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  Print      Mail a friend       Annual reports

Wednesday 11 December, 2002


Final Results

11 December 2002

For immediate release  (11 December 2002)

                                 ITE GROUP PLC


ITE Group plc, the leading exhibition organiser in emerging markets, is pleased
to announce its preliminary results for the year ended 30 September 2002.

Key points:

•     Reported turnover of £52.4 million (2001: £50.4 million) up 4%.

•     Headline pre-tax profit* before non-recurring items of £10.8 million 
      (2001: £13.5 million), ahead of market expectations.

•     Net cash of £17.7 million.

•     Sustainable reduction of effective tax rate to 25%.

•     Proposed final dividend of 1p giving total dividend in the year of 2.45p.

•     Continued strong core trading in Russia and CIS markets.

•     Rationalisation programme completed and strengthened management team in 

•     Impairment of goodwill and amounts written off investments of £6.2 million 
      (2001: £39.1 million), leading to a loss before tax of £405,000
      (2001: loss before tax of £29.9 million).

* Headline pre-tax profit is defined as profit before tax, amortisation and
impairment of goodwill and amounts written off investments.

Commenting on the results, Iain Paterson, Chairman, said:

'We are encouraged by these results, which have outperformed market
expectations.  It was our objective this year to refocus the Group on its most
profitable business and we believe this has proved successful.  It is our
intention that next year will be a period of further consolidation with our main
focus being on organic growth.  We will also benefit from the return of our key
biennial events.  We are very pleased to have been awarded the contract to
organise the 2005 World Petroleum Congress.  This is the most prestigious
congress of its kind and is a step towards our aim of expanding our market
leading Oil & Gas division outside the current key annual and biennial events.'


Iain Paterson/Ian Tomkins         ITE Group plc       020 7596 5000
David Simonson/Nicola Davidson    Merlin Financial    020 7606 1244

                                 ITE Group plc

           Preliminary Statement for the year ended 30 September 2002

Comments by the Chairman and by the Chief Executive

We are encouraged by our results for the financial year ended 30 September 2002
as, despite the most challenging global economic conditions faced by the
business to business media sector for more than a decade, they have exceeded
market expectations.

It was our objective this year to refocus the group on its most profitable
business and to address the structural and financial issues that were the result
of the previous acquisition programme and we have made solid progress in both of
these areas. We simplified our organisation and corporate structures in Russia
and the CIS, Turkey, Egypt and the Czech Republic. We also divested our
interests in Indonesia. We have incurred, or provided for, the various
non-recurring costs of the rationalisation programme and have reviewed the
carrying values of our continuing investments and prudently written them down
where appropriate. Our exposure to future cash expenditure in relation to past
acquisitions is now short term and insubstantial. Although the rationalisation
programme is now largely complete, we are continuing to review our business and
strategy to ensure that we are focussing on our fundamental strengths and
maximising shareholder value.

Financial performance

Turnover and Gross Profit for the period at £52.4 million and £21.4 million
exceeded market expectations. On a comparable basis this represented year on
year revenue growth of 11%. Trading in Russia and the CIS has been particularly
strong with almost all our events, other than those focused on the information
technology sector, performing at or above expectations both in terms of metreage
and yield. Gross margins slipped from 44% to 41%, due to poor results from
various technology related events, the underperformance of our Balkans business
and 2002 being the year without our highly profitable biennial Moscow Oil and
Gas event.  We would expect margins to improve for 2003.

The contribution from our Associate partners was below expectation, particularly
in Egypt. ITF in Turkey, however, performed better than recently expected,
allowing for the economic crisis experienced in 2001, which meant that three key
shows had to be postponed beyond the 2002 financial year.

Headline profit before tax, amortisation and impairment of goodwill and
investments and other non-recurring items was £10.8 million (2001: £13.5
million). This result reflects the absence of contribution from our key biennial
events (held in 'odd' years), and an increase in overheads due to the
strengthening and broadening of the management team that we highlighted in the
announcement of the Interim Results. Further, this result was achieved after the
absorption of a currency exchange loss of over £1.0 million, largely related to
the weakening of the US dollar throughout the year.

