REG - GlobalData PLC - Final Results For The Year Ended 31 December 2017 <Origin Href="QuoteRef">DATA.L</Origin> - Part 2
26/02/2018 07:05
- Part 2: For the preceding part double click ID:nRSZ8569Fa
Restructuring costs 2,436 1,289
M&A costs 911 472
Items associated with acquisitions and restructure of the Group 3,347 1,761
Share based payments charge 5,323 2,764
Revaluation of short and long-term derivatives (1,266) 770
Unrealised operating foreign exchange loss 417 1,571
Amortisation of acquired intangibles 11,962 13,401
Total other expenses 19,783 20,267
· Restructuring costs relates to redundancies and other restructuring.
· The M&A costs relate to due diligence and corporate finance activity.
· The share based payments charge relates to the share option scheme (see
note 10).
· The revaluation of short and long-term derivatives relates to movement
in the fair value of the short and long-term derivatives (see note 7).
· Unrealised 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 has a
share options scheme in place and therefore the Group has calculated the
dilutive effect of these options. The below table shows earnings per share for
both continuing and discontinued operations:
Year ended 31 December 2017 Year ended 31 December 2016
Continuing operations
Basic
(Loss)/ profit for the year attributable to ordinary shareholders of the parent company (£000s) (2,156) 1,813
Weighted average number of shares (000s) 102,346 100,632
Basic (loss)/ earnings per share (pence) (2.11) 1.80
Diluted
(Loss)/ profit for the year attributable to ordinary shareholders of the parent company (£000s) (2,156) 1,813
Weighted average number of shares* (000s) 102,346 110,082
Diluted (loss)/ earnings per share (pence) (2.11) 1.65
Discontinued operations
Basic
Loss for the year attributable to ordinary shareholders of the parent company (£000s) - (717)
Weighted average number of shares (000s) 102,346 100,632
Basic loss per share (pence) - (0.71)
Diluted
Loss for the year attributable to ordinary shareholders of the parent company (£000s) - (717)
Weighted average number of shares* (000s) 102,346 100,632
Diluted loss per share (pence) - (0.71)
Total
Basic
(Loss)/ profit for the year attributable to ordinary shareholders of the parent company (£000s) (2,156) 1,096
Weighted average number of shares (000s) 102,346 100,632
Basic (loss)/ earnings per share (pence) (2.11) 1.09
Diluted
(Loss)/ profit for the year attributable to ordinary shareholders of the parent company (£000s) (2,156) 1,096
Weighted average number of shares* (000s) 102,346 110,082
Diluted (loss)/ earnings per share (pence) (2.11) 1.00
* Where the share options in issue are anti-dilutive in respect of the diluted
loss per share calculation in 2017 and 2016, the options have not been
included in the calculation.
Reconciliation of basic weighted average number of shares to the diluted
weighted average number of shares:
31 December2017No'000s 31 December2016No'000s
Basic weighted average number of shares 102,346 100,632
Share options in issue at end of year 10,622 9,450
Diluted weighted average number of shares 112,968 110,082
6. Intangible assets
Software Customer relationships Brands IP rights and Database Goodwill Total
£000s £000s £000s £000s £000s £000s
Cost
As at 31 December 2016 7,577 25,575 10,695 22,529 111,455 177,831
Additions: Business Combinations 117 7,180 1,596 4,356 16,779 30,028
Additions: Separately Acquired 1,036 - 148 - - 1,184
Foreign currency retranslation (47) - - - - (47)
Disposals (1) - - - - (1)
As at 31 December 2017 8,682 32,755 12,439 26,885 128,234 208,995
Amortisation
As at 31 December 2016 (5,716) (13,559) (2,597) (13,093) (9,360) (44,325)
Additions: Business Combinations (73) - - - - (73)
Charge for the year (1,118) (3,097) (1,290) (8,583) - (14,088)
Foreign currency retranslation 38 - - - - 38
Disposals 1 - - - - 1
As at 31 December 2017 (6,868) (16,656) (3,887) (21,676) (9,360) (58,447)
Net book value
As at 31 December 2017 1,814 16,099 8,552 5,209 118,874 150,548
As at 31 December 2016 1,861 12,016 8,098 9,436 102,095 133,506
Intangible asset additions as a result of business combinations are discussed
in detail in note 11.
7. Derivative assets and liabilities
31 December 2017£000s 31 December 2016£000s
Short-term derivative assets 369 94
Short-term derivative liabilities (98) (1,089)
Net derivative asset/ (liability) 271 (995)
Classification is based on when the derivatives mature. The fair values of
derivatives are expected to impact the income statement over the next year,
dependant on movements in the fair value of the foreign exchange contracts.
The movement in the year was a £1,266,000 credit to the income statement
(2016: charge of £770,000).
The Group uses derivative financial instruments to reduce its exposure to
fluctuations in foreign currency exchange rates.
