TIDMDATA
RNS Number : 6091Q
GlobalData PLC
01 March 2021
GlobalData Plc
Final Results For The Year Ended 31 December 2020
(unaudited)
"GlobalData's 'One Platform' model delivers significant margin
improvement"
Key performance metrics 2020 2019 Change
Unaudited Audited
Revenue GBP178.4m GBP178.2m 0%
Adj. EBITDA (1) GBP56.7m GBP49.8m +14%
Adj. EBITDA margin 32% 28% +4p.p.
Statutory PBT GBP28.6m GBP8.0m +258%
Statutory PBT margin 16% 4% +12p.p.
EPS 19.4p 3.3p +488%
Adj. EPS (2) 32.9p 30.2p +9%
Net Debt (3) GBP58.1m GBP55.3m +5%
Deferred revenue GBP74.7m GBP68.6m +9%
Invoiced forward revenue
(4) GBP92.7m GBP85.1m +9%
------------------------- ----------- --------- -------
Financial Highlights
-- Subscription revenue up by 7% (2019: 7%), offset by a decline
in event revenue due to COVID-19
-- Adjusted EBITDA (1) up 14% to GBP56.7m (2019: GBP49.8m)
-- Adjusted EBITDA margin improvement of 4 percentage points to 32%
-- Statutory PBT grew by GBP20.6m to GBP28.6m (2019: GBP8.0m)
-- Invoiced forward revenue (4) up 9% to GBP92.7m (2019:
GBP85.1m), 8% organic growth in invoiced forward revenue
-- Cash generated from continuing operations up 13% to GBP59.8m
(2019: GBP52.8m), 105% of Adjusted EBITDA (2019: 106%)
-- Final dividend of 11.6p, up 16% (2019: 10.0p); total dividend
of 17.0p, up 13% (2019: 15.0p)
Operational Highlights
-- Business as usual maintained throughout 2020
-- Significant advancement in product and platform; rapid
response to customer demand for COVID-19 intelligence
-- Continued investment in Growth Optimisation Plan and execution across strategic priorities
Mike Danson, CEO of GlobalData Plc, commented:
"GlobalData made significant progress in 2020 despite the
challenges of COVID-19. We continued to execute on our strategic
priorities and delivered an impressive operational and financial
performance. Excluding events, which account for less than 10% of
our revenues, revenue grew at 7%, driving Adjusted EBITDA growth of
14% with margins improving by 4 percentage points to 32%."
"We have invested considerably over several years to develop our
business around a One Platform model. In 2020, this model proved
its worth by enabling us to rapidly pivot our global workforce to
remote working with little operational disruption, and to deliver
the trusted, actionable intelligence our customers rely on us to
provide when it matters most."
"Our performance in 2020 and the attractiveness of the
information services sector have given us a strong strategic,
operating and financial position from which to grow in 2021. We can
look forward to strong organic revenue growth and continued margin
improvement in 2021 as we progress towards our medium term Adjusted
EBITDA margin target of between 35% and 40% and have the ambition
to accelerate our organic revenue growth to at least 10%
annually."
See Notes to Editors
Note 1: 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. Adjusted EBITDA
margin is defined as: Adjusted EBITDA as a percentage of revenue.
This is reconciled to the Statutory operating profit on page 7.
Note 2: Adjusted EPS: Adjusted profit after tax per share
(reconciliation between statutory profit and adjusted profit shown
on page 7).
Note 3: Net debt: Short and long-term borrowings (excluding
lease liabilities) less cash and cash equivalents.
Note 4: Invoiced forward revenue: Invoiced forward revenue
relates to amounts that are invoiced to clients at the statement of
financial position date, which relate to future revenue to be
recognised. This is reconciled to deferred revenue on page 9.
ENQUIRIES
GlobalData Plc 0207 936 6400
Mike Danson (Chief Executive Officer), Graham
Lilley (Chief Financial Officer)
Brokers
Bill Hutchings/ Mose Adigun - J.P. Morgan Cazenove
(Nomad and Joint Broker) 0207 742 4000
Sam Barnett - HSBC (Joint Broker) 0207 991 8888
Erik Anderson/ Alina Vaskina - Panmure Gordon
(Joint Broker) 0207 886 2500
Hudson Sandler 0207 796 4133
Nick Lyon
Notes to Editors
GlobalData Plc
GlobalData Plc (AIM: DATA) is a leading data, insights, and
analytics platform for the world's largest industries. Our mission
is to help our clients decode the future, make better decisions,
and reach more customers.
One Platform Model
GlobalData's One Platform model is the foundation of our
business and is the result of years of continuous capital
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.
Strategic Priorities
GlobalData's four strategic priorities are: World-Class
Products, Sales Excellence, Client Centric, 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. In 2020, the
core focus of the Growth Optimisation Plan was on Sales Excellence
and the implementation of best-in-class technologies across our
business to improve Client Centricity and Operational Agility.
CHIEF EXECUTIVE'S REVIEW
GlobalData confronted tough commercial and operational
challenges in 2020 as a result of COVID-19. However, our Full Year
2020 results clearly demonstrate that we overcame those challenges
and continued to progress GlobalData's strategic development
through the year and we are well placed for a strong 2021.
Strategy Update
GlobalData was founded in 2016 with the mission to help our
clients decode the future, make better decisions, and reach more
customers. In 2020, we continued to consolidate and expand our
strategic position as a leading data, insights, and analytics
platform within the growing information services market.
We benefit from long-term trends which are driving growing
demand for our products from organisations of all sizes and types
worldwide using data, insights and analytics to maintain their
competitive advantage in an increasingly complex, dynamic and
unpredictable world.
We have adopted a One Platform operating model which integrates
our data assets, research capabilities and information technology
to develop and deliver a portfolio of client solutions and digital
community platforms to markets and customers worldwide. This
platform also gives us the ability to respond rapidly to changing
market conditions and customer needs by developing new solutions at
speed and scale, with limited capital investment.
We have clear accessible paths to organic growth across our core
markets and products, as well as the capability to enter new
markets and develop new revenue streams. Given the diversified,
scalable nature of our business we are confident in our ability to
progress towards our medium term Adjusted EBITDA margin target of
between 35% and 40% and have the ambition to accelerate our organic
revenue growth to at least 10% annually.
We aim to deliver against these targets by implementing a range
of growth initiatives in four strategic priority areas:
World-Class Products, Sales Excellence, Client Centric and
Operational Agility.
Strategic Priorities - World-Class Products
During the year we continued to make significant advancements in
strengthening our 'Gold Standard' capabilities within each
individual vertical, including implementing a unified forecasting
approach and common data lake across all industries.
We also continued to enhance our cross-vertical use of business
fundamentals (e.g. Companies, Deals, News, Macroeconomics),
proprietary Thematic Research, and expand our innovative horizontal
"Alternative" data and analytics. These capabilities are integrated
into our core vertical offering and help to differentiate our
products in the marketplace by providing our customers with a
richer and more complete intelligence offering.
As we see adoption of our product increase, we remain committed
to creating a world-class user experience. Not only does this help
our users gain more value from their Intelligence Center and to
work more effectively and efficiently, but it is key to driving
subscription renewals. In 2020, we made significant investments in
our platform, including introducing a range of new analytics and
workflow tools such as our competitive intelligence tool, 'build
your own report' tools and a new, more advanced content
recommendation engine.
In 2020, we redesigned our largest free-to-access digital
community platforms and invested in publishing repurposed
proprietary data and insight content from our Intelligence Centers.
This data-driven journalism and analyst reporting stimulated
significant increases in traffic totalling 65 million unique
visitors in 2020. This engagement with millions of professionals
globally enhances our brand, drives leads and automated sales, as
well as providing an innovative source of proprietary insight.
Strategic Priorities - Sales Excellence
In 2020, we focused on strengthening our existing sales
capabilities by recruiting new commercial leadership talent across
our Professional Services, Custom Solutions, and Communities
Solutions sales teams.
We also invested significantly in creating a best practice sales
enablement capability, including the introduction of a new
structured salesperson on-boarding programme which resulted in an
average time to first sale of between 4-10 weeks for the cohort of
20 salespeople that were enrolled in Q4 2020.
We also introduced:
-- an enterprise learning management platform to support
structured training pathways designed to improve sales skills,
product knowledge, and use of in-role support technology. In
particular, this platform supports our ability to train and coach
our salesforce continuously and at scale on our evolving product
portfolio.
-- a conversation intelligence platform to analyse thousands of
our client calls and meetings in real-time to better support
coaching and identification of customer and competitor
insights.
Strategic Priorities - Client Centric
In 2020, we made almost a 100% increase in headcount across our
Customer Success teams and set best practice playbooks to scale
operations efficiently by standardising our approach to Customer
and User on-boarding, training, and on-going account management,
focusing on the key touchpoints across our customer lifecycle.
Complementing the above, we also adopted an in-product customer
engagement tool which allows us to run targeted campaigns for our
Intelligence Center users designed to encourage them to use
specific product features. We ran four campaigns in the second half
of 2020 each of which engaged an average of 35,000 users, leading
to an average of 17% of users increasing their use of the features
in the following 30 days. This capability will play an important
role in driving awareness and adoption of new product releases.
Strategic Priorities - Operational Agility
We continued to make progress in developing and executing our
TechFirst programme and digital workplace strategy, which is
designed to help all employees and teams work effectively and
efficiently. Our focus in this area meant that during the first
part of the year we successfully transitioned the entire
organisation to working from home and ensured we continued to
operate as "business as usual" with no colleagues being furloughed.
We equipped staff with laptops and secure remote access to our IT
infrastructure and adapted our offices to meet recommended
standards for working, enabling them to remain open throughout the
pandemic to those employees who chose to use them. We are fully
prepared for a progressive return to a more normal working
environment when conditions permit. No material additional costs
were incurred in adapting to COVID-19 working conditions.
As part of supporting the well-being of colleagues working
remotely, we introduced a Group wide internal communications
programme to keep employees connected to the business and their
colleagues. The monthly on-line information sessions, presented by
the Chief Executive, were well received and our employee feedback
survey showed they substantially improved employee understanding of
Company goals and strategy as we moved into 2021.
2020 Review
Impact of COVID-19
During the first part of the year we successfully transitioned
the entire organisation to working from home and ensured we
continued to operate as "business as usual". We equipped staff with
laptops and secure remote access to our IT infrastructure and
adapted our offices to meet recommended standards for working,
enabling them to remain open throughout the pandemic to those
employees who chose to use them.
As we reported in July, the initial impact constrained sales
during the first half of the year, particularly in our events
activities. Over the full year revenues from events were
approximately 53% lower than 2019. However, this should be seen in
the context of the small contribution events make, which was 10% of
GlobalData's total revenues in 2019 compared to 5% in 2020. We
accelerated development of our digital engagement capabilities and
delivered 33 virtual events during the year, 26 of which had been
run as live events in 2019. In 2021 we will continue to expand our
virtual events programme and we will resume some in person events
when conditions allow. Overall, we expect events - live and virtual
- to continue to contribute revenues at a similar level to
2020.
