Informa/business events: yesterday’s schmooze

China has largely reopened for business. Informa, a UK-listed events organiser and publisher, is betting the rest of the world will follow suit this summer. That prediction of normality is optimistic. Physical events may have resumed in parts of Asia. They remain rare elsewhere.

That is a problem for Informa. Two-thirds of its revenues once came from gatherings such as the Fort Lauderdale International Boat Show. Bringing together thousands of people is tough in a pandemic. Even where physical events are permitted, people are reluctant to attend.

There has been a surge in online events, fuelled by unspent corporate marketing budgets. Informa has joined in the scramble. But the hustle, bustle and, more importantly, the deals of a physical trade show are difficult to replicate digitally. An expected two-fifths decline in Informa’s revenues last year testifies to that.

Cost cuts of £600m should leave the company well placed when a recovery eventually comes. The savings target has raised hopes margin growth can outpace revenues in coming years. Informa expects adjusted operating profits in 2020 to be £270m — less than half the previous year.

Shares trading at 2016 levels are priced for disappointment. Investors are sceptical on the outlook for business events. Conference participants are willing to pay high fees only if they foresee a decent return on the investment. The main input into that calculation is a boost to short-term sales from taking part.

Digital events sometimes work as well as the physical kind. But video conferencing is, for the moment, an awkward compromise. Technology is cranky — witness the speakers who vanish mid-sentence when their WiFi packs up — chance interactions with clients are sparse and trust is harder to establish.

Analysts do not expect group revenues to return to 2019 levels until 2025, according to Refinitiv. Operating profits are expected to surpass last year’s as early as 2022. The latter forecast depends on physical events returning in full force this year, which is unlikely. If only there was a trade show Informa could attend in search of a solution.

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