- Digital commerce arm to list in New York
- Profit guidance upgraded
Information and events group Ascential (ASCL) is to hive off its digital commerce operation and list it in New York, in a blow to the London market.
The mutlifaceted FTSE 250 company said its digital commerce arm - which generated over 40 per cent of group revenue in 2021 - would find it easier to attract and retain talent in the US, and would have access to greater pools of capital.
The company might also be hoping for a higher valuation across the Atlantic, following a share slump in 2022. Management said it could achieve a US listing by conducting a public offering of shares and/or a spin-off distributing shares on a pro rata basis to shareholders. Reports first emerged of the New York plan in April last year, when the company only confirmed a review was taking place.
The board also intends to sell Ascential’s trend forecasting business WGSN (representing 20 per cent of total revenue) and return a “significant proportion” of the sales proceeds to shareholders. If the plans are approved by shareholders, the UK-listed group would be left to focus exclusively on events like its Cannes Lions advertising conference. The strategy echoes that of FTSE 100 company Informa (INF), which has recently sold off its intelligence arm and plans to return cash to shareholders and invest in events technology.
Ascential chief executive Duncan Painter said the outlook for 2023 “remains unclear” but the group’s events businesses “have demonstrated extremely high levels of customer engagement in 2022, reinforcing their industry leadership and which has translated into strong levels of rebooking for 2023”. He said the company breakup would "create the best structure for each distinct business to thrive". Under the plan, Painter would take on the New York-listed business and events boss Rita Clifton would run the Plc company.
According to a trading update, all of Ascential’s divisions saw double digit sales growth in the year to 31 December 2022. As a result, revenue is expected to be at least £520m, ahead of the £494mn predicted by analysts. Meanwhile, adjusted Ebitda is expected to be at least £118mn, compared with consensus estimates of £109mn.
Shares rose by a fifth in response to the news, although the company is still down 27 per cent on 12 months ago.
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