REG - Wilmington PLC - Half-year Report
20/02/2023 07:00
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RNS Number : 3486Q Wilmington PLC 20 February 2023
20 February 2023
Wilmington plc
Double digit profits growth - dividend up 13%
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 half year results for the
six months ended 31 December 2022 (H1 FY23).
Financial performance
H1 FY23 H1 FY22 Change
Continuing results 1 (#_ftn1)
Revenue £56.0m £52.4m 7%
Adjusted PBT 2 (#_ftn2) £8.9m £7.8m 14%
Adjusted basic EPS 3 (#_ftn3) 7.92p 7.02p 13%
Interim dividend 2.70p 2.40p 13%
Statutory results
Revenue £57.4m £58.9m
PBT incl. disposals £10.0m £24.6m
Basic EPS 9.40p 26.14p
Adjusted basic EPS 8.11p 8.60p
Highlights
· Continuing revenue growth 7% and organic revenue growth 4%
excluding currency gains - driven by strong performance in Training &
Education
§ Recurring revenue up 5% underpinned by strong retention rates
§ Repeat revenues, including recurring revenues of 42%, now 79% of revenues
(69% in FY22).
· Continuing adjusted profit before tax of £8.9m up 14%
· Strategic disposal of Inese in December 2022
· Robust balance sheet - net cash 4 (#_ftn4) at 31 December 2022
of £22.9m (31 Dec 21: £11.0m; 30 Jun 22: £20.5m)
· Significant progress made in establishing single technology
platforms for both divisions
Mark Milner, Chief Executive Officer, commented:
"We continue to deliver our strategy to drive solid organic revenue growth and
profits as well as strong cash conversion. We maintain focus on actively
managing our portfolio and will only consider acquisition opportunities which
provide attractive return on investment.
"We have made good progress with our endeavours to develop single platforms
for our Intelligence and Training & Education divisions, simplifying our
technology and enhancing our products and services.
"Trading in the current financial year continues to be in line with
expectations. Whilst we are mindful of current economic uncertainties, we have
a strong contracted order book which underpins our confidence for the second
half."
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, contact:
Wilmington plc 020 7422 6800
Mark Milner, Chief Executive Officer
Guy Millward, Chief Financial Officer
Meare Consulting
Adrian Duffield 07990 858548
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.
Overview
We have continued to deliver solid organic revenue growth and double-digit
profit improvement whilst also investing in our portfolio of businesses and
divisional infrastructure. Demand has been particularly strong in our Training
and Education division and in Financial Services within our Intelligence
division.
Continuing revenue was up 7% at £56.0m with organic revenue growth of 4%,
after removing the impact of currency movements. Reported revenue including
business sold over the last 18 months was £57.4m (H1 FY22: £58.9m).
Recurring revenues grew 5% with strong retention rates continuing. Recurring
revenues represent 42% of total ongoing revenues (42% in H1 FY22). Repeat
revenues, including the recurring revenues, from existing customers made up
79% of our revenues in H1 FY23 (69% in FY22).
With further margin improvements, continuing adjusted profit before tax was up
14% to £8.9m (H1 FY22: £7.8m) and continuing adjusted basic earnings per
share by 13% to 7.92p (H1 FY22: 7.02p).
Operating cash conversion remained strong at 121%, with net cash excluding
lease liabilities of £22.9m (30 June 2022: £20.5m).
The Group's Spanish business, Inese, as planned was sold in December 2022 for
£2.6m. The proceeds were received in January 2023.
The interim dividend is being increased by 13% to 2.70p (H1 FY22: 2.40p), in
line with continuing profits.
Strategic and operational progress
Our strategy is to grow revenues and profits organically in the large, growing
and rapidly evolving GRC and Regulatory Compliance markets by investing in our
business and actively managing our portfolio of brands.
Our largest investment focus is on establishing single technology platforms
for each division. This supports our digital-first approach and will enable
the Group to grow more efficiently organically and by acquisition and help to
deliver operating leverage over time.
In the Training & Education division, we have established the Digital
Learning Platform and are moving to version 2.0, which will improve our 'back
office' technologies. In the Intelligence division, we have begun to establish
a single data platform for all our lines of business, based around
Snowflake(®) technology and expect this project to roll out over the next two
years.
We remain focussed on actively managing our portfolio by assessing the
potential of each business to exhibit the six common Wilmington
characteristics that we recognise as key drivers of organic revenue growth and
profitability improvement.
