Events and professional information group Informa (INF) gained 9.8% to 476.9p as investors looked to green shoots of recovery as exhibitions get set to resume in China next month.
Today’s rise should be seen in the context of a big year-to-date sell-off with the shares only just over half their level at the start of 2020.
The company unsurprisingly said it expected to report lower revenue after the Covid-19 pandemic forced the group to cancel or defer its events.
Informa said it planned to run major events in China from early July. The company has launched Informa AllSecure, in effect the adoption of a new industry standard which encompasses 10 key commitments that all Informa events will meet in future.
These include enhanced cleaning processes, non-contact registration, the potential use of face masks and social distancing measures.
Revenue for the year through December was likely to be about £2bn, down 31% from £2.89bn last year.
From an operating standpoint, the company said it had nearly completed its ‘postponement programme’, with 160-plus brands cancelled or rephased from 2020 to 2021, representing about £300m of revenue.
A further 300-plus brands had committed to a digital rather than a physical event in 2020. The company said there was minimal physical product scheduled for June.
CHINESE EVENTS TO RESUME
However, it added that it was now planning to run a number of major events in China from early July, with ‘China Beauty Expo’ in Shanghai the first scheduled major Informa brand to be held on the other side of the Covid-19 pandemic.
The company’s subscription-led businesses like journals division Taylor & Francis as well as Informa Intelligence and Pharma Intelligence are proving resilient.
Shore Capital analyst Roddy Davidson said: ‘Inevitably, Covid-19 has had a profound impact on the global exhibitions / events industry, however Informa has moved quickly, rescheduling, reducing costs, conserving cash and, most significantly, raising capital to buttress its balance sheet.
‘We believe this front-foot approach bodes well for the future and, whilst acknowledging that current uncertainty significantly heightens the risk associated with our recently re-based estimates, we have long regarded INF as a high quality, well managed business with attractive growth prospects.’
Consultancy Megabuyte was more downbeat, commenting: ‘The AllSecure initiative is interesting and seems to be the right way to restart operating physical events but this is considering there are no further waves of infection outbreak.
‘Unfortunately various regions are now showing signs of a second wave, and if this leads to further major outbreaks, more events (and potentially those rescheduled for the final months of 2020) would have to be postponed/cancelled, forcing the business to further downgrade its base case operating scenario and creating major challenges for the business in the second half.’
