REG - GlobalData PLC - Full Year Results
04/03/2024 07:00
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RNS Number : 3630F GlobalData PLC 04 March 2024
4 March 2024
GlobalData Plc
Full Year Results
31 December 2023
Strong results and Adjusted EBITDA margin above 40% for first time
Growth Optimisation Plan completed ahead of schedule
New Growth Transformation Plan launched to accelerate value creation
GlobalData Plc (AIM: DATA, GlobalData, the Group), a leading data, analytics,
and insights platform, today publishes its results for the year ended 31
December 2023 (FY23).
· Excellent growth in Adjusted EBITDA (+28%), with margins
accelerating to 41%
· Total revenue growth of 12% and strong underlying revenue growth
of 7%
· Statutory profit before tax grew by £3.1m to £41.5m (2022:
£38.4m) reflecting an 8% increase on prior year
· Proposed final dividend of 3.2p increases total dividend by 28%
to 4.6 pence per share
· Launch of new Growth Transformation Plan 2024-2026 and
reorganisation into three focused divisions - Healthcare, Consumer, Technology
· Inflexion acquisition of 40% of Healthcare division on track to
close during Q2 2024. Net cash proceeds of approximately £434m will provide
flexibility for accelerated value-creating M&A across the Group
· Well positioned for sustainable organic growth, supported by
value accretive M&A
Mike Danson, Chief Executive Officer of GlobalData Plc, commented:
"2023 has been a year of positive operational and financial momentum for
GlobalData. Over the last four years we have transformed this business, having
completed our Growth Optimisation Plan, which was set to finish at the end of
2024, earlier than planned.
Investment in our One Platform has continued at pace as a wide range of
corporates embed our mission critical data into their workflow. We look
forward to welcoming Inflexion, who will invest to become 40% minority
shareholder in our Healthcare business. This significant milestone in our
evolution will unlock substantial value for our shareholders and offers us the
flexibility to launch a more ambitious approach to growth, including
accelerating value-creating M&A across the Group.
We enter the new financial year with the Group now re-organised across three
customer-focused divisions - Healthcare, Consumer and Technology and with
c.80% revenue visibility. Investing in our product and AI, sales resources and
M&A are key priorities. With a clear vision and a strong team ready to
execute our new Growth Transformation Plan, we look forward to the year ahead
with confidence as we seek to significantly expand GlobalData's scale, speed
up our growth, and sustain value creation for our stakeholders."
Highlights
Financial results for the year ended 31 December 2023.
Key performance metrics 2023 2022 Growth Underlying growth(1)
Revenue £273.1m £243.2m +12% +7%
Operating profit £73.7m £56.0m +32%
Operating profit margin 27% 23% +4 pts
Adjusted EBITDA(1) £110.8m £86.4m +28%
Adjusted EBITDA margin(1) 41% 36% +5 pts
Statutory profit before tax (PBT) £41.5m £38.4m +8%
Earnings per share (EPS) 3.8p 3.8p(2) -
Adjusted EPS(1) 6.8p 6.1p(2) +11%
Total dividends 4.6p 3.6p(2) +28%
Invoiced Forward Revenue(1) £135.2m £133.5m +1% +4%
Net bank debt(1) £243.9m £249.6m -2%
Financial Highlights
· Strong growth in both revenue and profit
o The full year impact of acquisitions augmented underlying revenue
progression, to report overall revenue growth of 12%.
o Robust underlying revenue growth of 7% (2022: 10%) was underpinned by
subscriptions which represented 79% of total revenues (2022: 81%).
o Significant Adjusted EBITDA margin expansion to 41% (2022: 36%).
· Adjusted EBITDA up 28% to £110.8m (2022: £86.4m).
· Statutory PBT grew by £3.1m to £41.5m (2022: £38.4m) an 8%
increase on prior year.
· Operating cash flow grew by 18% to £101.0m (2022: £85.4m).
· Invoiced Forward Revenue grew to £135.2m (underlying growth of
4%) at 31 December 2023 (31 December 2022: £133.5m).
· Enter FY24 with c.80% visibility (contracted and renewable
revenues) of budgeted revenues.
· Total dividends grew by 28% to 4.6p (2022: 3.6p restated(2)).
Operational Highlights
· Completed our Growth Optimisation Plan a year earlier than
expected via four key pillars:
o Customer Obsession, World-Class Product, Sales Excellence and Operational
Agility
· In December, launched our new Growth Transformation Plan
2024-2026, continuing to use the same four pillar framework
o Transformational growth initiatives set GlobalData up for future success:
§ Three customer focused divisions from FY24: Healthcare, Consumer and
Technology.
§ Accelerate our investment in Artificial Intelligence capability and make
Artificial Intelligence central to our strategy and operations.
§ Invest in Sales global headcount.
§ Invest in people, culture and talent.
§ Invest in M&A capability and execution.
· Announced a minority investment by Inflexion Private Equity
Partners LLP ('Inflexion') for a 40% stake in our Healthcare division, with
anticipated completion in Q2 2024
o 40% stake for expected net proceeds of £434m, valuing our Healthcare
division at £1.115bn.
o Healthcare represents ~38% of Group FY23 revenues.
o GlobalData retains majority control and will continue to fully consolidate
the Healthcare results post completion.
o Transformational transaction that provides flexibility for value-creating
M&A.
Current Trading and Outlook
· Entering the new financial year from a position of strength in
terms of revenue visibility and balance sheet.
· Initiatives to deliver accelerated growth - uncertainty driving
demand for our 'gold standard' data, delivered through our One Platform.
· Continued focused approach to cost management and capital
discipline, including mitigating the impact of inflation through advancements
in technology and efficiency savings, whilst ensuring the business remains
appropriately invested for sustainable growth and systematic M&A activity.
· Clear financial targets for FY24 and beyond:
o Steadily progressing to 45% Adjusted EBITDA margin over the course of the
plan period and reinvesting into the Growth Transformation Plan; targeting
high single to double-digit organic revenue growth.
o Platform in place to accelerate inorganic growth opportunities across our
three customer-focused divisions.
o Target £500m of revenue by the end of 2026, through a combination of
organic growth and M&A.
Note 1: Defined in the explanation of non-IFRS measures on page 19.
Note 2: The prior year comparatives for reported EPS, adjusted EPS and
dividends have been restated to reflect the impact of the share-split, which
completed on 25 July 2023 (see note 8).
ENQUIRIES
GlobalData Plc
Mike Danson, Chief Executive Officer 0207 936 6400
Graham Lilley, Chief Financial Officer
J.P. Morgan Cazenove (Nomad and Joint Broker) 0207 493 8000
Bill Hutchings / Mose Adigun
Panmure Gordon (Joint Broker) 0207 886 2500
Rupert Dearden / Dougie McLeod
Deutche Numis Securities (Joint Broker) 0207 260 1000
Nick Westlake / Iqra Amin
FTI Consulting LLP (Financial PR) 0203 727 1000
Edward Bridges / Dwight Burden / Emma Hall
Notes to Editors
About GlobalData Plc
GlobalData Plc (AIM: DATA) is a leading data, insights, and analytics platform
for the world's largest industries. Our mission is to help our clients decode
the future, make better decisions, and reach more customers.
One Platform Model
GlobalData's One Platform model is the foundation of our business and is the
result of years of continuous investment, targeted acquisitions, and organic
development. This model governs everything we do, from how we develop and
manage our products, to our approach to sales and customer success, and
supporting business operations. At its core, this approach integrates our
unique data, expert analysis, and innovative solutions into an integrated
suite of client solutions and digital community platforms, designed to serve a
broad range of industry markets and customer needs on a global basis. The
operational leverage this provides means we can respond rapidly to changing
customer needs and market opportunities, and continuously manage and develop
products quickly, at scale, with limited capital investment as well as
providing unique integration opportunities for M&A.
Strategic Priorities
GlobalData's four strategic priorities are: Customer Obsession, World-Class
Product, Sales Excellence and Operational Agility.
CHIEF EXECUTIVE'S REVIEW
We said 2023 would be a year of 'leveraging the platform', where we intended
to capitalise on the multiple levers open to us to create growth. I'm pleased
to report that we have done just that and more.
Uncertainty continues to drive demand for our mission-critical data. Not only
have we invested in scaling our One Platform to make it the best it can be,
but we also continue to nurture and bring in talent and expertise to bolster
our offering. Out of our 320 datasets, 290 are proprietary and unique to us.
This valuable proprietary IP which no one else has is what sets us apart and
enables our 4,810 clients, many of whom are large, blue chips to make critical
and informed decisions in real time.
FY23 Performance
With a continued strong performance throughout the year, GlobalData
successfully delivered its near-term financial target of at least 40% Adjusted
EBITDA margin. The margin progression since FY20 is symptomatic of our largely
fixed cost base and high operational gearing, as well as structured
integration and synergy realisation in our acquisitions. Adjusted EBITDA grew
by 28% to £110.8m (2022: £86.4m) and operating profit grew by 32% to £73.7m
(2022: £56.0m). Statutory profit before tax grew by 8% to £41.5m (2022:
£38.4m), reflecting operating performance and net finance costs of £32.2m
(2022: £17.6m).
In FY23 revenue was £273.1m (2022: £243.2m), reflecting growth of 12%, which
included 7% underlying growth. Whilst the 7% underlying growth was less than
our double-digit target, we remain confident in our key growth levers and are
investing in our product and sales resources during FY24 and continue our
ambition to target high single to double-digit organic revenue growth over the
longer term.
Subscription revenue, which represents 79% of total revenue (2022: 81%), grew
by 9% and 7% on an underlying basis. We continued to see strong renewal rates
across our (>£20k) subscription clients, on a volume basis our renewal
rates were 84% (2022: 84%). A slight reduction in price increases and upsell
growth(1) (which also directly impacted revenue growth), as well as the impact
of currency in Q4 2023, meant that there was a small reduction in value
renewal rates to 94% (2022: 101%). This is on the back of strong pricing
growth through 2022.
We enter the new financial year with c.80% revenue visibility for FY24.
Securing multi-year contracts remains our key focus.
Growth Optimisation Plan
Over the last four years, our Growth Optimisation Plan moved the business
forward in multiple ways. Executing on our four strategic pillars, we have
built a world-class, multi-industry platform with mission critical data,
analytics and insights across 20 industries that is scalable and is ideally
positioned to integrate new datasets and content into our existing vertical
offering or expand our breadth into new vertical markets.
Through our relentless focus on our key growth areas - Customer Obsession,
World Class Product, Sales Excellence and Operational Agility - we have scaled
GlobalData to deliver £273.1m of revenues in FY23 and in executing the plan,
generated significant value for the Group through focused initiatives and
delivery against both organic and inorganic objectives.
Revenue on an organic basis grew by CAGR 9% FY20-FY23, with additional revenue
from M&A (~£40m) delivering an overall revenue CAGR of 15%.
1) Customer Obsession
Through our ongoing focus on customers, we have fostered strong relationships
which took our total customer number to 4,810, with growth coming from larger
clients (>£20k). We have set a target to increase the volume of renewal
rates to more than 90% over the medium term, having delivered 84% in FY23.
With Artificial Intelligence advancements helping to drive customer success,
our customer engagement intelligence is helping us to target specific
recommendations for clients such as flagging relevant content and customising
solutions. Initiatives are constantly underway to ensure our people are
engaging with customers as much as possible, to understand customer needs in
order to pivot towards a more solutions-based approach. The combination of
Artificial Intelligence and human expertise sets us apart from peers.
(1)Selling more seats and product to existing customers
2) World Class Product
Our continued investment in Artificial Intelligence has enhanced our customer
proposition, and we are excited about the opportunity to improve usability,
driving even greater customer engagement in the years ahead. We have a clear
Artificial Intelligence roadmap focused on the four areas of usability,
automation, new products and internal processes all of which supported our
Growth Optimisation Plan.
This year significant expansion of Artificial Intelligence coverage has been
underway. The team is focused on continuously improving our products with an
'AI Hub' launched in Q4, providing natural language Q&A and dataset
access. Artificial Intelligence powered prompt cards have been developed to
generate reports in real-time for our clients, giving them timely access to
solutions to complex requests, improving client user experience and
satisfaction.
3) Sales Excellence
Our sales teams are focused on pulling key levers for growth with an ambitious
target to take our volume renewal rate in our larger clients (>£20k) from
84% to over 90%, through increasing client engagement and enhancing client and
user experience. During the year, in addition to selling more seats and
product to existing customers, we had a net increase in the number of larger
clients (>£20k) to 2,703 (2022: 2,632), a year-on-year increase of 3%. Our
value renewal rate stood at 94%. Our Invoiced Forward Revenue position and new
business pipeline remain healthy, and with investment in new sales roles, we
are well placed to drive forward and deliver on sales excellence.
We are increasingly using Artificial Intelligence driven tools across a number
of areas to retain existing clients and grow our partnerships as well as win
new clients. Actively using Artificial Intelligence tools to monitor the
health of our client relationships, as well as to help coach our sales teams,
to personalise the selling process and to increase co-ordination across our
teams, is producing tangible results.
In 2023, having launched the 'Decoded' GlobalData newsletter we now have over
750,000 newsletter subscribers.
As we become ever more embedded into our clients' business activities, we
continue to see a significant opportunity to add greater value to our existing
clients, including via sales synergies in acquired businesses. Our addressable
market is substantial. We believe there are more than 125,000 client
opportunities, compared to our existing 4,810 customers, with significant
latent growth potential in the US and professional services markets.
4) Operational Agility
We remain focused in our approach to cost management, resource allocation and
capital discipline, whilst also ensuring the business remains appropriately
invested for sustainable growth, and strategic M&A activity. We are a
highly cash generative business, and our business model remains attractive to
credit providers due to our ability to deleverage quickly. This gives us
access to capital to fund acquisitions to scale our business.
