23rd May 2005 07:01
ITE Group PLC23 May 2005 23 May 2005 ITE GROUP PLC INTERIM RESULTS ANNOUNCEMENT ITE Group plc, the international exhibitions specialist, today announces interimresults for the six months ended 31 March 2005 and the proposed return of up to£30 million to shareholders via a share buy-back plan. Highlights: • Turnover: £22.7 million (2004: £20.2 million) up 12% • Headline profit before tax of £3.8 million (2004: £2.1 million) • Reported profit before tax £2.2 million (2004: £0.8 million) • Cash reserves: £38.0 million (2004: £29.4 million) up 30% • Increased interim dividend of 0.9p per share (2004: 0.55p) • Core markets performing well with strong trading performance from ten leading events • Strong forward sales for the second half of financial year • Proposed return of up to £30 million of cash to shareholders through a share buy back Commenting on the results, Iain Paterson, Chairman, said: "We are pleased to deliver another good trading result for the half-year, withstrong operating performance from the growth of our existing events, newlaunches and acquisitions. The Board has determined the present level of cashbalances is surplus to requirements and intends to buy back and cancel up to £30million of its own shares. The Board has approved an increase in the interimdividend following the re-basing of last year's final dividend." - Ends - Enquiries:Ian Tomkins / Russell Taylor 020 7596 5000 ITE Group plcBridget Fury / David Simonson 020 7653 6620Merlin Interim statement ITE has delivered a strong trading result for the first six months with turnoverof £22.7m (2004: £20.2m) and Headline profit before tax of £3.8m (2004: £2.1m).Reported pre-tax profits for the six months were £2.2m (2004: £0.8m). Cash flow remains strong and our core markets continue to perform well. Netcash expended on acquisitions and venue loans for the 6 month period amounted to£3.0m. DividendThe Board has approved an interim dividend of 0.9p per share (2004 - 0.55p). Theincrease in the interim dividend follows the re-basing of last year's finaldividend. The Board aims to increase future dividends progressively in line withearnings. This dividend will be paid on 23 June 2005 to shareholders on theregister on 3 June. Board and ManagementAs previously announced Ross Stobie, General Manager of our Moscow office, willbe resigning from his current role and from the ITE Board on 9 August 2005. TheBoard extends its thanks to Ross for his contribution over the last three yearsand for his part in steering the Moscow operation through a significant periodof growth and expansion. A new General Manager has been appointed and will bejoining the Group in June. Share buy-backThe Board sees significant opportunities in the Group's markets and intends topursue its growth strategy both organically and through acquisition. Inaddition, having regard to the Group's strong cash flow and potential debtcapacity the Board has determined that the present level of cash balances aresurplus to its requirements. At 31 March 2005 the Group has £38.0m in cash, anincrease of £8.6m over the same time last year. The Board intends to buy backand cancel up to £30m of its own shares and has today sent a circular toshareholders requesting their approval for the Company to cancel its sharepremium account and for a new authority to make market purchases of its ownshares. Subject to these approvals and to Court approval being granted for thecancellation of its share premium, the Company will issue a tender document fora share buy-back in July. Financial Performance Turnover for the first six months of the year was £22.7m (2003: £20.2m). Grossprofits of £8.6m (2004: £7.2m) were earned at a margin of 38% (2004: 36%) onrevenue. £1.6m of the increase in revenue and £0.8m of the increase in grossprofit is attributable to acquisitions made in 2004. Operating profit for the first six months was £1.0m (2004: £0.4m). Operatingcosts before amortisation charges were £6.0m (2004: £5.6m) and included foreignexchange losses of £0.4m (2004: £1.0m). The increase in underlying costs waslargely attributable to higher staff costs, including the costs of expensingPerformance Share Plans and the additional overhead of the RAS Publishingacquisition. Net interest receipts of £0.9m (2004: £0.4m) were earned on higher average cashbalances and better interest rates. ITE's share of associate profits was £0.3m(2004: £0.1m). Profit before tax of £2.2m (2004: £0.8m) represents an improvement of £1.4m overthe comparable result for the same period last year. Set out below is an analysis of the Group's sales and profits for the first sixmonths: Square metres Revenue Gross profits 000's £m. £m.First Half 2004 85.3 20.2 7.2Timing differences (6.7) (0.9) (0.4)Core