London-listed Relx has delivered a reassuring start to 2026, with management highlighting strong underlying revenue and profit growth across all four of its business segments.
In its trading update issued on Thursday (23 April), the company reported continued momentum driven by deeply embedded AI-enabled analytics and decision tools.
Business Services continues to be driven by Financial Crime Compliance and digital Fraud & Identity solutions, and strong new sales. The insurance segment also continues to be driven by further innovation and adoption of contributory databases and market-specific solutions, and strong new sales.
Matt Dorset, equity research analyst at Quilter Cheviot, described the update as ‘brief but reassuring’. He noted that management commented on a positive opening to the year, with the ongoing shift in business mix towards higher-growth analytics and decision tools supporting overall performance. The value of pairing proprietary content and data with AI was a key highlight.
Strong usage growth in core segments
Relx’s Scientific, Technical & Medical (STM) division, home to Elsevier, and its Legal business driven by LexisNexis, are both seeing notable usage growth in AI-enabled tools.
This performance reinforces Relx’s positioning as a potential winner from the AI revolution rather than a victim of disruption.
In Legal, tools such as Lexis+ AI have driven adoption, with enterprise subscriptions more than doubling in prior periods and features like agentic assistance and Protégé workflows expanding rapidly.
In STM, AI enhancements to platforms like Scopus and SciVal are helping researchers and healthcare professionals accelerate insights and decision-making.
Relx reiterated its full-year guidance, expecting another year of strong underlying revenue growth, with adjusted operating profit and earnings per share also advancing on a constant currency basis. The company continues to manage cost growth below revenue growth, supporting margin expansion.
This positive momentum builds on 2025 results, where the group delivered 7% underlying revenue growth to £9.59 billion and 9% growth in adjusted operating profit to £3.34 billion, alongside a 7% increase in the full-year dividend to 67.5p per share.
AI concerns
Despite the solid operational performance, Relx shares have derated sharply from peak valuations.
The stock now trades on approximately 17x 2027 earnings, a significant discount to US peers and down from highs around 31x.
Dorset views this derating as overdone, arguing that continued strong results support the investment case, even if it will take time to fully dispel broader AI-related fears in the market.
Adding to the appeal for income-focused investors, Relx offers a 7% distribution yield through a combination of dividends and share buybacks.
The company has signalled increased buyback activity, with plans for £2.25 billion in 2026 following £1.5 billion in 2025.
Unlike many traditional publishers or information providers facing potential disruption from generative AI, Relx appears to be actively leveraging the technology to enhance its moat.
By embedding AI into workflows across legal research, scientific discovery, risk assessment, and even exhibitions data analytics, the company is accelerating product development and increasing customer willingness to pay for higher-value solutions.
Leave a Reply