TIDMDATA
RNS Number : 8190E
GlobalData PLC
03 March 2020
GlobalData plc ("GlobalData" or the "Company")
Annual Report and Accounts
GlobalData announces that its Annual Report and Accounts for the
year ended 31 December 2019 is now available on the Company's
website, www.globaldata.com .
The Company confirms that its audited financial results for the
year ended 31 December 2019 are in line with the unaudited final
results announcement issued on 24 February 2020, with the exception
of a reclassification of GBP1.9 million of expenses between Cost of
Sales and Administration costs on the Income Statement. The impact
of this reclassification reduces GlobalData's Cost of Sales
(increasing Gross Profit), with a corresponding increase in
Administration costs. This reclassification has no impact on
GlobalData's Revenue, Adjusted EBITDA or other earnings
metrics.
The amended version of the Company's final results is set out
below:
GlobalData Plc
Final Results For The Year Ended 31 December 2019
"Continued product development delivers revenue, earnings and
margin growth"
Operational Highlights
-- Completed transition to centralised operating model and single platform
-- Major product upgrade; enhanced user-experience, functionality, and site performance
-- Launches of new, productised data, analytics, and insights
-- Significant investment in upgrading core infrastructure and business technologies
Financial Highlights
-- Group revenue increased by 13% to GBP178.2m (2018: GBP157.6m)
-- Organic revenue growth of 7%
-- Adjusted EBITDA (1) increased by 38% to GBP44.6m (2018: GBP32.2m)
-- Improved Adjusted EBITDA margin (1) of 25%, achieved ahead of schedule (2018: 20%)
-- Cash generated from operations of GBP52.4m (2018: GBP25.1m), 117% of Adjusted EBITDA
-- Invoiced forward revenues (3) increased by 5% to GBP85.1m (2018: GBP81.4m)
-- Statutory profit before tax of GBP10.2m (2018: loss GBP7.7m)
-- Final dividend of 10.0 pence per share (2018: 7.5 pence);
total dividend of 15.0 pence per share, up 36% from the previous
year (2018: 11.0 pence)
-- Net debt (2) of GBP55.3m (2018: GBP64.1m)
-- Net total assets of GBP151.4m (2018: GBP150.4m)
Bernard Cragg, Chairman of GlobalData Plc, commented:
" We continue to make impressive strides forward on our
strategic priorities whilst still delivering strong financial
results. Our strong business model demonstrates the characteristics
that define best in-class Information Services companies.
Our revenue growth of 13% delivered earnings growth of 38% at an
Adjusted EBITDA level, demonstrating the significant operating
leverage opportunity and combined with our strong cash generation,
we have proposed an increase in the total dividend for the year of
36%, which will bring total dividends in respect of the 2019
financial year to 15.0 pence per share."
Note 1: Adjusted EBITDA: Earnings before interest, tax,
depreciation and amortisation, 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 the impact of IFRS16 (Leases).
Adjusted EBITDA margin is defined as: Adjusted EBITDA as a
percentage of revenue.
Note 2: Net debt: Short and long-term borrowings less cash and
cash equivalents.
Note 3: Invoiced forward revenue: Invoiced forward revenue
relates to amounts that are invoiced to clients at the balance
sheet date, which relate to future revenue to be recognised over
the course of the following 12 months.
ENQUIRIES
GlobalData Plc 0207 936 6400
Bernard Cragg, Chairman
Mike Danson, Chief Executive
Graham Lilley, Chief Financial Officer
N+1 Singer 0207 496 3000
James Maxwell
Justin McKeegan
J.P Morgan Cazenove 0207 742 4000
Bill Hutchings
Hudson Sandler 0207 796 4133
Nick Lyon
CHAIRMAN'S STATEMENT
We continue to make impressive strides forward on our strategic
priorities whilst delivering strong financial results. Our strong
business model demonstrates the characteristics that define best
in-class Information Services companies.
It has been a particularly transformational year for us. During
2019, we successfully shifted to a centralised operating model and
single product platform. From a product perspective, this has
involved the integration of over 150 data assets from across our
industry verticals, into a unified software platform, which is
underpinned by a common taxonomy, shared development resource, and
new data science technologies. Ultimately, this allows us to manage
our data operations in a far more efficient and scalable way,
accelerate our new product development, and create a richer, more
powerful proposition for our clients. Not only have I been
impressed by the quality and the speed at which we can bring new
products and features to market, but I am excited to see this
culture of innovation and product excellence drive the business
forward in the coming years.
Our revenue growth of 13% delivered earnings growth of 38% at an
Adjusted EBITDA level, demonstrating the significant operating
leverage opportunity and combined with our strong cash generation,
we have proposed an increase in the total dividend for the year of
36% to 15.0 pence. The significant incremental margins and strong
operating cash flows demonstrate the strong fundamentals of our
business model. The Group's forward invoiced revenue grew year on
year by 5%, which was below the underlying revenue growth of 7% for
the year reflecting a slight slowdown on sales orders in the latter
quarter of 2019. During the second half of the year we restructured
some of our sales operations in Europe, which resulted in a reduced
sales headcount. We also developed a comprehensive Growth
Optimisation Plan, which underpins our 5-year plan and will deliver
a range of initiatives across our strategic priorities. Our
immediate focus is on Sales Excellence, which includes our aim to
increase our sales headcount.
Looking Forward
We are an ambitious and highly innovative business and
consistent in our objectives. We provide our clients with
world-class products and client service, with an ambition to exceed
their expectations at every interaction. For our shareholders we
aim to provide returns which reflect our reported earnings and
long-term prospects.
I am also pleased to announce that we have appointed J.P. Morgan
Cazenove as joint corporate broker with immediate effect.
Additionally, we are recommending that Deloitte LLP are appointed
as auditors of the Group and its subsidiaries for the year ending
31 December 2020. We believe that the appointment of best-in-class
advisors aligns with our strategic objectives and ambitions.
Our Employees
We aim to be an employer of choice providing an enriching and
rewarding environment to work in. In another significant year of
progress and challenge, our employees have once again been key to
our development. The quality, talent and commitment of our
colleagues around the world makes GlobalData an exciting and
dynamic work environment.
I am pleased these results have been confirmed by the Audit and
Remuneration Committees to fulfil the performance condition for the
exercise of 1.8 million employee share options.
Dividend
Having regard to the performance, cash generation and future
prospects, the Board is pleased to announce a final dividend of
10.0 pence per share (2018: 7.5 pence). The proposed final dividend
will be paid on 24 April 2020 to shareholders on the register at
the close of business on 27 March 2020. The ex-dividend date will
be on 26 March 2020. The proposed final dividend increases the
total dividend for the year to 15.0 pence per share (2018: 11.0
pence), an increase of 36%.
Board Changes
I am pleased to confirm that our current CFO, Graham Lilley, has
committed to the business long-term and will continue in this role
permanently. Graham's experience and strong understanding of our
business and business model will be a real asset to the company as
we move forward.
Current Trading and Outlook
We enter 2020 with the strong fundamentals of our business
model, including enhanced revenue visibility, strong margins and
cash conversion. The global political and economic environment,
including Coronavirus, continues to be uncertain, however we remain
confident in our business model and our ability to execute
well.
Bernard Cragg
Chairman
2 March 2020
CHIEF EXECUTIVE'S REVIEW
Key Achievements
-- Revenues of GBP178.2 million: Group revenue has grown by 13%,
with underlying organic revenue growth of 7%.
-- Adjusted EBITDA margin improved to 25% (2018: 20%) : The
margin improvement is a result of our model being able to deliver
revenue growth off a relatively fixed cost base. We have achieved
our stated medium term 25% margin target ahead of schedule and it
is a strong indication that the model is working and at the point
of inflection.
-- Adjusted operating cash flow increased to GBP52.3m (2018:
GBP30.5m): Adjusted operating cash flow represented 117% of
Adjusted EBITDA.
-- Profit before tax for the year was GBP10.2m (2018: loss
GBP7.7m): Strong revenues and operating fundamentals brought the
Group into statutory profit.
Trading Review
Over the past year we have continued to deliver against all of
our four strategic priorities, albeit with world-class product our
principal focus. Our teams have worked tirelessly to transform our
proposition and product capabilities and the significant work that
has been completed means that we are well positioned as we enter
2020. We have delivered a strong set of financial results for 2019,
finishing ahead of market expectations.
In particular, our shift to a centralised operating model and
single product platform, with shared development resources, has
been a major achievement. The complexity associated with
integrating over 150 data assets from across our industry verticals
into a common taxonomy and unified software platform cannot be
underestimated. Successfully delivering this - whilst releasing
major new launches - is testament to the quality of the people,
processes, and technology we have across our product
organisation.
As we look forward, the unique opportunities our integrated
platform affords us will be central to our strategy and growth
plans. This model will allow us to manage our data operations in a
far more efficient and scalable way, accelerate new product
development activities, and create a richer, more powerful
proposition for our clients and users.
During 2019, we also accelerated our investment into new data
science technologies such as artificial intelligence and machine
learning, and have started to successfully embed these capabilities
across our data and research operations. These technologies will
enhance the quality, timeliness, and value of the data and insights
we provide to our clients, and underpin the next phase of our
product development as we search for new ways to help our clients
make faster, more informed decisions. We have already started to
see the impressive benefits that our single product platform and
new technologies provide, with the following major releases
delivered in 2019:
- An upgraded technology and digital disruption product, with
cross-industry data, analytics, and insights
- A global patents database
- A new Direct Data Services offering, enabling API and Feed-based data consumption
- An enhanced elastic, semantic search capability integrated across our data portfolio
Alongside the new data and technology that we have invested in,
we are aware that our deep industry-specific data and insights is
the core foundation of our value proposition for many clients. As
such, we continue to strive for excellence in the quality and
uniqueness of these capabilities, which is evidenced by our renewal
rates remaining strong.
As we turn our attention to our go-to-market activities, we are
excited by the opportunity we now have to drive additional value in
our existing loyal customer base and reach significantly more
customers and new users. Today, our customer base remains
predominately within the industry sectors in which we operate, but
we recognise that the breadth and depth of our industry coverage is
a compelling proposition for organisations that require timely
intelligence on multiple industries. Therefore, we have
restructured some of our sales organisations to better suit the
selling of our products into audiences like financial institutions
and management consultancies ("Professional Services"), with the
objective of addressing the potential for sales in this area.
Whilst it is clear that 2019 has been a busy year and our
primary focus has been on transforming our operating model and
product organisation to align with our growth strategy, we have
also successfully delivered a strong set of financial results.
