Wilmington : Interim Results - Update

The following amendments have been made to the dividend within the announcement released on 23 February 2017 at 7am under RNS No 6095X.

The full amended text is shown below.

An interim dividend of 3.9p per share (December 2015: 3.8p) will be paid on 7 April 2017 to shareholders on the register as at 10 March 2017, with an associated ex-dividend date of 9 March 2017.

All other details remain unchanged.

23 February 2017

WILMINGTON PLC

('Wilmington', 'the Group' or 'the Company')

Financial Results for the six months ended 31 December 2016

Wilmington plc, the provider of information, education and networking services in Risk & Compliance, Finance, Legal, and Insight knowledge areas, today announces its interim results for the six months ended 31 December 2016.

Financial Highlights

- Group revenues for the period up 11% at £54.8m (2015: £49.4m); up 6% in constant currency terms

- Adjusted EBITA increased 3% to £10.0m (2015: £9.7m)

- Adjusted EBITA margins at 18.3 % (2015: 19.7%)

- Adjusted Profit before Tax up 2% to £9.1m (2015: £8.9m)

- Adjusted Earnings per Share up 2% at 8.10p (2015: 7.93p)

- Basic Earnings per Share up to 4.43p (2015: 3.94p)

- Profit before tax at £5.0m (2015: £4.5m)

- Deferred revenue is up 13% to £24.2m (2015: £21.3m)

- Interim dividend increased 3% to 3.9p (2015: 3.8p), in line with progressive dividend policy

Operational Highlights

- Strong growth from Risk & Compliance with revenue up 11% driven by Compliance (up 13% organic)

- Finance revenue up 7% aided by maiden contribution from SWAT UK Ltd

- Legal revenue down 7% but profits up reflecting the reorganisation in 2015/16

- Insight delivered strong revenue growth up 26% driven by UK Healthcare (up 15% organic)

- Subscription and repeatable information sales at 78% of total revenue (2015: 76%)

- International revenues increased, representing 43% of total revenue (2015: 42%)

- SWAT acquired July 2016 extends presence in accountancy training and adds scale to Finance Division

- Health Service Journal ('HSJ') acquired January 2017 strengthens client offerings and adds scale to Healthcare Division

Strategy Update

- First stage of Wilmington's transformation is complete

- Second stage Sixth Gear' announced;

o Focus the business further into three divisions: Risk & Compliance, Professional & Healthcare

o Maximise client relationships; and accelerate integration

o Planned exit from legal practice support markets

o Project Sixth Gear will focus business structure, helping to drive scale and efficiencies in core markets

Current Trading

- Strong revenue momentum from key growth areas (compliance, insurance and healthcare)

- As in previous years Wilmington's trading performance remains second half weighted

- Acquisitions of SWAT and HSJ each expected to be earnings enhancing in first full year

- Expected profit growth partially offset by investment in Compliance Week and weaker performance from AMT

Pedro Ros, Chief Executive Officer, commented:

'Today we announce project Sixth Gear to drive Wilmington's transition to the next phase of our strategy. We will migrate to a structure comprising three divisions: Risk & Compliance, Professional and Healthcare. As our knowledge-based model evolves, we will focus on areas with the greatest potential for growth. Clients will remain at the centre of everything we do, and we will strive to maximise our client relationships and build a more integrated and international business.

As we move into the second half we are on target to deliver another good set of results for the full year. We believe project Sixth Gear will accelerate longer term growth and we look forward to updating the market on our progress.'

Constant currency - eliminating the effects of exchange rate fluctuations

Adjusted EBITA - see note 5

Adjusted EBITA margins - Adjusted EBITA divided by Revenue

Adjusted Profit before Tax - see note 5

Adjusted Earnings per Share - see note 11

Organic - eliminating the effects of acquisitions in the year and exchange rate fluctuations

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement this inside information is now considered to be in the public domain.

For further information, please contact:

Operating and Financial Review

Wilmington recorded strong revenue growth during the period from Risk & Compliance and Insight, supported by acquisition-led growth in Finance offset by the expected continued decline in our Legal division. Profit growth was constrained by the previously announced planned investments in our compliance businesses and from a generally weaker performance from AMT and our US operations which are being restructured in response. Recent acquisitions have performed well in both revenue and profit contribution terms and these results have also benefited from favourable currency exchange effects on revenue and to a limited extent on profits.

Overall revenue grew £5.4m (11%) to £54.8m (2015: £49.4m) and Adjusted EBITA grew £0.3m (3%) to £10.0m (2015: £9.7m). Foreign currency exchange rate movements benefited revenue by £2.4m and acquisitions contributed a further £3.8m. In underlying terms, adjusting for acquisitions and the impact of foreign currency exchange effects, organic revenue was down by 2%.

EBITA margins at 18.3% were down, largely as expected, compared to 2015 (19.7%) reflecting, inter alia, the planned investments of £0.3m in our compliance business combined with the previously reported impact of AMT business lost last year and the weaker US operations performance.

Finance costs, which include interest charges and associated costs, increased to £0.9m from £0.8m reflecting the higher average debt levels in this period compared to 2015. This higher level is due primarily to £9.3m of acquisition and related spend during 2016.

The growth in Adjusted EBITA was offset by increased finance costs translated into Adjusted Profit before Tax up 2% (£0.2m) to £9.1m (2015: £8.9m). Foreign currency translation impacts were only marginally beneficial to overall profits in the period due to the impact of foreign currency hedges taken out prior to Brexit.

Business Vision and Strategy

Our vision which acts as our guide and underpins our strategy is:

'To be the recognised knowledge leader and partner of choice for information, education and networking in Risk & Compliance, Finance and Legal as well as the Insight leader in a number of chosen industries'

The first stage in implementing our new strategy announced in January 2015 was to simplify the group structure, identifying gaps in our offerings and to provide greater clarity on the Group's capital allocation. We have made good progress in creating a more compelling offering through a knowledge-based model and customer focus. Through selective earnings enhancing acquisitions we have now reached a key milestone with information, education and networking capabilities for all four of our knowledge areas. We have also continued to strengthen our infrastructure, technology and resources to build a more integrated and international business to help support our growth strategy.

