Media group Ascential (ASCL) has upgraded guidance modestly despite the ongoing hit to its events business from the pandemic as its e-commerce business thrives. Its shares dipped 1.6% to 360.4p on the news.
Events-adjusted pro-forma revenue growth (effectively stripping out the events side) for the year is expected to be 2%. The company’s division offering data and analytics support and managed services to the e-commerce sector doing particularly well.
Total revenue for the company for the year ended 31 December 2020 is expected to be in the range of £298 million to £302 million compared to consensus of £297 million. This compares with overall revenue for 2019 of £416.2 million or, at the top of the guided range, a year-on-year drop of 27.4%.
The company said that profitability has improved as the year has progressed through a combination of strong cost control measures taken in response to the pandemic and a positive revenue mix in favour of higher margin digital revenue streams.
Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) for 2020 is expected to be in the range of £48 million to £52 million compared to consensus of £43 million. In 2019 EBITDA totalled £128.5 million.
Liberum analyst Harry Read was encouraged by the statement. He said: ‘Ascential will be a long-term benefactor of Covid-19 given the underlying shift to omni-channel and e-commerce, and with Amazon’s dominance within this space, should catalyse revenue growth in the digital commerce division, with the events business fully recovering in the long term.’
