TIDMDATA
RNS Number : 3421U
GlobalData PLC
01 August 2022
1 August 2022
GlobalData Plc
Half Year Results
30 June 2022
Executing the Strategy : 10% underlying (1) revenue growth,
continued margin expansion and strong contribution from
M&A.
Resilient, Cash-backed Growth : Increased subscription revenues,
with stable cost base and high cash generation.
GlobalData Plc (AIM: DATA, GlobalData, the Group), the leading
provider of industry intelligence, today publishes its results for
the half year ended 30 June 2022.
Highlights
Financial results for the six months ended 30 June 2022 (HY
2022).
GBPm HY 2022 HY 2021 Change Underlying Growth
(1)
% %
Revenue GBP111.9m GBP91.1m +23% +10%
Operating profit GBP24.1m GBP18.3m +32%
Adj. EBITDA (2) GBP39.0m GBP30.7m +27%
Adj. EBITDA margin 35% 34% +1p.p.
Statutory PBT GBP15.0m GBP16.0m -6%
EPS 9.4p 9.7p -3%
Adj. EPS (3) 20.7p 16.3p +27%
Invoiced Forward Revenue
(4) GBP114.6m GBP83.8m +37% +13%
Net debt (5) GBP190.5m GBP47.1m +304%
------------------------- --------- -------- ------ -----------------
Financial Highlights
-- Strong H1 revenue performance, up 23% with underlying (1)
revenue growth accelerating to 10% and subscription revenue growth
of 21%, which makes up 83% of Group revenues.
-- Adjusted EBITDA grew by 27% to GBP39.0m (HY 2021: GBP30.7m),
improving margin by a further 1 percentage point to 35% (HY 2021:
34%), illustrating the operational leverage of the business and now
in line with our previously stated ambition of 35-40% Adjusted
EBITDA margin. Statutory operating profit grew by 32% to
GBP24.1m.
-- Invoiced Forward Revenue(4) at the end of H1 grew by 37% year
on year to GBP114.6m (H1 2021: GBP83.8m), which reflected
underlying growth of 13% and provides strong visibility for the
second half.
-- Highly cash generative business model with free cash flow (6)
of GBP45.7m (H1 2021: GBP34.7m). Cash flow from operations
increased by 38% to GBP56.1m (H1 2021: GBP40.8m), which represents
operating cash conversion of 144% on an Adjusted EBITDA basis (H1
2021: 133%).
-- EPS dropped marginally to 9.4p, reflecting increased finance
costs, inclusive of a non-cash interest charge of GBP4.0m, and
increased amortisation of acquired intangible assets. On an
adjusted basis, EPS grew by 27%.
-- Interim dividend increase of 26% to 7.7 pence per ordinary
share (H1 2021: 6.1 pence), broadly in line with growth of Adjusted
EBITDA.
Operational Highlights
-- Accelerating underlying growth to 10% by further embedding
value to our expanding blue-chip client base .
Through our strategic growth initiatives and product innovation,
we have been able to deliver greater value to our clients.
Investment in the quality of the platform has translated directly
to sales - driving subscriptions to more content for a larger
user-base with annual price growth.
-- Generating value from targeted acquisitions
Whilst the focus remains on organic growth, we are on track with
the integration of the two strategic acquisitions completed in H2
2021, the Life Sciences business and LMC Automotive and
Agribusiness information ("LMC"), with performance in line with
expectations. In addition, we have completed the acquisition of
Media Business Insight ("MBI") in June 2022, which brings new and
unique gold standard data sets across the film, TV and media
markets to the Group. We have also signed an agreement and received
regulatory approval to acquire TS Lombard Limited, an economic
research firm, which we anticipate will complete before the end of
Q3 2022.
-- Further debt funding to support future M&A activity
On 26 July 2022, we received indicative bank commitment to
refinance our existing facilities, which, as well as repaying
existing indebtedness, will give the Group a further GBP180m of
capacity to execute on its strategic M&A activity. We expect
the financing agreement to complete in August 2022.
Mike Danson, Chief Executive Officer of GlobalData Plc,
commented:
"The first half of 2022 demonstrated the strength and resilience
of our business. The quality of our content continues to drive
increases in recurring subscription revenues. Through our One
Platform and with a largely fixed cost base, this revenue growth
has driven an increased margin and significant cash generation.
Businesses are increasingly turning to good quality data to make
critical decisions. Our real-time industry intelligence, insights
and analytics are helping clients navigate through challenging
market and economic conditions in multiple sectors and
geographies.
M&A provides a significant growth opportunity for the Group,
and the acquisitions announced last year are already enhancing our
overall client offering. With funding available to support further
M&A, we will continue to execute against our strategy to
combine optimised organic growth with quality assets that add
further capability and depth to our platform.
The premium assets that are embedded in our platform have a
history of growth and resilience during economic cycles and it is
pleasing to see this continue in our H1 2022 results. This strength
in our business model, high cash generation and the must-have
intelligence we provide our clients gives us confidence in our
growth prospects for the second half of the year and beyond."
Note 1: Underlying growth: Defined as growth in business
excluding impact of movement in exchange rates and adjusts for the
proforma results of acquired business. This is reconciled to the
reported change on page 8.
Note 2: Adjusted EBITDA: Earnings before interest, tax,
depreciation and amortisation, adjusted to exclude costs associated
with acquisitions, restructuring of the Group, share based
payments, impairment, unrealised operating exchange rate movements
and the impact of foreign exchange contracts. Adjusted EBITDA
margin is defined as: Adjusted EBITDA as a percentage of revenue.
This is reconciled to the Statutory operating profit on page 7.
Note 3: Adjusted EPS: Adjusted profit after tax per share
(reconciliation between statutory profit and adjusted profit shown
on page 7).
Note 4: Invoiced Forward Revenue: Invoiced Forward Revenue
relates to amounts that are invoiced to clients at the statement of
financial position date, which relate to future revenue to be
recognised. This is reconciled to deferred revenue on page 8.
Note 5: Net debt: Short and long-term borrowings (excluding
lease liabilities) less cash and cash equivalents.
Note 6: Free cash flow: Cash flow generated from operations less
interest paid, income taxes paid and purchase of intangible and
tangible assets. This is reconciled to cash flow generated from
operations on page 7.
ENQUIRIES
GlobalData Plc
Mike Danson, Chief Executive Officer 0207 936 6400
Graham Lilley, Chief Financial Officer
J.P. Morgan Cazenove (Nomad and
Joint Broker) 0207 742 4000
Bill Hutchings
Mose Adigun
Panmure Gordon (Joint Broker) 0207 886 2500
Erik Anderson
Alina Vaskina
Numis Securities (Joint Broker)
Nick Westlake
Iqra Amin 0207 260 1000
FTI Consulting LLP (Financial PR) 0203 727 1000
Edward Bridges
Rob Mindell
Dwight Burden
Notes to Editors
GlobalData Plc
GlobalData Plc (AIM: DATA) is a leading data, insights, and
analytics platform for the world's largest industries. Our mission
is to help our clients decode the future, make better decisions,
and reach more customers.
One Platform Model
GlobalData's One Platform model is the foundation of our
business and is the result of years of continuous investment,
targeted acquisitions, and organic development. This model governs
everything we do, from how we develop and manage our products, to
our approach to sales and customer success, and supporting business
operations. At its core, this approach integrates our unique data,
expert analysis, and innovative solutions into an integrated suite
of client solutions and digital community platforms, designed to
serve a broad range of industry markets and customer needs on a
global basis. The operational leverage this provides means we can
respond rapidly to changing customer needs and market
opportunities, and continuously manage and develop products
quickly, at scale, with limited capital investment as well as
providing unique integration opportunities for M&A.
Strategic Priorities
GlobalData's four strategic priorities are: Customer Obsession,
World Class Product, Sales Excellence and Operational Agility.
Growth Optimisation Plan
GlobalData's Growth Optimisation Plan is a set of initiatives
designed to drive revenue growth and profitability. The Plan's
initiatives operate across all of GlobalData's operations but are
organised around the strategic priorities noted above.
Chief Executive's Review
The Group has started the year well and continues to expand its
position as a leading intelligence platform through sustained
organic momentum and further execution of its M&A strategy.
During the first half of 2022, the Group has accelerated revenue
growth, delivering further margin progression. The growth and
continued margin expansion demonstrate we are on track to deliver
on our near-term financial targets of at least 10% underlying
annual revenue growth and Adjusted EBITDA margin of 35-40%.
Our mission, to help our c.5,000 clients decode the future, is
as important as ever, at a time of geo-political and economic
uncertainty. Our quality content helps clients navigate through
uncertainty and provides essential tools and workflows to make
better decisions and reach more customers. Through our Customer
Obsession initiatives, we are having more conversations with our
clients and understanding the challenges that they are facing in
these unstable times, and it is pleasing to be in a position
whereby our continued innovation and product development, alongside
our premium data assets are providing real value to clients in this
environment.
Our subscription renewal rates have continued to be strong in H1
2022 and are consistent with 2021, a continuation of performance
over the past two years. Our heritage, premium assets, embedded
within our brand and platform have a long-standing history of
growth and resilience during economic cycles. These core strengths
of our business model are demonstrated in the H1 2022 results.
-- Organic growth: During the first half, our underlying revenue
growth was 10%.
