Building trust
in a digital world
Annual Report and Accounts 2024
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From the world's largest banks and eCommerce giants to the
best-known household brands, we ensure businesses can reach
and trust their customers in more than 70 countries worldwide.
Our purpose
To build trust in a digital world
Our vision
To create a world where
everyone can transact online
with confidence
To read our wider
investor material:
www.gbgplc.com/
en/investors/
Learn more about our
solutions at:
www.gbgplc.com/
Read our first ESG
Impact Report.
Available at:
www.gbgplc.com/
en/investors/
environmental-
social-and-governance/
Annual Report 2024
Strategic Report
Governance
Financial Statements
01
Contents
Strategic Report
Welcome
03
GBG at a glance
04
Chair’s statement
06
CEO Q&A with Dev Dhiman
08
CEO’s review
09
Our markets
13
Our strategy
14
Our business model
15
Stakeholders
16
Location
17
Identity Fraud
19
Section 172 statement
21
Environment, Social and Governance (ESG) overview
23
Our emissions
25
Non-financial and sustainability information statement
26
Key performance indicators
30
Financial review
32
Principal risks and uncertainties
36
Financial Statements
Independent auditor’s report to the
members of GB Group plc
87
Consolidated statement of profit or loss
91
Consolidated statement of comprehensive income
92
Consolidated statement of changes in equity
93
Consolidated balance sheet
94
Consolidated cash flow statement
95
Notes to the consolidated financial statements
96
Company balance sheet
138
Company statement of changes in equity
139
Notes to the Company accounts
140
Non-GAAP measures
149
Company information & advisors
153
Governance
Letter from our Chair
47
Board of Directors
48
Governance at a glance
50
Governance framework
51
Summary of Board activity
52
Corporate Governance statement
53
Audit & Risk Committee
56
Remuneration Committee
61
Remuneration policy
64
Annual report on remuneration
69
Nomination Committee
75
Environment, Social and Governance (ESG) Committee
81
Directors’ report
83
Directors’ responsibility statement
86
Annual Report 2024
Strategic Report
Governance
Financial Statements
02
For an update on our
financial and operational
performance this year
Read more on pages
9 to 12
Welcome
1. Alternative performance measures (‘APMs’) are used consistently throughout this document and are referred to as ‘adjusted’.
These measures are defined in full and reconciled to the reported statutory measures on pages 149 to 152 to the accounts.
2. Reflecting exceptional costs of £59.6m which includes a £54.7m non-cash goodwill impairment charge (FY23: £127.2m which
includes a £122.2 million non-cash goodwill impairment charge as explained further within the financial review on page 34 and
in note 16 to the accounts.
£277.3m
Revenue
FY24
FY23
£277.3m
£278.8m
98.1%
Net revenue retention %1
FY24
FY23
98.1%
92.3%
£61.2m
Adjusted operating profit1
FY24
FY23
£61.2m
£59.8m
£(41.4)m
Operating (loss)/profit2
FY24
FY23
£(41.4)m
£(112.4)m
22.1%
Adjusted operating profit
margin1
FY24
FY23
22.1%
21.5%
15.1p
Adjusted diluted
earnings per share
FY24
FY23
15.1p
16.4p
90.6%
Cash conversion1
FY24
FY23
90.6%
67.3%
£(80.9)m
Net debt¹
FY24
FY23
£(80.9)m
£(105.9)m
4.20p
Final dividend per share
FY24
FY23
4.20p
4.00p
Understand our strategy to
deliver profitable growth
Read more page 14
Read about how we
operate sustainably to
deliver value today and
for future generations
Read more on pages
23 to 25
There is an enduring
opportunity across our
markets
Read more on page 13
We are the leading
experts in global
identity and location
In an increasingly digital world,
we help businesses grow by
giving them intelligence to make
the best decisions about their
customers, when it matters most.
Every second, our global data,
agile technology, and expert
teams, power over 20,000
of the world's best-known
organisations to reach and
trust their customers.
Strategic Report
Governance
Financial Statements
Annual Report 2024
03
Competitive differentiation is driven through a solid platform
based on our highly relevant capabilities:
Structural growth is accelerated by developments such
as AI, which increase the market opportunity:
We optimise consumer onboarding and life cycle with
our solutions providing capabilities such as:
39% Financial services
11% Retail
10% Gaming
8% Technology
4% Public sector
4% Prof. services
3% Travel
21% Other
33% USA
30% UK
19% APAC
12% Europe
6% Rest of World
Complete confidence through
multi-layered protection
Key structural growth trends
driving our business
Creating trust across diverse
sectors and regions
GBG at a glance
Helping businesses to reach and trust their customers
We are well-positioned in attractive markets around the world that are
underpinned by structural growth.
We work behind the scenes to enable businesses globally to reach and trust their customers with complete
identity and location confidence, based on multi-layered protection with privacy and security at their core.
Digital transformation
Industrialised fraud &
financial crime
Regulation and increasing
compliance
Address capture & verification
Data-led identity verification
Identity document proofing
Fraud protection
Identity investigation
Revenue
by sector
Revenue
by region
Agile Technology
Expertise
Customer experiences
Global Data
Strategic Report
Governance
Financial Statements
Annual Report 2024
04
Identity
Fraud
Location
GBG today
We operate Location and Identity Fraud, two complementary and global lines
of business reported through three segments: Location, Identity and Fraud.
As our markets evolve at pace, there is an increasing convergence of our trust-building solutions across the identity
lifecycle to help our customers make decisions relating to the individuals using their products and services.
Primarily delivering fraud prevention and
investigation solutions that offer real-time
protection and regulatory compliance against
modern-day financial crimes, primarily in the APAC
and EMEA markets.
Enabling our global customer base to build trusted
relationships through our rich portfolio of data and
document identity verification solutions that deliver
strong match rates to onboard good individuals and
prevent the growing impact of origination fraud.
A market leader in providing location capturing, verifying
and enriched address data globally to deliver the precision
required for a seamless online user experience, enhance
data quality, increase conversion rates and help ensure
accurate deliveries.
29% of Group
9% Consumption
90% Subscription
1% Services & hardware
£81.1m
56% of Group
61% Consumption
33% Subscription
6% Services &
hardware
15% of Group
4% Consumption
87% Subscription
9% Services &
hardware
Why
customers
choose us
How we
operate
FY24
revenue
1. Global coverage
2. Subpremise-level data
3. Best address records
4. Unlimited addressing experience
1. More accurate onboarding decisions
2. Verify hard-to-identify customers
3. Customisable onboarding journeys
4. Increased protection from fraud
Helping our customers to build trust with their
customers
Helping our customers to reach
their customers
Read more about Location on pages 17 and 18
Read more about Identity Fraud on pages 19 and 20
£156.0m
£40.2m
GBG at a glance continued
Strategic Report
Governance
Financial Statements
Annual Report 2024
05
As GBG’s Chair, I am pleased to
report that FY24 has been a year
of strong strategic progress and
operational efficiency. My Board
colleagues and I have focused
on delivering sustainable
shareholder value, and we are
pleased with the significant
efforts by the GBG team in the
year, delivering £10 million of
annualised cost-savings which
underpins the 8% increase in
our adjusted operating profit,
the highest level achieved by
the Group to date. I believe this
focus on simplicity and cost-
effectiveness will deliver long-
term benefits as it has enabled
investment to be maintained
in the Group’s market-leading
solutions.
Reflecting on our Group revenue growth this
year, both Location and Fraud achieved good
growth and Identity was broadly flat, however,
it was pleasing to see the Group return to
mid-single-digit growth in the final quarter of
the year. This was driven by an acceleration
in Identity and we are encouraged by the
operational momentum that we carry into FY25.
More detail on trading performance is provided
in our CEO's Review and Financial Review.
One of the important Board decisions this year
related to the CEO transition. I want to take
this opportunity on behalf of the Board and
the GBG team to extend our sincere thanks to
Chris Clark, who retired at the end of January.
His significant contribution over seven years
has transformed GBG from a UK-centric
business to a global leader in digital identity
software. Throughout a rigorous selection
process for Chris’ successor, Dev Dhiman
stood out as a proven people leader with a
strong track record of success. Dev’s sector
experience and his years at GBG make him the
right choice to lead the Group through the next
phase of its evolution.
Strategic focus
Innovation within GBG is crucial to enhancing
the level of reach and trust that can be
established by our customers and partners with
their end customers. It creates the competitive
differentiation that enables GBG’s solutions
to remain at the forefront of a competitive
market. The Group as a whole is underpinned
by structural growth, notably enduring trends
for digitalisation, increasing regulation and
the need to optimise customer experiences,
alongside the unprecedented pace of
generative AI adoption, whose sophistication
undoubtedly brings benefits while also
introducing new risks as bad actors use this
technology to commit more complex fraud.
GBG is well-placed to benefit from these
evolving market dynamics. Our layered
approach to our solutions is already augmented
by AI and machine learning capabilities that
we have developed over the last decade. We
are confident our business model, expertise
and financial strength mean we can pursue
profitable growth and expand our role as an
enabler of trust for the customers we serve.
Our people
The Board appreciates the ongoing dedication
and efforts of our teams globally. Throughout
the year, either through interactions with our
valued customers or with each other at internal
events, our strong and supportive culture has
been consistently demonstrated, reinforcing
why GBG has one of the identity industry’s
most engaged and expert teams. This level
of engagement is not taken for granted and
reflects a sustained effort and wealth of
experience that is not easily replicated.
Chair’s statement
I hope that this report
will demonstrate how our
strategy for profitable
growth will be driven by
the unique combination
of our global data, our
agile technology and team
expertise at the core of all
our solutions.
Strategic Report
Governance
Financial Statements
Annual Report 2024
06
Delivering on our ESG
commitments
GBG plays a crucial role as an enabler of
trust and compliance between customers
and their consumers in the digital world. Our
future product roadmap will drive innovation to
enable greater inclusivity within digital identity
verification that will empower more consumers
to transact online with confidence.
More broadly, the Board supports the
overriding importance of integrating
Environmental, Social and Governance
(ESG) matters into our everyday activities
for the benefit of all our stakeholders. This
year we have taken steps to build on our
stretching commitments which will positively
impact society. In particular, we committed
to set externally validated, science-based
near-term and net zero targets, while also
achieving a meaningful reduction in our office
emissions footprint through targeted action.
We also conducted our first climate-related
scenario analysis project this year, helping
us understand how we could be impacted by
climate change and the steps we can take in
mitigation.
Board and governance matters
As a company committed to corporate
governance, we hold ourselves to the highest
standards set out in the Quoted Companies
Alliance Corporate Governance Code. My role
as Chair alongside my Non-Executive Board
colleagues is to create an environment that
provides appropriate challenge and support
to the Executive Directors, and I believe the
governance framework allows the Group
to pursue its strategy effectively and with
appropriately managed risk. Our approach to
these responsibilities is set out in the Corporate
Governance Statement on pages 53 to 55.
The non-executive members of the Board have
also continued to evolve; following a thorough
recruitment process, we were pleased to
welcome Michelle Senecal de Fonseca, an
experienced executive and non-executive
director in the technology industry, as a Non-
Executive Board member. Furthermore, we
also announced that Natalie Gammon would
step down as Non-Executive Director and Chair
of both Remuneration and ESG Committees
after the next Annual General Meeting ('AGM').
The Board appreciates Natalie’s expertise,
professionalism and commitment since joining
in 2019, notably for her additional roles as ESG
and Remuneration Committee Chair. Natalie
will be succeeded in these roles by Michelle,
who will also be a member of our Audit & Risk
and Nomination Committees.
The composition of the Board will continue
to be reviewed regularly and I will always
consider further opportunities to enhance its
breadth and skills as we shape the business in
a way that represents the world that we live in.
Having spent considerable time on succession
planning and Board evaluation, I am confident
we move forward with a Board that continues
to have the appropriate balance of skills,
experience and diversity required to support
the business and drive forward its strategy, and
I am grateful to each Director for their time and
commitment to GBG.
Capital allocation
Our disciplined and balanced approach to
capital allocation is an important priority for the
Board. We are focused on enabling sustainable
and profitable growth, while the Group’s strong
cash generation and balance sheet capacity
will provide flexibility to respond to market
opportunities as they arise. We lay this out in
the context of our Strategy on page 14.
Our progressive dividend policy reflects the
Board’s confidence in the Group’s financial
strength and ability to deliver growth. This year
we are recommending a final dividend of 4.20
pence per share, a rise of 5% on the previous
year. If approved, this would represent the 17th
consecutive year the final dividend payment
has increased. Subject to shareholder approval
at our AGM, it will be paid on 2 August 2024 to
shareholders on our register by 21 June 2024.
Summary
As a Board, we are confident GBG is a high-
quality business with the capability to execute
the long-term opportunities in its markets and
deliver value for all stakeholders. This year,
the business has navigated near-term issues
impacting growth and increased the focus on
profitability which has created momentum into
FY25 with a strong financial position and a
talented team motivated for success.
Finally, we appreciate your support as
shareholders; it is a privilege for me and my
fellow Board members to be part of GBG’s
journey, helping to guide the Company’s
strategy as we work with a clear purpose to
build trust in a digital world.
Richard Longdon
Chair
10 June 2024
Our 2024 AGM
GBG will host its AGM on 23 July 2024
at which shareholders can attend in-
person to participate in the meeting, ask
questions and vote. This will be held in
London at 10:00am (BST).
As you will read in the Notice of AGM
published alongside this Report, we
are putting 14 resolutions to vote at our
2024 AGM. The Notice of AGM includes
detail on a special resolution related to a
proposed share capital reduction. GBG
is proposing to cancel the entirety of its
share premium account in order to create
distributable reserves that will be available
to increase flexibility for the future
payment of dividends to shareholders
and for any other general corporate
purposes, subject always to the financial
performance of GBG.
The Board considers the resolutions
being proposed at the AGM to be in the
best interests of both the Company and
the shareholders as a whole. We ask our
shareholders to support these resolutions,
your Board of Directors, and various other
business matters on which you are asked
to vote.
Read more in our Notice of AGM
Chair’s statement continued
Strategic Report
Governance
Financial Statements
Annual Report 2024
07
Q Since you assumed the CEO role in
January, what has been some of
your first impressions of the broader
business?
A Its an exciting time to become CEO of
GBG. We are well-positioned to deliver
profitable growth in a market with long-
term structural drivers. As our customer’s
identity challenges grow, our market-
leading solutions deliver value, speed
and scale through a complete identity
onboarding experience. Our team is
exceptional. I've had the pleasure since
January of meeting more of our people
worldwide, witnessing their expertise,
energy, and enthusiasm first hand. Our
customers echo this sentiment through
their positive feedback and our impressive
Voice of Customer satisfaction scores.
While we’ve experienced a period of lower
growth, our focus on cost effectiveness
maintained profitability. I am confident
our trajectory back to sustainable growth
will continue to be supported by ongoing
product innovation and our ability to
execute at scale. I'm proud to say that
every second, our resilient platforms
enable our customers to grow and reach
their customers, be that high profile sports
events to the big online shopping dates
such as Black Friday.
Q What gives you confidence that GBG
can pursue improved growth in the
markets you are operating in?
A Our confidence in driving near-term growth
to mid-single digits is underpinned by
our current momentum which saw group
growth of 5.0% in the final quarter of
FY24, driven by Identity as anticipated.
While the timing is hard to forecast, we also
expect as the macroeconomic backdrop
stabilises, business confidence will return
and act as a further tailwind to our growth
dynamics. Over the mid-term, two elements
will enable GBG to accelerate growth; our
ongoing ability to win new business, and
returning net revenue retention (NRR) to
historic levels. In FY24, both Location and
Fraud delivered good growth, while Identity
was broadly flat, as a result of transaction
volume reductions at existing customers
due to sector-specific impacts and the
broader macroeconomic slowdown which
impacted this year's NRR.
Q What are your key priorities
into FY25?
A In my first few months I have travelled
across our business and the time I have
spent out with our people and customers
has given me a good understanding of
what we need to drive future success.
Looking to FY25, by prioritising competitive
differentiation and a high-performance
culture, we will ensure GBG capitalises
on the exciting market opportunity ahead.
We have four key focus areas that support
a clear strategy to drive success across
all our markets. Firstly, simplifying our
ways of working to enhance clarity for our
people, customers, and investors, ensuring
a deeper understanding of our business
and the value we offer. Secondly, aligning
globally as one cohesive entity will allow
us to leverage our size and maximise our
relationships with over 20,000 customers.
Thirdly, fostering a high-performance
culture within our team, focused on winning
and differentiation. And finally, prioritising
innovation aimed at delivering tangible
value to our customers, through our
proprietary market-leading solutions.
CEO Q&A with Dev Dhiman
About Dev
Dev was appointed as Chief Executive
Officer (CEO) in January, having joined
GBG as Managing Director, APAC in 2020.
During that time, our APAC business
has consistently delivered year-on-year
revenue growth and Dev demonstrated
excellent leadership qualities aligned
with GBG's people-focused culture to
deliver that performance. Prior to GBG,
he spent 12 years at Experian, where he
held a variety of senior positions, building
considerable knowledge and experience
of the sector and the markets in which
GBG operates.
Looking to FY25, by
prioritising competitive
differentiation and a high-
performance culture, we
will ensure GBG capitalises
on the exciting market
opportunity ahead.
Strategic Report
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Financial Statements
Annual Report 2024
08
I wanted to use this first
opportunity as CEO to update
you on our performance in FY24,
and then outline my thoughts
on GBG today together with
our focus areas as the Group
evolves.
Summary
In an increasingly digital world, GBG exists
to help businesses and organisations grow
by giving them the intelligence to make the
best decisions about their customers, when
it matters most. We are consistently set apart
by our global reach and our ability to serve
industry-specific solutions across a range of
sectors. Our combination of global data, agile
technology, and expertise, powers over 20,000
organisations, including the best-known global
brands. We help those organisations to reach
and trust their customers across a number of
the most attractive markets globally, which are
underpinned by favourable structural trends –
providing GBG with a long-term, sustainable
runway of growth.
Reflecting on FY24, we are pleased to have
successfully executed our financial plan for the
year. Our strategic progress on simplification
and cost-effectiveness delivered £10 million
of annualised savings enabling GBG to be
a more resilient and profitable business
with the capacity to capitalise on our future
growth opportunities. As expected, our overall
growth in FY24 remained constrained by two
significant headwinds to our transactional
volumes; first, the subdued macroeconomic
conditions impacted consumer demand, and
second, changes in consumer behaviours
within the internet economy.
While macroeconomic conditions remain
subdued, we have seen our growth trajectory
improve during the second half of FY24
resulting from a partial reacceleration in
Identity as consumer behaviour normalised
and I am encouraged by the operational
momentum that we now carry into FY25. Net
revenue retention (NRR) improved by 580 basis
points to 98.1% and we were also pleased
with a further improvement in revenue growth
generated from new customers.
CEO's review
Our high absolute customer retention rate
and our flexible business model featuring high
levels of repeatable revenue means we are
well-placed as business confidence returns,
both through improved top-line growth and
the operating leverage arising from the cost
savings we delivered.
Strong strategic progress has also been
delivered this year. We launched innovative
products that further enhance our leadership
in the identity fraud market, such as GBG Trust
and Score to optimise the onboarding journey.
In Location, we scaled up the deployment of
our AI-parsing and deep-learning technology
to seventeen more countries to increase our
industry-leading performance in emerging
markets. More broadly, a greater emphasis on
collaboration and global alignment is ensuring
that we can appropriately leverage our scale
and expertise for commercial success. This
includes strengthening our Americas Identity
business in go-to-market, sales enablement
and product to more effectively pursue the
large market opportunity, and we are pleased
by the improvement seen in that business as
a result of our actions to date.
In summary, we are pleased with the financial
and strategic progress delivered in FY24,
particularly the stronger final quarter in
Identity. Our achievements demonstrate the
focus, tenacity and effort of the GBG team
during the year and I thank them all for their
hard work and dedication to our customers.
I am excited about what we will achieve
together in FY25.
Reflecting on FY24, we
are pleased to have
successfully executed our
financial plan for the year.
Strategic Report
Governance
Financial Statements
Annual Report 2024
09
Financial results overview
Both revenue and adjusted operating profit
are in line with the trading update released
on 23 April 2024.
Group revenue of £277.3 million grew by 2.7%
on a constant currency basis. This reflects
improving net revenue retention (NRR) of
98.1% compared with 92.3% in FY23 and
a further improvement in revenue growth
generated from new customers won in the last
12 months to 4.6% (FY23: 4.5%).
Despite our high levels of absolute customer
retention, revenue growth opportunities
continued to be impacted by transaction
volume demand linked to the two specific
headwinds mentioned earlier which impacted
our year-on-year comparison. However, as
consumer behaviour normalised, the headwinds
related to certain internet economy customers
abated as we moved through the year, and
it was pleasing to see growth accelerate to
5.0% in the final quarter of FY24 driven by our
Americas and EMEA identity businesses.
As a result of the subdued macroeconomic
environment in which to drive top-line growth,
we have been particularly focused on execution
to drive the Group’s profitability. These
initiatives to deliver increased simplicity and
cost-effectiveness have balanced delivering
growth in returns for shareholders and the need
to invest and optimise our core solutions in a
competitive market.
We have made excellent progress with these
initiatives, which began during FY23 and have
achieved an annualised run-rate reduction
in operating expenditure of £10 million. This
has contributed to an adjusted operating
profit growth, excluding net gains on foreign
exchange, of 8.0% to £61.4 million, with our
operating profit margin on that basis expanding
by 170bps to 22.1%.
On a reported basis there was an operating
loss of £41.4m, caused by the £54.7 million
exceptional non-cash goodwill impairment
charge that was recognised in the first half.
Our cash conversion normalised at 90.6%
(FY23: 67.3%) which contributed to a good
reduction in the Group’s net debt to £80.9
million at 31 March 2024 (31 March 2023:
£105.9 million) and net debt to EBITDA
leverage below 1.3x as expected. While our
near-term capital allocation priority is to use
cash generation to reduce net debt, the Board
remains committed to a disciplined approach
to capital allocation that focuses on delivering
long-term shareholder value. As a result of our
strong cash performance and its confidence in
GBG’s enduring market opportunity, the Board
recommends a final dividend per share of 4.20
pence (FY23: 4.00 pence per share), which
represents a year-on-year increase of 5.0%.
Our segmental performance
Location (29% of the Group’s revenues)
Location had another good year; revenue was
up 7.3% on a constant currency basis to £81.1
million as the business continued to perform
resiliently. We successfully mitigated the
impact of softer transactional volumes from
our e-commerce customers by driving go-to-
market activity on expanding the relevant use
cases into a diverse sector and geographic
footprint such as financial services, utilities,
telecoms and via channel partners.
Notable customer success:
• Capturing growing demand from our large and
diverse customer and partner base, including
HelloFresh, Aldi, Santander and Reltio
• Supporting retail customers such as New
Balance, Kurt Geiger, Neiman Marcus and
Marc Jacobs
• Facilitating the customer checkout journey
for some of Asia’s largest e-commerce
marketplaces to enhance address accuracy
as they experience growing cross-border
demand
CEO's review continued
Identity (56% of the Group’s revenues)
Revenue of £156.1 million represents a small
0.7% decline on a constant currency basis,
in line with our expectations for Identity this
year. A strong performance in our APAC
identity business driven by financial services
and partner activity in Australia was offset by
tough prior-year comparatives for the first three
quarters of the year in the Americas, reflecting
the trends discussed earlier. As expected,
year-on-year growth accelerated by mid-
single-digits in the fourth quarter as a result
of improving trends in both our EMEA and
Americas businesses. Our absolute customer
retention rate remained strong in a period when
usage volumes remained subdued, and we are
pursuing a more globally aligned approach to
cross-sell/up-sell opportunities that leverages
the competitive differentiation of our solutions
to deliver improved onboarding success,
identity fraud detection and customer return
on investment.
Notable customer success:
• Demonstrating an increased focus on identity
fraud detection, Floa chose our mobile fraud
signal solution with an upsell to our fraud
monitoring capabilities and, Tide selected our
Multibureau and Trust solutions
• Customers leveraging our global expertise
include AIG, Atlantic Lottery, Currencies
Direct and SumUp who all utilised our
expanded international data coverage while
investment platform, Webull, chose GBG as
its end-to-end onboarding partner in EMEA
and APAC
• In the Americas gaming, where changes in
regulation continue to create opportunity for
GBG, we had success with customers such as
ESPNBET and Bally's
FY24
FY23
Change %
Constant
currency
change %
Revenue
£277.3m
£278.8m
(0.5)%
2.7%
Adjusted operating profit excluding FX
gain
£61.4m
£56.8m
8.0%
Adjusted operating margin excluding FX gain
22.1%
20.4%
Net gain/(loss) on foreign exchange
£(0.2)m
£3.0m
Adjusted operating profit
£61.2m
£59.8m
2.3%
Strategic Report
Governance
Financial Statements
Annual Report 2024
10
Fraud (15% of the Group’s revenues)
Revenue for our fraud prevention, detection
and investigation solutions grew by 7.8% at
constant currency to £40.2 million. This was
underpinned by licence renewals, upgrades
and new business wins with leading financial
institutions in this segment’s core Southeast
Asia and EMEA markets, albeit sales of
software licences slowed in the final quarter of
FY24 after two strong years of growth. In these
markets, our solutions have an established
reputation and play a critical part in our
customer’s compliance ecosystems, helping
them monitor rapidly evolving fraud threats
and comply effectively with new regulatory
standards.
Notable customer success:
• Agreements for our fraud monitoring
solutions in Indonesia include Bank Syariah
and Bank Ina Digital and in Thailand with
TMBThanachart Bank and Kiatnakin
Phatra Bank
• Nordic-focused Express Bank who upgraded
to our fraud compliance platform
• Robust demand for our specialist fraud
investigation capabilities in the UK includes
emerging use cases working with one of
the UK’s leading transport firms to support
revenue protection on its network and
supporting UK Companies House with
investigations related to new Economic
Crime legislation
Our focus areas
GBG is a high-quality business with a proven
track record of delivering profitable growth
and a reputation for addressing our customers’
complex identity challenges. Through our
expertise and innovation, we have developed
strong competitive differentiation that
underpins our leadership positions across
our markets.
Since becoming CEO at the end of January, my
interactions with our team and our customers
and partners has reinforced why I’m excited
about GBG’s strategic position in a growing
market. That said, I recognise there is scope for
performance improvement, and my overriding
objective is to improve the organic growth rate
for the business. This has directly informed our
initial focus areas:
Simplicity: We believe our success will have
its foundation in being a simple and efficient
organisation and we were pleased that cost
initiatives executed in FY24 delivered £10
million of annualised savings. Building on this,
simplicity will support our push to be globally
aligned, to develop better innovation, and to
drive a performance culture. By operating
simply, we will drive change to make GBG
easier to work with, easier to understand, and
easier to prosper within.
We have structured global teams to better
focus on our priorities, and we will continue
to simplify our product portfolio to optimise
our investments to increase the effectiveness
and innovation of our solutions. We are also
streamlining commercial processes, making it
easier for customers to engage with us, with
a key example being a brand refresh. This is
designed to enable our teams to communicate
our value proposition more clearly to key
stakeholders, creating a richer understanding
of who we are and what we offer.
Being globally aligned: While our Location
business has been run globally for some time,
we are continuing to drive towards greater
alignment through the implementation of a
global operating model for our Identity Fraud
activities. In our core regions, we are often
solving similar complex challenges and there
is still further opportunity to work more closely
with greater consistency to become a stronger
and faster organisation that stands out in all
the markets we serve.
We are bringing our identity and fraud
capabilities closer together, with our Chief
Product Officer leading a more centralised
approach to development and innovation.
By exploiting our size and scale as one of
the largest providers in the market, we will
leverage common identity fraud platforms
and capabilities to serve our customers
worldwide through localised solutions. We are
also benefiting from being more commercially
effective by managing key suppliers and
reducing duplication of investment with a build-
once approach. An example is being able to
offer our customers increased performance by
delivering our improved international data sets,
developed in our EMEA Identity business, to
customers around the world.
A newly created role of Head of Market
Development is focused on leading our global
go-to-market strategy and sales enablement
across our Identity Fraud activities working
closely with our regional leaders. This approach
will improve effectiveness and pace across
our sales and marketing cycle. We are already
seeing the benefits of this approach in our
Americas Identity business.
Since assuming the role of
CEO at the end of January,
my interactions with our
team and our customers
and partners reinforce why
I’m excited about GBG’s
strategic position in a
growing market.
CEO's review continued
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Driving a performance culture: As we make
progress towards building a simpler and more
efficient organisation focused on growth,
we expect to create momentum across the
business that enhances the experience for
our customers and builds on a culture that
differentiates us. Across all areas of the Group,
we will increase the emphasis on performance
delivery from the significant talent within the
GBG team, which has seen over 130 team
members promoted this year to expanded roles.
We have also implemented a high-performance
development programme for key sales and
product leaders globally and embedded
performance initiatives that celebrate the
collaborative success of the team.
GBG has always had a strong focus on team
member engagement, and this will not change
as we evolve. Our latest Gallup survey resulted
in 90% of the team recommending GBG as a
great place to work (FY23: 93%) with a total
participation rate of 92%. We did expect to
see a moderation in this score versus the prior
year given the level of change and focus on
efficiency during the last 12 months. Strong
team engagement is directly correlated with
satisfied customers, and we were particularly
pleased to see our latest Net Promoter Score
(NPS) of 50, our highest to date and a 19%
increase year on year in a period when we
expanded our NPS monitoring globally.
Differentiation through innovation: Meeting
the evolving needs of customers will be crucial
in maintaining our competitive advantage
and accelerating our growth through value-
added activities that increase the intelligence
provided to support a customer’s decision-
making. Our GBG Score solution is facilitating
discussions with customers to understand
the confidence they can place in their current
onboarding journey. This complements GBG
Trust, our proprietary identity fraud network
to stop fraud at the point of onboarding.
Customers across sectors have contributed
more than 50 million identity records into the
network to help onboard consumers more
quickly, differentiate their journey based on a
‘trust’ score and share insight on bad actors.
We have extensive experience deploying AI
and machine learning. Advances in technology
and our product portfolio, such as the Trust
network, mean AI will continue to be a
key focus. Product highlights include new
computer vision and machine learning models
within our document & biometric capabilities,
delivering a 4.5x improvement in match rate
performance as well as enhancements to our
document tamper detection. We also improved
our location intelligence using deep learning
models and data parsing to increase match
results by up to 17% in emerging markets. At
the same time as we make significant progress
enhancing extensive AI capabilities to augment
our products, we are extending its use across
our broader business operations for improved
productivity to provide an exceptional end-
to-end customer experience from setup to
support.
Outlook and summary
GBG is a high-quality business with market-
leading positions in the key sectors and
geographies we operate. We have good
momentum to continue our journey of building
one of the largest identity and location players
in the market through the evolution of our
strategy to concentrate and exploit the most
attractive market growth opportunities, with
a relentless focus on delivering shareholder
value.
Our focus on identity onboarding supports our
customers in managing this critical stage of a
customer lifecycle to help them grow and build
long-term trusted relationships. Products such
as GBG Trust reinforce our strength in this
market as the digital transformations of our
customers progress and the world continues to
face exponential growth in the threat of fraud.
The new financial year has begun in-line with
our expectations, with improved momentum in
Identity and Location continuing from the final
quarter of FY24. The Board is confident GBG
will deliver mid-single-digit revenue growth,
on a constant currency basis, which will drive
high single-digit growth in adjusted operating
profit. As we look further forward, the Board
remains confident that GBG has the market
position, technology leadership and business
model to capitalise upon the significant growth
opportunities ahead, delivering significant and
sustainable shareholder value
Dev Dhiman
Chief Executive Officer
On behalf of the Board
10 June 2024
CEO's review continued
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Digital
transformation
• A continued shift to digital commerce in daily
life, with 1.4 billion new internet users in the last
five years (two-thirds of global population)
• Adoption of Generative AI beginning to drive
transformative change in our digital experiences
Source: Statista.
Financial services: High touch,
high frequency interactions
build brand equity
Retail: Use of digital
interactions to drive people
into physical stores
Gaming: Increasing number
of digital promotions drive
customer acquisition
Online Retail: Increasing
cross-border eCommerce
• The size of our markets continues to grow, we are well
placed benefit as our identity and location customers
increasingly deliver more activity online
• Promotions drive ‘bonus abuse fraud’ which creates
opportunities for solutions such as GBG Trust, to help
identify individuals conducting this fraud
Industrialised
fraud and
financial crime
• Fraud is a growing and cross-industry concern.
During 2023, 55% of global businesses
experienced a rise in digital fraud at a cost of
$5.4 trillion to the global economy
• Fraud protection as a brand defence with identity
theft occurring every 22 seconds due to use
of AI deepfake technology and widespread
synthetic ID fraud (comprising 85% of all fraud
right now)
Source: National Council on Identity Theft, Mckinsey.
Fraud focused on:
UK: Bank, insurance and tax
US: Healthcare
Australia: Bank and pensions
Financial services: Growing
identity, money mule and
application push payments
Retail: Promotion abuse,
returns and delivery fraud
Public sector: Billing,
procurement and claims
Gaming: Promotion abuse
and money laundering
• Combining our fraud and identity capabilities to offer
solutions that strengthen our value to customers
• Leveraging our position as a data controller to provide
enhanced customer insight
• Increasing potential to serve identity fraud solutions
to customers in the retail sector
• Using Location’s sub-premise level data to identify
initial indicators of fraud
Onboarding
as a differentiator
• 85% of customers prefer brands offering
advanced identity verification
• Customers’ willingness to switch makes the
onboarding journey a competitive differentiator
Source: GBG.
Gaming: Shifting emphasis
to digital brand creation from
digital enabler
Financial services: In banking,
introduction of 'healthy
friction' creates brand trust,
and growing use of digital
wallets in the checkout
process
• Layering and combining our capabilities to deliver
customer experiences that enhance brand equity
• Delivering fast and accurate decisioning through our
automated document verification
• Educating customers on the importance of data
quality as digital wallets rise in popularity
Regulation
and increasing
compliance
• Continued adoption and growth of privacy and
consumer transparency regulation
• Growing regulation of push payments
Gaming: Increasing friction to
mirror regulation
Australia, New Zealand, UK and
US: Online safety regulations
UK: Protection of vulnerable
individuals
Australia: Expanded AML
regulations
US: State-by-state regulation
enables growth in online
gaming
LATAM: Regulation of online
gaming in high-growth markets
such as Brazil and Peru
• Leveraging our leadership in UK gaming to address
international markets such as the North Americas,
South America and Australia
• Applying our compliance expertise in our core
markets to guide best practice across our customer
base
Our markets
GBG operates in markets that benefit from long-term structural growth drivers. The acceleration
of the digital economy creates long-term opportunities, but also new challenges such as the
growing industrialisation of fraud. All businesses must offer smooth and secure management of
location and identity information at the point of onboarding, while meeting increasing regulatory
demands and the imperative to deliver outstanding digital experiences are fundamental questions
brands must address to grow their business and protect their reputation.
Sector and region trends
The opportunity for GBG
Global trends
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Focused on profitable growth
We have a clear strategy to deliver profitable growth. As a business, we are focused on
enabling valuable onboarding decisions for our customers around the world as they look
to manage risk factors related to their size, brand, regulatory or compliance requirements,
and deliver excellent customer experiences.
1
Differentiated offering
Our continuous product innovation,
track record of delivery and breadth
of expertise contribute to our wide
recognition as a leader in the identity
and location sector
2
Expertise
Highly skilled and experienced
people with strong technical
end-to-end capabilities and an in-
depth understanding of customer
requirements
3
Geographic and sector
reach
Our global footprint enables us to
be a trusted adviser and partner
to our large customer base across
diversified sectors
4
Structural growth
Our key markets are
underpinned by attractive
structural growth
5
Financial strength
Our attractive, cash generative
model enables disciplined capital
allocation for the benefit of all
stakeholders
Simplicity
Being globally aligned
Driving a performance
culture
Differentiation through
innovation
Key elements
driving our strategy
Our strategy
How we do it
Our market-leading solutions play to our key strengths, leveraging international data with our
agile technology platforms and the unique expertise of our people to provide our customers with
intelligence to distinguish between their good and great customers, tailoring customer journeys
appropriately while stopping fraudulent, bad actors.
Current focus areas
Read more on our focus
areas in pages 9 to 12
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Our business model
Sustainable outcomes
for our stakeholders
The value GBG creates
Our attractive financial operating framework delivers high levels of repeatable revenue, consistent
operating margins, and a disciplined approach to capital allocation that supports a strong balance
sheet. This drives the positive cash flow required to execute our strategy for profitable growth,
while creating opportunities to reinvest operating leverage. This maintains the differentiation and
performance of our market-leading solutions, which ultimately delivers sustainable value creation.
Customers
• Combats fraud risk
• Helping grow and
build trust with
new customers
• Accelerating
digitalisation of
manual processes
Our people
• A performance
culture focused on
winning
• Recognising and
nurturing talent
• Offering exciting
careers in a
growing industry
Investors
• High levels of
repeatable revenue
• Profitable
growth and cash
generation
• Disciplined capital
allocation
Communities
• Protecting
individuals from
the risk of fraud
• Reducing failed
deliveries lowering
emissions
• Helping consumers
to have great
experiences
Disciplined capital allocation
Delivering value through execution
Using our strong balance sheet and high cash generation
to deliver profitable growth
Debt leverage of up to ~2x Adjusted EBITDA
Strategic M&A
Additional
shareholder returns
Progressive
dividend
Investing for
growth
Invest in our people
Sustain and build
differentiated solutions
Go-to-market teams
expanding market share and
addressable opportunities
Active programme assessing
possible acquisition targets
Rigorous process to
assess risk and validate
financial returns
Strong track-record for
successful integrations
Consistent reliable
cash returns
Growth reflects
underlying performance
Ongoing employee benefit
trust share repurchases
Returning surplus
capital to maintain an
efficient balance sheet
Growth
Profitability
Cash generation
A business model that generates high
levels of repeatable revenue with long term
opportunities in attractive end markets
Focus on simplification and cost-
effectiveness in FY24 has created a more
resilient and profitable business
Highly cash-generative model supports
disciplined capital allocation
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Stakeholders
Investors
People
Customers
Communities
Suppliers
Regulators
Who
Investors are key
beneficiaries in the value
that we create. We are
committed to transparent
and open engagement
with them.
Developing and attracting
high-quality talent is a key
driver of our success. As
of 31 March 2024, we have
1,127 employees worldwide.
Our customers expect us to
provide reliable, innovative
products and services that
meet their needs.
For our communities we
have a duty to conduct our
business in a responsible
way that aligns with our
purpose and values.
Developing strong
operational relationships
with our suppliers is key to
success.
We operate within the
requirements of a regulated
industry.
Why
We provide regular updates
to investors so they can be
assured that the Company
is being managed
responsibly. This includes
ESG updates alongside
financial and performance
information to enable
investors to take a broader
view of value and risk.
Our people understand
what we do better than
anyone. With a diverse range
of views and experience
and in a world that is
rapidly changing, they are
best placed to identify
opportunities to ensure
our success. We see it as
essential that we proactively
engage with our team
members to establish a
positive culture based
on trust.
We actively seek feedback
on what customers think
about us so we can make our
services better and address
the issues that matter. As
customer expectations
change, we look to evolve
and enhance our products
and services to ensure
we deliver best in class
solutions.
We seek to understand the
impact and contribution GBG
has on everyday life for the
communities that we interact
with through our work.
We also have a clear focus
on our environmental and
social impacts and report
regularly on progress in
these areas, with clear
targets set.
We recognise how important
it is to have positive
relationships across our
supplier chain. This includes
making sure there is mutual
respect and understanding
of how we should work
together. We conduct a
thorough due diligence when
onboarding and keep up
regular dialogue through the
relationship to ensure the
highest standards of conduct
are maintained.
We recognise how important
it is to shape the policy and
regulatory framework within
which we operate, covering
customer, supplier, and ESG
matters.
How
We held roadshow events
at the full and half year as
part of a proactive investor
relations programme
covering 160 engagements
during FY24. Our Annual
General Meeting (AGM)
took place in July and
we engaged directly with
investors ahead of the AGM
as well as at the meeting.
Our new CEO has visited
several team locations
globally and held virtual
townhalls to engage with
as many team members
as possible. Bi-annual
team member engagement
surveys are conducted
with results shared with
the Board. Rewarding top
performers and developing
key talent is a priority for
the Board.
We provide a 24/7 helpdesk
for all customers. We also
run a continuous ‘Voice of
the Customer’ programme.
Customers complete various
satisfaction surveys so that
they can tell us what they
think about our products and
services and we can monitor
our Net Promoter Score.
The Board receive monthly
updates on the outcomes of
these surveys.
This year we have held more
‘Women in Tech’ forums
than in previous years. We
conducted more volunteering
across the Group providing
a wide-ranging variety of
fundraising opportunities
globally where we directly
engaged local communities.
Led by a team of highly
experienced procurement
specialists GBG’s
onboarding of suppliers
ensures that they understand
the high standards
expected. Regular dialogue
is maintained throughout
the supplier relationship to
ensure the best possible
service is received by GBG.
GBG’s Chief Regulation
Officer is responsible
for ensuring compliance
with regulation within our
industry. Our Company
Secretary ensures our
compliance with new ESG
reporting regulations,
including our climate-related
financial disclosures.
Stakeholder Engagement
At GBG we firmly believe that maintaining strong stakeholder relationships
is essential to our long-term success. We aim to treat all stakeholders fairly,
ensuring we engage in regular dialogue to better understand their needs.
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Location
Precise location data is critical to all
businesses delivering goods, services and
great customer experiences. We deliver the
richest, most precise premise-level address
data to help every business in the world,
reach every customer in the world.
Improving location data quality for thousands
of customers
With over 130 different address formats across 250 countries
and territories, global address verification is a costly challenge
for most businesses. We curate the most comprehensive
address data for every region by combining multiple data
sources into a single best address record. The result is verified
data that is standardised, enriched and structured to the most
appropriate local format.
Our rich suite of location capabilities gives businesses
worldwide the precision they need to make data-driven
decisions, deliver superior customer experiences, help prevent
fraud and enable cross-border commerce.
Continuous Innovation
We continue to innovate by curating and creating location data
from hundreds of sources and the millions of transactions we
process daily for thousands of customers to deliver strong time-
to-value.
We are always evolving to ensure accurate and reliable
results and ensure customers are using the most up-to-date
location data in the market. Our country maturity programme
is dedicated to integrating cultural context into the search
capabilities of our type-ahead products, providing a localised
experience, globally. This enhances search efficiency, reducing
input time and keystrokes needed to find addresses worldwide.
Key capabilities
A suite of global capabilities that capture, verify and enrich
location and customer data from anywhere in the world.
Address Capture
Smart type-ahead addressing suggests and captures
accurate addresses in seconds.
Address Verification
Verifies, corrects, standardises, and enriches address data
in real time for express eCommerce.
Phone and Email Validation
Validates customer email addresses and phone numbers for
improved customer contact.
Country Maturity
Integrates cultural context to provide a localised experience
anywhere in the world.
Data Maintenance
Corrects, suppresses and appends large batches of data to
ensure GDPR & CCPA regulatory compliance.
Geocode
Delivers geo-coordinates for a specific verified location to
ensure delivery route optimisation.
Store Finder
Identifies a retail address to help customers quickly arrive
for same-day collections.
Why customers choose us
1
Global coverage
We cover 250 countries, multiple languages and eight global
character sets, providing standardised, formatted and
enriched results even in hard-to-address markets.
2
Subpremise-level data
We deliver subpremise-level data, such as apartment, suite
and floor numbers; combining multiple data sources to
produce a single best address record.
3
Best address records
Our proprietary curation process cross-references and
combines data to create a single, most complete and
accurate address record from multiple sources.
4
Unlimited addressing experience
Unlike other location services, we don’t limit data caching
in our platform to 30 days. This reduces address data entry,
ensuring the best possible experience for repeat visitors.
We curate the most trusted global
address data and deliver it through
our technology platform.
Select customers and partners
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Location continued
Data Maintenance &
Address Capture
Leading household appliance insurer
reduced address entry time by 80%
This household appliance insurer relies heavily on its
customers’ location to do business. Their internal data
quality was leading to significant amounts of returned mail,
an upward trend in poor outcomes and an increase
in customer complaints around data processing.
They chose our Data Maintenance and Address Capture
solutions to deliver greater accuracy. They underwent a
large-scale data cleansing process to parse, standardise,
verify and format location data, followed by a suppression
cleanse to flag any customer address changes. They also
implemented our real-time type-ahead capture capability
for online forms, reducing address data entry time for their
customers by 80% and input errors by 20%.
By implementing our solutions, this business was able to
improve customer experience, boost conversion rates and
reduce wasted marketing costs all while maintaining an
uninterrupted service for their customers.
Address Verification
Leading fragrance company saves 85%
in courier fees
This unique perfumery business has around 200,000
consultants worldwide, actively engaging with and selling
fragrances to customers. They had been facing reoccurring
addressing problems due to a poor data capture experience,
absence of address verification process and an inability to
validate addresses in international markets.
They selected our location solution suite for its extensive
international coverage and range of capabilities, including
type-ahead address capture functionality.
The result was transformative, significantly reducing
address inaccuracies and failed deliveries and streamlining
the intricate logistics associated with global sales fulfilment.
The company has achieved 85% savings in courier fees and
operational efficiency gains, especially in their Australia and
New Zealand market that saw a 33% increase in successful
deliveries.
We decided to use GBG because
they deliver the widest data sources
and therefore the greatest address
accuracy.
Global reach. Local precision.
Our product philosophy is simple: We must know an address
as well as the people who live at that location so our
customers can deliver products and services first time and
every time.
We curate the most trusted global address data and deliver
it through our technology platform, harnessing a powerful
ecosystem of AI and continuous machine learning to
process millions of transactions every day and continually
improve our location intelligence. We prioritise product
quality, reliability and data freshness and ensure that any
customer can integrate our location capabilities in minutes
for unrivalled global reach.
Kartik Venkatesh
Chief Technology Officer, Location
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Complete customer onboarding
We are committed to helping our customers grow and
protect their business, complying with global regulations.
This commitment underpins an innovative solution roadmap
designed to deliver increasing value to our business.
By leveraging the rich, continually growing identity
transaction data flowing through our solutions, GBG aims
to become the strongest market operator delivering trust in
all digital identities. Powered by the proprietary capability
and flexibility of our solutions, a progressive evolution of our
orchestration platforms will deliver exceptional customer
experiences by unifying identity, fraud and location
capabilities – a powerful combination that is unique to GBG.
Gus Tomlinson
Chief Product Officer, Identity Fraud
Identity Fraud
Our solutions help businesses make more
accurate onboarding decisions, fast-track
great customers and stop fraud.
In today’s complex online environment, trust in identity and
protection from fraud are indivisible, shared concerns for
organisations and individuals. Brokering trust between business
and consumers is what we do, with leading identity fraud
solutions to verify and prove identity and protect against fraud.
These solutions go beyond binary due diligence to deliver
the highest level of onboarding intelligence to businesses,
while ensuring consumers receive the fast and secure digital
experiences they demand.
Over the past year, we have continued to deliver solutions that
increase trust in digital identity. The launch of GBG Identity
Score provides a unique identity confidence metric, giving
businesses the power to measure a complete digital footprint
and recognise more genuine identities. It helps businesses
confidently optimise customer journeys and calibrate
onboarding decisions, in real time country-by-country around
the world. Our International Identity Index took this a step
further, revealing the best way to verify digital identity around
the world, helping to navigate national identity ecosystems and
increase identity inclusion.
With the launch of GBG Trust during the year, we have an
identity intelligence-sharing network, delivering competitive
advantage that is hard to replicate. Trust is built on a
comprehensive rules engine that constantly interrogates
millions of consumer identity data records in the Trust
network. Hundreds of customers from across the sectors and
geographies we serve have contributed over 50 million identity
records to build trust and prevent identity fraud across the
network. By finding positive data matches and suspicious
anomalies and behaviours, our customers can recognise great,
good and bad prospects at the first point of contact.
Verify
Know your customer
Fast, accurate and secure identity data verification designed
to deliver customer due diligence.
Prove
Biometric authentication
Identity proofing with documents and biometric authentication
for maximum customer security.
Protect
Prevent identity fraud
Interrogate identity data and documents for suspicious
anomalies and other fraud signals.
Investigate
Trace connections
Investigating connections between people, businesses
and property for the complete customer view.
Why customers choose us
1
More accurate onboarding decisions
Comprehensive identity information, precise configurability
and our Trust network deliver more context and better
decisions to onboard consumers more efficiently.
2
Verify hard-to-identify customers
The breadth of our identity data and understanding mean
fewer consumers are unfairly excluded even if an identity
footprint doesn’t tick all KYC boxes. This is good for hard-
to-identify consumers and businesses alike.
3
Customisable onboarding journeys
Our Trust network recognises great, good and bad
prospects for accurate routing of fast, slow or no-go
customer journeys – minimising friction and cost or adding
extra checks if it’s necessary.
4
Increased protection from fraud
As we see more identity fraud, synthetic identity and fake
IDs being used, the breadth and depth of our layered
identity solutions accurately distinguish between genuine
consumers and criminals.
Select customers and partners
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Identity Fraud continued
Verify
One of the UK’s largest
wealth managers improves its
customer pass rate by 9%.
Offering financial advice and property
investment products via a network of
around 2,500 partners, this unique
wealth management business identified
a clear opportunity to improve Know Your
Customer (KYC) efficiency.
Our Multi Bureau digital identity verification
solution gives this business direct search
access to all major UK credit bureaus. By
interrogating all trusted credit reference
agency data in one search and delivering a
match against two separate credit records
– such as a mortgage, credit card or bank
loan – we can now achieve a reliable UK
measure for compliant KYC checks in just
a moment and maximise the number of
new customers passing straight through
onboarding first time.
Now switched to a more streamlined,
automated solution for KYC, the business
continues to speed up and scale up
customer onboarding via its partner
network. During the first two years of
Multi Bureau identity verification, partner
practices have compliantly onboarded
more than 150,000 new customers.
Protect
Across our diverse
sub-sectors, hundreds of
customers are linked to our
global identity network.
Combining consumer identity records from
previous data and document-led journeys,
our identity network, GBG Trust delivers
trust insights for onboarding speed and
security, helping members fast-track great
customers and keep criminals out.
Connecting business onboarding checks to
this powerful source of truth is producing
some remarkable results for GBG Trust
members.
One of the UK’s biggest business financial
platforms deployed GBG Trust scoring
alongside their existing identity verification
checks. Within hours it had halted
instances of identity fraud and onboarded
customers otherwise missed by its existing
customer due diligence.
Running 100,000 transactions through our
GBG Trust network, a global eCommerce
giant, discovered cost-savings in fraud
prevention and enhanced customer due
diligence that totalled a multiple of its
annual subscription to the soluion.
Investigate
UK city council
prevents losses and
generates income totalling
more than £6.7 million.
The Counter Fraud Investigation team
at one of the UK’s largest city councils
needed a solution to help protect public
funds and ensure residents receive
maximum value for their tax money.
Using GBG's UK-focused Investigate
tool, the team now has access to over
1.5 billion enhanced, interlinked records,
allowing them to see how different
people, addresses and businesses are
linked together. This helps the team spot
falsified social housing or Right to Buy
claims from ineligible applicants, as well
as illegal subletting, fraudulent council tax
exemptions and many other costly crimes.
In one financial year alone, the council’s
investigators prevented losses and
generated income totalling over £6.7
million. In the previous five years, the total
was £26.5 million, added to a further £12.5
million in savings from fraudulent and
irregular business COVID grants.
Prove
Popular trading platform
enters new global markets,
with enhanced ID security.
This year we welcomed a leading online
trading and investment platform seeking
to expand its global presence and a tailored
response to customer due diligence
challenges.
Navigating an intricate regulatory landscape
and ensuring secure customer onboarding
were both critical. The business had
to adhere to distinct AML (Anti-Money
Laundering) regulatory requirements and
GDPR (General Data Protection Regulation)
standards in Australia, South Africa and
the United Kingdom. Plus, a competitive
online trading sector made swift customer
onboarding crucial; poor identity proofing
experience would not be tolerated.
GBG is embedded into its onboarding
experience, enabling the business to tap
into real-time identity data verification
with sources to meet market regulations.
For extended due diligence, the platform
plugs into our web-hosted identity proofing
solution, delivering document capture and
assessment in all markets plus biometric
authentication and liveness detection.
Plugging into our low-code
solutions, this trading
platform has entered new
markets at speed while
meeting high customer and
regulator expectations.
Strategic Report
Governance
Financial Statements
Annual Report 2024
20
Section 172 statement
Statement by the directors in
performance of their statutory
duties in accordance with S172(1)
Companies Act 2006.
GBG's Board must consider, both individually
and together, that they have acted in the way
they consider, in good faith, would be most
likely to promote the success of the Company
for the benefit of its members as a whole and
having regard (amongst other matters) to
factors set out in (a) to (f) s172 Companies
Act 2006 (s.172).
This section describes how the Directors had
regard to the matters in Section 172(1) (a)
to (f) of the Companies Act 2006 in Board
discussions and actions, behaviours and
decision-making. The Board and Executive
Directors know that considering all our key
stakeholder relationships, having proper
regard to our stakeholders’ interests and
being aware of the external impact of our
activities on the communities and environments
in which we operate, will ultimately drive
value to our shareholders and secure our
long-term success.
Section 172
Considerations
Decision-making
process
Where you can
read more
a The likely
consequences of any
decision in the long-
term
The Directors are aware that the decisions they make today will affect the
Group’s long-term success. The Board continually monitors the Group’s
progress against strategy and makes decisions between short and long-
term investments. Further detail on the types of decisions taken are
covered in the CEO review and Financial review.