Key Performance Indicators
The key performance indicators selected are used by the
Executive Directors to monitor the Group's performance and
progress.
Revenue Adjusted EBITDA Adjusted EBITDA margin Net Debt
2019 GBP178.2m GBP44.6m 25% GBP55.3m
2018 GBP157.6m GBP32.2m 20% GBP64.1m
---------- ---------- ---------------- ----------------------- ---------
% growth 13% 38% 5p.p (14%)
We have continued to make progress against our KPI's. Revenue,
driven by organic growth (7%) and the benefit of acquisitions, has
grown by 13% in the year. Due to our relatively fixed cost base, a
high flow through of profit has flowed through to Adjusted EBITDA
and increased our margin. We now have increased our medium-term
Adjusted EBITDA margin target to 35%. Our strong operating cash
flow has meant that we have reduced our net debt, whilst
maintaining a progressive dividend policy and M&A activity.
Our Strategic Priorities
We have achieved a significant amount since 2016, and have
created a unique, scalable business, with a world-class product
offering. As we enter the next phase of our journey, we believe we
are well-positioned to benefit from strong and sustained demand
across our end-markets for trusted data, actionable analytics, and
forward-looking insights. To realise this opportunity, we recently
developed a comprehensive Growth Optimisation Plan, which will
deliver a range of key initiatives across our strategic priorities
to grow both our top and bottom line.
In 2020, our core focus will be on Sales Excellence and the
implementation of best-in-class technologies across our business to
improve Client Centricity and Operational Agility.
World Class Products
Enabling our clients to unlock the full value of our recent
product development activities is a key objective in 2020, and
supports our commitment to creating a "must have" capability
integral to the daily lives of our users. This will initially
involve continued enhancements to the performance and usability of
our core platform, and the development of new, high-value features
designed for specific Job Roles and use-cases.
Beyond this, we will continue to explore new opportunities to
further utilise our advanced data science technologies to drive
greater automation across our research operations, and create
higher-value insights from the use of predictive and prescriptive
analytics models. We already have a clear pipeline of new, 2020
product launches, which illustrate our commitment to successfully
innovating at speed and scale.
Sales Excellence
As our attention shifts towards sales execution, our starting
point is establishing the right sales capacity and coverage model,
to ensure we have the right number of sales staff, in the right
areas. As a global company, we are assessing where to increase our
sales operations in line with the market opportunity across both
regions and industry segments.
Beyond having the right capacity and coverage model, we are also
aligning the skill-sets within our salesforce to the demands of our
different target audiences. To do this, we are in the early stages
of implementing an "audience-first" approach which consists of
establishing sales teams that have specialist expertise in a
particular client segment. We believe this will deliver greater
productivity in our sales activities, particularly in regards to
winning new clients and effectively competing against other
providers.
In regards to our commercial model, we are looking to begin a
gradual shift towards a seat-based licensing model. We believe that
this will provide greater flexibility for clients, provide us with
the ability to target specific job roles and client functions, and
help to fully commercialise our product investment. Alongside this
licensing model, we have also implemented a strict pricing policy
and governance framework, which will help to drive increased price
realisation and minimal discounting.
Whilst given our centralised operating model, we are also
developing a GlobalData "Sales Best Practice Playbook", which will
create and standardise the best-practice tools, processes, and
training to be provided to our global salesforce. This includes a
central sales operations and product marketing team which ensures
our teams are finding the right opportunities, at the right time,
and pitching the right product, in the right way.
Client Centric
Outstanding client service is a critical component in delivering
client satisfaction and improved retention. Our aim is to deliver
best in class client service at every point of interaction. We have
significantly increased resources focused on first-line response,
and continue to explore and adopt new technologies.
In 2020, one of our Growth Optimisation initiatives will focus
on the development of comprehensive client personas, which will
reflect a range of our target buyers and users across our industry
verticals. These personas will play a pivotal role in enhancing our
ability to create compelling propositions and product capabilities
for specific job roles, whilst providing the insight our sales
teams need to effectively engage with target prospects. Beyond
this, we are also looking to implement a number of processes and
technology tools to improve the way we capture feedback from our
clients and users.
Operational Agility
Our business model is a relatively simple one: create the
content once and leverage sales from that content across multiple
formats (subscriptions, reports, bespoke research engagements and
events) and geographies. Our centralised operating model, not only
brings cost and margin benefits, it also allows the business to be
operating in a very agile but consistent manner which drives
operational synergies.
Following our recent acquisitions and the relative speed that we
have put the Group together over the past three years, we have
performed a strategic review of our cost base to ensure investment
funds are directed into the right areas of the business. As a
result of this we are more confident that we can significantly
invest in our products and people without significantly increasing
our overall cost base. This operational agility will keep us at the
forefront of product development for our clients, whilst delivering
progressive margins.
We have previously stated that our medium term Adjusted EBITDA
Margin target was 25%, which I am pleased to report that we have
now achieved in 2019. Whilst this is a clear indication that our
business model is working, we do not see this as a ceiling and are
now targeting 35% over the next 5-year term.
The progress we have made since we reformed as GlobalData in
2016 has been made possible because of the hard work and commitment
of our employees and I would like to express my own and my fellow
Board members' appreciation to all our colleagues across the
globe.
Today we are well positioned for growth and to continue to
deliver data, analytics, and insights into global markets, all of
which present opportunities for long-term profitable growth.
Mike Danson
Chief Executive Officer
2 March 2020
Financial Review
2019 2018 Movement
Continuing operations GBP000s GBP000s
Income statement analysis
------------------------------------------------ -------- -------- ---------
Revenue 178,195 157,553 13%
Statutory profit/ (loss) before tax 10,171 (7,664)
Depreciation 4,807 742
Amortisation of software 874 1,165
Amortisation of acquired intangible assets 16,273 20,422
Other income (1,274) -
Finance costs 4,692 2,487
------------------------------------------------ -------- -------- ---------
EBITDA (2) 35,543 17,152 107%
Restructuring costs 763 3,661
Adjustment for change in accounting policy(4) (4,021) -
Revaluation of short and long-term derivatives (1,686) 1,150
Share based payments charge - scheme 1 10,882 5,679
Share based payments charge - scheme 2 134 -
Unrealised operating foreign exchange loss 1,405 1,407
M&A costs 1,544 3,181
Adjusted EBITDA (1) 44,564 32,230 38%
-------- --------
Adjusted EBITDA margin(1) 25% 20%
------------------------------------------------ -------- -------- ---------
Cash flow analysis
------------------------------------------------ -------- -------- ---------
Cash flow generated from operations 52,350 25,058 109%
Adjusted operating cash flow (3) 52,308 30,542 71%
------------------------------------------------ -------- -------- ---------
Underlying cash flow conversion %(3) 117% 95%
------------------------------------------------ -------- -------- ---------
Adjusted earnings performance
------------------------------------------------ -------- -------- ---------
Adjusted EBITDA(1) 44,564 32,230
Depreciation (4,807) (742)
Amortisation of software (874) (1,165)
Other income 1,274 -
Adjustment for change in accounting policy (4) 4,021 -
Finance costs (4,692) (2,487)
------------------------------------------------ -------- -------- ---------
Adjusted Profit Before Tax 39,486 27,836 42%
------------------------------------------------ -------- -------- ---------
Tax (as charged to the Income Statement) (3,187) (3,408)
------------------------------------------------ -------- -------- ---------
Adjusted Profit After Tax 36,299 24,428 49%
------------------------------------------------ -------- -------- ---------
Basic Shares 116,501 109,926
Diluted Shares 125,733 119,516
Attributable to equity holders:
Basic profit/ (loss) per share (pence) 5.99 (10.17)
Diluted profit/ (loss) per share (pence) 5.55 (10.17)
Adjusted earnings per share (pence) 31.16 22.22 40%
Adjusted diluted earnings per share (pence) 28.87 20.44 41%
------------------------------------------------ -------- -------- ---------
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 Group's performance this year
1. Revenue
Revenues increased by 13% to GBP178.2m (2018: GBP157.6m), which
reflects underlying organic growth (7%), the benefit of a full year
of the Research Views revenues, acquired part way through 2018
(GBP6.4m) and the acquisition of Aroq Limited (GBP2.6m) in January
2019. The increase in revenue has been driven by recurring
subscription revenues.
2. Profit before tax
The profit before tax for the year was GBP10.2m (2018: loss
GBP7.7m). The shift to profitability has been driven by strong
growth in revenues and EBITDA, but also in part in the reduction in
non-cash amortisation of intangible assets, offset by an increase
to the non-cash share based payment charge. Prior years have
included significantly more costs associated with acquisitions and
restructure of the Group, however there has not been significant
M&A activity in the year, and the integration work is
substantially complete.
The implementation of IFRS 16 in the year reduced profit before
tax by GBP0.3m.
The Group also reviews Adjusted Profit Before Tax to understand
the underlying profitability of the Group. The Adjusted Profit
Before Tax grew to GBP39.5m (2018: GBP27.8m)
3. Cash Generation
The operating cash flow was GBP52.4m (2018: GBP25.1m). Excluding
the cash costs associated with M&A, restructuring, other
exceptional costs and one-off pension payment (GBP3.6m) and the
impact on classification by the implementation of IFRS 16 (GBP3.7m)
the adjusted operating cash flow was GBP52.3m (2018: GBP30.5m),
which is 117% of Adjusted EBITDA (2018: 95%).
The Group repaid debt of GBP10.5m and paid dividends of
GBP14.6m. The Group also paid for acquisitions of GBP8.1m, which
were funded under facilities agreed in the previous year.
Capital expenditure was GBP2.6m in 2019 (2018: GBP1.6m). This
includes GBP1.1m on software (GBP0.9m in 2018).
4. Adjusted EBITDA
Adjusted EBITDA increased by 38% to GBP44.6m (2018: GBP32.2m).
Our Adjusted EBITDA margin increased by 5 percentage points to 25%
(2018: 20%). We have established a relatively fixed cost base,
meaning that the incremental margin flow through to Adjusted EBITDA
margin is strong.
5. Forward invoiced revenue
Forward invoiced revenues grew by 5% from the 31 December 2018
balance of GBP81m to GBP85m, reflecting a slight slowdown on sales
orders in the latter quarter of 2019. During the second half of the
year we restructured some of our sales operations in Europe, which
resulted in a reduced sales headcount. Our immediate focus is on
Sales Excellence, which includes our aim to increase our sales
headcount.
