Financial results for the year ended 30 June 2019

RNS Number : 8765M

Wilmington PLC

19 September 2019

Wilmington plc

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

Financial results for the twelve months ended 30 June 2019

Wilmington plc, the provider of information, education and networking services in Risk & Compliance, Healthcare and Professional knowledge areas, today announces its full year results for the twelve months ended 30 June 2019.

Financial Highlights

- Revenues for the year up 1% to £122.5m (2018: £121.3m)

o Up 1.5% on an organic¹ basis reflecting a shift in momentum given the declines of the last two years

- Adjusted EBITA² decreased by 9.7% to £21.5m (2018: £23.8m) with EBITA margins at 17.6% (2018: 19.6%)

o Reflects previously signalled cost increases to support growth initiatives

- Adjusted profit before tax³ down 11.5% to £19.3m (2018: £21.8m)

- Profit before tax at £14.7m (2018: £2.3m)

o Increase reflects the benefit of the gain on sale of ICP business of £1.9m plus the non repeat of one-off costs in the prior year including head office move £3.1m, and goodwill impairment £8.6m

- Adjusted earnings per share⁴ down 11.9% to 17.44p (2018: 19.80p)

- Basic earnings per share of 12.74p (2018: loss per share of 0.45p)

- Final dividend increased 4% to 5.0p (2018: 4.8p); total dividends up 3% to 9.1p (2018: 8.8p)

- Strong cash conversion⁵ at 123% (2018: 108%)

- Group net debt at 30 June 2019 was £33.9m (2018: £39.6m). Represents 1.4 times adjusted EBITDA (2018: 1.5 times)

o Debt facilities extended after the year end to July 2023 (with option to extend to October 2024)

Operational Highlights

- 6% organic growth in Risk & Compliance driven mainly by double digit growth in the main Compliance business

o Strong demand for online courses and bespoke in-house programmes

o Investment in new platform for Compliance Week and new courses developed for wealth management

o Axco secured a number of multi-year renewals with major customers

- Healthcare division recovered from a challenging prior year to achieve 1% organic revenue growth

o New business sales in UK improved as business started to see benefits of prior year integration activities

o Success of new product, APMi in France supported strong underlying performance

o US events business had good second half led by flagship RISE event for which revenue was up 30% year-on-year

o Interactive Medica platform integrated with existing UK data products to enhance user experience

- Professional impacted by UK economic/political climate particularly in second half. Resulted in 2% organic revenue decline

o Accountancy integrated its Mercia and SWAT businesses into a single brand

o Strong performance in Legal by Bond Solon in witness familiarisation and in winning framework contracts for regulatory training

o Investment banking business transitioned to new learning management system and launched student dashboard

- Mark Milner joined as Chief Executive Officer on 1 July 2019

Current Trading and Outlook

- Trading in first two months of year in line with Board expectations with revenue growth on prior year

o Promising sales performance in first two months in all three divisions

- Full year organic revenue growth expected to be in low to mid single digit range

Martin Morgan, Non-Executive Chairman commented:

"Wilmington made progress over the year on our objective of focussing the Group on delivering organic growth. We built momentum despite having to deal with the current uncertainties in the political and economic climate. The Board maintains its view that the Group is well positioned to build on this and deliver improved performance and increased shareholder value."

1 Organic - eliminating the effects of exchange rate fluctuations and the impact of acquisitions and disposals

2 Adjusted EBITA - see note 3

3 Adjusted profit before tax - see note 3

4 Adjusted earnings per share - see note 10

5 Cash conversion - see note 17

Mark Milner joined the Group as Chief Executive Officer on 1 July 2019 at the start of the new financial year. He commented:

"I am delighted to have joined Wilmington at this exciting time in its development. My first two months have been busy, visiting as many businesses as possible, meeting their teams and learning more about their business models. Having spent my career in the media, technology and data industries I recognise many of the dynamics of the individual businesses. I have been struck by the passion and enthusiasm that I have encountered across the Group and the deep level of understanding that our people have of their markets, their customers and those customers' needs. Our businesses are full of ideas, so my immediate job is to work with these teams to develop these opportunities, accelerate growth, and unlock the value we believe exists within Wilmington as a group."

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

Richard Amos, Chief Financial Officer

FTI Consulting

Charles Palmer / Dwight Burden / Emma Hall / Leah Dudley

020 7422 6800

020 3727 1000

Notes to Editors

Wilmington plc is the recognised knowledge leader and partner of choice for information, education and networking in Risk & Compliance, Healthcare and Professional areas. Wilmington employs close to 1,000 people and sells to around 120 countries. Wilmington is a premium listed company on the main market of the London Stock Exchange.

Chairman's Statement

I am pleased to present my report on the year ended 30 June 2019. We made progress on our objective of focussing the Group on delivering organic revenue growth. We built momentum through the year despite having to deal with the current uncertainties in the political and economic climate. We completed a thorough, consultant led review of our business, and instigated a bottom up three year planning exercise for the first time. And of course at the start of the new financial year we were delighted to welcome Mark Milner who joined us as Chief Executive Officer, at which point I resumed my role as Non-Executive Chairman. I very much look forward to working with Mark and collaborating with him to unlock the potential for increased shareholder value that I believe exists within our portfolio of businesses.

Summary of Results

Overall financial performance was mixed. Revenue of £122.5m (2018: £121.3m following restatement for adoption of IFRS15) represented a modest organic growth rate of 1.5% but demonstrated an encouraging shift in momentum given the declines suffered in the previous two years. However due to previously signalled increases in costs, partly through investments in infrastructure and product development, adjusted profit before tax is down year-on-year at £19.3m (2018 restated: £21.8m). Statutory profit before tax is up at £14.7m (2018 restated: £2.3m), but this is because of the impact of both one-off costs from last year which did not repeat and a gain this year from the disposal completed at the start of the year. However, cash generation was strong with net debt decreasing by £5.7m to £33.9m (30 June 2018: £39.6m).

The performance in the year was achieved against a backdrop of some difficult trading conditions, in particular impacting the Professional division, where the political and economic uncertainty gripping the UK economy impacted demand for training courses and resulted in a 2% organic revenue decline. Offsetting that, Risk & Compliance delivered good 6% organic revenue growth, and within that our core Compliance business ICA achieved double digit growth. Meanwhile, the Healthcare division has been recovering from a challenging prior year. It achieved 1% organic revenue growth with a 5% decline in H1 more than offset by improved momentum in H2.

Dividend

In recognition of the progress that has been made and its confidence in the future prospects of the Group, the Board is maintaining the previous progressive dividend policy that has been in place since 2013/14. At the AGM in November it will be proposed that the final dividend be increased 4% to 5.0p (2018: 4.8p). Taken in conjunction with the increased interim dividend paid in April this takes the full year dividend to 9.1p, up 3% from the 8.8p paid in 2018. This was covered 1.9 times in the year by adjusted earnings per share. The Board is comfortable with this level of cover although its medium term intention is to rebuild cover to two times adjusted earnings per share whilst maintaining the progressive dividend policy.

Strategy and Business Review

As mentioned in the last Annual Report, following my appointment and the negative trading update in July 2018, in conjunction with the rest of the Board I initiated a thorough review of the business. In order to obtain an independent assessment we engaged a firm of consultants to support us. Working with senior management their remit was to analyse our key markets and competitors, and to assess our relative positions in them. The work included an extensive programme of customer referencing and analysis to ascertain the underlying growth rates and identify trends within our key markets. These external findings were supplemented by some detailed analysis of our internal commercial performance.

The review concluded positively. It supports the Board's view that Wilmington has the opportunity to return to being a growth business, through operationally executing to a high standard.

It found that Wilmington is generally operating in healthy but competitive markets; that we have strong market shares with number one or two positions; that brand recognition and respect for what we offer is high and is coupled with good rates of repeat purchasing. Of course it also found that our markets are changing, for example in the way information is being consumed and in the switch to digital learning. It appears that we are not facing significant imminent disruptive change but it is my observation that there has been insufficient investment in new products and services over the last few years as the Group focussed on expanding through acquisition. The review generated ideas about how our core businesses might develop their product offerings, and subsequent to that we instigated a three year planning process undertaken at a business unit level rather than at group level which had been the case previously. That process has allowed us to identify, by business, product roadmaps to generate new revenues, which in turn is informing investment decisions. It is supported by a process introduced earlier in the year that has introduced new rigour into investment decision-making.

The review also identified some challenges with the strategy we were pursuing in Healthcare, and as a result the Board subsequently decided to move our focus away from building a pan-European healthcare information business, in favour of concentrating on the UK and France where we already occupy good positions.

Finally, the review also supported the Board's decision made last summer to focus on improving organic growth for the time being in preference to prioritising acquisitions. My observation whilst undertaking the interim Executive role is that this needs to be complemented by a heightened emphasis on sales and marketing execution and on streamlining the organisation to enable it to move at a faster pace. These are the top priorities for Mark in his role as our new CEO.

Board changes

Mark joined us immediately after the year end on 1 July 2019. His experience in digital data businesses and his extensive background in sales and marketing are key strengths that we believe are hugely relevant to and important for Wilmington. He has hit the ground running and is already making a positive impact on the business. His predecessor, Pedro Ros left the business on 13 February 2019 and I fulfilled the Executive role in the interim period supported by Richard Amos our CFO. I would like to thank Pedro for his contribution to the Group over the previous four years.

