Interim Results

RNS Number : 9347P
Wilmington PLC
24 February 2016
 

24 February 2016

WILMINGTON PLC

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

 

Financial Results for the six months ended 31 December 2015

 

Wilmington plc, the provider of information, education and networking services in Risk & Compliance, Finance, Legal, and Insight leader in a number of chosen industries, today announces its interim results for the six months ended 31 December 2015.

 

Financial Highlights

-     Group revenues for the period up 7% at £49.4m (2014: £46.1m), Underlying revenue1 up 2%

-     Adjusted EBITA2 increased 7% to £9.7m (2014: £9.1m)

-     Adjusted EBITA margins3 at 19.7% (2014: 19.8%)

-     Adjusted Profit before Tax4 up 10% to £8.9m (2014: £8.1m)

-     Adjusted Earnings per Share5 up 11% at 7.93p (2014: 7.17p)

-     Basic Earnings per Share up to 3.94p (2014: 3.20p)

-     Profit before tax at £4.5m (2014: £3.7m)

-     Deferred revenue is up 6% to £21.3m (2014: £20.1m)

-     Interim dividend increased 3% to 3.8p (2014: 3.7p), in line with progressive dividend policy

 

Operational Highlights

-     Good revenue and contribution growth from Risk & Compliance division (revenue up 5%)

-   Strong performance from Finance; revenue up 16% (underlying up 8%) aided by a maiden contribution from Financial Research Associates ('FRA') events

-     Legal revenues down 3% reflecting ongoing structural change in Legal CLE market  

-     Insight revenue up 10% driven by contribution from FRA Healthcare events

-     FRA acquired on 6 July 2015; contributed £2.9m to overall revenue

-     Subscription and repeatable information sales at 76% of total revenue (2014: 76%)

-     The proportion of international revenues is growing; now 42% of total revenue (2014: 38%)

-     Finance charges down 22% benefiting from newly extended loan facility

-     Disposal of Media businesses on 31 July 2015 illustrates ongoing focus on areas with greater potential

-     Acquisition of Wellards adds online education capability for the Insight division

 

Current Trading

-     As in previous years Wilmington remains second half weighted and outlook for 2015/16 remains unchanged

-     FRA expected to be earnings enhancing in the first year

 

Pedro Ros, Chief Executive Officer, commented:

 

'The acquisitions of FRA and Wellards, as well as being consistent with our strategy, have enhanced our offerings and are supporting our objective of building a more integrated and international business. As our knowledge-based business model evolves, client communities remain at the centre of everything we do. We continue to drive the development of innovative products and services, and to focus on areas with the greatest potential for growth.'

 

Mark Asplin, Chairman, commented:

 

'Overall, the new financial year has started solidly. We continue to see tighter regulatory control and more complex legislation implemented in many of our key markets which in turn continues to drive the demand for our products and services globally.'

 

1 Underlying revenue - Group Revenue excluding the results of FRA and the Media businesses (disposed on 31 July 2015)

2 Adjusted EBITA - see note 5

3 Adjusted EBITA margins - Adjusted EBITA divided by Revenue

4 Adjusted Profit before Tax - see note 5

5 Adjusted Earnings per Share - see note 11

 

For further information please contact:

 

Wilmington plc

020 7422 6800

Pedro Ros, Chief Executive Officer

Anthony Foye, Chief Financial Officer

 

 

 

FTI Consulting 

020 3727 1000

Charles Palmer / Emma Appleton

 

 

 

Chairman's Statement

 

I am pleased to present my report on Wilmington's results for the six months ended 31 December 2015.

 

Wilmington has made a solid start to the new financial year recording good revenue and profit growth with notably strong growth coming from the Finance division. As previously reported, this growth was offset by continued declining revenues from parts of the Legal division and by a mixed start from Insight. Our Risk & Compliance division continued to grow solidly despite a very strong comparator period.

 

Overall revenue grew £3.3m (7%) to £49.4m (2014: £46.1m) and Adjusted EBITA grew £0.6m (7%) to £9.7m (2014: £9.1m). In underlying terms adjusting for the acquisition of Financial Research Associates ('FRA') which was acquired on 6 July 2015, and the disposal of the Media businesses on 31 July 2015, revenue was up by 2% and Adjusted EBITA was up by 5% (£0.4m). FRA contributed £2.9m to revenue in the period.

 

EBITA margins at 19.7% were broadly flat on 2014 (19.8%) reflecting the impact of lower first half margins from FRA which historically has had a greater second half year weighting in both revenue and contribution terms. Adjusting for FRA and the Media businesses underlying margins again showed further improvement up 70 basis points ('bpts') to 20.5% (2014: 19.8%).

 

We have again reduced finance costs which include interest charges and associated costs, reflecting the benefits of the recent £65m loan refinancing exercise in July 2015 and Wilmington's strong cash flow. Finance costs were down 22% (£0.2m) to £0.8m despite the initial consideration of £8.4m paid on the acquisition of FRA during the period. Net debt at the end of December 2015 was £36.6m, up by only £2.0m on 31 December 2014 (£34.6m), and is a testament to the strong operational cash flow of the business.

 

The growth in Adjusted EBITA combined with reduced finance costs translated into Adjusted Profit before Tax up 10% (£0.8m) to £8.9m (2014: £8.1m).

 

Business Vision and Strategy

 

Our vision which acts as our guide and underpins our strategy is:

 

'To be the recognised knowledge leader and partner of choice for information, education and networking in Risk & Compliance, Finance and Legal as well as the Insight leader in a number of chosen industries'.

 

Wilmington operates a knowledge-based model and structure increasingly focussed on engaging key communities. This structure will maximise Wilmington's opportunities to help its clients to meet their information, education and networking requirements. The enhanced focus is reflected in the disposal of certain media assets from its Insight division, and in the acquisitions of FRA and JMH Publishing Limited (trading as 'Wellards'). The acquisition means we now have information, education and networking capabilities for all four of our knowledge areas.

 

Wilmington is actively investing both organically and through acquisition in the areas we see as providing the greatest potential in terms of profitable long term growth: risk and compliance, finance and healthcare. In particular we are looking at ways to leverage our existing technology, promote our stronger established brands, increase our international footprint and develop in markets that we see as offering sustainable growth opportunities.

 

Acquisitions

 

Wilmington acquired Financial Research Associates ('FRA'), a leading US conference and networking provider of specialist events in healthcare and finance, on 6 July 2015 for an initial consideration of $13.0m (£8.4m). The maximum consideration is up to $20.6m (£13.2m) depending on the achievement of challenging revenue and performance targets over a two year term. The acquisition of FRA is consistent with our strict investment criteria and enhances our networking capabilities in Finance and Insight.

 

On 18 January 2016 Wilmington acquired JMH Publishing Limited, a leading UK provider of specialist and accredited online education for the healthcare industry which owns the respected trading brand 'Wellards', for net cash consideration of £3.9m. This acquisition provides education capability to our Insight division.

 

Wellards, established in 1990, is based in Kent, England and provides the industry standard for effective and comprehensive NHS information and training. Wellards runs over 70 online courses with over 25,000 registered users servicing the needs of UK pharmaceutical and Medtech commercial staff. This addition is consistent with Wilmington's strategy of acquiring complementary businesses with high repeat revenues (70% of its revenue is subscription based with over 90% renewal rates) and strong, cash generative income streams in Wilmington's key communities.

 

Wilmington has been acquisitive in the past and we will continue to review opportunities to enhance growth and to add expertise through selective earnings enhancing acquisitions consistent with our strategy. 

