Half-year Report

Wilmington PLC
19 February 2024
 

19 February 2024

Wilmington plc

 

Sustained double digit profits 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 2023 (H1 FY24).

 

Financial performance

 


H1 FY24

H1 FY23

Change

Continuing results[1]




Revenue

£41.4m

£38.6m

7%

Adjusted PBT[2]

£8.1m

£6.6m

23%

Adjusted basic EPS[3]

6.86p

6.10p

12%

Interim dividend

3.00p

2.70p

11%





Statutory results




Revenue (total)

£59.1m

£57.4m

 

PBT (total)

£10.1m

£10.0m

 

Basic EPS

8.00p

9.40p

 

Adjusted basic EPS

9.17p

8.11p

 

 

Highlights

·      Strong continuing and organic revenue growth, both up 7% - driven by strong demand in Training & Education and Financial Services in Intelligence division

§ Recurring revenue from continuing businesses up 11%, underpinned by strong retention rates

§ Repeat revenues, including recurring revenues of 36%, now 73% of continuing revenues (77% in FY23), due to billing timing

·      Continuing adjusted profit before tax up 23% to £8.1m  

·      Dividend increased by 11% in line with profits

·      Robust balance sheet - net cash[4] at 31 Dec 23 of £28.0m (31 Dec 22: £22.9m; 30 Jun 23: £42.2m)

·      Continuing active portfolio management: acquisition of Astutis for £21.5m (Nov '23), disposal of MiExact for £9.6m (Jan '24) and initiated sale process of Healthcare business in Nov '23

·      Significant progress made in establishing single Training and Education technology platform this financial year

 

Mark Milner, Chief Executive Officer, commented:

 

"H1 was another period of strong sustainable organic growth, both for revenue and profits as well as continued good cash generation, across all of our continuing businesses. We have a notably strong balance sheet which leaves us well placed to continue to invest across the business, in both organic and inorganic opportunities.

 

"We continue to actively manage our portfolio of businesses with one earnings enhancing acquisition and one disposal. We have also initiated a sale process for our Healthcare division, after a period of restructuring which put that business in a much stronger position.

 

"Our strategy is clear: to grow the business profitably across the rapidly expanding GRC landscape by a combination of acquisitions, which provide attractive returns on investment, and investing in our operations and infrastructure, as well as actively managing our portfolio in line with our required characteristics. 

 

"Trading in the current financial year continues to be in line with expectations."

 

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, contact:


Wilmington plc  

Mark Milner, Chief Executive Officer

Guy Millward, Chief Financial Officer

020 7422 6800

 

Meare Consulting

Adrian Duffield

07990 858548

 

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.

 

Overview

 

We have continued to deliver solid and sustainable organic revenue growth and double-digit profit improvement whilst also investing in our portfolio of businesses and infrastructure. Demand has been particularly strong in our Training & Education division and in Financial Services within our Intelligence division.

 

Continuing revenue was up 7% at £41.4m with organic revenue growth of 7%, after removing the impact of currency movements. Reported total Group revenue, including business sold and discontinued, was £59.1m (H1 FY23: £57.4m).

 

Recurring revenues from continuing businesses grew 11% with strong retention rates continuing, highlighting the resilience of the Group's business model. Recurring revenues represent 36% of total ongoing revenues (34% in H1 FY23). Repeat continuing revenues, including the recurring revenues from existing customers, made up 73% of our revenues in H1 FY24 (77% in FY23). This small reduction reflects the timing of billings, not a decrease of repeat business.

 

With further margin improvements in the Intelligence division, continuing adjusted profit before tax was up 23% to £8.1m (H1 FY23: £6.6m) and continuing adjusted basic earnings per share by 12% to 6.86p (H1 FY23: 6.10p).

 

Operating cash conversion remained strong at 92%, with net cash excluding lease liabilities of £28.0m (30 June 2023: £42.2m). Usual first half outflows of working capital will be offset by increased revenue collections in H2, when most subscriptions are billed and collected.

 

The Group acquired Astutis in November 2023 to deliver on our strategy to consolidate and strengthen our presence in the GRC market.

 

The interim dividend is being increased by 11% to 3.00p (H1 FY23: 2.70p), in line with continuing profits.   

 

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 brands.