The notional values of contract amounts outstanding are:
Expiring in the period ending: EuroE'000 US Dollar$'000 Indian RupeeINR'000
31 December 2018 3,400 17,450 353,152
Fair value of financial instruments
Financial instruments are either carried at amortised cost, less any provision
for impairment, or fair value.
The Group uses the following hierarchy for determining and disclosing the fair
value of financial instruments by valuation technique:
• Level 1: quoted (unadjusted) prices in active markets for identical assets
or liabilities;
• Level 2: other techniques for which all inputs which have a significant
effect on the recorded fair value are observable, either directly or
indirectly; and
• Level 3: techniques which use inputs which have a significant effect on the
recorded fair value that are not based on observable market data.
As at 31 December 2017, the only financial instruments measured at fair value
were derivative financial liabilities and these are classified as Level 2.
Type of Financial Instrument at Level 2 Measurement technique Main assumptions Main inputs used
Derivative assets and liabilities Present-value method Determining the present value of financial instruments as the current value of future cash flows, taking into account current market exchange rates Observable market exchange rates
8. Related party transactions
Mike Danson, GlobalData's Chief Executive, owned 68.0% of the Company's
ordinary shares as at 26 February 2017. Mike Danson owns a number of
businesses that interact with GlobalData Plc. The principal transactions are
as follows:
Accommodation
GlobalData Plc occupies buildings which are owned by Estel Property
Investments Limited, a company wholly owned by Mike Danson. The total rental
expense, including service and management fees, in relation to the buildings
owned by Estel Property Investments for the year ended 31 December 2017 was
£2,061,600 (2016: £2,061,500).
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 2017 was £874,600 (2016: £922,900).
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 £4.5m and repayable in 5
instalments, with the first instalment due in January 2018. Interest of 2.25%
above LIBOR is charged on the loan, with £112,000 charged in the year ended 31
December 2017 (2016: £125,000).
Acquisitions
In addition to the Cards and Wealth business acquired from World Market
Intelligence Limited noted in the acquisitions section, during the year,
GlobalData UK Limited also acquired three businesses which were related by
virtue of common ownership. The details of these acquisitions are provided
below:
Progressive Media Korea Limited £000s GlobalData Japan KK (formerly named Global Intelligence & Media Japan KK)£000s Progressive Media International FZ LLC £000s
Consideration - - 10
Fair Value of Net Liabilities Acquired (201) (5) (384)
Goodwill 201 5 394
In the case of all three acquisitions, the value of intangible assets
identified as part of the acquisitions was nil.
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 2017 31 December 2016
£000s £000s
Progressive Trade Media Limited 3,700 4,625
3,700 4,625
Amounts due within one year:
31 December 2017 31 December 2016
£000s £000s
Progressive Trade Media Limited 925 -
925 -
Trading Balances
Amounts due within one year:
31 December 2017 31 December 2016
£000s £000s
Estel Property Group Limited (523) (617)
Progressive Media Ventures (and subsidiaries) 94 557
Compelo Group (and subsidiaries) 71 (61)
Research Views Group (and subsidiaries) 360 137
2 16
The Group has right of set off over these amounts.
9. Equity
Share capital
Allotted, called up and fully paid:
31 December 2017 31 December 2016
No'000 £000s No'000 £000s
Ordinary shares at 1 January (1/14th pence) 102,346 73 76,268 54
Issue of shares: consideration GlobalData - - 26,078 19
Share buyback - - - -
Ordinary shares c/f 31 December (1/14th pence) 102,346 73 102,346 73
Deferred shares of £1.00 each 100 100 100 100
102,446 173 102,446 173
Share Buyback
As detailed in note 10, during the period the Group purchased an aggregate
amount of 254,200 shares at a total market value of £1,329,000.
Capital management
The Group's capital management objectives are:
· To ensure the Group's ability to continue as a going concern
· To fund future growth and provide an adequate return to shareholders
and, when appropriate, distribute dividends
The capital structure of the Group consists of net debt, which includes
borrowings and cash and cash equivalents, and equity.
The Company has two classes of shares. The ordinary shares carry no right to
fixed income and each share carries the right to one vote at general meetings
of the Company.
The deferred shares do not confer upon the holders the right to receive any
dividend, distribution or other participation in the profits of the Company.
The deferred shares do not entitle the holders to receive notice of or to
attend and speak or vote at any general meeting of the Company. On
distribution of assets on liquidation or otherwise, the surplus assets of the
Company remaining after payments of its liabilities shall be applied first in
repaying to holders of the deferred shares the nominal amounts and any
premiums paid up or credited as paid up on such shares, and second the balance
of such assets shall belong to and be distributed among the holders of the
ordinary shares in proportion to the nominal amounts paid up on the ordinary
shares held by them respectively.
There are no specific restrictions on the size of a holding nor on the
transfer of shares, which are both governed by the general provisions of the
Articles of Association and prevailing legislation. The Directors are not
aware of any agreements between holders of the Company's shares that may
result in restrictions on the transfer of securities or on voting rights.