6. Foreign exchange impact on results
The Group derives around 60% of revenues in currencies other
than Sterling. The impact of currency movements in the year had a
positive impact on revenues of GBP3.0m (2018: negative GBP2.0m),
which was offset in the consolidated income statement by
approximately GBP2.4m of adverse impact in the Group costs (2018:
positive GBP2.0m), meaning that currency benefitted the Group's
profitability by GBP0.6m (2018: nil). The main driver for the
movement was the movements of pound sterling in comparison to US
dollar. In 2018 the average rate throughout the year was 1.34
compared to a stronger pound, on average, in 2019 of 1.27.
7. Net Debt:
Net Debt reduced to GBP55.3m as at 31 December 2019 (2018:
GBP64.1m). This reduction principally reflects strong cash flows,
offset by M&A spend of GBP8.1m, dividends of GBP14.6m and
purchase of own shares of GBP3.6m.
8. Earnings per share
Basic profit was 5.99 pence per share (2018: loss of 10.17 pence
per share). Fully diluted profit per share was 5.55 pence per share
(2018: loss of 10.17 pence per share).
On an adjusted basis, the adjusted earnings per share grew from
22.22 pence per share to 31.16 pence, representing 40% growth.
9. Share based payments
The share based payments charge for 2019 has increased from
GBP5.7m to GBP10.9m (excluding new scheme). The key driver for this
increase is the share price performance which has driven up the
fair value of the options awarded over the past 18 months, this
exceeds the fair value of options of employees that have left.
A new scheme was approved in October for top executives, which
has a capacity of 4 million options. 1.4 million options were
issued in the year with a total charge of GBP0.1m.
10. Taxation
The effective tax rate for the year was 31%. The difference to
the Current UK rate of 19% principally relates to overseas tax
suffered, mainly in the United States and India, as well as some
prior year adjustments and expenses not deductible for tax.
11. IFRS 16
The adoption of IFRS 16, effective from 1 January 2019, has
resulted in the Group recognising a right-of-use asset and related
liability in connection with most former operating leases. The new
standard has been applied using the "modified retrospective"
transition approach.
The impact on the financial results as at 31 December 2019 is to
increase assets by GBP44.2m and to increase liabilities by
GBP44.5m. The Group has continued to use a consistent measure for
Adjusted EBITDA and has therefore excluded the impact of IFRS 16
from this measure.
The reported EBITDA has increased by GBP4.0m as a result of IFRS
16, with offsetting adjustments in depreciation (GBP4.0m cost
increase), finance costs (GBP1.5m cost increase) and other income
(gain of GBP1.3m) resulting in an overall reduction in profit
before tax of GBP0.3m. Other income is amounts received on sub-let
properties capitalised under IFRS16. More information is provided
in Note 2 - Accounting policies.
External Auditors
We are recommending that Deloitte LLP are appointed as auditors
of the Group and its subsidiaries for the year ending 31 December
2020. The recommendation follows a robust tender process, in line
with FRC guidance on best practice and will be proposed as an
ordinary resolution at the AGM. We believe that the appointment of
best-in-class advisors aligns with our strategic objectives and
ambitions. GlobalData's current auditor, Grant Thornton UK LLP, has
confirmed that there are no matters that it wishes to bring to the
attention of the Board of Directors or the Shareholders of the
Company.
Note 1: Adjusted EBITDA: Earnings before interest, tax, depreciation and amortisation, costs
associated with acquisitions, restructuring of the Group, share based payments, impairment,
unrealised operating exchange rate movements, impact of foreign exchange contracts and the
impact of IFRS16 (Leases). Adjusted EBITDA margin is defined as: Adjusted EBITDA as a percentage
of revenue.
Note 2: EBITDA: Earnings before interest, tax, depreciation, amortisation and impairment.
Includes a non-cash charge of GBP11.0 million for share based payments (2018: GBP5.7 million).
Note 3: Adjusted operating cash flow: Adjusted operating cash flow is cash generated from
operations adjusted for exceptional cash items. Underlying cash flow conversion is Adjusted
operating cash flow divided by Adjusted EBITDA.
Note 4: Change in accounting policy: Change in accounting policy relates to the impact of
adopting IFRS 16, excluded from adjusted EBITDA to allow for comparison with prior periods.
Consolidated Income Statement
Notes Year ended Year ended
31 December 31 December
2019 2018
Continuing operations GBP000s GBP000s
Revenue 3 178,195 157,553
Cost of sales (106,751) (98,153)
------------------------------------------------ ------ ------------- --------------------
Gross profit 71,444 59,400
Administrative expenses (26,262) (27,094)
Losses on trade receivables (2,278) (1,983)
Other expenses 4 (29,315) (35,500)
------------------------------------------------ ------ ------------- --------------------
Operating profit / (loss) 13,589 (5,177)
Analysed as:
Adjusted EBITDA(1) 44,564 32,230
Items associated with acquisitions and
restructure of the Group 4 (2,307) (6,842)
Other adjusting items 4 (10,735) (8,236)
Adjustment for change in accounting
policy (IFRS16) 2 4,021 -
------------------------------------------------ ------ ------------- --------------------
EBITDA(2) 35,543 17,152
Amortisation (17,147) (21,587)
Depreciation (4,807) (742)
------------------------------------------------ ------ ------------- --------------------
Operating profit/ (loss) 13,589 (5,177)
------------------------------------------------ ------ ------------- --------------------
Other income 2 1,274 -
Finance costs (4,692) (2,487)
Profit/ (loss) before tax from continuing
operations 10,171 (7,664)
Income tax expense (3,187) (3,408)
------------------------------------------------ ------ ------------- --------------------
Profit/ (loss) for the year from continuing
operations 6,984 (11,072)
Loss for the year from discontinued
operations - (1,255)
------------------------------------------------ ------ ------------- --------------------
Profit/ (loss) for the year 6,984 (12,327)
Attributable to:
Equity holders of the parent 6,984 (12,434)
Non-controlling interest - 107
Earnings/ (loss) per share attributable
to equity holders from continuing operations: 5
Basic profit/ (loss) per share (pence) 5.99 (10.17)
Diluted profit/ (loss) per share (pence) 5.55 (10.17)
Loss per share attributable to equity
holders from discontinued operations:
Basic loss per share (pence) - (1.14)
Diluted loss per share (pence) - (1.14)
Total basic profit/ (loss) per share
(pence) 5.99 (11.31)
Total diluted profit/ (loss) per share
(pence) 5.55 (11.31)
------------------------------------------------ ------ ------------- --------------------
The accompanying notes form an integral part of this financial
report.
(1) 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, impact of foreign exchange contracts and the impact of
IFRS16 (Leases). We present Adjusted EBITDA as additional
information because we understand that it is a measure used by
certain investors and because it is used as the measure of Group
profit or loss. However, other companies may present Adjusted
EBITDA differently. EBITDA and Adjusted EBITDA are not measures of
financial performance under IFRS and should not be considered as an
alternative to operating profit or as a measure of liquidity or an
alternative to net income as indicators of our operating
performance or any other measure of performance derived in
accordance with IFRS.
(2) EBITDA is defined as earnings before interest, tax,
depreciation, amortisation and impairment.
Consolidated Statement of Comprehensive Income
Year ended Year ended
31 December 31 December
2019 2018
GBP000s GBP000s
Profit/ (loss) for the year 6,984 (12,327)
Other comprehensive income
Items that will be classified subsequently
to profit or loss:
Net exchange (losses)/ gains on translation
of foreign entities (7) 988
Items that will not be classified subsequently
to profit or loss:
Re-measurement of pension liabilities and
assets (1,315) -
Other comprehensive (loss)/ gain, net of
tax (1,322) 988
------------------------------------------------ ------------- -------------
Total comprehensive gain/ (loss) for the
year 5,662 (11,339)
------------------------------------------------ ------------- -------------
Attributable to:
Equity holders of the parent 5,662 (11,446)
Non-controlling interest - 107
The accompanying notes form an integral part of this financial
report.
Consolidated Statement of Financial Position
Notes 31 December 2019 31 December 2018
GBP000s GBP000s
Non-current assets
Property, plant and equipment 47,364 1,314
Intangible assets 6 250,135 258,492
Trade and other receivables 1,850 2,775
Deferred tax assets 8,652 6,709
----------------------------------------------------- -------- ------------------- -------------------
308,001 269,290
----------------------------------------------------- -------- ------------------- -------------------
Current assets
Trade and other receivables 45,751 51,324
Short-term derivative assets 908 529
Cash and cash equivalents 11,232 6,268
----------------------------------------------------- -------- ------------------- -------------------
57,891 58,121
----------------------------------------------------- -------- ------------------- -------------------
Total assets 365,892 327,411
----------------------------------------------------- -------- ------------------- -------------------
Current liabilities
Trade and other payables (96,036) (92,660)
Short-term borrowings 7 (6,000) (6,000)
Short-term lease liabilities 7 (3,910) -
Current tax payable (1,897) (5,204)
Short-term derivative liabilities (101) (1,408)
Short-term provisions (90) (364)
----------------------------------------------------- -------- ------------------- -------------------
(108,034) (105,636)
----------------------------------------------------- -------- ------------------- -------------------
Non-current liabilities
Long-term provisions (491) (437)
Deferred tax liabilities (4,773) (6,571)
Long-term lease liabilities 7 (40,730) -
Long-term borrowings 7 (60,488) (64,341)
----------------------------------------------------- -------- ------------------- -------------------
(106,482) (71,349)
----------------------------------------------------- -------- ------------------- -------------------
Total liabilities (214,516) (176,985)
----------------------------------------------------- -------- ------------------- -------------------
Net assets 151,376 150,426
----------------------------------------------------- -------- ------------------- -------------------
Equity
Share capital 8 184 184
Share premium account 8 725 200
Treasury reserve 8 (11,017) (19,142)
Other reserve 8 (37,128) (37,128)
Merger reserve 8 163,810 163,810
Foreign currency translation reserve 8 791 798
Retained profit 34,011 41,704
----------------------------------------------------- -------- ------------------- -------------------
Equity attributable to equity holders of the parent 151,376 150,426
----------------------------------------------------- -------- ------------------- -------------------
These financial statements were approved by the board of
directors on 2 March 2020 and signed on its behalf by:
Bernard Cragg Mike Danson
Chairman Chief Executive
Company Number 03925319
The accompanying notes form an integral part of this financial
report.
