The business-to-business (B2B) print market had a tough 2016 following a decline in reader demand and advertising revenue. By contrast, B2B events management is an industry in its prime. Thus, UBM's (UBM) now-completed sale of PR Newswire and subsequent initiation of the 'Events First' strategy, has proved very wise.
Events now make up 82 per cent of overall revenue and sales in this division increased 13 per cent in the year to December 2016. This was largely thanks to the flurry of recent bolt-on acquisitions, while underlying events revenue ticked up just 1 per cent. Excluding biennial events, margins in the division expanded slightly, helping send adjusted operating profits there up 13 per cent as well.
However, underlying revenue from 'other marketing services' (OMS) fell 5 per cent to £151m. As this segment was largely made up of two businesses sold during the year, OMS revenue is likely to be negligible in 2017. But the shortfall could well be made up for by events company Allworld, which UBM acquired for $485m (£389m) in December. Its revenue was $97.2m for the year to June 2016, with the newly acquired group recording a compound annual growth rate of 7 per cent over the past 10 years.
Broker Numis expects earnings per share for the year to December 2017 of 47.7p (up from 39.7p in FY2016).
UBM (UBM) | ||||
|---|---|---|---|---|
| ORD PRICE: | 760p | MARKET VALUE: | £2.99bn | |
| TOUCH: | 760-760.5p | 12-MONTH HIGH: | 778p | LOW: 532p |
| DIVIDEND YIELD: | 2.9% | PE RATIO: | 37 | |
| NET ASSET VALUE: | 302p* | NET DEBT | 49% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 769 | 122 | 43.3 | 26.7 |
| 2013 | 794 | 110 | 28.3 | 21.1 |
| 2014^ | 551 | 102 | 33.8 | 21.3 |
| 2015 | 770 | 120 | 18.3 | 21.6 |
| 2016** | 863 | 120 | 20.3 | 22.0 |
| % change | +12 | - | +11 | +2 |
Ex-div: 27 Apr Payment: 25 May *Includes intangible assets of £2.2bn, or 559p a share **Excludes special dividend of 55.3p Earnings and dividend per share adjusted to reflect rights issue in December 2014 | ||||
