REG - Wilmington PLC - Financial results for the year ended 30 June 2022
22/09/2022 07:00
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RNS Number : 2268A Wilmington PLC 22 September 2022
22 September 2022
Wilmington plc
Resilient organic growth strategy delivering
Wilmington plc, (LSE: WIL, 'Wilmington' or 'the Group') the provider of data,
information, education and training services in the global Governance, Risk
and Compliance (GRC) markets, today announces its results for the year ended
30 June 2022.
Financial performance
FY22 FY21 Change
Revenue £121.0m £113.0m 7%
Adjusted PBT 1 (#_ftn1) £20.7m £15.0m 38%
Adjusted PBT margin 17.1% 13.3% 29%
Adjusted basic EPS 2 (#_ftn2) 18.66p 13.62p 37%
Net cash/(debt) 3 (#_ftn3) £20.5m (£17.2m) 216%
Total dividend 8.2p 6.0p 37%
Statutory profit/(loss) before tax £36.1m (£2.0)m
Statutory basic earnings/(loss) per share 37.46p (5.18p)
Highlights
· 13% organic 4 (#_ftn4) revenue growth driven by successful
digitalisation programme, new product investment and return to FTF 5 (#_ftn5)
events. Organic revenue growth 5% excluding FTF events.
o Training & Education division delivered 18% organic growth
o Intelligence division delivered 10% organic growth
· Annual recurring revenues grew by 5%, now 37% of Group revenues
· Adjusted profit before tax up 38% to £20.7m (2021: £15.0m)
reflecting continuing efficiencies of digital-first model
· Strategic sale of AMT for proceeds of £23.4m before completion
adjustments
· Net cash at 30 June 2022 £20.5m (2021: net debt £17.2m)
reflecting strong trading performance, effective cash management strategies
and sale of subsidiaries and property
· Strong cash conversion 6 (#_ftn6) of trading profits of 114%
(2021: 104%)
· Dividend up 37% in line with profits to 8.2p (2021: 6.0p)
· Investments driving strategic progress, future growth plans
enhanced by development of single technology platforms in each division
· Further embedded cultural ambitions, bolstered by commitments to
Race at Work Charter, Inclusive Employers and Disability Confident
· Committed Net-Zero Carbon Targets
Mark Milner, Chief Executive Officer, commented:
"These strong results demonstrate the success of our strategy with good
organic revenue growth, profits up by 38% and substantial cash generation. Our
new operating model is successfully embedded and has enhanced our position in
the large, expanding and rapidly evolving Governance Risk and Compliance (GRC)
market.
"The investments we have made in technology and data are accelerating our
growth ambitions as we develop single technology platforms in each division.
These investments are enhancing our position by creating a scalable portfolio
of assets that are strongly aligned to the dynamic and growing GRC market.
"We have a resilient business model with increasing recurring revenues. We
have seen good demand in all areas during the first quarter of the current
financial year, generating revenues and profitability in line with our
expectations."
The information contained within this announcement is deemed to constitute
inside information as stipulated under the Market Abuse Regulations (EU) No.
596/2014. Upon the publication of this announcement this inside information is
now considered to be in the public domain.
For further information, please contact:
Wilmington plc 020 7490 0049
Mark Milner, Chief Executive Officer
Guy Millward, Chief Financial Officer
Meare Consulting 07990 858548
Adrian Duffield
Notes to Editors
Wilmington plc is the recognised knowledge leader and partner of choice for
data, information, education and training in the global Governance, Risk and
Compliance (GRC) markets. Wilmington employs close to 1,000 people and sells
to around 120 countries. Wilmington is listed on the main market of the London
Stock Exchange.
Results and dividend
We have executed our strategy by growing our revenues and profits organically
in the markets we focus on; investing further in our business and the
technology it runs on; and by actively managing our portfolio of brands. The
business has demonstrated notable resilience, reflected by the strong
financial performance.
We have delivered organic revenue growth of 13% by growing all parts of our
business - a result enhanced by a return to face-to-face events this year.
Growth excluding events was 5% and reflects increased demand for our core
offering in all product areas. We have also achieved a five-percentage point
growth in recurring revenue 7 (#_ftn7) , which now represents 37% of total
revenue, driven by recent investments in sales and marketing capabilities.
The increased revenues and a continued focus on operational efficiency and
cost management resulted in adjusted PBT growth of 37.8% to £20.7m (2021:
£15.0m) and a corresponding improvement in adjusted PBT margin to 17.1%
(2021: 13.3%). This resulted in adjusted basic earnings per share being up
37.0%. We also are proposing a final dividend of 5.8p (total of 8.2p). The
Group moved into a net cash position (excluding lease liabilities) of £20.5m
(2021: net debt £17.2m) after the sale of AMT and a strong year of converting
profits to cash.
Strategy
Following a comprehensive review of our portfolio in 2021, our strategic focus
has been centred on building upon our already strong presence in the large,
growing and rapidly evolving GRC markets. These markets are underpinned by
strong macro drivers, particularly the increasing volume and enforcement of
regulation, complex geopolitical landscape, increased importance of ESG and
widespread adoption of technological and data-driven compliance solutions, all
of which align strongly to Wilmington's core offering.
At the heart of this focus on GRC markets is our ambition to help our
customers to do the right business in the right way, by providing a
complementary range of information & data and training & education
solutions. Our operating model mirrors this core purpose - our Intelligence
division provides specialist data and analytics that give customers the
detailed insight they need to understand the regulatory landscape, and our
Training & Education division delivers specialist training that equips
them to navigate it successfully.
As planned we sold AMT during the year and have now identified a buyer for our
small Spanish insurance business. We expect this divestment to be concluded in
the first half of the 2023 financial year.
Investment programme
Our investment approach across the Group continues to be to leverage our core
competencies to embed the unique characteristics that define our competitive
advantage into each of our brands. Our investment focus is on developing
single technology platforms in each of our divisions, providing the foundation
to accelerate our growth ambitions.
Our investment during this calendar year in the development of single
technology platforms will further differentiate us by providing unique
solutions to our customers. They will also enhance our growth potential as we
retain the agility to respond to their ever changing needs in the rapidly
evolving GRC markets. The implementation of single platforms in each division
will also allow us to efficiently expand our offering by creating a scalable
portfolio to enhance our growth potential.
Two of our brands in the Training & Education division are already
benefiting from our Digital Learning Platform, and we are on track to have the
remaining brands within the division fully deployed to this common platform by
December 2022.
Our Data Connect Platform, deploying Snowflake(®) technology has already been
rolled out to three of our Intelligence division brands, and will also be used
across the whole division by December 2022.
We continue to develop new products and identify clear organic growth
opportunities, with the future potential for effective roll out of these
greatly enhanced by our single platform approach. This strategy for maximising
the value of our technology and data assets, combined with our streamlined
operating model, provides the strong base to actively consider acquisition
targets which complement and/or extend our capabilities.
Responsible business
As we continue to help our customers to do the right business in the right
way, we are committed to investing in the initiatives that support our own
responsible business culture. The work we have done to further develop our
inclusive working environment has been bolstered by commitments to the Race at
Work Charter, Inclusive Employers and the Disability Confident Scheme. We have
also progressed our ambition to effectively monitor our performance in this
area by collecting richer diversity data around what makes our people unique
for the first time.
We have implemented the TCFD recommendations in full, concluding that we must
continue to monitor the impacts of climate change on the Group's risk profile,
but that the potential opportunities that may arise from the transition to a
low-carbon economy are well aligned to our core offering. We have committed to
Net Zero carbon targets, with an ambition of absolute zero in respect of scope
1&2 emissions by 2028, and net zero in respect of scope 3 emissions by
2045.
Current trading and outlook
The continued execution of our strategy over the past 12 months has positioned
the Group well to expand its presence in the GRC markets, and to drive future
growth.
