Earnings: Informa Boosts Profits From Digital Subscriptions, Low Exposure to Advertising

image B2B companies announcing positive results in 2009 have one thing in common: they are relentlessly reducing their exposure to print advertising and to the volatile advertising market generally. The latest is Lloyd’s List publisher Informa which in its full-year 2008 results announces profits 17 percent higher year on year at of £164.6 million on revenues of £1.28 billion, a 13 percent rise year on year.

Unlike some of the more beleaguered B2B publishers, the vast majority of Informa’s revenues come from academic and scientific journals and 70 percent of its subscriptions are digital. The company makes 38 percent of its entire revenues from digital and troublesome advertising only accounts for three percent of revenues. A final dividend of 3.8 pence gives a total 2008 dividend of 10 pence.

Things are going so swimmingly that through future event bookings and high subscription renewal rates Informa has already received 29 percent of its 2009 revenues and is on course to beat 2008’s figure. This shows what a digital information business can do if it’s not shackled to the promiscuous, unpredictable ad market. Newspapers, B2B mags and most obviously commercial TV companies are all suffering from a partially cyclical downturn in marketing budgets and many are cutting staff, selling assets and restructuring to make ends meet. Informa admits it’s not completely immune from the recession: the company made savings of £33 million last year and expects a tougher environment for its smaller events and trade fairs. More after the jump…

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Datamonitor: Informa bought Datamonitor back in the pre-credit crunch days in 2007 for £502 million and so far it is holding up well given the pressure on professional information subscriptions. It’s subscription renewal rate was 80 percent for 2008; it enjoyed 19 percent like-for-like revenue growth and subscriber growth also of 19 percent. The professional and commercial division that houses Datamonita is the Informa’s most ad-exposed area, but the company says ad revenues are “pretty resilient” thanks to being so niche — plus Informa doesn’t do recruitment ads, one of the worst-hit areas.

Debt: Informa increased its net debt from £1.24 billion in 2007 to 1.34 billion — the increase almost entirely arising from a £244.4 million loss on foreign exchange conversion, compared to £12.9 million in 2007. The company still managed to decrease its net debt to EBITDA ratio from 4.3 times to 3.77 times and it has 10 percent headroom on its 2009 covenant tests based on current forecasts.