Pre-close Trading Update
1 October 2014
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ITE Group plc
("ITE" or the "Group")
Pre-close trading update for the year ending 30 September 2014
ITE Group plc, the international exhibitions group specialising in emerging and developing markets, has today issued the following update for the year ending 30 September 2014, prior to entering its close period and ahead of its preliminary results announcement on 2 December 2014.
The Group can confirm that following a better than expected trading performance in Q4 and good cost control, headline profits before tax for FY 2014 will be ahead of current consensus **. Revenues for FY 2014 are now expected to be circa £174m (2013: £193m).
Fourth Quarter Trading
The Group ran 38 events in the fourth quarter producing revenue of circa £29m (2013: £27m). Overall, like-for-like revenues on a constant currency basis were 6% higher than last year, although 7% lower on an actual currency basis.
The principal trading highlights in the fourth quarter were:
• World Food Moscow, the Group's leading food exhibition, recorded its largest ever event with a 4% increase in space sales to 25,700sqm. The recently imposed sanctions against EU & US food imports had a minimal effect on overall sales, with a small number of cancellations from European exhibitors largely offset by additional sales to territories such as Egypt and Turkey. Visitor numbers were very strong, up 12% over the previous edition.
• MODA, the Group's market leading UK fashion event based at the NEC in Birmingham was slightly larger than last year at 17,200sqm.
The Group had net debt of circa £15m as at 26 September 2014 (2013: net cash of £23m), after spending circa £50m on acquisitions and deferred consideration during this financial year.
** consensus headline PBT at 26th September was between £54.8m and £56.7m
As at 26 September 2014, the Group had booked circa £60m of revenue for the 2015 financial year, representing circa 34% of current market expectations. The Group continues to experience currency headwinds from both of its major trading currencies, the Euro and the Ruble, which is expected to have an impact on earnings in the 2015 financial year if they remain at current levels. Bookings to date are in line with management expectations although behind the prior year, which benefitted from strong early bookings in a stronger economic environment and from the absence of the political crisis in Ukraine which continues to impact the Group's Ukrainian business.
Economic sanctions have had little direct effect on our Russian business to date but are expected to weigh on the Russian economy in the future. The Group will continue to monitor the situation but benefits from a flexible cost structure and will take appropriate steps to protect its margins.
Overall the Group is in a strong financial position generating good cash flows and remains well placed to continue to diversify its business into new geographies.
Russell Taylor, CEO 020 7596 5000
Neil Jones, CFO
ITE Group plc
Charles Palmer 020 3727 1000
This Pre-close Statement is prepared for and addressed only to the Group's shareholders as a whole and to no other person. The Group, its directors, employees, agents or advisers do not accept or assume responsibility to any other person to whom this Interim Management Statement is shown or into whose hands it may come and any such responsibility or liability is expressly disclaimed. Statements contained in this Interim Management Statement are based on the knowledge and information available to the Group's Directors at the date it was prepared and therefore the facts stated and views expressed may change after that date. By their nature, the statements concerning the risks and uncertainties facing the Group in this Interim Management Statement involve uncertainty since future events and circumstances can cause results and developments to differ materially from those anticipated. To the extent that this Interim Management Statement contains any statement dealing with any time after the date of its preparation such statement is merely predictive and speculative as it relates to events and circumstances which are yet to occur. The Group undertakes no obligation to update these forward-looking statements.