TIDMDATA
RNS Number : 0944U
GlobalData PLC
27 July 2020
27 July 2020
GlobalData Plc
Unaudited Interim Report For The Six Months Ended 30 June
2020
"Sustained strong performance, with growth in earnings and cash
flow"
Financial Highlights
-- Subscription revenue grew by 7% (FY 2019: 10%), offset by
some events revenue being postponed or cancelled, with overall
Group revenue marginally down by 2% to GBP86.7m (30 June 2019:
GBP88.5m)
-- Increase in operating profit of 53% to GBP11.5m (30 June
2019: GBP7.5m). Operating profit margin increased to 13% (30 June
2019: 8%)
-- Increase in Adjusted EBITDA (2) by 12% to GBP27.2m (30 June
2019: GBP24.2m), with progression in Adjusted EBITDA margin (2) to
31% (30 June 2019: 27%)
-- Statutory profit before tax increased by 79% to GBP9.3m (30
June 2019: GBP5.2m). Adjusted profit before
tax (1) increased to GBP21.2m (30 June 2019: GBP19.5m)
-- Deferred revenue increased by 4% to GBP80.6m (30 June 2019: GBP77.2m)
-- Cash flow from operations increased by 18% to GBP41.1m (30
June 2019: GBP34.7m), which represents 151% of Adjusted EBITDA (30
June 2019: 143%)
-- Interim dividend increase of 8% to 5.4 pence per ordinary
share (30 June 2019: 5.0 pence), in line with growth of Adjusted
EBITDA (pre IFRS 16).
Operational Highlights
-- Resilient and agile response to COVID-19 pandemic, with the
Group benefitting from visible, recurring revenues and
demonstrating the advantage of our central operating model and
single product platform.
-- Rapid deployment of industry specific COVID-19 data,
analytics and insights helped our clients, and Communities,
understand their markets and better navigate through these
unprecedented times.
-- Completed the re-financing of our debt facility, with
GBP145.5m of committed facility and a further GBP75m uncommitted
accordion facility. The new banking arrangements, together with
cash reserves, give the Group liquidity in excess of GBP100m for
further acquisitions.
Mike Danson, Chief Executive Officer of GlobalData Plc,
commented:
"The first half results reflect sustained performance across our
subscription based data and analytics business, driven by growing
demand for our trusted intelligence products.
Although COVID-19 was an unprecedented challenge which posed
abnormal trading conditions, our robust business model enabled
continued revenue growth across our subscription business and
earnings growth for the Group. Given the circumstances, the
performance of the Group in the first half was strong, with growth
in almost all financial metrics, and we are confident that with our
strong financial position and robust operating model, we are well
positioned to deliver sustainable growth beyond 2020."
(1) Adjusted profit before tax is statutory profit before tax
adjusted for costs associated with acquisitions, restructuring of
the Group, share based payments, impairment, unrealised operating
exchange rate movements, impact of foreign exchange contracts and
amortisation of acquired intangibles. Details of adjusted items
disclosed in note 6.
(2) Adjusted EBITDA is EBITDA adjusted for costs associated with
acquisitions, restructuring of the Group, share based payments,
impairment, unrealised operating exchange rate movements and impact
of foreign exchange contracts. Adjusted EBITDA margin is Adjusted
EBITDA as a percentage of revenue. Details of adjusted items
disclosed in note 6.
ENQUIRIES
GlobalData Plc 0207 936 6400
Bernard Cragg (Chairman), Mike Danson (Chief
Executive Officer) and Graham Lilley (Chief
Financial Officer)
N+1 Singer 0207 496 3000
James Maxwell and Justin McKeegan
J.P Morgan Cazenove 0207 742 4000
Bill Hutchings
Hudson Sandler 0207 796 4133
Nick Lyon
During the first half, our colleagues at GlobalData have shown
their commitment, talent and innovation, which has always
characterised our brand, in transitioning seamlessly into, what
could be, the 'new normal'. I would like to thank our colleagues
globally, for their professionalism and dedication in such trying
times.
In the past six months, the world has changed. We have seen a
threefold increase in the usage of our Intelligence Centers, driven
in part by our proactive response to COVID-19 and the uncertainty
it has placed into global markets. We are confident that the
accelerated growth in demand for our products and services will
continue and the unique platform we have built is well placed to
seize the opportunity. The first half results reflect sustained
performance across our business.
Key Topics and Achievements
Response to COVID-19 validated advantage of our strategy and
operating model
-- In many ways, our operating model and product strategy were
validated by our response to COVID-19. As a result of our single
product platform and centralised management of resources, we were
able to rapidly deploy a significant amount of COVID-19 data,
analytics, and insights across all of our market sectors.
-- Our robust business model has maintained growth across our
subscription business and delivered growth in earnings and cash
flow. The ability to leverage the depth of our core data alongside
new, alternative datasets has meant that we have been able to
demonstrate the GlobalData advantage versus the competition.
-- Operationally, whilst following all relevant government
guidelines in the countries where we operate, the digital nature of
our business has meant that we were able to transition smoothly to
a 'work from home' model in relatively short order. We have
successfully kept the business fully operational, with no
interruption of service and importantly, no colleagues placed on
furlough.
Global trends reinforce attractiveness of the information
services market
-- The COVID-19 pandemic has been a challenging and uncertain
period. It has meant companies across all markets have been
increasing their usage of data to better understand their risks and
opportunities.
-- Organisations continue to increase their reliance, and spend,
on information services as they see the greater value and benefits
from adoption, and further embed and integrate them into their
business processes and technologies. As a result of this, we
continue to see increased usage of our Intelligence Centers, with a
threefold rise over the past year.
-- Alongside the growing demand for information services, the
revenue visibility, operational gearing, and significant cash flow
conversion of our subscription-based business model, underpin the
long-term attractiveness and positive outlook of our market.
Successfully progressed and executed against our 'Growth
Optimisation Plan'
-- The Growth Optimisation Plan ("GOP") is designed to deliver a
range of key initiatives across our strategic priorities. The GOP
is ever more important given the macro-economic backdrop.
-- With the objective of creating a scalable, high-performance
environment, we are continuing to build out our GlobalData "Sales
Best Practice Playbook", which will create and standardise the
best-practice tools, processes, governance, and training to be
provided to our global salesforce.
Increasing investment and innovation to further strengthen our
position
-- We look to increase investment in existing and new products,
increase investment in sales and marketing, whilst our refinanced
facilities give us the opportunity to increase investment in
M&A.
-- Technology is at the heart of our business and the GOP, with
our focus on deploying software which transforms our ways of
working and creates an agile, high-performance company. We have
already made significant progress in implementing best in class
technologies in sales and customer success, and will now turn our
attention to other functional areas.
-- We deferred the planned recruitment drive to expand our sales
teams across the globe, partly to focus management on managing the
business through COVID-19 and to reflect on our cost base but
mainly because of the risk around on-boarding and training in a
"work-from-home" environment. We are now proceeding with our
recruitment plans in the second half.
Current Trading and Outlook
The Group's robust business model has meant that the Group has
been able to maintain a good level of financial performance in the
first half, despite the significant uncertainty around the economic
impact of the pandemic across the globe.
