Oil prices, China drag Euromoney in first quarter

Low oil prices and jitters over China dragged revenues down during the first quarter for Euromoney, with the company updating the market on Thursday.

The FTSE 250 online information and events group said that, since its full year results released on 19 November 2015, trading had continued largely in line with the board's expectations.

"As anticipated in that announcement, the challenging market conditions and revenue trends experienced in the second half of FY15 have continued into the first quarter of FY16", the board said in a statement.

Euromoney said its headline revenues for the three months to 31 December 2015, after adjusting for sold businesses, were down 4%, while underlying revenues - excluding the impact of currency movements - fell by 6%.

Its subscription business experienced a 2% increase in underlying revenues, however, driven by the group's businesses serving the asset management sector, particularly institutional investor memberships.

"The impact of weak energy prices, particularly oil, has continued to hurt delegate revenues, in particular those from our training business which rely heavily on banks and governments in energy-dependent economies, many of them in emerging markets", the board said.

The company's decline in advertising revenues, which it said were particularly bank-dependent, were consistent with what it described as the long-term structural decline being experienced in print advertising.

Euromoney had net cash reserves of £30.3m at the end of the period, an increase of £12.6m since the year-end.

"Cash generation remains strong, although the first quarter is traditionally the one with the lowest operating cash flows because of the payment of annual profit shares and other incentives in December", the board said.

Euromoney had committed to a final dividend of 16.4p per share for FY15, and this was due to be paid on 11 February pending shareholder approval at the company's annual general meeting on Thursday.

"The challenging financial markets, and the weakness in the oil price and uncertainty over China in particular, are expected to continue to provide headwinds to the group's activities in the banking and commodities sectors, which account for approximately two thirds of the group's revenues", Euromoney's board said.

"However, on a more positive note, the weakness of the sterling should provide some protection against this difficult market backdrop", it concluded.