TIDMWIL
RNS Number : 2268A
Wilmington PLC
22 September 2022
22 September 2022
Wilmington plc
Resilient organic growth strategy delivering
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 2022.
Financial performance
FY22 FY21 Change
Revenue GBP121.0m GBP113.0m 7%
Adjusted PBT [1] GBP20.7m GBP15.0m 38%
Adjusted PBT margin 17.1% 13.3% 29%
Adjusted basic EPS [2] 18.66p 13.62p 37%
Net cash/(debt) [3] GBP20.5m (GBP17.2m) 216%
Total dividend 8.2p 6.0p 37%
Statutory profit/(loss)
before tax GBP36.1m (GBP2.0)m
Statutory basic earnings/(loss)
per share 37.46p (5.18p)
Highlights
-- 13% organic [4] revenue growth driven by successful
digitalisation programme, new product investment and return to FTF
[5] events. Organic revenue growth 5% excluding FTF events.
o Training & Education division delivered 18% organic
growth
o Intelligence division delivered 10% organic growth
-- Annual recurring revenues grew by 5%, now 37% of Group revenues
-- Adjusted profit before tax up 38% to GBP20.7m (2021:
GBP15.0m) reflecting continuing efficiencies of digital-first
model
-- Strategic sale of AMT for proceeds of GBP23.4m before completion adjustments
-- Net cash at 30 June 2022 GBP20.5m (2021: net debt GBP17.2m)
reflecting strong trading performance, effective cash management
strategies and sale of subsidiaries and property
-- Strong cash conversion [6] of trading profits of 114% (2021: 104%)
-- Dividend up 37% in line with profits to 8.2p (2021: 6.0p)
-- Investments driving strategic progress, future growth plans
enhanced by development of single technology platforms in each
division
-- Further embedded cultural ambitions, bolstered by commitments
to Race at Work Charter, Inclusive Employers and Disability
Confident
-- Committed Net-Zero Carbon Targets
Mark Milner, Chief Executive Officer, commented:
"These strong results demonstrate the success of our strategy
with good organic revenue growth, profits up by 38% and substantial
cash generation. Our new operating model is successfully embedded
and has enhanced our position in the large, expanding and rapidly
evolving Governance Risk and Compliance (GRC) market.
"The investments we have made in technology and data are
accelerating our growth ambitions as we develop single technology
platforms in each division. These investments are enhancing our
position by creating a scalable portfolio of assets that are
strongly aligned to the dynamic and growing GRC market.
"We have a resilient business model with increasing recurring
revenues. We have seen good demand in all areas during the first
quarter of the current financial year, generating revenues and
profitability in line with our expectations."
The information contained within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulations (EU) No. 596/2014. Upon the publication of this
announcement this inside information is now considered to be in the
public domain.
For further information, 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.
Results and dividend
We have executed our strategy by growing our revenues and
profits organically in the markets we focus on; investing further
in our business and the technology it runs on; and by actively
managing our portfolio of brands. The business has demonstrated
notable resilience, reflected by the strong financial
performance.
We have delivered organic revenue growth of 13% by growing all
parts of our business - a result enhanced by a return to
face-to-face events this year. Growth excluding events was 5% and
reflects increased demand for our core offering in all product
areas. We have also achieved a five-percentage point growth in
recurring revenue [7] , which now represents 37% of total revenue,
driven by recent investments in sales and marketing
capabilities.
The increased revenues and a continued focus on operational
efficiency and cost management resulted in adjusted PBT growth of
37.8% to GBP20.7m (2021: GBP15.0m) and a corresponding improvement
in adjusted PBT margin to 17.1% (2021: 13.3%). This resulted in
adjusted basic earnings per share being up 37.0%. We also are
proposing a final dividend of 5.8p (total of 8.2p). The Group moved
into a net cash position (excluding lease liabilities) of GBP20.5m
(2021: net debt GBP17.2m) after the sale of AMT and a strong year
of converting profits to cash.
Strategy
Following a comprehensive review of our portfolio in 2021, our
strategic focus has been centred on building upon our already
strong presence in the large, growing and rapidly evolving GRC
markets. These markets are underpinned by strong macro drivers,
particularly the increasing volume and enforcement of regulation,
complex geopolitical landscape, increased importance of ESG and
widespread adoption of technological and data-driven compliance
solutions, all of which align strongly to Wilmington's core
offering.
At the heart of this focus on 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 sold AMT during the year and have now identified a
buyer for our small Spanish insurance business. We expect this
divestment to be concluded in the first half of the 2023 financial
year.
Investment programme
Our investment approach across the Group continues to be to
leverage our core competencies to embed the unique characteristics
that define our competitive advantage into each of our brands. Our
investment focus is on developing single technology platforms in
each of our divisions, providing the foundation to accelerate our
growth ambitions.
Our investment during this calendar year in the development of
single technology platforms will further differentiate us by
providing unique solutions to our customers. They will also enhance
our growth potential as we retain the agility to respond to their
ever changing needs in the rapidly evolving GRC markets. 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.
Two of our brands in the Training & Education division are
already benefiting from our Digital Learning Platform, and we are
on track to have the remaining brands within the division fully
deployed to this common platform by December 2022.
Our Data Connect Platform, deploying Snowflake(R) technology has
already been rolled out to three of our Intelligence division
brands, and will also be used across the whole division by December
2022.
We continue to develop new products and identify clear organic
growth opportunities, with the future potential for effective roll
out of these 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.
Responsible business
As we continue to help our customers to do the right business in
the right way, we are committed to investing in the initiatives
that support our own responsible business culture. The work we have
done to further develop our inclusive working environment has been
bolstered by commitments to the Race at Work Charter, Inclusive
Employers and the Disability Confident Scheme. We have also
progressed our ambition to effectively monitor our performance in
this area by collecting richer diversity data around what makes our
people unique for the first time.
We have implemented the TCFD recommendations in full, concluding
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 in respect of scope
1&2 emissions by 2028, and net zero in respect of scope 3
emissions by 2045.
Current trading and outlook
The continued execution of our strategy over the past 12 months
has positioned the Group well to expand its presence in the GRC
markets, and to drive future growth.
We continue to manage the challenges caused by inflationary
pressures, and the proven resilience of the Group provides
reassurance that it is well placed to withstand the impact of
ongoing macro-economic volatility and continue our organic
growth.
Trading has been encouraging in the first quarter, with good
demand in all areas generating revenues and profits in line with
expectations.
Divisional review
Intelligence
Organic [8]
2022 2021 Absolute variance variance
GBP'm GBP'm % %
---------------------------------- ----- ----- ----------------- -----------
Revenue
Healthcare [9] 31.1 28.4 10% 11%
Financial Services and Other [10] 23.2 21.3 9% 10%
MiExact 5.0 5.0 1% 1%
Discontinued [11] 0.3 2.1 (86%)
---------------------------------- ----- ----- ----------------- -----------
Total revenue 59.6 56.8 5% 10%
---------------------------------- ----- ----- ----------------- -----------
Operating profit 11.4 9.3 22% 22%
Margin % 19% 16%
---------------------------------- ----- ----- ----------------- -----------
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.
Identity & Charities rebranded as MiExact in the year as
part of the restructuring of its product set begun last year. 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 grew 5%, 10% organically. All
businesses within the division grew organically. Recurring
subscription revenues grew four percentage points with strong
retention rates.
Healthcare revenues grew 11% organically, helped by the return
to face-to-face events in the UK. Subscription revenues grew 7%
with UK revenues up 12% and French revenues up 4%. Competitive
pressure continued to challenge growth of Data revenue in some
areas, but overall demand for these products was good.