 

Financial objectives

 

We monitor eight key financial and operational objectives including: Adjusted EBITA, Profit before Tax, Operating Margin, Earnings per Share, Free Cash Flow, Cash Conversion, Return on Equity and consistent and repeatable revenue streams. We will continue to maintain a high proportion of our revenue derived from consistent and repeatable revenue streams and in this six month period revenue from subscriptions and repeatable revenue were 76% of Group turnover (2014: 76%). In addition, we will actively seek to increase our income streams from outside the UK where we see good prospects for long term sustainable growth in many of the major professional markets we operate in. Revenue from outside the UK has continued to increase and now represents 42% of total revenue compared to 38% last year.

 

Board Changes

 

As reported in September 2015, Paul Dollman joined the Board as a Non-Executive Director on 16 September 2015 and succeeded Terry Garthwaite as Chairman of the Audit Committee in November 2015. As announced on 17 December 2015, Charles Brady retired from the Board of Wilmington plc on 31 December 2015 after 16 years as a Director of the Company.

 

Our People

 

As a digital information, education and networking business, operating in dynamic and competitive markets, we are fundamentally reliant on the quality and professionalism of our people. I would once again like to express my own and my fellow Board members' appreciation of the hard work and dedication of all our people.

 

Balance Sheet

 

Net debt, which includes cash and cash equivalents, bank loans and bank overdrafts, was £36.6m (2014: £34.6m) an increase of £2.0m. Strong underlying operating profits and good cash conversion have offset the acquisition of FRA and helped towards the relatively low debt increase. Cash conversion was up at 85% in the first six months, (2014: 79%) in what is a traditionally weaker period in the financial year.

 

Group net debt at 31 December 2015 represented just over half of our debt and overdraft facility of £65m. This facility was extended on 1 July 2015 for five years on more beneficial terms.

 

Dividend

 

I am proud of the Group's record of maintaining its dividend over the recent years and the resumption in 2013/14 of a progressive dividend. The progressive dividend policy remains and reflects our confidence in the vision and resilience of our business models. I am pleased to confirm that the interim dividend for this year will be 3.8p (2014: 3.7p) per share, an increase of 3% on last year. It is the Board's intention to maintain its progressive dividend policy whilst ensuring that a suitable dividend cover of at least two times Adjusted Earnings per Share compared to the dividend per share is maintained.

 

The interim dividend of 3.8p per share will be paid on 7 April 2016 to shareholders on the share register as at 18 March 2016.

 

Outlook and Current Trading

 

The new financial year has started solidly. We continue to see tighter regulatory control and more complex legislation implemented in many of our key markets which in turn continues to drive the demand for our products and services globally.

 

The Group has articulated its vision and ambition and is well positioned to move to the next stage in its development and capitalise on the many opportunities that are presenting themselves both organically and via acquisition. The board will continue to review opportunities to add additional growth and expertise through selective earnings enhancing acquisitions consistent with our strategy.

 

As we move into the second half, we are on target to deliver another good set of results for the full year, in line with our expectations.

 

 

Mark Asplin, Chairman

 

 

Chief Executive Officer's Review

 

Business Review

 

Wilmington manages and reports its business by reference to four knowledge-based divisions; Risk & Compliance, Finance, Legal and Insight. The recent acquisition of FRA contributes to both the Finance and Insight divisions.

 

Risk & Compliance (36% of Group revenue, 49% of Group contribution)

 

This division provides in depth regulatory and compliance accredited training and information, market intelligence, and analysis. It focuses on the international financial services and international insurance markets as well as the UK pensions industry and contains our International Compliance Training ('ICT'), International Compliance Association ('ICA'), Axco, Pendragon, International Company Profile ('ICP'), Compliance Week and Inese businesses. The main community that uses our offerings are Risk and Compliance officers globally. This is an area which has demonstrated strong underlying organic growth which should be enhanced as we combine the various opportunities into an integrated offering. It also has the highest exposure to International markets of all our divisions. 

 

 

2015

2014

Movement

 

£'m

£'m

£'m

%

Revenue

17.6

16.8

0.8

5

Contribution

5.6

5.3

0.3

6

Margin %

32

32

 

 

 

Divisional revenue grew £0.8m (5%) and by 5% on a constant currency basis.

 

Our compliance public courses, aimed at Compliance professionals in many industries and geographies, grew by 30%, and our online training revenue grew by over 50% (albeit from a relatively small base). This continued strong performance reflects general demand for accredited compliance training and qualifications supplied globally by ICT and ICA respectively. ICT provides accredited training programmes in anti-money laundering, compliance and financial crime and has developed compliance training programmes in the Banking, Oil & Gas, Pharmaceuticals, Betting and Gaming sectors. This increase in public courses and online training was offset by fewer large one off induction assignments which had driven the strong comparator period last year.

 

ICA is also relaunching its professional membership services in April 2016, adding more content, networking events and other professional support services to compliance professionals to capitalise on the increasing international demand for membership.

 

Growth in compliance continues to be constrained to some extent by the availability of qualified trainers although we have been consistently investing in our own trainer induction and conversion programmes. We still see many opportunities to launch new compliance products in most regulated markets and are focusing our efforts on an industry by industry basis. We have invested £0.4m during the period in additional trainers, resources and programmes to support the increasing demand. Overall, our compliance training businesses (which represent c.40% of the division's revenue) grew 1% in the period.

 

Compliance Week, our US governance, risk and compliance events and information business, saw revenue up 8%. We are investing in new content and technology to reposition the business as a global governance, risk and compliance ('GRC') resource centre and events business collaborating with other parts of Wilmington. As part of this globalisation strategy we already hold Compliance Week Annual Conferences co-attended with our ICT and ICA businesses in Washington, Brussels and now in Dubai.

 

Axco, the industry leading provider of insurance market intelligence, regulation and compliance information, reported a 6% revenue growth helped by the continued success of its new digital subscription products and the roll out of new insight products which enhanced our analytical insurance offerings.

 

Pendragon, which provides compliance information and workflow tools for the UK pensions markets, maintained its market leading position. We are completing the beta testing of the new pension legislation platform, 'New Perspective', which continues to see strong interest from existing and potential new clients.

 

ICP, which provides company credit reports aimed at credit risk managers, had a strong start to the year with revenue up 11% benefiting from the pipeline of orders reported at 30 June 2015 and continued strong growth, in particular in the Middle East and Africa.

 

Inese, our leading insurance information and events business serving the Spanish Insurance market and, increasingly, clients in South American markets, grew revenue by an encouraging 11% in constant currency terms.

Overall divisional contribution increased by £0.3m (6%) to £5.6m (2014: £5.3m) and 9% on a constant currency basis. Margins were up slightly reflecting, inter alia, the investment in infrastructure for our ICT compliance training business to support its rapid revenue growth more than offset by growth from our higher margin information businesses.

 

Finance (24% of Group revenue, 21% of Group contribution)

 

This division includes Wilmington's financial training businesses including AMT and Mercia and since its acquisition the finance networking events of FRA. The Finance division provides expert and technical training, networking and support services to professionals in corporate finance, hedge funds, mutual funds, private equity, and capital markets and to qualified accountants in the UK in both the profession and industry. This division primarily serves tier 1 banks, the international financial services industry, and small to medium sized professional accountancy firms.

 

 

2015

2014

Movement

 

£'m

£'m

£'m

%

Revenue

11.6

10.0

1.6

16

Contribution

2.4

2.3

0.2

8

Margin %

21

23

 

 

 

Finance continued its strong revenue growth with an increase of £1.6m (16%) compared to 2014 with FRA contributing £0.8m to revenue. Adjusting for the acquisition of FRA the underlying growth was a pleasing 8%. Organic growth drivers included continued strong demand from tier 1 banks for face-to-face graduate induction training, and the beneficial impact of the additional UK fiscal budget in July 2015 which led to increased demand for Mercia technical products and services.

