TIDMWIL
RNS Number : 2071C
Wilmington PLC
21 February 2022
21 February 2022
Wilmington plc
Strong organic revenue and profit growth
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 2021 (H1 FY22).
Financial performance
H1 FY22 H1 FY21 Change
Revenue GBP58.9m GBP55.1m 7%
--------- --------- -------
Adjusted PBT(1) GBP9.5m GBP7.0m 35%
--------- --------- -------
Adjusted basic EPS(2) 8.60p 6.44p 34%
--------- --------- -------
Interim dividend 2.4p 2.1p 14%
--------- --------- -------
Statutory PBT incl. GBP24.6m GBP5.5m
AMT sale
Statutory basic
EPS 26.14p 5.05p
--------- ---------
Highlights
- Organic(3) revenue growth 12% driven by the acceleration of
digitalisation programme and return of face-to-face events to
pre-pandemic levels
o Information & Data delivered 10% organic growth; Training
& Education delivered 15% organic growth
o Excluding face-to-face events, organic revenue growth of
6%
- H1 FY22 revenue exceeded pre-Covid H1 FY20 and H1 FY19 for
retained businesses with profits materially ahead
- H1 FY22 Group adjusted profit margins improved to 16% (H1 FY21: 13%)
- Strategic sale of AMT in December 21 for GBP23.4m
- Robust balance sheet position with Group net cash(4) at 31 Dec
21 of GBP11.0m (31 Dec 20: net debt: GBP23.2m; 30 Jun 21: net debt:
GBP17.2m)
- Significant progress made in establishing single technology platforms for each division
- Increasingly strong outlook
Mark Milner, Chief Executive Officer, commented:
"We continue to deliver on our strategy and are now seeing the
results of the Group's repositioning and redirection, the
acceleration of our digitalisation programme and investment in new
products over the last two years.
"This has led to double-digit organic revenue growth,
significant profitability improvement and strong cash conversion.
Both divisions and our teams are performing strongly. Revenues and
profits are now ahead of the pre-Covid periods.
"As we stated on 27 January 2022, trading in the current
financial year is ahead of our earlier expectations. If the major
face-to-face events happen in March as expected, we anticipate our
profitability to improve still further."
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
1 Adjusted profit before tax - see note 4
2 Adjusted basic earnings per share - see note 6
3 Organic - eliminating the effects of exchange rate
fluctuations and the impact of acquisitions and disposals
(4) Net cash includes cash and cash equivalents, bank loans
(excluding capitalised loan arrangement fees) and bank overdrafts
but excludes lease liabilities
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
Our strong performance in H1 FY22 demonstrates the value of our
diversified portfolio and focus on the GRC and Regulatory
Compliance markets, with growth driven by our agile teams and the
resilience that this diversity and business model has brought over
the past two years. Demand for our products remains strong with our
customers continuing to rely on us to help them operate
successfully.
Revenue of GBP58.9m was up 7%. Organic revenue growth was 12%,
adjusted for the closure and disposal of discontinued businesses
and the minor impact of currency movements. Excluding face-to-face
events, we saw organic revenue growth of 6%.
This growth was driven by the acceleration of our digitalisation
programme, the investment in new products over the last two years
and the return to face-to-face events.
The Information & Data division achieved 10% organic revenue
growth (5% total revenue growth) with the Training & Education
division achieving organic revenue growth of 15% (10% total revenue
growth). All our businesses grew organically in the first half.
14% of our ongoing revenues are in US dollars, 12% in Euros and
3% in Singapore Dollars, no other currency other than Sterling is
material.
H1 FY22 revenue exceeded both pre-Covid periods H1 FY20 and H1
FY19 on a like-for-like basis with profits being materially
ahead.
Adjusted profit before tax of GBP9.5m (H1 FY21: GBP7.0m) was up
35% and up 42% organically. Costs have increased due to the
anticipated increase in staff costs and the return of some
face-to-face delivery costs, mainly venue hire and some increased
travel. Despite the expected cost increases, adjusted pre-tax
profit margins improved to 16% (H1 FY21: 13%).
