REG - Wilmington PLC - Interim Results <Origin Href="QuoteRef">WIL.L</Origin> - Part 2
24/02/2016 07:11
- Part 2: For the preceding part double click ID:nRSX9347Pa
(173)
Proceeds from disposal of group held for sale 343 - -
Deferred consideration paid - (343) (343)
Purchase of non-controlling interests (333) - -
Cash flows for adjusting items - investing activities (198) - -
Purchase of property, plant and equipment (290) (548) (829)
Proceeds from disposal of property, plant and equipment 11 - 65
Purchase of intangible assets (472) (867) (1,738)
Net cash used in investing activities (9,408) (1,931) (3,018)
Cash flows from financing activities
Dividends paid to owners of the parent (3,478) (3,082) (6,370)
Dividends paid to non-controlling interests (141) (88) (88)
Share issuance costs (5) (6) (6)
Cash flows for adjusting items - financing activities (631) - -
Increase/(decrease) in bank loans 8,404 2,000 (1,000)
Net cash generated/(used) from financing activities 4,149 (1,176) (7,464)
Net increase in cash and cash equivalents, net of bank overdrafts 721 1,182 4,242
Cash and cash equivalents, net of bank overdrafts, at beginning of the period 8,698 4,378 4,378
Exchange gains on cash and cash equivalents 358 206 78
Cash and cash equivalents, net of bank overdrafts at end of the period 9,777 5,766 8,698
Reconciliation of net debt
Cash and cash equivalents at beginning of the period 9,194 5,020 5,020
Bank overdrafts at beginning of the period 16 (496) (642) (642)
Bank loans at beginning of the period 16 (37,306) (38,041) (38,041)
Net debt at beginning of the period (28,608) (33,663) (33,663)
Net increase in cash and cash equivalents (net of bank overdrafts) 1,079 1,388 4,320
Net (drawdown)/repayment in bank loans (8,404) (2,000) 1,000
Exchange loss on bank loans (665) (294) (265)
Cash and cash equivalents at end of the period 11,928 7,998 9,194
Bank overdrafts at end of the period 16 (2,151) (2,232) (496)
Bank loans at end of the period 16 (46,375) (40,335) (37,306)
Net debt at end of the period (36,598) (34,569) (28,608)
The notes on pages 16 to 29 are an integral part of these consolidated
financial statements.
Notes to the Financial Results
General information
The Company is a public limited company incorporated and domiciled in the UK.
The address of its registered office is 6-14 Underwood Street, London, N1
7JQ.
The Company is listed on the main market on the London Stock Exchange. The
Company is a provider of information, education and networking to professional
markets.
This condensed consolidated interim financial information ('Interim
Information') was approved for issue on
23 February 2016.
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 2015 were approved by the
Board of Directors on 14 September 2015. 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 2015 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' as adopted by the European Union. The Interim information should be
read in conjunction with the Annual Financial Statements for the year ended 30
June 2015 which have been prepared in accordance with IFRSs as adopted by the
European Union, 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. The Directors have
therefore adopted a going concern basis in preparing the Interim Information.
2. Accounting policies
The accounting policies applied are consistent with those of the Annual
Financial Statements for the year ended 30 June 2015, as described in those
Annual Financial Statements. The following new standards and amendments to
standards are mandatory for the first time for the financial year beginning 1
July 2015 but are either not relevant to the Group or do not have a
significant impact:
· IFRS 10, 'Consolidated financial statements' provides additional guidance
in determining control where this is difficult to assess.
· IFRS 11, 'Joint arrangements' provides a more realistic reflection of joint
arrangements.
· IFRS 12, 'Disclosures of interests in other entities' includes the
disclosure requirements for all forms of interests in other entities.
· Amendments to IFRS 10, 11 and 12 provide additional transition relief in
IFRSs 10, 11 and 12.
· IAS 27 (revised 2011) 'Separate Financial Statements' includes the
provisions on separate financial statements that are left after the control
provisions.
· IAS 28 (revised 2011) 'Associates and Joint Ventures' includes the
requirements for joint ventures, as well as associates, to be equity
accounted
· Amendment to IAS 32 and IFRS 7 clarify 'currently has a legally enforceable
right of set-off'.
