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RNS Number : 4374N Wilmington PLC 25 September 2023
25 September 2023
Wilmington plc
Continued delivery with 30% jump in profitability and dividend up 22%
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 2023.
Financial performance
2023 2022 Change
Continuing results 1 (#_edn1)
Revenue £122.1m £111.9m 9%
Adjusted PBT 2 (#_edn2) £24.1m £18.6m 30%
Adjusted PBT margin 19.7% 16.6% 19%
Adjusted basic EPS 3 (#_edn3) 21.27p 16.72p 27.2%
Net cash 4 (#_edn4) £42.2m £20.5m
Total dividend 10.0p 8.20p 22.0%
Statutory results
Revenue £123.5m £121.0m
PBT incl. disposals £24.0m £36.1m
Basic EPS 22.94p 37.46p
Highlights
(· ) 9% revenue growth from continuing businesses. Organic
growth of 7%(1)
o Training & Education division delivered 15% organic growth
o Intelligence division delivered 3% organic growth
· Annual recurring revenues up 7%, now 39% (2022: 37%) of Group
revenues
· Adjusted profit before tax from continuing businesses up 30% to
£24.1m (2022: £18.6m) reflecting continuing efficiencies of digital-first
model
· Operating profit margins continue to increase with Intelligence
division reaching 23% (2022: 19%)
· Net cash at 30 June 2023 £42.2m (2022: £20.5m) reflecting
strong trading performance and cash conversion
· Continued to streamline and enhance portfolio with disposal of
Inese
· Investment in the development of single technology platforms in
each division
Mark Milner, Chief Executive Officer, commented:
"Since the strategic review we have delivered two years of quarter-on-quarter
profits growth, despite the challenging macro-economic backdrop. Last year's
results were our strongest to date with continuing revenues up by 9% and
profits up 30%. Other notable developments have been the growth in our
recurring revenues and strong cash conversion of profits, further
strengthening our balance sheet, which are a result of improvement in our
overall operational performance.
"We help our customers to do the right business, in the right way. As
Governments, Regulators, businesses and individuals respond to increasing
Governance, Risk and Compliance requirements, they are globally becoming
increasingly aware of the need to ensure the data they rely on for themselves
and their customers is credible, accurate and current; and the training to
ensure they are knowledgeable and meet current standards - all must be
relevant, measurable and independently assessed.
"We now transact with over 8,000 customers and gather data from around 250
geographies. We have increased our geographic presence and now operate in
the UK, Ireland, USA, France, Singapore, Hong Kong, Malaysia, Indonesia,
India, and the MENA region. Our increasing global reach provides us with
opportunities to develop and provide our services across a broader
international customer base, whilst our single technology platforms will be
instrumental in helping us scale in both existing markets and in new
territories.
"The current financial year has started in line with our expectations with
continued organic revenue growth and improved profits and cash."
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.
Introduction
In 2021, Wilmington completed its strategic review and we took the decisive
steps to refocus the Group on the Governance, Risk and Compliance markets. We
invested in our digital first activities. We restructured to operate as two
divisions in one company, committing to investment in our operational growth
levers of sales, marketing and product. We outlined the decisive steps needed
to improve our technology capabilities to accelerate our shift to single
technology platforms and tackled our legacy technology debt. We committed to
maturing our measures assessing and improving customer satisfaction and
employee engagement, designing and investing in a new people programme and
committing to meaningful ESG commitments.
Since 2021, Wilmington has delivered against each of these strategic aims.
This structured, measured and progressive transformation programme is
delivering results, changing the shape of our business, increasing value for
our customers, delivering growth for our shareholders and creating growth
momentum across the Group.
Results
For the year ending 30 June 2023, the Group saw overall organic revenue growth
of 9%, with growth across all parts of our business except our healthcare
unit. Our training and education division achieved a particularly impressive
15% growth in organic revenue, while our intelligence brands reported 3%
growth, with strong performance from our Axco, Pendragon and APM businesses
offset by the UK healthcare business' decline. We have also achieved a 7%
growth in recurring revenue 5 (#_edn5) , which now represents 39% of total
revenue. Currency movement had a minimal impact on the Group's overall
results.
The increased revenues and a continued focus on operational efficiency and
cost management resulted in adjusted PBT growth from continuing businesses of
30% to £24.1m (2022: £18.6m) and a corresponding improvement in adjusted PBT
margin to 19.7% (2022: 16.6%). This resulted in adjusted basic earnings per
share being up 27.0%. We also are proposing a final dividend of 7.3p (total of
10.0p). The Group strengthened its balance sheet, increasing its net cash
position (excluding lease liabilities) to £42.2m (2022: £20.5m) after a
strong year of converting profits to cash.
Strategy
We continued to focus on consolidating our already strong presence in the
large, growing and rapidly evolving GRC markets, following the 2021 strategic
review. 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 the 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 completed the disposal of our
non-core Spanish insurance information business in the first half of the
financial year.
Investment programme
Our investment approach across the Group continues to be targeted at embedding
the unique characteristics that define our competitive advantage into each of
our brands. I am pleased with the progress we have made in developing single
technology platforms in each of our divisions, providing the foundation to
accelerate our growth ambitions and enabling us to provide an improved user
experience to our customers, resulting in an increased competitive advantage.
