14th May 2015 13:23
LONDON (Alliance News) - Euromoney Institutional Investor PLC Thursday warned that challenging trading conditions are likely to continue for the forseeable future, although it expects a boost from the strength of the dollar, as one-off gains from asset sales helped lift its pretax profit for the first half of its financial year.
Euromoney Institutional Investor posted a pretax profit of GBP93.3 million in the six months to end-March, up from GBP42.8 million a year before, boosted by a GBP55.1 million gain from the sale of its interests in Capital DATA and Capital NET, and as revenue rose to GBP197.69 billion from GBP195.80 billion.
Stripping out the exceptional gain pretax profit was flat at GBP53.4 million, ahead of the GBP46 million it had guided in March, as a result of revising the estimated cost of its long-term incentive share awards plan.
The company said that the vesting of awards under the long-term incentive plan depends on its meeting certain performance targets by the end of financial year 2017. In light of continuing uncertainty over financial markets and exchange rates, management decided it cannot forecast with enough certainty that the minimum performance target will be met. As a result, a GBP2.5 million expense charged in the second half of 2014 in relation to the plan has been reversed in the first half of the current year, and no further costs in relation to the plan are being amortised in 2015.
Euromoney sold its interests in Capital DATA and Capital NET last November to take up a 15.5% stake in data and analytics provider Dealogic. Whilst the Dealogic deal is expected to be positive in the long-term, in the short-term the loss of earnings from Capital DATA and Capital NET will more than offset its share of profits from Dealogic, and is expected to lead to after-tax earnings dilution of around 2% in 2015.
Euromoney said it got a boost from the recent rise in the US dollar, improving headline revenue growth rates by around 3% and pretax profit by nearly GBP3 million. It generates around two thirds of its revenue and pretax profit in dollars.
The company said the growth in subscription revenue it saw in its first quarter continued into the second, but the performance of advertising deteriorated. Excluding timing differences, event revenue performed better in the second quarter, boosted by growth from large annual events in the wholesale telecoms and specialist finance market.
Euromoney said that trading conditions had remained challenging throughout the first half, particularly in investment banking which accounts for around half of its revenue. However, its businesses servicing the asset management industry continued to perform well, and emerging markets provided opportunities for growth.
"The first half performance reflects the continuing challenges facing the group's markets, with improving subscription revenues from our asset management products being offset by the continued pressures on the investment banking sector," said Chairman Richard Ensor in a statement. "The second half has started as expected and the trading conditions described in these results are expected to continue during the second half."
The publishing, events and information company proposed an interim dividend of 7.00 pence, maintained from the previous year.
Shares in Euromoney are trading down 3.1% at 1,211.00 pence Thursday afternoon.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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