We intend to use our cash resources and our bank facility to acquire suitable
GRC businesses to enhance and widen the Group's capabilities and rate of
profitable growth. We have not made any acquisitions to date as we continue to
find the prices being paid for good businesses are too high to deliver good
returns. We will continue to apply high levels of scrutiny in respect of
target identification and multiples paid.
We are clear in our ambition but equally clear in the characteristics we will
seek in any business we look to acquire. The ability to drive long term value
for Wilmington shareholders will always be a key priority.
Current trading and outlook
Trading in the current financial year continues to be in line with
expectations. Whilst we are mindful of current economic uncertainties, we have
a strong contracted order book which underpins our confidence for the second
half.
Environmental, Social, and Governance (ESG)
We continue to invest in our priority ESG initiatives, as our responsible
business strategy underpins the delivery of our broader strategic objectives.
In H1 we reported a 10% reduction in our gender pay gap since last year and
have continued to develop our network of internal communities that support
diversity within our workforce.
We ran our second digital accessibility awareness campaign and continue to
conduct product audits and improvement initiatives as we strive to reach our
long-term goal to meet WCAG 2.1 AA standards across our digital portfolio.
In H1 we published our carbon reduction plan, and our updated response to Task
Force on Climate-Related Financial Disclosures (TCFD) is an integral component
of our upcoming strategic planning cycle.
Divisional review
Training & Education
H1 FY23 H1 FY22 Absolute Organic
£'m £'m Variance Variance
Revenue
Global 11.8 11.4 3% 1%
UK & Ireland 11.9 10.9 9% 9%
North America 4.9 2.6 87% 59%
Continuing revenue 28.6 24.9 15% 11%
Continuing operating profit 6.2 5.6 12% 7%
Margin 22% 22%
Statutory revenue 28.6 29.8 (4%)
Statutory operating profit 6.2 7.1 (12%)
Continuing revenues grew 11% organically. This was led by a strong performance
in North America where growth in events, particularly delegate attendance and
the running of four new ones, boosted revenues by 59%. Growth excluding events
was 6%.
UK and Ireland also had a strong result with both Mercia and Legal seeing
substantial growth due to increased customer demand. In Global, strong growth
in the UK and Malaysia was offset by challenging market conditions in
Singapore.
Organic operating profit increased by 7% as a result of organic revenue growth
and effective cost control. H1 FY23 operating profit increased by 12%,
excluding £1.5m of H1 FY22 operating profit from discontinued businesses.
We expect margins to move ahead of FY22 levels in H2 FY23 due to the second
half weighting of revenues.
Intelligence
H1 FY23 H1 FY22 Absolute Organic
£'m £'m Variance Variance
Revenue
Healthcare 15.1 15.8 (5%) (5%)
Financial Services & Other 10.0 9.3 9% 5%
MiExact 2.3 2.4 (5%) (5%)
Continuing revenue 27.4 27.5 0% (2%)
Continuing operating profit 5.6 5.5 2% 0%
Margin 20% 20%
Statutory revenue 28.8 29.1 (1%)
Statutory operating profit 5.8 5.6 3%
Continuing revenues in the Intelligence division marginally declined due to a
slow first half for sales in UK Healthcare and MiExact, although Financial
Services had a strong performance in subscription revenues, which rose to 68%
of total ongoing divisional revenue.
As part of our portfolio investment and improvement programme, we discontinued
various UK Healthcare products and services that did not make acceptable
profits. We also experienced shortages of specialist delivery and sales
resources. The shortfall has now been addressed. Demand remains strong, we
expect to grow revenues from on-going products and services in H2 and beyond.
Operating profits from continuing operations marginally improved, achieving a
0.8% increase in profit margin to over 20% following our investment programme
in automation.
Financial review
Other income and finance income
Other income represents the net gain of £2.2m from the disposal of Inese in
December 2022 (H1 FY22: £16.1m from the disposal of AMT).
Net finance income was achieved for the first time (H1 FY22: £0.6m net
finance expense) due to having no debt and cash to deposit in interest-bearing
accounts.
Profit before taxation
Continuing adjusted profit before tax was up 14% to £8.9m (H1 FY22: £7.8m)
with profit before tax at £10.0m (H1 FY22: £24.6m). H1 FY22 profit before
tax included £16.1m profit on disposal of AMT.
