Posted on Friday, 06 March 2015 08:50

Investment: ITE Group enters Africa with Africa Oil Week conference acquisition

ITE Group Plc, a trade exhibition and conference organiser, said it had acquired a majority stake in a portfolio of events from GPP Energy Advisors Ltd for 16 million pounds ($24 million).

The deal will be funded in part via an institutional placing to raise 12 million pounds, ITE said adding that the acquisition and placing are expected to add to earnings in the first 12 months.

even on lower assumed profit and more overhead the multiple looks attractive

At least two analysts raised their full-year pretax earnings per share forecast for 2016 to a range of 14.5 pence to 15 pence.

The company posted a full-year headline pretax profit of 60.3 million pounds in 2014.

Peel Hunt analyst Malcolm Morgan said as the main event Africa Oil Week takes place in October, there would be no impact to earning for the year ended September 2015.

Morgan said 2016 pretax profit would rise by about 4 million pounds, maintaining his target price on the stock at 190 pence.

Numis Securities analysts estimated a 2 million pound rise in 2016 pretax profit.

The brokerage kept its "buy" recommendation and 265 pence price target on the stock.

Chief Executive Russell Taylor said the acquisition would allow ITE to move into Africa.

The portfolio includes Africa Oil Week, an annual oil and gas conference, and assets in Africa, Asia and Latin America.

"While the merits of acquiring a big Oil & Gas event right now may be debatable given industry issues, even on lower assumed profit and more overhead the multiple looks attractive for what we perceive to be a decent asset," Investec analyst Steve Liechti wrote in a note.

Chief Executive Taylor told Reuters in October that ITE saw less incentive to develop the business further within Russia.

ITE received about 59 percent of its revenue from Russia in 2014. 

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