- Full year guidance reaffirmed at top end of range
- Dividend payments resumed
- Targeted acquisition potential post Maritime disposal
Management calling guidance towards the top of the consensus range did little for investors in Informa (INF). Shares in the FTSE 100 exhibitions and publishing company drifted 4% lower in early trading to 578.6p despite seemingly strong results for the six months to 30 June 2022 thanks to the continuing return of live and on-demand business-to-business events.
Revenues jumped 59% (44% underlying) to £1,096 million, while adjusted operating profits more than tripled to £213.3 million, or up 153% on an underlying basis. That was comfortably ahead of analyst forecasts of £209 million.
Informa also sold its Maritime Intelligence business to Montagu Private Equity for £385 million, about 23-times 2021 adjusted operating profit, according to Megabuyte number crunching.
A resumed 3p per share dividend, new 40% income to earnings payout ratio target for future dividends will also bolster the return of almost £300 million to shareholders via stock buybacks.
Within the Academic Markets division strong demand for e-Books and advanced learning solutions have contributed to 7% revenue growth at Taylor and Francis (26% of first half revenue).
A resumption of live and on demand business-to-business events helped drive an 11% underlying increase across the group’s Markets division (41% of first half revenue). The 220 live events attracted over 28,0000 exhibitors and 1 million attendees.
RESHAPED BUSINESS
The Maritime sale is significant because it completes the portfolio refocus programme that has generated proceeds of £2.5 billion.
Significantly management have today highlighted further ‘targeted expansion’, and the proceeds from the Maritime disposal will help facilitate this.
Last month Informa acquired Industry Dive, a US business media company, for £323 million. The deal gives Informa access to an in-house content arm that focuses on niche, professional audiences.
This Industry Dive acquisition is a good example of how acquisitions are enabling Informa to enhance its business to business digital offering.
Today’s results vindicate this with good progress being achieved in the Digital Services area with double-digit revenue growth recorded.
Industry Dive currently publishes 27 brands including BioPharma Dive, Construction Dive, Cybersecurity Dive, Food Dive, Healthcare Dive, MedTech Dive and Waste Dive, with a total audience of 13 million.
Informa intends to quickly launch new Dive brands and roll out new in-person and online events for the existing brands.
It is also anticipating increased engagement with Informa’s existing events customers using Industry Dive’s content, as well as the cross-selling of specialist content marketing and lead generation services..
Audience is monetised by specialist marketing and business-to-business lead generation.
EXPERT VIEW
Commenting on Informa’s first half results. Shore Capital analyst Roddy Davidson said:
‘We are pleased to note the positive momentum and further portfolio optimisation, which backs up our expectation that Informa will deliver strong medium-term EPS growth, positive cash generation and an attractive dividend per share progression.’
‘More broadly, we like its extensive and diversified portfolio of leading B2B exhibitions, commitment to adding value and driving organic growth through digital innovation, and the long-term growth dynamics of the exhibitions industry as a whole.’
