Pre-close Trading Update and Banking Arrangements

25 June 2020

Wilmington plc

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

Pre-close Trading Update and Banking Arrangements

Wilmington plc, the provider of data, information, education and networking services in Risk & Compliance, Healthcare and Professional knowledge areas, today provides an update on trading ahead of its year end on 30 June 2020.  It also confirms the outcome of discussions with its debt providers on covenants and facility limits. 

Trading Update

The Group announced on 25 March 2020 that following the anticipated impact of COVID-19 it was expecting revenue of between £108m and £113m and adjusted PBT of between £8.5m and £12m for its financial year ended 30 June 2020.  The Group is pleased to announce that it now expects both revenue and profits to be towards the top end of that range.  Although we have been unable to run any face to face events or training, the conversion to virtual variants has been more successful than originally expected, enabling us to minimise, but not wholly offset the revenue impact.  This has been complemented by the resilience of our information and data businesses, by operational cost savings and by accessing Government support programs across the globe. 

Networking events - which typically account for c.15% of annual Group revenues

No face to face conferences and events have been held since March, and none are currently planned for the second half of 2020.  Both the Compliance Week Annual Conference and RISE Nashville, which are usually significant events for the Group have been converted into virtual events.  The Compliance Week Annual Conference ran successfully over two days in mid-May and was attended online by around 1,000 delegates and sponsors. RISE Nashville has been rebranded as RISE National and will take place virtually over 26, 29 and 30 June 2020.  An additional 12 smaller virtual conferences have been held over the last three months with good feedback received from participants.

Education and training - which typically accounts for c.40% of annual Group revenues

No face to face training has taken place since March.  The focus of each of the training businesses has been on converting as many courses as possible to virtual which has helped mitigate some of the decline that we had originally anticipated.  Demand for short-period training (i.e. 2 day courses or shorter) is lower than we would have normally expected, but the conversion to virtual has yielded cost savings that are helping to protect some of the margin impact.  Registrations for extended training programs such as ICA diplomas have continued at normal levels and we are seeing customer demand for virtual variants of the summer induction programs for investment banks, albeit we anticipate student numbers will be lower.     

Information and Data - which typically accounts for c.45% of annual Group revenues

We have seen no material impact on demand for data and information products.  65% of data and information products are sold via subscription, typically on an annual basis.

Looking forward, the first six months of our financial year typically involve fewer conferences and events than the second half.  Our current expectation is that we do not anticipate running many, if any, face to face networking events during the rest of calendar year 2020.  We are planning for alternative virtual events whilst retaining the flexibility to convert back if regulations permit and customers demand it.  Similarly, we are organised to run 100% of training courses virtually for the rest of the calendar year but can rapidly convert back to face to face if required. 

Net debt and banking arrangements

The Group has a robust balance sheet and retains significant current liquidity, with £19m of cash and undrawn bank facilities of £16m as of the end of May.  Our cashflow modelling, including scenarios which assume no face to face events or training from now until the end of December, indicates that the Group would remain within existing facility limits albeit with limited headroom in October under the most pessimistic scenarios. 

The likely reduction in profitability that the Group could experience as a result of COVID-19 means that gearing covenants could be breached during the year ended 30 June 2021.  Accordingly the Board has arranged with its existing debt providers for a temporary relaxation of covenant limits to take account of the Group's most pessimistic scenarios.  The new covenant limits are as follows:

Testing date                  Original Limit                   New Limit

30 Sep 2020                       3.0 times                     5.0 times

31 Dec 2020                       3.0 times                     6.5 times

31 Mar 2021                       3.0 times                     5.5 times

30 Jun 2021                        3.0 times                     4.5 times

30 Sep 2021                       3.0 times                     3.0 times  

To ensure the Group has sufficient facility headroom to deal with the most pessimistic trading scenarios the Board has agreed in principle with its lenders to access £15m of additional facility headroom through the Government's Coronavirus Large Business Interruption Scheme ("CLBILS") for 12 months from July 2020.  Facility agreements for the additional £15m are expected to be formalised in July.  The additional headroom this facility will provide is not expected to be needed to be drawn under most anticipated trading scenarios, but the Board believes it to be prudent at this stage to secure the extra headroom in case conditions deteriorate. The Board remains committed to resuming the payment of dividends as soon as trading conditions permit and will review the need for the CLBILS facility on an ongoing basis with that in mind.   

The Group expects to announce its results for the year ended 30 June 2020 on 17 September 2020. 

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.

Notes to Editors

Wilmington plc is the recognised knowledge leader and partner of choice for information, education and networking in Risk & Compliance, Healthcare and Professional areas. Wilmington employs close to 1,000 people and sells to around 120 countries. Wilmington is listed on the main market of the London Stock Exchange.