Financial results for the year ended 30 June 2023

Wilmington PLC

25 September 2023

 

25 September 2023

Wilmington plc

Continued delivery with 30% jump in profitability and dividend up 22%

Wilmington plc, (LSE: WIL, 'Wilmington' or 'the Group') the provider of data, information, education and training services in the global Governance, Risk and Compliance (GRC) markets, today announces its results for the year ended 30 June 2023.

Financial performance

	2023	2022	Change
Continuing results[1]
Revenue	£122.1m	£111.9m	9%
Adjusted PBT[2]	£24.1m	£18.6m	30%
Adjusted PBT margin	19.7%	16.6%	19%
Adjusted basic EPS[3]	21.27p	16.72p	27.2%
Net cash[4]	£42.2m	£20.5m
Total dividend	10.0p	8.20p	22.0%

Statutory results
Revenue	£123.5m	£121.0m
PBT incl. disposals	£24.0m	£36.1m
Basic EPS	22.94p	37.46p

Highlights

^·          9% revenue growth from continuing businesses. Organic growth of 7%¹

o  Training & Education division delivered 15% organic growth

o  Intelligence division delivered 3% organic growth

·      Annual recurring revenues up 7%, now 39% (2022: 37%) of Group revenues

·      Adjusted profit before tax from continuing businesses up 30% to £24.1m (2022: £18.6m) reflecting continuing efficiencies of digital-first model

·      Operating profit margins continue to increase with Intelligence division reaching 23% (2022: 19%)

·      Net cash at 30 June 2023 £42.2m (2022: £20.5m) reflecting strong trading performance and cash conversion

·      Continued to streamline and enhance portfolio with disposal of Inese

·      Investment in the development of single technology platforms in each division

Mark Milner, Chief Executive Officer, commented:

"Since the strategic review we have delivered two years of quarter-on-quarter profits growth, despite the challenging macro-economic backdrop. Last year's results were our strongest to date with continuing revenues up by 9% and profits up 30%. Other notable developments have been the growth in our recurring revenues and strong cash conversion of profits, further strengthening our balance sheet, which are a result of improvement in our overall operational performance.

"We help our customers to do the right business, in the right way. As Governments, Regulators, businesses and individuals respond to increasing Governance, Risk and Compliance requirements, they are globally becoming increasingly aware of the need to ensure the data they rely on for themselves and their customers is credible, accurate and current; and the training to ensure they are knowledgeable and meet current standards - all must be relevant, measurable and independently assessed.

"We now transact with over 8,000 customers and gather data from around 250 geographies.  We have increased our geographic presence and now operate in the UK, Ireland, USA, France, Singapore, Hong Kong, Malaysia, Indonesia, India, and the MENA region.  Our increasing global reach provides us with opportunities to develop and provide our services across a broader international customer base, whilst our single technology platforms will be instrumental in helping us scale in both existing markets and in new territories.

"The current financial year has started in line with our expectations with continued organic revenue growth and improved profits and cash."

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement this inside information is now considered to be in the public domain.

For further information, please contact: Wilmington plc   Mark Milner, Chief Executive Officer Guy Millward, Chief Financial Officer Meare Consulting Adrian Duffield

020 7490 0049 07990 858548

Notes to Editors

Wilmington plc is the recognised knowledge leader and partner of choice for data, information, education and training in the global Governance, Risk and Compliance (GRC) markets. Wilmington employs close to 1,000 people and sells to around 120 countries. Wilmington is listed on the main market of the London Stock Exchange.

Introduction

In 2021, Wilmington completed its strategic review and we took the decisive steps to refocus the Group on the Governance, Risk and Compliance markets. We invested in our digital first activities. We restructured to operate as two divisions in one company, committing to investment in our operational growth levers of sales, marketing and product. We outlined the decisive steps needed to improve our technology capabilities to accelerate our shift to single technology platforms and tackled our legacy technology debt. We committed to maturing our measures assessing and improving customer satisfaction and employee engagement, designing and investing in a new people programme and committing to meaningful ESG commitments.

Since 2021, Wilmington has delivered against each of these strategic aims. This structured, measured and progressive transformation programme is delivering results, changing the shape of our business, increasing value for our customers, delivering growth for our shareholders and creating growth momentum across the Group.

Results

For the year ending 30 June 2023, the Group saw overall organic revenue growth of 9%, with growth across all parts of our business except our healthcare unit. Our training and education division achieved a particularly impressive 15% growth in organic revenue, while our intelligence brands reported 3% growth, with strong performance from our Axco, Pendragon and APM businesses offset by the UK healthcare business' decline. We have also achieved a 7% growth in recurring revenue[5], which now represents 39% of total revenue. Currency movement had a minimal impact on the Group's overall results.

The increased revenues and a continued focus on operational efficiency and cost management resulted in adjusted PBT growth from continuing businesses of 30% to £24.1m (2022: £18.6m) and a corresponding improvement in adjusted PBT margin to 19.7% (2022: 16.6%). This resulted in adjusted basic earnings per share being up 27.0%. We also are proposing a final dividend of 7.3p (total of 10.0p). The Group strengthened its balance sheet, increasing its net cash position (excluding lease liabilities) to £42.2m (2022: £20.5m) after a strong year of converting profits to cash.

Strategy

We continued to focus on consolidating our already strong presence in the large, growing and rapidly evolving GRC markets, following the 2021 strategic review. These markets are underpinned by strong macro drivers, particularly the increasing volume and enforcement of regulation, complex geopolitical landscape, increased importance of ESG and widespread adoption of technological and data-driven compliance solutions, all of which align strongly to Wilmington's core offering.

At the heart of this focus on the GRC markets is our ambition to help our customers to do the right business in the right way, by providing a complementary range of information & data and training & education solutions. Our operating model mirrors this core purpose. Our Intelligence division provides specialist data and analytics that give customers the detailed insight they need to understand the regulatory landscape, and our Training & Education division delivers specialist training that equips them to navigate it successfully. As planned, we completed the disposal of our non-core Spanish insurance information business in the first half of the financial year. 

Investment programme

Our investment approach across the Group continues to be targeted at embedding the unique characteristics that define our competitive advantage into each of our brands. I am pleased with the progress we have made in developing single technology platforms in each of our divisions, providing the foundation to accelerate our growth ambitions and enabling us to provide an improved user experience to our customers, resulting in an increased competitive advantage. It will also give us the agility to respond to their ever-changing needs in the rapidly evolving GRC markets, enhancing our growth potential. The implementation of single platforms in each division will also allow us to efficiently expand our offering by creating a scalable portfolio to enhance our growth potential.

