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Cannes Lions Owner Makes Public Debut with £800m IPO

Cannes LionsAscential, the company behind the annual Cannes Lions Festival in the south of France took a brave step into volatile equity markets this week with an initial public offering (IPO) that valued the company at £800m.

The company was owned by Guardian Media, which owns one-third, and the VC firm Apax which owns the balance and the shares were floated at £2.00 a throw, raising around £183m in the process. Some 35% of the equity was issued as part of the IPO. The proceeds will be used by the Guardian to shore up its trust fund, which at the last count, amounted to £785m but which run out in less than a decade according to some reports. The Guardian will pocket around €29m of the proceeds from the share offering. This will still leave it with 23.3% of the company while Apax will control around 38.9%. Last month the Guardian announced plans to cut annual costs by £53.6m after revealing it expected to lose more than £50m in the year to the end of March 2016, more than double last year’s losses.

Guardian Media and Apax bought the business, then down as Emap, for £1 billion back in 2008. It then changed its name to Top Right Group and then last year to Ascential.

In the nine months to the end of December 2015, the company reported revenues of £246.5m, operating profits amounting to £28.5m while pre-tax profits amounted to £8.5m. By comparison, during the full year of 2014, group revenues amounted to £312.7m while operating profits amounted to £22.6m while it notched up a pre-tax loss of £5.4m.

The group has two distinct business units – conferences and events and business information/publishing.  Within the events division, the annual Cannes Lions is regarded as one of the trophy assets. According to the prospectus, the Cannes Lions generated a staggering £41 million in revenues in 2104, which accounted for 13% of the group’s total revenue and 30% of the revenues it generated from events that year. Last year Cannes Lions attracted over 9,500 paying delegates to its week-long content programme and had more than 40,000 entries from approximately 90 countries.

The group’s next biggest event is the Spring/Autumn fairs, which generated revenues of £30m in 2014 while its Money20/20 events in the USA generated £12.7 million. The company also owns the Dubai Lynx festival in addition to a number of other leading events operating in the fashion and retail space. Its publishing and business information division, meanwhile, includes magazines such as Drapers, Nursing Times and Retail Week, as well as the retail data company WGSN.