Taxation
The tax charge is £1.8m (H1 FY22: £1.7m) with an overall effective tax
rate 5 (#_ftn5) of 18% (H1 FY22: 7%). The lower effective tax rate in the
prior period was due to the gain of £16.1m on disposal of AMT not being
subject to corporation tax.
The underlying tax rate 6 (#_ftn6) , which ignores the tax effects of
adjusting items, is 21% (H1 FY22: 20%). The increase reflects greater profits
from territories with higher tax rates including North America.
Earnings per share
Continuing adjusted basic earnings per share, excluding the results of sold
and closed businesses, increased by 13% to 7.92p (H1 FY22: 7.02p),
reconciliation below. Reported earnings per share 9.40p (H1 FY22: 26.14p).
H1 FY23 H1 FY22
£'m £'m
Adjusted earnings (note 6) 7.1 7.5
Remove profit after tax of sold and closed businesses (0.1) (1.4)
Continuing adjusted earnings 7.0 6.1
Number Number Variance
Weighted average number of ordinary shares (note 6) 88,027,119 87,603,917
Continuing adjusted basic earnings per share 7.92p 7.02p 13%
Dividend
The Board has increased the interim dividend by 13% to 2.70p (H1 FY22: 2.40p),
in line with continuing profits. It will be paid on 6 April 2023 to
shareholders on the share register as at 3 March 2023, with an associated
ex-dividend date of 2 March 2023.
Balance sheet and cashflow
Cash generation improved due to the strong trading performance with operating
cash conversion remaining strong at 121%, with net cash excluding lease
liabilities of £22.9m (30 June 2022: £20.5m). The proceeds from the disposal
of Inese were received in January 2023.
Consolidated Income Statement
Notes Six months ended Six months ended Year
31 December 2022 31 December 2021 ended
(unaudited) (unaudited) 30 June
£'000 £'000 2022
(audited)
£'000
Continuing operations
Revenue 5 57,425 58,945 121,028
Operating expenses before amortisation of intangibles excluding computer (48,367) (48,921) (99,407)
software, impairment and adjusting items
Impairment of property, plant and equipment 4 - (597) (597)
Amortisation of intangible assets excluding computer software 4 (1,208) (1,183) (2,368)
Adjusting items 4 (45) 22 (66)
Operating expenses (49,620) (50,679) (102,438)
Other income - gain on disposal of subsidiaries 7 2,212 16,115 16,329
Other income - gain on disposal of property, plant and equipment - 758 1,289
Other income - net gain on financing activities 4 - - 840
Operating profit 10,017 25,139 37,048
Net finance income/(expense) 12 (551) (928)
Profit before tax 4 10,029 24,588 36,120
Taxation (1,757) (1,687) (3,295)
Profit for the period attributable to owners of the parent 8,272 22,901 32,825
Earnings per share:
Basic (p) 6 9.40 26.14 37.46
Diluted (p) 6 9.19 25.92 36.98
Consolidated Statement of Comprehensive Income
Six months ended Six months ended Year
31 December 2022 31 December 2021 ended
30 June
2022
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
8,272 22,901 32,825
Profit for the period
Other comprehensive income:
Items that may be reclassified subsequently to the Income Statement
Fair value movements on interest rate swaps, net of tax - 389 -
Currency translation differences 8 341 2,353
Fair value movements of net investment hedges, net of tax - (164) (193)
Other comprehensive income for the period, net of tax 8 566 2,160
Total comprehensive income for the period attributable to owners of the parent 34,985
8,280 23,467
Items in the statement above are disclosed net of tax.
