Informa reaps benefits of UBM deal as full-year revenues surge

Shares in Informa spiked in morning trading, after the publishing and events specialist saw annual sales surge 35% following its £4bn acquisition of smaller rival UBM.

Full-year revenues came in at £3.4bn, ahead 3.7% on an underlying basis or 34.9% as reported, including six months of UBM. Reported operating profits were up 34.4% at £732.1m, while pre-tax profits rose 5.2% to £282.1m.

Informa, which publishes Lloyd’s List, academic papers through the Taylor & Francis brand and organises events such as the Monaco Yacht Show, paid £3.6bn to buy UBM in June, its biggest acquisition to date.

The company said its integration plans were ahead of schedule: “Programmes to create an effective and efficient operating model for the expanded Informa Group [are] progressing well, with the focus on minimising disruption and maximising the opportunities for incremental growth and returns.”

Net debt was £2.7bn, a 95% increase and slightly ahead of forecasts. Malcolm Morgan, analyst at Peel Hunt, said the market could balk at the figure, but conceded that the company was confident it could “deliver continuing underlying revenue growth, improving margins and strong cash flow”.

Informa said it was in “a good position to manage macro-economic cycles and the current volatility stemming from uncertainties such as Brexit, trade tensions between the US and China and wider global considerations.

“The quality of our revenue mix means we have resilience and visibility across the enlarged group, with more than half of exhibitor and around two thirds of subscription revenues for 2019 already booked.”

Fiona Orford-Williams, analyst at Edison Investment Research, said: “Informa looks to moving apace with its integration, with the UBM brand set to be progressively withdrawn through the year. Cost savings are on target to deliver the indicated £50m+, £60m for 2020 and £75m by 2021. There’s good scope to work the key verticals harder, with cross marketing and rolling out brands international.”

As at 1000 GMT, shares in Informa were ahead 2% at 725.4p.