A significant strength of our business model is that we are not
reliant on a single area for growth. We have a global product
relevant across all geographies and focused on each of the world's
largest industries. The Group has multiple levers for organic
growth, a number of which are within our existing client base:
-- Volume renewal - our volume renewal rates remain strong and
are consistent with 2021. We are seeing more and more clients
signing multi-year deals, reflecting both the strength of the
product and how embedded the product is to our clients. From our
focus on Customer Obsession initiatives, we are confident of
growing the number of customers renewing each year, which will have
an immediate impact on our revenue with only a nominal cost.
-- Pricing - pricing has been a significant focus for us in the
first half to ensure we capture the significant value of our
product in our client pricing. During the first half we attained
price increases across c.65% of our subscription renewal
opportunities at an average price adjustment of c.8%. We believe
there is significantly more opportunity to reflect greater value in
our pricing over the next 2 years.
-- Selling more licenses and product to our existing clients -
we have active campaigns to grow the number of licenses we sell to
our existing customers, through different user groups and use cases
as well as selling additional product. We currently have c.5,000
customers and therefore growing our footprint within those
customers and also increasing the number of products is a
significant revenue opportunity.
Despite having the scale of opportunity within our existing
customer base, the Group still has relatively low penetration in a
number of sectors. Therefore, the revenue opportunity beyond our
existing customers is significant and we are seeing continued
success in the acquisition of new customers.
The number of levers the Group has, means that incrementally
executing against all of them adds up to a material growth
opportunity and is why the key word in our Growth Optimisation plan
is, Optimisation.
-- M&A: Our scalable platform is ideally positioned to
integrate new datasets and content into our existing vertical
offering or expand our breadth into new vertical markets. As a
management team we have extensive experience of acquiring and
integrating assets and we currently have an active pipeline of
businesses that we are assessing, as well as the firepower
available to execute.
Following the completion of the Life Sciences business on 1
November 2021, we have completed a further two acquisitions. The
acquisition of LMC was completed in December 2021 and we have
recently acquired MBI in June 2022. MBI brings new and unique gold
standard data sets across the film, TV and media markets to
GlobalData, which combined with our existing Technology content
provides the Group, a new vertical, with deep media sector
intelligence and related services. Further details of the
acquisition are given in note 14.
We have a further agreement to purchase TS Lombard, an economic
research firm. The company provides economic and political
research, with a particular strength in emerging markets and the
acquisition will give GlobalData further access to the asset
management sales channel, to sell its full product suite to. The
transaction has received regulatory approval and is expected to
complete during Q3 2022, and the HY 2022 results do not include any
transactions in relation to this proposed acquisition.
Growth Optimisation Plan
Our Growth Optimisation Plan focuses on sustainable growth
through optimisation. We are not reliant on a single area of growth
to be successful, but are focused on optimising multiple levers for
growth both within the organic business and through M&A,
delivered via our four key pillars: Customer Obsession, World Class
Product, Sales Excellence and Operational Agility.
Customer Obsession
During the first half we have continued our customer obsession
initiatives that we rolled out in late 2021:
-- Focused on our top-tier clients : We have strengthened the
management processes and use of data and technology to support this
initiative. Through collaboration across the business, our aim is
to pivot the team to a solution-based sales process which fully
utilises our talented analyst and consulting teams, building longer
and deeper relationships with our clients. As part of this
initiative, we are enhancing the product usability with the aim of
increasing client adoption and usage across our assets. We are
therefore looking at increasing client usage of alerts, content
sharing and further enhancement of workflow tools in sales and
competitive intelligence.
-- Use of client-focused technology: Continue to develop and
adopt proprietary technology which both enhances our understanding
of our clients and their requirements, but also allow us to put
insightful and timely content in front of our clients to increase
adoption and usage.
As part of this suite of technology, we are implementing
technology that allow us to proactively monitor and manage customer
service, onboarding and relationship tasks across our Group. This
will ensure that all clients enjoy a consistent and rewarding
relationship with GlobalData. This will allow us to better scale
our client service and relationship management processes.
World Class Product
We have developed a world class product, but we also believe
that for it to maintain its status as world class, it requires
continuous investment and development: that is what we have
continued to do in the first half.
As noted in our Customer Obsession initiatives, we are focusing
on the usability of the product and targeting stronger usage and
adoption across our client base. Our One Platform allows us to
integrate new assets efficiently and recognise immediate synergies
for the Group and our clients.
The Life Sciences business was fully integrated onto our One
Platform in H1, with the LMC integration expected to be completed
early in the second half. Our recent acquisition of MBI and the
planned acquisition of TS Lombard will also be integrated in the
second half.
Sales Excellence
The sales teams focus remains on the growth levers of pricing,
volume renewal rates, more licenses and more product. Performance
has been good in the first half; delivering 10% underlying growth
as well as 13% underlying growth in Invoiced Forward Revenue.
We are focused on how to drive more leads through automated
sources, such as search engines, our B2B media sites and other
initiatives aimed at brand and product amplification. Whilst this
area of initiative did not have a material impact on our first half
results, we are confident in the longer-term opportunity for the
Group, in particular the opportunity to scale further.
Operational Agility
During the first half we launched our GlobalData Impact report
internally to colleagues which sets out our strategy for key
initiatives for the Environment, our Social agenda and Governance
arrangements. We have started to make good progress along our
roadmap, including the set up and roll out of Employee Resource
Groups, which are company sponsored employee driven groups focusing
on Gender Balance, Race and Ethnicity, LGBTQIA+, Philanthropy and
Social and Leisure. We will give a full update on these activities
in our Annual Report for the year ending 31 December 2022.
We actively manage the impact of cost and wage inflation, and we
have a strong track record as an executive team of managing costs
in a high inflation environment with a significant portion of cost
base in India. To offset any inflationary cost increases we are
continually looking at efficiencies, automation and technology to
manage our overall cost base and as a result we remain confident in
our ability to maintain a largely fixed cost base. In addition, as
noted within the Sales Excellence section, we have had success in
passing on price increases to the majority of renewals made during
H1 2022.
We have also continued to execute on our M&A strategy in
terms of sourcing and completing the MBI deal, agreeing to acquire
TS Lombard, as well as integrating the Life Sciences and LMC
businesses which completed at the end of 2021. In addition, we have
progressed towards securing new financing to fund future M&A.
On 26 July 2022, we received indicative bank commitment to
refinance our existing facilities which will give the Group a
further GBP180m of capacity to execute on its strategic M&A
activity. We expect the financing agreement to complete in August
2022.
Our Colleagues
I want to congratulate and thank all our colleagues on a strong
set of results for the first half. Our strategy is underpinned by
colleague collaboration and customer obsession, as well as their
input and direction through our newly formed Employee Resource
Groups. I am sure that by continuing to focus on the Growth
Optimisation Plan and executing against our growth levers and
initiatives we will share further success through the remainder of
2022 and beyond.
Whilst the financial target for the colleague share option
scheme (scheme 1) was met with the 2021 results, the Remuneration
Committee have not yet approved the vesting of the scheme because
of the volatility of public markets, however we intend to conclude
this in the second half. We have appointed both FTI Consulting as
our Investor Relations Agency and Numis Securities as joint broker,
to work alongside J.P. Morgan and Panmure Gordon to enhance our
profile in the investment community and assist on the matter.
Dividend
The Group's policy is to pay a dividend that reflects the growth
and cash generation of the business. The Board is pleased to
announce an interim dividend of 7.7 pence per share (H1 2021: 6.1
pence) which represents an increase of 26%, broadly in line with
growth of Adjusted EBITDA. The interim dividend will be paid on 7
October 2022 to shareholders on the register at the close of
business on 9 September 2022.
Current Trading and Outlook
The quality assets that are embedded in our platform have a
history of growth and resilience during economic cycles and this
has been demonstrated through our strong H1 2022 results. As we
look ahead, we are well positioned with strong growth and scale of
our Invoiced Forward Revenue of GBP114.6m. The strength in our
business model, the must-have intelligence we provide our clients,
deep customer relationships and diverse market coverage gives us
confidence in our growth prospects for the second half of the year
and beyond.
