Interim Management Statement

RNS Number : 4573H

Wilmington Group Plc

05 November 2008

 



                                                5 November 2008

WILMINGTON GROUP PLC

INTERIM MANAGEMENT STATEMENT

At today's Annual General Meeting of Wilmington Group plc, David Summers, Chairman, will make reference to the following statement regarding the financial position and current trading performance:

Trading performance in the three months to 30 September 2008, the first quarter of our financial year, was broadly in line with the board's expectations despite a deteriorating economic backdrop.  Underlying revenue from continuing operations* was 4% ahead of the same period in the prior year.

Adjusted profits from continuing operations** were ahead of the prior year.  

Since we announced our results for the year ended 30 June 2008, the economic outlook has deteriorated. Consequently we felt it was appropriate to initiate a thorough review across the Wilmington Group to examine how we can proactively maximise productivity and margins and, where appropriate, reduce our cost base.

In addition, the board had decided to sell the music information business Muze and our HPCi business, which published the magazines 'Soap, Perfumery and Cosmetics', 'Manufacturing Chemist' and 'Cleanroom Technology' which were not core to our strategy of serving the information and training requirements of professional markets.  

Following these disposals we have reorganised the Wilmington Business Information division and consolidated the management of its assets with the Waterlow Legal and Regulatory division. This creates a professional information business that accounts for approximately 47% of Wilmington Group turnover and contributes nearly 60% of Group operating profits before central overheads.

A number of specific cost and staff savings have been identified across the Group. As a result of this action we have created a more effective operational structure. However, non-recurring costs of approximately £700k will be incurred as a result of the proposed changes.

We announced on 28 July 2008 that the company had received an approach which subsequently did not result in an offer being made for the company.  During the first quarter the company incurred approximately £600k of abortive transaction costs.

Outlook:

We expect trading conditions to remain challenging.

Nevertheless, we are confident that our publishing and information businesses are robust and should perform in line with the prior year.

Whilst many of our training businesses are underpinned by professional regulations, discretionary expenditure by our clients is under pressure. Towards the end of our first quarter we have seen a reduction in some course bookings on a like for like basis; as indicated the company is implementing a cost reduction programme to align its cost base with current market conditions and our outlook for 2009.  The reduction in course bookings is partially mitigated by the Matchett Group, which has delivered its anticipated contribution in our first quarter when the bulk of its profits for the financial year are made. We also expect that our investment in Singapore will reduce this financial year and anticipate a modest net profit from Singapore. 

It is always difficult to predict the outcome so early in the year and in these very uncertain times it is clearly even more problematic. However, given the cost savings being implemented and the momentum from recent acquisitions the Board currently expects the Group overall to report underlying performance from continuing operations marginally ahead of last year.

We remain a cash generative business with a modest level of gearing and have committed bank facilities until 2012 that will enable us to continue to underpin the development of our business with further bolt on acquisitions.  Our business is resilient with strong management teams which will enable the company to continue to grow and to grasp opportunities as they arise.  

David Summers

Chairman

5 November 2008

* Excludes revenue contribution from acquisitions (Matchett and APIS) and revenue contribution from disposals (Muze and HPCi ).

** Pre-exceptional items and excluding any earnings contribution from disposals (Muze and HPCi ).

 - Ends - 

Enquiries:

Wilmington Group PLC

Charles Brady, Chief Executive                                                         0207 422 6800

Weber Shandwick Financial

Nick Oborne / Louise Robson / Clare Perks                                     0207 067 0700

Numis Securities                    

James Serjeant                                                                                  0207 260 1309

RBS Hoare Govett 

Sara Hale                                                                                            0207 678 8000

Notes to Editors

Wilmington Group plc is one of the UK's leading providers of information and training for professional business markets. The Group provides training, arranges industry events and publishes magazines, directories, databases and special reports focused primarily on professional markets. Capitalised at approximately £120 million, Wilmington floated on the London Stock Exchange in 1995.

 

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