Recovery in its core Moscow market enabled corporate events organiser
These new businesses contributed £16m of the additional £41m of revenue generated during the year. Business also benefited from the largest biennial event operated by ITE – the Moscow International Oil and Gas Exhibition. However, even after excluding these factors, like-for-like revenues still rose 18 per cent during the year. Group operating profit rose by a third to £40m, too, which resulted in a static net operating margin for the period of 26 per cent.
While ITE's Russian market certainly isn't immune to global economic malaise, management thinks that business activity will continue improving next year on the back of forecast GDP growth for the country in excess of 4 per cent. Moreover, this year's acquisition of a 60 per cent stake in the YAPIbuild event provides ITE with exposure to Turkey's fast-growing construction sector. Group forward bookings, at £93m, are 8 per cent up on last year on a like-for-like basis.
Investec Securities expects to increase its EPS estimate for 2012 by about 1 per cent to 16p (from 15.8p).
|ITE GROUP (ITE)|
|ORD PRICE:||202p||MARKET VALUE:||£502m|
|TOUCH:||201-202p||12-MONTH HIGH:||261p||LOW: 155p|
|DIVIDEND YIELD:||3.0%||PE RATIO:||16|
|NET ASSET VALUE:||30p*||NET CASH:||£5.5m|
|Year to 30 Sep||Turnover (£m)||Pre-tax profit (£m)||Earnings per share (p)||Dividend per share (p)|
Ex-div: 4 Jan
Payment: 13 Feb
*Includes intangible assets of £130m, or 52p a share
The relative strength of the Russian economy, and ITE's increasingly robust market positioning, offer plenty of comfort. But we live in uncertain times globally and the shares, trading on a not so cheap 13 times expected earnings, are looking up with events. Fairly priced.
Last IC View: Fairly priced, 246p, 16 May 2011