Euromoney's (LON:ERM) Q3 trading update shows little change from the position at the interims in May, with overall underlying revenues flat. This, however, masks divergent segmental performances. Structural issues in the asset management sector persist, while the pricing, data and market-intelligence subscription revenues are relatively robust. The net result is no change to our full year or prospective forecasts. The group’s cash position of £94.1m at end June reflects the GMID proceeds and gives plenty of scope for M&A. News on this may be a catalyst for closing the rating discount to peers.
Subscription Revenues Ahead
Adjusting for currency and M&A, subscriptions and content revenues and those from events were ahead of Q317, by 2% and 1% respectively. The growth in subscriptions is despite the previously disclosed issues at BCA and NDR, where the underlying customers’ markets have been undergoing fundamental changes. The consequent changes to the business model at BCA are underway although its fundamental strengths as a digital subscription business should not be overlooked. There are also opportunities to diversify its customer base to include a broader spectrum of wealth and asset management. The membership business of Institutional Investor continues to build well, while the magazine business has now transitioned to digital only. The events segment looks well placed as it concentrates on the larger, higher-quality (and margin) events.
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