Operating cash conversion remained strong at 113%, with net cash
of GBP11.0m (30 June 2021: net debt GBP17.2m) following proceeds
from the sale of the AMT financial training business in December
for GBP23.4m. Net cash including lease liabilities was GBP1.0m.
Remaining debt was repaid in early January 2022.
The interim dividend is being increased by 14% to 2.4p (H1 FY21:
2.1p) and will be paid on 6 April 2022 to shareholders on the share
register as at 4 March 2022, with an associated ex-dividend date of
3 March 2022.
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 businesses.
Our investment focus is on establishing single technology
platforms for each division. This supports our digital-first
approach and will enable the Group to grow organically and by
acquisition more efficiently which will ensure we continue to
maintain high margin levels.
In the Training & Education division we have established the
Digital Hub in ICA, rolled out the solution to Bond Solon and are
now moving the Accountancy training business onto the platform over
the next 12 months. In the Information & Data division, we have
begun to establish a single data platform for all our lines of
business based around Snowflake(R) technology and expect this
project to roll out over the next two years.
Our first virtual classroom went live in March 2021 and is
helping us continue to achieve high levels of innovative digital
delivery in training and education products.
Further investments in sales and product management academy roll
outs have started to deliver returns in revenue growth as has an
increased focus on pricing and packaging. We have successfully
increased the number of multi-year subscription contracts in the
first half as a result of this.
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.
In December 2021, we sold AMT Training to Train The Street, LLC
for an enterprise value of GBP23.4m, subject to customary working
capital adjustments. The cash received leaves us with a net cash
position. As previously announced, we continue to seek a buyer for
our Spanish insurance business, Inese.
We intend to use our cash resources and our GBP65m bank facility
to acquire suitable GRC businesses to add further growth and
profitability to the Group. We will continue to apply high levels
of scrutiny in respect of target identification and multiples paid.
We are clear in our ambition but also clear in the characteristics
we will seek in any business we look to acquire. The ability to
drive value and growth for Wilmington shareholders will always be a
key priority.
Current trading and outlook
We continue to derive considerable benefits from our diversified
portfolio as well as the investment we have made in product
development and digitalisation over the past two years. In addition
to driving organic growth, we have continued to improve
margins.
Provided we can continue to run events face-to-face, we expect
an additional boost to profitability in H2 FY22. If not, we still
expect profits and revenues to be higher than last year despite the
sale of AMT.
ESG
The delivery of our strategy is supported by our ongoing
commitment to responsible business practice, which echoes our
commitment to help customers to do the right business in the right
way.
A core component of our ESG strategy is to promote an open and
inclusive culture in which employee feedback guides our decisions.
During the period we responded to key issues raised by our
colleagues and had a 91% participation rate in the recently
completed annual engagement survey.
We continued to enhance our well-established employee wellbeing
programmes and formalised our Diversity & Inclusion strategy
with a clear roadmap for action. We also used our latest engagement
survey to capture richer data that will help us to demonstrate
progress against our diversity, wellbeing and employee development
ambitions.
In September 2021, we committed to becoming carbon neutral in
FY22. We have achieved this goal already. We have supported high
quality certified carbon reduction and storage programmes to offset
almost double the scope 1, 2 and 3 emissions reported in respect of
FY21.
In H1 FY22, we have completed a more detailed scope 3 emissions
inventory, which will facilitate our work in the second half to set
net zero targets in line with a 1.5-degree trajectory. We are
currently implementing the strategic element of the TCFD
recommendations as an integral component of our annual business
planning process.