People

The last twelve months have been challenging for the Group, during a period of considerable change. The impact of this is of course felt most keenly by our staff and their response has been excellent, for which they deserve great credit. I would also like to take this opportunity to thank them personally for the support they offered me as I fulfilled the Executive Chairman role. I greatly enjoyed working directly with so many of them and appreciate their contribution through that period.

The period has also seen much change in the leadership of the business. Four members of our Executive Committee have stepped down in the year and I would like to thank all of them for their contributions whilst with us. In particular I would wish to highlight Bill Howarth who has stepped down as Divisional Director for Compliance as part of a planned succession. Bill has been a key figure at Wilmington for many years, being the founder of the ICA and the main architect of its success. He is remaining with us in a part-time capacity as President of the ICA with a particular focus on examinations and accreditations and I look forward to continuing to work with him in that capacity. He is succeeded as Divisional Director by Tamara Kahn who joined us in June, bringing the strategic and marketing background which we believe will be key to developing further our Compliance business. I welcome Tamara to Wilmington as I also do Thomas Mount who joined us in December as Chief Technology Officer.

During the year, as planned we grew our workforce, with the full time equivalent headcount ('FTE') increasing by 26 to 860 at 30 June 2019 (30 June 2018: 834 after adjusting for the 15 FTE who left following the disposal of ICP) to support our growth plans and also to fill vacancies carried forward from the prior year. Specific areas of investment have included the US Healthcare business where we increased sales resource to deal with improved demand in the second half.

Acquisitions and disposals

On 18 July 2018, Wilmington sold its specialist credit reporting business ICP to its current management team for £3.0m. The sale proceeds will be paid over five years. The sale allowed Wilmington to focus its resources on its core client communities and secure for shareholders a good return from historic investments.

The Group made no material acquisitions in the period under review. As I set out in last year's Report, we are currently placing less emphasis on the pursuit of acquisitions to focus on organic growth from our existing portfolio. In time, once we are comfortable that those businesses are growing appropriately, we will consider acquisitions where we see clear opportunities which support our strategy and deliver shareholder value.

Current trading and outlook

Maintaining and building on the momentum achieved over the last twelve months is key to our aspirations for the new financial year. Trading in the first two months has started in line with our expectations with revenue ahead of last year. It is a seasonally quiet period so caution needs to be exercised in extrapolating this start into a trend. But sales activity in the first two months, an increasingly key lead indicator of progress, has been promising in each division with a number of positive developments.

Group organic revenue growth for the year is expected to improve slightly on the prior year and achieve growth in the low to mid single digit range. Within this, both Healthcare and Risk & Compliance are expected to deliver similar organic revenue growth to last year with Professional benefitting from the investments made this year to achieve flat year-on-year performance. Allied to this, costs are expected to increase in line with previously discussed plans.

The Board retains its view that Wilmington is well positioned to build on the work of the last twelve months and deliver improved performance. With a portfolio of strong brands operating in markets with good long term growth prospects we remain committed to unlocking the significant shareholder value we believe exists within the Group.

Martin Morgan

Non-Executive Chairman

Review of operations

Note that variances described below as 'organic' are after adjusting for acquisitions and disposals and at constant currency exchange rates.

Risk & Compliance

2019 2018* Absolute Organic

Variance Variance

£'m £'m % %

Revenue

Compliance 29.0 26.6 9% 8%

Risk 13.4 15.5 -14% 1%

Total 42.4 42.1 1% 6%

Operating profit 12.7 12.2 4% 9%

Margin % 30% 29%

* 2018 comparatives have been restated to reflect the adoption of IFRS 15.

Business model

The main Compliance business is the International Compliance Association ('ICA') which was developed organically within Wilmington. It is an industry body we 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.

Revenue earned by ICA is primarily training income that we receive for running professional development courses and associated examinations which allow students to achieve their professional accreditation. The courses are open to public enrolment and applicants for a particular course can be from a variety of different organisations and territories. We currently offer 43 accredited qualifications, ranging from entry level certifications up to post-graduate equivalent diplomas. These accreditations are awarded in association with the University of Manchester's Alliance Manchester Business School, and we retain a panel of independent academic professionals who teach, set exams and carry out assessments. The courses are predominantly run face to face, but an increasing proportion are hosted online. Additional revenue comes in the form of subscriptions paid by the professional members for their ICA accreditation. These are either paid individually or via corporate sponsorship. ICA earns additional revenue through developing bespoke in-house programmes (both face to face and online) for institutions to train staff across their businesses in compliance procedures and protocols that are personalised to their business and industry. The material for ICA courses is developed by our own internal R&D team, and we own the associated intellectual property. In total, revenue from the ICA and associated training accounts for around 57% of total Compliance revenue.

Outside of the ICA, the other Compliance businesses earn revenue from running professional development programmes for wealth managers, by offering subscription services for provision of detailed information on regulations in the UK pensions industry and from subscriptions to Compliance Week, the premium industry journal for US and European compliance professionals. The Compliance Week brand also generates revenue from lead generation to the compliance community and from running industry networking events.

The Risk businesses serve the global insurance industry, primarily with in-depth regulatory information, market intelligence and analysis. In addition, we provide networking events and training specifically focussed on the Spanish insurance market. Revenue in Risk is mainly earned through subscriptions to the information and analysis services and from attendance fees and sponsorship at the networking events and training courses.

Market

Our Compliance businesses primarily serve the financial services industry where market demand remains strong, reflecting a backdrop of increasing regulation. This is helping drive increased interest in related professional qualifications and training. This is an evolving industry and with ever rising regulatory pressure there has been increased interest at not only the Tier 1 but also the Tier 2 and 3 level institutions for both public and in-house bespoke programmes. In addition to financial services, the ICA also saw growth from the insurance, oil and gas and gaming sectors. Whilst the market served by the ICA has been strong, the benefit from that has been diluted to some extent by consolidation in the UK pensions industry and by the ongoing challenging trend in demand for print publications which has continued to affect Compliance Week.

The long term trend of consolidation amongst the major insurance industry companies has been offset by growing underlying demand for traditional insurance products, with newer threats such as cyber risk gaining increased attention. Overall this is helping to balance out demand for the services we provide in the risk market.

Trading performance

Against this backdrop, the Risk & Compliance division performed well. Overall revenue was up 1% to £42.4m (2018: £42.1m) although comparison is affected by the disposal of ICP at the start of the financial year. Adjusting for this and at constant exchange rates, organic revenue growth was 6% (2018: 1%).

Within this total, revenue in the Compliance businesses combined grew 8% organically. The main Compliance business, ICA, grew by double digits, with strong demand for both bespoke in-house training programmes and for online qualification programmes. Despite growth in the latter, demand for traditional face-to-face courses has continued at historic levels. Internationally, some weakness in Singapore was offset by solid growth in the Middle East and Malaysia. Accredited paid memberships of the ICA increased to over 14,000 from around 12,000 at the start of the year.

The Other Compliance businesses delivered low single digit growth, with an in-year recovery in demand for training for wealth managers and some pricing improvements in the pensions area offsetting challenges at Compliance Week. The wealth management business benefited from new management and a refresh of course materials that took place twelve months ago including the development of more online learning which helped open up new markets in what is geographically a very diverse industry. After a relatively strong prior year, Compliance Week suffered in the year from an over-reliance on lead generation income and the impact on subscription renewals of an ageing online platform. The business has been revitalised in the second half of the year with new leadership and the launch of a new online platform that offers the opportunity for its management team to exploit a wider variety of business models and subscription offers.

The Risk businesses overall reported 1% organic increase in revenue. Comparison on absolute revenue performance is impacted by the disposal of ICP which contributed £2.1m revenue in FY18 and was sold with effect from the start of the financial year.

Also under new leadership, Axco, our insurance information business improved on a relatively weak prior year, with 2% organic revenue increase coming from a strategy of developing strengthened relationships with key customers. Solid renewal rates across Axco's client base, including a number of multi-year contracts, helped secure revenue growth. A joint venture to service the Insurtech sector that was launched as a pilot in the year did not reach commercial feasibility. Consequently, it was shut down and the investment written off at the year end. Other significant investment is underway in Axco to refresh its platform and develop new products for current core clients and these are expected to start rolling out over the next twelve months.

Inese, our Spanish insurance industry company, had a challenging year, recording 2% organic revenue decline. This all came from the recently opened Barcelona office where the Catalonian political situation caused the retrenchment by insurance companies and hence a decline in local training requirement. This situation is expected to continue in the current year and the cost base has been rationalised as a result. Outside of Barcelona the business performed well, with its annual event in particular delivering record results.

Divisional operating profit was up 4% in absolute terms to £12.7m (2018: £12.2m). On an organic basis the operating profit increase was 9% as the organic revenue growth fed through to profit. Operating margin was essentially unchanged at 30% (2018: 29%).

Healthcare

2019 2018 Absolute Organic

Variance Variance

£'m £'m % %

Revenue

European Healthcare 29.0 27.9 4% 1%

US Healthcare 9.7 8.9 9% 5%

Other Information businesses 7.6 7.9 -4% -3%

Total 46.3 44.7 4% 1%

Operating profit 7.3 9.9 -26% -23%

Margin % 16% 22%

Business model

Wilmington offers a wide range of products and services through its Healthcare businesses predominantly around the provision of market and customer intelligence. Wilmington's Healthcare division combines these information assets with others that provide similar services to a number of other communities including charities and not for profit organisations. In addition the division runs events and offers a small amount of online training.

The core of the data supplied by the Healthcare division often comes 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. Equally in some areas we provide proprietary analysis of the data and editorial comment which constitutes our own intellectual property.

