Final Results

RNS Number : 4750M

Wilmington Group Plc

18 September 2012

 



18 September 2012

WILMINGTON GROUP PLC

("Wilmington", "the Group" or "the Company")

Full Year Results for the year ended 30 June 2012

Wilmington Group plc, the professional information and training group, today announces its results for the year ended 30 June 2012.

Highlights

·      Good progress towards medium term objectives

-     Adjusted EBITA¹ increased by 10.2% to £16.5m (2011: £14.9m)

-     Adjusted EBITA margins improved to 19.3% (2011:17.8%)

-     Adjusted Profit before Tax² up 4.6% to £14.0 million (2011: £13.4 million) on revenues up 1.8% to £85.3m (2011: £83.8m): statutory profit before tax increased by 4.1% to £6.3m

·      Good progress towards strategic objectives

-     continued transition to a higher margin, better quality business

-     growth in recurring revenues

-     focus on  key market verticals, with management organised by market

-     exited contract directory publishing

-     significant investment in new product development

-     technology and customer demand increasingly driving convergence of training and information activities

·      Publishing & Information revenues from the higher margin online/digital business have increased to 76% (2011: 72%), with print decreasing to 11% (2011: 16%)

Segmental profit³ up 14.8% to £12.2m (2011: £10.6m) on revenues up 4% to £41.8m (2011: £40.2m) 

·      Significantly restructuring of the legal training business has contributed to improved profitability in Training and Events

Segmental profit³ up 9.2% to £7.1m (2011: £6.5m) on revenues stable at £43.5m (2011: £43.6m) 

·      Strengthening financial position

-    continued strong cash generation, with 109% (2011: 111%) cash conversion of operating profit

-    net debt £3.8m lower at £36.2m (2011: £40.0m)

-    planned sale of surplus freehold property

·      Proposed final dividend of 3.5 pence per share, making a full year maintained dividend of 7.0 pence per share

¹                      Adjusted EBITA - see note 3 to the financial statements  

²                      Adjusted Profit before Tax - see note 3 to financial statements 

³                      Segmental profit before amortisation and share based payments - see note 4 to the financial statements

Mark Asplin, Chairman, commented:

"As part of our transition to a higher margin better quality business, a number of major operational challenges have been successfully addressed during the year.  The result is a more streamlined, focussed and profitable business. 

"The legal training business is now more profitable and in better shape than it was twelve months ago, although market conditions affecting our client base remain difficult.  The phasing out of legacy publishing products will continue during the current year as the Group continues to invest in subscription based digital products and migrates its business away from print directories and services in which it does not own intellectual property. We expect the remainder of our core businesses to continue to show growth. We are also pleased with the progress we are making towards achieving our medium term financial targets."

For further information, please contact:

Wilmington Group Plc Charles Brady, Chief Executive Basil Brookes, Finance Director	020 7422 6800
Weber Shandwick Financial	020 7067 0700
Nick Oborne or Stephanie Badjonat

Presentation:  A copy of the investor presentation is available on the Group's website www.wilmington.co.uk from 7.00 am today.

Notes to editors:

Wilmington Group plc is one of the UK's leading providers of information and training for professional business markets including accountancy and tax; banking; charities; financial compliance; healthcare; insurance; law and pensions. Capitalised at approximately £92 million, Wilmington floated on the London Stock Exchange in 1995.

Chairman's Statement

I am pleased to present my report on Wilmington's results for the year ended 30 June 2012 in which considerable progress has been made towards achieving both our medium term and strategic goals. 

Adjusted EBITA has grown by 10.2% to £16.5m and adjusted EBITA Margin has improved by 1.5 percentage points to 19.3%.  Net borrowings during the year reduced from £40.0m to £36.2m despite incurring circa £1m of restructuring costs. 

As part of our transition to a higher margin better quality business, a number of major operational challenges have been successfully addressed during the year.  In Publishing & Information the move to a fully online/digital publishing business gathers momentum whilst the controlled phasing out of legacy publishing products continues.  Online/digital publishing represented 76% of the Group's total publishing revenues (2011: 72%), print products represented 11% (2011: 16%) with the balance coming from information services.  Since the year end the Group has exited contract directory publishing, which was predominantly advertising based. There were significant changes to the legal training business to align its activities, cost base and operational management with the current market conditions.  The result is a more streamlined, focused and profitable business. 

Elsewhere the Group has continued to trade well and achieved growth in all major business units, particularly those focused overseas.

As a consequence of actions we have taken to improve efficiency we have reduced headcount by 7% during the year. We are therefore now in a position to reduce the amount of office space we need.  The planned sale of one of our freehold buildings will allow us to further reduce the Group's net borrowings, finance charges and operating costs. 

Financial Performance

Revenue in the year to 30 June 2012 increased by 1.8% to £85.3m (2011: £83.8m).  This growth includes the net impact of a full year's revenue from Axco, which was acquired in September 2010, a reduction of £0.95m of revenue resulting from the closure of a number of directory and print products, and lower revenues resulting from the planned reduction in the legal training course programme.  Elsewhere revenues have shown aggregate year-on-year growth of 6.0%.

Adjusted EBITA increased by 10.2% to £16.5m (2011: £14.9m).  Statutory EBITA increased by 11.1% to £15.1m (2011: £13.6m).

Adjusted Profit before Tax increased by 4.6% to £14.0m (2011: £13.4m) reflecting the increased cost of our borrowing facilities following their renewal in June 2011.  Statutory Profit before Tax increased by 4.1% to £6.3m (2011:£6.1m).

Operating cash flow continued to be strong with a cash conversion rate of 109% (2011: 111%) of operating profit into operating cash flow.

Adjusted Earnings per Share increased by 5.3% to 12.41 pence (2011: 11.79 pence).  Basic earnings per share were 5.81 pence (2011: 5.20 pence).

Due to the continuing strong cash flow of the business the Group's net bank debt at 30 June 2012 reduced to £36.2m (2011: £40.0m).  The current facilities of £65m are committed until February 2016.  Net debt to Adjusted EBITDA was 2.1 (2011: 2.5).

Dividend

The Board is recommending that the dividend for the year is maintained at the same level as the previous year.  The Board proposes a final dividend of 3.5 pence per share payable on 16 November 2012 to shareholders on the register on 19 October 2012.  Taken together with the interim dividend of 3.5 pence per share this makes a total dividend for the year of 7.0 pence per share (2011: 7.0 pence per share).  The dividend is covered 1.8 times by Adjusted Earnings per Share (2011: 1.7 times).

