TIDMDATA
RNS Number : 5062M
GlobalData PLC
31 July 2017
31 July 2017
For release
GlobalData Plc
Unaudited Interim Report For The Six Months Ended 30 June
2017
"Strong revenue growth with business model progressing well"
Key Achievements
-- Launch of new brand
-- Healthcare proposition broadened by a further bolt-on acquisition
-- Strengthened business infrastructure and sales processes
-- New committed banking facilities of GBP75m
Financial Highlights
-- Group revenue increased by 23% to GBP57.9m (2016: GBP47.1m)
-- Deferred revenues increased by 35% to GBP51.3m (2016: GBP37.9m)
-- Adjusted EBITDA(1) increased by 17% to GBP11.0m (2016: GBP9.4m)
-- Profit before tax of GBP8,000 (2016: GBP1.3m loss) inclusive
of GBP6.8m (2016: GBP7.3m) amortisation charge
-- Interim dividend of 3.0 pence per ordinary share (2016: 2.5
pence) with full year projected as 7.7 pence (2016: 6.5 pence)
Bernard Cragg, Executive Chairman of GlobalData Plc,
commented:
"We are beginning to see the benefits of scale and consistency.
The half year results reflect the good progress we have made in
developing our business model, the fundamentals of which are
robust, profitable and engineered for long-term growth."
Note 1: Adjusted EBITDA: Earnings before interest, tax,
depreciation and amortisation, non-trading exchange rate movements,
impairment, share based payments, adjusted for costs associated
with derivatives, acquisitions and restructuring of the Group.
Adjusted EBITDA margin is defined as: Adjusted EBITDA as a
percentage of revenue.
About GlobalData Plc
4,000 of the world's largest companies make better and more
timely decisions thanks to our unique data, expert analysis and
innovative solutions delivered through a single platform.
At GlobalData, our mission is to help our clients decode the
future to be more successful and innovative.
We are now one of the largest data and insights solution
providers in the world.
ENQUIRIES
GlobalData Plc 0207 936 6400
Mike Danson, Chief Executive
Simon Pyper, Chief Financial Officer
N+1 Singer 0207 496 3000
James Maxwell
James White
Hudson Sandler 0207 796 4133
Nick Lyon
INTERIM STATEMENT
We are a global business information company and one of the
world's leading data insights and solution providers operating
across multiple industries and geographies.
The results for the first half show significant revenue growth
(23%) and deferred revenue growth (35%). In particular, the Group
has recorded strong revenues from our key North and South American
market, which is one of our principal growth objectives. Whilst the
full benefit of the transformation of our business and our
investment in a global sales infrastructure will take some time to
fully work through to profit, the revenue impact can already be
seen.
Our product set is global, proprietary and scalable. We create
and own our own premium content, which we create once and deliver
online to a growing client base in multiple formats (subscriptions,
research and reports) across multiple geographies.
We now serve the needs of over 4,000 clients who operate in
dynamic and highly competitive markets. We continue to improve our
proposition by further embedding ourselves with clients and making
our offering more compelling to potential clients. We are
engineering our business to more fully leverage the scale of our
operations and, as importantly, to manage more efficiently the
level of growth that we are currently achieving.
The results reflect the good progress we have made in developing
our business model, the fundamentals of which are robust,
profitable and engineered for long-term growth. Despite the good
progress we have made, there remains work to be done before we see
the full benefits of our transformation and reach a point, where
incremental revenues require only modest amounts of additional
costs, such as sales and marketing spend, whilst the remainder of
our cost base remains largely fixed.
Over time, once our product and platform investments normalise,
the business would expect to deliver improved operating margins as
the Group starts to fully leverage the benefits of operational
gearing.
Our Strategic Priorities
We have four core strategic priorities:
-- To develop world class products
-- To develop our sales capabilities
-- To improve operational effectiveness
-- To provide best in class customer service
Developing world class products
Our content is proprietary, data driven, analyst led and
provides our clients with strategic and tactical insights for the
markets that they operate in. Our content is robust, relevant and
unique; the majority of which can be accessed via our online
delivery platform, which give our clients real time access to
critical business information and work flow tools.
The key metric on how successful we are in developing
world-class products and services is renewal rates and we will be
reporting on this along with our full year results.
Develop our sales capabilities
The business information market is dominated by North America,
which accounts for 50% of global spend, followed by Europe and Asia
Pacific. Our goal is to create more geographical balance in our
business reflecting market size. Consequently, the Group will look
to increase its management and sales operations in the important
North American and Asia Pacific markets. We have increased our
global salesforce in the period by 18%.
Our medium term target is to increase the Americas mix of
revenues to 40%, with UK & Europe to 40% and Rest of the World
to 20%. In the first half, we have progressed against this target
significantly. Revenue from the Americas accounted for 35% (2016:
30%). This is good progress towards our stated medium term goal.
Revenue growth remains challenging in other parts of the world.
Improve operational effectiveness
Our business model is to create the content once and leverage
sales from that content across multiple formats (subscriptions,
reports and research engagements) and geographies. In doing so,
costs should remain relatively fixed thereby allowing for a higher
percentage of the sales value achieved to translate to profit.
Our medium term Adjusted EBITDA margin target remains circa 25%
(period ending 30 June 2017: 18.9%). In the period, our margin
reflects further investment in content and infrastructure, the
benefits of which are starting to come through in revenue
growth.
Providing best in class customer service
Outstanding customer service is a critical component in
delivering customer satisfaction and improved customer retention.
Our aim is to deliver best in class customer service at every point
of interaction with our clients.
We have performed a complete audit of our processes and systems
over the last three months. We now have a clear roadmap to focus
the business on delivery of service and have identified
efficiencies which we will pursue over the remainder of the
year.
Key Achievements
The key achievements in the period were:
-- Launch of GlobalData brand - The establishment of GlobalData
as a single brand is helping to simplify the product set; making
selling and marketing much more effective.
-- Healthcare proposition broadened by a further bolt-on
acquisition - During April 2017 we acquired a further bolt-on to
broaden our Healthcare proposition. We are currently integrating
the business and do not expect to see a material profit
contribution during 2017. The acquisition should be earnings
accretive in 2018 and thereafter.
The structure of the transaction required that the cash and
debtors at the date of acquisition remained with the vendor.
Consequently, the acquisition has had a negative impact on Group
cashflows in the first half and will continue to do so until the
latter quarter of the year. Further information on this acquisition
is set out in note 11 of the financial statements.
-- Development of new pricing strategy - We have developed a
clear plan to reform our pricing structure to reflect the single
brand and reducing the number of product price points. This will
simplify our offer and will facilitate an easier sales process.
-- Further progress in establishing a fixed cost base - We are
now reaching the position of having sufficient product to drive
future growth and have grown our fixed cost infrastructure. The
benefits of these investments will be realised over the medium
term.
-- Talent acquisition - During the period we have further
strengthened the management team and invested in our sales
headcount, especially in our overseas territories.
