REG - Wilmington PLC - Half-year Report
19/02/2024 07:00
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RNS Number : 3541D Wilmington PLC 19 February 2024
19 February 2024
Wilmington plc
Sustained double digit profits growth
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 2023 (H1 FY24).
Financial performance
H1 FY24 H1 FY23 Change
Continuing results 1
Revenue £41.4m £38.6m 7%
Adjusted PBT 2 £8.1m £6.6m 23%
Adjusted basic EPS 3 6.86p 6.10p 12%
Interim dividend 3.00p 2.70p 11%
Statutory results
Revenue (total) £59.1m £57.4m
PBT (total) £10.1m £10.0m
Basic EPS 8.00p 9.40p
Adjusted basic EPS 9.17p 8.11p
Highlights
· Strong continuing and organic revenue growth, both up 7% - driven
by strong demand in Training & Education and Financial Services in
Intelligence division
§ Recurring revenue from continuing businesses up 11%, underpinned by strong
retention rates
§ Repeat revenues, including recurring revenues of 36%, now 73% of continuing
revenues (77% in FY23), due to billing timing
· Continuing adjusted profit before tax up 23% to £8.1m
· Dividend increased by 11% in line with profits
· Robust balance sheet - net cash 4 at 31 Dec 23 of £28.0m (31
Dec 22: £22.9m; 30 Jun 23: £42.2m)
· Continuing active portfolio management: acquisition of Astutis
for £21.5m (Nov '23), disposal of MiExact for £9.6m (Jan '24) and initiated
sale process of Healthcare business in Nov '23
· Significant progress made in establishing single Training and
Education technology platform this financial year
Mark Milner, Chief Executive Officer, commented:
"H1 was another period of strong sustainable organic growth, both for revenue
and profits as well as continued good cash generation, across all of our
continuing businesses. We have a notably strong balance sheet which leaves us
well placed to continue to invest across the business, in both organic and
inorganic opportunities.
"We continue to actively manage our portfolio of businesses with one earnings
enhancing acquisition and one disposal. We have also initiated a sale process
for our Healthcare division, after a period of restructuring which put that
business in a much stronger position.
"Our strategy is clear: to grow the business profitably across the rapidly
expanding GRC landscape by a combination of acquisitions, which provide
attractive returns on investment, and investing in our operations and
infrastructure, as well as actively managing our portfolio in line with our
required characteristics.
"Trading in the current financial year continues to be in line with
expectations."
The information contained within this announcement is deemed to constitute
inside information as stipulated under the Market Abuse Regulations (EU) No.
596/2014. Upon the publication of this announcement this inside information is
now considered to be in the public domain.
For further information, contact:
Wilmington plc 020 7422 6800
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.
Overview
We have continued to deliver solid and sustainable organic revenue growth and
double-digit profit improvement whilst also investing in our portfolio of
businesses and infrastructure. Demand has been particularly strong in our
Training & Education division and in Financial Services within our
Intelligence division.
Continuing revenue was up 7% at £41.4m with organic revenue growth of 7%,
after removing the impact of currency movements. Reported total Group revenue,
including business sold and discontinued, was £59.1m (H1 FY23: £57.4m).
Recurring revenues from continuing businesses grew 11% with strong retention
rates continuing, highlighting the resilience of the Group's business model.
Recurring revenues represent 36% of total ongoing revenues (34% in H1 FY23).
Repeat continuing revenues, including the recurring revenues from existing
customers, made up 73% of our revenues in H1 FY24 (77% in FY23). This small
reduction reflects the timing of billings, not a decrease of repeat business.
With further margin improvements in the Intelligence division, continuing
adjusted profit before tax was up 23% to £8.1m (H1 FY23: £6.6m) and
continuing adjusted basic earnings per share by 12% to 6.86p (H1 FY23: 6.10p).
Operating cash conversion remained strong at 92%, with net cash excluding
lease liabilities of £28.0m (30 June 2023: £42.2m). Usual first half
outflows of working capital will be offset by increased revenue collections in
H2, when most subscriptions are billed and collected.
