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ITE Group: Investec raises target price from 247p to 255p and maintains a buy recommendation
On Wednesday morning the Times’s Tempus column comments on the announced acquisition by independent exhibition organiser ITE of a 28% stake in the Indian firm ABEC, the biggest such outfit in that country. The Indian deal means that ITE now has the three biggest construction events in fast-growing Turkey, Russia and India. The way the industry works is that exhibitors from the West in one can be cross-sold space in the others. As well, it may have alleviated some investors’ fears that the pace of expansion was slowing down. “The long-term growth story is still there,” Tempus concludes.
Acquisition The company further announced that it had acquired a 28% stake in Indian exhibition business ABEC by its wholly owned subsidiary Airgate Holdings Ltd. The acquisition, which is worth the equavalent of £14m payable in cash upon completion, will be funded from existing cash resources and agreed debt facilities. ABEC generated profits of INR 140m (£1.6m) in the year ending 31 March 2012 and had gross assets of INR 1,724 (£20m) at completion. It runs 19 exhibitions across a variety of markets including construction, architecture and lifestyle. Commenting on the minority acquisition, Taylor added: "ABEC has a quality portfolio of events with strong market positions in sectors where ITE has an established presence such as construction, oil and gas and security. ABEC's events in the construction and design sector total more than 65,000m2 net of sold exhibition space, giving ITE an interest in India's dominant trade shows for this growing sector."
Broker comment Investec reiterated its 'buy' rating on the stock today, hailing a decent performance in a tough year. Full-year profit before tax and earnings per share were slightly ahead of estimates, Investec said, in spite of "acquisition consolidation, Mosbuild [its construction event] competition and biennial negative skew." Analyst Steve Liechti said: "Shares de-rated on adverse FX, but look attractive given B2B exhibition growth/strategic positioning." He said that the valuation - the stock is trading at 11.4 times current-year earnings - is now at the low end versus its B2B peers.
Revenue rose 11 per cent to 172m pounds year-on-year at conference and exhibition organiser ITE Group, according to the company's preliminary results which were published this morning. Headline profits edged up 3% to £53m while the company announced that £95m of revenue had been booked for 2013. Russell Taylor, Chief Executive Officer of ITE Group, commented: "ITE has delivered record results in its lesser biennial year. This reflects the strength and breadth of our market leading events portfolio and a first time contribution from the acquisitions." He added that the major impact on the group's results had come from ITE's premier construction event, Mosbuild, which represents one third of ITE's exhibition business in Moscow. "Following a decision by its host venue to launch its own competitive event in the construction sector, ITE had in 2011 made the decision to re-locate Mosbuild to another venue which offered more secure terms for its future. The results this year reflect the financial impact of this upheaval but also underpin the strength and resilience of this event. Mosbuild in underlying terms stayed broadly the same size - despite facing the dual challenges of re-location and new competition."
ITE Group: Westhouse Securities raises target price from 245p to 261p; buy recommendation unchanged. Numis raises target price from 288p to 294p, while maintaining a buy recommendation.
Investec has reiterated its 'buy' recommendation and 247p target price for conference and exhibition organiser ITE Group after the company managed to beat forecasts in a tough year. Full-year profit before tax and earnings per share (EPS) were slightly ahead of estimates, Investec said, in spite of "acquisition consolidation, Mosbuild [its construction event] competition and biennial negative skew." On the back of the full-year 'beat' and positive outlook, the broker has raised its EPS forecasts of 2-3%. The market reaction to the results on Tuesday was bullish, with shares up 8.47% at 213.9p before the close. Analyst Steve Liechti said: "Shares de-rated on adverse FX, but look attractive given B2B exhibition growth/strategic positioning." He said that the valuation - the stock is trading at 11.4 times current-year earnings - is now at the low end versus its B2B peers.
iTE Group, the exhibitions group specialising in emerging and developing markets, said fourth quarter trading has continued to reflect positive trading conditions as it issued a confident outlook for this year and beyond. In its company update for the year ending 30 September 2012 the group enjoyed good regional growth despite increasing currency headwinds. Revenue for the full year is expected to be around £170m compared to £155m in 2011 and in line with market expectations. The group ran 40 events during the final quarter producing revenue of around £27m, up 10% from last year on a like-for-like (LFL) basis. MODA, ITE's Birmingham based fashion event business performed well in a difficult trading environment. World Food Moscow, its food exhibition business recorded its largest ever event with a 6% increase in space sales to 24,300sqm. "The group continues to experience good levels of organic growth and to generate strong cash balances which together with a strong balance sheet will allow the Group to continue to further develop and expand its business," it said in an update. "The Board remain confident in the group's prospects for 2013 and beyond."
