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RELX share price: Company posts full-year results

Farquar McIntosh
  • February 25th, 07:33
  • Last Updated: October 21st, 14:43

RELX Plc (LON:REL) today released its full-year financial results. Highlights are provided below:

**Commenting on the results, Anthony Habgood, Chairman, said:** “RELX Group continued to execute well on its financial and strategic priorities in 2015, and we are recommending a 14% increase in the full year dividend for RELX PLC and a 5% increase for RELX NV. During 2015 we implemented a number of measures that simplified our corporate structure and our share listings, increasing transparency for our shareholders.”

**Chief Executive Officer, Erik Engstrom, commented:** “We achieved good underlying revenue growth in 2015, and continued to generate underlying operating profit growth ahead of revenue growth through continuous process innovation. Our financial position and cash flow profile remain strong.”
“Our number one priority remains the organic development of increasingly sophisticated information-based analytics and decision tools that deliver enhanced value to our customers. In 2015 we continued to support our organic strategy with a number of small acquisitions.”
“Trends in the early part of 2016 are consistent with 2015 across our business, and we are confident that, by continuing to execute on our strategy, we will deliver another year of underlying revenue, profit, and earnings growth in 2016.”
**Revenue of £5,971m/€8,240m; underlying growth +3%: **The underlying growth rate reflects continued good growth in electronic and face to face revenues (85% of the total), partially offset by continued print revenue declines.
**Adjusted operating profit of £1,822m/€2,514m; underlying growth +5%:** Growth expressed in sterling was +5%, and expressed in euros was +17%. The difference in growth rates reflects the sharp decline in the euro relative to sterling in 2015.
**Reported operating profit:** Reported operating profit, including amortisation of acquired intangible assets, was £1,497m (£1,402m) or €2,066m (€1,738m).
**Interest and tax:** Adjusted net interest expense was £153m (£147m) or €211m (€182m), with the £6m/€29m increase reflecting higher net borrowings and currency translation effects partly offset by a lower average interest rate. Adjusted tax was £388m (£374m) or €535m (€464m). The adjusted effective tax rate was 23.2%.
**Adjusted EPS growth in constant currencies +8%:** Adjusted EPS expressed in sterling was 60.5p (+7%), or €0.835 (+20%) expressed in euros. The difference in growth rates between the sterling and euro EPS reflects the movement in exchange rates.
**Reported EPS:** Reported EPS was 46.4p (43.0p) for RELX PLC and €0.682 (€0.568) for RELX NV.
**Dividend:** We are proposing a full year dividend increase of +14% to 29.7p for RELX PLC and +5% to €0.403 for RELX NV. Following the UK government announcement that dividend tax credits will be abolished, the 2015 final dividends have been equalised without any UK tax credit gross up (see page 26 for details), removing the one remaining difference between the economics of the two shares.
**ROIC:** Return on invested capital increased from 12.8% to 13.4% at constant currencies. At reported exchange rates, ROIC was 12.7%.
**Net debt/EBITDA 2.2x on a pensions and lease adjusted basis (unadjusted 1.8x):** Net debt was £3,782m/€5,144m on 31 December 2015. The adjusted cash flow conversion rate was 94% (96%), with capital expenditure as a percentage of revenues unchanged at 5%.
**Portfolio development:** We completed 19 small acquisitions of content, data and exhibition assets for a total consideration of £171m, and disposed of assets for £73m.
**Share buybacks:** In 2015 we deployed £500m on share buybacks. In 2016 we intend to deploy a total of £700m, of which £100m has already been completed.
**Corporate structure simplification:** In 2015 we implemented a simplification of our corporate structure, and have presented our 2015 full year results on a consolidated, rather than combined, basis. The move to consolidated accounts has no impact on any figures, except for a minor positive restatement of the reported EPS for RELX NV.
**2016 OUTLOOK**
Trends in the early part of 2016 are consistent with 2015 across our business, and we are confident that, by continuing to execute on our strategy, we will deliver another year of underlying revenue, profit, and earnings growth in 2016.
As of 07:41 GMT, Thursday, 25 February, Reed Elsevier plc share price is 1,217.00p.

About the author

Farquar McIntosh
Farquar McIntosh began his career in metals trading, working for an established operator before going freelance as he still earns his crust as well as contributing to iNVEZZ's journalist team.

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