The one off non-recurring costs of £2.9 million, which relate to the loss on
disposal of subsidiaries of £0.5 million, operating losses of £1.4 million and
losses from associates of £1.0 million, are marginally less than we anticipated
at the time of the Interims. We also reviewed the carrying values of all ITE
investments and determined that it is prudent to write down Intermedia which
specialises in organising new media events (£2.8m), X-RM which focuses on
software development (£0.5m), EUF in Turkey (£1.3m) and MEC whose business
relates to Egypt (£1.2m). Total impairments amount to £6.2m, in line with what
we stated at the time of our Interim results in May, and lead to a loss before
tax of £405,000.

The effective taxation rate of the Group is now 25%, a reduction of 6% on 2001.
We believe this rate is sustainable.

The balance sheet continues to be very strong with cash of £17.7 million at the
year end and net assets of £36.4 million.  The Group generated cashflows from
operating activities of £10.4 million.

Earnings and dividends

The headline diluted earnings per share (excluding goodwill impairment and
amortisation and other non-recurring costs) attributable to the Company's
performance is 2.2p per share (2001: 3.7p).

Last year as a result of the impact of the permanent impairment adjustments on
the reserves of the holding company, ITE was unable to pay a final dividend
pending a capital reorganisation. The capital reorganisation was subsequently
undertaken and, to compensate shareholders, at the time of the Interim Results
your Board paid an interim dividend of 1.45p (2001: 0.5p) to make up the
shortfall. Your Board is now recommending a final dividend of 1.0p which gives a
total dividend of 2.45p (2001: 0.5p) for the year.

A resolution of the Board was passed to cancel the Scrip Dividend Mandate Scheme
established pursuant to a resolution of members of the company on 17 November
1998.  This decision was based on the earnings per share dilutionary effect that
the operation of the scheme was having, bearing in mind the Group's strong
Balance Sheet and current cash reserves. This decision also reflects the absence
of the need to raise funds from shareholders in the form of new equity in the
foreseeable future, given the current strategic view of the Board.

Trading highlights

The core business in Russia and the CIS has continued to expand. The performance
table below highlights ITE's top ten most profitable events for the 2001/2002
year.  The principal shows have continued to expand in terms of metreage,
largely without detriment to average yields.

                                                                                    Sq. m                Sq. m
                                                                                 2001/2002           2000/2001

Mosbuild - Russia Building Week                                                     26,900              23,000
Moscow International Travel & Tourism                                               15,000              14,700
Moscow International Motor Show                                                     15,600            10,500 *
Kazakhstan Oil & Gas                                                                 4,500               3,200
World Food Moscow                                                                   14,600              10,500
Windows & Doors Moscow                                                               7,400               6,900
Batimat St Petersburg                                                                8,000               6,700
Moscow International Sports, Leisure & Boats                                         7,000               5,400
Transrussia                                                                          3,400               3,600
Moda UK - Spring & Autumn                                                           10,800             4,700 #

*          Comparative relates to MIMS event held in August 2000

#          Comparative relates to only one event held following acquisition in
           July 2001

ITE's performance demonstrates the resilience of its shows and the leadership
position it holds in the key markets and sectors in which it operates. The
trading conditions have been robust with particularly strong performances for
Mosbuild, Moscow International Travel & Tourism, World Food Moscow and the
Moscow International Motor Show. Moda UK, acquired in 2001, has after overcoming
early consolidation issues exceeded our expectations, growing its space from
3,000 m2 in February 2002 to 7,800 m2 in August 2002. We have succeeded in
recently negotiating new agreements for our major tenancies in Kyiv and St
Petersburg, which will secure the future of our shows in these markets and
improve our trading position. The Board continues to view its key venue
relationships and tenancy terms as fundamental to our business, and it seeks to
strengthen these relationships further in order to underpin the quality of our
leading events.

The exhibition site of Vystaviste in Prague, operated by our associate business
Incheba Praha, was severely damaged by the floods during August. With
significant effort on the ground, sufficient repairs and refurbishment work were
completed to enable improved facilities to be available for the opening of the
Motor show in October. The costs for this work, pursuant to the terms of the
operating lease, are the responsibility of the owner of the facility, the City
of Prague and insurance cover is in place.

Board and management changes

During the course of the year there have been significant changes to the
composition of your Board. Lawrie Lewis resigned as Chairman and stepped down
from the Board in December 2001.  Iain Paterson was appointed non-Executive
Chairman in May 2002. He was formerly a Director of Enterprise Oil plc and has
had extensive experience of developing businesses within emerging markets.
Stephen Warshaw, who joined the Group as Chief Executive in October 2001 to
manage the rationalisation process, resigned from the Board in October 2002 in
order to return to his traditional roots in publishing. He has been replaced by
Ian Tomkins, who has been Finance Director of the Group for 2 1/2 years. We also
announced the appointment of Ross Stobie, previously the General Manager of
British Gas in India and Moscow, as a non-Executive Director in June 2002.  In
October 2002, Mr Stobie was appointed an Executive Director and took over as our
General Director in Moscow.

