Half-year Report

RNS Number : 2071C
Wilmington PLC
21 February 2022
 

21 February 2022

Wilmington plc

 

Strong organic revenue and profit growth

 

Wilmington plc, (LSE: WIL, 'Wilmington' or 'the Group') the provider of data, information, education and training services in the global Governance, Risk and Compliance (GRC) markets, today announces its half year results for the six months ended 31 December 2021 (H1 FY22).

 

Financial performance

 


H1 FY22

H1 FY21

Change

Revenue

£58.9m

£55.1m

7%

Adjusted PBT1

£9.5m

£7.0m

35%

Adjusted basic EPS2

8.60p

6.44p

34%

Interim dividend

2.4p

2.1p

14%





Statutory PBT incl. AMT sale

£24.6m

£5.5m

 

Statutory basic EPS

26.14p

5.05p

 

 

Highlights

-  Organic3 revenue growth 12% driven by the acceleration of digitalisation programme and return of face-to-face events to pre-pandemic levels

Information & Data delivered 10% organic growth; Training & Education delivered 15% organic growth

Excluding face-to-face events, organic revenue growth of 6%

-  H1 FY22 revenue exceeded pre-Covid H1 FY20 and H1 FY19 for retained businesses with profits materially ahead

-  H1 FY22 Group adjusted profit margins improved to 16% (H1 FY21: 13%)

Strategic sale of AMT in December 21 for £23.4m

Robust balance sheet position with Group net cash4 at 31 Dec 21 of £11.0m (31 Dec 20: net debt: £23.2m; 30 Jun 21: net debt: £17.2m)

Significant progress made in establishing single technology platforms for each division

Increasingly strong outlook  

 

Mark Milner, Chief Executive Officer, commented:

"We continue to deliver on our strategy and are now seeing the results of the Group's repositioning and redirection, the acceleration of our digitalisation programme and investment in new products over the last two years.

"This has led to double-digit organic revenue growth, significant profitability improvement and strong cash conversion.  Both divisions and our teams are performing strongly. Revenues and profits are now ahead of the pre-Covid periods.

"As we stated on 27 January 2022, trading in the current financial year is ahead of our earlier expectations.  If the major face-to-face events happen in March as expected, we anticipate our profitability to improve still further."

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

For further information, please contact:

 

Wilmington plc 

Mark Milner, Chief Executive Officer

Guy Millward, Chief Financial Officer

 

Meare Consulting

Adrian Duffield

 

 

020 7490 0049

 

 

 

07990 858548

 

1 Adjusted profit before tax - see note 4

2 Adjusted basic earnings per share - see note 6

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

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

 

Notes to Editors

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

 

Results and dividend

 

Our strong performance in H1 FY22 demonstrates the value of our diversified portfolio and focus on the GRC and Regulatory Compliance markets, with growth driven by our agile teams and the resilience that this diversity and business model has brought over the past two years. Demand for our products remains strong with our customers continuing to rely on us to help them operate successfully.

 

Revenue of £58.9m was up 7%.  Organic revenue growth was 12%, adjusted for the closure and disposal of discontinued businesses and the minor impact of currency movements.  Excluding face-to-face events, we saw organic revenue growth of 6%.

 

This growth was driven by the acceleration of our digitalisation programme, the investment in new products over the last two years and the return to face-to-face events. 

 

The Information & Data division achieved 10% organic revenue growth (5% total revenue growth) with the Training & Education division achieving organic revenue growth of 15% (10% total revenue growth). All our businesses grew organically in the first half.

 

14% of our ongoing revenues are in US dollars, 12% in Euros and 3% in Singapore Dollars, no other currency other than Sterling is material.

 

H1 FY22 revenue exceeded both pre-Covid periods H1 FY20 and H1 FY19 on a like-for-like basis with profits being materially ahead. 

 

Adjusted profit before tax of £9.5m (H1 FY21: £7.0m) was up 35% and up 42% organically.  Costs have increased due to the anticipated increase in staff costs and the return of some face-to-face delivery costs, mainly venue hire and some increased travel.  Despite the expected cost increases, adjusted pre-tax profit margins improved to 16% (H1 FY21: 13%).   

