Final Results
Wilmington Group Plc
15 September 2003
For Immediate Release
Monday 15th September 2003
WILMINGTON GROUP PLC
Preliminary Results
for the year to 30th June 2003
Wilmington Group plc ('Wilmington' or the 'Group'), the business information,
professional training and magazine publishing group, today announces its
preliminary results for the year ended 30th June 2003.
Preliminary results review:
• Revenues maintained at £78.4m (2002: £78.6m) despite demanding market
conditions
• Profit before tax up 25% to £4.4m (2002: £3.5m)
• 138% of operating profit converted into positive cash inflow of £12.9m
(2002: £12.5m)
• Profits before tax and amortisation of goodwill and intangible assets of
£8.8m (2002: £9.9m), after a net exceptional cost of £239,000. Ahead of
market forecasts
• Disposal of non-core assets generating exceptional profits of £553,000,
and rationalised management structure at a cost of £792,000
• Adjusted earnings per share (before amortisation and exceptional items) of
6.65p (2002: 7.68p)
• Final dividend per share of 1.7p (2002: 0.5p) making a total dividend for
the year 2.5p (2002: 3p for 16 months). Dividend covered 2.7 times by
adjusted earnings per share
• Net cash of £5.6m at the 30th June 2003
Commenting on the preliminary results, Charles Brady, Chief Executive of
Wilmington, said:
'During the past financial year, Wilmington has made considerable progress in
strengthening the business in what have proven to be difficult market
conditions. Our strategy of building a leading professional business
information and communications group with broad revenue streams remains firmly
on track, with a significantly reduced reliance on magazine advertising and
related revenues. Though market conditions remain challenging, particularly in
magazine publishing, we anticipate making further progress in delivering growth
in the current financial year. Following the considerable progress made during
the last financial year, underpinned by strong cash flows and a strong balance
sheet, Wilmington is ideally positioned to benefit from any future market
upturn.'
As a result of the change in 2002 of our year end from 28th February to 30th
June this is the first time we have reported audited 12 month accounts to 30th
June. Unaudited pro forma results for the year to 30th June 2002 are shown
above for comparative purposes.
For further information, please call:
Charles Brady On the day: 020 7466 5000
Chief Executive, Wilmington Thereafter: 0207 251 6499
Basil Brookes On the day: 020 7466 5000
Finance Director Thereafter: 020 7566 8203
Bobby Morse/Suzanne Brocks Tel: 020 7466 5000
Buchanan Communications
Attached: Chairman's Statement
Chief Executive's Operational Review
Consolidated Profit and Loss Account
Consolidated Balance Sheet
Consolidated Cash Flow Statement
Notes to the Accounts
CHAIRMAN'S STATEMENT
Results
I am pleased to announce the results for Wilmington Group plc for the year to
30th June 2003. As a result of the change in 2002 of our year end from 28th
February to 30th June, this is the first time that we have reported audited 12
month results to 30th June. Unaudited pro forma results for the year to 30th
June 2002 are shown below for comparative purposes.
Turnover in the year to 30th June 2003 was £78.4m compared with £78.6m in the
year to 30th June 2002. Profit before tax and amortisation of goodwill and
intangible assets and exceptional items was £9.1m (2002 £9.9m) and earnings per
share (before amortisation and exceptional items) were 6.65p (2002 7.68p). The
cash inflow from operating activities remained strong at £12.9m (2002 £12.5m).
The Board is proposing a final dividend of 1.7p per share payable on 7th
November 2003 to shareholders on the register on 10th October 2003. Taken
together with the interim dividend of 0.8p per share, this will make a total
dividend for the year of 2.5p per share (2002: 3p for 16 months).
Overview of Results
These results have been achieved against the background of demanding trading
conditions which, in common with other media businesses, particularly affected
our magazine advertising revenues. Nevertheless, increased contributions from
other areas and the diversified nature of our activities mitigated the impact of
these conditions. We continued to undertake new initiatives and these have
created new revenue streams. Furthermore, the performance of recent
acquisitions was strong and exceeded our expectations at the time of purchase.