Mike Danson
Chief Executive Officer
1 August 2022
Financial Review
Unaudited 6 months to Unaudited 6 months to Audited Year Ended 31 December
GBPm June 2022 June 2021 2021
Revenue 111.9 91.1 189.3
Operating profit 24.1 18.3 38.2
Adjusting items
Depreciation 3.3 3.6 6.8
Amortisation of acquired
intangible assets 4.1 2.7 5.6
Amortisation of software 0.5 0.5 0.9
Share-based payments charge 1.4 4.7 9.2
Restructuring and refinancing
costs 1.0 0.9 1.4
Revaluation loss on short- and
long-term derivatives 2.1 0.7 0.9
Unrealised operating foreign
exchange loss/(gain) 0.9 (0.9) (1.0)
M&A costs 1.6 0.2 2.4
Adjusted EBITDA 39.0 30.7 64.4
---------------------- ----------------------
Adjusted EBITDA margin (1) 35% 34% 34%
---------------------------------- ---------------------- ---------------------- ----------------------------------
Statutory Profit Before Tax 15.0 16.0 32.6
---------------------------------- ---------------------- ---------------------- ----------------------------------
Amortisation of acquired
intangible assets 4.1 2.7 5.6
Share-based payments charge 1.4 4.7 9.2
Restructuring and refinancing
costs 1.0 0.9 1.4
Revaluation loss on short- and
long-term derivatives 2.1 0.7 0.9
Unrealised operating foreign
exchange loss/(gain) 0.9 (0.9) (1.0)
M&A costs 1.6 0.2 2.4
Borrowings non-cash fair value
adjustments (2) 4.0 0.3 0.8
---------------------------------- ---------------------- ---------------------- ----------------------------------
Adjusted Profit Before Tax 30.1 24.6 51.9
---------------------------------- ---------------------- ---------------------- ----------------------------------
Adjusted income tax expense (3) (6.9) (5.7) (9.6)
---------------------------------- ---------------------- ---------------------- ----------------------------------
Adjusted Profit After Tax 23.2 18.9 42.3
---------------------------------- ---------------------- ---------------------- ----------------------------------
Cash flow generated from
operations 56.1 40.8 60.5
Interest paid (4.4) (1.3) (3.4)
---------------------- ----------------------
Income taxes paid (4.8) (3.8) (5.1)
---------------------------------- ---------------------- ---------------------- ----------------------------------
Purchase of intangible and
tangible assets (1.2) (1.0) (1.3)
---------------------------------- ---------------------- ---------------------- ----------------------------------
Free cash flow 45.7 34.7 50.7
---------------------------------- ---------------------- ---------------------- ----------------------------------
Operating cash flow conversion %
(4) 144% 133% 94%
---------------------------------- ---------------------- ---------------------- ----------------------------------
Free cash flow conversion % (5) 152% 141% 98%
---------------------------------- ---------------------- ---------------------- ----------------------------------
Earnings attributable to equity
holders:
Basic earnings per share (pence) 9.4 9.7 21.9
Diluted earnings per share
(pence) 8.6 8.9 20.2
Adjusted basic earnings per share
(pence) 20.7 16.3 37.3
Adjusted diluted earnings per
share (pence) 18.8 15.1 34.4
---------------------------------- ---------------------- ---------------------- ----------------------------------
(1) Adjusted EBITDA margin is defined as: Adjusted EBITDA as a
percentage of revenue. Note 2 discloses the rationale for the
adjusting items in detail.
(2) This is a non-cash charge relating to fair value adjustments
on external borrowings in line with the provisions of IFRS9 arising
on the completion of a one-year extension to the external
facilities agreement (detailed in note 11) and changes in future
anticipated cash flows.
(3) Adjusted income tax expense represents the statutory income
tax expense adjusted for the tax effect on adjusting items. In
addition, the adjusted income tax expense includes the effect of
any tax rate changes.
(4) Operating cash flow conversion is defined as: Cash flow
generated from operations divided by Adjusted EBITDA.
(5) Free cash flow conversion is defined as: Free cash flow
generated from operations; being cash flow generated from
operations less interest paid, income taxes paid and purchase of
intangible and tangible assets; divided by Adjusted Profit before
tax.
The financial position and performance of the business are
reflective of the core financial elements of our business model:
visible and recurring revenues, high incremental margins, scalable
opportunity, and strong cash flows.
The Directors believe that Adjusted EBITDA, Adjusted Profit
After Tax and Adjusted earnings per share (as detailed on page 7)
provide additional useful information on the core operational
performance of the Group to shareholders, and we review the results
of the Group using these measures internally. Within note 2, we
disclose the rationale for the adjusting items in detail. The
Directors also look at underlying performance of the Group, which
excludes any gain or loss through currency and adjusts for the
proforma impact of the acquired businesses (i.e. the results of the
acquired businesses for the same period in the previous year).
Revenue
Group revenue grew from GBP91.1m to GBP111.9m in H1 2022
(23%).
GBPm HY 2022 HY 2021 Growth
%
Reported revenue 111.9 91.1 23%
Impact of currency (1.0) -
Previous years' results acquired
businesses - 10.7
Fair value adjustment on acquired 0.8 -
deferred revenue
----------------------------------- -------- -------- -------
Underlying revenue 111.7 101.8 10%
----------------------------------- -------- -------- -------
In HY 2022, underlying growth accelerated from the full year
revenue growth rate from 2021 of 8% to 10%. This reflects continued
strength in our renewals, including some progress on price as well
as consistent performance in winning new clients. In addition to
the underlying growth performance, the acquisitions of Life
Sciences, LMC and MBI increased our overall reported revenue growth
to 23%. The net effect of foreign exchange movements in the first
half added a further GBP1.0m.
GBPm 30 June 30 June 31 December
2022 2021 2021
Deferred revenue 110.9 82.0 81.4
Amounts not due/subscription not
started at balance sheet date 3.7 1.8 26.3
Invoiced Forward Revenue 114.6 83.8 107.7
-------- --------
Strong performance of our renewals and new business subscription
business resulted in our Invoiced Forward Revenue ("IFR") balance
as at 30 June 2022 showing 13% underlying growth. The sales order
growth driving our IFR growth reflects focused attention on our
growth levers of pricing, more seats, more product to existing
clients, as well as consistent new business wins. We are starting
to see the results of this area of our Growth Optimisation Plan,
however we will continue to make further progress against each
lever in H2 and beyond. The impact of acquisitions, timing of
events billings and the foreign exchange impact meant that the
overall IFR growth was 37% versus the balance as at 30 June
2021.
Operating Profit
Operating profit increased to GBP24.1m (30 June 2021: GBP18.3m),
improving margin by 2 percentage points to 22% (30 June 2021: 20%)
driven by the GBP20.8m revenue growth discussed above, offset by
GBP15.0m additional costs.
The additional costs largely reflected the impact of acqusitions
(reported within Adjusted EBITDA) and material variances in
adjusting items as follows:
-- Restructuring & M&A costs increased from GBP1.1m in
HY 2021 to GBP2.4m, reflecting increased M&A and integration
activity in HY 2022.
-- Refinancing costs of GBP0.2m in the first half (HY 2021:
GBPnil) are in relation to professional fees incurred in the
extension of existing facilites by one year. These costs do not
include any costs in relation to the contemplated new financing
facilities, which are expected to complete in August.
-- Share-based payment charge has reduced from GBP4.7m to
GBP1.4m, as the charge for Scheme 1 ended on 31 December 2021. The
charge reflects the non-cash charge for schemes 2 and 4. Further
detail is given in note 12.
-- Revaluation of derivatives and unrealised operating foreign
exchange loss/gain increased to GBP3.0m loss (HY 2021: GBP0.2m
gain) reflecting foreign exchange movements in the half, with the
greatest impact coming from USD/ GBP re-translation. Further detail
is given below.
-- Amortisation of acquired intangibles increased by GBP1.4m
versus HY 2021, driven by the acquisition of intangible assets in
the Life Sciences, LMC and MBI transactions which have all
completed since 30 June 2021.
Adjusted EBITDA
The Directors believe that Adjusted EBITDA provides additional
useful information on the core operational performance of the Group
to shareholders, and we review the results of the Group using this
measure internally. Adjusted EBITDA increased by 27% to GBP39.0m
(HY 2021: GBP30.7m), which is reflective of revenue growth and
maintaining a relatively stable organic cost base at Adjusted
EBITDA level. The acquired businesses performed in line with Group
margin. Our Adjusted EBITDA margin was 35% (HY 2021: 34%), now
within our previously stated ambition of Adjusted EBITDA margin
range of 35-40%.
Adjusted EBITDA benefited from the impact of IFRS 16 (lease
accounting) by GBP2.9m (HY 2021: GBP3.0m).
Impact of Foreign Exchange
The main currency movement in the period has been the weakening
of Pounds Sterling, relative to the US Dollar. Our revenues are 50%
US Dollar denominated and therefore the movement in the average
rate of $1.31/GBP, compared with $1.38/GBP in 2021 (a 5% weakening
of Pounds Sterling) has had an impact on our results.
The year-on-year movement on the US Dollar exchange rate
increased revenue by GBP1.3m, marginally offset by GBP0.2m in Euro
and GBP0.1m in other currencies. However, the accelerated weaking
at the end of the half had a more pronounced impact on our deferred
revenue balance than in our reported revenues. The foreign exchange
impact increased deferred revenue by a net GBP4.4m as at 30 June
2022.
From a cost perspective, it had a more immediate effect (as
revenues are 83% subscription and any gain/loss is phased into
revenue as recognised). The net additional cost as a result of
foreign exchange was GBP1.7m compared to HY 2021.
Deferred Adjusted
GBPm Revenue Revenue Costs EBITDA Margin
As reported 2022 110.9 111.9 72.9 39.0 35%
Less Currency movements
US Dollar (4.6) (1.3) (1.5) 0.2
Euro 0.1 0.2 - 0.2
Other 0.1 0.1 (0.2) 0.3
At constant rate 106.5 110.9 71.2 39.7 36%
As reported 2021 82.0 91.1 60.4 30.7
Constant currency
growth 30% 22% 18% 29%
------------------------- --------- -------- ------ --------- -------
Profit Before Tax
Improved performance at both Operating Profit and Adjusted
EBITDA levels, was offset by an increase in finance costs of
GBP6.8m to GBP9.1m (HY 2021: GBP2.3m) reflecting an increase in net
debt over the previous 12 months, and a non-cash charge of GBP4.0m
relating to fair value adjustments on external borrowings, which
reduced Profit Before Tax to GBP15.0m (HY 2021: GBP16.0m).
Tax
The interim period income tax expense has been calculated using
the forecast effective tax rate that would be applicable to
expected total annual earnings, i.e. the estimated average annual
effective income tax rate applied to the pre-tax income of the
interim period. To the extent practicable, where different income
tax rates apply to different categories of income, a separate rate
has been used for each individual category of interim period
pre-tax income.
Using this approach, the overall annual effective income tax
rate is currently forecast to be 22% (HY 2021: 25%). This broadly
represents the standard corporation tax rate in the UK of 19%
adjusted for the higher rates of overseas tax in the jurisdictions
where the Group operates (2%) and expenses which are not deductible
for tax purposes (1%).
