Events now constitute “well over 85 per cent” of UBM’s (UBM) revenue, and chief executive Tim Cobbold notes that the first half is traditionally weaker because of the timing of events during the year. The group’s revenue rose substantially but its operating margin fell from 19 per cent to 16 per cent, partly as a consequence of exceptional items including the effects of acquiring and integrating the Allworld business. Nevertheless, Allworld gave a “small contribution” to events’ revenue, which rose 1.2 per cent on an underlying basis – a reasonable performance helped by good sales growth in Asia. Overall, management advises that UBM is well positioned to have a strong second half.
For Mr Cobbold, the 6 per cent top-line boost seen by China’s events business is attributable to the country's growing, increasingly affluent middle class. The performance of events across Asia, particularly in food, hospitality, leisure and pharma, helped to offset the decline in North America led by lower fashion revenue. Generally, events should see greater progress in the second half of each year and particularly in odd years, when ‘biennials’ occur.
Other Marketing Services (OMS) now comprises only 15 per cent of UBM’s revenue. The poor performance here resulted from a hiatus in US drug approvals, meaning “softer” advertising revenue (and thus weaker print revenue). However, management expects OMS’s operating margin to improve later in the year.
Numis forecasts pre-tax profit of £256.3m and EPS of 49.4p for FY2017, up from £208.5m and 39.7p in 2016.
| UBM (UBM) | ||||
| ORD PRICE: | 704p | MARKET VALUE: | £2.77bn | |
| TOUCH: | 704-705p | 12-MONTH HIGH: | 778p | LOW: 629p |
| DIVIDEND YIELD: | 3.1% | PE RATIO: | 31 | |
| NET ASSET VALUE: | 291p* | NET DEBT: | 46% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 | 380 | 51.8 | 8.1 | 5.40 |
| 2017 | 448 | 61.9 | 10.4 | 5.50 |
| % change | +18 | +19 | +28 | +2 |
| Ex-div: | 07 Sep | |||
| Payment: | 12 Oct | |||
| *Includes intangible assets of £2.1bn, or 538p a share | ||||
