Informa Plc, the world’s largest exhibitions organiser, may be preparing to sell-off its UK exhibitions. The portfolio, which includes IFSEC, Decorex, Brand Licensing Europe, and London Tech Week, is thought to have had 2019 revenue of some £25m (just 2% of the Informa Markets division of the listed UK company).
It is believed there have been initial discussions about possible divestment of the UK events. The largest is the security exhibition IFSEC, which attracted 34,000 visitors and 400 exhibitors in 2019. Together with associated events, it may have had revenues of £10-11m, accounting for some 40% of the company’s UK exhibitions revenue.
The shows may have been losing some market share to the private equity-owned Nineteen Group whose International Security Expo takes place at IFSEC’s former NEC venue. At a time when it is reasonable to forecast a relatively slower recovery in international events, it is notable that these security exhibitions had been attracting large numbers of exhibitors and visitors from across the world.
In 2019, Informa Plc had revenue of £2.89bn and operating profit of £933.1m. The exhibitions division was 50% of parent company earnings and achieved 4.3% revenue growth, the strongest of any Informa operations. But, for the first-half of 2020, Informa Plc revenue/ operating profit was £814.4m/£118.6m – down 42% and 74% respectively on 2019. Informa Markets operating profit was slashed from £253.2m to just £12m.
Any divestment of Informa’s UK exhibitions may be viewed positively by shareholders because it wouldn’t much change the high-rated company’s largely-international portfolio (70% of revenue comes from the US and Asia) but would reduce exposure to the post-Brexit UK economy. Indeed, insiders believe that other major players (like Clarion Events?) may also choose to sell-down in the UK.
The Informa Plc share price (which had halved in the past year) has rebounded 15% in the last month reflecting confidence in a sizeable exhibitions rebound during 2021.
Divestment of the UK business would be mere tidying-up for Informa. But larger-scale M&A might still be possible. Its Taylor & Francis academic publishing (18% of Informa revenue in 2019) is a source of stable, high margin profit but it has been relatively low-growth. When large exhibitions do start to return in the US and Asia, investors will wonder whether information-analytics group RELX (owner of Reed Exhibitions) would agree to some kind of exhibitions ‘merger’ with Informa (with Taylor & Francis going the other way). There’s a long way to go but…
