Hyve launches £125m rights issue as it tackles corona crisis

Global exhibition organiser Hyve, which counts brands such as Africa Oil Week, Breakbulk, Mining Indaba, Bett, CWIEME and the Shoptalk and Groceryshop events in its international portfolio, has issued a £125m (US$154.6m) rights issue.

Management took what it terms ‘decisive action’ along with new measures to reduce costs and manage cash and liquidity, as it battles the effect on its business from the coronavirus outbreak.

In an interim report on 6 May, the company announced it had obtained waivers for the leverage ratio and interest cover covenants up to and including March 2022. Additional liquidity of £35m has been secured through deferrals of the next two term loan repayments until December 2023, previously due in November 2020 and November 2021, conditional on the successful completion of the rights issue.

The company’s interim results announcement clarified that Hyve’s Postponement Plan had moved 30 events to later this financial year, with 18 postponed to FY21 and 13 cancelled in this financial year.

Talks were ongoing with venue owners to defer and rollover costs for postponed or cancelled events, the company said.

Hyve added that it was accelerating its omni-channel strategy to connect with customers online, with Shoptalk leading the way.

Revenue in the interim report was down to £96.3m from £107.8m in 2019, impacted by various government restrictions connected to controlling coronavirus.

The company reported a statutory loss before tax of £168.3m (2019: profit of £1.9m), after £166.8m of non-cash impairments, as a result of the coronavirus outbreak. The company suspended dividends.

Hyve has also identified £10m worth of cost savings in FY 2020 (approximately £9m of which from HQ restructuring, non-staff savings and venue savings, and approximately £1m of which from reduced capital expenditure) and £42m in FY 2021 (approximately £40m of which from HQ restructuring, non-staff savings and venue savings, and £2m of which from reduced capital expenditure).

The proceeds of the rights issue, the company said, would be used to reduce net indebtedness and provide working capital flexibility to the group to allow it to protect the value of its core events.

The rights issue, which is subject to shareholder approval at a General Meeting on 27 May 2020, is fully underwritten by Numis (Corporate Broker), Barclays and HSBC.

Mark Shashoua (pictured), CEO of Hyve Group plc, commented: “We started this year in a very strong position. We reported strong like-for-like growth in Q1 and added two market-leading products, Shoptalk and Groceryshop to our portfolio.

“When the pandemic began, we initiated Project Fortress – Hyve’s immediate response to Covid-19 – leaving no stone unturned. We responded rapidly and decisively by rescheduling events, reducing our costs, managing cash and supporting our customers and people through this crisis. In these unprecedented circumstances we have done everything we can and at pace to protect the business. Today we have strengthened our financial position through a £126.6m fully underwritten rights issue, to provide additional security through this crisis and to support the long-term success of the business.

“Market-leading events act as a key trading platform for many industries and will play a vital role in reigniting economies, and we are working closely with customers, government and industry bodies to make this happen. We have also accelerated our focus on building our omni-channel capabilities driven by the Shoptalk and Groceryshop acquisition. Digital will not replace face-to-face events, but it complements them with online activity that supports our customers year-round and maximises the profile of our brands. 

“Whilst the immediate impact of temporary government restrictions has been severe, we believe these are short-term challenges. Our strategy of building a portfolio of market-leading events and the investment made over the last three years puts us in a strong position when we exit this crisis.”

Hyve group operates 133 events globally and, as at 31 March 2020, the group’s net debt was £177.6m relative to total committed facilities of £250m.