REG - GlobalData PLC - Half Year Results
31/07/2023 07:00
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RNS Number : 6395H GlobalData PLC 31 July 2023
31 July 2023
GlobalData Plc
Half Year Results
30 June 2023
GlobalData Plc (AIM: DATA), a leading data, analytics, and insights platform,
today publishes its results for the half year ended 30 June 2023 (HY 2023).
· Outperforming our Growth Optimisation Plan objectives to date,
driven by high growth and high margin
· Strong trading performance during HY 2023 with revenue growth of
21% and underlying growth(1) of 8%
· Adjusted EBITDA(1) growth of 37% and further margin expansion to
39% (HY 2022: 35%)
· Statutory profit before tax grew by 59% to £23.9m (HY 2022:
£15.0m)
· On track to deliver our goal of being a 'Rule of 50'(2) company
· Expect to deliver results in line with increased market
expectations(3) for FY 2023
Highlights
Financial results for the six months ended 30 June 2023.
Key performance metrics HY 2023 HY 2022 Growth Underlying growth(1)
Revenue £135.9m £111.9m +21% +8%
Operating profit £36.9m £24.1m +53%
Adj. EBITDA £53.5m £39.0m +37% +18%
Adj. EBITDA margin(1) 39% 35% +4pts
Statutory profit before tax (PBT) £23.9m £15.0m +59%
Earnings per share (EPS) 2.2p 1.3p(4) +69%
Adj. EPS(1) 3.4p 2.9p(4) +17%
Interim dividend 1.4p 1.1p(4) +27%
Invoiced Forward Revenue(1) £122.9m £114.6m +7% +9%
Net bank debt(1) £230.8m £190.5m +21%
Net bank debt leverage(1) 2.3x 2.6x -0.3x
Mike Danson, Chief Executive Officer of GlobalData Plc, commented:
"GlobalData has delivered another period of strong revenue, profit and margin
performance during the first half and we are outperforming our Growth
Optimisation Plan objectives to date. Comparing to HY 2020, we have
effectively doubled our Adjusted EBITDA and increased margin by 8pts
demonstrating significant progress in that time.
We continue to leverage our proven One Platform and invest in our proprietary
data and technology, and we are particularly excited by the opportunities we
see to leverage our proprietary datasets and domain expertise with new AI
technology. We have a clear roadmap focused on improving platform usability,
driving greater automation, developing new products, and enhancing our
internal processes.
We have clear visibility on full year revenues and a strong business model
that is delivering sustained growth. We enter the second half with continued
momentum and remain focused on executing our long-term compounding Growth
Optimisation Plan."
Financial Highlights
· Strong growth in both revenue and Adjusted EBITDA nearing our
'rule of 50' goal
· Total revenue growth of 21%, supported by acquisitions and
currency tailwinds as well as underlying revenue growth of 8%
· Invoiced Forward Revenue of £122.9m at 30 June 2023 increased by
7% (HY 2022: £114.6m) which reflected underlying growth of 9%, providing
confidence for H2
· Adjusted EBITDA up 37% to £53.5m (HY 2022: £39.0m)
· Adjusted EBITDA margin improvement of 4 percentage points to
39% reflecting the operating leverage and fixed cost base inherent in
GlobalData's business model
· Statutory PBT grew by 59% to £23.9m (HY 2022: £15.0m)
reflecting strong trading performance
· Operating cash flow grew by 12% to £63.0m (HY 2022: £56.1m)
which was 118% of Adjusted EBITDA (HY 2022: 144%)
· Strong free cash flow(1) generation of £43.9m (HY 2022:
£42.8m)
· Reduction in net bank debt leverage to 2.3x (FY 2022: 2.9x) and
total net bank debt of £230.8m at 30 June 2023 which reflects a reduction of
£18.8m in the six months since 31 December 2022
· Interim dividend of 1.4p, up 27% (HY 2022: 1.1p), based upon
number of shares post-reorganisation share structure which completed after the
balance sheet date on 25 July 2023 (see note 15)
Operational Highlights
· Continued strong execution of our Growth Optimisation Plan
outperforming our objectives to date. Our four key pillars are:
o Customer Obsession, World-Class Product, Sales Excellence, Operational
Agility
· Average Client Value (>£20k) increased by 4% to £75,800 (HY
2022: £73,100) reflecting a combination of more seats and products taken by
clients as well as price increases
· M&A - Integration and performance of Media Business Insight
(MBI) and TS Lombard on track; maintaining disciplined approach to acquisition
opportunities
· Clear AI roadmap - continued investment in AI-related
technologies to improve platform usability, drive greater automation, develop
new product and enhance internal processes including customer insights and
sales
Outlook
· Set to deliver strong and resilient growth as uncertainty
continues to drive demand for our 'gold standard' data, delivered through our
One Platform
· Following a strong first half performance and continued momentum
into H2 we remain on track to deliver results in line with increased market
expectations for FY 2023. We maintain our ambition of double-digit underlying
revenue growth.
-ENDS-
Note 1: Defined in the explanation of non-IFRS measures on page 13
Note 2: 'Rule of 50': Investment concept which scores businesses by adding
their underlying revenue growth to their Adjusted EBITDA margin
Note 3: Market expectations: Based upon company compiled consensus estimates
for revenue (range £275.8m-£279.3m) and Adjusted EBITDA (range £109.6m -
£114.7m). More detail
https://investors.globaldata.com/shareholder-centre/analyst-consensus
(https://investors.globaldata.com/shareholder-centre/analyst-consensus)
Note 4: The prior period comparatives for reported EPS, adjusted EPS and
dividends have been restated to reflect the impact of the share-split, which
completed after the balance sheet date on 25 July 2023 (see note 15).
ENQUIRIES
GlobalData Plc
Mike Danson, Chief Executive Officer +44(0)207 936 6400
Graham Lilley, Chief Financial Officer
Christian Cowley, Head of Investor Relations +44(0)7795451635
J.P. Morgan Cazenove (Nomad and Joint Broker) +44(0)207 742 4000
Bill Hutchings / Mose Adigun
Panmure Gordon (Joint Broker) +44(0)207 886 2500
Rupert Dearden / Dougie McLeod
Numis Securities (Joint Broker) +44(0)207 260 1000
Nick Westlake / Iqra Amin
FTI Consulting LLP (Financial PR) +44(0)203 727 1000
Edward Bridges / Dwight Burden / Emma Hall GlobalData@fticonsulting.com
Notes to Editors
About GlobalData Plc
GlobalData Plc (AIM: DATA) is a leading data, analytics, and insights platform
for the world's largest industries. Our mission is to help our clients decode
the future, make better decisions, and reach more customers.
One Platform Model
GlobalData's One Platform model is the foundation of our business and is the
result of years of continuous investment, targeted acquisitions, and organic
development. This model governs everything we do, from how we develop and
manage our products, to our approach to sales and customer success, and
supporting business operations. At its core, this approach integrates our
unique data, expert analysis, and innovative solutions into an integrated
suite of client solutions and digital community platforms, designed to serve a
broad range of industry markets and customer needs on a global basis. The
operational leverage this provides means we can respond rapidly to changing
customer needs and market opportunities, and continuously manage and develop
products quickly, at scale, with limited capital investment as well as
providing unique integration opportunities for M&A.
Strategic Priorities
GlobalData's four strategic priorities are: Customer Obsession, World-Class
Product, Sales Excellence and Operational Agility.
Growth Optimisation Plan
GlobalData's Growth Optimisation Plan is a set of initiatives designed to
drive revenue growth and profitability. The Plan's initiatives operate
across all of GlobalData's operations but are organised around the
strategic priorities noted above.
INTRODUCTION
At GlobalData we are on a mission to help our clients to decode the future,
make better decisions, and reach more customers. We provide services across a
wide breadth of industries and functions, on a global scale via our One
Platform. We have a clear philosophy of owning our own data and intellectual
property, as well as seeking to be a long-term strategic partner to our
clients, by serving their critical activities with our differentiated 'gold
standard' product.
Our mission critical data is a 'must-have' rather than 'nice to have' for a
wide range of blue-chip corporates, and once embedded, provides all the
insight our clients need to navigate a challenging macro backdrop. We create
our intelligence from a deep pool of experts across the globe, including 2,000
analysts and researchers, 250 data scientists and 100 journalists.
The data and solutions we provide are highly proprietary and embedded into our
customers' workflows, which drives high customer retention. The Group benefits
from significant operating leverage due to a "build once, sell multiple times"
business model, which drives significant margin expansion.
Our clients typically subscribe for at least 12 months access. The visible and
recurring revenue base creates a resilient business model, with subscriptions
making close to 80% of revenue. The balance of our revenue is made up of
ancillary services such as bespoke consulting, single copy reports and events,
which all harness our core data and insights.
GlobalData's client base is globally diversified, which reflects our globally
relevant data assets and gives the Group significant market opportunity.
Growth Optimisation Plan
The Growth Optimisation Plan, launched in 2020, is our framework to invest for
growth with the aim to be the leading data, analytics, and insights platform.
With multiple levers for growth, supplemented with M&A activity, we are
over-delivering on the Plan via four key pillars:
1. Customer Obsession
2. World-Class Product
3. Sales Excellence
4. Operational Agility
As a responsible business, sustainability sits at the heart of our plan and,
as a team, GlobalData is a firm believer that our Company can drive positive
change and be a force for good through our critical information and technology
innovations.