Version 1.0 of the Digital Learning Platform was successfully released at the end of FY22.  We are taking the learnings from this version to improve both the design and product features, with version 2.0 on track to be delivered by June 2024. A new technology leader has joined the Group to spearhead the version 2.0 design and delivery, and increase the speed of development.

We continue to invest organically in new products and strengthen our existing product offerings, with the scope to monetise our solutions greatly enhanced by our single platform approach. This strategy for maximising the value of our technology and data assets, combined with our streamlined operating model, provides the strong base to actively consider acquisition targets which complement and/or extend our capabilities.

Artificial Intelligence

The advent of artificial intelligence (AI) has created immense potential for efficiency and AI enhanced products within the GRC domain. The realm of AI, wherein machines strive to replicate intricate human cognitive functions, holds the promise of overhauling industries and reshaping entire work processes and value streams. The disruptive prowess of AI technology is rooted in its ability to mechanise tasks, optimise decision-making protocols and unlock uncharted pathways across an array of sectors.

By orchestrating the automation of repetitive tasks and routine processes, AI holds the potential to fine-tune operations, curtail expenditures and strategically allocate resources to endeavours of higher value. Furthermore, the analytical capabilities of AI can bestow invaluable insights, paving the way for informed, data-driven decision-making and astute strategic optimisation.

Within the strategic framework of Wilmington, deliberate measures are being put into action to navigate the risks that accompany AI technology while simultaneously harnessing its opportunities.

A working group has been created to take a risk and opportunity-based approach to AI. This group has meticulously crafted a series of recommendations encompassing risk mitigation strategies, operational efficiency enhancements and augmentation of products. Diligent actions to mitigate risks are already underway, encompassing fortifying our digital assets with robust protective layers to thwart unauthorised scraping by external entities.

Simultaneously, revised policies governing the utilisation of AI technology have been devised, covering both our internal staff and the interactions with our valued customers. Given AI's remarkable capacity to generate content from vast reservoirs of data, inadvertent infringement of copyrighted material looms as a notable concern. The implementation of comprehensive protective protocols and mechanisms becomes imperative in safeguarding the sanctity of intellectual property rights.

Beyond these operational facets, AI stands as a catalyst for elevated product development, providing the capability for predictive analytics, tailored recommendations, and intelligent automation. This transformative potential empowers us to furnish clients with products that are not only more personalised, but also more resourceful and innovative. For example, in our Training and Education division we will be exploring course recommendation, automated grading and feedback and translation services, and in our Intelligence Division the enhancement of our proprietary data, which is protected within our secure environment.

Scale

Wilmington is helping our customers to do the right business, in the right way. Governments, Regulators, businesses, and individuals are globally becoming increasingly aware of the requirements and benefits of implementing appropriate Governance, Risk and Compliance training and of ensuring data and intelligence sources are as current and accurate as possible.

This global market movement provides Wilmington with an increasing opportunity to develop and provide services across a broader international customer base. Alongside existing core operation centres in the UK, Ireland, USA, France, Singapore, Hong Kong, and Malaysia, we are also building an increasing presence in Indonesia. We now have a commercial presence in India and have invested further in the MENA region. We expect soon to expand our offering, through partners, in China.

Operating efficiency is maintained by our product offering in these new territories being built on our existing capabilities and content, with a small degree of customisation of materials to reflect the differing characteristics of each domestic market.

The investment in commercial and customer service functions was made in FY23, enabling us to measure performance and fine-tune our offering throughout FY24. No further significant investment in this area is expected throughout FY24. Our development of single technology platforms will be instrumental in helping us scale in both existing markets and in new territories.

A growth mindset

We began the process of pivoting the Group to a digital first strategy in FY20 and FY21 and this has enabled us to deliver two years of quarter-on-quarter organic revenue and profit growth.  Our revised strategic focus, consolidating our strong presence in the large, growing and rapidly evolving GRC markets, provides the Group with many growth opportunities.

Wilmington now transacts with over 8,000 customers and gathers data from around 250 geographies, and has new opportunities in new markets. Whilst Wilmington cannot claim to be a global business, we are certainly well on the way to becoming a truly international business.

Key to this organic and geographic progress is developing and maintaining a strong growth mindset across all parts of our Group. We invested in new leaders for many of our businesses and our shared services in FY22, specifically recruiting or promoting individuals with a proven track record of implementing and delivering growth strategies. The changes and expertise these individuals have brought have been one of the reasons why we have reported another strong set of results. 

A key part of our growth mindset is to focus on the many drivers of employee engagement, which increased year on year as measured by our annual engagement survey. Development is actioned by activities such as regular Town Halls, the building and support of communities, and development of Working Groups to focus on keys areas such as diversity and inclusion, reward strategies, talent development and others.

Instrumental in the development of our people culture was the recruitment of a Chief People Officer in November 2021, who has significantly developed our people activities across a very broad spectrum of activities including, but not limited to, a refreshed wellbeing strategy and services, a complete review of our reward and benefits strategy, the creation of job families across selected disciplines, investment in our learning and development services, and development of diversity and inclusion policies, practices and initiatives. More details can be found in our Sustainability report.

Responsible business

We are committed to investing in the initiatives that support our own responsible business culture. We have achieved progress against our targets in all four areas of our sustainability strategy, and this work continues to underpin our broader strategic objectives and risk management processes. Full details of this work can be found in our Sustainability report.

We implemented the Taskforce for Climate-related Financial Disclosures (TCFD) recommendations in full last year. We concluded that we must continue to monitor the impacts of climate change on the Group's risk profile, but that the potential opportunities that may arise from the transition to a low-carbon economy are well aligned to our core offering. We have committed to net-zero carbon targets, with an ambition of absolute zero, producing no greenhouse gas emissions, in respect of Scope 1 and 2 emissions by 2028, and net zero in respect of Scope 3 emissions by 2045.

Portfolio update

In December 2022, we completed the disposal of Inese, a media and event business based in Madrid, Spain. We had flagged the business as held for sale from February 2020, with the disposal process significantly hampered by the Covid-19 pandemic.

We continue to review all parts of the Group assessing businesses against six key characteristics: organic growth opportunities; attractive markets; digital and data capabilities; strong leadership; strategic fit to the GRC marketplaces; and attractive product, revenue, and profitability characteristics.

We continue to seek businesses to join the Wilmington Group, with a highly active M&A function exploring many options. To date, whilst we have identified numerous businesses which meet our required characteristics, valuation expectations continue to remain high and we continue with our disciplined approach. We will continue to explore inorganic opportunities, whilst remaining focussed on our organic growth.

Summary and outlook

Wilmington has transformed over the last four years to become a digital first business, focussed on the attractive GRC sector, reinvigorating and innovating our products and services to develop deeper and longer-term relationships with clients, focussed on the Intelligence and Training & Education markets, with a growth mindset at our core.

