LONDON (ShareCast) - (Sharecast News) - Information, education and networking service provider Wilmington updated the market on its trading for the full year ended 30 June on Friday, reporting that it expected full-year adjusted profit before tax to be "broadly in line" with market expectations.
The London-listed firm said that level of profitability had 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 those actions were one-off in their nature, the board explained, and were not expected to benefit the current financial year.

The second half of the year did not see the recovery in trading performance previously anticipated, the directors added.

As a result, revenue for the full year - while up 1% on an absolute basis - would 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 Wilmington reporting 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 provided encouragement as the group entered the new financial year.

Additionally, revenue in the Healthcare division was impacted by the previously-communicated decision to reduce the output of certain networking events in the US, although that had little profit impact.

The company's Professional division had a "reasonable" year, according to the board, which said that 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, apparently helped by a strong second half performance.

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

Net debt at year-end was around £40.0m, in line with £40.0m a year ago and down from £45.9m at the half-year.

The board said that improvement over the second half of the year reflected "good" cash generation, offset by the cash impacts of the acquisition of Interactive Medica and outflows associated with some of the exceptional items that were reported in the first half of the year.

"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," the Wilmington board said in its statement.

"Each division is expected to contribute to the growth with the positive actions taken over the last year expected to begin to bear fruit."

While recognising the need for strict cost control, the board said it had identified that underlying costs would rise this year due to inflationary pressures, the full-year impact of the new London headquarters and IT infrastructure implemented last year, and the one-off nature of some 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."

Wilmington said it recognised that benefits from the "significant actions" taken over the last year were taking longer to materialise than previously expected.

It said those actions had included investments in the core digital platforms; in the new London headquarters; and in integrating the UK healthcare businesses - including the recently-acquired HSJ - into a single operating unit.

The board added that it recognised that the additional effort required for those actions impacted on growth plans, and also noted that in certain cases, cost reduction actions had 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."

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