Financial Services revenues grew 10% organically with growth in
Axco, Pendragon, Compliance Week and the held-for-sale Inese.
Compliance Week and Inese benefitted from the return to
face-to-face events while subscriptions grew well in Axco and
Pendragon, where retention rates were above 99%.
MiExact revenues grew 1% after a slow first half was followed by
a strong final quarter. Subscription revenues had a retention rate
above 95%.
Intelligence divisional operating profit grew by 22%, helped by
its revenue growth and continuing focus on its cost base. Operating
margins improved to 19% from 16%.
Training & Education
2022 2021 Absolute variance Organic variance
GBP'm GBP'm % %
-------------------- ----- ----- ----------------- ----------------
Revenue
Global [12] 23.2 22.4 3% 3%
UK and Ireland [13] 22.1 20.3 9% 9%
North America [14] 11.0 4.9 125% 122%
Discontinued [15] 5.1 8.6 (39%)
-------------------- ----- ----- ----------------- ----------------
Total revenue 61.4 56.2 9% 18%
-------------------- ----- ----- ----------------- ----------------
Operating profit 16.0 12.2 31% 32%
Margin % 26% 22%
-------------------- ----- ----- ----------------- ----------------
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 we 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. ICA primarily serves the financial services industry. The
material for ICA courses is developed by our own internal R&D
team, and external specialists, and 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 and consistent investment in technology maintains the
Group's competitive positioning. The AMT training business was sold
in December 2021.
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 Nashville in March each
year. Revenue from the US events is generated from both sponsorship
and delegate sales.
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. The small Irish reseller of training services
(LaTouche) was sold in April 2022.
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. Growth in the Accountancy market remains
partially supressed due to the impact of Covid-19, which compounded
the challenges caused by continued consolidation of smaller firms,
some Brexit uncertainty and a relatively stable backdrop in terms
of tax legislation and accounting standards. Whilst not yet
reaching its pre-Covid size, the Accountancy market has returned to
growth and demand is expected to benefit from upcoming legislative
change in the UK.
Trading performance
Training & Education revenues grew 9%, and 18% on an organic
basis. All five of the businesses within the division grew
organically and recurring subscription revenues grew 9%.
ICA revenues were up 3% as strong growth in the UK was offset by
a drop in Singapore revenues after the exceptional growth there in
FY21, but FY22 Singapore revenues were still nearly double their
FY20 level. CLTi grew 4% and is focussed on increasing business in
new territories in FY23.
Bond Solon saw double-digit growth in FY22, driven by a strong
increase in demand across the year. Mercia revenues grew 8% in the
year, and despite still being short of its pre-Covid position the
business is on track to recover the remaining shortfall.
In the US, FRA more than doubled revenues as events returned to
being face-to-face. Organic growth of 122% brought the business
back to larger revenues than the pre-Covid period (FY19) as demand
from sponsors offset slightly lower delegate attendance than
FY19.
Overall divisional operating profit increased strongly by 31%,
mainly due to increased revenues and tight cost management. As a
result, the operating profit margin rose to 26% from 22% in
FY21.
Financial review
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
2022 2021 Absolute variance variance
GBP'm GBP'm GBP'm % %
----------------- ------- ------- ---------- ---------- ----------
Revenue 121.0 113.0 8.0 7.1% 13.4%
Adjusted profit
before tax 20.7 15.0 5.7 37.8% 42.5%
Margin % 17.1% 13.3%
----------------- ------- ------- ---------- ---------- ----------
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 7.1% overall and 13.4% on an organic
basis, the overall increase reflecting GBP0.4m of foreign currency
downside and the impact of disposals.
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 (2021:
GBP96.4m) up GBP3.0m or 3.1%.
Within operating expenses, staff costs marginally increased
GBP0.5m to GBP55.2m (2021: GBP54.7m). This net increase reflects
discretionary staff bonuses, GBP1.4m higher than the prior year as
a result of the stronger trading performance in FY22. The increases
were partly offset by salary cost savings generated from a
reduction in headcount post disposal of businesses. Share based
payment costs increased GBP0.6m due to an increased number of
schemes due to vest.
Non-staff costs increased by GBP2.5m to GBP44.2m from GBP41.7m
in the prior year, reflecting the increased revenue and the
anticipated return of some face-to-face delivery costs including
venue hire.
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, increased GBP0.2m year-on-year to
GBP4.5m (2021: GBP4.3m).
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 37.8% to GBP20.7m (2021:
GBP15.0m).
Adjusted profit margin (adjusted PBT expressed as a percentage
of revenue) also increased to 17.1% (2021: 13.3%).
Amortisation excluding computer software, impairment charge and
other income
Amortisation of intangible assets (excluding computer software)
was GBP2.4m (2021: GBP3.4m). The decrease reflects certain
historical assets being fully amortised part way through the prior
year.
The non-cash impairment charge of GBP0.6m relates to the
impairment of assets associated with an exercise performed to
consolidate the Group's office space.
Other income represents the net gain of GBP16.3m from the
disposal of AMT and La Touche Bond Solon Training Limited, the
GBP1.3m gain on disposal of two buildings and their associated
assets recognised as a result of the consolidation of the Group's
office space and GBP0.8m of one-off financing activities associated
with capital management.
Adjusting items within operating expenses
Adjusting items within operating expenses of GBP0.1m (2021:
GBP3.0m) 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 GBP37.0m (2021: loss GBP0.4m). The large
increase is driven by the impact of the other income items detailed
above and a non-cash impairment in 2021, along with strong revenue
growth and effective cost management during the year.
Net finance costs
Net finance costs were GBP0.9m (2021: GBP1.6m), primarily
related to the decrease in interest payable on bank loans and
overdrafts following the repayment of the revolving credit
facility.
Profit before taxation
Profit before taxation was GBP36.1m (2021: loss GBP2.0m); a
reconciliation of this to adjusted profit before tax can be found
in note 3.
Taxation
The tax charge for the year was GBP3.3m (2021: GBP2.5m)
reflecting an effective tax rate of 9.1% (2021: negative 125.0%).
The substantial decrease in the effective tax rate year-on-year
reflects the nature of other operating income and adjusting items,
specifically the gain on disposal of businesses in 2022 which was
not subject to corporation tax, and the impairment charge in 2021
which was not deductible for tax purposes.
The underlying tax rate which ignores the tax effects of
adjusting items remained essentially unchanged at 21.0% (2021:
20.5%).
Earnings per share
Adjusted basic earnings per share increased by 37.0% to 18.66p
(2021: 13.62p), due to the increase in adjusted profit before tax,
a broadly flat underlying tax rate and an essentially unchanged
number of issued ordinary shares (see below). Basic earnings per
share was 37.46p (2021: basic loss per share of 5.18p) in the prior
year, reflecting the increase in profit after tax.
Dividend
A final dividend of 5.8p per share (2021: 3.9p) will be proposed
at the AGM. This will give a full year dividend up 37% to 8.2p
(2021: 6.0p) and dividend cover of 2.3 times (2021: 2.3 times). If
approved it will be paid on 28 November 2022 to shareholders on the
register as at 28 October 2022 with an associated ex-dividend date
of 27 October 2022.
Balance sheet
Non-current assets
Goodwill at 30 June 2022 was GBP61.1m (2021: GBP65.8m) which was
primarily due to goodwill disposed of GBP6.2m for AMT.
Additionally, a strengthening US Dollar led to an increase in the
Sterling value of the US Dollar portion of the Group's
goodwill.
Intangible assets decreased by GBP4.6m to GBP9.4m (2021:
GBP14.0m) due to amortisation of GBP6.1m, partly offset by
additions of GBP1.3m 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.