Our principal objectives in the coming months are to consolidate our leadership
status in our key markets and to maintain our solid growth momentum, by securing
the key members of our management, reinvigorating our employees after a period
of significant change and ensuring that we not only meet but beat any new
competition.  We would like to take this opportunity to thank all our employees
for their support and commitment during what has been a time of significant
change for the company.


Our forward order position is solid with 65% of current market expectations for
annual exhibition revenue for 2003 sold (2002: 57%).  This is an excellent
result considering that in 2003 the staging of our exhibitions are further
skewed towards the latter months of the year, with the biennial events Mioge and
Autosalon being held in June and August respectively.  On a like for like basis,
sales for the forthcoming year are 17% ahead of the same time last year.
Significantly, the Group will benefit from the return of our biennial Moscow Oil
and Gas event to be held in June 2003. We will also reap the benefits of the
completion of an additional hall facility at our main venue in Moscow, which
will enable us to sell more space and grow our largest shows which have become
space constrained.  The signs of economic recovery and political stability in
Turkey are expected to benefit our businesses there. Finally we are delighted to
announce that ITE won, in the face of strong competition, the contract to
organise the next World Petroleum Congress, which will be held in South Africa
in 2005.  This Congress, which is organised every three years, is the most
prestigious petroleum congress and exhibition and the largest of its kind.
Winning this contract is an important step in ITE's strategy to expand its
market-leading Oil & Gas division outside its current key annual and biennial

We believe that the next year will be a period of further consolidation with our
main focus being on organic growth. The distraction of the rationalisation
programme is behind us, and we are confident that the structural, organisational
and other changes we have made will now benefit the business. We are fortunate
that our core markets and sectors have been insulated against the worst effects
of the global economic downturn. We expect our business will continue to benefit
from these factors.

Iain Paterson                             Ian Tomkins
Chairman                                  Chief Executive

Consolidated Profit & Loss Account
For the year ended 30 September 2002
                                                                                 2002            2001
                                                                                 £000            £000

Turnover                                                                       52,431          50,350
Cost of sales                                                                (31,012)        (28,088)

Gross profit                                                                   21,419          22,262
     Net operating expenses before impairment and goodwill                   (12,581)        (11,406)
     Impairment charge                                                        (6,220)        (17,882)
     Goodwill amortisation                                                    (1,905)         (2,842)

Total net operating expenses                                                 (20,706)        (32,130)

Operating profit/(loss)                                                          713          (9,868)

     Share of associates' operating loss before impairment                    (1,211)            522
     and goodwill amortisation
     Impairment charge                                                             -         (21,220)
     Goodwill amortisation                                                      (160)           (998)

Share of associates' operating loss                                           (1,371)        (21,696)
(Loss)/profit on disposal of discontinued operations                            (476)            589

Loss on ordinary activities before interest                                   (1,134)        (30,975)
Interest receivable                                                              824           1,166
Interest payable and similar charges                                             (95)           (121)

Loss on ordinary activities before taxation                                     (405)        (29,930)
Tax on loss on ordinary activities                                            (2,350)         (4,113)

Loss on ordinary activities after taxation                                    (2,755)        (34,043)
Minority interests                                                               152           1,295

Loss for the financial year                                                   (2,603)        (32,748)
Dividends                                                                     (6,548)         (1,323)

Retained loss for the year                                                    (9,151)        (34,071)

Earnings per share
Headline diluted                                                                2.2p            3.7p
Basic and diluted                                                             (1.0p)         (13.2p)

Consolidated Balance Sheet
30 September 2002

                                                                           2002          2001
                                                                           £000          £000
Fixed assets
Goodwill                                                                 30,826        36,011
Tangible assets                                                           2,041         1,994
Associates                                                                  612         2,285
Other investments                                                         2,492         2,497

                                                                         35,971        42,787
Current assets
Debtors due within one year                                              18,225        15,366
Debtors due after one year                                                4,148         3,427
Cash at bank and in hand                                                 17,693        16,255

                                                                         40,066        35,048

Creditors: Amounts falling due within one year                          (38,426)      (34,448)