· Amendment to IAS 36, 'Impairment of assets' proposed changes to disclosure
requirement when recoverable amount is determined based on fair value less
costs of disposal.
· Amendment to IAS 39 'Financial instruments: Recognition and measurement'
provides relief from discontinuing hedge accounting on novation of a hedging
instrument.
The following new standards and amendments to standards have been issued but
are not yet effective for the purposes of the Interim Report and have not been
early adopted:
· IFRS 9 'Financial instruments', on 'Classification and Measurement'
(effective 1 July 2018).
· IFRS 15 'Revenue from Contracts with Customers' (effective 1 July 2018).
· Amendments to IFRS 10 'Consolidated Financial Statements' and IAS 28
'Investments and Joint Ventures; (effective 1 July 2016).
· Amendments to IAS 1 'Presentation of Financial Statements' (effective 1
July 2016).
· Amendments to IFRS 10, IFRS 12 and IAS 28 (effective 1 July 2016). These
amendments provide guidance on when an investor consolidates financial
statements of an associated or joint venture.
· Annual improvements 2012: These amendments include changes from the 2010-12
cycle of the annual improvements project, that affect 7 standards: IFRS 2,
'Share-Based Payment', IFRS 3, 'Business Combinations', IFRS 8, 'Operating
segments', IFRS 13, 'Fair Value Measurement', IAS 16, 'Property, Plant and
Equipment' and IAS 38, 'Intangible Assets', Consequential amendments to IFRS
9, 'Financial Instruments', IAS 37, 'Provisions, Contingent Liabilities and
Contingent Assets', and IAS 39, Financial Instruments - Recognition and
Measurement'.
· Annual improvements 2013 The amendments include changes from the 2011-2-13
cycle of the annual improvements project that affect 4 standards: IFRS 1,
'First Time Adoption', IFRS 3, 'Business Combinations', IFRS 13, 'Fair Value
Measurement' and IAS 40, 'Investment Property'.
· Amendment to IFRS 11, 'Joint Arrangements' on Acquisition of an Interest in
a Joint Operation.
· Amendment to IAS 16, 'Property, Plant and Equipment' and IAS 38,'Intangible
Assets', on depreciation and amortisation.
· Amendments to IAS 16, 'Property, Plant and Equipment'.
· Amendments to IAS 27, 'Separate Financial Statements' on the equity
method.
· Annual improvements 2014: This set of amendments impacts 4 standards: IFRS
5, 'Non-Current Assets held for Sale and Discontinued Operations' regarding
methods of disposal, IFRS 7, 'Financial Instruments: Disclosures', (with
consequential amendments to IFRS 1) regarding servicing contracts, IAS 19,
'Employee Benefits' regarding discount rates, IAS 34, 'Interim Financial
Reporting' regarding disclosure of information.
· IFRS 16 'Leases' for annual periods beginning on or after 1 July 2019.
3. Principal risks and uncertainties
The principal risks and uncertainties that affect the Group are as stated on
pages 20 to 22 of the Strategic Report in the Annual Report and Financial
Statements for the year ended 30 June 2015. The main financial risks that
affect the Group are:
(a) Interest rate risk
Risk
The Group financing arrangements include external debt that is subject to a
variable interest rate. The Group is consequently exposed to cash flow
volatility arising from fluctuations in market interest rates applicable to
that external finance. In particular, interest is charged on the £46m (2014:
£40m) amount drawn down on the revolving credit facility at a rate of between
1.50 and 2.25 per cent above LIBOR depending upon leverage. Cash flow
volatility therefore arises from movements in the LIBOR interest rates.
Group policy
The Group policy is to enter into interest rate swap contracts to maintain the
ratio of fixed to variable rate debt at a level that achieves a reasonable
cost of debt whilst reducing the exposure to cash flow volatility arising from
fluctuations in market interest rates.
Risk management arrangements
The Group's interest rate swap contracts offset part of its variable interest
payments and replace them with fixed payments. In particular, the Group has
hedged its exposure to the LIBOR part of the interest rate via interest rate
swaps, as follows:
· A 5 year £15.0m interest rate swap commencing on 21 November 2011, whereby
the Group receives interest on £15m based on the LIBOR rate and pays interest
on £15m at a fixed rate of 2.68%.