Outlook Volume sales for the financial year ending 30 September 2013, including Mosbuild, are progressing in line with management expectations. Over the last year Sterling has strengthened against the Group's two principal trading currencies, the Euro and the Ruble. As a result, like for like Sterling yields for 2013 bookings to date are on average circa 6% lower than for this time last year. As at 27 September 2012, the Group had booked £68m of revenue for the 2013 financial year, representing circa 37% of current market expectations for the year. The Group continues to experience good levels of organic growth and to generate strong cash balances which together with a strong balance sheet will allow the Group to continue to further develop and expand its business. The Board remain confident in the Group's prospects for 2013 and beyond.
Fourth Quarter Trading The Group ran 40 events in the fourth quarter producing revenue of circa £27m, which represents a 10% improvement over last year on a like-for-like basis. The principal trading highlights in the fourth quarter were: · MODA, the Group's market leading UK fashion event based at the NEC in Birmingham performed well in a difficult trading environment. A further expansion of its sector spread to include urbanwear helped the event to reach record levels with sales of 18,700sqm. · World Food Moscow, the Group's leading food exhibition also recorded its largest ever event with a 6% increase in space sales to 24,300sqm. Financial position The Group had net cash of circa £12.0m as at 26 September 2012.
Pre-close trading update for the year ending 30 September 2012 ITE Group plc, the international exhibitions group specialising in emerging and developing markets, has today issued the following update for the year ending 30 September 2012, prior to entering its close period and ahead of its preliminary results announcement on 4 December 2012. Results for the fourth quarter have continued to reflect the positive trading conditions noted in our previous statements, with good regional growth despite increasing currency headwind. Revenue for the full year is expected to be circa £170m (2011: £155m) in line with market expectations.
http://www.investegate.co.uk/Article.aspx?id=201210010700085261N
BROKERS REMAIN BULLISH FOR ITE GROUP 17 July 2012 PEEL HUNT retains its BUY recommendation for ITE Group with a target price of 275p. NUMIS retains its BUY recommendation for ITE Group offering a target price of 289p. 19 July 2012 INVESTEC reiterates its BUY recommendation for ITE Group with a target price of 260p. 20 July 2012 GOLDMAN SACHS retains its Conviction BUY rating for ITE Group, setting a target price of 320p. 24 August 2012 SINGER CAPITAL MARKETS reissued its BUY rating for ITE Group and has given a target price of 284P P.S. Here's some links about SCLP, one of the hottest stocks at the moment: http://www.euroinvestor.com/community/discussionthread.aspx?iid=2467508&threadid=256596&mode=2 http://www.euroinvestor.com/community/discussionthread.aspx?iid=2467508&threadid=255276&mode=2 http://www.euroinvestor.com/community/discussionthread.aspx?iid=2467508&threadid=257550&mode=2
Tempus is equally downbeat on exhibitions organiser ITE which focuses mainly on emerging markets. Exhibition earnings will always be “lumpy”, says Tempus, because some of the big shows are biennial. At 11 times earnings, the column says hold.
Financial position The Group had net debt of £1.7m as at 13 July 2012, after spending circa £17m on acquisitions and deferred consideration during this financial year. Outlook Year to date, the Group has delivered solid organic growth supplemented by the contribution of new business acquired last year. As at 13 July 2012, the Group had £163.6m of sales booked for the current financial year (this time last year: £146.8m), representing approximately 96% of the consensus revenue expectations for this financial year. The Group continues to experience good trading conditions in its principal markets and the Board remains confident in the Group's prospects for the year.
Interim Management Statement ITE Group plc is today publishing its Interim Management Statement for the period from 1 April 2012 to 16 July 2012, incorporating the Group's third quarter trading period from 1 April 2012 to 30 June 2012. Trading Performance Trading conditions in our core markets remain as reported in our interim results statement of 21 May 2012 and the Group continues to trade in-line with management expectations. Revenues in the three month period to 30 June 2012 were £76.1m (2011: £79.4m). This year's result does not include a contribution from the biennial Moscow International Oil & Gas exhibition but does include first time contributions from Turkeybuild, which the Group acquired in July 2011, and from the spring events of the recently acquired Automotive and Beauty portfolios in Ukraine. On a like-for-like basis revenues for the third quarter were approximately 3% lower than the previous year. The most significant influence on this was the performance of the Group's Mosbuild event in its biennially weaker year. The remainder of ITE's portfolio, excluding Mosbuild, delivered like for like revenue growth of circa 6% for the quarter.