The first half performance of the Group has seen a significant
increase in content usage from our clients and strong renewal
rates, which in part is due to our response to COVID-19. The large
volume of timely and relevant COVID-19 content has truly helped our
clients navigate through these difficult times and is a
demonstration of the agility of our operating model. We remain
confident in our ability to deliver growth and strengthen our
position when the COVID-19 situation begins to subside and
businesses begin to normalise.
The Group's significant cash reserves at 30 June 2020 of
GBP22.0m (30 June 2019: GBP16.6m) and the new facilities agreed in
the first half of GBP145.5m, give the Group over GBP100m of
immediate cash liquidity.
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 5.4 pence per share (30 June 2019:
5.0 pence). The interim dividend will be paid on 2 October 2020 to
shareholders on the register at the close of business on 28 August
2020.
We are confident about the outlook and prospects of the Group
for the second half and believe we have a good opportunity to
accelerate into 2021.
Mike Danson
Chief Executive Officer
27 July 2020
Chief Financial Officer's Review
GBPm Unaudited 6 months to Unaudited 6 months to Audited Year Ended 31 December
June 2020 June 2019 2019
Restated Restated
Revenue 86.7 88.5 178.2
Operating profit 11.5 7.5 12.7
Adjusting items
Depreciation 3.2 1.9 4.8
Amortisation of acquired
intangible assets 6.9 8.2 16.3
Amortisation of software 0.6 0.5 0.9
Share based payments charge 1.5 4.5 10.9
Restructuring and deal costs 0.4 0.6 0.8
Costs of settlement of pension
liabilities - - 2.2
Revaluation of short and
long-term derivatives 1.7 (0.3) (1.7)
Unrealised operating foreign
exchange loss 1.0 0.7 1.4
M&A costs 0.4 0.6 1.5
Adjusted EBITDA 27.2 24.2 49.8
---------------------- ----------------------
Adjusted EBITDA margin (1) 31% 27% 28%
---------------------------------- ---------------------- ---------------------- ----------------------------------
Adjusted EBITDA 27.2 24.2 49.8
Depreciation (3.2) (1.9) (4.8)
Amortisation of software (0.6) (0.5) (0.9)
Finance costs (2.2) (2.3) (4.7)
---------------------------------- ---------------------- ---------------------- ----------------------------------
Adjusted Profit Before Tax 21.2 19.5 39.4
---------------------------------- ---------------------- ---------------------- ----------------------------------
Tax (3.5) (3.0) (3.2)
---------------------------------- ---------------------- ---------------------- ----------------------------------
Adjusted Profit After Tax 17.7 16.5 36.2
---------------------------------- ---------------------- ---------------------- ----------------------------------
Cash flow analysis
--------------------------------------------- ------- ------ ------
Cash flow generated from operations 41.1 34.7 53.7
Cash flow conversion % (2) 151% 143% 108%
------ ------
Earnings performance
--------------------------------------------- ------- ------ ------
Profit After Tax 5.8 2.2 4.8
Adjusted Profit After Tax 17.7 16.5 36.2
Basic Shares 117.8 116.7 116.5
Diluted Shares 126.1 123.5 125.7
Attributable to equity holders:
Basic earnings per share (pence) 4.9 1.9 4.1
Diluted earnings per share (pence) 4.6 1.8 3.8
Adjusted basic earnings per share (pence) 15.0 14.1 31.1
Adjusted diluted earnings per share (pence) 14.0 13.4 28.8
---------------------------------------------- ------ ------ ------
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 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 restatement is in relation to the
accounting treatment of the Pension buy-in and classification of
other income as disclosed in note 1. Within note 2, we disclose the
rationale for the adjusting items in detail.
(1) Adjusted EBITDA margin is defined as: Adjusted EBITDA as a
percentage of revenue.
(2) Cash flow conversion is defined as: Cash flow generated from
operations divided by Adjusted EBITDA
Key Achievements
-- Revenue of GBP87m: Subscription revenue grew by 7% (FY 2019:
10%). In total, excluding the events business, revenue grew by 5%,
a reflection of the resilience of our subscription based operating
model. The impact of some events being postponed or cancelled has
resulted in a slight decline in absolute revenue, albeit, with some
of this revenue expected to be generated in the second half.
-- Profit Before Tax: The profit before tax for the period has
increased by 79% to GBP9.3m (30 June 2019: GBP5.2m) driven by
improved performance at both operating profit and Adjusted EBITDA
levels.
-- Adjusted EBITDA Margin: Despite the slight decline in
revenues, we have further expanded margins from 27% to 31%
reflecting a delay in investment spend and cost reductions as a
direct result of COVID-19. Our profitability margins have improved
at both operating profit and profit before tax.
-- New Banking Facilities: The Group now has enhanced banking
facilities, which along with cash reserves, give the Group over
GBP100m to fund potential M&A targets.
Revenue
Revenues decreased by 2% to GBP86.7m (30 June 2019: GBP88.5m).
The key driver of the reduced revenue was the impact of the
limitations on travel and group gatherings; resulting in a
reduction in events revenue of GBP6.7m.
Excluding, the impact on Event revenue, revenue grew by 5%
(driven by subscription revenue which grew by 7%), driven in the
main by deferred revenue growth from 2019. We have seen strong
renewal rates during the first half and whilst closing new business
orders was more difficult between March and May, we did see some
upturn in June. Movements in currency had less than 1% impact
overall.
Revenue from events, whilst an important platform for insight
and interaction with our Communities, accounts for less than 10% of
the Group's revenue.
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 these
measures internally. Adjusted EBITDA increased by 12% to GBP27.2m
(30 June 2019: GBP24.2m), which is reflective of largely
maintaining the revenue base and benefitting from cost reductions
as a direct result of COVID-19. The reductions were in
discretionary spend, travel costs and GBP1.7m saved as result of
postponed/ cancelled events.
Our Adjusted EBITDA margin was 31% (30 June 2019: 27%), as we
continue to progress towards our stated margin ambition to exceed
35% over the five-year term.
Adjusted EBITDA benefited from the impact of IFRS 16, lease
accounting, by GBP3.1m (30 June 2019: GBP1.9m). The impact of
IFRS16 improved margins by 3 percentage points to 31% (30 June
2019: 2 percentage points to 27%).
Impact of COVID-19
The resilient nature of our recurring subscription revenue model
has meant that revenues have largely been sheltered from the impact
of the pandemic. However, our events performance has been affected
by the limitations on travel and group gatherings, resulting in a
reduction in events revenue of GBP6.7m, offset by savings made on
event costs of GBP1.7m.
Further cost savings have been achieved in the first half due to
the travel restrictions, resulting in a GBP1.2m reduction in
costs.
The Directors have reviewed sensitivities and modelled different
scenario outcomes as a result of COVID-19 on the impairment, going
concern and long term viability assumptions of the Group. The
current trading and outlook support the asset valuations of the
Group and we remain confident in the short term liquidity and in
the longer term viability of the business.
Impact of Currency
Despite the relative volatility of the currency markets, the
impact on the numbers versus the previous year is quite limited.
Overall, the movements in currency benefitted the Group revenue by
GBP0.8m (less than 1%), driven largely by USD movements (GBP0.8m),
offset by minor movements elsewhere.
From a cost perspective, it had an even more limited effect of
less than GBP0.1m. There was a benefit from USD movements of
GBP0.4m, offset by other currency movements (mainly Indian
Rupee).