growth 7.8 1.2 1.0New events launched 9.1 1.8 0.1Acquisitions 6.5 1.6 0.8Non - recurring (5.0) (1.2) (0.1)First half 2005 97.0 22.7 8.6 ------ ------ ----- After making adjustment for events which have changed datelines and excludingthe effect of acquisitions the Group's 'like for like' revenues increased by 9%for the period and its 'like for like' gross profits increased from £7.2m to£8.2m. Average yields per square metre sold fell marginally as they wereaffected by new launch activity and by the weaker US Dollar. Trading highlights During the period to 31 March 2005, ITE organised 69 events (2004: 58 events).The following events were the top ten contributors to interim gross profits: Area (m2) Area (m2) 2004/2005 2003/2004 Moscow International Travel and Tourism Russia Travel 19,300 17,000Kazakhstan Oil & Gas Kazakhstan Oil & Gas 7,400 6,200Ingredients Russia Russia Food 5,500 4,700MODA UK Spring UK Fashion 12,100 10,300TransRussia Russia Motor/Transport 4,600 3,100 Moscow International Sports Show Russia Other 3,300 4,000Kievbuild Ukraine Construction 5,000 4,100Public Health Ukraine Other 3,500 n.a.Informatica Technology (ITC) Ukraine IT & Telecoms 3,000 n.a.Worldfood Ukraine Ukraine Food 2,400 2,800 Public Health and Informatica Technology represent acquisitions made in 2004.Overall growth in the eight other 'top ten' events for the period was 14% interms of space sales and 17% in terms of revenue. RussiaThe Moscow team organised 14 events in the first half of the year. The mostsignificant events were the Moscow International Travel Show, IngredientsRussia, TransRussia and the Moscow International Sports event. The Travel showgrew by 13% in space sales, but less in revenue while Ingredients Russia's 16%growth in space sales was translated into 20% revenue growth. TransRussia,affected last year by competitor activity rebounded strongly and the 10thedition of the TransRussia event was the most successful ever in revenue, space,visitor attendance and profit terms. The Moscow Sports show reduced in size thisyear as the market was disturbed by a new competitive launch. The St Petersburg office organised 3 events in the first six months each ofwhich performed to expectations. Central AsiaThe annual Kazakhstan Oil and Gas exhibition grew in size by 20%, making use ofthe new exhibition pavilion built in Almaty with assistance from ITE. Theconference which is organised concurrently with the exhibition grew modestly andcontributed to an overall increase in revenues from the whole event of 10%.Overall there were 22 events (including 9 new launches) organised by the teamsin Kazakhstan, Uzbekistan and Azerbaijan over the period. Two promising events,Worldfood Kazakhstan and Atyrau Build both showed good growth on the previouseditions. UkraineThe Kyiv team organised 14 events over the six month period including thesuccessful integration of the two acquisitions in the Health and Informationtechnology sectors. Both new shows benefited from a move to the IEC venue, withwhich ITE has a close co-operation, and overall realised a 20% increase on the2004 pre-acquisition events. Worldfood Kiev, held in November 2004 partiallysuffered from political events at the time. Following the resolution ofpolitical events Kievbuild, held in February 2005, enjoyed excellent support anddelivered strong growth. TurkeyITF, our 50% associate operating in Istanbul delivered improved profits over thefirst six months with good contribution from the two automotive shows. Thesecond half has begun well with a very successful re-branding and re-launchinitiative on the Furniture event. UKThe MODA UK fashion exhibition in Birmingham continued its strong performancewith another 16% growth in space sales, further consolidating its market leadingposition in the sector. The RAS Publication acquisition has integrated well withthe exhibition team and achieved its revenue expectations. During the period RASacquired the title to a new magazine, Fashion Extras, focussing on theaccessories market. OutlookSince 31 March the Group has organised some of its other major exhibitions. The2005 edition of MosBuild expanded into the new Crocus exhibition facility inMoscow and was an unprecedented success. The additional exhibition space madeavailable facilitated an increase in size of the overall MosBuild Building andConstruction event (including Windows and Doors) from last year's 44,600 netsquare metres to over 54,000 net square metres this year. The MoscowInternational Boat Show, Moscow International Protection and Security Show andExpoelectronica all substantially improved their performances with overallgrowth of 14% in square metres sold. At 13 May 2005 £64.1m of revenue (14 May 2004: £53.3m) has been contracted forthe 