The operational flexibility of the One Platform model allowed us
to refocus resources from within our existing cost base to underpin
our response to customer demand for insight and to do so without
compromising the development roadmap of our core product and
platform. We were able to quickly expand our dedicated team
covering COVID-19 from 5 to over 200 analysts by April 2020 to
provide our customers with the intelligence they needed to
understand and analyse the economic, sectoral, market and
company-level impacts. Our centralised product management and data
science infrastructure - another facet of our 'Our Platform'
capabilities - allowed us to rapidly develop a suite of new
Intelligence Center product capabilities and other products,
including over 2,000 analyst briefing reports, over 1,500 sector
and company-specific reports, over 900 impact forecasts at market,
brand, asset and company-level and more than 50 webinars. We made
these products available immediately at no additional cost to our
subscription customers, driving Intelligence Center usage to peak
in April 2020 at three times prior year usage.
Trading Performance
Revenue - Renewal rates remained strong throughout 2020 and
subscription sales gathered momentum through the second half
contributing to subscription revenue growth of 7% for the full
year. These positive trends resulted in 9% growth in invoiced
forward revenue as at 31 December 2020 to GBP92.7m (2019:
GBP85.1m).
Cost base - During the year we took steps to ensure our cost
base remained in line with trading performance while also
continuing to invest in Growth Optimisation Plan initiatives vital
to driving the business's future development. As part of the
management of costs, we slowed down the recruitment of additional
sales heads as well as achieving more organic savings such as
reduced travel and event hosting facilities' running costs. We only
expect a marginal increment in costs going forward as a result of
only some of these costs returning on a normalised basis.
Balance sheet - In 2020 we completed the re-financing of our
debt facility, providing GBP145.5m of committed facility and a
further GBP75m uncommitted accordion facility. While our strategic
focus is on exploiting GlobalData's organic growth opportunities,
these new arrangements provide us with resources of more than
GBP140m with which to take up acquisition opportunities as they
arise.
Key Performance Indicators
The key performance indicators below are used, in addition to
statutory reporting measures, by the Executive Directors to monitor
the Group's performance and progress.
Revenue Invoiced Forward Revenue Adjusted EBITDA Adjusted EBITDA margin Net Debt
2020 (Unaudited) GBP178.4m GBP92.7m GBP56.7m 32% GBP58.1m
2019 (Audited) GBP178.2m GBP85.1m GBP49.8m 28% GBP55.3m
------------------ ---------- ------------------------ ---------------- ----------------------- ---------
% growth 0% 9% 14% 4p.p. 5%
We have continued to make progress against these KPIs. As noted
above, subscription revenue growth of 7% has been offset by a 53%
decline in events revenue. The subscription growth has benefitted
only very marginally from a small acquisition made in the year.
Due to the relatively stable cost base created by our 'One
Platform' model, the business's profitability growth remains strong
and in 2020 our margin improved towards our medium term Adjusted
EBITDA margin target of between 35% and 40% as a result of year on
year organic cost savings.
Dividend
Having regard to 2020's financial performance, cash generation
and future prospects, the Board is pleased to announce a final
dividend of 11.6 pence per share (2019: 10.0 pence). The proposed
final dividend will be paid on 23 April 2021 to shareholders on the
register at the close of business on 26 March 2021. The ex-dividend
date will be on 25 March 2021. The proposed final dividend
increases the total dividend for the year to 17.0 pence per share
(2019: 15.0 pence), an increase of 13%.
Outlook for 2021
A resilient performance in 2020, and the tailwinds which
continue to drive information services sector growth, have given us
a strong strategic, operating and financial position from which to
grow in 2021.
Underpinned by our strong invoiced forward revenue position of
GBP92.7m at the start of the new financial year and sales growth,
we look forward to strong organic revenue growth and continued
margin improvement in 2021. We acknowledge the continuing economic
impact of COVID-19, particularly in physical events, but we are
confident in our model and now have a lesser exposure to event
revenues as we move forward. We are confident that we will continue
to fulfil the strategic ambitions set out in our Growth
Optimisation Plan.
People
I want to thank all my GlobalData colleagues for their
impressive achievements in progressing the business while
simultaneously responding and adapting to the effects of a global
pandemic. It is a measure of the commitment and capabilities of
GlobalData's people that our entire organisation pivoted seamlessly
to homeworking with no interruption to our normal business
activity. We look forward with great optimism that worldwide
vaccination programmes will enable a gradual return to normal
working patterns over the course of 2021.
Board
Earlier in the year we announced that Bernard Cragg would be
stepping down as Chairman at the Annual General Meeting in April. I
would like to thank Bernard for his considerable years of service
to GlobalData and wish him well for the future.
I am delighted that Murray Legg will take on the role of
Non-Executive Chairman at the Annual General Meeting and we are
also announcing the appointment of Catherine Birkett to the Board
as independent non-executive. Following the Annual General Meeting
on 20 April 2021, Catherine will succeed Murray Legg as chair of
the Audit Committee.
We are planning to add further non-executive directors in the
coming months. Our intention is to continue to grow the Board's
capabilities in order to enhance the support the Board provides to
the business as it evolves.
Mike Danson
Chief Executive Officer
1 March 2021
Financial Review
GBPm Year Ended Year Ended
31 December 2020 31 December 2019
Unaudited Audited
Restated (1)
Revenue 178.4 178.2
Operating profit 33.0 12.7
Adjusting items
Depreciation 7.0 4.8
Amortisation of acquired intangible assets 10.7 16.3
Amortisation of software 1.1 0.9
Share based payments charge 4.2 10.9
Restructuring and refinancing costs 0.6 0.8
Costs of settlement of pension liabilities - 2.2
Revaluation gain on short and long-term derivatives (0.3) (1.7)
Unrealised operating foreign exchange (gain)/ loss (0.3) 1.4
M&A costs 0.7 1.5
Adjusted EBITDA 56.7 49.8
----------------------
Adjusted EBITDA margin(2) 32% 28%
------------------------------------------------------ ---------------------- --------------------
Statutory Profit Before Tax 28.6 8.0
------------------------------------------------------ ---------------------- --------------------
Amortisation of acquired intangible assets 10.7 16.3
Share based payments charge 4.2 10.9
Restructuring and refinancing costs 0.6 0.8
Costs of settlement of pension liabilities - 2.2
Revaluation gain on short and long-term derivatives (0.3) (1.7)
Unrealised operating foreign exchange (gain)/ loss (0.3) 1.4
M&A costs 0.7 1.5
------------------------------------------------------ ---------------------- --------------------
Adjusted Profit Before Tax 44.2 39.4
------------------------------------------------------ ---------------------- --------------------
Income Tax Expense (6.0) (4.2)
------------------------------------------------------ ---------------------- --------------------
Adjusted Profit After Tax 38.2 35.2
------------------------------------------------------ ---------------------- --------------------
Cash flow analysis
----------------------------------------------------- --- ----------------------------------------
Cash flow generated from continuing operations 59.8 52.8
Cash flow conversion %(3) 105% 106%
----------------------
Earnings performance
----------------------------------------------------- ---
Profit After Tax 22.6 3.8
Adjusted Profit After Tax 38.2 35.2
Basic Shares (millions) 116.2 116.5
Diluted Shares (millions) 124.8 125.7
Attributable to equity holders:
Basic earnings per share (pence) 19.4 3.3
Diluted earnings per share (pence) 18.1 3.0
Adjusted basic earnings per share (pence) 32.9 30.2
Adjusted diluted earnings per share (pence) 30.6 28.0
------------------------------------------------------ ---------------------- ------------------
(1) The restatement is in relation to the accounting treatment
of the Pension buy-in, classification of other income and
correction of understated prior year tax expense as disclosed in
note 1 to the Preliminary Results.
(2) Adjusted EBITDA margin is defined as: Adjusted EBITDA as a
percentage of revenue. Note 2 discloses the rationale for the
adjusting items in detail.
(3) Cash flow conversion is defined as: Cash flow generated from
continuing operations divided by Adjusted EBITDA
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 use statutory
profit measures to assess business performance but also believe
that Adjusted EBITDA and Adjusted earnings per share provide
additional useful information on the core operational performance
of the Group to shareholders, and we review the results of the
Group using these measures internally.
The Group's performance this year
1. Revenue
Overall revenue for the year was marginally ahead of the
previous year at GBP178.4m (2019: GBP178.2m). Revenue performance
included 7% growth in subscription revenue (which represents 83% of
total revenue compared to 78% in 2019). The growth in subscriptions
was driven by strong renewal rates, and together with strong new
business momentum in the second half, also drove the invoiced
forward revenue growth as at 31 December 2020.
However, the impact of COVID-19 on our ability to deliver
physical events meant that event revenue was a drag on our overall
results. Event revenues declined by GBP9.6m year on year,
representing a 53% reduction. Event revenue has typically accounted
for around 10% of Group revenue but moving forwards we expect this
number to be nearer 5% of Group revenue with more focus on digital
delivery.
2. Profit before tax
Profit before tax for the year grew by GBP20.6m to GBP28.6m
(2019: GBP8.0m), which partly reflects the operating leverage which
has driven Adjusted EBITDA to grow by GBP6.9m to GBP56.7m (2019:
GBP49.8m) and reductions in other operating costs.
Adjusted EBITDA
Adjusted EBITDA increased by 14% to GBP56.7m (2019: GBP49.8m).
The growth in Adjusted EBITDA was achieved despite our relatively
modest overall revenue growth, meaning our margins were
significantly expanded (4 percentage points to 32% (2019: 28%)).
This is reflective of our ability to control our cost base. Savings
made in 2020 related to lower events costs, salesperson commissions
and travel expenses. We expect only some of these costs to return
on a normalised basis.
Other operating costs
Further to the improved Adjusted EBITDA performance, there was a
decline in other operating costs which contributed to an overall
increase in statutory profit (Adjusting Items are disclosed in note
5). Notable variances included:
-- Restructuring, M&A and refinancing costs have declined by
GBP1.0m to GBP1.3m reflecting reduced M&A activity over the
past year (2019: GBP2.3m).
-- The non-recurring nature of the pension settlement of GBP2.2m
during 2019, meaning nil cost in 2020.
-- The share based payment charge has dropped from GBP10.9m to
GBP4.2m in 2020 (a decline of GBP6.7m). The expectation was that
the target for the 2010 share option scheme would be fully
satisfied during 2020, but due to the COVID-19 impact on events
revenue, the target was not met. We now expect the target to be met
in 2021, meaning that the charge in 2020 has reduced due to a "true
up" exercise on the cost during 2020 and the fair value of each
option to be spread over an additional year (in line with IFRS2).
Further details on share based payments can be found in note
10.
