TIDMWIL
RNS Number : 5884N
Wilmington PLC
25 September 2023
CORRECTION: DIVID TIMETABLE
Correction to the announcement made at 07:00 (RNS number: 4374N)
on 25/09/2023: The ex-dividend date is 2(nd) November 2023 and not
27(th) October 2023 and the record date is 3(rd) November 2023 and
not 28(th) October 2023 as previously announced. The full corrected
announcement is as per below. All other information was
correct:
25 September 2023
Wilmington plc
Continued delivery with 30% jump in profitability and dividend
up 22%
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 results for the year ended 30 June 2023.
Financial performance
2023 2022 Change
Continuing results [1]
Revenue GBP122.1m GBP111.9m 9%
Adjusted PBT[2] GBP24.1m GBP18.6m 30%
Adjusted PBT margin 19.7% 16.6% 19%
Adjusted basic EPS[3] 21.27p 16.72p 27.2%
Net cash[4] GBP42.2m GBP20.5m
Total dividend 10.0p 8.20p 22.0%
Statutory results
Revenue GBP123.5m GBP121.0m
PBT incl. disposals GBP24.0m GBP36.1m
Basic EPS 22.94p 37.46p
Highlights
(--) 9% revenue growth from continuing businesses. Organic
growth of 7%(1)
o Training & Education division delivered 15% organic
growth
o Intelligence division delivered 3% organic growth
-- Annual recurring revenues up 7%, now 39% (2022: 37%) of Group revenues
-- Adjusted profit before tax from continuing businesses up 30%
to GBP24.1m (2022: GBP18.6m) reflecting continuing efficiencies of
digital-first model
-- Operating profit margins continue to increase with
Intelligence division reaching 23% (2022: 19%)
-- Net cash at 30 June 2023 GBP42.2m (2022: GBP20.5m) reflecting
strong trading performance and cash conversion
-- Continued to streamline and enhance portfolio with disposal of Inese
-- Investment in the development of single technology platforms in each division
Mark Milner, Chief Executive Officer, commented:
"Since the strategic review we have delivered two years of
quarter-on-quarter profits growth, despite the challenging
macro-economic backdrop. Last year's results were our strongest to
date with continuing revenues up by 9% and profits up 30%. Other
notable developments have been the growth in our recurring revenues
and strong cash conversion of profits, further strengthening our
balance sheet, which are a result of improvement in our overall
operational performance.
"We help our customers to do the right business, in the right
way. As Governments, Regulators, businesses and individuals respond
to increasing Governance, Risk and Compliance requirements, they
are globally becoming increasingly aware of the need to ensure the
data they rely on for themselves and their customers is credible,
accurate and current; and the training to ensure they are
knowledgeable and meet current standards - all must be relevant,
measurable and independently assessed.
"We now transact with over 8,000 customers and gather data from
around 250 geographies. We have increased our geographic presence
and now operate in the UK, Ireland, USA, France, Singapore, Hong
Kong, Malaysia, Indonesia, India, and the MENA region. Our
increasing global reach provides us with opportunities to develop
and provide our services across a broader international customer
base, whilst our single technology platforms will be instrumental
in helping us scale in both existing markets and in new
territories.
"The current financial year has started in line with our
expectations with continued organic revenue growth and improved
profits and cash."
The information contained within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulations (EU) No. 596/2014. Upon the publication of this
announcement this inside information is now considered to be in the
public domain.
For further information, please contact:
Wilmington plc
Mark Milner, Chief Executive Officer 020 7490 0049
Guy Millward, Chief Financial Officer
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.
Introduction
In 2021, Wilmington completed its strategic review and we took
the decisive steps to refocus the Group on the Governance, Risk and
Compliance markets. We invested in our digital first activities. We
restructured to operate as two divisions in one company, committing
to investment in our operational growth levers of sales, marketing
and product. We outlined the decisive steps needed to improve our
technology capabilities to accelerate our shift to single
technology platforms and tackled our legacy technology debt. We
committed to maturing our measures assessing and improving customer
satisfaction and employee engagement, designing and investing in a
new people programme and committing to meaningful ESG
commitments.
Since 2021, Wilmington has delivered against each of these
strategic aims. This structured, measured and progressive
transformation programme is delivering results, changing the shape
of our business, increasing value for our customers, delivering
growth for our shareholders and creating growth momentum across the
Group.
Results
For the year ending 30 June 2023, the Group saw overall organic
revenue growth of 9%, with growth across all parts of our business
except our healthcare unit. Our training and education division
achieved a particularly impressive 15% growth in organic revenue,
while our intelligence brands reported 3% growth, with strong
performance from our Axco, Pendragon and APM businesses offset by
the UK healthcare business' decline. We have also achieved a 7%
growth in recurring revenue[5], which now represents 39% of total
revenue. Currency movement had a minimal impact on the Group's
overall results.
The increased revenues and a continued focus on operational
efficiency and cost management resulted in adjusted PBT growth from
continuing businesses of 30% to GBP24.1m (2022: GBP18.6m) and a
corresponding improvement in adjusted PBT margin to 19.7% (2022:
16.6%). This resulted in adjusted basic earnings per share being up
27.0%. We also are proposing a final dividend of 7.3p (total of
10.0p). The Group strengthened its balance sheet, increasing its
net cash position (excluding lease liabilities) to GBP42.2m (2022:
GBP20.5m) after a strong year of converting profits to cash.
Strategy
We continued to focus on consolidating our already strong
presence in the large, growing and rapidly evolving GRC markets,
following the 2021 strategic review. 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, all of which
align strongly to Wilmington's core offering.
At the heart of this focus on the GRC markets is our ambition to
help our customers to do the right business in the right way, by
providing a complementary range of information & data and
training & education solutions. Our operating model mirrors
this core purpose. Our Intelligence division provides specialist
data and analytics that give customers the detailed insight they
need to understand the regulatory landscape, and our Training &
Education division delivers specialist training that equips them to
navigate it successfully. As planned, we completed the disposal of
our non-core Spanish insurance information business in the first
half of the financial year.
Investment programme
Our investment approach across the Group continues to be
targeted at embedding the unique characteristics that define our
competitive advantage into each of our brands. I am pleased with
the progress we have made in developing single technology platforms
in each of our divisions, providing the foundation to accelerate
our growth ambitions and enabling us to provide an improved user
experience to our customers, resulting in an increased competitive
advantage. It will also give us the agility to respond to their
ever-changing needs in the rapidly evolving GRC markets, enhancing
our growth potential. The implementation of single platforms in
each division will also allow us to efficiently expand our offering
by creating a scalable portfolio to enhance our growth
potential.
Version 1.0 of the Digital Learning Platform was successfully
released at the end of FY22. We are taking the learnings from this
version to improve both the design and product features, with
version 2.0 on track to be delivered by June 2024. A new technology
leader has joined the Group to spearhead the version 2.0 design and
delivery, and increase the speed of development.
We continue to invest organically in new products and strengthen
our existing product offerings, with the scope to monetise our
solutions greatly enhanced by our single platform approach. This
strategy for maximising the value of our technology and data
assets, combined with our streamlined operating model, provides the
strong base to actively consider acquisition targets which
complement and/or extend our capabilities.
Artificial Intelligence
The advent of artificial intelligence (AI) has created immense
potential for efficiency and AI enhanced products within the GRC
domain. The realm of AI, wherein machines strive to replicate
intricate human cognitive functions, holds the promise of
overhauling industries and reshaping entire work processes and
value streams. The disruptive prowess of AI technology is rooted in
its ability to mechanise tasks, optimise decision-making protocols
and unlock uncharted pathways across an array of sectors.
