Interim Results

Wilmington Group Plc 27 February 2008 27 February 2008 WILMINGTON GROUP PLC ('Wilmington', 'the Group' or 'the Company') Interim Results for the six months to 31 December 2007 Wilmington Group plc, the professional information and training group, today announces its interim results for the six months to 31 December 2007. Highlights â€¢ Wilmington continues to make excellent progress with strong growth in revenue and profits, continued investment in new initiatives and further acquisitions to develop the portfolio of businesses â€¢ Revenue from continuing operations up 13% to Â£39.9 million (2006: Â£35.3 million) â€¢ Profit from continuing operations, before tax and amortisation, up 13.5% to Â£5.7 million (2006: Â£5.0m) â€¢ Adjusted basic earnings per share from continuing operations (before amortisation, share based payments and non-recurring items) up 13.9% to 4.50p (2006: 3.95p). â€¢ Dividend per share increased by 15% â€¢ Cash flow performance was very strong, with operating cash inflow increasing by 58% to Â£5.7m. Balance sheet remains strong. â€¢ Another strong performance by Legal and Regulatory division; new initiatives in Singapore progressing well â€¢ Business Information division continued to perform well â€¢ Restructuring and disposal of non-core activities completed in the first half; corporate activity over the last three years has significantly improved the overall quality of the Group portfolio â€¢ Acquisition of Matchett, a professional training business, completed during the period. Acquisition of AP Information Services, a specialist provider of information on pension funds and their advisers, completed this month â€¢ The full year outlook continues to be positive and Wilmington's markets offer excellent opportunities for the long term David Summers, Chairman, commented: 'Wilmington has made significant progress during the six months to December 2007 in achieving its strategic goals. We have delivered strong revenue and profit growth from continuing operations, as well as capital profits from the disposal of assets. We continue to invest in exciting new initiatives and have made further acquisitions to develop our portfolio of businesses.' 'As in previous years, we expect the Group's performance to be weighted significantly towards the second half of the financial year. Whilst we continue to be alert to trading conditions across our chosen markets, and the general economic outlook, we believe that our business is robust and is substantially underpinned by the provision of 'must have' information and training. The full year outlook for the Group continues to be positive and our markets offer excellent opportunities for the long term.' - ends - For further information, please contact: Wilmington Group Plc On the day: 020 7422 6800 Charles Brady, Chief Executive Basil Brookes, Finance Director Weber Shandwick Financial 020 7067 0700 Nick Oborne, Louise Robson or Charlie Hooper Notes to Editors Wilmington Group plc is one of the UK's leading providers of information and training for professional business markets. The Group provides training, arranges industry events and publishes magazines, directories, databases and special reports focused primarily on its two principal sectors of Legal and Regulatory, and Business Information which comprises Healthcare and Media businesses. Capitalised at approximately Â£165 million, Wilmington floated on the London Stock Exchange in 1995. WILMINGTON GROUP PLC Interim Management Report for the six months ended 31 December 2007 Results for the six months ended 31 December 2007 I am pleased to report that Wilmington continues to make excellent progress, with strong growth in both revenue and profitability being reported in the six months to 31 December 2007. Revenue in the six months to 31 December 2007 from continuing operations increased by 13.1% to Â£39.9m (2006: Â£35.3m). Profit from continuing operations, before taxation and amortisation increased by 13.5% to Â£5.7m (2006: Â£5.0m). Adjusted basic earnings per share from continuing operations (before amortisation, share based payments and non-recurring items) increased by 13.9% to 4.50p (2006: 3.95p). Our cash flow performance was very strong, with operating cash inflow increasing by 58% to Â£5.7m. The interim dividend for the current year has been increased by 15% to 2.3p per share (2006: 2.0p per share) and will be paid on 8 April 2008 to shareholders on the register on 7 March 2008. This increase reflects the Board's policy of maintaining a progressive divided policy and the underlying strength of the business and balance sheet. Net debt at 31 December 2007 was Â£14.8m (2006: Â£20.5m). Business Review Wilmington has made significant progress during the six months to December 2007 in achieving its strategic goals. We have delivered strong revenue and profit