RNS Number:6694H
Wilmington Group Plc
19 February 2003
For Immediate Release Wednesday 19th February 2003
WILMINGTON GROUP PLC
Interim Results
For the 6 Months to 31st December 2002
Wilmington Group plc ("Wilmington" or the "Group"), the business information,
professional training and magazine publishing group, today announces its interim
results for the 6 months to 31st December 2002.
Interim results highlights:
- Turnover of #37.0m (2001: #38.6m), down 4 % reflecting demanding trading
conditions
- Pre-tax profits before amortisation of goodwill and intangible assets of
#3.4m, down 18% (2001: #4.2m), with adjusted earnings per share (before
amortisation) of 2.46p per share (2001: 3.17p)
- Net cash inflow from operating activities of #2.8m (2001: #2.5m), up 12%
- Strong balance sheet and available resources to pursue acquisition
opportunities
- Interim dividend of 0.8p per share with anticipated total dividends for
the year of 2.5p per share.
Commenting on the interim results, Charles Brady, Chief Executive of Wilmington,
said:
"As anticipated, the first half of the current financial year has witnessed
continued pressure in the Magazine Publishing division which has now been
reorganised. Wilmington has also strived to diversify its business by continuing
to develop its Business Information and Professional Training divisions, both of
which have provided strong cash flow and predictable earnings despite difficult
market conditions. The aim of pursuing long term profits growth remains in
place and, with increased net cash inflows combined with the benefits of a
strong balance sheet, the Board remain confident of delivering on this
strategy".
For further information, please call:
Charles Brady On the day: 020 7466 5000
Chief Executive, Wilmington Thereafter: 0121 355 0900
Bobby Morse/Suzanne Dunne Tel: 020 7466 5000
Buchanan Communications
CHAIRMAN'S STATEMENT
Results for the six months ended 31st December 2002
I am pleased to announce the results of Wilmington Group plc for the six months
to 31st December 2002. This is the first time that we have reported to this date
following the change in 2002 of the Company's year end from 28th February to
30th June and therefore results for the six months to 31st December 2001 are
shown below for comparative purposes.
As previously indicated in our trading update of 9th December 2002, trading
conditions have been demanding and have resulted in a downturn in turnover in
the six months to 31 December 2002 to #37.0 million (2001: #38.6 million).
Profit before tax fell to #1.3 million (2001: #2.5 million). Losses per share
were 0.06p (2001: earnings of 1.18p).
Profit before tax and amortisation of goodwill and intangible assets reduced to
#3.4 million (2001: #4 million). Adjusted earnings per share, calculated before
the amortisation of goodwill and intangible assets, fell to 2.46p (2001: 3.17p).
Notwithstanding this, a feature of our business remains its ability to generate
strong cash flow. There was a net cash inflow from operating activities in the
six months of #2.8 million (2001: #2.5 million).
Following the change of accounting year end, the Board intends to pay an interim
dividend and a final dividend each year. An interim dividend for the current
year of 0.8p per share will be paid on 8th April 2003 to shareholders on the
register on 7th March 2003. It is anticipated that the total dividend for the
year to 30th June 2003 will be 2.5p.
Business Review
Our overall aim remains the long term growth of the profits of the Group. The
strategy for achieving this is based on the ownership of quality assets which
meet the information requirements of professional business communities and
generate sustainable, profitable revenue streams. We serve these communities via
magazines, directories, databases, electronic information, training and other
media.
The Business Information division, which creates and sells value added
information products to business to business markets, increased its profits in
the first half. Although trading conditions are challenging, it has performed
well with positive growth in certain sectors. For example Binleys, which
provides contact information for the healthcare and pharmaceutical industries,
has achieved good growth.
Recent acquisitions have contributed to the development of the Business
Information division. Pendragon Professional Information was acquired in June
2002 and provides an online service covering the legal and regulatory aspects of
the pension industry. In the same month TMSS, which monitors the use of music in
TV programmes for rights reporting services, was purchased. In November 2002,
The Solicitor's Journal, a leading subscription based magazine for lawyers, was
added to reinforce our already strong position in the legal market.
