MARKET REPORT: Exhibitions and events organiser Informa goes cap in hand to investors to raise as much as £1bn to weather coronavirus pandemic
Exhibitions and events organiser Informa has gone cap in hand to investors to raise as much as £1 billion as it tries to weather the coronavirus pandemic.
The FTSE 100-listed group turned to the emergency share placing after admitting the impact of the outbreak was ‘progressively deeper and more far-reaching’ than it first thought in March.
The company was still hammering out the price of the 250m shares being offered to its institutional backers last night, though they are expected to be around 400p a pop. Informa generates around two-thirds of its turnover from organising more than 500 in-person – and often international – events such as the World Tea Expo and the Monaco Yacht Show.
No events are going ahead this month, shows worth around £460m of revenue have been postponed and one of its planning scenarios sees a ‘reduced level of activity’ in the exhibition arm continuing into the third quarter.
Around half of the world is under some kind of lockdown but, increasingly, firms are worried about how long social distancing measures will need to stay in place once stricter rules are relaxed. Industry events would still be non-starters under many measures – and whether or not companies can afford to attend costly exhibitions will come into question the longer the slowdown lasts.
As well as the fundraising, Informa has axed its dividend, announced cuts to staff salaries and cut discretionary spending. It is hoping to lop off a significant chunk of its debt, taking the pile from £2.4 billion to around £1.4 billion. Informa’s plans cheered investors, with shares rising 4.9 per cent, or 20.6p, to 437.4p on the news.
Informa wasn’t the only firm getting on the market’s good side. Housebuilding heavyweight Barratt Developments climbed 6.4 per cent, or 27.5p, to 460.8p as it furloughed 85 per cent of its staff through the Government’s job retention scheme and bosses at several levels of the business agreed to an open-ended 20 per cent salary cut. It finished building 11,713 homes from the start of the year to April 12, up from 10,954 on the same period of last year, but work is now expected to grind to a halt.
Pest controller Rentokil was also in favour, rising 4.4 per cent, or 17.1p, to 409.6p after reporting that firstquarter revenues rose 4.4 per cent to £634m. The group, which has trained 7,000 staff for deep cleaning services, has put in place a raft of cost-cutting plans including laying off staff and cutting board members’ pay by 35 per cent.
It expects a rocky second quarter while many of its markets are in lockdown. Homeware group Dunelm got a 3.8 per cent boost, rising 31.5p, to 857p, after it became the latest retailer to resume online trading and said it was re-tooling a curtain factory to make medical gowns for NHS staff.
Chief executive Nick Wilkinson has also agreed to take a 90 per cent pay cut for three months while it seeks a Government-backed loan. The wider stock market steadied after a two-day slump following the long Easter weekend, with the FTSE100 up 0.55 per cent, or 30.78 points, to 5628.43 and the FTSE 250 up 0.20 per cent, or 31.01 points, to 15378.57.
The Government gave the green light to a ventilator design that engineers Meggitt (up 2.3 per cent, or 5.7p, to 249.1p) and Rolls-Royce (down 0.3 per cent, or 0.9p, to 309.1p), and a wider consortium, have been working on, allowing them to go into production.
But oilfield services group Petrofac tumbled by 14.7 per cent, or 27.3p, to 157.85p after the Abu Dhabi National Oil Company (Adnoc) terminated £1.3 billion worth of contracts it awarded to the company’s Emirati arm for work on a big gas development project.