A 6% increase in the interim dividend was not enough to prevent some profit-taking at events and publishing group Informa PLC (LON:INF).
The shares, which had increased in value by more than 25% over the last five months, were down 3.1% at 823.6p despite what broker Numis Securities called “a good set of interim results that have come in a little ahead of our and consensus estimates”.
READ: Informa confirms offer to buy rival UBM in deal valued at £3.9bn
Revenue in the first half of 2018 rose 4.6% to £957.1mln from £915.3mln in the first half of 2017; stripping out foreign exchange effects and the impact of acquired and disposed of businesses, the underlying change was +4.3%.
Adjusted operating profit rose 3.3%, or 1.9% on an underlying basis, to £294.4mln from £284.9mln the previous year.
The consensus forecasts for revenue and operating profit were £916mln and £285mln respectively.
Adjusted profit before tax rose 3.3% to £264.7mln from £256.2mln the previous year.
The interim dividend was hiked by 6% to 7.05p signalling the board’s confidence in the second half performance.
Accelerated Integration Plan underway @InformaPLC + #UBM for combination into single Informa Group – see details on six main focus areas of AIP https://t.co/zvN7tootVa pic.twitter.com/NJjhWSaWCw
— UBM (@ubm) July 25, 2018
The addition of UBM to the group gives Informa greater scale and international reach, underpinning the board’s confidence it can meet its ambition of exceeding 3.5% underlying revenue growth in 2018 (including UBM's growth contribution from the date of completion on 15 June).
The group said it remains on track to deliver £50mln of annual savings from the merger of Informa and UBM, although given the lead time in realising these benefits there will be little impact on the profits for the current year.
"Informa continues to deliver good trading performances, reflecting our combination of international scale, increased depth and breadth in attractive industry verticals and the recent addition of UBM. This puts us firmly on track for another year of growth in revenue, adjusted operating profit, adjusted earnings, cash flow and dividends,” said Stephen Carter, the chief executive of Informa.
“Our focus for the second half is clear: to maintain consistent operating performance, as we implement our Accelerated Integration Plan to combine UBM and Informa and create a truly international B2B information services group," he added.
Numis Securities said the divisional performance was broadly as expected.
“In terms of divisions Academic surprisingly strong but helped by phasing at +3.5% (NSe [Numis] +1.5%) though margin a little lower than modelled, Exhibitions a solid +7.3% (NSe 8%), Business Intelligence +2.4% (NSe +3%), Knowledge and Networking +0.5% (NSe +1%)….so no major underlying surprises other than the surprisingly strong academic which has been helped a little by phasing. UBM expected to deliver underlying growth of between +3-4% in 2018 (should be as expected),” the broker observed.
Numis reacted to the interims by tweaking its forecasts to take account of currency movements and adjusting for the recently completed UBM acquisition, as a result of which its forecast for 2019 earnings per share rises to 52p from 48.3p.
The target price has been bumped up to 950p from 825p and the recommendation remains ‘add’.
We’ve just reported results for the first six months of 2018, with improving revenue growth and an enhanced dividend. See the statement in full at https://t.co/fnSGZmOFOk and join us for the live webcast at 08:30 UK https://t.co/6SGWfRL82q pic.twitter.com/1WN9Zk2QMB
— Informa Plc (@InformaPLC) July 25, 2018