By orchestrating the automation of repetitive tasks and routine
processes, AI holds the potential to fine-tune operations, curtail
expenditures and strategically allocate resources to endeavours of
higher value. Furthermore, the analytical capabilities of AI can
bestow invaluable insights, paving the way for informed,
data-driven decision-making and astute strategic optimisation.
Within the strategic framework of Wilmington, deliberate
measures are being put into action to navigate the risks that
accompany AI technology while simultaneously harnessing its
opportunities.
A working group has been created to take a risk and
opportunity-based approach to AI. This group has meticulously
crafted a series of recommendations encompassing risk mitigation
strategies, operational efficiency enhancements and augmentation of
products. Diligent actions to mitigate risks are already underway,
encompassing fortifying our digital assets with robust protective
layers to thwart unauthorised scraping by external entities.
Simultaneously, revised policies governing the utilisation of AI
technology have been devised, covering both our internal staff and
the interactions with our valued customers. Given AI's remarkable
capacity to generate content from vast reservoirs of data,
inadvertent infringement of copyrighted material looms as a notable
concern. The implementation of comprehensive protective protocols
and mechanisms becomes imperative in safeguarding the sanctity of
intellectual property rights.
Beyond these operational facets, AI stands as a catalyst for
elevated product development, providing the capability for
predictive analytics, tailored recommendations, and intelligent
automation. This transformative potential empowers us to furnish
clients with products that are not only more personalised, but also
more resourceful and innovative. For example, in our Training and
Education division we will be exploring course recommendation,
automated grading and feedback and translation services, and in our
Intelligence Division the enhancement of our proprietary data,
which is protected within our secure environment.
Scale
Wilmington is helping our customers to do the right business, in
the right way. Governments, Regulators, businesses, and individuals
are globally becoming increasingly aware of the requirements and
benefits of implementing appropriate Governance, Risk and
Compliance training and of ensuring data and intelligence sources
are as current and accurate as possible.
This global market movement provides Wilmington with an
increasing opportunity to develop and provide services across a
broader international customer base. Alongside existing core
operation centres in the UK, Ireland, USA, France, Singapore, Hong
Kong, and Malaysia, we are also building an increasing presence in
Indonesia. We now have a commercial presence in India and have
invested further in the MENA region. We expect soon to expand our
offering, through partners, in China.
Operating efficiency is maintained by our product offering in
these new territories being built on our existing capabilities and
content, with a small degree of customisation of materials to
reflect the differing characteristics of each domestic market.
The investment in commercial and customer service functions was
made in FY23, enabling us to measure performance and fine-tune our
offering throughout FY24. No further significant investment in this
area is expected throughout FY24. Our development of single
technology platforms will be instrumental in helping us scale in
both existing markets and in new territories.
A growth mindset
We began the process of pivoting the Group to a digital first
strategy in FY20 and FY21 and this has enabled us to deliver two
years of quarter-on-quarter organic revenue and profit growth. Our
revised strategic focus, consolidating our strong presence in the
large, growing and rapidly evolving GRC markets, provides the Group
with many growth opportunities.
Wilmington now transacts with over 8,000 customers and gathers
data from around 250 geographies, and has new opportunities in new
markets. Whilst Wilmington cannot claim to be a global business, we
are certainly well on the way to becoming a truly international
business.
Key to this organic and geographic progress is developing and
maintaining a strong growth mindset across all parts of our Group.
We invested in new leaders for many of our businesses and our
shared services in FY22, specifically recruiting or promoting
individuals with a proven track record of implementing and
delivering growth strategies. The changes and expertise these
individuals have brought have been one of the reasons why we have
reported another strong set of results.
A key part of our growth mindset is to focus on the many drivers
of employee engagement, which increased year on year as measured by
our annual engagement survey. Development is actioned by activities
such as regular Town Halls, the building and support of
communities, and development of Working Groups to focus on keys
areas such as diversity and inclusion, reward strategies, talent
development and others.
Instrumental in the development of our people culture was the
recruitment of a Chief People Officer in November 2021, who has
significantly developed our people activities across a very broad
spectrum of activities including, but not limited to, a refreshed
wellbeing strategy and services, a complete review of our reward
and benefits strategy, the creation of job families across selected
disciplines, investment in our learning and development services,
and development of diversity and inclusion policies, practices and
initiatives. More details can be found in our Sustainability
report.
Responsible business
We are committed to investing in the initiatives that support
our own responsible business culture. We have achieved progress
against our targets in all four areas of our sustainability
strategy, and this work continues to underpin our broader strategic
objectives and risk management processes. Full details of this work
can be found in our Sustainability report.
We implemented the Taskforce for Climate-related Financial
Disclosures (TCFD) recommendations in full last year. We concluded
that we must continue to monitor the impacts of climate change on
the Group's risk profile, but that the potential opportunities that
may arise from the transition to a low-carbon economy are well
aligned to our core offering. We have committed to net-zero carbon
targets, with an ambition of absolute zero, producing no greenhouse
gas emissions, in respect of Scope 1 and 2 emissions by 2028, and
net zero in respect of Scope 3 emissions by 2045.
Portfolio update
In December 2022, we completed the disposal of Inese, a media
and event business based in Madrid, Spain. We had flagged the
business as held for sale from February 2020, with the disposal
process significantly hampered by the Covid-19 pandemic.
We continue to review all parts of the Group assessing
businesses against six key characteristics: organic growth
opportunities; attractive markets; digital and data capabilities;
strong leadership; strategic fit to the GRC marketplaces; and
attractive product, revenue, and profitability characteristics.
We continue to seek businesses to join the Wilmington Group,
with a highly active M&A function exploring many options. To
date, whilst we have identified numerous businesses which meet our
required characteristics, valuation expectations continue to remain
high and we continue with our disciplined approach. We will
continue to explore inorganic opportunities, whilst remaining
focussed on our organic growth.
Summary and outlook
Wilmington has transformed over the last four years to become a
digital first business, focussed on the attractive GRC sector,
reinvigorating and innovating our products and services to develop
deeper and longer-term relationships with clients, focussed on the
Intelligence and Training & Education markets, with a growth
mindset at our core.
This new strategy is delivering, and key to this transformation
are our people and supporting businesses who work tirelessly to
constantly develop and improve many aspects of what we do, how we
do it, and deliver increasing value to our customers.
The current financial year has started in line with our
expectations with continued organic revenue growth and improved
profits and cash.
Thank you to each and every one of my colleagues for their
commitment to Wilmington, for their passion and expertise in their
chosen areas, and for the energy they bring to our many growth
projects. Our recently launched company values of Inclusivity,
Ambition, Curiosity, and Integrity resonate well with our strategic
ambitions and, with a mindful eye on the geopolitical and economic
uncertainty, we look forward to delivering our plans for FY24 and
beyond.
Divisional review
Training & Education
Organic variance
2023 2022 Absolute variance [6]
GBP'm GBP'm % %
---------------------------- ----- ----- ----------------- ----------------
Revenue
Global[7] 24.5 23.2 6% 4%
UK and Ireland[8] 24.7 22.1 12% 12%
North America[9] 15.7 11.0 43% 31%
Continuing revenue (6) 64.9 56.3 15% 12%
---------------------------- ----- ----- ----------------- ----------------
Continuing operating profit 16.1 14.4 11% 8%
Margin % 25% 26%
---------------------------- ----- ----- ----------------- ----------------
Statutory revenue 64.9 61.4 6% 12%
Statutory operating profit 16.1 16.0 0% 8%
---------------------------- ----- ----- ----------------- ----------------
The revenue split shown in this table is not a geographic split
of revenues, the split shows revenues of our business groupings
within Training and Education which are described below .
