Specialist business publisher and trade events group Informa has reported a half year loss after taking impairment charges relating to its European conferences business, and suffering losses on the sale of certain European businesses.
The group has swallowed a loss of £24.4m on the disposal of its Austrian, Czech Republic and Hungarian businesses and downsized the remainder of its portfolio to reflect current market demand. Of more concern, however, is an admission that the European conferences market is unlikely to return to the halcyon days of 2007 and 2008, prompting the company to write down the value of goodwill - essentially the estimated worth of a brand - associated with its European conference businesses.
"Whilst the remainder of our European businesses remain profitable, the revenues generated are significantly below their peak in 2007 and 2008 reflecting the tough trading conditions in large parts of Europe. We believe there has been a structural change in this market and have therefore taken a non-cash impairment charge of £80.0m," the firm said.
Try 6 free issues of MoneyWeek today
Get unparalleled financial insight, analysis and expert opinion you can profit from.
Start your trial
Sign up for MoneyWeek’s free twice-daily newsletter.
Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.
Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.
The firm posted a pre-tax loss of £27.4m (2011: profit £66.5m) on revenues of £619.6m, down 2.4% (1.2% organic) from £634.8m the same period the previous year. Basic losses per share for the six months were 7.0p (2011: positive earnings of 9.2p).
Latest Videos FromMoneyWeek
Stripping out the one-off charges, adjusted profit before tax edged up to £142.8m from £139.1m at the interim stage last year. Earnings before interest, tax, depreciation and amortisation nudged up to £172.7m from £170.4m the year before. Adjusted earnings per share rose to 18.3p from 17.7p last year.
Despite the decline in revenue and the more realistic appraisal of the prospects of the European conferences market, the company was keen to emphasise that the business is in better shape than in the past and is well positioned for growth when an economic recovery occurs. The improved situation is the result of the firm actively managing the portfolio to concentrate on its areas of strategic focus, as well as high cash flow conversion, currently at 76% (first half of 2011: 56%).
Operating cash flow improved to £121.1m from £88.7m the year before, while net debt at the end of the reporting period was £844.8m, down from £877.7m a year earlier.
The dividend per share was increased by 1p to 6p.
In a statement the firm said: "We are encouraged by the product launches coming in the second half of the year as well as our recent Canadian acquisition. We are making good progress on a number of growth initiatives including geographic expansion, across Informa which gives the board confidence in meeting its expectations for the full year and the group's future prospects."
Informa experienced growth in both the Academic Information and Professional and Commercial Information divisions, but this was offset by declines in the Events and Training division, which accounts for 47% of group revenues and 34% of adjusted operating profit.
The share price fell 6.24% to 346.80p by 08:40.
NR
