REG - GlobalData PLC - Unaudited Interim Report <Origin Href="QuoteRef">DATA.L</Origin> - Part 2
31/07/2017 07:07
- Part 2: For the preceding part double click ID:nRSe5062Ma
102,346 98,888 110,082
Diluted (loss)/ earnings per share (pence) (0.55) (2.55) 1.65
Discontinued operations
Basic
Loss for the period attributable to ordinary shareholders of the parent company (£000s) - (516) (717)
Weighted average number of shares (000s) 102,346 98,888 100,632
Basic loss per share (pence) - (0.52) (0.71)
Diluted
Loss for the period attributable to ordinary shareholders of the parent company (£000s) - (516) (717)
Weighted average number of shares (000s) * 102,346 98,888 100,632
Diluted loss per share (pence) - (0.52) (0.71)
Total
Basic
(Loss)/ profit for the period attributable to ordinary shareholders of the parent company (£000s) (559) (3,039) 1,096
Weighted average number of shares (000s) 102,346 98,888 100,632
Basic (loss)/ earnings per share (pence) (0.55) (3.07) 1.09
Diluted
(Loss)/ profit for the period attributable to ordinary shareholders of the parent company (£000s) (559) (3,039) 1,096
Weighted average number of shares (000s)* 102,346 98,888 110,082
Diluted (loss)/ earnings per share (pence) (0.55) (3.07) 1.00
Notes to the interim financial statements (continued)
6. Earnings per share (continued)
Reconciliation of basic weighted average number of shares to the diluted
weighted average number of shares:
6 months to30 June 2017UnauditedNo'000s 6 months to30 June 2016 UnauditedNo'000s Year to 31 December 2016AuditedNo'000s
Basic weighted average number of shares 102,346 98,888 100,632
Share options in issue at end of period 9,661 9,997 9,450
Diluted weighted average number of shares 112,007 108,885 110,082
* The share options in issue are anti-dilutive in respect of the diluted loss
per share calculation in 2017 and 2016, therefore the options have not been
included in the calculation, other than in respect of the continuing and total
earnings per share for the year ended 31 December 2016.
7. Intangible assets
Software Customer relationships Brands IP rights Goodwill Total
£000s £000s £000s £000s £000s £000s
Cost
As at 31 December 2016 7,577 25,575 10,695 22,529 111,455 177,831
Additions: Business combinations 50 2,029 429 2,803 5,985 11,296
Additions: Separately acquired 302 - 148 - - 450
Foreign currency retranslation (17) - - - - (17)
As at 30 June 2017 7,912 27,604 11,272 25,332 117,440 189,560
Amortisation
As at 31 December 2016 (5,716) (13,559) (2,597) (13,093) (9,360) (44,325)
Charge for the year (566) (1,512) (482) (4,195) - (6,755)
Foreign currency retranslation 12 - - - 12
As at 30 June 2017 (6,270) (15,071) (3,079) (17,288) (9,360) (51,068)
Net book value
As at 30 June 2017 1,642 12,533 8,193 8,044 108,080 138,492
As at 31 December 2016 1,861 12,016 8,098 9,436 102,095 133,506
Notes to the interim financial statements (continued)
8. Derivative assets and liabilities
30 June 2017UnauditedNo'000s 30 June 2016 UnauditedNo'000s 31 December 2016AuditedNo'000s
Short-term derivative assets 258 - 94
Short-term derivative liabilities (229) (992) (1,089)
Net derivative asset/ (liability) 29 (992) (995)
Classification is based on when the derivatives mature. The fair values of
derivatives are expected to impact the income statement over the next year,
dependant on movements in the fair value of the foreign exchange contracts.
The movement in the year was a £1,023,000 credit to the income statement
(2016: charge of £767,000).
The Group uses derivative financial instruments to reduce its exposure to
fluctuations in foreign currency exchange rates. The notional values of
contract amounts outstanding are:
Expiring in the period ending: EuroE'000 US Dollar$'000 Indian RupeeINR'000
30 June 2018 5,650 12,250 430,192
Fair value of financial instruments
Financial instruments are either carried at amortised cost, less any provision
for impairment, or fair value.