Business model and markets
The Global business comprises two units that operate in
Compliance markets. The largest business, which was developed
organically within Wilmington, is the International Compliance
Association ('ICA'). It is an industry body and training business
that was created in 2002 which offers professional development and
support to compliance officers predominantly in the financial
services sector. It has offices in the UK, Singapore, Malaysia and
Dubai, and a new presence in India. ICA primarily serves the
financial services industry. The material for ICA courses is
developed by our own internal R&D team, and external
specialists. We own the associated intellectual property.
Revenue earned by ICA is primarily training income complemented
by subscriptions paid by the professional members for their ICA
accreditations. The courses ICA run usually extend over several
weeks or even months. They traditionally mix distance learning with
face-to-face sessions. The distance learning element has
transitioned to online and digital variants, and virtual programmes
have been offered in place of face-to-face sessions. To support the
move to virtual training in ICA a new Digital Learning Platform
('hub') is being built - it was launched at the start of 2021 and
further developments are due for release in the coming months.
The other Global business, CLTi, earns revenue from running
professional development programmes for wealth managers. Wilmington
has an international presence, with centres in the UK, Europe, and
Asia Pacific. Our consistent investment programme in content and
technology is maintaining our competitive positioning.
The UK and Ireland business predominantly provides training for
accountants in practice and in business, and individuals involved
in the legal system, including lawyers. It runs a mix of
face-to-face, online, and blended learning for these communities.
It provides training at various levels including providing
continuing professional development for existing qualified
accountants and, in the case of the legal profession, helping them
train their clients for interaction with the legal system.
Additionally, it provides technical support to accountancy firms
which enables them to keep abreast of technical developments and
changes to regulation, as well as supporting them to promote the
services they then offer to their clients.
Mercia (accountancy) and Bond Solon (legal) are predominantly UK
and Ireland based, reflecting the country specific laws and
accounting standards that govern their profession. Revenue in the
unit is earned through clients subscribing for ongoing training
support and other related activities over a period of time (usually
twelve months), with the rest through one off course attendance
fees. Courses are typically single or half day events, and content
is a mix of owned and third-party intellectual property. Courses
are delivered either by in-house experts or a network of
independent tutors who are paid per course that they deliver.
The Law for Non-Lawyers market is strong, with good ongoing
demand for existing products as well as successful launches of new
training courses. The Accountancy market has returned to growth
following a dip due to Covid-19 and demand is expected to benefit
from upcoming regulation change in the UK.
The North America business, FRA, is predominantly events based.
It serves the US Healthcare and Health Insurance markets and, to a
lesser extent, the US financial and legal service communities. The
prime brand is the RISE series of events that addresses the
Medicare and Medicaid markets and is attended by health plans,
physician groups and solution partners. The flagship event is RISE
National which normally takes place in March each year. Revenue
from the US events is generated from both sponsorship and delegate
sales.
Trading performance
Revenues grew 15%, 12% if currency gains are excluded. All five
of the businesses within the division grew organically and
recurring subscription revenues grew 11%.
ICA revenues were up 6% as double-digit growth in the UK was
offset by a further drop in Singapore revenues after the
exceptional growth there in FY21. UK saw double digit growth. CLTi
grew 4% and is focussed on increasing business in new territories
in FY24.
Bond Solon saw double-digit growth in FY23, driven by a strong
increase in demand across the year. Mercia revenues grew 11% in the
year and moved above its pre-Covid-19 revenues.
In the US, FRA increased revenues by 43% (31% if currency gains
are excluded) as demand from both delegates and sponsors grew
strongly in the face of continuing regulatory change.
Overall divisional operating profit increased by 11%, mainly due
to increased revenues. The operating profit margin was slightly
down to 25% (2022: 26%) following increased technology
investment.
Intelligence
2023 2022 Absolute variance Organic variance
GBP'm GBP'm % %
--------------------------------- ----- ----- ----------------- ----------------
Revenue
Healthcare[10] 30.5 30.8 -1% -1%
Financial Services and Other[11] 21.7 19.8 9% 5%
MiExact 5.0 5.0 1% 1%
Continuing revenue 57.2 55.6 3% 1%
--------------------------------- ----- ----- ----------------- ----------------
Continuing operating profit 13.0 10.8 20% 20%
Margin % 23% 19%
--------------------------------- ----- ----- ----------------- ----------------
Statutory revenue 58.6 59.6 -2% 1%
Statutory operating profit 13.3 11.4 17% 20%
--------------------------------- ----- ----- ----------------- ----------------
Business model and markets
Wilmington offers a wide range of products and services through
its Healthcare businesses predominantly around the provision of
market and customer intelligence. The core of the data supplied
comes primarily from publicly available sources. The value
generated by our services is based around its collation,
verification, combination with other complementary data sources and
then its ease of presentation and usage. In some areas we provide
proprietary analysis of the data and editorial comment which
constitute our own intellectual property.
Wilmington's Healthcare businesses operate mainly in the UK and
France and provide deep insight information on practitioners,
facilities and treatments in the UK and French health sector
markets that enable suppliers into those markets, including
pharmaceutical companies, to understand and connect better with
their customers. Revenue is mainly earned through sales of discrete
packages of data or through subscription services for the ongoing
provision of information. Additionally, in the UK we publish the
Health Service Journal ('HSJ'), the leading online publication in
the UK for healthcare leaders, with revenue generated through
providing subscriptions to NHS foundation trusts, Clinical
Commissioning Groups, and suppliers to the NHS.
The Financial Services/Other businesses operate in the
Insurance, Pensions and Compliance markets. These businesses
provide a broad range of information products and services with
revenues generated primarily through subscription but also
sponsorship, lead generation and event attendance. Inese, the
Spanish insurance business, was sold in December 2022.
The MiExact business consists of a portfolio of data products
including charity fundraising information, and marketing data
suppression tools. They include services that are used by
organisations to help prevent identify fraud. Revenue is
predominantly subscription based.
Trading performance
Overall Intelligence revenues from continuing businesses grew
3%, 1% if currency gains are excluded. All businesses except UK
Healthcare grew. Recurring subscription revenues grew 6% with
strong retention rates.
Healthcare revenues declined 1%, with UK revenues down 4% offset
by growth in France of 8% (6% excluding currency gains). Market
uncertainty led to a loss of data revenue in the UK.
Financial Services revenues grew by 9%, 5% if currency gains are
excluded. Subscription revenues grew 10% and were particularly
strong in Axco. Compliance Week grew sterling revenues but dollar
revenues slipped back 4%.
MiExact revenues grew 1% after a slow first half was followed by
a strong final quarter. Subscription revenues grew 6% and had a
retention rate of 99%.
Intelligence divisional operating profit from continuing
businesses grew by 20%, helped by continuing focus on its cost base
and automation of its processes. Operating margins improved to 23%
from 19%.
Financial review
Overview
The Group performance was strong during the year, driving
organic growth in revenue and profit and reinforcing the strength
of the balance sheet, reflected by the closing net cash
position.
Adjusting items, measures, and adjusted results
In this Financial review reference is made to adjusted results
as well as the equivalent statutory measures. The Directors make
use of adjusted results, which are not considered to be a
substitute for or superior to IFRS measures, to provide
stakeholders with additional relevant information and enable an
alternative comparison of performance over time. Adjusted results
exclude amortisation of intangible assets (excluding computer
software), impairments, other income (when material or of a
significant nature) and other adjusting items.
