REG - Wilmington PLC - Financial results for the year ended 30 June 2024
16/09/2024 07:00
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RNS Number : 2203E Wilmington PLC 16 September 2024
16 September 2024
Wilmington plc
Sustained double digit profits 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 unaudited preliminary
results for the year ended 30 June 2024. The results are unaudited because the
auditors have requested extra time to complete their final audit procedures.
Financial performance
2024 2023 Change
Ongoing results 1 (#_ftn1)
Revenue £89.7m £78.7m 14%
Adjusted PBT 2 (#_ftn2) £24.1m £16.9m 42%
Adjusted PBT margin 26.8% 21.5% 25%
Adjusted basic EPS 3 (#_ftn3) 19.81p 14.02p 41%
Total results
Net cash 4 (#_ftn4) £67.8m £42.2m 61%
Total dividend 11.3p 10.0p 13%
Total adjusted PBT £27.6m £24.3m 13%
Total adjusted PBT margin 22% 20% 11%
Total basic EPS 46.32p 22.94p 102%
Statutory continuing results
Revenue £98.3m £93.1m 6%
PBT £24.2m £20.5m 17%
Basic EPS 19.33p 19.51p (1%)
Highlights
· 14% revenue growth from ongoing businesses. Organic growth of
9%(1). All ongoing businesses grew.
· Annual recurring revenues up 16%, now 36% (2023: 33%) of Group
organic revenues, despite the sale of subscription-heavy businesses.
· Adjusted profit before tax from ongoing businesses up 42% to
£24.1m (2023: £16.9m). Total adjusted profit before tax of £27.6m (2023:
£24.3m).
· Total adjusted PBT margin up to 22% from 20%. Operating margins
of ongoing businesses continue to increase.
· Dividend increased by 13% to final dividend of 11.3p.
· Robust balance sheet with net cash at 30 June 2024 £67.8m (2023:
£42.2m) reflecting strong trading performance and cash conversion as well as
the net cash received from portfolio changes.
· Continued to enhance and streamline portfolio with acquisition of
Astutis, and disposals of European Healthcare & MiExact businesses.
· Investment in the development of single technology platform for
the whole business.
Mark Milner, Chief Executive Officer, commented:
"We have delivered another strong year, in line with our strategy with notably
strong increases in revenues, profits and cash generation. Margins have also
continued to improve strongly.
"We continued to focus on consolidating our already strong presence in the
large, growing and rapidly evolving international GRC markets and
significantly enhanced our capabilities with the acquisition of Astutis in the
Health, Safety and Environment (HSE) sector. We sold our European Healthcare
businesses and MiExact.
"We now have a higher quality portfolio of growing international businesses
and continue to pursue various opportunities to invest in acquisitions to
improve our growth and profitability. We have also started to transfer our
businesses onto our single operating platform, which will continue to improve
our performance.
"We have had a good start to the current financial year, with revenues and
profits in line with expectations."
The information contained within this announcement is deemed to constitute
inside information as stipulated under the Market Abuse Regulations (EU) No.
596/2014. Upon the publication of this announcement this inside information is
now considered to be in the public domain.
For further information, please contact:
Wilmington plc 020 7490 0049
Mark Milner, Chief Executive Officer
Guy Millward, Chief Financial Officer
Meare Consulting 07990 858548
Adrian Duffield
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 over 600 people and sells to
around 120 countries. Wilmington is listed on the main market of the London
Stock Exchange.
CEO's review
Overview
We are pleased to report another year of good progress and delivering on our
strategy with notably strong increases in revenues, profits and cash
generation. We continued to focus our portfolio of businesses on the
international Governance, Risk and Compliance (GRC) markets and significantly
enhanced our capabilities with the acquisition of Astutis in the Health,
Safety and Environment (HSE) sector. We sold our European Healthcare
businesses and MiExact.
We also continued to invest in our operational growth levers, sales,
marketing, product development and have moved decisively towards running all
our operations on a single platform, by merging the previous platforms built
for training and data operations. During the year, following the disposal of
the businesses that made up the majority of our Intelligence division, we have
reorganised our segmental reporting around the external markets addressed by
our brands from Training & Education and Intelligence to HSE, Legal and
Financial Services.
Results
For the year ending 30 June 2024, the Group saw overall organic revenue growth
of 9%, with solid growth from all our ongoing businesses. We also achieved 16%
growth in Group recurring revenues, making up 36% of total revenues (2023:
33%). We have achieved organic revenue growth every year in the last four
financial years.
The increased revenues and a continued focus on operational efficiency
resulted in total adjusted PBT growth of 13% to £27.6m (2023: £24.3m) and a
corresponding improvement in adjusted PBT margin to 22% (2023: 20%). We have
also achieved this profit growth over the last four years, despite selling or
closing seven of the 15 businesses in the Group in 2020.
Profits from underlying operations (excluding the Astutis acquisition) were up
35%, driven by strong trading in our Financial Services businesses and net
interest income on our cash of £2.0m. This resulted in underlying adjusted
basic earnings per share being up 33%, which in turn has allowed us to propose
an increase in dividend to a final dividend of 8.3p (total of 11.3p).
Statutory revenue was up 6% to £98.3m (2023: £93.1m). Statutory PBT was up
17% to £24.2m (2023: £20.5m). Total Basic EPS increased to 46.32p (2023:
22.94p).
The Group again strengthened its balance sheet, increasing its net cash
position (excluding lease liabilities & including cash held for sale) to
£67.8m (2023: £42.2m) after another strong year of converting profits to
cash as well as the net cash received from portfolio changes. We have also
significantly reduced our future lease liabilities by downsizing office
footprints, including exiting our London offices. This will provide
significant cost savings going forward and better complement our hybrid
working policy, which has resulted in a need for far less office space.
Strategy
Our strategy is delivering, so there is no change here. We continued to focus
on consolidating our already strong presence in the large, growing and rapidly
evolving international GRC markets. These markets are underpinned by strong
macro drivers, particularly the increasing volume and enforcement of
regulation, complex geopolitical landscape, increased importance of ESG and
widespread adoption of technological and data-driven compliance solutions, all
of which align strongly to Wilmington's core offering.
At the heart of this focus on the GRC markets is our ambition to help our
customers to do the right business in the right way, by providing a
complementary range of information & data and training & education
solutions. Our businesses focus on the financial services, legal and HSE
markets. We are looking to acquire further businesses in these and
complementary sectors.
Portfolio update
In November 2023, we completed the acquisition of Astutis, a training business
offering a range of globally recognised and regulated health, safety and
environmental qualifications, based in Cardiff. The business has achieved
strong growth in the growing HSE market and is highly complementary to our
existing portfolio. The acquisition of Astutis is consistent with our strategy
in the GRC market to broaden and strengthen our training and education
capabilities.
We continue to review all parts of the Group assessing businesses against six
key characteristics: organic growth opportunities; attractive markets; digital
and data capabilities; strong leadership; strategic fit to the GRC
marketplaces; and attractive product, revenue, and profitability
characteristics.
As part of this ongoing review, we determined that our Healthcare, Compliance
Week and MiExact businesses no longer met our criteria. MiExact, a UK
mortality data business, and the European Healthcare business were sold during
the year, Compliance Week is in a sale process. We also closed our operations
in Singapore and Malaysia due to continuing declining revenues, ongoing losses
and little prospect of recovery given the local market conditions. We now
serve the Singapore and Malaysia markets from the UK.
We continue to seek businesses to join the Group, with a highly active but
disciplined M&A function exploring many options. To date, we have
identified numerous businesses which meet our required characteristics.
However, valuation expectations continue to remain high and we continue to
take a very disciplined approach. Our priority is to allocate the capital
available to us, including our cash balance, cash we generate from our
profitable operations, and our borrowing capability, to acquisitions in the
next two years.