No person has any special rights of control over the Company's share capital
and all its issued shares are fully paid.
With regard to the appointment and replacement of Directors, the Company is
governed by its Articles of Association, the 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.
Other reserve
The other reserve consists of a reserve created upon the reverse acquisition
of the TMN Group Plc.
Foreign currency translation reserve
The foreign currency translation reserve contains the translation differences
that arise upon translating the results of subsidiaries with a functional
currency other than Sterling. Such exchange differences are recognised in the
income statement in the period in which a foreign operation is disposed of.
Special reserve
The special reserve was created upon the capital reduction which occurred
during 2013.
In order to facilitate the payment of dividends, the special reserve,
constituted by an undertaking to the Court given in connection with the
reduction of the Company's share premium account undertaken in May 2013, has
been released in accordance with its terms pursuant to a resolution of the
Board dated 23 February 2016 (all relevant creditors having been discharged or
otherwise consented to the reduction).
Merger reserve
The merger reserve was created to account for the premium on the shares issued
in consideration for the purchase of GlobalData Holding Limited in 2016.
Treasury reserve
The treasury reserve contains shares held in treasury by the Group and in the
Group's Employee Benefit Trust for the purpose of satisfying the exercise of
share options under the Company's Employee Share Option Plan.
Dividends
The final dividend for 2016 was 4.0p per share and was paid in May 2017. The
total dividend for the current year was 8.0 pence per share, with an interim
dividend of 3.0 pence per share paid on 3 October 2017 to shareholders on the
register at the close of business on 1 September 2017 and a final dividend of
5.0 pence per share to be paid on 27 April 2018 to shareholders on the
register at the close of business on 16 March 2018. The ex-dividend date will
be on 15 March 2018.
10. Share Based Payments
The Group created a share option scheme during the year ended 31 December 2010
and granted the first options under the scheme on 1 January 2011 to certain
senior employees. Each option granted converts to one ordinary share on
exercise. A participant may exercise their options (subject to employment
conditions) at any time during a prescribed period from the vesting date to
the date the option lapses. For these options to be exercised the Group's
earnings before interest, taxation, depreciation and amortisation, as adjusted
by the Remuneration Committee for significant or one-off occurrences, must
exceed certain targets. The fair values of options granted were determined
using the Black-Scholes model. The inputs used in the model were:
· share price at date of grant
· exercise price
· time to maturity
· annual risk-free interest rate and;
· annualised volatility
The following assumptions were used in the valuation:
Award Tranche Grant Date Fair Value of Share Price at Grant Date Exercise Price(Pence) Estimated Forfeiture rate p.a. Weighted Average of Remaining Contractual Life
Award 1 1 January 2011 £1.09 0.0714p 15% 2.0
Award 3 1 May 2012 £1.87 0.0714p 15% 2.0
Award 4 7 March 2014 £2.55 0.0714p 15% 2.0
Award 6 22 September 2014 £2.525 0.0714p 0% 2.0
Award 7 9 December 2014 £2.075 0.0714p 15% 2.2
Award 8 31 December 2014 £2.025 0.0714p 15% 2.2
Award 9 21 April 2015 £2.040 0.0714p 15% 2.2
Award 10 28 September 2015 £2.490 0.0714p 15% 3.0
Award 11 17 March 2016 £2.064 0.0714p 0% 2.5
Award 12 17 March 2016 £2.064 0.0714p 15% 2.3
Award 13 21 October 2016 £4.425 0.0714p 15% 2.3
Award 14 21 March 2017 £5.465 0.0714p 15% 2.3
Award 15 21 March 2017 £5.465 0.0714p 15% 2.5
Award 16 21 March 2017 £5.465 0.0714p 15% 2.0
Award 17 21 September 2017 £5.740 0.0714p 15% 2.6
Awards 2 and 5 have been fully forfeited.
The estimated forfeiture rate assumption is based upon management's
expectation of the number of options that will lapse over the vesting period.
The assumptions were determined when the scheme was set up in 2011 and are
reviewed annually. Management believe the current assumptions to be reasonable
based upon the rate of lapsed options.
The risk free interest rate and annualised volatility for awards granted in
2017 were 1.2% and 37% respectively.
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 £28 million and £39 million respectively (2016: £26.7
million and £35 million respectively). The targets were revised during 2017
following the acquisition of the Pharmsource and Infinata businesses.
Vesting Criteria
Group Achieves £10m EBITDA Group Achieves £28m EBITDA Group Achieves £39m EBITDA
Award 1-4 20% Vest 40% Vest 40% Vest
Award 6 N/a 50% Vest 50% Vest
Award 7 N/a 40% Vest 60% Vest
Award 8 N/a 50% Vest 50% Vest
Award 9 N/a 40% Vest 60% Vest
Award 10 N/a N/a 100% Vest
Award 12 N/a 35% Vest 65% Vest
Award 13 N/a 35% Vest 65% Vest
Award 14 N/a 35% Vest 65% Vest
Award 15 N/a 25% Vest 75% Vest
Award 16 N/a 50% Vest 50% Vest
Award 17 N/a 20% Vest 80% Vest
Award 11 relates to options awarded to Executive Chairman, Bernard Cragg
during 2016. The options will vest on 31 January 2019 and 31 January 2021 in
equal tranches.
