ii view: RELX expects another year of growth
A stock market valuation bigger than Informa and Pearson combined. This media giant is often overlooked.
24th October 2019 17:55
by Keith Bowman from interactive investor
A stock market valuation bigger than Informa and Pearson combined. This media giant is often overlooked.
Nine-month trading update
- Underlying revenue growth of 4% year-to-date compared to 3% in H1
- Reaffirms full-year outlook
ii round-up:
Supplier of information-based analytics and decision tools RELX (LSE:REL) reported positive trading in this nine-month, year-to-date trading statement.
Underlying revenue growth of 4% proved an improvement on the 3% seen in the first-half.
Sales growth of 6% at the Exhibitions division provided the core positive surprise. Market conditions remained good in Europe and the US and strong in China.
Insurance drove overall revenue upside of 7% at its Risk & Business Analytics division, while electronic revenues for its Scientific, Technical & Medical division, partly offset by declining print business, provided for a 1% revenue improvement.
Twelve assets purchased year-to-date for a consideration of £378 million outweighed the sale of assets for £62 million, while £50 million of its previously announced £600 million share buy-back programme now remains to be completed.
RELX, with a bigger stock market value than Informa (LSE:INF) and Pearson (LSE:PSON) combined, reaffirmed its expectation for another year of underlying growth in revenue and in adjusted operating profit.
The share price rose by more than 4% in afternoon UK stock market trading.
ii view:
RELX's diversity of business and global customer base offer core strengths, showcased by this latest update. Reassuring outlook comments pointing to another year of growth in key financial metrics proved the core positive.
For investors, a progressive dividend policy and eight consecutive years of growth is not to be over looked. However, a forward price/earnings ratio (PE) broadly in line with the 3 and 10-year averages offers little direction, or excitement.
Positives:
- Diversity in both business type and geographical region
- Progressive dividend policy
Negatives:
- Group net debt rose to £6.6 billion (£6.2 billion) at 30 June 2019
- Currency movements can impact
The average rating of stock market analysts:
Buy
These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.
Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.