growth from continuing operations, as well as capital profits from the disposal of assets. We continue to invest in exciting new initiatives and have made further acquisitions to develop our portfolio of businesses. We announced in July 2007 that the Singapore Authorities had commissioned a major programme of compliance training and assessment. Since then we have established offices in Singapore, the first course programmes have been accredited by the Singapore authorities, and extensive course materials are being developed and expensed. The first tranche of courses commenced in January, with good delegate numbers. As we have previously highlighted, the development of the Singapore compliance programmes will require significant further budgeted investment during the current financial year. We are very pleased by the promising progress made to date and remain confident that this development will start to produce positive returns in the next financial year. We announced on 19 July 2007 that the company had decided to buy back Â£5m of its ordinary shares by market value. In September, following the disposal referred to below, we extended the buy back from the initial target of Â£5m to Â£12m of ordinary shares. At the close of business on 25 February 2008 we had purchased 1,472,000 shares and have paid Â£3.1m. The share buy back programme is ongoing. On 14 August 2007 we announced the completion of the disposal of Wilmington Media and Dewberry Redpoint for a cash consideration of Â£12m. I am pleased to report a modest capital profit on the sale, which is partly offset by normal seasonal losses from the discontinued businesses during July and the early part of August. As stated in the report and accounts for the year ended 30 June 2007, discontinued operations generated a profit before amortisation and taxation of Â£1.2m in the twelve months ended 30 June 2007. Whilst the principal risks and uncertainties remain substantially the same as those referred to in last year's Annual Report, as a consequence of the disposals we have substantially reduced our dependence on magazine display advertising and have retained strong information centric businesses with significant subscription revenues that historically have low cyclicality. On 27 November 2007 we announced the acquisition of 80% of the fully diluted share capital of the Matchett Group Limited ('Matchett'), a professional training business with particular emphasis on the annual graduate induction courses for major investment banks both in the UK and the US, for an initial cash consideration of Â£5.7m and the repayment of existing debt of Â£3.9m. The integration of Matchett into the CLT Group is progressing well. I am also pleased to report that Matchett has subsequently won a number of new contracts from investment banks, which bodes well for its prospects going forward. Legal and Regulatory The Legal and Regulatory division has delivered a strong performance in the six months ended 31 December 2007. Revenue has grown 14.3% to Â£32.2m (2006: Â£28.1m). The acquisition of Matchett, the launch of the Singapore compliance programme and other minor acquisitions have had only minimal impact on the revenues of the division for the half year. Underlying revenues from businesses owned at 31 December 2006 grew by 9.8% to Â£30.9m (2006:Â£28.1m) in the six months to 31 December 2007. Segmental profits, for the six months ended 31 December 2007 before central overheads and amortisation have increased by 9.8% to Â£6.4m (2006: Â£5.8m). Excluding the impact of the acquisitions and the Singapore launch underlying segmental profits before central overheads and amortisation increased by 13.0% to Â£6.6m (2006: Â£5.8m). The previously reported trend of growing Internet and digital revenues has continued and has enhanced the performance of our publishing business. In particular, Pendragon (pensions), for which revenues are entirely digital reported profits up 30.0% compared to the same period in the prior year. In February 2008 we acquired the Professional Information publisher, AP Information Services ('APIS') for a cash consideration of Â£5.8m. APIS, which is a leading provider of specialist information on pension funds and their advisers, will be integrated into Waterlow Professional Publishing. APIS is a highly complementary addition to both Waterlow and Pendragon. We have seen a robust performance from our continuing professional development programmes for lawyers. Bond Solon, which provides training in law for non lawyers, has also seen good growth, with strong forward sales momentum. The international programmes in trust, wealth management, compliance and anti money laundering remained buoyant despite the turbulence in the financial markets. Early indications for the acquisition of Matchett are positive, as the investment banks appear to be maintaining