We continue to manage the challenges caused by inflationary pressures, and the
proven resilience of the Group provides reassurance that it is well placed to
withstand the impact of ongoing macro-economic volatility and continue our
organic growth.
Trading has been encouraging in the first quarter, with good demand in all
areas generating revenues and profits in line with expectations.
Divisional review
Intelligence
2022 2021 Absolute variance Organic 8 (#_ftn8) variance
£'m £'m % %
Revenue
Healthcare 9 (#_ftn9) 31.1 28.4 10% 11%
Financial Services and Other 10 (#_ftn10) 23.2 21.3 9% 10%
MiExact 5.0 5.0 1% 1%
Discontinued 11 (#_ftn11) 0.3 2.1 (86%)
Total revenue 59.6 56.8 5% 10%
Operating profit 11.4 9.3 22% 22%
Margin % 19% 16%
Business model and markets
Wilmington offers a wide range of products and services through its Healthcare
businesses predominantly around the provision of market and customer
intelligence. The core of the data supplied comes primarily from publicly
available sources. The value generated by our services is based around its
collation, verification, combination with other complementary data sources and
then its ease of presentation and usage. In some areas we provide proprietary
analysis of the data and editorial comment which constitute our own
intellectual property.
Wilmington's Healthcare businesses operate mainly in the UK and France and
provide deep insight information on practitioners, facilities and treatments
in the UK and French health sector markets that enable suppliers into those
markets, including pharmaceutical companies, to understand and connect better
with their customers. Revenue is mainly earned through sales of discrete
packages of data or through subscription services for the ongoing provision of
information. Additionally, in the UK we publish the Health Service Journal
('HSJ'), the leading online publication in the UK for healthcare leaders, with
revenue generated through providing subscriptions to NHS foundation trusts,
Clinical Commissioning Groups and suppliers to the NHS.
The Financial Services/Other businesses operate in the Insurance, Pensions and
Compliance markets. These businesses provide a broad range of information
products and services with revenues generated primarily through subscription
but also sponsorship, lead generation and event attendance.
Identity & Charities rebranded as MiExact in the year as part of the
restructuring of its product set begun last year. The MiExact business
consists of a portfolio of data products including charity fundraising
information, and marketing data suppression tools. They include services that
are used by organisations to help prevent identify fraud. Revenue is
predominantly subscription based.
Trading performance
Overall Intelligence revenues grew 5%, 10% organically. All businesses within
the division grew organically. Recurring subscription revenues grew four
percentage points with strong retention rates.
Healthcare revenues grew 11% organically, helped by the return to face-to-face
events in the UK. Subscription revenues grew 7% with UK revenues up 12% and
French revenues up 4%. Competitive pressure continued to challenge growth of
Data revenue in some areas, but overall demand for these products was good.
Financial Services revenues grew 10% organically with growth in Axco,
Pendragon, Compliance Week and the held-for-sale Inese. Compliance Week and
Inese benefitted from the return to face-to-face events while subscriptions
grew well in Axco and Pendragon, where retention rates were above 99%.
MiExact revenues grew 1% after a slow first half was followed by a strong
final quarter. Subscription revenues had a retention rate above 95%.
Intelligence divisional operating profit grew by 22%, helped by its revenue
growth and continuing focus on its cost base. Operating margins improved to
19% from 16%.
Training & Education
2022 2021 Absolute variance Organic variance
£'m £'m % %
Revenue
Global 12 (#_ftn12) 23.2 22.4 3% 3%
UK and Ireland 13 (#_ftn13) 22.1 20.3 9% 9%
North America 14 (#_ftn14) 11.0 4.9 125% 122%
Discontinued 15 (#_ftn15) 5.1 8.6 (39%)
Total revenue 61.4 56.2 9% 18%
Operating profit 16.0 12.2 31% 32%
Margin % 26% 22%
Business model and markets
The Global business comprises two units that operate in Compliance markets.
The largest business, which was developed organically within Wilmington, is
the International Compliance Association ('ICA'). It is an industry body and
training business that we created in 2002 which offers professional
development and support to compliance officers predominantly in the financial
services sector. It has offices in the UK, Singapore, Malaysia and Dubai. ICA
primarily serves the financial services industry. The material for ICA courses
is developed by our own internal R&D team, and external specialists, and
we own the associated intellectual property.
Revenue earned by ICA is primarily training income complemented by
subscriptions paid by the professional members for their ICA accreditations.
The courses ICA run usually extend over several weeks or even months. They
traditionally mix distance learning with face-to-face sessions. The distance
learning element has transitioned to online and digital variants, and virtual
programmes have been offered in place of face-to-face sessions. To support the
move to virtual training in ICA a new Digital Learning Platform ('hub') is
being built - it was launched at the start of 2021 and further developments
are due for release in the coming months.
The other Global business, CLTi, earns revenue from running professional
development programmes for wealth managers. Wilmington has an international
presence, with centres in the UK, Europe, and Asia Pacific and consistent
investment in technology maintains the Group's competitive positioning. The
AMT training business was sold in December 2021.
The North America business, FRA, is predominantly events based. It serves the
US Healthcare and Health insurance markets and, to a lesser extent, the US
financial and legal service communities. The prime brand is the RISE series of
events that addresses the Medicare and Medicaid markets and is attended by
health plans, physician groups and solution partners. The flagship event is
RISE National which normally takes place in Nashville in March each year.
Revenue from the US events is generated from both sponsorship and delegate
sales.
The UK and Ireland business predominantly provides training for accountants in
practice and in business and individuals involved in the legal system,
including lawyers. It runs a mix of face-to-face, online and blended learning
for these communities. It provides training at various levels including
providing continuing professional development for existing qualified
accountants and, in the case of the legal profession, helping them train their
clients for interaction with the legal system. Additionally, it provides
technical support to accountancy firms which enables them to keep abreast of
technical developments and changes to regulation, as well as supporting them
to promote the services they then offer to their clients. The small Irish
reseller of training services (LaTouche) was sold in April 2022.
Mercia (accountancy) and Bond Solon (legal) are predominantly UK and Ireland
based, reflecting the country specific laws and accounting standards that
govern their profession. Revenue in the unit is earned through clients
subscribing for ongoing training support and other related activities over a
period of time (usually twelve months), with the rest through one-off course
attendance fees. Courses are typically single or half day events, and content
is a mix of owned and third-party intellectual property. Courses are delivered
either by in-house experts or a network of independent tutors who are paid per
course that they deliver.
The Law for Non-Lawyers market is strong, with good ongoing demand for
existing products as well as successful launches of new training courses.
Growth in the Accountancy market remains partially supressed due to the impact
of Covid-19, which compounded the challenges caused by continued consolidation
of smaller firms, some Brexit uncertainty and a relatively stable backdrop in
terms of tax legislation and accounting standards. Whilst not yet reaching its
pre-Covid size, the Accountancy market has returned to growth and demand is
expected to benefit from upcoming legislative change in the UK.
Trading performance
Training & Education revenues grew 9%, and 18% on an organic basis. All
five of the businesses within the division grew organically and recurring
subscription revenues grew 9%.
ICA revenues were up 3% as strong growth in the UK was offset by a drop in
Singapore revenues after the exceptional growth there in FY21, but FY22
Singapore revenues were still nearly double their FY20 level. CLTi grew 4% and
is focussed on increasing business in new territories in FY23.
Bond Solon saw double-digit growth in FY22, driven by a strong increase in
demand across the year. Mercia revenues grew 8% in the year, and despite still
being short of its pre-Covid position the business is on track to recover the
remaining shortfall.
In the US, FRA more than doubled revenues as events returned to being
face-to-face. Organic growth of 122% brought the business back to larger
revenues than the pre-Covid period (FY19) as demand from sponsors offset
slightly lower delegate attendance than FY19.
Overall divisional operating profit increased strongly by 31%, mainly due to
increased revenues and tight cost management. As a result, the operating
profit margin rose to 26% from 22% in FY21.
