RNS Number : 3486Q
Wilmington PLC
20 February 2023
 

20 February 2023

Wilmington plc

 

Double digit profits growth - dividend up 13%

 

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 half year results for the six months ended 31 December 2022 (H1 FY23).

 

Financial performance

 


H1 FY23

H1 FY22

Change

Continuing results[1]




Revenue

£56.0m

£52.4m

7%

Adjusted PBT[2]

£8.9m

£7.8m

14%

Adjusted basic EPS[3]

7.92p

7.02p

13%

Interim dividend

2.70p

2.40p

13%





Statutory results




Revenue

£57.4m

£58.9m

 

PBT incl. disposals

£10.0m

£24.6m

 

Basic EPS

9.40p

26.14p

 

Adjusted basic EPS

8.11p

8.60p

 

 

Highlights

·      Continuing revenue growth 7% and organic revenue growth 4% excluding currency gains - driven by strong performance in Training & Education

§ Recurring revenue up 5% underpinned by strong retention rates

§ Repeat revenues, including recurring revenues of 42%, now 79% of revenues (69% in FY22).

·      Continuing adjusted profit before tax of £8.9m up 14%

·      Strategic disposal of Inese in December 2022

·      Robust balance sheet - net cash[4] at 31 December 2022 of £22.9m (31 Dec 21: £11.0m; 30 Jun 22: £20.5m)

·      Significant progress made in establishing single technology platforms for both divisions

 

Mark Milner, Chief Executive Officer, commented:

 

"We continue to deliver our strategy to drive solid organic revenue growth and profits as well as strong cash conversion. We maintain focus on actively managing our portfolio and will only consider acquisition opportunities which provide attractive return on investment.

 

"We have made good progress with our endeavours to develop single platforms for our Intelligence and Training & Education divisions, simplifying our technology and enhancing our products and services.

 

"Trading in the current financial year continues to be in line with expectations. Whilst we are mindful of current economic uncertainties, we have a strong contracted order book which underpins our confidence for the second half."

 

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, contact:

 

Wilmington plc  

Mark Milner, Chief Executive Officer

Guy Millward, Chief Financial Officer

 

Meare Consulting

Adrian Duffield

 

 

020 7422 6800

 

 

 

 

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.

 

Overview

 

We have continued to deliver solid organic revenue growth and double-digit profit improvement whilst also investing in our portfolio of businesses and divisional infrastructure. Demand has been particularly strong in our Training and Education division and in Financial Services within our Intelligence division.

 

Continuing revenue was up 7% at £56.0m with organic revenue growth of 4%, after removing the impact of currency movements. Reported revenue including business sold over the last 18 months was £57.4m (H1 FY22: £58.9m).

 

Recurring revenues grew 5% with strong retention rates continuing. Recurring revenues represent 42% of total ongoing revenues (42% in H1 FY22). Repeat revenues, including the recurring revenues, from existing customers made up 79% of our revenues in H1 FY23 (69% in FY22).

 

With further margin improvements, continuing adjusted profit before tax was up 14% to £8.9m (H1 FY22: £7.8m) and continuing adjusted basic earnings per share by 13% to 7.92p (H1 FY22: 7.02p).

 

Operating cash conversion remained strong at 121%, with net cash excluding lease liabilities of £22.9m (30 June 2022: £20.5m).

 

The Group's Spanish business, Inese, as planned was sold in December 2022 for £2.6m. The proceeds were received in January 2023.

 

The interim dividend is being increased by 13% to 2.70p (H1 FY22: 2.40p), in line with continuing profits.   

 

Strategic and operational progress

 

Our strategy is to grow revenues and profits organically in the large, growing and rapidly evolving GRC and Regulatory Compliance markets by investing in our business and actively managing our portfolio of brands.

 

Our largest investment focus is on establishing single technology platforms for each division. This supports our digital-first approach and will enable the Group to grow more efficiently organically and by acquisition and help to deliver operating leverage over time.

 

In the Training & Education division, we have established the Digital Learning Platform and are moving to version 2.0, which will improve our 'back office' technologies. In the Intelligence division, we have begun to establish a single data platform for all our lines of business, based around Snowflake® technology and expect this project to roll out over the next two years. 