2005 financial year. The World Petroleum Congress, which ITE is organisingand which is due to take place in September 2005, has to date achieved its salestargets and should make a significant additional contribution to this financialyear. Among our remaining top ten events still to take place are the MoscowInternational Oil and Gas Exhibition in June, the Moscow International MotorShow taking place in August, World Food Moscow and Baltic Building Week bothtaking place in September and forward sales on each event are well advanced. TheBoard remains positive with respect to the prospects for the remainder of theyear. Ian Tomkins Iain PatersonChief Executive Officer Chairman Consolidated Profit and Loss Account Six months to Six months to Year ended 30 31 March 2005 31 March 2004 September 2004 Notes Unaudited Unaudited Audited £000 £000 £000Turnover 22,666 20,153 60,750Cost of sales (14,116) (12,938) (33,542) __________ __________ __________Gross profit 8,550 7,215 27,208 ----------- --------- ---------Net operating expensesbefore goodwill (5,993) (5,566) (10,883)amortisation Goodwill amortisation (1,535) (1,274) (2,528) ---------. --------- ---------Total operating expenses (7,528) (6,840) (13,411) __________ __________ __________Operating profit 1,022 375 13,797 ---------- ---------- ---------Share of associates'operating profitbefore goodwill 370 134 676amortisation Goodwill amortisation (76) (76) (221) --------- --------- ---------Share of associates'operating profit 294 58 455Profit on disposal ofgroup undertakings - - 323 __________ __________ __________ Profit on ordinaryactivities before interest 1,316 433 14,575Investment income 1,098 365 1,148Interest payable (187) (2) (16) __________ __________ __________Profit on ordinary activities before taxation 2,227 796 15,707Tax on profit on ordinaryactivities (1,077) (528) (4,955) __________ __________ __________Profit on ordinaryactivities after taxation 1,150 268 10,752Minority interests - (1) (31) __________ __________ __________Profit for thefinancial period 1,150 267 10,721Dividends (2,544) (1,448) (5,984) __________ __________ __________Retained(loss)/earnings (1,394) (1,181) 4,737 ========== ========== ========== Earnings per shareBasic 3 0.4p 0.1p 3.9pDiluted 3 0.4p 0.1p 3.8pHeadline diluted 3 1.0p 0.6p 4.7p __________ __________ __________ All results derived from the continuing operations of the Group. Consolidated Balance Sheet 31 March 2005 31 March 2004 30 September 2004 Notes Unaudited Unaudited Audited £000 £000 £000Fixed assetsGoodwill 30,459 26,961 29,348Tangible assets 1,808 2,007 1,862Associates 1,161 1,075 1,377Other investments 85 56 74 ___________ ___________ ___________ 33,513 30,099 32,661Current assetsDebtors due within oneyear 4 22,643 16,942 23,426Debtors due after oneyear 2,699 2,966 4,060Cash at bank and inhand 38,009 29,356 33,546 ___________ ___________ ___________ 63,351 49,264 61,032 Creditors: amounts falling due within oneyear 4 (51,953) (40,118) (47,773) ___________ ___________ ___________Net current assets 11,398 9,146 13,259Total assets lesscurrent liabilities 44,911 39,245 45,920Provisions forliabilities and charges (1,499) (940) (1,498) ___________ ___________ ___________Net assets 43,412 38,305 44,422 ============= ============= ============= Capital and reservesCalled-up share capital 2,887 2,851 2,852Share premium account 29,877 29,018 29,036Merger reserve 2,746 2,746 2,746ESOT reserve (3,580) (2,303) (2,792)Option reserve - 23 23Profit and loss account 11,254 5,973 12,329 ___________ ___________ ___________Equity shareholders'funds 43,184 38,308 44,194 =========== =========== =========== Minority interests 228 (3) 228 ___________ ___________ ___________Total capital employed 43,412 38,305 44,422 ============= ============= ============ Company Balance Sheet 31 March 31 March 30 September 2005 2004 2004 Unaudited Unaudited Audited £000 £000 £000Fixed assetsInvestments 1,034 1,022 1,024 ___________ ___________ ___________ 1,034 1,022 1,024Current assetsDebtors due within oneyear 675 508 653Debtors due after oneyear 13,866 30,404 19,270Cash at bank and inhand 25,789 5,024 21,188 ___________ ___________ ___________ 40,330 35,936 41,111 Creditors: amountsfalling due within oneyear (2,866) (1,639) (4,889) ___________ ___________ ___________Net current assets 37,464 34,297 36,222 ___________ ___________ ___________Total assets lesscurrent liabilities 38,498 35,319 37,246 ___________ ___________ ___________Net assets 38,498 35,319 37,246 =========== =========== =========== Capital and reservesCalled-up share capital 2,887 2,851 2,852Share premium account 29,877 29,018 29,036Merger reserve 2,746 2,746 2,746ESOT reserve (3,580) (2,303) (2,792)Option reserve - 23 23Profit and loss