TIDMWIL
RNS Number : 2739M
Wilmington PLC
20 September 2021
20 September 2021
Wilmington plc
Digitisation drives profits up 27%
Wilmington plc, (LSE: WIL 'Wilmington', 'the Group') the
provider of data, information, education and training in the global
Governance, Risk and Compliance markets, today announces its full
year results for the year ended 30 June 2021.
Financial highlights
- Revenues flat at GBP113.0m (2020: GBP113.1m) despite full 12
months of Covid-19 restrictions
- Organic(1) revenue growth 3% (2020: down 8%) demonstrating continued strong demand
- Adjusted profit before tax(2) up 27% to GBP15.0m (2020:
GBP11.9m) reflecting focus on costs and efficiencies realised
through conversion to digital
- Adjusted basic earnings per share(3) up 27% to 13.62p (2020: 10.71p)
- Statutory loss before tax GBP2.0m (2020: profit GBP6.4m),
basic loss per share of 5.18p (2020: earnings 5.33p) impacted by
GBP14.8m non-cash impairment charges
- Dividend reinstated in the year, final dividend at 3.9p (2020:
nil); total dividend 6.0p (2020: nil)
- Strong cash conversion(4) of 104% (2020: 189%)
- Significantly reduced Group net debt (excluding lease
liabilities) at GBP17.2m (2020: GBP27.7m) reflecting strong
trading, effective working capital management and small product
disposal.
Operational highlights
- Continued strong demand demonstrates success of digitisation strategy
- Renewed strategic focus on large and growing Governance, Risk
and Compliance (GRC) and Regulatory Compliance markets
- Portfolio of Group businesses reorganised into two divisions:
Information & Data and Training & Education, reflecting
broad range of complementary GRC solutions
- Operational focus on clearly defined pillars of growth:
simplified structure, leadership and people, data and technology,
product, and sales and marketing
- Performed ESG materiality assessment in H2, developed roadmap
for FY22 progress, and early adopted TCFD.
Mark Milner, Chief Executive Officer, commented:
"We have continued to refine and embed our digital capabilities
across the business. This reflects our ambition to create a fully
digital enterprise whilst retaining the flexibility to offer our
customers face-to-face and hybrid solutions.
"These strong results with profitability up 27% demonstrate the
continued and growing demand for our information and data products,
despite the disruption caused by the pandemic.
"We are now at an inflexion point with a simplified portfolio
and are well positioned to address large and growing markets which
are increasingly online.
"The current financial year has started well, in line with our
expectations."
(1) Organic - eliminating the effects of exchange rate
fluctuations and the impact of acquisitions and disposals
(2) Adjusted profit before tax - see note 3
(3) Adjusted earnings per share - see note 10
(4) Cash conversion - see note 19
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 7422 6800
Mark Milner, Chief Executive Officer
Guy Millward, Chief Financial Officer
Meare Consulting
Adrian Duffield 07990 858548
Notes to Editors
Wilmington plc is the recognised knowledge leader and partner of
choice for data, information, education and training in the global
Governance, Risk and Compliance (GRC) markets. Wilmington employs
close to 1,000 people and sells to around 120 countries. Wilmington
is listed on the main market of the London Stock Exchange.
Chairman's statement
I am pleased to present the results for the year ended 30 June
2021. We made good progress in the year, demonstrating the value of
our diversified portfolio and digital-first strategy while we
continue to adapt to the impact of Covid-19.
Despite a full 12 months of Covid-19 restrictions we traded
strongly in FY21 and delivered revenues unchanged on FY20, despite
four months of disruption at the beginning of the pandemic causing
an 8% decline in revenues year-on-year. In FY21 organic revenue
growth was achieved by our information and data products, and
within our training products revenues only decreased in our
face-to-face businesses.
Adjusted profits at all levels were up, reflecting a continuous
focus on costs and improved margins achieved through the move to
virtual solutions. Strong trading combined with a focus on working
capital management, and a small product disposal, enabled us to
greatly reduce our net debt position (excluding lease liabilities)
to GBP17.2m as at 30 June 2021, GBP10.5m better than 30 June 2020.
As a result, we honoured our commitment to reinstate the dividend
and repaid all amounts received from the UK government's furlough
scheme relating to this financial year.
In June 2021 we announced a new group structure and operating
model to increasingly focus the business on the resilient and
growing GRC and Regulatory Compliance markets. We report here for
the first time our new divisions: Information & Data and
Training & Education, which reflect the broad range of
complementary products and solutions we offer to our customers. In
last year's report, I outlined our key areas of strategic focus:
organic revenue growth, investing in our business and managing our
portfolio. Despite the pandemic, we made good progress in all these
areas so that we continue to realise the benefit of recent
investments.
Derek Carter and Nathalie Schwarz stood down from the Board at
the conclusion of the AGM on 4 November 2020 after completing their
full nine-year terms as Independent Non--Executive Directors. I
would like to thank them for their outstanding contributions to
Wilmington. Nathalie was replaced as Chair of the Remuneration
Committee by Helen Sachdev. Paul Dollman, the current Chair of the
Audit Committee, has assumed the role of Senior Independent
Director. In February 2021 I was delighted to welcome William
Macpherson to the Board as Non-Executive Director, the director
responsible for worker representation and Chair of the Nominations
Committee. William has a strong commercial background in the
professional education sector and is providing valuable counsel to
the Group.
Most importantly, I would like to thank all our employees for
their continued commitment and resilience in these testing and
difficult times. Throughout the crisis we have been, and will
continue to be, guided first and foremost by the need to protect
the health and wellbeing of our employees while remaining focussed
on serving our customers to the highest standards.
Martin Morgan
Chairman
Chief Executive's review
Overview
Our diversified portfolio has continued to demonstrate agility
and resilience in the face of ongoing disruption caused by the
pandemic. The work done over the last 12 months, to refine our
digital-first model and to focus the business on the GRC and
Regulatory Compliance markets, reflects a period of positive
change.
Following the rapid acceleration of our digitisation strategy in
the year to June 2020, throughout FY21 we have concentrated on
further refining and embedding our strong digital capabilities
across the business. This work reflects our ambition to create a
fully digital enterprise whilst retaining the flexibility to offer
our customers face-to-face and hybrid solutions according to their
needs.
Our financial performance demonstrates that demand for our
products remains strong, and that our ability to respond to our
customers' needs continues to cement our position as their trusted
partner when navigating the complexity of the Regulatory Compliance
landscape.
Reported Group revenue was flat, but up 3% on an organic basis.
This result reflects solid uptake of our core information and data
products, strong conversion of new sales opportunities in ICA
Singapore, and high demand driving double-digit revenue growth in
the legal sector businesses. Growth in these areas was partly
offset by the anticipated reduction in face-to-face training and
event revenues caused by Covid-19 related restrictions.
A continued focus on cost management and further efficiencies
realised through the conversion to digital resulted in adjusted
profit before tax (PBT) growth of 27% to GBP15.0m (2020: GBP11.9m)
and a corresponding improvement in adjusted PBT margin to 13.3%
(2020: 10.5%).
This resulted in adjusted basic earnings per share being up 27%.
We also are proposing a final dividend of 3.9p (total of 6.0p). The
Group's net debt (excluding lease liabilities) was sharply down at
GBP17.2m (2020: GBP27.7m).
Strategy
We announced in June 2021 that our strategic focus will be
centred on building upon our already strong presence in the large,
growing and rapidly evolving GRC and Regulatory Compliance markets.
These markets are the intent of and actions undertaken by
organisations, entities and individuals to both understand and
align their activities and ethics with the relevant legal, policy
and regulatory frameworks within which they operate.
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 GRC and Regulatory Compliance
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.
We continue to develop new products, identify clear organic
growth opportunities and consider acquisition targets which
complement and/or extend our capabilities.
Current trading and outlook
We have strong foundations with our leading brands which have
shown notable resilience during the pandemic whilst our large
markets are seeing strong growth.
We have made the switch to a digital first business with the
capability to offer face-to-face and hybrid solutions and have
invested in our data capabilities and new product development. We
also have a simplified structure and an operational focus on
execution excellence.
Trading in the first two months of the year has been
encouraging, with both revenue and profits in line with
expectation.
Operational review
In order to execute our strategy, we reorganised our portfolio
into two divisions: Information & Data and Training &
Education. This simplified structure clusters our businesses to
drive synergies and provides a scalable platform for acquisitions
and strong integration capabilities.
As previously announced, we are actively managing the portfolio
by assessing the potential of each business to contribute to the
delivery of our strategic objectives over the long term.
Consequently, CLT England was closed down in August 2020 and the
CLT Scotland business sold. Two product lines, one in the UK
Healthcare business, and the other a pension fund product were
withdrawn.
Our Information & Data division is addressing the $1bn
regulatory intelligence market. The key drivers are the increased
importance of independent, authoritative and actionable
intelligence; increased investment in technology to solve
regulatory compliance challenges; and disruptive technologies that
create opportunities and threats.
Our Training & Education division is addressing the $4bn
compliance training market. The key drivers are the shift from
insourced to outsourced training; the shift from face-to-face to
digital and blended training; increased demand for continuous
learning and micro-learning; and increased focus on ROI through
personalised learning experiences and outcomes-based
programmes.
Our strategy is executed via our clearly defined pillars of
growth: our simplified structure and key drivers of operational
excellence: Leadership and people, data and technology, product,
and sales and marketing. We have made progress in all areas in the
year.
Our work to embed a positive culture and high employee
engagement reflected a focus on Learning and Development and
Diversity and Inclusion, whilst we remained committed to enhancing
employee experience by delivering a responsive portfolio of
wellbeing resources and a broad range of personal development
opportunities.
We delivered against our objective to roll out the first phase
of the Wilmington Sales Academy and made significant progress
enhancing the sales KPI analysis capabilities which are informing
our future development in this area. We also started work to embed
an improved approach to sales packaging and pricing, which is
strongly aligned to our focus on developing consistent and
sustainable revenue streams to support long term growth.
