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ITE Group PLC
Interim Results6 months ended 31st March 2005
ITE Group plc – Interim Results March 2005
1
• Founded in 1991
• Over 600 staff
• 14 Corporate offices
• Over 140 B2B trade exhibitions and events p.a.
• Events in 15 countries
• Emerging and developing markets focus
ITE In Brief
2
ITE Group plc – Interim highlights
• Turnover: £22.7 million (2004: £20.2 million) up 12%
• Headline profit before tax of £3.8 million (2004: £2.1million)
• Cash reserves: £38.0 million (2004: £29.4 million) up 30%
• Increased interim dividend of 0.9p per share (2004:0.55p)
• Up to £30m Share buy-back later this year
• Strong trading performance in ten leading H1events
- 14% growth in space sales and 17% growth in revenue
• Successful expansion of Mosbuild into new facility
• Strong forward sales for the second half of the year
3
ITE Group plc – 2005 Interim Financial Highlights
6 months Ended 6 months Ended
31 March 2005 31 March 2004
UnauditedUnaudited
Turnover up 12% £22.7m £20.2m
Gross Margin 38%36%
Gross Profit up 22% £8.6m£7.2m
Operating expenses (£6.0m)(£5.6m)
Contribution from associates £0.3m£0.1m
Net interest receipts £0.9m£0.4m
Headline profit before tax £3.8m£2.1m
Diluted Headline EPS 1.0p0.6p
Dividend per share 0.9p0.55p
* All figures above stated before amortisation
4
ITE Group plc – Cash Flow
6 months to 6 months to
31 March 200531 March 2004
UnauditedUnaudited
£m£m
Net Cash Flow from Operations 14.29.2
Net Interest & Dividends Received 1.30.3
Taxation (4.5)(2.0)
Capital Expenditure & Financial Investment 0.3(0.1)
Acquisitions / Disposals (2.3)1.8
Dividends Paid (4.6)(3.0)__________
4.46.2
Issue of Shares 0.11.0
__________
Increase in Cash 4.57.2
__________
5
ITE Group plc – Consolidated Balance Sheet
31 March 2005 31 March 2004Unaudited £’m Unaudited £’m
FIXED ASSETS• Goodwill 30.5 27.0• Tangible Assets 1.8 2.0• Associates & Investments 1.2 1.1
_____ _____33.5
30.1
CURRENT ASSETS• Debtors due within 1 year 22.6 16.9
due after 1 year 2.7 3.0• Cash 38.0 29.4
_____ _____63.3
49.3
CREDITORS• Deferred Revenue & Creditors 49.3 38.7• Deferred Consideration & Provisions 1.5 0.9• Proposed Dividend 2.6 1.5
_____ _____53.4
41.1
_____ _____NET ASSETS 43.4 38.3
_____ _____
ITE Group plc – Sales Analysis
6
Square metres000’s
Revenue
£m
Gross profits
£m
First Half 2004
85.3 20.2 7.2
Timing differences
(6.7) (0.9) (0.4)
Core growth
7.8 1.2 1.0
New events launched 9.1 1.8 0.1
Acquisitions 6.5 1.6 0.8
Non - recurring
(5.0) (1.2) (0.1)
First half 2005
97.0 22.7 8.6
ITE Group plc - Currency Exposure
7
• ITE revalues monetary assets monthly
Exchange Rates Unhedged at Forward 30 Sept ‘04 31 Mar ‘05 31 Mar ‘05 Cover
Euro 1.46 1.46 € - €16m @ 1.45
US Dollar 1.80 1.88 $2.7m $ -
Other £2.1m* £ -
* Sterling equivalent• 2005 Proforma sales analysis
Proforma Av. Sales Av. Sales
2005 sales % of Revenue Rate HI 2005 Rate 2004
Euro based £42.5m 59% 1.47 1.44
US Dollar based £24m 33% 1.85 1.69
Other £6m 8%
8
ITE Group plc - IFRS accounting
Timetable for IFRS accounting
• ITE will adopt IFRS Accounting for 2005 – 06
• IFRS Reconciliation for Financial Year 2005 Report
Main changes for ITE will be
•IFRS2 Share based payments to be costed by fair value at date of grant
•IFRS 3 Acquisitions use fair value allocated over identifiable assets
•IFRS 3 Goodwill not amortised but tested for impairment
•IAS 14 More detailed presentation on segmental reporting
•IAS 39 Derivatives – hedge accounting
9
ITE Group plc – Top Ten H1 Events
Area (m2) Area (m2)
2004/2005 2003/2004
Moscow International Travel and Tourism Russia 19,300 17,000
Kazakhstan Oil & Gas Kazakhstan 7,400 6,200
Ingredients Russia Russia 5,500 4,700
MODA UK Spring UK 12,100 10,300
TransRussia Russia 4,600 3,100
Moscow International Sports Show Russia 3,300 4,000
Kievbuild Ukraine 5,000 4,100
Public Health Ukraine 3,500 n.a.
