Interim Results

16 May 2011

ITE GROUP PLC

INTERIM RESULTS ANNOUNCEMENT

Return to growth

·; Return of economic growth in the Group's core markets

·; Good organic growth - like-for-like volume sales up 13%

·; Two acquisitions completed in Russia - expanding market and sector coverage

·; Strong cash generation in year; and net cash as at 31st March of £15.6m

·; £137.1m of revenue booked for the full year - (£98.1m this time last year)

·; Dividend increased to 1.9 p (2010: 1.7p)

Russell Taylor, CEO of ITE Group plc, commented:

"ITE has delivered a good performance during the first half of the year as the recovery seen last year turned to sustained growth in our core markets. This momentum has been complemented by the initial contribution from the recently acquired businesses as well as the organic development of our exhibition portfolio. The acquisitions of MVK and Krasnodar Expo have strengthened and diversified our Russian business considerably, adding 40 new exhibitions. The events that have run to date have performed in line with our expectations and the integration is going well.

 The Moscow market is now trading well and our regional markets are steadily improving. As at 12 May 2011 the Group has booked revenues for the current financial year of £137.1m (2010: £98.1m), which includes sales from newly acquired business as well as organic growth. On a like-for-like basis volume sales are more than 10% ahead of this time last year. The financial position of the Group remains strong with net cash of £13.4m at 12 May 2011. Good trading conditions in our markets allied with their longer term potential give the Board confidence in ITE's future prospects".

* Headline pre-tax profit is defined as profit before tax, excluding amortisation of acquired intangibles, impairment of goodwill, profits or losses on disposal of Group undertakings, revaluation of financial liabilities in relation to minority put options and direct costs on completed and pending acquisitions & disposals - see note 5 for details.

** Headline diluted earnings per share is calculated using profit before amortisation of acquired intangibles, impairment of goodwill, profits or losses on disposal of Group undertakings, revaluation of financial liabilities in relation to minority put options and direct costs on completed and pending acquisitions & disposals - see note 8 for details.

Enquiries:

Financial performance

The results for the first six months of the financial year reflect a return to growth in the Group's core markets together with a first-time contribution from newly acquired businesses. Revenues increased to £53.0m from £39.2m and gross profits improved to £20.6m from £17.1m. Headline profits before tax for the first six months of the year were £9.1m (2010: £6.4m) and benefitted from less foreign exchange volatility this year. Headline profits before exchange differences and tax for the first six months were £9.4m (2010: £8.5m).

The Group's portfolio of exhibitions delivered organic growth of 21% in revenues and 11% in gross profits over the first six months; the contribution from newly acquired businesses was £4.1m to revenue and £1.7m to gross profits. The Group has incurred higher administrative costs in the period, reflecting transactional and other infrastructure costs incurred in integrating the newly acquired businesses, as well as an increase in the charge for share based payments.

Reported profits before tax were £3.5m (2010: £5.6m) and fully diluted earnings per share for the first six months were 1.1p (2010: 1.7p); both were affected by an increase in the charge for amortisation of intangible assets from £2.1m to £4.8m. Cash generated from operations over the first six months was £37.3m (2010: £27.5m) of which £28.5m has been applied to acquisitions and £4.0m in further loans to venues. After making these payments, the Group had net cash balances of £15.6m (2010: £29.7m) at 31 March 2011.

Business development

The Group has continued to implement its strategy of sector and geographic expansion in its core markets.

On 17 December 2010, the Group acquired 100% of MVK for a total cash consideration of €33m (£27.4m). MVK is a significant Moscow exhibitions business operating circa 20 exhibitions with annual volume sales of more than 55,000 sqm. MVK's largest annual exhibitions serve the furniture, packaging, pumps and measurement industries. This high quality portfolio of events gives ITE access to new sectors, is complementary to the Group's existing exhibition interests and will both broaden and strengthen the Group's core activities.

Two of the more significant events in the portfolio, EuroMebelExpo (furniture) and Rosupak (packaging), take place in late May and June respectively and both are currently performing well, with sales on both events in line with the Group's expectations.

On 3 March 2011, the Group acquired 100% of Krasnodar Expo LLC for a consideration of Rubles 410m (£8.8m). Half of the consideration was paid on 1 April 2011 with the balance deferred until audited financial results for the year to 31 December 2010 are finalised. Krasnodar is a significant exhibition business based in southern Russia with a portfolio of more than 20 exhibitions which generate annual sales volume of circa 50,000 sqm. The largest events serve the construction and agricultural industries. This portfolio is complementary to ITE's existing Russian exhibitions and will provide the Group with an opportunity to participate in the growth of this key region.

