1st Mar 2007 07:03
Wilmington Group Plc01 March 2007 Embargoed until 0700 1 March 2007 WILMINGTON GROUP PLC ("Wilmington", "the Group" or "the Company") Interim Results for the six months to 31 December 2006 Wilmington Group plc, the professional information and training group, todayannounces its interim results for the six months to 31 December 2006. Highlights • A period of excellent progress • Strong growth in revenue and profitability o Revenue from continuing operations up 14.2% to £45.7m (2005: £40.0m) o Pre-tax profit from continuing operations, before amortisation, up 14.9% to £5.3m (2005: £4.6m) o Pre-tax profit up 26% to £4.2m (2005: £3.3m) o Adjusted EPS up 17.1% to 4.38p (2005: 3.74p) o Interim dividend per share up 54% to 2.0p (2005: 1.3p) • Particularly strong performance by Legal & Regulatory division o Organic revenue growth of 9.1% o Organic profit growth of 14.8% • Substantial progress made with o acquisition and integration of new businesses o launch of a range of new products o installation of new systems to expand product range and increase operational effectiveness • Outlook remains encouraging Charles Brady, Chief Executive, commented: "Wilmington's strategy is to generate sustainable and growing profits fromserving the information and training requirements of key professional businessmarkets. We aim to develop further our strong positions in those markets byfocussed investment. Across the Group we continue to invest in people andproducts and have shown that we can improve the profitability of businesses weacquire. We believe this continued investment, combined with our ability to makevalue enhancing acquisitions, will drive the business forward. "The outlook for the full year remains encouraging. As in previous years, weexpect the Group's performance will be weighted to the second half of thefinancial year." - ends - For further information, please contact: Wilmington Group Plc On the day: 020 7422 6804Charles Brady, Chief Executive Thereafter: 0121 355 0900Basil Brookes, Finance Director Weber Shandwick Financial 020 7067 0700Nick Oborne, Kirsty Raper or Helen Thomas Notes to editors: Wilmington Group plc is one of the UK's leading providers of information andtraining for professional business markets. The Group provides training,arranges industry events and publishes magazines, directories, databases, andspecial reports focused primarily on its principal sectors of Legal &Regulatory, Healthcare, Media & Entertainment and Design & Construction.Capitalised at approximately £195 million, Wilmington floated on the LondonStock Exchange in 1995 (www.wilmington.co.uk). 1 March 2007 WILMINGTON GROUP PLC ("Wilmington", "the Group" or "the Company") Interim Results for the six months to 31 December 2006 CHAIRMAN'S STATEMENT Results for the six months ended 31 December 2006 I am pleased to report that Wilmington has made excellent progress in the sixmonths to 31 December 2006, with strong growth in both revenue andprofitability, partly reflecting encouraging results from our latestacquisitions. Revenue in the six months to 31 December 2006 from continuing operationsincreased by 14.2% to £45.7m (2005: £40.0m). Profit on ordinary activities fromcontinuing operations, before taxation and amortisation, increased by 14.9% to£5.3m (2005: £4.6m). Profit before taxation increased by 26.0% to £4.2m (2005:£3.3m). Adjusted basic earnings per share from continuing operations (beforeamortisation and non-recurring items) increased by 17.1% to 4.38p (2005: 3.74p).Basic earnings per share from continuing operations increased by 25.5% to 3.25p(2005: 2.59p). Non-recurring income of £1.2m represents the inducement fee received, net oftransaction costs, relating to the proposed merger with Metal Bulletin plc. Goodwill and intangible asset valuations arising on the acquisition of Ark Groupand Smee & Ford during the twelve months ended 30 June 2006 have now beenfinalised. The resulting reallocation between goodwill and intangible assets andthe consequential impact on deferred tax and amortisation have been treated as aprior year adjustment. An interim dividend for the current year of 2.0p per share (2005: 1.3p pershare) will be paid on 12 April 2007 to shareholders on the register on 23 March2007. This increase reflects the Board's policy of maintaining a progressivedividend policy and the underlying strength of the business and balance sheet.Net debt at 31 December 2006 was £20.5m. Business Review I am pleased to