 

We focus 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: a GRC focus operating in regulated markets, a differentiated offering, attractive markets, strong leadership, digital and data capabilities and a strong financial model exhibiting growth and strong profitability.

 

The acquisition of Astutis in November 2023 meets all six of these characteristics and brings continuing revenue and profit growth to the Group. The business has demonstrated a strong track record of organic growth over a number of years and strengthens our portfolio of GRC training and education solutions by expanding our capabilities into the attractive Health, Safety and Environmental markets. The acquisition is expected to be earnings enhancing in the first full year of ownership.

 

In January 2024, we have sold MiExact from our Intelligence division for £9.6m in cash as the business had been identified as not meeting the six characteristics. We have also decided to sell our Healthcare businesses for the same reason. The process for that disposal is well underway.

 

We intend to use our capital to acquire suitable GRC businesses to enhance and widen the Group's capabilities and rate of profitable growth to improve shareholder returns, although will continue to remain disciplined as valuation expectations remain high. We will continue to apply high levels of scrutiny in respect of target suitability and multiples paid.

 

We continue to invest in our priority ESG initiatives, as our responsible business strategy underpins the delivery of our broader strategic objectives.

 

Current trading and outlook

 

Trading in the current financial year continues to be in line with expectations.

 

Divisional review

 

Training & Education

 

 

H1 FY24

£'m

H1 FY23

£'m

Absolute

Variance

Organic

Variance

Revenue





Global

13.1

11.8

11%

7%

UK & Ireland

12.7

11.9

8%

8%

North America

5.0

4.9

1%

8%

Continuing revenue

30.8

28.6

8%

8%

Operating profit

6.5

6.2

5%

7%

Margin

22%

22%

 

 




 

 

Total revenue including Astutis

30.8

28.6

8%

 

Total operating profit

6.5

6.2

5%

 

 

Continuing revenues grew 8% organically. This was led by a strong performance in UK and Ireland where, in particular, Bond Solon in the Legal sector saw strong demand for its services. Repeat revenues increased to 72% (H1 FY23 - 71%) of the total.

 

North America grew at 8% when currency fluctuations are excluded, with growth in delegate attendance of events boosting revenues. In Global, growth was led by the European sales, which continued to see strong demand from the financial services market.

 

Organic operating profit increased by 7% as a result of organic revenue growth. Profit margins remain at 22% and are expected to increase in H2 when the majority of revenue in North America is delivered.

 

Statutory figures include a small contribution from Astutis for the first few weeks of ownership. In the 12-month period to 30 June 2023, Astutis reported unaudited revenues of £7.4m and profit before tax of £2.0m.

 

We have made significant progress in establishing a single Training and Education technology platform with the main project delivering this financial year.

 

Intelligence

 

 

H1 FY24

£'m

H1 FY23

£'m

Absolute

Variance

Organic

Variance

Continuing businesses





Revenue





Financial Services & Other

10.6

10.0

5%

4%

Operating profit

3.9

3.3

18%

15%

Margin

37%

33%



Discontinued/sold businesses Revenue





Healthcare

15.2

15.1

1%

 

MiExact

2.5

2.3

7%

 

Inese

-

1.4

-

 

Total revenue

28.3

28.8

(2%)

 




 

 

Total operating profit

6.8

5.8

18%

 

 

Continuing revenues in the Intelligence division are now focussed on Financial Services, where growth has been maintained with continuing strong demand from customers, particularly in the Insurance sector.

 

Recurring revenues grew 11% and repeat revenues decreased to 73% of the total (H1 FY23 - 83%) due to billing timing (repeat revenues are measured on billing). Profit margins also improved as we continue to invest in automation.

 

Healthcare has been classified as a discontinued operation under IFRS 5 because it is in the process of being sold. MiExact has been sold but does not qualify as a discontinued operation under IFRS 5 because it does not meet the criteria of being a significant line of business.

 

The sale and identification for sale of lower margin businesses has resulted in a notable improvement in margins in the division.

 

Financial review

 

Other income and finance income

 

Other income represents a gain of £0.8m from the sale of a building (H1 FY23: £2.2m from the disposal of a subsidiary, Inese). 

 

Net finance income of £0.8m (H1 FY23: £0.0m) was achieved due to having no debt and cash to deposit in interest-bearing accounts.

