Ascential tops first-half expectations after agreeing takeover by Informa

30th Jul 2024 08:41

(Sharecast News) - Events and business information company Ascential announced a solid set of first half results on Tuesday, surpassing market expectations.

The FTSE 250 company reported double-digit growth in its key segments, Lions and Money20/20, and a solid financial performance marked by diverse and sustainable revenue streams from live events, benchmarking awards, digital subscriptions, and advisory services.

It said its balance sheet remained strong, with a net cash position as of 30 June.

The company completed the sale of its Digital Commerce and WGSN businesses at the start of the year, returning £758m to shareholders through a tender offer, special dividend, and share buyback, although the latter was subsequently suspended.

Additionally, the sale process for Hudson MX was ongoing, with multiple parties involved.

Financial highlights for the period included a 15% increase in revenue to £157.8m and a 27% rise in adjusted EBITDA to £65.4m.

The marketing segment saw 15% revenue growth driven by a significant increase in delegate volumes and sponsorship customer numbers.

Its financial technology segment saw revenue rise 14%, with the successful launch of Money20/20 Asia contributing £6m.

Ascential also reported strong growth in earnings per share, with diluted earnings per share for continuing operations at 11.9p on an adjusted basis, up from 7.0p in the first half of 2023.

The company's cash flow performance remained robust, with a 100% operating cash flow conversion and a free cash flow conversion of 87%.

On 24 July, Ascential's board recommended a cash offer from Informa, valuing the company's share capital at £1.2bn.

The offer represented a 53% premium to the closing share price prior to the offer period, and would provide shareholders with a total return of £2bn in 2024, or 2.1 times Ascential's market capitalisation before its strategic review ended in January 2023.

It said the scheme of arrangement was expected to become effective in the fourth quarter of 2024, subject to shareholder approval and other conditions.

"We have again delivered strong, double digit revenue growth across both of our segments in the first half, building upon the 13% growth we delivered in 2023," said chief executive officer Philip Thomas.

"As we look to the second half of 2024 we are focused on leveraging the considerable momentum generated in the first half.

"For the Money20/20 US show in Las Vegas this October, forward booking values are currently in line with prior year levels."

Thomas said that given the typical balance between first and second half trading, in light of the very strong first-half performance, Ascential expected to report constant currency revenue growth rates towards the top end of its medium-term target range in 2024, with 2025 set to benefit from the strong levels of momentum in the marketing division in particular.

"Our two divisions, Lions and Money20/20, have transformed how our customers around the world experience events, and benefit from both digital intelligence and advisory services.

"The value our businesses bring to their respective industries is clear as is the regard in which, following their recommended offer for the company, they are held by Informa."

At 0827 BST, shares in Ascential were down 0.7% at 568p.

Reporting by Josh White for Sharecast.com.