Tarsus Pushes Exhibitions Abroad on Its Bearish View of Europe

Tarsus Group Plc (TRS), the U.K. organizer of the Dubai Airshow, intends to get 50 percent of its revenue from emerging markets by 2013, shifting away from Europe to Asia and Latin America.

“I’m very bearish on the U.K. and Europe, where the exhibition industry is in decline,” Managing Director Douglas Emslie said today in a telephone interview. “Our priority is Turkey and China; they’re growing faster and the mood is a lot more positive.”

Tarsus collected 7.3 million pounds ($11.3 million), or 38 percent of its revenue, from emerging markets in the first half, the company said today in a statement. That’s up from 5.7 million pounds, or 30 percent, a year earlier. European sales slid 42 percent to 4.1 million pounds.

“First-half figures show good profit growth driven by strong momentum in the U.S. and emerging markets,” Steve Liechti, an analyst at Investec Securities, said today in a note to clients. He reiterated a buy recommendation and predicted the stock will rise 6.6 percent within a year.

The Jersey-based company bought 70 percent of Lifemedia Fuarcilik AS, a Turkish exhibition organizer, for 15 million pounds ($23.2 million) in March 2012 and is seeking to complete the acquisition of 50 percent of GZ Auto, a car show operator based in Guangzhou, China, later this year.

Aspirational Class

“Turkish and Chinese customers belong to a growing, more international, aspirational middle class that wants to differentiate itself based on what they buy,” Emslie said in the interview. “This is a good opportunity for us.”

Like-for-like revenue in Turkey jumped 17 percent in the first half, while sales in China soared 39 percent in the period, Tarsus said today. Total revenue was unchanged at 19.2 million pounds.

Tarsus shares advanced 0.2 percent to 169 pence as of 2:08 p.m. in London trading, extending their gain this year to 30 percent.

Last year, Tarsus organized the 12th Dubai Airshow, which had a record turnout of more than 900 companies from 50 countries, according to the U.K. firm. It operates top regional events for the labelling and package printing industries, and runs programs for medical professionals who work on anti-aging treatments.

Indonesia and Mexico

Tarsus is also looking for growth opportunities in Southeast Asia, particularly Indonesia, where Emslie said there is a “massive domestic market” for its services. Operations in Latin America are currently limited to Brazil and Mexico, which Tarsus considers a potential target nation for growth.

“I like Mexico better than Brazil,” he said. “More business operations in Mexico could come in the next 18 months.”

The Mexican economy will probably grow 3.5 percent to 4.5 percent annually over the next decade, overtaking Brazil as the largest economy in South America, according to Nomura research analysts.

“Mexico will become Latin America’s largest economy and one of the emerging markets’ most dynamic,” Nomura said in a note to clients on July 10. “Mexico is an increasingly attractive choice for U.S.-destined, labor-intensive manufacturers.”

To contact the reporter on this story: Maria Tadeo in London at mtadeo@bloomberg.net

To contact the editors responsible for this story: David Risser at drisser@bloomberg.net; Douglas Lytle at dlytle@bloomberg.net

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