ITE Group, the international exhibitions group, has announced interim results and the results of a strategy and business review.
Results are in line with market expectations, with revenues up nine per cent on the previous year (£69.6m, up from £63.6m) and like-for-like revenue and profit growth of two per cent - this is the first time since 2014 that ITE has reported growth on a like-for-like basis.
Following the strategic review, the Group has announced an investment of up to £20m in a three-year Transformation & Growth (TAG) Programme. This constitutes an evolution of the strategy – the Group will evolve from a decentralised, geographic-based business to one that is product-led, with strong regional platforms. There are three elements to the programme:
- Create a scalable platform: investment in five levers to drive organic growth
- Manage the portfolio: focus on core events where there is clear potential for growth
- Product-led acquisitions: in line with strict M&A criteria
The Three-Year TAG Programme will be funded by existing cash generation with anticipated strong ROI within three years. Dividend cover will be maintained at 2x throughout the investment period and net debt to EBITDA will be maintained within a target range of 1.5-2 times. The programme is designed to deliver mid-term sustainable high single digit revenue growth & high 20’s operating margins.
Highlights of the results include:
- Profit before tax down to £3.1m (from £10.6m in the same period in 2016), attributed to event timings, foreign exchange and restructing costs.
- Stablisation in Moscow but trading remains challenging in a number of regions.
- Reduced net debt from £59.1m at 30 September 2016 to £55.2m at 31 March 2017.
- Confidence that the Group will hit its full year target, with over 98 per cent of revenues for the 2017 financial year contracted.
Mark Shashoua, CEO of ITE Group, 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 £20m Transformation & 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.”