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16/08/2017
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World demand for corrugated boxes is expected to increase 3.7% per year through 2019, approaching 260 billion square meters. In developed countries, box demand tends to track overall economic growth and industrial production trends and, as a result, will continue to be relatively slow growing. In developing economies, especially those in Asia and the Africa/Mideast region.

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16/05/2017 11:30:00 Video: Investor's Q&A

ITE Group's Chief Executive Officer, Mark Shashoua, discusses today's strategy update announcement. 



16/05/2017 09:30:00 2017 Interim Results & Strategy Update Presentation

The presentation of our interim results and strategy update is now available for download.

Our interim results for the six months to 31 March 2017 were presented in London on Tuesday 16th May 2017 by Mark Shashoua (Chief Executive Officer) and Andrew Beach (Chief Financial Officer).

> View the webcast

ITE Group Interim Results Webcast


> Download the full presentation (2.5Mb PDF)

ITE Interim Results and Strategy Update 2017

16/05/2017 07:00:00 2017 Interim Results Announcement

Today, we announce our interim results for the six months to 31 March 2017, delivering a good performance in challenging conditions and launching a 3 year Transformation & Growth Programme (TAG).


ITE GROUP PLC
INTERIM RESULTS & STRATEGY UPDATE ANNOUNCEMENT

Good performance in challenging trading conditions
3 Year Transformation & Growth Programme (TAG) initiated
 
  Six months to
31 March 2017
Six months to
31 March 2016
     
Volume sales 325,200 m2 340,100 m2
     
Revenue £69.6m £63.6m
     
Pre-tax profit £3.1m £10.6m
     
Headline pre-tax profit1 £15.4m £19.0m
     
Diluted earnings per share 0.6p 2.8p
     
Headline diluted earnings per share2 3.9p 5.2p
     
Interim dividend per share 1.5p 1.5p
     
Net debt £55.2m £69.6m
 
Financial highlights
  • Results in line with management expectations
  • The first period of like-for-like3 growth after three years of difficult trading
  • Statutory revenue up to £69.6 million; statutory profit before tax down to £3.1 million due to event timings, foreign exchange and restructuring costs
  • Ongoing stabilisation in Moscow is encouraging but trading remains challenging in a number of regions
  • Continued strong cash generation; reduced net debt from £59.1 million at 30 September 2016 to £55.2 million at 31 March 2017
  • Interim dividend maintained
  • Improved level of bookings partly reflects new management sales initiatives
  • Confidence in full year outcome with over 98% of revenues for FY 2017 contracted

Strategy update
  • Comprehensive review of the strategy and business completed
  • 3 year Transformation & Growth Programme (“TAG”) to create a scalable platform and drive organic growth
  • Investment of up to £20 million to be funded by existing cash generation; anticipated strong ROI by 2020
  • Dividend cover maintained at 2x throughout investment period
 
Mark Shashoua, CEO of ITE Group plc, commented:
 
“I’m 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 £20 million 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 and shareholder value.”

 
 
1  Headline pre-tax profit is defined as profit before tax and adjusting items which include amortisation of acquired intangibles, impairment of goodwill, intangible assets and investments, profits or losses arising on disposal of Group undertakings, restructuring costs, transaction and integration costs on completed and pending acquisitions and disposals, tax on income from associates and joint ventures, gains or losses on the revaluation of deferred/contingent consideration and on equity option liabilities over non-controlling interests, and imputed interest charges on discounted equity option liabilities – see note 3 to the condensed consolidated financial statements for details.
2  Headline diluted earnings per share is calculated using profit attributable to shareholders before adjusting items – see notes 3 and 6 to the condensed consolidated financial statements for details.
3  Where used, like-for-like or underlying measures are stated on a constant currency basis adjusted to exclude acquisitions impacting results for the first time, event timing differences, biennial events and net finance costs

 
Enquiries:
 
Mark Shashoua, Chief Executive Officer
Andrew Beach, Chief Financial Officer
 
ITE Group plc 020 7596 5000
Charles Palmer/Emma Appleton FTI Consulting 020 3727 1021
Nick Westlake/Toby Adcock Numis 020 7260 1000

 
Executive summary

ITE has delivered a set of interim results which are assisted by the ongoing stabilisation of Moscow but reflect continued challenging trading conditions in some of the Group’s other markets.  Revenues of £69.6 million for the first six months are 9% higher than last year as a result of improved underlying trading (£1.4 million), foreign exchange (£5.8 million) and acquired events (£3.3 million), offset by the adverse impact from net biennial events (£2.3 million) and changes in event timings (£2.2 million). The improvement in underlying trading (£1.4 million) represents an increase of 2%.

