ITE 'resilient' as Russia business stabilises

AFRICA – International conference and event organiser, ITE Group, says its business in Russia “has now stabilised” after a difficult first half which saw pre-tax profits fall 3.9% to £17.5m. The company, which organises over 240 conferences and exhibitions a year, had been hit by a challenging trading environment in Russia and the Ukraine, its largest markets. In its latest interim report, the company says volumes in Russia dropped 16% as a result of the economic slowdown and the absence of two biennial events. The group now says the trading environment in Russia has stabilised and that it has maintained its gross profit margin on events by reducing costs. Ukraine, however, continues to be severely impacted by political issues but accounts only for 2% of ITE profits in this financial year (3% in 2014). Overall, the company is reporting revenues down 21.2% to £56.1m from £71.2m, with net debt rising from £1.8m to £56.1m, largely due to the purchase of Eurasia Rail in Turkey, Africa Oil Week in South Africa and Breakbulk’s series of events. The acquisitions should also help diversify the international portfolio of events. The group’s March acquisition of a 50.1% stake in Africa Oil Week (AOW) for £16m, part financed by a £12m placing of shares, establishes a first-time presence for ITE in Africa, and provides the group with a base from which to grow its portfolio of events across the continent. ITE claims its acquisitions have been successfully integrated and operating performances are in line with initial expectations. The board has maintained an interim dividend of 2.5p per share (2014: 2.5p per share). ITE CEO Russell Taylor (pictured) says: “ITE has delivered a good first half performance despite a challenging trading environment in the group’s largest market. The recent acquisitions of Eurasia Rail in Turkey, Africa Oil Week in South Africa and Breakbulk’s series of events have helped to diversify the group’s presence outside Russia, and our businesses in Asia and Turkey continue to perform well. “Looking forward, the trading environment in Russia has now stabilised. ITE remains in a strong financial position and we continue to seek opportunities to expand the business. The group enters the second half with good visibility on current year bookings and the board has confidence in the full year outcome.”