REG - Wilmington PLC - Interim Results <Origin Href="QuoteRef">WIL.L</Origin> - Part 2
22/02/2018 07:06
- Part 2: For the preceding part double click ID:nRSV5853Fa
(345) 11 (334)
At 31 December 2017 (unaudited) 49,500 814 2,632 (6,235) 46,711 54 46,765
The notes on pages 17 to 31 are an integral part of these consolidated
financial statements.
Consolidated Cash Flow Statement
Six months ended 31 December 2017 Six months ended 31 December 2016 Year ended 30
June 2017
(unaudited) (unaudited) (audited)
Notes £'000 £'000 £'000
Cash flows from operating activities
Cash generated from operations before adjusting items 17 7,728 7,962 26,653
Cash flows for adjusting items - operating activities (1,176) (1,073) (1,510)
Cash flows from share based payments (50) (87) (87)
Cash generated from operations 6,502 6,802 25,056
Interest paid (1,027) (880) (1,656)
Tax paid (2,518) (1,996) (3,905)
Net cash generated from operating activities 2,957 3,926 19,495
Cash flows from investing activities
Purchase of businesses net of cash acquired - (2,122) (19,005)
Deferred consideration paid (205) (1,295) (1,295)
Purchase of non-controlling interests (335) - -
Cash flows for adjusting items - investing activities (781) (116) (1,327)
Purchase of property, plant and equipment (2,860) (579) (1,300)
Cash flows from sale of leasehold property - - 7,300
Proceeds from disposal of property, plant and equipment 31 21 43
Purchase of intangible assets (1,047) (888) (1,599)
Net cash used in investing activities (5,197) (4,979) (17,183)
Cash flows from financing activities
Dividends paid to owners of the parent (4,019) (3,749) (7,150)
Dividends paid to non-controlling interests (62) (105) (105)
Share issuance costs (8) (5) (5)
Cash flows for adjusting items - financing activities (23) - (146)
Increase in bank loans 8,000 11,650 27,702
Decrease in bank loans (1,000) (3,546) (25,593)
Net cash generated from/(used in) financing activities 2,888 4,245 (5,297)
Net increase/(decrease) in cash and cash equivalents, net of bank overdrafts 648 3,192 (2,985)
Cash and cash equivalents, net of bank overdrafts, at beginning of the period 9,762 12,438 12,438
Exchange (losses)/gains on cash and cash equivalents (92) 366 309
Cash and cash equivalents, net of bank overdrafts at end of the period 10,318 15,996 9,762
Reconciliation of net debt
Cash and cash equivalents at beginning of the period 10,687 14,642 14,642
Bank overdrafts at beginning of the period 15 (925) (2,204) (2,204)
Bank loans at beginning of the period 15 (49,781) (47,126) (47,126)
Net debt at beginning of the period (40,019) (34,688) (34,688)
Net increase/(decrease) in cash and cash equivalents (net of bank overdrafts) 556 3,558 (2,676)
Net drawdown in bank loans (7,000) (8,104) (2,109)
Exchange gain/(loss) on bank loans 570 (1,376) (546)
Cash and cash equivalents at end of the period 11,965 17,233 10,687
Bank overdrafts at end of the period 15 (1,647) (1,237) (925)
Bank loans at end of the period 15 (56,211) (56,606) (49,781)
Net debt at end of the period (45,893) (40,610) (40,019)
The notes on pages 17 to 31 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.
As of 15 December 2017 the address of its registered office is 10 Whitechapel
High Street, London, E1 8QS. Prior to this date, the registered office address
was 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 the
professional markets.
This condensed consolidated interim financial information ('Interim
Information') was approved for issue on
21 February 2018.
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 2017 were approved by the
Board of Directors on 12 September 2017 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 2017 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 2017 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 2017, as described in those
Annual Financial Statements. The following new standards, amendments and
interpretations have been adopted in the current year:
International Financial Reporting Standards (IFRS/IAS) Effective for accounting periods starting after
IAS 7 * Disclosure initiative - Amendments to IAS 7 1 January 2017
IAS 12 * Recognition of Deferred Tax Assets for Unrealised Losses - Amendments to IAS 12 1 January 2017
IFRS 12 * Annual improvements 2014-2016 cycle 1 January 2017
The following new standards and amendments to standards have been issued but
are not yet effective for the purpose of the Interim Report and have not been
early adopted.