During the year we took a range of actions to restructure the Group's businesses
and provide a strong platform for future growth. We rationalised the management
structure so as to create a more streamlined and cost effective organisation,
and the related exceptional costs of £792,000 have been absorbed in the results
for the year. In addition we closed or sold a number of non-core activities as
part of the ongoing review of our portfolio which gave rise to exceptional
profits of £553,000.
The Business Information division increased turnover from £20.1m to £22.9m and
its profits rose from £4.1m to £4.4m. Trading conditions were challenging but
their effects were outweighed by contributions from new revenue streams and from
recent acquisitions. Solicitors Journal, an established publication in a core
market, which was acquired in November 2002, and the acquisitions made in the
previous financial year have been successfully integrated.
Turnover of the Media division, which derives the majority of its revenues from
advertising, declined from £38.3m to £34.6m with a reduction in profits from
£1.2m to £0.6m. Part of the decline in turnover was attributable to the
closure or sale of non-core titles. The division continued to be under pressure
and in particular the design magazine business, which in previous years had
contributed significant profits, experienced difficult trading conditions. The
management structure of the division has now been reorganised to establish a
more focused team and a lower cost base.
The Professional Training division produced a robust result with a strong
performance in the second half of the financial year. Turnover increased from
£20.1m to £20.9m assisted by revenues from a number of new programmes. Profits
of £4.4m declined from £4.8m in the previous year which had benefited from
specific factors, including a regulatory change.
Summary
Although we continue to operate in a difficult market environment, we remain
committed to generating sustainable and growing profits from serving the
information requirements of professional business communities. Our strategy is
to create stronger positions in individual markets by focusing investment, both
acquisitive and organic, on our key markets and to expand revenue streams by
adding new products and delivery channels.
As a result of the actions taken last year, we are better placed to take
advantage of new opportunities and improvements in trading conditions. The
Group has a diversified portfolio of businesses which provide both stability and
growth opportunities. It continues to generate good profit streams with strong
cash flows and it has a robust balance sheet to support its development.
Furthermore we have an experienced management team which is committed to the
profitable growth of the Group.
We do not presently anticipate any change in market conditions but we remain
confident of making progress based on the actions which we have taken.
Finally, I would like to thank my fellow directors, senior management and the
Group's employees for their hard work and commitment through these challenging
times.
Bernard Jolles
Chairman
CHIEF EXECUTIVE'S OPERATIONAL REVIEW
In my first full year as Chief Executive, Wilmington has performed well against
a backdrop of extremely challenging trading conditions for most media companies,
especially those providing business to business information and services. I am
therefore pleased to report that my review reflects the considerable progress
that has been made both to deliver creditable results in the period, and to
successfully restructure Wilmington for future growth and development.
Wilmington is a business information and communications group whose revenues
originate from subscriptions, copy sales, data sales, list rentals, advertising,
professional education, and professional service fees. Wilmington's business is
based on the ownership of intellectual property rights and the creation of
strong brands within its principal markets.
Our overall revenues have remained broadly at the same level as last year. We
believe this to be a significant achievement given that we have been operating
in a demanding trading environment. Sales and profits from our business
information division have increased year on year. This has been partly achieved
by the successful integration of a number of new businesses, together with the
disposal of certain non-core assets. Returns from our professional training
division remain robust with an impressive performance, particularly in the
second half of the year. Whilst magazine advertising remains difficult, we have
taken positive action and been adept at developing complementary activities,
such as exhibitions, events, internet sales and supplements, to mitigate a
shortfall in our media division.
Towards the end of the year to 30th June 2002 we acquired two new Business
Information activities: TMSS and a majority stake in Pendragon Professional
Information. These have been successfully integrated into Wilmington during the
last year and are now either meeting or exceeding expectations. In November
2002 we also acquired the Solicitors Journal, an established and influential
weekly publication for the profession.