The total charge recognised for the scheme during the twelve months to 31
December 2017 was £5,323,000 (2016: £2,764,000). The awards of the scheme are
settled with ordinary shares of the Company.
During the period the Group purchased an aggregate amount of 254,200 shares at
a total market value of £1,329,000. 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(pence) Number ofoptions
31 December 2016 1/14th 9,450,183
Granted 1/14th 2,239,160
Forfeited 1/14th (1,067,486)
31 December 2017 1/14th 10,621,857
The following table summarises the Group's share options outstanding at each
year end:
Reporting date Optionsoutstanding Option price(pence) Remaininglife (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 1/14th 2.2
11. Acquisitions
Infinata
On 7 April 2017, the Group acquired the trade and assets of the Infinata brand
from The MergerMarket Group for a purchase price of US$9.6 million.
The amounts recognised for each class of assets and liabilities at the
acquisition date were as follows:
Carrying Value Fair Value Adjustments Fair Value
£000s £000s £000s
Intangible assets consisting of:
Brand - 429 429
Customer relationships - 2,029 2,029
Intellectual Property and Content - 2,803 2,803
Net liabilities acquired consisting of:
Deferred revenue (2,747) - (2,747)
Fair value of net assets acquired (2,747) 5,261 2,514
The goodwill recognised in relation to the acquisition is as follows:
Fair Value
£000s
Consideration 7,704
Less net assets acquired (2,514)
Goodwill 5,190
In line with the provisions of IFRS 3, further fair value adjustments may be
required within the 12 month period from the date of acquisition. Any fair
value adjustments will result in an adjustment to the goodwill balance
reported above.
In the year ended 31 December 2016 the Infinata trade generated revenues of
$8.0 million and profits before tax of $1.0 million. The business has
generated revenues of £4.1 million and Adjusted EBITDA of £1.0 million in the
period from acquisition to 31 December 2017. If the acquisition had occurred
on 1 January 2017, the Group year to date revenue for 2017 would have been
£123.0 million and the Group loss before tax from continuing operations would
have been £1.0 million.
The goodwill that arose on the combination can be attributed to the assembled
workforce, know-how and expertise.
The Group incurred legal and professional costs of £0.2m in relation to the
acquisition, which were recognised in other expenses.
Ascential Jersey Holdings
On 30 November 2017, the Group acquired Ascential Jersey Holdings Limited and
its subsidiary MEED Media FZ LLC for cash consideration of US $17.5 million.
MEED provides premium data and analytics content with an industry focus on
construction and projects in the Middle East. The business services its
growing client base principally through annual subscription contracts.
The goodwill recognised in relation to the acquisition is as follows:
Carrying Value Fair Value Adjustments Fair Value
£000s £000s £000s
Intangible assets consisting of:
Brand - 1,167 1,167
Customer relationships - 5,151 5,151
Intellectual Property and Content - 1,553 1,553
Net liabilities acquired consisting of:
Tangible and intangible fixed assets 148 - 148
Cash 524 - 524
Trade receivables 1,556 - 1,556
Other receivables and prepayments 500 - 500
Trade and other payables (985) - (985)
Accruals and deferred revenue (6,708) - (6,708)
Fair value of net assets acquired (4,965) 7,871 2,906
The goodwill recognised in relation to the acquisition is as follows:
Fair Value
£000s
Consideration 13,158
Less net assets acquired (2,906)
Goodwill 10,252
In line with the provisions of IFRS 3, further fair value adjustments may be
required within the 12 month period from the date of acquisition. Any fair
value adjustments will result in an adjustment to the goodwill balance
reported above.
In the year ended 31 December 2016 the MEED trade generated revenues of $18.7
million and EBITDA of $1.7 million. The business has generated revenues of
£1.3 million and Adjusted EBITDA of £0.4 million in the period from
acquisition to 31 December 2017. If the acquisition had occurred on 1 January
2017, the Group year to date revenue for 2017 would have been £133.6 million
and the Group loss before tax from continuing operations would have been £0.3
million.
The goodwill that arose on the combination can be attributed to the assembled
workforce, know-how and expertise.
The Group incurred legal and professional costs of £0.2m in relation to the
acquisition, which were recognised in other expenses.
Cash Cost of Acquisitions
The cash cost of acquisitions comprises:
Year ended31 December2017£000s Year ended31 December2016£000s
Acquisition of Infinata (7,704) -
Acquisition of Ascential Jersey Holdings:
Cash consideration (13,158) -
Cash acquired as part of opening balance sheet 524 -
Acquisition of GlobalData Holding:
Stamp duty paid on shares - (312)
Cash acquired as part of opening balance sheet - (614)
Acquisition of Pharmsource - (1,952)
(20,338) (2,878)
Cards and Wealth
On 1 January 2017, the company purchased the trade of the cards and wealth
intelligence business from World Market Intelligence Limited, a related party,
for £1. The business had a liability of £0.7m deferred revenue on acquisition.
