21st Feb 2019 08:24
LONDON (Alliance News) - RELX PLC on Thursday reported revenue growth above consensus with strong improvement from its scientific, technical & medical and risk & analytics businesses.
However, profit was flat due to higher expenses.
Revenue increased 2.0% in 2018, hitting GBP7.49 billion versus GBP7.34 billion in 2017. The latest result was 1.8% ahead of company-compiled consensus for GBP7.36 billion.
Revenue from RELX's scientific, technical & medical arm increased 2.8% to GBP2.54 billion from GBP2.47 billion. Its risk & analytics business also performed well, with revenue up 1.9% at GBP2.11 billion from GBP2.07 billion.
These stronger performances were offset somewhat by the legal business, which posted a drop in revenue of 4.1% to GBP1.62 billion from GBP1.69 billion.
Selling and distribution costs rose to GBP1.19 billion from GBP1.16 billion and administration and other expenses rose to GBP1.73 billion from GBP1.68 billion. Additionally, finance costs rose to GBP217 million from GBP205 million.
Consequently, RELX's annual profit was flat in 2018 from the year before due to increased costs and expenses, with pretax unchanged at GBP1.72 billion.
In 2019, the company intends to make GBP600 million in share buybacks - of which GBP100 million has already completed - down from GBP700 million in 2018. This reduction was attributed to above-average acquisition spend in 2018.
In terms of share repurchases, broker Berenberg had assumed that the buyback would be maintained at GBP700 million while Deutsche Bank had expected a sharper drop to GBP500 million.
The total consideration for acquisitions in 2018 was GBP978 million, of which GBP585 million was for ThreatMetrix. This compares to a total acquisition consideration of just GBP123 million in 2017.
"Key business trends in the early part of 2019 are consistent with 2018, and we are confident that, by continuing to execute on our strategy, we will deliver another year of underlying revenue, profit, and earnings growth in 2019," said RELX Chief Executive Erik Engstrom.
RELX proposed a full-year dividend of 42.1 pence per share, up 6.9% from 39.4p per share in 2017. This is in line with a dividend consensus of 42p per share.
Adjusted earnings per share came in as 84.7p, up from 80.2p in 2017 and just above consensus of 84.4p.
Shares in RELX were up 1.6% at 1,711.50p on Thursday.
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