Our sales and marketing function has become de-centralised and
so much closer to our end-user markets. We have instilled a KPI
driven sales culture and as highlighted above have a focus on
learning and development. We are also using technology more
effectively and are optimising our product pricing and
packaging.
The progress we made to drive excellence in product management
reflects our commitment to embed a customer-led approach, and
throughout the year we engaged closely with our customers as they
adapted to changes brought about by the pandemic. This was
complemented by our continued investment in strong digital and data
capabilities to deliver a dynamic and innovative portfolio of
solutions.
We launched the Wilmington Product Academy, specifically
designed to build a strong and consistent skills base that will
propel our success in this area. We retain a strong focus on
development methodologies using minimum viable products (MVPs),
iterative roll outs, and insights gained from data generated from
our existing processes. The Product Academy also supports our plans
to further leverage the success of recently launched products such
as the digital learning hub, by informing the development of
similar solutions in other parts of the businesses to generate
synergistic value across the portfolio.
Responsible business
As we continue to help our customers to do the right business in
the right way, we are also committed to holding ourselves
accountable and demonstrating the highest standards of responsible
business practice.
We have now implemented the actions outlined in the ESG roadmap
set in February 2021, which included performing a materiality
assessment and defining the agenda for the future. By assessing the
key issues that impact our stakeholders, the materiality assessment
process led to the refinement of our ESG strategy and concluded
that four strategic pillars will drive our progress for the next
phase of work. These four pillars, their core objectives and the
way that they support our commitment to operational excellence, are
outlined below.
Strategic Cultural Customer Proactive Environmental
pillar positivity empowerment assurance responsibility
Core objective Create equal Deliver products that Uphold high standards Reduce environmental
opportunities are accessible, high related to digital impact by minimising
and nurture talent value, up to date protection, regulatory carbon footprint
in a safe and mindful and move with industry requirements, and committing to
environment. trends. ethics & production. responsible procurement.
------------------------ ------------------------ ------------------------ ------------------------
Supporting Fostering a positive Empowering our customers Responsible digitisation Committing to
operational culture will enhance ensures our products and ethical conduct environmental
excellence employee experience are aligned to their are fundamental responsibility protects
and allow our people needs, and that our to our data and the future of our
to perform highly sales and marketing technology strategies people and demonstrates
as they continue to strategies effectively as we innovate to customers that
drive progress against convey high product to deliver the we strive to deliver
our strategic value. best-in-class products with minimal
objectives. digital products. environmental impact.
------------------------ ------------------------ ------------------------ ------------------------
We have established a governance framework around our ESG
initiatives, providing sponsorship for each pillar of the strategy
from a member of the Executive Committee and oversight from the
Board. The executive sponsors will support internal working groups
as they implement improvement initiatives to ensure that continued
and consistent progress is made to meet the core objectives. The
work planned for FY22 includes a focus on refining our approach to
data collection, to facilitate effective measurement of outputs and
to ensure that we set sufficiently challenging targets to drive
long term improvements.
In recognition of the rapidly evolving climate crisis, we have
early adopted TCFD and have accelerated our own work to address
climate change by committing to carbon neutrality in FY22, with a
further commitment to establish a roadmap for action to
subsequently become a net zero carbon business.
Review of divisional performance
Information & Data
Absolute Organic
2021 2020 variance variance
GBP'm GBP'm % %
--------------------------- ----- ----- --------- ---------
Revenue
Healthcare 28.9 27.9 4% 3%
Financial Services & Other 21.3 21.7 -2% 0%
Identity & Charities 6.6 7.0 -6% -5%
--------------------------- ----- ----- --------- ---------
Total Revenue 56.8 56.6 1% 1%
--------------------------- ----- ----- --------- ---------
Operating Profit 9.3 11.1 -16% -13%
Margin % 16% 20%
--------------------------- ----- ----- --------- ---------
Business model and market
Wilmington offers a wide range of products and services through
its Healthcare businesses predominantly around the provision of
market and customer intelligence. The core of the data supplied
comes primarily from publicly available sources. The value
generated by our services is based around its collation,
verification, combination with other complementary data sources and
then its ease of presentation and usage. In some areas we provide
proprietary analysis of the data and editorial comment which
constitutes our own intellectual property.
Wilmington's Healthcare businesses operate mainly in the UK and
France and provide deep insight information on practitioners,
facilities and treatments in the UK and French health sector
markets that enable suppliers into those markets, including
pharmaceutical companies, to understand and connect better with
their customers. Revenue is mainly earned through sales of discrete
packages of data or through subscription services for the ongoing
provision of information. Additionally, in the UK we publish the
Health Service Journal ('HSJ'), the leading online publication in
the UK for healthcare leaders, with revenue generated through
providing subscriptions to NHS foundation trusts, Clinical
Commissioning Groups and suppliers to the NHS.
The Financial Services/Other businesses operate in the
Insurance, Pensions and Compliance markets. These businesses
provide a broad range of information products and services with
revenues generated primarily through subscription but also
sponsorship, lead generation and event attendance.
The Identity & Charities business consists of a portfolio of
data products including charity fund-raising information, and
marketing data suppression tools. They include services that are
used by organisations to help prevent identify fraud. Revenue is
predominantly subscription based. We sold a pension fund product
line in this part of the business during the year.
Trading performance
Overall Information & Data revenues grew 1% in the year,
although this overall rate masks some more significant movements in
the underlying businesses.
Healthcare revenues grew 3% organically in the year despite a
significant drop in UK events revenues because no face-to-face
events took place. Non-events revenues grew 7% in the period with
UK revenues up 10% and French revenues up 7%. We closed a product
line during the year (that sold a suite of online learning courses
that familiarise UK industry participants with the complexities of
the National Health Service) as it was loss-making and we
outsourced part of the UK operations to improve future profits.
Financial Services revenues were flat organically (removing the
effect of currency) with growth in Axco, Pendragon and Compliance
Week offset by a decline in Inese revenues due to the lack of
face-to-face events in Spain. We announced last year that we were
seeking buyers for the Inese business but this process was delayed
due to Covid-19 restrictions and we will resume the process in
coming months.
Identity & Charities revenues were down 6%. We have
restructured this set of products just before the year end, selling
one product line and closing two others to focus the business on
areas we believe can grow in the future and to reduce its cost
base. The slimmed-down business will now focus on identity revenues
and a small line of revenue in the charity sector.
Information & Data divisional operating profit was down on
the previous year despite the flat revenue performance as we took
restructuring measures (closing product lines and outsourcing some
costs) to improve revenues and profits going forward. The cost of
these changes has been taken as part of normal operations.
Training & Education
Absolute Organic
2021 2020 variance variance
GBP'm GBP'm % %
----------------- ----- ----- --------- ---------
Revenue
Global 29.2 25.8 13% 16%
UK & Ireland 22.1 24.6 -10% 0%
North America 4.9 6.1 -20% -15%
----------------- ----- ----- --------- ---------
Total Revenue 56.2 56.5 -1% 6%
----------------- ----- ----- --------- ---------
Operating Profit 12.2 7.9 54% 65%
Margin % 22% 14%
----------------- ----- ----- --------- ---------
Business model and market
The Global division 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 we created in 2002 which offers professional development and
support to compliance officers predominantly in the financial
services sector. It has offices in the UK, Singapore, Malaysia and
Dubai.
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. To support the
move to virtual training in ICA a new digital learning platform
('hub') is being built - it was launched at the start of 2021 and
further developments are due for release in the coming months.
ICA primarily serves the financial services industry. The
material for ICA courses is developed by our own internal R&D
team, and external specialists, and we own the associated
intellectual property.
The other Global businesses earn revenue from running
professional development programmes for wealth managers and
training for professionals joining the investment banking industry.
Wilmington has an international presence, with centres in UK,
Europe, North America and Asia Pacific and consistent investment in
technology maintains the Group's competitive positioning.
The North America business is predominantly events based. They
serve the US healthcare/ 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 address 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 Nashville in March each year, although it
ran online in FY21. Revenue from the US events is generated from
both sponsorship and delegate sales.
The UK and Ireland division predominantly provides training for
accountants in practice and in business and individuals involved in
the legal system, including lawyers. It runs a mix of face to face,
online and blended learning for these communities. It provides
training at various levels including providing continuing
professional development for existing qualified accountants and, in
the case of the legal profession, helping them train their clients
for interaction with the legal system. 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.
The Accountancy and Legal businesses are predominantly UK and
Ireland based, reflecting the country specific laws and accounting
standards that govern their profession. Revenue in the unit is
earned through clients subscribing for ongoing training support and
other related activities over a period of time (usually twelve
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 by a network of independent
tutors who are paid per course that they deliver.
Before the impact of Covid-19, the Accountancy market was
growing, although this was somewhat offset by the continued
consolidation of smaller firms, some Brexit uncertainty and a
relatively stable backdrop in terms of tax legislation and
accounting standards. In contrast the Law for Non-Lawyers market
was strong with good demand for existing products as well as
successful launches of new training courses. Wilmington exited the
CPD training market for lawyers in FY21 when it sold its Central
Law Training (CLT) business in Scotland and closed the CLT business
in England.
Trading performance
Training & Education revenues grew organically by 6% in the
year, representing a significant improvement in the second half as
revenues were down 12% in the first half of the year.
ICA revenues were 21% up on FY20 due mainly to very strong
growth in Singapore where government funding for compliance
training, the rapid adaptation of our services to ensure compliance
with government requirements, and a restructuring of our
operations, led to a doubling of revenues. AMT saw strong growth in
FY21 of 19%, with all its courses being delivered virtually and
benefitting from strong demand from its blue-chip customer base.
CLTi had a slower year as demand for its international courses
dropped during the pandemic.
The legal sector businesses in the UK and Ireland (Bond Solon
and LaTouche) saw double-digit growth in FY21, driven by a strong
return of demand particularly in the last quarter of the year.
Accountancy revenues also had a strong second half and reduced the
deficit on FY20 seen in H1 to end the year 9% down on FY20. CLT
revenues were GBP0.6m in the year (2020: GBP2.9m) up to the closure
of CLT England in August 2020 and the sale of CLT Scotland in
December 2020.