Strategy – page 14
CEO review – pages 9 to 12
KPIs and Financial review –
pages 30 to 35
b The interests of the
Company’s employees
The Board understands the important role each and every one of our
people play in the long-term success of the Group. The Board are
committed to the people agenda and this year there has been a real focus
on development of our key team members, this has included leadership
programmes, succession planning and making sure effective reward
packages are in place. The Group operates bi-annual engagement
surveys, the results of which are shared with the Board along with other
senior members of the business who regularly interact with team members
at all levels.
ESG Impact Report
c To foster the
Company’s business
relationships with
suppliers, customers
and others
The Board understands the importance of fostering good relationships
with its stakeholders. More detail about how it engages with its
stakeholders is on page 16. Board members monitor the relationship with
key customers and suppliers through the Executive Directors and members
of senior management that own these relationships.
Strategy – page 14
Stakeholders – page 16
d The impact the
Company has on the
community and the
environment
The Board recognises the importance of its decisions on the community
and the environment. Through the ESG Committee, the Board ensures that
environmental policies and suitable governance structures are established
to align with committed sustainability and diversity targets.
ESG Impact Report
e For the Company to
maintain a reputation
for high standards of
business conduct
The Board intends for GBG to maintain a reputation for high standards of
business conduct. This is set out in the GBG’s Code of Conduct which has
been written to ensure all stakeholders that work with GBG know what’s
expected of them and the part they play in helping GBG maintain high
ethical standards. GBG also has a robust, global whistleblowing facility,
using an external specialist provider which enables team members to feel
safe to raise concerns if they wish.
ESG Impact Report
f The need to act fairly
between members of
the Company
The Board recognises that it has to balance competing interests in
reaching its decisions. Where there are conflicting interests, the Board
will act as equitably and fairly as it is able to and take into account the
implications for each stakeholder group.
Financial review – pages
32 to 35
Strategic Report
Governance
Financial Statements
Annual Report 2024
21
Section 172 statement continued
Below are some examples of principal decisions taken by the Board during
the year which focused on issues of importance to the Group’s long-term
success. They describe how the Board considered the relevant stakeholder
group when making the decision and identifies the elements of Section 172(1)
that were considered.
Principal decision
taken by the Board
Decision-making
process
Consequences of decisions
in the long-term
Section 172
Considerations
Change in CEO
The role of CEO was recruited and offered to Dev Dhiman.
The Board considered succession plans already in place and
considered diversity of the Board.
The Board considered the different stakeholders when making
the decision. What was key to the decision was to ensure as little
disruption as possible in order to continue to successfully deliver
the Group strategy in the short, medium and long-term.
b
c
e
f
Payment of dividend
The Board considers its commitment to a progressive dividend
policy which has seen a dividend paid every year since 2007. It
considers maintaining a sufficient level of distributable reserves
to ensure shareholders receive a dividend.
The Board aims to ensure that dividends are consistent with the
Group’s financial performance without detriment to the balance
sheet and future sustainability. During the year the Board
conducted a thorough assessment of its distributable reserves
and, as a result, is making a recommendation to shareholders
at the AGM this year to convert the existing share premium to
distributable reserves so as to support the payment of dividends
in the long-term.
b
e
f
Capital allocation
The budget, approved by the Board, sets the allocation of capital
to deliver our growth strategy through investment in R&D, capital
expenditure, talent and acquisitions. The weighting of each
is determined by our strategic priorities over the short to
medium term.
Balancing investment for future growth whilst supporting our
people and customers in the short term as well as meeting
shareholder expectations.
b
e
f
Improvements to Anti-
Bribery and Corruption
Following an internal audit undertaken in respect of GBG’s Anti-
Bribery and Corruption Policy and following recommendations
from the Audit & Risk Committee, the Board requested some
improvements be made to GBG’s anti-bribery and corruption
arrangements. This focused on ensuring all team members
were educated on the policy and that there was a thorough and
transparent process for recording gifts and hospitality.
The main focus was to ensure high standards of business
conduct were maintained. As we have grown as a business it
was important to educate all team members globally on anti-
bribery legislation and the process for accepting gifts so that they
could be reassured that they were not doing anything that they
shouldn’t be. It also reaffirms to suppliers and customers that
GBG is a business that wishes to operate with honesty, integrity
and transparency.
b
c
e
Carbon emissions
reduction targets
The Board receives regular updates on progress against our
emissions reduction target and have this year approved the
Group’s approach to climate-related risks and opportunities.
They further requested validation for a science-based emissions
target (SBTi), signing a leter of commitment.
The Board considers the long-term impact that carbon (and
other greenhouse gas) emissions have on the environment and
the implications of our actions on all stakeholders. They are
committed to reducing our impact where we can in this space.
d
e
Strategic Report
Governance
Financial Statements
Annual Report 2024
22
Environment, Social and Governance (ESG) overview
Everyone
Environment
Ethics
Reducing and improving our impact
on the planet.
Reduce our Scope 1 and 2
emissions by 42% in 10 years
Achieved:
We have already managed to reduce
our Scope 1 and 2 emissions by 54% in
comparison to our FY22 baseline.
Net zero by 2045
In progress:
While we have made excellent progress
on our Scope 1 and 2 emissions, there is
still much more work to do on our Scope 3
emissions.
Run two climate-related scenarios and
disclose in our FY24 Annual Report
Achieved:
Please read our climate-related disclosures
on page 25, which have been informed by
physical and transition scenario analysis.
Ensuring that our team has the support
and resources they need to grow their
skills, build diverse teams and protect
our environment and society.
Exceed 40% female representation
by 2026 (global workforce and senior
leaders level)
In progress:
We have increased our female
representation across our global workforce
and senior leaders this year.
Our senior leaders representation
remains above 40%.
Continually increase participation in
our voluntary diversity data collection
Achieved in FY24:
Participation in our voluntary diversity data
collection increased to 51.8% this year
(2023: 47.1%).
Publish an Ethnicity Report
Achieved:
We published an internal Ethnicity
Report this year.
Having clear oversight and
responsibilities for transparent ESG
reporting and effective ESG risk
management.
Put the ethical use of data at
the heart of everything we do
In progress:
This year we have developed our approach
to AI to ensure that as we grow our use we
keep ethics at the heart of our decision
making.
Incorporate the role our industry
plays in building a better world
in our thought leadership
In progress:
We have released case studies, ran
events and released this report to help
build the picture of how our products build
a better world.
Focus
UN SDGs supported
Goals
Focus
UN SDGs supported
Goals
Focus
UN SDGs supported
Goals
Our ESG Strategy
Our ESG Strategy – Environment,
Everyone & Ethics – reinforces
our commitment to embed a
sustainable and ethical approach
in everything we do.
It represents what makes
us unique and gives us the
framework to drive action on the
most impactful and important
areas.
A summary of this
year's ESG progress is on
the next few pages. For
more information, please
read our first ESG Impact
Report
Strategic Report
Governance
Financial Statements
Annual Report 2024
23
Our gender diversity
Board of Directors
33.3%
Global workforce FY24
FY24
FY23
FY22
33.3%
28.6%
28.6%
Executive Team
27.3%
FY24
FY23
FY22
27.3%
23.1%
20.0%
Senior leaders
44.3%
FY24
FY23
FY22
44.3%
41.9%
33.3%
Key
Female
Male
37.9%
female
Environment, Social and Governance (ESG) overview continued
Inclusion, diversity and equity
A diverse and inclusive workforce
encourages innovation, widens our
perspective and leads to a more
successful, happier team with improved
business outcomes.
That’s why it is important that our global team is representative
of the markets and societies we serve around the world. We
are really pleased to see progress in our proportion of female
team members across our global workforce, Board of Directors,
Executive Team and senior leaders this year in comparison to
last year. The data presented in this report is categorised by
female and male, but we recognise that gender is not binary.
The second target we set is to continually increase participation
in our voluntary diversity data collection.
GBG cares about its people, the
environment, and the communities
we’re based in. As the newest member
of the ESG Committee, I am focused
on holding us to account against
these values and the commitments
we have made – demonstrating the
value that our products do, and could,
create across society.
Dev Dhiman
CEO
To find out more, please read pages 16-17 in our
ESG Impact Report
Strategic Report
Governance
Financial Statements
Annual Report 2024
24
Our emissions
1. Numbers relate to the Scope 3 category of the GHG
Protocol Corporate Value Chain (Scope 3) Accounting and
Reporting Standard.
Our emissions measurement is in line with the
GHG Protocol. We have used as much primary
data as we can and worked with a consultant
to check our measurements are as accurate as
possible.
Last year we included our first Scope 2
market-based measurement. This year we
have calculated the Scope 2 market-based
emissions for our baseline year, FY22, so that
we are consistent in the way we measure our
reductions. We are very proud to have reduced
our Scope 1 and 2 emissions by 54% in two
years, achieving our near-term target early.
We have also updated our intensity ratios
to include both location and market-based
emissions. Going forward, we will only use
market-based emissions for our intensity ratio
calculation.
Tonnes CO2e
Scope
Source
Location
FY24
FY23
FY22
(including the
former Acuant
business and
Cloudcheck)
Scope 1
Natural gas
UK
7
15
13
Rest of the world
–
–
–
Total
7
15
13
Scope 2
Location-based
purchased
electricity
UK
72
127
89
Rest of the world
164
223
274
Total
236
350
363
Market-based
purchased
electricity
UK
–
48
55
Rest of the world
148
204
267
Total
148
252
321
Total Scope 1 and 2 (location-based)
243
365
376
Total Scope 1 and 2 (market-based)
155
267
334
Intensity ratio (Scope 1 and location-based Scope 2 tCO2e/£m revenue)
0.88
1.31
1.55
Intensity ratio (Scope 1 and market-based Scope 2 tCO2e/£m revenue)
0.56
0.96
1.38
Tonnes CO2e
Scope
Source 1
FY24
FY23
FY22
(including
Acuant and
Cloudcheck)
Scope
3
1. Purchased goods and
services
338
267
426
5. Waste generated in
operations
4.1
5
0.3
6. Business travel
838
656
375
7. Employee commuting
759
710
112
kWh
Location
FY24
FY23
Energy
consumption
used to
calculate
the above
emissions
UK
375,513
402,398
Rest of
the world
329,912
379,181
Strategic Report
Governance
Financial Statements
Annual Report 2024
25
Climate-related financial
disclosures
We know that to have a resilient and robust
strategy and business model, we need to
understand the range of risks we could
be impacted by and have a management
plan in place to mitigate those risks. That
is why we voluntarily reported against the
recommendations of the Task Force on
Climate-related Financial Disclosures for the
first time last year.
Please find our disclosures against the
UK Government’s Climate-related Financial
Disclosure regulations across the next few
pages, including the results of the climate-
related scenario analysis project we ran
this year.
a) a description of the governance
arrangements of the company in
relation to assessing and managing
climate-related risks and opportunities
Our Board has overall responsibility for our
ESG programme, its activities and targets,
which is maintained through regular review of
recommendations made by its Committees. Our
ESG Committee meets to assess and monitor
progress against our ESG strategy, KPIs and
policies. The Committee is scheduled to meet
three times a year, where progress, future
plans and evolving regulation is discussed. You
can read this year’s ESG Committee report on
pages 81 and 82. Our Audit & Risk Committee
regularly monitors the principal risks and
uncertainties identified by our risk assessment
processes, along with the strategies developed
and the actions we have taken to mitigate them.
Our Business Risk Committee facilitates
Executive focus on the management of our key
non-financial risks and issues and makes sure
that they are management in line with Board
risk appetite. The Committee is chaired by the
Chief Regulation Officer, or Chief Financial
Officer in their absence, and is attended by
representatives from governance, risk, people
team, finance, cybersecurity, data privacy
and regional representatives. The Committee
reviews our top climate-related risks and
opportunities at least annually and makes
recommendations, as appropriate to the ESG
Committee.
Non-financial and sustainability information statement
ESG Committee
Audit & Risk Committee
Business Risk Committee
Board
ESG
Risk
Team members
Strategic Report
Governance
Financial Statements
Annual Report 2024
26
b) a description of how the company
identifies, assesses, and manages
climate-related risks and opportunities
GBG uses a “bottom-up, top-down” approach
to identifying risk. We start by conducting
“bottom-up” risk assessment workshops,
covering each of GBG’s business units and
central services functions. The output from
the risk assessment workshops creates risk
registers, where we have a specific ‘ESG’
subcategory, under ‘Strategic’ as described in
the GBG Risk Taxonomy.
A “top-down” review of the top risks is
conducted by the Audit & Risk Committee to
validate the workshop findings and to ratify the
risk register.
This process is refreshed regularly and on any
material event occurring which is likely to result
in GBG being subject to new or additional risks.
This is overseen by our ESG Committee, with
sponsorship by our ESG Committee Chair and
Executive ownership by our Chief Executive
Officer. Independent review and challenge is
provided by the Business Risk Committee.
The risks and opportunities are assessed
against likelihood and impact against a risk
matrix. Climate-related risks and opportunities
are assessed against the short (0-5 years),
medium (5-10 years), and long-term (10+ years)
timelines. Our short-term timeline reflects
the five-year financial forecast model we
maintain. Impact is measured by considering
the risk impact on our reputation, operations,
regulation, information and finances.
Each risk is given a Risk Owner, who is the
person primarily responsible for managing and
mitigating that risk. Where a risk response is
required it is documented in the risk register
and kept under evaluation to ensure it remains
appropriate.
c) a description of how processes for
identifying, assessing, and managing
climate-related risks are integrated into
the company’s overall risk management
process
As outlined above, our climate-related risks
and opportunities are integrated into our Group
Risk Management process and follow the same
approach. This means that climate-related risks
and opportunities follow the same “bottom-up,
top-down” risk identification and assessment
approach, have an Executive Owner, Non-
Executive Sponsor, dedicated Executive-level
Panel and oversight from the Board, as well as
independent review from Risk Management.
d) a description of—
i) the principal climate-related
risks and opportunities arising in
connection with the company’s
operations, and
ii ) the time periods by reference to
which those risks and opportunities
are assessed
e)
a description of the actual and
potential impacts of the principal
climate-related risks and opportunities
on the company’s business model and
strategy
You can find the descriptions requested in (d)
and (e) in the table over the next few pages.
The risks and opportunities described were
informed by the climate-related scenario
analysis project we ran this year. You can find
further details of this in section (f).
Non-Financial and Sustainability Information Statement continued
Strategic Report
Governance
Financial Statements
Annual Report 2024
27
Risk/opportunity
Potential impact
Time frame most likely to
actualise
Strategic response
Transition risks
Policy and legal
Risk of the introduction of GHG pricing
and/or a carbon tax
Increase in costs
Management plan in place
Risk of enhanced reporting requirements
and regulations
Imposition of financial penalties with failure to comply
and loss of investment
Management plan in place
Technology
Risk of the need to invest in carbon removals
Increased costs associated with purchase
Management plan in place
Market
Risk of increased and/or changing customer
expectations
Impacting revenue and operations
Review plan in FY25
Risk that our suppliers fail to meet our climate maturity
expectations
Increasing our costs and making our climate targets
harder to achieve
Review plan in FY25
Reputational
Risk of failing to meet, or being perceived as failing to
meet, climate-related targets and/or taking insufficient
climate action
Decreased customer demand and revenue if customers
chose other suppliers
Management plan in place
Physical risks
Chronic
Risk of increased heatwaves
Causing disruption to our team’s ability to carry
out their responsibilities through an increase in the
necessity for climate migration. As well as increasing
complexity in our supply chain
Management plan in place
Key
S Short term (0-5 years)
M Medium term (5-10 years)
L Long term (10+ years)
S
S
S
S
M
L
L
Non-financial and sustainability information statement continued
Strategic Report
Governance
Financial Statements
Annual Report 2024
28
Risk/opportunity
Potential impact
Time frame most likely to
actualise
Strategic response
Physical risks continued
Acute
Risk of increased cyclones, especially in North
America
Causing physical damage to workspaces, property
and/or equipment and disruption to our supply chain.
As well as direct threat to team member health and
safety and disruption to their ability to carry out their
responsibilities
Review plan in FY25
Risk of increased water stress across most
of our sites
Risk of increased wildfires, especially in Australia and
Turkey
Opportunities
Opportunity for improved energy efficiency
Lower costs and less fossil fuel dependency
Management plan in place
Opportunity for enhanced climate-related disclosure
Improve our knowledge and understanding of our
business risks and the mitigation plan needed
Management plan in place
Opportunity to develop new solutions or offer to new
markets due to the need for location services due to
physical climate change impacts
Increased customer base and improved revenue
To review in line with customer
expectations
f) an analysis of the resilience of the
company’s business model and strategy,
taking into account consideration of
different climate-related scenarios
This year we conducted scenario analysis
with an external consultant to deepen our
understanding of the climate-related risks
and opportunities we face, the potential
impact and the mitigating action we need to
take. We ran two physical scenarios: fossil-
fuelled development (IPCC SP5) and middle
of the road scenario (IPCC SSP2) against
our global workspace locations. We chose
these scenarios as they are widely used and
represent two extreme potential outcomes.
We also ran two transition scenarios: net
zero emissions by 2050 (IEA NZE) and the
announced pledges scenario (IEA APS).
We assessed our climate-related risks with
input from our scenario analysis project and do
not currently view them as financially material
to our business. We will continue to track and
review the risks and opportunities as they
evolve.
g) a description of the targets used by the
company to manage climate-related
risks and to realise climate-related
opportunities and of performance
against those targets
h) the key performance indicators used to
assess progress against targets used
to manage climate-related risks and
realise climate-related opportunities
and a description of the calculations on
which those key performance indicators
are based
Having a robust and deliverable emissions
reduction plan is one of the key ways we can
mitigate the impact of our climate-related
risks, such as the introduction of a carbon
tax, responding to customer expectations
and being perceived as failing to take enough
climate action.
It also contributes to the goal to limit global
warming to 1.5°C of warming above pre-
industrial levels, which could reduce the impact
of physical climate risks.
We are very proud to have already achieved our
target to reduce our Scope 1 and 2 emissions
by 42%, with a 54% reduction this year
since our FY22 baseline. We have also set an
ambition to be net zero by 2045, which we
are measuring by an at least, 90% absolute
reduction in our Scope 1, 2 and 3 emissions.
This year we have also committed to setting an
externally validated, science-based net zero
and near term target.
S
S
S
M
M
Non-Financial and Sustainability Information Statement continued
Strategic Report
Governance
Financial Statements
Annual Report 2024
29
Key performance indicators
The Board monitors the Group’s
progress against its strategic
objectives and the financial
performance of the Group’s
operations on a regular basis.
Performance is assessed against
the strategy and budget using
financial and non-financial
measures.
The following details the principal Key
Performance Indicators (‘KPIs’) used by the
Group. A summary of performance against
these KPIs is set out on the following page.
Statutory measures are those taken directly
from the Consolidated Statement of Profit or
Loss or Consolidated Balance Sheet. Non-
Statutory measures are defined within the last
note to the financial statements.
The Group uses the following primary
measures to assess the performance
of the Group:
Financial
Revenue and pro forma/organic revenue
growth at constant currency
Revenue and revenue growth are used for
internal performance analysis to assess the
execution of our strategies. This is measured
on a constant currency basis to remove the
impact of changes in exchange rates.
Where revenue in the current or prior year was
impacted by acquisitions/disposals or material
non-repeating revenue, pro forma or organic
revenue growth are also measured, although
those terms are not defined term under IFRS
and may not, therefore, be comparable with
similarly titled measures reported by other
companies.
Pro forma growth is defined by the Group as
year-on-year continuing revenue growth, after
adjustments for the pre- acquisition/disposal
revenue from acquisitions/disposals in the past
twelve months and excluding non-underlying
items.
Organic growth is defined by the Group as
year-on-year continuing revenue growth,
excluding acquisitions (until the date of their
anniversary) and disposed businesses.
Repeatable revenue
This is the percentage of revenue from
subscriptions or consumption.
Net revenue retention (NRR)
This is calculated as constant currency revenue
growth excluding revenue from brand new
customers within the past 12 months.
Adjusted operating profit
This is used for internal performance analysis
and to assess the execution of our strategies.
Management believe that this adjusted
measure is an appropriate metric to understand
the underlying performance of the Group.
Earnings per share
Earnings per share is calculated as diluted
earnings per share from continuing operations
on both an adjusted and unadjusted basis.
Earnings per share growth
This is calculated as the growth in year- on-
year earnings per share on both an adjusted
and unadjusted basis.
Net cash/debt
This is calculated as cash and cash equivalent
balances less outstanding external loans.
Unamortised loan arrangement fees are
netted against the loan balance in the financial
statements but are excluded from
the calculation of net cash/debt.
Net debt leverage
This is calculated as the ratio of Net (Debt)/
Cash to Adjusted EBITDA. This demonstrates
the Group’s liquidity and its ability to pay off its
incurred debt.
The ratio is a covenant within the Group’s bank
facility.
Adjusted EBITDA
This is used for internal performance analysis
and to assess the execution of our strategies.
Management believe that this adjusted
measure is an appropriate metric to understand
the underlying performance of the Group.
Cash conversion
This is calculated as cash generated from
operations in the Consolidated Cash Flow
Statement, adjusted to exclude cash payments
for exceptional items, as a percentage of
Adjusted EBITDA.
Deferred revenue
Deferred revenue, which is included in our
Consolidated Balance Sheet within Trade and
Other Payables, is the amount of invoiced
business in excess of the amount recognised
as revenue. This is an important internal
measure for the business and represents the
amount that we will record as revenue in our
Consolidated Statement of Profit or Loss in
future periods. Trends may vary as business
conditions change.
Non-financial
Employee engagement
Team member engagement is a key focus area
for the business in order to retain and grow
what we believe is some of the best talent in our
industry. This is measured twice a year through
a group wide employee survey conducted
through an external provider.
Strategic Report
Governance
Financial Statements
Annual Report 2024
30
FY24
FY23
Revenue growth
(0.5%)
15.0%
Revenue growth at constant currency (FY23: pro forma revenue growth at constant currency)
2.7%
3.7%
Location revenue growth at constant currency
7.3%
11.7%
Identity revenue growth at constant currency (FY23: pro forma revenue growth at constant
currency)
(0.7%)
(1.9%)
Fraud revenue growth at constant currency
7.8%
14.7%
Repeatable revenue % (FY23: pro forma):
– Subscription revenue %
57.5%
56.7%
– Consumption revenue %
37.3%
37.0%
94.8%
93.7%
Net revenue retention %
98.1%
92.3%
Adjusted operating profit (£’000)
61,197
59,817
Adjusted operating profit %
22.1%
21.5%
Adjusted EBITDA (£’000)
63,823
63,147
Earnings per share – diluted
(19.2p)
(47.5p)
Earnings per share – adjusted diluted
15.1p
16.4p
Earnings per share growth – diluted
(59.6%)
(786.2%)
Earnings per share growth – adjusted diluted
(7.7%)
(18.7%)
Net (debt)/cash (£’000)
(80,854)
(105,918)
Net debt leverage (multiple of adjusted EBITDA)
1.27
1.68
Cash conversion %
90.6%
67.3%
Deferred revenue (£’000)
55,298
56,507
Employee engagement
90%
93%
Key performance indicators continued
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Financial Statements
Annual Report 2024
31
Financial review
Principal activities and business
review
In an increasingly digital world, GBG helps
businesses grow by giving them intelligence to
make the best decisions about their customers,
when it matters most.
Every second, our global data, agile technology
and expert teams, power over 20,000 of the
world’s best-known organisations to reach and
trust their customers.
The performance of the Group is reported by
segment, reflecting how we run the business
and the economic characteristics of each
segment. There are three reportable segments,
Location, Identity and Fraud.
The Group results are set out in the
Consolidated statement of profit or loss and
explained in this Financial review.
A review of the Group’s business and future
development is contained in the Chair’s
Statement, the CEO's review and in this
Financial review.
The Group uses adjusted figures as key
performance indicators in addition to those
reported under UK-adopted International
Financial Reporting Standards and in
accordance with standards issued by IFRIC.
Adjusted figures exclude certain non-
operational or exceptional items, which is
consistent with prior year treatments. Adjusted
measures are marked as such when used and
are explained on pages 149 to 152.
We are pleased that we were able to
successfully execute our financial plan for the
year. We had a strong focus on simplification
and cost-effectiveness and as a result have
delivered structural savings that we expect
will benefit GBG into the future. Our continued
focus on growth initiatives led to us achieving
the acceleration in year-on-year growth in
quarter four that we had expected and built
into our plan. This improved revenue growth of
approximately 5.0%, on a constant currency
basis, was primarily driven by an acceleration
in the Identity segment, as a result of improving
trends in the Americas and EMEA. This gives us
positive momentum going into the new financial
year.
Revenue growth opportunities in FY24
continued to be impacted by the general
macroeconomic conditions which has
suppressed consumer demand and business
confidence leading to lower transactional
volumes for GBG. However, some of the more
specific headwinds the Group faced in the
previous year, relating to changes in consumer
behaviours driving demand reductions in the
internet economy and particularly fintech
businesses, somewhat abated from the fourth
quarter of the year.
In FY24 we delivered constant currency
revenue growth of 2.7% and as a result of the
sharp focus on simplification and efficiencies,
we recorded our highest ever level of adjusted
operating profit.
GBG’s mix of commercial models and resilient
customer retention continues to support strong
cash generation and good forward visibility
due to our high levels of repeatable revenue,
with 57.5% (FY23: 56.7%) from subscriptions
and 94.8% (FY23: 93.7%) of revenue coming
from the combination of subscriptions and
consumption.
This focus on driving simplicity and efficiency
has enabled GBG to prioritise the disciplined
investment required to optimise our core
solutions in a competitive market, while at
the same time deliver growth in returns for
shareholders. These initiatives, which began
during FY23, have achieved an annualised run-
rate reduction in operating expenditure of £10
million and helped deliver an improved adjusted
operating profit margin of 22.1%, which was
ahead of the reported FY23 margin of 21.5%.
This was despite inflationary pressures and
the FY23 margin benefiting from an unusually
large FX gain primarily from the retranslation
of intercompany loans. Excluding gains and
losses on foreign exchange, the FY24 adjusted
operating profit margin was still 22.1%, against
20.4% in the prior year.
Our financial position and balance sheet is
strong and in FY24 cash conversion returned to
more normal levels at 90.6% (FY23: 67.3%).
By the end of the year GBG’s net debt had
reduced to £80.9 million from £105.9 million
at the previous year end. The net debt to
EBITDA ratio reduced to 1.27 times (FY23: 1.68
times). As we enter the new financial year, we
remain focused on cash generation and further
repayment of debt.
FY24
£000
FY23
£000
Revenue
277,325
278,810
Gross profit margin
70.1%
71.0%
Adjusted operating profit
61,197
59,817
Adjusted operating profit margin
22.1%
21.5%
Share-based payments
(3,488)
(2,313)
Amortisation of acquired intangibles
(39,447)
(42,758)
Impairment of goodwill
(54,707)
(122,225)
Other exceptional items
(4,906)
(4,950)
Operating loss
(41,351)
(112,429)
Net finance costs
(9,035)
(6,401)
Loss before tax
(50,386)
(118,830)
Total tax credit/(charge)
1,803
(964)
Loss for the year
(48,583)
(119,794)
Final dividend per share (pence)
4.20
4.00
Diluted (loss)/earnings per share (pence)
(19.2)
(47.5)
Adjusted diluted earnings per share (pence)
15.1
16.4
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Financial Statements
Annual Report 2024
32
Revenue and gross margin
Revenue declined on a reported basis by 0.5%
but after adjusting for changes in foreign
exchange rates, the constant currency revenue
growth in FY24 was 2.7%.
More detail on revenue performance in each
of our operating segments is included in the
CEO's review.
We were particularly pleased with the level of
revenue growth attributable to new customers
won in the last 12 months which has increased
to 4.6% (FY23: 4.5%) and as expected,
Net Revenue Retention (NRR) of 98.1% has
improved compared to the prior year (92.3%).
In FY24 we have seen a reduction in the NRR
associated with Fraud segment, which is more
susceptible to short-term fluctuations in NRR
as contracts are generally larger and revenue
timing dependant on renewal dates. NRR,
excluding the Fraud segment, increased from
91.1% to 99.0%.
Gross margin for the year of 70.1% was a
small reduction against the prior year when
the gross margin was 71.0%. This reflects
the revenue mix in the year both across our
segments but also between direct and partner
channels, in addition to an increase in cloud
hosting costs. In the second half of the year
the revenue mix, along with a focus on cloud
hosting optimisation, resulted in gross margin
of 71.0%, compared to 69.2% in the first half.
Operating profit and cost
management
On a reported basis, there was an operating
loss of £41.4 million (FY23: loss of £112.4
million), principally due to the goodwill
impairment charge of £54.7 million recognised
at the half year (FY23: £122.2 million).
Adjusted operating profit was £61.2 million
(FY23: £59.8 million), which represents a
margin of 22.1% (FY23: 21.5%) and an 8%
increase over FY23, excluding the £3 million
foreign exchange gain in the prior year.
This improvement reflects a tight focus on cost
efficiency and simplification of our business,
combined with disciplined prioritisation of
investment to capitalise on our long-term
market opportunities.
Despite the general inflationary pressures of
the markets in which we operate, our adjusted
operating expenses were £8.8 million or
6.3% lower than the prior year. We managed
headcount tightly and carefully considered our
team member recruitment and the replacement
of leavers. This, together with targeted
redundancies, led to an 8% reduction in our
average headcount over the course of the year.
FY24
FY23
Change
Total operating expenses
234,934
313,481
Amortisation of acquired intangibles
(39,447)
(42,758)
Equity-settled share-based payments
(3,488)
(2,313)
Impairment of goodwill
(54,707)
(122,225)
Other exceptional items
(4,906)
(4,950)
Adjusted operating expenses
132,386
141,235
(6.3%)
We also completed a review of our physical
office footprint reducing commitments and
costs meaningfully to reflect the hybrid working
environment of our teams as well the changes
we have implemented over the last few years to
our geographical footprint, particularly for our
technology teams.
Total spend on technology decreased to £46.5
million (FY23: £54.0 million), which represents
a reduction of 13.9%. We achieved this through
strict prioritisation of technology projects to
ensure our teams are focused on fewer projects
and ones of highest opportunity for GBG as
well as further resource offshoring to lower
cost locations.
These cost saving initiatives underpinned our
profit delivery in FY24 but have also enabled
some level of re-investment into a small number
of key product development activities to ensure
we maintain our competitive differentiation and
are positioned to achieve our short, medium
and long-term goals.
Financial review continued
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Financial Statements
Annual Report 2024
33
Financial review continued
Normalised and exceptional items
Amortisation of acquired intangibles
The charge for the year of £39.4 million (FY23:
£42.8 million) represents the non-cash cost of
amortising separately identifiable intangible
assets including technology-based assets and
customer relationships that were acquired
through business combinations.
The decreased charge in FY24 is due to the
impact of some intangibles becoming fully
amortised during the year, in addition to
changes in exchange rates.
Share-based payments
During FY24 3.9 million (FY23: 3.3 million)
new share option awards were granted to
directors and team members across the Group,
including through the GBG Sharesave scheme.
This increase was due to the share price being
comparatively lower in FY24 leading to a
greater number of shares being awarded for
any given value.
The charge for the year of £3.5 million (FY23:
£2.3 million) has increased as FY23 included
a credit due to a change in the assumption for
the percentage of awards expected to vest
based on EPS and TSR performance.
Impairment of goodwill
As required under IFRS, the Group conducts
an annual impairment review of goodwill and
intangible assets. This review compares the
carrying value on the Group’s balance sheet of
those assets against the present value of the future
cashflows they are expected to generate.
As reported in our half year results for the six
months ended 30 September 2023, significant
increases to central bank interest rates since
31 March 2023 resulted in the post tax
discount rate used in our assessment and
applied to the US cashflows increasing from
9.2% at 31 March 2023 to 9.9%. This resulted
in an exceptional non-cash goodwill impairment
charge of £54.7 million. More detail can be
found in note 16.
Other exceptional items
In addition to the goodwill impairment charge,
other exceptional costs of £4.9 million (FY23:
£5.0 million) were incurred by the Group in the
year and have been detailed in note 7. Broadly,
these exceptional charges arose in support
of our initiatives to achieve future operational
simplification and efficiency.
The most significant elements were the exit
costs for a number of team members which
totalled £4.0m as part of this group wide
review; and £0.7m of integration costs as we
finalised projects to align systems from the
Acuant acquisition.
Net finance costs
The Group incurred net finance costs for
the year of £9.0 million (FY23: £6.4 million).
The increase is due to the annualised impact
of the significant increases in the Secured
Overnight Financing Rate (SOFR) interest
rate during FY23 (from 0.3% to 4.8%), upon
which the Group’s loan facility interest rate is
linked. SOFR continued to increase until July
23 and has remained around the 5.3% level
throughout the rest of FY24.
Strong cash generation has enabled the
Group to reduce net debt by £25.0 million and
making repayments against the loan facility will
continue to be a focus during FY25.
Taxation
The total tax credit of £1.8 million (FY23: £1.0
million charge) includes £8.8 million of current
tax payable on the Group’s taxable profits and
losses in the year (FY23: £12.9 million), offset
by a deferred tax credit of £10.6 million (FY23:
£11.9 million).
£277.3m
FY24 Revenue
£61.2m
FY24 Adjusted operating profit
(0.5%)
Reported revenue growth
2.7%
Constant currency revenue growth
57.5% Subscription
37.3% Consumption
5.2% Other
Revenue
by type
The reported effective tax rate for the Group
has moved from negative 0.8% in FY23 to
3.6% in FY24.
The adjusted effective tax rate, which excludes
the impact of amortisation of acquired
intangibles, share-based payments and
exceptional items increased from 21.3% to
25.2%. The majority of this increase is due to
UK statutory tax rate increasing from 19% to
25% from 1 April 2023.
The tax rate attributable to US State taxes has
fallen and largely this is due to changes in the
calculation method for some US States. GBG
Americas has significant deferred tax assets
that have been revalued at the lower tax rate
resulting in a tax charge that is fully recognised
as a discrete item in the year to 31 March 2024.
The Group expects its future adjusted effective
tax rate to be approximately 25%.
Earnings per share
Basic earnings per share improved from a loss
of 47.5 pence to a loss of 19.2 pence reflecting
the reduction in the non-cash goodwill
impairment charge.
Adjusted earnings (adjusted operating profit
less net finance costs and adjusted tax)
decreased to £39.0 million (FY23: £42.1
million) due to the higher net finance cost and
higher adjusted tax charge. This resulted in a
7.7% decrease in adjusted diluted earnings per
share from 16.4 pence to 15.1 pence.
The basic weighted average number of shares
at 31 March 2024 increased minimally to 252.6
million (FY23: 252.2 million), due primarily to
the full year impact of shares issued during the
prior year.
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Financial Statements
Annual Report 2024
34
Deferred and accrued revenue
Deferred revenue at the end of the year
decreased by 2.1% to £55.3 million (FY23:
£56.5 million).
This balance principally consists of contracted
licence revenues and profits that are payable up
front but recognised over time as the Group’s
revenue recognition criteria are met.
The deferred revenue balance does not
represent the total contract value of any future
unbilled annual or multi-year, non-cancellable
agreements as the Group more typically
invoices customers in annual or quarterly
instalments. The deferred revenue balance
at any point in time is determined by several
factors, including seasonality, the compounding
effects of renewals, invoice duration, invoice
timing, FX rates and new business linearity
within a reporting period.
Accrued revenue at the end of the year
increased by £6.9 million to £14.5 million (FY23:
£7.6 million). This increase was primarily due to
timing differences with several larger contracts,
mostly in the Fraud and Location segments,
signed or renewed during the year where the
revenue recognition profile is different to the
invoicing profile.
Cash flows
Group operating activities before tax payments
and exceptional items generated £57.8 million
of cash (FY23: £42.5 million) representing an
Adjusted EBITDA to operating cash conversion
ratio of 90.6% (FY23: 67.3%).
Following the specific and non-recurring factors
impacting cash conversion during the prior year,
the operating cash conversion has returned to
a level more consistent with previous years and
GBG’s medium-term guidance.
During the year to 31 March 2024, net
repayments against the RCF were £23.0
million, resulting in outstanding balances of
$129 million (FY23: $149 million) and £nil
(FY23: £7 million).
Overall, our net debt at 31 March 2024
decreased to £80.9 million. This was
despite the £10.1 million full year dividend
payment, £1.2 million payment of contingent
consideration related to the Cloudcheck
acquisition and exceptional cash costs of £5.4
million. Offsetting these costs were a positive
£1.8 million retranslation impact from the
conversion of the non-sterling denominated
cash and debt into pound sterling and a £1.3
million receipt following the sale of an owned
property during the year.
Further detailed analysis of this movement
is included in the Consolidated Cash Flow
Statement.
We were pleased to obtain approval for
the exercise of the second of the one- year
extension options on the existing revolving
credit facility. Extending the length of the
facility through to July 2027 provides a
platform to support investment in organic
growth and potential future M&A activity.
Dividend
At the AGM, the Board of Directors will propose
a final ordinary dividend of 4.20 pence per
share (FY23: 4.00 pence), amounting to £10.6
million (FY23: £10.1 million).
If approved, this will be paid on 2 August
2024 to ordinary shareholders whose names
appear on the register of members at the
close of business on 21 June 2024. The Group
continues to operate a Dividend Reinvestment
Plan, allowing eligible shareholders to reinvest
their dividends into GBG shares.
In proposing the FY24 final dividend
amounting to £10.6 million, the Directors have
assessed each of the components of equity at
31 March 2024 and assessed how much of
each component is considered distributable
in accordance with applicable guidance. The
Company has assessed that £86,739,000
of Merger Reserve recognised upon the
acquisition of Acuant Intermediate Holding
Corp is considered to be a realised profit, as
a realised loss has been recognised on the
impairment of the related asset – being the
investment in GBG (US) Holdings LLC.
Therefore, the Directors consider that there
are sufficient distributable reserves available
at 31 March 2024 for the declaration of this
dividend.
Treasury policy and financial risk
The Group’s treasury operation is managed
by a Treasury Committee within formally
defined policies and reviewed by the Board.
The Treasury Committee meets on a regular
basis to review cash flow forecasts, covenant
compliance, exposure to interest rate and
foreign currency movements and make
recommendations to the Board based on these
reviews.
The Treasury Committee receives weekly
cash information to monitor liquidity across
the Group and ensure that significant cash
outflows, such as acquisition payments,
dividends and loan repayments, could be made
without exposing the Group to undue risk.
The Group finances its activities principally
with cash, short-term deposits and borrowings
but has the ability to draw down up to £72.8
million of further funding from a committed
revolving credit facility. Other financial assets
and liabilities, such as trade receivables and
trade payables, arise directly from the Group’s
operating activities. Surplus funds of the Group
are used to repay the RCF, whilst ensuring that
a suitable operational level of cash is retained.
The Group is exposed to a variety of financial
risks including: market risk (including foreign
currency risk and cash flow interest rate risk),
credit risk and liquidity risk which are described
in note 28 to the accounts. It is not the Group’s
policy to engage in speculative activity or to
use complex financial instruments.
Approved by the Board on 10 June 2024
David Ward
Chief Financial Officer
10 June 2024
Operating cash conversion
has returned to a level more
consistent with previous
years.
Financial review continued
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Financial Statements
Annual Report 2024
35
Principal risks and uncertainties
Risk management overview
GBG’s approach to risk management is
described in GBG’s Risk Management
Framework (‘RMF’) document. The
framework is owned by the Board, applies
globally and is aligned to external risk
management best practice. The framework
is reviewed and signed off by the Board at
least annually.
‘Risk management is fundamental to enabling safe
delivery of GBG’s business strategy and achievement of
our purpose.’
GBG's risk strategy recognises that trust is built by proactively
identifying and managing the risks that exist as a natural
consequence of doing business. Key to GBG’s risk strategy is
the nurturing of a positive risk culture. Business processes,
training and communications ensure all team members at GBG
understand their role when it comes to managing risk.
‘GBG’s risk management processes are continually
assessed and matured.’
GBG’s Chief Regulation Officer (‘CRO’), together with GBG’s
Global CISO & Risk Manager, provide independent updates to
the Board and Audit & Risk Committee on the effectiveness of
the RMF.
Both the CRO and CISO & Risk Manager have direct access
to the Chair of the Board and the Chair of the Audit & Risk
Committee and attend the Audit & Risk Committee meetings to
provide their independent view about the management of risk.
Overall, as reported to the Board, the RMF is considered
effective. Enhancements implemented in this reporting period
include:
• establishing a new Executive Business Risk Committee;
• enhanced risk reporting;
• key risk indicators for top risks;
• simplified and updated risk registers;
• updated risk policies;
• scenario assessment;
• improved risk training; and
• continued risk assessment activity.
External risk environment
External global events which have the potential to adversely
impact GBG are monitored closely:
Middle East conflict
GBG does not have any operations impacted directly by the
conflict in the Middle East. A small technical GBG team is based
in Israel and have access to personal support if required. As with
any global technology company it is the potential for escalation
with resultant impact on political and economic stability which is
the main concern.
Conflict in Ukraine
GBG’s exposure to the impacted regions remains negligible.
Recognising the potential for further risks to arise, controls
remain tight, and there continues to be no appetite to do
business with Russian-based entities.
External economic conditions
The global economy continues to create challenging conditions
for our customers and our team members. Interest rates remain
high, inflation and high energy prices continue to have an
adverse impact on real incomes and exchange rates continue
to fluctuate. However, impacts have stabilised, as is evident in
GBG's risk profile.
Climate change
Climate change poses an increasing risk to businesses
worldwide. Extreme weather events, rising sea levels, and
changing regulatory landscapes can disrupt operations. Given
the nature of GBG’s business activities, this is not currently
considered a material risk to GBG, however this situation is
assessed regularly.
Artificial Intelligence (AI)
At GBG we are creatively incorporating AI, while diligently
managing the potential risks. AI has the potential to
revolutionise our products and our ways of working. It presents
exciting opportunities for GBG to automate workflows, enhance
efficiency, and improve GBG products and services. Alongside
these benefits, there are significant risks to consider and we
are proactively identifying these risks and finding solutions to
enable safe AI use within GBG.
GBG’s Risk Management
Framework
Risk culture
1
Risk strategy and
risk appetite
2
Roles and responsibilities
3
Risk processes
4
Strategic Report
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Financial Statements
Annual Report 2024
36
The key elements of GBG’s risk management framework are as follows:
Risk culture has a significant impact on GBG’s
ability to manage risk and helps make sure
activity which is outside of risk appetite is
not undertaken. GBG’s Executive Team is
responsible for establishing, communicating
and promoting the Board’s expected risk
culture, which aligns with GBG’s strategy,
objectives and risk management principles.
At GBG, a positive proactive risk management
culture is expected and embedded within our
values and behaviours.
GBG’s risk strategy is embedded within the
Company’s objectives and strategic aims.
GBG’s risk strategy is to proactively identify,
measure and report the risks that exist as a
natural consequence of doing business. GBG’s
risk management strategy includes investing
in appropriate levels of control to keep GBG
secure, support sustainable business growth
and minimise losses.
Risk appetite is defined as ‘the amount and
type of risk that we are prepared to seek,
accept or tolerate.’ The risk appetite framework
is built around the principle of setting the risk
appetite in line with business strategy and
aligned to controlling key risks. The Board
approves appetite statements which are then
translated into policy and process. We use
key risk indicators to measure risk appetite
performance against agreed thresholds.
Risk culture
1
Risk strategy and
risk appetite
2
Roles and responsibilities
3
The Board
The Board reviews the recommendations
made to it by the Audit & Risk Committee and
oversees strategic risk through our strategic
planning cycle. During the year, the Board is
also updated on a range of risk topics. These
have included:
• monitoring and reviewing Group strategy;
• new product and technology updates;
• going concern reviews;
• information security plans;
• people initiatives;
• relationships with investors;
• governance and regulatory developments;
• economic conditions; and
• anti-bribery and corruption risk.
The Board reviews other risk areas including
remuneration policy at the Remuneration
Committee succession planning at the
Nomination Committee and environmental,
social and governance risks at the ESG
Committee.
Audit & Risk Committee
The Committee assesses and monitors
progress in managing GBG’s key risks and has
responsibility to review the effectiveness of the
RMF making recommendations to the Board
about any changes that may be required. The
Committee agrees the internal and external
audit plans.
The Executive Committee
As well as owning GBG’s key risks, the
Executive Committee members are
responsible for promoting the Board’s risk
culture and reviewing and monitoring how
much risk GBG is willing to tolerate (as set by
the Board and within Board's risk appetite).
Business Risk Committee
This Business Risk Committee focuses on risk
management performance, reviewing material
new risks, key risk indicators, the root cause
of any material incidents as well as tracking
the completion of actions raised from audits
and assessing risk readiness for new product
launches or significant change initiatives.
Specialist risk management teams
Specialist teams help manage GBG’s key risks.
In information security, compliance, legal
and risk, experts are responsible for Group
policy and help everyone at GBG understand
their role in the identification, assessment and
management of key risks and issues.
Auditors
GBG adopts the ‘three lines model’. Internal audit activity is coordinated by GBG’s Chief
Regulation Officer. Audits are conducted to assess controls over key risks e.g. Information
Security. Internal audits are either led by in-house teams or, where specialist skills are required,
independent third-party auditors. Findings and recommendations are reported to the Audit &
Risk Committee. Further assurance is obtained from external independent bodies who conduct
periodic reviews in order for GBG to maintain certain accreditations. Whilst external bodies may
not have the familiarity with GBG that the internal audit has, they bring a valuable perspective.
Principal risks and uncertainties
Strategic Report
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Financial Statements
Annual Report 2024
37
Principal risks and uncertainties continued
GBG has a four-stage process
for managing risk. This involves:
1
Identification
Identifying the risks that could occur and
building a ‘risk taxonomy’ so we have a
common language for thinking about risk.
2
Assessment
Implementing control improvement plans
and escalating where required.
3
Management
Assessing the level of risk considering
the impact and likelihood of a risk, after
consideration of controls effectiveness.
4
Monitoring and Reporting
Reporting the level of risk and quality
of controls.
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Risk policies
GBG’s policy framework is global and sets the standards and
expectations that must be observed when working and doing
business across the various jurisdictions where we operate.
Policies align with the top risks and, where necessary, team
members are required to attest to having read and understood
the policy.
Risk training
All team members participate in regular training on key risk
topics. Everyone is reminded routinely of the importance of their
role in managing risk in GBG. Where necessary, team members
are required to complete online assessments to make sure
they have understood what they have learnt and are meeting
regulatory expectations.
Risk incident management
Mechanisms are in place to report and manage internal and
external incidents which impact or could impact GBG adversely.
Business continuity, disaster recovery and incident management
plans are in place and periodically tested. We closely monitor
levels of business disruption and these remain low.
Risk processes
4
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Annual Report 2024
38
Risk Categories
GBG has identified five principal categories of risk that we face as a business.
Operational risks
The risks that affect GBG’s ability
to execute our strategy.
Privacy risks
Risks relating to failure to prepare
for privacy changes which impact
the business.
Financial risks
Risks relating to market, liquidity
and credit risks.
Strategic risks
Risks that affect or are created by
GBG’s strategic objectives.
Conduct risks
Risks relating to GBG’s legal
and regulatory compliance.
Board Risk Appetite Statement:
GBG has minimal appetite for
operational disruption which could
adversely impact our customers or
reputation. We have low appetite for
financial loss arising from inadequate
systems, process, people or external
events. We implement appropriate
levels of control to maintain
operational resilience while growing
sustainably.
Board Risk Appetite Statement:
GBG expects to meet all relevant
privacy rules and regulations in the
countries within which GBG operates.
We have no appetite for major
breaches.
Board Risk Appetite Statement:
GBG maintains a prudent liquidity
profile to ensure we meet our short-
and long-term commitments and
a balance sheet structure that has
stable sources of funding. We aim
to deliver high quality consistent
earnings and have low appetite for
earnings shocks.
Board Risk Appetite Statement:
We maintain appetite for growth
from complementary, diverse
sectors which provide good long-
term investment returns. We offer
our products at prices which
appropriately balance risk, growth
and reward.
Board Risk Appetite Statement:
GBG aims to comply with all
relevant regulations and laws in
the jurisdictions within which we
operate. We seek to maintain robust
governance arrangements and meet
ethical, environmental and societal
expectations including transparent
tax behaviour.
Read more on risk description, mitigation
and progress on pages 41 to 45
Principal risks and uncertainties continued
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Annual Report 2024
39
Impact
Likelihood
1 Customer
2 Information Security
3 Competition
4 People
5 Financial
6 Technology Assets and
Service
7 Privacy Compliance
8 Legal
9 Operational Resilience
3
2
4
1
9
6
8
5
7
Risk heatmap – GBG’s top risks
Principal risks and uncertainties continued
GBG’s principal risks
GBG’s risk profile remains well controlled.
The latest principal residual risks are set out
below together with a summary of the control
measures and mitigations.
GBG risk profile
‘GBG’s risk profile remains stable and the
top risks are under control’
GBG, like all businesses face risks and
uncertainties. Our aim is to make sure that
we identity potential risks and manage to
acceptable levels. Overall, the risk profile is
considered stable; this is evidenced by low
levels of business disruption and few material
incidents.
A ‘top-down, bottom-up’ approach is taken.
Regular risk assessments are undertaken to
create risk registers the output of which are
reviewed by Executive Committee and the
Audit & Risk Committee to validate and ratify
the risk profile.
Read more on risk description,
mitigation and progress on pages
41 to 45
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Risk
categories
Risk
Description
Mitigation
Progress
1
Customer
Risk of a reduction in revenue
from existing customers caused
by internal or external factors e.g.
economic conditions impacting
demand or failure to meet customer
expectations.
• Customer needs-based, innovative product development
and adding value to existing customer integrations.
• Business plans focused on winning new business,
retaining business, and broadening the range of products
used by our existing customers.
• Prioritisation to make sure investment is correctly
targeted, without compromising the need for ongoing
investment in the business to support growth.
• Ongoing simplification of GBG’s onboarding processes.
• GBG recognise there are many factors that can have
an adverse impact on customer experience resulting in
a reduction in the use of GBG products and services.
Performance indicators are in place to measure these
factors.
• In addition to the close customer relationships that we
maintain we proactively seek ‘voice of customer’ feedback
so action can be taken on any weakness.
• GBG’s focus is on maintaining customer retention,
delivering to their service expectations and continuing to
expand and innovate our solutions to meet their needs.
2
Information
Security
The risk of cyberattacks breaching
controls, resulting in the loss or
compromise in the confidentiality,
integrity and/or availability of GBG
information assets.
• GBG operates an Information Security Management
System that provides a common baseline set of
information security controls to protect GBG information
assets wherever they are being used.
• GBG had a Security Operations function with access to
best of breed security tools.
• Threat and vulnerability detection is in place to inform the
risk position.
• All team members receive information security training
and must comply with this and all associated information
security policies.
• GBG meets and maintains international standards of
certification including ISO27001, PCI-DSS and FedRAMP
where appropriate.
• GBG regularly assess the risk level of all GBG’s critical
suppliers.
• As for all businesses the risk of cyberattack is significant
and continues to be treated as one of the main threats
to GBG. GBG aims to set the highest standards of
information security. To support this there is a programme
of continuous control improvement to make sure GBG is
truly secure and trusted.
• A team of skilled security professionals is in place led by
the Global Chief Information Security Officer and Risk
Manager supported by regional security leadership.
• GBG successfully maintained external certifications,
where required.
• Further investment has been made in systems and
expertise, notably threat and vulnerability management.
• Controls continue to be tested regularly and security
event management remains strong as evidenced by no
major incidents in this reporting period.
Key
Increased
Decreased
Stable
Principal risks and uncertainties continued
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Annual Report 2024
41
Principal risks and uncertainties continued
Risk
categories
Risk
Description
Mitigation
Progress
3
Competition
Risk of being undercut on price,
reducing margins, or competitors
introducing new products which
would make GBG uncompetitive.
Linked to this is the risk that we fail
to respond to meet opportunities
when they arise, or we see
unexpected shifts in customer or
market demand.
• GBG works to identify and manage trends, threats and
opportunities, pursuing a business strategy that seeks
to build a strong reputation in the industry and ensure a
sustainable future.
• Competition factors are incorporated in a thorough
strategic planning lifecycle, e.g. changes in competition,
market trends, regulatory changes limiting or opening
sources of data or creating market opportunity.
• Our business development, product and strategy teams
track the broad spectrum of privately held and publicly
listed peers in our markets and this information influences
the go-to-market strategy.
• We seek to organically differentiate product capability
adding data and functionality and deliver end-to-end
propositions for customers covering the Identity lifecycle.
• The product portfolio is continually enhanced, focusing
on innovation through a mix of organic investment to
fund development, partnering, acquisition and strategic
recruitment.
• There remains strong focus on extending GBG’s reach in
our core target markets such as the Americas, UK, EMEA,
and APAC.
• In a fragmented market, GBG’s acquisition strategy and
product development has enabled geographic and market
expansion increasing our competitive advantage in key
markets where our scale is an advantage. This has built
GBG into a profitable and cash-generative business that is
one of the largest pure-play identity providers.
• Although not a near-term priority for our capital allocation,
we maintain active monitoring of acquisition opportunities
which are continually being considered to further develop
GBG’s strategic aims and differentiate GBG from the
competition.
Key
Increased
Decreased
Stable
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Risk
categories
Risk
Description
Mitigation
Progress
4
People
There is a risk that GBG fails to
attract and retain talented team
members in a highly competitive
market, resulting in key skills gaps
and/or reducing our ability to grow.
• Key metrics are in place to monitor attrition rates, vacancy
levels and employee engagement levels by location and
business function to make sure appropriate corrective
actions are in place. GBG continues to invest in and offer
opportunities for team members’ growth and development
and maintains a focus on wellbeing.
• Total reward packages are competitive and regularly
benchmarked and reviewed.
• Options are available to identify and retain top talent.