Our growth has been maintained by our continued focus on M&A, with eight
acquisitions completed during the plan, and 25 since 2015. As well as our
commitment to continuous organic investment in our product, the recent
acquisitions of Life Sciences, LMC, MBI and TS Lombard have all added high
value data and insights to our platform. The launch of new Themes proposition
across all Intelligence Centers significantly improved macro themes coverage,
provided by TS Lombard.
Importantly, we have set ourselves up for continued success in the attractive
markets in which we operate. The transformative Healthcare transaction
announced in December will provide us with the flexibility to speed up our
ambitious growth acceleration plans.
A transformative deal in our Healthcare business
On 21 December 2023, Inflexion Private Equity Partners LLP ('Inflexion')
exchanged on a transaction to acquire a 40% minority shareholding in
GlobalData's Healthcare division and is expected to generate net proceeds at
completion of approximately £434m. The investment by Inflexion, a leading
investor in the sector, represents a strong endorsement and provides a
meaningful partner to accelerate the Healthcare division's growth.
Whilst the deal underscores the value of GlobalData's assets and an implied
value for our Healthcare division of £1,115m, it will also enable us to:
· Increase investment in product development and Artificial
Intelligence;
· Strengthen our balance sheet;
· Provide additional flexibility to accelerate value-creating
M&A across the Group; and
· Continue investing in our talent development and pipeline.
The deal is expected to close by the end of Q2 2024, upon fulfilment of the
Conditions Precedent set out within the share options agreement.
New Growth Transformation Plan - 2024 to 2026
Having completed our Growth Optimisation Plan earlier than expected, we are
now focused on our next growth chapter.
Following a detailed review of our growth opportunity, we announced our new
Growth Transformation Plan alongside our transformative deal in December,
which will significantly expand GlobalData's scale. This is building on the
good foundational work done to date and further accelerating implementation.
Building on our success to date, and with multiple levers for growth, we will
be focusing on:
· Getting even closer to our customers;
· Targeting a hugely material organic growth opportunity (a total
addressable market of c.£20 billion);
· Adopting transformational Artificial Intelligence; and
· Investing in transformational M&A.
1) Customer Obsession remains our number one priority
We strive to be the 'go-to' strategic partner to our end-markets and deliver
exceptional value to our customers. As we seek to elevate our customer-focused
approach throughout the Group and drive value-enhancing revenue and margin
expansion, we reorganised our structure at the beginning of FY24 to create
three new customer-focused business divisions:
Healthcare, Consumer and Technology.
Our market-led divisions have dedicated teams with individual management
accountable for delivering against our new plan. Our sales and product teams
remain focused on targeting specific end-markets, whilst having access to our
Group technology and platform capabilities, plus support from our corporate
teams.
This reorganisation will be underpinned by the move to a solution-based sales
model, where the combination of our Artificial Intelligence capability and
proprietary data enables us to provide comprehensive intelligence solutions to
our customers more quickly and efficiently. Our realignment around customer
solutions will bring new workflow tools and new content sets with enhanced
integration, providing the ability to improve the overall usability of our
products and customer experience.
Ultimately, we will focus on delivering significant increase in client
engagement across all teams. Whilst expanding our sales force, we are also
going to increase analyst engagement, with a view to take our analyst-client
interactions to more than 30,000 in 2024 (vs 20,000 in 2023), and
consultant-client interactions to more than 20,000 in 2024 (vs 8,000 in 2023).
Looking ahead, we remain laser focused on progressing our key different areas
of Customer Obsession.
2) Continued focus on investment in product development and Artificial
Intelligence capability
As part of our renewed focus on growth acceleration, we will continue to
create value through product development. As such, our investment will be
evenly spread across core product enhancements and Artificial Intelligence
capability.
First and foremost, every year we will maintain a step change in the product
capabilities that we have, by adding extra functions and capabilities to our
offering. We will also be focusing on enhancing and expanding our proprietary
data offering, and we are already seeing a 27% increase in proprietary data.
Our competitive differentiation is a key value driver, and we continuously
invest in new data types. Since 2019, we saw a c.40% growth in high-value
statistical data assets.
Since 2017, our successful track record of investing in Artificial
Intelligence to drive usability, automation, new product development and
internal process improvement provides a strong foundation to build on. We have
a comprehensive Artificial Intelligence strategy and product roadmap to
improve productivity and enhance customer experience. Our Artificial
Intelligence driven tool 'AI Hub' launched in Q4, is providing natural
language Q&A and dataset access to our customers, and has received
positive feedback. It also has the potential to accelerate sales growth with
new accounts. We are also developing Artificial Intelligence powered prompt
cards to generate reports in real-time, reducing analyst time and improving
client satisfaction.
Underpinning all that, we are looking to improve our data science and
Artificial Intelligence teams to deliver the next phase of growth. We are
upskilling our workforce with Artificial Intelligence training sessions
tailored to functional roles and planning to have 300 Artificial Intelligence
experts employed by GlobalData by 2025. Currently, we have around 300 software
specialists, of which around 50 are focusing on Artificial Intelligence.
3) Maintaining our sales excellence to drive organic growth
In addition to product enhancements, our sales teams are also being set up to
capture the significant market opportunity through our organic value creation
plan. This will be underpinned by our continuous focus on increasing volume
renewal rates to our 90% ambition, with a c.10% contribution to year-on-year
sales growth.
There are multiple levers we can pull. Focusing on price increases and product
improvements, selling more seats as part of our licencing model, product
upsell and cross-sell opportunities, and increased new logo sales will help
drive success here. We expect new logo wins to deliver c.30% contribution to
year-on-year sales growth, and we consider there is headroom for growth in all
areas; we have identified around 125,000 prospects, whilst currently we have
4,810 customers.
This will be supported by a rigorous focus on execution and performance
management, supported by significant investment in expanding our front-line
sales teams. We are targeting more than 150 additional salespeople during the
Growth Transformation Plan to deliver on our promises.
4) Maintaining our operational agility through strategic M&A
We have a strong track record of highly accretive M&A. The planned
investment by Inflexion in our Healthcare business will provide us with the
ability and firepower to support strategic, value-enhancing acquisitions
across the three business divisions.
With an ongoing disciplined approach to cost, the transformational Inflexion
deal will take the Group from 2.2x Net Leverage to a Net Cash position of
c.£184m. Post-completion, the Group will have a strong balance sheet to fund
strategic M&A and additional free cash flow to reinvest in the business.
As appropriate, it also retains the flexibility to conduct share buy backs.
Our Colleagues
Our year of 'leveraging the platform' has been very successful and that has
been driven by the continued focus and dedication of our growing GlobalData
team. Together, we have achieved remarkable milestones and surpassed
expectations, completing our Growth Optimisation Plan a year early. As we
continue to invest in our people's development, we turn our attention to the
next phase of our growth via our new Growth Transformation Plan - where we
will accelerate the speed at which we execute - and expect to celebrate
further achievements in 2024 and beyond.
By nurturing our team's skills and expertise, particularly around Artificial
Intelligence, our colleagues will undoubtedly play a pivotal role in shaping
the future of GlobalData. I would like to take the opportunity to welcome our
new colleagues and thank all my GlobalData team for their passion and
determination to not only stay ahead of the curve but also ensure that our
customers receive unparalleled value.
We are significantly investing in our talent development initiatives, led by
our new Chief People Officer, Katherine Lunn, who will focus on enhancing the
employee proposition. She will also lead on the investment in and recruitment
of new Sales specialists and AI experts, both of which are a key part of the
Growth Transformation Plan.
Current Trading and Outlook
With c.80% revenue visibility and robust profitability, we enter the new
financial year from a position of strength. In the new financial year, we aim
to steadily progress our Adjusted EBITDA margin whilst investing into the
Growth Transformation Plan to target high single to double-digit organic
revenue growth. Our annual revenue target by the end of the 3-year Growth
Transformation Plan is to surpass £500m.
With our business structure re-organised into three customer-focused divisions
at the beginning of 2024 - Healthcare, Consumer and Technology - our platform
is in a good place to accelerate organic growth opportunities as well as
through strategic M&A.
Our recent deal with Inflexion underscores the strength and value of our
business and will support our ambitions, providing us with the flexibility and
additional funds to continue investing in innovating our product and nurturing
our people. With an experienced team, we have the capability and, as we
continue to expand our business, we now also have the firepower to accelerate
our growth over the next three years and scale our platform.
Mike Danson
Chief Executive Officer
4 March 2024
CHIEF FINANCIAL OFFICER'S REVIEW
£m Year ended Year ended
31 December 2023 31 December 2022
Revenue 273.1 243.2
Operating profit 73.7 56.0
Depreciation 6.2 6.4
Amortisation of acquired intangible assets 9.0 9.1
Amortisation of software 1.6 1.0
Share-based payments charge 19.4 4.1
Costs relating to share-based payments scheme 0.2 0.9
Restructuring and refinancing costs 1.7 2.5
Revaluation (gain)/loss on short- and long-term derivatives (0.8) 0.6
Unrealised operating foreign exchange (gain)/loss (1.5) 1.9
M&A and contingent consideration costs 1.3 3.9
Adjusted EBITDA(1) 110.8 86.4
Adjusted EBITDA margin(1) 41% 36%
Statutory profit before tax 41.5 38.4
Amortisation of acquired intangible assets 9.0 9.1
Share-based payments charge 19.4 4.1
Costs relating to share-based payments scheme 0.2 0.9
Restructuring and refinancing costs 1.7 2.5
Revaluation (gain)/loss on short- and long-term derivatives (0.8) 0.6
Unrealised operating foreign exchange (gain)/loss (1.5) 1.9
M&A and contingent consideration costs 1.3 3.9
Revaluation of interest rate swap 2.8 -
Adjusted profit before tax(1) 73.6 61.4
Adjusted income tax expense(1) (18.5) (12.6)
Adjusted profit after tax(1) 55.1 48.8
Cash flow generated from operations 101.0 85.4
Interest paid (23.0) (14.0)
Income taxes paid (12.0) (9.5)
Contingent consideration paid (0.2) -
Principal elements of lease payments (5.4) (5.9)
Purchase of intangible and tangible assets (4.2) (2.7)
Free cash flow(1) 56.2 53.3
Operating cash flow conversion %(1) 91% 99%
Free cash flow conversion %(1) 76% 87%
Earnings attributable to equity holders (restated(2)) :
Basic earnings per share (pence) 3.8 3.8
Diluted earnings per share (pence) 3.8 3.7
Adjusted basic earnings per share (pence) 6.8 6.1
Adjusted diluted earnings per share (pence) 6.7 5.9
(1) Defined in the explanation of non-IFRS measures on page 19.
(2) The prior year comparatives on basic and diluted earnings per share on
both a reported and an adjusted basis have been restated to reflect the impact
of the share-split, which completed on 25 July 2023 (see note 8).
Key Performance Indicators:
Financial Key Performance Indicators
The financial KPIs detailed below are used, in addition to statutory reporting
measures, by the Executive Directors to monitor the Group's performance and
progress.
Revenue Invoiced Forward Revenue Adjusted EBITDA Adjusted EBITDA margin Net bank debt
2023 £273.1m £135.2m £110.8m 41% £243.9m
2022 £243.2m £133.5m £86.4m 36% £249.6m
% reported growth +12% +1% +28% +5p.p. -2%
% underlying growth +7% +4% +23% +6p.p. N/a
The platform economics of our business model meant that we continued to see a
large flow through of incremental revenue to Adjusted EBITDA without material
incremental cost of sale. Over the course of the past four years we have seen
material margin improvement in the business, and we are now reporting an
Adjusted EBITDA margin in excess of 40%, at 41%.
We finished the year with good visibility on future revenues, following
another strong year of revenue growth. Invoiced Forward Revenue grew to
£135.2m (underlying growth of 4%) at 31 December 2023 (31 December 2022:
£133.5m), overall visibility (including contracted and renewable revenues)
grew on an underlying basis by 6%.
The 6% underlying growth on revenue visibility is based upon the underlying
growth in Invoiced Forward Revenue (which excludes the impact of currency) of
4%, plus growth in the visibility we have on 2024 contracted revenue that has
not yet been invoiced and the revenue expectation from our renewing clients in
2024 (on the assumption of consistent renewal rates).
Operational Key Performance Indicators
As at 31 December 2023, the total number of clients (>£5,000 spend) grew
2% to 4,810 (2022: 4,735).
Clients >£20,000 All Clients
(above £5,000)
Value renewal rate Volume renewal Average client value Value renewal rate Volume renewal Average client value
rate rate
2023 94% 84% £76,157 94% 80% £48,714
2022 101% 84% £75,100 99% 78% £47,900
Movement -7p.p. - +1% -5p.p. +2p.p. +2%
Our volume renewal rates improved overall year on year, as we continue to
progress towards our stated ambition of volume renewal rates of >90%. We
continue to focus on our number one strategic priority of customer obsession
and have several initiatives in play, which are all looking to strengthen
customer relationships and value derived from our product.
Adverse currency impact in the fourth quarter of 2023 ('Q4') (GBP
strengthening versus USD) meant that our value renewal rates were impacted, as
well as some softening on price increases achieved in the second half of the
year. We increased the net number of clients by 2% to 4,810, as well as
overall average client value increasing to £48,714 (2022: £47,900), also
adversely impacted by currency movements in Q4.