International Financial Reporting Standards (IFRS/IAS) Effective for accounting periods starting after
IFRS 2 * Classification and Measurement of Share Based Payment Transactions - Amendments to IFRS 2 1 January 2018
IFRS 9 Financial Instruments 1 January 2018
IFRS 15 Revenue from Contracts with Customers 1 January 2018
IFRS 16 * Leases 1 January 2019
IAS 28 * Investments in Associates and Joint Ventures 1 January 2019
Management is currently assessing the impact of the above new standards. In
advance of the year starting 1 July 2018, the Group will put in place
necessary processes to capture all of the adjustments and additional
disclosures required for those standards taking effect before this date.
2. Accounting policies (continued)
IFRS 15 Revenue from Contracts with Customers replaces IAS 18 Revenue and
related interpretations, introducing a single, principles based approach to
the recognition and measurement of revenue from all contracts with customers.
The new approach requires identification of performance obligations in a
contract and revenue to be recognised when or as those performance obligations
are satisfied, as well as additional disclosure. The Group is currently in the
process of completing its review of the potential impact of adopting IFRS 15.
The necessary processes to capture all of the adjustments and any additional
disclosures required under IFRS 15 will be put into place before the beginning
of the year starting 1 July 2018.
As previously disclosed in the 2017 Annual Report, the 2016 Annual Report was
subject to review by the FRC in accordance with their routine statutory
responsibilities. In response to the queries raised in this review, management
liaised with the FRC to discuss and impartially evaluate the Annual Report and
its compliance with IFRS and ESMA guidelines. As a result of the review and
subsequent discussions the 2017 Annual Report included some enhanced
disclosures which improved the quality of information presented. These
enhanced disclosures, where relevant, have been reflected in the Interim
Information presented for the six months ended 31 December 2017.
3. Principal risks and uncertainties
The principal risks and uncertainties that affect the Group are as stated on
pages 25 to 33 of the strategic report in the Annual Report and Financial
Statements for the year ended 30 June 2017. These remain unchanged since this
date. 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 £56m (2016:
£57m) 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. Any
undrawn amounts are charged a commitment fee at a rate of 0.9% (2016: 0.9%).
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 $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 US Dollar
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 £15.0m based on the
LIBOR rate and pays interest on £15.0m 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 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 remeasured 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.
3. Principal risks and uncertainties (continued)
(b) Foreign currency risk (continued)
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
(2016: $18.2m) 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 03 July 2017, the Group sold E1.0m to 15 November 2017 at a
rate of 1.1379
· On 03 July 2017, the Group sold E1.5m to 15 January 2018 at a
rate of 1.1360
· On 03 July 2017, the Group sold E2.5m to 16 April 2018 at a
rate of 1.1333
· On 03 July 2017, the Group sold $3.0m to 16 October 2017 at a
rate of 1.3027
· On 03 July 2017, the Group sold $3.0m to 15 March 2018 at a
rate of 1.3085
· On 03 July 2017, the Group sold $4.0m to 16 April 2018 at a
rate of 1.3100
The above derivatives are remeasured 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 £65.0m revolving credit facility with
Barclays Bank plc, HSBC Bank plc and The Royal Bank of Scotland plc through to
1 July 2020. On 17 January 2017 £20.0m of the accordion facility was
triggered, increasing the total unsecured bank facility to £85.0m. This
extension was made to fund the acquisition of HSJ. The extended facility
comprised of a revolving credit facility of £80.0m and an overdraft facility
across the Group of £5.0m. On 24 November 2017 the revolving credit facility
was reduced by £10.0m to £75.0m, to decrease the non-utilised portion.
(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.
3. Principal risks and uncertainties (continued)
(d) Credit risk (continued)
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 option 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 asset of £150,311 (2016:
liability of £1,474,217) for foreign exchange trading derivatives at fair
value through income or expense. In addition the Group has recognised a level
2 financial liability of £474,850 (2016: £769,278) for two (2016: 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
(a) 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;
· impairment of goodwill and intangible assets;
· adjusting items (included in operating expenses);
· other income - gain on sale of leasehold property; and
· finance costs.