 

Profit before taxation

 

Continuing adjusted profit before tax was up 23% to £8.1m (H1 FY23: £6.6m) with statutory continuing profit before tax of £8.1m (H1 FY23: £8.8m).

 

Taxation

 

The underlying tax rate[5], which ignores the tax effects of adjusting items, is 25% (H1 FY23: 19%). The increase reflects the UK corporation tax increase to 25%.

 

The tax charge excluding discontinued operations is £2.3m (H1 FY23: £1.2m) with an overall effective tax rate[6] of 28% (H1 FY23: 13%). The lower effective tax rate in the prior period was due to the lower UK corporation tax rate and other income (from the sale of a subsidiary) being non-taxable. The current year tax charge includes tax on the sale of a building. 

 

Earnings per share

 

Continuing adjusted basic earnings per share, excluding the results of sold and discontinued businesses, increased by 12% to 6.86p (H1 FY23: 6.10p), reconciliation below. Reported earnings per share 8.00p (H1 FY23: 9.40p).

 


H1 FY24

£'m

H1 FY23

£'m


Adjusted earnings (note 6)

6.4

5.9


Remove profit after tax of sold and discontinued businesses

(0.3)

(0.5)


Continuing adjusted earnings

6.1

5.4







Number

Number

Variance

Weighted average number of ordinary shares (note 6)

88,964,817

88,027,119






Continuing adjusted basic earnings per share

6.86p

6.10p

12%

 

Dividend

 

The Board has increased the interim dividend by 11% to 3.00p (H1 FY23: 2.70p), in line with profits. It will be paid on 10 April 2024 to shareholders on the share register as at 1 March 2024, with an associated ex-dividend date of 29 February 2024. 

 

Balance sheet and cashflow

 

Cash generation improved due to the strong trading performance with operating cash conversion remaining strong at 92%, with net cash excluding lease liabilities of £28.0m (30 June 2023: £42.2m).

 

Responsibility statement of the Directors in respect of the half year results to 31 December 2023

 

We confirm that, to the best of our knowledge:

 

·      The Condensed set of financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting

·      The interim management report includes a fair review of the information required by DTR 4.2.7R and DTR 4.2.8R.

 

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial information differs from legislation in other jurisdictions.

 

Consolidated Income Statement

 


Notes

Six months

ended

31 December

2023

(unaudited)

£'000

 

Six months

ended

31 December

2022

(unaudited)

£'000


Year

ended

30 June

2023

(audited)

£'000

Continuing operations


 

 



 

Revenue

5

43,909

 

42,418


93,065



 

 




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


(36,254)

 

(35,192)


(73,792)

Amortisation of intangible assets excluding computer software

4

(483)

 

(556)


(1,078)

Adjusting items

4

(674)

 

(45)


(147)

Operating expenses


(37,411)

 

(35,793)


(75,017)

 


 

 




Other income - gain on disposal of property, plant and equipment


820

 

-


-

Other income - gain on disposal of subsidiaries


-

 

2,212


2,212



 

 




Operating profit


7,318

 

8,837


20,260



 

 




Finance income


927

 

297


478

Finance expense


(96)

 

(285)


(246)



 

 




Profit before tax

4

8,149

 

8,849


20,492

 


 

 




Taxation


(2,297)

 

(1,177)


(3,470)

 


 

 




Profit for the period from continuing operations


5,852

 

7,672


17,022

Profit for the period from discontinued operations


1,266

 

600


3,173

Profit for the period attributable to owners of the parent


7,118

 

8,272


20,195

 


 

 




Earnings per share from continuing and discontinued operations:


 

 




Basic (p)

6

8.00p

 

9.40p


22.94p

Diluted (p)

6

7.85p

 

9.19p


22.38p



 

 




Earnings per share from continuing operations:


 

 




Basic (p)

6

6.58p

 

8.72p


19.34p

Diluted (p)

6

6.47p

 

8.54p


18.89p

 

Consolidated Statement of Comprehensive Income

 


Six months

ended

31 December

2022

Year

ended

30 June

2023


(unaudited)

(audited)


£'000

 

£'000

 

£'000

 

Profit for the period

8,272

20,195

Other comprehensive income/(expense):

Items that may be reclassified subsequently to the Income Statement

 



Currency translation differences

8

(991)

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

253

8

(991)