Financial Review Notes
The financial position and performance of the business are reflective of the
key financial elements of our business model: visible and recurring revenues,
high incremental margins, scalable opportunity and strong cash flows. The
Directors believe that Adjusted EBITDA, Adjusted EBITDA margin, Adjusted
profit before tax, Adjusted profit after tax and Adjusted earnings per share
provide additional useful information on the operational performance of the
Group to shareholders, and internally we review the results of the Group using
these measures. The term 'adjusted' is not a defined term under IFRS and may
not therefore be comparable with similarly titled profit measures reported by
other companies. It is not intended to be a substitute for, or superior to,
IFRS measures of profit.
The Directors also believe that reviewing revenue growth on an 'underlying'
basis gives a useful view on the performance of the business. By reviewing
growth excluding the impact of currency and the impact of acquisitions, the
Directors can review performance on a like-for-like basis. The term
'underlying' is not a defined term under IFRS and may not therefore be
comparable with similarly titled measures reported by other companies.
Financial Key Performance Indicators ('KPIs')
The financial KPIs on page 10 are used, in addition to statutory reporting
measures, by the Executive Directors to monitor the Group's performance and
progress. These key performance indicators are used to measure progress
against strategy, the strength of the business and long-term prospects for our
stakeholders.
Operational Key Performance Indicators
The operational key performance indicators below are used by the Directors to
monitor the quality of revenue growth and understand underlying performance.
Our operational key performance indicators are:
Value Renewal Rate - this is calculated in refence to the total spend of
existing clients with subscription contracts in the last twelve months,
compared to the total spend of those same clients in the twelve months prior
to that.
Volume Renewal Rate - this is calculated in refence to the number of existing
clients with subscription contracts in the last twelve months, compared to the
same number of clients in the twelve months prior to that.
Average Client Value - this is calculated using the total value of sales
across our clients with subscription contracts and dividing by the number of
clients with subscription contracts, which shows an average value.
Our operational KPIs reference sales orders rather than revenue and therefore
impact both revenue recognised in the year as well as Invoiced Forward
Revenue.
The Group's Performance This Year
1. Revenue
Revenue grew by 12% to £273.1m (2022: £243.2m). The majority of the increase
came from underlying growth of 7%, aided by 4% benefit from acquisitions and
1% currency benefit. On an underlying basis, subscriptions (representing 79%
of revenue (2022: 81%)) grew by 7% underpinned by strong renewal rates, and
new business wins. The change in subscription revenue mix compared with 2022
was driven by the impact of acquisitions.
2. Profit before tax
Profit before tax for the year grew by £3.1m to £41.5m (2022: £38.4m),
which represents stronger operating performance at an Adjusted EBITDA level
being offset with increases in other operating costs, namely share-based
payments (a year on year increase of £15.3m as a result of changes in the
schemes target basis in 2022 giving rise to updated fair values of options)
and higher finance costs (+£14.6m), reflecting an increase in average drawn
debt in 2023 compared with 2022 and higher interest rates.
£m Year ended Year ended Change %
31 December 2023 31 December 2022
Revenue 273.1 243.2 +12%
Operating costs (162.3) (156.8) +4%
Adjusted EBITDA 110.8 86.4 +28%
Depreciation (6.2) (6.4) -3%
Amortisation of acquired intangible assets (9.0) (9.1) -1%
Amortisation of software (1.6) (1.0) +60%
Share-based payments charge (19.4) (4.1) +373%
Costs relating to share-based payment schemes (0.2) (0.9) -78%
Refinancing costs - (1.9) -100%
Restructuring costs (1.7) (0.6) +183%
Revaluation gain/(loss) on short and long-term derivatives 0.8 (0.6) -233%
Unrealised operating foreign exchange gains/(losses) 1.5 (1.9) -179%
M&A costs (0.4) (2.9) -86%
Contingent consideration (0.9) (1.0) -10%
Finance costs (32.2) (17.6) +83%
Profit before tax 41.5 38.4 +8%
Adjusted EBITDA
Adjusted EBITDA increased by 28% to £110.8m (2022: £86.4m). The revenue
growth of £29.9m (£17.2m of which was underlying growth) was offset with
cost increases of £5.5m (largely representing the full year impact of
acquisitions which closed mid-way through 2022), meaning that the overall net
improvement to Adjusted EBITDA was £24.4m (incremental margin of 82%). The
growth in Adjusted EBITDA is reflective of the operational gearing in our
business model and our ability to control what is a relatively fixed cost
base. Our overall margin increased by 5 percentage points to 41% (2022: 36%).
On an underlying basis, Adjusted EBITDA grew by 23% and Adjusted EBITDA margin
increased by 6 percentage points, which is reconciled below.
£m 2023 2022 Growth
Revenue as reported 273.1 243.3
Add back currency movements (3.5) -
Add back pre-acquisition revenue of M&A - 9.1
Revenue underlying 269.6 252.4 7%
Adjusted EBITDA as reported 110.8 86.4
Add back currency movements (1.4) -
Add back pre-acquisition Adjusted EBITDA of M&A - 2.3
Adjusted EBITDA underlying 109.4 88.7 23%
Adjusted EBITDA margin underlying 41% 35% 6p.p.
Adjusting items
Adjusting items grew by £6.3m in total, with some significant individual
movements of note:
· The share-based payment charge has increased from £4.1m to
£19.4m, which is mainly driven by the modification to targets made during
2022 giving rise to a higher fair value per option, plus a net increase in the
number of options in issue during 2023. The modification was effective from 30
November 2022 and therefore only had an impact of £0.5m increase in charge in
the previous year.
· M&A costs reduced year on year, from £2.9m to £0.4m,
reflective of no M&A during 2023.
· Unrealised foreign exchange gains of £2.3m were recognised
during the year, in comparison with a total loss in 2022 of £2.5m.
Finance costs
Finance costs have increased by 83% to £32.2m (2022: £17.6m) which is
inclusive of a non-cash interest charge of £5.1m relating to financial
liabilities measured at amortised cost (2022: £2.1m), revaluation loss on
interest rate swap of £2.8m (2022: £nil) and IFRS16 leases interest of
£1.1m (2022: £1.3m). The cash paid in interest in 2023 was £23.0m (2022:
£14.0m) reflecting an increase in average drawn debt in 2023 compared with
2022 and higher interest rates.
Finance costs are calculated on drawn debt based upon a margin range of
275-375bps, dependent on Group net leverage, plus SONIA (Sterling Overnight
Index Average rate). The Group entered into a swap arrangement on SONIA on 21
October 2022 amid the backdrop of rising rates. The arrangement fixed SONIA at
4.9125% over the remaining life of the term loan. Undrawn debt carries
interest at one third of the prevailing margin.
Leases
Within our operating costs, depreciation in relation to right-of-use assets
was £5.1m (2022: £4.7m). Our net finance costs include interest of £1.1m in
relation to lease liabilities (2022: £1.3m).
3. Foreign exchange impact on results
The Group derives around 60% of revenues in currencies other than Sterling,
compared with around 40% of its cost base. The impact of currency movements in
the year increased revenue by £3.5m, which mainly reflected Sterling weakness
against US Dollar (average rate: 2023: 1.23, 2022: 1.25), with £3.3m currency
headwind also reflected in Invoiced Forward Revenue. Cost inflation as a
result of currency movements largely offset the gain in the year and impacted
the results by £2.1m. The full impact of currency on Adjusted EBITDA was an
increase of £1.4m.
£m Revenue Operating costs(1) Adjusted EBITDA Adjusted EBITDA Invoiced Forward Revenue
Margin
As reported 273.1 (162.3) 110.8 41% 135.2
Add back currency movements
US Dollar (3.5) 3.7 0.2 3.3
Euro (0.3) 0.1 (0.2) (0.1)
Other 0.3 (1.7) (1.4) 0.1
Constant currency 269.6 (160.2) 109.4 41% 138.5
2022 - as reported 243.2 (156.8) 86.4 36% 133.5
Constant currency growth 11% 2% 27% 5.p.p. 4%
(1)Operating costs excluding adjusting items.
4. Taxation
The Group's effective income tax rate (ETR) for the reporting period is 25.8%
which exceeds the blended statutory UK income tax rate for the period of
23.5%. The major components increasing the ETR are expenses non-deductible
for tax purposes and local withholding taxes chargeable on the distribution of
profits from overseas subsidiaries.
Key factors that may impact the Group's future tax charge as a percentage of
underlying profits are the mix of profits and losses between the jurisdictions
in which the Group operates and the corresponding tax rates in those
territories, the impact of non-deductible expenditure and non-taxable income
and the utilisation (with a corresponding reduction in cash tax payments) of
previously unrecognised deferred tax assets.
Reconciliation of statutory income tax charge to adjusted income tax charge is
presented below:
£m Year ended Year ended
31 December 2023 31 December 2022
Statutory income tax charge 10.7 7.9
Amortisation of acquired intangible assets 1.9 1.8
Share-based payments charge 4.8 0.8
Costs relating to share-based payment schemes - 0.2
Restructuring and refinancing costs 0.3 0.4
Unrealised operating foreign exchange (gain)/loss (0.6) 0.5
Revaluation of interest rate swap 0.7 -
Corporate tax rate change 0.4 1.3
Movement in unrecognised deferred tax 0.3 (0.3)
Adjusted income tax charge 18.5 12.6
5. Earnings per share
Pursuant to a capital reorganisation exercise undertaken on 25 July 2023, the
Company issued nine ordinary shares to increase the number of ordinary shares
in issue to 118,303,878 (nominal value £0.000714 per share). All existing
ordinary shares were then consolidated, based on 1 consolidated share for
every 14 existing ordinary shares, and subdivided, based on 100 new ordinary
shares for every 1 consolidated share. Post-reorganisation, there were
845,027,700 ordinary shares in issue (nominal value £0.0001 per share) which
were admitted to AIM and commenced dealing on 26 July 2023. The prior year
comparatives on basic and diluted earnings per share on both a reported and an
adjusted basis have been restated to reflect the impact of the share-split as
required by IAS 33: Earnings per share.
Basic EPS was 3.8 pence per share (2022 restated: 3.8 pence per share). Fully
diluted profit per share was 3.8 pence per share (2022 restated: 3.7 pence per
share). Adjusted basic earnings per share grew from 6.1 pence per share to 6.8
pence per share, representing 11% growth.
Growth in Adjusted earnings per share (+11%) fell behind the growth in
Adjusted EBITDA (+28%) mainly as a result of increased finance charges in the
year. Cash interest charges increased by £9.0m (+64%) as well as non-cash
finance costs increasing by £5.6m compared with 2022. Non-cash finance
charges include non-cash interest relating to financial liabilities measured
at amortised cost of £5.1m (2022: 2.1m). The increased charge in the year
reflects the change in anticipated cash flows on the term loan (full repayment
of the loan is expected upon completion of the investment agreement with
Inflexion).
6. Dividends
We are pleased to propose a final dividend of 3.2 pence per share (2022
restated: 2.6 pence), to be paid on 26 April 2024 to shareholders on the
register at the close of business on 22 March 2024. The ex-dividend date will
be on 21 March 2024. The proposed final dividend increases the total dividend
for the year to 4.6 pence per share (2022 restated: 3.6 pence), an increase of
28%.
7. Cash generation
Cash generated from operations grew by 18% to £101.0m (2022: £85.4m),
representing 91% of Adjusted EBITDA (2022: 99%).
Capital expenditure was £4.2m in 2023 (2022: £2.7m), including £3.2m on
software including assets under construction (2022: £1.7m). Capital
expenditure represented 1.5% of revenue (2022: 1.1%).
Total cash flows from operating activities were £65.8m (growth of £3.9m from
2022), which represented 89% of operating profit (2022: 111%). During the
year, the Group paid out £32.2m in dividends (2022: £23.6m).
Short- and long-term borrowings decreased by £19.9m to £263.7m as at 31
December 2023 (2022: £283.6m).
8. Net bank debt:
Net bank debt decreased to £243.9m as at 31 December 2023 (2022: £249.6m).
The Group defines net bank debt as short- and long-term borrowings (note 10)
less cash and cash equivalents. The amount excludes items related to leases.
£m 2023 2022
Short- and long-term borrowings (note 10) 263.7 283.6
Cash (19.8) (34.0)
Net bank debt 243.9 249.6
A reconciliation of cash generated from operations, free cash flow and opening
and closing net bank debt is set out below.
£m Year ended 31 December 2023 Year ended Growth
31 December 2022
Cash flow generated from operations 101.0 85.4 +18%
Interest paid (23.0) (14.0) +64%
Income taxes paid (12.0) (9.5) +26%
Contingent consideration paid (0.2) - +100%
Principal elements of lease payments (5.4) (5.9) -8%
Purchase of intangible and tangible assets (4.2) (2.7) +56%
Free cash flow 56.2 53.3 +5%
Dividends paid (32.2) (23.6) +36%
Net M&A - (33.6) -100%
Acquisition of own shares (11.9) (66.6) -82%
Cash received from repayment of loans - 0.9 -100%
Net cash flow 12.1 (69.6) -117%
Opening net bank debt (249.6) (177.6) +41%
Non-cash movement in borrowings (5.1) (2.1) +143%
Currency translation (1.3) (0.3) +333%
Closing net bank debt (243.9) (249.6) -2%
Last 12 months Adjusted EBITDA 110.8 86.4 +28%
Net bank debt leverage 2.2x 2.9x -0.7x
9. Invoiced Forward Revenue
Invoiced Forward Revenue grew to £135.2m (reported growth of 1% and
underlying growth of 4% when the impact of currency is excluded as noted in
section 3 of this financial review) at 31 December 2023 (2022: £133.5m).
£m 2023 2022
Deferred revenue 104.6 104.0
Amounts not due/subscription not started at 31 December 30.6 29.5
Invoiced Forward Revenue 135.2 133.5
10. Intangible assets
Intangible assets (excluding goodwill) have decreased by £7.3m during the
year, from £69.0m as at 31 December 2022 to £61.7m as at 31 December 2023.