Project Sixth Gear: more focus, more scale

The next stage of our strategy is to simplify and integrate the business still further, maximising client relationships and providing the basis for further organic and acquisition-led growth and scale. To help achieve this, we have announced project Sixth Gear. This project will accelerate Wilmington's transition to an integrated global business with a more focused structure and an emphasis on maximising client relationships. The accelerated integration and pooling of resources will help capitalise on internal economies of scale.

More focused structure

To simplify Wilmington further we will reorganise our business into three divisions effective from this announcement: Risk & Compliance, Professional, and Healthcare. Our three divisions following the reorganisation will be of similar revenue size on a pro forma basis. Following our recent acquisition of HSJ in January 2017 we are starting to build significant scale in our Healthcare division and we will be looking to do the same for each of our priority areas for investment: compliance, insurance (risk) and healthcare.

As a result of our decision to focus the business around these three knowledge areas we plan to exit legal practice support services. We will therefore be looking to dispose of our Ark business which contributed £3.1m to revenue and £0.7m to profits in 2015/16. A process to find a new home for the Ark business has already commenced.

New Reporting Structure

In order to operate in a more focused structure and to help us build more scale in our areas of strength, the Group will report on a divisional basis with effect from the results for the year to 30 June 2017 as follows:

Risk & Compliancedivision will concentrate on servicing the existing strong organic demand supported by selective earnings enhancing acquisitions in the areas of risk & compliance as well as investments in new products, data services and new territories. The emphasis will continue to be servicing the needs of risk managers and compliance officers globally.

Professionaldivision will provide information, education and networking support to professionals in the accountancy, financial services, and legal markets. This business will focus on supporting the post-qualification needs of individual professionals and SMEs with an increasing emphasis on exploiting international opportunities, and an accelerated move to expand our online e-learning solutions; areas where we feel the revenue growth opportunities are greatest. The key brands will be maintained and we will seek to integrate common functions such as venue bookings, e-learning technology, marketing and support systems thereby generating economies of scale. To speed up the integration and exploitation of opportunities a new divisional MD will be appointed and the emphasis will be on organic rather than acquisition led growth.

Healthcaredivision will be the renamed Insight division recognising that well over 80% of its revenue following the HSJ acquisition will come from healthcare markets. We will look to replicate the UK strategy of having information (particularly insight data and analytics), education and networking capabilities on a country by country basis with emphasis on our existing market presence in France and the US either organically or by acquisition.

In line with our strategy all three divisions will offer information, networking and education capabilities servicing key defined communities, supported by best-in-class technology. The divisions will look to exploit international and digital opportunities using and replicating expertise from their existing market positions. Each division will also act as our specialist knowledge expert and centre of excellence providing expertise and R&D to support the two other divisions.

Pro forma financial information based on the new structure is included as an appendix to this statement.

Maximising client relationships

Clients remain at the centre of everything we do at Wilmington. As we continue to focus on building a more integrated and international business to support our growth strategy, Sixth Gear will deliver clear synergistic benefits enhancing cross-divisional collaboration between all three divisions.

In order to maximise client relationships, we have launched our Key Account Program (KAP) to reinforce account-management capabilities prioritising the development of strategic corporate partnerships and to identify cross-market potential. This initiative will be supported by our group wide CRM platform (Salesforce) which we started to implement 3 years ago.

We have seen initial successes of this account-management initiative in our Insight division with traction from our healthcare and pharma clients and we expect that our KAP will be a driver of growth in the future.

These important planned changes will accelerate the central theme of more focus and more scale.

Revenue for the year ended 30 June 2016 with HSJ's revenue included for the same period

Accelerating integration

There are a number of simultaneous workflows under project Sixth Gear all with the common objective to bring our business closer, enhancing Wilmington's collaborative culture. We will exploit opportunities arising from the new structure and increase commonality in terms of shared services and resources. There are a number of workflows including the roll-out of common e-learning technology and programmes, flexible working technology, centralised marketing support, and centralisation of procurement. The main workflows centre on London property consolidation, enhancing our e-learning capability and the continued roll-out of common global systems.

We operate across three properties in London and have been actively reducing our office space requirements by implementing more flexible working practices and through the transfer of back office functions to lower cost locations which started last year and finished in October 2016. Our objective is to consolidate all London operations into one premises whilst retaining our purpose built training facility acquired with SWAT.

Wilmington, particularly through its AMTO (AMT Online) platform, has benefited from development of e-learning capabilities and intends to expand and upgrade this capability as part of Sixth Gear. We have, as previously reported, recruited a head of e-learning and support team to resource this exciting initiative.

Project Sixth Gear excluding the London property consolidation will cost in total £1.2m (including £0.6m of capital expenditure); of which £0.2m has been incurred to date. We expect the project to yield benefits in terms of enhanced performance and more focused operations but in any event to cover its costs within two years. Any material developments on the London property consolidation will be communicated as appropriate.

Acquisitions

On 19 July 2016, Wilmington acquired SWAT Group Limited ('SWAT'), a provider of training, and technical compliance support to accountancy firms in London and the South West of England. The consideration was settled by an initial cash payment of £2.4m with a deferred cash consideration payment in September 2018 subject to SWAT achieving challenging profit targets over the two financial years ending 30 June 2018. The acquisition provides Wilmington with a bigger presence in the London face-to-face accountancy training market, and extends Wilmington's business into the South West of England where it has been under-represented. The acquisition also provides a clear opportunity to sell technical and marketing services to SWAT's clients as well as providing access to the accountancy student training market.

On 31 January 2017, Wilmington announced the acquisition of HSJ, the UK's leading health information, insight and networking business, for and initial cash payment of £17m (£19m less a £2m working capital adjustment). HSJ will sit within Wilmington's Healthcare division and positions Wilmington as the leading provider of insight, analytics, networking and education in the UK healthcare market. Uniquely, Wilmington Healthcare will have a UK industry presence across both provider/payer and the private sector in Pharma and MedTech and other healthcare providers. Healthcare expenditure is inexorably rising and businesses need the solutions that Wilmington Healthcare provides to optimise their activities. The acquisition will enhance Wilmington's access to senior decision makers and to a wider group of healthcare stakeholders who will benefit from Wilmington's enhanced solutions. This move will open further cross-selling and network opportunities for Wilmington to provide even more powerful, market leading insight and lead generation opportunities to our clients.

