Falling oil prices, a fickle rouble and economic sanctions on Russia conspired to send operating profit at ITE (ITE) down 7 per cent to £42m. The international exhibition group earns nearly 60 per cent of its revenues from the troubled nation, which is slated to fall into recession next year.
Adjusting for event timings and excluding acquisitions, ITE's sales in Russia fell 9 per cent, amid weak demand from the construction and energy industries. Meanwhile, tensions in Ukraine sent revenue from eastern and southern Europe tumbling 39 per cent, and headline pre-tax profits took a £4m hit from currency movements. The current year hasn't begun much better, with like-for-like, constant-currency revenues down 9 per cent. However, ITE has already booked £81m in revenues, or just over half of the market's full-year target.
ITE attempted to offset its problems in Europe by spending £50m on acquisitions in new territories and industries. It bought a 50 per cent stakes in Chinacoat, a surface finishing event, and Indobuildtec, the leading construction event in Indonesia. It has also acquired Beauty Eurasia, an Istanbul-based cosmetics and beauty fair, and Eurasia Rail, a Turkish transport and logistics exhibition. But financing this strategy hit the balance sheet, with £23m in net cash turning to £15m in net debt.
Broker Investec forecasts pre-tax profits of £52m in 2015, giving EPS of 17p.
| ITE (ITE) | ||||
|---|---|---|---|---|
| ORD PRICE: | 150p | MARKET VALUE: | £375m | |
| TOUCH: | 149-150p | 12-MONTH HIGH: | 316p | LOW: 142p |
| DIVIDEND YIELD: | 4.9% | PE RATIO: | 11 | |
| NET ASSET VALUE: | 42p* | NET DEBT: | 14% | |
| Year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 114 | 31.3 | 10.0 | 5.7 |
| 2011 | 155 | 39.1 | 12.8 | 6.1 |
| 2012 | 172 | 40.5 | 13.0 | 6.5 |
| 2013 | 192 | 43.9 | 14.2 | 7.0 |
| 2014 | 175 | 41.5 | 13.8 | 7.4 |
| % change | -9 | -6 | -3 | +6 |
Ex-div: 07 Jan Payment: 09 Feb *Includes intangible assets of £102m, or 41p a share | ||||
