France’s Thomson gives trading update

Broadcasting equipment manufacturer Thomson issued a trading statement July 10 to the French stock exchange. Thomson owns some of the best-known equipment brands in the industry, not least its Grass Valley camera division (pictured, left) as well as its ViBE Encoding/Decoding products.
However, the statement said that year-on-year trading (at constant currency rates) would be down five to six per cent, although this decline is slightly better than expected (guidance of six to eight per cent).

Thomson says it has continued to progress its cost reduction and simplification measures. A decision to exit the Silicon Solutions business unit has now been implemented. The business will be treated as a discontinued operation as at June 30 2008, contributing to a Group net loss for the first half of 2008 which is expected to be around €220 million (of which a loss of approaching €100 million will relate to all discontinued operations).

As a result, Thomson is reconfirming today that as at June 30 it expects to meet the terms of the financial covenants contained in its outstanding privately-placed debt instruments, both in terms of the debt/equity ratio and interest cover. As expected, covenant headroom as at June 30 2008 will be lower than at December 31 2007. The Group is confident it will rebuild covenant headroom going forward.

Thomson says that recent months have also brought a number of important wins with high-profile customers that will generate future revenues, including the extension of the relationships with Comcast and NBC Universal announced over the last few days. These wins underline the strong positions of each of the Group's businesses in their respective markets. The Group's results for the first half of 2008 will be reported in full on July 24 2008.