The Group acquired Astutis in November 2023 to deliver on our strategy to
consolidate and strengthen our presence in the GRC market.
The interim dividend is being increased by 11% to 3.00p (H1 FY23: 2.70p), 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.
We focus 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: a GRC focus operating in regulated markets, a differentiated
offering, attractive markets, strong leadership, digital and data capabilities
and a strong financial model exhibiting growth and strong profitability.
The acquisition of Astutis in November 2023 meets all six of these
characteristics and brings continuing revenue and profit growth to the Group.
The business has demonstrated a strong track record of organic growth over a
number of years and strengthens our portfolio of GRC training and education
solutions by expanding our capabilities into the attractive Health, Safety and
Environmental markets. The acquisition is expected to be earnings enhancing in
the first full year of ownership.
In January 2024, we have sold MiExact from our Intelligence division for
£9.6m in cash as the business had been identified as not meeting the six
characteristics. We have also decided to sell our Healthcare businesses for
the same reason. The process for that disposal is well underway.
We intend to use our capital to acquire suitable GRC businesses to enhance and
widen the Group's capabilities and rate of profitable growth to improve
shareholder returns, although will continue to remain disciplined as valuation
expectations remain high. We will continue to apply high levels of scrutiny in
respect of target suitability and multiples paid.
We continue to invest in our priority ESG initiatives, as our responsible
business strategy underpins the delivery of our broader strategic objectives.
Current trading and outlook
Trading in the current financial year continues to be in line with
expectations.
Divisional review
Training & Education
H1 FY24 H1 FY23 Absolute Organic
£'m £'m Variance Variance
Revenue
Global 13.1 11.8 11% 7%
UK & Ireland 12.7 11.9 8% 8%
North America 5.0 4.9 1% 8%
Continuing revenue 30.8 28.6 8% 8%
Operating profit 6.5 6.2 5% 7%
Margin 22% 22%
Total revenue including Astutis 30.8 28.6 8%
Total operating profit 6.5 6.2 5%
Continuing revenues grew 8% organically. This was led by a strong performance
in UK and Ireland where, in particular, Bond Solon in the Legal sector saw
strong demand for its services. Repeat revenues increased to 72% (H1 FY23 -
71%) of the total.
North America grew at 8% when currency fluctuations are excluded, with growth
in delegate attendance of events boosting revenues. In Global, growth was led
by the European sales, which continued to see strong demand from the financial
services market.
Organic operating profit increased by 7% as a result of organic revenue
growth. Profit margins remain at 22% and are expected to increase in H2 when
the majority of revenue in North America is delivered.
Statutory figures include a small contribution from Astutis for the first few
weeks of ownership. In the 12-month period to 30 June 2023, Astutis reported
unaudited revenues of £7.4m and profit before tax of £2.0m.
We have made significant progress in establishing a single Training and
Education technology platform with the main project delivering this financial
year.
Intelligence
H1 FY24 H1 FY23 Absolute Organic
£'m £'m Variance Variance
Continuing businesses
Revenue
Financial Services & Other 10.6 10.0 5% 4%
Operating profit 3.9 3.3 18% 15%
Margin 37% 33%
Discontinued/sold businesses Revenue
Healthcare 15.2 15.1 1%
MiExact 2.5 2.3 7%
Inese - 1.4 -
Total revenue 28.3 28.8 (2%)
Total operating profit 6.8 5.8 18%
Continuing revenues in the Intelligence division are now focussed on Financial
Services, where growth has been maintained with continuing strong demand from
customers, particularly in the Insurance sector.
Recurring revenues grew 11% and repeat revenues decreased to 73% of the total
(H1 FY23 - 83%) due to billing timing (repeat revenues are measured on
billing). Profit margins also improved as we continue to invest in automation.
Healthcare has been classified as a discontinued operation under IFRS 5
because it is in the process of being sold. MiExact has been sold but does not
qualify as a discontinued operation under IFRS 5 because it does not meet the
criteria of being a significant line of business.
