ITE beats expectations as Asian prospects strengthen - UPDATE

3rd Dec 2013 07:43

- Record annual profits- EPS ahead of consensus at 19.3p- 55 per cent of 2014 expected revenue bookedExhibitions and conferences organiser ITE Group unveiled record annual results as it firmly established itself in the Asian exhibition market.The FTSE 250 group lifted revenues 12% to £192m and profit before tax and exceptional items (PBT) to a record £59.4m, which was ahead of its recent pre-close indications. A 14% rise in earnings per share (EPS) to 19.3p was ahead of 18.55p consensus forecasts, with an expected dividend of 7p up from 6.5p last year. This was a stronger year in its biennial cycle, when it holds more of its two-yearly conferences and exhibitions, but ITE's expansion had more to do with a rich mixture of organic and acquisition led growth, according to Chief Executive Russell Taylor. "The group has now firmly established itself in the Asian exhibition markets through its investments in ABEC in India, Tradelink and ECMI in Malaysia and, since the end of the financial year, in Sinostar in China," he said."Good organic growth across our core portfolios in Russia and the CIS together with a strong biennial performance from the Moscow International Oil and Gas Exhibition have combined with the newly acquired businesses in Asia to deliver record financial and operating results."Trading conditions in most markets was good throughout the year with the Russian regional offices all reporting revenue growth of more than 10%, with trading conditions in the other Central Asia markets supporting strong revenue growth, though UK, Turkish and Ukrainian businesses performed less well.The recently inked Sinostar joint venture means ITE enters the new financial year with good business prospects in three of the major emerging market economies: Russia, India and China and has booked £106m revenues for the new financial year, representing 55% of market expectations for the period and running 7% ahead of last year on a like-for-like basis.Currency fluctuations were not a significant factor in the results, but the group's results remain sensitive to sterling strength against the currencies of ITE's markets and broker N+1 Singer observed that if the pound loses some of its strength "ITE will see upgrades". Numis added that even with post-year-end acquisitions announced in Turkey and China it still forecasts cash on balance sheet at the 2014 year end. "We expect ITE to continue to use its strong balance sheet to make bolt-on acquisitions in complimentary geographic locations and vertical niches."Numis' PBT and EPS forecast for 2014 moves from £59m and 18.6p to £60m and 19.7p, and newly published 2015 estimates of £68.5m PBT and 22.1p EPS.Shares in ITE were up 3.3% to 304.3p at 10:05 on Tuesday. OH