Shares in business information provider Euromoney (ERM), moved ahead by 1.5% to 1064p in response to full year results that were ahead of consensus estimates. This is despite the company having raised guidance ahead of the pre-close period.
A confluence of factors including a turnaround within the asset management business, an improving environment for the events business, and a strong performance from both the data and market intelligence business, and the commodity benchmark division, contributed to the strong performance.
Adjusted pre-tax profit increased by 13% to £61.4 million, ahead of a consensus forecast of £58.5 million. Earnings per share was up by 12% at 45.5p, also ahead of a 43.2p forecast.
In a similar vein, the total dividend distribution of 18.2p per share was up 60% on the prior year and exceeded a consensus estimate of 17.1p.
EVENTS BUSINESS TURNAROUND
The group was badly impacted by the impact of social distancing rules that forced it to cancel corporate events. The nine-month trading update in July revealed that underlying growth for the events business declined by 48% for the 9 months to June 2021.
The easing of travel and social restrictions in recent months has created a more conducive environment for this segment of the business.
This improvement was reflected in comments from management which said: ‘since the return of physical events in May we have seen a positive response from customers and a strong recovery in events revenue’.
Untapped bank facilities coupled with the £35m of net cash on its balance sheet, has provided Euromoney with the ability to pursue larger deals.
Euromoney has indicated that it is assessing the wealth and asset management landscape in the US for potential deals. An acquisition in the asset management space would build scale and scope to a business segment where the turnaround is continuing to progress ahead of plan.
Numis media analyst Steve Liechti has a £13.10 price target and believes ‘sequential trading momentum continued in fiscal fourth quarter and outlook suggests this continues. We see value, strategic momentum/delivery, well invested high quality data/subscription income?plus event/asset management recovery/optionality.’
