Wilmington Regulatory News (WIL)

6 July 2018

Wilmington plc

("Wilmington" or the "Group")

Year end Trading Update

Wilmington plc (LSE: WIL), the provider of information, education and networking services in Risk & Compliance, Professional and Healthcare knowledge areas, announces a trading update for the full year ended 30 June 2018.

Trading Update

Following the completion of the year, Wilmington expects that full year adjusted profit before tax will be broadly in line with market expectations. This level of profitability has been achieved despite revenue being lower than previously expected at around £122m, with cost reduction actions offsetting the impact of the revenue shortfall. Certain of these actions were one-off in their nature and are not expected to benefit the current financial year.

The second half of the year did not see the recovery in trading performance previously anticipated. As a result, revenue for the full year, whilst up 1% on an absolute basis will be down around 3% on an organic basis, adjusting for the impact of acquisitions and at constant currency.

Divisionally, revenue performance in the Healthcare division continued to be a challenge in the second half, with no significant improvement in performance in the core UK Healthcare business over that experienced in the first half. Sales activity in that business did however show signs of improving over the second half which provides encouragement as the Group enters the new financial year. Additionally, revenue in the Healthcare division has been impacted by the previously communicated decision to reduce the output of certain networking events in the US, although this had little profit impact.

The Professional division has had a reasonable year. Excluding the impact of the planned decision to close the Ark business last year, revenue was flat on the prior year on an organic basis. Growth in Accountancy offset a small decline in Investment Banking with the Law businesses flat over the course of the year, helped by a strong second half performance.

The Risk & Compliance division had a stronger second half performance, driven in part by good membership uptake for the International Compliance Association ("ICA"), an uplift in demand for in-house courses in the UK, and strong demand in Asia Pacific.

Net debt at the year end was around £40.0m (30 June 2017: £40.0m; 31 December 2017: £45.9m). This improvement over the second half of the year reflects good cash generation offset by the cash impacts of the acquisition of Interactive Medica and outflows associated with certain of the exceptional items that were reported in the first half of the year.

Outlook

Given the challenges experienced in the second half of the year, the Board now expects that Group revenue growth for the current financial year just started will be in the low single digit percentage range. Each division is expected to contribute to the growth with the positive actions taken over the last year expected to begin to bear fruit.

Whilst recognising the need for strict cost control, the Board has identified that underlying costs will rise this year due to inflationary pressures, the full year impact of the new London HQ and IT infrastructure implemented last year and the one-off nature of certain of the cost reductions achieved last year. The overall impact of this is that the Board expects there will be a reduction in profit for the current financial year compared with the prior year which will be in the high single digit range.

The Board recognises that benefits from the significant actions taken over the last year are taking longer to materialise than previously expected. These actions have included investments in the core digital platforms; in the new London HQ; and in integrating the UK healthcare businesses (including the recently acquired HSJ) into a single operating unit. The Board recognises that the additional effort required for these actions impacted on growth plans. It also notes that, in certain cases, cost reduction actions have delayed the implementation and hence the benefits.

The Board continues to believe that the investments recently made and the actions taken will yield the benefits planned and hence remains confident in the medium-term prospects for the Group. It remains committed to achieving the mid-single digit revenue growth levels which it believes reflect achievable underlying growth rates for its chosen markets.

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.

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Notes to Editors

Wilmington plc is the recognised knowledge leader and partner of choice for information, education and networking in Risk & Compliance, Professional and Healthcare areas. Capitalised at approximately £210 million, Wilmington floated on the London Stock Exchange in 1995.