2016 Preliminary Results Announcement


Results reflect challenging market conditions, in line with market expectations
Financial highlights
Year to
30 September
Year to
30 September
Revenue £134.4m £135.8m
Headline pre-tax profit * £36.5m £47.2m
Headline diluted earnings per share ** 10.7p 15.3p
Profit before tax £(4.1)m £31.5m
Diluted earnings per share (3.6)p 10.4p
Dividend per share 4.5p 7.4p
Net (debt) £(59.1)m £(52.3)m
  • Headline results in line with market expectations with challenging market conditions partially offset by acquisitions
  • Continued diversification of the geographic spread of ITE’s portfolio
  • Loss before tax reflecting a non-cash impairment of goodwill on certain acquired assets
  • Net debt of £59.1 million after investing £18.3 million on acquisitions & deferred consideration
  • Full year dividend of 4.5p - headline earning cover of more than two times
  • 59% of consensus revenues booked for 2017 (2016: 57% of actual revenue)
  • New CEO and CFO now in place
  • Full review of business and strategy underway – the outcome will be presented at the interims in May 

Mark Shashoua, CEO of ITE Group plc, commented:
“I am very excited by the opportunity at ITE to work again in a business whose heritage is familiar to me. Since joining as CEO on 1 September, I have been spending time getting to know our employees and customers and have also visited a number of ITE’s offices in different regions. I have been impressed by the people I have met, their knowledge of local markets and their enthusiasm for ITE’s diverse portfolio of events. I am leading a full review of the business and strategy and will present the results of this review at the Group’s interim results in May 2017.

ITE has continued to face challenging end markets in the last year due to the impact of the oil price, weakness in local economies and geo-political events. The Group’s recent acquisitions which ran for the first time under ITE ownership have helped to partially mitigate the impact on our results. Trading conditions in Russia, Central Asia and Turkey remain challenging but prospects appear to be improving in Moscow which in time should spread through the rest of the region. The Group’s other regions, which now account for over 40% of ITE’s business, are trading satisfactorily.”

Mark Shashoua, Chief Executive Officer
Andrew Beach, Chief Financial Officer
ITE Group plc 020 7596 5000
Charles Palmer/ Emma Appleton FTI Consulting 020 3727 1000

* Headline profit before tax is a non-statutory measure of performance used by the Group as it better reflects underlying trading performance. Headline profit before tax is defined as profit before tax and adjusting items which include amortisation of acquired intangible assets, impairment of goodwill and intangible, profits or losses arising on disposal of Group undertakings, transaction and integration costs on completed and pending acquisitions & disposals, tax on income from associates & joint ventures, gains or losses on the revaluation of contingent consideration, gains or losses on the revaluation of put option liabilities over non-controlling interests, and imputed interest charges on discounted put option liabilities – see note 3 for details.

** Headline diluted earnings per share is calculated using profit before adjusting items – see note 9 for details.

*** The differences between headline and statutory results and EPS are primarily due to non-cash, non-trading items such as amortisation of intangible assets and the impairment of goodwill – see note 3 for details. Where used, like-for-like measures are stated on a constant currency basis adjusted to exclude acquisitions impacting for the first time, event timing differences and biennial events

Chairman's Statement

Group Performance

ITE Group plc has reported revenues of £134.4 million and headline profits before tax of £36.5 million. As expected at the start of the year, there have been three factors affecting the results in 2016 – the impact of difficult trading conditions in the oil-dependent economies of Russia and Central Asia, the negative impact of exchange rates for much of the year and the beneficial impact of the recent acquisitions.

The impact of the fall in the oil price on the oil dependant economies where we operate was always going to take time to cycle through our results and this year has suffered the full effect as all bookings for this year’s events were made in the period since the oil price fell in early 2015. In addition to this, there was an adverse impact from translating operating results at less favourable exchange rates. Furthermore, the Group benefited in the previous year from a significant one-off foreign exchange gain which was not repeated this year.