Board Changes

Following my appointment as Chairman in November 2011, there have been a number of other board changes.  The Board has been strengthened with the appointments of Derek Carter and Nathalie Schwarz as Non-Executive Directors and the appointment of Neil Smith, the Group's Chief Operating Officer, as an Executive Director.  Derek has a wealth of experience in B2B media and Nathalie, who is a qualified solicitor, has considerable experience in broadcast media.    Derek has been appointed as the Senior Non-Executive Director and Chair of the Nomination Committee.  Nathalie has been appointed Chair of the Remuneration Committee.   I am already delighted by their contribution.   Neil has been with the Group for 15 years.  He was previously Chief Operating Officer of the Publishing & Information Division.  His role as Group Chief Operating Officer reflects the recognition that we increasingly offer a range of products and services to our clients including information and training.  Neil's appointment will further enhance collaboration within the Group. 

In September this year Tony Foye was appointed to the Board to replace Basil Brookes who is retiring from the Group at the end of the year.  Tony will become Chief Financial Officer at the Annual General Meeting in November.  He brings vast experience including many years as Finance Director of Taylor & Francis Group plc and several years as Group Finance Director of Informa plc.  On behalf of the board I would like to thank Basil for his contribution to the Group and wish him well in his retirement.

Outlook

The legal training business is now more profitable and in better shape than it was twelve months ago, although market conditions affecting our client base remain difficult.  The phasing out of legacy publishing products will continue during the current year as the Group continues to invest in subscription based digital products and migrates its business away from print directories and services in which it does not own intellectual property.  We expect the remainder of our core businesses to continue to show growth. We are also pleased with the progress we are making towards achieving our medium term financial targets.

Finally, I would like to thank all my colleagues in the Wilmington Group for their hard work and determination as we continue to build a higher quality group of businesses which will deliver progressive stakeholder value in the years ahead.

Business Review

Objectives and Strategy

Wilmington's strategy remains unchanged, namely to increase shareholder value by delivering sustainable and growing profits from servicing the information, training and compliance requirements of professional business markets.

Our investment strategy is focused on developing and acquiring businesses with high repeat revenues and strong, cash generative income streams both in the UK and overseas.  The result of implementing this strategy is a business with an increasing proportion of revenues derived from subscriptions to products which disseminate content-rich, high-value information digitally.  In the long term, we believe that tighter regulatory control and more complex legislation in our key markets will increase the demand for our products and services, both in the UK and abroad.

During the year we managed and reported our business as two divisions: Publishing & Information and Training & Events.

Publishing & Information

	2012	2011
	£m	£m
Revenue	41.8	40.2
Profit Contribution (see note 4)	12.2	10.6

The Publishing & Information division provides intelligence, information, solutions, databases and services to the Pensions & Insurance, Healthcare and Business sectors.  Many of the businesses we have developed, and all of those we have acquired in recent years, are wholly digital.  In the division as a whole, 76% of revenues were generated from digital delivery during the year, 11% of revenues were generated from print products with the balance coming from information services.

The movement in revenues between 2011 and 2012 includes a reduction of almost £1m from the phasing out of legacy publishing products and the inclusion in 2012 of 12 months' results for Axco, acquired in September 2010, compared with 9 months in the prior year.

In the year ahead the scale of our phasing out of legacy publishing products (which are predominantly advertising based) will increase, including the closure of our contract directory publishing activities.  In total some £2.5m of revenues generated in the year ended 30 June 2012 are expected to be discontinued.  The Group's work in progress relates almost entirely to its print directory products and, consequently, provision has been made as a non-recurring cost against substantially all work in progress balances.  Whilst this decline in revenues continues to represent a challenge, the investments we have made in the continuing evolution of the digital products, which typically have sustainable subscription revenues and higher margins than print products, together with tight cost control, and a further reduction in headcount and overheads, should ensure that its financial impact is mitigated in the current financial year.

In the Insurance market we are the leading provider of international market, compliance and regulatory information for the global insurance industry and continue to perform well with underlying sales growth of 10 % year-on-year.  We have continued to invest heavily in the content and technology which underpins this business and anticipate further returns during the current financial year. Our international company report business, which also services the insurance industry, showed good growth during the year and we made progress with the development of technology to further embed these services into the workflow of our customers.

In the Pensions market we provide the leading electronic regulatory information service for the UK pensions industry as well as the leading databases of pension funds and their advisors.  Whilst this is a mature market and trading conditions are difficult we have maintained excellent levels of profitability.

In Healthcare we are the UK's leading provider of healthcare professional information to pharmaceutical companies, healthcare companies and the public sector.  During the year we have seen strong revenue and profit growth with a significant reduction in the investment spend in Onmedica, a development which is allowing us to augment our services for pharmaceutical companies with a growing permissioned digital marketing channel.  Our specialist healthcare press agency, based in Paris and London, also performed well during the year.

In the charities market we launched a major new web product under the Charity Choice brand which allows charities to attract donations from the public and manage networks of fundraisers and friends.  This launch was made on the back of a significant investment in prior years to improve content in our charity products, which has also supported the continued development of our digital subscription products in this market.  Also in the charity market, under the Smee & Ford brand, we have invested in new data capture technology which will allow us to develop and launch legacy analysis tools for charities. 

During the year we finished the development of a new content management platform and used this to relaunch the digital versions of all of our legal and professional magazines. We also invested in the development of the content for our legal databases. Increasingly in the digital environment our publishing and training activities are converging and consequently we have worked to ensure a more integrated approach to the management of these assets and exploitation of associated synergies.

Our Business portfolio also saw the completion of major relaunches for our two key film & TV information assets. Against a challenging business environment, our business data divisions have worked hard and successfully to maintain strong profitability and Mortascreen, our mortality and fraud prevention database, has gained market share. We also completed the acquisition of certain assets of Millennium ADMP Ltd from administrative receivership; Millennium was a significant data supplier to Mortascreen and securing its future was important to the ongoing success of this business.

Training & Events

	2012	2011
	£m	£m
Revenue	43.5	43.6
Profit Contribution (see note 4)	7.1	6.5

The Training & Events division focuses on the following professional markets: Accountancy, Banking & Compliance and Legal.  It delivers training both face-to-face and digitally.  We have experienced a variety of market conditions.  The legal CPD training business has seen continued challenges resulting in lower revenues compared to the prior year albeit with increased profits.  Elsewhere in the division the Accountancy and Banking & Compliance businesses have all seen growth in turnover.  Increasingly our new business is associated with compliance and regulatory change.

The legal training business is the leading provider of post qualification legal training for UK lawyers.  It also provides specialist courses for paralegals, professionals in commerce & industry as well as mandatory accreditation programmes and the New York Bar course.  Through the Bond Solon brand it is the UK's leading provider of expert and professional witness training.