Cash Generation
Cash from operations increased by 38% compared to HY 2021, to
GBP56.1m (HY 2021: GBP40.8m). The main driver for this increase is
an increase in cash collections, in line with sales order growth
which resulted in cash from operations conversion of 144% of
Adjusted EBITDA (HY 2021: 133%). HY 2021 was adversely impacted by
the timing of Events payments, following the COVID-19 disruption,
adjusting for this, HY 2021 cash conversion (as a percentage of
Adjusted EBITDA) would have been 142%.
Free Cash Flow increased to GBP45.7m, an increase of 32% (HY
2021: GBP34.7m). This growth is reflective of the cash from
operations performance, offset by increased net debt and interest
costs. As a low capital-intensive business, our capital expenditure
is typically around 1-1.5% of revenue. Free Cash Flow as a
percentage of Adjusted Profit before Tax was 152%, versus 141% in
HY 2021.
Net Debt (1)
Since the last reporting period, December 2021, net debt has
increased from GBP177.6m to GBP190.5m. The increase is reflective
of significant cash from operations conversion being offset by
GBP20.1m paid in relation to acquisitions, GBP17.7m being used to
purchase own shares, GBP14.8m of dividend payments, taxes of
GBP4.8m, capital expenditure of GBP1.2m, leasing costs of GBP2.9m
and interest of GBP4.4m.
(1) We define net debt as short- and long-term borrowings
(excluding lease liabilities) less cash and cash equivalents.
Independent review report to GlobalData Plc
Conclusion
We have been engaged by the Company to review the condensed set
of financial statements in the half-yearly financial report for the
six months ended 30 June 2022 which comprises the consolidated
income statement, consolidated statement of comprehensive income,
consolidated statement of financial position, the consolidated
statement of changes in equity, the consolidated statement of cash
flows and related notes 1 to 15.
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 2022 is not prepared, in all material respects, in accordance
with United Kingdom adopted International Accounting Standard 34
and the AIM Rules of the London Stock Exchange.
Basis for Conclusion
We conducted our review in accordance with International
Standard on Review Engagements (UK) 2410 "Review of Interim
Financial Information Performed by the Independent Auditor of the
Entity" issued by the Financial Reporting Council for use in the
United Kingdom. A review of interim financial information consists
of making inquiries, 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 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.
As disclosed in note 1, the annual financial statements of the
group will be prepared in accordance with United Kingdom adopted
international accounting standards. The condensed set of financial
statements included in this half-yearly financial report has been
prepared in accordance with United Kingdom adopted International
Accounting Standard 34, "Interim Financial Reporting".
Conclusion Relating to Going Concern
Based on our review procedures, which are less extensive than
those performed in an audit as described in the Basis for
Conclusion section of this report, nothing has come to our
attention to suggest that the directors have inappropriately
adopted the going concern basis of accounting or that the directors
have identified material uncertainties relating to going concern
that are not appropriately disclosed.
This conclusion is based on the review procedures performed in
accordance with this ISRE (UK), however future events or conditions
may cause the entity to cease to continue as a going concern.
Responsibilities of the directors
The directors are responsible for preparing the half-yearly
financial report in accordance with the AIM rules of the London
Stock Exchange.
In preparing the half-yearly financial report, the directors are
responsible for assessing the group's ability to continue as a
going concern, disclosing as applicable, matters related to going
concern and using the going concern basis of accounting unless the
directors either intend to liquidate the company or to cease
operations, or have no realistic alternative but to do so.
Auditor's Responsibilities for the review of the financial
information
In reviewing the half-yearly financial report, we are
responsible for expressing to the group a conclusion on the
condensed set of financial statement in the half-yearly financial
report. Our conclusion, including our Conclusions Relating to Going
Concern, are based on procedures that are less extensive than audit
procedures, as described in the Basis for Conclusion paragraph of
this report.
Use of our report
This report is made solely to the company in accordance with
International Standard on Review Engagements (UK) 2410 "Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity" issued by the Financial Reporting Council. Our work
has been undertaken so that we might state to the company those
matters we are required to state to it 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, for our review work, for this report, or for the
conclusions we have formed.
Deloitte LLP
Statutory Auditor
London, England
1 August 2022
Consolidated Income Statement
6 months 6 months Year to
to 30 to 30 31 December
June 2022 June 2021 2021
Notes Unaudited Unaudited Audited
Continuing operations GBPm GBPm GBPm
Revenue 4 111.9 91.1 189.3
Operating expenses 5 (87.8) (72.5) (150.8)
Losses on trade receivables 5 (0.1) (0.9) (1.2)
Other income 0.1 0.6 0.9
-------------------------------------- ------ ----------- ----------- -------------
Operating profit 24.1 18.3 38.2
Net finance costs 7 (9.1) (2.3) (5.6)
Profit before tax 15.0 16.0 32.6
Income tax expense (4.4) (4.8) (7.7)
-------------------------------------- ------ ----------- ----------- -------------
Profit for the period 10.6 11.2 24.9
-------------------------------------- ------ ----------- ----------- -------------
Attributable to:
Equity holders of the parent 10.6 11.2 24.9
Earnings per share attributable to
equity holders:
Basic earnings per share (pence) 8 9.4 9.7 21.9
Diluted earnings per share (pence) 8 8.6 8.9 20.2
-------------------------------------- ------ ----------- ----------- -------------
Reconciliation to Adjusted EBITDA(1)
:
Operating profit 24.1 18.3 38.2
Depreciation 3.3 3.6 6.8
Amortisation of software 0.5 0.5 0.9
Adjusting items 6 11.1 8.3 18.5
-------------------------------------- ------ ----------- ----------- -------------
Adjusted EBITDA(1) 39.0 30.7 64.4
-------------------------------------- ------ ----------- ----------- -------------
The accompanying notes form an integral part of this financial
report.
(1) We define Adjusted EBITDA as EBITDA adjusted to exclude
costs associated with acquisitions, restructuring of the Group,
share-based payments, impairment, unrealised operating exchange
rate movements and the impact of foreign exchange contracts. We
present Adjusted EBITDA as additional information because it is
used internally as a key indicator to assess financial performance.
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. Adjusted EBITDA margin is defined as:
Adjusted EBITDA as a percentage of revenue.
Consolidated Statement of Comprehensive Income
6 months to 6 months to Year to 31
30 June 2022 30 June 2021 December 2021
Unaudited Unaudited Audited
GBPm GBPm GBPm
Profit for the period 10.6 11.2 24.9
Other comprehensive income
Items that will be classified subsequently to profit or loss when
specific conditions are
met:
Net exchange losses on translation of foreign entities (0.1) (0.6) (0.5)
Other comprehensive losses, net of tax (0.1) (0.6) (0.5)
--------------------------------------------------------------------- -------------- -------------- ---------------
Total comprehensive income for the period 10.5 10.6 24.4
--------------------------------------------------------------------- -------------- -------------- ---------------
Attributable to:
------------------------------ ----- ----- -----
Equity holders of the parent 10.5 10.6 24.4
The accompanying notes form an integral part of this financial
report.
Consolidated Statement of Financial Position
30 June 30 June 31 December
2022 2021 2021
Notes Unaudited Unaudited Audited
GBPm GBPm GBPm
Non-current assets
Property, plant and equipment 33.4 36.1 35.3
Intangible assets 9 368.9 239.0 347.7
Net investment in sublease - - 0.1
Trade and other receivables - 0.1 -
Deferred tax assets 1.0 7.4 2.1
----------------------------------- ------ ----------- ----------- ------------
403.3 282.6 385.2
----------------------------------- ------ ----------- ----------- ------------
Current assets
Trade and other receivables 55.1 40.0 51.2
Current tax receivable 0.1 0.6 -
Short-term derivative assets 10 - 0.6 0.6
Cash and cash equivalents 41.5 26.5 22.6
----------------------------------- ------ ----------- ----------- ------------
96.7 67.7 74.4
----------------------------------- ------ ----------- ----------- ------------
Total assets 500.0 350.3 459.6
----------------------------------- ------ ----------- ----------- ------------
Current liabilities
Trade and other payables (140.6) (103.8) (114.3)
Short-term lease liabilities 11 (4.4) (4.0) (4.1)
Short-term borrowings 11 (5.0) (5.0) (5.0)
Current tax payable (5.4) (2.7) (4.2)
Short-term derivative liabilities 10 (1.9) (0.2) (0.3)
Short-term provisions (0.1) (0.2) (0.1)
----------------------------------- ------ ----------- ----------- ------------
(157.4) (115.9) (128.0)
----------------------------------- ------ ----------- ----------- ------------
Net current liabilities (60.7) (48.2) (53.6)
----------------------------------- ------ ----------- ----------- ------------
Non-current liabilities
Long-term provisions (0.7) (0.5) (0.7)
Deferred tax liabilities (3.9) - -
Long-term derivative liabilities 10 - - (0.1)
Long-term lease liabilities 11 (27.4) (30.0) (29.3)
Long-term borrowings 11 (227.0) (68.6) (195.2)
----------------------------------- ------ ----------- ----------- ------------
(259.0) (99.1) (225.3)
----------------------------------- ------ ----------- ----------- ------------
Total liabilities (416.4) (215.0) (353.3)
----------------------------------- ------ ----------- ----------- ------------
Net assets 83.6 135.3 106.3
----------------------------------- ------ ----------- ----------- ------------
Equity
Share capital 12 0.2 0.2 0.2
Treasury reserve (84.3) (26.2) (66.6)
Other reserve (44.3) (44.3) (44.3)
Foreign currency translation
reserve (0.4) (0.4) (0.3)
Retained profit 12 212.4 206.0 217.3
----------------------------------- ------ ----------- ----------- ------------
Equity attributable to equity
holders of the parent 83.6 135.3 106.3
----------------------------------- ------ ----------- ----------- --------------
The accompanying notes form an integral part of this financial
report.