Consolidated Statement of Changes in Equity
Share Share Other Merger Foreign Retained Equity Non-controlling Total
capital premium Treasury reserve reserve currency profit attributable interest equity
account reserve translation to equity
reserve holders
of the
parent
GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s
--------------------- -------- -------- ---------- --------- -------- ------------ --------- ------------- ---------------- ---------
Balance at 1 January
2018 173 200 (2,289) (37,128) 66,481 (190) 56,744 83,991 - 83,991
--------------------- -------- -------- ---------- --------- -------- ------------ --------- ------------- ---------------- ---------
(Loss)/ profit
for the year - - - - - - (12,434) (12,434) 107 (12,327)
Other comprehensive
income:
Net exchange gain
on translation
of foreign entities - - - - - 988 - 988 - 988
--------------------- -------- -------- ---------- --------- -------- ------------ --------- ------------- ---------------- ---------
Total comprehensive
loss for the year - - - - - 988 (12,434) (11,446) 107 (11,339)
--------------------- -------- -------- ---------- --------- -------- ------------ --------- ------------- ---------------- ---------
Transactions with
owners:
Acquisition of
entity with
non-controlling
interest - - - - - - - - 546 546
Acquisition of
non-controlling
interest - - - - - - (579) (579) (653) (1,232)
Issue of share
capital 11 - - - 97,329 - - 97,340 - 97,340
Excess deferred
tax on share
based
payments - - - - - - 1,404 1,404 - 1,404
Dividends - - - - - - (9,110) (9,110) - (9,110)
Share buy back - - (16,853) - - - - (16,853) - (16,853)
Share based
payments
charge - - - - - - 5,679 5,679 - 5,679
Balance at 31
December
2018 184 200 (19,142) (37,128) 163,810 798 41,704 150,426 - 150,426
Profit for the
year - - - - - - 6,984 6,984 - 6,984
Other comprehensive
income:
Re-measurement
of pension
liabilities
and assets - - - - - - (1,315) (1,315) - (1,315)
Net exchange loss
on translation
of foreign entities - - - - - (7) - (7) - (7)
--------------------- -------- -------- ---------- --------- -------- ------------ --------- ------------- ---------------- ---------
Total comprehensive
profit for the
year - - - - - (7) 5,669 5,662 - 5,662
--------------------- -------- -------- ---------- --------- -------- ------------ --------- ------------- ---------------- ---------
Transactions with
owners:
Share buy back - - (3,602) - - - - (3,602) - (3,602)
Dividends - - - - - - (14,590) (14,590) - (14,590)
Vesting of share
options - 525 11,727 - - - (12,252) - - -
Share based
payments
charge - - - - - - 11,016 11,016 - 11,016
Excess deferred
tax on share
based
payments - - - - - - 2,464 2,464 - 2,464
Balance at 31
December
2019 184 725 (11,017) (37,128) 163,810 791 34,011 151,376 - 151,376
--------------------- -------- -------- ---------- --------- -------- ------------ --------- ------------- ---------------- ---------
The accompanying notes form an integral part of this financial
report.
Consolidated Statement of Cash Flows
Year ended Year ended
31 December 31 December
2019 2018
GBP000s GBP000s
Cash flows from operating activities
Profit/ (loss) for the year from continuing
operations 6,984 (11,072)
Adjustments for:
Depreciation 4,807 742
Amortisation 17,147 21,587
Other Income (1,274) -
Finance costs 4,692 2,487
Taxation recognised in profit or loss 3,187 3,408
Share based payments charge 11,016 5,679
Re-measurement of pension liabilities and (1,315) -
assets
Decrease in trade and other receivables 6,607 1,606
Increase/ (decrease) in trade and other
payables 2,769 (729)
Revaluation of short and long-term derivatives (1,686) 1,150
Movement in provisions (584) 200
--------------------------------------------------- ------------- -------------
Cash generated from continuing operations 52,350 25,058
Interest paid (continuing operations) (3,014) (2,173)
Income taxes paid (continuing operations) (7,797) (2,255)
--------------------------------------------------- ------------- -------------
Net cash from operating activities (continuing
operations) 41,539 20,630
Net decrease in cash and cash equivalents
from discontinued operations - (912)
--------------------------------------------------- ------------- -------------
Total cash flows from operating activities 41,539 19,718
--------------------------------------------------- ------------- -------------
Cash flows from investing activities (continuing
operations)
Acquisitions (8,132) (4,607)
Purchase of property, plant and equipment (1,560) (724)
Purchase of intangible assets (1,058) (890)
--------------------------------------------------- ------------- -------------
Net cash used in investing activities (continuing
operations) (10,750) (6,221)
Net decrease in cash and cash equivalents
from discontinued operations - (235)
--------------------------------------------------- ------------- -------------
Total cash flows used in investing activities (10,750) (6,456)
--------------------------------------------------- ------------- -------------
Cash flows from financing activities (continuing
operations)
Repayment of borrowings (10,500) (14,408)
Proceeds from borrowings 6,425 30,473
Principal elements of lease payments (3,557) -
Loan fees - (285)
Acquisition of own shares (3,602) (16,853)
Dividends paid (14,590) (9,110)
--------------------------------------------------- ------------- -------------
Total cash used in financing activities
(continuing operations) (25,824) (10,183)
--------------------------------------------------- ------------- -------------
Net increase in cash and cash equivalents 4,965 3,079
Cash and cash equivalents at beginning
of year 6,268 2,952
Effects of currency translation on cash
and cash equivalents (1) 237
--------------------------------------------------- ------------- -------------
Cash and cash equivalents at end of year 11,232 6,268
--------------------------------------------------- ------------- -------------
The accompanying notes form an integral part of this financial
report.
Notes to the Consolidated Financial Statements
1. General information
Nature of operations
The principal activity of GlobalData Plc and its subsidiaries
(together 'the Group') is the provision of high quality proprietary
data, analytics, and insights to clients across 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
The financial statements have been prepared under the historical
cost convention as modified by the revaluation of derivative
financial instruments. These condensed financial statements are for
the year ended 31 December 2019 and should be read in conjunction
with the Annual Report and Accounts for the year ended 31 December
2019 that is available on the Company's website. These financial
statements are presented in Pounds Sterling (GBP).
This preliminary announcement does not constitute the Group's
full financial statements for the year ended 31 December
2019. The auditors have reported on the Group's statutory
accounts for the year ended 31 December 2019 under s495 of the
Companies Act 2006, which do not contain statements under s498(2)
or s498(3) of the Companies Act 2006 and are unqualified. The
statutory accounts for the year ended 31 December 2019 will be
filed with the Registrar of companies in due course.
Critical accounting estimates and judgements
The Group makes estimates and assumptions regarding the future.
Estimates and judgements are continually evaluated based on
historical experience and other factors, including expectations of
future events that are believed to be reasonable under the
circumstances.
In the future, actual experience may deviate from these
estimates and assumptions. The estimates and assumptions that have
a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year
are discussed in detail below.
Key sources of estimation of uncertainty
Valuation of acquired intangibles
Management identified and valued acquired intangible assets on
acquisitions that were made during the periods disclosed in the
financial statements. Management has applied judgements in
identifying and valuing intangible assets separate from goodwill
that consist of assessing the value of software, brands,
intellectual property rights and customer relationships. The Board
have a policy of engaging professional advisors on acquisitions
with a purchase price greater than GBP10 million to advise and
assist in calculating intangible asset values. The Group
consistently applies the following methodologies for each class of
identified intangible:
-- Customer relationships - Net present value of future cash flows
-- Intellectual Property - Cost to recreate the asset
-- Brands - Royalty relief method
Assumptions are made on the useful life of an intangible and if
shortened, would increase the amortisation charge recognised in the
income statement. The identified intangibles are set out in note
6.
There are a number of assumptions in estimating the present
value of future cash flows including management's expectation of
future revenue, renewal rates for subscription customers, costs,
timing and quantum of future capital expenditure, long-term growth
rates and discount rates.
Taxation
The Group has recognised a deferred income tax asset in its
financial statements, which requires judgement for determining the
extent of its recoverability at each statement of financial
position date. The Group assesses recoverability with reference to
Board approved forecasts of future taxable profits. These forecasts
require the use of assumptions and estimates. Where the temporary
differences are related to losses, relevant tax law is considered
to determine the availability of the losses to offset against the
future taxable profits. A deferred tax asset additionally exists in
relation to the temporary tax and accounting difference in relation
to the share based payment scheme. Additional disclosures on the
calculation of share based payments are provided in note 9.
The Group has recognised an accrual of GBP1.0m in its financial
statements in relation to the Wayfair sales tax ruling. On 21 June
2018 The United States Supreme Court ruled that states can mandate
that businesses without a physical presence collect and remit sales
taxes on transactions in the state. The accrual represents sales
tax not collected and remitted and an estimate of associated
penalties and interest.
Share based payments
The Group operates two share 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. The total amount to
be expensed is determined by reference to the fair value of the
options granted, 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). Non-market vesting conditions are included
in assumptions about the number of options and awards that are
expected to vest. The total amount expensed is recognised over the
vesting period, which is the period over which all of the specified
existing conditions are to be satisfied. At each reporting date,
the entity revises its estimates of the number of options and
awards that are expected to vest based on the non-market vesting
conditions. It recognises the impact of the revision to original
estimates, if any, in the income statement, with a corresponding
adjustment to equity. The significant judgements involved in
calculating the share based payments charge are:
-- Scheme 1: the fair value at the date of grant which is
determined by using the Black-Scholes model, the senior management
retention rate which is determined with reference to historical
churn and the estimated vesting periods which are determined with
reference to the Group's forecasted EBITDA.
-- Scheme 2: the fair value at the date of grant which is
determined by using the Monte Carlo model and the senior management
retention rate which is determined with reference to historical
churn. The use of the Monte Carlo model and calculation of the
associated input parameters requires judgement therefore management
obtained professional advice to assist in determining the fair
value of the awards granted.
Additional disclosures on the calculation of share based
payments are provided in note 9.
Provision for doubtful debts
The Group is required to judge when there is sufficient
objective evidence to require the impairment of individual trade
receivables. It does this on a specific basis with reference to the
age of the relevant receivables, external evidence of the credit
status of the customer entity and the status of any disputed
amounts. The Group will also review the previous payment profile of
the customer and liaise with the customers' management team before
concluding on whether a provision is required. In addition, the
Group recognises lifetime expected credit losses for trade
receivables which are estimated based on the Group's historical
credit loss experience, adjusted for factors that are specific to
the debtors, general economic conditions and an assessment of both
the current as well as the forecast direction of conditions at the
reporting date.
