Wilmington PLC AGM and Q1 Trading update (1614O)
November 03 2016 - 2:00AM
UK Regulatory
TIDMWIL
RNS Number : 1614O
Wilmington PLC
03 November 2016
3 November 2016
Wilmington plc
AGM and Q1 Trading update
Wilmington plc ("Wilmington" or "the business"), the knowledge
leader in Risk & Compliance, Finance, Legal, and Insight
announces its trading update for the three month period to 30
September 2016 with comments reflecting trading to-date. This
statement is also being made at the Group's Annual General Meeting
being held today.
Trading Update
As we reported, Wilmington has had a mixed start with good
growth from Risk & Compliance and the Insight division but that
was offset by a weaker performance from Legal and Finance.
Revenue was up 8.5% (4% constant currency) compared to the first
three months of 2015/16 helped by translation gains from our
non-sterling revenue and from contributions from acquisitions.
Profits were down compared to last year due to a combination of
timing with the movement of one large compliance program and due to
the slow start for AMT previously reported as well as planned
investments.
As previously highlighted, significant investments are being
made in people and in establishing new offices in Singapore,
Barcelona and in the US. In particular we have accelerated
investments in our Compliance, Insurance and Healthcare businesses.
Whilst the benefits of these investments are expected to be seen in
the second half of this financial year it will result in adjusted
profits for the first six months being maintained at around the
levels seen last year.
Acquisitions made in 2015/16 and our latest acquisition, SWAT,
continue to perform well and we expect SWAT to be earnings
enhancing in this current financial year.
Overall, Wilmington is on track to deliver against expectations
for the full year.
Operational Review
Wilmington Risk & Compliance:
Risk & Compliance delivered strong revenue growth in the
period. The compliance business continues to enjoy significant
demand for its accredited face to face training in both public
events and bespoke in-house assignments. Growth would have been
even stronger but we decided to delay a large training program
worth over GBP0.5m by two months to capture additional demand. To
strengthen our infrastructure and to support the expected continued
growth in revenue from compliance, we have
set up our US operation and have recruited a number of senior
positions over the last three months. At the same time we have made
initial exploratory investments in the next generation of Axco
products and services. Compliance Week had a disappointing start to
the year and we have seen weaker than expected demand for our
Annual European Compliance event.
Wilmington Finance:
Finance revenue was marginally down overall compared to a very
strong 2015 comparator period, benefitting from currency gains and
from the acquisition of SWAT offsetting the one off benefit in 2015
of the additional UK fiscal budget and the impact of the weakness
in AMT. As previously reported AMT had a weak start mainly due to
the competition issues previously highlighted but also due to some
softening of investment bank training assignments in the Asia
Pacific region. The impact of this reduced high margin AMT revenue
has had a material impact on the division's profits.
Wilmington Legal:
Challenging market conditions remain in the Law for Lawyers part
of the Legal division and the Legal division overall experienced a
weaker than expected first quarter. This was a result largely of
continued reduced demand for face to face CLE training and
conferences. The overall revenue decline was offset by the lower
cost base implemented last year and we saw a welcome overall
improvement in contribution from the division.
Wilmington Insight:
The division has had a good start with revenue up on last year
overall and up on an underlying basis. Healthcare has enjoyed good
growth driven by the higher margin multi product analytical
assignments from NHiS and Evantage. The trends seen last year in
non-healthcare data suppression and the charities businesses have
continued as expected.
SWAT
SWAT was acquired on 19 July 2016 and had an excellent first
quarter recording a profit contribution on revenue of GBP1.0m.
Cash Flow
Net debt as at 30 September 2016 was GBP38.7m (2015: GBP36.3m)
reflecting the acquisition of SWAT for GBP1.9m, the deferred
consideration for FRA of GBP1.1m paid in July 2016 and the effects
of retranslating US dollar debt into Sterling of GBP0.5m.
Unrealised exchange loss
As previously reported, Wilmington has entered into a number of
currency sale agreements to sell surplus US Dollars and Euros for
Sterling in line with its stated treasury policy. The average rate
of these contracts is $1.46 for $10.0m and EUR1.26 for EUR3.5m for
settlement in the second half of 2016/17.
As required under IFRS accounting standards these contracts will
be revalued at 31 December 2016 and the resultant unrealised
non-cash difference between the value at 30 June 2016 and 31
December 2016 will be charged to the Income statement for the six
months to 31 December 2016. Depending on exchange rates this
non-cash unrealised charge could be material.
Outlook
The overall trading outlook has not changed since the full year
2016 results announcement although we may see a material unrealised
non cash exchange loss reported at the end of December 2016. This
exchange loss should reverse to some extent in the second half of
the year when those currency contracts are fulfilled.
We continue to see the trends of tighter regulatory control and
more complex legislation being implemented in most of our key
markets, which in turn is driving demand for many of our products
and services. We have also continued to invest heavily as planned
in our Compliance business which is providing the infrastructure
and support for anticipated future growth and are looking to
develop new products and markets for Axco. These investments have
been accelerated and will impact the first six months profits but
are necessary to capture expected longer term revenue generating
opportunities. Overall, Wilmington is on track to deliver against
expectations for the full year.
-End-
For further information, please contact:
Wilmington plc
Pedro Ros, Chief Executive
Officer
Tony Foye, Chief Financial 020 7422 6800
Officer
FTI Consulting
Charles Palmer / Emma Appleton 020 3727 1000
Notes to Editors
Wilmington plc is the recognised knowledge leader and partner of
choice for information, education and networking in Risk &
Compliance, Finance and Legal as well as the Insight leader in a
number of chosen industries. Capitalised at approximately GBP230
million, Wilmington floated on the London Stock Exchange in
1995.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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