The business generated revenues of £0.7m in 2017.
12. Discontinued operations
As the business becomes more focused on its data and analytics offering, a
number of legacy non-core business units have been discontinued in recent
years.
a) The results of the discontinued operations are as follows;
Year ended 31 December 2017 Year ended 31 December 2016
£000s £000s
Discontinued operations
Revenue - 8
Cost of sales - (73)
Gross loss - (65)
Administrative costs - (652)
Loss before tax from discontinued operations - (717)
Income tax - -
Loss for the year from discontinued operations - (717)
b) Loss before tax
Year ended 31 December 2017 Year ended 31 December 2016
This is arrived at after charging: £000s £000s
Amortisation - -
Impairment - -
c) Cash flows from discontinued operations
Year ended 31 December2017 Year ended 31 December 2016
£000s £000s
Cash outflows from operating activities - (604)
Total cash outflows from discontinued operations - (604)
13. Borrowings
31 December2017 31 December2016
£000s £000s
Current
Loans due within one year 6,000 5,737
Non-current
Long-term loans 39,955 26,162
Term loan and RCF
In April 2017, the Group refinanced its debt position. The new facility
consists of a £30.0 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 £6.0 million.
The outstanding balance as at 31 December 2017 was £25.5 million.
In addition to the term loan, the Group also has a revolving capital facility
(RCF) of £45.0 million, with an additional accordion facility available of
£25.0 million, providing significant additional funding capability for future
investment. As at 31 December 2017, the Group had a total draw down against
the RCF facilities of £21.1 million.
The new syndicated 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 December2017 31 December2016
£000s £000s
Term loan 25,500 15,776
RCF 21,100 16,375
Capitalised fees, net of amortised amount (645) (252)
45,955 31,899
This information is provided by RNS
The company news service from the London Stock Exchange
- Part 2: For the preceding part double click ID:nRSZ8569Fa
8,552 5,209 118,874 150,548
As at 31 December 2016 1,861 12,016 8,098 9,436 102,095 133,506
Intangible asset additions as a result of business combinations are discussed
in detail in note 11.
7. Derivative assets and liabilities
31 December 2017 31 December 2016
£000s £000s
Short-term derivative assets 369 94
Short-term derivative liabilities (98) (1,089)
Net derivative asset/ (liability) 271 (995)
Classification is based on when the derivatives mature. The fair values of
derivatives are expected to impact the income statement over the next year,
dependant on movements in the fair value of the foreign exchange contracts.
The movement in the year was a £1,266,000 credit to the income statement
(2016: charge of £770,000).
The Group uses derivative financial instruments to reduce its exposure to
fluctuations in foreign currency exchange rates.
The notional values of contract amounts outstanding are:
Euro US Dollar Indian Rupee
Expiring in the period ending: €'000 $'000 INR'000
31 December 2018 3,400 17,450 353,152
Fair value of financial instruments
Financial instruments are either carried at amortised cost, less any provision
for impairment, or fair value.
The Group uses the following hierarchy for determining and disclosing the fair
value of financial instruments by valuation technique:
• Level 1: quoted (unadjusted) prices in active markets for identical assets
or liabilities;
• Level 2: other techniques for which all inputs which have a significant
effect on the recorded fair value are observable, either directly or
indirectly; and
• Level 3: techniques which use inputs which have a significant effect on
the recorded fair value that are not based on observable market data.
As at 31 December 2017, the only financial instruments measured at fair value
were derivative financial liabilities and these are classified as Level 2.
Type of Financial Instrument at Level 2 Measurement technique Main assumptions Main inputs used
Derivative assets and liabilities Present-value method Determining the present value of financial instruments as the current value of Observable market exchange rates
future cash flows, taking into account current market exchange rates
8. Related party transactions
Mike Danson, GlobalData's Chief Executive, owned 68.0% of the Company's
ordinary shares as at 26 February 2017. Mike Danson owns a number of
businesses that interact with GlobalData Plc. The principal transactions are
as follows:
Accommodation
GlobalData Plc occupies buildings which are owned by Estel Property
Investments Limited, a company wholly owned by Mike Danson. The total rental
expense, including service and management fees, in relation to the buildings
owned by Estel Property Investments for the year ended 31 December 2017 was
£2,061,600 (2016: £2,061,500).
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 2017 was £874,600 (2016: £922,900).
