GlobalData Plc
Annual
report and
accounts
For the year ended 31 December 2016
COMPANY NO. 03925319
We are helping our
clients to decode
the future, to be
more successful and
innovative.
ANNUAL REPORT AND ACCOUNTS 2016Chief Executive’s ReportChief Executive’s ReportStrategic ReportStrategic Report 2016
Highlights
Group revenue increased by 65% to £100.0m
(2015: £60.5m)
2016
£100.0m
2015
£60.5m
Deferred revenue increased by 57% to £46.1m
(2015: £29.3m)
2016
£46.1m
2015
£29.3m
Adjusted EBITDA increased by 71% to £20.6m
(2015: £12.0m). Adjusted EBITDA margin has
risen from 19.8% to 20.6% despite investment
2016
2015
£20.6m
£12.0m
Cash from operations increased to £15.0m
(2015: £10.9m)
2016
2015
£15.0m
£10.9m
Final Dividend of 4.0 pence per share
(2015: 2.5 pence); total dividend of 6.5 pence
per share (2015: 2.5 pence)
2016
2015
2.5 pence
6.5 pence
Contents
STRATEGIC REPORT
2016 Highlights
Our Business
Principal Activity
Our Business Model
Executive Chairman’s Statement
Chief Executive’s Report
Operational Review
Development of the Business
Financial Performance
Key Performance Indicators
Principal Risks and Uncertainties
DIRECTORS’ REPORT
The Directors
Corporate Governance Report
Directors’ Interests
Audit Committee Report
Directors’ Remuneration Report
Statement of Directors’ Responsibilities
INDEPENDENT AUDITOR’S REPORT
FINANCIAL STATEMENTS
Group
Consolidated Income Statement
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
Company
Independent Auditor’s Report (Company)
Company Statement of Financial Position
Company Statement of Changes in Equity
Company Statement of Cash Flows
Notes to the Company Financial Statements
Advisers
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89
Reliance on this document
Our Business Review on pages 7 to 19 has been prepared in accordance with the Strategic Report requirements of section 414C of the Companies Act 2006. The
intention of this document is to provide information to shareholders and is not designed to be relied upon by any other party or for any other purpose.
Forward-looking statements
This document contains forward-looking statements which are made by the directors in good faith based on information available to them at the time of approval
of this report. In particular, all statements that express forecasts, expectations and projections with respect to future matters, including trends in results of
operations, margins, growth rates, overall market trends, the impact of interest or exchange rates, the availability of financing, anticipated costs savings and
synergies and the execution of GlobalData Plc’s strategy, are forward-looking statements. By their nature, forward-looking statements involve risks and uncertainties
because they relate to events and depend on circumstances that will occur in the future. There are a number of factors which could cause actual results and
developments to differ materially from those expressed or implied by these forward-looking statements, including a number of factors outside of GlobalData Plc’s
control. Any forward-looking statements speak only as of the date they are made, and GlobalData Plc gives no undertaking to update forward-looking statements
to reflect any changes in its expectations with regard thereto or any changes to events, conditions or circumstances on which any such statement is based.
5
Our principal objective
is to become one of
the world’s leading
providers of premium,
subscription based
business information
products and services to
the markets we serve.
ANNUAL REPORT AND ACCOUNTS 2016ANNUAL REPORT AND ACCOUNTS 2016Chief Executive’s ReportStrategic Report
Strategic Report
2016 Highlights
Group revenue increased by 65% to £100.0m (2015: £60.5m)
2016
2015
£100.0m
£60.5m
Key highlights and achievements
• Group revenues of £100 million
• A global business information company following the successful
integration of recent acquisitions
• Focus on building global platform, strong business model and
management team
• Business rebranded to GlobalData across all markets and geographies
Financial Highlights - continuing operations
• Group revenue increased by 65% to £100.0m (2015: £60.5m)
• Deferred revenue increased by 57% to £46.1m (2015: £29.3m)
• Adjusted EBITDA(1) increased by 71% to £20.6m (2015: £12.0m)
• Adjusted EBITDA margin(1) has risen from 19.8% to 20.6%
despite investment
• Cash from operations increased to £15.0m (2015: £10.9m)
• Final Dividend of 4.0 pence per share (2015: 2.5 pence); total dividend of
6.5 pence per share (2015: 2.5 pence)
• Statutory loss before tax of £2.5m (2015: loss of £2.8m), which includes
non-cash charges of £13.4m amortisation of acquired intangibles, £2.8m
share based payments and £1.6m of unrealised foreign exchange losses.
6
7
Note 1: Adjusted EBITDA: Earnings before interest, tax, depreciation and amortisation, non-trading exchange rate movements, impairment, share based
payments, adjusted for costs associated with derivatives, acquisitions and restructuring of the Group. Adjusted EBITDA margin is defined as: Adjusted
EBITDA as a percentage of revenue.
ANNUAL REPORT AND ACCOUNTS 2016ANNUAL REPORT AND ACCOUNTS 2016Chief Executive’s ReportStrategic Report Strategic Report
Our Business
PRINCIPAL ACTIVITY
OUR BUSINESS MODEL
The principal activity of GlobalData Plc and its
subsidiaries (‘the Group’) is to enable organisations in
the Consumer, Information Communications Technology
(ICT) and Healthcare markets to gain competitive
advantage by providing unique, high quality business
information and services across multiple platforms.
The Group produces and owns premium business
information for each of our markets. We provide data,
insight and analysis across multiple platforms that
enable our customers to gain a competitive advantage
in their markets. We have a clear philosophy of owning
our own data and intellectual property together with
powerful analysis supporting our clients’ businesses.
Our business model is designed to generate revenues
off a relatively fixed operating cost base, allowing for
operational gearing to drive increased cash generation
and profit growth. The key features are:
• Strong asset base with scalable business model -
premium intelligence and customer datasets
• Global coverage of Consumer, ICT and Healthcare
information markets
• Focus on subscription revenues - high quality
recurring income, with high barriers to entry and
pricing power
Investment in human capital.
•
9
Our business model
is designed to
generate revenues
off a relatively
fixed operating cost
base, allowing for
operational gearing
to drive increased
cash generation
and profit growth.
ANNUAL REPORT AND ACCOUNTS 2016Chief Executive’s ReportStrategic Report The sections are
created by using
an abstract G and D
The marque represents
the process and flow
of information
The continuous shape
represents the renewal
of client relationships
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Analysis
Research
Data Applied
Solution
AGM. On behalf of the Board, I would like to express
our sincere gratitude to Kelsey for his help and support
over the past years and to wish him a long and happy
retirement.
Mark Freebairn has informed the Board of the
Company that he does not wish to stand for re-election
as a Non-Executive Director at the forthcoming AGM.
On behalf of the Board, I would like to thank Mark for
his significant contribution over the past years and to
wish him the very best for the future.
The Board is also announcing today, the appointment
of two new Non-Executive Directors to the Board,
Annette Barnes and Andrew Day. Annette is currently
a Managing Director and CEO of Lloyds Private Banking
Ltd and Andrew is Chief Data Officer for J Sainsbury Plc.
Dividend
Having regard to the improved prospects for the Group
and the cash requirements of the business for the
year ahead, the Board is pleased to announce a final
dividend of 4.0 pence per share (2015: 2.5 pence). The
proposed final dividend will be paid on 12 May 2017 to
shareholders on the register at the close of business on
18 April 2017. The ex-dividend date will be on 13 April
2017. The proposed final dividend increases the total
dividend for the year to 6.5 pence per share (2015: 2.5
pence).
Current trading and outlook
We have started the year well and remain confident
that we will make further progress.
Bernard Cragg
Executive Chairman
24 February 2017
Executive Chairman’s Statement
The business has performed well over the past year
achieving record levels of both reported and deferred
revenues. We have combined three businesses to
create a leading global business information company.
Our results for the year’s trading are encouraging;
more so given that for much of the year we focused on
integrating the businesses and creating a strong global
platform. We are now leveraging this platform to drive
significant growth and profitability.
Key Achievements
We have combined three businesses to create a leading
global business information company.
• Revenues of £100 million: A landmark for the
•
Group, with both reported revenues and deferred
revenues at record levels.
Integration of major acquisitions: The Consumer
acquisition completed in September 2015 has
now been integrated into our existing offering on
a single platform with a single brand identity. The
Healthcare acquisition, completed in January 2016,
brought management and operational scale in the
important North American market, which is now
being exploited for the benefit of the wider Group.
• Focused on building a global platform: Our
business model is a relatively simple one: create
the content once and leverage revenues from that
content across multiple formats (subscriptions,
reports and research engagements) and
geographies. We have made significant efforts in
investing in our global platform and infrastructure,
improving and strengthening our management
team and in ensuring that the Group presents a
single, simplified proposition in the markets and
geographies we serve.
• Rebranding to GlobalData: We are a Group
formed by the combining of three businesses. We
are in substance a new business and as such we
have rebranded the Group across all our markets
and geographies to present a single, simplified
proposition which better reflects our business and
our values.
Our employees
The transition of the Group to one now focused on the
provision of business information services to customers
based around the globe has been demanding, more so
given the additional challenges brought about by our
recent acquisitions. That we have delivered a good set
of results during a period of such change is entirely
down to the quality, commitment and talent of our
employees.
Board Changes
Kelsey van Musschenbroek has informed the Board of
the Company that he does not intend to stand for re-
election as a Non-Executive Director at the forthcoming
11
ANNUAL REPORT AND ACCOUNTS 2016Chief Executive’s ReportStrategic ReportStrategic Report “We are a
transformed
business focused
on the provision of
business information
to global markets,
all of which present
opportunities for
long-term profitable
growth. We expect
that 2017 will be
a year of further
progress and
opportunity for
the Group.”
Mike Danson
Chief Executive
In many respects we are a new business with 2016 being our first
year as a business information company operating under a single
brand, across multiple geographies and industry markets. Our
recent acquisitions have transformed the business and the Group
now derives the majority of its revenues from annual subscription
contracts and other information services.