Wilmington's European Healthcare businesses operate mainly in the UK and France, complemented by services to the wider pan-European market offered by the Interactive Medica subsidiary acquired in February 2018. Services provided include the provision of deep insight information on practitioners, facilities and treatments in the UK and French health sector markets that enable suppliers into those markets to better understand and connect with their customers. Additionally, in the UK we publish the Health Service Journal ('HSJ'), the leading online publication in the UK for healthcare leaders. Associated with that we organise networking and training events including the flagship HSJ Awards and in the UK we also provide a suite of online learning courses that familiarise industry participants with the complexities of the National Health Service. The majority of revenue in this area is earned through sales of discrete packages of data or through subscription services either for the ongoing provision of information or for access to regular publications and training courses. Events are typically funded by supplier sponsorship although this is sometimes augmented by delegate charges.

The US Healthcare businesses are distinct from our other Healthcare assets in that they are predominantly events based with only a small proportion of revenue earned from data and consist predominantly of the business and industry events that were acquired with FRA in July 2015. They serve the US healthcare/health insurance markets and to a lesser extent the US financial services and legal services communities. The prime brand is the RISE series of events that address the Medicare and Medicaid markets, for which the flagship event is RISE Nashville which takes place in March each year. Revenue from these events is generated from both sponsorship and delegate sales.

The Other Information businesses consist of a portfolio of data products including charity fund-raising information and marketing data suppression tools. They include services that are used by organisations to help prevent identify fraud. Revenue is traditionally earned through subscription to the relevant data feed.

Markets

Healthcare spend globally continues to increase due to well publicised challenges including ageing populations, greater prevalence of chronic diseases and the need to develop innovative new treatments and drugs. Industry experts predict c5% growth in global healthcare expenditures over the next few years with a similar expectation in the UK following nearly a decade of funding growth running at historically low levels. Tied to this funding increase however is a requirement for patients to have more access to new drugs and medical technologies. Successful and efficient delivery of this will rely on perceptive insight into the healthcare market to ensure that investment and marketing are carefully targeted to be as effective and efficient as possible. Wilmington's Healthcare businesses facilitate that process by providing such insight and hence we believe they are well positioned to deliver long term growth.

The main US market that we serve in Healthcare continues to offer growth opportunities. Enrolments for Medicare Advantage plans continue to increase and this is driving growth in the industry that provides and operates them. This growing community is the target for most of our US Healthcare events. Enrolments are expected to continue to rise for the foreseeable future and the breadth of plans is expected to increase which provides opportunities for additional content and events.

While Wilmington businesses do not deal with personalised patient data, certain of our data products include information such as the contact details of industry practitioners which are covered by the new European data protection regulations 'GDPR' that came into force in May 2018. The implementation of these regulations caused an impact last year as customers became temporarily nervous about using such personal data given the potential penalties for misuse. These concerns have largely been assuaged by the establishment of industry norms of best practice and activity levels and sales cycles have returned to normal. However compliance with the regulations has in some cases resulted in the need to delete specific records where we do not have permission either explicitly or through legitimate interest for the specific intended data use. As a result in some cases databases have reduced in size which has depressed prices.

Trading performance

Overall revenue for the Healthcare division increased 4% to £46.3m (2018: £44.7m). This comparison is however affected by both currency movements and the effect of the acquisition of Interactive Medica in February 2018. Adjusting for these factors, underlying revenue increased 1% on an organic basis (2018: organic decrease of 8%). After significant organic declines in the prior year, encouraging progress was made in both the UK and US Healthcare businesses to turn the performance around. This was augmented by good growth in France and in Interactive Medica for the comparable period post acquisition.

Within the division, the European Healthcare businesses saw a marked improvement over the challenging prior year with 1% full year organic revenue growth. Momentum improved through the year with 2% decline in the first half more than offset by a 3% increase in H2. The main feature of the year was recovery in the UK business where we started to see the benefits of the multiple integration activities that had negatively impacted FY18. For example, the newly integrated sales team delivered marked improvements in pipeline management and opportunity closing rates, supported by improved data from the new CRM solution rolled out in the prior year. The volume of new business sales in the UK was up overall 6%, and this helped close the gap in terms of brought-forward deferred revenue that impacted results in the first few months of the year. It also meant that the UK business started the new year with 4% more pre-booked revenue than twelve months ago.

Part of the UK sales increase came from good growth in the consulting offering that we effectively launched in the prior year. Other enhancements in the period included upgrades for the Investigator and Quantis data products, the former integrated with the technology platform acquired with Interactive Medica. This platform will be progressively rolled out across other applicable products as they are enhanced in the future, Despite this progress, improving momentum in the second half in the UK was not quite enough to offset the 4% H1 decline that had been driven by the lack of brought forward deferred revenue, such that for the full year UK Healthcare revenue was down 1%. Offsetting this was France where 7% organic growth reflected both continued good growth by core products plus the enhancement from the APMi product that we launched at the start of the financial year. This new data product, which provides deep insight data on the French hospital market was well received by pharmaceutical customers, with sales in line with our internal business plan and a strong pipeline heading into the product's second commercial year.

The US Healthcare business has been undergoing a substantial restructure over the last two years, with its portfolio of events reduced to remove unprofitable events and rationalise its cost base. Investment has been made in new systems to facilitate improved marketing and in extra sales resource to pursue the leads created. This action delivered significant benefits in the second half of the year resulting in a full year organic revenue increase of 5%, despite a 21% decrease in the first half. In total 54 events were run in the US compared to 70 in the prior year. The stand-out performance was the RISE event in Nashville which, group-wide is our single biggest event. Revenue from that event was up 30% year-on-year with strong support from both sponsors and delegates. That was the main contributor to the turnaround in performance in the second half, but it was supported by a number of other events which over-performed against our plans and which offer potential for future growth in coming years.

The Other Information Businesses saw a continued slow decline in their legacy portfolio although this was partially offset by growth in newer products and success with new events in the Charities space on which we intend to build in the coming twelve months. The improvement in revenue performance across the division was accompanied by an increase in overheads as explained below and this meant that despite the increased revenue, as anticipated, operating profit fell significantly.

Operating profit in the Healthcare division decreased 26% in absolute terms to £7.3m (2018: £9.9m), with a 23% decline in underlying terms. The operating margin declined to 16% (2018: 22%). This level of reduction was anticipated and it reflected previously highlighted year-on-year cost increases including £0.5m investment in staff to support the new APMi product in France. Additionally costs increased due to inflation, the reinstatement of staff bonuses after their removal in the prior year and the impact of the move to the new London office which occurred midway through the prior year.

Professional

2019 2018* Absolute Organic

Variance Variance

£'m £'m % %

Revenue

Ongoing businesses 33.8 34.2 -1% -2%

Ark business - closed - 0.3 - -

Total 33.8 34.5 -2% -2%

Operating profit 5.8 6.2 -6% -6%

Margin % 17% 18%

* 2018 comparatives have been restated to reflect the adoption of IFRS 15.

Business models

The Professional division predominantly provides education and training for professionals employed in three target communities; accountants in practice and in business, lawyers and investment bankers. It runs face-to-face courses and offers online learning for these communities. It provides training at various levels including inducting new joiners to the investment banking industry, providing continuing professional development for existing qualified lawyers and 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 in tax law, as well as supporting them to promote the services they then offer to their clients.

The Accountancy and Legal businesses are predominantly UK and Ireland based, reflecting the country specific laws and accounting standards that govern their profession. Investment banking is of course a global industry, and as such Wilmington's business in that area has an international presence, with centres in Europe, North America and Asia Pacific.

Around half the revenue in the Professional division 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. Course content is a mix of owned and third party intellectual property. Courses are delivered either by in-house experts or by a network of independent tutors who are paid per course that they deliver.

Markets

The professional education markets that Wilmington serves offer the prospect of medium term growth rates in the low single digit range.

Accountancy markets were challenging last year, increasingly so in the second half. Although the profession in the UK continues to grow, consolidation amongst smaller firms partly offsets this although that had little impact on Wilmington in the period. Additionally Brexit concerns, relatively few newly published accounting standards in the UK and a stable backdrop in terms of tax legislation has resulted in a decline in demand for training courses with accountants seemingly deferring training until they have greater certainty on the post-Brexit regulatory environment.

The markets for the legal business were mixed. Demand for Law for Lawyers products continue to suffer from the removal of requirement for CPD hours for lawyers in England and Wales which came into full effect in October 2017. This has reduced the amount of technical training that lawyers are required to undertake. Conversely the market for Law for Non-Lawyers has been strong with good demand for both witness familiarisation programmes and training of expert witnesses. In the case of the latter in particular, medium term growth prospects are encouraging as both demand for expert witnesses and pressure on them to demonstrate familiarity with legal procedure is increasing.

The market for investment banking training remains competitive. Banks and other financial institutions continue to increase the number of new recruits into the industry who need training, whilst focussing hard on cost control. This was particularly apparent in the Asia Pacific region in the year.

Trading performance

Overall revenue for the Professional division was down 2% at £33.8m (2018: £34.5m). On an organic basis the revenue reduction was also 2% (2018: organic decline of 2%). Within this, modest growth in Legal was offset by a market-driven reduction in Accountancy and a small decline in Investment Banking caused by one-off factors described below.

Following a strong prior year, Accountancy had a tougher FY19 largely due to the market conditions described above. Considerable operational progress was achieved however with the integration activities following the 2016 purchase of SWAT including a re-brand and significant work on upgrading business systems. The business now offers clients one single nationwide programme of products and services having combined the previous three entities into one. Additionally the business relocated to modern, new headquarters in Leicester, closing the original Mercia and Practice Track offices.