In August 2003 we merged RED, our information service for the recording
industry, with Muze UK, its principal competitor. This will have the benefit of
combining two revenue streams but will allow us to operate from a single cost
base, the benefits of which we will start to enjoy in the current financial
year.
Over the last few years Wilmington has developed an extensive range of
electronic and Internet based applications for our principal markets. Usage of
the Internet as a business to business medium has provided the Group with an
opportunity to leverage relationships with business communities and create new
services and products, thereby enabling us to more effectively serve our
clients. The result is the generation of new sustainable and profitable revenue
streams. It is anticipated that e-revenues will continue to grow within the
Group. As reported in previous periods, the substantial development costs
relating to our Internet initiatives have been written off when incurred.
Our strategy remains to constantly improve the Group's asset base. This will be
achieved by organic initiatives and brand extensions, targeted acquisitions,
such as those above, as well as divesting those assets which are under
performing, or do not fit into our long term strategy. Accordingly, during the
year ended 30th June 2003, we have divested Dairy Industries International and
Adline Publishing from our magazine portfolio, together with a company search
business from our Business Information division. The development of strong
clusters in those markets where we have viable profitable brands and the
elimination of non-core activities is a core strategy of the Group.
As announced earlier in the year, we have also rationalised the management
structure within the Group, creating a more streamlined and focused
organisation. The costs of this reorganisation have been absorbed in the
results for the year as an exceptional item, and have resulted in approximately
£800,000 being removed from the Group's ongoing cost base.
The success of Wilmington has been founded on the entrepreneurial talents of
hard working people. Our strategy remains the continuation of a structure in
which managers are given an environment to grow their operations whilst being
highly motivated to succeed. We already use a variety of incentive schemes and
are seeking authority from shareholders to create a new share option scheme and
employee share trust to give additional scope to motivate key staff whose
performance is vital to the future success of the Group.
I would now like to provide a more detailed overview of our business.
Wilmington comprises three major divisions.
• Wilmington Business Information (Main board responsibility - Rory Conwell)
• Wilmington Media (Main board responsibility - Nicholas Miller)
• Central Law Group (Main board responsibility - Stephen Broome)
Each division is managed by an experienced team with a proven track record of
effectively managing their individual businesses. Further information about all
our products and services is contained on our web site at www.wilmington.co.uk.
Wilmington Business Information
Twelve Months Twelve Months
to 30 June 2003 to 30 June 2002
£'000 £'000
Divisional Turnover 22, 935 20,148
Divisional Profit* 4,382 4,115
* after allocation of head office costs; but before interest, exceptional items,
amortisation and tax
Wilmington Business Information ('WBI') has successfully completed a very
challenging year. It has strengthened its senior management team, delivered
both sales and profit growth in the face of a consistently tough economic
climate, integrated prior year acquisitions, disposed of a non-core business,
acquired Solicitors Journal as well as negotiating the recently completed merger
of our RED business with its principal competitor Muze UK. These have been
major achievements, demonstrating the undoubted strength and ability of the WBI
management team. Whilst the trading environment remains tough, the strength of
existing brands (allied to the recent acquisitions) has created a solid platform
that can provide consistent revenue streams with high margins.
WBI operates in three main areas:-
Professional
Our major brands in this sector, Waterlow, Binleys and Pendragon, have all
achieved year on year growth.
Waterlow, which provides a range of publishing and information products for
lawyers, accountants and surveyors, is the largest business within WBI. It has
continued to grow existing revenue streams during the year to 30th June 2003,
while the newly acquired Solicitors Journal has further added to sales and
profitability. Waterlow has close links with a number of primary associations
which include The Institute of Chartered Accountants in England and Wales and
The Royal Institution of Chartered Surveyors. It has recently entered into an
exciting collaboration with the Confederation of Business Industry (CBI) which
has good potential.