Financial review
Adjusting items, measures and adjusted results
In this financial review reference is made to adjusted results as well as the
equivalent statutory measures. The Directors make use of adjusted results,
which are not considered to be a substitute for or superior to IFRS measures,
to provide stakeholders with additional relevant information and enable an
alternative comparison of performance over time. Adjusted results exclude
amortisation of intangible assets (excluding computer software), impairments,
other income (when material or of a significant nature), and other adjusting
items.
Organic
2022 2021 Absolute variance variance
£'m £'m £'m % %
Revenue 121.0 113.0 8.0 7.1% 13.4%
Adjusted profit before tax 20.7 15.0 5.7 37.8% 42.5%
Margin % 17.1% 13.3%
Variances described as 'organic' are calculated by adjusting the revenue
change achieved year-on-year to exclude the impact of changes in foreign
currency exchange rates and also to exclude the impact of changes in the
portfolio from acquisitions and disposals.
Revenue
Group revenue increased 7.1% overall and 13.4% on an organic basis, the
overall increase reflecting £0.4m of foreign currency downside and the impact
of disposals.
Operating expenses before amortisation of intangible assets (excluding
computer software) and impairments
Operating expenses before amortisation of intangible assets (excluding
computer software) and impairments were £99.4m (2021: £96.4m) up £3.0m or
3.1%.
Within operating expenses, staff costs marginally increased £0.5m to £55.2m
(2021: £54.7m). This net increase reflects discretionary staff bonuses,
£1.4m higher than the prior year as a result of the stronger trading
performance in FY22. The increases were partly offset by salary cost savings
generated from a reduction in headcount post disposal of businesses. Share
based payment costs increased £0.6m due to an increased number of schemes due
to vest.
Non-staff costs increased by £2.5m to £44.2m from £41.7m in the prior year,
reflecting the increased revenue and the anticipated return of some
face-to-face delivery costs including venue hire.
Unallocated central overheads
Unallocated central overheads, representing Board costs and head office
salaries, as well as other centrally incurred costs not recharged to the
businesses, increased £0.2m year-on-year to £4.5m (2021: £4.3m).
Adjusted profit before tax ('adjusted PBT')
As a result of increased revenue and a continued focus on operational
efficiency and cost management, adjusted profit before tax, which eliminates
the impact of amortisation of intangible assets (excluding computer software),
impairments, other income and other adjusting items, was up 37.8% to £20.7m
(2021: £15.0m).
Adjusted profit margin (adjusted PBT expressed as a percentage of revenue)
also increased to 17.1% (2021: 13.3%).
Amortisation excluding computer software, impairment charge and other income
Amortisation of intangible assets (excluding computer software) was £2.4m
(2021: £3.4m). The decrease reflects certain historical assets being fully
amortised part way through the prior year.
The non-cash impairment charge of £0.6m relates to the impairment of assets
associated with an exercise performed to consolidate the Group's office space.
Other income represents the net gain of £16.3m from the disposal of AMT and
La Touche Bond Solon Training Limited, the £1.3m gain on disposal of two
buildings and their associated assets recognised as a result of the
consolidation of the Group's office space and £0.8m of one-off financing
activities associated with capital management.
Adjusting items within operating expenses
Adjusting items within operating expenses of £0.1m (2021: £3.0m) are those
items that are one-off in nature and which do not represent the ongoing
trading performance of the business.
Operating profit ('EBITA')
Operating profit was £37.0m (2021: loss £0.4m). The large increase is driven
by the impact of the other income items detailed above and a non-cash
impairment in 2021, along with strong revenue growth and effective cost
management during the year.
Net finance costs
Net finance costs were £0.9m (2021: £1.6m), primarily related to the
decrease in interest payable on bank loans and overdrafts following the
repayment of the revolving credit facility.
Profit before taxation
Profit before taxation was £36.1m (2021: loss £2.0m); a reconciliation of
this to adjusted profit before tax can be found in note 3.
Taxation
The tax charge for the year was £3.3m (2021: £2.5m) reflecting an effective
tax rate of 9.1% (2021: negative 125.0%). The substantial decrease in the
effective tax rate year-on-year reflects the nature of other operating income
and adjusting items, specifically the gain on disposal of businesses in 2022
which was not subject to corporation tax, and the impairment charge in 2021
which was not deductible for tax purposes.
The underlying tax rate which ignores the tax effects of adjusting items
remained essentially unchanged at 21.0% (2021: 20.5%).
Earnings per share
Adjusted basic earnings per share increased by 37.0% to 18.66p (2021: 13.62p),
due to the increase in adjusted profit before tax, a broadly flat underlying
tax rate and an essentially unchanged number of issued ordinary shares (see
below). Basic earnings per share was 37.46p (2021: basic loss per share of
5.18p) in the prior year, reflecting the increase in profit after tax.
Dividend
A final dividend of 5.8p per share (2021: 3.9p) will be proposed at the AGM.
This will give a full year dividend up 37% to 8.2p (2021: 6.0p) and dividend
cover of 2.3 times (2021: 2.3 times). If approved it will be paid on 28
November 2022 to shareholders on the register as at 28 October 2022 with an
associated ex-dividend date of 27 October 2022.
Balance sheet
Non-current assets
Goodwill at 30 June 2022 was £61.1m (2021: £65.8m) which was primarily due
to goodwill disposed of £6.2m for AMT. Additionally, a strengthening US
Dollar led to an increase in the Sterling value of the US Dollar portion of
the Group's goodwill.
Intangible assets decreased by £4.6m to £9.4m (2021: £14.0m) due to
amortisation of £6.1m, partly offset by additions of £1.3m within computer
software reflecting the Group's continued strategy to invest in the existing
businesses to fuel organic growth. Additions reflect the continued investment
in Wilmington's digital transformation.
Property, plant and equipment decreased by £2.4m to £6.9m (2021: £9.3m).
The decrease in purchased property, plant and equipment was attributable to
depreciation of £2.4m, £0.6m impairment mentioned above and assets
transferred to held for sale of £0.3m relating to assets held by Inese (see
disposal group held for sale below), partially offset by additions of £0.9m.
Deferred consideration receivable
The deferred consideration receivable balance of £1.7m (2021: £1.8m) relates
to the disposal of ICP in July 2018 with £1.5m recognised within non-current
assets and the remaining £0.2m recognised within current assets.
Disposal group held for sale
As at 30 June 2022, the disposal group classified as held for sale relates to
Wilmington Inese SL. The assets of the disposal group held for sale are
£1.5m, including £0.8m of cash and cash equivalents, and liabilities of the
disposal group held for sale are £1.3m.
Trade and other receivables
Trade and other receivables were £27.1m (2021: £28.7m). This decrease was
mainly due to the disposal of AMT and La Touche Bond Solon Training Limited,
which collectively comprised £1.4m within trade receivables in the prior
year.
Current tax asset
At 30 June 2022 the Group recognised an asset relating to current tax of
£1.3m (2021: £0.3m). The net asset position reflects a net repayment
position.
Trade and other payables
Trade and other payables decreased by £4.7m to £50.3m (2021: £55.0m).
Within this, subscriptions and deferred revenue increased by £1.3m or 4.3% to
£31.4m (2021: £30.1m) and trade and other payables decreased by £6.0m to
£18.9m (2021: £24.8m).
This increase in subscriptions and deferred revenue was driven mostly by the
growth of subscription services in the year and a year-on-year increase in
June sales. The decrease in trade and other payables was primarily driven by
the unwind of payroll tax payments and better payment practices for amounts
owed to suppliers.
Provisions
Provisions were £1.5m (2021: £1.8m), relating wholly to future committed
costs associated with the closed portion of the head office space.
Net cash, lease liabilities and cash flow
Net cash, which includes cash and cash equivalents, cash classified as held
for sale, bank loans (excluding capitalised loan arrangement fees) and bank
overdrafts, and lease liabilities was £13.0m (2021: net debt of £28.0m).
