REG - Wilmington PLC - Half-year Report
17/02/2025 07:00
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RNS Number : 2258X Wilmington PLC 17 February 2025
17 February 2025
Wilmington plc
Sustained double digit profit 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 2024 (H1 FY25).
Financial performance
H1 FY25 H1 FY24 Change
Ongoing results 1
Revenue £44.9m £38.7m 16%
Adjusted PBT 2 £11.4m £8.2m 39%
Adjusted PBT margin 25% 21% 4ppt
Adjusted basic EPS 3 9.59p 6.83p 40%
Interim dividend 3.00p 3.00p -
Net cash 4 £31.3m £28.0m
Statutory continuing results
Revenue £46.6m £43.9m 6%
PBT £5.2m £8.1m (36%)
Basic EPS 2.88p 6.58p (56%)
Adjusted basic EPS 9.20p 7.17p 28%
Highlights
· Strong ongoing revenue growth, up 16%. Organic revenue growth up
3%.
§ Recurring revenue 5 from organic businesses up 6%, underpinned by strong
retention rates.
§ Repeat revenues 6 , including organic recurring revenues of 38%, now 72% of
continuing revenues (71% in H1 FY24).
· Ongoing adjusted profit before tax up 39% to £11.4m and ongoing
adjusted profit before tax margin up 4ppt to 25%.
· Robust balance sheet with net cash at 31 December 2024 £31.3m
(31 Dec 23: £28.0m; 30 Jun 24: £67.8m) reflecting strong trading performance
and cash conversion offset by the net cash outflow from portfolio acquisition
and disposals.
· Continued portfolio enhancement with the acquisition of Phoenix
Health & Safety in October 2024, expanding position in the growing HSE
(Health, Safety and Environmental) training market, improving Group growth
rates.
· Continued investment in the development of single technology
platform for the whole Group.
Mark Milner, Chief Executive Officer, commented:
"We have delivered another strong financial performance, particularly
profitability and earnings. Our margin also continued to improve.
"We have also continued to execute on our strategy of replacing low growth and
low margin businesses with scalable high growth, high margin businesses, which
are enhancing the quality of the Group.
"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.
"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 0121 355 0900
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 over 600 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 continuing to invest in our
portfolio of businesses and infrastructure.
Ongoing revenue was up 16% at £44.9m with organic revenue growth of 3%, after
removing the impact of acquisitions and currency movements.
Recurring revenues from organic businesses grew 6% with strong retention rates
continuing, highlighting the resilience of the Group's business model.
Recurring revenues represent 38% of organic revenue (36% in H1 FY24). Repeat
continuing revenues, including the recurring revenues from existing customers,
made up 72% of our revenues in H1 FY25 (71% in FY24).
With further margin improvements, ongoing adjusted profit before tax was up
39% to £11.4m (H1 FY24: £8.2m) and ongoing adjusted basic earnings per share
by 40% to 9.59p (H1 FY24: 6.83p). The interim dividend is being kept at the
same level as last year at 3.00p (H1 FY24: 3.00p), reflecting our aim to keep
dividend cover of at least 2.
Operating cash conversion was 72%, with net cash excluding lease liabilities
of £31.3m (30 June 2024: £67.8m) with the cash reduction due to the £29.2m
spend on the acquisition of Phoenix Health & Safety net of cash received.
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 Phoenix Health & Safety in October 2024 for an initial
consideration of £30.25m to deliver on our strategy to consolidate and
strengthen our presence in the GRC market. The acquisition strengthens
Wilmington's capabilities in the provision of must-have training and education
to regulated customers. It also expands the Group's position in the growing
HSE training market, alongside Astutis, which was acquired in November 2023.
Strategic and operational progress
Our strategy is to grow revenues and profits both organically and through
acquisitions 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 Phoenix Health & Safety in October 2024 meets all six
of these characteristics. 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 in the
attractive HSE markets, alongside Astutis, which was acquired in November
2023. The acquisition is already showing good growth and is expected to be
earnings enhancing in the first full year of ownership.
