Interim Results

Wilmington Group Plc 01 March 2007 Embargoed until 0700 1 March 2007 WILMINGTON GROUP PLC ('Wilmington', 'the Group' or 'the Company') Interim Results for the six months to 31 December 2006 Wilmington Group plc, the professional information and training group, today announces its interim results for the six months to 31 December 2006. Highlights â€¢ A period of excellent progress â€¢ Strong growth in revenue and profitability o Revenue from continuing operations up 14.2% to Â£45.7m (2005: Â£40.0m) o Pre-tax profit from continuing operations, before amortisation, up 14.9% to Â£5.3m (2005: Â£4.6m) o Pre-tax profit up 26% to Â£4.2m (2005: Â£3.3m) o Adjusted EPS up 17.1% to 4.38p (2005: 3.74p) o Interim dividend per share up 54% to 2.0p (2005: 1.3p) â€¢ Particularly strong performance by Legal & Regulatory division o Organic revenue growth of 9.1% o Organic profit growth of 14.8% â€¢ Substantial progress made with o acquisition and integration of new businesses o launch of a range of new products o installation of new systems to expand product range and increase operational effectiveness â€¢ Outlook remains encouraging Charles Brady, Chief Executive, commented: 'Wilmington's strategy is to generate sustainable and growing profits from serving the information and training requirements of key professional business markets. We aim to develop further our strong positions in those markets by focussed investment. Across the Group we continue to invest in people and products and have shown that we can improve the profitability of businesses we acquire. We believe this continued investment, combined with our ability to make value enhancing acquisitions, will drive the business forward. 'The outlook for the full year remains encouraging. As in previous years, we expect the Group's performance will be weighted to the second half of the financial year.' - ends - For further information, please contact: Wilmington Group Plc On the day: 020 7422 6804 Charles Brady, Chief Executive Thereafter: 0121 355 0900 Basil Brookes, Finance Director Weber Shandwick Financial 020 7067 0700 Nick Oborne, Kirsty Raper or Helen Thomas 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 principal sectors of Legal & Regulatory, Healthcare, Media & Entertainment and Design & Construction. Capitalised at approximately Â£195 million, Wilmington floated on the London Stock Exchange in 1995 (www.wilmington.co.uk). 1 March 2007 WILMINGTON GROUP PLC ('Wilmington', 'the Group' or 'the Company') Interim Results for the six months to 31 December 2006 CHAIRMAN'S STATEMENT Results for the six months ended 31 December 2006 I am pleased to report that Wilmington has made excellent progress in the six months to 31 December 2006, with strong growth in both revenue and profitability, partly reflecting encouraging results from our latest acquisitions. Revenue in the six months to 31 December 2006 from continuing operations increased by 14.2% to Â£45.7m (2005: Â£40.0m). Profit on ordinary activities from continuing operations, before taxation and amortisation, increased by 14.9% to Â£5.3m (2005: Â£4.6m). Profit before taxation increased by 26.0% to Â£4.2m (2005: Â£3.3m). Adjusted basic earnings per share from continuing operations (before amortisation and non-recurring items) increased by 17.1% to 4.38p (2005: 3.74p). Basic earnings per share from continuing operations increased by 25.5% to 3.25p (2005: 2.59p). Non-recurring income of Â£1.2m represents the inducement fee received, net of transaction costs, relating to the proposed merger with Metal Bulletin plc. Goodwill and intangible asset valuations arising on the acquisition of Ark Group and Smee & Ford during the twelve months ended 30 June 2006 have now been finalised. The resulting reallocation between goodwill and intangible assets and the consequential impact on deferred tax and amortisation have been treated as a prior year adjustment. An interim dividend for the current year of 2.0p per share (2005: 1.3p per share) will be paid on 12 April 2007 to shareholders on the register on 23 March 2007. This increase reflects the Board's policy of maintaining a progressive dividend policy and the underlying strength of the business and balance sheet. Net debt at 31 December 2006 was Â£20.5m. Business Review I am pleased to report that substantial progress has been made with the acquisition and integration of new