In the US, FRA revenues ended the year 15% down on FY20. They
were more than 50% down at the half year but a strong digital
performance in H2 as well as a return to face-to-face and hybrid
events in June 2021 gives the business a strong platform to return
to growth provided that face-to-face events continue in the US in
FY22.
Overall divisional operating profit increased strongly by 54% on
FY20, mainly due to cost efficiencies realised through the lack of
face-to-face training (lower venue hire, external tutor and travel
costs). The increase also reflects the impact of the closure of
CLT, which was loss making in the prior year. As a result, the
operating profit margin rose to 22% from 14% in FY20.
Financial review
Overview
The Group performed well during the year, achieving organic
revenue growth of 3% (2020: down 8%). Revenue growth was supported
by strong cost control and efficiencies realised through conversion
to digital, driving increased profitability and a corresponding
improvement in adjusted operating margin at 14.7% (2020: 12.4%).
This resulted in strong cash generation, reflected in a
significantly reduced net debt position (including lease
liabilities) at 30 June 2021 of GBP28.0m (2020: GBP40.8m).
Adjusting items, measures and adjusted results
In this financial review reference is made to adjusted results
as well as the equivalent statutory measures. Adjusted results, in
the opinion of the Directors, provide additional relevant
information on our future or past performance where equivalent
information cannot be presented using financial measures under
IFRS. Adjusted results exclude adjusting items, gain on disposal of
subsidiaries and business operations, impairment and amortisation
of intangible assets (excluding computer software).
Organic
2021 2020 Absolute variance variance
GBP'm GBP'm GBP'm % %
------------------------ ------- ------- ---------- ---------- ----------
Revenue 113.0 113.1 (0.1) (0.0%) 3.3%
Adjusted profit before
tax 15.0 11.9 3.1 26.6% 27.9%
Margin % 13.3 10.5
------------------------ ------- ------- ---------- ---------- ----------
Variances described as 'organic' are calculated using constant
currencies and exclude the impact of the closure and disposal of
CLT England and CLT Scotland respectively, as well as the disposal
of a pension fund product line within the Information & Data
division.
Revenue
Group revenue was flat overall and increased 3% on an organic
basis.
Operating expenses before adjusting items, amortisation and
impairment
Operating expenses before adjusting items, amortisation of
intangible assets (excluding computer software) and impairment,
were GBP96.4m (2020: GBP99.0m) down GBP2.6m or 2.6%.
Within operating expenses, staff costs increased GBP1.4m to
GBP54.7m (2020: GBP53.3m). This net increase was driven by the full
year effect of investments in new roles that have been key to our
strategic progress. Discretionary staff bonuses and sales
commission payments were also GBP1.7m higher than the prior year
supported by a stronger trading performance in FY21. The increases
described above were offset by salary cost savings generated from a
reduction in the average monthly headcount during the year to 952
from 982 in the prior year. This decrease in headcount was
primarily driven by the closure of CLT England as well as the sale
of CLS Scotland and AP Pensions. There was also a small saving in
share based payment costs of GBP0.2m due to revised vesting
assumptions during the year.
Non-staff costs decreased by GBP4.0m to GBP41.7m from GBP45.7m
in the prior year. Direct costs made up GBP3.7m of this decrease,
demonstrating cost savings from a full 12-month period of running
virtual events and training as opposed to traditional, more costly
face-to-face variants. A further GBP1.6m cost saving was driven by
the closure and sale of CLT England and CLT Scotland, respectively.
These, and other cost decreases, were partly offset by an increase
in direct costs of GBP2.3m to support organic revenue growth
primarily in the Group's Compliance and Global Training
businesses.
Unallocated central overheads
Unallocated central overheads, representing Board costs and head
office salaries as well as other centrally incurred costs not
recharged to the businesses, were flat year-on-year at GBP4.3m
(2020: GBP4.3m).
Adjusted profit before tax ('adjusted PBT')
As a result of these changes in revenue, operating expenses and
finance costs, adjusted profit before tax, which eliminates the
impact of adjusting items, amortisation of intangible assets
excluding computer software, other income (when it is material or
of a significant nature), and impairment of goodwill, intangible
assets and property, plant and equipment, was up 26.6% to GBP15.0m
(2020: GBP11.9m).
Adjusted profit margin (adjusted PBT expressed as a percentage
of revenue) also increased to 13.3% (2020: 10.5%).
Amortisation excluding computer software
Amortisation of intangible assets (excluding computer software)
was GBP3.4m, compared to GBP4.8m in the previous year. The decrease
reflects certain historic assets being fully amortised part way
through the prior year.
Impairment of goodwill, intangible assets and property, plant
and equipment
An impairment charge of GBP3.0m was recognised in relation to
the goodwill and intangible assets attributable to a loss-making
product line in the Healthcare sub-division that was discontinued
during the year. GBP1.5m of this impairment charge was allocated
against goodwill, with the remaining GBP1.5m allocated to
intangible assets.
The Group's annual impairment review concluded that the carrying
value of the UK Healthcare CGU exceeded its recoverable amount.
This reflects the ongoing uncertainty around the anticipated
timeline for a return to pre-pandemic growth within the UK
Healthcare business following Covid-19 related disruption to the
healthcare industry. Consequently, an impairment charge of GBP8.4m
has been recognised to reduce the carrying value of the CGU, and
has been allocated entirely to the associated goodwill.
The right-of-use asset and associated property, plant and
equipment relating to the Group's head office premises were
impaired during the year following a decision to consolidate office
space to reflect a future of flexible working arrangements.
Management took the decision to permanently close a portion of the
head office and seek a tenant to sublease the closed portion. This
resulted in a GBP3.4m impairment charge, GBP2.8m of which was
allocated to the head office, with the remaining GBP0.6m allocated
to the associated property, plant and equipment.
This resulted in a total impairment charge of GBP14.8m which was
recognised within adjusting items for the year ended 30 June
2021.
Adjusting items within operating expenses
Adjusting items in operating expenses are those items that in
the opinion of the Directors are one-off in nature and which do not
represent the ongoing trading performance of the business. In the
year adjusting items within operating expenses were GBP3.0m (2020:
GBP0.6m). These items are mainly GBP1.9m (2020: GBPnil)
representing an onerous provision for costs associated with the
closed portion of the head office and GBP1.1m (2020: GBP0.6m)
relating to strategic activities. Costs associated with strategic
activities relate to strategic reviews of two of the Group's
businesses, Central Law Training Limited and Wilmington Inese SL in
addition to costs associated with the disposal of business
operations.
Operating loss ('EBITA')
Operating profit decreased from GBP8.6m in the prior year to an
operating loss of GBP0.4m for the year ended 30 June 2021. The
decrease is driven primarily by the impact of the adjusting items
and the GBP14.8m impairment charge detailed above, offset in part
by the profit on disposal of CLT Scotland and a pension fund
product line within the Information & Data division.
Net finance costs
Net finance costs decreased by GBP0.6m to GBP1.6m (2020:
GBP2.2m), within which interest payable on bank loans and
overdrafts fell GBP0.2m due to lower average debt balances across
the year. In addition to this, the prior year expense includes fees
in respect of the renegotiation of the Group's financing
arrangements during the year ended 30 June 2020.
Result before taxation
Loss before taxation was GBP2.0m compared to a profit before tax
in the prior year of GBP6.4m, a reconciliation of this to adjusted
profit before tax can be found in note 3.
Taxation
The tax charge for the year was GBP2.5m compared to GBP1.8m in
the prior year. Despite a significant reduction in profit before
taxation from GBP6.4m in the prior year to a loss before taxation
of GBP2.0m during the year, the main driver of this profit
reduction was the impairment charge detailed above which was not
deductible for tax purposes.
The underlying tax rate which ignores the tax effects of
adjusting items remained essentially unchanged at 20.5% (2020:
20.9%).
Earnings per share
Adjusted basic earnings per share increased by 27.2% to 13.62p
(2020: 10.71p), owing to the increase in adjusted profit before
tax, a broadly flat underlying tax rate and an essentially
unchanged number of issued ordinary shares. Basic loss per share
was 5.18p compared to a basic earnings per share of 5.33p in the
prior year, wholly reflecting the decrease in profit after tax.
Dividend
A final dividend of 3.9p per share (2020: nil) will be proposed
at the AGM. If approved it will be paid on 12 November 2021 to
shareholders on the register as at 15 October 2021 with an
associated ex-dividend date of 14 October 2021. This will give a
full year dividend of 6.0p (2020: nil) and dividend cover of 2.3
times (2020: nil).
Balance sheet
Non-current assets
Goodwill decreased by GBP12.1m from GBP77.9m to GBP65.8m which
was primarily due to the GBP8.4m impairment of goodwill relating to
the UK Healthcare CGU, as well as the GBP1.5m impairment relating
to a discontinued loss-making product line as described above.
Additionally, a weakening US Dollar led to a decrease in the
Sterling value of the US Dollar portion of the Group's
goodwill.
Intangible assets decreased by GBP5.7m from GBP19.7m to GBP14.0m
due to amortisation of GBP5.8m and an impairment of GBP1.5m as
described above. These decreases were partly offset by additions of
GBP2.0m within computer software reflecting the Group's continued
strategy to invest in the existing businesses to fuel organic
growth. Additions during the year reflect the installation of the
new virtual classroom facility in the Birmingham UK office, as well
as continued investment in Wilmington's Digital Hub. Internally
generated assets accounted for GBP0.5m of additions (2020:
GBP0.8m).
Property, plant and equipment decreased by GBP7.6m from GBP16.9m
in the prior year to GBP9.3m in the year ended 30 June 2021. Of
this decrease, GBP5.2m was attributable to right-of-use assets.
The GBP2.4m decrease in purchased property, plant and equipment
was attributable to depreciation of GBP1.2m and impairment of
GBP0.6m, partly offset by GBP1.0m of additions during the year.
Furthermore, the carrying value of GBP1.6m relating to a building
marketed for sale at 30 June 2021, as part of the exercise to
consolidate our office space, was transferred from property, plant
and equipment to assets held for sale.
