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Informa results reviewed positively

Another day, another results presentation. I aim to cover as many of these as I can on this blog and then post a review of overall sentiment sometime towards the end of this month.

Today it was the turn of Informa – who bill themselves as ‘global business information specialists‘. It’s an interesting group having grown following a merger of Lloyd’s List Publishing and IBC Conferences. Since then the company has been very acquisitive with Taylor & Francis, IIR and Datamonitor joining the stable alongside various smaller acquisitions.

Informa has scale:-

  • £1.2bn of revenues
  • an operating profit of £146m
  • 8,500 employees
  • 2,500 individual products spanning academic, professional and commercial markets
  • offices around the world
  • and they host around 8,000 conferences and training courses annually

as such Informa is a good barometer for the business media industry. So what do their results tell us?

On the surface their results seem fairly similar to all the media companies that have released results recently – tough markets, falling revenues, extensive cost savings, growing business in emerging economies, well positioned for the recovery etc… but it is only when you dig a little deeper (and listen to the company webcast) that you get the full flavour for what is going on.

Informa is a company with a good spread of activities and should have been better prepared than most as we entered the downturn. The thorn in their side has been that (along with many of the larger business media companies) it took on a lot of debt at an inopportune time – in their case for the acquisition of Datamonitor at the relative peak of the market. As such, there have been concerns over the past 18 months about covenant headroom and this has clearly placed pressure on the business.

That pressure now seems to have been relieved. Debt has been reduced by nearly £470m in the year and Adam Walker – the CFO – joked that it was lovely not to be talking about covenants this year.

On the business side Peter Rigby – CEO – stated that he felt the business was now ‘bumbling along the bottom’ in revenue terms. Informa had taken a lot of costs out of the group to protect margins in the downturn. They had cut around 2,500 of their smaller events and training courses and that had also led to significant head-count reductions. The remaining events portfolio had held up reasonably well, largely due to the performance of their largest conferences and exhibitions.

Peter pointed out that Informa’s top 200 events generate 28% of their events revenue but contribute 55% of the profits. As a result of cutting out the smaller events and associated variable costs the margins of their events business had been kept at 15% for the year. This was the cyclical area of Informa’s business that can change very rapidly when business confidence returns and corporate training / event attendance budgets are released.

Other highlights of the presentation were:

  • A star performance from the academic information side of the business – driven by a lot of new journal launches, better inventory management of their book stocks and an increasing use of ‘print on demand’ services.
  • Strong renewal rates on subscription information products – which are increasingly served online and delivered on a site licence basis
  • The investment in core products like Lloyd’s List – which had seen profits rise by 400% year-on-year and had launched a new Lloyd’s List Intelligence Service
  • The further integration of Datamonitor – taking advantage of the Informa global network of offices and a reduction in the cost base
  • Currency benefits from having US$ revenues significantly ahead of US$ costs

All in all a good set of results, delivered with confidence by the management team. Informa has a nice mix of businesses that give it both the stability of a strong subscription base and the ability, through their events portfolio, to rapidly take advantage of an upturn to grow profits.


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