We intend to use our capital to acquire further suitable GRC businesses to
enhance and widen the Group's capabilities and rate of profitable growth to
improve shareholder returns. Although we will continue to remain disciplined
as valuation expectations continue to 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
H1 FY25 H1 FY24 Absolute variance Organic variance
£'m £'m % %
Ongoing revenue
HSE 6.1 0.6 1003%
Legal 7.0 7.3 (5%) (5%)
Insurance 10.7 11.4 (6%) (3%)
Other 21.1 19.4 9% 9%
Financial Services 31.8 30.8 3% 4%
Total ongoing revenue 44.9 38.7 16% 3%
Ongoing operating profit 12.4 10.5 18% 10%
Margin % 28% 27%
Group performance
Revenues from ongoing businesses grew 16%, 3% excluding acquisitions and at
constant currency rates. Seven of the nine ongoing businesses grew
organically, and recurring subscription revenues grew 6%. Group ongoing
operating profits improved by 18% and operating margins for ongoing businesses
increased to 28% due to revenue increases and continued cost improvements from
technology investments. Segment information has been reclassified in H1 FY24
to align to the reportable segments reorganised during the year ended 30 June
2024.
HSE
The HSE segment comprises Astutis acquired in November 2023 and Phoenix Health
& Safety, acquired in October 2024. Business performance is strong with
both businesses delivering year-on-year double digit revenue increases.
Included in the HSE division is a small contribution from Phoenix Health &
Safety for the first two months of ownership.
Legal
The Legal segment comprises Bond Solon and Pendragon, whose customers are
predominantly in the legal market. Legal revenues declined 5% organically, due
to notably large contract wins in Bond Solon in H1 FY24 not yet repeating in
FY25. Pendragon had a strong year for subscription revenue growth and again
achieved very strong customer retention (99%).
Financial Services
Financial Services Insurance comprises Axco and FRA. Financial Services
Insurance revenues declined 3% overall organically. Axco grew revenues by 6%
organically and had a strong year for subscription revenue growth. Recurring
revenue retention rates were at 99%. FRA revenues declined 16% organically due
to US government and regulatory pressures disrupting the Medicare Advantage
sector in which FRA operates. Partial recovery is anticipated by the end of
FY25.
Financial Services Other comprises three businesses that operate in Compliance
markets. ICA, CLTi and Mercia. Overall revenues from these three units grew 9%
with Mercia revenues up 11% and ICA & CLTi combined revenues up 7%.
Financial review
Revenue
As well as ongoing revenues described above, total revenues also include
revenues from discontinued operations of £1.7m (H1 FY24: £20.4m).
Other income and finance income
Other income in the prior period represents a gain of £0.8m from the sale of
a building.
Net finance income of £2.3m (H1 FY24: £0.8m) was achieved due to having no
debt and cash to deposit in interest-bearing accounts.
Profit before taxation
Ongoing adjusted profit before tax was up 39% to £11.4m (H1 FY24: £8.2m)
with statutory continuing profit before tax of £5.2m (H1 FY24: £8.1m).
Taxation
The underlying tax rate 7 (#_ftn7) , which ignores the tax effects of
adjusting items, is 25% (H1 FY24: 25%).
The tax charge excluding discontinued operations is £2.6m (H1 FY24: £2.3m)
with an overall effective tax rate 8 (#_ftn8) of 50% (H1 FY24: 28%), the
increase is due to earnouts related to acquisitions being disallowable for tax
purposes.
Earnings per share
Ongoing adjusted basic earnings per share, excluding the results of sold and
discontinued businesses, increased by 40% to 9.59p (H1 FY24: 6.83p),
reconciliation below. Statutory reported earnings per share 2.88p (H1 FY24:
6.58p).