In autumn of 2011, following a number of years decline, the operational management of the legal training business was restructured and the size of the continuing professional development programme reduced to reflect the lower demand for seminars and conferences.  In England and Wales, turnover in this part of the legal training business declined by some 20% during the year to 30 June 2012.  Despite this turnover decline, the actions we took to restructure the business, including a significant headcount reduction, resulted in profits increasing during the year.  In Scotland there was another creditable performance driven by the paralegal training programme which fulfils the academic requirements of the Scottish Law Society's Registered Paralegal status.

The witness training part of the legal training business, Bond Solon, has performed well, growing both revenue and profits over the year.

The Banking & Compliance business has performed well, increasing revenues and investing significantly in new programmes.  The provision of certificated training in the areas of trust management, compliance, anti-money laundering and financial crime prevention has continued to make good progress increasing revenues and profits during the year.  New programmes have begun in Malaysia and Australia during the year.  More significantly a number of multi-year in-house programmes with major tier 1 banks commenced during the year; only a small proportion of the revenue has been recognised in the year ended 30 June 2012, and this bodes well for the current financial year and beyond.

The graduate entrant training for investment banks in London, New York and Hong Kong performed well with revenues increasing, albeit with some pricing and margin pressure.  The graduate entrant training in New York and London is highly seasonal with the bulk of revenues and profits accruing during the first quarter of our financial year.  It is pleasing to report that the year to 30 June 2013 has begun well with a very busy summer programme.

In Accountancy, we are the leading provider of technical, marketing and training support to the accountancy profession.  After two record years of revenues and profit it is pleasing to be able to report another successful year of growth, during which we also acquired the complementary CCH continuing professional development portfolio of courses.

Acquisitions and Disposals

In July 2011 the Group acquired the remaining 10% non-controlling interest in our UK healthcare business under the terms of the acquisition agreement and subsequent variation agreement. The consideration of £1.82m was satisfied by the issue of 1,289,156 Wilmington ordinary shares.

In August 2011 the Group acquired a complementary portfolio of CPD courses from Wolters Kluwer (CCH) for its Accountancy business at an agreed valuation of £0.25m.

In May 2012 the Group acquired certain assets of Millennium ADMP Ltd, which was in administrative receivership, for a cash consideration of £0.5m.  Millennium provides information and services to the insurance market but, more importantly, it was a key supplier of data and sales services to Mortascreen, our mortality data product.  The acquisition was made primarily to secure the ongoing success of our existing business.

In June 2012 the Group disposed of its company secretarial and company formations business to Orangefield Services (UK) Limited for a consideration of £1.0m with deferred consideration of up to a further £0.1m dependent upon future revenues.

We have a continually reviewed acquisition and disposal strategy, including a realistic and disciplined valuation methodology backed up by thorough post-acquisition analysis.  We seek to justify acquisitions both in terms of a sensible return on capital and in terms of the added value we can realistically achieve in growth and profit margins. We are proud of our record of deriving value from acquisitions, despite the challenging markets.  We have consistently produced returns substantially in excess of our cost of capital which have been achieved through the application of our prudent acquisition criteria and effective subsequent development of acquired assets.

Overview of the Group's financial performance

In the year ended 30 June 2012 Wilmington generated revenues of £85.3m, an increase of 1.8% from £83.8m in the year  ended 30 June 2011. Whilst this included a full year's revenue from Axco, which was acquired in September 2010, there was a reduction in revenue of £0.95m as a result of phasing out a number of legacy print products which had been produced in the prior year. Furthermore, the actions we took in the legal training business during the year included a reduction in the course programme resulting in further significant revenue reduction. Elsewhere revenues have shown an aggregate 6.0% increase.

Adjusted EBITA increased by 10.2% to £16.5m (2011: £14.9m).  Statutory EBITA increased by 11.1% to £15.1m (2011: £13.6m).

Adjusted Profit Before Tax increased by 4.6% to £14.0m (2011: £13.4m).  Profit before Tax increased by 4.1% to £6.3m reflecting the increased cost of our borrowing facilities following their renewal in June 2011.

Non-recurring costs

During the year the Group incurred non-recurring costs of £0.9m (2011: £0.7m) relating to rationalisation costs, provision against substantially all remaining print directory work-in-progress and costs of acquisitions less profit on sale of businesses. 

Taxation

The effective tax rate (''ETR'') is 20.1% (2011: 23.8%) based on the statutory profit before tax. The difference between this ETR and the standard rate of tax in the UK of 25.5% (2011: 27.5%) is primarily due to the effect of the reducing tax rate to 24% giving rise to a deferred tax credit of £0.5m (2011: £0.6m), together with the effect of profits on sale of a business being sheltered by brought forward capital losses and indexation allowances.

Earnings per Share

Adjusted Earnings per Share increased by 5.3% to 12.41p (2011: 11.79p). Basic Earnings per Share increased by 11.7% to 5.81p (2011: 5.20p).

Earnings and Adjusted Earnings per Share are calculated on the weighted average number of shares in issue of 84,107,422 for the year ended 30 June 2012 (2011: 82,788,676).

Balance Sheet and Net Debt

At 30 June 2012 the Group had net debt of £36.2m (2011: £40.0m). This reduction demonstrates the strong underlying cash flows generated by the Group.

Key Financial and Operational Targets ("KPI's")

At a Group level we have five key financial and operational targets. In addition, each of the operating divisions monitors a number of key performance indicators. This year we delivered an improved performance against the majority of our financial and operational targets.  By continuing to focus on these benchmarks we have been able to concentrate on mitigating the adverse effects of the global recession and produce good results whilst establishing a more resilient and efficient platform to support future growth.

1. Adjusted Profit before Tax

This measure indicates the trading profits of the Group, after bank and interest charges, but before amortisation and impairment of intangible assets and goodwill, non-recurring items, the unwinding of the discounts on the provisions for the future purchase of non-controlling interests and share based payments. Amortisation is a non-cash technical adjustment which does not necessarily reflect the inherent value of assets. This is particularly the case where the value of assets has been enhanced as a consequence of management action.

In the year ended 30 June 2012, Adjusted Profit before Tax increased by 4.6% to £14.0m (2011: £13.4m).

2. Adjusted Earnings per Share

This key measure indicates the underlying profit attributable to shareholders. It measures not only trading performance, but also the impact of treasury management, bank and interest charges, as well as the efficient structuring of the Group to minimise taxes.  Our business and financial strategy is directed at delivering consistent adjusted earnings per share growth.  Our incentive programmes are designed to support this strategy. 

In the year ended 30 June 2012, Adjusted Earnings per Share increased by 5.3% to 12.41p per share (2011: 11.79p).  The increase was due to slightly better overall performance achieved by wholly owned businesses.  It also reflects the reduction in the effective tax rate described in ''Taxation" above.