 

We remain focussed on actively managing our portfolio by assessing the potential of each business to exhibit the six common Wilmington characteristics that we recognise as key drivers of organic revenue growth and profitability improvement.

 

We intend to use our cash resources and our bank facility to acquire suitable GRC businesses to enhance and widen the Group's capabilities and rate of profitable growth. We have not made any acquisitions to date as we continue to find the prices being paid for good businesses are too high to deliver good returns. We will continue to apply high levels of scrutiny in respect of target identification and multiples paid.

 

We are clear in our ambition but equally clear in the characteristics we will seek in any business we look to acquire. The ability to drive long term value for Wilmington shareholders will always be a key priority.

 

Current trading and outlook

 

Trading in the current financial year continues to be in line with expectations. Whilst we are mindful of current economic uncertainties, we have a strong contracted order book which underpins our confidence for the second half.

 

Environmental, Social, and Governance (ESG)

 

We continue to invest in our priority ESG initiatives, as our responsible business strategy underpins the delivery of our broader strategic objectives. In H1 we reported a 10% reduction in our gender pay gap since last year and have continued to develop our network of internal communities that support diversity within our workforce.

 

We ran our second digital accessibility awareness campaign and continue to conduct product audits and improvement initiatives as we strive to reach our long-term goal to meet WCAG 2.1 AA standards across our digital portfolio.

 

In H1 we published our carbon reduction plan, and our updated response to Task Force on Climate-Related Financial Disclosures (TCFD) is an integral component of our upcoming strategic planning cycle.

 

Divisional review

 

Training & Education

 

 

H1 FY23

£'m

H1 FY22

£'m

Absolute

Variance

Organic

Variance

Revenue





Global

11.8

11.4

3%

1%

UK & Ireland

11.9

10.9

9%

9%

North America

4.9

2.6

87%

59%

Continuing revenue

28.6

24.9

15%

11%

Continuing operating profit

6.2

5.6

12%

7%

Margin

22%

22%

 

 




 

 

Statutory revenue

28.6

29.8

(4%)

 

Statutory operating profit

6.2

7.1

 

 

Continuing revenues grew 11% organically. This was led by a strong performance in North America where growth in events, particularly delegate attendance and the running of four new ones, boosted revenues by 59%. Growth excluding events was 6%.

 

UK and Ireland also had a strong result with both Mercia and Legal seeing substantial growth due to increased customer demand. In Global, strong growth in the UK and Malaysia was offset by challenging market conditions in Singapore.

 

Organic operating profit increased by 7% as a result of organic revenue growth and effective cost control. H1 FY23 operating profit increased by 12%, excluding £1.5m of H1 FY22 operating profit from discontinued businesses.

 

We expect margins to move ahead of FY22 levels in H2 FY23 due to the second half weighting of revenues.

 

Intelligence

 

 

H1 FY23

£'m

H1 FY22

£'m

Absolute

Variance

Organic

Variance

Revenue





Healthcare

15.1

15.8

(5%)

(5%)

Financial Services & Other

10.0

9.3

9%

5%

MiExact

2.3

2.4

(5%)

(5%)

Continuing revenue

27.4

27.5

0%

(2%)

Continuing operating profit

5.6

5.5

2%

0%

Margin

20%

20%

 

 




 

 

Statutory revenue

28.8

29.1

(1%)

 

Statutory operating profit

5.8

5.6

3%

 

 

Continuing revenues in the Intelligence division marginally declined due to a slow first half for sales in UK Healthcare and MiExact, although Financial Services had a strong performance in subscription revenues, which rose to 68% of total ongoing divisional revenue.

 

As part of our portfolio investment and improvement programme, we discontinued various UK Healthcare products and services that did not make acceptable profits. We also experienced shortages of specialist delivery and sales resources. The shortfall has now been addressed. Demand remains strong, we expect to grow revenues from on-going products and services in H2 and beyond.

 

Operating profits from continuing operations marginally improved, achieving a 0.8% increase in profit margin to over 20% following our investment programme in automation.