Headline pre-tax profits of £15.4 million are 19% lower than the same period last year, yet up 2% on a like-for-like basis. The reduction is due in part to the non-recurrence of a £1.5 million foreign currency exchange gain in the comparative period, which has been replaced by a loss of £0.2 million in the current period. Underlying trading (£0.3 million), which includes the share of profits from associates and previously announced additional investment in overheads, foreign exchange (£0.2 million) and acquisitions (£0.5 million) have increased headline pre-tax profits, but are offset by the net impact from biennials (£0.8 million), timing changes (£1.8 million) and increased net finance costs (£0.3 million).

Reported profits before tax were £3.1 million (2016: £10.6 million). This is after including one-off restructuring costs of £2.3 million incurred in the first phase of the TAG Programme, announced today.

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 £0.9 million. Other events relating to recent acquisitions running for the first time under ITE ownership contributed revenues of £2.4 million, the majority of which relate to ABEC events in India.

The ongoing stabilisation of the trading environment in Moscow has enhanced performance in this significant part of our business, but this stabilisation 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 we have 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 our Russian exhibitions.


Strategic Review

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.

In recent years the Group pursued an acquisition-led strategy in order to diversify away from Russia and Central Asia which worked well when market conditions were buoyant, but as has been well documented, trading performance has deteriorated as macro-economic conditions have become more challenging. To execute its diversification strategy and in order to protect margins, investment was held back across the portfolio.

During the review process, management time has been spent on understanding where ITE’s strengths lie and how the business needs to evolve. The events industry has changed and continues to evolve faster than ever and that change is largely driven by the different demands of our customers (exhibitors and visitors). More than ever, there is a constant need for Return on Investment and Return on Time which are critical key metrics for our customers and also a need for new and engaging customer experience. Therefore running market leading events is absolutely paramount.

Following a thorough strategy and business review, the Group believes the future is to move decisively from being a decentralised, geographically structured business to one that is product-led with strong regional platforms.

Our vision is “to create the world’s leading portfolio of content-driven, must-attend events delivering an outstanding experience and ROI for our customers.” By putting exhibitors and visitors at the heart of everything we do, we plan to drive sustainable growth for our shareholders.

The Group’s focus on a product-led strategy will see ITE focus on events that are market leading or have a clear path to become number one in their sector. To create a best in class events business, the Group will invest in its people, systems and products in order to build a high quality portfolio and sustainable model for the long-term.

The Transformation & Growth Programme (“TAG”)

In order to drive the transition, ITE has initiated the TAG Programme which will see it invest up to £20 million over the next three years, creating a stronger, more scalable platform. The TAG Programme comprises of three pillars of strategic activity to drive revenue and accelerate growth as follows:

1) Create a Scalable Platform 

The TAG Programme will introduce transformational levers and investment will be spread across five areas to:
  • Implement best practice across the business
  • Build and maintain ‘fit for purpose’ IT infrastructure and systems
  • Invest in show operations
  • Drive a performance culture
  • Build capability and talent

As part of creating a scalable platform, the Group will change its operating model and transition from a model organised and managed by geography to a more centralised one that supports a product-led business. As part of TAG the Group will develop an ‘ITE way’ creating a blueprint to run events that is consistent globally.

2) Manage the Portfolio

The Group is implementing a more rigorous approach to allocation of capital. ITE currently runs 269 events and moving forward the Group will focus its capital resource on events that are market leading, or have the potential to be, delivering greater return on the Group’s investment and time. 