The sale and identification for sale of lower margin businesses has resulted
in a notable improvement in margins in the division.
Financial review
Other income and finance income
Other income represents a gain of £0.8m from the sale of a building (H1 FY23:
£2.2m from the disposal of a subsidiary, Inese).
Net finance income of £0.8m (H1 FY23: £0.0m) was achieved due to having no
debt and cash to deposit in interest-bearing accounts.
Profit before taxation
Continuing adjusted profit before tax was up 23% to £8.1m (H1 FY23: £6.6m)
with statutory continuing profit before tax of £8.1m (H1 FY23: £8.8m).
Taxation
The underlying tax rate 5 , which ignores the tax effects of adjusting items,
is 25% (H1 FY23: 19%). The increase reflects the UK corporation tax increase
to 25%.
The tax charge excluding discontinued operations is £2.3m (H1 FY23: £1.2m)
with an overall effective tax rate 6 (#_ftn6) of 28% (H1 FY23: 13%). The
lower effective tax rate in the prior period was due to the lower UK
corporation tax rate and other income (from the sale of a subsidiary) being
non-taxable. The current year tax charge includes tax on the sale of a
building.
Earnings per share
Continuing adjusted basic earnings per share, excluding the results of sold
and discontinued businesses, increased by 12% to 6.86p (H1 FY23: 6.10p),
reconciliation below. Reported earnings per share 8.00p (H1 FY23: 9.40p).
H1 FY24 H1 FY23
£'m £'m
Adjusted earnings (note 6) 6.4 5.9
Remove profit after tax of sold and discontinued businesses (0.3) (0.5)
Continuing adjusted earnings 6.1 5.4
Number Number Variance
Weighted average number of ordinary shares (note 6) 88,964,817 88,027,119
Continuing adjusted basic earnings per share 6.86p 6.10p 12%
Dividend
The Board has increased the interim dividend by 11% to 3.00p (H1 FY23: 2.70p),
in line with profits. It will be paid on 10 April 2024 to shareholders on the
share register as at 1 March 2024, with an associated ex-dividend date of 29
February 2024.
Balance sheet and cashflow
Cash generation improved due to the strong trading performance with operating
cash conversion remaining strong at 92%, with net cash excluding lease
liabilities of £28.0m (30 June 2023: £42.2m).
Responsibility statement of the Directors in respect of the half year results
to 31 December 2023
We confirm that, to the best of our knowledge:
· The Condensed set of financial statements has been prepared in
accordance with IAS 34 Interim Financial Reporting
· The interim management report includes a fair review of the
information required by DTR 4.2.7R and DTR 4.2.8R.
The Directors are responsible for the maintenance and integrity of the
corporate and financial information included on the company's website.
Legislation in the United Kingdom governing the preparation and dissemination
of financial information differs from legislation in other jurisdictions.
Consolidated Income Statement
Notes Six months Six months Year
ended ended ended
31 December 31 December 30 June
2023 2022 2023
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Continuing operations
Revenue 5 43,909 42,418 93,065
Operating expenses before amortisation of intangibles excluding computer (36,254) (35,192) (73,792)
software, impairment and adjusting items
Amortisation of intangible assets excluding computer software 4 (483) (556) (1,078)
Adjusting items 4 (674) (45) (147)
Operating expenses (37,411) (35,793) (75,017)
Other income - gain on disposal of property, plant and equipment 820 - -
Other income - gain on disposal of subsidiaries - 2,212 2,212
Operating profit 7,318 8,837 20,260
Finance income 927 297 478
Finance expense (96) (285) (246)
Profit before tax 4 8,149 8,849 20,492
Taxation (2,297) (1,177) (3,470)
Profit for the period from continuing operations 5,852 7,672 17,022
Profit for the period from discontinued operations 1,266 600 3,173
Profit for the period attributable to owners of the parent 7,118 8,272 20,195
Earnings per share from continuing and discontinued operations:
Basic (p) 6 8.00p 9.40p 22.94p
Diluted (p) 6 7.85p 9.19p 22.38p
Earnings per share from continuing operations:
Basic (p) 6 6.58p 8.72p 19.34p
Diluted (p) 6 6.47p 8.54p 18.89p