H1 FY25 H1 FY24
£'m £'m
Adjusted earnings (note 6) 8.3 8.2
Remove loss/(profit) after tax of sold and discontinued businesses 0.3 (2.1)
Ongoing adjusted earnings 8.6 6.1
Number Number Variance
Weighted average number of ordinary shares (note 6) 89,958,497 88,964,817
Ongoing adjusted basic earnings per share 9.59p 6.83p 40%
Dividend
The Board has kept the interim dividend at 3.00p (H1 FY24: 3.00p), reflecting
our aim to keep dividend cover of at least 2. It will be paid on 4 April 2025
to shareholders on the share register as at 7 March 2025, with an associated
ex-dividend date of 6 March 2025.
Balance sheet and cashflow
Good cash generation continued due to the strong trading performance with
operating cash conversion at 72%, with net cash excluding lease liabilities of
£31.3m (30 June 2024: £67.8m, 31 December 2023: £28.0m).
Portfolio update
Acquisition of Phoenix Health & Safety
On 24 October 2024, the Group acquired 100% of the issued share capital of
Phoenix HSC (UK) Limited ("Phoenix Health & Safety"), a Company based in
the UK, for an initial consideration of £30.25m. In addition, under the terms
of the acquisition, there is additional contingent consideration payable based
on Phoenix Health & Safety's financial performance in each of the three
years up to and including 31 March 2028.
Phoenix Health & Safety offers training for a range of internationally
recognised and regulated health, safety and environmental ("HSE")
qualifications. The acquisition strengthens Wilmington's capabilities in the
provision of must-have training and education to regulated customers and
expands the Group's position in the growing HSE training market, alongside
Astutis, which was acquired in November 2023. See note 7 for further details.
Responsibility statement of the Directors in respect of the half year results
to 31 December 2024
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.
Mark
Milner Guy
Millward
Chief Executive Officer Chief Financial Officer
Consolidated Income Statement
Notes Six months ended Six months ended Year
31 December 2024 31 December 2023 ended
(unaudited) (unaudited) 30 June 2024
£'000 £'000 (audited)
£'000
Continuing operations
Revenue 5 46,566 43,909 98,324
Operating expenses before amortisation of intangibles excluding computer (36,254) (76,645)
software, impairment and adjusting items
(37,817)
Impairment of goodwill 4 - - (4,434)
Amortisation of intangible assets excluding computer software 4 (1,067) (483) (2,090)
Adjusting items 4 (4,768) (674) (598)
Operating expenses (43,652) (37,411) (83,767)
Other income - gain on disposal of subsidiaries - - 5,465
Other income - gain on disposal of property, plant and equipment and lease 820 2,189
modification
-
Operating profit 2,914 7,318 22,211
Finance income 2,303 927 2,172
Finance expense (37) (96) (175)
Profit before tax 4 5,180 8,149 24,208
Taxation (2,592) (2,297) (7,009)
Profit for the period from continuing operations 2,588 5,852 17,199
Profit for the period from discontinued operations - 1,266 24,011
Profit for the period attributable to owners of the parent 2,588 7,118 41,210
Earnings per share from continuing and discontinued operations:
Basic (p) 6 2.88p 8.00p 46.32p
Diluted (p) 6 2.83p 7.85p 45.44p
Earnings per share from continuing operations:
Basic (p) 6 2.88p 6.58p 19.33p
Diluted (p) 6 2.83p 6.47p 18.96p
Consolidated Statement of Comprehensive Income
Six months ended Six months ended Year
31 December 2024 31 December 2023 ended
30 June
2024
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Profit for the period 2,588 7,118 41,210
Other comprehensive income/(expense):
Items that may be reclassified subsequently to the Income Statement
Currency translation differences 171 253 (238)
Other comprehensive income/(expense) for the period, net of tax 171 253 (238)
Total comprehensive income for the period attributable to owners of the parent 2,759 40,972
7,371
Consolidated Balance Sheet
31 December 2024 31 December 2023 30 June
2024
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Non-current assets
Goodwill 77,959 60,993 52,763
Other intangible assets 18,723 9,763 10,236
Property, plant and equipment 1,640 5,075 3,085
Deferred consideration receivable 14,653 899 14,786