Growth in the Legal business was driven by the Law for Non-Lawyers business, Bond Solon, which saw particularly strong demand for witness familiarisation training. It acquired new intellectual property for training courses in the regulatory training field which helped to broaden its portfolio and it has won a number of training contracts in that area over the last twelve months. Law for Lawyers, CLT, saw continued decline in demand for CPD, its traditional training, but in recognition of this is developing a suite of online courses more suited to the developing needs of modern lawyers. These include both technical training modules and courses in softer skills areas such as well-being, that are highly relevant to the current challenges facing law firms and lawyers.

Investment Banking, through the AMT business, had a reasonable year against the backdrop of a tough trading environment. Revenue was down slightly, but this was essentially due to the planned expiry of licensing arrangements with a third party. Its core training revenues were flat year-on-year. The business has broadened its customer base in the period to incorporate recruits into other financial services sectors outside of investment banking including fund managers and accountants. This has been particularly successful in the Middle East. AMT migrated fully across to the group-wide Totara^© learning management platform in the period and also developed and launched an online dashboard that enables both the student and their employer to track progress through the online training modules. Having been developed on Totara^© this dashboard has the capability of being rolled out to other Wilmington training businesses.

Overall divisional operating profit decreased 6% on an absolute and organic basis to £5.8m (2018: £6.2m). The operating margin was essentially unchanged at 17% (2018: 18%). The decrease in profit was largely due to the revenue reduction offset by some headcount savings.

Unallocated central overheads

Unallocated central overheads represent board costs, head office salaries as well as other centrally incurred costs not recharged to the businesses. These increased by £0.3m to £4.1m (2018: £3.8m) due to costs incurred for the business review described in the Chairman's Statement.

Financial review

Change in accounting policies

From 1 July 2018 the Group has adopted IFRS 15. In accordance with the standard it has also restated the balance sheet at 1 July 2017 and 30 June 2018 and the results for the period from 1 July 2017 to 30 June 2018. Adoption of the standard has impacted revenue, deferred revenue, trade debtors and reserves, as well as associated tax items and the commentary below explains the impact on each of these items. A reconciliation of the adjustments is also included in note 18.

Adjusting items, measures and adjusted results

Reference is made in this financial review to adjusted results as well as the equivalent statutory measures. Adjusted results in the opinion of the Directors can provide additional relevant information on our future or past performance where equivalent information cannot be presented using financial measures under IFRS. Adjusted results exclude adjusting items, gain on sale of subsidiaries, profit on disposal of property plant and equipment (to the extent it is material or significant in nature), impairment of goodwill and intangible assets and amortisation of intangible assets (excluding computer software).

	2019	2018 Restated	Absolute variance		Organic variance
	£'m	£'m	£'m	%	%
Revenue	122.5	121.3	1.2	1%	1%
Adjusted EBITA	21.5	23.8	(2.3)	-10%	-6%
Margin %	17.6	19.6

Revenue

In the year ended 30 June 2019 revenue increased by 1% (£1.2m) to £122.5m (2018: £121.3m) or 0.5% on a constant currency basis. The Group's major non-Sterling revenues are in US Dollars and Euros. During the year the US Dollar strengthened against Sterling while the Sterling Euro exchange rate was consistent with prior year.

Reported revenue was also impacted by the disposal of ICP with effect from 1 July 2018, which contributed £2.1m in the prior year. In addition, the current year's revenue reflects a full year of ownership of Interactive Medica compared to five months in the prior year, contributing an additional £0.9m. Adjusting for these factors, revenue grew organically by 1.5%, demonstrating a shift in momentum from the reported declines in the previous two years.

Adopting IFRS 15 resulted in a decrease in revenue in the current and prior year compared to the revenue recognised under the previous revenue standard. The impact on the income statement was a decrease in revenue and profit before tax of £0.5m and £0.7m in the current and prior year respectively. The changes were primarily within the Risk & Compliance division and related to timing of revenue recognition on certain face-to-face courses and online programmes.

Operating expenses before adjusting items, amortisation and impairment

Adjusted operating expenses before adjusting items, amortisation of intangible assets (excluding computer software) and impairment, were £101.1m (2018: £97.5m) up 3.7% or £3.6m.

£0.5m of the increase came from foreign exchange (FX) impacts, with the weakness of Sterling impacting the translation of overseas costs denominated in foreign currencies, whilst costs from acquired businesses essentially offset savings from those in disposed of businesses. There was an increase of around £0.7m in direct costs to support the revenue growth. However, the main drivers for the extra costs were the well sign-posted increase in staff costs and the full year effect of the investments made last year in the new office and IT upgrade.

Staff costs increased by £1.8m to £51.8m (2018: £50.0m) with the main elements being wage inflation of around £0.9m or 2% per annum, £0.5m investment in new editorial staff to support the APMi product launched in France, £0.4m of net other headcount additions and FX and £0.4m of increased staff bonuses following their removal in the prior year. This was offset by a £0.4m reduction in share based payment costs due to staff departures and the lapsing of a number of schemes in the year. The Group's full time equivalent ('FTE') headcount at 30 June 2019 was 860 compared to 849 at 30 June 2018. When adjusting for the reduction of 15 FTE on the disposal of the ICP business in July 2018, the addition of 26 FTEs is in line with the previously announced planned increase in headcount to support growth in targeted areas of the business.

Non-staff costs also increased £1.8m to £49.3m (2018: £47.5m) partly due to the extra direct costs and FX referred to above. The full year impact of the new head office and the associated IT integration were £0.8m while IT costs increased a further £0.2m due to the roll-out of that technology to other offices to improve resilience and reduce cyber risks. The cost of the business review was offset by net savings elsewhere in the organisation.

Adjusted operating profit ('Adjusted EBITA')

As a result of these changes in revenue and operating expenses, adjusted EBITA was down £2.3m (9.7%) to £21.5m (2018: £23.8m). Adjusted operating margin (adjusted EBITA expressed as a percentage of revenue) decreased to 17.6% (2018: 19.6%).

Amortisation excluding computer software

Amortisation of intangible assets (excluding computer software) was £5.0m, compared to £6.4m in the previous year. This decrease relates to a number of assets in the healthcare business that were fully amortised during the year, resulting in a lower cost than the annualised comparative in the prior year.

Impairment of goodwill and intangible assets

Impairment reviews were completed for all the Group's Cash Generating Units ('CGUs') and these reviews concluded that none of the CGUs were impaired, therefore the impairment charge was £nil (2018: £8.6m). Each CGU's recoverable amount was calculated using value in use calculations. The value in use calculations used cash flow projections based on financial budgets approved by senior management covering a three-year period and on a long-term market growth rate of 2% (2018: 2%).

Adjusting items within operating expenses

Adjusting items within operating expenses were £1.4m (2018: £4.6m). Adjusting items in operating expenses are those items that in the opinion of the Directors are one-off in nature and which do not represent the ongoing trading performance of the business. As anticipated these costs are significantly lower than in the prior year during which £3.1m was incurred relating to the move into the new London head office.

In the current year £0.6m of adjusting costs relate to acquisition and disposal activity, including a small amount of transaction fees and the recognition of deferred consideration payable mainly in respect of Interactive Medica. A further £0.5m of expenses has been included in adjusting items due to the costs relating to the change in Chief Executive Officer. The remaining £0.3m of expenses relates to the impairment of a receivable due from Axco Digital Insurer Ratings PTE. Ltd, the joint venture that was closed on 1 July 2019 due to its limited commercial feasibility as outlined in the Review of Operations above.

Operating profit ('EBITA')

After the various adjusting items detailed above, operating profit was £16.9m. This was up £12.7m from £4.2m in 2018. In addition to the movements described above, the increase was enhanced by the £1.9m profit on sale of ICP in July 2018.

Share of loss in equity accounted investments

A £0.1m cost (2018: £nil) has been recognised for the share in losses incurred before closure of the joint venture referred to above.

Net finance costs

Net finance costs increased by £0.1m to £2.1m (2018: £2.0m), partly due to the increase in interest rates affecting the portion of the loan not subject to an interest rate hedge. The increase also reflected the write off of the remaining capitalised loan arrangement fee relating to the 2015 facility that was renewed in July 2019. This was partly offset by the benefit of a reduction in net debt during the year, and lower non utilisation fees as a result of a £10m reduction in the debt facility in November 2017. There was also benefit from £0.1m of interest income recognised on the unwind of the discounted deferred consideration receivable in respect of ICP.

Profit before taxation

After finance costs, profit before tax was £14.7m (2018: £2.3m). Adjusted profit before tax was down 11.5% to £19.3m (2018: £21.8m).

Taxation

The tax charge was £3.5m (2018: £2.6m) with the increase primarily driven by the increase in profit before tax. The overall effective tax rate⁶ fell to 23.9% from 24.2% in 2018 due to the higher adjusting items relating to acquisitions in 2017 and 2018 which are for the most part not deductible for tax purposes.

The underlying tax rate⁷ which ignores the tax effects of adjusting items remained essentially flat at 20.9% (2018: 20.8%) representing a reduction in corporation tax rates in the US offset by a tax provision recognised in light of the uncertainty surrounding the IFRS15 tax treatment of £0.2m and the impact of prior year adjustments.

Earnings per share

Adjusted basic earnings per share decreased by 11.9% to 17.44p (2018: 19.80p), owing to the decrease in adjusted profit before tax and a flat underlying tax rate on an essentially unchanged number of issued ordinary shares. Basic earnings per share was 12.74p compared to (0.45)p in 2018 due to the increase in profit after tax.