As indicated in our trading update of 9th December 2002, the Magazine Publishing
division, which derives the majority of its revenue from advertising, remains
under pressure. The tough economic environment continues and there are
currently no signs of recovery. Most titles performed in line with
expectations, but the design magazine business, which previously contributed
significant profits, has experienced more difficult trading conditions.
Our trading update highlighted that the senior management structure of this
division was undergoing a reorganisation which would result in a leaner, more
focused team. We are confident that this action, together with the ongoing
portfolio review whereby a number of non-core products have been either sold or
closed, will enhance the overall performance of the division going forward. The
full benefits of this action will be reflected in the results for the year to
30th June 2004.
Profits in our Professional Training division have not matched last year's
excellent performance, partly due to the impact of regulatory changes. However,
it continues to have sound profitability and strong defensive qualities with its
revenues derived largely from the compulsory training of UK lawyers. We are
pleased to report that commitments from client firms remains strong with
subscription revenues being maintained.
Central Law Training (Scotland) and Bond Solon are showing strong organic growth
and have launched new products which have been well received. Across the
Professional Training division there are various new initiatives where
development costs are being incurred, reflecting the many opportunities
available. In particular, we have recently launched major new programmes
related to compliance and money laundering for international financial
institutions. We have confidence in this market and continue to invest.
A significant management change occurred at the end of the half year. Brian
Gilbert, who had led Wilmington since its flotation in 1995, retired as Chairman
and stepped down from the Board on 31st December 2002. Brian made a unique
contribution to Wilmington and he retires leaving the business well placed for
the next phase of its development. We thank him for this and I am honoured to
succeed him as Chairman.
Outlook
Whilst we continue to operate in a difficult economic environment, we
nevertheless remain committed to delivering long term profitable growth. Our
strategy is to focus investment, both acquisitive and organic in our key
markets. We are well positioned for further good quality development and have
many new organic initiatives in the pipeline. The Group continues to generate
good profit streams, has strong brands and a robust balance sheet.
We have rationalised the management structure within the Group thereby creating
a more streamlined and focused organisation. This reorganisation will result in
approximately #800,000 of costs incurred during the current financial year not
being repeated in the year ending 30th June 2004. Although our financial
performance in the first half has been below that achieved in the comparable
period of the preceding year, we anticipate that, as in previous years, the full
year performance will be weighted to the second half reflecting the seasonality
of some of our businesses as well as the actions undertaken by management.
I would like to thank my fellow directors, senior management and the Group's
employees for their continued hard work and commitment.
Bernard Jolles
Chairman
CONSOLIDATED PROFIT AND LOSS ACCOUNT
Six Six Twelve Sixteen
months months months months
ended ended ended ended
31st Dec 31st Dec 30th June 30th June
2002 2001 2002 2002
(unaudited) (unaudited) (unaudited) (audited)
Notes #'000 #'000 #'000 #'000
Turnover 2 36,988 38,585 78,546 103,098
Cost of sales (14,001) (14,062) (26,900) (35,842)
Gross profit 22,987 24,523 51,646 67,256
Operating expenses (19,461) (20,244) (41,491) (54,803)
Operating profit before amortisation
of goodwill and intangible assets 2 3,526 4,279 10,155 12,453
Amortisation of goodwill and
intangible assets -recurring (2,123) (1,645) (3,481) (4,521)
intangible assets -non-recurring - - (2,900) (2,900)
Operating profit 2 1,403 2,634 3,774 5,032
Interest receivable and similar 6 8 42 85
income
Interest payable and similar charges (131) (132) (296) (383)
Profit on ordinary activities before
taxation 2 1,278 2,510 3,520 4,734
Taxation 3 (1,012) (1,135) (2,896) (3,877)
Profit on ordinary activities after
taxation 266 1,375 624 857
Minority interests (317) (418) (677) (841)
(Loss)/profit for the period and
attributable to shareholders (51) 957 (53) 16
Dividends (666) - (2,455) (2,455)
Retained (loss)/profit for the period (717) 957 (2,508) (2,439)
Earnings per ordinary share 4 (0.06)p 1.18p (0.06)p 0.02p
Diluted earnings per ordinary share 4 (0.06)p 1.17p (0.06)p 0.02p
Adjusted earnings per ordinary share 5 2.46p 3.17p 7.68p 9.02p
There were no recognised gains or losses in the six months ended 31st December 2002
(2001: #Nil) other than those shown in the profit and loss account.
