Informa stock climbed 8% on Friday as the world’s largest exhibition company said events in China would resume early next month. Trade shows, festivals and conferences around the world have been postponed or canceled in recent months as the coronavirus pandemic has brought the global events circuit to a standstill.Informa stock climbed 8% on Friday as the world’s largest exhibition company said events in China would resume early next month. Trade shows, festivals and conferences around the world have been postponed or canceled in recent months as the coronavirus pandemic has brought the global events circuit to a standstill.
Informa’s events-related business, which accounts for 65% of revenue, did not hold a single physical event in April or May. The stock remains 45% down year-to-date.
But finally there was some long-awaited good news for investors on Friday as the company said the China Beauty Expo in Shanghai has been scheduled for early July. However, the company said events in the U.S. — its largest market — were unlikely to restart before September. It added that the pace of return and recovery will vary state-by-state. An anticipated gradual recovery in international travel will also affect attendance at some events that are able to take place. Informa said the outlook was “unpredictable” but that based on the current picture it saw annual group revenues of £2 billion, down from £2.9 billion in 2019. The company produces more than 450 international events and trade shows a year across 4 countries, ranging from the Monaco Yacht Show to World of Concrete. It has now completed its Covid-19 postponement program, with 160 events canceled or rescheduled for 2021 — representing £300 million in revenue — while a further 300 events will be held digitally instead in 2020.
Informa raised £1 billion through an emergency share placement and suspended its dividend to shore up its balance sheet amid the pandemic. It has also identified £400 million in cost savings. Looking ahead. The return of major events in China is undoubtedly good news, provided there isn’t a resurgence of the virus and authorities allow trade shows to go ahead. The picture in other countries, including the U.S., is more worrying for Informa. Revenue will drop by about a third, but that is far from certain and appears to depend on events in America resuming in September. UBS analysts said there will be concerns among investors of further downgrades to the guidance if September comes and goes with no events in the U.S. However, they noted that customer demand for rebates was low, suggesting a high level or brand loyalty. The company’s academic publishing subscriptions business also remains resilient. Half-year results, which have been delayed until September, will give the company and investors a clearer idea of the recovery that lies ahead.