In mitigation of these factors, the Group’s diversification of its business in 2015 meant that the results of Africa Oil Week and Breakbulk Americas feature in the 2016 results for the first time and the step up to a controlling stake in ABEC, the largest private exhibition organiser in India, means we have the benefit of consolidating the results of this business. These proactive changes have given the Group a better geographic balance between its historic Russian-CIS businesses, and other leading emerging markets.

In this weaker biennial year, headline diluted earnings per share was 10.7p (2015: 15.3p). As a result of a number of items that are not related to the underlying trading of the business (primarily amortisation of intangible assets and impairment of goodwill), we are reporting a loss before tax of £4.1 million (2015: £31.5 million profit) and fully diluted earnings per share of (3.6p) (2015: 10.4p). The Group finished the year with net debt of £59.1 million (2015: £52.3 million), after investing £18.3 million on acquisitions during the year.

Board and Management

We have seen a significant change in the leadership team of the business during 2016. As previously disclosed, Neil Jones resigned as CFO early in the financial year and Russell Taylor stood down as CEO on 1 September 2016. Russell joined ITE as Finance Director in 2003 and was appointed CEO in May 2008. During his tenure, the business enjoyed substantial revenue, profit and EPS growth. Russell was instrumental in developing ITE's diversification strategy, establishing cornerstone businesses in three of the largest emerging markets of the future - China, India and Africa. On behalf of the Board I express our gratitude to Russell for his tremendous contribution to ITE over the years both as CEO and Finance Director and we wish him well in the future.

Our search process to find a new CEO and CFO was driven by the desire to appoint a strong executive team with a mix of industry experience, knowledge of our operating model and geographies, together with the skills to develop and grow the Group and maximize its potential.

The Board believes it has achieved this aim with these two key appointments and believe that Mark Shashoua (appointed as CEO on 1 September 2016) and Andrew Beach (appointed as CFO on 17 October 2016) offer the necessary qualities and right combination of skills to actively develop the business moving forward.

Mark’s experience and success as CEO at i2i Events Ltd, an international high-growth B2B events and trade exhibitions company, part of Ascential Plc, and previously with Advent International, Expomedia Group, and as one of the original founders of ITE in the early 1990's, means he brings huge strategic and operational experience to this role.

Andrew was previously CFO of Ebiquity plc, the marketing analytics specialist, having taken up the position in 2008, where he oversaw the rapid expansion of the business, leading and integrating over 15 acquisitions across new verticals and global geographies and restructuring the global finance systems and team.

Mark is now leading a review of the business and strategy. The outcome of this review will be presented alongside the Group’s interim results in May 2017.

We look forward to working closely with Mark and Andrew, and the senior leadership team, in the future.

ITE is a people business and its success is based upon the hard work and loyalty of its staff worldwide. The Group has over 1,400 employees conducting its business in 32 offices in 20 different countries. As Chairman and on behalf of the Board, I would like to thank and recognise the involvement of all of ITE’s employees to this year’s result and especially those staff in Turkey who have worked extremely hard under difficult circumstances.

ITE’s Board recognises that good corporate governance is in the long-term interests of the Group and we are conscious of our responsibilities for setting values that underpin the Group culture. As Chairman, I am mindful of my personal responsibility for leading the Board and ensuring it operates diligently and effectively.


In order to rebuild dividend cover to historical levels of more than two times earnings the Board took the decision to reduce the interim dividend to 1.5p. In line with this objective the final dividend has been reduced from 4.9p to 3.0p making a full year dividend of 4.5p. With the current lower levels of trading in Russia, Central Asia and Turkey, the Board believes this to be in the best long term interests of shareholders. The final dividend is proposed for payment on 6 February 2017 to shareholders on the register on 30 December 2016.


Trading conditions in a number of the regions in which we operate continue to be challenging. Whilst commentators expect a moderate economic recovery in Moscow to spread to the rest of the country and region, given the high visibility of our business model with events booked a year in advance there will be a lag before this feeds into our trading results. The benefit of exchange rate movements since June will, if maintained, also benefit the Group in the medium term. At 27 November 2016, Group revenues already booked for FY 2017 were £81 million (FY 2016: £77 million) representing circa 59% (FY 2016: 57%) of market expectations for the full year. On a like-for-like basis these revenues are circa 4% ahead of this time last year.

