ii view: Relx attempts to reassure on outlook for 2026

Full-year results to 31 December

• Adjusted sales up 7% to £9.59 billion
• Adjusted operating profit up 9% to £3.34 billion
• Final dividend of 48p per share
• Total dividend payment for the year up 7% to 67.5p per share
• Group net debt of £7.2 billion, up from £6.6 billion a year ago

Guidance:

• Expects 2026 share buybacks of £2.25 billion, potentially up from 2025’s £1.5 billion

Chief executive Erik Engstrom said:

"The continued evolution of artificial intelligence is enabling us to add more value to our customers, as we embed additional functionality in our products, and to develop and launch products at a faster pace, while continuing to manage cost growth below revenue growth. This evolution has been a key driver of our business for well over a decade, and will remain a key driver of customer value and growth in our business for many years to come."

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ii round-up:

RELX (LSE:REL) today reported annual results that matched City forecasts, with the provider of data services to industries such as insurance and legal profession offering reassurance on growth prospects. 

A continuing shift in the business mix towards higher growth analytics and decision tools is expected to support another year of strong underlying growth in revenue and adjusted operating profit. The total 2025 dividend payment was raised by 7% to 67.5p per share, with planned share buybacks of £2.25 billion in 2026, up from 2025’s £1.5 billion, which also underlined confidence in the outlook. 

Shares in the FTSE 100 company rose by 4% in UK trading having come into these latest results down by a third so far in 2026. The FTSE 100 is up by close to 6% year-to-date. Data and credit checking provider Experian (LSE:EXPN) has also fallen by close to a third this year. 

Relx adjusted sales for 2025 climbed 7% to £9.59 billion, pushing adjusted operating profit up 9% to £3.34 billion. 

Sales to the legal profession via the group’s Lexus service led customer sector gains, rising 9%. Those for risk or insurance along with exhibitions followed, gaining 8% each. Sales for Scientific, Technical and Medical (STM) related customers and including journals improved 5%. 

Adjustments to the business portfolio in 2025 came via five bolt-on acquisitions for a total of £270 million as well as two business sales. 

Group net debt as the year-end of £7.2 billion was up from £6.6 billion at the end of 2024, providing for net debt to adjusted profits (EBITDA) ratio of two times. 

Broker UBS reiterated its ‘buy’ stance on the shares, flagging an estimated fair value target price of £45.70. 

ii view:

Started in 1903, Relx today employs over 37,000 people with around 40% in North America. With offices in 40 countries, it serves customers in around 180 countries. Risk and STM generate most sales at around a third each, followed by Legal at a fifth, and Exhibitions the balance of a tenth. 

Geographically, North America leads with almost three-fifths of sales. Europe and the UK account for a further fifth, with the rest of the world the balance of one fifth. 

For investors, concerns about the impact of AI on Relx’s business over the longer term are unlikely to go away. The tough economic backdrop for corporate customers and the temptation to try and reduce subscription fees should not be ignored. Possible future cuts in US government funding for research also warrant consideration, while currency risks given its high proportion of overseas sales need to be considered.

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On the upside, customer need for data across industries such as risk and medicine will not go away, with Relx itself also looking to employ technology and AI to enhance its own services. An ongoing review of the group’s business portfolio continues to see small bolt-on acquisitions and sales made. Diversity of both operations and geographical regions exists, while more than ten years of consecutive annual dividend increases leaves the shares on a forecast yield of just over 3%. 

In all, the exact impact of AI on Relx and many other companies is tough to assess. Yes, the company has a foot in the door with varying industries and over 100 years of experience navigating change. But the shares have been something of a falling knife in recent months, and while the business is a good one, the pessimists remain a big influence on the shares right now. 

Positives: 

• Diversity in both business type and geographical region
• Growing dividend payment

Negatives:

• Uncertain economic outlook 
• Subject to currency headwinds

The average rating of stock market analysts:

Buy