It will also give us the agility to respond to their ever-changing needs in
the rapidly evolving GRC markets, enhancing our growth potential. 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.
Version 1.0 of the Digital Learning Platform was successfully released at the
end of FY22. We are taking the learnings from this version to improve both
the design and product features, with version 2.0 on track to be delivered by
June 2024. A new technology leader has joined the Group to spearhead the
version 2.0 design and delivery, and increase the speed of development.
We continue to invest organically in new products and strengthen our existing
product offerings, with the scope to monetise our solutions 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.
Artificial Intelligence
The advent of artificial intelligence (AI) has created immense potential for
efficiency and AI enhanced products within the GRC domain. The realm of AI,
wherein machines strive to replicate intricate human cognitive functions,
holds the promise of overhauling industries and reshaping entire work
processes and value streams. The disruptive prowess of AI technology is rooted
in its ability to mechanise tasks, optimise decision-making protocols and
unlock uncharted pathways across an array of sectors.
By orchestrating the automation of repetitive tasks and routine processes, AI
holds the potential to fine-tune operations, curtail expenditures and
strategically allocate resources to endeavours of higher value. Furthermore,
the analytical capabilities of AI can bestow invaluable insights, paving the
way for informed, data-driven decision-making and astute strategic
optimisation.
Within the strategic framework of Wilmington, deliberate measures are being
put into action to navigate the risks that accompany AI technology while
simultaneously harnessing its opportunities.
A working group has been created to take a risk and opportunity-based approach
to AI. This group has meticulously crafted a series of recommendations
encompassing risk mitigation strategies, operational efficiency enhancements
and augmentation of products. Diligent actions to mitigate risks are already
underway, encompassing fortifying our digital assets with robust protective
layers to thwart unauthorised scraping by external entities.
Simultaneously, revised policies governing the utilisation of AI technology
have been devised, covering both our internal staff and the interactions with
our valued customers. Given AI's remarkable capacity to generate content from
vast reservoirs of data, inadvertent infringement of copyrighted material
looms as a notable concern. The implementation of comprehensive protective
protocols and mechanisms becomes imperative in safeguarding the sanctity of
intellectual property rights.
Beyond these operational facets, AI stands as a catalyst for elevated product
development, providing the capability for predictive analytics, tailored
recommendations, and intelligent automation. This transformative potential
empowers us to furnish clients with products that are not only more
personalised, but also more resourceful and innovative. For example, in our
Training and Education division we will be exploring course recommendation,
automated grading and feedback and translation services, and in our
Intelligence Division the enhancement of our proprietary data, which is
protected within our secure environment.
Scale
Wilmington is helping our customers to do the right business, in the right
way. Governments, Regulators, businesses, and individuals are globally
becoming increasingly aware of the requirements and benefits of implementing
appropriate Governance, Risk and Compliance training and of ensuring data and
intelligence sources are as current and accurate as possible.
This global market movement provides Wilmington with an increasing opportunity
to develop and provide services across a broader international customer base.
Alongside existing core operation centres in the UK, Ireland, USA, France,
Singapore, Hong Kong, and Malaysia, we are also building an increasing
presence in Indonesia. We now have a commercial presence in India and have
invested further in the MENA region. We expect soon to expand our offering,
through partners, in China.
Operating efficiency is maintained by our product offering in these new
territories being built on our existing capabilities and content, with a small
degree of customisation of materials to reflect the differing characteristics
of each domestic market.
The investment in commercial and customer service functions was made in FY23,
enabling us to measure performance and fine-tune our offering throughout FY24.
No further significant investment in this area is expected throughout FY24.
Our development of single technology platforms will be instrumental in helping
us scale in both existing markets and in new territories.
A growth mindset
We began the process of pivoting the Group to a digital first strategy in FY20
and FY21 and this has enabled us to deliver two years of quarter-on-quarter
organic revenue and profit growth. Our revised strategic focus,
consolidating our strong presence in the large, growing and rapidly evolving
GRC markets, provides the Group with many growth opportunities.
Wilmington now transacts with over 8,000 customers and gathers data from
around 250 geographies, and has new opportunities in new markets. Whilst
Wilmington cannot claim to be a global business, we are certainly well on the
way to becoming a truly international business.
Key to this organic and geographic progress is developing and maintaining a
strong growth mindset across all parts of our Group. We invested in new
leaders for many of our businesses and our shared services in FY22,
specifically recruiting or promoting individuals with a proven track record of
implementing and delivering growth strategies. The changes and expertise these
individuals have brought have been one of the reasons why we have reported
another strong set of results.
A key part of our growth mindset is to focus on the many drivers of employee
engagement, which increased year on year as measured by our annual engagement
survey. Development is actioned by activities such as regular Town Halls, the
building and support of communities, and development of Working Groups to
focus on keys areas such as diversity and inclusion, reward strategies, talent
development and others.
Instrumental in the development of our people culture was the recruitment of a
Chief People Officer in November 2021, who has significantly developed our
people activities across a very broad spectrum of activities including, but
not limited to, a refreshed wellbeing strategy and services, a complete review
of our reward and benefits strategy, the creation of job families across
selected disciplines, investment in our learning and development services, and
development of diversity and inclusion policies, practices and initiatives.
More details can be found in our Sustainability report.