· A $7.5m interest rate swap commencing on 13 July 2015 and ending on 1 July
2020, whereby the Group receives interest on $7.5m based on the USD LIBOR rate
and pays interest on $7.5m at a fixed rate of 1.79%.
· A £15.0m interest rate swap commencing on 22 November 2016 and ending on 1
July 2020, whereby the Group receives interest on £15m based on LIBOR rate and
pays interest on £15m at a fixed rate of 2.00%.
These derivatives have been designated as a cash flow hedge for accounting
purposes. The net settlement of interest on the interest rate swap, which
comprises a variable rate interest receipt and a fixed rate interest payment,
is recorded in net finance costs in the income statement and so is matched
against the corresponding variable rate interest payment on the revolving
credit facility. The derivatives are re-measured at fair value at each
reporting date. This gives rise to a gain or loss, the entire amount of which
is recognised in Other Comprehensive Income ('OCI') following the Directors'
assessment of hedge effectiveness.
(b) Foreign currency risk
Risk
The currency of the primary economic environment in which the Group operates
is Sterling, and this is also the currency in which the Group presents its
financial statements. However, the Group has significant Euro and US dollar
cash flows arising from international trading and overseas operations. The
Group is consequently exposed to cash flow volatility arising from
fluctuations in the applicable exchange rates for converting Euros and US
dollars to Sterling.
Group policy
The Group policy is to fix the exchange rate in relation to a periodically
reassessed set percentage of expected Euro and US dollar net cash inflows
arising from international trading, by entering into foreign currency
contracts to sell a specified amount of Euros or US dollars on a specified
future date at a specified exchange rate. This set percentage is approved by
the Board as part of the budgeting process and upon the acquisition of foreign
operations.
The Group policy is to finance investment in overseas operations from
borrowings in the local currency of the relevant operation, so as to achieve a
natural hedge of the foreign currency translation risk. This natural hedge is
designated as a net investment hedge for accounting purposes. Debt of $18.2m
(June 2015: $5.2m) has been designated as a net investment hedge relating to
the Group's interest in Compliance Week and FRA.
Risk management arrangements
The following forward contracts were entered into in order to provide
certainty in Sterling terms of 80% of the Group's expected net US dollar and
Euro income:
· On 23 January 2015, the Group sold $2.5m to 29 January 2016 at a rate
of 1.4995
· On 23 January 2015, the Group sold $2.5m to 22 January 2016 at a rate
of 1.4977
· On 5 June 2015, the Group sold E1.34m to 14 December 2015 at a rate of
1.3569
· On 5 June 2015, the Group sold E1.34m to 15 December 2015 at a rate of
1.3569
· On 5 June 2015, the Group sold E1.32m to 16 December 2015 at a rate of
1.3569
· On 8 June 2015, the Group sold $2.0m to 27 May 2016 at a rate of
1.5221
· On 8 June 2015, the Group sold $2.0m to 29 April 2016 at a rate of
1.5220
The above derivatives are re-measured at fair value at each reporting date.
This gives rise to a gain or loss, the entire amount of which is recognised in
the Income Statement.
(c) Liquidity and capital risk
Risk
The Group has historically expanded its operations both organically and via
acquisition, financed partly by retained profits but also via external
finance. As well as financing cash outflows, the Group's activities give rise
to working capital obligations and other operational cash outflows. The Group
is consequently exposed to the risk that it cannot meet its obligations as
they fall due, or can only meet them at an uneconomic price.
Group policy
The Group policy is to preserve a strong capital base in order to maintain
investor, creditor and market confidence and to safeguard the future
development of the business, but also to balance these objectives with the
efficient use of capital. The Group has, in previous years, made purchases of
its own shares whilst taking into account the availability of credit.
Risk management arrangements
The Group ensures its liquidity is maintained by entering into short, medium
and long-term financial instruments to support operational and other funding
requirements. The Group determines its liquidity requirements by the use of
short and long-term cash forecasts.
