ITE Group has announced its third-quarter dip in profits are in line with expectations, as the company prepares to take a majority stake in one of India’s largest privately owned exhibition organisers.
The group’s revenue of £58m, for the three months ending 30 June 2015 (2014: £73m), fell 17 per cent on a like-for-like basis compared to the same period last year.
Officials said the dip was in line with expectations, reflecting challenging trading conditions in Russia and weakness of the Euro and Ruble against the Pound.
ITE Group chief executive Russell Taylor told EN’s sister publication, EW, internal reporting and IMF data pointed to a recovery in Russia during 2016, after the country’s trading environment stabilised during the first half of the financial year.
“It will obviously have a delay on our results, but it’s certainly something to look forward to,” Taylor said.
The group will continue to diversify its event portfolio, which had previously been concentrated on Russia and the Ukraine.
Taylor also said he was excited about plans to increase the group’s 28 per cent stake in Mumbai-based organiser Asian Business Exhibition and Conferences (ABEC).
“We have the opportunity over autumn to turn that into a 60 per cent owned associate,” he added.
ABEC’s portfolio includes 60,000sq m of construction shows, education and fashion events.
“That will be a big thing for us, because being an associate is a bit like being a passenger in the car. It might well pave the way for us to develop more quickly in India in the future,” Taylor said. “India is one of the better performing economies at the moment.”
He added that recent falls in China’s stock market hadn’t affected sales of the group’s Sinostar joint venture events, Chinacoat and SF China, scheduled for November.
After launching joint venture AfricaBuild Lagos in May, Taylor said the group would increase the exhibition offering for Africa Oil Week.
“We’re going to run Africa Oil Week in October before we take any steps to expand further in Africa, it’s nice to et your feet on the ground and do something before you start doubling up your bets,” Taylor said.
The group’s board said it remained confident in the outlook for the remainder of the financial year, with 96 per cent of consensus revenues contracted.
As of 10 July 2015, the business had contracted revenue of about £130m for the full year, which was 14 per cent down on the previous financial year on a like-for-like basis.
The group had a net debt of £54m as of 10 July 2015, after spending about £54m on acquisitions, including a 50.1 per cent stake in Africa Oil Week, and deferred consideration during this financial year.
ITE Group officials said a secured debt facility of £100m gave the company a stable financial base to continue its diversification plans.
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