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Making the most of unseen events

With hindsight, it was unfortunate that Informa (INF) acquired UBM plc in mid-2018. UBM was a British-based multinational that since 2014 had been transforming itself into a business-to-business events company, and the £4bn purchase left Informa with a net debt of £2.7bn. That meant that Informa went into the pandemic as a £10bn company relying for two-thirds of its revenues on in-person trade shows, such as the Fort Lauderdale International Boat Show, which claims to attract 100,000 visitors.

In April 2020, chief executive Stephen Carter acknowledged that the impact of Covid-19, meaning the company’s focus would be on preserving cash. To reduce debt, he announced a surprisingly large emergency £1bn rights issue, which increased the number of shares in issue by a fifth. The dividend was axed, and a cost-cutting drive began, which included reducing his own salary and that of the finance director by a third during lockdowns.

By June 2020, Informa had lost £1bn in sales from cancelled events. By the end of the year, the pre-tax loss plunged to £1.1bn. Stephen Davidson, who chaired the remuneration committee, thought that “stability and security” had been established, but there was a pay problem. Informa’s two subscription-led businesses in academic publishing and information services had hardly been affected by the pandemic and they were performing well. The pay there was in line with previous years. But in the three event-led businesses, while “the leadership team worked harder and contributed more than ever in 2020”, their pay was going to be substantially less. Internally, this felt unfair, and unless changes were made, hanging on to key people in these businesses was going to become tricky. Something had to be done.

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