Profit Before Tax
The profit before tax for the period has increased by 79% to
GBP9.3m (30 June 2019: GBP5.2m) driven by improved performance at
both operating profit and Adjusted EBITDA levels.
Tax
Tax has been calculated using the forecast effective rate
applicable to expected full year earnings. The effective rate of
25% (30 June 2019: 31%) is based on the standard UK tax rate of 19%
plus a 4% adjustment for tax at overseas rates. The remaining
difference broadly relates to tax adjustments for non-deductible
items. The higher effective rate in 2019 was impacted by one off
items, including the release of accrued withholding tax deemed
irrecoverable.
Deferred revenue
Compared with the balance as at 30 June 19, deferred revenue has
grown by 4%. The balance is impacted by events revenue which was
invoiced but the event could not take place. Without the impact of
these additional balances, deferred revenue is largely flat.
However, when taking into account forward revenues un-invoiced at
the period end, underlying growth is 3%.
Cash Generation
Due to the seasonality of subscription orders and the upfront
invoicing model, cash generation in the first half was 151% of
Adjusted EBITDA (30 June 2019: 143%). The cash performance was
driven by strong bookings at the end of 2019, which have been
collected in the first half plus a reduction in cash outgoings as a
result of travel, events and discretionary spend.
Net Debt (1)
Since the last reporting period, December 2019, net debt has
reduced from GBP55.3m to GBP41.2m. The reduction has largely been
due to the increase in cash flow from operations of GBP41.1m, a
year on year increase of GBP6.4m (18%).
The cash flow from operations has been offset by dividend
payments (GBP11.6m vs 2019: GBP8.8m), purchase of own shares
(GBP6.0m vs GBP1.5m), taxes (GBP2.4m vs 2019: GBP5.5m), capital
expenditure (GBP2.1m vs 2019: GBP0.5m), leasing costs (GBP3.1m vs
GBP2.1m) and interest (GBP1.2m vs 2019: GBP1.6m).
New Facilities
We are pleased we have completed the refinancing of our debt in
May, to expand our existing headroom. We now have a committed
facility of GBP145.5m, of which GBP65.5m covered existing
indebtedness. The deal also includes a further uncommitted
accordion facility of GBP75m.
(1) We define net debt as borrowings and cash and cash
equivalents
Independent review report to GlobalData Plc
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 2020 which comprises the consolidated
income statement, the consolidated statement of comprehensive
income, the consolidated statement of financial position, the
consolidated statement of changes in equity, the consolidated
statement of cash flows and related notes 1 to 14 . We have read
the other information contained in the half-yearly financial report
and considered whether it contains any apparent misstatements or
material inconsistencies with the information in the condensed set
of financial statements.
This report is made solely to the company in accordance with
International Standard on Review Engagements (UK and Ireland) 2410
"Review of Interim Financial Information Performed by the
Independent Auditor of the Entity" 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.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the directors. The directors are responsible
for preparing the half-yearly financial report in accordance with
the AIM Rules of the London Stock Exchange.
As disclosed in note 2, the annual financial statements of the
group are prepared in accordance with IFRSs as adopted by the
European Union. The condensed set of financial statements included
in this half-yearly financial report has been prepared in
accordance with International Accounting Standard 34 "Interim
Financial Reporting," as adopted by the European Union.
Our responsibility
Our responsibility is to express to the Company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410 "Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity" 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.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 30
June 2020 is not prepared, in all material respects, in accordance
with International Accounting Standard 34 as adopted by the
European Union and the AIM Rules of the London Stock Exchange.
Deloitte LLP
Statutory Auditor
London, England
27 July 2020
Consolidated Income Statement
Notes 6 months 6 months Year to
to 30 to 30 31 December
June 2020 June 2019 2019
Unaudited Unaudited Audited
Restated Restated
(1) (1)
Continuing operations GBPm GBPm GBPm
Revenue 4 86.7 88.5 178.2
Operating expenses 5 (75.8) (81.6) (166.8)
Other income 0.6 0.6 1.3
-------------------------------------- ------ ----------- ----------- -------------
Operating profit 11.5 7.5 12.7
Net finance costs 7 (2.2) (2.3) (4.7)
Profit before tax 9.3 5.2 8.0
Income tax expense (3.5) (3.0) (3.2)
-------------------------------------- ------ ----------- ----------- -------------
Profit for the period 5.8 2.2 4.8
-------------------------------------- ------ ----------- ----------- -------------
Attributable to:
Equity holders of the parent 5.8 2.2 4.8
Earnings per share attributable to
equity holders:
Basic earnings per share (pence) 8 4.9 1.9 4.1
Diluted earnings per share (pence) 8 4.6 1.8 3.8
-------------------------------------- ------ ----------- ----------- -------------
Reconciliation to Adjusted EBITDA(2)
:
Operating profit 11.5 7.5 12.7
Adjusting items 6 11.9 14.3 31.4
Amortisation of software 0.6 0.5 0.9
Depreciation 3.2 1.9 4.8
-------------------------------------- ------ ----------- ----------- -------------
Adjusted EBITDA(2) 27.2 24.2 49.8
-------------------------------------- ------ ----------- ----------- -------------
The accompanying notes form an integral part of this financial
report.
(1) Restatement
The comparative periods' results have been restated for the
following:
-- to include other income above operating profit, reflecting
that the income is in relation to operations. Profit before tax and
Adjusted EBITDA is unaffected for both comparative periods.
-- the accounting treatment of the pension buy-in reflecting the
re-measurement of the pension liabilities as a cost through the
Income Statement of GBP2.2m, previously the net re-measurement of
assets and liabilities was reported through the Statement of
Comprehensive Income. The restatement has no impact on the Adjusted
EBITDA of the prior period.
Full disclosure included within note 1.
(2) We define Adjusted EBITDA as EBITDA adjusted for costs
associated with acquisitions, restructuring of the Group, share
based payments, impairment, unrealised operating exchange rate
movements and 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 30 June 2020 6 months to 30 June 2019 Year to 31 December 2019
Unaudited Unaudited Audited
Restated (1)
GBPm GBPm GBPm
Profit for the period 5.8 2.2 4.8
Other comprehensive income
Items that will be classified
subsequently to profit or loss:
Net exchange gains on translation of
foreign entities 0.6 0.5 -
Items that will not be classified
subsequently to profit or loss:
Re-measurement of pension assets - - 0.9
------------------------------------- ------------------------- ------------------------- -------------------------
Other comprehensive gain, net of tax 0.6 0.5 0.9
------------------------------------- ------------------------- ------------------------- -------------------------
Total comprehensive gain for the
period 6.4 2.7 5.7
------------------------------------- ------------------------- ------------------------- -------------------------
Attributable to:
------------------------------ ---- ---- ----
Equity holders of the parent 6.4 2.7 5.7
The accompanying notes form an integral part of this financial
report.
(1) The comparative period has been restated in relation to the
treatment of the pension buy-in, full disclosure included within
note 1.