Following the review, the Group has deliberately segmented its business into Core and Non-Core, enabling management to increase its focus on products that present the greatest opportunities whilst reducing distraction from smaller shows.

The Core shows are of strategic importance to our future and include the Group’s largest shows, those with the greatest potential for growth and a number of smaller but strategically important shows. The Core shows currently represent 85% of revenue and 85% of profit. The Non-Core shows consist of smaller shows with less potential for growth.

As part of the Group’s strategy, its top priority will be to apply a full suite of transformational levers to its Core events which present the best long-term growth opportunities and to realise their full potential. This will include investing in content to drive great customer experience, retention and pricing.

The Group will continue to pro-actively review its portfolio on an ongoing basis.

3) Product-led Acquisitions

The Group will look to make selective product-led acquisitions to accelerate growth in line with strict M&A criteria. Each opportunity will be carefully reviewed but will not be limited to any particular geography or vertical as the Group aims to run the best shows in the best industries anywhere in the world.

TAG returns and funding

The Group has committed to investing up to £20 million over a three year period on the TAG Programme. This one-off cost will be split approximately one third in the current financial year, 2017, approximately 40% to 50% in 2018, and the remainder in 2019. This investment will cover both capital and operating expenditure. It is the intention to report one-off expenditure directly associated with the TAG Programme as an adjusting item, which will not affect headline results.

We anticipate a positive return on investment within three years and cash payback within four years.

Whilst we expect to continue to grow revenues, both headline PBT and EPS will be impacted in the current financial year – followed by anticipated flat or low growth in 2018 and anticipated double digit growth into 2019. This is due to the ongoing costs of running the new processes introduced across the programme, which will be reported within headline results.

The programme is designed to deliver mid-term sustainable high single digit revenue growth and high 20’s operating margins. 

We plan to fund the programme from cash generated by our operations. Throughout the duration of the programme, the Group expects to maintain its net debt to EBITDA within a target range of 1.5 to 2 times.

2017-2020 Dividend

ITE intends to maintain its dividend cover of two times earnings throughout its planned investment period. The Board has announced an interim dividend this year of 1.5p (2016: 1.5p).

More detail will be provided at the Group’s analyst presentation today and a recording of the event will be published in the investor relations section of ITE’s website.


Outlook

Whilst we have seen a recent recovery in Moscow, market forecasts predict a much lower rate of growth than in the past. Trading conditions in other regions in which the Group operates continue to be challenging. Group revenues booked for 2017 are £136 million (at current exchange rates) representing circa 98% of market expectations for the full year. On a like-for-like basis these revenues are circa 5% ahead of this time last year, with trading volumes circa 2% lower. This improvement partly reflects earlier bookings following investment in the new initiatives introduced by management.  With this good visibility on current year bookings the Board remains confident in the full year outcome and in the Group’s future prospects as it embarks on the next stage of its development.
 

Financial performance
 
Statutory results

Revenues for the first six months of the year were £69.6 million (2016: £63.6 million). The uplift in revenue includes the ABEC Acetech Bangalore and the Gehua Shanghai Hosiery events running for the first time under ITE’s ownership, a favourable foreign exchange impact partly offset by the negative timing and biennial pattern affecting the first six months. In addition, underlying trading (excluding currency benefit) is up £1.4m representing like-for-like growth of 2%. This is the first period of growth after three years of difficult trading.

The impact of foreign exchange rates (both on overseas costs incurred in the period and overseas costs recognised in this period relating to events in future periods) almost entirely offsets the favourable impact of foreign exchange rates on revenues meaning there is no favourable impact on profits from the movement in exchange rates since last year.  

The average exchange rates over the first six months of the year are:
 
  Six months ended 31 March 2017 Six months ended 31 March 2016 Movement
Russian ruble 75.6 103.2 +27%
Turkish lira 4.3 4.3
Indian rupee 83.3 98.2 +15%
 
Reported pre-tax profits were £3.1 million (2016: £10.6 million). This is after including one-off restructuring costs of £2.3 million incurred in the first phase of the TAG programme, announced today. It also includes a net charge of £0.8 million (2016: net credit of £1.3 million) on the revaluation of our liabilities relating to completed acquisitions, which in the current period principally relates to the unwinding of the discounting applied to our equity option liabilities (£1.6 million), offset by the net revaluation of equity option liabilities and deferred and contingent consideration payable (£0.8 million). The movements primarily relate to the options to acquire the 40% shareholding of ABEC we do not currently own and earn out obligations on the ABEC and Fasteners acquisitions completed in the prior year.
 