This movement is driven by an amortisation charge for the year of £10.6m
(2022: £10.1m) offset by additions of £3.3m (2022: £1.7m).
11. Trade receivables
Net trade receivables as at 31 December 2023 were £54.8m, representing 1%
growth compared with the 31 December 2022 balance of £54.4m.
Prior year restatement
Following a routine Financial Reporting Council ("FRC") review of the
consolidated financial statements for the year ended 31 December 2022, the
Group engaged with the FRC which resulted in a restatement of the Consolidated
Statement of Cash Flows to present the settlement of the previous term loan
and Revolving Credit Facilities ("RCF"), the proceeds from the new term loan
and the loan fees incurred on the new facility as a net financing cash inflow
of £53.5m within proceeds from borrowings. The amounts in respect of this
transaction were previously presented gross. Following a reassessment of the
specific cash flow arrangements this restatement reflects that the cash inflow
actually occurred on a net basis. The restatement involves a reclassification
adjustment to three lines within the Cash flows from financing activities
section of the Consolidated Statement of Cash Flows with a £nil net impact on
the Group's Cash flows from financing activities and a £nil net impact on the
Group's financial position and performance. We welcomed the FRC's review and
have set out the details of the restatement in the Accounting Policies of the
Group's Annual Report and Accounts for the year ended 31 December 2023.
Minority investment in the Group's Healthcare business expected to complete in
Q2 2024
On 21 December 2023, the Group announced that it had exchanged on a
transaction to sell 40% of the Group's Healthcare business to Inflexion. We
have assessed the accounting implications for the Group arising from the
transaction in respect of the year ended 31 December 2023. We have taken into
consideration the specific details set out in both the Share Option Agreement
and Co-Investment Agreement and concluded that following completion of the
transaction, GlobalData Plc will continue to have control of the Healthcare
business, the results of which will therefore continue to be fully
consolidated into the results of the GlobalData Plc Group and the Group will
recognise a non-controlling interest within equity in the Group's Statement of
Financial Position. We have concluded that the completion date will be the
point at which the put and call options detailed within the Share Option
Agreement are exercised and as at 31 December 2023 this has not taken place.
Financial Risk Management
The Group's primary objective in managing foreign currency risk is to protect
against the risk that the eventual Sterling net cash flows will be affected by
changes in foreign currency exchange rates. To do this, the Group enters into
foreign exchange contracts that limit the risk from movements in US Dollar and
Euro exchange rates with Sterling. Due to the Group's operations in India, the
Group also enters into foreign exchange contracts that limit the risk from
movements in US Dollars with the Indian Rupee exchange rate. While
commercially and from a cash flow perspective this hedges the Group's currency
exposures, the Group elects not to apply hedge accounting and accordingly any
movements in the fair value of the foreign exchange contracts are recognised
in the income statement.
As a data and analytics company, cross border tariffs have a limited impact on
our business. However, the Group continues to observe ongoing OECD initiatives
and frameworks with respect to the challenges arising from the taxation of the
digital economy. In particular, the introduction of Pillar One (determining
where tax should be paid and on what basis) and Pillar Two (the design of a
system that ensures multinational enterprises pay a minimum level of tax) is
being monitored, however as the application thresholds are aimed at the very
largest companies, the rules are unlikely to impact the Group.
Interest Rate Risk
Interest rate risk is the impact that fluctuations in market interest rates
can have on the value of the Group's interest-bearing assets and liabilities
and on the interest charge recognised in the income statement. On 21 October
2022, GlobalData Plc (the parent company) entered into an interest rate swap
arrangement to fix the floating element of the interest rate (based upon
SONIA) to a fixed rate of 4.9125%. Up to 21 December 2023, the Group applied
hedge accounting in accordance with IFRS9 (Financial Instruments); as such any
gains or losses on the interest rate swap, to the extent that they are
effective, were recognised directly within other comprehensive income of both
the Group and the parent company. Since 21 December 2023, upon exchange of the
transaction to sell 40% of the Group's Healthcare business, it is now the
Group's intention to fully repay the loan upon completion of the investment
agreement with Inflexion. Given the hedged items (future interest repayments)
are no longer probable or expected to occur, hedge accounting has been
discontinued, and as such the cumulative balance held in the cash flow hedge
reserve was transferred to the income statement.
Liquidity Risk and Going Concern
The Group's approach to managing liquidity risk is to ensure, as far as
possible, that it has sufficient liquidity to meet its liabilities as they
fall due, with surplus facilities to cope with any unexpected variances in
timing of cash flows. The Group meets its day-to-day working capital
requirements through free cash flow, being operations-generated cash (with no
external financing required). Although the statement of financial position
shows net current liabilities (current assets less current liabilities),
included in current liabilities is £104.6m of deferred revenue that
represents future income earnings. Excluding deferred revenue, the Group has
net current assets of £49.8m (2022: £56.4m).
Based on cash flow projections, the Group considers the existing financing
facilities to be adequate to meet short-term commitments. The Directors have a
reasonable expectation that there are no material uncertainties that cast
significant doubt about the Group's ability to continue 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 Accounts on a going
concern basis. The Directors have prepared a Going Concern and Long-Term
Viability statement within the Group's Annual Report and Accounts for the year
ended 31 December 2023, within the Strategic Report.
Explanation of non-IFRS Measures
Financial measure How we define it Why we use it
Adjusted diluted EPS Adjusted profit after tax per diluted share (reconciliation between statutory Provides a useful basis to assess the year on year operational business
profit and adjusted profit shown on page 9). Diluted share defined as total of performance.
basic weighted average number of shares (net of shares held in treasury
reserve) and share options in issue at end of period (reconciliation between
basic weighted average number of shares and diluted weighted average number of
shares in note 8).
Adjusted EBITDA Earnings before interest, tax, depreciation and amortisation, adjusted to
exclude costs associated with acquisitions, restructuring of the Group,
share-based payments, impairment, unrealised operating exchange rate movements
and the impact of foreign exchange contracts. This is reconciled to the
statutory operating profit on page 9.
Last 12 months Adjusted EBITDA Earnings before interest, tax, depreciation and amortisation, adjusted to
exclude costs associated with acquisitions, restructuring of the Group,
share-based payments, impairment, unrealised operating exchange rate movements
and the impact of foreign exchange contracts in the 12 months preceding the
period end date.
Adjusted EBITDA margin Adjusted EBITDA as a percentage of revenue. This is calculated on page 9.
Adjusted EPS Adjusted profit after tax per share (reconciliation between statutory profit
and adjusted profit shown on page 9).
Adjusted income tax expense Represents the statutory income tax expense adjusted for the tax effect on
adjusting items. In addition, the adjusted income tax expense includes the
effect of any tax rate changes. This is reconciled to the statutory income tax
charge on page 14.
Adjusted profit before tax Statutory profit before tax adjusted to exclude amortisation of acquired
intangible assets, costs associated with acquisitions, restructuring of the
Group, share-based payments, impairment, unrealised operating exchange rate
movements, the impact of foreign exchange contracts and revaluation of the
interest rate swap. This is reconciled to the statutory profit before tax on
page 9.
Adjusted profit after tax The sum of adjusted profit before tax and adjusted income tax expense. This is
calculated on page 9.
Constant currency growth Underlying growth is calculated by excluding the impact of movement in To give the reader an idea of the growth of the business without the impact of
exchange rates. Constant currency growth is reconciled to reported growth on foreign exchange fluctuations, which may add to the transparency and
page 14 for revenue, operating costs, Adjusted EBITDA, Adjusted EBITDA margin understanding of the results.
and Invoiced forward revenue.
Free cash flow Cash flow generated from operations less interest paid, income taxes paid, Indicates the extent to which the Group generates cash from Adjusted profits.
contingent consideration paid, principal elements of lease payments and
purchase of intangible and tangible assets. This is calculated on page 9.
Free cash flow conversion Free cash flow divided by Adjusted profit before tax. This is calculated on
page 9.
Invoiced Forward Revenue Invoiced Forward Revenue relates to amounts that are invoiced to clients at Acts as an indication of revenue visibility for the forthcoming period.
the statement of financial position date, which relate to future revenue to be
recognised. This is reconciled to deferred revenue on page 16.
Net bank debt Short and long-term borrowings (excluding lease liabilities) less cash and Provides an insight into the debt position of the Group, taking into account
cash equivalents. This is reconciled on page 16. current cash resources.
Net bank debt leverage Net bank debt calculated as a multiple of the last 12 months Adjusted EBITDA.
Detailed calculation is provided on page 16.
Net cash flow Free cash flow less dividends paid, net M&A costs, acquisition of own Indicates the extent to which the Group generates cash from Adjusted profits.
shares and cash received from repayment of loans. This is calculated on page
16.
Operating cash flow conversion Cash flow generated from operations divided by Adjusted EBITDA. This is Indicates the extent to which the Group generates cash from Adjusted EBITDA.
calculated on page 9.
Organic growth Organic growth is calculated by excluding the results of acquired businesses. The reason we use organic and underlying growth as a metric is to give the
reader an idea of the growth of the business without the impact of
acquisitions and foreign exchange fluctuations, which may add to the
transparency and understanding of the results. This also aids the Directors to
review performance on a like-for-like basis.
Underlying growth Underlying growth is calculated by excluding the impact of movement in
exchange rates and the results of acquired businesses. Underlying revenue is
reconciled to reported revenue on page 13. Underlying invoiced forward revenue
is reconciled to reported invoiced forward revenue on page 16. Underlying
Adjusted EBITDA and underlying Adjusted EBITDA margin are reconciled to
reported figures on page 13.
Consolidated Income Statement
Notes Year ended 31 December 2023 Year ended 31 December 2022
Continuing operations £m £m
Revenue 4 273.1 243.2
Operating expenses 5 (197.7) (186.6)
Losses on trade receivables 5 (2.3) (0.7)
Other income 0.6 0.1
Operating profit 73.7 56.0
Net finance costs 7 (32.2) (17.6)
Profit before tax 41.5 38.4
Income tax expense (10.7) (7.9)
Profit for the year 30.8 30.5
Attributable to:
Equity holders of the parent 30.8 30.5
Earnings per share attributable to equity holders (restated):
Basic earnings per share (pence) 8 3.8 3.8
Diluted earnings per share (pence) 8 3.8 3.7
Reconciliation to Adjusted EBITDA:
Operating profit 73.7 56.0
Depreciation 6.2 6.4
Amortisation of software 1.6 1.0
Adjusting items 6 29.3 23.0
Adjusted EBITDA 110.8 86.4
The earnings per share prior year comparatives have been restated to reflect
the impact of the share-split, which completed on 25 July 2023 (see note 8) on
basic and diluted earnings per share.