 

Operating cash conversion remained strong at 113%, with net cash of £11.0m (30 June 2021: net debt £17.2m) following proceeds from the sale of the AMT financial training business in December for £23.4m. Net cash including lease liabilities was £1.0m.  Remaining debt was repaid in early January 2022.

 

The interim dividend is being increased by 14% to 2.4p (H1 FY21: 2.1p) and will be paid on 6 April 2022 to shareholders on the share register as at 4 March 2022, with an associated ex-dividend date of 3 March 2022. 

 

Strategic and operational progress

 

Our strategy is to grow revenues and profits organically in the large, growing and rapidly evolving GRC and Regulatory Compliance markets by investing in our business and actively managing our portfolio of businesses.  

 

Our investment focus is on establishing single technology platforms for each division.  This supports our digital-first approach and will enable the Group to grow organically and by acquisition more efficiently which will ensure we continue to maintain high margin levels.

 

In the Training & Education division we have established the Digital Hub in ICA, rolled out the solution to Bond Solon and are now moving the Accountancy training business onto the platform over the next 12 months.  In the Information & Data division, we have begun to establish a single data platform for all our lines of business based around Snowflake® technology and expect this project to roll out over the next two years. 

 

Our first virtual classroom went live in March 2021 and is helping us continue to achieve high levels of innovative digital delivery in training and education products.

 

Further investments in sales and product management academy roll outs have started to deliver returns in revenue growth as has an increased focus on pricing and packaging.  We have successfully increased the number of multi-year subscription contracts in the first half as a result of this.

 

We remain focussed on actively managing our portfolio by assessing the potential of each business to exhibit the six common Wilmington characteristics that we recognise as key drivers of organic revenue growth and profitability improvement.

 

In December 2021, we sold AMT Training to Train The Street, LLC for an enterprise value of £23.4m, subject to customary working capital adjustments.  The cash received leaves us with a net cash position.  As previously announced, we continue to seek a buyer for our Spanish insurance business, Inese. 

 

We intend to use our cash resources and our £65m bank facility to acquire suitable GRC businesses to add further growth and profitability to the Group. We will continue to apply high levels of scrutiny in respect of target identification and multiples paid. We are clear in our ambition but also clear in the characteristics we will seek in any business we look to acquire. The ability to drive value and growth for Wilmington shareholders will always be a key priority.

 

Current trading and outlook

 

We continue to derive considerable benefits from our diversified portfolio as well as the investment we have made in product development and digitalisation over the past two years. In addition to driving organic growth, we have continued to improve margins.

 

Provided we can continue to run events face-to-face, we expect an additional boost to profitability in H2 FY22.  If not, we still expect profits and revenues to be higher than last year despite the sale of AMT.

 

ESG

 

The delivery of our strategy is supported by our ongoing commitment to responsible business practice, which echoes our commitment to help customers to do the right business in the right way.

 

A core component of our ESG strategy is to promote an open and inclusive culture in which employee feedback guides our decisions. During the period we responded to key issues raised by our colleagues and had a 91% participation rate in the recently completed annual engagement survey.

 

We continued to enhance our well-established employee wellbeing programmes and formalised our Diversity & Inclusion strategy with a clear roadmap for action. We also used our latest engagement survey to capture richer data that will help us to demonstrate progress against our diversity, wellbeing and employee development ambitions.

 

In September 2021, we committed to becoming carbon neutral in FY22.  We have achieved this goal already. We have supported high quality certified carbon reduction and storage programmes to offset almost double the scope 1, 2 and 3 emissions reported in respect of FY21.

 

In H1 FY22, we have completed a more detailed scope 3 emissions inventory, which will facilitate our work in the second half to set net zero targets in line with a 1.5-degree trajectory. We are currently implementing the strategic element of the TCFD recommendations as an integral component of our annual business planning process.

 

Divisional and Financial Review

 

Information & Data

 


H1 FY22

H1 FY21

Absolute

Variance

Organic

Variance

Revenue

£'m

£'m



Healthcare

15.9

13.9

14%

16%

Financial Services & other

10.5

10.3

1%

4%

Identity & Charities

2.4

2.4

3%

3%

Discontinued

0.3

1.2

(78%)


Total

29.1

27.8

5%

10%

Operating profit

5.6

4.4

28%

32%

Margin

19%

16%



 

Revenues in the Information & Data division were up 10% on an organic basis.   