Balance Sheet

Non-current assets

Goodwill increased by £0.4m from £77.1m to £77.5m due to fluctuations in foreign exchange rates.

Intangible assets decreased by £4.1m from £27.3m to £23.2m due to amortisation of £6.4m, which was partly offset by additions of £2.3m. Included within these additions were £0.6m of internally generated assets related to investment in digital platforms such as Totara©, the Group wide LMS, with the remainder a mix of off-the-shelf software and upgrades to existing technology platforms.

Property, plant and equipment decreased by £0.5m to £6.0m (2018: £6.5m) reflecting additions of £1.0m offset by depreciation of £1.4m. The main addition in the year was the fit-out of the new Leicester office for Accountancy.

6 The effective tax rate is calculated as the total tax charge divided by profit before tax after adding back impairment charges

7 The underlying tax rate is calculated as one minus the adjusted profit after tax divided by the adjusted profit before tax

Deferred consideration receivable

Following the disposal of ICP in July 2018, the Group recognised £2.2m of deferred consideration receivable, which will be paid over five years. The amount recognised represents the total amount due discounted to present value. The unwind of the £0.6m discount will continue be recognised as a credit to profit and loss in net finance costs over the next four years.

Trade and other receivables

Trade and other receivables were up £0.9m at £29.1m (2018: £28.2m). Within this, trade receivables were essentially unchanged at £23.1m (2018 £22.9m), with the movement being driven by an increase in prepayments.

Trade and other payables

Trade and other payables increased by £2.4m from £54.8m to £57.2m. Within this subscriptions and deferred revenue increased by £2.4m or 8.5% to £30.8m (2018: £28.4m). Around half of this increase was due to timing of invoices. The remaining trade and other payables remained constant at £26.4m.

Current tax liabilities

Current tax liabilities decreased from £0.7m to £0.3m, reflecting the reduction in adjusting items subject to taxation for the year ended 30 June 2019.

Deferred consideration payable

The liability for deferred consideration decreased by £1.1m from £2.6m at 30 June 2018 to £1.5m at 30 June 2019. This reflects the settlement of the final amount owing for SWAT of £1.3m in September 2018, partly offset by the increase in deferred consideration mainly in respect of Interactive Medica. The remaining balances are all due for repayment within twelve months.

Net debt and cashflow

Net debt, which includes cash and cash equivalents, bank loans (excluding capitalised loan arrangement fees) and bank overdrafts, was £33.9m (30 June 2018: £39.6m). Net debt at the year end was 1.4 times adjusted EBITDA (2018: 1.5 times). Cash conversion for the year ended 30 June 2019 was 123% (2018: 108%), slightly higher than expected. The improvement reflects strong cash collections in the latter part of the year. Post the year end on 3 July 2019, the Group extended its debt facilities to expire on 3 July 2023 with an option to extend to October 2024.

Derivative financial instruments

The Group is exposed to foreign exchange risks, liquidity and capital risks and credit risks. The Group has policies that mitigate these risks which include the use of derivative products such as forwards and swaps subject to Board approval. The Group uses interest rate swap contracts to mitigate part of the interest rate volatility risk. These swaps have resulted in an asset of £0.0m (2018: £0.1m) and a liability of £0.2m (2018: £0.4m) at 30 June 2019.

On 3 July 2019 the Group entered into a number of foreign currency transactions to mitigate possible exchange rate fluctuations on its 2019/20 financial results. $12.5m USD were sold forward to mature during the 2019/2020 financial year at an average rate of $1.27 and €3.0m EUR were sold forward at an average rate of €1.11 with similar maturities.

Share capital

During the year 125,494 new ordinary shares of £0.05 were issued in settlement of shares vesting under the Group's Performance Share Plan. This resulted in an increase to the number of ordinary shares outstanding at 30 June 2019 to 87,539,567 (2018: 87,414,073).

Dividend

A final dividend of 5.0p per share (2018: 4.8p) will be proposed at the AGM. If approved, it will be paid on 15 November 2019 to shareholders on the register as at 18 October 2019, with an associated ex-dividend date of 17 October 2019. This will give a full year dividend of 9.1p (2018: 8.8p) and dividend cover of 1.9 times (2018: 2.3 times).

Statement of directors' responsibilities

The statement of directors' responsibilities below has been prepared in connection with the Group's full annual report for the year ended 30 June 2019. Certain parts of the annual report have not been included in this announcement as set out in note 1 of the financial information.

We confirm to the best of our knowledge that:

· the consolidated financial statements, which have been prepared in accordance with IFRSs as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position and profit of the Group;

· the management report represented by the report of the Directors, and material incorporated by reference, includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal risks and uncertainties that they face; and

· the annual report, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to access the company's performance, business model and strategy.

This responsibility statement was approved by the board of Directors on 18 September 2019 and is signed on its behalf by

Richard Amos
Chief Financial Officer

Consolidated Income Statement for the year ended 30 June 2019

	Notes	Year ended 30 June 2019 £'000	Year ended 30 June 2018 Restated £'000
Continuing operations
Revenue	4	122,525	121,342

Operating expenses before amortisation of intangibles excluding computer software, impairment of goodwill and intangible assets and adjusting items		(101,074)	(97,532)
Amortisation of intangible assets excluding computer software	5b	(5,049)	(6,432)
Impairment of goodwill and intangible assets	5b	-	(8,561)
Adjusting items	5b	(1,443)	(4,573)
Operating expenses	6	(107,566)	(117,098)

Other income - gain on sale of subsidiary	5a	1,906	-
Operating profit		16,865	4,244

Net finance costs	7	(2,103)	(1,969)

Share of net loss of associates and joint ventures accounted for using the equity method		(50)	-

Profit before tax		14,712	2,275

Taxation	8	(3,519)	(2,620)

Profit/(loss) for the year		11,193	(345)
Attributable to:
Owners of the parent		11,149	(392)
Non-controlling interests		44	47
		11,193	(345)
Earnings per share attributable to the owners of the parent:
Basic (p)	10	12.74	(0.45)
Diluted (p)	10	12.64	(0.45)
Adjusted earnings per share attributable to the owners of the parent:
Basic (p)	10	17.44	19.80
Diluted (p)	10	17.30	19.65

Consolidated Statement of Comprehensive Income for the year ended 30 June 2019

	Year ended 30 June 2019 £'000	Year ended 30 June 2018 Restated £'000
Profit/(loss) for the year	11,193	(345)
Other comprehensive income/(expense):
Items that may be reclassified subsequently to the Income Statement
Fair value movements on interest rate swaps, net of tax	32	339
Currency translation differences	643	(896)
Net investment hedges, net of tax	(424)	177
Other comprehensive income/(expense) for the year, net of tax	251	(380)
Total comprehensive income/(expense) for the year	11,444	(725)
Attributable to:
Owners of the parent	11,400	(772)
Non-controlling interests	44	47
	11,444	(725)

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 8.

Consolidated Balance Sheet as at 30 June 2019


	Notes	2019 £'000	2018 Restated £'000	2017 Restated £'000
Non-current assets
Goodwill	12	77,535	77,103	86,028
Intangible assets	13	23,213	27,305	31,911
Property, plant and equipment	14	5,967	6,463	4,444
Deferred consideration receivable	11	2,221	-	-
Deferred tax assets		555	976	1,195
Derivative financial instruments		23	113	-
		109,514	111,960	123,578
Current assets
Trade and other receivables	15	29,112	28,233	28,444
Cash and cash equivalents		7,921	10,789	10,687
		37,033	39,022	39,131
Assets held for sale		-	317	-
		37,033	39,339	39,131
Total assets		146,547	151,299	162,709
Current liabilities
Trade and other payables	16	(57,168)	(54,752)	(55,218)
Current tax liabilities		(312)	(722)	(1,932)
Deferred consideration - cash settled		(1,550)	(1,320)	(177)
Borrowings		-	-	(925)
		(59,030)	(56,794)	(58,252)
Non-current liabilities
Borrowings		(41,790)	(50,380)	(49,353)
Deferred consideration - cash settled		-	(1,286)	(2,305)
Derivative financial instruments		(226)	(356)	(662)
Deferred tax liabilities		(2,633)	(3,087)	(4,585)
Provisions for future purchase of non-controlling interests		-	-	(100)
		(44,649)	(55,109)	(57,005)
Total liabilities		(103,679)	(111,903)	(115,257)
Net assets		42,868	39,396	47,452

Equity
Share capital		4,377	4,371	4,362
Share premium		45,225	45,225	45,225
Treasury shares		(96)	(96)	(96)
Share based payments reserve		839	1,108	898
Translation reserve		3,288	2,645	3,541
Accumulated losses		(10,765)	(13,939)	(6,564)
Equity attributable to owners of the parent		42,868	39,314	47,366
Non-controlling interests		-	82	86
Total equity		42,868	39,396	47,452

Consolidated Statement of Changes in Equity for the year ended 30 June 2019

	Share capital, share premium and treasury shares £'000	Share based payments reserve £'000	Translation reserve £'000	Accumulated losses £'000	Total £'000	Non-controlling interests £'000	Total equity £'000
Group
At 30 June 2017 Restated	49,491	898	3,541	(6,564)	47,366	86	47,452