On 1 July 2015 the Group extended its £65m revolving credit facility with
Barclays Bank PLC, HSBC Bank plc and The Royal Bank of Scotland plc through to
1 July 2020. The terms of the old and the extended facility are included
below:
Old facility that expired on 1 July 2015:
The Group had an unsecured committed bank facility of £65.0m (2014: £65.0m) to
February 2016. The facility comprised of a revolving credit facility of £60.0m
(2014: £60.0m) and an overdraft facility across the Group of £5.0m (2014:
£5.0m). At 30 June 2015, £37.3m of the revolving credit facility was drawn
down (2014: £38.0m). Interest was charged on the amount drawn down at between
2.00 and 2.75 per cent above LIBOR depending upon leverage, and drawdowns were
made for periods of up to six months in duration. Interest was charged on the
drawn element of the overdraft facility at 2.00 and 2.55 per cent (the
'Margin') above the Barclays bank base rate depending upon leverage. The Group
also paid a fee of 40 per cent of the applicable Margin on the undrawn element
of the credit facility and the undrawn overdraft. The Group has complied at
all times with the covenant requirements of the bank facility arrangement.
Extended facility that is effective from 1 July 2015 and expires on 1 July
2020:
The Group has an unsecured committed bank facility of £65.0m to 1 July 2020.
The facility comprised of a revolving credit facility of £60.0m and an
overdraft facility across the Group of £5.0m. In addition, the extended
facility also provides for an accordion option whereby the unsecured committed
bank facility may be increased by up to £35m to a total commitment of £100m if
required subject to majority lending bank consent. Interest is charged on the
amount drawn down at between 1.50 and 2.25 (the 'Margin') per cent above LIBOR
depending upon leverage, and drawdowns are made for periods of up to six
months in duration. Interest is charged on the drawn element of the overdraft
facility at 1.50% and 2.25% per cent above the Barclays bank base rate
depending upon leverage. The Group also pays a fee of 40% of the applicable
Margin on the undrawn element of the credit facility and the undrawn
overdraft.
(d) Credit Risk
Risk
The Group's principal financial assets are receivables and bank balances. The
Group is consequently exposed to the risk that its customers or the credit
facility providers cannot meet their obligations as they fall due.
Group policy
The Group policy is that the lines of business assess the creditworthiness and
financial strength of customers at inception and on an ongoing basis. The
Group also reviews the credit rating of the bank.
Risk management arrangements
The Group's credit risk is primarily attributable to its trade receivables.
However, the Group has no significant exposure to credit risk because its
trading is spread over a large number of customers. The payment terms offered
to customers take into account the assessment of their creditworthiness and
financial strength, and they are set in accordance with industry standards.
The creditworthiness of customers is considered before trading commences. Most
of the Group's customers are large and well established institutions that pay
on time and in accordance with the Group's standard terms of business.
The amounts presented in the Balance Sheet are net of allowances for bad and
doubtful receivables estimated by management based on prior experience and
their assessment of the current economic value.
4. Financial instruments and risk management
The methods and assumptions used to estimate the fair values of financial
assets and liabilities are as follows:
· The carrying amount of trade receivables and payables approximates to fair
value due to the short maturity of the amounts receivable and payable.
· The fair value of the Group's borrowings is estimated on the basis of the
discounted value of future cash flows using approximate discount rates in
effect at the balance sheet date.
· The fair value of the Group's outstanding interest rate swaps, foreign
exchange contracts and put options for non-controlling interest are estimated
using discounted cash flow models and market rates of interest and foreign
exchange at the balance sheet date.
Financial instruments are measured at fair value via a valuation method. The
different levels have been defined as:
· Level 1: Quoted prices (unadjusted) in active markets for identical assets
or liabilities;
· Level 2: Inputs other than quoted prices included within level 1 that are
observable for the asset or liability, either directly (that is, as prices) or
indirectly (that is, derived from prices); and
· Level 3: Inputs for the assets or liabilities that are not based on
observable market data (that is, unobservable inputs).
The group has recognised a level 2 financial liability of £105,311 for foreign
exchange trading derivatives at fair value through income or expense. In
addition the group has recognised a level 2 financial liability of £562,451
for three interest rate swap contracts at fair value through other
comprehensive income or expense. The group has no recognised level 1 or level
3 assets or liabilities.