their graduate recruitment. Whilst investing in a number of new initiatives, including a small bolt on acquisition, Mercia has performed ahead of our expectations since its acquisition in October 2006. Business Information Wilmington Business Information has performed well despite the management time focussed on the disposal of non-core publishing assets during the period. Both Healthcare and Media divisions have performed strongly and overall revenue from Business Information grew by 8.3% to Â£7.8m (2006: Â£7.2m). Segmental profits from continuing operations before central overheads and amortisation grew to Â£0.8m (2006: Â£0.7m). The sale of Wilmington Media and Dewberry Redpoint has necessitated some restructuring of our Business Information division to segregate retained businesses from the disposed businesses, including the relocation of some of our continuing operations. This has now been substantially completed. Outlook Wilmington will continue to develop its position as a leading provider of training and information to key professional business markets. To facilitate growth we have strengthened our management team and infrastructure to create an effective and robust platform for expansion. We will continue to underpin our organic growth with strategic acquisitions and focussed investments. As in previous years, we expect the Group's performance to be weighted significantly towards the second half of the financial year. Whilst we continue to be alert to trading conditions across our chosen markets, and the general economic outlook, we believe that our business is robust and is substantially underpinned by the provision of 'must have' information and training. The full year outlook for the Group continues to be positive and our markets offer excellent opportunities for the long term. David L Summers Chairman 27 February 2008 Wilmington Group plc Consolidated Income Statement Six months Six months Twelve months ended ended ended 31 December 31 December 30 June 2007 2006 2007 (unaudited) (unaudited) (audited) Notes Â£'000 Â£'000 Â£'000 Revenue 1 39,946 35,333 81,453 Cost of sales (13,698) (12,309) (27,064) --------------------------------------- Gross profit 26,248 23,024 54,389 Operating expenses excluding amortisation (20,093) (17,435) (37,904) Amortisation (2,264) (1,981) (3,922) --------------------------------------- Profit from continuing operations before non-recurring items 3,891 3,608 12,563 Non-recurring items - 1,208 1,208 --------------------------------------- Profit from continuing operations after non-recurring items 3,891 4,816 13,771 Finance costs (485) (592) (1,239) --------------------------------------- Profit on ordinary activities before taxation 3,406 4,224 12,532 Income tax expense 2 (974) (1,278) (3,343) --------------------------------------- Profit on ordinary activities after taxation 2,432 2,946 9,189 (Loss)/profit on discontinued operations after taxation 3 (169) (38) 696 --------------------------------------- Net profit for the period 2,263 2,908 9,885 ======================================= Attributable to equity holders of the parent 2,025 2,724 9,246 ======================================= Minority interest 238 184 639 ======================================= Earnings per share attributable to equity holders of the parent Continuing operations: 5(a) Basic earnings per share 2.62p 3.29p 10.18p Diluted earnings per share 2.61p 3.29p 10.14p Adjusted basic earnings per share 4.50p 3.95p 12.44p Continuing and discontinued 5(b) operations: Basic earnings per share 2.41p 3.25p 11.01p Diluted earnings per share 2.41p 3.24p 10.97p Adjusted basic earnings per share 4.35p 4.22p 13.90p Consolidated Statement of Recognised Income and Expense Six months Six months Twelve months ended 31 ended 31 ended 30 December December June 2007 2006 2007 (unaudited) (unaudited) (audited) Â£'000 Â£'000 Â£'000 Exchange differences on translation of foreign operations (5) (21) - Interest rate swap (loss)/gain taken directly to equity (587) - 560 Actuarial (loss)/gain taken directly to equity - (11) 197 Capital reserve realised on disposal of businesses taken directly to equity 949 - - Tax on items taken directly to equity (109) 3 (227) --------------------------------------- Net income/(expense) recognised directly in equity 248 (29) 530 Net profit for the period 2,263 2,908 9,885 --------------------------------------- Total recognised income and expense for the period 2,511 2,879 10,415 ======================================= Attributable to Equity holders of the parent 2,273 2,695 9,776 Minority interests 238 184 639 --------------------------------------- 2,511 2,879 10,415 ======================================= Wilmington Group plc Consolidated Balance Sheet As at As at As at 31 December 31 December 30 June 2007 2006 2007 (unaudited) (unaudited) (audited) Â£'000 Â£'000 