Broker snap: Debt worries eased at Informa

17th Nov 2010 12:18

The $729m fund raising through a US placing of loan notes will reduce net debt at Informa and should provide a boost to the shares, KBC Peel Hunt believes.Apart from the news of the fund raising, there was not a lot in the business publisher's interim management statement to get excited about, and even less to get worried about. Trading is in line with management expectations for the full year, with 'encouraging' progress in Academic subscription renewals, the company said.The Professional and Commercial business has seen a slight improvement on the organic growth target however the broker notes that Financial Services remains a tough market.In regards to its Events and Training division, the broker says that "conference markets are recovering well, with exhibitions showing +10% forward bookings for the first half 2011"."There is no change to numbers for the current year, but we expect that the reduction in group debt will go down well with the market to lift the shares" says the broker. Based on Peel Hunt's projected earnings for the 2011 fiscal year the shares trade on price/earnings ratio of 13. The broker thinks that could stand to go a bit higher, and has projected a target price of 506p. The "buy" recommendation is maintained.