Consolidated Statement of Changes in Equity
Equity
attributable
Foreign to equity
Share currency holders
Share premium Treasury Other Merger translation Retained of the
capital account reserve reserve reserve reserve profit parent
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Balance at 1 January
2021 0.2 0.7 (21.4) (37.1) 163.8 0.2 31.3 137.7
Profit for the six
month
period ended 30
June 2021 - - - - - - 11.2 11.2
Other comprehensive
income:
Net exchange loss on
translation
of foreign entities - - - - - (0.6) - (0.6)
--------------------- --------- --------- --------- --------- --------- ------------- --------- --------------
Total comprehensive
income
for the period - - - - - (0.6) 11.2 10.6
--------------------- --------- --------- --------- --------- --------- ------------- --------- --------------
Transactions with
owners:
Bonus issue of
shares 171.0 - - (7.2) (163.8) - - -
Capital reduction (171.0) (0.7) - - - - 171.7 -
Share buy-back - - (6.1) - - - - (6.1)
Dividend - - - - - - (13.4) (13.4)
Vesting of share
options - - 1.3 - - - (1.3) -
Share-based payments
charge - - - - - - 4.7 4.7
Tax on share-based
payments - - - - - - 1.8 1.8
--------------------- --------- --------- --------- --------- --------- ------------- --------- --------------
Balance at 30 June
2021 0.2 - (26.2) (44.3) - (0.4) 206.0 135.3
Profit for the six
month
period ended 31
December
2021 - - - - - - 13.7 13.7
Other comprehensive
income:
Net exchange gain on
translation
of foreign entities - - - - - 0.1 - 0.1
--------------------- --------- --------- --------- --------- --------- ------------- --------- --------------
Total comprehensive
income
for the period - - - - - 0.1 13.7 13.8
--------------------- --------- --------- --------- --------- --------- ------------- --------- --------------
Transactions with
owners:
Share buy-back - - (40.4) - - - - (40.4)
Dividend - - - - - - (7.0) (7.0)
Share-based payments
charge - - - - - - 4.5 4.5
Tax on share-based
payments - - - - - - 0.1 0.1
Balance at 31
December
2021 0.2 - (66.6) (44.3) - (0.3) 217.3 106.3
Profit for the six
month
period ended 30
June 2022 - - - - - - 10.6 10.6
Other comprehensive
income:
Net exchange loss on
translation
of foreign entities - - - - - (0.1) - (0.1)
--------------------- --------- --------- --------- --------- --------- ------------- --------- --------------
Total comprehensive
income
for the period - - - - - (0.1) 10.6 10.5
--------------------- --------- --------- --------- --------- --------- ------------- --------- --------------
Transactions with
owners:
Share buy-back - - (17.7) - - - - (17.7)
Dividend - - - - - - (14.8) (14.8)
Share-based payments
charge - - - - - - 1.4 1.4
Tax on share-based
payments - - - - - - (2.1) (2.1)
Balance at 30 June
2022 0.2 - (84.3) (44.3) - (0.4) 212.4 83.6
--------------------- --------- --------- --------- --------- --------- ------------- --------- --------------
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
2022 2021 2021
Continuing operations Unaudited Unaudited Audited
Cash flows from operating activities GBPm GBPm GBPm
Profit for the period 10.6 11.2 24.9
Adjustments for:
Depreciation 3.3 3.6 6.8
Amortisation 4.6 3.2 6.5
Gain on disposal of property, plant
and equipment - - (0.2)
Impairment - 0.4 0.4
Net finance costs 9.1 2.3 5.6
Taxation recognised in profit or
loss 4.4 4.8 7.7
Share-based payments charge 1.4 4.7 9.2
(Increase)/decrease in trade and
other receivables (2.0) 5.3 (3.2)
Increase in trade and other payables 22.9 4.8 2.2
Revaluation of short- and long-term
derivatives 2.1 0.7 0.9
Movement in provisions (0.3) (0.2) (0.3)
------------------------------------------- ------------ ------------ -------------
Cash generated from continuing
operations 56.1 40.8 60.5
Interest paid (4.4) (1.3) (3.4)
Income taxes paid (4.8) (3.8) (5.1)
------------------------------------------- ------------ ------------ -------------
Total cash flows from operating
activities 46.9 35.7 52.0
------------------------------------------- ------------ ------------ -------------
Cash flows from investing activities
Acquisitions, net of cash acquired (20.1) (1.1) (97.7)
Cash received from repayment of
loans 0.9 0.9 0.9
Proceeds from disposal of property,
plant and equipment - - 0.6
Purchase of property, plant and
equipment (0.6) (0.4) (0.8)
Purchase of intangible assets (0.6) (0.6) (0.5)
------------------------------------------- ------------ ------------ -------------
Total cash flows used in investing
activities (20.4) (1.2) (97.5)
------------------------------------------- ------------ -------------
Cash flows from financing activities
Repayment of borrowings (2.5) (2.5) (5.0)
Proceeds from borrowings 31.0 - 129.0
Loan refinancing fee (0.7) - (0.4)
Acquisition of own shares (17.7) (6.1) (46.5)
Principal elements of lease payments (2.9) (3.1) (5.8)
Dividend paid (14.8) (13.4) (20.4)
------------------------------------------- ------------ ------------ -------------
Total cash flows used in financing
activities (7.6) (25.1) 50.9
------------------------------------------- ------------ ------------ -------------
Net increase in cash and cash equivalents 18.9 9.4 5.4
Cash and cash equivalents at beginning
of period 22.6 17.7 17.7
Effects of currency translation
on cash and cash equivalents - (0.6) (0.5)
------------------------------------------- ------------ ------------ -------------
Cash and cash equivalents at end
of period 41.5 26.5 22.6
------------------------------------------- ------------ ------------ -------------
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 leading data, insights, and
analytics via its One Platform for the world's largest industries.
Our mission is to help our clients decode the future, make better
decisions, and reach more customers.
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 2022. They have been prepared in accordance with IAS 34,
Interim Financial Reporting as adopted in the United Kingdom. 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 2021.
The financial information for the year ended 31 December 2021
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 2021 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
When preparing the Interim Financial Statements, the Group makes
a number of estimates, judgements and assumptions regarding the
future. Estimates, judgements and assumptions are frequently
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 judgements, estimates and assumptions applied in the Interim
Financial Statements, including the key sources of estimation
uncertainty, were the same as those applied in the Group's last
annual financial statements for the year ended 31 December
2021.
Principal and emerging risks and uncertainties
The Directors consider that the principal and emerging risks and
uncertainties facing the Group are consistent with those reported
within the Strategic Report of the annual financial statements for
the year ended 31 December 2021. The key risks identified were as
follows:
-- Business and strategic risks: Product; People and Succession;
Competition and Clients; Economic and Global Political Changes;
Acquisition and Disposal Risk
-- Operational risks: Financial; Loss, Misuse or Theft of
Proprietary, Employee or Customer Data; IT, Cyber and Systems
Failure; Regulatory Compliance
Going concern
The Group has closing cash of GBP41.5m as at 30 June 2022 (30
June 2021: GBP26.5m) and net debt of GBP190.5m (30 June 2021:
GBP47.1m), being cash and cash equivalents less short- and
long-term borrowings, excluding lease liabilities. The Group has
outstanding loans of GBP232.0m which are syndicated with The Royal
Bank of Scotland, HSBC, Bank of Ireland and Silicon Valley Bank.
The Group has fully utilised its RCF facility as at 30 June 2022.
The Group's current banking facilities are in place until April
2024 following completion of a one-year extension to the facilities
during June 2022. The Group has generated GBP56.1m in cash from
operations during the period ended 30 June 2022 (30 June 2021:
GBP40.8m). The Group has indicative bank commitment to refinance
our existing facilities, which, as well as repaying existing
indebtedness, will give the Group a further GBP180m of capacity to
execute on its strategic M&A activity. We expect the financing
agreement to complete in August 2022.
The Directors have a reasonable expectation that there are no
material uncertainties that cast significant doubt about the
Group's ability to continue in operation and meet its liabilities
as they fall due for the foreseeable future, being a period of at
least 12 months from the date of announcement of the interim
financial statements. The Group has ample headroom in relation to
the financial covenants in place and no breach is forecast. The
Directors have modelled a number of worst-case scenarios to
consider their potential impact on the Group's results, cash flow
and loan covenant forecast. Key assumptions built into the
scenarios focus on inflationary pressures and events revenue
growth. In addition to performing scenario planning, the Directors
have also conducted stress testing of the Business's forecasts and,
taking into account reasonable downside sensitivities
(acknowledging that such risks and uncertainties exist), the
Directors are satisfied that the business is expected to operate
within its facilities. There remains headroom on the covenants
under each scenario.
The Directors therefore consider the strong balance sheet, with
good cash reserves and working capital along with group financing
arrangements, provide ample liquidity. Accordingly, the Directors
have prepared the interim financial statements on a going concern
basis.
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 2021, which have been applied consistently. The
annual financial statements of the Group are prepared in accordance
with IFRSs as adopted by the United Kingdom.