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 £4.5m and repayable in 5
instalments, with the first instalment due in January 2018. Interest of 2.25%
above LIBOR is charged on the loan, with £112,000 charged in the year ended
31 December 2017 (2016: £125,000).
Acquisitions
In addition to the Cards and Wealth business acquired from World Market
Intelligence Limited noted in the acquisitions section, during the year,
GlobalData UK Limited also acquired three businesses which were related by
virtue of common ownership. The details of these acquisitions are provided
below:
Progressive Media Korea Limited GlobalData Japan KK (formerly named Global Intelligence & Media Japan KK) Progressive Media International FZ LLC
£000s
£000s £000s
Consideration - - 10
Fair Value of Net Liabilities Acquired (201) (5) (384)
Goodwill 201 5 394
In the case of all three acquisitions, the value of intangible assets
identified as part of the acquisitions was nil.
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 2017 31 December 2016
£000s £000s
Progressive Trade Media Limited 3,700 4,625
3,700 4,625
Amounts due within one year:
31 December 2017 31 December 2016
£000s £000s
Progressive Trade Media Limited 925 -
925 -
Trading Balances
Amounts due within one year:
31 December 2017 31 December 2016
£000s £000s
Estel Property Group Limited (523) (617)
Progressive Media Ventures (and subsidiaries) 94 557
Compelo Group (and subsidiaries) 71 (61)
Research Views Group (and subsidiaries) 360 137
2 16
The Group has right of set off over these amounts.
9. Equity
Share capital
Allotted, called up and fully paid:
31 December 2017 31 December 2016
No'000 £000s No'000 £000s
Ordinary shares at 1 January (1/14(th) pence) 102,346 73 76,268 54
Issue of shares: consideration GlobalData - - 26,078 19
Share buyback - - - -
Ordinary shares c/f 31 December (1/14(th) pence) 102,346 73 102,346 73
Deferred shares of £1.00 each 100 100 100 100
102,446 173 102,446 173
Share Buyback
As detailed in note 10, during the period the Group purchased an aggregate
amount of 254,200 shares at a total market value of £1,329,000.
Capital management
The Group's capital management objectives are:
· To ensure the Group's ability to continue as a going concern
· To fund future growth and provide an adequate return to
shareholders and, when appropriate, distribute dividends
The capital structure of the Group consists of net debt, which includes
borrowings and cash and cash equivalents, and equity.
The Company has two classes of shares. The ordinary shares carry no right to
fixed income and each share carries the right to one vote at general meetings
of the Company.
The deferred shares do not confer upon the holders the right to receive any
dividend, distribution or other participation in the profits of the Company.
The deferred shares do not entitle the holders to receive notice of or to
attend and speak or vote at any general meeting of the Company. On
distribution of assets on liquidation or otherwise, the surplus assets of the
Company remaining after payments of its liabilities shall be applied first in
repaying to holders of the deferred shares the nominal amounts and any
premiums paid up or credited as paid up on such shares, and second the balance
of such assets shall belong to and be distributed among the holders of the
ordinary shares in proportion to the nominal amounts paid up on the ordinary
shares held by them respectively.
There are no specific restrictions on the size of a holding nor on the
transfer of shares, which are both governed by the general provisions of the
Articles of Association and prevailing legislation. The Directors are not
aware of any agreements between holders of the Company's shares that may
result in restrictions on the transfer of securities or on voting rights.
No person has any special rights of control over the Company's share capital
and all its issued shares are fully paid.
With regard to the appointment and replacement of Directors, the Company is
governed by its Articles of Association, the 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.
Other reserve
The other reserve consists of a reserve created upon the reverse acquisition
of the TMN Group Plc.
Foreign currency translation reserve
The foreign currency translation reserve contains the translation differences
that arise upon translating the results of subsidiaries with a functional
currency other than Sterling. Such exchange differences are recognised in the
income statement in the period in which a foreign operation is disposed of.
Special reserve
The special reserve was created upon the capital reduction which occurred
during 2013.
In order to facilitate the payment of dividends, the special reserve,
constituted by an undertaking to the Court given in connection with the
reduction of the Company's share premium account undertaken in May 2013, has
been released in accordance with its terms pursuant to a resolution of the
Board dated 23 February 2016 (all relevant creditors having been discharged or
otherwise consented to the reduction).
Merger reserve
The merger reserve was created to account for the premium on the shares issued
in consideration for the purchase of GlobalData Holding Limited in 2016.
Treasury reserve
The treasury reserve contains shares held in treasury by the Group and in the
Group's Employee Benefit Trust for the purpose of satisfying the exercise of
share options under the Company's Employee Share Option Plan.
Dividends
The final dividend for 2016 was 4.0p per share and was paid in May 2017. The
total dividend for the current year was 8.0 pence per share, with an interim
dividend of 3.0 pence per share paid on 3 October 2017 to shareholders on the
register at the close of business on 1 September 2017 and a final dividend of
5.0 pence per share to be paid on 27 April 2018 to shareholders on the
register at the close of business on 16 March 2018. The ex-dividend date will
be on 15 March 2018.