 

AMT, which forms an important part of the division and delivers most of its revenue and contribution in the summer months, had another good start in particular from its bank induction training programmes in Hong Kong and the US. AMT continued to win market share in a very competitive market based on its reputation built up over many years for 'best in class' bespoke training and heavy investment in its e-delivery and support systems and content. AMT, like other high quality training businesses, is affected by competition for expert trainers.

 

Mercia, our accountancy training business, had another excellent first six months. As mentioned above, Mercia has benefited from a second UK fiscal budget in July 2015, but also benefited from demand for specialist courses surrounding the recent changes to UK GAAP.

 

The FRA finance networking events, which are second half weighted, did see a reduction to the average number of delegates compared to the recent past reflective of the current pressures on the wider equity capital markets. The second half weighting should help to improve the margin in the full year.

 

Overall divisional contribution was 8% (£0.2m) ahead of last year at £2.4m (2014: £2.3m) but this included a first half loss on FRA finance networking events of £0.3m. Adjusting for FRA and currency underlying profits are up £0.5m and underlying margins were up to 26% from 23% in 2014.

 

Legal (15% of Group revenue, 6% of Group contribution)

 

The Legal division provides a range of training, professional support services and information including Continuing Legal Education ('CLE'), expert witness training, databases and magazines to legal professionals. The business, which formerly offered a wide range of services, is now focussing on two basic offerings; providing law services to lawyers in the profession and industry ('Law for lawyers') and law services for non-lawyers ('Law for non-lawyers').

 

 

2015

2014

Movement

 

 

£'m

£'m

£'m

%

Revenue

7.6

7.9

(0.3)

(3)

Contribution

0.6

0.7

(0.1)

(5)

Margin %

8

9

 

 

 

 

 

 

 
           

 

The division saw revenue reduce by 3% (£0.3m). This reduction reflects the challenging market conditions previously reported surrounding reduced demand for face-to-face training and the proposed changes to the Legal professional CLE rules. There were, however, areas of the legal market which have shown continued consistent growth including Bond Solon (Law for non-lawyers), which saw revenue grow by 17% and legal training in Scotland which recorded a revenue increase of £0.1m.

 

Despite the ongoing challenging market conditions the division again, to a large extent, mitigated the revenue impact and its contribution dropped to £0.6m (2014: £0.7m), while its margins dropped from 9% in 2014 to 8%.

 

Insight (25% of Group revenue, 24% of Group contribution)

 

The Insight division increasingly provides analysis and clarity to customer-focused organisations, enabling them to better understand and connect with their markets. This division includes our UK healthcare information businesses, our French language medical news agency, our data suppression and charity information businesses and the healthcare networking events of FRA since acquisition.

 

 

2015

2014

Movement

 

£'m

£'m

£'m

%

Revenue

12.5

11.4

1.1

10

Contribution

2.8

2.6

0.2

9

Margin %

22

23

 

 

 

Revenue was up 10% (£1.1m) and, adjusting for adverse currency movements, the Media business disposal and the FRA contribution of £1.9m, underlying revenue was down 2% compared to 2014. FRA's flagship conference RISE Nashville has seen very strong delegate and sponsorship sales leading up to the event in March 2016. This bodes well for the second half year performance.

 

The healthcare division, which makes up 70% of this division's revenue, had a mixed start to the year; there was a marked reduction in lower margin marketing data and mailing service sales but also a loss of some higher margin pharma sales caused by stronger pan European competition.

 

NHiS, the provider of business intelligence and data analysis to the pharmaceutical industry, is still seeing more traction from one off assignments which focus on offering analyst led insightful information albeit at lower margins as well as longer term subscription based contacts. The latter is reflected in deferred revenue up 61% (£0.4m) at 31 December 2015 which is very encouraging for the remainder of the year.

 

APM, our French language medical news agency, saw good underlying growth of 3% but was adversely affected by the weakness of the Euro.

 

As expected, the data suppression and charities businesses were marginally down in revenue terms compared to last year, and the focus continues to be on delivering higher margins through ongoing reorganisation and the review of marginal business operations.

 

Benefiting from a contribution of £0.5m from FRA, overall contribution increased by 9% (£0.2m) to £2.8m (2014: £2.6m). Adjusting for FRA and the adverse impact of currency (which reduced profits by £0.1m) the underlying contribution declined by £0.2m.

 

Group Overheads

 

Group overheads, which include plc Board costs, are comprised of head office salaries, as well as unallocated central overheads, increased by £0.1m to £1.7m.

 

Adjusting Items - included in Operating Expenses

 

Adjusting items of £0.9m (2014: £0.7m) includes £0.2m in respect of a legal claim and associated legal action that Wilmington is pursuing, inter alia, to enforce certain non-compete obligations. Also included is £0.2m relating to the acquisition costs of FRA and £0.5m relating to deferred consideration payable under the FRA acquisition agreement.

 

Adjusting Items - included in Net Finance Costs

 

£0.2m relates to the write off of old capitalised loan arrangement fees and associated legal and professional costs attached to the extension of the loan facility on 1 July 2015 at more favourable rates.

 

Net Finance Costs

 

Net finance costs decreased by 22% to £0.8m from £1.0m benefiting from lower interest rates and associated costs payable under the newly extended finance facility. The strong underlying cash flow offset to a large extent the £8.4m initial payment on the FRA acquisition, which is reflected in a slight increase in debt levels at 31 December 2015 of £36.6m up from £34.6m at 31 December 2014.

 

Pedro Ros, Chief Executive Officer

 

 

Financial Review

 

 

2015

2014

Movement

 

 

£'m

£'m

£'m

%

Revenue

49.4

46.1

3.3

7

Adjusted EBITA

9.7

9.1

0.6

7

Adjusted EBITA %

19.7

19.8

 

 

 

Adjusted Results

 

Reference is occasionally made in this interim report to adjusted results. Adjusted results, in the opinion of the Directors, provide a more comparable indication of the Group's underlying financial performance and exclude adjusting items set out in note 7.

 

Revenue

 

Revenue for the six months to 31 December 2015 increased by £3.3m to £49.4m (2014: £46.1m). Excluding the impact of acquisitions and disposals, underlying revenue was up 2%.

 

Net Operating Expenses

 

Net operating expenses, excluding adjusting items, were £39.6m (2014: £37.0m) up 7%.

 

Amortisation of Intangible Assets

 

Amortisation of intangible assets (excluding computer software) remained constant at £3.0m reflecting six months of amortisation of FRA acquired in July 2015 offset by the disposal of the Media intangible assets and the impact of previous acquisitions fully amortised prior to 30 June 2015.

 

Adjusting Items - included in Operating Expenses

 

Adjusting items of £0.9m (2014: £0.7m) include £0.2m in respect of a legal claim and associated legal action that Wilmington is pursuing, inter alia, to enforce certain non-compete obligations. Also included is £0.2m relating to the acquisition costs of FRA and £0.5m relating to deferred consideration payable under the FRA acquisition agreement.

 

Adjusting Items - included in Net Finance Costs

 

£0.2m relates to the write off of old capitalised loan arrangement fees and associated legal and professional costs attached to the extension of the loan facility on 1 July 2015 at more favourable rates.

 

Net Finance Costs

 

Net finance costs which consist of interest payable and bank charges were down 22% to £0.8m from £1.0m supported by lower interest rate and associated costs from the newly extended loan facility.