Reported diluted earnings per share for the first six months were 0.6p (2016: 2.8p). The decrease in earnings per share is due to the reduction in profits in the period and also an increase in the Group’s effective tax rate, which has increased due to an anticipated increase in withholding taxes on dividends from overseas entities as profits increase.

Headline results

In addition to the statutory results, headline results are presented, which are the statutory results after excluding a number of adjusting items, as the Board consider this to be the most appropriate way to measure the Group’s underlying performance. We also report a like-for-like measure, on a constant currency basis adjusted to exclude acquisitions impacting results for the first time, event timing differences, biennial events and net finance costs. In addition to providing a more comparable set of results year-on-year, this is also in line with similar adjusted measures used by our peer companies and therefore facilitates comparisons across the industry.

Headline pre-tax profits for the first six months of the year were £15.4 million (2016: £19.0 million), in part as a result of the movement from a foreign exchange gain of £1.5 million in 2016 to a loss of £0.2 million in the current period. Underlying trading increased (£0.3 million) and foreign exchange (£0.2 million) and the first time impact of acquisitions (£0.5 million) both contributed to an increase, but these were offset by net biennials (£0.8 million), timing changes (£1.8 million) and increased net finance costs (£0.3 million). On a like-for-like basis, headline pre-tax profits are up 2%.

Headline diluted earnings per share for the first six months were 3.9p (2016: 5.2p), reflecting the reduced headline earnings in the period and the increase in the Group’s effective tax rate, as detailed above.

The headline results are presented after excluding adjusting items consistent with those excluded in the year end annual report, but after also excluding restructuring costs. These are principally costs associated with designing and implementing the Group’s TAG Programme, announced with the interim results today. The costs incurred to date relate to the design and diagnostic phase of the transformation programme, and further costs are expected during the remainder of the current financial year and across the subsequent two years as we move into the implementation and deployment phase.

The restructuring costs have been presented separately in order to report what the Board consider to be the most appropriate measure of underlying performance of the Group and to provide additional information to users of the interim report on the scale and progress of the Group’s transformation programme.

The following table reconciles statutory profit/(loss) before tax to headline pre-tax profit:

  Six months to 31 March 2017 Six months to 31 March 2016 Year ended
30 September 2016
  £000 £000 £000
       
Profit/(loss) on ordinary activities before taxation 3,130 10,616 (4,095)
Operating items      
Amortisation of acquired intangible assets 7,832 7,603 15,468
Impairment of goodwill - 1,236 24,650
Impairment of investments in associates and joint ventures - - 1,859
Restructuring costs 2,347 - -
Transaction costs on completed and pending acquisitions 184 285 330
Profit on disposal of investments - (1,497) (1,498)
Tax on income from associates and joint ventures 1,140 1,029 1,078
Financing items      
Revaluation of liabilities on completed acquisitions 793 (316) (1,288)
  __________ __________ __________
Headline pre-tax profit 15,426 18,956 36,504
 
Amortisation of acquired intangible assets relates to the amortisation charge in respect of intangible assets acquired through business combinations. Restructuring costs are the costs incurred in designing and implementing the Group’s new strategy. Transaction costs on completed and pending acquisitions relates principally to costs incurred on the Gehua acquisition completed in December 2016. Tax on income from associates and joint ventures is an adjustment to ensure consistency with pre-tax operating profits.

Revaluation of liabilities on completed acquisitions include the losses from the revaluation of our equity options over non-controlling interests in our subsidiaries (charge of £0.5 million), principally in relation to ABEC, revaluations of deferred and contingent consideration (credit of £1.3 million), principally in relation to Fasteners, and the imputed interest charge on the unwinding of the discounting on the Group’s equity option liabilities (charge of £1.6 million).