-- New banking facility - New committed banking facilities of
GBP75m plus a further GBP25m uncommitted optional facility
Our people
Our success in meeting the needs of our clients is dependent
upon the quality and professionalism of our people. The amount of
change the business needs to go through brings with it significant
challenges for all involved. The goal is clear but the achievement
is not easy. The Board would again like to express our sincere
appreciation for the hard work and commitment of all our
people.
Financial Review
1. Revenue
Revenues increased by 23% to GBP57.9m (2016: GBP47.1m), which
reflects good organic growth (20%).
The Group primarily derives its revenues from a number of key
industries and geographies. The benefit of this diverse revenue mix
is that the Group is not particularly exposed to one industry or
geography.
2. Adjusted EBITDA
Adjusted EBITDA increased by 17% to GBP11.0m (2016: GBP9.4m)
(organic growth of 15%). The impact of the recent acquisition has
resulted in a reduction in margin. We expect the acquisition to
broadly break even in 2017 and to be earnings accretive in 2018 and
beyond. Adjusting for the acquisition, our margins are broadly flat
compared to last year, the revenue growth being offset by
investments in platform and sales infrastructure.
3. Deferred Revenue
Deferred revenue increased by 35% to GBP51.3m at 30 June 2017
(2016: GBP37.9m), improving the visibility on future revenue
growth.
The majority of the Group's revenues (68%) are derived from
annualised contracts. Deferred revenue is a key performance
indicator for the Group, as growth is a good guide to current
trading, customer sentiment and significantly improves near to
medium term earnings visibility.
4. Cash Generation
Cash generated from continuing operations decreased by GBP1.2m
to GBP7.6m (2016: GBP8.8m). Excluding cash costs associated with
impaired contracts acquired as part of the Consumer acquisition of
GBP0.9m, other exceptional cash costs of GBP1.2m and working
capital outflow from the acquisition of GBP0.5m, cash from
operations would have increased to GBP10.5m, which equates to 93%
of Adjusted EBITDA.
The Group funds organic growth from its own resources.
5. Net Debt
Net Debt increased by GBP5.2m to GBP30.6m (31 December 2016:
GBP25.5m) principally due to the acquisition (GBP7.8million) and
GBP0.9m spent in the first half purchasing our own shares for the
purpose of satisfying the exercise of share options under the
Company's Employee Share Option Plan.
6. New banking facility
In April 2017, the Group refinanced its loan facilities, which
repaid existing indebtedness and increased debt capacity to support
the Group's acquisition strategy. The deal was led by our existing
bankers, The Royal Bank of Scotland and has new backing from HSBC
and Bank of Ireland. The committed finance of GBP75m, with a
further uncommitted option of GBP25m, demonstrates strong support
for our business, our model and our ambition to fund selective and
strategic acquisitions in the future.
7. Impact of Currency
We are a global business and as a result we incur revenue and
costs in currencies other than our reporting currency of sterling.
Circa 60% of our revenues are in currencies other than sterling.
Thus, adverse movements in exchange rates have an immediate impact
on our earnings.
The effect of exchange rate movements on our Adjusted EBITDA in
the period was an increase of GBP0.8m.
Dividend
The Group's policy is to pay a progressive dividend that
reflects the improved prospects for the Group and the cash
requirements of the business for the year ahead. The Board is
pleased to announce an interim dividend of 3.0 pence per share
(2016: 2.5 pence), with the anticipated total dividend for the year
being 7.7 pence per share (2016: 6.5 pence).
The interim dividend will be paid on 3 October 2017 to
shareholders on the register at the close of business on 31 August
2017.
Current trading and outlook
The first half results show strong growth in revenues and
deferred revenues. This gives us confidence that we will continue
to make progress through the remainder of the year and
thereafter.
Bernard Cragg
Executive Chairman
31 July 2017
Independent review report to the members of GlobalData Plc
Introduction
We have reviewed the condensed set of financial statements in
the half-yearly financial report of GlobalData Plc for the six
months ended 30 June 2017 which comprises the consolidated income
statement, the consolidated statement of comprehensive income, the
consolidated statement of financial position, the consolidated
statement of changes in equity and the consolidated statement of
cash flows. We have read the other information contained in the
half yearly financial report which comprises the Interim Statement
and considered whether it contains any apparent misstatements or
material inconsistencies with the information in the condensed set
of financial statements.
This report is made solely to the company's members, as a body,
in accordance with International Standard on Review Engagements (UK
and Ireland) 2410, 'Review of Interim Financial Information
performed by the Independent Auditor of the Entity'. Our review
work has been undertaken so that we might state to the company's
members those matters we are required to state to them in an
independent review report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility
to anyone other than the company and the company's members as a
body, for our review work, for this report, or for the conclusion
we have formed.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the directors.
As disclosed in note 1, the annual financial statements of the
Group are prepared in accordance with International Financial
Reporting Standards as adopted by the European Union. The condensed
set of financial statements included in this half-yearly financial
report has been prepared in accordance with International
Accounting Standard 34, 'Interim Financial Reporting', as adopted
by the European Union.
Our responsibility
Our responsibility is to express a conclusion on the condensed
set of financial statements in the half-yearly financial report
based on our review.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, 'Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity'. A review of interim financial information consists
of making enquiries, primarily of persons responsible for financial
and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing
(UK and Ireland) and consequently does not enable us to obtain
assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not
express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 30
June 2017 is not prepared, in all material respects, in accordance
with International Accounting Standard 34, 'Interim Financial
Reporting', as adopted by the European Union.
GRANT THORNTON UK LLP
AUDITOR
London
31 July 2017
Consolidated income statement
Notes 6 months 6 months Year
to 30 to 30 to 31
June June December
2017 2016 2016
Unaudited Unaudited Audited
Continuing operations GBP000s GBP000s GBP000s
Revenue 4 57,949 47,129 100,013
Cost of sales (37,940) (30,717) (65,781)
-------------------------------------- ------ ----------- ----------- ----------
Gross profit 20,009 16,412 34,232
Distribution costs (31) (29) (63)
Administrative costs (10,054) (8,145) (15,466)
Other expenses 5 (9,227) (9,083) (20,267)
-------------------------------------- ------ ----------- ----------- ----------
Operating profit/ (loss) 697 (845) (1,564)
Analysed as:
Adjusted EBITDA(1) 10,965 9,387 20,580
Items associated with acquisitions
and restructure of the Group 5 (1,323) (746) (1,761)
Other adjusting items 5 (1,799) (1,731) (5,105)
-------------------------------------- ------ ----------- ----------- ----------
EBITDA(2) 7,843 6,910 13,714
Amortisation (6,755) (7,318) (14,553)
Depreciation (391) (437) (725)
-------------------------------------- ------ ----------- ----------- ----------
Operating profit/ (loss) 697 (845) (1,564)
-------------------------------------- ------ ----------- ----------- ----------
Finance costs (689) (436) (955)
Profit/ (loss) before tax
from continuing operations 8 (1,281) (2,519)
Income tax (expense)/ credit (567) (1,242) 4,332
-------------------------------------- ------ ----------- ----------- ----------
(Loss)/ profit for the period
from continuing operations (559) (2,523) 1,813
Loss for the period from
discontinued operations 12 - (516) (717)
-------------------------------------- ------ ----------- ----------- ----------
(Loss)/ profit for the period (559) (3,039) 1,096
-------------------------------------- ------ ----------- ----------- ----------
(Loss)/ earnings per share
attributable to equity holders
from continuing operations: 6
Basic (loss)/ earnings per
share (pence) (0.55) (2.55) 1.80
Diluted (loss)/ earnings
per share (pence) (0.55) (2.55) 1.65
Loss per share attributable
to equity holders from discontinued
operations:
Basic loss per share (pence) - (0.52) (0.71)
Diluted loss per share (pence) - (0.52) (0.71)
Total basic (loss)/ earnings
per share (pence) (0.55) (3.07) 1.09
Total diluted (loss)/ earnings
per share (pence) (0.55) (3.07) 1.00
-------------------------------------- ------ ----------- ----------- ----------
The accompanying notes form an integral part of this financial
report.