Binleys is a leading provider of contact information relating to UK healthcare
markets. Binleys has continued its unbroken record of sales and profit growth
since its acquisition by Wilmington in September 2000. This is despite the
considerable investment which has been made in enhancing the depth and range of
its core products. We are confident that the prospects for this business remain
good.
Pendragon, which was acquired in June 2002, provides an online service covering
the legal and regulatory aspects of the pension industry. This business has
been successfully integrated into Wilmington and has performed ahead of our
expectations at the time of acquisition.
Financial
Despite the turmoil in the financial markets, this business has performed very
well. Caritas, which provides a range of financial and 'who's who' information
products for the charity, housing, educational and corporate markets to fund
managers and the City, continues to flourish. The ICP business, which provides
company profiles for emerging markets, has recently successfully launched an
online service for retail customers. This additional revenue stream has
compensated for lower margins achieved on its traditional wholesale business.
Media
Our businesses in this sector include RED, which provides catalogue data on
modern and classical music; TMSS, which provides a monitoring service on the use
of music in TV programmes; PCR, which publishes a weekly newsletter identifying
new film, TV and theatre productions and Hollis Publishing, the leading supplier
of contact information for the public relations, marketing sponsorship and
corporate entertainment markets.
Media has been the most difficult business sector within WBI. The problems of
the record industry and public relations markets are well documented.
Therefore, in August 2003, we were pleased to have completed the merger of RED
with Muze UK our principal competitor for music catalogue data, which will
enable the combined business to substantially reduce its cost base.
Wilmington Media
Twelve Months Twelve Months
to 30 June 2003 to 30 June 2002
£'000 £'000
Divisional Turnover 34, 614 38,273
Divisional Profit * 576 1,256
* after allocation of head office costs; but before interest, exceptional items,
amortisation and tax
Wilmington Media, in common with most business to business magazine publishers,
is operating in a very difficult trading environment. In all areas of our media
business advertising revenues remain under intense pressure. During the year to
30th June 2003 the division generated a modest profit after absorbing its
allocation of head office overheads.
Although much revenue still derives from traditional hard copy publications, the
challenge we are meeting is to make our products and service offerings much more
broadly based than they have been historically. Our aim is to reduce the number
of markets we serve and have a more effective, comprehensive range of revenue
streams within our core areas of expertise. Despite the economic environment, we
have developed a number of complementary activities, including exhibitions,
events, internet sales and supplements, using our extensive contacts with our
markets to generate additional revenue streams.
During the year under review, we sold Dairy Industries International and Adline
as neither business constituted a core cluster nor had a reasonable prospect of
becoming such. Additionally, we have ceased publication of products which had
become unviable.
We have also restructured the senior management of this division, shortening
reporting lines and removing an entire tier of management, whilst at the same
time reinforcing our capability at publisher and sales director level. The
costs of this reorganisation have been absorbed in full in the year under
review. High quality people are of paramount importance and we have been
successful in strengthening our existing team, to provide a solid base for
future development.
In parallel, we have continued to invest in our business, in particular in the
development of our publishing systems to enable us to furnish information and
offer key products more easily and efficiently to clients in whichever format
they wish to receive it.
As we enter the new financial year trading remains difficult. However we take
comfort from the continued strength of our brands and management we will
continue to be active to avoid further deterioration of this business.
Central Law Group
Twelve Months Twelve Months
to 30 June 2003 to 30 June 2002
£'000 £'000
Divisional Turnover 20, 870 20,125
Divisional Profit* 4,413 4,785
* after allocation of head office costs, but before interest, exceptional items,
amortisation and tax
Central Law Group, our professional training business, has enjoyed record levels
of revenue during the year with a particularly strong performance in the second
half of the year. Our investment, in terms of personnel, product development
and marketing, made at the end of the prior year and during the year under
review has started to generate solid returns.
Our Conference division has continued to grow, producing a record contribution.