Consolidated Balance Sheet
31 December 2022 31 December 2021 30 June
2022
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Non-current assets
Goodwill 61,237 59,912 61,128
Intangible assets 8,300 12,986 9,427
Property, plant and equipment 8,192 7,909 6,876
Deferred consideration receivable 1,304 1,516 1,448
Derivative financial instruments - 537 -
Deferred tax assets 1,648 1,233 1,041
80,681 84,093 79,920
Current assets
Trade and other receivables 29,771 25,904 27,097
Deferred consideration receivable 677 250 250
Current tax assets 1,100 238 1,262
Cash and cash equivalents 22,922 24,160 19,785
Assets of disposal group held for sale - - 1,450
54,470 50,552 49,844
Total assets 135,151 134,645 129,764
Current liabilities
Trade and other payables (51,252) (51,561) (50,258)
Derivative financial instruments - (125) -
Lease liabilities (1,478) (2,243) (648)
Provisions (307) (307) (307)
Liabilities of disposal group held for sale - - (1,332)
(53,037) (54,236) (52,545)
Non-current liabilities
Borrowings - (12,734) -
Lease liabilities (8,140) (7,750) (6,862)
Deferred tax liabilities (1,469) (1,762) (2,040)
Provisions (1,075) (1,381) (1,228)
(10,684) (23,627) (10,130)
Total liabilities (63,721) (77,863) (62,675)
Net assets 71,430 56,782 67,089
Equity
Share capital 4,408 4,380 4,391
Share premium 45,553 45,225 45,553
Treasury and ESOT reserves (880) (960) (1,093)
Share based payments reserve 2,131 1,736 2,141
Translation reserve 4,430 2,410 4,422
Retained earnings 15,788 3,991 11,675
Total equity 71,430 56,782 67,089
Consolidated Statement of Changes in Equity
Share capital, share premium, treasury shares and ESOT shares Share based payments reserve Total equity
£'000 £'000 £'000
Translation reserve Retained earnings/ (accumulated losses)
£'000 £'000
At 30 June 2021 (audited) 48,904 1,390 2,069 (15,696) 36,667
Profit for the period - - - 22,901 22,901
Other comprehensive income for the period - - 341 225 566
48,904 1,390 2,410 7,430 60,134
Dividends paid - - - (3,399) (3,399)
Performance share plan awards vesting settled via ESOT 84 (105) - 21 -
ESOT share purchases (371) - - - (371)
Sale of treasury shares 28 - - - 28
Share based payments - 451 - - 451
Tax on share based payments - - - (61) (61)
At 31 December 2021 (unaudited) 48,645 1,736 2,410 3,991 56,782
Profit for the period - - - 9,924 9,924
Other comprehensive income/(expense) for the period - - 2,012 (418) 1,594
48,645 1,736 4,422 13,497 68,300
Dividends paid - - - (2,093) (2,093)
Sale of treasury shares 21 - - - 21
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 - 585 - - 585
Tax on share based payments - - - 119 119
48,851 2,141 4,422 11,675 67,089
At 30 June 2022 (audited)
Profit for the period - - - 8,272 8,272
Other comprehensive income for the period - - 8 - 8
48,851 2,141 4,430 19,947 75,369
Dividends paid - - - (5,091) (5,091)
Issue of share capital 17 - - - 17
Performance share plan awards vesting - (717) - 875 158
Save As You Earn options settlement via ESOT 86 (11) - (16) 59
Save As You Earn options settlement via treasury shares 127 - - (64) 63
Share based payments - 718 - - 718
Tax on share based payments - - - 137 137
At 31 December 2022 (unaudited) 49,081 2,131 4,430 71,430
15,788
Consolidated Cash Flow Statement
Six months ended Six months ended Year ended
31 December 31 December 2021 30 June 2022
2022
(unaudited) (unaudited) (audited)
Notes £'000 £'000 £'000
Cash flows from operating activities
Cash generated from operations before adjusting items 9 10,925 11,374 24,570
Cash flows for adjusting items - operating activities (4) (31) (342)
Cash flows from tax on share based payments (3) (4) (4)
Cash generated from operations 10,918 11,339 24,224
Interest received/(paid) 40 (302) (479)
Tax paid (2,468) (1,805) (3,397)
Net cash generated from operating activities 8,490 9,232 20,348
Cash flows from investing activities
Disposal of subsidiaries net of cash - 21,875 22,792
Disposal of cash held in subsidiary (737) - -
Deferred consideration received 125 125 250
Cash flows for adjusting items - investing activities (6) (92) (43)
Purchase of property, plant and equipment (131) (275) (440)
Proceeds from disposal of property, plant and equipment 10 3,439 3,493
Purchase of intangible assets (436) (988) (1,292)
Net cash (used in)/generated from investing activities (1,175) 24,084 24,760
Cash flows from financing activities
Dividends paid to owners of the parent (5,091) (3,399) (5,492)
Issue of new shares 587 - 340
