Investors will be keen to hear an update from the horse’s mouth, with management having said last year that around 30% of revenues were generated from Asia, with 40% from North America and 10% from the Middle East, all regions where conferences have been cancelled or postponed due to the rapid spread of Covid-19.
In the final quarters of last year, visitors had also put off exhibitions in Hong Kong because of the political troubles, while Dubai was another tough market.
In the first quarter of 2020, most China-based shows have already been pushed back and Informa has also put on hold its flagship health & nutrition show in the US and the Japan edition of the important series of CPhI pharmaceutical events.
Analysts at Deutsche Bank said with the rapid rise in the number of global infections they saw “a material risk of extended business disruption”, while over at Citigroup there were worries that disruption to the events sector could be worse than other segments of media, with “a knock-on effect into 2021” on forward-bookings and pricing.
For 2019 analysts’ consensus is looking for Informa to report broadly flat sales of £2.9bn, a small increase in pre-tax profit to £816mln and a further hike in the dividend to 24.5p a share for 2020.
DFS also feeling coronavirus discomfort
However, that was January and things have changed dramatically since then due to the outbreak, while 60% of the company’s finished goods are imported from mainland Europe or China.
Looking back, sales dropped 6% in the half-year to December in what was then “a challenging consumer environment”, particularly in August and September.
Orders then started to pick up towards the end of the period during the crucial winter sales.
StAberdeen: dividend cut in order?
At the group’s half-year results in August, profits fell but the interim dividend was maintained at 7.3p after Lloyds agreed to pay a £140mln settlement after severing a contract to run its Scottish Widows fund portfolio and ‘StAberdeen’ won investment mandate with Virgin Money and Skipton Building Society.
While others in the sector have confirmed that weak fund flows in the third quarter improved after December’s general election, it seems hard to imagine that this can reverse the net outflows of £15.9bn in the first half.
M&G delivers post-split numbers
M&G, which is focused on savings, investment and retirement in the UK and Europe, was initially written off by Deutsche Bank, who said the business looked “unexciting”, with “not much growth and too much debt”.
However, Deutsche’s analysts were felt to be “surprisingly compelling value” with expected dividends pointing to around a 9.1% yield in 2020, and that was with the shares well over 10% higher than they are now.
JPMorgan Cazenove made M&G its top pick in the sector earlier this year, saying the shares trade at an “unjustifiable” discount to peers.
This is based on the life business’s Solvency II equity valuation of 26% compared to Just Group trading at 53%, Phoenix at 90% and Legal & General at 125%.
“We believe that it could be worth 388p a share within the next 1-2 years”, versus the recent levels around 190p.
Tuesday 10 March:
Finals: Biopharma Credit PLC (LON:BPCR), French Connection Group PLC (LON:FCCN), M&G PLC (LON:MNG), Standard Life Aberdeen PLC (LON:SLA), John Wood Group PLC (LON:WG.), Ultra Electronics Holdings PLC (LON:ULE), STV Group PLC (LON:STVG), Team17 Group PLC (LON:TM17), H&T GROUP PLC (LON:HAT), Forterra PLC (LON:FORT), Gresham Technologies plc (LON:GHT), Informa PLC (LON:INF), LSL Property Services PLC (LON:LSL), John Menzies PLC (LON:MNZS), The Simplybiz Group PLC (LON:SBIZ), Cairn Energy PLC (LON:CNE), TP ICAP PLC (LON:TCAP)