businesses, the launch of a range of new products and the installation of new systems to expand our product range and increase operational effectiveness. This good progress is a testament to the dedication and hard work of Wilmington's employees. Legal and Regulatory The Legal and Regulatory division has delivered a strong performance. Revenue has grown 28.3% to Â£28.1m (2005: Â£21.9m), enhanced by the acquisitions of Ark Group (October 2005), Smee & Ford (February 2006) and Mercia (October 2006). Excluding the impact of these acquisitions, the Legal and Regulatory division delivered good organic growth with revenue increasing by 9.1%. Divisional profit before non-recurring costs and amortisation increased by 32.6% to Â£5.8m (2005: Â£4.4m). Excluding the impact of the acquisitions, profits before non-recurring items and amortisation increased by 14.8% to Â£4.7m (2005: Â£4.1m). Waterlow's publishing and information activities continued to make excellent progress with profits increasing by 53.5% compared to the same period in the prior year, largely as a result of growing Internet and electronic revenues. Smee & Ford has integrated well since its acquisition in February 2006 and we are encouraged by the performance of both its legacy reporting and data divisions. Training activities, with profits up 22.1%, are also providing exciting areas for growth. Our training in law for non-lawyers has made considerable progress with the growth in paralegal training and a number of major new contracts awarded to Bond Solon. Importantly, our accountancy training activities are continuing to develop with Quorum, acquired in May 2005, showing a substantial increase in business and profitability. The acquisition of Mercia in October 2006 has also added considerable further impetus to this development. Training accountancy professionals is now a significant and growing part of our business. Training activities regarding trust management, anti-money laundering and compliance have also shown considerable progress during the half year. Healthcare Divisional revenue increased by 14.0% to Â£5.5m (2005: Â£4.8m) with profits before nonrecurring items and amortisation broadly unchanged at Â£0.7m (2005: Â£0.7m). While the business has continued to make good underlying progress, profits reflect continued investment in products relating to APM Health Europe which was launched in January 2006. Business Communications The revenue of our Business Communications division comprising Media & Entertainment, Design & Construction and Specialist markets, declined 9.1% to Â£12.1m (2005: Â£13.3m). Divisional profits before non-recurring costs and amortisation were Â£0.3m (2005: Â£0.7m). These businesses are being integrated further to achieve greater economies of scale. Moreover our business model is changing to help us to take advantage of the opportunities available in these markets. This includes the rationalisation of some products, investment in new operating systems, the creation of digital and internet revenue sources, and a new conference and events team. While the development costs have depressed the first half financial performance, we believe these changes are necessary as the dynamics of our markets are evolving at a pace with magazine advertising depressed and revenues increasingly moving to the Internet and events. Outlook Wilmington's strategy is to generate sustainable and growing profits from serving the information and training requirements of key professional business markets. We aim to develop further our strong positions in those markets by focussed investment. Across the Group we continue to invest in people and products and have shown that we can improve the profitability of businesses we acquire. We believe this continued investment, combined with our ability to make value enhancing acquisitions, will drive the business forward. The outlook for the full year remains encouraging. As in previous years, we expect the Group's performance will be weighted to the second half of the financial year. David L Summers Chairman 1 March 2007 Wilmington Group plc Consolidated Income Statement Six months Twelve Six months ended months ended ended 31 December 30 June 31 December 2005 2006 2006 (unaudited) (audited) (unaudited) (restated) (restated) Notes Â£'000 Â£'000 Â£'000 Revenue 1 45,729 40,048 89,768 Cost of sales (15,867) (15,453) (29,433) _______________________________________ Gross profit 29,862 24,595 60,335 Operating expenses excluding amortisation and impairment (23,952) (19,509) (45,484) Amortisation and impairment (2,357) (1,320) (3,264) _______________________________________ Profit from continuing operations before inducement fee and transaction costs 3,553 3,766 11,587 Inducement fee net of transaction costs/ (transaction costs) 1 1,208 - (1,200) _______________________________________ Profit from continuing operations after inducement fee and transaction costs 4,761 3,766 10,387 Finance costs (592) (458) (1,049) _______________________________________ Profit on ordinary activities before taxation 4,169 3,308 9,338 Income tax expense 2 (1,261) (986) (2,354) _______________________________________ Profit on ordinary activities after taxation 2,908 2,322 6,984 Profit on discontinued operations after taxation 3 - 126 131 _______________________________________ Net profit for the period 2,908 2,448 7,115 ======================================= Attributable to equity holders of the parent 2,724 2,295 6,428 ======================================= Minority interest 184 153 687 ======================================= Earnings per share attributable to equity holders of the parent Continuing operations: 5(a) Basic earnings per share 3.25p 2.59p 7.53p Diluted earnings per share 3.24p 2.58p 7.48p Continuing and discontinued operations: 5(b) Basic earnings per share 3.25p 2.75p 7.69p Diluted earnings per share 3.24p 2.73p 7.64p Wilmington Group plc Consolidated Statement of Recognised Income and Expense Six months Twelve months Six months ended 31 ended 30 ended 31 December June December 2005 2006 2006 (unaudited) (audited) (unaudited) (restated) (restated) Â£'000 Â£'000 Â£'000 Exchange differences on translation of foreign operations (21) 3 5 Actuarial (loss)/gain taken directly in equity (11) 74 96 Tax on items taken directly in equity 3 (22) (29) ___________________________________ Net (expense)/income recognised directly in equity (29) 55 72 Net profit for the period 2,908 2,448 7,115 ___________________________________ Total recognised income and expense for the period 2,879 2,503 7,187 =================================== Attributable to Equity holders of the parent 2,695 2,350 6,500 Minority interests 184 153 687 ___________________________________ 2,879 2,503 7,187 =================================== Wilmington Group plc Consolidated Balance Sheet As at As at As at 31 December 30 June 31 December 2005 2006 2006 (unaudited) (audited) (unaudited) (restated) (restated) Â£'000 Â£'000 Â£'000 Non-current assets Goodwill 49,207 45,156 47,187 Intangible assets 37,336 28,525 32,897 Property, plant and equipment 11,442 11,424 11,201 Deferred tax asset 129 148 212 _________________________________ 98,114 85,253 91,497 _________________________________ Current assets Inventories 2,032 1,948 1,504 Trade and other receivables 19,694 16,328 19,006 Cash 4,146 3,181 2,855 _________________________________ 25,872 21,457 23,365 _________________________________ Total assets 123,986 106,710 114,862 _________________________________ Current liabilities Trade and other payables (27,752) (22,887) (30,168) Tax liabilities (2,120) (1,128) (1,405) Bank overdrafts and loans (4,673) (3,601) - _________________________________ (34,545) (27,616) (31,573) _________________________________ Non-current liabilities Bank loans (20,000) (16,000) (16,000) Retirement benefit obligation (246) (292) (254) Deferred tax liability (5,888) (3,815) (4,594) _________________________________ (26,134) (20,107) (20,848) _________________________________ Total liabilities (60,679) (47,723) (52,421) _________________________________ Net assets 63,307 58,987 62,441 ================================= Equity Share capital 4,208 4,180 4,180 Share premium account 42,977 42,658 42,658 Capital reserve 949 949 949 Translation reserve (32) (13) (11) Share option reserve 108 74 91 Retained earnings 13,300 9,781 12,841 _________________________________ Equity shareholders' funds 61,510 57,629 60,708 Minority interests 1,797 1,358 1,733 _________________________________ Total equity 63,307 58,987 62,441 ================================= Wilmington Group plc Consolidated Cash Flow Statement Six months Six months Twelve ended 31 ended 31 months December December ended 30 2006 2005 June 2006 (unaudited) (unaudited) (audited) Note Â£'000 Â£'000 Â£'000 Net cash