 

Financial review

 

Other income and finance income

 

Other income represents the net gain of £2.2m from the disposal of Inese in December 2022 (H1 FY22: £16.1m from the disposal of AMT). 

 

Net finance income was achieved for the first time (H1 FY22: £0.6m net finance expense) due to having no debt and cash to deposit in interest-bearing accounts.

 

Profit before taxation

 

Continuing adjusted profit before tax was up 14% to £8.9m (H1 FY22: £7.8m) with profit before tax at £10.0m (H1 FY22: £24.6m). H1 FY22 profit before tax included £16.1m profit on disposal of AMT.

 

Taxation

 

The tax charge is £1.8m (H1 FY22: £1.7m) with an overall effective tax rate[5] of 18% (H1 FY22: 7%). The lower effective tax rate in the prior period was due to the gain of £16.1m on disposal of AMT not being subject to corporation tax.

 

The underlying tax rate[6], which ignores the tax effects of adjusting items, is 21% (H1 FY22: 20%). The increase reflects greater profits from territories with higher tax rates including North America.

 

Earnings per share

 

Continuing adjusted basic earnings per share, excluding the results of sold and closed businesses, increased by 13% to 7.92p (H1 FY22: 7.02p), reconciliation below. Reported earnings per share 9.40p (H1 FY22: 26.14p).

 


H1 FY23

£'m

H1 FY22

£'m


Adjusted earnings (note 6)

7.1

7.5


Remove profit after tax of sold and closed businesses

(0.1)

(1.4)


Continuing adjusted earnings

7.0

6.1







Number

Number

Variance

Weighted average number of ordinary shares (note 6)

88,027,119

87,603,917






Continuing adjusted basic earnings per share

7.92p

7.02p

13%

 

Dividend

 

The Board has increased the interim dividend by 13% to 2.70p (H1 FY22: 2.40p), in line with continuing profits. It will be paid on 6 April 2023 to shareholders on the share register as at 3 March 2023, with an associated ex-dividend date of 2 March 2023. 

 

Balance sheet and cashflow

 

Cash generation improved due to the strong trading performance with operating cash conversion remaining strong at 121%, with net cash excluding lease liabilities of £22.9m (30 June 2022: £20.5m). The proceeds from the disposal of Inese were received in January 2023.

 

 

 

Consolidated Income Statement

 


Notes

Six months ended

31 December 2022

 (unaudited)

£'000

 

Six months ended

31 December 2021

 (unaudited)

£'000


Year

 ended

30 June

2022

 (audited)

£'000

Continuing operations


 

 



 

Revenue

5

57,425

 

58,945


121,028



 

 




Operating expenses before amortisation of intangibles excluding computer software, impairment and adjusting items


(48,367)

 

(48,921)


(99,407)

Impairment of property, plant and equipment

4

-

 

(597)


(597)

Amortisation of intangible assets excluding computer software

4

(1,208)

 

(1,183)


(2,368)

Adjusting items

4

(45)

 

22


(66)

Operating expenses


(49,620)

 

(50,679)


(102,438)

 


 

 




Other income - gain on disposal of subsidiaries

7

2,212

 

16,115


16,329



 

 




Other income - gain on disposal of property, plant and equipment


-

 

758


1,289



 

 




Other income - net gain on financing activities

4

-

 

-


840



 

 




Operating profit


10,017

 

25,139


37,048



 

 




Net finance income/(expense)


12

 

(551)


(928)



 

 




Profit before tax

4

10,029

 

24,588


36,120

 


 

 




Taxation


(1,757)

 

(1,687)


(3,295)

 


 

 




Profit for the period attributable to owners of the parent


8,272

 

22,901


32,825

 


 

 




 


 

 




Earnings per share:


 

 




Basic (p)

6

9.40

 

26.14


37.46

Diluted (p)

6

9.19

 

25.92


36.98

 

 

Consolidated Statement of Comprehensive Income

 


Six months ended

31 December 2022

Six months ended

31 December 2021

Year

 ended

30 June
2022


(unaudited)

£'000

(unaudited)

£'000

(audited)

£'000

 

Profit for the period

8,272

22,901

32,825

Other comprehensive income:

Items that may be reclassified subsequently to the Income Statement

 



Fair value movements on interest rate swaps, net of tax

-

389

-

Currency translation differences

8

341

2,353

Fair value movements of net investment hedges, net of tax

-

(164)

(193)

Other comprehensive income for the period, net of tax

8

566

2,160

Total comprehensive income for the period attributable to owners of the parent

 

8,280

 

23,467

34,985

 

Items in the statement above are disclosed net of tax.

