Technology investments, product launches and a focus on faster-growing markets and territories fuelled robust growth at RELX (REL) in the first half of 2016. The group, which puts on industry events and provides specialist information and analytical tools to lawyers, insurers and other professionals, posted higher underlying sales and profits across its four divisions. The upshot was a 6 per cent rise in adjusted operating profits to just over £1bn.
The rebranded Reed Elsevier's scientific segment benefited from rising usage of its information databases and tools, as well as more article submissions. The risk and business analytics division cashed in on strong demand for new insurance workflow products and mounting interest among financial services and corporate customers for identity verification and fraud detection solutions.
Cost-cutting and greater efficiency lifted adjusted operating profits by 12 per cent in the legal business, despite subdued spending in the US and Europe. And the exhibitions arm rose on brisk traffic in China and Japan and better trading in Europe, offset by economic weakness in Brazil.
Underlying operating cash flow swelled by 16 per cent to £892m, giving management the leeway to make six small acquisitions and spend £502m on buying back shares. Broker Numis bumped up its forecasts and now expects pre-tax profits of £1.90bn for the full year, giving EPS of 70p a share, up from £1.65bn and 60.5p in 2015.
| RELX (REL) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,455p | MARKET VALUE: | £32.4bn | |
| TOUCH: | 1,454-1,455p | 12-MONTH HIGH: | 1,459p | LOW: 989p |
| DIVIDEND YIELD: | 2.2% | PE RATIO: | 28 | |
| NET ASSET VALUE: | 89p* | NET DEBT: | £4.57bn | |
| Half-year to 30 Jun | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 2.96 | 601 | 21.0 | 7.40 |
| 2016 | 3.26 | 733 | 26.9 | 10.25 |
| % change | +10 | +22 | +28 | +39 |
Ex-div: 4 Aug Payment: 26 Aug *Includes intangible assets of £9.19bn, or 413p a share †Turnover and pre-tax profit are for the combined Anglo-Dutch entity, while earnings and dividend per share are for RELX plc | ||||