-- The amortisation charge for acquired intangibles has declined
by GBP5.6m to GBP10.7m (2019: GBP16.3m). This is reflective of
assets becoming fully amortised and no significant M&A activity
adding further intangible assets to the Group.
Leases
Within our operating costs, depreciation in relation to
right-of-use assets was GBP5.6m (2019: GBP4.0m). Other income, in
relation to sub-let income on right-of-use assets was GBP1.3m
(2019: GBP1.3m). Our net finance costs include interest of GBP1.7m
in relation to lease liabilities (2019: GBP1.6m).
3. Cash Generation
Cash generated from continuing operations grew by 13% to
GBP59.8m (2019: GBP52.8m) representing 105% of Adjusted EBITDA
(2019: 106%), reflecting the fact that COVID-19 has not had a
significant impact on the Group's working capital cycles.
Capital expenditure was GBP5.0m in 2020 (2019: GBP2.7m),
including GBP1.5m on software (2019: GBP1.1m). The uplift reflects
significant investment into the Group's computer hardware and cyber
security systems. We expect that normal capital expenditure levels
will return in 2021.
Total cash flows from operating activities was GBP51.0m (growth
of GBP9.0m from 2019), which represented 155% of operating profit
(2019: 331%).
Short and long term borrowings increased by GBP9.3m (inclusive
of a GBP5.3m repayment) to GBP75.8m as at 31 December 2020 (2019:
GBP66.5m), however the average debt drawn position throughout 2020
was lower than in 2019, which is reflected in the lower interest
payments in the year.
During the year, the Group paid out GBP18.0m in dividends. As
part of its treasury policy to cover the requirement of its share
options schemes from market purchases, the Group bought back
GBP23.7m of shares through the Group's Employee Benefit Trust.
4. Net Debt:
Net debt increased to GBP58.1m as at 31 December 2020 (2019:
GBP55.3m). This increase principally reflects strong cash flows,
offset by contributions to the Employee Benefit Trust to buy back
shares of GBP23.7m, dividends of GBP18.0m and an increase in
capital expenditure to GBP5.0m.
The Group defines Net Debt as short and long term borrowings
(note 8) less cash and cash equivalents. The amount excludes items
related to leases.
GBPm 2020 2019
Short and long term borrowings (note 8) 75.8 66.5
Cash (17.7) (11.2)
----------------------------------------- ------- ------
Net Debt 58.1 55.3
5. Invoiced forward revenue
Invoiced forward revenues grew by 9% from the 31 December 2019
balance of GBP85.1m to GBP92.7m, reflecting good momentum on sales
orders in the latter quarter of 2020.
Invoiced forward revenue is a major component of our significant
revenue visibility for the forthcoming year and when combined with
other contracted (but not invoiced) revenue, and our expected
return from renewals during 2021, we have visibility on GBP156m of
revenue for 2021 as at 1 January 2020 (1 January 2019: GBP144m), a
9% increase.
GBPm 2020 2019
Deferred Revenue 74.7 68.6
Amounts not due/ subscription not started at 31 December 18.0 16.5
---------------------------------------------------------- ----- ----
Invoiced forward revenue 92.7 85.1
Invoiced forward revenue includes GBP1.0m as at 31 December
2020, which is in relation to Progressive Content Limited, a
company acquired in the year. Excluding this, the organic invoiced
forward revenue was GBP91.7m, growth of 8%.
6. Foreign exchange impact on results
The Group derives around 60% of revenues in currencies other
than Sterling. The impact of currency movements in the year had a
slightly positive impact on revenues of GBP0.3m (2019: positive
GBP3.0m), which was offset in the consolidated income statement by
approximately GBP0.6m adverse impact on costs (2019: adverse
GBP2.4m), meaning that currency adversely affected the Group's
profitability by GBP0.3m (2019: benefit GBP0.6m). The main driver
for the movement was the fluctuation throughout the year of pound
sterling in comparison to US dollar. In 2019 the average rate
throughout the year was 1.27 compared to an average rate of 1.28 in
2020.
7. Earnings per share
Basic EPS was 19.4 pence per share (2019: 3.3 pence per share).
Fully diluted profit per share was 18.1 pence per share (2019: 3.0
pence per share).
On an adjusted basis, the adjusted earnings per share grew from
30.2 pence per share to 32.9 pence, representing 9% growth.
8. Dividends
Having regard to 2020's financial performance, cash generation
and future prospects, the Board is pleased to announce a final
dividend of 11.6 pence per share (2019: 10.0 pence). The proposed
final dividend will be paid on 23 April 2021 to shareholders on the
register at the close of business on 26 March 2021. The ex-dividend
date will be on 25 March 2021. The proposed final dividend
increases the total dividend for the year to 17.0 pence per share
(2019: 15.0 pence), an increase of 13%.
The Company had, at all times, sufficient distributable profits
to fund its distributions during 2020. However, following the year
end, the Directors became aware that a proportion of a contribution
made to the Employee Benefit Trust, in order to buy back shares to
satisfy the employee share options plan, was technically an
unlawful distribution in accordance with section 838 of the
Companies Act 2006. Despite having sufficient distributable
profits, interim accounts had not been filed at Companies House, to
demonstrate its reserves position, prior to the distribution.
Furthermore, the Directors noted that again, whilst always
maintaining distributable reserves in the company accounts,
unlawful distributions by way of dividends and contributions to the
Employee Benefit Trust were also made in 2019. There are no issues
noted in this respect prior to 2019.
In order to correct the position, the Company will file interim
accounts with Companies House in advance of the Annual General
Meeting to demonstrate sufficient reserves. At the Company's Annual
General Meeting, on 20 April 2021, the Company shall propose a
resolution to remove any right the Company may have to claim from
Directors and Shareholders in respect of the relevant contributions
and distributions. The Company reserves as at 31 December 2020 are
GBP33m, which are inclusive of the distributions made of GBP8.7m in
2019, GBP6.4m in 2020 and GBP0.3m in 2021 which were technically in
breach of section 838 of the Companies Act 2006. No accounting
entries need to be made to correct the position and the
resolutions, if passed, will remedy the matter.
9. Taxation
The Group's effective tax rate for the year was 21%. This is
higher than the current UK rate of 19% which is broadly due to
overseas tax suffered, mainly in the United States and India. There
are a number of factors that will affect the Group's future total
tax charge as a percentage of underlying profits, including the mix
of profits and losses between the jurisdictions in which the Group
operates. A normalised effective tax rate is expected to be between
20% and 25%.
Consolidated Income Statement
Notes Year ended Year ended
31 December 31 December
2020 2019
Unaudited Audited
Restated
(1)
Continuing operations GBPm GBPm
Revenue 3 178.4 178.2
Operating expenses 4 (146.7) (166.8)
Other income 1.3 1.3
-------------------------------------- ------ ------------- -------------
Operating profit 33.0 12.7
Net finance costs (4.4) (4.7)
Profit before tax 28.6 8.0
Income tax expense (6.0) (4.2)
-------------------------------------- ------ ------------- -------------
Profit for the year 22.6 3.8
-------------------------------------- ------ ------------- -------------
Attributable to:
Equity holders of the parent 22.6 3.8
Earnings per share attributable to
equity holders:
Basic earnings per share (pence) 6 19.4 3.3
Diluted earnings per share (pence) 6 18.1 3.0
-------------------------------------- ------ ------------- -------------
Reconciliation to Adjusted EBITDA(2)
:
Operating profit 33.0 12.7
Depreciation 7.0 4.8
Amortisation of software 1.1 0.9
Adjusting items 5 15.6 31.4
-------------------------------------- ------ ------------- -------------
Adjusted EBITDA(2) 56.7 49.8
-------------------------------------- ------ ------------- -------------
(1) Restatement
The comparative year's results have been restated:
-- to include other income above operating profit, reflecting
that the income is in relation to operations. This change has had
no effect on profit before tax and Adjusted EBITDA for the
comparative year.
-- to charge the re-measurement of the pension liabilities
arising on the pension buy-in as a cost through the Income
Statement of GBP2.2m, previously the net re-measurement of assets
and liabilities was reported through the Statement of Comprehensive
Income. The restatement has had no impact on the Adjusted EBITDA of
the prior year.
-- to increase the income tax expense by GBP1.0m, reflecting
that the tax deduction in relation to the exercise of share options
during 2019 was inappropriately recognised within the Income
Statement but should have been recognised directly in equity.
Full disclosure included within note 1 to the Preliminary
Results.
(2) Adjusted EBITDA is defined as EBITDA 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. We
present Adjusted EBITDA as additional information because it is
used internally as a key indicator to assess financial performance.
However, other companies may present Adjusted EBITDA differently.
EBITDA and Adjusted EBITDA are not measures of financial
performance under IFRS and should not be considered as an
alternative to operating profit or as a measure of liquidity or an
alternative to net income as indicators of our operating
performance or any other measure of performance derived in
accordance with IFRS. Adjusted EBITDA margin is defined as:
Adjusted EBITDA as a percentage of revenue.
Consolidated Statement of Comprehensive Income
Year ended 31 December 2020 Year ended 31 December 2019
Unaudited Audited
Restated (1)
GBPm GBPm
Profit for the year 22.6 3.8
Other comprehensive income
Items that will be classified subsequently to profit or
loss:
Net exchange losses on translation of foreign entities (0.6) -
Items that will not be classified subsequently to profit
or loss:
Re-measurement of pension assets - 0.9
---------------------------------------------------------- ---------------------------- ----------------------------
Other comprehensive (loss)/ gain, net of tax (0.6) 0.9
---------------------------------------------------------- ---------------------------- ----------------------------
Total comprehensive income for the year 22.0 4.7
---------------------------------------------------------- ---------------------------- ----------------------------
Attributable to:
------------------------------ ----- ----
Equity holders of the parent 22.0 4.7
(1) The comparative year has been restated for the treatment of
the pension buy-in and tax expense in relation to the exercise of
share options during 2019, full disclosure included within note 1
of the Preliminary Results.
