Arena Events Group plc (AIM: ARE), today announces its unaudited Interim Results for the six months ended 30 June 2019.
· Revenue increased by 27% to £70.1m (H1 18: £54.9m)
· Gross profit increased to £19.8m (H1 18: £16.7m)
· Adjusted EBITDA decreased to £3.2m (H1 18: £3.5m) *
· Secured a £1.9m insurance recovery towards the cost of settling the US Department of Justice claim
· Operating loss of £0.8m (H1 18: profit of £0.3m)
· Interim dividend declared of 0.25p per share
· The full impact of IFRS 16 has been reflected in the interim results resulting in an increase of £2 million in EBITDA and additional depreciation of £1.9 million
· In the UK - the delivery of regular major events, including Cheltenham, the Fever Tree Championships, the Open Championship in Northern Ireland; additional one-off events including temporary seating for a number of high profile concerts at Wembley Stadium, as well as the D Day Commemorative event in Portsmouth
· In the Middle East & Asia - the delivery of its regular reoccurring events including the Abu Dhabi Golf Championships, the Hong Kong Sevens, as well as a number of new events including the Dubai Desert Classic and the first Beach Soccer Cup in Neom, Saudi Arabia
· In the US - delivery of temporary seating for the first time for the PGA Championship at Bethpage in New York, and significant temporary structures for Frieze Art Fair, Super Bowl, Daytona International, the Kentucky Derby and the annual SAP User Conference
Post Period Highlights
· Secured two multi-million pound contracts in Saudi Arabia for the Riyadh Festival and the provision of a 15,000 temporary seating stadium for the World Heavy Weight Boxing Championships
· Successfully delivered a number of temporary hospitality structures for the 2019 Rugby World Cup, in Japan, which begins on 20 September 2019
· The Group continues to see significant opportunity to grow its presence in Saudi Arabia, on the back of a number of contracts that have either been awarded, or under negotiation
· After seven years of loyal and distinguished service to the Arena Group, Piers Wilson, Group CFO, has decided to leave the Group to pursue new career opportunities. Piers has been an incredibly dedicated colleague and was instrumental in the delivery of the Group's IPO in 2017 as well as working on all of the Group's acquisitions. Given the significance of his role Piers has agreed to continue to work with us, for the next month, as we transition his replacement, Mr Steve Trowbridge, into the Group CFO role.
· Steve Trowbridge, aged 46, has held executive roles in a number of public and private businesses, most recently with Evans Cycles from August 2016 as CFO and ultimately CEO, upon its sale to Sports Direct. Prior to his role at Evans Cycles, Steve was at HSS Hire for over seven years including the role of CFO from 2014. Steve has also held senior finance roles at Thomson Reuters and was an equity analyst at SG Securities. He qualified as a Chartered Accountant at Ernst & Young and is a fellow of the ICAEW.
*Adjusted EBITDA is defined as earnings before interest, tax, depreciation, amortisation, exceptional and acquisition costs.
Greg Lawless, CEO, commented:
"Trading in the first 6 months, whilst not without a number of challenges, has been satisfactory with like for like revenue growth of £1.4m, despite a number of one-off and biennial events in the same period in 2018 not occurring this year. The restructuring of the UK Structures unit continues to be a priority and in March we appointed a new CEO, Chris Morris to lead the division. Whilst, we have made some progress here, there is more work to be done, and we are confident the restructuring will be completed by the end of 2019.
We are also pleased that we have successfully secured a £1.9m insurance recovery towards the cost of settling the US Department of Justice claim of $4.8m in the US last year. This amount has been classified as an exceptional receipt in our interim accounts.
The Group's results have historically been second half weighted and the profile for 2019 will be further exaggerated following last year's acquisitions and a higher proportion of secured and identified jobs now phasing into the last quarter of the year. This is why we are changing our year end to March, effective for the 15 months to March 2020.
The Board remains confident that the Group's strategy will deliver long term shareholder value as we continue to focus on reaping the full benefit of last year's acquisitions as well as continuing to improve operational efficiency across the Group."