Investment
Our investment approach across the Group continues to be targeted at embedding
the unique characteristics that define our competitive advantage into each of
our brands. We are pleased with the progress we have made in developing a
single technology platform for our businesses, by merging our previous
platform investments and removing more of our legacy technology debt. We have
more work to do to achieve a single platform for everything we do but the
building blocks are in place and should deliver operational efficiencies in
FY25 as expected. The implementation of a single platform will also allow us
to efficiently expand our offering by creating a scalable portfolio to enhance
our growth potential.
We continue to invest organically in new products and strengthen our existing
product offerings, with the scope to monetise our solutions greatly enhanced
by our single platform approach. This strategy for maximising the value of our
technology and data assets, combined with our streamlined operating model,
provides the strong base to actively consider acquisition targets which
complement and/or extend our capabilities.
We reported last year that within the strategic framework of Wilmington,
deliberate measures are being put into action to navigate the risks that
accompany AI technology while simultaneously harnessing its opportunities.
Work continues to mitigate risks and incorporate AI into our products.
We also remain focused on investing in the many drivers of employee
engagement, which increased year on year as measured by our annual engagement
survey. Development is actioned by activities such as regular Town Halls, the
building and support of communities, and development of Working Groups to
focus on keys areas such as diversity and inclusion, reward strategies, talent
development and others.
Responsible business
We are committed to investing in the initiatives that support our colleagues
and our own responsible business culture.
We continue to make significant progress with our People Strategy. Our people
make our business, and our continued success in this financial year is down to
their hard work, ingenuity, skills and expertise, and I thank everyone for
their commitment to Wilmington.
We have achieved progress against our targets in all four areas of our
sustainability strategy, and this work continues to underpin our broader
strategic objectives and risk management processes. Full details of this work
can be found in our Sustainability report.
We implemented the Taskforce for Climate-related Financial Disclosures (TCFD)
recommendations in full two years ago, while still putting together some
further detail on the metric requirements. We concluded that we must continue
to monitor the impacts of climate change on the Group's risk profile, but that
the potential opportunities that may arise from the transition to a low-carbon
economy are well aligned to our core offering. We have committed to net-zero
carbon targets, with an ambition of absolute zero, producing no greenhouse gas
emissions, in respect of Scope 1 and 2 emissions by 2028, and net zero in
respect of Scope 3 emissions by 2045.
Review of operations
2024 2023 Absolute variance Organic variance 5 (#_ftn5)
£'m £'m % %
Revenue
HSE 6 (#_ftn6) 4.8
Legal 7 (#_ftn7) 16.0 14.0 14% 14%
Insurance 28.8 27.8 3% 6%
Other 40.1 36.9 9% 9%
Financial Services 8 (#_ftn8) 68.9 64.7 6% 7%
Ongoing revenue 89.7 78.7 14% 9%
Ongoing operating profit 28.1 21.9 28% 24%
Margin % 31% 28%
Total revenue 9 (#_ftn9) 126.0 123.5 2%
Total operating profit 31.6 29.3 8%
Group performance
Revenues from ongoing businesses grew 14%, 9% excluding currency gains and the
Astutis acquisition. All eight of the ongoing businesses grew organically and
recurring subscription revenues grew 16%.
Astutis features for the first time so has no variances on last year, and the
numbers are for a partial year. The business grew significantly on its prior
year performance.
Group operating profits improved by 24% organically and operating margins for
ongoing businesses increased to 31% on the back of the revenue increases and
continued cost improvements.
Segmental reporting
Following the acquisition of Astutis, a training business in the HSE sector
and the disposal of the European Healthcare and MiExact businesses and the
decision to sell Compliance Week, which together made up the majority of what
was previously our Intelligence Division, we have reorganised our segmental
reporting around the external markets addressed by our brands.
HSE
The HSE segment comprises Astutis, acquired in November 2023. Astutis is a UK
training business which mixes face-to-face and online learning for various
industry standard qualifications and certificates in the HSE sector. The
business has experienced strong growth in recent years after switching focus
to more online training post-Covid and has a strong market position in a
growing marketplace.
Legal
The Legal segment comprises Bond Solon and Pendragon, whose customers are
predominantly in the legal market. Bond Solon is mainly UK based and trains
individuals involved in the legal system, including lawyers, helping them
train their clients for interaction with the legal system. Revenue is earned
through one off course attendance fees. Courses are typically single or half
day events, and content is a mix of owned and third-party intellectual
property. Courses are delivered either by in-house experts or a network of
independent tutors who are paid per course. The Law for Non-Lawyers market is
strong, with good ongoing demand for existing products as well as successful
launches of new training courses.
Pendragon operates in the UK pensions market, providing information products
and services with revenues generated primarily through subscription.
Legal revenues grew 14% organically, led by Bond Solon which had a significant
contract win in the public sector to give it a second consecutive year of
double-digit revenue growth. Pendragon had a strong year for subscription
revenue growth and again achieved very strong customer retention (99%).
Financial Services
Financial Services Insurance comprises Axco and FRA. Axco provides a broad
range of information products and services with revenues generated primarily
through subscription, and customers are spread globally.
FRA is predominantly events based. It serves the US Healthcare and Health
Insurance markets and, to a lesser extent, the US financial and legal service
communities. The prime brand is the RISE series of events that addresses the
Medicare and Medicaid markets and is attended by health plans, physician
groups and solution partners. The flagship event is RISE National which
normally takes place in March each year. Revenue from the US events is
generated from both sponsorship and delegate sales.
Financial Services Insurance revenues grew 6% overall. Axco grew revenues by
7%, excluding currency gains, and had a strong year for subscription revenue
growth. Recurring revenue retention rates were at 99%. FRA revenues were flat
in sterling terms but grew 4% in US dollars, delegate revenues were again
strong.
Financial Services Other comprises three businesses that operate in Compliance
markets. The largest business, which was developed organically within
Wilmington, is the International Compliance Association ('ICA'). It is an
industry body and training business that was created in 2002. It offers
professional development and support to compliance officers predominantly in
the financial services sector. It has offices in the UK and Dubai, and a
presence in India.
The material for ICA courses is developed by our own internal R&D team,
and external specialists. We own the associated intellectual property. Revenue
earned by ICA is primarily training income complemented by subscriptions paid
by the professional members for their ICA accreditations. The courses ICA run
usually extend over several weeks or even months. They traditionally mix
distance learning with face-to-face sessions. The distance learning element
has transitioned to online and digital variants, and virtual programmes have
been offered in place of face-to-face sessions.
The second business, CLTi, earns revenue from running professional development
programmes for wealth managers, in association with The Society of Trust and
Estate Practitioners. Wilmington has an international presence, with customers
in the UK, Europe, Asia Pacific and the US. Our consistent investment
programme in content and technology is maintaining our competitive
positioning.
The third business, Mercia, provides training for accountants in practice and
in business. It runs a mix of face-to-face, online, and blended learning for
this community. It provides training at various levels including providing
continuing professional development for existing qualified accountants.
Additionally, it provides technical support to accountancy firms which enables
them to keep abreast of technical developments and changes to regulation, as
well as supporting them to promote the services they then offer to their
clients.
Mercia is predominantly UK and Ireland based reflecting the country specific
laws and accounting standards that govern the profession. Revenue in the unit
is earned through clients subscribing for ongoing training, support and other
related activities over a period of time (usually 12 months), with the rest
through one off course attendance fees. Courses are typically single or half
day events, and content is a mix of owned and third-party intellectual
property. Courses are delivered either by in-house experts or a network of
independent tutors who are paid per course that they deliver.
