Equity prospects

RELX

Theo Wyld, Research Analyst

Price£14.61

52 week high-low£14.73–£10.45

Net yield2.23%

Hist / pros per28.1–21.1

Equity market cap£30,156m

RELX, or until recently Reed Elsevier, is a world-renowned information provider to specialist professional sectors. The Group is particularly active in Legal and Insurance, and Science and Medicine, where their publication, Gray’s Anatomy, is the benchmark anatomical guide used in hospitals and medical schools across the globe. They publish c.16% of the world’s scientific output.

The barriers to entry for competitors are considerable and RELX has done an impressive job over the years of growing their portfolio of niche products, ever increasing their database alongside defending hefty margins. Having begun as a print service for lawyers and scientists, the Group has done well to migrate the business online – which now makes up 70% of revenues.

RELX have also shifted slightly in what they provide, now positioning themselves more towards a service provider. They see an opportunity within the US to collate and cross-reference inter-state tax claims in order to detect fraudulent activity – something the IRS surprisingly does not do. This is a prime example of their rotation into value-add data analytics.

RELX is a quality company with steady flows of subscription revenues underpinning a healthy balance sheet.

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