This significant net cash position is driven by a strong trading performance
delivering improved profits and effective cash management as well as a
significant cash inflow associated with the other income items mentioned
above.
Lease liabilities decreased to £7.5m (2021: £10.7m) which represents cash
payments in relation to contractual lease obligations, offset in part by
£0.3m of notional interest on lease liabilities reported within net finance
costs.
Cash conversion remained strong at 114% (2021: 104%).
Share capital
During the year 224,838 (2021: nil) new ordinary shares of £0.05 were issued
to satisfy the Company's obligations under the SAYE Plan.
During the year the Wilmington Group plc Employee Share Ownership Trust
('ESOT') purchased 170,097 ordinary shares for the purpose of future
settlement of employee share schemes. On 30 September 2021, 37,435 shares
vested under its Performance Share Plan settled via the ESOT. In April 2022
3,552 shares were used to satisfy the Company's obligations under the SAYE
Plan. At 30 June 2022, the ESOT held 403,782 shares (2021: 274,672).
Consolidated income statement
for the year ended 30 June 2022
Notes Year ended Year ended
30 June 2022 30 June 2021
£'000 £'000
Continuing operations
Revenue 4 121,028 113,027
Operating expenses before amortisation of intangibles excluding computer (99,407) (96,378)
software, impairment and adjusting items
Impairment of goodwill, intangible assets and property, plant and equipment 5a (597) (14,834)
Amortisation of intangible assets excluding computer software 5a (2,368) (3,400)
Adjusting items 5b (66) (2,970)
Operating expenses 6 (102,438) (117,582)
Other income - gain on disposal of subsidiaries 11 16,329 770
Other income - gain on disposal of business operations - 3,394
Other income - gain on disposal of property, plant and equipment 5a 1,289 -
Other income - net gain on financing activities 840 -
Operating profit/(loss) 37,048 (391)
Net finance costs 7 (928) (1,634)
Profit/(loss) before tax 36,120 (2,025)
Taxation 8 (3,295) (2,522)
Profit/(loss) for the year attributable to owners of the parent 32,825 (4,547)
Earnings/(loss) per share:
Basic (p) 10 37.46 (5.18)
Diluted (p) 10 36.98 (5.18)
Consolidated statement of comprehensive income
for the year ended 30 June 2022
Year ended Year ended
30 June 30 June
2022 2021
£'000 £'000
Profit/(loss) for the year 32,825 (4,547)
Other comprehensive income/(expense):
Items that may be reclassified subsequently to the income statement
Fair value movements on interest rate swaps, net of tax - 93
Currency translation differences 2,353 (1,732)
Fair value movements of net investment hedges, net of tax (193) 762
Other comprehensive income/(expense) for the year, net of tax 2,160 (877)
Total comprehensive income/(expense) for the year attributable to owners of 34,985 (5,424)
the parent
Items in the statement above are disclosed net of tax. The income tax relating
to each component of other comprehensive income is disclosed in note 8.
Consolidated balance sheet
as at 30 June 2022
Notes 2022 2021
£'000 £'000
Non-current assets
Goodwill 12 61,128 65,833
Intangible assets 13 9,427 14,000
Property, plant and equipment 14 6,876 9,277
Deferred consideration receivable 1,448 1,585
Derivative financial instruments - 57
Deferred tax assets 1,041 1,364
79,920 92,116
Current assets
Trade and other receivables 15 27,097 28,698
Deferred consideration receivable 250 250
Current tax assets 1,262 312
Cash and cash equivalents 19,785 7,374
Assets of disposal group held for sale 19 1,450 1,588
49,844 38,222
Total assets 129,764 130,338
Current liabilities
Trade and other payables 16 (50,258) (54,959)
Borrowings - (3,644)
Lease liabilities 17 (648) (2,356)
Provisions 18 (307) (461)
Liabilities of disposal group held for sale 19 (1,332) -
(52,545) (61,420)
Non-current liabilities
Borrowings - (20,430)
Lease liabilities 17 (6,862) (8,386)
Deferred tax liabilities (2,040) (2,054)
Provisions 18 (1,228) (1,381)
(10,130) (32,251)
Total liabilities (62,675) (93,671)
Net assets 67,089 36,667
Equity
Share capital 4,391 4,380
Share premium 45,553 45,225
Treasury and ESOT reserves (1,093) (701)
Share based payments reserve 2,141 1,390
Translation reserve 4,422 2,069
Retained earnings/(accumulated losses) 11,675 (15,696)
Total equity 67,089 36,667
Consolidated statement of changes in equity
for the year ended 30 June 2022
Share capital, Share based Translation Retained earnings/ (accumulated Total equity
share premium, payments reserve losses) £'000
ESOT shares reserve £'000 £'000
and treasury £'000
shares
£'000
At 1 July 2020 49,015 1,195 3,801 (10,605) 43,406
Loss for the year - - - (4,547) (4,547)
Other comprehensive (expense)/income for the year - - (1,732) 855 (877)
49,015 1,195 2,069 (14,297) 37,982
Transactions with owners:
Dividends paid - - - (1,829) (1,829)
Performance share plan awards vesting settled via ESOT 137 (241) - 104 -
ESOT share purchases (263) - - - (263)
Sale of treasury shares 15 - - - 15
Share based payments - 436 - - 436
Tax on share based payments - - - 326 326
At 30 June 2021 48,904 1,390 2,069 (15,696) 36,667
Profit for the year - - - 32,825 32,825
Other comprehensive income/(expense) for the year - - 2,353 (193) 2,160
48,904 1,390 4,422 16,936 71,652
Transactions with owners:
Dividends paid - - - (5,492) (5,492)
Performance share plan awards vesting settled via ESOT 84 (105) - 21 -
ESOT share purchases (371) - - - (371)
Sale of treasury shares 49 - - - 49
Purchase of treasury shares (154) - - - (154)
Issue of share capital 11 - - - 11
Issue of share premium 328 - - - 328
Save As You Earn options settlement - (180) - 152 (28)
Share based payments - 1,036 - - 1,036
Tax on share based payments - - - 58 58
At 30 June 2022 48,851 2,141 4,422 11,675 67,089
Consolidated cash flow statement
for the year ended 30 June 2022
Notes Year ended Year ended
30 June 2022 30 June 2021
£'000 £'000
Cash flows from operating activities
Cash generated from/(used in) operations before adjusting items 20 24,570 17,290
Cash flows for adjusting items - operating activities (342) (339)
Cash flows from tax on share based payments (4) 9
Cash generated from/(used in) operations 24,224 16,960
Interest paid (479) (1,196)
Tax paid (3,397) (2,697)
Net cash generated from/(used in) operating activities 20,348 13,067
Cash flows from investing activities
Disposal of subsidiaries net of cash 11 22,792 400
Disposal of business operations - 4,144
Deferred consideration received 250 250
Cash flows for adjusting items - investing activities (43) (151)
Purchase of property, plant and equipment (440) (1,047)
Proceeds from disposal of property, plant and equipment 3,493 103
Purchase of intangible assets (1,292) (1,969)
Net cash generated from/(used in) investing activities 24,760 1,730
Cash flows from financing activities
Dividends paid to owners of the parent (5,492) (1,829)
Issue of new shares 340 -
Share issuance costs (28) -
Purchase of shares by ESOT (371) (263)
Payment of lease liabilities (3,752) (2,530)
Cash flows for adjusting items - proceeds on disposal of interest rate swap 1,243 -
Fees relating to new and extended loan facility - (191)
Increase in bank loans - 2,000
Decrease in bank loans (21,198) (29,181)
Net cash used in financing activities (29,258) (31,994)
Net increase/(decrease) in cash and cash equivalents, net of bank overdrafts 15,850 (17,197)
Cash and cash equivalents, net of bank overdrafts at beginning of the year 3,730 21,426
Exchange gain/(loss) on cash and cash equivalents 205 (499)
Cash classified as held for sale 758 -
Cash and cash equivalents, net of bank overdrafts at end of the year 20,543 3,730
Reconciliation of net cash/(debt)
Cash and cash equivalents at beginning of the year 7,374 21,426
Bank overdrafts at beginning of the year (3,644) -
Bank loans at beginning of the year (20,960) (49,082)
Lease liabilities at beginning of the year (10,742) (13,121)
Net debt at beginning of the year (27,972) (40,777)
Net increase/(decrease) in cash and cash equivalents, net of bank overdrafts 16,813 (17,696)
Net repayment in bank loans 21,198 27,181
Exchange (loss)/gain on bank loans (238) 941
Movement in lease liabilities 3,232 2,379
Cash and cash equivalents at end of the year 19,785 7,374
Cash classified as held for sale at end of the year 758 -
Bank overdrafts at end of the year - (3,644)
Bank loans at end of the year - (20,960)
Lease liabilities at end of the year (7,510) (10,742)
Net cash/(debt) at end of the year 13,033 (27,972)
Notes to the financial statements
1. Nature of the Financial Statements
The following financial information does not amount to full financial
statements within the meaning of Section 434 of Companies Act 2006. The
financial information has been extracted from the Group's Annual Report and
Financial Statements for the year ended 30 June 2022 on which an unqualified
report has been made by the Company's auditors.