Organic
2023 2022 Absolute variance variance
GBP'm GBP'm GBP'm % %
----------------- ------- ------- ---------- ---------- ----------
Revenue 123.5 121.0 2.5 2.0% 6.7%
Adjusted profit
before tax 24.3 20.7 3.6 17.6% 13.3%
Adjusted profit
margin % 19.7% 17.1%
----------------- ------- ------- ---------- ---------- ----------
Variances described as 'organic' are calculated by adjusting the
revenue change achieved year-on-year to exclude the impact of
changes in foreign currency exchange rates and also to exclude the
impact of changes in the portfolio from acquisitions and
disposals.
Revenue
Group revenue increased 2.0% overall and 6.7% on an organic
basis, the overall increase reflecting GBP0.3m of foreign currency
downside and the impact of disposals. Full details can be found in
the Review of Operations.
Operating expenses before amortisation of intangible assets
(excluding computer software) and impairments
Operating expenses before amortisation of intangible assets
(excluding computer software) and impairments were GBP99.4m (2022:
GBP99.4m), flat year on year.
Within operating expenses, staff costs increased GBP1.1m to
GBP56.3m (2022: GBP55.2m). This net increase reflects the
inflationary pay rise at the beginning of the year. The increases
were partly offset by salary cost savings generated from a
reduction in headcount post disposals. Share based payment costs
increased GBP0.3m due to the 2023 SAYE scheme which commenced in
the year.
Non-staff costs decreased by GBP1.1m to GBP43.1m (2022:
GBP44.2m), reflecting the costs saved due to the sale of Inese and
the reduction in amortisation of computer software within
intangible assets year on year.
Unallocated central overheads
Unallocated central overheads, representing Board costs and head
office salaries, as well as other centrally incurred costs not
recharged to the businesses, decreased GBP0.8m year-on-year to
GBP3.7m (2022: GBP4.5m).
Adjusted profit before tax ('adjusted PBT')
As a result of increased revenue and a continued focus on
operational efficiency and cost management , adjusted profit before
tax, which eliminates the impact of amortisation of intangible
assets (excluding computer software), impairments, other income and
other adjusting items, was up 17.6% to GBP24.3m (2022:
GBP20.7m).
Adjusted profit margin (adjusted PBT expressed as a percentage
of revenue) also increased to 19.7% (2022: 17.1%).
Amortisation excluding computer software, impairment charge and
other income
Amortisation of intangible assets (excluding computer software)
was GBP2.4m (2022: GBP2.4m) representing intangible assets acquired
as part of prior year acquisitions.
Other income represents the net gain of GBP2.2m from the
disposal of Inese.
Adjusting items within operating expenses
Adjusting items within operating expenses of GBP0.1m (2022:
GBP0.1m) are those items that are one off in nature and which do
not represent the ongoing trading performance of the business.
Operating profit ('EBITA')
Operating profit was GBP23.8m (2022: GBP37.0m). The large
decrease is driven by the GBP16.3m gain of the sale of AMT and La
Touche (Inese sale: GBP2.2m for FY23 comparison) and the adjusting
other income (profits on sale of property) all in the prior
year.
Net finance income
Net finance income up GBP1.2m to GBP0.2m (2022: net finance
costs of GBP0.9m), primarily related to the interest received on
the large cash balance the Group maintained during the full
year.
Profit before taxation
Profit before taxation was GBP24.0m (2022: GBP36.1m); a
reconciliation of this to adjusted profit before tax can be found
in note 3.
Taxation
The tax charge for the year was GBP3.8m (2022: GBP3.3m)
reflecting an effective tax rate of 15.9% (2022: 9.1%). The
increase in the tax rate year-on-year reflects the nature of other
operating income and adjusting items, specifically the gain on
disposal of businesses in 2022 vs 2023 which were not subject to
corporation tax.
The underlying tax rate which ignores the tax effects of
adjusting items has risen slightly to 22.3% (2022: 21.0%). The
increase reflects the UK corporation tax increase from 19% to 25%
in April 2023, one quarter of which applies to FY23.
Earnings per share
Adjusted basic earnings per share increased by 15.2% to 21.49p
(2022: 18.66p), due to the increase in adjusted profit before tax,
offset by a slight increase in the underlying tax rate (see above)
and an essentially unchanged number of issued ordinary shares (see
below). Basic earnings per share was 22.94p (2022: 37.46p) in the
prior year, reflecting the decrease in profit after tax.
Continuing adjusted basic earnings per share, excluding the
results of sold and closed businesses, increased by 27.2% to 21.27p
(2022: 16.72p), see reconciliation below.
2023 2022
GBP'm GBP'm
------------------------------------- ----------- -----------
Adjusted earnings (note 9) 18.9 16.3
Remove profit after tax of sold
and closed businesses (0.2) (1.7)
------------------------------------- ----------- -----------
Continuing adjusted earnings 18.7 14.6
Number Number Variance
------------------------------------- ----------- ----------- ---------
Weighted average number of ordinary
shares (note 9) 88,027,119 87,632,022
Continuing adjusted basic earnings
per share 21.27p 16.72p 27.2%
------------------------------------- ----------- ----------- ---------
Dividend
A final dividend of 7.3p per share (2022: 5.8p) will be proposed
at the AGM. This will give a full year dividend up 22% to 10.0p
(2022: 8.2p) and dividend cover of 2.1 times (2022: 2.3 times).
If approved it will be paid on 28 November 2023 to shareholders
on the register as at 3 November 2023 with an associated
ex-dividend date of 2 November 2023.
Balance sheet
Non-current assets
Goodwill at 30 June 2023 was GBP60.6m (2022: GBP61.1m). A
weakening US Dollar led to a decrease in the Sterling value of the
US Dollar portion of the Group's goodwill.
Intangible assets decreased by GBP3.7m to GBP5.7m (2022:
GBP9.4m) due to amortisation of GBP4.1m, partly offset by additions
of GBP0.6m within computer software reflecting the Group's
continued strategy to invest in the existing businesses to fuel
organic growth. Additions reflect the continued investment in
Wilmington's digital transformation. The remaining decrease
reflects exchange translation differences.
Property, plant and equipment increased by GBP0.1m to GBP7.0m
(2022: GBP6.9m). This is attributable to the GBP1.9m increase in
the right of use assets due to the new France and USA leases
entered into during the year, together with GBP0.5m of other
additions, offset by depreciation of GBP2.3m.
Deferred consideration receivable
The deferred consideration receivable balance of GBP1.9m (2022:
GBP1.7m) relates to the disposal of ICP in July 2018 and the
deferred consideration from the sale of Inese (see note 10), with
GBP1.1m recognised within non-current assets and the remaining
GBP0.8m recognised within current assets.
Trade and other receivables
Trade and other receivables remained relatively constant at
GBP27.4m (2022: GBP27.1m).
Current tax liability
At 30 June 2023 the Group recognised a liability relating to
current tax of GBP0.1m (2022: asset GBP1.3m). The net liability
position reflects a slight net underpayment position.
Trade and other payables
Trade and other payables increase by GBP5.7m to GBP56.0m (2022:
GBP50.3m). Within this, subscriptions and deferred revenue
increased by GBP2.3m or 7.1% to GBP33.7m (2022: GBP31.4m), the rest
of the increase is due to payment timings. This increase in
subscriptions and deferred revenue was driven mostly by the growth
of subscription services in the year.
Provisions
Provisions were GBP1.2m (2022: GBP1.5m), relating wholly to
future committed costs associated with the closed portion of the
head office space.