Responsible business
We are committed to investing in the initiatives that support our own
responsible business culture. We have achieved progress against our targets in
all four areas of our sustainability strategy, and this work continues to
underpin our broader strategic objectives and risk management processes. Full
details of this work can be found in our Sustainability report.
We implemented the Taskforce for Climate-related Financial Disclosures (TCFD)
recommendations in full last year. We concluded 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, producing no greenhouse gas
emissions, in respect of Scope 1 and 2 emissions by 2028, and net zero in
respect of Scope 3 emissions by 2045.
Portfolio update
In December 2022, we completed the disposal of Inese, a media and event
business based in Madrid, Spain. We had flagged the business as held for sale
from February 2020, with the disposal process significantly hampered by the
Covid-19 pandemic.
We continue to review all parts of the Group assessing businesses against six
key characteristics: organic growth opportunities; attractive markets; digital
and data capabilities; strong leadership; strategic fit to the GRC
marketplaces; and attractive product, revenue, and profitability
characteristics.
We continue to seek businesses to join the Wilmington Group, with a highly
active M&A function exploring many options. To date, whilst we have
identified numerous businesses which meet our required characteristics,
valuation expectations continue to remain high and we continue with our
disciplined approach. We will continue to explore inorganic opportunities,
whilst remaining focussed on our organic growth.
Summary and outlook
Wilmington has transformed over the last four years to become a digital first
business, focussed on the attractive GRC sector, reinvigorating and innovating
our products and services to develop deeper and longer-term relationships with
clients, focussed on the Intelligence and Training & Education markets,
with a growth mindset at our core.
This new strategy is delivering, and key to this transformation are our people
and supporting businesses who work tirelessly to constantly develop and
improve many aspects of what we do, how we do it, and deliver increasing value
to our customers.
The current financial year has started in line with our expectations with
continued organic revenue growth and improved profits and cash.
Thank you to each and every one of my colleagues for their commitment to
Wilmington, for their passion and expertise in their chosen areas, and for the
energy they bring to our many growth projects. Our recently launched company
values of Inclusivity, Ambition, Curiosity, and Integrity resonate well with
our strategic ambitions and, with a mindful eye on the geopolitical and
economic uncertainty, we look forward to delivering our plans for FY24 and
beyond.
Divisional review
Training & Education
2023 2022 Absolute variance Organic variance 6 (#_edn6)
£'m £'m % %
Revenue
Global 7 (#_edn7) 24.5 23.2 6% 4%
UK and Ireland 8 (#_edn8) 24.7 22.1 12% 12%
North America 9 (#_edn9) 15.7 11.0 43% 31%
Continuing revenue(6) 64.9 56.3 15% 12%
Continuing operating profit 16.1 14.4 11% 8%
Margin % 25% 26%
Statutory revenue 64.9 61.4 6% 12%
Statutory operating profit 16.1 16.0 0% 8%
The revenue split shown in this table is not a geographic split of revenues,
the split shows revenues of our business groupings within Training and
Education which are described below.
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 was 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, and
a new presence in India. ICA primarily serves the financial services industry.
The material for ICA courses is developed by our own internal R&D team,
and external specialists. 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. Our consistent
investment programme in content and technology is maintaining our competitive
positioning.
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.
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.
The Accountancy market has returned to growth following a dip due to Covid-19
and demand is expected to benefit from upcoming regulation change in the UK.
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 March each year. Revenue from the
US events is generated from both sponsorship and delegate sales.
Trading performance
Revenues grew 15%, 12% if currency gains are excluded. All five of the
businesses within the division grew organically and recurring subscription
revenues grew 11%.
ICA revenues were up 6% as double-digit growth in the UK was offset by a
further drop in Singapore revenues after the exceptional growth there in FY21.
UK saw double digit growth. CLTi grew 4% and is focussed on increasing
business in new territories in FY24.
Bond Solon saw double-digit growth in FY23, driven by a strong increase in
demand across the year. Mercia revenues grew 11% in the year and moved above
its pre-Covid-19 revenues.
In the US, FRA increased revenues by 43% (31% if currency gains are excluded)
as demand from both delegates and sponsors grew strongly in the face of
continuing regulatory change.
Overall divisional operating profit increased by 11%, mainly due to increased
revenues. The operating profit margin was slightly down to 25% (2022: 26%)
following increased technology investment.
Intelligence
2023 2022 Absolute variance Organic variance
£'m £'m % %
Revenue
Healthcare 10 (#_edn10) 30.5 30.8 -1% -1%
Financial Services and Other 11 (#_edn11) 21.7 19.8 9% 5%
MiExact 5.0 5.0 1% 1%
Continuing revenue 57.2 55.6 3% 1%
Continuing operating profit 13.0 10.8 20% 20%
Margin % 23% 19%
Statutory revenue 58.6 59.6 -2% 1%
Statutory operating profit 13.3 11.4 17% 20%
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. Inese, the
Spanish insurance business, was sold in December 2022.
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 from continuing businesses grew 3%, 1% if
currency gains are excluded. All businesses except UK Healthcare grew.
Recurring subscription revenues grew 6% with strong retention rates.
Healthcare revenues declined 1%, with UK revenues down 4% offset by growth in
France of 8% (6% excluding currency gains). Market uncertainty led to a loss
of data revenue in the UK.
Financial Services revenues grew by 9%, 5% if currency gains are excluded.
Subscription revenues grew 10% and were particularly strong in Axco.