(Loss)/profit for the year	-	-	-	(392)	(392)	47	(345)
Other comprehensive (expense)/income for the year	-	-	(896)	516	(380)	-	(380)
	49,491	898	2,645	(6,440)	46,594	133	46,727
Transactions with owners:
Dividends	-	-	-	(7,514)	(7,514)	(62)	(7,576)
Issue of share capital	9	(384)	-	375	-	-	-
Share based payments	-	594	-	-	594	-	594
Tax on share based payments	-	-	-	(15)	(15)	-	(15)
Movements in non-controlling interest	-	-	-	(345)	(345)	11	(334)
At 30 June 2018 Restated	49,500	1,108	2,645	(13,939)	39,314	82	39,396

Profit for the year	-	-	-	11,149	11,149	44	11,193
Other comprehensive income/(expense) for the year	-	-	643	(392)	251	-	251
	49,500	1,108	3,288	(3,182)	50,714	126	50,840
Transactions with owners:
Dividends	-	-	-	(7,787)	(7,787)	(34)	(7,821)
Issue of share capital	6	(472)	-	466	-	-	-
Share based payments	-	203	-	-	203	-	203
Tax on share based payments	-	-	-	(48)	(48)	-	(48)
Movements in non-controlling interest	-	-	-	(214)	(214)	(92)	(306)
At 30 June 2019	49,506	839	3,288	(10,765)	42,868	-	42,868

Consolidated Cash Flow Statement for the year ended 30 June 2019

		Group
	Notes	Year ended 30 June 2019 £'000	Year ended 30 June 2018 £'000
Cash flows from operating activities
Cash generated from operations before adjusting items	17	26,439	25,665
Cash flows for adjusting items - operating activities		(810)	(2,951)
Cash flows from share based payments		(33)	(50)
Cash generated from operations		25,596	22,664
Interest paid		(1,943)	(1,934)
Tax paid		(3,943)	(4,738)
Net cash generated from operating activities		19,710	15,992

Cash flows from investing activities
Purchase of businesses net of cash acquired		(79)	(1,595)
Sale of subsidiary net of cash disposed		60	-
Deferred consideration paid		(1,522)	(205)
Purchase of non-controlling interests		(224)	(335)
Cash flows for adjusting items - investing activities		(405)	(1,118)
Purchase of property, plant and equipment		(1,332)	(3,089)
Proceeds from disposal of property, plant and equipment		112	55
Purchase of intangible assets		(2,324)	(1,934)
Net cash used in investing activities		(5,714)	(8,221)

Cash flows from financing activities
Dividends paid to owners of the parent		(7,787)	(7,514)
Dividends paid to non-controlling interests		(34)	(62)
Share issuance costs		(6)	(8)
Fees relating to new and extended loan facility		(24)	(22)
Increase in bank loans		6,000	9,127
Decrease in bank loans		(15,399)	(8,012)
Net cash used in financing activities		(17,250)	(6,491)

Net (decrease)/increase in cash and cash equivalents, net of bank overdrafts		(3,254)	1,280
Cash and cash equivalents, net of bank overdrafts at beginning of the year		11,033	9,762
Exchange gain/(loss) on cash and cash equivalents		142	(9)
Cash and cash equivalents, net of bank overdrafts at end of the year		7,921	11,033

Reconciliation of net debt

Cash and cash equivalents at beginning of the year	10,789	10,687
Cash classified as held for sale	244	-
Bank overdrafts at beginning of the year	-	(925)
Bank loans at beginning of the year	(50,665)	(49,781)
Net debt at beginning of the year	(39,632)	(40,019)
Net (decrease)/increase in cash and cash equivalents, net of bank overdrafts	(3,112)	1,271
Net repayment/(drawdown) in bank loans	9,399	(1,115)
Exchange (loss)/gains on bank loans	(524)	231
Cash and cash equivalents at end of the year	7,921	10,789
Cash classified as held for sale	-	244
Bank overdrafts at the end of the period	-	-
Bank loans at end of the year	(41,790)	(50,665)
Net debt at end of the year	(33,869)	(39,632)

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 2019 on which an unqualified report has been made by the Company's auditors.

Financial statements for the year ended 30 June 2018 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 2019 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 10 Whitechapel High Street, London, E1 8QS.

2. Statement of accounting policies

The preliminary announcement for the year ended 30 June 2019 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 2018 along with new standards and interpretations which became mandatory for the financial year. Of these new standards and interpretations, the adoption of IFRS 15 and IFRS 9 has led to changes in the Group's accounting policies.

3. Measures of profit

(a) Reconciliation to profit on continuing activities before tax

To provide shareholders with additional understanding of the trading performance of the Group, Adjusted EBITA has been calculated as Profit before Tax after adding back:

· amortisation of intangible assets excluding computer software;

· impairment of goodwill and intangible assets;

· adjusting items (included in operating expenses);

· other income - gain on sale of subsidiary;

· share of loss of equity accounted investment; and

· finance costs.

	Year ended 30 June 2019 £'000	Year ended 30 June 2018 Restated £'000
Profit before tax	14,712	2,275
Amortisation of intangible assets excluding computer software	5,049	6,432
Impairment of goodwill and intangibles	-	8,561
Adjusting items (included in operating expenses)	1,443	4,573
Other income - gain on sale of subsidiary	(1,906)	-
Adjusted profit before tax	19,298	21,841
Share of loss of equity accounted investment	50	-
Finance costs	2,103	1,969
Adjusted operating profit ('Adjusted EBITA')	21,451	23,810
Depreciation of property, plant and equipment included in operating expenses	1,359	917
Amortisation of intangible assets - computer software	1,477	1,302
Adjusted EBITA before depreciation ('Adjusted EBITDA')	24,287	26,029

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

4. Segmental information

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

The Group's organisational structure reflects the main communities to which it provides information, education and networking. The three divisions (Risk & Compliance, Professional and Healthcare) are the Group's segments and generate all of the Group's revenue. The Board considers the business from both a geographic and product perspective. Geographically, management considers the performance of the Group between the UK, North America, Europe (excluding the UK) and the Rest of the World.

a) Business segments

	Revenue Year ended 30 June 2019 £'000	Profit Year ended 30 June 2019 £'000	Revenue Year ended 30 June 2018 Restated £'000	Profit Year ended 30 June 2018 Restated £'000
Risk & Compliance	42,453	12,670	42,149	12,188
Healthcare	46,310	7,337	44,681	9,899
Professional	33,762	5,808	34,512	6,191
Group total	122,525	25,815	121,342	28,278
Unallocated central overheads	-	(4,152)	-	(3,827)
Share based payments	-	(212)	-	(641)
	122,525	21,451	121,342	23,810
Amortisation of intangible assets excluding computer software		(5,049)		(6,432)
Impairment of goodwill and intangibles		-		(8,561)
Adjusting items (included in operating expenses)		(1,443)		(4,573)
Other income - gain on sale of subsidiary		1,906		-
Finance costs		(2,103)		(1,969)
Share of loss of equity accounted investment		(50)		-
Profit before tax		14,712		2,275
Taxation		(3,519)		(2,620)
Profit/(loss) for the financial year		11,193		(345)

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

	Year ended 30 June 2019 £'000	Year ended 30 June 2018 Restated £'000
UK	69,839	71,592
Europe (excluding the UK)	22,055	20,628
North America	20,829	18,201
Rest of the World	9,802	10,921
Total revenue	122,525	121,342

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:

c) Timing of revenue recognition

	Year ended 30 June 2019 £'000	Year ended 30 June 2018 Restated £'000
Revenue from products and services transferred at a point in time	51,054	45,156
Revenue from products and services transferred over time	71,471	76,186
Total revenue	122,525	121,342

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

The value of revenue recognised in the year which was included in subscriptions and deferred revenue at the start of the year was £28,384,000 (year ended 30 June 2018: £29,861,000). The value of revenue recognised in the reporting period from performance obligations satisfied or partially satisfied in previous periods was £nil (year ended 30 June 2019: £nil).

The Group has applied the practical expedient of paragraph 63 of IFRS 15 not to adjust the promised amount of consideration for the effects of a financing component, as it is expected that the period between the transfer of goods or services, and when the customer pays for that good or service, will be less than one year.

The Group has applied the practical expedient of paragraph 93 of IFRS 15 to recognise the incremental costs of obtaining a contract as an expense when incurred, because the amortisation period of any such asset that the entity otherwise would have recognised is one year or less.

The Group has applied the practical expedient of paragraph 121 of IFRS 15 not to disclose the transaction price allocated to the remaining performance obligations, as required by paragraph 120 of IFRS 15, as the Group's contracts are all for one year or less.