GBG’s approach to flexibility of working practices
empowers all our team to manage their work commitments
and create a personal flexibility as they require, enabling
strong work/life balance.
• The Board’s effectiveness and skill set is monitored,
recruiting additional members where necessary. This
helps with succession planning, supplementing the
Board’s skill set and ensures GBG maintains strong,
independent Non-Executive Directors.
• Like many organisations, GBG operates in a competitive
market.
• The GBG annual team member survey of people
engagement continues to demonstrate high levels of
engagement right across the Group with 90% of team
members saying they would recommend GBG as a great
place to work.
• Year-on-year attrition levels are reducing. Vacancies
are closely managed to ensure the right team members
are in the right roles to enable the individual’s success
and that of GBG. This has led to us reducing the People
related risk.
• Inclusion and Diversity data collection is undertaken
enabling affirmative action where required.
5
Financial
Risk of losses arising from
movements in market variables
(e.g. FX and interest rates) or
loss through failures in credit
management processes or failure to
maintain liquidity.
• Financial Key Performance Indicators are in place for all
measures of financial performance, including net debt,
level of overdue receivables and leverage and interest
cover under our Revolving Credit Facility.
• These metrics are routinely reported to the Executive
Committee and Board to enable decision-making and
broken down by business unit and region.
• A Treasury Committee is in place to monitor and manage
liquidity and funding, interest rate risk, foreign exchange
(transaction and translation) counterparty credit risk and
operational risk.
• Group cash balances are reported on a weekly basis to
support cash flow forecasting. As set out in the going
concern statement in note 2.2, in the event of a forecast
liquidity issue, the Group has a range of measures
available to it to reduce cash outflows or access
alternative sources of funding.
• The management of operational risk will include the
segregation of duties, maintenance of accurate records,
reconciliation of key records, and close supervision of
financial risk management activities by the Treasury
Committee and Board.
• Financial risk remains well controlled. Financial risk KPIs
remain within appetite and are monitored closely.
• Whilst there is still volatility in the external environment,
foreign exchange rates have not been subject to the same
extreme fluctuations seen during FY23, and interest rates
are currently forecast to reduce during FY25, having risen
during FY24.
• The Board reviewed overall financial risk and agreed
that the risk remains relatively high but stable and under
control. Detailed progress is covered in the financial
sections of the Annual Report.
• In October 2023, we agreed the second of two one-year
extension options on our existing Revolving Credit Facility,
so that the Group has access to a £175 million facility until
July 2026 and £140 million until July 2027.
Key
Increased
Decreased
Stable
Principal risks and uncertainties continued
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43
Principal risks and uncertainties continued
Risk
categories
Risk
Description
Mitigation
Progress
6
Technology
assets and
services
Risk of loss, disruption or damage
because of the failure or inflexibility
of IT systems or IT services.
• Product and technology teams use methods, tools
and skills that reinforce best-practice development
approaches.
• The prioritised product & technology development
roadmaps ensure systems are maintained, performance is
optimised and end-of-life IT is carefully managed.
• Full lifecycle IT Service Management processes are in
place including detailed procedures covering incident and
problem management, change management, capacity
management, access management and risk management.
• Investment to modernise customer-facing platforms
continues, enabling the achievement of greater scale
and reach.
• New front-end platforms for the location business
and fraud services and a new back-end platform for
our identity solutions continue to be developed and
embedded.
7
Privacy
compliance
Risk of GBG global products and
services being non-compliant with
privacy rules and regulations.
• A dedicated legal and privacy global team is in place led
by the Chief Regulation Officer and Chief Privacy Officer.
• Working with business areas, this team are collectively
responsible for monitoring changes to legislation,
ensuring privacy compliance in GBG is ‘by design’, team
members understand what is required, making sure
effective controls are in place and that GBG delivers on
our regulatory obligations for all stakeholders.
• GBG also has access globally to a range of external
professional advisors, seeks to maintain a positive
relationship with regulators and undertakes continuous
monitoring to ensure processes are effective and team
members comply with privacy programme requirements.
• Internationally, privacy compliance rules and regulations
continue to develop and data subjects are also becoming
more aware of their rights.
• For GBG, privacy compliance is a top risk because of
the global nature of the business, use of customer and
supplier data to provide services and the changes to
products and services as we seek to innovate and grow.
• GBG has a robust privacy programme that applies globally
across GBG.
• Internal privacy controls are well understood, embedded
and robust.
• Data ethics and standards is a core element of GBG’s ESG
strategy.
• Investment in training will continue to ensure best practice
is maintained in respect of data handling and privacy.
Key
Increased
Decreased
Stable
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Risk
categories
Risk
Description
Mitigation
Progress
8
Legal
Risk of disruption or adverse
impacts due to unenforceable
contracts, lawsuits, adverse
judgements or other legal/
regulatory proceedings.
• GBG has a global legal team who are led by the Chief
Regulation Officer.
• The legal team actively monitors emerging legal risks
and new regulations, proactively advises on disputes and
issues and regularly reviews GBG’s contract templates to
mitigate risk and simplify.
• GBG instructs external counsel in each jurisdiction in
which it operates to supplement internal legal expertise,
as necessary.
• We continue to track the increasing number of new US
state regulations.
• Potential for US litigation/class action remains possible,
even where there is no case to answer.
• Whilst customers are increasingly demanding on
contractual terms, legal risk has remained stable
throughout this reporting period.
9
Operational
Resilience
Risk of unplanned interruption
impacting GBG ability to deliver
critical operations.
• Full lifecycle IT Service Management processes are
in place.
• Global 24/7 operational support is in place for all our
products and services.
• Availability and reliability of all GBG’s products and
services are continuously monitored.
• Service availability has remained strong.
• Any issues impacting service have been swiftly dealt with.
• A new Global Head of Service & Operations has been
appointed to continue to drive service and efficiency.
• Further resilience has been achieved through product
retirement and product modernisation initiatives e.g.
moving our ID3 product to the Cloud with different
regional availability zones and scale-up potential.
Key
Increased
Decreased
Stable
Principal risks and uncertainties continued
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45
Principal risks and uncertainties continued
Emerging risks
As ever, the risk landscape continues to evolve.
The assessment of major risks highlighted in
this year’s report recognises this fact. GBG
continually scans the horizon for regulatory
developments, market trends and changes
in customer expectations. It is this ability to
identify, assess and respond flexibly to these
changes that will ensure the sustainability of
the business.
In the last 12 months no new material risks had
to be escalated to the Audit & Risk Committee
as they remained within appetite.
Consideration is given to the impact of the
external environment, especially political
instability and economic factors like inflation
and interest rates on GBG, on our customers
and on GBG’s team members.
When necessary, we conduct reviews to make
sure our strategy is aligned to market and
competitive developments. There is a role for
GBG to guide our customers through changes
and trends, particularly in regulation, that will
impact their businesses.
AI creates opportunities for GBG, but also
risks. AI developments, and the potential for
fraud, could positively impact demand for some
GBG services e.g. our products can and do
detect 'Deep Fakes'. Building on our existing
capabilities in machine learning, allows AI to
be used and augment our current products and
services.
GBG proactively plans to ensure its
preparedness for the unexpected. Disclosure
in the media of cyberattacks causing loss or
disruption in well-known businesses are a
frequent occurrence. GBG always take the
opportunity to review such events and to
learn from the experience. The Board reviews
external security events, if any, which are
reported in monthly Board reporting. GBG
continues to invest in cybersecurity controls.
The implications of Russia’s ongoing invasion
of Ukraine, the potential for another global
pandemic, the evolving conflict in the Middle
East, and other political instabilities, highlight
the need to carefully consider our responses
to potentially major events, and in this
respect, GBG have tried and tested incident
management plans in place.
Viability statement
Our business model and strategic priorities are
key to the Board’s assessment of the Group’s
prospects and determination about whether
the Group can continue in operation and meet
liabilities as they fall due. We continuously
review these alongside forecasts and budgets
to have a clear view, so far as is possible, on
the Group’s viability over the medium term.
The Board’s assessment of viability is
influenced by the current and projected
performance of the business against financial
and non-financial KPIs and an analysis
of principal risks within the Group’s risk
assessment framework.
In particular, the assessment includes
consideration of the potential impact of
ongoing global conflicts such as those in
Ukraine and the Middle East, scenario planning
in the event of a change of government in the
Group’s key markets (with elections in the UK
and US during FY25), the impact of the external
economic environment, the impact of any
merger, acquisition and market consolidation
activity and the regulatory agenda.
Management currently forecasts a variety of
different time horizons relevant to assessing
our prospects as part of the business planning
process and capital investment cycle. We use
a detailed bottom-up budget model to forecast
for a period of one year in advance and a top-
down model for a period of five years.
We use a three-year timeline when considering
viability, because this aligns with the expiry of
our existing revolving credit facility which is
due to expire in July 2027.
The principal risks and uncertainties that
affect the Board’s assessment of the Group’s
viability in this period are operational, conduct,
strategic, privacy and financial risks. The Board
considers the key mitigants:
• GBG’s operations are spread across diverse
sectors and increasingly global presence in
regional markets with a history of political and
economic stability
• a history of limited business disruption
or major incidents due to investment in
commensurate controls
• strong cash reserves and access to pools
of liquidity
• continued customer demand for GBG’s
innovative and reliable products
• Board-approved prudent risk appetite
• being well placed to manage regulatory
change
Based on the actions available to them, the
Directors have a reasonable expectation that
the Group will be able to continue in operation
and meet its liabilities as they fall due over
the three-year period of their assessment. We
acknowledge that this assessment is subject
to uncertainties outside of our control and
accordingly, the viability of the Group cannot of
course be completely guaranteed.
In October 2023, we agreed the second of two
one-year extension options on our existing
Revolving Credit Facility, so that the Group
has access to a £175 million facility until July
2026 and £140 million until July 2027. Based
on current forecasts we would expect to have
fully repaid the current outstanding RCF facility
within the viability period.
Going Concern
The Group’s business activities, together
with the factors likely to affect our future
development, performance and position, are
set out in the CEO's review on pages 9 to 12.
The financial position of the Group, its cash
flows and liquidity position are described in the
Financial review on pages 32 to 35. Full details
of the Group’s going concern assessment is
set out in note 2.2 in the consolidated financial
statements on page 96.
Following consideration of the budget,
downside and stress test scenarios, the
Directors have a reasonable expectation that
the Company has adequate resources to
continue in operational existence beyond the
assessment period which covers through to
30 September 2025. Therefore, the Directors
continue to adopt the going concern basis
of accounting in preparing the consolidated
financial statements.
Strategic Report
Governance
Financial Statements
Annual Report 2024
46
Letter from our Chair
Dear Shareholder
On behalf of the Board, I am
pleased to present our Corporate
Governance Report for the
year ended 31 March 2024.
The Board’s view of robust
governance practices remains
unchanged, ensuring that we
operate at all times in a manner
that is consistent with the
highest corporate governance
standards.
In our Corporate Governance Statement on
pages 53 to 55 we describe in more detail the
current governance arrangements at GBG
and how we have applied the principles of
the Quoted Companies Alliance Corporate
Governance Code (the ‘QCA Code’).
This year the Non-Executive Directors have
spent a significant amount of time dedicated
to GBG and I am grateful for their commitment.
They have provided constructive challenge,
strategic guidance, offered specialist advice
and have held management to account. I firmly
believe the Board and its Committees contain an
appropriate combination of skills, experience,
and knowledge and they continue to be effective
at fulfilling our responsibilities to shareholders
and stakeholders. I was encouraged by the
results of this year’s annual Board Evaluation,
which showed year-on-year improvements
in many areas. Further details on this year’s
Evaluation can be found in the Nomination
Committee Report on pages 75 to 80.
Changes to the Board
During the year, we have continued to focus on
Board succession to ensure that we have the
appropriate balance of skills, experience and
diversity in order to support the business.
After seven years with GBG, Chris Clark
retired as Chief Executive Officer (‘CEO’) on
30 January 2024. I would like to thank Chris
for his valued contribution to the Board over
the last seven years and the significant impact
he made as CEO. Ahead of his retirement the
Board carefully considered its succession plan
and, following a transparent process led by
the Nomination Committee, Dev Dhiman was
promoted to the Board as our new CEO.
On 29 April 2024 we announced that
Natalie Gammon would be stepping down
as Non-Executive Director and Chair of
both Remuneration and ESG Committees
after the AGM on 23 July 2024. On the
same day we announced that, following a
rigorous recruitment process, the Nomination
Committee recommended to the Board that
Michelle Senecal de Fonseca be appointed as
her successor, as Chair of the Remuneration
and ESG Committee.
Further details with regards to the process
followed for both appointments to the Board
are provided in the Nomination Committee
Report on pages 75 to 80.
Environmental, Social and Governance
(‘ESG’)
The Board’s intention is to hand over the
business to our successors in a better and
more sustainable position for the future. We
recognise the focus that is required on the
contribution that a successful company can
make to both the environment and society in
general. We remain dedicated to ESG matters
and significant progress has been made against
our targets this year. More information on this
is provided in the ESG Committee Report from
Natalie Gammon on pages 81 and 82.
Annual General Meeting (‘AGM’)
AGM 2023
At the 2023 AGM, Resolution 6 (Report on
Directors’ Remuneration) received only 54%
of votes in favour and therefore did not pass.
At the time of the AGM the Remuneration
Committee consulted and engaged with
shareholders to understand and discuss their
views with respect to their voting in respect
of this resolution. The vote on the Directors
Remuneration Report is an advisory vote,
however the Remuneration Committee valued
the feedback they received on the Company's
remuneration arrangements and will continue
to engage constructively with shareholders on
future arrangements where appropriate to do so.
AGM 2024
The AGM will be held on 23 July 2024 which
shareholders can attend in person. We
consider the AGM to be an important event in
our calendar and a significant opportunity for
the Board to engage with our shareholders so
we do hope that you will take this opportunity
to join us and share your views with us.
This year at our AGM, we will be asking
shareholders to vote on the proposal to cancel
the entirety of GBG's share premium account.
This will create distributable reserves that
will be available to increase flexibility for the
future payment by the Company of dividends
to its shareholders and for any other general
corporate purposes, subject always to the
financial performance of the Group. Further
details can be found in the Notice of AGM.
If shareholders do have any questions
they would like to raise at the AGM, we
encourage you to send an email ahead of
the meeting to GBG’s Governance Team
(Governance@gbgplc.com).
Richard Longdon
Chair
10 June 2024
Letter from the Chair
47
Board of Directors
48
Governance at a Glance
50
Governance framework
51
Summary of Board activity
52
Corporate Governance statement
53
Audit & Risk Committee report
56
Remuneration Committee report
61
Remuneration policy
64
Annual Report on remuneration
69
Nomination Committee
75
Environment, Social and Governance
(ESG) Committee
81
Directors’ report
83
Directors’ responsibilities statement
86
Introduction to
Governance
Strategic Report
Governance
Financial Statements
Annual Report 2024
47
Board of Directors
Committee key
A Audit & Risk Committee
E ESG Committee
N Nomination Committee
R Remuneration Committee
Chair
Richard Longdon
Chair
Appointment date:
September 2022
Experience and skills:
Richard has had a highly successful career in
the technology sector. He spent 33 years with
AVEVA Group where he was Chief Executive
Officer for 17 years and has held a number of
Non-Executive Director and Chair roles since.
Richard’s previous Non-Executive positions
with UK-listed businesses include roles as
Chair of Ideagen Plc and Senior Independent
Non-Executive board positions at Alfa
Financial Plc and Fidessa Plc. He works with
businesses in the private markets, and has
previously served as a Non-Executive Chair
at Process Systems Enterprise Ltd and Non-
Executive Director at Prometheus Inc.
Current appointments:
Richard is serving as Chair of Causeway
Technologies Ltd and Rovco Ltd, in addition to
Non-Executive Board Director at Ideagen Ltd.
Committees:
A
N
R
E
David Ward
Chief Financial Officer
Appointment date:
July 2021
Experience and skills:
David joined GBG as CFO in May 2021 and was
appointed to the Board in July 2021. Prior to
joining GBG, David spent 10 years (including
2 years as CFO) at AVEVA Group, the global
Industrial Software Company. He led the
Finance, Legal and Commercial Operations
teams and was heavily involved in the M&A
and Integration that delivered significant value
to shareholders and lifted AVEVA to the FTSE
100. David trained as a Chartered Accountant
with Ernst & Young where he spent 14 years.
He holds a Bachelor’s degree in Economics
and Accounting and is a Fellow of the Institute
of Chartered Accountants in England and
Wales.
Current appointments:
David has no external appointments.
Committees:
E
Dev Dhiman
Chief Executive Officer
Appointment date:
January 2024
Experience and skills:
Dev joined GBG in 2020 as Managing Director,
Asia Pacific. Under his strong leadership
the region experienced significant growth
in terms of footprint, customers, products
and team. Prior to joining GBG, Dev spent 12
years at Experian, where he held a variety of
senior positions across their EMEA and APAC
businesses. Dev brings significant international
experience having operated and led teams
in more than 30 markets. Dev trained as a
Chartered Accountant with Deloitte where he
spent 3 years and holds a Bachelor’s degree in
Economics from the University of Nottingham.
Current appointments:
Dev has no external appointments.
Committees:
N
E
Liz Catchpole
Senior Independent Non-Executive Director
Appointment date:
September 2017
Experience and skills:
Liz has over 20 years Executive Board level
experience. Her career started in insurance
with a subsidiary of GE Capital where she
worked for 17 years and was then CFO of
Swiss Re Life and Health. Liz has over 10
years Non-Executive Board experience and
has previously held a number of other Non-
Executive appointments including FTSE listed
bwin.party and British Gas, where she was
also Audit Chair and until 31 December 2023
she was independent Non-Executive Director
and Audit Chair at Investec Wealth. Liz is a
Chartered Certified Accountant and holds an
MBA from Cranfield University.
Current appointments:
Liz is serving as Independent Chair of tp
bennett, a U.K. architectural and design
practice and Independent Non-Executive
Director and Audit Chair at Asta, the leading
third-party managing agent at Lloyd's of
London.
Committees:
A
N
R
E
Strategic Report
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Financial Statements
Annual Report 2024
48
Natalie Gammon
Non-Executive Director
Appointment date:
November 2019
Experience and skills:
Natalie has over 20 years of global technology,
commercial and operational experience with
a demonstrable track record of successful
digital, strategic and transformational change
programmes in both private equity and blue-
chip companies. Natalie also undertakes an
advisory role at a number of technology start-
ups. Natalie was previously Chief Cloud Officer
for Finastra, a member of the Audit, Risk
Remuneration and Nomination Committees
at Masthaven Bank and more recently, an
independent member of the Audit Committee
of the National Trust.
Current appointments:
Natalie has no key external appointments.
Committees:
A
N
R
E
Michelle Senecal de Fonseca
Non-Executive Director
Appointment date:
May 2024
Experience and skills:
Michelle has over 27 years of experience in the
international telecommunications and technology
sectors. Her executive career has included
being the Global Director of Cloud and Hosting
Services at Vodafone and Global Vice President,
Cloud Innovation Strategic Partnerships at
Citrix Systems. Michelle has previously worked
at the European Bank for Reconstruction and
Development where she managed the Telecom,
Media and Technology Banking team. Michelle
holds a Bachelor of Science degree in Business
and Political Science from the University of
Kansas and an MBA from the Thunderbird School
of Global Management.
Current appointments:
Michelle is a Non-Executive Director at
Alphawave IP Group plc, FDM Group plc and
Redcentric plc, where she also serves as Chair
of the Remuneration Committee. She is co-
founder and Board member of the networking
group Women in Telecoms and Technology, a
UK not-for-profit organisation and also a global
council member at Thunderbird School of Global
Management in Phoenix, Arizona.
Committees:
A
N
R
E
Annabelle Burton
Group Company Secretary
Appointment date:
March 2021
Experience and skills:
Annabelle has 20 years experience in
governance, compliance and company law.
Annabelle originally joined GBG’s Governance
Team in 2007 and has held a number of roles
since this time both within GBG and externally.
Annabelle has a passion for governance and
a pragmatic approach to how the Governance
Team supports the wider business. She is a
Fellow of the Chartered Governance Institute
(FCG) and holds a Bachelor of Laws degree.
Annabelle is Secretary to all Committees.
Bhav Singh
Non-Executive Director
Appointment date:
November 2021
Experience and skills:
Bhav is the founder and Group Chief Executive
Officer of Sandbox Group, a leading digital
learning company. Prior to founding Sandbox
in 2015, Bhav built and scaled high growth
businesses as President and Chief Executive
Officer of Pearson English and at Paramount
Global (previously ViacomCBS) as Managing
Director and Executive Vice President of
the emerging markets group. Bhav has also
held senior roles across digital, general
management and business development
with Manchester United, IMG and Discovery
Communications.
Current appointments:
Bhav is Chief Executive Officer of Sandbox
Group and serves as Non-Executive Director at
BBC Commercial. He is a member of the World
Economic Forum as a Young Global Leader.
Committees:
A
N
R
E
Changes to the Board
Chris Clark
Outgoing Chief Executive Officer
Chris joined GBG as Chief Executive
Officer in April 2017. Before joining GBG
Chris was Managing Director at Experian
for five years, and previously worked at BT
for 20 years. Chris has lived and worked
in the USA, Europe and Asia, as well as
the UK and has significant international
experience. Chris resigned from the Board
on 30 January 2024.
N
E
Board of Directors
Committee key
A Audit & Risk Committee
E ESG Committee
N Nomination Committee
R Remuneration Committee
Chair
Strategic Report
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Governance at a glance
Board
member
Board
meetings
Committees
Audit & Risk
Remuneration
Nomination
ESG
Dev Dhiman1
11
3
N/A
N/A
4
2
3
2
David Ward
11
11
N/A
N/A
N/A
3
3
Richard
Longdon
11
11
5
5
4
4
4
4
3
3
Liz Catchpole
11
11
5
5
4
4
4
4
3
3
Natalie
Gammon
11
11
5
5
4
4
4
4
3
3
Bhav Singh2
11
9
5
5
4
4
4
4
3
2
Chris Clark3
11
8
N/A
N/A
N/A
3
1
See pages 56
to 60
See pages 61
to 63
See pages 75
to 80
See pages 81
and 82
1. Dev joined the Board on 30 January 2024. He has attended all Board and Committee meetings since his appointment.
2. Bhav was unable to attend one scheduled Board and ESG Committee meeting, he sent apologies. He was also unable to attend one unscheduled Board meeting due to a
prior commitment.
3. Chris attended all Board meetings until his resignation from CEO on 30 January 2024. He attended one of two Nomination Committee meetings scheduled prior to his
resignation as one meeting related to his succession.
Key
Number of meetings held
Number of meetings attended
Chair
Male
67%
Female
33%
Diversity
0-2 years
66%
3-5 years
17%
6-10 years
17%
Tenure
Strategy
Sector
Finance
International
Board Composition
as at 31 March
Board and Committee Attendance
100%
50%
50%
83%
Relevant experience
Strategic Report
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50
Supports the Board in its work with specific areas of review and oversight objectives and risk management.
They ensure the right Company structure is in place to deliver long-term value to shareholders and other stakeholders.
Audit & Risk Committee
Oversees the Company’s financial
reporting and risk management
processes.
See pages 56 to 60
Remuneration Committee
Determines and agrees the broad policy
for the remuneration of the Executive
Directors, Chair and other Senior
Executives.
See pages 61 to 63
Nomination Committee
Assists the Board in discharging its
responsibilities relating to the composition
and make-up of the Board and any
Committees of the Board.
See pages 75 to 80
ESG Committee
Defines the Company’s strategy relating
to ESG matters and ensure the strategy
remains effective and up-to-date,
maintaining regular recommendations
to the Board.
See pages 81 and 82
Board Committees
Governance framework
The Board has a robust corporate
governance framework, as illustrated below,
with clearly defined responsibilities and
accountabilities.
The Terms of Reference for the Board and
each Committee can be found on the website
Led by the Chair, the Board which is made up of a majority of independent Non-Executive Directors, provides leadership
and is responsible for the overall management of GBG, its strategy, long-term objectives and risk management. It ensures
the right structure is in place to deliver long-term value to shareholders and all stakeholders.
Board
The CEO and CFO lead the team responsible for the day-to-day operational management of the business and overseeing
the implementation of the strategy as delegated by the Board. They are supported, from time-to-time, by additional
Committees made up of the Group’s most senior leaders.
The Executive Committee
Business Risk Committee
A GBG Executive led non-financial risk committee that
facilitates Executive focus on the management of GBG’s key
non-financial risks.
Executive Team
Responsible for overseeing the day-to-day running of
the company; monitoring performance; prioritisation and
allocation of resources; people, talent and culture.
Treasury Committee
A committee that manages GBG’s financial risk to
minimise the adverse effects of fluctuations in the
financial markets, on the value of GBG’s financial assets
and liabilities.
These are designed to safeguard and enhance
long-term shareholder value and provide a platform
to realise the Company’s strategy.
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Financial Statements
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51
Summary of Board activity
People
Governance
Strategy
Financial
Reviewed regular updates from the Company
Secretary on developments to Corporate
Governance reporting
Conducted the annual evaluation of the Board
and its Committees
Approved our 2023 Modern Slavery Statement
Received an update on AIM obligations and
market developments from our nominated
advisor
Received updates from our legal advisors
on Director Duties and Responsibilities and
updates to Corporate Governance regulation
and best practice
Reviewed and approved updates to all Board
policies
Considered and approved the CEO transition
including approval of the appointment of Dev
Dhiman to the Board
Updated on succession plans for senior
leadership positions
Discussed and approved new share option
awards including the performance share plan
and restricted share plan
Discussed the results of our annual employee
engagement survey (Q12) and put in place
action plans to deal with any issues identified
Discussed the findings of our 2024 Gender
Pay Gap Report
Held our annual Board strategy sessions to
discuss our ongoing vision, the direction of our
business and our strategic priorities
Received and reviewed regular reports from the
Executive Team on progress against strategic
objectives, as well as risk management and
operational matters
Reviewed key risks that may threaten our
strategy, such as cyber risk and data privacy.
Also considered climate risk and made sure
appropriate action plans were in place
Received a number of presentations on our
ESG strategy and the progress against it
Reviewed and approved the financial Budget
Considered the impact of macro uncertainty
on the going concern status of the Group
and conducted various stress tests against a
number of scenarios to test resilience of the
Group cash forecasts
Reviewed and approved the half and full year
announcements and the Annual Report and
Accounts
Approved the quantum of shares to be used for
the PSP, RSP and Sharesave schemes
Approved the proposal to convert the Share
Premium to distributable reserves
Received regular updates on meetings with
investors
In common with other public companies,
reviewed and responded to an FRC enquiry
in relation to the 2023 Annual Report and
Accounts
Strategic Report
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Since 2018 GBG has adopted
and observed the governance
principles set out by the Quoted
Companies Alliance (‘QCA’)
Corporate Governance Code
(the ‘QCA Code’). The Board
believes that its adherence to
the QCA Code has provided a
strong foundation for delivering
shareholder value.
We have set out this year’s statement using
the 10 principles from the QCA Code. The
full disclosure of our Corporate Governance
arrangements against the QCA Code can be
found on our website.
Corporate Governance statement
Principle
How we comply
Further reading
1 Establish a strategy and
business model which
promote long-term
value for shareholders
Our strategy is designed to deliver long-term, sustainable growth in a dynamic
and growing global industry. Our business model is centered around four key
focus areas which will enable us to deliver on our purpose of ‘building trust in a
digital world’. The Chair and CEO work closely to ensure the direction is strong
and messages are understood. The Board held its annual Board Strategy event
over two days in November 2023 covering its key priorities with a focus on long-
term strategic growth.
The Strategic Report on pages
3 to 46 sets out the Company’s
business model and strategy.
2 Seek to understand and
meet shareholder needs
and expectations
Communication with shareholders is given high priority by the Board. The
Executive Directors and, where appropriate, other members of the Board
communicate regularly with institutional investors and sell-side research analysts
through press releases, general presentations at the time of the release of the
annual and interim results and additional meetings throughout the year.
Understanding what investors and sell-side research analysts think about GBG
and, in turn, helping them understand our business, is a key consideration as we
take strategic decisions and allocate investment to drive the business forward.
We share feedback from these meetings with the Board. The Board considers
this information to make sure there is a clear understanding of the views of
shareholders.
More detail on how we engage
with our shareholders can be
found within the Stakeholder
Engagement section on
page 16.
3 Take into account wider
stakeholder and social
responsibilities and
their implications for
long-term success
Understanding the views and issues raised by our stakeholders forms a key part
of the Board’s decision-making process. The Company invests in and works
consistently to develop and strengthen the relationships it has with all of its
stakeholders, to understand their needs and requirements.
The regular flow of information to the Board provides context and ensures that
the Directors are made aware of the interests of our stakeholders and the key
matters affecting them when Directors consider the Group’s strategy and take
decisions. To assist the Board, all papers requiring material decisions include
clear explanation as to the expected impact on those stakeholders relevant to the
decision, whether positive or negative.
How the Company obtains
stakeholder feedback is
contained in the Stakeholder
engagement section on
page 16.
Approach to wider stakeholder
social and environmental
responsibilities is set out in our
ESG Impact Report.
New QCA Code
In November 2023 the QCA launched an
updated Corporate Governance Code (the
‘2023 Code’). While maintaining the core
10 corporate governance principles, the
2023 Code has been revised to align with
evolving investor expectations. The 2023
Code will formally apply to financial years
beginning on or after 1 April 2024, with
the first disclosures required in the 2025
reporting season. We have performed a
gap analysis of our current governance
framework in comparison to the Principles
outlined in the 2023 Code. GBG are largely
compliant with these Principles and we will
commence reporting in alignment with the
2023 Code in due course.
Read GBG's full Corporate
Governance Statement
Strategic Report
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Financial Statements
Annual Report 2024
53
Corporate Governance statement continued
Principle
How we comply
Further reading
4 Embed effective risk management,
considering both opportunities and threats,
throughout the organisation
The Board recognises its responsibility for determining the nature and extent of the principal
risks the Group has to consider in order to achieve its strategic objectives. GBG has an
enterprise-wide risk management framework, embedded within business processes making
sure everyone, across the whole Group, understands their role when it comes to managing
risk. The Audit & Risk Committee reviews the suitability and effectiveness of risk management
processes and internal controls on behalf of the Board. Regular assurance activities are
conducted, both internally and externally.
Further details of the Group’s approach to risk
management, together with a full description of
the key risks faced by the Group, are set out on
pages 36 to 46.
5 Maintain the Board as a well-functioning,
balanced team led by the Chair
On appointment, each Non-Executive Director receives a letter of appointment setting out,
among other things, their term of appointment, the expected time commitment for their
duties to GBG and details of any committee memberships. The Board has strong independent
representation, a good balance of skills between the Executive and the Non-Executive
Directors and a good balance of both gender and ethnicity. Directors are subject to re-election
by shareholders.
Executive Directors dedicate a full-time commitment to the Company. Non-Executive Directors
allocate sufficient time to effectively discharge their responsibilities. For 2023 this included the
preparation for, attendance at, and dealing with actions arising from all Board and Committee
meetings. The Chair and Company Secretary keep Board processes under review to develop
and formalise, including conducting detailed annual planning and agenda setting. This results
in the Board and its Committees receiving high quality, accurate and timely information on a
regular basis. The Board and its Committees are evaluated annually.
Detail on the Board's structure and composition
can be found on page 51.
For more detail on Board activity during the
year, please see page 52.
For a breakdown of Board and Committee
attendance, please see page 50.
For full details of the Annual Board Evaluation
see the Nomination Committee Report on pages
75 to 80 and Principle 7 below.
6 Ensure that between them, the Directors
have the necessary up-to-date experience,
skills and capabilities
All Directors are professionally active. Each has demonstrated that they possess the
appropriate skills, capabilities and experience for the roles they perform, including as members
of the various Board Committees. The skills and experience of the Board are reviewed annually
to ensure the ongoing effectiveness of the Board and that we have the right combination of
skills and knowledge. This begins with an induction for all new Directors which is tailored to
meet any specific requirements. All Directors have access to the Company Secretary and are
provided with access to key policies and up to date Terms of Reference for each Committee.
From time-to-time, the Board invites its professional advisors to Board meetings for legal and
regulatory updates. Each Director can discuss any development needs with the Chair at any
time. All Directors are encouraged to strengthen and refresh their knowledge by attending any
workshops, seminars and courses relevant to their respective roles.
Information on the activities of the Nomination
Committee in terms of reviewing Board
structure, size and composition and Director
Inductions is on pages 75 to 80.
7 Evaluate Board performance based on clear
and relevant objectives, seeking continuous
improvement
The Board undertakes regular assessments of its effectiveness, ensuring alignment with the
needs of the business. The Chair maintains ongoing communication with Board members to
address any concerns. The Board carries out an externally facilitated Board Effectiveness
Review every three years. This was last conducted in FY22 by Boardclic. The Board also
conducts an internal review of its effectiveness during the intervening period via an online
questionnaire.
Further information regarding the Board
Evaluation process, along with its outcomes
and recommendations, can be found in the
Nomination Committee Report on pages 75
to 80.
Strategic Report
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Financial Statements
Annual Report 2024
54
Principle
How we comply
Further reading
8 Promote a corporate culture that is based
on ethical values and behaviours
The Board embraces its role in setting the high standard for corporate culture at GBG which
focuses on ensuring the delivery of long-term value to shareholders whilst stressing the vital
importance of engaging effectively with relevant stakeholders.
GBG has also established a robust compliance framework to regulate its activities in respect of
business conduct, including: modern slavery, anti-bribery and anti-corruption, data protection,
whistleblowing, non-facilitation of tax evasion and closely monitors compliance with these. The
Group has a Diversity and Inclusion Policy which the Board oversees adherence to. Through our
‘Trust(ed)’ programme, our leaders ensure that there is a culture of safe behaviour, by allowing
an exchange of views in an open and honest environment.
More information on our culture, tone from the
top and how this links to our business model
can be found in our ESG Impact Report.
9 Maintain governance structures and
processes that are fit for purpose and
support good decision-making by the Board
Our Board believes that good corporate governance is essential for building a successful and
sustainable business in the long-term interest of all our stakeholders. The Board has a robust
management framework with clearly defined responsibilities, it sets the direction for the Group
through a formal schedule of matters reserved for it to decide on.
GBG's Governance Framework can be found on
page 51.
10 Communicate how the Group is governed
and is performing by maintaining a dialogue
with shareholders and other relevant
stakeholders
This Corporate Governance Statement sets out how the Board communicates to shareholders
and other relevant stakeholders how the Company is governed. Shareholders are encouraged
to arrange meetings with the Board should they wish to address any specific matters.
We have a dedicated investor relations senior manager who can be contacted via
mail_investor@gbgplc.com.
The Board receives regular updates on the views of shareholders through reports from its
brokers and from Directors following shareholder engagement. Analyst notes are reviewed and
discussions held with the Company’s brokers to maintain a broad understanding of varying
investor views.
We work closely with our customers, to understand the challenges they are experiencing and
provide solutions that will help.
For our people we run an engagement survey twice a year (the Q12 survey) to give all team
members a voice and allow us to identify, listen and respond to any feedback that might affect
engagement. Following the Q12 results, GBG’s leadership team must champion action plans in
each of their business areas for any improvements that need to happen.
Principle 2 above details how the Company
maintains an active dialogue with its
shareholders through a planned programme of
investor relations activity.
Examples of the impact we have had through
dedicated customer engagement can be found
on page 16.
More information on the results of this year’s
Q12 surveys can be found in our ESG Impact
Report.
Corporate Governance Statement continued
Strategic Report
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Financial Statements
Annual Report 2024
55
Audit & Risk Committee
Liz Catchpole
Committee Chair
The Audit & Risk Committee is responsible
for ensuring the financial integrity of the
Group through the regular review of financial
reporting, including reviewing the financial
statements and other formal announcements
and challenging and reviewing the significant
judgements contained in these documents.
It confirms to the Board that all material
financial updates are fair, balanced and
understandable and complies with all
applicable UK legislation and regulation
as appropriate. It is also responsible for
oversight of the risk management, related
controls and compliance. In addition the
Committee monitors the relationship
with the external auditor, reviewing
their effectiveness, scope, objectivity,
independence and approving their
remuneration and terms of engagement.
The Committee ensures that whistleblowing
processes are robust and any reports are
properly investigated. All relevant matters
arising are brought to the attention of the
Board. The Committee met 5 times this year
and attendance can be seen on page 50.
Overview
• Liz Catchpole has chaired the Committee
since November 2017. She is a Chartered
Certified Accountant and is considered
by the Board to have recent and relevant
financial experience, including her current
position as Audit Chair of another board in
the financial services sector
• All members of the Committee are
Independent Non-Executive Directors and
the Board is satisfied that the Committee
as a whole has competence relevant to
the sector
• By invitation, Audit Committee meetings
are attended by the Executive Directors,
Chief Regulation Officer (‘CRO’), Company
Secretary, Group CISO & Risk Manager,
Group Finance Director, external auditor
and other management as required
• Representatives from the external
auditor, the CRO and the Group CISO &
Risk Manager each have time with the
Committee and the Company Secretary
to raise freely any concerns they may
have. They are also invited to attend every
scheduled meeting of the Committee and
have direct access to the Committee Chair
• The external auditor, PwC, has time on the
day of each meeting with the Committee
without management being present
• The Committee Chair holds meetings
with PwC and management in preparation
for each Committee meeting to ensure
a full understanding of the matters to be
discussed by the Committee
The Committee reviews its Terms of
Reference annually and you can find
them on the Group’s website
Dear Shareholder
On behalf of your Board, I am pleased to
present the Audit & Risk Committee Report
for the year ended 31 March 2024.
The Audit Committee Membership
& Experience
The Audit Committee is appointed by the
Board. I Chair the Committee and the members
are Natalie Gammon, Bhav Singh and Richard
Longdon. On 1 May 2024 Michelle Senecal
de Fonseca joined the Committee as an
Independent Non-Executive Director. We
welcome Michelle and thank Natalie for her
contribution as she leaves GBG following this
year's AGM.
We are all considered Independent Non-
Executive Directors. Other members of the
Board, along with senior management and the
external audit partner, are regularly invited by
the Chair to attend Committee meetings. The
Board is confident that the Committee has
sufficient recent financial experience, relevant
to the sector in which the Group operates and
appropriate access to Company insight and
professional advice.
I am a Chartered Certified Accountant with
an MBA and Chair the Audit Committee of
another board. I also maintain an up-to-date
understanding of financial and corporate
governance best practice by attending regular
training sessions. Natalie Gammon, Bhav
Singh and Richard Longdon bring a wealth
of experience gained in both their Executive
and Non-Executive careers. If needed, the
Committee can seek professional advice at the
Company’s expense, although we did not seek
any such advice during the year.
Audit Quality Review
During the year, the Audit Quality Review
(‘AQR’) team of the Financial Reporting Council
(‘FRC’) reviewed EY’s audit of the Group’s 2023
Annual Report and Accounts as part of their
annual inspection of audit firms.
The AQR routinely monitors the quality of
audit work of Tier 1 UK audit firms through
inspections of sample audits and related
procedures at individual audit firms.
The AQR review was concluded in April 2024
and the final inspection report review has been
shared with us by the FRC. The Committee
considered the findings, discussed them with
management, EY who were in their final year
as auditors in 2023, and the newly appointed
auditors PwC. The Committee is satisfied that
the identified improvement areas, and the
actions taken to incorporate these, have been
captured in the audit work for the Group’s 2024
financial statements.
Overall, the results of the review raised no
issues which cast doubt on the fundamental
quality of the Group’s external audit and
the Committee remains satisfied with the
effectiveness of the external audit and at the
2023 AGM appointed PwC as external auditor.
FRC Corporate Reporting Review
(CRR)
During the year the Group corresponded with
the CRR team in connection with its review of
our Annual Report and Accounts (ARA) for the
year ended 31 March 2023. In common with
other large public limited companies, the FRC
had carried out a review in accordance with
Part 2 of the FRC Corporate Reporting Review
Operating Procedures:
• The Audit Committee was involved in
reviewing the Group’s responses to the points
raised by the CRR, and I, on behalf of the
Audit Committee, also discussed the matter
with EY, who were the Group’s auditor for
the FY23 ARA under review, and PwC as the
Group’s current auditor.
Strategic Report
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Financial Statements
Annual Report 2024
56
Committee focus during FY24
1 Financial statements and reports
Reviewed the Annual Report and Accounts,
together with the full year results
announcement and the half year results
announcement, and received reports from
the external auditor on the above.
Reviewed the effectiveness of the Group’s
internal controls and disclosures made in the
Annual Report and Accounts.
Reviewed executive management’s
representation letter to the auditor, going
concern reviews, fair, balanced and
understandable criteria and significant areas
of accounting estimates and judgement.
Reviewed the Group’s cash flow forecasts,
the Group’s bank facilities and the Viability
Statement.
Received updates from the Group’s Head
of Tax on compliance with global tax
regulations.
Reviewed and approved correspondence
with the Financial Reporting Council (FRC)
following a review, in common with other
public companies, from its Corporate
Reporting Review team with respect to
their review of the FY23 Annual Report
and Accounts.
2 Internal control and risk
management
Monitored and reviewed the effectiveness
of risk management and internal control
processes.
Reviewed the Group Risk Profile, which
identifies, evaluates and sets out mitigation
of risks.
Reviewed the principal risks and
uncertainties disclosed in the Annual Report
and Accounts.
3 Internal audit
Reviewed proposals for internal audits to
be conducted during FY24.
Reviewed the audit plans, audit outcomes
and monitored the progress of closing
outstanding actions.
Maintained oversight of the internal audit
work, undertaken by Grant Thornton, of
the Company’s Anti-Bribery and Anti-
Corruption Policy.
4 External auditor and non-audit work
Recommended to the Board the appointment
of PwC as new external auditor at the 2023
Annual General Meeting.
Reviewed, considered and agreed the scope
of the audit work to be undertaken by the
external auditor.
Agreed the terms of engagement and fees
to be paid to the external auditor.
Reviewed and approved non-audit services
and reviewed and non-audit fees.
Reviewed the FRC Audit Quality Inspection
and Supervision Report with respect to the
Group's external auditor.
Met with the FRC’s Audit Quality Review
team in respect of their review of EY’s audit
of the Company’s FY23 Annual Report and
Accounts.
5 Governance
Monitored the Group’s Code of Conduct,
Anti-Bribery and Anti-Corruption Policy,
Anti-Fraud Policy and the Group’s
Whistleblowing arrangements.
Met with the external auditor and the internal
auditor without management being present.
Completed the annual evaluation of
Committee performance.
• As a result of the review, potential updates
and improvements to certain disclosures
were recommended and these have been
addressed in preparing the FY24 Annual
Report and Accounts. These updates did
not have an impact on the Consolidated
Statement of Profit or Loss, Consolidated
Balance Sheet or Consolidated Cash Flow
Statement reporting in the 2023 Annual
Report and Accounts.
• As explained in note C2.2 the Company
Balance Sheet has been restated to
increase the impairment to Company
investments during the year ended 31 March
2023 following the inclusion of external
and intercompany debts in assessing
the recoverable amount of the parent's
investment in the GBG (US) Holdings LLC
subsidiary as part of the Company's year-end
impairment assessment.
The FRC requested that in disclosing this
engagement we note the limitations of their
review, namely that it was based solely on its
reading of the Annual Report and Accounts
and did not benefit from a detailed knowledge
of the business or an understanding of the
underlying transactions entered into. It is also
noted that its review provided no assurance
that the ARA is correct in all material respects
and that the FRC's role is not to verify
the information provided but to consider
compliance with reporting requirements. The
FRC closed the review process following the
Company's response.
Annual Report and Financial
Statements
The Audit & Risk Committee is responsible
for making sure the financial performance
of the Group is properly prepared, reviewed
and reported. Our role includes ensuring the
integrity of the financial statements including
examining documentation relating to the
Annual Report, Half Year Report, preliminary
announcements and other related reports.
We are responsible for reviewing internal
control systems, risk management systems
and the accounting principles, policies and
practices adopted for preparing public financial
information.
The Board has asked the Committee to
confirm that in its opinion the Annual Report
as a whole can be taken as fair, balanced and
understandable and provides the information
necessary for shareholders to assess the
Group’s financial position. To make this
assessment, the Committee received copies
of the Annual Report and financial statements
to review during the drafting process to
ensure that the key messages being presented
in the Annual Report were aligned with
the Company’s position, performance and
strategy. The Committee also reviewed the
processes and controls that are the basis for its
preparation.
We are satisfied that this Annual Report is
fair, balanced and provides the information
necessary for shareholders to assess the
Group’s position and performance, as well as
its business model and strategy.
Audit & Risk Committee continued
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External audit
Audit Services
PwC has performed the role of GBG’s
external auditor for the first time during this
financial year. The Committee has closely
monitored progress against the agreed audit
transition plan and is pleased that this process
has gone smoothly. During the year, the
Committee reviewed PwC’s independence and
performance and met with the audit partner
regularly without management present. The
Committee has adopted a broad framework
to review the effectiveness of the Group’s
external audit process and audit quality which
includes: assessment of the audit partner and
the team; planning and scope of the audit; the
execution of the audit and management of an
effective audit process; communications by
the auditors with the Committee; how the
audit contributes insights and adds value; the
quality of any formal audit reports; and a review
of fees.
The auditor attended the full and half year
Committee meetings and the audit planning
Committee meeting. The auditor reported to
the Committee on the results of the audit work,
highlighting any issue which the audit work had
discovered, or the Committee had previously
identified as significant or material in the
context of the financial statements. There were
no adverse matters brought to the Committee’s
attention in respect of the FY24 audit, which
were material and should be brought to
shareholders’ attention.
Non-audit services
The Company has a non-audit services policy
in place to ensure that the provision of non-
audit services by the external auditor does
not impair its independence or objectivity. All
non-audit services must be pre-approved by
the Committee. A list of non-audit services is
reviewed on an annual basis.
Audit & Risk Committee continued
The Committee closely monitors non-audit
services provided by the external auditor due
to the potential impact high volumes of non-
audit work can have on the independence of
the external auditor and the quality of their
audit. The Committee’s approach is that non-
audit services should not be performed by the
external auditor where there is a viable and
cost-effective alternative.
The only non-audit services PwC provided in
the year were the review of the Group’s half
year results and agreed upon procedures
regarding covenant compliance in accordance
with the Group’s banking facilities. PwC did not
perform any other non-audit services during
the year. We selected PwC for these tasks
as they would normally be performed by the
Company’s external auditor as detailed in note
6 to the financial statements.
Auditor Independence
The Board ensures external advisors remain
independent by having separate firms (non-
PwC) carrying out financial due diligence and
general advice relating to potential acquisitions
and tax matters. PwC has confirmed that there
are no relationships between themselves and
the Group that could have a bearing on their
independence. The Committee is satisfied that
PwC remain independent.
Whistleblowing Policy
During the year, we carried out an annual
review of our whistleblowing policy and made
minor adaptations. We are satisfied that the
policy remains appropriate for a Group of
our size and for the geographies in which we
operate. Concerns can be raised through a
variety of channels and anyone who wishes
to raise a concern has access to GBG’s
confidential and independent whistleblowing
helpline.
Internal Audit Updates
The Committee receives regular updates
on internal audit activity relating to
the control of key business risks which
includes:
Internal risk based audits
This involves testing controls relating to
the management of Royalty payments,
Contractors, Reseller licensing, Data Audit
Trails, Storage of Confidential Information,
System Access, Data Access and the use
of Demonstration Accounts.
Information security audits
These are conducted by GBG’s Information
Security team to support Cyber Security
certifications at GBG’s key locations.
Externally appointed Information Security
auditors have also assessed GBG’s
security arrangements throughout the
year. In January this year, the British
Standards Agency (BSI), after conducting
their assessments, confirmed GBG meets
the new information security management
standard ISO27001:2022.
Privacy Audits
This involves reviewing key suppliers
compliance with privacy rules and
regulations.
Customer and Supplier Audits
From time-to-time, GBG's customers
and suppliers request that audits are
conducted on GBG. These are facilitated
by our own internal teams who conduct
their assessment on potential key risks
such as privacy, security, and operational
resilience.
We receive monthly reports from our external
whistleblowing helpline provider and should
an issue be raised, investigations are carried
out independently with findings being reported
directly to me as both Chair of the Audit &
Risk Committee, and also as the Group’s
whistleblowing officer. They are also formally
reported to the Audit & Risk Committee. In
this financial year no reports have been raised
through the whistleblowing helpline (FY23:
three reports).
Internal Audit of GBG’s Anti-
Corruption and Anti-Bribery Policy
The Group has a formal Anti-Corruption
and Anti-Bribery Policy, which sets out the
responsibilities of all team members to observe
and uphold a zero-tolerance position on bribery
and corruption. It also exists to act as a source
of information and guidance to help any team
member recognise and deal with bribery and
corruption issues.
This year we instructed Grant Thornton to
facilitate an internal audit of the processes and
controls related to GBG’s Anti-Corruption and
Anti-Bribery Policy and compliance with the
UK Bribery Act. As part of this internal audit,
Grant Thornton held meetings with Senior
Management across each global region, as well
as conducting a brief survey across 250 team
members (c.17% of GBG team members) to
access their understanding of GBG’s Anti-
Corruption and Anti-Bribery policy and avenues
for reporting. Our internal management team
had also self-identified a number of areas
where improvements could be made.
The work did not reveal any significant
failings but did result in some action plans to
improve processes and controls which are
now being implemented by management to
enhance the control environment. The actions
are tracked by the Committee, including the
responsiveness of management to the findings
and recommendations, and the progress of
closing any overdue actions.
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Key areas of focus
The Committee together with the external auditor considered the matters set out below as significant
in relation to the financial statements. These were discussed and reviewed with management and the
external auditor; the Committee challenged judgements and sought clarification where necessary.
The Committee received a report from the external auditor on the work it had performed to arrive at
its conclusions and discussed in detail all material findings contained within the report.
Area of focus
Why was this a key area of focus?
How did the Committee respond?
Impairment of goodwill
and intangible assets
The Group’s policies on accounting for separately acquired intangible assets
and goodwill on acquired businesses are set out in notes 14 and 15 to the
consolidated financial statements.
At 31 March 2024 intangible assets relating to goodwill and other intangible
assets amounted to £742.6 million.
Goodwill on acquisitions is initially recorded at fair value, and is subject to
testing for impairment at each balance sheet date.
For intangible assets, the Group is required to determine whether indicators of
impairment exist and, if so, perform a full impairment review. As is customary,
such testing involves estimation of the future cash flows attributable to the
asset, or cash-generating unit of which it is part, and discounting these future
cash flows to today’s value.
The Chair reviewed management’s papers and noted the sensitivity of the
model to input variables. The Committee discussed with management the key
assumptions and the basis upon which they had been set and, after challenge,
concluded that they were appropriate.
Specific consideration was given to the forecast cash flows used in the Identity
– Americas group of cash-generating units due to the negative headroom at
the half year and after careful review concluded that the resulting impairment
charge was appropriate. The Committee then reviewed the disclosures in
respect of the impairment charge to ensure they were fair and balanced.
Impairment of Company
investment in GBG (US)
Holdings LLC
At 31 March 2024 the Company held investments of £570.2 million in
subsidiaries and investments held at fair value.
Investments are assessed on an annual basis to consider if there are any
indicators of impairment. Following the prior year adjustment to record
an impairment against the investment of GBG (US) Holdings LLC, and the
impairment recorded at a group level at the half year in the Identity - Americas
CGU, a full impairment review was conducted on this investment.
The review and challenge on the investment impairment assessments were the
same as for the goodwill and intangible assets assessment detailed above.
The Committee concluded that the additional impairment of £67.9 million was
appropriate, and that the disclosures were fair and balanced.
Going concern
The Board of Directors has a responsibility to assess whether there are any
doubts about an entity’s ability to continue as a going concern.
In order to support the preparation of the financial statements on a going
concern basis the Group has completed a comprehensive and robust
assessment. This involves testing a number of assumptions regarding the
future financial performance of the Group for 18 months from the balance
sheet date.
The Committee reviewed management’s papers, scenario modelling and
disclosures regarding going concern, including the key assumptions used and
the other relevant factors surrounding going concern.
The Committee has also considered reasonable sensitivities including the
potential impact from the principal risks and concluded that these support the
preparation of the financial statements on a going concern basis.
Revenue recognition
Revenue recognition is always considered a key accounting area of focus,
due to the size of the revenue number relative to the overall accounts, and the
number of judgements involved as set out in note 2.
The Committee assessed management’s analysis of contracts under IFRS 15
and, after challenge, concluded that revenue has been properly recorded in
the period in accordance with accounting standards.
Audit & Risk Committee continued
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Internal Control and Risk Management
The Board is responsible for the effectiveness of the Group’s
system of internal control, which has been designed and
implemented to meet the requirements of the Group and the
risks to which it is exposed. During the year, the Committee
has received updates from the Chief Regulation Officer and the
Group CISO & Risk Manager, who together lead and monitor
our risk processes. Below details the Group’s internal control
environment, how risk is managed, and the Committee’s review
of the effectiveness of the risk management and internal control
systems.
Board-level reporting on risk management and
internal control
In seeking to achieve the Group’s business objectives, we face
a number of risks, as defined on pages 36 to 46. The following
key elements comprise the internal control environment, which
has been designed to identify, evaluate and manage these risks
in line with our risk appetite, and to ensure accurate and timely
reporting of financial data for the Company and the Group:
(1) an appropriate organisational structure with clear lines of
responsibility, including effective risk management;
(2) an experienced and qualified finance function, which
regularly assesses the possible financial impact of the risks
facing the Group;
(3) key control procedures as defined in our risk framework;
(4) delegation of authority devolved from the Board which
sets the approval limits for key business transactions and
decisions;
(5) a robust financial control, budgeting and forecasting system,
which includes regular monitoring at Board level;
(6) procedures by which the consolidated financial statements
are prepared, which monitor key financial reporting
risks arising from changes in the business or accounting
standards; and
(7) established policies and procedures which reinforce the
need for all team members to adhere to minimum standards,
in accordance with law and regulation.
