Products and systems primarily for broadcast applications
Design and manufacture of high quality equipment used principally by broadcast and live entertainment professionals. Focused on studio and outside broadcast and film production markets with applications in the air traffic control and government markets.
Divisional Report
Taken from the Annual Report 2007
Overview
The Broadcast Systems division provides equipment principally for professionals engaged in producing live events or video content, frequently for subsequent broadcast. The business units, Camera Dynamics, Communications, Mobile Power, and now RF Systems, sell their products worldwide, either direct to the end-customer or through a network of professional dealers. The division’s brands are frequently the acknowledged leaders in their fields.
Strategy
The market for broadcast equipment is benefiting from the trend to make programmes in ‘High Definition’ (HD). This involves upgrading cameras and associated ancillary equipment, much of which is provided by Vitec Group companies. We have responded to the changed needs of the marketplace by managing our brands within single business units, enabling us to achieve economies of scale in manufacturing and distribution and to develop exciting new product ranges.
2007 performance
2007 revenue increased by 29% to £129.8 million (2006: £100.5 million), with a significant improvement in operating profit – a rise of 93% to £13.3 million (2006: £6.9 million). It is very pleasing that the strong second half performance has lifted operating margins above 10% for the full year.
Volumes at Camera Dynamics were up, with sales of studio products and the recently acquired Autoscript products well ahead of 2006. They have entered 2008 with a very good order book, particularly for the Fusion robotic system.
Revenue in the Mobile Power business was down on the previous year as an OEM contract for medical product came to an end. The new battery systems for movie cameras have been received very well, uptake of which should resume now the writers’ strike in Hollywood has been resolved. The Elipz battery system introduced in mid-2006 for small video cameras continues to gain momentum.
In our Communications business, more than 40 new Clear Com products were launched in 2007, driving higher demand and establishing a much stronger customer proposition. Significant contract wins at the Muziektheater in Amsterdam, Norway’s National Opera House, Teatro Royal in Madrid, Korea’s MBC network and China’s CCTV network point to encouraging progress. Manufacturing operations and supply chain management were largely consolidated into our new Alameda facility in California, thereby downsizing production operations in Cambridge and reducing our UK facility accordingly.
RF Systems is performing well, with sales and operating profit in the seven months of Vitec ownership of £23.5 million and £3.3 million respectively. Pro forma 12-month sales and operating profit for 2007 were £32.2 million and £5.2 million. Both RF Central and Nucomm, have launched well-received ‘High Definition’ products that will maintain our competitive position. 2008 and 2009 results will be buoyed by revenue from the BAS relocation project, which is expected to fall away by 2010.
Within the operations area the extended Camera Dynamics plant in Costa Rica has performed well, and new investments in machining in the UK are also increasing responsiveness and delivering savings. We have acquired the Anton/Bauer building in Shelton, Connecticut, to gain space and flexibility in order to develop the business for the future.
| 2007 | 2006 | |
| Revenue | £129.8m | £100.5m |
| Operating profit* | £13.3m | £6.9m |
| Operating margin* | 10.2% | 6.9% |
Divisional summaries for previous years can be found under each Annual Report in the reports archive.