Consolidated Statement of Comprehensive Income
Year ended 31 December 2023 Year ended 31 December 2022
£m £m
Profit for the year 30.8 30.5
Other comprehensive income
Items that will be classified subsequently to profit or loss when specific
conditions are met:
Cash flow hedge - effective portion of changes in fair value 0.7 (3.9)
Cash flow hedge - reclassification to profit or loss 3.2 -
Net exchange loss on translation of foreign entities (1.3) (0.4)
Other comprehensive income/(loss), net of tax 2.6 (4.3)
Total comprehensive income for the year 33.4 26.2
Attributable to:
Equity holders of the parent 33.4 26.2
Consolidated Statement of Financial Position
Notes 31 December 2023 31 December 2022
£m £m
Non-current assets
Property, plant and equipment 26.6 31.0
Goodwill 9 311.1 311.1
Other intangible assets 9 61.7 69.0
Deferred tax assets 3.4 2.3
402.8 413.4
Current assets
Trade and other receivables 69.2 62.7
Current tax receivable - 0.6
Short-term derivative assets 0.5 0.9
Cash and cash equivalents 19.8 34.0
89.5 98.2
Total assets 492.3 511.6
Current liabilities
Trade and other payables (32.4) (33.3)
Deferred revenue 4 (104.6) (104.0)
Short-term lease liabilities 10 (4.3) (5.4)
Current tax payable (2.8) (1.7)
Short-term derivative liabilities (0.1) (1.3)
Short-term provisions (0.1) (0.1)
(144.3) (145.8)
Net current liabilities (54.8) (47.6)
Non-current liabilities
Long-term provisions (1.4) (1.3)
Deferred tax liabilities (0.9) (4.1)
Long-term derivative liabilities (2.8) (3.9)
Long-term lease liabilities 10 (21.4) (24.6)
Long-term borrowings 10 (263.7) (283.6)
(290.2) (317.5)
Total liabilities (434.5) (463.3)
Net assets 57.8 48.3
Equity
Share capital 11 0.2 0.2
Treasury reserve 11 (65.4) (70.8)
Other reserve 11 (44.3) (44.3)
Cash flow hedge reserve 11 - (3.9)
Foreign currency translation reserve 11 (2.0) (0.7)
Retained profit 169.3 167.8
Equity attributable to equity holders of the parent 57.8 48.3
Consolidated Statement of Changes in Equity
Notes Share capital Treasury reserve Other reserve Cash flow hedge reserve Foreign currency translation reserve Retained profit Equity attributable to equity holders of the parent
£m £m £m £m £m £m £m
Balance at 1 January 2022 0.2 (66.6) (44.3) - (0.3) 217.3 106.3
Profit for the year - - - - - 30.5 30.5
Other comprehensive income:
Cash flow hedge - effective portion of changes in fair value - - - (3.9) - - (3.9)
Net exchange loss on translation of foreign entities - - - - (0.4) - (0.4)
Total comprehensive income for the year - - - (3.9) (0.4) 30.5 26.2
Transactions with owners:
Share buy-back 11 - (66.6) - - - - (66.6)
Dividends 11 - - - - - (23.6) (23.6)
Vesting of share options 12 - 62.4 - - - (62.4) -
Share-based payments charge 12 - - - - - 4.1 4.1
Tax on share-based payments - - - - - 1.9 1.9
Balance at 31 December 2022 0.2 (70.8) (44.3) (3.9) (0.7) 167.8 48.3
Profit for the year - - - - - 30.8 30.8
Other comprehensive income:
Cash flow hedge - reclassification to profit or loss upon loan repayment - - - 0.4 - - 0.4
Cash flow hedge - effective portion of changes in fair value - - - 0.7 - - 0.7
Cash flow hedge - reclassification to profit or loss upon discontinuation of - - - 2.8 - - 2.8
hedge accounting
Net exchange loss on translation of foreign entities - - - - (1.3) - (1.3)
Total comprehensive income for the year - - - 3.9 (1.3) 30.8 33.4
Transactions with owners:
Share buy-back 11 - (11.9) - - - - (11.9)
Dividends 11 - - - - - (32.2) (32.2)
Vesting of share options 12 - 17.3 - - - (17.3) -
Share-based payments charge 12 - - - - - 19.4 19.4
Tax on share-based payments - - - - - 0.8 0.8
Balance at 31 December 2023 0.2 (65.4) (44.3) - (2.0) 169.3 57.8
Consolidated Statement of Cash Flows
Year ended Year ended
31 December 2023 31 December 2022
Restated(1)
Cash flows from operating activities Notes £m £m
Profit for the year 30.8 30.5
Adjustments for:
Depreciation 6.2 6.4
Amortisation 9 10.6 10.1
Other income (0.6) -
Net finance costs 7 32.2 17.6
Taxation recognised in profit or loss 10.7 7.9
Share-based payments charge 12 19.4 4.1
Increase in trade and other receivables (6.5) (9.2)
(Decrease)/increase in trade and other payables (1.1) 17.2
Revaluation of short- and long-term derivatives (0.8) 0.6
Increase in provisions 0.1 0.2
Cash generated from operations 101.0 85.4
Interest paid (23.0) (14.0)
Income taxes paid (12.0) (9.5)
Contingent consideration paid 14 (0.2) -
Total cash flows from operating activities 65.8 61.9
Cash flows from investing activities
Acquisitions 14 - (33.6)
Cash received from repayment of loans 15 - 0.9
Purchase of property, plant and equipment (0.9) (1.0)
Purchase of intangible assets 9 (3.3) (1.7)
Total cash flows used in investing activities (4.2) (35.4)
Cash flows from financing activities
Repayment of borrowings 10 (25.0) (2.5)
Proceeds from borrowings 10 - 84.5
Loan refinancing fee 10 - (0.7)
Acquisition of own shares 11 (11.9) (66.6)
Principal elements of lease payments 10 (5.4) (5.9)
Dividends paid 11 (32.2) (23.6)
Total cash flows used in financing activities (74.5) (14.8)
Net (decrease)/increase in cash and cash equivalents (12.9) 11.7
Cash and cash equivalents at beginning of year 34.0 22.6
Effects of currency translation on cash and cash equivalents (1.3) (0.3)
Cash and cash equivalents at end of year 19.8 34.0
(1) The comparative year's cash flows have been restated as explained in the
2022 restatement section of note 1.
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 to provide business information in the form of high quality
proprietary data, analytics and insights to clients in multiple sectors.
GlobalData Plc ('the Company') is a company incorporated in the United Kingdom
(England & Wales) and listed on the Alternative Investment Market (AIM),
therefore is publicly owned and limited by shares. 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 condensed financial statements have been prepared on the historical cost
basis, except for derivative financial instruments, which are measured at fair
value. While the information included in the condensed financial statements
has been prepared in accordance with United Kingdom adopted international
accounting standards and in conformity with the requirements of the Companies
Act 2006 and International Financial Reporting Standards as issued by the
IASB, this announcement does not itself contain sufficient information to
comply with United Kingdom adopted International Accounting Standards. The
condensed financial statements for the year ended 31 December 2023 have been
prepared on a consistent basis with the financial accounting policies set out
in the Accounting Policies section of GlobalData Plc's Annual Report and
Accounts for the year ended 31 December 2023. These condensed financial
statements are presented in Pounds Sterling (£).
The financial information for the year ended 31 December 2023 does not
constitute statutory accounts as defined in section 434 of the Companies Act
2006. A copy of the statutory accounts for the year ended 31 December 2023
will be delivered to the Registrar of Companies in due course. The independent
auditors' report on the full financial statements for the year ended 31
December 2023 was unqualified and did not contain an emphasis of matter
paragraph or any statement under section 498 of the Companies Act 2006.
Consideration of climate change
In preparing the financial statements, management have considered the impact
of climate change, particularly in the context of the risks identified in the
Non-Financial and Sustainability Information Statement within the Group's
Annual Report and Accounts for the year ended 31 December 2023. In
particular, management considered the impact of climate change in respect of
the following areas of accounting judgement or estimate:
· the assessment of goodwill, other intangibles and tangible fixed
assets;
· the assessment of impairment of financial assets;
· our consideration of going concern and viability;
· the useful economic lives of assets; and
· the preparation of budgets and forecasts.
As a result of these considerations, no material climate change related impact
was identified. Management are however aware of the changing nature of the
risks associated with climate change and will regularly reassess these against
the judgements and estimates made in preparing the Group's financial
statements.
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.
Climate-related risks did not have a material impact on the financial
statements.
Key sources of estimation uncertainty
Carrying value of goodwill and other intangibles
The carrying value of goodwill and other intangibles is assessed annually to
ensure that there is no impairment of these assets. Performing this assessment
requires management to estimate future cash flows to be generated by the
related cash-generating unit (CGU), 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 9
for further details on intangibles and goodwill.
Management has undertaken sensitivity analysis, taking into consideration the
impact of key impairment test assumptions arising from a range of possible
future trading and economic scenarios on each CGU. The
following individual scenarios would need to occur before impairment is
triggered within the Group:
Cash-generating unit Revenue growth falls by* Discount rate rises by*
Data, Analytics and Insights (17.8%) 32.8%
Media Business Insights ("MBI") (2.3%) 3.9%
*percentage points
No indication of impairment was noted from Management's review; there
is headroom in each CGU. Management acknowledges the sensitivity of the
revenue growth and discount rate assumptions applied to the MBI CGU; however,
Management is comfortable with these assumptions and will continue to monitor
performance regularly for any indicators of future impairment loss.
Management recognises that the 2% cost growth assumption is lower than the
current rate of inflation; however, the Group operates a focused approach to
cost management, including mitigating the impact of inflation through
advancements in technology and efficiency savings and has a strong track
record of achieving this. Therefore, Management considers the assumption to be
reasonable.
Management have modelled a reasonably possible scenario in which revenue
growth in each CGU is 3.0% lower than the assumptions used within the
impairment review. In this scenario there continues to be no indication of
impairment within the Data, Analytics and Insights CGU. Within the MBI CGU,
given the assumed revenue growth rate within the impairment review was 3.0%,
this results in a 0.0% growth rate within the modelled scenario. In this
scenario, an impairment of £3.1m would be recognised. Management recognises
that whilst this scenario is plausible, it is highly unlikely. Additionally,
in a scenario in which revenue growth is lower than expectation, cost
mitigations could be implemented to limit the income statement impact of the
revenue decline.
Critical accounting judgements
Accounting judgements in respect of the Inflexion transaction
On 21 December 2023, the Group announced that it had exchanged on a
transaction to sell 40% of the Group's Healthcare business to Inflexion.
Management have assessed the accounting implications arising from the
transaction for the year ended 31 December 2023, taking into consideration the
specific details set out in both the Share Option Agreement and Co-Investment
Agreement. The most significant judgements included:
· Assessment of Control - Management considered the requirements of the
applicable accounting standards, specifically 'IFRS 10 - Consolidated
Financial Statements' and concluded that GlobalData Plc will have control of
the Healthcare business, the results of which will therefore continue to be
fully consolidated into the results of the GlobalData Plc Group from the date
of completion. As at the same date, the Group will recognise a non-controlling
interest within equity in the Group's Statement of Financial Position.
· Put and Call Options - At the point at which all of the Conditions
Precedent of the investment agreement with Inflexion have been fulfilled, the
Group or Inflexion can exercise an option to sell (put option) / buy (call
option) the 40% shareholding in the Group's Healthcare business, following
which the transaction will complete. Management have assessed that the put and
call options meet the definition of a derivative as per 'IFRS 9 - Financial
Instruments', and as such the options are measured at fair value and any
movement in fair value will be recognised in the Income Statement. Management
have measured the fair value of the options as at 31 December 2023 to be
£nil.
· Completion date - Management have considered the Conditions Precedent set
out within the Share Option Agreement, noting that the Conditions, some of
which are outside of the control of the Group, must be fulfilled before the
Put and Call Options can be exercised. As such, Management have concluded that
the completion date will be the point at which the Options are exercised and
as at 31 December 2023 the definition of a financial asset in accordance with
IAS 32 has not been met. The Group does not have a virtually certain right to
receive the cash proceeds from Inflexion and hence no receivable has been
recognised within the Statement of Financial Position.
· Transaction Fees - Legal and professional fees incurred in relation to the
transaction are recognised as a prepayment on the Group's Statement of
Financial Position as at 31 December 2023, representing incremental costs that
are related directly to a probable future equity transaction. The costs will
be transferred to equity when the equity transaction is recognised (creation
of the non-controlling interest), or in the event that the put and call option
is not exercised, the costs will be recognised in the Income Statement at the
point that the transaction is no longer expected to complete.
· Debt and Hedge Accounting - At completion of the transaction, the Group
will repay in full the outstanding term loan and RCF from the disposal
proceeds in accordance with the mandatory prepayment clause of the Facilities
Agreement. In accordance with the requirements of 'IFRS 9 - Financial
Instruments' Management have updated the expected cash payment profile for the
term loan within the recalculation of the carrying amount of the cost of the
liability as at 21 December 2023, to reflect full settlement, noting that IFRS
9 specifies estimates of payments. By discounting the payments at the
effective interest rate ('EIR') of 9.62%, being the EIR at the time of
exchange, a cost of £3.4m is included in interest in the income statement. As
of 21 December 2023, the hedged item (i.e. the future interest costs on the
term loan) are no longer highly probable to occur and hence hedge accounting
has been discontinued in accordance with IFRS 9.
Identification of Cash-Generating Units
IAS36 '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. As at the date of the impairment review (30 September
2023), Management made the judgement that the Group had two CGUs, being Data,
Analytics and Insights and MBI.
Management is of the opinion that since acquisition and through being
integrated and further developed within the Group, the acquired intangible
assets of the Group all contribute to generating cash inflows for the wider
business, covering all subject matter areas. All subject matters are
accessible through the single operating platform (One Platform), and all
products include access to a thin layer of information spanning across all
markets and subjects. This represents the Group's main CGU, named 'Data,
Analytics and Insights'. The Group's recent acquisitions of LMC (2021) and TS
Lombard (2022) have been fully integrated into this CGU and therefore formed
part of the Data, Analytics and Insights CGU at the time of impairment review
(they were identified as individual CGUs in the prior year). In making this
judgement Management has determined that the assets acquired as part of the
acquisitions of LMC and TS Lombard are no longer generating cash flows that
are separately identifiable. Management therefore concluded that the level of
consolidation and integration does not make it possible for LMC or TS Lombard
to meet the definition of a separately identifiable CGU as required by
IAS36.
Management have concluded that the recent acquisition of MBI (acquired during
2022) remains a separate CGU as the product is inherently different to the
Groups' main offering, and the brand, strategy and management of the business
is separate from the rest of the Group. As a result of these conclusions, as
at the date of the impairment review (30 September 2023), the Group had two
CGUs.
Following the Group's reorganisation at the beginning of FY24 to create three
new customer-focused business divisions (being Healthcare, Consumer and
Technology), an assessment of the Group's CGUs will be performed ahead of the
annual impairment review (30 September).
Going concern
The Group meets its day-to-day working capital requirements through free cash
flow. The Group has closing cash of £19.8m as at 31 December 2023 and net
bank debt of £243.9m (31 December 2022: cash of £34.0m and net bank debt of
£249.6m), being cash and cash equivalents less short and long-term
borrowings, excluding lease liabilities. The Group has an outstanding term
loan of £265.0m (2022: £290.0m) which is syndicated with 12 lenders. As at
31 December 2023, the Group had undrawn RCF of £120.0m which is syndicated
with 13 lenders. During January 2024, £20.0m of the RCF was drawn down to
support a share buy-back. The Group's banking facilities are in place until
August 2025, however the Group intends to fully repay the term loan upon
completion of the investment agreement with Inflexion. In the unanticipated
event that completion does not occur, the Group will be required to renew or
extend its financing arrangements. The Group has generated £101.0m in cash
from operations during 2023 (2022: £85.4m). 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 2023. Management has reviewed forecast 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. The Directors have modelled a number of
worst-case scenarios to consider their potential impact on the Group's
results, cash flow and loan covenant forecast. Key assumptions built into the
scenarios focus on revenue and cost growth. In addition to performing scenario
planning, the Directors have also conducted stress testing of the Group's
forecasts and, taking into account reasonable downside sensitivities
(acknowledging that such risks and uncertainties exist), the Directors are
satisfied that the business is expected to operate within its facilities. The
plausible downside scenarios modelled were as follows: (i) subscription sales
in 2024 being approximately 10% lower than expectation (ii) cost growth in
line with the current UK rate of inflation and (iii) both scenarios combined.