The Group uses the following hierarchy for determining and disclosing the fair
value of financial instruments by valuation technique:
• Level 1: quoted (unadjusted) prices in active markets for identical assets
or liabilities;
• Level 2: other techniques for which all inputs which have a significant
effect on the recorded fair value are observable, either directly or
indirectly; and
• Level 3: techniques which use inputs which have a significant effect on the
recorded fair value that are not based on observable market data.
As at 30 June 2017, the only financial instruments measured at fair value were
derivative financial assets and liabilities which are classified as Level 2.
Notes to the interim financial statements (continued)
9. Borrowings
Current 30 June2017Unaudited 30 June2016Unaudited 31 December 2016Audited
£000s £000s £000s
Loans due within one year 6,000 5,492 5,737
Non-current 30 June2017Unaudited 30 June2016Unaudited 31 December 2016Audited
£000s £000s £000s
Long-term loans 31,280 28,429 26,162
Term loan and RCF
In April 2017, the Group refinanced its debt position. The new facility
consists of a £30.0 million term loan to replace the previous facilities held
with The Royal Bank of Scotland. This is repayable in quarterly instalments
over 5 years, with total repayments due in the next 12 months of £6.0 million.
The outstanding balance as at 30 June 2017 was £30.0 million.
In addition to the term loan, the Group also has a revolving capital facility
(RCF) of £45.0 million, with an additional accordion facility available of
£25.0 million, providing significant additional funding capability for future
investment. As at 30 June 2017, the Group had a total draw down against the
RCF facilities of £8.0 million.
The new facilities have been provided by The Royal Bank of Scotland, HSBC and
Bank of Ireland.
Interest is charged on the term loan and drawn down RCF at a rate of 2.25%
over the London Interbank Offered Rate.
Borrowings can be reconciled as follows:
30 June2017Unaudited 30 June2016Unaudited 31 December 2016Audited
£000s £000s £000s
Term loan 30,000 17,849 15,776
Revolving capital facility 8,000 16,375 16,375
Capitalised fees, net of amortised amount (720) (303) (252)
37,280 33,921 31,899
Notes to the interim financial statements (continued)
10. Equity
Share capital
Allotted, called up and fully paid:
30 June 2017Unaudited 30 June 2016Unaudited 31 December 2016Audited
No'000s £000s No'000s £000s No'000s £000s
Ordinary shares at 1 January (1/14th pence) 102,346 73 76,268 54 76,268 54
Issue of shares: Consideration GlobalData - - 26,078 19 26,078 19
Shares Buyback - - - - - -
Ordinary shares c/f (1/14th pence) 102,346 73 102,346 73 102,346 73
Deferred shares of £1.00 each 100 100 100 100 100 100
Total allotted, called up and fully paid 102,446 173 102,446 173 102,446 173
The issue of shares in the prior year related to the acquisition of GlobalData
Holding Limited.
Share Buyback
During the period the Group purchased an aggregate amount of 180,000 shares at
a total market value of £913,000. The purchased shares will be held in
treasury for the purpose of satisfying the exercise of share options under the
Company's Employee Share Option Plan.
Capital management
The Group's capital management objectives are:
· To ensure the Group's ability to continue as a going concern
· To fund future growth and provide an adequate return to shareholders
and, when appropriate, distribute dividends
The capital structure of the Group consists of net debt, which includes
borrowings and cash and cash equivalents, and equity.
The Company has two classes of shares:
· Ordinary shares carry no right to fixed income and each share carries
the right to one vote at general meetings of the Company
· 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.
Notes to the interim financial statements (continued)
10. Equity (continued)
With regard to the appointment and replacement of Directors, the Company is
governed by its Articles of Association, the principles of the UK Corporate
Governance Code, the Companies Act and related legislation. The Articles
themselves may be amended by special resolution of the shareholders. The
powers of Directors are described in the Board Terms of Reference, copies of
which are available on request.
Dividends
The Company is one that is focused on the efficient management of working
capital and increased cash generation. The Board therefore believes it can
invest in the business, achieve growth in profits and service a progressive
dividend policy.
