ITE Group

REDUCE

29/11/2011 Ben Jaglom

Russia-focused exhibitions specialist ITE Group declared a 25% rise in pre-tax profits as the booming Russian economy fueled its growth.

The fully-listed concern reported pre-tax profits of £39.1m (2010: £31.3m) on turnover of £155.5m (2010: £113.5m) for the year to September. The dividend per share rose from 5.7p to 6.1p while net cash fell form £23m to £5.5m.

The company, which organises exhibitions in Russia, the countries of the former Soviet Union and Turkey noted that the strong results were also driven by the holding of its biennial Moscow International Oil and Gas Exhibition. Acquisitions over the period included the purchase of exhibition businesses in both Moscow and Krasnodar in Southern Russia

In an interview with Growth Company Investor chief executive Russell Taylor enthused that Russia's growth was being driven by rising oil and gas prices, describing Russia's exports as the 'Fuel that makes its economy grow'. He argued that while Moscow in the last ten years had changed due to increased spending 'The more remote regions still require investment in infrastructure such as hotels and roads'.

Analysts at Peel Hunt are forecasting pre-tax profits of £52.4m (EPS: 16.2p) on sales of £164.7m for the year to September 2012. In 2013 profits of £59.8m (EPS: 18.5) on turnover of £182.6m are expected. A dividend of 6.1p and 6.7p a share are penciled in for 2012 and 2013, respectively.

Last recommended by Growth Company Investor this October at 157.4p the shares have gained 26% since, currently trading at 198.1p. A company that offers a respectable yield of 3.1% ITE has benefited from a resilient Russian market. Down from a 52 week high of 258.2p now could be an appropriate time to take some profit from the buying opportunity we identified in October. Reduce.