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Source: metamorworks, Shutterstock
Summary
- The Vitec Group PLC had experienced a revenue drop of around 23% during FY20.
- VTC would acquire Lightstream and Quasar for around £30.4 million.
- VTC would pay a final dividend of 4.5 pence per share on 14 May 2021.
- The adjusted operating margin had dropped to 3.4% during FY20.
The Vitec Group PLC (LON:VTC) is the LSE listed industrial stock. VTC’s shares have generated a return of approximately 59.34% in the last 12 months. It is listed on the FTSE All-Share Index.
On 06 May 2021, VTC will have its Annual General Meeting.
Business Model
The Vitec Group PLC is the FTSE All-Share index listed Company engaged in providing branded hardware products and software solutions to the content creation market worldwide. Moreover, the product portfolio includes –
- Camera supports
- Video transmission systems and monitors
- Live streaming solutions
- Smartphone accessories
- Robotic camera systems
- Prompters
- LED lighting
- Bags and motion control
- Audio capture
- Noise reduction equipment
(Source: Company presentation)
Q1 FY21 Trading & Acquisition Update (as of 12 April 2021)
- The Company would acquire Lightstream for the total consideration of USD 35.9 million (£26.0 million) in cash and shares deal. Moreover, this acquisition would enable VTC to enter the rapidly growing gaming market.
- VTC had also announced the acquisition of Quasar for total cash consideration of USD 6.1 million. This deal would further enhance the leadership position of the Company in the LED lighting market.
- The Company had shown good trading performance during Q1 FY21, illustrated by strong order intake and robust revenue, which is similar to Q1 FY19 levels.
- VTC had continue to generate high cash conversion during the period.
Financial Highlights (for 52 weeks ended 31 December 2020, as of 25 February 2021)
(Source: Company result)
- VTC had shown a revenue decline of 23% to £290.5 million during FY20. The decline witnessed during H2 FY20 was significantly better than H1 FY20.
- With regards to the profitability, the adjusted gross margin had dropped to 39.0%, while the adjusted operating margin fell to 3.4% during FY20.
- Meanwhile, the Company had managed to demonstrate robust cash performance as it resulted in the reduction of net debt down to £90.8 million during FY20.
- Based on its strong financial position, VTC would pay a final dividend of 4.5 pence per share on 14 May 2021. Moreover, the ex-dividend date will be 22 April 2021.
- The Company had witnessed revenue growth in several areas like smart phonography accessories and streaming products during FY20.
Share Price Performance Analysis of The Vitec Group PLC
(Source: EODHD/Others, Thomson Reuters)
VTC’s shares were trading at GBX 1,155.00 and were up by close to 0.87% as of 12 April 2021 at 02:20 PM GMT. VTC's 52-week Low and High were GBX 610.00 and GBX 1,225.00, respectively. The Vitec Group PLC had a market capitalization of around £526.74 million.
Business Outlook
The Company remained upbeat regarding a strong recovery during 2021. VTC had anticipated making a significant investment during FY21. VTC had announced two acquisitions aligning with the strategic priorities. Moreover, the Company had resumed the dividend payments and would target a future dividend cover of 2.0 to 2.5 times of underlying EPS with subject to strong financial position. However, the Company remained mindful regarding several headwinds such as the Covid-19 pandemic and foreign exchange fluctuations. Overall, the Company would achieve strong margin growth in FY21, and it would deliver accelerated growth for the long term.
