A strong showing from the key events business and the takeover of peer Advanstar fuelled a 46 per cent rise in underlying operating profits at UBM (UBM) to £197m in 2015. But the real boon for investors could be a £245m special dividend - or about 55p a share - payable if US competition regulators approve the $841m (£555m) sale of PR Newswire.
UBM organises more than 400 events a year, including Black Hat, a major information security conference, and construction exhibition Ecobuild. Management has pruned the group's portfolio to favour large, more lucrative 'must attend' shows - it sold two shows, discontinued 47 others and spent nearly £40m on exhibitions in Brazil and China in the period. The upshot was a 5 per cent rise in underlying revenues from the group's 116 major annual events, while biennial exhibitions also outperformed. But similar refocusing on events-related offerings in the other marketing services segment proved less successful: underlying sales there fell 5 per cent.
The group's integration of Advanstar progressed ahead of plan: cost savings are tracking at $10m a year. Moreover, management plans to use the disposal proceeds not returned to shareholders to buttress the balance sheet and finance more bolt-on acquisitions. The downside is that broker Investec expects the deal to reduce EPS by around 19 per cent to roughly 33p in 2016.
| UBM (UBM) | ||||
|---|---|---|---|---|
| ORD PRICE: | 576p | MARKET VALUE: | £2.5bn | |
| TOUCH: | 575-576.5p | 12-MONTH HIGH: | 585p | LOW: 462p |
| DIVIDEND YIELD: | 3.8% | PE RATIO: | 31 | |
| NET ASSET VALUE: | 200p* | NET DEBT: | 53% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 972 | 102 | 25.4 | 26.3 |
| 2012 | 769 | 122 | 43.3 | 26.7 |
| 2013 | 794 | 110 | 28.3 | 21.1 |
| 2014 (restated)† | 551 | 102 | 33.8 | 21.3 |
| 2015 | 770 | 120 | 18.3 | 21.6 |
| % change | +40 | +18 | -46 | +1 |
Ex-div: 28 Apr Payment: 27 May *Includes intangible assets of £1.57bn, or 354p a share †Earnings and dividend per share adjusted to reflect rights issue in December 2014 | ||||
