Exhibitions and conferences group ITE is bucking the gloom in the market after an upbeat trading statement.
The company's shares have been unloved because of concerns about how the global downturn would hit its 190 conferences around the world, with particular concern regarding Russia.
But the company - which specialises in emerging markets - said total fourth quarter revenues from events had risen 17% to £21m, on a like for like basis. It said total revenues for the year were expected to rise from £113m in 2010 to £154m. It said Moscow was performing well, with Modbuild in line with expectations. The news has lifted ITE 3.2p to 161.3p, and Investec analyst Steve Liechti said:
We accept Russia is perceived as 'risk' traditionally, and has performed poorly in previous down phases. Political news, with Putin now the prime Presidential candidate is arguably also not helpful. However, we believe Putin still implies political stability as long as Medvedev stays, which is not a bad thing right now. Also, Russia has fewer immediate macro issues compared with Europe, and an oil price above $80 is not damaging as long as it can continue to borrow - this appears to be the case.
Given Russia concerns, ITE has de-rated and is now at the low end against B2B peers, having been on a material premium previously. A 2011 PE of around 10 times [looks] at odds with growth prospects, in our view.
Numis was also positive:
ITE has released a robust pre-close update for the year to September. The outlook is positive, with the group indicating that rebookings (including Mosbuild) are progressing in line with expectations. We are raising our pre tax profits/earnings per share forecasts from £49m/15.5p to £50m/15.8p for 2011; consensus is currently £49m/15.5p. We are conservatively holding our 2012 estimates at £50m/15.6p, in line with consensus. We remain firm supporters of ITE and our higher forecasts flow through to a raised price target of 271p (was 268p).
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