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Informa dumps divident and launches up to £1bn emergency fundraising

Over 400 events, representing roughly £460mln of revenue, have had to be rescheduled due to coronavirus pandemic

Informa PLC (LON:INF) has cancelled its final dividend payment, is in talks with bondholders over a potential covenant waiver and is launching a £1bn equity fundraising as the coronavirus pandemic lays waste to its events and exhibitions division.

The FTSE 100 group said on Thursday it would run no events this month and that it expected the “reduced level of activity” at the division, which accounts for about two-thirds of revenues and profits, to stretch into the third quarter of the year.

Over 400 events, including more than 60 large events and around 350 smaller ones, representing roughly £460mln of revenue, have had to be rescheduled. Just over a month ago the total was 120.Over 400 events, including more than 60 large events and around 350 smaller ones, representing roughly £460mln of revenue, have had to be rescheduled. Just over a month ago the total was 120.

While re-bookings are happening, Informa said “it is now clear the path to the other side of COVID-19 will be more gradual and phased than initially anticipated”.

An important source of stability for the group is its subscriptions-related businesses, representing around 35% of revenue last year, have continued to grow “consistently”.

To further protect the business, costs have been cut by £130mln on an annualised basis, including salary scarifies by the management team and shelving of discretionary spending and recruitment.

As well as scrapping the 15.95p per share final dividend for 2019 that had been hiked only a month ago, Informa said discussions underway with US bondholders about waiving covenants due to coronavirus have been “constructive”.

With last reported level of net debt £2.6bn and an existing revolving bank facility of £900mln, plus another surplus facility of £750mln and the company has applied for the government’s Covid loan programme.

Also on Thursday agreed a placing and subscription of 250.3mln shares at a 4% discount of 400p to raise extra cash.

This accelerated bookbuild, of a size and price yet to be determined, forms “part of the series of enhanced measures to build stability and strength to the other side of COVID-19”, with all members of the management team intending to subscribe.

Analysts at Shore Capital said the actions being taken were “encouraging”, along with a backdrop of “resilient performances and cashflows” from the subscription businesses and signs of recovery in China “which is being used to formulate / test a phased return-to-business plan that will be applied to other territories”. 

“The situation remains very difficult to accurately predict, but the proposed placing (assuming successful) should provide a good deal of comfort to investors,” the analysts said, having placed their forecasts under review but noting the fall in the shares suggests “a good deal of downside risk is already being factored in”.

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