1. Homepage
  2. Equities
  3. United Kingdom
  4. London Stock Exchange
  5. AREA EVEN
  6. News
  7. Summary
    ARE   GB00BF0HYJ24

AREA EVEN

(ARE)
Delayed London Stock Exchange  -  02:30 2022-02-23 am EST
20.75 GBX   -.--%
04/13AREA EVEN : Arena Adds To Industrial & Commercial Structures Division
PU
04/04AREA EVEN : Arena Group Sponsors Young Golfers
PU
03/22AREA EVEN : Cheltenham Festival back in the Saddle with Arena Group
PU
SummaryQuotesChartsNewsCompany 
SummaryMost relevantAll NewsOther languagesPress ReleasesOfficial PublicationsSector news

Arena Events : FY21-Interim-Results-Presentation.pdf | pdf | 856.99KB

11/10/2020 | 05:15am EDT

Arena Events Group plc

FY21 Interim Results

Diriyah arena & hospitality structure, Saudi Arabia, Dec 2019

November 2020

Agenda

Overview

FY21 Interim Results Snapshot

Financial Review

COVID-19 - changed the landscape Conclusion & Outlook Appendices

Results Presentation November 2020

2

Disclaimer

THIS PRESENTATION (THE "PRESENTATION"), WHICH HAS BEEN PREPARED BY ARENA EVENTS GROUP PLC (THE "COMPANY), IS FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE AN OFFER OR INVITATION TO SUBSCRIBE FOR OR PURCHASE ANY SECURITIES, AND NEITHER THE PRESENTATION NOR ANYTHING CONTAINED HEREIN NOR THE FACT OF ITS DISTRIBUTION SHALL FORM THE BASIS OF OR BE RELIED ON IN CONNECTION WITH OR ACT AS ANY INDUCEMENT TO ENTER INTO ANY CONTRACT OR COMMITMENT WHATSOEVER.

Neither the Presentation, nor any part of it, may be taken or transmitted into the United States of America, Australia, Canada, South Africa or Japan or into any jurisdiction where it would be unlawful to do so ("Prohibited Territory"). Any failure to comply with this restriction may constitute a violation of relevant local securities laws.

The Presentation is issued solely to and directed at: (i) persons who have professional experience in matters relating to investments falling within article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order") and are "investment professionals" falling within the meaning of the Order; and (ii) high net worth entities falling within article 49(2)(a) to (d) of the Order. This document is exempt from the general restriction on the communication of invitations or inducements to enter into investment activity and has therefore not been approved by an authorised person as would otherwise be required by section 21 of the Financial Services and Markets Act 2000 ("FSMA"). It is a condition of your receiving the Presentation Materials that you fall within, and you warrant and undertake to the Company that:

1. you fall within one of the categories of persons described above;

2. you have read, agree to and will comply with the terms of this disclaimer;

3. you are not resident in, or a citizen of, a Prohibited Territory; and

4. you will not forward, reproduce or otherwise disclose the contents of this document to any person in contravention of FSMA or any other applicable law or regulation or to any person in a Prohibited Territory.

The Presentation should not be copied, distributed or passed on, directly or in directly, to any other person. The Presentation contains only a synopsis of more detailed information available in relation to the matters described in it and accordingly no reliance may be placed for any purpose whatsoever on the sufficiency or completeness of such information and to do so could potentially expose you to a significant risk of losing all of any investment made by you. No reliance should be placed on the information and no representation or warranty (express or implied) is made by the Company, any of its directors or employees or any other person, and, save in respect to fraud, no liability whatsoever is accepted by any such person, in relation thereto.

The statements contained in this document, such as "may," "will," "should," expect," "anticipate," "estimate," "intend," "continue", "aiming" and "believe" and other similar expressions are forward-looking statements and not historical facts. Due to various risks, uncertainties and assumptions, actual events or results or the actual performance of the Company may differ materially from those reflected in or contemplated by such forward-looking statements. Past performance, targeted performance and projected performance are not reliable indicators of future results and there can be no assurance that targeted or projected returns will be achieved. The value of any investment made by an investor can go down as well as up and an investor may lose its entire investment.