There remains headroom on the covenants under each scenario and cash remained
in excess of £16.3m in all months.
Through our normal business practices, we are in regular communication with
our lenders and are satisfied they will be in a position to continue
supporting us for the foreseeable future.
The Directors therefore consider the strong balance sheet, with good cash
reserves and working capital along with financing arrangements, provide ample
liquidity. Accordingly, the Directors have prepared the financial statements
on a going concern basis.
2022 restatement
Following a Financial Reporting Council ("FRC") review of the consolidated
financial statements for the year ended 31 December 2022, the Group has
restated the Consolidated Statement of Cash Flows to present the settlement of
the previous term loan and Revolving Credit Facilities ("RCF"), the proceeds
from the new term loan and the loan fees incurred on the new facility as a net
financing cash inflow of £53.5m within proceeds from borrowings. The amounts
in respect of this transaction were previously presented gross, this
restatement reflects that the cash inflow actually occurred on a net basis.
The £53.5m comprises the following individual amounts:
£m
Repayment of the old term loan and RCF (229.2)
Loan fees incurred on the new facility (7.3)
Drawdown of the new term loan 290.0
Proceeds from borrowings 53.5
The proceeds from borrowings presented in the Consolidated Statement of Cash
Flows also includes a balance of £31.0m in respect of drawdowns on the old
RCF in the six months to June 2022 hence giving a total balance of £84.5m.
The impact of the restatement is set out below:
Cash flows from financing activities: 2022 2022 2022
(reported)
(restated)
(change)
£m
£m
£m
Settlement of loan (229.2) - 229.2
Proceeds from borrowings 321.0 84.5 (236.5)
Loan refinancing fee (8.0) (0.7) 7.3
83.8 83.8 -
The changes have a £nil net impact on the Group's financial position and
performance for the year ended 31 December 2022.
2. Accounting policies
These condensed financial statements have been prepared based on the
accounting policies detailed in the Group's financial statements for the year
ended 31 December 2023 and is consistent with the policies applied in the
previous year, except for the following new standards The new standards which
are effective during the year (and have not had any material impact on the
disclosures or on the amounts reported in these financial statements) are:
· IFRS 17: Insurance contracts;
· Amendments to IAS 1: Presentation of Financial Statements and
IFRS Practice Statement 2: Making Materiality Judgements - Disclosure of
Accounting Policies;
· Amendments to IAS 12: Income Taxes - Deferred Tax related to
Assets and Liabilities arising from a Single Transaction;
· Amendments to IAS 12: Income Taxes - International Tax Reform -
Pillar Two Model Rules; and
· Amendments to IAS 8: Accounting Polices, Changes in Accounting
Estimates and Errors - Definition of Accounting Estimates.
Presentation of non-statutory alternative performance measures
The Directors believe that Adjusted EBITDA, Adjusted EBITDA margin, Adjusted
profit before tax, Adjusted profit after tax and Adjusted earnings per share
provide additional useful information on the operational performance of the
Group to shareholders, and we review the results of the Group using these
measures internally. The term 'adjusted' is not a defined term under IFRS and
may not therefore be comparable with similarly titled profit measures reported
by other companies. It is not intended to be a substitute for, or superior to,
IFRS measures of profit.
Adjustments are made in respect of:
Share-based payments and associated costs Share-based payment expenses are excluded from Adjusted EBITDA as they are a
non-cash charge and the awards are equity-settled.
Restructuring, M&A (including contingent consideration) and refinancing The Group excludes these costs from Adjusted EBITDA where the nature of the
costs item, or its size, is not related to the operational performance of the Group
and allows for comparability of underlying results.
Amortisation and impairment of acquired intangible assets The amortisation charge for those intangible assets recognised on business
combinations is excluded from Adjusted EBITDA since they are non-cash charges
arising from historical investment activities. Any impairment charges
recognised in relation to these intangible assets are also excluded from
Adjusted EBITDA. This is a common adjustment made by acquisitive information
service businesses and is therefore consistent with peers. Revenues associated
with acquisitions, in the year of acquisition, are excluded from the
calculation of underlying revenue.
Revaluation of short- and long-term derivatives Gains and losses are recognised within Adjusted EBITDA when they are realised
in cash terms and therefore we exclude non-cash movements arising from
fluctuations in exchange rates which better aligns Adjusted EBITDA with the
cash performance of the business.
Unrealised operating foreign exchange gain/loss
Revaluation of interest rate swap Gains and losses on the revaluation of the interest rate swap are excluded
from Adjusted profit before tax which better aligns with the cash performance
of the business.
3. Segmental analysis
The principal activity of GlobalData Plc and its subsidiaries (together 'the
Group') is to provide business information in the form of high quality
proprietary data, analytics and insights to clients in multiple sectors.
IFRS8 "Operating Segments" requires the segment information presented in the
financial statements to be that which is used internally by the chief
operating decision maker to evaluate the performance of the business and to
decide how to allocate resources. The Group has identified the Chief Executive
as its chief operating decision maker.
The Group maintains a centralised operating model and single product platform
(One Platform), which is underpinned by a common taxonomy, shared development
resource, and new data science technologies. The fundamental principle of the
GlobalData business model is to provide our clients with subscription access
to our proprietary data, analytics, and insights platform, with the offering
of ancillary services such as consulting, single copy reports and events. The
vast majority of data sold by the Group is produced by a central research team
which produces data for the Group as a whole. The central research team
reports to one central individual, the Managing Director of the India
operation, who reports to the Group Chief Executive. 'Data, Analytics and
Insights' is therefore considered to be the operating segment of the Group.
The Group profit or loss is reported to the Chief Executive on a monthly basis
and consists of earnings before interest, tax, depreciation, amortisation,
central overheads and other adjusting items. The Chief Executive also monitors
revenue within the operating segment.
The Group considers the use of a single operating segment to be appropriate
due to:
· The Chief Executive reviewing profit or loss at the Group level;
· Utilising a centralised operating model;
· Being an integrated solutions based business, rather than a
portfolio business; and
· The M&A strategy of the Group being to fully integrate within
the One Platform.
Following the Group's reorganisation at the beginning of FY24 to create three
new customer-focused business divisions (being Healthcare, Consumer and
Technology), an assessment of the Group's reportable segments will be
performed during H1 2024.
A reconciliation of Adjusted EBITDA to profit before tax from continuing
operations is set out below:
Year ended Year ended
31 December 2023 31 December 2022
£m £m
Adjusted EBITDA 110.8 86.4
Restructuring costs (1.7) (0.6)
M&A costs (0.4) (2.9)
Contingent consideration (0.9) (1.0)
Refinancing costs - (1.9)
Share-based payment charge (19.4) (4.1)
Costs relating to share-based payment schemes (0.2) (0.9)
Revaluation gain/(loss) on short and long-term derivatives 0.8 (0.6)
Unrealised operating foreign exchange gains/(losses) 1.5 (1.9)
Amortisation of acquired intangibles (9.0) (9.1)
Depreciation (6.2) (6.4)
Amortisation (excluding amortisation of acquired intangible assets) (1.6) (1.0)
Finance costs (32.2) (17.6)
Profit before tax 41.5 38.4
Geographical analysis
Our primary geographical markets are serviced by our global sales teams which
are organised as Europe, US and Asia Pacific by virtue of the team location.
The below disaggregated revenue is derived from the geographical location of
our customers rather than the team structure the Group is organised by.
From continuing operations
Year ended 31 December 2023 UK Europe Americas(1) Asia Pacific MENA(2) Rest of World Total
£m £m £m £m £m £m £m
Revenue from external customers 43.4 73.9 99.1 27.9 20.4 8.4 273.1
Year ended 31 December 2022 UK Europe Americas(1) Asia Pacific MENA(2) Rest of World Total
£m £m £m £m £m £m £m
Revenue from external customers 36.0 64.7 91.4 27.2 16.6 7.3 243.2
1. Americas includes revenue from the United States of America
of £95.8m (2022: £86.7m)
2. Middle East & North Africa
Intangible assets held in the US and Canada were £35.1m (2022: £35.9m), of
which £31.6m related to goodwill (2022: £31.6m). Intangible assets held in
the UAE were £12.1m (2022: £12.8m) of which £11.4m related to goodwill
(2022: £11.4m). All other non-current assets are held in the UK. The largest
customer represented less than 2% of the Group's consolidated revenue.
4. Revenue
The Group generates revenue from services provided over a period of time such
as recurring subscriptions and other services which are deliverable at a point
in time such as reports, events and custom research.
Subscription income for online services, data and analytics (typically 12
months) is normally invoiced at the beginning of the services and is therefore
recognised as a contract liability, "deferred revenue", in the statement of
financial position. Revenue is recognised evenly over the period of the
contractual term as the performance obligations are satisfied evenly over the
term of subscription.
The revenue on services delivered at a point in time is recognised when our
contractual obligation is satisfied, such as delivery of a static report or
delivery of an event. The obligation on these types of contracts is a discrete
obligation, which once met satisfies the Group performance obligation under
the terms of the contract.
Any invoiced contracted amounts which are still subject to performance
obligations and where the payment has been received or is contractually due
are recognised within deferred revenue at the statement of financial position
date. Typically, the Group receives settlement of cash at the start of each
contract and standard terms are zero days. Similarly, if the Group satisfies a
performance obligation before it receives the consideration or is
contractually due the Group recognises a contract asset within accrued income
in the statement of financial position.
Revenue recognised in the Consolidated Income Statement Deferred Revenue recognised within the Consolidated Statement of Financial
Position
Year ended 31 December 2023 Year ended 31 December 2022 As at 31 December 2023 As at 31 December 2022
£m £m £m £m
Services transferred:
Over a period of time 215.3 196.5 89.5 91.6
At a point in time 57.8 46.7 15.1 12.4
Total 273.1 243.2 104.6 104.0
As subscriptions are typically for periods of 12 months the majority of
deferred revenue held at 31 December will be recognised in the income
statement in the following year. As at 31 December 2023, £2.0m (2022: £1.1m)
of the deferred revenue balance will be recognised beyond the next 12 months.
In the year ended 31 December 2023 the Group recognised revenue of £102.9m
(2022: £81.0m) that was included in the deferred revenue balance at the
beginning of the period. The opening deferred revenue balance as at 1 January
2022 was £81.4m.
As at 31 December 2023, the total non-cancellable obligations within deferred
revenue to fulfil revenue amounted to £104.6m (2022: £104.0m). As at the
same date, the total non-cancellable obligations within Invoiced Forward
Revenue to fulfil revenue amounted to £135.2m (2022: £133.5m).
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.
5. Operating profit
Operating profit is stated after the following expenses relating to continuing
operations:
Year ended Year ended
31 December 2023 31 December 2022
£m £m
Cost of sales 132.0 125.7
Administrative costs 65.7 60.9
197.7 186.6
Losses on trade receivables 2.3 0.7
Total operating expenses 200.0 187.3
Cost of sales includes all directly attributable costs of sale including
product, consulting and sales costs. Administrative costs includes all other
costs of operations.
6. Adjusting items
Year ended Year ended
31 December 2023 31 December 2022
£m £m
Share-based payment charge 19.4 4.1
Amortisation of acquired intangibles 9.0 9.1
Restructuring costs 1.7 0.6
Contingent consideration 0.9 1.0
M&A costs 0.4 2.9
Costs relating to share-based payments scheme 0.2 0.9
Refinancing costs - 1.9
Revaluation (gain)/loss on short and long-term derivatives (0.8) 0.6
Unrealised operating foreign exchange (gain)/loss (1.5) 1.9
Total adjusting items 29.3 23.0
The adjustments made are as follows:
· The share-based payments charge is in relation to the
share-based compensation plans (detailed in note 12) under which the entity
receives services from employees as consideration for equity instruments
(options) of the Group. The fair value of the employee services received in
exchange for the grant of the options and awards is recognised as an expense
in the income statement. The total amount to be expensed is determined by
reference to the fair value of the options granted. The original fair value on
grant date is charged to the income statement based upon the Monte-Carlo
method. Following modification on 30 November 2022, an additional charge for
the beneficial modification was determined by the Black-Scholes method.
· The amortisation charge for those intangible assets
recognised on business combinations.
· Restructuring costs relate to redundancy payments and
professional fees incurred in relation to group reorganisation projects.
· The contingent consideration amounts relate to payments due
to the previous owners of MBI and TS Lombard between 2023 and 2025. These have
been treated as remuneration costs due to their being contingent upon the
former owners remaining as employees of the Group at the time of payment.
· The M&A costs consist of professional fees incurred in
performing due diligence relating to potential acquisition targets and
redundancy costs in relation to group integration projects.
· Costs relating to share-based payments scheme consist of
employer taxes borne as a result of the vesting of options within the final
tranche of Scheme 1 during the year, and professional fees incurred in advice
obtained relating to the consolidation and subdivision of share capital.
· Refinancing costs in the prior year consisted of legal fees
incurred in relation to (i) the extension of the previously held term loan and
RCF by one year (completed during June 2022) and (ii) the arrangement of the
new loan facility which was drawn down upon during August 2022.
· 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 gains and losses
relate to non-cash exchange losses and gains made on operating items.
