Bigger impact, slower recovery Informa has announced today that it has seen a bigger than initially expected impact from Covid-19, and that the recovery is likely to be more gradual than initially planned. On trading, note the significant impact of the crisis on Events in Q1, with no large Events planned for Q2 or much of Q3 now. The postponement programme has expanded, with £460m now rescheduled into the last 2 months of FY20 and £150m of rephasing/cancellations – management note that venues are starting to re-open in China, but that the process is gradual (with a focus on domestic exhibitors first, c75% of total). The Taylor & Francis / Informa Intelligence divisions have continued to see robust performance given subscription demand for their data. Cost-cutting and equity issuance In response, on the cost front it has suspended dividend payments and implemented cost reductions to have an annualised impact of £130m in FY20. On the balance sheet, it has started discussions with US private placement holders to get a covenant waiver (3.5x) – we believe this should be feasible for a fee, and would remove the one overt potential issue. It has also applied to the relevant Bank of England scheme to be able to issue commercial paper and lastly launched a proposed placing of 19.9% (250m shares, or c.£1bn). Grasping the nettle Despite the radical measures announced today, fundamental demand for Informa’s businesses should remain strong into FY21 and these actions should allow investor focus to switch to the value that the company can generate once the crisis eases.