Morning Note: Market news and an update from Informa.

Market News

US equity markets headed south last night – S&P 500 (-0.3%), Nasdaq (-0.8%) – as the global tech-driven rally showed signs of fatigue. The theme followed on into Asia this morning – Nikkei 225 (-0.1%); Hang Seng (-1.5%); Shanghai Composite (-0.1%) – as concerns persisted over China’s economy. Japan’s key inflation gauge accelerated to 2.5% in May, backing the case for the BOJ to consider raising rates in coming months.

The FTSE 100 is currently trading 0.2% lower at 8,253. Britvic is trading 15% higher (1,168p) after it confirmed an unsolicited proposal from Carlsberg regarding a possible 1250p cash offer. The proposal, the second made by Carlsberg, has been unanimously rejected.

The resurgence in London-listed stocks is getting a boost from fresh inflows and improved sentiment ahead of next month’s election. The proportion of global fund managers who are net-underweight on UK equities has fallen to the lowest in a year at 12%, according to a BofA survey.

Austan Goolsbee said the Federal Reserve will be able to cut rates if inflation continues to cool as it did last month. Former official James Bullard said the data raises hope of easing in September. The 10-year Treasury currently yields 4.25%. The dollar is trading near a 2024 high and is 159 versus the yen. Gold has rallied to $2,357 an ounce. The oil price slipped to $84.80 a barrel despite EIA data showing US stockpiles unexpectedly dropped last week.

UK Consumer confidence improved for a third month to its strongest level since before Russia’s invasion of Ukraine, GfK said. Retail sales also saw a bounce in May, up 2.9% versus forecast of +1.8%. This will revive speculation of a rate cut this summer. Sterling currently trades at $1.2656 and €1.1816.

Source: Bloomberg

Company News

Informa has this morning published a trading update to coincide with its Annual General Meeting. The business has continued to benefit from strong growth and the company has reiterated its full-year guidance. In response, the shares are little changed in early trading.

Informa is an international B2B Events, B2B Digital Services, and Academic Markets group. The strategy to focus on specialist markets, unique content, and internationalisation is delivering double-digit underlying revenue growth, margin expansion, and increasing profits and cash flows. The company is continuing to deploy AI technology across the business, delivering product benefits and operating efficiencies, including in research submission, data validation, and content summaries.

The proposed combination of Informa Tech’s Digital Businesses with NASDAQ-listed TechTarget is on track to complete in the final quarter of the year. This will create a leading B2B Digital Services business.

In the first five months of 2024, the group generated underlying revenue growth of 10.1%, reflecting strong operational performances across all businesses. The company benefits from a highly visible revenue stream, with more than two-thirds of revenue forward booked and predictable, being generated from exhibitions, subscriptions, and pre-booked sponsorship. The company has delivered year to date revenues of around £1.4bn, with a further £1bn of Subscriptions/Exhibitor revenue committed and visible in 2024, and strong Events rebooking into 2025.

In B2B market, strong demand for high quality, live B2B experiences combined with Informa’s investment in digital platforms and first party data is driving value growth and volume expansion in all major geographic regions. The business is on track for high single-digit underlying revenue growth in 2024.

In Academic Markets, consistent growth in global research output combined with Informa’s investment in author services and Pay-to-Publish platforms is delivering strong subscription renewals and open research acceleration. The business is on track for 5%+ underlying revenue growth in 2024.

The business generates strong free cash flow, with guidance for 2024 more than £720m, and disciplined capital allocation. The balance sheet is robust and the group’s credit ratings with Moody’s and S&P Global have been upgraded. Shareholder returns are being accelerated, with the 2024 share buyback programme recently expanded by 50% to £0.5bn, of which over £0.3bn has been completed to date.

Looking forward, the group has also confirmed its guidance for full-year underlying revenue growth (high single digit), revenue (£3,450m to £3,500m), and adjusted operating profit (£950m to £970m).

Source: Bloomberg