Net cash, lease liabilities and cash flow
Net cash, which includes cash and cash equivalents, cash
classified as held for sale, bank loans and bank overdrafts, and
lease liabilities, was GBP35.0m (2022: GBP13.0m). This significant
net cash position is driven by a strong trading performance
delivering improved profits and effective cash management as well
as a cash inflow associated with the sale of Inese.
Lease liabilities decreased to GBP7.2m (2022: GBP7.5m). GBP2.1m
cash payments in relation to contractual lease obligations were
made during the year reducing the balance, offset by the new France
and USA leases mentioned above and GBP0.2m of notional interest on
lease liabilities reported within net finance costs.
Cash conversion remained strong at 138% (2022: 114%).
Share capital
In October 2022 Wilmington issued 340,052 ordinary voting shares
to satisfy the Company's obligations under its Performance Share
Plan.
During the year 30,215 shares held by the Employee Share
Ownership Trust ('ESOT') were used to satisfy the Company's
obligations under the SAYE Plan. At 30 June 2023, the ESOT held
352,651 shares (2022: 403,782) in the Company, which represents
0.4% (2022: 0.5%) of the called up share capital.
60,762 shares held in treasury were used to satisfy the
Company's obligations under the SAYE Plan during the year. At 30
June 2023, 5,208 shares (2022: 65,970) were held in treasury, which
represents 0.1% (2022: 0.1%) of the share capital of the
Company.
Consolidated income statement
for the year ended 30 June 2023
Year ended Year ended
30 June 30 June
2023 2022
Notes GBP'000 GBP'000
------------------------------------------------------ ----- ---------- ----------
Continuing operations
Revenue 4 123,497 121,028
------------------------------------------------------ ----- ---------- ----------
Operating expenses before amortisation of intangibles
excluding computer software, impairment and
adjusting items (99,391) (99,407)
Impairment of property, plant and equipment - (597)
Amortisation of intangible assets excluding
computer software 5b (2,381) (2,368)
Adjusting items 5b (147) (66)
------------------------------------------------------ ----- ---------- ----------
Operating expenses (101,919) (102,438)
Other income - gain on disposal of subsidiaries 13 2,212 16,329
Other income - gain on disposal of property,
plant and equipment - 1,289
Other income - net gain on financing activities - 840
------------------------------------------------------ ----- ---------- ----------
Operating profit 23,790 37,048
Finance income 6 478 113
Finance expense 6 (246) (1,041)
------------------------------------------------------ ----- ---------- ----------
Profit before tax 24,022 36,120
Taxation 7 (3,827) (3,295)
------------------------------------------------------ ----- ---------- ----------
Profit for the year attributable to owners of
the parent 20,195 32,825
------------------------------------------------------ ----- ---------- ----------
Earnings per share:
Basic (p) 9 22.94 37.46
Diluted (p) 9 22.38 36.98
------------------------------------------------------ ----- ---------- ----------
Consolidated statement of comprehensive income
for the year ended 30 June 2023
Year ended Year ended
30 June 30 June
2023 2022
GBP'000 GBP'000
---------------------------------------------------------- ---------- ----------
Profit for the year 20,195 32,825
Other comprehensive (expense)/income:
Items that may be reclassified subsequently to the income
statement
---------------------------------------------------------- ---------- ----------
-Currency translation differences (991) 2,353
-Fair value movements of net investment hedges, net
of tax - (193)
---------------------------------------------------------- ---------- ----------
Other comprehensive (expense)/income for the year, net
of tax (991) 2,160
---------------------------------------------------------- ---------- ----------
Total comprehensive income for the year attributable
to owners of the parent 19,204 34,985
---------------------------------------------------------- ---------- ----------
Items in the statement above are disclosed net of tax. The
income tax relating to each component of other comprehensive income
is disclosed in note 7.
Balance sheets
as at 30 June 2023
2023 2022
Notes GBP'000 GBP'000
-------------------------------------------- --------- --------- ---------
Non-current assets
Goodwill 60,561 61,128
Intangible assets 5,734 9,427
Property, plant and equipment 7,015 6,876
Deferred consideration receivable 1,152 1,448
Deferred tax assets 925 1,041
-------------------------------------------- --------- --------- ---------
75,387 79,920
-------------------------------------------- --------- --------- ---------
Current assets
Trade and other receivables 11 27,391 27,097
Deferred consideration receivable 752 250
Current tax assets - 1,262
Cash and cash equivalents 42,173 19,785
Assets of disposal group held for sale - 1,450
-------------------------------------------- --------- --------- ---------
70,316 49,844
-------------------------------------------- --------- --------- ---------
Total assets 145,703 129,764
-------------------------------------------- --------- --------- ---------
Current liabilities
Trade and other payables 12 (55,966) (50,258)
Lease liabilities (975) (648)
Current tax liabilities (44) -
Provisions (307) (307)
Liabilities of disposal group held for sale - (1,332)
-------------------------------------------- --------- --------- ---------
(57,292) (52,545)
-------------------------------------------- --------- --------- ---------
Non-current liabilities
Lease liabilities (6,235) (6,862)
Deferred tax liabilities (607) (2,040)
Provisions (921) (1,228)
-------------------------------------------- --------- --------- ---------
(7,763) (10,130)
-------------------------------------------- --------- --------- ---------
Total liabilities (65,055) (62,675)
-------------------------------------------- --------- --------- ---------
Net assets 80,648 67,089
-------------------------------------------- --------- --------- ---------
Equity
Share capital 4,408 4,391
Share premium 45,553 45,553
Treasury and ESOT reserves (786) (1,093)
Share based payments reserve 2,635 2,141
Translation reserve 3,431 4,422
Retained earnings 25,407 11,675
-------------------------------------------- --------- --------- ---------
Total equity 80,648 67,089
-------------------------------------------- --------- --------- ---------
Statements of changes in equity
for the year ended 30 June 2023
Share capital,
share premium,
treasury
shares Share based
and ESOT payments Translation Retained
shares reserve reserve earnings Total equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------- --------------- ----------- ----------- --------- ------------
Group
At 1 July 2021 48,904 1,390 2,069 (15,696) 36,667
Profit for the year - - - 32,825 32,825
Other comprehensive income/(expense)
for the year - - 2,353 (193) 2,160
------------------------------------- --------------- ----------- ----------- --------- ------------
48,904 1,390 4,422 16,936 71,652
Transactions with owners:
Dividends paid - - - (5,492) (5,492)
Performance share plan awards
vesting settled via ESOT 84 (105) - 21 -
ESOT share purchases (371) - - - (371)
Sale of treasury shares 49 - - - 49
Purchase of treasury shares (154) - - - (154)
Issue of share capital 11 - - - 11
Issue of share premium 328 - - - 328
Save As You Earn options settlement - (180) - 152 (28)
Share based payments - 1,036 - - 1,036
Tax on share based payments - - - 58 58
------------------------------------- --------------- ----------- ----------- --------- ------------
At 30 June 2022 48,851 2,141 4,422 11,675 67,089
Profit for the year - - - 20,195 20,195
Other comprehensive expense for
the year - - (991) - (991)
------------------------------------- --------------- ----------- ----------- --------- ------------
48,851 2,141 3,431 31,870 86,293
Transactions with owners:
Dividends paid - - - (7,462) (7,462)
Issue of share capital 17 - - - 17
Performance share plan awards
vesting - (717) - 854 137
Save As You Earn options settlement
via ESOT 154 (11) - (16) 127
Save As You Earn options settlement
via treasury shares 153 - - (64) 89
Share based payments - 1,222 - - 1,222
Tax on share based payments - - - 225 225
------------------------------------- --------------- ----------- ----------- --------- ------------
At 30 June 2023 49,175 2,635 3,431 25,407 80,648
------------------------------------- --------------- ----------- ----------- --------- ------------
Cash flow statements
for the year ended 30 June 2023
Year ended Year ended
30 June 30 June
2023 2022
Notes GBP'000 GBP'000
-------------------------------------------------- ----- ----------- ----------
Cash flows from operating activities
Cash generated from/(used in) operations before
adjusting items 13 33,205 24,570
Cash flows for adjusting items - operating
activities (375) (342)
Cash flows from tax on share based payments (2) (4)