Share issuance costs (14) - (28)
Purchase of shares by ESOT - (371) (371)
Payment of lease liabilities (347) (1,095) (3,752)
Cash flows for adjusting items - proceeds on disposal of interest rate swap - - 1,243
Fees relating to new and extended loan facility - (5) -
Decrease in bank loans - (8,000) (21,198)
Net cash used in financing activities (4,865) (12,870) (29,258)
Net increase in cash and cash equivalents 2,450 20,446 15,850
Cash and cash equivalents, net of bank overdrafts, at beginning of the period 3,730
20,543 3,730
Exchange (loss)/gain on cash and cash equivalents (71) (16) 205
Cash classified as held for sale - - 758
Cash and cash equivalents at end of the period 22,992 24,160 20,543
Reconciliation of net cash
Cash and cash equivalents at beginning of the period 19,785 7,374 7,374
Cash classified as held for sale at beginning of the period 758 - -
Bank overdrafts at beginning of the period - (3,644) (3,644)
Bank loans at beginning of the period - (20,960) (20,960)
Lease liabilities at beginning of the period (7,510) (10,742) (10,742)
Net cash/(debt) at beginning of the period 13,033 (27,972) (27,972)
Net increase in cash and cash equivalents 2,379 20,430 16,813
Net repayment in bank loans - 8,000 21,198
Exchange loss on bank loans - (202) (238)
Movement in lease liabilities (2,108) 749 3,232
Cash and cash equivalents at end of the period 22,922 24,160 19,785
Cash classified as held for sale at end of the period - - 758
Bank loans at end of the period - (13,162) -
Lease liabilities at end of the period (9,618) (9,993) (7,510)
Net cash at end of the period 13,304 1,005 13,033
Notes to the Financial Results
General information
The Company is a public limited company incorporated and domiciled in the UK.
The address of the Company's registered office is 10 Whitechapel High Street,
London, E1 8QS.
The Company is listed on the Main Market on the London Stock Exchange. The
Company is a provider of data, information, education and training in the
global Governance, Risk and Compliance ('GRC') markets.
This condensed consolidated interim financial information ('Interim
Information') was approved for issue by the Board of Directors on 17 February
2023.
The Interim Information is neither reviewed nor audited and does not comprise
statutory accounts within the meaning of Section 434 of the Companies Act
2006. Statutory accounts for the year ended 30 June 2022 were approved by the
Board of Directors on 21 September 2022 and subsequently filed with the
Registrar. The report of the auditors on those accounts was unqualified, did
not contain an emphasis of matter paragraph and did not contain any statement
under Section 498 of the Companies Act 2006.
1. Basis of preparation
This Interim Information for the six months ended 31 December 2022 has been
prepared in accordance with the Disclosure and Transparency Rules of the
Financial Conduct Authority and in accordance with IAS 34 'Interim Financial
Reporting'. The Interim Information should be read in conjunction with the
Annual Financial Statements for the year ended 30 June 2022 which have been
prepared in accordance with UK adopted international accounting standards ('UK
adopted IAS') and are available on the Group's website: wilmingtonplc.com.
The Group's forecast and projections, taking account of reasonably possible
changes in trading performance, show that the Group will be able to operate
well within the level of its current banking facilities, further supported by
the net cash position. The Directors have therefore adopted a going concern
basis in preparing the Interim Information.
2. Accounting policies
The accounting policies, significant judgements and key sources of estimation
adopted in the preparation of this Interim Report are consistent with those
applied by the Group in its consolidated financial statements for the year
ended 30 June 2022.
There has been no material impact on the financial statements of adopting new
standards or amendments.
Amended standards and interpretations not yet effective are not expected to
have a significant impact on the Group's consolidated financial statements.
3. Principal risks and uncertainties
The principal risks and uncertainties that affect the Group remain unchanged
from those stated on pages 27 to 32 of the strategic report in the Annual
Report and Financial Statements for the year ended 30 June 2022.
4. 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.