Compliance Week grew sterling revenues but dollar revenues slipped back 4%.
MiExact revenues grew 1% after a slow first half was followed by a strong
final quarter. Subscription revenues grew 6% and had a retention rate of 99%.
Intelligence divisional operating profit from continuing businesses grew by
20%, helped by continuing focus on its cost base and automation of its
processes. Operating margins improved to 23% from 19%.
Financial review
Overview
The Group performance was strong during the year, driving organic growth in
revenue and profit and reinforcing the strength of the balance sheet,
reflected by the closing net cash position.
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
2023 2022 Absolute variance variance
£'m £'m £'m % %
Revenue 123.5 121.0 2.5 2.0% 6.7%
Adjusted profit before tax 24.3 20.7 3.6 17.6% 13.3%
Adjusted profit margin % 19.7% 17.1%
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 2.0% overall and 6.7% on an organic basis, the overall
increase reflecting £0.3m of foreign currency downside and the impact of
disposals. Full details can be found in the Review of Operations.
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 (2022: £99.4m), flat year on
year.
Within operating expenses, staff costs increased £1.1m to £56.3m (2022:
£55.2m). This net increase reflects the inflationary pay rise at the
beginning of the year. The increases were partly offset by salary cost savings
generated from a reduction in headcount post disposals. Share based payment
costs increased £0.3m due to the 2023 SAYE scheme which commenced in the
year.
Non-staff costs decreased by £1.1m to £43.1m (2022: £44.2m), reflecting the
costs saved due to the sale of Inese and the reduction in amortisation of
computer software within intangible assets year on year.
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, decreased £0.8m year-on-year to £3.7m (2022: £4.5m).
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 17.6% to £24.3m
(2022: £20.7m).
Adjusted profit margin (adjusted PBT expressed as a percentage of revenue)
also increased to 19.7% (2022: 17.1%).
Amortisation excluding computer software, impairment charge and other income
Amortisation of intangible assets (excluding computer software) was £2.4m
(2022: £2.4m) representing intangible assets acquired as part of prior year
acquisitions.
Other income represents the net gain of £2.2m from the disposal of Inese.
Adjusting items within operating expenses
Adjusting items within operating expenses of £0.1m (2022: £0.1m) 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 £23.8m (2022: £37.0m). The large decrease is driven by
the £16.3m gain of the sale of AMT and La Touche (Inese sale: £2.2m for FY23
comparison) and the adjusting other income (profits on sale of property) all
in the prior year.
Net finance income
Net finance income up £1.2m to £0.2m (2022: net finance costs of £0.9m),
primarily related to the interest received on the large cash balance the Group
maintained during the full year.
Profit before taxation
Profit before taxation was £24.0m (2022: £36.1m); a reconciliation of this
to adjusted profit before tax can be found in note 3.
Taxation
The tax charge for the year was £3.8m (2022: £3.3m) reflecting an effective
tax rate of 15.9% (2022: 9.1%). The increase in the tax rate year-on-year
reflects the nature of other operating income and adjusting items,
specifically the gain on disposal of businesses in 2022 vs 2023 which were not
subject to corporation tax.
The underlying tax rate which ignores the tax effects of adjusting items has
risen slightly to 22.3% (2022: 21.0%). The increase reflects the UK
corporation tax increase from 19% to 25% in April 2023, one quarter of which
applies to FY23.
Earnings per share
Adjusted basic earnings per share increased by 15.2% to 21.49p (2022: 18.66p),
due to the increase in adjusted profit before tax, offset by a slight increase
in the underlying tax rate (see above) and an essentially unchanged number of
issued ordinary shares (see below). Basic earnings per share was 22.94p (2022:
37.46p) in the prior year, reflecting the decrease in profit after tax.
Continuing adjusted basic earnings per share, excluding the results of sold
and closed businesses, increased by 27.2% to 21.27p (2022: 16.72p), see
reconciliation below.
2023 2022
£'m £'m
Adjusted earnings (note 9) 18.9 16.3
Remove profit after tax of sold and closed businesses (0.2) (1.7)
Continuing adjusted earnings 18.7 14.6
Number Number Variance
Weighted average number of ordinary shares (note 9) 88,027,119 87,632,022
Continuing adjusted basic earnings per share 21.27p 16.72p 27.2%
Dividend
A final dividend of 7.3p per share (2022: 5.8p) will be proposed at the AGM.
This will give a full year dividend up 22% to 10.0p (2022: 8.2p) and dividend
cover of 2.1 times (2022: 2.3 times).
If approved it will be paid on 28 November 2023 to shareholders on the
register as at 28 October 2023 with an associated ex-dividend date of 27
October 2023.
Balance sheet
Non-current assets
Goodwill at 30 June 2023 was £60.6m (2022: £61.1m). A weakening US Dollar
led to a decrease in the Sterling value of the US Dollar portion of the
Group's goodwill.
Intangible assets decreased by £3.7m to £5.7m (2022: £9.4m) due to
amortisation of £4.1m, partly offset by additions of £0.6m 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. The remaining decrease reflects
exchange translation differences.
Property, plant and equipment increased by £0.1m to £7.0m (2022: £6.9m).
This is attributable to the £1.9m increase in the right of use assets due to
the new France and USA leases entered into during the year, together with
£0.5m of other additions, offset by depreciation of £2.3m.
