Final Results - Year Ended 29 February 2000
Wilmington Group Plc
16 May 2000
WILMINGTON GROUP PLC
PRELIMINARY RESULTS FOR THE YEAR ENDED 29TH FEBRUARY 2000
Financial Highlights
2000 1999
£'000 £'000
Turnover 57,808 44,642 +29%
Profit before tax and amortisation 9,207 7,311 +26%
Operating cashflow 9,451 7,574 +25%
EPS before amortisation 8.54p 7.26p +18%
Dividend 2.08p 1.73p +20%
* Major acquisition of Central Law Group
* Sales up by 29%
* Seventh consecutive year of record profits, only part year contribution
from Central Law Group
* EPS before amortisation up by 18%
* Dividend increases by 20% for the fourth consecutive year
* £28.6 million received from placing since year end - platform for further
development
Brian Gilbert, Chief Executive of Wilmington Group states:
'These outstanding results, which underline a seventh successive year of
record profits for Wilmington, have been generated from the ownership of
quality communications assets that serve the needs of professional business
communities. We increasingly service our customers by providing products
delivered through the Internet.
During the year we made a number of acquisitions, the largest being Central
Law Group, a major provider of post-qualification legal training in Great
Britain.
The new financial year has opened with trading patterns that are in line with
expectations and I am confident that this period will continue the successful
development of our Group. The current range of publishing dates should deliver
results that are weighted towards the second half of our financial year.'
The Group, which floated in December 1995, owns a range of media and
communication assets generating long-term revenue streams from business
markets.
In the four years since flotation, Wilmington Group has grown turnover by 129
per cent from £25.2 million to £57.8 million. It has completed nearly 20
acquisitions, launched numerous new products and grown earnings per share
before amortisation by 175 per cent from 3.11p to 8.54p.
The Group organised a successful placing in February 2000 which raised £28.6
million which was received shortly after the year end. This creates a
platform for further growth particularly from the Internet and specifically
in the Business to Business ('B2B') e-commerce sector.
Commenting on the results, Dennis Rooke, Non-Executive Chairman said:
'These are an excellent set of results. Earnings per share before
amortisation rose by 18 per cent to 8.54 pence from 7.26 pence. Even after
charging non cash amortisation of goodwill and intangible assets arising on
the significant acquisitions made during the year earnings per share were
virtually unchanged at 6.00 pence.
We are confident that we have a base from which we can continue to grow our
assets and are keen to repeat and exceed the record we have established over
the last seven years. We remain committed to investing in assets that
generate real value and translate into cash earnings growth.'
Enquiries:
Brian Gilbert, Chief Executive
Wilmington Group Tel: 020 7251 6499
Tim Linacre
WestLB Panmure Tel: 020 7638 4010
John Webb
Marshall Securities Tel: 020 7490 3788
HIGHLIGHTS
TURNOVER
Group turnover rose from £44,642,000 to £57,808,000 an increase of 29%.
Revenues from non-advertising sources, including subscriptions and
information services, represented approximately 53% of revenue (1999:43%).
PROFIT BEFORE TAX
Profit before tax rose from £6,444,000 to £7,156,000, an increase of 11%.
Profit before tax and amortisation of goodwill and intangible assets
('adjusted profits') rose from £7,311,000 to £9,207,000, an increase of 26%.
EARNINGS PER SHARE
Adjusted earnings per share, which is calculated before the amortisation of
goodwill and intangible assets, rose by 18% to 8.54p from 7.26p. Earnings per
share were virtually unchanged at 6.00p (1999:6.08p), even after the
significant non cash amortisation of goodwill and intangible assets arising on
acquisitions, including CLG, made during the year. This is calculated on the
weighted average number of shares in issue of 71,910,942. Diluted earnings per
share calculated on the diluted average number of shares of 72,708,902 were
also virtually unchanged at 5.94p (1999:6.02p).
GEARING AND CASHFLOW
At the balance sheet date the Group had net borrowings of £24,675,000 as a
result of significant acquisitions during the year. Following a successful
placing and open offer which raised £28.6 million net, these borrowings were
fully repaid in March 2000.
During the year there was a £9,451,000 operating cash inflow. After
£1,775,000 replacement capital expenditure and the payment of corporation tax
and dividends totalling £3,855,000, there was a free cashflow of £3,821,000.
DIVIDENDS
The Board recommends a dividend of 2.08p (1999:1.73p) an increase of 20%.
This dividend is payable on 30th June 2000 to eligible shareholders on the
register on 26th May 2000.
