Informa events strength offsets business intelligence weakening

A solid third-quarter from business media group Informa has kept it on track to hit full year results, with its events business strength counterbalancing weaker business intelligence performance.

Business intelligence was weaker than forecast, with organic revenue declining 7.1% over the last nine months, worsening from the 6.6% fall in the first half of the year.

Overall group trading was kept on track thanks to strong growth from the global events business, where organic growth of 7.9% over the first nine months of the year, underpinned by further positive momentum in exhibitions, and accelerating from the 7% growth in the first half.

Academic publishing was "robust" and in line with expectations, with organic sales up 3.9% in nine months, slightly ahead of the 3.8% growth in the first six months. The bankruptcy of subscription agent Swets is disruptive to this market, supplying 6.7% of sales last year, but Informa has quickly switched to other agents.

"Informa is performing to plan following nine months of consistent trading from our balanced mix of businesses and strong returns from our targeted acquisition strategy," said chief executive officer Stephen Carter.

He said the new programme of "Measured Change" across the group has delivered increased operational focus in business intelligence, which, together with robust performances from the other two divisions, "should enable us to meet our full-year earnings expectations".

Further forward, management intend to speed the pace of growth under a "growth acceleration plan" announced in July.

"Despite the current macro-economic and geopolitical uncertainty in the wider business environment, this is expected to deliver growth across all our divisions over time and generate valuable returns for shareholders," Carter said.

Broker Numis said the solid result firmly underpinned its full year estimates, with recent currency moves "providing a little buffer" if current sterling-dollar levels are retained until the end of the year.

"All in, no major surprises in this statement, we do not expect to change forecasts at this stage, recent currency moves provide a little buffer to current estimates that feel well underpinned with this in line the third quarter."

Investec was a little more cautious, despite plenty of implied upside to its target price, due to execution risk under a relatively untested new chief, some strategic work still to do and a lack of new positive catalysts in the sector.

Analysts noted some clouds above the events division, with European conferences still weak, no mention of Africa conferences in light of Ebola, and a tough fourth quarter ahead as no big events are due to run now.