Property, plant and equipment decreased by GBP2.4m to GBP6.9m
(2021: GBP9.3m). The decrease in purchased property, plant and
equipment was attributable to depreciation of GBP2.4m, GBP0.6m
impairment mentioned above and assets transferred to held for sale
of GBP0.3m relating to assets held by Inese (see disposal group
held for sale below), partially offset by additions of GBP0.9m.
Deferred consideration receivable
The deferred consideration receivable balance of GBP1.7m (2021:
GBP1.8m) relates to the disposal of ICP in July 2018 with GBP1.5m
recognised within non-current assets and the remaining GBP0.2m
recognised within current assets.
Disposal group held for sale
As at 30 June 2022, the disposal group classified as held for
sale relates to Wilmington Inese SL. The assets of the disposal
group held for sale are GBP1.5m, including GBP0.8m of cash and cash
equivalents, and liabilities of the disposal group held for sale
are GBP1.3m.
Trade and other receivables
Trade and other receivables were GBP27.1m (2021: GBP28.7m). This
decrease was mainly due to the disposal of AMT and La Touche Bond
Solon Training Limited, which collectively comprised GBP1.4m within
trade receivables in the prior year.
Current tax asset
At 30 June 2022 the Group recognised an asset relating to
current tax of GBP1.3m (2021: GBP0.3m). The net asset position
reflects a net repayment position.
Trade and other payables
Trade and other payables decreased by GBP4.7m to GBP50.3m (2021:
GBP55.0m). Within this, subscriptions and deferred revenue
increased by GBP1.3m or 4.3% to GBP31.4m (2021: GBP30.1m) and trade
and other payables decreased by GBP6.0m to GBP18.9m (2021:
GBP24.8m).
This increase in subscriptions and deferred revenue was driven
mostly by the growth of subscription services in the year and a
year-on-year increase in June sales. The decrease in trade and
other payables was primarily driven by the unwind of payroll tax
payments and better payment practices for amounts owed to
suppliers.
Provisions
Provisions were GBP1.5m (2021: GBP1.8m), 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 (excluding capitalised loan
arrangement fees) and bank overdrafts, and lease liabilities was
GBP13.0m (2021: net debt of GBP28.0m). This significant net cash
position is driven by a strong trading performance delivering
improved profits and effective cash management as well as a
significant cash inflow associated with the other income items
mentioned above.
Lease liabilities decreased to GBP7.5m (2021: GBP10.7m) which
represents cash payments in relation to contractual lease
obligations, offset in part by GBP0.3m of notional interest on
lease liabilities reported within net finance costs.
Cash conversion remained strong at 114% (2021: 104%).
Share capital
During the year 224,838 (2021: nil) new ordinary shares of
GBP0.05 were issued to satisfy the Company's obligations under the
SAYE Plan.
During the year the Wilmington Group plc Employee Share
Ownership Trust ('ESOT') purchased 170,097 ordinary shares for the
purpose of future settlement of employee share schemes. On 30
September 2021, 37,435 shares vested under its Performance Share
Plan settled via the ESOT. In April 2022 3,552 shares were used to
satisfy the Company's obligations under the SAYE Plan. At 30 June
2022, the ESOT held 403,782 shares (2021: 274,672).
Consolidated income statement
for the year ended 30 June 2022
Year ended Year ended
30 June 30 June
2022 2021
Notes GBP'000 GBP'000
------------------------------------------------ ----- ---------- ----------
Continuing operations
Revenue 4 121,028 113,027
------------------------------------------------ ----- ---------- ----------
Operating expenses before amortisation
of intangibles excluding computer software,
impairment and adjusting items (99,407) (96,378)
Impairment of goodwill, intangible assets
and property, plant and equipment 5a (597) (14,834)
Amortisation of intangible assets excluding
computer software 5a (2,368) (3,400)
Adjusting items 5b (66) (2,970)
------------------------------------------------ ----- ---------- ----------
Operating expenses 6 (102,438) (117,582)
Other income - gain on disposal of subsidiaries 11 16,329 770
Other income - gain on disposal of business
operations - 3,394
Other income - gain on disposal of property,
plant and equipment 5a 1,289 -
Other income - net gain on financing
activities 840 -
------------------------------------------------ ----- ---------- ----------
Operating profit/(loss) 37,048 (391)
Net finance costs 7 (928) (1,634)
------------------------------------------------ ----- ---------- ----------
Profit/(loss) before tax 36,120 (2,025)
Taxation 8 (3,295) (2,522)
------------------------------------------------ ----- ---------- ----------
Profit/(loss) for the year attributable
to owners of the parent 32,825 (4,547)
------------------------------------------------ ----- ---------- ----------
Earnings/(loss) per share:
Basic (p) 10 37.46 (5.18)
Diluted (p) 10 36.98 (5.18)
------------------------------------------------ ----- ---------- ----------
Consolidated statement of comprehensive income
for the year ended 30 June 2022
Year ended Year ended
30 June 30 June
2022 2021
GBP'000 GBP'000
----------------------------------------------- ---------- ----------
Profit/(loss) for the year 32,825 (4,547)
Other comprehensive income/(expense):
Items that may be reclassified subsequently
to the income statement
----------------------------------------------- ---------- ----------
Fair value movements on interest rate swaps,
net of tax - 93
Currency translation differences 2,353 (1,732)
Fair value movements of net investment hedges,
net of tax (193) 762
----------------------------------------------- ---------- ----------
Other comprehensive income/(expense) for the
year, net of tax 2,160 (877)
----------------------------------------------- ---------- ----------
Total comprehensive income/(expense) for the
year attributable to owners of the parent 34,985 (5,424)
----------------------------------------------- ---------- ----------
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 8.