Presentation of non-statutory alternative performance
measures
The Directors believe that Adjusted EBITDA, Adjusted EBITDA
margin, Adjusted profit before tax, Adjusted profit after tax,
Invoiced Forward Revenue, Free cash flow, Free cash flow conversion
and Adjusted earnings per share provide additional useful
information on the core operational performance of the Group to
shareholders, and we review the results of the Group using these
measures internally. The term 'adjusted' is not a defined term
under IFRS and may not therefore be comparable with similarly
titled profit measures reported by other companies. It is not
intended to be a substitute for, or superior to, IFRS measures of
profit.
Adjustments are made in respect of:
Share-based payments Share-based payment expenses are excluded from
Adjusted EBITDA as they are a non-cash charge,
the awards are equity-settled and the Directors
believe they result in a level of charge that
would distort the user's view of the core trading
performance of the Group.
Restructuring, M&A The Group considers these items of expense as
and refinancing costs exceptional and excludes them from Adjusted EBITDA
where the nature of the item, or its size, is
not related to the core underlying trading of
the Group. This is to assist the user of the
financial statements to better understand the
results of the core operations of the Group and
allow comparability of underlying results.
-----------------------------------------------------
Amortisation and The amortisation charge for those intangible
impairment of acquired assets recognised on business combinations is
intangible assets excluded from Adjusted EBITDA since they are
non-cash charges arising from historical investment
activities. Any impairment charges recognised
in relation to these intangible assets are also
excluded from Adjusted EBITDA. This is a common
adjustment made by acquisitive information service
businesses and therefore consistent with peers.
-----------------------------------------------------
Revaluation of short- Gains and losses are recognised within Adjusted
and long-term derivatives EBITDA when they are realised in cash terms and
therefore we exclude non-cash movements arising
from fluctuations in exchange rates as these
may not reflect the underlying performance of
the Group, which better aligns Adjusted EBITDA
with the cash performance of the business.
-----------------------------------------------------
Unrealised operating
foreign exchange
gain/ loss
-----------------------------------------------------
3. Taxation
Income tax on the profit or loss for the period 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 quantifiable 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 substantively 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 using the tax rate that would be applicable to expected
total annual earnings, being the estimated average annual effective
income tax rate applied to the pre-tax income of the interim
period. To the extent practicable, a separate estimated average
annual effective income tax rate is determined for each tax
jurisdiction and applied individually to the interim period pre-tax
income of each jurisdiction. Similarly, if different income tax
rates apply to different categories of income (such as capital
gains), to the extent practicable, a separate rate is applied to
each individual category of interim period pre-tax income.
4. Segment analysis
The principal activity of GlobalData Plc and its subsidiaries
(together 'the Group') is to provide business information in the
form of high-quality proprietary data, analytics and insights to
clients in multiple sectors.
IFRS8 "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 Chief Executive Officer
(CEO) as its chief operating decision maker.
The Group maintains a centralised operating model and single
product platform (One Platform), which is underpinned by a common
taxonomy, shared development resource, and new data science
technologies. The fundamental principle of the GlobalData business
model is to provide our clients subscription access to our
proprietary data, analytics, and insights platform, with the
offering of ancillary services such as consulting, single copy
reports and events. The vast majority of data sold by the Group is
produced by a central research team which produces data for the
Group as a whole. The team reports to one central individual, the
Managing Director of the India operation, who reports to the CEO.
'Data, Analytics and Insights' is therefore considered to be the
operating segment of the Group.
The Group profit or loss is reported to the CEO on a monthly
basis and consists of earnings before interest, tax, depreciation,
amortisation, central overheads and other adjusting items. The CEO
also monitors revenue within the operating segment.
The Group considers the use of a single operating segment to be
appropriate due to:
-- The CEO reviewing profit or loss at the Group level;
-- Utilising a centralised operating model; and
-- Being an integrated solutions-based business, rather than a portfolio business.
A reconciliation of Adjusted EBITDA to profit before tax from
continuing operations is set out below:
6 months 6 months Year to
to 30 June to 30 June 31 December
2022 2021 2021
Unaudited Unaudited Audited
GBPm GBPm GBPm
Adjusted EBITDA 39.0 30.7 64.4
Restructuring costs (0.8) (0.9) (1.2)
M&A costs (1.6) (0.2) (2.4)
Refinancing costs (0.2) - (0.2)
Share-based payments charge (1.4) (4.7) (9.2)
Revaluation loss on short- and long-term
derivatives (2.1) (0.7) (0.9)
Unrealised operating foreign exchange
(loss)/gain (0.9) 0.9 1.0
Amortisation of acquired intangibles (4.1) (2.7) (5.6)
Depreciation (3.3) (3.6) (6.8)
Amortisation (excluding amortisation
of acquired intangible assets) (0.5) (0.5) (0.9)
Finance costs (9.1) (2.3) (5.6)
Profit before tax 15.0 16.0 32.6
------------------------------------------ ------------ ------------ -------------
The Group generates revenue from services provided over a period
of time such as recurring subscriptions and other services which
are deliverable at a point in time such as reports, events and
custom research.
Subscription income for online services, data and analytics
(typically 12 months) is normally received at the beginning of the
services and is therefore recognised as a contract liability,
"deferred revenue", in the statement of financial position. Revenue
is recognised evenly over the period of the contractual term as the
performance obligations are satisfied evenly over the term of
subscription.
The revenue on services delivered at a point in time is
recognised when our contractual obligation is satisfied, such as
delivery of a static report or delivery of an event. The obligation
on these types of contracts is a discrete obligation, which once
met satisfies the Group performance obligation under the terms of
the contract.
Any invoiced contracted amounts which are still subject to
performance obligations and where the payment has been received or
is contractually due are recognised within deferred revenue at the
statement of financial position date. Typically, the Group receives
settlement of cash at the start of each contract and standard terms
are zero days. Similarly, if the Group satisfies a performance
obligation before it receives the consideration or is contractually
due the Group recognises a contract asset within accrued income in
the statement of financial position.
Deferred Revenue recognised within the
Revenue recognised in the Consolidated Income Consolidated Statement of
Statement Financial Position
Year ended
Period ended Period ended 31 December As at 30 June As at 30 June As at 31
30 June 2022 30 June 2021 2021 2022 2021 December 2021
GBPm GBPm GBPm GBPm GBPm GBPm
Services
transferred:
Over a period
of time 92.4 76.6 156.9 100.3 75.4 73.1
Immediately
on delivery 19.5 14.5 32.4 10.6 6.6 8.3
---------------- --------------- --------------- ------------- ---------------- ---------------- ---------------
Total 111.9 91.1 189.3 110.9 82.0 81.4
As subscriptions are typically for periods of 12 months the
majority of deferred revenue held at the balance sheet date will be
recognised in the income statement in the following 12 months. As
at 30 June 2022, GBP0.6m (30 June 2021: GBP0.5m) of the deferred
revenue balance will be recognised beyond the next 12 months.
In instances where the Group enters into transactions involving
a range of the Group's services, for example a subscription and
custom research, the total transaction price for a contract is
allocated amongst the various performance obligations based on
their relative stand-alone selling prices.
Geographical analysis
Our primary geographical markets are serviced by our global
sales teams which are organised as Europe, US and Asia Pacific by
virtue of the team location. The below disaggregated revenue is
derived from the geographical location of our customers rather than
the team structure the Group is organised by.
From continuing operations
6 months to 30 June 2022 UK Europe Americas Asia Pacific MENA (1) Rest of World Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Revenue from external customers 18.2 29.8 36.6 13.9 8.9 4.5 111.9
--------------------------------- ----- ------- --------- ------------- --------- -------------- --------
6 months to 30 June 2021 UK Europe Americas Asia Pacific MENA (1) Rest of World Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Revenue from external customers 15.0 25.5 29.0 11.6 7.2 2.8 91.1
--------------------------------- ----- ------- --------- ------------- --------- -------------- ------
Year ended 31 December 2021 UK Europe Americas Asia Pacific MENA (1) Rest of World Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Revenue from external customers 27.8 51.8 67.8 21.0 13.9 7.0 189.3
--------------------------------- ----- ------- --------- ------------- --------- -------------- ------
1. Middle East & North Africa
5. Operating profit
Operating profit is stated after the following expenses relating
to continuing operations:
6 months
to
30 June 6 months to Year to 31
2022 30 June 2021 December 2021
Unaudited Unaudited Audited
GBPm GBPm GBPm
Cost of sales 59.9 50.1 101.8
Administrative costs 27.9 22.4 49.0
----------------------------- ----------- -------------- ---------------
87.8 72.5 150.8
Losses on trade receivables 0.1 0.9 1.2
Total operating expenses 87.9 73.4 152.0
----------------------------- ----------- -------------- ---------------
6. Adjusting items
6 months
to
30 June 6 months to Year to 31
2022 30 June 2021 December 2021
Unaudited Unaudited Audited
GBPm GBPm GBPm
Restructuring costs 0.8 0.9 1.2
M&A costs 1.6 0.2 2.4
Refinancing costs 0.2 - 0.2
Share-based payments charge 1.4 4.7 9.2
Revaluation loss on short- and
long-term derivatives 2.1 0.7 0.9
Unrealised operating foreign
exchange loss/(gain) 0.9 (0.9) (1.0)
Amortisation of acquired intangibles 4.1 2.7 5.6
Total adjusting items 11.1 8.3 18.5
-------------------------------------- ------------ --------------- ----------------
The adjustments made are as follows:
-- Restructuring relates to redundancy payments and professional
fees incurred in relation to group reorganisation projects.