BUSINESS REVIEW
Wilmington has maintained its excellent record of developing profits from the
ownership of media and communications assets that generate long-term revenue
streams.
The Company owns key brands in professional publishing and information
marketplaces. These comprise a selection of leading brands in vertical
markets (such as legal, power and interior design) and a number of important
products in broader sectors (such as automotive, catering and entertainment).
Wilmington services these markets through two divisions: Publishing and
Information; and Events. It remains committed to the ownership of the
intellectual property rights and content of all its principal publications
and products. Revenues originate from advertising, subscriptions and copy
sales, data sales and list rentals, events and professional service fees.
DEVELOPMENTS
The majority of income derives from traditional hard copy publications.
However, the Company has focused on the continued extension of its brands
beyond the traditional areas and into new media. This is underlined by our
involvement in high quality training through our investment in Central Law
Group. The Company is also launching numerous income generating electronic
initiatives including its own specialist business Internet service provider
'Connectingbusiness'. Development costs of our electronic and other
initiatives are fully written off in this year's results.
The philosophy at Wilmington has always been to manage its businesses
effectively and the participation of the management, wherever possible, in
the equity of the business remains a vital ingredient in its success.
During the period the Board was significantly strengthened with the promotion
of Nick Miller to Chief Operating Officer and the appointment of Charles
Brady, the Chairman of CLG, as Executive Director responsible for the events
division, and Richard Magee as an additional Non-Executive Director.
As well as managing existing businesses Wilmington has been active in its
search to acquire complementary assets. During the period the Group not only
acquired Central Law Group but also acquired a number of specialist business
titles from United News & Media Group; Caterbase a direct marketing database
for the catering industry; and Blueprint, the critically acclaimed
independent architecture and design title, from Aspen Group.
In February 2000 the Company organised a successful placing and open offer
which generated net proceeds of £28.6 million that were received in March
2000.
THE FUTURE
The development of Wilmington to date has been an enormous success.
Firstly, the Company has developed a very strong, highly motivated management
team. Secondly, its product portfolio is constantly expanding and improving,
giving it key relationships with significant business and professional
markets.
These factors combine to give the Group the capability and energy to continue
profitably serving its markets.
The Board believes that current market developments, when combined with the
Company's strengths, including its robust balance sheet and considerable
borrowing power following the recent placing, will create many further
opportunities. The Board is committed to drive the Company forward through
further acquisition and organic development. It is resolute in its pursuit of
assets that capture value for shareholders and are consistent with a strategy
of owning quality communications assets. The ownership of 'content' remains
the defining characteristic of the Group.
The new financial year has opened with trading patterns that are in line with
expectations and the Board is confident that the current financial year will
continue the profitable development of long-term revenue streams for the
Company.
CONSOLIDATED PROFIT AND LOSS ACCOUNT
For the year ended 29th February 2000
2000 1999
Continuing Acquisitions Total
operations
Notes £'000 £'000 £'000 £'000
Turnover 1 & 2 47,019 10,789 57,808 44,642
Cost of sales (14,674) (4,911) (19,585) (13,789)
------- ------- -------- --------
Gross profit 32,345 5,878 38,223 30,853
------- ------- -------- --------
Operating expenses 3 (24,400) (3,613) (28,013) (23,472)
Amortisation of goodwill
and intangible assets (936) (1,115) (2,051) (867)
------- ------- ------- -------
Total operating expenses (25,336) (4,728) (30,064) (24,339)
------- ------- ------- -------
Operating profit 1 7,009 1,150 8,159 6,514
======= ======
Interest payable and
similar charges (1,042) (74)
Interest receivable and
similar income 39 4
------ -------
Profit on ordinary activities
before taxation 1 7,156 6,444
Taxation (2,497) (1,866)
------ ------