Deferred tax assets 26 148 -
113,001 76,878 80,870
Current assets
Trade and other receivables 21,644 20,790 20,339
Deferred consideration receivable 2,280 500 1,732
Cash and cash equivalents 30,940 23,875 67,515
Assets of disposal groups held for sale 1,091 27,031 1,196
55,955 72,196 90,782
Total assets 168,956 149,074 171,652
Current liabilities
Trade and other payables (50,379) (45,385) (50,460)
Lease liabilities (496) (1,413) (1,257)
Current tax liabilities (105) (86) (1,058)
Provisions - (307) (154)
Liabilities of disposal groups held for sale (779) (11,797) (486)
(51,759) (58,988) (53,415)
Non-current liabilities
Lease liabilities (1,568) (4,478) (1,571)
Deferred tax liabilities (3,530) (1,525) (1,351)
Provisions - (768) -
(5,098) (6,771) (2,922)
Total liabilities (56,857) (65,759) (56,337)
Net assets 112,099 83,315 115,315
Equity
Share capital 4,511 4,479 4,478
Share premium 48,941 47,463 47,463
Treasury and ESOT reserves (525) (703) (617)
Share based payments reserve 2,325 2,058 2,889
Translation reserve 3,364 3,684 3,193
Retained earnings 53,483 26,334 57,909
Total equity 112,099 83,315 115,315
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
£'000 £'000
At 30 June 2023 (audited) 49,175 2,635 3,431 25,407 80,648
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
Profit for the period - - - 34,092 34,092
Other comprehensive expense for the period - - (491) - (491)
51,239 2,058 3,193 60,426 116,916
Dividends paid - - - (2,680) (2,680)
Performance share plan options settlement via ESOT 60 - - - 60
Save As You Earn options settlement via treasury shares 1 - - - 1
Save As You Earn options settlement via ESOT 24 (13) - (7) 4
Share based payments - 844 - - 844
Tax on share based payments - - - 170 170
51,324 2,889 3,193 57,909 115,315
At 30 June 2024 (audited)
Profit for the period - - - 2,588 2,588
Other comprehensive income for the period - - 171 - 171
51,324 2,889 3,364 60,497 118,074
Dividends paid - - - (7,478) (7,478)
Issue of share capital 33 - - - 33
Issue of share premium 1,478 - - - 1,478
Performance share plan awards vesting settlement via share issue - (1,507) 352 (1,155)
-
Performance share plan options settlement via ESOT 65 - - - 65
Save As You Earn options settlement via ESOT 27 - - - 27
Share based payments - 943 - - 943
Tax on share based payments - - - 112 112
At 31 December 2024 (unaudited) 52,927 2,325 53,483 112,099
3,364
Consolidated Cash Flow Statement
Six months ended Six months ended Year ended
31 December 2024 31 December 2023 30 June 2024
(unaudited) (unaudited) (audited)
Notes £'000 £'000 £'000
Cash flows from operating activities
Cash generated from operations before adjusting items 11 6,328 9,299 29,747
Cash flows for adjusting items - operating activities (3,069) (535) (1,826)
Cash flows from tax on share based payments (252) (222) (222)
Cash generated from operations 3,007 8,542 27,699
Interest received 1,310 858 1,946
Tax paid (3,483) (3,557) (7,115)
Net cash generated from operating activities 834 5,843 22,530
Cash flows from investing activities
Disposal of subsidiaries net of cash - - 26,561
Purchase of subsidiary net of cash (29,193) (14,749) (15,923)
Deferred consideration received 574 552 888
Cash flows for adjusting items - investing activities (1,363) (124) (59)
Purchase of property, plant and equipment - (77) (132)
Proceeds from disposal of property, plant and equipment - 884 884
Purchase of intangible assets - (471) (235)
Net cash (used in)/generated from investing activities (29,982) (13,985) 11,984
Cash flows from financing activities
Dividends paid to owners of the parent (7,478) (6,473) (9,153)
Cash received from sale of shares for share vesting 785 927 927
Share issuance costs (16) (70) (70)
Payment of lease liabilities (1,022) (399) (881)
Net cash used in financing activities (7,731) (6,015) (9,177)
Net (decrease)/increase in cash and cash equivalents (36,879) (14,157) 25,337
Cash and cash equivalents at beginning of the period 67,808 42,173
42,173
Exchange gain on cash and cash equivalents 11 5 5
Cash classified as held for sale 331 - 293
Cash and cash equivalents at end of the period 31,271 28,021 67,808
Please see note 9 for a reconciliation of net cash movements.