Net current assets                                                        1,640           600

Total assets less current liabilities                                    37,611        43,387
Creditors: Amounts falling due after more than one year                       -           (62)
Provisions for liabilities and charges                                   (1,241)       (2,577)

Net assets                                                               36,370        40,748

Capital and reserves
Called-up share capital                                                   2,778         2,608
Share premium account                                                    31,010        69,571
Option reserve                                                              239         1,001
Profit and loss account                                                   2,340       (31,145)

Equity shareholders' funds                                               36,367        42,035

Minority interests                                                            3        (1,287)

Total capital employed                                                   36,370        40,748

Consolidated Cash Flow Statement
For the year ended 30 September 2002

                                                                                  2002            2000
                                                                                  £000            £000

Net cash inflow from operating activities                                       10,393          13,303
Returns on investments and servicing of finance                                  1,080             789
Taxation                                                                        (2,300)         (3,665)
Capital expenditure and financial investment                                      (643)           (722)
Acquisitions and disposals                                                      (5,624)        (19,145)
Equity dividends paid                                                           (1,623)         (1,624)

Cash inflow/(outflow) before management of liquid resources and                  1,283         (11,064)
Management of liquid resources                                                   2,300          (2,300)
Financing                                                                          155          24,597

Increase in cash in the year                                                     3,738          11,233

Consolidated Statement of Total Recognised Gains and Losses
For the year ended 30 September 2002

                                                                          2002              2001
                                                                          £000              £000

Loss for the financial year
     Group                                                             (1,281)          (10,431)
     Associates                                                        (1,322)          (22,317)

                                                                       (2,603)          (32,748)
Gain on foreign currency translation                                       22                56
Adjustment to option reserve on lapsed options                            115                 -

Total recognised gains and losses relating to the year                 (2,466)          (32,692)


1.             Basis of preparation

This report is for the year ended 30 September 2002 and was approved by the
Board on 10 December 2002.

The financial information set out above does not constitute the Company's
statutory accounts for the years ended 30 September 2002 or 2001, but is derived
from those accounts. Statutory accounts for 2001 have been delivered to the
Registrar of Companies and those for 2002 will be delivered following the
Company's Annual General Meeting. The auditors have reported on those accounts;
their reports were unqualified and did not contain statements under s237(2) or
(3) Companies Act 1985.

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.      Earnings per share

The calculations of earnings per share are based on the following results and
numbers of shares.
                                                       Headline diluted        Basic and diluted
                                                              2002        2001        2002       2001
                                                              £000        £000        £000       £000

Loss for the financial year                                (2,603)    (32,748)     (2,603)   (32,748)
Amortisation of goodwill                                     2,065       3,840           -          -
Exceptional amounts written off goodwill and                 6,220      17,882           -          -
Exceptional amounts written off associates                       -      21,220           -          -
Impairment attributable to minority interests                    -       (948)           -          -

                                                             5,682       9,246     (2,603)   (32,748)

                                                                       2002                   2001
                                                    Number of shares ('000) Number of shares ('000)

Weighted average number of shares:
For basic earnings per share                                        258,372                248,663
Exercise of share options                                             2,837                  1,864

For diluted earnings per share                                      261,209                250,527

Headline diluted earnings per share is intended to provide a consistent measure
of Group earnings on a year on year basis.

3.             Cash flow notes

Reconciliation of operating profit to operating cash flows

                                                                         2002            2001
                                                                         £000            £000

Operating profit/(loss)                                                   713         (9,868)
Depreciation charges                                                      449            540
Amortisation                                                            1,905          2,842
Impairment                                                              6,220         17,882
Profit on sale of fixed assets                                            (69)             -
Profit on sale of own shares                                                -             (2)
(Increase)/decrease in debtors                                         (2,776)         1,106
Increase in creditors                                                   3,951            803

Net cash inflow from operating activities                              10,393         13,303

Reconciliation of cash flow to movement in net funds

                                                                         2002             2001
                                                                         £000             £000

Increase in cash in the year                                            3,738           11,233
Cash outflow from decrease in debt                                          -           14,496

Movement in net funds in year                                           3,738           25,729

Net funds/(debt) at 1 October                                          13,955          (11,774)

Net funds/(debt) at 30 September                                       17,693           13,955

                      This information is provided by RNS
            The company news service from the London Stock Exchange                   DG                                                                                                                                                                                                                                                             

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