The transformation of our business to a global business information
company operating in dynamic and competitive markets could not
have been possible without the hard work and commitment of our
employees. I would like to express my own and my fellow Board
members’ appreciation to all our colleagues across the globe and to
wish them continued success.
Along with the integration of our recent acquisitions we have
spent much of the past year putting in place the building blocks for
growth and have changed our executive and senior management
structures to better reflect the new business model.
Our first full twelve months of trading as GlobalData have been
encouraging with the Group delivering good revenue and earnings
growth. Moreover, we start 2017 with record levels of deferred
revenues, which provide improved revenue and earnings visibility.
For the year ahead our focus will be on doing things simply and
doing them well. We are building a business which is clearly
differentiated from the competition, which is hard to replicate
and whose products and services are embedded in the day-to-day
processes and operations of both new and existing clients.
OPERATIONAL REVIEW
The Group’s performance this year – continuing operations
The results for the year include a full twelve-month contribution
from our recent Consumer and GlobalData acquisitions, whereas
the prior year comparatives include no contribution from the
Healthcare acquisition (completed January 2016) and only a part
year contribution from the Consumer acquisition (completed
September 2015).
1. Revenue
Revenues increased by 65% to £100.0m (2015: £60.5m), which
reflects both good organic growth (24%) and the full year benefit of
the Consumer and Healthcare acquisitions. The acquired businesses
are, I am pleased to report, performing well and in line with
management expectations.
2. Deferred Revenue
Deferred revenue as at 31 December 2016 increased by 57% to
£46.1m (31 December 2015: £29.3m) improving the visibility on
2017 forecast revenues.
3. Adjusted EBITDA
Adjusted EBITDA increased by 71% to £20.6m (2015: £12.0m) with
the Group’s margin improving to 20.6% (2015: 19.8%). The EBITDA
margin growth is slightly below our initial expectations for the year,
reflecting our more measured approach to driving synergies and
reducing duplication brought about by our recent acquisitions.
4. Cash Generation
Cash generation improved significantly during the year, with
cash generated from continuing operations increasing by £4.1m
to £15.0m (2015: £10.9m). Excluding cash costs associated with
impaired contracts acquired as part of the Consumer acquisition
of £1.7m and other exceptional cash costs of £1.9m, cash from
operations would have increased to £18.6m, which equates to
90.3% of Adjusted EBITDA.
5. Foreign exchange impact on revenues
The Group derives around 61% of revenues in currencies other than
Sterling, which since 23 June 2016 has depreciated against all the
Group’s major trading currencies and in particular the US Dollar
and Euro. The impact of exchange rate movements on our revenues
for 2016 was somewhat muted as the Group derives a significant
proportion of its revenues from annual subscription contracts
whereby revenues are crystallised and amortised at the exchange
rate at date of invoice. Consequently a significant proportion of our
reported revenues were booked at rates prevailing prior to the 23
June 2016. The benefit of exchange rate movements to reported
revenues for 2016 was £2.2m, which accounts for 3.7% of our year
on year growth.
6. Foreign exchange impact on costs and Adjusted EBITDA
In Sterling terms, circa 57% of our costs are denominated in
currencies other than Sterling. Costs are translated as they are
incurred at the prevailing exchange rate. Thus, adverse movements
in exchange rates have an immediate impact on our earnings.
The effect of exchange rate movements on our cost base was to
increase our operating costs for 2016 by 5.1% or £2.5m.
The net effect (revenue benefit less cost impact) on Adjusted
EBITDA was a decrease of £0.3m.
7. Net Debt:
Net Debt remained flat at £25.5m (2015: £25.5m). Net debt was
anticipated to fall, but due to an exchange rate movement of £1.6m
on our US dollar denominated loan and cash outflow relating to
acquisitions of £2.9m it has remained in line with 2015. The Group
also spent £1.0m during the year purchasing treasury shares.
DEVELOPMENT OF THE BUSINESS
Acquisitions
Acquisitions form an important part of our overall strategy for growth.
We are focused on acquisitions, which extend our client reach and
product coverage within the markets we serve. In addition to the
GlobalData Healthcare acquisition, the Group completed one bolt-on
acquisition during the year for a net consideration of £2.0 million.
Our Mission
We are helping our clients to decode the future, to be more
successful and innovative. We provide our clients with innovative
solutions to complex issues, delivered via a single online platform,
which leverages our unique data and expert analysis across multiple
markets and geographies. We help our clients with strategic
planning, competitive intelligence, new product development,
identifying new consumer trends, marketing opportunities and new
sales channel prospects.
13
ANNUAL REPORT AND ACCOUNTS 2016Chief Executive’s ReportChief Executive’s ReportStrategic ReportStrategic Report Providing best in class customer service
Outstanding customer service is a critical component in delivering
customer satisfaction and improved customer retention. Our
aim is to deliver best in class customer service at every point of
interaction with our clients.
Future Developments
We are an ambitious business which challenges itself on a daily
basis to be better at what we do. Our ambition is to provide our
customers with world-class products and customer service. For
our employees, we aim to be an employer of choice providing
an enriching and rewarding environment to work in and for our
shareholders we aim to provide returns which reflect not only our
reported earnings but also our long-term prospects.
To deliver increased shareholder returns over the medium to long
term the Group aims to:
• Achieve strong organic growth: Leveraging our unique
content and delivery platforms across multiple formats and
geographies whilst better exploiting our common platforms,
processes and operations.
• Make acquisitions that are strategic and earnings accretive:
We look for acquisitions that are strategic in nature and which
over a reasonable time frame increase total returns. We also,
from time to time, make small bolt-on acquisitions that either
broaden our offering or extend our client reach in an existing
market. Our acquisition process is robust and diligent and is
supervised by the Board.
• Maintain a progressive dividend policy: Our business is one
that is focused on the efficient management of working capital
and increased cash generation. We believe we can invest in the
business, achieve growth in profits and service a progressive
dividend policy, one that reflects our growth and long-term
prospects.
We are a transformed business focused on the provision of business
information to global markets, all of which present opportunities
for long-term profitable growth.
We expect that 2017 will be a year of further progress and
opportunity for the Group.
At a time of increased uncertainty and ever-constant change we
aim to provide our clients with a realisable competitive advantage
by helping them to decode the future.
Our Strategic Priorities
Our principal objective is to become one of the world’s leading
providers of premium, subscription based business information
products and services to the markets we serve. We have four core
strategic priorities:
•
•
•
•
To develop world class products and services
To develop our sales capabilities
To improve operational effectiveness
To provide best in class customer service
Developing world class products and services
Our content is data driven and analyst led and provides our clients
with strategic and tactical insights for the markets that they operate
in. Our content is robust, relevant and unique; the majority of
which can be accessed via our online delivery platforms, which
give our clients real time access to critical business information and
work flow tools.
The key metric on how successful we are in developing world-class
products and services is renewal rates. Our aim over the medium
term is to achieve renewal rates by volume for our larger value
clients in excess of 90%.
Develop our sales capabilities
The business information market is dominated by North America,
which accounts for 50% of global spend, followed by Europe and
Asia Pacific. Our goal is to create more geographical balance in our
business reflecting market size. Consequently, the Group will look
to increase its management and sales operations in the important
North American and Asia Pacific markets.
Our medium term target is to increase our mix of revenues to 40%
in the US, 40% in the UK & Europe and 20% in Asia Pacific.
Improve operational effectiveness
Our business model is a relatively simple one: create the content
once and leverage sales from that content across multiple
formats (subscriptions, reports and research engagements) and
geographies. In doing so costs remain relatively fixed thereby
allowing for a higher percentage of the sales value achieved to
translate to profit. Acquisitions tend to suppress this structural
benefit as they often bring a duplication of both processes and
infrastructure which have to be rationalised. Over the past year
we took a rather measured approach to reducing this duplication,
choosing to focus on increasing our sales headcount, integrating
and improving the enlarged product set and reducing employee
churn. Given that much of this has now been completed, our focus
in the coming year will be to further standardise our processes and
reduce duplication and ultimately improve our operating margins.
Our medium term Adjusted EBITDA margin target is circa 25%.
FINANCIAL PERFORMANCE
Our 2016 results are for the first full year of trading as GlobalData. Our results are encouraging and provide a solid base from which to make
further progress.
Financial highlights
•
•
•
•
•
•
•
Group revenue increased by 65.4% to £100.0m (2015: £60.5m)
Strong performance of the newly acquired Healthcare business, which generated revenues of £25.1m
Deferred Revenue increased by 57.3% to £46.1m (2015: £29.3m)
Adjusted EBITDA(1) increased by 71.5% to £20.6m (2015: £12.0m)
Adjusted EBITDA margin(1) increased to 20.6% (2015: 19.8%)
Reported EBITDA(2) increased to £13.7m (2015: £3.2m)
Statutory loss before tax of £2.5m (2015: loss of £2.8m), which is inclusive of non-cash charges of £14.6m of amortisation of
intangibles, £2.8m share based payments and £1.6m of unrealised foreign exchange losses.
Cash generated from continuing operations increased by 37.4% to £15.0m (2015: £10.9m)
•
• Net debt (3) of £25.5m (2015: £25.5m)
Continuing operations
Revenue
Loss before tax
Depreciation
Amortisation
Finance costs
EBITDA2
Restructuring costs
Revaluation of short and long-term derivatives
Share based payments charge
Non-trading foreign exchange loss
M&A costs
Adjusted EBITDA1
Adjusted EBITDA margin1
2016
£000s
100,013
(2,519)
725
14,553
955
13,714
1,289
770
2,764
1,571
472
20,580
20.6%
2015
£000s
60,466
(2,803)
676
4,392
886
3,151
4,331
216
2,066
774
1,464
12,002
19.8%
Movement
65.4%
335.2%
71.5%
Note 1: Adjusted EBITDA: Earnings before interest, tax, depreciation and amortisation, impairment, share based payments, adjusted for costs associated with
derivatives, acquisitions, non-trading exchange rate movements and restructuring of the Group. Adjusted EBITDA margin is defined as: Adjusted EBITDA as a
percentage of revenue.