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 Suite 215/216 Fort Dunlop,
2nd Floor, Fort Parkway, Birmingham B24 9FD.
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 14 February
2025.
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 2024 were approved by the
Board of Directors on 08 October 2024 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 2024 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 2024 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 2024.
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 47 to 55 of the strategic report in the Annual
Report and Financial Statements for the year ended 30 June 2024.
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 goodwill;
· 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 lease modification; and
· net finance income.
Adjusted profit before tax, adjusted EBITA, adjusted EBITDA reconcile to
profit on continuing activities before tax as follows:
Six months Six months Year
ended ended ended
31 December 31 December 30 June
2024 2023 2024
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Profit before tax 5,180 8,149 24,208
Impairment of goodwill - - 4,434
Amortisation of intangible assets excluding computer software 1,067 483 2,090
Adjusting items (included in operating expenses) 4,768 674 598
Other income - gain on disposal of subsidiaries - - (5,465)
Other income - gain on disposal of property, plant and equipment and lease - (820) (2,189)
modification
Adjusted profit before tax 11,015 8,486 23,676
Net finance income (2,266) (831) (1,997)
Adjusted operating profit (''adjusted EBITA'') 8,749 7,655 21,679
Depreciation of property, plant and equipment included in operating expenses 379 820 1,711
Amortisation of intangible assets - computer software 17 179 1,004
Adjusted EBITA before depreciation (''adjusted EBITDA'') 9,145 8,654 24,394
Adjusted EBITA 8,749 7,655 21,679
Add EBITA from statutory discontinued operations - 2,507 3,874
Total Group adjusted EBITA 8,749 10,162 25,553
Adjusted profit before tax 11,015 8,486 23,676
Add adjusted profit before tax from statutory discontinued operations - 2,507 3,874
Total Group adjusted profit before tax 11,015 10,993 27,550
Remove operating (profit)/loss from sold and closed businesses 395 (2,784) (3,484)
Ongoing adjusted profit before tax 11,410 8,209 24,066
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
2024 2023 2024
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Expense relating to strategic activities 3,343 674 598
Office lease termination due to business disposals 1,425 - -
Adjusting items (included in operating expenses) 4,768 674 598
Impairment of goodwill - - 4,434
Amortisation of intangible assets excluding computer software 1,067 483 2,090
Total adjusting items (classified in profit before tax) 5,835 1,157 7,122
Strategic activities represent acquisition costs comprising earnouts of £2.0m
and transaction costs of £1.3m.
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 three divisions (HSE, Legal and
Financial Services) are the Group's segments and generate all of the Group's
ongoing 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. Segment information has been reclassified for the six
months ended 31 December 2023 to align to the reportable segments reorganised
during the year ended 30 June 2024.
