Final Results - Pre-tax Profit Up 9%

ITE Group PLC 1 December 1999 ITE GROUP PLC PRELIMINARY RESULTS ANNOUNCEMENT ITE Group plc, the leading international exhibition organiser in emerging markets, is pleased to announce its preliminary results for the year ended 30 September 1999. Key points: * Profit before goodwill, exceptional loss and tax of £10.0million, up 9% in spite of economic crisis in Russia, achieved through diversification into new markets. * Turnover of £35.3million. * Headline diluted earnings per share 4.0p. * Final dividend of 0.9p per share making a total of 1.38p for the year, up 4%. * Acquisitions and joint ventures including Turkey, Czech Republic, Poland, Bulgaria and Egypt. * During the period ITE organised 53 exhibitions in 12 countries * New management team of exhibition specialists Lawrie Lewis, Chairman, commented: 'The future growth path for ITE is clear. Our new acquisitions and our new management team will combine to consolidate and build on this year's growth. Further acquisition targets are being appraised and the Group's diversification outside of Russia and the CIS will continue. Our new management structure and team will focus ITE on the key element of running exhibitions - 'sales and marketing'. ITE is unique in this ability and I am extremely confident of continuing the success in the current financial year.' For further information, please contact: ITE Group Plc Lawrie Lewis Chairman 0171 596 5000 Steve Monnington Chief Executive Odette Jonkers Press Office 0171 596 5253 Buchanan Communications Richard Oldworth/Isabel Petre 0171 466 5000 ITE GROUP PLC Preliminary Statement for the year ended 30 September 1999 It is a great pleasure for me to present the 1999 preliminary results. Having highlighted in the 1998 annual report the difficulties facing ITE, I am particularly pleased that 1999 has shown the growth in headline earnings reported today. We are now well advanced in achieving our major aim of diversifying outside of Russia and the CIS by acquisition and this strategy will continue in the current year. As part of this strategy we announced today the conditional agreement to acquire 50% of Istanbul Fuarcilik ('IFAS'). * Results The results for the year ended 30 September 1999 are being compared with a nine month period to 30 September 1998. Given the seasonal trading pattern to our business the comparable period excludes the quietest quarter of our financial year. The consolidated profit and loss account for the year ended 30 September 1999 is set out below. Turnover for the year under review was £35.3million while Profit before tax, goodwill, and exceptional loss was £10.04million. During the year we incurred an exceptional loss of £2.3million relating to our investment in Philip Johnstone Group Limited. This investment arose from former activities of the group and has no relationship to the group's current business. Accordingly the Directors believe it is prudent to make a full provision for this investment due to the uncertainty relating to its recoverability. * Management In recent months the Group has undergone a complete re-organisation of senior management, continuing on the path which was highlighted in last year's report. In November we appointed Steve Monnington as Group Chief Executive. Steve has a long association with the exhibition industry and worked very successfully with me at Blenheim Group. We also recently appointed Greg Ward to the position of Group Business Development Director. Greg's industry expertise from Reed Exhibitions will enhance our acquisition and integration process. I am also very pleased that Alex Bernstein agreed to join the board, with responsibility for Russia and the CIS. Alex has had a long and successful association with ITE and it is appropriate that within our new management structure his role is recognised. Following the announcement today of our acquisition of 50% of the fair organising arm of CNR, IFAS, Ceyda Erem has agreed to join the board of ITE. Ceyda founded and developed CNR into the largest exhibition company in Turkey and I believe she will play a major role in developing further ITE's business in Turkey. In July, the founders of the Company, Roger and Roddy Shashoua disposed of their remaining interest in the Company and stepped down as directors. Mark Shashoua, Deanne Shashoua and Barbara Hanlon also left to pursue other interests. I would like to express my gratitude for all their efforts and their assistance with the handover to the new management team. I believe that we have now assembled an outstanding, talented and experienced management team with the range of skills necessary to deliver results in a dynamic and challenging international environment. * Strategy and Acquisitions Over the last year, the group has continued its acquisition programme in Eastern Europe with major acquisitions in Poland (Biuro Reklamy), the Czech Republic (Incheba Praha and Agentura Triumf) and Turkey (Afeks and IFAS). We have also begun our expansion into the Middle East with the acquisition of MEC