Divisional and Financial Review
Information & Data
H1 FY22 H1 FY21 Absolute Organic
Variance Variance
Revenue GBP'm GBP'm
Healthcare 15.9 13.9 14% 16%
Financial Services
& other 10.5 10.3 1% 4%
Identity &
Charities 2.4 2.4 3% 3%
Discontinued 0.3 1.2 (78%)
Total 29.1 27.8 5% 10%
Operating
profit 5.6 4.4 28% 32%
Margin 19% 16%
Revenues in the Information & Data division were up 10% on
an organic basis.
This strong performance was driven by Healthcare which
benefitted from the return to face-to-face events and good growth
in HSJ subscriptions. Financial Services achieved solid organic
growth, again from subscriptions. Identity & Charities achieved
growth despite restructuring initiatives impacting the first
half.
Profitability in the division materially improved, particularly
in Healthcare where revenue growth and cost reductions will combine
in H2 to drive towards a margin target in excess of 20%.
Training & Education
H1 FY22 H1 FY21 Absolute Organic
Variance Variance
Revenue GBP'm GBP'm
Global 11.4 11.2 2% 3%
UK & Ireland 11.7 9.9 17% 18%
North America 2.6 1.5 74% 81%
Discontinued 4.1 4.7 (11%)
Total 29.8 27.3 10% 15%
Operating profit 7.1 5.9 20% 27%
Margin 24% 22%
Revenues grew 15% organically, led by a strong performance in
North America where the return to face-to-face events has boosted
revenues by 81%.
UK and Ireland also had a strong six months with both
Accountancy and Legal seeing double-digit growth due to increased
customer demand. Accountancy revenues are still recovering to
pre-pandemic levels and so the comparative was weak but Legal is
now a much bigger business than it was pre-pandemic.
Global is now mostly ICA following the sale of AMT. UK growth
offsets a decline in Singapore following a very strong FY21.
The increase in the division's revenue was accompanied by an
increase in costs as face-to-face events brought a return of venue
hire and travel costs. However, we have maintained a much higher
proportion of digital training delivery volumes compared to the
pre-pandemic period, resulting in higher margins.
Amortisation excluding computer software, impairment charge and
other income
Amortisation of intangible assets (excluding computer software)
was GBP1.2m (H1 FY21: GBP1.7m), the fall driven by some historic
assets becoming fully amortised. The impairment charge of GBP0.6m
relates to a long leasehold building in Sutton Coldfield we have
been unable to sell since vacating it two years ago. Other income
represents the net gain of GBP16.1m from the sale of AMT Training
and GBP0.8m from the sale of buildings in Basildon linked to our
office consolidation programme.
Finance costs
Net finance costs fell to GBP0.6m (H1 FY21: GBP0.8m) driven
primarily by lower net debt levels. Non-utilisation fees on the
banking facility will mean smaller finance costs will persist in
the second half of the financial year.
Profit before taxation and Earnings per Share
The increase in revenue, improved profit margins and the large
gain on the sale of AMT have resulted in a profit before tax of
GBP24.6m (H1 FY21: GBP5.5m). Earnings per share measures improved
for the same reasons.
Taxation
The tax charge is GBP1.7m (H1 FY21: GBP1.1m) with an overall
effective tax rate(5) of 7% compared to 20% in the prior period.
The fall in effective tax rate was due to the gain on sale of AMT
not being subject to corporation tax. The underlying tax rate(6)
which ignores the tax effects of adjusting items remained flat at
20% (H1 FY21: 20%).
Balance sheet and cashflow
Balance sheet movements are explained by the sale of AMT and
trading in the period, as well as the sale of buildings in Basildon
and the impairment of a long leasehold property in Sutton
Coldfield. Cash generation improved on the prior period due to the
improved trading performance despite the return of dividend
payments.