The Public Seminar division, which provides continuing education for lawyers,
has overcome difficult trading conditions to deliver a strong year end
performance.
Bond Solon, the witness training business, has continued its record of unbroken
growth since its acquisition. Increasingly, the proper preparation of witnesses
is regarded as a critical issue for litigators: Bond Solon remains at the
forefront of this development.
The International Division has continued to expand its sales and profitability
despite difficult trading conditions in the international financial markets.
The programmes of international courses on Trust Management have made steady
progress. The MBA for wealth managers, fiduciaries and trustees has been
successfully launched in collaboration with Manchester Business School, albeit
the numbers of students enrolling are at the lower end of expectations,
reflecting difficult market conditions. The anti-money laundering and
compliance training initiatives have been successfully launched in a number of
jurisdictions and are achieving good levels of success. We have recently
entered into a collaboration with the British Bankers Association to award,
market and deliver anti-money laundering and compliance courses and
qualifications in the United Kingdom.
The Central Law Group remains a robust business with strong profit margins
despite continued investment in many of our programmes, particularly the
anti-money laundering and compliance training programmes. We are also
developing new initiatives, for example, we have recently been accredited by The
Law Society to run the Qualified Lawyers Transfer Test which enables overseas
lawyers to qualify as solicitors in England and Wales. This is expected to
generate returns toward the end of the calendar year 2004 and beyond.
Purchase of Shares
At the Group's forthcoming AGM on 5th November 2003 the company will seek
authority from shareholders for the ability to purchase up to 10% of its issued
share capital. The Directors have no present intention of making such
purchases, but consider it prudent to have this authority so as to be able to
act at short notice if circumstances change. The authority would, however, only
be exercised if the Directors believe that to do so would be in the best
interests of shareholders generally.
Outlook
Wilmington has always been profitable and has generated excellent cash flows.
We have invested in our asset base and have a strong platform for organic growth
within our current portfolio of businesses. The strength of our balance sheet,
underlying cash flows and existing bank facilities means that we can, and will,
pursue growth not only through organic developments but also through selective
acquisition. We envisage that realistically priced opportunities will present
themselves in the foreseeable future within the sectors we are targeting.
Notwithstanding that trading conditions are difficult for businesses in our
sector, I am confident that we will continue to make progress towards our goal
of delivering annual profit growth. I believe that our existing base, gives the
platform from which to achieve this, particularly as the economic environment
improves. The current year has started in line with our expectations and, as in
the previous year, we expect that the Group's performance will be weighted to
the second half of the financial year.
It is my intention for us to create an exciting and highly focused business of
which shareholders and employees will be proud.
In closing, I should like to thank our Chairman and my fellow Directors, our
business managers and our many employees for all their enthusiasm, hard work and
support. Our people remain our greatest assets and their efforts are
appreciated.
Charles J Brady
Chief Executive
Consolidated Profit and Loss Account
For the year ended 30th June 2003
Notes Continuing Acquisitions Discontinued Twelve Sixteen
Operations Operations months months
£'000 £'000 £'000 ended 30th ended 30th
June 2003 June 2002
£'000 £'000
Turnover - continuing businesses 76,779 619 - 77,398 100,252
- discontinued operations - - 1,021 1,021 2,846
1 and 2 76,779 619 1,021 78,419 103,098
Cost of Sales (25,527) (209) (612) (26,348) (35,842)
Gross profit 51,252 410 409 52,071 67,256
Operating expenses 3 (42,141) (209) (350) (42,700) (54,803)
Operating profit before amortisation 9,111 201 59 9,371 12,453
of goodwill and intangible assets
Amortisation of goodwill and (4,306) (100) (29) (4,435) (4,521)
intangible assets - recurring
- non-recurring - - - - (2,900)
Operating profit - continuing 4,805 101 - 4,906 4,806
businesses
- discontinued
operations - - 30 30 226
4,805 101 30 4,936 5,032
Exceptional items 4 (792) - 553 (239) -
Profit before interest and taxation 4,013 101 583 4,697 5,032
Interest receivable and similar income 78 85
Interest payable and similar charges (364) (383)
Profit on ordinary activities before 2 4,411 4,734
taxation
Taxation (2,600) (3,877)
Profit on ordinary activities after 1,811 857
taxation
Minority interests (715) (841)
Profit for the financial period and 1,096 16
attributable to shareholders
Dividend paid or proposed (2,078) (2,455)
Retained loss for the period (982) (2,439)
Earnings per ordinary share 6 1.32p 0.02p
Diluted earnings per ordinary share 6 1.32p 0.02p
Adjusted earnings per ordinary share 6 6.65p 9.02p
There were no recognised gains and losses for the year other than those shown in
the profit and loss account.