The Group continues to seek opportunities which are consistent with its overall strategy of building market leading positions in emerging markets.

Dividend

The Board has approved an interim dividend of 1.9p per share (2010: 1.7p per share). The Board retains a progressive dividend policy.

Trading highlights and review of operations

The first half of the financial year has seen the Group benefit from continually improving trading conditions, most notably in Moscow, the Group's largest market, which is now clearly operating in a 'business as usual' environment. Elsewhere, the Group's markets continue to recover, albeit more slowly, from the global recession of 2009/2010 and all are now showing signs of continual improvement.

Overall the Group's volume sales for the first six months increased to 282,600m2 (2010: 203,600) through a mix of organic and acquisition driven growth.

On a like-for-like basis, volume sales were 13% higher than in the same period last year. During this period ITE organised 93 events of which eight were newly acquired events taking place in the first six months (2010: 80 events). A summary of the Group's exhibition business sales and margins is set out below.

* Excluding publishing activity

Russia

Overall volume sales in Russia for the first six months of the year were 53% higher than last year, aided by the contribution from newly acquired businesses.

Moscow has performed strongly in the first half of the financial year as the economic recovery, which began in early 2010, has continued and overall like-for-like sales volumes for the first six months were 29% higher than this time last year. The autumn events were all well ahead of the prior year, which was fully impacted by the economic recession. The second quarter events, also showed good growth, but against less impacted comparatives. Aqua-therm Moscow delivered good growth, and the Moscow International Travel & Tourism event, which takes place in March, achieved sales of 21,000 m2 - an improvement of 8% over the prior year event. In March ITE Moscow took the decision to relocate a number of its leading events from their current venue to more centrally located venues beginning with their 2012 editions. Although these are higher cost venues, the move will provide a more stable future for these events.

St. Petersburg, which was badly hit by the economic recession, is experiencing a slower recovery than Moscow. like-for-like sales over the first six months were higher than the same period last year but the principal events in St Petersburg take place in the second half of the year.

The Group's Siberian office in Novosibirsk experienced a similar trading pattern to St. Petersburg, but with more of its major events weighted to the first half of the financial year it has seen a stronger first half recovery with volume sales 13% ahead of the same period last year. The Group has recently agreed terms to be the anchor tenant at the newly constructed International Exhibition Centre, which is due to open in late 2011. The new venue will increase operating costs but again will provide a better platform for growth in the region.

The recently acquired MVK portfolio of events has now been integrated into the Moscow office, but to date only three of the smaller events have taken place since the business was acquired. Krasnodar Expo, which was acquired in March just prior to the running of one of the largest events in the portfolio. UASF Krasnodar (building and furnishing), sold 10,200sqm and performed in line with our expectations.

Central Asia & the Caucasus

Overall volume sales for the first six months in Central Asia and the Caucasus were 12% higher on a like-for-like basis than last year. Consistent with trading patterns seen in regions outside Moscow, the Kazakhstan market continued to emerge slowly from the recession. Overall Kazakhstan reported a 6% increase in volume sales across its events taking place in the first half. The largest event in the region is the Kazakhstan International Oil & Gas Exhibition (KIOGE), which takes place in Almaty in October, where space sales of 7,800 sqm were similar to last year's event. However KIOGE conference revenues were circa 15% lower in 2010 reflecting the effect of an alternative industry forum in Astana at the same time as the Group's event. Since then ITE has been appointed as the operator of this forum which will create an opportunity to develop both events within the framework of a Kazakhstan Oil and Gas Week.

In Azerbaijan and Uzbekistan, which were both largely unaffected by the economic recession, growth has been good. The Group's Azerbaijan business is the anchor tenant at the recently opened Baku Exhibition Centre and is starting to experience the effects of improved facilities, running new events and experiencing volume increases at existing events.

Eastern & Southern Europe

In Turkey the Group made good progress with volume sales increasing by 10% on a like-for-like basis. Overall volume sales of 110,000 m2 for the first six months of the year were an increase of 41,000 sqm on the prior year, largely attributable to the biennial TATEF (industrial metal working) event acquired as part of the Group's acquisition of its joint venture assets in January 2010. The Group's leading regional travel event EMITT, achieved record volumes and revenues, illustrating the continued strength of the sector.

Ukraine was the most severely effected of the Group's markets and volume sales continued to be weak throughout the first half with overall sales volumes remaining the same as the prior year.