Profit on ordinary activities
after taxation 4,659 4,578
Minority interests (343) (239)
------ ------
Profit for the financial year
and attributable to shareholders 4,316 4,339
Dividend proposed (1,515) (1,235)
------ ------
Retained profit for the year 2,801 3,104
====== ======
Earnings per
ordinary share 4 6.00p 6.08p
===== =====
Diluted earnings per
ordinary share 4 5.94p 6.02p
===== =====
Adjusted earnings per
ordinary share 4 8.54p 7.26p
===== =====
CONSOLIDATED BALANCE SHEET
As at 29th February 2000
2000 1999
£'000 £'000
Fixed assets
Goodwill and intangible assets 46,830 15,162
Tangible assets 8,044 6,066
------ ------
54,874 21,228
------ ------
Current assets
Stock and work in progress 996 1,240
Debtors 14,954 9,351
Cash at bank and in hand 1,188 1,131
------ ------
17,138 11,722
Creditors: Amounts falling due within one year (26,330) (13,331)
------- -------
Net current liabilities (9,192) (1,609)
------- -------
Total assets less current liabilities 45,682 19,619
Creditors: Amounts falling due after more than one
year (20,750) -
------- -------
Net assets 24,932 19,619
======= =======
Capital and reserves
Called-up share capital 3,645 3,573
Share premium account 8,775 6,612
Other reserves 949 949
Profit and loss account 10,820 8,019
------ ------
Equity shareholders' funds 24,189 19,153
Minority interests 743 466
------ ------
24,932 19,619
====== ======
CONSOLIDATED CASH FLOW STATEMENT
For the year ended 29th February 2000
2000 1999
Notes £'000 £'000
Net cash inflow from operating activities 6(a) 9,451 7,574
Returns on investments and servicing of
finance ----- ------
Interest received 39 4
Interest paid (551) (74)
Dividend paid to minority shareholders in
subsidiary undertaking (26) (30)
------ ------
Net cash outflow (538) (100)
Taxation
Corporation tax paid (2,618) (1,535)
Capital expenditure and financial investment
------- -------
Purchase of goodwill and intangible fixed assets (329) (271)
Purchase of tangible fixed assets (2,261) (1,740)
Sale of tangible fixed assets 123 125
------- -------
Net cash outflow (2,467) (1,886)
Acquisitions and disposals -------- -------
Purchase of subsidiary undertakings 5 (26,805) (94)
Purchase of businesses 5 (3,733) -
------- -------
(30,538) (94)
Equity dividends paid (1,237) (1,027)
------- -------
Cash (outflow)/inflow before financing (27,947) 2,932
Financing
------- -------
Issue of shares 315 63
Receipt/(repayment) of bank loans 23,933 (1,000)
------- -------
24,248 (937)
------- -------
(Decrease)/increase in cash in the year 6(b) (3,699) 1,995
======= =======
Reconciliation of net cash flow to movement in
net cash/(debt) 6(b)
(Decrease)/increase in cash in the year (3,699) 1,995
Cash (inflow)/outflow from (increase)/decrease
in net debt (23,933) 1,000
------- ------
Change in net (debt)/cash resulting from cash flow (27,632) 2,995
Cash/(debt) arising on acquisition 2,376 (550)
Net cash/(debt) brought forward 581 (1,864)
------- -------
Net (debt)/cash carried forward (24,675) 581
======= =======
NOTES TO THE PRELIMINARY RESULTS
1 Segmental information
2000 1999
£'000 £'000
Turnover:
Publishing and Information 47,915 44,642
Events 9,893 -
------ -------
57,808 44,642
====== =======
2000 1999
£'000 £'000
Profit before taxation:
Publishing and Information 6,822 6,514
Events 1,337 -
------- ------
8,159 6,514
Less: interest (1,003) (70)
------- ------
7,156 6,444
======= ======
2000 1999
£'000 £'000
Net assets:
Publishing and Information 24,239 19,619
Events 693 -
------ ------
24,932 19,619
====== ======
2 Turnover
The geographical analysis of turnover is as follows:
2000 1999
£'000 £'000
United Kingdom 49,484 36,775
Overseas 8,324 7,867
------ ------
57,808 44,642
====== ======
3 Operating expenses
2000 1999
£'000 £'000
Distribution and selling costs 18,617 17,508
Administrative expenses 9,396 5,964
------ ------
28,013 23,472
====== ======
4 Earnings per share
2000 1999
The calculation of earnings per share is based
on profit after taxation and minority interests of £4,316,000 £4,339,000
and on the average number of ordinary shares in
issue during the year 71,910,942 71,352,502
and on the diluted average number of ordinary
shares in issue during the year 72,708,902 72,103,772
Earnings per ordinary share 6.00p 6.08p
Diluted earnings per ordinary share 5.94p 6.02p
Adjusted earnings per ordinary share 8.54p 7.26p
In order to show the results on a comparable basis to prior years before the
adoption of FRS 10, an adjusted earnings per ordinary share has been
calculated using an adjusted profit after taxation and minority interests but
before amortisation of goodwill and intangible assets of £6,143,000 (1999:
£5,181,000).