The Group assesses potential M&A targets and looks for the same business
model characteristics in its targets, such as high quality product/ services
and high volume renewal rates, which enables greater alignment and integration
opportunities. Our scalable platform is ideally positioned to integrate new
datasets and content into our existing vertical offering or expand our breadth
into new vertical markets.
Our objective is to achieve long-term compounding growth and maximise
shareholder returns. We use an investment concept which scores the business by
adding its underlying revenue growth to its Adjusted EBITDA margin. Our
ambition as set out in our FY 2022 Results is to exceed 50, i.e. 'rule of 50'.
HALF YEAR REVIEW TO 30 JUNE 2023
During the first half we delivered another period of profitable growth while
continuing to invest in a number of initiatives to secure future growth.
Strong organic growth was complemented by the impact of last year's
acquisitions of MBI and TS Lombard, and we delivered a significant uplift in
our margin.
The Group reported revenue of £135.9m (HY 2022: £111.9m), up 21% of which 8%
was underlying growth. Operating profit grew by 53% to £36.9m (HY 2022:
£24.1m) and Adjusted EBITDA increased by 37% to £53.5m (HY 2022: £39.0m).
The growth in Adjusted EBITDA was driven by profitable revenue growth,
delivering a high incremental margin as a result of our relatively fixed cost
base. Adjusted EBITDA margin of 39%, reflected a 4 percentage points gain
versus the previous year (HY 2022: 35%). Combining our underlying revenue
growth rate of 8% and the Adjusted EBITDA margin of 39% we are nearing our
goal of achieving the 'rule of 50'.
We maintained our focus on price during the half to better reflect the
increasing value of our data, analytics and insights to our customers. During
the half, Average Client Value of our larger clients (>£20k) increased by
4% to £75,800 (HY 2022: £73,100) reflecting a combination of selling
additional seats and products to existing clients, as well as price increases.
We see further opportunities ahead to align our pricing structure to the
increased value we are delivering, especially for our more recently acquired
businesses.
We continue to see strong customer demand for our data, analytics, and
insights as clients navigate both an uncertain macro environment and
disruptive themes such as artificial intelligence, climate change, regulatory
and geo-political change, which is also reflected in strong new business
pipeline.
Our customer proposition is strong and as we continue to embrace emerging
AI-related technologies we are excited about the opportunity to improve
usability and drive even greater customer engagement.
Our growth was also supported by recent acquisitions, MBI and TS Lombard,
which were acquired in June and August of 2022 respectively. MBI has been
fully integrated and TS Lombard is nearing full integration. Both businesses
are trading in line with our plans.
We continue to pursue strategic M&A for new gold standard data assets to
integrate into our One Platform model. During the first half no further
acquisitions were made but we continue to assess a pipeline of acquisition
opportunities and remain disciplined in our approach to M&A.
Well positioned to leverage new AI technologies
We have a track record of embracing emerging technology and we have been
consistently investing in Machine Learning and AI technologies since 2017.
Today we have approximately 250 data scientists globally supporting our 2,000
researchers and analysts and 100 journalists.
The AI landscape is moving quickly and we are excited about the opportunities
that Generative AI brings when we combine our proprietary datasets with
increasingly powerful technology. By harnessing the latest AI technologies we
are improving usability for customers, increasing automation and creating
efficiencies, developing new products faster and improving our internal
processes. In particular, by making it easier for customers to use our
proprietary data and insights we expect stronger customer engagement. Our One
Platform model means we are uniquely positioned to leverage the benefits of
Generative AI across all of our industry coverage. We are using AI to improve
our internal processes through, for example, real-time customer health
insights and more personalised sales processes.
Our deep proprietary data, with rich history and heritage remains the key
barrier to entry for new entrants and cannot be replicated with just the use
of generative AI. Controlling access to our proprietary data is key and
therefore managing the risks around data management, client usage and cyber
security remain a key priority.
We have a clear AI roadmap focused on the four areas of usability, automation,
new products and internal processes all of which support our Growth
Optimisation Plan.
Delivering our Growth Optimisation Plan
Our Growth Optimisation Plan, launched in 2020, is our framework to invest for
growth with the aim to be the leading data, analytics, and insights platform
for the world's largest industries. Since we launched our plan we have made
excellent progress and are outperforming our objectives to date. The following
section provides an update on each of the four pillars.
1) Customer Obsession
Customer Obsession remains our number one priority and is central to our
strategy. It runs through everything we do, and we continue to focus on client
needs and on providing unique and innovative solutions. We strive to maintain
strong customer relationships and endeavour to build even deeper
relationships.
We are committed to ensuring the stages of our customer lifecycle are seamless
and have recently conducted a review of this key process to further enhance
collaboration, onboarding, retention and growth. We continue to optimise our
processes through a mix of AI, multidisciplinary teams and a consistent
framework. Our customer engagement intelligence is providing us with
increasingly specific recommendations for clients so we can be more targeted
with support and service and strengthen customer loyalty.
2) World-Class Product
We continue to invest in World-Class Product enabling us to offer our clients
'gold standard' data. Our proprietary data and insights are generated by more
than 800 analysts, 1,200 researchers and 100 journalists, supported by 250
data scientists across 20 different industries. Our One Platform empowers the
world's largest 20 industries and is highly scalable.
During the half we continued to invest in product development including the
use of AI software, workflow enhancements, user tools, platform development
and new content. Enhancements to our Intelligence Center included:
· Launch of new Themes proposition across all Intelligence Centers,
including significantly improved macro themes coverage provided by TS Lombard
· New global market datasets including energy transition, Foreign
Direct Investments (FDI), ESG and ecommerce marketplaces
· Significant expansion of AI coverage
We also launched new tools including Generative AI search functionality on our
Intelligence Center allowing users to ask natural language questions. In
addition, we have also launched a new Sales Intelligence product to help
clients plan, target, create and engage their customers, as well as a new
Competitive Intelligence tool to better track and compare competitor activity.
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.
We continue to expand our routes to market via our multiple media sites. Our
media assets provide limited free-to-access insight through to high value,
paywalled custom products and continues to prove a powerful go-to-market
proposition, driving new customers up the value curve over time.
3) Sales Excellence
Our sales teams have a clear focus on the key levers for growth. Linked to our
Customer Obsession initiatives, our ambitious target is to take our volume
renewal rate in our larger clients (>£20k) from 83% to over 90%, through
increasing client engagement and enhancing client and user experience.
During the first half, in addition to selling more seats and product to
existing customers, we had a net increase in the number of larger clients
(>£20k) to 2,700 (HY 2022: 2,473), a year on year increase of 9%. We
remain focused on pricing amongst our smaller clients, as a result the overall
number of clients is broadly consistent with HY 2022, but importantly our
value renewal rate continues to be close to 100%. Our Invoiced Forward Revenue
position and new business pipeline remain healthy, and we are investing in new
sales roles in the second half of the year.
We are increasingly using AI-driven tools across a number of areas to retain
existing clients and grow our partnerships as well as win new clients. We use
AI tools to monitor the health of our client relationships, to help coach our
sales teams, to personalise the selling process and to increase co-ordination
across our teams.
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 125,000 client
opportunities (versus our 4,700 existing customers), with significant latent
growth potential in the US and professional services markets.
4) Operational Agility
Maintaining our entrepreneurial culture and operational agility is key to
achieving our growth potential. While maintaining a disciplined approach to
cost we continue to invest for growth in areas such as product development and
technology.
From an M&A perspective we continue to assess a healthy pipeline of
acquisition opportunities and remain disciplined in our approach to M&A.
GlobalData has a three-year £410.0m debt financing facility (secured in
August 2022) which provides the Group with additional firepower to execute its
M&A growth strategy. This facility matures on 5 August 2025, with an
option to extend further by a year. The debt facility comprises a £290.0m
term loan however on 3 April 2023 the Group voluntarily repaid £25.0m
resulting in the current term loan drawdown of £265.0m. The term loan was
used in part to repay existing indebtedness of £229.2m. The facility also
comprises a Revolving Credit Facility ("RCF") of £120.0m which is currently
undrawn, but will be used to support long-term growth of the business,
including M&A.
Operational Key Performance Indicators
The operational key performance indicators ("KPIs") below are used by the
Directors to monitor the quality of revenue growth and understand underlying
performance. Operational KPIs reference sales orders rather than revenue and
therefore impact both revenue recognised in the year as well as Invoiced
Forward Revenue. As at 30 June 2023, the total number of clients (>£5,000
spend) was 4,739 (HY 2022: 4,814). Clients spending more than £20,000
represented 2,700 clients (HY 2022: 2,473) and ~77% of Group revenues.
Clients >£20,000 Value renewal rate Volume renewal rate Average client value
HY 2023 99% 83% £75,800
HY 2022 100% 84% £73,100
Movement -1pt -1pt +4%
Robust performance in underlying operational KPIs helped deliver 8% underlying
revenue growth and 9% growth in underlying Invoiced Forward Revenue. Volume
renewal rates for clients spending over £20,000 was broadly consistent with
HY 2022. The Group continued to demonstrate strong pricing power, as well as
selling more licences and product to its existing client base. This resulted
in a value renewal rate for clients spending over £20,000 of nearly 100%.