5. Measures of profit
To provide shareholders with a better understanding of the trading performance
of the Group, Adjusted EBITA has been calculated as Profit before Tax after
adding back:
· amortisation of intangible assets - publishing rights, titles and
benefits;
· share based payments;
· Adjusting items; and
· net finance costs.
Adjusted EBITA and Adjusted EBITDA reconcile to profit on continuing
activities before tax as follows:
Profit before tax 4,547 3,708 10,296
Amortisation of intangible assets - publishing rights, titles and benefits 3,011 3,038 6,118
Share based payments 278 634 918
Adjusting items 873 727 1,112
Net finance costs 1,024 1,024 1,974
Adjusted operating profit ('Adjusted EBITA') 9,733 9,131 20,418
Depreciation of property, plant and equipment 447 588 918
Amortisation of intangible assets - computer software 512 685 1,005
Adjusted EBITA before depreciation ('Adjusted EBITDA') 10,692 10,404 22,341
Adjusted EBITA before depreciation ('Adjusted EBITDA')
10,692
10,404
22,341
Adjusted profit before tax reconciles to profit on continuing activities
before tax as follows:
Profit before tax 4,547 3,708 10,296
Amortisation of intangible assets - publishing rights, titles and benefits 3,011 3,038 6,118
Share based payments 278 634 918
Adjusting items (included in operating expenses) 873 727 1,112
Adjusting items (included in net finance costs) 225 - -
Adjusted profit before tax 8,934 8,107 18,444
Adjusted profit before tax
8,934
8,107
18,444
6. Segmental information
In accordance with IFRS 8 the Group's operating segments are based on the
figures reviewed by the Board, which represents the chief operating decision
maker. The Group reports its results in four operating segments as this
accurately reflects the way the Group is managed.
The Group's organisational structure reflects the main communities to which it
provides information, education and networking. The four divisions (Risk &
Compliance, Finance, Legal; and Insight) are the Group's segments and generate
all of the Group's revenue.
The Board considers the business from both a geographic and product
perspective. Geographically, management considers the performance of the Group
between the UK, North America, the rest of Europe and the rest of the world.
(a) Business segments
Risk & Compliance 17,593 5,595 16,771 5,282 36,416 11,856
Finance 11,595 2,435 9,983 2,250 18,711 4,382
Legal 7,638 643 7,896 678 16,250 2,201
Insight 12,537 2,790 11,435 2,569 23,710 5,390
49,363 11,463 46,085 10,779 95,087 23,829
Unallocated central overheads - (1,730) - (1,648) - (3,411)
49,363 9,733 46,085 9,131 95,087 20,418
Amortisation of intangible assets - publishing rights, titles and benefits (3,011) (3,038) (6,118)
Share based payments (278) (634) (918)
Adjusting items (included in operating expenses) (873) (727) (1,112)
Net finance costs (1,024) (1,024) (1,974)
Profit before tax 4,547 3,708 10,296
Taxation (1,046) (876) (2,429)
Profit for the financial year 3,501 2,832 7,867
Taxation
(1,046)
(876)
(2,429)
Profit for the financial year
3,501
2,832
7,867
(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 31 December 2015 Six months ended 31 December 2014 Year ended 30
June
2015
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
UK 28,714 28,573 57,797
Europe (excluding the UK) 7,207 7,834 16,248
North America 8,846 5,991 10,683
Rest of the World 4,596 3,687 10,359
Total revenue 49,363 46,085 95,087
7. Adjusting items
The following items have been charged/(credited) to profit or loss during the
year but are of an unusual nature, size or incidence and so are shown
separately:
Increase/(decrease) in the liability for deferred consideration 551 (193) (402)
Costs relating to successful and aborted acquisitions 172 - 22
Legal claim costs 150 - -
Restructuring and rationalisation costs - 420 992
Compensation for loss of office - 500 500
Adjusting items (included in operating expenses) 873 727 1,112
Costs relating to the extension of the loan facility 225 - -
Amortisation of intangible assets - publishing rights, titles and benefits 3,011 3,038 6,118
Share based payments 278 634 918
Total adjusting items (classified in profit before tax) 4,387 4,399 8,148
Total adjusting items (classified in profit before tax)
4,387
4,399
8,148
The increase in the liability for deferred consideration relate to Financial
Research Associates ('FRA') and NHiS. Successful and aborted acquisitions
relate to the acquisition of FRA and other aborted acquisitions. Legal claim
costs of £0.2m relate to legal action that Wilmington is pursuing, inter alia,
to enforce certain non-compete obligations.