Â£'000 Non-current assets Goodwill 54,981 49,207 47,934 Intangible assets 37,936 37,336 31,615 Property, plant and equipment 8,133 11,442 8,131 Deferred tax asset 123 129 228 --------------------------------------- 101,173 98,114 87,908 --------------------------------------- Current assets Inventories 1,837 2,032 1,573 Trade and other receivables 19,534 19,694 24,192 Derivative financial asset - - 560 Cash 4,063 4,146 4,443 --------------------------------------- 25,434 25,872 30,768 --------------------------------------- Non-current assets held for sale - - 9,715 --------------------------------------- Total assets 126,607 123,986 128,391 --------------------------------------- Current liabilities Trade and other payables (31,580) (27,752) (35,122) Tax liabilities (1,942) (2,120) (2,649) Derivative financial liability (27) - - Bank overdrafts and loans (3,848) (4,673) (3,306) --------------------------------------- (37,397) (34,545) (41,077) --------------------------------------- Non-current liabilities Bank loans (15,000) (20,000) (13,000) Retirement benefit obligation - (246) (18) Deferred tax liability (7,674) (5,888) (5,188) --------------------------------------- (22,674) (26,134) (18,206) --------------------------------------- Total liabilities (60,071) (60,679) (59,283) --------------------------------------- Net assets 66,536 63,307 69,108 ======================================= Equity Share capital 4,216 4,208 4,208 Share premium account 43,204 42,977 43,006 Treasury shares (1,547) - - Capital reserve - 949 949 Translation reserve (16) (32) (11) Share option reserve 135 108 125 Retained earnings 17,598 13,300 18,677 --------------------------------------- Equity shareholders' funds 63,590 61,510 66,954 Minority interests 2,946 1,797 2,154 --------------------------------------- Total equity 66,536 63,307 69,108 ======================================= Wilmington Group plc Consolidated Cash Flow Statement Six months Six months Twelve ended 31 ended 31 months December December ended 30 2007 2006 June 2007 (unaudited) (unaudited) (audited) Â£'000 Â£'000 Â£'000 Note Net cash flow from operating activities 7 3,194 1,912 13,713 Investing activities Purchase of property, plant and equipment (478) (534) (1,092) Sale of property, plant and equipment 9 42 35 Purchase of subsidiary undertakings and minority (9,809) (7,210) (8,374) interests Cash acquired on purchase of subsidiary undertakings 123 966 1,534 Cash movement of disposal of subsidiary undertakings (783) - (32) Sale of subsidiary undertakings 10,200 - 696 Purchase of goodwill and intangible assets (520) (430) (1,370) Sale of intangible assets - - 28 --------------------------------------- Net cash used in investing activities (1,258) (7,166) (8,575) --------------------------------------- Financing activities Dividends paid to equity holders of the parent (3,352) (2,257) (3,940) Dividends paid to minority shareholders in (166) (218) (292) subsidiary undertakings Issue of ordinary shares 207 347 376 Purchase of treasury shares (1,547) - - Increase/(decrease) in long term loans 2,000 4,000 (3,000) --------------------------------------- Net cash flows from financing activities (2,858) 1,872 (6,856) --------------------------------------- Net (decrease) in cash and cash equivalents (922) (3,382) (1,718) Cash and cash equivalents at beginning of the period 1,137 2,855 2,855 --------------------------------------- Cash and cash equivalents at end of the period 215 (527) 1,137 ======================================= Notes to the Accounts 1. Segmental information Six months Six months Twelve months ended 31 ended 31 ended 30 December December June 2007 2006 2007 (unaudited) (unaudited) (audited) Â£'000 Â£'000 Â£'000 Revenue: Legal and Regulatory 32,152 28,138 65,319 Business Information 7,794 7,195 16,134 --------------------------------------- 39,946 35,333 81,453 ======================================= To allow shareholders to gain a better understanding of the trading performance of the Group, segmental results are shown both before and after allocating non-recurring costs and amortisation. Six months Six months Twelve months ended 31 ended 31 ended 30 December December June 2007 2006 2007 (unaudited) (unaudited) (audited) Â£'000 Â£'000 Â£'000 Note Segmental profit before amortisation: Legal and Regulatory 6,384 5,812 15,736 Business Information 811 716 2,969 --------------------------------------- Total segmental profit 7,195 6,528 18,705 Less:unallocated central overheads (1,040) (939) (2,220) --------------------------------------- Profit from continuing operations before amortisation and non-recurring items 6,155 5,589 16,485 Add:non-recurring items - 1,208 1,208 --------------------------------------- Profit from continuing operations after non-recurring items 6,155 6,797 17,693 Less: finance costs (485) (592) (1,239) --------------------------------------- Profit before taxation and amortisation 5,670 6,205 16,454 Less:amortisation (2,264) (1,981) (3,922) --------------------------------------- Profit on ordinary activities before taxation 3,406 4,224 12,532 Income tax expense 2 (974) (1,278) (3,343) (Loss)/profit on discontinued operations after taxation 3 (169) (38) 696 --------------------------------------- Net profit for the period 2,263 2,908 9,885 ======================================= Segmental profit after amortisation: Legal and Regulatory 4,728 4,502 12,985 Business Information 218 45 1,822 --------------------------------------- Total segmental profit 4,946 4,547 14,807 Less: unallocated central overheads including central amortisation (1,055) (939) (2,244) --------------------------------------- Profit from continuing operations before non-recurring items 3,891 3,608 12,563 Add: non-recurring items - 1,208 1,208 --------------------------------------- Profit from continuing operations after non-recurring items 3,891 4,816 13,771 Less: finance costs (485) (592) (1,239) --------------------------------------- Profit on ordinary activities before taxation 3,406 4,224 12,532 Tax on ordinary activities 2 (974) (1,278) (3,343) (Loss)/profit for the period from discontinued operations 3 (169) (38) 696 --------------------------------------- Net profit for the period 2,263 2,908 9,885 ======================================= 2. Income tax expense Six months Six months Twelve months ended 31 ended 31 ended 30 December December June 2007 2006 2007 (unaudited) (unaudited) (audited) Â£'000 Â£'000 Â£'000 The tax charge comprises: UK corporation tax at current rates 1,361 1,572 4,521 Adjustment to previous year 8 - (12) --------------------------------------- 1,369 1,572 4,509 Foreign tax 134 138 317 --------------------------------------- 1,503 1,710 4,826 Deferred tax credit (529) (432) (1,483) --------------------------------------- Income tax expense 974 1,278 3,343 ======================================= 3. (Loss)/profit for the period from discontinued operations As explained in note 6, the Company sold certain of its businesses in August 2007. The results of these businesses are treated as discontinued operations, their net result has been included in the consolidated Income Statement as the (loss)/profit on discontinued operations after tax, and the comparatives have been restated on a consistent basis. Their results are as follows: Six months Six months Twelve months ended 31 ended 31 ended 30 December December June 2007 2006 2007 (unaudited) (unaudited) (audited) Â£'000 Â£'000 Â£'000 Revenue 1,937 10,396 21,687 Expenses (2,147) (10,075) (20,503) --------------------------------------- (Loss)/profit before amortisation and taxation (210) 321 1,184 Amortisation (63) (376) (753) --------------------------------------- (Loss)/profit before taxation (273) (55) 431 Attributable tax credit/(charge) 82 17 (129) --------------------------------------- Net operating (loss)/profit attributable to discontinued operations (191) (38) 302 --------------------------------------- Profit on disposal of discontinued operations 496 - 246 Attributable tax (charge)/credit (474) - 148 --------------------------------------- 22 - 394 --------------------------------------- (Loss)/profit on discontinued operations after taxation (169) (38) 696 ======================================= In addition this disposal has resulted in the realisation of a capital reserve of Â£949,000 before taxation which is required to be recognised in equity rather than the Income Statement. 4. Dividends Amounts recognised as distributions to equity holders in the period. Six months Six months Twelve months Six months Six months Twelve months ended ended ended ended ended ended 31 December 31 December 30 June 31 December 31 December 30 June 2007 2006 2007 2007 2006 2007 (unaudited) (unaudited) (audited) (unaudited) (unaudited) (audited) Pence per share Pence per share Pence per share Â£'000 Â£'000 Â£'000 Final dividends recognised as distributions in the period 4.00 2.70 2.70 3,352 2,257 2,257 Interim dividends recognised as distributions in the period - - 2.00 - - 1,683 ------------------------------------------------------------------------------------------------- Total dividends 4.00 2.70 4.70 3,352 2,257 3,940 paid ================================================================================================= Dividend proposed 2.30 2.00 4.00 1,911 1,682 3,366 ================================================================================================= 5. Earnings per share To allow shareholders to gain a better understanding of the trading performance of the Group, an adjusted earnings per ordinary share has been calculated using an adjusted profit after taxation and minority interests but before amortisation of intangible