Euromoney Prelims 2013

EIIEuromoney Institutional Investor PLC, the international online information and events group, achieved a record adjusted profit before tax of £116.5m for the year to September 30 2013, against £106.8m in 2012.  Total revenues for the year increased by 3% to £404.7m.  Underlying revenues, excluding acquisitions, increased by 1%.  Headline subscription revenues increased by 3% to £206.3m, after a flat first half, and again accounted for just over half of group revenues.

The adjusted operating margin was unchanged at 30%.  While the operating margins of some divisions have come under pressure, this has been offset by savings on central costs.  Costs and margins remained tightly controlled throughout the year and, as highlighted in previous announcements, the group has continued to invest in technology and new products as part of its online growth strategy.

As highlighted in previous trading updates, the profitability of banks and asset managers has improved during 2013, particularly in the US.  However, continuing litigation against banks, often leading to significant financial settlements, combined with increasing regulation and demands for stronger capital bases, continues to put pressure on the profits of the banking industry.  As a result, the broadly positive outlook for markets and economic growth is taking time to translate into a recovery in the spending of financial institutions on marketing, training and information buying. 

Commenting on the outlook for 2014 Euromoney said:

First quarter trading has started in line with the board’s expectations.  As part of its strategy, the group has increased significantly the proportion of revenues derived from less volatile subscriptions, and from events.  Subscription revenues, supported by deferred revenues at the balance sheet date, should continue to grow, while the outlook for events and training is reasonably robust.  However, for reasons highlighted above, the sharp improvement in fourth quarter financial advertising has not continued into the first quarter of the new financial year.   As usual at this time, forward revenue visibility beyond the first quarter is limited for revenues other than subscriptions.

While sentiment in financial markets remains reasonably positive, there is usually a lag between their improved profitability and the appetite for financial institutions to increase their spending on marketing, training and information buying.  Most customer budgets are calendar year driven so it is too early to determine whether this lag will translate into increased spend in 2014.

In 2014, the board plans to continue its programme of investing in the digital transformation of its publishing businesses, in particular using the Delphi platform to improve the quality of its content and launch new products.  The board is confident its strategy for investing in new products and technology and using its strong balance sheet to fund further acquisitions will continue to drive further growth.

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