Ascential (LON:ASCL), formerly known as EMAP, posted a slight dip in earnings for the first half due to lower margins as it restructures the business to focus on digital.
The events and market research company said adjusted underlying earnings (EBITDA) from continuing operations came to £60.4mln in six months to the end of June, compared to £60.8mln a year ago.
Margins reduced to 32.0% from 36.8% last year due to the integration of recently acquired e-commerce analytics provider Clavis Insight and investments in the launch of the Money20/20 financial services event in Asia and changes to the Cannes Lions festival for creative communications and advertising.
Growth driven by information services
On an organic basis, adjusted EBITDA rose 2% as growth in the information services business offset a decline in the exhibitions and festivals arm.
The group generated revenue from continuing operations of £188.9mln, up 14.4% from £165.1mln last year or up 6.7% on an organic basis.
The exhibitions and festivals business posted organic revenue growth of 6.9% to £85.4mln as a strong performance in Money 20/20 mitigated a drop in Cannes Lions.
The information services unit delivered a 6.6% gain in organic revenue to £103.5mln, boosted by contributions from the acquisition of Clavis and Media Link, a US advisory and business services firm.
Clavis was loss-making in the first half but is expected to break even in 2018 while MediaLink's revenues declined due to a shift in product mix towards brands.
Digital strategy
Following a strategic review of the exhibitions arm, the company agreed to sell the business to ITE Group for £300mln in May as part of its plan to focus on digital.
In June, Ascential said it had agreed to buy global digital subscription business WARC for an initial consideration of £19.5mln. Ascential intends to combine WARC with Cannes Lions’ online space The Work to form a digital subscription product.
READ: Ascential acquires digital marketing business WARC ahead of revamped Cannes Lions Festival
"In the last six months we have made considerable progress with our strategic vision: enabling our customers to succeed in the digital economy,” said chief executive Duncan Painter.
He added: “The group is trading in line with its expectations for the full year and the board remains confident in our overall 2018 performance and our prospects for continued success through the execution of our strategy."
Ascential declared an interim dividend of 1.9p per share, compared to 1.8p last year.
Shares fell 4% to 441p in morning trading.