Two big acquisitions at Wilmington (WIL) have sparked a structural change. From 2017 onwards, the information provider will operate through three divisions: risk & compliance, professional and healthcare - and management plans to keep bolstering these businesses via further acquisitions.
SWAT Group, purchased for an initial cash sum of £2.4m in July, has helped extend Wilmington's presence in London and south-west England. The accountancy training business contributed £2.2m of revenue since its acquisition, helping boost sales in the finance business (which will fall under the 'professional' umbrella) by 2 per cent at constant currencies. The second acquisition - Health Service Journal - was completed after the period-end and will hugely expand the group's position in the UK health information market.
Charges from the amortisation of intangible assets were lower than in the first half of the 2016 financial year, which helped flatter profit figures. Strip out this and other figures and adjusted pre-tax profits rose just 2 per cent to £9.1m, while adjusted earnings per share increased by 0.17p to 8.1p.
While investors seemed pleased with these numbers - shares rose 5 per cent on the day of results - lower revenue expectations from the compliance division in the second half have got Numis worried. The broker trimmed full year pre-tax profit and earnings guidelines to £22.2m and 19.8p, respectively (from £20.9m and 18.7p in FY2016).
WILMINGTON (WIL) | ||||
|---|---|---|---|---|
| ORD PRICE: | 265p | MARKET VALUE: | £231m | |
| TOUCH: | 265-273p | 12-MONTHHIGH: | 288p | LOW: 230p |
| DIVIDEND YIELD: | 3.1% | PE RATIO: | na | |
| NET ASSET VALUE: | 51p* | NET DEBT: | 92% | |
| Half-year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 49.4 | 4.5 | 3.9 | 3.8 |
| 2016 | 54.8 | 5.0 | 4.4 | 3.9 |
| % change | +11 | +11 | +12 | +3 |
Ex-div: 9 Mar Payment: 11 Apr *Includes intangible assets of £104m, or 119p a share | ||||