As detailed above, right-of-use assets decreased by GBP5.2m to
GBP6.6m (2020: GBP11.8m) during the year. This decrease is
primarily due to the GBP2.8m impairment of the Group's head office
detailed above as well as depreciation of GBP2.2m during the
year.
Deferred consideration receivable
The deferred consideration receivable balance relates to the
disposal of ICP in July 2018. At 30 June 2021 the Group recognised
a total of GBP1.8m (2020: GBP2.2m) of deferred consideration
receivable, with GBP1.6m recognised within non-current assets and
the remaining GBP0.2m recognised within current assets. During the
year, a GBP0.1m unwind of the discount was offset by an increase of
GBP0.5m reflecting an agreed adjustment to the phasing of the
settlement plan.
Trade and other receivables
Trade and other receivables were up GBP3.2m at GBP28.7m (2020:
GBP25.5m). This increase was due in large to increased billings
compared to the prior year. The increase was partly offset by the
closure and disposal of CLT England and CLT Scotland respectively,
which collectively comprised GBP0.3m within trade receivables in
the prior year.
Current tax asset
At 30 June 2021 the Group recognised an asset relating to
current tax of GBP0.3m (2020: GBP1.3m). The net asset position
reflects a claim to carry back US losses against prior year returns
resulting in a net repayment position.
Trade and other payables
Trade and other payables decreased by GBP3.5m from GBP58.5m to
GBP55.0m. Within this, subscriptions and deferred revenue decreased
GBP1.4m or 4.3% to GBP30.1m (2020: GBP31.5m) and trade and other
payables decreased GBP2.2m to GBP24.8m (2020: GBP27.0m).
This decrease in subscriptions and deferred revenue was driven
in large by the delayed RISE Nashville event which has resulted in
fewer prepayments from event sponsors or delegates being held than
in the prior year. In addition to this, subscriptions and deferred
revenue in the prior year included GBP0.6m of deferred revenue in
respect of CLT England which was GBPnil for the year ended 30 June
2021 following its closure.
The decrease in trade and other payables was primarily driven by
the unwind of deferred VAT and payroll tax payments which were on
the balance sheet in the prior year in response to the Covid-19
pandemic. A further driver of the decrease was less spend on venues
and related costs during the year following the transition to
virtual of many of the Group's training and events.
Provisions
At 30 June 2021 a provision of GBP1.8m has been recognised in
respect of future committed cost associated with the closed portion
of the head office space.
Net debt, lease liabilities and cash flow
Net debt, which includes cash and cash equivalents, bank loans
(excluding capitalised loan arrangement fees) and bank overdrafts,
and lease liabilities was GBP28.0m (2020: GBP40.8m). This
significant decrease in net debt is driven by a strong trading
performance delivering improved profits, deployment of effective
cash management strategies as well as a small product disposal
during the year which has enabled the business to reduce the level
of drawdown debt.
Lease liabilities decreased during the year by GBP2.4m to
GBP10.7m (2020: GBP13.1m) which represents cash payments in
relation to contractual lease obligations, offset in part by
GBP0.3m of notional interest on lease liabilities reported within
net finance costs.
Cash conversion for the year ended 30 June 2021 was 104% (2020:
189%), although year-on-year comparison of the percentages has been
impacted by the unusual movement in working capital, driven by
delayed 2020 payments of UK VAT and payroll tax of GBP5.7m in the
prior year.
Derivative financial instruments
The Group is exposed to foreign exchange risks, liquidity and
capital risks and credit risks . The Group has policies that
mitigate these risks which include the use of derivative products
such as forwards and swaps subject to Board approval . The Group
uses interest rate swap contracts to mitigate part of the interest
rate volatility risk. These swaps have resulted in an asset of
GBP0.1m (2020: GBP0.1m liability) at 30 June 2021.
On 1 July 2021 the Group entered into a number of foreign
currency transactions to mitigate possible exchange rate
fluctuations on its FY22 financial results. $8.5m USD were sold
forward to mature during the 2021/2022 financial year at an average
rate of $1.38.
Share capital
During the year nil (2020: 64,350) new ordinary shares of
GBP0.05 were issued. Shares which vested during the year under the
Group's Performance Share Plan were settled via the Wilmington
Group plc Employee Share Ownership Trust.
In the year the Wilmington Group plc Employee Share Ownership
Trust purchased 129,903 ordinary shares for the purpose of future
settlement of employee share schemes. At 30 June 2021 it held
329,903 shares (2020: 200,000).
Statement of Directors' responsibilities in respect of the
financial statements
The statement of directors' responsibilities below has been
prepared in connection with the Group's full Annual Report for the
year ended 30 June 2021. Certain parts of the Annual Report have
not been included in this announcement as set out in note 1 of the
financial information.
We confirm to the best of our knowledge that:
-- the consolidated financial statements, which have been
prepared in accordance with IFRSs as adopted by the United Kingdom,
give a true and fair view of the assets, liabilities, financial
position and profit of the Group;
-- the management report represented by the report of the
Directors, and material incorporated by reference, includes a fair
review of the development and performance of the business and the
position of the Group, together with a description of the principal
risks and uncertainties that they face; and
-- the Annual Report, taken as a whole, is fair, balanced and
understandable and provides the information necessary for
shareholders to access the company's performance, business model
and strategy.
This responsibility statement was approved by the board of
Directors on 17 September 2021 and is signed on its behalf by
Guy Millward
Chief Financial Officer
Consolidated income statement
for the year ended 30 June 2021
Year ended Year ended
30 June 2021 30 June 2020
Notes GBP'000 GBP'000
-------------------------------------------------------- ----- ------------- -------------
Continuing operations
Revenue 4 113,027 113,075
-------------------------------------------------------- ----- ------------- -------------
Operating expenses before amortisation of intangibles
excluding computer software, impairment and adjusting
items (96,378) (99,044)
Impairment of goodwill, intangible assets and property,
plant and equipment 5a (14,834) -
Amortisation of intangible assets excluding computer
software 5b (3,400) (4,797)
Adjusting items 5b (2,970) (625)
-------------------------------------------------------- ----- ------------- -------------
Operating expenses 6 (117,582) (104,466)
Other income - gain on disposal of business operations 11 3,394 -
Other income - gain on disposal of subsidiary 11 770 -
-------------------------------------------------------- ----- ------------- -------------
Operating (loss)/profit (391) 8,609
-------------------------------------------------------- ----- ------------- -------------
Net finance costs 7 (1,634) (2,175)
-------------------------------------------------------- ----- ------------- -------------
(Loss)/profit before tax (2,025) 6,434
Taxation 8 (2,522) (1,760)
-------------------------------------------------------- ----- ------------- -------------
(Loss)/profit for the year attributable to owners
of the parent (4,547) 4,674
-------------------------------------------------------- ----- ------------- -------------
(Loss)/earnings per share:
Basic (p) 10 (5.18) 5.33
Diluted (p) 10 (5.18) 5.26
-------------------------------------------------------- ----- ------------- -------------
Consolidated statement of comprehensive income
for the year ended 30 June 2021
Year ended Year ended
30 June 30 June
2021 2020
GBP'000 GBP'000
---------------------------------------------------- ---------- ----------
(Loss)/profit for the year (4,547) 4,674
Other comprehensive (expense)/income:
Items that may be reclassified subsequently to the
income statement
---------------------------------------------------- ---------- ----------
Fair value movements on interest rate swaps, net of
tax 93 116
Currency translation differences (1,732) 513
Fair value movements of net investment hedges, net
of tax 762 (237)
---------------------------------------------------- ---------- ----------
Other comprehensive (expense)/income for the year,
net of tax (877) 392
---------------------------------------------------- ---------- ----------
Total comprehensive (expense)/income for the year
attributable to owners of the parent (5,424) 5,066
---------------------------------------------------- ---------- ----------
Items in the statement above are disclosed net of tax. The
income tax relating to each component of other comprehensive income
is disclosed in note 8.
