Informa has raised its full-year earnings and revenue forecasts following a strong return to in-person events and trade shows around the world, even as strict pandemic measures continue to weigh on the important Chinese market.
The move by the exhibitions group shows that, beyond mainland China, business travel is rapidly recovering to pre-pandemic levels especially in the United States.
Informa reported underlying revenue growth excluding currency moves of 41 per cent in the 10 months to the end of October. The FTSE 100 group raised its guidance for full year revenue by £100mn to between £2.3bn and £2.45bn and adjusted operating profit by £15mn to between £490mn and £505mn.
Shares were up nearly 7 per cent in early Monday trading, although they are still roughly a third lower than a peak in January 2020, before the pandemic.
“Numerically we’re not back to 2019 levels, but outside of China the pace of return and our value proposition is strong and robust,” said chief executive Lord Stephen Carter.
The organiser of the Miami Boat Show and World of Concrete recorded a £1.14bn loss in 2020 when the pandemic grounded events but bounced back with a pre-tax profit of £137mn last year.
It has since completed the sale of its corporate intelligence division, selling Pharma Intelligence to US private equity group Warburg Pincus for £1.9bn and Lloyd’s List to German group Montagu for £385mn.
The company used the proceeds to launch a £750mn share buyback programme, as well as to invest in its events technology and buy business journalism outfit Industry Dive. Lord Carter told the Financial Times that some of the proceeds remained available for “further acquisitions”.
However sweeping coronavirus restrictions are preventing a return to business as usual at its trade shows in China. Mainland China accounted for more than 13 per cent of the company’s global revenues last year. The guidance assumes no further income from events in China for 2022.
Analysts at Citi said the update “derisks” any further contagion from Chinese restrictions, and noted the “fairly strong” performance of the company’s academic publishing division alongside the recovery of corporate events. The division was boosted by subscription renewal rates, delivering underlying revenue growth of 3 per cent.
Lord Carter said that the rise of working from home may even benefit the business in the long run, as “meeting moments that matter have become more important”.
“If you’re a professional in field X and you’re going into the office three times a week . . . the single industry gathering is disproportionately important,” he said.