Consolidated Statement of Comprehensive Income
Six months Six months Year
ended ended ended
31 December 31 December 30 June
2023 2022 2023
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Profit for the period 7,118 8,272 20,195
Other comprehensive income/(expense):
Items that may be reclassified subsequently to the Income Statement
Currency translation differences 253 8 (991)
Other comprehensive income/(expense) for the period, net of tax 253 8 (991)
Total comprehensive income for the period attributable to owners of the parent 19,204
7,371 8,280
Consolidated Balance Sheet
31 December 31 December 30 June
2023 2022 2023
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Non-current assets
Goodwill 60,993 61,237 60,561
Intangible assets 9,763 8,300 5,734
Property, plant and equipment 5,075 8,192 7,015
Deferred consideration receivable 899 1,304 1,152
Deferred tax assets 148 1,648 925
76,878 80,681 75,387
Current assets
Trade and other receivables 20,790 29,771 27,391
Deferred consideration receivable 500 677 752
Current tax assets - 1,100 -
Cash and cash equivalents 23,875 22,922 42,173
Assets of disposal groups held for sale 27,031 - -
72,196 54,470 70,316
Total assets 149,074 135,151 145,703
Current liabilities
Trade and other payables (45,385) (51,252) (55,966)
Lease liabilities (1,413) (1,478) (975)
Current tax liabilities (86) - (44)
Provisions (307) (307) (307)
Liabilities of disposal groups held for sale (11,797) - -
(58,988) (53,037) (57,292)
Non-current liabilities
Lease liabilities (4,478) (8,140) (6,235)
Deferred tax liabilities (1,525) (1,469) (607)
Provisions (768) (1,075) (921)
(6,771) (10,684) (7,763)
Total liabilities (65,759) (63,721) (65,055)
Net assets 83,315 71,430 80,648
Equity
Share capital 4,479 4,408 4,408
Share premium 47,463 45,553 45,553
Treasury and ESOT reserves (703) (880) (786)
Share based payments reserve 2,058 2,131 2,635
Translation reserve 3,684 4,430 3,431
Retained earnings 26,334 15,788 25,407
Total equity 83,315 71,430 80,648
Consolidated Statement of Changes in Equity
Share capital, share premium, treasury shares and ESOT shares Share Total
£'000 based equity
payments Translation Retained £'000
reserve reserve earnings
£'000 £'000 £'000
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
Profit for the period - - - 11,923 11,923
Other comprehensive expense for the period - - (999) - (999)
49,081 2,131 3,431 27,711 82,354
Dividends paid - - - (2,371) (2,371)
Issue of share capital - - - - -
Performance share plan awards vesting - - - (21) (21)
Save As You Earn options settlement via ESOT 68 - - - 68
Save As You Earn options settlement via treasury shares 26 - - - 26
Share based payments - 504 - - 504
Tax on share based payments - - - 88 88
49,175 2,635 3,431 25,407 80,648
At 30 June 2023 (audited)
Profit for the period - - - 7,118 7,118
Other comprehensive income for the period - - 253 - 253
49,175 2,635 3,684 32,525 88,019
Dividends paid - - - (6,473) (6,473)
Issue of share capital 71 - - - 71
Issue of share premium 1,910 - - - 1,910
Performance share plan awards vesting settlement via share issue - (1,109) - (139) (1,248)
Performance share plan options settlement via ESOT 67 (67) - - -
Save As You Earn options vesting settlement via share issue - (174) - 212 38
Save As You Earn options settlement via ESOT 16 (16) - - -
Share based payments - 789 - - 789
Tax on share based payments - - - 209 209
At 31 December 2023 (unaudited) 51,239 2,058 3,684 26,334 83,315
Consolidated Cash Flow Statement
Six months Six months Year
ended ended ended
31 December 31 December 30 June
2023 2022 2023
(unaudited) (unaudited) (audited)
Notes £'000 £'000 £'000
Cash flows from operating activities
Cash generated from operations before adjusting items 11 9,299 10,925 33,205
Cash flows for adjusting items - operating activities (535) (4) (375)
Cash flows from tax on share based payments (222) (3) (2)
Cash generated from operations 8,542 10,918 32,828
Interest received 858 40 344
Tax paid (3,557) (2,468) (3,268)
Net cash generated from operating activities 5,843 8,490 29,904
Cash flows from investing activities
Disposal of subsidiaries net of cash - - 1,549
Purchase of businesses net of cash acquired (14,749) - -
