Hyve (HYVE) has launched an emergency rights issue in order to raise £127m, after the mass disruption of public gatherings plunged the events company into a deep full-year loss. The group, which designs and hosts events across the world, has postponed 48 and cancelled a further 13. Under its scenario planning, it does not expect any events to take place until next year apart from a handful in China. That translates to an anticipated 80 per cent hit to FY2020 revenues. Hyve’s slump into a pre-tax loss was driven by £167m in impairment charges, as the outbreak drives up discount rates and slashes profit forecasts.
Hyve completed two acquisitions during the period - the US-based Shoptalk and Groceryshop events - for a total outlay of £110m. The deals increased adjusted net debt by 44 per cent to £157m, hardly ideal given that corporations everywhere are prioritising capital preservation. Predictably, Shoptalk has been postponed by six months to September, and Hyve suggests this probably won’t take place in a physical setting.
Indeed, the group is developing its online capability in the absence of in-person events, though chief executive Mark Shashoua admits that "digital will not replace face-to-face events”. It is viewed as a complementary function and will be used to maximise the profile of Hyve’s brands.
Investec forecasts, which are under review, give adjusted pre-tax profits and EPS of £44.9m and 4p, respectively, for the Sept. 2020 year-end, rising to £66.2m and 5.8p in FY2021.
| HYVE (HYVE) | ||||
| ORD PRICE: | 19.8p | MARKET VALUE: | £ 162m | |
| TOUCH: | 19.7-20p | 12-MONTH HIGH: | 110p | LOW: 15p |
| DIVIDEND YIELD: | 8.1% | PE RATIO: | NA | |
| NET ASSET VALUE: | 21p* | NET DEBT: | 89%** | |
| Half-year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2019 | 108 | 1.9 | -0.1 | 0.90 |
| 2020 | 96.3 | -168 | -21.7 | nil |
| % change | -11 | - | - | - |
| Ex-div: | na | |||
| Payment: | na | |||
| *Includes intangible assets of £428m, or 52p a share **Includes lease liabilities of £20.4m | ||||
