Videndum (VID) H1 2024 earnings summary

Executive summary

• H1 2024 revenue was £153.3m, down 7% year-over-year but up 8% from H2 2023, reflecting partial recovery in cine/scripted TV and ongoing macroeconomic challenges in consumer and ICC segments.

• Adjusted operating profit reached £11.0m, a significant improvement from a £2.9m loss in H2 2023, but down from £16.2m in H1 2023, supported by cost controls.

• Net debt reduced to £117.3m at 30 June 2024 from £128.5m at year-end 2023, with strong cash conversion of 165% and leverage at 3.3x.

• Operating expenses remained flat over 18 months and are 17% lower than H1 2022, with R&D investment largely protected.

• Strategic cost-saving programme underway, targeting at least £10m in permanent savings for FY 2025.

Financial highlights

• Revenue: £153.3m (H1 2024), down 7% year-over-year, up 8% sequentially; 5% decline on a constant currency basis.

• Adjusted operating profit: £11.0m, up from a loss of £2.9m in H2 2023, but down from £16.2m in H1 2023.

• Gross margin: 40.7% (H1 2024), slightly lower than H1 2023.

• Free cash flow: £15.1m, a significant improvement from outflows in both halves of last year.

• EPS: 5.7p, lower due to reduced profitability and higher share count.

Outlook and guidance

• Full-year 2024 is expected to be below previous expectations due to delayed order recovery and ongoing customer cash constraints.

• Cine and scripted TV market anticipated to normalize in 2025; ICC segment expected to benefit from premium camera sales growth.

• Broadcast TV segment to benefit in H2 from Olympic Games and US Presidential election contracts.

• Strategic cost-saving programme to deliver at least £10m in permanent savings in FY 2025.