Wilmington has been acquisitive in the past and we will continue to review opportunities to enhance growth and to add expertise through selective earnings enhancing acquisitions consistent with our strategy. Our priority areas for capital allocation remain compliance, insurance and healthcare as we focus on adding further scale to our existing market positions.

Our People

As an increasingly digital information, education and networking business, operating in dynamic and competitive markets, we are fundamentally reliant on the quality and professionalism of our people. We would once again like to express our own and our fellow Board members' appreciation of the hard work and dedication of all our people. We would also like to take the opportunity to welcome our new colleagues from HSJ to the Wilmington family.

Dividend

The Board's policy is to pay a progressive dividend reflecting our confidence in the vision and resilience of our business models. I am pleased to confirm that the interim dividend for this year will be 3.9p (2015: 3.8p) per share, an increase of 3% on last year. It is the Board's intention to maintain its progressive dividend policy whilst ensuring that a suitable dividend cover of at least two times adjusted earnings per share compared to the dividend per share is maintained.

The interim dividend of 3.9p per share will be paid on 7 April 2017 to shareholders on the share register as at 10 March 2017, with an associated ex-dividend date of 9 March 2017.

Outlook and Current Trading

The financial year, as previously communicated, has had a mixed start. Some of our businesses particularly in Healthcare, have performed well. Other areas including our compliance businesses have had significant planned investment which has held back their reported profit as expected, whilst other business have not performed and we have made appropriate changes.

We continue to see tighter regulatory control and more complex legislation implemented in many of our key markets which in turn continues to drive the demand for our products and services globally. The Board will continue to review opportunities to add additional growth and expertise through organic investment and selective earnings enhancing acquisitions consistent with our strategy with emphasis on compliance, insurance and healthcare.

The second half of the year tends to be more profitable for Wilmington and will be boosted by the expected positive impacts from the HSJ and SWAT acquisitions and strong momentum from our key growth drivers of compliance, insurance and healthcare. However, profit growth is expected to be partially offset by a weaker than planned performance from AMT and Compliance Week and due to lower initial revenue from our new US compliance investment.

As we move into the second half, we look forward to delivering another good set of results for the full year. We believe project Sixth Gear bodes well for the Group's prospects with a view to accelerating longer term growth and we will update the market in due course.

Business Review

Wilmington currently manages and reports its business by reference to four knowledge based divisions: Risk & Compliance, Finance, Legal and Insight. The results from the recent SWAT acquisition are included within the Finance division.

From and including 30 June 2017 we will be presenting information on the current structure and representing the same information on our new three divisional structure of Risk & Compliance, Professional and Healthcare.

Pro forma financial information based on the new structure is included as an appendix to this statement.

Risk and Compliance(36% of Group revenue, 48% of Group contribution)

This division provides in-depth regulatory and compliance accredited training and information, market intelligence, and analysis. It focuses on the international financial services and international insurance markets as well as the UK pensions industry. The main community that uses our offerings are risk and compliance officers globally.

Divisional revenue grew £1.9m (11%) and by 6% on an organic basis.

Compliance

Our Compliance business, which accounts for just over 50% of the division's revenue, grew 20% compared to 2015 (13% organic growth in constant currency terms).

Wilmington provides accredited training programmes in anti-money laundering, compliance and financial crime. It has also developed compliance training programmes in the Banking, Oil & Gas, Pharmaceuticals, Betting, Legal, Accountancy and Gaming sectors. One of our objectives is to carefully expand our offerings across existing Wilmington market verticals and into new geographical territories whilst maintaining the strong business momentum derived from verticals where we are already embedded.

Within the compliance business, public and in-house courses grew by nearly 20% organic and our online training revenue grew by over 40%. Demand for our products and services continues to be strong in the Asia Pacific markets, serviced mainly through our new larger Singapore office which saw revenue grow by 20% (constant currency) in the period. This continued strong organic performance across our businesses reflects general demand for accredited compliance training and qualifications supplied globally both for individual professionals and as part of bespoke corporate assignments.

During the period as previously reported we have invested an additional £0.3m on two important initiatives. The first initiative was establishing a US office, with dedicated trainers, resources and localised programmes to access the US public and corporate compliance markets and to provide US qualifications and certificates. Our second initiative has been the launch of a new audit training business ('ICA Compass') to provide support to client financial enterprises which seek to achieve ISO 19600 (Compliance Management Systems).

As part of the initiative, we have successfully completed our first assignment for an international financial services client under ISO 19600. The US compliance training office which was set up earlier in this period will be formally launched in March 2017 starting with a public course open day. Initial forecast sales demand is a little weaker than we had hoped but we are confident of the medium term potential benefits of this initiative.

ICA, the global association for compliance professionals, has seen its paid membership more than double in the space of six months following from the significant expansion of networking events and professional support services. Momentum is strong and membership continues to climb strongly.

Compliance Week, our US governance, risk and compliance events and information business, saw revenue down by 8% (constant currency) largely due to a weaker than expected performance from our annual Compliance Conference in Brussels. We have invested and are continuing to invest in new content and people to reposition the business as a global governance, risk and compliance ('GRC') resource centre and events business collaborating with other parts of Wilmington.

Risk

The Risk part of the division contains our insurance businesses: Axco, ICP and Inese and our Pensions business Pendragon. Overall growth was 3% (flat in constant currency terms) with Axco, the industry leading provider of insurance market intelligence, regulation and compliance information, reporting a 6% (4% constant currency) revenue growth. In August 2016 we successfully opened a new insurance events and training office in Barcelona in response to increasing localised demand for our Insurance offerings.

Overall divisional contribution was flat at £5.6m (2015: £5.6m) and down £0.1m (3%) on a constant currency basis. Margins were down slightly, reflecting, inter alia, the £0.3m investment in compliance and the impact on Compliance Week profits which suffered from a revenue shortfall and increased investment costs.