 

 

Consolidated Balance Sheet 

 

 

 

31 December 2022

31 December 2021

30 June

2022



(unaudited)

(unaudited)

(audited)



£'000

£'000

£'000

Non-current assets


 



Goodwill


61,237

59,912

61,128

Intangible assets


8,300

12,986

9,427

Property, plant and equipment


8,192

7,909

6,876

Deferred consideration receivable


1,304

1,516

1,448

Derivative financial instruments


-

537

-

Deferred tax assets


1,648

1,233

1,041



80,681

84,093

79,920

Current assets


 



Trade and other receivables


29,771

25,904

27,097

Deferred consideration receivable


677

250

250

Current tax assets


1,100

238

1,262

Cash and cash equivalents


22,922

24,160

19,785

Assets of disposal group held for sale


-

-

1,450



54,470

50,552

49,844

Total assets


135,151

134,645

129,764

 


 



Current liabilities


 



Trade and other payables


(51,252)

(51,561)

(50,258)

Derivative financial instruments


-

(125)

-

Lease liabilities


(1,478)

(2,243)

(648)

Provisions


(307)

(307)

(307)

Liabilities of disposal group held for sale


-

-

(1,332)



(53,037)

(54,236)

(52,545)



 



Non-current liabilities


 



Borrowings


-

(12,734)

-

Lease liabilities


(8,140)

(7,750)

(6,862)

Deferred tax liabilities


(1,469)

(1,762)

(2,040)

Provisions


(1,075)

(1,381)

(1,228)



(10,684)

(23,627)

(10,130)

Total liabilities


(63,721)

(77,863)

(62,675)

Net assets


71,430

56,782

67,089

 


 



Equity


 



Share capital


4,408

4,380

4,391

Share premium


45,553

45,225

45,553

Treasury and ESOT reserves


(880)

(960)

(1,093)

Share based payments reserve


2,131

1,736

2,141

Translation reserve


4,430

2,410

4,422

Retained earnings


15,788

3,991

11,675

Total equity


71,430

56,782

67,089

 





 

Consolidated Statement of Changes in Equity

 

 


Share capital, share premium, treasury shares and ESOT shares

£'000

Share based payments reserve

£'000

 

 

Translation reserve

£'000

 

 

Retained earnings/ (accumulated losses)

£'000

Total equity

£'000

 

 





At 30 June 2021 (audited)

48,904

1,390

2,069

(15,696)

36,667

Profit for the period

-

-

-

22,901

22,901

Other comprehensive income for the period

-

-

341

225

566


48,904

1,390

2,410

7,430

60,134

Dividends paid

-

-

-

(3,399)

(3,399)

Performance share plan awards vesting settled via ESOT

84

(105)

-

21

-

ESOT share purchases

(371)

-

-

-

(371)

Sale of treasury shares

28

-

-

-

28

Share based payments

-

451

-

-

451

Tax on share based payments

-

-

-

(61)

(61)

At 31 December 2021 (unaudited)

48,645

1,736

2,410

3,991

56,782

Profit for the period

-

-

-

9,924

9,924

Other comprehensive income/(expense) for the period

-

-

2,012

(418)

1,594

 

48,645

1,736

4,422

13,497

68,300

Dividends paid

-

-

-

(2,093)

(2,093)

Sale of treasury shares

21

-

-

-

21

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

-

585

-

-

585

Tax on share based payments

-

-

-

119

119

 

At 30 June 2022 (audited)

