Wilmington Regulatory News (WIL)

26 February 2013

WILMINGTON GROUP PLC

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

Interim Results for the six months ended 31 December 2012

Wilmington Group plc, the provider of Information, Compliance and Education to professional marketstoday announces its interim results for the six months ended 31 December 2012.

Financial highlights

- Adjusted EBITA1 increased 10% to £7.1m (2011: £6.5m)

- Adjusted EBITA margins improved to 17.4% (2011: 15.6%)

- Adjusted Profit before Tax2 was up 15% to £6.0m (2011: £5.3m)

- Profit before Tax was up to £5.1m (2011: £0.9m)

- Adjusted Earnings per Share3 were up 23% at 5.47p (2011: 4.45p)

- Group revenues for the period were largely unchanged being 1.7% lower at £40.9m (2011: £41.6m) and 1.0% lower on a like-for-like basis

- Disposal of surplus freehold property for £4.4m

- Net debt reduced by £7.5m to £34.0m (2011: £41.5m)

- Interim dividend maintained at 3.5p

Operational highlights

·; Good progress towards our strategic objectives

- Continued transition to a better quality, higher margin business

- Increased proportion of recurring subscription based revenues; now 39% of total revenue (2011: 37%)

- Subscription and information sales now represent 59% of revenue (2011: 57%)

- Growing international revenues; now 29.3% (2011: 28.6%)

- Reduced exposure to advertising; now only 4% of revenue (2011: 5%)

- Further controlled phasing out of legacy print products (print revenues now 2%, 2011: 3%)

- Exit from contract directory publishing

- Continued significant investment in technology and new product development

·; On track to achieve medium term financial targets; to grow Adjusted Profit Before Tax by 50% and improve Adjusted EBITA margins by 5 percentage points by 20154

·; Trading in line with management expectations, outlook for full year remains unchanged

·; Acquisition

Acquisition on 7 February 2013 of NHiS further strengthens position in healthcare market and is consistent with our strategy of acquiring businesses with high repeat revenues and strong cash flows in the Group's key markets

1 Adjusted EBITA - see note 5 to the interim financial statements

2 Adjusted Profit before Tax - see note 5 to the interim financial statements

3 Adjusted Earnings per Share - see note 12 to the interim financial statements

4 Targets announced in February 2012 based on results for year to 30 June 2011

Mark Asplin, Chairman, commented:

"It has been a solid first six months' performance with strong growth in many key markets offset by the planned disposal and rationalisation of loss making and non-core activities. The new management structures have bedded down well and the emphasis has been on margin improvement, efficiency reviews and firm action to remove underperforming activities.

"We have seen good overall growth in profits and operating margins as we continue to develop our portfolio to meet our clients' changing information, compliance and education needs. This together with reduced interest costs has resulted in a 15% increase in Adjusted Profit before Tax and a 23% increase in Adjusted Earnings Per Share. In particular, our Banking & Compliance and Pensions & Insurance divisions have both delivered strong profit and revenue growth.

"Our outlook for the full year remains unchanged. Whilst the broader economic conditions remain challenging, most of our market sectors have been resilient. The Group actively manages its cost base and the reorganisations announced last year have benefitted the Group. We expect to benefit further from the resultant cost savings over the next few months and are actively pursuing further efficiency gains across our businesses. Our acquisition of NHiS, completed on 7 February 2013, is an example of our emphasis on investing in quality, high margin, growth businesses within our key markets."

For further information, please contact:

Notes to Editors

Wilmington Group plc is one of the UK's leading providers of Information, Compliance and Education for professional business markets. The Group provides business intelligence, information, training, education, events and support services for a variety of markets including the accountancy, banking, charities, financial services, healthcare, insurance, legal, and pensions sectors. Capitalised at approximately £135 million, Wilmington floated on the London Stock Exchange in 1995.

A copy of the investor presentation is available on the Group's website www.wilmington.co.uk from 11.00 am today.

Interim Management Report

I am pleased to present my report on Wilmington's results for the six months ended 31 December 2012. During the period Wilmington has performed well and produced another solid performance with Adjusted EBITA1 up 10% to £7.1m from £6.5m in 2011. Revenues were down 1.7% to £40.9m (2011: £41.6m) reflecting the disposal of businesses since last year, continued rationalisation of underperforming businesses, our exit from contract directory publishing and currency translation. Underlying revenues were down 1.0% compared to the same period in 2011.

