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 2008
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 (Imaging), and manufacturing lighting and staging systems for the live entertainment market (Staging). Lighting supports (grip) are manufactured for both these markets and for cinematographers. It is organised in two units: Imaging Accessories (including Supports, Bags and 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 photo, video and cine professionals 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.
2008 performance
Revenue increased by 16% to £135.8 million (2007: £117.3 million). In constant currency, the division reported revenue growth of 3%. Operating profit reduced by £2.1 million, or 12% to £15.6 million. Margins were depressed by adverse foreign exchange effects and a number of one-off actions were taken. These include closing Tomcat UK, moving the low cost Tomcat Mexico business to larger premises and significant changes to senior management.
Imaging Support launched 30 new products in 2008, with the 190 and 055 carbon fibre tripods and Gitzo ball heads being particularly well received. A sales office was established in Mumbai for the first time. According to CIPA, the Camera & Imaging Products Association, shipments of digital SLR cameras increased by 30% by volume and 18% by value in 2008, and it forecasts further growth in 2009 and 2010. We continued to achieve operational improvements, renting further factory space in Italy, optimising the new outsourced logistics hub in Padua, as well as successfully moving our Chinese tripod production to a new subcontractor. Margins were affected both by the adverse Euro/Dollar exchange rate and increase in infrastructure costs that were needed to support the significant growth of the business over the past three years. Sales volumes in the bags business grew strongly, with over 50 new products launched, including the new Kata DPS line and the 3N1 model, which are proving to be very popular. Kata withdrew from its Protection and Security business line in 2008.
In Imaging Distribution, we saw good revenue increases in most of the six countries where Bogen Imaging distributes its products. Bogen Imaging UK was launched in February 2008 and reached its planned operating level and we consolidated the Bogen Imaging Italy operation into Bassano after moving it from Milan. Our websites continued to help drive sales, with the number of hits increasing by over 100%.
In Staging we also saw reported revenue growth, but underlying volumes were largely unchanged compared to 2007. Brilliant Stages saw a reduction in project work, but we expect the pipeline to increase in 2009, with work on the Take That and U2 tours already in prospect. In order to increase sales in South America and reduce product costs, Tomcat's Mexican operation moved to larger premises in December 2008.
Market developments
In 2008, in order to improve the profitability of our Staging business we closed our Tomcat UK operation and made a number of changes to senior management, at a combined cost of £1.2 million. In the first two months of 2009, order intake and sales are in line with our expectations, albeit volumes in constant currency are lower than the same period in 2008. In 2009, in Imaging, we have shed all temporary labour and had selective shut downs. We will continue to flex our capacity and cost base as we respond to material changes in demand.
| 2008 | 2007 | |
| Revenue | £135.3m | £117.3m |
| Operating profit* | £15.6m | £17.7m |
| Operating margin* | 11.5% | 15.1% |
Divisional summaries for previous years can be found under each Annual Report in the reports archive.
