28th Jan 2016 08:17
LONDON (Alliance News) - Euromoney Institutional Investor PLC Thursday said trading since the end of its last financial year has continued largely in line with expectations, but warned challenging market conditions have continued and resulted in a fall in revenue.
The online information and events group said trading since November has met the board's internal targets as the challenging market conditions experienced in the second half of the last financial year ended in September 2015 continued into the first quarter of the current financial year.
Total revenue in the first quarter of the financial year ended December 31 totalled GBP89.9 million, down 5% from GBP94.7 million a year earlier. After deducting the revenue derived from businesses that have been sold, Euromoney's revenue in the quarter only dropped 4% year-on-year.
Revenue derived from subscriptions was the only segment to experience a lift in the quarter, rising 5% to GBP53.1 million from GBP50.5 million - by far the company's biggest revenue generator.
Advertising revenue fell 2% year-on-year in the quarter to GBP10.2 million from GBP10.4 million, sponsorship revenue dropped 4% to GBP9.7 million from GBP10.2 million, and revenue from delegates was down 18% to GBP14.6 million from GBP17.8 million. "Other" revenue also fell 35% to GBP2.3 million from GBP3.5 million a year earlier.
"The impact of weak energy prices, particularly oil, has continued to hurt delegate revenues, in particular those from our training business which rely heavily on banks and governments in energy-dependent economies, many of them in emerging markets. The decline in advertising revenues, which are especially bank dependent, is consistent with the long-term structural decline being experienced in print advertising," said Euromoney.
The company also reported a GBP800,000 gain from foreign exchange rates on forward contracts in the first quarter, benefiting from the recent strength of the dollar against the pound, which is expected to provide a further benefit to revenues in the second quarter, it said.
The group generates more than half its operating profits in dollars and the translation impact of a one cent movement in the average pound-dollar rate is approximately GBP600,000 on an annualised basis.
Net cash at the end of December stood at GBP30.3 million, a significant rise from GBP17.7 million at the end of September.
Euromoney said cash generation "remains strong," but said the first quarter is traditionally the one with the lowest operating cash flows because of the payment of annual profit shares and other incentives in December.
"The challenging financial markets, and the weakness in the oil price and uncertainty over China in particular, are expected to continue to provide headwinds to the group's activities in the banking and commodities sectors, which account for approximately two thirds of the group's revenues," said the company.
"While the asset management sector is generally more robust, the recent weakness in equity markets has provided a tough start to the year for global asset management firms. However, on a more positive note, the weakness of sterling should provide some protection against this difficult market backdrop," it added.
Euromoney confirmed it will pay its full year dividend of 16.4 pence for the last financial year in February if approved by shareholders at the AGM later Thursday, which will amount to GBP20.7 million.
Euromoney shares were down 0.1% to 885.00 pence early Thursday.
By Joshua Warner; [email protected]; @JoshAlliance
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