Although ITE’s acquisition activity has reduced its dependency on Russia, the Group’s results remain sensitive to its economic climate and to the oil price. Management will continue to monitor and review the Group’s cost base to ensure that it has the most efficient structure and the operational capability to benefit from any recovery in its core markets.

Since its creation in 1991 ITE has successfully navigated emerging market challenges and evolved to meet the needs of the markets it serves. The Group has weathered the conditions of the past two years and has an established position in promising markets. We enter 2017 with a new management team who have the necessary qualities to take the business to the next phase of its development. A solid leadership team combined with the Group’s sound balance sheet and good operating cash flow provides the Board with confidence in the Group’s future prospects.

Marco Sodi

Chief Executive's Statement

I was delighted to take over as CEO of ITE on 1 September. I am very excited by the opportunity at ITE to work again in a business whose heritage is familiar to me and apply my experience from a career in the global exhibitions industry to drive the business forward.

I have spent the time since my appointment travelling to meet the Group’s operations and customers and so far have visited Russia, China, Indonesia, India, South Africa and as well as our UK offices outside of London. I have been very impressed by the people I have met, their knowledge of local markets and their enthusiasm for the events they run. It is clear that a number of our customers have strong connections to our events and recognise their essential market leading positions.

My first impressions are that ITE has some great people and events and I believe that there are significant opportunities through enhanced sales and marketing activities, greater use of technology and focussed management reporting to drive operational efficiencies and improved performance in order to better service our customers.

With a new executive management team now in place, I am in the process of conducting a comprehensive review of the business and strategy. I look forward to presenting the results of this review at the time of the Group’s interim results in May 2017.

The Group's performance in 2016

ITE’s performance in 2016 largely reflects the challenging trading conditions in Russia and Central Asia, the decline in the value of the Russian Ruble (against Sterling) in which 20% of the Group’s revenues are denominated, compensated by the Group’s acquisition activity in line with its diversification strategy.

The Group’s acquisitions this year were mainly aimed at consolidating our ownership position in existing investments. In October 2015 the Group acquired an additional 31.7% stake in ABEC taking the Group’s ownership in this business to 60% and in May 2016 the Group acquired a further 24.9% of Africa Oil Week following the exercise of a put option by the non-controlling interest, which was settled by a small issue of equity, taking the Group’s stake in this business to 75%.

The main factors affecting Group profitability this year are summarised in the profit bridge below.
2015 headline PBT 47.2
Net biennial & timing (1.9)
Acquisitions (net of overheads & financing) 5.7
FX impact (6.6)
Core business (7.9)
2015 headline PBT 36.5

The positive contribution of £5.7 million from newly acquired businesses is attributable to the consolidation of ABEC, the Africa Oil Week and Breakbulk Americas October 2015 events and the acquisition in January 2016 of ITE Ebseek’s Fasteners event which ran for the first time under ITE’s ownership in June.

The devaluation of the Russian Ruble against Sterling (by 10% on an annual average basis, but by 20% in key trading months) accounted for most of the £2.6 million adverse impact from translating our results at less favourable rates and this, combined with a £4.0 million reduction in foreign exchange gains from the retranslation of foreign currency denominated monetary assets and liabilities, results in £6.6m total adverse impact attributable to foreign exchange rates movements.

A reduction in core business through adverse economic and trading conditions accounted for a further £7.9 million of shortfall against last year.

The currency impact and the core business decline have a common cause; the fall in the oil price in early 2015 had a negative effect on the oil dependant economies of Russia, Azerbaijan and Kazakhstan leading to a proportionate devaluation of currencies to protect their national finances. The effect on ITE’s business in these countries was further aggravated by the high proportion of ITE’s exhibitors who import and distribute overseas goods. For these customers the currency devaluation has made their business less competitive.