(1) We define Adjusted EBITDA as EBITDA adjusted for costs
associated with acquisition, restructuring of the Group, share
based payments, impairment, non-trading exchange rate movements and
impact of foreign exchange contracts. We present Adjusted EBITDA as
additional information because we understand that it is a measure
used by certain investors. However, other companies may present
Adjusted EBITDA differently. EBITDA and Adjusted EBITDA are not
measures of financial performance under IFRS and should not be
considered as an alternative to operating profit or as a measure of
liquidity or an alternative to net income as indicators of our
operating performance or any other measure of performance derived
in accordance with IFRS.
(2) EBITDA is defined as earnings before interest, tax,
depreciation, amortisation and impairment.
Consolidated statement of comprehensive income
6 months 6 months Year to
to 30 to 30 31 December
June June 2016
2017 2016 Audited
Unaudited Unaudited
GBP000s GBP000s GBP000s
(Loss)/ profit for the period (559) (3,039) 1,096
Other comprehensive profit/
(loss)
Items that will be classified
subsequently to profit or loss:
Translation of foreign entities 44 (253) 108
---------------------------------- ----------- ----------- -------------
Other comprehensive profit/
(loss), net of tax 44 (253) 108
---------------------------------- ----------- ----------- -------------
Total comprehensive (loss)/
profit for the period (515) (3,292) 1,204
---------------------------------- ----------- ----------- -------------
The accompanying notes form an integral part of this financial
report.
Consolidated statement of financial position
Notes 30 June 30 June 31 December
2017 2016 2016
Unaudited Unaudited Audited
GBP000s GBP000s GBP000s
Non-current assets
Property, plant and
equipment 1,310 1,360 1,353
Intangible assets 7 138,492 136,337 133,506
Trade and other receivables 3,700 4,500 4,625
Deferred tax assets 4,253 3,018 4,137
------------------------------ ------ ----------- ----------- ------------
147,755 145,215 143,621
------------------------------ ------ ----------- ----------- ------------
Current assets
Inventories 2 186 -
Current tax receivable - - 639
Trade and other receivables 44,483 28,382 42,608
Short-term derivative
assets 8 258 - 94
Cash and cash equivalents 6,639 10,853 6,447
------------------------------ ------ ----------- ----------- ------------
51,382 39,421 49,788
------------------------------ ------ ----------- ----------- ------------
Total assets 199,137 184,636 193,409
------------------------------ ------ ----------- ----------- ------------
Current liabilities
Trade and other payables (68,890) (52,095) (64,775)
Short-term borrowings 9 (6,000) (5,492) (5,737)
Current tax payable (2,158) (892) -
Short-term derivative
liabilities 8 (229) (992) (1,089)
Short-term provisions (728) (1,456) (1,364)
------------------------------ ------ ----------- ----------- ------------
(78,005) (60,927) (72,965)
------------------------------ ------ ----------- ----------- ------------
Non-current liabilities
Long-term provisions (344) (1,009) (223)
Deferred tax liabilities (3,720) (6,553) (4,655)
Long-term borrowings 9 (31,280) (28,429) (26,162)
------------------------------ ------ ----------- ----------- ------------
(35,344) (35,991) (31,040)
------------------------------ ------ ----------- ----------- ------------
Total liabilities (113,349) (96,918) (104,005)
------------------------------ ------ ----------- ----------- ------------
Net assets 85,788 87,718 89,404
------------------------------ ------ ----------- ----------- ------------
Equity
Share capital 10 173 173 173
Share premium account 200 200 200
Other reserve (37,128) (37,128) (37,128)
Foreign currency translation
reserve (29) (434) (73)
Merger reserve 66,481 66,481 66,481
Treasury reserve (1,873) (408) (960)
Retained profit 57,964 58,834 60,711
------------------------------ ------ ----------- ----------- ------------
Total equity 85,788 87,718 89,404
------------------------------ ------ ----------- ----------- ------------
The accompanying notes form an integral part of this financial
report.
Consolidated statement of changes in equity (unaudited)
Share Share Other Foreign Special Merger Retained Total
capital premium reserve currency reserve reserve Treasury profit equity
account translation reserve
reserve
GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s
Balance at
1 January
2016 154 200 (37,128) (181) 48,422 - - 13,744 25,211
Loss for the
period - - - - - - - (3,039) (3,039)
Other
comprehensive
income:
Translation
of foreign
entities - - - (253) - - - - (253)
--------------- --------- --------- ---------- ------------ --------- --------- ---------- --------- --------
Total
comprehensive
loss for the
period - - - (253) - - - (3,039) (3,292)
--------------- --------- --------- ---------- ------------ --------- --------- ---------- --------- --------
Transactions
with owners:
Shares issued
for
GlobalData
acquisition 19 - - - - 66,481 - - 66,500
Share Buyback - - - - - - (408) - (408)
Special
Reserve
Transfer - - - - (48,422) - - 48,422 -
Dividend - - - - - - - (2,559) (2,559)
Share based
payments
charge - - - - - - - 1,158 1,158
Excess
deferred
tax on share
based
payments - - - - - - - 1,108 1,108
--------------- --------- --------- ---------- ------------ --------- --------- ---------- --------- --------
Balance at
30 June 2016 173 200 (37,128) (434) - 66,481 (408) 58,834 87,718
Profit for
the period - - - - - - - 4,135 4,135
Other
comprehensive
income:
Translation
of foreign
entities - - - 361 - - - - 361
--------------- --------- --------- ---------- ------------ --------- --------- ---------- --------- --------
Total
comprehensive
profit for
the period - - - 361 - - - 4,135 4,496
--------------- --------- --------- ---------- ------------ --------- --------- ---------- --------- --------
Transactions
with owners:
Share Buyback - - - - - - (552) - (552)
Dividend - - - - - - - (2,554) (2,554)
Share based
payments
charge - - - - - - - 1,607 1,607
Excess
deferred
tax on share
based
payments - - - - - - - (1,311) (1,311)
--------------- --------- --------- ---------- ------------ --------- --------- ---------- --------- --------
Balance at
31 December
2016 173 200 (37,128) (73) - 66,481 (960) 60,711 89,404
Loss for the
period - - - - - - - (559) (559)
Other
comprehensive
income:
Translation
of foreign
entities - - - 44 - - - - 44
--------------- --------- --------- ---------- ------------ --------- --------- ---------- --------- --------
Total
comprehensive
loss for the
period - - - 44 - - - (559) (515)
--------------- --------- --------- ---------- ------------ --------- --------- ---------- --------- --------
Transactions
with owners:
Share Buyback - - - - - - (913) - (913)
Dividend - - - - - - - (4,079) (4,079)
Share based
payments
charge - - - - - - - 1,891 1,891
Balance at
30 June 2017 173 200 (37,128) (29) - 66,481 (1,873) 57,964 85,788
--------------- --------- --------- ---------- ------------ --------- --------- ---------- --------- --------
The accompanying notes form an integral part of this financial
report.
