Products for the photographic, video and live event markets
Design and manufacture of high quality equipment principally for photography, video, cinematography and live events professionals. Distribution of in-house and third party photographic accessories.
Divisional Report
Taken from the Annual Report 2007
Overview
The Imaging & Staging division operates in two main markets: manufacturing and distributing products for the professional and keen amateur photographer and videographer, such as camera supports and bags, and manufacturing lighting and staging systems for the live entertainment market. Lighting supports (‘grip’) are manufactured for both these markets and for cinematographers. It is organised in three units: Imaging Accessories, Imaging Distribution, and Staging Systems.
Strategy
Focusing on successful launches of innovative new products, combined with control of the distribution of those products in the key markets of the world, is proving to be a winning formula. Innovation is as important to the pro photographer as it is in Staging Systems, where customers who use our stage and lighting systems are looking for ever lighter, easier to operate and more elegant solutions to make their events look as good as possible.
2007 performance
2007 was another successful year for the Division: revenue rose 24% to £117.3 million (2006: £94.6 million). As in 2005 and 2006, every part of business saw revenue growth. Operating profit before significant items* rose 7% to £17.7 million (2006: £16.6 million). Adverse foreign exchange, particularly the weaker US dollar was a significant handicap, reducing operating profit by £2.1m; in constant currency sales and profit growth were 30% and 20% respectively. Imaging saw good growth in both half-years, although the adverse FX conditions kept the reported revenue in the second half very similar to the first half. Sales of professional products remained strong and the growth in shipments of D-SLR cameras (the lower end of which are bought by the type of ‘prosumer’ customer who is likely to purchase our accessories) was 42% in 2007 according to CIPA, the camera manufacturers’ trade association, underpinning our prosumer sales. We launched 22 new support products in the year, backed by 13 new international patents, and more than 40 new bag products, including a whole new mid-range collection, the ‘Digital Photo Collection’. The latest Manfrotto 190XProB tripod won the coveted TIPA award for Best Accessory.
The in-house distribution business, Bogen Imaging, made several significant steps forward in 2007: the US and European websites have been upgraded, allowing us to reach target customers in a more exciting but easier way, the French operation has been consolidated onto one site, with the warehousing outsourced. The existing UK operation, Kata UK, was scaled-up in the second half, also with outsourced warehousing, ready to bring the Manfrotto products inhouse from February 2008, away from the previous UK distributor. Bogen Imaging now operates in six countries.
Corporate Social Responsibility is an important theme for customers like ours. 2007 saw the Italian operation awarded the ISO14001 environmental certification and their energy in Bassano and Feltre is now provided from renewable sources.
In late 2007 the decision was taken to outsource the central warehousing in Italy to a third party operation. This ‘hub’ will receive goods from the various Imaging plants or suppliers and consolidate shipments to the European in-house and third party distributors. The benefit of this will come from logistics savings, space savings in the Italian plants, and from offering reduced delivery times to customers as we will be selling from finished stock. Inventory levels rose in the final months of 2007 as the ‘hub’ was prepared and will fall back in 2008 as the stock in our inhouse local ‘spokes’ can be trimmed back.
In Staging, the acquisition of Tomcat improved our market presence in the US and for customised projects. The integration process, although slightly slower than expected, is continuing but, due principally to problems with two large contracts, the Staging business was loss-making in the year. The US plant in Texas suffered from a lack of welding labour; we are planning to increase the size of the facility in Mexico and increase our project management strength to resolve these problems. In early 2007 we acquired a plant in Slovakia that has now been scaled-up, producing standard products for Europe.
| 2007 | 2006 | |
| Revenue | £117.3m | £94.6m |
| Operating profit* | £17.7m | £16.6m |
| Operating margin* | 15.1% | 17.5% |
Divisional summaries for previous years can be found under each Annual Report in the reports archive.