8. Net finance costs
Six months ended 31 December 2015 Six months ended 31 December 2014 Year ended 30
June
2015
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Finance costs comprise:
Interest payable on bank loans and overdrafts (733) (911) (1,754)
Amortisation of capitalised loan arrangement fees - extended facility (66) (113) (220)
Adjusting item - extension of loan facility costs (225) - -
(1,024) (1,024) (1,974)
The extension of loan facility costs comprises £147,000 of old capitalised
loan arrangement fees written off and £78,000 of legal and professional costs
connected to the extension.
9. Taxation
Six months ended 31 December 2015 Six months ended 31 December 2014 Year ended 30 June
2015
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Current tax:
Current tax on profits for the period 1,465 1,532 3,287
Adjustments in respect of previous years 83 - 52
Total current tax 1,548 1,532 3,339
Deferred tax:Deferred tax credit (432) (558) (715)
Effect on deferred tax of change in corporation tax rate (70) (98) (195)
Total deferred tax (502) (656) (910)
Taxation 1,046 876 2,429
10. Dividends
Distributions to owners of the parent in the period:
Sixmonths ended 31 December 2015 Sixmonths ended 31 December 2014 Year ended 30 June2015 Sixmonths ended 31 December 2015 Sixmonths ended 31 December 2014 Year months ended 30 June2015
pence per share pence per share pence per share £'000 £'000 £'000
(unaudited) (unaudited) (audited) (unaudited) (unaudited) (audited)
Final dividends recognised as distributions in the year 4.0 3.7 3.7 3,478 3,082 3,082
Interim dividends recognised as distributions in the year - - 3.7 - - 3,288
Total dividends paid in the period 3,478 3,082 6,370
Interim / final dividend proposed 3.8 3.7 4.0 3,304 3,200 3,458
11. Earnings per Share
Adjusted Earnings per Share has been calculated using adjusted earnings
calculated as profit after tax and non-controlling interests but before:
· amortisation of publishing rights, titles and benefits;
· share based payments
· adjusting items included in operating expenses; and
· adjusting items included in net finance costs
The calculation of the basic and diluted earnings per share is based on the
following data:
Six months ended 31 December 2015 Six months ended 31 December 2014 Year ended 30 June
2015
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Earnings from continuing operations for the purpose of basic earnings per share 3,418 2,759 7,737
Add/(remove):
Amortisation of intangible assets - publishing rights, titles and benefits (net of non-controlling interests) 3,011 3,038 6,118
Adjusting items (included in operating expenses) 873 727 1,112
Adjusting items (included in net finance costs) 225 - -
Share based payments 278 634 918
Tax effect of adjustments above (926) (972) (1,698)
Adjusted earnings for the purposes of adjusted earnings per share 6,879 6,186 14,187
Number Number Number
Weighted average number of ordinary shares for the purpose of basic and adjusted earnings per share 86,706,740 86,232,406 86,389,533
Effect of dilutive potential ordinary shares:
Future exercise of share awards and options 906,717 1,158,012 1,154,643
Deferred consideration to be settled by equity - 221,917 107,059
Weighted average number of ordinary shares for the purposes of diluted earnings per share 87,613,457 87,612,335 87,651,235
Basic earnings per share 3.94p 3.20p 8.96p
Diluted earnings per share 3.90p 3.15p 8.83p
Adjusted basic earnings per share ('Adjusted Earnings Per Share') 7.93p 7.17p 16.42p
Adjusted diluted Earnings per Share 7.85p 7.06p 16.19p
12. Acquisitions and disposals
a) Acquisitions - FRA - July 2015
On 6 July 2015 Wilmington FRA Inc. acquired the trading assets and the
assumption of certain liabilities of Financial Research Associates ('FRA') a
leading US conference and networking provider of specialist events in
healthcare and finance from Financial Research Associates LLC (the 'Seller').