 

This strong performance was driven by Healthcare which benefitted from the return to face-to-face events and good growth in HSJ subscriptions.  Financial Services achieved solid organic growth, again from subscriptions.  Identity & Charities achieved growth despite restructuring initiatives impacting the first half. 

 

Profitability in the division materially improved, particularly in Healthcare where revenue growth and cost reductions will combine in H2 to drive towards a margin target in excess of 20%.

 

Training & Education

 


H1 FY22

H1 FY21

Absolute

Variance

Organic

Variance

Revenue

£'m

£'m



Global

11.4

11.2

2%

3%

UK & Ireland

11.7

9.9

17%

18%

North America

2.6

1.5

74%

81%

Discontinued

4.1

4.7

(11%)


Total

29.8

27.3

10%

15%

Operating profit

7.1

5.9

20%

27%

Margin

24%

22%



 

Revenues grew 15% organically, led by a strong performance in North America where the return to face-to-face events has boosted revenues by 81%. 

 

UK and Ireland also had a strong six months with both Accountancy and Legal seeing double-digit growth due to increased customer demand.  Accountancy revenues are still recovering to pre-pandemic levels and so the comparative was weak but Legal is now a much bigger business than it was pre-pandemic. 

 

Global is now mostly ICA following the sale of AMT.  UK growth offsets a decline in Singapore following a very strong FY21. 

 

The increase in the division's revenue was accompanied by an increase in costs as face-to-face events brought a return of venue hire and travel costs.  However, we have maintained a much higher proportion of digital training delivery volumes compared to the pre-pandemic period, resulting in higher margins. 

 

Amortisation excluding computer software, impairment charge and other income

Amortisation of intangible assets (excluding computer software) was £1.2m (H1 FY21: £1.7m), the fall driven by some historic assets becoming fully amortised.  The impairment charge of £0.6m relates to a long leasehold building in Sutton Coldfield we have been unable to sell since vacating it two years ago.  Other income represents the net gain of £16.1m from the sale of AMT Training and £0.8m from the sale of buildings in Basildon linked to our office consolidation programme.

 

Finance costs

Net finance costs fell to £0.6m (H1 FY21: £0.8m) driven primarily by lower net debt levels. Non-utilisation fees on the banking facility will mean smaller finance costs will persist in the second half of the financial year. 

 

Profit before taxation and Earnings per Share

The increase in revenue, improved profit margins and the large gain on the sale of AMT have resulted in a profit before tax of £24.6m (H1 FY21: £5.5m).  Earnings per share measures improved for the same reasons.

 

Taxation

The tax charge is £1.7m (H1 FY21: £1.1m) with an overall effective tax rate5 of 7% compared to 20% in the prior period. The fall in effective tax rate was due to the gain on sale of AMT not being subject to corporation tax. The underlying tax rate6 which ignores the tax effects of adjusting items remained flat at 20% (H1 FY21: 20%).

 

Balance sheet and cashflow

Balance sheet movements are explained by the sale of AMT and trading in the period, as well as the sale of buildings in Basildon and the impairment of a long leasehold property in Sutton Coldfield.  Cash generation improved on the prior period due to the improved trading performance despite the return of dividend payments.

 

5 The effective tax rate is calculated as the total tax charge divided by profit before tax

6 The underlying tax rate is calculated as one minus the adjusted profit after tax divided by the adjusted profit before tax - the tax rate excluding the tax impact of adjusting items  

Consolidated Income Statement

 

 

Notes

Six months ended

31 December 2021

 (unaudited)

£'000

 

Six months ended

31 December 2020

 (unaudited)

£'000

 

Year

 ended

30 June 2021

 (audited)

£'000

Continuing operations

 

 

 

 

 

 

Revenue

5

58,945

 

55,071

 

113,027

 

 

 

 

 

 

 

Operating expenses before amortisation of intangibles excluding computer software, impairment and adjusting items

