Wilmington streamlines business

Last September, Wilmington (WIL) reported an annual loss and high levels of debt. Five months down the line, however, things are looking brighter. Most strikingly, the information and training company has cash to spend, after selling off a financial training business for £23.4mn in December. 

Wilmington intends to use the cash, plus its £65mn bank facility, for acquisitions. The focus is now firmly on governance, risk and compliance, and the group is still “actively managing” its portfolio after a series of disposals. This makes sense given the current climate: there has been growing demand for compliance expertise ever since the global financial crisis, and this shows no sign of easing. 

The group’s two divisions – information & data and training & education – have both reported strong profit growth, with the return of face-to-face events bolstering sales. Wilmington also noted that demand for legal and accountancy training is proving particularly strong. However, growth has been tempered by the disposal of discontinued businesses and a “minor” impact of currency movements. 

Costs have also increased due to rising wages and the return of venue hire and travel. However, the group is well positioned to benefit from the transition to online learning and is focused on investing in single technology platforms for each division. Its digital plans are progresssing it has maintained a much higher proportion of digital training compared with the pre-pandemic period, resulting in higher margins. 

Wilmington currently trades on a forward price/earnings ratio of 14, which is significantly lower than companies such as Relx (REL) and Experian (EXPN). However, its digital transformation still has a way to go. Hold. 

Last IC View: Hold, 220p, 20 Sep 2021