Balance Sheets
As at 30th June 2003
Group Company
30th June 30th June 30th June 30th June
2003 2002 2003 2002
£'000 £'000 £'000 £'000
Fixed assets
Goodwill and intangible assets 62,444 64,410 - -
Tangible assets 9,749 10,540 2,008 2,160
Investments - - 48,052 47,983
72,193 74,950 50,060 50,143
Current assets
Stock and work in progress 2,053 2,237 - -
Debtors 16,320 15,976 25,461 21,544
Cash at bank and in hand 5,787 1,640 4,576 -
24,160 19,853 30,037 21,544
Creditors: Amounts falling due within one year (31,964) (22,739) (17,874) (5,781)
Net current (liabilities)/assets (7,804) (2,886) 12,163 15,763
Total assets less current liabilities 64,389 72,064 62,223 65,906
Creditors: Amounts falling due after more than one year (4,900) (11,895) - (5,700)
Provision for liabilities and charges (678) (794) (82) (85)
Net assets 58,811 59,375 62,141 60,121
Capital and reserves
Called-up share capital 4,156 4,149 4,156 4,149
Share premium account 42,149 42,091 42,149 42,091
Other reserves 949 949 - -
Profit and loss account 10,185 11,167 15,836 13,881
Equity Shareholders' funds 57,439 58,356 62,141 60,121
Minority interests 1,372 1,019 - -
58,811 59,375 62,141 60,121
Cash Flow Statement
For the year ended 30th June 2003
Notes Twelve months Sixteen
ended 30th months
June 2003 ended 30th
£'000 June 2002
£'000
Net cash inflow from operating activities 7(a) 12,936 16,474
Returns on investments and servicing of finance
Interest received 78 85
Interest and similar charges paid (364) (383)
Dividends paid to minority shareholders in subsidiary undertakings (157) (1,342)
Net cash outflow (443) (1,640)
Taxation
Corporation tax paid (2,719) (4,839)
Capital expenditure and financial investment
Purchase of goodwill and intangible fixed assets (1,075) (2,315)
Purchase of tangible fixed assets (1,375) (2,947)
Sale of tangible fixed assets 272 1,634
Net cash outflow (2,178) (3,628)
Acquisitions and disposals
Purchase of subsidiary undertakings - (3,445)
Purchase of businesses 5 (1,529) (1,028)
Sale of businesses 663 -
Net cash outflow (866) (4,473)
Equity dividends paid (1,055) (4,065)
Cash inflow/(outflow) before financing 5,675 (2,171)
Financing
Issue of shares 65 312
Repayment of loan notes (295) (799)
(230) (487)
Increase/(decrease) in cash in the year 7(b) 5,445 (2,658)
Reconciliation of net cash flow to movement in net cash/(debt) 7(b)
Increase/(decrease) in cash in the year 5,445 (2,658)
Cash arising on acquisitions and disposals - 1,291
Net cash brought forward 145 1,512
Net cash carried forward 5,590 145
Notes to the Accounts
1. Segmental information Twelve months Sixteen months
to 30th June to 30th June
2003 2002
£'000 £'000
Turnover:
Business Information 22,935 26,885
Media 34,614 51,301
Professional Training 20,870 24,912
78,419 103,098
Profit before taxation:
Operating profit Exceptional
before amortisation items
and exceptional
items
£'000 £'000 £'000 £'000
Business information 4,382 329 4,711 4,774
Media 576 (493) 83 1,686
Professional Training 4,413 (75) 4,338 5,993
Profit before amortisation 9,371 (239) 9,132 12,453
Less: amortisation (4,435) (7,421)
4,697 5,032
Less: interest (286) (298)
4,411 4,734
The amortisation charge is split between Business Information - £921,000 (2002:
£1,077,000) Media - £1,210,000 (2002: £3,954,000) and Professional Training -
£2,304,000 (2002: £2,390,000).