Financial Services Other, overall revenues grew 9%. CLTi and ICA UK and Middle
East revenues were up by double digit percentage points. ICA saw continued
revenue decline in Singapore and Malaysia and the business there became
loss-making. Without any sign of a return to profit or revenue growth in the
near future we took the decision to close our operations in Singapore and
Malaysia and to service the area from the UK. Mercia revenues grew 4% in the
year and significantly improved its recurring revenues.
Financial review
Overview
The Group performance was again strong during the year, driving organic growth
in revenue and profit and improving the balance sheet, reflected by the
increased closing net cash position and the reduced lease liabilities. We also
sold our Healthcare and MiExact businesses and acquired Astutis, all of which
have a significant effect on our balance sheet and trading.
Adjusting items, measures, and adjusted results
In this financial review reference is made to adjusted results as well as the
equivalent statutory measures. The Directors make use of adjusted results,
which are not considered to be a substitute for, or superior to, IFRS
measures, to provide stakeholders with additional relevant information and
enable an alternative comparison of performance over time. Adjusted results
exclude amortisation of intangible assets (excluding computer software),
impairments, other income (when material or of a significant nature) and other
adjusting items.
Organic
2024 2023 Absolute variance variance
£'m £'m £'m % %
Statutory continuing revenue 98.3 93.1 5.2 6% 7%
Continuing Adjusted profit before tax 23.7 19.5 4.2 21%
Continuing Adjusted profit margin % 24% 20%
Variances described as 'organic' are calculated by adjusting the revenue
change achieved year-on-year to exclude the impact of changes in foreign
currency exchange rates and also to exclude the impact of changes in the
portfolio from acquisitions and disposals.
Revenue
Group revenue increased 6% on a statutory continuing basis and 9% on an
organic basis, the statutory continuing increase reflecting £0.9m of foreign
currency downside and the impact of disposals carried out part way through the
year. Full details can be found in the review of operations.
Operating expenses before amortisation of intangible assets (excluding
computer software), impairment and adjusting items
Operating expenses before amortisation of intangible assets (excluding
computer software) and impairments increased to £76.6m (2023: £73.8m).
Within operating expenses, staff costs were £43.6m (2023: £44.4m). This net
decrease reflects the reduced salary cost as a result of the decrease in
headcount post disposals which was partly offset by inflationary pay rises.
Share based payment costs increased £0.4m due to a full year of charge
relating to the 2023 SAYE scheme and the introduction of the 2024 SAYE scheme,
which commenced in the year.
Non-staff costs increased by £3.6m to £33.0m (2023: £29.4m), reflecting the
current year costs of Astutis from November and general inflationary
increases.
Unallocated central overheads
Unallocated central overheads, representing Board costs and head office
salaries, as well as other centrally incurred costs were £4.2m (2023:
£3.7m).
Adjusted profit before tax ('adjusted PBT')
As a result of increased revenue and a continued focus on operational
efficiency, adjusted profit before tax, which eliminates the impact of
amortisation of intangible assets (excluding computer software), impairments,
other income and other adjusting items, was up 21% to £23.7m (2023: £19.5m).
Adjusted profit margin (adjusted PBT expressed as a percentage of revenue)
also increased to 24% (2023: 20%).
Total Group adjusted profit before tax was up 13% to £27.6m (2023: £24.3m)
and on a total basis the adjusted profit margin increased to 22% (2023: 20%).
Amortisation excluding computer software, impairment, adjusting charge and
other income
Amortisation of intangible assets (excluding computer software) was £2.1m
(2023: £1.1m) representing amortisation from acquired intangibles. The
increase year on year largely reflects the acquisition of Astutis made during
the year.
The non-cash impairment of £4.4m (2023: £nil) represents the impairment of
goodwill in Compliance Week. The adjusting charge of £0.6m (2023: £0.1m)
represents strategic costs for acquisitions.
Gain on disposals represents a total net gain of £26.8m consisting of £5.5m
included within other income largely relating to MiExact, and £21.3m gain
disposal of European Healthcare included within profit from discontinued
operations, see note 11 for further details. Other income also includes £2.2m
representing a gain on the sale of a building and the early exit of the head
office lease leading to a lease modification, see note 5a for further details.
Operating profit
Operating profit was £22.2m (2023: £20.3m), driven largely by the £5.5m
gain on disposal of subsidiaries (2023: £2.2m), the gain on disposal of
property, plant and equipment and lease modification of £2.2m, partially
offset by £4.4m of goodwill impairment.
Net finance income
Net finance income up £1.8m to £2.0m (2023: £0.2m), primarily related to
the interest received on the significant cash balance the Group maintained
during the year.
Profit before taxation
Profit before taxation was £24.2m (2023: £20.5m); a reconciliation of profit
before tax to adjusted profit before tax can be found in note 3.
Taxation
The tax charge for the year was £7.0m (2023: £3.3m) reflecting an effective
tax rate of 29.4% (2023: 16.2%). The increase in the tax rate year-on-year
reflects an increase in the full year of UK corporation tax at 25%, offset by
the nature of other operating income with business disposals qualifying for
the SSE.
The underlying tax rate which ignores the tax effects of adjusting items
increased to 27.2% (2023: 25.2%). The increase reflects the full year of the
UK corporation tax increase from 19% to 25%, with only one quarter being
applied to FY23.
Earnings per share
Adjusted basic earnings per share increased by 17% to 19.38p (2023: 16.57p)
see note 9, due to the increase in adjusted profit before tax, offset by an
increase in the corporation tax rate causing an increase in the underlying tax
rate. The number of issued ordinary shares was essentially unchanged. Total
Basic earnings per share was 46.32p (2023: 22.94p) reflecting the increase in
profit after tax, see note 9.
Ongoing adjusted basic earnings per share, excluding the results of sold and
closed businesses, increased by 41% to 19.81p (2023: 14.02p), see
reconciliation below.
2024 2023
£'m £'m
Adjusted earnings (note 9) 20.4 18.9
Remove profit after tax of sold and closed businesses (2.8) (6.6)
Ongoing adjusted earnings 17.6 12.3
2024 2023 Variance
Number Number
Weighted average number of ordinary shares (note 9) 88,027,119
88,964,817
Ongoing adjusted basic earnings per share 19.81p 14.02p 41%
Dividend
A final dividend of 8.3p per share (2023: 7.3p) will be proposed at the AGM.
This will give a full year dividend up 13% to 11.3p (2023: 10.0p) and dividend
cover of 2.0 times (2023: 2.1 times).
If approved it will be paid on 4 December 2024 to shareholders on the register
as at 1 November 2024 with an associated ex-dividend date of 31 October 2024.
Balance sheet
Non-current assets
Goodwill at 30 June 2024 was £52.8m (2023: £60.6m). The decrease is due to
disposals of £14.3m and impairment in the Compliance Week CGU of £4.4m,
following the decision to sell it, with the remaining goodwill in Compliance
Week of £0.4m transferred to held for sale, partly offset by the goodwill
arisen from the acquisition of Astutis of £11.2m.
Intangible assets increased by £4.5m to £10.2m (2023: £5.7m) due to the
acquisition of Astutis of £9.9m and additions of £0.2m within computer
software; partly offset by amortisation of £3.7m, and £1.8m of disposals
largely relating to the disposal of subsidiaries. The remaining £0.1m
variance reflects exchange translation differences.
Property, plant and equipment decreased by £3.9m to £3.1m (2023: £7.0m).
This is attributable to the £1.5m decrease from disposals largely relating to
the disposal of subsidiaries, £0.8m decrease due to the lease modification,
depreciation of £1.8m and an impairment of the assets associated with the
head office of £0.4m. Partly offset by additions of £0.1m and £0.4m
recognised from the acquisition of Astutis. The remaining £0.1m reflects
exchange translation differences.
Deferred consideration receivable
The deferred consideration receivable balance of £16.5m (2023: £1.9m)
relates to the disposal of ICP in July 2018, the disposal of MiExact in
January 2024 (see note 11), and the disposal of UK Healthcare in June 2024
(see note 11), with £14.8m recognised within non-current assets and the
remaining £1.7m recognised within current assets.