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
Consolidated Income Statement
Year
Six months Six months
ended ended ended
31 December 31 December 30 June
2021 2020 2021
(unaudited) (unaudited) (audited)
Notes GBP'000 GBP'000 GBP'000
Continuing operations
Revenue 5 58,945 55,071 113,027
Operating expenses before amortisation of
intangibles excluding computer software,
impairment and adjusting items (48,921) (47,282) (96,378)
Impairment of goodwill, intangible assets
and property, plant and equipment 4 (597) - (14,834)
Adjusting items 4 22 (580) (2,970)
Amortisation of intangible assets excluding
computer software 4 (1,183) (1,700) (3,400)
------------------------------------------------ ----- ------------ ----------------- ----------
Operating expenses (50,679) (49,562) (117,582)
Other income - net gain on office consolidation 4 758 - -
Other income - gain on disposal of business
operations 4 - - 3,394
Other income - gain on disposal of subsidiary 7 16,115 770 770
Operating profit/(loss) 25,139 6,279 (391)
Net finance costs (551) (783) (1,634)
Profit/(loss) before tax 4 24,588 5,496 (2,025)
Taxation (1,687) (1,073) (2,522)
------------ ----------------- ----------
Profit/(loss) for the period attributable
to owners of the parent 22,901 4,423 (4,547)
------------ ----------------- ----------
Earnings/(loss) per share:
Basic (p) 6 26.14 5.05 (5.18)
Diluted (p) 6 25.92 5.03 (5.18)
------------ ----------------- ----------
Consolidated Statement of Comprehensive Income
Six months Six months Year
ended ended ended
31 December 31 December 30 June
2021 2020 2021
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Profit/(loss) for the period 22,901 4,423 (4,547)
Other comprehensive income/(expense):
Items that may be reclassified subsequently
to the Income Statement
---------------------------------------------- ------------- ------------- ----------
Fair value movements on interest rate swap,
net of tax 389 (113) 93
Currency translation differences 341 (1,460) (1,732)
Net investment hedges, net of tax (164) 683 762
---------------------------------------------- ------------- ------------- ----------
Other comprehensive income/(expense) for
the period, net of tax 566 (890) (877)
------------- ------------- ----------
Total comprehensive income/(expense) for
the period attributable to owners of the
parent 23,467 3,533 (5,424)
------------- ------------- ----------
Items in the statement above are disclosed net of tax.
Consolidated Balance Sheet
31 December 31 December 30 June
2021 2020 2021
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Non-current assets
Goodwill 59,912 76,705 65,833
Intangible assets 12,986 17,711 14,000
Property, plant and equipment 7,909 15,826 9,277
Deferred consideration receivable 1,516 1,750 1,585
Derivative financial instruments 537 - 57
Deferred tax assets 1,233 1,244 1,364
84,093 113,236 92,116
------------ ------------ ----------
Current assets
Trade and other receivables 25,904 23,640 28,698
Deferred consideration receivable 250 483 250
Current tax asset 238 1,072 312
Derivative financial instruments - 367 -
Cash and cash equivalents 24,160 7,905 7,374
Assets held for sale - - 1,588
------------ ------------ ----------
50,552 33,467 38,222
------------ ------------ ----------
Total assets 134,645 146,703 130,338
------------ ------------ ----------
Current liabilities
Trade and other payables (51,561) (54,476) (54,959)
Lease liabilities (2,243) (2,571) (2,356)
Derivative financial instruments (125) (198) -
Borrowings - - (3,644)
Provisions (307) - (461)
(54,236) (57,245) (61,420)
Non-current liabilities
Borrowings (12,734) (30,400) (20,430)
Lease liabilities (7,750) (9,288) (8,386)
Deferred tax liabilities (1,762) (2,346) (2,054)
Provisions (1,381) - (1,381)
(23,627) (42,034) (32,251)
------------ ------------ ----------
Total liabilities (77,863) (99,279) (93,671)
------------ ------------ ----------
Net assets 56,782 47,424 36,667
------------ ------------ ----------
Equity
Share capital 4,380 4,380 4,380
Share premium 45,225 45,225 45,225
Treasury and ESOT reserves (960) (453) (701)
Share based payments reserve 1,736 1,419 1,390
Translation reserve 2,410 2,341 2,069
Retained earnings/(accumulated losses) 3,991 (5,488) (15,696)
------------ ------------ ----------
Total equity 56,782 47,424 36,667
------------ ------------ ----------
Consolidated Statement of Changes in Equity
Share capital,
share premium, Share Retained
treasury based earnings/
shares and payments Translation (accumulated Total
ESOT shares reserve reserve losses) equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 30 June 2020 (audited) 49,015 1,195 3,801 (10,605) 43,406