Deferred consideration receivable
The deferred consideration receivable balance of £1.9m (2022: £1.7m) relates
to the disposal of ICP in July 2018 and the deferred consideration from the
sale of Inese (see note 10), with £1.1m recognised within non-current assets
and the remaining £0.8m recognised within current assets.
Trade and other receivables
Trade and other receivables remained relatively constant at £27.4m (2022:
£27.1m).
Current tax liability
At 30 June 2023 the Group recognised a liability relating to current tax of
£0.1m (2022: asset £1.3m). The net liability position reflects a slight net
underpayment position.
Trade and other payables
Trade and other payables increase by £5.7m to £56.0m (2022: £50.3m). Within
this, subscriptions and deferred revenue increased by £2.3m or 7.1% to
£33.7m (2022: £31.4m), the rest of the increase is due to payment timings.
This increase in subscriptions and deferred revenue was driven mostly by the
growth of subscription services in the year.
Provisions
Provisions were £1.2m (2022: £1.5m), 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 and bank overdrafts, and lease liabilities, was £35.0m
(2022: £13.0m). This significant net cash position is driven by a strong
trading performance delivering improved profits and effective cash management
as well as a cash inflow associated with the sale of Inese.
Lease liabilities decreased to £7.2m (2022: £7.5m). £2.1m cash payments in
relation to contractual lease obligations were made during the year reducing
the balance, offset by the new France and USA leases mentioned above and
£0.2m of notional interest on lease liabilities reported within net finance
costs.
Cash conversion remained strong at 138% (2022: 114%).
Share capital
In October 2022 Wilmington issued 340,052 ordinary voting shares to satisfy
the Company's obligations under its Performance Share Plan.
During the year 30,215 shares held by the Employee Share Ownership Trust
('ESOT') were used to satisfy the Company's obligations under the SAYE Plan.
At 30 June 2023, the ESOT held 352,651 shares (2022: 403,782) in the Company,
which represents 0.4% (2022: 0.5%) of the called up share capital.
60,762 shares held in treasury were used to satisfy the Company's obligations
under the SAYE Plan during the year. At 30 June 2023, 5,208 shares (2022:
65,970) were held in treasury, which represents 0.1% (2022: 0.1%) of the share
capital of the Company.
Consolidated income statement
for the year ended 30 June 2023
Notes Year ended Year ended
30 June 2023 30 June 2022
£'000 £'000
Continuing operations
Revenue 4 123,497 121,028
Operating expenses before amortisation of intangibles excluding computer (99,391) (99,407)
software, impairment and adjusting items
Impairment of property, plant and equipment - (597)
Amortisation of intangible assets excluding computer software 5b (2,381) (2,368)
Adjusting items 5b (147) (66)
Operating expenses (101,919) (102,438)
Other income - gain on disposal of subsidiaries 13 2,212 16,329
Other income - gain on disposal of property, plant and equipment - 1,289
Other income - net gain on financing activities - 840
Operating profit 23,790 37,048
Finance income 6 478 113
Finance expense 6 (246) (1,041)
Profit before tax 24,022 36,120
Taxation 7 (3,827) (3,295)
Profit for the year attributable to owners of the parent 20,195 32,825
Earnings per share:
Basic (p) 9 22.94 37.46
Diluted (p) 9 22.38 36.98
Consolidated statement of comprehensive income
for the year ended 30 June 2023
Year ended Year ended
30 June 30 June
2023 2022
£'000 £'000
Profit for the year 20,195 32,825
Other comprehensive (expense)/income:
Items that may be reclassified subsequently to the income statement
-Currency translation differences (991) 2,353
-Fair value movements of net investment hedges, net of tax - (193)
Other comprehensive (expense)/income for the year, net of tax (991) 2,160
Total comprehensive income for the year attributable to owners of the parent 19,204 34,985
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 7.