Audit & Risk Committee continued
Future focus for the Audit Committee
The key focus for the Committee in the year ahead will include:
• Group transformation activities, including impacts on financial
reporting, risk management and internal controls;
• Continuing the progress made on developing our Risk
Management Framework;
• Overseeing and challenging risk management performance
to ensure GBG continues to operate in line with the Board’s
stated risk appetite;
• The Committee will continue to plan and develop the internal
audit activities and identify areas for review. The Group CISO &
Risk Manager will lead this using co-sourced external support
where appropriate to do so, but we also intend to hire for a
new internal role to conduct additional internal audits and risk
assessment activities;
• The Board considers it important to ensure that all available
guidance and regulations are appropriately considered to
maintain strong financial reporting and corporate governance
systems; and
• As a Committee, we will also continue to focus on the potential
future regulatory changes and emerging best practice,
including in respect of the development of an assurance policy
and the increasing focus on assurance around sustainability
reporting.
Annual Committee evaluation
During the year, the Board conducted an internally facilitated
evaluation of the performance of the Board and its Committees.
Further details can be found in the Nomination Committee
report on pages 76 to 77. This process concluded that the Audit
and Risk Committee had fulfilled its role effectively and did not
identify any significant development points requiring action.
Liz Catchpole
Audit & Risk Committee Chair
10 June 2024
Examination of the
relationships between
the external auditor and
the Group including
whether the Group
employs any former
employees of the
external auditor
Scrutiny of any non-audit
services provided by the
external auditor
Requiring both verbal
and written confirmation
of the auditor’s
independence
Considering whether
the external auditor is
providing the appropriate
level of challenge and
scepticism
External auditor independence
The Committee has and will continue to assess
the independence of the external auditor at
least once a year through:
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Remuneration Committee
Introduction from the Chair of the
Remuneration Committee
Dear Shareholder
I am pleased to present our Directors’
Remuneration Report for the year ended
31 March 2024.
As an AIM-listed entity, the Group is not
required to comply with Schedule 8 of the
Large and Medium-sized Companies and
Groups (Accounts and Reports) Regulations
2008 as amended, nor the principles in respect
of Directors’ remuneration in the UK Corporate
Governance Code 2018. Nevertheless, the
Board recognises the importance of providing
shareholders with appropriate information with
respect to Executive remuneration. The aim
of this report is to provide shareholders with
information to understand our remuneration
strategy and its linkage to the Group’s financial
performance. The report consists of three
sections: this introduction, the Directors’
remuneration policy and an annual report on
remuneration. As an AIM-quoted Company, we
have disclosed the information required to fulfil
the requirements of AIM Rule 19.
The Committee is primarily responsible
for determining and recommending to the
Board the policy for the Executive Directors’
remuneration and employment terms. The
Committee is also responsible for reviewing
(and making recommendations to the Board
about) share incentive plans and performance-
related pay schemes and their associated
targets, as well as employee benefit structures
across the Group. In addition, the Committee
also monitors remuneration structures below
Board level and considers proposals and
remuneration packages when bringing key
talent into the Group. Where appropriate we
seek advice from our external consultants,
Deloitte LLP. Deloitte LLP is a member of the
Remuneration Consultants Group and, as such,
voluntarily operates under its Code of Ethics in
relation to executive remuneration consulting
in the UK.
Natalie Gammon
Committee Chair
The Remuneration Committee is responsible
for determining and recommending to the
Board the policy for remuneration of the
Executive Directors and, in consultation with
the CEO, for determining the remuneration
packages of members of the Executive Team.
The work of the Committee includes reviews
of share incentive plans and performance-
related pay schemes and their associated
targets, and for making recommendations
to the Board in connection with them. No
Director or other senior executive is involved
in any decisions as to their own remuneration.
The Committee is authorised to seek outside
legal or other independent professional
advice as it sees fit.
The Committee met 4 times this year in
response to a number of important decisions
covering executive succession. Attendance
can be seen on page 50.
Overview
• Natalie Gammon has chaired the Committee
since August 2020.
• Natalie will step down as Committee Chair
on 23 July 2024 with Michelle Senecal de
Fonseca being appointed and taking over as
Remuneration Committee Chair from
this date.
• All members of the Committee are
Independent Non-Executive Directors.
• By invitation of the Committee, meetings
are attended by the Executive Directors, the
Chief People Officer, Company Secretary,
Group Finance Director and the external
adviser to the Committee.
The Committee reviews its Terms of
Reference annually and you can find
them on the Group’s website
The remuneration policy is presented as
a table to make it clear and simple which
is in line with best practice amongst AIM
companies. GBG’s remuneration policy is
fundamental to the delivery of the Group’s
ongoing strategic objectives and provides key
incentives and support for sustainable long-
term value creation. We firmly believe that
our remuneration policy effectively rewards
and incentivises our Executive Directors and
senior management. It also makes sure we
provide fair pay, as well as supporting and
promoting all our team members’ wellbeing and
engagement. We align our remuneration with
the Group’s strategic aims and consider how
we distribute incentives across all GBG team
members. In this way, we make certain that
these incentives also create long-term value for
our stakeholders.
Company performance and
incentive outcomes for FY24
The financial performance for GBG for the year
ended 31 March 2024 is set out on pages 32
to 35. We had a strong focus on simplification
and cost-effectiveness and as a result have
delivered structural savings that we expect
will benefit us into the future. Our continued
focus on growth initiatives led to us achieving
the acceleration in year-on-year growth in
quarter four that we had expected and built
into our plan. This improved revenue growth of
approximately 5.0%, on a constant currency
basis, was primarily driven by an acceleration
in the Identity segment, as a result of improving
trends in the Americas and EMEA. This gives
us positive momentum going into the new
financial year. In summary the Group achieved
the following results for the year:
• Group revenue £277.3m;
• Adjusted Operating Profit £61.2m; and
• Adjusted Basic Earnings per share (EPS)
15.4p.
The Committee has
remained focused this
year on ensuring that
our performance targets
continue to support the
growth of the business.
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Remuneration Committee continued
Committee focus during FY24
The Committee has discharged its responsibilities
throughout the year by:
• Considering and reviewing feedback from shareholders
following the AGM outcome in 2023, as a result we had
extensive dialogue with the governance teams at a number
of our top institutional investors ahead of the AGM
• Considering and approving Executive Directors’ salaries
and the Chair’s fee
• Reviewing and approving the remuneration package for the
newly appointed Chief Executive Officer
• Reviewing and approving the retirement arrangements for
the former Chief Executive Officer
• Approving Executive bonus outturns for FY23
• Considering and approving the vesting share awards and
exercises for Executive Directors
• Reviewing and approving long-term incentive grants and
associated performance conditions for senior management
under the PSP and RSP
• Considering and approving the grant of awards under the
Save as You Earn Scheme
• Considering and approving appropriate performance
measures for the annual bonus scheme for Executive
Directors ensuring alignment to KPIs and the Group’s
strategy
• Reviewing and approving the Directors’ Remuneration
Report for FY23
• Reviewing remuneration arrangements for the wider
workforce and alignment to the arrangements for senior
management
• Reviewing the gender pay and ethnicity pay gap analysis
results and agreeing corresponding actions
At least 80% of the Executive Directors’ annual bonus is
based on EPS performance and the remainder on strategic
objectives including ESG as set out on page 70. As noted above,
the adjusted EPS performance was 15.4p and consequently
48.0% of this element vested. 50.0% of the bonus maximum
attributable to strategic and ESG objectives were achieved.
In July 2021 share options awards were granted under the
share matching plan to the CEO and CFO. The performance
criteria for these share awards were based on EPS and TSR
performance for the three-year period ending 31 March 2024.
EPS performance targets were not met and TSR performance
was below median which resulted in 0% of the awards vesting.
Full details of the performance targets and outcome is reported
on page 70.
In line with good practice, the Remuneration Committee
reviewed the incentive outcomes and considered this reflective
of the performance of the Company, shareholder experience
and not warranting any discretionary adjustment against the
formulaic outcomes.
Remuneration for Executive Directors
During the year Chris Clark and David Ward elected not to take a
salary increase. Their salaries for the year therefore remained at
£529,515 and £393,750 respectively.
Upon appointment to CEO, Dev Dhiman’s salary was set at
£425,000, significantly below that of his predecessor and
below the current market rate for a company of our size. The
Committee considered that this was appropriate for now,
taking into account that this is Dev’s first board level role. The
Committee intends to increase the base salary to a market
competitive rate over time. In line with best practice, the
Committee intends to phase this increase over three years and
any increase will be subject to his performance in the role.
In order to undertake the role of CEO, Dev relocated from
Singapore to the UK. The reimbursement of relocation expenses
reflects the reimbursement of reasonable expenses in line
with market practice, and is consistent with our approach for
other employees in similar circumstances and the Directors’
Remuneration Policy. The cost of this was £59,831.
For FY25 the annual bonus will be 130% of salary for both
the CEO and the CFO. The performance measures will be
based on at least 80% Adjusted Operating Profit and the
remainder based on individual KPIs aligned to strategic
objectives and ESG.
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Previously the financial measure for the
bonus was EPS but from FY25 this will move
to Adjusted Operating Profit and align with
the bonus measures used for team members
and also to more standard market practice.
The Committee also intends to maintain the
PSP awards for FY25 at 225% of base salary
for the CEO and 175% of salary for the CFO.
To increase the executive’s alignment with
shareholders and enhance the focus on driving
shareholder value, the Committee is proposing
to increase the weighting on TSR from 25%
to 50%. For FY25, 50% of the awards will
be based on TSR vs. the FTSE 250 and 50%
based on EPS. Further details of the FY25
incentives can be found on pages 65 and 66.
Workforce and fair pay
Our reward philosophy is to make sure our
team members are fairly rewarded for the
contribution they make. We have continued
to conduct market evaluation and pay
benchmarking exercises across all of our team
members, to make sure our pay practices are
competitive, fair and consistent.
This year we maintained our previous practice
of reviewing team member pay at the year end,
but we evolved our practice to a differentiated
approach which takes account of local market
conditions, individual performance and any in-
year rises that may have already taken place.
We also continue to operate a policy of hybrid
and flexible working. This means that we
continue to invest in our GBG offices as we
recognise that many team members do enjoy
the traditional working environment.
We believe that by supporting our team
members in this way we have a more engaged
and motivated workforce. We acknowledge that
providing good collaborative workspaces for
our teams to meet, along with flexible working
policies does help to attract and retain team
members.
Leaving arrangements for
Chris Clark
Chris Clark stepped down as CEO of the Board
on 30 January 2024, and remains an employee
to assist with the transition to the new CEO
until 31 July 2024. Under the terms of his exit:
• Until he leaves the business Chris’s salary and
benefits will continue in the usual way.
• As he remained in employment for the full
financial year, a bonus will be payable to Chris
in relation to the Company’s FY24 (ending
31 March 2024) financial year, this will be
calculated in accordance with the rules of the
bonus scheme and will be paid in or around
June 2024.
• No bonus will be payable to Chris for any
subsequent financial year, including for time
served from 1 April 2024 to 31 July 2024.
• Chris will be treated as a 'Good Leaver'
under the rules of both the Company’s Share
Matching Plan granted in 2021 and the
Performance Share Plan granted in 2022 and
2023.
• The Awards will vest at the normal vesting
dates, subject to the relevant plan rules,
achievement of the relevant performance
conditions and shall be exercisable on a pro-
rated basis, calculated up to the period of
time served from the date of grant to the 31
July 2024.
• Chris was not eligible for an LTIP award for
2024.
• No other payments are due to be paid to Chris.
The relevant remuneration details relating to
Chris are included throughout this Directors’
Remuneration Report for the year ending 31
March 2024.
Committee evaluation
The Committee’s performance was evaluated
during the year with no areas of focus to report.
Further information on this year’s evaluation
can be found in the Nomination Committee
Report on pages 75 to 80.
AGM Voting
At the 2023 AGM the advisory vote on the
Directors' Remuneration Report did not receive
the required majority number of votes to pass.
Prior to the AGM the Remuneration Committee
conducted an extensive consultation with the
Company’s largest shareholders, however,
the resolution only received support from
54% of the votes cast. The Remuneration
Committee recognises the reasons behind the
level of support, in particular, the exercise of
discretion to vest David Ward’s options granted
to compensate for earnings forfeited on leaving
his previous employer. The Remuneration
Committee is committed to seeking the views
of our significant shareholders if and when we
plan any major policy changes and decisions,
and the Chair continues to be available for
contact with institutional investors concerning
the Company’s approach to remuneration.
Looking ahead to FY25
GBG has always recognised the need to report
in an open and transparent manner and align
with shareholder and stakeholder expectations.
The policy table on pages 65 and 66 sets out
how annual bonus and long-term incentives
operate under the remuneration policy with
some information on the historic parameters.
We welcome dialogue with shareholders and
the Directors’ Remuneration Report will be put
to an advisory vote at the forthcoming 2024
AGM.
We hope that you will find this report to be
informative and transparent and we look
forward to receiving your support. We are
committed to and encourage open dialogue
with our shareholders. If you have any
questions on this report or our approach to
remuneration more generally, please feel free
to contact me via the Company Secretary.
Natalie Gammon
Remuneration Committee Chair
10 June 2024
Remuneration Committee continued
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Remuneration policy
Executive Directors' remuneration
policy
Our remuneration policy is formulated to attract
and retain high-calibre executives and motivate
them to develop and implement our business
strategy to optimise long-term value for our
stakeholders. We conducted an annual review
of our remuneration policy with our external
advisors, to ensure that it remains aligned
to GBG’s growth ambitions and the current
marketplace, whilst still conforming to best-
practice standards. We will continue to review
on an ongoing basis based on the following key
principles:
• The total reward level is competitive enough
to attract and retain high-calibre executives
• Executives earn total incentive-based
rewards by meeting demanding performance
standards consistent with shareholder
interests
• The Committee will structure incentive plans,
performance measures and targets to operate
soundly throughout the business cycle
• The Committee will prudently design long-
term incentives, so these do not expose
shareholders to unreasonable financial risk
• In considering the market positioning of
reward elements, the Committee will consider
the performance of the Group and of each
Executive Director
• Reward practice will conform to best practice
standards as far as reasonably practicable
• The importance of aligning the Company’s
strategy with its Sustainability Framework
When formulating the scale and structure
of remuneration levels the Remuneration
Committee considers market rates, drawn from
external market data, for the remuneration level
offered to Directors of comparable type and
seniority in other companies whose activities
are similar to GBG. In addition, we also
consider the pay and employment conditions of
our team members when determining Directors’
remuneration. No Director was involved in
deciding the level and composition of their own
remuneration.
Each Executive Director’s remuneration
package consists of basic salary, annual bonus,
long-term incentives, benefits including: health
and car benefits, prolonged disability insurance
and pension contributions. We maintain an
appropriate balance between the fixed and
performance-related remuneration elements.
The details of individual components of the
remuneration packages and service contracts
are outlined in the table on page 69.
Bonus and share option awards to Executive
Directors are subject to clawback and malus
provisions. In addition, Executive Directors are
required within five years of their appointment
to build and subsequently maintain, a minimum
level of share ownership in GBG shares. Details
of the minimum shareholding policy are also
outlined in the table.
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Element/Link to
Remuneration Strategy
Key features/operation
Potential Value
Performance
Metrics
Base salary
To attract and retain high-calibre
executives. Positioned competitively
in line with the market.
Reviewed annually, changes normally effective
from 1 April.
Executive Director’s experience, responsibilities
and performance taken into consideration.
Performance is assessed both from an individual
and business perspective.
Independently benchmarked from time-to-time
against comparable roles at premium listed
and AIM traded companies of a similar size and
complexity.
Any increase will usually correspond to or, where
appropriate, be less than the level of increase
applied across the Company. However, increases
may be awarded which are different to the
general increases for the wider population where
appropriate. This includes the ability to award
higher increases in appropriate circumstances,
such as:
• on promotion or in the event of an increase in
scope of the individual’s role or responsibilities;
• where an individual has been appointed to the
Board at a lower than typical market salary
to allow for growth in the role, in which case
larger increases may be awarded to move salary
positioning to a typical market level as the
individual gains experience;
• change in size and/or complexity of the Group;
and/or
• significant market movement. Increases may
be implemented over such time period as the
Committee deems appropriate.
None
Benefits
To provide an attractive package
alongside basic salary to attract
and retain executives.
Benefits include but are not limited to private
medical insurance and dental insurance. The
Company provides cash in lieu of any car benefits.
The potential value of medical insurance benefits
is limited by the terms of the policy. The cash in
lieu of car benefits for the Executive Directors,
effective 1 April 2024 are:
CEO: £12,000
CFO: £12,000
None
Pensions
To provide market competitive
arrangements.
The Company contributes to executives’ existing
personal pension schemes. Cash payments in lieu
of pension is available in the event an executive
has exceeded their personal pension allowance.
CEO: 5% of basic salary
CFO: 5% on basic salary
None
FY25 Remuneration Policy
This part of the report sets out the Executive Directors’ remuneration policy, including detail on
each element of remuneration and how it operates.
Remuneration Policy continued
Strategic Report
Governance
Financial Statements
Annual Report 2024
65
Remuneration policy continued
Element/Link to
Remuneration Strategy
Key features/operation
Potential Value
Performance
Metrics
Performance related bonus
To incentivise achievement of
Company profit targets and other
near-term strategic objectives.
Based on performance against targets related to
financial and individual KPIs agreed at the start of
the year.
Maximum of up to 150% of salary.
For FY25 the maximum will be:
CEO 130% of salary
CFO 130% of salary
Based on a mix of financial and non-
financial targets, with the majority based
on financial targets.
The measures for FY25 are based on at
least 80% Adjusted Operating Profit and
the remainder based on individual KPIs
aligned to strategic objectives and ESG
(more details in the Annual Report on
Remuneration).
Long-term incentives
To align executives to the interests
of shareholders and to incentivise
long-term financial performance.
Incentivises executives to achieve
the Company’s long-term strategy
and create sustainable stakeholder
value and create sustainable
stakeholder value.
Performance Share Plan (PSP) – Awards are
subject to a performance period of normally no
less than three years and may be subject to long-
term financial performance.
Where a PSP Award has vested (or an option
has been exercised), the Committee may apply
clawback to all or a proportion of shares.
Maximum PSP awards of up to 225% of salary
(and 400% of salary in exceptional
circumstances).
For FY25, the awards levels will be:
CEO – 225% of salary
CFO – 175% of salary
Performance targets are normally set
annually, measured over three consecutive
financial years and the Committee ensures
they are appropriately stretching.
Performance measures may be based on
financial, share price-related or strategic
performance measures.
For FY25 the performance conditions
are based 50% on EPS and 50% on
total shareholder return (“TSR”) relative
to the FTSE 250. Further details of the
performance conditions are set out
on page 74 of the Annual Report on
Remuneration.
Shareholding guideline
Aligns with shareholder interests.
Target value to be achieved over five years:
CEO – 200% of salary
CFO – 200% of salary
Until the shareholding guideline has been
achieved, executives must retain all vested LTIP
awards beyond those needing to be sold to cover
tax liabilities and exercise costs.
N/A
N/A
Strategic Report
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Financial Statements
Annual Report 2024
66
Consideration of employment
conditions elsewhere in the Group
The Committee considers pay and employment
conditions of team members throughout
the Group when determining Executive
remuneration.
The Committee considers the relationship
between Executive Director rewards and
broader changes to UK team members’
remuneration. While the Company does not
formally consult with team members as part of
the process, the Board seeks feedback from
employee surveys and takes a general view
on employee remuneration into account when
determining executive remuneration.
Shareholder consultation
We welcome dialogue with our shareholders
over matters of remuneration. During
FY24 we had extensive dialogue with the
governance teams at a number of our top
institutional investors ahead of 2023 AGM.
We also seek the views of our significant
shareholders if and when we plan any major
policy changes and decisions. The Chair of
the Remuneration Committee is available for
contact with institutional investors concerning
the Company’s approach to remuneration. The
Annual Report on Remuneration will be put to
an advisory vote at the upcoming AGM.
Non-Executive Directors
The Chair and the other Non-Executive
Directors’ remuneration comprise only of
fees. The Board approves the Chair’s fee on
the recommendation of the Remuneration
Committee. The Board approved the other
Non-Executives’ fees on the recommendation
of the Chair and CEO. The Non-Executive
Directors are not involved in any decisions
about their own remuneration. Non-Executive
Directors receive a base fee and can earn extra
fees for holding the position of Committee
Chair or Senior Independent Director.
Non-Executive Director fees were reviewed
by the Board during the year, in addition a
benchmarking exercise has been conducted.
The Non-Executive Directors will receive a fee
increase for FY25.
Remuneration Policy continued
Strategic Report
Governance
Financial Statements
Annual Report 2024
67
Remuneration policy continued
Executive
Directors
Date of contract
Unexpired term or
rolling contract
Notice period
(months)
Chris Clark
1 April 2017
Rolling contract1
6
David Ward
27 January 2021
Rolling contract
6
Dev Dhiman
30 January 2024
Rolling contract
12
Non-Executive
Directors
Date of contract
Unexpired term or
rolling contract as
at 31 March
Notice period
(months)
Richard Longdon
1 September 2022
18
6
Liz Catchpole
1 September 2023
30
1
Natalie Gammon2
19 November 2023
8
1
Bhav Singh
1 November 2023
8
1
1 Having served his six month notice Chris Clark’s service contract will terminate on 31 July 2024.
2 Natalie Gammon provided one month notice will step down from the Board on 23 July 2024.
Service contracts
The service contracts and letters of appointment of the Directors include the following terms:
Loss of office
The Remuneration Committee considers the individual
circumstances in cases of early termination and manages
these cases in line with policy, however the Committee also
reserves the right to assess the appropriate remuneration
conditions for the specific circumstances. The following sets
out the Company’s policy, in normal circumstances, with regard
to exit payments for each remuneration element for Executive
Directors.
• Basic salary: This will be paid over the contractual notice
period, however, the Company has the discretion to make a
lump sum payment for termination in lieu of notice.
• Benefits and Pension contributions: These will normally
continue to be provided over the notice period; however, the
Company has the discretion to make a lump sum payment on
termination equal to the value of the benefits payable during
the notice period.
• Annual Bonus: The payment of any annual bonus would be
entirely at the discretion of the Remuneration Committee
and if made would normally be pro-rated to the time of
active service in the year that employment ceased, paid at
the normal time and be subject to the original performance
conditions and policy on deferral (unless the Remuneration
Committee determines otherwise). In such circumstances the
decision of the Committee would take into consideration the
financial performance of the Company, the performance of
the individual, and the circumstances of the termination of
employment.
• Share Option Awards: The vesting of any share option awards
would be entirely at the discretion of the Remuneration
Committee and would lapse at the cessation of employment
unless considered a ‘Good Leaver’. If 'Good Leaver' status was
to be applied the awards would vest at the normal vesting dates
(unless the Remuneration Committee determines otherwise),
subject to the relevant plan rules, achievement of the relevant
performance conditions and be exercisable on a pro-rated
basis, calculated up to the period of time served from the date
of grant to the date of the termination of employment.
Strategic Report
Governance
Financial Statements
Annual Report 2024
68
Annual report on remuneration
Salaries/fees
£’000
Cash in lieu
of benefits in
kind
£’000
Benefits in
kind
£’000
Bonuses
£’000
LTIPs
Pension3
£’000
Other
Total
£’000
Fixed
Variable
FY24
FY23
FY24
FY23
FY24
FY23
FY24
FY23
FY24
FY23
FY24
FY23
FY24
FY23
FY24
FY23
FY24
FY23
FY24
FY23
Chris
Clark
530
530
12
12
2
2
389
0
0
0
93
93
0
0
1,026
637
637
637
389
0
Dev
Dhiman2
74
0
2
0
0
0
44
0
0
0
4
0
60*
0
184
0
80
0
104
0
David
Ward
394
394
12
12
2
2
250
0
129
234
19
19
0
0
806
661
427
427
379
234
Nick
Brown1
188
309
6
12
1
2
98
0
0
0
19
39
143
0
455
362
214
362
241
0
Richard
Longdon
200
117
0
0
0
0
0
0
0
0
0
0
0
0
200
117
200
117
0
0
Liz
Catchpole
79
79
0
0
0
0
0
0
0
0
0
0
54
0
84
79
79
79
54
0
Natalie
Gammon
69
69
0
0
0
0
0
0
0
0
0
0
0
0
69
69
69
69
0
0
Bhav
Singh
59
59
0
0
0
0
0
0
0
0
0
0
0
0
59
59
59
59
0
0
* Relocation expenses.
1. Nick Brown stepped down from the Board on 31 March 2023. He continued to receive salary and benefits up to 30 September 2023 - for reporting purposes these are included in the figures above. He received a
payment of £142,562 (rounded to £143,000 in the table above) for compensation for loss of office which is included within ‘Other’.
2. Dev Dhiman’s salary details are from when he was appointed CEO on 30 January 2024.
3. Contribution to the executive’s existing personal pension schemes and/or cash payment in lieu of pension in the event an executive has exceeded their personal pension allowance.
4. Liz Catchpole received a one off additional fee of £4,500 (rounded to £5,000 in the table above) during the year to reflect the work she was required to undertake in her role as Audit Committee Chair, as part of the
FRC corporate reporting review process and Audit Quality Review
Introduction
This Annual Report on Remuneration sets out information about the remuneration of the Directors
of the Company, for the period ended 31 March 2024.
Single Total Figure of Remuneration for Executive Directors
Strategic Report
Governance
Financial Statements
Annual Report 2024
69
Annual report on remuneration continued
Annual bonuses
The details of the Executive Bonus Scheme for FY24 are set out below and includes details of
the annual bonus targets, threshold and maximum levels and the bonuses paid to each Executive
Director. The maximum annual bonus for the year was 150% of base salary for the CEO and 130%
of base salary for the CFO. For FY24 Dev Dhiman’s maximum bonus was 130% of base salary.
Bonuses were earned based on the achievement of a range of financial and non-financial targets
as follows:
• EPS growth targets where the maximum pay-out for the achieving the target was capped at
120% of base salary for the former CEO and 110% of base salary for the CFO and new CEO;
• Achieving non-financial key performance indicators (‘KPIs’), aligned to our strategic objectives
(where the maximum pay-out is capped at 22.5% of base salary for the former CEO and 15% of
base salary for the CFO and new CEO) and covering:
- Improvements in employee engagement;
- Increasing GBG’s Net Promoter Scores (‘NPS’);
- Increasing level of organic growth; and
• Maintaining focus on ESG improvements and communication (where the maximum pay-out
is capped at 7.5% of base salary for the former CEO and 5% of base salary for the CFO and new
CEO).
EPS growth
Budget
% of salary
Max
% of salary
Achievement
of KPIs
% of salary
Achievement
of ESG
% of salary
Total max
bonus
% of salary
EPS target
achieved
% of salary
KPI target
achieved
% of salary
ESG target
achieved
% of salary
Bonus
awarded
% of salary
£’000
Chris Clark
48%
120%
22.5%
7.5%
150%
58.4%
7.5%
7.5%
73.4%
388,588
David Ward
44%
110%
15%
5%
130%
53.5%
5%
5%
63.5%
250,111
Dev Dhiman*
44%
110%
15%
5%
130%
53.5%
5%
5%
63.5%
44,377
• Dev’s bonus was pro-rated for his time served as CEO from 30 January 2024 to 31 March 2024.
EPS 120%
KPI 22.5%
ESG 7.5%
EPS 110%
KPI 15%
ESG 5%
Remuneration target breakdown
CEO1
CFO and new CEO
1. Relates to former CEO Chris Clark.
Strategic Report
Governance
Financial Statements
Annual Report 2024
70
Long-term incentive awards –
grants made during the year
Chris Clark and David Ward received share
awards of 390,421 (225% of salary) and
225,804 (175% of salary) share options
respectively on 26 June 2023. Dev Dhiman,
who was not at Executive Director at the time
received 95,759 (90% of salary) share options
on the same date.
The performance conditions were as set out
below:
EPS CAGR – 75% of the awards
• 25% will vest if 4% EPS CAGR is achieved
• 100% will vest is 14% EPS CAGR is achieved
(with straight-line vesting between these
points)
GBG’s TSR relative to the constituent of the
FTSE 250 – 25% of the awards
• 25% will vest if median TSR is achieved
• 100% will vest if upper quartile TSR is
achieved (with straight-line vesting between
these points)
Upon appointment to the Board, on 30 January
2024, Dev received an option over 150,000
shares in the capital of the Company (the value
of this award was £420,600 based on a closing
share price of 280.4p on that day).
This award reflected his appointment to the
Board and the CEO role, and will vest following
the FY26 Full Year Results Announcement,
subject to the achievement of a stretching
FY26 operating profit budget. Details of the
operating profit target and performance
against this target will be disclosed in the
Directors’ Remuneration Report for FY26.
Prior to his promotion to CEO, Dev also
received his normal long-term incentive awards
(consisting of a PSP and RSP award, which was
consistent with that received by his peers when
in his former role).
His total long-term incentive award for
FY24 (the normal award and the award on
appointment to CEO) equates to circa 175%
of salary in line with the total long-term
incentive quantum for the CEO. The Committee
considers that this award is appropriate to
incentive Dev to deliver our strategy and
enhance his alignment to shareholders and to
ensure that his reward opportunity over the
next few years is commensurate with the scope
and responsibility of the CEO role. For FY25
the Committee has proposed to increase Dev's
long-term incentive award to 225% of salary,
which is the same level as the previous CEO.
Long-term incentive awards –
vesting and exercises
As part of David Ward’s remuneration on
joining, he received an option over 150,000
ordinary shares in the capital of the Company
as compensation to match the earnings and
incentives forfeited on leaving his previous
employer (the ‘Compensatory Options’).
The Compensatory Options were issued at
an exercise price of 2.5 pence per ordinary
share to vest in three equal tranches on the
anniversary from the Date of Grant provided he
still holds the position of CFO of GBG on the
respective dates. The first tranche vested on
17 May 2022 (first anniversary) and as these
were not subject to performance conditions,
other than continued employment, As disclosed
last year, the Committee used their discretion
to disapply the performance conditions
applying to the second and third tranches of the
Compensatory Options to align with the original
intention of the awards.
The second and third tranches vested in full on
the 17 May 2023 and 17 May 2024 respectively.
The Compensatory Options are valid for a
period of 12 months from the vesting date.
Chris Clark and David Ward received share
matching awards of 222,662 and 18,442 shares
respectively on 6 July 2021 following their
investment in acquiring shares in the Group.
The amount of their investment was grossed
up for income taxes and the match rate of
3.0x and 2.25x deemed investment applied
respectively. 75% of the share matching
awards were subject to an absolute EPS
target for FY24 and 25% to TSR vesting
requirements. For the Adjusted EPS element,
50% of the award would vest if the Adjusted
EPS target was achieved in FY24, with full
vesting being applied only if Adjusted EPS
was a further 10% higher than the target. In
terms of the portion of the reward subject to
the TSR measure, 25% of the award vests at
median performance against the peer group
(FTSE 250) and 100% of award vests at upper
quartile, i.e. the 75th percentile.
Based on the FY24 final results neither
the Adjusted EPS target or minimum TSR
performance were achieved and therefore the
awards have not vested.
At 31 March 2024, GBG’s quoted share price
on the London Stock Exchange was 272.4p
and the lowest and highest prices during the
year ended 31 March 2024 were 208.4p and
372.2p on 29 September 2023 and 3 May
2023, respectively.
Annual Report on Remuneration continued
Strategic Report
Governance
Financial Statements
Annual Report 2024
71
Annual report on remuneration continued
Share
Option
Scheme
At
31 March
2023
Granted
during
financial
year
Exercised
during
financial
year
Lapsed
during
financial
year
At
31 March
2024
Option
exercise
price (p)
Date
exercisable
Chris Clark
SMP
173,267
–
–
173,267
_
2.50
2023-24
SMP
222,662
–
–
–
222,662
2.50
2024-25
PSP
255,120
_
–
–
255,120
2.50
2025-26
PSP
–
390,421
–
–
390,421
2.50
2026-27
651,049
390,421
_
173,267
868,203
David Ward
LTIP
50,000
–
50,000
–
_
2.50
2023-24
LTIP
50,000
–
–
–
50,000
2.50
2024-25
SMP
18,442
–
–
–
18,442
2.50
2024-25
PSP
147,551
–
–
147,551
2.50
2025-26
PSP
–
225,804
–
–
225,804
2.50
2026 -27
265,993
225,804
50,000
_
441,797
Dev Dhiman
LTIP
29,898
–
–
22,401
7,467
2.50
2023-24
LTIP
21,192
–
–
21,192
–
2.50
2024-25
PSP
80,222
_
_
_
80,222
2.50
2025-26
RSP
_
31,920
_
_
31,920
2.50
2026-27
PSP
_
63,839
_
_
63,839
2.50
2026-27
PSP
_
150,000
_
_
150,000
2.50
2026-27
131,282
245,759
333,448
Strategic Report
Governance
Financial Statements
Annual Report 2024
72
Ordinary shares
of 2.5p
31 March
2024
1 April
2023
Richard Longdon
29,876
29,876
Chris Clark
362,173
362,173
David Ward
97,000
55,000
Dev Dhiman
–
–
Liz Catchpole
20,665
20,665
Natalie Gammon
5,872
5,872
Bhav Singh
–
–
Directors’ interests
Set out below are the beneficial interests of the Directors and
their families in the Group’s share capital at the beginning and
end of the year.
Total shareholder return graph
The graph below shows the percentage change in total
shareholder return for each of the last 10 financial years
compared to the FTSE 250. The FTSE 250 was selected as
it represents a broad equity index in which the Group can be
compared against.
There have been no other changes to Directors’ interests in
the Group’s shares from the end of the year to 10 June 2024
2024. The Register of Directors’ Interests contains full details
of the Directors’ interests in the Group’s shares and is open to
inspection.
In accordance with the calculations set out in GBG’s
Shareholding Policy, based on the closing share price at 7
June 2024 of 343p, the value of Dev Dhiman and David Ward’s
shareholding represented nil% and 84% of their salaries
respectively. As mentioned previously Executive Directors are
expected to meet our shareholding guidelines within five years
of appointment, David Ward has three years of service, Dev
Dhiman has less than one year.
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
700%
600%
500%
400%
300%
200%
100%
0%
GBG
FTSE 250
Percentage change in total shareholder return
Annual Report on Remuneration continued
Strategic Report
Governance
Financial Statements
Annual Report 2024
73
Annual report on remuneration continued
Remuneration in 2024-25
Salary
In line with the wider workforce Dev Dhiman and David Ward received a salary increase of 4%. Salaries from 1 April 2024 will be as follows:
CEO: £442,000
CFO: £409,500
The Remuneration Committee will continue to monitor the remuneration of Executive Directors of other companies in the technology sector and other listed
companies with similar market capitalisation to ensure that the Executive Directors remain sufficiently rewarded to promote long-term success.
Benefits
There will be no change to the Executive Directors’ benefits for the year commencing 1 April 2024.
Annual bonus
We will operate the annual bonus for FY25 within the policy disclosed in this report. The principles of bonus criteria which we will apply to each Executive Director
during the year ending 31 March 2025 will be similar to those applied during the year ended 31 March 2024 with the exception of changing the financial measure to
Adjusted Operating Profit instead of EPS.
The maximum annual bonus for the CEO and CFO will be 130% of base salary. The annual bonus will be based at least 80% on Adjusted Operating Profit targets and
the remainder on individual strategic objectives including ESG. We will not disclose the targets for the annual bonus for 2024-2025 in this report as that information
is deemed commercially sensitive and may be interpreted as forecast. However, details of the targets will be disclosed retrospectively in the 2025 Annual Report.
Performance share plan
The Committee intends to make a further award to Executive Directors in line with the PSP outlined in the share plan Policy. The Committee will determine the levels,
performance conditions, weighting and growth targets to be applied at the time of award and fully disclose them in the FY25 Annual Report.
The CEO will be granted an award over 225% of base salary and the CFO will be granted an award over 175% of base salary. Awards will be based 50% on EPS
performance with 25% vesting for growth of 4% per annum and maximum vesting for 14% growth per annum. A further 50% of the award will vest based on relative
TSR performance vs. the FTSE 250 with 25% vesting for median performance and maximum vesting for upper quartile performance.
These PSP Awards will take the form of nominal cost options. A holding period may apply to any shares acquired pursuant to a PSP Award. Any such holding period
would normally apply for two years from the date of vesting.
Non-Executive
remuneration
NED fees were reviewed by the Board (excluding the Non-Executive Directors) during the year. In line with the wider workforce the NEDs received a salary increase of
4%. The base fees for GBG’s three NEDs will therefore increase to £61,698. The additional fees for the Senior Independent Director of £10,000 will remain the same,
the Committee Chair fees will increase with the Audit & Risk Committee Chair fee to be increased to £20,000 (FY24: £10,000), Remuneration Committee Chair fee to
be increased to £15,000 (FY24: £10,000) and the ESG Committee Chair fee to be set at £5,000 (FY24: £nil).
The Chair fee was also reviewed by the Remuneration Committee during the year. In line with the wider workforce the Chair received a salary increase of 4%.
The Chair fee will therefore increase to £208,000.
Strategic Report
Governance
Financial Statements
Annual Report 2024
74
Nomination Committee
Dear Shareholder
On behalf of the Board, I am pleased to present the Nomination
Committee Report for the year ended 31 March 2024.
The role of the Committee
The Committee’s primary role and responsibilities are to:
• make sure that appropriate procedures are in place to
nominate and select candidates for appointment to the Board,
particularly in terms of the balance of the Board’s skills,
experience, independence, knowledge and diversity;
• make recommendations to the Board about new appointments,
re-electing Directors, succession planning and Board
composition, particularly the benefits of diversity on the Board,
including gender diversity;
• ensure that a regular, thorough and unbiased evaluation
is undertaken of the structure, size, composition, balance
of skills, knowledge and experience of the Board and its
Committees; and
• ensure the Company’s adherence to applicable legal,
regulatory and corporate governance requirements in relation
to the above are fully complied with.
This financial year the Committee has spent a significant
amount of time dedicated to Board succession planning,
including the Chief Executive Officer (CEO) succession, which is
covered in further detail later in this report. The Committee also
considered the appointment of a new Non-Executive Director
who joined the Board in early May 2024. Although the CEO
appointment has been the most significant decision taken this
year, the Committee has also maintained an oversight of the
senior leadership talent pipeline including maintaining dialogue
with the Executive Directors on succession plans for key roles
throughout the business, development of our emerging leaders
and ongoing Board refreshment plans.
Richard Longdon
Committee Chair
10 June 2024
The Nomination Committee is responsible for overseeing
succession planning for the Board and senior management
and assists the Board in discharging its responsibilities
relating to the composition and make-up of the Board and
any Board committees.
The purpose of this report is to highlight the role that the
Nomination Committee has in monitoring the Board’s
balance of skills, knowledge and experience and to ensure
that there are robust succession plans in place.
The Committee met 5 times this year as a number of
important decisions were required to be made covering
executive succession and to support our progressive
approach to ongoing Board refreshment. Attendance can be
seen on page 50.
Overview
• A majority of the members of the Committee are
Independent Non-Executive Directors
• The Company Secretary attends all meetings of the
Committee and is responsible for engaging with executive
search recruitment advisors as and when needed
• Neither the Chair nor the CEO would participate in the
recruitment of their own successor
• The Committee Chair reports material findings and
recommendations at the next Board meeting and copies of
the minutes of meetings are circulated, where appropriate,
to all Directors of the Board
The Committee reviews its Terms of Reference
annually and you can find them on the Group’s
website
Committee focus during FY24
During the year, the Committee have focused on the
following areas:
• assessed the composition of the Board, including in
relation to Committee membership
• conducted a qualitative and quantitative Board Evaluation
in February 2024, a summary of the results can be found
on page 76
• recommended Dev Dhiman’s appointment as the new CEO
following a thorough process, as successor to Chris Clark
• evaluation of potential independent Non-Executive
Director candidates, resulting in the appointment of
Michelle Senecal de Fonseca as independent Non-
Executive Director with effect from 1 May 2024
• considered and approved the annual Nomination
Committee Report, contained within the Annual Report
and Accounts
• recommended to the Board the re-election of all directors
at the 2024 AGM
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Nomination Committee continued
January 2024
The Board confirmed that they were happy with
the proposed format of the FY24 evaluation.
February 2024
Each Director completed an online questionnaire in
relation to six key aspects of the Board and its
performance. Committee members received evaluation
for the committees they were members of.
March 2024
A final report was compiled and shared with the
Board for review. This was then discussed at the
Board meeting in March 2024.
Looking ahead to FY25
Several areas of focus for FY25 were agreed and progress
will be monitored during the year. Areas of focus are set out
on the following page.
Evaluation Process
Evaluation of the composition, structure and
functioning of the Board
The Committee continues to monitor the balance of skills and
experience on the Board as well as its independence, knowledge
and diversity. This year, we carried out an internal evaluation
of the Board via an online questionnaire, following a set of
predetermined questions and completed through Boardclic’s
software platform. Boardclic is an independent third-party
organisation which specialises in Board evaluations and holds
no connection with the Company or any individual director.
As reported in previous years, the questions contained within
the last two internal questionnaires remained consistent.
This was an intentional decision taken by the Board to enable
improvements, or any areas of concern, to be monitored year-
on-year, covering the following six key aspects of the Board’s
performance:
• Value creation and strategy
• Board agenda
• Talent and culture
• Board composition
• Chair performance
• Reporting and risk
The questionnaire also considered the Board’s views on the
material ESG issues facing the Company and included a review
of the effectiveness of all Board Committees.
The questionnaire was completed by all Directors during
February 2024. The results were collated using the presentation
tools within Boardclic’s software platform and this output
formed the basis of a report compiled for the Chair, which
was then discussed by the whole Board in March 2024. The
evaluation was completed slightly later than usual given the
Board’s focus on the appointment of a new CEO earlier in the
financial year.
This is the last internal questionnaire of the three-year Board
Evaluation cycle that GBG have chosen to adopt. The last time
the Board were externally evaluated was during FY22. Next year
we will undertake an external evaluation and report on findings
in our FY25 Annual Report.
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Progress against Findings of the 2023 Evaluation are set out below:
Area
Action
Progress made in FY24
Future Strategy
|
|
|
Understanding more about GBG’s customer strategy in new sectors
and geographies.
Board Strategy event, regular updates from members of the
Executive Team have been presented to the Board during
Board meetings throughout the year.
Talent
|
The Board to input into succession planning for senior leadership. Focus
to be given to ensuring the correct level of incentivisation is in place for
key talent.
There have been a number of senior internal promotions this
year, the Board have been included to ensure the correct level
of incentivisation was in place.
Board composition
|
To continue to assess and discuss the composition of the Board and what
expertise may be required in the future.
Under continual review by the Nomination Committee, it was
a consideration when recruiting the new CEO and new Non-
Executive Director to the Board.
Areas of Focus for FY25 are as follows:
Talent and culture
|
The senior leaders across the business to have more regular interactions
with the Board.
ESG
|
|
|
To raise the profile of ESG to Board discussion. Specifically so that the
Board have greater understanding as to how GBG’s activities make an
impact.
Risk Management
|
|
Ensure operational, compliance and information security risks are
sufficiently discussed and understood. Ensure there is sufficient
independent challenge to the business's risk management approach.
Board composition
|
The suggestion of a non-UK Board member with relevant knowledge
of the Americas market has been identified as an area of focus.
Key
Investors
People
Customers
Suppliers
Environment
Nomination Committee continued
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Nomination Committee continued
Succession and Talent
Development
The Committee continues to develop Board
succession plans, both to ensure that there is
an ongoing review of the skills and experience
on the Board and to maintain a stable
leadership framework that can effectively
support and challenge the Executive. The
Committee must proactively manage changes
and ensure there is clear alignment on the
future leadership needs of the Company.
Training and development plans are provided
to senior and emerging leaders across the
Group in order to continue to develop the
pipeline of internal talent for the future. In
addition, the Committee considers emergency
succession planning and is comfortable that a
framework is in place should key management
roles need to be covered on an interim basis.
Board appointment criteria are considered
automatically as part of the Committee’s
review of succession planning, and this
was demonstrated during the year with the
appointment of Dev Dhiman to the role of CEO.
The Committee also provides guidance and
monitors succession plans, talent assessment
and development plans below Board level.
Recognising, developing and retaining talent
within GBG are essential for the continued
sustainability of the business. A number of key
promotions and hires were made during the
year to further strengthen our team profile.
During the year, the Group has appointed
new Identity Fraud leaders with the internal
promotion of Carol Chris to General Manager
of the APAC region and Andy Chrascina as
General Manager of the EMEA region:
• Carol joined GBG in 2019 as General Manager
of Australia and New Zealand (ANZ), and her
responsibilities have expanded as she’s been
tasked with leading the product function
across the wider APAC region. Carol has
contributed to the growth delivered by the
ANZ business as it has delivered new product
innovations to significantly strengthen our
market position; and
• Andy joined GBG as Head of New
Business in 2013. During that time he has
significantly grown his career, expanding
his responsibilities and contributing to our
success, most recently as the Commercial
Director for our Identity Fraud business in
EMEA.
GBG understands the value of developing our
people for future leadership roles. During the
year, 130 team members were promoted or took
on a new role. Our global mentoring scheme
continues to allow team members to create new
relationships, develop their skills and expand
their networks across GBG.
The mentoring scheme has been pivotal in
developing talent in the business. The Group’s
focus on talent development directly benefits
the Committee’s succession planning activities
by ensuring a strong pipeline of internal
candidates for senior leadership roles.
Induction and Training
A tailored induction programme is designed for
each Director who joins the Board, whether that
be an external or internal appointment. This
ensures that each Director is equipped with the
knowledge and materials necessary to perform
their duties. Dev Dhiman was provided with a
comprehensive induction upon his appointment
as outlined in this report.
Dev Dhiman
CEO
CEO Induction
Following appointment, the Company
provides Directors with a comprehensive and
tailored induction programme. This typically
includes visiting GBG’s offices, meeting with
all members of the Board and senior leaders
from across the Group, as well as external
advisers and stakeholders where appropriate.
Dev’s first few weeks as CEO Designate
included one-to-one briefings with individual
members of the senior leadership team
and town hall meetings with larger groups.
He conducted these town hall meetings in
person at most of our global office locations
and hosted several virtual town hall sessions
for those unable to attend in person.
Following these sessions, informal dinners
were also held with the relevant management
teams, to provide a more relaxed forum for
them to interact.
Dev’s schedule also included meetings
with GBG’s key stakeholders both via video
conference as well as in-person meetings.
This included meetings with several key
customers of the Group and the majority
of our top shareholders, building on the
half year results investor roadshow that he
participated in following the announcement
of his appointment in early November. He
has also taken time to meet with all of GBG’s
key advisors including auditors, lawyers,
nominated adviser and corporate brokers.
Meeting with various
key stakeholder groups
as part of my induction
has given me a good
understanding of what
we need to do in order to
drive future success.
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Executive Director recruitment
In accordance with the Company’s well-
established succession plan the Committee
worked to identify a list of candidates from
a list of potential internal successors. On
the authority of the Nomination Committee,
a sub-committee comprising the Chairman,
Liz Catchpole and David Ward supported
by the Chief People Officer, were
appointed.
The sub-committee considered the
candidates against a detailed brief for the
role and criteria against which candidates
would be assessed. The sub-committee
concluded that given the high quality of
internal candidates the appointment of
an external search agency would not be
required. Short-listed candidates were
interviewed by the sub-committee and the
merits of all candidates were discussed
in detail including feedback from the
interviews carried out by them, this was
shared with all members of the Nomination
Committee. As a result of this process, it
was unanimously agreed that Dev Dhiman
would be promoted to the role of CEO.
Board Changes during the year
During the year, Chris Clark announced that he
would be stepping down as CEO after leading
the Group for seven years. As a result, and
following a thorough process in line with the
Company’s succession plan, the Committee
recommended to the Board that Dev Dhiman
be appointed as his successor and accordingly,
Dev was appointed as CEO and a member of
the Board on 30 January 2024. Dev joined
GBG in November 2020 as Managing Director,
Asia Pacific, and during the CEO selection
process, it was the clear view of the Committee
that Dev's deep understanding of GBG, its
markets and potential, made him the ideal
leader to replace Chris and lead GBG through
the next phase of its evolution. Chris stepped
down as CEO, following an orderly handover
period with Dev. Chris remains an employee of
the Company and is available to the Board in an
advisory capacity until 31 July 2024.
Natalie Gammon, Non-Executive Director
and Chair of the Remuneration Committee
announced her intention to step down from the
Board immediately following the AGM on 23
July 2024, having served on the Board since
2019. As a result, a robust recruitment process
took place during the year to appoint her
successor. The Committee appointed Odgers
Berndtson to assist in identifying potential
candidates for this role. Specific recruitment
criteria was provided, which included
diversity considerations as well as specific
skills, experience and industry expertise
requirements. Following a thorough process
Michelle Senecal de Fonseca was appointed as
Non-Executive Director on 1 May 2024.
1
Following Natalie Gammon
indicating her intention to retire,
the Committee, following a tender
process, appointed Odgers Berndtson
to identify potential candidates for a
new Non-Executive Director and Chair
of both the Remuneration and ESG
committees.
2
Odgers Berndtson undertook
an extensive search process using
the brief provided by the Committee,
reviewed CVs and interviewed a
number of candidates.
3
On the authority of the Committee a sub-committee
comprising Richard Longdon (Chair), Liz Catchpole (SID)
and Dev Dhiman (CEO) was appointed to review the diverse
longlist of candidates. The merits of all candidates on the
longlist were discussed in detail by Odgers Berndtson and
the sub-committee, including feedback from the interviews
carried out.
4
Following this discussion,
a shortlist of four candidates was
prepared by Odgers Berndtson. Each
candidate was interviewed by the sub-
committee.
5
Following this process, the
sub-committee recommended one
candidate be interviewed by the other
Committee members. As a result,
all Committee members agreed
that Michelle Senecal de Fonseca
had the necessary attributes and
skills that were being sought for the
Non-Executive Director and Chair of
Remuneration and ESG committees
and recommended her appointment to
the Board.
Recruitment process
Nomination Committee continued
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Nomination Committee continued
Inclusion, Diversity & Equality
Promoting diversity at GBG continues to be a
key priority and we have made good progress
during the year. The Group has a formal
Inclusion, Diversity & Equality Policy, which
applies to all team members and is of particular
relevance to the Board, the Executive Team,
People Managers and others concerned with
attracting, retaining and developing talent
or making employment decisions which
affect others. The purpose of the policy is
to communicate clearly the attitudes and
behaviours that are acceptable, promote a safe
physical and virtual environment for everyone
and provide equal access to opportunities.
Last year, we set out our target of achieving
40% female senior team members by 2026,
which aligns with the target set by the FTSE
Women Leaders Review. As at 31 March 2024
women comprise 37.9% of our total workforce
(2023: 36.8% which was rounded to 37%),
27.3% of the Executive Team (2023: 23.1%)
and 33.3% of our Board of Directors (2023:
28.6% which was rounded to 29%). In line
with the targets set out in the Parker Review,
we have a Board member from a minority ethnic
group.
The Group works actively, through our ‘be/
yourself’ programme, to raise awareness of
other important diversity characteristics such
as age, neurodiversity, accessibility and sexual
identities (LGBTQ+). The Champions of the
programme produce regular content to support
each area and further educate team members
across GBG. This supports our intentions of
continuing to develop our inclusive culture, so
we become known as an employer of choice for
all talented individuals. To find out more, please
see our ESG Statement on page 24.
Independence
The Committee understands that independence
is an essential factor in Non-Executive Director
effectiveness and reviews the independence
of its Non-Executive Directors regularly. The
Non-Executive Directors are measured against
the standards set out in the QCA Code on
Director independence and are all considered
independent.
Re-Election to the Board
The re-election of Directors is subject to their
ongoing commitment to Board activities and
satisfactory performance.
In line with best practice, all Directors (with
the exception of Natalie Gammon who will be
stepping down as director immediately after
the AGM) will stand for re-election at the 2024
AGM and annually thereafter.
The Committee has confirmed to the Board
that the contributions made by the Directors
offering themselves for election at the
AGM continue to benefit the Board and the
Company.
Biographical information on each of the
Directors can be found on pages 48 and 49.
Richard Longdon
Nomination Committee Chair
10 June 2024
27.3%
Of the Executive
Team
33.3%
Of our Board
of Directors
37.9%
Of our total
workforce
At 31 March 2024
women comprise:
Female
Male
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Natalie Gammon
Committee Chair
10 June 2024
The Group is fully committed to
understanding and acting on ESG issues
and the Committee’s function is to ensure
appropriate focus is given to environmental,
social and governance factors by the Board
and the Group as a whole.
The Committee ensures that sufficient time,
at the most senior level, is dedicated to ESG-
related risks and opportunities.
The Committee met three times this year,
attendance can be found on page 50.
Overview
• Natalie Gammon has chaired the Committee
since July 2021
• Natalie will step down as Committee Chair
on 23 July 2024 with Michelle Senecal de
Fonseca taking over as ESG Committee
Chair from this date
• Membership of the Committee is made up
of the full Board. The Company Secretary is
Secretary to the Committee
• The CEO is responsible for communicating
the Committee’s priorities to the Group and
implementing agreed actions
• Other regular attendees at meetings, at
the invitation of the Committee, include
the Director, ESG programme manager
and members of the Diversity and Inclusion
Team. None of these attendees are
members of the Committee
The Committee reviews its Terms of
Reference annually and you can find
a copy on the Group’s website
Further information on the Group’s
approach to ESG can be found in the
ESG Impact Report
Environment, Social and Governance (ESG) Committee
Dear Shareholder
I am pleased to present the Environmental,
Social and Governance (ESG) Committee
Report for the year ended 31 March 2024.