 

The Group typically sees lower cash conversion in the first half of its financial year but cash conversion in this period was relatively stronger at 85% compared to 79% last year, helped by the working capital profile of FRA which is second half weighted. This combination of results helped limit overall debt to £36.6m by the period end (2014: £34.6m) despite spending £8.4m on the FRA acquisition. A dividend of £3.5m (2014: £3.1m) has been paid in the period to shareholders.

 

Share Based Payments

 

The share based payment expense halved to £0.3m (2014: £0.6m). The six month period to 31 December 2014 included £0.2m in compensation paid to a former director.

 

Taxation

 

Taxation increased by £0.1m to £1.0m from £0.9m. The increase in the tax expense is due to higher profit offset by a reduction to UK corporation tax rates.

 

The underlying tax rate which ignores the tax effects of adjusting items decreased from 23.7% to 23.0%. This reduction reflects, inter alia, the reduction in UK corporation tax rates during the year offset by higher overseas earnings.

Operating Profit

 

Operating profit increased 18% to £5.6m from £4.7m in 2014. Adjusted EBITA was up 7% at £9.7m (2014: £9.1m) and Adjusted EBITA margins were down 10 bpts to 19.7% (2014: 19.8%) reflecting the first half contribution of FRA which had a lower margin than the group average .

 

Profit before Taxation

 

Profit before taxation was up £0.8m (23%) at £4.5m (2014: £3.7m). Adjusted Profit before Tax increased by 10% (£0.8m) to £8.9m from £8.1m  

 

Earnings per Share

 

Adjusted Earnings per Share increased by 11% to 7.93p (2014: 7.17p).  Basic earnings per share increased to 3.94p from 3.20p and diluted earnings per share increased to 3.90p from 3.15p.

 

Goodwill

 

Goodwill increased by £5.4m to £82.5m since 30 June 2015, resulting from the acquisition of FRA in the period (£4.7m), additions resulting from the purchase of non-controlling interests (£0.2m) and exchange rate movements (£0.5m).

 

Intangible Assets

 

Intangible assets increased since 30 June 2015 by £2.0m reflecting £4.7m of acquisitions in the year, other additions of £0.5m and exchange rate movements of £0.3m offset by amortisation of £3.5m.

 

Property, Plant and Equipment

 

Property, plant and equipment decreased since 30 June 2015 by £0.2m to £4.7m reflecting additions to tangible fixed assets of £0.3m offset by depreciation.

 

Trade and Other Receivables

 

Trade and other receivables increased by £0.3m compared to 31 December 2014 reflecting higher trading activity and the acquisition of FRA.

 

Trade and Other Payables

 

Trade and other payables which include deferred revenue were up £1.2m compared to 31 December 2014 reflecting the increase in subscriptions and deferred revenue. Subscriptions and deferred revenue, which represents revenue received in advance increased by 6% from £20.1m in 2014 to £21.3m. There was strong growth in deferred revenue balances for the ICT and ICA compliance public courses (up 20%), Axco (up 6%), Mercia (up 4%), and NHiS (up 61%) offset by declines in Legal and some timing delays on Compliance Week. FRA contributed £2.1m of deferred revenue at 31 December 2015 and the Media businesses which were sold in the period contributed £0.5m to deferred revenue at 31 December 2014.

 

Net Debt

 

Net debt, which includes cash and cash equivalents, bank loans and bank overdrafts, was £36.6m (2014: £34.6m) an increase of £2.0m. Net debt increased, inter alia, due to the acquisition of FRA for £8.4m offset by the sale of the Media businesses, operating cash flow and stronger cash conversion. The net debt at 31 December 2015 represented just over half of our debt and overdraft facility of £65m.

 

Current Tax Liabilities

 

Current tax liabilities decreased by £0.4m to £0.7m at 31 December 2015 due to tax payments offset by the tax charge recognised in the income statement and the net tax charge recognised directly in equity (in relation to share based payments).

 

Deferred Consideration

 

The liability of £0.8m relates to the deferred cash payments to the vendors of FRA of £0.5m and the final payment to the vendors of NHiS of £0.3m paid in cash in January 2016.

 

Dividend

 

It is the Board's intention to pay a progressive dividend whilst ensuring a cover of at least two times the Group's Adjusted Earnings per Share over the dividend per share in respect of the year. An interim dividend of 3.8p per share (2014: 3.7p) will be paid on 7 April 2016 to shareholders on the register as at 18 March 2016.

 

 

Anthony Foye, Chief Financial Officer

 

 

Officers

Directors:

 

 

Mark Asplin

Pedro Ros

Anthony Foye

 

 

Nathalie Schwarz

 

Paul Dollman

 

Company Secretary:

 

Linda Wake

 

Registered Office:

 

 

 

Consolidated Income Statement

 

Six months ended 31 December 2015
(unaudited)

 

Adjusted results

Adjusting items (note 7)

Statutory results

£'000

£'000

£'000

Continuing operations

 

 

 

Revenue

49,363

49,363

(39,630)

(873)

(40,503)

(3,011)

(3,011)

(278)

(278)

Operating profit

9,733

(4,162)

5,571

(799)

(225)

(1,024)

Profit before tax

8,934

(4,387)

4,547

 

 

(1,046)

Profit for the period

 

 

3,501

 

 

 

 

 

3,418

 

 

83

 

 

3,501

 

 

 

 

 

3.94

 

 

3.90

Adjusted earnings per share attributable to the owners of the parent:

 

 

 

7.93

 

 

7.85

 

 

  

The notes on pages 16 to 29 are an integral part of these consolidated financial statements.

 

 

Consolidated Statement of Comprehensive Income

 

 

 

Six months ended

31 December 2015

Six months ended

31 December 2014

Year

 ended

30 June

2015

 

 

(unaudited)

(unaudited)

(audited)

 

 

£'000

 

£'000

 

£'000

 

Profit for the period

 

3,501

2,832

7,867

 

 

 

 

Other comprehensive income/(expense)

 

Items that may be reclassified subsequently to the Income Statement

 

 

 

Net fair value movements on interest rate swap

(118)

116

Currency translation differences

 

853

575

578

Net investment hedge

 

(622)

(232)

(265)

 

Other comprehensive income for the period, net of tax

113

429

 

 

 

Total comprehensive income for the period

 

3,614

 

 

 

 

Total comprehensive income for the period attributable to:

 

 

 

Owners of the parent

 

3,531

3,108

8,166

Non-controlling interests

 

83

73

130

 

 

 

 

 

 

 

3,614

3,181

8,296

  

Items in the statement above are disclosed net of tax. The notes on pages 16 to 29 are an integral part of these financial statements.

 

 

Consolidated Balance Sheet

 

 

 

31 December 2015

31 December 2014

30 June

2015

 

 

(unaudited)

(unaudited)

(audited)

 

Notes

£'000

£'000

£'000

Non-current assets

 

 

 

 

Goodwill

13

82,467

77,063

Intangible assets

13

25,680

23,636

Property, plant and equipment

13

4,682

4,841

Deferred tax assets

 

459

562

 

 

113,288

106,102

Current assets

 

 

 

Trade and other receivables

14

23,632

21,696

Derivative financial assets

 

338

Cash and cash equivalents

 

11,928

9,194

 

 

35,560

31,228

Assets of disposal group held for sale

12b

895

 

 

35,560

32,123

Total assets

 

148,848

138,225

 

 

 

 

Current liabilities

 

 

 

Trade and other payables

15

(39,857)

(39,575)

Current tax liabilities

 

(662)

(793)

Deferred consideration - cash settled

 

(844)

-

Derivative financial liabilities

 

(404)

-

Borrowings

16

(2,151)

(37,655)

 

 

(43,918)

(78,023)

Liabilities of disposal group held for sale

12b

(445)

 

 

(43,918)

(78,468)

 

 

 

 

Non-current liabilities

 

 

 

Borrowings

(45,882)

-

Deferred consideration - equity settled

 

(273)

Derivative financial liabilities

 

(264)

(423)

Deferred tax liabilities

 

(3,295)

(3,762)

Provision for  future purchase of non-controlling interests

(100)

(100)

 

 

(49,541)

(4,558)

Total liabilities

 

(93,459)

(83,026)

Net assets

 

55,389

55,199

 

 

 

 

Equity

 

 

 

Share capital

4,349

4,325

Share premium

45,225

45,225

Treasury shares

(96)

(96)

Share based payments reserve

 

649

1,052

Translation reserve

 

489

 (364)

Retained earnings

 

4,680

4,780

Equity attributable to owners of the parent

 

55,296

54,922

Non-controlling interests

 

93

277

Total equity

 

55,389

55,199

 

The notes on pages 16 to 29 are an integral part of these consolidated financial statements.