Consolidated Statement of Financial Position
Notes 31 December 31 December
2020 2019
Unaudited Audited
Restated (1)
GBPm GBPm
Non-current assets
Property, plant and equipment 43.5 47.4
Intangible assets 7 242.0 250.1
Trade and other receivables 0.9 1.9
Deferred tax assets 5.4 8.7
----------------------------------- ------ ------------ --------------
291.8 308.1
----------------------------------- ------ ------------ --------------
Current assets
Trade and other receivables 44.9 45.8
Current tax receivable 1.6 -
Short-term derivative assets 1.2 0.9
Cash and cash equivalents 17.7 11.2
----------------------------------- ------ ------------ --------------
65.4 57.9
----------------------------------- ------ ------------ --------------
Total assets 357.2 366.0
----------------------------------- ------ ------------ --------------
Current liabilities
Trade and other payables (100.2) (96.1)
Short-term borrowings 8 (5.0) (6.0)
Short-term lease liabilities 8 (4.1) (3.9)
Current tax payable (1.6) (1.7)
Short-term derivative liabilities (0.1) (0.1)
Short-term provisions (0.2) (0.1)
----------------------------------- ------ ------------ --------------
(111.2) (107.9)
----------------------------------- ------ ------------ --------------
Net current liabilities (45.8) (50.0)
----------------------------------- ------ ------------ --------------
Non-current liabilities
Long-term provisions (0.5) (0.5)
Deferred tax liabilities (1.2) (4.8)
Long-term lease liabilities 8 (35.8) (40.7)
Long-term borrowings 8 (70.8) (60.5)
----------------------------------- ------ ------------ --------------
(108.3) (106.5)
----------------------------------- ------ ------------ --------------
Total liabilities (219.5) (214.4)
----------------------------------- ------ ------------ --------------
Net assets 137.7 151.6
----------------------------------- ------ ------------ --------------
Equity
Share capital 9 0.2 0.2
Share premium account 0.7 0.7
Treasury reserve (21.4) (11.0)
Other reserve (37.1) (37.1)
Merger reserve 163.8 163.8
Foreign currency translation
reserve 0.2 0.8
Retained profit 31.3 34.2
----------------------------------- ------ ------------ --------------
Equity attributable to equity
holders of the parent 137.7 151.6
----------------------------------- ------ ------------ --------------
(1) The comparative year has been restated for the treatment of
the pension buy-in and tax expense in relation to the exercise of
share options during 2019, full disclosure included within note 1
of the Preliminary Results.
Consolidated Statement of Changes in Equity
Equity
Share Foreign Retained attributable
Share premium Treasury Other Merger currency profit to equity
capital account reserve reserve reserve translation Restated holders
reserve (1) of the
parent
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
---------------------- ---------- ----------- ---------- ---------- -------------- ----------- --------------
Balance at 1
January
2019 0.2 0.2 (19.2) (37.1) 163.8 0.8 41.7 150.4
----------------- ---- ---------- ----------- ---------- ---------- -------------- ----------- --------------
Profit for the
year (Restated)
(1) - - - - - - 3.8 3.8
Other
comprehensive
income:
Re-measurement
of pension
assets - - - - - - 0.9 0.9
Net exchange - - - - - - - -
gain on
translation of
foreign
entities
----------------- ---- ---------- ----------- ---------- ---------- -------------- ----------- --------------
Total
comprehensive
profit
for the year - - - - - - 4.7 4.7
----------------- ---- ---------- ----------- ---------- ---------- -------------- ----------- --------------
Transactions
with owners:
Share buy
back - - (3.5) - - - - (3.5)
Dividends - - - - - - (14.6) (14.6)
Vesting of
share
options - 0.5 11.7 - - - (12.2) -
Share based
payments
charge - - - - - - 10.9 10.9
Deferred tax
on share
based
payments - - - - - - 3.7 3.7
Balance at 31
December
2019 (Audited) 0.2 0.7 (11.0) (37.1) 163.8 0.8 34.2 151.6
Profit for the
year - - - - - - 22.6 22.6
Other
comprehensive
income:
Net exchange
loss on
translation of
foreign
entities - - - - - (0.6) - (0.6)
----------------- ---- ---------- ----------- ---------- ---------- -------------- ----------- --------------
Total
comprehensive
profit
for the year - - - - - (0.6) 22.6 22.0
----------------- ---- ---------- ----------- ---------- ---------- -------------- ----------- --------------
Transactions
with owners:
Share buy
back - - (23.7) - - - - (23.7)
Dividends - - - - - - (18.0) (18.0)
Vesting of
share
options - - 13.3 - - - (13.3) -
Share based
payments
charge - - - - - - 4.2 4.2
Deferred tax
on share
based
payments - - - - - - 1.6 1.6
Balance at 31
December
2020
(Unaudited) 0.2 0.7 (21.4) (37.1) 163.8 0.2 31.3 137.7
----------------- ---- ---------- ----------- ---------- ---------- -------------- ----------- --------------
(1) The comparative year has been restated for the treatment of
the pension buy-in and tax expense in relation to the exercise of
share options during 2019, full disclosure included within note 1
of the Preliminary Results.
Consolidated Statement of Cash Flows
Year ended Year ended
31 December 31 December
Continuing operations 2020 2019
Unaudited Audited
Restated
(1)
Cash flows from operating activities GBPm GBPm
Profit for the year 22.6 3.8
Adjustments for:
Depreciation 7.0 4.8
Amortisation 11.8 17.2
Finance costs 4.4 4.7
Taxation recognised in profit or
loss 6.0 4.2
Share based payments charge 4.2 10.9
Re-measurement of pension assets - 0.9
Decrease in trade and other receivables 1.5 5.7
Increase in trade and other payables 2.5 2.9
Revaluation of short and long-term
derivatives (0.3) (1.7)
Movement in provisions 0.1 (0.6)
-------------------------------------------- ------------- -------------
Cash generated from continuing operations 59.8 52.8
Interest paid (continuing operations) (2.4) (3.0)
Income taxes paid (continuing operations) (6.4) (7.8)
-------------------------------------------- ------------- -------------
Total cash flows from operating
activities 51.0 42.0
-------------------------------------------- ------------- -------------
Cash flows from investing activities
(continuing operations)
Acquisitions (1.0) (8.2)
Cash received from repayment of
loans 0.9 0.9
Purchase of property, plant and
equipment (3.5) (1.6)
Purchase of intangible assets (1.5) (1.1)
-------------------------------------------- ------------- -------------
Total cash flows used in investing
activities (5.1) (10.0)
-------------------------------------------- ------------- -------------
Cash flows from financing activities
(continuing operations)
Repayment of borrowings (5.3) (10.5)
Proceeds from borrowings 15.0 6.4
Loan refinancing fee (0.7) -
Acquisition of own shares (23.7) (3.5)
Principal elements of lease payments (6.1) (5.0)
Dividend paid (18.0) (14.6)
-------------------------------------------- ------------- -------------
Total cash flows used in financing
activities (38.8) (27.2)
-------------------------------------------- ------------- -------------
Net increase in cash and cash equivalents 7.1 4.8
Cash and cash equivalents at beginning
of year 11.2 6.3
Effects of currency translation
on cash and cash equivalents (0.6) 0.1
-------------------------------------------- ------------- -------------
Cash and cash equivalents at end
of year 17.7 11.2
-------------------------------------------- ------------- -------------
(1) Restatement
The comparative year's statement of cash flows has been
restated:
-- to reduce operating profit by GBP2.2m for the year ended 31 December 2019 and increase the re-measurement of pension assets by the same amount reflecting a change to the accounting treatment of the pension buy-in (Adjusted EBITDA remains unaffected).
-- to reduce operating profit by a further GBP1.0m and increase
taxation expense by the same amount reflecting incorrect treatment
of taxation on exercise of share options in 2019.
-- to recognise principal elements of lease payments gross, not net of sub-lease income.
-- to reclassify cash received from the repayment of loans into
cash flows from investing activities.
Full disclosure included within note 1 to the Preliminary
Results.
Notes to the Preliminary Results
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 and listed on the Alternative Investment Market
(AIM). The registered office of the Company is John Carpenter
House, John Carpenter Street, London, EC4Y 0AN. The registered
number of the Company is 03925319.
Basis of preparation
The condensed financial statements have been prepared under the
historical cost convention as modified by the revaluation of
derivative financial instruments. Whilst the information included
in the condensed financial statements has been prepared in
accordance with the recognition and measurement criteria of
International Financial Reporting Standards ("IFRSs") as adopted by
the European Union and as issued by the International Accounting
Standards Board, this announcement does not itself contain
sufficient information to comply with IFRSs. The condensed
financial statements for the year ended 31 December 2020 have been
prepared on a consistent basis with the financial accounting
policies set out in the Accounting Policies section of the
GlobalData Plc's Annual Report and Accounts for the year ended 31
December 2019 except as described below. These condensed financial
statements are presented in Pounds Sterling (GBP).
The financial information for the year ended 31 December 2020 is
unaudited and does not constitute statutory accounts as defined in
section 434 of the Companies Act 2006. A copy of the statutory
accounts for the year ended 31 December 2019 has been delivered to
the Registrar of Companies. The independent auditors' report on the
full financial statements for the year ended 31 December 2019 was
unqualified and did not contain an emphasis of matter paragraph or
any statement under section 498 of the Companies Act 2006.
This preliminary announcement does not constitute the Group's
full financial statements for the year ended 31 December
2020. The Group's full financial statements will be approved by
the Board of Directors and reported on by the auditors in March
2021. Accordingly, the financial information for 2020 is presented
unaudited in the preliminary announcement.
Restatements
On 16 December 2019 the Group entered into an irrevocable
agreement to sell the defined benefit pension scheme of World
Market Intelligence Limited, a subsidiary of the Group, to Just
Retirement Limited ("Just") through a two-step buy-out transaction
under which all risks in relation to the scheme are transferred to
Just. The first step of the transaction involved the acquisition of
a qualifying insurance policy that will cover the future pension
obligations of the scheme (the "buy-in" step), at a cash cost to
the Group of GBP1.3m subject to an adjusting payment on completion.
The buy-out step, which resulted in the transfer of the scheme
liabilities to the insurer, was completed on 22 February 2021. This
transaction has been accounted for as a settlement. A charge of
GBP2.2m has been recognised as a settlement cost, being the
difference between the amount paid and the liability at the
settlement date. The prior year income statement has been restated
to reflect this loss of GBP2.2m in the income statement.
Previously, the loss of GBP2.2m was recognised in other
comprehensive income offset by the reversal of an asset ceiling,
recorded to limit the pension surplus able to be recognised under
IFRSs, in the amount of GBP0.9m. As such, an overall entry of
GBP1.3m was recognised in other comprehensive income in the prior
year. The reversal of the asset ceiling of GBP0.9m through other
comprehensive income is not impacted by the restatement as this may
not offset any loss recorded in the income statement in respect of
this transaction. This adjustment has increased operating expenses
by GBP2.2m and reduced operating profit and profit before tax by
the same amount. Basic earnings per share reduced from 6.0 pence to
4.1 pence and diluted earnings per share from 5.6 pence to 3.8
pence (excludes the impact of the tax restatement detailed on page
17). The adjustment had no impact on the Group's net assets as at
31 December 2019 and no impact on the Group's Adjusted EBITDA.
The comparative period results have been restated to reclassify
other income from below operating profit to above operating profit.
Other income is comprised of sub-lease rental income related to the
operations of the business and, as such, has been reclassified
above operating profit. The restatement has increased operating
profit for the year ended 31 December 2019 by GBP1.3m. Profit
before tax, net assets and earnings per share is unaffected for the
comparative period.
