UBM Reports Events Margin of Nearly 30 Percent in First Half
Revenue for the first half reported at just over $500 million, with most of it coming from events.
UBM, the giant media company that's adopted an "events first" strategy in recent years, reported revenues for the first half of 2016 at just over $500 million, with by far the largest chunk—$405.8 million—coming from its events business.
In an interim earnings report released this morning, the company reported that revenues were up by 8 percent thanks to a "currency tailwind," and up by a much smaller 1 percent on an underlying actual basis for continuing businesses. The events portfolio produced a profit margin of nearly 30 percent, with $120.7 million in profit on the $405.8 million in revenue.
The company also paid a major special dividend to shareholders, thanks to the divestment in June of PR Newswire to Cision for $841 million.
“The most important thing happening from a strategic point of view is the final step in transforming UBM from what it was into a focused events group,” UBM CEO Tim Cobbold told Folio:. “And that was with the completion of the sale of PR Newswire, we were able to do that in a way that allowed us to return half of the proceeds to shareholders, and we retained a similar sum for investments in the events business.”
“We have always said there is margin upside potential in UBM. That is still the case. It doesn’t represent a peak point in my view. There’s still a lot of room for us to improve,” Cobbold says.
Aside from the events business, UBM’s digital and print properties brought in $97 million in revenue and produced $16 million in profit, for a much lower margin of 16.4 percent. Print margins were down by 2 percentage points from the first half of 2015, but margins were up in all other categories.
Around 70 percent of UBM's revenues were generated in U.S. dollars and dollar-pegged markets, according to the report, and less than 10 percent were from the U.K. This also gave the company a slight bump from the Brexit-motivated rise of the USD.
Moving forward, Cobbold says UBM will continue shuttering and selling assets, like Electronics Media, that don’t fit with their events-first portfolio, though some print and digital properties will remain.