Ascential boosted by return of big events

In January, Ascential (ASCL) announced plans to split itself into three. Its digital commerce operation would look to list in New York; its fashion forecasting business WGSN would be sold; and the events arm would remain on the London Stock Exchange. 

Eight months down the line, however, and nothing much has materialised. Management said separation plans have “progressed well” and plans to update the market again by the end of the year, but – for now – it makes sense to keep looking at the company in its entirety. 

It is a mixed picture. Events have rebounded strongly, fuelling an 18 per cent rise in group revenue to £307mn and a 17 per cent increase in adjusted Ebitda to £78.6mn. From a statutory perspective, however, the group looks far less buoyant: it banked an operating profit of just £0.7mn in the period, and a loss before tax of £11.8mn. “Non-trading items” had a lot to answer for, including a strategic review that cost £23mn. 

Ascential’s digital commerce operation, which is seeking a higher valuation across the Atlantic, remains the big concern. In the first half of 2023 it only broke even (on an adjusted basis), and this included £3.3mn of losses from businesses newly acquired in 2022. The division was also hit by an £11.7mn impairment. 

Management claims that the division’s margins will be weighted towards the second half of the year, but digital commerce has been causing problems for a long time and the promise of jam tomorrow is starting to wear thin. Hold. 

Last IC View: Hold, 243p, 30 Mar 2023