Adjusted profit before tax, adjusted EBITA, adjusted EBITDA and continuing
adjusted profit before tax reconcile to statutory profit before tax as
follows:
Six months ended Six months ended Year ended
31 December 2022 31 December 2021 30 June
2022
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
10,029 24,588 36,120
Profit before tax
Impairment of property, plant and equipment - 597 597
Amortisation of intangible assets excluding computer software 1,208 1,183 2,368
Adjusting items (included in operating expenses) 45 (22) 66
Other income - gain on disposal of subsidiaries (2,212) (16,115) (16,329)
Other income - gain on disposal of property, plant and equipment - (758) (1,289)
Other income - net gain on financing activities - - (840)
Adjusted profit before tax 9,070 9,473 20,693
Net finance (income)/expense (12) 551 928
Adjusted operating profit ('adjusted EBITA') 9,058 10,024 21,621
Depreciation of property, plant and equipment included in operating expenses 1,163 1,217 2,412
Amortisation of intangible assets - computer software 411 784 3,721
Adjusted EBITA before depreciation ('adjusted EBITDA') 10,632 12,025 27,754
Adjusted profit before tax 9,070 9,473 20,693
Remove operating profit from sold and closed businesses (181) (1,662) (2,089)
Continuing adjusted profit before tax 8,889 7,811 18,604
The following adjusting items have been charged to the Income Statement during
the period but are considered to be adjusting so are shown separately:
Six months ended Six months ended Year ended
31 December 31 December 30 June
2022 2021 2022
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Expense/(income) relating to strategic activities 45 (22) 66
Adjusting items (included in operating expenses) 45 (22) 66
Impairment of property, plant and equipment - 597 597
Amortisation of intangible assets excluding computer software 1,208 1,183 2,368
Total adjusting items (classified in profit before tax) 1,253 1,758 3,031
5. 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 Executive 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
Six months ended 31 December 2022 Six months ended 31 December 2021 Year ended 30 June 2022
(unaudited) (unaudited) (audited)
Revenue Contribution Revenue Contribution Revenue Contribution
£'000 £'000 £'000 £'000 £'000 £'000
Training & Education 28,581 6,221 29,867 7,096 61,464 15,998
Intelligence 28,844 5,768 29,078 5,616 59,564 11,359
Group total 57,425 11,989 58,945 12,712 121,028 27,357
Unallocated central overheads - (2,155) - (2,152) - (4,506)
Share based payments - (776) - (536) - (1,230)
57,425 9,058 58,945 10,024 121,028 21,621
Impairment of property, plant and equipment - (597)
(597)
Amortisation of intangible assets excluding computer software (1,208) (1,183) (2,368)
Adjusting items (included in operating expenses) (45) 22 (66)
Other income - gain on disposal of subsidiaries 2,212 16,115 16,329
Other income - gain on disposal of property, plant and equipment - 758 1,289
Other income - net gain on financing activities - - 840
Net finance income/(expense) 12 (551) (928)
Profit before tax 10,029 · 24,588 36,120
Taxation (1,757) (1,687) (3,295)
Profit for the financial period 8,272 22,901 32,825
There are no intra-segmental revenues which are material for disclosure.
Unallocated central overheads represent head office costs that are not
specifically allocated to segments. Total assets and liabilities for each
reportable segment are not presented, as such, this 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:
Six months ended Six months ended Year ended
31 December 31 December 30 June
2022 2021 2022
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
UK 30,819 30,874 64,320
Europe (excluding the UK) 10,756 11,922 25,809
North America 11,308 10,431 21,727
Rest of the World 4,542 5,718 9,172
Total revenue 57,425 58,945 121,028
Sterling makes up the largest portion of our ongoing revenue. In the current
period 14% of revenue was derived in US dollars, 12%
in Euros and 3% in Singapore dollars, no other currency was material.
6. Earnings per share
Adjusted earnings per share has been calculated using adjusted earnings
calculated as profit after taxation 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:
Six months ended Six months ended Year ended
31 December 2022 31 December 2021 30 June
2022
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
8,272 22,901 32,825
Earnings from continuing operations for the purpose of basic earnings per
share
Add/(remove):
Impairment of property, plant and equipment - 597 597
Amortisation of intangible assets excluding computer software 1,208 1,183 2,368
Adjusting items (included in operating expenses) 45 (22) 66
Other income - gain on disposal of subsidiaries (2,212) (16,115) (16,329)
Other income - gain on disposal of property, plant and equipment - (758) (1,289)
Other income - net gain on financing activities - - (840)
Tax effect of adjustments above (176) (253) (1,050)
Adjusted earnings for the purposes of adjusted earnings per share 7,137 7,533 16,348
Number Number Number
Weighted average number of ordinary shares for the purpose of basic and 88,027,119 87,603,917 87,632,022
adjusted earnings per share
Effect of dilutive potential ordinary shares:
Future exercise of share awards and options 1,966,227 745,931 1,126,918
Weighted average number of ordinary shares for the purposes of diluted 89,993,346 88,349,848 88,758,940
earnings per share
Basic earnings per share 9.40p 26.14p 37.46p
Diluted earnings per share 9.19p 25.92p 36.98p
Adjusted basic earnings per share ('adjusted earnings per share') 8.11p 8.60p 18.66p
Adjusted diluted earnings per share 7.93p 8.53p 18.42p
7. Disposal of subsidiary
On 30 December 2022 the Group disposed of its Spanish insurance business,
Inese for proceeds of £2.6m, net cash consideration of £1.9m, including
£0.4m deferred for one year. The disposal was executed by way of the sale of
100% of the equity shares. A gain of £2.2m arose on disposal after taking
into account £0.4m costs of disposal. As at the disposal date, the net assets
of Inese were £0.2m. The proceeds of the disposal were received in January
2023.