Consolidated balance sheet
as at 30 June 2021
2021 2020
Notes GBP'000 GBP'000
---------------------------------- ----- -------- ---------
Non-current assets
Goodwill 12 65,833 77,876
Intangible assets 13 14,000 19,712
Property, plant and equipment 14 9,277 16,894
Deferred consideration receivable 1,585 2,163
Derivative financial instruments 57 -
Deferred tax assets 1,364 1,189
---------------------------------- ----- -------- ---------
92,116 117,834
---------------------------------- ----- -------- ---------
Current assets
Trade and other receivables 15 28,698 25,526
Deferred consideration receivable 250 -
Current tax assets 312 1,314
Cash and cash equivalents 7,374 21,426
Assets held for sale 14 1,588 -
---------------------------------- ----- -------- ---------
38,222 48,266
---------------------------------- ----- -------- ---------
Total assets 130,338 166,100
---------------------------------- ----- -------- ---------
Current liabilities
Trade and other payables 16 (54,959) (58,495)
Lease liabilities 17 (2,356) (2,660)
Derivative financial instruments - (59)
Borrowings (3,644) -
Provisions 18 (461) -
---------------------------------- ----- -------- ---------
(61,420) (61,214)
---------------------------------- ----- -------- ---------
Non-current liabilities
Borrowings (20,430) (48,495)
Lease liabilities 17 (8,386) (10,461)
Deferred tax liabilities (2,054) (2,524)
Provisions 18 (1,381) -
---------------------------------- ----- -------- ---------
(32,251) (61,480)
---------------------------------- ----- -------- ---------
Total liabilities (93,671) (122,694)
---------------------------------- ----- -------- ---------
Net assets 36,667 43,406
---------------------------------- ----- -------- ---------
Equity
Share capital 4,380 4,380
Share premium 45,225 45,225
Treasury and ESOT reserves (701) (590)
Share based payments reserve 1,390 1,195
Translation reserve 2,069 3,801
Accumulated losses (15,696) (10,605)
---------------------------------- ----- -------- ---------
Total equity 36,667 43,406
---------------------------------- ----- -------- ---------
Consolidated statement of changes in equity
for the year ended 30 June 2021
Share capital,
share premium,
ESOT shares Share based
and treasury payments Translation Accumulated
shares reserve reserve losses Total equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------- --------------- ----------- ----------- ----------- ------------
At 30 June 2019 49,506 839 3,288 (10,765) 42,868
Effect of initial application
of IFRS 16 - - - (180) (180)
Tax relating to initial
application of IFRS 16 - - - 34 34
------------------------------------- --------------- ----------- ----------- ----------- ------------
At 1 July 2019 49,506 839 3,288 (10,911) 42,722
Profit for the year - - - 4,674 4,674
Other comprehensive income/(expense)
for the year - - 513 (121) 392
------------------------------------- --------------- ----------- ----------- ----------- ------------
49,506 839 3,801 (6,358) 47,788
Transactions with owners:
Dividends paid - - - (4,378) (4,378)
Issue of share capital 3 (242) - 239 -
ESOT share purchases (497) - - - (497)
Sale of treasury shares 3 - - - 3
Share based payments - 598 - - 598
Tax on share based payments - - - (108) (108)
------------------------------------- --------------- ----------- ----------- ----------- ------------
At 30 June 2020 49,015 1,195 3,801 (10,605) 43,406
Loss for the year - - - (4,547) (4,547)
Other comprehensive (expense)/income
for the year - - (1,732) 855 (877)
------------------------------------- --------------- ----------- ----------- ----------- ------------
49,015 1,195 2,069 (14,297) 37,982
Transactions with owners:
Dividends paid - - - (1,829) (1,829)
Performance share plan awards
vesting settled via ESOT 137 (241) - 104 -
ESOT share purchases (263) - - - (263)
Sale of treasury shares 15 - - - 15
Share based payments - 436 - - 436
Tax on share based payments - - - 326 326
------------------------------------- --------------- ----------- ----------- ----------- ------------
At 30 June 2021 48,904 1,390 2,069 (15,696) 36,667
------------------------------------- --------------- ----------- ----------- ----------- ------------
Consolidated cash flow statement
for the year ended 30 June 2021
Year ended Year ended
30 June 30 June
2021 2020
Notes GBP'000 GBP'000
------------------------------------------------------ ----- ---------- ----------
Cash flows from operating activities
Cash generated from operations before adjusting
items 19 17,290 26,512
Cash flows for adjusting items - operating
activities (339) (293)
Cash flows from share based payments 9 (16)
------------------------------------------------------ ----- ---------- ----------
Cash generated from operations 16,960 26,203
Interest paid (1,196) (1,632)
Tax paid (2,697) (4,377)
------------------------------------------------------ ----- ---------- ----------
Net cash generated from operating activities 13,067 20,194
------------------------------------------------------ ----- ---------- ----------
Cash flows from investing activities
Disposal of subsidiary 11 400 -
Disposal of business operations 11 4,144 -
Deferred consideration paid - (1,957)
Deferred consideration received 250 200
Cash flows for adjusting items - investing
activities (151) (217)
Purchase of property, plant and equipment (1,047) (538)
Proceeds from disposal of property, plant and
equipment 103 27
Purchase of intangible assets (1,969) (3,315)
------------------------------------------------------ ----- ---------- ----------
Net cash generated from/(used in) investing
activities 1,730 (5,800)
------------------------------------------------------ ----- ---------- ----------
Cash flows from financing activities
Dividends paid to owners of the parent (1,829) (4,378)
Share issuance costs - (3)
Payment of lease liabilities (2,530) (2,392)
Purchase of shares by ESOT (263) (497)
Fees relating to new and extended loan facility (191) (741)
Increase in bank loans 2,000 14,000
Decrease in bank loans (29,181) (7,000)
------------------------------------------------------ ----- ---------- ----------
Net cash used in financing activities (31,994) (1,011)
------------------------------------------------------ ----- ---------- ----------
Net (decrease)/increase in cash and cash equivalents,
net of bank overdrafts (17,197) 13,383
------------------------------------------------------ ----- ---------- ----------
Cash and cash equivalents, net of bank overdrafts
at beginning of the year 21,426 7,921
Exchange (loss)/gain on cash and cash equivalents (499) 122
------------------------------------------------------ ----- ---------- ----------
Cash and cash equivalents, net of bank overdrafts
at end of the year 3,730 21,426
------------------------------------------------------ ----- ---------- ----------
Reconciliation of net debt
------------------------------------------------------ ----- ---------- ----------
Cash and cash equivalents at beginning of the
year 21,426 7,921
Bank overdrafts at beginning of the year - -
Bank loans at beginning of the year (49,082) (41,790)
Lease liabilities at beginning of the year (13,121) -
------------------------------------------------------ ----- ---------- ----------
Net debt at beginning of the year (40,777) (33,869)
------------------------------------------------------ ----- ---------- ----------
Net (decrease)/increase in cash and cash equivalents,
net of bank overdrafts (17,696) 13,505
Net repayment/(drawdown) in bank loans 27,181 (7,000)
Exchange gain/(loss) on bank loans 941 (292)
Movement in lease liabilities/(transition to
IFRS 16) 2,379 (13,121)
------------------------------------------------------ ----- ---------- ----------
Cash and cash equivalents at end of the year 7,374 21,426
Bank overdrafts at end of the year (3,644) -
Bank loans at end of the year (20,960) (49,082)
Lease liabilities at end of the year (10,742) (13,121)
------------------------------------------------------ ----- ---------- ----------
Net debt at end of the year (27,972) (40,777)
------------------------------------------------------ ----- ---------- ----------
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. The financial information has been extracted from the
Group's Annual Report and Financial Statements for the year ended
30 June 2021 on which an unqualified report has been made by the
Company's auditors.
Financial statements for the year ended 30 June 2020 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 2021 statutory
accounts will be delivered in due course.
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 2021 has
been prepared in accordance with International Financial Reporting
Standards as adopted by the United Kingdom. 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 2020. There was no material effect from the adoption
of new standards or interpretations in the year ended 30 June
2021.
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, intangible assets and property, plant and equipment;
-- amortisation of intangible assets excluding computer software;
-- adjusting items (included in operating expenses);
-- other income - gain on disposal of subsidiary;
-- other income - gain on disposal of business operations; and
-- net finance costs.
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
2021 2020
GBP'000 GBP'000
-------------------------------------------------------- ---------- ----------
(Loss)/profit before tax (2,025) 6,434
Impairment of goodwill, intangible assets and property,
plant and equipment 14,834 -
Amortisation of intangible assets excluding computer
software 3,400 4,797
Adjusting items (included in operating expenses) 2,970 625
Other income - gain on disposal of business operations (3,394) -
Other income - gain on disposal of subsidiary (770) -
-------------------------------------------------------- ---------- ----------
Adjusted profit before tax 15,015 11,856
Net finance costs 1,634 2,175
-------------------------------------------------------- ---------- ----------
Adjusted operating profit ('adjusted EBITA') 16,649 14,031
Depreciation of property, plant and equipment included
in operating expenses 3,399 3,199
Amortisation of intangible assets - computer software 2,416 2,080
-------------------------------------------------------- ---------- ----------
Adjusted EBITA before depreciation ('adjusted EBITDA') 22,464 19,310
-------------------------------------------------------- ---------- ----------
4. Segmental information
In accordance with IFRS 8 the Group's operating segments are
based on the operating results reviewed by the Board, which
represents the chief operating decision maker.
During the year, the Group reorganised its business into two
Divisions (Training & Education and Information &
Data).
The Group's dynamic portfolio provides customers with a range of
information, data, training and education solutions. The two
divisions (Training & Education and Information & Data) are
the Group's segments and generate all of the Group's revenue. The
Board considers the business from both a geographic and product
perspective. Geographically, management considers the performance
of the Group between the UK, Europe (excluding the UK), North
America and the Rest of the World.
a) Business segments
Revenue Profit Revenue Profit
Year ended Year ended Year ended Year ended
30 June 2021 30 June 2021 30 June 2020 30 June 2020
GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------------ ------------- ------------- ------------- -------------
Training & Education 56,211 12,197 56,474 7,933
Information & Data 56,816 9,320 56,601 11,077
------------------------------------------ ------------- ------------- ------------- -------------
Group total 113,027 21,517 113,075 19,010
Unallocated central overheads - (4,302) - (4,255)
Share based payments - (566) - (724)
------------------------------------------ ------------- ------------- ------------- -------------
113,027 16,649 113,075 14,031
Impairment of goodwill, intangible
assets and property, plant and equipment (14,834) -
Amortisation of intangible assets
excluding computer software (3,400) (4,797)
Adjusting items (included in operating
expenses) (2,970) (625)
Other income - gain on disposal of
business operations 3,394 -
Other income - gain on disposal of
subsidiary 770 -
Net finance costs (1,634) (2,175)
------------------------------------------ ------------- ------------- ------------- -------------
(Loss)/profit before tax (2,025) 6,434
Taxation (2,522) (1,760)
------------------------------------------ ------------- ------------- ------------- -------------
(Loss)/profit for the financial year (4,547) 4,674
------------------------------------------ ------------- ------------- ------------- -------------
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
2021 2020
GBP'000 GBP'000
-------------------------- ---------- ----------
UK 61,999 65,793
Europe (excluding the UK) 23,304 21,037
North America 15,042 18,042
Rest of the World 12,682 8,203
-------------------------- ---------- ----------
Total revenue 113,027 113,075
-------------------------- ---------- ----------
c) Timing of revenue recognition
The timing of the Group's revenue recognition is as follows:
Year ended Year ended
30 June 30 June
2021 2020
GBP'000 GBP'000
---------------------------------------------------- ---------- ----------
Revenue from products and services transferred at
a point in time 41,583 59,524
Revenue from products and services transferred over
time 71,444 53,551
---------------------------------------------------- ---------- ----------
Total revenue 113,027 113,075
---------------------------------------------------- ---------- ----------
The value of revenue recognised in the year which was included
in subscriptions and deferred revenue at the start of the year was
GBP31,465,000 (2020: GBP30,794,000).
