Euromoney confirms first-half revenues climb with profits flat or higher
- Profits expected to be flat at worst
- Revenues up five per cent
- Sterling strength beginning to weigh on profits
First-half profits are expected to be at least flat and revenues ahead year-on-year at business publisher Euromoney despite challenging conditions.
Since the FTSE 250 company's January statement it said trading conditions have remained challenging, "particularly in the banking sector where the pressure from increasing regulation and demands for tougher capital ratios, combined with further litigation and financial penalties, have caused global financial institutions to continue to maintain tight control over their costs".
Yet it said total revenues for the six months to March 31st were expected to show a headline increase of approximately 5% on 2013, and underlying growth excluding acquisitions of approximately 2%.
Euromoney adjusted pre-tax profit of "not less than £52m", versus £52.4m in the comparative period.
The first half adjusted operating margin is expected to be around two percentage points lower year-on-year due to the group's continued investment in digital publishing including the new Delphi content platform which went live during the period.
Underlying trends reported in the first quarter have largely continued into the second quarter for subscriptions and advertising revenues, while underlying event revenues increased by approximately 15% in the second quarter due to a combination of new events and favourable timing of biennial events.
The first half underlying revenue trends at constant currency are approximately two percentage points stronger.
The recent strength of sterling against the US dollar started to have an impact on the translation of overseas profits in the second quarter and is expected to have a more significant impact in the second half of the year, which the company has calculated will hit annual profits by £0.6m.
Broker Numis said the statement was "solid" and required no material changes to forecasts that it was predicting around £53m, and on past experience would expect a performance broadly in line with that.
Operating margins being around 2% lower than the prior year on the back of ongoing investment in digital publishing is "a little light to our estimate" said analysts but investment priorities had been well flagged.
Shares in ERM were up 0.4% to 1,273p at 09:10 on Wednesday.