Trade and other receivables
Trade and other receivables reduced to £20.3m (2023: £27.4m) largely due to
the disposals of Healthcare and MiExact.
Current tax liability
At 30 June 2024 the Group recognised a liability relating to current tax of
£1.1m (2023: £0.1m).
Deferred tax
The deferred tax liability of £1.4m (2023: asset £0.3m) comprises the
deferred tax liability for acquired intangibles on acquisition of Astutis,
partly offset by a deferred tax credit for the change in corporation tax rate
and movement in capital allowances. The deferred tax expense in the P&L
£0.1m (2023: £1.1m credit) comprises the change in corporation tax rate and
movements in capital allowances.
Trade and other payables
Trade and other payables decreased by £5.5m to £50.5m (2023: £56.0m).
Within this, contract liabilities decreased by £5.8m to £27.9m (2023:
£33.7m) largely due to the disposals of Healthcare and MiExact.
Provisions
Provisions were £0.2m (2023: £1.2m) in respect of anticipated future costs
in relation to the closed proportion of the head office until the end of the
contractual lease term. During the year, the lease term on the head office
building was renegotiated and we will exit the building in December 2024, the
provision was unwound by £0.8m, utilised by £0.2m, and the liability
reflects the term until December 2024.
Net cash, lease liabilities and cash flow
Net cash, which includes cash and cash equivalents, cash classified as held
for sale and lease liabilities, was £65.0m (2023: £35.0m). This significant
net cash position is driven by a strong trading performance delivering
improved profits and effective cash management as well as a cash inflow
associated with the disposal of businesses offset by the purchase of Astutis.
Please refer to note 15 for further information.
Lease liabilities decreased to £2.8m (2023: £7.2m). £0.9m (2023: £2.1m)
cash payments in relation to contractual lease obligations were made reducing
the balance, the lease modification reduced the balance by £2.7m, coupled
with disposals of £1.3m. The reduction is offset by £0.2m (2023: £0.2m) of
notional interest on lease liabilities reported within finance costs and
additions of £0.3m upon the acquisition of Astutis.
Cash conversion remained strong at 116% (2023: 138%). See note 14 for further
details.
Share capital
In October 2023 Wilmington issued 823,568 ordinary voting shares of £0.05 to
satisfy the Company's obligations under its Performance Share Plan. In
December 2023 Wilmington issued 582,637 ordinary voting shares of £0.05 to
satisfy the Company's obligations under its SAYE Plan.
During the year 53,519 shares held by the Employee Share Ownership Trust
('ESOT') were used to satisfy the Company's obligations under the SAYE Plan
and 54,610 shares held by the ESOT to satisfy the Company's obligations under
its Performance Share Plan. At 30 June 2024, the ESOT held 244,522 shares
(2023: 352,651) in the Company, which represents 0.3% (2023: 0.4%) of the
called up share capital.
During the year 391 shares held in treasury were used to satisfy the Company's
obligations under the SAYE Plan. At 30 June 2024, 4,817 shares (2023: 5,208)
were held in treasury, which represents 0.1% (2023: 0.1%) of the share capital
of the Company.
Portfolio update
Acquisition of Astutis
In November 2023, we completed the acquisition of Astutis, a training business
offering a range of globally recognised and regulated health, safety and
environmental qualifications, based in Cardiff, for an initial consideration
of £16.8m, with contingent consideration of up to £4.7m based on Astutis'
performance in each of the two years ending 30 June 2025 and 30 June 2026. The
business has achieved strong growth in recent years in the growing HSE market
and is highly complementary to our existing portfolio. The acquisition of
Astutis, which is earnings enhancing, is consistent with our strategy in the
GRC market to broaden and strengthen our training and education capabilities.
Astutis embodies all of our six key business characterises in that it operates
in growing GRC focused regulated markets, has a strong and experienced
management team, a comprehensive products suite, growing revenues and profits,
and excellent digital capabilities. The fair value of the net assets acquired
in the business at acquisition date was £9.0m, resulting in goodwill on
acquisition of £11.2m. See note 10 for further details.
Disposals
We continue to review all parts of the Group assessing businesses against six
key characteristics: organic growth opportunities; attractive markets; digital
and data capabilities; strong leadership; strategic fit to the GRC
marketplaces; and attractive product, revenue, and profitability
characteristics. As part of this ongoing review we determined that our
Healthcare, Compliance Week and MiExact businesses no longer met our criteria.
MiExact and Healthcare were sold during the year, Compliance Week is in a sale
process. We also took the decision to close our business in Singapore and
Malaysia due to continuing declining revenues, ongoing losses and little
prospect of recovery given the local market conditions. We will continue to
serve the Singapore and Malaysia markets from the UK.
MiExact, a UK mortality data business, was sold in January 2024 for £9.6m
recognising a gain of £5.9m included within other income. The European
Healthcare business was sold in two parts. The first was the disposal of APM,
a French healthcare business, for €26.0m in cash in April 2024 recognising a
gain on disposal of €23.3m (£19.9m) included within discontinued
operations. The second was the sale of the UK healthcare business for a
consideration of up to £26.3m recognising a gain on disposal of £1.5m
included within discontinued operations. See note 11 for further details.
Consolidated income statement
for the year ended 30 June 2024
Notes Year ended Year ended
30 June 2024 30 June 2023
£'000 £'000
Continuing operations
Revenue 4 98,324 93,065
Operating expenses before amortisation of intangibles excluding computer (73,792)
software, impairment and adjusting items
(76,645)
Impairment of goodwill 5b (4,434) -
Amortisation of intangible assets excluding computer software 5b (2,090) (1,078)
Adjusting items 5b (598) (147)
Operating expenses (83,767) (75,017)
Other income - gain on disposal of subsidiaries 11 5,465 2,212
Other income - gain on disposal of property, plant and equipment and lease 5a 2,189 -
modification
Operating profit 22,211 20,260
Finance income 6 2,172 478
Finance expense 6 (175) (246)
Profit before tax 24,208 20,492
Taxation 7 (7,009) (3,317)
Profit for the year from continuing operations 17,199 17,175
Profit for the year from discontinued operations 11 24,011 3,020
Profit for the year attributable to owners of the parent 41,210 20,195
Earnings per share from continuing operations:
Basic (p) 9 19.33 19.51
Diluted (p) 9 18.96 19.03
Earnings per share from continuing and discontinued operations:
Basic (p) 9 46.32 22.94
Diluted (p) 9 45.44 22.38
Consolidated statement of comprehensive income
for the year ended 30 June 2024
Year ended Year ended
30 June 30 June
2024 2023
£'000 £'000
Profit for the year 41,210 20,195
Other comprehensive expense:
Items that may be reclassified subsequently to the income statement
-Currency translation differences (238) (991)
Other comprehensive expense for the year, net of tax (238) (991)
Total comprehensive income for the year attributable to owners of the parent 40,972 19,204
Balance sheets
as at 30 June 2024
Notes 2024 2023
£'000 £'000
Non-current assets
Goodwill 52,763 60,561
Other intangible assets 10,236 5,734
Property, plant and equipment 3,085 7,015
Investment in subsidiaries - -
Deferred consideration receivable 14,786 1,152
Deferred tax assets - 925
80,870 75,387
Current assets
Trade and other receivables 12 20,339 27,391
Deferred consideration receivable 1,732 752