Results Presentation November 2020

3

FY21 Interim Results - six months dominated by COVID-19

Structures were deployed in support of COVID-19 relief…

…providing testing centres, hospitals and mortuaries

Focus shifted to non-event and stadium projects…

… significant overhead reductions and optimising cash

resources

Results Presentation November 2020

4

FY21 Interim Results - Financial Highlights

Steve Trowbridge, Chief Financial Officer

Results Presentation November 2020

5

FY21 Interim Results - financial highlights: six mths to Sept-20 vs six mths to Sept-19

£42.8m

£4.4m

(2.2)p

£15.5m

6m Sept 19

6m Sept 19

6m Sept 19:

Sept 19: £3.3m

£88.3m

£8.8m

1.1p

Cash & Cash

Revenue

Adjusted EBITDA(1)

Adjusted EPS(2)

Equivalents

  • Revenue decreased by £45.5m (52%)
  • Adjusted EBITDA(1) decreased by 50% to £4.4m
  • Operating loss of £3.3m (6m Sept 19: profit of £3.8m)
  • Adjusted EPS(2) loss of 2.2p (6m Sept 19: profit of 1.1p per share)
  • Period end cash £15.5m (Sept 19: £3.3m, Mar 20 £5.8m )
  • No interim dividend proposed to maintain balance sheet strength
    1. Adjusted EBITDA is defined as earnings before interest, tax, depreciation, intangible amortisation, exceptional items share option costs and acquisition costs
    2. Adjusted Earnings Per Share is calculated using Adjusted Earnings divided by the average number of shares in issue for the year. Refer to reconciliation in appendices

Results Presentation November 2020

6

Financial summary

6 mths ended

6 mths ended

30-Sep-20

30-Sep-19

£'m

Revenue

42.8

88.3

Gross Profit

14.8

24.9

Gross Profit %

34.6%

28.2%

Adjusted EBITDA

4.4

8.8

Adjusted EBITDA %

10.3%

10.0%

Depreciation & Amortisation

(6.8)

(5.7)

Adjusted Operating Profit

(2.4)

3.1

Adjusted Finance Costs

(1.3)

(1.3)

Taxation

(0.6)

(0.1)

Adjusted Net Income

(4.3)

1.7

Six month commentary

  • Revenue down £45.5m (52%), due to widespread disruption caused by COVID-19 pandemic
  • Gross profit decrease of £10.1m (21%), driven by revenue reduction but partly mitigated by higher gross margin of 34.6% compared to 28.2% in 2019
  • Careful control of operating costs ensured that Adjusted EBITDA margins slightly improved
  • Increase in depreciation and amortisation driven in part by fleet investment, alongside accelerated depreciation on assets no longer deemed usable post pandemic.
  • Adjusted finance costs flat with lower interest rate offsetting higher average drawings
  • Higher tax charge reflects taxes levied in certain jurisdictions that are not available for relief at a Group level

Results Presentation November 2020

7

Cash flow and net debt - operational cashflow positive for six month period

Capex largely

Exceptional

reflects

Working

commitments

costs largely

made prior to

capital

relate to

Early in

Group

carefully

redundancy

COVID-19

Lease payments

pandemic

remained

pandemic

managed

costs as

interest period

Adjusted

and

with efforts

headcount

include property,

selected as six

EBITDA

necessary

made to

was

vehicle and

months

positive in

fleet

draw in

reduced to

equipment leases.

pushing cash

six month

replacement

outstanding

match

Operating leases

payment into

period

debtors

workload

now presented

October

outside of EBITDA

under IFRS16

Note: Net debt as per above is covenant definition which includes net bank debt, shareholder loans, finance leases and deferred consideration.

Results Presentation November 2020

8

Abbreviated balance sheet

£'m

30-Sep-20

31-Mar-20

Goodwill and other intangibles

38.9

39.4

Property, plant and equipment

50.3

48.3

ROU assets

21.1

23.6

Other non-current assets

0.8

1.0

111.0

112.3

Current assets

24.1

39.7

Current liabilities

(34.1)

(47.7)

(10.0)

(8.0)

Net Debt (covenant basis)

Cash and cash equivalents

15.5

5.8

Bank and shareholder liabilities

(39.3)

(39.6)

Finance leases

(1.5)

(0.9)

Deferred consideration

(1.0)

(0.9)

(26.3)

(35.6)

Other liabilities

ROU liabilities

(21.7)

(19.8)

Bank Interest and amortised loan issue costs

(0.4)

0.3

Deferred Tax liabilities

(1.3)

(1.3)

Other non-current liabilities

(1.3)

(1.4)

(24.8)

(22.2)

Net assets

49.9

46.5

  • Goodwill impairment undertaken at end of FY20, no further movement in six months ending September 20
  • Capex to support major US golf jobs and acquisition of assets from Williams Party Rentals (WPR) in six month period led to increase in property, plant and equipment
  • IFRS16 underpins Right of Use assets and liabilities on the balance sheet.
  • Reduction in current assets reflects strenuous efforts to collect outstanding customer receivables, alongside lower activity levels which have also led to reduced trade creditors
  • Cash and cash equivalents of £15.5m - reflects broadly neutral cash generation/consumption in the period, with £9.3m of equity proceeds raised still in reserve
  • Increase in finance leases reflects scaffolding purchase made in US in support of major golf jobs
  • Small increase in deferred consideration driven by acquisition of assets of WPR - £0.2m paid, £0.1m outstanding
  • Reversal of bank interest/loan issue debtor to a creditor is due to selected longer interest period to optimise cash reserves

