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Informa crashes to £740mln loss due to events industry disruption

The board has extended its COVID-19 ‘action plan’, extending the postponement programme to mid-to-late spring 2021, more cost savings and strengthening the balance sheet

Informa PLC -

Informa PLC (LON:INF) crashed to a sizeable first-half loss as coronavirus (COVID-19) laid waste to the events industry but said it should be cashflow-positive by next January.

The FTSE 100-listed events and exhibitions group, after being forced to cancel or postpone more than 160 events, said it expects more than 500 physical events will be switched to digital events for the full year.

For the first six months of 2020, group revenue came out at £814.4mln, down 26% year-on-year, with the exhibitions arm down 45% and the networking division down 42% but its subscription-based units were largely flat.

A statutory operating loss of £739.9mln was reported for the first half, versus a profit of £248.3mln a year ago, reflecting the lower revenue, COVID-19 non-cash impairments of almost £593mln, amortisation and other costs of £191mln.

The impairment related to the long-term trading outlook in June for the group’s physical events, when the continued inability to run physical events in many countries was expected to significantly impact the full-year outcome and be followed by a gradual recovery back to 2019 levels of operating cash flow by 2025. 

In the results statement, Informa chief executive Stephen Carter said that as well as the resilience in the specialist subscriptions, data and content, he was also encouraged by the recovery of Informa’s physical events business in China, whilst virtual events are “maintaining our brands, developing our digital services and enhancing our data capabilities”.

The board has enhanced its COVID-19 ‘action plan’, extending the postponement programme to mid-to-late spring 2021, adding another £600mln of cost savings, reducing cash expenditure and strengthening the balance sheet.

This should underpin full-year revenues of circa £1.7bn, Carter said, which will also serve as the baseline for 2021, while the combination of lower costs, more efficient financing and effective cash management “will secure positive monthly cashflow position by January 2021, even assuming no physical events activity other than shows within mainland China and outdoor events”.

Directors said they intend to renegotiate or repay £1.1bn of private placement loans by the end of the year with a planned £500mln bond issue.

Informa shares fell 3% to 370p, a fall of 57% since the start of the year.

Analysts at UBS said revenues were better than the consensus forecast of £760mln and underlying profits (EBIT) of £119mln also beat expectations of £69mln.

   --Adds share price and broker comments--

Quick facts: Informa PLC

Price: 448.8 GBX

LSE:INF
Market: LSE
Market Cap: £6.74 billion
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