Consolidated balance sheet
as at 30 June 2022
2022 2021
Notes GBP'000 GBP'000
-------------------------------------------- ----- -------- --------
Non-current assets
Goodwill 12 61,128 65,833
Intangible assets 13 9,427 14,000
Property, plant and equipment 14 6,876 9,277
Deferred consideration receivable 1,448 1,585
Derivative financial instruments - 57
Deferred tax assets 1,041 1,364
-------------------------------------------- ----- -------- --------
79,920 92,116
-------------------------------------------- ----- -------- --------
Current assets
Trade and other receivables 15 27,097 28,698
Deferred consideration receivable 250 250
Current tax assets 1,262 312
Cash and cash equivalents 19,785 7,374
Assets of disposal group held for sale 19 1,450 1,588
-------------------------------------------- ----- -------- --------
49,844 38,222
-------------------------------------------- ----- -------- --------
Total assets 129,764 130,338
-------------------------------------------- ----- -------- --------
Current liabilities
Trade and other payables 16 (50,258) (54,959)
Borrowings - (3,644)
Lease liabilities 17 (648) (2,356)
Provisions 18 (307) (461)
Liabilities of disposal group held for sale 19 (1,332) -
-------------------------------------------- ----- -------- --------
(52,545) (61,420)
-------------------------------------------- ----- -------- --------
Non-current liabilities
Borrowings - (20,430)
Lease liabilities 17 (6,862) (8,386)
Deferred tax liabilities (2,040) (2,054)
Provisions 18 (1,228) (1,381)
-------------------------------------------- ----- -------- --------
(10,130) (32,251)
-------------------------------------------- ----- -------- --------
Total liabilities (62,675) (93,671)
-------------------------------------------- ----- -------- --------
Net assets 67,089 36,667
-------------------------------------------- ----- -------- --------
Equity
Share capital 4,391 4,380
Share premium 45,553 45,225
Treasury and ESOT reserves (1,093) (701)
Share based payments reserve 2,141 1,390
Translation reserve 4,422 2,069
Retained earnings/(accumulated losses) 11,675 (15,696)
-------------------------------------------- ----- -------- --------
Total equity 67,089 36,667
-------------------------------------------- ----- -------- --------
Consolidated statement of changes in equity
for the year ended 30 June 2022
Share capital,
share premium,
ESOT shares Share based Retained earnings/
and treasury payments Translation (accumulated
shares reserve reserve losses) Total equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------ --------------- ----------- ----------- ----------------------------- ------------
At 1 July 2020 49,015 1,195 3,801 (10,605) 43,406
Loss for the year - - - (4,547) (4,547)
Other comprehensive
(expense)/income for the year - - (1,732) 855 (877)
------------------------------ --------------- ----------- ----------- ----------------------------- ------------
49,015 1,195 2,069 (14,297) 37,982
Transactions with owners:
Dividends paid - - - (1,829) (1,829)
Performance share plan awards
vesting settled via ESOT 137 (241) - 104 -
ESOT share purchases (263) - - - (263)
Sale of treasury shares 15 - - - 15
Share based payments - 436 - - 436
Tax on share based payments - - - 326 326
------------------------------ --------------- ----------- ----------- ----------------------------- ------------
At 30 June 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
------------------------------ --------------- ----------- ----------- ----------------------------- ------------
Consolidated cash flow statement
for the year ended 30 June 2022
Year ended Year ended
30 June 2022 30 June 2021
Notes GBP'000 GBP'000
----------------------------------------------------------------------------- ----- -------------- -------------
Cash flows from operating activities
Cash generated from/(used in) operations before adjusting items 20 24,570 17,290
Cash flows for adjusting items - operating activities (342) (339)
Cash flows from tax on share based payments (4) 9
----------------------------------------------------------------------------- ----- -------------- -------------
Cash generated from/(used in) operations 24,224 16,960
Interest paid (479) (1,196)
Tax paid (3,397) (2,697)
----------------------------------------------------------------------------- ----- -------------- -------------
Net cash generated from/(used in) operating activities 20,348 13,067
----------------------------------------------------------------------------- ----- -------------- -------------
Cash flows from investing activities
Disposal of subsidiaries net of cash 11 22,792 400
Disposal of business operations - 4,144
Deferred consideration received 250 250
Cash flows for adjusting items - investing activities (43) (151)
Purchase of property, plant and equipment (440) (1,047)
Proceeds from disposal of property, plant and equipment 3,493 103
Purchase of intangible assets (1,292) (1,969)
----------------------------------------------------------------------------- ----- -------------- -------------
Net cash generated from/(used in) investing activities 24,760 1,730
----------------------------------------------------------------------------- ----- -------------- -------------
Cash flows from financing activities
Dividends paid to owners of the parent (5,492) (1,829)
Issue of new shares 340 -
Share issuance costs (28) -
Purchase of shares by ESOT (371) (263)
Payment of lease liabilities (3,752) (2,530)
Cash flows for adjusting items - proceeds on disposal of interest rate swap 1,243 -
Fees relating to new and extended loan facility - (191)
Increase in bank loans - 2,000
Decrease in bank loans (21,198) (29,181)
----------------------------------------------------------------------------- ----- -------------- -------------
Net cash used in financing activities (29,258) (31,994)
----------------------------------------------------------------------------- ----- -------------- -------------
Net increase/(decrease) in cash and cash equivalents, net of bank overdrafts 15,850 (17,197)
----------------------------------------------------------------------------- ----- -------------- -------------
Cash and cash equivalents, net of bank overdrafts at beginning of the year 3,730 21,426
Exchange gain/(loss) on cash and cash equivalents 205 (499)
Cash classified as held for sale 758 -
----------------------------------------------------------------------------- ----- -------------- -------------
Cash and cash equivalents, net of bank overdrafts at end of the year 20,543 3,730
----------------------------------------------------------------------------- ----- -------------- -------------
Reconciliation of net cash/(debt)
----------------------------------------------------------------------------- ----- -------------- -------------
Cash and cash equivalents at beginning of the year 7,374 21,426
Bank overdrafts at beginning of the year (3,644) -
Bank loans at beginning of the year (20,960) (49,082)
Lease liabilities at beginning of the year (10,742) (13,121)
----------------------------------------------------------------------------- ----- -------------- -------------
Net debt at beginning of the year (27,972) (40,777)
----------------------------------------------------------------------------- ----- -------------- -------------
Net increase/(decrease) in cash and cash equivalents, net of bank overdrafts 16,813 (17,696)
Net repayment in bank loans 21,198 27,181
Exchange (loss)/gain on bank loans (238) 941
Movement in lease liabilities 3,232 2,379
----------------------------------------------------------------------------- ----- -------------- -------------
Cash and cash equivalents at end of the year 19,785 7,374
Cash classified as held for sale at end of the year 758 -
Bank overdrafts at end of the year - (3,644)
Bank loans at end of the year - (20,960)
Lease liabilities at end of the year (7,510) (10,742)
----------------------------------------------------------------------------- ----- -------------- -------------
Net cash/(debt) at end of the year 13,033 (27,972)
----------------------------------------------------------------------------- ----- -------------- -------------
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 2022 on which an unqualified report has been made by the
Company's auditors.
Financial statements for the year ended 30 June 2021 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 2022 statutory
accounts will be delivered in due course.
Copies of the Annual Report and Financial Statements will be
made available to shareholders shortly and printed copies 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 2022 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 2021. There was no material effect from the adoption
of new standards or interpretations in the year ended 30 June
2022.
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 goodwill, intangible assets and 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 business operations;
-- other income - gain on disposal of property, plant and equipment;
-- other income - net gain on financing activities ; and
-- net finance costs.
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
2022 2021
GBP'000 GBP'000
-------------------------------------------- ---------- ----------
Profit/(loss) before tax 36,120 (2,025)
Impairment of goodwill, intangible
assets and property, plant and equipment 597 14,834
Amortisation of intangible assets excluding
computer software 2,368 3,400
Adjusting items (included in operating
expenses) 66 2,970
Other income - gain on disposal of
subsidiaries (16,329) (770)
Other income - gain on disposal of
business operations - (3,394)
Other income - gain on disposal of
property, plant and equipment (1,289) -
Other income - net gain on financing
activities (840) -
-------------------------------------------- ---------- ----------
Adjusted profit before tax 20,693 15,015
Net finance costs 928 1,634
-------------------------------------------- ---------- ----------
Adjusted operating profit ('adjusted
EBITA') 21,621 16,649
Depreciation of property, plant and
equipment included in operating expenses 2,412 3,399
Amortisation of intangible assets -
computer software 3,721 2,416
-------------------------------------------- ---------- ----------
Adjusted EBITA before depreciation
('adjusted EBITDA') 27,754 22,464
-------------------------------------------- ---------- ----------
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. During the
year the Information & Data division was renamed to
Intelligence. 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
Profit
Revenue Profit Revenue Year
Year ended Year ended Year ended ended
30 June 30 June 30 June 30 June
2022 2022 2021 2021
GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------- ----------- ----------- ----------- --------
Training & Education 61,464 15,998 56,211 12,197
Intelligence 59,564 11,359 56,816 9,320
--------------------------------- ----------- ----------- ----------- --------
Group total 121,028 27,357 113,027 21,517
Unallocated central overheads - (4,506) - (4,302)
Share based payments - (1,230) - (566)
--------------------------------- ----------- ----------- ----------- --------
121,028 21,621 113,027 16,649
Impairment of goodwill,
intangible assets and property,
plant and equipment (597) (14,834)
Amortisation of intangible
assets excluding computer
software (2,368) (3,400)
Adjusting items (included
in operating expenses) (66) (2,970)
Other income - gain on
disposal of subsidiaries 16,329 770
Other income - gain on
disposal of business operations - 3,394
Other income - gain on
disposal of property, plant
and equipment 1,289 -
Other income - net gain
on financing activities 840 -
Net finance costs (928) (1,634)
--------------------------------- ----------- ----------- ----------- --------
Profit/(loss) before tax 36,120 (2,025)
Taxation (3,295) (2,522)
--------------------------------- ----------- ----------- ----------- --------
Profit/(loss) for the financial
year 32,825 (4,547)
--------------------------------- ----------- ----------- ----------- --------
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
2022 2021
GBP'000 GBP'000
-------------------------- ---------- ----------
UK 64,320 61,999
Europe (excluding the UK) 25,809 23,304
North America 21,727 15,042
Rest of the World 9,172 12,682
-------------------------- ---------- ----------
Total revenue 121,028 113,027
-------------------------- ---------- ----------
Included within North America is revenue of GBP21,304,000
generated within the USA.