Results Presentation November 2020

9

Americas financial review

Divisional performance impacted by significant levels of work in support of COVID-19

  • Revenue reflects performance of both the national Arena Event Services (AES) operation and the San Francisco-based Arena Stuart Rentals (ASR).
  • While traditional event work was significantly curtailed, the impact was reduced by securing COVID-19 work. As a result revenue reduced by 46% to £18.5m.
  • The AES division undertook a business restructuring in September 2019 called "Project Lift", with a reduced focus on lower revenue and a corresponding reset cost base. Alongside additional COVID-19 related cost reductions this helped the region deliver a significantly improved gross margin.
  • Cost reductions also improved central regional overheads, ensuring a high gross profit drop-through, with EBITDA of £6.6m, higher than the corresponding period in 2019.
  • Opportunistic acquisition of assets of Williams Party Rentals in San Jose for c.£300k - less than net asset value and a fraction of normal valuation.

Six month financials

£18.5m £6.6m

-46%+29%

RevenueEBITDA

10

UK & Europe financial review

Six month financials

£11.3m £1.0m

Traditionally the busiest season of the year, COVID-19 led to most high profile events being cancelled or postponed

  • Revenue was instead dominated by two large stadium seating projects: reconfiguring the north and south stands at the London Stadium and the construction of a semi-permanent stadium for Edinburg Rugby Club at Murrayfield
  • Revenue fell by 66% to £11.3m, but gross margin continued to recover from the 2018 lows

-66%-77%

RevenueEBITDA

  • With UK Government "furlough" support, the staff cost base could be quickly matched to workload, however Arena has been unable to access any business rates support schemes
  • In June 2020 management of the region was merged with that of the MEA region, further reducing overhead costs and streamlining customer relationships
  • The region delivered a positive EBITDA at a 8.8% margin

11

Middle East & Asia financial review

COVID-19 impacted activity levels in what is already the seasonally quiet half of the year

  • Revenue of £12.9m was dominated by a single COVID-19 project in the UAE - the construction of a medical holding area facility
  • Without any governmental support schemes, the region has been slower to transition to a new lower operating cost base, combined with the cost of reducing a largely expatriate workforce
  • The mix of revenue and lower activity levels led to gross profit margins falling to 8.5%
  • EBITDA turned negative as activity levels were not sufficient to cover fixed costs, which were also impacted by £300k of additional bad debt expenses relating to largely Asia-based customers

Six month financials

£12.9m -£2.6m

-36% >(100%)

RevenueEBITDA

12

KPIs - six months to Sept-20 vs six months to Sept-19

34.6%

10.3%

(2.2)p

2.8x

+6.4pps vs. 2019

+0.3pps vs. 2019

>(100%) vs. 2019

(Sep 20)

Gross profit % of

Adjusted EBITDA %

Adjusted earnings

Net debt leverage

(covenant basis)

revenue

of revenue

per share (pence)

  • Gross profit margin improved to 34.6% in part due to geographic mix as the US region delivered over 40% of Group revenues
  • Adjusted EBITDA % margins improved slightly to 10.3% as the cost base was rapidly reset. With some of these changes now permanent, future operating leverage should be enhanced
  • Adjusted EPS turned negative, mainly as the lower level of absolute EBITDA did not cover depreciation charges, combined with the dilutive effect of the April 2020 equity fund raising
  • Net debt leverage of 2.8x reflected lower levels of net debt, tested against lower LTM EBITDA. Leverage will increase in H2, but access to £15.6m of CLBILS lending ensures sufficient liquidity headroom

Results Presentation November 2020

13

COVID-19 - changed the landscape

Greg Lawless, Chief Executive

14

Stony Brook Temporary Hospital, New York, April 2020

Impact on business

  • Impact of pandemic first experienced in February with cancellation of events in Asia and Middle East. FY20 EBITDA impact around £0.3m
  • Subsequent widespread cancellations of mass gathering events for the these six months
  • These included Olympics 2020, Ryder Cup, US PGA and US Open golf, Seoul Formula E, Vietnam F1, Wimbledon, The Open
  • Swift change of focus with significant success in securing COVID-19 related work, covering:
    • Structures for temporary hospitals
    • Drive through testing centres
    • Other health facilities
    • Temporary facilities for US and UK Military
    • Extension of schools, restaurants and other public venues
    • Expansion of industrial facilities to ensure social distancing

Results Presentation November 2020

15

COVID-19: Impact - six months to Sept-20 (H1 FY21)