-- The M&A costs consist of professional fees incurred in
performing completion activities in relation to acquisitions made
during the period. Acquisitions are detailed in note 14.
-- Refinancing costs consist of legal fees incurred in relation
to amendments made to the facilities agreement during the year.
-- The share-based payments charge is in relation to the s
hare-based compensation plans under which the entity receives
services from employees as consideration for equity instruments
(options) of the Group. The fair value of the employee services
received in exchange for the grant of the options and awards is
recognised as an expense in the income statement. The total amount
to be expensed is determined by reference to the fair value of the
options granted (fair value at the date of grant determined using
the Black-Scholes model for scheme 1 and the Monte Carlo method for
schemes 2 and 4), excluding the impact of any non-market service
and performance vesting conditions (for example, profitability,
sales growth targets and remaining an employee of the entity over a
specified time period). The charge for scheme 1 ended on 31
December 2021 and as such no charge has been recognised in the
period ended 30 June 2022.
-- The revaluation of short- and long-term derivatives relates
to movement in the fair value of the short- and long-term
derivatives detailed in note 10.
-- Unrealised operating foreign exchange loss/(gain) relates to
non-cash exchange losses/(gains) made on operating items.
7. Net finance costs
6 months
to
30 June 6 months to Year to 31
2022 30 June 2021 December 2021
Unaudited Unaudited Audited
GBPm GBPm GBPm
Loan interest cost 8.4 1.5 4.0
Lease interest cost 0.7 0.8 1.5
Other interest cost - - 0.1
9.1 2.3 5.6
--------------------- ------------ --------------- ----------------
Loan interest cost within the period ended 30 June 2022 includes
a non-cash charge of GBP4.0m relating to fair value adjustments on
external borrowings (30 June 2021: GBP0.3m).
8. 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.
6 months to 6 months to Year to 31
30 June 2022 30 June 2021 December 2021
Unaudited Unaudited Audited
Earnings per share attributable to equity holders from continuing
operations:
Basic
Profit for the period attributable to ordinary shareholders of
the parent company (GBPm) 10.6 11.2 24.9
Weighted average number of shares (no' m) 112.2 116.0 113.5
Basic earnings per share (pence) 9.4 9.7 21.9
Diluted
Profit for the period attributable to ordinary shareholders of
the parent company (GBPm) 10.6 11.2 24.9
Weighted average number of shares (no' m) 123.1 125.2 123.0
Diluted earnings per share (pence) 8.6 8.9 20.2
Reconciliation of basic weighted average number of shares to the
diluted weighted average number of shares:
6 months to 6 months to Year to 31
30 June 2022 30 June 2021 December 2021
Unaudited Unaudited Audited
No' m No' m No' m
Basic weighted average number of shares, net of shares held in
Treasury reserve 112.2 116.0 113.5
Share options in issue at end of period, net of shares not paid
up 10.9 9.2 9.5
------------------------------------------------------------------ --------------- --------------- ----------------
Diluted weighted average number of shares 123.1 125.2 123.0
------------------------------------------------------------------ --------------- --------------- ----------------
9. Intangible assets
Customer IP rights
Software relationships Brands and Database Goodwill Total
GBPm GBPm GBPm GBPm GBPm GBPm
Cost
As at 31 December
2021 12.8 55.8 16.2 75.5 302.7 463.0
Additions: Business
combinations 0.8 5.5 9.4 0.4 9.9 26.0
Additions: Separately
acquired 0.6 - - - - 0.6
Foreign currency
retranslation 0.1 - - - - 0.1
As at 30 June
2022 14.3 61.3 25.6 75.9 312.6 489.7
----------------------- --------- --------------- ------- -------------- --------- --------
Amortisation
As at 31 December
2021 (11.0) (32.6) (11.3) (49.5) (10.9) (115.3)
Additions: Business
combinations (0.7) - - - - (0.7)
Charge for the
period (0.4) (2.5) (0.4) (1.3) - (4.6)
Foreign currency
retranslation (0.1) - - (0.1) - (0.2)
As at 30 June
2022 (12.2) (35.1) (11.7) (50.9) (10.9) (120.8)
----------------------- --------- --------------- ------- -------------- --------- --------
Net book value
As at 30 June
2022 2.1 26.2 13.9 25.0 301.7 368.9
As at 31 December
2021 1.8 23.2 4.9 26.0 291.8 347.7
----------------------- --------- --------------- ------- -------------- --------- --------
10. Derivative assets and liabilities
30 June 30 June 31 December
2022 2021 2021
Unaudited Unaudited Audited
GBPm GBPm GBPm
Short-term derivative assets - 0.6 0.6
Short-term derivative liabilities (1.9) (0.2) (0.3)
Long-term derivative liabilities - - (0.1)
----------------------------------- ------------ ------------ --------------
Net derivative (liability)/asset (1.9) 0.4 0.2
----------------------------------- ------------ ------------ --------------
The Group uses derivative financial instruments in the form of
currency forward contracts to reduce its exposure to fluctuations
in foreign currency exchange rates.
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 period was an
expense of GBP2.1m to the income statement (30 June 2021: expense
of GBP0.7m).
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 2022, the only financial instruments measured at
fair value were derivative financial assets/ liabilities and these
are classified as Level 2.
Type of Financial Instrument Measurement technique Main assumptions Main inputs used
at Level 2
------------------------------ ---------------------- ------------------------------ ------------------------------
Derivative assets and Present-value method Determining the present value Observable market exchange
liabilities of financial instruments as rates
the current value of future
cash
flows, taking into account
current market exchange rates
11. Borrowings and Lease Liabilities
30 June 30 June 31 December
2022 2021 2021
Unaudited Unaudited Audited
GBPm GBPm GBPm
Short-term lease liabilities 4.4 4.0 4.1
Short-term borrowings 5.0 5.0 5.0
Current liabilities 9.4 9.0 9.1
------------------------------ ------------ ------------ --------------
30 June 30 June 31 December
2022 2021 2021
Unaudited Unaudited Audited
GBPm GBPm GBPm
Long-term lease liabilities 27.4 30.0 29.3
Long-term borrowings 227.0 68.6 195.2
Non-current liabilities 254.4 98.6 224.5
----------------------------- ------------ ------------ --------------
Term loan and RCF
In May 2020, the Group announced that it had agreed to increase
its current banking facilities with NatWest Group, HSBC and Bank of
Ireland, extending the current maturity to April 2023 (previously
April 2022). The arrangements increased the total committed
facility to GBP145.5m (previously GBP100m), plus a further
uncommitted accordion facility of GBP75m. The committed facility
comprised a term loan of GBP50m and a revolving credit facility
(RCF) of GBP95.5m.
In September 2021, the Group amended and restated its facilities
agreement in order to convert its uncommitted accordion facility of
GBP75m into a committed incremental RCF. Silicon Valley Bank became
an additional lender as part of the syndicate. No other changes to
the repayment terms agreed in May 2020 were made.
In December 2021, the Group made a further amendment and
restatement to its facilities agreement, increasing the RCF to
GBP115.5m (previously GBP95.5m) to support future M&A
activities. No other changes to the repayment terms agreed in May
2020 were made.
In June 2022, the Group made a further amendment and restatement
to its facilities agreement to extend the maturity for 12 months
from April 2023 to April 2024. In accordance with IFRS9, Management
has performed a comparison of the fair value of the new debt with
the old debt to determine whether there has been a substantial
modification requiring de-recognition. The assessment concluded
that there has not been a substantial modification.
The term loan is repayable in quarterly instalments, with total
repayments due in the next 12 months of GBP5.0m. The outstanding
term loan balance as at 30 June 2022 is GBP38.8m, with a fair value
in accordance with IFRS9 of GBP38.8m. As at 30 June 2022, the Group
had drawn down GBP115.5m of the RCF and GBP75.0m of the incremental
RCF (former accordion facility), with a total fair value in
accordance with IFRS9 of GBP193.2m. Interest is currently charged
on the term loan, drawn down RCF and incremental RCF (former
accordion facility) at a rate of 3.25% over the Sterling Overnight
Interbank Average Rate (SONIA). Loan interest cost within the
period ended 30 June 2022 includes a non-cash charge of GBP4.0m
relating to fair value adjustments on external borrowings (30 June
2021: GBP0.3m).
Lease payments not recognised as a liability
The Group has elected not to recognise a lease liability for
short term leases (leases with an expected term of 12 months or
less) or for leases of low value assets. Payments made under such
leases are expensed on a straight-line basis. In addition, certain
variable lease payments are not permitted to be recognised as lease
liabilities and are expensed as incurred. The expense relating to
payments not included in the measurement of a lease liability is
GBPnil for the period ended 30 June 2022 (30 June 2021:
GBPnil).
