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ITE Group PLC (ITE)

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Monday 10 December, 2001

ITE Group PLC

Final Results

ITE Group PLC
10 December 2001


FOR IMMEDIATE RELEASE                                          10 December 2001



                              ITE GROUP PLC



                       PRELIMINARY RESULTS ANNOUNCEMENT



ITE Group plc, the leading exhibition organiser in emerging markets, is
pleased to announce its preliminary results for the year ended 30 September
2001.



Key points:



-         Headline profit* of £13.0 million (£12.6 million) up 3% as a result
          of strong Russian and CIS performance.



-         Headline diluted earnings per share 3.7p (2000: 4.4p).



-         Cash balances of £16.3m.



-         Impairment of goodwill and investments £39.1m.



-         Recommendation of final dividend was intended, but effect of the
          goodwill impairment has made it technically impossible until capital
          reorganisation has been undertaken.  This is not expected to present a
          major obstacle.



-         Reported Turnover of £50.4 million (2000: £38.8 million) up 30%.
          Turnover including ITE's share of Associates revenue and Other Income 
          amounts to £57.5 million, up 30% (2000: £44m).



-         £40m fundraising including £30m from media and communications
          private equity investor Veronis Suhler.



-         Strong current core Russian and CIS trading.



-         ITE organised 233 exhibitions utilising approximately 425,000 square
          meters of net space sold.





*Headline profit is defined as profit before tax, amortisation and impairment
of goodwill and investments.





Contact:


Stephen Warshaw, Chief Executive
Ian Tomkins, Finance Director
ITE Group Plc                                      + 44 20 7596 5000

Richard Oldworth / Isabel Petre
Buchanan Communications                            + 44 20 7466 5000



                                ITE GROUP PLC

       Preliminary Statement for the year ended 30 September 2001



Comments by Chairman:  Lawrie Lewis



Despite difficult trading conditions during 2000/2001 in Turkey, Egypt and the
technology sector, I am pleased to report that ITE has delivered a creditable
trading performance, albeit at a lower level than our expectations at the
beginning of the trading period.



Turnover of £50.4 million and headline pre-tax profit of £13.0 million was
achieved for the 12 months to 30 September 2001.  A loss before tax of £29.9
million was recorded as we have necessarily adjusted for total impairment of 
£39.1 million relating to our investments in ITF, EUF, ACG, MEC, XRM,
E-business, Agentura Triumf, Incheba Bratislava and Rantai.  These
acquisitions were made over the past two financial years.  Your Directors
believe it to be prudent to make a provision against the carrying value of
these investments due to uncertainty relating to their future profitability
and cashflows.  The impairment review was carried out for each territory and
acquisition in accordance with the requirements of UK accounting standards.
This review was performed in addition to a similar review undertaken for the
purposes of the 2001 Interim Report.   ITE made only one significant
acquisition in the year under review.



Adjusted earnings per share for the year to 30 September 2001 were 3.7p.  The
board intended to recommend a final dividend, but the effect of the goodwill
impairment review on the company's reserves is to make it technically
impossible for ITE to pay such a dividend.  The board has therefore resolved
to seek the approval of shareholders at the forthcoming AGM, for a reduction
of capital intended to allow the company to resume paying dividends at a level
which the Board hopes will compensate for this year's missed final dividend.



Trading



The core business in Russia and the CIS out-performed Directors expectations
for 2001.  The expanding levels of business in Moscow involved a move to
larger offices to accommodate the increase in staff numbers, which have now
almost reached 100.  Early signs of revival in the Turkish economy are not
reflected in the year's results, but we anticipate some improvement in 2002.



Our flagship events at Expocentr in Moscow performed well with very good
re-bookings for 2001/2002.  Expocentr, currently 35,000 sq metres, is building
a further 20,000 sq metres of new exhibition space which will be available for
use in Autumn 2002.  ITE expects to be able to capitalise on this opportunity.