Adjusted EBITA and adjusted EBITDA reconcile to profit on continuing
activities before tax as follows:
Profit before tax 2,039 5,031 15,862
Amortisation of intangible assets excluding computer software 3,407 2,820 6,028
Impairment of goodwill and intangible assets - - 2,366
Adjusting items (included in operating expenses) 3,526 947 3,468
Other income - gain on sale of leasehold property - - (6,333)
Finance costs 986 915 1,961
Adjusted operating profit ('adjusted EBITA') 9,958 9,713 23,352
Depreciation of property, plant and equipment included in operating expenses 399 493 1,071
Amortisation of intangible assets - computer software 653 455 1,165
Adjusted EBITA before depreciation ('adjusted EBITDA') 11,010 10,661 25,588
Adjusted EBITA before depreciation ('adjusted EBITDA')
11,010
10,661
25,588
Adjusted profit before tax reconciles to profit on continuing activities
before tax as follows:
Profit before tax 2,039 5,031 15,862
Amortisation of intangible assets excluding computer software 3,407 2,820 6,028
Impairment of goodwill and intangible assets - - 2,366
Adjusting items (included in operating expenses) 3,526 947 3,468
Other income - gain on sale of leasehold property - - (6,333)
Adjusted profit before tax 8,972 8,798 21,391
Adjusted profit before tax
8,972
8,798
21,391
5. Measures of profit (continued)
Adjusted results December 2017 £'000(unaudited) Adjusting items December 2017 £'000(unaudited) Statutory results December 2017 £'000(unaudited) Adjusted results December 2016 £'000(unaudited) Adjusting items December 2016 £'000(unaudited) Statutory results December 2016 £'000(unaudited)
Revenue 58,159 - 58,159 54,813 - 54,813
Operating expenses before share based payments, amortisation of intangible assets excluding computer software and impairment (47,863) (3,526) (51,389) (44,790) (947) (45,737)
Share based payments (338) - (338) (310) - (310)
Operating expenses before amortisation of intangible assets excluding computer software and impairment (48,201) (3,526) (51,727) (45,100) (947) (46,047)
Amortisation of intangible assets excluding computer software - (3,407) (3,407) - (2,820) (2,820)
Operating profit/(loss) 9,958 (6,933) 3,025 9,713 (3,767) 5,946
Finance costs (986) - (986) (915) - (915)
Profit before tax 8,972 (6,933) 2,039 8,798 (3,767) 5,031
(b) Reconciliation to adjusted profit before tax
6. Segmental information
In accordance with IFRS 8 the Group's operating segments are based on the
operating results reviewed by the Board, which represents the chief operating
decision maker. Following a strategic review in the year ended 30 June 2017,
the Group now reports its results in three operating segments (previously
four) as this more accurately reflects the way the Group is managed. The
comparatives have been restated to provide information on a consistent basis.
The Group's organisational structure reflects the main communities to which it
provides information, education and networking. The three divisions (Risk &
Compliance, Professional, and Healthcare) 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.
6. Segmental information (continued)
(a) Business segments
Risk & Compliance 19,596 5,249 19,535 5,630 42,272 12,265
Professional 18,480 2,986 19,506 2,726 39,472 5,864
Healthcare 20,083 3,921 15,772 3,413 38,585 9,705
Group contribution 58,159 12,156 54,813 11,769 120,329 27,834
Unallocated central overheads - (1,860) - (1,746) - (3,930)
Share based payments - (338) - (310) - (552)
58,159 9,958 54,813 9,713 120,329 23,352
Amortisation of intangible assets excluding computer software (3,407) (2,820) (6,028)
Impairment of goodwill and intangible assets - - (2,366)
Adjusting items (included in operating expenses) (3,526) (947) (3,468)
Other income - gain on sale of leasehold property - - 6,333
Finance costs (986) (915) (1,961)
Profit before tax 2,039 5,031 15,862
Taxation (775) (1,160) (2,988)
Profit for the financial year 1,264 3,871 12,874
Taxation
(775)
(1,160)
(2,988)
Profit for the financial year
1,264
3,871
12,874
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 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 monthsended 31December2017 Six months ended 31 December 2016 Yearended 30 June 2017
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
UK 34,337 31,275 68,588
Europe (excluding the UK) 9,055 9,310 18,049
North America 9,599 9,191 22,863
Rest of the world 5,168 5,037 10,829
Total revenue 58,159 54,813 120,329
7. Adjusting items
(a) Adjusting items
The following items have been charged to the Income Statement during the
period but are considered to be adjusting so are shown separately:
Adjusting items relating to property portfolio review and IT infrastructure transformation 3,018 - 1,027
Costs relating to successful and aborted acquisitions, disposals and integration 188 328 1,569
Restructuring and rationalisation costs 169 402 818
Increase in the liability for deferred consideration 151 - 54
Aborted leasehold property sale - 217 -
Other adjusting items (included in operating expenses) 3,526 947 3,468
Amortisation of intangible assets excluding computer software 3,407 2,820 6,028
Impairment of goodwill - - 2,366
Total adjusting items (classified in profit before tax) 6,933 3,767 11,862
Total adjusting items (classified in profit before tax)
6,933
3,767
11,862
(b) Property portfolio review and IT infrastructure transformation
During the year ended 30 June 2017 Wilmington performed a review of its London
property portfolio, on the back of this it sold the leasehold interest in its
Underwood Street London premises for a £7.3m cash consideration. This resulted
in a gain on sale of £6.3m. At the same time as disposing of its leasehold
interest, Wilmington entered into a new ten-year market rate lease for a
London head office premises near Aldgate. The Aldgate premises became the
address of its registered office on 15 December 2017.