(a) Business segments
Six months ended Six months ended Year ended
31 December 2024 (unaudited) 31 December 2023 30 June 2024
(unaudited) (audited)
Revenue Profit/(loss) Revenue Profit/(loss) Revenue Profit/(loss)
£'000 £'000 £'000 £'000 £'000 £'000
HSE 6,110 1,131 554 (2) 4,837 1,201
Legal 6,964 2,938 7,314 2,759 15,986 6,173
Financial Services 31,830 8,290 30,829 7,758 68,850 20,726
Ongoing 44,904 12,359 38,697 10,515 89,673 28,100
Non-core 1,662 (395) 5,212 277 8,651 (390)
Group total continuing 46,566 11,964 43,909 10,792 98,324 27,710
Unallocated central overheads - (2,192) - (2,188) - (4,166)
Share based payments - (1,023) - (949) - (1,865)
46,566 8,749 43,909 7,655 98,324 21,679
Impairment of goodwill - - (4,434)
Amortisation of intangible assets excluding computer software (1,067) (483) (2,090)
Adjusting items (included in operating expenses) (4,768) (674) (598)
Other income - gain on disposal of subsidiaries - - 5,465
Other income - gain on disposal of property, plant and equipment and lease - 820 2,189
modification
Net finance income 2,266 831 1,997
Profit before tax from continuing operations 5,180 8,149 24,208
Taxation (2,592) (2,297) (7,009)
Profit for the financial period from continuing operations 2,588 5,852 17,199
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:
From continuing operations: Six months Six months Year
ended ended ended
31 December 31 December 30 June
2024 2023 2024
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
UK 28,029 25,284 52,353
USA 8,557 8,686 25,761
Europe (excluding the UK) 5,260 5,295 10,777
Rest of the World 4,720 4,644 9,433
Continuing revenue 46,566 43,909 98,324
6. Earnings per share
Adjusted earnings per share has been calculated using adjusted earnings
calculated as profit after taxation but before:
· Impairment of goodwill;
· amortisation of intangible assets excluding computer software;
· adjusting items (included in operating expenses);
· other income - gain on disposal of subsidiaries; and
· other income - gain on disposal of property, plant and equipment
and lease modification.
The calculation of the basic and diluted earnings per share is based on the
following data:
Continuing operations: Six months Six months Year
ended ended ended
31 December 31 December 30 June
2024
2024 2023
(audited)
(unaudited) (unaudited)
£'000
£'000 £'000
Earnings from continuing operations for the purpose of basic earnings per 2,588 5,852 17,199
share
Add/(remove):
Impairment of goodwill - - 4,434
Amortisation of intangible assets excluding computer software 1,067 483 2,090
Adjusting items (included in operating expenses) 4,768 674 598
Other income - gain on disposal of subsidiaries - - (5,465)
Other income - gain on disposal of property, plant and equipment and lease - (820) (2,189)
modification
Tax effect of adjustments above and deferred tax (147) 194 571
Adjusted earnings for the purposes of adjusted earnings per share 8,276 6,383 17,238
Continuing and discontinued operations:
Earnings from total operations for the purpose of basic earnings per share 2,588 7,118
41,210
Add/(remove):
Impairment of goodwill - - 4,434
Amortisation of intangible assets excluding computer software 1,067 996 2,637
Adjusting items (included in operating expenses) 4,768 674 598
Other income - gain on disposal of subsidiaries - - (26,831)
Other income - gain on disposal of property, plant and equipment and lease - (820) (2,189)
modification
Tax effect of adjustments above and deferred tax (147) 194 571
Adjusted earnings for the purposes of adjusted earnings per share 8,276 8,162 20,430
Continuing operations: Number Number Number
Weighted average number of ordinary shares for the purpose of basic and 89,958,497 88,964,817
adjusted earnings per share
88,964,817
Effect of dilutive potential ordinary shares:
Future exercise of share awards and options 1,456,501 1,530,678 1,722,761
Weighted average number of ordinary shares for the purposes of diluted 91,414,998 90,495,495
earnings and adjusted diluted earnings per share
90,687,578
Continuing and discontinued operations:
Weighted average number of ordinary shares for the purpose of basic and 89,958,497 88,964,817
adjusted earnings per share
88,964,817
Effect of dilutive potential ordinary shares:
Future exercise of share awards and options 1,456,501 1,704,638 1,722,761
Weighted average number of ordinary shares for the purposes of diluted 91,414,998 90,669,455
earnings and adjusted diluted earnings per share
90,687,578
Continuing operations:
Basic earnings per share 2.88p 6.58p 19.33p
Diluted earnings per share 2.83p 6.47p 18.96p
Adjusted basic earnings per share (''adjusted earnings per share'') 9.20p 7.17p 19.38p
Adjusted diluted earnings per share 9.05p 7.05p 19.01p
Continuing and discontinued operations:
Basic earnings per share 2.88p 8.00p 46.32p
Diluted earnings per share 2.83p 7.85p 45.44p
Adjusted basic earnings per share (''adjusted earnings per share'') 9.20p 9.17p 22.96p
Adjusted diluted earnings per share 9.05p 9.00p 22.53p
7. Acquisition of Phoenix Health & Safety
On 24 October 2024, the Group acquired 100% of the issued share capital of
Phoenix HSC (UK) Limited ("Phoenix Health & Safety"), a Company based in
the United Kingdom, for an initial consideration of £30.25m. In addition,
under the terms of the acquisition, there is additional contingent
consideration payable based on Phoenix Health & Safety's financial
performance in each of the three years ending 31 March 2028. As the deferred
payments are linked to employment, they are recognised as a separate
transaction in each period respectively as they fall due.