 

(48,921)

 

 

(47,282)

 

(96,378)

Impairment of goodwill, intangible assets and property, plant and equipment

4

(597)

 

-

 

(14,834)

Adjusting items

4

22

 

(580)

 

(2,970)

Amortisation of intangible assets excluding computer software

4

(1,183)

 

(1,700)

 

(3,400)

Operating expenses

 

(50,679)

 

(49,562)

 

(117,582)

 

 

 

 

 

 

 

Other income - net gain on office consolidation

4

758

 

-

 

-

 

 

 

 

 

 

 

Other income - gain on disposal of business operations

4

-

 

-

 

3,394

 

 

 

 

 

 

 

Other income - gain on disposal of subsidiary

7

16,115

 

770

 

770

 

 

 

 

 

 

 

Operating profit/(loss)

 

25,139

 

  6,279

 

(391)

 

 

 

 

 

 

 

Net finance costs

 

(551)

 

(783)

 

(1,634)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit/(loss) before tax

4

24,588

 

5,496

 

(2,025)

 

 

 

 

 

 

 

Taxation

 

(1,687)

 

(1,073)

 

(2,522)

 

 

 

 

 

 

 

Profit/(loss) for the period attributable to owners of the parent

 

22,901

 

4,423

 

(4,547)

 

 

 

 

 

 

 

Earnings/(loss) per share:

 

 

 

 

 

 

Basic (p)

6

26.14

 

5.05

 

(5.18)

Diluted (p)

6

25.92

 

5.03

 

(5.18)

Consolidated Statement of Comprehensive Income

 


Six months ended

31 December 2021

Six months ended

31 December 2020

Year

 ended

30 June
2021


(unaudited)

(unaudited)

(audited)


£'000

 

£'000

 

£'000

 

Profit/(loss) for the period

22,901

4,423

(4,547)

Other comprehensive income/(expense):

Items that may be reclassified subsequently to the Income Statement




Fair value movements on interest rate swap, net of tax

389

(113)

93

Currency translation differences

341

(1,460)

(1,732)

Net investment hedges, net of tax

(164)

683

762

Other comprehensive income/(expense) for the period, net of tax

566

(890)

(877)

Total comprehensive income/(expense) for the period attributable to owners of the parent

 

23,467

3,533

(5,424)

 

Items in the statement above are disclosed net of tax.

Consolidated Balance Sheet  

 



31 December 2021

31 December 2020

30 June

2021



(unaudited)

(unaudited)

(audited)



£'000

£'000

£'000

Non-current assets





Goodwill


59,912

76,705

65,833

Intangible assets


12,986

17,711

14,000

Property, plant and equipment


7,909

15,826

9,277

Deferred consideration receivable


1,516

1,750

1,585

Derivative financial instruments


537

-

57

Deferred tax assets


1,233

1,244

1,364



84,093

113,236

92,116

Current assets





Trade and other receivables


25,904

23,640

28,698

Deferred consideration receivable


250

483

250

Current tax asset


238

1,072

312

Derivative financial instruments


-

367

-

Cash and cash equivalents


24,160

7,905

7,374

Assets held for sale


-

-

1,588



50,552

33,467

38,222

Total assets


134,645

146,703

130,338






Current liabilities





Trade and other payables


(51,561)

(54,476)

(54,959)

Lease liabilities


(2,243)

(2,571)

(2,356)

Derivative financial instruments


(125)

(198)

-

Borrowings


-

-

(3,644)

Provisions


(307)

-

(461)



(54,236)

(57,245)

(61,420)






Non-current liabilities





Borrowings


(12,734)

(30,400)

(20,430)

Lease liabilities


(7,750)

(9,288)

(8,386)

Deferred tax liabilities


(1,762)

(2,346)

(2,054)

Provisions


(1,381)

-

(1,381)



(23,627)

(42,034)

(32,251)

Total liabilities


(77,863)

(99,279)

(93,671)

Net assets


56,782

47,424

36,667






Equity





Share capital


4,380

4,380

4,380

Share premium


45,225

45,225

45,225

Treasury and ESOT reserves


(960)

(453)

(701)

