In his latest blog, CloserStill Media and Nineteen Group chairman Phil Soar explores the recent financial performance of leading trade show companies, examining profit margins, growth rates, and industry trends that reveal the resilience and strength of the exhibition sector.
I have commented on the excellent financial results from our trade show companies in the last few months. Colin Morrison took up this theme, after the Financial Times had said the same thing, and published a commentary in his Flashes and Flames.
As many readers of Exhibition News do not read either of those two publications, it seemed to me that the results of Colin’s work were worth repeating.
He looked at 13 of our largest companies and took the latest results which were available – usually company results statements, or annual accounts, or press releases which some companies issue. Most are completely up to date, but some will have a time lag as they have not issued anything in recent months.
Though I am a director of two of the thirteen companies, I was not a participant in the collation of this information.
Largest non-messen companies ranked by profit margin
| Margin | Annual | EBITDA | |||
| Growth | £M Sterling | ||||
| RX | 32% | 11% | 398 | ||
| CloserStill | 32% | 20% | 80 | ||
| Nineteen | 31% | 96% | 23 | ||
| Clarion | 30% | 15% | 160 | ||
| Hanson Wade | 28% | 29% | 21 | ||
| Emerald | 27% | 14% | 92 | ||
| Questex | 27% | 10% | 22 | ||
| Informa (Events) | 27% | 11% | 655 | ||
| Easyfairs | 26% | 21% | 52 | ||
| Regent | 26% | 10% | 11 | ||
| Terrapinn | 21% | 28% | 23 | ||
| DMG | 16% | 18% | 51 | ||
| Hyve | NA | 16% | NA |
Why have margins improved so noticeably?
There are a number of points to make:
- This list includes almost all the large trade show/exhibition companies excluding Messen type organisations (such as the German halls) which tend to have very low margins because of their principal role in bringing trade into their city owned venues. Comexposium is one large organiser which is missing from the list.
- Colin, like all of us, can only work with the information which is available – some of the entries may change with upcoming results.
- The profit margins generated by the first 10 of these companies are truly remarkable – all 26% and above. It is striking that there is very little spread or differential. Above a certain annual turnover – which appears to be just under £100 million a year – almost all of the companies generate returns which are quite remarkably similar. This surely tells us something about the industry – that the processes, the operations, the pricing protocols and the management objectives, might appear to be somewhat standardised. Of course 32% is better than 27% – but not by a massive amount and any company which can achieve such high margins with the cash coming in up front (and the benefit of slot protection) should be a very attractive asset for any financial buyer. It is possible that staff moving from company to company bring methodologies with them and thus nearly all companies benefit from “shared expertise”. It is also interesting to speculate whether a company of £100M turnover and above could break away from these margins and do materially better – with a small number of large shows a company can do better (Spearhead was making 44% in the early 2000s).
- Terrapinn and DMG appear to have lower margins. This may be the case with Terrapinn because it is still rather conference orientated, but the DMG figure does not ring true and is probably a function of the way central and other costs are allocated in the Group.
Growth rates in the past 18 months also startle
The annual growth rates are also startling. Of the 13 companies most appear to be growing at around 20% per annum. There is probably still some “Covid Catch Up” in these figures because they reflect 2024 which was, in many ways, still a recovery year – particularly for large biennials. Nonetheless, inflation had fallen to around 3-5% in the period we are speaking about.
Of course, the larger groups, and in particular Informa and RX, will be growing at a slower rate than smaller companies like Nineteen (it is easier to grow at 20% if your turnover is £10 million than if it is £1 billion).
Overall, UK based companies have been growing at 14%
Thus if we take the annual growth for each of the companies and divide by their total EBITDA, we actually get a “real” average growth rate for the thirteen businesses of some 14%. This would appear to be the best estimate of the “average” growth rate in annual profits in the past 12-18 months.
It is interesting that eight of our home-based UK businesses appear to be growing at a faster rate than the world average – in order of best performance (fastest first) Nineteen, Hanson Wade, Terrapinn, Easyfairs, CloserStill, DMG, Hyve and Clarion.
Our’s is a business which has shaken off Covid
Of course, this growth is not all “organic” – it incorporates both existing events and also acquisitions in the relevant year(s). We know from Informa and RX announcements in the past few weeks that they have seen circa 8% “real” growth in their portfolios. This suggests that of the 11% annual growth which Colin quotes, some 8% would be organic and (presumably) 3% from acquisitions. Still very impressive numbers for such large operations – Colin gives Informa’s event turnover as £2,411,000,000 and RX’s as £1,239,000,000.
Let me say again that this material is “best” available and cannot be guaranteed to be exact in any case. Nonetheless, the overall impression is of an industry – based largely in West London – which is growing fast, with excellent margins and which is very, very healthy. Good news indeed.