flow from operating activities 7 1,912 1,660 12,416 Investing activities Purchase of property, plant and equipment (534) (314) (909) Sale of property, plant and equipment 42 9 40 Purchase of subsidiary undertakings and minority interests (7,210) (10,338) (14,524) Cash acquired on purchase of subsidiary undertakings 966 1,137 1,567 Sale of subsidiary undertakings - 2,414 2,466 Purchase of goodwill and intangible assets (430) (228) (2,269) ________________________________ Net cash used in investing activities (7,166) (7,320) (13,629) ________________________________ Financing activities Dividends paid to equity holders of the parent (2,257) (2,048) (3,135) Dividends paid to minority shareholders in subsidiary undertakings (218) (516) (601) Issue of ordinary shares 347 - - Increase in long term loans 4,000 6,000 6,000 ________________________________ Net cash flows from financing activities 1,872 3,436 2,264 ________________________________ Net (decrease)/increase in cash and cash equivalents (3,382) (2,224) 1,051 Cash and cash equivalents at beginning of the period 2,855 1,804 1,804 ________________________________ Cash and cash equivalents at end of the period (527) (420) 2,855 ================================ Notes to the Accounts 1. Segmental information Six months Six months Twelve months ended 31 ended 31 ended 30 December December June 2006 2005 2006 (unaudited) (unaudited) (audited) Â£'000 Â£'000 Â£'000 Revenue: Legal and Regulatory 28,138 21,933 52,014 Healthcare 5,524 4,847 11,228 Business Communications 12,067 13,268 26,526 __________________________________ 45,729 40,048 89,768 ================================== 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 2006 2005 2006 (unaudited) (unaudited) (audited) (restated) (restated) Note Â£'000 Â£'000 Â£'000 Segmental results (before allocating amortisation): Legal and Regulatory 5,812 4,383 12,291 Healthcare 716 744 2,073 Business Communications 321 714 2,035 __________________________________ Total segmental results 6,849 5,841 16,399 Less: unallocated central overheads (939) (755) (1,548) __________________________________ Profit from continuing operations before amortisation, inducement fee and transaction costs 5,910 5,086 14,851 Add: inducement fee net of transaction costs/(transaction costs) 1,208 - (1,200) __________________________________ Profit from continuing operations after inducement fee and transaction costs but before amortisation 7,118 5,086 13,651 Less: finance costs (592) (458) (1,049) __________________________________ Profit before taxation and amortisation 6,526 4,628 12,602 Less: amortisation (2,357) (1,320) (3,264) __________________________________ Profit on ordinary activities before taxation 4,169 3,308 9,338 Income tax expense 2 (1,261) (986) (2,354) Profit on discontinued operations after taxation 3 - 126 131 __________________________________ Net profit for the period 2,908 2,448 7,115 ================================== Segmental results (after allocating amortisation): Legal and Regulatory 4,502 3,976 10,791 Healthcare 364 411 1,456 Business Communications (374) 134 888 __________________________________ Total segmental results 4,492 4,521 13,135 Less: unallocated central overheads (939) (755) (1,548) __________________________________ Profit from continuing operations before inducement fee and transaction costs 3,553 3,766 11,587 Add: inducement fee net of transaction costs/(transaction costs) 1,208 - (1,200) __________________________________ Profit from continuing operations after inducement fee and transaction costs 4,761 3,766 10,387 Less: finance cost (592) (458) (1,049) __________________________________ Profit on ordinary activities before taxation 4,169 3,308 9,338 Tax on ordinary activities 2 (1,261) (986) (2,354) Profit for the period from discontinued operations 3 - 126 131 __________________________________ Net profit for the period 2,908 2,448 7,115 ================================== The inducement fee and transaction costs relate to the proposed merger with Metal Bulletin plc referred to in the Company's accounts for the year ended 30 June 2006. 