Divisional trading summary 2016
In 2016 the Group ran 252 events (2015: 240). The increase in the number of events is primarily attributable to acquisitions. A detailed analysis of volumes, revenues and gross profits from the Group’s exhibition and conference activities is detailed below:
    Square Metres Sold
Gross Profit
Average yield
per m2
2015 All events 613 136 62  
  Non-annual (20) (7) (4)  
2015  Annually recurring 593 129 58 216
  Acquisitions 91 18 10  
  Timing 0 1 1  
  FX Translation   (9) (4)  
  Net Growth (44) (10) (7)  
2016  Annually recurring 640 129 58 200
  Non-annual 45 5 1  
2016  All events 685 134 59  

Overall, the Group saw volume sales grow by 12% to 684,700m2 and revenues decrease by 1% to £134.4 million. On a like-for-like basis, volume sales fell by 7% and revenues fell by 8%.

Russia 50.8 72.1 -30% -16%
Central Asia 22.0 27.2 -19% -8%
Eastern & Southern Europe 19.3 17.9 +8% +7%
Asia 18.1 3.9 +364% +33%
ROW 24.2 14.7 +65% +6%
Total 134.4 135.8 -1% -8%

# Where used, like-for-like measures are stated on a constant currency basis adjusted to exclude acquisitions impacting for the first time, event timing differences and biennial events.

(Moscow, St. Petersburg, Novosibirsk, Krasnodar, Ekaterinburg)

During the year ITE held 110 events in Russia (2015: 116), with total volume sales of 256,000m2 (2015: 312,600m2). Revenue of £50.9 million was 30% lower than the previous year, reflecting the difficult trading environment and the weakening of the Russian Ruble. On a like-for-like basis volume sales in Russia decreased by 14% and revenues decreased by 16% from the prior year.

Moscow is ITE’s largest office in Russia accounting for around 75% of the region’s revenues. Moscow’s volume sales for the year were 151,200m2 (2015: 202,400m2); a fall of 18% on a like-for-like basis.

The leading events in Moscow performed as expected this year demonstrating resilience in tough conditions. The Moscow International Travel and Tourism exhibition which is held annually in March delivered sales of 11,700m2 (2015: 16,300m2) as the impact on Russian international tourism from the devaluation of the Ruble was exacerbated by the deterioration in relations between Turkey and Russia at that time. Mosbuild saw volumes fall by 21% to 31,800m2 (2015: 40,300m2) in line with the Board’s expectations due to the impact of the economic conditions on the construction industry and local competition. The logistics event TransRussia saw volumes decline to 7,200m2 (2015: 7,900m2), whilst the security event, Moscow International Security & Protection performed a little better with volumes of 10,600 m2 (2015: 11,100m2). WorldFood Moscow in September proved relatively resilient, increasing its visitor numbers over the prior year and suffering only a 10% fall in volumes to 20,200m2 (from 22,600m2), as supplier substitution offset a decline in the traditional European supplier base.

The Group operated 16 events from the St Petersburg office during the year, with overall volume sales of 23,100m2 (2015: 27,600m2). Performance was in line with Moscow with most shows showing declines in volumes from the prior year. Those events in industries reliant on capital expenditure, such as construction and mining were the most impacted. The exception was ExpoElectronica, the international radioelectronics event, which grew by 4% as it took further market share.

In Novosibirsk, Siberia, ITE is the anchor tenant in the city’s main venue. During the year the region held 34 events (2015: 36), with overall volume sales declining to 23,500m2 (2015: 30,200m2) with all sectors affected. An impairment charge of £1.2m was taken in the interim results writing off the remaining goodwill and intangible assets associated with this business due to the sustained downturn in the region.

