Painful memories of the financial crisis - together with higher compliance costs and regulatory scrutiny in its aftermath - have driven banks and asset managers to retrench and downsize. That includes spending less on the information and events offered by Euromoney Institutional Investor (ERM), owner of trade rags like Absolute Return and Metal Bulletin.
The banking market is "still a bit of a mess", says finance director Colin Jones, and the metals and commodities markets are now struggling, too. Even so, Euromoney's sales - adjusted for acquisitions and currency movements - rose 3 per cent last half as it shifted towards selling more digital and subscription-based products and organising larger 'must-attend' events. Subscription sales rose 3 per cent to £103m, while hosting new financial events boosted its event sponsorship sales by 15 per cent.
But Euromoney's operating profits fell 4 per cent and its adjusted operating margin shrank slightly, reflecting digital investments. Those included Delphi, a common content platform used to organise, tailor and charge for content across multiple devices. Euromoney also spent £12.5m on trade title Infrastructure Journal, which drove an increase in net debt to a still modest £29m.
Broker Investec, which has a target price of 1,500p, expects full-year pre-tax profits of £118m and EPS of 70.5p.
| EUROMONEY INSTITUTIONAL INVESTOR (ERM) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,130p | MARKET VALUE: | £1.5bn | |
| TOUCH: | 1,128-1,130p | 12-MONTH HIGH: | 1,388p | LOW: 915p |
| DIVIDEND YIELD: | 2.0% | PE RATIO: | 20 | |
| NET ASSET VALUE: | 246p* | NET DEBT: | 9% | |
| Half-year to Mar 31 | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 187 | 42.7 | 25.9 | 7 |
| 2014 | 196 | 42.8 | 25.2 | 7 |
| % change | +5 | - | -3 | - |
Ex-div: 21 May Payment: 19 Jun *Includes intangible assets of £500m, or 390p a share | ||||
