By Abhirup Roy
Feb 28 Business events organiser UBM Plc
reported a 10 percent rise in full-year profit as income from
several big events in China and Europe outweighed the impact of
a stronger pound.
UBM's shares rose nearly 5 percent in early trading on
Friday, making the stock one of the top percentage gainers on
the FTSE-250 Midcap index.
The British company, which earns more than 90 percent of its
revenue in currencies other than sterling, said it expected
underlying growth in its core events business this year to be in
line with 2013.
This year will be a "down year" for the company, which
operates on a biennial cycle. Most of its big exhibitions, trade
shows and conferences occur every second year.
UBM, which also owns PR Newswire, a service used by
companies to send announcements, said that expansion in China
and other markets this year would offset "cyclical pressure" on
its established shows and venue constraints at some big events.
Outgoing Chief Executive David Levin said a combination of
big events in Hong Kong, Shanghai and Europe contributed to a
strong second half of the year for UBM. China is the company's
biggest market for events.
The company's adjusted pretax profit from continuing
operations rose to 160.6 million pounds ($267.74 million) for
the year ended Dec. 31 from 146.1 million pounds a year earlier.
Underlying revenue from continuing operations rose 3.7
percent to 793.9 million pounds. Underlying revenue from its
events business, which accounts for nearly 60 percent of total
revenue, rose 6.3 percent.
"What makes this more positive is that these results were
delivered when there is likely to have been a nasty FX headwind
impact in Q4," Liberum analysts wrote in a note.
Currency volatility will continue to weigh on UBM's earnings
this year. The company said it had begun 2014 with a "notably
strong foreign exchange headwind" relative to last year.
UBM generates the majority of its revenue from the United
States. Sterling gained more than 8 percent against the dollar
in the second half of last year.
"Currency could have a very big impact on the reported
financials for the year," Chief Financial Officer Robert Gray
JPMorgan Cazenove analyst Mark O'Donnell reduced his 2014
earnings per share estimate for the company by 2.8 percent due
mainly to the foreign exchange impact. He maintained his
"neutral" rating on the stock.
Analysts said the outlook for UBM would also depend on the
strategy of Tim Cobbold, who will join the company as chief
executive in May from currency printer De La Rue.
Levin, who joined UBM in 2005 and has rebuilt the group to
focus on events and PR Newswire, will step down on March 1.
UBM raised its final dividend to 20.5 pence from 20 pence a
The company's shares were up 3.7 percent at 726 pence at
1045 GMT on the London Stock Exchange.