3. Cash flow

The quality of the operating profits is underpinned by the strong cash flow.  The Group's business is strongly cash generative; operating cash flow for the year ended 30 June 2012 of £16.5m represented 109% of operating profit before interest and amortisation (2011: £15.1m,111%). Free cash flow, which is calculated after deduction from operating cash flow of capital expenditure, payment of corporation tax and payment of interest, was £10.4m (2011: £7.1m).

4. Consistent and Sustainable Revenue Streams

The disposal of non-core assets in recent years has allowed the Group to focus on a portfolio of assets based in key professional markets.  This push towards more robust and sustainable revenue streams has resulted in a strong portfolio of offerings, which includes:

• data, information, intelligence and solution sales;

• professional training, events and services; and

• professional accreditation and assessment.

The Group has continued to increase the supply of its products and services online or digitally, but remains conscious of the needs of markets which continue to prefer some products produced in hard copy format or in person.  Our businesses are supported by management and delivery systems utilising the latest technology.  We have invested considerable resources in the improvement of our operating systems and online services which will deliver benefits in the current year and beyond.

This is reflected in the following split of revenue streams:

• Subscriptions and information sales 57% of revenue (2011: 57%);

• Professional education and events 34% of revenue (2011: 35%);

• Directory advertising 7% of revenue (2011: 7%);

• Magazine advertising 2% of revenue (2011: 1%).

This represents a broad revenue base and reflects the Group's on-going strategy to ensure that there are no significant dependencies on specific sources of revenue.

5. Adjusted Operating Margin (''Return on Sales")

Adjusted Operating Margin or Return on Sales ("ROS") is defined as Adjusted EBITA (see note 3) expressed as a percentage of Revenue.  During the year ended 30 June 2012 ROS was 19.3% compared to 17.8% in the prior year.

Wilmington's People

Integral to Wilmington's growth and success is the talent, expertise, professionalism and commitment of our people. During the year we have continued to build on the foundations of becoming an employer of choice and we are committed to ensuring that Wilmington remains a great place to work. Our market sectors remain challenging and in order to achieve our growth plans we are committed to ensuring we attract and retain the best talent.

Following the launch of our new branding and the Wilmington Vision and Values Engagement Programme there is an increased sense of collaboration across businesses to develop new initiatives.

Talent management is a key priority. We are committed to developing our people to realise their potential and we continue to invest in training and development initiatives. The new  Performance Development Review Process incorporates a Personal Development Plan for everyone and we encourage continuous learning. Investment also continues in tailored development programmes aimed at the leadership and senior management population.

Activity continues to ensure we respond appropriately to legislation and regulatory requirements. Further investment has been committed to update our HR information systems and an employee benefits consultancy appointed to assist with our preparation for compliance with pension auto enrolment requirements in 2013. Compliance with the Anti Bribery and Corruption legislation continues to be an ongoing priority and training on Wilmington policies and procedures is available for all staff using Bond Solon's on line training suite.

Consolidated Income Statement

For the year ended 30 June 2012

	Notes	Year ended 30 June 2012 £'000	Year ended 30 June 2011 £'000
Revenue	4	85,326	83,779
Cost of sales		(25,824)	(25,463)
Gross profit		59,502	58,316
Operating expenses excluding amortisation and non-recurring items	5	(43,494)	(44,008)
Amortisation	5	(6,046)	(5,711)
Operating expenses before non-recurring items		(49,540)	(49,719)
Non-recurring items	5	(924)	(715)
Total operating expenses		(50,464)	(50,434)
Operating profit		9,038	7,882
Finance income	6	2	20
Finance costs	6	(2,712)	(1,825)
Profit from continuing activities before income tax		6,328	6,077
Income tax expense	7	(1,274)	(1,448)
Profit for the financial year		5,054	4,629
Profit attributable to:
Owners of the Parent		4,884	4,306
Non-controlling interests		170	323
		5,054	4,629
Earnings per share attributable to Owners of the Parent during the year
Basic earnings per share	9	5.81p	5.20p
Diluted earnings per share	9	5.63p	5.07p

Consolidated Statement of Comprehensive Income

For the year ended 30 June 2012

		Year ended 30 June 2012	Year ended 30 June 2011
		£'000	£'000
Profit for the year		5,054	4,629
Other comprehensive (expense)/income
Interest rate swap fair value (loss)/gain taken directly to equity		(926)	437
Tax on interest rate swap (loss)/gain taken directly to equity		212	(133)
Exchange translation differences		13	43
Other comprehensive(expense)/ income for the year, net of tax		(701)	347
Total comprehensive income for the year		4,353	4,976
Total comprehensive income for the year  attributable to:
-Owners of the Parent		4,172	4,666
-Non-controlling interests		181	310
		4,353	4,976

Consolidated Balance Sheet

As at 30 June 2012

		As at 30 June 2012	As at 30 June 2011
	Notes	£'000	£'000
Non-current assets
Goodwill	11	74,593	74,681
Intangible assets	12	31,522	36,216
Property, plant and equipment		6,772	7,776
Deferred income tax asset		639	335
		113,526	119,008
Current assets
Inventories	13	59	828
Trade and other receivables	14	20,110	21,658
Derivative financial assets	15	-	16
Cash and cash equivalents		3,954	2,321
		24,123	24,823
Non-current assets held for sale		888	-
Total assets		138,537	143,831
Current liabilities
Trade and other payables	16	(35,552)	(37,025)
Current income tax liabilities		(1,122)	(1,377)
Deferred consideration		(160)	-
Derivative financial liabilities	15	(26)	(379)
Bank overdrafts	17	(2,159)	(2,277)
Provisions for future purchase of non-controlling interests	18	(1,808)	-
		(40,827)	(41,058)
Non-current liabilities
Bank loans net of facility fees	17	(37,218)	(38,990)
Deferred consideration		(767)	(866)
Derivative financial liabilities	15	(1,446)	(187)
Deferred income tax liability		(6,518)	(7,938)
Provisions for future purchase of non-controlling interests	18	(165)	(1,896)
		(46,114)	(49,877)
Total liabilities		(86,941)	(90,935)
Net assets		51,596	52,896
Equity
Share capital		4,305	4,241
Share premium		45,231	43,792
Treasury shares		(4,008)	(4,008)
Obligation to issue shares		-	1,746
Translation reserve		93	91
Share based payments reserve		815	820
Retained earnings		5,160	6,164
Equity attributable to the Owners of the Parent		51,596	52,846
Non-controlling interests	19	-	50
Total equity		51,596	52,896