report that substantial progress has been made with theacquisition and integration of new businesses, the launch of a range of newproducts and the installation of new systems to expand our product range andincrease operational effectiveness. This good progress is a testament to thededication and hard work of Wilmington's employees. Legal and Regulatory The Legal and Regulatory division has delivered a strong performance. Revenuehas grown 28.3% to £28.1m (2005: £21.9m), enhanced by the acquisitions of ArkGroup (October 2005), Smee & Ford (February 2006) and Mercia (October 2006).Excluding the impact of these acquisitions, the Legal and Regulatory divisiondelivered good organic growth with revenue increasing by 9.1%. Divisional profit before non-recurring costs and amortisation increased by 32.6%to £5.8m (2005: £4.4m). Excluding the impact of the acquisitions, profits beforenon-recurring items and amortisation increased by 14.8% to £4.7m (2005: £4.1m). Waterlow's publishing and information activities continued to make excellentprogress with profits increasing by 53.5% compared to the same period in theprior year, largely as a result of growing Internet and electronic revenues.Smee & Ford has integrated well since its acquisition in February 2006 and weare encouraged by the performance of both its legacy reporting and datadivisions. Training activities, with profits up 22.1%, are also providing exciting areasfor growth. Our training in law for non-lawyers has made considerable progresswith the growth in paralegal training and a number of major new contractsawarded to Bond Solon. Importantly, our accountancy training activities arecontinuing to develop with Quorum, acquired in May 2005, showing a substantialincrease in business and profitability. The acquisition of Mercia in October2006 has also added considerable further impetus to this development. Trainingaccountancy professionals is now a significant and growing part of our business.Training activities regarding trust management, anti-money laundering andcompliance have also shown considerable progress during the half year. Healthcare Divisional revenue increased by 14.0% to £5.5m (2005: £4.8m) with profits beforenonrecurring items and amortisation broadly unchanged at £0.7m (2005: £0.7m).While the business has continued to make good underlying progress, profitsreflect continued investment in products relating to APM Health Europe which waslaunched in January 2006. Business Communications The revenue of our Business Communications division comprising Media &Entertainment, Design & Construction and Specialist markets, declined 9.1% to£12.1m (2005: £13.3m). Divisional profits before non-recurring costs andamortisation were £0.3m (2005: £0.7m). These businesses are being integratedfurther to achieve greater economies of scale. Moreover our business model ischanging to help us to take advantage of the opportunities available in thesemarkets. This includes the rationalisation of some products, investment in newoperating systems, the creation of digital and internet revenue sources, and anew conference and events team. While the development costs have depressed thefirst half financial performance, we believe these changes are necessary as thedynamics of our markets are evolving at a pace with magazine advertisingdepressed and revenues increasingly moving to the Internet and events. Outlook Wilmington's strategy is to generate sustainable and growing profits fromserving the information and training requirements of key professional businessmarkets. We aim to develop further our strong positions in those markets byfocussed investment. Across the Group we continue to invest in people andproducts and have shown that we can improve the profitability of businesses weacquire. We believe this continued investment, combined with our ability to makevalue enhancing acquisitions, will drive the business forward. The outlook for the full year remains encouraging. As in previous years, weexpect the Group's performance will be weighted to the second half of thefinancial year. David L Summers Chairman1 March 2007 Wilmington Group plcConsolidated Income Statement Six months Twelve Six months ended months ended ended 31 December 30 June 31 December 2005 2006 2006 (unaudited) (audited) (unaudited) (restated) (restated) Notes £'000 £'000 £'000 Revenue 1 45,729 40,048 89,768Cost of sales (15,867) (15,453) (29,433) _______________________________________ Gross profit 29,862 24,595 