Profit for the period - - - 4,423 4,423
Other comprehensive (expense)/income
for the period - - (1,460) 570 (890)
---------------- ---------- -------------- --------------- ---------
49,015 1,195 2,341 (5,612) 46,939
Performance share plan awards
vesting settled via ESOT 137 (241) - 104 -
Share based payments - 465 - - 465
Tax on share based payments - - - 20 20
At 31 December 2020 (unaudited) 49,152 1,419 2,341 (5,488) 47,424
Loss for the period - - - (8,970) (8,970)
Other comprehensive income/(expense)
for the period - - (272) 285 13
49,152 1,419 2,069 (14,173) 38,467
Dividends paid - - - (1,829) (1,829)
ESOT share purchases (263) - - - (263)
Sale of treasury shares 15 - - - 15
Share based payments - (29) - - (29)
Tax on share based payments - - - 306 306
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
---------------- ---------- -------------- --------------- ---------
Consolidated Cash Flow Statement
Six months ended Year ended
Six months ended 31 December 2021 31 December 2020 30 June 2021
(unaudited) (unaudited) (audited)
Notes GBP'000 GBP'000 GBP'000
Cash flows from operating
activities
Cash generated from operations
before adjusting items 9 11,374 9,203 17,290
Cash flows for adjusting items -
operating activities (31) (302) (339)
Cash flows from tax on share based
payments (4) (5) 9
---------------------------------- ------------------ --------------
Cash generated from operations 11,339 8,896 16,960
Interest paid (302) (763) (1,196)
Tax paid (1,805) (1,169) (2,697)
---------------------------------- ------------------ --------------
Net cash generated from operating
activities 9,232 6,964 13,067
---------------------------------- ------------------ --------------
Cash flows from investing
activities
Disposal of a subsidiary 21,875 400 400
Disposal of business operations - - 4,144
Deferred consideration received 125 - 250
Cash flows for adjusting items -
investing activities (92) (43) (151)
Purchase of property, plant and
equipment (275) (455) (1,047)
Proceeds from disposal of property,
plant and equipment 3,439 7 103
Purchase of intangible assets (988) (1,422) (1,969)
---------------------------------- ------------------ --------------
Net cash generated from/(used in)
investing activities 24,084 (1,513) 1,730
---------------------------------- ------------------ --------------
Cash flows from financing
activities
Dividends paid to owners of the
parent (3,399) - (1,829)
Payment of lease liabilities (1,095) (1,285) (2,530)
Purchase of shares by ESOT (371) - (263)
Fees paid relating to new and
extended loan facility (5) (215) (191)
Increase in bank loans - 1,000 2,000
Decrease in bank loans (8,000) (18,181) (29,181)
Net cash used in financing
activities (12,870) (18,681) (31,994)
---------------------------------- ------------------ --------------
Net increase/(decrease) in cash and
cash equivalents, net of bank
overdrafts 20,446 (13,230) (17,197)
Cash and cash equivalents, net of
bank overdrafts, at beginning of
the period 3,730 21,426 21,426
Exchange losses on cash and cash
equivalents (16) (291) (499)
---------------------------------- ------------------ --------------
Cash and cash equivalents, net of
bank overdrafts at end of the
period 24,160 7,905 3,730
---------------------------------- ------------------ --------------
Reconciliation of net cash/(debt)
---------------------------------- ------------------ --------------
Cash and cash equivalents at
beginning of the period 7,374 21,426 21,426
Bank overdrafts at beginning of the - -
period (3,644)
Bank loans at beginning of the
period (20,960) (49,082) (49,082)
Lease liabilities at beginning of
the period (10,742) (13,121) (13,121)
---------------------------------- ------------------ --------------
Net debt at beginning of the period (27,972) (40,777) (40,777)
Net increase/(decrease) in cash and
cash equivalents (net of bank
overdrafts) 20,430 (13,521) (17,696)
Net repayment in bank loans 8,000 17,181 27,181
Exchange (loss)/gain on bank loans (202) 842 941
Movement in lease liabilities 749 1,262 2,379
---------------------------------- ------------------ --------------
Cash and cash equivalents at end of
the period 24,160 7,905 7,374
Bank overdrafts at end of the
period - - (3,644)
Bank loans at end of the period (13,162) (31,059) (20,960)
Lease liabilities at end of the
period (9,993) (11,859) (10,742)
---------------------------------- ------------------ --------------
Net cash/(debt) at end of the
period 1,005 (35,013) (27,972)
---------------------------------- ------------------ --------------
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, training
and education to the professional markets.