Finance (22% of Group revenue, 16% of Group contribution)

This division includes Wilmington's financial training businesses of Mercia, SWAT and AMT and the financial services networking business of FRA. The Finance division provides expert and technical training, networking and support services to professionals in corporate finance, hedge funds, mutual funds, PE, and capital markets; and to qualified accountants in the UK in both the profession and industry. This division serves primarily tier 1 banks, the international financial services industry, and small to medium sized professional accountancy firms.

Divisional revenue grew £0.8m (7%) and by 2% on a constant currency basis

As previously reported, AMT, which forms an important part of the division and delivers most of its revenue and contribution in the summer months, had a weak start. This was mainly due to the competition issues previously highlighted but also due to some softening of investment bank training assignments and margins in the Asia Pacific region. The impact of this reduced high margin AMT revenue has, as expected, had a material impact on the division's profits. The US and UK business has stabilised, however, we are closely monitoring our Asia Pacific operations and our local team has been strengthened including the appointment of a Managing Director for the Asia Pac region.

SWAT, acquired on 19 July 2016, contributed £2.2m to revenue and £0.3m to profits. Integration has gone well and the business is performing well and in line with plan.

Overall divisional contribution was down 21% (£0.5m) compared to last year at £1.9m (2015: £2.4m). Margins were down due to AMT and the impact of lower SWAT margins.

Legal (13% of Group revenue, 7% of Group contribution)

The Legal division provides a range of training, professional support services and information including Continuing Legal Education ('CLE'), expert witness training, databases and magazines to legal professionals. The business, which offers a wide range of services, is currently focusing on two basic offerings: providing education services to lawyers in the profession and industry ('Law for lawyers'); and training services for non-lawyers ('Law for non-lawyers').

Divisional revenue reduced by £0.5m (7%) and reduced by 9% on a constant currency basis.

The revenue reduction reflects to a large extent the challenging market conditions previously reported surrounding reduced demand for face-to-face training connected to the changes to the Legal CLE rules which came into full effect in October 2016.

The law for lawyers business offers post qualification training aimed at SME law firms (through CLT) as well as legal practice support services (though Ark). As explained we are now refocusing on providing e-learning and face-to-face training to individual lawyers and SME firms whilst at the same time repositioning our course output making it more relevant for our client's changing demands. This renewed focus means we will be exiting some legal markets and disposing of the Ark business. Ark revenues in 2015/16 were £3.1m.

Law for non-lawyers, which accounts for around 50% of the division, saw a small reduction in revenue compared to a very strong 2015 comparator period.

Despite the ongoing challenging market conditions, the division managed to increase its contribution by £0.2m to £0.8m (2015: £0.6m) benefiting from its reorganisation last year. Margins in the Legal division increased from 8% in 2015 to 11% in the same 2016 period.

Insight(29% of Group revenue, 29% of Group contribution)

The Insight division increasingly provides analysis and clarity to customer-focused organisations, enabling them to better understand and connect with their markets. This division includes our UK healthcare information businesses, our French language medical news agency, the healthcare networking events of FRA and our data suppression and charity information businesses.

Divisional revenue grew £3.2m (26%) and by 19% on a constant currency basis. Non-healthcare revenue was £3.6m (2015: £3.7m).

Wilmington Healthcare business, which following the HSJ acquisition will represent over 80% of the division by revenue on a pro forma basis, had a good overall start to the year with organic revenue from the UK businesses up 15%. The drivers of organic growth continue to be higher margin assignment led projects involving data analytics and expert market knowledge led by NHiS.

Overall organic growth for the division was 3% due to a weaker December quarter performance by FRA and underlying albeit low single digit downward revenue trends from the mature non-Healthcare businesses. Healthcare acquisitions contributed £1.7m to revenue growth.

Benefiting from a contribution of £0.6m from acquisitions, overall contribution increased by 22% (£0.6m) to £3.4m (2015: £2.8m). Contribution growth was 19% in constant currency terms.

Currency impact

All of our divisions are to varying degrees affected by translation impacts from foreign currency exchange rate movements. Risk & Compliance revenues are around 25% US dollars and Wilmington in the year to 30 June 2016 generated around 20% of its revenue in US $ and 10% in Euros. Prior to Brexit the Group entered into foreign currency contracts to sell $10m at an average rate of $1.46 and €3.5m at an average rate of €1.26 which was the expected net currency earnings for 2016/17.

Group Overheads

Group overheads, which include plc Board costs, head office salaries, as well as unallocated central overheads, were flat at £1.7m (2015: £1.7m).

Financial Review

Adjusted Results

Reference is occasionally made in this financial review to Adjusted Results. Adjusted Results in the opinion of the Directors provide a more comparable indication of the Group's underlying financial performance and exclude Adjusting Items set out in note 7.

Revenue

Revenue for the six months to 31 December 2016 increased by £5.4m to £54.8m (2015: £49.4m). Excluding the impact of acquisitions, foreign exchange and disposals, organic revenue was down 2%.

Net Operating Expenses

Net operating expenses, excluding adjusting items, were £44.8m (2014: £39.6m) up 13%.

Amortisation of Intangible Assets

Amortisation of intangible fixed assets (excluding computer software) at £2.8m (2015: £3.0m) reflecting six months of amortisation of intangible fixed assets arising on the acquisitions of Wellards and Evantage acquired in 2015/16 and six months' amortisation arising on the acquisitions of SWAT acquired in July 2016 offset by reductions from acquisitions now fully amortised.

Adjusting Items - included in Operating Expenses

Adjusting items of £0.9m (2015: £0.9m) includes £0.3m in respect of acquisitions, £0.2m in respect of an aborted property disposal and £0.4m of project Sixth Gear costs including the back office relocation started in May 2016.

Adjusting Items - included in Net Finance Costs

The 2015 comparator figure of £0.2m relates to the write-off of old capitalised loan arrangement fees and associated legal and professional costs attached to the extension of the loan facility on 1 July 2015 at more favourable rates.

Net Finance Costs

Net finance costs, which consist of interest payable and bank charges, were up £0.1m from £0.8m (excluding adjusting items) to £0.9m reflecting inter alia increased debt associated with £9.3m spent on acquisitions and related costs since 1 January 2016 offset by strong cash generation.