This new strategy is delivering, and key to this transformation are our people and supporting businesses who work tirelessly to constantly develop and improve many aspects of what we do, how we do it, and deliver increasing value to our customers.

The current financial year has started in line with our expectations with continued organic revenue growth and improved profits and cash.

Thank you to each and every one of my colleagues for their commitment to Wilmington, for their passion and expertise in their chosen areas, and for the energy they bring to our many growth projects. Our recently launched company values of Inclusivity, Ambition, Curiosity, and Integrity resonate well with our strategic ambitions and, with a mindful eye on the geopolitical and economic uncertainty, we look forward to delivering our plans for FY24 and beyond. 

Divisional review

Training & Education

	2023	2022	Absolute variance	Organic variance[6]
	£'m	£'m	%	%
Revenue
Global[7]	24.5	23.2	6%	4%
UK and Ireland[8]	24.7	22.1	12%	12%
North America[9]	15.7	11.0	43%	31%
Continuing revenue6	64.9	56.3	15%	12%
Continuing operating profit	16.1	14.4	11%	8%
Margin %	25%	26%
Statutory revenue	64.9	61.4	6%	12%
Statutory operating profit	16.1	16.0	0%	8%

The revenue split shown in this table is not a geographic split of revenues, the split shows revenues of our business groupings within Training and Education which are described below.

Business model and markets

The Global business comprises two units that operate in Compliance markets. The largest business, which was developed organically within Wilmington, is the International Compliance Association ('ICA'). It is an industry body and training business that was created in 2002 which offers professional development and support to compliance officers predominantly in the financial services sector. It has offices in the UK, Singapore, Malaysia and Dubai, and a new presence in India. ICA primarily serves the financial services industry. The material for ICA courses is developed by our own internal R&D team, and external specialists. We own the associated intellectual property.

Revenue earned by ICA is primarily training income complemented by subscriptions paid by the professional members for their ICA accreditations. The courses ICA run usually extend over several weeks or even months. They traditionally mix distance learning with face-to-face sessions. The distance learning element has transitioned to online and digital variants, and virtual programmes have been offered in place of face-to-face sessions. To support the move to virtual training in ICA a new Digital Learning Platform ('hub') is being built - it was launched at the start of 2021 and further developments are due for release in the coming months.

The other Global business, CLTi, earns revenue from running professional development programmes for wealth managers. Wilmington has an international presence, with centres in the UK, Europe, and Asia Pacific. Our consistent investment programme in content and technology is maintaining our competitive positioning.

The UK and Ireland business predominantly provides training for accountants in practice and in business, and individuals involved in the legal system, including lawyers. It runs a mix of face-to-face, online, and blended learning for these communities. It provides training at various levels including providing continuing professional development for existing qualified accountants and, in the case of the legal profession, helping them train their clients for interaction with the legal system. Additionally, it provides technical support to accountancy firms which enables them to keep abreast of technical developments and changes to regulation, as well as supporting them to promote the services they then offer to their clients.

Mercia (accountancy) and Bond Solon (legal) are predominantly UK and Ireland based, reflecting the country specific laws and accounting standards that govern their profession. Revenue in the unit is earned through clients subscribing for ongoing training support and other related activities over a period of time (usually twelve months), with the rest through one off course attendance fees. Courses are typically single or half day events, and content is a mix of owned and third-party intellectual property. Courses are delivered either by in-house experts or a network of independent tutors who are paid per course that they deliver.

The Law for Non-Lawyers market is strong, with good ongoing demand for existing products as well as successful launches of new training courses.  The Accountancy market has returned to growth following a dip due to Covid-19 and demand is expected to benefit from upcoming regulation change in the UK.

The North America business, FRA, is predominantly events based. It serves the US Healthcare and Health Insurance markets and, to a lesser extent, the US financial and legal service communities. The prime brand is the RISE series of events that addresses the Medicare and Medicaid markets and is attended by health plans, physician groups and solution partners. The flagship event is RISE National which normally takes place in March each year. Revenue from the US events is generated from both sponsorship and delegate sales.

Trading performance

Revenues grew 15%, 12% if currency gains are excluded. All five of the businesses within the division grew organically and recurring subscription revenues grew 11%.

ICA revenues were up 6% as double-digit growth in the UK was offset by a further drop in Singapore revenues after the exceptional growth there in FY21. UK saw double digit growth. CLTi grew 4% and is focussed on increasing business in new territories in FY24.

Bond Solon saw double-digit growth in FY23, driven by a strong increase in demand across the year. Mercia revenues grew 11% in the year and moved above its pre-Covid-19 revenues.

In the US, FRA increased revenues by 43% (31% if currency gains are excluded) as demand from both delegates and sponsors grew strongly in the face of continuing regulatory change.

Overall divisional operating profit increased by 11%, mainly due to increased revenues. The operating profit margin was slightly down to 25% (2022: 26%) following increased technology investment.

Intelligence

	2023	2022	Absolute variance	Organic variance
	£'m	£'m	%	%
Revenue
Healthcare[10]	30.5	30.8	-1%	-1%
Financial Services and Other[11]	21.7	19.8	9%	5%
MiExact	5.0	5.0	1%	1%
Continuing revenue	57.2	55.6	3%	1%
Continuing operating profit	13.0	10.8	20%	20%
Margin %	23%	19%
Statutory revenue	58.6	59.6	-2%	1%
Statutory operating profit	13.3	11.4	17%	20%

Business model and markets

Wilmington offers a wide range of products and services through its Healthcare businesses predominantly around the provision of market and customer intelligence. The core of the data supplied comes primarily from publicly available sources. The value generated by our services is based around its collation, verification, combination with other complementary data sources and then its ease of presentation and usage. In some areas we provide proprietary analysis of the data and editorial comment which constitute our own intellectual property.

Wilmington's Healthcare businesses operate mainly in the UK and France and provide deep insight information on practitioners, facilities and treatments in the UK and French health sector markets that enable suppliers into those markets, including pharmaceutical companies, to understand and connect better with their customers. Revenue is mainly earned through sales of discrete packages of data or through subscription services for the ongoing provision of information. Additionally, in the UK we publish the Health Service Journal ('HSJ'), the leading online publication in the UK for healthcare leaders, with revenue generated through providing subscriptions to NHS foundation trusts, Clinical Commissioning Groups, and suppliers to the NHS.

The Financial Services/Other businesses operate in the Insurance, Pensions and Compliance markets. These businesses provide a broad range of information products and services with revenues generated primarily through subscription but also sponsorship, lead generation and event attendance.  Inese, the Spanish insurance business, was sold in December 2022.