Consolidated Statement of Financial Position
Notes 30 June 30 June 31 December
2020 2019 2019
Unaudited Unaudited Audited
GBPm GBPm GBPm
Non-current assets
Property, plant and equipment 46.4 38.1 47.4
Intangible assets 9 244.9 257.6 250.1
Trade and other receivables 14 0.9 1.9 1.9
Deferred tax assets 8.2 6.0 8.7
------------------------------------ ---------- ----------- ----------- ------------
300.4 303.6 308.1
------------------------------------ ---------- ----------- ----------- ------------
Current assets
Trade and other receivables 41.8 46.2 45.8
Short-term derivative assets 10 0.1 0.5 0.9
Cash and cash equivalents 22.0 16.6 11.2
------------------------------------ ---------- ----------- ----------- ------------
63.9 63.3 57.9
------------------------------------ ---------- ----------- ----------- ------------
Total assets 364.3 366.9 366.0
------------------------------------ ---------- ----------- ----------- ------------
Current liabilities
Trade and other payables (107.0) (98.8) (96.1)
Short-term borrowings 11 (5.0) (6.0) (6.0)
Short-term lease liabilities 11 (4.2) (2.7) (3.9)
Current tax payable (4.2) (2.8) (1.9)
Short-term derivative liabilities 10 (1.0) (0.9) (0.1)
Short-term provisions (0.2) (0.2) (0.1)
------------------------------------ ---------- ----------- ----------- ------------
(121.6) (111.4) (108.1)
------------------------------------ ---------- ----------- ----------- ------------
Net current liabilities (57.7) (48.1) (50.2)
------------------------------------ ---------- ----------- ----------- ------------
Non-current liabilities
Long-term provisions (0.5) (0.5) (0.5)
Deferred tax liabilities (4.4) (6.1) (4.8)
Long-term lease liabilities 11 (38.8) (33.7) (40.7)
Long-term borrowings 11 (58.2) (67.9) (60.5)
------------------------------------ ---------- ----------- ----------- ------------
(101.9) (108.2) (106.5)
------------------------------------ ---------- ----------- ----------- ------------
Total liabilities (223.5) (219.6) (214.6)
------------------------------------ ---------- ----------- ----------- ------------
Net assets 140.8 147.3 151.4
------------------------------------ ---------- ----------- ----------- ------------
Equity
Share capital 12 0.2 0.2 0.2
Share premium account 9.0 0.7 0.7
Treasury reserve (3.6) (9.0) (11.0)
Other reserve (37.1) (37.1) (37.1)
Merger reserve 163.8 163.8 163.8
Foreign currency translation
reserve 1.4 1.3 0.8
Retained profit 7.1 27.4 34.0
------------------------------------ ---------- ----------- ----------- ------------
Equity attributable to equity
holders of the parent 140.8 147.3 151.4
------------------------------------ --- ------ ------------------------ --------------
The accompanying notes form an integral part of this financial
report.
Consolidated Statement of Changes in Equity
Share Share Other Foreign Merger Retained Equity
capital premium reserve currency reserve Treasury profit attributable
account translation reserve Restated to
reserve (1) equity
holders
of
the
parent
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Balance at 31
December
2018 0.2 0.2 (37.1) 0.8 163.8 (19.2) 41.7 150.4
Profit for the
period - - - - - - 2.2 2.2
Other
comprehensive
income:
Net exchange gain
on
translation of
foreign
entities - - - 0.5 - - - 0.5
------------------ --------- --------- --------- ------------- --------- ----------- ---------- --------------
Total
comprehensive
profit
for the period - - - 0.5 - - 2.2 2.7
------------------ --------- --------- --------- ------------- --------- ----------- ---------- --------------
Transactions with
owners:
Share Buyback - - - - - (1.5) - (1.5)
Dividend - - - - - - (8.8) (8.8)
Vesting of share
options - 0.5 - - - 11.7 (12.2) -
Share based
payments
charge - - - - - - 4.5 4.5
Deferred tax on - - - - - - - -
share
based payments
------------------ --------- --------- --------- ------------- --------- ----------- ---------- --------------
Balance at 30
June 2019 0.2 0.7 (37.1) 1.3 163.8 (9.0) 27.4 147.3
Profit for the
period - - - - - - 2.6 2.6
Other
comprehensive
income:
Re-measurement of
pension
assets - - - - - - 0.9 0.9
Net exchange loss
on
translation of
foreign
entities - - - (0.5) - - - (0.5)
------------------ --------- --------- --------- ------------- --------- ----------- ---------- --------------
Total
comprehensive
profit
for the year - - - (0.5) - - 3.5 3.0
------------------ --------- --------- --------- ------------- --------- ----------- ---------- --------------
Transactions with
owners:
Share Buyback - - - - - (2.0) - (2.0)
Dividend - - - - - - (5.8) (5.8)
Share based
payments
charge - - - - - - 6.4 6.4
Deferred tax on
share
based payments - - - - - - 2.5 2.5
Balance at 31
December
2019 0.2 0.7 (37.1) 0.8 163.8 (11.0) 34.0 151.4
Profit for the
period - - - - - - 5.8 5.8
Other
comprehensive
income:
Net exchange gain
on
translation of
foreign
entities - - - 0.6 - - - 0.6
------------------ --------- --------- --------- ------------- --------- ----------- ---------- --------------
Total
comprehensive
profit
for the period - - - 0.6 - - 5.8 6.4
------------------ --------- --------- --------- ------------- --------- ----------- ---------- --------------
Transactions with
owners:
Share Buyback - - - - - (6.0) - (6.0)
Dividend - - - - - - (11.6) (11.6)
Vesting of share
options - 8.3 - - - 13.4 (21.7) -
Share based
payments
charge - - - - - - 1.5 1.5
Deferred tax on
share
based payments - - - - - - (0.9) (0.9)
Balance at 30
June 2020 0.2 9.0 (37.1) 1.4 163.8 (3.6) 7.1 140.8
------------------ --------- --------- --------- ------------- --------- ----------- ---------- --------------
The accompanying notes form an integral part of this financial
report.
(1) The comparative period has been restated in relation to the
treatment of the pension buy-in, full disclosure included within
note 1.
Consolidated Statement of Cash Flows
6 months 6 months Year to
to 30 June to 30 June 31 December
Continuing operations 2020 2019 2019
Unaudited Unaudited Audited
Restated Restated
(1) (1)
Cash flows from operating activities GBPm GBPm GBPm
Profit for the period 5.8 2.2 4.8
Adjustments for:
Depreciation 3.2 1.9 4.8
Amortisation 7.5 8.7 17.2
Finance costs 2.2 2.3 4.7
Taxation recognised in profit or
loss 3.5 3.0 3.2
Share based payments charge 1.5 4.5 10.9
Re-measurement of pension assets - - 0.9
Decrease in trade and other receivables 6.5 6.4 6.6
Increase in trade and other payables 9.2 6.1 2.9
Revaluation of short and long-term
derivatives 1.7 (0.3) (1.7)
Movement in provisions - (0.1) (0.6)
------------------------------------------- ------------ ------------ -------------
Cash generated from continuing operations 41.1 34.7 53.7
Interest paid (continuing operations) (1.2) (1.6) (3.0)
Income taxes paid (continuing operations) (2.4) (5.5) (7.8)
------------------------------------------- ------------ ------------ -------------
Total cash flows from operating
activities 37.5 27.6 42.9
------------------------------------------- ------------ ------------ -------------
Cash flows from investing activities
(continuing operations)
Acquisitions (1.0) (8.2) (8.2)
Purchase of property, plant and
equipment (1.6) (0.3) (1.6)
Purchase of intangible assets (0.5) (0.2) (1.1)
------------------------------------------- ------------ ------------ -------------
Total cash flows used in investing
activities (3.1) (8.7) (10.9)
------------------------------------------- ------------ -------------
Cash flows from financing activities
(continuing operations)
Repayment of borrowings (2.8) (3.0) (10.5)
Proceeds from borrowings - 6.4 6.4
Loan refinancing fee (0.7) - -
Acquisition of own shares (6.0) (1.5) (3.5)
Principal elements of lease payments (3.1) (2.1) (5.0)
Dividend paid (11.6) (8.8) (14.6)
------------------------------------------- ------------ ------------ -------------
Total cash flows used in financing
activities (24.2) (9.0) (27.2)
------------------------------------------- ------------ ------------ -------------
Net increase in cash and cash equivalents 10.2 9.9 4.8
Cash and cash equivalents at beginning
of period 11.2 6.3 6.3
Effects of currency translation
on cash and cash equivalents 0.6 0.4 0.1
------------------------------------------- ------------ ------------ -------------
Cash and cash equivalents at end
of period 22.0 16.6 11.2
------------------------------------------- ------------ ------------ -------------
The accompanying notes form an integral part of this financial
report.
