Main Event Entertainment Group has suffered its worst financial performance in 2020 with year-over-year profits plummeting by $115 million or down 119%.

Declaring 2020 as a year of extraordinary challenges, Main Event—which is Jamaica’s premier events management, promotions and digital signage outfit—ended its 2020 financial year on October 31 in the red with net profit at minus $18.22 million coming from a profit of $ 97.33 million in 2019.

At the same time revenues fell by $753.01 million or 42% to just over one billion coming from  $1.79 billion in 2019.  Up to 85% of the revenues for 2020 were booked during the first half of the year. The company’s principal officers:  Chairman Ian Blair and Chief Executive Officer Solomon Sharpe are grateful and take some solace to have achieved revenues of over $1 billion in this current climate.

According to the principal officers, “faced with declining revenues, we took quick and effective actions to ease the impact to our cash flows and profitability. We moved aggressively to reduce operating costs, with all cost categories under continuous review.”

Success at reducing expenses

Administrative and general expenses for the year was cut by 27% to end the year at $484.8 million, coming down from the $667.05 million recorded at the end of 2019. Total administrative and general expenses represent 46% of revenues, compared to 37% of revenues in 2019.

Main Events’ operating profit for the year was a mere five million dollars compare to the $120.01 million posted last year. The income statement for the current year includes some individually significant items such as a $57.44 million reduction in Expected Credit Losses (ECL), which has aided in easing the impact of the revenue decline over the COVID-19 period.

Depreciation and amortisation charges totalled $148.33 million, which represented 31% of the total expenses for the year. This compares to $116.90 million or 18% of total expenses in 2019. Additionally, finance costs of $23.47 million for the current year included $7.55 million re-classified (from rent) to lease-related finance charges.

Capital expenditure suspended for most of the second half of 2020

On the balance sheet, Main Events has maintained a good asset base, despite suspending capital expenditure for much of the second half of the year and continuing depreciation throughout. Total assets came out at $854.12 million, which represented a 17% decline from the over one billion at the end of 2019.

Current assets registered a 43% decline from $380.53 million in 2019 to $218.16 million in 2020, which is indicative of the reduction in business. The receivables decline of $198.83 million or 74% results from lower revenues in the second half, paired with strong collection efforts.

Cash flows from operations showed improvements for a second year growing by 22% to $243.61 million from $199.8 million. Shareholder’s Equity has declined by $45.22 million or 8% in the current year. This decrease reverses a 7% gain in the prior year and includes a cash dividend of $27 million paid to shareholders during 2020.

2020 showed promising start but business activity curtailed

In their report to shareholders, Messrs Blair and Sharpe explained, “The financial performance in the second half of the year reflects the brunt of the impact of the COVID-19 pandemic. The year offered a promising start, showing good momentum with strong revenue and profit growth carrying partially through the second quarter.”

The Main Event principals noted that the company has since been confronting with unprecedented reductions in business activity due to the global pandemic. This has had a major impact on revenues and net earnings for 2020.