Balance sheets
as at 30 June 2023
Notes 2023 2022
£'000 £'000
Non-current assets
Goodwill 60,561 61,128
Intangible assets 5,734 9,427
Property, plant and equipment 7,015 6,876
Deferred consideration receivable 1,152 1,448
Deferred tax assets 925 1,041
75,387 79,920
Current assets
Trade and other receivables 11 27,391 27,097
Deferred consideration receivable 752 250
Current tax assets - 1,262
Cash and cash equivalents 42,173 19,785
Assets of disposal group held for sale - 1,450
70,316 49,844
Total assets 145,703 129,764
Current liabilities
Trade and other payables 12 (55,966) (50,258)
Lease liabilities (975) (648)
Current tax liabilities (44) -
Provisions (307) (307)
Liabilities of disposal group held for sale - (1,332)
(57,292) (52,545)
Non-current liabilities
Lease liabilities (6,235) (6,862)
Deferred tax liabilities (607) (2,040)
Provisions (921) (1,228)
(7,763) (10,130)
Total liabilities (65,055) (62,675)
Net assets 80,648 67,089
Equity
Share capital 4,408 4,391
Share premium 45,553 45,553
Treasury and ESOT reserves (786) (1,093)
Share based payments reserve 2,635 2,141
Translation reserve 3,431 4,422
Retained earnings 25,407 11,675
Total equity 80,648 67,089
Statements of changes in equity
for the year ended 30 June 2023
Share capital, Share based Translation Retained earnings Total equity
share premium, payments reserve £'000 £'000
treasury shares and ESOT shares reserve £'000
£'000 £'000
Group
At 1 July 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
Profit for the year - - - 20,195 20,195
Other comprehensive expense for the year - - (991) - (991)
48,851 2,141 3,431 31,870 86,293
Transactions with owners:
Dividends paid - - - (7,462) (7,462)
Issue of share capital 17 - - - 17
Performance share plan awards vesting - (717) - 854 137
Save As You Earn options settlement via ESOT 154 (11) - (16) 127
Save As You Earn options settlement via treasury shares 153 - - (64) 89
Share based payments - 1,222 - - 1,222
Tax on share based payments - - - 225 225
At 30 June 2023 49,175 2,635 3,431 25,407 80,648
Cash flow statements
for the year ended 30 June 2023
Notes Year ended Year ended
30 June 2023 30 June 2022
£'000 £'000
Cash flows from operating activities
Cash generated from/(used in) operations before adjusting items 13 33,205 24,570
Cash flows for adjusting items - operating activities (375) (342)
Cash flows from tax on share based payments (2) (4)
Cash generated from/(used in) operations 32,828 24,224
Interest received/(paid) 344 (479)
Tax paid (3,268) (3,397)
Net cash generated from/(used in) operating activities 29,904 20,348
Cash flows from investing activities
Disposal of subsidiaries net of cash 10 1,549 22,792
Deferred consideration received 250 250
Cash flows for adjusting items - investing activities (6) (43)
Purchase of property, plant and equipment (461) (440)
Proceeds from disposal of property, plant and equipment 13 3,493
Purchase of intangible assets (595) (1,292)
Net cash generated from investing activities 750 24,760
Cash flows from financing activities
Dividends paid to owners of the parent (7,462) (5,492)
Cash received from sale of shares for share vesting 573 340
Share issuance costs (14) (28)
Purchase of shares by ESOT - (371)
Payment of lease liabilities (2,109) (3,752)
Cash flows for adjusting items - proceeds on disposal of interest rate swap - 1,243
Decrease in bank loans - (21,198)
Net cash used in financing activities (9,012) (29,258)
Net increase in cash and cash equivalents, net of bank overdrafts 21,642 15,850
Cash and cash equivalents, net of bank overdrafts at beginning of the year 20,543 3,730
Exchange (loss)/gain on cash and cash equivalents (12) 205
Cash classified as held for sale - 758
Cash and cash equivalents, net of bank overdrafts at end of the year 42,173 20,543
Reconciliation of net cash
Cash and cash equivalents at beginning of the year 19,785 7,374
Cash classified as held for sale 758 -
Bank overdrafts at beginning of the year - (3,644)
Bank loans at beginning of the year - (20,960)
Lease liabilities at beginning of the year (7,510) (10,742)
Net cash/(debt) at beginning of the year 13,033 (27,972)
Net increase in cash and cash equivalents, net of bank overdrafts 21,630 16,813
Net repayment in bank loans - 21,198
Exchange loss on bank loans - (238)
Movement in lease liabilities 300 3,232
Cash and cash equivalents at end of the year 42,173 19,785
Cash classified as held for sale at end of the year - 758
Lease liabilities at end of the year (7,210) (7,510)
Net cash at end of the year 34,963 13,033
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 2023 on which an unqualified
report has been made by the Company's auditors.
Financial statements for the year ended 30 June 2023 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 2023 statutory accounts will be delivered in due course.
Copies of the Annual Report and Financial Statements will be made available to
shareholders shortly and 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 2023 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 2022. There was no material effect from the adoption of
new standards or interpretations in the year ended 30 June 2023.
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 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 property, plant and equipment;
• other income - net gain on financing activities; and
• net finance income/expense.
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
2023 2022
£'000 £'000
Profit before tax 24,022 36,120
Impairment of property, plant and equipment - 597
Amortisation of intangible assets excluding computer software 2,381 2,368
Adjusting items (included in operating expenses) 147 66
Other income - gain on disposal of subsidiaries (2,212) (16,329)
Other income - gain on disposal of property, plant and equipment - (1,289)
Other income - net gain on financing activities - (840)
Adjusted profit before tax 24,338 20,693
Net finance (income)/expense (232) 928
Adjusted operating profit ('adjusted EBITA') 24,106 21,621
Depreciation of property, plant and equipment included in operating expenses 2,321 2,412
Amortisation of intangible assets - computer software 1,690 3,721
Adjusted EBITA before depreciation ('adjusted EBITDA') 28,117 27,754
Adjusted profit before tax 24,338 20,693
Remove operating profit from sold and closed businesses (212) (2,089)
Continuing adjusted profit before tax 24,126 18,604
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. 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 2023 30 June 2023 30 June 2022 30 June 2022
£'000 £'000 £'000 £'000
Training & Education 64,872 16,066 61,464 15,998
Intelligence 58,625 13,258 59,564 11,359
Group total 123,497 29,324 121,028 27,357
Unallocated central overheads - (3,703) - (4,506)
Share based payments - (1,515) - (1,230)
123,497 24,106 121,028 21,621
Impairment of property, plant and equipment - (597)
Amortisation of intangible assets excluding computer software (2,381) (2,368)
Adjusting items (included in operating expenses) (147) (66)
Other income - gain on disposal of subsidiaries 2,212 16,329
Other income - gain on disposal of property, plant and equipment - 1,289
Other income - net gain on financing activities - 840
Net finance income/(expense) 232 (928)
Profit before tax 24,022 36,120
Taxation (3,827) (3,295)
Profit for the financial year 20,195 32,825
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
2023 2022
£'000 £'000
UK 70,573 64,320
USA 24,465 21,304
Europe (excluding the UK) 19,224 25,809
Rest of the World 9,235 9,595
Total revenue 123,497 121,028
c) Timing of revenue recognition
The timing of the Group's revenue recognition is as follows:
Year ended Year ended
30 June 30 June
2023 2022
£'000 £'000
Revenue from products and services transferred at a point in time 39,551 39,725
Revenue from products and services transferred over time 83,946 81,303
Total revenue 123,497 121,028
During the year the Group recognised £31,405,000 of revenue that was held as
a contract liability 30 June 2022 (2022: £30,124,000 related to amounts held
at 30 June 2021).
