Shares in Videndum PLC (LSE:VID) dropped 36% on Wednesday morning after the company posted a sharp drop in second-quarter revenues, triggering serious doubts over its full-year guidance and future profitability.
The video equipment maker, which had already flagged a tough start to the year, reported a 25% year-on-year fall in revenue and a £7 million adjusted operating loss for the first half.
Analysts at Shore Capital now expect “material downgrades to consensus” and have placed both their forecasts and recommendation under review.
The company had guided for flat full-year sales and a modest profit margin, but Shore notes that with only 41% of last year’s revenue delivered in the first half, a dramatic rebound in the second half would be needed.
That's something it sees as increasingly unlikely. Market conditions remain weak, made worse by trading volatility linked to new US tariffs.
While management highlighted some improving sentiment in the Cine segment and among independent content creators, visibility remains low and macroeconomic pressures continue to weigh on demand.
Videndum is pushing ahead with restructuring efforts and expects £15 million in cost savings this year, but net debt has risen to £137.7 million and cash flow remains a concern ahead of its 2026 debt refinancing.
Shore warns the share price could fall below the 85p level of April’s equity placing.
While Videndum believes it is better positioned than Chinese peers to handle tariffs, long-term headwinds across the content creation market cast a shadow over recovery hopes.
The stock fell 38.34p to 67.66p.