Total comprehensive income for the period attributable to owners of the parent

 

7,371

 

8,280

19,204

 

Consolidated Balance Sheet 

 

 

 

31 December

2023

31 December

2022

30 June

2023



(unaudited)

(unaudited)

(audited)



£'000

£'000

£'000

Non-current assets


 



Goodwill


60,993

61,237

60,561

Intangible assets


9,763

8,300

5,734

Property, plant and equipment


5,075

8,192

7,015

Deferred consideration receivable


899

1,304

1,152

Deferred tax assets


148

1,648

925



76,878

80,681

75,387

Current assets


 



Trade and other receivables


20,790

29,771

27,391

Deferred consideration receivable


500

677

752

Current tax assets


-

1,100

-

Cash and cash equivalents


23,875

22,922

42,173

Assets of disposal groups held for sale


27,031

-

-



72,196

54,470

70,316

Total assets


149,074

135,151

145,703

 


 



Current liabilities


 



Trade and other payables


(45,385)

(51,252)

(55,966)

Lease liabilities


(1,413)

(1,478)

(975)

Current tax liabilities


(86)

-

(44)

Provisions


(307)

(307)

(307)

Liabilities of disposal groups held for sale


(11,797)

-

-



(58,988)

(53,037)

(57,292)



 



Non-current liabilities


 



Lease liabilities


(4,478)

(8,140)

(6,235)

Deferred tax liabilities


(1,525)

(1,469)

(607)

Provisions


(768)

(1,075)

(921)



(6,771)

(10,684)

(7,763)

Total liabilities


(65,759)

(63,721)

(65,055)

Net assets


83,315

71,430

80,648

 


 



Equity


 



Share capital


4,479

4,408

4,408

Share premium


47,463

45,553

45,553

Treasury and ESOT reserves


(703)

(880)

(786)

Share based payments reserve


2,058

2,131

2,635

Translation reserve


3,684

4,430

3,431

Retained earnings


26,334

15,788

25,407

Total equity


83,315

71,430

80,648

 





 

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

£'000

Total

equity

£'000

 

 





 

At 30 June 2022 (audited)

48,851

2,141

4,422

11,675

67,089

Profit for the period

-

-

-

8,272

8,272

Other comprehensive income for the period

-

-

8

-

8


48,851

2,141

4,430

19,947

75,369

Dividends paid

-

-

-

(5,091)

(5,091)

Issue of share capital

17

-

-

-

17

Performance share plan awards vesting

-

(717)

-

875

158

Save As You Earn options settlement via ESOT

86

(11)

-

(16)

59

Save As You Earn options settlement via treasury shares

127

-

-

(64)

63

Share based payments

-

718

-

-

718

Tax on share based payments

-

-

-

137

137

At 31 December 2022 (unaudited)

49,081

2,131

4,430

 

15,788

71,430

Profit for the period

-

-

-

11,923

11,923

Other comprehensive expense for the period

-

-

(999)

-

(999)

 

49,081

2,131

3,431

27,711

82,354

Dividends paid

-

-

-

(2,371)

(2,371)

Issue of share capital

-

-

-

-

-

Performance share plan awards vesting

-

-

-

(21)

(21)

Save As You Earn options settlement via ESOT

68

-

-

-

68

Save As You Earn options settlement via treasury shares

26

-

-

-

26

Share based payments

-

504

-

-

504

Tax on share based payments

-

-

-

88

88

 

At 30 June 2023 (audited)

49,175

2,635

3,431

25,407

80,648

Profit for the period

-

-

-

7,118

7,118

Other comprehensive income for the period

-

-

253

-

253


49,175

2,635

3,684

32,525

88,019

Dividends paid

-

-

-

(6,473)

(6,473)

Issue of share capital

71

-

-

-

71

Issue of share premium

1,910

-

-

-

1,910

Performance share plan awards vesting settlement via share issue

-

(1,109)

-

(139)

(1,248)

Performance share plan options settlement via ESOT

67

(67)

-

-

-

Save As You Earn options vesting settlement via share issue

-

(174)

-

212

38

Save As You Earn options settlement via ESOT

16

(16)

-

-

-

Share based payments

-

789

-

-

789

Tax on share based payments

-

-

-

209

209

At 31 December 2023 (unaudited)

51,239

2,058

3,684

26,334

83,315

 