The items which have been credited to profit or loss in relation to this
review are as follows:
Operating expenses - adjusting items relating to the property portfolio
review:
Rent, rates and legal and professional fees relating to new Aldgate lease (1,317) - (514)
Relocation and fit out costs incurred on occupation of Aldgate premises (315) - -
Redundancy and implementation costs relating to IT infrastructure transformation (954) - -
Accelerated depreciation of property plant and equipment on sale of Underwood Street leasehold property (322) - (85)
Accelerated depreciation of computer equipment relating to IT infrastructure transformation (110) - -
Cost to surrender Old Broad Street lease - - (231)
Onerous lease on property in Kent - - (197)
Total adjusting items relating to property portfolio review (3,018) - (1,027)
Total adjusting items relating to property portfolio review
(3,018)
-
(1,027)
8. Finance costs
Six months ended31 December 2017 Six months ended 31 December 2016 Year ended 30
June
2017
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Finance costs comprise:
Interest payable on bank loans and overdrafts 903 849 1,814
Amortisation of capitalised loan arrangement fees 83 66 147
986 915 1,961
9. Taxation
Six months ended 31 December 2017 Six months ended 31 December 2016 Year ended 30 June
2017
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Current tax:
Current tax on profits for the period 1,273 1,463 4,292
Adjustments in respect of previous years 14 - 60
Total current tax 1,287 1,463 4,352
Deferred tax:Deferred tax credit (387) (312) (1,247)
Effect on deferred tax of change in corporation tax rate (125) 9 (117)
Total deferred tax (512) (303) (1,364)
Taxation 775 1,160 2,988
10. Dividends
Distributions to owners of the parent in the period:
Sixmonths ended 31 December 2017 Sixmonths ended 31 December 2016 Year ended 30 June2017 Sixmonths ended 31 December 2017 Sixmonths ended 31 December 2016 Year months ended 30 June2017
(unaudited) (unaudited) (audited) (unaudited) (unaudited) (audited)
pence per share pence per share pence per share £'000 £'000 £'000
Final dividends recognised as distributions in the year 4.6 4.3 4.3 4,019 3,749 3,749
Interim dividends recognised as distributions in the year - - 3.9 - - 3,401
Total dividends paid in the period 4,019 3,749 7,150
Interim/final dividend proposed 4.0 3.9 4.6 3,495 3,401 4,011
11. Earnings per share
Adjusted earnings per share has been calculated using adjusted earnings
calculated as profit after taxation and non-controlling interests but before:
· amortisation of intangible assets excluding computer software;
· impairment of goodwill and intangible assets;
· adjusting items (included in operating expenses);
· other income - gain on sale of leasehold property; and
· adjusting items (included in finance costs).