2. Income tax expense Six months Six months Twelve months ended 31 ended 31 ended 30 December December June 2006 2005 2006 (unaudited) (unaudited) (audited) Â£'000 Â£'000 Â£'000 The tax charge comprises: UK corporation tax at current rates 1,668 1,198 3,153 Adjustment to previous year - 8 (177) ___________________________________ 1,668 1,206 2,976 Foreign tax 138 133 300 ___________________________________ 1,806 1,339 3,276 Deferred tax credit - current year (545) (353) (640) - prior year - - (282) ___________________________________ Income tax expense 1,261 986 2,354 =================================== 3. Profit for the period from discontinued operations The results of the discontinued operations, which have been included in the consolidated income statement, were as follows: Six months Six months Twelve ended 31 ended 31 months December December ended 30 2006 2005 June (unaudited) (unaudited) 2006 (audited) Â£'000 Â£'000 Â£'000 Revenue - 316 309 Expenses - (528) (519) ___________________________________ Loss before amortisation and taxation - (212) (210) Amortisation - (84) (86) ___________________________________ Loss before taxation - (296) (296) Attributable tax credit - 64 63 ___________________________________ Net operating loss attributable to discontinued operations - (232) (233) Profit on disposal of discontinued operations - 462 475 Attributable tax charge - (104) (111) - 358 364 ___________________________________ Profit on discontinued operations after taxation - 126 131 =================================== 4. Dividends Amounts recognised as distributions to equity holders in the period. Six months Six months Twelve Six months Six months Twelve ended ended months ended ended months 31 December 31 December ended 31 December 31 December ended 2006 2005 30 June 2006 2005 30 June (unaudited) (unaudited) 2006 (unaudited) (unaudited) 2006 Pence per Pence per (audited) Â£'000 Â£'000 (audited) share share Pence per Â£'000 share Final dividends recognised as distributions in the period 2.70 2.45 2.45 2,257 2,048 2,048 Interim dividends recognised as distributions in the period - - 1.30 - - 1,087 __________________________________________________________________ Total dividends paid 2.70 2.45 3.75 2,257 2,048 3,135 ================================================================== Dividend proposed 2.00 1.30 2.70 1,682 1,087 2,257 ================================================================== 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 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 2006 2005 June 2006 (unaudited) (unaudited) (audited) (restated) (restated) Â£'000 Â£'000 Â£'000 Earnings from continuing operations for the purpose of basic earnings per share excluding discontinued operations 2,724 2,169 6,297 Add: Amortisation (net of minority interest effect and deferred tax) 1,792 960 2,584 Non-recurring items after taxation (846) - 840 ____________________________________ Earnings for the purposes of adjusted earnings per share 3,670 3,129 9,721 ==================================== Number Number Number Weighted average number of ordinary shares for the purposes of basic and adjusted earnings per share 83,862,081 83,600,179 83,600,179 Effect of dilutive potential ordinary shares Exercise of share options 216,812 554,211 555,262 ____________________________________ Weighted average number of ordinary shares for the purposes of diluted earnings per share 84,078,893 84,154,390 84,155,441 ==================================== Basic earnings per share 3.25p 2.59p 7.53p Diluted earnings per share 3.24p 2.58p 7.48p Adjusted basic earnings per share 4.38p 3.74p 11.63p Adjusted diluted earnings per share 4.36p 3.72p 11.55p ==================================== (b) From continuing and discontinued operations Six months Six months Twelve ended 31 ended 31 months December December ended 30 2006 2005 June 2006 (unaudited) (unaudited) (audited) (restated) (restated) Â£'000 Â£'000 Â£'000 Earnings from continuing operations for the purpose of basic earnings per share excluding discontinued operations 2,724 2,169 6,297 Adjustments to include the profit/ (loss) for the period from discontinued operations - 126 131 _________________________________ Earnings from continuing and discontinued operations for the purpose of basic earnings per share 2,724 2,295 6,428 Add: Amortisat ion (net of minority interest effect and deferred tax) 1,792 1,054 2,670 Non-recurring items after taxation (846) - 840 _________________________________ Earnings for the purposes of adjusted earnings per share 3,670 3,349 9,938 ================================= Basic earnings per share 3.25p 2.75p 7.69p Diluted earnings per share 3.24p 2.73p 