Consolidated statement of cash flows
6 months 6 months Year to
to 30 June to 30 June 31 December
2017 2016 2016
Unaudited Unaudited Audited
Cash flows from operating GBP000s GBP000s GBP000s
activities
Continuing operations
(Loss)/ profit for the
period (559) (2,523) 1,813
Adjustments for:
Depreciation 391 437 725
Amortisation 6,755 7,318 14,553
Finance costs 689 436 955
Taxation recognised in
profit or loss 567 1,242 (4,332)
Loss on disposal of fixed
assets - - 48
Non-trading foreign exchange
(gain)/ loss (274) 927 1,571
Share based payments charge 1,891 1,158 2,764
(Increase)/ decrease in
trade and other receivables (1,875) 8,743 (7,936)
(Increase)/ decrease in
inventories (2) (109) 1
Increase/ (decrease) in
trade and other payables 1,547 (9,443) 5,121
Revaluation of short and
long-term derivatives (1,024) 767 770
Movement in provisions (515) (138) (1,016)
------------------------------------- ------------ ------------ -------------
Cash generated from continuing
operations 7,591 8,815 15,037
Interest paid (continuing
operations) (673) (496) (999)
Income taxes received/
(paid) (continuing operations) 1,206 (570) (1,562)
------------------------------------- ------------ ------------ -------------
Net cash from operating
activities (continuing
operations) 8,124 7,749 12,476
Net decrease in cash and
cash equivalents from discontinued
operations - (516) (604)
------------------------------------- ------------ ------------ -------------
Total cash flows from operating
activities 8,124 7,233 11,872
Cash flows from investing
activities (continuing
operations)
Acquisitions (7,811) (277) (2,878)
Purchase of property, plant
and equipment (348) (187) (578)
Purchase of intangible
assets (450) (154) (682)
------------------------------------- ------------ ------------ -------------
Total cash flows from investing
activities (8,609) (618) (4,138)
Cash flows from financing
activities (continuing
operations)
Repayment of short-term
borrowings (2,856) (2,659) (5,379)
Settlement of long-term (29,519) - -
borrowings
Proceeds from long-term 38,000 - -
borrowings
Acquisition of own shares (913) (408) (960)
Dividend paid (4,079) (2,559) (5,113)
------------------------------------- ------------ ------------ -------------
Total cash flows from financing
activities 633 (5,626) (11,452)
------------------------------------- ------------ ------------ -------------
Net increase/ (decrease)
in cash and cash equivalents 148 989 (3,718)
Cash and cash equivalents
at beginning of period 6,447 10,117 10,117
Effects of currency translation
on cash and cash equivalents 44 (253) 48
------------------------------------- ------------ ------------ -------------
Cash and cash equivalents
at end of period 6,639 10,853 6,447
------------------------------------- ------------ ------------ -------------
The accompanying notes form an integral part of this financial
report.
Notes to the interim financial statements
1. General information
Nature of operations
The principal activity of GlobalData Plc and its subsidiaries
(together 'the Group') is to provide unique, high quality business
information and services across multiple platforms to enable
organisations in the Consumer, ICT and Healthcare markets to gain
competitive advantage.
GlobalData Plc ('the Company') is a company incorporated in the
United Kingdom and listed on the Alternative Investment Market
(AIM). The registered office of the Company is John Carpenter
House, John Carpenter Street, London, EC4Y 0AN. The registered
number of the Company is 03925319.
Basis of preparation
These interim financial statements are for the six months ended
30 June 2017. They have been prepared in accordance with IAS 34,
Interim Financial Reporting as adopted in the European Union. They
do not include all of the information required for full annual
financial statements, and should be read in conjunction with
GlobalData Plc's audited financial statements for the year ended 31
December 2016.
The financial information for the year ended 31 December 2016
set out in this interim report does not constitute statutory
accounts as defined in Section 434 of the Companies Act 2006. The
Group's statutory financial statements for the year ended 31
December 2016 have been filed with the Registrar of Companies and
can be found on the Group's website www.globaldata.com. The
auditor's report on those financial statements was unqualified and
did not contain statements under Section 498(2) or Section 498(3)
of the Companies Act 2006.
These interim financial statements have been prepared under the
historical cost convention as modified by the revaluation of
derivative financial instruments.
The interim financial statements are presented in Pounds
Sterling (GBP), which is also the functional currency of the
Company. These interim financial statements have been approved for
issue by the Board of Directors.
Critical accounting estimates and judgements
The Group makes estimates and assumptions regarding the future.
Estimates and judgements are continually evaluated based on
historical experience and other factors, including expectations of
future events that are believed to be reasonable under the
circumstances.
In the future, actual experience may deviate from these
estimates and assumptions. The estimates and assumptions that have
a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial period
relate to valuation of acquired intangible assets, provisions for
share based payments, provisions for bad debt, deferred tax assets
and the carrying value of goodwill and other intangibles.
Going concern
The Group has closing cash of GBP6.6 million as at 30 June 2017
and net debt of GBP30.6 million (30 June 2016: net debt of GBP23.1
million), being cash and cash equivalents less short and long-term
borrowings. The Group has outstanding loans of GBP37.3 million
which are syndicated with The Royal Bank of Scotland, HSBC, and
Bank of Ireland.
The Group considers the current cash balance, cash flow
projections and the existing financing facilities to be adequate to
meet short-term commitments. The Directors have a reasonable
expectation that there are no material uncertainties that cast
significant doubt about the Group's ability to continue as a going
concern. Accordingly, the Directors have prepared the interim
financial statements on a going concern basis.
IFRS 15
The new IFRS standard covering Revenue from Contracts with
Customers, IFRS 15, becomes effective on 1 January 2018. The
standard establishes a principles based approach for revenue
recognition and is based on the concept of recognising revenue for
obligations only when they are satisfied and the control of goods
or services is transferred. Management have reviewed the potential
impact of the standard on the Group's revenues in 2017 and have
concluded that the impact is immaterial and therefore do not expect
any restatement of reporting comparatives once the standard becomes
effective.
Notes to the interim financial statements (continued)
2. Accounting policies
This interim report has been prepared based on the accounting
policies detailed in the Group's financial statements for the year
ended 31 December 2016. All policies have been consistently
applied.
3. Taxation
Income tax on the profit or loss for the year comprises current
and deferred tax.