In the comparative period a tax deduction in relation to the
exercise of share options in 2019 was fully recognised in the
Income Statement and the prior period results have been restated to
correctly recognise this directly in Equity because the amount of
the accrued tax deduction exceeded the amount of the related
cumulative remuneration expense and this excess should therefore be
recognised directly in equity in accordance with IAS 12. At the
same time, the comparative period tax expense has been updated for
other prior year errors, predominantly errors identified in the
Group's US tax returns which have subsequently been refiled. These
changes have had no effect on profit before tax and Adjusted EBITDA
for the comparative year but the income tax expense has increased
by GBP1.0m, the taxation credit on share based payments within
Equity has increased by GBP1.2m and current tax payable has reduced
by GBP0.2m. These changes have reduced both basic and diluted
earnings per share by 0.8 pence for the year ended 31 December
2019.
The cash flow statement for the prior year has also been
restated to recognise principal elements of lease payments gross of
sub-lease rental income. Sub-lease rental income was incorrectly
netted off against principal elements of lease payments and has
been reclassified to total cash flows from operating activities.
The restatement has increased the principal elements of lease
payments by GBP1.3m for the year ended 31 December 2019. Total cash
flows from operating activities has increased by the same
amount.
The cash flow statement for the prior year has additionally been
restated to reclassify GBP0.9m cash received from the repayment of
loans from operating cash flows to investing cash flows.
Critical accounting estimates and judgements
The Group makes estimates and assumptions regarding the future.
Estimates and judgements are continually evaluated based on
historical experience and other factors, including expectations of
future events that are believed to be reasonable under the
circumstances.
In the future, actual experience may deviate from these
estimates and assumptions. The estimates and assumptions that have
a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year
are discussed in detail below.
Key sources of estimation uncertainty
Management have performed an assessment and have concluded that
there are no key sources of estimation uncertainty.
Critical accounting judgements
Segmental reporting
IFRS 8 "Operating Segments" requires the segment information
presented in the financial statements to be that which is used
internally by the chief operating decision maker to evaluate the
performance of the business and to decide how to allocate
resources. The Group has identified the Chief Executive Officer
(CEO) 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 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 team reports to one central individual, the
Managing Director of the India operation who reports to the Group
CEO. Data, analytics and insights is therefore considered to be the
operating segment of the Group. Segmental reporting disclosures are
provided in note 3.
The Group profit or loss is reported to the CEO monthly and
consists of earnings before interest, tax, depreciation,
amortisation, central overheads and other adjusting items (as
detailed in note 5). The CEO also monitors revenue within the
operating segment.
The Group considers the use of a single operating segment to be
appropriate due to:
- The CEO reviewing profit or loss at the Group level
- Utilising a centralised operating model
- Being an integrated solutions based business, rather than a portfolio business
Identification of Cash-Generating-Units
IAS 36 'Impairment of Assets' requires that assets be carried on
the statement of financial position at no more than their
recoverable amount. An asset or cash-generating unit (CGU) is the
smallest identifiable group of assets that generates cash inflows
and is impaired when its carrying amount exceeds its recoverable
amount. Management have previously identified 8 CGUs, being
Healthcare, Technology, Consumer, Construction, Energy, Financial
Services, MEED and Communities which can all be traced back to
acquisitions over recent years. Through being integrated and
further developed within the Group, these assets all contribute to
generating cash inflows for the wider business, covering all
subject matter areas. All subject matters are accessible through
the single operating platform ('One Platform'), and all products
include access to a thin layer of information spanning across all
markets and subjects. The exception to this is MEED (an indirect
subsidiary of the Group based in the United Arab Emirates) which
continues to be classified as an individual CGU due to having
separately identifiable cash flows and financial results.
Management have therefore identified 2 CGUs, being 'Data, Analytics
and Insights' and MEED. Management recognise that this approach is
different to the conclusion reached regarding the segmental
reporting rationale of the Group, however this is appropriate
because the IFRS criteria for identifying segments and CGUs differ.
There are no historical or current impairment charges as a result
of this change, and no impairment loss would have arisen in the
current year under the previous CGU approach. Management have
considered whether events should be classified as a separate CGU
however have concluded that this is a route to market with the same
underlying Data, Analytics and Insights product. If management had
concluded that events was a separate CGU, no impairment loss would
have arisen in the current year.
Going concern
The Group has closing cash of GBP17.7m as at 31 December 2020
and net debt of GBP58.1m (31 December 2019: net debt of GBP55.3m),
being cash and cash equivalents less short and long-term
borrowings, excluding lease liabilities. The Group has outstanding
loans of GBP75.8m which are syndicated with The Royal Bank of
Scotland, HSBC and Bank of Ireland. The Group has a further
facility to draw upon of GBP65m RCF, plus a further uncommitted
accordion facility of GBP75m. The Group's current banking
facilities are in place until April 2023. The Group has generated
GBP59.8m in cash from continuing operations during 2020.
The finance facilities were issued with debt covenants which are
measured on a quarterly basis. There have been no breaches of
covenants in the year ended 31 December 2020. Management have
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 approval of the
financial statements. The Directors recognise that the COVID-19
pandemic does create risks and uncertainties, and in response to
this have modelled a number of scenarios to consider the potential
impact of COVID-19 on the Group's results, cash flow and loan
covenant forecast. Key assumptions built into the scenarios focus
on new business growth rates, event revenue and directly
attributable cost savings. There remains headroom on the covenants
under each scenario. In addition to performing scenario planning,
the Directors have also conducted stress testing of the business'
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 .
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 financial statements on a going concern
basis.
2. Accounting policies
These unaudited condensed financial statements have been
prepared on a basis consistent with the policies applied in the
previous year, except for the following new standards. The new
standards which are effective during the year (and have had a
minimal impact on the financial statements) are:
-- Amendments to IFRS 3: Definition of Business (issued on 22
October 2018 and effective for periods on or after 1 January
2020)
-- Amendments to References to the Conceptual Framework in IFRS
Standards (issued on 29 March 2018 and effective for periods on or
after 1 January 2020)
-- Amendments to IAS1 and IAS8: Definition of Material (issued
in October 2018 and effective for periods on or after 1 January
2020)
-- Amendments to IFRS9, IAS39 and IFRS7: Interest Rate Benchmark
Reform (issued in September 2019 and effective for periods on or
after 1 January 2020)
Pre sentation 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 core 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 Share based payment expenses are excluded from
Adjusted EBITDA as they are a non-cash charge,
the awards are equity-settled and their effect
on shareholders' returns is already reflected
in diluted earnings per share measures.
Restructuring, M&A The Group considers these items of expense as
and refinancing costs exceptional and excludes them from Adjusted EBITDA
where the nature of the item, or its size, is
not related to the core underlying trading of
the Group so as to assist the user of the financial
statements to better understand the results of
the core operations of the Group and allow comparability
of underlying results.
----------------------------------------------------------
Amortisation of acquired The amortisation charge for those intangible
intangible assets assets recognised on business combinations is
excluded from Adjusted EBITDA since they are
non-cash charges arising from investment activities.
These acquisitions were investment decisions
that took place at different times over several
years, and so the associated amortisation does
not reflect the current trading performance of
the Group. This is a common adjustment made by
acquisitive information service businesses and
therefore consistent with peers.
----------------------------------------------------------
Revaluation of short Gains and losses are recognised within Adjusted
and long-term derivatives EBITDA when they are realised in cash terms and
therefore we exclude such non-cash movements,
arising from fluctuations in exchange rate which
may not reflect the underlying performance of
the Group, and which better aligns Adjusted EBITDA
to the cash performance of the business.
----------------------------------------------------------
Unrealised operating
foreign exchange
gain/ loss
----------------------------------------------------------
3. Segmental analysis
The principal activity of GlobalData Plc and its subsidiaries
(together 'the Group') is to provide business information in the
form of high quality proprietary data, analytics and insights to
clients in multiple sectors.
IFRS 8 "Operating Segments" requires the segment information
presented in the financial statements to be that which is used
internally by the chief operating decision maker to evaluate the
performance of the business and to decide how to allocate
resources. The Group has identified the Chief Executive Officer
(CEO) 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 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 team reports to one central individual, the
Managing Director of the India operation who reports to the Group
CEO. 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
Officer on a monthly basis and consists of earnings before
interest, tax, depreciation, amortisation, central overheads and
other adjusting items. The Chief Executive Officer also monitors
revenue within the operating segment.
The Group considers the use of a single operating segment to be
appropriate due to:
- The CEO reviewing profit or loss at the Group level
- Utilising a centralised operating model
- Being an integrated solutions based business, rather than a portfolio business
A reconciliation of Adjusted EBITDA to profit before tax from
continuing operations is set out below:
Year ended Year ended
31 December 2020 31 December
Unaudited 2019
Audited
GBPm Restated
GBPm
Adjusted EBITDA 56.7 49.8
Adjusting items (see note 5) (15.6) (31.4)
Depreciation (7.0) (4.8)
Amortisation (excluding amortisation
of acquired intangible assets (1) ) (1.1) (0.9)
Finance costs (4.4) (4.7)
Profit before tax 28.6 8.0
-------------------------------------- ------------------ -------------
(1 Amortisation of acquired intangible assets included in
Adjusting items above)
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 received at the beginning of the
services and is therefore recognised as a contract liability,
"deferred revenue", on the statement of financial position. Revenue
is recognised evenly over the period of the contractual term as the
performance obligations are satisfied evenly over the term of
subscription.
The revenue on services delivered at a point in time is
recognised when our contractual obligation is satisfied, such as
delivery of a static report or delivery of an event. The obligation
on these types of contracts is a discrete obligation, which once
met satisfies the Group performance obligation under the terms of
the contract.
Any invoiced contracted amounts which are still subject to
performance obligations and where the payment has been received or
is contractually due, is recognised within 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 Deferred Revenue recognised within the
Statement Consolidated Statement of Financial Position
Year ended 31 Year ended 31 As at 31 As at 31
December 2020 December 2019 December 2020 December 2019
Unaudited Audited Unaudited Audited
GBPm GBPm GBPm GBPm
Services transferred:
Over a period of
time 149.1 138.9 64.2 57.5
Immediately on
delivery 29.3 39.3 10.5 11.1
----------------------- ---------------------- ---------------------- --------------------- ----------------------
Total 178.4 178.2 74.7 68.6
As subscriptions are typically for periods of 12 months the
majority of deferred revenue held at 31 December will be recognised
in the income statement in the following year. As at 31 December
2020 GBP1.1m (2019: GBP0.8m) 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
Year ended 31 December 2020 UK Europe Americas (1) Asia Pacific MENA (2) Rest of World Total
(Unaudited)
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Revenue from external customers 26.3 49.7 62.8 19.2 13.1 7.3 178.4
------------------------------------- ----- ------- ------------- ------------- --------- -------------- ------
Year ended 31 December 2019 UK Europe Americas (1) Asia Pacific MENA (2) Rest of World Total
(Audited)
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Revenue from external customers 27.7 49.4 62.0 17.7 15.0 6.4 178.2
------------------------------------- ----- ------- ------------- ------------- --------- -------------- ------
1. Americas includes revenue to the United States of America of GBP59.7m (2019: GBP58.5m)
2. Middle East & North Africa
Intangible assets held in the US and Canada were GBP21.1m (2019:
GBP21.5m), of which GBP19.7m related to Goodwill (2019: GBP19.7m).
