Alternative performance measures reporting for event groups and the reconciliation auditors expect

The pack has two operating profit figures four pages apart. One says 2.8 million. The other says 3.6 million. The second is the one the commentary is written around, and the first is the one in the accounts.

Nothing has gone wrong yet. Alternative performance measures reporting exists because the statutory figure often answers a question nobody in the room asked, and the adjusted figure answers the one the management team runs the business on. What goes wrong is the 800,000 sitting between them, which arrives as a single line labelled adjusting items and gets read by nobody.

What counts as an alternative performance measure?

Wider than most event finance teams assume, which is the first thing to fix.

The European Securities and Markets Authority set the definition in its guidelines on alternative performance measures, published on 5 October 2015 as ESMA/2015/1415en. Paragraph 17 reads: "For the purpose of these guidelines an APM is understood as a financial measure of historical or future financial performance, financial position, or cash flows, other than a financial measure defined or specified in the applicable financial reporting framework."

Count them in a typical organiser's board pack. Adjusted operating profit. Underlying revenue growth. Forward bookings. Net debt. Cash conversion. Contribution per square foot. Every one of those is an alternative performance measure, and every one of them needs the same three things: a definition, a reconciliation, and a reason for existing. Revenue, profit or loss and earnings per share are defined by the framework itself and sit outside the guidelines, which paragraph 19 says in as many words.

The count matters because teams tend to treat the discipline as something that applies to one headline number. It applies to all of them, and the ones nobody polices are usually the operational measures further down the pack.

The reconciliation the guidelines actually ask for

Three sentences of the 2015 guidelines carry most of the work, and they are more specific than the summary versions suggest.

Paragraph 26 asks that "A reconciliation of the APM to the most directly reconcilable line item, subtotal or total presented in the financial statements of the corresponding period should be disclosed, separately identifying and explaining the material reconciling items."

Paragraph 27 adds that the issuer should also present that statutory line item itself, so the reader is not left to go and find it.

Paragraph 28 closes the gap that most internal packs fall through: "Where reconciling items are included in financial statements, users should be able to identify them in those financial statements. Where a reconciling item cannot be extracted directly from the financial statements, the reconciliation should show how the figure is calculated."

Read together, those three rule out the thing most event groups actually do, which is to name a single adjusting items total and move on. The total is the least informative number in the bridge. Every argument anyone will have about the adjusted figure is an argument about one of the components.

Working an 800,000 bridge line by line

Take the portfolio from the opening. Revenue of 24.6 million, statutory operating profit of 2.8 million, adjusted operating profit of 3.6 million.

Statutory operating margin is 2.8 divided by 24.6, which is 11.4 per cent. Adjusted operating margin is 3.6 divided by 24.6, which is 14.6 per cent. Three and a bit points of margin are created by the 800,000, so the composition of that 800,000 is worth more than one line.

Break it into four:

Amortisation of acquired intangibles, 310,000. This is the accounting cost of brands and customer relationships bought with two shows. It has no cash in it and it is genuinely a consequence of the purchase price rather than of trading. Almost every group adds it back and the case for doing so is strong.

Integration costs on a show acquired eighteen months ago, 240,000. Real cash, spent this year, on moving an acquired show onto the group's systems. Defensible as an add back once. Less defensible in the fourth consecutive year of doing it.

Restructuring, 95,000. Cash, this year, on removing two roles from the operations team.

Impairment of a launch brand written off after its second edition, 155,000. Non-cash, and it is the accounting recognition that a bet did not work.

Now the arithmetic reads differently. Of the 800,000, 465,000 has no cash in it and 335,000 was money that left the business this year. A reader who accepts the first category and rejects the second lands on an adjusted operating profit of 3.265 million and a margin of 13.3 per cent. That reader can now say which line they disagree with and by how much, which is the entire purpose of the exercise. A single adjusting items total makes the same disagreement impossible to state.

What a listed group's version looks like at scale

The ratio between the two profit figures can get large enough to be alarming, and it is worth seeing a published example rather than assuming the small numbers above are the whole picture.