5. (Loss)/profit from continuing operations
a) (Loss)/profit for the year from continuing operations is
stated after charging/(crediting):
Year ended Year ended
30 June 30 June
2021 2020
GBP'000 GBP'000
--------------------------------------------------------- ---------- ----------
Depreciation of property, plant and equipment - included
in operating expenses 3,399 3,199
Short term and low-value leases 486 308
Amortisation of intangible assets - computer software 2,416 2,080
Loss/(profit) on disposal of property, plant and
equipment 2 (7)
Share based payments (including social security costs) 566 724
Amortisation of intangible assets excluding computer
software 3,400 4,797
Adjusting items (included in operating expenses) 2,970 625
Gain on disposal of business operations (3,394) -
Gain on disposal of subsidiary (770) -
Research and development expenditure credit (290) -
Impairment of goodwill, intangible assets and property,
plant and equipment 14,834 -
Foreign exchange (gain)/loss (24) 14
Fees payable to the auditors for the audit of the
Company and consolidated financial statements 95 87
Fees payable to the auditors and their associates
for other services:
- The audit of the Company's subsidiaries pursuant
to legislation 182 152
- Audit related other services 15 15
--------------------------------------------------------- ---------- ----------
The impairment of goodwill, intangible assets and property,
plant and equipment relates to:
Year ended Year ended
30 June 30 June
2021 2020
GBP'000 GBP'000
------------------------------ ---------- ----------
Goodwill 9,873 -
Intangible assets 1,516 -
Property, plant and equipment 3,445 -
------------------------------ ---------- ----------
14,834 -
------------------------------ ---------- ----------
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
2021 2020
GBP'000 GBP'000
-------------------------------------------------------- ---------- ----------
Costs relating to strategic activities 1,128 218
Increase in liability for deferred consideration - 407
Costs relating to the consolidation of office space 1,842 -
-------------------------------------------------------- ---------- ----------
Other adjusting items (included in operating expenses) 2,970 625
Impairment of goodwill, intangible assets and property,
plant and equipment 14,834 -
Amortisation of intangible assets excluding computer
software 3,400 4,797
-------------------------------------------------------- ---------- ----------
Total adjusting items (classified in profit before
tax) 21,204 5,422
-------------------------------------------------------- ---------- ----------
The costs relating to strategic activities in the year to 30
June 2021 are in respect of strategic reviews of two of the Group's
businesses, Central Law Training Limited and Wilmington Inese SL,
in addition to strategic costs associated with the disposal of
business operations . The costs relating to the consolidation of
office space relate to the recognition of an onerous provision in
respect of future costs associated with the portion of the head
office no longer in use.
6. Operating expenses
Year ended 30 June 2021 Year ended 30 June 2020
---------------------------------- ----------------------------------
Cost of Cost of
sales Administration Total sales Administration Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------------- -------- -------------- -------- -------- -------------- --------
Operating expenses before depreciation
and amortisation 86,167 4,396 90,563 89,363 4,402 93,765
Depreciation of property, plant
and equipment 3,399 - 3,399 3,199 - 3,199
Amortisation of intangible
assets - computer software 2,416 - 2,416 2,080 - 2,080
--------------------------------------- -------- -------------- -------- -------- -------------- --------
Operating expenses before amortisation
of intangibles excluding computer
software, impairment and adjusting
items 91,982 4,396 96,378 94,642 4,402 99,044
Amortisation of intangible
assets - databases 826 - 826 1,673 - 1,673
Amortisation of intangible
assets - customer relationships 1,052 - 1,052 1,309 - 1,309
Amortisation of intangible
assets - brands 1,016 - 1,016 1,241 - 1,241
Amortisation of intangible
assets - publishing rights
and titles 506 - 506 574 - 574
Impairment of goodwill, intangible
assets and property, plant
and equipment - 14,834 14,834 - - -
Other adjusting items (note
5b) - 2,970 2,970 - 625 625
--------------------------------------- -------- -------------- -------- -------- -------------- --------
Operating expenses 95,382 22,200 117,582 99,439 5,027 104,466
--------------------------------------- -------- -------------- -------- -------- -------------- --------
7. Net finance costs
Year ended Year ended
30 June 30 June
2021 2020
GBP'000 GBP'000
--------------------------------------------------------- ---------- ----------
Net finance costs comprise:
Interest payable on bank loans and overdrafts 1,437 1,587
Unwinding of the discount on royalty payments receivable (139) (142)
Bank arrangement fees - 388
Notional interest on lease liabilities 336 342
--------------------------------------------------------- ---------- ----------
1,634 2,175
--------------------------------------------------------- ---------- ----------
8. Taxation
Year ended Year ended
30 June 30 June
2021 2020
GBP'000 GBP'000
-------------------------------------------------- ---------- ----------
Current tax
UK corporation tax at current rates on UK profits
for the year 2,327 1,859
Adjustments in respect of previous years 30 30
-------------------------------------------------- ---------- ----------
2,357 1,889
Foreign tax 993 769
Adjustments in respect of previous years (21) (75)
-------------------------------------------------- ---------- ----------
Total current tax 3,329 2,583
-------------------------------------------------- ---------- ----------
Total deferred tax (807) (823)
-------------------------------------------------- ---------- ----------
Taxation 2,522 1,760
-------------------------------------------------- ---------- ----------
Factors affecting the tax charge for the year:
The effective tax rate is higher (2020: higher) than the average
rate of corporation tax in the UK of 19.00% (2020: 19.00%). The
differences are explained below:
Year ended Year ended
30 June 30 June
2021 2020
GBP'000 GBP'000
-------------------------------------------------------- ---------- ----------
(Loss)/profit before tax (2,025) 6,434
-------------------------------------------------------- ---------- ----------
(Loss)/profit before tax multiplied by the average
rate of corporation tax in the year of 19.00% (2020:
19.00%) (385) 1,222
Tax effects of:
Impairment of goodwill, intangible assets and property,
plant and equipment 2,818 -
Foreign tax rate differences 177 48
Adjustment in respect of previous years 9 (45)
Other items not subject to tax (230) 328
Effect on deferred tax of change of corporation tax
rate 133 207
-------------------------------------------------------- ---------- ----------
Taxation 2,522 1,760
-------------------------------------------------------- ---------- ----------
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 -125.0% (2020: 27.4%).
Included in other comprehensive income are a tax charge of
GBP22,000 (2020: GBP27,000) and a tax debit of GBP179,000 (2020:
credit of GBP55,000) relating to the interest rate swaps and net
investment hedges respectively.
The tax effect of adjusting items as disclosed in note 10 is a
credit of GBP558,000 (2020: GBP712,000).
9. Dividends
Amounts recognised as distributions to owners of the parent in
the year:
Year ended Year ended
30 June 30 June Year ended Year ended
2021 2020 30 June 30 June
Pence per Pence per 2021 2020
share share GBP'000 GBP'000
---------------------------------------------- ---------- ---------- ---------- ----------
Final dividends recognised as distributions
in the year - 5.0 - 4,378
Interim dividends recognised as distributions
in the year 2.1 - 1,829 -
---------------------------------------------- ---------- ---------- ---------- ----------
Total dividends paid 1,829 4,378
---------------------------------------------- ---------- ---------- ---------- ----------
Final dividend proposed 3.9 - 3,415 -
---------------------------------------------- ---------- ---------- ---------- ----------
10. (Loss)/earnings per share
Adjusted earnings per share has been calculated using adjusted
earnings calculated as profit after taxation attributable to owners
of the parent but before:
-- impairment of goodwill, intangible assets and property, plant and equipment;
-- amortisation of intangible assets excluding computer software;
-- adjusting items (included in operating expenses);
-- other income - gain on disposal of subsidiary; and
-- other income - gain on disposal of business operations.
The calculation of the basic and diluted earnings per share is
based on the following data:
Year ended Year ended
30 June 30 June
2021 2020
GBP'000 GBP'000
-------------------------------------------------------- ---------- ----------
(Loss)/earnings from continuing operations for the
purpose of basic earnings per share (4,547) 4,674
Add/(remove):
Impairment of goodwill, intangible assets and property,
plant and equipment 14,834 -
Amortisation of intangible assets excluding computer
software 3,400 4,797
Adjusting items (included in operating expenses) 2,970 625
Other income - gain on disposal of business operations (3,394) -
Other income - gain on disposal of subsidiary (770) -
Tax effect of adjustments above (558) (712)
-------------------------------------------------------- ---------- ----------
Adjusted earnings for the purposes of adjusted earnings
per share 11,935 9,384
-------------------------------------------------------- ---------- ----------
Number Number
------------------------------------------------------ ---------- ----------
Weighted average number of ordinary shares for the
purposes of basic and adjusted earnings per share 87,603,917 87,590,511
Effect of dilutive potential ordinary shares:
Future exercise of share awards and options 410,301 1,254,878
------------------------------------------------------ ---------- ----------
Weighted average number of ordinary shares for the
purposes of diluted and adjusted diluted earnings
per share 88,014,218 88,845,389
------------------------------------------------------ ---------- ----------
Basic (loss)/earnings per share (5.18p) 5.33p
Diluted (loss)/earnings per share (5.18p) 5.26p
Adjusted basic earnings per share ('adjusted earnings
per share') 13.62p 10.71p
Adjusted diluted earnings per share 13.56p 10.56p
------------------------------------------------------ ---------- ----------
Potentially dilutive share options are only considered in
relation to adjusted earnings per share as the Group made a basic
loss per share.