 

 

Consolidated Statement of Changes in Equity

 

 

 Equity attributable to shareholders of the parent

 

 

 

Share capital (note 17)

£'000

Share based payment reserve

£'000

 

 

Translation reserve

£'000

 

 

Retained earnings

£'000

Total

£'000

Non- controlling interests

£'000

Total equity

£'000

 

 

At 30 June 2014 (audited)

48,658

911

(942)

3,782

52,409

235

52,644

 

At 31 December 2014 (unaudited)

49,454

875

(367)

3,230

53,192

220

53,412

-

-

3

77

80

-

80

 

At 30 June 2015 (audited)

49,454

1,052

(364)

4,780

54,922

277

55,199

 

At 31 December 2015 (unaudited)

49,478

649

489

4,680

55,296

93

55,389

  

The notes on pages 16 to 29 are an integral part of these consolidated financial statements.

 

 

Consolidated Cash Flow Statement

 

 

 

Six months ended 31 December 2015

Six months ended 31 December 2014

Year ended 30
June 2015

 

 

(unaudited)

(unaudited)

(audited)

 

Notes

£'000

£'000

£'000

 

 

 

 

 

Cash flows from operating activities

 

 

 

 

Cash generated from operations before adjusting items

18

8,249

21,880

Cash flows for adjusting items - operating activities

 

(1,363)

Cash flows for adjusting items - share based payments

 

(180)

(230)

Cash generated from operations

 

8,069

20,287

Interest paid

 

(658)

(1,883)

Tax paid

 

(1,431)

(3,680)

Net cash generated from operating activities

 

5,980

14,724

 

 

 

 

Cash flows from investing activities

 

 

 

Purchase of business net of cash acquired

 

(8,469)

(173)

Proceeds from disposal of group held for sale

 

343

-

Deferred consideration paid

 

(343)

Purchase of non-controlling interests

 

(333)

-

Cash flows for adjusting items - investing activities

(198)

-

Purchase of property, plant and equipment

(290)

(829)

Proceeds from disposal of property, plant and equipment

11

65

Purchase of intangible assets

(472)

(1,738)

 

Net cash used in investing activities

 

(9,408)

(1,931)

(3,018)

 

 

 

 

Cash flows from financing activities

 

 

 

Dividends paid to owners of the parent

 

(3,478)

(6,370)

Dividends paid to non-controlling interests

 

(141)

(88)

Share issuance costs

 

(5)

(6)

Cash flows for adjusting items - financing activities

 

(631)

-

Increase/(decrease) in bank loans

 

8,404

(1,000)

 

 

 

 

Net cash generated/(used) from financing activities

 

4,149

(7,464)

 

 

 

 

Net increase in cash and cash equivalents, net of bank overdrafts

 

721

1,182

 

4,242

Cash and cash equivalents, net of bank overdrafts, at beginning of the period

 

8,698

4,378

 

4,378

Exchange gains on cash and cash equivalents

 

358

206

78

Cash and cash equivalents, net of bank overdrafts at end of the period

 

9,777

5,766

 

8,698

 

 

 

 

Reconciliation of net debt

 

 

 

Cash and cash equivalents at beginning of the period

 

9,194

5,020

 

Bank overdrafts at beginning of the period

16

(496)

(642)

 

Bank loans at beginning of the period

16

(37,306)

(38,041)

 

Net debt at beginning of the period

 

(28,608)

(33,663)

 

Net increase in cash and cash equivalents (net of bank overdrafts)

 

1,079

4,320

 

Net (drawdown)/repayment in bank loans

 

(8,404)

1,000

 

Exchange loss on bank loans

 

(665)

 

Cash and cash equivalents at end of the period

 

11,928

9,194

 

Bank overdrafts at end of the period

16

(2,151)

(496)

 

Bank loans at end of the period

16

(46,375)

(37,306)

 

Net debt at end of the period

 

(36,598)

(34,569)

(28,608)

 
                 

 The notes on pages 16 to 29 are an integral part of these consolidated financial statements.

 

 

Notes to the Financial Results

 

General information

 

The Company is a public limited company incorporated and domiciled in the UK. The address of its registered office is 6-14 Underwood Street, London, N1 7JQ.

 

The Company is listed on the main market on the London Stock Exchange. The Company is a provider of information, education and networking to professional markets.

 

This condensed consolidated interim financial information ('Interim Information') was approved for issue on

23 February 2016.

 

The Interim Information is neither reviewed nor audited and does not comprise statutory accounts within the meaning of section 434 of the Companies Act 2006. Statutory accounts for the year ended 30 June 2015 were approved by the Board of Directors on 14 September 2015. The report of the Auditors on those accounts was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement under section 498 of the Companies Act 2006.

 

1.   Basis of preparation

 

This Interim Information for the six months ended 31 December 2015 has been prepared in accordance with the Disclosure and Transparency Rules of the Financial Conduct Authority and in accordance with IAS 34 'Interim financial reporting' as adopted by the European Union. The Interim information should be read in conjunction with the Annual Financial Statements for the year ended 30 June 2015 which have been prepared in accordance with IFRSs as adopted by the European Union, and are available on the Group's website: wilmingtonplc.com.

 

The Group's forecast and projections, taking account of reasonably possible changes in trading performance, show that the Group will be able to operate well within the level of its current banking facilities. The Directors have therefore adopted a going concern basis in preparing the Interim Information.

 

2.    Accounting policies

 

The accounting policies applied are consistent with those of the Annual Financial Statements for the year ended 30 June 2015, as described in those Annual Financial Statements. The following new standards and amendments to standards are mandatory for the first time for the financial year beginning 1 July 2015 but are either not relevant to the Group or do not have a significant impact: 

·  IFRS 10, 'Consolidated financial statements' provides additional guidance in determining control where this is difficult to assess.

·  IFRS 11, 'Joint arrangements' provides a more realistic reflection of joint arrangements.

·  IFRS 12, 'Disclosures of interests in other entities' includes the disclosure requirements for all forms of interests in other entities.

·  Amendments to IFRS 10, 11 and 12 provide additional transition relief in IFRSs 10, 11 and 12.

·  IAS 27 (revised 2011) 'Separate Financial Statements' includes the provisions on separate financial statements that are left after the control provisions.

·  IAS 28 (revised 2011) 'Associates and Joint Ventures' includes the requirements for joint ventures, as well as associates, to be equity accounted

·  Amendment to IAS 32 and IFRS 7 clarify 'currently has a legally enforceable right of set-off'.

·  Amendment to IAS 36, 'Impairment of assets' proposed changes to disclosure requirement when recoverable amount is determined based on fair value less costs of disposal.

·  Amendment to IAS 39 'Financial instruments: Recognition and measurement' provides relief from discontinuing hedge accounting on novation of a hedging instrument.