The Group typically sees lower cash conversion in the first half of its financial year although cash conversion in this period was relatively weaker at 79% compared to 85% last year. One main reason for the weaker cash conversion was the disruption associated with the move of back office functions including credit control from London to Basildon. The back office move is complete and functioning normally.

Share Based Payments

The share based payment expense was £0.3m (2015: £0.3m).

Taxation

Taxation increased by £0.2m to £1.2m from £1.0m. The increase in the tax expense is due to higher profits.

The underlying tax rate which ignores the tax effects of adjusting items was maintained at 22.6% (2015: 23.0%).

Operating Profit

Operating profit increased 7% to £5.9m from £5.6m. Adjusted EBITA was up 3% at £10.0m (2015: £9.7m) and Adjusted EBITA margins were down 140bps to 18.3% (2015: 19.7%) reflecting investment in Risk and Compliance and reduced profits from Compliance Week and AMT.

Profit before Taxation

Profit before taxation was up £0.5m (11%) at £5.0m (2015: £4.5m). Adjusted Profit before Tax increased by 2% (£0.2m) to £9.1m from £8.9m

Earnings per Share

Adjusted Basic Earnings per Share increased by 2% to 8.10p (2015: 7.93p). Basic earnings per share increased to 4.43p from 3.94p and diluted earnings per share increased to 4.39p from 3.90p.

Goodwill

Goodwill increased by £3.0m to £73.7m since 30 June 2016 resulting from the acquisition of SWAT in the year (£2.0m), and currency translation impacts.

Intangible Assets

Intangible assets increased since 30 June 2016 by £0.8m reflecting £3.2m of acquisitions and additions in the year and exchange rate movements of £0.9m offset by amortisation of £3.3m.

Property, Plant and Equipment

Property, plant and equipment increased since 30 June 2016 by £0.3m to £4.9m reflecting additions to tangible fixed assets of £0.2m from acquisitions and £0.6m of normal fixed asset additions offset by depreciation.

Trade and Other Receivables

Trade and other receivables increased by £6.2m compared to 31 December 2015 reflecting acquisitions of £1.1m and higher trading activity particularly in FRA in advance of the RISE event but also slower payment collection associated with the move of UK back office functions from London to Basildon.

Trade and Other Payables

Trade and other payables, which include deferred income, were up £5.1m compared to 31 December 2015 reflecting the increase in trade payables of £2.2m (£0.9m from acquisitions) and subscriptions and deferred income. Subscriptions and deferred income, which represents revenue received in advance increased by 13% from £21.3m in 2015 to £24.2m. Underlying growth was 8% (3% constant currency) and acquisitions contributed £1.1m to the increase. There was strong growth in deferred income balances for ICA membership (up 47%), Axco (up 12%), FRA (up 15% constant currency) offset by declines in Compliance Week, Finance and the Charities businesses within Insight.

Net Debt

Net debt, which includes cash and cash equivalents, bank loans and bank overdrafts, was £40.6m (2015: £36.6m), an increase of £4.0m. Net debt increased, inter alia, due to the acquisitions of SWAT, Wellards and Evantage for £9.3m net of cash offset by good operating cash flow. In support of the acquisition of HSJ the group increased its debt facility to £85 million from £65 million on 17 January 2017 under the accordion provision of the loan agreement.

Current Tax Liabilities

Current tax liabilities increased by £0.1m to £0.8m at 31 December 2016 reflecting higher profits across the Group.

Deferred Consideration

The liabilities of £0.2m and £2.3m relate to the deferred cash payments to the vendors of SWAT of £1.1m and to the vendors of Evantage of £1.4m.

Dividend

It is the Board's intention to pay a progressive dividend whilst ensuring a cover of at least two times the Group's adjusted earnings per share over the dividend per share in respect of the financial year. An interim dividend of 3.9p per share (December 2015: 3.8p) will be paid on 7 April 2017 to shareholders on the register as at 10 March 2017, with an associated ex-dividend date of 9 March 2017.

Officers

Consolidated Income Statement

The notes on pages 17 to 30 are an integral part of these consolidated financial statements.

Consolidated Statement of Comprehensive Income

Items in the statement above are disclosed net of tax. The notes on pages 17 to 30 are an integral part of these financial statements.

Consolidated Balance Sheet

The notes on pages 17 to 30 are an integral part of these consolidated financial statements.

Consolidated Statement of Changes in Equity

The notes on pages 17 to 30 are an integral part of these consolidated financial statements.

Consolidated Cash Flow Statement

The notes on pages 17 to 30 are an integral part of these consolidated financial statements.

Notes to the Financial Results

General information

The Company is a public limited company incorporated and domiciled in the UK. The address of its registered office is 6-14 Underwood Street, London, N1 7JQ.

The Company is listed on the main market on the London Stock Exchange. The Company is a provider of information, education and networking to the professional markets.

This condensed consolidated interim financial information ('Interim Information') was approved for issue on

22 February 2017.

The Interim Information is neither reviewed nor audited and does not comprise statutory accounts within the meaning of section 434 of the Companies Act 2006. Statutory accounts for the year ended 30 June 2016 were approved by the Board of Directors on 13 September 2016. The report of the Auditors on those accounts was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement under section 498 of the Companies Act 2006.

1. Basis of preparation

This Interim Information for the six months ended 31 December 2016 has been prepared in accordance with the Disclosure and Transparency Rules of the Financial Conduct Authority and in accordance with IAS 34 'Interim financial reporting' as adopted by the European Union. The Interim information should be read in conjunction with the Annual Financial Statements for the year ended 30 June 2016 which have been prepared in accordance with IFRSs as adopted by the European Union, and are available on the Group's website: wilmingtonplc.com.

The Group's forecast and projections, taking account of reasonably possible changes in trading performance, show that the Group will be able to operate well within the level of its current banking facilities. The Directors have therefore adopted a going concern basis in preparing the Interim Information.

2. Accounting policies

The accounting policies applied are consistent with those of the Annual Financial Statements for the year ended 30 June 2016, as described in those Annual Financial Statements. The following new standards, amendments and interpretations have been adopted in the current year:

· EU Account Directive (SI 2015/980)

The adoption of this interpretation has not led to any changes to the Group's accounting policies or had any other material impact on the financial position or performance of the Group. Other amendments to IFRSs effective for the year ending 30 June 2016 have no impact on the Group.

