Friday newspaper share tips: Confidence over Informa's future earning

The Times’ Tempus is confident about Informa’s future and the ability to raise earnings again, though acknowledged some investors might be tempted to take profits.

The business intelligence, exhibitions, events and academic publishing group celebrated its 2015 results on Thursday, revealing some good numbers as a result of the company's renewed focus and restructuring over the 12 months to 31 December.

It described the year as one delivering improved revenue, profits, earnings and free cash flow. Revenue was up 6.6% to £1.21bn, with adjusted operating profit increasing by 9.5% to £365.6m.

Informa's statutory profit before tax was £219.7m, up from the prior year's statutory loss of £31.2m, giving the board confidence to announce an increased dividend of 20.1p, up 4.1% on the previous 12 months.

"Our results reflect the benefits of the growth acceleration plan, our cost discipline and the effective integration and operation of recently acquired businesses," said group chief executive Stephen Carter.

Tempus said the company is convinced there are more buying opportunities even if it looks like a seller’s market for exhibitions.

“There are other industries, such as fashion, where it is not yet represented.”

It also noted the market won’t be able to help the company much, given the macro-economic and geopolitical risks, “but there is more self-help to come”.

With the shares up on yesterday’s news and now where they were at the start of the year, Tempus said it presents investors with a difficult situation.

“Given the state of the markets, one might be tempted to take some profits.

“Optimists, of whom I am one, might stick around for the long term.”

The column also had a look at the results of FTSE 250 company Enterprise Inns after it posted a trading update on Thursday for the 19 weeks to 6 February.

The company said it had seen like-for-like net income in its leased and tenanted estate grow 1.6% as a result of stabilising rental income, growing income from beer sales and driven by the provision of operational support and commercial benefits to its publicans.

It also said its strategy implementation announced in May 2015 is on track.

The trading performance and expansion of its managed house operations is progressing in line with plans, and it expects to have in excess of 100 managed houses operational by 30 September.

Enterprise Inns said it is also growing its portfolio of quality commercial properties, with over 300 in its portfolio by the end of the financial year.

Chief executive Simon Townsend said the results give the group confidence that it is on track to meet expectations for the full financial year.

But Tempus wasn’t so sure about how easy the road ahead is, which includes selling a fifth of its 5,000-strong estate over five years, converting 800 to more profitable managed houses, and refinancing £350m of its bonds in two years.

“This may require a more benign bond market than is the case at present, though two years is a long time,” it said.

“Enterprise needs to find an awful lot of good managers to run that managed estate. It needs to find buyers for pubs that may not be in the best locations.”

With a “daunting” task ahead, Tempus advised to avoid for now.