Global events business Hyve Group plc announced, 6 April, a trading update for the six months ended 31 March 2022 and says its latest figures represented “strong trading” and reflect a business “largely returned to a pre-pandemic event schedule”.
The Group said it had delivered revenue of approximately £58m (US$75.92m) in the first half (2021: £5m), excluding Russian revenues of c. £17m (2021: £5m), underpinned by the reopening of western markets and strong performance across all key performance indicators, including like-for-like customer spend, visitor density and NPS.
Forward bookings for the full year are currently £103m, the Group said, excluding bookings for Russian and Ukrainian events. It said the figures demonstrated the continued realisation of pent-up demand for in-person events as key shows return, enhanced by the ongoing execution of the Group's omnichannel strategy, and despite continued Covid-19 disruption in some geographies and challenges across the wider geopolitical environment.
In-person events normalising
The vast majority of the Group’s events have now run at least once since the outbreak of the pandemic, the latest Group statement reported. With the exception of China, a full schedule of events is expected to run in the financial year, thanks to the continued relaxation of Covid-19 related restrictions. Hyve ran a total of 21 (2021: seven) in-person events, excluding seven (2021: five) Russian events, in the first half.
The first Shoptalk event under Hyve’s ownership took place in Las Vegas in March 2022 and outperformed its last pre-Covid-19 edition and was the largest event by revenue that the Group has ever run.
In the UK, Spring Fair built on the momentum created at Autumn Fair last year and Bett returned following postponement from January to March due to Omicron.
In China, the Group reported, events continued to be impacted by ongoing government Covid-19 restrictions, with only one small event held in October 2021. Two events were postponed to later in the financial year and one was cancelled. ChinaCoat, the Sinostar JV event, was also cancelled in the first half after being postponed from December to March.
Continued evolution of omnichannel strategy
The Groupsaid it has continued to execute its omnichannel strategy through the rollout of facilitated meetings across key in-person events and the delivery of online networking programmes. Hyve held a total of eight (2021: one) tech-enabled programmes during the reporting period, including Curated Meetings at Spring Fair, Hosted Leaders at Bett, Hosted Retailers at Shoptalk, Shoptalk Fall Meetup, Fintech Meetup and three 121 Mining Investment programmes.
The integration of 121 Group, acquired in November 2021, is reported to be “progressing well” and the combined team is preparing for the first co-located Mining Indaba and 121 Mining Investment taking place in Cape Town in May this year.
In March, the Group acquired Fintech Meetup, a leading online event in a rapidly growing and key omnichannel target sector. Following its 2021 maiden edition, Fintech Meetup 2022 revenue more than doubled, the Group reported, and from 2023, Fintech Meetup will also be launching an in-person event, driven by customer demand, in addition to its market-leading virtual format.
Exit from the Russian market
As announced on 15 March 2022, the Board made the decision to formally exit the Russian market due to the ongoing conflict between Russia and Ukraine. This decision reflected the significant challenges from a moral, legal, compliance, and operational standpoint that would arise from continuing to operate in Russia, the Group noted and said steps had been taken with respect to considering various exit options.
Today, the Group announced that it has entered into a conditional agreement with Rise Expo Limited with respect to the sale of its Russian business for a maximum cash consideration of £72m, wholly structured as earn-out consideration payable over a ten-year period. In addition, the Group currently expects to have retained approximately £10m from the Russian business prior to the completion of the disposal. The Group said it expected to report a loss on disposal of its Russian business as a result of the transaction.
Following the disposal, the Group said it would carry out a review of its costs base to ensure that costs are aligned with the reduced size of the Group. Over the medium term the Group expects to return to the level of operating margins it had achieved prior to the Covid pandemic.
The Board said Hyve’s objective was of exiting the Russian market in a prompt manner with the prospect of value being returned to the company, while offering an outcome which provides some assurance and stability for those affected, including the staff of the Russian business.
Strong liquidity
The Group said it remains in a strong position to continue diversifying and evolving its portfolio of market-leading events.
Adjusted net debt as of 31 March 2022 was approximately £62m (2021 H1: £92m) and total available liquidity was c. £143m (2021 H1: £123m). The Group anticipates net debt for the year ending 30 September 2022 to be in the range of £80m-£100m, now adjusted for the disposal of the Russian business. This compares to previous guidance of £70m-£90m, which included the Russian business.
In October 2021, the Group secured further waivers in relation to its leverage and interest cover covenants, up to and including March 2023, with its minimum liquidity covenant of £40m in place until then. The next testing date for its covenants is at the end of June 2023, by which time the Group expects to have refinanced.
Mark Shashoua (pictured), CEO of Hyve Group plc said he was “delighted” to see Hyve return to a schedule of events comparable to pre-pandemic levels and was, “encouraged by the pent-up demand we continue to see among our customer communities. Shoptalk in particular has seen an incredible recovery and significantly outperformed the 2019 edition”.
The CEO added: “In addition to strong trading across our events, we have also made significant headway during the last six months towards our omnichannel evolution, with the acquisitions of 121 Group and Fintech Meetup. Both acquisitions increase our presence in the US and Western Europe as well as in sectors which we expect to benefit from ongoing digital transformation, while adding strong opportunity for future growth. In parallel, we have continued to roll out our facilitated meetings product across our portfolio, including Spring Fair and Bett, with further rollouts planned for the second half of the year.
“While we have not taken the decision to exit the Russian market lightly, the sale of the Russian business does accelerate our strategy to focus on omnichannel products in developed geographies. Russia has been a legacy of the company since 1991 and this exit creates value for shareholders and some security for the teams who have served the company so well for over 30 years.”
