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Wilmington revenues stabilise

The information services provider endured a decline in organic sales a year earlier

Wilmington’s (WIL) flat organic revenues for the six months to December represents clear progress from the 3 per cent dip seen a year earlier. The information provider’s top line was underpinned by its risk and compliance business, which enjoyed 3 per cent growth in reported sales to £20.1m, or 8 per cent on an organic basis.

IC TIP: Hold at 181p

Meanwhile, healthcare’s sales fell by 1 per cent to £20.5m, or by 5 per cent on an organic basis – a marked improvement from the prior period’s 8 per cent decline. Healthcare was central to Wilmington’s problems last year, as the EU’s new data privacy rules engendered “confusion” and as the group focused on integrating its UK healthcare assets. That said, UK healthcare enjoyed strong new sales bookings (albeit against weak prior-year comparatives). And while organic US healthcare sales tumbled 21 per cent, this reflected the company’s strategy to cull unprofitable events and the segment is “starting to settle down”.

Reported pre-tax profits were bolstered by £1.9m in proceeds from the sale of Wilmington’s credit reporting business ICP last July, and the comparative numbers were also hit by costs tied to the group’s head-office move. Adjusted pre-tax profits dropped 26 per cent to £6.7m, dampened – as expected – by cost increases such as last year’s infrastructure investments, and overarching cost inflation.

House broker Canaccord Genuity forecasts adjusted pre-tax profits of £19.8m and EPS of 17.9p for the June 2019 year-end (from £22.1m and 19.9p in FY2018).

WILMINGTON (WIL)   
ORD PRICE:181pMARKET VALUE:£158m
TOUCH:180-184p12-MONTH HIGH:264pLOW: 160p
DIVIDEND YIELD:4.9%PE RATIO:na
NET ASSET VALUE:46p*NET DEBT:108%
Half-year to 31 DecTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
2017 (restated)**58.32.21.54.0
201858.35.85.74.1
% change+171+270+2
Ex-div:7 Mar   
Payment:8 Apr   

*Includes intangible assets of £103m, or 117p a share

**2017 figures have been restated to reflect adoption of IFRS 15 accounting rules