Informatica Technology (ITC) Ukraine 3,000 n.a.
Worldfood Ukraine Ukraine 2,400 2,800
0
5000
10000
15000
20000
25000
2000/ 01 2001/ 02 2002/ 03 2003/ 04 2004/ 05
Financial Year
Met
res
sq
10
ITE Group plc - Top 5 ranked by gross profit
MITT
Moda UK
TransRussia
KIOGE
Ingredients Russia
11
ITE Group plc –Share buyback
5
10
15
20
25
30
20
01
20
02
Cash Balances (£M)
16.3
40
35
20
03
20
04
Inte
rim
20
05
17.7
22.1
33.5
38.0
• Group’s debt capacity circa £50m
• Acquisition programme can be accommodated
• Post tax yield on cash 3.5%
• Earnings accretive – circa 0.3p per share
12
ITE Group plc – Trading Update
Sales at 13th May 2005
• £64.1m of sales booked for full year.(£53. 3m sales booked at the same time last year).
• 88% of market expectations for 2004/05 sales now booked (92% same time last year)
• Like for like forward bookings for the remainder of 2005 and for FY 2006 both show improvement of 10%+ on last year’s equivalent figures
13
Trading Update & Developments
• Moscow International Travel – space up 13% / revenue up 6%
• TransRussia rebound from 3,100m² to 4,600m²
• Competitive launch against Moscow Sports
• Successful expansion of Mosbuild into Crocus in April
• Crocus expands space to 90,000m² gross for 2006
• Location issue – Autosalon 2006
ITE Group plc – RussiaMoscow, St Petersburg
14
Trading Update & Developments
• Kazakhstan Oil & Gas event
• - Exhibition expands into new pavilion
• - Revenue up by 10% overall
• 9 successful new launches in Caspian Region
• Baku Oil & Gas acquisition well placed
• Strong growth prospects in Uzbekistan
ITE Group plc - Central AsiaKazakhstan, Azerbaijan, Uzbekistan
15
Trading Update & Developments
• Acquired Informatica Technology & Public Health events grow 20% (m²)
• Kievbuild growth 20% (m²)
• Political instability affects Worldfood Ukraine
• ITF: • Successful Auto Shows
• Re – focussing of textile clothing show
• New initiative for furnishing event
ITE Group plc - Ukraine, Turkey
16
Trading Update & Developments
• Successful Spring Moda UK Event up 16% in sales (m²)
• Fashion Extras title acquired – exhibition potential
• RAS Publications integration – revenue targets achieved
ITE Group plc - UK
• More of the same…primary focus on organic growth in core markets
• Excellent growth prospects in existing markets
• Vigilence in existing key markets – no complacency
• Close co-operation with venues in all markets
• More m2 on existing events
• Active new launch program – New themes, established markets – Established themes, new markets
• Opportunistic bolt-on acquisitions - Sector or market fit
ITE Group plc - Strategy
17
18
Appendices
I Shareholder structure
II Gross profit by location
III Gross profit by industry
IV ITE’s Local infrastructure strength
V Venue prepayments and loans
VI International venue space
VII Cash profile of Business
VIII Cost of exhibiting
ITE Group plc – Interim Results 31 March 2005
19
ITE Group plc – Shareholder Structure May 2005 Appendix I