The final dividend for 2016 was 4.0p per share and was paid in May 2017. The
Board anticipates a total dividend for the current year of 7.7 pence per
share, with an interim dividend of 3.0 pence per share. The interim dividend
will paid on 8 September 2017 to shareholders on the register at the close of
business on 11 August 2017.
Other reserve
The other reserve consists of a reserve created upon the reverse acquisition
of the TMN Group Plc.
Foreign currency translation reserve
The foreign currency translation reserve contains the translation differences
that arise upon translating the results of subsidiaries with a functional
currency other than Sterling. Such exchange differences are recognised in the
income statement in the period in which a foreign operation is disposed of.
Special reserve
The special reserve was created upon the capital reduction which occurred
during 2013.
In order to facilitate the payment of dividends, the special reserve,
constituted by an undertaking to the Court given in connection with the
reduction of the Company's share premium account undertaken in May 2013 (the
"Special Reserve"), has been released in accordance with its terms pursuant to
a resolution of the Board dated 23 February 2016 (all relevant creditors
having been discharged or otherwise consented to the reduction).
Merger reserve
The merger reserve was created to account for the premium on the shares issued
in consideration for the purchase of GlobalData Holdings Limited in 2016.
Treasury reserve
The treasury reserve contains shares held in treasury by the Group and in the
Group's Employee Benefit Trust for the purpose of satisfying the exercise of
share options under the Company's Employee Share Option Plan.
Notes to the interim financial statements (continued)
10. Equity (continued)
Share based payments
The Group created a share option scheme during the year ended 31 December 2010
and granted the first options under the scheme on 1 January 2011 to certain
senior employees. Each option granted converts to one ordinary share on
exercise. A participant may exercise their options (subject to employment
conditions) at any time during a prescribed period from the vesting date to
the date the option lapses. For these options to be exercised the Group's
earnings before interest, taxation, depreciation and amortisation, as adjusted
by the Remuneration Committee for significant or one-off occurrences, must
exceed certain targets. The fair values of options granted were determined
using the Black-Scholes model. The inputs used in the model were:
· share price at date of grant
· exercise price
· time to maturity
· annual risk-free interest rate and;
· annualised volatility
The following assumptions were used in the valuation:
Award Tranche Grant Date Fair Value of Share Price at Grant Date Exercise Price(Pence) Estimated Forfeiture rate p.a. Weighted Average of Remaining Contractual Life
Award 1 1 January 2011 £1.09 0.0714p 15% 2.5
Award 3 1 May 2012 £1.87 0.0714p 15% 2.5
Award 4 7 March 2014 £2.55 0.0714p 15% 2.5
Award 6 22 September 2014 £2.525 0.0714p 0% 2.5
Award 7 9 December 2014 £2.075 0.0714p 15% 2.7
Award 8 31 December 2014 £2.025 0.0714p 15% 2.7
Award 9 21 April 2015 £2.040 0.0714p 15% 2.7
Award 10 28 September 2015 £2.490 0.0714p 15% 3.5
Award 11 17 March 2016 £2.064 0.0714p 0% 2.8
Award 12 17 March 2016 £2.064 0.0714p 15% 2.8
Award 13 21 October 2016 £4.425 0.0714p 15% 2.8
Award 14 21 March 2017 £5.465 0.0714p 15% 2.8
Award 15 21 March 2017 £5.465 0.0714p 15% 3.0
Award 16 21 March 2017 £5.465 0.0714p 15% 2.5
Awards 2 and 5 have been fully forfeited.
The estimated forfeiture rate assumption is based upon management's
expectation of the number of options that will lapse over the vesting period.
The assumptions were determined when the scheme was set up in 2011 and are
reviewed annually. Management believe the current assumptions to be reasonable
based upon the rate of lapsed options.
The risk free interest rate and annualised volatility for awards granted in
2017 were 1.2% and 42% respectively.
Each of the awards are subject to vesting criteria set by the Remuneration
Committee.