The changes in the Group's borrowings can be classified as
follows:
Short-term Long-term
Short-term Long-term lease lease
borrowings borrowings liabilities liabilities Total
GBPm GBPm GBPm GBPm GBPm
As at 1 January 2022 5.0 195.2 4.1 29.3 233.6
------------------------------------------ ------------ ------------ -------------- ------------- ------
Cash-flows:
* Repayment (2.5) - (2.9) - (5.4)
* Proceeds - 31.0 - - 31.0
Non-cash:
* Capitalisation of loan fees - (0.7) - - (0.7)
* Fair value adjustments - 4.0 - - 4.0
* Lease additions - - 0.3 - 0.3
* Lease liabilities - - 0.6 0.4 1.0
* Reclassification 2.5 (2.5) 2.3 (2.3) -
As at 30 June 2022 5.0 227.0 4.4 27.4 263.8
------------------------------------------ ------------ ------------ -------------- ------------- ------
12. Equity
Share capital
Allotted, called up and
fully paid:
31 December
30 June 2022 30 June 2021 2021
Unaudited Unaudited Audited
No'000s GBP000s No'000s GBP000s No'000s GBP000s
Ordinary shares (1/14(th)
pence) 118,303 84 118,303 84 118,303 84
Deferred shares of GBP1.00
each 100 100 100 100 100 100
---------------------------- -------- -------- -------- -------- -------- --------
Total allotted, called
up and fully paid 118,403 184 118,403 184 118,403 184
---------------------------- -------- -------- -------- -------- -------- --------
Share Purchases
During the period the Group's Employee Benefit Trust purchased
an aggregate amount of 1.3m shares at a total market value of
GBP17.7m. The purchased shares will be held 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. The ordinary shares carry
no right to fixed income and each share carries the right to one
vote at general meetings of the Company. The 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.
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 final dividend for 2021 was 13.2 pence per ordinary share
and was paid in April 2022. The Board has announced an interim
dividend of 7.7 pence per ordinary share. The interim dividend will
be paid on 7 October 2022 to shareholders on the register at the
close of business on 9 September 2022. The ex-dividend date will be
on 8 September 2022.
Treasury reserve
The treasury reserve represents the cost of shares held 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.
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.
Share-based payments
Scheme 1
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, needed to exceed certain targets. Whilst the
final financial target for the colleague share option scheme
(scheme 1) was met with the 2021 results, the Remuneration
Committee have not yet approved the vesting of the scheme because
of the volatility of public markets, however we intend to conclude
this in the second half. Once approved, the employees within this
scheme will have the opportunity to vest their options (total of
6.5 million shares). Scheme 1 will then be closed.
Scheme 2
In October 2019 the Group created and announced a new share
option scheme and granted the first options under the scheme on 31
October 2019 to certain senior employees. Each option granted
converts to one ordinary share on exercise. A participant may
exercise their options subject to employment conditions and
performance targets being met. For these options to be exercised
the Group's Total Shareholder Return must exceed an annual rate of
16% over the vesting period.
Scheme 4
In October 2021 the Group created the 2021 share option scheme
(scheme 4). Scheme 4 is targeted at management and senior
colleagues below the Executive Management Committee level. We have
aligned the targets of Scheme 4 to those of Scheme 2, to ensure
consistency across schemes. Performance conditions will be based on
achievement of TSR targets over a 5-year period, with a phased
performance period - with partial vesting in years 3, 4 and 5.
During the six months to 30 June 2022, a total of 1.8 million
options were awarded within this scheme.
The total charge recognised for these schemes during the six
months to 30 June 2022 was GBP1.4m (30 June 2021: GBP4.7m). The
awards of the schemes are settled with ordinary shares of the
Company.
13. Related party transactions
Mike Danson, GlobalData's Chief Executive Officer, owned 63.1%
of the Company's ordinary shares as at 30 June 2022, therefore is
the ultimate controlling party. Mike Danson owns a number of
businesses that interact with GlobalData Plc, largely in part as a
result of past M&A transactions (GlobalData Holdings in 2016
and Research Views Limited in 2018).
It is the intention of the Board and management to reduce and
eventually eliminate the number of related party transactions and
wind down the service agreements that are currently in place. We
expect this to conclude in 2023. The Related Party Transactions
Committee, consisting of four Non-Executive directors, oversees
related party transactions and reviews to ensure that the
transactions are in the best interest of GlobalData and its
stakeholders, and that the transactions are recorded and disclosed
on an arms-length basis.
Accommodation
GlobalData Plc sub-leases office space to other companies owned
by Mike Danson. The total sub-lease income for the six months ended
30 June 2022 was GBP0.1m (30 June 2021: GBP0.2m).
Loan to Progressive Trade Media Limited
The final instalment of GBP0.9m which was outstanding in
relation to the initial GBP4.5m loan issued was repaid in full on
31 January 2022. This loan agreement is now fully settled and
satisfied.
Revenue contract containing IP sharing clause
The ongoing data services agreement with NS Media Group Limited
("NSMGL"), a related party by virtue of common ownership, completed
its second year of the 5-year service contract signed in June 2020.
The agreed suite of data services provided to NSMGL have been
contracted on terms equivalent to those that prevail in arm's
length transactions. In the six months ending 30 June 2022, the
total revenue generated from this contract was GBP0.5m and the net
contribution generated was GBP0.4m. Each year's fixed fees are
invoiced quarterly in advance.
Balances Outstanding
As at 30 June 2022, the total balance receivable from NSMGL was
GBPnil. There is no specific credit loss provision in place in
relation to this receivable and the total expense recognised during
the period in respect of bad or doubtful debts was GBPnil.
The Group has taken advantage of the exemptions contained within
IAS24: Related Party Disclosures from the requirement to disclose
transactions between Group companies as these have been eliminated
on consolidation. There were no balances owing to or from related
parties.
Directors and Key Management Personnel
The remuneration of Directors is disclosed within the Directors'
Remuneration Report within the Annual Report and Accounts for the
year ended 31 December 2021.
During the year ended 31 December 2021, our Chief Financial
Officer, Graham Lilley received a pay increase from GBP200,000 to
GBP250,000 which the Remuneration Committee felt reflected both a
fair salary based upon similar sized company benchmarks and
additional responsibility in relation to risk management of the
Group.
14. Acquisitions
Cash Cost of Acquisitions
The cash cost of acquisitions comprises:
Period to 30 June 2022
GBPm
Acquisition of MBI:
Cash consideration 22.9
Cash acquired (3.5)
Acquisition of LMC: Working Capital Adjustment 0.7
20.1
------------------------------------------------ -----------------------
Media Business Insight Holdings Limited
On 9 June 2022, the Group acquired 100% of the share capital of
Media Business Insight Holdings Limited ("MBI"), for cash
consideration of GBP22.9m. MBI and its subsidiaries had a bank
balance of GBP3.5m on the acquisition balance sheet, therefore the
net cash cost of the acquisition to the Group was GBP19.4m. The
companies within this group specialise in leading content, insight
and events for the creative media industry.
The amounts recognised for each class of assets and liabilities
at the acquisition date were as follows:
Carrying Value Fair Value Adjustments Fair Value
GBPm GBPm GBPm
Intangible assets consisting of:
Trade names - 9.4 9.4
Customer relationships - 5.5 5.5
Database - 0.4 0.4
Net assets acquired consisting of:
Property, plant and equipment 0.1 - 0.1
Intangible assets 0.9 (0.8) 0.1
Cash and cash equivalents 3.5 - 3.5
Trade and other receivables 2.8 (0.1) 2.7
Trade and other payables (4.1) 0.6 (3.5)
Corporation tax - (0.5) (0.5)
Deferred tax - (4.0) (4.0)
Fair value of net assets acquired 3.2 10.5 13.7
------------------------------------------- ----------------- ------------------------- -----------
The goodwill recognised in relation to the acquisition is as
follows:
Fair Value
GBPm
Consideration 22.9
Less net assets acquired (13.7)
----------------------------- -------
Goodwill 9.2
----------------------------- -------
In line with the provision of IFRS3, 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. The goodwill
that arose on the combination can be attributed to the assembled
workforce, know-how and research methodology. The fair values of
the identified intangible assets were calculated in line with the
policies detailed within the Group's Annual Report and Accounts for
the year ended 31 December 2021.
In the period ended 30 June 2022, the Group incurred legal and
professional expenses of GBP0.8m in relation to the acquisition. In
the period from the date of acquisition to 30 June 2022, the trade
of MBI generated revenues of GBP0.5m and EBITDA loss of
GBP0.1m.
The amount of goodwill which is expected to be deductible for
tax purposes is GBPnil.
TS Lombard
We have entered into an agreement to purchase TS Lombard, an
economic research firm. The company provides economic and political
research, with a particular strength in emerging markets and the
acquisition will give the Group further access to the asset
management sales channel, to sell its full product suite to. The
transaction has received regulatory approval and is expected to
complete during Q3 2022, and the HY 2022 results do not include any
transactions in relation to this proposed acquisition.
15. Contingent liabilities
As at 31 December 2021, a subsidiary of GlobalData Plc had
ongoing claims with former employees. The potential obligation was
categorised as a contingent liability as at 31 December 2021 and as
such a liability was not recognised in the financial statements of
the Group at that time. During the first half of 2022, these
disputes were settled, with a total cost to the group of
GBP0.1m.
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 Joint Broker
J.P. Morgan Cazenove
25 Bank Street
Canary Wharf
London
E14 5JP
Joint Broker
Panmure Gordon
One New Change
London
EC4M 9AF
Joint Broker
Numis Securities
45 Gresham Street
London
EC2V 7BF
Financial PR LLP
FTI Consulting
200 Aldersgate
Aldersgate Street
London
EC1A 4HD
Lawyers
Reed Smith
20 Primrose Street
London
EC2A 2RS
Auditor
Deloitte LLP
2 New St Square
London
EC4A 3BZ
Registrars
Link Group
10th Floor, Central Square
29 Wellington Street
Leeds
LS1 4DL
Bankers
NatWest Group
280 Bishopsgate
London
EC2M 4RB
Bankers
HSBC UK Bank Plc
1 Centenary Square
Birmingham
B1 1HQ
Registered number
Company No. 03925319
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END
IR UKRWRUWUBUAR
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