ITE closes out its TAG strategy

That’s the reason why ITE Group (ITE) is attempting to do more with less, by cutting the overall number of events it manages, in favour of promoting the most lucrative higher-margin affairs. The intensified focus – and targeted investment – on “shows which offer the best opportunities for growth” isn’t immediately obvious when you look at the gross margin – which, at 37 per cent, was flat on the 2018 half-year. But the group has been bedding in new events, including Mining Indaba – the world’s largest mining investment conference – which also accounts for the steep rise in amortisation charges. These ate into earnings, along with transaction and integration costs, while losses on the disposal of non-core events also constrained the bottom line. Nevertheless, on an adjusted basis, operating profit was 55 per cent to the good at £27.1m.

Management notes that the five largest recurring shows in the period which have had investment under its Transformation and Growth (TAG) initiatives, collectively delivered 14 per cent like-for-like revenue growth. Part of the TAG strategy is designed to improve delegate retention and with contracted revenue at 94 per cent of full-year consensus and forward bookings up by 11 per cent, the signs are positive.

Bloomberg consensus gives cash profit of £56.2m for the September year-end, giving adjusted EPS of 4.9p, rising to £61.6m and 5.3p in FY2020.