60,335Operating expenses excluding amortisationand impairment (23,952) (19,509) (45,484)Amortisation and impairment (2,357) (1,320) (3,264) _______________________________________ Profit from continuing operations before inducement fee and transaction costs 3,553 3,766 11,587Inducement fee net of transaction costs/ (transaction costs) 1 1,208 - (1,200) _______________________________________ Profit from continuing operations afterinducement fee and transaction costs 4,761 3,766 10,387Finance costs (592) (458) (1,049) _______________________________________ Profit on ordinary activities before taxation 4,169 3,308 9,338Income tax expense 2 (1,261) (986) (2,354) _______________________________________ Profit on ordinary activities after taxation 2,908 2,322 6,984Profit on discontinued operations after taxation 3 - 126 131 _______________________________________ Net profit for the period 2,908 2,448 7,115 ======================================= Attributable to equity holders of the parent 2,724 2,295 6,428 ======================================= Minority interest 184 153 687 =======================================Earnings per share attributable to equityholders of the parentContinuing operations: 5(a)Basic earnings per share 3.25p 2.59p 7.53pDiluted earnings per share 3.24p 2.58p 7.48p Continuing and discontinued operations: 5(b)Basic earnings per share 3.25p 2.75p 7.69pDiluted earnings per share 3.24p 2.73p 7.64p Wilmington Group plcConsolidated Statement of Recognised Income and Expense Six months Twelve months Six months ended 31 ended 30 ended 31 December June December 2005 2006 2006 (unaudited) (audited) (unaudited) (restated) (restated) £'000 £'000 £'000 Exchange differences on translation of foreignoperations (21) 3 5Actuarial (loss)/gain taken directly in equity (11) 74 96Tax on items taken directly in equity 3 (22) (29) ___________________________________ Net (expense)/income recognised directly in equity (29) 55 72Net profit for the period 2,908 2,448 7,115 ___________________________________ Total recognised income and expense for the period 2,879 2,503 7,187 ===================================Attributable to Equity holders of the parent 2,695 2,350 6,500 Minority interests 184 153 687 ___________________________________ 2,879 2,503 7,187 =================================== Wilmington Group plcConsolidated Balance Sheet As at As at As at 31 December 30 June 31 December 2005 2006 2006 (unaudited) (audited) (unaudited) (restated) (restated) £'000 £'000 £'000 Non-current assetsGoodwill 49,207 45,156 47,187Intangible assets 37,336 28,525 32,897Property, plant and equipment 11,442 11,424 11,201Deferred tax asset 129 148 212 _________________________________ 98,114 85,253 91,497 _________________________________Current assetsInventories 2,032 1,948 1,504Trade and other receivables 19,694 16,328 19,006Cash 4,146 3,181 2,855 _________________________________ 25,872 21,457 23,365 _________________________________ Total assets 123,986 106,710 114,862 _________________________________Current liabilitiesTrade and other payables (27,752) (22,887) (30,168)Tax liabilities (2,120) (1,128) (1,405)Bank overdrafts and loans (4,673) (3,601) - _________________________________ (34,545) (27,616) (31,573) _________________________________Non-current liabilitiesBank loans (20,000) (16,000) (16,000)Retirement benefit obligation (246) (292) (254)Deferred tax liability (5,888) (3,815) (4,594) _________________________________ (26,134) (20,107) (20,848) _________________________________ Total liabilities (60,679) (47,723) (52,421) _________________________________ Net assets 63,307 58,987 62,441 =================================EquityShare capital 4,208 4,180 4,180Share premium account 42,977 42,658 42,658Capital reserve 949 949 949Translation reserve (32) (13) (11)Share option reserve 108 74 91Retained earnings 13,300 9,781 12,841 _________________________________ Equity shareholders' funds 61,510 57,629 60,708Minority interests 1,797 1,358 1,733 _________________________________ Total equity 63,307 58,987 62,441 ================================= Wilmington Group plcConsolidated Cash Flow Statement Six months Six months Twelve ended 31 ended 31 months December December ended 30 2006 2005 June 2006 (unaudited) (unaudited) (audited) Note £'000 £'000 £'000 Net cash flow from operating activities 7 1,912 1,660 12,416 Investing activities Purchase of property, plant and equipment (534) (314) (909) Sale of property, plant and equipment 