Carrying value of goodwill and other intangibles
The carrying value of goodwill and other intangibles is assessed
at least annually to ensure that there is no need for impairment.
Performing this assessment requires management to estimate future
cash flows to be generated by the related cash generating unit,
which entails making judgements including the expected rate of
growth of sales, margins expected to be achieved, the level of
future capital expenditure required to support these outcomes and
the appropriate discount rate to apply when valuing future cash
flows. See note 6 for further details on intangibles and
goodwill.
Lease accounting - incremental borrowing rate
IFRS 16 "Leases" requires lease payments to be discounted using
the lessee's incremental borrowing rate. The Group's incremental
borrowing rate, as at the date of adoption of IFRS 16, has been
based on the existing revolving credit facility margin (2.75% as at
1 January 2019) plus a local government bond yield (comparable to
the lease term remaining and hence specific to each lease) less a
secured loan discount of 0.5% (India being the exception where no
secured loan discount has been assumed). Management have taken the
view that specific costs of borrowing should be applied to each
lease as this reflects the different economic conditions within
each geography and hence is more representative of the funding
facilities available in those countries.
Critical accounting judgements
Segmental reporting
IFRS 8 "Operating Segments" requires the segment information
presented in the financial statements to be that which is used
internally by the chief operating decision maker to evaluate the
performance of the business and to decide how to allocate
resources. The Group has identified the Executive Directors as its
chief operating decision maker. Data, analytics and insight is
provided to customers via multiple channels by a dedicated content
team that is centrally managed by Research Directors who report
directly to the Executive Directors. Data, analytics and insight is
therefore considered to be the operating segment of the Group.
Defined benefit pension
As part of the acquisition of Research Views Limited and its
subsidiaries, the Group acquired a defined benefit pension scheme.
As at 31 December 2019 the defined benefit obligation was equal to
the fair value of the plan assets. On 16 December 2019 the Group
entered into an irrevocable agreement to sell the pension scheme to
Just Retirement Limited ("Just"). The agreement involved the
purchase of a qualifying insurance policy pre year end at a cost to
GlobalData Plc of GBP1.3m. This has been measured at the amount of
the related defined benefit obligation as required by IAS 19. Final
buy-out is expected to take place within six to twelve months.
Management have considered the accounting options available and
believe that the buy-in represents an asset transaction. As such,
the re-measurement cost has been recognised within the Statement of
Comprehensive Income.
Allocation of Cash-Generating-Units
IAS 36 'Impairment of Assets' requires that assets be carried on
the statement of financial position at no more than their
recoverable amount. An asset or cash-generating unit (CGU) is the
smallest identifiable group of assets that generates cash inflows
and is impaired when its carrying amount exceeds its recoverable
amount. The CGU's that management have identified are all part of
the data, analytics, and insights segment, which can all be traced
back to acquisitions over recent years and for which management are
still able to identify specific cash flows.
Going concern
The Group meets its day-to-day working capital requirements
through free cash flow. Based on cash flow projections the Group
considers the existing financing facilities to be adequate to meet
short-term commitments.
The finance facilities were issued with debt covenants which are
measured on a quarterly basis. There have been no breaches of
covenants in the year ended 31 December 2019. Management have
reviewed forecasted cash flows and there is no indication that
there will be any breach in the next 12 months.
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 approval of the financial
statements. Accordingly, the Group has prepared the annual report
and financial statements on a going concern basis
2. Accounting policies
This report has been prepared based on the accounting policies
detailed in the Group's financial statements for the year ended 31
December 2019 and is consistent with the policies applied in the
previous year, except for the new standard now effective, IFRS
16.
a) New Standards adopted as at 1 January 2019
IFRS 16 'Leases'
This note explains the impact of the adoption of IFRS 16
'Leases' on the Group's financial statements and discloses the new
accounting policy that has been applied from 1 January 2019.
IFRS 16 replaces IAS 17 'Leases' along with three
Interpretations (IFRIC 4 'Determining whether an Arrangement
contains a lease', SIC 15 'Operating Leases-Incentives' and SIC 27
'Evaluating the Substance of Transactions Involving the Legal Form
of a Lease').
The adoption of this new Standard has resulted in the Group
recognising a right-of-use asset and related liability in
connection with all former operating leases with the exception of
those identified as low-value or having a remaining lease term of
less than 12 months from the date of initial application.
The new standard has been applied using the "modified
retrospective" transition approach. There is no adjustment to the
opening balance of retained earnings for the current period however
reclassifications arising from the new standard have been
recognised in the opening balances as at 1 January 2019. Prior
periods have not been restated, as permitted under the specific
transitional provisions in the standard.
For contracts in place at 1 January 2019, the Group has elected
to apply the definition of a lease from IAS 17 and IFRIC 4 and has
not applied IFRS 16 to arrangements that were previously not
identified as leases under IAS 17 and IFRIC 4.
The Group has elected to measure the right-of-use assets at 1
January 2019 at an amount equal to the lease liability, adjusted
for any prepaid or accrued lease payments that existed at the date
of transition. The liabilities were measured at the present value
of the remaining lease payments, discounted using the weighted
average incremental borrowing rate, ranging between 2.0% and 7.4%
based on the length of the remaining lease.
On transition, for leases previously accounted for as operating
leases with a remaining lease term of less than 12 months and for
leases of low-value assets the Group has applied the optional
exemptions to not recognise right-of-use assets but to account for
the lease expense on a straight-line basis over the remaining lease
term.
The Group has benefited from the use of hindsight for
determining the lease term when considering options to extend and
terminate leases.
The following is a reconciliation of total operating lease
commitments at 31 December 2018 (as disclosed in the financial
statements to 31 December 2018) to the lease liabilities recognised
at 1 January 2019:
GBP000s
Total operating lease commitments disclosed at
31 December 2018 41,684
-------------------------------------------------------------- --------
Recognition exemptions at 1 January 2019:
* Leases with remaining lease term of less than 12
months (1,789)
Leases committed to at 31 December 2018 but not
commenced at 1 January 2019 (1,915)
Commitments not meeting the definition of a right-of-use
asset (26)
-------------------------------------------------------------- --------
Operating lease liabilities before discounting 37,954
Discounted using incremental borrowing rate (5,792)
-------------------------------------------------------------- --------
Operating lease liabilities 32,162
Reasonably certain extension options - discounted 3,923
Total lease liabilities recognised under IFRS 16
at 1 January 2019 36,085
-------------------------------------------------------------- --------
Of which are:
* Current lease liabilities 2,428
* Non-current lease liabilities 33,657
At 1 January 2019 the recognised right-of-use assets all relate
to Property. Instead of performing an impairment review on the
right-of-use assets at the date of initial application, the Group
has relied on its historic assessment as to whether leases were
onerous immediately before the date of initial application of IFRS
16. This assessment identified one onerous lease contract requiring
an adjustment to the right-of-use asset at the date of initial
application.
The Group sub-leases a number of properties in the UK however
all of the risks and rewards of ownership have not been transferred
to the lessee and therefore the Group recognises the head lease
asset as a right-of-use asset and recognises the rental income on
the sub-lease operating lease contracts as other income.
The adoption of IFRS 16 has impacted the following items:
Impact on Statement of Financial Position As at 1 January 2019 As at 31 December 2019 (1)
Assets Liabilities Assets Liabilities
GBP000s GBP000s GBP000s GBP000s
Gross right-of-use assets and lease liabilities 36,085 (36,085) 44,767 (45,093)
Adjustment for onerous lease provision (50) - (22) -
Prepaid rent - 506 - 540
Accrued rent - (60) - (87)
-------------------------------------------------- --------- ------------ ----------- ----------------
Right-of-use assets and lease liabilities 36,035 (35,639) 44,745 (44,640)
Provisions - 50 - 22
Prepayments (506) - (540) -
Accruals - 60 - 87
-------------------------------------------------- --------- ------------ ----------- ----------------
Total impact on assets/ (liabilities) 35,529 (35,529) 44,205 (44,531)
-------------------------------------------------- --------- ------------ ----------- ----------------
(1) Balances as at 31 December 2019 are inclusive of leases
commencing in the twelve months to 31 December 2019.
(2) As presented in the Consolidated Statement of Financial
Position
The adoption of IFRS 16 on 1 January 2019 had a nil impact on
the net assets of the Group due to applying the modified
retrospective approach: assets = liabilities. As at 31 December
2019 lease liabilities of GBP44.6m do not match the value of the
right-of-use assets due to the depreciation charge in the period
being lower than the lease repayments (net of interest charges) and
the allocation of rent prepayments and accruals to the
liabilities.
A reconciliation of the value of right-of-use assets and lease
liabilities from 1 January 2019 to 31 December 2019 is presented
below:
Right-of-use assets Lease liabilities
GBP000s GBP000s
Right-of-use assets and lease liabilities as at 1 January 2019 36,035 (35,639)
Additions 12,724 (12,724)
Disposals (61) 64
Depreciation (4,008) -
Foreign currency retranslation 55 7
Lease interest - (1,543)
Lease payments - 4,801
Dilapidation costs recognised within provisions - 387
Increase in rent prepayments - 34
Increase in rent accruals - (27)
--------------------------------------------------------------------- -------------------- ------------------
Right-of-use assets and lease liabilities as at 31 December 2019 44,745 (44,640)
-------------------------------------------------------------------- -------------------- ------------------
Current lease liabilities (3,910)
Non-current lease liabilities (40,730)
---------------------------------------------------- ---------
Total lease liabilities as at 31 December 2019 (44,640)
------------------------------------------------- ---------
Impact on Income Statement:
Gain/ 12 months
(Cost) to
31 December
2019
GBP000s
Administrative costs (1) Gain 4,021
Impact on EBITDA 4,021
Depreciation (Cost) (4,008)
Sub-lease income Gain 1,274
Finance costs (Cost) (1,543)
Impact on Profit before tax (Cost) (256)
----------------------------- ----------- --------------
(1) Net rental costs and dilapidation provision charges no
longer charged through Administrative expenses
Prior to the adoption of IFRS 16 rental payments were charged to
the income statement on a straight-line basis net of rental income
received on sub-lease contracts. Under IFRS 16 rental charges in
the income statement are replaced with depreciation on the
right-of-use asset and interest charges on the lease liability. The
adoption of IFRS 16 therefore gives rise to a net cost of GBP0.3m
in the twelve months to 31 December 2019, reflecting depreciation
and interest charges of GBP5.6m being GBP0.3m higher than the net
rental charges which would have been incurred prior to the adoption
of the new standard. At EBITDA the adoption of IFRS 16 gives a
benefit of GBP4.0m being the elimination of the rental charges, net
of the rental income. The effect on earnings per share as at 31
December 2019 is a reduction of less than 0.22 pence.