CONSOLIDATED BALANCE SHEET
As at As at As at
31st December 31st December 30th June
2002 2001 2002
(unaudited) (unaudited) (audited)
#'000 #'000 #'000
Fixed assets
Goodwill and intangible assets 63,666 53,720 64,410
Tangible assets 10,126 11,394 10,540
73,792 65,114 74,950
Current assets
Stock and work in progress 2,519 2,380 2,237
Debtors 13,883 15,343 15,976
Cash at bank and in hand - - 1,640
16,402 17,723 19,853
Creditors: Amounts falling due within one year (24,567) (19,279) (22,739)
Net current liabilities (8,165) (1,556) (2,886)
Total assets less current liabilities 65,627 63,558 72,064
Creditors: Amounts falling due
after more than one year (5,900) (2,091) (11,895)
Provision for liabilities and charges (687) (816) (794)
Net assets 59,040 60,651 59,375
Capital and reserves
Called up share capital 4,156 4,064 4,149
Share premium account 42,149 39,920 42,091
Other reserves 949 949 949
Profit and loss account 10,450 14,608 11,167
Shareholders' funds 57,704 59,541 58,356
Minority interests 1,336 1,110 1,019
59,040 60,651 59,375
CONSOLIDATED CASH FLOW
Six Six Twelve Sixteen
months months months months
ended ended ended ended
31st Dec 31st Dec 30th June 30th June
2002 2001 2002 2002
(unaudited) (unaudited) (unaudited) (audited)
Notes #'000 #'000 #'000 #'000
Reconciliation of operating profit to
net cash inflow from operating
activities:
Operating profit 1,403 2,634 3,774 5,032
Adjustment for items not involving
the flow of funds 2,778 2,538 7,958 9,697
Net working capital movement 6 (1,403) (2,704) 412 1,745
Net cash inflow from operating
activities 2,778 2,468 12,144 16,474
Returns on investments and servicing
of finance
Interest received 6 8 42 85
Interest and similar charges paid (131) (132) (296) (383)
Dividend paid to minority
shareholders in subsidiary
undertaking - - (1,342) (1,342)
Net cash outflow (125) (124) (1,596) (1,640)
Taxation
Corporation tax paid (1,288) (1,741) (3,469) (4,839)
Capital expenditure and financial
investment
Purchase of goodwill and intangible
assets (94) (605) (370) (2,315)
Purchase of tangible fixed assets (541) (836) (2,103) (2,947)
Sale of tangible fixed assets 75 150 1,418 1,634
Net cash outflow (560) (1,291) (1,055) (3,628)
Acquisitions and disposals
Purchase of subsidiary undertakings - (624) (3,445) (3,445)
Purchase of businesses (1,069) - (35) (1,028)
Sale of subsidiaries 160 - - -
Net cash outflow (909) (624) (3,480) (4,473)
Equity dividends paid (416) (2,025) (4,065) (4,065)
Cash outflow before financing (520) (3,337) (1,521) (2,171)
Financing
Issue of shares 65 26 203 312
Repayment of loan notes (295) - (796) (799)
(230) 26 (593) (487)
Decrease in cash (750) (3,311) (2,114) (2,658)
Reconciliation of net cash flow to
movement in net (debt)/cash
Change in net (debt)/cash resulting
from cash flow (750) (3,311) (2,114) (2,658)
Arising on acquisitions and disposals - 49 1,291 1,291
Net cash brought forward 145 968 968 1,512
Net (debt)/cash carried forward (605) (2,294) 145 145
Notes to the Financial Accounts
1. Nature of Information
The interim accounts for the six months ended 31st December 2002 and the
comparative figures both for the six months ended 31st December 2001 and for the
twelve months ended 30th June 2002 are neither audited nor reviewed by the
Company 's auditors. The comparative figures for the sixteen months ended 30th
June 2002 are not the Company 's statutory accounts within the meaning of
Section 240 of the Companies Act 1985 but are abridged from such accounts which
have been reported on by the Company 's auditors and delivered to the Registrar
of Companies. The report of the auditors on such accounts was unqualified and
did not contain any statement under Sections 237(2)or 237(3)of the Companies Act
1985.
