Investment accounts
Adult accounts
Child accounts
Choosing Fidelity
Choosing Fidelity
Why invest with us Current offers Fees and charges Open an account Transfer investments
Financial advice & support
Fidelity’s Services
Fidelity’s Services
Financial advice Retirement Wealth Management Investor Centre (London) Bereavement
Guidance and tools
Guidance and tools
Choosing investments Choosing accounts ISA calculator Retirement calculators
Share dealing
Choose your shares
Tools and information
Tools and information
Share prices and markets Chart and compare shares Stock market news Shareholder perks
Pensions & retirement
Pensions, tax & tools
Saving for retirement
Approaching / In retirement
Approaching / In retirement
Speak to a specialist Creating a retirement plan Taking tax-free cash Pension drawdown Annuities Investing in retirement Investment Pathways
Videndum revenue, earnings fall in challenging year for entertainment
(Sharecast News) - Content creation hardware and software company Videndum reported a challenging 2023 on Tuesday, impacted by writer and actor strikes in the US and a difficult macroeconomic environment, and destocking. The London-listed firm, formerly known as the Vitec Group, said those factors contributed to a 31% decrease in revenue from continuing operations compared to the prior year.
Its adjusted operating expenses were £21.2m lower than 2022, primarily due to self-help actions and synergies from site restructuring.
Adjusted operating profit still saw an 81% decline year-on-year, reflecting a 39% drop in revenue, although the company maintained an 84% cash conversion rate from continuing operations.
To address the challenges, Videndum raised £125m in equity to deleverage and support its strategic initiatives, as it maintained leverage within lending covenant limits.
While industry confidence in the post-strike recovery remained strong, the anticipated pickup in the cinema and scripted television market did not materialise as expected.
Videndum's management said it believed the rate of decline was improving, with destocking largely completed.
The broadcast TV segment performed well, supported by market-leading robotics, AI autonomous presenter-tracking software, and speech recognition prompting technology.
However, trading in the first quarter of 2024 fell below expectations due to the slower-than-anticipated recovery in the cinema and scripted TV market.
As of 31 March, net debt had decreased to £122.4m, £6.1 million lower than the prior year.
Leverage stood at 3.0x, within lending covenant limits, as the company aimed to reduce leverage to its targeted range of below 1.5x.
Looking ahead, the board said it remained confident in a strong recovery in the second half of 2024 as the cinema and scripted TV market gradually recovered, although the pace and shape of the post-strike recovery remained uncertain.
"2023 was an exceptionally challenging year for Videndum and, in particular, the unprecedented length of the strikes by US writers and actors significantly impacted our financial performance," said group chief executive officer Stephen Bird.
"We acted quickly to reduce costs and manage cash, and, with the support of our shareholders, deleveraged through a capital raise, which has enabled us to preserve the long-term capabilities of the business.
"Although industry confidence in the post-strike recovery is strong, the cine and scripted television market is taking more time than anticipated to recover."
Bird added that the macroeconomic environment remained "challenging", leading the company to maintain a focus on managing costs and controlling capex and working capital.
"I am proud of the way our people have responded to an incredibly difficult market environment and am confident in the ability of the team to deliver a strong recovery over the next few years.
"We remain confident that the Group will benefit from a strong recovery in 2024, however, with an increased second half weighting as the cine and scripted TV market gradually recovers.
"Videndum is well positioned in a content creation market which has attractive structural growth drivers and good medium-term prospects."
At 0828 BST, shares in Videndum were down 3.52% at 274p.
Reporting by Josh White for Sharecast.com.
Share this article
Related Sharecast Articles
Important information: This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice. When you are thinking about investing in shares, it’s generally a good idea to consider holding them alongside other investments in a diversified portfolio of assets. Past performance is not a reliable indicator of future returns.
Award-winning online share dealing
Search, compare and select from thousands of shares.
Expert insights into investing your money
Our team of experts explore the world of share dealing.
Policies and important information
Accessibility | Conflicts of interest statement | Consumer Duty Target Market | Consumer Duty Value Assessment Statement | Cookie policy | Diversity and Inclusion | Doing Business with Fidelity | Fidelity gender pay report | Investing in Fidelity funds | Legal information | Modern slavery | Mutual respect policy | Privacy statement | Remuneration policy | Security | Statutory and Regulatory disclosures | Whistleblowing policy
Please remember that past performance is not necessarily a guide to future performance, the performance of investments is not guaranteed, and the value of your investments can go down as well as up, so you may get back less than you invest. When investments have particular tax features, these will depend on your personal circumstances and tax rules may change in the future. This website does not contain any personal recommendations for a particular course of action, service or product. You should regularly review your investment objectives and choices and, if you are unsure whether an investment is suitable for you, you should contact an authorised financial adviser. Before opening an account, please read the ‘Doing Business with Fidelity’ document which incorporates our client terms. Prior to investing into a fund, please read the relevant key information document which contains important information about the fund.
This website is issued by Financial Administration Services Limited, which is authorised and regulated by the Financial Conduct Authority (FCA) (FCA Register number 122169) and registered in England and Wales under company number 1629709 whose registered address is Beech Gate, Millfield Lane, Lower Kingswood, Tadworth, Surrey, KT20 6RP.