The MiExact business consists of a portfolio of data products including charity fundraising information, and marketing data suppression tools. They include services that are used by organisations to help prevent identify fraud. Revenue is predominantly subscription based.

Trading performance

Overall Intelligence revenues from continuing businesses grew 3%, 1% if currency gains are excluded. All businesses except UK Healthcare grew.  Recurring subscription revenues grew 6% with strong retention rates.

Healthcare revenues declined 1%, with UK revenues down 4% offset by growth in France of 8% (6% excluding currency gains). Market uncertainty led to a loss of data revenue in the UK.

Financial Services revenues grew by 9%, 5% if currency gains are excluded.  Subscription revenues grew 10% and were particularly strong in Axco. Compliance Week grew sterling revenues but dollar revenues slipped back 4%.

MiExact revenues grew 1% after a slow first half was followed by a strong final quarter. Subscription revenues grew 6% and had a retention rate of 99%.

Intelligence divisional operating profit from continuing businesses grew by 20%, helped by continuing focus on its cost base and automation of its processes. Operating margins improved to 23% from 19%.

Financial review

Overview

The Group performance was strong during the year, driving organic growth in revenue and profit and reinforcing the strength of the balance sheet, reflected by the closing net cash position.

Adjusting items, measures, and adjusted results

In this Financial review reference is made to adjusted results as well as the equivalent statutory measures. The Directors make use of adjusted results, which are not considered to be a substitute for or superior to IFRS measures, to provide stakeholders with additional relevant information and enable an alternative comparison of performance over time. Adjusted results exclude amortisation of intangible assets (excluding computer software), impairments, other income (when material or of a significant nature) and other adjusting items.

	2023	2022	Absolute variance		Organic variance
	£'m	£'m	£'m	%	%
Revenue	123.5	121.0	2.5	2.0%	6.7%
Adjusted profit before tax	24.3	20.7	3.6	17.6%	13.3%
Adjusted profit margin %	19.7%	17.1%

Variances described as 'organic' are calculated by adjusting the revenue change achieved year-on-year to exclude the impact of changes in foreign currency exchange rates and also to exclude the impact of changes in the portfolio from acquisitions and disposals.

Revenue

Group revenue increased 2.0% overall and 6.7% on an organic basis, the overall increase reflecting £0.3m of foreign currency downside and the impact of disposals. Full details can be found in the Review of Operations.

Operating expenses before amortisation of intangible assets (excluding computer software) and impairments

Operating expenses before amortisation of intangible assets (excluding computer software) and impairments were £99.4m (2022: £99.4m), flat year on year.

Within operating expenses, staff costs increased £1.1m to £56.3m (2022: £55.2m). This net increase reflects the inflationary pay rise at the beginning of the year. The increases were partly offset by salary cost savings generated from a reduction in headcount post disposals. Share based payment costs increased £0.3m due to the 2023 SAYE scheme which commenced in the year.

Non-staff costs decreased by £1.1m to £43.1m (2022: £44.2m), reflecting the costs saved due to the sale of Inese and the reduction in amortisation of computer software within intangible assets year on year.

Unallocated central overheads

Unallocated central overheads, representing Board costs and head office salaries, as well as other centrally incurred costs not recharged to the businesses, decreased £0.8m year-on-year to £3.7m (2022: £4.5m).

Adjusted profit before tax ('adjusted PBT')

As a result of increased revenue and a continued focus on operational efficiency and cost management, adjusted profit before tax, which eliminates the impact of amortisation of intangible assets (excluding computer software), impairments, other income and other adjusting items, was up 17.6% to £24.3m (2022: £20.7m).

Adjusted profit margin (adjusted PBT expressed as a percentage of revenue) also increased to 19.7% (2022: 17.1%).

Amortisation excluding computer software, impairment charge and other income

Amortisation of intangible assets (excluding computer software) was £2.4m (2022: £2.4m) representing intangible assets acquired as part of prior year acquisitions.

Other income represents the net gain of £2.2m from the disposal of Inese.

Adjusting items within operating expenses

Adjusting items within operating expenses of £0.1m (2022: £0.1m) are those items that are one off in nature and which do not represent the ongoing trading performance of the business.

Operating profit ('EBITA')

Operating profit was £23.8m (2022: £37.0m). The large decrease is driven by the £16.3m gain of the sale of AMT and La Touche (Inese sale: £2.2m for FY23 comparison) and the adjusting other income (profits on sale of property) all in the prior year.

Net finance income

Net finance income up £1.2m to £0.2m (2022: net finance costs of £0.9m), primarily related to the interest received on the large cash balance the Group maintained during the full year.

Profit before taxation

Profit before taxation was £24.0m (2022: £36.1m); a reconciliation of this to adjusted profit before tax can be found in note 3.

Taxation

The tax charge for the year was £3.8m (2022: £3.3m) reflecting an effective tax rate of 15.9% (2022: 9.1%). The increase in the tax rate year-on-year reflects the nature of other operating income and adjusting items, specifically the gain on disposal of businesses in 2022 vs 2023 which were not subject to corporation tax.

The underlying tax rate which ignores the tax effects of adjusting items has risen slightly to 22.3% (2022: 21.0%). The increase reflects the UK corporation tax increase from 19% to 25% in April 2023, one quarter of which applies to FY23.

Earnings per share

Adjusted basic earnings per share increased by 15.2% to 21.49p (2022: 18.66p), due to the increase in adjusted profit before tax, offset by a slight increase in the underlying tax rate (see above) and an essentially unchanged number of issued ordinary shares (see below). Basic earnings per share was 22.94p (2022: 37.46p) in the prior year, reflecting the decrease in profit after tax.

Continuing adjusted basic earnings per share, excluding the results of sold and closed businesses, increased by 27.2% to 21.27p (2022: 16.72p), see reconciliation below.

	2023 £'m	2022 £'m
Adjusted earnings (note 9)	18.9	16.3
Remove profit after tax of sold and closed businesses	(0.2)	(1.7)
Continuing adjusted earnings	18.7	14.6
	Number	Number	Variance
Weighted average number of ordinary shares (note 9)	88,027,119	87,632,022
Continuing adjusted basic earnings per share	21.27p	16.72p	27.2%

Dividend

A final dividend of 7.3p per share (2022: 5.8p) will be proposed at the AGM. This will give a full year dividend up 22% to 10.0p (2022: 8.2p) and dividend cover of 2.1 times (2022: 2.3 times).

If approved it will be paid on 28 November 2023 to shareholders on the register as at 28 October 2023 with an associated ex-dividend date of 27 October 2023.