Consolidated Statement of Changes in Equity

	Share capital £'000	Share option reserve £'000	Translation reserve £'000	Retained earnings £'000	Total £'000	Non-controlling interests £'000	Total equity £'000
At 1 July 2010	43,714	575	35	7,202	51,526	53	51,579
Profit for the year	-	-	-	4,306	4,306	323	4,629
Exchange translation difference	-	-	56	-	56	(13)	43
Interest rate swap fair value gain taken directly to equity	-	-	-	437	437	-	437
Tax on interest rate swap fair value gain taken directly to equity	-	-	-	(133)	(133)	-	(133)
	43,714	575	91	11,812	56,192	363	56,555
Dividends paid to Owners of the Parent	-	-	-	(5,795)	(5,795)	(336)	(6,131)
Net movement on share based payment reserve	-	366	-	147	513	-	513
Issue of share capital during the year	311	(121)	-	-	190	-	190
Obligation to issue shares	1,746	-	-	-	1,746	-	1,746
Movement in offset of provisions for the future purchase of non-controlling interests	-	-	-	-	-	23	23
At 1 July 2011	45,771	820	91	6,164	52,846	50	52,896
Profit for the year	-	-	-	4,884	4,884	170	5,054
Exchange translation difference	-	-	2	-	2	11	13
Interest rate swap fair value (loss) taken directly to equity	-	-	-	(926)	(926)	-	(926)
Tax on interest rate swap fair value (loss) taken directly to equity	-	-	-	212	212	-	212
	45,771	820	93	10,334	57,018	231	57,249
Dividends  paid  to Owners of the Parent	-	-	-	(5,891)	(5,891)	(10)	(5,901)
Net movement on share based payment reserve	-	(5)	-	474	469	-	469
Non-controlling interests in subsidiary sold during the year	-	-	-	-	-	(50)	(50)
Issue of share capital during the year	1,503	-	-	-	1,503	-	1,503
Obligation to issue shares	(1,746)	-	-	243	(1,503)	-	(1,503)
Movement in offset of provisions for the future purchase of non-controlling interests	-	-	-	-	-	(171)	(171)
At 30 June 2012	45,528	815	93	5,160	51,596	-	51,596

Share capital comprises Share capital, Share premium account, Treasury shares and the Obligation to issue shares.

Consolidated Cash Flow Statement

For the year ended 30 June 2012

		Year ended 30 June 2012	Year ended 30 June 2011
	Notes	£'000	£'000
Cash flows from operating activities
Cash generated from operations before non-recurring items	20	17,414	15,811
Net finance costs paid		(2,347)	(2,388)
Tax paid		(3,080)	(4,110)
Net cash from operating activities		11,987	9,313
Cash flows from investing activities
Purchase of businesses	10	(465)	-
Cash acquired on purchase of businesses	10	190	-
Purchase of subsidiary undertakings		-	(21,294)
Cash acquired on purchase of subsidiary undertakings		-	1,406
Net sale proceeds from sale of businesses and subsidiary undertakings		937	-
Purchase of non-controlling interests	18	-	(3,849)
Deferred consideration from sale of business		-	250
Non-recurring costs		(1,062)	(715)
Purchase of property, plant and equipment		(952)	(1,463)
Proceeds from sale of property, plant and equipment		55	40
Purchase of intangible assets	12	(1,077)	(882)
Proceeds from sale of intangible assets		39	-
Net cash used in investing activities		(2,335)	(26,507)
Cash flows from financing activities
Dividends paid to Owners of the Parent	8	(5,891)	(5,795)
Dividends paid to non-controlling interests in subsidiary undertakings		(10)	(336)
Issue of ordinary shares		-	190
(Decrease)/increase in long term loans		(2,000)	22,000
Net cash flows (used in)/from financing activities		(7,901)	16,059
Net increase/(decrease) in cash and cash equivalents net of bank overdrafts		1,751	(1,135)
Cash and cash equivalents net of  bank overdrafts at beginning of the year		44	1,179
Cash and cash equivalents net of  bank overdrafts at end of the year		1,795	44
Reconciliation of net debt
Cash and cash equivalents at beginning of the year		2,321	1,779
Bank overdrafts at beginning of the year		(2,277)	(600)
Bank loans at beginning of the year		(40,000)	(18,000)
Net debt at beginning of the year		(39,956)	(16,821)
Net increase/(decrease) in cash and cash equivalents net of bank overdrafts		1,751	(1,135)
Decrease/(Increase) in long term loans		2,000	(22,000)
Cash and cash equivalents at end of the year		3,954	2,321
Bank overdrafts at end of the year		(2,159)	(2,277)
Bank loans at end of the year		(38,000)	(40,000)
Net debt at end of the year		(36,205)	(39,956)

Notes to the Financial Information

1. Nature of the financial information

The following financial information does not amount to full financial statements within the meaning of Section 434 of Companies Act 2006. The financial information has been extracted from the Group's Annual Report and Financial Statements for the year ended 30 June 2012 on which an unqualified report has been made by the Company's auditors.

Financial Statements for the year ended 30 June 2011 have been delivered to the Registrar of Companies; the report of the auditors on those accounts was unqualified and did not contain a statement under Section 498 of the Companies Act 2006. The 2012 statutory accounts will be delivered in due course.

Copies of the Annual Report and Financial Statements will be posted to shareholders shortly and will be available from the Company's registered office at 19-21 Christopher St, London, EC2A 2BS.

2. Accounting Policies

The preliminary announcement for the year ended 30 June 2012 has been prepared in accordance with International Financial Reporting Standards as adopted by the European Union. The accounting policies applied in this preliminary announcement are consistent with those reported in the Group's annual financial statements for the year ended 30 June 2011 along with new standards and interpretations which became mandatory for the financial year.

New standards and interpretations applied

The following new amendment to standards and interpretations, which does not have a material impact, is mandatory for the first time for the financial year beginning 1 July 2011:

Amendment to IFRS 7 ''Financial instruments: Transfers of financial assets'', effective for accounting periods beginning on or after 1 July 2011. These Financial Statements have been prepared in accordance with this amendment.