Financial statements for the year ended 30 June 2021 have been delivered to
the Registrar of Companies; the report of the auditors on those accounts was
unqualified and did not contain a statement under Section 498 of the Companies
Act 2006. The 2022 statutory accounts will be delivered in due course.
Copies of the Annual Report and Financial Statements will be made available to
shareholders shortly and printed copies will be available from the Company's
registered office at 10 Whitechapel High Street, London, E1 8QS.
2. Statement of accounting policies
The preliminary announcement for the year ended 30 June 2022 has been prepared
in accordance with UK adopted international accounting standards (UK adopted
IAS). The accounting policies applied in this preliminary announcement are
consistent with those reported in the Group's Annual Financial Statements for
the year ended 30 June 2021. There was no material effect from the adoption of
new standards or interpretations in the year ended 30 June 2022.
3. Measures of profit
Reconciliation to profit on continuing activities before tax
To provide shareholders with additional understanding of the trading
performance of the Group, adjusted EBITA has been calculated as profit before
tax after adding back:
• impairment of goodwill, intangible assets and property, plant and
equipment;
• amortisation of intangible assets excluding computer software;
• adjusting items (included in operating expenses);
• other income - gain on disposal of subsidiaries;
• other income - gain on disposal of business operations;
• other income - gain on disposal of property, plant and equipment;
• other income - net gain on financing activities; and
• net finance costs.
Adjusted profit before tax, adjusted EBITA and adjusted EBITDA reconcile to
profit on continuing activities before tax as follows:
Year ended Year ended
30 June 30 June
2022 2021
£'000 £'000
Profit/(loss) before tax 36,120 (2,025)
Impairment of goodwill, intangible assets and property, plant and equipment 597 14,834
Amortisation of intangible assets excluding computer software 2,368 3,400
Adjusting items (included in operating expenses) 66 2,970
Other income - gain on disposal of subsidiaries (16,329) (770)
Other income - gain on disposal of business operations - (3,394)
Other income - gain on disposal of property, plant and equipment (1,289) -
Other income - net gain on financing activities (840) -
Adjusted profit before tax 20,693 15,015
Net finance costs 928 1,634
Adjusted operating profit ('adjusted EBITA') 21,621 16,649
Depreciation of property, plant and equipment included in operating expenses 2,412 3,399
Amortisation of intangible assets - computer software 3,721 2,416
Adjusted EBITA before depreciation ('adjusted EBITDA') 27,754 22,464
4. Segmental information
In accordance with IFRS 8 the Group's operating segments are based on the
operating results reviewed by the Executive Board, which represents the chief
operating decision maker.
The Group's dynamic portfolio provides customers with a range of information,
data, training and education solutions. During the year the Information &
Data division was renamed to Intelligence. The two divisions (Training &
Education and Intelligence) are the Group's segments and generate all of the
Group's revenue. The Board considers the business from both a geographic and
product perspective. Geographically, management considers the performance of
the Group between the UK, Europe (excluding the UK), North America and the
Rest of the World.
a) Business segments
Revenue Profit Revenue Profit
Year ended Year ended Year ended Year ended
30 June 2022 30 June 2022 30 June 2021 30 June 2021
£'000 £'000 £'000 £'000
Training & Education 61,464 15,998 56,211 12,197
Intelligence 59,564 11,359 56,816 9,320
Group total 121,028 27,357 113,027 21,517
Unallocated central overheads - (4,506) - (4,302)
Share based payments - (1,230) - (566)
121,028 21,621 113,027 16,649
Impairment of goodwill, intangible assets and property, plant and equipment (597) (14,834)
Amortisation of intangible assets excluding computer software (2,368) (3,400)
Adjusting items (included in operating expenses) (66) (2,970)
Other income - gain on disposal of subsidiaries 16,329 770
Other income - gain on disposal of business operations - 3,394
Other income - gain on disposal of property, plant and equipment 1,289 -
Other income - net gain on financing activities 840 -
Net finance costs (928) (1,634)
Profit/(loss) before tax 36,120 (2,025)
Taxation (3,295) (2,522)
Profit/(loss) for the financial year 32,825 (4,547)
There are no intra-segmental revenues which are material for disclosure.
Unallocated central overheads represent central costs that are not
specifically allocated to segments. Total assets and liabilities for each
reportable segment are not presented; as such, information is not provided to
the Board.
b) Segmental information by geography
The UK is the Group's country of domicile and the Group generates the majority
of its revenue from external customers in the UK. The geographical analysis of
revenue is on the basis of the country of origin in which the customer is
invoiced:
Year ended Year ended
30 June 30 June
2022 2021
£'000 £'000
UK 64,320 61,999
Europe (excluding the UK) 25,809 23,304
North America 21,727 15,042
Rest of the World 9,172 12,682
Total revenue 121,028 113,027
Included within North America is revenue of £21,304,000 generated within the
USA.
c) Timing of revenue recognition
The timing of the Group's revenue recognition is as follows:
Year ended Year ended
30 June 30 June
2022 2021
£'000 £'000
Revenue from products and services transferred at a point in time 39,725 41,583
Revenue from products and services transferred over time 81,303 71,444
Total revenue 121,028 113,027
During the year the Group recognised £30,124,000 of revenue that was held in
deferred revenue at 30 June 2021 (2021: £31,465,000 related to amounts held
at 30 June 2020).
5. Profit/(loss) from continuing operations
a) Profit/(loss) for the year from continuing operations is stated after
charging/(crediting):
Year ended Year ended
30 June 30 June
2022 2021
£'000 £'000
Depreciation of property, plant and equipment - included in operating expenses 2,412 3,399
Short term and low-value leases 114 486
Amortisation of intangible assets - computer software 3,721 2,416
Non-adjusting (profit)/loss on disposal of property, plant and equipment (71) 2
Share based payments (including social security costs) 1,230 566
Amortisation of intangible assets excluding computer software 2,368 3,400
Adjusting items (included in operating expenses) 66 2,970
Adjusting item - gain on disposal of subsidiaries (16,329) (770)
Adjusting item - gain on disposal of business operations - (3,394)
Adjusting item - gain on sale of property, plant and equipment (1,289) -
Adjusting item - net gain on financing activities (840) -
Research and development expenditure credit (183) (290)
Impairment of goodwill, intangible assets and property, plant and equipment 597 14,834
Foreign exchange loss/(gain) 446 (24)
Fees payable to the auditors for the audit of the Company and consolidated 107 95
financial statements
Fees payable to the auditors and their associates for other services:
- The audit of the Company's subsidiaries pursuant to legislation 205 182
- Audit related other services 15 15
The gain on sale of property, plant and equipment included in adjusting items
relates to the gain on disposal of two buildings and their associated assets
on 31 August 2021.
b) Adjusting items
The following items have been charged to the income statement during the year
but are considered to be adjusting so are shown separately:
Year ended Year ended
30 June 30 June
2022 2021
£'000 £'000
Costs relating to strategic activities 66 1,128
Costs relating to the consolidation of office space - 1,842
Other adjusting items (included in operating expenses) 66 2,970
Impairment of goodwill, intangible assets and property, plant and equipment 597 14,834
Amortisation of intangible assets excluding computer software 2,368 3,400
Total adjusting items (classified in profit before tax) 3,031 21,204
The impairment of goodwill, intangible assets and property, plant and
equipment relates to:
Year ended Year ended
30 June 30 June
2022 2021
£'000 £'000
Goodwill - 9,873
Intangible assets - 1,516
Property, plant and equipment 597 3,445
Total adjusting items (classified in profit before tax) 597 14,834
The impairment during the year relates to the impairment of assets associated
with an office property, recognised as a result of an exercise performed to
consolidate the Group's office space.
