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Routledge owner Informa faces short-term challenges

The information and events group showed signs of improvement in the first half of the year
August 1, 2016

A depressed resources sector, waning demand for physical books and economic uncertainty took their toll on Informa (INF) in the first half. The information and events giant benefited from technology investments, restructuring and a clearer focus, but underlying operating profits still fell 1 per cent to £202m.

IC TIP: Hold at 725p

Overseas expansion, increased scale and the allure of brands such as Arab Health and China Beauty drove organic sales and adjusted operating profits up more than a tenth in the exhibitions business. But profits fell in the academic publishing arm - home to Taylor & Francis and Routledge - as pressure on book budgets and a second-half bias in customer spending outweighed shrewd investments and a simpler operating structure.

And both underlying sales and profits fell in the business intelligence and knowledge & networking divisions. The former is still shifting its focus towards winning and retaining big clients, while the latter suffered due to depressed energy markets and the movement of key conferences such as Fund Forum Africa into the second half.

Informa continued to prune its portfolio. It acquired Finovate, a financial technology content and events group, and disposed of its Adam Smith conference business. Management also plans to invest up to £50m in 2016, as it prepares to roll out more than 35 upgraded products over the next 18 months.

Broker N+1 Singer expects pre-tax profits of £359m for the full year, giving EPS of 45.3p, up from £340m and 42.9p in 2015.

INFORMA (INF)
ORD PRICE:725pMARKET VALUE:£4.7bn
TOUCH:725-725.5p12-MONTH HIGH:762pLOW: 534p
DIVIDEND YIELD:2.8%PE RATIO:29
NET ASSET VALUE:206p*NET DEBT:79%

Half-year to 30 JunTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
201561911915.06.55
20166489913.86.80
% change+5-17-8+4

Ex-div: 11 Aug

Payment: 9 Sep

*Includes intangible assets of £2.88bn, or 444p a share