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ITE Group PLC (ITE)

  Print      Mail a friend       Annual reports

Monday 23 May, 2005

ITE Group PLC

Interim Results

ITE Group PLC
23 May 2005


23 May 2005                        


                                  ITE GROUP PLC


                          INTERIM RESULTS ANNOUNCEMENT

ITE Group plc, the international exhibitions specialist, today announces interim
results 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, with
strong operating performance from the growth of our existing events, new
launches and acquisitions. The Board has determined the present level of cash
balances is surplus to requirements and intends to buy back and cancel up to £30
million of its own shares. The Board has approved an increase in the interim
dividend following the re-basing of last year's final dividend.'

                                    - Ends -

Enquiries:
Ian Tomkins / Russell Taylor                         020 7596 5000

ITE Group plc
Bridget Fury / David Simonson                        020 7653 6620
Merlin

Interim statement

ITE has delivered a strong trading result for the first six months with turnover
of £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.  Net
cash expended on acquisitions and venue loans for the 6 month period amounted to
£3.0m.

Dividend
The Board has approved an interim dividend of 0.9p per share (2004 - 0.55p). The
increase in the interim dividend follows the re-basing of last year's final
dividend. The Board aims to increase future dividends progressively in line with
earnings.  This dividend will be paid on 23 June 2005 to shareholders on the
register on 3 June.

Board and Management
As previously announced Ross Stobie, General Manager of our Moscow office, will
be resigning from his current role and from the ITE Board on 9 August 2005. The
Board extends its thanks to Ross for his contribution over the last three years
and for his part in steering the Moscow operation through a significant period
of growth and expansion. A new General Manager has been appointed and will be
joining the Group in June.

Share buy-back
The Board sees significant opportunities in the Group's markets and intends to
pursue its growth strategy both organically and through acquisition. In
addition, having regard to the Group's strong cash flow and potential debt
capacity the Board has determined that the present level of cash balances are
surplus to its requirements. At 31 March 2005 the Group has £38.0m in cash, an
increase of £8.6m over the same time last year. The Board intends to buy back
and cancel up to £30m of its own shares and has today sent a circular to
shareholders requesting their approval for the Company to cancel its share
premium account and for a new authority to make market purchases of its own
shares. Subject to these approvals and to Court approval being granted for the
cancellation of its share premium, the Company will issue a tender document for
a share buy-back in July.

Financial Performance

Turnover for the first six months of the year was £22.7m (2003: £20.2m). Gross
profits of £8.6m (2004: £7.2m) were earned at a margin of 38% (2004: 36%) on
revenue. £1.6m of the increase in revenue and £0.8m of the increase in gross
profit is attributable to acquisitions made in 2004.

Operating profit for the first six months was £1.0m (2004: £0.4m). Operating
costs before amortisation charges were £6.0m (2004: £5.6m) and included foreign
exchange losses of £0.4m (2004: £1.0m). The increase in underlying costs was
largely attributable to higher staff costs, including the costs of expensing
Performance Share Plans and the additional overhead of the RAS Publishing
acquisition.

Net interest receipts of £0.9m (2004: £0.4m) were earned on higher average cash
balances 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 over
the comparable result for the same period last year.

Set out below is an analysis of the Group's sales and profits for the first six
months:
                           Square metres        Revenue           Gross profits
                                  000's             £m.                     £m.
First Half 2004                    85.3           20.2                     7.2
Timing differences                 (6.7)          (0.9)                   (0.4)
Core growth                         7.8            1.2                     1.0
New events launched                 9.1            1.8                     0.1
Acquisitions                        6.5            1.6                     0.8
Non - 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 excluding
the 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 were
affected 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      17,000
Kazakhstan Oil & Gas        Kazakhstan   Oil & Gas           7,400       6,200
Ingredients Russia          Russia       Food                5,500       4,700
MODA UK Spring              UK           Fashion            12,100      10,300
TransRussia                 Russia       Motor/Transport     4,600       3,100                                       
Moscow International        
Sports Show                 Russia       Other               3,300       4,000
Kievbuild                   Ukraine      Construction        5,000       4,100
Public 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% in
terms of space sales and 17% in terms of revenue.