Adjusted Net Profit before tax 2 was up 15% to £6.0m (2011: £5.3m).

We indicated in September that we were seeking to sell our surplus Paulton House freehold property. The disposal of this property was completed in December 2012 for proceeds of £4.4m which have been applied to help reduce our borrowings available under our £65m multi-currency revolving credit facility. The property sale proceeds together with strong trading cash flow have reduced finance costs in the period by 18% (£0.2m) and our borrowings by £7.5m (18%) to £34.0m compared to £41.5m at 31 December 2011.

Business Strategy

Wilmington's strategy is to increase shareholder value by delivering sustainable and growing profits from servicing the information, compliance and education requirements of professional business markets.

Our investment strategy is focused on developing existing and acquiring new businesses with high repeat revenues and strong, cash generative income streams both in the UK and overseas. The result of implementing this strategy will be a business with an increasing proportion of revenues derived from subscriptions to products which disseminate content-rich, high-value information digitally. Tighter regulatory control and more complex legislation in our key markets will continue to drive the demand for our products and services, both in the UK and abroad.

Operational Review

As announced in December 2012 we now manage and report our business by reference to six market areas; Pensions & Insurance, Banking & Compliance, Healthcare, Business Intelligence, Accountancy and Legal.

Pensions & Insurance (16% of Group revenue, 33% of Group Contribution4)

This division, which includes Axco, Pendragon and ICP, provides in depth regulatory and compliance information, market intelligence, analysis and workflow tools for the international insurance market and the UK pensions industry.

Divisional revenue grew 8%. Axco, which has benefitted from significant investment since joining the Group, reported 13% revenue growth helped by the launch of new digital subscription products and analytics services. Sales were also boosted by increasing demand from emerging markets. Pendragon maintained its market leading position in the UK pensions market and recorded steady growth of 2%. ICP has seen an increase in demand for credit reports, particularly in the Middle East, and recorded growth of 5%.

On top of continued investment in new products and associated infrastructure, contribution grew by 17% to £2.9m (2011: £2.5m) reflecting the operational leverage within the business.

Banking & Compliance (21% of Group revenue, 24% of Group Contribution4)

The Banking & Compliance division provides corporate finance and capital markets training and accredited programmes in compliance, anti-money laundering, financial crime and trust management. This division serves primarily tier 1 banks, the international financial services industry and major multinational companies.

The division continued its strong revenue growth with an increase of 9% compared to 2011. Adjusting for adverse currency movements the underlying growth was 10%. Growth drivers included the provision of compliance and anti-money laundering programmes to international banks and major multinational companies in the oil industry and on-line retailing. We have also launched new initiatives in Australia, Hong Kong, Indonesia, Malaysia, the Middle East and Russia.

Contribution was 25% ahead of last year at £2.1m (2011: £1.7m) despite continued investment in new programs and support systems which will help drive future growth.

Healthcare (15% of Group revenue, 15% of Group Contribution4)

This division includes Agence de Presse Médicale, our French language medical news agency, OnMedica, our digital healthcare marketing business, and Binley's, our UK healthcare information business.

Revenue was down 8% (£0.5m) but, adjusting for adverse currency movements (£0.2m), the underlying revenue was down 5%. This underlying variance was due to a scaling back of OnMedica (£0.1m) and a fall-off in lower margin mailing services (£0.2m) partly in response to uncertainty over the planned NHS changes due in April 2013.

The higher margin business intelligence unit has seen significant growth albeit from a low base, growing from £0.1m in 2011 to £0.3m in 2012. NHiS, which was acquired in February 2013, has also enjoyed significant growth in this area.

Benefiting from these higher margin activities, contribution increased by 9% to £1.3m (2011: £1.2m).

Business Intelligence (13% of Group revenue, 12% of Group Contribution4)

This division includes our Data Suppression and Fraud Prevention services as well as our Charities, Fund Management and Film & TV services. The division is undergoing the most significant transformation of all our businesses, as it transitions from print based information to digital services, subscription information products and workflow tools. Digital services now represent 68% of divisional revenues (2011: 70%) reflecting the exit last year from Contract Directory Publishing.

Overall turnover was down 4% (£0.2m). As previously announced, we exited contract directory publishing in June 2012. This reduced turnover by £0.6m compared to the same period in the prior year and the underlying increase in our digital/online services, representing higher quality income streams, did not fully offset the rate of decline in corresponding print revenues.