7.64p Adjusted basic earnings per share 4.38p 4.01p 11.89p Adjusted diluted earnings per share 4.36p 3.98p 11.81p ================================== 6. Acquisitions In October 2006 the Group acquired 82.7 per cent. of Mercia Group Limited for an initial cash consideration of Â£7,146,000. At this stage the fair value of the assets and liabilities acquired has not yet been finalised. Full details will be given in the Group's accounts for the year ending 30 June 2007. Since acquisition Mercia Group Limited has generated revenue of Â£1,918,000 and made a profit before tax of Â£285,000. Had the Group owned Mercia Group Limited for the whole six months since June 2006 it would have generated revenue of Â£3,184,000 and made a profit before tax of Â£283,000. Goodwill and intangible asset valuations arising on the acquisition of Ark Group Limited and Smee and Ford Limited during the twelve months ended 30 June 2006 have now been finalised. The resulting reallocation between goodwill and intangible assets and the consequential impact on deferred tax and amortisation have been treated as a prior year adjustment and the comparative figures have been restated. Goodwill at 31 December 2005 and 30 June 2006 has decreased by Â£3,146,000 and Â£5,408,000 respectively whilst intangible assets at 31 December 2005 and 30 June 2006 have increased by Â£4,317,000 and Â£7,001,000 respectively. The deferred tax liabilities at 31 December 2005 and 30 June 2006 have increased by Â£1,213,000 and Â£1,990,000 respectively. The amortisation charges for the six months to 31 December 2005 and twelve months to 30 June 2006 have increased by Â£177,000 and Â£725,000 respectively with a corresponding increase in the respective deferred tax credits of Â£135,000 and Â£328,000. 7. Net Cash from Operating Activities Six months Six months Twelve ended 31 ended 31 months ended December December 30 June 2006 2005 2006 (unaudited) (unaudited) (audited) (restated) (restated) Â£'000 Â£'000 Â£'000 Profit from operations after inducement fee and transaction costs 4,761 3,766 10,387 (Inducement fee net of transaction costs)/transaction costs (1,208) - 1,200 ___________________________________ Profit from operations before inducement fee and transaction costs 3,553 3,766 11,587 Cash effect of inducement fee net of transaction costs 208 - - ___________________________________ 3,761 3,766 11,587 Operating loss from discontinued operations - (296) (296) Depreciation of property, plant and equipment 717 808 1,574 Amortisation of intangible assets 2,357 1,404 3,350 Loss/(profit) on disposal of property, plant and equipment 1 (28) (6) Exchange translation differences (21) 3 5 Share option charge 17 17 34 ___________________________________ Operating cash flows before movements in working capital 6,832 5,674 16,248 (Increase)/decrease in inventories (528) (441) 4 Decrease in receivables 1,381 2,575 507 (Decrease)/increase in payables (4,089) (3,939) 182 ___________________________________ Cash generated by operations 3,596 3,869 16,941 Tax paid (1,096) (1,786) (3,547) Interest paid (588) (423) (978) ___________________________________ Net cash flow from operating activities 1,912 1,660 12,416 =================================== 8. Nature of Information The interim accounts for the six months ended 31 December 2006 and the comparative figures for the six months ended 31 December 2005 are neither audited nor reviewed by the Company's auditors. The comparative figures for the twelve months ended 30 June 2006 are not the Company's statutory accounts within the meaning of Section 240 of the Companies Act 1985 but are abridged from such accounts. The financial statements for the twelve months ended 30 June 2006 have been reported on by the Company's auditors and delivered to the Registrar of Companies. The report of the auditors on such accounts was unqualified and did not contain any statement under Sections 237(2) or 237(3) of the Companies Act 1985. The interim accounts and the comparative figures are prepared on the basis of the accounting policies set out in the accounts of the Group for the twelve months ended 30 June 2006. Copies of this report are available from the Company's registered office at Paulton House, 8 Shepherdess Walk, London N1 7LB. This information is provided by RNS The company news service from the London Stock Exchange

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