Vitec (VTC) swung to an adjusted pre-tax loss of £4.4m in the first half, as demand for video and broadcast equipment was pummeled by the suspension of television productions and the cancellation of sports events.
Imaging solutions, its largest division, sunk to an operating loss of £1.2m, compared with a £13.4m profit in the same period last year. Management has been redirecting the segment towards its higher-margin e-commerce channel, which chief executive Stephen Bird estimates made up around 70 to 80 per cent of US sales in the period, compared with around 60 per cent before the outbreak of the pandemic.
Vitec had been affected early on in the year by the impact of coronavirus, with half of group revenue derived from products either sourced from China or made in Italy. Small wonder then that management has already identified £13m-worth of cost savings in the first half. It expects savings in the remainder of the year to be lower, as the group weans itself off government support and ups expenses at its creative solutions to bolster sales.
Broker Peel Hunt forecasts adjusted pre-tax profits of £3.6m and EPS of 5.9p in the full year for 2020, rising to £30.5m and 50.3p in 2021.
| VITEC (VTC) | ||||
| ORD PRICE: | 638p | MARKET VALUE: | £291m | |
| TOUCH: | 620-638p | 12-MONTH HIGH: | 1,305p | LOW: 524p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 338p* | NET DEBT: | 70% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2019 | 184 | 16.6 | 27.0 | 12.3 |
| 2020 | 119 | -13.8 | -20.9 | nil |
| % change | -35 | - | - | - |
| Ex-div: | na | |||
| Payment: | na | |||
| *Includes intangible assets of £133m or 292p a share | ||||
