21st Feb 2014 11:10
LONDON (Alliance News) - Informa PLC Friday pledged to deliver further growth in adjusted earnings per share in 2014, as it reported improved revenue and pretax profit for 2013 in the first set of results under new Chief Executive Stephen Carter.
The business media and events company maintained its final dividend at 12.50 pence, bringing its total dividend to 18.90 pence, up from 18.50 pence in the previous year.
The company's outlook was in focus after Carter took the reigns at the beginning of this year. The new CEO said a key objective for Informa in 2014 will be managing the transition in leadership as smoothly and effectively as possible. He set out two major challenges for Informa: addressing the shift in technology happening in Informa's market, and returning the company's Business Intelligence division to growth.
?For Informa, 2014 will be a year of measured change, operational focus and building a platform for the future growth of the group,? Carter said in a statement.
Its pretax profit in 2013 was GBP115.7 billion, up from GBP70.4 billion in 2012, as revenues increased to GBP1.13 billion, from GBP1.11 billion. However, it swung to a net loss of GBP6.4 million, compared with a net profit of GBP90.7 million in 2012, due to losses from discontinued businesses.
The company disposed of five corporate training businesses, its European conferences businesses in Spain and Italy, and some other small businesses during the year. As a result the company posted a total loss on disposal of GBP102.7 million.
Impairment charges and restructuring costs also weighed on profits. It posted an impairment charge of GBP17.1 million for certain intangible software assets, and a GBP8.3 million impairment in relation to its Robbins Gioia loan. It also booked restructuring and reorganisation costs of GBP14.2 million relating to redundancy and reorganisation programmes within its IBI and European Conferences Businesses.
Informa also warned of a currency hit from the recent rise in the value of sterling. It is sensitive to currency movements as about 45% of its revenues and 35% of its costs are incurred in US dollars, and 9% of revenues and costs are incurred in euros.
The company said that every 1 cent movement in the US dollar to sterling exchange rate has an impact of about GBP3.2 million on revenue, and an impact of about 0.19 pence on adjusted earnings per share. Every 1 cent movement in the euro to sterling exchange rate has a GBP900,000 impact on revenue and a 0.05 pence impact on adjusted earnings per share.
Operationally, revenues at Informa's Academic Publishing segment rose to GBP367.1 million in 2013, from GBP340.3 million a year earlier, boosted by a strong fourth quarter performance and new product launches. Informa said it had seen an acceleration in the shift from print to digital during the year, with electronic books making up 20% of book revenue, up from 16% in the previous year.
In its Business Intelligence division revenue declined to GBP350.6 million, from GBP356.6 million, partly due to the transfer of its medical books unit to Academic Publishing and product pruning during 2012, as well as weaker renewals of subscriptions and lower-than-expected revenue from consulting and one-off reports. Additionally, cost cutting by pharmaceutical sector customers meant subscription negotiations were proving protracted.
In the company's Global Events business revenue rose to GBP414.7 million from GBP413.7 million, driven by strong performances from higher-margin large events, including 'Arab Health', 'Middle East Electricity', 'Cityscape Global' and the 'Anti-Aging Medicine World Congress'.
Liberum maintained its 'Sell' rating for Informa, noting that the results were "ok, but underwhelming and the lack of commitment to sell and further assets will be seen as disappointing."
The brokerage said that Carter sounded as though he is committed to keeping Informa's current structure, which will lessen hopes of further asset sales.
Informa's dividend came in slightly below expectations at 18.9 pence - analyst consensus had expected 19.1 pence - which Liberum said might suggest Informa is reserving cash for restructuring.
Numis said that Informa's results had showed "no major surprises", with revenue and earnings per share meeting its expectations. Numis said that importantly there had been "no suggestion of a step up in investment which many feared." Numis does not expect to make any changes to its adjusted earnings per share forecast of 40.6 pence in 2014.
Shares in Informa were trading up 1.3% at 528.50 pence Friday morning.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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