ITE's associate Incheba Prague successfully acquired a 20 year contract to
manage Vystaviste, the leading exhibition venue in Prague, and ITE acquired
the remaining 5% of Agentura Triumf which is based there.  ITE now owns 100%
of Holiday World, the largest Travel & Tourism exhibition in Prague.



Intermedia, which was acquired in September 2000, performed very well,
especially with its launches of E-learning in Paris, Amsterdam and Hong Kong.
Intermedia expects to launch more E-learning events in Vienna, Sydney, Toronto
and Johannesburg in 2002/2003.



Our Oil & Gas events in Kazakhstan and Turkmenistan, held shortly after 11
September, performed well and outperformed Directors' expectations.



Funding



In November 2000 VS & A Communications Partners, a private equity affiliate of
Veronis Suhler subscribed approximately £30 million in cash at 70p per share
in exchange for a shareholding of 16.9% in the enlarged equity.



At the same time existing shareholders and directors injected £9.68 million at
the same price.  As a result ITE has repaid all debt and has net cash of over
£16 million as at 30 September 2001.



Acquisitions



In August 2001, we acquired 75% of Extension 21, a fashion exhibition, held
twice a year in Harrogate.  We have changed the name of this event to MODA UK
which further re-enforced our strategy of developing brands.  We currently own
the leading fashion exhibition MODA Moscow which is also bi-annual.  We will
be launching MODA UK at the NEC in Birmingham in February 2002 and will look
to clone the brand in some of our other markets.



Management



As announced on 22 October 2001, Stephen Warshaw was appointed Chief
Executive, and I have become non-executive Chairman.



Stephen was Managing Director of Veronis Suhler International Ltd where he
helped set up the London based international office of the leading US Media
Merchant Bank.  Stephen spent seven years at Reed Elsevier Plc where he held a
number of senior positions in Britain and abroad - including CEO of Reed
Elsevier Medical Group and of the Reed Education Publishing Group.



Matthew Meredith was appointed Chief Operating Officer in August.  He has over
14 years exhibition experience working in emerging markets with Andry
Montgomery and subsequently with DMG.  ITE also appointed a new International
Sales Director, Brian Wiseman, who has more than 20 years exhibition
experience.



I must thank everyone in ITE at home and overseas for their support throughout
the year.  We have a highly professional and motivated staff and a
strengthened senior management.



Outlook



ITE owns a diversified portfolio of exhibitions, both geographically and by
industry sector.  Our level of profitability is affected by several factors.
Exhibitions are late cycle with volumes (exhibition space sales) responding
some 15 - 18 months later than the general economic cycle.  The operational
gearing of the exhibitions business is high, a factor which tends to amplify
relatively minor shift in volumes.   Your directors anticipate that trading in
2001/2002 will be affected by continuing difficult economic conditions and by
the absence of a contribution in this financial year from our biennial
exhibitions MIOGE and AUTOSALON.



Currently, ITE has forward sold 66% of expected annual exhibition space for
the 2002 financial year, compared with 54% at the same time last year.



The quality of ITE's core Russian and CIS business, together with our
continuing efforts to control our cost base should ensure that your group is
well placed to benefit from improvements in our markets.





Lawrie Lewis

Chairman

10 December 2001





Consolidated Profit and Loss Account

For the year ended 30 September 2001




                                                         2001     2001     2000
                                                         £000     £000     £000

Turnover
Acquisitions                                                       540    5,281
Existing operations                                             49,810   33,565

Continuing operations                                           50,350   38,846
Cost of sales                                                 (28,088) (20,933)

Gross profit                                                    22,262   17,913
     Net operating expenses before impairment
     and goodwill amortisation                       (11,406)
     Impairment charge                               (17,882)
     Goodwill amortisation                            (2,842)

Net operating expenses                                        (32,130)  (7,540)

Operating profit
Acquisitions                                                        56    1,497
Existing operations                                            (9,924)    8,876