Note 2: EBITDA: Earnings before interest, tax, depreciation, amortisation and impairment. Includes a non-cash charge of £2.8 million for share based payments
(2015: £2.1 million).
Note 3: Net debt: Cash and cash equivalents less short and long-term borrowings.
14
15
ANNUAL REPORT AND ACCOUNTS 2016ANNUAL REPORT AND ACCOUNTS 2016Chief Executive’s ReportChief Executive’s ReportStrategic ReportStrategic Report KEY PERFORMANCE INDICATORS
The key performance indicators selected are used by the Executive Directors to monitor the Group’s performance and progress from continuing
operations. During the year we have made good progress across our revenue and deferred revenue metrics.
Eliminating the benefit the Healthcare acquisition, revenues grew by 23.9%. Deferred revenues grew as a combined result the recent
acquisition and strong sales in the last quarter of the year, with underlying organic year-on-year growth of 25%.
Net debt did not fall as the Directors had anticipated as a result of the retranslation of the USD denominated loan. The strength of the USD
dollar at the end of 2016 compared to 2015 resulted in an increase in the GBP value of the debt by £1.6m.
2016
2015
% growth
Revenue
£100.0m
£60.5m
65.4%
Adjusted EBITDA
£20.6m
£12.0m
Adjusted
EBITDA margin
20.6%
19.8%
Deferred Revenue
£46.1m
£29.3m
71.5%
0.8%
57.3%
Net Debt1
£25.5m
£25.5m
0.0%
Note 1: Net debt: Short and long-term borrowings less cash and cash equivalents.
Earnings per share
Basic earnings per share from continuing operations was 1.80 pence per share (2015: loss of (4.08) pence per share). Fully diluted earnings
per share from continuing operations was 1.65 pence per share (2015: loss of (4.08) pence per share).
Cash flow
The Group generated £15.0 million of operating cashflow, which equated to 73.1% of Adjusted EBITDA (2015 91.2%). Included within the
operating cashflow there were payments in relation to an onerous contract acquired as part of the Consumer acquisition (completed 1
September 2015) of £1.7m and exceptional cash costs of £1.9m. Adjusted for these items, operating cashflow would have been circa £18.6m,
which equates to 90.3% of Adjusted EBITDA.
The Group repaid debt of £5.4 million, paid dividends of £5.1m and paid for acquisitions of £2.0m.
Capital expenditure was £1.3 million in 2016 (£1.5 million in 2015). This includes £0.7 million on software (£1.1 million in 2015).
Currency rate and market risk
The Group’s primary objective in managing foreign currency risk is to protect against the risk that the eventual Sterling net cash flows will
be affected by changes in foreign currency exchange rates. To do this, the Group enters into foreign exchange contracts that limit the risk
from movements in US Dollar, Euro and Indian Rupee exchange rates with Sterling. Whilst commercially this hedges the Group’s currency
exposures, it does not meet the requirements for hedge accounting and accordingly any movements in the fair value of the foreign exchange
contracts are recognised in the income statement.
Whilst the longer-term implications of the United Kingdom’s vote to leave the European Union are unknown, we do know, in the absence of
other relevant factors, that a sustained weakening of Sterling should be of benefit as we derive the majority of our revenues in currencies
other than Sterling (principally US Dollar and Euro) and have a more limited exposure to non-Sterling costs. Whilst exchange rate movements
have had a modestly dilutive impact on our 2016 results, we do expect these factors to be broadly positive for both revenues and EBITDA in
the new financial year.
As a business information company, we are not currently impacted by cross border tariffs and we do not expect the re-negotiation of tariffs
to impact our business.
Interest rate risk
Interest rate risk is the impact that fluctuations in market interest rates can have on the value of the Group’s interest-bearing assets and
liabilities and on the interest charge recognised in the income statement. The Group does not manage this risk with the use of derivatives. We
consider interest rate risk to be low for the Group. We therefore do not have any risk strategies but review the risk level on a regular basis.
Liquidity risk and going concern
The Group’s approach to managing liquidity risk is to ensure, as far as possible, that it has sufficient liquidity to meet its liabilities as they
fall due with surplus facilities to cope with any unexpected variances in timing of cash flows. The Group meets its day-to-day working capital
requirements through free cash flow.
Based on cash flow projections, the Group considers the existing financing facilities to be adequate to meet short-term commitments. The
Directors have a reasonable expectation that there are no material uncertainties that cast significant doubt about the Group’s ability to
continue as a going concern. Accordingly, the Group has prepared the Annual Report and Accounts on a going concern basis.
PRINCIPAL RISKS AND UNCERTAINTIES
The Directors consider that the principal risks and uncertainties facing the Group are:
Risk Description
Potential Impact
Mitigation
Product
The success of the Group is
wholly dependent on the
quality and relevance of our
products.
• Loss of revenues from
new and renewable
business if the quality and
relevance of our products
diminishes.
• Robust data integrity platform and processes.
• Continued investment in recruiting and retaining high quality researchers
and analysts.
• Focus on client feedback.
• External consultants engaged to review quality control procedures.
People and Succession
The Group is a people-based
business; failure to attract or
retain key employees could
seriously impede future
growth.
Competition and Clients
The Group operates in highly
competitive yet fragmented
markets.
• Failure to recruit or retain
key staff could lead to
reduced innovation and
progress in the business.
• The Group operates a competitive remuneration package, with
competitive commission and incentive schemes.
• Long-term incentive schemes with over 100 senior management
participants.
• The strengthening of the Senior Leadership Team to encourage
motivation and engagement with the business.
• Loss of market share due
• The Group routinely reviews the competitive landscape to identify
to changing markets.
potential threats and acquisition opportunities.
• Our data sets and technology platforms are both unique and difficult to
• Reduced financial
replicate.
performance arising from
competitive threats.
• Aim to embed our products and service in client organisations thereby
increase switching costs.
• Provide improved and best in class client support thereby improving
customer satisfaction and retention.
Economic and Global
Political Changes
The Group’s businesses
operate in three key
geographic markets namely
Europe, North America and
Asia Pacific all of which
have near term economic
challenges.
• Economic and political
uncertainty could lead
to a reduction or delay
in client spending on
the services offered
by the Group and/ or
restriction on the Group’s
ability to trade in certain
jurisdictions.
• The Group provides high quality business information services, which
are embedded in the day to day operations of our clients. In times of
uncertainty, we aim to provide clarity and insight.
• Management of headcount and overheads.
• Increased controls over capital expenditure and working capital.
• We operate in different geographies and therefore operate in a balanced
portfolio of markets.
• As a business information company, we are not currently impacted by
cross border tariffs and we do not expect the re-negotiation of tariffs to
impact our business, however we monitor the impact of political change
and how this affects the Group.
16
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ANNUAL REPORT AND ACCOUNTS 2016ANNUAL REPORT AND ACCOUNTS 2016Chief Executive’s ReportChief Executive’s ReportStrategic ReportStrategic Report
Risk Description
Potential Impact
Mitigation
Financial
Currency exchange rate
fluctuations could adversely
impact the Group’s
consolidated results.
• The Group’s reporting
currency is Pounds
Sterling. Given the
Group’s significant
international operations,
fluctuations in currency
exchange rates can affect
the Group’s consolidated
results.
• The Group hedges the currency element of its net assets using foreign
currency borrowings.
• The balance sheet and cash flows of the Group are hedged by borrowing
in the currency of those cash flows.
• The Group’s treasury position is a recurring agenda item for the Audit
Committee.
IT, Cyber and Systems Failure
• Significant operational
disruption caused by a
major disaster.
• Business continuity plans have been implemented across the Group,
including disaster recovery programmes, and plans to minimise business
disruption.
• The Group also has relevant insurance cover for certain occurrences.
• IT Infrastructure is managed by third party provider with 24 hour
management and monitoring with back up and disaster protocols.
• The Group regularly reviews its cyber security and website security
protocols, and has undergone a review from an external third party.
• The majority of the Group’s operations are based in the United Kingdom,
United States of America and India. Appropriate advisors are employed
in all geographies to ensure the Group remains compliant with local
laws and regulations. The Group has an anti-bribery policy that has been
distributed amongst staff.
• All acquisitions are subject to rigorous due diligence and operational
review, the findings of which are presented to the main Board as part of
the supervision and approval process.
• Where necessary external advisors with either technical and/or local
knowledge are engaged.
Regulatory Compliance
• The Group may be
Acquisition and Disposal
Risk
subject to regulations
restricting its activities
or effecting changes in
taxation.
• The failure to successfully
identify and integrate key
acquisitions could lead to
loss of profits, inefficient
business processes,
inconsistent corporate
culture and weakened
brand.
Mike Danson
Chief Executive, approving the Strategic Report on behalf of the Board
24 February 2017
ANNUAL REPORT AND ACCOUNTS 2016
19
Chief Executive’s ReportChief Executive’s ReportStrategic ReportStrategic Report
Director’s report
Directors’ Report
The Directors
Bernard Cragg
Executive Chairman
Bernard Cragg is Executive
Chairman of GlobalData Plc.
Bernard currently sits on the
boards of Astro Malaysian
Holdings Berhad, Astro
Overseas Limited and Astro
All Asia Network Limited.
Bernard qualified with
PricewaterhouseCoopers as a
chartered accountant before
joining Carlton Communications
becoming Chief Financial
Officer and Finance Director.
Bernard was the Chairman of
Datamonitor Plc and during his
time there he was an integral
part of the executive team that
oversaw the rapid growth of
the business and its eventual
successful sale to Informa in
2007.