The interim accounts and the comparative figures are prepared on the basis of
the accounting policies set out in the accounts of the Group for the sixteen
months ended 30th June
2002.
2. Segmental information
Six Six Twelve Sixteen
months months months months
ended ended ended ended
31st Dec 31st Dec 30th June 30th June
2002 2001 2002 2002
(unaudited) (unaudited) (unaudited) (audited)
#'000 #'000 #'000 #'000
Turnover:
Business Information 9,712 9,001 20,148 26,885
Magazine Publishing 17,259 19,220 38,273 51,301
Professional Training 10,017 10,364 20,125 24,912
36,988 38,585 78,546 103,098
Profit before taxation:
Business Information 1,678 1,382 4,223 4,774
Magazine Publishing (257) 32 1,131 1,686
Professional Training 2,105 2,865 4,801 5,993
Operating profit before amortisation 3,526 4,279 10,155 12,453
Less: amortisation (2,123) (1,645) (6,381) (7,421)
Operating profit 1,403 2,634 3,774 5,032
Less: interest (125) (124) (254) (298)
Profit on ordinary activities before
taxation 1,278 2,510 3,520 4,734
3. Taxation
There is a corporation taxation charge for the six months ended 31st December
2002 of #1,044,000 (2001: #1,157,000) based on the Group's profits for the
period at current corporation tax rates. There is also a deferred tax credit
for the six months to 31st December 2002 of #32,000 (2001: #22,000). The total
tax charge as a percentage of profit before taxation is 79.2% because of the
disallowable amortisation of certain intangibles.
4. Earnings per ordinary share
Earnings per ordinary share is calculated on the basis of profit on ordinary
activities after taxation and minority interests divided by 83,112,829 (2001:
81,271,797), being the weighted average number of ordinary shares of 5p in
issue.
Diluted earnings per ordinary share is calculated on the basis of profit on
ordinary activities after taxation and minority interests divided by 83,112,308
(2001: 81,636,016), being the diluted weighted average number of ordinary shares
of 5p.
5. Adjusted earnings per ordinary share
In order to show results on a comparable basis to prior years before adoption of
FRS 10 "Goodwill and Intangible Assets" an adjusted earnings per ordinary share
has been calculated based on an adjusted profit after taxation and minority
interests but before amortisation of goodwill and intangible assets of
#2,041,000 (2001: #2,575,000).
6. Net working capital movement
Six Six Twelve Sixteen
months months months months
ended ended ended ended
31st Dec 31st Dec 30th June 30th June
2002 2001 2002 2002
(unaudited) (unaudited) (unaudited) (audited)
#'000 #'000 #'000 #'000
(Increase) / decrease in stock and work in
progress (282) (69) 31 (697)
Decrease in debtors 2,173 851 673 3,144
(Decrease) in creditors (3,294) (3,486) (292) (702)
(1,403) (2,704) 412 1,745
Copies of this report are available from the Company's registered office at
Paulton House, 8 Shepherdess Walk, London N1 7LB.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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