This condensed consolidated interim financial information
('Interim Information') was approved for issue by the Board of
Directors on 18 February 2022.
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 2021 were approved by the Board of Directors on 17 September
2021 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
2021 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 2021 which have been prepared
in accordance with IFRSs applicable to companies reporting under
IFRS, adopted pursuant to Regulation (EC) No 1606/2002 as it
applies in the European Union and international accounting
standards in conformity with the requirements of the Companies Act
2006, 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 2021.
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 31 to 37 of the
strategic report in the Annual Report and Financial Statements for
the year ended 30 June 2021.
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 goodwill, intangible assets and property, plant and equipment;
-- amortisation of intangible assets excluding computer software;
-- adjusting items;
-- other income - net gain on office consolidation;
-- other income - gain on disposal of business operations;
-- other income - gain on disposal of subsidiary; and
-- net finance costs.
Adjusted profit before tax, adjusted EBITA and adjusted EBITDA
reconcile to profit on continuing activities before tax as
follows:
Six months Six months
ended ended Year ended
31 December 31 December 30 June
2021 2020 2021
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
------------- -------------- -----------
Profit/(loss) before tax 24,588 5,496 (2,025)
Impairment of goodwill, intangible assets and
property, plant and equipment 597 - 14,834
Amortisation of intangible assets excluding
computer software 1,183 1,700 3,400
Adjusting items (22) 580 2,970
Other income - net gain on office consolidation (758) - -
Other income - gain on disposal of business
operations - - (3,394)
Other income - gain on disposal of a subsidiary (16,115) (770) (770)
Adjusted profit before tax 9,473 7,006 15,015
Net finance costs 551 783 1,634
------------- -------------- -----------
Adjusted operating profit ('adjusted EBITA') 10,024 7,789 16,649
Depreciation of property, plant and equipment
included in operating expenses 1,217 1,700 3,399
Amortisation of intangible assets - computer
software 784 1,064 2,416
------------- -------------- -----------
Adjusted EBITA before depreciation ('adjusted
EBITDA') 12,025 10,553 22,464
------------- -------------- -----------
The net gain on office consolidation included in adjusting items
is in respect of the exercise performed to consolidate the Group's
office space. Included in this amount is the gain on disposal of
two buildings and their associated assets on 31 August 2021.
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 Six months ended Year ended
31 December 31 December 30 June
2021 2020 2021
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
---------------- ---------------- ----------
Costs relating to the consolidation of office space - - 1,842
(Gain)/expense relating to strategic activities (22) 580 1,128
Adjusting items (22) 580 2,970
Impairment of goodwill, intangible assets and property, plant and
equipment 597 - 14,834
Amortisation of intangible assets excluding computer software 1,183 1,700 3,400
Total adjusting items (classified in profit before tax) 1,758 2,280 21,204
---------------- ---------------- ----------
The impairment of goodwill, intangible assets and property,
plant and equipment relates to:
Six months ended Six months ended Year ended
31 December 31 December 30 June
2021 2020 2021
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
---------------- ------------------------ ----------
Goodwill - - 9,873
Intangible assets - - 1,516
Property, plant and equipment 597 - 3,445
597 - 14,834
---------------- ------------------------ ----------
The impairment in the period 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.