Cash and cash equivalents 67,515 42,173
Assets of disposal group held for sale 11 1,196 -
90,782 70,316
Total assets 171,652 145,703
Current liabilities
Trade and other payables 13 (50,460) (55,966)
Lease liabilities (1,257) (975)
Current tax liabilities (1,058) (44)
Provisions (154) (307)
Liabilities of disposal group held for sale 11 (486) -
(53,415) (57,292)
Non-current liabilities
Lease liabilities (1,571) (6,235)
Deferred tax liabilities (1,351) (607)
Provisions - (921)
(2,922) (7,763)
Total liabilities (56,337) (65,055)
Net assets 115,315 80,648
Equity
Share capital 4,478 4,408
Share premium 47,463 45,553
Treasury and ESOT reserves (617) (786)
Share based payments reserve 2,889 2,635
Translation reserve 3,193 3,431
Retained earnings 57,909 25,407
Total equity 115,315 80,648
Statements of changes in equity
for the year ended 30 June 2024
Share capital, Share based Translation Retained earnings Total equity
share premium, payments reserve £'000 £'000
treasury shares and ESOT shares reserve £'000
£'000 £'000
Group
At 1 July 2022 48,851 2,141 4,422 11,675 67,089
Profit for the year - - - 20,195 20,195
Other comprehensive expense for the year - - (991) - (991)
48,851 2,141 3,431 31,870 86,293
Transactions with owners:
Dividends paid - - - (7,462) (7,462)
Issue of share capital 17 - - - 17
Performance share plan awards vesting - (717) - 854 137
Save As You Earn options settlement via ESOT 154 (11) - (16) 127
Save As You Earn options settlement via treasury shares 153 - - (64) 89
Share based payments - 1,222 - - 1,222
Tax on share based payments - - - 225 225
At 30 June 2023 49,175 2,635 3,431 25,407 80,648
Profit for the year - - - 41,210 41,210
Other comprehensive expense for the year - - (238) - (238)
49,175 2,635 3,193 66,617 121,620
Transactions with owners:
Dividends paid - - - (9,153) (9,153)
Issue of share capital 71 - - - 71
Issue of share premium 1,910 - - - 1,910
Performance share plan awards vesting settlement via share issue - (1,109) - (139) (1,248)
Performance share plan options settlement via ESOT 127 (67) - - 60
Save As You Earn options vesting settlement via share issue - (174) - 212 38
Save As You Earn options settlement via treasury shares 1 - - - 1
Save As You Earn options settlement via ESOT 40 (29) - (7) 4
Share based payments - 1,633 - - 1,633
Tax on share based payments - - - 379 379
At 30 June 2024 51,324 2,889 3,193 57,909 115,315
Cash flow statements
for the year ended 30 June 2024
Notes Year ended Year ended
30 June 2024 30 June 2023
£'000 £'000
Cash flows from operating activities
Cash generated from operations before adjusting items 14 29,747 33,205
Cash flows for adjusting items - operating activities (1,826) (375)
Cash flows from tax on share based payments (222) (2)
Cash generated from operations 27,699 32,828
Interest received 1,946 344
Tax paid (7,115) (3,268)
Net cash generated from operating activities 22,530 29,904
Cash flows from investing activities
Disposal of subsidiaries net of cash 11 26,561 1,549
Purchase of subsidiary net of cash 10 (15,923) -
Deferred consideration received 888 250
Cash flows for adjusting items - investing activities (59) (6)
Purchase of property, plant and equipment (132) (461)
Proceeds from disposal of property, plant and equipment 884 13
Purchase of intangible assets (235) (595)
Net cash generated from investing activities 11,984 750
Cash flows from financing activities
Dividends paid to owners of the parent (9,153) (7,462)
Cash received from sale of shares for share vesting 927 573
Share issuance costs (70) (14)
Payment of lease liabilities (881) (2,109)
Net cash used in financing activities (9,177) (9,012)
Net increase in cash and cash equivalents 21,642
25,337
Cash and cash equivalents at beginning of the year 20,543
42,173
Exchange gain/(loss) on cash and cash equivalents 5 (12)
Cash classified as held for sale 293 -
Cash and cash equivalents at end of the year 42,173
67,808
Notes to the financial statements
1. Nature of the Financial Statements
The following financial information does not amount to full financial
statements within the meaning of Section 434 of Companies Act 2006.
Financial statements for the year ended 30 June 2023 have been delivered to
the Registrar of Companies; the report of the auditors on those accounts was
unqualified and did not contain a statement under Section 498 of the Companies
Act 2006. The 2024 statutory accounts will be delivered in due course.
Information has been extracted from the draft statutory financial statements
for the year ended 30 June 2024 which will be delivered to the Registrar of
Companies in due course. Accordingly, the financial information for 2024 is
presented unaudited in the preliminary announcement.
Copies of the Annual Report and Financial Statements will be made available to
shareholders shortly and printed copies will be available from the Company's
registered office at 10 Whitechapel High Street, London, E1 8QS.
2. Statement of accounting policies
The preliminary announcement for the year ended 30 June 2024 has been prepared
in accordance with UK adopted international accounting standards (UK adopted
IAS). The accounting policies applied in this preliminary announcement are
consistent with those reported in the Group's Annual Financial Statements for
the year ended 30 June 2023. There was no material effect from the adoption of
new standards or interpretations in the year ended 30 June 2024.
3. Measures of profit
Reconciliation to profit on continuing activities before tax
To provide shareholders with additional understanding of the trading
performance of the Group, adjusted EBITA has been calculated as profit before
tax after adding back:
• impairment of goodwill;
• 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 lease modification; and
• net finance income.
Adjusted profit before tax, adjusted EBITA and adjusted EBITDA reconcile to
profit on continuing activities before tax as follows:
Year ended Year ended
30 June 30 June
2024 2023
£'000 £'000
Profit before tax 24,208 20,492
Impairment of goodwill 4,434 -
Amortisation of intangible assets excluding computer software 2,090 1,078
Adjusting items (included in operating expenses) 598 147
Other income - gain on disposal of subsidiaries (5,465) (2,212)
Other income - gain on disposal of property, plant and equipment and lease (2,189) -
modification
Adjusted profit before tax 23,676 19,505
Net finance income (1,997) (232)
Adjusted operating profit ('adjusted EBITA') 21,679 19,273
Depreciation of property, plant and equipment included in operating expenses 1,711 2,121
Amortisation of intangible assets - computer software 1,004 1,525
Adjusted EBITA before depreciation ('adjusted EBITDA') 24,394 22,919
Adjusted EBITA 21,679 19,273
Add EBITA from statutory discontinued operations 3,874 4,833
Total Group adjusted EBITA 25,553 24,106
Adjusted profit before tax 23,676 19,505
Add adjusted profit before tax from statutory discontinued operations 3,874 4,833
Total Group adjusted profit before tax 27,550 24,338
Remove operating profit from sold and closed businesses (3,484) (7,410)
Ongoing adjusted profit before tax 24,066 16,928
4. Segmental information
In accordance with IFRS 8 the Group's operating segments are based on the
operating results reviewed by the Executive Board, which represents the chief
operating decision maker.
During the year, the Group reorganised its business into three Divisions (HSE,
Legal and Financial Services) to compliment the changes to the Group structure
as a result of the significant disposals and the acquisition, the segments
give greater focus to the customer base. These reportable segments reflect the
internal reporting provided to the Chief Operating Decision Maker (the
Executive Board) on a regular basis to assist in making decisions and to
assess performance. Segment information has been restated in the prior period
to align to the current reportable segments.