10. Share Based Payments
The Group created a share option scheme during the year ended 31 December 2010
and granted the first options under the scheme on 1 January 2011 to certain
senior employees. Each option granted converts to one ordinary share on
exercise. A participant may exercise their options (subject to employment
conditions) at any time during a prescribed period from the vesting date to
the date the option lapses. For these options to be exercised the Group's
earnings before interest, taxation, depreciation and amortisation, as adjusted
by the Remuneration Committee for significant or one-off occurrences, must
exceed certain targets. The fair values of options granted were determined
using the Black-Scholes model. The inputs used in the model were:
· share price at date of grant
· exercise price
· time to maturity
· annual risk-free interest rate and;
· annualised volatility
The following assumptions were used in the valuation:
Award Tranche Grant Date Fair Value of Share Price at Grant Date Estimated Forfeiture rate p.a. Weighted Average of Remaining Contractual Life
Exercise Price
(Pence)
Award 1 1 January 2011 £1.09 0.0714p 15% 2.0
Award 3 1 May 2012 £1.87 0.0714p 15% 2.0
Award 4 7 March 2014 £2.55 0.0714p 15% 2.0
Award 6 22 September 2014 £2.525 0.0714p 0% 2.0
Award 7 9 December 2014 £2.075 0.0714p 15% 2.2
Award 8 31 December 2014 £2.025 0.0714p 15% 2.2
Award 9 21 April 2015 £2.040 0.0714p 15% 2.2
Award 10 28 September 2015 £2.490 0.0714p 15% 3.0
Award 11 17 March 2016 £2.064 0.0714p 0% 2.5
Award 12 17 March 2016 £2.064 0.0714p 15% 2.3
Award 13 21 October 2016 £4.425 0.0714p 15% 2.3
Award 14 21 March 2017 £5.465 0.0714p 15% 2.3
Award 15 21 March 2017 £5.465 0.0714p 15% 2.5
Award 16 21 March 2017 £5.465 0.0714p 15% 2.0
Award 17 21 September 2017 £5.740 0.0714p 15% 2.6
Awards 2 and 5 have been fully forfeited.
The estimated forfeiture rate assumption is based upon management's
expectation of the number of options that will lapse over the vesting period.
The assumptions were determined when the scheme was set up in 2011 and are
reviewed annually. Management believe the current assumptions to be reasonable
based upon the rate of lapsed options.
The risk free interest rate and annualised volatility for awards granted in
2017 were 1.2% and 37% respectively.
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 £28 million and £39 million respectively (2016: £26.7
million and £35 million respectively). The targets were revised during 2017
following the acquisition of the Pharmsource and Infinata businesses.
Vesting Criteria
Group Achieves £10m EBITDA Group Achieves £28m EBITDA Group Achieves £39m EBITDA
Award 1-4 20% Vest 40% Vest 40% Vest
Award 6 N/a 50% Vest 50% Vest
Award 7 N/a 40% Vest 60% Vest
Award 8 N/a 50% Vest 50% Vest
Award 9 N/a 40% Vest 60% Vest
Award 10 N/a N/a 100% Vest
Award 12 N/a 35% Vest 65% Vest
Award 13 N/a 35% Vest 65% Vest
Award 14 N/a 35% Vest 65% Vest
Award 15 N/a 25% Vest 75% Vest
Award 16 N/a 50% Vest 50% Vest
Award 17 N/a 20% Vest 80% Vest
Award 11 relates to options awarded to Executive Chairman, Bernard Cragg
during 2016. The options will vest on 31 January 2019 and 31 January 2021 in
equal tranches.
The total charge recognised for the scheme during the twelve months to 31
December 2017 was £5,323,000 (2016: £2,764,000). The awards of the scheme
are settled with ordinary shares of the Company.
During the period the Group purchased an aggregate amount of 254,200 shares at
a total market value of £1,329,000. 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 2016 1/14th 9,450,183
Granted 1/14th 2,239,160
Forfeited 1/14th (1,067,486)
31 December 2017 1/14th 10,621,857
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
11. Acquisitions
Infinata
On 7 April 2017, the Group acquired the trade and assets of the Infinata brand
from The MergerMarket Group for a purchase price of US$9.6 million.
The amounts recognised for each class of assets and liabilities at the
acquisition date were as follows:
Carrying Value Fair Value Adjustments
Fair Value
£000s £000s £000s
Intangible assets consisting of:
Brand - 429 429
Customer relationships - 2,029 2,029
Intellectual Property and Content - 2,803 2,803
Net liabilities acquired consisting of:
Deferred revenue (2,747) - (2,747)
Fair value of net assets acquired (2,747) 5,261 2,514
The goodwill recognised in relation to the acquisition is as follows:
Fair Value
£000s
Consideration 7,704
Less net assets acquired (2,514)
Goodwill 5,190
In line with the provisions of IFRS 3, further fair value adjustments may be
required within the 12 month period from the date of acquisition. Any fair
value adjustments will result in an adjustment to the goodwill balance
reported above.
