Videndum shares drop on slow market recovery

(Sharecast News) - Shares in media group Videndum tanked on Monday after the company warned of a slower-than-expected recovery in end-markets. The company, which provides hardware and software to the content creation market, said in a pre-close trading update on Monday that it expects to break-even for 2024, when excluding a £25m exceptional write-off and £10m in restructuring costs.

Videndum said that the recovery in its markets continues to be slower than expected - trading was hit hard by the writers' and actors' strikes affecting the entertainment industry in 2023 - but there are "some signs of gradual improvement" which should benefit trading in the first half of 2025.

The company is continuing with its cost and restructuring programme, which has seen it move from three divisions to two (Videndum Production and Imaging, and Videndum Creative Solutions). Actions are focused on reinstating pricing discipline, improving operational efficiency, lifting margins and cutting non-essential spend.

However, while it is around 80% of the way through implementing cost-savings measures, there will be minimal benefits to current-year results.

"Since assuming my expanded role, I have seen significant opportunities within the business. However, it has to be recognised that there are areas where management processes, cost discipline, and contractual and commercial acumen require strengthening," said executive chair Stephen Harris who joined the company in October at the time that long-serving chief executive Stephen Bird stepped down.

"These challenges were exacerbated in some areas by challenging market conditions. The new management team has identified the issues and is addressing them at pace."

Videndum's shares were 14.4% lower at 219.05p by 0930 GMT, taking the year-to-date loss to around 37%.