It was encouraging that in September 2012 the Charity Choice website won the prestigious New Product Development of the Year (Digital Media) at the PPA Awards.

Contribution dropped by 28% to £1.0m (2011: £1.4m) reflecting increased depreciation associated with the investment in the new digital products and the effect of eliminating recognition of print work in progress

Accountancy (12% of Group revenue, 8% of Group Contribution4)

The Accountancy division is the leading provider of training, technical support and marketing services to accountancy firms in the UK.

The first half of the year saw further reduction of marginal Quorum branded training courses together with a further decline in printed materials offset by growth in digital replacement products. Overall revenues declined by 4% but contribution increased by 10% (£0.1m) due to improved operational efficiency.

Legal (23% of Group revenue, 8% of Group Contribution4)

The Legal division provides a range of training, professional support services and information including Continuing Legal Education (CLE), expert witness training, databases and magazines. It saw revenue reduce by 9% (£1.0m). This reduction reflects the disposal of our company formations business in June 2012 (which contributed £0.5m to turnover in 2011) resulting in an underlying revenue decline of 5% and the continued rationalisation of our conference and course programme, a process started in late 2011.

On 3 January 2013 we transferred our Ark Australia operation to local management due to declining market conditions. Revenue from this area was £0.2m down on 2011 in the period.

There were positive improvements in other legal markets notably in public CLE courses, which saw an 8% increase in revenues, and our Bond Solon business which also saw revenue grow by 8% driven partly by high demand for its services following its involvement in the Abramovich case.

The new legal division management team and structure are working well and despite challenging market conditions the division improved its contribution by 61% to £0.7m (2011: £0.4m).

Group Overheads

Group overheads, which include Board and head office salaries and associated costs as well as unallocated central overheads and foreign exchange gains or losses on translating foreign currency assets and liabilities, increased by £0.2m to £1.5m. Overheads in 2011 benefitted by £0.2m from foreign currency gains on revaluing foreign currency assets which reversed by the end of 2012. Therefore like-for-like the increase in group overheads was 4%.

Financial Performance

Revenue for the six months to 31 December 2012 was largely unchanged being £0.7m lower at £40.9m (2011: £41.6m). On a like-for-like basis (excluding the impact of acquisitions, foreign exchange and disposals) revenue was down 1.0%. Adjusted EBITA1 was up 10% at £7.1m (2011: £6.5m).

Adjusted Profit before Tax2 increased by 15% to £6.0m (2011: £5.3m). This reflects an increase in Adjusted EBITA margins together with a reduction in interest from £1.3m (2011) to £1.1m as a result of reduced borrowings.

Profit before Tax increased to £5.1m from £0.9m reflecting a net profit of £3.3m from the disposal of Paulton House, lower bank charges and interest and improved EBITA.

Adjusted Earnings per Share3 increased by 23% to 5.47p (2011: 4.45p). Basic earnings per share increased to 5.67p from 0.61p and diluted earnings per share increased to 5.49p from 0.59p.

Balance Sheet

Net assets increased by £3.2m compared to 30 June 2012 from £51.6m to £54.8m.

Tangible Fixed Assets decreased by £0.3m to £6.4m reflecting the permanent reduction in value of a freehold property. Intangible Assets decreased by £2.6m, reflecting normal amortisation charges.

In June 2012 we announced our exit from contract directory publishing and this was reflected in the elimination of significant investments in Stocks and WIP which have reduced by £1.0m to £nil compared to 31 December 2011.

Trade Debtors within Trade and Other Receivables were down £0.9m compared to 30 June 2012 reflecting good credit control and some timing differences on subscription renewals in Axco which were resolved by the middle of January 2013.

Trade and Other Payables were down £3.4m compared to 30 June 2012. Within this category, Subscriptions and Deferred Income were down £1.7m compared to 30 June 2012 and down £1.8m compared to 31 December 2011. Of this £1.7m, £0.6m relates to foreign exchange differences and the exit from the contract publishing business and £0.7m relates to reductions associated with reduced numbers of events. The remaining shortfall was temporarily affected by timing on some Axco subscription renewals. By the end of January 2013 the contract renewals were complete and Axco deferred revenue was up over 10% on the same period in 2012.