Current tax is the expected tax payable on the taxable income
for the period, using rates substantively enacted at the reporting
date, and any adjustments to the tax payable in respect of previous
years.
Deferred taxation is provided in full on temporary differences
between the carrying amount of the assets and liabilities in the
financial statements and the tax base. Deferred tax assets are
recognised only to the extent that it is probable that future
taxable profits will be available against which the temporary
difference can be utilised. Deferred tax is determined using the
tax rates that have been enacted or substantially enacted by the
reporting date, and are expected to apply when the deferred tax
liability is settled or the deferred tax asset is realised.
Tax is recognised in the income statement for interim reporting
purposes based upon an estimate of the likely effective tax rate
for the year.
4. Segment analysis
The principal activity of GlobalData Plc and its subsidiaries
(together 'the Group') is to provide unique, high quality business
information and services across multiple platforms to enable
organisations in the Consumer, ICT and Healthcare markets to gain
competitive advantage.
IFRS 8 "Operating Segments" requires the segment information
presented in the financial statements to be that which is used
internally by the chief operating decision maker to evaluate the
performance of the business and to decide how to allocate
resources. The Group has identified the Executive Directors as its
chief operating decision maker.
Business information is provided to customers through multiple
channels by a dedicated content team that is centrally managed by
Research Directors who report directly to the Executive Directors.
Business information is therefore considered to be the operating
segment of the Group.
The Group profit or loss is reported to the Executive Directors
on a monthly basis and consists of earnings before interest, tax,
depreciation, amortisation, central overheads and other adjusting
items. The Executive Directors also monitor revenue within the
operating segment.
Notes to the interim financial statements (continued)
4. Segment analysis (continued)
A reconciliation of Adjusted EBITDA to profit/ (loss) before tax
from continuing operations is set out below:
6 months 6 months Year to
to 30 to 30 June 31 December
June 2016 2016
2017 Unaudited Audited
Unaudited GBP000s GBP000s
GBP000s
Business Information 57,949 47,129 100,013
Total Revenue 57,949 47,129 100,013
Business Information Adjusted
EBITDA 10,965 9,387 20,580
Other expenses (see note
5) (9,227) (9,083) (20,267)
Depreciation (391) (437) (725)
Amortisation (excluding amortisation
of acquired intangible assets) (650) (712) (1,152)
Finance costs (689) (436) (955)
Profit/ (loss) before tax
from continuing operations 8 (1,281) (2,519)
-------------------------------------- ----------- ------------ -------------
Geographical analysis
From continuing operations
6 months to 30 June 2017 Rest of World
UK Europe Americas Total
GBP000s GBP000s GBP000s GBP000s GBP000s
Revenue from external customers 13,445 13,601 20,552 10,351 57,949
--------------------------------- -------- -------- ----------- -------------- --------
6 months to 30 June 2016 Rest of World
UK Europe Americas Total
GBP000s GBP000s GBP000s GBP000s GBP000s
Revenue from external customers 12,825 13,866 14,214 6,224 47,129
--------------------------------- -------- -------- ----------- -------------- --------
12 months to 31 December 2016 Rest of World
UK Europe Americas Total
GBP000s GBP000s GBP000s GBP000s GBP000s
Revenue from external customers 16,073 23,081 38,049 22,810 100,013
--------------------------------- -------- -------- ----------- -------------- --------
During the current period management have revised the
methodology used for determining the allocation of geographical
revenues. Comparative figures have been updated to reflect the new
methodology
Notes to the interim financial statements (continued)
5. Other expenses
6 months 6 months Year to
to to 31 December
30 June 2017 30 June 2016
Unaudited 2016 Audited
Unaudited
GBP000s GBP000s GBP000s
Restructuring costs(1) 1,033 485 1,289
Deal costs 106 - -
M&A costs 184 261 472
------------------------------------- -------- ------------ --------------
Items associated with
acquisitions and restructure
of the Group 1,323 746 1,761
Share based payment charge 1,891 1,158 2,764
Revaluation of short
and long-term derivatives (1,023) 767 770
Non-trading foreign exchange
loss/ (gain) 931 (194) 1,571
Amortisation of acquired
intangibles 6,105 6,606 13,401
Total other expenses 9,227 9,083 20,267
------------------------------------- -------- ------------ --------------
(1) Restructuring costs consist of redundancy costs as well as
other costs in relation to restructuring the business.
Notes to the interim financial statements (continued)
6. Earnings per share
The calculation of the basic earnings per share is based on the
earnings attributable to ordinary shareholders of the parent
company divided by the weighted average number of shares in issue
during the period. The Group also has a share options scheme in
place and therefore the Group has calculated the dilutive effect of
these options. The below table shows earnings per share for both
continuing and discontinued operations:
6 months
to
30 June
2017
Unaudited
6 months
to Year to
30 June 31 December
2016 2016
Unaudited Audited
Continuing operations
Basic
(Loss)/ profit for the period
attributable to ordinary shareholders
of the parent company (GBP000s) (559) (2,523) 1,813
Weighted average number of
shares (000s) 102,346 98,888 100,632
Basic (loss)/ earnings per
share (pence) (0.55) (2.55) 1.80
Diluted
(Loss)/ profit for the period
attributable to ordinary shareholders
of the parent company (GBP000s) (559) (2,523) 1,813
Weighted average number of
shares (000s) * 102,346 98,888 110,082
Diluted (loss)/ earnings per
share (pence) (0.55) (2.55) 1.65
Discontinued operations
Basic
Loss for the period attributable
to ordinary shareholders of
the parent company (GBP000s) - (516) (717)
Weighted average number of
shares (000s) 102,346 98,888 100,632
Basic loss per share (pence) - (0.52) (0.71)
Diluted
Loss for the period attributable
to ordinary shareholders of
the parent company (GBP000s) - (516) (717)
Weighted average number of
shares (000s) * 102,346 98,888 100,632
Diluted loss per share (pence) - (0.52) (0.71)
---------------------------------------- ------------ ----------- -------------
Total
Basic
(Loss)/ profit for the period
attributable to ordinary shareholders
of the parent company (GBP000s) (559) (3,039) 1,096
Weighted average number of
shares (000s) 102,346 98,888 100,632
Basic (loss)/ earnings per
share (pence) (0.55) (3.07) 1.09
Diluted
(Loss)/ profit for the period
attributable to ordinary shareholders
of the parent company (GBP000s) (559) (3,039) 1,096
Weighted average number of
shares (000s) * 102,346 98,888 110,082
Diluted (loss)/ earnings per
share (pence) (0.55) (3.07) 1.00
---------------------------------------- ------------ ----------- -------------
Notes to the interim financial statements (continued)
6. Earnings per share (continued)
Reconciliation of basic weighted average number of shares to the
diluted weighted average number of shares:
6 months
to
30 June
2017
Unaudited
No'000s
6 months
to Year to
30 June 31 December
2016 2016
Unaudited Audited
No'000s No'000s
Basic weighted average number
of shares 102,346 98,888 100,632
Share options in issue at
end of period 9,661 9,997 9,450
------------------------------- ------------ ----------- -------------
Diluted weighted average
number of shares 112,007 108,885 110,082
------------------------------- ------------ ----------- -------------
* The share options in issue are anti-dilutive in respect of the
diluted loss per share calculation in 2017 and 2016, therefore the
options have not been included in the calculation, other than in
respect of the continuing and total earnings per share for the year
ended 31 December 2016.