Share based payments reserve


1,736

1,419

1,390

Translation reserve


2,410

2,341

2,069

Retained earnings/(accumulated losses)


3,991

(5,488)

(15,696)

Total equity


56,782

47,424

36,667

Consolidated Statement of Changes in Equity  

 

 


Share capital, share premium, treasury shares and ESOT shares

£'000

Share based payments reserve

£'000

 

 

Translation reserve

£'000

 

 

Retained earnings/ (accumulated losses)

£'000

Total equity

£'000







At 30 June 2020 (audited)

49,015

1,195

3,801

(10,605)

43,406

Profit for the period

-

-

-

4,423

4,423

Other comprehensive (expense)/income for the period

 

-

 

-

(1,460)

570

(890)


49,015

1,195

2,341

(5,612)

46,939

Performance share plan awards vesting settled via ESOT

137

(241)

 

-

104

 

-

Share based payments

-

465

-

-

465

Tax on share based payments

-

-

-

20

20

At 31 December 2020 (unaudited)

49,152

1,419

2,341

(5,488)

47,424

Loss for the period

-

-

-

(8,970)

(8,970)

Other comprehensive income/(expense) for the period

 

-

 

-

(272)

285

13


49,152

1,419

2,069

(14,173)

38,467

Dividends paid

-

-

-

(1,829)

(1,829)

ESOT share purchases

(263)

-

-

-

(263)

Sale of treasury shares

15

-

-

-

15

Share based payments

-

(29)

-

-

(29)

Tax on share based payments

-

-

-

306

306

At 30 June 2021 (audited)

48,904

1,390

2,069

(15,696)

36,667

Profit for the period

-

-

-

22,901

22,901

Other comprehensive income for the period

 

-

 

-

341

225

566


48,904

1,390

2,410

7,430

60,134

Dividends paid

-

-

-

(3,399)

(3,399)

Performance share plan awards vesting settled via ESOT

84

(105)

 

-

21

 

-

ESOT share purchases

(371)

-

-

-

(371)

Sale of treasury shares

28

-

-

-

28

Share based payments

-

451

-

-

451

Tax on share based payments

-

-

-

(61)

(61)

At 31 December 2021 (unaudited)

48,645

1,736

2,410

 

3,991

56,782

 

Consolidated Cash Flow Statement

 



Six months ended 31 December 2021

Six months ended

31 December 2020

Year ended

30 June 2021



(unaudited)

(unaudited)

(audited)


Notes

£'000

£'000

£'000






Cash flows from operating activities





Cash generated from operations before adjusting items

9

11,374

9,203

17,290

Cash flows for adjusting items - operating activities


(31)

(302)

(339)

Cash flows from tax on share based payments


(4)

(5)

9

Cash generated from operations


11,339

8,896

16,960

Interest paid


(302)

(763)

(1,196)

Tax paid


(1,805)

(1,169)

(2,697)

Net cash generated from operating activities


9,232

6,964

13,067






Cash flows from investing activities





Disposal of a subsidiary


21,875

400

400

Disposal of business operations


-

-

4,144

Deferred consideration received


125

-

250

Cash flows for adjusting items - investing activities


(92)

(43)

(151)

Purchase of property, plant and equipment


(275)

(455)

(1,047)

Proceeds from disposal of property, plant and equipment


3,439

7

103

Purchase of intangible assets


(988)

(1,422)

(1,969)

Net cash generated from/(used in) investing activities


24,084

(1,513)

1,730






Cash flows from financing activities





Dividends paid to owners of the parent


(3,399)

-

(1,829)

Payment of lease liabilities


(1,095)

(1,285)

(2,530)

Purchase of shares by ESOT


(371)

-

(263)

Fees paid relating to new and extended loan facility


(5)

(215)

(191)

Increase in bank loans


-

1,000

2,000

Decrease in bank loans


(8,000)

(18,181)

(29,181)

Net cash used in financing activities


(12,870)

(18,681)

(31,994)






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


 

20,446

(13,230)

(17,197)

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


 

3,730

21,426

21,426

Exchange losses on cash and cash equivalents


(16)

(291)

(499)

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


 

