Hyve slumps to big loss, warns of tough events scenarios for new year

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Hyve Group PLC (LON:HYVE) slumped to a £312.9mln annual loss as its face-to-face events were cancelled due to the coronavirus and it took a large impairment charge.

Amid an uncertain outlook but with ongoing disruption highly likely for event schedules, the company set out two scenarios for the new financial year.

One assumes no western events take place throughout the year while a ‘Recovery’ scenario that assumes events in China, Russia, Ukraine and Turkey are able to go ahead, but smaller than in previous years with a largely domestic customer base, and events in western markets coming back during the second half.

Hyve said it is “hopeful of returning to a normalised schedule of events” in the 2022 financial year, “albeit with events still recovering in terms of revenue and customer numbers”.

More than 100 online events were tried and tested in the past year, including a proof of concept trading and networking event where, working with a third-party operator, it allowed 2,000 participants to take part in 18,000 meetings.

“We are now in the process of assessing the long-term viability of such a solution in terms of product offering, monetisation potential and the timing and extent of investment required,” Hyve said.

For the past year to September 31, the group’s revenues fell 52% to £105.1mln and, if the £263mln impairment is excluded, fell to an £18.7mln adjusted loss before tax from a £50.4mln pre-tax profit a year earlier.

Analysts at Peel Hunt said this profit number was better than it expected and that net debt was lower than forecast at £67.7mln too

Revenues under the Recovery scenario would be circa £95mln, however, which is much lower than the broker’s £145mln current forecast, but the losses are mitigated by further insurance claims, giving a PBT of £5mln.

“Should no Western events happen in H2, revenue would be £30m lower and operating profit £12m lower. In either case, forecast debt would be in the range of £100-120m, with material headroom over the liquidity threshold.”

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