In the year ended 31 December 2016 the Infinata trade generated revenues of
$8.0 million and profits before tax of $1.0 million. The business has
generated revenues of £4.1 million and Adjusted EBITDA of £1.0 million in
the period from acquisition to 31 December 2017. If the acquisition had
occurred on 1 January 2017, the Group year to date revenue for 2017 would have
been £123.0 million and the Group loss before tax from continuing operations
would have been £1.0 million.
The goodwill that arose on the combination can be attributed to the assembled
workforce, know-how and expertise.
The Group incurred legal and professional costs of £0.2m in relation to the
acquisition, which were recognised in other expenses.
Ascential Jersey Holdings
On 30 November 2017, the Group acquired Ascential Jersey Holdings Limited and
its subsidiary MEED Media FZ LLC for cash consideration of US $17.5 million.
MEED provides premium data and analytics content with an industry focus on
construction and projects in the Middle East. The business services its
growing client base principally through annual subscription contracts.
The goodwill recognised in relation to the acquisition is as follows:
Carrying Value Fair Value Adjustments
Fair Value
£000s £000s £000s
Intangible assets consisting of:
Brand - 1,167 1,167
Customer relationships - 5,151 5,151
Intellectual Property and Content - 1,553 1,553
Net liabilities acquired consisting of:
Tangible and intangible fixed assets 148 - 148
Cash 524 - 524
Trade receivables 1,556 - 1,556
Other receivables and prepayments 500 - 500
Trade and other payables (985) - (985)
Accruals and deferred revenue (6,708) - (6,708)
Fair value of net assets acquired (4,965) 7,871 2,906
The goodwill recognised in relation to the acquisition is as follows:
Fair Value
£000s
Consideration 13,158
Less net assets acquired (2,906)
Goodwill 10,252
In line with the provisions of IFRS 3, further fair value adjustments may be
required within the 12 month period from the date of acquisition. Any fair
value adjustments will result in an adjustment to the goodwill balance
reported above.
In the year ended 31 December 2016 the MEED trade generated revenues of $18.7
million and EBITDA of $1.7 million. The business has generated revenues of
£1.3 million and Adjusted EBITDA of £0.4 million in the period from
acquisition to 31 December 2017. If the acquisition had occurred on 1 January
2017, the Group year to date revenue for 2017 would have been £133.6 million
and the Group loss before tax from continuing operations would have been £0.3
million.
The goodwill that arose on the combination can be attributed to the assembled
workforce, know-how and expertise.
The Group incurred legal and professional costs of £0.2m in relation to the
acquisition, which were recognised in other expenses.
Cash Cost of Acquisitions
The cash cost of acquisitions comprises:
Year ended Year ended
31 December 31 December
2017 2016
£000s £000s
Acquisition of Infinata (7,704) -
Acquisition of Ascential Jersey Holdings:
Cash consideration (13,158) -
Cash acquired as part of opening balance sheet 524 -
Acquisition of GlobalData Holding:
Stamp duty paid on shares - (312)
Cash acquired as part of opening balance sheet - (614)
Acquisition of Pharmsource - (1,952)
(20,338) (2,878)
Cards and Wealth
On 1 January 2017, the company purchased the trade of the cards and wealth
intelligence business from World Market Intelligence Limited, a related party,
for £1. The business had a liability of £0.7m deferred revenue on
acquisition. The business generated revenues of £0.7m in 2017.
12. Discontinued operations
As the business becomes more focused on its data and analytics offering, a
number of legacy non-core business units have been discontinued in recent
years.
a) The results of the discontinued operations are as follows;
Year ended Year ended
31 December 2017 31 December 2016
£000s £000s
Discontinued operations
Revenue - 8
Cost of sales - (73)
Gross loss - (65)
Administrative costs - (652)
Loss before tax from discontinued operations - (717)
Income tax - -
Loss for the year from discontinued operations - (717)
b) Loss before tax
Year ended Year ended
31 December 2017 31 December 2016
This is arrived at after charging: £000s £000s
Amortisation - -
Impairment - -
c) Cash flows from discontinued operations
Year ended Year ended
31 December 31 December 2016
2017
£000s £000s
Cash outflows from operating activities - (604)
Total cash outflows from discontinued operations - (604)
13. Borrowings
31 December 31 December
2017 2016
£000s £000s
Current
Loans due within one year 6,000 5,737
Non-current
Long-term loans 39,955 26,162
Term loan and RCF
In April 2017, the Group refinanced its debt position. The new facility
consists of a £30.0 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 £6.0
million. The outstanding balance as at 31 December 2017 was £25.5 million.
In addition to the term loan, the Group also has a revolving capital facility
(RCF) of £45.0 million, with an additional accordion facility available of
£25.0 million, providing significant additional funding capability for future
investment. As at 31 December 2017, the Group had a total draw down against
the RCF facilities of £21.1 million.
The new syndicated 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
2017 2016
£000s £000s
Term loan 25,500 15,776
RCF 21,100 16,375
Capitalised fees, net of amortised amount (645) (252)
45,955 31,899
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