Bringing the founder’s son back into ITE (ITE) after a 17-year hiatus has had a welcome impact on the top line. In his first set of results as chief executive, Mark Shashousa has been able to report a 5 per cent increase in like-for-like revenues at the group he co-founded in the early 1990s. That was ITE’s first organic growth in four years.
This progress is reflective of the new management’s focused strategy. Between 60 and 70 events – which are deemed “core” and contribute roughly 85 per cent of the top line – are set to receive a total of £20m of investment in the next three years under the group’s TAG ('transformation and growth') strategy. Just under a quarter of this spend was deployed in the reported period and it is already having an effect: the group’s top 10 events reported a 15 per cent increase in like-for-like revenues.
But heavy investment has hurt profits. After extracting one-off impairment and amortisation charges, adjusted pre-tax profits fell 26 per cent to £27m. With these costs due to persist in the year to September 2018, broker Numis has forecast pre-tax profits, on its own adjusted basis, of £31.5m, giving EPS of 8.2p (from £31.6m and 8.1p in FY2017). That said, cash generated from operations improved 3 per cent to £42.3m, which helped reduce net debt to £49.7m.
ITE (ITE) | ||||
ORD PRICE: | 177p | MARKET VALUE: | £476m | |
TOUCH: | 176-177p | 12-MONTH HIGH: | 197p | LOW: 141p |
DIVIDEND YIELD: | 2.3% | PE RATIO: | na | |
NET ASSET VALUE: | 25p* | NET DEBT | 55% |
Year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
2013 | 192 | 43.9 | 14.2 | 7.0 |
2014 | 175 | 41.5 | 13.8 | 7.4 |
2015 | 136 | 31.5 | 10.5 | 7.4 |
2016 | 134 | -4.1 | -3.6 | 4.5 |
2017 | 153 | -3.2 | -3.1 | 4.0 |
% change | +14 | - | - | -11 |
Ex-div: | 4 Jan | |||
Payment: | 5 Feb | |||
*Includes intangible assets of £154m, or 57p a share |