11. Disposals
In the year ended 30 June 2021 the Group disposed of the
following subsidiary and business operations:
Share/asset
Country Date of disposal deal
----------------------------- ------- ---------------- -----------
Central Law Training Scotland
Limited UK 16 December 2020 Share deal
AP Pensions UK 28 May 2021 Asset deal
Ark Publishing book list UK 30 April 2021 Asset deal
----------------------------- ------- ---------------- -----------
The disposals were executed in line with the Group's strategy to
simplify its structure and to focus attention on businesses that
operate in the GRC and Regulatory Compliance markets. These
business operations were classified as continuing operations until
their respective disposal dates. In total the Group recognised a
gain on disposal of GBP4.2m presented as adjusting items.
a) Disposals of a subsidiary - Central Law Training Scotland
On 16 December 2020 the Group disposed of Central Law Training
Scotland. The disposal was executed by way of the sale of
100% of the equity shares. As at the disposal date, the net
assets of Central Law Training Scotland were as follows:
GBP'000
---------------------------------------- -------
Property, plant and equipment 71
Trade and other receivables 138
Amounts due from subsidiaries 1,190
Trade and other payables (247)
Deferred income (432)
---------------------------------------- -------
Net assets disposed 720
Directly attributable costs of disposal 100
Gain on disposal 770
---------------------------------------- -------
Fair value of consideration 1,590
---------------------------------------- -------
Satisfied by:
Cash and cash equivalents 400
Settlement of intercompany balances 1,190
---------------------------------------- -------
1,590
---------------------------------------- -------
b) Disposal of a business operation - AP Pensions
On 28 May 2021 the Group disposed of AP Pensions, a business
operation within Wilmington Publishing & Information Limited.
At the disposal date, the net assets of AP Pensions were as
follows:
GBP'000
---------------------------------------- -------
Goodwill 861
Deferred income (406)
Net assets disposed 455
Directly attributable costs of disposal 295
Gain on disposal 3,344
---------------------------------------- -------
Fair value of consideration 4,094
---------------------------------------- -------
Satisfied by:
Cash and cash equivalents 4,094
4,094
---------------------------------------- -------
c) Disposal of a business operation - ARK Publishing book
list
In addition to the above, the Group disposed of the ARK
Publishing book list, a business operation within Ark Conferences
Limited, on 30 April 2021 for GBP50,000, settled in cash with net
assets of GBPnil.
12. Goodwill
GBP'000
--------------------------------- -------
Cost
At 1 July 2019 110,256
Exchange translation differences 341
--------------------------------- -------
At 30 June 2020 110,597
Disposals (1,192)
Exchange translation differences (1,309)
--------------------------------- -------
At 30 June 2021 108,096
--------------------------------- -------
Accumulated impairment
At 1 July 2019 and 30 June 2020 32,721
Disposals (331)
Impairment 9,873
--------------------------------- -------
At 30 June 2021 42,263
--------------------------------- -------
Net book amount
At 30 June 2021 65,833
--------------------------------- -------
At 30 June 2020 77,876
--------------------------------- -------
At 30 June 2019 77,535
--------------------------------- -------
Goodwill arising on business combinations is not amortised but
reviewed for impairment on an annual basis, or more frequently if
there are indications that goodwill may be impaired. Determining
whether the carrying value of acquired goodwill is recoverable is a
significant judgment given the material nature of the goodwill
balance and the significant assumptions underpinning management's
impairment assessment of the Group's cash generating units
('CGUs'). The Group identifies its CGUs on a business operation and
geographic level. This is consistent with the way the chief
operating decision maker reviews performance.
Indication of impairment
During the year, a decision was taken to discontinue the
delivery of a loss-making product line in the Healthcare
sub-division. This decision indicated that the associated goodwill
may be impaired. Following a review, management concluded that it
was appropriate to impair the remaining GBP1.5m goodwill relating
to the investment in the discontinued product. This resulted in a
reduction to the carrying value of the UK Healthcare CGU used in
the annual impairment review.
Disposal
During the year a pension fund product line within the
Healthcare sub-division was disposed of, which resulted in the
disposal of the carrying value of goodwill associated with this
product line. At the date of disposal the carrying value of this
goodwill was GBP0.9m.
Annual impairment review
The recoverable amount for each CGU has been determined using
value in use calculations. These calculations use the pre-tax
future cash flow forecasts covering a three year period based on
Board approved budgets. Pre-tax cash flows beyond the three year
period are then extrapolated using an estimated long term growth
rate of 2.0% (2020: 2.0%), providing a 'base case' scenario for the
purpose of the impairment review. Key assumptions for the value in
use calculations are those regarding discount rates, three year
cash flow forecasts and long term growth rates.
Discount rates
Management has applied pre-tax discount rates as follows:
Year ended Year ended
30 June 2021 30 June 2020
Territory (%) (%)
--------------- ------------- -------------
United Kingdom 11.8 11.2
United States 12.9 12.1
Spain 12.4 11.8
France 12.6 12.4
--------------- ------------- -------------
Pre-tax discounts rates are calculated on a company specific
participant basis, movements in the pre-tax discount rates for CGUs
since the prior year are driven by changes in Company specific
market-based inputs. Management considers the pre-tax discount
rates to be calculated using appropriate methodology. The rates are
in in line with its peers, and the Board views the rates as
accurately reflecting the return expected by a market
participant.
Three year cash flow forecasts
The three year cash flow forecasts which drive the value in use
calculations take into account the impact of Covid-19. They assume
a return to face-to-face training or events during the year ended
30 June 2022, albeit with flexibility built into the cost base to
reduce the downside impact on profit if restrictions return. Cash
flow forecasts also reflect detailed consideration of the current
economic environment in the relevant markets, and external
projections for wider market recovery from Covid-19. When preparing
forecasts management have also benefitted from customer and market
insights gained in the year ended 30 June 2021, which was impacted
by a full twelve month period of Covid-19 related restrictions.
Whilst acknowledging the inherent ongoing economic uncertainty,
management believe the cash flows reflect a reasonable scenario on
which to base the valuation of CGUs.
Sensitivity to changes in assumptions
The Group has performed sensitivity testing to assess the impact
of changes in assumptions on the value in use of each CGUs. The
sensitivity analysis performed assessed the impact of pessimistic
but reasonably possible changes to future cash flows, long term
growth rates and pre-tax discount rates. With the exception of UK
Healthcare, all other CGUs retained significant headroom in these
sensitised calculations, leading to the conclusion that there is no
realistic change of assumption that would result in carrying value
to exceed its recoverable amount.
UK Healthcare
The UK Healthcare CGU has a relatively high goodwill carrying
value, partly due to its composition of predominantly acquired,
rather than internally generated, assets. As a result, the headroom
on this CGU has historically been at a lower level than that
related to the Group's other assets. The sensitivity analysis
performed as part of the annual impairment review demonstrated that
reasonably possible changes in the assumptions used resulted in the
carrying value of the CGU exceeding its recoverable amount.
Whilst management are confident that the 'base case' cash flows
used in the impairment assessment reflect a reasonable and likely
scenario on which to base the valuation of CGUs, it also recognises
that the uncertain economic environment in which the Group operates
presents inherent risk to these forecasts. The healthcare industry
in particular, and consequently our Healthcare business, has been
disrupted by the Covid-19 pandemic and therefore uncertainty
remains about the anticipated timeline for a return to pre-pandemic
growth projections in this part of the Group.
Management have therefore produced a set of risk adjusted cash
flows, reflecting more prudent growth assumptions in the three year
forecasts for the UK Healthcare CGU. These risk adjusted cash flows
are based on minimal growth assumptions for mature products, and
more conservative growth assumptions for new and emerging products
than those reflected in the base case forecast. The risk adjusted
cash flows reflect a reduction in revenue growth from 7.6% CAGR to
4.9% CAGR over the 3 year assessment period. Management consider
the risk adjusted cash flows to reflect a reasonably possible
downside scenario to generate the reasonable minimum value in use
for the CGU. The carrying value of the UK Healthcare CGU exceeds
this risk adjusted value in use by GBP8.4m and therefore management
have impaired the associated goodwill by this amount.
Sensitivity to changes in assumptions of risk adjusted case
The Group subsequently performed sensitivity testing to assess
the impact of changes in assumptions on the revised value in use of
the UK Healthcare CGU, as detailed below:
Effect on
Increase/(decrease) value in
in assumption use calculation
% GBPm
----------------------------------- ------------------- ----------------
Long term growth rate (25.0) (0.7)
Pre-tax discount rate 5.0 (1.0)
Reduction in discounted cash flows (5.0) (0.9)
----------------------------------- ------------------- ----------------
Change to cash generating units
Consistent with the disclosure made in the Group's prior year
Annual Report, Interactive Medica has now been included in the UK
Healthcare CGU. Management consider this appropriate following the
increased integration of the UK Healthcare businesses into one
single UK Healthcare business which means it is no longer possible
to identify cash flows generated by Interactive Medica
independently from other UK Healthcare businesses.
The following table details the net book value of each CGU:
30 June 30 June
2021 2020
CGU GBP'000 GBP'000
---------------------- -------- --------
UK Healthcare 11,877 21,770
Axco and Pendragon 11,150 11,150
Accountancy 8,307 8,307
Legal 6,830 6,830
AMT 6,203 6,203
Compliance 7,972 7,972
Compliance Week 4,342 4,854
FRA 6,773 7,550
Business Intelligence 2,379 3,240
---------------------- -------- --------
65,833 77,876
---------------------- -------- --------
13. Intangible assets
Publishing
Computer Customer rights and
software Databases relationships Brands titles Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------- --------- --------- -------------- -------- ----------- --------
Cost
At 1 July 2019 12,174 16,771 24,969 13,757 30,393 98,064
Additions 3,215 - - - 100 3,315
Disposal (62) - - - - (62)
Exchange translation differences 111 24 135 100 - 370
--------------------------------- --------- --------- -------------- -------- ----------- --------
At 30 June 2020 15,438 16,795 25,104 13,857 30,493 101,687
Additions 1,969 - - - - 1,969
Disposal (2,130) - - - - (2,130)
Write-off of fully amortised
intangible assets - (2,940) (15,549) (3,672) (20,808) (42,969)
Exchange translation differences (139) (90) (399) (237) - (865)
--------------------------------- --------- --------- -------------- -------- ----------- --------
At 30 June 2021 15,138 13,765 9,156 9,948 9,685 57,692
--------------------------------- --------- --------- -------------- -------- ----------- --------
Accumulated amortisation
At 1 July 2019 7,850 13,810 18,720 6,782 27,689 74,851
Charge for the year 2,080 1,673 1,309 1,241 574 6,877
Disposals (62) - - - - (62)
Exchange translation differences 135 13 73 88 - 309
--------------------------------- --------- --------- -------------- -------- ----------- --------
At 30 June 2020 10,003 15,496 20,102 8,111 28,263 81,975
Charge for the year 2,416 826 1,052 1,016 506 5,816
Impairment - - - 1,516 - 1,516
Disposals (2,010) - - - - (2,010)
Write-off of fully amortised
intangible assets - (2,940) (15,549) (3,672) (20,808) (42,969)
Exchange translation differences (80) (70) (276) (210) - (636)
--------------------------------- --------- --------- -------------- -------- ----------- --------
At 30 June 2021 10,329 13,312 5,329 6,761 7,961 43,692
--------------------------------- --------- --------- -------------- -------- ----------- --------
Net book amount
At 30 June 2021 4,809 453 3,827 3,187 1,724 14,000
--------------------------------- --------- --------- -------------- -------- ----------- --------
At 30 June 2020 5,435 1,299 5,002 5,746 2,230 19,712
--------------------------------- --------- --------- -------------- -------- ----------- --------
At 30 June 2019 4,324 2,961 6,249 6,975 2,704 23,213
--------------------------------- --------- --------- -------------- -------- ----------- --------
The impairment of GBP1,516,000 in the year relates to the assets
associated with a discontinued loss-making product line in the
Healthcare sub-division.
