REG - Hyve Group PLC - Pre-close FY22 trading update and Turkey disposal

FTI ConsultingAnnouncement

05/10/2022 09:34

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RNS Number : 7809B  Hyve Group PLC  05 October 2022

5 October 2022

 

Hyve Group plc

 

("Hyve" or the "Group")

 

Pre-close FY22 trading update and Turkey disposal

 

Full revenue recovery in H2 and strong trading trajectory going into FY23

 

Hyve Group plc, the next-generation global events business, today announces a
trading update for the year ended 30 September 2022, prior to entering its
close period ahead of its preliminary results announcement.

 

The Group has delivered revenue for FY22 of approximately £122m (2021:
£22m), after excluding revenues from discontinued operations in respect of
Russia, Ukraine and Turkey, having successfully run a full schedule of events
outside China in FY22. This represents more than 85% recovery on a pro-forma
basis 1  when compared to FY19, or more than 90% excluding China where there
remains considerable disruption to event schedules.

 

The speed of recovery has surpassed expectations and combined with strong
like-for-like customer spend demonstrates that the demand for high-quality
market leading events continues to grow. This has resulted in another year of
headline profitability with less reliance on insurance proceeds, which have
reduced to £19m (2021: £65m), and a return to positive headline EBITDA
without insurance proceeds.

 

Many in-person events already outperforming their pre-COVID editions

 

The pace of in-person event recovery accelerated throughout FY22. Despite
disruption caused by the Omicron variant in the first half of the year,
revenue recovery compared to FY19 pro-forma revenues(1) was still
approximately 75% in H1. This increased in the second half to approximately
100%, even without the Group's events in China in the final quarter of the
financial year which did not take place due to COVID related restrictions.

 

In September, two of the Group's largest events, Autumn Fair (UK) and
Groceryshop (USA), took place and both significantly outperformed their
previous editions. Groceryshop performed especially well, reporting revenues
more than 40% higher than its largest pre-COVID edition and attracting more
than 3,000 attendees.

 

Expansion of omnichannel portfolio

 

During the financial year the Group made significant progress in the continued
development of its omnichannel strategy, including the rollout of further
tech-enabled meetings programmes at in-person events, as well as the delivery
of several successful fully online programmes.

 

In addition, the strategic acquisitions of 121 Group and Fintech Meetup
expanded the size and diversity of Hyve's omnichannel products.

 

The Group ran 14 tech-enabled programmes in FY22, compared with four in FY21.
These include a combination of digitally powered meeting programmes at
in-person events and fully online experiences.

 

£135m debt refinancing and year-end net debt at lower end of guidance

 

As announced on 3 October 2022, the Group has signed new debt facilities
totalling £135m, comprising a £115m term loan and a £20m super senior
revolving credit facility ('SSRCF'). The new debt facilities will replace the
Group's previous debt facilities, with the £101m debt at 30 September 2022 to
be repaid in full on 20 October 2022 when the new funds are to be drawn.

 

As of 30 September 2022, the Group's adjusted net debt(( 2 )) was
approximately £72m, which is at the lower end of the previously stated FY22
year-end guidance of £70m-£90m following strong trading performance and cash
generation.

 

Disposal of Turkish Business in line with the Group's strategy

 

The Group has continued to streamline its portfolio, in line with its strategy
to focus on market leading events in advanced economies, and has entered into
an agreement to sell Hyve Fuarcılık Anonim Şirketi and its subsidiaries
(the "Turkish Business") for consideration of up to £8m to ICA (JV) Limited.

 

The Group will receive consideration of £2m on completion, less customary
working capital adjustments, and between £4m and £6m of deferred
consideration, payable over the six year period until December 2028 based on
the profitability of the Turkish Business.

 

The Turkish Business operates five events in Turkey and for the year ended 30
September 2021 reported a loss before tax of £0.7m. As of 30 September 2021,
the Turkish Business had gross assets of £1.9m.

 

The Directors intend to use the proceeds to reduce the Group's net debt.
Completion of the disposal is conditional on completion of the Group's
refinancing announced on 3 October 2022.