Consolidated Cash Flow Statement

 

 


Six months

ended

31 December

2023

Six months

ended

31 December

2022

Year

ended

30 June

2023



(unaudited)

(unaudited)

(audited)


Notes

£'000

£'000

£'000






Cash flows from operating activities


 



Cash generated from operations before adjusting items

11

9,299

10,925

33,205

Cash flows for adjusting items - operating activities


(535)

(4)

(375)

Cash flows from tax on share based payments


(222)

(3)

(2)

Cash generated from operations


8,542

10,918

32,828

Interest received


858

40

344

Tax paid


(3,557)

(2,468)

(3,268)

Net cash generated from operating activities


5,843

8,490

29,904



 



Cash flows from investing activities


 



Disposal of subsidiaries net of cash


-

-

1,549

Purchase of businesses net of cash acquired


(14,749)

-

-

Disposal of cash held in subsidiary


-

(737)

-

Deferred consideration received


552

125

250

Cash flows for adjusting items - investing activities


(124)

(6)

(6)

Purchase of property, plant and equipment


(77)

(131)

(461)

Proceeds from disposal of property, plant and equipment


884

10

13

Purchase of intangible assets


(471)

(436)

(595)

Net cash (used in)/generated from investing activities


(13,985)

(1,175)

750

 


 



Cash flows from financing activities


 



Dividends paid to owners of the parent


(6,473)

(5,091)

(7,462)

Cash received from sale of shares for share vesting


927

587

573

Share issuance costs


(70)

(14)

(14)

Payment of lease liabilities


(399)

(347)

(2,109)

Net cash used in financing activities


(6,015)

(4,865)

(9,012)

 

 

 



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


(14,157)

2,450

21,642

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


42,173

 

20,543

20,543

Exchange gain/(loss) on cash and cash equivalents


5

(71)

(12)

Cash and cash equivalents, net of bank overdrafts at end of the period from continuing and discontinued operations


28,021

22,992

42,173

 


 



Reconciliation of net cash


 



Cash and cash equivalents at beginning of the period


42,173

19,785

19,785

Cash classified as held for sale at beginning of the period


-

758

758

Lease liabilities at beginning of the period


(7,210)

(7,510)

(7,510)

Net cash at beginning of the period


34,963

13,033

13,033

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


(14,152)

2,379

21,630

Movement in lease liabilities


1,319

(2,108)

300

Cash and cash equivalents at end of the period


23,875

22,922

42,173

Cash classified as held for sale at end of the period


4,146

-

-

Lease liabilities at end of the period


(5,891)

(9,618)

(7,210)

Net cash at end of the period


22,130

13,304

34,963

 


 



 

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, education and training in the global Governance, Risk and Compliance ('GRC') markets.

 

This condensed consolidated interim financial information ('Interim Information') was approved for issue by the Board of Directors on 16 February 2024.

 

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 2023 were approved by the Board of Directors on 22 September 2023 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 2023 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 2023 which have been prepared in accordance with UK adopted international accounting standards ('UK adopted IAS') 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 its 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 2023.

 

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 41 to 49 of the strategic report in the Annual Report and Financial Statements for the year ended 30 June 2023.

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:

 

·      amortisation of intangible assets excluding computer software;

·      adjusting items (included in operating expenses);

·      other income - gain on disposal of subsidiaries;

·      other income - gain on disposal of property, plant and equipment; and

·      net finance income.

 

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

 

  From continuing operations:

Six months 

ended

31 December

2023

(unaudited)

£'000

Six months 

ended

31 December

2022

(unaudited)

£'000

Year

ended

30 June

2023

(audited)

£'000

Profit before tax

8,149

8,849

20,492

Amortisation of intangible assets excluding computer software

483

556

1,078

Adjusting items (included in operating expenses)

674

45

147

Other income - gain on disposal of property, plant and equipment

(820)

-

-

Other income - gain on disposal of subsidiaries

-

(2,212)

(2,212)

Adjusted profit before tax

8,486

7,238

19,505

Net finance income

(831)

(12)

(232)

Adjusted operating profit ('adjusted EBITA')

7,655

7,226

19,273

Depreciation of property, plant and equipment included in operating expenses

820

1,063

2,121

Amortisation of intangible assets - computer software

179

328

1,525

Adjusted EBITA before depreciation ('adjusted EBITDA')