c) Timing of revenue recognition
The timing of the Group's revenue recognition is as follows:
Year ended Year ended
30 June 30 June
2022 2021
GBP'000 GBP'000
----------------------------------- ---------- ----------
Revenue from products and services
transferred at a point in time 39,725 41,583
Revenue from products and services
transferred over time 81,303 71,444
----------------------------------- ---------- ----------
Total revenue 121,028 113,027
----------------------------------- ---------- ----------
During the year the Group recognised GBP30,124,000 of revenue
that was held in deferred revenue at 30 June 2021 (2021:
GBP31,465,000 related to amounts held at 30 June 2020).
5. Profit/(loss) from continuing operations
a) Profit/(loss) for the year from continuing operations is
stated after charging/(crediting):
Year ended Year ended
30 June 30 June
2022 2021
GBP'000 GBP'000
-------------------------------------------- ---------- ----------
Depreciation of property, plant and
equipment - included in operating expenses 2,412 3,399
Short term and low-value leases 114 486
Amortisation of intangible assets -
computer software 3,721 2,416
Non-adjusting (profit)/loss on disposal
of property, plant and equipment (71) 2
Share based payments (including social
security costs) 1,230 566
Amortisation of intangible assets excluding
computer software 2,368 3,400
Adjusting items (included in operating
expenses) 66 2,970
Adjusting item - gain on disposal of
subsidiaries (16,329) (770)
Adjusting item - gain on disposal of
business operations - (3,394)
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 (183) (290)
Impairment of goodwill, intangible
assets and property, plant and equipment 597 14,834
Foreign exchange loss/(gain) 446 (24)
Fees payable to the auditors for the
audit of the Company and consolidated
financial statements 107 95
Fees payable to the auditors and their
associates for other services:
- The audit of the Company's subsidiaries
pursuant to legislation 205 182
- Audit related other services 15 15
-------------------------------------------- ---------- ----------
The gain on sale of property, plant and equipment included in
adjusting items relates to the gain on disposal of two buildings
and their associated assets on 31 August 2021.
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
2022 2021
GBP'000 GBP'000
-------------------------------------------- ---------- ----------
Costs relating to strategic activities 66 1,128
Costs relating to the consolidation
of office space - 1,842
-------------------------------------------- ---------- ----------
Other adjusting items (included in
operating expenses) 66 2,970
Impairment of goodwill, intangible
assets and property, plant and equipment 597 14,834
Amortisation of intangible assets excluding
computer software 2,368 3,400
-------------------------------------------- ---------- ----------
Total adjusting items (classified in
profit before tax) 3,031 21,204
-------------------------------------------- ---------- ----------
The impairment of goodwill, intangible assets and property,
plant and equipment relates to:
Year ended Year ended
30 June 30 June
2022 2021
GBP'000 GBP'000
------------------------------------- ---------- ----------
Goodwill - 9,873
Intangible assets - 1,516
Property, plant and equipment 597 3,445
------------------------------------- ---------- ----------
Total adjusting items (classified in
profit before tax) 597 14,834
------------------------------------- ---------- ----------
The impairment during the year relates to the impairment of
assets associated with an office property, recognised as a result
of an exercise performed to consolidate the Group's office
space.
6. Operating expenses
Year ended 30 June Year ended 30 June
2022 2021
---------------------------------- -----------------------------------
Cost of Cost
sales Administration Total of sales Administration Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------- -------- -------------- -------- --------- -------------- --------
Operating expenses
before depreciation
and amortisation 88,746 4,528 93,274 86,167 4,396 90,563
Depreciation
of property,
plant and equipment 2,412 - 2,412 3,399 - 3,399
Amortisation
of intangible
assets - computer
software 3,721 - 3,721 2,416 - 2,416
---------------------- -------- -------------- -------- --------- -------------- --------
Operating expenses
before amortisation
of intangibles
excluding computer
software, impairment
and adjusting
items 94,879 4,528 99,407 91,982 4,396 96,378
Amortisation
of intangible
assets - databases 187 - 187 826 - 826
Amortisation
of intangible
assets - customer
relationships 1,016 - 1,016 1,052 - 1,052
Amortisation
of intangible
assets - brands 660 - 660 1,016 - 1,016
Amortisation
of intangible
assets - publishing
rights and titles 505 - 505 506 - 506
Impairment of
goodwill, intangible
assets and property,
plant and equipment
(note 5b) - 597 597 - 14,834 14,834
Other adjusting
items (note 5b) - 66 66 - 2,970 2,970
---------------------- -------- -------------- -------- --------- -------------- --------
Operating expenses 97,247 5,191 102,438 95,382 22,200 117,582
---------------------- -------- -------------- -------- --------- -------------- --------
7. Net finance costs
Year ended Year ended
30 June 30 June
2022 2021
GBP'000 GBP'000
--------------------------------------- ---------- ----------
Net finance costs comprise:
Interest payable on bank loans and
overdrafts 748 1,437
Unwinding of the discount on royalty
payments receivable (113) (139)
Notional interest on lease liabilities 293 336
--------------------------------------- ---------- ----------
928 1,634
--------------------------------------- ---------- ----------
8. Taxation
Year ended Year ended
30 June 30 June
2022 2021
GBP'000 GBP'000
------------------------------------ ---------- ----------
Current tax
UK corporation tax at current rates
on UK profits for the year 2,817 2,327
Adjustments in respect of previous
years (870) 30
------------------------------------ ---------- ----------
1,947 2,357
Foreign tax 969 993
Adjustments in respect of previous
years - (21)
------------------------------------ ---------- ----------
Total current tax 2,916 3,329
------------------------------------ ---------- ----------
Total deferred tax 379 (807)
------------------------------------ ---------- ----------
Taxation 3,295 2,522
------------------------------------ ---------- ----------
Factors affecting the tax charge for the year:
The effective tax rate is lower (2021: higher) than the average
rate of corporation tax in the UK of 19.0 % (2021: 19.0%). The
differences are explained below:
Year ended Year ended
30 June 30 June
2022 2021
GBP'000 GBP'000
------------------------------------------ ---------- ----------
Profit/(loss) before tax 36,120 (2,025)
------------------------------------------ ---------- ----------
Profit/(loss) before tax multiplied
by the average rate of corporation
tax in the year of 19.0% (2021: 19.0%) 6,863 (385)
Tax effects of:
Impairment of goodwill, intangible
assets and property, plant and equipment 113 2,818
Foreign tax rate differences 201 177
Adjustment in respect of previous years (870) 9
Other items not subject to tax (3,012) (230)
Effect on deferred tax of change of
corporation tax rate - 133
------------------------------------------ ---------- ----------
Taxation 3,295 2,522
------------------------------------------ ---------- ----------
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 9.1% (2021: -125.0%).