Kelsey van Musschenbroek
Non-Executive Director
Kelsey van Musschenbroek
joined the Group as a Non-
Executive Director on 1
September 2010 upon the
acquisition of Canadean. Prior
to this, Kelsey was one of the
founders of Canadean and has
been a director of Canadean
since its beginnings in the early
1970s as a specialist strategic
think tank for the food and
drinks industry. Kelsey has a
wealth of experience in market
research and analysis including
the food and drinks industry,
and in particular European
soft drinks. After graduating
from St Andrew’s University,
he joined the Financial Times,
finishing his time there as
Commercial Editor with
special responsibility for the
international food and drinks
industries.
Mike Danson
Chief Executive
Mike Danson is Chief Executive
of GlobalData Plc. He founded
Datamonitor Plc, an online
information company, in
1990. In 2000, Datamonitor
completed its flotation on the
London Stock Exchange and
was sold to Informa for £502
million in 2007.
Simon Pyper
Chief Financial Officer
Simon Pyper is Chief Financial
Officer of GlobalData Plc.
Previously, Simon was
Group Finance Director of
Datamonitor Plc until its sale
to Informa Plc. During his
tenure at Datamonitor Plc he
supported the business as it
delivered significant increases
in revenues, earnings and
shareholder returns. Simon
received an MBA from Henley
in 2003 and is a qualified
accountant.
Mark Freebairn
Non-Executive Director
Mark Freebairn is the head of
the CFO practice and a member
of the board practice at Odgers
Berndtson, one of the UK’s
leading executive search firms.
Mark has over eighteen years of
experience in the recruitment
and executive search industry
working principally in Board-
level recruitment. Mark has
been retained by a number
of quoted companies across
a broad range of industry
sectors to find and recruit both
Executive Directors and Non-
Executive Directors who can
help deliver on their strategic
and operational objectives.
Murray Legg
Non-Executive Director
Murray Legg is a chartered
accountant with over 35
years of audit and advisory
experience gained with
PwC in the UK where until
retirement in 2013 he held a
variety of senior management,
governance and client roles.
As a partner he spent 15 years
auditing and advising a number
of major UK companies whose
operations covered a broad
range of industry sectors.
Murray is currently a Non-
Executive Director of Sutton
and East Surrey Water Plc.
Peter Harkness
Non-Executive Director
Peter Harkness has more
than 30 years’ experience
as a Director or Chairman of
several successful businesses,
predominantly in the media
sector. Peter has played an
active role in a number of
private equity deals and has
gained extensive experience
on the boards of both public
and private companies. He is
currently Chairman of Chrysalis
Venture Capital Trust Plc, of
the travel media group, Volanti
Holdings and e-commerce
group MyTimeMedia. Peter
was a Non-Executive director
of Datamonitor until its sale to
Informa. He was Chairman of
the Butler Group until its sale to
Datamonitor and was Executive
Chairman of media monitoring
group, Precise Media, now part
of WPP.
21
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ANNUAL REPORT AND ACCOUNTS 2016ANNUAL REPORT AND ACCOUNTS 2016Chief Executive’s ReportStrategic Report Directors’ report
Corporate Governance Report
Directors’ report
Corporate Governance Report
The Group is committed to high standards of corporate governance. Companies can choose to voluntarily adopt the UK Corporate
Governance Code. Whilst the Group does not voluntarily adopt all provisions of the Code, we have reported on our Corporate Governance
arrangements on pages 22 to 25 by drawing upon best practice available, including those aspects of the UK Corporate Governance Code we
consider to be relevant to the company and best practice.
The Board
The Group is led by the Board, which is made up of three Executive Directors and four Non-Executive Directors.
The Non-Executive Directors’ shareholdings are detailed in the Directors’ Interests table on page 25 of the report. The Board has
determined that all the Non-Executive Directors are independent and that their shareholding in the Company does not affect their
independence.
In 2016, the Board met 12 times during the year and there is a formal schedule of matters reserved for the consideration of the Board.
The Board is responsible to the shareholders for the proper management of the Group. The Board sets and monitors the Group strategy,
reviewing trading performance, ensuring adequate funding, examining development possibilities and formulating policy on key issues. The
Board is also responsible for monitoring the risk and control environment.
The Executive Chairman is responsible for the running of the Board and together with the Board members, determining the strategy of the
Group. The Chief Executive is responsible for the running of the Group’s businesses.
The Non-Executive Directors have the opportunity to meet without the Executive Directors in order to discuss the performance of the
Board, its committees and individual Directors.
All Directors are required to stand for re-election every year. The terms and conditions of appointment of the Non-Executive Directors are
available for inspection at our registered office.
The Company Secretary ensures that the Board and its committees are supplied with papers to enable them to consider matters in good
time for meetings and to enable them to discharge their duties. Procedures are in place for the Directors in the furtherance of their duties
to take independent professional advice, if necessary at the Company’s expense.
The Board has established Audit, Nomination and Remuneration Committees with mandates to deal with specific aspects of its business.
The table below details the membership and attendance of individual Directors at Board and committee meetings held during the year
ended 31 December 2016.
Board meetings during the year:
Number of meetings
Bernard Cragg
Mike Danson
Simon Pyper
Kelsey van Musschenbroek
Mark Freebairn
Murray Legg
Peter Harkness
Board
12
12
12
11
9
9
10
11
Audit Committee
4
Remuneration Committee
2
1*
N/A
N/A
4
4
3
4
N/A
N/A
N/A
0
1
1
2
*Bernard Cragg attended the Audit Committee meeting in February 2016 in his role as Chairman of the Audit Committee prior to being appointed Executive
Chairman of the Board.
Remuneration Committee
The Remuneration Committee comprises the Chairman Mark Freebairn, Peter Harkness, Murray Legg and Kelsey van Musschenbroek. The
Remuneration Committee is responsible for determining the service contract terms, remuneration and other benefits of the Executive
Directors, details of which are set out in the Remuneration Report on pages 28 and 29. The terms of reference of the Remuneration
Committee are available for inspection on request.
Audit Committee
The Audit Committee is comprised of the Chairman Murray Legg, Peter Harkness, Mark Freebairn and Kelsey van Musschenbroek. Murray
Legg is a Chartered Accountant with recent and relevant financial experience.
The Committee met four times in the year with the external auditors in attendance.
The Committee is responsible for reviewing the Interim Report and the Annual Report and Accounts and it oversees the controls necessary
to ensure the integrity of the financial information reported to shareholders. The Audit Committee discusses the nature, scope and findings
of the audit with the external auditors and monitors the independence of the external auditors. The Committee is also responsible for
considering the appointment or re-appointment of external auditors and the audit fee. The terms of reference of the Audit Committee are
available for inspection on request.
The Audit Committee discharges its responsibilities through receiving reports from management and advisers, working closely with the
auditors, carrying out and reviewing risk assessments and taking counsel where appropriate in areas when required to make a judgement.
The Audit Committee has considered the need for a separate internal audit function but due to the size of the Group and procedures in
place to monitor both trading performance and internal controls, it was concluded the costs of a separate internal audit department would
outweigh the benefits.
Nominations Committee
The Nominations Committee is comprised of the Chairman Peter Harkness, Murray Legg, Bernard Cragg and Mike Danson. For governance
reasons, the Chairman has the casting vote.
Internal control and risk management
The Board has overall responsibility for the Group’s system of internal controls and for monitoring its effectiveness. However, such a system
is designed to manage rather than eliminate risk of failure to achieve business objectives and can only provide reasonable and not absolute
assurance against material misstatement or loss.
The Directors review the effectiveness of the Group’s system of internal controls. This review extends to all controls including financial,
operational, compliance and risk management. Formal risk review is a regular Board agenda item.
The key controls in place have been reviewed by the Board and comprise the following:
•
•
•
•
•
The preparation of comprehensive annual budgets and business plans integrating both financial and operational performance objectives,
with an assessment of the associated business and financial risks. The overall Group budget and business plan is subject to approval by
the Board.
Weekly revenue reports are produced and reviewed by management.
Monthly management accounts are prepared and reviewed by the Board. This includes reporting against key performance indicators and
exception reporting.
An organisational structure with formally defined lines of responsibility. Authorisation limits have been set throughout the Group.
The quarterly preparation and Board review of management accounting control checklists.
22
23
ANNUAL REPORT AND ACCOUNTS 2016ANNUAL REPORT AND ACCOUNTS 2016
Directors’ report
Corporate Governance Report
Directors’ report
Corporate Governance Report
Going concern
The Group meets its day-to-day working capital requirements through free cash flow. Based on cash flow projections, the Group considers
the existing financing facilities to be adequate to meet short-term commitments.
Health and safety
It is the policy of the Group to conduct all business activities in a responsible manner, free from recognised hazards and to respect the
environment, health and safety of our employees, customers, suppliers, partners, neighbours and the community at large.
The Directors have a reasonable expectation that there are no material uncertainties that cast significant doubt about the Group’s ability to
continue as a going concern. Accordingly, the Group has prepared the Annual Report and Accounts on a going concern basis.
Political donations
The Group has not made any political donations during the year.
Viability statement
The Directors have assessed the prospect of the Group over a longer period than the 12 months required by the ‘Going Concern’ provision.
In making their assessment, the Board have considered financial forecasts for the next four years as part of the annual planning process.
Within the review, the Board considered the Group’s cash flows including debt repayment profile and profit forecasts through to the end of
2018.
The Board has also considered the strategic “2020 plan”, which sets out objectives and targets for key metrics on profitability and cashflow
as well as non-financial metrics such as product quality and customer retention rates. The principal risks detailed on pages 17 and 19 have
been considered and in the opinion of the Board, the Group has adequate contingencies in place to mitigate these risks.
Based on the results of their review, the Directors have a reasonable expectation that the Company will be able to continue in operation
and meet its liabilities as they fall due over the four year period of their assessment.
Shareholder relationships
The Company operates a corporate website at www.globaldata.com where information is available to potential investors and shareholders.
The Board will use the Annual General Meeting to communicate with shareholders and seek their participation. The Notice of the Annual
General Meeting will be circulated more than 21 working days prior to the meeting.
