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ITE stumbles as Russian events fail to draw crowds

The events organiser suffered from weak trading conditions in Russia and Central Asia
ITE stumbles as Russian events fail to draw crowds

Regional tensions, currency volatility and the depressed oil price have weighed on exhibition bookings in Russia and Central Asia, dealing yet another blow to ITE (ITE) in the reported period. Although acquisitions mitigated the damage, the events organiser's adjusted operating profits fell 19 per cent to £39.6m.

IC TIP: Hold at 147p

Exclude acquisitions, differences in event timing and a £6.6m currency impact, and ITE's revenues slid 8 per cent. Comparable sales slumped 16 per cent in Russia and 8 per cent in Central Asia, which together made up 54 per cent of turnover, as fewer exhibitors purchased space at events such as Mosbuild and Kazakhstan Oil & Gas Exhibition.

More positively, like-for-like revenue surged a third in Asia and rose in ITE's other two regions, as strong showings in China and Ukraine offset declines in Turkey and elsewhere. Management also diversified the business by raising its stakes in Africa Oil Week and ABEC - which puts on the Acetech construction event in India - and acquiring an organiser of industrial fasteners exhibitions in China.

ITE's new chief executive and finance director have launched a strategic review and plan to share their findings in May. Broker Numis expects adjusted pre-tax profits of £34.5m in the Sept 2017 year-end, giving EPS of 10p, down from £36.5m and 10.7p in FY2016.

ITE (ITE)
ORD PRICE:147pMARKET VALUE:£385m
TOUCH:147-147.3p12-MONTH HIGH:181pLOW: 125p
DIVIDEND YIELD:3.1%PE RATIO:na
NET ASSET VALUE:27p*NET DEBT:61%

Year to 30 SepTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
201217240.513.06.5
201319243.914.27.0
201417541.513.87.4
201513631.510.57.4
2016134-4.1-3.64.5
% change-1---39

Ex-div: 29 Dec

Payment: 6 Feb

*Includes intangible assets of £169m, or 64p a share