http://www.investegate.co.uk/Article.aspx?id=201207170700037799H
ITE'S PROFIT RISES 44 % ON HIGHER VOLUME SALES Exhibition and conference organiser ITE Group Plc reported a higher first-half profit as volume sales jumped 30 percent, and it raised its interim dividend. The British company, which organises around 200 trade exhibitions and conferences each year in 14 countries, said its booked revenue for the year, including sales from newly acquired businesses, rose 6 percent on a like-for-like basis and stood at 156.2 million pounds ($246.9 million) as at May 18. For the six months ended March 31, ITE's adjusted pretax profit increased 44% to 13.1 million pounds from 9.1 million pounds a year ago. Revenue jumped 29 percent to 68.6 million pounds. On a like-for-like basis, revenue was up 9 percent. ITE, which gets half its revenue from Moscow, said volume sales increased to 367,900 square meters, with those in Russia nearly doubling. On a like-for-like basis, volume sales rose 12 percent. Shares of ITE, which raised its interim dividend by 11 percent to 2.1 pence, were up 4 percent at 212.9 pence at 0706 GMT on the London Stock Exchange on Friday. Source: http://www.reuters.com/article/2012/05/21/ite-idUSL4E8GL22X20120521?type=companyNews P.S. Here's a couple of links about SCLP, one of the hottest stocks at the moment: http://www.euroinvestor.com/community/discussionthread.aspx?threadid=252803 http://www.euroinvestor.com/community/discussionthread.aspx?threadid=253089
Here is the source for the previous post: http://www.businessweek.com/news/2012-05-21/ite-looks-to-make-further-acquisitions-in-india-southeast-asia
ITE LOOKS TO MAKE FURTHER ACQUISITIONS IN INDIA, SOUTHEAST ASIA ITE Group Plc (ITE), the London-based international events organizer that does most of its business in Russia, is looking to make acquisitions in India, Turkey and southeast Asia. The company expects to make further purchases in India and possibly Turkey over the next year, Chief Executive Officer Russell Taylor said today. The “right” acquisition in China may take as long as three years to find, he said. “We are planning to progressively invest our cash balances,” Taylor said in a telephone interview. “We are looking at countries like Indonesia and Malaysia and you can never ignore the possibility of investing in China.” ITE, which operates in more than 30 countries, bought two companies in Ukraine and one in India in the fiscal first half and is due to complete another purchases in India in the next few days, Taylor said. Acquisitions accounted for two-thirds of the increase in first-half revenue. ITE had net cash of 16.4 million pounds on March 31, compared with 5.5 million pounds on Sept. 30 after free cash flow of 32.7 million pounds in the first half. Its biggest acquisition in the past five years cost 33 million euros ($42 million), according to data compiled by Bloomberg. Net income in the six months ended March 31 surged 89 percent to 5.1 million pounds ($8.1 million), or 2.1 pence a share, from 2.7 million pounds, or 1.1 pence, a year earlier, the company said in a statement. Revenue rose 29 percent to 68.6 million pounds. On a same-store basis revenue booked so far in the current year is 6 percent ahead of this time last year.
Commenting on the acquisition, ITE's Chief Executive Officer, Russell Taylor, said: "The addition of these two exhibitions to ITE's Ukrainian business is consistent with our strategy of building market leading positions in core markets and sectors and will complement ITE's existing activities in Kiev. These events have strong market positions in Ukraine and will benefit from access to ITE's expertise and international reach."
ITE's leading position in the Ukraine market ITE Group plc, the emerging and developing markets exhibitions specialist, today announces that its wholly owned subsidiary, ITE International Holdings BV acquired Kiev based Limited Liability Company BeautexCo (Beautex) from BCI R&R Limited, a company registered in Cyprus. Beautex runs two exhibitions each year, Intercharm and Beautyexpo. Both are trade exhibitions for the professional beauty trade and cosmetic and aesthetic medicine industry in Ukraine. On acquisition, Beautex had gross assets of nil. The exhibitions are forecast to generate revenues of €2.4m in the year ending 30 September 2012 and are expected to be earnings enhancing in ITE's 2012 financial year.
http://www.investegate.co.uk/Article.aspx?id=201204120700121701B
Russel Taylor, chief executive of exhibitions and conferences firm ITE, has sold £232,228-worth of shares in the firm just days after the firm saw full revenues and profits jump as its sector defied the general economic gloom. Taylor, who joined the firm in 2003 and took up his current role in 2008, disposed of 116,962 shares at 198.55p each in order to cover the tax liabilities on the shares. At the end of November the firm reported adjusted profit before tax for the year to the end of September at £51.4m, up from £36.6m the year before.
Outlook The Group has enjoyed a strong recovery in its core Moscow market. The regional markets in Russia have also enjoyed a recovery and the adjacent CIS markets are now showing improving results, albeit not yet as strongly as in Russia. There is expected to be further economic growth in Russia this year as well as a continuation of the recovery in the CIS markets. At 25 November, forward bookings are £93 million which is in line with the Board's expectations and on a like-for-like basis represents growth of circa 8% over last year's revenues booked at the same time. The Group has a strong portfolio of exhibitions in emerging and growing markets. With its cash flow and strong balance sheet, the Group is in an excellent position to continue to grow its business both organically and through selective acquisitions. The Board remains focused on executing its strategy and, whilst ITE is not immune to changes in the world economy, the Board remains confident of the Group's future prospects.