Intangible assets held in the UAE were GBP14.3m (2019: GBP15.9m) of
which GBP11.4m related to Goodwill (2019: GBP11.4m). All other
non-current assets are held in the UK. The largest customer
represented less than 2% of the Group's consolidated revenue.
4. Operating profit
Operating profit is stated after the following expenses relating
to continuing operations:
Year ended Year ended
31 December 31 December
2020 2019
Unaudited Audited
Restated
GBPm GBPm
Cost of sales 101.0 106.8
Administrative costs - losses
on trade receivables 1.3 2.3
Administrative costs - other 44.4 57.7
Operating expenses 146.7 166.8
-------------------------------- -------------- --------------
5. Adjusting items
Year ended Year ended
31 December 31 December
2020 2019
Unaudited Audited
Restated
GBPm GBPm
Restructuring costs 0.4 0.8
M&A costs 0.7 1.5
Refinancing costs 0.2 -
Costs of settlement of pension
liabilities (note 1) - 2.2
Share based payment charge 4.2 10.9
Revaluation gain on short and
long-term derivatives (0.3) (1.7)
Unrealised operating foreign exchange
(gain)/ loss (0.3) 1.4
Amortisation of acquired intangibles 10.7 16.3
Total adjusting items 15.6 31.4
---------------------------------------- -------------- --------------
The adjustments made are as follows:
-- Restructuring relates to a GBP0.1m charge incurred in
relation to the pension buy-in transaction, a GBP0.2m charge
incurred in relation to restructuring and GBP0.1m of fees incurred
in relation to the Employee Benefit Trust.
-- The M&A costs relate to deferred consideration payments
in respect to an acquisition made in 2018, CHM Research
Limited.
-- Refinancing costs were GBP0.2m and are in relation to the
refinancing activity completed in May 2020.
-- Costs of settlement of pension liabilities reflects a charge
of GBP2.2m in relation to the buy-in of the World Market
Intelligence Limited defined benefit pension scheme. The scheme
came into the Group as part of the acquisition of Research Views
Limited and subsidiaries (World Market Intelligence Limited being a
subsidiary of Research Views Limited) in 2018, the charge is
therefore reflected as an adjusting item given it has arisen as
part of M&A activity and relates to a corporate transaction to
transfer the defined benefit obligations to a third party.
-- The share based payments charge is in relation to the two s
hare based compensation plans (detailed in note 10) 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 (fair value at the date of grant
determined using the Black-Scholes model for scheme 1 and the Monte
Carlo method for scheme 2), excluding the impact of any non-market
service and performance vesting conditions (for example,
profitability, sales growth targets and remaining an employee of
the entity over a specified time period).
-- The revaluation of short and long-term derivatives relates to
movement in the fair value of the short and long-term
derivatives.
-- Unrealised operating foreign exchange (gains)/ losses relate
to non-cash exchange gains and losses made on operating items.
6. 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.
Year ended
Year ended 31 December 2019
31 December 2020 Audited
Unaudited Restated
Earnings per share attributable to equity holders from continuing
operations:
Basic
Profit for the period attributable to ordinary shareholders of the parent
company (GBPm) 22.6 3.8
Weighted average number of shares (no' m) 116.2 116.5
Basic earnings per share (pence) 19.4 3.3
Diluted
Profit for the period attributable to ordinary shareholders of the parent
company (GBPm) 22.6 3.8
Weighted average number of shares (no' m) 124.8 125.7
Diluted earnings per share (pence) 18.1 3.0
Reconciliation of basic weighted average number of shares to the
diluted weighted average number of shares:
Year ended
31 December 2020
Unaudited
No' m
Year ended
31 December 2019
Audited
No' m
Basic weighted average number of shares, net of shares held in Treasury
reserve 116.2 116.5
Share options in issue at end of period, net of shares not paid up 8.6 9.2
--------------------------------------------------------------------------- ------------------- ------------------
Diluted weighted average number of shares 124.8 125.7
--------------------------------------------------------------------------- ------------------- ------------------
7. Intangible assets
Software Customer relationships Brands IP rights and Database Goodwill Total
GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s
Cost
As at 1 January 2019
(Audited) 9.7 42.6 15.7 47.1 222.8 337.9
Additions: Business
Combinations - 1.0 0.3 1.8 4.4 7.5
Additions: Separately
Acquired 1.1 - - - - 1.1
Fair value adjustment - - - - 0.1 0.1
Foreign currency
retranslation (0.1) - - - - (0.1)
As at 31 December 2019
(Audited) 10.7 43.6 16.0 48.9 227.3 346.5
Additions: Business
Combinations - 0.4 - 1.3 0.4 2.1
Additions: Separately
Acquired 1.5 - - - - 1.5
Foreign currency
retranslation - - 0.1 - - 0.1
As at 31 December 2020
(Unaudited) 12.2 44.0 16.1 50.2 227.7 350.2
------------------------ --------- ----------------------- -------- ----------------------- --------- --------
Amortisation
As at 1 January 2019
(Audited) (8.1) (20.9) (8.2) (31.6) (10.5) (79.3)
Charge for the year (0.8) (4.2) (1.4) (10.8) - (17.2)
Foreign currency
retranslation 0.1 - - - - 0.1
------------------------ --------- ----------------------- -------- ----------------------- --------- --------
As at 31 December 2019
(Audited) (8.8) (25.1) (9.6) (42.4) (10.5) (96.4)
Charge for the year (1.1) (3.7) (1.1) (5.9) - (11.8)
As at 31 December 2020
(Unaudited) (9.9) (28.8) (10.7) (48.3) (10.5) (108.2)
------------------------ --------- ----------------------- -------- ----------------------- --------- --------
Net book value
As at 31 December 2020
(Unaudited) 2.3 15.2 5.4 1.9 217.2 242.0
As at 31 December 2019
(Audited) 1.9 18.5 6.4 6.5 216.8 250.1
------------------------ --------- ----------------------- -------- ----------------------- --------- --------
Additions as a result of business combinations in the year have
been disclosed in further detail in note 11.
8. Borrowings
31 December 31 December
2020 2019
Unaudited Audited
GBPm GBPm
Short-term lease liabilities 4.1 3.9
Short-term borrowings 5.0 6.0
Current liabilities 9.1 9.9
------------------------------- ------------ ------------
Long-term lease liabilities 35.8 40.7
Long-term borrowings 70.8 60.5
Non-current liabilities 106.6 101.2
------------------------------ ------ ------
The changes in the Group's borrowings can be classified as
follows:
Long-term Short-term Long-term
borrowings lease lease
Short-term liabilities liabilities
borrowings (1) (1) Total
GBPm GBPm GBPm GBPm GBPm
----------------------------------------------------------- -------------- -------------- -------------- -------------- -------
1 January 2019 (Audited) 6.0 64.3 2.0 33.7 106.0
----------------------------------------------------------- -------------- -------------- -------------- -------------- -------
Cash-flows:
* Repayment (6.0) (4.5) (4.8) - (15.3)
* Proceeds - 6.4 - - 6.4
Non-cash:
* Loan fee amortisation - 0.3 - - 0.3
* Lease additions - - 3.4 9.3 12.7
* Lease liabilities (2) - - 1.4 (0.4) 1.0
* Reclassification 6.0 (6.0) 1.9 (1.9) -
----------------------------------------------------------- -------------- -------------- -------------- -------------- -------
31 December 2019 (Audited) 6.0 60.5 3.9 40.7 111.1
----------------------------------------------------------- -------------- -------------- -------------- -------------- -------
Cash-flows:
* Repayment (5.3) - (6.1) - (11.4)
* Proceeds - 15.0 - - 15.0
* Loan fees paid - (0.7) - - (0.7)
Non-cash:
* Loan fee amortisation until modification date - 0.1 - - 0.1
* Fair value adjustments since modification - 0.2 - - 0.2
* Lease additions - - 0.3 - 0.3
* Lease liabilities (2) - - 1.6 (0.5) 1.1
* Reclassification 4.3 (4.3) 4.4 (4.4) -
As at 31 December 2020 (Unaudited) 5.0 70.8 4.1 35.8 115.7
----------------------------------------------------------- -------------- -------------- -------------- -------------- -------
(1) Amounts are net of rental prepayments and accruals
(2) Represents lease interest, dilapidations and movement on lease liability accruals and
prepayments
Term loan and RCF
In May 2020, the Group announced that it had agreed to increase
its current banking facilities with NatWest, HSBC and Bank of
Ireland, extending the current maturity to April 2023 (previously
April 2022). The new arrangements increase the total committed
facility to GBP145.5m (previously GBP100m), plus a further
uncommitted accordion facility of GBP75m. The committed facility
comprises a term loan of GBP50m and a revolving credit facility
(RCF) of GBP95.5m.
The term loan is repayable in quarterly instalments, with total
repayments due in the next 12 months of GBP5.0m. The outstanding
term loan balance as at 31 December 2020 is GBP46.2m. A capitalised
loan fee credit of GBP1.1m is included in the long term borrowing
balance. As at 31 December 2020, the Group had drawn down GBP30.5m
of the RCF. Interest is charged on the term loan and drawn down RCF
at a rate of 2.5% over the London Interbank Offered Rate.
In accordance with IFRS 9 we have performed a comparison of the
fair value of the new debt with the old to determine whether there
has been a substantial modification requiring de-recognition. The
assessment concluded that there has not been a substantial
modification, the difference between the fair value of the new debt
with the old is GBP0.2m and is included within the long term
borrowings of GBP70.8m.
9. Equity
Share capital
Allotted, called up and fully paid:
31 December 2020 31 December 2019
Unaudited Audited
No'000 GBP000s No'000 GBP000s
Ordinary shares (1/14(th) pence) 118,303 84 118,303 84
Deferred shares of GBP1.00 each 100 100 100 100
----------------------------------------- ------------ ----------- ----------- ----------
Total allotted, called up and fully paid 118,403 184 118,403 184
----------------------------------------- ------------ ----------- ----------- ----------
Share Purchases
As detailed in note 10, during the period the Group's Employee
Benefit Trust purchased an aggregate amount of 2,102,250 shares at
a total market value of GBP23.7m. The purchased shares will be held
for the purpose of satisfying the exercise of share options under
the Company's Employee Share Option Plan.
In May 2020, 1.8m outstanding share options held by GlobalData
employees vested in accordance with the EBITDA target being
satisfied under Tranche 2b and approved by the Remuneration
Committee. The Group satisfied all of the share options exercised
using the shares held by the Trust. Movements to the treasury
reserve and retained earnings have arisen on the accounting for the
vesting of the options as detailed in the Statement of Changes in
Equity. This recognises the fact that no current year expense is
incurred, as the vesting of options is a transaction with
shareholders only.