48,851

2,141

4,422

11,675

67,089

Profit for the period

-

-

-

8,272

8,272

Other comprehensive income for the period

-

-

8

-

8


48,851

2,141

4,430

19,947

75,369

Dividends paid

-

-

-

(5,091)

(5,091)

Issue of share capital

17

-

-

-

17

Performance share plan awards vesting

-

(717)

-

875

158

Save As You Earn options settlement via ESOT

86

(11)

-

(16)

59

Save As You Earn options settlement via treasury shares

127

-

-

(64)

63

Share based payments

-

718

-

-

718

Tax on share based payments

-

-

-

137

137

At 31 December 2022 (unaudited)

49,081

2,131

4,430

 

15,788

71,430

 

 

Consolidated Cash Flow Statement

 

 


Six months ended

31 December

2022

Six months ended

31 December 2021

Year ended

30 June 2022



(unaudited)

(unaudited)

(audited)


Notes

£'000

£'000

£'000






Cash flows from operating activities


 



Cash generated from operations before adjusting items

9

10,925

11,374

24,570

Cash flows for adjusting items - operating activities


(4)

(31)

(342)

Cash flows from tax on share based payments


(3)

(4)

(4)

Cash generated from operations


10,918

11,339

24,224

Interest received/(paid)


40

(302)

(479)

Tax paid


(2,468)

(1,805)

(3,397)

Net cash generated from operating activities


8,490

9,232

20,348



 



Cash flows from investing activities


 



Disposal of subsidiaries net of cash


-

21,875

22,792

Disposal of cash held in subsidiary


(737)

-

-

Deferred consideration received


125

125

250

Cash flows for adjusting items - investing activities


(6)

(92)

(43)

Purchase of property, plant and equipment


(131)

(275)

(440)

Proceeds from disposal of property, plant and equipment


10

3,439

3,493

Purchase of intangible assets


(436)

(988)

(1,292)

Net cash (used in)/generated from investing activities


(1,175)

24,084

24,760

 


 



Cash flows from financing activities


 



Dividends paid to owners of the parent


(5,091)

(3,399)

(5,492)

Issue of new shares


587

-

340

Share issuance costs


(14)

-

(28)

Purchase of shares by ESOT


-

(371)

(371)

Payment of lease liabilities


(347)

(1,095)

(3,752)

Cash flows for adjusting items - proceeds on disposal of interest rate swap


-

-

1,243

Fees relating to new and extended loan facility


-

(5)

-

Decrease in bank loans


-

(8,000)

(21,198)

Net cash used in financing activities


(4,865)

(12,870)

(29,258)

 

 

 



Net increase in cash and cash equivalents


2,450

20,446

15,850

Cash and cash equivalents, net of bank overdrafts, at beginning of the period


 

20,543

 

3,730

3,730

Exchange (loss)/gain on cash and cash equivalents


(71)

(16)

205

Cash classified as held for sale


-

-

758

Cash and cash equivalents at end of the period


22,992

24,160

20,543

 


 



Reconciliation of net cash


 



Cash and cash equivalents at beginning of the period


19,785

7,374

7,374

Cash classified as held for sale at beginning of the period


758

-

-

Bank overdrafts at beginning of the period


-

(3,644)

(3,644)

Bank loans at beginning of the period


-

(20,960)

(20,960)

Lease liabilities at beginning of the period


(7,510)

(10,742)

(10,742)

Net cash/(debt) at beginning of the period


13,033

(27,972)

(27,972)

Net increase in cash and cash equivalents


2,379

20,430

16,813

Net repayment in bank loans


-

8,000

21,198

Exchange loss on bank loans


-

(202)

(238)

Movement in lease liabilities


(2,108)

749

3,232

Cash and cash equivalents at end of the period


22,922

24,160

19,785

Cash classified as held for sale at end of the period


-

-

758

Bank loans at end of the period


-

(13,162)

-

Lease liabilities at end of the period


(9,618)

(9,993)

(7,510)

Net cash at end of the period


13,304

1,005

13,033

 


 



 

Notes to the Financial Results

 

General information

The Company is a public limited company incorporated and domiciled in the UK. The address of the Company's registered office is 10 Whitechapel High Street, London, E1 8QS.