-------------------------------------------------- ----- ----------- ----------
Cash generated from/(used in) operations 32,828 24,224
Interest received/(paid) 344 (479)
Tax paid (3,268) (3,397)
-------------------------------------------------- ----- ----------- ----------
Net cash generated from/(used in) operating
activities 29,904 20,348
-------------------------------------------------- ----- ----------- ----------
Cash flows from investing activities
Disposal of subsidiaries net of cash 10 1,549 22,792
Deferred consideration received 250 250
Cash flows for adjusting items - investing
activities (6) (43)
Purchase of property, plant and equipment (461) (440)
Proceeds from disposal of property, plant and
equipment 13 3,493
Purchase of intangible assets (595) (1,292)
-------------------------------------------------- ----- ----------- ----------
Net cash generated from investing activities 750 24,760
-------------------------------------------------- ----- ----------- ----------
Cash flows from financing activities
Dividends paid to owners of the parent (7,462) (5,492)
Cash received from sale of shares for share
vesting 573 340
Share issuance costs (14) (28)
Purchase of shares by ESOT - (371)
Payment of lease liabilities (2,109) (3,752)
Cash flows for adjusting items - proceeds on
disposal of interest rate swap - 1,243
Decrease in bank loans - (21,198)
-------------------------------------------------- ----- ----------- ----------
Net cash used in financing activities (9,012) (29,258)
-------------------------------------------------- ----- ----------- ----------
Net increase in cash and cash equivalents,
net of bank overdrafts 21,642 15,850
-------------------------------------------------- ----- ----------- ----------
Cash and cash equivalents, net of bank overdrafts
at beginning of the year 20,543 3,730
Exchange (loss)/gain on cash and cash equivalents (12) 205
Cash classified as held for sale - 758
-------------------------------------------------- ----- ----------- ----------
Cash and cash equivalents, net of bank overdrafts
at end of the year 42,173 20,543
-------------------------------------------------- ----- ----------- ----------
Reconciliation of net cash
-------------------------------------------------- ----- ----------- ----------
Cash and cash equivalents at beginning of the
year 19,785 7,374
Cash classified as held for sale 758 -
Bank overdrafts at beginning of the year - (3,644)
Bank loans at beginning of the year - (20,960)
Lease liabilities at beginning of the year (7,510) (10,742)
-------------------------------------------------- ----- ----------- ----------
Net cash/(debt) at beginning of the year 13,033 (27,972)
-------------------------------------------------- ----- ----------- ----------
Net increase in cash and cash equivalents,
net of bank overdrafts 21,630 16,813
Net repayment in bank loans - 21,198
Exchange loss on bank loans - (238)
Movement in lease liabilities 300 3,232
-------------------------------------------------- ----- ----------- ----------
Cash and cash equivalents at end of the year 42,173 19,785
Cash classified as held for sale at end of
the year - 758
Lease liabilities at end of the year (7,210) (7,510)
-------------------------------------------------- ----- ----------- ----------
Net cash at end of the year 34,963 13,033
-------------------------------------------------- ----- ----------- ----------
Notes to the financial statements
1. Nature of the Financial Statements
The following financial information does not amount to full
financial statements within the meaning of Section 434 of Companies
Act 2006. The financial information has been extracted from the
Group's Annual Report and Financial Statements for the year ended
30 June 2023 on which an unqualified report has been made by the
Company's auditors.
Financial statements for the year ended 30 June 2023 have been
delivered to the Registrar of Companies; the report of the auditors
on those accounts was unqualified and did not contain a statement
under Section 498 of the Companies Act 2006. The 2023 statutory
accounts will be delivered in due course.
Copies of the Annual Report and Financial Statements will be
made available to shareholders shortly and will be available from
the Company's registered office at 10 Whitechapel High Street,
London, E1 8QS.
2. Statement of accounting policies
The preliminary announcement for the year ended 30 June 2023 has
been prepared in accordance with UK adopted international
accounting standards (UK adopted IAS). The accounting policies
applied in this preliminary announcement are consistent with those
reported in the Group's Annual Financial Statements for the year
ended 30 June 2022. There was no material effect from the adoption
of new standards or interpretations in the year ended 30 June
2023.
3. Measures of profit
Reconciliation to profit on continuing activities before tax
To provide shareholders with additional understanding of the
trading performance of the Group, adjusted EBITA has been
calculated as profit before tax after adding back:
-- impairment of property, plant and equipment;
-- 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;
-- other income - net gain on financing activities; and
-- net finance income/expense.
Adjusted profit before tax, adjusted EBITA and adjusted EBITDA
reconcile to profit on continuing activities before tax as
follows:
Year ended Year ended
30 June 30 June
2023 2022
GBP'000 GBP'000
------------------------------------------------- ---------- ----------
Profit before tax 24,022 36,120
Impairment of property, plant and equipment - 597
Amortisation of intangible assets excluding
computer software 2,381 2,368
Adjusting items (included in operating expenses) 147 66
Other income - gain on disposal of subsidiaries (2,212) (16,329)
Other income - gain on disposal of property,
plant and equipment - (1,289)
Other income - net gain on financing activities - (840)
------------------------------------------------- ---------- ----------
Adjusted profit before tax 24,338 20,693
Net finance (income)/expense (232) 928
------------------------------------------------- ---------- ----------
Adjusted operating profit ('adjusted EBITA') 24,106 21,621
Depreciation of property, plant and equipment
included in operating expenses 2,321 2,412
Amortisation of intangible assets - computer
software 1,690 3,721
------------------------------------------------- ---------- ----------
Adjusted EBITA before depreciation ('adjusted
EBITDA') 28,117 27,754
------------------------------------------------- ---------- ----------
Adjusted profit before tax 24,338 20,693
Remove operating profit from sold and closed
businesses (212) (2,089)
--------------------------------------------- ------ -------
Continuing adjusted profit before tax 24,126 18,604
--------------------------------------------- ------ -------
4. 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 Board
considers the business from both a geographic and product
perspective. Geographically, management considers the performance
of the Group between the UK, Europe (excluding the UK), North
America and the Rest of the World.
a) Business segments
Revenue Profit Revenue Profit
Year ended Year ended Year ended Year ended
30 June 30 June 30 June 30 June
2023 2023 2022 2022
GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------- ----------- ----------- ----------- -----------
Training & Education 64,872 16,066 61,464 15,998
Intelligence 58,625 13,258 59,564 11,359
---------------------------------- ----------- ----------- ----------- -----------
Group total 123,497 29,324 121,028 27,357
Unallocated central overheads - (3,703) - (4,506)
Share based payments - (1,515) - (1,230)
---------------------------------- ----------- ----------- ----------- -----------
123,497 24,106 121,028 21,621
Impairment of property,
plant and equipment - (597)
Amortisation of intangible
assets excluding computer
software (2,381) (2,368)
Adjusting items (included
in operating expenses) (147) (66)
Other income - gain on disposal
of subsidiaries 2,212 16,329
Other income - gain on disposal
of property, plant and equipment - 1,289
Other income - net gain
on financing activities - 840
Net finance income/(expense) 232 (928)
---------------------------------- ----------- ----------- ----------- -----------
Profit before tax 24,022 36,120
---------------------------------- ----------- ----------- ----------- -----------
Taxation (3,827) (3,295)
---------------------------------- ----------- ----------- ----------- -----------
Profit for the financial
year 20,195 32,825
---------------------------------- ----------- ----------- ----------- -----------
There are no intra-segmental revenues which are material for
disclosure. Unallocated central overheads represent central costs
that are not specifically allocated to segments. Total assets and
liabilities for each reportable segment are not presented; as such
information is not provided to the Board.