Capital management
The Group's capital management objectives are:
-- To ensure the Group's ability to continue as a going concern
-- To fund future growth and provide an adequate return to
shareholders and, when appropriate, distribute dividends
The capital structure of the Group consists of net debt, which
includes borrowings (note 8) 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 2019 was 10.0p per share and was paid in
June 2020. The total dividend for the current year is 17.0 pence
per share, with an interim dividend of 5.4 pence per share paid on
2 October 2020 to shareholders on the register at the close of
business on 28 August 2020 and a final dividend of 11.6 pence per
share will be paid on 23 April 2021 to shareholders on the register
at the close of business on 26 March 2021. The ex-dividend date
will be on 25 March 2021.
The Company had, at all times, sufficient distributable profits
to fund its distributions during 2020. However, following the year
end, the Directors became aware that a proportion of a contribution
made to the Employee Benefit Trust, in order to buy back shares to
satisfy the employee share options plan, was technically an
unlawful distribution in accordance with section 838 of the
Companies Act 2006. Despite having sufficient distributable
profits, interim accounts had not been filed at Companies House, to
demonstrate its reserves position, prior to the distribution.
Furthermore, the Directors noted that again, whilst always
maintaining distributable reserves in the company accounts,
unlawful distributions by way of dividends and contributions to the
Employee Benefit Trust were also made in 2019. There are no issues
noted in this respect prior to 2019.
In order to correct the position, the Company will file interim
accounts with Companies House in advance of the Annual General
Meeting to demonstrate sufficient reserves. At the Company's Annual
General Meeting, on 20 April 2021, the Company shall propose a
resolution to remove any right the Company may have to claim from
Directors and Shareholders in respect of the relevant contributions
and distributions. The Company reserves as at 31 December 2020 are
GBP33m, which are inclusive of the distributions made of GBP8.7m in
2019, GBP6.4m in 2020 and GBP0.3m in 2021 which were technically in
breach of section 838 of the Companies Act 2006. No accounting
entries need to be made to correct the position and the
resolutions, if passed, will remedy the matter.
Share Premium
Proceeds received in addition to the nominal value of shares
issued have been included in the Share premium account.
Merger reserve
The merger reserve contains the premium on the shares issued in
consideration for the purchase of GlobalData Holding Limited in
2016 and the premium on the shares issued in consideration for the
purchase of Research Views Limited and its subsidiaries in
2018.
Treasury reserve
The treasury reserve contains shares held in the Group's
Employee Benefit Trust for the purpose of satisfying the exercise
of share options under the Company's Employee Share Option
Plan.
Other reserve
Other reserves consist of a reserve created upon the reverse
acquisition of the TMN Group Plc in 2009. The parent company
reserve differs from this due to the restatement of consolidated
reserves at the time of the reverse acquisition. The parent company
other reserve was generated in 2008 upon the issue of shares to
fund acquisitions.
Foreign currency translation reserve
The foreign currency translation reserve contains the
translation differences that arise upon translating the results of
subsidiaries with a functional currency other than Sterling. Such
exchange differences are recognised in the income statement in the
period in which a foreign operation is disposed of.
10. Share based payments
Scheme 1
The Group created a share option scheme during the year ended 31
December 2010 and granted the first options under the scheme on 1
January 2011 to certain senior employees. Each option granted
converts to one ordinary share on exercise. A participant may
exercise their options subject to employment conditions and EBITDA
targets being met. For these options to be exercised the Group's
earnings before interest, taxation, depreciation and amortisation,
as adjusted by the Remuneration Committee for significant or
one-off occurrences, must exceed certain targets. The fair values
of options granted were determined using the Black-Scholes model.
The inputs used in the model were:
-- share price at date of grant
-- exercise price
-- time to maturity
-- annual risk-free interest rate and;
-- annualised volatility
The following assumptions were used in the valuation:
Award Tranche Grant Date Fair Value Estimated Weighted
of Share Exercise Forfeiture Average
Price at Price rate p.a. of Remaining
Grant Date (Pence) Contractual
Life (Years)
--------------- ---------------- ------------- ----------- ------------ --------------
Award 1 1 January 2011 GBP1.089 0.0714p 0% 1.0
Award 3 1 May 2012 GBP1.866 0.0714p 0% 1.0
Award 4 7 March 2014 GBP2.550 0.0714p 0% 1.0
22 September
Award 6 2014 GBP2.525 0.0714p 0% 1.0
9 December
Award 7 2014 GBP2.075 0.0714p 0% 1.0
31 December
Award 8 2014 GBP2.025 0.0714p 0% 1.0
Award 9 21 April 2015 GBP1.980 0.0714p 0% 1.0
28 September
Award 10 2015 GBP2.420 0.0714p 0% 1.0
Award 11 17 March 2016 GBP2.380 0.0714p 0% 0.0
Award 12 17 March 2016 GBP2.380 0.0714p 0% 1.0
21 October
Award 13 2016 GBP4.300 0.0714p 0% 1.0
Award 14 21 March 2017 GBP5.240 0.0714p 0% 1.0
Award 15 21 March 2017 GBP5.240 0.0714p 0% 1.0
Award 16 21 March 2017 GBP5.240 0.0714p 0% 1.0
21 September
Award 17 2017 GBP5.540 0.0714p 0% 1.0
Award 18 20 March 2018 GBP5.910 0.0714p 0% 1.0
Award 19 20 March 2018 GBP5.910 0.0714p 0% 1.0
23 October
Award 20 2018 GBP5.270 0.0714p 0% 1.0
23 October
Award 21 2018 GBP5.270 0.0714p 0% 1.0
23 October
Award 22 2018 GBP5.270 0.0714p 0% 1.0
Award 23 19 March 2019 GBP5.860 0.0714p 0% 1.0
22 October
Award 24 2019 GBP8.189 0.0714p 0% 1.0
14 February
Award 25 2020 GBP12.500 0.0714p 0% 1.0
Award 26 23 March 2020 GBP9.080 0.0714p 0% 1.0
Award 27 23 June 2020 GBP13.910 0.0714p 0% 1.0
22 September
Award 28 2020 GBP14.260 0.0714p 0% 1.0
Awards 2 and 5 have been fully forfeited.
The estimated forfeiture rate assumption is based upon
management's expectation of the number of options that will lapse
over the vesting period. The assumptions were determined when the
scheme was set up in 2011 and are reviewed annually. Management
believe the current assumptions to be reasonable based upon the
rate of lapsed options and proximity to the vesting targets.
Each of the awards are subject to the vesting criteria set by
the Remuneration Committee. In order for the remaining options to
be exercised, the Group's earnings before interest, taxation,
depreciation and amortisation, as adjusted by the Remuneration
Committee for significant or one-off occurrences, must exceed the
remaining target of GBP52m in any one year before the end of the
period in which the options are exercisable, which is generally 10
years from the date of the grant (GBP52m target excludes the impact
of IFRS16).
The Remuneration Committee noted that due to the impact of
COVID-19, the Group failed to meet the final target of GBP52m
Adjusted EBITDA (pre IFRS16) during 2020. Under normal
circumstances 892,000 shares would have expired as at 1 January
2021, being 10 years from date of grant. However, due to the impact
that COVID-19 has had on the events business, the Remuneration
Committee believes it is fair to replace those 892,000 shares and
extend the target period by an additional year. The Group has
accounted for this under the modification principles of IFRS 2,
Share Based Payments.
The replacement share options were clearly documented as
replacement options, the option holders received the same quantity
of options, and at the same exercise price, and the vesting target
of GBP52m is equal to the previous target. Therefore, because of
these considerations the Directors believe a modification treatment
to be appropriate.
Group Group Group Group
Achieves Achieves Achieves Achieves
GBP10m EBITDA GBP32m EBITDA GBP41m EBITDA (1) GBP52m EBITDA (1)
---------- --------------- --------------- ------------------- --------------------
Award 1-4 20% Vest 20% Vest 20% Vest 40% Vest
Award 6 N/a 25% Vest 25% Vest 50% Vest
Award 7 N/a 20% Vest 20% Vest 60% Vest
Award 8 N/a 25% Vest 25% Vest 50% Vest
Award 9 N/a 20% Vest 20% Vest 60% Vest
Award 10 N/a N/a N/a 100% Vest
Award 12 N/a 17.5% Vest 17.5% Vest 65% Vest
Award 13 N/a 17.5% Vest 17.5% Vest 65% Vest
Award 14 N/a 17.5% Vest 17.5% Vest 65% Vest
Award 15 N/a 12.5% Vest 12.5% Vest 75% Vest
Award 16 N/a 25% Vest 25% Vest 50% Vest
Award 17 N/a 10% Vest 10% Vest 80% Vest
Award 18 N/a 10% Vest 10% Vest 80% Vest
Award 19 N/a N/a N/a 100% Vest
Award 20 N/a N/a N/a 100% Vest
Award 21 N/a N/a 14% Vest 86% Vest
Award 22 N/a N/a 33% Vest 67% Vest
Award 23 N/a N/a 10% Vest 90% Vest
Award 24 N/a N/a N/a 100% Vest
Award 25 N/a N/a N/a 100% Vest
Award 26 N/a N/a N/a 100% Vest
Award 27 N/a N/a N/a 100% Vest
Award 28 N/a N/a N/a 100% Vest
Note 1: Excluding the impact of IFRS16
Award 11 relates to options awarded to Chairman, Bernard Cragg
during 2016. These do not carry any performance obligations and
vest at a point in time. 125,000 options vested on 31 January 2019
and the remaining 125,000 will vest within the first quarter of
2021.
The total charge recognised for the scheme during the twelve
months to 31 December 2020 was GBP2.8m (2019: GBP10.8m). The awards
of the scheme are settled with ordinary shares of the Company.
During the period the Group purchased an aggregate amount of
2,102,250 shares at a total market value of GBP23.7m. The purchased
shares will be held in treasury and in the Group's Employee Benefit
Trust for the purpose of satisfying the exercise of share options
under the Company's Employee Share Option Plan.
Reconciliation of movement in the number of options is provided
below.
Option price Number of
(pence) options
31 December 2019 1/14th 8,853,882
Granted 1/14th 253,750
Exercised 1/14th (1,847,712)
Forfeited 1/14th (319,083)
------------------ -------------- ------------
31 December 2020 1/14th 6,940,837
------------------ -------------- ------------
The following table summarises the Group's share options
outstanding at each year end:
Options Option price Remaining
Reporting date outstanding (pence) life (years)
31 December 2011 5,004,300 1/14th 3.7
31 December 2012 4,931,150 1/14th 4.3
31 December 2013 4,775,050 1/14th 3.3
31 December 2014 8,358,880 1/14th 2.5
31 December 2015 7,557,840 1/14th 2.5
31 December 2016 9,450,183 1/14th 3.2
31 December 2017 10,621,857 1/14th 2.2
31 December 2018 10,808,861 1/14th 1.4
31 December 2019 8,853,882 1/14th 1.0
31 December 2020 6,940,837 1/14th 1.0
------------------ ------------- ------------- --------------
In May 2020, 1.8m outstanding share options held by GlobalData
employees vested in accordance with the EBITDA target being
satisfied under Tranche 2b and approved by the Remuneration
Committee. The Group satisfied all of the share options exercised
using the shares held by the Trust. Movements to the treasury
reserve and retained earnings have arisen on the accounting for the
vesting of the options as detailed in the Statement of Changes in
Equity. This recognises the fact that no current year expense is
incurred, as the vesting of options is a transaction with
shareholders only.