The operational KPIs are defined and calculated as:
· Value renewal rate - this is calculated by dividing the total
subscription sales value closed in the year compared with subscription value
available for renewal (based upon prior year value).
· Volume renewal rate - this is calculated by dividing the total
volume of subscription sales closed in the year compared with subscription
volume available for renewal.
· Average client value - this is calculated using the total value
of sales across our clients and showing an average value.
Outlook
We are well positioned to maintain strong and resilient growth, as uncertainty
continues to drive demand for our 'gold standard' data. Following a strong
first half performance and continued momentum into H2, we remain on track to
deliver results in line with increased market expectations for FY 2023. We
maintain our ambition of double-digit underlying revenue growth.
FINANCIAL REVIEW
£m Unaudited 6 months to Unaudited 6 months to
June 2023 June 2022
Revenue 135.9 111.9
Operating profit 36.9 24.1
Adjusting items
Depreciation 3.2 3.3
Amortisation of acquired intangible assets 4.7 4.1
Amortisation of software 0.7 0.5
Share-based payments charge 9.7 1.4
Costs relating to share-based payments scheme 0.1 -
Restructuring and refinancing costs 0.3 1.0
Revaluation (gain)/loss on short- and long-term derivatives (1.7) 2.1
Unrealised operating foreign exchange (gain)/loss (1.7) 0.9
M&A and contingent consideration costs 1.3 1.6
Adjusted EBITDA 53.5 39.0
Adjusted EBITDA margin(1) 39% 35%
Statutory profit before tax 23.9 15.0
Amortisation of acquired intangible assets 4.7 4.1
Share-based payments charge 9.7 1.4
Costs relating to share-based payments scheme 0.1 -
Restructuring and refinancing costs 0.3 1.0
Revaluation (gain)/loss on short- and long-term derivatives (1.7) 2.1
Unrealised operating foreign exchange (gain)/loss (1.7) 0.9
M&A and contingent consideration costs 1.3 1.6
Borrowings non-cash interest expense - 4.0
Adjusted profit before tax 36.6 30.1
Adjusted income tax expense(1) (8.7) (6.9)
Adjusted profit after tax 27.9 23.2
Cash flow generated from operations 63.0 56.1
Interest paid (12.1) (4.4)
Income taxes paid (2.7) (4.8)
Principal elements of lease payments (2.4) (2.9)
Purchase of intangible and tangible assets (1.9) (1.2)
Free cash flow(1) 43.9 42.8
Operating cash flow conversion %(1) 118% 144%
Free cash flow conversion %(1) 120% 142%
Earnings attributable to equity holders (restated)(2):
Basic earnings per share (pence) 2.2 1.3
Diluted earnings per share (pence) 2.2 1.2
Adjusted basic earnings per share (pence) 3.4 2.9
Adjusted diluted earnings per share (pence) 3.4 2.6
(1) Defined in the explanation of non-IFRS measures on page 13.
(2) The prior period 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 after the balance sheet date on 25 July
2023 (see note 15).
The financial position and performance of the business are reflective of the
core financial elements of our business model: visible and recurring revenues,
high incremental margins, scalable opportunity and strong cash flows.
The Directors believe that Adjusted EBITDA, Adjusted 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.
Revenue
Revenue grew by 21% to £135.9m driven from underlying growth of 8% and aided
by revenue from recent M&A and the benefit of currency gains (HY 2022:
£111.9m). On an underlying basis, subscriptions (representing 78% of revenue)
grew by 8% underpinned by consistent renewal rates, strong pricing and client
contract growth as well as new business wins.
£m HY 2023 HY 2022 Growth
Revenue 135.9 111.9 +21%
PY results of acquired businesses (MBI & TSL) - 9.0
Impact of currency (5.1) -
Underlying Revenue 130.8 120.9 +8%
Invoiced Forward Revenue
Invoiced Forward Revenue grew from £114.6m as at 30 June 2022 to £122.9m as
at 30 June 2023. Invoiced Forward Revenue is a major component of our
significant revenue visibility for the forthcoming period.
£m 30 June 2023 30 June 2022
Deferred revenue 117.5 110.9
Amounts not due/subscription not started at 30 June 5.4 3.7
Invoiced Forward Revenue 122.9 114.6
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 period increased revenue by £5.1m, which mainly reflected Sterling
weakness against US Dollar (average rate: HY 2023: 1.22, HY 2022: 1.31).
As at the balance sheet date 30 June, Sterling strengthened versus US Dollar
versus its position in the previous year and therefore its impact reduced
Invoiced Forward Revenue by £1.9m. Cost inflation as a result of currency
movements offset the gain in the year and impacted the results by £1.4m. The
full impact of currency on Adjusted EBITDA was an increase of £3.7m.
£m Revenue Net operating costs(1) Adjusted EBITDA Adjusted EBITDA Margin Invoiced Forward Revenue
Reported 135.9 (82.4) 53.5 39% 122.9
Add back currency movements
US Dollar (4.8) 1.7 (3.1) 1.6
Euro (0.3) - (0.3) -
Other 0.0 (0.3) (0.3) 0.3
Constant currency 130.8 (81.0) 49.8 38% 124.8
2022 Proforma 120.7 (78.4) 42.3 35% 116.8
Constant currency growth(2) +8% +3% +18% +3pts +7(3)
(1) Net operating costs is defined as operating expenses, losses on trade
receivables and other income excluding depreciation, amortisation of software
and adjusting items (see note 6).
(2) Defined in the explanation of non-IFRS measures on page 13.
(3) The underlying growth of Invoiced Forward Revenue was 9%. Due to timing
differences of ~£4m invoicing after the balance sheet date, the calculated
constant currency is 7%.
Profit before tax
Profit before tax for the year grew by £8.9m to £23.9m (HY 2022: £15.0m),
which reflects the operating leverage which has driven an increase in Adjusted
EBITDA of £14.5m to £53.5m (HY 2022: £39.0m), partly offset with increases
in finance and other operating costs.
Adjusted EBITDA
Adjusted EBITDA increased by 37% to £53.5m (HY 2022: £39.0m). The growth in
Adjusted EBITDA was driven by our strong revenue growth and our ability to
control our relatively fixed cost base. We have an established operating cost
base and given the economics of our platform business, which sees limited
incremental cost of sale, our overall adjusted EBITDA margin increased by 4
percentage points to 39% (HY 2022: 35%).
Finance costs
Net finance costs have increased by £3.9m to £13.0m (HY 2022: £9.1m),
including IFRS16 leases interest cost of £0.6m (HY 2022: £0.7m). The cash
paid in interest in HY 2023 was £12.1m (HY 2022: £4.4m).
This reflects the increase in average drawn debt in 2023 compared with 2022,
which funded the M&A activity and purchase of own shares in 2022, in
addition to the increase in interest rates.
Finance costs are calculated on drawn debt based upon on a margin range of
275-375bps, dependent on Group net leverage, plus SONIA (Sterling Overnight
Index Average rate). The Group recognises 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%.
The Group has 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, are recognised directly within other
comprehensive income of both the Group and the parent company. Undrawn debt
carries interest at one third of the prevailing margin.
Adjusting items
Adjusting items (detailed in note 6) increased by £1.6m in total. Significant
individual movements include:
· The share-based payment charge has increased from £1.4m to
£9.7m, which mainly reflects the increased charge as a result of the
modification of the scheme targets from Total Shareholder Returns ("TSR") to
Adjusted EBITDA on 30 November 2022. Details of this modification can be found
in the Annual Report and Accounts for the year ended 31 December 2022.
· There were also 12.6m new options granted (based upon
post-reorganisation share structure which completed after the balance sheet
date on 25 July 2023 (see note 15)) in the first half across both schemes 2
and 4, which increased the H1 charge by £2.2m.
· Revaluation gain on short- and long-term derivatives and
unrealised operating foreign exchange contributed a total gain in the first
half of £3.4m (HY 2022 £3.0m loss). This is a result of fluctuations in
currency exchange rates, mainly driven by US Dollar.
· Contingent consideration costs of £1.0m were incurred in
relation to the acquisition of MBI (HY 2022: £nil).
Leases
Within our operating costs, depreciation in relation to right-of-use assets
was £2.5m (HY 2022: £2.5m). Other income, in relation to sub-let income on
right-of-use assets was £nil (HY 2022: £0.1m). Our net finance costs include
interest of £0.6m in relation to lease liabilities (HY 2022: £0.7m).
Taxation
The interim period income tax expense has been calculated using the forecast
effective tax rate that would be applicable to expected total annual earnings,
i.e. the estimated average annual effective income tax rate applied to the
pre-tax income of the interim period. To the extent practicable, where
different income tax rates apply to different categories of income, a separate
rate has been used for each individual category of interim period pre-tax
income.
Using this approach, the overall annual effective income tax rate is currently
forecast to be 26.5% (HY 2022: 22.2%). This broadly represents the blended
corporation tax rate for FY 2023 in the UK of 23.5% adjusted for the higher
rates of overseas tax in the jurisdictions where the Group operates (1%) and
expenses which are not deductible for tax purposes (2%).
Post balance sheet event
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.
Earnings per share
Basic EPS was 2.2 pence per share (HY 2022: 1.3 pence per share). Diluted EPS
was 2.2 pence per share (HY 2022 restated: 1.2 pence per share).