(1) Restatement
The comparative periods' results have been restated for the
following:
-- to reduce operating profit by GBP2.2m for the year ended 31 December 2019 and increase the re-measurement of pension assets by the same amount reflecting a change to the accounting treatment of the pension buy-in (Adjusted EBITDA remains unaffected).
-- to recognise principal elements of lease payments gross, not net of sub-lease income.
Full disclosure included within note 1.
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 business information in the
form of high quality proprietary data, analytics and insights to
clients in multiple sectors.
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 2020. They have been prepared in accordance with IAS 34,
Interim Financial Reporting as adopted in the European Union. They
do not include all of the information required for full annual
financial statements, and should be read in conjunction with
GlobalData Plc's audited financial statements for the year ended 31
December 2019.
The financial information for the year ended 31 December 2019
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 2019 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.
Restatements
On 16 December 2019 the Group entered into an irrevocable
agreement to sell the defined benefit pension scheme of World
Market Intelligence Limited, a subsidiary of the Group, to Just
Retirement Limited ("Just") through a two-step buy-out transaction
under which all risks in relation to the scheme are transferred to
Just. The first step of the transaction involved the acquisition of
a qualifying insurance policy that will cover the future pension
obligations of the scheme (the "buy-in" step), at cash cost to the
Group of GBP1.3m subject to an adjusting payment on completion. The
buy-out step, which will see the transfer of the scheme liabilities
to the insurer, is expected to be completed during 2020. This
transaction has been accounted for as a settlement. A charge of
GBP2.2m has been recognised as a settlement cost, being the
difference between the amount paid and the liability at the
settlement date. The prior year income statement has been restated
to reflect this loss of GBP2.2m in the income statement.
Previously, the loss of GBP2.2m was recognised in other
comprehensive income offset by the reversal of an asset ceiling,
recorded to limit the pension surplus able to be recognised under
IFRSs, in the amount of GBP0.9m. As such, an overall entry of
GBP1.3m was recognised in other comprehensive income in the prior
year. The reversal of the asset ceiling of GBP0.9m through other
comprehensive income is not impacted by the restatement as this may
not offset any loss recorded in the income statement in respect of
this transaction. This adjustment has increased operating expenses
by GBP2.2m and reduced operating profit and profit before tax by
the same amount. Basic earnings per share reduced from 6.0 pence to
4.1 pence and diluted earnings per share from 5.6 pence to 3.8
pence. The adjustment had no impact on the Group's net assets as at
31 December 2019 and no impact on the Group's Adjusted EBITDA.
The comparative periods' results have also been restated to
reclassify other income from below operating profit to above
operating profit. Other income is comprised of sub-lease rental
income related to the operations of the business and, as such, has
been reclassified above operating profit. The restatement has
increased operating profit for the 6 months to 30 June 2019 by
GBP0.6m and for the year ended 31 December 2019 by GBP1.3m. Profit
before tax, net assets and earnings per share is unaffected for
both comparative periods.
The cash flow statement for the prior periods has also been
restated to recognise principal elements of lease payments gross of
sub-lease rental income. Sub-lease rental income was incorrectly
netted off against principal elements of lease payments and has
been reclassified to total cash flows from operating activities.
The restatement has increased the principal elements of lease
payments by GBP0.6m for the 6 months to 30 June 2019 and GBP1.3m
for the year ended 31 December 2019. Total cash flows from
operating activities has increased by the same amounts.
Notes to the Interim Financial Statements (continued)
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 continually
evaluated based on historical experience and other factors,
including expectations of future events that are believed to be
reasonable under the circumstances. In the future, actual
experience may deviate from these estimates and assumptions.
The 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 2019.
The only exceptions are the estimate of income tax liabilities,
which is determined in the Interim Financial Statements using the
estimated average annual effective income tax rate applied to the
pre-tax income of the interim period and the carrying value of
goodwill and other intangibles.
Carrying value of goodwill and other intangibles
The Group tests goodwill at each reporting date for impairment
and, in accordance with IAS 36, whenever events or changes in
circumstances indicate that the carrying value may not be
recoverable. In light of the COVID-19 pandemic, Management have
performed a full impairment review.
The assumptions used as part of the review which have been
amended since the year end review are as follows:
Increase in revenue Discount rate
(for years 3 to 5)
2020 2019 2020 2019
Consumer 6.50% 6.50% 10.12% 10.93%
Technology 2.78% 2.78% 10.19% 10.93%
Healthcare 8.29% 8.29% 10.12% 10.93%
Construction 3.08% 3.08% 10.19% 10.93%
Energy 5.00% 5.00% 10.12% 10.93%
Financial Services 4.29% 4.29% 10.15% 10.93%
MEED 2.98% 2.98% 8.69% 9.63%
Communities 2.38% 2.38% 11.27% 12.12%
In light of the COVID-19 pandemic, the forecasts for 2020 have
been adjusted to fully reflect the expected impact on the Group's
results. The growth rates detailed in the table above (which are
either 5 year forecast CAGR as computed within the 5 year plan
produced during late 2019 or 2019 revenue growth rates) have been
used within the value in use projections for years 2022-2024. For
2021, the Group expects to see a partial recovery, therefore 50% of
these growth rates have been used within the projections.
On a CGU level, there is sufficient headroom within all CGUs,
with the lowest headroom noted being GBP12.1m within the
Construction CGU. No impairment has therefore been recognised.
Management has undertaken sensitivity analysis taking into
consideration the impact on key impairment test assumptions arising
from a range of possible future trading and economic scenarios on
each CGU. For the most sensitive CGUs, the following individual
scenarios would need to occur before impairment is triggered within
the Group:
Revenue Growth Falls To Discount Rate Rises To
-------------- ------------------------ -----------------------
Construction (0.7%) 12.2%
Energy 2.0% 11.6%
-------------- ------------------------ -----------------------
Management acknowledge the sensitivity of the assumptions
applied to the Construction and Energy CGUs however management are
comfortable with these assumptions and will continue to monitor
performance regularly for any indicators of future impairment
loss.
