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Informa is so large that it is in many ways a proxy for the world economy ( operating in 41 countries ). In that sense it does suffer from a reasonably large turnover in China , particularly from the ex- UBM shows in Hong Kong , and cannot escape the effects of recession . The market cannot estimate when , if ever , the China market will ever come back to 2019 levels and this must be a drag on future price assumptions . On 14 November Informa said that their overall growth in 2022 was 41 % compared with the covid-hit 2021 and that their events business ( crucially EXCLUDING China ) was running at 85 % of 2019 . This is a surprise and is a number which is lower than most of the medium sized businesses in our sector ( or perhaps more accurately , below the companies which are prepared to talk ). Having said that , Stephen Carter has to be careful not to overstate as a quoted company and even if their projections were ( say ) 90 % he might choose to quote a lower number . For complete disclosure , I should add that I have bought a fair number of Informa shares in the past year . It seemed to me ( but what do I know ?) that their events would recover in the way so many other events are and this would be bound to be reflected in their results by 2023 . But this is not a share tip column – so don ’ t pay any attention to my meanderings . |
Going alphabetically , how is Hyve placed ? As can be seen from the graph , this is the most dramatic of the three . Five years ago , the like-for-like Hyve price was 626 pence . Now ( at the time of writing in December 2022 ) it is 65 pence . ( There have been two share splits but the graph factors that in ). As is obvious , the crucial moment was the arrival of Covid in Spring 2020 when the price fell from 610 in January to 134 in April . This fall was in part a reflection of the fact that Hyve ’ s portfolio was very widely spread geographically and was likely to be heavily affected by the closure of all international transport links .
Hyve has been remarkably unfortunate to have been hit by two massive rogue events . If not Black Swans , then very dark Grey Swans – Covid and then Ukraine . Russia was the market on which Hyve ( then ITE ) had built its reputation and , to all intents and purposes , that
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geography is now gone . As a result the share price has kept falling . Capitalisation as of November 2022 was £ 160 million and debt was predicted to be circa 70-80 million .
Hyve released its results for 2022 on 13 December . A digest is : “ Headline profit before tax was £ 11.5m ( 2021 : £ 13.9m ) and headline EBITDA of £ 23.7m ( 2021 : £ 28.0m ). Excluding the impact of insurance proceeds of £ 19.3m ( 2021 :£ 65 . m ), headline EBITDA has increased by £ 41.4m to £ 4.4m ( 2021 : loss of £ 37m )”.
This is a good example of the complexities of analysing company reports – even from this single paragraph one could read Hyve ’ s profit in 2022 as being £ 11.5M or £ 23.7M or £ 4.4M – the smaller number being after allowing for the one off benefit of insurance proceeds . Being publicly quoted , Hyve must give an audited profit before tax number as their leading item – in this case £ 11.5m . Analysts project an
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HYVE share price Dec ‘ 17 - Dec ‘ 22 ( Source : LSE )
EBITDA £ 32 million in 2023 . If we add the value of the shares to the debt , then the “ enterprise ” value of Hyve at this point was circa £ 240 million . Using the pretax profit of £ 11.5M as the denominator , then the P / E ratio would be 21 . Using the EBITDA quoted of £ 23.7M , then the P / E would be 10 . And using the £ 4.4M , a P / E ratio would be somewhere around 50 . There are no firm rules for these calculations , so the middle point of 10 is as likely as any other to be quoted .
Hyve ’ s largest acquisition was , of course , the Ascential portfolio at a chunky cost of £ 300 million . This portfolio was dominated by Spring and Autumn Fair , which creates perceptions of Hyve not entirely dissimilar to those of Emerald – that it is heavily retail orientated and more so after the loss of the Russian markets and the sale of the Turkish events . Nonetheless , the Hyve portfolio is now far tighter and straightforward with a number of very
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Spring — 63 |