30 Apr 2020 07:00
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATIONFOR THE PURPOSES OF ARTICLE 7 OF EU REGULATION 596/2014
EUROMONEY INSTITUTIONAL INVESTOR PLC ("Euromoney")
Updates on the strategic review of Asset Management and covid-19
30 April 2020
Euromoney, the international B2B information services provider of essential information to global and specialist markets, today provides an update on the strategic review of its Asset Management businesses and a further update to the market on the impact of covid-19 on the Group.
Asset Management strategic review
On 10 September 2019, Euromoney announced a strategic review of its Asset Management businesses, which consist of Institutional Investor, BCA Research and NDR. During an extensive process, the Board carefully considered a range of options, including continued ownership and a potential sale of all or part of the segment. 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.
Update on covid-19
On 11 March 2020, Euromoney announced an update on the impact of covid-19 on our events businesses until the end of June 2020, given governments' restrictions on travel and attending gatherings. Our assessment of the potential financial impact of covid-19 on our events businesses in the period to June 2020 has not materially changed.
As a consequence of the continued global disruption caused by covid-19 and its impact on business activity, we have now taken the decision to postpone or cancel the majority of events originally scheduled to take place from July up to and including September (Euromoney's Q4). At this stage it is not possible to determine exactly how many events will take place in Q4 and, if events are held, what the impact of covid-19-related disruption could be on attendance and sponsorship. The financial profile of the 173 events originally scheduled in Q4 2020 is revenue of approximately £34m (£6m in July, £2m in August and £26m in September). The gross profit from these events was expected to be around £18m. The larger events have approximately £7m of committed costs already incurred, and therefore the gross profit impact of running no events in Q4 would be approximately £25m.
Actions to reduce costs and sustain our strong liquidity position
Euromoney has taken swift and decisive action to reduce costs and preserve cash, while supporting employees, serving customers and protecting the long-term health of the business. We have already taken steps to minimise non-contractual spend, postpone capital expenditure, freeze pay and limit new hires. We are exploring government support schemes to further protect jobs and prioritise liquidity. We have placed some UK employees, mainly those involved in events, on temporary furlough under the UK Government's Coronavirus Job Retention Scheme and are taking advantage of similar job retention and wage support schemes in other countries. From 1 May 2020, all Directors will take a temporary 25% reduction in their salaries or fees, except for Andrew Rashbass, CEO, who will take a 40% cut.
Additionally, the Board is adopting a prudent approach to shareholder distributions and will not declare an interim dividend payment for FY20, resulting in a cash saving of approximately £12m. The Board will consider the FY20 total dividend in November 2020, when it has better visibility on the business environment.
High level of subscriptions
Euromoney continues to benefit from the relative predictability of subscriptions, which accounted for 60% of total revenue in FY19. 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.
Robust financial position
Euromoney's financial position remains strong. We recently extended our bank facilities, with committed funding of £188m available through to December 2022. Net cash at the end of March 2020 was £8m.
Interim results
Interim results for the six months to 31 March 2020 are now scheduled to be announced on 4 June 2020. As previously announced, for the current financial year the Group will report under three new segments: Asset Management; Pricing; and Data & Market Intelligence. Summary financial information restated for this new segmental disclosure for the six month period ended 31 March 2019, is available on the Investor Relations section of the Euromoney website, www.euromoneyplc.com.
Management will host a short call for analysts and investors at 9:30am today with a presentation available on the Euromoney website, www.euromoneyplc.com. Dial in details: +44 (0)330 336 9125 Code: 8164395
Andrew Rashbass, CEO of Euromoney said: "In the face of the unprecedented challenges created by covid-19, we continue to prioritise the health and wellbeing of our employees, customers and business partners. 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.
After conducting a thorough strategic review of our Asset Management businesses, the Board concluded that we remain the best long-term owner of these assets. We will continue to position them for a return to sustained growth."
For further information, please contact:
Euromoney Institutional Investor PLC
Wendy Pallot, Chief Financial Officer: +44 20 7779 8866; wendy.pallot@euromoneyplc.com
Chris Collett, Investor Relations: +44 (0)20 7779 8636; chris.collett@euromoneyplc.com
FTI Consulting
Charles Palmer / Jamie Ricketts / Amy Hurnell / Jamille Smith: +44 20 3727 1000; euromoney@fticonsulting.com
NOTE TO EDITORS
Euromoney is a global information business providing essential B2B information to international and specialist markets. Euromoney provides price discovery, market intelligence and events across our segments. Euromoney is listed on the London Stock Exchange and is a member of the FTSE 250 share index. (www.euromoneyplc.com)
LEI number: 213800PZU2RGHMHE2S67
Ends