Extract from the Chairman and Chief Executive's statement, 2001 annual report
The core business in Russia and the CIS out-performed directors' expectations for 2001. The expanding levels of business in Moscow involved a move to larger offices to accommodate the increase in staff numbers, which have now almost reached 100. Early signs of revival in the Turkish economy are not reflected in the year's results, but we anticipate some improvement in 2002. Our flagship events at Expocentr performed well with very good re-bookings for 2001/2002. Expocentr, currently 35,000 sq metres, is building a further 20,000 sq metres of new exhibition space which will be available for use in Autumn 2002. ITE expects to be able to capitalise on this opportunity. ITE's associate Incheba Prague successfully acquired a 20 year contract to manage Vystaviste, the leading exhibition venue in Prague, and ITE acquired the remaining 5% of Agentura Triumf which is based there. ITE now owns 100% of Holiday World, the largest Travel & Tourism exhibition in Prague. Intermedia, which was acquired in September 2000, performed very well, especially with its launches of E-Leaming in Paris, Amsterdam and Hong Kong. Intermedia expects to launch more E-Learning events in Vienna, Sydney, Toronto and Johannesburg in 2002/2003. Our Oil & Gas events in Kazakhstan and Turkmenistan, held shortly after 11 September 2001, performed well and outperformed directors' expectations. ITE owns a diversified portfolio of exhibitions, both geographically and by industry sector. Our level of profitability is affected by several factors. Exhibitions are late cycle with volumes (exhibition space sales) responding some 15 - 18 months later than the general economic cycle. The operational gearing of the exhibitions business is high, a factor which tends to amplify relatively minor shifts in volumes. Your directors anticipate that trading in 2001/2002 will be affected by continuing difficult economic conditions and by the absence of a contribution in this financial year from our biennial exhibitions MIOGE and AUTOSALON. At the beginning of February, ITE has forward sold 86% of expected annual exhibition space sales for the 2002 financial year, compared with 71% at the same time last year. The quality of ITE's core Russian and CIS business, together with our continuing efforts to control our cost base should ensure that your Group is well placed to benefit from improvements in our markets. Lawrie LewisChairman
December 2001