8. Related party transactions
The Company and its wholly owned subsidiary undertakings offer certain
group-wide purchasing facilities to the Company's other subsidiary
undertakings whereby the actual costs are recharged.
There were no (H1 FY22: £nil) transactions with related parties of key
management personnel in the period.
9. Cash generated from operations
Six months ended Six months ended Year ended
31 December 31 December 2021 30 June
2022
2022
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Profit before tax 10,029 24,588 36,120
Adjusting item - gain on disposal of subsidiaries (2,212) (16,115) (16,329)
Adjusting item - gain on disposal of property, plant and equipment - (758) (1,289)
Adjusting item - net gain on financing activities - - (840)
Adjusting items (included in operating expenses) 45 (22) 66
Depreciation of property, plant and equipment 1,163 1,217 2,412
Amortisation of intangible assets 1,619 1,967 6,089
Impairment of property, plant and equipment - 597 597
Non-adjusting profit on disposal of property, plant and equipment (11) (40) (71)
Share based payments (including social security costs) 776 536 1,230
Net finance (income)/expense (12) 551 928
Operating cash flows before movements in working capital 11,397 12,521 28,913
(Increase)/decrease in trade and other receivables (807) 2,905 1,621
Increase/(decrease) in trade and other payables 488 (3,898) (5,657)
Decrease in provisions (153) (154) (307)
Cash generated from operations before adjusting items 10,925 11,374 24,570
Cash conversion is calculated as a percentage of cash generated by operations
to adjusted EBITA as follows:
Six months ended Six months ended Year ended
31 December 2022 31 December 2021 30 June
2022
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Funds from operations before adjusting items:
Adjusted EBITA (note 4) 9,058 10,024 21,621
Share based payments (including social security costs) 776 536 1,230
Amortisation of intangible assets - computer software 411 784 3,721
Depreciation of property, plant and equipment included in operating expenses 1,163 1,217 2,412
Profit on disposal of property, plant and equipment (11) (40) (71)
Operating cash flows before movements in working capital 11,397 12,521 28,913
Net working capital movement (472) (1,147) (4,343)
Funds from operations before adjusting items 10,925 11,374 24,570
Cash conversion 121% 113% 114%
Free cash flow:
Operating cash flows before movement in working capital 11,397 12,521 28,913
Proceeds on disposal of property, plant and equipment 10 3,439 3,493
Net working capital movement (472) (1,147) (4,343)
Interest received/(paid) 40 (302) (479)
Payment of lease liabilities (347) (1,095) (3,752)
Tax paid (2,468) (1,805) (3,397)
Purchase of property, plant and equipment (131) (275) (440)
Purchase of intangible assets (436) (988) (1,292)
Free cash flow 7,593 10,348 18,703
END
1 (#_ftnref1) Continuing - eliminating the effects of the impact of
disposals; Organic - Continuing eliminating exchange rate fluctuations
2 (#_ftnref2) Adjusted profit before tax - see note 4
3 (#_ftnref3) Continuing adjusted basic earnings per share - see the
financial review; Adjusted basic earnings per share - see note 6
4 (#_ftnref4) Net cash includes cash and cash equivalents, bank loans
(excluding capitalised loan arrangement fees) and bank overdrafts but excludes
lease liabilities
5 (#_ftnref5) The effective tax rate is calculated as the total tax charge
divided by profit before tax
6 (#_ftnref6) The underlying tax rate is calculated as one minus the
adjusted profit after tax divided by the adjusted profit before tax - the tax
rate excluding the tax impact of adjusting items
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