It’s important to remember that many of ITE’s biggest and most profitable shows are bi-annual, and weren't held this year. In that context, the 30 per cent slump in operating profit to £29.9m it reported wasn't unexpected - in fact, headline revenue and pre-tax profits beat expectations by 3 per cent and 5 per cent respectively.
But the key message is that of sustained recovery in Russia, which represented almost 60 per cent of group revenue last year. Over £4m of revenue also came from start-up shows in India, a region that holds promise, while acquired exhibitions weighed in with another £8m, including several big events in Turkey, although these were less profitable and meant ITE’s gross margins fell 3 points to 49 per cent. With cash in the bank ITE has plenty of firepower for future acquisitions. It also starts the year with forward bookings of £74m, 10 per cent more than it started with last year despite widespread event downsizing.
Broker Altium Securities says it will up its underlying 2011 EPS estimate by 8 per cent to around 14.1p on pre-tax profit of £44.6m (from 11.6p and £36.6m in 2010).
ITE GROUP (ITE) | ||||
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ORD PRICE: | 183p | MARKET VALUE: | £455m | |
TOUCH: | 182-183p | 12-MONTH HIGH: | 195p | LOW: 118p |
DIVIDEND YIELD: | 3.1% | PE RATIO: | 18 | |
NET ASSET VALUE: | 29p* | NET CASH: | £23m |
Year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
---|---|---|---|---|
2006 | 82.4 | 24.8 | 6.9 | 3.5 |
2007 | 99.1 | 33.7 | 9.1 | 4.5 |
2008 | 110 | 34.4 | 9.4 | 5.3 |
2009 | 117 | 41.5 | 12.8 | 5.5 |
2010 | 114 | 31.3 | 10.0 | 5.7 |
% change | -3 | -25 | -22 | +4 |
Ex-div: 5 Jan Payment:14 Feb *Includes intangible assets of £79.4m, or 32p per share |