5. Segmental information
In accordance with IFRS 8 the Group's operating segments are
based on the operating results reviewed by the 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 Information & Data) 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
Six months ended Year ended
Six months ended 31 December 2020 30 June 2021
31 December 2021 (unaudited) (unaudited) (audited)
------------------------------- ---------------------- ----------------------
Revenue Contribution Revenue Contribution Revenue Contribution
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------ ----------------- -------- ------------ -------- ------------
Training & Education 29,867 7,096 27,271 5,927 56,211 12,197
Information & Data 29,078 5,616 27,800 4,372 56,816 9,320
Group contribution 58,945 12,712 55,071 10,299 113,027 21,517
Unallocated central overheads - (2,152) - (1,981) - (4,302)
Share based payments - (536) - (529) - (566)
58,945 10,024 55,071 7,789 113,027 16,649
Impairment of goodwill, intangible
assets and
property, plant and equipment (597) - (14,834)
Amortisation of intangible assets
excluding computer software (1,183) (1,700) (3,400)
Adjusting items 22 (580) (2,970)
Other income - net gain on office
consolidation 758 - -
Other income - gain on disposal of
business operations - - 3,394
Other income - gain on disposal of a
subsidiary 16,115 770 770
Net finance costs (551) (783) (1,634)
Profit/(loss) before tax 24,588 5,496 (2,025)
Taxation (1,687) (1,073) (2,522)
----------------- ------------ ------------
Profit/(loss) for the financial
period 22,901 4,423 (4,547)
----------------- ------------ ------------
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 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 Six months Year
ended ended ended
31 December 31 December 30 June
2021 2020 2021
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
------------- ------------- ----------
UK 30,874 30,815 61,999
North America 10,431 6,208 15,042
Europe (excluding the UK) 11,922 11,444 23,304
Rest of the world 5,718 6,604 12,682
------------- ------------- ----------
Total revenue 58,945 55,071 113,027
------------- ------------- ----------
6. Earnings/(loss) per share
Adjusted earnings/(loss) per share has been calculated using
adjusted earnings calculated as profit/(loss) after taxation but
before:
-- impairment of goodwill, intangible assets and property, plant and equipment;
-- amortisation of intangible assets excluding computer software;
-- adjusting items;
-- other income - net gain on office consolidation;
-- other income - gain on disposal of business operations; and
-- other income - gain on disposal of subsidiary.
The calculation of the basic and diluted earnings per share is
based on the following data:
Six months Six months
ended ended Year ended
31 December 31 December 30 June
2021 2020 2021
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
------------- ------------- -----------
Earnings/(loss) from continuing operations
for the purpose of basic earnings per share 22,901 4,423 (4,547)
Add/(remove):
Impairment of goodwill, intangible assets and
property, plant and equipment 597 - 14,834
Amortisation of intangible assets excluding
computer software 1,183 1,700 3,400
Adjusting items (22) 580 2,970
Other income - net gain on office consolidation (758) - -
Other income - gain on disposal of business
operations - - (3,394)
Other income - gain on disposal of subsidiary (16,115) (770) (770)
Tax effect of adjustments above (253) (293) (558)
Adjusted earnings for the purposes of adjusted
earnings per share 7,533 5,640 11,935
------------- ------------- -----------
Number Number Number
------------- ------------- -----------
Weighted average number of ordinary shares
for the purpose of basic and adjusted earnings
per share 87,603,917 87,603,917 87,603,917
Effect of dilutive potential ordinary shares:
Future exercise of share awards and options 745,931 293,090 410,301
Weighted average number of ordinary shares
for the purposes of diluted earnings per share 88,349,848 87,897,007 88,014,218
------------- ------------- -----------
Basic earnings/(loss) per share 26.14p 5.05p (5.18p)
Diluted earnings/(loss) per share 25.92p 5.03p (5.18p)
Adjusted basic earnings per share ('adjusted
earnings per share') 8.60p 6.44p 13.62p
Adjusted diluted earnings per share 8.53p 6.42p 13.56p
------------- ------------- -----------
7. Disposal of subsidiary
On 24 December 2021 the Group disposed of its financial training
business, AMT with subsidiary companies in the UK, US and Hong Kong
for a consideration of GBP23.4m. A gain of GBP16.1m arose on
disposal after taking into account GBP0.4m costs of disposal. As at
the disposal date, the net assets of the AMT companies were
GBP6.9m.
