16th Feb 2023 14:20
(Alliance News) - UBS were upbeat about Relx PLC's results on Thursday, after the professional information and analytics firm reported a better-than-expected 18% surge in revenue and a larger-than-expected share buyback programme.
UBS reiterated its 'buy' rating for Relx, with a target price of 2,650 pence.
Relx shares were up 2.5% at 2,509.00p each in London on Thursday afternoon, making it one of the FTSE 100 best performers of the day.
The shares are up 11% over the past 12 months.
AJ Bell Investment Director Russ Mould said: "Helping to drive the index on Thursday was Relx, up 3.2% after its full-year results were well received. Despite being one of the UK market's biggest companies, Relx tends to stay out of the spotlight and is often underappreciated by investors. In a nutshell it provides information to people working in industries such as legal and insurance to help them do their job in a better way."
London-based Relx recorded revenue of GBP8.55 million in 2022, up 18% from GBP7.24 million in 2021. The company noted that Electronic revenue, representing 83% of total revenue, grew by 6%. This was also helped by a further recovery in face-to-face activity and a reducing print drag.
Revenue was marginally ahead of expectations. According to UBS, it expected revenue of GBP8.54 billion. UBS said this outperformance was driven primarily driven by Exhibitions, which was "dilutive" to group margin.
Exhibition revenue amounted to GBP953 million, significantly ahead of UBS expectations of GBP868 million.
Relx's pretax profit climbed by 20% to GBP2.49 billion from GBP2.08 billion.
The company proposed a full-year dividend of 54.6 pence, up 10% annually from 49.8p. This was also ahead of UBS expectations, with UBS expecting a full-year dividend of 56.5p.
Looking ahead, Relx said it expects momentum to remain strong across the company, with underlying growth rates in revenue and adjusted operating profit expected to remain above historical trends.
The company said it intends to buyback GBP800 million in shares in 2023, of which GBP150 million has been completed. UBS said it had expected Relx to announce a GBP600 million buyback programme.
In 2022, Relx made GBP500 million on share buybacks.
Looking ahead, UBS said: "Given positive commentary on organic growth trends, and Exhibitions margins, and an GBP800 million buyback, we would expect a low-single-digit increase in consensus earnings per share for 2023."
Chief Executive Officer Erik Engstrom said: "Relx delivered strong revenue and profit growth in 2022. The improving long-term growth trajectory is being driven by the ongoing shift in our business mix towards higher growth analytics and decision tools that deliver enhanced value to our customers across market segments."
Away from results, Relx said that Senior Independent Director Wolfhart Hauser will step down after ten years on the board. He plans to retire at the company's annual general meeting on April 20.
Suzanne Wood will succeed Hauser as senior independent director.
By Sophie Rose, Alliance News reporter
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