3. Adjusted Profit
To allow Shareholders to gain a better understanding of the trading performance of the Group, Adjusted Profit has been calculated as Profit before Tax, amortisation of intangible assets, impairment of goodwill, unwinding of the discount on the provisions for the future purchase of non-controlling interests, unwinding of the discount on deferred consideration, share based payments and non-recurring items and reconciles to profit on continuing activities before income tax as follows:
	Year ended	Year ended
	30 June	30 June
	2012	2011
	£'000	£'000
Profit from continuing activities before income tax (''Profit before Tax'')	6,328	6,077
Amortisation of intangible assets (see note 12)	6,046	5,711
Unwinding of the discount on the provisions for the future purchase of non-controlling interests (see note 6)	188	265
Unwinding of the discount on deferred consideration (see note 6)	66	-
Share based payments	464	634
Non-recurring items (see note 5)	924	715
Adjusted profit before income tax ("Adjusted Profit before Tax'')	14,016	13,402
Net finance costs (excluding the unwinding of the discounts above)	2,456	1,540
Adjusted Profit before Tax and net finance costs (''Adjusted EBITA'')	16,472	14,942
Depreciation	1,025	900
Adjusted EBITA before depreciation (''Adjusted EBITDA'')	17,497	15,842

4. Segmental information

(a) Business segments

Year ended 30 June 2012

	Training & Events	Publishing & Information	Total
	£'000	£'000	£'000
Revenue	43,545	41,781	85,326
Segmental profit before amortisation and share based payments	7,073	12,158	19,231
Amortisation of intangible assets	(751)	(5,195)	(5,946)
Share based payments	(182)	(199)	(381)
Segmental profit after amortisation and share based payments	6,140	6,764	12,904
Unallocated central overheads (includes amortisation of intangible assets of £100,000 and share based payments of £83,000)			(2,942)
Profit from continuing operations before non-recurring items			9,962
Non-recurring items (see note 5)			(924)
Profit from continuing operations after non-recurring items			9,038
Net finance costs (see note 6)			(2,710)
Profit for the year before income tax			6,328
Income tax expense (see note 7)			(1,274)
Profit for the year			5,054

Year ended 30 June 2011

	Training & Events	Publishing & Information	Total
	£'000	£'000	£'000
Revenue	43,594	40,185	83,779
Segmental profit before amortisation and share based payments	6,475	10,590	17,065
Amortisation of intangible assets	(1,666)	(3,925)	(5,591)
Share based payments	(179)	(353)	(532)
Segmental profit after amortisation and share based payments	4,630	6,312	10,942
Unallocated central overheads (includes amortisation of intangible assets of £120,000 and share based payments of £102,000)			(2,345)
Profit from continuing operations before non-recurring items			8,597
Non-recurring items (see note 5)			(715)
Profit from continuing operations after non-recurring items			7,882
Net finance costs (see note 6)			(1,805)
Profit for the year before income tax			6,077
Income tax expense (see note 7)			(1,448)
Profit for the year			4,629

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 amounts are not provided to the Board.

(b) Segmental information by geography

The geographical analysis of revenue by destination is as follows:

	Year ended	Year ended
	30 June	30 June
	2012	2011
	£'000	£'000
United Kingdom	61,806	61,680
Overseas	23,520	22,099
	85,326	83,779

5. Operating expenses	Year ended	Year ended
	30 June	30 June
	2012	2011
	£'000	£'000
Distribution and selling costs	17,408	16,936
Administrative expenses (excluding amortisation of intangible assets )	26,086	27,072
	43,494	44,008
Amortisation of intangible assets (administrative expense)	6,046	5,711
Total operating expenses before non-recurring items	49,540	49,719

Non-recurring items:

The following items of an unusual nature, size or incidence have been charged to profit during the year and shown as non-recurring items.

	Year ended	Year ended
	30 June	30 June
	2012	2011
	£'000	£'000
Costs written off relating to both successful and abortive acquisitions	65	565
Costs relating to the termination of the mergers and acquisitions department	-	150
Restructuring costs	1,014	-
Write down of print directories work in progress	692	-
Net profit from sale of businesses and subsidiary undertakings	(847)	-
Total non-recurring costs	924	715

Restructuring costs comprise primarily redundancy and termination costs together with associated reorganisation costs.

6. Finance income and costs

	Year ended	Year ended
	30 June	30 June
	2012	2011
	£'000	£'000
Finance income comprises:
Bank interest receivable	2	20
Finance costs comprise:
Interest payable on bank loans and overdrafts	(1,967)	(1,300)
Facility fees	(491)	(260)
Unwinding of the discount on the provisions for the future purchase of non-controlling interests (see note 18)	(188)	(265)
Unwinding of the discount on deferred consideration	(66)	-
	(2,712)	(1,825)

7. Income tax expense

	Year ended	Year ended
	30 June	30 June
	2012	2011
	£'000	£'000
Current tax:
UK corporation tax at current rates on profits for the year	2,208	2,509
Adjustment in respect of previous years	(74)	(88)
	2,134	2,421
Foreign tax	639	909
Adjustment to foreign tax in respect of previous years	52	(18)
Total current tax	2,825	3,312
Deferred income tax credit	(1,021)	(1,270)
Adjustment to deferred income tax in respect of previous years	15	(16)
Effect  on deferred tax of change of corporation tax rate	(545)	(578)
Total deferred tax	(1,551)	(1,864)
Income tax expense	1,274	1,448
Factors affecting the tax charge for the year:
The tax assessed for both years is lower than the average rate of corporation tax in the UK of 25.5% (2011: 27.5%) for the year ended 30 June 2012. The differences are explained below:
	Year ended	Year ended
	30 June	30 June
	2012	2011
	£'000	£'000
Profit before Tax	6,328	6,077
Profit multiplied by the average rate of corporation tax in the year of 25.5% (2011: 27.5%)	1,614	1,671
Tax effects of:
Depreciation and amortisation in excess of capital allowances	241	161
Foreign tax rate differences	72	118
Adjustment in respect of previous years	(7)	(122)
Profit on sale of businesses and subsidiary undertakings on which no tax is payable	(229)	-
Acquisition costs not allowed for tax	-	78
Put option and deferred consideration discounts not deductible for tax	65	73
Other items not subject to tax	63	47
Effect on deferred tax of change of corporation tax rate from 26% to 24% (2011: 28% to 26%)	(545)	(578)
Income tax expense	1,274	1,448

During the year, on 1 April 2012, the UK corporation tax rate was reduced from 26% to 24%. This change has been substantively enacted at the balance sheet date and, therefore, is included in these Financial Statements. The deferred tax balances have been re-measured at this rate, giving rise to a reduction in the net deferred tax liability of £545,000 (2011: £578,000). In addition, a number of further changes to the UK Corporation tax system were announced in the March 2012 UK Budget Statement. Legislation to reduce the main rate of corporation tax from 24% to 23% from 1 April 2013 was included in the Finance Act 2012. Further reductions to the main rate are proposed to reduce the rate by 1% per annum to 22% by 1 April 2014.

8. Dividends

Amounts recognised as distributions to Owners of the Parent in the year:

	Year ended	Year ended	Year ended	Year ended
	30 June	30 June	30 June	30 June
	2012	2011	2012	2011
	pence per share	pence per share	£'000	£'000
Final dividends recognised as distributions in the year	3.5	3.5	2,946	2,901
Interim dividends recognised as distributions in the year	3.5	3.5	2,945	2,894
Total dividends paid			5,891	5,795
Final dividend proposed	3.5	3.5	2,946	2,946

9. Earnings per share

Adjusted Earnings per Share has been calculated using an adjusted profit after taxation and non-controlling interests but before amortisation and impairment of intangible assets and goodwill, non-recurring items, share-based payments and the unwinding of the discount on the provisions for the future purchase of non-controlling interests and deferred consideration. There were no discontinued operations during the period or for the comparative period.