account 6,568 2,984 5,381 ___________ ___________ ___________Equity shareholders'funds 38,498 35,319 37,246 =========== =========== =========== Consolidated Cash Flow Statement Note Six months to Six months to Year ended 30 31 March 2005 31 March 2004 September 2004 Unaudited Unaudited Audited £000 £000 £000Net cash inflowfrom operatingactivities 5 14,202 9,196 21,754Dividendsreceived fromassociates 437 - 172Returns on investmentsand servicingof finance 911 345 1,132Taxation (4,510) (2,017) (3,363)Capital expenditureand financialinvestment 258 (73) (2,858)Acquisitionsand disposals (2,347) 1,818 (1,345)Equity dividendspaid (4,560) (3,012) (4,545) __________ __________ __________Cash inflowbefore managementof liquid resourcesand financing 4,391 6,257 10,947Management ofliquid resources (2,500) (5,049) (19,336)Financing 72 995 495 __________ __________ __________Increase/(decrease)in cashin the period 1,963 2,203 (7,894) =========== =========== =========== Analysis of net funds 30 September 31 March 2004 Cash flow 2005 £000 £000 £000 Cash at bank and in hand 9,046 1,963 11,009 __________ __________ __________Net funds 9,046 1,963 11,009 Cash held on deposit 24,500 2,500 27,000 __________ __________ __________Cash shown on balance sheet 33,546 4,463 38,009 ========== ========== ========== Notes 1. The interim results have been prepared on the historical cost basis, are unaudited and do not constitute statutory accounts within the meaning of Section 240 of the Companies Act 1985. The interim results are prepared on the basis of accounting policies set out in the annual financial statements of the Group for the year ended 30 September 2004. These interim results were approved by the Board on 20 May 2005 and copies of this document are being sent to shareholders. Further copies are available from the Company's registered office. 2. The results for the year ended 30 September 2004 have been extracted from the statutory accounts, which have been reported on by the Group's auditors and have been delivered to the Registrar of Companies. The auditors' report was unqualified and did not contain any statement under section 237 (2) or (3) of the Companies Act 1985. 3. The calculations of earnings per share are based on the following results and numbers of shares. Headline diluted Basic and diluted 2005 2004 2005 2004 £000 £000 £000 £000 Profit for thefinancial period 1,150 267 1,150 267Amortisation of goodwill 1,611 1,350 - - ________ ________ ________ ________ 2,761 1,617 1,150 267 ======== ========= ======== ======== 2005 2004 Number of Number of shares ('000) shares ('000)Weighted average number ofshares:For basic earnings per share 276,479 273,716Exercise of share options 8,762 7,059 ___________ ___________For diluted earnings per share 285,241 280,775 =========== ========== Headline diluted earnings per share is intended to provide a consistent measure of group earnings on a year on year basis. Headline diluted earnings per share is calculated using profit for the financial year before amortisation and impairment of goodwill and profits or losses arising on disposal of group undertakings. 4. Debtors include trade debtors of £14.6m (31 March 2004: £11.5m; 30 September 2004: £19.3m) . Creditors: amounts falling due within one year include deferred income of £43.5m (31 March 2004: £32.9m; 30 September 2004: £31.1m). 5. Reconciliation of operating profit to operating cash flows Six months to Six months to Year ended 30 31 March 2005 31 March 2004 September 2004 Unaudited Unaudited Audited £000 £000 £000 Operating profit 1,022 375 13,797Depreciationcharges 224 232 471Amortisation 1,535 1,274 2,528(Profit)/losson sale offixed assets - (6) 103Decrease/(increase)in debtors 1,569 1,880 (2,638)Increase increditors 9,330 5,604 6,546Increase/(decrease)in provisions 522 (163) 947 __________ __________ __________Net cash inflowfrom operatingactivities 14,202 9,196 21,754 ============ ============ ============ 6. Reconciliation of Headline profit before taxation to Profit on ordinary activities before taxation Six months to Six months to Year ended 30 31 March 2005 31 March 2004 September 2004 Unaudited Unaudited Audited £000 £000 £000 Profit on ordinaryactivities beforetaxation 2,227 796 15,707Amortisationof goodwill andtrade investments(including associates) 1,611 1,350 2,749Loss on disposalof subsidiaryundertakings - - (323) __________ __________ __________Headline profitbefore taxation 3,838 2,146 18,133 ============ ============ ============ Financial Calendar Interim dividend Record date 3 June 2005 Payment date 23 June 2005 Final dividend Record date January 2006 Payment date March 2006 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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