Adjusted EPS grew from 2.9 pence per share to 3.4 pence per share,
representing 17% growth. Adjusted diluted EPS grew from 2.6 pence (restated)
per share to 3.4 pence per share, representing 31% growth.
The prior period 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.
The earnings per share results based upon the post-reorganisation share
structure have been compared against earnings per share results based on the
share structure existing as at 30 June 2023 below:
Post-reorganisation share structure Share structure as at 30 June 2023
6 months to 6 months to 6 months to 6 months to
30 June 2023 30 June 2022 30 June 2023 30 June 2022
Unaudited Unaudited Unaudited Unaudited
Earnings per share attributable to equity holders from continuing operations:
Basic
Profit for the period attributable to ordinary shareholders of the parent 17.8 10.6 17.8 10.6
company (£m)
Weighted average number of shares (no' m) 812.9 801.4 113.8 112.2
Basic earnings per share (pence) 2.2 1.3 15.6 9.4
Diluted
Profit for the period attributable to ordinary shareholders of the parent 17.8 10.6 17.8 10.6
company (£m)
Weighted average number of shares (no' m) 817.8 879.3 114.5 123.1
Diluted earnings per share (pence) 2.2 1.2 15.5 8.6
Dividends
We are pleased to declare an interim dividend of 1.4 pence per share (HY 2022
restated: 1.1 pence), an increase of 27%, consistent with our progressive
dividend policy. The interim dividend will be paid on 6 October 2023 to
shareholders on the register at the close of business on 8 September 2023. The
ex-dividend date will be on 7 September 2023.
The dividends per share based upon the post-reorganisation share structure
have been compared against dividends per share based on the share structure
existing as at 30 June 2023 below:
Post-reorganisation share structure Share structure as at 30 June 2023
6 months to 6 months to 6 months to 6 months to
30 June 2023 30 June 2022 30 June 2023 30 June 2022
Unaudited Unaudited Unaudited Unaudited
Dividend per share 1.4 1.1 10.0 7.7
Reconciliation of net bank debt
The Group defines net bank debt as short- and long-term borrowings less cash
and cash equivalents. The amount excludes items related to leases.
£m 30 June 2023 30 June 2022
Short- and long-term borrowings 258.9 232.0
Cash (28.1) (41.5)
Net bank debt 230.8 190.5
A reconciliation of cash generated from operations, free cash flow and opening
and closing net bank debt is set out below.
£m Period ended Period ended Growth
30 June 2023 30 June 2022
Cash flow generated from operations 63.0 56.1 +12%
Interest paid (12.1) (4.4) +175%
Income taxes paid (2.7) (4.8) -44%
Principal elements of lease payments (2.4) (2.9) -17%
Purchase of intangible and tangible assets (1.9) (1.2) +58%
Free cash flow 43.9 42.8 +3%
Dividends paid (20.8) (14.8) +41%
Net M&A (0.2) (20.1) -99%
Acquisition of own shares (2.6) (17.7) -85%
Cash received from repayment of loans - 0.9 -100%
Net cash flow 20.3 (8.9) -328%
Opening net bank debt (249.6) (177.6) +41%
Non-cash movement in borrowings (0.3) (4.0) -93%
Currency translation (1.2) - +100%
Closing net bank debt (230.8) (190.5) +21%
Last 12 months Adjusted EBITDA(1) 100.9 72.7 +39%
Net bank debt leverage 2.3x 2.6x -0.3x
(1)Reflects 12 month rolling Adjusted EBITDA results. £100.9m reconciles as
H2 2022 (£47.4m) and H1 2023 (£53.5m), £72.7m reconciles as H2 2021
(£33.7m) and H1 2022 (£39.0m).
Cash generated from operations grew by 12% to £63.0m (HY 2022: £56.1m),
representing 118% of Adjusted EBITDA (HY 2022: 144%). We typically expect
operating cash flow to be in excess of 100% of Adjusted EBITDA over the full
financial year.
Capital expenditure was £1.9m during the period (HY 2022: £1.2m). Capital
expenditure represented 1.4% of revenue (HY 2022: 1.1%).
After increased interest paid of £12.1m (HY 2022: £4.4m), offset by reduced
taxes paid in the period, Free Cash Flow increased by 3% to £43.9m which
represented 120% of Adjusted Profit Before Tax (HY 2022: 142%).
Year on year, net bank debt increased to £230.8m as at 30 June 2023 (30 June
2022: £190.5m). Net bank debt to Adjusted EBITDA leverage at 30 June 2023 was
2.3x, down from 2.6x last year and down from 2.9x as at 31 December 2022,
demonstrating the Group's ability to de-lever in the absence of M&A and
share buy-backs. We have a clear capital allocation policy to operate within
2-3x net bank debt leverage, in relation to Adjusted EBITDA. The Group reviews
leverage on a look forward basis and the high degree of visibility it has on
its revenue and free cash generation gives the Group comfort in its ability to
de-lever reasonably quickly.
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 8). 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 15).
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 8.
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.
Adjusted EPS Adjusted profit after tax per share (reconciliation between statutory profit
and adjusted profit shown on page 8).
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.
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 and the impact of foreign exchange contracts. This is reconciled to
the statutory profit before tax on page 8.
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 foreign exchange fluctuations, which may add to the transparency and
understanding of the results.
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.
principal elements of lease payments and purchase of intangible and tangible
assets. This is calculated on page 8.
Free cash flow conversion Free cash flow divided by Adjusted profit before tax. This is calculated on
page 8.
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 9.
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 12. 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 12.
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
8.
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 8.
Underlying growth Underlying growth is calculated by excluding the impact of movement in The reason we use underlying growth as a metric is to give the reader an idea
exchange rates and the results of acquired businesses, based upon the of the growth of the business without the impact of acquisitions and foreign
comparative period prior to acquisition. Underlying revenue is reconciled to exchange fluctuations, which may add to the transparency and understanding of
reported revenue on page 9. the results.
Responsibility Statement
We confirm that to the best of our knowledge:
a) the consolidated interim financial statements have been prepared in
accordance with the United Kingdom adopted International Accounting Standard
34, "Interim Financial Reporting";
b) the consolidated interim financial statements, which have been prepared in
accordance with the applicable set of accounting standards, give a true and
fair view of the assets, liabilities, financial position and profit or loss of
the issuer, or the undertakings included in the consolidation as a whole as
required by DTR 4.2.4R;
c) the interim management report includes a fair review of the information
required by DTR 4.2.7R, namely;
i. an indication of important events that have occurred during the first six
months of the financial year and their impact on the consolidated interim
financial statements; and
ii. a description of the principal risks and uncertainties for the remaining
six months of the financial year.
d) the interim management report includes, as required by DTR 4.2.8R, a fair
review of material related party transactions that have taken place in the
first six months of the financial year and any material changes in the
related-party transactions described in the Annual Report and Accounts for the
year ended 31 December 2022 that could have a material effect on the financial
position or performance of the enterprise in the first six months of the
current financial year.
Approved by the Board on 31 July 2023 and signed on its behalf by:
Mike Danson
Chief Executive
Independent review report to GlobalData Plc
Conclusion
We have been engaged by the Company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 30
June 2023 which comprises the consolidated income statement, consolidated
statement of comprehensive income, consolidated statement of financial
position, the consolidated statement of changes in equity, the consolidated
statement of cash flows and related notes 1 to 15.
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 30 June 2023 is not prepared, in all
material respects, in accordance with United Kingdom adopted International
Accounting Standard 34 and the AIM Rules of the London Stock Exchange.
Basis for Conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410 "Review of Interim Financial Information Performed by
the Independent Auditor of the Entity" issued by the Financial Reporting
Council for use in the United Kingdom (ISRE (UK) 2410). A review of interim
financial information consists of making inquiries, primarily of persons
responsible for financial and accounting matters, and applying analytical and
other review procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing (UK) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly,
we do not express an audit opinion.
As disclosed in note 1, the annual financial statements of the group will be
prepared in accordance with United Kingdom adopted international accounting
standards. The condensed set of financial statements included in this
half-yearly financial report has been prepared in accordance with United
Kingdom adopted International Accounting Standard 34, "Interim Financial
Reporting".
Conclusion Relating to Going Concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for Conclusion section of this report,
nothing has come to our attention to suggest that the directors have
inappropriately adopted the going concern basis of accounting or that the
directors have identified material uncertainties relating to going concern
that are not appropriately disclosed.
This conclusion is based on the review procedures performed in accordance with
this ISRE (UK) 2410, however future events or conditions may cause the entity
to cease to continue as a going concern.
Responsibilities of the directors
The directors are responsible for preparing the half-yearly financial report
in accordance with the AIM rules of the London Stock Exchange.
In preparing the half-yearly financial report, the directors are responsible
for assessing the group's ability to continue as a going concern, disclosing
as applicable, matters related to going concern and using the going concern
basis of accounting unless the directors either intend to liquidate the
company or to cease operations, or have no realistic alternative but to do so.
Auditor's Responsibilities for the review of the financial information
In reviewing the half-yearly financial report, we are responsible for
expressing to the group a conclusion on the condensed set of financial
statement in the half-yearly financial report. Our conclusion, including our
Conclusions Relating to Going Concern, are based on procedures that are less
extensive than audit procedures, as described in the Basis for Conclusion
paragraph of this report.