Disposal of cash held in subsidiary - (737) -
Deferred consideration received 552 125 250
Cash flows for adjusting items - investing activities (124) (6) (6)
Purchase of property, plant and equipment (77) (131) (461)
Proceeds from disposal of property, plant and equipment 884 10 13
Purchase of intangible assets (471) (436) (595)
Net cash (used in)/generated from investing activities (13,985) (1,175) 750
Cash flows from financing activities
Dividends paid to owners of the parent (6,473) (5,091) (7,462)
Cash received from sale of shares for share vesting 927 587 573
Share issuance costs (70) (14) (14)
Payment of lease liabilities (399) (347) (2,109)
Net cash used in financing activities (6,015) (4,865) (9,012)
Net (decrease)/increase in cash and cash equivalents, net of bank overdrafts (14,157) 2,450 21,642
Cash and cash equivalents, net of bank overdrafts, at beginning of the period 42,173 20,543
20,543
Exchange gain/(loss) on cash and cash equivalents 5 (71) (12)
Cash and cash equivalents, net of bank overdrafts at end of the period from 28,021 22,992 42,173
continuing and discontinued operations
Reconciliation of net cash
Cash and cash equivalents at beginning of the period 42,173 19,785 19,785
Cash classified as held for sale at beginning of the period - 758 758
Lease liabilities at beginning of the period (7,210) (7,510) (7,510)
Net cash at beginning of the period 34,963 13,033 13,033
Net (decrease)/increase in cash and cash equivalents, net of bank overdrafts (14,152) 2,379 21,630
Movement in lease liabilities 1,319 (2,108) 300
Cash and cash equivalents at end of the period 23,875 22,922 42,173
Cash classified as held for sale at end of the period 4,146 - -
Lease liabilities at end of the period (5,891) (9,618) (7,210)
Net cash at end of the period 22,130 13,304 34,963
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 16 February
2024.
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 2023 were approved by the
Board of Directors on 22 September 2023 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 2023 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 2023 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 its 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 2023.
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 41 to 49 of the strategic report in the Annual
Report and Financial Statements for the year ended 30 June 2023.
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:
· 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
· 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:
From continuing operations: Six months Six months Year
ended ended ended
31 December 31 December 30 June
2023 2022 2023
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Profit before tax 8,149 8,849 20,492
Amortisation of intangible assets excluding computer software 483 556 1,078
Adjusting items (included in operating expenses) 674 45 147
Other income - gain on disposal of property, plant and equipment (820) - -
Other income - gain on disposal of subsidiaries - (2,212) (2,212)
Adjusted profit before tax 8,486 7,238 19,505
Net finance income (831) (12) (232)
Adjusted operating profit ('adjusted EBITA') 7,655 7,226 19,273
Depreciation of property, plant and equipment included in operating expenses 820 1,063 2,121
Amortisation of intangible assets - computer software 179 328 1,525
Adjusted EBITA before depreciation ('adjusted EBITDA') 8,654 8,617 22,919
Adjusted profit before tax 8,486 7,238 19,505
Remove operating profit from sold, closed & discontinued businesses (379) (620) (1,371)
Continuing adjusted profit before tax 8,107 6,618 18,134
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 Six months Year
ended ended ended
31 December 31 December 30 June
2023 2022 2023
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Expense relating to strategic activities 674 45 147
Adjusting items (included in operating expenses) 674 45 147
Amortisation of intangible assets excluding computer software 483 556 1,078
Total adjusting items (classified in profit before tax) 1,157 601 1,225
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), USA and
the Rest of the World.
