Informa has released a trading update for 10-months ending 31 October 2018, with group underlying revenue growth of 3.9 per cent and the combination phase of the Accelerated Integration Plan (AIP) for UBM completing on schedule.
Stephen Carter, group chief executive, commented: “At Informa, we remain focused on delivering improving growth and returns, whilst effectively combining UBM into the Informa Group to create brands and platforms for future growth and scale.
“With more than 60 per cent of our revenue forward booked and recurring, we have good forward visibility. Similarly, our increased international breadth, in particular our strong positions in the US, Asia and the Middle East, leave us well placed to meet expectations.
“As ever, the last two months of the year are important, particularly in our more retail and transactional businesses but we remain confident of delivering a further year of growth in revenue, profit, earnings, dividends and cashflow.”
The standalone Informa Group reported underlying revenue growth of 4.1 per cent in the 10 months to 31 October, with the new combined Informa Group reporting 3.9 per cent.
The trading statement highlighted that performance was in line with expectations and left the business of track for 3.5 per cent underlying revenue growth by the end of the year, despite ‘macro uncertainties’ in the form of US/China trade relations, Middle East political tension and Brexit negotiations.
Commenting on the UBM brands and businesses, the statement said: “Since the summer, we have moved quickly to implement the AIP, in order to reduce uncertainty and maintain operational momentum in UBM’s brands and businesses. This has been achieved with minimal revenue leakage, reflected in robust trading, bar ongoing weakness in the Fashion business. The absence of any performance discount is testament to the positive and collaborative attitude of UBM colleagues, the spirit of combination and the exciting potential of the new emerging business.”
The Group stated that the one-year phased AIP for UBM, due to be largely completed this year, includes:
- AIP Operating Model: The allocation of UBM’s businesses and teams into the Informa operating structure is largely complete. In Asia, Informa’s business has been folded into the existing UBM operating structure. In EMEA and the Americas (North and South), UBM’s businesses have been combined into Informa’s existing vertical and regional structures.
- AIP Leadership & Talent: More than 100 senior management appointments have been confirmed for the combined group and wider team structures and reporting lines are also largely finalised. This ensures vertical/regional teams will have clear ownership of 2019 targets and objectives.
- AIP Progressive Portfolio Management: Our programme of activity to increase the focus on verticals and businesses where we have strong market positions and greater opportunities for growth and scale, is underway. We are engaged with prospective buyers for specific parts of our Information Services business, including our Agribusiness portfolio and IGM, part of our Finance information business. More details will be provided either before or within our full year results but we continue to see up to £150m of revenue (c5 per cent of Group) potentially within scope.
- AIP Synergies: As team structures and reporting lines have been confirmed, we are addressing obvious areas of overlap and duplication, reducing run-rate costs. This puts us on track to meet our current cost synergy target of at least £50m in-year in 2019, rising to a £60m run rate by end 2020 and £75m by end 2021 (targets are pre-reinvestment into Fashion Growth Acceleration Plan).After cost synergies, come revenue opportunities. Some are more immediate than others, with cross-marketing initiatives likely to have a positive impact from 2019. We also see attractive digital opportunities over time, as we start to use our international scale to greater effect. To this end, we have appointed and resourced a dedicated senior executive to pursue Digital Services revenue growth in the Global Exhibitions Division. John Van der Valk, who was previously managing director of the CPhI portfolio within UBM, will lead this programme globally.
- AIP Fashion Growth Acceleration Plan: Our restructuring programme in Fashion is well underway following the appointment of a new managing director of the Fashion Exhibitions business in September (Mark Temple-Smith, previously commercial director for Informa Exhibitions). He is leading an experienced team with strength-in-depth and together they have quickly set about improving key areas including customer relations, pricing, brand positioning, in-event experience and digital marketing.
The Group concluded that the strategy since 2013 has been to focus and organise the business around its customers and end markets while investing in platforms for long term sustainable growth and scale, of which the UBM acquisition was an important part.
Looking to 2019, it will be operating as a single combined group and targeting ‘further profitable growth’.