Operating cash flow declined marginally to £5.2m (2011: £5.7m). Overall debt was down to £34.0m (representing 52% of our debt facility of £65m) a reduction of £2.2m compared to 30 June 2012. This £2.2m reduction was helped by the property disposal proceeds of £4.4m and the re issue of Treasury Shares for £1.0m offset by £0.6m non-recurring costs (2011: £0.6m) and £1.7m for the purchase of a minority holding. Cash flow conversion which is seasonally low in the first six months was 73% compared to 87% in the same period in 2011. The lower conversion level was the result of a build-up of creditors to 30 June 2012 preceding the transfer of back office finance processing to the Group's central location and the exit from the seasonally weighted contract directory publishing business.

Dividend

It is the Board's intention to maintain the dividend at the same level as the prior year. An interim dividend of 3.5p per share (2011: interim 3.5p, June 2012 final 3.5p) will be paid on 11 April 2013 to shareholders on the share register as at 15 March 2013.

Board Changes

In November 2012 Basil Brookes, who had been the Finance Director since the Company's listing in 1992, retired. The Board wishes to record its thanks to Basil for his hard work and significant contribution to the Group over many years and wishes him a happy retirement. Basil was succeeded by Tony Foye at the Annual General Meeting on 14 November 2012.

NHiS

On 7 February 2013 Wilmington acquired NHiS, a leading provider of business intelligence, data analysis, workflow tools and other services to pharmaceutical companies in the UK for £5.6m. Around 40% of its revenue is derived from subscriptions and the business has enjoyed high overall renewal rates as defined by customer spend in excess of 90%. Over 75% of NHiS revenue is delivered digitally.

The acquisition of NHiS is consistent with Wilmington's strategy of acquiring businesses with high repeat revenues and strong, cash generative income streams in the Group's key markets. The business will form part of the Wilmington Healthcare division and will work closely with the highly complementary Binley's healthcare information business.

Outlook

Our outlook for the full year remains unchanged. Whilst economic conditions remain challenging, most areas of our business have been resilient and our internationally focussed divisions are generating good growth. This growth, alongside cost savings and management changes which have already been implemented, should result in an outcome for the full year in line with our expectations.

The investments made during the last financial year and those being made this year are expected to continue to transition the Group to a higher quality, higher margin business, which can deliver our medium term growth targets.

Mark Asplin

Chairman

1 Adjusted EBITA - see note 5 to the interim financial statements

2 Adjusted Profit before Tax - see note 5 to the interim financial statements

3 Adjusted Earnings per Share - see note 12 to the interim financial statements

4 Group Contribution - see note 6 to the interim financial statements

Consolidated Income Statement

The above Consolidated Income Statement should be read in conjunction with the accompanying notes.

All items in the current and comparative periods relate to continuing activities.

Consolidated Statement of Comprehensive Income

The above Consolidated Statement of Comprehensive Income should be read in conjunction with the accompanying notes.

Consolidated Statement of Changes in Equity

The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.

Consolidated Balance Sheet

The above Consolidated Balance Sheet should be read in conjunction with the accompanying notes.

Consolidated Statement of Cash Flow

The above Consolidated Statement of Cash Flow should be read in conjunction with the accompanying notes.

Notes to the Financial Information

1. 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 has its primary listing on the London Stock Exchange.

This condensed consolidated interim financial information was approved for issue on 26 February 2013.

This unaudited condensed consolidated interim financial information does not comprise statutory accounts within the meaning of section 434 of the Companies Act 2006. Statutory accounts for the year ended 30 June 2012 were approved by the board of Directors on 18 September 2012 and delivered to the Registrar of Companies. 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.

2. Basis of preparation

This condensed consolidated interim financial information for the six months ended 31 December 2012 has been prepared in accordance with the Disclosure and Transparency Rules of the Financial Services Authority and with IAS 34, ''Interim financial reporting'' as adopted by the European Union. The condensed consolidated interim financial information should be read in conjunction with the annual financial statements for the year ended 30 June 2012, which have been prepared in accordance with IFRSs as adopted by the European Union, are available on the Group's website www.wilmington.co.uk.

Going Concern

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 this interim financial information.

3. Accounting policies

The accounting policies applied are consistent with those of the annual Financial Statements for the year ended 30 June 2012, as described in those annual Financial Statements.

The following new amendment to standards and interpretations, which does not have a material impact, is mandatory for the first time for the financial year beginning 1 July 2012: 

·; Amendment to IAS 1,''Presentation of Financial Statements'' on Other Comprehensive Income effective for accounting periods beginning on or after 1 July 2012. These Financial Statements have been prepared in accordance with this amendment.

