Informa, the UK business services company, operates three core divisions.
Its academic information (36 per cent of operating profit) division is a leading publisher of journals, with a focus on science and humanities; professional and commercial (35 per cent) provides database and analysis services for a range of industries; and events and training (29 per cent) organises market-leading conferences and training programmes globally.
In the past few years, Informa’s management has focused on pruning the company’s portfolio – selling businesses which delivered inadequate margins and discontinuing certain structurally challenged publications.
This process is now largely complete, allowing attention to switch to the delivery of organic growth. The company’s recent first quarter update was encouraging in this regard.
Although headline figures may not have appeared stellar, with organic growth down 3 per cent, this was largely a consequence of the timing of Easter on the events business and a lingering drag from the aforementioned ‘pruning’.
Deferred revenues, a good indicator of future growth, were positive and we expect growth to accelerate as the year progresses.
Currently trading on a 2013 price-to-earnings ratio of approximately 11x and offering a dividend yield of 4 per cent, Informa is currently trading at a discount to its peers.
Neil Veitch is manager of the SVM UK Opportunities fund
