Informa's first-half performance was not as bad as the headline figures suggest and, after adding back impairment costs, amortisation and other exceptional items, operating profits were slightly ahead at £160m. The publishing and events group still faces some headwinds but, with a modest rating and underpinned by a decent dividend, the shares remain attractive.
Once again, the academics division - which publishes journals and electronic books - delivered a resilient performance, pushing adjusted operating profits up by 8.9 per cent to £51.2m on revenues up 6 per cent to £154m. Management hopes to build its presence in emerging markets, which currently account for just 13 per cent of the division's revenue. And, despite cost-cutting by some customers, operating profits from the professional and commercial information segment moved ahead 2.7 per cent to £54m even though sales were down almost 5 per cent in what remains a tough trading environment.
However, events and training, which account for nearly half of group turnover and a third of profits, faced a significant decline in delegate numbers and underlying operating profits fell 7.7 per cent to £54.9m. Moreover, with the eurozone crisis worsening, Informa sold off events businesses in Austria, Czech Republic and Hungary and part of the German operation, leading to an £80m impairment charge.
Broker Numis Securities is forecasting full-year adjusted pre-tax profits of £311m and EPS of 40.2p (from £296m and 37.8p in 2011).
| INFORMA (INF) | ||||
|---|---|---|---|---|
| ORD PRICE: | 350p | MARKET VALUE: | £2.11bn | |
| TOUCH: | 350-351p | 12-MONTH HIGH: | 454p | LOW: 311p |
| DIVIDEND YIELD: | 5.1% | PE RATIO: | na | |
| NET ASSET VALUE: | 207p* | NET DEBT: | 68% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 635 | 66.5 | 9.20 | 5.00 |
| 2012 | 620 | -27.4 | -7.00 | 6.00 |
| % change | -2 | - | - | +20 |
Ex-div: 15 Aug Payment: 12 Sep *Includes intangible assets of £2.6bn, or 431p a share | ||||