Balance sheet

Non-current assets

Goodwill at 30 June 2023 was £60.6m (2022: £61.1m). A weakening US Dollar led to a decrease in the Sterling value of the US Dollar portion of the Group's goodwill.

Intangible assets decreased by £3.7m to £5.7m (2022: £9.4m) due to amortisation of £4.1m, partly offset by additions of £0.6m within computer software reflecting the Group's continued strategy to invest in the existing businesses to fuel organic growth. Additions reflect the continued investment in Wilmington's digital transformation. The remaining decrease reflects exchange translation differences.

Property, plant and equipment increased by £0.1m to £7.0m (2022: £6.9m). This is attributable to the £1.9m increase in the right of use assets due to the new France and USA leases entered into during the year, together with £0.5m of other additions, offset by depreciation of £2.3m.

Deferred consideration receivable

The deferred consideration receivable balance of £1.9m (2022: £1.7m) relates to the disposal of ICP in July 2018 and the deferred consideration from the sale of Inese (see note 10), with £1.1m recognised within non-current assets and the remaining £0.8m recognised within current assets.

Trade and other receivables

Trade and other receivables remained relatively constant at £27.4m (2022: £27.1m).

Current tax liability

At 30 June 2023 the Group recognised a liability relating to current tax of £0.1m (2022: asset £1.3m). The net liability position reflects a slight net underpayment position.

Trade and other payables

Trade and other payables increase by £5.7m to £56.0m (2022: £50.3m). Within this, subscriptions and deferred revenue increased by £2.3m or 7.1% to £33.7m (2022: £31.4m), the rest of the increase is due to payment timings. This increase in subscriptions and deferred revenue was driven mostly by the growth of subscription services in the year.

Provisions

Provisions were £1.2m (2022: £1.5m), relating wholly to future committed costs associated with the closed portion of the head office space.

Net cash, lease liabilities and cash flow

Net cash, which includes cash and cash equivalents, cash classified as held for sale, bank loans and bank overdrafts, and lease liabilities, was £35.0m (2022: £13.0m). This significant net cash position is driven by a strong trading performance delivering improved profits and effective cash management as well as a cash inflow associated with the sale of Inese.

Lease liabilities decreased to £7.2m (2022: £7.5m). £2.1m cash payments in relation to contractual lease obligations were made during the year reducing the balance, offset by the new France and USA leases mentioned above and £0.2m of notional interest on lease liabilities reported within net finance costs.

Cash conversion remained strong at 138% (2022: 114%).

Share capital

In October 2022 Wilmington issued 340,052 ordinary voting shares to satisfy the Company's obligations under its Performance Share Plan.

During the year 30,215 shares held by the Employee Share Ownership Trust ('ESOT') were used to satisfy the Company's obligations under the SAYE Plan. At 30 June 2023, the ESOT held 352,651 shares (2022: 403,782) in the Company, which represents 0.4% (2022: 0.5%) of the called up share capital.

60,762 shares held in treasury were used to satisfy the Company's obligations under the SAYE Plan during the year. At 30 June 2023, 5,208 shares (2022: 65,970) were held in treasury, which represents 0.1% (2022: 0.1%) of the share capital of the Company.

Consolidated income statement

for the year ended 30 June 2023

		Notes	Year ended 30 June 2023 £'000	Year ended 30 June 2022 £'000
	Continuing operations
	Revenue	4	123,497	121,028
	Operating expenses before amortisation of intangibles excluding computer software, impairment and adjusting items		(99,391)	(99,407)
	Impairment of property, plant and equipment		-	(597)
	Amortisation of intangible assets excluding computer software	5b	(2,381)	(2,368)
	Adjusting items	5b	(147)	(66)
	Operating expenses		(101,919)	(102,438)
	Other income - gain on disposal of subsidiaries	13	2,212	16,329
	Other income - gain on disposal of property, plant and equipment		-	1,289
	Other income - net gain on financing activities		-	840
	Operating profit		23,790	37,048
	Finance income	6	478	113
	Finance expense	6	(246)	(1,041)
	Profit before tax		24,022	36,120
	Taxation	7	(3,827)	(3,295)
	Profit for the year attributable to owners of the parent		20,195	32,825
	Earnings per share:
	Basic (p)	9	22.94	37.46
	Diluted (p)	9	22.38	36.98

Consolidated statement of comprehensive income

for the year ended 30 June 2023

		Year ended 30 June 2023 £'000	Year ended 30 June 2022 £'000
	Profit for the year	20,195	32,825
	Other comprehensive (expense)/income:
	Items that may be reclassified subsequently to the income statement
	-Currency translation differences	(991)	2,353
	-Fair value movements of net investment hedges, net of tax	-	(193)
	Other comprehensive (expense)/income for the year, net of tax	(991)	2,160
	Total comprehensive income for the year attributable to owners of the parent	19,204	34,985

Items in the statement above are disclosed net of tax. The income tax relating to each component of other comprehensive income is disclosed in note 7.

Balance sheets

as at 30 June 2023

	Notes	2023 £'000		2022 £'000
Non-current assets
Goodwill		60,561		61,128
Intangible assets		5,734		9,427
Property, plant and equipment		7,015		6,876
Deferred consideration receivable		1,152		1,448
Deferred tax assets		925		1,041
		75,387		79,920
Current assets
Trade and other receivables	11	27,391		27,097
Deferred consideration receivable		752		250
Current tax assets		-		1,262
Cash and cash equivalents		42,173		19,785
Assets of disposal group held for sale		-		1,450
		70,316		49,844
Total assets		145,703		129,764
Current liabilities
Trade and other payables	12	(55,966)		(50,258)
Lease liabilities		(975)		(648)
Current tax liabilities		(44)		-
Provisions		(307)		(307)
Liabilities of disposal group held for sale		-		(1,332)
		(57,292)		(52,545)
Non-current liabilities
Lease liabilities		(6,235)		(6,862)
Deferred tax liabilities		(607)		(2,040)
Provisions		(921)		(1,228)
		(7,763)		(10,130)
Total liabilities		(65,055)		(62,675)
Net assets		80,648		67,089
Equity
Share capital		4,408		4,391
Share premium		45,553		45,553
Treasury and ESOT reserves		(786)		(1,093)
Share based payments reserve		2,635		2,141
Translation reserve		3,431		4,422
Retained earnings		25,407		11,675
Total equity		80,648		67,089

