On an exciting day this month, Relx entered the top ten companies of the elite FTSE 100 index.
The fame was short-lived. The next business day it was overtaken by the smoking giant British American Tobacco.
But it was a moment of celebration for the bosses of one of the top-performing blue-chip companies that most people have never heard of – even if it is a staple for many big-city investors.
While it may not be a household name, Relx is a £54bn company and one of the few to have been a member of the Footsie since its founding in 1984.
It is better known by its former name Reed Elsevier, which was created in 1993 from the merger of the British specialist magazine and book publisher Reed International with the Dutch science publisher Elsevier.
In 2015, the company changed its name to Relx – pronounced “Rel-ex” – and the publishing business went digital.
The company’s responsibilities also include providing huge amounts of data to companies, selling software and holding global conferences.
Every doctor and lawyer will have read important articles received about Relx.
Others may know it for its massive exhibitions such as the international real estate event Mipim or MCM Comic Con, a mecca for superhero and sci-fi fans that usually involves a lot of dressing up.
Relx has been the best performing stock in the blue chip index since 2012.
Anyone who invested £1,000 in the shares 35 years ago – when detailed records began – would have a share of £11,440 today.
A £1,000 investment in the wider Footsie would be worth just £4,165.
Relx is also a major dividend payer. If all the payouts had been reinvested, that £1,000 would be worth around £35,860, according to Steve Clayton, head of equities at investment platform Hargreaves Lansdown. The company’s history dates back to a newsprint business founded in 1895 by Albert E. Reed. It was only in the 1970s that the company moved into the publishing sector and later gave up the manufacturing part of the business.
Relx’s greatest strength has been moving with the times, exiting underperforming or peripheral parts of its business and adopting new technologies.
The company employs more than 5,000 software developers and was one of the first adopters of artificial intelligence (AI). A trading update for the third quarter of this year last week showed sales were up eight percent so far in 2023. Half-year results showed profits rose 12 percent to £1.35 billion.
Inconspicuous, highly paid Swede at the top
Unremarkable: Erik Engstrom
The inconspicuous but very well-paid boss of Relx is the Swede Erik Engström.
The 60-year-old Harvard MBA has led the company since 2009 and was previously head of Elsevier.
He has earned more than £100 million since taking over at Relx.
Last year alone he earned £8.2 million, most of it through various bonuses and share awards.
The company defends its wages. Shareholders had little objection – during his tenure the share price rose from around 465p to over 2,800p.
Engstrom shuns the spotlight in favor of boasting that Relx has grown fivefold under his leadership.
Clayton said one of the secrets to its stock market success was that it was a “reliable dividend payer.”
“Although it has a long history, it is still a very modern company that has transitioned very successfully into the digital age,” he added.
Conferences and trade shows were affected by the pandemic, but Relx’s events division exceeded some analysts’ expectations.
Roddy Davidson, media analyst at financial services group Shore Capital Markets, said: “Events and exhibitions have really bounced back strongly post-Covid.”
“There were some questions about whether people would come back in person [events].
“I think we can clearly see that this was not the case.”