30th June 2003 30th June 2002
£'000 £'000
Net assets:
Business Information 15,992 14,235
Media 11,334 13,194
Professional Training 31,485 31,946
58,811 59,375
2. Turnover
The geographical analysis of turnover is as follows: Twelve months Sixteen months
to 30th June to 30th June
2003 2002
£'000 £'000
United Kingdom 66,037 85,633
Overseas 12,382 17,465
78,419 103,098
3. Operating expenses Twelve months Sixteen months
to 30th June to 30th June
2003 2002
£'000 £'000
Distribution and selling costs 23,084 29,936
Administrative expenses 19,616 24,867
42,700 54,803
Amortisation of goodwill and intangible assets
- recurring 4,435 4,521
- non-recurring - 2,900
Total operating expenses 47,135 62,224
4. Exceptional items Twelve months Sixteen months
to 30th June to 30th June
2003 2002
£'000 £'000
Profit on sale of businesses 553 -
Restructuring costs (792) -
(239) -
5. Acquisitions
Minority interests acquired
During the year the Company indirectly acquired a further 24.9 per cent. of
Pendragon Professional Information Limited for a total cash consideration of
£957,000 giving rise to an increase in intangible assets of £728,000.
Other acquisitions
During the year the Company indirectly acquired an additional title, Solicitors
Journal, and the goodwill of a company formations business, ICC Formations, for
a total cash consideration of £1,529,000, giving rise to an increase in
intangible assets of £1,884,000. Separate figures for the profit and loss
account for ICC Formations cannot be included because the business is fully
integrated within an existing business of Wilmington Business Information.
6. Earnings per ordinary share Twelve Sixteen
months ended months
30th June ended 30th
2003 June 2002
The calculation of earnings per ordinary share is based on profit after taxation and £1,096,000 £16,000
minority interests of
and on the average number of ordinary shares in issue during the period of 83,103,203 81,492,397
and, after adjusting for 55,159 outstanding share options (2002: 266,880), on the 83,158,362 81,759,277
diluted average number of ordinary shares during the period of
Earnings per ordinary share 1.32p 0.02p
Diluted earnings per ordinary share 1.32p 0.02p
Adjusted earnings per ordinary share 6.65p 9.02p
An adjusted earnings per ordinary share has been calculated using an adjusted
profit after taxation and minority interests but before amortisation of goodwill
and intangible assets and exceptional items of £5,528,000 (2002: £7,352,000).
7. Notes to the consolidated cash flow statement
(a) Reconciliation of operating profit to net cash inflow from operating
activities:
Twelve months Sixteen
ended 30th months
June 2003 ended 30th
£'000 June 2002
£'000
Operating profit 4,936 5,032
Depreciation of tangible fixed assets 1,949 2,547
Amortisation of goodwill and intangible fixed assets 4,435 7,421
Profit on sale of tangible fixed assets (55) (271)
Restructuring costs (792) -
Decrease/(increase) in stock and work in progress 176 (697)
(Increase)/decrease in debtors (344) 3,144
Increase/(decrease) in creditors 2,631 (702)
Net cash inflow from operating activities 12,936 16,474
(b) Analysis of movement in cash/(debt)
At 1st July Cashflow Arising on At 30th June
2002 acquisitions 2003
and disposals
£'000 £'000 £'000 £'000
Cash at bank and in hand 1,640 4,147 - 5,787
Bank overdraft (1,495) 1,298 - (197)
145 5,445 - 5,590
8. Nature of the financial information
The foregoing financial information does not amount to full accounts within the
meaning of Section 240 of Companies Act 1985. The financial information has
been extracted from the Group's Annual Report and Accounts for the year ended
30th June 2003 on which the auditors have been given an unqualified report.