Notes to the Interim Financial Statements (continued)
Going concern
The Group has closing cash of GBP22.0m as at 30 June 2020 and
net debt of GBP41.2m (30 June 2019: net debt of GBP57.3m), being
cash and cash equivalents less short and long-term borrowings,
excluding lease liabilities. The Group has outstanding loans of
GBP64.2m which are syndicated with The Royal Bank of Scotland, HSBC
and Bank of Ireland. The Group has a further facility to draw upon
of GBP80m RCF plus a further uncommitted accordion facility of
GBP75m. The Group's current banking facilities are in place until
April 2023.
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 Directors recognise that the COVID-19
pandemic does create risks and uncertainties (as discussed within
the Operating and Financial Review), and in response
to this have modelled a number of scenarios to consider the
potential impact of COVID-19 on the Group's results, cash flow and
loan covenant forecast. Key assumptions built into the scenarios
focus on new business growth rates, event revenue and directly
attributable cost savings. There remains headroom on the covenants
under each scenario. In addition to performing scenario planning,
the Directors have also conducted stress testing of the business'
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 .
Through our normal business practices we are in regular
communication with our lenders and are satisfied they will be in a
position to continue supporting us for the foreseeable future.
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 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 2019, and applied consistently. The annual
financial statements of the Group are prepared in accordance with
IFRSs as adopted by the European Union.
Presentation of non-statutory alternative performance
measures
The Directors believe that Adjusted EBITDA, Adjusted EBITDA
margin, Adjusted profit before tax, Adjusted profit after tax 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 their effect
on shareholders' returns is already reflected
in diluted earnings per share measures.
Restructuring, M&A The Group considers these items of expense as
and deal 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 so as 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 of acquired The amortisation charge for those intangible
intangible assets assets recognised on business combinations is
excluded from Adjusted EBITDA since they are
non-cash charges arising from investment activities.
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 which
better aligns Adjusted EBITDA to the cash performance
of the business
----------------------------------------------------------
Unrealised operating
foreign exchange
gain/ loss
----------------------------------------------------------
Notes to the Interim Financial Statements (continued)
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 adjustments to the tax payable in respect of previous
years.
Deferred taxation is provided in full on temporary differences
between the carrying amount of the assets and liabilities in the
financial statements and the tax base. Deferred tax assets are
recognised only to the extent that it is probable that future
taxable profits will be available against which the temporary
difference can be utilised. Deferred tax is determined using the
tax rates that have been enacted or substantially enacted by the
reporting date, and are expected to apply when the deferred tax
liability is settled or the deferred tax asset is realised.
Tax is recognised in the income statement for interim reporting
purposes based upon an estimate of the likely effective tax rate
for the year.
4. Segment analysis
The principal activity of GlobalData Plc and its subsidiaries
(together 'the Group') is to provide business information in the
form of high quality proprietary data, analytics and insights to
clients in multiple sectors.
IFRS 8 "Operating Segments" requires the segment information
presented in the financial statements to be that which is used
internally by the chief operating decision maker to evaluate the
performance of the business and to decide how to allocate
resources. The Group has identified the Chief Executive Officer as
its chief operating decision maker.
The Group maintains a centralised operating model and single
product 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 Group 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 Chief Executive
Officer on a monthly basis and consists of earnings before
interest, tax, depreciation, amortisation, central overheads and
other adjusting items. The Chief Executive Officer also monitors
revenue within the operating segment.
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
2020 2019 2019
Unaudited Unaudited Audited
GBPm GBPm GBPm
Data, analytics, and insights 86.7 88.5 178.2
-------------------------------------- ------------ ------------ -------------
Total Revenue 86.7 88.5 178.2
Adjusted EBITDA 27.2 24.2 49.8
Adjusting items (see note 6) (11.9) (14.3) (31.4)
Depreciation (3.2) (1.9) (4.8)
Amortisation (excluding amortisation
of acquired intangible assets) (0.6) (0.5) (0.9)
Finance costs (2.2) (2.3) (4.7)
Profit before tax 9.3 5.2 8.0
-------------------------------------- ------------ ------------ -------------
Notes to the Interim Financial Statements (continued)
The Group generates revenue from services provided over a period
of time such as recurring subscription 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", on 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, is 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.
Revenue recognised in the Consolidated Income Deferred Revenue recognised within the
Statement Consolidated Statement of Financial Position
Period ended Period ended Year ended 31 As at 30 June As at 30 June As at 31
30 June 2020 30 June 2019 December 2019 2020 2019 December 2019
GBPm GBPm GBPm GBPm GBPm GBPm
Services
transferred:
Over a period
of time (1) 72.3 67.5 138.9 68.2 67.0 57.5
Immediately
on delivery 14.4 21.0 39.3 12.4 10.2 11.1
---------------- --------------- --------------- --------------- --------------- --------------- ---------------
Total 86.7 88.5 178.2 80.6 77.2 68.6
(1) Subscriptions
As subscriptions are typically for periods of 12 months the
majority of deferred revenue held at 31 December will be recognised
in the income statement in the following year. As at 30 June 2020,
GBP0.7m (30 June 2019: GBP2.9m) 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.
Notes to the Interim Financial Statements (continued)
Geographical analysis
The below disaggregated revenue is derived from the geographical
location of our customers rather than the team structure we are
organised by.
From continuing operations
6 months to 30 June 2020 UK Europe Americas Asia Pacific MENA (1) Rest of World Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Revenue from external customers 13.8 23.5 28.7 10.6 7.1 3.0 86.7
--------------------------------- ----- ------- --------- ------------- --------- -------------- --------
6 months to 30 June 2019 UK Europe Americas Asia Pacific MENA (1) Rest of World Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Revenue from external customers 14.5 23.7 29.4 9.5 8.0 3.4 88.5
--------------------------------- ----- ------- --------- ------------- --------- -------------- ------
Year ended 31 December 2019 UK Europe Americas Asia Pacific MENA (1) Rest of World Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Revenue from external customers 27.7 49.4 62.0 17.7 15.0 6.4 178.2
--------------------------------- ----- ------- --------- ------------- --------- -------------- ------
1. Middle East & North Africa
5. Operating profit
Operating profit is stated after the following expenses relating
to continuing operations:
6 months 6 months to Year to 31
to 30 June 2019 December 2019
30 June Unaudited Audited
2020 Restated
Unaudited
GBPm GBPm GBPm
Cost of sales 49.1 52.7 106.8
Administrative costs:
- Losses on trade receivables 1.2 1.1 2.3
- Other administrative costs 25.5 27.8 57.7
Operating expenses 75.8 81.6 166.8
------------------------------- ------------ --------------- ----------------
Notes to the Interim Financial Statements (continued)
6. Adjusting items
6 months 6 months to Year to 31
to 30 June 2019 December 2019
30 June Unaudited Audited
2020 Restated
Unaudited
GBPm GBPm GBPm
Restructuring and deal costs 0.4 0.6 0.8
M&A costs 0.4 0.6 1.5
Costs of settlement of pension
liabilities (note 1) - - 2.2
Share based payment charge 1.5 4.5 10.9
Revaluation of short and long-term
derivatives 1.7 (0.3) (1.7)
Unrealised operating foreign
exchange loss 1.0 0.7 1.4
Amortisation of acquired intangibles 6.9 8.2 16.3
Total adjusting items 11.9 14.3 31.4
-------------------------------------- ------------ --------------- ----------------
The adjustments made are as follows:
-- 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.
-- The share based payments charge is in relation to the two 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
scheme 2), 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).