Statements of changes in equity

for the year ended 30 June 2023

	Share capital, share premium, treasury shares and ESOT shares £'000	Share based payments reserve £'000	Translation reserve £'000	Retained earnings £'000	Total equity £'000
Group
At 1 July 2021	48,904	1,390	2,069	(15,696)	36,667
Profit for the year	-	-	-	32,825	32,825
Other comprehensive income/(expense) for the year	-	-	2,353	(193)	2,160
	48,904	1,390	4,422	16,936	71,652
Transactions with owners:
Dividends paid	-	-	-	(5,492)	(5,492)
Performance share plan awards vesting settled via ESOT	84	(105)	-	21	-
ESOT share purchases	(371)	-	-	-	(371)
Sale of treasury shares	49	-	-	-	49
Purchase of treasury shares	(154)	-	-	-	(154)
Issue of share capital	11	-	-	-	11
Issue of share premium	328	-	-	-	328
Save As You Earn options settlement	-	(180)	-	152	(28)
Share based payments	-	1,036	-	-	1,036
Tax on share based payments	-	-	-	58	58
At 30 June 2022	48,851	2,141	4,422	11,675	67,089
Profit for the year	-	-	-	20,195	20,195
Other comprehensive expense for the year	-	-	(991)	-	(991)
	48,851	2,141	3,431	31,870	86,293
Transactions with owners:
Dividends paid	-	-	-	(7,462)	(7,462)
Issue of share capital	17	-	-	-	17
Performance share plan awards vesting	-	(717)	-	854	137
Save As You Earn options settlement via ESOT	154	(11)	-	(16)	127
Save As You Earn options settlement via treasury shares	153	-	-	(64)	89
Share based payments	-	1,222	-	-	1,222
Tax on share based payments	-	-	-	225	225
At 30 June 2023	49,175	2,635	3,431	25,407	80,648

Cash flow statements

for the year ended 30 June 2023

		Notes	Year ended 30 June 2023  £'000		Year ended 30 June 2022  £'000
	Cash flows from operating activities
	Cash generated from/(used in) operations before adjusting items	13	33,205		24,570
	Cash flows for adjusting items - operating activities		(375)		(342)
	Cash flows from tax on share based payments		(2)		(4)
	Cash generated from/(used in) operations		32,828		24,224
	Interest received/(paid)		344		(479)
	Tax paid		(3,268)		(3,397)
	Net cash generated from/(used in) operating activities		29,904		20,348
	Cash flows from investing activities
	Disposal of subsidiaries net of cash	10	1,549		22,792
	Deferred consideration received		250		250
	Cash flows for adjusting items - investing activities		(6)		(43)
	Purchase of property, plant and equipment		(461)		(440)
	Proceeds from disposal of property, plant and equipment		13		3,493
	Purchase of intangible assets		(595)		(1,292)
	Net cash generated from investing activities		750		24,760
	Cash flows from financing activities
	Dividends paid to owners of the parent		(7,462)		(5,492)
	Cash received from sale of shares for share vesting		573		340
	Share issuance costs		(14)		(28)
	Purchase of shares by ESOT		-		(371)
	Payment of lease liabilities		(2,109)		(3,752)
	Cash flows for adjusting items - proceeds on disposal of interest rate swap		-		1,243
	Decrease in bank loans		-		(21,198)
	Net cash used in financing activities		(9,012)		(29,258)
	Net increase in cash and cash equivalents, net of bank overdrafts		21,642		15,850
	Cash and cash equivalents, net of bank overdrafts at beginning of the year		20,543		3,730
	Exchange (loss)/gain on cash and cash equivalents		(12)		205
	Cash classified as held for sale		-		758
	Cash and cash equivalents, net of bank overdrafts at end of the year		42,173		20,543
	Reconciliation of net cash
	Cash and cash equivalents at beginning of the year		19,785		7,374
	Cash classified as held for sale		758		-
	Bank overdrafts at beginning of the year		-		(3,644)
	Bank loans at beginning of the year		-		(20,960)
	Lease liabilities at beginning of the year		(7,510)		(10,742)
	Net cash/(debt) at beginning of the year		13,033		(27,972)
	Net increase in cash and cash equivalents, net of bank overdrafts		21,630		16,813
	Net repayment in bank loans		-		21,198
	Exchange loss on bank loans		-		(238)
	Movement in lease liabilities		300		3,232
	Cash and cash equivalents at end of the year		42,173		19,785
	Cash classified as held for sale at end of the year		-		758
	Lease liabilities at end of the year		(7,210)		(7,510)
	Net cash at end of the year		34,963		13,033

Notes to the financial statements

1. Nature of the Financial Statements

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 2023 on which an unqualified report has been made by the Company's auditors.

Financial statements for the year ended 30 June 2023 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 2023 statutory accounts will be delivered in due course.

Copies of the Annual Report and Financial Statements will be made available to shareholders shortly and will be available from the Company's registered office at 10 Whitechapel High Street, London, E1 8QS.

2. Statement of accounting policies

The preliminary announcement for the year ended 30 June 2023 has been prepared in accordance with UK adopted international accounting standards (UK adopted IAS). 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 2022. There was no material effect from the adoption of new standards or interpretations in the year ended 30 June 2023.

3. Measures of profit

Reconciliation to profit on continuing activities before tax

To provide shareholders with additional understanding of the trading performance of the Group, adjusted EBITA has been calculated as profit before tax after adding back:

•     impairment of property, plant and equipment;

•     amortisation of intangible assets excluding computer software;

•     adjusting items (included in operating expenses);

•     other income - gain on disposal of subsidiaries;

•     other income - gain on disposal of property, plant and equipment;

•     other income - net gain on financing activities; and

•     net finance income/expense.

Adjusted profit before tax, adjusted EBITA and adjusted EBITDA reconcile to profit on continuing activities before tax as follows:

	Year ended  30 June 2023 £'000	Year ended  30 June 2022 £'000
Profit before tax	24,022	36,120
Impairment of property, plant and equipment	-	597
Amortisation of intangible assets excluding computer software	2,381	2,368
Adjusting items (included in operating expenses)	147	66
Other income - gain on disposal of subsidiaries	(2,212)	(16,329)
Other income - gain on disposal of property, plant and equipment	-	(1,289)
Other income - net gain on financing activities	-	(840)
Adjusted profit before tax	24,338	20,693
Net finance (income)/expense	(232)	928
Adjusted operating profit ('adjusted EBITA')	24,106	21,621
Depreciation of property, plant and equipment included in operating expenses	2,321	2,412
Amortisation of intangible assets - computer software	1,690	3,721
Adjusted EBITA before depreciation ('adjusted EBITDA')	28,117	27,754

Adjusted profit before tax	24,338	20,693
Remove operating profit from sold and closed businesses	(212)	(2,089)
Continuing adjusted profit before tax	24,126	18,604

4. Segmental information

In accordance with IFRS 8 the Group's operating segments are based on the operating results reviewed by the Executive Board, which represents the chief operating decision maker.