8,654

8,617

22,919


 



  Adjusted profit before tax

8,486

7,238

19,505

  Remove operating profit from sold, closed & discontinued businesses

(379)

(620)

(1,371)

Continuing adjusted profit before tax

8,107

6,618

18,134

 

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

2023

(unaudited)

£'000

Six months

ended

31 December

2022

 (unaudited)

£'000

Year

ended

30 June

2023

(audited)

£'000


 



Expense relating to strategic activities

674

45

147

Adjusting items (included in operating expenses)

674

45

147

Amortisation of intangible assets excluding computer software

483

556

1,078

Total adjusting items (classified in profit before tax)

                   1,157

601

1,225

 

5.     Segmental information

 

In accordance with IFRS 8 the Group's operating segments are based on the operating results reviewed by the Executive 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 Intelligence) are the Group's segments and generate all of the Group's revenue. The Executive 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), USA and the Rest of the World.

 

(a)   Business segments

 


Six months ended

31 December 2023

(unaudited)

Six months ended

31 December 2022

(unaudited)

Year ended

30 June 2023

(audited)

From continuing operations:

Revenue

£'000

Contribution

 £'000

Revenue

£'000

Contribution

 £'000

Revenue

 £'000

Contribution

 £'000

Training & Education

30,838

6,510

28,581

6,221

64,872

16,066

Intelligence

13,071

4,282

13,837

3,936

28,193

8,425

Total continuing

43,909

10,792

42,418

10,157

93,065

24,491

Unallocated central overheads

-

(2,188)

-

(2,155)

-

(3,703)

Share based payments

-

(949)

-

(776)

-

(1,515)


43,909

7,655

42,418

7,226

93,065

19,273

Amortisation of intangible assets excluding computer software

 

(483)


(556)


(1,078)

Adjusting items (included in operating expenses)

 

(674)


(45)


(147)

Other income - gain on disposal of property, plant and equipment

 

820


-


-

Other income - gain on disposal of subsidiaries

 

-


2,212


2,212

Net finance income

 

831


12


232

Profit before tax from continuing operations

 

8,149


8,849


20,492

Taxation

 

(2,297)


(1,177)


(3,470)

Profit for the financial period from continuing operations

 

5,852


7,672


17,022

 

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, this 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

2023

Six months

ended

31 December

2022

 

(unaudited)

(unaudited)

From continuing operations:

£'000

£'000

£'000

UK

25,284

 21,432

49,441

Europe (excluding the UK)

5,295

 5,700

USA

8,686

 10,901

Rest of the World

4,644

 4,385

9,093

Continuing revenue

43,909

42,418

93,065

 

Sterling makes up the largest portion of our ongoing revenue. In the current period 16% of revenue was derived in US dollars, no other currency was material.

 

6.     Earnings per share

 

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

 

·      amortisation of intangible assets excluding computer software;

·      adjusting items (included in operating expenses);

·      other income - gain on disposal of subsidiaries;

·      other income - gain on disposal of property, plant and equipment; and

·      net finance income.

 

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

 


Six months

ended

31 December 2023

Six months

ended

31 December 2022

Year

ended

30 June
2023


(unaudited)

(unaudited)

(audited)

Continuing operations:

£'000

£'000

£'000

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

5,852

7,672

17,022

Add/(remove):

 



Amortisation of intangible assets excluding computer software

483

556

1,078

Adjusting items (included in operating expenses)

674

45

147

Other income - gain on disposal of property, plant and equipment

(820)

-

-

Other income - gain on disposal of subsidiaries

-

(2,212)

(2,212)

Tax effect of adjustments above

194

(176)

(1,598)

Adjusted earnings for the purposes of adjusted earnings per share

6,383

5,885

14,437


 



Continuing and discontinued operations:

£'000

£'000

£'000

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

7,118

8,272

20,195

Add/(remove):

 



Amortisation of intangible assets excluding computer software

996

1,208

2,381

Adjusting items (included in operating expenses)

674

45

147

Other income - gain on disposal of property, plant and equipment

(820)

-

-

Other income - gain on disposal of subsidiaries

-

(2,212)

(2,212)

Tax effect of adjustments above

194

(176)

(1,598)

Adjusted earnings for the purposes of adjusted earnings per share

8,162

7,137

18,913


 



