15th May 2014 09:13
LONDON (Alliance News) - Euromoney Institutional Investor PLC Thursday posted a broadly flat pretax profit for the half year to end-March, as continued investment offset a rise in revenue.
However the financial information publisher and conference organiser reiterated its warning that the strengthening of sterling would hit its second-half results.
It maintained its interim dividend at 7.00 pence per share.
Euromoney posted a pretax profit of GBP42.3 million, broadly flat on the previous year, as revenue rose to GBP195.8 million from GBP187.3 million, but this was offset by operating margins declining to 28% from 30% and by exceptional costs of GBP1.3 million related to the acquisition of Infrastructure Journal and the sale of MIS Training.
The fall in operating margin was as a result of its continued investment in digital publishing, including the launch of its new Delphi content development platform in the second quarter.
Revenue growth in the first half was boosted by a 10% increase in event sponsorship revenues from new financial market events in the second quarter. Subscription revenues rose 3% as the company launched new products, and the asset management sector improved.
Advertising revenues declined 2%; Euromoney said that a sudden improvement in advertising trends in the final quarter of 2013 was related to beneficial product timing and not an improvement in the advertising markets as a whole. However, the decline in advertising revenues has slowed compared to 2013.
The company said it continued to focus on its strategy of "building [...] a robust and tightly focused global online information business with an emphasis on emerging markets." To achieve this, it is continuing to shift its product mix towards electronic subscription products and investing in technology to assist the transition of its products to digital platforms.
The company said that market conditions have remained challenging in 2014, particularly in the investment banking sector. It does not expect any significant changes in revenue trends until "more of the sectors in which we operate improve."
It continued to warn that the strengthening of sterling against the dollar is expected to have a more significant impact on its headline revenues and translation of overseas profits in the second half.
"With two-thirds of revenues and profits generated in US dollars but reported in sterling, the currency headwind is the most significant factor at the moment and this will hold back forecasts," commented Edison Investment Research analyst Fiona Orford-Williams.
Shares in Euromoney were trading down 0.8% at 1,130.00 pence Thursday morning. Euromoney is 67.87% owned by Daily Mail & General Trust PLC.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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