In applying IFRS 16 for the first time, the Group has used the
following practical expedients permitted by the standard:
-- Reliance on historic assessments as to whether leases are onerous
-- Account for operating leases with a remaining lease term of
less than 12 months as at 1 January 2019 as short term leases and
expense on a straight line basis over the remaining lease term
-- Account for leases of low value assets on a straight line
basis and not recognise as a right-of-use asset
-- Exclusion of initial direct costs for the measurement of the
right-of-use asset at the date of initial application
-- The use of hindsight in determining the lease term where the
contract contains options to extend or terminate the lease.
Termination options are included in a number of property leases
contracts across the Group. Management have assumed that no
termination options will be taken. Variable lease payments (fixed
annual percentage increases) are also included in a number of
leases. Management have factored these future lease cash flows into
the valuation of the lease liability and right-of-use asset.
b) International Financial Reporting Standards ("Standards") in
issue but not yet effective
The Group has not applied the following new and revised IFRSs
that have been issued but are not yet effective:
-- Amendments to IFRS 3: Business Combinations (issued on 22
October 2018 and effective for periods on or after 1 January
2020)
-- Amendments to References to the Conceptual Framework in IFRS
Standards (issued on 29 March 2018 and effective for periods on or
after 1 January 2020)
Neither of the above standards are effective and therefore have
not been applied in the financial statements.
It is anticipated that there will be minimal impact on the
financial statements from the adoption of these new and revised
standards.
3. Segmental analysis
The principal activity of GlobalData Plc and its subsidiaries
(together 'the Group') is to provide high quality proprietary data,
analytics, and insights to clients across 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 Executive Directors as its
chief operating decision maker. Data, analytics and insight is
provided to customers through multiple channels by a dedicated
content team that is centrally managed by Research Directors who
report directly to the Executive Directors. Data, analytics and
insight is therefore considered to be the operating segment of the
Group.
The performance of the data, analytics, and insights segment is
presented to the Executive Directors on a monthly basis, which
assists the Board in their strategic decision making. Performance
of the business is mainly assessed by reference to analysing the
performance of individual sales teams which guides operational
decision making. The product cost is managed and assessed
independently and outside of the sales reviews, however the overall
performance of the Group is reviewed on a Group wide basis, all of
which falls under the segment of data, analytics, and insights.
Margins are only considered at Group level.
A reconciliation of Adjusted EBITDA to profit/ (loss) before tax
from continuing operations is set out below:
Year ended 31
December 2019 Year ended 31 December 2018
GBP000s GBP000s
Data, analytics, and insights 178,195 157,553
Total Revenue 178,195 157,553
Adjusted EBITDA 44,564 32,230
Other expenses (see note 4) (29,315) (35,500)
Depreciation (4,807) (742)
Amortisation (excluding amortisation of acquired intangible assets) (874) (1,165)
Other income 1,274 -
Effect of change in accounting policy - IFRS16 4,021 -
Finance costs (4,692) (2,487)
Profit/ (loss) before tax from continuing operations 10,171 (7,664)
--------------------------------------------------------------------- --------------- ----------------------------
Other income relates to amounts received on sub-let properties
capitalised under IFRS16.
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 customer rather than
the team structure the Group is organised by.
From continuing operations
Year ended 31 December 2019 UK Europe Americas (1) Asia Pacific MENA (2) Rest of World Total
GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s
Revenue from external
customers 27,658 49,424 62,035 17,674 14,997 6,407 178,195
------------------------------- -------- -------- ------------- ------------- --------- -------------- --------
Year ended 31 December 2018 UK Europe Americas (1) Asia Pacific MENA (2) Rest of World Total
GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s
Revenue from external
customers 25,322 42,848 54,263 14,967 14,662 5,491 157,553
------------------------------- -------- -------- ------------- ------------- --------- -------------- --------
1. Americas includes revenue to the United States of America of GBP58.5m (2018: GBP51.4m)
2. Middle East & North Africa
Intangible assets held in the US and Canada were GBP21.5 million
(2018: GBP23.2 million), of which GBP19.7 million related to
Goodwill (2018: GBP18.1 million). Intangible assets held in the UAE
were GBP15.9 million (2018: GBP17.5 million) of which GBP11.4
million related to Goodwill (2018: GBP11.4 million). All other
non-current assets are held in the UK. The largest customer
represented less than 2% of the Group's consolidated revenue.
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,
"invoiced forward 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 invoiced forward 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 Invoiced Forward Revenue recognised within
Statement the Consolidated Statement of Financial
Position
Year ended 31 Year ended 31 As at 31 December As at 31 December
December 2019 December 2018 2019 2018
GBP000s GBP000s GBP000s GBP000s
Services transferred:
Over a period of
time 138,945 116,807 57,527 55,490
Immediately on
delivery 39,250 40,746 11,084 11,670
----------------------- ---------------------- ---------------------- --------------------- ----------------------
Total 178,195 157,553 68,611 67,160
As subscriptions are typically for periods of 12 months the
majority of invoiced forward revenue held at 31 December will be
recognised in the income statement in the following year. As at 31
December 2019 GBP0.8m (2018: GBP1.1m) of the invoiced forward
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.
4. Other expenses
Year ended 31 December 2019 Year ended 31 December 2018
GBP000s GBP000s
Restructuring costs 763 3,661
M&A costs 1,544 3,181
Items associated with acquisitions and restructure of the
Group 2,307 6,842
Share based payments charge - scheme 1 10,882 5,679
Share based payments charge - scheme 2 134 -
Revaluation of short and long-term derivatives (1,686) 1,150
Unrealised operating foreign exchange loss 1,405 1,407
Amortisation of acquired intangibles 16,273 20,422
Total other expenses 29,315 35,500
---------------------------------------------------------- ---------------------------- ----------------------------
Over the past three years the Group has undergone significant
M&A activity, particularly the acquisition of Research Views
Limited in 2018, therefore costs associated with the M&A have
been adjusted from Adjusted EBITDA.
Furthermore, the Group's M&A and expansion meant the Group
underwent some significant restructuring, principally as a result
of the Research Views Limited acquisition, but also to remove
duplicated costs from prior acquisitions and to align the Group's
cost base to its strategy and needs going forward.
The adjustments made are as follows:
-- The M&A costs relate to due diligence and corporate finance activity.
-- Restructuring costs relates to redundancies and other restructuring.
-- The share based payments charge relates to the share option scheme (see note 9).
-- The revaluation of short and long-term derivatives relates to
movement in the fair value of the short and long-term
derivatives.
-- Unrealised operating foreign exchange losses relate to
non-cash exchange losses made on operating items.
5. 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 year. The Group also has two share option schemes in
place and therefore the Group has calculated the dilutive effect of
these options. The below table shows earnings per share for both
continuing and discontinued operations:
Year ended 31 December Year ended 31 December
2019 2018
Continuing operations
Basic
Profit/ (loss) for the period attributable to ordinary
shareholders (GBP000s) 6,984 (11,072)
Less: non-controlling interest - 107
Profit/ (loss) for the period attributable to ordinary
shareholders of the parent company
(GBP000s) 6,984 (11,179)
Weighted average number of shares (000s) 116,501 109,926
Basic profit/ (loss) per share (pence) 5.99 (10.17)
Diluted
Profit/ (loss) for the period attributable to ordinary
shareholders (GBP000s) 6,984 (11,072)
Less: non-controlling interest - 107
Profit/ (loss) for the period attributable to ordinary
shareholders of the parent company
(GBP000s) 6,984 (11,179)
Weighted average number of shares* (000s) 125,733 109,926
Diluted profit/(loss) per share (pence) 5.55 (10.17)
Discontinued operations
Basic
Profit/ (loss) for the period attributable to ordinary
shareholders of the parent company
(GBP000s) - (1,255)
Weighted average number of shares (000s) 116,501 109,926
Basic profit/ (loss) per share (pence) - (1.14)
Diluted
Profit/ (loss) for the period attributable to ordinary
shareholders of the parent company
(GBP000s) - (1,255)
Weighted average number of shares* (000s) 125,733 109,926
Basic profit/ (loss) per share (pence) - (1.14)
------------------------------------------------------------------ ----------------------- -----------------------
Total
Basic
Profit/ (loss) for the period attributable to ordinary
shareholders (GBP000s) 6,984 (12,327)
Less: non-controlling interest - 107
Profit/ (loss) for the period attributable to ordinary
shareholders of the parent company
(GBP000s) 6,984 (12,434)
Weighted average number of shares (000s) 116,501 109,926
Basic profit/ (loss) per share (pence) 5.99 (11.31)
Diluted
Profit/ (loss) for the period attributable to ordinary
shareholders (GBP000s) 6,984 (12,327)
Less: non-controlling interest - 107
Profit/ (loss) for the period attributable to ordinary
shareholders of the parent company
(GBP000s) 6,984 (12,434)
Weighted average number of shares* (000s) 125,733 109,926
Diluted profit/ (loss) per share (pence) 5.55 (11.31)
------------------------------------------------------------------ ----------------------- -----------------------
Reconciliation of basic weighted average number of shares to the
diluted weighted average number of shares:
31 December 31 December
2019 2018
No'000s No'000s
Basic weighted average number of shares 116,501 109,926
Share options in issue at end of year 9,232 9,590
------------------------------------------- ------------ ------------
Diluted weighted average number of shares 125,733 119,516
------------------------------------------- ------------ ------------
* Where the share options in issue are anti-dilutive in respect
of the diluted loss per share calculation in 2018, the options have
not been included in the calculation.