Continuing operations:

Number

Number

Number

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

88,964,817

88,027,119

88,027,119


 



Effect of dilutive potential ordinary shares:

 



Future exercise of share awards and options

1,530,678

1,845,782

2,096,729

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

90,495,495

89,872,901

90,123,848


 



Continuing and discontinued operations:

Number

Number

Number

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

88,964,817

88,027,119

88,027,119


 



Effect of dilutive potential ordinary shares:

 


 

Future exercise of share awards and options

1,704,638

1,966,227

2,217,174

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

90,669,455

89,993,346

90,244,293


 



Continuing operations:

 



Basic earnings per share

6.58p

8.72p

19.34p

Diluted earnings per share

6.47p

8.54p

18.89p

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

7.17p

6.69p

16.40p

Adjusted diluted earnings per share

7.05p

6.55p

16.02p

 

 



Continuing and discontinued operations:

 



Basic earnings per share

8.00p

9.40p

22.94p

Diluted earnings per share

7.85p

9.19p

22.38p

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

9.17p

8.11p

21.49p

Adjusted diluted earnings per share

9.00p

7.93p

20.96p

 

7.     Acquisition of Astutis

 

On 23 November 2023, the Group acquired 100% of the issued share capital of Astutis Limited ("Astutis"), a Company based in the United Kingdom, for an initial consideration of £16.8m. In addition, under the terms of the acquisition, there are two potential deferred payments of up to £4.7m based on Astutis' performance in each of the two years ending 30 June 2025 and 30 June 2026.

 

Astutis, which offers training for a range of globally recognised and regulated health, safety and environmental qualifications, strengthens Wilmington's portfolio of GRC training and education solutions by expanding its capabilities into the health, safety and environmental markets. The acquisition is part of Wilmington's strategy to focus on consolidating its already strong presence in the large, growing and rapidly evolving GRC markets. These markets are underpinned by strong macro drivers, particularly the increasing volume and enforcement of regulation, complex geopolitical landscape, increased importance of ESG and widespread adoption of technological and data-driven compliance solutions.

 

The process to measure the fair values of the assets acquired and liabilities assumed is not yet finalised in respect of the acquisition and accordingly the fair values measured at the acquisition date are provisional amounts. In accordance with IFRS 3 until the assessment is complete the measurement period will remain open up to a maximum of 12 months from the acquisition date so long as information remains outstanding.

 

Based on the provisional view, the fair value of the net assets acquired in the business at acquisition date was £7.8m, resulting in goodwill on acquisition of £12.4m. Acquisition related charges include transaction costs of £0.6m relating to the acquisition of Astutis. The results of the acquisition included in the Group's consolidated results are revenue of £0.6m and an operating result of £0.0m.

 

8.     Discontinued operations and disposal groups held for sale

 

During the period, the Healthcare and MiExact businesses, which are part of the Intelligence Division, have been classified as disposal groups held for sale under IFRS 5.

 

The Group is 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. Consequently, as a result of this assessment, the Board decided to exit the Healthcare and MiExact businesses.

 

Furthermore, the Healthcare business has been classified as a discontinued operation in the period with the financial results, including the comparatives, presented separately. The operation meets the IFRS 5 definition as a discontinued operation due to it being a separate major line of business and part of single coordinated disposal plan.

 

The major classes of assets and liabilities comprising the disposal groups held for sale are as follows:

 

 

31 December 2023

(unaudited)

£'000

Goodwill

11,897

Intangible assets

1,834

Property, plant and equipment

1,512

Trade and other receivables

7,246

Deferred tax asset

234

Current tax asset

162

Cash and cash equivalents

4,146

Assets of disposal groups held for sale

27,031


 

Trade and other payables

(10,440)

Lease liabilities

(1,357)

Liabilities of disposal groups held for sale

(11,797)

 

The table below shows the results of the discontinued operation, which is included separately in the Consolidated Income Statement.