Notes to the interim financial statements (continued)
10. Equity (continued)
The vesting criteria are as follows:
Vesting Criteria
Group Achieves £10m EBITDA Group Achieves £26.7m EBITDA Group Achieves £35m EBITDA
Award 1-4 20% Vest 40% Vest 40% Vest
Award 6 N/a 50% Vest 50% Vest
Award 7 N/a 40% Vest 60% Vest
Award 8 N/a 50% Vest 50% Vest
Award 9 N/a 40% Vest 60% Vest
Award 10 N/a N/a 100% Vest
Award 12 N/a 35% Vest 65% Vest
Award 13 N/a 35% Vest 65% Vest
Award 14 N/a 35% Vest 65% Vest
Award 15 N/a 25% Vest 75% Vest
Award 16 N/a 50% Vest 50% Vest
Award 11 relates to options awarded to Executive Chairman, Bernard Cragg
during 2016. The options will vest on 31 January 2019 and 31 January 2021 in
equal tranches.
The total charge recognised for the scheme during the six months to 30 June
2017 was £1,891,000 (2016: £1,158,000). The awards of the scheme are settled
with ordinary shares of the Company. During the period the Group purchased an
aggregate amount of 180,000 shares at a total market value of £913,000. The
purchased shares will be held in treasury and in the Group's Employee Benefit
Trust for the purpose of satisfying the exercise of share options under the
Company's Employee Share Option Plan.
Reconciliation of movement in the number of options is provided below.
Option price(pence) Number ofoptions
31 December 2016 1/14th 9,450,183
Granted 1/14th 955,160
Forfeited 1/14th (744,486)
30 June 2017 1/14th 9,660,857
The following table summarises the Group's share options outstanding at 30
June 2017:
Reporting date Optionsoutstanding Option price(pence) Remaininglife (years)
31 December 2011 5,004,300 1/14th 3.7
31 December 2012 4,931,150 1/14th 4.3
31 December 2013 4,775,050 1/14th 3.3
31 December 2014 8,358,880 1/14th 2.5
31 December 2015 7,557,840 1/14th 2.5
31 December 2016 9,450,183 1/14th 3.2
30 June 2017 9,660,857 1/14th 2.7
Notes to the interim financial statements (continued)
11. Acquisition
Infinata
On 7th April 2017, the Group acquired the trade and assets of the Infinata
brand from The MergerMarket Group for a purchase price of US$9.6 million.
The amounts recognised for each class of assets and liabilities at the
acquisition date were as follows:
Carrying Value Fair Value Adjustments Fair Value
£000s £000s £000s
Intangible assets consisting of:
Brand - 429 429
Customer relationships - 2,029 2,029
Intellectual Property and Content - 2,803 2,803
Net liabilities acquired consisting of:
Deferred revenue (2,747) - (2,747)
Fair value of net assets acquired (2,747) 5,261 2,514
The goodwill recognised in relation to the acquisition is as follows:
Fair Value
£000s
Consideration 7,696
Less net assets acquired (2,514)
Goodwill 5,182
In line with the provisions of IFRS 3, further fair value adjustments may be
required within the 12 month period from the date of acquisition. Any fair
value adjustments will result in an adjustment to the goodwill balance
reported above.
In the year ended 31 December 2016 the Infinata trade generated revenues of
$8.0 million and profits before tax of $1.0 million. The business has
generated revenues of £1.4 million and Adjusted EBITDA of £0.2 million in the
period from acquisition to 30 June 2017. If the acquisition had occurred on 1
January 2017, the Group year to date revenue for 2017 would have been £59.2
million and the Group loss before tax from continuing operations would have
been £0.2 million.
The goodwill that arose on the combination can be attributed to the assembled
workforce, know-how and expertise.
The Group incurred legal and professional costs of £0.2m in relation to the
acquisition, which were recognised in other expenses.
