Interim results pre-close statement
ITE Group plc, the international exhibitions group, is today publishing a pre-close statement ahead of its interim results for the six months ended 31 March 2015 which will be announced on Monday 11 May 2015.
The Group’s performance for the first six months of the financial year is in line with management expectations. Strong results from the Group’s associate businesses in Asia helped to offset some of the impact from weaker Russian and Ukrainian trading.
Revenue for the six month period to 31 March 2015 is estimated to be circa £56m (six months to 31 March 2014: £71m). Revenue for this period reflects a weaker biennial pattern than in the previous year, lower currency translation rates and the impact of current trading conditions in Ukraine and Russia.
On a like for like basis (constant currency) revenues for the first six months are 5% behind the comparative period, and 22% behind this time last year on an actual currency basis
The Group has a flexible cost structure, and is focused on maintaining gross margins in line with prior years and ensuring that overheads appropriately reflect the Group’s trading environment.
During the period, the Group has continued the execution of its strategy of building or acquiring market leading events in its key industry sectors, as well as achieving greater geographic diversification.
In the first quarter, ITE acquired both Eurasia rail in Turkey and the geographically diverse Breakbulk portfolio of events. Most recently, ITE acquired a 50.1% stake in Africa Oil Week (“AOW”) on 6 March 2015. This complementary move establishes a first-time presence for ITE in Africa, and provides the Group with a base from which to grow its portfolio of events across the continent. AOW is an annual Oil and Gas Conference and Exhibition held in the Cape Town International Convention Centre (“CTICC”) and is the longest-running and most prominent event held in Africa for the continent’s fast-growing oil, gas and energy industry. The 22nd edition of this event will take place 27-30 October 2015.
The Group’s balance sheet and operational cash flows remain strong. The Group has net debt of circa £57m at 27 March 2015, and operates within its secured debt facilities of £100m which have recently been extended to March 2019. The acquisition of Africa Oil Week was supported by a successful £12m placing (circa 3% of the Group’s equity), ensuring the Group has a stable financial base from which to continue developing its business in line with strategy.
A more stable oil price and a less volatile Ruble have helped to stabilise trading conditions in Russia over the past two months and volume sales for Russia remain circa 20% behind this time last year. Trading conditions in our markets outside of Russia and Ukraine are in line with management expectations, with continued good growth in Asia and Turkey. Overall, the Group’s like for like trading volumes (which excludes associates) are currently 16% behind this time last year.
The Group’s revenues will be reported at the exchange rates prevalent when the events take place, and are therefore sensitive to the Ruble/Sterling exchange rate over the key trading months of March and April. Using an exchange rate for Ruble/Sterling of 85 : £1 for future events the Group has contracted £111m of revenues for FY 2015. This is 12% behind on a like-for-like basis (constant currency), reflecting a small improvement in bookings over the past two months.
The Board continues to monitor the effects of the prevailing economic conditions in Russia but remains confident that the Group’s strong business operations there will weather the crisis successfully. The Group remains well positioned to continue with its successful strategy of developing market leading positions in emerging markets and of further diversifying the Group’s geographic exposure.
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Russell Taylor, Chief Executive, ITE Group plc
Tel: 020 7596 5000
Neil Jones, Group Finance Director, ITE Group plc
Tel: 020 7596 5000
Charles Palmer/Emma Appleton, FTI Consulting
Tel: 020 3727 1000
James Serjeant, Numis Securities Ltd
Tel: 020 7260 1309