(a) Business segments
Six months ended Six months ended Year ended
31 December 2023 31 December 2022 30 June 2023
(unaudited) (unaudited) (audited)
From continuing operations: Revenue Contribution Revenue Contribution Revenue Contribution
£'000 £'000 £'000 £'000 £'000 £'000
Training & Education 30,838 6,510 28,581 6,221 64,872 16,066
Intelligence 13,071 4,282 13,837 3,936 28,193 8,425
Total continuing 43,909 10,792 42,418 10,157 93,065 24,491
Unallocated central overheads - (2,188) - (2,155) - (3,703)
Share based payments - (949) - (776) - (1,515)
43,909 7,655 42,418 7,226 93,065 19,273
Amortisation of intangible assets excluding computer software (483) (556) (1,078)
Adjusting items (included in operating expenses) (674) (45) (147)
Other income - gain on disposal of property, plant and equipment 820 - -
Other income - gain on disposal of subsidiaries - 2,212 2,212
Net finance income 831 12 232
Profit before tax from continuing operations 8,149 8,849 20,492
Taxation (2,297) (1,177) (3,470)
Profit for the financial period from continuing operations 5,852 7,672 17,022
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 Six months Year
ended ended ended
31 December 31 December 30 June
2023 2022 2023
(unaudited) (unaudited) (audited)
From continuing operations: £'000 £'000 £'000
UK 25,284 21,432 49,441
Europe (excluding the UK) 5,295 5,700 10,481
USA 8,686 10,901 24,050
Rest of the World 4,644 4,385 9,093
Continuing revenue 43,909 42,418 93,065
Sterling makes up the largest portion of our ongoing revenue. In the current
period 16% of revenue was derived in US 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:
· 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
· net finance income.
The calculation of the basic and diluted earnings per share is based on the
following data:
Six months Six months Year
ended ended ended
31 December 2023 31 December 2022 30 June
2023
(unaudited) (unaudited) (audited)
Continuing operations: £'000 £'000 £'000
Earnings from continuing operations for the purpose of basic earnings per 5,852 7,672 17,022
share
Add/(remove):
Amortisation of intangible assets excluding computer software 483 556 1,078
Adjusting items (included in operating expenses) 674 45 147
Other income - gain on disposal of property, plant and equipment (820) - -
Other income - gain on disposal of subsidiaries - (2,212) (2,212)
Tax effect of adjustments above 194 (176) (1,598)
Adjusted earnings for the purposes of adjusted earnings per share 6,383 5,885 14,437
Continuing and discontinued operations: £'000 £'000 £'000
Earnings from total operations for the purpose of basic earnings per share 7,118 8,272 20,195
Add/(remove):
Amortisation of intangible assets excluding computer software 996 1,208 2,381
Adjusting items (included in operating expenses) 674 45 147
Other income - gain on disposal of property, plant and equipment (820) - -
Other income - gain on disposal of subsidiaries - (2,212) (2,212)
Tax effect of adjustments above 194 (176) (1,598)
Adjusted earnings for the purposes of adjusted earnings per share 8,162 7,137 18,913
Continuing operations: Number Number Number
Weighted average number of ordinary shares for the purpose of basic and 88,964,817 88,027,119 88,027,119
adjusted earnings per share
Effect of dilutive potential ordinary shares:
Future exercise of share awards and options 1,530,678 1,845,782 2,096,729
Weighted average number of ordinary shares for the purposes of diluted 90,495,495 89,872,901 90,123,848
earnings per share
Continuing and discontinued operations: Number Number Number
Weighted average number of ordinary shares for the purpose of basic and 88,964,817 88,027,119 88,027,119
adjusted earnings per share
Effect of dilutive potential ordinary shares:
Future exercise of share awards and options 1,704,638 1,966,227 2,217,174
Weighted average number of ordinary shares for the purposes of diluted 90,669,455 89,993,346 90,244,293
earnings per share
Continuing operations:
Basic earnings per share 6.58p 8.72p 19.34p
Diluted earnings per share 6.47p 8.54p 18.89p
Adjusted basic earnings per share ('adjusted earnings per share') 7.17p 6.69p 16.40p
Adjusted diluted earnings per share 7.05p 6.55p 16.02p
Continuing and discontinued operations:
Basic earnings per share 8.00p 9.40p 22.94p
Diluted earnings per share 7.85p 9.19p 22.38p
Adjusted basic earnings per share ('adjusted earnings per share') 9.17p 8.11p 21.49p
Adjusted diluted earnings per share 9.00p 7.93p 20.96p
7. Acquisition of Astutis
On 23 November 2023, the Group acquired 100% of the issued share capital of
Astutis Limited ("Astutis"), a Company based in the United Kingdom, for an
initial consideration of £16.8m. In addition, under the terms of the
acquisition, there are two potential deferred payments of up to £4.7m based
on Astutis' performance in each of the two years ending 30 June 2025 and 30
June 2026.
