Informa forecasts a 33% hit to its revenue in fiscal 2020 as COVID-19 cancels large-scale events

Informa forecasts a 33% hit to its revenue in fiscal 2020 as COVID-19 cancels large-scale events
  • Informa forecasts a 33% hit to its fiscal 2020 revenue as COVID-19 cancels large-scale events.
  • The London-headquartered exhibitions group will cut over £400 million worth of costs.
  • Over 160 event brands representing £300 million of revenue have been cancelled or postponed.

Informa (LON: INF) said on Friday that its revenue in fiscal 2020 is expected to see an about 33% decline as the Coronavirus pandemic continues to cancel large-scale events in a bid to minimise the fast spread of the novel flu-like virus that has so far infected a little under 300,000 people in the United Kingdom and caused more than 41,000 deaths.

Shares of the company were reported 3.7% up in premarket trading on Friday. Informa is roughly 50% down year to date in the stock market. Learn more about how to choose winning stocks.

Informa to cut over £400 million worth of costs

The world’s biggest organiser of exhibitions announced to have devised a cost-cutting plan that will potentially save over £400 million for the company and help offset the sharp decline in its profit. Informa is also exploring other areas to potentially expand cost-cutting in the upcoming months.  

Known for organising world-renowned events like Monaco Yacht Show, Arab Health, and World of Concrete, Informa estimated its full-year revenue to print at around £2 billion in fiscal 2020. Its revenue in 2019 was recorded at a much higher £2.89 billion.

In April, the London-headquartered company launched a stock issue that raised £1 billion in total. The share sale helped Informa cushion the economic blow from COVID-19.

CEO Stephen Carter’s comments on Friday

According to CEO Stephen Carter:

“The prospect of a return for some of our major Events brands in Mainland China from July is now real.”

Carter also added that the China Beauty Expo to be held in Shanghai will likely be the 1st major event scheduled by the company after months of inactivity due to the health crisis.

Informa also warned on Friday that physical events were unlikely to resume in the United States before September. The U.S. marks its largest market for organising events. The exhibitions group, however, expressed confidence in its subscription business that it revealed was trading well, particularly the investments in drug development brands and clinical trials.

As per Informa, over 160 event brands have either been postponed to 2021 or cancelled altogether. Such events were expected to generate roughly £300 million in revenue. Another set of 300 event brands, the company added, have resorted to a digital format.

At the time of writing, Informa is valued at £7.15 billion and has a price to earnings ratio of 28.66.

By Wajeeh Khan
Mr. Khan specialises in Public Health by academia but is a trader by passion. Taking up two new hobbies of writing and trading in his teen years, he is now a professional trader and news writer with over 5 years of experience in various financial markets. Khan is passionate about bringing insightful articles to his readers and hopes to add value to their portfolios.
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