24,160

7,905

3,730






Reconciliation of net cash/(debt)





Cash and cash equivalents at beginning of the period


7,374

21,426

21,426

Bank overdrafts at beginning of the period


(3,644)

-

-

Bank loans at beginning of the period


(20,960)

(49,082)

(49,082)

Lease liabilities at beginning of the period


(10,742)

(13,121)

(13,121)

Net debt at beginning of the period


(27,972)

(40,777)

(40,777)

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


 

20,430

(13,521)

(17,696)

Net repayment in bank loans


8,000

17,181

27,181

Exchange (loss)/gain on bank loans


(202)

842

941

Movement in lease liabilities


749

1,262

2,379

Cash and cash equivalents at end of the period


24,160

7,905

7,374

Bank overdrafts at end of the period


-

-

(3,644)

Bank loans at end of the period


(13,162)

(31,059)

(20,960)

Lease liabilities at end of the period


(9,993)

(11,859)

(10,742)

Net cash/(debt) at end of the period


1,005

(35,013)

(27,972)

 

Notes to the Financial Results

 

General information

The Company is a public limited company incorporated and domiciled in the UK. The address of the Company's registered office is 10 Whitechapel High Street, London, E1 8QS.

 

The Company is listed on the Main Market on the London Stock Exchange. The Company is a provider of data information, training and education to the professional markets.

 

This condensed consolidated interim financial information ('Interim Information') was approved for issue by the Board of Directors on 18 February 2022.

 

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 2021 were approved by the Board of Directors on 17 September 2021 and subsequently filed with the Registrar. 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 2021 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'. The Interim Information should be read in conjunction with the Annual Financial Statements for the year ended 30 June 2021 which have been prepared in accordance with IFRSs applicable to companies reporting under IFRS, adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union and international accounting standards in conformity with the requirements of the Companies Act 2006, 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, further supported by the net cash position. The Directors have therefore adopted a going concern basis in preparing the Interim Information.

2.  Accounting policies

The accounting policies, significant judgements and key sources of estimation adopted in the preparation of this Interim Report are consistent with those applied by the Group in its consolidated financial statements for the year ended 30 June 2021.

 

There has been no material impact on the financial statements of adopting new standards or amendments.

 

Amended standards and interpretations not yet effective are not expected to have a significant impact on the Group's consolidated financial statements.

3.  Principal risks and uncertainties

The principal risks and uncertainties that affect the Group remain unchanged from those stated on pages 31 to 37 of the strategic report in the Annual Report and Financial Statements for the year ended 30 June 2021.

4.  Measures of profit

Reconciliation to profit on continuing activities before tax.

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

 

· impairment of goodwill, intangible assets and property, plant and equipment;

· amortisation of intangible assets excluding computer software;

· adjusting items;

· other income - net gain on office consolidation;

· other income - gain on disposal of business operations;

· other income - gain on disposal of subsidiary; and

· net finance costs.

 

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

 


Six months 

ended

31 December

2021

(unaudited)

£'000

Six months 

ended

31 December

2020

 (unaudited)

£'000

Year ended

30 June

2021

(audited)

£'000

Profit/(loss) before tax

24,588

5,496

(2,025)

Impairment of goodwill, intangible assets and property, plant and equipment

597

-

14,834

Amortisation of intangible assets excluding computer software

1,183

1,700

3,400

Adjusting items

(22)

580

2,970

Other income - net gain on office consolidation

(758)

-

-

Other income - gain on disposal of business operations

-

-

(3,394)

Other income - gain on disposal of a subsidiary

(16,115)

(770)

(770)

Adjusted profit before tax

9,473

7,006

15,015

Net finance costs

551

783

1,634

Adjusted operating profit ('adjusted EBITA')

10,024

7,789

16,649

Depreciation of property, plant and equipment included in operating expenses

1,217

1,700

3,399

Amortisation of intangible assets - computer software

784

1,064

2,416

Adjusted EBITA before depreciation ('adjusted EBITDA')

12,025

10,553

22,464

 

The net gain on office consolidation included in adjusting items is in respect of the exercise performed to consolidate the Group's office space. Included in this amount is the gain on disposal of two buildings and their associated assets on 31 August 2021.