-- Costs of settlement of pension liabilities reflects a charge
of GBP2.2m in relation to the buy-in of the World Market
Intelligence Limited defined benefit pension scheme. The scheme
came into the Group as part of the acquisition of Research Views
Limited and subsidiaries (World Market Intelligence Limited being a
subsidiary of Research Views Limited) in 2018, the charge is
therefore reflected as an adjusting item given it has arisen as
part of M&A activity and relates to a corporate transaction to
transfer the defined benefit obligations to a third party.
-- Unrealised operating foreign exchange losses relate to
non-cash exchange losses made on operating items.
-- Restructuring relates to a GBP0.1m charge incurred in
relation to the pension buy-in transaction and GBP0.1m of fees
incurred in relation to the Employee Benefit Trust. Deal costs
represent GBP0.2m and are in relation to the re-financing activity
completed in May 2020
-- The M&A costs relate to deferred consideration payments
in respect to an acquisition made in 2018, CHM Research
Limited.
7. Net finance costs
6 months 6 months to Year to 31
to 30 June 2019 December 2019
30 June Unaudited Audited
2020
Unaudited
GBPm GBPm GBPm
Loan interest cost 1.3 1.6 3.1
Lease interest cost 0.9 0.6 1.6
Other interest cost 0.1 0.1 0.1
Other interest income (0.1) - (0.1)
2.2 2.3 4.7
----------------------- ------------ --------------- ----------------
Notes to the Interim Financial Statements (continued)
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
30 June 2020
Unaudited
6 months to Year to 31 December 2019
30 June 2019 Audited
Unaudited Restated
Earnings per share attributable to equity holders from
continuing operations:
Basic
Profit for the period attributable to ordinary
shareholders of the parent company (GBPm) 5.8 2.2 4.8
Weighted average number of shares (no' m) 117.8 116.7 116.5
Basic earnings per share (pence) 4.9 1.9 4.1
Diluted
Profit for the period attributable to ordinary
shareholders of the parent company (GBPm) 5.8 2.2 4.8
Weighted average number of shares (no' m) 126.1 123.5 125.7
Diluted earnings per share (pence) 4.6 1.8 3.8
Reconciliation of basic weighted average number of shares to the
diluted weighted average number of shares:
6 months to 6 months to
30 June 2020 30 June 2019
Unaudited Unaudited
No' m No' m
Year to 31 December 2019
Audited
No' m
Basic weighted average number of shares, net of shares
held in Treasury reserve 117.8 116.7 116.5
Share options in issue at end of period, net of shares
not paid up 8.3 6.8 9.2
--------------------------------------------------------- --------------- --------------- -------------------------
Diluted weighted average number of shares 126.1 123.5 125.7
--------------------------------------------------------- --------------- --------------- -------------------------
Notes to the Interim Financial Statements (continued)
9. Intangible assets
Software Customer Brands IP rights Goodwill Total
relationships and Database
GBPm GBPm GBPm GBPm GBPm GBPm
Cost
As at 31 December
2019 10.7 43.6 16.0 48.9 227.3 346.5
Additions: Business
combinations - 0.4 - 1.3 - 1.7
Additions: Separately
acquired 0.5 - - - - 0.5
As at 30 June
2020 11.2 44.0 16.0 50.2 227.3 348.7
----------------------- --------- --------------- ------- -------------- --------- --------
Amortisation
As at 31 December
2019 (8.8) (25.1) (9.6) (42.4) (10.5) (96.4)
Charge for the
period (0.6) (1.9) (0.5) (4.5) - (7.5)
Foreign currency
retranslation - - - 0.1 - 0.1
As at 30 June
2020 (9.4) (27.0) (10.1) (46.8) (10.5) (103.8)
----------------------- --------- --------------- ------- -------------- --------- --------
Net book value
As at 30 June
2020 1.8 17.0 5.9 3.4 216.8 244.9
As at 31 December
2019 1.9 18.5 6.4 6.5 216.8 250.1
----------------------- --------- --------------- ------- -------------- --------- --------
10. Derivative assets and liabilities
30 June 2020 30 June 31 December
Unaudited 2019 2019
GBPm Unaudited Audited
GBPm GBPm
Short-term derivative assets 0.1 0.5 0.9
Short-term derivative liabilities (1.0) (0.9) (0.1)
Net derivative (liability)/ asset (0.9) (0.4) 0.8
----------------------------------- --------------- ------------ --------------
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 GBP1.7m to the income statement (30 June 2019: gain of
GBP0.3m).
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.
Notes to the Interim Financial Statements (continued)
As at 30 June 2020, 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 2020 30 June 31 December
Unaudited 2019 2019
GBPm Unaudited Audited
GBPm GBPm
Short-term lease liabilities 4.2 2.7 3.9
Short-term borrowings 5.0 6.0 6.0
Current liabilities 9.2 8.7 9.9
------------------------------ --------------- ------------ --------------
30 June 2020 30 June 31 December
Unaudited 2019 2019
GBPm Unaudited Audited
GBPm GBPm
Long-term lease liabilities 38.8 33.7 40.7
Long-term borrowings 58.2 67.9 60.5
Non-current liabilities 97.0 101.6 101.2
----------------------------- --------------- ------------ --------------
Term loan and RCF
In May 2020, the Group announced that it had agreed to increase
its current banking facilities with NatWest, HSBC and Bank of
Ireland, extending the current maturity to April 2023 (previously
April 2022). The new arrangements increase the total committed
facility to GBP145.5m (previously GBP100m), plus a further
uncommitted accordion facility of GBP75m. The committed facility
comprises a term loan of GBP50m and a revolving credit facility
(RCF) of GBP95.5m.
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 2020 is GBP48.8m. As at 30 June
2020, the Group had drawn down GBP15.5m of the RCF. Interest is
charged on the term loan and drawn down RCF at a rate of 2.5% over
the London Interbank Offered Rate.
In accordance with IFRS 9 we have performed a comparison of the
fair value of the new debt with the old to determine whether there
has been a substantial modification requiring de-recognition. The
assessment concluded that there has not been a substantial
modification, the difference between the fair value of the new debt
with the old being immaterial.
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
GBP0.3m for the period ended 30 June 2020 (30 June 2019:
GBP0.9m).
Notes to the Interim Financial Statements (continued)
The changes in the Group's borrowings can be classified as
follows:
Long-term Short-term Long-term
Short-term borrowings lease lease
borrowings liabilities liabilities Total
GBPm GBPm GBPm GBPm GBPm
As at 1 January 2020 6.0 60.5 3.9 40.7 111.1
----------------------------------------- --------------- --------------- -------------- --------------- ------
Cash-flows:
* Repayment (2.8) - (3.1) - (5.9)
Non-cash:
* Capitalisation of loan fees - (0.7) - - (0.7)
* Loan fee amortisation - 0.2 - - 0.2
* Lease additions - - 0.1 - 0.1
* Lease liabilities - - 1.0 0.4 1.4
* Reclassification 1.8 (1.8) 2.3 (2.3) -
As at 30 June 2020 5.0 58.2 4.2 38.8 106.2
----------------------------------------- --------------- --------------- -------------- --------------- ------
12. Equity
Share capital
Allotted, called up and
fully paid:
30 June 2020 30 June 2019 31 December
Unaudited Unaudited 2019
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 0.5m shares at a total market value of
GBP6.0m. The purchased shares will be held for the purpose of
satisfying the exercise of share options under the Company's
Employee Share Option Plan.