Cash flows

The Group’s cash flow generated from operations over the first six months has improved to £21.8 million (2016: £18.0 million), and during the period £5.9 million has been applied to fund acquisitions and £5.4 million to dividends, resulting in the Group’s net debt standing at £55.2 million at 31 March 2017 (2016: £69.6 million). Consistent with the comparative period, cash conversion for the first half was over 100%. During the period the Group negotiated a relaxation of our leverage covenant with our banks for the final three quarters of the current financial year, ending 30 September 2017.
 

Trading highlights and review of operations
 
During the period the Group organised 122 events (2016: 134 events) which generated actual revenue growth of 9%. Like-for-like revenues were 2% higher than for the same period last year.

Actual volume sales for the period were 325,200 sqm (2016: 340,100 sqm), reflecting the weaker biennial pattern, timing changes and weaker trading in Central Asia, Turkey and India, partially offset by the stabilisation of trading conditions in Moscow. Volume sales were 5% lower on a like-for-like basis in comparison to the same period last year.

A summary of the Group’s revenue and gross profits for the period is set out below.
 
  Volume Sales
sqm’000
Revenue
£’m
Gross Profit
£’m
First half 2016 340 63.6 27.6
Non-annual 2016 (19) (2.9) (1.0)
Annually recurring 2016 321 60.7 26.6
Acquisitions 26 3.3 0.9
FX Translation - 5.8 1.5
Like-for-like change (16) 1.4 0.1
Annually recurring 2017 331 71.2 29.1
Timing differences (7) (2.2) (1.8)
Non-annual 2017 1 0.6 0.3
First half 2017 325 69.6 27.6
 
Russia
 
The economic situation in Moscow has continued to stabilise although the regional offices continue to experience tough trading conditions. Like-for-like volume sales in Moscow were 5% higher than the comparative period and across Russia were 1% higher than the comparative period.

Moscow’s largest event in the first half was the Moscow International Travel & Tourism (MITT) event, which increased volume sales to 13,700 sqm (2016: 11,700 sqm) reflecting the return of Turkish exhibitors and an increase in other international and domestic stands. 

Central Asia
 
Trading in Central Asia remains challenging with like-for-like volume sales for the first six months 22% lower than for the comparative period.

The largest part of the Group’s business in the region is Kazakhstan, which reported a 25% decrease in like-for-like volume sales. The largest event in the region is the Kazakhstan International Oil & Gas Exhibition (KIOGE), held in October 2016, which was smaller than this time last year at 3,700 sqm (2016: 5,800 sqm), reflecting the continued impact of the oil price and local currency devaluation on the region.
 
Eastern & Southern Europe
 
In Turkey, the Group has seen a reduction of 18% in like-for-like volumes due to the impact of regional unrest on the local economy resulting in a reduction in international interest in the region. The largest event taking place in the first half was the travel event EMITT, which achieved volumes of 23,300 sqm (2016: 26,700 sqm) against a worsening backdrop facing the Turkish tourist industry.

Ukraine grew like-for-like volumes by 37% but still represents less than 5% of Group profits.
 
Asia
 
Like-for-like volume sales for the first six months in Asia were 6% lower than for the comparative period.

The Group’s large construction events in India were held before demonetisation occurred in November, but some of our smaller Indian events have subsequently been affected, with a small number of cancellations and postponements. Acetech Mumbai is the largest construction event in India and remained wall-bound in its venue, although Acetech Delhi saw volumes decrease by 7% to 19,000 sqm from 20,400 sqm.
 
Rest of the World
 
Africa Oil Week ran in October 2016 and, as expected, was adversely affected by the difficult trading conditions affecting the oil industry. There was still excellent representation from all usual participating companies, although many companies sent fewer delegates with a resulting impact on revenues of over 20%. The Breakbulk Americas event ran in September 2016 (and will run again in October 2017) and so does not - and will not - feature in the 2017 results. Trading has held firm for the mid-market focused fashion event, MODA, held at the NEC in Birmingham and volumes were slightly down on prior year, selling 14,400 sqm (2016: 15,000 sqm).