The following new standards and amendments to standards have been issued but are not yet effective for the purposes of the Interim Report and have not been early adopted:

• FRS 9: Financial Instruments - endorsed by EU
• IAS Amendments to IAS 7: Statement of cash flows on disclosure initiative - not yet EU endorsed
• Amendments to IAS 12: Income taxes - not yet EU endorsed
• Amendments to IFRS 2: Share based payments - not yet EU endorsed
• IFRS 15: Revenue from Contracts with Customers - endorsed by EU
• IFRS 16: Leases - not yet EU endorsed
• IFRIC 22: Foreign currency transactions and advance consideration - not yet EU endorsed
• Amendments to IFRS 10, IFRS 12 and IAS 28: Investment Entities: Applying the Consolidation Exception - not yet EU endorsed
• Amendments to IFRS 10 and IAS 28: Sale or Contribution of Assets between an Investor and its Associate or Joint Venture - not yet EU endorsed
• Amendments to IFRS 11: Accounting for Acquisitions of Interests in Joint Operations - endorsed by EU
• Amendments to IAS 1: Disclosure Initiative - endorsed by EU
• Amendments to IAS 16 and IAS 38: Clarification of Acceptable Methods of Depreciation and Amortisation - endorsed by EU
• Amendments to IAS 27: Equity Method in Separate Financial Statements - endorsed by EU
• Annual improvements to IFRSs 2012-2014 cycle - endorsed by EU

3. Principal risks and uncertainties

The principal risks and uncertainties that affect the Group are as stated on pages 25 to 28 of the Strategic Report in the Annual Report and Financial Statements for the year ended 30 June 2016. The main financial risks that affect the Group are:

(a) Interest rate risk

Risk

The Group financing arrangements include external debt that is subject to a variable interest rate. The Group is consequently exposed to cash flow volatility arising from fluctuations in market interest rates applicable to that external finance. In particular, interest is charged on the £57m (2015: £46m) amount drawn down on the revolving credit facility at a rate of between 1.50 and 2.25 per cent above LIBOR depending upon leverage. Cash flow volatility therefore arises from movements in the LIBOR interest rates.

Group policy

The Group policy is to enter into interest rate swap contracts to maintain the ratio of fixed to variable rate debt at a level that achieves a reasonable cost of debt whilst reducing the exposure to cash flow volatility arising from fluctuations in market interest rates.

Risk management arrangements

The Group's interest rate swap contracts offset part of its variable interest payments and replace them with fixed payments. In particular, the Group has hedged its exposure to the LIBOR part of the interest rate via interest rate swaps, as follows:

· A 5 year £15.0m interest rate swap commencing on 21 November 2011, whereby the Group receives interest on £15m based on the LIBOR rate and pays interest on £15m at a fixed rate of 2.68%. This contract expired in the period.

· A $7.5m interest rate swap commencing on 13 July 2015 and ending on 1 July 2020, whereby the Group receives interest on $7.5m based on the USD LIBOR rate and pays interest on $7.5m at a fixed rate of 1.79%.

· A £15.0m interest rate swap commencing on 22 November 2016 and ending on 1 July 2020, whereby the Group receives interest on £15m based on LIBOR rate and pays interest on £15m at a fixed rate of 2.00%.

These derivatives have been designated as a cash flow hedge for accounting purposes. The net settlement of interest on the interest rate swap, which comprises a variable rate interest receipt and a fixed rate interest payment, is recorded in net finance costs in the income statement and so is matched against the corresponding variable rate interest payment on the revolving credit facility. The derivatives are remeasured at fair value at each reporting date. This gives rise to a gain or loss, the entire amount of which is recognised in Other Comprehensive Income ('OCI') following the Directors' assessment of hedge effectiveness.

(b) Foreign currency risk

Risk

The currency of the primary economic environment in which the Group operates is Sterling, and this is also the currency in which the Group presents its financial statements. However, the Group has significant Euro and US dollar cash flows arising from international trading and overseas operations. The Group is consequently exposed to cash flow volatility arising from fluctuations in the applicable exchange rates for converting Euros and US dollars to Sterling.

Group policy

The Group policy is to fix the exchange rate in relation to a periodically reassessed set percentage of expected Euro and US dollar net cash inflows arising from international trading, by entering into foreign currency contracts to sell a specified amount of Euros or US dollars on a specified future date at a specified exchange rate. This set percentage is approved by the Board as part of the budgeting process and upon the acquisition of foreign operations.

The Group policy is to finance investment in overseas operations from borrowings in the local currency of the relevant operation, so as to achieve a natural hedge of the foreign currency translation risk. This natural hedge is designated as a net investment hedge for accounting purposes. Debt of $18.2m (2015: $18.2m) has been designated as a net investment hedge relating to the Group's interest in Compliance Week and FRA.

3. Principal risks and uncertainties (continued)

Risk management arrangements

The following forward contracts were entered into in order to provide certainty in Sterling terms of circa 80% of the Group's expected net US dollar and Euro income:

• On 13 May 2016, the Group sold €1.2m to 24 February 2017 at a rate of 1.2609
• On 13 May 2016, the Group sold €1.2m to 3 March 2017 at a rate of 1.2606
• On 13 May 2016, the Group sold €1.1m to 10 March 2017 at a rate of 1.2601
• On 20 May 2016, the Group sold $3.5m to 28 April 2017 at a rate of 1.4622
• On 20 May 2016, the Group sold $3.5m to 26 May 2017 at a rate of 1.4637
• On 20 May 2016, the Group sold $3.0m to 28 June 2017 at a rate of 1.4657

The above derivatives are remeasured at fair value at each reporting date. This gives rise to a gain or loss, the entire amount of which is recognised in the Income Statement.

(c) Liquidity and capital risk

Risk

The Group has historically expanded its operations both organically and via acquisition, financed partly by retained profits but also via external finance. As well as financing cash outflows, the Group's activities give rise to working capital obligations and other operational cash outflows. The Group is consequently exposed to the risk that it cannot meet its obligations as they fall due, or can only meet them at an uneconomic price.

