Newsletter publisher and exhibitions organiser Informa is sticking with its full year guidelines despite admitting that renewal and new subscriber cycles are taking longer than they used to.
On the Academic side, the group said journal renewals this year have been as expected, with organic revenue growth of 2.5% in line with internal expectations.
The Professional and Commercial Information division has faced challenges, particularly in Europe, in two of its larger sectors: pharmaceuticals and financial services. This has led to longer renewal cycles and, in some cases, reduced subscriptions. As a result organic revenue has declined by 4.1% in the period. Informa still expects this division to grow revenue organically in 2012, as it continues its shift in emphasis away from print advertising towards digital advertising contracts.
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On the Events and Training side, the year has started well, with the group claiming its strategic decision to run more low-risk large scale events is paying off. The small conference market, especially in Europe, remains tough and the group has seen revenue declines year-on-year in some countries. Overall organic revenue growth across Events is 3.6%.
Corporate training, particularly in the US, has made a slow start with revenues currently down by 6.8%, though things have picked up a bit in April, but the group is not expecting to have recovered the first quarter deficit by the half year.
Operating cash flow remains strong, the group said, and it continues to operate at the lower end of its net debt to EBITDA (earnings before interest, tax, depreciation and amortisation) target ratio range of between 2.0 to 2.5.
The recent decline in the value of the US dollar is a concern, as Informa generates around 46% of its sales in US dollars or other currencies that are closely aligned with the the greenback. A one cent movement on the average £:$ exchange rate for the full year equals approximately £1.5m of adjusted operating profit, the group revealed.
The group is less exposed to the euro, which has also been taking a bath recently. A one cent movement on the average £:€ exchange rate for the full year equals about £0.4m of adjusted operating profit.
"Trading conditions across the world are volatile and both the renewal and new subscriber cycles take longer than they used to. Overall we believe we have the right, high quality products in the right sectors to ensure the group's future progression," said Peter Rigby, Informa's Chief Executive.
JH
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