7. Intangible assets
Software Customer Brands IP rights Goodwill Total
relationships
GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s
Cost
As at 31 December
2016 7,577 25,575 10,695 22,529 111,455 177,831
Additions:
Business combinations 50 2,029 429 2,803 5,985 11,296
Additions:
Separately
acquired 302 - 148 - - 450
Foreign currency
retranslation (17) - - - - (17)
As at 30 June
2017 7,912 27,604 11,272 25,332 117,440 189,560
------------------------ --------- --------------- -------- ---------- --------- ---------
Amortisation
As at 31 December
2016 (5,716) (13,559) (2,597) (13,093) (9,360) (44,325)
Charge for
the year (566) (1,512) (482) (4,195) - (6,755)
Foreign currency
retranslation 12 - - - 12
As at 30 June
2017 (6,270) (15,071) (3,079) (17,288) (9,360) (51,068)
------------------------ --------- --------------- -------- ---------- --------- ---------
Net book value
As at 30 June
2017 1,642 12,533 8,193 8,044 108,080 138,492
As at 31 December
2016 1,861 12,016 8,098 9,436 102,095 133,506
------------------------ --------- --------------- -------- ---------- --------- ---------
Notes to the interim financial statements (continued)
8. Derivative assets and liabilities
30 June 30 June 31 December
2017 2016 2016
Unaudited Unaudited Audited
No'000s No'000s No'000s
Short-term derivative
assets 258 - 94
Short-term derivative
liabilities (229) (992) (1,089)
Net derivative asset/
(liability) 29 (992) (995)
----------------------- ------------ ------------ --------------
Classification is based on when the derivatives mature. The fair
values of derivatives are expected to impact the income statement
over the next year, dependant on movements in the fair value of the
foreign exchange contracts. The movement in the year was a
GBP1,023,000 credit to the income statement (2016: charge of
GBP767,000).
The Group uses derivative financial instruments to reduce its
exposure to fluctuations in foreign currency exchange rates. The
notional values of contract amounts outstanding are:
Euro US Dollar Indian
Expiring in the period ending: EUR'000 $'000 Rupee
INR'000
30 June 2018 5,650 12,250 430,192
---------------------------------- --------- ---------- ---------
Fair value of financial instruments
Financial instruments are either carried at amortised cost, less
any provision for impairment, or fair value.
The Group uses the following hierarchy for determining and
disclosing the fair value of financial instruments by valuation
technique:
-- Level 1: quoted (unadjusted) prices in active markets for
identical assets or liabilities;
-- Level 2: other techniques for which all inputs which have a
significant effect on the recorded fair value are observable,
either directly or indirectly; and
-- Level 3: techniques which use inputs which have a significant
effect on the recorded fair value that are not based on observable
market data.
As at 30 June 2017, the only financial instruments measured at
fair value were derivative financial assets and liabilities which
are classified as Level 2.
Notes to the interim financial statements (continued)
9. Borrowings
30 June 30 June 31 December
2017 2016 2016
Current Unaudited Unaudited Audited
GBP000s GBP000s GBP000s
Loans due within one year 6,000 5,492 5,737
--------------------------- ----------- ----------- ------------
30 June 30 June 31 December
2017 2016 2016
Non-current Unaudited Unaudited Audited
GBP000s GBP000s GBP000s
Long-term loans 31,280 28,429 26,162
----------------- ----------- ----------- ------------
Term loan and RCF
In April 2017, the Group refinanced its debt position. The new
facility consists of a GBP30.0 million term loan to replace the
previous facilities held with The Royal Bank of Scotland. This is
repayable in quarterly instalments over 5 years, with total
repayments due in the next 12 months of GBP6.0 million. The
outstanding balance as at 30 June 2017 was GBP30.0 million.
In addition to the term loan, the Group also has a revolving
capital facility (RCF) of GBP45.0 million, with an additional
accordion facility available of GBP25.0 million, providing
significant additional funding capability for future investment. As
at 30 June 2017, the Group had a total draw down against the RCF
facilities of GBP8.0 million.
The new facilities have been provided by The Royal Bank of
Scotland, HSBC and Bank of Ireland.
Interest is charged on the term loan and drawn down RCF at a
rate of 2.25% over the London Interbank Offered Rate.
Borrowings can be reconciled as follows:
30 June 30 June 31 December
2017 2016 2016
Unaudited Unaudited Audited
GBP000s GBP000s GBP000s
Term loan 30,000 17,849 15,776
Revolving capital facility 8,000 16,375 16,375
Capitalised fees, net of amortised
amount (720) (303) (252)
------------------------------------ ----------- ----------- ------------
37,280 33,921 31,899
------------------------------------ ----------- ----------- ------------
Notes to the interim financial statements (continued)
10. Equity
Share capital
Allotted, called up
and fully paid:
30 June 2017 30 June 2016 31 December
Unaudited Unaudited 2016
Audited
No'000s GBP000s No'000s GBP000s No'000s GBP000s
Ordinary shares at
1 January (1/14(th)
pence) 102,346 73 76,268 54 76,268 54
Issue of shares: Consideration
GlobalData - - 26,078 19 26,078 19
Shares Buyback - - - - - -
-------------------------------- -------- -------- -------- -------- -------- --------
Ordinary shares c/f
(1/14(th) pence) 102,346 73 102,346 73 102,346 73
-------------------------------- -------- -------- -------- -------- -------- --------
Deferred shares of
GBP1.00 each 100 100 100 100 100 100
------------------------- -------- ---- -------- ---- -------- ----
Total allotted, called
up and fully paid 102,446 173 102,446 173 102,446 173
------------------------- -------- ---- -------- ---- -------- ----
The issue of shares in the prior year related to the acquisition
of GlobalData Holding Limited.
Share Buyback
During the period the Group purchased an aggregate amount of
180,000 shares at a total market value of GBP913,000. The purchased
shares will be held in treasury for the purpose of satisfying the
exercise of share options under the Company's Employee Share Option
Plan.
Capital management
The Group's capital management objectives are:
-- To ensure the Group's ability to continue as a going concern
-- To fund future growth and provide an adequate return to
shareholders and, when appropriate, distribute dividends
The capital structure of the Group consists of net debt, which
includes borrowings and cash and cash equivalents, and equity.
The Company has two classes of shares:
-- Ordinary shares carry no right to fixed income and each share
carries the right to one vote at general meetings of the
Company
-- Deferred shares do not confer upon the holders the right to
receive any dividend, distribution or other participation in the
profits of the Company. The deferred shares do not entitle the
holders to receive notice of or to attend and speak or vote at any
general meeting of the Company. On distribution of assets on
liquidation or otherwise, the surplus assets of the Company
remaining after payments of its liabilities shall be applied first
in repaying to holders of the deferred shares the nominal amounts
and any premiums paid up or credited as paid up on such shares, and
second the balance of such assets shall belong to and be
distributed among the holders of the ordinary shares in proportion
to the nominal amounts paid up on the ordinary shares held by them
respectively.