42 9 40 Purchase of subsidiary undertakings and minority interests (7,210) (10,338) (14,524) Cash acquired on purchase of subsidiary undertakings 966 1,137 1,567 Sale of subsidiary undertakings - 2,414 2,466 Purchase of goodwill and intangible assets (430) (228) (2,269) ________________________________ Net cash used in investing activities (7,166) (7,320) (13,629) ________________________________ Financing activities Dividends paid to equity holders of the parent (2,257) (2,048) (3,135) Dividends paid to minority shareholders in subsidiary undertakings (218) (516) (601) Issue of ordinary shares 347 - - Increase in long term loans 4,000 6,000 6,000 ________________________________ Net cash flows from financing activities 1,872 3,436 2,264 ________________________________ Net (decrease)/increase in cash and cash equivalents (3,382) (2,224) 1,051Cash and cash equivalents at beginning of the period 2,855 1,804 1,804 ________________________________ Cash and cash equivalents at end of the period (527) (420) 2,855 ================================ Notes to the Accounts 1. Segmental information Six months Six months Twelve months ended 31 ended 31 ended 30 December December June 2006 2005 2006 (unaudited) (unaudited) (audited) £'000 £'000 £'000 Revenue:Legal and Regulatory 28,138 21,933 52,014Healthcare 5,524 4,847 11,228Business Communications 12,067 13,268 26,526 __________________________________ 45,729 40,048 89,768 ================================== To allow shareholders to gain a better understanding of the trading performance of theGroup, segmental results are shown both before and after allocating non-recurring costsand amortisation. Six months Six months Twelve months ended 31 ended 31 ended 30 December December June 2006 2005 2006 (unaudited) (unaudited) (audited) (restated) (restated) Note £'000 £'000 £'000 Segmental results (before allocating amortisation):Legal and Regulatory 5,812 4,383 12,291Healthcare 716 744 2,073Business Communications 321 714 2,035 __________________________________ Total segmental results 6,849 5,841 16,399 Less: unallocated central overheads (939) (755) (1,548) __________________________________ Profit from continuing operations before amortisation, inducement fee and transaction costs 5,910 5,086 14,851Add: inducement fee net of transaction costs/(transaction costs) 1,208 - (1,200) __________________________________ Profit from continuing operations after inducement fee andtransaction costs but before amortisation 7,118 5,086 13,651Less: finance costs (592) (458) (1,049) __________________________________ Profit before taxation and amortisation 6,526 4,628 12,602Less: amortisation (2,357) (1,320) (3,264) __________________________________ Profit on ordinary activities before taxation 4,169 3,308 9,338Income tax expense 2 (1,261) (986) (2,354)Profit on discontinued operations after taxation 3 - 126 131 __________________________________ Net profit for the period 2,908 2,448 7,115 ================================== Segmental results (after allocating amortisation):Legal and Regulatory 4,502 3,976 10,791Healthcare 364 411 1,456Business Communications (374) 134 888 __________________________________ Total segmental results 4,492 4,521 13,135 Less: unallocated central overheads (939) (755) (1,548) __________________________________ Profit from continuing operations before inducement fee and transaction costs 3,553 3,766 11,587Add: inducement fee net of transaction costs/(transaction costs) 1,208 - (1,200) __________________________________ Profit from continuing operations after inducement fee and transaction costs 4,761 3,766 10,387Less: finance cost (592) (458) (1,049) __________________________________ Profit on ordinary activities before taxation 4,169 3,308 9,338Tax on ordinary activities 2 (1,261) (986) (2,354)Profit for the period from discontinued operations 3 - 126 131 __________________________________ Net profit for the period 2,908 2,448 7,115 ================================== The inducement fee and transaction costs relate to the proposed merger withMetal Bulletin plc referred to in the Company's accounts for the year ended 30June 2006. 