The Group's dynamic portfolio provides customers with a range of information,
data, training and education solutions. 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), the USA and the Rest of the World.
a) Business segments
Revenue Profit/(loss) Revenue Profit
Year ended Year ended Year ended Year ended
30 June 2024 30 June 2024 30 June 2023 30 June 2023
£'000 £'000 £'000 £'000
HSE 4,837 1,201 - -
Legal 15,986 6,173 14,014 6,014
Financial Services 68,850 20,726 64,717 15,900
Ongoing 89,673 28,100 78,731 21,914
Non-core 8,651 (390) 14,334 2,577
Group total 98,324 27,710 93,065 24,491
Unallocated central overheads - (4,166) - (3,703)
Share based payments - (1,865) - (1,515)
98,324 21,679 93,065 19,273
Impairment of goodwill (4,434) -
Amortisation of intangible assets excluding computer software (2,090) (1,078)
Adjusting items (included in operating expenses) (598) (147)
Other income - gain on disposal of subsidiaries 5,465 2,212
Other income - gain on disposal of property, plant and equipment and lease 2,189 -
modification
Net finance income 1,997 232
Profit before tax from continuing operations 24,208 20,492
Taxation (7,009) (3,317)
Profit for the financial year from continuing operations 17,199 17,175
There are no intra-segmental revenues which are material for disclosure.
Unallocated central overheads represent central costs that are not
specifically allocated to segments. Total assets and liabilities for each
reportable segment are not presented; as such information is not provided to
the Board.
b) Segmental information by geography
The UK is the Group's country of domicile and the Group generates the majority
of its revenue from external customers in the UK. The geographical analysis of
revenue is on the basis of the country of origin in which the customer is
invoiced:
Year ended Year ended
30 June 30 June
2024 2023
£'000 £'000
UK 52,353 49,441
USA 25,761 24,050
Europe (excluding the UK) 10,777 10,481
Rest of the World 9,433 9,093
Revenue from continuing operations 98,324 93,065
c) Timing of revenue recognition
The timing of the Group's revenue recognition is as follows:
Year ended Year ended
30 June 30 June
2024 2023
£'000 £'000
Revenue from products and services transferred at a point in time 60,322 55,223
Revenue from products and services transferred over time 38,002 37,842
Revenue from continuing operations 98,324 93,065
During the year the Group recognised £33,659,000 of revenue that was held as
a contract liability at 30 June 2023 (2023: £31,405,000 related to amounts
held at 30 June 2022).
5. Profit from continuing operations
a) Profit for the year from continuing operations is stated after
charging/(crediting):
Year ended Year ended
30 June 30 June
2024 2023
£'000 £'000
Depreciation of property, plant and equipment - included in operating expenses 1,711 2,121
Short-term and low-value leases 143 94
Amortisation of intangible assets - computer software 1,004 1,525
Non-adjusting profit on disposal of property, plant and equipment - (36)
Share based payments (including social security costs) 1,865 1,515
Amortisation of intangible assets excluding computer software 2,090 1,078
Adjusting items (included in operating expenses) 598 147
Adjusting item - gain on disposal of subsidiaries (5,465) (2,212)
Adjusting item - gain on sale of property, plant and equipment and lease (2,189) -
modification
Research and development expenditure credit - (200)
Impairment of goodwill 4,434 -
Foreign exchange loss 87 179
Fees payable to the auditor for the audit of the Company and consolidated 209 153
financial statements
Fees payable to the auditor and their associates for other services:
- The audit of the Company's subsidiaries pursuant to legislation 241 240
- Audit related other services 17 17
The gain on property, plant and equipment and lease modification relates to
the sale of a building realising a gain of £0.9m, and an early exit of the
head office lease releasing a gain of £1.3m. The gain on exit of the head
office contains a lease modification. The right-of use asset was reduced by
£1.0m and the lease liability was reduced by £2.8m, property, plant and
equipment were impaired by £0.4m, a provision was unwound of £0.8m, and
professional fees and a lease surrender expense of £0.9m were recognised.
b) Adjusting items
The following items have been charged to the income statement during the year
but are considered to be adjusting so are shown separately:
Year ended Year ended
30 June 30 June
2024 2023
£'000 £'000
Expense relating to strategic activities 598 147
Other adjusting items (included in operating expenses) 598 147
Impairment of goodwill 4,434 -
Amortisation of intangible assets excluding computer software 2,090 1,078
Total adjusting items (classified in profit before tax) 7,122 1,225
During the year, the Compliance Week CGU was impaired. Expenses related to
strategic activities represent acquisition costs of £0.6m.
6. Finance income and expense
Year ended Year ended
30 June 30 June
2024 2023
£'000 £'000
Interest receivable on cash and cash equivalents 1,953 373
Unwinding of the discount on royalty payments receivable 219 105
Finance income 2,172 478
Interest expense for lease liabilities (175) (246)
Finance expense (175) (246)
Net finance income 1,997 232
7. Taxation
Year ended Year ended
30 June 30 June
2024 2023
£'000 £'000
Current tax
UK corporation tax at current rates on UK profits for the year 5,009 3,096
Adjustments in respect of previous years 394 (54)
5,403 3,042
Foreign tax 1,568 1,291
Adjustments in respect of previous years (19) 89
Total current tax 6,952 4,422
Total deferred tax 57 (1,105)
Taxation from continuing operations 7,009 3,317
Factors affecting the tax charge for the year:
The effective tax rate is higher (2023: lower) than the average rate of
corporation tax in the UK of 25.0% (2023: 20.5%). The differences are
explained below:
Year ended Year ended
30 June 30 June
2024 2023
£'000 £'000
Profit before tax 24,208 20,492
Profit before tax multiplied by the average rate of corporation tax in the 4,200
year of 25.0% (2023: 20.5%)
6,052
Tax effects of:
Impairment of goodwill 1,109 -
Gain on disposal of subsidiaries (1,367) (453)
Foreign tax rate differences 156 178
Adjustment in respect of previous years 379 35
Other items not subject to tax 623 462
Deferred tax UK intangibles and capital allowances movement (88) (904)
Effect on deferred tax of a change in the corporation tax rate 408 (83)
Other deferred tax movements (263) (118)
Taxation from continuing operations 7,009 3,317
Deferred tax assets and liabilities are measured at the rates that are
expected to apply in the periods of the reversal.
The Company's profits for this accounting year are taxed at an effective rate
of 29.4% (2023: 16.2%).
The tax effect of adjusting items as disclosed in note 9 is an expense of
£571,000 (2023: credit of £1,598,000).
8. Dividends
Amounts recognised as distributions to owners of the parent in the year:
Year ended Year ended Year ended Year ended
30 June 30 June 30 June 30 June
2024 2023 2024 2023
Pence Pence £'000 £'000
per share per share
Final dividends recognised as distributions in the year 5.8 5,091
7.3 6,473
Interim dividends recognised as distributions in the year 2.7 2,371
3.0 2,680
Total dividends paid 9,153 7,462
Final dividend proposed 8.3 7.3 7,297 6,410
9. Earnings per share
Adjusted earnings per share has been calculated using adjusted earnings
calculated as profit after taxation but before:
• impairment of goodwill;
• amortisation of intangible assets excluding computer software;
• adjusting items (included in operating expenses);
• other income - gain on disposal of subsidiaries; and
• other income - gain on disposal of property, plant and equipment
and lease modification.
