Main Event looks to return of party profits
Published:Wednesday | March 23, 2022 | 12:08 AM
Main Event Entertainment Group Limited, MEEG, the events management firm, is hanging its hat for the return of profitability to the business that suffered a more than $40-million loss for the quarter to January this year, on the government’s recent withdrawal of the Disaster Risk Management Act. The action, announced in Parliament by Prime Minister Andrew Holness last week, frees up movement and assembly, including the lifting of a ban that effectively reopens the party economy that has been largely shuttered for the past two years by the state to stem the spread of the COVID-19 disease.
“We can affirm that our confidence remains strong. The lifting of COVID-19 restrictions on the entertainment industry now seems imminent. While trends and conditions are difficult to predict, we are eager to restore interest following this latest setback,” CEO Solomon Sharpe and Finance Committee Chairman Dr Ian Blair said in a statement accompanying the three-month unaudited financials to January 31, released ahead of the government’s March 17 announcement.
The ban on entertainment events was lifted effective March 18.
MARKETING CAMPAIGNS
A number of large events have started their marketing campaigns amid the removal of most COVID-19 protocols since last week. But over the quarter from November last year to January 2022, the MEEG financial performance see-sawed from a hopeful positive trend up to December, with its fortunes dipping again after the emergence of the Omicron variant.
“The reimposition of restrictive measures brought an immediate and sharp decline in demand for services, and we faced multiple requests to scale back or defer holiday season projects. In some instances, planning and preparatory work had already begun and certain costs already incurred. Such sunken costs have contributed to elevated operating costs this quarter,” the company’s management said.
Main Event suffered a $40.6-million loss in its first quarter ending January 2022, down more than 600 per cent over the 12 months from $8 million for the first quarter of 2021. For the full year to October 31 last year, the company posted a net profit of $16.1 million, a rally on the $18.3 million loss it chalked up in 2020, the first year of the pandemic. The Q1 2022 loss came despite revenue for the three months of $201.7 million having bettered the $175.8 million a year earlier by some 15 per cent. Main Event generated a net profit of $16.1 million for its full year results to October 2021 off $758.4 million in revenue, a profit rally from a loss of $18.3 million in 2020, when it did $1.05 billion in revenue.
The MEEG management said the quarterly results reflected the “persisting volatilities” faced by the business in the ongoing pandemic, adding that its operations were also affected by “mixed opportunities and elevated operating costs”.
The loss was largely non-cash, as the company’s cash position grew in the quarter to $221.4 million from $162 million a year earlier.
The company remains strong, with shareholder equity at $509 million, down from $541.7 million a year earlier, represenbting a 7.0 per cent fall-off. The reduction was influenced by a 4.0 per cent dip in its total assets.
Main Event previously estimated that the pandemic restrictions resulted in the wiping out of about half of the entertainment sector. In response, Main Event scaled down its operations and moved its office to a smaller location in Kingston.
“The last year saw many challenges which we faced head-on as a company. This resulted in some losses, resignations and migrations, but we persevered nonetheless and emerged by yearend a more finely honed and determined team, ready to face any challenge of the new normal in our industry,” the MEEG management said in its 2021 annual report, which was also released this month.