Russia
The Moscow team organised 14 events in the first half of the year. The most
significant events were the Moscow International Travel Show, Ingredients
Russia, TransRussia and the Moscow International Sports event. The Travel show
grew 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 10th
edition of the TransRussia event was the most successful ever in revenue, space,
visitor attendance and profit terms. The Moscow Sports show reduced in size this
year as the market was disturbed by a new competitive launch.

The St Petersburg office organised 3 events in the first six months each of
which performed to expectations.

Central Asia
The annual Kazakhstan Oil and Gas exhibition grew in size by 20%, making use of
the new exhibition pavilion built in Almaty with assistance from ITE. The
conference which is organised concurrently with the exhibition grew modestly and
contributed to an overall increase in revenues from the whole event of 10%.
Overall there were 22 events (including 9 new launches) organised by the teams
in Kazakhstan, Uzbekistan and Azerbaijan over the period. Two promising events,
Worldfood Kazakhstan and Atyrau Build both showed good growth on the previous
editions.

Ukraine
The Kyiv team organised 14 events over the six month period including the
successful integration of the two acquisitions in the Health and Information
technology sectors. Both new shows benefited from a move to the IEC venue, with
which ITE has a close co-operation, and overall realised a 20% increase on the
2004 pre-acquisition events. Worldfood Kiev, held in November 2004 partially
suffered from political events at the time. Following the resolution of
political events Kievbuild, held in February 2005, enjoyed excellent support and
delivered strong growth.

Turkey
ITF, our 50% associate operating in Istanbul delivered improved profits over the
first six months with good contribution from the two automotive shows. The
second half has begun well with a very successful re-branding and re-launch
initiative on the Furniture event.

UK
The MODA UK fashion exhibition in Birmingham continued its strong performance
with another 16% growth in space sales, further consolidating its market leading
position in the sector. The RAS Publication acquisition has integrated well with
the exhibition team and achieved its revenue expectations. During the period RAS
acquired the title to a new magazine, Fashion Extras, focussing on the
accessories market.

Outlook
Since 31 March the Group has organised some of its other major exhibitions. The
2005 edition of MosBuild expanded into the new Crocus exhibition facility in
Moscow and was an unprecedented success. The additional exhibition space made
available facilitated an increase in size of the overall MosBuild Building and
Construction event (including Windows and Doors) from last year's 44,600 net
square metres to over 54,000 net square metres this year.  The Moscow
International Boat Show, Moscow International Protection and Security Show and
Expoelectronica all substantially improved their performances with overall
growth of 14% in square metres sold.

At 13 May 2005 £64.1m of revenue (14 May 2004: £53.3m) has been contracted for
the 2005 financial year. The World Petroleum Congress, which ITE is organising
and which is due to take place in September 2005, has to date achieved its sales
targets and should make a significant additional contribution to this financial
year.

Among our remaining top ten events still to take place are the Moscow
International Oil and Gas Exhibition in June, the Moscow International Motor
Show taking place in August, World Food Moscow and Baltic Building Week both
taking place in September and forward sales on each event are well advanced. The
Board remains positive with respect to the prospects for the remainder of the
year.


Ian Tomkins                                       Iain Paterson
Chief 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               £000
Turnover                            22,666             20,153             60,750
Cost of sales                     (14,116)           (12,938)           (33,542)
                                __________         __________         __________
Gross profit                        8,550              7,215             27,208
                               -----------          ---------          ---------
Net operating expenses
before 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 profit
before goodwill                       370                134                676
amortisation  
Goodwill amortisation                 (76)               (76)              (221)
                                 ---------          ---------          ---------
Share of associates'
operating profit                      294                 58                455
Profit on disposal of
group undertakings                     -                  -                323
                                __________         __________         __________

