Acquisitions pay off for Wilmington

24th Feb 2011 16:45

The government's comprehensive spending review (CSR) continues to hang over publishing and training outfit Wilmington, but the company is quietly confident about its prospects as trading conditions improved in the second half of 2010.Revenue in the six months to 31 December climbed 7.4% to £39.67m from £36.95m at the interim stage the year before, with like for like sales (excluding acquisitions) up 3.25% year on year.Reported profit before tax eased to £2.47m from £2.66m in the second half of 2009 but adjusted profit before tax, which strips out non-recurring items, improved 10.3% to £6.1m.The Training & Events division put on a good show, growing profit by 10.1% to £3.1m on revenues that climbed 5.4% to £21.9m. Recent acquisition Matchett is looking like a wise purchase; the company, which provides graduate entry training to international investment banks, showed significant growth though trading conditions in the legal sector remained difficult.The showing by the Publishing & Information arm was described by the group as "solid", with profit up by 6.7% to £4.8m on revenues that grew 9.9% to £17.7m, largely as a result of the acquisition of Axco, the provider of compliance and regulatory information to the insurance world."We expect underlying trading conditions in the second half of our financial year to be broadly similar to the same period in the prior year. Our investment plans are on target and we anticipate that investment will continue in the second half of the current financial year. It is pleasing to report that the group continues to generate strong cash flows," said Wilmington chairman David Summers.Singer Capital Markets said the interim results were "on track" but said the company valuation looks "quite demanding given the outlook" and predicts that the shares "look likely to remain volatile near term."Peel Hunt, however, noted that the outlook statement was "less specifically cautious" than the interim management statement, but conceded that it would need to revise its 2011 or 2012 numbers to reflect "continued CSR pressure, legal weakness and a management that is choosing to invest for the future."Peel Hunt rates the shares a "hold" and has a target price of 155p.The interim dividend has been maintained at 3.5p.