Informa PLC reported a statutory operating profit of 141.7 million pounds for 2025 and an adjusted operating profit of 1,139.8 million pounds. The difference is 998.1 million of adjusting items in operating profit, against 452.2 million the previous year. Adjusted operating profit is roughly eight times the statutory figure.

What makes that presentation defensible is the table underneath it. The 998.1 million is broken into eleven named lines, and the two largest explain almost all of it: a goodwill impairment of 484.2 million and intangible asset amortisation of 342.5 million. Acquisition costs are 10.1 million, integration costs 84.4 million, restructuring and reorganisation 21.2 million. There are negative lines in the list too, including a foreign exchange gain of 3.1 million and a fair value gain on contingent consideration of 1.4 million, which matters because a bridge containing only add backs invites the suspicion that the add backs were selected.

Add 998.1 to 141.7 and you get 1,139.8 exactly. That closure is what a reader checks first, and it takes about ten seconds.

Why does the recurring add back cause the argument?

Because the label is doing work the item cannot support, and the guidelines anticipated it.

Paragraph 25 of the 2015 ESMA guidelines says issuers "should not mislabel items as non-recurring, infrequent or unusual", and goes on: "For example items that affected past periods and will affect future periods will rarely be considered as non-recurring, infrequent or unusual (such as restructuring costs or impairment losses)."

Event groups run straight into this, because acquisition is the standard growth route in the sector. A group that buys two shows a year has integration costs every year. Those costs are as predictable as the venue bill. Calling them non-recurring for the fifth year running is a labelling choice that a reader with five years of packs in front of them can disprove in an afternoon.

My own view is that the fix is not to stop adding them back. It is to stop calling them non-recurring and to publish the multi-year series of the add back itself, so a reader can see that integration cost has run at somewhere between 200,000 and 300,000 a year for four years and form their own opinion about whether it belongs in the run rate. A group that shows the series is making an argument. A group that shows one year's total and a label is asking for trust it has not evidenced.

Prominence, which is where the pack usually fails

The last piece is presentational, and it is the one that survives review least often.

Paragraph 35 says APMs "should not be displayed with more prominence, emphasis or authority than measures directly stemming from financial statements", and paragraph 36 adds that their presentation "should not distract from the presentation of the measures directly stemming from financial statements". Paragraph 33 asks issuers to explain the use of an APM so users can understand its relevance and reliability.

RELX PLC puts the same caution into its own 2025 annual report on Form 20-F, stating that adjusted financial measures "should not be considered in isolation from, or as a substitute for, financial information presented in compliance with IFRS", and that they "may not be directly comparable to similarly reported measures by other companies".

At organiser scale this means the statutory line goes on the same page as the adjusted one, at the same size, and the definition sits with the number instead of in an appendix nobody opens. It costs a row in a table. It removes an entire category of later argument about whether the pack was written to flatter.

Where this stops

The reconciliation discipline makes an adjusted figure legible. It does not make it right, and there is a failure mode that a perfect reconciliation will not catch.

A bridge can be complete, itemised, arithmetically closed and still describe a business whose adjusted profit has exceeded its statutory profit for eight consecutive years by an amount larger than the statutory profit itself. Every individual add back can be defensible while the pattern says something the individual lines do not. The only test for that is the multi-year view, and the multi-year view is not something the guidelines require anyone to produce.

The other limit is internal. A private organiser is outside the scope of these guidelines entirely, since they address issuers with securities admitted to trading on a regulated market. Adopting the reconciliation format anyway is a choice, and the honest reason to make it is that the discipline is useful rather than that anyone will enforce it. If your group is not listed, nobody is coming to check, and the definitions will drift unless somebody owns them. Where those definitions overlap with growth reporting, the exclusion list behind an organic growth rate and the correction inside the phasing line for cycling shows are each large enough to be written up separately, and the pacing figure struck before an edition runs has no statutory line to reconcile to at all.

The first step this week

Take the last board pack, list every number in it that does not appear in the statutory accounts, and put a tick against the ones that have a written definition and a bridge. The unticked rows are your alternative performance measures reporting gap, and on a first pass there are usually six or seven of them. Start with the largest, write the bridge with each material component on its own row, and file it with the rest of the finance reporting definitions so the next pack starts from it.