REG - Videndum PLC - Update Announcement

VidendumAnnouncement

02/05/2023 15:15

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RNS Number : 1596Y  Videndum PLC  02 May 2023

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2 May 2023

Videndum plc

Update Announcement

The Board of Videndum plc ("the Company" or "the Group"), the international
provider of premium branded hardware products and software solutions to the
content creation market, believes it is appropriate to provide an update
regarding the potential impact of a US writers' strike, combined with the
current macroeconomic conditions, on the Group's FY 2023 performance.

The Writers' Guild of America ("WGA"), which combines two different US labour
unions representing TV and film writers in New York and Los Angeles has called
a strike today, Tuesday 2 May 2023 (at 8:00am UK time). Over recent weeks,
speculation about a potential strike by the WGA has caused some US
cine/scripted TV productions to be paused, affecting short-term demand for our
high-end cine and scripted TV products in the US (c.20% of Group revenue). We
had expected this revenue to bounce back in a no-strike scenario.

It is difficult to forecast the possible length and impact of the strike¹,
but it will potentially cause further deferral of revenues in our high-end
cine and scripted TV products in the US, which we currently expect to partly
return later this year. However, as a result, there is likely to be a further
increase in the H2 weighting to the Group's FY 2023 performance. This is also
leading to a wider range of possible outcomes for FY 2023 than previously
expected. If there is a prolonged writers' strike, the Board believes that the
Group's FY 2023 performance will be below our previous expectations.

As expected, looking forward, the macroeconomic environment remains
challenging, particularly with low business confidence in the US; we are not
yet seeing a recovery in the consumer environment, improvement in the
Independent Content Creator segment, nor any significant retail restocking.

The Group is, however, performing well in some regions and segments. For
example:

 ·             Media Solutions, as expected, has seen a post-lockdown bounce back in China,
               Japan is performing well, Europe is starting to return to growth, and Amazon
               in the US is up c.4% on 2022 year-to-date. In addition, lighting supports
               continue to perform well, and Audix is ahead of expectations; our new
               podcasting microphone, as an example, was extremely well received at the
               National Association of Music Merchants ("NAMM") annual event in California in
               April.
 ·             In Production Solutions, the Broadcast TV Studio segment is performing well,
               with customers having allocated budgets for automation. Our new robotics
               control platform, with AI autonomous, dynamic, full body tracking technology,
               is the most advanced solution on the market and was exceptionally well
               received at the National Association of Broadcasters ("NAB") annual convention
               in Las Vegas in April. Our virtual and extended reality ("XR") image-based
               lighting solutions for both the cine and broadcast segments, and our new range
               of sustainable power solutions based on sodium technology, which will
               revolutionise the use of power in cine and broadcast productions, also
               generated great interest.
 ·             In Creative Solutions, as expected, the medical segment continues to perform
               strongly and our new Teradek Prism and zero delay Ranger solutions for
               broadcast and live productions were also very well received at NAB. We remain
               positive about the prospects for ART ("Adaptive Reliable Transport"),
               particularly in broadcast and live sports.

 

As previously announced, we have successfully implemented self-help actions
across the Group, including a number of sizeable changes in Media Solutions.
We continue to look at initiatives to further streamline our cost base to
ensure that the business is even better positioned for long-term growth.

The Board continues to review options to unlock more shareholder value for our
Creative Solutions Division and all options remain on the table. Within this
context, the Lightstream business is performing below expectations and is
lossmaking. Although we have extracted some synergistic technology benefits,
we expect to take an impairment to the $24.0 million carrying value of its
intangible assets.

An increased H2 weighting will slightly increase our covenant net debt to
EBITDA ratio at 30 June 2023 from our previous expectations. We are
implementing a wide range of actions to conserve cash and reduce our debt. We
continue to manage inventory closely, along with the rest of working capital,
and to carefully control costs.

Commenting, Stephen Bird, Group Chief Executive, said:

"As a result of the current macroeconomic headwinds, compounded by a US
writers' strike, there is likely to be an increase in the H2 weighting to the
Group's FY 2023 performance. This is also leading to a wider range of possible
outcomes for FY 2023 than previously expected. If there is a prolonged
writers' strike, the Board believes that the Group's FY 2023 performance will
be below our previous expectations.

"The long-term drivers of the business, however, remain attractive and we
continue to execute self-help actions to streamline our cost base, to ensure
the business is even better positioned. NAB was the largest global broadcast
convention held in the last four years and we are extremely pleased with the
response to our new product launches, which will drive growth. Products we
have launched within the last three years are likely to account for about half
of current year revenue.

"The content creation market continues to have strong prospects and Videndum
is well positioned to drive long-term growth."

 

The Group is scheduled to release its H1 2023 results on Thursday 10 August
2023.

 

 For more information please contact:
 Videndum plc                                     Telephone: 020 8332 4602
 Stephen Bird, Group Chief Executive
 Andrea Rigamonti, Group Chief Financial Officer
 Jennifer Shaw, Group Communications Director

 

Notes to Editors:

Videndum is a leading global provider of premium branded hardware products and
software solutions to the growing content creation market. We are organised in
three Divisions: Videndum Media Solutions, Videndum Production Solutions and
Videndum Creative Solutions.

Videndum's customers include broadcasters, film studios, production and rental
companies, photographers, independent content creators, gamers, professional
musicians and enterprises. Our product portfolio includes camera supports,
video transmission systems and monitors, live streaming solutions, smartphone
accessories, robotic camera systems, prompters, LED lighting, mobile power,
bags, backgrounds, motion control, audio capture, and noise reduction
equipment.

We employ around 1,800 people across the world in 11 different countries.
Videndum plc is listed on the London Stock Exchange, ticker: VID.

More information can be found at: https://videndum.com/
(https://videndum.com/)

LEI number: 2138007H5DQ4X8YOCF14

Notes

 1  A US writers' strike last happened in 2007 and lasted for 100 days from 5
    November 2007.
 2  Exchange rate: £1 = $1.25.
 3  Current company compiled consensus for FY2023: adjusted profit before tax
    ranges £53.1 million to £55.3 million.
 4  This announcement contains inside information. The person responsible for
    arranging the release of this announcement on behalf of Videndum plc is Jon
    Bolton, Group Company Secretary.
 5  This report contains certain forward-looking statements with respect to the
    financial condition, results of operations, and businesses of Videndum plc.
    These statements and forecasts involve risk, uncertainty and assumptions
    because they relate to events and depend upon circumstances that will occur in
    the future. There are a number of factors that could cause actual results or
    developments to differ materially from those expressed or implied by these
    forward-looking statements. These forward-looking statements are made only as
    at the date of this announcement. Nothing in this announcement should be
    construed as a profit forecast. Except as required by law, Videndum plc has no
    obligation to update the forward-looking statements or to correct any
    inaccuracies therein.

 

 

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