The following new amendment to standards and interpretations is mandatory for the first time for the financial year beginning 1 July 2012, but is not currently relevant for the Group: 

·; Amendment to IAS 12 ''Income taxes'' on deferred tax, effective for accounting periods beginning on or after 1 January 2012.

The following new standards, amendments to standards and interpretations have been issued, but are not effective for the financial year beginning 1 July 2012 and have not been early adopted: 

·; IFRS 9, ''Financial instruments - classification and measurement of financial assets'', effective for accounting periods beginning on or after 1 January 2015. Management will assess the impact on the Group of this standard prior to the effective date of implementation.

·; IFRS 10, ''Consolidated Financial Statements'', effective for accounting periods beginning on or after 1 January 2013. Management will assess the impact on the Group of this standard prior to the effective date of implementation.

·; IFRS 11, ''Joint arrangements'', effective for accounting periods beginning on or after 1 January 2013. Management will assess the impact on the Group of this standard prior to the effective date of implementation.

·; IFRS 12, ''Disclosures of interests in other entities'', effective for accounting periods beginning on or after 1 January 2013. Management will assess the impact on the Group of this standard prior to the effective date of implementation.

·; IFRS 13, ''Fair value measurement'', effective for accounting periods beginning on or after 1 January 2013. Management will assess the impact on the Group of this standard prior to the effective date of implementation.

·; IAS 19 (revised 2011) ''Employee benefits'', effective for accounting periods beginning on or after 1 January 2013. Management will assess the impact on the Group of this standard prior to the effective date of implementation.

·; IAS 27 (revised 2011) ''Separate Financial Statements'', effective for accounting periods beginning on or after 1 January 2013. Management will assess the impact on the Group of this standard prior to the effective date of implementation.

·; IAS 28 (revised 2011) ''Associates and joint ventures'', effective for accounting periods beginning on or after 1 January 2013. Management will assess the impact on the Group of this standard prior to the effective date of implementation.

·; Amendment to IFRS 1,''First time adoption on government grants'', effective for accounting periods beginning on or after 1 January 2013. Management will assess the impact on the Group of this standard prior to the effective date of implementation.

·; Amendments to IFRS 7 ''Financial instruments asset and liability offsetting'', effective for accounting periods beginning on or after 1 January 2013. Management will assess the impact on the Group of this standard prior to the effective date of implementation.

·; ''Annual improvements 2011'', effective for accounting periods beginning on or after 1 January 2013. Management will assess the impact on the Group of this standard prior to the effective date of implementation.

4. Risks and uncertainties

The Group's principal risks and uncertainties remain as stated on page 19 of the Business Review in the Annual Report and Financial Statements for the year ended 30 June 2012.

The main risks arising from the Group's financial instruments are interest rate risk, liquidity risk and foreign currency risk. At 31 December 2012, the Group had undrawn committed borrowing facilities of £27m, comprising a bank facility provided by Barclays Capital, HSBC and Royal Bank of Scotland. Any non-compliance with covenants within the borrowing arrangements could, if not waived, constitute an event of default with respect to such arrangements. The Group was fully compliant with its financial covenants throughout each of the periods presented.

The Board reviews and agrees policies for managing each of these risks and they are summarised below. These policies are unchanged from the previous year.

a) Interest rate risk

The Group finances its operations through a mixture of retained profits, operational cash flow and bank borrowings. Historically the Group has expanded its operations both organically and by acquisition, which has led on occasions to the need for external finance.

In November 2010, the Group entered into two hedging instruments. Firstly, a 5 year £15m interest rate swap fixed against 3 month LIBOR with a forward start of 21 November 2011 paying interest on £15m at a fixed rate of 2.68% was entered into. Secondly, in November 2010, a 3 year £10m interest rate swap fixed against 3 month LIBOR with a forward start of 21 November 2011 paying interest on £10m at a fixed rate of 2.12% was entered into. These derivatives have been designated as cash flow hedges in order to manage interest rate risk associated with the first £25m of the credit facility. Payments received under the swaps have been matched against interest paid quarterly during the period and the entire mark to market loss on the derivatives have been recognised in equity, following the Directors' assessment of the hedge's effectiveness.

