Blenheim drops plan to smooth out profits: Conferences company bows to pressure from large investors after share price sinks

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The Independent Online
BLENHEIM GROUP, the conferences and exhibitions organiser, has bowed to opposition from large investors and abandoned plans to smooth out its lumpy profits record, caused by events that are held only once every two or three years, writes Topaz Amoore.

Under the plan, Blenheim would have brought forward projected profits from events such as the Batimat construction show, held biennially in France.

For a hypothetical event taking place in June 1995, Blenheim planned to spread anticipated profits of pounds 70,000 over the preceding two-year period, with pounds 10,000 being recognised in 1993, pounds 27,500 in 1994, and pounds 32,500 in 1995.

Advisers are said to have approved the plan when it was first mooted in March. But later that month and in the first half of April Blenheim's share price sank from 604p to below 520p. One analyst said some institutions, already made nervous by Blenheim's decision to change its year-end, got cold feet and sold the shares. Yesterday the shares closed at 530p.

Neville Buch, chief executive, yesterday said the plan would have been a way of giving a truer reflection of underlying profits. 'We work for a couple of years on a biennial show and only recognise the profits in a nanosecond at the end of the year,' he said.

'We discussed a two-year profit recognition with brokers and analysts . . . and the general view was that it would be a movement towards a lack of transparency.' He said the City knew it could expect uneven profits from Blenheim. 'For most people it made perfectly good sense to make the assessment themselves.'

He did not think the share price fall was linked to the accounting proposals. 'The price has come off a little since the results (in March) were announced, which is not unusual.'

(Graph omitted)

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