b) Segmental information by geography
The UK is the Group's country of domicile and the Group
generates the majority of its revenue from external customers in
the UK. The geographical analysis of revenue is on the basis of the
country of origin in which the customer is invoiced:
Year ended Year ended
30 June 30 June
2023 2022
GBP'000 GBP'000
-------------------------- ---------- ----------
UK 70,573 64,320
USA 24,465 21,304
Europe (excluding the UK) 19,224 25,809
Rest of the World 9,235 9,595
-------------------------- ---------- ----------
Total revenue 123,497 121,028
-------------------------- ---------- ----------
c) Timing of revenue recognition
The timing of the Group's revenue recognition is as follows:
Year ended Year ended
30 June 30 June
2023 2022
GBP'000 GBP'000
----------------------------------- ---------- ----------
Revenue from products and services
transferred at a point in time 39,551 39,725
Revenue from products and services
transferred over time 83,946 81,303
----------------------------------- ---------- ----------
Total revenue 123,497 121,028
----------------------------------- ---------- ----------
During the year the Group recognised GBP31,405,000 of revenue
that was held as a contract liability 30 June 2022 (2022:
GBP30,124,000 related to amounts held at 30 June 2021).
5. Profit from continuing operations
a) Profit for the year from continuing operations is stated
after charging/(crediting):
Year
ended Year ended
30 June 30 June
2023 2022
GBP'000 GBP'000
--------------------------------------------------------- -------- ----------
Depreciation of property, plant and equipment - included
in operating expenses 2,321 2,412
Short term and low-value leases 94 114
Amortisation of intangible assets - computer software 1,690 3,721
Non-adjusting profit on disposal of property, plant
and equipment (36) (71)
Share based payments (including social security costs) 1,515 1,230
Amortisation of intangible assets excluding computer
software 2,381 2,368
Adjusting items (included in operating expenses) 147 66
Adjusting item - gain on disposal of subsidiaries (2,212) (16,329)
Adjusting item - gain on sale of property, plant and
equipment - (1,289)
Adjusting item - net gain on financing activities - (840)
Research and development expenditure credit (200) (183)
Impairment of property, plant and equipment - 597
Foreign exchange loss 179 446
Fees payable to the auditor for the audit of the Company
and consolidated financial statements 153 107
Fees payable to the auditor and their associates for
other services:
- The audit of the Company's subsidiaries pursuant
to legislation 240 205
- Audit related other services 17 15
--------------------------------------------------------- -------- ----------
b) Adjusting items
The following items have been charged to the income statement
during the year but are considered to be adjusting so are shown
separately:
Year
ended Year ended
30 June 30 June
2023 2022
GBP'000 GBP'000
------------------------------------------------------- -------- ----------
Expense relating to strategic activities 147 66
------------------------------------------------------- -------- ----------
Other adjusting items (included in operating expenses) 147 66
Impairment of property, plant and equipment - 597
Amortisation of intangible assets excluding computer
software 2,381 2,368
------------------------------------------------------- -------- ----------
Total adjusting items (classified in profit before
tax) 2,528 3,031
------------------------------------------------------- -------- ----------
6. Net finance income/(expense)
Year ended Year ended
30 June 30 June
2023 2022
GBP'000 GBP'000
--------------------------------------- ---------- ----------
Net finance income/(expense) comprise:
Interest receivable/(payable) on cash
and cash equivalents/(bank loans and
overdrafts) 373 (748)
Unwinding of the discount on royalty
payments receivable 105 113
Interest on lease liabilities (246) (293)
--------------------------------------- ---------- ----------
232 (928)
--------------------------------------- ---------- ----------
7. Taxation
Year ended Year ended
30 June 30 June
2023 2022
GBP'000 GBP'000
------------------------------------ ---------- ----------
Current tax
UK corporation tax at current rates
on UK profits for the year 3,263 2,817
Adjustments in respect of previous
years (54) (870)
------------------------------------ ---------- ----------
3,209 1,947
Foreign tax 1,634 969
Adjustments in respect of previous
years 89 -
------------------------------------ ---------- ----------
Total current tax 4,932 2,916
Total deferred tax (1,105) 379
------------------------------------ ---------- ----------
Taxation 3,827 3,295
------------------------------------ ---------- ----------
Factors affecting the tax charge for the year:
The effective tax rate is lower (2022: lower) than the average
rate of corporation tax in the UK of 20.5% (2022: 19.0%). The
differences are explained below:
Year ended Year ended
30 June 30 June
2023 2022
GBP'000 GBP'000
----------------------------------------- ---------- ----------
Profit before tax 24,022 36,120
----------------------------------------- ---------- ----------
Profit before tax multiplied by the
average rate of corporation tax in
the year of 20.5% (2022: 19.0%) 4,925 6,863
Tax effects of:
Impairment property, plant and equipment - 113
Foreign tax rate differences 338 201
Adjustment in respect of previous years 35 (870)
Other items not subject to tax (366) (3,012)
Deferred tax UK intangibles and capital
allowances movement (904) -
Effect on deferred tax of a change
in the corporation tax rate (83) -
Other deferred tax movements (118) -
----------------------------------------- ---------- ----------
Taxation 3,827 3,295
----------------------------------------- ---------- ----------
Deferred tax assets and liabilities are measured at the rates
that are expected to apply in the periods of the reversal.
The Company's profits for this accounting year are taxed at an
effective rate of 15.9% (2022: 9.1%).
Included in other comprehensive income is a tax charge of GBPnil
(2022: credit of GBP45,000) relating to the net investment
hedges.
The tax effect of adjusting items as disclosed in note 9 is a
credit of GBP1,598,000 (2022: GBP1,050,000).
8. Dividends
Amounts recognised as distributions to owners of the parent in
the year:
Year ended Year ended
30 June 30 June Year ended Year ended
2023 2022 30 June 30 June
Pence Pence 2023 2022
per share per share GBP'000 GBP'000
----------------------------- ---------- ---------- ---------- ----------
Final dividends recognised
as distributions in the
year 5.8 3.9 5,091 3,399
Interim dividends recognised
as distributions in the
year 2.7 2.4 2,371 2,093
----------------------------- ---------- ---------- ---------- ----------
Total dividends paid 7,462 5,492
----------------------------- ---------- ---------- ---------- ----------
Final dividend proposed 7.3 5.8 6,410 5,070
----------------------------- ---------- ---------- ---------- ----------
9. Earnings per share
Adjusted earnings per share has been calculated using adjusted
earnings calculated as profit after taxation attributable to owners
of the parent but before:
-- impairment of property, plant and equipment;
-- 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
-- other income - net gain on financing activities.