2. Income tax expense Six months Six months Twelve months ended 31 ended 31 ended 30 December December June 2006 2005 2006 (unaudited) (unaudited) (audited) £'000 £'000 £'000The tax charge comprises:UK corporation tax at current rates 1,668 1,198 3,153Adjustment to previous year - 8 (177) ___________________________________ 1,668 1,206 2,976Foreign tax 138 133 300 ___________________________________ 1,806 1,339 3,276Deferred taxcredit - current year (545) (353) (640) - prior year - - (282) ___________________________________ Income tax expense 1,261 986 2,354 =================================== 3. Profit for the period from discontinued operations The results of the discontinued operations, which have been included in theconsolidated income statement, were as follows: Six months Six months Twelve ended 31 ended 31 months December December ended 30 2006 2005 June (unaudited) (unaudited) 2006 (audited) £'000 £'000 £'000 Revenue - 316 309Expenses - (528) (519) ___________________________________ Loss before amortisationand taxation - (212) (210)Amortisation - (84) (86) ___________________________________ Loss before taxation - (296) (296)Attributabletax credit - 64 63 ___________________________________ Net operating lossattributable todiscontinuedoperations - (232) (233) Profit on disposal ofdiscontinued operations - 462 475Attributabletax charge - (104) (111) - 358 364 ___________________________________ Profit on discontinued operationsafter taxation - 126 131 =================================== 4. Dividends Amounts recognised as distributions to equity holders in the period. Six months Six months Twelve Six months Six months Twelve ended ended months ended ended months 31 December 31 December ended 31 December 31 December ended 2006 2005 30 June 2006 2005 30 June (unaudited) (unaudited) 2006 (unaudited) (unaudited) 2006 Pence per Pence per (audited) £'000 £'000 (audited) share share Pence per £'000 shareFinaldividendsrecognised asdistributionsin the period 2.70 2.45 2.45 2,257 2,048 2,048Interimdividendsrecognised asdistributionsin the period - - 1.30 - - 1,087 __________________________________________________________________ Totaldividends paid 2.70 2.45 3.75 2,257 2,048 3,135 ==================================================================Dividendproposed 2.00 1.30 2.70 1,682 1,087 2,257 ================================================================== 5. Earnings per share To allow shareholders to gain a better understanding of the trading performanceof the Group, an adjusted earnings per ordinary share has been calculated usingan adjusted profit after taxation and minority interests but before amortisationof intangible assets and post-taxation non-recurring costs. (a) From continuing operations The calculation of the basic and diluted earnings per share is based on thefollowing data: Six months Six months Twelve ended 31 ended 31 months December December ended 30 2006 2005 June 2006 (unaudited) (unaudited) (audited) (restated) (restated) £'000 £'000 £'000Earnings from continuing operations for the purpose of basic earnings per share excludingdiscontinued operations 2,724 2,169 6,297Add: Amortisation (net of minority interest effect and deferred tax) 1,792 960 2,584 Non-recurring items after taxation (846) - 840 ____________________________________ Earnings for the purposes of adjustedearnings per share 3,670 3,129 9,721 ==================================== Number Number NumberWeighted average number of ordinary shares for the purposes of basic and adjusted earnings pershare 83,862,081 83,600,179 83,600,179 Effect of dilutive potential ordinary sharesExercise of share options 216,812 554,211 555,262 ____________________________________ Weighted average number of ordinary shares for the purposes of diluted earnings per share 84,078,893 84,154,390 84,155,441 ==================================== Basic earnings per share 3.25p 2.59p 7.53pDiluted earnings per share 3.24p 2.58p 7.48pAdjusted basic earnings per share 4.38p 3.74p 11.63pAdjusted diluted earnings per share 4.36p 3.72p 11.55p ==================================== (b) From continuing and discontinued operations Six months Six months Twelve ended 31 ended 31 months December December ended 30 2006 2005 June 2006 (unaudited) (unaudited) (audited) (restated) (restated) £'000 £'000 £'000 Earnings from continuing operations for the purpose of basic earnings per share excludingdiscontinued operations 2,724 2,169 6,297Adjustments to include the profit/ (loss)for the period from discontinued operations - 126 131 _________________________________ Earnings from continuing and discontinuedoperations for the purpose of basic earningsper share 2,724 2,295 6,428 Add: Amortisat ion (net of minority interest effect and deferred tax) 1,792 1,054 2,670 Non-recurring items after taxation (846) - 