Videndum (VID) H2 2023 earnings summary

Executive summary

• FY 2023 was exceptionally challenging: continuing-operations revenue fell 31% YoY amid strikes, destocking and weak macroeconomic conditions.

• Adjusted operating profit fell 81% to £12.8m; cost reductions and an equity raise helped mitigate pressures and support liquidity.

• The Board expects a strong H2 2024 recovery as cine and scripted TV markets gradually improve, while noting recovery timing and pace remain uncertain.

Financial highlights

• Continuing-operations revenue was £306.9m versus £442.5m in FY 2022; gross profit was £118.8m versus £193.4m.

• Adjusted operating profit was £12.8m versus £66.2m; PBT was £1.3m versus £60.2m.

• EPS was 8.5p versus 96.8p; no dividend was declared for FY 2023.

• Adjusted operating expenses fell 17% to £106.0m, supported by self-help measures and site-rationalisation synergies.

• Adjusted free cash flow was an outflow of £23.8m versus an inflow of £40.3m in FY 2022.

Outlook and guidance

• Cine and scripted TV recovery, initially anticipated in March, is now expected from June; Q1 trading was below expectations as recovery was delayed.

• The Board expects a strong H2 2024 recovery, with Summer Olympics and US election activity supporting broadcast TV performance.

• At 31 March 2024, net debt was £122.4m and leverage 3.0x, within the 4.25x covenant limit; target leverage remains below 1.5x.

• Cost, capital expenditure and working capital controls remain priorities as trading conditions improve.