April trading

April is the largest trading month for the Group. Mosbuild (which will be renamed WorldBuild Moscow next year) has benefitted from the stabilisation of the Moscow economy and the increased sales focus on this event, resulting in volume improvement from 31,200 sqm last year to 34,300 sqm this year. In India, as anticipated, the Security Safety show has seen withdrawals as the impact of de-monetisation affects our events. In Turkey, also as anticipated, the Beauty Eurasia event was significantly smaller due to the uncertainty created by the constitutional referendum particularly impacting our April events.

Set out below are the results for the Group’s principal events taking place in April 2017:

  2017 (sqm) 2016 (sqm) Variance (%)
Mosbuild (Russia) 34,300 31,200 +10%
TransRussia (Russia) 7,400 7,100 +4%
ExpoElectronica (Russia) 8,200 7,600 +8%
Breakbulk Europe (Belgium) 7,000 6,600 +6%
Beauty Eurasia (Turkey) 6,000 8,500 -29%
Secutech (India) 6,200 7,200 -14%
 

> download full statement (PDF)
> view the webcast of the presentation to investors
> Mark Shashoua Q&A session (video)
> download the results & strategy presentation (PDF)
 



 

04/04/2017 07:00:00 Trading Update

Today we are publishing a trading statement ahead of our interim results for the six months ended 31 March 2017. These results will be announced on Tuesday 16 May 2017.


Today we are publishing a trading statement ahead of our interim results for the six months ended 31 March 2017. These results will be announced on Tuesday 16 May 2017.


Trading
The Group’s performance for the six month period to 31 March 2017 is in line with management expectations.

Revenue for the period will be circa £69m (six months to 31 March 2016: £63.6m). On a likefor-like basis, revenue for the period is 2% ahead of the comparative period. The economic situation in Moscow is showing signs of improvement and this, along with early sales and marketing initiatives instigated by management, has helped to offset the continued weaker performance from Central Asia and the continuing challenging environments, particularly in Turkey – where international bookings are still challenged - and India – where we have had to cancel a number of smaller events.

Financial position
The Group’s balance sheet and operational cash flows remain sound, with net debt at circa £55m at 31 March 2017 (£70m at 31 March 2016).

Outlook
Trading conditions in a number of regions in which the Group operates continue to be challenging. Group revenues booked for FY 2017 are £128 million (at current exchange rates) representing circa 92% of market expectations for the full year. On a like-for-like basis these revenues are circa 7% ahead of this time last year, with trading volumes circa 1% ahead. This improvement partly reflects earlier rebooking following investment in the new initiatives introduced by management. The Group’s future revenue remains sensitive to the Ruble: Sterling exchange rate over the next six months.

Business and Strategy Review
The review of the business and strategy, announced in November 2016, continues to be on track. The results of the review will be presented at the Group’s Interim Results on 16 May 2017. Where used, like-for-like measures are stated on a constant currency basis adjusted to exclude acquisitions impacting results for the first time, event timing differences and biennial events.

Enquiries:
Mark Shashoua, Chief Executive Officer, ITE Group plc Tel: 020 7596 5000
Andrew Beach, Chief Financial Officer, ITE Group plc Tel: 020 7596 5000
Charles Palmer/Emma Appleton, FTI Consulting Tel: 020 3727 1000
Nick Westlake/Toby Adcock, Numis Securities Ltd Tel: 020 7260 1000

26/01/2017 07:00:00 ITE Group plc Trading Update

ITE Group plc is today publishing a Trading Update incorporating the Group’s first quarter trading period from 1 October 2016 to 31 December 2016.


26 January 2017

ITE Group plc

ITE Group plc
(“ITE” or the “Group”)
Trading Update


ITE Group plc is today publishing a Trading Update for the period from 1 October 2016 to the date of this announcement, incorporating the Group’s first quarter trading period from 1 October 2016 to 31 December 2016. This coincides with the Group’s Annual General Meeting which is being held at 12 noon today.

First Quarter Trading Update
The Group’s trading in this quarter was in line with management expectations.

