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RELX to restructure into single parent company; 2017 profits jump

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RELX to restructure into single parent company; 2017 profits jump

RELX Group PLC is changing its current dual-parent holding company structure to a single parent company, with the group's headquarters in London.

The restructuring, called a "natural step for RELX" by Chairman Anthony Habgood, will be carried out through a cross-border merger between RELX PLC and RELX NV. Shareholders will receive one new RELX PLC share for every RELX NV share held. The simplification is subject to approval from both companies' shareholders and is expected to be implemented in the third quarter.

"There is no change to our strategy, and we expect the simplification to be cost and profit neutral for RELX Group, both before and after tax," CEO Erik Engstrom said on an earnings call. The single parent will be listed in London, Amsterdam and New York.

Company executives emphasized that Brexit was not a deciding factor in the restructuring move, Reuters reported. "It was simply a matter that the U.K. company is slightly bigger, it's a slightly bigger proportion of the total, and the group's headquarters has always been in London," CFO Nicholas Luff told reporters, Reuters noted. RELX NV is based in Amsterdam.

Earlier this month, Unilever Plc said it expects to complete the review of its dual-headed legal entity "shortly" as it announced its 2017 earnings. The company is likely to favor a single company structure as the move may ease deal-making and other strategic decisions, the Financial Times reported.

Meanwhile, RELX Group reported a 10% jump in adjusted net profit to £1.64 billion in 2017 from £1.49 billion in 2016. Adjusted earnings per share came in at 81.0 pence in 2017, up 12% from 72.2 pence in the prior year.

The business information and analytics provider reported that net profit increased 43% year over year to £1.66 billion in 2017. Revenue was £7.36 billion, 7% higher than the £6.90 billion posted in 2016.

The group proposed a 10% dividend increase for RELX PLC in 2017 to 39.4 pence per ordinary share from 35.95 pence in the prior year, and a 6% increase for RELX NV to 44.8 Euro cents per share in 2017, as compared to 42.3 cents per share in 2016.

For 2018, RELX Group intends to deploy a total of £700 million in share buybacks, of which £100 million has already been completed.