assets, share based payments and post-taxation non-recurring costs. (a) From continuing operations The calculation of the basic and diluted earnings per share is based on the following data: Six months Six months Twelve ended 31 ended 31 months December December ended 30 2007 2006 June 2007 (unaudited) (unaudited) (audited) Â£'000 Â£'000 Â£'000 Earnings from continuing operations for the purpose of basic earnings per share excluding discontinued operations 2,194 2,762 8,550 Add: Amortisation (net of minority interest effect and deferred tax) 1,569 1,387 2,720 Non-recurring items after taxation - (846) (846) Share based payments (net of tax) 7 12 24 --------------------------------------- Earnings for the purposes of adjusted earnings per share 3,770 3,315 10,448 ======================================= Number Weighted average number of ordinary shares for the purposes of basic and adjusted earnings per share after adjustment for treasury shares 83,860,262 83,862,081 83,989,179 Effect of dilutive potential ordinary shares Exercise of share options 308,794 216,812 317,924 --------------------------------------- Weighted average number of ordinary shares for the purposes of diluted earnings per share 84,169,056 84,078,893 84,307,103 ======================================= Basic earnings per share 2.62p 3.29p 10.18p Diluted earnings per share 2.61p 3.29p 10.14p Adjusted basic earnings per share 4.50p 3.95p 12.44p Adjusted diluted earnings per share 4.48p 3.94p 12.39p ======================================= (b) From continuing and discontinued operations Six months Six months Twelve ended 31 ended 31 months December December ended 30 2007 2006 June 2007 (unaudited) (unaudited) (audited) Â£'000 Â£'000 Â£'000 Earnings fromm continuing operations for the purpose of basic earnings per share excluding discontinued operations 2,194 2,762 8,550 Adjustments to include the (loss)/profit for the period from discontinued operations (169) (38) 696 --------------------------------------- Earnings from continuing and discontinued operations for the purpose of basic earnings per share 2,025 2,724 9,246 Add: Amortisation (net of minority interest effect and deferred tax) 1,613 1,650 3,247 Non-recurring items after taxation - (846) (846) Share based payments (net of tax) 7 12 24 --------------------------------------- Earnings for the purposes of adjusted earnings per share 3,645 3,540 11,671 ======================================= Basic earnings per share 2.41p 3.25p 11.01p Diluted earnings per share 2.41p 3.24p 10.97p Adjusted basic earnings per share 4.35p 4.22p 13.90p Adjusted diluted earnings per share 4.33p 4.21p 13.84p ======================================= (c) From discontinued operations Six months Six months Twelve ended 31 ended 31 months December December ended 30 2007 2006 June 2007 (unaudited) (unaudited) (audited) Â£'000 Â£'000 Â£'000 Earnings from discontinued operations for the purpose of basic earnings per share (169) (38) 696 Add: Amortisation (net of minority interest effect and deferred tax) 44 263 527 --------------------------------------- Earnings for the purposes of adjusted earnings per share (125) 225 1,223 ======================================= Basic earnings per share (0.20)p (0.05)p 0.83p Diluted earnings per share (0.20)p (0.05)p 0.83p Adjusted basic earnings per share (0.15)p 0.27p 1.46p Adjusted diluted earnings per share (0.15)p 0.27p 1.45p ======================================= 6. Acquisitions and disposals Acquisitions On 27 November 2007 the Group acquired 80 per cent of the fully diluted share capital of The Matchett Group Limited for a cash consideration of Â£5.7m and the repayment of existing debt of Â£3.9m. Further consideration is payable in respect of the 80 per cent stake dependent on profits during the year ending 31 December 2008. The aggregate amount payable for the 80 per cent stake comprising the further consideration together with the initial consideration and repayment of debt is capped at Â£15m. Since acquisition The Matchett Group Limited has generated revenue of Â£491,000 and contributed a profit before tax and amortisation to the Group of Â£71,000. Had the Group owned The Matchett Group Limited for the whole twelve months since 31 December 2006 it would have generated revenue of Â£8,651,000 and contributed a profit before tax and amortisation to the Group of Â£1,153,000. Put and call options have been entered into by CLT Group whereby the 20% shareholders of Matchett can require CLT Group to acquire their shares for a consideration based on a formula linked to future profits. Similarly from 2015, CLT Group can require any remaining minority shareholders to sell their shares to CLT Group, again based on a formula linked to profits. The amount payable under the arrangements is capped at Â£21m (including the initial and deferred consideration