Employee policies
The Group places considerable value on the involvement of its employees and keeps them informed on matters affecting them as
employees and on the factors affecting the performance of the Group. This is achieved through formal and informal meetings.
The Group benefits from the diversity and variety of its workforce and is fully committed to maintaining and encouraging diversity. It is
the Group’s policy to give full and fair consideration to the employment of disabled persons, the continuing employment of employees
becoming disabled, and to the full development of the careers of disabled employees, having regard to their particular abilities.
The Group does not discriminate on the grounds of gender, race, disability, sexuality, religion, philosophical belief, political belief, trade
union membership or age as guided by the Equality Act 2010.
At 31 December 2016, the Group employed the following number of employees of each gender:
2016
No.
1,225
733
1,958
2015
No.
697
395
1,092
Male
Female
24
Supplier payments policy
It is the Group’s policy to abide by the payment terms agreed with suppliers whenever it is satisfied that the supplier has provided the
goods and services in accordance with agreed terms and conditions. At 31 December 2016 the Group had 56 days’ purchases outstanding
(2015: 38 days).
Subsequent events
There were no subsequent events.
Financial instruments
Use of financial instruments and exposure to various financial risks has been discussed within the Strategic Report (page 16).
Future developments
Future developments have been discussed within the Strategic Report (page 14).
Directors’ Interests
Details of the Company’s share capital are set out in note 22 to the financial statements. As at 24 February 2017, Mike Danson had a
beneficial interest of 69.7 per cent of the issued ordinary share capital of the Company. No other person has notified any interest in the
ordinary shares of the Company, in accordance with AIM Rule 17.
The interests of the Directors in the ordinary shares of the Company were as follows:
Bernard Cragg
Mike Danson
Simon Pyper
Kelsey van Musschenbroek
Mark Freebairn
Murray Legg
Peter Harkness
Number of ordinary shares
390,000
71,304,325
150,000
374,986
48,944
15,000
70,000
25
ANNUAL REPORT AND ACCOUNTS 2016ANNUAL REPORT AND ACCOUNTS 2016
Directors’ report
Audit Committee Report
Directors’ report
Audit Committee Report
The Audit Committee plays an important role in the governance of the Group and I am pleased to present our report to you for 2016.
As Chairman of the Audit Committee it was my responsibility to ensure that the Committee was rigorous and effective in its role of
monitoring and reviewing:
•
• The effectiveness of the Group’s internal controls and risk management framework
• The integrity of the Group’s relationship with the external auditors and the effectiveness of the audit process.
The integrity of the financial statements of the Group and any formal announcements relating to financial performance
The Audit Committee annually reviews the remuneration received by the auditors for audit services and non-audit work. Their audit and
non-audit fees are set, monitored and reviewed throughout the year (see note 4 of the financial statements). The non-audit fees in the year
were not material in the context of the overall fee and the Committee deemed that no conflict existed between such audit and non-audit
work.
Tenure of Auditor
Grant Thornton UK LLP have been the Auditor for the Group since the acquisition of TMN Group Plc in 2009 and were also the Auditor of
TMN Group Plc prior to that date.
During the year the Audit Committee met on four occasions and I am satisfied that we were presented with papers of good quality and in a
timely fashion.
To maintain the objectivity of the audit process the Group actively supports audit partner rotation.
Murray Legg
Chairman of the Audit Committee
24 February 2017
The Audit Committee consists of the Chairman Murray Legg, Peter Harkness, Mark Freebairn and Kelsey van Musschenbroek.
The integrity of financial reporting
We reviewed the integrity of the financial statements and all formal announcements relating to financial performance during 2016. As part
of the review, we engaged in discussion with the external auditors on whether significant areas of judgement and significant risks were
adequately reported and disclosed.
During 2016, we focused upon the following areas:
•
•
•
Acquisition accounting
Review of financial reporting systems
Assessing the impact of IFRS 15, which is effective January 2018.
We have adopted the enhanced audit report for the 2016 Annual Report and Accounts. This is not a mandatory requirement, as the Group
is AIM listed and has not voluntarily adopted the UK Corporate Governance Code; however the enhanced disclosure has been included as a
matter of best practice.
The effectiveness of internal controls and risk management framework
The Committee has a clear process for identifying, evaluating and managing risk. Significant risks faced by the Group are documented in the
Group’s risk register and considered regularly. The external auditors include a review of the Group’s risk register in their audit approach.
Furthermore, the Board holds an ‘Away Day’ each year when the Group’s performance, strategy and significant risks are critically evaluated,
including a review of the effectiveness of internal controls.
External Auditor
The Committee recommends the reappointment of Grant Thornton UK LLP for 2017. We believe their independence, the objectivity of the
external audit and the effectiveness of the audit process is safeguarded and remains strong. This is displayed through their robust internal
processes, their continuing challenge, their focused reporting and their discussions with both management and the Audit Committee. We
judge Grant Thornton UK LLP through the quality of their audit findings, management’s response and stakeholder feedback.
In order to maintain the independence of the external auditors, the Board has determined that non-audit work will not be offered to the
external auditors unless there are clear efficiencies and value added benefits to the Group.
26
27
ANNUAL REPORT AND ACCOUNTS 2016ANNUAL REPORT AND ACCOUNTS 2016 Directors’ report
Directors’ Remuneration Report
Unaudited information
The Remuneration Committee
I am pleased to present the Remuneration Committee’s report to you for 2016.
The Remuneration Committee consists of the Chairman Mark Freebairn, Peter Harkness, Murray Legg and Kelsey van Musschenbroek.
Following my wish not to stand for re-election after the AGM on 25 April 2017, Peter Harkness will assume the role of Chairman.
Directors’ remuneration policy
The Board is responsible for setting the Group’s policy on Directors’ remuneration and the Remuneration Committee decides on the
remuneration package of each Executive Director.
The primary objectives of the Group’s policy on executive remuneration are that it should be structured so as to attract and retain
executives of a high calibre with the skills and experience necessary to develop the Company successfully and, secondly, to reward them
in a way which encourages the creation of value for the shareholders. The performance measurement of the Executive Directors and the
determination of their annual remuneration package is undertaken by the Remuneration Committee. No Director is involved in setting his
own remuneration.
The main elements of the Executive Directors’ remuneration are:
•
•
•
•
Basic annual salary - The salaries of the Executive Directors are reviewed annually and reflect the executives’ experience, responsibility
and the Group’s market value.
Bonus - Based upon performance.
Other benefits - Other benefits include medical cover and car allowances.
Share based payments - Full details of the share option scheme operated by the Group are set out in note 23.
Non-Executive Directors’ remuneration
All Non-Executive Directors have letters of appointment with the Company and their remuneration is determined by the Board, having
considered the level of fees in similar companies. Non-Executive Directors are not entitled to any pension contributions.
Directors’ service agreements
It is the Group’s policy that Directors should not have service agreements with notice periods capable of exceeding twelve months. The
existing service agreements have neither fixed terms nor contractual termination payments but do have fixed notice periods. The details of
the service agreements of the current Directors are:
Directors’ report
Directors’ Remuneration Report
Audited Information
Directors’ emoluments
Executive Directors
Bernard Cragg
Mike Danson
Simon Pyper
Non-Executive Directors
Kelsey van Musschenbroek
Mark Freebairn
Murray Legg
Peter Harkness
Basic salary
£000s
Other benefits
£000s
2016 total
£000s
2015 total
£000s
158
50
255
30
30
34
38
-
47
2
-
-
-
-
158
97
257
30
30
34
38
50
89
291
30
30
-
30
The other benefits consist of company cars and health insurance cover.
As at 31 December 2016, Simon Pyper had 350,000 share options in issue (2015: 1,120,000) and Bernard Cragg had 250,000 share options
in issue (2015: nil). No options were exercised during 2016 (2015: nil). No other Directors have share options.
Share options
The Group created a share option scheme during the year ended 31 December 2010 and granted the first options under the scheme on 1
January 2011 to certain senior employees. Each option granted converts to one ordinary share on exercise. A participant may exercise their
options (subject to employment conditions) at any time during a prescribed period from the vesting date to the date the option lapses.
In order for the remaining options to be exercised, the Group’s earnings before interest, taxation, depreciation and amortisation, as
adjusted by the Remuneration Committee for significant or one-off occurrences, must exceed targets of £26.7m and £35m respectively
(2015: £18.5 million and £23.5 million respectively). The targets were revised during 2016 following the acquisition of the Healthcare and
Consumer businesses to take into account the transformed business.
The total charge recognised for the scheme during the year ended 31 December 2016 was £2.8 million (2015: £2.1 million). The awards of
the scheme are settled with ordinary shares of the Company.
Executive Directors
Bernard Cragg
Mike Danson
Simon Pyper
Non-Executive Directors
Kelsey van Musschenbroek
Mark Freebairn
Murray Legg
Peter Harkness
Contract date
12 April 2016
1 October 2008
25 June 2009
Notice period
3 months
12 months
12 months
1 September 2010
13 July 2009
23 February 2016
25 June 2009
1 month
1 month
3 months
1 month
By order of the Board
Mark Freebairn
Chairman of the Remuneration Committee
24 February 2017
28
29
ANNUAL REPORT AND ACCOUNTS 2016ANNUAL REPORT AND ACCOUNTS 2016 Directors’ report
Statement of Directors’ responsibilities in respect of the Annual Report
and the financial statements
The Directors are responsible for preparing the Annual Report, the Directors’ Remuneration Report and the Group and the parent Company
financial statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to
prepare the financial statements in accordance with International Financial Reporting Standards as adopted by the European Union (IFRSs).
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 and profit or loss of the Company and the Group for that period.
In preparing these financial statements, the Directors are required to:
•
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
•
•
state whether applicable IFRSs have been followed, subject to any material departures disclosed and explained in the financial statements;
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the 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 safeguarding the assets of the Company and hence for
taking reasonable steps for the prevention and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the Company’s website. Legislation in the United Kingdom governing the
preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
Auditors
A resolution to reappoint Grant Thornton UK LLP as auditors to the Company will be proposed at the Annual General Meeting.