Notes to the interim financial statements (continued)
12. Discontinued operations
As the business becomes more focused on its Business Information offering, a
number of legacy non-core business units have been discontinued in recent
years.
a) The results of the discontinued operation are as follows;
6 months to 30 June 2017Unaudited 6 months to 30 June 2016Unaudited Year to 31 December 2016Audited
£000s £000s £000s
Discontinued operations
Revenue - 8 8
Cost of sales - (27) (73)
Gross loss - (19) (65)
Administrative costs - (609) (652)
Loss before tax from discontinued operations - (628) (717)
Income tax credit - 112 -
Loss for the period from discontinued operations - (516) (717)
b) Loss before tax
6 months to 30 June 2017Unaudited 6 months to 30 June 2016Unaudited Year to 31 December 2016Audited
This is arrived at after charging: £000s £000s £000s
Amortisation - - -
Impairment - - -
c) Cash flows from discontinued operations
6 months to 30 June 2017Unaudited 6 months to 30 June 2016Unaudited Year to 31 December 2016Audited
£000s £000s £000s
Cash outflows from operating activities - (516) (604)
Total cash outflows from discontinued operations - (516) (604)
Notes to the interim financial statements (continued)
13. Related party transactions
Mike Danson, GlobalData's Chief Executive, owned 69.7% of the Company's
ordinary shares as at 31 July 2017. Mike Danson owns a number of businesses
that interact with GlobalData Plc. The principal transactions are as follows:
Accommodation
GlobalData rents two properties from Estel Property Investments, a company
owned by Mike Danson. The total rental expense in relation to the buildings
owned by Estel Property Investments for the 6 months to 30 June 2017 was
£1,031,000 (2016: £1,030,000).
Corporate support services
Corporate support services are provided to and from other companies owned by
Mike Danson, principally finance, human resources, IT and facilities
management. These are recharged to companies that consume these services based
on specific drivers of costs, such as proportional occupancy of buildings for
facilities management, headcount for human resources services, revenue or
gross profit for finance services and headcount for IT services. The recharge
made from GlobalData Plc to these companies for the 6 months to 30 June 2017
was £437,302 (2016: £618,700).
Loan to Progressive Trade Media Limited
As part of a disposal of non-core B2B print businesses during 2016, the Group
agreed to issue a loan to Progressive Trade Media to fund the purchase
consideration. This loan was for £4.5m and is repayable in 5 instalments, with
the first instalment due in January 2018. Interest of 2.25% above LIBOR is
charged on the loan, with £52,000 charged in the period to 30 June 2017.
Amounts outstanding
The Group has taken advantage of the exemptions contained within IAS 24 -
Related Party Disclosures from the requirement to disclose transactions
between Group companies as these have been eliminated on consolidation. The
amounts outstanding for other related parties were:
Loan Balances
Amounts due in greater than one year:
30 June2017Unaudited 30 June2016Unaudited 31 December 2016Audited
£000s £000s £000s
Progressive Trade Media Limited 3,700 4,500 4,625
3,700 4,500 4,625
Amounts due within one year:
30 June2017Unaudited 30 June2016Unaudited 31 December 2016Audited
£000s £000s £000s
Progressive Trade Media Limited 925 - -
925 - -
The Group has right of set off over trading balances held with companies
related by virtue of common ownership by Mike Danson. As at 30 June 2017, the
balance with these parties was £nil (30 June 2016: £6,000 payable, 31 December
2016: £16,000 receivable).
Advisers
Company Secretary
Graham Lilley
Head Office and Registered Office
John Carpenter House
John Carpenter Street
London
EC4Y 0AN
Tel: + 44 (0) 20 7936 6400
Nominated Adviser and Broker
Nplus1 Singer Advisory LLP
1 Bartholomew Lane
London
EC2N 2AX
Auditor
Grant Thornton UK LLP
Grant Thornton House
Melton Street
London
NW1 2EP
Registrars
Capita Registrars Limited
Northern House
Woodsome Park
Fenay Bridge
Huddersfield
West Yorkshire
HD8 0GA
Solicitors
Fieldfisher LLP
Riverbank House
2 Swan Lane
London
EC4R 3TT
United Kingdom
Bankers
The Royal Bank of Scotland Plc
280 Bishopsgate
London
EC2M 4RB
Registered number
Company No. 03925319
This information is provided by RNS
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