5. Profit from continuing operations

	Year ended 30 June 2019 £'000	Year ended 30 June 2018 £'000
Depreciation of property, plant and equipment - included in operating expenses	1,359	917
Amortisation of intangible assets - computer software	1,477	1,302
Profit on disposal of property, plant and equipment	36	(11)
Rentals under operating leases	2,661	2,942
Share based payments (including social security costs)	212	641
Amortisation of intangible assets excluding computer software	5,049	6,432
Impairment of goodwill and intangibles	-	8,561
Adjusting items (included in operating expenses)	1,443	4,573
Gain on sale of subsidiary	(1,906)	-
Foreign exchange gain (including forward currency contracts)	(55)	(229)
Fees payable to the auditors for the audit of the Company and consolidated financial statements	87	117
Fees payable to the auditors and their associates for other services:
- The audit of the Company's subsidiaries pursuant to legislation	154	183
- Other assurance services	-	74
- Tax compliance services	-	5
- Audit related other services	15	-

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

Fees payable to the auditors in the year ended 30 June 2018 were due to PricewaterhouseCoopers LLP.

b) Adjusting items:

	Year ended 30 June 2019 £'000	Year ended 30 June 2018 £'000
Costs relating to successful and aborted acquisitions, disposals and integration	74	721
Increase in liability for deferred consideration	489	330
	563	1,051
Impairment of loan receivable	331	-
Costs associated with the change in CEO	549	-
Adjusting items relating to property portfolio review and IT infrastructure transformation	-	3,090
Restructuring and rationalisation costs	-	432
Other adjusting items (included in operating expenses)	1,443	4,573
Amortisation of intangible assets excluding computer software	5,049	6,432
Impairment of goodwill and intangible assets (note 12)	-	8,561
Total adjusting items (classified in profit before tax)	6,492	19,566

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

Successful and aborted acquisition, disposal and integration costs relate to transaction fees on the acquisition of The Training Consultants Limited and the disposal of International Company Profile FZ LLC. The increase in the liability for deferred consideration relates to adjustments to deferred consideration in respect of SWAT Group Limited ('SWAT'), Interactive Medica Limited, The Training Consultants Limited and Evantage Consulting Limited. The impairment of loan receivable relates to the write off of the receivable from the joint venture Axco Digital Insurer Ratings PTE. Ltd (Singapore) in the year.

6. Operating expenses

	Year ended 30 June 2019			Year ended 30 June 2018
	Cost of sales £'000	Administration £'000	Total £'000	Cost of sales £'000	Administration £'000	Total £'000
Operating expenses before depreciation, amortisation and impairment	93,626	4,612	98,238	90,845	4,468	95,313
Depreciation of property, plant and equipment	1,359	-	1,359	917	-	917
Amortisation of intangible assets - computer software	1,477	-	1,477	1,302	-	1,302
Operating expenses before amortisation of intangible assets excluding computer software and impairment	96,462	4,612	101,074	93,064	4,468	97,532
Amortisation of intangible assets - databases	1,745	-	1,745	1,933	-	1,933
Amortisation of intangible assets - customer relationships	1,501	-	1,501	2,038	-	2,038
Amortisation of intangible assets - brands	1,185	-	1,185	1,272	-	1,272
Amortisation of intangible assets - publishing rights and titles	618	-	618	1,189	-	1,189
Goodwill and intangibles impairment charge (note 12)	-	-	-	-	8,561	8,561
Other adjusting items (note 5)	-	1,443	1,443	-	4,573	4,573
Operating expenses	101,511	6,055	107,566	99,496	17,602	117,098

7. Net finance costs

	Year ended 30 June 2019 £'000	Year ended 30 June 2018 £'000
Finance costs comprise:
Interest payable on bank loans and overdrafts	1,921	1,804
Unwinding of the discount on royalty payments receivable	(127)	-
Amortisation of capitalised loan arrangement fees	309	165
	2,103	1,969

Included within amortisation of capitalised loan arrangement fees is £143,000 relating to the write off of the remaining fees on the 2015 debt facility following its renewal in July 2019.

8. Taxation

	Year ended 30 June 2019 £'000	Year ended 30 June 2018 Restated £'000
Current tax
UK corporation tax at current rates on UK profits for the year	2,163	2,208
Adjustments in respect of previous years	(106)	63
	2,057	2,271
Foreign tax	1,153	1,114
Adjustments in respect of previous years	350	(41)
Total current tax	3,560	3,344
Deferred tax credit	(41)	(765)
Effect on deferred tax of change in corporation tax rate	-	41
Total deferred tax	(41)	(724)
Taxation	3,519	2,620

Factors affecting the tax charge for the year:

The effective tax rate is higher (2018: higher) than the average rate of corporation tax in the UK of 19.00% (2018: 19.00%). The differences are explained below:

	Year ended 30 June 2019 £'000	Year ended 30 June 2018 Restated £'000
Profit before tax	14,712	2,275
Profit before tax multiplied by the average rate of corporation tax in the year of 19.00% (2018: 19.00%)	2,795	432

Tax effects of:

Impairment of goodwill not deductible for tax purposes	-	1,627
Foreign tax rate differences	384	384
Adjustment in respect of previous years	244	22
Other items not subject to tax	96	114
Effect on deferred tax of change of corporation tax rate	-	41
Taxation	3,519	2,620

It was announced on 23 November 2016 that the UK corporation tax rate will be reduced from 19% to 17% from 1 April 2020. 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 23.9% (2018 restated: 24.2%).

Included in other comprehensive income are a tax charge of £8,000 (2018: £80,000) and a tax credit of £99,000 (2018: £42,000 charge) relating to the interest rate swaps and net investment hedges respectively.

The tax effect of adjusting items as disclosed in note 10 is a credit of £475,000 (2018: £1,876,000).

9. Dividends

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

	Year ended 30 June 2019 Pence per share	Year ended 30 June 2018 Pence per share	Year ended 30 June 2019 £'000	Year ended 30 June 2018 £'000
Final dividends recognised as distributions in the year	4.8	4.6	4,200	4,019
Interim dividends recognised as distributions in the year	4.1	4.0	3,587	3,495
Total dividends paid			7,787	7,514
Final dividend proposed	5.0	4.8	4,375	4,194

10. Earnings per share

Adjusted earnings per share has been calculated using adjusted earnings calculated as profit after taxation and non-controlling interests but before:

· amortisation of intangible assets excluding computer software;

· impairment of goodwill and intangible assets;

· adjusting items (included in operating expenses);

· share of loss of equity accounted investment; and

· other income - gain on sale of subsidiary.

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

	Year ended 30 June 2019 £'000	Year ended 30 June 2018 Restated £'000
Earnings from continuing operations for the purpose of basic earnings per share	11,149	(392)

Add/(remove):
Amortisation of intangible assets excluding computer software	5,049	6,432
Impairment of goodwill and intangibles	-	8,561
Adjusting items (included in operating expenses)	1,443	4,573
Other income - gain on sale of subsidiary	(1,906)	-
Tax effect of adjustments above	(475)	(1,876)
Adjusted earnings for the purposes of adjusted earnings per share	15,260	17,298

	Number	Number
Weighted average number of ordinary shares for the purposes of basic and adjusted earnings per share	87,513,422	87,379,469

Effect of dilutive potential ordinary shares:
Future exercise of share awards and options	719,509	645,240
Weighted average number of ordinary shares for the purposes of diluted and adjusted diluted earnings per share	88,232,931	88,024,709
Basic earnings per share	12.74p	(0.45)p
Diluted earnings per share	12.64p	(0.45)p
Adjusted basic earnings per share ('Adjusted Earnings Per Share')	17.44p	19.80p
Adjusted diluted earnings per share	17.30p	19.65p

11. Disposal - International Company Profile FZ LLC

On 18 July 2018 Wilmington Publishing and Information Limited (a wholly owned subsidiary of Wilmington plc) sold the trade and assets of International Company Profile ('ICP'), including its 100% shareholding in International Company Profile FZ LLC, the statutory entity incorporated in Dubai, to its management team. The sale was effective from 1 July 2018.

ICP was the credit reporting business previously held within the Risk & Compliance division and was classified as held for sale at 30 June 2018.

The profit on disposal of International Company Profile was £1,906,000 which is calculated as follows:

	£'000

Sale price	300
Royalty payments	2,700
Undiscounted consideration	3,000
Discount of royalty payments	(606)
Fair value of consideration	2,394

Property, plant and equipment	9
Intangible assets	58
Cash	240
Trade receivables	100
Other receivables	81
Net assets disposed of	488

Profit on disposal of ICP	1,906

The sale price for ICP was £3,000,000, which includes future royalty payments of £2,700,000 which have been accounted for as deferred consideration. The deferred consideration receivable is accounted for as a financial asset at amortised cost.

In accordance with IFRS 3: Business combinations and IAS 10: Consolidated Financial Statements, the royalty payments have been accounted for as consideration as part of the disposal transaction because the business sale agreement and royalty licence agreement were entered into at the same time, to achieve the same overall commercial effect, and both arrangements were dependent on each other.

At 30 June 2019 the fair value of the future royalty payments was £2,221,050. The royalty payments are due to be paid in instalments from 18 July 2020 to 18 July 2023.

12. Goodwill

Cost	£'000
At 1 July 2017	110,188
Additions	588
Fair value adjustment	(762)
Exchange translation differences	(190)
At 30 June 2018	109,824
Exchange translation differences	432
At 30 June 2019	110,256

Accumulated impairment
At 1 July 2017	24,160
Impairment	8,561
At 30 June 2018 and 30 June 2019	32,721

Net book amount
At 30 June 2019	77,535
At 30 June 2018	77,103
At 30 June 2017	86,028

13. Intangible assets


	Computer software £'000	Databases £'000	Customer relationships £'000	Brands £'000	Publishing rights and titles £'000	Total £'000
Cost
At 1 July 2017	9,946	16,143	24,355	13,341	30,289	94,074
Additions	1,934	-	-	-	-	1,934
Acquisitions	583	611	514	348	-	2,056
Disposals	(2,161)	-	-	-	-	(2,161)
Reclassification to held for sale	(111)	-	-	-	-	(111)
Exchange translation differences	2	(13)	(67)	(56)	-	(134)
At 30 June 2018	10,193	16,741	24,802	13,633	30,289	95,658
Additions	2,324	-	-	-	-	2,324
Acquisitions	-	-	-	-	104	104
Disposal	(326)	-	-	-	-	(326)
Exchange translation differences	(17)	30	167	124	-	304
At 30 June 2019	12,174	16,771	24,969	13,757	30,393	98,064

