Informa extends events delay as virus drives loss
By Sean Farrell
Date: Monday 21 Sep 2020
(Sharecast News) - Informa extended its delay until events restart until mid-to-late spring as Covid-19 sent the company to a £740m statutory loss.
The FTSE 100 company swung to an operating loss in the six months to the end of June from a profit of £248.3m a year earlier as reported revenue fell 42% to £814.4m. Adjusted operating profit fell 73% to £118.6m.
The statutory loss was mainly caused by £592.9m of goodwill impairments based on the long-term trading outlook for Informa's events business, which is unable to run physical exhibitions and conferences in North America, its biggest market. Results were also affected by reduced revenue and exceptional costs of £43.4m.
Informa said it expected annual revenue of about "£1.7bn/£1.7bn-" and that it was targeting more than £600m of cost cuts in 2020 with direct savings of about £400m.
The company said the impact of Covid-19 had lasted longer than expected and that, though many countries had reopened economies, infections had increased again leading to local lockdowns and extended travel restrictions. The company said this was the case in North America, Europe, the Middle East and Africa.
The company had expected events in these markets to restart gradually in the summer and pick up in September but this has not been possible. More than £1bn of budgeted events revenue has been cancelled this year including more than £450m since June.
In response Informa said it had moved most events scheduled for early 2021 to mid-to-late spring to allow more time to recover and get past the winter months and the US presidential election.
Shore Capital analyst Roddy Davidson, who rates Informa shares as 'hold', said: "This morning's result provide a reminder that Informa moved quickly and decisively to deal with the impact of COVID-19 ... and continues to do so, but that the timing and scale of a resumption of activity across the exhibitions markets remains difficult to predict. Although we rate the group as a high quality, well-managed business with good medium-term growth prospects we remain cautious on the outlook."
Physical events have recovered in mainland China and demand for the company's subscriptions businesses, digital content, marketing services and virtual events has held up well, Informa said.
Informa shares fell 3.5% to 367.3p at 10:47 BST. The shares have more than halved from 867p at the start of 2020.
Chief Executive Stephen Carter said: "We have extended our Covid-19 action plan to deliver further business stability and security through to the end of 2021. This package of measures extends our postponement programme to mid/late spring 2021, further lowers costs, reduces cash expenditures and strengthens our balance sheet."
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