Phoenix Health & Safety offers training for a range of internationally
recognised and regulated health, safety and environmental ("HSE")
qualifications. The acquisition strengthens Wilmington's capabilities in the
provision of must-have training and education to regulated customers and
expands the Group's position in the growing HSE training market, alongside
Astutis, which was acquired in November 2023. The acquisition is consistent
with Wilmington's strategic aim to build on its already strong presence in
large and growing GRC markets. These markets are underpinned by strong macro
drivers, particularly the increasing volume and enforcement of regulation, the
increased importance of ESG and widespread adoption of technological and
data-driven compliance solutions. Wilmington focuses on assets which operate
in attractive market segments and which have strong leadership and sustainable
competitive advantages. Phoenix Health & Safety has demonstrated a strong
track record of organic growth over a number of years.
The process to measure the fair values of the assets acquired and liabilities
assumed is not yet finalised in respect of the acquisition including the
valuation of acquired intangibles 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 including acquired intangibles was £6.0m,
resulting in goodwill on acquisition of £25.1m. Goodwill acquired relates to
future customer relationships, the assembled workforce and expanded access to
the health, safety and environmental markets. Acquisition related charges
include transaction costs of £1.0m relating to the acquisition of Phoenix
Health & Safety. The results of the acquisition included in the Group's
consolidated results post acquisition are revenue of £2.0m and an operating
profit of £0.4m. Due to limitations in available data for the pre-acquisition
period, the Directors consider that it is impracticable to disclose the
results of the combined entity as though the acquisition had impacted the
Group's consolidated results for the full year.
The movement in goodwill during the period of £25.2m from £52.8m to £78.0m
relates to the acquisition of Phoenix Health & Safety. Cost increased by
£25.2m from £57.5m to £82.7m, there was no change to accumulated impairment
during the period.
8. Disposal group held for sale
Compliance Week classified as a disposal group held for sale
The Compliance Week businesses, continues to be classified as a disposal group
held for sale under IFRS 5. The disposal is expected to be completed within
six months by sale of equity shares.
The major classes of assets and liabilities comprising the disposal group held
for sale are as follows:
31 December 30 June
2024 2024
(unaudited) (audited)
£'000 £'000
Goodwill 358 358
Trade and other receivables 402 545
Cash and cash equivalents 331 293
Assets of disposal group held for sale 1,091 1,196
Trade and other payables 779 486
Liabilities of disposal group held for sale 779 486
Compliance Week has not been classified as a discontinued operation under IFRS
5 because it does not meet the IFRS 5 criteria as a significant line of
business.
