Relx PLC (ADR) ((RELX)) has held its Q4 earnings call. Read on for the main highlights of the call.
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During Relx PLC’s latest earnings call, the sentiment was largely positive, highlighting robust financial performance and strategic growth across key segments. Despite facing challenges like print declines and currency impacts, the company demonstrated strong financial metrics, increased dividends, and notable advancements in its strategic initiatives.
Strong Financial Performance in 2024
Relx PLC reported impressive financial results for 2024, achieving an underlying revenue growth of 7%, a 10% increase in underlying adjusted operating profit, and a 9% rise in adjusted earnings per share at constant currency. These figures underscore the company’s robust financial health and effective operational strategies.
Increase in Dividend and Share Buybacks
The company proposed a 7% increase in the full-year dividend to 63p per share, reflecting its commitment to returning value to shareholders. Additionally, Relx completed £1 billion of share buybacks, with plans to execute £1.5 billion more in 2025, showcasing a strong focus on shareholder returns.
Exhibitions Segment Growth
The Exhibitions segment exhibited a significant underlying revenue growth of 11%, attributed to an improved growth profile and favorable year-over-year comparisons. This segment’s performance highlights successful strategic initiatives and an enhanced event portfolio.
STM Article Submission and Publication Growth
Relx experienced substantial growth in the STM segment, with article submissions soaring by over 20% and publications increasing by 15%. This growth trajectory indicates the company’s strong position in the academic and scientific publishing domain.
Reduction in Leverage
The company’s leverage was reduced to 1.8x, slightly below its typical range, due to strong cash generation and improving EBITDA. This reduction highlights Relx’s focus on maintaining a healthy balance sheet and financial stability.
Print Decline in STM
Despite overall growth, the STM division faced higher-than-historical print declines, which impacted its growth rates. This challenge represents a shift in the industry dynamics towards digital formats, affecting traditional print revenue.
Currency Impact on Revenue and Profit
Currency fluctuations impacted Relx’s financial results, with total revenue growth at constant currency being 6%, while in sterling, it was 3%. The relative strength of sterling against the dollar and euro influenced these figures.
U.S. Government Research Funding Concerns
There are concerns regarding potential impacts from U.S. government funding cuts on research. While the direct impact on Relx is in the low single digits, the company remains vigilant about monitoring these developments.
Forward-Looking Guidance
Looking ahead, Relx expects continued robust growth in revenue and operating profit, driven by its strategic focus on higher-value analytics and decision tools. Key segments like Risk, STM, and Legal are anticipated to maintain their growth trajectories, supported by strong cash conversion and reduced leverage.
In summary, Relx PLC’s earnings call reflected a positive sentiment, driven by strong financial performance, strategic growth in key segments, and shareholder-focused initiatives. Despite facing some challenges, the company remains optimistic about its future prospects, underpinned by strategic investments and market positioning.