UK and the Rest of the World

MODA, the Group's leading UK mid-market fashion event, which includes the increasingly successful childrenswear exhibition, Bubble, continued to outperform the domestic market, posting like-for-like volume increases of 7%. The MODA event in February consolidated the launch of the lingerie sector in 2010 and sold all available space at the venue.

In India, the Group successfully ran the Mining and Minerals event MMMM for the first time under its ownership, and also joint ventured on the National Oil Gas event, Petrotech. The Group has been developing its existing brands in its core sectors, with the launches of Delhibuild and Worldfood India planned for later this year.

April 2011 trading

April's trading was ahead of the Group's expectations, with especially strong sales performance from the Group's leading construction event Mosbuild. The resilience of this event and its performance in not only producing strong sales uplift but a significant increase in visitor attendance illustrates the strength and durability of strong exhibition brands.

Results for the Group's principal events taking place in April are set out below:-

Outlook

The Moscow market is now trading well and ITE's regional markets are steadily reflecting an improvement in their trading conditions. As at 12 May 2011, the Group had booked revenues for the current financial year of £137.1m (2010: £98.1m), of which £12.5m relates to newly acquired businesses. On a like-for-like basis volume sales for the full financial year are more than 10% ahead of the comparable figure for last year.

The financial position of the Group remains strong, and the Group continues to generate high levels of cash. With good trading conditions in its markets allied with their longer term prospects for further development the Board has confidence in ITE's future prospects.

Going Concern

As stated in note 17 to the condensed financial statements, the Directors are satisfied that the Group has sufficient resources to continue to operate for the foreseeable future, a period of not less than 12 months from the date of this report. Accordingly, they continue to adopt the going concern basis in preparing the condensed financial statements.

Condensed Consolidated Income Statement

For the six months ended 31 March 2011

The results stated above relate to continuing activities of the Group.

Condensed Consolidated Statement of Comprehensive Income

For the six months ended 31 March 2011

Condensed Consolidated Statement of Changes in Equity

31 March 2011

Condensed Consolidated Statement of Changes in Equity

31 March 2011

Condensed Consolidated Statement of Changes in Equity

31 March 2011

Condensed Consolidated Balance Sheet

31 March 2011

Condensed Consolidated Balance Sheet

31 March 2011

Condensed Consolidated Cash Flow Statement

For the six months ended 31 March 2011

Notes to the Interim Financial Statements

1. General Information and basis of preparation

The information for the year ended 30 September 2010 does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. A copy of the statutory accounts for that year has been delivered to the Registrar of Companies. The auditors reported on those accounts: their report was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under section 498(2) or (3) of the Companies Act 2006.

The annual financial statements of ITE Group plc are prepared in accordance with IFRS as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting', as adopted by the European Union.

Accounting policies

The interim financial statements have been prepared on the basis of the accounting policies and methods of computation applicable for the year ending 30 September 2010. These accounting policies are consistent with those applied in the preparation of the accounts for the year ended 30 September 2010 except as described below.

The following new standards, amendments to standards and interpretations are mandatory for the period ending 31 March 2011, and have been adopted but have had no impact on the 2011 Group interim statements;

IAS 32 (Revised) Classification of Rights Issues;

IAS 39 (Revised) Financial Instruments: Recognition and Measurement;

IFRIC 9 (Revised) Embedded Derivatives;

IFRIC 17 Distributions of Non-cash Assets to Owners;

IFRIC 18 Transfer of Assets from Customers; and

IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments.

2. Segmental information

The revenue and profit before taxation are attributable to the Group's one principal activity, the organisation of trade exhibitions, conferences and related activities and can be analysed by geographic segment as follows.

IFRS 8 introduces the term Chief Operating Decision Maker (CODM). The Executive Board comprising the Executive Directors (Andy Braid, Neil Jones (Financial Director), Stephen Keen, Suzanne King, Alexander Shtalenkov, Edward Strachan (Executive Director), Russell Taylor (Chief Executive Officer) and Colette Tebbutt) is considered to be the CODM.

ITE's reportable segments are strategic business units that are based in different geographic locations, predominantly in the developing and emerging markets. Each business unit is managed separately and has a different marketing strategy as determined by the local management. The products and services offered by each business unit are identical across the group.

ITE Group evaluates performance on the basis of profit or loss from operations before tax expense excluding non-recurring gains and losses and foreign exchange gains and losses.

* Segment assets and segment liabilities exclude current and deferred tax assets and liabilities

The revenue in the period of £53.0 million includes £0.2 million of barter sales.