The Krasnodar region in southwest Russia is one of the most prosperous outside Moscow. The exhibition portfolio covers a broad range of sectors, the largest events being in agriculture and construction. The Group has now become the anchor tenant at a new 28,000m2 venue in the city, which opened ahead of schedule in November 2015, and in time to house ITE’s agricultural event, YugAgro, which grew by nearly 20% over the prior edition. In total this office contributed volume sales of over 57,800m2 (2015: 52,500m2) an increase of 13% on a like-for-like basis.
Central Asia

ITE’s principal offices in Central Asia are in Kazakhstan, Azerbaijan and Uzbekistan. All of the economies in this region are heavily dependent on oil and gas for their overseas earnings and economic wealth and in the case of Kazakhstan a significant level of trade with Russia as well. The fall in the oil price and the Russian economic recession have had a significant impact on trading conditions within the region.

This year ITE organised a total of 74 events (2015: 79) across these territories delivering total volume sales of 70,400m2 (2015: 83,000m2) and revenues of £22.0 million (2015: £27.2 million). Overall, on a like-for-like basis volumes decreased by 17% over the previous year with revenues falling by 8% on the same basis. This region was later to suffer a decline in trading compared with Russia and so is currently lagging Russian performance.

Kazakhstan is the Group’s largest office in the region selling 34,400m2 (2015: 45,200m2). The largest event in the region, Kazakhstan Oil & Gas Exhibition (KIOGE), which took place in Almaty in October 2015, was smaller than the prior edition at 5,800m2 (2015: 6,800m2).

Azerbaijan achieved volume sales of 19,300m2 (2015: 25,600m2) a decrease of 24% on the prior year on a like-for-like basis with all sectors suffering reduced volumes and like for like revenues down 12% on the prior year.

ITE’s Uzbekistan business is slightly more insulated from the oil price due to the nature of the local economy and it performed well in 2016 selling 16,100m2 (2015:11,500m2) due to the benefit of some timing changes and the biennial pattern. On a like-for-like basis volumes have increased by 5% and revenues by 16%.
Eastern & Southern Europe

The Eastern and Southern Europe region is represented by the Group’s offices in Turkey and Ukraine.

Overall the region sold 172,200m2 in 2016 (2015: 147,000m2), reflecting the stronger biennial pattern in Turkey and growth in Ukraine. On a like-for-like basis this represents an increase of 4% in volumes.

Trading in Ukraine has recovered strongly. Overall volume sales for the year were 37,000m2 (2015: 26,500m2) a 40% increase on a like-for-like basis in comparison to the prior year and revenues increased by 35% on the same basis. With a population of over 45 million people and the potential for further economic recovery, Ukraine now offers attractive returns in the longer-term.

Overall total volumes in Turkey were 135,200m2 (2015: 120,400m2) reflecting the biennial Ankomak event which mitigated the challenging local environment. On a like-for-like basis volume sales were 3% lower than last year. The travel event EMITT was challenged due to the deterioration in relations between Turkey and its local trading partners and the backdrop facing the tourist industry and fell by 7% to 26,700 m2. Turkeybuild, the pre-eminent construction event in Turkey, took place in late April and delivered 38,400m2 (2015: 40,000m2). In September, following the attempted coup in July, the Group’s WorldFood Istanbul exhibition fell from 13,900m2 to 12,000m2. All of these events were protected to some extent due to the existing bookings for the event but it looks likely that this region will face a challenging 2017.

The Group’s operations in this region are based in India, China and South East Asia. These regions represent relatively new markets for ITE in which to grow our existing products and potentially develop new sectors. Although these markets have experienced flat or slowing economic growth they are still attractive markets as they are underpinned by a rapidly expanding aspirational middle class population which is expected to drive consumer demand. In addition, they have relatively immature exhibition industries for the size of their economies and these two factors combine to offer good potential growth opportunities over the medium-term. In October 2015, the Group exercised its call option to take a majority stake in ABEC. This increased revenues in the region to £18.1 million (2015: £3.9 million). The Group’s other operations in this region are largely through a series of joint venture arrangements and the Group’s income statement reflects only those revenues over which it has majority ownership.

