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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Wilmington Plc | AQSE:WIL.GB | Aquis Stock Exchange | Ordinary Share | GB0009692319 | Ordinary Shares 5p |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 359.00 | 324.00 | 394.00 | 359.00 | 359.00 | 359.00 | 0.00 | 06:56:52 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2022 to Apr 2024
TIDMWIL
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
Hot Features
Premium
H1 FY23 H1 FY22 Change
Continuing results
[1]
--------- --------- -------
Revenue GBP56.0m GBP52.4m 7%
--------- --------- -------
Adjusted PBT [2] GBP8.9m GBP7.8m 14%
--------- --------- -------
Adjusted basic EPS
[3] 7.92p 7.02p 13%
--------- --------- -------
Interim dividend 2.70p 2.40p 13%
--------- --------- -------
Statutory results
--------- ---------
Revenue GBP57.4m GBP58.9m
--------- ---------
PBT incl. disposals GBP10.0m GBP24.6m
--------- ---------
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 GBP8.9m up 14% -- Strategic disposal of Inese in December 2022
-- Robust balance sheet - net cash [4] at 31 December 2022 of GBP22.9m (31 Dec 21: GBP11.0m; 30 Jun 22: GBP20.5m)
-- 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 020 7422 6800 Guy Millward, Chief Financial Officer Meare Consulting Adrian Duffield 07990 858548
Notes to Editors
Wilmington plc is the recognised knowledge leader and partner of choice for data, information, education and training in the global Governance, Risk and Compliance (GRC) markets. Wilmington employs close to 1,000 people and sells to around 120 countries. Wilmington is listed on the main market of the London Stock Exchange.
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 GBP56.0m with organic revenue growth of 4%, after removing the impact of currency movements. Reported revenue including business sold over the last 18 months was GBP57.4m (H1 FY22: GBP58.9m).
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 GBP8.9m (H1 FY22: GBP7.8m) 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 GBP22.9m (30 June 2022: GBP20.5m).
The Group's Spanish business, Inese, as planned was sold in December 2022 for GBP2.6m. 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(R) 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 H1 FY22 Absolute Organic
GBP'm GBP'm Variance 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 (12%)
---------------------- -------- -------- ---------- ----------
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 GBP1.5m 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 H1 FY22 Absolute Organic
GBP'm GBP'm Variance 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 GBP2.2m from the disposal of Inese in December 2022 (H1 FY22: GBP16.1m from the disposal of AMT).
Net finance income was achieved for the first time (H1 FY22: GBP0.6m 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 GBP8.9m (H1 FY22: GBP7.8m) with profit before tax at GBP10.0m (H1 FY22: GBP24.6m). H1 FY22 profit before tax included GBP16.1m profit on disposal of AMT.
Taxation
The tax charge is GBP1.8m (H1 FY22: GBP1.7m) 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 GBP16.1m 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 H1 FY22
GBP'm GBP'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 GBP22.9m (30 June 2022: GBP20.5m). The proceeds from the disposal of Inese were received in January 2023.
Consolidated Income Statement
Year
ended
Six months Six months
ended ended 30 June
31 December 31 December
2022 2021 2022
(unaudited) (unaudited) (audited)
Notes GBP'000 GBP'000 GBP'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 Six months Year
ended ended ended
31 December 31 December 30 June
2022 2021 2022
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'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 31 December 30 June
2022 2021 2022
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'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, 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 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 Six months ended Year ended
2022 31 December 2021 30 June 2022
(unaudited) (unaudited) (audited)
Notes GBP'000 GBP'000 GBP'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 Six months
ended ended Year ended
31 December 31 December 30 June
2022 2021 2022
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'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 Six months ended Year ended
31 December 31 December 30 June
2022 2021 2022
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'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) 1,253 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 Six months ended 31 December 2021 Year ended 30 June 2022
(unaudited) (unaudited) (audited)
----------------------- ------------------------------------ ----------------------------------- -------------------------
Revenue Contribution Revenue Contribution Revenue Contribution
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'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 Six months
ended ended Year ended
31 December 31 December 30 June
2022 2021 2022
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'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 Six months
ended ended Year ended
31 December 31 December 30 June
2022 2021 2022
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'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 GBP2.6m, net cash consideration of GBP1.9m, including GBP0.4m deferred for one year. The disposal was executed by way of the sale of 100% of the equity shares. A gain of GBP2.2m arose on disposal after taking into account GBP0.4m costs of disposal. As at the disposal date, the net assets of Inese were GBP0.2m. 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: GBPnil) 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
2022 2021 2022
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'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 Six months Year
ended ended ended
31 December 31 December 30 June
2022 2021 2022
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'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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