By Najat Kantouar
Shares of Videndum, a renowned manufacturer of hardware and software for the film industry, experienced a significant setback, tumbling by 29% during early trading. The company attributed this decline to a pause in dividend payouts and a decline in pretax profit for the first half of the year. These obstacles were mainly caused by the ongoing strike by U.S. writers and various macroeconomic challenges.
At 0818 GMT, Videndum shares dropped by 160.0 pence to 390.0 pence.
For the six months ending on June 30, Videndum reported a pretax profit of GBP3.1 million ($3.8 million) from continuing operations. This stands in stark contrast to the GBP22.9 million achieved during the same period the previous year. Furthermore, the company witnessed a drop in revenue, which fell to GBP165.0 million compared to GBP219.4 million previously.
In response to the continued strikes by U.S. writers and actors, Videndum’s board made the decision not to declare an interim dividend. However, they reassured shareholders that dividend payments would resume when appropriate to do so.
Late on Monday, Hollywood studios, streamers, and writers reached a tentative labor agreement. This marks a significant step towards resuming film and TV production and allows actors to negotiate their own agreements. The entertainment industry now eagerly awaits the return to full-scale production.
Despite the uncertainty surrounding the financial outlook for the rest of the year, Chief Executive Stephen Bird remains optimistic about Videndum’s future prospects. He expects the company to experience a substantial recovery in revenue once productions restart.
In other news, Chairman Ian McHoul has informed the board of his decision not to seek re-election at the 2024 annual shareholder meeting due to personal reasons. Consequently, the search for his replacement has already begun. McHoul joined the board in February 2019 and assumed the position of chairman in May of the same year.