Profit on ordinary
activities before interest         1,316                433             14,575
Investment income                  1,098                365              1,148
Interest payable                    (187)                (2)               (16)
                                __________         __________         __________
Profit on ordinary    
activities before taxation         2,227                796             15,707
Tax on profit on ordinary
activities                        (1,077)              (528)            (4,955)
                                __________         __________         __________
Profit on ordinary
activities after taxation          1,150                268             10,752
Minority interests                     -                 (1)               (31)
                                __________         __________         __________
Profit for the
financial period                   1,150                267              10,721
Dividends                         (2,544)            (1,448)             (5,984)
                                __________         __________         __________
Retained(loss)/earnings           (1,394)            (1,181)              4,737
                                ==========         ==========         ==========                   
Earnings per share
Basic                     3          0.4p               0.1p               3.9p
Diluted                   3          0.4p               0.1p               3.8p
Headline 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          £000
Fixed assets
Goodwill                                 30,459           26,961        29,348
Tangible assets                           1,808            2,007         1,862
Associates                                1,161            1,075         1,377
Other investments                            85               56            74
                                    ___________      ___________   ___________
                                         33,513           30,099        32,661
Current assets
Debtors due within one
year                         4           22,643           16,942        23,426
Debtors due after one
year                                      2,699            2,966         4,060
Cash at bank and in
hand                                     38,009           29,356        33,546
                                    ___________      ___________   ___________
                                         63,351           49,264        61,032

Creditors: amounts 
falling due within one
year                        4           (51,953)         (40,118)      (47,773)
                                    ___________      ___________   ___________
Net current assets                       11,398            9,146        13,259
Total assets less
current liabilities                      44,911           39,245        45,920
Provisions for
liabilities and charges                 (1,499)            (940)       (1,498)
                                    ___________      ___________   ___________
Net assets                              43,412           38,305        44,422
                                   =============    ============= =============

Capital and reserves
Called-up share capital                  2,887            2,851         2,852
Share premium account                   29,877           29,018        29,036
Merger reserve                           2,746            2,746         2,746
ESOT reserve                            (3,580)          (2,303)       (2,792)
Option reserve                               -               23            23
Profit 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             £000
Fixed assets
Investments                         1,034               1,022            1,024
                              ___________         ___________      ___________
                                    1,034               1,022            1,024
Current assets
Debtors due within one
year                                  675                 508              653
Debtors due after one
year                               13,866              30,404           19,270
Cash at bank and in
hand                               25,789               5,024           21,188
                              ___________         ___________      ___________
                                   40,330              35,936           41,111

Creditors: amounts
falling due within one
year                               (2,866)             (1,639)          (4,889)
                              ___________         ___________      ___________
Net current assets                 37,464              34,297           36,222
                              ___________         ___________      ___________
Total assets less
current liabilities                38,498              35,319           37,246
                              ___________         ___________      ___________
Net assets                         38,498              35,319           37,246
                              ===========         ===========      ===========

Capital and reserves
Called-up share capital             2,887               2,851            2,852
Share premium account              29,877              29,018           29,036
Merger reserve                      2,746               2,746            2,746
ESOT reserve                       (3,580)             (2,303)          (2,792)
Option reserve                          -                  23               23
Profit 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               £000
Net cash inflow
from operating
activities          5             14,202              9,196             21,754
Dividends
received from
associates                           437                  -                172
Returns on 
investments
and servicing
of finance                           911                345              1,132
Taxation                          (4,510)            (2,017)            (3,363)
Capital expenditure
and financial
investment                           258                (73)            (2,858)
Acquisitions
and disposals                     (2,347)             1,818             (1,345)
Equity dividends
paid                              (4,560)            (3,012)            (4,545)
                               __________         __________         __________
Cash inflow
before management
of liquid resources
and financing                      4,391              6,257             10,947
Management of
liquid resources                  (2,500)            (5,049)           (19,336)
Financing                             72                995                495
                              __________         __________         __________
Increase/(decrease)in cash
in 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 the
financial period                         1,150        267      1,150         267
Amortisation 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 of
shares:
For basic earnings per share                         276,479             273,716
Exercise 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                 13,797
Depreciation
charges                      224                    232                    471
Amortisation               1,535                  1,274                  2,528
(Profit)/loss
on sale of
fixed assets                   -                     (6)                   103
Decrease/(increase)
in debtors                 1,569                  1,880                 (2,638)
Increase in
creditors                  9,330                  5,604                  6,546
Increase/(decrease)
in provisions                522                   (163)                   947
                      __________             __________             __________
Net cash inflow
from operating
activities                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 ordinary
activities before
taxation                   2,227                    796                 15,707
Amortisation
of goodwill and
trade investments
(including 
associates)                1,611                  1,350                  2,749
Loss on disposal
of subsidiary
undertakings                   -                   -                      (323)
                      __________             __________             __________
Headline profit
before 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




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