  • Other decisive actions taken by senior management team, included:
    • Cost reduction programme
    • Permanent, temporary lay-offs (unpaid leave)
    • Full and partial salary reductions including reduced working weeks
    • EMEA merger
    • Accessed government support programmes where available: furlough and tax payment deferrals (e.g. VAT)
    • Discretionary expenditure has been cancelled
    • Rental deferrals have been achieved on a number of property leases
    • Fixed overheads reduced by c.30% compared to 2019
    • Capital expenditure scaled back except for contracts already underway and equipment necessary for equipment maintenance or health and safety matters

Results Presentation November 2020

16

Stakeholder support

  • Decisive action taken by senior management team:
    • Share placing raising £9.3m net proceeds in April 2020
    • TasHeel became the largest single shareholder as part of placing
    • Extension of Lombard Odier £2m facility to March 2021
  • Significant ongoing support from HSBC:
    • Secured £15.6m of additional lending under the UK Government CLBILS programme - decision to cancel unused £4.5m Arena overdraft facility
    • Covenant waiver agreed for June and September tests. Reassessment of covenant structure underway for December 2020 tests and beyond

Results Presentation November 2020

17

Stony Brook Temporary Hospital, New York, April 2020

Conclusion & outlook

Greg Lawless, CEO

18

Conclusion and outlook

  • The issue is "when will major periodic events return to normal?"
  • As of today, any major events taking place for the next 5/6 months will be without mass gatherings
  • We are therefore not expecting a return to mass gatherings at sporting events until mid 2021
  • In the meantime, the focus is on cost control and cash management
  • Fixed costs have been reduced by over 30% and continue to be reviewed
  • Some cost reduction programmes will be permanent
    • Significant senior executive reductions in the US and UK
    • Focus on permanent reduction of historic fixed overheads by over £2 million
  • EMEA merger to drive a new design led approach in the UK with a view to improving customer offering
  • The overall objective is to:
    • Extend the cash runway of the business well into 2021
    • Use the cost reduction programmes to deliver permanent savings on a return to normal
    • Be aware of potential distressed acquisition opportunities - already seeing stress in the system

Results Presentation November 2020

19

Appendices

Substantial shareholdings >3% as of 29 October 2020

Shareholder

No. of Ordinary Shares held

% of Issued Share Capital

1

TasHeel Holding Group LLC

62,852,950

25.4%

2

Lombard Odier Asset Management (Europe) Limited

58,472,090

23.6%

3

Oryx International Growth Fund Limited

20,000,000

8.1%

4

Tellworth Investments

13,974,467

5.6%

5

GAM Holding AG

11,000,000

4.4%

6

Greg Lawless

9,924,088

4.0%

Results Presentation November 2020

21

FY20 financial highlights: adjusted earnings

6 mths ended

6 mths ended

30-Sep-20

30-Sep-19

£'m

Statutory loss after tax

(5.3)

2.2

Add back

Exceptional costs

0.8

(0.7)

Acquisition costs

0.0

0.0

Exceptional finance costs

0.1

0.2

Share options charge

-

-

Adjusted earnings

(4.3)

1.7

Average no. of shares (million)

196.3

152.3

Adjusted earnings

(2.2)

1.1

Results Presentation November 2020

22

Disclaimer

Arena Events Group plc published this content on 10 November 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 10 November 2020 10:14:00 UTC


© Publicnow 2020
All news about AREA EVEN
04/13AREA EVEN : Arena Adds To Industrial & Commercial Structures Division
PU
04/04AREA EVEN : Arena Group Sponsors Young Golfers
PU
03/22AREA EVEN : Cheltenham Festival back in the Saddle with Arena Group
PU
02/23Arena Events' Purchase by IHC Industrial, Tasheel Holding Completes; LSE Delisting Set
MT
02/22IHC Industrial Holding LLC and TasHeel Holding Group completed the acquisition of remai..
CI
01/31Killik & Co. LLP - Form 8.3 - Arena Events Group plc
PR
01/26Killik & Co. LLP - Form 8.3 - Arena Events Group plc
PR
01/19Killik & Co. LLP - Form 8.3 - Arena Events Group plc
PR
01/10Killik & Co. LLP - Form 8.3 - Arena Events Group plc
PR
01/07Killik & Co. LLP - Form 8.3 - Arena Events Group plc
PR
More news
Chart AREA EVEN
Duration : Period :
AREA EVEN Technical Analysis Chart | MarketScreener
Full-screen chart
Managers and Directors
Kenneth George Hanna Non-Executive Chairman
Ian Roland Metcalfe Independent Non-Executive Director
Henry Arthur John Turcan Non-Executive Director
Paul Berger Chief Executive Officer-Middle East & Asia