Astutis, which offers training for a range of globally recognised and
regulated health, safety and environmental qualifications, strengthens
Wilmington's portfolio of GRC training and education solutions by expanding
its capabilities into the health, safety and environmental markets. The
acquisition is part of Wilmington's strategy to focus on consolidating its
already strong presence in the large, growing and rapidly evolving GRC
markets. These markets are underpinned by strong macro drivers, particularly
the increasing volume and enforcement of regulation, complex geopolitical
landscape, increased importance of ESG and widespread adoption of
technological and data-driven compliance solutions.
The process to measure the fair values of the assets acquired and liabilities
assumed is not yet finalised in respect of the acquisition and accordingly the
fair values measured at the acquisition date are provisional amounts. In
accordance with IFRS 3 until the assessment is complete the measurement period
will remain open up to a maximum of 12 months from the acquisition date so
long as information remains outstanding.
Based on the provisional view, the fair value of the net assets acquired in
the business at acquisition date was £7.8m, resulting in goodwill on
acquisition of £12.4m. Acquisition related charges include transaction costs
of £0.6m relating to the acquisition of Astutis. The results of the
acquisition included in the Group's consolidated results are revenue of £0.6m
and an operating result of £0.0m.
8. Discontinued operations and disposal groups held for sale
During the period, the Healthcare and MiExact businesses, which are part of
the Intelligence Division, have been classified as disposal groups held for
sale under IFRS 5.
The Group is 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. Consequently, as a result of this assessment, the
Board decided to exit the Healthcare and MiExact businesses.
Furthermore, the Healthcare business has been classified as a discontinued
operation in the period with the financial results, including the
comparatives, presented separately. The operation meets the IFRS 5 definition
as a discontinued operation due to it being a separate major line of business
and part of single coordinated disposal plan.
The major classes of assets and liabilities comprising the disposal groups
held for sale are as follows:
31 December 2023
(unaudited)
£'000
Goodwill 11,897
Intangible assets 1,834
Property, plant and equipment 1,512
Trade and other receivables 7,246
Deferred tax asset 234
Current tax asset 162
Cash and cash equivalents 4,146
Assets of disposal groups held for sale 27,031
Trade and other payables (10,440)
Lease liabilities (1,357)
Liabilities of disposal groups held for sale (11,797)
The table below shows the results of the discontinued operation, which is
included separately in the Consolidated Income Statement.