The calculation of the basic and diluted earnings per share is based on the
following data:
Six months ended 31 December 2017 Six months ended 31 December 2016 Year ended 30 June
2017
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Earnings from continuing operations for the purpose of basic earnings per share 1,245 3,853 12,836
Add/(remove):
Amortisation of intangible assets excluding computer software (net of non-controlling interests) 3,407 2,820 6,028
Impairment of goodwill and intangible assets - - 2,366
Adjusting items (included in operating expenses) 3,526 947 3,468
Other income - gain on sale of leasehold property - - (6,333)
Tax effect of adjustments above (1,220) (820) (1,757)
Adjusted earnings for the purposes of adjusted earnings per share 6,958 6,800 16,608
Number Number Number
Weighted average number of ordinary shares for the purpose of basic and adjusted earnings per share 87,317,182 87,062,219 87,193,340
Effect of dilutive potential ordinary shares:
Future exercise of share awards and options 704,993 610,495 611,052
Weighted average number of ordinary shares for the purposes of diluted earnings per share 88,022,175 87,672,714 87,804,393
Basic earnings per share 1.43 4.43p 14.72p
Diluted earnings per share 1.41 4.39p 14.62p
Adjusted basic earnings per share ('adjusted earnings per share') 7.97 7.81p 19.05p
Adjusted diluted earnings per share 7.91 7.76p 18.91p
12. 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 2016 (audited) 70,763 29,038 4,628
Acquisitions 2,064 2,350 183
Additions - 888 579
Disposals - - (13)
Exchange translation differences 910 878 15
Depreciation of property, plant and equipment - - (493)
Amortisation of publishing rights, titles and benefits - (2,820) -
Amortisation of computer software - (455) -
Closing net book amount as at 31 December 2016 (unaudited) 73,737 29,879 4,899
Additions - 711 721
Acquisitions 12,867 7,742 -
Disposals - (1) (589)
Exchange translation differences (321) (391) (9)
Impairment (1,536) (830) -
Depreciation of property, plant and equipment - - (578)
Amortisation of publishing rights, titles and benefits - (3,208) -
Amortisation of computer software - (710) -
Reallocation 1,281 (1,281) -
Closing net book amount as at 30 June 2017 (audited) 86,028 31,911 4,444
Additions - 1,047 2,860
Acquisitions (762) - -
Disposals - (4) (24)
Exchange translation differences (454) (368) (6)
Depreciation of property, plant and equipment - - (831)
Amortisation of publishing rights, titles and benefits - (3,407) -
Amortisation of computer software - (653) -
Closing net book amount as at 31 December 2017 (unaudited) 84,812 28,526 6,443
Included within additions to property plant and equipment is £2,371,000 of
leasehold improvements, furniture and computer equipment relating to the
London head office move to premises near Aldgate.
The acquisition movement in goodwill relates to a change in the provisional
value of the deferred tax asset arising on the acquisition of Health Services
Journal in the year ended 30 June 2017.
Depreciation of property plant and equipment includes £432,000 of accelerated
depreciation on assets disposed of on the exit of the Underwood Street
leasehold property in December 2017 and in relation to the IT infrastructure
outsourcing. The decision to exit the leasehold property triggered a review,
and subsequent reduction, of the useful economic lives of assets held at the
property. On disposal, the net book value of these assets was £nil, and the
portion of depreciation arising on the reduction in useful economic lives of
these assets is shown within other adjusting items (included in operating
expenses) within the Income Statement. The remaining £399,000 depreciation is
included in operating expenses within the Income Statement.
13. Trade and other receivables
31 December 2017 (unaudited) £'000 31 December 2016(unaudited)£'000 30 June 2017(audited)£'000
Trade receivables 23,422 25,371 23,207
Prepayments and other receivables 4,811 4,510 5,237
28,233 29,881 28,444
14. Trade and other payables
31 December 2017 (unaudited) £'000 31 December 2016(unaudited)£'000 30 June2017(audited)£'000
Trade and other payables 23,270 20,748 25,357
Subscriptions and deferred revenue 26,342 24,166 26,973
49,612 44,914 52,330
15. Borrowings
31 December 2017 (unaudited) 31 December 2016 (unaudited) 30 June 2017 (audited)
£'000 £'000 £'000
Current liability
Bank overdrafts 1,647 1,237 925
1,647 1,237 925
Non-current liabilityBank loans 56,211 56,606 49,781
Capitalised loan arrangement fees (367) (386) (428)
Bank loans net of facility fees 55,844 56,220 49,353
16. Share capital
Number of ordinary sharesof 5p each Ordinary shares£'000 Share premium account£'000 Treasury shares£'000 Total£'000
At 1 July 2016 (audited) 86,985,731 4,349 45,225 (96) 49,478
Shares issued 262,243 13 - - 13
At 31 December 2016 (unaudited) and 30 June 2017 (audited) 87,247,974 4,362 45,225 (96) 49,491
Shares issued 166,099 9 - - 9
At 31 December 2017 (unaudited) 87,414,073 4,371 45,225 (96)
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