Euromoney Institutional Investor (ERM) saw operating profit fall by over a tenth as the company grappled with headwinds in its asset management segment, while coronavirus hurt its events division.
But the information business has decided to retain its asset management segment, which consists of Institutional Investor, BCA Research and NDR, following a review in April. Euromoney said that it is pursuing a strategy aimed at returning the division to growth, based on continued investment in sales and marketing, increased cross-selling, closer alignment of the businesses, and new product development opportunities. Indeed management has outlined targets for revenue growth by its 2023 financial year.
Operating profit in its pricing business nudged up 1 per cent, as subscription revenue, which accounts for over 80 per cent of the division’s total, grew 8 per cent on an underlying basis. Performance however was affected by coronavirus, as new sales and renewals from Asia focused clients fell.
Net cash fell by more than 80 per cent since FY2019 due to a £24m outflow for the acquisition of Wealth-X and AgriCensus, as well as dividend payments of £24m. The company has not declared a half-year dividend, which it believes will save around £12m in cash.
Broker Peel Hunt forecasts adjusted pre-tax profits of £43.7m and EPS of 32.2p for the 2020 year end, down from £104.6m and 77.6p in FY2019.
| EUROMONEY INSTITUTIONAL INVESTOR (ERM) | ||||
| ORD PRICE: | 886p | MARKET VALUE: | £ 968m | |
| TOUCH: | 750-934p | 12-MONTH HIGH: | 1,510p | LOW: 644p |
| DIVIDEND YIELD: | 2.5% | PE RATIO: | 38 | |
| NET ASSET VALUE: | 495p* | NET DEBT: | 12%** | |
| Half-year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2019 | 185 | 49.3 | 32.9 | 10.8 |
| 2020 | 186 | 37.4 | 37.5 | 0.0 |
| % change | +1 | -24 | +14 | - |
| Ex-div: | na | |||
| Payment: | na | |||
| *Includes intangible assets of £688m, or 630p a share. **Includes lease liabilities of £73.6m | ||||