 


Six months

ended

31 December

2023

(unaudited)

£'000

Six months

ended

31 December

2022

(unaudited)

£'000

Year

ended

30 June

2023

(unaudited)

£'000

Healthcare

 

 

 

Revenue

15,172

 15,007

30,432

Operating expenses before amortisation of intangibles excluding computer software

(12,665)

(13,175)

(25,599)

Amortisation of intangible assets excluding computer software

(513)

(652)

(1,303)

Operating expenses

(13,178)

(13,827)

(26,902)

Operating profit

1,994

1,180

3,530

Profit before tax

1,994

1,180

3,530

Taxation

(728)

(580)

(357)

Profit after tax

1,266

600

3,173

 


Six months

ended

31 December

2023

(unaudited)

Six months

ended

31 December

2022

(unaudited)

Year

ended

30 June 2023

(unaudited)


£'000

£'000

£'000

Healthcare




Net cash (used in)/generated from operating activities

(2,825)

76

4,070

Net cash used in investing activities

(8)

(16)

(164)

Net cash used in financing activities

(93)

(88)

(176)

Net (decrease)/increase in cash & cash equivalents

(2,926)

(28)

3,730

 

9.     Events after the reporting period

 

On 31 January 2024, the MiExact business was sold for consideration of £9.6m in cash, subject to working capital adjustments. The consideration consists of £6.6m of cash on completion and £3.0m of loan notes with a 7% coupon, deferred for up to three years. At the date of this announcement, the initial accounting for the business disposal is incomplete and accordingly, the Group has not finalised the gain on disposal.

 

10.  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 FY23: £nil) transactions with related parties of key management personnel in the period.

 

11.  Cash generated from operations

 


Six months

ended

31 December 2023

Six months

ended

31 December 2022

Year

ended

30 June
 2023


(unaudited)

(audited)


£'000

£'000

£'000

From continuing and discontinued operations:

 


Profit before tax from continuing operations

8,149

20,492

Profit before tax from discontinued operations

1,994

3,530

Adjusting item - gain on disposal of subsidiaries

-

(2,212)

Adjusting item - gain on disposal of property, plant and equipment

(820)

-

Adjusting items (included in operating expenses)

674

147

Depreciation of property, plant and equipment

925

2,321

Amortisation of intangible assets

1,186

4,071

Non-adjusting profit on disposal of property, plant and equipment

-

(36)

Share based payments (including social security costs)

949

1,515

Net finance income

(831)

(12)

(232)

Operating cash flows before movements in working capital

12,226

29,596

Decrease/(increase) in trade and other receivables

1,172

(107)

(Decrease)/increase in trade and other payables

(3,946)

4,023

Decrease in provisions

(153)

(153)

(307)

Cash generated from operations before adjusting items

9,299

10,925

33,205


 


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

 


Six months ended

31 December 2023

(unaudited)

£'000

Six months ended

31 December 2022

 (unaudited)

£'000

Year

ended

30 June

  2023

(audited)

£'000

From continuing and discontinued operations:

Funds from operations before adjusting items:




Adjusted EBITA from continuing operations (note 4)

7,655

7,240

19,273

Adjusted EBITA from discontinued operations

2,507

1,818

4,833

Share based payments (including social security costs)

949

776

1,515

Amortisation of intangible assets - computer software

190

411

1,690

Depreciation of property, plant and equipment included in operating expenses

925

1,163

2,321

Non-adjusting profit on disposal of property, plant and equipment

-

(11)

(36)

Operating cash flows before movements in working capital

12,226

11,397

29,596

Net working capital movement

(2,927)

(472)

3,609

Funds from operations before adjusting items

9,299

10,925

33,205

Cash conversion

92%

121%

138%

Free cash flow:

 


 

Operating cash flows before movement in working capital

12,226

11,397

29,596

Proceeds on disposal of property, plant and equipment

884

10

13

Net working capital movement

(2,927)

(472)

3,609

Interest received

858

40

344

Payment of lease liabilities

(399)

(347)

(2,109)

Tax paid

(3,557)

(2,468)

(3,268)

Purchase of property, plant and equipment

(77)

(131)

(461)

Purchase of intangible assets

(471)

(436)

(595)

Free cash flow

6,537

7,593

27,129

 



[1] Continuing - eliminating the effects of the impact of disposals; Organic - Continuing, eliminating acquisitions and exchange rate fluctuations

[2] Adjusted profit before tax - see note 4

[3] Continuing adjusted basic earnings per share - see the financial review; Adjusted basic earnings per share - see note 6

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

[5] 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

[6] The effective tax rate is calculated as the total tax charge divided by profit before tax

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