3rd Nov 2008 07:00
Tarsus Group plc
3 November 2008
Tarsus Group plc
Interim Management Statement
Resilient performance, in line with management expectations
Tarsus ('Tarsus' or 'the Group') is today publishing its Interim Management Statement relating to the period from the publication of its interim results on 31 July 2008 to 31 October 2008.
Trading performance
Performance through the period has been in line with management's expectations. We are encouraged by the resilience being demonstrated by our international portfolio of brand leader events. The key features of the period were as follows.
August
Off-Price Show (US): produced profits a little ahead of our expectations and the comparable show in 2007, despite like-for-like revenues being 4% lower.
This was achieved through a combination of cost control and favourable currency movements. Bookings for the February 2009 event are tracking in line with comparable figures for the February 2008 show.
September
The September events performed very well and overall produced results ahead of our expectations.
1. Labelexpo Americas (US): the Group's biggest event of the year, produced like-for-like revenue growth of 8%. It was well attended and exhibitors enjoyed strong levels of business interest. Rebookings at this early stage stand at 80% for the event in 2010, thereby providing Tarsus with a high level of visibility.
2. Modamont (clothing accessories) (France): produced revenue growth of 5%, in line with our expectations.
3. Anti-Ageing (Germany): the first European edition of this event took place in Düsseldorf and encouragingly, for a first time event, was profitable.
October
IP Convergence Show (Paris): France's largest IT event produced like-for-like revenue growth of 8%.
Business Development
The Group is continuing to develop its emerging market portfolio of events and refocus resources towards faster growth markets.
The strategy has been to minimise risk to the Group by replicating our established exhibition brands into these new higher growth markets. Key business developments in the period were as follows:
1. Anti-Ageing (South America): we are launching the first event in Sao Paolo which is scheduled to take place in June 2009.
2. Aviation (China): the Group, through its joint venture with World Expo Shanghai Modern Group, has recently signed a memorandum of understanding to hold a new aviation event as part of the Government owned China International Industrial Fair. The launch exhibition is planned to take place annually in Shanghai starting in November 2009.
In line with this strategy, we have also continued to review our existing portfolio of events to ensure that the Group is best positioned to generate strong returns for its shareholders. During the period we disposed of our small European employment event, Employment Week, held annually in Brussels, for a small book profit.
Finance
The Group put its bank facilities out to competitive tender and has entered into new facilities, at competitive rates, to 30 September 2011.
The period saw the Group generate strong cash flows. The very significant strengthening of the US dollar in the past month has seen our sterling translated net debt remain steady. The Group's debt is currently split into US dollars, Euros and Sterling.
Change of Domicile
Tarsus recently announced proposals to introduce a new holding company into the Group structure. This company will be UK-listed, incorporated in Jersey and be tax resident in the Republic of Ireland.
The change in domicile, which will be implemented by way of a Scheme of Arrangement, is expected to have a positive impact on the earnings per share of Tarsus in the medium term. The change of domicile was approved by Tarsus shareholders on 31 October 2008 and the process is expected to be complete by early December this year.
Board
The Group is today pleased to announce the appointment of Ashley Milton as Group Finance Director and this is covered in a separate announcement.
We announced on 3 October that Virginia Kern would be stepping down from the main Board to focus all her time and attention on our Dubai based business rather than on administrative matters associated with the change in domicile.
Outlook
Contracted revenues currently stand at 90% of our internal projections for the full year. This compares with 85% at the same time in 2007 and illustrates the resilience of the Group's products and the importance to our customers of direct sales channels such as exhibitions and the internet.
Trading highlights for the Group for the remainder of 2008 include:
The business aviation show (MEBA) in Dubai later this month is expected to produce a strong result;
The first edition under our ownership of the India Label Show in Delhi in early December is expected to do likewise;
Bookings for the Anti-Ageing event in Las Vegas in mid-December are also currently tracking well ahead of the same period last year. However, we are about to enter the important last 6 week sales period for this event and we will have better visibility closer to its opening.
As we stated in the interim results, owing to its reliance on third and fourth quarter trading and a later booking cycle, we had factored cautious estimates into our full year sales projections for France. The two events in November - Heavent and Educatec - are expected to produce revenues lower than last year. In anticipation of these more difficult trading conditions in France, our excellent French management team has already taken action over the past 12 months to significantly reduce their head count. The French division continues to actively manage its cost base.
The Group's key brands are continuing to perform well and bookings for our large 2009 biennial exhibitions are strong.
Labelexpo returns to Europe in 2009 and space equivalent to the 2007 edition has already been contracted;
In Dubai the next edition of the Air show takes place in November. Demand remains extremely strong and well ahead of the last show cycle.
We are very pleased by the resilience being demonstrated by our international portfolio of brand leader events and our lack of dependence on the UK exhibitions market.
Our reliance on US dollar and Euro revenues will cushion us from an increasingly challenging business climate but we anticipate further progress over the 2008/2009 cycle.
Tarsus Group plc:
Douglas Emslie, Group Managing Director 020 8846 2700
Media:
Matthew Moth, Madano Partnership 020 7593 4000
Investors/Analysts:
Neville Harris, IRfocus 020 7593 4015
Stephen Scott, Scott Harris 020 7653 0030
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