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 FY21: GBP55,625) transactions with related
parties of key management personnel in the period.
9. Cash generated from operations
Six months Six months
ended ended Year ended
31 December 31 December 30 June
2021 2020 2021
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
------------- ------------- -----------
Profit/(loss) from continuing operations
before tax 24,588 5,496 (2,025)
Net gain on office consolidation (758) - -
Gain on disposal of business operations - - (3,394)
Gain on disposal of a subsidiary (16,115) (770) (770)
Adjusting items (22) 580 2,970
Depreciation of property, plant and equipment 1,217 1,700 3,399
Amortisation of intangible assets 1,967 2,764 5,816
Impairment of goodwill, intangible assets
and property, plant and equipment 597 - 14,834
(Profit)/loss on non-adjusting disposal of
property, plant and equipment (40) 1 2
Share based payments (including social security
costs) 536 529 566
Net finance costs 551 783 1,634
------------- ------------- -----------
Operating cash flows before movements in
working capital 12,521 11,083 23,032
Decrease/(increase) in trade and other receivables 2,905 2,319 (3,619)
Decrease in trade and other payables (3,898) (4,199) (2,123)
Decrease in provisions (154) - -
------------- ------------- -----------
Cash generated from operations before adjusting
items 11,374 9,203 17,290
------------- ------------- -----------
Cash conversion is calculated as a percentage of cash generated
by operations to adjusted EBITA as follows:
Year ended
Six months Six months
ended ended 30 June
31 December 31 December
2021 2020 2021
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
------------- -------------- -----------
Funds from operations before adjusting items:
Adjusted EBITA (note 4) 10,024 7,789 16,649
Share based payments (including social security
costs) 536 529 566
Amortisation of intangible assets - computer
software 784 1,064 2,416
Depreciation of property, plant and equipment
included in operating expenses 1,217 1,700 3,399
(Profit)/loss on disposal of property, plant
and equipment (40) 1 2
------------- -------------- -----------
Operating cash flows before movements in
working capital 12,521 11,083 23,032
Net working capital movement (1,147) (1,880) (5,742)
------------- -------------- -----------
Funds from operations before adjusting items 11,374 9,203 17,290
------------- -------------- -----------
Cash conversion 113% 118% 104%
------------- -------------- -----------
Free cash flows:
Operating cash flows before movement in
working capital 12,521 11,083 23,032
Proceeds on disposal of property, plant
and equipment 3,439 7 103
Net working capital movement (1,147) (1,880) (5,742)
Interest paid (302) (763) (1,196)
Payment of lease liabilities (1,095) (1,285) (2,530)
Tax paid (1,805) (1,169) (2,697)
Purchase of property, plant and equipment (275) (455) (1,047)
Purchase of intangible assets (988) (1,422) (1,969)
------------- -------------- -----------
Free cash flows 10,348 4,116 7,954
------------- -------------- -----------
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END
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February 21, 2022 02:00 ET (07:00 GMT)
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