Arena Events Group plc (AIM: ARE) announces its unaudited Interim Results for the six-months ended 31 December 2019. As announced on 10 April 2019, to better reflect the seasonality of the business, the Group changed its year end to 31 March. As a result, the next set of audited results will be for the fifteen-month period to 31 March 2020.
· Revenue increased by 16% to £92.7m (6m Dec 18: £80.1m)
· Gross profit increased to £30.2m (6m Dec 18: £25.1m)
· Adjusted EBITDA* increased by 56% to £13.4m (6m Dec 18: £8.6m)
· Operating profit of £5.3m (6m Dec 18: loss of £0.3m)
· Revenue increased by 21% to £162.7m (12m Dec 18: £135.0m)
· Adjusted EBITDA* increased by 37% to £16.6m (12m Dec 18: £12.1m)
· Operating profit of £4.5m (12m Dec 18: £nil)
· The full impact of IFRS16 has been reflected in these results, resulting in an increase of £2.1m EBITDA in the six-months ended 31 December 2019 (£4.1m 12m Dec 19) and additional depreciation of £2.0m in the six-months (£3.9m 12m Dec 19). IFRS 16 is excluded from all 2018 comparative results.
Six-month operational highlights
· In the UK - the delivery of structures, seating and furniture at major events including the Open Golf at Royal Portrush, the BMW PGA Championship at Wentworth and the Wimbledon Tennis Championships; the installation of over twenty ice rinks around the UK including new venues such as Cathedral Gardens Manchester and the Royal Museums Greenwich; and the successful delivery of the players' training facilities and hospitality venue for the 2019 Nitto ATP Finals.
· In the US - major activations included the Chicago Marathon, the Experimental Aircraft Aviation (EAA) AirVenture show and a major software vendor conference; in addition, a major cost reduction exercise was undertaken in September to re-shape the business.
· In the Middle East & Asia - completed two very significant contracts in Saudi Arabia, including a temporary 15,000 seat stadium and 3,000 guest VIP hospitality structure for the Joshua-Ruiz boxing match; delivered a number of temporary hospitality structures for the 2019 Rugby World Cup in Japan and the Abu Dhabi F1 Grand Prix; and provided temporary exhibition space for ADIPEC, the world's largest oil and gas show.
Post period highlights
· Secured a multi-year contract with the owners of the London Stadium, to develop, install and maintain new seating systems in the north and south of the stadium.
· Signed a multi-million pound contract to deliver a number of pavilions and kiosks for Expo 2020 Dubai.
* Adjusted EBITDA is defined as earnings before interest, tax, depreciation, intangible amortisation, exceptional items share option costs and acquisition costs.
Greg Lawless, CEO, commented:
"For the Group as a whole, trading for the six-months to December has been solid. In the Middle East & Asia, the successful delivery of several large, high-profile projects in Saudi Arabia and at the Rugby World Cup in Japan have more than offset weakness in the Hong Kong and Dubai markets. Whilst these large projects required additional investment in equipment and working capital, impacting overall debt levels, it has positioned the business well to support planned future growth in the region. During the period we also reset the cost base in the US and in the UK, to ensure that we continue to deliver an acceptable return on our asset base, whilst ensuring we deliver to the Arena standard in all regions. The London events market remains soft, but it is pleasing to note that major Tier 1 events continue to grow with robust attendance levels in all regions.
As previously announced, the Group is changing its year end to March and expects the seasonally quiet calendar Q1 period in 2020 to be broadly in line with that of the prior year with cost savings offsetting any market weakness. Looking further forward, despite some concerns about the general trading environment in a number of markets, the Group still expects to see revenue growth in the year ended March 2021 with the return of the US Open, the Ryder Cup, the Dubai Expo 2020 and further projects in Saudi Arabia.
Audited results and the dividend declaration for the fifteen-month period ending March 2020 will be released in early July 2020."