Included in other comprehensive income are a tax charge of
GBPnil (2021: GBP22,000) and a tax credit of GBP45,000 (2021:
charge of GBP179,000) relating to the interest rate swaps and net
investment hedges respectively.
The tax effect of adjusting items as disclosed in note 10 is a
credit of GBP1,050,000 (2021: GBP558,000).
9. 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
2022 2021 30 June 30 June
Pence Pence 2022 2021
per share per share GBP'000 GBP'000
----------------------------- ---------- ---------- ---------- ----------
Final dividends recognised
as distributions in the
year 3.9 - 3,399 -
Interim dividends recognised
as distributions in the
year 2.4 2.1 2,093 1,829
----------------------------- ---------- ---------- ---------- ----------
Total dividends paid 5,492 1,829
----------------------------- ---------- ---------- ---------- ----------
Final dividend proposed 5.8 3.9 5,070 3,415
----------------------------- ---------- ---------- ---------- ----------
10. Earnings/(loss) 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 goodwill, intangible assets and 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 business operations;
-- 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
2022 2021
GBP'000 GBP'000
------------------------------------------------ -------- ----------
Earnings/(loss) from continuing operations
for the purpose of basic earnings per
share 32,825 (4,547)
Add/(remove):
Impairment of goodwill, intangible assets
and property, plant and equipment 597 14,834
Amortisation of intangible assets excluding
computer software 2,368 3,400
Adjusting items (included in operating
expenses) 66 2,970
Other income - gain on disposal of subsidiaries (16,329) (770)
Other income - gain on disposal of business
operations - (3,394)
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 (1,050) (558)
------------------------------------------------ -------- ----------
Adjusted earnings for the purposes of
adjusted earnings per share 16,348 11,935
------------------------------------------------ -------- ----------
Number Number
--------------------------------------------- ---------- ----------
Weighted average number of ordinary
shares for the purposes of basic and
adjusted earnings per share 87,632,022 87,603,917
Effect of dilutive potential ordinary
shares:
Future exercise of share awards and
options 1,126,918 410,301
--------------------------------------------- ---------- ----------
Weighted average number of ordinary
shares for the purposes of diluted and
adjusted diluted earnings per share 88,758,940 88,014,218
--------------------------------------------- ---------- ----------
Basic earnings/(loss) per share 37.46p (5.18p)
Diluted earnings/(loss) per share 36.98p (5.18p)
Adjusted basic earnings per share ('adjusted
earnings per share') 18.66p 13.62p
Adjusted diluted earnings per share 18.42p 13.56p
--------------------------------------------- ---------- ----------
For the year ended 30 June 2021, potentially dilutive share
options were only considered in relation to adjusted earnings per
share as the Group made a basic loss per share .
11. Disposals
In the year ended 30 June 2022 the Group disposed of the
following subsidiary companies:
Share/asset
Country Date of disposal deal
---------------------- --------- ---------------- ------------
Adkins & Matchett (UK) UK December 2021 Share deal
Limited
Adkins, Matchett & Toy USA December 2021 Share deal
Limited
Adkins, Matchett & Toy Hong Kong December 2021 Share deal
(Hong Kong) Limited
La Touche Bond Solon
Training Limited Ireland April 2022 Share deal
---------------------- --------- ---------------- ------------
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 and Regulatory Compliance markets. The
subsidiary businesses were classified as continuing operations
until their respective disposal dates. In total the Group
recognised a gain on disposal of GBP16,329,000 presented within
adjusting items.
a) Disposal of subsidiary companies - Adkins & Matchett (UK)
Limited, Adkins, Matchett & Toy Limited and Adkins, Matchett
& Toy (Hong Kong) Limited, together referred to as 'AMT'
On 24 December 2021 Wilmington plc disposed of AMT for a net
cash consideration of GBP22,631,000 and recognised a gain on
disposal of GBP16,224,000. 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 AMT were as follows:
GBP'000
---------------------------------------------- -------
Goodwill 6,203
Property, plant and equipment 41
Trade and other receivables 898
Cash and cash equivalents 475
Trade and other payables (1,112)
---------------------------------------------- -------
Net assets disposed 6,505
Directly attributable costs of disposal 342
Recycling of deferred foreign exchange losses 35
Gain on disposal 16,224
---------------------------------------------- -------
Fair value of consideration 23,106
---------------------------------------------- -------
Satisfied by:
Cash and cash equivalents 23,106
---------------------------------------------- -------
23,106
---------------------------------------------- -------
b) Disposal of subsidiary company - La Touche Bond Solon
Training Limited
On 22 April 2022 Wilmington plc disposed of La Touche Bond Solon
Training Limited for a net cash consideration of GBP161,000 and
recognised a gain on disposal of GBP105,000. The disposal was
executed by way of the sale of 100% of the equity shares. As at the
disposal date, the net assets of La Touche Bond Solon Training
Limited were as follows:
GBP'000
---------------------------------------------- -------
Goodwill 34
Property, plant and equipment 9
Trade and other receivables 106
Cash and cash equivalents 78
Trade and other payables (138)
---------------------------------------------- -------
Net assets disposed 89
Directly attributable costs of disposal 22
Recycling of deferred foreign exchange losses 23
Gain on disposal 105
---------------------------------------------- -------
Fair value of consideration 239
---------------------------------------------- -------
Satisfied by:
Cash and cash equivalents (net of working
capital adjustment) 239
---------------------------------------------- -------
239
---------------------------------------------- -------
12. Goodwill
GBP'000
--------------------------------- -------
Cost
At 1 July 2020 110,597
Disposals (1,192)
Exchange translation differences (1,309)
--------------------------------- -------
At 30 June 2021 108,096
Disposals (8,935)
Exchange translation differences 1,532
--------------------------------- -------
At 30 June 2022 100,693
--------------------------------- -------
Accumulated impairment
At 1 July 2020 32,721
Disposals (331)
Impairment 9,873
--------------------------------- -------
At 30 June 2021 42,263
Disposals (2,698)
--------------------------------- -------
At 30 June 2022 39,565
--------------------------------- -------
Net book amount
At 30 June 2022 61,128
--------------------------------- -------
At 30 June 2021 65,833
--------------------------------- -------
At 30 June 2020 77,876
--------------------------------- -------
Goodwill arising on business combinations is not amortised but
reviewed for impairment on an annual basis, or more frequently if
there are indications that goodwill may be impaired. Determining
whether the carrying value of acquired goodwill is recoverable is a
significant judgment given the material nature of the goodwill
balance and the significant assumptions underpinning management's
impairment assessment of the Group's cash generating units
('CGUs'). The Group identifies its CGUs on a business operation and
geographic level. This is consistent with the way the chief
operating decision maker reviews performance.
Disposal
During the year AMT and La Touche Bond Solon Training Limited
was disposed of, which resulted in the disposal of the carrying
value of goodwill associated with both entities. At the date of
disposal the carrying value of this goodwill was GBP6,237,000.
Annual impairment review
The recoverable amount for each CGU has been determined using
value in use calculations. These calculations use the pre-tax
future cash flow forecasts covering a three year period based on
Board approved budgets. Cash flow projections in these budgets have
been based on growth assumptions that reflect anticipated market
trends in the range of industries served by the brands within each
CGU. Overall these projections assume stable profit margins
reflecting market presence expansion, whilst managing the impact of
projected inflationary and recessionary pressures. Pre-tax cash
flows beyond the three year period are then extrapolated using an
estimated long term growth rate of 2.0% (2021: 2.0%), providing a
'base case' scenario for the purpose of the impairment review. Key
assumptions for the value in use calculations are those regarding
discount rates, three year cash flow forecasts and long term growth
rates.