5. Profit from continuing operations
a) Profit for the year from continuing operations is stated after
charging/(crediting):
Year ended Year ended
30 June 30 June
2023 2022
£'000 £'000
Depreciation of property, plant and equipment - included in operating expenses 2,321 2,412
Short term and low-value leases 94 114
Amortisation of intangible assets - computer software 1,690 3,721
Non-adjusting profit on disposal of property, plant and equipment (36) (71)
Share based payments (including social security costs) 1,515 1,230
Amortisation of intangible assets excluding computer software 2,381 2,368
Adjusting items (included in operating expenses) 147 66
Adjusting item - gain on disposal of subsidiaries (2,212) (16,329)
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 (200) (183)
Impairment of property, plant and equipment - 597
Foreign exchange loss 179 446
Fees payable to the auditor for the audit of the Company and consolidated 153 107
financial statements
Fees payable to the auditor and their associates for other services:
- The audit of the Company's subsidiaries pursuant to legislation 240 205
- Audit related other services 17 15
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
2023 2022
£'000 £'000
Expense relating to strategic activities 147 66
Other adjusting items (included in operating expenses) 147 66
Impairment of property, plant and equipment - 597
Amortisation of intangible assets excluding computer software 2,381 2,368
Total adjusting items (classified in profit before tax) 2,528 3,031
6. Net finance income/(expense)
Year ended Year ended
30 June 30 June
2023 2022
£'000 £'000
Net finance income/(expense) comprise:
Interest receivable/(payable) on cash and cash equivalents/(bank loans and 373 (748)
overdrafts)
Unwinding of the discount on royalty payments receivable 105 113
Interest on lease liabilities (246) (293)
232 (928)
7. Taxation
Year ended Year ended
30 June 30 June
2023 2022
£'000 £'000
Current tax
UK corporation tax at current rates on UK profits for the year 3,263 2,817
Adjustments in respect of previous years (54) (870)
3,209 1,947
Foreign tax 1,634 969
Adjustments in respect of previous years 89 -
Total current tax 4,932 2,916
Total deferred tax (1,105) 379
Taxation 3,827 3,295
Factors affecting the tax charge for the year:
The effective tax rate is lower (2022: lower) than the average rate of
corporation tax in the UK of 20.5% (2022: 19.0%). The differences are
explained below:
Year ended Year ended
30 June 30 June
2023 2022
£'000 £'000
Profit before tax 24,022 36,120
Profit before tax multiplied by the average rate of corporation tax in the 4,925 6,863
year of 20.5% (2022: 19.0%)
Tax effects of:
Impairment property, plant and equipment - 113
Foreign tax rate differences 338 201
Adjustment in respect of previous years 35 (870)
Other items not subject to tax (366) (3,012)
Deferred tax UK intangibles and capital allowances movement (904) -
Effect on deferred tax of a change in the corporation tax rate (83) -
Other deferred tax movements (118) -
Taxation 3,827 3,295
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 15.9% (2022: 9.1%).
Included in other comprehensive income is a tax charge of £nil (2022: credit
of £45,000) relating to the net investment hedges.
The tax effect of adjusting items as disclosed in note 9 is a credit of
£1,598,000 (2022: £1,050,000).
8. 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
2023 2022 2023 2022
Pence Pence £'000 £'000
per share per share
Final dividends recognised as distributions in the year 5.8 3.9 5,091 3,399
Interim dividends recognised as distributions in the year 2.7 2.4 2,371 2,093
Total dividends paid 7,462 5,492
Final dividend proposed 7.3 5.8 6,410 5,070
9. Earnings 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 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 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
2023 2022
£'000 £'000
Earnings from continuing operations for the purpose of basic earnings per 20,195 32,825
share
Add/(remove):
Impairment of property, plant and equipment - 597
Amortisation of intangible assets excluding computer software 2,381 2,368
Adjusting items (included in operating expenses) 147 66
Other income - gain on disposal of subsidiaries (2,212) (16,329)
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 and deferred tax (1,598) (1,050)
Adjusted earnings for the purposes of adjusted earnings per share 18,913 16,348
2023 2022
Number Number
Weighted average number of ordinary shares for the purposes of basic and 88,027,119 87,632,022
adjusted earnings per share
Effect of dilutive potential ordinary shares:
Future exercise of share awards and options 2,217,174 1,126,918
Weighted average number of ordinary shares for the purposes of diluted and 90,244,293 88,758,940
adjusted diluted earnings per share
Basic earnings per share 22.94p 37.46p
Diluted earnings per share 22.38p 36.98p
Adjusted basic earnings per share ('adjusted earnings per share') 21.49p 18.66p
Adjusted diluted earnings per share 20.96p 18.42p
10. Disposals
On 30 December 2022 the Group disposed of its Spanish insurance business,
Wilmington Inese SL., for a consideration of £2,637,131 (€3,000,000) and
recognised a gain on disposal of £2,211,523 presented within other income.