This report sets out the role and composition
of the Committee and provides information on
our key areas of focus during the year. Please
note that further information on the Group’s
approach to ESG, including our performance
against targets and mandated environmental
disclosures can be found on pages 23 to 29
with full disclosures contained within our
separate ESG Impact Report.
The role of the Committee
The role of the Committee is to oversee the
development of the Group’s ESG strategy,
set clear ESG targets and continuously
review and monitor progress against them. To
achieve this the Committee has established
policies and codes of practice to make sure
that everyone, Group-wide, is aware of their
ESG responsibilities to promote an evolving
ESG culture throughout the organisation. In
addition, the Committee is responsible for
making sure that the Group is effectively
monitoring ESG trends and remains compliant
with applicable standards and legislative
requirements, regular consideration is given to
how these may impact the Group in terms of
strategy and financial performance.
I am pleased with the
progress that has been
made this year on our
ESG commitments but the
Committee recognises
that there is still a lot more
we can do.
The Committee works in conjunction with
the Audit & Risk Committee to oversee the
identification and mitigation of risks relating to
ESG matters, particularly relating to climate-
related risks . The Committee is required to
ensure that the Group provides appropriate
information and is transparent in its reporting
of ESG strategy, policies, activities and
performance to all its key stakeholders.
The Committee also ensures that the Group
provides appropriate information and is
transparent regarding its ESG-related policies
with the investment community, particularly
ethical/socially conscious investment funds,
in whatever way is most effective; and reports
to the Board on how the Committee has
discharged its responsibilities throughout
the year.
Engagement with stakeholders
The Committee is responsible for ensuring
that the Group provides appropriate
visibility of its ESG credentials to its relevant
stakeholder groups, particularly the investment
community. We are pleased to report that
during the year the Company has received
strong ratings from various ESG risk rating
agencies including Morgan Stanley Capital
International (MSCI) and Sustainalytics. We
have also engaged individually with a number
of larger shareholders whose ESG teams have
reached out directly to us requesting specific
information on a variety of ESG topics. This
year we are pleased to be publishing a new
standalone ESG Impact Report. This reflects
the progress we have made over the last 12
months across all ESG initiatives, as well as
collating key metrics. We continue to receive
interest from team members and potential
new recruits on ESG matters. Some larger
customers also require detailed questionnaires
to be completed to provide information on
our approach to ESG. This can prove to be a
differentiator on contract awards. We consider
that we are currently well placed competitively
but need to keep investing in this area.
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Environment, Social and Governance (ESG) Committee continued
Future focus
Over the next 12 months the Committee’s focus
will be to:
• Continue to carefully monitor UK Government
plans for creating a framework for UK
Sustainability Disclosure Standards (SDS)
based on the ISSB Standards
• Work towards setting an externally validated,
science-based net zero and near-term
emissions target
• Improve the accuracy of our emissions
measurement across the Group by collecting
as much primary data as possible
• Further develop our social programmes
relating to our team members and the broader
community
• Promote and encourage voluntary
participation in the Group-wide diversity data
collection programme
We remain strongly committed to our ESG
programme and the overarching principles of
the UN Sustainable Development Goals. We
will continue to develop GBG’s credentials
as an environmentally and socially conscious
business with high standards of governance
and will endeavour to transparently disclose
our progress and performance to all our key
stakeholders.
Natalie Gammon
Chair of the ESG Committee
10 June 2024
Committee focus during FY24
During the year, the Committee has
focused on the following areas:
• Monitoring our progress against the social
and environmental targets set during the
previous financial year
• Agreeing to commit to setting an
externally validated, science-based net
zero and near term emissions target
• Managing our disclosures on climate-
related risks and opportunities and the
mitigating actions in place
• Understanding updates on new and
potential regulatory developments
• Managing our approach to changing
stakeholder demands across the ESG
landscape and adapting policies where
needed
• A review of the way we report on ESG,
with the decision taken to have a
standalone ESG Impact Report, including
all details of ESG activities conducted by
the Group throughout the year
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Directors' report
The Directors present their
report, together with the Group’s
audited financial statements for
the year ended 31 March 2024.
Statutory information contained
elsewhere in the Annual Report
In accordance with s414c of the Companies
Act 2006, certain matters that would otherwise
be required to be disclosed in the Directors’
Report are included elsewhere in this document
including in the Strategic Report (from pages
3 to 46), the Corporate Governance Statement
(from pages 53 to 55) or as indicated below.
All this information is incorporated into this
Directors’ report by reference. It is advisable
to read these reports in conjunction with the
Directors’ Report.
• Strategic Report pages 3 to 46
• Corporate Governance Statement pages
53 to 55
• Financial Review pages 32 to 35
• Principal Risks & Uncertainties pages 36
to 46
• Going Concern & Viability page 46
• Section 172 Statement pages 21 and 22
• Remuneration Report pages 61 to 63
• ESG Report pages 23 to 29
• Financial Instruments pages 129 to 133
• Related Party Transactions page 136
Financial results and dividends
The Group’s financial results, risk management
objectives and policies are discussed in the
Financial Review on pages 32 to 35 and within
note 28. The Directors have recommended a
final ordinary dividend of 4.20 pence per share
(2023: 4.00 pence per share) amounting to
£10.6 million (2023: £10.1 million).
If approved by shareholders at the Annual
General Meeting (‘AGM’), the final dividend
will be paid on 2 August 2024 to ordinary
shareholders whose names were on the
Register of Members on 21 June 2024. A
Dividend Reinvestment Plan (‘DRIP') will be
offered, allowing eligible shareholders to
reinvest their dividends into GBG shares.
Further information regarding the DRIP is set
out on page 153.
Post-Balance Sheet Events
Details of events occurring after the end of the
reporting period are contained in note 33 to the
Group financial statements.
Branches
The Group, through various subsidiaries,
operates its business through branches
and offices in the UK and overseas. Further
information on the Group’s subsidiaries and
branches can be found on note 19 on pages
121 to 124.
Substantial shareholders
In accordance with the Financial Conduct
Authority’s Disclosure Guidance and
Transparency Rules, we have been notified of
above interests in the ordinary share capital,
representing 3% or more of our issued share
capital. Details of substantial shareholders
are regularly published and updated on our
website. The position as at 10 June 2024 is
detailed in the substantial shareholder table on
this page.
Share Capital
The share capital of the Company comprises
ordinary shares at 2.5 pence per share. Details
of the authorised and issued share capital of
the Company and options over shares of the
Company are set out in notes 22 and 30 to the
financial statements.
Restrictions of Transfers
We are not aware of any agreements between
shareholders that may result in restrictions
on the transfer of securities and for voting
rights. The only restrictions which may exist
from time-to-time are those imposed by laws
and regulations (for example, insider trading
laws and market requirements relating to close
periods) or pursuant to the internal policies of
the Company whereby certain team members
of the Company require the approval of the
Company to deal in the Company’s securities.
Ordinary Shares
At a General Meeting of the Company, every
member present in person or by proxy and
entitled to vote shall have one vote for every
ordinary share held. The Notice of the General
Meeting specifies deadlines for exercising
voting rights either by proxy notice or present
in person or by proxy in relation to resolutions
to be passed at the General Meeting. All proxy
votes are counted and the results are released
as an announcement to the London Stock
Exchange after the meeting.
The Company’s Articles of Association may
only be amended in accordance with the
provisions of the Companies Act 2006 by a
special resolution at a General Meeting of the
shareholders. This year the Board will not be
recommending any changes.
Substantial shareholder
No. of shares
owned at 10
June 2024
Percentage of
shares owned
at 5 June 2024
Octopus Investments
16,655,507
6.59%
AXA Framlington Investment Managers
16,203,530
6.41%
Aegon Asset Management UK
12,903,802
5.11%
Janus Henderson Investors
10,264,382
4.06%
Sterling Strategic Value Fund
8,094,613
3.20%
NFU Mutual
7,751,325
3.07%
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Directors' report continued
Powers for the Company to buy
back shares
The Company was authorised at the 2023
Annual General Meeting ('AGM') to purchase
up to 25,251,022 of it's own ordinary shares
of 2.5 pence. This authority expires on the
earlier of 15 months from the passing of the
resolution or the next AGM. Despite authority
being granted by shareholders, the Company
did not purchase any of its own shares under
this authority during the year. It is the Directors’
intention to seek renewal of this authority via
special resolution at the 2024 AGM, details of
which can be found within the Notice of AGM.
Employee Benefit Trust
GBG’s Employee Benefit Trust was established
in 2022 to facilitate satisfying the transfer of
shares to employees within the Group upon
the exercise of vested share options under the
Group’s various share option share plans. The
trust holds a total of 316,774 ordinary shares
in GB Group plc, representing 0.13% of the
issued share capital at the date of this report.
Directors
Chris Clark retired from the Board as CEO on
30 January 2024 and Natalie Gammon will
step down from the Board as Non-Executive
Director on 23 July 2024. Dev Dhiman was
appointed to the Board as Chris Clark’s
successor on 30 January 2024. Further
information on his appointment can be found
in the Nomination Committee Report. The
Directors who have served during the year
ended 31 March 2024 and details of their
interests in the share capital and share
options are set out in the Report on Directors’
Remuneration on pages 69 to 74.
No Director had a material interest in any
contract of significance, other than a service
contract or contract for services, with the
Company or any of its subsidiaries at any
time during the year. Full biographies of each
Director as at the date of this report are set out
on pages 48 and 49.
Directors are reappointed by ordinary
resolution at a General Meeting of the
shareholders, following recommendation by
the Nomination Committee in accordance
with its Terms of Reference, as approved by
the Board or by a member (or members). In
addition, the Directors may appoint a Director
to fill a vacancy or act as an additional
Director, provided that the individual retires
at the next Annual General Meeting (AGM)
and, if they wish to continue, that they offer
themselves for re-election. In line with best
practice, all Directors (with the exception of
Natalie Gammon who will be stepping down as
director immediately after the AGM) will stand
for re-election at the 2024 AGM and annually
thereafter. Further details can be found in the
Nomination Committee Report on pages 75
to 80.
Details of each Directors’ notice period and
service agreement are detailed in the Report on
Directors’ Remuneration on pages 69 to 74.
Directors’ Indemnities
During the year and up to the date of approval
of this Annual Report, the Company maintained
qualifying third-party indemnification
provisions (as defined in section 234 of the
Companies Act 2006) for its Directors. In
relation to certain losses and liabilities which
may incur (or may have incurred) in connection
with their duties, powers or office. The
Company also maintains directors’ and officers’
liability insurance which gives appropriate
cover for legal action brought against its
Directors.
Employee Engagement
We continue to involve our team members
in the future development of the business.
How we engage our team members and have
due regard to their interests in considering
principal decisions taken during the year are
demonstrated in the Section 172 Statement on
pages 21 and 22.
Applications for employment by disabled
persons are always fully considered, where the
candidate’s particular aptitudes and abilities
adequately meet the requirements of the
job. When existing team members become
disabled every effort is made to ensure that
their employment at GBG continues and they
are supported appropriately, making physical
or procedural adjustments where possible.
It is the policy of the Group that the training,
career development and promotion of disabled
persons should, as far as possible, be identical
to that of other team members.
Further information regarding our workforce
policies and employee engagement can be
found on page 24 of the ESG Statement.
Information regarding GBG’s activities to
promote diversity is contained within the
Nomination Committee Report on pages 75
to 80.
Change of control
Within the Group’s revolving credit facility,
the lender has the right to demand immediate
payment of any outstanding balances upon
a change of control of the Group following
a takeover bid. The Group does have an
agreement with a data supplier which, if the
Group were acquired by a competitor of that
data supplier, would allow it to terminate its
agreement with the Group. The data supplier
would, however, continue to be bound to
service arrangements with the Group’s
customers existing on the date of termination.
Upon a change of control, share options may
be exercised within six months of the time
when the change of control takes effect and
any subsequent conditions at the offer process
have been satisfied. There are no agreements
between the Group and its Directors or team
members providing for compensation for
loss of office or employment (whether
through resignation, purported redundancy
or otherwise) that occurs because of a
takeover bid.
Proposed Resolutions for the
Annual General Meeting
Details of business to be conducted at this
year’s AGM to be held on 23 July 2024 are
contained in the Notice of the AGM which will
be communicated to shareholders separately.
It is the opinion of the Directors that the
passing of these resolutions is in the best
interest of the shareholders.
Strategic Report
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84
Financial Risk
The Group’s financial risk management
objectives and policies are discussed in the
Financial Review on pages 32 to 35 and within
note 28.
Research and Development
Research and development activities continue
to be a high priority with the development
of new products and maintaining the
technological excellence of existing products.
During the year ended 31 March 2024,
research and development activities were
conducted predominantly by our Technology
teams, which make up 42.1% (2023: 35.3%) of
our workforce.
GBG understands the importance of using
modern, innovative and effective technology
in order to provide its services to the highest
standards. We therefore place a great
importance on investing in our technology and
our ability to apply said technology in the best
ways, ensuring that we keep our competitive
advantage and are aware of changes in the
technological landscape.
Auditor
As reported last year, the Board agreed to
tender the external audit contract during
2023. Following a comprehensive audit tender,
the Audit & Risk Committee recommended
to the Board that PriceWaterhouseCoopers
LLP be appointed as the Group’s auditor.
Subsequently, their appointment was approved
by shareholders at the 2023 AGM.
A resolution proposing the re-appointment of
PriceWaterhouseCoopers LLP as auditor to the
Group will be put to the shareholders at the
AGM.
Directors’ statement as to
disclosure of information to
auditor
The Directors who were members of the Board
at the time of approving the Directors’ Report
are listed on pages 48 and 49. Having made
enquiries of fellow Directors and of the Group’s
auditor, each Director confirms that:
• to the best of their knowledge and belief,
there is no information relevant to the
preparation of their report of which the
Group’s auditor are unaware; and
• they have taken all the steps a Director might
reasonably be expected to have taken to be
aware of relevant audit information and to
establish that the Group’s auditor are aware of
that information.
This confirmation is given and should be
interpreted in accordance with the provisions of
s418 of the Companies Act 2006.
Energy and carbon emissions
reporting
In accordance with Streamlined Energy &
Carbon Reporting guidelines we are required
to disclose the annual quantity of emissions, in
tonnes of carbon dioxide equivalent. This year
the data disclosed covers our Scope 1 and 2
global energy usage and reimbursed mileage
in Scope 3. We have set out details of our
emissions on page 25 of the Strategic Report
and include them as part of the Directors’
Report disclosures by reference.
Political donations
The Group has a policy of not making any
donations, whether in the UK or overseas,
to political parties or other organisations,
independent election candidates or otherwise
incurring political expenditure. No political
donations were made in the year (2023: £nil).
Health and safety
GBG has a formal Health and Safety Policy. It is
the policy of the Group to consider the health
and welfare of team members by maintaining a
safe place and system of work as required by
legislation in each of the countries where the
Group operates.
Charitable donations
During the year GBG donated £23,929 (2023:
£27,297) to a variety of worthy charitable
causes.
Modern Slavery Statement
View our Modern Slavery Statement.
Treasury policy
The Group’s treasury policy aims to manage
the Group’s financial risk and to minimise the
adverse effects of fluctuations in the financial
markets on the value of the Group’s financial
assets and liabilities, on reported profitability
and on the cash flows of the Group.
By Order of the Board
Annabelle Burton
Company Secretary
10 June 2024
Directors' Report continued
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85
Directors’ responsibility statement
The Directors are responsible
for preparing the Annual Report
and financial statements in
accordance with applicable
United Kingdom law regulations.
Company law requires the Directors to prepare
financial statements for each financial year.
Under that law the Directors are required to
prepare the Group financial statements in
accordance with UK-adopted International
Accounting Standards in conformity with the
requirements of the Companies Act 2006
(IFRSs) and have also chosen to prepare
the Parent Company financial statements in
accordance with United Kingdom Generally
Accepted Accounting Practice (United
Kingdom Accounting Standards and applicable
law), including Financial Reporting Standard
101 Reduced Disclosure Framework (FRS 101).
Under company law the Directors must not
approve the financial statements unless they
are satisfied that they give a true and fair view
of the state of affairs of the Group and the
Company as at the end of the financial year and
of the profit or loss of the Group for that period.
In preparing these financial statements, the
Directors are required to:
• select and apply accounting policies in
accordance with accounting standard IAS 8
Accounting Policies, Changes in Accounting
Estimates and Errors and then apply them
consistently;
• make judgements and accounting estimates
that are reasonable and prudent;
• present information, including accounting
policies, in a manner that provides relevant,
reliable, comparable and understandable
information;
• provide additional disclosures when
compliance with the specific requirements in
IFRSs (and in respect of the Parent Company
financial statements, FRS 101) is insufficient
to enable users to understand the impact
of particular transactions, other events
and conditions on the Group and Company
financial position and financial performance;
• in respect of the Group financial statements,
state whether UK-adopted international
accounting standards as applied in
accordance with the provisions of the
Companies Act have been followed, subject
to any material departures disclosed and
explained in the financial statements;
• in respect of the Parent Company financial
statements, state whether applicable UK
Accounting Standards, including FRS 101,
have been followed, subject to any material
departures disclosed and explained in the
financial statements; and
• prepare the financial statements on the going
concern basis, unless it is inappropriate to
presume that the Company and/or the Group
will continue in business.
The Directors are responsible for keeping
adequate accounting records that are
sufficient to show and explain the Group’s
and Company’s transactions and disclose
with reasonable accuracy at any time the
financial position of the Company and enable
them to ensure that the financial statements
comply with the Companies Act 2006. They
are also responsible for taking such steps as
are reasonable to safeguard the assets of the
Company and hence for taking reasonable
steps for the prevention and detection of fraud
and other irregularities.
Under applicable law and regulations, the
Directors are also responsible for preparing
a Strategic Report, Directors’ Report and
Directors’ Remuneration Report that comply
with that law and those regulations. The
Directors are responsible for the maintenance
and integrity of the corporate and financial
information included on the Company’s
website. Legislation in the United Kingdom
governing the preparation and dissemination of
financial statements may differ from legislation
in other jurisdictions.
Dev Dhiman
Chief Executive Officer
On behalf of the Board
10 June 2024
David Ward
Chief Financial Officer
On behalf of the Board
10 June 2024
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86
Independent auditors’ report to the members of GB Group plc
Report on the audit of
the financial statements
Opinion
In our opinion:
• GB Group plc’s Group financial statements
and Company financial statements (the
“financial statements”) give a true and fair
view of the state of the Group’s and of the
Company’s affairs as at 31 March 2024 and of
the Group’s loss and the Group’s cash flows
for the year then ended;
• the Group financial statements have been
properly prepared in accordance with UK-
adopted international accounting standards
as applied in accordance with the provisions
of the Companies Act 2006;
• the Company financial statements have been
properly prepared in accordance with United
Kingdom Generally Accepted Accounting
Practice (United Kingdom Accounting
Standards, including FRS 101 “Reduced
Disclosure Framework”, and applicable law);
and
• the financial statements have been prepared
in accordance with the requirements of the
Companies Act 2006.
We have audited the financial statements,
included within the Annual Report, which
comprise: Consolidated balance sheet and
Company balance sheet as at 31 March 2024;
Consolidated statement of profit or loss,
Consolidated statement of comprehensive
income, Consolidated cash flow statement,
Consolidated statement of changes in equity
and the Company statement of changes in
equity for the year then ended; and the notes to
the financial statements, comprising material
accounting policy information and other
explanatory information.
Basis for opinion
We conducted our audit in accordance with
International Standards on Auditing (UK) (“ISAs
(UK)”) and applicable law. Our responsibilities
under ISAs (UK) are further described in the
Auditors’ responsibilities for the audit of the
financial statements section of our report.
We believe that the audit evidence we have
obtained is sufficient and appropriate to
provide a basis for our opinion.
Independence
We remained independent of the Group in
accordance with the ethical requirements
that are relevant to our audit of the financial
statements in the UK, which includes the FRC’s
Ethical Standard, as applicable to other listed
entities of public interest, and we have fulfilled
our other ethical responsibilities in accordance
with these requirements.
To the best of our knowledge and belief, we
declare that non-audit services prohibited by
the FRC’s Ethical Standard were not provided.
Other than those disclosed in note 6, we have
provided no non-audit services to the Company
or its controlled undertakings in the period
under audit.
Our audit approach
Context
GB Group plc is a listed identity verification,
location intelligence and fraud prevention
company. It has global operations,
headquartered in the UK, preparing
consolidated financial statements which are
primarily an aggregation of legal entities from
countries around the world. The year ended
31 March 2024 is our first year as external
auditors of the Group and Company, and as
part of our audit transition, we performed
specific procedures over opening balances by
reviewing the predecessor auditors' working
paper and risk assessment and re-evaluating
the predecessor auditors' conclusions
in respect of key sources of estimation
uncertainty and critical judgements in the
opening balance sheet at 1 April 2023. We also
performed process walkthroughs to understand
and evaluate the key financial processes and
controls across the Group. As we undertook
each phase of this first-year audit, we regularly
reconsidered our risk assessment to reflect
audit findings, including our assessment of the
Group’s control environment and the impact on
our planned audit approach. Given the nature
of the Group’s operations and recent results,
we considered the valuation of the goodwill of
the Identity - Americas cash generating unit
(CGU) to be the most significant area of risk
and therefore have included this as a key
audit matter.
Overview
Audit scope
• Our work incorporated full scope audits of five
components and audit procedures on specific
balances for a further component.
• The entities where we conducted audit work,
together with audit work performed at the
at the consolidated level, accounted for
approximately 95% of the Group’s revenue.
Key audit matters
• Goodwill impairment assessment (Group)
• Investment impairment assessment (parent)
Materiality
• Overall Group materiality: £1.4 million based
on 0.5% of revenue.
• Overall Company materiality: £1.1 million
based on 1% of revenue and capped at Group
allocated component materiality.
• Performance materiality: £1.0 million (Group)
and £0.8 million (Company).
The scope of our audit
As part of designing our audit, we determined
materiality and assessed the risks of material
misstatement in the financial statements.
Key audit matters
Key audit matters are those matters that, in
the auditors’ professional judgement, were of
most significance in the audit of the financial
statements of the current period and include
the most significant assessed risks of material
misstatement (whether or not due to fraud)
identified by the auditors, including those
which had the greatest effect on: the overall
audit strategy; the allocation of resources
in the audit; and directing the efforts of the
engagement team. These matters, and any
comments we make on the results of our
procedures thereon, were addressed in the
context of our audit of the financial statements
as a whole, and in forming our opinion thereon,
and we do not provide a separate opinion on
these matters.
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Independent auditors’ report to the members of GB Group plc continued
This is not a complete list of all risks identified by our audit.
Key audit matter
How our audit addressed the key audit matter
Goodwill impairment assessment (Group)
Refer to note 16 in the Group financial statements. Goodwill
of £561.6 million (2023: £626.4 million) is split across seven
cash-generating units (CGUs) that are considered annually
for impairment. Of the £561.6 million, £304.4 million (2023:
£364.7 million) relates to one CGU, Identity - Americas unit,
of which the significant risk of impairment is in relation to
the key assumptions in the model being revenue growth
rate, discount rate and long term growth rate. An impairment
of £54.7 million has been recognised in the current year. The
Directors have sensitised the value-in-use model to assess
the financial impact of key assumptions. We have identified
the valuation of the Identity - Americas CGU as a significant
risk due to historic trading performance of the CGU
compared to budget and due to the significant management
judgement and estimates used in the cash flow forecasts
that have deemed this to be a Key Audit Matter.
In assessing the appropriateness of
valuation of goodwill for the Identity -
Americas cash generating unit we have
performed the following procedures:
We evaluated and assessed the Group’s
future cash flow forecasts, the process
by which they were drawn up and tested
the underlying value in use calculations.
We compared key assumptions around
revenue growth rates to external market
research on industry market growth
rates to identify any inconsistencies.
We reviewed GB Group’s ability to grow
in line with the market historically to
support management’s revenue growth
rates in the cash flows.
We compared actual results with
previous forecasts to assess historical
accuracy of management forecasts. We
held discussions with the Directors and
management to understand the reasons
for the below market performance over
the last two years and the strategic
plans in place to support the assumption
that this downturn was exceptional and
not indicative of future performance.
We have agreed forecasts used back to
the board approved budget.
We assessed management's
assumptions for margins by comparing
to historical data.
We considered management bias
throughout the assumptions used and
considered any contradictory evidence.
We assessed the disclosures and
checked the mathematical accuracy of
the cash flow forecasts.
We engaged our internal valuations
experts to review the model, assess
management’s key assumptions for
the discount rates used by assessing
the cost of capital calculations for
the Group and comparing against
comparable organisations and the long-
term growth rates by comparing with
external forecasts.
As a result of these procedures, we were
satisfied with the Directors’ conclusion
around the level of impairment required
to be recognised in the current year.
Investment impairment assessment (parent)
Refer to note C.10 in the Company financial statements.
The Company financial statements have investment in
subsidiaries of £570.2 million (2023: £629.5 million). An
impairment of £67.9 million has been recognised in the
current year against the GBG (US) Holdings LLC investment.
Given the magnitude of this balance, and the management
judgement involved in determining whether any impairment
triggers exist, we have considered the risk of impairment
of these assets as a Key Audit Matter. We have focussed
our work on the investment in GBG (US) Holdings LLC
investment as a significant risk.
In assessing the appropriateness
of the investment valuation of GB
(US) Holdings LLC we performed the
following procedures:
We evaluated and assessed the
Company’s investments in subsidiaries
with reference to the Group’s future
cash flow forecasts and checked the
allocation of this by legal entity.
We performed testing over the cash flow
forecasts as referenced in the above
Key Audit Matter.
We obtained a schedule of investments
in subsidiary undertakings and ensured
this is reconciled to the financial
statements.
We have reviewed the disclosures
included within note C.10 of the financial
statements and consider these to be
appropriate.
As a result of these procedures, we were
satisfied with the Directors’ conclusion
around the level of impairment required
to be recognised in the current year.
How we tailored the audit scope
We tailored the scope of our audit to ensure
that we performed enough work to be able to
give an opinion on the financial statements as
a whole, taking into account the structure of
the Group and the Company, the accounting
processes and controls, and the industry in
which they operate.
The Group is an identity verification, location
intelligence and fraud prevention company.
The Group is structured in three operating
segments: Location, Identity and Fraud.
In establishing the overall approach to the
Group audit, we determined the type of work
that needed to be performed at the entities
by us, as the Group engagement team, or
component auditors operating under our
instruction. Where work was performed by
component auditors, we determined the level of
involvement we needed to have in this work to
be able to conclude that sufficient appropriate
audit evidence had been obtained. Our work
incorporated full scope audits of GB Group plc,
IDology Inc, Loqate Inc, Acuant Inc and GBG
(Australia) Holding Pty Ltd, as well as limited
scope procedures in relation to GBG (US)
Holdings LLC. The entities where we conducted
audit work accounted for approximately 95%
of the Group’s revenue.
The impact of climate risk on our audit
As part of our audit we made enquiries of
management to understand the extent of the
potential impact of climate risk on the Group’s
and Company’s financial statements, and we
remained alert when performing our audit
procedures for any indicators of the impact of
climate risk. Our procedures did not identify
any material impact as a result of climate
risk on the Group’s and Company’s financial
statements.
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88
Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative
thresholds for materiality. These, together with qualitative considerations, helped us to determine
the scope of our audit and the nature, timing and extent of our audit procedures on the individual
financial statement line items and disclosures and in evaluating the effect of misstatements, both
individually and in aggregate on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a
whole as follows:
For each component in the scope of our Group
audit, we allocated a materiality that is less
than our overall Group materiality. The range of
materiality allocated across components was
£0.9 million to £1.1 million. Certain components
were audited to a local statutory audit materiality
that was also less than our overall Group
materiality.
We use performance materiality to reduce to
an appropriately low level the probability that
the aggregate of uncorrected and undetected
misstatements exceeds overall materiality.
Specifically, we use performance materiality in
determining the scope of our audit and the nature
and extent of our testing of account balances,
classes of transactions and disclosures, for
example in determining sample sizes.
Financial statements - Group
Financial statements - Company
Overall
materiality
£1.4 million
£1.1 million.
How we
determined it
0.5% of revenue
1% of revenue and capped at group
allocated component materiality
Rationale for
benchmark
applied
We considered materiality in a
number of different ways, and used
our professional judgement having
applied ‘rule of thumb’ percentages to
a number of potential benchmarks. On
the basis of this, we concluded that
0.5% of revenue is an appropriate
level of materiality considering the
overall scale of the business.
We have calculated the statutory
materiality as 1% of revenue and
capped at group allocated component
materiality. As a component of the
group audit, we have chosen that
materiality cannot exceed the 90% of
group benchmark. We deemed 1% of
revenue to be appropriate given the
company is a trading entity.
Our performance materiality was 75% of
overall materiality, amounting to £1.0 million for
the Group financial statements and £0.8 million
for the Company financial statements.
In determining the performance materiality,
we considered a number of factors - the
history of misstatements, risk assessment
and aggregation risk and the effectiveness of
controls - and concluded that an amount in the
middle of our normal range was appropriate.
We agreed with those charged with governance
that we would report to them misstatements
identified during our audit above £0.07 million
(Group audit) and £0.06 million (Company
audit) as well as misstatements below those
amounts that, in our view, warranted reporting
for qualitative reasons.
Conclusions relating to going
concern
Our evaluation of the directors’ assessment of the
Group's and the Company’s ability to continue
to adopt the going concern basis of accounting
included:
• We obtained the latest assessments supporting
management’s conclusions with respect to
the going concern basis of preparation of the
financial statements and assessed the downside
scenarios to ensure that they are appropriately
severe but plausible.
• We reviewed the terms of the Revolving Credit
Facility ('RCF') and management’s analysis of
both liquidity and covenant compliance to satisfy
ourselves that no breaches are anticipated over
the period of assessment.
• We tested the mathematical integrity of
management’s going concern forecast model.
• We evaluated the historical accuracy of the
budgeting process to assess the reliability of the
data.
• We reviewed the disclosures made in respect
of going concern included in the financial
statements.
• We agreed the opening cash position within the
forecast.
Based on the work we have performed, we
have not identified any material uncertainties
relating to events or conditions that, individually
or collectively, may cast significant doubt on the
Group's and the Company’s ability to continue
as a going concern for a period of at least twelve
months from when the financial statements are
authorised for issue.
In auditing the financial statements, we have
concluded that the directors’ use of the going
concern basis of accounting in the preparation of
the financial statements is appropriate.
However, because not all future events or
conditions can be predicted, this conclusion is not
a guarantee as to the Group's and the Company's
ability to continue as a going concern.
Our responsibilities and the responsibilities
of the directors with respect to going concern
are described in the relevant sections of this
report.
Reporting on other information
The other information comprises all of the
information in the Annual Report other than
the financial statements and our auditors’
report thereon. The directors are responsible
for the other information. Our opinion on
the financial statements does not cover the
other information and, accordingly, we do
not express an audit opinion or, except to the
extent otherwise explicitly stated in this report,
any form of assurance thereon.
In connection with our audit of the financial
statements, our responsibility is to read the
other information and, in doing so, consider
whether the other information is materially
inconsistent with the financial statements
or our knowledge obtained in the audit, or
otherwise appears to be materially misstated. If
we identify an apparent material inconsistency
or material misstatement, we are required to
perform procedures to conclude whether there
is a material misstatement of the financial
statements or a material misstatement of
the other information. If, based on the work
we have performed, we conclude that there
is a material misstatement of this other
information, we are required to report that
fact. We have nothing to report based on these
responsibilities.
With respect to the Strategic report and
Directors' report, we also considered whether
the disclosures required by the UK Companies
Act 2006 have been included.
Based on our work undertaken in the course of
the audit, the Companies Act 2006 requires us
also to report certain opinions and matters as
described below.
Independent auditors’ report to the members of GB Group plc continued
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Independent auditors’ report to the members of GB Group plc continued
Strategic report and Directors' report
In our opinion, based on the work undertaken in
the course of the audit, the information given in
the Strategic report and Directors' report for the
year ended 31 March 2024 is consistent with the
financial statements and has been prepared in
accordance with applicable legal requirements.
In light of the knowledge and understanding of
the Group and Company and their environment
obtained in the course of the audit, we did
not identify any material misstatements in the
Strategic report and Directors' report.
Responsibilities for the financial
statements and the audit
Responsibilities of the directors for the
financial statements
As explained more fully in the Directors'
responsibility statement, the directors are
responsible for the preparation of the financial
statements in accordance with the applicable
framework and for being satisfied that they
give a true and fair view. The directors are
also responsible for such internal control as
they determine is necessary to enable the
preparation of financial statements that are
free from material misstatement, whether due
to fraud or error.
In preparing the financial statements, the
directors are responsible for assessing the
Group’s and the Company’s ability to continue
as a going concern, disclosing, as applicable,
matters related to going concern and using the
going concern basis of accounting unless the
directors either intend to liquidate the Group or
the Company or to cease operations, or have no
realistic alternative but to do so.
Auditors’ responsibilities for the audit of the
financial statements
Our objectives are to obtain reasonable
assurance about whether the financial
statements as a whole are free from material
misstatement, whether due to fraud or error, and
to issue an auditors’ report that includes
our opinion.
Reasonable assurance is a high level of
assurance, but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will
always detect a material misstatement when it
exists. Misstatements can arise from fraud or
error and are considered material if, individually
or in the aggregate, they could reasonably be
expected to influence the economic decisions
of users taken on the basis of these financial
statements.
Irregularities, including fraud, are instances
of non-compliance with laws and regulations.
We design procedures in line with our
responsibilities, outlined above, to detect
material misstatements in respect of
irregularities, including fraud. The extent to
which our procedures are capable of detecting
irregularities, including fraud, is detailed below.
Based on our understanding of the Group and
industry, we identified that the principal risks
of non-compliance with laws and regulations
related to employment law and data protection
laws and regulations, and we considered the
extent to which non-compliance might have a
material effect on the financial statements. We
also considered those laws and regulations that
have a direct impact on the financial statements
such as local and international tax laws and
the Companies Act 2006. We evaluated
management’s incentives and opportunities
for fraudulent manipulation of the financial
statements (including the risk of override of
controls), and determined that the principal risks
were related to posting inappropriate journal
entries to improve financial performance, and
management bias in accounting estimates and
judgements. The Group engagement team
shared this risk assessment with the component
auditors so that they could include appropriate
audit procedures in response to such risks in
their work. Audit procedures performed by the
Group engagement team and/or component
auditors included:
• Challenging assumptions and judgements
made by management in their significant
accounting estimates (because of the risk of
management bias);
• Discussions with the Audit Committee,
management and the in-house legal team
including consideration of known or suspected
instances of non-compliance with laws and
regulation or fraud;
• Enquired with external legal counsel around
actual and potential litigation and claims;
• Reviewing minutes of meetings of those
charged with governance including board
meetings;
• Auditing the tax computations to check
compliance with tax legislation;
• Identifying and testing journal entries, in
particular any journal entries posted with
unusual account combinations; and
• Reviewing financial statement disclosures
and testing to supporting documentation
where appropriate to assess compliance with
applicable laws and regulations.
There are inherent limitations in the audit
procedures described above. We are less
likely to become aware of instances of non-
compliance with laws and regulations that are
not closely related to events and transactions
reflected in the financial statements. Also, the
risk of not detecting a material misstatement
due to fraud is higher than the risk of not
detecting one resulting from error, as fraud may
involve deliberate concealment by, for example,
forgery or intentional misrepresentations, or
through collusion.
Our audit testing might include testing
complete populations of certain transactions
and balances, possibly using data auditing
techniques. However, it typically involves
selecting a limited number of items for testing,
rather than testing complete populations.
We will often seek to target particular
items for testing based on their size or risk
characteristics.
In other cases, we will use audit sampling
to enable us to draw a conclusion about the
population from which the sample is selected.
A further description of our responsibilities for
the audit of the financial statements is located
on the FRC’s website at: www.frc.org.uk/
auditorsresponsibilities. This description forms
part of our auditors’ report.
Use of this report
This report, including the opinions, has been
prepared for and only for the Company’s
members as a body in accordance with Chapter
3 of Part 16 of the Companies Act 2006 and for
no other purpose. We do not, in giving these
opinions, accept or assume responsibility for
any other purpose or to any other person to
whom this report is shown or into whose hands
it may come save where expressly agreed by our
prior consent in writing.
Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required
to report to you if, in our opinion:
• we have not obtained all the information and
explanations we require for our audit; or
• adequate accounting records have not been
kept by the company, or returns adequate
for our audit have not been received from
branches not visited by us; or
• certain disclosures of directors’ remuneration
specified by law are not made; or
• the company financial statements are not in
agreement with the accounting records and
returns.
We have no exceptions to report arising from
this responsibility.
Hazel Macnamara (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers
LLP, Chartered Accountants and Statutory
Auditors, Manchester
10 June 2024
Strategic Report
Governance
Financial Statements
Annual Report 2024
90
Consolidated statement of profit or loss
Year ended 31 March 2024
Note
2024
2023
Adjusted
£’000
Normalised and
exceptional
items1
£’000
Total
£’000
Adjusted
£’000
Normalised
and exceptional
items1
£’000
Total
£’000
Revenue
3, 4
277,325
–
277,325
278,810
–
278,810
Cost of sales
(82,805)
–
(82,805)
(80,994)
–
(80,994)
Gross profit
194,520
–
194,520
197,816
–
197,816
Operating expenses
(132,386)
(102,548)
(234,934)
(141,235)
(172,246)
(313,481)
Net (loss)/gain on foreign exchange
(162)
–
(162)
3,022
–
3,022
(Increase)/decrease in expected credit losses of trade receivables
(775)
–
(775)
214
–
214
Operating profit/(loss)
61,197
(102,548)
(41,351)
59,817
(172,246)
(112,429)
Finance income
3, 9
262
–
262
636
–
636
Finance costs
10
(9,297)
–
(9,297)
(7,037)
–
(7,037)
Profit/(loss) before tax
52,162
(102,548)
(50,386)
53,416
(172,246)
(118,830)
Income tax credit/(charge)
11
(13,155)
14,958
1,803
(11,354)
10,390
(964)
Profit/(loss) after tax for the year attributable to equity holders of the Parent
39,007
(87,590)
(48,583)
42,062
(161,856)
(119,794)
Earnings per share
13
– basic earnings per share for the year
15.4p
(19.2p)
16.7p
(47.5p)
– diluted earnings per share for the year
15.1p
(19.2p)
16.4p
(47.5p)
1. Normalised items include: amortisation of acquired intangibles £39,447,000 (2023: £42,758,000) (see note 15) and share-based payment charges £3,488,000 (2023: £2,313,000) (see note 30). Exceptional items total £59,613,000 (2023: £127,175,000)
(see note 7).
Strategic Report
Governance
Financial Statements
Annual Report 2024
91
Note
2024
£’000
2023
£’000
Loss after tax for the year attributable
to equity holders of the Parent
(48,583)
(119,794)
Other comprehensive (expense)/income:
Items that may be reclassified to profit or loss in subsequent periods:
Exchange differences on retranslation of foreign operations (net of tax)
(12,306)
35,060
Total items that may be reclassified to profit or loss in subsequent periods
(12,306)
35,060
Items that will not be reclassified to profit or loss in subsequent periods:
Fair value movement on investments
19
(1,600)
700
Total items that will not be reclassified to profit or loss in subsequent periods
(1,600)
700
Total other comprehensive (expense)/income
(13,906)
35,760
Total comprehensive expense for the year attributable to equity holders of the Parent
(62,489)
(84,034)
Consolidated statement of comprehensive income
Year ended 31 March 2024
Strategic Report
Governance
Financial Statements
Annual Report 2024
92
Other reserves
Note
Equity
share
capital
£’000
Share
premium
£’000
Merger
reserve
£’000
Capital
redemption
reserve
£’000
Foreign
currency
translation
reserve
£’000
Treasury
shares
£’000
Total other
reserves
£’000
Retained
earnings/
(accumulated
losses)
£’000
Total
equity
£’000
Balance at 1 April 2022
6,297
566,769
99,999
3
1,423
–
101,425
112,636
787,127
Loss for the period
–
–
–
–
–
–
–
(119,794)
(119,794)
Other comprehensive income
–
–
–
–
35,060
–
35,060
700
35,760
Total comprehensive income/
(expense) for the period
–
–
–
–
35,060
–
35,060
(119,094)
(84,034)
Issue of share capital
23
14
812
–
–
–
–
–
–
826
Investment in own shares
31
–
–
–
–
–
(2,500)
(2,500)
–
(2,500)
Cost of employee benefit
trust shares issued to
employees
31
–
–
–
–
–
1,426
1,426
(1,417)
9
Share-based payments
30
–
–
–
–
–
–
–
2,313
2,313
Tax on share options
–
–
–
–
–
–
–
(143)
(143)
Net share forfeiture receipt
23
–
–
–
–
–
–
–
146
146
Equity dividend
12
–
–
–
–
–
–
–
(9,600)
(9,600)
Balance at 31 March 2023
6,311
567,581
99,999
3
36,483
(1,074)
135,411
(15,159)
694,144
Loss for the period
–
–
–
–
–
–
–
(48,583)
(48,583)
Other comprehensive expense
–
–
–
–
(12,306)
–
(12,306)
(1,600)
(13,906)
Total comprehensive expense
for the period
–
–
–
–
(12,306)
–
(12,306)
(50,183)
(62,489)
Issue of share capital
23
4
–
–
–
–
–
–
–
4
Cost of employee benefit
trust shares issued to
employees
31
–
–
–
–
–
947
947
(939)
8
Share-based payments
30
–
–
–
–
–
–
–
3,488
3,488
Tax on share options
11
–
–
–
–
–
–
–
104
104
Net share forfeiture refund
23
–
–
–
–
–
–
–
(37)
(37)
Equity dividend
12
–
–
–
–
–
–
–
(10,093)
(10,093)
Balance at 31 March 2024
6,315
567,581
99,999
3
24,177
(127)
124,052
(72,819)
625,129
Consolidated statement of changes in equity
Year ended 31 March 2024
Strategic Report
Governance
Financial Statements
Annual Report 2024
93
Consolidated balance sheet
As at 31 March 2024
Note
2024
£’000
2023
£’000
ASSETS
Non-current assets
Goodwill
14
561,622
626,394
Other intangible assets
15
181,064
224,834
Property, plant and equipment
17
1,650
3,752
Right-of-use assets
18
1,565
1,449
Investments
19
1,426
3,026
Deferred tax asset
11
937
793
Trade and other receivables
21
6,223
4,305
754,487
864,553
Current assets
Inventories
20
1,316
2,619
Trade and other receivables
21
72,841
65,313
Current tax
2,939
1,083
Cash and cash equivalents
22
21,321
21,552
98,417
90,567
Total assets
852,904
955,120
Note
2024
£’000
2023
£’000
EQUITY AND LIABILITIES
Capital and reserves
Equity share capital
23, 31
6,315
6,311
Share premium
23, 31
567,581
567,581
Other reserves
31
124,052
135,411
Accumulated losses
(72,819)
(15,159)
Total equity attributable to equity holders of the Parent
625,129
694,144
Non-current liabilities
Loans and borrowings
24
101,115
126,411
Lease liabilities
25
875
524
Provisions
27
741
792
Deferred revenue
2,337
1,492
Deferred tax liability
11
23,819
34,986
128,887
164,205
Current liabilities
Lease liabilities
25
836
1,242
Trade and other payables
26
43,669
37,312
Deferred revenue
52,961
55,015
Contingent consideration
34
–
1,237
Current tax
1,422
1,965
98,888
96,771
Total liabilities
227,775
260,976
Total equity and liabilities
852,904
955,120
The financial statements on pages 91 to 137 were approved by the Board of DIrectors on 10 June
2024 and signed on its behalf.
D Dhiman
D M Ward
Director
Director
Registered in England number 2415211
Strategic Report
Governance
Financial Statements
Annual Report 2024
94
Note
2024
£’000
2023
£’000
Cash flows used in investing activities
Acquisition of subsidiaries, net of cash acquired
34
(1,200)
(4,991)
Purchase of plant and equipment
17
(448)
(968)
Purchase of software
15
(9)
(57)
Proceeds from disposal of plant and equipment
1,306
79
Net outflow from disposal of businesses
–
(18)
Interest received
9
82
569
Net cash flows used in investing activities
(269)
(5,386)
Cash flows used in financing activities
Finance costs paid
10
(8,147)
(6,426)
Proceeds from issue of shares
23
4
826
Purchase of shares for Employee Benefit Trust
–
(2,500)
(Refund)/proceeds from share forfeiture
23
(37)
146
Proceeds from new borrowings, net of
arrangement fee
24
9,714
12,000
Repayment of borrowings
24
(32,967)
(22,394)
Repayment of lease liabilities
25
(1,399)
(2,062)
Dividends paid to equity shareholders
12
(10,093)
(9,600)
Net cash flows used in financing activities
(42,925)
(30,010)
Net increase/(decrease) in cash
and cash equivalents
348
(1,089)
Effect of exchange rates on cash
and cash equivalents
(579)
339
Cash and cash equivalents at the beginning
of the year
21,552
22,302
Cash and cash equivalents at the end of the year
22
21,321
21,552
Note
2024
£’000
2023
£’000
Loss before tax:
(50,386)
(118,830)
Adjustments to reconcile loss before tax to net cash
flows
Finance income
9
(262)
(636)
Finance costs
10
9,297
7,037
Depreciation of property, plant and equipment
17
1,306
1,771
Depreciation of right-of-use assets
18
1,155
1,491
Amortisation of intangible assets
15
39,612
42,826
Impairment of goodwill and intangible assets
14, 15
54,707
125,022
(Gain)/loss on disposal of plant and equipment
and intangible assets
5
(24)
379
Loss on disposal of businesses
7
–
113
Fair value adjustment on contingent consideration
34
–
(1,660)
Unrealised gain on foreign exchange
(61)
(3,512)
Share-based payments
30
3,488
2,313
Decrease/(increase) in inventories
1,227
(1,448)
Decrease in provisions
(36)
(47)
Increase in trade and other receivables
(11,723)
(20)
Increase/(decrease) in trade and other payables
5,373
(16,229)
Cash generated from operations
53,673
38,570
Income tax paid
(10,131)
(4,263)
Net cash generated from operating activities
43,542
34,307
Consolidated cash flow statement
Year ended 31 March 2024
Strategic Report
Governance
Financial Statements
Annual Report 2024
95
1. Corporate information
GB Group plc (‘the Company’) and its subsidiaries (together ‘the Group’) provide identity data
intelligence products and services helping organisations recognise and verify all elements
of an individual’s identity at key interactions in their business processes. The nature of the
Group’s operations and its principal activities are set out in the Financial Review.
The Company is a public company limited by shares incorporated in the United Kingdom
and is listed on the London Stock Exchange with its ordinary shares traded on the Alternative
Investment Market. The Company registration number is 2415211. The address of its registered
office is The Foundation, Herons Way, Chester Business Park, Chester, CH4 9GB. A list of the
investments in subsidiaries, including the name, country of incorporation, registered office
address and proportion of ownership interest is given in note 19.
These consolidated financial statements have been approved for issue by the Board of Directors
on 10 June 2024.
The Company’s financial statements are included in the consolidated financial statements
of GB Group plc. As permitted by section 408 of the Companies Act 2006, the profit and loss
account of the Company is not presented.
The Company, GB Group plc, is the ultimate group company of the consolidated group.
2. Accounting policies
2.1 Basis of preparation
The consolidated financial statements have been prepared in accordance with UK-adopted
international accounting standards, as applied in accordance with the provisions of the
Companies Act 2006. The Company has taken advantage of section 408 of the Companies Act
2006 not to present the Parent Company profit and loss account. The financial statements have
been prepared under the historical cost convention, modified in respect of the revaluation of
financial assets and liabilities at fair value. A summary of the significant accounting policies is
set out below.
The accounting policies that follow set out those policies that apply in preparing the financial
statements for the year ended 31 March 2024 and the Group and Company have applied the
same policies throughout the year.
The Company has elected to prepare its Parent Company financial statements in accordance
with Financial Reporting Standard 101 Reduced Disclosure Framework (‘FRS 101’). Refer to
note C2.1 for further details.
In preparing the consolidated financial statements, management has considered the impact of
climate change, particularly in the context of the financial statements as a whole, in addition to
disclosures in the Strategic Report this year. This included an assessment of the impact on the
carrying value of non-current assets and the impact on forecasts used in the impairment review
and the assessments of going concern and longer-term viability.
These considerations did not have a material impact on the financial reporting judgements
and estimates, consistent with the assessment that climate change is not expected to have
a significant impact on the Group’s going concern assessment to 30 September 2025 nor
the viability of the Group over the next three years.
Notes to the consolidated financial statements
In reporting financial information, the Group presents Alternative Performance Measures (‘APMs’)
which are not defined or specified under the requirements of IFRS. The Group believes that these
APMs, which are not considered to be a substitute for or superior to IFRS measures, provide
stakeholders with additional helpful information to reflect the underlying business and enable
more meaningful comparison over time. A glossary on pages 149 to 152 provides a comprehensive
list of APMs that the Group uses, including an explanation of how they are calculated, why they
are used and how they can be reconciled to a statutory measure where relevant.
2.2 Going concern
The assessment of going concern relies heavily on the ability to forecast future cash flows
over the going concern assessment period which covered the period through to 30 September
2025. Although GBG has a robust budgeting and forecasting process, the continued economic
uncertainty caused by the macroeconomic environment means that additional sensitivities and
analysis have been applied to test the going concern assumption under a range of severe but
plausible downside scenarios and a reverse stress test scenario.
The Group has continued to successfully convert adjusted operating profit into cash. During
the year to 31 March 2024, GBG’s operating cash to Adjusted EBITDA ratio (‘cash conversion’)
was 90.6%, an increase of 23.3% on the prior year. This improvement was due to a number of
specific non-recurring factors which distorted the cash conversion in the prior period, with the
performance now more reflective of historic and expected future levels.
At 31 March 2024 GBG was in a net debt position of £80.9 million (FY23: £105.9 million),
an improvement of £25 million since 31 March 2023. Cash flow was negatively impacted
by continued increases in interest rates during the first half of the year (Secured Overnight
Financing Rate (SOFR)) increased by over 0.5% throughout the financial year which has led to
higher interest payments on the RCF facility.
The RCF facility has a maximum level of £175 million which could be drawn down for working
capital purposes if required. As at 31 March 2024, the available undrawn facility was £72.8
million compared to £47.5 million at 31 March 2023.
Following bank approval in October 2023 for the exercise of the one-year extension on the
facility, the Group has access to £175 million facility until July 2026 and £140 million until July
2027.
The facility agreement has the following covenants:
• Leverage – consolidated net borrowings as a multiple of Adjusted EBITDA for the last 12
months, assessed quarterly in arrears, must not exceed 3.00:1.00
• Interest cover – Adjusted EBITDA for the past 12 months as a multiple of consolidated net
finance charges, for the last 12 months, assessed quarterly in arrears, must not fall below
4.00:1.00
Strategic Report
Governance
Financial Statements
Annual Report 2024
96
Profit or loss and each component of other comprehensive income (‘OCI’) are attributed to the
equity holders of the Parent of the Group and to the non-controlling interests, even if this results in
the non-controlling interests having a deficit balance. When necessary, adjustments are made to
the financial statements of subsidiaries to bring their accounting policies into line with the Group’s
accounting policies. All intra-group assets and liabilities, equity, income, expenses and cash flows
relating to transactions between members of the Group are eliminated in full on consolidation.
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for
as an equity transaction.
If the Group loses control over a subsidiary, it derecognises the related assets (including
goodwill), liabilities, non-controlling interest and other components of equity while any resultant
gain or loss is recognised in profit or loss. Any investment retained is recognised at fair value.
Business combinations
The Group uses the acquisition method of accounting to account for business combinations
of entities not under common control. The consideration transferred for the acquisition of a
subsidiary is the fair values of the assets transferred, the liabilities incurred, and the equity
interests issued by the Group. The consideration transferred includes the fair value of any
asset or liability resulting from a contingent consideration arrangement. Acquisition-related
costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent
liabilities assumed in a business combination are measured initially at their fair values at the
acquisition date.
Any contingent consideration to be transferred by the acquirer is recognised at fair value at the
acquisition date. Contingent consideration classified as a financial liability within the scope of
IFRS 9 ‘Financial Instruments: Recognition and Measurement’ is measured at fair value with the
changes in fair value recognised in the statement of profit or loss.
If a business combination is achieved in stages, the acquisition date fair value of the Group’s
previously held investment in the acquiree is remeasured to fair value at the acquisition date with
any resultant gain or loss recognised through profit or loss.
Employee Benefit Trust (EBT)
The Group established an EBT (The GB Group Employee Benefit Trust) on 10 May 2022 to
enable shares to be bought in the market to satisfy the demand from share awards under the
Group’s employee share plans. The EBT is a separately administered trust and is funded by
loans from Group companies. The assets of the trust comprise shares in GB Group plc and
cash balances. The Group recognises the assets and liabilities of the trust in the consolidated
financial statements and shares held by the trust are recorded at cost as treasury shares
as a deduction from shareholders’ equity.
Consideration received for the sale of shares held by the trust is recognised in equity, with
any difference between the proceeds from the sale and the original cost being taken to
retained earnings.
As at 31 March 2024, the EBT held 31,044 shares in the Company (31 March 2023: 260,939
shares).
2. Accounting policies continued
The Board approved budget showed continued significant headroom in the covenant compliance
tests and sufficient liquidity to maintain operations. The budget model was then adjusted to
reflect a severe but plausible downside scenario, including increases in costs, interest rates as
well as reduced revenue growth both on an overall Group basis and specific to certain areas of
the business. Under these downside scenarios, the covenant compliance and liquidity position
did not result in any risk to going concern. Relative to the budget produced by management
there have not been any adverse variances in the overall trading performance since the year-end.
