Join our community of smart investors

Wilmington profits drop on cost increases

The company invested in infrastructure and product development over the period
September 20, 2019

The increase in statutory full-year profits at Wilmington (WIL) will court attention, but it can be rationalised. The reported period benefited from the sale of the ICP business, which brought in £1.9m, while the comparative period was hit by one-off costs including £3.1m spent on moving the head office and a goodwill impairment of £8.6m. On an adjusted basis, pre-tax profits fell 11.5 per cent to £19.3m, mainly due to increases in costs, including investments in infrastructure and product development.

IC TIP: Hold at 197p

Uncertainty around Brexit has been a headache for companies across sectors, and the publisher is no exception. The professional division reported a 2 per cent organic revenue decline, which was blamed on the “UK economic/political climate”. Healthcare and risk and compliance fared better, with organic revenue growth of 1 per cent and 6 per cent, respectively. In the latter, there was strong demand for online classes and bespoke in-house programmes, and new courses have been developed for wealth management. Its Axco business secured a number of multi-year contract renewals with major customers.

Analysts at Numis expect pre-tax profit of £20.1m during the year to June 2020 giving EPS of 18.2p, increasing to £21m and 19p in FY2021.

WILMINGTON (WIL)   
ORD PRICE:197pMARKET VALUE:£172m
TOUCH:190-202p12-MONTH HIGH:224pLOW: 160p
DIVIDEND YIELD:4.6%PE RATIO:15
NET ASSET VALUE:49p*NET DEBT:79%
Year to 30 JunTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
201595.110.39.07.7
2016106-3.4-7.48.1
201712015.914.78.5
20181212.3-0.58.8
201912314.712.79.1
% change+1+547-+3
Ex-div:17 Oct   
Payment:15 Nov   
*Includes intangible assets of £101m, or 115p a share