In May 2020, 1.8m outstanding share options held by GlobalData
employees vested in accordance with the EBITDA target being
satisfied under Tranche 2b and approved by the Remuneration
Committee. The Group satisfied all of the share options exercised
using the shares held by the Trust. Movements to the treasury
reserve, share premium account and retained earnings have arisen on
the accounting for the vesting of the options as detailed in the
Statement of Changes in Equity. This recognises the fact that no
current year expense is incurred, as the vesting of options is a
transaction with shareholders only.
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.
Notes to the Interim Financial Statements (continued)
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 2019 was 10.0 pence per share and was
paid in June 2020. The Board has announced an interim dividend of
5.4 pence per share. The interim dividend will be paid on 2 October
2020 to shareholders on the register at the close of business on 28
August 2020.
Other reserve
The other reserve consists of a reserve created upon the reverse
acquisition of the TMN Group Plc.
Foreign currency translation reserve
The foreign currency translation reserve contains the
translation differences that arise upon translating the results of
subsidiaries with a functional currency other than Sterling. Such
exchange differences are recognised in the income statement in the
period in which a foreign operation is disposed of.
Merger reserve
The merger reserve was created to account for the premium on the
shares issued in consideration for the purchase of GlobalData
Holding Limited in 2016. The premium on the shares issued in
consideration for the purchase of Research Views Limited and its
subsidiaries was also recognised in the merger reserve in 2018.
Treasury reserve
The treasury reserve contains shares held in treasury by the
Group and in the Group's Employee Benefit Trust for the purpose of
satisfying the exercise of share options under the Company's
Employee Share Option Plan.
Share based payments
The Group created a share option scheme during the year ended 31
December 2010 and granted the first options under the scheme on 1
January 2011 to certain senior employees. Each option granted
converts to one ordinary share on exercise. A participant may
exercise their options (subject to employment conditions) at any
time during a prescribed period from the vesting date to the date
the option lapses. For these options to be exercised the Group's
earnings before interest, taxation, depreciation and amortisation,
as adjusted by the Remuneration Committee for significant or
one-off occurrences, must exceed certain targets.
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 share price must reach certain targets.
The total charge recognised for these schemes during the six
months to 30 June 2020 was GBP1.5m (30 June 2019: GBP4.5m). The
awards of the schemes are settled with ordinary shares of the
Company. During the period the Group purchased an aggregate amount
of 0.5m shares at a total market value of GBP6.0m. The purchased
shares will be held in treasury and in the Group's Employee Benefit
Trust for the purpose of satisfying the exercise of share options
under the Company's Employee Share Option Plan.
Notes to the Interim Financial Statements (continued)
13. Acquisitions
Progressive Content Limited
On 7 May 2020, the Group acquired 100% of the share capital of
Progressive Content Limited for cash consideration of GBP1, on
which no goodwill has been recognised. The acquisition was made in
order to act as a catalyst for new business opportunities and to
strengthen and support the existing Group.
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:
Customer relationships - 0.4 0.4
Intellectual property and content - 1.3 1.3
Net assets acquired consisting of:
Cash and cash equivalents 0.1 - 0.1
Trade and other receivables 1.7 (0.2) 1.5
Trade and other payables (3.0) (0.1) (3.1)
Deferred tax - (0.2) (0.2)
Fair value of net assets acquired (1.2) 1.2 -
----------------------------------------------- ----------------- ------------------------- -------------
No goodwill was recognised in relation to the acquisition.
In line with the provision of IFRS 3, 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 Group incurred legal expenses of GBP2,000 in relation to the
acquisition in the period from the date of acquisition to 30 June
2020, the trade of Progressive Content Limited generated revenues
of GBP0.7m and EBITDA loss of GBP0.2m.
Progressive Content Limited was an entity under common control
at the time of acquisition, by virtue of being controlled by Mike
Danson. IFRS 3 scopes out combinations of entities under common
control. The Group has therefore applied IAS 8 'Accounting
Policies, Changes in Accounting Estimates and Errors' and used
management judgement in developing and applying an accounting
policy that results in information which is reliable and relevant.
Management have determined it is most appropriate to follow the
principles of IFRS3, and apply acquisition accounting for
acquisitions of entities under common control.
14. Related party transactions
Mike Danson, GlobalData's Chief Executive Officer, owned 66.9%
of the Company's ordinary shares as at 27 July 2020. Mike Danson
owns a number of businesses that interact with GlobalData Plc. The
principal transactions are in line with the transactions disclosed
in the financial statements for December 2019, namely:
accommodation charges of GBP1.8m (30 June 2019: GBP1.6m), corporate
support charges of GBP0.3m (30 June 2019: GBP0.3m) and interest
income on an outstanding loan of GBP0.04m (30 June 2019: GBP0.05m)
issued to Progressive Trade Media Limited. The initial GBP4.5m loan
issued has two further instalments of GBP0.9m remaining, repayable
in equal instalments January 2021 and 2022.
In addition to these amounts, there were two further
transactions:
-- As detailed in note 13, on 7 May 2020, the Group acquired
Progressive Content Limited, an entity related to GlobalData Plc by
virtue of common control.
Notes to the Interim Financial Statements (continued)
-- In June 2020 the Group entered into a 5-year service contract
with NS Media Group Limited, an entity related by virtue of common
control. The agreed suite of data services provided to NS Media
Group Limited have been contracted on terms equivalent to those
that prevail in arm's length transactions. A key clause within the
contract enables the Group to retain ownership of all IP internally
generated during the contracted period. Similarly, NS Media Group
Limited also are entitled to retain and perpetually use the IP
generated. In the period ended 30 June 2020, the total revenue
generated from this contract was GBPnil (30 June 2019: GBPnil), and
the net contribution generated was GBPnil (30 June 2019: GBPnil).
Each years' fixed fees are invoiced annually in advance, except for
any variable components which are invoiced quarterly in advance. As
at 30 June 2020, the total balance receivable from NS Media Group
Limited was GBPnil (30 June 2019: GBPnil). There is no specific
credit loss provision in place in relation to this receivable (30
June 2019: GBPnil) and the total expense recognised during the
period in respect of bad or doubtful debts was GBPnil (30 June
2019: GBPnil).
The Group has taken advantage of the exemptions contained within
IAS 24 - Related Party Disclosures from the requirement to disclose
transactions between Group companies as these have been eliminated
on consolidation. The amounts outstanding for other related parties
were GBP1.9m owed from Progressive Trade Media Limited for the
outstanding loan, GBP925,000 due within one year and GBP925,000 due
after one year (30 June 19: GBP2.8m). There were no other balances
owing to or from related parties.
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 Corporate Broker
N+1 Singer Advisory LLP
1 Bartholomew Lane
London
EC2N 2AX
Corporate Broker
J.P. Morgan Cazenove
25 Bank Street
Canary Wharf
London
E14 5JP
Auditor
Deloitte LLP
Hill House
1 Little New Street
London
EC4A 3BZ
Registrars
Link Asset Services
Northern House
Woodsome Park
Fenay Bridge
Huddersfield
West Yorkshire
HD8 0GA
Solicitors
Reed Smith
20 Primrose Street
London
EC2A 2RS
Bankers
The Royal Bank of Scotland Plc
280 Bishopsgate
London
EC2M 4RB
Registered number
Company No. 03925319
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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