5 Acquisitions
During the year the Group acquired shares carrying 80.6 per cent. of all
rights attached to the issued shares of Central Law Group Limited, part of the
business of Wiggmoore Marketing Communications Limited and the business of
Speed 7726 Limited (formerly Redpoint Marketing Limited) and certain titles
from United News & Media Group Limited and Aspen Group Limited.
The results of the Central Law Group for the year from 1st August 1997 to 31st
July 1998 (the date of its last audited accounts prior to its acquisition) and
its results for the period from 1st August 1998 to 9th June 1999, the date of
acquisition, and from 10th June 1999 to 31st July 1999 (the date of its first
audited accounts following acquisition) are as follows:
Year to Period to 9th Period 10th
31st July June June to 31st
July
1998 1999 1999
£'000 £'000 £'000
Turnover 10,933 11,391 1,690
Cost of sales (5,574) (5,634) (674)
------- ------- -----
5,359 5,757 1,016
Operating expenses (2,900) (3,616) (413)
------- ------- -----
Operating profit 2,459 2,141 603
====== ====== =====
Profit after tax
and minority interests 1,810 1,734 448
====== ====== ====
The effect of the Central Law Group since its acquisition on the Group's
consolidated cash flow for the year ended 29th February 2000 can be summarised
as follows:
£'000
Net cash flow from operating activities 2,740
Returns on investments and servicing of finance 90
Taxation paid (387)
Capital expenditure and financial investments (193)
-----
Net cash inflow 2,250
=====
Assets and liabilities acquired:
(a) Subsidiary undertakings acquired
Book value Fair value adjustments Fair value
£'000 £'000 £'000
Investments 5 (5) -
Tangible fixed assets 1,107 (30) 1,077
Stock and work in progress 134 (134) -
Debtors 2,029 (100) 1,929
Cash 2,376 - 2,376
Creditors due within one year (5,211) - (5,211)
Goodwill and intangible assets - 28,682 28,682
------- -------- ------
440 28,413 28,853
======= =======
Less minority interests (128)
------
Consideration 28,725
======
Satisfied by:
Cash 26,805
Shares 1,920
------
28,725
======
(b) Businesses acquired:
Book value Fair value adjustments Fair value
£'000 £'000 £'000
Tangible fixed assets 58 - 58
Debtors 94 - 94
Creditors due within one year (639) - (639)
Goodwill and intangible assets 4,270 - 4,270
----- ------ ------
3,783 - 3,783
===== ======
Less minority interests (50)
-----
Consideration 3,733
=====
Satisfied by:
Cash 3,733
=====
Adjustments were made to the book values of the net assets acquired to
reflect the their fair values and the application of group accounting
policies.
6 Notes to the consolidated cash flow statement
Reconciliation of operating profit to net cash inflow from operations
2000 1999
£'000 £'000
Operating profit 8,159 6,514
Depreciation of tangible fixed assets 1,359 1,100
Amortisation of goodwill and intangible fixed assets 2,051 867
(Profit) on sale of tangible fixed assets (64) (82)
Decrease in stock and work in progress 244 7
(Increase) in debtors (3,849) (403)
Increase/(decrease) in creditors 1,551 (429)
------ -----
Net cash inflow from operating activities 9,451 7,574
====== =====
Analysis of movement in net cash/(debt)
At 1st Cashflow Arising on At 29th
March 1999 acquisition February 2000
£'000 £'000 £'000 £'000
Cash at bank and in hand 1,131 (2,319) 2,376 1,188
Bank overdraft (483) (1,380) - (1,863)
----- ------- ----- --------
648 (3,699) 2,376 (675)
Loans due after one year - (20,750) - (20,750)
Loans due within one year (67) (3,183) - (3,250)
----- -------- ----- -------
581 (27,632) 2,376 (24,675)
===== ======== ===== ========
7 Post balance sheet event
In March 2000 the Company raised net proceeds of £28.6 million from a placing
of 7,289,627 Ordinary Shares of 5p each at 400p per share. The proceeds have
been used to repay in full the Group's borrowings.
8 Nature of the financial information
The foregoing financial information does not amount to full accounts within
the meaning of Section 240 of the Companies Act 1985. The financial
information has been extracted from the Group's Annual Report and Accounts
for the year ended 29th February 2000 on which the auditors have given an
unqualified report.
Copies of the Annual Report and Accounts will be posted to shareholders
shortly and will be available from the Company's registered office at Paulton
House, 8 Shepherdess Walk, London N1 7LB.
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