6. Operating expenses
Year ended 30 June 2022 Year ended 30 June 2021
Cost of sales Administration Total Cost of sales Administration Total
£'000 £'000 £'000 £'000 £'000 £'000
Operating expenses before depreciation and amortisation 88,746 4,528 93,274 86,167 4,396 90,563
Depreciation of property, plant and equipment 2,412 - 2,412 3,399 - 3,399
Amortisation of intangible assets - computer software 3,721 - 3,721 2,416 - 2,416
Operating expenses before amortisation of intangibles excluding computer 94,879 4,528 99,407 91,982 4,396 96,378
software, impairment and adjusting items
Amortisation of intangible assets - databases 187 - 187 826 - 826
Amortisation of intangible assets - customer relationships 1,016 - 1,016 1,052 - 1,052
Amortisation of intangible assets - brands 660 - 660 1,016 - 1,016
Amortisation of intangible assets - publishing rights and titles 505 - 505 506 - 506
Impairment of goodwill, intangible assets and property, plant and equipment - 597 597 - 14,834 14,834
(note 5b)
Other adjusting items (note 5b) - 66 66 - 2,970 2,970
Operating expenses 97,247 5,191 102,438 95,382 22,200 117,582
7. Net finance costs
Year ended Year ended
30 June 30 June
2022 2021
£'000 £'000
Net finance costs comprise:
Interest payable on bank loans and overdrafts 748 1,437
Unwinding of the discount on royalty payments receivable (113) (139)
Notional interest on lease liabilities 293 336
928 1,634
8. Taxation
Year ended Year ended
30 June 30 June
2022 2021
£'000 £'000
Current tax
UK corporation tax at current rates on UK profits for the year 2,817 2,327
Adjustments in respect of previous years (870) 30
1,947 2,357
Foreign tax 969 993
Adjustments in respect of previous years - (21)
Total current tax 2,916 3,329
Total deferred tax 379 (807)
Taxation 3,295 2,522
Factors affecting the tax charge for the year:
The effective tax rate is lower (2021: higher) than the average rate of
corporation tax in the UK of 19.0% (2021: 19.0%). The differences are
explained below:
Year ended Year ended
30 June 30 June
2022 2021
£'000 £'000
Profit/(loss) before tax 36,120 (2,025)
Profit/(loss) before tax multiplied by the average rate of corporation tax in 6,863 (385)
the year of 19.0% (2021: 19.0%)
Tax effects of:
Impairment of goodwill, intangible assets and property, plant and equipment 113 2,818
Foreign tax rate differences 201 177
Adjustment in respect of previous years (870) 9
Other items not subject to tax (3,012) (230)
Effect on deferred tax of change of corporation tax rate - 133
Taxation 3,295 2,522
Deferred tax assets and liabilities are measured at the rates that are
expected to apply in the periods of the reversal.
The Company's profits for this accounting year are taxed at an effective rate
of 9.1% (2021: -125.0%).
Included in other comprehensive income are a tax charge of £nil (2021:
£22,000) and a tax credit of £45,000 (2021: charge of £179,000) relating to
the interest rate swaps and net investment hedges respectively.
The tax effect of adjusting items as disclosed in note 10 is a credit of
£1,050,000 (2021: £558,000).
9. Dividends
Amounts recognised as distributions to owners of the parent in the year:
Year ended Year ended Year ended Year ended
30 June 30 June 30 June 30 June
2022 2021 2022 2021
Pence Pence £'000 £'000
per share per share
Final dividends recognised as distributions in the year 3.9 - 3,399 -
Interim dividends recognised as distributions in the year 2.4 2.1 2,093 1,829
Total dividends paid 5,492 1,829
Final dividend proposed 5.8 3.9 5,070 3,415
10. Earnings/(loss) per share
Adjusted earnings per share has been calculated using adjusted earnings
calculated as profit after taxation attributable to owners of the parent but
before:
• impairment of goodwill, intangible assets and property, plant and
equipment;
• amortisation of intangible assets excluding computer software;
• adjusting items (included in operating expenses);
• other income - gain on disposal of subsidiaries;
• other income - gain on disposal of business operations;
• other income - gain on disposal of property, plant and equipment;
and
• other income - net gain on financing activities.
The calculation of the basic and diluted earnings per share is based on the
following data:
Year ended Year ended
30 June 30 June
2022 2021
£'000 £'000
Earnings/(loss) from continuing operations for the purpose of basic earnings 32,825 (4,547)
per share
Add/(remove):
Impairment of goodwill, intangible assets and property, plant and equipment 597 14,834
Amortisation of intangible assets excluding computer software 2,368 3,400
Adjusting items (included in operating expenses) 66 2,970
Other income - gain on disposal of subsidiaries (16,329) (770)
Other income - gain on disposal of business operations - (3,394)
Other income - gain on disposal of property, plant and equipment (1,289) -
Other income - net gain on financing activities (840) -
Tax effect of adjustments above (1,050) (558)
Adjusted earnings for the purposes of adjusted earnings per share 16,348 11,935
Number Number
Weighted average number of ordinary shares for the purposes of basic and 87,632,022 87,603,917
adjusted earnings per share
Effect of dilutive potential ordinary shares:
Future exercise of share awards and options 1,126,918 410,301
Weighted average number of ordinary shares for the purposes of diluted and 88,758,940 88,014,218
adjusted diluted earnings per share
Basic earnings/(loss) per share 37.46p (5.18p)
Diluted earnings/(loss) per share 36.98p (5.18p)
Adjusted basic earnings per share ('adjusted earnings per share') 18.66p 13.62p
Adjusted diluted earnings per share 18.42p 13.56p
For the year ended 30 June 2021, potentially dilutive share options were only
considered in relation to adjusted earnings per share as the Group made a
basic loss per share.
