Russian trading drags on ITE Group

Oliver Smith
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BRITISH trade show organiser ITE Group said like-for-like sales in Russia, its biggest market, have been running 20 per cent behind last year’s over the past two months.

“Trading conditions in Russia have deteriorated over the past two months following the fall in oil prices and the consequent fall in the value of the rouble against international currencies,” said ITE in a trading update yesterday.

ITE, which generated about 59 per cent of its revenue from Russia in 2014, saw its shares fall 6.1 per cent following yesterday’s update.

“This first quarter interim management statement is fine, but seasonally small and outlook comments reflect more material volume falls in Russia,” wrote Investec analyst Steve Liechti in a note yesterday, downgrading his target price from 195p to 180p but retaining a buy recommendation.

“Our buy [rating] is based on the long term quality of ITE operations, but near term catalysts are scarce and continuing geopolitical and macro risks remain, not helped by a falling oil price,” he added.

ITE’s total like-for-like trading volumes were 17 per cent lower than this time last year, and like-for-like revenue on a constant currency basis was trailing by 15 per cent.

“This year’s first quarter result reflects a weaker biennial pattern than the previous year combined with the full impact of weaker trading in Ukraine resulting from the ongoing conflict in the east of the country,” said ITE.

Kepler Cheuvreux analysts said none of the other large exhibition organisers had exposure to Russia, and they did not see any impact on UBM, Informa or Reed Elsevier. ITE’s shares closed down at 135p.

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