Disclosure of information to auditors
The Directors confirm that: so far as each Director is aware, there is no relevant audit information of which the Group’s auditors are
unaware, and the Directors have taken all steps that they ought to have taken in order to make themselves aware of any relevant audit
information and establish that the Group’s auditors are aware of that information.
Annual General Meeting
The Annual General Meeting will be held on 25 April 2017 at John Carpenter House, John Carpenter Street, London EC4Y 0AN at 10am.
On behalf of the Board
Mike Danson
Chief Executive
24 February 2017
31
ANNUAL REPORT AND ACCOUNTS 2016Chief Executive’s ReportStrategic Report Independent Auditor’s report
Independent Auditor’s Report To The Members Of Globaldata Plc
Independent Auditor’s report
Independent Auditor’s Report To The Members Of Globaldata Plc
OUR OPINION ON THE GROUP FINANCIAL STATEMENTS IS UNMODIFIED
In our opinion the group financial statements:
•
•
•
give a true and fair view of the state of the group’s affairs as at 31 December 2016 and of its profit for the year then ended;
have been properly prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union; and
have been prepared in accordance with the requirements of the Companies Act 2006.
OTHER MATTER
We have reported separately on the parent company financial statements of GlobalData plc for the year ended 31 December 2016.
WHO ARE WE REPORTING TO
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our
audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an
auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other
than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
WHAT WE HAVE AUDITED
GlobalData plc’s group financial statements for the year ended 31 December 2016 which comprise the consolidated income statement, the
consolidated statement of comprehensive income, the consolidated statement of financial position, the consolidated statement of changes
in equity, the consolidated statement of cash flows and the related notes.
The financial reporting framework that has been applied in their preparation is applicable law and IFRSs as adopted by the European Union.
OVERVIEW OF OUR AUDIT APPROACH
•
Overall group materiality: £720,000, which represents approximately 3.5% of the group’s Earnings before Interest, Taxation, Depreciation
and Amortisation (‘EBITDA’);
• We performed full scope audit procedures for UK locations and full scope and targeted audit procedures for overseas locations; and
• Key audit risks were identified as:
• Revenue recognition;
• Acquisition accounting of GlobalData Holding Limited;
•
Intangibles impairment review; and
• Management override of controls.
OUR ASSESSMENT OF RISK
In arriving at our opinions set out in this report, we highlight the following risks that, in our judgement, had the greatest effect on our audit:
Audit risk
How we responded to the risk
Revenue recognition
Under International Standards on Auditing (ISAs) (UK
and Ireland), there is a presumed risk of fraud in revenue
recognition. Because of this, we focused on revenue
recognition, particularly given the Group’s multiple
revenue streams which have different recognition
criteria dependent upon the service provided or product
sold. We therefore identified revenue recognition as a
significant risk requiring special audit consideration.
•
•
Our audit work included, but was not restricted to:
•
an assessment of the methodology and the internal control environment
relating to revenue recognition. This involved assessing the design of key
controls in the revenue business cycle as well as reviewing whether the
implementation of these key controls was satisfactory;
reviewing the Group’s revenue recognition policy for each revenue stream
and assessed whether it was in accordance with IFRSs as adopted by the
European Union; and
performing substantive audit tests. The key substantive testing that we
performed was on sales transactions throughout the year across each of the
revenue streams to evaluate whether revenue is recognised in accordance
with the contract terms, having considered the principles of IFRSs as adopted
by the European Union and the commercial substance of the contracts. The
substantive testing also addressed whether revenue had been recognised in
the correct period given when the service was delivered or product was sold
and to ensure appropriate cut off procedures have been applied as well as
the recognition of revenue on a gross or net basis. The substantive testing
addressed accrued income and deferred revenue balances.
The Group’s accounting policy in respect of revenue recognition is included in
note 2 to the financial statements and related disclosures are included in note 3.
Audit risk
How we responded to the risk
Acquisition of GlobalData Holding Limited
On 23 December 2015 an agreement was signed
to acquire the whole of the issued share capital of
GlobalData Holding Limited for total consideration of
£66.5m in the form of ordinary shares in the Group.
The GlobalData Holding Limited acquisition was
completed on 6 January 2016, which is the point at
which management determined that control was
obtained. On 19 January 2016 all Resolutions were
passed unanimously at the General meeting.
As a result of this acquisition, the Group recorded
intangible assets and goodwill of £25.8 million and
£56.2 million respectively. Management has made
key judgements in determining the allocation of the
purchase price to the assets and liabilities acquired and
adjustments made to align accounting policies.
The calculation of the intangible assets and goodwill
arising from the acquisition required the application
of a valuation model to determine the fair value of the
identifiable intangible assets. We therefore identified
the acquisition of GlobalData Holdings Limited, including
the valuation and allocation of the purchase price to
the assets and liabilities acquired, as a significant risk
requiring special audit consideration.
Intangibles impairment review
A significant balance on the consolidated statement of
financial position is intangible assets of £133.5 million,
including goodwill of £102.1 million.
Management has determined goodwill to have an
indefinite life, and under International Accounting
Standard 36: Impairment of Assets (‘IAS 36’) requires
an annual review for impairment. Other intangibles
are subject to an impairment test when there is an
indication that an asset may be impaired. The process
for measuring and recognising impairment under IAS
36 is complex and judgemental. We therefore identified
intangibles impairment review as a significant risk
requiring special audit consideration.
Management override of controls
Under ISAs (UK and Ireland), for all of our audits we are
required to consider the risk of management override
of controls. Due to the unpredictable nature of this risk
we are required to assess it as a significant risk requiring
special audit consideration.
Our audit work included, but was not restricted to:
•
challenging the change of control date given the announcement, tax
clearances and completion of all resolutions were held on different dates;
reviewing relevant purchase documents to assess whether management had
identified all the intangible assets;
engaging our internal valuations specialists to assist the audit team in
assessing the underlying assumptions used in the multi-period excess
earnings method model and royalty rate model performed by management,
and challenging management’s calculations and assumptions used. This
involved challenging both the identification and valuation of intangible assets.
The valuation model includes certain assumptions which are judgemental
in nature including estimates of future revenue, growth rates, customer
retention rates and discount rates;
challenging these assumptions with reference to historic data, sensitivity
analysis, re-computation and benchmarking against industry data available;
and
challenging the acquisition date based on when control had passed.
•
•
•
•
The group’s accounting policy on the valuation of the acquired intangible assets
is shown in notes 1 and 2 to the financial statements and related disclosures are
included in note 26.
Our audit work included, but was not restricted to:
•
•
challenging the level of cash generating units identified by management;
challenging the methodology and assumptions used by management in
conducting the impairment review;
challenging the forecasts prepared by management, where we evaluated
the forecasts by comparing them to historic performance and growth
rates, understanding the key performance indicators driving revenue
and comparing these to market expectations. We challenged the key
assumptions in the value in use calculations for goodwill and intangible
assets such as cash flow projections, discount rates, long term growth rates
and sensitivities used; and
evaluating the disclosures related to impairment review.
•
•
The group’s accounting policy on impairment of intangible assets is shown in note
2 to the financial statements and related disclosures are included in note 11.
Our audit work included, but was not restricted to:
•
specific procedures relating to this risk that are required by ISA (UK and
Ireland) 240 ‘The Auditors Responsibilities relating to Fraud in an Audit of
Financial Statements’. This included profiling journal entries and focusing on
unusual items. We tested a sample of journal entries by tracing the journal
entries to source documentation and testing whether the journals were
appropriately approved, posted to the correct account codes and correct
periods, and tested whether they were valid company expenses;
evaluating the key judgements and assumptions in management’s estimates
and testing for significant transactions outside the normal course of
business; and
undertaking a detailed review of related party transactions to understand the
nature of transaction and movements from the prior year.
•
•
32
33
ANNUAL REPORT AND ACCOUNTS 2016ANNUAL REPORT AND ACCOUNTS 2016
Independent Auditor’s report
Independent Auditor’s Report To The Members Of Globaldata Plc
Independent Auditor’s report
Independent Auditor’s Report To The Members Of Globaldata Plc
OUR APPLICATION OF MATERIALITY AND AN OVERVIEW OF THE SCOPE OF OUR AUDIT
OTHER REPORTING REQUIRED BY REGULATIONS
Materiality
We define materiality as the magnitude of misstatement in the financial statements that makes it probable that the economic decisions of a
reasonably knowledgeable person would be changed or influenced. We use materiality in determining the nature, timing and extent of our
audit work and in evaluating the results of that work.
We determined materiality for the audit of the group financial statements as a whole to be £525,000, which is approximately 3.5% of the
group’s Earnings before Interest, Taxation, Depreciation and Amortisation (‘EBITDA’) at the planning stage of our audit. This benchmark is
considered the most appropriate because, in our view, this is the metric against which the financial performance of the Group is measured
both internally and externally.
We revised the materiality determined at the planning stage from £525,000 to £720,000 based on the final consolidated EBITDA figures.
The benchmark of 3.5% of EBITDA remained unchanged, as we judged that this was appropriate in the context of the group’s actual
financial results.
Our opinion on other matters prescribed by the Companies Act 2006 is unmodified
In our opinion, based on the work undertaken in the course of the audit:
•
the information given in the Strategic Report and the Directors’ Report for the financial year for which the group financial statements are
prepared is consistent with the financial statements; and
the Strategic Report and the Directors’ Report have been prepared in accordance with applicable legal requirements.
•
Matter on which we are required to report under the Companies Act 2006
In the light of the knowledge and understanding of the group and its environment obtained in the course of the audit, we have not identified
material misstatements in the Strategic Report or the Directors’ Report.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
•
•
certain disclosures of directors’ remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Materiality for the current year is higher than the level that we determined for the year ended 31 December 2015 to reflect the increase in
the group’s EBITDA.
