Informa (INF) H2 2011 earnings summary

Executive summary

• Strong FY2011 results, with organic growth across all three divisions, higher margins and lower net debt despite challenging economic conditions.

• Strategy emphasized resilient subscription content, larger repeatable events, digital delivery and expansion in emerging markets; subscriptions, copy sales and larger events rose to 70% of revenue from 62% over four years.

Financial highlights

• Revenue was £1.27bn, up 4% reported; organic revenue growth was 3.9% adjusted for IPEX, while adjusted profit growth on that basis was 7.9%.

• Profit was £336.2m, up 7.3%, and operating margin reached a record 26.4%; adjusted earnings rose over 8% to 37.8p.

• Free cash flow exceeded £200m; net debt ended the year at £784m, or 2.1x EBITDA, while cash conversion was 93% reported and 99% excluding two items highlighted at H1.

Outlook and guidance

• FY2012 trading began in line with expectations; deferred income supported visibility over around one-third of revenue, renewal rates were as expected and large-event forward bookings were strong.

• Market consensus implied 8% earnings growth for 2012; Datamonitor integration savings and lower interest costs were cited as supports, not as company guidance.

• Academic Information expected further growth at a lower rate than in 2011, with margin likely to soften slightly as society-journal activity increases; PCI anticipated similar top-line growth, subject to sector conditions, and higher margins from savings.

• Events and Training margin was expected to rise further, but near-term trading visibility remained limited for smaller events and training; larger events were performing well.

• CapEx was expected to remain around 2%–2.5% of sales; acquisition spending remained subject to unchanged financial criteria.