7. Net finance costs
Year ended 31 December Year ended 31 December
2023 2022
£m £m
Loan interest cost 28.6 16.4
Lease interest cost 1.1 1.3
Revaluation of interest rate swap 2.8 -
Other interest cost 0.1 0.1
Other interest income (0.4) (0.2)
32.2 17.6
Loan interest cost includes non-cash interest relating to financial
liabilities measured at amortised cost of £5.1m (2022: 2.1m). The increased
charge in the year reflects the change in anticipated cash flows on the term
loan. The Group intends to fully repay the loan upon completion of the
investment agreement with Inflexion. As a result of the change in anticipated
cash flows, the Group recognised a non-cash interest expense of £3.4m in
accordance with IFRS 9, which requires that any revisions to the estimate of
payments, should be adjusted against the amortised cost of a financial
liability by recalculating the present value of the estimated future cash
flows, discounted at the financial instrument's original effective interest
rate.
The £2.8m charge in respect of the revaluation of the interest rate swap
reflects that the hedged items (future interest repayments) are no longer
probable or expected to occur and as such hedge accounting has been
discontinued. The cumulative loss balance held in the cash flow hedge reserve
of £2.8m was transferred to the income statement at the end of the year
(2022: £3.9m loss recognised through the statement of other comprehensive
income).
8. Earnings per share
The calculation of the basic earnings per share is based on the earnings
attributable to ordinary shareholders of the parent company divided by the
weighted average number of shares in issue during the period. The Group also
has a share options scheme in place and therefore the Group has calculated the
dilutive effect of these options.
Pursuant to a capital reorganisation exercise undertaken on 25 July 2023, the
Company's existing 118,303,869 ordinary shares in issue (nominal value
£0.000714 per share) were consolidated, based on 1 consolidated share for
every 14 existing ordinary shares, and then subdivided, based on 100 new
ordinary shares for every 1 consolidated share. Post-reorganisation, there
were 845,027,700 ordinary shares in issue (nominal value £0.0001 per share)
which were admitted to AIM and commenced dealing on 26 July 2023.
The prior year comparatives have been restated to reflect the impact of the
share-split on basic and diluted earnings per share in accordance with IAS 33:
Earnings Per Share.
The earnings per share presented below is based upon the post-reorganisation
share structure:
Year ended Year ended
31 December 2023 31 December 2022
Restated
Earnings per share attributable to equity holders from continuing operations:
Basic
Profit for the period attributable to ordinary shareholders of the parent 30.8 30.5
company (£m)
Weighted average number of shares (no' m) 807.1 805.0
Basic earnings per share (pence) 3.8 3.8
Diluted
Profit for the period attributable to ordinary shareholders of the parent 30.8 30.5
company (£m)
Weighted average number of shares (no' m) 818.2 819.3
Diluted earnings per share (pence) 3.8 3.7
Reconciliation of basic weighted average number of shares to the diluted
weighted average number of shares:
Year ended Year ended
31 December 2023 31 December 2022
Restated
No' m No' m
Basic weighted average number of shares, net of shares held in treasury 807.1 805.0
reserve
Dilutive share options in issue - scheme 1 4.5 14.3
Dilutive share options in issue - scheme 2 6.6 -
Diluted weighted average number of shares 818.2 819.3
The diluted earnings per share calculation does not include
performance-related share options where the performance criteria had not been
met in the period, in accordance with IAS 33. The table below shows the number
of share options which could become dilutive should future performance
criteria be met. It excludes 6,624,997 options which are anticipated to vest
in the year ended 31 December 2024 as these are included in the diluted
weighted average number of shares calculation above given the performance
criteria for these options has been met.
Potentially dilutive shares 2024 2025 2026 2027 Total
Schedule No. No. No. No. No.
Scheme 2 - 6,624,997 6,624,997 6,624,997 19,874,991
Scheme 4 - 1,964,276 3,928,552 13,749,935 19,642,763
Total - 8,589,273 10,553,549 20,374,932 39,517,754
9. Intangible assets
AUC* Software Customer relationships Brands IP rights and database Goodwill Total
£m £m £m £m £m £m £m
Cost
As at 1 January 2022 - 12.8 55.8 16.2 75.5 302.7 463.0
Additions: Business combinations - 0.9 9.5 10.0 2.4 19.2 42.0
Additions: Separately acquired - 1.7 - - - - 1.7
Fair value adjustment - - - - - 0.1 0.1
As at 31 December 2022 - 15.4 65.3 26.2 77.9 322.0 506.8
Additions: Separately acquired 0.2 3.0 - 0.1 - - 3.3
As at 31 December 2023 0.2 18.4 65.3 26.3 77.9 322.0 510.1
Amortisation
As at 1 January 2022 - (11.0) (32.6) (11.3) (49.5) (10.9) (115.3)
Additions: Business combinations - (0.8) - - (0.5) - (1.3)
Charge for the year - (1.1) (5.2) (0.9) (2.9) - (10.1)
As at 31 December 2022 - (12.9) (37.8) (12.2) (52.9) (10.9) (126.7)
Charge for the year - (1.6) (4.7) (1.2) (3.1) - (10.6)
As at 31 December 2023 - (14.5) (42.5) (13.4) (56.0) (10.9) (137.3)
Net book value
As at 31 December 2023 0.2 3.9 22.8 12.9 21.9 311.1 372.8
As at 31 December 2022 - 2.5 27.5 14.0 25.0 311.1 380.1
*AUC: Assets under construction which will be transferred to software post
development.
10. Borrowings
31 December 2023 31 December
£m 2022
£m
Short-term lease liabilities 4.3 5.4
Current liabilities 4.3 5.4
Long-term lease liabilities 21.4 24.6
Long-term borrowings 263.7 283.6
Non-current liabilities 285.1 308.2
The changes in the Group's borrowings can be classified as follows:
Short-term borrowings Long-term borrowings Short-term lease liabilities(2) Long-term lease liabilities(2) Total
£m £m £m £m £m
As at 1 January 2022 5.0 195.2 4.1 29.3 233.6
Cash flows:
- Repayment (2.5) - (5.9) - (8.4)
- Proceeds (restated(1)) - 84.5 - - 84.5
- Loan fees paid (restated(1)) - (0.7) - - (0.7)
Non-cash:
- Interest expense - 2.1 - - 2.1
- Lease additions - - 0.6 - 0.6
- Lease liabilities(3) - - 1.5 0.4 1.9
- Reclassification (2.5) 2.5 5.1 (5.1) -
As at 31 December 2022 - 283.6 5.4 24.6 313.6
Cash flows:
- Repayment - (25.0) (5.4) - (30.4)
- Proceeds - - - - -
- Loan fees paid - - - - -
- Settlement of loan - - - - -
Non-cash:
- Interest expense - 5.1 - - 5.1
- Lease additions - - 1.4 - 1.4
- Lease liabilities(3) - - 0.1 (0.4) (0.3)
- Reclassification - - 2.8 (2.8) -
As at 31 December 2023 - 263.7 4.3 21.4 289.4
(1) The comparative year's cash flows have been restated as explained in the
2022 restatement section of the Accounting Policies on page 28.
(2) Amounts are net of rental prepayments and accruals
(3) Represents lease interest, dilapidations and movement on lease liability
accruals and prepayments
Term loan and RCF
During August 2022, the Group completed a new three-year debt financing
facility to give the Group additional funding to support the long-term growth
of the business, including M&A. The debt facility comprises a £290.0m
term loan and a RCF of £120.0m. The new facilities were arranged to cover a
period of three years. There are no fixed periodic capital repayments, with
the full balance being due for settlement when the facilities expire in August
2025. The term loan is syndicated between 12 lenders and the RCF is syndicated
between 13 lenders.
As at 31 December 2022, the Group had fully drawn down the term loan of
£290.0m. On 3 April 2023, the Group voluntarily repaid £25.0m of the term
loan, resulting in the current term loan drawdown on 31 December 2023 of
£265.0m. As at 31 December 2023, the Group was yet to draw down the available
RCF facility of £120.0m. During January 2024, £20.0m of the RCF was drawn
down to support a share buy-back. In accordance with the provisions of IFRS9
(including offsetting of loan fees paid as part of the refinancing process),
the term loan is held on the statement of financial position with a value of
£263.7m (31 December 2022: £283.6m). The Group intends to fully repay the
loan upon completion of the investment agreement with Inflexion. As a result
of the change in anticipated cash flows, the Group recognised a non-cash
interest expense of £3.4m in accordance with IFRS 9, which requires that any
revisions to the estimate of payments, should be adjusted against the
amortised cost of a financial liability by recalculating the present value of
the estimated future cash flows, discounted at the financial instrument's
original effective interest rate.
Interest is currently charged on the term loan at a rate of 3.0% over the
Sterling Overnight Index Average rate (SONIA) and is payable at the end of
each calendar quarter. The Group entered into an interest rate swap during
October 2022, with an effective date of 30 September 2022, initially based on
a notional amount of £290.0m, which matched against the initial term loan
drawdown. The notional amount of the swap was amended to £265.0m on 3 April
2023 (the same date as the voluntary repayment noted above), which aligns to
the current term loan draw down. The agreement is to swap, on a calendar
quarter basis, SONIA for a fixed rate of 4.9125%.
11. Equity
Share capital
Authorised, allotted, called up and fully paid:
31 December 2023 31 December 2022
No'000s(1) Percentage of Total Shares £000s No'000s(1) Percentage of Total Shares £000s
Restated
Ordinary shares (£0.0001) 845,028 99.99 84 845,028 99.99 84
Deferred shares of £1.00 each 100 0.01 100 100 0.01 100
Total authorised, allotted, called up and fully paid 845,128 100.00 184 845,128 100.00 184
(1)Reflects post-reorganisation position as detailed below.
Pursuant to a capital reorganisation exercise undertaken on 25 July 2023, the
Company issued nine ordinary shares to increase the number of ordinary shares
in issue to 118,303,878 (nominal value £0.000714 per share). All existing
ordinary shares were then consolidated, based on 1 consolidated share for
every 14 existing ordinary shares, and subdivided, based on 100 new ordinary
shares for every 1 consolidated share. Post-reorganisation, there were
845,027,700 ordinary shares in issue (nominal value £0.0001 per share) which
were admitted to AIM and commenced dealing on 26 July 2023.
The prior year comparatives have been restated to reflect the impact of the
share-split on basic and diluted earnings per share in accordance with IAS 33:
Earnings Per Share.
Share Purchases
During the year the Group's Employee Benefit Trust purchased an aggregate
amount of 7,862,788 shares (representing 0.9% of the total share capital),
each with a nominal value of 1/100(th) pence, at a total market value of
£11.9m. The purchased shares will be held for the purpose of satisfying the
exercise of share options under the Company's Employee Share Option Plan.
During the year, a total of 9,784,472 shares (representing 1.2% of the total
share capital), each with a nominal value of 1/100(th) pence, which were held
by the Group's Employee Benefit Trust were utilised as a result of the vesting
of the final tranche of Scheme 1 share options (at a total market value of
£17.3m), as disclosed in note 12.
The maximum number of shares (each with a nominal value of 1/100(th) pence)
held by the Employee Benefit Trust (at any time during the year ended 31
December 2023) was 39,921,579 (representing 4.7% of the total share capital).
The purchase of shares by the trust is to limit the eventual dilution to
existing shareholders. As at 31 December 2023, no dilution is forecast until
2027.
Vesting Schedule 2024 No. 2025 No. 2026 No. 2027 No. Total No.
Scheme 1* 2,230,806 2,230,805 - - 4,461,611
Scheme 2 6,624,997 6,624,997 6,624,997 6,624,997 26,499,988
Scheme 4 - 1,964,276 3,928,552 13,749,935 19,642,763
Total 8,855,803 10,820,078 10,553,549 20,374,932 50,604,362
Shares held in trust (8,855,803) (10,820,078) (10,553,549) (7,656,129) (37,885,559)
Net dilution - - - 12,718,803 12,718,803
*The remaining share options in Scheme 1 can be exercised anytime until August
2033 and therefore for the purposes of this analysis we have assumed they will
be exercised within the next two years.
Capital management
The Group's capital management objectives are:
· To ensure the Group's ability to continue as a going concern; and
· 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 bank debt, which includes
borrowings (note 10) 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 2022 was 2.6 pence per share (restated) and was paid in
April 2023. The total dividend for the current year is 4.6 pence per share,
with an interim dividend of 1.4 pence per share paid on 6 October 2023 to
shareholders on the register at the close of business on 8 September 2023, and
a final dividend of 3.2 pence per share will be paid on 26 April 2024 to
shareholders on the register at the close of business on 22 March 2024. The
ex-dividend date will be on 21 March 2024.
Treasury reserve
The treasury reserve represents the cost of shares held in the Group's
Employee Benefit Trust for the purpose of satisfying the exercise of share
options under the Company's Employee Share Option Plan.
Cash flow hedge reserve
The cash flow hedge reserve contains the fair valuation movements arising from
revaluation of interest rate swaps. Changes in fair value of derivative
financial instruments that are designated, and effective, cash flow hedges of
forecast transactions are recognised in other comprehensive income and
accumulated under the heading of cash flow hedge reserve, limited to the
cumulative change in fair value of the hedged item from inception of the
hedge. The gain or loss relating to the ineffective portion is recognised
immediately in profit or loss. The cumulative amount recognised in other
comprehensive income and accumulated in equity is reclassified into the
consolidated income statement out of other comprehensive income in the same
period when the hedged item is recognised in profit or loss.
The disclosures above are for both the Group and the Company.
Other reserve
Other reserve consists of a reserve created upon the reverse acquisition of
TMN Group Plc in 2009.
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.
12. Share-based payments
Scheme 1 - fully vested and closed to new participants
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 Adjusted 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.
Each of the awards were subject to vesting criteria set by the Remuneration
Committee. As disclosed in the 2021 Annual Report and Accounts, the final
vesting target of £52m Adjusted EBITDA (excluding the impact of IFRS16) was
met in the financial year ending 31 December 2021 and therefore the final
tranche of Scheme 1 options vested during 2022. Scheme 1 is now therefore
closed.
