total segment. Vitec reckons insurance cover should offset any fire-related losses.
The imaging solutions division – which manufactures and distributes the likes of camera and lighting supports, and LED lights – was the star performer. Revenues grew 25.6 per cent to £98.5m, buoyed by the “transformational” purchase of JOBY and Lowepro last September, which contributed a whopping £21.5m. True, organic, constant-currency sales here were essentially flat. Retailers overstocked at Christmas, causing slower first-quarter growth. But the pace picked up in the second quarter. Meanwhile, sales for production solutions rose 2.5 per cent to £57.1m, while adjusted operating profits here soared 50 per cent to £9.9m, helped by the 2018 Winter Olympics.
Broker Peel Hunt expects adjusted pre-tax profits of £49m and EPS of 81.4p in 2018 (2017: £42.4 and 70p).
| VITEC (VTC) | ||||
| ORD PRICE: | 1,265p | MARKET VALUE: | £569m | |
| TOUCH: | 1,262-1,265p | 12-MONTH HIGH: | 1,420p | LOW: 930p |
| DIVIDEND YIELD: | 2.5% | PE RATIO: | 40 | |
| NET ASSET VALUE: | 325p* | NET DEBT: | 29% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017 | 165 | 16.4 | 30.3 | 10.4 |
| 2018 | 183 | 19.7 | 38.2 | 11.5 |
| % change | +11 | +20 | +26 | +11 |
| Ex-div: | 20 Sep | |||
| Payment: | 19 Oct | |||
| *Includes intangible assets of £88.3m or 196p a share | ||||