The calculation of the basic and diluted earnings per share is
based on the following data:
Year ended Year ended
30 June 30 June
2023 2022
GBP'000 GBP'000
------------------------------------------------ ---------- ----------
Earnings from continuing operations
for the purpose of basic earnings per
share 20,195 32,825
Add/(remove):
Impairment of property, plant and equipment - 597
Amortisation of intangible assets excluding
computer software 2,381 2,368
Adjusting items (included in operating
expenses) 147 66
Other income - gain on disposal of subsidiaries (2,212) (16,329)
Other income - gain on disposal of property,
plant and equipment - (1,289)
Other income - net gain on financing
activities - (840)
Tax effect of adjustments above and
deferred tax (1,598) (1,050)
------------------------------------------------ ---------- ----------
Adjusted earnings for the purposes of
adjusted earnings per share 18,913 16,348
------------------------------------------------ ---------- ----------
2023 2022
Number Number
--------------------------------------------- ---------- ----------
Weighted average number of ordinary
shares for the purposes of basic and
adjusted earnings per share 88,027,119 87,632,022
Effect of dilutive potential ordinary
shares:
Future exercise of share awards and
options 2,217,174 1,126,918
--------------------------------------------- ---------- ----------
Weighted average number of ordinary
shares for the purposes of diluted and
adjusted diluted earnings per share 90,244,293 88,758,940
--------------------------------------------- ---------- ----------
Basic earnings per share 22.94p 37.46p
Diluted earnings per share 22.38p 36.98p
Adjusted basic earnings per share ('adjusted
earnings per share') 21.49p 18.66p
Adjusted diluted earnings per share 20.96p 18.42p
--------------------------------------------- ---------- ----------
10. Disposals
On 30 December 2022 the Group disposed of its Spanish insurance
business, Wilmington Inese SL., for a consideration of GBP2,637,131
(EUR3,000,000) and recognised a gain on disposal of GBP2,211,523
presented within other income.
Wilmington received cash of GBP2,285,714 (EUR2,600,000) on 2nd
January 2023 and the remaining GBP351,417 (EUR400,000) is payable
on 30 December 2023.
The disposal was executed by way of the sale of 100% of the
equity shares and as at the disposal date, the net assets of
Wilmington Inese SL. were as follows:
GBP'000
-------------------------------------------- -------
Intangibles 34
Property, plant and equipment 236
Deferred tax asset 121
Trade and other receivables 536
Cash and cash equivalents 737
Trade and other payables (814)
Deferred income (525)
Lease liability (173)
Net assets disposed 152
Directly attributable costs of disposal 405
Recycling of deferred foreign exchange loss (132)
Gain on disposal 2,212
-------------------------------------------- -------
Fair value of consideration 2,637
-------------------------------------------- -------
Satisfied by:
Cash and cash equivalents 2,286
Deferred consideration 351
2,637
-------------------------------------------- -------
The disposals were executed in line with the Group's strategy to
simplify its structure and to focus attention on businesses that
operate in the GRC markets. Wilmington Inese SL. was classified as
continuing operations until the date of disposal due to it not
being a separate major line of business or geographical area.
11. Trade and other receivables
Group
------------------
30 June 30 June
2023 2022
GBP'000 GBP'000
------------------------------ -------- --------
Current
Trade receivables 22,577 22,290
Prepayments and other
receivables 3,758 3,272
Accrued income 1,056 1,535
Amounts due from subsidiaries - -
------------------------------ -------- --------
27,391 27,097
------------------------------ -------- --------
12. Trade and other payables
Group
------------------
30 June 30 June
2023 2022
GBP'000 GBP'000
---------------------------- -------- --------
Trade payables 3,039 2,734
Social security and
other taxes 3,418 2,106
Accruals 15,425 13,936
Subscriptions and deferred
revenue 33,659 31,405
Other payables 425 77
Amounts due to subsidiaries - -
---------------------------- -------- --------
55,966 50,258
---------------------------- -------- --------
13. Cash generated from operations
Year ended Year ended
30 June 30 June
2023 2022
GBP'000 GBP'000
------------------------------------- ---------- ----------
Profit from continuing operations
before tax 24,022 36,120
Adjusting item - gain on disposal
of subsidiaries (2,212) (16,329)
Adjusting item - gain on sale
of property, plant and equipment - (1,289)
Adjusting item - net gain on
financing activities - (840)
Adjusting items 147 66
Depreciation of property, plant
and equipment included in operating
expenses 2,321 2,412
Amortisation of intangible
assets 4,071 6,089
Impairment of property, plant
and equipment - 597
Non-adjusting profit on disposal
of property, plant and equipment (36) (71)
Share based payments (including
social security costs) 1,515 1,230
Net finance (income)/expense (232) 928
------------------------------------- ---------- ----------
Operating cash flows before
movements in working capital 29,596 28,913
(Increase)/decrease in trade
and other receivables (107) 1,621
Increase/(decrease) in trade
and other payables 4,023 (5,657)
Decrease in provisions (307) (307)
------------------------------------- ---------- ----------
Cash generated from/(used in)
operations before adjusting
items 33,205 24,570
------------------------------------- ---------- ----------
Cash conversion is calculated as a percentage of cash generated
by operations to adjusted EBITA as follows:
Year ended Year ended
30 June 30 June
2023 2022
GBP'000 GBP'000
------------------------------------------ ---------- ----------
Funds from operations before adjusting
items:
Adjusted EBITA (note 3) 24,106 21,621
Share based payments (including social
security costs) 1,515 1,230
Amortisation of intangible assets -
computer software 1,690 3,721
Depreciation of property, plant and
equipment included in operating expenses 2,321 2,412
Non-adjusting profit on disposal of
property, plant and equipment (36) (71)
------------------------------------------ ---------- ----------
Operating cash flows before movement
in working capital 29,596 28,913
Net working capital movement 3,609 (4,343)
------------------------------------------ ---------- ----------
Funds from operations before adjusting
items 33,205 24,570
------------------------------------------ ---------- ----------
Cash conversion 138% 114%
------------------------------------------ ---------- ----------
Year ended Year ended
30 June 30 June
2023 2022
GBP'000 GBP'000
------------------------------------------ ---------- ----------
Free cash flow:
Operating cash flows before movement
in working capital 29,596 28,913
Proceeds on disposal of property, plant
and equipment 13 3,493
Net working capital movement 3,609 (4,343)
Interest received/(paid) 344 (479)
Payment of lease liabilities (2,109) (3,752)
Tax paid (3,268) (3,397)
Purchase of property, plant and equipment (461) (440)
Purchase of intangible assets (595) (1,292)
------------------------------------------ ---------- ----------
Free cash flow 27,129 18,703
------------------------------------------ ---------- ----------
14. Events after the reporting period
Due to the growing net cash position the Board decided to cancel
the revolving credit facility in August 2023.
[1] Continuing - eliminating the effects of the impact of
disposals; Organic - Continuing eliminating exchange rate
fluctuations.
[2] Continuing adjusted profit before tax - see note 3.
[3] Continuing adjusted basic earnings per share -; Adjusted
basic earnings per share - see note 9.
[4] Net cash includes cash and cash equivalents, bank loans
(excluding capitalised loan arrangement fees) and bank overdrafts
but excludes lease liabilities.
[5] Recurring revenues - those contracted at least one year
ahead.
[6] Organic - eliminating the effects of exchange rate
fluctuations and the impact of acquisitions and disposals;
Continuing - eliminating the effects of the impact of
disposals;
[7] ICA businesses and CLTi.
[8] Mercia and Bond Solon.
[9] FRA.
[10] UK Healthcare and APM.
[11] Pendragon, Axco and Compliance Week.
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END
FR GZGZLNKMGFZM
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