6. Intangible assets
Software Customer relationships Brands IP rights and Database Goodwill Total
GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s
Cost
As at 1 January 2018 8,682 32,755 12,439 26,885 128,234 208,995
Additions: Business
Combinations 371 9,921 3,268 21,465 94,120 129,145
Additions: Separately
Acquired 890 - - - - 890
Fair value adjustment (177) (65) - - 406 164
Foreign currency
retranslation 7 - - - - 7
Disposals (48) - - (1,287) - (1,335)
As at 31 December 2018 9,725 42,611 15,707 47,063 222,760 337,866
Additions: Business
Combinations - 967 329 1,896 4,462 7,654
Additions: Separately
Acquired 1,058 - - - - 1,058
Fair value adjustment - - - - 88 88
Foreign currency
retranslation (65) (15) (5) (20) 1 (104)
As at 31 December 2019 10,718 43,563 16,031 48,939 227,311 346,562
------------------------- --------- ----------------------- -------- ----------------------- --------- ---------
Amortisation
As at 1 January 2018 (6,868) (16,656) (3,887) (21,676) (9,360) (58,447)
Additions: Business
Combinations (199) - - - - (199)
Charge for the year (1,115) (4,197) (4,280) (11,343) (652) (21,587)
Impairment of goodwill - - - - (535) (535)
Fair value adjustment 85 - - - - 85
Foreign currency
retranslation (14) (2) (6) (4) - (26)
Disposals 48 - - 1,287 - 1,335
------------------------- --------- ----------------------- -------- ----------------------- --------- ---------
As at 31 December 2018 (8,063) (20,855) (8,173) (31,736) (10,547) (79,374)
Charge for the year (824) (4,252) (1,423) (10,648) - (17,147)
Foreign currency
retranslation 56 14 4 20 - 94
As at 31 December 2019 (8,831) (25,093) (9,592) (42,364) (10,547) (96,427)
------------------------- --------- ----------------------- -------- ----------------------- --------- ---------
Net book value
As at 31 December 2019 1,887 18,470 6,439 6,575 216,764 250,135
As at 31 December 2018 1,662 21,756 7,534 15,327 212,213 258,492
------------------------- --------- ----------------------- -------- ----------------------- --------- ---------
Additions as a result of business combinations in the year have
been disclosed in further detail in note 10.
7. Borrowings
31 December 31 December
2019 2018
GBP000s GBP000s
Lease liabilities 3,910 -
Loans due within one year 6,000 6,000
Short-term borrowings 9,910 6,000
---------------------------- ------------ ------------
Lease liabilities 40,730 -
Long-term loans 60,488 64,341
Long-term borrowings 101,218 64,341
----------------------- -------- -------
The changes in the Group's borrowings can be classified as
follows:
Long-term Short-term Long-term
Loans lease lease
Short-term liabilities liabilities
loans (1) (1) Total
GBP000s GBP000s GBP000s GBP000s GBP000s
As at 1 January 2019 6,000 64,341 - - 70,341
Adoption of IFRS 16 - - 1,983 33,656 35,639
------------------------------------ --------------- ------------ --------------- --------------- ---------
Revised 1 January 2019 6,000 64,341 1,983 33,656 105,980
------------------------------------ --------------- ------------ --------------- --------------- ---------
Cash-flows:
* Repayment (6,000) (4,500) (4,801) - (15,301)
* Proceeds - 6,425 - - 6,425
Non-cash:
* Loan fee amortisation - 222 - - 222
* Lease additions - - 3,435 9,289 12,724
* Lease liabilities (2) - - 1,435 (357) 1,078
* Reclassification 6,000 (6,000) 1,858 (1,858) -
As at 31 December 2019 6,000 60,488 3,910 40,730 111,128
------------------------------------ --------------- ------------ --------------- --------------- ---------
(1) Amounts are net of rental prepayments and accruals
(2) Represents lease interest, dilapidations and movement on lease liability accruals and
prepayments
Term loan and RCF
In April 2017, the Group refinanced its debt position. The
facility consists of a GBP30.0 million term loan to replace the
previous facilities held with The Royal Bank of Scotland. This is
repayable in quarterly instalments over 5 years, with total
repayments due in the next 12 months of GBP6.0 million. The
outstanding balance as at 31 December 2019 was GBP13.5 million (31
December 2018: GBP19.5 million).
The Group also has a revolving capital facility (RCF) of GBP70.0
million. As at 31 December 2019, the Group had drawn down GBP53.5
million against the RCF.
In addition to the drawn down facilities there is a letter of
credit against the facility of GBP10.3 million which has been
provided to the Employee Benefit Trust (EBT). This is in place in
relation to a potential tax liability which management have
assessed to be remote in likelihood of being paid. As such, a
provision has not been recognised in the Consolidated Statement of
Financial Position.
These facilities have been provided by The Royal Bank of
Scotland, HSBC and Bank of Ireland.
Interest is charged on the term loan and drawn down RCF at a
rate of 2.25% over the London Interbank Offered Rate.
Borrowings can be reconciled as follows:
31 December 31 December
2019 2018
GBP000s GBP000s
Lease liabilities 44,640 -
Term loan 13,500 19,500
RCF 53,498 51,573
Capitalised fees, net of amortised
amount (510) (732)
111,128 70,341
------------------------------------ ------------ ------------
8. Equity
Share capital
Allotted, called up and fully paid:
31 December 2019 31 December 2018
No'000 GBP000s No'000 GBP000s
Ordinary shares as at 1 January (1/14(th) pence) 118,303 84 102,346 73
Issue of shares: Consideration Research Views Limited - - 15,957 11
------------------------------------------------------ ------------ ----------- ----------- ----------
Ordinary shares as at 31 December (1/14(th) pence) 118,303 84 118,303 84
------------------------------------------------------ ------------ ----------- ----------- ----------
Deferred shares of GBP1.00 each 100 100 100 100
------------------------------------------------------ ------------ ----------- ----------- ----------
118,403 184 118,403 184
------------------------------------------------------ ------------ ----------- ----------- ----------
Share Purchases
As detailed in note 9, during the period the Group's Employee
Benefit Trust purchased an aggregate amount of 467,400 shares at a
total market value of GBP3,602,000. 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 March 2019, 2.1 million outstanding share options held by
GlobalData employees vested in accordance with the EBITDA target
being satisfied under Tranche 2a 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 (note 7) 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 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 2018 was 7.5p per share and was paid in
April 2019. The total dividend for the current year was 15.0 pence
per share, with an interim dividend of 5.0 pence per share paid on
3 October 2019 to shareholders on the register at the close of
business on 30 August 2019 and a final dividend of 10.0 pence per
share will be paid on 24 April 2020 to shareholders on the register
at the close of business on 27 March 2020. The ex-dividend date
will be on 26 March 2020.
Share Premium
Proceeds received in addition to the nominal value of shares
issued have been included in the Share premium account. The
increase to the Share premium account in 2019 relates to the
vesting of share options (note 9).
Merger reserve
The merger reserve contains the premium on the shares issued in
consideration for the purchase of GlobalData Holding Limited in
2016 and the premium on the shares issued in consideration for the
purchase of Research Views Limited and its subsidiaries 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.
Other reserve
Other reserves consist of a reserve created upon the reverse
acquisition of the TMN Group Plc in 2009. The parent company
reserve differs from this due to the restatement of consolidated
reserves at the time of the reverse acquisition. The parent company
other reserve was generated in 2008 upon the issue of shares to
fund acquisitions.
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.
9. 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 and EBITDA
targets being met. For these options to be exercised the Group's
earnings before interest, taxation, depreciation and amortisation,
as adjusted by the Remuneration Committee for significant or
one-off occurrences, must exceed certain targets. The fair values
of options granted were determined using the Black-Scholes model.
The inputs used in the model were:
-- share price at date of grant
-- exercise price
-- time to maturity
-- annual risk-free interest rate and;
-- annualised volatility
The following assumptions were used in the valuation:
Award Tranche Grant Date Fair Value Estimated Weighted
of Share Exercise Forfeiture Average
Price at Price rate p.a. of Remaining
Grant Date (Pence) Contractual
Life (Years)
--------------- ---------------- ------------- ----------- ------------ --------------
Award 1 1 January 2011 GBP1.089 0.0714p 0% 1.0
Award 3 1 May 2012 GBP1.866 0.0714p 0% 1.0
Award 4 7 March 2014 GBP2.550 0.0714p 0% 1.0
22 September
Award 6 2014 GBP2.525 0.0714p 0% 1.0
9 December
Award 7 2014 GBP2.075 0.0714p 0% 1.0
31 December
Award 8 2014 GBP2.025 0.0714p 0% 1.0
Award 9 21 April 2015 GBP1.980 0.0714p 0% 1.0
28 September
Award 10 2015 GBP2.420 0.0714p 0% 1.0
Award 11 17 March 2016 GBP2.380 0.0714p 0% 1.0
Award 12 17 March 2016 GBP2.380 0.0714p 0% 1.0
21 October
Award 13 2016 GBP4.300 0.0714p 0% 1.0
Award 14 21 March 2017 GBP5.240 0.0714p 0% 1.0
Award 15 21 March 2017 GBP5.240 0.0714p 0% 1.0
Award 16 21 March 2017 GBP5.240 0.0714p 0% 1.0
21 September
Award 17 2017 GBP5.540 0.0714p 0% 1.0
Award 18 20 March 2018 GBP5.910 0.0714p 0% 1.0
Award 19 20 March 2018 GBP5.910 0.0714p 0% 1.0
23 October
Award 20 2018 GBP5.270 0.0714p 0% 1.0
23 October
Award 21 2018 GBP5.270 0.0714p 0% 1.0
23 October
Award 22 2018 GBP5.270 0.0714p 0% 1.0
Award 23 19 March 2019 GBP5.860 0.0714p 0% 1.0
22 October
Award 24 2019 GBP8.189 0.0714p 0% 1.0
Awards 2 and 5 have been fully forfeited.
The estimated forfeiture rate assumption is based upon
management's expectation of the number of options that will lapse
over the vesting period. The assumptions were determined when the
scheme was set up in 2011 and are reviewed annually. Management
believe the current assumptions to be reasonable based upon the
rate of lapsed options and proximity to the vesting targets.
Each of the awards are subject to the vesting criteria set by
the Remuneration Committee. In order for the remaining 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
targets of GBP41million and GBP52 million respectively (2018: GBP32
million, GBP41million and GBP52 million respectively).