Accumulated amortisation
At 1 July 2017	7,004	10,110	14,987	4,188	25,874	62,163
Charge for the year	1,302	1,933	2,038	1,272	1,189	7,734
Acquisitions	528	-	-	-	-	528
Disposals	(2,161)	-	-	-	-	(2,161)
Reclassification to held for sale	(53)	-	-	-	-	(53)
Exchange translation differences	22	5	71	36	8	142
At 30 June 2018	6,642	12,048	17,096	5,496	27,071	68,353
Charge for the year	1,477	1,745	1,501	1,185	618	6,526
Disposals	(251)	-	-	-	-	(251)
Exchange translation differences	(18)	17	123	101	-	223
At 30 June 2019	7,850	13,810	18,720	6,782	27,689	74,851

Net book amount
At 30 June 2019	4,324	2,961	6,249	6,975	2,704	23,213
At 30 June 2018	3,551	4,693	7,706	8,137	3,218	27,305
At 30 June 2017	2,942	6,033	9,368	9,153	4,415	31,911

	Land, freehold and leasehold buildings £'000	Fixtures and fittings £'000	Computer equipment £'000	Motor vehicles £'000	Total £'000
Cost
At 1 July 2017	3,161	5,239	4,292	534	13,226
Additions	2,122	436	787	68	3,413
Acquisitions	-	119	123	-	242
Disposals	-	(1,760)	(1,289)	(142)	(3,191)
Reclassification to held for sale	-	-	(11)	-	(11)
Exchange translation differences	-	(1)	(2)	-	(3)
At 30 June 2018	5,283	4,033	3,900	460	13,676
Additions	248	324	302	135	1,009
Acquisitions	-	-	13	-	13
Disposals	-	(786)	(477)	(198)	(1,461)
Exchange translation differences	-	14	7	-	21
At 30 June 2019	5,531	3,585	3,745	397	13,258
Accumulated depreciation
At 1 July 2017	820	3,956	3,767	239	8,782
Charge for the year	142	649	468	90	1,349
Disposals	-	116	114	-	230
Acquisitions	(3)	(1,760)	(1,289)	(95)	(3,147)
Reclassification to held for sale	-	-	(2)	-	(2)
Exchange translation differences	-	-	1	-	1
At 30 June 2018	959	2,961	3,059	234	7,213
Charge for the year	325	491	452	91	1,359
Disposals	-	(693)	(467)	(153)	(1,313)
Acquisitions	-	-	13	-	13
Exchange translation differences	-	11	8	-	19
At 30 June 2019	1,284	2,770	3,065	172	7,291
Net book amount
At 30 June 2019	4,247	815	680	225	5,967
At 30 June 2018	4,324	1,072	841	226	6,463
At 30 June 2017	2,341	1,283	525	295	4,444

14. Property, plant and equipment

Included in land, freehold and leasehold buildings is £970,000 (2018: £970,000) of non-depreciated land.

Depreciation of property, plant and equipment is charged to operating expenses within the Income Statement.

15. Trade and other receivables


	30 June 2019 £'000	30 June 2018 £'000
Current
Trade receivables	23,058	22,869
Prepayments and other receivables	6,054	5,364
	29,112	28,233

16. Trade and other payables


	30 June 2019 £'000	30 June 2018 Restated £'000
Trade and other payables	26,374	26,368
Subscriptions and deferred revenue	30,794	28,384
	57,168	54,752

17. Cash generated from operations


	Year ended 30 June 2019 £'000	Year ended 30 June 2018 Restated £'000
Profit from continuing operations before income tax	14,712	2,275
Gain on sale of subsidiary	(1,906)	-
Adjusting items - excluding depreciation of property plant and equipment	1,443	4,141
Adjusting items - depreciation of property, plant and equipment	-	432
Depreciation of property, plant and equipment included in operating expenses	1,359	917
Amortisation of intangible assets	6,526	7,734
Impairment of goodwill and intangible assets	-	8,561
Loss/(profit) on disposal of property, plant and equipment	36	(11)
Share based payments (including social security costs)	212	641
Share of loss of equity accounted investment	50	-
Finance costs	2,103	1,969
Operating cash flows before movements in working capital	24,535	26,659
(Increase)/decrease in trade and other receivables	(258)	160
Increase/(decrease) in trade and other payables	2,162	(1,154)
Cash generated from operations before adjusting items	26,439	25,665

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

	Year ended 30 June 2019 £'000	Year ended 30 June 2018 Restated £'000
Funds from operations before adjusting items:
Adjusted EBITA (note 3)	21,451	23,810
Share based payments (including social security costs)	212	641
Amortisation of intangible assets - computer software	1,477	1,302
Depreciation of property, plant and equipment included in operating expenses	1,359	917
Profit on disposal of property, plant and equipment	36	(11)
Operating cash flows before movement in working capital	24,535	26,659
Net working capital movement	1,904	(994)
Funds from operations before adjusting items	26,439	25,665
Cash conversion	123%	108%

	Year ended 30 June 2019 £'000	Year ended 30 June 2018 Restated £'000
Free cash flow:
Operating cash flows before movement in working capital	24,535	26,659
Proceeds on disposal of property, plant and equipment	112	55
Net working capital movement	1,904	(994)
Interest paid	(1,943)	(1,934)
Tax paid	(3,943)	(4,738)
Purchase of property, plant and equipment	(1,332)	(3,089)
Purchase of intangible assets	(2,324)	(1,934)
Free cash flow	17,009	14,025

18. Restatement on adoption of IFRS 15

The results for the year ended 30 June 2018 have been restated following the adoption in 2018 of IFRS 15.

In the year ended 30 June 2018 the adjustment to revenue recognised under the new standard resulted in a decrease in revenue of £750,000, profit before tax of £750,000 and profit after tax of £607,000, with these adjustments affecting the Risk & Compliance and Professional divisions, with profit before tax adjustments of £711,000 and £39,000 respectively.

This adjustment resulted in a decrease in basic earnings per share from 0.25p to (0.45p), and a decrease in diluted earnings per share from 0.24p to (0.45p) for the year ended 30 June 2018.

Consolidated balance sheet at 30 June 2018

The consolidated balance sheet at 30 June 2018 has been restated following the adoption in 2018 of IFRS 15.

Deferred revenue at the balance sheet date has increased by £3,638,000 due to changes in the revenue recognition for training courses provided by the Risk & Compliance and Professional divisions.

The deferred tax asset of £458,000 has increased by £518,000 to £976,000 to reflect the cumulative tax adjustment to 30 June 2018.

Consolidated balance sheet at 30 June 2018
	Previously reported £'000	IFRS 15 adjustment - revenue recognition £'000	Restated £'000

Non-current assets: Deferred tax assets	458	518	976
Other non-current assets Current assets: Trade and other receivables	110,984	-	110,984
	28,233	-	28,233
Other current assets	11,106	-	11,106

Total assets	150,781	518	151,299

Current liabilities: Trade and Other Payables	(26,368)	-	(26,368)
Current liabilities: Deferred revenue	(24,746)	(3,638)	(28,384)
Other current liabilities	(2,042)	-	(2,042)
Other non-current liabilities	(55,109)	-	(55,109)

Total liabilities	(108,265)	(3,638)	(111,903)

Net assets	42,516	(3,120)	39,396

Accumulated losses	(10,819)	(3,120)	(13,939)

The only changes to the Statement of Comprehensive Income and Expense and the Statement of Changes in Equity for the year ended 30 June 2018 are to reflect the impact of the restatement of results for the year ended 30 June 2018.

The only changes to the Statement of Cash Flows for the year ended 30 June 2018 are to reflect the impact of the restatement of results for the year ended 30 June 2018 and the balance sheet at 30 June 2018. The adoption of IFRS 15 has not impacted the Group's cash flows or cash balances.

Consolidated balance sheet at 30 June 2017

The consolidated balance sheet at 30 June 2017 has been restated following the adoption in 2018 of IFRS 15.

Deferred revenue at the balance sheet date has increased by £2,888,000 due to changes in the revenue recognition for training courses provided by the Risk & Compliance and Professional divisions.

The deferred tax asset of £820,000 has increased by £375,000 to £1,195,000 to reflect the cumulative tax adjustment to 30 June 2017.

Consolidated balance sheet at 30 June 2017
	Previously reported £'000	IFRS 15 adjustment - revenue recognition £'000	Restated £'000

Non-current assets: Deferred tax assets	820	375	1,195
Other non-current assets Current assets: Trade and other receivables	122,383	-	122,383
	28,444	-	28,444
Other current assets	10,687	-	10,687

Total assets	162,334	375	162,709

Current liabilities: Trade and Other Payables	(25,357)	-	(25,357)
Current liabilities: Deferred revenue	(26,973)	(2,888)	(29,861)
Other current liabilities	(3,034)	-	(3,034)
Other non-current liabilities	(57,005)	-	(57,005)

Total liabilities	(112,369)	(2,888)	(115,257)

Net assets	49,965	(2,513)	47,452

Accumulated losses	(4,051)	(2,513)	(6,564)

19. Events after the reporting period

Extension of debt facilities

On 4 July 2019, the Company signed a revised revolving credit facility that extends its existing facility from 1 July 2020 to 3 July 2023, with an option to further extend to 3 October 2024. The revised facility is with Barclays Bank PLC, Royal Bank of Scotland plc and The Governor and Company of the Bank of Ireland and is on materially the same terms as the previous arrangement. The initial limit on the revised facility is £65m and the agreement provides for an accordion option whereby the facility limit may be increased by up to £35m to a total commitment of £100m.

END

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