Use of our report
This report is made solely to the company in accordance with ISRE (UK) 2410.
Our work has been undertaken so that we might state to the company those
matters we are required to state to it in an independent review report and for
no other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the company, for our review work,
for this report, or for the conclusions we have formed.
Deloitte LLP
Statutory Auditor
London, England
31 July 2023
Consolidated Income Statement
Notes 6 months to 30 June 2023 6 months
Unaudited to 30 June 2022
Unaudited
Continuing operations £m £m
Revenue 4 135.9 111.9
Operating expenses 5 (98.2) (87.8)
Losses on trade receivables 5 (1.3) (0.1)
Other income 0.5 0.1
Operating profit 36.9 24.1
Net finance costs 7 (13.0) (9.1)
Profit before tax 23.9 15.0
Income tax expense (6.1) (4.4)
Profit for the period 17.8 10.6
Attributable to:
Equity holders of the parent 17.8 10.6
Earnings per share attributable to equity holders (restated):
Basic earnings per share (pence) 8 2.2 1.3
Diluted earnings per share (pence) 8 2.2 1.2
Reconciliation to Adjusted EBITDA:
Operating profit 36.9 24.1
Depreciation 3.2 3.3
Amortisation of software 0.7 0.5
Adjusting items 6 12.7 11.1
Adjusted EBITDA 53.5 39.0
The accompanying notes form an integral part of this financial report.
The earnings per share prior period comparatives have been restated to reflect
the impact of the share-split, which completed after the balance sheet date on
25 July 2023 (see note 15) on basic and diluted earnings per share.
Consolidated Statement of Comprehensive Income
6 months to 30 June 2023 6 months to
Unaudited 30 June 2022
Unaudited
£m £m
Profit for the period 17.8 10.6
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 8.0 -
Cash flow hedge - reclassification to profit or loss 0.4 -
Net exchange losses on translation of foreign entities (1.2) (0.1)
Other comprehensive gains/(losses), net of tax 7.2 (0.1)
Total comprehensive income for the period 25.0 10.5
Attributable to:
Equity holders of the parent 25.0 10.5
The accompanying notes form an integral part of this financial report.
Consolidated Statement of Financial Position
Notes 30 June 31 December
2023 2022
Unaudited Audited
£m £m
Non-current assets
Property, plant and equipment 28.6 31.0
Intangible assets 9 376.3 380.1
Long-term derivative asset 10 4.5 -
Deferred tax assets 2.2 2.3
411.6 413.4
Current assets
Trade and other receivables 59.4 62.7
Current tax receivable - 0.6
Short-term derivative assets 10 1.4 0.9
Cash and cash equivalents 28.1 34.0
88.9 98.2
Total assets 500.5 511.6
Current liabilities
Trade and other payables (144.6) (137.3)
Short-term lease liabilities 11 (4.9) (5.4)
Current tax payable (4.0) (1.7)
Short-term derivative liabilities 10 (0.1) (1.3)
Short-term provisions (0.1) (0.1)
(153.7) (145.8)
Net current liabilities (64.8) (47.6)
Non-current liabilities
Long-term provisions (1.2) (1.3)
Deferred tax liabilities (4.5) (4.1)
Long-term derivative liabilities 10 - (3.9)
Long-term lease liabilities 11 (23.0) (24.6)
Long-term borrowings 11 (258.9) (283.6)
(287.6) (317.5)
Total liabilities (441.3) (463.3)
Net assets 59.2 48.3
Equity
Share capital 12 0.2 0.2
Treasury reserve 12 (56.9) (70.8)
Other reserve 12 (44.3) (44.3)
Foreign currency translation reserve 12 (1.9) (0.7)
Cash flow hedge reserve 12 4.5 (3.9)
Retained profit 12 157.6 167.8
Equity attributable to equity holders of the parent 59.2 48.3
The accompanying notes form an integral part of this financial report.
Consolidated Statement of Changes in Equity
Share capital Other reserve Foreign currency translation reserve Cash flow hedge reserve Retained profit Equity attributable to equity holders of the parent
Treasury reserve
£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 six-month period ended 30 June 2022 - - - - - 10.6 10.6
Other comprehensive income:
Net exchange loss on translation of foreign entities - - - (0.1) - - (0.1)
Total comprehensive income for the period - - - (0.1) - 10.6 10.5
Transactions with owners:
Share buy-back - (17.7) - - - - (17.7)
Dividend - - - - - (14.8) (14.8)
Share-based payments charge - - - - - 1.4 1.4
Tax on share-based payments - - - - - (2.1) (2.1)
Balance at 30 June 2022 0.2 (84.3) (44.3) (0.4) - 212.4 83.6
Profit for the six-month period ended 31 December 2022 - - - - - 19.9 19.9
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 - - - (0.3) - - (0.3)
Total comprehensive income for the period - - - (0.3) (3.9) 19.9 15.7
Transactions with owners:
Share buy-back - (48.9) - - - - (48.9)
Dividend - - - - - (8.8) (8.8)
Vesting of share options - 62.4 - - - (62.4) -
Share-based payments charge - - - - - 2.7 2.7
Tax on share-based payments - - - - - 4.0 4.0
Balance at 31 December 2022 0.2 (70.8) (44.3) (0.7) (3.9) 167.8 48.3
Profit for the six-month period ended 30 June 2023 - - - - - 17.8 17.8
Other comprehensive income:
Cash flow hedge - effective portion of changes in fair value - - - - 8.0 - 8.0
Cash flow hedge - reclassification to profit or loss - - - - 0.4 - 0.4
Net exchange loss on translation of foreign entities - - - (1.2) - - (1.2)
Total comprehensive income for the period - - - (1.2) 8.4 17.8 25.0
Transactions with owners:
Share buy-back - (2.6) - - - - (2.6)
Dividend - - - - - (20.8) (20.8)
Vesting of share options - 16.5 - - - (16.5) -
Share-based payments charge - - - - - 9.7 9.7
Tax on share-based payments - - - - - (0.4) (0.4)
Balance at 30 June 2023 0.2 (56.9) (44.3) (1.9) 4.5 157.6 59.2
The accompanying notes form an integral part of this financial report.
Consolidated Statement of Cash Flows
6 months 6 months
to 30 June to 30 June
Continuing operations 2023 2022
Unaudited Unaudited
Cash flows from operating activities £m £m
Profit for the period 17.8 10.6
Adjustments for:
Depreciation 3.2 3.3
Amortisation 5.4 4.6
Net finance costs 13.0 9.1
Other (gains) and losses (0.5) -
Taxation recognised in profit or loss 6.1 4.4
Share-based payments charge 9.7 1.4
Decrease/(increase) in trade and other receivables 3.2 (2.0)
Increase in trade and other payables 6.8 22.9
Revaluation of short- and long-term derivatives (1.7) 2.1
Movement in provisions - (0.3)
Cash generated from continuing operations 63.0 56.1
Interest paid (12.1) (4.4)
Income taxes paid (2.7) (4.8)
Total cash flows from operating activities 48.2 46.9
Cash flows from investing activities
Acquisitions, net of cash acquired (0.2) (20.1)
Cash received from repayment of loans - 0.9
Purchase of property, plant and equipment (0.3) (0.6)
Purchase of intangible assets (1.6) (0.6)
Total cash flows used in investing activities (2.1) (20.4)
Cash flows from financing activities
Repayment of borrowings (25.0) (2.5)
Proceeds from borrowings - 31.0
Loan refinancing fee - (0.7)
Acquisition of own shares (2.6) (17.7)
Principal elements of lease payments (2.4) (2.9)
Dividends paid (20.8) (14.8)
Total cash flows used in financing activities (50.8) (7.6)
Net (decrease)/increase in cash and cash equivalents (4.7) 18.9
Cash and cash equivalents at beginning of period 34.0 22.6
Effects of currency translation on cash and cash equivalents (1.2) -
Cash and cash equivalents at end of period 28.1 41.5
The accompanying notes form an integral part of this financial report.
Notes to the Interim Financial Statements
1. General information
Nature of operations
The principal activity of GlobalData Plc and its subsidiaries (together 'the
Group') is to provide 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
These interim financial statements are for the six months ended 30 June 2023.
They have been prepared in accordance with United Kingdom adopted
International Accounting Standard 34, "Interim Financial Reporting". They do
not include all of the information required for full annual financial
statements and should be read in conjunction with GlobalData Plc's audited
financial statements for the year ended 31 December 2022.
The financial information for the year ended 31 December 2022 set out in this
interim report does not constitute statutory accounts as defined in Section
434 of the Companies Act 2006. The Group's statutory financial statements for
the year ended 31 December 2022 have been filed with the Registrar of
Companies and can be found on the Group's website www.globaldata.com. The
independent auditors' report on the full financial statements for the year
ended 31 December 2022 was unqualified and did not contain an emphasis of
matter paragraph or any statement under section 498 of the Companies Act 2006.
These interim financial statements have been prepared on the historical cost
basis, except for derivative financial instruments, which are measured at fair
value.
The interim financial statements are presented in Pounds Sterling (£), which
is also the functional currency of the Company. These interim financial
statements have been approved for issue by the Board of Directors.
Critical accounting estimates and judgements
When preparing the Interim Financial Statements, the Group makes a number of
estimates, judgements and assumptions regarding the future. Estimates,
judgements and assumptions are frequently evaluated based on historical
experience and other factors, including expectations of future events that are
believed to be reasonable under the circumstances. In the future, actual
experience may deviate from these estimates and assumptions.
