Euromoney Institutional Investor (ERM) is making progress on its strategy to kick-start growth - but it is slow. Management is concentrating investment in the asset management and telecoms sectors, as well as in areas where it can provide hard-to-find price data to help traders. There was a 1 per cent pick-up in underlying sales during the second quarter, with all income sources growing except advertising. After stripping out the effect of the strong dollar, revenue fell 2 per cent during the six months to March.
Advertising revenue continued to decline across all areas of the group, down 14 per cent in total to £16.2m. Looking at topic rather than channel, banking and finance-related income suffered the heaviest decline at 11 per cent, while commodity events also suffered. Some of this was due to management's decision to consolidate some events and cut lower-margin ones, and less profitable training courses. Finance director Colin Jones said out that the commodity and banking cycles show signs of turning up.
Subscription and content revenue was up 1 per cent thanks to an increase in contribution from asset management and pricing, data and market intelligence. After parent DMGT (DMGT) reduced its stake to 49 per cent, management used the new freedom to increase the dividend payout ratio to 40 per cent of adjusted earnings, from 33 per cent.
Analysts at Peel Hunt expect adjusted pre-tax profits of £98.8m during the 12 months to September 2017, giving EPS of 71.2p (from £102.5m and 66.5p in 2016).
EUROMONEY INSTITUTIONAL INVESTOR (ERM) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,175p | MARKET VALUE: | £1.28bn | |
| TOUCH: | 1,170-1,183p | 12-MONTH HIGH: | 1,240p | LOW: 799p |
| DIVIDEND YIELD: | 2.1% | PE RATIO: | 53 | |
| NET ASSET VALUE: | 265p* | NET DEBT: | 28% | |
| Half-year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2016 | 194 | 23.4 | 13.5 | 7.0 |
| 2017 | 203 | 15.6 | 11.4 | 8.8 |
| % change | +5 | -33 | -16 | +26 |
Ex-div: 25 May Payment: 22 Jun *Includes intangible assets of £530m, or 486p a share | ||||
