Videndum shares tank as media production markets remain weak

(Sharecast News) - Videndum confirmed in an update on Friday that its results for 2024 were in line with previous guidance, subject to the completion of its audit, although its shares were tanking after a weaker-than-expected second half, as the company's markets remained seriously depressed. The London-listed cinema and broadcast TV equipment specialist said it also met the amended December covenant test, while its February covenant test had been waived.

Discussions with lenders regarding the March covenant and continued access to Videndum's revolving credit facility were ongoing.

The company reiterated that a waiver or amendment to the March covenant would be required, as weaker-than-expected second-half performance meant the test, which factors in the past 12 months, would not be met.

Work to refinance the facility, which was set to expire in August 2026, was underway, with Videndum stating that its lenders remain supportive.

As part of its restructuring efforts, the company said it had started transferring manufacturing operations from Bury St Edmunds to Feltre, Italy.

That was part of a broader operational efficiency programme, with agreements in place with employees and unions to deliver planned savings.

In light of additional initiatives, Videndum said it had increased its 2025 cost-saving target to £15m from a previous £10m.

The associated cash restructuring costs were now expected to reach about £15m, with £3m incurred in the last financial year.

Videndum said the measures were aimed at positioning it for a stronger recovery and improved margins.

"The gradual improvement in our markets has continued - we are seeing improving signs, particularly in cine and broadcast, in terms of quantity and quality of projects and enquiries," said executive chairman Stephen Harris.

"These should start turning into stronger order momentum once we get past the traditional doldrums of January and early February."

Harris said that while the company was not planning on a strong uptick in orders and revenues as it drove the business forward, it was gaining increasing confidence that the direction of travel was for improved strength in revenue through the year.

"There is still work to do, but I am confident that we are on the right path - building a stronger business, well positioned to capitalise on the market recovery."

At 1025 GMT, shares in Videndum were down 46.26% at 33.32p.

Reporting by Josh White for Sharecast.com.