 

The Company is listed on the Main Market on the London Stock Exchange. The Company is a provider of data, information, education and training in the global Governance, Risk and Compliance ('GRC') markets.

 

This condensed consolidated interim financial information ('Interim Information') was approved for issue by the Board of Directors on 17 February 2023.

 

The Interim Information is neither reviewed nor audited and does not comprise statutory accounts within the meaning of Section 434 of the Companies Act 2006. Statutory accounts for the year ended 30 June 2022 were approved by the Board of Directors on 21 September 2022 and subsequently filed with the Registrar. The report of the auditors on those accounts was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement under Section 498 of the Companies Act 2006.

 

1.     Basis of preparation

This Interim Information for the six months ended 31 December 2022 has been prepared in accordance with the Disclosure and Transparency Rules of the Financial Conduct Authority and in accordance with IAS 34 'Interim Financial Reporting'. The Interim Information should be read in conjunction with the Annual Financial Statements for the year ended 30 June 2022 which have been prepared in accordance with UK adopted international accounting standards ('UK adopted IAS') and are available on the Group's website: wilmingtonplc.com.

 

The Group's forecast and projections, taking account of reasonably possible changes in trading performance, show that the Group will be able to operate well within the level of its current banking facilities, further supported by the net cash position. The Directors have therefore adopted a going concern basis in preparing the Interim Information.

 

2.     Accounting policies

The accounting policies, significant judgements and key sources of estimation adopted in the preparation of this Interim Report are consistent with those applied by the Group in its consolidated financial statements for the year ended 30 June 2022.

 

There has been no material impact on the financial statements of adopting new standards or amendments.

 

Amended standards and interpretations not yet effective are not expected to have a significant impact on the Group's consolidated financial statements.

 

3.     Principal risks and uncertainties

The principal risks and uncertainties that affect the Group remain unchanged from those stated on pages 27 to 32 of the strategic report in the Annual Report and Financial Statements for the year ended 30 June 2022.

 

4.     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.

 

Adjusted profit before tax, adjusted EBITA, adjusted EBITDA and continuing adjusted profit before tax reconcile to statutory profit before tax as follows:

 

 


Six months ended

31 December 2022

Six months ended

31 December 2021

Year ended

30 June
2022


(unaudited)

(unaudited)

(audited)


£'000

£'000

£'000

 

Profit before tax

10,029

24,588

36,120

Impairment of property, plant and equipment

-

597

597

Amortisation of intangible assets excluding computer software

1,208

1,183

2,368

Adjusting items (included in operating expenses)

45

(22)

66

Other income - gain on disposal of subsidiaries

(2,212)

(16,115)

(16,329)

Other income - gain on disposal of property, plant and equipment

-

(758)

(1,289)

Other income - net gain on financing activities

-

-

(840)

Adjusted profit before tax

9,070

9,473

20,693

Net finance (income)/expense

(12)

551

928

Adjusted operating profit ('adjusted EBITA')

9,058

10,024

21,621

Depreciation of property, plant and equipment included in operating expenses

1,163

1,217

2,412

Amortisation of intangible assets - computer software

411

784

3,721

Adjusted EBITA before depreciation ('adjusted EBITDA')

10,632

12,025

27,754


 



Adjusted profit before tax

9,070

9,473

20,693

Remove operating profit from sold and closed businesses

(181)

(1,662)

(2,089)

Continuing adjusted profit before tax

8,889

7,811

18,604


 



The following adjusting items have been charged to the Income Statement during the period but are considered to be adjusting so are shown separately:

 


Six months ended

31 December

2022

(unaudited)

£'000

Six months ended

31 December

2021

 (unaudited)

£'000

Year ended

30 June

2022

(audited)

£'000


 



Expense/(income) relating to strategic activities

45

(22)

66

Adjusting items (included in operating expenses)

45

(22)

66

Impairment of property, plant and equipment

-

597

597

Amortisation of intangible assets excluding computer software

1,208

1,183

2,368

Total adjusting items (classified in profit before tax)

