Relx increased its dividends and began a £1-billion share buyback in response to the strong demand for its artificial intelligence (AI) products from scientists and lawyers, and its continuing recovery in its events business.
In the fall, the company, which is one of the largest on the FTSE 100 list, began commercializing artificial intelligence (AI). The company also sells AI products to scientists and researchers.
Nick Luff said, “We have been using AI for a long time… but you could call it predictive AI. This is where you identify things in datasets to prevent fraud or verify identity.”
The AI generative models that have been developed in the last 18-months are a huge step forward. It’s the legal area that is really exciting. It assists [lawyers] in drafting contracts, letters and court submissions. It is useful for summarizing documents. It’s been reported that the software saves lawyers up to several hours per week.
Relx was formerly known as Reed Elsevier. It employs over 33,000 people across 40 countries.
The company has four divisions. These include risk, which provides services to businesses and banks in the areas of cybercrime, money laundering and other financial crimes, as well as legal, which houses LexisNexis’ database.
ScienceDirect is the largest scientific database in the world, with more than 2,700 scientific publications. It is owned by its largest division, Scientific, Technical and Medical.
The growing popularity of AI was a major factor in the growth of all three divisions. Relx’s smallest division, Exhibitions, including World Travel Market and the London Book Fair was the best performer. Profits will double in 2023.
Relx stated that the growth was “driven primarily by an increase in face to face activity across all geographies”, while audience levels continue to rebound post-pandemic. The revenue from exhibitions has risen above what it was at the end of 2019 and bosses are expecting further improvements in 2019.
Total group revenue increased by 7 percent to £9.16 Billion in 2023 from £8.55 Billion in the previous fiscal year. The reported pre-tax profits increased by 9 percent from £2.11 to £2.30 billion.
The final dividend to be paid mid-June has been raised to 41.8p. This is a 7.5% increase on the previous year. This means that for the whole of 2023, it will have distributed dividends totalling 58.8p a share. That’s an 8 percent increase over 2022.
Relx confirmed that it will buy back £1 Billion of its shares in this year. Most analysts expected a purchase of around £800 Million, which is the same amount as last year.
Luff, 56 said that “Relx generates a lot of cash.” It’s a business that doesn’t require much capital, so we generate a lot more cash. We use some of it on mergers and purchases… but we only have so much money to spend.
Steve Liechti is a media analyst with Numis. He said that the comments on outlooks suggested “modest increases” to consensus forecasts. Relx shares, which opened higher, ended the day lower by 30p or 0.9 percent at £33.06 valuing Relx at £63 billion.