Wednesday, 29 July 2009

Datamonitor boosts profits margins

(By Richard Holway 9.00am Wednesday 29th July 09) Poor old Informa is really suffering in this economic climate - see FT today Informa tumbles and warns on outlook. As Prime Minister MacMillan once said when asked what he feared most, so Informa could equally reply "Events, dear boy, Events".

But it's their Datamonitor division which most interests us (and a number of our readers) as they own Ovum, Butler, Orbys etal (although we are still unsure if the much trailed new rebranding has taken place). Informa's results yesterday said that Datamonitor had boosted operating profits by 23% to £53.8m. Revenues were up 5% at £185.6m - but only 1% organically. Datamonitor says that 80% of clients renewed their contracts - although we would expect a number of those would be at a reduced level.

But, let's face it, a 30% operating margin is pretty impressive. Mike Danson would be proud! But whether you can keep quality at the highest levels AND make these kind of increased margins in today's harsh climate is questionable.

Anyway, it really does look as if Danson made the wisest of moves selling Datamonitor in 2007. (See my 21st July 09 post The return of Mike Danson.) When he sold Datamonitor in 2007, Informa shares were over 600p - today they are 237p.

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