INDEPENDENT ORGANISERS large , attractive events and ( logically at least ) it should appeal to an acquisitive PE house which did not mind taking on the two big retail shows . Its apparent value is relatively low compared with its projected profits for 2023 of £ 32M and , being publicly quoted , anyone could openly bid for it if they were so inclined . The share price jumped by 10 % in the days around the announcement – which one can take as good news .
Price equity ratios of quoted media companies There are now very few media companies quoted in London or New York – I have picked out the very few that are easily recognizable in the chart “ Price Equity Ratios ”. There are so few that they don ’ t tell us too much – though Reed Elsevier ’ s and Future ’ s both suggest very strong companies with a high expectation of future growth . Generally , the highest P / E ratios are seen with the companies where investors expect profits and dividends to keep rising year after year . There is a certain fuzziness in P / E ratios because they are backward looking and do not account for recent trading circumstances – for instance , at the time of writing , Future has a very high P / E of 25 but its share price fell 61 % between December 2021 and December 2022 . So , as with all financial information , take care with P / E ratios and what they might appear to imply .
I have included Emerald , Informa and Hyve in this chart but stress that the usual sources of information such as the FT do not provide an estimated P / E ratio for these companies . This is because the recent historical results for all three companies ( i . e . 2021 ) show a loss which was a result of Covid . There is therefore no comparison which can yet be made year on year to provide a “ reasonable ” P / E rating and the numbers I have suggested are simply my own rough and ready calculations from what information is available publicly .
Buy on the rumour , sell on the news There is an old saying in the market – buy on the rumour , sell on the news . It seems to me that the “ rumour ” of the trade show business returning to 2019 levels should already be well into the market , even if ( as Informa ’ s numbers show ) the “ news ” has yet to really make much difference . I would have expected by now that the share prices of the three quoted companies would have risen in response to this . This is more the case with Emerald and Hyve – their debt levels shouldn ’ t change too much so any increase in profits will go directly to the holders of the equity / shares . The gearing ( mathematical multiplication ) for this is very strong indeed and the lack of movement in their share prices seems to be a trade show version of the dog not barking .
Price equity ratios of quoted companies - Dec ‘ 22
The three trade show companies are simple estimates based on available info
As a shareholder , if I were to fall for an optimistic conclusion , it would be that the equity markets are behind our business and are basically paying attention to projections for RX and Informa . Not a great deal of attention is paid to trade shows ( as I wrote a few months ago , Microsoft or Apple could buy up all of the world ’ s trade shows for an amount less than one fiftieth of their total worth and barely create two paragraphs of comment in the Wall Street Journal ).
There ’ s nowhere else to go for these projections So very few people are paying attention ( this is probably the only article on the subject to be seen anywhere this year ). It is now reasonable to assume that trade shows and conferences will grow back to where they were in 2019 and , in the case of a very powerful , cash rich company like Informa , quite possibly well beyond . If investors believe that to be true , then , as more good news comes out from Informa , they should put their money where their thoughts are . As a shareholder myself I must refrain from making predictions , but my investments in quoted trade show companies have bought the H R Owen Bentley salesmen much joy in the past . So don ’ t blame me if Informa goes to 900 next year .
That being said , China remains the big question mark – plus my usual advice at this point : “ No one knows anything much .” EN
Spring — 65 EN