Group policy

The Group policy is to preserve a strong capital base in order to maintain investor, creditor and market confidence and to safeguard the future development of the business, but also to balance these objectives with the efficient use of capital. The Group has, in previous years, made purchases of its own shares whilst taking into account the availability of credit.

Risk management arrangements

The Group ensures its liquidity is maintained by entering into short, medium and long-term financial instruments to support operational and other funding requirements. The Group determines its liquidity requirements by the use of short and long-term cash forecasts.

The Group has an unsecured committed bank facility of £65.0m to 1 July 2020. The facility comprised of a revolving credit facility of £60.0m and an overdraft facility across the Group of £5.0m. In addition, the extended facility also provides for an accordion option whereby the unsecured committed bank facility may be increased by up to £35m to a total commitment of £100m if required subject to majority lending bank consent. Interest is charged on the amount drawn down at between 1.50 and 2.25 (the 'Margin') per cent above LIBOR depending upon leverage, and drawdowns are made for periods of up to six months in duration. Interest is charged on the drawn element of the overdraft facility at 1.50% and 2.25% per cent above the Barclays bank base rate depending upon leverage. The Group also pays a fee of 40% of the applicable Margin on the undrawn element of the credit facility and the undrawn overdraft.

On 31 January 2017 Wilmington acquired HSJ the UK's leading health information, insight and networking business for £19.0m less a £2.0m working capital adjustment. To fund this investment £20.0m of the accordion facility was triggered giving a total unsecured bank facility of £85.0m.

3. Principal risks and uncertainties (continued)

(d) Credit Risk

Risk

The Group's principal financial assets are receivables and bank balances. The Group is consequently exposed to the risk that its customers or the credit facility providers cannot meet their obligations as they fall due.

Group policy

The Group policy is that the lines of business assess the creditworthiness and financial strength of customers at inception and on an ongoing basis. The Group also reviews the credit rating of the bank.

Risk management arrangements

The Group's credit risk is primarily attributable to its trade receivables. However, the Group has no significant exposure to credit risk because its trading is spread over a large number of customers. The payment terms offered to customers take into account the assessment of their creditworthiness and financial strength, and they are set in accordance with industry standards. The creditworthiness of customers is considered before trading commences. Most of the Group's customers are large and well established institutions that pay on time and in accordance with the Group's standard terms of business.

The amounts presented in the Balance Sheet are net of allowances for bad and doubtful receivables estimated by management based on prior experience and their assessment of the current economic value.

4. Financial instruments and risk management

The methods and assumptions used to estimate the fair values of financial assets and liabilities are as follows:

· The carrying amount of trade receivables and payables approximates to fair value due to the short maturity of the amounts receivable and payable.

· The fair value of the Group's borrowings is estimated on the basis of the discounted value of future cash flows using approximate discount rates in effect at the balance sheet date.

· The fair value of the Group's outstanding interest rate swaps, foreign exchange contracts and put option for non-controlling interest are estimated using discounted cash flow models and market rates of interest and foreign exchange at the balance sheet date.

Financial instruments are measured at fair value via a valuation method. The different levels have been defined as:

· Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities;

· Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices); and

· Level 3: Inputs for the assets or liabilities that are not based on observable market data (that is, unobservable inputs).

The group has recognised a level 2 financial liability of £1,474,217 (2015: £105,311) for foreign exchange trading derivatives at fair value through income or expense. In addition the group has recognised a level 2 financial liability of £769,278 (2015: £562,451) for three interest rate swap contracts at fair value through other comprehensive income or expense. The group has no recognised level 1 or level 3 assets or liabilities.

5. Measures of profit

To provide shareholders with a better understanding of the trading performance of the Group, Adjusted EBITA has been calculated as Profit before Tax after adding back:

· amortisation of intangible assets - publishing rights, titles and benefits;

· impairment of goodwill;

· share based payments;

· adjusting items; and

· net finance costs.

Adjusted EBITA and Adjusted EBITDA reconcile to profit on continuing activities before tax as follows:

Adjusted profit before tax reconciles to profit on continuing activities before tax as follows:

6. Segmental information

In accordance with IFRS 8 the Group's operating segments are based on the operating results reviewed by the Board, which represents the chief operating decision maker. The Group reports its results in four operating segments as this accurately reflects the way the Group is managed.

The Group's organisational structure reflects the main communities to which it provides information, education and networking. The four divisions (Risk & Compliance, Finance, Legal; and Insight) are the Group's segments and generate all of the Group's revenue.

The Board considers the business from both a geographic and product perspective. Geographically, management considers the performance of the Group between the UK, North America, the rest of Europe and the rest of the World.

(a) Business segments

There are no intra-segmental revenues which are material for disclosure. Unallocated central overheads represent head office costs that are not specifically allocated to segments. Total assets and liabilities for each reportable segment are not presented, as such information is not provided to the Board.

Contribution is defined as Adjusted EBITA excluding unallocated central overheads.

6. Segmental information (continued)

(b) Segmental information by geography

The UK is the Group's country of domicile and the Group generates the majority of its revenue from external customers in the UK. The geographical analysis of revenue is on the basis of the country of origin in which the customer is invoiced:

7. Adjusting items

The following items have been charged/(credited) to the income statement during the year but are of an unusual nature, size or incidence and so are shown separately:

Successful and aborted acquisitions relate to the acquisition and integration of SWAT.

During 2016 we actively sought and had received a number of cash offers for our Underwood Street long leasehold offices of up to £10m; however for various reasons including Brexit none of these offers were concluded. Aborted leasehold property costs comprise of professional fees related to this and costs for a potential new London location.

Restructuring and rationalisation costs comprise £267,000 of redundancy and property costs following the Group's decision to relocate part of the finance and HR function from its head offices in central London to our existing freehold premises in Basildon, Essex. It also includes £135,000 of costs relating to the implementation of project Sixth Gear, the reorganisation of our business into three segments, see the Interim Results page 2 for further details.

8. Net finance costs

9. Taxation

10. Dividends

Distributions to owners of the parent in the period:

11. Earnings per Share

Adjusted earnings per share has been calculated using adjusted earnings calculated as profit/(loss) after taxation and non-controlling interests but before:

• amortisation of intangible assets - publishing rights, titles and benefits;
• impairment of goodwill;
• share based payments;
• adjusting items included in operating expenses; and
• adjusting items included in net finance costs.

