Hyve has been taking decisive and rapid management actions to mitigate the potential impact to our business due to the current situation related to the coronavirus outbreak.
Hyve Group plc
("Hyve" or the "Group")
The Group is closely following and regularly monitoring the advice from the World Health Organization ("WHO") as well as regional and local government advice and continues to assess the situation carefully. The health and safety of our employees, customers and exhibitors continues to be of the utmost importance, as does the ability to continue to run events that deliver an outstanding return on investment for our customers.
The events industry is experiencing significant disruption across multiple geographies and sectors with many events having been cancelled or postponed across Asia, Europe and the USA.
At Hyve, each region in which we operate has reacted differently and, in some instances, governments and authorities in impacted countries have placed certain restrictions on travel and on large gatherings to contain the spread of the virus, as well as companies implementing restrictions on business travel by their employees.
In light of recent developments and the continued spread of coronavirus, we are announcing the impact that this is having on the Group and the actions we have taken:
· Postponement of Asian events - we have successfully managed to postpone four March events in Asia to later in our current financial year. Bett Asia will now take place in June, CWIEME Shanghai in July, BreakBulk Asia in August and CPHE (Shanghai's hosiery exhibition) in August. Unless the impact of the virus lasts until the rescheduled dates, these events will all still take place within our 2020 financial year;
· Chinese exhibitor participation in our non-Chinese events ("outbound sales") - recent travel restrictions, in particular for many of our Chinese customers who are either unable to leave their region of China or unable to enter certain countries, have started to adversely impact revenues at a number of our events; and
· Postponement of Shoptalk and Groceryshop - Shoptalk 2020, previously planned for March, has been postponed to September and will therefore remain in Hyve's 2020 financial year. While there is not currently a restriction on large events in the USA, it is clear that a significant number of US companies are restricting or discouraging all business travel for their employees, including conference attendance. This is impacting the number of key customers and speakers now able to attend and we consider, at this time, that it is not feasible to deliver a high-quality event in line with customer expectations. Moving Shoptalk to September preserves the quality of this year's event. As a result, we have taken the decision to move Groceryshop to March 2021 to avoid a clash with Shoptalk.
Other than the specific examples above, all of our other events are currently expected to go ahead as planned. The situation is evolving on a daily basis, but Hyve continues to work hard to mitigate the impact that the coronavirus outbreak is having on our business. We have instigated global work streams that report daily and we are constantly scenario planning for any potential future impacts to our business. We continue to take into account any updates that are received either from the WHO or regional governments. We have also implemented additional precautions across all of our events on a global basis and are providing regular updates to our stakeholders via our websites.
On the basis of what we know today, we currently estimate a one-time adverse impact in FY20 of between £17m and £19m on the Group's revenue and between £16m and £18m on Group profit in the current financial year, as a result of the issues set out above.
The current estimated financial impacts are as follows:
· Postponement of Asian events - c. £1m on both revenue and profit;
· Outbound sales - c. £7m to £8m revenue and c. £6m to £7m profit; and
· Postponement of Shoptalk and Groceryshop - c. £9m to £10m on both revenue and profit, after incurring £4m to £5m of duplicative costs already incurred on the postponed editions that cannot be recovered.
The above estimates are based on the current situation and therefore could change if the situation improves or worsens. As things currently stand, none of the above impacts are expected to have a significant impact on the Group's results beyond the current financial year. We anticipate that the new date for Groceryshop will remain in future years and therefore do not expect to run the event twice in financial year 2021.
The Group has already booked c. £200m of revenue for the current financial year, continues to be highly cash generative and, following the refinancing that the Group undertook in December, has material headroom available on the debt facility and expects to operate within the covenants.
The Board is confident that the measures put in place will enable Hyve to protect its shows, customers, colleagues and communities to the fullest extent possible.
For further information please contact:
Hyve Group plc
Mark Shashoua / Andrew Beach / Melissa McVeigh +44 (0)20 3545 9000
Charles Palmer / Emma Hall / Chris Birt +44 (0)20 3727 1000
About Hyve Group plc
Hyve Group plc is a next generation global events business whose purpose is to create unmissable events, where customers from all corners of the globe share extraordinary moments and shape industry innovation. Hyve Group plc was announced as the new brand name of ITE Group plc in September 2019, following its significant transformation under the Transformation and Growth (TAG) programme. 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.
Where business is personal, where meetings move markets and where today's leaders inspire tomorrow's.