11. Disposals
In the year ended 30 June 2022 the Group disposed of the following subsidiary
companies:
Country Date of disposal Share/asset deal
Adkins & Matchett (UK) Limited UK December 2021 Share deal
Adkins, Matchett & Toy Limited USA December 2021 Share deal
Adkins, Matchett & Toy (Hong Kong) Limited Hong Kong December 2021 Share deal
La Touche Bond Solon Training Limited
Ireland April 2022 Share deal
The disposals were executed in line with the Group's strategy to simplify its
structure and to focus attention on businesses that operate in the GRC and
Regulatory Compliance markets. The subsidiary businesses were classified as
continuing operations until their respective disposal dates. In total the
Group recognised a gain on disposal of £16,329,000 presented within adjusting
items.
a) Disposal of subsidiary companies - Adkins & Matchett (UK) Limited,
Adkins, Matchett & Toy Limited and Adkins, Matchett & Toy (Hong Kong)
Limited, together referred to as 'AMT'
On 24 December 2021 Wilmington plc disposed of AMT for a net cash
consideration of £22,631,000 and recognised a gain on disposal of
£16,224,000. The disposal was executed by way of the sale of 100% of the
equity shares and as at the disposal date, the net assets of AMT were as
follows:
£'000
Goodwill 6,203
Property, plant and equipment 41
Trade and other receivables 898
Cash and cash equivalents 475
Trade and other payables (1,112)
Net assets disposed 6,505
Directly attributable costs of disposal 342
Recycling of deferred foreign exchange losses 35
Gain on disposal 16,224
Fair value of consideration 23,106
Satisfied by:
Cash and cash equivalents 23,106
23,106
b) Disposal of subsidiary company - La Touche Bond Solon Training Limited
On 22 April 2022 Wilmington plc disposed of La Touche Bond Solon Training
Limited for a net cash consideration of £161,000 and recognised a gain on
disposal of £105,000. The disposal was executed by way of the sale of 100% of
the equity shares. As at the disposal date, the net assets of La Touche Bond
Solon Training Limited were as follows:
£'000
Goodwill 34
Property, plant and equipment 9
Trade and other receivables 106
Cash and cash equivalents 78
Trade and other payables (138)
Net assets disposed 89
Directly attributable costs of disposal 22
Recycling of deferred foreign exchange losses 23
Gain on disposal 105
Fair value of consideration 239
Satisfied by:
Cash and cash equivalents (net of working capital adjustment) 239
239
12. Goodwill
£'000
Cost
At 1 July 2020 110,597
Disposals (1,192)
Exchange translation differences (1,309)
At 30 June 2021 108,096
Disposals (8,935)
Exchange translation differences 1,532
At 30 June 2022 100,693
Accumulated impairment
At 1 July 2020 32,721
Disposals (331)
Impairment 9,873
At 30 June 2021 42,263
Disposals (2,698)
At 30 June 2022 39,565
Net book amount
At 30 June 2022 61,128
At 30 June 2021 65,833
At 30 June 2020 77,876
Goodwill arising on business combinations is not amortised but reviewed for
impairment on an annual basis, or more frequently if there are indications
that goodwill may be impaired. Determining whether the carrying value of
acquired goodwill is recoverable is a significant judgment given the material
nature of the goodwill balance and the significant assumptions underpinning
management's impairment assessment of the Group's cash generating units
('CGUs'). The Group identifies its CGUs on a business operation and geographic
level. This is consistent with the way the chief operating decision maker
reviews performance.
Disposal
During the year AMT and La Touche Bond Solon Training Limited was disposed of,
which resulted in the disposal of the carrying value of goodwill associated
with both entities. At the date of disposal the carrying value of this
goodwill was £6,237,000.
Annual impairment review
The recoverable amount for each CGU has been determined using value in use
calculations. These calculations use the pre-tax future cash flow forecasts
covering a three year period based on Board approved budgets. Cash flow
projections in these budgets have been based on growth assumptions that
reflect anticipated market trends in the range of industries served by the
brands within each CGU. Overall these projections assume stable profit margins
reflecting market presence expansion, whilst managing the impact of projected
inflationary and recessionary pressures. Pre-tax cash flows beyond the three
year period are then extrapolated using an estimated long term growth rate of
2.0% (2021: 2.0%), providing a 'base case' scenario for the purpose of the
impairment review. Key assumptions for the value in use calculations are those
regarding discount rates, three year cash flow forecasts and long term growth
rates.
Discount rates
Management has applied pre-tax discount rates as follows:
Territory Year ended Year ended
30 June 2022 30 June 2021
% %
United Kingdom 15.2 11.8
United States 15.7 12.9
Spain 15.4 12.4
France 15.8 12.6
Pre-tax discount rates are calculated on a company specific participant basis;
movements in the pre-tax discount rates for CGUs since the prior year are
driven by changes in company specific market-based inputs. Management
considers the pre-tax discount rates to be calculated using appropriate
methodology. The rates are in in line with its peers, and the Board views the
rates as accurately reflecting the return expected by a market participant.
Sensitivity to changes in assumptions
The Group has performed sensitivity testing to assess the impact of changes in
assumptions on the value in use of each CGUs. The sensitivity analysis
performed assessed the impact of pessimistic but reasonably possible changes
to future cash flows, long term growth rates and pre-tax discount rates. All
CGUs retained significant headroom in these sensitised calculations, leading
to the conclusion that there is no realistic change of assumption that would
result in carrying value to exceed its recoverable amount.
Cash generating units
The following table details the net book value of goodwill allocated to each
CGU:
CGU 30 June 30 June
2022 2021
£'000 £'000
UK Healthcare 11,885 11,877
Axco and Pendragon 11,150 11,150
Accountancy 8,307 8,307
Legal 6,796 6,830
AMT - 6,203
Compliance 7,972 7,972
Compliance Week 4,941 4,342
FRA 7,686 6,773
Business Intelligence 2,391 2,379
61,128 65,833
13. Intangible assets
Computer Databases Customer Brands Publishing Total
software £'000 relationships £'000 rights and titles £'000
£'000 £'000 £'000
Cost
At 1 July 2020 15,438 16,795 25,104 13,857 30,493 101,687
Additions 1,969 - - - - 1,969
Disposals (2,130) - - - - (2,130)
Write-off of fully amortised intangible assets - (2,940) (15,549) (3,672) (20,808) (42,969)
Exchange translation differences (139) (90) (399) (237) - (865)
At 30 June 2021 15,138 13,765 9,156 9,948 9,685 57,692
Additions 1,292 - - - - 1,292
Assets transferred to held for sale (245) - - - - (245)
Write-off of fully amortised intangible assets (9,986) - - - - (9,986)
Disposals (51) - - - - (51)
Exchange translation differences 103 105 466 275 - 949
At 30 June 2022 6,251 13,870 9,622 10,223 9,685 49,651
Accumulated amortisation
At 1 July 2020 10,003 15,496 20,102 8,111 28,263 81,975
Charge for the year 2,416 826 1,052 1,016 506 5,816
Impairment - - - 1,516 - 1,516
Disposals (2,010) - - - - (2,010)
Write-off of fully amortised intangible assets - (2,940) (15,549) (3,672) (20,808) (42,969)
Exchange translation differences (80) (70) (276) (210) - (636)
At 30 June 2021 10,329 13,312 5,329 6,761 7,961 43,692
Charge for the year 3,721 187 1,016 660 505 6,089
Assets transferred to held for sale (210) - - - - (210)
Write-off of fully amortised intangible assets (9,986) - - - - (9,986)
Disposals (26) - - - - (26)
Exchange translation differences 48 82 334 201 - 665
At 30 June 2022 3,876 13,581 6,679 7,622 8,466 40,224
Net book amount
At 30 June 2022 2,375 289 2,943 2,601 1,219 9,427
At 30 June 2021 4,809 453 3,827 3,187 1,724 14,000
At 30 June 2020 5,435 1,299 5,002 5,746 2,230 19,712
14. Property, plant and equipment
Land, freehold Fixtures and Computer Motor Right-of-use assets
and leasehold fittings equipment vehicles Land and buildings Total
buildings £'000 £'000 £'000 £'000 £'000
£'000
Cost
At 1 July 2020 5,260 3,705 4,017 377 13,854 27,213
Additions 468 253 326 - 449 1,496
Disposals - (774) (258) (60) (109) (1,201)
Lease modifications - - - - (725) (725)
Assets transferred to held for sale (2,243) (17) - - - (2,260)
Exchange translation differences (3) (45) (35) - (191) (274)
At 30 June 2021 3,482 3,122 4,050 317 13,278 24,249
Additions - 169 271 - 464 904
Disposals - (280) (127) (206) (64) (677)
Assets transferred to held for sale (67) (101) (88) - (205) (461)
Assets transferred from held for sale 162 - - - - 162
Exchange translation differences - 22 47 - 50 119
At 30 June 2022 3,577 2,932 4,153 111 13,523 24,296
Accumulated depreciation
At 1 July 2020 1,566 3,054 3,414 191 2,094 10,319
Charge for the year 436 254 421 63 2,225 3,399
Disposals - (774) (159) (51) (41) (1,025)
Lease modifications - - - - (337) (337)
Impairment 523 103 33 - 2,786 3,445
Assets transferred to held for sale (660) (12) - - - (672)
Exchange translation differences (9) (84) (64) - - (157)
At 30 June 2021 1,856 2,541 3,645 203 6,727 14,972
Charge for the year 353 236 342 38 1,443 2,412
Disposals - (279) (123) (156) (60) (618)
Impairment 597 - - - - 597
Assets transferred to held for sale (34) (64) (54) - (38) (190)
Assets transferred from held for sale 142 - - - - 142
Exchange translation differences - 16 37 - 52 105
At 30 June 2022 2,914 2,450 3,847 85 8,124 17,420
Net book amount
At 30 June 2022 663 482 306 26 5,399 6,876
At 30 June 2021 1,626 581 405 114 6,551 9,277
At 30 June 2020 3,694 651 603 186 11,760 16,894
Depreciation of property, plant and equipment is charged to operating expenses
within the income statement.