FRA was acquired for initial consideration of $13,034,683 (£8,376,938) in
cash. Subsequently, a further payment of $142,923 (£91,852) was made to the
Sellers in respect of a final working capital adjustment.
Deferred consideration totalling $3,000,000 is payable in cash to the Seller
in equal annual instalments on 1 July 2016 and 1 July 2017 conditional upon
the continued employment of the management team. These amounts are expensed
evenly throughout the vesting period directly in the income statement as
adjusting items - deferred consideration movements. An expense of $750,000
(£495,000) has been recognised in the income statement as adjusting items -
deferred consideration movements as at 31 December 2015.
Further contingent consideration of up to $4,600,000 is potentially payable in
cash subject to FRA achieving challenging revenue and profit targets over the
two financial years ending 30 June 2016 and 30 June 2017.
The initial consideration and the final working capital adjustment were
financed out of the extended £65.0m multi-currency revolving credit facility.
Acquisition related costs of £166,000 have been expensed as an adjusting item
in the income statement (see note 7).
The acquisition of FRA is consistent with Wilmington's strategy of acquiring
complementary businesses with high repeat revenues and strong, cash generative
income streams in the Group's key markets. FRA's business provides Wilmington
with additional networking expertise and will support the Insight and Finance
divisions.
Details of the fair value of the purchase consideration, the net assets
acquired and goodwill for the acquisition are as follows:
£'000
Purchase consideration:
Initial cash paid 8,377
Final working capital adjustment 92
Total consideration 8,469
The provisional fair values of assets and liabilities recognised as a result
of this acquisition are as follows:
£'000
Intangible assets - Customer relationships - Delegates 672
Intangible assets - Customer relationships - Sponsors 1,336
Intangible assets - Brand 862
Intangible assets - Tax amortisation benefit 1,848
Total intangible assets (see note 13) 4,718
Trade and other receivables (net of allowances) 353
Trade and other payables (193)
Subscriptions and deferred revenue (1,127)
Net identifiable assets acquired 3,751
Goodwill (see note 13) 4,718
Net assets acquired 8,469
The goodwill is attributable to FRA's strong position and profitability in
trading in specialist events in the US healthcare and finance sectors and
synergies to arise with other Wilmington businesses in the US and in the
Insight and Finance divisions after the acquisition. The estimated useful
economic life of the intangibles is as follows:
Intangible assets - Customer relationships - Delegates 5 years
Intangible assets - Customer relationships - Sponsors 10 years
Intangible assets - Brand 5 years
Intangible assets - Tax amortisation benefit 15 years
The acquired business contributed revenues of $4,460,040 (£2,939,723) and
contribution of $291,552 (£194,368) to the Group for the period from the date
of acquisition to 31 December 2015.
b) Disposals - Media Brands - July 2015
The assets and liabilities relating to the Knowledge, KFTV and Production
Intelligence (Media Brands that formed part of the Insight division) were
disposed of on 31 July 2015 for sale proceeds of £343,000 (net of a working
capital adjustment).
c) Non-controlling interests acquired - October 2015 and December 2015
In October 2015 the Group purchased the remaining 20% shareholding in Mercia
Ireland Limited and Mercia NI Limited for £74,000, making them wholly owned
subsidiaries. In December 2015 the Group purchased an additional 8.75%
shareholding in Wilmington Millennium Limited for £259,000 taking the Group's
holding to 91.25%.
d) Deferred consideration settlement - NHiS - January 2016
On 8 January 2016, Wilmington settled the final deferred consideration owing
of £330,000 paid in cash.
e) Acquisition - JMH Publishing (trading as 'Wellards') - January 2016
Wilmington acquired JMH Publishing Limited (trading as 'Wellards') from
Assetbond Limited and certain individuals (the 'Sellers') for initial
consideration of £4.2m paid on 18 January 2016. Wellards was acquired with
£1.4m of cash in its balance sheet. A final payment of up to £0.9m in March
2016 will be made once the final net current asset position has been agreed.