Discount rates
Management has applied pre-tax discount rates as follows:
Year ended Year ended
30 June 30 June
2022 2021
Territory % %
--------------- ---------- ----------
United Kingdom 15.2 11.8
United States 15.7 12.9
Spain 15.4 12.4
France 15.8 12.6
--------------- ---------- ----------
Pre-tax discount rates are calculated on a company specific
participant basis; movements in the pre-tax discount rates for CGUs
since the prior year are driven by changes in company specific
market-based inputs. Management considers the pre-tax discount
rates to be calculated using appropriate methodology. The rates are
in in line with its peers, and the Board views the rates as
accurately reflecting the return expected by a market
participant.
Sensitivity to changes in assumptions
The Group has performed sensitivity testing to assess the impact
of changes in assumptions on the value in use of each CGUs. The
sensitivity analysis performed assessed the impact of pessimistic
but reasonably possible changes to future cash flows, long term
growth rates and pre-tax discount rates. All CGUs retained
significant headroom in these sensitised calculations, leading to
the conclusion that there is no realistic change of assumption that
would result in carrying value to exceed its recoverable
amount.
Cash generating units
The following table details the net book value of goodwill
allocated to each CGU:
30 June 30 June
2022 2021
CGU GBP'000 GBP'000
---------------------- -------- --------
UK Healthcare 11,885 11,877
Axco and Pendragon 11,150 11,150
Accountancy 8,307 8,307
Legal 6,796 6,830
AMT - 6,203
Compliance 7,972 7,972
Compliance Week 4,941 4,342
FRA 7,686 6,773
Business Intelligence 2,391 2,379
---------------------- -------- --------
61,128 65,833
---------------------- -------- --------
13. Intangible assets
Publishing
Computer Customer rights
software Databases relationships Brands and titles Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------- --------- --------- -------------- -------- ----------- --------
Cost
At 1 July 2020 15,438 16,795 25,104 13,857 30,493 101,687
Additions 1,969 - - - - 1,969
Disposals (2,130) - - - - (2,130)
Write-off of fully
amortised intangible
assets - (2,940) (15,549) (3,672) (20,808) (42,969)
Exchange translation
differences (139) (90) (399) (237) - (865)
------------------------- --------- --------- -------------- -------- ----------- --------
At 30 June 2021 15,138 13,765 9,156 9,948 9,685 57,692
Additions 1,292 - - - - 1,292
Assets transferred
to held for sale (245) - - - - (245)
Write-off of fully
amortised intangible
assets (9,986) - - - - (9,986)
Disposals (51) - - - - (51)
Exchange translation
differences 103 105 466 275 - 949
------------------------- --------- --------- -------------- -------- ----------- --------
At 30 June 2022 6,251 13,870 9,622 10,223 9,685 49,651
------------------------- --------- --------- -------------- -------- ----------- --------
Accumulated amortisation
At 1 July 2020 10,003 15,496 20,102 8,111 28,263 81,975
Charge for the year 2,416 826 1,052 1,016 506 5,816
Impairment - - - 1,516 - 1,516
Disposals (2,010) - - - - (2,010)
Write-off of fully
amortised intangible
assets - (2,940) (15,549) (3,672) (20,808) (42,969)
Exchange translation
differences (80) (70) (276) (210) - (636)
------------------------- --------- --------- -------------- -------- ----------- --------
At 30 June 2021 10,329 13,312 5,329 6,761 7,961 43,692
Charge for the year 3,721 187 1,016 660 505 6,089
Assets transferred
to held for sale (210) - - - - (210)
Write-off of fully
amortised intangible
assets (9,986) - - - - (9,986)
Disposals (26) - - - - (26)
Exchange translation
differences 48 82 334 201 - 665
------------------------- --------- --------- -------------- -------- ----------- --------
At 30 June 2022 3,876 13,581 6,679 7,622 8,466 40,224
------------------------- --------- --------- -------------- -------- ----------- --------
Net book amount
At 30 June 2022 2,375 289 2,943 2,601 1,219 9,427
------------------------- --------- --------- -------------- -------- ----------- --------
At 30 June 2021 4,809 453 3,827 3,187 1,724 14,000
------------------------- --------- --------- -------------- -------- ----------- --------
At 30 June 2020 5,435 1,299 5,002 5,746 2,230 19,712
------------------------- --------- --------- -------------- -------- ----------- --------
14. Property, plant and equipment
Right-of-use
Land, freehold Fixtures assets
and leasehold and Computer Motor Land and
buildings fittings equipment vehicles buildings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------- -------------- --------- ---------- --------- ------------ ---------
Cost
At 1 July 2020 5,260 3,705 4,017 377 13,854 27,213
Additions 468 253 326 - 449 1,496
Disposals - (774) (258) (60) (109) (1,201)
Lease modifications - - - - (725) (725)
Assets transferred
to held for sale (2,243) (17) - - - (2,260)
Exchange translation
differences (3) (45) (35) - (191) (274)
------------------------- -------------- --------- ---------- --------- ------------ ---------
At 30 June 2021 3,482 3,122 4,050 317 13,278 24,249
Additions - 169 271 - 464 904
Disposals - (280) (127) (206) (64) (677)
Assets transferred
to held for sale (67) (101) (88) - (205) (461)
Assets transferred
from held for sale 162 - - - - 162
Exchange translation
differences - 22 47 - 50 119
------------------------- -------------- --------- ---------- --------- ------------ ---------
At 30 June 2022 3,577 2,932 4,153 111 13,523 24,296
------------------------- -------------- --------- ---------- --------- ------------ ---------
Accumulated depreciation
At 1 July 2020 1,566 3,054 3,414 191 2,094 10,319
Charge for the year 436 254 421 63 2,225 3,399
Disposals - (774) (159) (51) (41) (1,025)
Lease modifications - - - - (337) (337)
Impairment 523 103 33 - 2,786 3,445
Assets transferred
to held for sale (660) (12) - - - (672)
Exchange translation
differences (9) (84) (64) - - (157)
------------------------- -------------- --------- ---------- --------- ------------ ---------
At 30 June 2021 1,856 2,541 3,645 203 6,727 14,972
Charge for the year 353 236 342 38 1,443 2,412
Disposals - (279) (123) (156) (60) (618)
Impairment 597 - - - - 597
Assets transferred
to held for sale (34) (64) (54) - (38) (190)
Assets transferred
from held for sale 142 - - - - 142
Exchange translation
differences - 16 37 - 52 105
------------------------- -------------- --------- ---------- --------- ------------ ---------
At 30 June 2022 2,914 2,450 3,847 85 8,124 17,420
------------------------- -------------- --------- ---------- --------- ------------ ---------
Net book amount
At 30 June 2022 663 482 306 26 5,399 6,876
------------------------- -------------- --------- ---------- --------- ------------ ---------
At 30 June 2021 1,626 581 405 114 6,551 9,277
------------------------- -------------- --------- ---------- --------- ------------ ---------
At 30 June 2020 3,694 651 603 186 11,760 16,894
------------------------- -------------- --------- ---------- --------- ------------ ---------
Depreciation of property, plant and equipment is charged to
operating expenses within the income statement.
The impairment during the year relates to the impairment of
assets associated with an office property, recognised as a result
of an exercise performed to consolidate the Group's office
space.