 

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

 

Six months ended

31 December

2021

(unaudited)

£'000

Six months ended

31 December

2020

 (unaudited)

£'000

Year ended

30 June

2021

(audited)

£'000

 

 

 

 

Costs relating to the consolidation of office space

-

-

1,842

(Gain)/expense relating to strategic activities

(22)

580

1,128

Adjusting items

(22)

580

2,970

Impairment of goodwill, intangible assets and property, plant and equipment

597

-

14,834

Amortisation of intangible assets excluding computer software

1,183

1,700

3,400

Total adjusting items (classified in profit before tax)

1,758

2,280

21,204

 

The impairment of goodwill, intangible assets and property, plant and equipment relates to:

 

Six months ended

31 December

2021

(unaudited)

£'000

Six months ended

31 December

2020

 (unaudited)

£'000

Year ended

30 June

2021

(audited)

£'000

 

 

 

 

Goodwill

  -

  -

9,873

Intangible assets

-

-

1,516

Property, plant and equipment

597

-

3,445

 

597

-

14,834

 

The impairment in the period relates to the impairment of assets associated with an office property, recognised as a result of an exercise performed to consolidate the Group's office space.

5.  Segmental information

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

 

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

 

  (a) Business segments


Six months ended

31 December 2020

(unaudited)

Year ended

30 June 2021

(audited)


Revenue

£'000

Contribution

 '000

Revenue

£'000

Contribution

 '000

Revenue

 '000

Contribution

 '000

Training & Education

29,867

7,096

27,271

5,927

56,211

12,197

Information & Data

29,078

5,616

27,800

4,372

56,816

9,320

Group contribution

58,945

12,712

55,071

10,299

113,027

21,517

Unallocated central overheads

-

(2,152)

-

(1,981)

-

(4,302)

Share based payments

-

(536)

-

(529)

-

(566)


58,945

10,024

55,071

7,789

113,027

16,649

Impairment of goodwill, intangible assets and

property, plant and equipment


 

(597)


-


(14,834)

Amortisation of intangible assets excluding computer software


(1,183)


(1,700)


(3,400)

Adjusting items


22


(580)


(2,970)

Other income - net gain on office consolidation


758


-


 

-

Other income - gain on disposal of business operations


 

-


-


 

3,394

Other income - gain on disposal of a subsidiary


16,115


770


770

Net finance costs


(551)


(783)


(1,634)

Profit/(loss) before tax


24,588


5,496


(2,025)

Taxation


(1,687)


(1,073)


(2,522)

Profit/(loss) for the financial period


22,901


4,423


(4,547)

 

There are no intra-segmental revenues which are material for disclosure. Unallocated central overheads represent head office costs that are not specifically allocated to segments. Total assets and liabilities for each reportable segment are not presented, as such information is not provided to the Board.

 

(b) Segmental information by geography

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

 


Six months

ended

31 December

2021

Six months ended

31 December

2020

Year

ended

30 June

2021


(unaudited)

(unaudited)

(audited)


£'000

£'000

£'000

UK

30,874

30,815

61,999

North America

10,431

6,208

15,042

Europe (excluding the UK)

11,922

11,444

23,304

Rest of the world

5,718

6,604

12,682

Total revenue

58,945

55,071

113,027

6.  Earnings/(loss) per share

Adjusted earnings/(loss) per share has been calculated using adjusted earnings calculated as profit/(loss) after taxation but before:

 

· impairment of goodwill, intangible assets and property, plant and equipment;

· amortisation of intangible assets excluding computer software;

· adjusting items;

· other income - net gain on office consolidation;

· other income - gain on disposal of business operations; and

· other income - gain on disposal of subsidiary.

