Chairman John McDonough reports on performance
Performance and dividend
The Group delivered a good underlying performance in 2015 with the overall results reflecting the non-repeat of the 2014 Sochi Winter Olympics and FIFA World Cup and a negative impact from foreign exchange. The higher technology broadcast businesses have continued to grow well, while the traditional broadcast and photographic businesses have faced challenging market conditions. The Group is investing in its higher technology products and driving new product launches while taking proactive actions to streamline certain activities with lower growth prospects. These self-help actions are progressing to plan and some further actions are being taken to drive profitable medium-term growth despite uncertain market conditions. The Board remains confident about the Company’s future and we recommend a final dividend of 15.1 pence per ordinary share (2014: 14.7 pence). The final dividend, subject to shareholder approval at the 2016 Annual General Meeting will be paid on Friday, 20 May 2016. This brings the total dividend for 2015 to 24.6 pence per share (2014: 24.0 pence).
Strategy and Board focus
The Board has continued to develop the Group’s strategy with its focus on our core Broadcast and Photographic markets particularly given the context of the fast pace of change in technology and market needs. In April 2015 we held an investor day for our major shareholders showcasing our key brands and growth strategy through: allocating resources to the fast growing independent content creator segment and a focus on content sharing opportunities; increasing resources, brand presence and sales in APAC; and continuing to make strategic acquisitions which make financial sense. Stephen Bird will give further explanation on progress against each of these in his report.
Governance and Board changes
The Board is responsible for setting the right tone from the
top and ensuring that a robust governance structure is in
place to enable the business to succeed and deliver long-term
sustainable growth. As part of this responsibility the Board
has continued in 2015 with its programme of visiting key
operations and meeting as many people as possible, with a
visit to Manfrotto in Italy that included a detailed update from
the senior Photographic Division management team on market
trends, product development, innovation and operations. This
has built on the Board’s visit in 2014 to the Company’s West
Coast Broadcast businesses in the US including Teradek and
Bexel. We will continue with this practice in 2016 by visiting
our operations and people on the East Coast in the US.
Each individual Board member is also encouraged to visit
our operations at their own convenience to further build
on their understanding of the business.
To enforce the importance of good governance and setting the
right standards throughout the Group, we have re-launched
our Code of Conduct to all employees setting out the
values and standards we expect in the conduct of business.
This covers issues such as health and safety, conduct of
employees, diversity, financial controls and business integrity,
and is available on our website. We also undertook a recommunication
of our whistleblowing service in 2015 to further
strengthen the importance of our governance processes.
In 2015 I have continued with my practice of meeting with
several of our major shareholders to discuss the Company’s
performance, strategic direction and governance
During 2015, Carolyn Fairbairn stood down as an independent
Non-Executive Director and Chairman of the Remuneration
Committee to take on a new role as Director-General of the
CBI. Carolyn had served on the Board since February 2012
and provided outstanding independent advice. This change
necessitated our search for a replacement and we have been
fortunate to secure the services of Caroline Thomson who was
appointed as an independent Non-Executive Director and
Chairman of the Remuneration Committee on 1 November
2015. Caroline brings excellent skills and experience to the
Board with her background working at the highest level in the
BBC. Caroline has undertaken a thorough induction to the
Group having already met with senior management and key
advisors and will be visiting our key operations during 2016.
As explained in my report in the 2014 Annual Report,
Christopher Humphrey succeeded Nigel Moore as Chairman
of the Audit Committee at the conclusion of the Company’s
AGM in May 2015. Christopher has successfully taken on this
Chairmanship and ensured that there has been no break in
continuity in this important role. Similarly, Mark Rollins at the
conclusion of the 2015 AGM succeeded Nigel Moore in the
role of Senior Independent Director and likewise has ensured
a seamless transition, including leading the evaluation of my
own performance as part of the 2015 Board evaluation.
The Board now comprises seven directors and following our
2015 Board evaluation we believe has the right balance of
skills and diversity to meet the challenges the Company faces.
The Board over the last couple of years has refreshed itself in
terms of the independence of its Non-Executive Directors and
continues to monitor its composition to ensure a structured
process of succession delivering the right skills, experience
and independence to support the successful execution of
the Company’s strategy.
Building on the externally facilitated Board evaluation in 2014
the Board set itself objectives for 2015, against which we have
tracked progress. We have also carried out an internal Board
evaluation in 2015 reviewing progress of the Board against
these objectives and the Board’s overall performance against
the agreed strategy, financial performance, governance,
succession and Board dynamic. The detail of the 2015
objectives and the Board evaluation is set out in the
Corporate Governance section of this Annual Report.
The Board was sad to hear about the death of Bill Vinten
in late 2015. Bill Vinten was a key founding figure in the
Company’s business being instrumental in establishing the
Vinten product name and our Broadcast supports business
based in Bury St Edmunds. The Vinten name is synonymous
in the broadcast market with quality products and Bill Vinten’s
legacy is reflected in the quality of products produced and
sold bearing the Vinten name.
Annual General Meeting
Our AGM will be on 18 May 2016 and the Notice of Meeting
and explanatory notes accompany this Annual Report and can
be found on our website. All resolutions will be conducted on a
poll as in previous years. The Board believe that this is more
democratic enabling the views of a wider number of
shareholders to be taken into account by way of proxies being
voted. All members of the Board plan to attend the AGM and
look forward to the opportunity to meet with shareholders. The
detail of the AGM resolutions is set out in the AGM Notice
accompanying this Annual Report.
2015 has been a challenging year for Vitec with uncertain end
markets and the need to restructure operations to achieve a
good performance. This has been achieved through the
dedication, passion and hard work of all our people. On behalf
of the Board I would like to thank all of our people for their
contribution in 2015.
John McDonough CBE