Following consideration of the budget and a range of downside scenarios, the Directors have a
reasonable expectation that the Company has adequate resources to continue in operational
existence for the foreseeable future. Therefore, the Directors consider it appropriate to adopt
the going concern basis of accounting in preparing the consolidated financial statements.
2.3 Significant accounting policies
The Group and Company financial statements are presented in pounds Sterling and all values are
rounded to the nearest thousand pounds (£’000) except where otherwise indicated.
Basis of consolidation
The consolidated financial statements comprise the financial statements of the Group and its
subsidiaries as at 31 March each year.
Control is achieved when the Group is exposed, or has rights, to variable returns from its
involvement with the investee and has the ability to affect those returns through its power over
the investee. Specifically, the Group controls an investee if, and only if, the Group has:
• Power over the investee (i.e. existing rights that give it the current ability to direct the relevant
activities of the investee)
• Exposure, or rights, to variable returns from its involvement with the investee
• The ability to use its power over the investee to affect its returns
Generally, there is a presumption that a majority of voting rights result in control. To support this
presumption and when the Group has less than a majority of the voting or similar rights of an
investee, the Group considers all relevant facts and circumstances in assessing whether it has
power over an investee, including:
• The contractual arrangement with the other vote holders of the investee
• Rights arising from other contractual arrangements
• The Group’s voting rights and potential voting rights
The Group re-assesses whether or not it controls an investee if facts and circumstances
indicate that there are changes to one or more of the three elements of control. Consolidation
of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the
Group loses control of the subsidiary.
Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year
are included in the consolidated financial statements from the date the Group gains control until
the date the Group ceases to control the subsidiary.
Notes to the consolidated financial statements continued
Strategic Report
Governance
Financial Statements
Annual Report 2024
97
Notes to the consolidated financial statements continued
An assessment is made at each reporting date as to whether there is any indication that
previously recognised impairment losses may no longer exist or may have decreased. If such
indication exists, the recoverable amount is estimated. A previously recognised impairment loss
is reversed only on assets other than goodwill if there has been a change in the estimates used
to determine the asset’s recoverable amount since the last impairment loss was recognised. If
that is the case, the carrying amount of the asset is increased to its recoverable amount. That
increased amount cannot exceed the carrying amount that would have been determined, net of
depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal
is recognised in profit or loss. After such a reversal the depreciation charge is adjusted in future
periods to allocate the asset’s revised carrying amount, less any residual value, on a systematic
basis over its remaining useful life.
Property, plant and equipment
Property, plant and equipment is stated at cost less accumulated depreciation and any
impairment in value. Depreciation is calculated to write-off cost less estimated residual value
based on prices prevailing at the balance sheet date on a straight-line basis over the estimated
useful life of each asset as follows:
Plant and equipment
– over 3 to 10 years
Freehold buildings
– over 50 years
Freehold land is not depreciated.
The carrying values of property, plant and equipment are reviewed for impairment when events
or changes in circumstances indicate the carrying value may not be recoverable. If any such
indication exists and where the carrying values exceed the estimated recoverable amount, the
assets are written down to their recoverable amount.
An item of property, plant and equipment is derecognised upon disposal or when no future
economic benefits are expected to arise from the continued use of the asset. Any gain or loss
arising on derecognition of the asset (calculated as the difference between the net disposal
proceeds and the carrying amount of the item) is included in the consolidated statement of profit
or loss in the year the item is derecognised.
Residual values and estimated remaining lives are reviewed annually.
Right-of-use assets
The Group recognises right-of-use assets at the commencement date of the lease (i.e. the date
the underlying asset is available for use). Right-of-use assets are measured at cost, less any
accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease
liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised,
initial direct costs incurred, and lease payments made on or before the commencement date less
any lease incentives received. Unless the Group is reasonably certain to obtain ownership of the
leased asset at the end of the lease term, the recognised right-of-use assets are depreciated on
a straight-line basis over the shorter of its estimated useful life and the lease term. Right-of-use
assets are subject to impairment.
2. Accounting policies continued
2.3 Significant accounting policies continued
Foreign currencies – consolidation
The Group’s consolidated financial statements are presented in pounds Sterling, which is also
the Parent Company’s functional currency. For each entity the Group determines the functional
currency and items included in the financial statements of each entity are measured using
that functional currency. On consolidation, the assets and liabilities of foreign operations are
translated into pounds Sterling at the rate of exchange prevailing at the reporting date and
their statements of profit or loss are translated at average exchange rates for the period.
The exchange differences arising on translation for consolidation are recognised in OCI.
On disposal of a foreign operation, the component of OCI relating to that particular foreign
operation is recognised in profit or loss.
Any goodwill arising on the acquisition of a foreign operation and any fair value adjustments
to the carrying amounts of assets and liabilities arising on the acquisition are treated as
assets and liabilities of the foreign operation and translated at the spot rate of exchange
at the reporting date.
Foreign currencies – transactions and balances
Transactions in foreign currencies are initially recorded by the Group’s entities at their respective
functional currency spot rates at the date the transaction first qualifies for recognition.
Monetary assets and liabilities denominated in foreign currencies are translated at the functional
currency spot rates of exchange at the reporting date. Differences arising on settlement or
translation of monetary items are recognised within operating expenses as part of profit or loss.
Non-monetary items that are measured in terms of historical cost in a foreign currency are
translated using the exchange rates at the dates of the initial transactions. Non-monetary items
measured at fair value in a foreign currency are translated using the exchange rates at the date
when the fair value is determined. The gain or loss arising on translation of non-monetary items
measured at fair value is treated in line with the recognition of the gain or loss on the change
in fair value of the item (i.e. translation differences on items whose fair value gain or loss is
recognised in OCI or profit or loss are also recognised in OCI or profit or loss, respectively).
Impairment of assets
The Group assesses at each reporting date whether there is an indication that an asset may
be impaired. If any such indication exists, or when annual impairment testing for an asset
is required, the Group makes an estimate of the asset’s recoverable amount. An asset’s
recoverable amount is the higher of an asset’s or cash-generating unit’s (‘CGU’s) fair value less
costs of disposal and its value-in-use and is determined for an individual asset, unless the asset
does not generate cash inflows that are largely independent of those from other assets or groups
of assets. Where the carrying amount of an asset exceeds its recoverable amount, the asset is
considered impaired and is written down to its recoverable amount. In assessing value-in-use,
the estimated future cash flows are discounted to their present value using a pre-tax discount
rate that reflects current market assessments of the time value of money and the risks specific
to the asset. Impairment losses of continuing operations are recognised in the consolidated
statement of profit or loss in those expense categories consistent with the function of the
impaired asset.
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Estimated useful lives typically applied are as follows:
Software technology assets – over 2 to 8 years
Brands and trademarks
– over 2 to 5 years
Non-compete agreements
– over 3 to 5 years
Customer relationships
– over 10 years
Computer software licences
Acquired computer software licences comprise computer software licences purchased from third
parties, and also the cost of internally developed software. Acquired computer software licences
are initially capitalised at cost, which includes the purchase price (net of any discounts and
rebates) and other directly attributable costs of preparing the asset for its intended use. Direct
expenditure including employee costs, which enhances or extends the performance of computer
software beyond its specifications and which can be reliably measured, is added to the original
cost of the software.
Costs associated with maintaining the computer software are recognised as an expense when
incurred. Computer software licences are subsequently carried at cost less accumulated
amortisation and accumulated impairment losses. These costs are amortised to profit or loss
using the straight-line method over their estimated useful lives of 3 to 5 years.
The amortisation period and amortisation method of intangible assets other than goodwill are
reviewed at least at each balance sheet date. The effects of any revision are recognised in profit
or loss when the changes arise.
Inventories
Inventories comprise identity scanning hardware that is available for sale to customers.
These are valued at the lower of cost or net realisable value (net selling price less further
costs to completion), after making due allowance for obsolete and slow-moving items. Cost is
determined by the first in first out (‘FIFO’) cost method.
Financial assets
Initial recognition and measurement
Financial assets are classified at initial recognition and subsequently as measured at amortised
cost, fair value through OCI, and fair value through profit or loss.
The classification of financial assets at initial recognition depends on the financial asset’s
contractual cash flow characteristics and the Group’s business model for managing them. With
the exception of trade receivables that do not contain a significant financing component or for
which the Group has applied the practical expedient, the Group initially measures a financial
asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss,
transaction costs. Trade receivables that do not contain a significant financing component or
for which the Group has applied the practical expedient are measured at the transaction price
determined under IFRS 15.
2. Accounting policies continued
2.3 Significant accounting policies continued
Intangible assets
Goodwill
Goodwill on acquisition is initially measured at cost, being the excess of the cost of the business
combination over the Group’s interest in the net fair value of the identifiable assets, liabilities
and contingent liabilities. Following initial recognition, goodwill is measured at cost less any
accumulated impairment losses. Goodwill already carried in the balance sheet at 1 April 2004
or relating to acquisitions after that date is not amortised. Goodwill is reviewed for impairment,
annually or more frequently if events or changes in circumstances indicate that the carrying
value may be impaired.
For the purpose of impairment testing, goodwill is allocated to the CGU expected to benefit
from the synergies. Impairment is determined by assessing the recoverable amount of the
CGU, including the related goodwill. Where the recoverable amount of the CGU is less than
the carrying amount, including goodwill, an impairment loss is recognised in the consolidated
statement of profit or loss. The carrying amount of goodwill allocated to a CGU is taken into
account when determining the gain or loss on disposal of the unit, or an operation within it.
Goodwill disposed of in this circumstance is measured on the basis of the relative values of the
operation disposed of and the portion of the CGU retained.
Research and development costs
Research costs are expensed as incurred. An intangible asset arising from development
expenditure on an individual project is recognised only when the Group can demonstrate the
technical feasibility of completing the intangible asset so that it will be available for use or
sale, its intention to complete and its ability to use or sell the asset, how the asset will generate
future economic benefits, the availability of resources to complete and the availability to
measure reliably the expenditure during the development. Following the initial recognition of the
development expenditure, the cost model is applied requiring the asset to be carried at cost less
any accumulated amortisation and accumulated impairment losses. Any expenditure capitalised
is amortised on a straight-line basis over 2 to 4 years.
Acquired intangibles
Separately identifiable intangible assets such as patent fees, licence fees, trademarks, customer
lists and relationships are capitalised on the balance sheet only when the value can be measured
reliably, or the intangible asset is purchased as part of the acquisition of a business. Such
intangible assets are amortised over their useful economic lives on a straight-line basis.
Separately identified intangible assets acquired in a business combination are initially
recognised at their fair value. Intangible assets are subsequently stated at fair value or cost less
accumulated amortisation and any accumulated impairment losses.
Amortisation is recognised in the consolidated statement of profit or loss on a straight-line basis
over the estimated useful life of the asset. The carrying value of intangible assets is reviewed
for impairment if events or changes in circumstances indicate the carrying value may not be
recoverable.
Notes to the consolidated financial statements continued
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Notes to the consolidated financial statements continued
Financial assets designated at fair value through OCI (equity instruments)
Upon initial recognition, the Group can elect to classify irrevocably its equity investments as
equity instruments designated at fair value through OCI when they meet the definition of equity
under IFRS 9 ‘Financial Instruments’ and are not held for trading. The classification is determined
on an instrument-by-instrument basis.
Gains and losses on these financial assets remain permanently in equity and are not
subsequently reclassified to profit or loss. However, the cumulative gain or loss within equity
may be transferred as a reserve movement. Dividends are recognised as other income in the
statement of profit or loss when the right of payment has been established, except when the
Group benefits from such proceeds as a recovery of part of the cost of the financial asset, in
which case, such gains are recorded in OCI. Equity instruments designated at fair value through
OCI are not subject to impairment assessment.
The Group elected to classify irrevocably its non-listed equity investments under this category.
Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar
financial assets) is primarily derecognised (i.e. removed from the Group’s consolidated balance
sheet) when:
• The rights to receive cash flows from the asset have expired; or
• The Group has transferred its rights to receive cash flows from the asset or has assumed an
obligation to pay the received cash flows in full without material delay to a third-party under a
‘pass-through’ arrangement; and either (a) the Group has transferred substantially all the risks
and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all
the risks and rewards of the asset, but has transferred control of the asset
Impairment of financial assets
The Group recognises an allowance for expected credit losses (‘ECLs’) for all debt instruments
not held at fair value through profit or loss. ECLs are based on the difference between the
contractual cash flows due in accordance with the contract and all the cash flows that the
Group expects to receive, discounted at an approximation of the original effective interest rate.
The expected cash flows will include cash flows from the sale of collateral held or other credit
enhancements that are integral to the contractual terms.
ECLs are recognised in two stages. For credit exposures for which there has not been a
significant increase in credit risk since initial recognition, ECLs are provided for credit losses
that result from default events that are possible within the next 12-months (a 12-month ECL). For
those credit exposures for which there has been a significant increase in credit risk since initial
recognition, a loss allowance is required for credit losses expected over the remaining life of the
exposure, irrespective of the timing of the default (a lifetime ECL).
For trade receivables and contract assets, the Group applies a simplified approach in calculating
ECLs. Therefore, the Group does not track changes in credit risk, but instead recognises a loss
allowance based on lifetime ECLs at each reporting date. The Group has established a provision
matrix that is based on its historical credit loss experience, adjusted for forward-looking factors
specific to the debtors and the economic environment.
2. Accounting policies continued
2.3 Significant accounting policies continued
Financial assets continued
Initial recognition and measurement continued
In order for a financial asset to be classified and measured at amortised cost or fair value
through OCI, it needs to give rise to cash flows that are ‘solely payments of principal and interest
(SPPI)’ on the principal amount outstanding. This assessment is referred to as the SPPI test and
is performed at an instrument level.
The Group’s business model for managing financial assets refers to how it manages its financial
assets in order to generate cash flows. The business model determines whether cash flows will
result from collecting contractual cash flows, selling the financial assets, or both.
Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in four categories:
• Financial assets at amortised cost (debt instruments)
• Financial assets designated at fair value through OCI with no recycling of cumulative gains
and losses upon derecognition (equity instruments)
• Financial assets at fair value through OCI with recycling of cumulative gains and losses
(debt instruments)
• Financial assets at fair value through profit or loss
The Group only has financial assets falling into the first two categories above and as such has
only included the policy for these two below.
Financial assets at amortised cost (debt instruments)
This category is the most relevant to the Group. The Group measures financial assets at
amortised cost if both of the following conditions are met:
• The financial asset is held within a business model with the objective to hold financial assets
in order to collect contractual cash flows; and
• The contractual terms of the financial asset give rise on specified dates to cash flows that are
solely payments of principal and interest on the principal amount outstanding
Financial assets at amortised cost are subsequently measured using the effective interest (‘EIR’)
method and are subject to impairment. Gains and losses are recognised in profit or loss when the
asset is derecognised, modified or impaired.
The Group’s financial assets at amortised cost includes trade receivables.
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Lease liabilities
At the commencement date of the lease, the Group recognises lease liabilities measured at the
present value of lease payments to be made over the lease term. The lease payments include
fixed payments (including in-substance fixed payments) less any lease incentives receivable,
variable lease payments that depend on an index or a rate, and amounts expected to be paid
under residual value guarantees.
The lease payments also include the exercise price of a purchase option reasonably certain to
be exercised by the Group and payments of penalties for terminating a lease, if the lease term
reflects the Group exercising the option to terminate. The variable lease payments that do not
depend on an index or a rate are recognised as expense in the period on which the event or
condition that triggers the payment occurs.
In calculating the present value of lease payments, the Group uses the incremental borrowing
rate at the lease commencement date if the interest rate implicit in the lease is not readily
determinable. After the commencement date, the amount of lease liabilities is increased to
reflect the accretion of interest and reduced for the lease payments made. In addition, the
carrying amount of lease liabilities is remeasured if there is a modification, a change in the
lease term, a change in the in-substance fixed lease payments or a change in the assessment to
purchase the underlying asset.
Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to its short-term leases of
machinery and equipment (i.e. those leases that have a lease term of 12 months or less from the
commencement date and do not contain a purchase option). It also applies the lease of low-value
assets recognition exemption to leases of office equipment that are considered of low-value
(i.e. below £5,000). Lease payments on short-term leases and leases of low-value assets are
recognised as an expense on a straight-line basis over the lease term.
Judgement in determining the lease term of contracts with renewal options
The Group determines the lease term as the non-cancellable term of the lease, together with
any periods covered by an option to extend the lease if it is reasonably certain to be exercised,
or any periods covered by an option to terminate the lease, if it is reasonably certain not to
be exercised.
Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a
result of a past event, it is probable that an outflow of resources embodying economic benefits
will be required to settle the obligation and a reliable estimate can be made of the amount of the
obligation. Where the Group expects some or all of a provision to be reimbursed, for example
under an insurance contract, the reimbursement is recognised as a separate asset but only when
the reimbursement is virtually certain. The expense relating to any provision is presented in the
consolidated statement of profit or loss net of any reimbursement. If the effect of the time value
of money is material, provisions are determined by discounting the expected future cash flows
at a pre-tax rate that reflects current market assessments of the time value of money and, where
appropriate, the risks specific to the liability. Where discounting is used, the increase in the
provision due to the passage of time is recognised as a finance cost.
2. Accounting policies continued
2.3 Significant accounting policies continued
Financial assets continued
Impairment of financial assets continued
The Group recognises loss allowances for ECLs on financial assets measured at amortised cost.
Loss allowances for trade receivables are always measured at an amount equal to lifetime ECL.
ECLs are a probability-weighted estimate of credit losses. An assessment of ECL is calculated
using a provision matrix model to estimate the loss rates to be applied to each trade receivable
category. ECLs are discounted at the effective interest rate of the financial asset. Loss
allowances for financial assets measured at amortised cost are deducted from the gross carrying
amount of the assets. The gross carrying amount of a financial asset is written off (either
partially or in full) to the extent that there is no realistic prospect of recovery.
The Group considers a financial asset in default when contractual payments are 90 days
past due. However, in certain cases, the Group may also consider a financial asset to be in
default when internal or external information indicates that the Group is unlikely to receive the
outstanding contractual amounts in full before taking into account any credit enhancements
held by the Group. A financial asset is written off when there is no reasonable expectation of
recovering the contractual cash flows.
Trade and other receivables
Trade receivables, which generally have 14 to 60 day terms, are initially recognised at fair value,
and at amortised cost thereafter. This results in their recognition and subsequent measurement
at original invoice amount less an allowance for expected credit losses. The Group applies the
simplified approach which requires expected lifetime losses to be recognised from the initial
recognition of the receivables (as detailed in the impairment of financial assets section on the
previous page).
Cash and short-term deposits
Cash and short-term deposits in the balance sheet comprise cash at bank and in hand and
short-term deposits with an original maturity date of three months or less.
For the purpose of the cash flow statement, cash and cash equivalents consist of cash and cash
equivalents as defined above, net of any outstanding bank overdrafts.
Borrowings
After initial recognition, interest-bearing loans and borrowings are subsequently measured at
amortised cost using the effective interest rate (‘EIR’) method. Gains and losses are recognised
in profit or loss when the liabilities are derecognised as well as through the EIR amortisation
process.
Amortised cost is calculated by taking into account any discount or premium on acquisition and
fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance
costs in the statement of profit or loss.
Trade and other payables
Trade and other payables are initially recognised at fair value and subsequently recorded
at amortised cost using the EIR method.
Notes to the consolidated financial statements continued
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Notes to the consolidated financial statements continued
The Group’s software has no standalone value to the customer without the data as there
is nothing upon which to apply the algorithms. The data file cannot be accessed outside of
the software so has no standalone value (unless under the circumstance where it has been
subscribed for use on the customer’s system). As a result, the software and the data are
considered one performance obligation as the customer cannot benefit from one without
the other.
Customers are given a right to use the software and data as it exists at the point in time the
subscription is granted, for which revenue is recognised at the point in time the customer can
first use and benefit from it.
A proportion of the transaction price is allocated to the provision of data updates and support
and maintenance, which are considered separate performance obligations. This is either based
on the standalone selling price for those services or, where the Group does not have a history
of stand-alone selling prices for a particular software subscription, a cost-plus mark-up approach
is applied.
Data disk
The performance obligations can include the subscription to use specific data sets, updates
to those data sets during the subscription period and support and maintenance.
The performance obligations over the period of the subscription are satisfied by the provision of
disk files to the customer in the same format on a monthly basis to ensure that the customer has
access to the most relevant information throughout the contract period. This meets the series
guidance under IFRS 15 paragraph 22: ‘a promise to transfer to the customer a series of distinct
goods or services that are substantially the same and that have the same pattern of transfer’.
Accordingly, the revenue for the full subscription period is recognised over the contractual term.
b) Consumption-based
A number of GBG SaaS solutions provide for the provision of consumed data intelligence
services with customers paying only for the number of searches they perform. The performance
obligation is to provide this check and revenue in respect of those solutions is recognised based
on usage. Customers are either invoiced in arrears for searches performed (‘consumption’) or
make a prepayment giving them the right to a specific number of searches (‘consumption-based
subscription’).
Where customers make a prepayment, which entitles them to perform a specific number
of transactions over an agreed contract period, once this period has expired any unused
transactions are forfeited. Based on a review of historic forfeitures an estimate is made of the
expected percentage of transactions that will remain unused over their contracted life. This
percentage is applied such that revenue for expected forfeiture is recognised in proportion
to the pattern of transactions performed by the customer.
2. Accounting policies continued
2.3 Significant accounting policies continued
Dilapidation provisions
A dilapidation provision is recognised when there is an obligation to restore property to its
original state at the end of the leasehold period. The provision is estimated as the cost of
restoration at the balance sheet date, with the corresponding entry recognised in property plant
and equipment. Depreciation is charged in line with the remaining leasehold period.
Pensions
The Group does not have a group contributory pension scheme. Payments are made to
individual private defined contribution pension arrangements. Contributions are charged in the
consolidated statement of profit or loss as they become payable.
Revenue recognition
Revenue is stated net of value-added tax, rebates and discounts and after the elimination
of intercompany transactions within the Group. The Group operates a number of different
businesses offering a range of products and services and accordingly applies a variety of
methods for revenue recognition, based on the principles set out in IFRS 15.
Revenue is recognised to represent the transfer of promised services to customers in a way that
reflects the consideration expected to be received in return. Consideration from contracts with
customers is allocated to performance obligations identified based on their standalone selling
price and is recognised when those performance obligations are satisfied and the control of
goods or services is transferred to the customer, either over time or at a point in time.
In determining the amount of revenue and profits to record, and related balance sheet items
(such as contract assets, contract liabilities, accrued income and deferred income) to recognise
in the period, management are required to form a number of judgements and assumptions. These
may include an assessment of the costs the Group incurs to deliver the contractual commitments
and whether such costs should be expensed as incurred or capitalised. These judgements
are inherently subjective and may cover future events such as the achievement of contractual
milestones. Please see Judgements – Revenue recognition on page 107 for further detail.
a) Term-based subscriptions
Revenue from term-based subscriptions is recognised when control is considered to have
passed to the customer. Control can pass either at a point in time or over time depending on the
performance obligations under the contract as further described below.
Web-service hosted software solutions
The performance obligation is to provide the customer a right to access the software throughout
the subscription period for which revenue is recognised over the subscription period.
On-premise installation
The performance obligations can include the provision of a software subscription, data sets,
updates to those data sets during the subscription period and support and maintenance. There
also are instances where customers are provided a data set to use with their own software rather
than the Group’s.
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f) Principal versus agent
The Group has arrangements with some of its customers whereby it needs to determine if it acts
as a principal or an agent as more than one party is involved in providing the goods and services
to the customer.
The Group is an agent if its role is to arrange for another entity to provide the goods or services.
Factors considered in making this assessment are most notably the discretion the Group has in
establishing the price for the specified good or service, whether the Group has inventory risk
and whether the Group bears the responsibility for fulfilling the promise to deliver the service or
good. Where the Group is acting as an agent revenue is recorded at a net amount reflecting the
margin earned.
The Group acts as a principal if it controls a promised good or service before transferring that
good or service to the customer. Where the Group is acting as a principal, revenue is recorded on
a gross basis.
This assessment of control requires some judgement in particular in relation to certain service
contracts. An example is the provision of certain employment screening services where the
Group may be assessed to be agent or principal dependent upon the facts and circumstances of
the arrangement and the nature of the services being delivered.
g) Contract modifications
Although infrequent, contracts may be modified for changes in contract terms or requirements.
These modifications and amendments to contracts are always undertaken via an agreed formal
process. Contract modifications exist when the amendment either creates new or changes
the existing enforceable rights and obligations. The effect of a contract modification on the
transaction price and the Group’s measure of progress for the performance obligation to which
it relates, is recognised as an adjustment to revenue in one of the following ways:
a) Prospectively as an additional separate contract
b) Prospectively as a termination of the existing contract and creation of a new contract
c) As part of the original contract using a cumulative catch up
d) As a combination of b) and c)
For contracts for which the Group has decided there is a series of distinct goods and services
that are substantially the same and have the same pattern of transfer where revenue is
recognised over time, the modification will always be treated under either a) or b). However,
d) may arise when a contract has a part termination and a modification of the remaining
performance obligations.
The facts and circumstances of any contract modification are considered individually as the
types of modifications will vary contract by contract and may result in different accounting
outcomes.
h) Interest income
Revenue is recognised as interest accrues using the effective interest rate method. The effective
interest rate is the rate that exactly discounts estimated future cash receipts through the
expected life of the financial instrument to its net carrying amount.
2. Accounting policies continued
2.3 Significant accounting policies continued
Revenue recognition continued
c) Other
Revenue from other revenue such as development charges, set up, hardware, support and
maintenance fees are recognised over time by reference to the stage of completion. Whereas,
hardware is recognised at a point in time on delivery. Stage of completion of the specific
transaction is assessed on the basis of the actual services provided as a proportion of the total
services to be provided. Where the services consist of the delivery of support and maintenance
on software licence agreements, it is generally considered to be a separate performance
obligation and revenue is recognised on a straight-line basis over the term of the support period.
d) Perpetual licences
Revenue is recognised at a point in time when the contract is agreed, and the software is made
available to the customer. Customers are charged an initial or perpetual licence fee for on-
premise or hosted software which is usually limited by a set number of users or seats. Initial and
perpetual licences provide the customer with the right to use the software and are distinct from
other services.
e) Contract assets and contract liabilities
Costs to obtain a contract in the Group typically include sales commissions and under IFRS 15
certain costs such as these are deferred as contract assets and are amortised on a systematic
basis consistent with the pattern of transfer of the goods or services to which the asset relates.
As a practical expedient, these costs are expensed if the amortisation period to which they relate
is one year or less.
Where the Group completes performance obligations under a contract with a customer in
advance of invoicing the customer, the value of the accrued revenue is initially recognised as
a contract asset. As a practical expedient, the Group has taken advantage of the practical
exemption not to account for significant financing components where the time difference
between receiving consideration and transferring control of goods (or services) to its customer is
one year or less.
Any contract assets are disclosed within the trade and other receivables in the consolidated
balance sheet.
Where the Group receives a short-term prepayment or advance of consideration prior to
completion of performance obligations under a contract with a customer, the value of the
advance consideration received is initially recognised as a contract liability in liabilities. Revenue
is subsequently recognised as the performance obligations are completed over the period of the
contract (i.e. as control is passed to the customer). Contract liabilities are presented in deferred
income within trade and other payables in the consolidated balance sheet.
Notes to the consolidated financial statements continued
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Notes to the consolidated financial statements continued
Exceptional items
The Group presents as exceptional items those significant items of income and expense which,
because of the nature and expected infrequency of the events giving rise to them, merit separate
presentation to allow shareholders to understand better the elements of financial performance
in the year, so as to facilitate comparison with prior periods and to assess better trends in
financial performance. Such items may include, but are not restricted to, significant acquisition,
restructuring and integration-related costs, adjustments to contingent consideration, profits or
losses on disposal of businesses and significant impairment of assets. Exceptional costs are
discussed further in note 7.
Redundancy costs are only classified within exceptional items if they are linked to a
reorganisation of part of the business, including when as a result of a business integration.
Management consider these significant and/or non-recurring items to be inherently not reflective
of the future or underlying performance of the Group.
Dividends
Dividend distribution to the Company’s shareholders is recognised as a liability in the Group’s
financial statements in the period in which the dividends are approved by the Company’s
shareholders.
Share-based payment transactions
Employees (including Directors) of the Group receive remuneration in the form of share-based
payment transactions, whereby employees render services in exchange for shares or rights over
shares (‘equity-settled transactions’).
Equity-settled transactions
The cost of equity-settled transactions with employees is measured by reference to the fair
value at the date on which they are granted. The fair value is determined by an external valuation
specialist using a binomial model. In valuing equity-settled transactions, no account is taken of
any performance conditions, other than conditions linked to the price of the shares of GB Group
plc (‘market conditions’) and non-vesting conditions, if applicable.
The cost of equity-settled transactions is recognised, together with a corresponding increase in
equity, over the period in which the performance and/or service conditions are fulfilled, ending
on the date on which the relevant employees become fully entitled to the award (‘the vesting
date’). The cumulative expense recognised for equity-settled transactions at each reporting date
until the vesting date reflects the extent to which the vesting period has expired and the Group’s
best estimate of the number of equity instruments that will ultimately vest. The consolidated
statement of profit or loss charge or credit for a period represents the movement in cumulative
expense recognised as at the beginning and end of that period.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting
is conditional upon a market or non-vesting condition, which are treated as vesting irrespective
of whether or not the market or non-vesting conditions were satisfied, provided that all other
vesting conditions are satisfied.
2. Accounting policies continued
2.3 Significant accounting policies continued
Revenue recognition continued
i) Presentation and disclosure requirements
The Group has disaggregated revenue recognised from contracts into contract type (Term-based
subscription, Consumption-based subscription, Consumption and Other) as management believe
this best depicts how the nature, amount, timing and uncertainty of the Group’s revenue and
cash flows are affected by economic factors. The Group has also disclosed information about the
relationship between the disclosure of disaggregated revenue and revenue information disclosed
for each reportable segment. Refer to note 4 for the disclosure on disaggregated revenue.
Operating profit
Operating profit is profits after amortisation of acquired intangibles, equity-settled share-based
payments and exceptional items but before finance income, finance costs and tax.
Non-GAAP measures
The Group presents multiple non-GAAP measures throughout this Annual Report. They are not
defined by IFRSs and therefore may not be directly comparable with similarly titled measures of
other companies. They are not intended to be a substitute for, or superior to, GAAP measures.
Additional information for all non-GAAP measures, including definitions, rationale for their
presentation, and reconciliations from the closest IFRS measure is provided in the Non-GAAP
measures section on pages 149 to 152.
The main non-GAAP presentation is adjusted results.
Adjusted results
The business is managed and measured on a day-to-day basis using adjusted results. To arrive
at adjusted results, certain adjustments are made for normalised and exceptional items that
are individually significant and which could, if included, not be reflective of the underlying
performance of the Group for the year and the comparability between periods.
The Group presents the non-GAAP performance measure ‘adjusted operating profit’ on the
face of the consolidated statement of profit or loss and this is reconciled to Operating Profit
as required to be presented under the applicable accounting standards. The Directors believe
that this alternative measure of profit provides a reliable and consistent measure of the Group’s
underlying performance.
Normalised items
These are recurring items which management considers could affect on the underlying results
of the Group. These items relate to:
• amortisation of acquired intangibles; and
• equity-settled share-based payments charges.
Other types of recurring items may arise; however, no others were identified in either the current
or prior year. Recurring items are adjusted each year irrespective of materiality to ensure
consistent treatment.
Management consider these items to not reflect the underlying performance of the Group.
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• Deferred tax assets are reviewed at each reporting date and are recognised only to the extent
that the Directors consider that it is probable that there will be suitable taxable profits from
which the future reversal of the underlying temporary differences and unused tax losses and
credits can be deducted. In assessing their recoverability, the Group uses the same forecasts
that have been used for the impairment and going concern assessments
• Deferred tax is measured on an undiscounted basis at the tax rates that are expected to apply
in the periods in which the asset is realised or liability settled, based on tax rates and laws
enacted or substantively enacted at the balance sheet date
• Deferred tax assets and liabilities are offset where there is a legally enforceable right to offset
and where they relate to the same tax authority
New accounting standards and interpretations
The following standards and amendments were effective for periods beginning on or after
1 January 2023 and as such have been applied in these financial statements. The Group has not
early adopted any other standard or interpretation that is issued but not yet effective.
The following standards and amendments had no material impact on the financial statements of
the Group:
• IFRS 17 – Insurance Contracts;
• Disclosure of Accounting Policies (Amendments to IAS 1 Presentation of Financial Statements
and IFRS Practice Statement 2 Making Materiality Judgements);
• Definition of Accounting Estimates (Amendments to IAS 8 Accounting Policies, Changes in
Accounting Estimates and Errors);
• Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments
to IAS 12 Income Taxes); and
• International Tax Reform – Pillar Two Model Rules (Amendment to IAS 12 Income Taxes)
(effective immediately upon the issue of the amendments and retrospectively)
New accounting standards and interpretations issued but not yet effective
The new and amended standards and interpretations that are issued, but not yet effective,
up to the date of issuance of the Group’s financial statements are disclosed below. The Group
intends to adopt these new and amended standards and interpretations, if applicable, when they
become effective.
• Liability in a Sale and Leaseback (Amendments to IFRS 16 – Leases) – effective for annual
reporting periods beginning on or after 1 January 2024;
• Classification of Liabilities as Current or Non-Current (Amendments to IAS 1 Presentation
of Financial Statements);
• Non-current Liabilities with Covenants (Amendments to IAS 1 Presentation of Financial
Statements – effective for annual reporting periods beginning on or after 1 January 2024); and
• Supplier Finance Arrangements (Amendments to IAS 7 Statement of Cash Flows and IFRS 7 –
Financial Instruments: Disclosures) – effective for annual reporting periods beginning on
or after 1 January 2024
2. Accounting policies continued
2.3 Significant accounting policies continued
Equity-settled transactions continued
Where the terms of an equity-settled award are modified, as a minimum, an expense is
recognised as if the terms had not been modified. In addition, an expense is recognised over the
remainder of the new vesting period for any modification which increases the total fair value of
the share-based payment arrangement, or is otherwise beneficial to the employee as measured
at the date of modification.
Where an equity-settled award is cancelled, it is treated as if it had vested on the date of
cancellation, and any expense not yet recognised for the award is recognised immediately.
However, if a new award is substituted for the cancelled award, and designated as a replacement
award on the date that it was granted, the cancelled and new awards are treated as if they were
a modification of the original award, as described in the previous paragraph.
The dilutive effect of outstanding options is reflected in the computation of earnings per share
(note 13).
Finance costs
Finance costs consist of interest and other costs that are incurred in connection with the
borrowing of funds. Finance costs are expensed in the period in which they are incurred.
Finance costs also include the amortisation of bank loan arrangement fees, interest on long-
service award liabilities and interest on lease liabilities.
Taxes
Current tax
Current income tax assets and liabilities for the current and prior periods are measured at the
amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax
laws used to compute the amount are those that are enacted or substantively enacted, by the
reporting date, in the countries where the Group operates and generates taxable income.
Deferred income tax
Deferred tax is recognised in respect of all temporary differences between the carrying amounts
of assets and liabilities included in the financial statements and the amounts used for tax
purposes that will result in an obligation to pay more, or a right to pay less or to receive more tax,
with the following exceptions:
• No provision is made where the deferred tax liability arises from the initial recognition of
goodwill or of an asset or liability in a transaction which is not a business combination that at
the time of the transaction affect neither accounting nor taxable profit
• No provision is made for deferred tax that would arise on all taxable temporary differences
associated with investments in subsidiaries and interests in joint ventures, where the timing of
the reversal of temporary differences can be controlled and it is probable that the temporary
difference will not reverse in the foreseeable future
Notes to the consolidated financial statements continued
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Annual Report 2024
105
Notes to the consolidated financial statements continued
Allowance for impairment losses on credit exposures
The Group applies the IFRS 9 simplified lifetime expected credit loss approach in calculating
expected credit losses (ECL). Under this method ECL provisions are determined using a
combination of historical experience and forward-looking information based on management
judgement. In the year to 31 March 2024, management has reviewed the historical rate of bad
debts compared to revenue, in the context of the expected credit loss provision against trade
receivables. As a result of this assessment, and whilst still taking into account forward-looking
information in light of the current macroeconomic environment, management has determined it
appropriate to maintain the loss rates applied to each aged category of trade receivables.
An increase/decrease of 1% in all ECL rates would increase/decrease the provision for
impairment of trade receivables by £572,000.
Judgements
Revenue recognition
For contracts with multiple components to be delivered, management may have to apply
judgement to consider whether those promised goods and services are (i) distinct – to be
accounted for as separate performance obligations; (ii) not distinct – to be combined with other
promised goods or services until a bundle is identified that is distinct or (iii) part of a series of
distinct goods and services that are substantially the same and have the same pattern of transfer
to the customer.
At contract inception the total transaction price is determined, and the Group allocates this to
the identified performance obligations in proportion to their relative standalone selling prices
and recognises revenue when (or as) those performance obligations are satisfied. Because of the
bespoke nature of some solutions, judgement is sometimes required to determine and estimate
an appropriate standalone selling price.
Hyperinflationary economies
The Türkiye economy was designated as hyperinflationary for reporting periods ending on or
after 30 June 2022. Judgement was required in determining that the application of IAS 29
‘Financial Reporting in Hyperinflationary Economies’ to the Group’s Türkiye subsidiary, which
has a functional currency of Türkiye Lira, did not have a material impact on the consolidated
financial statements. As a result, the adjustments required by IAS 29 from 1 April 2022 have not
been reflected within the consolidated financial statements.
2. Accounting policies continued
2.3 Significant accounting policies continued
New accounting standards and interpretations issued but not yet effective continued
None of the amendments are expected to have a significant impact to the Group, however the
Group will continue to consider these and any additional amendments, interpretations and new
standards to identify the potential future impact.
2.4 Judgements and key sources of estimation uncertainty
The preparation of financial statements requires management to make judgements, estimates
and assumptions that affect the amounts reported for assets and liabilities as at the balance
sheet date and the amounts reported for revenues and expenses during the year. However, the
nature of estimation means that actual outcomes could differ from those estimates.
In the process of applying the Group’s accounting policies the following estimates and
judgements made by management have the most significant effect on the amounts recognised
in the financial statements within the next financial year:
Significant estimates
Impairment of goodwill
The Group and Company test annually whether goodwill has suffered any impairment in
accordance with the accounting policy stated earlier in note 2.3. Determining whether goodwill
is impaired requires an estimation of the value-in-use and/or the estimated recoverable amount
of the asset derived from the business, or part of the business, CGU, to which the goodwill has
been allocated. The value-in-use calculation requires an estimate of the present value of future
cash flows expected to arise from the CGU, by applying an appropriate discount rate to the
timing and amount of future cash flows.
Management are required to make judgements regarding the timing and amount of future cash
flows applicable to the CGU, based on current budgets and forecasts, and extrapolated for an
appropriate period taking into account growth rates. In making these estimates management
have assessed the sensitivity of the assets to a wider range of changes in the key inputs to
consider if an impairment would arise within these ranges.
Management estimate the appropriate discount rate using pre-tax rates that reflect current
market assessments of the time value of money and the risks specific to the business or the
individual CGU.
The significant estimates made in the value-in-use calculations of CGU recoverable amount are
the: forecast revenue growth rates, discount rates and long-term growth rates.
An analysis of the Group goodwill, the assumptions used to test for impairment and sensitivity
analysis relating to these significant estimates are set out in note 16.
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Annual Report 2024
106
3. Revenue
Revenue disclosed in the consolidated statement of profit or loss is analysed as follows:
2024
£’000
2023
£’000
Subscription revenues:
Consumption-based
46,440
45,427
Term-based
112,995
112,034
Total subscription revenues
159,435
157,461
Consumption
103,433
103,834
Hardware
7,825
8,860
Other
6,632
8,655
Revenue
277,325
278,810
Changes in contract balances
Included within revenue recognised in the year is £54,539,000 (2023 (restated): £58,435,000)
that was included in the deferred revenue balance at the start of the relevant financial year. This
amount differs from the deferred revenue balance within current liabilities at the end of the prior
year due to the movement in foreign currency exchange rates between the prior year end and
the date the revenue was recognised in the consolidated statement of profit or loss during the
current year.
The prior year has been restated to correct an administrative error in the calculation and reduced
the disclosure by £1,821,000 This restatement does not have an impact on the Group’s profit, net
assets or cash flows reported in the 2023 Annual Report and Accounts.
2. Accounting policies continued
2.4 Judgements and key sources of estimation uncertainty continued
Judgements continued
Deferred tax assets (both judgement and estimate)
The amount of the deferred tax asset included in the balance sheet is firstly assessed against
the value of deferred tax liabilities to see if the deferred tax asset can be fully or partly absorbed
by an offsetting deferred tax liability. The level of deferred tax asset not offset by deferred
tax liabilities is recognised only to the extent that it is probable that future taxable profits will
be available against which the asset can be utilised. In this scenario, a deferred tax asset is
recognised when it has become probable that future taxable profit will allow the deferred tax
asset to be recovered. Recognition, therefore, involves management judgement regarding the
prudent forecasting of future taxable profits of the business including considering appropriate
levels of risk. At the balance sheet date, management has forecast that the Group would
generate future taxable profits against which certain decelerated capital allowances, tax losses
and other temporary differences could be relieved. Within that forecast, management considered
the total amount of tax losses available across the Group and the relative restrictions in place
for loss streaming and made a judgement not to recognise deferred tax assets on temporary
differences of £15,634,000 (2023: £15,880,000). The carrying value of the recognised deferred
tax asset at 31 March 2024 was £20,871,000 (2023: £23,738,000) and the unrecognised
deferred tax asset at 31 March 2024 was £4,779,000 (2023: £4,859,000). Further details are
contained in note 11.
Notes to the consolidated financial statements continued
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Annual Report 2024
107
Notes to the consolidated financial statements continued
Year ended 31 March 2023
Location
£’000
Identity
£’000
Fraud
£’000
Total
£’000
Subscription revenues:
Consumption-based
16,809
27,427
1,191
45,427
Term-based
53,522
27,586
30,926
112,034
Total subscription revenues
70,331
55,013
32,117
157,461
Consumption
5,917
96,269
1,648
103,834
Hardware
–
8,860
–
8,860
Other
642
2,587
5,426
8,655
Total revenue
76,890
162,729
39,191
278,810
Contribution
29,897
47,623
10,259
87,779
Central overheads
(31,198)
Foreign exchange gain
3,022
Expected credit losses of trade receivables
214
Adjusted operating profit
59,817
Amortisation of acquired intangibles
(42,758)
Share-based payments charge
(2,313)
Exceptional items
(127,175)
Operating loss
(112,429)
Finance income
636
Finance costs
(7,037)
Income tax expense
(964)
Loss for the year
(119,794)
Geographical information
Revenues from
external customers
Non-current assets
2024
£’000
2023
£’000
2024
£’000
2023
£’000
United Kingdom
83,043
81,561
105,910
112,753
United States of
America
92,891
106,683
600,130
699,925
Australia
38,588
35,799
47,499
51,046
Others
62,803
54,767
11
36
277,325
278,810
753,550
863,760
The geographical revenue information above is based on the location of the customer.
Non-current assets for this purpose consist of plant and equipment, intangible assets and non-
current trade and other receivables and excludes deferred tax assets.
4. Segmental information
The Group’s operating segments are aggregated and internally reported to the Group’s Chief
Executive Officer as three reportable segments: Location, Identity and Fraud on the basis that
they provide similar products and services.
‘Central overheads’ represents Group operating costs such as technology, compliance, finance,
legal, people team, information security, premises, Directors’ remuneration and PLC costs.
The measure of performance of those segments that is reported to the Group’s Chief Executive
Officer is adjusted operating profit, being profits before amortisation of acquired intangibles,
equity-settled share-based payments, exceptional items, net finance costs and tax, as shown
below.
Information on segment assets and liabilities is not regularly provided to the Group’s Chief
Executive Officer and is therefore not disclosed below.
Year ended 31 March 2024
Location
£’000
Identity
£’000
Fraud
£’000
Total
£’000
Subscription revenues:
Consumption-based
17,437
26,827
2,176
46,440
Term-based
55,444
24,945
32,606
112,995
Total subscription revenues
72,881
51,772
34,782
159,435
Consumption
7,203
94,533
1,697
103,433
Hardware
–
7,825
–
7,825
Other
982
1,931
3,719
6,632
Total revenue
81,066
156,061
40,198
277,325
Contribution
32,384
42,704
14,812
89,900
Central overheads
(27,766)
Foreign exchange loss
(162)
Expected credit losses of trade receivables
(775)
Adjusted operating profit
61,197
Amortisation of acquired intangibles
(39,447)
Share-based payments charge
(3,488)
Exceptional items
(59,613)
Operating loss
(41,351)
Finance income
262
Finance costs
(9,297)
Income tax credit
1,803
Loss for the year
(48,583)
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Financial Statements
Annual Report 2024
108
7. Exceptional items
2024
£’000
2023
£’000
(a) Integration costs
729
686
(b) Costs associated with team member reorganisations
4,018
1,813
(c) Rationalisation of office locations
159
391
(d) Impairment of goodwill (note 14 & 16)
54,707
122,225
(e) Impairment of intangibles (note 15)
–
2,797
(f) Acquisition-related costs/(income)
–
(1,087)
(g) Loss on disposal of businesses
–
113
(h) Write-off of cloud-based software
–
237
Total exceptional costs
59,613
127,175
(a) Integration costs have been incurred in relation to the integration of the Acuant and
Cloudcheck acquisitions. This principally relates to consultancy fees paid to advisors in
running programmes to deliver revenue and cost synergies from the acquisitions, travel for
specific integration meetings, costs relating to the alignment of global systems and business
operations, the costs of additional other temporary resources required for the integration
and claims associated with the pre acquisition period. To 31 March 2024, the Group
expensed £729,000 (2023: £686,000) relating to the integration of Acuant and Cloudcheck.
Integration activities have ended during the year ended 31 March 2024. Due to the size and
nature of acquisition and integration costs, management consider that they do not reflect the
Group’s trading performance and so are adjusted to ensure consistency between periods.
(b) Costs associated with team member reorganisations relate to exit costs of personnel leaving
the business on an involuntary basis, either as a result of integrating acquisitions or due to
reorganisations within our operating divisions as part of a Group-wide restructuring exercise.
Due to the nature of these costs, management deem them to be exceptional in order to
better reflect our underlying performance. Exit costs outside of these circumstances are
treated as an operating expense.
(c) During the year to 31 March 2023, a project was started to rationalise the Group’s office
locations. In the year to 31 March 2024, the Group expensed £159,000 (2023: £391,000)
with £254,000 relating to the costs associated with exiting leased buildings and £95,000
credit relating to a gain on disposal from the sale of an owned property. Due to the nature
of these costs, management deem them to be exceptional in order to better reflect our
underlying performance. This rationalisation project was finalised at the end of FY24.
(d) As part of the Group’s annual impairment testing in the prior year, it was identified that the
goodwill allocated to the Identity – Americas group of CGUs was impaired and an impairment
charge of £122,225,000 was recognised in the year to 31 March 2023. Due to increases
in discount rates during the year to 31 March 2024, an additional impairment charge of
£54,707,000 was recognised during the year.
5. Operating loss
This is stated after charging/(crediting):
2024
£’000
2023
£’000
Research and development costs recognised
as an operating expense
15,683
20,176
Other technology-related costs recognised
as an operating expense
30,802
33,817
Total Technology-related costs recognised
as an operating expense
46,485
53,993
Amortisation of intangible assets (note 15)
39,612
42,826
Depreciation of property, plant and equipment (note 17)
1,295
1,771
Depreciation of right-of-use assets (note 18)
1,155
1,491
Expense relating to short-term leases
527
869
Expense relating to low-value leases
5
7
Loss/(profit) on disposal of plant and equipment
8
(60)
The above expenses are recognised in the operating expenses line in the consolidated statement
of profit or loss.
During the year ended 31 March 2024, depreciation of £11,000 was included in exceptional items
since it related to the period between a property being vacated and ultimately disposed.
6. Auditors’ remuneration
2024
£’000
2023
£’000
Audit of the Group’s financial statements
555
562
Audit of subsidiaries
245
294
Total audit fees
800
856
Other fees to auditors – other assurance services
130
229
930
1,085
Notes to the consolidated financial statements continued
Strategic Report
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Financial Statements
Annual Report 2024
109
Notes to the consolidated financial statements continued
8. Team member costs and Directors’ emoluments
a) Team member costs (including Directors)
2024
£’000
2023
£’000
Wages and salaries including commission and bonuses
94,003
98,819
Social security costs
9,343
8,530
Other pension costs
4,162
4,638
Share-based payments
3,488
2,313
110,996
114,300
The average monthly number of team members during the year within each category was as follows:
2024
No.
2023
No.
Sales and marketing
595
639
Technology
413
452
General and administration
176
189
1,184
1,280
b) Directors’ Emoluments
2024
£’000
2023
£’000
Wages and salaries
1,826
1,828
Pension
4
–
Bonuses
781
–
Compensation for loss of office
143
–
2,754
1,828
Aggregate gains made by Directors
on the exercise of share options
100
795
The remuneration for the highest paid Director was as follows:
2024
£’000
2023
£’000
Wages and salaries
637
637
Pension
–
–
Bonus
389
–
1,026
637
The highest paid Director has reached the maximum level permitted for a personal pension plan
and received a direct payment in lieu of his pension entitlement, which was £92,665 (2023:
£92,665). The number of share options granted during the year for the highest paid Director
was 390,421 (2023: 225,120) and the number of share options exercised during the year was nil
(2023: 185,748). The gain on the exercise of share options during the year for the highest paid
Director was £nil (2023: £428,437).
7. Exceptional items continued
(e) During the year to 31 March 2023, as part of the continued integration of Acuant and
simplification of our brands in the Americas region, Acuant was rebranded as IDology. As a
result, the value of the Acuant brand included within acquired intangibles was considered to
be £nil and an impairment charge of £2,797,000 was recognised.
(f) Acquisition-related costs of £nil (2023: £1,087,000 credit). During the year to 31 March
2023, acquisition-related costs included:
• Foreign exchange movement on contingent consideration (see note 34). The contingent
consideration liabilities related to IDology and Cloudcheck are based on the US Dollar and
New Zealand dollar respectively. As a result, the liabilities were retranslated at the balance
sheet date with a loss of £379,000 being treated as an exceptional item.
• Legal and professional advisor costs directly attributable to the acquisition of Acuant and
the possible offer by GTCR to acquire GBG of £573,000.
• A fair value reassessment was made to the Cloudcheck contingent consideration liability.
Based on actual performance in the period following acquisition, it was determined that the
performance criteria would not be met in full and a credit of £2,753,000 was taken within
exceptional items. The contingent consideration in respect of pre-acquisition tax losses
within IDology Inc was also settled during the year, with an additional charge of £806,000
being recognised in exceptional items. £92,000 was also received from the IDology escrow
administrator to reimburse pre-acquisition liabilities paid to the seller.
(g) During the year to 31 March 2021, the business disposed of its Marketing Services and
Employ and Comply businesses which resulted in an overall profit on disposal. In the year to
31 March 2023, additional costs of £113,000 were incurred in relation to the finalisation of
the disposal of these businesses.
(h) During the year to 31 March 2023, a write-off of cloud-based software of £237,000 has
been recognised. A final agenda decision by the IFRS Interpretations Committee clarified
that configuration or customisation costs from cloud computing arrangements do not usually
meet the definition of intangible assets under IAS 38 Intangible Assets’ and therefore should
not be capitalised. As a result, previously capitalised costs that did not satisfy the clarified
recognition criteria were written off.
The total cash net outflow during the year as a result of exceptional items was £4,124,000 (2023:
£3,934,000 outflow). The tax impact of the exceptional items was a tax credit of £1,158,000
(2023: tax credit of £917,000).
Strategic Report
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Annual Report 2024
110
9. Finance income
2024
£’000
2023
£’000
Bank interest receivable
73
16
Interest income on multi-year contracts
180
53
Tax interest receivable
9
567
262
636
10. Finance costs
2024
£’000
2023
£’000
Bank interest payable
8,712
6,413
Interest on long-service award
21
9
Amortisation of bank loan fees
341
326
Other interest payable
133
14
Unwinding of discount on contingent consideration liability
20
165
Lease liability interest
70
110
9,297
7,037
11. Income tax (credit)/charge
a) Tax on loss
The tax (credit)/charge in the consolidated statement of profit or loss for the year is as
follows:
2024
£’000
2023
£’000
Current income tax
UK corporation tax on loss for the year
4,590
4,485
Amounts underprovided in previous years
229
637
Foreign tax
3,985
7,754
8,804
12,876
Deferred tax
Origination and reversal of temporary differences
(8,054)
(12,539)
Amounts overprovided in previous years
(209)
(225)
Impact of change in tax rates
(2,344)
852
(10,607)
(11,912)
Tax (credit)/charge in the consolidated statement of
profit or loss
(1,803)
964
b) Reconciliation of the total tax (credit)/charge
The loss before tax multiplied by the standard rate of corporation tax in the UK would result in a
tax charge as explained below:
2024
£’000
2023
£’000
Consolidated loss before tax
(50,386)
(118,830)
Consolidated loss before tax multiplied by the standard rate
of corporation tax in the UK of 25% (2023: 19%)
(12,596)
(22,578)
Effect of:
Permanent differences1
16,886
31,813
Non-taxable income
(1,988)
(809)
Rate changes
(2,344)
775
Recognition of previously unrecognised deferred tax assets
(204)
(266)
Tax provision recognised
–
392
Adjustments in respect of prior years
20
411
Research and development incentives
(417)
(123)
Patent Box relief
(752)
(509)
Share option relief
488
518
Effect of higher taxes on overseas earnings
(896)
(8,660)
Total tax (credit)/charge reported in the
consolidated statement of profit or loss
(1,803)
964
1. £13,340,000 (2023: £30,556,000) of the permanent differences related to the impairment of goodwill which is not tax
deductible.