% No of Shares
(millions)
• Aberforth 12.4 35.7• Schroders 12.2 35.3 • Veronis Suhler Stevenson 10.7 30.9• Fidelity 7.5 21.7 • Ceyda Erem 6.8 19.5• Edward Strachan 5.0 14.4• Merrill Lynch 4.4 12.5 • ESOT 3.9 11.1• Scottish Widows 3.8 11.0• Barclays Global Investors 3.3 9.6 • UBS Global 3.2 9.3• Legal & General 2.7 7.8• Threadneedle 2.1 6.0• JP Morgan Fleming 2.0 5.9• Old Mutual 2.0 5.7• Other Management 0.1 0.2• Other Institutions and individuals 17.9 52.2
_____ _____Total shares in issue 100% 288.8
_____ _____
Options in the money at 93.5 pence 17.3
Options on issue not in the money NB: Management including ESOT 15.8% Management including options in the money 20.4%
20
ITE Group plc – Geographic Spread Appendix II2005 Pro-forma Gross Profit by Geographic Location of Event
2005 (2004) Gross Profit by Region
Western Europe9% (8%) Southern & Eastern
Europe4% (3%)
Central Asia12% (13%)
Russia72% (76%)
Rest of the World3% (0.2%)
21
ITE Group plc – By Industry Appendix III2005 Pro-forma Gross Profit by Industry Sector
2005 (2004) Gross Profit by Sector
Travel
12% (13%)
Food
11% (12%)
Other
6% (8%)
Oil & Gas
16% (9%)
Motor & Transport
7% (8%)
Fashion
5% (5%)IT & Telecoms
6% (5%)
Construction
37% (40%)
ITE Group plc - ITE’s Local Office Infrastructure Strength Appendix IV
Office Country Staff Events
2004
Moscow Russia 119 36
St Petersburg Russia 60 12
Kyiv Ukraine 66 22
Almaty
Astana Kazakstan 81 34
Atyrau
Tbilisi Georgia 6 4
Tashkent Uzbekistan 25 8
Baku Azerbaijan 21 10
Istanbul Turkey 34 4
Johannesburg S. Africa 10 2
Hamburg Germany 26 na
Huddersfield UK 32 2
London / ROW 105 6
Total 585 140
ITF (50% owned) Turkey 93 12
22
23
Loans and Agreement Commitments
Dates £m
Venue Related
Moscow to 2010 -
St Petersburg to 2012 1.8
Almaty to 2010 0.9
Uzbekistan to 2011 0.1
Kyiv to 2011 1.4
Istanbul to 2025 -
Other 0.1
_____4.3
_____Other Loans
Prague 0.7
_____
5.0_____
ITE Group plc - Venue Prepayments & Loans Appendix V
24
ITE Group plc – International venue space Appendix VI
Gross m2 Gross m2 Gross m2 Gross m2
Expocentre 70,000 NEC 200,000 Nord 191,000 Cologne 285,000Crocus* 90,000 EXCEL 60,000 Versaille 151,000 Frankfurt 324,000Gostigny Dvor 5,000 ECO 100,000 CNIT 5,000 Berlin 160,000Olympiski 11,000 Louvre 19,000 Hanover 498,000VVC 20,000 Dusseldorf 233,000WTC 2,000 Nuvemburg 148,000
Munich 155,000198,000 360,000 366,000 1,803,000
* Projected for 2006 - 60,000m2 curently under construction
Moscow U.K. Paris Germany
ITE Group plc – Cash Profile of Business Appendix VIIFor a typical trade exhibition
Revenue
• 20% 12 months out• 40% 6-7 months out• 40% 2-3 months out
Costs
• 10% Staff throughout• 10% Promotion throughout• 25% Venue 2 months out• 10% Stand construction 0 months out• 45% Gross Profit
Exhibition 5000 m2 - £1M Revenue
0
100
200
300
400
500
600
-12 -11 -10 -9 -8 -7 -6 -5 -4 -3 -2 -1 0
Months to opening of exhibition
£'000s
Cumulative Cashflow
25
26
ITE Group plc – Cost of exhibiting Appendix VIII