1,758

3,031

 

5.     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 Executive 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


Six months ended 31 December 2022

(unaudited)

Six months ended 31 December 2021

(unaudited)

Year ended 30 June 2022

(audited)


Revenue

£'000

Contribution

 £'000

Revenue

£'000

Contribution

 £'000

Revenue

 £'000

Contribution

 £'000

Training & Education

28,581

6,221

29,867

7,096

61,464

15,998

Intelligence

28,844

5,768

29,078

5,616

59,564

11,359

Group total

57,425

11,989

58,945

12,712

121,028

27,357

Unallocated central overheads

-

(2,155)

-

(2,152)

-

(4,506)

Share based payments

-

(776)

-

(536)

-

(1,230)


57,425

9,058

58,945

10,024

121,028

21,621

Impairment of property, plant and equipment

 

-


 

(597)


(597)

Amortisation of intangible assets excluding computer software

 

(1,208)


(1,183)


(2,368)

Adjusting items (included in operating expenses)

 

(45)


22


(66)

Other income - gain on disposal of subsidiaries

 

2,212


16,115


16,329

Other income - gain on disposal of property, plant and equipment

 

-


758


1,289

Other income - net gain on financing activities

 

-


-


840

Net finance income/(expense)

 

12


(551)


(928)

Profit before tax

 

10,029

·     

24,588


36,120

Taxation

 

(1,757)


(1,687)


(3,295)

Profit for the financial period

 

8,272


22,901


32,825

 

There are no intra-segmental revenues which are material for disclosure. Unallocated central overheads represent head office costs that are not specifically allocated to segments. Total assets and liabilities for each reportable segment are not presented, as such, this 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:

 

 

Six months ended

31 December

2022

Six months ended

31 December

2021

Year ended

30 June

2022

 

(unaudited)

(unaudited)

(audited)

 

£'000

£'000

£'000

UK

 30,819

30,874

64,320

Europe (excluding the UK)

 10,756

11,922

25,809

North America

 11,308

10,431

21,727

Rest of the World

 4,542

5,718

9,172

Total revenue

57,425

58,945

121,028

 

Sterling makes up the largest portion of our ongoing revenue. In the current period 14% of revenue was derived in US dollars, 12%

in Euros and 3% in Singapore dollars, no other currency was material.

 

6.     Earnings per share

 

Adjusted earnings per share has been calculated using adjusted earnings calculated as profit after taxation 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:

 


Six months ended

31 December 2022

Six months ended

31 December 2021

Year ended

30 June
2022


(unaudited)

(unaudited)

(audited)


£'000

£'000

£'000

 

Earnings from continuing operations for the purpose of basic earnings per share

8,272

22,901

32,825

Add/(remove):

 



Impairment of property, plant and equipment

-

597

597

Amortisation of intangible assets excluding computer software

1,208

1,183

2,368

Adjusting items (included in operating expenses)

45

(22)

66

Other income - gain on disposal of subsidiaries

(2,212)

(16,115)

(16,329)

Other income - gain on disposal of property, plant and equipment

-

(758)

(1,289)

Other income - net gain on financing activities

-

-

(840)

Tax effect of adjustments above

(176)

(253)

(1,050)

Adjusted earnings for the purposes of adjusted earnings per share

7,137

7,533

16,348


 




Number

Number

Number

Weighted average number of ordinary shares for the purpose of basic and adjusted earnings per share

88,027,119

87,603,917

87,632,022


 



Effect of dilutive potential ordinary shares:

 



Future exercise of share awards and options

1,966,227

745,931

1,126,918

Weighted average number of ordinary shares for the purposes of diluted earnings per share

89,993,346

88,349,848

88,758,940


 



Basic earnings per share

9.40p

26.14p

37.46p

Diluted earnings per share

9.19p

25.92p

36.98p

Adjusted basic earnings per share ('adjusted earnings per share')

8.11p

8.60p

18.66p

Adjusted diluted earnings per share

7.93p

8.53p

18.42p

 

7.     Disposal of subsidiary

 

On 30 December 2022 the Group disposed of its Spanish insurance business, Inese for proceeds of £2.6m, net cash consideration of £1.9m, including £0.4m deferred for one year. The disposal was executed by way of the sale of 100% of the equity shares. A gain of £2.2m arose on disposal after taking into account £0.4m costs of disposal. As at the disposal date, the net assets of Inese were £0.2m. The proceeds of the disposal were received in January 2023.