The total charge recognised for the scheme during the 12 months to 31 December
2023 was £nil (2022: £nil).
The Remuneration Committee approved the vesting of the final tranche of Scheme
1 on 11 August 2022. The awards of the scheme were settled with ordinary
shares of the Company. Whilst the majority of participants chose to exercise
their options during the year ended 31 December 2022, holders of the remaining
14.3m options (post share reorganisation) chose to defer their exercise, as
allowable under the scheme rules. During the year ended 31 December 2023, 9.8m
of these options were exercised, resulting in 4.5m deferred options as at 31
December 2023. As a result of these options vesting during the year, £17.3m
was transferred from the Group's treasury reserve to retained earnings of
which £17.3m is distributable. The weighted average price of the exercised
options at the date of exercise was £1.77 per share.
Reconciliation of movement in the number of options is provided below. No new
grants were awarded during 2023.
Pre Capital Reorganisation Values Post Capital Reorganisation Values
Option exercise price Remaining life Number of Option exercise price Remaining life Number of
(pence) (years) options (pence) (years) options
31 December 2022 1/14th 0.0 1,994,453 1/100th 0.0 14,246,083
Exercised 1/14th N/A (1,369,828) 1/100th N/A (9,784,472)
31 December 2023 1/14th 0.0 624,625 1/100th 0.0 4,461,611
The options carried forward as at 31 December 2023 are both outstanding and
exercisable. The maximum term of the remaining options outstanding is 10
years, ending in August 2033.
Scheme 2 - 2019 scheme
The following assumptions were used in the valuation:
Award tranche Award 1 Award 2 Award 3 Award 5 Award 7 Award 8
Grant date 31/10/19 07/05/20 25/05/20 22/09/20 23/03/21 31/01/23
Expected dividend yield 3.06% 3.06% 3.06% 3.06% 3.06% 3.57%
Volatility 26.87% 26.87% 26.87% 26.87% 26.87% 28.62%
Initial share price (pre capital reorganisation) £12.25 £12.25 £12.25 £12.25 £12.25 £12.55
Initial share price (post capital reorganisation) £1.72 £1.72 £1.72 £1.72 £1.72 £1.76
Group achieves £100m EBITDA by 1 March 2024 25% vest 25% vest 25% vest 25% vest 25% vest 25% vest
Fair value (pre capital reorganisation) £11.79 £11.79 £11.79 £11.79 £11.79 £12.07
Fair value (post capital reorganisation) £1.65 £1.65 £1.65 £1.65 £1.65 £1.69
Risk-free interest rate 3.17% 3.17% 3.17% 3.17% 3.17% 3.24%
Estimated forfeiture rate 8% 8% 8% 8% 8% 7%
Remaining contractual life 0.17 0.17 0.17 0.17 0.17 0.17
Group achieves £110m EBITDA by 1 March 2025 25% vest 25% vest 25% vest 25% vest 25% vest 25% vest
Fair value (pre capital reorganisation) £11.43 £11.43 £11.43 £11.43 £11.43 £11.65
Fair value (post capital reorganisation) £1.60 £1.60 £1.60 £1.60 £1.60 £1.63
Risk-free interest rate 3.24% 3.24% 3.24% 3.24% 3.24% 3.32%
Estimated forfeiture rate 13% 13% 13% 13% 13% 12%
Remaining contractual life 1.17 1.17 1.17 1.17 1.17 1.17
Group achieves £125m EBITDA by 1 March 2026 25% vest 25% vest 25% vest 25% vest 25% vest 25% vest
Fair value (pre capital reorganisation) £11.09 £11.09 £11.09 £11.09 £11.09 £11.24
Fair value (post capital reorganisation) £1.55 £1.55 £1.55 £1.55 £1.55 £1.57
Risk-free interest rate 3.20% 3.20% 3.20% 3.20% 3.20% 3.12%
Estimated forfeiture rate 19% 19% 19% 19% 19% 18%
Remaining contractual life 2.17 2.17 2.17 2.17 2.17 2.17
Group achieves £145m EBITDA by 1 March 2027 25% vest 25% vest 25% vest 25% vest 25% vest 25% vest
Fair value (pre capital reorganisation) £10.76 £10.76 £10.76 £10.76 £10.76 £10.85
Fair value (post capital reorganisation) £1.51 £1.51 £1.51 £1.51 £1.51 £1.52
Risk-free interest rate 3.24% 3.24% 3.24% 3.24% 3.24% 3.21%
Estimated forfeiture rate 24% 24% 24% 24% 24% 23%
Remaining contractual life 3.17 3.17 3.17 3.17 3.17 3.17
Awards 4 and 6 have been fully forfeited. For all options noted within the
table above, the post capital reorganisation exercise price per option is
£0.0001 (equivalent to 1/100(th) pence) and the expected dividend yield has
been assumed to be paid throughout the performance period. The volatility used
within the calculations was determined by calculating the Group's observed
historical volatility over a period equal to the time until the end of the
assumed maturity date.
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 believes the current assumptions to be
reasonable.
The total charge recognised for the scheme during the 12 months to 31 December
2023 was £13.6m (2022: £3.3m). The awards of the scheme will be settled with
ordinary shares of the Company.
Reconciliation of movement in the number of options in Scheme 2 is provided
below.
Pre Capital Reorganisation Values Post Capital Reorganisation Values
Option exercise price Remaining life Number of Option exercise price Remaining life Number of
(pence) (years) options (pence) (years) options
31 December 2022 1/14th 2.8 3,360,000 1/100th 2.8 24,000,000
Granted 1/14th N/A 500,000 1/100th N/A 3,571,427
Forfeited 1/14th N/A (150,000) 1/100th N/A (1,071,429)
31 December 2023 1/14th 1.7 3,710,000 1/100th 1.7 26,499,998
The options carried forward as at 31 December 2023 are both outstanding and
exercisable.
Scheme 4 - 2021 scheme
The following assumptions were used in the valuation:
Award tranche Award 1 Award 2 Award 3
Grant date 07/03/22 31/01/23 23/05/23
Expected dividend yield 3.06% 3.57% 3.34%
Volatility 26.87% 28.62% 29.40%
Initial share price (pre capital reorganisation) £12.25 £12.55 £13.10
Initial share price (post capital reorganisation) £1.72 £1.76 £1.83
Group achieves £110m EBITDA by 1 March 2025 10% vest 10% vest 10% vest
Fair value (pre capital reorganisation) £11.43 £11.65 £12.35
Fair value (post capital reorganisation) £1.60 £1.63 £1.73
Risk-free interest rate 3.24% 3.32% 4.10%
Estimated forfeiture rate 16% 15% 13%
Remaining contractual life 1.17 1.17 1.17
Group achieves £125m EBITDA by 1 March 2026 20% vest 20% vest 20% vest
Fair value (pre capital reorganisation) £11.09 £11.24 £11.94
Fair value (post capital reorganisation) £1.55 £1.57 £1.67
Risk-free interest rate 3.20% 3.12% 4.02%
Estimated forfeiture rate 22% 21% 19%
Remaining contractual life 2.17 2.17 2.17
Group achieves £145m EBITDA by 1 March 2027 70% vest 70% vest 70% vest
Fair value (pre capital reorganisation) £10.76 £10.85 £11.55
Fair value (post capital reorganisation) £1.51 £1.52 £1.62
Risk-free interest rate 3.24% 3.21% 3.97%
Estimated forfeiture rate 28% 27% 25%
Remaining contractual life 3.17 3.17 3.17
For all options noted within the table above, the post capital reorganisation
exercise price per option is £0.0001 (equivalent to 1/100(th) pence) and the
expected dividend yield has been assumed to be paid throughout the performance
period. The volatility used within the calculations was determined by
calculating the Group's observed historical volatility over a period equal to
the time until the end of the assumed maturity date.
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 believes the current assumptions to be
reasonable.
The total charge recognised for the scheme during the 12 months to 31 December
2023 was £5.8m (2022: £0.8m). The awards of the scheme will be settled with
ordinary shares of the Company.
Reconciliation of movement in the number of options in Scheme 4 is provided
below.
Pre Capital Reorganisation Values Post Capital Reorganisation Values
Option exercise price Remaining life Number of Option exercise price Remaining life Number of
(pence) (years) options (pence) (years) options
31 December 2022 1/14th 3.9 1,716,000 1/100th 3.9 12,257,143
Granted 1/14th N/A 1,446,000 1/100th N/A 10,328,477
Forfeited 1/14th N/A (412,000) 1/100th N/A (2,942,857)
31 December 2023 1/14th 2.8 2,750,000 1/100th 2.8 19,642,763
The options carried forward as at 31 December 2023 are both outstanding and
exercisable.
13. Contingent liabilities
The Group has a contingent liability in relation to professional fees incurred
which become payable upon completion of the investment agreement. The total
potential fee payable amounts to £6.6m.
In addition, taxation charges are expected to crystallise within the Group as
a result of entering into the investment agreement, based on the steps
required to re-organise the Healthcare business into its own corporate
perimeter. The ultimate cash tax payable will be based on the specific facts
and circumstances, including the relevant value of the Healthcare business
attributable to the jurisdictions in which it operates and the relevant tax
laws and regulations of each territory, however, the current charge is
estimated to total £20.7m.
There were no contingent liabilities as at 31 December 2022.
14. Acquisitions
The Group did not undertake any acquisitions during the year ended 31 December
2023, however a contingent consideration payment of £0.2m in relation to the
MBI acquisition (acquired during the year ended 31 December 2022) was made.
15. Related party transactions
Mike Danson, GlobalData's Chief Executive, owned 59.1% of the Company's
ordinary shares as at 31 December 2023 and 57.8% as at 4 March 2024 and is
therefore the Company's ultimate controlling party. Mike Danson owns a number
of other businesses, a small number of which interact with GlobalData Plc.
The Board has put in place an additional control framework to ensure related
party transactions are well controlled and managed. Related party transactions
are overseen by a subcommittee of the Board. The Related Party Transactions
Committee, consisting of 4 Non-Executive Directors and chaired by Murray Legg
meets to:
o Oversee all related party transactions;
o Ensure transactions are in the best interests of GlobalData and its wider
stakeholders; and
o Ensure all transactions are recorded and disclosed on an arm's length
basis.
As previously noted, it is the intention of the Board and Management to reduce
and eventually eliminate related party transactions and wind down the service
agreements that are currently in place. During 2023 we have continued the
progress made in 2021 and 2022 and now expect to have eliminated all legacy
relationships with related parties by 31 December 2024.
During the year, the following related party transactions were entered into by
the Group:
Accommodation
GlobalData Plc sub-let office space to other companies owned by Mike Danson,
but this materially ceased in 2021 with the exception of one property (the
related party tenant exited as at 31 December 2022 and therefore no related
party property transactions happened in 2023). The total sub-lease income for
the year ended 31 December 2023 was £nil (2022: £0.1m). During the year
ended 31 December 2023, the Group utilised a private yacht (owned by Mike
Danson) to host a commercial event. The Group paid disbursements for food,
drinks and staff wages whilst hosting the event, which amounted to £34,000
(2022: £nil).
Corporate support services
In 2023 net corporate support charges of £0.1m were charged from NS Media
Group Limited ("NSMGL") and net corporate support charges of £0.1m were
charged to Estel Property Investments No.3 Limited, both companies are related
parties by virtue of common ownership (2022: £0.6m charge from NSMGL). The
corporate support charges in 2023 consist of a share of the India management
team cost which have been recharged on a consistent basis to other corporate
support charges in previous years and are determined by headcount.
Additionally included in the charges are shared software development and
recharged salary costs. In 2022 the corporate support charges principally
consisted of shared IT support and software development, the contract for
which ended during 2022.
Loan to Progressive Trade Media Limited
The previous outstanding loan was fully repaid on 31 January 2022 and
generated interest income in 2023 of £nil (2022: £5,000). Interest was
charged throughout the term of the loan at a rate of 2.25% above LIBOR. The
loan was specifically entered into in relation to the divestment of non-core
print and advertising businesses in 2016 and no further loan relationships are
expected.
Revenue contract containing IP sharing clause
The Group entered into a five-year data services agreement with NSMGL in June
2020. The agreed suite of data services provided to NSMGL was contracted on
terms equivalent to those that prevail in arm's length transactions. The Group
mutually agreed with NSMGL to terminate this agreement on 1 July 2022 in order
to reduce the amount of related party transactions as well as a different
strategic direction in NSMGL. The total revenue generated from this contract
during 2023 was £nil (2022: £0.4m) and the net contribution generated was
£nil (2022: £0.2m). The cancellation was in accordance with the contracted
terms.
NSMGL also acted as a sales distributor for some GlobalData products. On these
transactions they charged agent fees of £0.2m (2022: £0.2m).
Charity donations
During the year the Group paid donations of £0.04m (2022: £0.1m) to
charities in India which were funded by a related party entity, The Danson
Foundation (charity reference 1121928). This was a pass-through transaction,
with the Group facilitating payment to charities in India.
Balances outstanding
As at 31 December 2023, the total balance receivable from NSMGL was £nil.
There is no specific credit loss provision in place in relation to this
receivable and the total expense recognised during the period in respect of
bad or doubtful debts was £nil.
The Group has taken advantage of the exemptions contained within IAS24:
Related Party Disclosures from the requirement to disclose transactions
between Group companies as these have been eliminated on consolidation. The
amounts outstanding for other related parties were £nil (2022: £nil). There
were no other balances owing to or from related parties.
Directors and Key Management Personnel
The remuneration of Directors is disclosed within the Directors' Remuneration
Report within the Group's Annual Report and Accounts for the year ended 31
December 2023.
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