The Group’s reported effective tax rate for the year was 3.6% (2023: (0.8)%). After adjusting
for the impact of amortisation of acquired intangibles, equity-settled share-based payments and
exceptional items, the adjusted effective tax rate was 25.2% (2023: 21.3%). These measures
are defined in the non-GAAP measures note.
Notes to the consolidated financial statements continued
Strategic Report
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Financial Statements
Annual Report 2024
111
Notes to the consolidated financial statements continued
11. Income tax (credit)/charge continued
c) Deferred tax
Deferred tax asset
The recognised and unrecognised potential deferred tax asset of the Group is as follows:
Recognised
Unrecognised
2024
£’000
2023
£’000
2024
£’000
2023
£’000
Decelerated capital allowances
7,022
7,657
1,327
1,327
Share options
3,731
1,076
–
–
Long service award
86
292
–
–
Accrued bonuses
329
170
–
–
Provision for bad debt
138
291
–
–
Interest
2,984
4,448
–
–
Other temporary differences
832
2,814
–
–
R&D capitalisation
3,428
893
–
–
Leases
16
221
–
–
Capital losses
–
–
769
889
Trading losses
2,305
5,876
2,683
2,643
20,871
23,738
4,779
4,859
The movement on the deferred tax asset of the Group, before the offset of balances within
countries, is as follows:
2024
£’000
2023
£’000
Opening balance
23,738
21,860
Foreign currency adjustments
(470)
931
Impact of change in tax rates
(1,054)
179
Origination and reversal of temporary differences -
(charged)/credited to consolidated statement of profit or
loss
(1,447)
911
Origination and reversal of temporary differences - credited/
(charged) to equity
104
(143)
20,871
23,738
The deferred tax asset has been recognised to the extent it is anticipated to be recoverable out
of future taxable profits based on profit forecasts for the foreseeable future. The utilisation of
the unrecognised deferred tax asset in future periods will reduce the future tax rate below the
standard rate. The Group has unrecognised deductible temporary differences of £15,634,000
(2023: £15,880,000) and unrecognised capital losses of £3,779,000 (2023: £3,804,000). Refer
to 11d below for details of movement in the year.
Deferred tax liability
The deferred tax liability of the Group is as follows:
2024
£’000
2023
£’000
Intangible assets
43,082
57,643
Land and buildings
136
157
Leases
16
140
Accelerated capital allowances
519
(9)
43,753
57,931
The movement on the deferred tax liability of the Group, before the offset of balances within
countries, is as follows:
2024
£’000
2023
£’000
Opening balance
57,931
64,839
Foreign currency adjustments
(1,070)
3,768
Impact of change in tax rates
(3,398)
1,031
Origination and reversal of temporary differences - credited
to consolidated statement of profit or loss
(9,710)
(11,707)
43,753
57,931
Analysed in the balance sheet, after offset of balances as:
2024
£’000
2023
£’000
Deferred tax asset
Pre-offset of balances
20,871
23,738
Offset of balances within countries
(19,934)
(22,945)
937
793
2024
£’000
2023
£’000
Deferred tax liability
Pre-offset of balances
43,753
57,931
Offset of balances within countries
(19,934)
(22,945)
23,819
34,986
Strategic Report
Governance
Financial Statements
Annual Report 2024
112
11. Income tax (credit)/charge continued
d) Tax losses
The Group has carried forward trading losses at 31 March 2024 of £35,758,000 (2023
(restated): £50,993,000). The principal reason for the reduction in the year is the utilisation of
Federal losses made in the United States.
The prior year has been restated since gross tax losses of £4,744,000 in relation to Acuant UK
Limited should not have been included following the hive-up and liquidation of this entity during
FY23. This restatement purely relates to this disclosure, and does not have an impact on the
Group’s profit, net assets or cash flows reported in the 2023 Annual Report and Accounts.
The split of gross tax losses is shown below:
2024
£’000
2023
£’000
Gross tax losses
US – Federal
2,351
19,408
US – State
20,388
18,447
UK
12,521
13,107
Other
498
31
35,758
50,993
Taking into account state rates and apportionment factors, the value of the deferred tax asset
recognised for US State losses is £1,173,000 (2023: £1,154,000). State tax losses can usually be
carried forward indefinitely, or for a period of 20 years.
To the extent that these unrecognised losses are available for offset against future trading
profits of the Group, it is expected that the future effective tax rate would be below the
standard rate.
There were also capital losses carried forward at 31 March 2024 of £3,779,000 (2023:
£3,804,000), which should be available for offset against future capital gains of the Group to
the extent that they arise. The Group also has unrecognised deductible temporary differences of
£15,634,000 (2023: £15,880,000).
e) Change in United States deferred tax rates
The tax rate applied in the calculation of deferred tax assets and liabilities in the United States
has been updated to reflect changes in the States in which future taxable profits are forecast
to arise, which impacts the blended effective State tax rate that will apply.
For IDology Inc the rate is 23.08% (2023: 25.5%), for Loqate Inc the rate is 23.20% (2023:
25.3%) and for Acuant Inc the rate is 23.64% (2023: 25.1%).
f) Change in United Kingdom tax rate
Effective 1 April 2023 the UK corporation rate increased from 19% to 25%. As this change was
substantively enacted on 24 May 2021, UK deferred tax assets and liabilities were adjusted in
the prior year to reflect the change of rate for the amounts expected to unwind after 1 April 2023.
g) Unremitted earnings
The Group’s foreign subsidiaries have unremitted earnings of £71,998,000 (2023:
£56,955,000), resulting in temporary differences of £157,000 (2023: £143,000) that may be
payable as withholding tax if dividends were declared. No deferred tax has been provided in
respect of these differences since the timing of the reversals can be controlled and it is probable
that the temporary differences will not reverse in the foreseeable future.
12. Dividends paid and proposed
2024
£’000
2023
£’000
Declared and paid during the year
Final dividend for 2023 paid in July 2023: 4.00p (final
dividend for 2022 paid in July 2022: 3.81p)
10,093
9,600
Proposed for approval at AGM (not recognised
as a liability at 31 March)
Final dividend for 2024: 4.20p (2023: 4.00p)
10,609
10,098
Notes to the consolidated financial statements continued
Strategic Report
Governance
Financial Statements
Annual Report 2024
113
Notes to the consolidated financial statements continued
13. Earnings per ordinary share from continuing operations
Basic
pence per
share
Diluted
pence per
share
Adjusted
Basic
pence per
share
Adjusted
Diluted
pence per
share
2024
(19.2)
(19.2)
15.4
15.1
2023
(47.5)
(47.5)
16.7
16.4
Basic
Basic earnings per share is calculated by dividing the profit attributable to equity holders of the
Company from continuing operations by the basic weighted average number of ordinary shares
in issue during the year.
Diluted
Diluted earnings per share is calculated by dividing the profit for the year attributable to ordinary
equity holders from continuing operations by the weighted average number of ordinary shares
outstanding during the year plus the weighted average number of ordinary shares that would
be issued on the conversion of all the dilutive potential ordinary shares into ordinary shares.
2024
No.
2023
No.
Basic weighted average number of shares in issue
252,552,462
252,235,803
Basic weighted average number of shares held by the EBT
(161,495)
(269,104)
Dilutive effect of share options
5,247,463
5,030,313
Diluted weighted average number of shares in issue
257,638,430
256,997,012
For the year ended 31 March 2024 and 31 March 2023, potential ordinary shares are antidilutive,
as their inclusion in the diluted loss per share calculation would reduce the loss per share, and
have therefore been excluded.
Adjusted
Adjusted earnings per share is defined as adjusted operating profit less net finance costs and
adjusted tax divided by the basic weighted average number of ordinary shares of the Company.
2024
£’000
Basic
2024
pence
per share
Diluted
2024
pence
per share
2023
£’000
Basic
2023
pence
per share
Diluted
2023
pence
per share
Adjusted
operating profit
61,197
24.2
23.8
59,817
23.7
23.3
Less net finance
costs
(9,035)
(3.6)
(3.6)
(6,401)
(2.5)
(2.5)
Less adjusted tax
(13,155)
(5.2)
(5.1)
(11,354)
(4.5)
(4.4)
Adjusted earnings
39,007
15.4
15.1
42,062
16.7
16.4
14. Goodwill
2024
£’000
2023
£’000
Cost
At 1 April
748,756
714,100
Foreign currency adjustment
(14,400)
34,656
At 31 March
734,356
748,756
Accumulated impairment
At 1 April
122,362
154
Impairment (note 16)
54,707
122,225
Foreign currency adjustment
(4,335)
(17)
At 31 March
172,734
122,362
Net book value
At 31 March
561,622
626,394
Goodwill arose on the acquisition of GB Mailing Systems Limited, e-Ware Interactive Limited,
Data Discoveries Holdings Limited, Capscan Parent Limited, DecTech Solutions Pty Ltd, CDMS
Limited, Loqate Inc., ID Scan Biometrics Limited, Postcode Anywhere (Holdings) Limited, VIX
Verify Global Pty Limited, IDology Inc, Investigate 2020 Ltd, Acuant Intermediate Holding Corp
and Verifi Identity Services Limited. Under UK-adopted international accounting standards,
goodwill is not amortised and is tested annually for impairment (see note 16).
Strategic Report
Governance
Financial Statements
Annual Report 2024
114
15. Other intangible Assets
Customer
relationships
£’000
Software
technology
£’000
Non-compete
clauses
£’000
Total acquired
intangibles
£’000
Purchased
software
£’000
Internally
developed
software
£’000
Total
£’000
Cost
At 1 April 2022
165,492
170,218
5,288
340,998
1,694
525
343,217
Foreign currency adjustment
6,568
9,319
268
16,155
(20)
–
16,135
Additions
–
–
–
–
57
–
57
Disposals
–
–
(401)
(401)
(1,201)
–
(1,602)
At 31 March 2023
172,060
179,537
5,155
356,752
530
525
357,807
Foreign currency adjustment
(3,177)
(3,361)
(92)
(6,630)
(14)
–
(6,644)
Additions
–
–
–
–
171
–
171
Disposals
–
–
(645)
(645)
(18)
–
(663)
At 31 March 2024
168,883
176,176
4,418
349,477
669
525
350,671
Accumulated amortisation and impairment
At 1 April 2022
50,001
32,232
3,357
85,590
1,355
525
87,470
Foreign currency adjustment
775
323
144
1,242
2
–
1,244
Amortisation during the year
17,083
24,533
1,142
42,758
68
–
42,826
Impairment
–
2,797
–
2,797
–
–
2,797
Disposals
–
–
(401)
(401)
(963)
–
(1,364)
At 31 March 2023
67,859
59,885
4,242
131,986
462
525
132,973
Foreign currency adjustment
(1,177)
(1,049)
(81)
(2,307)
(8)
–
(2,315)
Amortisation during the year
16,437
22,108
902
39,447
165
–
39,612
Disposals
–
–
(645)
(645)
(18)
–
(663)
At 31 March 2024
83,119
80,944
4,418
168,481
601
525
169,607
Net book value
At 31 March 2024
85,764
95,232
–
180,996
68
–
181,064
At 31 March 2023
104,201
119,652
913
224,766
68
–
224,834
At 1 April 2022
115,491
137,986
1,931
255,408
339
–
255,747
Notes to the consolidated financial statements continued
Strategic Report
Governance
Financial Statements
Annual Report 2024
115
Notes to the consolidated financial statements continued
15. Other intangible Assets continued
2024
Carrying Value
of Customer
Relationship
£’000
Remaining
Amortisation
Period
Years
Carrying
Value of
Technology
£’000
Remaining
Amortisation
Period
Years
DecTech Solutions Pty Ltd
34
0.08
–
–
CDMS Limited
43
0.58
–
–
Loqate Inc
245
1.08
–
–
ID Scan Biometrics
Limited
881
2.25
–
–
Postcode Anywhere
(Holdings) Limited
7,667
3.08
–
–
VIX Verify Global Pty
Limited
3,118
4.50
–
–
IDology Inc
32,314
4.83
–
–
Investigate 2020 Ltd
–
–
1,617
1.75
Acuant Inc
39,206
7.75
92,723
5.17
Verifi Identity Services
Limited
2,256
7.83
892
2.83
85,764
95,232
16. Impairment
Summary
At 30 September 2023, GBG’s half year end, it was determined that there was an indicator
of potential impairment in Identity – Americas and Identity – APAC groups of CGUs. This was
as a result of an increase in the applicable discount rate assumptions used in the value-in-
use calculations versus the assumption used as at the previous impairment review which was
conducted as at 31 March 2023.
Following the completion of this impairment review, the carrying value of the Identity – Americas
group of CGUs was reduced to its recoverable amount through recognition of an impairment
charge of £54,707,000 against goodwill. This charge was recognised within exceptional items in
the consolidated statement of profit or loss. No impairment was identified against the Identity –
APAC group of CGUs.
The annual impairment review was performed at 31 March 2024 for all groups of CGUs to which
goodwill is allocated. Despite performing an impairment review for the Identity – Americas and
Identity – APAC group of CGUs during the half year review as at 30 September 2023, these two
groups of CGUs have been reviewed again. The results of the annual impairment review are
detailed below.
With the exception of the impairment charge recognised during the period to 30 September
2023 in the half-year review, no impairment was identified in the other groups of CGUs tested
at 31 March 2024. When an impairment loss has previously been recognised for goodwill, that
impairment loss cannot be reversed in a subsequent period.
Impairment review
Goodwill and intangible assets acquired through business combinations is allocated to the
CGUs that are expected to benefit from that business combination and has been allocated for
impairment testing purposes to seven groups of CGUs as follows:
• Location CGU (represented by the Location operating segment excluding the Location –
APAC Unit)
• Location – APAC CGU (part of the Location operating segment)
• Identity – EMEA CGU (part of the Identity operating segment)
• Identity – APAC CGU (part of the Identity operating segment)
• Identity – Americas CGU (part of the Identity operating segment)
• Fraud – Investigate CGU (part of the Fraud operating segment)
• Fraud – APAC CGU (part of the Fraud operating segment)
Strategic Report
Governance
Financial Statements
Annual Report 2024
116
16. Impairment continued
Impairment review continued
2024
2023
Name
Goodwill
£’000
Acquired
intangibles
£’000
Total
£’000
Goodwill
£’000
Acquired
intangibles
£’000
Total
£’000
Location Unit
61,622
7,912
69,534
61,775
10,634
72,409
Location – APAC Unit
2,228
468
2,696
2,336
614
2,950
Identity – EMEA Unit
103,070
21,990
125,060
104,484
26,588
131,072
Identity – APAC Unit
73,180
21,631
94,811
75,325
26,402
101,727
Identity – Americas Unit
304,372
127,301
431,673
364,662
157,251
521,913
Fraud – Investigate Unit
3,608
1,661
5,269
3,608
2,821
6,429
Fraud – APAC Unit
13,542
33
13,575
14,204
456
14,660
561,622
180,996
742,618
626,394
224,766
851,160
Key Assumptions Used in Value-in-Use Calculations – Base Case
The key assumptions for value-in-use calculations are those regarding the forecast revenue growth, discount rates and long-term growth rates.
The Group prepares cash flow forecasts using:
• budgets and forecasts approved by the Directors covering a 5 year period;
• an appropriate extrapolation of cash flows is applied beyond this to determine a terminal value using a combination of:
- for the Identity segment only – industry analysis of market growth rates to 2032; and
- a long-term average growth rate applied to perpetuity for the geographic market being assessed.
Forecast revenue growth rates, margins and cash flow conversion rates were based on past experience, industry market analysis and strategic opportunities specific to the group of CGUs
being assessed.
The use of a pre-perpetuity projection period of more than five years for the Identity segment is an accounting judgement. It was considered that beyond the initial period covered by budgets and
forecasts, it was most appropriate to include a further period of three years of growth rates (2023: four years of growth rates) that are higher than the long-term average growth rates for that particular
region. The growth rates were considered to be reliable since they were determined on the basis of multiple pieces of independent, external industry and market research covering the Identity and
Identity Fraud markets which supported that, over this period, this market is expected to grow at a higher rate than the long-term growth rates of these geographic markets as a whole.
Beyond this forecast period, the long-term average growth rate is not greater than the average long-term retail growth rate in the territory where the group of CGUs is based UK – 2.0%; USA – 2.5%;
Australia – 3.0% (2023: UK – 2.0%; USA – 2.4%; Australia – 3.6%).
The Directors estimate discount rates using pre-tax rates that reflect current market assessments of the time value of money and the risks specific to the individual CGU. Growth rates reflect long-term
growth rate prospects for the economy in which the CGU operates.
Notes to the consolidated financial statements continued
Strategic Report
Governance
Financial Statements
Annual Report 2024
117
Notes to the consolidated financial statements continued
16. Impairment continued
Impairment review continued
Key Assumptions Used in Value-in-Use Calculations – Base Case continued
2024
2023
Name
Pre-tax
discount rate
%
Growth rate
(in perpetuity)
%
Pre-tax
discount rate
%
Growth rate
(in perpetuity)
%
Location Unit
13.7%
2.0%
13.5%
2.0%
Location – APAC Unit
12.7%
3.0%
13.6%
3.6%
Identity – EMEA Unit*
13.4%
2.0%
13.5%
2.0%
Identity – APAC Unit*
12.6%
3.0%
13.6%
3.6%
Identity – Americas
Unit*
12.2%
2.5%
12.3%
2.4%
Fraud – Investigate Unit
13.8%
2.0%
13.5%
2.0%
Fraud – APAC Unit
12.7%
3.0%
13.6%
3.6%
* For the year to 31 March 2024, the following revenue growth rates have been applied to the three-year period from
1 April 2029 to 31 March 2032 for these groups of CGUs: Identity – EMEA 8.0% (2023: 10.3%), Identity – APAC 10.0%
(2023: 12.5%) and Identity – Americas 14.7% (2023: 14.7%).
The headroom/(impairment) (i.e. the excess/(shortfall) of the value of discounted future cash
flows over the carrying amount of the CGU) under the base case scenario was as follows:
Name
2024
Base case1
£’000
2023
Base case1
£’000
Location Unit
246,384
102,029
Location – APAC Unit
15,876
12,298
Identity – EMEA Unit
36,439
32,301
Identity – APAC Unit
34,658
2,741
Identity – Americas Unit
4,144
(122,208)
Fraud – Investigate Unit
62,206
26,628
Fraud – APAC Unit
62,710
49,372
1. The excess of the recoverable amount over the carrying amount of the CGU before applying sensitivities.
The above assessment is stated after the goodwill impairment recorded at 30 September 2023.
The carrying value of the Identity – Americas group of CGUs was reduced to its recoverable
amount through recognition of an impairment charge of £54,707,000 against goodwill during
the period to 30 September 2023. Further details of the reason for this impairment are in the
summary section above and in the Financial Review on page 34.
This charge is recognised within exceptional items in the Group consolidated statement of profit
or loss. Any additional adverse movement in the key assumptions at the balance sheet date
would lead to a further impairment of goodwill.
Key Assumptions Used in Value-in-Use Calculations – Sensitised Case
The Group has considered the impact of changes in future revenue growth and key assumptions
on the base case value-in-use model, to create a sensitised value-in-use model. The table below
shows the impact on the base case headroom as a result of the following changes, with all other
assumptions being unchanged:
Name
0.1% change
in annual
revenue growth
forecast
£’000
0.1% change
in discount
rate
£’000
0.1% change in
long-term
growth rate
£’000
Location Unit
(906)
(3,660)
(2,770)
Location – APAC Unit
(312)
(279)
(225)
Identity – EMEA Unit
(1,515)
(1,991)
(1,204)
Identity – APAC Unit
(901)
(2,026)
(1,364)
Identity – Americas Unit
(9,437)
(6,616)
(4,333)
Fraud – Investigate Unit
(320)
(755)
(569)
Fraud – APAC Unit
(767)
(1,137)
(912)
A sensitised model has been included on the next page, applying the cumulative impact of:
• Increasing pre-tax discount rates by 50bps (2023: 25bps), to reflect potential increases in
government bond yields and associated risk-free rates. We have increased the sensitivity of this
assumption given the greater volatility observed in discount rates in the last 12 month period;
• Decreasing average annual growth forecasts between 2025 and 2032 by 100bps (2023:
average annual growth forecasts between 2029 and 2032 by 50bps), to reflect the potential for
a worse than predicted market outlook; and
• Decreasing long-term growth rates by 25bps (2023: 25bps), to reflect a worse than predicted
long-term global economic outlook.
It was not deemed necessary to sensitise the operating margin of the CGU given the strategy
for growth. Despite the forecast growth the unsensitised forecast cash flows do not assume any
operating leverage which would increase operating profit margins. Management determined that
should growth be slower than estimated then there was adequate headroom in the estimates of
costs that operating margins could be preserved.
Strategic Report
Governance
Financial Statements
Annual Report 2024
118
16. Impairment continued
The headroom/(impairment) (i.e. the excess of the value of discounted future cash flows over the carrying amount of the CGU) under the sensitised scenario is below:
Name
Base case
headroom
£’000
Change in
headroom
increasing
discount rate
by 50bps
£’000
Change in
headroom
decreasing
annual revenue
growth rates
during the
forecast period
by 100bps
£’000
Change in
headroom
decreasing
long-term
growth rates
by 25bps
£’000
2024
Sensitised1
£’000
2023
Sensitised1
£’000
Location Unit
246,384
(17,491)
(13,352)
(5,692)
209,849
95,680
Location – APAC Unit
15,876
(1,319)
(977)
(440)
13,140
11,622
Identity – EMEA Unit
36,439
(9,508)
(13,757)
(2,292)
10,882
23,337
Identity – APAC Unit
34,658
(9,560)
(8,209)
(2,589)
14,300
(2,776)
Identity – Americas Unit
4,144
(31,361)
(36,990)
(8,140)
(72,347)
(157,506)
Fraud – Investigate Unit
62,206
(3,607)
(2,962)
(1,164)
54,473
25,445
Fraud – APAC Unit
62,710
(5,369)
(3,788)
(1,793)
51,760
46,517
1. Headroom after adjusting future cash flows and key assumptions to create a sensitised value-in-use model.
The sensitised scenario would lead to impairment of £72,347,000 for Identity – Americas. Therefore, a reasonably possible change in the value of the key assumptions could cause CGU carrying
amount to exceed its recoverable amount.
When considering goodwill impairment, the break-even rate at which headroom within each CGU is reduced to £nil, if all other assumptions remain unchanged, has also been considered.
2024
20231
Name
Pre-tax
discount rate
Decrease in
base case
cash flows
Revenue
growth rate
(2029 to 2032)
Pre-tax
discount rate
Decrease in
base case
cash flows
Revenue
growth rate
(2029 to 2032)
Location Unit
56.7%
(78.0)%
n/a
28.7%
(58.0)%
n/a
Location – APAC Unit
67.7%
(85.0)%
n/a
48.6%
(80.0)%
n/a
Identity – EMEA Unit
16.5%
(23.0)%
(1.4)%
15.8%
(20.0)%
4.5%
Identity – APAC Unit
15.8%
(27.0)%
(4.7)%
13.9%
(3.0)%
11.4%
Identity – Americas Unit
12.3%
(1.0)%
14.2%
n/a
n/a
n/a
Fraud – Investigate Unit
248.9%
(92.0)%
n/a
63.7%
(80.0)%
n/a
Fraud – APAC Unit
53.9%
(82.0)%
n/a
41.1%
(76.0)%
n/a
With the exception of the Identity – Americas groups of CGUs, the Directors do not believe that any reasonably possible changes in the value of the key assumptions noted above would cause a CGU
carrying amount to exceed its recoverable amount.
Notes to the consolidated financial statements continued
Strategic Report
Governance
Financial Statements
Annual Report 2024
119
Notes to the consolidated financial statements continued
17. Property, plant and equipment
Property
£’000
Plant and
equipment
£’000
Total
£’000
Cost
At 1 April 2022
1,251
10,447
11,698
Additions
–
968
968
Disposals
–
(1,507)
(1,507)
Foreign currency adjustment
–
308
308
At 31 March 2023
1,251
10,216
11,467
Additions
–
613
613
Disposals
(1,251)
(4,477)
(5,728)
Foreign currency adjustment
–
(276)
(276)
At 31 March 2024
–
6,076
6,076
Accumulated depreciation and impairment
At 1 April 2022
99
6,998
7,097
Provided during the year
19
1,752
1,771
Disposals
–
(1,264)
(1,264)
Foreign currency adjustment
–
111
111
At 31 March 2023
118
7,597
7,715
Provided during the year
17
1,289
1,306
Disposals
(135)
(4,304)
(4,439)
Foreign currency adjustment
–
(156)
(156)
At 31 March 2024
–
4,426
4,426
Net book value
At 31 March 2024
–
1,650
1,650
At 31 March 2023
1,133
2,619
3,752
At 1 April 2022
1,152
3,449
4,601
Included within property is land of £nil (2023: £240,000) which is not subject to depreciation.
18. Right-of-use assets
£’000
Cost
At 1 April 2022
8,819
Additions
420
Disposals
(2,234)
Foreign currency adjustment
148
At 31 March 2023
7,153
Additions
1,322
Disposals
(4,479)
Foreign currency adjustment
(68)
At 31 March 2024
3,928
Accumulated depreciation and impairment
At 1 April 2022
6,077
Provided during the year
1,491
Impairment
202
Disposals
(2,156)
Foreign currency adjustment
90
At 31 March 2023
5,704
Provided during the year
1,155
Disposals
(4,462)
Foreign currency adjustment
(34)
At 31 March 2024
2,363
Net book value
At 31 March 2024
1,565
At 31 March 2023
1,449
At 1 April 2022
2,742
The underlying class of assets and their net book values all relate to leasehold property.
Strategic Report
Governance
Financial Statements
Annual Report 2024
120
19. Investments
2024
£’000
2023
£’000
At 1 April
3,026
2,326
Changes in fair value recognised in OCI
(1,600)
700
At 31 March
1,426
3,026
The above balance is split between investments held at fair value through other comprehensive
income of £1,388,000 (2023: £2,988,000) and cost less provision for impairment of £38,000
(2023: £38,000).
During the year, a £1,600,000 loss on investments (2023: £700,000 gain on investments) was
recognised in OCI due to the fair value assessment of the investment in CredoLab Pte Ltd. See
note 28 for details of how the fair value is determined.
The Group consists of a Parent Company, GB Group plc, incorporated in the UK, and a number
of subsidiaries held directly or indirectly by GB Group plc, which are incorporated around the
world, each contributing to the Group’s profits, assets and cash flows.
Notes to the consolidated financial statements continued
Strategic Report
Governance
Financial Statements
Annual Report 2024
121
Notes to the consolidated financial statements continued
19. Investments continued
Subsidiaries are accounted for using the cost model and the results of all subsidiaries have been
consolidated in these financial statements. The Group holds 100% of the ordinary share capital
of all investments as follows:
Name of company
Proportion of
voting rights and
shares held
Country of
incorporation
Registered office address
Acuant Inc1
100%
United States
2300 Windy Ridge Parkway, Atlanta GA, 30339, United States
Acuant Israel1
100%
Israel
Ha-Mefalsim St 12, Petah Tikva, Israel, 4951421
Acuant Mexico S de RL de CV1
100%
Mexico
Lago Alberto 442 Int 403 Suit 572 Col. ANAHUAC II SECCION
Citizensafe Limited2
100%
United Kingdom
The Foundation, Herons Way, Chester Business Park, Chester CH4 9GB
GBG ANZ Pty Ltd1
100%
Australia
Level 7, 330 Collins Street, Melbourne, VIC 3000, Australia
GBG (Australia) Holding Pty Ltd
100%
Australia
Level 7, 330 Collins Street, Melbourne, VIC 3000, Australia
GBG (Australia) Pty Ltd1
100%
Australia
Level 7, 330 Collins Street, Melbourne, VIC 3000, Australia
GBG (Europe) SL1
100%
Spain
08002-Barcelona, Edifici The Triangle, 4th Floor, Placa de Catalunya, Barcelona, Spain
GBG (Malaysia) Sdn Bhd1
100%
Malaysia
Level 7 Menara Millenium, Jalan Damanlela Pusat Bandar, Damansara Heights,
50490 Kuala Lumpur, Wilayah Persekutuan, Malaysia
GBG (Singapore) Pte Ltd
100%
Singapore
C/O S.S. Corporate Management Pte. Ltd, 138 Cecil Street, #12-01A Cecil Court, 069538 Singapore
GBG (Thai) Company Limited1
100%
Thailand
No. 88 The Parq Building, Room No. 7E1-16 and 8E1-16, 7th and 8th Floor, Ratchadaphisek Road,
Khlong Toei Subdistrict, Khlong Toei District, Bangkok , 10110, Thailand
GBG (US) Holdings LLC
100%
United States
2300 Windy Ridge Parkway, Atlanta GA, 30339, United States
Green ID Limited1
100%
New Zealand
Moore Stephens Markhams Wellington Limited, Level 11 Sovereign House, 34-42 Manners Street,
Wellington 6011, New Zealand
Hello Soda Inc1
100%
United States
2300 Windy Ridge Parkway, Atlanta GA, 30339, United States
Hello Soda (Thailand) Company Limited1
49%
Thailand
1108/31 Sukhumvit Road, Phrakanong, Klongtoey, Bangkok 10110, Thailand
HS Thailand Ltd1
100%
United Kingdom
The Foundation, Herons Way, Chester Business Park, Chester, CH4 9GB
IDology Inc
100%
United States
2300 Windy Ridge Parkway, Atlanta GA, 30339, United States
ID Scan Biometrics Limited2
100%
United Kingdom
The Foundation, Herons Way, Chester Business Park, Chester CH4 9GB
IDscan Research Bilisim Teknolojileri
Sanayi Ve Ticaret Limited Sirketi1
100%
Turkey
Mersin Universitesi Çiftlikköy Kampüsü, Teknopark İdari Bina No: 106 Yenişehir – Mersin, Turkiye
Investigate 2020 Ltd2
100%
United Kingdom
The Foundation, Herons Way, Chester Business Park, Chester CH4 9GB
Loqate Inc
100%
United States
2570 N. First Street, 2nd Floor, San Jose, CA 95131, United States
Loqate Ltd1, 2
100%
United Kingdom
The Foundation, Herons Way, Chester Business Park, Chester CH4 9GB
Mastersoft Group Pty Ltd1
100%
Australia
Level 7, 330 Collins Street, Melbourne, VIC 3000
Mastersoft (NZ) Ltd1
100%
New Zealand
Moore Stephens Markhams Wellington Limited, Level 11 Sovereign House, 34-42 Manners Street,
Wellington 6011, New Zealand
Postcode Anywhere (Europe) Limited1, 2
100%
United Kingdom
The Foundation, Herons Way, Chester Business Park, Chester CH4 9GB
Postcode Anywhere Holdings Limited2
100%
United Kingdom
The Foundation, Herons Way, Chester Business Park, Chester CH4 9GB
Postcode Anywhere (North America) Limited1, 2
100%
United Kingdom
The Foundation, Herons Way, Chester Business Park, Chester CH4 9GB
PT Fraud Solutions Indonesia1
100%
Indonesia
Karinda Building, 2nd Floor, Suite 4, RT/RW.004/002, JL.Palmerah Selatan No. 30A,
Kel. Gelora, Kec. Tanah Abang, Central Jakarta, Indonesia
Verifi Identity Services Limited1
100%
New Zealand
c/- CSNZ, Level 5, 79 Queen Street, Auckland, 1010, New Zealand
Strategic Report
Governance
Financial Statements
Annual Report 2024
122
Name of company
Proportion of
voting rights and
shares held
Country of
incorporation
Registered office address
Verifi International Limited1
100%
New Zealand
c/- CSNZ, Level 5, 79 Queen Street, Auckland, 1010, New Zealand
VIX Verify Global Pty Ltd1
100%
Australia
Level 7, 330 Collins Street, Melbourne, VIC 3000
迪安科1
100%
China
Room 1714, Building 4, China Investment Center, No.9 Guangan Road, Fengtai District, Beijing, China
VIX Verify International Pty Ltd1
100%
Australia
Co Sec Consulting Pty Ltd, 58 Gipps Street, Collingwood, Victoria 3066, Australia
VIX Verify SA (Pty) Ltd1
100%
South Africa
C/O Eversheds Sutherland, 3rd Floor, 54, Melrose Boulevard, Melrose Arch, Melrose North, 2196,
Johannesburg, South Africa
The following investments placed into liquidation during the year ended 31 March 2023 were dissolved during the year:
Name of company
Proportion of
voting rights
and shares held
Country of
incorporation
Registered office address
Acuant UK Limited
100%
United Kingdom
C/O Mazars LLP, 1st Floor Two Chamberlain Square, Birmingham, B3 3AX
CRD (UK) Limited
100%
United Kingdom
C/O Mazars LLP, Restructuring Services, Capital Square 58, Morrison Street, Edinburgh, EH3 8BP
Data Discoveries Holdings Limited
100%
United Kingdom
C/O Mazars LLP, Restructuring Services, Capital Square 58 Morrison Street, Edinburgh, EH3 8BP
Data Discoveries Limited
100%
United Kingdom
C/O Mazars LLP, Restructuring Services, Capital Square 58 Morrison Street, Edinburgh, EH3 8BP
e-Ware Interactive Limited
100%
United Kingdom
C/O Mazars LLP, Restructuring Services, Capital Square 58, Morrison Street, Edinburgh, EH3 8BP
Farebase Limited
100%
United Kingdom
C/O Mazars LLP, Restructuring Services, Capital Square 58, Morrison Street, Edinburgh, EH3 8BP
GB Mailing Systems Limited
100%
United Kingdom
C/O Mazars LLP, Restructuring Services, Capital Square 58, Morrison Street, Edinburgh, EH3 8BP
Inkfish Services Limited
100%
United Kingdom
C/O Mazars LLP, Restructuring Services, Capital Square 58, Morrison Street, Edinburgh, EH3 8BP
Managed Analytics Limited
100%
United Kingdom
C/O Mazars LLP, Restructuring Services, Capital Square 58 Morrison Street, Edinburgh, EH3 8BP
TMG.tv Limited
100%
United Kingdom
C/O Mazars LLP, Restructuring Services, Capital Square 58, Morrison Street, Edinburgh, EH3 8BP
Transactis Limited
100%
United Kingdom
C/O Mazars LLP, Restructuring Services, Capital Square 58, Morrison Street, Edinburgh, EH3 8BP
19. Investments continued
Notes to the consolidated financial statements continued
Strategic Report
Governance
Financial Statements
Annual Report 2024
123
Notes to the consolidated financial statements continued
The following investments were placed into liquidation or liquidated during the year:
Name of company
Proportion of
voting rights
and shares held
Country of
incorporation
Registered office address
Capscan Limited1, 2
100%
United Kingdom
The Foundation Herons Way, Chester Business Park, Chester, CH4 9GB
Capscan Parent Limited2
100%
United Kingdom
The Foundation Herons Way, Chester Business Park, Chester, CH4 9GB
IDscan Biometrics R&D – Lithuania1, 2, 4
100%
Lithuania
Kauno m. Kauno m. I. Kanto g. 18-4B, Lithuania
GB Group plc also hold branches in Germany and New Zealand and the Group holds branches in Australia, Thailand and the Philippines.
The Company accounts for its non-listed equity investments as financial instruments designated at fair value through OCI. The Company holds the following non-listed equity investments:
Name of company
Proportion of
voting rights
and shares held
Country of
incorporation
Registered office address
CredoLab Pte Ltd
10.53%
Singapore
111 North Bridge Road #08-18, Peninsula Plaza, Singapore 179098
Prove Inc (formerly Payfone Inc.)1, 3
0.32%
United States
215 Park Avenue South New York, NY 10003 United States
Zenoo Ltd1
1.00%
United Kingdom
C/O Azets, Compass House, Vision Park, Histon, Cambridge, Cambridgeshire,
United Kingdom, CB24 9AD
1. Held indirectly.
2. Dormant companies.
3. Held at zero value.
4. Liquidated during the year.
19. Investments continued
Strategic Report
Governance
Financial Statements
Annual Report 2024
124
Expected credit loss allowance for trade receivables
The Group applies the IFRS 9 simplified approach to measuring expected credit losses which
uses a lifetime expected loss allowance for all trade receivables and contract assets. To measure
the expected credit losses, trade receivables have been grouped based on shared credit risk
characteristics and days past due. The provision rates are based on days past due, historical
information relating to counterparty default rates and external credit ratings where available.
The historical loss rates are then adjusted for current and forward-looking information on
macroeconomic factors affecting the Group’s customers, such as inflation, interest rates and
economic growth rates. The following table provides an analysis of the Group’s credit risk
exposure on trade receivables using a provision matrix to measure expected credit losses.
31 March 2024
Trade receivables
Days past due
Current
£’000
< 30 days
£’000
31 – 60
days
£’000
61 – 90
days
£’000
> 90 days
£’000
Total
£’000
Gross carrying amount
35,148
11,584
2,594
2,990
4,841
57,157
Expected credit loss
(274)
(88)
(26)
(398)
(1,630)
(2,416)
Net carrying amount
34,874
11,496
2,568
2,592
3,211
54,741
% of total
63%
21%
5%
5%
6%
100%
31 March 2023
Trade receivables
Days past due
Current
£’000
< 30 days
£’000
31 – 60
days
£’000
61 – 90
days
£’000
> 90 days
£’000
Total
£’000
Gross carrying amount
30,112
12,375
3,712
1,603
5,090
52,892
Expected credit loss
(523)
(110)
(39)
(31)
(1,691)
(2,394)
Net carrying amount
29,589
12,265
3,673
1,572
3,399
50,498
% of total
59%
24%
7%
3%
7%
100%
The expected credit loss disclosed above includes both expected credit loss and credit note
provisions.
20. Inventories
2024
£’000
2023
£’000
Finished goods
1,316
2,619
An amount of £20,000 has been charged (2023: £106,000 charged) to the consolidated
statement of profit or loss in respect of movements in inventory write-downs. The cost of
inventory recognised as an expense was £3,837,000 (2023: £4,097,000).
21. Trade and other receivables
2024
£’000
2023
£’000
Current
Trade receivables
57,157
52,892
Allowance for unrecoverable amounts
(2,416)
(2,394)
Net trade receivables
54,741
50,498
Prepayments
9,441
10,818
Accrued income
8,659
3,997
72,841
65,313
Non-current
Prepayments
493
701
Accrued income
5,730
3,604
6,223
4,305
Notes to the consolidated financial statements continued
Strategic Report
Governance
Financial Statements
Annual Report 2024
125
Notes to the consolidated financial statements continued
21. Trade and other receivables continued
Set out below is the movement in the allowance for expected credit losses of trade receivables and credit
note provisions:
2024
£’000
2023
£’000
Balance at 1 April
2,394
3,968
Increase/(decrease) in provision
1,956
(542)
Write-offs
(993)
(366)
Release
(908)
(707)
Foreign exchange
(33)
41
Balance at 31 March
2,416
2,394
Sensitivities
A change in the expected credit loss percentage applied to each ageing category of 1% would
increase/decrease the overall provision by £572,000 (2023: £528,000) at the year end.
22. Cash and cash equivalents
2024
£’000
2023
£’000
Cash at bank and in hand
21,321
21,552
£269,000 (2023: £279,000) of cash is considered to be restricted as it is held by Commonwealth
Bank of Australia for the purposes of the bank guarantee over GBG offices in Australia.
Cash at bank earns interest at floating rates based on daily bank deposit rates.
23. Equity share capital and share premium
2024
£’000
2023
£’000
Authorised
252,598,473 (2023: 252,454,882) ordinary shares
of 2.5p each
6,315
6,311
Issued
Allotted, called up and fully paid
6,315
6,311
Share premium
567,581
567,581
573,896
573,892
2024
No.
2023
No.
Number of shares in issue at 1 April
252,454,882
251,869,601
Issued on exercise of share options
143,591
585,281
Number of shares in issue at 31 March
252,598,473
252,454,882
Strategic Report
Governance
Financial Statements
Annual Report 2024
126
23. Equity share capital and share premium continued
2024
2023
Share
capital
£’000
Share
premium
£’000
Total
£’000
Share
capital
£’000
Share
premium
£’000
Total
£’000
1 April
6,311
567,581
573,892
6,297
566,769
573,066
Consideration
received on
exercise of share
options
4
–
4
14
812
826
31 March
6,315
567,581
573,896
6,311
567,581
573,892
Share forfeiture
Under Article 43 of GBG’s Articles of Association if, for a period of at least 12 years, the
Company has been unable to trace a shareholder and dividends have remained uncashed, the
shares will be forfeited. Those shares become an asset of the Company and can be sold on the
open market, with the net proceeds being ‘employed in the business of the Company or invested
in such investments as the Board may think fit’.
Following an extensive exercise in conjunction with the Company’s Registrar to trace missing
shareholders, in September 2023 unclaimed dividends totalling £3,000 were repaid to the
Company. The receipt from unclaimed dividends has been recognised directly in retained
earnings.
During the year to 31 March 2024, a number of late claims have been received in relation to
previous forfeited shares and unclaimed dividends. As a result, share forfeiture refunds totalling
£40,000 have been paid (2023: £4,000).
24. Loans and borrowings
Bank loans
During the year to 31 March 2024, the Group drew down an additional £10,000,000 and made
repayments of $20,000,000 (£15,967,000) and £17,000,000. The outstanding balance on the
loan facility at 31 March 2024 was £102,175,000 (2023: £127,470,000) representing £nil in GBP
(2023: £7,000,000) and $129,000,000 in USD (2023: $149,000,000).
The facility was due to expire in July 2026 but on 27 October 2023, the Group exercised the
second of the one-year extension options on the existing revolving credit facility so that the
Group has access to a £175 million facility until July 2026 and £140 million until July 2027. A
further arrangement fee of £286,000 was payable for this extension. Loan arrangement fees
have been netted off the loan balance.
The debt bears an interest rate of Sterling Overnight Index Average (SONIA) for GBP drawdowns
or Secured Overnight Financing Rate (SOFR) for USD drawdowns plus a margin of between 1.6%
and 2.4% depending on the Group’s current leverage position.
The loan is secured by a fixed and floating charge over the assets of the Group.
2024
£’000
2023
£’000
Opening bank loan
126,411
128,226
New borrowings
10,000
12,000
Agency fee paid
(56)
–
Loan fees paid for extension
(286)
(357)
Repayment of borrowings
(32,967)
(22,394)
Amortisation of loan fees
341
326
Foreign currency translation adjustment
(2,328)
8,610
Closing bank loan
101,115
126,411
Analysed as:
Amounts falling due within 12 months
–
–
Amounts falling due after one year
101,115
126,411
101,115
126,411
Analysed as:
Bank loans
102,175
127,470
Unamortised loan fees
(1,060)
(1,059)
101,115
126,411
Notes to the consolidated financial statements continued
Strategic Report
Governance
Financial Statements
Annual Report 2024
127
Notes to the consolidated financial statements continued
25. Lease liabilities
2024
£’000
2023
£’000
At 1 April
1,766
3,371
Additions
1,481
523
Disposals
(174)
(201)
Accretion of interest
70
110
Payments
(1,399)
(2,062)
Foreign currency adjustment
(33)
25
At 31 March
1,711
1,766
Analysed as:
Amounts falling due within 12 months
836
1,242
Amounts falling due after one year
875
524
1,711
1,766
26. Trade and other payables
2024
£’000
2023
£’000
Trade payables
13,568
11,427
Other taxes and social security costs
4,983
3,996
Accruals
25,118
21,889
43,669
37,312
27. Provisions
2024
£’000
2023
£’000
Provisions can be analysed as follows:
Dilapidation provision (see below)
290
342
Long-service award (see below)
451
450
741
792
Dilapidation provision
At 1 April
342
345
Provided in year
–
40
Utilised in year
(51)
(41)
Foreign exchange adjustment
(1)
(2)
At 31 March
290
342
This provision relates to the estimated cost of restoration work required upon termination of
leasehold property agreements. The main uncertainty relates to estimating the cost that will
be incurred at the end of the lease. The timing of the outflows is not expected to occur in the
following 12 months and as such has been disclosed as a non-current liability. The Group do not
expect the final payments to differ materially from those amounts provided.
Long-service award
The Group provides long-service awards, providing employees with a benefit after they attain
a set period of service with the Group, for example 10 or 20 years. For these benefits, IAS 19
requires a liability to be held on the Group’s balance sheet.
2024
£’000
2023
£’000
At 1 April
450
521
Service cost
129
64
Benefits taken
(60)
(59)
Actuarial gain during the year
(90)
(85)
Net interest charge
22
9
At 31 March
451
450
Strategic Report
Governance
Financial Statements
Annual Report 2024
128
27. Provisions continued
The following table lists the inputs to the valuation of the long-service award for the years ended
31 March 2024 and 31 March 2023.
2024
2023
Discount rate (%)
4.7
4.8
Salary increases (%)
3.5
3.8
Employee turnover (% probability of leaving
depending on age)
3 - 46%
2 – 23%
28. Financial instruments and risk management
The Group’s activities expose it to a variety of financial risks including: market risk (including
foreign currency risk and cash flow interest rate risk), credit risk, liquidity risk and capital
management. The Group’s overall risk management programme considers the unpredictability
of financial markets and seeks to reduce potential adverse effects on the Group’s financial
performance. The Group does not currently use derivative financial instruments to hedge foreign
exchange exposures.
Credit risk
Credit risk is managed on a Group basis except for credit risk relating to accounts receivable
balances which each entity is responsible for managing. Credit risk arises from cash and cash
equivalents, as well as credit exposures from outstanding customer receivables. Management
assesses the credit quality of the customer, taking into account its financial position, past
experience and other factors. For those sales considered higher risk, the Group operates a
policy of cash in advance of delivery. The Group regularly monitors its exposure to bad debts in
order to minimise exposure. Credit risk from cash and cash equivalents is managed via banking
with well-established banks with a strong credit rating.
The maximum exposure to credit risk at the reporting dates is the carrying value of each class
of financial assets as disclosed in note 21.
Foreign currency risk
The Group’s foreign currency exposure arises from:
• Transactions (sales/purchases) denominated in foreign currencies;
• Monetary items (mainly cash receivables and borrowings) denominated in foreign currencies;
and
• Investments in foreign operations, whose net assets are exposed to foreign currency
translation.
The Group has currency exposure on its investments in foreign operations in the United States
of America. In terms of sensitivities, the effect on equity of a 10% increase in the US Dollar
and Sterling exchange rate would be an increase in equity of £7,020,000 (2023: £8,561,000
increase). The effect on equity of a 10% decrease in the US Dollar and Sterling exchange rate
would be a decrease of £8,580,000 (2023: £10,464,000 decrease).
Foreign currency risk continued
The Group has currency exposure on its investments in foreign operations in Australia. In terms
of sensitivities, the effect on equity of a 10% increase in the Australian Dollar and Sterling
exchange rate would be a decrease of £4,572,000 (2023: £5,135,000 decrease). The effect
on equity of a 10% decrease in the Australian Dollar and Sterling exchange rate would be an
increase of £5,587,000 (2023: £6,276,000 increase).
The Group has currency exposure on its investments in foreign operations in New Zealand. In
terms of sensitivities, the effect on equity of a 10% increase in the New Zealand Dollar and
Sterling exchange rate would be a decrease of £49,000 (2023: £94,000 decrease). The effect
on equity of a 10% decrease in the New Zealand Dollar and Sterling exchange rate would be an
increase of £60,000 (2023: £114,000 increase).
The exposure to transactional foreign exchange risk within each company is monitored and
managed at both an entity and a Group level. The following table demonstrates the sensitivity
of the Group’s foreign currency exposure on the net monetary position at 31 March 2024:
Foreign currency
exposure – Group
USD
rate
EUR
rate
AUD
rate
MYR
rate
CNY
rate
NZD
rate
THB
rate
IDR
rate
Change in rate
+10%
+10%
+10%
+10%
+10%
+10%
+10%
+10%
Effect on profit
before tax (£000s)
577
(24)
(160)
(36)
11
(42)
(34)
45
Change in rate
–10%
–10%
–10%
–10%
–10%
–10%
–10%
–10%
Effect on profit
before tax (£000s)
(705)
29
196
44
(14)
51
42
(55)
The Group’s exposure to foreign currency changes for all other currencies is not material.
Cash flow interest rate risk
The Group has financial assets and liabilities, which are exposed to changes in market interest
rates. Changes in interest rates impact primarily on deposits and loans by changing their future
cash flows (variable rate). Management does not currently have a formal policy of determining
how much of the Group’s exposure should be at fixed or variable rates and the Group does not
use hedging instruments to minimise its exposure. However, at the time of taking new loans or
borrowings, management uses its judgement to determine whether it believes that a fixed or
variable rate would be more favourable for the Group over the expected period until maturity.
In terms of sensitivities, the effect on profit before taxation of an increase/decrease in the basis
points on floating rate borrowings of 25 basis points would be £257,000 (2023: £326,000).
Liquidity risk
Cash flow forecasting is performed on a Group basis by the monitoring of rolling forecasts of the
Group’s liquidity requirements to ensure that it has sufficient cash to meet operational needs and
surplus funds are placed on deposit and available at very short notice. The maturity date of the
Group’s loans are disclosed in note 24.
Notes to the consolidated financial statements continued
Strategic Report
Governance
Financial Statements
Annual Report 2024
129
Notes to the consolidated financial statements continued
28. Financial instruments and risk management continued
The table below summarises the maturity profile of the Group’s financial liabilities based on
contractual undiscounted payments and includes contractual interest payments:
Year ended 31 March 2024
On
demand
£’000
Less than
12 months
£’000
1 to 5
years
£’000
Total
£’000
Loans (note 24)
–
–
102,175
102,175
Contingent consideration
(note 34)
–
–
–
–
Lease liabilities (note 25)
–
906
888
1,794
Trade and other payables
(note 26)
18,551
25,118
–
43,669
18,551
26,024
103,063
147,638
Year ended 31 March 2023
On
demand
£’000
Less than
12 months
£’000
Restated1
1 to 5
Years
£’000
Restated1
Total
£’000
Loans (note 24)
–
–
127,470
127,470
Contingent consideration
(note 34)
–
1,237
–
1,237
Lease liabilities (note 25)
–
1,291
549
1,840
Trade and other payables
(note 26)
15,423
21,889
–
37,312
15,423
24,417
128,019
167,859
1. The year to 31 March 2023 has been restated to exclude unamortised loan arrangement fees from loans to correct the
classification of financial instruments. The correction in classification increased the disclosure of loans by £1,059,000 but
had no impact on the consolidated balance sheet.
The balances above represent the contractual undiscounted amounts, and therefore will differ
from the amounts presented in the consolidated balance sheet (which are discounted).
Capital Management
The Group manages its capital structure in order to safeguard the going concern of the Group
and maximise shareholder value. The capital structure of the Group consists of debt, which
includes loans disclosed in note 24, cash and cash equivalents and equity attributable to equity
holders of the Company, comprising issued capital, reserves and retained earnings.
The Group may maintain or adjust its capital structure by adjusting the amount of dividend paid
to shareholders, returning capital to shareholders, issuing new shares or selling assets to reduce
debt.
In order to achieve this overall objective, the Group’s capital management, amongst other things,
aims to ensure that it meets financial covenants attached to borrowings. Breaches in meeting
the financial covenants would permit the bank to immediately recall loans and borrowings. There
have been no breaches in the financial covenants of any borrowings in the current period.
No changes were made in the objectives, policies or processes for managing capital during the
years ended 31 March 2024 and 31 March 2023.
Strategic Report
Governance
Financial Statements
Annual Report 2024
130
28. Financial instruments and risk management continued
Financial Instruments: Classification and Measurement
Set out below is an overview of financial instruments held by the Group at 31 March:
2024
Restated1
2023
Amortised
cost
£’000
Fair value
through profit
or loss
£’000
Fair value
through OCI
£’000
Amortised
cost
£’000
Fair value
through profit
or loss
£’000
Fair value
through OCI
£’000
Financial assets:
Trade and other receivables
63,400
–
–
54,495
–
–
Cash and cash equivalents
21,321
–
–
21,552
–
–
Total current
84,721
–
–
76,047
–
–
Investments
38
–
1,388
38
–
2,988
Trade and other receivables
5,730
–
–
3,604
–
–
Total non-current
5,768
–
1,388
3,642
–
2,988
Total
90,489
–
1,388
79,689
–
2,988
Financial liabilities:
Lease liabilities
875
–
–
524
–
–
Loans
102,175
–
–
127,470
–
–
Contingent consideration
–
–
–
–
–
–
Total non-current
103,050
–
–
127,994
–
–
Trade and other payables
38,686
–
–
33,316
–
–
Lease liabilities
836
–
–
1,242
–
–
Loans
–
–
–
–
–
–
Contingent consideration
–
–
–
–
1,237
Total current
39,522
–
–
34,558
1,237
–
Total
142,572
–
–
162,552
1,237
–
1. The year to 31 March 2023 has been restated to include accrued income and cash and cash equivalents in financial assets, to remove other taxes and social security costs from financial liabilities, to remove unamortised loan arrangement fees from loans and
include investments held at amortised cost within investments to correct the classification of financial instruments. This correction in classification increased the disclosure of financial assets by £29,191,000 and reduced financial liabilities by £2,937,000 but
had no impact on the consolidated balance sheet.
All financial assets and liabilities have a carrying value that approximates to fair value. The Group does not have any derivative financial instruments at the year end.
Notes to the consolidated financial statements continued
Strategic Report
Governance
Financial Statements
Annual Report 2024
131
28. Financial instruments and risk management continued
Financial Assets
Trade and other receivables exclude the value of any prepayments or accrued income. Trade and
other payables exclude the value of deferred income.
Cash at bank and in hand earns interest at floating rates based on daily bank deposit rates. Trade
receivables are non-interest bearing and are generally on 14-to 60-day terms.
