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Russia the main event for ITE

RESULTS: Economic resurgence in Russia and promising start-up shows bode well for exhibitions promoter ITE
December 1, 2010

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.

IC TIP: Hold at 183.2p

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)

ORD PRICE:183pMARKET VALUE:£455m
TOUCH:182-183p12-MONTH HIGH:195pLOW: 118p
DIVIDEND YIELD:3.1%PE RATIO:18
NET ASSET VALUE:29p*NET CASH:£23m

Year to 30 SepTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
200682.424.86.93.5
200799.133.79.14.5
200811034.49.45.3
200911741.512.85.5
201011431.310.05.7
% change-3-25-22+4

Ex-div: 5 Jan

Payment:14 Feb

*Includes intangible assets of £79.4m, or 32p per share

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