The judgements, estimates and assumptions applied in the Interim Financial
Statements, including the key sources of estimation uncertainty, were the same
as those applied in the Group's last annual financial statements for the year
ended 31 December 2022.
Principal and emerging risks and uncertainties
The Directors consider that the principal and emerging risks and uncertainties
facing the Group as at 30 June 2023, and looking forwards into H2 2023, are
consistent with those reported within the Strategic Report of the annual
financial statements for the year ended 31 December 2022. The key risks
identified were as follows:
· Business and strategic risks: Product; People and Succession;
Competition and Clients; Economic and Global Political Changes; Acquisition
and Disposal Risk
· Operational risks: Financial; Loss, Misuse or Theft of
Proprietary, Employee or Client Data; IT, Cyber and Systems Failure;
Regulatory Compliance
We are a data, analytics, and insights company in which our products are
created and distributed digitally. Our carbon footprint is considerably
smaller than those of many other companies of our size. Therefore, we have
concluded that environmental factors do not represent a principal risk to our
business.
Going concern
The Group has closing cash of £28.1m as at 30 June 2023 (31 December 2022:
£34.0m) and net bank debt of £230.8m (31 December 2022: £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 which is
syndicated with 12 lenders. As at 30 June 2023, the Group had an undrawn RCF
of £120.0m which is syndicated with 13 lenders. The Group's banking
facilities are in place until August 2025, at which point the Group will be
required to renew or extend its financing arrangements. The Group has
generated £63.0m in cash from operations during the period ended 30 June 2023
(30 June 2022: £56.1m). 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 period ended
30 June 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
announcement of the interim financial statements. The Group has ample headroom
in relation to the financial covenants in place and no breach is forecast. The
Directors have modelled a number of worst-case scenarios to consider their
potential impact on the Group's results, cash flow and loan covenant forecast.
Key assumptions built into the scenarios focus on revenue 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) new
business subscription sales being lower than expectation (ii) consulting
revenues being lower than expectation and (iii) both scenarios combined. There
remains headroom on the covenants under each scenario and cash remained in
excess of £20.0m 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 group financing arrangements, provide
ample liquidity. Accordingly, the Directors have prepared the interim
financial statements on a going concern basis.
2. Accounting policies
This interim report has been prepared based on the accounting policies
detailed in the Group's financial statements for the year ended 31 December
2022, which have been applied consistently. The annual financial statements of
the Group are prepared in accordance with United Kingdom adopted international
accounting standards. The financial statements also comply with International
Financial Reporting Standards (IFRSs) as issued by the IASB.
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.
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
3. Taxation
Income tax on the profit or loss for the period comprises current and deferred
tax.
Current tax is the expected tax payable on the taxable income for the period,
using rates substantively enacted at the reporting date, and any quantifiable
adjustments to the tax payable in respect of previous years.
Deferred taxation is provided in full on temporary differences between the
carrying amount of the assets and liabilities in the financial statements and
the tax base. Deferred tax assets are recognised only to the extent that it is
probable that future taxable profits will be available against which the
temporary difference can be utilised. Deferred tax is determined using the tax
rates that have been enacted or substantively enacted by the reporting date
and are expected to apply when the deferred tax liability is settled or the
deferred tax asset is realised.
Tax is recognised in the income statement for interim reporting purposes using
the tax rate that would be applicable to expected total annual earnings, being
the estimated average annual effective income tax rate applied to the pre-tax
income of the interim period. To the extent practicable, a separate estimated
average annual effective income tax rate is determined for each tax
jurisdiction and applied individually to the interim period pre-tax income of
each jurisdiction. Similarly, if different income tax rates apply to different
categories of income (such as capital gains), to the extent practicable, a
separate rate is applied to each individual category of interim period pre-tax
income.
4. Segment analysis
The principal activity of GlobalData Plc and its subsidiaries (together 'the
Group') is to provide business information in the form of high quality
proprietary data, analytics, and insights to clients in multiple sectors.
IFRS8 "Operating Segments" requires the segment information presented in the
financial statements to be that which is used internally by the chief
operating decision maker to evaluate the performance of the business and to
decide how to allocate resources. The Group has identified the Chief Executive
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.
A reconciliation of Adjusted EBITDA to profit before tax from continuing
operations is set out below:
6 months 6 months
to 30 June to 30 June
2023 2022
Unaudited Unaudited
£m £m
Adjusted EBITDA 53.5 39.0
Restructuring costs (0.3) (0.8)
M&A costs (0.3) (1.6)
Contingent consideration (1.0) -
Refinancing costs - (0.2)
Share-based payments charge (9.7) (1.4)
Costs relating to share-based payment schemes (0.1) -
Revaluation gain/(loss) on short- and long-term derivatives 1.7 (2.1)
Unrealised operating foreign exchange gain/(loss) 1.7 (0.9)
Amortisation of acquired intangibles (4.7) (4.1)
Depreciation (3.2) (3.3)
Amortisation (excluding amortisation of acquired intangible assets) (0.7) (0.5)
Finance costs (13.0) (9.1)
Profit before tax 23.9 15.0
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
Period ended 30 June 2023 Period ended 30 June 2022 As at 30 June 2023 As at 31 December 2022
Unaudited Unaudited Unaudited Audited
£m £m £m £m
Services transferred:
Over a period of time 105.4 92.4 103.6 91.6
Immediately on delivery 30.5 19.5 13.9 12.4
Total 135.9 111.9 117.5 104.0
As subscriptions are typically for periods of 12 months the majority of
deferred revenue held at the balance sheet date will be recognised in the
income statement in the following 12 months. As at 30 June 2023, £1.0m (31
December 2022: £1.1m) of the deferred revenue balance will be recognised
beyond the next 12 months.
In instances where the Group enters into transactions involving a range of the
Group's services, for example a subscription and custom research, the total
transaction price for a contract is allocated amongst the various performance
obligations based on their relative stand-alone selling prices.
Geographical analysis
Our primary geographical markets are serviced by our global sales teams which
are organised as Europe, US and Asia Pacific by virtue of the team location.
The below disaggregated revenue is derived from the geographical location of
our customers rather than the team structure the Group is organised by.
From continuing operations
6 months to 30 June 2023 UK Europe Americas Asia Pacific MENA(1) Rest of World Total
Unaudited
£m £m £m £m £m £m £m
Revenue from external customers 25.7 34.3 43.6 16.4 11.8 4.1 135.9
6 months to 30 June 2022 UK Europe Americas Asia Pacific MENA(1) Rest of World Total
Unaudited
£m £m £m £m £m £m £m
Revenue from external customers 18.2 29.8 36.6 13.9 8.9 4.5 111.9
1. Middle East & North Africa
5. Operating profit
Operating profit is stated after the following expenses relating to continuing
operations:
6 months to 6 months to
30 June 2023 30 June 2022
Unaudited Unaudited
£m £m
Cost of sales 67.3 59.9
Administrative costs 30.9 27.9
98.2 87.8
Losses on trade receivables 1.3 0.1
Total operating expenses 99.5 87.9
6. Adjusting items
6 months to 6 months to
30 June 2023 30 June 2022
Unaudited Unaudited
£m £m
Share-based payments charge 9.7 1.4
Amortisation of acquired intangibles 4.7 4.1
Revaluation (gain)/loss on short- and long-term derivatives (1.7) 2.1
Unrealised operating foreign exchange (gain)/loss (1.7) 0.9
Contingent consideration 1.0 -
M&A costs 0.3 1.6
Restructuring costs 0.3 0.8
Costs relating to share-based payments scheme 0.1 -
Refinancing costs - 0.2
Total adjusting items 12.7 11.1
The adjustments made are as follows:
· The share-based payments charge is in relation to the
share-based compensation plans under which the entity receives services from
employees as consideration for equity instruments (options) of the Group. The
fair value of the employee services received in exchange for the grant of the
options and awards is recognised as an expense 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 is
determined by the Black-Scholes method.
· The revaluation of short- and long-term derivatives relates
to movement in the fair value of the short- and long-term derivatives.
· Unrealised operating foreign exchange losses and gains relate
to non-cash exchange losses and gains made on operating items.
· 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 incurred during the period consist of
integration costs in relation to recent acquisitions, including redundancy
costs and system migration costs.
· Restructuring relates to professional fees incurred in
relation to group reorganisation projects.
· Costs relating to share-based payments scheme consist of
employer taxes borne as a result of the vesting of the final tranche of Scheme
1 during the period, and professional fees incurred in advice obtained
relating to the restructure of existing schemes.
· Refinancing costs during H1 2022 consisted of legal fees
incurred in relation to the extension of the previously held term loan and RCF
by one year (completed during June 2022).
7. Net finance costs
6 months to 6 months to
30 June 2023 30 June 2022
Unaudited Unaudited
£m £m
Loan interest cost 12.6 8.4
Lease interest cost 0.6 0.7
Other interest income (0.2) -
13.0 9.1
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 period comparatives have been restated to reflect the impact of the
share-split on basic and diluted earnings per share.
