Businessuite Markets
Endeavour’s Management Satisfied Strategy For Retaining And Attracting New Tenants Continues To Bring Stability To The Business.
John Aboud Chairman Endeavour Holdings Limited has released the following report on the financial performance for the three months ending 31 July 2023, providing an overview of the company’s recent results and financial position.
Financial Performance:
In the post-acquisition phase, we have consolidated the Statement of Comprehensive Income and Statement of Financial Position of the subsidiary, Endeavour POS Ltd, into El-IL’s books as of 8 July 2022.
Profit after tax of $11.0M in July 2023 increased by $1.6M when compared with the profit after tax of $9.4M excluding gain on acquisition of the subsidiary in July 2022. Profit including gain on acquisition was $53.4M in July 2022.
Revenue and Expenses:
Revenue from contracts with customers increased by $1.3M, rising from $20.9M in July 2022 to $22.2M in July 2023. This increase can be attributed to the inclusion of three months’ revenue from the subsidiary, compared to only one month in 2022.
Rental expenses increased by $0.4M going from $5.9M in July 2022 to $6.3M in July 2023, This change is primarily due to the continued reduction of rental discounts, decreasing from $0.7M in 2022 to $0.1M in 2023. It is important to note that this increase was offset by the inclusion of three months’ expenses for the subsidiary, compared to just one month in 2022.
Administrative fees decreased by $0.6M, dropping from $1.5M in July 2022 to $0.9M in July 2023. This reduction is mainly attributed to a decrease in legal fees. Operating expenses also decreased by $0.2M going from $0.1M in July 2022 to ($0.1M) in 2023, primarily due to a reduction in the provision for bad debts.
Taxation:
Our company currently benefits from a 0% Corporation Tax rate, Business Levy, and Green Fund Levy, due to amendments under the Finance Act 2020 granted to listed SMEs. Our subsidiary company operates at a 30% tax rate.
Financial Position:
Our Investment Properties decreased by $5.2M as of July 2023 due to a fair value write-down of $10.6M at year-end, net of building improvements at Price Plaza, moving from $913.0M in July 2022 to $908.0M in July 2023. Trade and Other Receivables increased by $1M from July 2022, primarily due to a reduction in trade receivables offset by an increase in prepaid expenses. Trade and Other Payables decreased by $0.2M from July 2022.
Borrowings decreased by $19.0M, reflecting principal repayments of $14.0M, repayment of loan from related party of $45.0M and a new $40.0M loan obtained by the subsidiary.
Dividends:
Interim dividends of 40 cents per common share were declared on June 23, 2023, and paid in July 2023.
EHL’s management is satisfied that its strategy for retaining and attracting new tenants continues to bring stability to the business. We thank our tenants, shareholders, suppliers and staff for their continued support.
In conclusion, as the Chairman, on behalf of the esteemed members of the Board of Directors, I would like to assure our valued Shareholders that Endeavour is steadily recuperating from a somewhat turbulent post-COVID era.
Our unwavering commitment remains focused on ensuring that all our assets yield favorable returns for our shareholders while fostering contentment among our tenants in their occupancy of our properties. I am delighted to announce the successful completion of the acquisition of Massy Properties. In the forthcoming period, we shall commence the necessary repairs and upgrades. Through these enhancements, we are optimistic that our financial performance will continue to strengthen our bottom line.
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Businessuite Markets
Higher Operating Costs And Margin Pressures Impacted Main Event’s Overall Q1 Profitability.
Entering 2025 with a strategic focus on expanding revenue streams, strengthening client relationships, and maintaining financial discipline, the Company achieved revenue growth.
However, higher operating costs and margin pressures impacted overall profitability.
The Company reported revenues of $585.03M, representing a 3% or $17.28M increase over the $567.75M recorded in Q1 2024. This growth was primarily driven by a significant increase in revenue contribution from a previously underperforming segment, reflecting the success of targeted expansion efforts. While revenue remains below prior peak levels, the Company continues to recalibrate and drive demand through expanded service offerings and strengthened client engagements.
Gross profit for the quarter stood at $301.67M, reflecting a 4% decline from $315.82M in Q1 2024. This decline resulted from higher direct costs associated with event execution, infrastructure upgrades, additional non-recurring costs incurred during the period, and increased labour costs related to service delivery. Consequently, the gross margin contracted to 51.56% from 55.63% in the prior year. The Company remains focused on managing costs effectively to support long-term profitability.
Operating expenses increased to $218.72M, up 7.5% from $206.35M in Q1 2024. This rise was attributed to planned administrative enhancements, a significant one-off expenditure for the Company’s 20th Anniversary celebration, higher personnel costs, increased security and fuel expenses, and a 51% increase in amortisation expenses to $11.36M due to renegotiated lease agreements and the addition of a new lease.
Operating profit stood at $87.48M, a 24% decline from $115.28M in Q1 2024. Increased finance costs, stemming from renegotiated lease agreements and new lease additions, also impacted results.
Net profit for the quarter amounted to $73.67M, a 27% decrease from $100.25M in Q1 2024, influenced by lower gross margins, increased operational costs, and higher impairment charges. As a result, earnings per share (EPS) fell from $0.33 in Q1 2024 to $0.25 in Q1 2025.
Total assets grew by 6.4%, reaching $1,306.01M, up from $1,227.37M in Q1 2024. This increase was primarily driven by a 53% rise in receivables, reflecting expanded customer engagements, with several balances stemming from events executed near the period’s end. Short-term deposits increased to $250.24M from $236.50M, while cash and bank balances declined by 30% to $131.74M from $188.91M due to timing differences in collections and reinvestments.
Shareholders’ equity strengthened to $956.17M, reflecting a 5% increase over $912.66M in Q1 2024. This growth was primarily supported by retained earnings, demonstrating the Company’s ability to generate and reinvest profits efficiently.
Payables increased by 47%, rising to $229.58M from $156.38M in Q1 2024, mainly due to the timing of event executions towards the end of the quarter, resulting in higher accrued expenses related to supplier payments.
While the macroeconomic environment remains uncertain, the Company remains optimistic about the upcoming quarters. The focus will be on enhancing operational efficiencies to manage cost structures effectively and strengthening revenue streams through deeper market penetration and strategic partnerships. Additionally, the Company intends to use owned-events as a driver of revenue growth.
Our continued success is a testament to the dedication, creativity, and resilience of our exceptional team. Their ability to adapt and innovate in a dynamic industry ensures that we consistently exceed expectations and deliver outstanding experiences. Their dedication was especially evident during the holiday period, where they worked tirelessly to execute high-quality events, ensuring continued excellence in service delivery. We also recognise and appreciate the unwavering guidance of our Board; whose strategic leadership continues to drive our company’s growth and long-term vision.
Solomon Sharpe Chief Executive Officer
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