Group Group Group Group
Achieves Achieves Achieves Achieves
GBP10m EBITDA GBP32m EBITDA GBP41m EBITDA GBP52m EBITDA
---------- --------------- --------------- --------------- ----------------
Award 1-4 20% Vest 20% Vest 20% Vest 40% Vest
Award 6 N/a 25% Vest 25% Vest 50% Vest
Award 7 N/a 20% Vest 20% Vest 60% Vest
Award 8 N/a 25% Vest 25% Vest 50% Vest
Award 9 N/a 20% Vest 20% Vest 60% Vest
Award 10 N/a N/a N/a 100% Vest
Award 12 N/a 17.5% Vest 17.5% Vest 65% Vest
Award 13 N/a 17.5% Vest 17.5% Vest 65% Vest
Award 14 N/a 17.5% Vest 17.5% Vest 65% Vest
Award 15 N/a 12.5% Vest 12.5% Vest 75% Vest
Award 16 N/a 25% Vest 25% Vest 50% Vest
Award 17 N/a 10% Vest 10% Vest 80% Vest
Award 18 N/a 10% Vest 10% Vest 80% Vest
Award 19 N/a N/a N/a 100% Vest
Award 20 N/a N/a N/a 100% Vest
Award 21 N/a N/a 14% Vest 86% Vest
Award 22 N/a N/a 33% Vest 67% Vest
Award 23 N/a N/a 10% Vest 90% Vest
Award 24 N/a N/a N/a 100% Vest
Award 11 relates to options awarded to Chairman, Bernard Cragg
during 2016. Half of these options vested on 31 January 2019 and
the remaining half will vest on 31 January 2021.
The total charge recognised for the scheme during the twelve
months to 31 December 2019 was GBP10,882,000 (2018: GBP5,679,000).
The awards of the scheme are settled with ordinary shares of the
Company.
During the period the Group purchased an aggregate amount of
467,400 shares at a total market value of GBP3,602,000. The
purchased shares will be held in treasury and in the Group's
Employee Benefit Trust for the purpose of satisfying the exercise
of share options under the Company's Employee Share Option
Plan.
Reconciliation of movement in the number of options is provided
below.
Option price Number of
(pence) options
31 December 2018 1/14th 10,808,861
Granted 1/14th 736,440
Exercised 1/14th (2,059,188)
Forfeited 1/14th (632,231)
------------------ -------------- ------------
31 December 2019 1/14th 8,853,882
------------------ -------------- ------------
The following table summarises the Group's share options
outstanding at each year end:
Options Option price Remaining
Reporting date outstanding (pence) life (years)
31 December 2011 5,004,300 1/14th 3.7
31 December 2012 4,931,150 1/14th 4.3
31 December 2013 4,775,050 1/14th 3.3
31 December 2014 8,358,880 1/14th 2.5
31 December 2015 7,557,840 1/14th 2.5
31 December 2016 9,450,183 1/14th 3.2
31 December 2017 10,621,857 1/14(th) 2.2
31 December 2018 10,808,861 1/14(th) 1.4
31 December 2019 8,853,882 1/14(th) 1.0
------------------ ------------- ------------- --------------
In March 2019, 2.1 million outstanding share options held by
GlobalData employees vested in accordance with the EBITDA target
being satisfied under Tranche 2a and approved by the Remuneration
Committee at a strike price of GBP6 per share. 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.
The Remuneration Committee received notification from the Audit
Committee that the quality of Adjusted EBITDA in 2019 of GBP44.6
million was sufficient to satisfy the target under Tranche 2b of
GBP41 million. The employees who have share options dependent on
the meeting of the GBP41 million target will therefore receive the
opportunity to vest their options following the publication of the
results.
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 share price must reach certain targets. The fair values
of options granted were determined using the Monte Carlo method.
The inputs used in the model were:
-- grant date
-- vesting date
-- performance start and end date
-- expected term
-- risk free rate
-- dividend yield
-- volatility and;
-- share price at date of grant
The awards shall vest based upon the following performance
conditions being satisfied:
-- 100% of the shares subject to the award will vest provided
the compounded annual growth in the Group's TSR performance over
the 5-year performance period is equal to or exceeds 16% per annum
compounded (the "5-Year TSR Target").
-- The 5-Year TSR Target will be measured by taking a base-line
price per share of 830p and comparing it to the sum of the average
closing price of a share derived from the 'official list' over the
period 20 trading days commencing on the business day on which the
Group announces its annual results for the period ending 31
December 2024 and all dividends paid during the performance
period.
To the extent that the 5-year TSR Target has not been met, the
award will not vest. If any of the events pursuant to the rules
covering 'takeovers and other corporate events' occur during the
performance period or prior to the vesting date, awards shall vest
as follows:
-- Where the 5-year TSR Target has been met at the date of the
relevant event, 100% of the awards shall vest.
-- Where the 5-year TSR Target has not been achieved, but a 16%
compound annual TSR has been met over the period from the
commencement of the performance period, awards shall vest on a
pro-rata basis to reflect the proportion of the performance period
which has elapsed, although the Company shall have discretion to
waive such time pro-rating if they consider it appropriate.
The following assumptions were used in the valuation:
Award Tranche Grant Date Fair Value Estimated Weighted
of Share Exercise Forfeiture Average
Price at Price rate p.a. of Remaining
Grant Date (Pence) Contractual
Life (Years)
--------------- -------------- ------------- ----------- ------------ --------------
31 October
Award 1 2019 GBP3.05 0.0714p 0% 5.0
The estimated forfeiture rate assumption is based upon
management's expectation of the number of options that will lapse
over the vesting period, and are reviewed annually. Management
believe the current assumptions to be reasonable.
The total charge recognised for the scheme during the twelve
months to 31 December 2019 was GBP134,000 (2018: nil). The awards
of the scheme are settled with ordinary shares of the Company.
Reconciliation of movement in the number of options is provided
below.
Option price Number of
(pence) options
31 December 2018 1/14th -
Granted 1/14th 1,400,000
31 December 2019 1/14th 1,400,000
------------------ -------------- ----------
The following table summarises the Group's share options
outstanding at each year end:
Options Option price Remaining
Reporting date outstanding (pence) life (years)
31 December 2019 1,400,000 1/14th 5.00
------------------ ------------- ------------- --------------
10. Acquisitions
AROQ Limited
On 4 January 2019, the Group acquired the entire share capital
of the AROQ Limited Group for cash consideration of
GBP7.5 million. AROQ provides global data, analytics, and
insights in the auto, drinks, food and style sectors.
The amounts recognised for each class of assets and liabilities
at the acquisition date were as follows:
Carrying Value Fair Value Adjustments Fair Value
Intangible assets consisting of: GBP000s GBP000s GBP000s
Brand - 329 329
Customer relationships - 967 967
Intellectual property and content - 1,896 1,896
Net assets acquired consisting of:
Property, plant and equipment 550 - 550
Cash and cash equivalents 648 - 648
Trade and other receivables 780 (97) 683
Trade and other payables (1,495) - (1,495)
Corporation tax payable (43) - (43)
Deferred tax (33) (529) (562)
Fair value of net assets acquired 407 2,566 2,973
----------------------------------------------- ----------------- ------------------------- -------------
The goodwill recognised in relation to the acquisition is as
follows:
Fair Value
GBP000s
Consideration 7,532
Less net assets acquired (2,973)
----------------------------- --------
Goodwill 4,559
----------------------------- --------
The goodwill that arose on the combination can be attributed to
the assembled workforce, know-how and research methodology.
The Group incurred legal expenses of GBP9,000 in relation to the
acquisition which were recognised in other expenses. In the period
from acquisition to 31 December 2019 the trade of AROQ Limited
generated revenues of GBP2.6 million and contribution of GBP0.7
million.
In January 2019, the Group also paid GBP1.3 million for the
purchase of the remaining shares held by a minority interest within
Sportcal Limited, a subsidiary of the Group. The acquisition was
accounted for and the purchase price was accrued for as at 31
December 2018.
Cash Cost of Acquisitions
The cash cost of acquisitions comprises:
31 December 2019
GBP000s
Acquisition of AROQ Limited:
Cash consideration 7,532
Cash acquired as part of opening balance sheet (648)
Acquisition of Sportcal Minority Shareholding 1,316
Acquisition of Global Ad Source: funds returned (68)
8,132
------------------------------------------------------- -----------------
11. Related party transactions
Mike Danson, GlobalData Plc's Chief Executive, owns 66.8% of the
Company's ordinary shares as at 2 March 2020. Mike Danson owns a
number of businesses that interact with GlobalData Plc. The
principal transactions, which are all conducted on an arm's length
basis, are as follows:
Accommodation
GlobalData Plc rents three buildings from Estel Property
Investments Limited, a company wholly owned by Mike Danson. The
total rental expense (net of sub-lease income), including service
and management fees, in relation to the buildings owned by Estel
Property Investments for the year ended 31 December 2019 was
GBP2,719,700 (2018: GBP2,551,900). In addition, GlobalData Plc
sub-leases office space to other companies owned by Mike
Danson.
Corporate support services
Corporate support services are provided to and from other
companies owned by Mike Danson, principally finance, human
resources, IT and facilities management. These are recharged to
companies that consume these services based on specific drivers of
costs, such as proportional occupancy of buildings for facilities
management, headcount for human resources services, revenue or
gross profit for finance services and headcount for IT services.
The net recharge made from GlobalData Plc to these companies for
the year ended 31 December 2019 was GBP556,100 (2018:
GBP490,400).
Loan to Progressive Trade Media Limited
As part of the 2016 disposal of non-core B2B print businesses to
a related party, the Group agreed to issue a loan to Progressive
Trade Media Limited to fund the purchase consideration. This loan
is for GBP4.5 million and repayable in 5 instalments, with the next
instalment due in January 2021 (third instalment received in
February 2020). Interest of 2.25% above LIBOR is charged on the
loan, with GBP87,000 charged in the year ended 31 December 2019
(2018: GBP117,000).
Directors and Key Management Personnel
The remuneration of Directors is discussed within the Directors'
Remuneration Report within the Annual Report and Accounts for the
year ended 31 December 2019.
Amounts outstanding
The Group has taken advantage of the exemptions contained within
IAS 24 - Related Party Disclosures from the requirement to disclose
transactions between Group companies as these have been eliminated
on consolidation. The amounts outstanding for other related parties
were:
Non-Trading Balances
Amounts due in greater than one year:
31 December 2019 31 December 2018
GBP000s GBP000s
Progressive Trade Media Limited 1,850 2,775
1,850 2,775
--------------------------------- ----------------- -----------------
Amounts due within one year:
31 December 2019 31 December 2018
GBP000s GBP000s
Progressive Trade Media Limited 925 925
925 925
--------------------------------- ----------------- -----------------
Trading Balances
Amounts due within one year:
31 December 2019 31 December 2018
GBP000s GBP000s
Compelo Group (and subsidiaries) - (1)
- (1)
----------------------------------------------------- -----------------
The Group has right of set off over the trading balances held
with companies related by virtue of common ownership by Mike
Danson.
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
FR JJMRTMTJMMLM
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