Global events organiser ITE Group plc has delivered a set of interim results which point to long-awaited stabilisation in its Moscow business, but reflect continued challenging trading conditions in some of the Group’s other markets.
Revenues of £69.6m for the first six months are 9% higher than last year as a result of improved underlying trading (£1.4m), foreign exchange (£5.8m) and acquired events (£3.3m), offset by the adverse impact from net biennial events (£2.3m) and changes in event timings (£2.2m).
The improvement in underlying trading led to an increase of 2% in pre-tax profits on a like-for-like basis.
However, headline pre-tax profits of £15.4m are 19% lower than the same period last year, although the reduction is due in part to the non-recurrence of a £1.5m foreign currency exchange gain in the comparative period, which has been replaced by a loss of £200,000m.
In December 2016 the Group completed the acquisition of the Gehua portfolio of events in China, with the first event post-ownership running in March contributing revenues of £900,000. Other events relating to recent acquisitions running for the first time under ITE ownership contributed revenues of £2.4m, the majority of which relate to ABEC events in India.
The stabilisation of ITE’s Moscow business has not yet spread to the remaining regions of Russia, nor to Kazakhstan or Azerbaijan, which continue to be impacted by the difficult trading environment experienced since the fall in oil prices.
In Moscow like-for-like volumes over the first half were 5% higher than this time last year, although for Russia overall growth was just 1% and in Kazakhstan volumes were 25% lower and in Azerbaijan 42% lower.
In other regions, the Group has seen demonetisation in India, which has created uncertainty for many in the country, resulting in cancellations and postponements of a number of our smaller events. The continued uncertainty in Turkey has resulted in a number of cancellations by international exhibitors, although the improvement in relations with Russia resulted in the return of some Turkish exhibitors to ITE’s Russian exhibitions.
A detailed diagnostic of the current portfolio and its growth potential has been undertaken as part of the Group’s strategy review. Alongside this, a comprehensive review of key business areas was conducted including sales and marketing, content, show operations and support functions.
Mark Shashoua (pictured), CEO of ITE Group plc, said he was, “pleased to report that the Group has arrested its recent decline and posted like-for-like growth after three years of difficult trading. The first half performance reflects a more stable market in Moscow which is encouraging, but mixed market conditions remain in some of our other regions. We have completed a thorough review of the entire business and have concluded that there are significant organic opportunities in ITE’s existing core portfolio that have yet to be realised.
“Therefore, I am delighted to announce today the evolution of our strategy and a £20m Transformation and Growth Programme that will deliver a stronger, more scalable platform to drive organic growth with an emphasis on retention, content and customer service. By putting our exhibitors and visitors at the heart of everything we do, we plan to drive sustainable growth.”
Shares in the company have risen steadily over the past year since Shashoua took over as CEO.