The process of fair valuing Wellards has not been completed at the date of
these financial statements. Subject to this process to fair value, the group
acquired approximately £0.7m of net assets that includes £0.7m of
subscriptions and deferred revenue. The excess consideration above the fair
value of these acquired net assets will be recognised as goodwill and
intangible asset on completion of the exercise to fair value. All amounts are
disclosed as provisional. The consideration was financed out of the Group's
existing £65.0m multicurrency loan facility and the business is expected to be
earnings enhancing in the first full year of ownership.
13. Goodwill, Intangible assets and Property, plant and equipment
Goodwill£'000 Intangible assets£'000 Property, plant and equipment£'000
Closing net book amount as at 30 June 2014 (audited) 76,855 28,746 5,727
Acquisitions - 380 -
Additions - 867 548
Disposals - (11) (34)
Exchange translation differences 341 65 104
Depreciation of property, plant and equipment - - (588)
Amortisation of publishing rights, titles and benefits - (3,038) -
Amortisation of computer software - (685) -
Closing net book amount as at 31 December 2014 (unaudited) 77,196 26,324 5,757
Additions - 882 281
Disposals - - (10)
Asset Held for sale (100) (472) -
Reclassification between categories - 542 (542)
Exchange translation differences (33) (240) (315)
Depreciation of property, plant and equipment - - (330)
Amortisation of publishing rights, titles and benefits - (3,080) -
Amortisation of computer software - (320) -
Closing net book amount as at 30 June 2015 (audited) 77,063 23,636 4,841
Acquisitions (provisional) 4,718 4,718 -
Additions 217 472 290
Disposals - - (7)
Exchange translation differences 469 377 5
Depreciation of property, plant and equipment - - (447)
Amortisation of publishing rights, titles and benefits - (3,011) -
Amortisation of computer software - (512) -
Closing net book amount as at 31 December 2015 (unaudited) 82,467 25,680 4,682
Acquired goodwill and intangibles relate to the acquisition of FRA (see note
12a). Additions to goodwill during the period relate to the purchase of
non-controlling interests (see note 12c).
14. Trade and other receivables
31 December 2015(unaudited)£'000 31 December 2014(unaudited)£'000 30 June 2015(audited)£'000
Trade receivables 20,151 19,863 18,518
Prepayments and other receivables 3,481 3,388 3,178
23,632 23,251 21,696
15. Trade and other payables
31 December 2015(unaudited)£'000 31 December 2014(unaudited)£'000 30 June2015(audited)£'000
Trade and other payables 18,560 18,613 20,410
Subscriptions and deferred revenue 21,297 20,079 19,165
39,857 38,692 39,575
16. Borrowings
31 December 2015£'000(unaudited) 31 December 2014£'000(unaudited) 30 June 2015£'000(audited)
Current liability
Bank overdrafts 2,151 2,232 496
Bank loans - - 37,306
Capitalised loan arrangement fees - old facility - - (147)
2,151 2,232 37,655
Non-current liabilityBank loans 46,375 40,335 -
Capitalised loan arrangement fee - old facility - (257) -
Capitalised loan arrangement fees - extended facility (493) - -
Bank loans net of facility fees 45,882 40,078 -
Details of the Group's bank facilities are set out in note 3. On 1 July 2015,
upon finalisation of the extension of the loan facility, £147,000 of old
capitalised loan arrangement fees were written off to the income statement as
net finance cost - adjusting items.
17. Share capital
Number of ordinary sharesof 5p each Ordinary shares£'000 Share premium account£'000 Treasury shares£'000 Total£'000
At 1 July 2014 (audited) 86,103,137 4,305 45,231 (878) 48,658
Shares issued 404,324 20 (6) - 14
Treasury shares reissued during the period - - - 782 782
At 31 December 2014 (unaudited) and 30 June 2015 (audited) 86,507,461 4,325 45,225 (96) 49,454
Shares issued 478,270 24 - -
- More to follow, for following part double click ID:nRSX9347PcRecent news on Wilmington
See all newsREG - Wilmington PLC - Proposed acquisition of Conversia
AnnouncementREG - Wilmington PLC - Director Declaration
AnnouncementREG - Wilmington PLC - Appointment of Joint Corporate Broker
AnnouncementREG - Wilmington PLC - Statement in relation to a potential acquisition
AnnouncementREG - Wilmington PLC - Trading Statement
Announcement