 

·  IFRS 9 'Financial instruments', on 'Classification and Measurement' (effective 1 July 2018).  

·  IFRS 15 'Revenue from Contracts with Customers' (effective 1 July 2018).

·  Amendments to IFRS 10 'Consolidated Financial Statements' and IAS 28 'Investments and Joint Ventures; (effective 1 July 2016).

·  Amendments to IAS 1 'Presentation of Financial Statements' (effective 1 July 2016).

·  Amendments to IFRS 10, IFRS 12 and IAS 28 (effective 1 July 2016).  These amendments provide guidance on when an investor consolidates financial statements of an associated or joint venture.

·  Annual improvements 2012: These amendments include changes from the 2010-12 cycle of the annual improvements project, that affect 7 standards: IFRS 2, 'Share-Based Payment', IFRS 3, 'Business Combinations', IFRS 8, 'Operating segments', IFRS 13, 'Fair Value Measurement', IAS 16, 'Property, Plant and Equipment' and IAS 38, 'Intangible Assets', Consequential amendments to IFRS 9, 'Financial Instruments', IAS 37, 'Provisions, Contingent Liabilities and Contingent Assets', and IAS 39, Financial Instruments - Recognition and Measurement'.

·  Annual improvements 2013 The amendments include changes from the 2011-2-13 cycle of the annual improvements project that affect 4 standards: IFRS 1, 'First Time Adoption', IFRS 3, 'Business Combinations', IFRS 13, 'Fair Value Measurement' and IAS 40, 'Investment Property'.

·  Amendment to IFRS 11, 'Joint Arrangements' on Acquisition of an Interest in a Joint Operation.

·  Amendment to IAS 16, 'Property, Plant and Equipment' and IAS 38,'Intangible Assets', on depreciation and amortisation.

·  Amendments to IAS 16, 'Property, Plant and Equipment'.

·  Amendments to IAS 27, 'Separate Financial Statements' on the equity method.

·  Annual improvements 2014: This set of amendments impacts 4 standards: IFRS 5, 'Non-Current Assets held for Sale and Discontinued Operations' regarding methods of disposal, IFRS 7, 'Financial Instruments: Disclosures', (with consequential amendments to IFRS 1) regarding servicing contracts, IAS 19, 'Employee Benefits' regarding discount rates, IAS 34, 'Interim Financial Reporting' regarding disclosure of information.

·  IFRS 16 'Leases' for annual periods beginning on or after 1 July 2019.

3.    Principal risks and uncertainties

 

The principal risks and uncertainties that affect the Group are as stated on pages 20 to 22 of the Strategic Report in the Annual Report and Financial Statements for the year ended 30 June 2015. The main financial risks that affect the Group are:

 

(a)  Interest rate risk

Risk

Group policy

Risk management arrangements

·  A 5 year £15.0m interest rate swap commencing on 21 November 2011, whereby the Group receives interest on £15m based on the LIBOR rate and pays interest on £15m at a fixed rate of 2.68%.

·  A $7.5m interest rate swap commencing on 13 July 2015 and ending on 1 July 2020, whereby the Group receives interest on $7.5m based on the USD LIBOR rate and pays interest on $7.5m at a fixed rate of 1.79%.

·  A £15.0m interest rate swap commencing on 22 November 2016 and ending on 1 July 2020, whereby the Group receives interest on £15m based on LIBOR rate and pays interest on £15m at a fixed rate of 2.00%.

(b) Foreign currency risk

Risk

Group policy

Risk management arrangements

·      On 23 January 2015, the Group sold $2.5m to 29 January 2016 at a rate of 1.4995

·      On 23 January 2015, the Group sold $2.5m to 22 January 2016 at a rate of 1.4977

·      On 5 June 2015, the Group sold €1.34m to 14 December 2015 at a rate of 1.3569

·      On 5 June 2015, the Group sold €1.34m to 15 December 2015 at a rate of 1.3569

·      On 5 June 2015, the Group sold €1.32m to 16 December 2015 at a rate of 1.3569

·      On 8 June 2015, the Group sold $2.0m to 27 May 2016 at a rate of 1.5221

·      On 8 June 2015, the Group sold $2.0m to 29 April 2016 at a rate of 1.5220

(c)   Liquidity and capital risk

Risk

Group policy

 

Risk management arrangements

Old facility that expired on 1 July 2015:

Extended facility that is effective from 1 July 2015 and expires on 1 July 2020:

 

(d) Credit Risk

Risk

Group policy

Risk management arrangements

4.    Financial instruments and risk management

 

The methods and assumptions used to estimate the fair values of financial assets and liabilities are as follows:

· The carrying amount of trade receivables and payables approximates to fair value due to the short maturity of the amounts receivable and payable.

 

· The fair value of the Group's borrowings is estimated on the basis of the discounted value of future cash flows using approximate discount rates in effect at the balance sheet date.

 

· The fair value of the Group's outstanding interest rate swaps, foreign exchange contracts and put options for non-controlling interest are estimated using discounted cash flow models and market rates of interest and foreign exchange at the balance sheet date.

 

Financial instruments are measured at fair value via a valuation method. The different levels have been defined as:

 

· Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities;

· Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices); and

· Level 3: Inputs for the assets or liabilities that are not based on observable market data (that is, unobservable inputs).

 

The group has recognised a level 2 financial liability of £105,311 for foreign exchange trading derivatives at fair value through income or expense. In addition the group has recognised a level 2 financial liability of £562,451 for three interest rate swap contracts at fair value through other comprehensive income or expense. The group has no recognised level 1 or level 3 assets or liabilities.

 

5.    Measures of profit

 

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

 

·      amortisation of intangible assets - publishing rights, titles and benefits;

·      share based payments;

·      Adjusting items; and

·      net finance costs.

 

 

Six months 

ended

31 December

2015

(unaudited)

£'000

Six months 

ended

31 December

2014

(unaudited)

£'000

Year

  ended 30 June 2015 (audited)

£'000

Profit before tax

4,547

3,708

10,296

Amortisation of intangible assets - publishing rights, titles and benefits

3,011

3,038

6,118

Share based payments

278

634

918

Adjusting items

873

727

1,112

Net finance costs

1,024

1,024

1,974

Adjusted operating profit ('Adjusted EBITA')

9,733

9,131

20,418

Depreciation of property, plant and equipment

447

588

918

Amortisation of intangible assets - computer software

512

685

1,005

Adjusted EBITA before depreciation ('Adjusted EBITDA')

10,692

10,404

22,341

Adjusted profit before tax reconciles to profit on continuing activities before tax as follows:

 

 

Six months 

ended

31 December

2015

(unaudited)

£'000

Six months 

ended

31 December

2014

(unaudited)

£'000

Year

  ended 30 June 2015 (audited)

£'000

Profit before tax

4,547

3,708

10,296

Amortisation of intangible assets - publishing rights, titles and benefits

3,011

3,038

6,118

Share based payments

278

634

918

Adjusting items (included in operating expenses)

873

727

1,112

Adjusting items (included in net finance costs)

225

-

-

Adjusted profit before tax

8,934

8,107

18,444

 

 

6.    Segmental information

 

In accordance with IFRS 8 the Group's operating segments are based on the figures reviewed by the Board, which represents the chief operating decision maker. The Group reports its results in four operating segments as this accurately reflects the way the Group is managed.

 

The Group's organisational structure reflects the main communities to which it provides information, education and networking. The four divisions (Risk & Compliance, Finance, Legal; and Insight) are the Group's segments and generate all of the Group's revenue.

 

The Board considers the business from both a geographic and product perspective. Geographically, management considers the performance of the Group between the UK, North America, the rest of Europe and the rest of the world.

