Euromoney Institutional Investor (LON:ERM)’s H118 results show that all the KPIs are moving broadly in the right direction, with revenues ahead by 3%, adjusted PBT up 6% and reduced net debt. The picture shown by the moving parts is more complex, with income streams from asset management remaining under pressure but good growth from Pricing, Data and Market Intelligence and a strong performance in Events. The completion of the GMID disposal since the period end has bolstered the balance sheet by a further net £103m, giving plenty of scope for the pursuit of further acquisitions to support growth.
Net positives
Management’s internal view was that the weakness in Asset Management related to the impact of MiFID II. It is now regarded as a longer-term structural problem around overall industry costs and the value obtained from spending on research. This is prompting a different strategy at BCA, to protect profits and invest in sales and marketing. Institutional Investor, which also sells into the asset management sector, draws more from marketing budgets and is running ahead of the prior year.
Pricing, Data and Market Intelligence has been growing well, with subscriptions and events both delivering revenues up 9%, with a stronger profit performance (+13%) with the first benefits from last year’s investment. Events had a particularly strong Q2, with more banking-oriented events in the US and China, and a good turnaround at Mining Indaba. Our forecasts are adjusted for the disposal impact, which is dilutive to EPS (-4% FY18e, -7% FY19e) until the proceeds are redeployed.
To read the entire report Please click on the pdf File Below: