Euromoney Institutional InvestorPLC Trading update (5465D)

TIDMERM

RNS Number : 5465D

Euromoney Institutional InvestorPLC

01 February 2018

EUROMONEY INSTITUTIONAL INVESTOR PLC

TRADING UPDATE

FOR THE PERIOD TO DECEMBER 31, 2017

Euromoney Institutional Investor PLC ("Euromoney"), the international business information and events Group, today issues a trading update for the period from October 1 to December 31, 2017, in advance of its Annual General Meeting to be held at 9.30am on February 1.

Trading

Since reporting its FY17 results on November 22, trading has continued in line with the board's expectations as set out in the Preliminary Statement. Total(1) revenues for the quarter to December 31 increased by 6% to GBP100.8m, with the benefit from the acquisitions of RISI and Layer123 in the second half of FY17 more than offsetting the drag from unfavourable exchange rates. Underlying(2) revenues increased by 3%, with a strong performance from the event businesses and a gradual improvement in the subscriptions growth rate.

The following table shows the year-on-year revenue growth rates for the first quarter on a total(1) and underlying(2) basis.

 
                                                  Q1 FY18 vs Q1 FY17 
------------------------  --------  --------  ------------------------- 
                           Q1 FY18   Q1 FY17   Total(1)   Underlying(2) 
                             GBPm      GBPm     Change        change 
------------------------  --------  --------  ---------  -------------- 
 Subscriptions/content      65.6      62.4        5%           2% 
------------------------  --------  --------  ---------  -------------- 
 Advertising                 8.5       8.9       (4%)         (5%) 
------------------------  --------  --------  ---------  -------------- 
 Sponsorship                11.8       9.1       30%           15% 
------------------------  --------  --------  ---------  -------------- 
 Delegates                  14.1      12.8        9%           5% 
------------------------  --------  --------  ---------  -------------- 
 Other                       0.5       0.4       12%          (18%) 
------------------------  --------  --------  ---------  -------------- 
 Sold/closed businesses      0.8       5.4        -             - 
------------------------  --------  --------  ---------  -------------- 
 FX losses on forward 
  contracts                 (0.5)     (3.8)       -             - 
------------------------  ========  ========  =========  ============== 
 Total(1) revenues          100.8     95.2        6%           3% 
------------------------  --------  --------  ---------  -------------- 
 

Underlying(2) subscriptions and content revenues increased by 2%, an improvement on the FY17 exit rate of 1%. The divergence in subscription growth rates between the Pricing, Data & Market Intelligence and Asset Management segments, highlighted in last year's results, has continued. The growth rate for Pricing improved to 10%, against an exit rate of 8%, and is now outpacing the MiFID II-related drag from Asset Management subscriptions, which have continued to decline by 6%. The rate of decline in underlying(2) advertising revenues in the quarter was consistent with the long-term trend.

Although the first quarter is the one of least activity for the events businesses, underlying(2) event revenues (sponsorship and delegates combined) increased by 9%. This reflects further success in the strategic focus on building large, high margin events, particularly in the telecoms sector; new Banking & Finance events in Asia; and stronger commodity markets. The outlook for events in the second quarter, particularly Mining Indaba, the Group's largest event, is also positive.

Impact of Currency

The Group generates approximately two-thirds of its revenues and approximately 80% of its operating profits in US dollars. The currency tailwinds experienced throughout FY17 have turned into headwinds as Sterling has strengthened significantly against the US Dollar since the start of the financial year. For the quarter to December 31, the average Sterling-US Dollar rate was $1.34 (Q1 FY17: $1.25), and the rate has continued to rise in January, recently passing its pre-Brexit level of $1.40. The average rate for the rest of FY17 was $1.27, and each one cent movement in the Sterling-US Dollar rate has a translation impact on FY18 profits of approximately GBP0.7m on an annualised basis.

M&A Activity

The Group continues to actively manage its portfolio and to allocate and recycle capital efficiently. During the quarter we completed one small bolt-on acquisition in the telecoms sector (TowerXchange), and disposed of three businesses: Adhesion, World Bulk Wine Exhibition and, since the quarter end, the Institutional Investor Journals business. In December we also completed the disposal of our 15% equity interest in Dealogic, at an attractive valuation of $135m, which frees up significant capital to invest in our big themes.

Subject to any further M&A activity during the year, the net impact of these transactions will be a reduction in Adjusted PBT of approximately GBP4.0m compared to FY17.

The Group's proposed disposal of its Global Market Intelligence Division (CEIC and EMIS), reported as a discontinued operation in last year's Preliminary Statement, remains on track and in line with the board's expectations.

Financial Position

Net debt at December 31, 2017 was GBP49.0m, a decrease of GBP105.6m since the year-end. This largely reflects the impact of M&A activity in the quarter, including the disposal of the minority equity stake in Dealogic, the sale of Adhesion and World Bulk Wine Exhibition, the acquisition of TowerXchange, and the purchase of the remaining 15% minority interest in NDR. The Group continues to generate strong operating cash flows and an adjusted cash conversion rate in excess of 100%.

Tax

The recently announced US tax reform, including significantly lower US corporate tax rates, may provide long-term benefits for the Group, but is not expected to have a material impact on the adjusted earnings for the financial year to September 30, 2018.

AGM/Next Update

The company is holding its AGM at 9:30am on February 1. No further comment on trading will be made at this meeting.

The results for the six months to March 31, 2018 will be announced on May 17.

1 Total revenues include revenues from the Group's continuing and discontinued operations.

2 Underlying revenues include revenues from the Group's continuing and discontinued operations stated at constant exchange rates, including pro-forma comparatives for acquisitions, and excluding disposals and significant event timing differences.

January 31, 2018

END

For further information, please contact:

Euromoney Institutional Investor PLC

   Colin Jones, Finance Director:              [phone]; [e-mail] 

FTI Consulting

   Charles Palmer/Emma Hall:                 [phone]; [e-mail] 

NOTE TO EDITORS

Euromoney Institutional Investor PLC (www.euromoneyplc.com) is listed on the London Stock Exchange and is a member of the FTSE 250 share index. It is an international business-information Group covering asset management, price discovery, data & market intelligence, and banking & finance under brands including Euromoney, Institutional Investor, BCA Research, Ned Davis Research and Metal Bulletin. The Group also runs an extensive portfolio of events for the telecoms, financial and commodities markets.

This information is provided by RNS

The company news service from the London Stock Exchange

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