 

(a) Business segments

 

Six months ended 31 December 2015 (unaudited)

Six months ended 31 December 2014 (unaudited)

Year ended 30

June 2015

(audited)

 

Revenue

£'000

Contribution

 £'000

Contribution

 £'000

Revenue

 £'000

Contribution

 £'000

Risk & Compliance

17,593

5,595

16,771

5,282

36,416

11,856

Finance

11,595

2,435

9,983

2,250

18,711

4,382

Legal

7,638

643

7,896

678

16,250

2,201

Insight

12,537

2,790

2,569

23,710

5,390

 

49,363

11,463

46,085

10,779

95,087

23,829

Unallocated central overheads

-

(1,730)

-

(1,648)

-

(3,411)

 

49,363

9,733

46,085

9,131

95,087

20,418

Amortisation of intangible assets - publishing rights, titles and benefits

 

(3,011)

 

(3,038)

 

(6,118)

Share based payments

 

(278)

 

(634)

 

(918)

Adjusting items (included in operating expenses)

 

(873)

 

(727)

 

(1,112)

Net finance costs

 

(1,024)

 

(1,024)

 

(1,974)

Profit before tax

 

4,547

 

3,708

 

10,296

Taxation

 

(1,046)

 

(876)

 

(2,429)

Profit for the financial year

 

3,501

 

2,832

 

7,867

(b) Segmental information by geography

 

The UK is the Group's country of domicile and the Group generates the majority of its revenue from external customers in the UK. The geographical analysis of revenue is on the basis of the country of origin in which the customer is invoiced:

 

 

Six months ended 31 December 2015

Six months ended 31 December 2014

Year

 ended 30
June
2015

 

(unaudited)

(unaudited)

(audited)

 

£'000

£'000

£'000

UK

28,714

28,573

57,797

Europe (excluding the UK)

7,207

7,834

16,248

North America

8,846

5,991

10,683

Rest of the World

4,596

3,687

10,359

Total revenue

49,363

46,085

95,087

 

7.    Adjusting items

 

The following items have been charged/(credited) to profit or loss during the year but are of an unusual nature, size or incidence and so are shown separately:

 

 

Six months ended

31 December

2015

(unaudited)

£'000

Six months ended

31 December

2014 (unaudited)

£'000

Year ended

30 June

2015

(audited)

£'000

Increase/(decrease) in the liability for deferred consideration

551

(193)

(402)

Costs relating to successful and aborted acquisitions

172

-

22

Legal claim costs

150

-

-

Restructuring and rationalisation costs

-

420

992

Compensation for loss of office

-

500

500

Adjusting items (included in operating expenses)

873

727

1,112

Costs relating to the extension of the loan facility

225

-

-

Amortisation of intangible assets - publishing rights, titles and benefits

3,011

3,038

6,118

Share based payments

278

634

918

Total adjusting items (classified in profit before tax)

4,387

4,399

8,148

 

The increase in the liability for deferred consideration relate to Financial Research Associates ('FRA') and NHiS. Successful and aborted acquisitions relate to the acquisition of FRA and other aborted acquisitions. Legal claim costs of £0.2m relate to legal action that Wilmington is pursuing, inter alia, to enforce certain non-compete obligations.

 

8.    Net finance costs

 

 

Six months ended 31 December 2015

Six months ended 31 December 2014

Year

 ended 30
 June
2015

 

(unaudited)

(unaudited)

(audited)

 

£'000

£'000

£'000

Finance costs comprise:

 

 

 

Interest payable on bank loans and overdrafts

(733)

(911)

(1,754)

Amortisation of capitalised loan arrangement fees - extended facility

(66)

(113)

(220)

Adjusting item - extension of loan facility costs

(225)

-

-

 

 

 

 

 

(1,024)

(1,024)

(1,974)

 

9.    Taxation

 

 

Six months ended

31 December 2015

Six months ended

 31 December 2014

Year

 ended

30 June
2015

 

 

(unaudited)

(unaudited)

(audited)

 

 

£'000

£'000

£'000

 

 

 

 

 

 

Current tax:

 

 

 

 

Current tax on profits for the period

1,465

1,532

3,287

 

Adjustments in respect of previous years

83

-

52

 

 

 

 

 

Total current tax

1,548

3,339

 

 

Deferred tax:

Deferred tax credit

(432)

(558)

(715)

 

Effect on deferred tax of change in corporation tax rate

(70)

(98)

(195)

 

 

 

 

 

Total deferred tax

(502)

(910)

 

 

 

 

 

 

Taxation

1,046

876

2,429

 

 

 
           

10.  Dividends

 

Distributions to owners of the parent in the period:

 

 

Six

months ended 31 December 2015

Six

months ended 31 December 2014

Year ended 30 June

2015

Six

months ended 31 December 2015

Six

months ended 31 December 2014

Year months ended 30 June

2015

 

 

 

 

 

 

 

 

pence per share

pence per share

pence per share

£'000

£'000

£'000

 

(unaudited)

(unaudited)

(audited)

(unaudited)

(unaudited)

(audited)

Final dividends recognised as distributions in the year

4.0

3.7

3.7

3,478

3,082

3,082

Interim dividends recognised as distributions in the year

-

-

3.7

-

-

3,288

 

 

 

 

 

 

 

Total dividends paid in the period

 

 

 

3,478

3,082

6,370

 

 

 

 

 

 

 

Interim / final dividend proposed

3.8

3.7

4.0

3,304

3,200

3,458

 

11.  Earnings per Share

 

Adjusted Earnings per Share has been calculated using adjusted earnings calculated as profit after tax and non-controlling interests but before:

 

·      amortisation of publishing rights, titles and benefits;

·      share based payments

·      adjusting items included in operating expenses; and

·      adjusting items included in net finance costs

 

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

 

 

Six months ended 31 December 2015

Six months ended 31 December 2014

Year ended

30 June
2015

 

(unaudited)

(unaudited)

(audited)

 

£'000

£'000

£'000

 

 

 

 

Earnings from continuing operations for the purpose of basic earnings per share

3,418

2,759

7,737

 

 

 

 

Add/(remove):

 

 

 

Amortisation of intangible assets - publishing rights, titles and benefits (net of non-controlling interests)

3,011

3,038

6,118

Adjusting items (included in operating expenses)

873

727

1,112

Adjusting items (included in net finance costs)

225

-

-

Share based payments

278

634

918

Tax effect of adjustments above

(926)

(1,698)

Adjusted earnings for the purposes of adjusted earnings per share

6,879

6,186

14,187

 

 

 

 

 

Number

Number

Number

Weighted average number of ordinary shares for the purpose of basic and adjusted earnings per share

86,706,740

86,232,406

86,389,533

 

 

 

 

Effect of dilutive potential ordinary shares:

 

 

 

Future exercise of share awards and options

906,717

1,158,012

1,154,643

Deferred consideration to be settled by equity

-

221,917

107,059

Weighted average number of ordinary shares for the purposes of diluted earnings per share

87,613,457

87,612,335

87,651,235

 

 

 

 

Basic earnings per share

3.94p

3.20p

8.96p

Diluted earnings per share

3.90p

3.15p

8.83p

Adjusted basic earnings per share ('Adjusted Earnings Per Share')

7.93p

7.17p

16.42p

Adjusted diluted Earnings per Share

7.85p

7.06p

16.19p

 

12.  Acquisitions and disposals

 

a) Acquisitions - FRA - July 2015

£'000

Total consideration

8,469

£'000

Total intangible assets (see note 13)