840 _________________________________ Earnings for the purposes of adjustedearnings per share 3,670 3,349 9,938 ================================= Basic earnings per share 3.25p 2.75p 7.69pDiluted earnings per share 3.24p 2.73p 7.64pAdjusted basic earnings per share 4.38p 4.01p 11.89pAdjusted diluted earnings per share 4.36p 3.98p 11.81p ================================== 6. Acquisitions In October 2006 the Group acquired 82.7 per cent. of Mercia Group Limited for aninitial cash consideration of £7,146,000. At this stage the fair value of theassets and liabilities acquired has not yet been finalised. Full details will begiven in the Group's accounts for the year ending 30 June 2007. Sinceacquisition Mercia Group Limited has generated revenue of £1,918,000 and made aprofit before tax of £285,000. Had the Group owned Mercia Group Limited for thewhole six months since June 2006 it would have generated revenue of £3,184,000and made a profit before tax of £283,000. Goodwill and intangible asset valuations arising on the acquisition of Ark GroupLimited and Smee and Ford Limited during the twelve months ended 30 June 2006have now been finalised. The resulting reallocation between goodwill andintangible assets and the consequential impact on deferred tax and amortisationhave been treated as a prior year adjustment and the comparative figures havebeen restated. Goodwill at 31 December 2005 and 30 June 2006 has decreased by£3,146,000 and £5,408,000 respectively whilst intangible assets at 31 December2005 and 30 June 2006 have increased by £4,317,000 and £7,001,000 respectively.The deferred tax liabilities at 31 December 2005 and 30 June 2006 have increasedby £1,213,000 and £1,990,000 respectively. The amortisation charges for the sixmonths to 31 December 2005 and twelve months to 30 June 2006 have increased by£177,000 and £725,000 respectively with a corresponding increase in therespective deferred tax credits of £135,000 and £328,000. 7. Net Cash from Operating Activities Six months Six months Twelve ended 31 ended 31 months ended December December 30 June 2006 2005 2006 (unaudited) (unaudited) (audited) (restated) (restated) £'000 £'000 £'000 Profit from operations after inducement fee and transaction costs 4,761 3,766 10,387(Inducement fee net of transactioncosts)/transaction costs (1,208) - 1,200 ___________________________________ Profit from operations beforeinducement fee and transactioncosts 3,553 3,766 11,587Cash effect of inducement fee net oftransaction costs 208 - - ___________________________________ 3,761 3,766 11,587Operating loss from discontinuedoperations - (296) (296)Depreciation of property, plant andequipment 717 808 1,574Amortisation of intangible assets 2,357 1,404 3,350Loss/(profit) on disposal of property,plant and equipment 1 (28) (6)Exchange translation differences (21) 3 5Share option charge 17 17 34 ___________________________________ Operating cash flows before movements inworking capital 6,832 5,674 16,248(Increase)/decrease in inventories (528) (441) 4Decrease in receivables 1,381 2,575 507(Decrease)/increase in payables (4,089) (3,939) 182 ___________________________________ Cash generated by operations 3,596 3,869 16,941Tax paid (1,096) (1,786) (3,547)Interest paid (588) (423) (978) ___________________________________ Net cash flow from operating activities 1,912 1,660 12,416 =================================== 8. Nature of Information The interim accounts for the six months ended 31 December 2006 and thecomparative figures for the six months ended 31 December 2005 are neitheraudited nor reviewed by the Company's auditors. The comparative figures for thetwelve months ended 30 June 2006 are not the Company's statutory accounts withinthe meaning of Section 240 of the Companies Act 1985 but are abridged from suchaccounts. The financial statements for the twelve months ended 30 June 2006 havebeen reported on by the Company's auditors and delivered to the Registrar ofCompanies. The report of the auditors on such accounts was unqualified and didnot contain any statement under Sections 237(2) or 237(3) of the Companies Act1985. The interim accounts and the comparative figures are prepared on the basis ofthe accounting policies set out in the accounts of the Group for the twelvemonths ended 30 June 2006. Copies of this report are available from the Company's registered office atPaulton House, 8 Shepherdess Walk, London N1 7LB. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Wilmington