 

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

 


Six months ended

31 December 2021

Six months ended

31 December 2020

Year ended

30 June
2021


(unaudited)

(unaudited)

(audited)


£'000

£'000

£'000

Earnings/(loss) from continuing operations for the purpose of basic earnings per share

22,901

4,423

(4,547)

Add/(remove):




Impairment of goodwill, intangible assets and property, plant and equipment

597

-

14,834

Amortisation of intangible assets excluding computer software

1,183

1,700

3,400

Adjusting items

(22)

580

2,970

Other income - net gain on office consolidation

(758)

-

-

Other income - gain on disposal of business operations

-

-

(3,394)

Other income - gain on disposal of subsidiary

(16,115)

(770)

(770)

Tax effect of adjustments above

(253)

(293)

(558)

Adjusted earnings for the purposes of adjusted earnings per share

7,533

5,640

11,935






Number

Number

Number

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

87,603,917

87,603,917

87,603,917





Effect of dilutive potential ordinary shares:




Future exercise of share awards and options

745,931

293,090

410,301

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

88,349,848

87,897,007

88,014,218





Basic earnings/(loss) per share

26.14p

5.05p

(5.18p)

Diluted earnings/(loss) per share

25.92p

5.03p

(5.18p)

Adjusted basic earnings per share ('adjusted earnings per share')

8.60p

6.44p

13.62p

Adjusted diluted earnings per share

8.53p

6.42p

13.56p

7.  Disposal of subsidiary

On 24 December 2021 the Group disposed of its financial training business, AMT with subsidiary companies in the UK, US and Hong Kong for a consideration of £23.4m. A gain of £16.1m arose on disposal after taking into account £0.4m costs of disposal. As at the disposal date, the net assets of the AMT companies were £6.9m.

8.  Related party transactions  

The Company and its wholly owned subsidiary undertakings offer certain group-wide purchasing facilities to the Company's other subsidiary undertakings whereby the actual costs are recharged. 

 

There were no (H1 FY21: £55,625) transactions with related parties of key management personnel in the period.

9.  Cash generated from operations


Six months ended

31 December 2021

Six months ended

31 December 2020

Year ended

30 June
 2021


(unaudited)

(unaudited)

(audited)


£'000

£'000

£'000





Profit/(loss) from continuing operations before tax

24,588

5,496

(2,025)

Net gain on office consolidation

(758)

-

-

Gain on disposal of business operations

-

-

(3,394)

Gain on disposal of a subsidiary

(16,115)

(770)

(770)

Adjusting items

(22)

580

2,970

Depreciation of property, plant and equipment

1,217

1,700

3,399

Amortisation of intangible assets

1,967

2,764

5,816

Impairment of goodwill, intangible assets and property, plant and equipment

597

-

14,834

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

(40)

1

2

Share based payments (including social security costs)

536

529

566

Net finance costs

551

783

1,634

Operating cash flows before movements in working capital

12,521

11,083

23,032

Decrease/(increase) in trade and other receivables

2,905

2,319

(3,619)

Decrease in trade and other payables

(3,898)

(4,199)

(2,123)

Decrease in provisions

(154)

-

-

Cash generated from operations before adjusting items

11,374

9,203

17,290





 

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


Six months ended

31 December 2021

(unaudited)

£'000

Six months ended

31 December 2020

 (unaudited)

£'000

Year ended

30 June

  2021

(audited)

£'000

Funds from operations before adjusting items:




Adjusted EBITA (note 4)

10,024

7,789

16,649

Share based payments (including social security costs)

536

529

566

Amortisation of intangible assets - computer software

784

1,064

2,416

Depreciation of property, plant and equipment included in operating expenses

1,217

1,700

3,399

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

(40)

1

2

Operating cash flows before movements in working capital

12,521

11,083

23,032

Net working capital movement

(1,147)

(1,880)

(5,742)

Funds from operations before adjusting items

11,374

9,203

17,290

Cash conversion

113%

118%

104%


Free cash flows:




Operating cash flows before movement in working capital

12,521

11,083

23,032

Proceeds on disposal of property, plant and equipment

3,439

7

103

Net working capital movement

(1,147)

(1,880)

(5,742)

Interest paid

(302)

(763)

(1,196)

Payment of lease liabilities

(1,095)

(1,285)

(2,530)

Tax paid

(1,805)

(1,169)

(2,697)

Purchase of property, plant and equipment

(275)

(455)

(1,047)

Purchase of intangible assets

(988)

(1,422)

(1,969)

Free cash flows

10,348

4,116

7,954

 

 

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