The world’s largest events business Informa has lowered its revenue forecast, postponed more events and announced £600m of cost cuts, saying the effects of the pandemic had been “more volatile and far-reaching” than expected.
The FTSE 100 group’s original plan that business would pick up from September had “not been possible” outside China, it said, because of the resurgence in infections, increasing local lockdowns and extended travel restrictions.
In response, it has lowered its 2020 revenue forecast to £1.7bn from about £2bn in June.
In the six months ending June, it swung to a pre-tax loss of £801m, largely because of £1bn in lost sales from cancelled events. Last year, it recorded a £233m profit in the same period. Sales dropped 42 per cent to £814m.
Of the £600m budget cuts before the end of the year, £30m will come from compulsory redundancies.
“We do not wish to be here but we need to establish a floor that assumes the worst case and work up from there,” Stephen Carter, Informa’s chief executive, told the Financial Times. He said he did not believe the physical events business would never come back, but said the company was preparing itself for this scenario.
The decision to postpone roughly £400m of events scheduled for this year and early next year to later in 2021 had the advantage of “being on the other side of winter, on the other side of progress on a vaccine and on the other side of the US presidential elections”, Lord Carter said.
The reopening of China’s economy this summer gave some hope to the events industry but in Europe and the US, where Informa makes more than half of its sales, infection numbers and local lockdowns are on the rise.
Lord Carter said China was Informa’s only significant market that had “come back well”, adding that the group was planning to run 20 events there before the end of the year.
Analysts at Citigroup questioned whether postponing events to spring 2021 was “conservative enough” and said that “given the importance that events take place next year, we worry that further delays may be necessary”.
The company’s share price, which has halved since February, was down by 2 per cent in morning trading.
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