Copies of the Annual Report and Accounts will be posted to shareholders shortly
and will be available from the Company's registered office at Paulton House, 8
Shepherdess Walk, London, N1 7LB.
Pro-forma Five Year Financial Summary
Years ended 30th June
1999 2000 2001 2002 2003
£'m £'m £'m £'m £'m
Consolidated Profit and Loss Accounts
Turnover 45.4 61.6 75.3 78.6 78.4
Cost of Sales (14.0) (21.3) (26.1) (26.9) (26.3)
Gross profit 31.4 40.3 49.2 51.7 52.1
Operating expenses (23.5) (30.5) (37.7) (41.5) (42.7)
Operating profit before amortisation of 7.9 9.8 11.5 10.2 9.4
goodwill and intangible assets
Amortisation of goodwill and in tangible assets (1.0) (2.5) (3.1) (6.4) (4.4)
Operating profit 6.9 7.3 8.4 3.8 5.0
Exceptional items - - - - (0.3)
Profit before interest and taxation 6.9 7.3 8.4 3.8 4.7
Net interest payable (0.1) (1.0) (0.1) (0.3) (0.3)
Profit on ordinary activities before taxation 6.8 6.3 8.3 3.5 4.4
Taxation (2.3) (2.4) (3.3) (2.9) (2.6)
Profit on ordinary activities after taxation 4.5 3.9 5.0 0.6 1.8
Minority interests (0.1) (0.5) (0.8) (0.7) (0.7)
Profit/(Loss) for the financial year 4.4 3.4 4.2 (0.1) 1.1
attributable to shareholders
Dividends (1.2) (1.5) (2.0) (2.4) (2.1)
Retained profit/(accumulated loss) for the year 3.2 1.9 2.2 (2.5) (1.0)
Earnings per ordinary share (pence) 6.19 4.54 5.17 (0.06) 1.32
Diluted earnings per ordinary share (pence) 6.12 4.49 5.12 (0.06) 1.32
Adjusted earnings per ordinary share(pence) 7.60 7.96 8.92 7.68 6.65
Consolidated Balance Sheets
Goodwill and intangible fixed assets 42.2 45.7 54.1 64.4 62.4
Tangible fixed assets 7.3 8.1 11.6 10.6 9.8
Net current (liabilities)/assets (5.9) 1.8 (2.9) (2.9) (7.8)
Creditors due after one year (20.0) - (2.1) (11.9) (4.9)
Provision for liabilities and charges (0.4) (0.5) (0.9) (0.8) (0.7)
Net assets 23.2 55.1 59.8 59.4 58.8
Called-up share capital 3.6 4.0 4.1 4.2 4.2
Share premium account 8.7 37.8 39.9 42.1 42.1
Other reserves 0.9 0.9 0.9 0.9 0.9
Profit and loss account 9.6 11.5 13.7 11.2 10.2
Equity shareholders' funds 22.8 54.2 58.6 58.4 57.4
Minority interests 0.4 0.9 1.2 1.0 1.4
23.2 55.1 59.8 59.4 58.8
Operating cash inflow 10.1 10.6 13.0 12.5 12.9
The above is based on information extracted from the Company's statutory
accounts as adjusted using information from its management accounts to reflect
the change in the Company's accounting reference date in 2002 from 28th February
to 30th June.
This information is provided by RNS
The company news service from the London Stock Exchange
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