The earnings per share results based upon the post-reorganisation share
structure have been compared against earnings per share results based on the
share structure existing as at 30 June 2023 within note 15. The earnings per
share presented below is based upon the post-reorganisation share structure:
6 months to 6 months to
30 June 2023 30 June 2022
Unaudited Unaudited
Earnings per share attributable to equity holders from continuing operations:
Basic
Profit for the period attributable to ordinary shareholders of the parent 17.8 10.6
company (£m)
Weighted average number of shares (no' m) 812.9 801.4
Basic earnings per share (pence) 2.2 1.3
Diluted
Profit for the period attributable to ordinary shareholders of the parent 17.8 10.6
company (£m)
Weighted average number of shares (no' m) 817.8 879.3
Diluted earnings per share (pence) 2.2 1.2
Reconciliation of basic weighted average number of shares to the diluted
weighted average number of shares:
6 months to 6 months to
30 June 2023 30 June 2022
Unaudited Unaudited
No' m No' m
Basic weighted average number of shares, net of shares held in Treasury 812.9 801.4
reserve
Dilutive share options in issue 4.9 77.9
Diluted weighted average number of shares 817.8 879.3
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 (all in new money):
Vesting 2023 2024 2025 2026 2027 Total
Schedule No. No. No. No. No. No.
Scheme 2 - 6,535,714 6,535,714 6,535,714 6,535,714 26,142,856
Scheme 4 - - 2,132,857 4,265,714 14,930,000 21,328,571
Total - 6,535,714 8,668,571 10,801,428 21,465,714 47,471,427
9. Intangible assets
Software Customer relationships Brands IP rights and database Goodwill Total
£m £m £m £m £m £m
Cost
As at 1 January 2023 15.4 65.3 26.2 77.9 322.0 506.8
Additions: Separately acquired 1.6 - - - - 1.6
Foreign currency retranslation 0.1 - - - - 0.1
As at 30 June 2023 17.1 65.3 26.2 77.9 322.0 508.5
Amortisation
As at 1 January 2023 (12.9) (37.8) (12.2) (52.9) (10.9) (126.7)
Charge for the period (0.7) (2.4) (0.6) (1.7) - (5.4)
Foreign currency retranslation (0.1) - - - - (0.1)
As at 30 June 2023 (13.7) (40.2) (12.8) (54.6) (10.9) (132.2)
Net book value
As at 30 June 2023 3.4 25.1 13.4 23.3 311.1 376.3
As at 31 December 2022 2.5 27.5 14.0 25.0 311.1 380.1
10. Derivative assets and liabilities
30 June 2023 31 December 2022
Unaudited Audited
Assets Liabilities Assets Liabilities
£m £m £m £m
Cash flow hedges:
- Interest rate swaps 4.5 - - (3.9)
Held-for-trading*:
- Forward foreign currency contracts 1.4 (0.1) 0.9 (1.3)
Total 5.9 (0.1) 0.9 (5.2)
Current: 1.4 (0.1) 0.9 (1.3)
Non-current: 4.5 - - (3.9)
*Derivatives which do not meet the tests for hedge accounting under IFRS9 or
which are not designated as hedging instruments are referred to as
'held-for-trading'.
As at 30 June 2023, the only financial instruments measured at fair value were
derivative financial assets/liabilities (both interest rate swaps and forward
foreign currency contracts) and these are classified as Level 2.
The Group uses derivative financial instruments to reduce its exposure to
fluctuations in both interest rates and foreign currency exchange rates. The
Group does not use derivatives for speculative purposes. All derivatives are
undertaken for risk management purposes. Classification is based on when the
derivatives mature.
The Group entered into an interest rate swap on 21 October 2022, with an
effective date of 30 September 2022 based on a notional amount of £290.0m,
which aligned to the initial term loan draw down. On 3 April 2023, the Group
voluntarily repaid £25.0m of the term loan (note 11). On the same date, the
swap terms were amended to match the remaining notional term loan amount of
£265.0m. No other amendments to the terms were made. The agreement is to
swap, on a quarterly basis, a floating rate of interest (GBP SONIA) for a
fixed rate of 4.9125%. The fixed interest is payable quarterly on the last
business day of each of March, June, September and December through to 5
August 2025.
Hedging instrument Carrying value Financial statement line item Change in fair value of the hedging instrument used as the basis for Nominal amount of hedging instrument
recognising hedge ineffectiveness for the period
Interest rate swap £4.5m asset Long-term derivative asset N/A - hedge 100% effective £265.0m
(31 December 2022: £3.9m liability)
Given the same interest rate benchmark (GBP SONIA) is used in the hedging
instrument (the swap) and the hedged item (the term loan), and the payments
are settled at the same date each quarter, there is an effective economic
relationship between the hedging instrument and the hedged item. The total
£265.0m swap is designated as a hedge of the total £265.0m term loan,
therefore, a 1:1 hedge ratio has been established on a current notional basis.
The following potential sources of hedge ineffectiveness have been identified:
· Credit risk - A change in the credit risk of the Group or the
counterparty to the interest rate swap; and
· Critical terms - The possibility of changes to the critical terms
of the hedged item such that they no longer match those of the hedging
instrument.
The interest rate swap meets the definition of a derivative in accordance with
IFRS9. 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. In accordance with IFRS 9, hedge accounting for the £25m
element was discontinued prospectively from 3 April 2023 (the date on which
the nominal amount of the hedging instrument was reduced from £290.0m to
£265.0m). As this is a cashflow hedge and the future cashflows were no longer
expected to occur, the associated amount accumulated in the cash flow hedge
reserve of £0.4m was immediately re-classified to profit or loss, presented
within other comprehensive income. The £265.0m hedge has remained effective
for the full period, therefore the Group has recognised the full fair value
movement of £8.0m within the statement of other comprehensive income during
the period (30 June 2022: £nil).
In accordance with the requirements of IFRS 7, certain additional information
about hedge accounting is disaggregated by risk type and hedge designation
type in the table below:
Cash Flow Hedge Reserve - Interest Rate Risk 30 June 2023 31 December 2022
Unaudited Audited
£m £m
Balance brought forward (3.9) -
Change in fair value of hedging instrument recognised in OCI 8.0 (3.9)
Change in fair value of hedging instrument reclassified to profit or loss 0.4 -
Balance carried forward 4.5 (3.9)
Forward foreign currency contracts are not designated as hedges, therefore
changes in fair value are recognised in the income statement. The movement in
relation to forward foreign currency contracts in the period was a gain of
£1.7m to the income statement (30 June 2022: expense of £2.1m).
Forward foreign currency contracts have been entered into, which has committed
the amount of currency below to be paid in exchange for Sterling:
Euro US Dollar
Expiring in the 12 months ending: €m $m
30 June 2024 10.4 41.9
Forward exchange contracts have been entered into, which has committed the
amount of currency below to be paid in exchange for Indian Rupees:
US Dollar
Expiring in the 12 months ending: $m
30 June 2024 13.0
11. Borrowings and Lease Liabilities
30 June 2023 31 December 2022 Audited
Unaudited £m
£m
Short-term lease liabilities 4.9 5.4
Current liabilities 4.9 5.4
30 June 2023 31 December 2022
Unaudited Audited
£m £m
Long-term lease liabilities 23.0 24.6
Long-term borrowings 258.9 283.6
Non-current liabilities 281.9 308.2
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 30 June 2023 of £265.0m.
The Group is yet to draw down the available RCF facility of £120.0m. 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 £258.9m (31 December 2022:
£283.6m).
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. As disclosed within note 10, 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%.
Lease payments not recognised as a liability
The Group has elected not to recognise a lease liability for short term leases
(leases with an expected term of 12 months or less) or for leases of low value
assets. Payments made under such leases are expensed on a straight-line basis.
In addition, certain variable lease payments are not permitted to be
recognised as lease liabilities and are expensed as incurred. The expense
relating to payments not included in the measurement of a lease liability is
£nil for the period ended 30 June 2023 (30 June 2022: £nil).
The changes in the Group's borrowings can be classified as follows:
Long-term borrowings Short-term lease liabilities Long-term Total
lease liabilities
£m £m £m £m
As at 1 January 2023 283.6 5.4 24.6 313.6
Cash-flows:
- Repayment (25.0) (2.4) - (27.4)
Non-cash:
- Interest expense 0.3 - - 0.3
- Lease additions - 0.8 - 0.8
- Lease liabilities - (0.3) (0.2) (0.5)
- Reclassification - 1.4 (1.4) -
As at 30 June 2023 258.9 4.9 23.0 286.8
12. Equity
Share capital
Allotted, called up and fully paid:
30 June 2023 31 December 2022
Unaudited Audited
No'000s(1) £000s No'000s(1) £000s
Restated
Ordinary shares (£0.0001) 845,028 84 845,028 84
Deferred shares of £1.00 each 100 100 100 100
Total allotted, called up and fully paid 845,128 184 845,128 184
(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.
Share Purchases
During the period the Group's Employee Benefit Trust purchased an aggregate
amount of 203,500 shares (which represents 1,453,571 equivalent post
restructure shares representing 0.2% of the total share capital), each with a
nominal value of 1/14(th) pence (nominal value £0.0001 equivalent post
restructure per share), at a total market value of £2.6m. 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 period, a total of 1,303,276 shares (which represents 9,309,114
equivalent post restructure shares representing 1.1% of the total share
capital), each with a nominal value of 1/14(th) pence (nominal value £0.0001
equivalent post restructure per share), 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 £16.6m).