Revenue for the three month period to 31 December 2016 was £35.0m (three months to 31 December 2015: £34.8m). On a like-for-like basis revenues for the quarter are, as expected, 4% lower than the comparative period reflecting continued weakness in Central Asia and the impact of lower oil prices on our Africa Oil Week event.

Financial Position
The Group’s balance sheet remains sound and we continue to see strong operational cash flows. Following the recent acquisition of a 70% stake in Shanghai Gehua, net debt stood at c£61m on 20 January 2017.


Outlook and Strategy Review Update
Trading conditions in a number of the regions in which we operate continue to be challenging. Further terrorist acts in Turkey are having a continued negative impact on international bookings on events in the region. Due to the uncertainty caused by the demonetisation of certain Indian banknotes, bookings on events in India have been negatively impacted, particularly in the real estate, fashion & accessories and construction sectors. As a result, it is possible that a number of smaller events in India will be postponed or cancelled.

Whilst recent forecasts for improved economic growth in some of our core markets, and recent exchange rate movements, will be favourable if sustained, as previously flagged, given the high visibility of our business model with events booked in advance, there will be a lag before these benefits are reflected in our reporting results.

At 20 January 2017, Group revenues booked for FY 2017 were £99 million (at current exchange rates) representing circa 72% of market expectations for the full year. On a like-for-like basis these revenues are circa 2% ahead of this time last year.

The review of the business and strategy, announced in November 2016, is well underway and on track.

The Board is comfortable with the market revenue expectations for the full year, and has taken the view that in order to improve sales performance next year and beyond, a number of new sales and marketing initiatives will be accelerated in advance of the review announcement. The cost of these planned investments will be partially recognised in the current financial year, resulting in a profit slightly below market expectations for the full year.

The results of the review will be announced alongside the Group’s Interim Results for the six months ending 31 March 2017 on Tuesday 16 May 2017.

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

Enquiries:

Mark Shashoua, Chief Executive Officer, ITE Group plc  Tel: 020 7596 5000
Andrew Beach, Chief Financial Officer, ITE Group plc  Tel: 020 7596 5000
Charles Palmer/Emma Appleton, FTI Consulting Tel: 020 3727 1000
Nick Westlake/Toby Adcock, Numis Securities Ltd  Tel: 020 7260 1000


This Interim Management Statement is prepared for and addressed only to the Group's shareholders as a whole and to no other person. The Group, its directors, employees, agents or advisers do not accept or assume responsibility to any other person to whom this Interim Management Statement is shown or into whose hands it may come and any such responsibility or liability is expressly disclaimed. Statements contained in this Interim Management Statement are based on the knowledge and information available to the Group's Directors at the date it was prepared and therefore the facts stated and views expressed may change after that date. Other than the information contained in this Interim Management Statement there have been no material events or transactions in the period from 31 December 2016 to 26 January 2017. By their nature, the statements concerning the risks and uncertainties facing the Group in this Interim Management Statement involve uncertainty since future events and circumstances can cause results and developments to differ materially from those anticipated. To the extent that this Interim Management Statement contains any statement dealing with any time after the date of its preparation such statement is merely predictive and speculative as it relates to events and circumstances which are yet to occur. The Group undertakes no obligation to update these forward-looking statements.

- Ends -

29/11/2016 09:30:00 2016 Preliminary Results Presentation

Our year-end results presentation is now available to view and download.


Our year-end results presentation is now available to view and download.


Click here to view

ITE Preliminary Results Presentation


The preliminary results announcement and statement is also available - click here to view.

29/11/2016 07:00:00 2016 Preliminary Results Announcement

Today, we've announced our preliminary results for the year ended 30 September 2016 which are inline with market expectations and reflect today's challenging trading environment.

 
Results reflect challenging market conditions, in line with market expectations
 
Financial highlights
 
Year to
30 September
2016
Year to
30 September
2015
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.”


 
Enquiries:
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.

Dividend

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.

Outlook

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
Chairman


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.
  £'m
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
(000)
Revenue
£'m
Gross Profit
£'m
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%.

Revenue
  2016
£'m
2015
£'m
%
change
%
change
like-for-like#
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.


Russia
(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.
 
Asia

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).
 
RoW

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.


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