ITE Group has announced Mark Shashoua is to become the company’s next chief executive, with Russell Taylor standing down as group CEO from 1 September.
The news came as interim trading results were announced, 9 May.
An ITE statement said the Group had delivered “a creditable set of interim results, against some challenging trading conditions in its core markets”. Revenues of £64m for the first six months were 13% higher than last year and headline profits before tax of £19m were 8% better than over the same period last year.
The results reflect the full benefit of acquisitions made in the last financial year, the Group statement said, together with the effect of consolidating the results of former Indian associate business. This had helped increase underlying operating profits by circa £6m. Those gains were partially offset by the ongoing effect of the current trading environments in the oil and gas dependent economies of Russia and Central Asia, and the effect of their weaker currencies on ITE results.
ITE’s like-for-like volume sales in Russia were down 5% over the first six months of the year. The company described trading in Russia as “still challenging but prospects are improving”.
ITE expressed confidence in the full year outcome with over 90% of revenues for FY 2016 contracted.
Newly acquired businesses making a first time contribution were Africa Oil Week and some of the Breakbulk portfolio that did not take place in the previous financial year.
In January 2016 the Group announced a small bolt-on acquisition of an industrial equipment show in China, Shanghai Ebseek, which has provided a platform for ITE to develop its business in the Shanghai exhibition market. The Group said also it was well advanced in its plans to acquire a further small business in Shanghai. The Group said it was anticipating a period of integration and development for its recent acquisitions.
In other regions, the Group said it had enjoyed a good trading environment in most of Asia, except the oil dependent Malaysia.
The replacement of Taylor by Mark Shashoua as group CEO, ITE described as “part of an orderly leadership transition”.
Since November 2011, Shashoua, has been CEO of i2i Events Ltd (“i2i”), an international high-growth B2B events company, part of Ascential Plc. Before joining i2i, he was involved in establishing Expofund Ltd, a corporate investment fund and was an operating partner with Advent International (2009-2011). In 2000 he co-founded and spent nine years at Expomedia Group, which was floated on the Alternative Investment Market in December 2001.
Shashoua was a founder of ITE in the early 1990’s and was MD from 1995 to 1998 and then CEO upon flotation on the London Stock Exchange.
A search is also underway at ITE for a chief financial officer.
Marco Sodi, chairman of ITE welcomed Mark Shashoua to ITE, describing his as “a key figure in the international events industry for over 20 years”.
“I would like to thank Russell for his tremendous contribution to ITE over the years both as chief executive officer and chief financial officer,” Sodi added. “He has actively taken the company into new markets where there is clear opportunity for future growth. We wish him all the best in his future endeavours.”
On his appointment, Shashoua said: “I’m delighted to be joining ITE. During Russell’s tenure he has developed the business from its original Eastern European roots and expanded it into multiple markets. The business enjoys many market leading events in the geographies it serves and I look forward to actively developing the business moving forward.”
Asked what he thought was his proudest achievement at ITE, Taylor, told CN: “The establishment of a genuine Asian business”. He said that the focus on Russia had been as high as 90% of the business 10 years ago, whereas it was now 50% Rest of the World and 15% Asia, with Russia accounting for 35%.
He also told CN he would be looking to stay active in the sector, and “possibly have a stab at becoming a chairman”.
A short term dividend lowering to 1.5p from 2.5p was likely to go up in future with Taylor saying the policy was to “maintain over two times earnings cover going forward.
Analysts Investec said the dividend cut was unlikely to be taken well but that it was “more about cover build than a cash ‘crisis’. New CEO appointment looks a net positive.” The advice was to “buy for long-term value with good fundamentals/yield, but near term is still tough with oil price/domestic weakness hitting FX, GDP and Russia/CIS”.
Key risks underlined were Ukraine/Russia situation and GDP prospects feeding to ITE events.
Numis added in its analysis of the news that ITE Group remained good value at current levels, with a ‘buy’ recommendation.