There are no specific restrictions on the size of a holding nor
on the transfer of shares, which are both governed by the general
provisions of the Articles of Association and prevailing
legislation. The Directors are not aware of any agreements between
holders of the Company's shares that may result in restrictions on
the transfer of securities or on voting rights.
No person has any special rights of control over the Company's
share capital and all its issued shares are fully paid.
Notes to the interim financial statements (continued)
10. Equity (continued)
With regard to the appointment and replacement of Directors, the
Company is governed by its Articles of Association, the principles
of the UK Corporate Governance Code, the Companies Act and related
legislation. The Articles themselves may be amended by special
resolution of the shareholders. The powers of Directors are
described in the Board Terms of Reference, copies of which are
available on request.
Dividends
The Company is one that is focused on the efficient management
of working capital and increased cash generation. The Board
therefore believes it can invest in the business, achieve growth in
profits and service a progressive dividend policy.
The final dividend for 2016 was 4.0p per share and was paid in
May 2017. The Board anticipates a total dividend for the current
year of 7.7 pence per share, with an interim dividend of 3.0 pence
per share. The interim dividend will paid on 8 September 2017 to
shareholders on the register at the close of business on 11 August
2017.
Other reserve
The other reserve consists of a reserve created upon the reverse
acquisition of the TMN Group Plc.
Foreign currency translation reserve
The foreign currency translation reserve contains the
translation differences that arise upon translating the results of
subsidiaries with a functional currency other than Sterling. Such
exchange differences are recognised in the income statement in the
period in which a foreign operation is disposed of.
Special reserve
The special reserve was created upon the capital reduction which
occurred during 2013.
In order to facilitate the payment of dividends, the special
reserve, constituted by an undertaking to the Court given in
connection with the reduction of the Company's share premium
account undertaken in May 2013 (the "Special Reserve"), has been
released in accordance with its terms pursuant to a resolution of
the Board dated 23 February 2016 (all relevant creditors having
been discharged or otherwise consented to the reduction).
Merger reserve
The merger reserve was created to account for the premium on the
shares issued in consideration for the purchase of GlobalData
Holdings Limited in 2016.
Treasury reserve
The treasury reserve contains shares held in treasury by the
Group and in the Group's Employee Benefit Trust for the purpose of
satisfying the exercise of share options under the Company's
Employee Share Option Plan.
Notes to the interim financial statements (continued)
10. Equity (continued)
Share based payments
The Group created a share option scheme during the year ended 31
December 2010 and granted the first options under the scheme on 1
January 2011 to certain senior employees. Each option granted
converts to one ordinary share on exercise. A participant may
exercise their options (subject to employment conditions) at any
time during a prescribed period from the vesting date to the date
the option lapses. For these options to be exercised the Group's
earnings before interest, taxation, depreciation and amortisation,
as adjusted by the Remuneration Committee for significant or
one-off occurrences, must exceed certain targets. The fair values
of options granted were determined using the Black-Scholes model.
The inputs used in the model were:
-- share price at date of grant
-- exercise price
-- time to maturity
-- annual risk-free interest rate and;
-- annualised volatility
The following assumptions were used in the valuation:
Award Grant Date Fair Value Estimated Weighted
Tranche of Share Exercise Forfeiture Average
Price Price rate p.a. of Remaining
at Grant (Pence) Contractual
Date Life
---------- -------------- ------------ ----------- ------------ --------------
Award 1 January
1 2011 GBP1.09 0.0714p 15% 2.5
Award
3 1 May 2012 GBP1.87 0.0714p 15% 2.5
Award 7 March
4 2014 GBP2.55 0.0714p 15% 2.5
Award 22 September
6 2014 GBP2.525 0.0714p 0% 2.5
Award 9 December
7 2014 GBP2.075 0.0714p 15% 2.7
Award 31 December
8 2014 GBP2.025 0.0714p 15% 2.7
Award 21 April
9 2015 GBP2.040 0.0714p 15% 2.7
Award 28 September
10 2015 GBP2.490 0.0714p 15% 3.5
Award 17 March
11 2016 GBP2.064 0.0714p 0% 2.8
Award 17 March
12 2016 GBP2.064 0.0714p 15% 2.8
Award 21 October
13 2016 GBP4.425 0.0714p 15% 2.8
Award 21 March
14 2017 GBP5.465 0.0714p 15% 2.8
Award 21 March
15 2017 GBP5.465 0.0714p 15% 3.0
Award 21 March
16 2017 GBP5.465 0.0714p 15% 2.5
Awards 2 and 5 have been fully forfeited.
The estimated forfeiture rate assumption is based upon
management's expectation of the number of options that will lapse
over the vesting period. The assumptions were determined when the
scheme was set up in 2011 and are reviewed annually. Management
believe the current assumptions to be reasonable based upon the
rate of lapsed options.
The risk free interest rate and annualised volatility for awards
granted in 2017 were 1.2% and 42% respectively.
Each of the awards are subject to vesting criteria set by the
Remuneration Committee.
Notes to the interim financial statements (continued)
10. Equity (continued)
The vesting criteria are as follows:
Vesting Criteria
Group Achieves Group Achieves Group Achieves
GBP10m EBITDA GBP26.7m EBITDA GBP35m EBITDA
------ --------------- ----------------- ---------------
Award 20% Vest 40% Vest 40% Vest
1-4
Award
6 N/a 50% Vest 50% Vest
Award
7 N/a 40% Vest 60% Vest
Award
8 N/a 50% Vest 50% Vest
Award
9 N/a 40% Vest 60% Vest
Award
10 N/a N/a 100% Vest
Award
12 N/a 35% Vest 65% Vest
Award
13 N/a 35% Vest 65% Vest
Award
14 N/a 35% Vest 65% Vest
Award
15 N/a 25% Vest 75% Vest
Award
16 N/a 50% Vest 50% Vest
Award 11 relates to options awarded to Executive Chairman,
Bernard Cragg during 2016. The options will vest on 31 January 2019
and 31 January 2021 in equal tranches.
The total charge recognised for the scheme during the six months
to 30 June 2017 was GBP1,891,000 (2016: GBP1,158,000). The awards
of the scheme are settled with ordinary shares of the Company.
During the period the Group purchased an aggregate amount of
180,000 shares at a total market value of GBP913,000. The purchased
shares will be held in treasury and in the Group's Employee Benefit
Trust for the purpose of satisfying the exercise of share options
under the Company's Employee Share Option Plan.
Reconciliation of movement in the number of options is provided
below.