RESPONSIBILITIES FOR THE FINANCIAL STATEMENTS AND THE AUDIT
We use a different level of materiality, performance materiality, to drive the extent of our testing and this was set at 70% of financial
statement materiality for the audit of the group financial statements. We also determine a lower level of specific materiality for certain
areas such as directors’ remuneration and related party transactions.
What the directors are responsible for:
As explained more fully in the Statement of Directors’ Responsibilities set out on page 31, the directors are responsible for the preparation
of the group financial statements and for being satisfied that they give a true and fair view.
We determined the threshold at which we will communicate misstatements to the Audit Committee to be £36,000. In addition, we will
communicate misstatements below that threshold that, in our view, warrant reporting on qualitative grounds.
Overview of the scope of our audit
A description of the generic scope of an audit of financial statements is provided on the Financial Reporting Council’s website at
www.frc.org.uk/auditscopeukprivate.
We conducted our audit in accordance with ISAs (UK and Ireland). Our responsibilities under those standards are further described in the
‘Responsibilities for the financial statements and the audit’ section of our report. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
We are independent of the Group in accordance with the Auditing Practices Board’s Ethical Standards for Auditors, and we have fulfilled our
other ethical responsibilities in accordance with those Ethical Standards.
What are we responsible for:
Our responsibility is to audit and express an opinion on the group financial statements in accordance with applicable law and ISAs (UK and
Ireland). Those standards require us to comply with the Auditing Practices Board’s Ethical Standards for Auditors.
Nicholas Page
Senior Statutory Auditor
for and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
London
24 February 2017
Our audit approach was based on a thorough understanding of the group’s business and is risk based, and in particular included:
• an audit of the financial statements of the parent company, GlobalData Plc;
•
evaluating controls over key financial systems identified as part of our risk assessment. This included a review of the general IT controls,
the accounts production process and the controls addressing critical accounting matters identified in our risk assessment;
substantive testing on significant transactions, balances and disclosures, the extent of which was based on various factors such as our
overall assessment of the control environment, the effectiveness of controls over individual systems and the management of specific
risks; and
an assessment of the Group entities. The Group is predominately based within the UK and comprises a number of UK subsidiaries which
are centrally managed and controlled. In establishing the overall approach to the Group audit, we determined the UK subsidiaries that
required an audit, to a subsidiary level of materiality, which provides coverage of over 99% of Group revenues and 87% of EBITDA. Whilst
the majority of the Group’s operations are located in the UK, there are a number of other overseas subsidiaries with the largest being in
the US. We assessed the work required in respect of overseas subsidiaries to be able to conclude whether sufficient appropriate audit
evidence had been obtained as a basis for our opinion on the consolidated financial statements as a whole. The audit testing for the
overseas subsidiaries in respect of the group audit was performed by the Group audit team.
•
•
34
35
ANNUAL REPORT AND ACCOUNTS 2016ANNUAL REPORT AND ACCOUNTS 2016
Consolidated Income Statement
Group
Consolidated Statement of Comprehensive Income
Group
Profit/ (loss) for the year
Other comprehensive income
Items that will be classified subsequently to profit or loss:
Net exchange gains/ (losses) on translation of foreign entities
Other comprehensive income/ (loss), net of tax
Total comprehensive income/ (loss) for the year
The accompanying notes form an integral part of this financial report.
Year ended 31
December 2016
£000s
Year ended 31
December 2015
£000s
1,096
(11,101)
108
108
1,204
(55)
(55)
(11,156)
Notes
Year ended
31 December 2016
£000s
Year ended
31 December 2015
£000s
3
5
4
5
5
8
9
25
10
Continuing operations
Revenue
Cost of sales
Gross profit
Distribution costs
Administrative costs
Other expenses
Operating loss
Analysed as:
Adjusted EBITDA1
Items associated with acquisitions and restructure of the Group
Other adjusting items
EBITDA2
Amortisation
Depreciation
Operating loss
Finance costs
Loss before tax from continuing operations
Income tax credit/ (expense)
Profit/ (loss) for the year from continuing operations
Loss for the year from discontinued operations
Profit/ (loss) for the year
Earnings/ (loss) per share attributable to equity holders from continuing
operations:
Basic earnings/ (loss) per share (pence)
Diluted earnings/ (loss) per share (pence)
Loss per share attributable to equity holders from discontinued operations:
Basic loss per share (pence)
Diluted loss per share (pence)
Total basic earnings/ (loss) per share (pence)
Total diluted earnings/ (loss) per share (pence)
The accompanying notes form an integral part of this financial report.
100,013
(65,781)
34,232
(63)
(15,466)
(20,267)
(1,564)
20,580
(1,761)
(5,105)
13,714
(14,553)
(725)
(1,564)
(955)
(2,519)
4,332
1,813
(717)
1,096
1.80
1.65
(0.71)
(0.71)
1.09
1.00
60,466
(36,745)
23,721
(804)
(12,391)
(12,443)
(1,917)
12,002
(5,795)
(3,056)
3,151
(4,392)
(676)
(1,917)
(886)
(2,803)
(306)
(3,109)
(7,992)
(11,101)
(4.08)
(4.08)
(10.48)
(10.48)
(14.56)
(14.56)
1 We define Adjusted EBITDA as EBITDA adjusted for costs associated with acquisitions, restructuring of the Group, share based payments, non-trading exchange
rate movements, impairment and impact of foreign exchange contracts. See note 5 of the financial statements for details. We present Adjusted EBITDA as
additional information because we understand that it is a measure used by certain investors and because it is used as the measure of Group profit or loss.
However, other companies may present Adjusted EBITDA differently. EBITDA and Adjusted EBITDA are not measures of financial performance under IFRS
and should not be considered as an alternative to operating profit or as a measure of liquidity or an alternative to net income as indicators of our operating
performance or any other measure of performance derived in accordance with IFRS.
2 EBITDA is defined as earnings before interest, tax, depreciation, amortisation and impairment.
36
37
ANNUAL REPORT AND ACCOUNTS 2016ANNUAL REPORT AND ACCOUNTS 2016 Consolidated Statement of Financial Position
Group
Consolidated Statement of Changes in Equity
Group
Non-current assets
Property, plant and equipment
Intangible assets
Trade and other receivables
Deferred tax assets
Current assets
Inventories
Current tax receivable
Trade and other receivables
Short-term derivative assets
Cash and cash equivalents
Assets classified as held for sale
Total assets
Current liabilities
Trade and other payables
Short-term borrowings
Short-term derivative liabilities
Short-term provisions
Non-current liabilities
Long-term provisions
Deferred tax liabilities
Long-term derivative liabilities
Long-term borrowings
Liabilities classified as held for sale
Total liabilities
Net assets
Equity
Share capital
Share premium account
Treasury reserve
Other reserve
Special reserve
Merger reserve
Foreign currency translation reserve
Retained profit
Total equity
Notes
31 December 2016
£000s
31 December 2015
£000s
12
11
27
16
14
15
13
17
18
13
20
20
16
13
18
22
1,353
133,506
4,625
4,137
143,621
-
639
42,608
94
6,447
49,788
-
193,409
(64,775)
(5,737)
(1,089)
(1,364)
(72,965)
(223)
(4,655)
-
(26,162)
(31,040)
-
(104,005)
89,404
173
200
(960)
(37,128)
-
66,481
(73)
60,711
89,404
1,297
62,540
-
2,042
65,879
77
432
32,089
-
10,117
42,715
6,425
115,019
(46,061)
(5,214)
(201)
(1,649)
(53,125)
(954)
(3,218)
(24)
(30,359)
(34,555)
(2,128)
(89,808)
25,211
154
200
-
(37,128)
48,422
-
(181)
13,744
25,211
l
a
t
i
p
a
c
e
r
a
h
S
i
m
u
m
e
r
p
e
r
a
h
S
t
n
u
o
c
c
a
e
v
r
e
s
e
r
y
r
u
s
a
e
r
T
e
v
r
e
s
e
r
r
e
h
t
O
e
v
r
e
s
e
r
r
e
g
r
e
M
e
v
r
e
s
e
r
l
a
i
c
e
p
S
e
v
r
e
s
e
r
n
o
ti
a
l
s
n
a
r
t
y
c
n
e
r
r
u
c
n
g
i
e
r
o
F
t
fi
o
r
p
d
e
n
a
t
e
R
i
y
t
i
u
q
e
l
a
t
o
T
£000s
£000s
£000s
£000s
£000s
Balance at 1 January 2015
154
200
Loss for the year
Other comprehensive income:
Net exchange losses on translation of
foreign entities
Total comprehensive loss for the year
Transactions with owners:
Share based payments charge
Excess deferred tax on share
based payments
Balance at 31 December 2015
Profit for the year
Other comprehensive income:
Net exchange gains on translation of foreign
entities
Total comprehensive income for the year
Transactions with owners:
Shares issued for GlobalData Holding
acquisition
Dividends
Share buy back
Special reserve transfer
Share based payments charge
Excess deferred tax on share
based payments
-
-
-
-
-
-
-
-
-
-
154
-
200
-
-
-
19
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(960)
-
-
-
(37,128)
-
-
-
-
-
(37,128)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
66,481
£000s
48,422
£000s
£000s
£000s
(126)
23,106
34,628
-
-
-
-
-
-
(11,101)
(11,101)
(55)
-
(55)
(55)
(11,101)
(11,156)
-
-
2,066
(327)
2,066
(327)
48,422
-
(181)
-
13,744
1,096
25,211
1,096
-
-
-
-
-
-
-
-
-
-
(48,422)
-
-
108
108
-
108
1,096
1,204
-
-
-
-
-
-
-
66,500
(5,113)
-
48,422
2,764
(202)
(5,113)
(960)
-
2,764
(202)
Balance at 31 December 2016
173
200
(960)
(37,128)
66,481
-
(73)
60,711
89,404
The accompanying notes form an integral part of this financial report.
