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Tarsus looks to the second half

Here's a riddle: the group’s largest events happen in the second half of every odd-numbered year
July 27, 2017

The biennial occurrence of Tarsus’s (TRS) biggest events means it is best to compare results from every other year. The group’s major shows – including Labelexpo Europe and the Dubai Airshow – are approaching in the second half. Adjust for acquisitions and this seasonal effect, and revenue rose 4 per cent in the reported period. This lifted adjusted pre-tax profit, which was up a third from the first half of 2015, to £6.8m.

IC TIP: Buy at 298p

Forward bookings for annual events also look good, 9 per cent ahead of 2016 on a like-for-like basis. But foreign exchange headwinds have caused Investec to cut its guidance for the year to December 2017. The broker now expects adjusted pre-tax profit and EPS of £39.2m and 26.1p, respectively, (from £24.6m and 19.6p in 2015).

Replication of successful events is helping Tarsus expand geographically. The Global Educational Supplies and Solutions (GESS) event once again delivered good results in its original Dubai location, and a new version of the event in Mexico helped the Americas division report 34 per cent year-on-year growth in revenue to £16.3m. In October, GESS is due to take place in Turkey for the first time. Here management had “budgeted cautiously” due to the turbulent political backdrop but is now starting to see a recovery in demand.

TARSUS (TRS)   
ORD PRICE:298pMARKET VALUE:£337m
TOUCH:298-300p12-MONTH HIGH:303pLOW: 240p
DIVIDEND YIELD:3.2%PE RATIO:44
NET ASSET VALUE:50.4p*NET DEBT:150%
Half-year to 30 JunTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
201627.0-3.1-3.12.7
201739.8-1.4-3.23.0
% change+48--+11
Ex-div:30 Nov   
Payment:12 Jan   
*Includes intangible assets £194m, or 171p a share