 

The disposal of the Turkish Business, following the management buyout of
Ukraine announced on 17 July 2022, completes the disposal in full of the
Group's Eastern & Southern Europe division. Added to the exits from Russia
and Indonesia earlier in the year, the Group has significantly reduced its
exposure to more volatile countries and FX rate fluctuations.

 

The Group's operations are now more concentrated in advanced economies and its
US presence has significantly increased compared to previous years.
Approximately 30% of the Group's revenues are now generated in the US and
therefore the recent strengthening of the dollar against sterling is expected
to have a positive impact on the Group's results in FY23.

 

Strong forward bookings and growth in customer spend give confidence in the
outlook for FY23

 

Positive trading momentum continues as the Group starts FY23, with forward
bookings of approximately £68m giving confidence in the year ahead. This
compares to £50m this time last year going into FY22 3 , which included
significant rollovers from events cancelled in FY21. The continuous
improvement in trading performance is a testament to the Group's high-quality
market leading events enhanced by the successful roll-out of the omnichannel
strategy across the portfolio, despite challenges across the wider economic
and geopolitical environment.

 

Uncertainty around running events in China remains, but the Group notes
relaxation of the COVID-19 related rules on a region-by-region basis and
currently plans to run a full schedule of events in China in FY23. China
represents less than 10% of Group revenues.

 

 

Mark Shashoua, CEO of Hyve Group plc said:

 

"It is clear that our business has now almost fully recovered from the
turbulence of the last two years, and in many cases, we are pleased to have
delivered significant growth compared to pre-COVID performance.

 

"The continued growth of customer like-for-like spend reinforces our strategy
of focusing on only market leading events as customers are clearly directing
marketing budgets towards key events in their sectors.

 

In terms of our geographical focus, we continued to concentrate our capital on
high growth industries in advanced economies. The sale of the Turkish Business
announced today is another milestone in this direction. We are pleased to have
found the right buyer who can offer the necessary investment and support to
the team, along with regional expertise. I would like to thank all of the
people in the Turkish Business and wish them the best in all of their future
success."

 

"Looking ahead, we must of course remain vigilant/mindful of macroeconomic
challenges, however we are optimistic about the next 12 months and this
optimism is underpinned by strong forward bookings and an increase in
like-for-like customer spend. We enter FY23 with a de-risked and concentrated
portfolio of market leading events, clear opportunities for continued growth -
both through analogue and digital - and our ever-present commitment and energy
to make those a reality."

 

 

 

The Group will be publishing its preliminary results for FY22 on 13(th)
December 2022.

 

Enquiries:

 

 Mark Shashoua / John Gulliver / Marina Calero   Hyve Group plc  +44 (0)20 3545 9400
 Charles Palmer / Dwight Burden / Jamille Smith  FTI Consulting  +44 (0)20 3727 1000

 

About Hyve Group plc

 

Hyve Group plc is a next-generation global events business whose purpose is to
bring together and connect entire sector ecosystems from all corners of the
globe. We meet our customer needs to learn, network and trade via both
market-leading in-person and online events. Hyve Group plc is all about
globally consistent best practice and unrivalled quality. Our vision is to
create the world's leading portfolio of content-driven, must-attend events
delivering an outstanding experience and ROI for our customers. Hyve's
market-leading portfolio of global brands includes: Shoptalk, Spring Fair,
Bett, Mining Indaba and the recently acquired Fintech Meetup, which is
defining the future of events for the fintech ecosystem and uses
state-of-the-art technology to power its world renowned meetings programme.

 

Where business is personal, where meetings move markets and where today's
leaders inspire tomorrow's.

 1  After excluding revenues from discontinued operations in respect of
Russia, Ukraine and Turkey

 2  Adjusted net debt is defined as cash and cash equivalents after deducting
bank loans. This is therefore prior to any lease liabilities recognised on the
balance sheet and it is excluding cash presented as held for sale.

 3  After excluding forward bookings from discontinued operations in respect
of Russia, Ukraine and Turkey

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