There have been no significant changes in the business or economic circumstances that affect the fair value of the Group's financial assets and financial liabilities. The levels used for fair value measurement of financial instruments remains unchanged from those disclosed in note 23 of the audited Financial Statements for the year ended 30 June 2012.

b) Liquidity risk

The Group has an unsecured committed bank facility of £65m (2011: £65m) to February 2016. The facility currently comprises a revolving credit facility of £60m (2011: £60m) and an overdraft facility of £5m (2011: £5m). At 31 December 2012, £38m of the revolving credit facility was drawn down (2011: £42m). Interest is charged on the amount drawn down at 2.00 to 2.75 percent above LIBOR depending upon leverage. Under the facility, drawdown is made for interest fixture periods of up to six months in duration.

The bank overdrafts are the subject of a Group set-off arrangement. Interest is charged on the overdraft at 2.25% over Barclays bank base rate.

c) Foreign currency risk

The Group has a substantial customer base overseas. The Group maintains bank accounts in foreign currency and converts this currency to Sterling at the appropriate times minimising the exposure to exchange fluctuations.

On 12 March 2012, the Group sold forward US$0.5m to 30 November 2012 at a rate of 1.5614. On 15 March 2012, the Group sold forward a total of US$3.5m at rates between 1.5290 and 1.5860 which are determined on 3 dates (''the expiry dates'') between 28 September 2012 and 27 March 2013. Under the terms of the contract the dollars are delivered during a 3 month window following the expiry date. These contracts were entered into in order to provide certainty in Sterling terms of the net US$ income of the Adkins & Matchett business.

On 12 December 2012, the Group sold forward €0.6m to 28 June 2013at a rate of 1.2395. This contract was entered into in order to provide certainty in Sterling terms of the net Euro income of the APM business.

The gains/(losses) on these contracts are recognised in the Income Statement.

5. Adjusted Profit

To allow shareholders to gain a better understanding of the trading performance of the Group, Adjusted Profit has been calculated as profit before income tax after adding back:

·; amortisation of publishing rights, titles and benefits,

·; impairment of goodwill,

·; unwinding of the discount on deferred consideration,

·; unwinding of the discount on the provision for the future purchase of non-controlling interests,

·; share based payments and

·; non-recurring items.

This reflects an amendment to the definition of Adjusted Profit to exclude the previous policy of adding back the amortisation of computer software to be in line with current market practice. It reconciles to profit on continuing activities before income tax as follows:

6. Segmental information

The Group now reports its results in six business divisions (Pensions & Insurance, Banking & Compliance, Healthcare, Business Intelligence, Accountancy and Legal), as this more accurately reflects the way the Group is now being managed. Other than the change to the definition of Adjusted Profit referred to in note 5, there is no change to any of the Group's accounting policies and there is no restatement of either revenues or profitability, other than this revised segmentation by the six operating division headings.

Operating divisions are reported in a manner consistent with the internal reporting provided to the Company's Board of Directors, which is considered to be the Group's chief operating decision maker.

The Board considers the business from both a geographic and product perspective. Geographically, management considers the performance of the Group between the UK and overseas.

(a) Business segments

Six months ended 31 December 2012 (unaudited)

Six months ended 31 December 2011 (unaudited) (restated)

Twelve months ended 30 June 2012 (audited) (restated)

(b) Segmental information by geography

The geographical analysis of revenue by destination is as follows:

7. Non-recurring items

The following items of an unusual nature, size or incidence have been charged to profit during the period and shown as non-recurring items:

8. Finance income and costs

9. Income tax expense

The Group does not anticipate any tax liability on the profit on sale of the freehold property due to the availability of capital losses against which the capital gain can be offset.

10. Profit / (loss) for the period from discontinued operations after income tax

During the six months ended 31 December 2012 and in the comparative periods presented, no operations met the definition of discontinued operations.

11. Dividends

Amounts recognised as distributions to Owners of the Parent in the period.

12. Earnings per share

Adjusted Earnings per Share has been calculated using an adjusted profit after taxation and non-controlling interests but before:

·; amortisation of publishing rights, titles and benefits,

·; non-recurring items,

·; share-based payments,

·; unwinding of the discount on the provision for the future purchase of non-controlling interests and

·; unwinding of the discount on deferred consideration.

This reflects an amendment to the definition of Adjusted Profit to exclude the previous policy of adding back the amortisation of computer software to be in line with current market practice.

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

13. Business combinations

During the period, the Group acquired the remaining 18.8% of the issued share capital of The Matchett Group Limited for £1,707,000 thus making it a wholly owned subsidiary undertaking.

14. Property, plant and equipment, intangible assets and goodwill