9. Reconciliation of net cash movements
Six months ended Six months Year
31 December ended ended
2024 31 December 30 June
(unaudited) 2023 2024
£'000 (unaudited) (audited)
£'000 £'000
Cash and cash equivalents at beginning of the period 67,515 42,173 42,173
Cash classified as held for sale at beginning of the period 293 - -
Lease liabilities at beginning of the period (2,828) (7,210) (7,210)
Net cash at beginning of the period 64,980 34,963 34,963
Net (decrease)/increase in cash and cash equivalents (36,537) (14,152)
25,635
Movement in lease liabilities 764 1,319 4,382
Cash and cash equivalents at end of the period 30,940 23,875 67,515
Cash classified as held for sale at end of the period 331 4,146 293
Lease liabilities at end of the period (2,064) (5,891) (2,828)
Net cash at end of the period 29,207 22,130 64,980
10. Events after the reporting period
There were no events after the balance sheet date that require disclosure.
11. Cash generated from operations
Six months Six months Year
ended ended ended
31 December 31 December 30 June
2024
2024 2023
(audited)
(unaudited) (unaudited)
£'000
£'000 £'000
From continuing and discontinued operations:
Profit before tax from continuing operations 5,180 8,149 24,208
Profit before tax from discontinued operations - 1,994 24,694
Adjusting item - gain on disposal of subsidiaries included in continuing - - (5,465)
operations
Adjusting item - gain on disposal of subsidiaries included in discontinued - - (21,367)
operations
Adjusting item - gain on disposal of property, plant and equipment and lease - (820) (2,189)
modification
Adjusting items (included in operating expenses) 4,768 674 598
Depreciation of property, plant and equipment 379 925 1,851
Amortisation of intangible assets (continuing and discontinued) 1,084 1,186 3,662
Impairment of goodwill - - 4,434
Share based payments (including social security costs) 1,023 949 1,865
Net finance income (2,266) (831) (1,997)
Operating cash flows before movements in working capital 10,168 12,226 30,294
(Increase)/decrease in trade and other receivables (240) 1,172 (2,784)
(Decrease)/increase in trade and other payables (3,446) (3,946) 2,545
Decrease in provisions (154) (153) (308)
Cash generated from operations before adjusting items 6,328 9,299 29,747
Cash conversion is calculated as a percentage of cash generated by operations
to adjusted EBITA as follows:
Six months Six months Year
ended ended ended
31 December 31 December 30 June
2024
2024 2023
(audited)
(unaudited) (unaudited)
£'000
£'000 £'000
From continuing and discontinued operations:
Funds from operations before adjusting items:
Adjusted EBITA from continuing operations (note 4) 8,749 7,655 21,679
Adjusted EBITA from discontinued operations - 2,507 3,874
Share based payments (including social security costs) 1,023 949 1,865
Amortisation of intangible assets - computer software (continuing and 17 190 1,025
discontinued)
Depreciation of property, plant and equipment (continuing and discontinued) 379 925 1,851
Operating cash flows before movements in working capital 10,168 12,226 30,294
Net working capital movement (3,840) (2,927) (547)
Funds from operations before adjusting items 6,328 9,299 29,747
Cash conversion 72% 92% 116%
Free cash flow:
Operating cash flows before movement in working capital 10,168 12,226 30,294
Proceeds on disposal of property, plant and equipment - 884 884
Net working capital movement (3,840) (2,927) (547)
Interest received 1,310 858 1,946
Payment of lease liabilities (1,022) (399) (881)
Tax paid (3,483) (3,557) (7,115)
Purchase of property, plant and equipment - (77) (132)
Purchase of intangible assets - (471) (235)
Free cash flow 3,133 6,537 24,214
1 Ongoing - eliminating the effects of the impact of disposals, closures and
businesses held for sale; Organic - Ongoing, eliminating acquisitions and
exchange rate fluctuations
2 Ongoing adjusted profit before tax and total adjusted profit before tax -
see note 4
3 Ongoing 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, held for sale cash, bank
loans and bank overdrafts but excludes lease liabilities
5 Recurring revenue - those contracted at least one year ahead
6 Repeat revenue - the percentage of revenue from customers who purchased
our services in the current and prior period
7 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
8 The effective tax rate is calculated as the total tax charge divided by
profit before tax
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