The calculation of the basic and diluted earnings per share is based on the following data:

	Year ended	Year ended
	30 June	30 June
	2012	2011
	£'000	£'000
Earnings from continuing operations for the purpose of basic earnings per share	4,884	4,306
Add:  Amortisation (net of non-controlling  interest effect)	6,042	5,697
Non-recurring items	924	715
Share based payments (including social security costs)	464	634
Unwinding of the discount on the provisions for the future purchase of non-controlling interests	188	265
Unwinding of the discount on deferred consideration	66	-
Tax effect of the above adjustments	(2,128)	(1,860)
Adjusted earnings for the purposes of adjusted earnings per share	10,440	9,757
	Number	Number
Weighted average number of ordinary shares for the purposes of basic and adjusted earnings per share	84,107,422	82,788,676
Effect of dilutive potential ordinary shares:
Exercise of share options and awards	2,611,551	2,142,271
Weighted average number of ordinary shares for the purposes of diluted and adjusted diluted earnings per share	86,718,973	84,930,947
Basic earnings per share	5.81p	5.20p
Diluted earnings per share	5.63p	5.07p
Adjusted basic earnings per share (''Adjusted Earnings Per Share'')	12.41p	11.79p
Adjusted diluted earnings per share	12.04p	11.49p

10. Acquisitions and disposals

Business combinations

In August 2011, Wilmington Group Plc's wholly owned subsidiary Mercia Group Limited acquired the trade, assets and liabilities of CCH Professional Development, a division of Wolters Kluwer (CCH). On completion, Mercia Group Limited received a cash payment of £190,000. This acquisition added a complementary portfolio of CPD courses to our existing accountancy business. On 18 May 2012, Wilmington Group Plc's wholly owned subsidiary Wilmington Millennium Limited acquired certain assets and liabilities of "Millennium ADMP Ltd" from receivership for £465,000. Millennium was a key supplier of data and sales services to Mortascreen, our mortality data product, and the acquisition was made primarily to secure the ongoing success of our existing business. Acquisition-related costs of £65,000 have been recognised as part of the non-recurring items for the two acquisitions in the Income Statement (see note 5). These would previously have been included in the consideration for the business combination. IFRS 3 (revised) was applied to these acquisitions. Details of the aggregate purchase consideration, the net assets acquired and goodwill for these acquisitions are as follows: £'000 Purchase consideration: Cash paid 465 Total purchase consideration 465 The provisional fair value assets and liabilities recognised as a result of these acquisitions are as follows: Provisional fair value £'000 Customer relationships 293 Brand 38 Other intangible assets 46 Total Intangible assets (see note 12) 377 Tangible assets 13 Trade and other receivables (net of allowances) 426 Cash and cash equivalents 190 Subscriptions and deferred revenue (756) Trade and other payables (35) Net identifiable assets acquired 215 Provisional goodwill (see note 11) 250 Net identifiable assets acquired 465 Deferred consideration due in respect of the previous year's acquisition of Kemps has been reduced during the year by £56,000.

Non-controlling interests acquired

During the year, Wilmington Group plc acquired the remaining 10% of the issued share capital of Wilmington Healthcare Limited (formerly Beechwood House Publishing Limited) thus making it a wholly owned subsidiary. Further details of this transaction were set out in note 29 of the audited Financial Statements for the year ended 30 June 2011.

Disposals

In February 2012, the Group sold its interest in its subsidiary undertaking AMT Training (India) Pvt Limited for £28,000 consideration. In June 2012, the Group sold its interest in its subsidiary undertaking Clientzone Limited for £1 consideration.

In June 2012 one of the Group's subsidiary undertaking disposed of its company secretarial and company formations business to Orangefield Services (UK) Limited for a consideration of £1.0m with deferred consideration dependent upon future revenues of up to a further £0.1m.

11. Goodwill

	£'000
Cost
At 1 July 2010	66,027
Acquisitions	10,832
Change in provisions for the future purchase of non-controlling interests (see note 18)	549
Movement in offset of provisions for the future purchase of non-controlling interests (see note 19)	23
At 30 June 2011	77,431
Acquisitions  (see note 10)	250
Change in provisions for the future purchase of non-controlling interests (see note 18)	(111)
Movement in offset of provisions for the future purchase of non-controlling interests (see note 19)	(171)
Revision to provisional fair value of prior year acquisition (see note 10)	(56)
At 30 June 2012	77,343
Accumulated impairment
At 1 July 2010 and 1 July 2011	2,750
Charge for the year	-
At 30 June 2012	2,750
Net book amount
At 30 June 2012	74,593
At 30 June 2011	74,681
At 1 July 2010	63,277

Goodwill of £52,326,000 (2011: £52,607,000) relates to the Group's Training & Events division. The remaining goodwill of £22,267,000 (2011: £22,074,000) relates to the Group's Publishing & Information division. The major constituents of the Training & Events Division are £32,683,000 (2011: £32,696,000) in respect of the Central Law Training cash generating unit, £6,322,000 (2011: £6,577,000) in respect of The Matchett Group and £6,830,000 (2011: £6,830,000) in respect of Bond Solon. The major constituent of the Publishing & Information Division's goodwill is £7,067,000 (2011: £7,123,000) in respect of Waterlow Professional Publishing cash generating unit and £10,392,000 (2011: £10,392,000) in respect of Axco.

The Group tests goodwill annually for impairment. The recoverable amount of the goodwill is determined from value in use calculations for each cash generating unit ("CGU"). These calculations use pre-tax cash flow projections based on financial budgets and forecasts approved by management covering a three year period. Cash flows beyond the three year period are extrapolated using estimated long term growth rates.

Key assumptions for the value in use calculations are those regarding discount rates, cash flow forecasts and long term growth rates. Management has used a pre-tax discount rate of 11.1% (2011: 11.1%) that reflects current market assessments for the time value of money and the risks associated with the CGUs as the Group manages its treasury function on a Group wide basis. The risk profile across the Group is consistent. The same discount rate has been used for all CGU's as the Directors believe that the risks are the same for each CGU. The long term growth rates used are based on management's expectations of future changes in the markets for each CGU and fall within the range of a negative 5% to a positive 1.25% (2011: negative 5% to a positive 1.25%).

Management has performed sensitivity analyses on all the impairment calculations by reducing the growth rates by 1% and by increasing the pre-tax discount rate to 12.1%. No impairment charge would be required.