As at 30 June 2022, assets classified as transferred from held
for sale relate to property, plant and equipment with a carrying
value of GBP20,000 which were classified as held for sale in the
prior year but were subsequently not sold.
15. Trade and other receivables
30 June 30 June
2022 2021
GBP'000 GBP'000
---------------------------------- -------- --------
Current
Trade receivables 22,290 23,202
Prepayments and other receivables 3,272 4,313
Accrued income 1,535 1,183
---------------------------------- -------- --------
27,097 28,698
---------------------------------- -------- --------
16. Trade and other payables
30 June 30 June
2022 2021
GBP'000 GBP'000
----------------------------------- -------- --------
Trade and other payables 18,853 24,835
Subscriptions and deferred revenue 31,405 30,124
----------------------------------- -------- --------
50,258 54,959
----------------------------------- -------- --------
17. Lease liabilities
The Group enters into leases of buildings in relation to offices
& business premises in the geographical locations in which they
operate.
The following table shows the discounted lease liabilities
included in the balance sheet:
30 June 30 June
2022 2021
GBP'000 GBP'000
------------ -------- --------
Current 648 2,356
Non-current 6,862 8,386
------------ -------- --------
7,510 10,742
------------ -------- --------
A reconciliation of the movement in the right-of-use assets is
included in note 14. The interest expense in relation to lease
liabilities is included in note 7. The total cash outflow for
leases was GBP4,166,000 (2021: GBP3,352,000) with the year-on-year
increase relating to a difference in the timing of payments.
Contracts entered into by the Group have a wide range of terms
and conditions but generally do not impose any additional
covenants. Extension and terminations options provide the Group
with additional operational flexibility. These options are included
in the lease term if the Group considers it reasonably certain that
the lease will be extended or terminated.
Included in liabilities of disposal group classified as held for
sale is GBP169,000 relating to lease liabilities for Wilmington
Inese SL.
The Group is committed to one lease agreement not yet commenced
as at 30 June 2022. The future cash outflow to which the Group is
potentially exposed for this agreement is approximately
GBP550,000.
18. Provisions
Property and other GBP'000
--------------------- -------
At 1 July 2021 1,842
Utilised in the year (307)
--------------------- -------
At 30 June 2022 1,535
--------------------- -------
30 June
2022
GBP'000
------------------------------------ --------
Included in current liabilities 307
Included in non-current liabilities 1,228
------------------------------------ --------
1,535
------------------------------------ --------
The provision is in respect of anticipated costs expected to be
incurred in relation to the closed proportion of the head office
until the end of the contractual lease term.
The provision is based on assumptions and estimates where the
ultimate outcome may be different from the amount provided. The
provision reflects the Group's best estimate of the probable
exposure as at 30 June 2022. This assessment has been made having
considered the sensitivity of the provision for possible changes in
key assumptions.
19. Disposal group held for sale
As at 30 June 2022, the disposal group classified as held for
sale relates to Wilmington Inese SL, a business held within the
Intelligence division. The rationale for the sale is in line with
our portfolio management strategy as outlined in the strategy
section and is expected to be completed within one year by sale of
equity shares.
The major classes of assets and liabilities comprising the
disposal group held for sale are as follows:
30 June
2022
GBP'000
-------------------------------------------- --------
Intangible assets - computer software 35
Property, plant and equipment 271
Trade and other receivables 386
Cash and cash equivalents 758
-------------------------------------------- --------
Assets of disposal group held for sale 1,450
-------------------------------------------- --------
Trade and other payables (1,163)
Lease liabilities (169)
-------------------------------------------- --------
Liabilities of disposal group held for sale (1,332)
-------------------------------------------- --------
20. Cash generated from operations
Year ended Year ended
30 June 30 June
2022 2021
GBP'000 GBP'000
----------------------------------------------------------------------------- ---------- ----------
Profit/(loss) from continuing operations before tax 36,120 (2,025)
Adjusting item - gain on disposal of subsidiaries (16,329) (770)
Adjusting item - gain on disposal of business operations - (3,394)
Adjusting item - gain on sale of property, plant and equipment (1,289) -
Adjusting item - net gain on financing activities (840) -
Adjusting items 66 2,970
Depreciation of property, plant and equipment included in operating expenses 2,412 3,399
Amortisation of intangible assets 6,089 5,816
Impairment of goodwill, intangible assets and property, plant and equipment 597 14,834
Non-adjusting (profit)/loss on disposal of property, plant and equipment (71) 2
Share based payments (including social security costs) 1,230 566
Net finance costs 928 1,634
----------------------------------------------------------------------------- ---------- ----------
Operating cash flows before movements in working capital 28,913 23,032
Decrease/(increase) in trade and other receivables 1,621 (3,619)
(Decrease)/increase in trade and other payables (5,657) (2,123)
Decrease in provisions (307) -
----------------------------------------------------------------------------- ---------- ----------
Cash generated from/(used in) operations before adjusting items 24,570 17,290
----------------------------------------------------------------------------- ---------- ----------
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
2022 2021
GBP'000 GBP'000
----------------------------------------------------------------------------- ---------- ----------
Funds from operations before adjusting items:
Adjusted EBITA (note 3) 21,621 16,649
Share based payments (including social security costs) 1,230 566
Amortisation of intangible assets - computer software 3,721 2,416
Depreciation of property, plant and equipment included in operating expenses 2,412 3,399
Non-adjusting (profit)/loss on disposal of property, plant and equipment (71) 2
----------------------------------------------------------------------------- ---------- ----------
Operating cash flows before movement in working capital 28,913 23,032
Net working capital movement (4,343) (5,742)
----------------------------------------------------------------------------- ---------- ----------
Funds from operations before adjusting items 24,570 17,290
----------------------------------------------------------------------------- ---------- ----------
Cash conversion 114% 104%
----------------------------------------------------------------------------- ---------- ----------
Year ended Year ended
30 June 30 June
2022 2021
GBP'000 GBP'000
-------------------------------------------------------- ---------- ----------
Free cash flow:
Operating cash flows before movement in working capital 28,913 23,032
Proceeds on disposal of property, plant and equipment 3,493 103
Net working capital movement (4,343) (5,742)
Interest paid (479) (1,196)
Payment of lease liabilities (3,752) (2,530)
Tax paid (3,397) (2,697)
Purchase of property, plant and equipment (440) (1,047)
Purchase of intangible assets (1,292) (1,969)
-------------------------------------------------------- ---------- ----------
Free cash flow 18,703 7,954
-------------------------------------------------------- ---------- ----------
21. Events after the reporting period
There were no events after the Balance Sheet date that require
disclosure .
[1] Adjusted profit before tax - see note 3.
[2] Adjusted basic earnings per share - see note 10.
[3] Net cash includes cash and cash equivalents, bank loans
(excluding capitalised loan arrangement fees) and bank overdrafts
but excludes lease liabilities.
[4] Organic - eliminating the effects of exchange rate
fluctuations and the impact of acquisitions and disposals.
[5] FTF - face-to-face.
[6] Cash conversion - see note 20 .
[7] Recurring revenue - those contracted at least one year
ahead
[8] Organic - eliminating the effects of exchange rate
fluctuations and the impact of acquisitions and disposals.
[9] UK Healthcare and APM.
[10] Pendragon, Axco, Compliance Week and Inese.
[11] Discontinued refers to disposed or closed businesses or
product lines.
[12] ICA and CLTi.
[13] Mercia and Bond Solon.
[14] FRA.
[15] Discontinued refers to disposed or closed businesses or
product lines.
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END
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September 22, 2022 02:01 ET (06:01 GMT)
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