14. Property, plant and equipment
Right-of-use
Land, freehold Fixtures assets
and leasehold and Computer Motor Land and
buildings fittings equipment vehicles buildings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------- -------------- --------- ---------- --------- ------------ ---------
Cost
At 30 June 2019 5,531 3,585 3,745 397 - 13,258
Transition to IFRS
16 (273) - - - 11,043 10,770
------------------------- -------------- --------- ---------- --------- ------------ ---------
At 1 July 2019 5,258 3,585 3,745 397 11,043 24,028
Additions - 126 369 43 2,854 3,392
Disposals - (23) (114) (63) - (200)
Exchange translation
differences 2 17 17 - (43) (7)
------------------------- -------------- --------- ---------- --------- ------------ ---------
At 30 June 2020 5,260 3,705 4,017 377 13,854 27,213
Additions 468 253 326 - 449 1,496
Disposals - (774) (258) (60) (109) (1,201)
Lease modifications - - - - (725) (725)
Asset transferred to
held for sale (2,243) (17) - - - (2,260)
Exchange translation
differences (3) (45) (35) - (191) (274)
------------------------- -------------- --------- ---------- --------- ------------ ---------
At 30 June 2021 3,482 3,122 4,050 317 13,278 24,249
------------------------- -------------- --------- ---------- --------- ------------ ---------
Accumulated depreciation
At 30 June 2019 1,284 2,770 3,065 172 - 7,291
Charge for the year 287 263 483 72 2,094 3,199
Disposals - (14) (114) (52) - (180)
Exchange translation
differences (5) 35 (20) (1) - 9
------------------------- -------------- --------- ---------- --------- ------------ ---------
At 30 June 2020 1,566 3,054 3,414 191 2,094 10,319
Charge for the year 436 254 421 63 2,225 3,399
Disposals - (774) (159) (51) (41) (1,025)
Lease modifications - - - - (337) (337)
Impairment 523 103 33 - 2,786 3,445
Asset transferred to
held for sale (660) (12) - - - (672)
Exchange translation
differences (9) (84) (64) - - (157)
------------------------- -------------- --------- ---------- --------- ------------ ---------
At 30 June 2021 1,856 2,541 3,645 203 6,727 14,972
------------------------- -------------- --------- ---------- --------- ------------ ---------
Net book amount
At 30 June 2021 1,626 581 405 114 6,551 9,277
------------------------- -------------- --------- ---------- --------- ------------ ---------
At 30 June 2020 3,694 651 603 186 11,760 16,894
------------------------- -------------- --------- ---------- --------- ------------ ---------
At 30 June 2019 4,247 815 680 225 - 5,967
------------------------- -------------- --------- ---------- --------- ------------ ---------
Included in land, freehold and leasehold buildings is GBP570,000
(2020: GBP970,000) of non-depreciated land.
Depreciation of property, plant and equipment is charged to
operating expenses within the income statement.
As at 30 June 2021, assets classified as held for sale relate to
a building marketed for sale at 30 June 2021 with a carrying value
of GBP1,588,000. Subsequently the assets were sold on 31 August
2021.
The impairment in the year of GBP3,445,000 relates to the
impairment of assets associated with the head office property,
recognised as a result of the exercise performed to consolidate the
Group's office space.
15. Trade and other receivables
30 June 30 June
2021 2020
GBP'000 GBP'000
---------------------------------- -------- --------
Current
Trade receivables 23,202 20,752
Prepayments and other receivables 5,496 4,774
---------------------------------- -------- --------
28,698 25,526
---------------------------------- -------- --------
16. Trade and other payables
30 June 30 June
2021 2020
GBP'000 GBP'000
----------------------------------- -------- --------
Trade and other payables 24,835 27,030
Subscriptions and deferred revenue 30,124 31,465
----------------------------------- -------- --------
54,959 58,495
----------------------------------- -------- --------
17. Lease liabilities
The Group enters into leases of buildings in relation to offices
& business premises in the geographical locations in which they
operate.
The following table shows the discounted lease liabilities
included in the Group balance sheets:
30 June 30 June
2021 2020
GBP'000 GBP'000
------------ -------- --------
Current 2,356 2,660
Non-current 8,386 10,461
------------ -------- --------
10,742 13,121
------------ -------- --------
A reconciliation of the movement in the right-of-use assets is
included in note 14. The interest expense in relation to lease
liabilities is included in note 7. Amounts recognised through the
consolidated income statement in respect of short term leases and
low-value leases are included in note 5. The total cash outflow for
leases was GBP3,352,000 (2020: GBP3,040,000).
Contracts entered into by the Group have a wide range of terms
and conditions but generally do not impose any additional
covenants. Extension and terminations options provide the Group
with additional operational flexibility. These options are included
in the lease term if the Group considers it reasonably certain that
the lease will be extended or terminated.
18. Provisions
Property and other GBP'000
--------------------------------- -------
At 1 July 2020 -
Additional provision in the year 1,842
--------------------------------- -------
At 30 June 2021 1,842
--------------------------------- -------
GBP'000
------------------------------------ -------
Included in current liabilities 461
Included in non-current liabilities 1,381
------------------------------------ -------
1,842
------------------------------------ -------
The provision included in the year is in respect of anticipated
costs expected to be incurred in relation to the closed proportion
of the head office for the period from 1 July 2021 until the end of
the contractual lease term. The charge to recognise the provision
has been included in adjusting items in the income statement.
The provision is based on assumptions and estimates where the
ultimate outcome may be different from the amount provided. The
provision reflects the Group's best estimate of the probable
exposure as at 30 June 2021. This assessment has been made having
considered the sensitivity of the provision for possible changes in
key assumptions.
19. Cash generated from operations
Year ended Year ended
30 June 30 June
2021 2020
GBP'000 GBP'000
--------------------------------------------------- ---------- ----------
(Loss)/profit from continuing operations before
income tax (2,025) 6,434
Gain on disposal of subsidiary (770) -
Gain on disposal of business operations (3,394) -
Adjusting items 2,970 625
Depreciation of property, plant and equipment
included in operating expenses 3,399 3,199
Amortisation of intangible assets 5,816 6,877
Impairment of goodwill, intangible assets and
property, plant and equipment 14,834 -
Loss/(profit) on disposal of property, plant
and equipment 2 (7)
Share based payments (including social security
costs) 566 724
Net finance costs 1,634 2,175
--------------------------------------------------- ---------- ----------
Operating cash flows before movements in working
capital 23,032 20,027
(Increase)/decrease in trade and other receivables (3,619) 3,279
(Decrease)/increase in trade and other payables (2,123) 3,206
--------------------------------------------------- ---------- ----------
Cash generated from operations before adjusting
items 17,290 26,512
--------------------------------------------------- ---------- ----------
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
2021 2020
GBP'000 GBP'000
-------------------------------------------------------- ---------- ----------
Funds from operations before adjusting items:
Adjusted EBITA (note 3) 16,649 14,031
Share based payments (including social security costs) 566 724
Amortisation of intangible assets - computer software 2,416 2,080
Depreciation of property, plant and equipment included
in operating expenses 3,399 3,199
Loss/(profit) on disposal of property, plant and
equipment 2 (7)
-------------------------------------------------------- ---------- ----------
Operating cash flows before movement in working capital 23,032 20,027
Net working capital movement (5,742) 6,485
-------------------------------------------------------- ---------- ----------
Funds from operations before adjusting items 17,290 26,512
-------------------------------------------------------- ---------- ----------
Cash conversion 104% 189%
-------------------------------------------------------- ---------- ----------
Year ended Year ended
30 June 30 June
2021 2020
GBP'000 GBP'000
-------------------------------------------------------- ---------- ----------
Free cash flow:
Operating cash flows before movement in working capital 23,032 20,027
Proceeds on disposal of property, plant and equipment 103 27
Net working capital movement (5,742) 6,485
Interest paid (1,196) (1,632)
Payment of lease liabilities (2,530) (2,392)
Tax paid (2,697) (4,377)
Purchase of property, plant and equipment (1,047) (538)
Purchase of intangible assets (1,969) (3,315)
-------------------------------------------------------- ---------- ----------
Free cash flow 7,954 14,285
-------------------------------------------------------- ---------- ----------
20. Events after the reporting period
Forward contracts
On 1 July 2021 the following forward contracts were entered in
order to provide certainty in Sterling terms of 80% of the Group's
expected net US Dollar income:
Currency Amount (GBP'm) Maturity date Foreign exchange
rate
----------- --------------- ----------------- -----------------
US Dollar 1.0 29 October 2021 1.3792
US Dollar 1.0 30 November 2021 1.3793
US Dollar 1.0 31 December 2021 1.3795
US Dollar 1.0 31 January 2022 1.3801
US Dollar 1.0 28 February 2022 1.3802
US Dollar 2.0 31 March 2022 1.3803
US Dollar 1.5 29 April 2022 1.3805
END
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(END) Dow Jones Newswires
September 20, 2021 02:00 ET (06:00 GMT)
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