The maximum number of shares held by the Employee Benefit Trust (at any time
during the period ended 30 June 2023) was 5,589,025 (which represents
39,921607 equivalent post restructure shares 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 30 June 2023, based upon the restructured vesting
schedules, no dilution is forecast until 2027.
The vesting schedules represents outstanding options, which have been updated
to reflect the capital reorganisation undertaken on 25 July 2023 (see note
15).
Vesting Schedule 2023 2024 2025 2026 2027 Total
No. No. No. No. No. No.
Scheme 1* 4,936,979 - - - - 4,936,979
Scheme 2 - 6,535,714 6,535,714 6,535,714 6,535,714 26,142,856
Scheme 4 - - 2,132,857 4,265,714 14,930,000 21,328,571
Total 4,936,979 6,535,714 8,668,571 10,801,428 21,465,714 52,408,406
Shares held in trust (4,936,979) (6,535,714) (8,668,571) (10,801,428) (1,007,308) (31,950,000)
Net dilution - - - - 20,458,406 20,458,406
*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 year.
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 11) 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 18.3 pence per ordinary share and was paid in
April 2023. The Board has announced an interim dividend of 1.4 pence per
ordinary share based on the number of shares post reorganisation share
structure (see note 15). The interim dividend will be paid on 6 October 2023
to shareholders on the register at the close of business on 8 September 2023.
The ex-dividend date will be on 7 September 2023.
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.
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.
Share-based payments
Scheme 1
The Group created a share option scheme during the year ended 31 December 2010
and granted the first options under the scheme on 1 January 2011 to certain
senior employees. Each option granted converts to one ordinary share on
exercise. A participant may exercise their options (subject to employment
conditions) at any time during a prescribed period from the vesting date to
the date the option lapses. For these options to be exercised the Group's
earnings before interest, taxation, depreciation and amortisation, as adjusted
by the Remuneration Committee for significant or one-off occurrences, needed
to exceed certain targets. The final financial target for the colleague share
option scheme (scheme 1) was met with the 2021 results. During the year ended
31 December 2022, the majority of participants chose to exercise their options
(4.5m options), whilst holders of the remaining 2.0m options chose to defer
their exercise, as allowable under the scheme rules. During the period ended
30 June 2023, 1.3m of the deferred options were exercised. The remaining 0.7m
options can be exercised by participants at any point before August 2033,
subject to compliance with the Company's Share Dealing Code. LTIP Scheme 1 is
now closed.
Scheme 2
In October 2019 the Group created and announced a new share option scheme and
granted the first options under the scheme on 31 October 2019 to certain
senior employees. Each option granted converts to one ordinary share on
exercise. A participant may exercise their options subject to employment
conditions and performance targets being met. For these options to be
exercised the Group's earnings before interest, taxation, depreciation and
amortisation, as adjusted by the Remuneration Committee for significant or
one-off occurrences, needs to exceed certain targets between 2023 to 2026.
Scheme 4
In October 2021 the Group created the 2021 share option scheme (scheme 4).
Scheme 4 is targeted at management and senior colleagues below the Executive
Management Committee level. The EBITDA targets for Scheme 4 are aligned to
Scheme 2, however different proportions of granted options will vest once each
target is reached.
The total charge recognised for these schemes during the six months to 30 June
2023 was £9.7m (30 June 2022: £1.4m). The awards of the schemes are settled
with ordinary shares of the Company.
13. Related party transactions
Mike Danson, GlobalData's Chief Executive Officer, owned 59.94% of the
Company's ordinary shares as at 30 June 2023 and 59.94% as at 31 July 2023 and
is therefore the Company's ultimate controlling party. Mike Danson owns a
number of businesses that interact with GlobalData Plc, largely in part as a
result of past M&A transactions (GlobalData Holding Limited in 2016 and
Research Views Limited in 2018).
The Board has in place a 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:
· Oversee all related party transactions;
· Ensure transactions are in the best interests of GlobalData and
its wider stakeholders; and
· Ensure all transactions are recorded and disclosed on an arm's
length basis.
As noted in the Annual Report and Accounts for the year ended 31 December
2022, 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 the first half of 2023, we have continued the
progress made in previous years and we continue to works towards eliminating
all transactions with related parties.
During the six months to 30 June 2023, the following related party
transactions were entered into by the Group:
Corporate support services
In the six months ending 30 June 2023, net corporate support charges of
£0.01m were charged to the Group from NS Media Group Limited ("NSMGL"), a
related party by virtue of common ownership. The corporate support charges
principally consist of shared management and admin support determined by
headcount. In the six months ending 30 June 2022, the Group charged NSMGL
£0.12m IT support and software development costs which included a benchmarked
mark-up.
Accommodation
During 2022 we eliminated all related party sub-let office space arrangements
following the exit of a related party tenant as at 31 December 2022, hence
there have been no related party property transactions in the six months to 30
June 2023. The total sub-lease income for the six months ended 30 June 2023
was £nil (30 June 2022: £0.1m). During the six months to 30 June 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 (30 June 2022: £nil).
Loan to Progressive Trade Media Limited
The previous outstanding loan was fully repaid on 31 January 2022 and
generated interest income in the year ended 31 December 2022 of £5,000.
Interest was charged throughout the term of the loan at a rate of 2.25% above
LIBOR. The balance at 30 June 2023 is £nil (31 December 2022: £nil). 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 have been 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. In the six months ending 30 June 2023,
the total revenue generated from this contract was therefore £nil (30 June
2022: £0.5m) and the net contribution generated was £nil (2022: £0.4m). The
cancellation was in accordance with the contracted terms.
Charity Donations
During the six months ending 30 June 2023 the Group paid donations of £0.04m
(30 June 2022: £nil) 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 our charity
partners in India.
Balances Outstanding
As at 30 June 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 (31 December 2022:
£nil). There were no other balances owing to or from related parties.
14. Acquisitions
Cash Cost of Acquisitions
The cash cost of acquisitions comprises:
Period to 30 June 2023 Period to 30 June 2022
Unaudited Unaudited
£m £m
Acquisition of MBI:
Contingent consideration paid 0.2 -
Cash consideration - 22.9
Cash acquired - (3.5)
Acquisition of LMC: Working capital adjustment - 0.7
0.2 20.1
15. Post Balance Sheet Events
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 period comparatives have been restated to reflect the impact of the
share-split on basic and diluted earnings per share.
The earnings per share results based upon the post-reorganisation share
structure have been compared against earnings per share results based on the
share structure existing as at 30 June 2023 below:
Post-reorganisation share structure Share structure as at 30 June 2023
6 months to 6 months to 6 months to 6 months to
30 June 2023 30 June 2022 30 June 2023 30 June 2022
Unaudited Unaudited Unaudited Unaudited
Earnings per share attributable to equity holders from continuing operations:
Basic
Profit for the period attributable to ordinary shareholders of the parent 17.8 10.6 17.8 10.6
company (£m)
Weighted average number of shares (no' m) 812.9 801.4 113.8 112.2
Basic earnings per share (pence) 2.2 1.3 15.6 9.4
Diluted
Profit for the period attributable to ordinary shareholders of the parent 17.8 10.6 17.8 10.6
company (£m)
Weighted average number of shares (no' m) 817.8 879.3 114.5 123.1
Diluted earnings per share (pence) 2.2 1.2 15.5 8.6
Post-reorganisation share structure Share structure as at 30 June 2023
6 months to 6 months to 6 months to 6 months to
30 June 2023 30 June 2022 30 June 2023 30 June 2022
Unaudited Unaudited Unaudited Unaudited
No' m No' m No' m No' m
Basic weighted average number of shares, net of shares held in Treasury 812.9 801.4 113.8 112.2
reserve
Dilutive share options in issue 4.9 77.9 0.7 10.9
Diluted weighted average number of shares 817.8 879.3 114.5 123.1
The dividends per share based upon the post-reorganisation share structure
have been compared against dividends per share based on the share structure
existing as at 30 June 2023 below:
Post-reorganisation share structure Share structure as at 30 June 2023
6 months to 6 months to 6 months to 6 months to
30 June 2023 30 June 2022 30 June 2023 30 June 2022
Unaudited Unaudited Unaudited Unaudited
Dividend per share 1.4 1.1 10.0 7.7
Advisers
Company Secretary
Bob Hooper
Head Office and Registered Office
John Carpenter House
John Carpenter Street
London
EC4Y 0AN
Tel: + 44 (0) 20 7936 6400
Nominated Adviser and Joint Broker
J.P. Morgan Cazenove
25 Bank Street
Canary Wharf
London
E14 5JP
Joint Broker
Panmure Gordon
One New Change
London
EC4M 9AF
Joint Broker
Numis Securities
45 Gresham Street
London
EC2V 7BF
Financial PR LLP
FTI Consulting
200 Aldersgate
Aldersgate Street
London
EC1A 4HD
Lawyers
Reed Smith
20 Primrose Street
London
EC2A 2RS
Auditor
Deloitte LLP
2 New St Square
London
EC4A 3BZ
Registrars
Link Group
Central Square
29 Wellington Street
Leeds
LS1 4DL
Bankers
NatWest Group
280 Bishopsgate
London
EC2M 4RB
Bankers
HSBC UK Bank Plc
1 Centenary Square
Birmingham
B1 1HQ
Registered number
Company No. 03925319
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