Faced with rising compliance costs and the threat of regulatory fines, investment bankers have cut back on organising seminars and advertising in magazines. Together with sliding commodity prices and a downturn in emerging markets, this trend battered Euromoney Institutional Investor (ERM) in the year to 30 September, driving the financial information and events group's adjusted operating profit down 13 per cent to £104m.
Underlying revenue was flat or worse in all four of Euromoney's businesses. Advertising sales fell 11 per cent as banks snubbed the group's eponymous financial titles, while events revenue slumped 9 per cent in the second half as energy markets weakened and developing nations battled geopolitical and currency issues. The decline in lucrative delegate and advertising revenue - along with the costs of rolling out content platform Delphi and the purchase of stakes in three financial technology businesses - meant the group's adjusted operating margin narrowed by 4 percentage points to 26 per cent.
On the bright side, Euromoney ended the year with net cash for the first time in 18 years. New boss Andrew Rashbass is reviewing the group's strategy and should reveal his plans in the new year.
Broker Numis cut its forecasts and now expects adjusted EPS of 65.0p this financial year (70.1p in FY2015).
| EUROMONEY INSTITUTIONAL INVESTOR (ERM) | ||||
|---|---|---|---|---|
| ORD PRICE: | 968p | MARKET VALUE: | £1.2bn | |
| TOUCH: | 963-968p | 12-MONTH HIGH: | 1,281p | LOW: 922p |
| DIVIDEND YIELD: | 2.4% | PE RATIO: | 12 | |
| NET ASSET VALUE: | 342p* | NET CASH: | £17.7m† | |
| Year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 363 | 68 | 38.0 | 18.8 |
| 2012 | 394 | 92 | 56.7 | 21.8 |
| 2013 | 405 | 95 | 57.9 | 22.8 |
| 2014 | 407 | 101 | 59.5 | 23.0 |
| 2015 | 403 | 123 | 83.4 | 23.4 |
| % change | -1 | +21 | +40 | +2 |
Ex-div: 26 Nov Payment: 11 Feb *Includes intangible assets of £531m, or 414p a share †Includes £9.8m in cash deposited with parent company | ||||