Scheme 2 - 2019 scheme
In October 2019 the Group created and announced a new share
option scheme and granted the first options under the scheme on 31
October 2019 to certain senior employees. Each option granted
converts to one ordinary share on exercise. A participant may
exercise their options subject to employment conditions and
performance targets being met. For these options to be exercised
the Group's share price must reach certain targets. The fair values
of options granted were determined using the Monte Carlo method.
The inputs used in the model were:
-- grant date
-- vesting date
-- performance start and end date
-- expected term
-- risk free rate
-- dividend yield
-- volatility and;
-- share price at date of grant
The awards shall vest based upon the following performance
conditions being satisfied:
-- 100% of the shares subject to the award will vest provided
the compounded annual growth in the Group's TSR performance over
the 5-year performance period is equal to or exceeds 16% per annum
compounded (the "5-Year TSR Target").
-- The 5-Year TSR Target will be measured by taking a base-line
price per share of 830p and comparing it to the sum of the average
closing price of a share derived from the 'official list' over the
period 20 trading days commencing on the business day on which the
Group announces its annual results for the period ending 31
December 2024 and all dividends paid during the performance
period.
To the extent that the 5-year TSR Target has not been met, the
awards will not vest. If any of the events pursuant to the rules
covering 'takeovers and other corporate events' occur during the
performance period or prior to the vesting date, awards shall vest
as follows:
-- Where the 5-year TSR Target has been met at the date of the
relevant event, 100% of the awards shall vest.
-- Where the 5-year TSR Target has not been achieved, but a 16%
compound annual TSR has been met over the period from the
commencement of the performance period, awards shall vest on a
pro-rata basis to reflect the proportion of the performance period
which has elapsed, although the Company shall have discretion to
waive such time pro-rating if they consider it appropriate.
The following assumptions were used in the valuation:
Award Tranche Grant Date Fair Value Estimated Weighted
of Share Exercise Forfeiture Average
Price at Price rate p.a. of Remaining
Grant Date (Pence) Contractual
Life (Years)
--------------- -------------------- ------------- ----------- ------------ --------------
Award 1 31 October 2019 GBP1.58 0.0714p 0% 4.0
Award 2 7 May 2020 GBP4.62 0.0714p 0% 4.0
Award 3 25 May 2020 GBP5.50 0.0714p 0% 4.0
Award 4 23 June 2020 GBP6.12 0.0714p 0% 4.0
22 September
Award 5 2020 GBP6.35 0.0714p 0% 4.0
17 November
Award 6 2020 GBP7.12 0.0714p 0% 4.0
The estimated forfeiture rate assumption is based upon
management's expectation of the number of options that will lapse
over the vesting period and are reviewed annually. Management
believe the current assumptions to be reasonable.
The total charge recognised for the scheme during the twelve
months to 31 December 2020 was GBP1.4m (2019: 0.1m). The awards of
the scheme are settled with ordinary shares of the Company.
Reconciliation of movement in the number of options is provided
below.
Option price Number of
(pence) options
31 December 2019 1/14th 1,400,000
Granted 1/14th 1,625,000
31 December 2020 1/14th 3,025,000
------------------ -------------- ----------
The following table summarises the Group's share options
outstanding at each year end:
Options Option price Remaining
Reporting date outstanding (pence) life (years)
31 December 2019 1,400,000 1/14th 5.00
31 December 2020 3,025,000 1/14th 4.00
------------------ ------------- ------------- --------------
11. Acquisitions
Progressive Content Limited
On 7 May 2020, the Group acquired 100% of the share capital of
Progressive Content Limited for cash consideration of GBP1. The
acquisition was made in order to act as a catalyst for new business
opportunities and to strengthen and support the existing Group.
The amounts recognised for each class of assets and liabilities
at the acquisition date were as follows:
Carrying Value Fair Value Adjustments Fair Value
GBPm GBPm GBPm
Intangible assets consisting of:
Customer relationships - 0.4 0.4
Intellectual property and content - 1.3 1.3
Net assets acquired consisting of:
Cash and cash equivalents 0.1 - 0.1
Trade and other receivables 1.1 (0.2) 0.9
Trade and other payables (2.9) - (2.9)
Deferred tax - (0.2) (0.2)
Fair value of net (liabilities)/ assets acquired (1.7) 1.3 (0.4)
--------------------------------------------------- ----------------- ------------------------- -------------
The goodwill recognised in relation to the acquisition is as
follows:
Fair Value
GBPm
Consideration -
Plus net liabilities acquired 0.4
---------------------------------- ----
Goodwill 0.4
---------------------------------- ----
In line with the provision of IFRS 3, 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. The goodwill
that arose on the combination can be attributed to the assembled
workforce, know-how and research methodology.
The Group incurred legal expenses of GBP2,000 in relation to the
acquisition. In the period from the date of acquisition to 31
December 2020, the trade of Progressive Content Limited generated
revenues of GBP2.2m and loss before tax of GBP1.7m.
Progressive Content Limited was an entity under common control
at the time of acquisition, by virtue of being controlled by Mike
Danson. IFRS 3 scopes out combinations of entities under common
control. The Group has therefore applied IAS 8 'Accounting
Policies, Changes in Accounting Estimates and Errors' and used
management judgement in developing and applying an accounting
policy that results in information which is reliable and relevant.
Management have determined it is most appropriate to follow the
principles of IFRS3,and apply acquisition accounting for
acquisitions of entities under common control.
Cash Cost of Acquisitions
The cash cost of acquisitions comprises:
31 December 2020
Unaudited
GBPm
Acquisition of Progressive Content Limited:
Cash consideration -
Cash acquired as part of opening balance sheet (0.1)
Deferred consideration payment CHM Research Limited 0.7
Deferred consideration payment Competenet 0.4
1.0
------------------------------------------------------- -----------------
12. Related party transactions
Mike Danson, GlobalData Plc's Chief Executive, owns 64.9% of the
Company's ordinary shares as at 1 March 2021. Mike Danson owns a
number of businesses that interact with GlobalData Plc. The
principal transactions, which are all conducted on an arm's length
basis, are as follows:
Accommodation
GlobalData Plc rents three buildings from Estel Property
Investments Limited, a company wholly owned by Mike Danson. The
total rental expense, including service and management fees, in
relation to the buildings owned by Estel Property Investments for
the year ended 31 December 2020 was GBP2.9m (2019: GBP2.7m). In
addition, GlobalData Plc sub-leases office space to other companies
owned by Mike Danson. The total sub-lease income for the year ended
31 December 2020 was GBP1.3m (2019: GBP1.3m). This is presented as
other income on the face of the Income Statement.
Corporate support services
Corporate support services are provided to and from other
companies owned by Mike Danson, principally finance (payroll
services), 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 and headcount for human
resources, finance and IT services. The net recharge made from
GlobalData Plc to these companies for the year ended 31 December
2020 was GBP0.4m (2019: GBP0.6m).
Loan to Progressive Trade Media Limited
As part of the 2016 disposal of non-core B2B print businesses,
the Group made a loan to Progressive Trade Media Limited to fund
the purchase consideration. This loan is for GBP4.5m and repayable
in 5 instalments, with the next instalment due in January 2022
(fourth instalment received in January 2021). Interest of 2.25%
above LIBOR is charged on the loan, with GBP0.1m charged in the
year ended 31 December 2020 (2019: GBP0.1m).
Revenue contract containing IP sharing clause
In June 2020 the Group entered into a 5-year service contract
with NS Media Group Limited, an entity related by virtue of common
control. The agreed suite of data services provided to NS Media
Group Limited have been contracted on terms equivalent to those
that prevail in arm's length transactions. A key clause within the
contract enables the Group to retain ownership of all IP internally
generated during the contracted period. Similarly, NS Media Group
Limited also are entitled to retain and perpetually use the IP
generated. In the year ended 31 December 2020, the total revenue
generated from this contract was GBP0.8m, and the net contribution
generated was GBP0.5m. Each years' fixed fees are invoiced annually
in advance, except for any variable components which are invoiced
quarterly in advance. In addition to the IP and content, there are
other shared costs such as software development and webinar
production with NS Media Group, for which GlobalData received a
charge of GBP0.4m.
As at 31 December 2020, the total balance receivable from NS
Media Group Limited was GBPnil. 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 GBPnil.
Directors and Key Management Personnel
The remuneration of Directors will be disclosed within the
Directors' Remuneration Report within the Annual Report and
Accounts for the year ended 31 December 2020.
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:
No trading balances were outstanding at the year end (2019:
nil).
Non-Trading Balances
31 December 2020 31 December 2019
Amounts due in greater than one year: Unaudited Audited
GBPm GBPm
Progressive Trade Media Limited 0.9 1.9
0.9 1.9
--------------------------------------- ----------------- -----------------
31 December 2020 31 December 2019
Amounts due within one year: Unaudited Audited
GBPm GBPm
Progressive Trade Media Limited 0.9 0.9
0.9 0.9
--------------------------------- ----------------- -----------------
Acquisition
On 7 May 2020, the Group acquired 100% of the share capital of
Progressive Content Limited for cash consideration of GBP1. Because
of the common ownership of Mike Danson, this acquisition is a
related party transaction under IAS 24. The transaction was
overseen by an independent committee of the Board. Further details
is given in note 11.
Other
As explained in the financial review and note 9, following the
year end the Directors became aware that distributions made during
2019 and 2020 to the Employee Benefit Trust and shareholders (the
"Relevant Contributions") did not comply with the requirements of
section 838 of the Companies Act, due to interim accounts not
having been filed with Companies House prior to the Relevant
Contribution being made.
In order to correct the position, the Company will file interim
accounts with Companies House in advance of the Annual General
Meeting to demonstrate sufficient reserves. At the Company's Annual
General Meeting, on 20 April 2021, the Company shall propose a
resolution to remove any right the Company may have to claim from
Directors and Shareholders in respect of the relevant contributions
and distributions. The deed of release to Directors and
Shareholders will constitute a related party transaction under IAS
24. No accounting entries need to be made to correct the position
and the resolutions, if passed, will remedy the matter.
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END
FR SELEDAEFSELE
(END) Dow Jones Newswires
March 01, 2021 02:00 ET (07:00 GMT)
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