Arena Events Group saw revenues and profits halve in the most recent quarter as COVID-19 continued to inflict “economic destruction” on the events sector.
The London-listed event solutions provider, which specialises in temporary seating, structures and services, said revenue fell from £88.3m in 2019 to £42.8m in the three months to September 30. Gross profit fell from £24.9m to £14.8m.
During Q3, Arena delivered numerous structures in the UK and Ireland for temporary COVID-19 medical facilities and testing centres, as well as supporting the reactivation of the European Tour golf at numerous venues including in Spain, Portugal and at Wentworth.
It also completed the installation of new seating systems at the north and south stands at the London Stadium and commenced build of a new stadium for Edinburgh Rugby Club at Murrayfield.
In the US it supported the reactivation of the NBA season in Orlando and provided facilities for the US Open golf and PGA Championships.
The group said it was impacted during the summer months by the cancellation or postponement of most of the world’s major and iconic sporting fixtures including Wimbledon, the Open, Queens, Henley Regatta, the Ryder Cup and the Tokyo Olympics. Events that took place without fans meant a much smaller than normal requirement for temporary infrastructure.
Arena said its balance sheet was aided by significant overhead cost reductions, with administrative expenses down by 36% to £9.8m. This was due to rapidly executed plans to reset the cost base across all regions in response to the pandemic, with furlough salary assistance in the UK totalling £2.2m and the continued benefit of the 2019 delivered Project Lift in the US. It also merged its European and Middle East/Asia divisions during the period.
Adjusted earnings decreased to £4.4m from £8.8m in Q3 2019, with an operating loss of £3.3m, compared to a profit of £3.8m last year.
Greg Lawless, Arena CEO, said: “We are at the epicentre of the economic destruction that the COVID-19 pandemic is causing to the hospitality sector worldwide with virtually no live audience participation at any event over the last six months.
“However we have been proactively working to reduce the impact on our business as much as possible by securing extensive non-event revenues, reducing our cost base and raising funds from both our bank, HSBC, and shareholders to be able to put the group in a solid financial position to trade through these very difficult times and emerge in a stronger, more cost efficient position.
“The fact that we have delivered a positive EBITDA out-turn for these first six months, taking everything into consideration, reflects a robust performance that demonstrates the benefits of a global platform and, in particular, the tremendous tenacity, agility and positive attitude of the senior executives and their teams across all of our business units.”
Looking ahead, Arena has signed a multi-million pound contract extension for the rental of 26,000 seats to the Tokyo 2020 Olympics, now due to be held in 2021
It has also secured additional funding of £15.6m through the UK’s Government Coronavirus Large Business Interruption Loan Scheme.
The group’s share price has rallied this week, perhaps due to the announcement that Pfizer’s proposed Covid-19 vaccine has a 90-per-cent success rate. The share price hit a six-month high on Wednesday morning at 8.86, more than double the 4.3 on November 3.
Image: Arena Events Group