Option price Number
(pence) of
options
31 December 2016 1/14th 9,450,183
Granted 1/14th 955,160
Forfeited 1/14th (744,486)
------------------ -------------- ----------
30 June 2017 1/14th 9,660,857
------------------ -------------- ----------
The following table summarises the Group's share options
outstanding at 30 June 2017:
Options Option price Remaining
Reporting date outstanding (pence) life (years)
31 December 2011 5,004,300 1/14th 3.7
31 December 2012 4,931,150 1/14th 4.3
31 December 2013 4,775,050 1/14th 3.3
31 December 2014 8,358,880 1/14th 2.5
31 December 2015 7,557,840 1/14th 2.5
31 December 2016 9,450,183 1/14th 3.2
30 June 2017 9,660,857 1/14th 2.7
------------------ ------------- ------------- --------------
Notes to the interim financial statements (continued)
11. Acquisition
Infinata
On 7th April 2017, the Group acquired the trade and assets of
the Infinata brand from The MergerMarket Group for a purchase price
of US$9.6 million.
The amounts recognised for each class of assets and liabilities
at the acquisition date were as follows:
Carrying Fair
Value Value Fair
Adjustments Value
GBP000s GBP000s GBP000s
Intangible assets consisting
of:
Brand - 429 429
Customer relationships - 2,029 2,029
Intellectual Property and
Content - 2,803 2,803
Net liabilities acquired
consisting of:
Deferred revenue (2,747) - (2,747)
Fair value of net assets
acquired (2,747) 5,261 2,514
--------------------------------------- --------- ------------- --------
The goodwill recognised in relation to the acquisition is as
follows:
Fair Value
GBP000s
Consideration 7,696
Less net assets acquired (2,514)
----------------------------- --------
Goodwill 5,182
----------------------------- --------
In line with the provisions of IFRS 3, further fair value
adjustments may be required within the 12 month period from the
date of acquisition. Any fair value adjustments will result in an
adjustment to the goodwill balance reported above.
In the year ended 31 December 2016 the Infinata trade generated
revenues of $8.0 million and profits before tax of $1.0 million.
The business has generated revenues of GBP1.4 million and Adjusted
EBITDA of GBP0.2 million in the period from acquisition to 30 June
2017. If the acquisition had occurred on 1 January 2017, the Group
year to date revenue for 2017 would have been GBP59.2 million and
the Group loss before tax from continuing operations would have
been GBP0.2 million.
The goodwill that arose on the combination can be attributed to
the assembled workforce, know-how and expertise.
The Group incurred legal and professional costs of GBP0.2m in
relation to the acquisition, which were recognised in other
expenses.
Notes to the interim financial statements (continued)
12. Discontinued operations
As the business becomes more focused on its Business Information
offering, a number of legacy non-core business units have been
discontinued in recent years.
a) The results of the discontinued operation are as follows;
6 months 6 months Year
to 30 to 30 to 31
June June December
2017 2016 2016
Unaudited Unaudited Audited
GBP000s GBP000s GBP000s
Discontinued operations
Revenue - 8 8
Cost of sales - (27) (73)
---------------------------------------- ----------- ----------- ----------
Gross loss - (19) (65)
Administrative costs - (609) (652)
Loss before tax from discontinued
operations - (628) (717)
Income tax credit - 112 -
--------------------------------------- ------------ ----------- ----------
Loss for the period from discontinued
operations - (516) (717)
---------------------------------------- ----------- ----------- ----------
b) Loss before tax
6 months 6 months Year
to 30 to 30 to 31
June June December
2017 2016 2016
Unaudited Unaudited Audited
This is arrived at after GBP000s GBP000s GBP000s
charging:
Amortisation - - -
Impairment - - -
------------------------- ----------- ----------- ----------
c) Cash flows from discontinued operations
6 months 6 months Year
to 30 to 30 to 31
June June December
2017 2016 2016
Unaudited Unaudited Audited
GBP000s GBP000s GBP000s
Cash outflows from operating
activities - (516) (604)
---------------------------------------- ----------- ----------- ----------
Total cash outflows from discontinued
operations - (516) (604)
---------------------------------------- ----------- ----------- ----------
Notes to the interim financial statements (continued)
13. Related party transactions
Mike Danson, GlobalData's Chief Executive, owned 69.7% of the
Company's ordinary shares as at 31 July 2017. Mike Danson owns a
number of businesses that interact with GlobalData Plc. The
principal transactions are as follows:
Accommodation
GlobalData rents two properties from Estel Property Investments,
a company owned by Mike Danson. The total rental expense in
relation to the buildings owned by Estel Property Investments for
the 6 months to 30 June 2017 was GBP1,031,000 (2016:
GBP1,030,000).
Corporate support services
Corporate support services are provided to and from other
companies owned by Mike Danson, principally finance, human
resources, IT and facilities management. These are recharged to
companies that consume these services based on specific drivers of
costs, such as proportional occupancy of buildings for facilities
management, headcount for human resources services, revenue or
gross profit for finance services and headcount for IT services.
The recharge made from GlobalData Plc to these companies for the 6
months to 30 June 2017 was GBP437,302 (2016: GBP618,700).
Loan to Progressive Trade Media Limited
As part of a disposal of non-core B2B print businesses during
2016, the Group agreed to issue a loan to Progressive Trade Media
to fund the purchase consideration. This loan was for GBP4.5m and
is repayable in 5 instalments, with the first instalment due in
January 2018. Interest of 2.25% above LIBOR is charged on the loan,
with GBP52,000 charged in the period to 30 June 2017.
Amounts outstanding
The Group has taken advantage of the exemptions contained within
IAS 24 - Related Party Disclosures from the requirement to disclose
transactions between Group companies as these have been eliminated
on consolidation. The amounts outstanding for other related parties
were:
Loan Balances
Amounts due in greater than one year:
30 June 30 June 31 December
2017 2016 2016
Unaudited Unaudited Audited
GBP000s GBP000s GBP000s
Progressive Trade Media Limited 3,700 4,500 4,625
3,700 4,500 4,625
--------------------------------- ----------- ----------- ------------
Amounts due within one year:
30 June 30 June 31 December
2017 2016 2016
Unaudited Unaudited Audited
GBP000s GBP000s GBP000s
Progressive Trade Media Limited 925 - -
925 - -
-------------------------------- ----------- ----------- ------------
The Group has right of set off over trading balances held with
companies related by virtue of common ownership by Mike Danson. As
at 30 June 2017, the balance with these parties was GBPnil (30 June
2016: GBP6,000 payable, 31 December 2016: GBP16,000
receivable).
Advisers
Company Secretary
Graham Lilley
Head Office and Registered Office
John Carpenter House
John Carpenter Street
London
EC4Y 0AN
Tel: + 44 (0) 20 7936 6400
Nominated Adviser and Broker
Nplus1 Singer Advisory LLP
1 Bartholomew Lane
London
EC2N 2AX
Auditor
Grant Thornton UK LLP
Grant Thornton House
Melton Street
London
NW1 2EP
Registrars
Capita Registrars Limited
Northern House
Woodsome Park
Fenay Bridge
Huddersfield
West Yorkshire
HD8 0GA
Solicitors
Fieldfisher LLP
Riverbank House
2 Swan Lane
London
EC4R 3TT
United Kingdom
Bankers
The Royal Bank of Scotland Plc
280 Bishopsgate
London
EC2M 4RB
Registered number
Company No. 03925319
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR WGUPUMUPMGMU
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July 31, 2017 02:00 ET (06:00 GMT)
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