(Alliance News) - Euromoney Institutional Investor PLC said Thursday it has decided to keep its Asset Management unit following a seven-month strategic review.
The publisher, event organiser and data firm was reviewing its Asset Management unit - which holds Institutional Investor, BCA Research and NDR - to decide if it should sell the business.
"The board has concluded that the best outcome for shareholder value is for Euromoney to remain the long-term owner of all three businesses, which have high levels of recurring subscription revenue and attractive profit margins. The Asset Management businesses will no longer be reported as discontinued operations and as assets held for sale," Euromoney said.
Turning to the Covid-19 pandemic, the company said it has cancelled the majority of its events scheduled for July to September, which covers Euromoney's fourth quarter.
The company said: "At this stage it is not possible to determine exactly how many events will take place in the fourth quarter and, if events are held, what the impact of Covid-19-related disruption could be on attendance and sponsorship."
Euromoney has 173 events scheduled for the period, which typically generate GBP34 million revenue. The gross profit from these events was expected to be about GBP18 million.
The company said the larger events have about GBP7 million of committed costs already incurred, so Euromoney said it will take a GBP25 million hit to profit if no events go ahead in the final quarter.
To combat this, Euromoney said it has taken "swift and decisive" action to reduce costs and preserve cash. Part of this is suspending its dividend payments.
The company did so, however, it benefits from subscriptions, which accounted for 60% of total revenue in financial 2019.
"However, the effects of Covid-19 on broader economic activity are likely to result in customers delaying purchasing decisions, and restrictions on face-to-face sales meetings may impact our ability to close new sales.," Euromoney added.
The company said its financial position remains strong, with net cash at March 31 of GBP8 million with committed funding of GBP188 million available through 2022.
Chief Executive Andrew Rashbass said: "Although our event businesses face short-term uncertainties, we have taken rapid action to contain our costs and protect our financial position. We have a robust balance sheet and strong brands that position us well for the long term."
Shares in Euromoney Institutional Investor were down 1.4% in London on Thursday morning.
By Paul McGowan; paulmcgowan@alliancenews.com
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