ITE Group plc (lon:hyve)
Hyve – A Rights Issue After All

ITE Group plc Financials

ItemCurrent PeriodPrevious Period
Period6 Months6 Months
Adjusted Earnings
Adjusted EBITDA
Statutory Profit(£168m)£2m
Adjusted Profit£20m£24m
Total Debt
Net Debt£157m£109m

Commentary History
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ITE Group plc Share Price
Grade:The Orange Grade - Shares That I Think Show Promise With A Few Caveats.
Title: Hyve – A Rights Issue After All
Company: HYVE - ITE Group plc
Share Price Then: 15p
Author: Ian Smith
Date: Tue 12 May 2020
Comments: Hyve have just announced a £127m rights issue along with a share consolidation.

Fully underwritten rights issue of up to 9 New Ordinary Shares at 69 pence each for every 40 Existing Ordinary Shares, equivalent to 9 New Ordinary Shares at 69 pence each for every 4 Consolidated Ordinary Shares

I dislike share consolidations even though they don’t actually do anything, all too often they are a way to hide previous mistakes that hit the share price.

The plan in this case is to do a 10 for 1 consolidation taking the share price to around 150p which would be twice its typical value over the last 5 years and then roughly double the number of shares in circulation bringing it back to a price that the companies share holder’s are used to.

In other words they are hiding a "real" share price of around 7p.

The interim accounts look terrible but they do include £166.8m of non-cash impairments as a result of the coronavirus outbreak.

A £146m of the impairments were Impairment of goodwill £124m and Impairment of intangible assets £42m which seems like a very tidy tax loss for the future.

Post the rights issue it seems likely that the company will be reporting COVID has shut down or reduced attendance at their events for quite a while.

This suggest to me a share price that could easily just drop and drop yet if 2021 starts with all scheduled events taking place then the company seems well placed.

Monitoring the share price along with COVID 19 seems to suggest that there may be a time towards the end of the year where buying would make sense.
Read Count: 347/10134

Buy/No Buy In A Nutshell
NegativesIs the day of the large trade show over? By being forced to cancel events the exhibitors may have found better ways of achieving the same thing.
PositivesI suspect that vanity shows like motor shows with concept cars are finished but more basic events where the cost to operate a stand are more reasonable are not over.
Initial Review Price86p
Last Review Price86.08p
Last Review Date02-Sep-2020
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