and ACG both of which operate in the Egyptian market. ITE is now achieving its objective of becoming the leading independent exhibition organiser in these emerging markets. We will continue to search for appropriate acquisitions in our target marketplaces combined with the development of our existing and acquired businesses. * Dividends An interim net dividend of 0.48p (1998: 0.45p) per share was paid on 2 July 1999. The directors recommend a final net dividend of 0.9p (1998: 0.875p) per share, to be paid (if approved) on 4 February 2000 to shareholders on the register of members at the close of business on 17 December 1999. Shareholders can elect to take their dividend either in cash or new shares in ITE. * Current Trading Our sales as at 30 November 1999 already booked for 1999/00 are £19.5 million (1998/9: £23.6 million). To date over £11.5million (1998/9: £12.1 million) of these sales have been collected. While our sales for the current year at this point are lower than in 1998, last year's figure benefited from advance sales made prior to the Russian economic crisis of August 1998, after which sales were slower than normal. * Outlook In this year we have succeeded in moving ITE from being totally dependent on Russia and the CIS for its exhibition business to having a diverse portfolio of trade exhibitions in emerging markets. Our plan is to continue to expand by acquisitions and joint ventures in both our existing markets and in new ones such as the Far East. At the same time we will continue to exploit and enhance our current portfolio of shows with increased international sales and reciprocal trading. Our new management structure and team will focus ITE on the key element of running exhibitions - 'sales and marketing'. ITE is unique in this ability and I am extremely confident of continuing the success in the current financial year. Lawrie Lewis Chairman CONSOLIDATED PROFIT AND LOSS ACCOUNT Year ended Nine months 30 September 30 September 1999 1998 Notes £'000 £'000 Turnover 35,312 28,376 Cost of Sales (19,174) (16,804) ------- ------- Gross profit 16,138 11,572 Amortisation of Goodwill (218) - Other Operating Expenses (7,016) (2,989) (net) ------ ------- Operating Expenses (7,234) (2,989) ------ ------ Operating Profit 8,904 8,583 Share of associates' (48) - operating loss Exceptional amounts 3 (2,340) - written off investments Net Interest Receivable 946 660 ------ ------- Profit on ordinary 7,462 9,243 activities before taxation Taxation (2,976) (2,851) Profit on ordinary 4,486 6,392 activities after taxation Minority Interests (115) - ------ ------- Profit for the financial 4,371 6,392 year Dividends (2,256) (2,122) ------- ------- Retained profit 2,115 4,270 ======= ======= Earnings per Share Headline Diluted 4 4.0p 4.9p Earnings Basic 5 2.7p 5.3p Diluted 6 2.6p 4.9p ===== ==== CONSOLIDATED BALANCE SHEETS As at As at 30 September 30 September 1999 1998 £'000 £'000 FIXED ASSETS Goodwill 7,196 - Tangible Assets 1,973 4,372 Associates 1,904 - Investments 1,041 2,600 ------ ----- 12,114 6,972 CURRENT ASSETS Debtors 12,658 16,246 Cash at bank and in hand 19,493 19,040 ------ ------- 32,151 35,286 ------ ------- CURRENT LIABILITIES Creditors: amounts falling due (27,333) (30,002) within one year -------- -------- NET CURRENT ASSETS 4,818 5,284 ----- ----- TOTAL ASSETS LESS CURRENT 16,932 12,256 LIABILITIES Creditors: amounts falling due (1,750) (931) after more than one year ------- ------ NET ASSETS 15,182 11,325 ======= ====== CAPITAL AND RESERVES Called up share capital 1,682 1,602 Share premium account 9,978 6,621 Option reserve 2,983 5,188 Profit and loss account 48 (2,086) ------ ------- Equity shareholders' funds 14,691 11,325 ------ ------- Minority interests 491 - ------ ------- Total capital employed 15,182 11,325 ====== ======= Notes 1. The accounts have been prepared on the historical cost basis and do not constitute statutory accounts within the meaning of section 240 of the Companies Act 1985. 2. The figures for the period to 30 September 1998 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. The auditors have not reported on the accounts for the year ended 30 September 1999 nor have any such accounts been delivered to the Registrar of Companies. 3. The amounts written off investments relate to the company's investment in Philip Johnstone Group Limited for which no tax relief has been assumed. 4. The headline diluted earnings per share is based on the profit for the financial year but before the amortisation of goodwill and the exceptional amounts written off investments divided by 169,225,000 ordinary shares, allowing for the effect of all dilutive potential shares. 5. Earnings per share on the net basis is based on the profit for the financial year divided by the weighted average of the number of ordinary shares in issue, being 163,528,000 shares. 6. The calculation of fully diluted earnings per share is based on 169,225,000 ordinary shares, allowing for the exercise of all dilutive potential shares.

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