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Informa returns to growth

The events and publishing group is eyeing up new opportunities after selling its intelligence arm
March 9, 2023
  • More share buybacks
  • $940mn events acquisition

The pandemic wreaked havoc on Informa. However, after multiple lockdowns, a £1.1bn loss, and the suspension of dividends, Informa (INF) is finally back in business – and taking a new approach. Last year, the events and publishing company sold off its Intelligence division for £2.5bn, and is now in the pleasant position of deciding what to do with the windfall. 

Shareholders are in line for a few treats. The group has upped its share buyback scheme from £725mn to £1bn, of which £589mn has already been paid. Management is also predicting double digit dividend growth in 2023. 

More important, however, is the long-term strategic direction of the group. Events are now a priority, and Informa has acquired B2B events group Tarsus for a whopping $940mn (791mn). This is a gamble but seems to make sense, given that trade shows and exhibitions are in the process of recovering. 

Informa Markets, for example – which runs live and online events – saw underlying revenue rebound by 47 per cent in 2022, and the group turned an adjusted operating profit of £172mn. (Intangible asset amortisation meant the division still reported a small statutory loss). 

Management also wants to grow and diversify the high-margin publishing business, Taylor & Francis, which grew underlying revenue by 3 per cent in 2022. However, Informa Tech, which provides market research for the tech sector, looks more promising from a growth perspective, with revenue expected to exceed $500mn in 2023. 

It’s clearly an important time for Informa, and management is trying to tap into growing markets. Moreover, following last year’s divestments, the company’s balance sheet is very strong. It is still early days, though, and we would like to see more of what Informa has planned before getting off the fence – particularly given that it's trading on a forward PE of 18.5. Hold. 

Last IC View: Hold, 590p, 4 Aug 2022

INFORMA (INF)    
ORD PRICE:699.6pMARKET VALUE:£9.9bn
TOUCH:699.4-699.8p12-MONTH HIGH:797pLOW: 499p
DIVIDEND YIELD:1.4%PE RATIO:74
NET ASSET VALUE:507p*NET DEBT:1.0%
Year to 31 DecTurnover (£bn)Pre-tax profit (£mn)Earnings per share (p)Dividend per share (p)
20182.3728019.721.9
20192.8932017.87.5
20201.66-1141-73.4nil
20211.5878.42.30nil
20222.261699.509.80
% change+43+115+313-
Ex-div:01 Jun   
Payment:14 Jul   
*Includes intangible assets of £8.9bn, or 628p per share