Buying back shares from its largest investor, DMGT (DMGT), has given Euromoney Institutional Investor (ERM) far more freedom to control its own strategy. To that end, the publishing group is in full M&A mode – within the last six months, it disposed of three businesses, plus its minority stake in Dealogic and acquired two new titles. The £86.8m of disposals have bulked up the balance sheet, giving Euromoney great scope to make further acquisitions.
Outside of the corporate restructuring, Euromoney’s recovery seems to be in full swing. In the six months to March 2018, strength in the events business offset dwindling demand for advertising, while subscriptions (which contributes over half the revenue) continued its slow increase.
For investors, it’s worth noting that the 16 per cent interim dividend hike is not going to be a regular occurrence, but comes as a side effect of the new dividend policy announced last year. Management was also cautious about growth in the events business – as prior year comparatives become tougher it’s going to be hard to maintain double digit growth there.
Broker Numis expects pre-tax profits of £102m in the 2018 financial year, giving EPS of 75.7p (2018: £107m and 76.4p).
| EUROMONEY INSTITUTIONAL INVESTOR (ERM) | ||||
| ORD PRICE: | 1,272p | MARKET VALUE: | £ 1.39bn | |
| TOUCH: | 1272-1280p | 12-MONTH HIGH / LOW: | 1358p | 1025p |
| DIVIDEND YIELD: | 2.5% | PE RATIO: | 10 | |
| NET ASSET VALUE: | 339p* | NET DEBT: | 10% | |
| Half-year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017 | 182 | 9.3 | 6.7 | 8.8 |
| 2018 | 189 | 121 | 99.0 | 10.2 |
| % change | +4 | +1199 | +1388 | +16 |
| Ex-div: | 24 May | |||
| Payment: | 21 Jun | |||
| *Includes intangible assets of £388m, or 356p a share | ||||