The Group's dynamic portfolio provides customers with a range of information, data, training and education solutions. The two divisions (Training & Education and Intelligence) are the Group's segments and generate all of the Group's revenue. The Board considers the business from both a geographic and product perspective. Geographically, management considers the performance of the Group between the UK, Europe (excluding the UK), North America and the Rest of the World.

a) Business segments

	Revenue Year ended 30 June 2023 £'000	Profit Year ended 30 June 2023 £'000	Revenue Year ended 30 June 2022 £'000	Profit  Year ended 30 June 2022 £'000
Training & Education	64,872	16,066	61,464	15,998
Intelligence	58,625	13,258	59,564	11,359
Group total	123,497	29,324	121,028	27,357
Unallocated central overheads	-	(3,703)	-	(4,506)
Share based payments	-	(1,515)	-	(1,230)
	123,497	24,106	121,028	21,621
Impairment of property, plant and equipment		-		(597)
Amortisation of intangible assets excluding computer software		(2,381)		(2,368)
Adjusting items (included in operating expenses)		(147)		(66)
Other income - gain on disposal of subsidiaries		2,212		16,329
Other income - gain on disposal of property, plant and equipment		-		1,289
Other income - net gain on financing activities		-		840
Net finance income/(expense)		232		(928)
Profit before tax		24,022		36,120
Taxation		(3,827)		(3,295)
Profit for the financial year		20,195		32,825

There are no intra-segmental revenues which are material for disclosure. Unallocated central overheads represent central 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:

	Year ended 30 June 2023 £'000	Year ended 30 June 2022 £'000
UK	70,573	64,320
USA	24,465	21,304
Europe (excluding the UK)	19,224	25,809
Rest of the World	9,235	9,595
Total revenue	123,497	121,028

c) Timing of revenue recognition

The timing of the Group's revenue recognition is as follows:

	Year ended 30 June 2023 £'000	Year ended 30 June 2022 £'000
Revenue from products and services transferred at a point in time	39,551	39,725
Revenue from products and services transferred over time	83,946	81,303
Total revenue	123,497	121,028

During the year the Group recognised £31,405,000 of revenue that was held as a contract liability 30 June 2022 (2022: £30,124,000 related to amounts held at 30 June 2021).

5. Profit from continuing operations

a) Profit for the year from continuing operations is stated after charging/(crediting):

	Year ended  30 June 2023 £'000	Year ended  30 June 2022 £'000
Depreciation of property, plant and equipment - included in operating expenses	2,321	2,412
Short term and low-value leases	94	114
Amortisation of intangible assets - computer software	1,690	3,721
Non-adjusting profit on disposal of property, plant and equipment	(36)	(71)
Share based payments (including social security costs)	1,515	1,230
Amortisation of intangible assets excluding computer software	2,381	2,368
Adjusting items (included in operating expenses)	147	66
Adjusting item - gain on disposal of subsidiaries	(2,212)	(16,329)
Adjusting item - gain on sale of property, plant and equipment	-	(1,289)
Adjusting item - net gain on financing activities	-	(840)
Research and development expenditure credit	(200)	(183)
Impairment of property, plant and equipment	-	597
Foreign exchange loss	179	446
Fees payable to the auditor for the audit of the Company and consolidated financial statements	153	107
Fees payable to the auditor and their associates for other services:
- The audit of the Company's subsidiaries pursuant to legislation	240	205
- Audit related other services	17	15

b) Adjusting items

The following items have been charged to the income statement during the year but are considered to be adjusting so are shown separately:

	Year ended 30 June 2023 £'000	Year ended 30 June 2022 £'000
Expense relating to strategic activities	147	66
Other adjusting items (included in operating expenses)	147	66
Impairment of property, plant and equipment	-	597
Amortisation of intangible assets excluding computer software	2,381	2,368
Total adjusting items (classified in profit before tax)	2,528	3,031

6. Net finance income/(expense)

	Year ended 30 June 2023 £'000	Year ended 30 June 2022 £'000
Net finance income/(expense) comprise:
Interest receivable/(payable) on cash and cash equivalents/(bank loans and overdrafts)	373	(748)
Unwinding of the discount on royalty payments receivable	105	113
Interest on lease liabilities	(246)	(293)
	232	(928)

7. Taxation

	Year ended 30 June 2023 £'000	Year ended 30 June 2022 £'000
Current tax
UK corporation tax at current rates on UK profits for the year	3,263	2,817
Adjustments in respect of previous years	(54)	(870)
	3,209	1,947
Foreign tax	1,634	969
Adjustments in respect of previous years	89	-
Total current tax	4,932	2,916
Total deferred tax	(1,105)	379
Taxation	3,827	3,295

Factors affecting the tax charge for the year:

The effective tax rate is lower (2022: lower) than the average rate of corporation tax in the UK of 20.5% (2022: 19.0%). The differences are explained below:

	Year ended 30 June 2023 £'000	Year ended 30 June 2022 £'000
Profit before tax	24,022	36,120
Profit before tax multiplied by the average rate of corporation tax in the year of 20.5% (2022: 19.0%)	4,925	6,863
Tax effects of:
Impairment property, plant and equipment	-	113
Foreign tax rate differences	338	201
Adjustment in respect of previous years	35	(870)
Other items not subject to tax	(366)	(3,012)
Deferred tax UK intangibles and capital allowances movement	(904)	-
Effect on deferred tax of a change in the corporation tax rate	(83)	-
Other deferred tax movements	(118)	-
Taxation	3,827	3,295

Deferred tax assets and liabilities are measured at the rates that are expected to apply in the periods of the reversal.

The Company's profits for this accounting year are taxed at an effective rate of 15.9% (2022: 9.1%).

Included in other comprehensive income is a tax charge of £nil (2022: credit of £45,000) relating to the net investment hedges.

The tax effect of adjusting items as disclosed in note 9 is a credit of £1,598,000 (2022: £1,050,000).

8. Dividends

Amounts recognised as distributions to owners of the parent in the year:

	Year ended 30 June 2023 Pence per share	Year ended 30 June 2022 Pence per share	Year ended 30 June 2023 £'000	Year ended 30 June 2022 £'000
Final dividends recognised as distributions in the year	5.8	3.9	5,091	3,399
Interim dividends recognised as distributions in the year	2.7	2.4	2,371	2,093
Total dividends paid			7,462	5,492
Final dividend proposed	7.3	5.8	6,410	5,070

9. Earnings per share

Adjusted earnings per share has been calculated using adjusted earnings calculated as profit after taxation attributable to owners of the parent but before:

•     impairment of property, plant and equipment;

•     amortisation of intangible assets excluding computer software;

•     adjusting items (included in operating expenses);

•     other income - gain on disposal of subsidiaries;

•     other income - gain on disposal of property, plant and equipment; and

•     other income - net gain on financing activities.