The Indian exhibition industry offers significant potential but is currently restricted by the lack of international quality venue space in the country. The Group operates two business in India: one through a small wholly-owned subsidiary, ITE India, and the other through ABEC, India’s largest private exhibition organiser in which ITE increased its stake from 28.3% to 60% in October 2015. ABEC’s portfolio of over 20 exhibitions across different industry sectors includes Acetech – India’s leading construction event. Both businesses performed in line with management expectations this year. ITE India had its biennially stronger year, whilst ABEC’s Acetech events once again performed strongly.

Although the underlying businesses remain strong, the growth of the Indian business has been slower than management’s initial expectations and the delay in the construction of a new venue means that the value in use, as calculated under accounting standard IAS 36, falls short of the current carrying value and therefore an impairment has been recognised to write down the goodwill and intangible assets attributable to the business to £32.1 million.

In China the Group has offices in Beijing, Shanghai, Guangzhou and operates (through its Hong Kong headquartered 50% joint venture partner Sinostar) the Chinacoat/Surface Finishing China event. The November 2015 Chinacoat/Surface Finishing China event saw record sales of over 39,800m2, with another strong performance expected at the November 2016 event. A 70% stake in the complementary ITE Ebseek’s Fastener Expo was acquired in November 2015 and had a successful debut under ITE’s ownership. It is currently being integrated in to ITE’s Chinese operation.

In South East Asia the Group operates through three organisations based in Malaysia and Indonesia. In Kuala Lumpur, Malaysia the Group now owns 100% of Tradelink (having acquired the minority’s 25% stake in November 2015) which runs the Metaltech event, serving the machine tool technology and metal fabrication industries. The event, which sells over 12,000m2, takes place each May in Kuala Lumpur and performed marginally ahead of the previous edition, although it is likely to remain at its present size until construction of a new venue is completed, which is expected in two years’ time. Also based in Kuala Lumpur is the Group’s 50% joint venture, ECMI, a pan-ASEAN organiser operating in Malaysia, Indonesia, Vietnam and Myanmar, and traditionally operating in the professional beauty, life-sciences, and oil & gas sectors. Similarly to India, these businesses remain strong but the delay in construction of a new venue in Malaysia has reduced their growth below expectations at the time of these acquisitions resulting in impairments under IAS 36 of £4.1m for goodwill associated with South East Asia and of £1.9m relating to the carrying value of our joint ventures in the region. In Jakarta, Indonesia, the Group owns 50% of PT Debindo which runs the Indobuildtech series of construction exhibitions, the largest of which takes place annually in Jakarta. This year the event moved to the new International Convention and Exhibition Centre and has grown to over 22,000m2 (2015: 14,000m2).

The Group’s RoW business contains the results of our UK fashion events and the Africa Oil Week, Breakbulk Americas and Europe events.

In MODA the Group owns the leading midmarket fashion event for Womenswear, Menswear, Footwear and Lingerie which runs twice a year in Birmingham. In London the Group operates Bubble, a niche highend childrenswear event; Jacket Required, a designer-led menswear event; and Scoop, a designer-led womenswear event. Overall the portfolio achieved volume sales of 39,600m2, a 5% like-for-like decline on the prior year with MODA continuing to see the effects of a changing market place for midmarket independent fashion retailers.

A 50.1% stake in Africa Oil Week was acquired in March 2015 and the event ran for the first time in ITE’s ownership in November 2015. Revenues were a little lower than had been anticipated at the time of making the acquisition but this does not undermine the future potential of this event. A further 24.9% stake was acquired in May 2016 following the exercise of the put option granted to the previous owners. The remaining 25% non-controlling interest is also subject to a put option, exercisable after 1 February 2017.

Breakbulk Americas ran for the first time in ITE ownership in October 2015 and achieved sales of 5,200m2 compared with 4,700m2 for its previous event. Due to a timing change associated with venue availability, the event ran again in September 2016 and sold 4,900m2 as the global transportation sector slowed slightly.

> View full statement (PDF)

> View Financial Calendar 

The preliminary results presentation is also available - click here to view.

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