Pure London and Shoptalk organiser Hyve makes more cost savings as revenue plunges
Tradeshows organiser Hyve Group said on Wednesday that it’s making further cost savings as it issued a trading update for the financial year that ends this month.
The Pure London, Moda, Scoop, Jacket Required and Shoptalk owner said that a number of regions in which it operates are beginning to open “but the situation remains fluid”. Following the relaxing of government measures to manage Covid-19 in several of these regions, it has now “safely run a number of domestic events in China and Ukraine”.
Its first Russian events since lockdown actually started this week and the group has run a total of 12 face-to-face events in Q4, delivering around £9 million of revenues.
It means revenues for FY20 are now expected to be down to £105 million from £221 million a year ago, “reflecting a very strong start to the financial year but a significantly reduced event programme since March as a result of Covid-19”.
The company also said it’s in a “resilient financial position” due to a £126 million rights issue completed in June, and successful insurance claim settlements, as well as significant cost saving measures to reduce cash burn.
But it’s unclear just how long it will take to get back to any level of normality.
On Wednesday it said: “While the board acknowledges that restrictions in certain markets are starting to be lifted, as we have seen from recent announcements in the UK, the timing and speed of the recovery of the global events industry remains highly uncertain with travel restrictions expected to remain in place for some time and further spikes in infections and government lockdowns a real possibility. We remain mindful that any events that do take place are likely to be smaller than previous editions and it may take some time for customer confidence to return as markets reopen.”
So the company’s new set of cost savings includes the merging of its UK and Global Brands operations as well as further streamlining of the group's central HQ overheads. It’s now aiming to exceed its FY21 savings target by between £5 million and £10 million on an annualised basis to a total of between £45 million and £50 million.
As a key part of its strategy, Hyve also said it’s focused on running market-leading events and continues to actively manage its portfolio to align with this strategy. So it has disposed of its entire event portfolio in Azerbaijan and Uzbekistan for up to £9.5 million, payable over a number of years. Events in these regions weren’t expected to resume for some time due to Covid-19 and therefore this planned disposal reduces the group's cash burn in the coming months.
It also said it continues to make progress in developing its omnichannel strategy, part of which is currently in proof-of-concept stage. ShopTalk Virtual Meetup, taking place in October, “is showing encouraging early demand with promising registration numbers. This event will provide a key test case for the potential monetisation of a digitally delivered event”.
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