12. Intangible assets

	Publishing rights, titles and benefits	Computer software	Total
	£'000	£'000	£'000
Cost
At 1 July 2010	42,934	2,690	45,624
Additions	219	663	882
Acquisitions	16,761	-	16,761
Disposals	-	(65)	(65)
At 1 July 2011	59,914	3,288	63,202
Additions	13	1,064	1,077
Acquisitions (see note 10)	377	-	377
Sale of subsidiary undertakings	-	(184)	(184)
Disposals	(909)	(3)	(912)
At 30 June 2012	59,395	4,165	63,560
Accumulated amortisation
At 1 July 2010	19,530	1,791	21,321
Charge for year	5,240	471	5,711
Disposals	-	(46)	(46)
At 1 July 2011	24,770	2,216	26,986
Charge for year	5,256	790	6,046
Sale of subsidiary undertakings	-	(121)	(121)
Disposals	(873)	-	(873)
At 30 June 2012	29,153	2,885	32,038
Net book amount
At 30 June 2012	30,242	1,280	31,522
At 30 June 2011	35,144	1,072	36,216
At 1 July 2010	23,404	899	24,303

13. Inventories

	30 June	30 June
	2012	2011
	£'000	£'000
Raw materials	11	8
Work in progress (see below)	20	795
Books held for sale	28	25
	59	828

At the year end print directories work in progress of £692,000 was written off as a non-recurring item (2011: £nil) (see note 5)

14. Trade and other receivables

	30 June	30 June
	2012	2011
	£'000	£'000
Trade receivables	15,772	16,451
Other receivables	1,116	1,003
Prepayments and accrued income	3,222	4,204
	20,110	21,658

15. Derivative financial instruments

	30 June	30 June
	2012	2011
	£'000	£'000
Current assets - Derivative financial assets
Forward currency contracts	-	16
Current liabilities - Derivative financial liabilities
Forward currency contracts	(26)	(46)
Interest rate  swaps - cash flow hedge - short term	-	(333)
	(26)	(379)
Non current liabilities - Derivative financial liabilities
Interest rate  swaps - cash flow hedge - long term	(1,446)	(187)

16. Trade and other payables

	30 June	30 June
	2012	2011
	£'000	£'000
Trade payables	3,409	2,986
Other payables	2,377	2,847
Social security and other taxes	3,240	3,465
Subscriptions and deferred revenue	17,310	17,889
Accruals	9,216	9,838
	35,552	37,025

17. Bank loans and overdrafts

	30 June	30 June
	2012	2011
	£'000	£'000
Current liability - bank overdrafts	2,159	2,277
Non-current liability - bank loans	38,000	40,000
Facility fees	(782)	(1,010)
Bank loans net of facility fees	37,218	38,990

The Group has an unsecured committed bank facility of £65m (2011: £65m) to February 2016. The facility currently comprises a revolving credit facility of £60m (2011: £60m) and an overdraft facility of £5m (2011: £5m). At 30 June 2012, £38m of the revolving credit facility was drawn down (2011: £40m). Interest is charged on the amount drawn down at 2.00 to 2.75 percent above LIBOR depending upon leverage. Under the facility, drawdown is made for interest fixture periods of up to six months in duration.

The bank overdrafts are the subject of a Group set-off arrangement. Interest is charged on the overdraft at 2.25%over Barclays bank base rate.

18. Provisions for future purchase of non-controlling interests

	Current provisions	Non current provisions
	£'000	£'000
At 1 July 2010	3,530	3,147
Amounts paid in respect of acquisitions of non-controlling interests	(3,849)	-
Unwinding of discount (see note 6)	-	265
Change in value of existing provisions (see note 11)	130	419
Option to be settled by issue of equity	(1,746)	-
Non-current provisions becoming current	1,935	(1,935)
At 1 July 2011	-	1,896
Unwinding of discount (see note 6)	-	188
Change in value of existing provisions (see note 11)	-	(111)
Non-current provisions becoming current	1,808	(1,808)
At 30 June 2012	1,808	165

Provisions represent the estimated future cost (discounted to reflect the time value of money) required to settle put options held by non-controlling shareholders over non-controlling interest shares, should said put options be exercised.

The actual settlement timing and value is dependent upon when (and if) the non-controlling shareholders choose to exercise their options and the profitability of the underlying companies at the date of exercise. For the purposes of estimating the above provision, it has been assumed that put options are exercised at the first available opportunity.

19. Non-controlling interests

	Non-controlling  interests - share  of results and  funds	Non-controlling interests - provisions for future acquisition	Net Non-controlling interests
	£'000	£'000	£'000
At 1 July 2010	1,842	(1,789)	53
Profit for the year	323	-	323
Dividends paid	(336)	-	(336)
Exchange translation difference	(13)	-	(13)
Acquisition of non-controlling interests during the year	(460)	460	-
Movement in offset of provisions for the future purchase of non-controlling interests (see note 11)	-	23	23
At 1 July 2011	1,356	(1,306)	50
Profit for the year	170	-	170
Dividends paid	(10)	-	(10)
Exchange translation difference	11	-	11
Acquisition of non-controlling interests during the year	(364)	364	-
Non-controlling interests in subsidiary undertakings sold during the year	(56)	6	(50)
Movement in offset of provisions for the future purchase of non-controlling interests (see note 11)	-	(171)	(171)
At 30 June 2012	1,107	(1,107)	-

20. Cash generated from operations

	Year ended	Year ended
	30 June	30 June
	2012	2011
	£'000	£'000
Profit from continuing operations before income tax	6,328	6,077
Non-recurring items (see note 5)	924	715
Depreciation of property, plant and equipment	1,025	900
Amortisation of intangible assets (see note 12)	6,046	5,711
(Profit)/loss on disposal of property, plant and equipment	(11)	15
Loss on disposal of intangible assets	-	19
Share based payments (including social security costs)	464	634
Net finance costs (see note 6)	2,710	1,805
Operating cash flows before movements in working capital	17,486	15,876
Decrease in inventories	77	252
Decrease/(increase) in receivables	1,831	(2,539)
(Decrease)/increase in payables	(1,980)	2,222
Cash generated from operations before non-recurring items	17,414	15,811

There were no discontinued operations during the year (2011: nil).

Cash conversion is calculated as a percentage of cash generated by operations to operating profit before amortisation as follows:

	Year ended 30 June	Year ended 30 June
	2012	2011
	£'000	£'000
Operating profit from continuing operations	9,038	7,882
Amortisation	6,046	5,711
Operating profit after non-recurring items but before amortisation	15,084	13,593
Cash generated by operations after non-recurring items	16,490	15,096
Cash conversion	109%	111%

 

END

 

 

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