The calculation of the basic and diluted earnings per share is based on the
following data:
Year ended Year ended
30 June 30 June
2024 2023
£'000 £'000
Continuing operations:
Earnings from continuing operations for the purpose of basic earnings per 17,199 17,175
share
Add/(remove):
Impairment of goodwill 4,434 -
Amortisation of intangible assets excluding computer software 2,090 1,078
Adjusting items (included in operating expenses) 598 147
Other income - gain on disposal of subsidiaries (5,465) (2,212)
Other income - gain on disposal of property, plant and equipment and lease (2,189) -
modification
Tax effect of adjustments above and deferred tax 571 (1,598)
Adjusted earnings for the purposes of adjusted earnings per share 17,238 14,590
Continuing and discontinued operations:
Earnings from total operations for the purpose of basic earnings per share 20,195
41,210
Add/(remove):
Impairment of goodwill 4,434 -
Amortisation of intangible assets excluding computer software 2,637 2,381
Adjusting items (included in operating expenses) 598 147
Other income - gain on disposal of subsidiaries (26,831) (2,212)
Other income - gain on disposal of property, plant and equipment and lease (2,189) -
modification
Tax effect of adjustments above and deferred tax 571 (1,598)
Adjusted earnings for the purposes of adjusted earnings per share 20,430 18,913
2024 2023
Number Number
Continuing operations:
Weighted average number of ordinary shares for the purposes of basic and 88,027,119
adjusted earnings per share
88,964,817
Effect of dilutive potential ordinary shares:
Future exercise of share awards and options 1,722,761 2,217,174
Weighted average number of ordinary shares for the purposes of diluted and 90,244,293
adjusted diluted earnings per share
90,687,578
Continuing and discontinued operations:
Weighted average number of ordinary shares for the purposes of basic and 88,027,119
adjusted earnings per share
88,964,817
Effect of dilutive potential ordinary shares:
Future exercise of share awards and options 1,722,761 2,217,174
Weighted average number of ordinary shares for the purposes of diluted and 90,244,293
adjusted diluted earnings per share
90,687,578
Continuing operations:
Basic earnings per share 19.33p 19.51p
Diluted earnings per share 18.96p 19.03p
Adjusted basic earnings per share ('adjusted earnings per share') 19.38p 16.57p
Adjusted diluted earnings per share 19.01p 16.17p
Continuing and discontinued operations:
Basic earnings per share 46.32p 22.94p
Diluted earnings per share 45.44p 22.38p
Adjusted basic earnings per share ('adjusted earnings per share') 22.96p 21.49p
Adjusted diluted earnings per share 22.53p 20.96p
10. Acquisition of Astutis
On 23 November 2023, the Group acquired 100% of the issued share capital of
Astutis Limited ("Astutis"), a Company based in the United Kingdom, for an
initial consideration of £16.8m. In addition, under the terms of the
acquisition, there are two potential deferred payments totalling up to £4.7m
based on Astutis' performance in each of the two years ending 30 June 2025 and
30 June 2026. As the deferred payments are linked to employment, they will be
recognised as a separate transaction in each period respectively as they fall
due.
Astutis, which offers training for a range of globally recognised and
regulated health, safety and environmental qualifications, strengthens
Wilmington's portfolio of GRC training and education solutions by expanding
its capabilities into the health, safety and environmental markets. The
acquisition is part of Wilmington's strategy to focus on consolidating its
already strong presence in the large, growing and rapidly evolving GRC
markets. These markets are underpinned by strong macro drivers, particularly
the increasing volume and enforcement of regulation, complex geopolitical
landscape, increased importance of ESG and widespread adoption of
technological and data-driven compliance solutions. Goodwill acquired relates
to synergies and access to the health, safety and environmental markets.
The fair value of the net assets acquired in the business at acquisition date
was £9.0m, resulting in goodwill on acquisition of £11.2m. Acquisition
related charges include transaction costs of £0.6m relating to the
acquisition of Astutis. The results of the acquisition included in the Group's
consolidated results are revenue of £4.8m and an operating result of £1.2m.
Due to limitations in available data for the pre-acquisition period, the
Directors consider that it is impracticable to disclose the results of the
combined entity as though the acquisition had impacted the Group's
consolidated results for the full year. The goodwill recognised is not
deductible for tax purposes.
A summary of the acquisition is detailed below:
£'000
Fair value of net assets acquired
Intangibles 9,861
Property, plant and equipment 336
Trade and other receivables 1,880
Cash and cash equivalents 4,207
Trade and other payables (4,510)
Current tax liability (494)
Deferred tax liability (1,995)
Lease liability (311)
Net assets acquired 8,974
Goodwill 11,156
Final working capital adjustments (1,174)
Total cash consideration 18,956
Final working capital adjustments paid in cash 1,174
Cash acquired (4,207)
Total cash outflow 15,923
11. Disposals, disposal group held for sale and discontinued operations
Disposal of MiExact
On 31 January 2024 the Group disposed of its mortality data business, MiExact
Limited, for consideration of £9.6m prior to working capital adjustments and
recognised a gain on disposal of £5.9m presented within other income.
Wilmington received cash of £6.9m on completion after working capital
adjustments, and the remaining £3.0m was issued as a loan note with a 7%
coupon, deferred for up to three years.
The disposal was executed by way of the sale of 100% of the equity shares. Net
assets on disposal were £2.9m, a breakdown can be found in the table below.
MiExact has not been classified as a discontinued operation under IFRS 5
because it does not meet the IFRS 5 criteria as a significant line of
business.
Disposal of APM (part of the European Healthcare business)
On 26 April 2024 the Group disposed of its French Healthcare business, APM,
for consideration of €26.0m (£22.3m) in cash, prior to working capital
adjustments and recognised a gain on disposal of €23.3m (£19.9m) presented
within discontinued operations.
The disposal was executed by way of the sale of 100% of the equity shares. Net
assets on disposal were £1.9m, a breakdown can be found in the table below.
The European Healthcare business, consisting of APM and UK Healthcare, has
been classified as a discontinued operation under IFRS 5 because it meets the
IFRS 5 criteria as a significant line of business. Please see below for
further information.
Disposal of UK Healthcare (part of the European Healthcare business)
On 27 June 2024 the Group disposed of its UK Healthcare business for
consideration of up to £26.3m. The UK Healthcare business includes the entire
issued share capital of Wilmington Healthcare Limited and Interactive Medica
SL. This transaction completes Wilmington's sale of its European Healthcare
businesses, following the disposal of the Group's French Healthcare business,
APM, announced on 26 April 2024 for €26m.
The initial consideration of £21.3m comprises £4.8m in cash with the balance
of £16.5m satisfied through the issue by the purchaser of secured loan notes
for a term of up to four years, carrying a variable interest rate equal to the
Bank of England base rate with some principal repayments throughout the term.
The transaction realised a gain on disposal of £1.5m presented within
discontinued operations.
The total consideration of £21.3m will increase by up to approximately
£5.1m, subject to the UK Healthcare business achieving certain EBITDA targets
for the financial year ending 30 June 2025. This contingent consideration has
not been recognised as part of consideration because of the assessed
likelihood of meeting the specified targets.
The disposal was executed by way of the sale of 100% of the equity shares. Net
assets on disposal were £15.2m, a breakdown can be found in the table below.
The European Healthcare business, consisting of APM and UK Healthcare, has
been classified as a discontinued operation under IFRS 5 because it meets the
IFRS 5 criteria as a significant line of business. Please see below for
further information.
Revision of ICP
The disposal proceeds for the 2018 disposal of ICP were renegotiated to ensure
payment would actually be received, resulting in a reduction in the profit on
disposal of £414,000 presented within other income.
Net assets as at the disposal dates:
The disposals were executed by way of the sale of 100% of the equity shares
and as at each disposal date, the net assets were as follows:
MiExact APM UK Healthcare ICP Total
£'000 £'000 £'000 £'000 £'000
Goodwill 2,391 - 11,885
Intangibles - 89 1,734
Property, plant and equipment 13 1,435 3
Deferred tax asset - - 33
Current tax asset - 392 95
Trade and other receivables 898 2,195 5,114
Cash and cash equivalents 1,038 4,141 2,942
Trade and other payables (1,414) (5,017) (6,654)
Lease liabilities - (1,300) -
Net assets disposed 2,926 1,935 15,152 20,013
Directly attributable costs of disposal 638 1,104 1,618 3,360
Recycling of foreign exchange (gain)/loss - 25 (262) (237)
Gain on disposal included within discontinued operations - 19,912 1,454 21,366
Gain/(loss) on disposal included within other income 5,879 - - (414) 5,465
Fair value of consideration during the year 9,443 22,976 17,962 (414) 49,967
Satisfied by:
Cash and cash equivalents 6,894 22,976 4,812 34,682
Fair value of deferred consideration 2,549 - 13,150 (414) 15,285
9,443 22,976 17,962 (414) 49,967
Cash received 6,894 22,976 4,812 34,682
Less cash disposed (1,038) (4,141) (2,942) (8,121)
Total cash inflow 5,856 18,835 1,870 26,561
The disposals reflect the Group's continued and active management of its
portfolio to assess 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.