and debt repayments). Assets and liabilities of subsidiary undertaking acquired: Book value Adjustments Fair value Â£'000 Â£'000 Â£'000 Property, plant and equipment 164 - 164 Inventories 29 - 29 Trade and other receivables 1,273 - 1,273 Cash 123 - 123 Trade and other payables (1,904) - (1,904) Intangible assets - 8,008 8,008 Deferred tax 18 (2,242) (2,224) --------------------------------------- (297) 5,766 5,469 ======================================= Less: minority interests (702) ---------------------------------------- 4,767 Goodwill arising on consolidation 6,871 ---------------------------------------- Consideration 11,638 ======================================== Satisfied by cash (including acquisition costs) 9,673 Deferred consideration 1,965 ---------------------------------------- 11,638 ======================================== Provisional calculations have been made in respect of fair value adjustments and to reflect alignment with the Group's accounting policies. At this stage the fair value of the asset and liabilities acquired has not yet been finalised. Full details will be given in the Group accounts for the twelve months ending 30 June 2008. Disposals On 14 August 2007, the Company sold all of its interest in Wilmington Media Limited, Dewberry Redpoint Limited and Office Solutions Media Limited for a cash consideration net of disposal costs (including the costs of providing transitional services to the businesses disposed of) of Â£10.2 million which has resulted in a modest gain on disposal (see note 3). 7. Net Cash from Operating Activities Six months Six months Twelve ended 31 ended 31 months December December ended 30 2007 2006 June 2007 (unaudited) (unaudited) (audited) Â£'000 Â£'000 Â£'000 Profit from operations after non-recurring items 3,891 4,816 13,771 Non-recurring items - (1,208) (1,208) ---------------------------------------- Profit from operations before non-recurring items 3,891 3,608 12,563 Cash effect of non-recurring items - 208 - ---------------------------------------- 3,891 3,816 12,563 Operating (loss)/profit from discontinued operations (273) (55) 431 Depreciation of property, plant and equipment 636 717 1,519 Amortisation of intangible assets 2,327 2,357 4,675 (Profit)/loss on disposal of property, plant and equipment (5) 1 10 Exchange translation differences (5) (21) - Share option charge 10 17 34 ---------------------------------------- Operating cash flows before movements in working capital 6,581 6,832 19,232 (Increase) in inventories (689) (528) (69) Decrease/(increase) in receivables 2,483 1,381 (3,097) (Decrease)/increase in payables (2,695) (4,089) 2,900 ---------------------------------------- Cash generated by operations 5,680 3,596 18,966 Tax paid (2,013) (1,096) (3,902) Interest paid (473) (588) (1,351) ---------------------------------------- Net cash flow from operating activities 3,194 1,912 13,713 ======================================== 8. Risks and uncertainties The principal risks and uncertainties affecting the business activities of the Group remain those detailed on pages 7 and 8 of the Annual Report for the twelve months ended 30 June 2007, a copy of which is available on the Company's website at www.wilmington.co.uk. The Interim Management Report in this Interim Report includes a comment on the outlook for the Group for the remaining six months of the financial year. 9. Related party transactions The only related party transactions to have taken place during the first half year were normal business transactions between the Group and its subsidiary undertakings. 10. Nature of Information The Interim Report, which has not been audited, was approved by the directors on 27 February 2008. The Interim Report has been prepared in accordance with the EU endorsed standard IAS 34 'Interim Financial Reporting'. This interim financial information has been prepared on the basis of the accounting policies adopted in the most recent annual financial statements, these being for the year ended 30 June 2007. The interim financial information for the six months to 31 December 2007 and the comparative figures for the six months to 31 December 2006 are unaudited. The comparative figures for the financial year ended 30 June 2007 are an abridged version of the statutory accounts for that financial year. Those accounts have been reported on by the Company's auditors and delivered to the Registrar of Companies. The report of the auditors was unqualified and did not contain a statement under section 237(2) or (3) of the Companies Act 1985. The Interim Report has been sent to all shareholders, is available on our website www.wilmington.co.uk and is available to the public from the registered office. This information is provided by RNS The company news service from the London Stock Exchange

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