Wilmington - Interim Results

Wilmington (WIL.L.  Market capitalisation: £308m, 344p, 2.5% of JIC Portfolio. Medium Risk/High Reward = 4.0% target weight)

Wilmington plc is a United Kingdom-based company, which is engaged in providing data, information, education and training services in the global governance, risk and compliance (GRC), health, safety, and environmental markets. The Company's segments include Training & Education and Intelligence. It Training & Education division provides compliance training and technical support for customers across a range of industries, including financial services, accountancy and healthcare. It offers a range of products, including formal qualifications, continuing education and mandatory training, through instructor-led and self-guided formats. Its Intelligence division consists of businesses, which provide must-have, authoritative risk and compliance data to a range of industries globally, including insurance, pensions and healthcare. Its brands include APM International, Axco, Bond Solon, FRA and others.

www.wilmingtonplc.com

Results for the six months ended 31st December.

The full results statement can be found HERE.

Conclusion: A solid H1 with top-line growth of 7% converting into adjusted profit growth of 23% and earnings per share growth of 11%. The interim dividend is up 11%, in line with earnings growth.  With £28.0m of cash and proceeds from the sale of businesses to come, it has plenty of firepower for value-enhancing acquisitions. It says H2 has continued in the same vein as H1 and is in line with expectations. I don’t expect any significant changes to forecasts at this stage. It is valued at 15.3x June 2024 earnings per share and a yield of 3.2%. I only added Wilmington to the Portfolio earlier this month. Nothing in today’s results makes me unhappy with that decision.

·      Strong continuing and organic revenue growth, both up 7% - driven by strong demand in Training & Education and Financial Services in Intelligence division

§ Recurring revenue from continuing businesses up 11%, underpinned by strong retention rates

§ Repeat revenues, including recurring revenues of 36%, now 73% of continuing revenues (77% in FY23), due to billing timing

·      Continuing adjusted profit before tax up 23% to £8.1m  

·      Dividend increased by 11% in line with profits

·      Robust balance sheet - net cash[4] at 31 Dec 23 of £28.0m (31 Dec 22: £22.9m; 30 Jun 23: £42.2m)

·      Continuing active portfolio management: acquisition of Astutis for £21.5m (Nov '23), disposal of MiExact for £9.6m (Jan '24) and initiated sale process of Healthcare business in Nov '23

·      Significant progress made in establishing single Training and Education technology platform this financial year. 

Mark Milner, Chief Executive Officer, commented: 

"H1 was another period of strong sustainable organic growth, both for revenue and profits as well as continued good cash generation, across all of our continuing businesses. We have a notably strong balance sheet which leaves us well placed to continue to invest across the business, in both organic and inorganic opportunities. 

"We continue to actively manage our portfolio of businesses with one earnings enhancing acquisition and one disposal. We have also initiated a sale process for our Healthcare division, after a period of restructuring which put that business in a much stronger position. 

"Our strategy is clear: to grow the business profitably across the rapidly expanding GRC landscape by a combination of acquisitions, which provide attractive returns on investment, and investing in our operations and infrastructure, as well as actively managing our portfolio in line with our required characteristics.  

"Trading in the current financial year continues to be in line with expectations."