Financial Liabilities
The Group has a multi-currency revolving credit facility agreement expiring in July 2027, which
is subject to a limit of £175,000,000 until July 2026 and £140,000,000 until July 2027. The
debt bears an interest rate of Sterling Overnight Index Average (SONIA) for GBP drawdowns or
Secured Overnight Financing Rate (SOFR) for USD drawdowns plus a margin of between 1.6%
and 2.4% depending on the Group’s current leverage position.
The facilities are secured by way of an all asset debenture.
The Group is subject to a number of covenants in relation to its borrowings which, if breached,
would result in loan balances becoming immediately repayable. These covenants specify certain
maximum limits in terms of the following:
• Leverage
• Interest cover
At 31 March 2024 and 31 March 2023, the Group was not in breach of any bank covenants.
Notes to the consolidated financial statements continued
Financial Liabilities: Interest Bearing Loans and Borrowings
Interest rate
%
Maturity
2024
£’000
Restated
2023
£’000
Non-current interest-
bearing loans and
borrowings
£175,000,000 multi-
currency revolving credit
facility
Variable1
July 20262
102,175
127,470
Total non-current
interest-bearing loans
and borrowings
102,175
127,470
Total interest-bearing loans
and borrowings
102,175
127,470
1. The debt bears an interest rate of Sterling Overnight Index Average (SONIA) for GBP drawdowns or Secured Overnight
Financing Rate (SOFR) for USD drawdowns plus a margin of between 1.6% and 2.4% depending on the Group’s current
leverage position.
2. Following the exercise of the second of the one-year extension options on the existing revolving credit facility on 27 October
2023, the Group has access to a £175 million facility until July 2026 and £140 million facility until July 2027.
The year to 31 March 2023 has been restated to exclude unamortised loan arrangement fees from loans to correct the
classification of financial liabilities. The correction in classification increased the disclosure of interest-bearing loans by
£1,059,000 but had no impact on the consolidated balance sheet.
Strategic Report
Governance
Financial Statements
Annual Report 2024
132
28. Financial instruments and risk management continued
Fair Values of Financial Assets and Liabilities
The Group classifies fair value measurement using a fair value hierarchy that reflects the significance of inputs used in making measurements of fair value. The fair value hierarchy has the following
levels:
• Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities;
• Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and
• Level 3 – Inputs for the asset or liability that are not based on observable market data (unobservable inputs).
For financial instruments that are recognised at the fair value on a recurring basis, the Group determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation
(based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
At 31 March 2024
Valuation
technique
Level 1
£’000
Level 2
£’000
Level 3
£’000
Total
£’000
Financial asset at fair value through other comprehensive income
Investment in CredoLab Pte Ltd (note 19)
Market-based
approach
–
–
1,388
1,388
Financial liability at fair value through profit and loss
Contingent consideration (note 34)
Present value of
expected future
cash flow
–
–
–
–
At 31 March 2023
Valuation
technique
Level 1
£’000
Level 2
£’000
Level 3
£’000
Total
£’000
Financial asset at fair value through other comprehensive income
Investment in CredoLab Pte Ltd (note 19)
Market-based
approach
–
–
2,988
2,988
Financial liability at fair value through profit and loss
Contingent consideration (note 34)
Present value of
expected future
cash flow
–
–
1,237
1,237
There were no transfers between levels during the period.
The fair value of non-listed equity investments is determined using the market-based approach. Factors considered include movement in exchange rates, similar share transactions and revenue
performance.
The fair value of contingent consideration is estimated having been determined from management’s estimates of the range of outcomes to certain future forecasts and their estimated respective
likelihoods. The contractual cash flows are therefore based on future trading activity, which is estimated based on latest forecasts.
There were no changes to the valuation techniques during the period.
Notes to the consolidated financial statements continued
Strategic Report
Governance
Financial Statements
Annual Report 2024
133
Notes to the consolidated financial statements continued
29. Changes in liabilities arising from financing activities
1 April
2023
£’000
Cash
flows
£’000
Foreign
exchange
movement
£’000
Other
movement
£’000
New
leases
£’000
31 March
2024
£’000
Current liabilities
Lease liabilities
1,242
(1,399)
–
993
–
836
Non-current liabilities
Interest bearing loans
126,411
(23,253)
(2,328)
285
–
101,115
Lease liabilities
524
–
(33)
(1,097)
1,481
875
Total liabilities arising from financing activities
128,177
(24,652)
(2,361)
181
1,481
102,826
Other movement in interest bearing loans represents additional loan fees paid during the year and amortisation of those loan fees.
Other movement in lease liabilities includes interest, disposals and the reclassification of non-current lease liabilities to current lease liabilities.
1 April
2022
£’000
Cash
flows
£’000
Foreign
exchange
movement
£’000
Other
movement
£’000
New
leases
£’000
31 March
2023
£’000
Current liabilities
Interest bearing loans
–
–
–
–
–
–
Lease liabilities
1,842
(2,062)
–
1,462
–
1,242
Non-current liabilities
Interest bearing loans
128,226
(10,394)
8,611
(32)
–
126,411
Lease liabilities
1,529
–
26
(1,554)
523
524
Total liabilities arising from financing activities
131,597
(12,456)
8,637
(124)
523
128,177
Other movement in interest bearing loans represents amortisation of loan fees.
Other movement in lease liabilities includes interest, disposals and the reclassification of non-current lease liabilities to current lease liabilities.
Strategic Report
Governance
Financial Statements
Annual Report 2024
134
30. Share-based payments
The Group operates Executive Share Option Schemes under which Executive Directors,
managers and team members of the Company are granted options over shares. The charge
recognised from equity-settled share-based payments in respect of employee services received
during the year is £3,488,000 (2023: £2,313,000).
Executive Share Option Scheme
Options are granted to Executive Directors and employees on the basis of their performance.
Options are granted at the full market value of the Company’s shares at the time of grant and
are exercisable between three and ten years from the date of grant. The options vest on the
third anniversary of the grant subject to the Company’s earnings per share (‘EPS’) growth being
greater than the growth of the Retail Prices Index (‘RPI’) over a three-year period prior to the
vesting date. There are no cash settlement alternatives.
Share Matching Plan
In the year ended 31 March 2012, the Remuneration Committee introduced the Share Matching
Plan. Participants who invest a proportion of their annual cash bonus in GBG shares can receive
up to a multiple of their original investment in GBG shares, calculated on a pre-tax basis. Any
matching is conditional upon achieving pre-determined Adjusted EPS growth targets set by the
Remuneration Committee for the following three years. Share Matching Plan options will only
become exercisable to the extent they have vested in accordance with the Adjusted EPS target.
For Share Matching Plan awards granted after 31 March 2020, 75% of the awards are subject
to the Adjusted EPS growth targets. The remaining 25% are subject to a Total Shareholder
Return (‘TSR’) measure against the peer group (FTSE 250). 25% of the TSR element vests at the
median performance against the peer group and 100% of award vests at upper quartile, i.e. the
75th percentile.
GBG Sharesave Scheme
The Group has a savings-related share option plan, under which employees save on a monthly
basis, over a three- or five-year period, towards the purchase of shares at a fixed price
determined when the option is granted. This price is usually set at a 20% discount to the market
price at the time of grant. The option must be exercised within six months of maturity of the
savings contract, otherwise it lapses.
Performance Share Plan (‘PSP’)
The Group operates a PSP for all employees, but it is intended that awards are made to senior
management team members below the Executive Director level. The plan was approved at the
2018 AGM. Awards are subject to a three-year EPS performance condition. Employees can be
granted awards with an aggregate value on date of grant of up to 100% of base salary. The
awards are subject to malus and clawback.
In the year to 31 March 2023, the Remuneration Committee agreed to amend the PSP to allow
executive directors to participate in the Share Plan and as a result, the Company’s Share
Matching Plan will no longer be used. The plan was approved at the 2022 AGM. Executive
Directors can be granted awards of £nil cost options with an aggregate value on date of grant
of up to 225% of base salary (or 400% in exceptional circumstances). The awards are subject
to a two-year holding period from the date of vesting and malus and clawback.
For Performance Share Plan awards granted after 31 March 2020, 75% of the awards are
subject to the Adjusted EPS growth targets. The remaining 25% are subject to a TSR measure
against the peer group (FTSE 250). 25% of the TSR element vests at the median performance
against the peer group and 100% of award vests at upper quartile, i.e. the 75th percentile.
Restricted Share Plan (RSP)
In the year ended 31 March 2023, the Remuneration Committee introduced the RSP. The RSP’s
primary purpose is to incentivise and retain selected participants below Board level. The plan
was approved at the 2022 AGM. Awards are subject to a three-year period of service. Employees
can be granted awards with an aggregate value on date of grant of up to 100% of base salary.
The awards are subject to malus and clawback.
The following table illustrates the number and weighted average exercise prices (‘WAEP’) of, and
movements in, share options during the year.
2024
No.
2024
WAEP
2023
No.
2023
WAEP
Outstanding as at 1 April
6,304,260
101.03p
5,351,638
148.5p
Granted during the year
3,934,378
54.23p
3,331,870
83.64p
Forfeited during the year
(1,641,226)
35.74p
(1,123,447)
149.95p
Cancelled during the year
(463,413)
431.27p
(332,491)
554.15p
Exercised during the year
(391,108)
2.501
(923,310)
90.41p2
Outstanding at 31 March
7,742,891
76.30p
6,304,260
101.03p
Exercisable at 31 March
449,389
232.52p
321,299
206.35p
1. The weighted average share price at the date of exercise for the options exercised was 254.89p.
2. The weighted average share price at the date of exercise for the options exercised was 443.97p.
For the shares outstanding as at 31 March 2024, the weighted average remaining contractual life
is 6.6 years (2023: 6.3 years).
The weighted average fair value of options granted during the year was 177.20p (2023:
469.34p). The range of exercise prices for options outstanding at the end of the year was
2.5p-885.0p (2023: 2.5p-885.0p).
Notes to the consolidated financial statements continued
Strategic Report
Governance
Financial Statements
Annual Report 2024
135
Notes to the consolidated financial statements continued
30. Share-based payments continued
The fair value of equity-settled share options granted is estimated as at the date of grant using
a binomial model, taking into account the terms and conditions upon which the options were
granted. The following table lists the inputs to the model for the years ended 31 March 2024 and
31 March 2023.
2024
2023
Dividend yield (%)
1.4-1.8
0.3-0.8
Expected share price volatility (%)
47-49
30-46
Risk-free interest rate (%)
3.6-5.2
0.0-3.0
Lapse rate (%)
0-10.0
0-10.0
Expected exercise behaviour
See below
See below
Expected life of option (years)
1.0-5.1
1.0-5.1
Exercise price (p)
2.50-228.0
2.50-885.0
Weighted average share price (p)
254.89
443.97
Other than the Matching Scheme, PSP, RSP and Sharesave options, it is assumed that 50% of
options will be exercised by participants as soon as they are 20% or more ‘in-the-money’ (i.e.
120% of the exercise price) and the remaining 50% of options will be exercised gradually at the
rate of 10% per annum each year they remain at or above the 20% ‘in-the-money’.
For the Matching Scheme, PSP and Sharesave options, it is assumed these are exercised at the
earliest opportunity in full (i.e. vesting date) since the exercise price is a nominal amount and is
therefore not expected to influence the timing of a participant’s decision to exercise the options.
The expected volatility reflects the assumption that the historical volatility is indicative of future
trends, which may not necessarily be the actual outcome.
31. Description of reserves
Equity share capital
The balance classified as share capital includes the nominal value on issue of the Company’s
equity share capital, comprising 2.5p ordinary shares.
Share premium
The balance classified as share premium includes the excess proceeds over the nominal amount
received on the issue of the Company’s equity share capital. Costs associated with the issue of
new share capital have been offset against this balance.
Merger reserve
The balance on the merger reserve represents the fair value of the consideration given in excess
of the nominal value of the ordinary shares issued in the acquisition of GB Mailing Systems
Limited, Investigate 2020 Ltd, Acuant Intermediate Holding Corp and Verifi Identity Services
Limited by the issue of shares.
Capital redemption reserve
The balance classified as capital redemption reserve includes the nominal value of own shares
purchased back by the Company and subsequently cancelled.
Foreign currency translation reserve
The balance on the foreign currency translation reserve represents the accumulated balance
on the translation of foreign subsidiaries previously recognised through other comprehensive
income.
Treasury shares
The treasury share reserve represents the weighted average cost of the shares in GB Group
plc purchased in the open market and held by the GBG Employee Benefit Trust (EBT) to
satisfy existing share options under the Group’s long-term incentive plans. During the year, no
shares (2023: 607,333) were purchased by the EBT at an average price of £nil (2023: £4.12).
229,895 shares (2023: 346,394) with an attributable cost of £4.12 (2023: £4.12) were issued to
employees in satisfying share options that were exercised.
2024
£’000
2023
£’000
At 1 April
1,074
–
Own shares purchased
–
2,500
Shares issued to employees in satisfaction of share options
(947)
(1,426)
At 31 March
127
1,074
32. Related party transactions
Transactions between the Company and its subsidiaries, which are related parties, have been
eliminated on consolidation and are not disclosed in this note.
There were no other related party transactions entered into, or outstanding at 31 March 2024
or 31 March 2023.
Compensation of Key Management Personnel (including Directors)
2024
£’000
2023
£’000
Short-term employee benefits
2,754
1,828
Fair value of share options awarded
1,363
1,555
4,117
3,383
Strategic Report
Governance
Financial Statements
Annual Report 2024
136
33. Post balance sheet events
There are not considered to be any events after the balance sheet date which require disclosure
under IAS 10.
34. Contingent consideration
2024
£’000
2023
£’000
At 1 April
1,237
7,776
Remeasurement of contingent consideration
charged to profit or loss
20
806
Unwinding of discount
–
165
Release of contingent consideration
–
(2,753)
Foreign exchange – unrealised
(57)
234
Settlement of consideration
(1,200)
(4,991)
At 31 March
–
1,237
Analysed as:
Amounts falling due within 12 months
–
1,237
Amounts falling due after one year
–
–
At 31 March
–
1,237
The opening balance at 1 April 2022 included £3,842,000 related to the pre-acquisition tax
assets within IDology Inc. A value equivalent to the cash benefit GBG received for these assets
was payable to the sellers once the cash benefit had been received by GBG. In December 2022,
IDology received the cash refund which was subsequently paid to the sellers. There are no
further payments due in respect of the IDology acquisition.
The remaining contingent consideration was in respect of the acquisition of Cloudcheck during
the year ended 31 March 2022. In July 2023, a payment was made based on performance in
the first of two earn-out periods. Based on actual performance during the year, it has been
determined that the remaining performance criteria has not been met and so there are no further
payments due in respect of the Cloudcheck acquisition.
The fair value of contingent consideration is estimated having been determined from
management’s estimates of the range of outcomes to certain future forecasts and their
estimated respective likelihoods. The contractual cash flows are therefore based on future
trading activity, which is estimated based on latest forecasts (Level 3 as defined by IFRS 13 –
see note 28).
Notes to the consolidated financial statements continued
Strategic Report
Governance
Financial Statements
Annual Report 2024
137
Company balance sheet
As at 31 March 2024
Note
2024
£’000
Restated1
2023
£’000
ASSETS
Non-current assets
Goodwill
C6
99,858
99,858
Other intangible assets
C7
10,167
14,138
Property, plant and equipment
C8
573
2,163
Right-of-use assets
C9
831
440
Investments
C10
570,215
629,486
Intercompany loans
C17
2,486
–
Deferred tax asset
C11
549
634
684,679
746,719
Current assets
Inventories
200
217
Trade and other receivables
C12
34,405
30,356
Current tax
1,586
–
Cash and short-term deposits
C13
5,740
8,997
41,931
39,570
Total assets
726,610
786,289
Capital and reserves
Equity share capital
C14
6,315
6,311
Share premium
C16
567,581
567,581
Merger reserve
C16
99,999
99,999
Capital redemption reserve
C16
3
3
Other reserves
C16
4,489
4,489
(Accumulated losses)/retained earnings
C16
(34,940)
20,340
Total equity attributable to equity holders
of the Parent
643,447
698,723
Note
2024
£’000
Restated1
2023
£’000
EQUITY and LIABILITIES
Non-current liabilities
Loans and borrowings
C17
–
5,941
Intercompany loans
C17
18,821
19,746
Lease liabilities
C18
437
87
Deferred revenue
783
540
Provisions
C19
613
638
Deferred tax
C11
1,306
2,530
21,960
29,482
Current liabilities
Trade and other payables
C20
26,215
21,449
Deferred revenue
34,528
34,575
Lease liabilities
C18
460
515
Contingent consideration
C22
–
–
Current tax
–
1,545
61,203
58,084
Total liabilities
83,163
87,566
Total equity and liabilities
726,610
786,289
During the year the Company made a loss of £47,142,000 (2023 restated: loss of £104,014,000).
1. See note C2.2 of the company accounts for details of the restatement.
The financial statements on pages 138 to 148 were approved by the Board of DIrectors on
10 June 2024 and signed on its behalf.
D Dhiman
D M Ward
Director
Director
Registered in England number 2415211
Strategic Report
Governance
Financial Statements
Annual Report 2024
138
Note
Equity
share
capital
£’000
Share
premium
£’000
Merger
reserve
£’000
Capital
redemption
reserve
£’000
Other
reserves
£’000
Restated
Retained
earnings/
(accumulated
losses)
£’000
Restated
Total
equity
£’000
Balance at 1 April 2022
6,297
566,769
99,999
3
4,489
130,938
808,495
Profit for the period
–
–
–
–
–
3,663
3,663
Other comprehensive income
–
–
–
–
–
700
700
Total comprehensive expense for the period
–
–
–
–
–
4,363
4,363
Issue of share capital
C14
14
812
–
–
–
–
826
Share-based payments charge
–
–
–
–
–
2,313
2,313
Tax on share options
–
–
–
–
–
(143)
(143)
Share forfeiture receipt
C14
–
–
–
–
–
146
146
Equity dividend
C15
–
–
–
–
–
(9,600)
(9,600)
Balance at 31 March 2023 (as reported)
6,311
567,581
99,999
3
4,489
128,017
806,400
Prior year adjustment1
C2.2
–
–
–
–
–
(107,677)
(107,677)
Balance at 31 March 2023 (after prior year adjustment)
6,311
567,581
99,999
3
4,489
20,340
698,723
Loss for the period
–
–
–
–
–
(47,142)
(47,142)
Other comprehensive expense
–
–
–
–
–
(1,600)
(1,600)
Total comprehensive expense for the period
–
–
–
–
–
(48,742)
(48,742)
Issue of share capital
C14
4
–
–
–
–
–
4
Share-based payments charge
–
–
–
–
–
3,488
3,488
Tax on share options
C11
–
–
–
–
–
104
104
Net share forfeiture refund
C14
–
–
–
–
–
(37)
(37)
Equity dividend
C15
–
–
–
–
–
(10,093)
(10,093)
Balance at 31 March 2024
6,315
567,581
99,999
3
4,489
(34,940)
643,447
1 See note C2.2 of the company accounts for details of the restatement.
Company statement of changes in equity
Year ended 31 March 2024
Strategic Report
Governance
Financial Statements
Annual Report 2024
139
As the Consolidated Financial Statements of the Group include the equivalent disclosures,
the Company has also taken the exemptions under FRS 101 available in respect of the
following disclosures:
• Certain disclosures required by IAS 36 – Impairment of assets in respect of the impairment
of goodwill and indefinite life intangible assets;
• Certain disclosures required by IFRS 15 – Revenue from contracts with customers in respect
of disaggregation of revenue and performance obligations;
• Certain disclosures required by IFRS 2 – Shared-based payments in respect of equity settled
share-based payments;
• Certain disclosures required by IFRS 3 – Business combinations in respect of business
combinations undertaken by the Company; and
• Certain disclosures required by IFRS 13 – Fair value measurement and the disclosures required
by IFRS 7 – Financial Instrument Disclosures.
The Company financial statements have been prepared under the historical cost convention,
modified in respect of the revaluation of financial assets and liabilities at fair value and are
presented in pounds Sterling and all values are rounded to the nearest thousand pounds (£’000)
except where otherwise indicated. As disclosed in the accounting policies in note 2 of the
consolidated financial statements, they have been prepared on a going concern basis under the
historical cost convention, modified in respect of the revaluation of financial assets and liabilities
at fair value.
C2.2 Significant accounting policies
The significant accounting policies adopted are the same as those set out in note 2 to the
consolidated financial statements with the exception of:
Investment in subsidiaries
Investments in subsidiaries are held at cost, less provision for impairment. Annually, the
Directors consider whether any events or circumstances have occurred that could indicate
that the carrying amount of the investment may not be recoverable. If such circumstances do
exist, a full impairment review is undertaken to establish whether the carrying amount exceeds
the higher of fair value less costs of disposal or value-in-use. If this is the case, an impairment
charge is recorded to reduce the carrying amount of the related investment.
The accounting policies have been applied consistently throughout the year.
C1. Corporate information
GB Group plc (‘the Company’) provides identity data intelligence products and services helping
organisations recognise and verify all elements of an individual’s identity at key interactions in
their business processes. The nature of the Company’s operations and its principal activities are
set out in the Financial Review.
The Company is a public company limited by shares incorporated in the United Kingdom and
is listed on the London Stock Exchange with its ordinary shares traded on the Alternative
Investment Market. The Company registration number is 02415211. The address of its registered
office is The Foundation, Herons Way, Chester Business Park, Chester, CH4 9GB. A list of the
investments in subsidiaries, including the name, country of incorporation, registered office
address and proportion of ownership interest is given in note 19.
These parent company financial statements have been approved for issue by the Board of
Directors on 10 June 2024.
The Company’s financial statements are included in the consolidated financial statements of
GB Group plc. As permitted by section 408 of the Companies Act 2006, the profit and loss
account of the Company is not presented.
C2. Accounting policies
C2.1 Basis of preparation
The separate financial statements of the Parent Company have been prepared in accordance
with Financial Reporting Standard 101 Reduced Disclosure Framework (‘FRS 101’) and in
accordance with applicable accounting standards. In preparing these financial statements, the
Company applies the recognition, measurement and disclosure requirements of UK-adopted
international accounting standards, as applied in accordance with the provisions of the
Companies Act 2006 (‘Adopted IFRSs’) with the exception of applying the true and fair override
with regards to the non-amortisation of goodwill as required by IFRS 3. See note C6 for details
of the impact of this departure. The Company has taken advantage of the following disclosure
exemptions:
In these financial statements, the Company has applied the exemptions available under FRS 101
in respect of the following disclosures:
• Certain disclosures required by IAS 7 - Statement of cash flows in respect of preparing a Cash
Flow Statement and related notes;
• Certain disclosures required by IFRS 18 - Presentation and disclosure in financial statements in
respect of comparative period reconciliations for share capital, tangible assets and intangible
assets;
• Certain disclosures required by IAS 24 - Related party disclosures in respect of transactions
with wholly owned subsidiaries;
• Certain disclosures required by IFRS 7 - Financial instruments: disclosure in respect of
disclosures in respect of capital management;
• Certain disclosures required by IAS 8 - IFRSs issued but not effective in respect of the effects
of new but not yet effective IFRSs; and
• Certain disclosures required by IAS 24 - Related party disclosures in respect of disclosures of
the compensation of Key Management Personnel.
Notes to the Company accounts
Strategic Report
Governance
Financial Statements
Annual Report 2024
140
As noted in note 16 to the consolidated financial statements, as a result of increased discount
rate assumptions used in the value-in-use calculations, driven by increases in underlying
risk-free rates, there was considered to be potential indicator of impairment for our Identity –
Americas group of CGUs at the balance sheet date. Since these cash flows form part of the
Company’s investment in GBG (US) Holdings LLC, this was considered to be a potential indicator
of impairment. There was not considered to be any impairment indicators at the balance sheet
date for any other investments in subsidiary undertakings.
The key assumptions used in this assessment are set out in note 16 to the consolidated accounts
which resulted in an impairment charge of £67,936,000 being recognised within exceptional
items in the Company income statement (see note C10). Any additional adverse movements in the
key assumptions at the balance sheet date could lead to a further impairment of investments.
Applying the same changes in key assumptions from note 16 to create a sensitised scenario
would lead to impairment of £162,260,000.
For details of other judgements and key sources of estimation uncertainty in the preparation
of the Company’s financial statements, see pages 106 to 107 in the Group financial statements.
The following are relevant to the Company: impairment of goodwill, allowance for impairment
losses on credit exposures, revenue recognition and deferred tax assets.
C3. Profit attributable to members of the Parent Company
The Company’s loss for the financial year ended 31 March 2024 was £47,142,000 (2023
(restated): loss of £104,014,000). As permitted by Section 408 of Companies Act 2006, the
profit and loss account of the Parent Company is not presented.
The year to 31 March 2023 has been restated for an increase in impairment charge to investment
in subsidiary undertakings as set out in note C2.2 of the company accounts.
C4. Auditors’ remuneration
Fees payable to the Company’s auditor for the audit of the Company and Group financial
statements are disclosed in note 6 of the Consolidated Financial Statements for the Group.
C2. Accounting policies continued
C2.2 Significant accounting policies continued
Prior year restatement
Impairment of investment in subsidiary undertakings
The Group has identified that the impairment assessment for the Company’s investment in
GBG (US) Holdings LLC at 31 March 2023 incorrectly excluded the fair value of cash flows
associated with external and intercompany loans held within this subsidiary. As a result,
the prior year impairment charge in respect of the investment in GBG (US) Holdings LLC has
been increased from £5,685,000 to £113,362,000 in the year ended 31 March 2023. The
restatement reduced reported profit and investments of the Company in the year ended 31
March 2023 by £107,677,000.
The above prior period misstatement came to the Company’s attention when responding to an
enquiry from the Corporate Reporting Review team at the Financial Reporting Council (FRC).
In common with other large public limited companies, the FRC carried out a review of GBG’s
FY23 Annual Report and Accounts in accordance with Part 2 of the FRC Corporate Reporting
Review Operating Procedures. The FRC has asked that in disclosing this engagement we note
the limitations of its review, namely that it was based solely on its reading of the Annual Report
and Accounts and did not benefit from a detailed knowledge of our business or an understanding
of the underlying transactions entered into. It also noted that its review provided no assurance
that the Annual Report and Accounts are correct in all material respects and that the FRC’s role
is not to verify the information provided but to consider compliance with reporting requirements.
C2.3 Judgements and key sources of estimation uncertainty
The preparation of financial statements in conformity with FRS 101 requires the use of certain
critical accounting estimates. It also requires management to exercise their judgement in the
process of applying the Company’s accounting policies. The areas involving a higher degree
of judgement or complexity, or areas where assumptions and estimates are significant to the
financial statements are the same for the Company as they are for the Group with the exception
of the following:
Impairment of investments in subsidiary undertakings
The Company tests for impairment of investments where there are indicators that the carrying
value exceeds the recoverable value.
GBG’s forecasting process is prepared at a cash-generating unit (referred to internally as
business units) level rather than for specific legal entities. These business units are combined in
accordance with IAS 36 to form the groups of CGUs that are assessed for goodwill and intangible
asset impairment testing purposes as set out under note 16 to the consolidated accounts.
It is therefore necessary to disaggregate these business unit forecasts when considering
impairment on a legal entity basis, but the underlying cash flows used are the same. The
exception to this is that the fair value of external and intercompany loans held in a subsidiary
are deducted from the present value of cash flows that are available for payment as dividends.
Notes to the Company accounts continued
Strategic Report
Governance
Financial Statements
Annual Report 2024
141
Notes to the Company accounts continued
C6. Goodwill
2024
£’000
2023
£’000
Cost
At 1 April
105,970
105,970
At 31 March
105,970
105,970
Accumulated impairment
At 1 April
6,112
6,112
At 31 March
6,112
6,112
Net book value
At 31 March
99,858
99,858
Goodwill arose on the acquisition of ID Scan Biometrics Limited, Postcode Anywhere (Holdings)
Limited and Investigate 2020 Ltd. Under FRS 101 goodwill is not amortised and is tested annually
for impairment. The non-amortisation of goodwill conflicts with paragraph 22 of Schedule 1 to
‘The Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008
(SI 2008/410), which requires acquired goodwill to be written off over its useful economic life. As
such, the non-amortisation of goodwill is a departure, for the overriding purpose of giving a true
and fair view, from the requirement of paragraph 22 of Schedule 1 to the Regulations.
C5. Team member costs and Directors’ emoluments
a) Team member costs (including Directors)
2024
£’000
2023
£’000
Wages and salaries including commission and bonuses
41,962
42,506
Social security costs
5,482
5,530
Other pension costs
1,745
1,861
Share-based payments
2,675
1,139
51,864
51,036
The average monthly number of team members during the year within each category was
as follows:
2024
No.
2023
No.
Sales and marketing
286
312
Technology
150
171
General and administration
122
129
558
612
b) Directors’ Emoluments
The remuneration of Executive Directors for both the Company and the Group are disclosed
in note 8 of the Consolidated Financial Statements for the Group.
Strategic Report
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Financial Statements
Annual Report 2024
142
C7. Other intangible assets
Customer
relationships
£’000
Software
technology
£’000
Non-compete
clauses
£’000
Total
acquired
intangibles
£’000
Purchased
software
£’000
Internally
developed
software
£’000
Total
£’000
Cost
At 1 April 2023
26,024
12,438
645
39,107
397
1,107
40,611
Disposals
–
–
(645)
(645)
–
–
(645)
At 31 March 2024
26,024
12,438
–
38,462
397
1,107
39,966
Accumulated amortisation and impairment
At 1 April 2023
14,598
9,897
484
24,979
387
1,107
26,473
Amortisation during the year
2,878
924
161
3,963
8
–
3,971
Disposals
–
–
(645)
(645)
–
–
(645)
At 31 March 2024
17,476
10,821
–
28,297
395
1,107
29,799
Net book value
At 31 March 2024
8,548
1,617
–
10,165
2
–
10,167
At 1 April 2023
11,426
2,541
161
14,128
10
–
14,138
2024
Carrying value
of customer
relationship
£’000
Remaining
amortisation
period
Years
Carrying
value of
technology
£’000
Remaining
amortisation
period
Years
ID Scan Biometrics Limited
881
2.25
–
–
Postcode Anywhere (Holdings) Limited
7,667
3.08
–
–
Investigate 2020 Ltd
–
–
1,617
1.75
8,548
1,617
Notes to the Company accounts continued
Strategic Report
Governance
Financial Statements
Annual Report 2024
143
Notes to the Company accounts continued
C10. Investments
2024
£’000
Restated4
2023
£’000
At 1 April
745,312
714,367
Capital contribution to subsidiary undertakings1
10,265
283,364
Transfer of subsidiary undertakings
–
(246,146)
Subscription to new shares in subsidiary undertakings
–
7,824
Dividends received from subsidiary undertakings
–
(6,973)
Changes in fair value recognised in OCI2
(1,600)
700
Disposal
–
(7,824)
At 31 March
753,977
745,312
Provision for impairment
At 1 April
115,826
2,464
Charge for the year3 4
67,936
121,186
Disposal
–
(7,824)
At 31 March
183,762
115,826
Net book value
At 31 March
570,215
629,486
The above balance is split between investments held at fair value through other comprehensive
income of £1,388,000 (2023: £2,988,000) and cost less provision for impairment of
£568,827,000 (2023 (restated): £626,498,000).
During the current year:
1. An intercompany loan with GBG (US) Holdings LLC was settled through a capital contribution of £10,265,000.
2. A £1,600,000 loss on investments was recognised in OCI due to the fair value assessment of the investment in CredoLab.
Pte Ltd. See note 19 of the Consolidated Financial Statements for the Group for more details.
3. An impairment charge of £67,936,000 was recognised in respect of the investment in GBG (US) Holdings LLC.
4. The prior year has been restated for an increase in the impairment charge in respect of the investment in GBG (US) Holdings
LLC as set out in note C2.2 of the company accounts.
Details of the Company’s subsidiary undertakings are set out in note 19 of the Consolidated
Financial Statements for the Group.
C8. Property, plant and equipment
Property
£’000
Plant and
equipment
£’000
Total
£’000
Cost
At 1 April 2023
1,233
5,871
7,104
Additions
–
196
196
Disposals
(1,233)
(3,341)
(4,574)
At 31 March 2024
–
2,726
2,726
Accumulated depreciation and impairment
At 1 April 2023
92
4,849
4,941
Provided during the year
17
541
558
Disposals
(109)
(3,237)
(3,346)
At 31 March 2024
–
2,153
2,153
Net book value
At 31 March 2024
–
573
573
At 31 March 2023
1,141
1,022
2,163
C9. Right-of-use assets
£’000
Cost
At 1 April 2023
3,273
Additions
897
Disposals
(1,559)
At 31 March 2024
2,611
Accumulated depreciation and impairment
At 1 April 2023
2,833
Provided during the year
476
Disposals
(1,529)
At 31 March 2024
1,780
Net book value
At 31 March 2024
831
At 31 March 2023
440
The underlying class of assets and their net book values all relate to leasehold property.
Strategic Report
Governance
Financial Statements
Annual Report 2024
144
Deferred tax liability
The deferred tax liability of the Company is as follows:
2024
£’000
2023
£’000
Intangible assets
2,541
3,532
Land and buildings
–
131
2,541
3,663
The movement on the deferred tax liability of the Company, before offset of balances,
is as follows:
2024
£’000
2023
£’000
Opening balance
3,663
4,449
Origination and reversal of temporary differences - credited
to income statement
(1,122)
(786)
2,541
3,663
Analysed in the balance sheet, after offset of balances as:
2024
£’000
2023
£’000
Deferred tax asset
Pre-offset of balances
1,784
1,767
Offset of balances within countries
(1,235)
(1,133)
549
634
2024
£’000
2023
£’000
Deferred tax liability
Pre-offset of balances
2,541
3,663
Offset of balances within countries
(1,235)
(1,133)
1,306
2,530
C11. Taxation
a) Deferred tax
Deferred tax asset
The recognised and unrecognised potential deferred tax asset of the Company is as follows:
Recognised
Unrecognised
2024
£’000
2023
£’000
2024
£’000
2023
£’000
Decelerated capital
allowances
284
313
1,327
1,327
Share options
859
729
–
–
Long-service award
92
96
–
–
Other temporary
differences
–
(4)
–
–
Capital losses
–
–
479
564
Trading losses
549
633
2,581
2,643
1,784
1,767
4,387
4,534
The movement on the deferred tax asset of the Company, before offset of balances,
is as follows:
2024
£’000
2023
£’000
Opening balance
1,767
2,562
Impact of changes in tax
–
(47)
Origination and reversal of temporary differences - charged
to income statement
(87)
(605)
Origination and reversal of temporary differences - credited/
(charged) to equity
104
(143)
1,784
1,767
The deferred tax asset has been recognised to the extent it is anticipated to be recoverable
out of future taxable profits based on profit forecasts for the foreseeable future. The utilisation
of the unrecognised deferred tax asset in future periods will reduce the future tax rate below
the standard rate. The Company has unrecognised trading losses of £10,325,000 (2023:
£10,571,000) and unrecognised capital losses of £1,915,000 (2023: £2,257,000). The Company
also has unrecognised deductible temporary differences of £5,309,000 (2023: £5,309,000).
Notes to the Company accounts continued
Strategic Report
Governance
Financial Statements
Annual Report 2024
145
Notes to the Company accounts continued
C16. Description of reserves
Equity share capital
The balance classified as share capital includes the nominal value on issue of the Company’s
equity share capital, comprising 2.5p ordinary shares.
Share premium
The balance classified as share premium includes the excess proceeds over the nominal amount
received on the issue of the Company’s equity share capital. Costs associated with the issue of
new share capital have been offset against this balance.
Merger reserve
The balance on the merger reserve represents the fair value of the consideration given in excess
of the nominal value of the ordinary shares issued in the acquisition of GB Mailing Systems
Limited, Investigate 2020 Ltd, Acuant Intermediate Holding Corp and Verifi Identity Services
Limited by the issue of shares.
The Company has assessed that £86,739,000 of Merger Reserve recognised upon the
acquisition of Acuant Intermediate Holding Corp is considered to be a realised profit, as a
realised loss has been recognised on the impairment of the related asset – being the investment
in GBG (US) Holdings LLC.
Capital redemption reserve
The balance classified as capital redemption reserve includes the nominal value of own shares
purchased back by the Company and subsequently cancelled.
Other reserves
The balance represents the profit from the date of acquisition to the date of hive-up into the
Company of ID Scan Biometrics Limited and Postcode Anywhere (Holdings) Limited, offset by
amortisation of the identified intangibles and unwinding of the associated deferred tax liabilities.
C12. Trade and other receivables
2024
£’000
2023
£’000
Trade receivables
28,085
25,210
Allowance for unrecoverable amounts
(1,170)
(1,002)
Net trade receivables
26,915
24,208
Prepayments
7,038
5,686
Accrued income
452
462
34,405
30,356
C13. Cash and cash equivalents
2024
£’000
2023
£’000
Cash at bank and in hand
5,740
8,997
Cash at bank earns interest at floating rates based on daily bank deposit rates.
C14. Equity share capital
Issued Ordinary Share Capital for both the Company and Group is disclosed in note 23 of the
Consolidated Financial Statements for the Group.
C15. Dividends paid and proposed
2024
£’000
2023
£’000
Declared and paid during the year
Final dividend for 2023 paid in July 2023: 4.00p (final
dividend for 2022 paid in July 2022: 3.81p)
10,093
9,600
Proposed for approval at AGM
(not recognised as a liability at 31 March)
Final dividend for 2024: 4.20p (2023: 4.00p)
10,609
10,098
Strategic Report
Governance
Financial Statements
Annual Report 2024
146
Intercompany loans
2024
£’000
2023
£’000
Opening intercompany loans payable
19,746
541
Increase/(decrease) in borrowings
(925)
19,205
Closing intercompany loans payable
18,821
19,746
Opening intercompany loans receivable
–
–
Increase/(decrease) in borrowings
2,486
–
Closing intercompany loans receivable
2,486
–
Net intercompany loans
16,335
19,746
Analysed as:
Amounts falling due within one year
–
–
Amounts falling due within one to five years
16,335
19,746
16,335
19,746
Interest is charged on intercompany loans at a rate of between 7.09% and 7.59% per annum.
The loans are unsecured, and repayable within two years.
C18. Lease liabilities
2024
£’000
2023
£’000
At 1 April
602
1,273
Additions
1,042
–
Disposals
(174)
–
Accretion of interest
29
31
Payments
(602)
(702)
At 31 March
897
602
Analysed as:
Amounts falling due within one year
460
515
Amounts falling due within one to five years
437
87
897
602
C17. Loans and borrowings
Bank loans
The details of the Group revolving credit facility are set out in note 24 in the Consolidated
Financial Statements for the Group.
During the year to 31 March 2024, the Company drew down £10,000,000 and made repayments
of £17,000,000 within the Group revolving credit facility. The outstanding balance on the loan
facility at 31 March 2024 attributable to the Company was £nil (2023: £7,000,000).
The loan arrangement fees on the revolving credit facility have been reclassified to prepayments
due to the loan value being £nil at 31 March 2024 within the Company and the net position was
therefore an asset rather than a liability.
As disclosed in note 24 in the Consolidated Financial Statements for the Group, the facility
was due to expire in July 2026 but on 27 October 2023, the Group exercised the second of the
one-year extension options and a further arrangement fee of £286,000 was payable for this
extension by the Company.
2024
£’000
2023
£’000
Opening bank loan
5,941
–
New borrowings
10,000
12,000
Repayment of borrowings
(17,000)
(5,000)
Agency fee paid
(56)
–
Loan fees paid for extension
(286)
(358)
Amortisation of loan fees
341
327
Reclassification of loan fees to/(from) prepayments
1,060
(1,028)
Closing bank loan
–
5,941
Analysed as:
Amounts falling due within one year
–
–
Amounts falling due within one to five years
–
5,941
Amounts falling due in more than five years
–
–
–
5,941
Analysed as:
Bank loans
–
7,000
Unamortised loan fees
–
(1,059)
–
5,941
Notes to the Company accounts continued
Strategic Report
Governance
Financial Statements
Annual Report 2024
147
Notes to the Company accounts continued
C20. Trade and other payables
2024
£’000
2023
£’000
Trade payables
5,886
6,140
Amounts owed to subsidiary undertakings
2,693
632
Other taxes and social security costs
3,175
2,636
Accruals
14,461
12,041
26,215
21,449
Amounts owed to subsidiary undertakings are non-interest bearing and are normally settled on
terms between 30 and 60 days.
C21. Subsequent events
Subsequent events that require disclosure after 31 March 2024 are set out in note 33 in the
Consolidated Financial Statements for the Group.
C22. Contingent consideration
2024
£’000
2023
£’000
At 1 April
–
3,842
Remeasurement of contingent consideration
charged to profit or loss
–
806
Foreign exchange – unrealised
–
343
Settlement of consideration
–
(4,991)
At 31 March
–
–
Analysed as:
Amounts falling due within 12 months
–
–
Amounts falling due after one year
–
–
At 31 March
–
–
C19. Provisions
2024
£’000
2023
£’000
Provisions can be analysed as follows:
Dilapidation provision (see below)
244
295
Long-service award (see below)
369
343
613
638
Dilapidation provision
At 1 April
295
295
Utilised in year
(51)
–
Closing balance
244
295
This provision relates to the estimated cost of restoration work required upon termination of
leasehold property agreements. The main uncertainty relates to estimating the cost that will
be incurred at the end of the lease. The timing of the outflows is not expected to occur in the
following 12 months and as such has been disclosed as a non-current liability. The Company
does not expect the final payments to differ materially from those amounts provided.
Long-service award
The Group provides long-service awards, providing employees with a benefit after they attain
a set period of service with the Group, for example 10 or 20 years. For these benefits, IAS 19
requires a liability to be held on the Group’s balance sheet.
2024
£’000
2023
£’000
At 1 April
343
388
Service cost
123
44
Benefits taken
(51)
(40)
Actuarial gain during the year
(63)
(59)
Net interest charge
17
10
At 31 March
369
343
The following table lists the inputs to the valuation of the long-service award for the years ended
31 March 2024 and 31 March 2023.
2024
2023
Discount rate (%)
4.7
4.8
Salary increases (%)
3.5
3.8
Employee turnover (% probability of leaving depending on age)
3-46%
2-23%
Strategic Report
Governance
Financial Statements
Annual Report 2024
148
Non-GAAP measures
Constant currency
Constant currency means that non-Pound Sterling revenue in the comparative period is
translated at the same exchange rate applied to the current year non-Pound Sterling revenue.
This therefore eliminates the impact of fluctuations in exchange rates on underlying performance
and enables measurement of performance on a comparable year-on-year basis without the
impact of foreign exchange movements.
2024
Location
£’000
Identity
£’000
Fraud
£’000
Total
£’000
Revenue
81,066
156,061
40,198
277,325
Constant currency adjustment
–
–
–
–
Revenue at constant currency
81,066
156,061
40,198
277,325
2023
Location
£’000
Identity
£’000
Fraud
£’000
Total
£’000
Revenue
76,890
162,729
39,191
278,810
Constant currency adjustment
(1,321)
(5,547)
(1,890)
(8,758)
Revenue at constant currency
75,569
157,182
37,301
270,052
Growth
Location
%
Identity
%
Fraud
%
Total
%
Revenue
5.4%
(4.1%)
2.6%
(0.5%)
Constant currency adjustment
1.9%
3.4%
5.2%
3.2%
Revenue at constant currency
7.3%
(0.7%)
7.8%
2.7%
Normalised items
These are recurring items which management considers could affect the underlying results of
the Group.
These include:
• amortisation of acquired intangibles; and
• share-based payment charges
Normalised items are excluded from statutory measures to determine adjusted results.
Alternative performance measures
Management assess the performance of the Group using a variety of alternative performance
measures. In the discussion of the Group’s reported operating results, alternative performance
measures are presented to provide readers with additional financial information that is regularly
reviewed by management. However, this additional information presented is not uniformly
defined by all companies including those in the Group’s industry. Accordingly, it may not be
comparable with similarly titled measures and disclosures by other companies. Additionally,
certain information presented is derived from amounts calculated in accordance with IFRS but
is not itself an expressly permitted GAAP measure. Such measures are not defined under IFRS
and are therefore termed ‘non-GAAP’ measures. These non-GAAP measures are not considered
to be a substitute for or superior to IFRS measures and should not be viewed in isolation or as an
alternative to the equivalent GAAP measure.
The Group’s consolidated statement of profit or loss and segmental analysis separately identify
trading results before certain items. The Directors believe that presentation of the Group’s
results in this way is relevant to an understanding of the Group’s financial performance, as such
items are identified by virtue of their size, nature or incidence. This presentation is consistent
with the way that financial performance is measured by management and reported to the Board
and assists in providing a meaningful analysis of the trading results of the Group. In determining
whether an event or transaction is presented separately, management considers quantitative
as well as qualitative factors such as the frequency or predictability of occurrence. Examples
of charges or credits meeting the above definition, and which have been presented separately
in the current and/or prior years include amortisation of acquired intangibles, share-based
payments charges, acquisition-related costs and business restructuring programmes. In the
event that other items meet the criteria, which are applied consistently from year to year, they
are also presented separately.
In respect of revenue performance measures, the primary measure is revenue growth at constant
currency.
Where the current or prior year revenue has been impacted either by acquisitions/disposal
or significant non-repeating revenue, alternative measures are presented to provide a more
reflective method to compare performance from one period to another.
Organic revenue growth is used to remove the revenue from businesses acquired or disposed
within the previous 12 months. Organic growth is defined by the Group as year-on-year
continuing revenue growth, excluding acquisitions which are included only after the first
anniversary following their purchase and disposed businesses.
Pro forma revenue growth is used to remove the impact of material non-repeating revenue. For
example, in the year to 31 March 2023 pro forma revenue was presented to remove revenue from
the US Government’s stimulus programme and exceptional cryptocurrency volume that arose
during the year to 31 March 2022.
The following are the key non-GAAP measures used by the Group:
Strategic Report
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Financial Statements
Annual Report 2024
149
Non-GAAP measures continued
Cash conversion %
This is calculated as cash generated from operations in the consolidated cash flow statement,
adjusted to exclude cash payments in the year for exceptional items, as a percentage of
adjusted operating profit. This measures how efficiently the Group’s operating profit is
converted into cash.
2024
£’000
2023
£’000
Cash generated from operations before tax payments
(from consolidated cash flow statement)
53,673
38,570
Opening unpaid exceptional items
1,251
1,372
Total exceptional items
59,613
127,175
Non-cash exceptional items
(55,836)
(123,362)
Closing unpaid exceptional items
(904)
(1,251)
Cash outflow for exceptional items
4,124
4,474
Cash generated from operations before tax payments
and exceptional items paid
57,797
42,504
Adjusted EBITDA
63,823
63,147
Cash conversion %
90.6%
67.3%
Adjusted EBITDA
Adjusted EBITDA means adjusted operating profit before depreciation and amortisation of non-
acquired intangibles. Adjusted EBITDA is a measure of the underlying cash generation and the
profit measure used in our covenant compliance calculations under the RCF agreement.
2024
£’000
2023
£’000
Adjusted operating profit
61,197
59,817
Depreciation of property, plant and equipment
1,306
1,771
Depreciation of right-of-use assets
1,155
1,491
Amortisation of non-acquired intangibles
165
68
Adjusted EBITDA
63,823
63,147
Alternative performance measures continued
Adjusted operating profit
Adjusted operating profit means operating profit before exceptional items and normalised items.
Adjusted results allow for the comparison of results year-on-year without the potential impact
of significant one-off items or items which do not relate to the underlying performance of the
Group. Adjusted operating profit is a measure of the underlying profitability of the Group.
2024
£’000
2023
£’000
Operating loss
(41,351)
(112,429)
Amortisation of acquired intangibles
39,447
42,758
Share-based payment charges
3,488
2,313
Exceptional items
59,613
127,175
Adjusted operating profit
61,197
59,817
Adjusted operating profit margin
Adjusted operating profit margin is calculated as adjusted operating profit as a percentage
of revenue.
Adjusted operating expenses
Adjusted operating expenses means reported operating profit before exceptional items and
normalised items. Adjusted operating expenses allow for the comparison of results year-on-
year without the potential impact of significant one-off items or items which do not relate to the
underlying operating expenses of the Group. Adjusted operating expenses is a measure of the
underlying operating expenses of the Group.
2024
£’000
2023
£’000
Reported operating expenses
234,934
313,481
Amortisation of acquired intangibles
(39,447)
(42,758)
Share-based payments
(3,488)
(2,313)
Impairment of goodwill
(54,707)
(122,225)
Other exceptional items
(4,906)
(4,950)
Adjusted operating expenses
132,386
141,235
Strategic Report
Governance
Financial Statements
Annual Report 2024
150
Alternative performance measures continued
Adjusted tax
Adjusted tax means income tax charge before the tax impact of amortisation of acquired intangibles, share-based payment charges and exceptional items. This provides an indication of the ongoing
tax rate across the Group.
Adjusted effective tax rate
The adjusted effective tax rate means adjusted tax divided by adjusted earnings.
2024
2023
Loss
before tax
£’000
Income
tax charge
£’000
Effective
tax rate
%
Loss
before tax
£’000
Income
tax charge
£’000
Effective
tax rate
%
Reported effective tax rate
(50,386)
(1,803)
3.6%
(118,830)
964
(0.8%)
Add back:
Amortisation of acquired intangibles
39,447
13,391
(109.5%)
42,758
9,463
(12.9%)
Equity-settled share-based payments
3,488
409
(55.1%)
2,313
10
(0.5%)
Exceptional items
59,613
1,158
186.2%
127,175
917
35.5%
Adjusted effective tax rate
52,162
13,155
25.2%
53,416
11,354
21.3%
Adjusted earnings per share (‘Adjusted EPS’)
Adjusted EPS represents adjusted earnings divided by a weighted average number of shares in issue and is disclosed to indicate the underlying profitability of the Group. Adjusted EPS is a measure of
underlying earnings per share for the Group. Adjusted earnings represents adjusted operating profit less net finance costs and income tax charges. Refer to note 13 for calculation.
Non-GAAP measures continued
Strategic Report
Governance
Financial Statements
Annual Report 2024
151
Non-GAAP measures continued
Alternative performance measures continued
Net (debt)/cash
This is calculated as cash and cash equivalent balances less outstanding external loans.
Unamortised loan arrangement fees are netted against the loan balance in the financial
statements but are excluded from the calculation of net cash/debt. Lease liabilities following the
implementation of IFRS 16 are also excluded from the calculation of net cash/debt since they are
not considered to be indicative of how the Group finances the business. This is a measure of the
strength of the Group’s balance sheet.
2024
£’000
2023
£’000
Cash and cash equivalents
21,321
21,552
Loans on balance sheet
101,115
126,411
Unamortised loan arrangement fees
1,060
1,059
External loans
102,175
127,470
Net debt
(80,854)
(105,918)
Debt leverage
This is calculated as the ratio of net (debt)/cash to adjusted EBITDA. This demonstrates the
Group’s liquidity and its ability to pay off its incurred debt.
2024
£’000
2023
£’000
Net debt
(80,854)
(105,918)
Adjusted EBITDA
63,823
63,147
Debt leverage
1.27
1.68
Strategic Report
Governance
Financial Statements
Annual Report 2024
152
Company information & advisors
Website
The Investors section of the Company’s
website, (www.gbgplc.com/en/investors),
contains detailed information on news, press
releases, key financial information, annual
and interim reports, share price information,
dividends and key contact details.
Our share price is also available on the London
Stock Exchange website. The following
information is a summary and readers are
encouraged to view the website for more
detailed information.
Financial calendar 2024
Annual General Meeting 23 July 2024
Dividend Ex-Div Date 20 June 2024
Dividend Record Date 21 June 2024
Dividend Payment Date 2 August 2024
Shareholder enquiries
GBG’s registrar, Equiniti, can deal with any
enquiries relating to your shareholding, such
as a change of name or address or a
replacement of a share certificate. Equiniti’s
Shareholder Contact Centre can be contacted
on +44 (0) 371 384 2030. Lines are open from
8:30 a.m. to 5:30 p.m. (UK time), Monday to
Friday, excluding public holidays in England
and Wales. You can also access details of
your shareholding and a range of other
shareholder services by registering at
www.shareview.co.uk.
Dividend Reinvestment Plan
(‘DRIP’)
The Company offers a Dividend Reinvestment
Plan that enables shareholders to reinvest
cash dividends into additional shares in the
Company. Application forms can be obtained
from Equiniti.
Share scams
Shareholders should be aware that fraudsters
may try and use high pressure tactics to lure
investors into share scams. Information on
share scams can be found on the Financial
Conduct Authority’s website, www.fca.org.uk/
scams.
Company Secretary &
registered office
Annabelle Burton
GB Group plc
The Foundation, Herons Way
Chester Business Park
Chester
CH4 9GB
United Kingdom
Registered in England & Wales
Company Number: 2415211
T: +44 (0)1244 657333
E: enquiries@gbgplc.com
W: www.gbgplc.com
Nominated advisor and
joint broker
Numis Securities Limited
45 Gresham Street
London
EC2V 7BF
Joint broker
Barclays Bank plc
1 Churchill Place
Canary Wharf
London
E14 5HP
Independent auditor
PricewaterhouseCoopers LLP
1 Hardman Square
Manchester
M3 3EB
Solicitors
Squire Patton Boggs (UK) LLP
1 Spinningfields
1 Hardman Square
Manchester
M3 3EB
Ashurst LLP
London Fruit & Wool Exchange
1 Duval Square
London
E1 6PW
Registrars
Equiniti
Aspect House
Spencer Road
Lancing
West Sussex
BN99 6DA
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This publication has been printed on Revive Silk
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Strategic Report
Governance
Financial Statements
Annual Report 2024
153
GBG
The Foundation
Herons Way
Chester Business Park
Chester
CH4 9GB
United Kingdom
gbgplc.com