Continuing operations                                          (9,868)   10,373
     Share of associate's operating profit/(loss)
     before impairment and goodwill amortisation         522
     Impairment charge                               (21,220)
     Goodwill amortisation                              (998)

Share of associates' operating (loss)/profit                  (21,696)    (128)
Profit on disposal of interest in associate                        589        -

(Loss)/Profit on ordinary activities before interest          (30,975)   10,245
Interest receivable                                              1,166      383
Interest payable and similar charges                             (121)    (312)

(Loss)/Profit on ordinary activities before taxation          (29,930)   10,316
Tax on profit on ordinary activities                           (4,113)  (4,101)

(Loss)/Profit on ordinary activities after taxation           (34,043)    6,215
Minority interests                                               1,295    (243)

(Loss)/Profit for the financial year                          (32,748)    5,972
Dividends paid                                                 (1,323)  (3,316)

Retained (loss)/profit for the year                           (34,071)    2,656

Earnings per share
Headline diluted                                                  3.7p     4.4p
Basic                                                          (13.2p)     3.3p
Diluted                                                        (13.2p)     3.2p





Consolidated Balance Sheet

30 September 2001


                                                               2001       2000
                                                               £000       £000
Fixed assets
Goodwill                                                     36,011     47,331
Tangible assets                                               1,994      1,812
Associates                                                    2,285     21,337
Other investments                                             2,497      6,178

                                                             42,787     76,658

Current assets
Debtors                                                      18,793     19,605
Cash at bank and in hand                                     16,255      2,722

                                                             35,048     22,327

Creditors: Amounts falling due within one year             (34,448)   (52,666)

Net current assets / (liabilities)                              600   (30,339)

Total assets less current liabilities                        43,387     46,319
Creditors: Amounts falling due after more than one year        (62)      (180)
Provisions for liabilities and charges                      (2,577)   (12,935)

Net assets                                                   40,748     33,204


Capital and reserves
Called-up share capital                                       2,608      1,937
Share premium account                                        69,571     26,221
Option reserve                                                1,001      1,853
Profit and loss account                                    (31,145)      2,717

Equity shareholders' funds                                   42,035     32,728

Minority interests                                          (1,287)        476

Total capital employed                                       40,748     33,204



Consolidated Cash Flow Statement

For the year ended 30 September 2001




                                                                 2001     2000
                                                                 £000     £000

Net cash inflow from operating activities                      13,303    8,426
Returns on investments and servicing of finance                   789      279
Taxation                                                      (3,665)  (2,531)
Capital expenditure and financial investment                    (722)  (3,260)
Acquisitions and disposals                                   (19,145) (33,049)
Equity dividends paid                                         (1,624)  (2,428)

Cash outflow before management of liquid resources and       (11,064) (32,563)
financing
Management of liquid resources                                (2,300)   13,278
Financing                                                      24,597   15,792

Increase/(Decrease) in cash in the year                        11,233  (3,493)



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 2000 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 yet
reported on the accounts for the year ended 30 September 2001 nor have any
such accounts been delivered to the Registrar of Companies.



3.                  The headline diluted earnings per share is based on
earnings as set out below divided by 250,526,536 ordinary shares, allowing for
the effect of all dilutive potential shares.


                                                                2001       2000
                                                               £'000      £'000


(Loss)/Profit for the financial year                        (32,748)      5,972
Amortisation of goodwill                                       3,840      2,315
Impairment of goodwill and investments                        39,102          -
Impairment attributable to minority interests                  (948)          -

Headline Earnings                                              9,246      8,287

Taxation                                                       4,113      4,101
Other minority interest                                        (347)        243

Headline Profit                                               13,012     12,631



4.                  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 248,662,905 shares.



5.                  The calculation of fully diluted earnings per share is
based on 250,526,536 ordinary shares, allowing for the exercise of all
dilutive potential shares.