 

8.     Related party transactions        

 

The Company and its wholly owned subsidiary undertakings offer certain group-wide purchasing facilities to the Company's other subsidiary undertakings whereby the actual costs are recharged. 

 

There were no (H1 FY22: £nil) transactions with related parties of key management personnel in the period.

 

9.     Cash generated from operations


Six months ended

31 December

2022

Six months ended

31 December 2021

Year ended

30 June
 2022


(unaudited)

(unaudited)

(audited)


£'000

£'000

£'000


 



Profit before tax

10,029

24,588

36,120

Adjusting item - gain on disposal of subsidiaries

(2,212)

(16,115)

(16,329)

Adjusting item - gain on disposal of property, plant and equipment

-

(758)

(1,289)

Adjusting item - net gain on financing activities

-

-

(840)

Adjusting items (included in operating expenses)

45

(22)

66

Depreciation of property, plant and equipment

1,163

1,217

2,412

Amortisation of intangible assets

1,619

1,967

6,089

Impairment of property, plant and equipment

-

597

597

Non-adjusting profit on disposal of property, plant and equipment

(11)

(40)

(71)

Share based payments (including social security costs)

776

536

1,230

Net finance (income)/expense

(12)

551

928

Operating cash flows before movements in working capital

11,397

12,521

28,913

(Increase)/decrease in trade and other receivables

(807)

2,905

1,621

Increase/(decrease) in trade and other payables

488

(3,898)

(5,657)

Decrease in provisions

(153)

(154)

(307)

Cash generated from operations before adjusting items

10,925

11,374

24,570


 



Cash conversion is calculated as a percentage of cash generated by operations to adjusted EBITA as follows:

 


Six months ended

31 December 2022

Six months ended

31 December 2021

Year ended

30 June
 2022


(unaudited)

(unaudited)

(audited)


£'000

£'000

£'000

Funds from operations before adjusting items:

 



Adjusted EBITA (note 4)

9,058

10,024

21,621

Share based payments (including social security costs)

776

536

1,230

Amortisation of intangible assets - computer software

411

784

3,721

Depreciation of property, plant and equipment included in operating expenses

1,163

1,217

2,412

Profit on disposal of property, plant and equipment

(11)

(40)

(71)

Operating cash flows before movements in working capital

11,397

12,521

28,913

Net working capital movement

(472)

(1,147)

(4,343)

Funds from operations before adjusting items

10,925

11,374

24,570

Cash conversion

121%

113%

114%


 



Free cash flow:

 



Operating cash flows before movement in working capital

11,397

12,521

28,913

Proceeds on disposal of property, plant and equipment

10

3,439

3,493

Net working capital movement

(472)

(1,147)

(4,343)

Interest received/(paid)

40

(302)

(479)

Payment of lease liabilities

(347)

(1,095)

(3,752)

Tax paid

(2,468)

(1,805)

(3,397)

Purchase of property, plant and equipment

(131)

(275)

(440)

Purchase of intangible assets

(436)

(988)

(1,292)

Free cash flow

7,593

10,348

18,703


 



END



[1] Continuing - eliminating the effects of the impact of disposals; Organic - Continuing eliminating exchange rate fluctuations

[2] Adjusted profit before tax - see note 4

[3] Continuing adjusted basic earnings per share - see the financial review; Adjusted basic earnings per share - see note 6

[4] Net cash includes cash and cash equivalents, bank loans (excluding capitalised loan arrangement fees) and bank overdrafts but excludes lease liabilities

[5] The effective tax rate is calculated as the total tax charge divided by profit before tax

[6] The underlying tax rate is calculated as one minus the adjusted profit after tax divided by the adjusted profit before tax - the tax rate excluding the tax impact of adjusting items

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