European Healthcare business (UK Healthcare & APM) classified as a
discontinued operation
The European Healthcare business (consisting of APM and UK Healthcare) has
been classified as a discontinued operation in the year with the financial
results, including the comparatives, presented separately. The operation meets
the IFRS 5 definition as a discontinued operation due to it being a separate
major line of business and part of single coordinated disposal plan.
The table below shows the results of the discontinued operation, which is
included separately in the Consolidated Income Statement.
Year ended Year ended
30 June 30 June
2024 2023
£'000 £'000
European Healthcare
Revenue 27,679 30,432
Operating expenses before amortisation of intangibles excluding computer (23,805) (25,599)
software
Amortisation of intangible assets excluding computer software (547) (1,303)
Operating expenses (24,352) (26,902)
Operating profit 3,327 3,530
Profit before tax 3,327 3,530
Taxation (682) (510)
Profit after tax 2,645 3,020
Gain on disposal 21,366 -
Profit after tax from discontinued operations 24,011 3,020
Year ended Year ended
30 June 30 June
2024 2023
£'000 £'000
European Healthcare
Net cash generated from operating activities 208 4,070
Net cash used in investing activities 20,574 (164)
Net cash used in financing activities (151) (176)
Net increase in cash & cash equivalents 20,631 3,730
Compliance Week classified as a disposal group held for sale
During the year, the Compliance Week businesses, has been classified as a
disposal group held for sale under IFRS 5.
The Group is focused 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. Consequently, as a result of this assessment, the
Board decided to exit the Compliance Week business. The disposal is expected
to be completed within one year by sale of equity shares.
The major classes of assets and liabilities comprising the disposal group held
for sale are as follows:
30 June
2024
£'000
Goodwill 358
Trade and other receivables 545
Cash and cash equivalents 293
Assets of disposal group held for sale 1,196
Trade and other payables 486
Liabilities of disposal group held for sale 486
Compliance Week has not been classified as a discontinued operation under IFRS
5 because it does not meet the IFRS 5 criteria as a significant line of
business.
12. Trade and other receivables
30 June 30 June
2024 2023
£'000 £'000
Current
Trade receivables 16,104 22,577
Prepayments and other receivables 3,712 3,758
Contract assets 523 1,056
20,339 27,391
Amounts due from all subsidiaries are interest free, unsecured and repayable
on demand with the intention to repay within the year. Expected credit losses
on amounts due from subsidiaries are immaterial.
13. Trade and other payables
30 June 30 June
2024 2023
£'000 £'000
Trade payables 5,021 3,039
Social security and other taxes 2,353 3,418
Accruals 14,499 15,425
Contract liabilities 27,887 33,659
Other payables 700 425
50,460 55,966
Amounts due to subsidiaries are interest free, unsecured and repayable on
demand.
14. Cash generated from operations
Year ended Year ended
30 June 30 June
2024 2023
£'000 £'000
From continuing and discontinued operations:
Profit before tax from continuing operations 24,208 20,492
Profit before tax from discontinued operations 24,694 3,530
Adjusting item - gain on disposal of subsidiaries included in continuing (5,465) (2,212)
operations
Adjusting item - gain on disposal of subsidiaries included in discontinued (21,367) -
operations
Adjusting item - gain on sale of property, plant and equipment and lease (2,189) -
modification (see note 5a)
Adjusting items 598 147
Depreciation of property, plant and equipment included in operating expenses 1,851 2,321
Amortisation of intangible assets (continuing and discontinued) 3,662 4,071
Impairment of goodwill 4,434 -
Non-adjusting profit on disposal of property, plant and equipment - (36)
Share based payments (including social security costs) 1,865 1,515
Net finance income (1,997) (232)
Operating cash flows before movements in working capital 30,294 29,596
Increase in trade and other receivables (2,784) (107)
Increase in trade and other payables 2,545 4,023
Decrease in provisions (308) (307)
Cash generated from operations before adjusting items 29,747 33,205
Cash conversion is calculated as a percentage of cash generated by operations
to adjusted EBITA as follows:
Year ended Year ended
30 June 30 June
2024 2023
£'000 £'000
From continuing and discontinued operations:
Funds from operations before adjusting items:
Adjusted EBITA from continuing operations (note 3) 21,679 19,273
Adjusted EBITA from discontinued operations 3,874 4,833
Share based payments (including social security costs) 1,865 1,515
Amortisation of intangible assets - computer software (continuing and 1,025 1,690
discontinued)
Depreciation of property, plant and equipment (continuing and discontinued) 1,851 2,321
Non-adjusting profit on disposal of property, plant and equipment - (36)
Operating cash flows before movement in working capital 30,294 29,596
Net working capital movement (547) 3,609
Funds from operations before adjusting items 29,747 33,205
Cash conversion 116% 138%
Year ended Year ended
30 June 30 June
2024 2023
£'000 £'000
Free cash flow:
Operating cash flows before movement in working capital 30,294 29,596
Proceeds on disposal of property, plant and equipment 884 13
Net working capital movement (547) 3,609
Interest received 1,946 344
Payment of lease liabilities (881) (2,109)
Tax paid (7,115) (3,268)
Purchase of property, plant and equipment (132) (461)
Purchase of intangible assets (235) (595)
Free cash flow 24,214 27,129
15. Reconciliation of net cash movements
Year ended Year ended
30 June 2024 30 June 2023
£'000 £'000
Cash and cash equivalents at beginning of the year 42,173 19,785
Cash classified as held for sale - 758
Lease liabilities at beginning of the year (7,210) (7,510)
Net cash at beginning of the year 34,963 13,033
Net increase in cash and cash equivalents 21,630
25,635
Movement in lease liabilities 4,382 300
Cash and cash equivalents at end of the year 67,515 42,173
Cash classified as held for sale at end of the year 293 -
Lease liabilities at end of the year (2,828) (7,210)
Net cash at end of the year 64,980 34,963
16. Events after the reporting period
There were no events after the balance sheet date that require disclosure.
1 (#_ftnref1) Ongoing - eliminating the effects of the impact of disposals,
closures and businesses held for sale; Organic - Ongoing, eliminating
acquisitions and exchange rate fluctuations.
2 (#_ftnref2) Ongoing adjusted profit before tax and total adjusted profit
before tax - see note 3.
3 (#_ftnref3) Ongoing adjusted basic earnings per share; Adjusted basic
earnings per share - see note 9.
4 (#_ftnref4) Net cash includes cash and cash equivalents, bank loans
(excluding capitalised loan arrangement fees) and bank overdrafts but excludes
lease liabilities.
5 (#_ftnref5) Ongoing - eliminating the effects of the impact of disposals,
closures and businesses held for sale; Organic - Ongoing, eliminating
acquisitions and exchange rate fluctuations.
6 (#_ftnref6) The HSE division consists of the Astutis business.
7 (#_ftnref7) The Legal division consists of the Bond Solon and Pendragon
businesses.
8 (#_ftnref8) The Financial Services division consists of Axco & FRA in
the Insurance subdivision and Mercia, CLTi & the ICA businesses within the
Other subdivision.
9 (#_ftnref9) Total revenue & operating profit includes all results in
the Group including non-core businesses consisting of MiExact, Compliance
Week, Healthcare, APM, ICA Singapore & Malaysia. Non-core in FY23 also
includes Inese.
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