LONDON: Shares in UBM climbed on the back of a jump in sales last year when the UK-based company completed its shift from publishing to a purely events organising group. Revenues rose 12 per cent in 2016 and adjusted pre-tax profits rose to £208.5m, up from £171m for the same period in 2015, which beat analysts’ forecasts. Shares closed up close to 5 per cent at nearly £7.60.
UBM’s chief executive Tim Cobbold described it as a “transformational year” and said it was reward for the company’s decision to shift its focus from publishing to a “pure play” events business. Once a media conglomerate that owned the Daily Express and a portfolio of trade magazines, UBM said that events such as the Magic fashion show in Las Vegas and the Black Hat security and intelligence convention now account for 92 per cent of its revenues. While traditional consumer publishers are being battered by declining print advertising revenues and the rise of online challengers, business media companies and events organisers such as UBM, Relx and Informa continue to perform well. “When you actually get the events business right, the growth dynamic is strong,” said Mr Cobbold. “The goal is to be the leading B2B events business in the world.”
UBM made two key strategic moves in the past 18 months; first disposing of press release distribution service PR newswire to Cision for $841m and then, in December 2016, buying Asian events and exhibitions business Allworld for $485m. The company said that — while it was conscious of “global macroeconomic and geopolitical uncertainties” — it expected that the Allworld acquisition would drive higher underlying growth in 2017. With 40 per cent of UBM’s revenues generated in the US and 45 per cent in emerging markets, the company has benefited from the fall in the value of the pound since the UK voted to leave the EU last June. Only 7 per cent of its revenues are now generated in the UK. Analysts said economic growth in North America and China meant UBM was positioned to take advantage of a buoyant events sector.
“US growth is accelerating following the election of Donald Trump driven by positive business sentiment,” said analysts at Liberum. “When sentiment within the business community is positive you would expect that to feed through to events, although there are one or two areas such as fashion [events] where UBM’s momentum is limited.” Investors were also encouraged by UBM’s announcement that savings from its consolidated global sales operation Events First would increase to £20m per year up to 2019, from £10m per year. In December, the company sold the environmental conference brand Ecobuild, recognising a loss of £35.1m including a non-cash write-off of goodwill and intangible assets of £36.1m. “It was a show that couldn’t deliver performance,” Mr Cobbold said. “It’s all part of rationalising our portfolio.”