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

	Year ended 30 June 2023 £'000	Year ended 30 June 2022 £'000
Earnings from continuing operations for the purpose of basic earnings per share	20,195	32,825
Add/(remove):
Impairment of property, plant and equipment	-	597
Amortisation of intangible assets excluding computer software	2,381	2,368
Adjusting items (included in operating expenses)	147	66
Other income - gain on disposal of subsidiaries	(2,212)	(16,329)
Other income - gain on disposal of property, plant and equipment	-	(1,289)
Other income - net gain on financing activities	-	(840)
Tax effect of adjustments above and deferred tax	(1,598)	(1,050)
Adjusted earnings for the purposes of adjusted earnings per share	18,913	16,348

	2023 Number	2022 Number
Weighted average number of ordinary shares for the purposes of basic and adjusted earnings per share	88,027,119	87,632,022
Effect of dilutive potential ordinary shares:
Future exercise of share awards and options	2,217,174	1,126,918
Weighted average number of ordinary shares for the purposes of diluted and adjusted diluted earnings per share	90,244,293	88,758,940
Basic earnings per share	22.94p	37.46p
Diluted earnings per share	22.38p	36.98p
Adjusted basic earnings per share ('adjusted earnings per share')	21.49p	18.66p
Adjusted diluted earnings per share	20.96p	18.42p

10. Disposals

On 30 December 2022 the Group disposed of its Spanish insurance business, Wilmington Inese SL., for a consideration of £2,637,131 (€3,000,000) and recognised a gain on disposal of £2,211,523 presented within other income.

Wilmington received cash of £2,285,714 (€2,600,000) on 2nd January 2023 and the remaining £351,417 (€400,000) is payable on 30 December 2023.

The disposal was executed by way of the sale of 100% of the equity shares and as at the disposal date, the net assets of Wilmington Inese SL. were as follows:

	£'000
Intangibles	34
Property, plant and equipment	236
Deferred tax asset	121
Trade and other receivables	536
Cash and cash equivalents	737
Trade and other payables	(814)
Deferred income	(525)
Lease liability	(173)
Net assets disposed	152
Directly attributable costs of disposal	405
Recycling of deferred foreign exchange loss	(132)
Gain on disposal	2,212
Fair value of consideration	2,637
Satisfied by:
Cash and cash equivalents	2,286
Deferred consideration	351
	2,637

The disposals were executed in line with the Group's strategy to simplify its structure and to focus attention on businesses that operate in the GRC markets. Wilmington Inese SL. was classified as continuing operations until the date of disposal due to it not being a separate major line of business or geographical area.

11. Trade and other receivables

	Group
	30 June 2023 £'000	30 June 2022 £'000
Current
Trade receivables	22,577	22,290
Prepayments and other receivables	3,758	3,272
Accrued income	1,056	1,535
Amounts due from subsidiaries	-	-
	27,391	27,097

12. Trade and other payables

	Group
	30 June  2023 £'000	30 June 2022 £'000
Trade payables	3,039	2,734
Social security and other taxes	3,418	2,106
Accruals	15,425	13,936
Subscriptions and deferred revenue	33,659	31,405
Other payables	425	77
Amounts due to subsidiaries	-	-
	55,966	50,258

13. Cash generated from operations

	Year ended 30 June 2023 £'000		Year ended 30 June 2022 £'000
Profit from continuing operations before tax	24,022		36,120
Adjusting item - gain on disposal of subsidiaries	(2,212)		(16,329)
Adjusting item - gain on sale of property, plant and equipment	-		(1,289)
Adjusting item - net gain on financing activities	-		(840)
Adjusting items	147		66
Depreciation of property, plant and equipment included in operating expenses	2,321		2,412
Amortisation of intangible assets	4,071		6,089
Impairment of property, plant and equipment	-		597
Non-adjusting profit on disposal of property, plant and equipment	(36)		(71)
Share based payments (including social security costs)	1,515		1,230
Net finance (income)/expense	(232)		928
Operating cash flows before movements in working capital	29,596		28,913
(Increase)/decrease in trade and other receivables	(107)		1,621
Increase/(decrease) in trade and other payables	4,023		(5,657)
Decrease in provisions	(307)		(307)
Cash generated from/(used in) operations before adjusting items	33,205		24,570

Cash conversion is calculated as a percentage of cash generated by operations to adjusted EBITA as follows:

	Year ended 30 June 2023 £'000	Year ended 30 June 2022 £'000
Funds from operations before adjusting items:
Adjusted EBITA (note 3)	24,106	21,621
Share based payments (including social security costs)	1,515	1,230
Amortisation of intangible assets - computer software	1,690	3,721
Depreciation of property, plant and equipment included in operating expenses	2,321	2,412
Non-adjusting profit on disposal of property, plant and equipment	(36)	(71)
Operating cash flows before movement in working capital	29,596	28,913
Net working capital movement	3,609	(4,343)
Funds from operations before adjusting items	33,205	24,570
Cash conversion	138%	114%

	Year ended 30 June 2023 £'000	Year ended 30 June 2022 £'000
Free cash flow:
Operating cash flows before movement in working capital	29,596	28,913
Proceeds on disposal of property, plant and equipment	13	3,493
Net working capital movement	3,609	(4,343)
Interest received/(paid)	344	(479)
Payment of lease liabilities	(2,109)	(3,752)
Tax paid	(3,268)	(3,397)
Purchase of property, plant and equipment	(461)	(440)
Purchase of intangible assets	(595)	(1,292)
Free cash flow	27,129	18,703

14. Events after the reporting period

Due to the growing net cash position the Board decided to cancel the revolving credit facility in August 2023.

---

[1] Continuing - eliminating the effects of the impact of disposals; Organic - Continuing eliminating exchange rate fluctuations.

[2] Continuing adjusted profit before tax - see note 3.

[3] Continuing adjusted basic earnings per share -; Adjusted basic earnings per share - see note 9.

[4] Net cash includes cash and cash equivalents, bank loans (excluding capitalised loan arrangement fees) and bank overdrafts but excludes lease liabilities.

[5] Recurring revenues - those contracted at least one year ahead.

[6] Organic - eliminating the effects of exchange rate fluctuations and the impact of acquisitions and disposals; Continuing - eliminating the effects of the impact  of disposals;

[7] ICA businesses and CLTi.

[8] Mercia and Bond Solon.

[9] FRA.

[10] UK Healthcare and APM.

[11] Pendragon, Axco and Compliance Week.

 

END