The impairment during the year relates to the impairment of assets associated
with an office property, recognised as a result of an exercise performed to
consolidate the Group's office space.
As at 30 June 2022, assets classified as transferred from held for sale relate
to property, plant and equipment with a carrying value of £20,000 which were
classified as held for sale in the prior year but were subsequently not sold.
15. Trade and other receivables
30 June 30 June
2022 2021
£'000 £'000
Current
Trade receivables 22,290 23,202
Prepayments and other receivables 3,272 4,313
Accrued income 1,535 1,183
27,097 28,698
16. Trade and other payables
30 June 30 June
2022 2021
£'000 £'000
Trade and other payables 18,853 24,835
Subscriptions and deferred revenue 31,405 30,124
50,258 54,959
17. Lease liabilities
The Group enters into leases of buildings in relation to offices &
business premises in the geographical locations in which they operate.
The following table shows the discounted lease liabilities included in the
balance sheet:
30 June 30 June
2022 2021
£'000 £'000
Current 648 2,356
Non-current 6,862 8,386
7,510 10,742
A reconciliation of the movement in the right-of-use assets is included in
note 14. The interest expense in relation to lease liabilities is included in
note 7. The total cash outflow for leases was £4,166,000 (2021: £3,352,000)
with the year-on-year increase relating to a difference in the timing of
payments.
Contracts entered into by the Group have a wide range of terms and conditions
but generally do not impose any additional covenants. Extension and
terminations options provide the Group with additional operational
flexibility. These options are included in the lease term if the Group
considers it reasonably certain that the lease will be extended or terminated.
Included in liabilities of disposal group classified as held for sale is
£169,000 relating to lease liabilities for Wilmington Inese SL.
The Group is committed to one lease agreement not yet commenced as at 30 June
2022. The future cash outflow to which the Group is potentially exposed for
this agreement is approximately £550,000.
18. Provisions
Property and other £'000
At 1 July 2021 1,842
Utilised in the year (307)
At 30 June 2022 1,535
30 June
2022
£'000
Included in current liabilities 307
Included in non-current liabilities 1,228
1,535
The provision is in respect of anticipated costs expected to be incurred in
relation to the closed proportion of the head office until the end of the
contractual lease term.
The provision is based on assumptions and estimates where the ultimate outcome
may be different from the amount provided. The provision reflects the Group's
best estimate of the probable exposure as at 30 June 2022. This assessment has
been made having considered the sensitivity of the provision for possible
changes in key assumptions.
19. Disposal group held for sale
As at 30 June 2022, the disposal group classified as held for sale relates to
Wilmington Inese SL, a business held within the Intelligence division. The
rationale for the sale is in line with our portfolio management strategy as
outlined in the strategy section and is expected to be completed within one
year by sale of equity shares.
The major classes of assets and liabilities comprising the disposal group held
for sale are as follows:
30 June
2022
£'000
Intangible assets - computer software 35
Property, plant and equipment 271
Trade and other receivables 386
Cash and cash equivalents 758
Assets of disposal group held for sale 1,450
Trade and other payables (1,163)
Lease liabilities (169)
Liabilities of disposal group held for sale (1,332)
20. Cash generated from operations
Year ended Year ended
30 June 30 June
2022 2021
£'000 £'000
Profit/(loss) from continuing operations before tax 36,120 (2,025)
Adjusting item - gain on disposal of subsidiaries (16,329) (770)
Adjusting item - gain on disposal of business operations - (3,394)
Adjusting item - gain on sale of property, plant and equipment (1,289) -
Adjusting item - net gain on financing activities (840) -
Adjusting items 66 2,970
Depreciation of property, plant and equipment included in operating expenses 2,412 3,399
Amortisation of intangible assets 6,089 5,816
Impairment of goodwill, intangible assets and property, plant and equipment 597 14,834
Non-adjusting (profit)/loss on disposal of property, plant and equipment (71) 2
Share based payments (including social security costs) 1,230 566
Net finance costs 928 1,634
Operating cash flows before movements in working capital 28,913 23,032
Decrease/(increase) in trade and other receivables 1,621 (3,619)
(Decrease)/increase in trade and other payables (5,657) (2,123)
Decrease in provisions (307) -
Cash generated from/(used in) operations before adjusting items 24,570 17,290
Cash conversion is calculated as a percentage of cash generated by operations
to adjusted EBITA as follows:
Year ended Year ended
30 June 30 June
2022 2021
£'000 £'000
Funds from operations before adjusting items:
Adjusted EBITA (note 3) 21,621 16,649
Share based payments (including social security costs) 1,230 566
Amortisation of intangible assets - computer software 3,721 2,416
Depreciation of property, plant and equipment included in operating expenses 2,412 3,399
Non-adjusting (profit)/loss on disposal of property, plant and equipment (71) 2
Operating cash flows before movement in working capital 28,913 23,032
Net working capital movement (4,343) (5,742)
Funds from operations before adjusting items 24,570 17,290
Cash conversion 114% 104%
Year ended Year ended
30 June 30 June
2022 2021
£'000 £'000
Free cash flow:
Operating cash flows before movement in working capital 28,913 23,032
Proceeds on disposal of property, plant and equipment 3,493 103
Net working capital movement (4,343) (5,742)
Interest paid (479) (1,196)
Payment of lease liabilities (3,752) (2,530)
Tax paid (3,397) (2,697)
Purchase of property, plant and equipment (440) (1,047)
Purchase of intangible assets (1,292) (1,969)
Free cash flow 18,703 7,954
21. Events after the reporting period
There were no events after the Balance Sheet date that require disclosure.
END
1 (#_ftnref1) Adjusted profit before tax - see note 3.
2 (#_ftnref2) Adjusted basic earnings per share - see note 10.
3 (#_ftnref3) Net cash includes cash and cash equivalents, bank loans
(excluding capitalised loan arrangement fees) and bank overdrafts but excludes
lease liabilities.
4 (#_ftnref4) Organic - eliminating the effects of exchange rate
fluctuations and the impact of acquisitions and disposals.
5 (#_ftnref5) FTF - face-to-face.
6 (#_ftnref6) Cash conversion - see note 20.
7 (#_ftnref7) Recurring revenue - those contracted at least one year ahead
8 (#_ftnref8) Organic - eliminating the effects of exchange rate
fluctuations and the impact of acquisitions and disposals.
9 (#_ftnref9) UK Healthcare and APM.
10 (#_ftnref10) Pendragon, Axco, Compliance Week and Inese.
11 (#_ftnref11) Discontinued refers to disposed or closed businesses or
product lines.
12 (#_ftnref12) ICA and CLTi.
13 (#_ftnref13) Mercia and Bond Solon.
14 (#_ftnref14) FRA.
15 (#_ftnref15) Discontinued refers to disposed or closed businesses or
product lines.
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