International events organiser Hyve Group plc said it expected FY20 revenues to come in around £105m (US$133.3m) (2019: £221m) which, it said, reflected a “very strong start to the financial year but a significantly reduced event programme since March as a result of Covid-19”.
Issuing a trading update for the year ending 30 September 2020, prior to entering its close period and ahead of its preliminary results announcement on 1 December 2020, the group noted a number of regions in which Hyve operated were beginning to open but the situation remained fluid.
Following the relaxing of government measures to manage Covid-19 in several of these regions, the group has now safely run a number of domestic events in China and Ukraine. Hyve’s first Russian events since lockdown commenced 22 September (including WorldFood Moscow), which means the group is set to run 12 face-to-face events in Q4 of FY20, delivering c.£9m of revenues.
The group said it was in a resilient financial position; in addition to a £126m rights issue completed in June, Hyve said it had been successful in further insurance claim settlements and had taken significant cost saving measures to reduce cash burn. At 30 September, it expected net debt to be no more than £80m.
Nevertheless, the Board acknowledged that the timing and speed of the recovery of the global events industry remained highly uncertain with travel restrictions expected to remain in place for some time and further spikes in infections and government lockdowns a real possibility. “Against this challenging backdrop, we remain mindful that any events that do take place are likely to be smaller than previous editions and it may take some time for customer confidence to return as markets reopen,” the group statement added.
Since the last trading update in late July, the group said a further £9.1m in insurance payouts had been received, taking total recoveries secured to date to £22m.
The insurance cover, Hyve noted, was subject to the application of policy excesses and a per event limit which varied for each event, with an overall aggregate cap in respect of all insured events to 31 October 2020 of £62m.
Cost savings and cash burn
The Hyve cost-saving programme, announced in May, targeted £9m of income statement savings in the current financial year, and £40m in FY21. The group now expects to exceed the original FY20 savings target by c.£30m which is c.£5m ahead of management’s previously updated estimate.
Additional restructuring measures being introduced include the merging of Hyve’s UK and Global Brands operations as well as further streamlining of the group’s central headquarter overheads. “With these measures we are now targeting to exceed our FY21 savings target by between £5m and £10m on an annualised basis to a total of between £45m and £50m,” the statement said.
During the current quarter, the Group disposed of its entire event portfolio in Azerbaijan and Uzbekistan for a total consideration of up to c.£9.5m, payable over a number of years. Events in these regions were not expected to resume for some time, the group noted.
Hyve also announced that Andrew Beach, chief financial officer (CFO), has stepped down from the Board and will leave the group on 30 September 2020. He will hand over to John Gulliver, currently group chief operating officer (COO).
The Board said it was also restructuring the senior finance team and promoting from within the business. Gulliver will be appointed to the Board and to the newly-formed combined role of CFO and COO, effective from 1 October 2020.
James Warsop, the current group financial controller, will be promoted to group finance director.
The group said it was progressing its omnichannel strategy. ShopTalk Virtual Meetup is set to take place in October and will provide a key test case for the potential monetisation of a digitally delivered event.
Mark Shashoua, CEO of Hyve Group plc said: “The changes outlined to restructure the business are necessary steps for Hyve to take in order to adapt to the likely prolonged impact of Covid-19. Hyve took early and decisive action to strengthen its balance sheet when the crisis emerged and with cost savings now above previous projections alongside the receipt of insurance proceeds, we are well positioned to weather the Covid-19 crisis.”
“The return of 12 events since lockdown marks the early signals of a slow and safe return to face-to-face events, albeit we remain prudent and mindful that we may see further lock downs and it may also take time for customer confidence to return,” Shashoua added.