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Ascential pivots to information services

The group has sold the bulk of its exhibitions business and invested in acquisitions
February 25, 2019

To see how much Ascential (ASCL) has changed over the past year, one need look no further than the operating segments. In last year’s full-year results, it was split into the events business – which brought in the bulk of revenues and profits – and information services. Following an extensive restructuring, the group has four main segments, each comprising different areas of information services. The group sold the bulk of its events business, though it still owns the Cannes Lions and Money20/20 conferences.

IC TIP: Hold at 374p

The group completed the sale of its exhibitions business in July for a cash consideration of £296m. The cash influx has had a massive effect on debt, which fell 60 per cent to £110m, as well as fuelling a slew of acquisitions. Management is looking for further acquisitions to expand its operations in China and enter new information services sectors.

The shift to lower-margin growth business has caused a drop in the adjusted cash profit margin to 29.2 per cent. Finance director Mandy Gradden said she expects margins to remain between 29-30 per cent in the next few years.

Analyst Numis is forecasting adjusted pre-tax profits of £95.8m in 2019, giving EPS of 17.9p (from £79.7m and 15.3p in 2018).

ASCENTIAL (ASCL)   
ORD PRICE:374pMARKET VALUE:£ 1.5bn
TOUCH:374.4-374.8p12-MONTH HIGH:469pLOW: 345p
DIVIDEND YIELD:1.6%PE RATIO:75
NET ASSET VALUE:136p*NET DEBT:20%
Year to 31 DecTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
2014313-5.40nana
2015257-43.6-32.4nil
2016300-1.803.904.70
2017 (restated)29319.92.905.60
201834928.95.005.80
% change+19+45+72+4
Ex-div:16 May   
Payment:14 Jun   
*Includes intangible assets of £786m, or 196p a share