UPDATE: Informa 1H Pretax Profit Doubles; Raises Dividend

27th Jul 2010 09:58

(Adds CEO and analyst's comments.) By Tommy Stubbington Of DOW JONES NEWSWIRES LONDON (Dow Jones)--U.K. publishing and conference company Informa PLC (INF.LN) Tuesday said it more than doubled first-half pretax profit despite a slight drop in revenue, and boosted its interim dividend by 25%, reflecting increased confidence in the group's prospects. Pretax profit was GBP66.4 million for the half year ended June 30, up from GBP32.1 million a year earlier, while revenue fell 2% to GBP624.0 million. The firm, which publishes maritime newspaper Lloyd's List and Routledge academic books, and owns market research firm Datamonitor, said it anticipates growth in the second half of 2010 driven by continued improvement in its events and training division and stabilization of subscription revenue in its publishing business. The company remains on track to meet its expectations for the full year, it said. Informa also said it is changing its dividend policy from three to two and a half times cover, and will pay an interim dividend of 4.5 pence, up from 3.6 pence the previous year. The change reflects confidence in the company's outlook, and returns the earnings-to- dividend ratio to an "appropriate" level, 18 months after it was increased as a response to the recession, Chief Executive Peter Rigby told Dow Jones Newswires. In the company's events and training business, which accounts for 48.7% of group revenue, adjusted operating profit grow 11.4%, driven by an increase in delegate numbers across its conference portfolio. Rigby said the recovery in the events sector is at an early stage. The overall number of events fell 29% in 2009, and Rigby said he expects event volumes to remain at 2009 levels this year. However, the improvement in revenue and margins in the first half should persist for the full year, he added. In the publishing division, which provides the remainder of group revenue, academic information had a strong first half with high subscription renewal rates, while professional and commercial information was held back slightly by subscriptions in the financial sector. "We see the dividend hike and the focus on investment in the businesses as positive signs of confidence for the remainder of the year and beyond," said KBC Peel Hunt analyst Patrick Yau, keeping his buy rating and 506 pence target price. In May 2009 Informa announced it was moving its tax residency to Switzerland, partly as a response to changes in U.K. tax law. Rigby said there are no plans to reverse the move following the recent change of U.K. government, adding that the decision was taken for a variety of reasons, and that there has been no significant change in the tax environment in the U.K. By 0845 GMT, Informa's shares were up 14.6 pence, or 3.8%, at 402.2 pence, outperforming a 0.5% gain in the FTSE 250 mid-cap index. -By Tommy Stubbington, Dow Jones Newswires; 44-20-7842-9268; [email protected] (END) Dow Jones Newswires July 27, 2010 04:58 ET (08:58 GMT)