Wilmington received cash of £2,285,714 (€2,600,000) on 2nd January 2023 and
the remaining £351,417 (€400,000) is payable on 30 December 2023.
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 Wilmington Inese SL. were as
follows:
£'000
Intangibles 34
Property, plant and equipment 236
Deferred tax asset 121
Trade and other receivables 536
Cash and cash equivalents 737
Trade and other payables (814)
Deferred income (525)
Lease liability (173)
Net assets disposed 152
Directly attributable costs of disposal 405
Recycling of deferred foreign exchange loss (132)
Gain on disposal 2,212
Fair value of consideration 2,637
Satisfied by:
Cash and cash equivalents 2,286
Deferred consideration 351
2,637
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
markets. Wilmington Inese SL. was classified as continuing operations until
the date of disposal due to it not being a separate major line of business or
geographical area.
11. Trade and other receivables
Group
30 June 30 June
2023 2022
£'000 £'000
Current
Trade receivables 22,577 22,290
Prepayments and other receivables 3,758 3,272
Accrued income 1,056 1,535
Amounts due from subsidiaries - -
27,391 27,097
12. Trade and other payables
Group
30 June 30 June
2023 2022
£'000 £'000
Trade payables 3,039 2,734
Social security and other taxes 3,418 2,106
Accruals 15,425 13,936
Subscriptions and deferred revenue 33,659 31,405
Other payables 425 77
Amounts due to subsidiaries - -
55,966 50,258
13. Cash generated from operations
Year ended Year ended
30 June 30 June
2023 2022
£'000 £'000
Profit from continuing operations before tax 24,022 36,120
Adjusting item - gain on disposal of subsidiaries (2,212) (16,329)
Adjusting item - gain on sale of property, plant and equipment - (1,289)
Adjusting item - net gain on financing activities - (840)
Adjusting items 147 66
Depreciation of property, plant and equipment included in operating expenses 2,321 2,412
Amortisation of intangible assets 4,071 6,089
Impairment of property, plant and equipment - 597
Non-adjusting profit on disposal of property, plant and equipment (36) (71)
Share based payments (including social security costs) 1,515 1,230
Net finance (income)/expense (232) 928
Operating cash flows before movements in working capital 29,596 28,913
(Increase)/decrease in trade and other receivables (107) 1,621
Increase/(decrease) in trade and other payables 4,023 (5,657)
Decrease in provisions (307) (307)
Cash generated from/(used in) operations before adjusting items 33,205 24,570
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
2023 2022
£'000 £'000
Funds from operations before adjusting items:
Adjusted EBITA (note 3) 24,106 21,621
Share based payments (including social security costs) 1,515 1,230
Amortisation of intangible assets - computer software 1,690 3,721
Depreciation of property, plant and equipment included in operating expenses 2,321 2,412
Non-adjusting profit on disposal of property, plant and equipment (36) (71)
Operating cash flows before movement in working capital 29,596 28,913
Net working capital movement 3,609 (4,343)
Funds from operations before adjusting items 33,205 24,570
Cash conversion 138% 114%
Year ended Year ended
30 June 30 June
2023 2022
£'000 £'000
Free cash flow:
Operating cash flows before movement in working capital 29,596 28,913
Proceeds on disposal of property, plant and equipment 13 3,493
Net working capital movement 3,609 (4,343)
Interest received/(paid) 344 (479)
Payment of lease liabilities (2,109) (3,752)
Tax paid (3,268) (3,397)
Purchase of property, plant and equipment (461) (440)
Purchase of intangible assets (595) (1,292)
Free cash flow 27,129 18,703
14. Events after the reporting period
Due to the growing net cash position the Board decided to cancel the revolving
credit facility in August 2023.
1 (#_ednref1) Continuing - eliminating the effects of the impact of
disposals; Organic - Continuing eliminating exchange rate fluctuations.
2 (#_ednref2) Continuing adjusted profit before tax - see note 3.
3 (#_ednref3) Continuing adjusted basic earnings per share -; Adjusted basic
earnings per share - see note 9.
4 (#_ednref4) Net cash includes cash and cash equivalents, bank loans
(excluding capitalised loan arrangement fees) and bank overdrafts but excludes
lease liabilities.
5 (#_ednref5) Recurring revenues - those contracted at least one year ahead.
6 (#_ednref6) Organic - eliminating the effects of exchange rate
fluctuations and the impact of acquisitions and disposals; Continuing -
eliminating the effects of the impact of disposals;
7 (#_ednref7) ICA businesses and CLTi.
8 (#_ednref8) Mercia and Bond Solon.
9 (#_ednref9) FRA.
10 (#_ednref10) UK Healthcare and APM.
11 (#_ednref11) Pendragon, Axco and Compliance Week.
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