The calculation of the basic and diluted earnings per share is based on the following data:

12. Acquisitions and disposals

Acquisition - SWAT Group Limited - July 2016

On 19 July 2016 Mercia Group Limited acquired the entire issued share capital of SWAT Group Limited ('SWAT'), a provider of training and technical compliance support to accountancy firms in London and the South West of England.

SWAT was acquired for initial consideration of £2,870,000, of which £500,000 was withheld in relation to the Net Asset adjustment. Subsequently, this initial consideration was reduced by £387,538 in relation to the final Net Asset adjustment.

Deferred consideration of up to £3,000,000 is payable contingent on SWAT's future performance for the years ended 30 June 2017 and 2018 and will be paid in cash in one instalment. Management has estimated the expected value of these future payments to be £1,082,000 which has been recognised in the total consideration. Any future movements of this contingent consideration will be charged to the income statement as an adjusting item.

Acquisition related costs of £278,000 have been expensed as an adjusting item in the income statement (see note 7).

Details of the fair value of the purchase consideration, the net assets acquired and goodwill for the acquisition are as follows:

The provisional fair values of assets and liabilities recognised as a result of this acquisition are as follows:

The estimated useful economic life of the intangibles is as follows:

The acquired business contributed revenues of £2,242,659 and contribution of £309,599 to the Group for the period from the date of acquisition to 31 December 2016. Had SWAT been consolidated from 1 June 2016 the group consolidated Income Statement would include pro forma revenue of £2,463,660 and contribution of £309,899.

13. Goodwill, Intangible assets and Property, plant and equipment

Acquisitions (provisional) in goodwill and intangibles relate to the acquisition of SWAT (see note 12).

14. Trade and other receivables

15. Trade and other payables

16. Borrowings

On 31 January 2017 Wilmington acquired HSJ the UK's leading health information, insight and networking business for £19.0m less a £2.0m working capital adjustment. To fund this investment £20.0m of the accordion facility was triggered giving a total unsecured bank facility of £85.0m.

17. Share capital

On 19 September, 2016 262,243 ordinary shares were issued in respect of the vesting of the 2013 PSP Share Awards to employees (including Directors).

At 31 December 2016, 46,584 shares (2015: 46,584) were held in Treasury, which represents 0.1% (2015: 0.1%) of the called up share capital of the Company.

18. Cash generated from operations

Cash conversion is calculated as a percentage of cash generated by operations to Adjusted EBITA as follows:

19. Related party transactions

The Company and its wholly owned subsidiary undertakings offer certain Group-wide purchasing facilities to the Company's other subsidiary undertakings whereby the actual costs are recharged.

The Chief Executive Officer, Pedro Ros, owns a minority shareholding in SMARP OY (a company incorporated in Finland), which provides social media services to the Group, the subsidiary paid £nil (2015: £11,160) during the year to SMARP UK Limited, a subsidiary of SMARP OY.

Close family members of key management personnel provided photography services for the group during the period. The total invoiced for these services was £120 (2015: nil).

20. Seasonality

The Group has traditionally generated the majority of its revenues and profits during the second half of the financial year. This has historically resulted from two factors. Firstly, most of the Group's businesses (the notable exception being AMT) produce seasonally low sales in July, August and December which include holiday periods for many of the Group's clients. Secondly, Inese, Compliance Week and FRA, have major annual events in the second half of the year. The acquisition of HSJ on 31 January 2017 should also benefit reported revenue and earnings in the second half of the year.

21. Events after the reporting period

a) Acquisition - Health Service Journal

On 31 January 2017 the Group acquired the trading assets and the assumption of certain liabilities of Health Service Journal ('HSJ') the UK's leading health information, insight and networking business, from Ascential plc for £19m less an adjustment for working capital. The consideration will be financed out of the Group's £85m revolving multi-currency credit facility following the activation of the accordion. The process of fair valuing HSJ has not been completed at the date of these financial statements. Subject to this process to fair value, the group acquired intangible assets comprising the HSJ brand and customer relationships together with certain net liabilities (including deferred revenue). The excess consideration above the fair value of these acquired net liabilities and deferred revenue will be recognised as goodwill and intangible asset following completion of the exercise to fair value. All amounts are disclosed as provisional.

b) Asset held for sale - Ark Group Limited

In line with the Group's strategy to focus the business around three new knowledge areas going forward, the decision was made to exit the legal practice support services market that Ark Group Limited ('Ark'), which is currently presented in the 'Legal' segment, operates in. Since the balance sheet date the business has been actively marketed at a reasonable sale price and on 16 February 2017 the Board approved the disposal of Ark. The completion date of the transaction is expected to be within twelve months.

As a result after the balance sheet date the assets and liabilities related to Ark Group Limited meet the criteria of an asset held for sale under IFRS 5.

Statement of Directors' Responsibilities

The Directors confirm that, to the best of their knowledge, the Interim Information has been prepared in accordance with International Accounting Standard 34 Interim financial reporting as adopted by the European Union. The Interim Management Report includes a fair review of the Interim Information and, as required by DTR 4.2.7R and DTR 4.2.8R, the following information:

• an indication of important events that have occurred during the first six months of the financial year, and their impact on the condensed set of financial statements, and a description of the principal risks and uncertainties for the remaining six months of the financial year; and
• disclosure of material related party transactions that have taken place in the first six months of the current financial year and of any material changes in the related party transactions described in the last Annual Report and Financial Statements.

A list of current Directors is maintained on the Wilmington plc website: wilmingtonplc.com.

By order of the Board

Anthony Foye

Chief Financial Officer

22 February 2017

Appendix 1 - New operating segments (unaudited)

Wilmington currently manages and reports its business by reference to four knowledge based divisions; Risk & Compliance, Finance, Legal and Insight. The results from the recent SWAT acquisition are included within the Finance division.

From and including 30 June 2017 we will be presenting information on the current structure and representing the same information on our new three divisional structure of Risk & Compliance, Professional and Healthcare.

Wilmington restates below its historical performance to reflect the new structure.