4,718

Net identifiable assets acquired

3,751

Net assets acquired

8,469

 

b) Disposals - Media Brands - July 2015

c) Non-controlling interests acquired - October 2015 and December 2015

d) Deferred consideration settlement - NHiS - January 2016

e) Acquisition - JMH Publishing (trading as 'Wellards') - January 2016

 

13.  Goodwill, Intangible assets and Property, plant and equipment

 

 

Goodwill

£'000

Intangible assets

£'000

Property, plant and equipment

£'000

 

 

 

 

Closing net book amount as at 30 June 2014 (audited)

76,855

28,746

5,727

Acquisitions

-

380

-

Additions

-

867

548

Disposals

-

(11)

(34)

Exchange translation differences

341

65

104

Depreciation of property, plant and equipment

-

-

(588)

Amortisation of publishing rights, titles and benefits

-

(3,038)

-

Amortisation of computer software

-

(685)

-

Closing net book amount as at 31 December 2014 (unaudited)

77,196

26,324

5,757

Additions

-

882

281

Disposals

-

-

(10)

Asset Held for sale

(100)

(472)

-

Reclassification between categories

-

542

(542)

Exchange translation differences

(33)

(240)

(315)

Depreciation of property, plant and equipment

-

-

(330)

Amortisation of publishing rights, titles and benefits

-

(3,080)

-

Amortisation of computer software

-

(320)

-

Closing net book amount as at 30 June 2015 (audited)

77,063

23,636

4,841

Acquisitions (provisional)

4,718

4,718

-

Additions

217

472

290

Disposals

-

-

(7)

Exchange translation differences

469

377

5

Depreciation of property, plant and equipment

-

-

(447)

Amortisation of publishing rights, titles and benefits

-

(3,011)

-

Amortisation of computer software

-

(512)

-

Closing net book amount as at 31 December 2015 (unaudited)

82,467

25,680

4,682

 

Acquired goodwill and intangibles relate to the acquisition of FRA (see note 12a). Additions to goodwill during the period relate to the purchase of non-controlling interests (see note 12c).

 

14.  Trade and other receivables

 

 

31 December 2015

(unaudited)

£'000

31 December  2014

(unaudited)

£'000

30 June

  2015

(audited)

£'000

 

 

 

 

Trade receivables

20,151

19,863

18,518

Prepayments and other receivables

3,481

3,388

3,178

 

23,632

23,251

21,696

 

15.  Trade and other payables

 

 

31 December 2015

(unaudited)

£'000

31 December  2014

(unaudited)

£'000

30 June

2015

(audited)

£'000

 

 

 

 

Trade and other payables

18,560

18,613

20,410

Subscriptions and deferred revenue

21,297

20,079

19,165

 

39,857

38,692

39,575

 

16.  Borrowings

 

 

31 December 2015

£'000

(unaudited)

31 December  2014

£'000

(unaudited)

30 June   2015

£'000

(audited)

Current liability

 

 

 

Bank overdrafts

2,151

2,232

496

Bank loans

-

-

37,306

Capitalised loan arrangement fees - old facility

-

-

(147)

 

2,151

2,232

37,655

 

Non-current liability

Bank loans

46,375

40,335

-

Capitalised loan arrangement fee - old facility

-

(257)

-

Capitalised loan arrangement fees - extended facility

(493)

-

-

Bank loans net of facility fees

45,882

40,078

-

 

 

17.  Share capital

 

Number of ordinary shares

of 5p each

Ordinary shares

£'000

Share premium account

£'000

Treasury shares

£'000

Total

£'000

 

At 1 July 2014 (audited)

At 31 December 2014 (unaudited) and 30 June 2015 (audited)

86,507,461

4,325

45,225

(96)

49,454

 

At 31 December 2015 (unaudited)

86,985,731

4,349

45,225

(96)

49,478

 

On 19 October, 2015 478,270 ordinary shares were issued in respect of the vesting of the 2012 PSP Share Awards to employees (including Directors).

 

At 31 December 2015, 46,584 shares (2014: 46,584) were held in Treasury, which represents 0.1% (2014: 0.1%) of the called up share capital of the Company.

 

18.  Cash generated from operations

 

 

Six months ended 31 December 2015

Six months ended 31 December 2014

Year ended 30 June
 2015

 

(unaudited)

(unaudited)

(audited)

 

£'000

£'000

£'000

 

 

 

 

Profit from continuing operations before income tax

4,547

3,708

10,296

Adjusting items (included in operating expenses)

873

727

1,112

Depreciation of property, plant and equipment

447

588

918

Amortisation of intangible assets

3,523

3,723

7,123

(Profit)/loss on disposal of property, plant and equipment and intangibles

(4)

45

(21)

Share based payments

278

634

918

Net finance costs

1,024

1,024

1,974

Operating cash flows before movements in working capital

10,688

10,449

22,320

(Increase)/decrease in receivables

(1,583)

(862)

371

Decrease in payables

(856)

(2,399)

(811)

Cash generated from operations before adjusting items

8,249

7,188

21,880

 

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

 

 

Six months ended 31 December 2015

(unaudited)

£'000

Six months ended 31 December  2014

(unaudited)

£'000

Year ended 30 June   2015

(audited)

£'000

Funds from operations before adjusting items:

Adjusted EBITA (note 5)

9,733

Amortisation of intangible assets - computer software

512

Depreciation of property, plant and equipment

447

(Profit)/loss on disposal of property, plant and equipment and intangibles

(4)

Operating cash before movements in working capital

10,688

Net working capital movement

(2,439)

Funds from operations before adjusting items

8,249

Cash conversion

85%

 

 

 

 

Free cash flows:

 

 

 

Operating cash before movement in working capital

10,688

(Profit)/loss on disposal of property, plant and equipment

(4)

Net working capital movement

(2,439)

Interest paid

(658)

Tax paid

(1,431)

Purchase of property, plant and equipment

(290)

Purchase of intangible assets

(472)

Free cash flows

5,394

 

19.  Related party transactions

 

The Chief Executive Officer, Pedro Ros, owns a minority shareholding in SMARP OY (a company incorporated in Finland), which provides social media services to the Group. A subsidiary of the Group paid £11,160 during the period to SMARP UK Limited, a subsidiary of SMARP OY.

 

Global Training Consultancy Limited, a third party company, is owned and controlled by the spouse of Bill Howarth, Divisional Director of Risk & Compliance. Global Training Consultancy Limited invoiced a subsidiary of the Group for a total of £36,212 during the period for lecturing, writing production and exam marking services.

 

20.  Seasonality

 

The Group has traditionally generated the majority of its revenues and profits during the second half of the financial year. This has historically resulted from two factors. Firstly, most of the Group's businesses (the notable exception being AMT) produce seasonally low sales in July, August and December which include holiday periods for many of the Group's clients. Secondly, Inese, Compliance Week and FRA, have major annual events in the second half of the year.

 

 

Statement of Directors' Responsibilities

 

The Directors confirm that, to the best of their knowledge, the Interim Information has been prepared in accordance with International Accounting Standard 34 Interim financial reporting as adopted by the European Union. The Interim Management Report includes a fair review of the Interim Information and, as required by DTR 4.2.7R and DTR 4.2.8R, the following information:

 

·    an indication of important events that have occurred during the first six months of the financial year, and their impact on the condensed set of financial statements, and a description of the principal risks and uncertainties for the remaining six months of the financial year; and

 

·    disclosure of material related party transactions that have taken place in the first six months of the current financial year and of any material changes in the related party transactions described in the last Annual Report and Financial Statements.

 

A list of current Directors is maintained on the Wilmington plc website: wilmingtonplc.com.

 

By order of the Board

 

 

Anthony Foye

Chief Financial Officer

23 February 2016


This information is provided by RNS
The company news service from the London Stock Exchange
 
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