Six months Six months Year
ended ended ended
31 December 31 December 30 June
2023 2022 2023
(unaudited) (unaudited) (unaudited)
£'000 £'000 £'000
Healthcare
Revenue 15,172 15,007 30,432
Operating expenses before amortisation of intangibles excluding computer (12,665) (13,175) (25,599)
software
Amortisation of intangible assets excluding computer software (513) (652) (1,303)
Operating expenses (13,178) (13,827) (26,902)
Operating profit 1,994 1,180 3,530
Profit before tax 1,994 1,180 3,530
Taxation (728) (580) (357)
Profit after tax 1,266 600 3,173
Six months Six months Year
ended ended ended
31 December 31 December 30 June 2023
2023 2022 (unaudited)
(unaudited) (unaudited)
£'000 £'000 £'000
Healthcare
Net cash (used in)/generated from operating activities (2,825) 76 4,070
Net cash used in investing activities (8) (16) (164)
Net cash used in financing activities (93) (88) (176)
Net (decrease)/increase in cash & cash equivalents (2,926) (28) 3,730
9. Events after the reporting period
On 31 January 2024, the MiExact business was sold for consideration of £9.6m
in cash, subject to working capital adjustments. The consideration consists of
£6.6m of cash on completion and £3.0m of loan notes with a 7% coupon,
deferred for up to three years. At the date of this announcement, the initial
accounting for the business disposal is incomplete and accordingly, the Group
has not finalised the gain on disposal.
10. 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 FY23: £nil) transactions with related parties of key
management personnel in the period.
11. Cash generated from operations
Six months Six months Year
ended ended ended
31 December 2023 31 December 2022 30 June
2023
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
From continuing and discontinued operations:
Profit before tax from continuing operations 8,149 8,849 20,492
Profit before tax from discontinued operations 1,994 1,180 3,530
Adjusting item - gain on disposal of subsidiaries - (2,212) (2,212)
Adjusting item - gain on disposal of property, plant and equipment (820) - -
Adjusting items (included in operating expenses) 674 45 147
Depreciation of property, plant and equipment 925 1,163 2,321
Amortisation of intangible assets 1,186 1,619 4,071
Non-adjusting profit on disposal of property, plant and equipment - (11) (36)
Share based payments (including social security costs) 949 776 1,515
Net finance income (831) (12) (232)
Operating cash flows before movements in working capital 12,226 11,397 29,596
Decrease/(increase) in trade and other receivables 1,172 (807) (107)
(Decrease)/increase in trade and other payables (3,946) 488 4,023
Decrease in provisions (153) (153) (307)
Cash generated from operations before adjusting items 9,299 10,925 33,205
Cash conversion is calculated as a percentage of cash generated by operations
to adjusted EBITA as follows:
Six months ended Six months ended Year
31 December 2023 31 December 2022 ended
(unaudited) (unaudited) 30 June
£'000 £'000 2023
(audited)
£'000
From continuing and discontinued operations:
Funds from operations before adjusting items:
Adjusted EBITA from continuing operations (note 4) 7,655 7,240 19,273
Adjusted EBITA from discontinued operations 2,507 1,818 4,833
Share based payments (including social security costs) 949 776 1,515
Amortisation of intangible assets - computer software 190 411 1,690
Depreciation of property, plant and equipment included in operating expenses 925 1,163 2,321
Non-adjusting profit on disposal of property, plant and equipment - (11) (36)
Operating cash flows before movements in working capital 12,226 11,397 29,596
Net working capital movement (2,927) (472) 3,609
Funds from operations before adjusting items 9,299 10,925 33,205
Cash conversion 92% 121% 138%
Free cash flow:
Operating cash flows before movement in working capital 12,226 11,397 29,596
Proceeds on disposal of property, plant and equipment 884 10 13
Net working capital movement (2,927) (472) 3,609
Interest received 858 40 344
Payment of lease liabilities (399) (347) (2,109)
Tax paid (3,557) (2,468) (3,268)
Purchase of property, plant and equipment (77) (131) (461)
Purchase of intangible assets (471) (436) (595)
Free cash flow 6,537 7,593 27,129
1 Continuing - eliminating the effects of the impact of disposals; Organic -
Continuing, eliminating acquisitions and exchange rate fluctuations
2 Adjusted profit before tax - see note 4
3 Continuing adjusted basic earnings per share - see the financial review;
Adjusted basic earnings per share - see note 6
4 Net cash includes cash and cash equivalents, bank loans (excluding
capitalised loan arrangement fees) and bank overdrafts but excludes lease
liabilities
5 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
6 The effective tax rate is calculated as the total tax charge divided by
profit before tax
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