These financial statements were approved by the board of directors on 24 February 2017 and signed on its behalf by:
Bernard Cragg
Executive Chairman
Mike Danson
Chief Executive
Company Number 03925319
The accompanying notes form an integral part of this financial report.
38
39
ANNUAL REPORT AND ACCOUNTS 2016ANNUAL REPORT AND ACCOUNTS 2016
Consolidated Statement of Cash Flows
Group
Notes to the Consolidated Financial Statements
Group
Continuing operations
Cash flows from operating activities
Profit/ (loss) for the year from continuing operations
Adjustments for:
Depreciation
Amortisation
Finance costs
Taxation recognised in profit or loss
Loss on disposal of fixed assets
Non-trading foreign exchange loss
Share based payments charge
Increase in trade and other receivables
Decrease in inventories
Increase in trade payables
Revaluation of short and long-term derivatives
Movement in provisions
Cash generated from continuing operations
Interest paid (continuing operations)
Income taxes paid (continuing operations)
Net cash from operating activities (continuing operations)
Net decrease in cash and cash equivalents from discontinued operations
Total cash flows from operating activities
Cash flows from investing activities (continuing operations)
Acquisitions
Purchase of property, plant and equipment
Purchase of intangible assets
Net cash used in investing activities (continuing operations)
Net decrease in cash and cash equivalents from discontinued operations
Total cash flows used in investing activities
Cash flows from financing activities (continuing operations)
Repayment of short-term borrowings
Proceeds from long-term borrowings
Dividends paid
Share Buyback
Net cash (used in)/ from financing activities (continuing operations)
Net decrease in cash and cash equivalents from discontinued operations
Total cash flows (used in)/ from financing activities
Net (decrease)/ increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Effects of currency translation on cash and cash equivalents
Cash and cash equivalents at end of year
The accompanying notes form an integral part of this financial report.
Year ended
31 December 2016
£000s
Year ended
31 December 2015
£000s
1. GENERAL INFORMATION
1,813
725
14,553
955
(4,332)
48
1,571
2,764
(7,936)
1
5,121
770
(1,016)
15,037
(999)
(1,562)
12,476
(604)
11,872
(2,878)
(578)
(682)
(4,138)
-
(4,138)
(5,379)
-
(5,113)
(960)
(11,452)
-
(11,452)
(3,718)
10,117
48
6,447
(3,109)
676
4,392
886
306
-
774
2,066
(6,504)
73
9,018
216
2,151
10,945
(775)
(2,182)
7,988
(1,624)
6,364
(20,679)
(468)
(1,066)
(22,213)
-
(22,213)
(1,920)
20,000
-
-
18,080
-
18,080
2,231
8,261
(375)
10,117
Nature of operations
The principal activity of GlobalData Plc and its subsidiaries (‘the Group’) is to enable organisations in the Consumer, ICT and Healthcare
markets to gain competitive advantage by providing unique, high quality business information and services across multiple platforms.
GlobalData Plc (‘the Company’) is a company incorporated in the United Kingdom and listed on the Alternative Investment Market. The
registered office of the Company is John Carpenter House, John Carpenter Street, London, EC4Y 0AN. The registered number of the Company
is 03925319.
Basis of preparation
These financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) and IFRIC interpretations
as adopted by the European Union and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS.
The financial statements have been prepared under the historical cost convention as modified by the revaluation of derivative financial
instruments. These financial statements have been prepared in accordance with the accounting policies detailed below. The accounting
policies have been applied consistently throughout the Group.
These financial statements are presented in Pounds Sterling (£), which is also the functional currency of the Company. These financial
statements have been approved for issue by the Board of Directors.
Critical accounting estimates and judgements
The Group makes estimates and assumptions regarding the future. Estimates and judgements are continually evaluated based on historical
experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
In the future, actual experience may deviate from these estimates and assumptions. The estimates and assumptions that have a significant
risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year relate to valuation
of acquired intangible assets, recoverability of deferred tax assets, provisions for share based payments, provision for doubtful debts and
carrying value of goodwill and other intangibles.
Valuation of acquired intangibles
Management identified and valued acquired intangible assets on acquisitions that were made during the periods disclosed in the financial
statements. Management has applied judgements in identifying and valuing intangible assets separate from goodwill that consist of assessing
the value of software, brands, intellectual property rights and customer relationships. The Board have a policy of engaging professional
advisors on acquisitions with a purchase price greater than £10 million to advise and assist in calculating intangible asset values. The Group
consistently applies the following methodologies for each class of identified intangible:
• Customer relationships – Net present value of future cash flows
•
• Brands – Royalty relief method
Intellectual Property – Cost to recreate the asset
Assumptions are made on the useful life of an intangible and if shortened, would increase the amortisation charge recognised in the income
statement. The identified intangibles are set out in note 11.
There are a number of assumptions in estimating the present value of future cash flows including management’s expectation of future
revenue, renewal rates for subscription customers, costs, timing and quantum of future capital expenditure, long-term growth rates and
discount rates.
In addition to identifying and valuing intangible assets, a key judgement relates to identifying the date on which the Group assumes control of
acquisitions. For the GlobalData Holding Limited acquisition detailed in note 26, management identified the date of control as 6 January 2016,
as this is when a tax clearance and an irrevocable commitment to vote in favour of the resolutions to approve the transaction were obtained.
Recoverability of deferred tax assets
The Group has recognised a significant deferred income tax asset in its financial statements which requires judgement for determining the
extent of its recoverability at each balance sheet date. The Group assesses recoverability with reference to Board approved forecasts of future
taxable profits. These forecasts require the use of assumptions and estimates. Where the temporary differences are related to losses, relevant
tax law is considered to determine the availability of the losses to offset against the future taxable profits. A deferred tax asset additionally
exists in relation to the temporary tax and accounting difference in relation to the share based payment scheme. Additional disclosures on
the calculation of share based payments are provided in note 23.
40
41
ANNUAL REPORT AND ACCOUNTS 2016ANNUAL REPORT AND ACCOUNTS 2016
Notes to the Consolidated Financial Statements
Group
Notes to the Consolidated Financial Statements
Group
Share based payments
The Group operates a share based compensation plan under which the entity receives services from employees as consideration for equity
instruments (options) of the Group. The fair value of the employee services received in exchange for the grant of the options and awards is
recognised as an expense. The total amount to be expensed is determined by reference to the fair value of the options granted, excluding
the impact of any non-market service and performance vesting conditions (for example, profitability, sales growth targets and remaining an
employee of the entity over a specified time period). Non-market vesting conditions are included in assumptions about the number of options
and awards that are expected to vest. The total amount expensed is recognised over the vesting period, which is the period over which all
of the specified existing conditions are to be satisfied. At each reporting date, the entity revises its estimates of the number of options and
awards that are expected to vest based on the non-market vesting conditions. It recognises the impact of the revision to original estimates,
if any, in the income statement, with a corresponding adjustment to equity. The significant judgements involved in calculating the share
based payments charge are the fair value at the date of grant which is determined by using the Black-Scholes model, the senior management
retention rate which is determined with reference to historical churn and the estimated vesting periods which are determined with reference
to the Group’s forecasts. Additional disclosures on the calculation of share based payments are provided in note 23.
Provision for doubtful debts
The Group is required to judge when there is sufficient objective evidence to require the impairment of individual trade receivables. It does
this on the basis of the age of the relevant receivables, external evidence of the credit status of the customer entity and the status of any
disputed amounts. The Group will also review the previous payment profile of the customer and liaise with the customers’ management
team before concluding on whether a provision is required. The provision for doubtful debts and the ageing of overdue trade receivables are
included in note 15 to the financial statements. Additional disclosures on the assumptions behind the provision are provided in note 19 within
the section on credit risk.
Carrying value of goodwill and other intangibles
The carrying value of goodwill and other intangibles is assessed at least annually to ensure that there is no need for impairment. Performing
this assessment requires management to estimate future cash flows to be generated by the related cash generating unit, which entails making
judgements including the expected rate of growth of sales, margins expected to be achieved, the level of future capital expenditure required
to support these outcomes and the appropriate discount rate to apply when valuing future cash flows. See note 11 for further details on
intangibles and goodwill.
Going concern
The Group meets its day-to-day working capital requirements through free cash flow. Based on cash flow projections the Group considers the
existing financing facilities to be adequate to meet short-term commitments.
The finance facilities were issued with debt covenants which are measured on a quarterly basis. Management have reviewed forecasted cash
flows and there is no indication that there will be any breach in the next 12 months.
The Directors have a reasonable expectation that there are no material uncertainties that cast significant doubt about the Group’s ability to
continue as a going concern. Accordingly, the Group has prepared the annual report and financial statements on a going concern basis.
2. ACCOUNTING POLICIES
Basis of consolidation
a)
The consolidated financial statements include the accounts of the Company and all of its subsidiary undertakings.
•
Subsidiaries are those entities controlled by the Group. Control exists 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. The financial statements
of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control
ceases.
Intra-group transactions, balances and unrealised gains on transactions between Group companies are eliminated. Where necessary,
accounting policies of subsidiaries have been changed to ensure consistency with the Group’s accounting policies.
The results and cash flows relating to a business are included in the consolidated income statement and the consolidated statement of
cash flows from the date of acquisition or are excluded from the date of disposal as appropriate.
•
•
b) Change to accounting policies
This report has been prepared based on the accounting policies detailed in the Group’s financial statements for the year ended 31 December
2016 and is consistent with the policies applied in the previous year.
International Financial Reporting Standards (“Standards”) in issue but not yet effective
c)
The Group has not applied the following new and revised IFRSs that have been issued but are not yet effective:
•
IFRS 9 Financial Instruments (Issued on 24 July 2014)
•
•
•
•
•
•
•
•
•
•
IFRS 14 Regulatory Deferral Accounts (issued on 30 January 2014)
IFRS 15 Revenue from Contracts with Customers (issued on 28 May 2014) including amendments to IFRS 15: Effective date of IFRS 15
(issued on 11 September 2015)
IFRS 16 Leases (Issued on 13 January 2016)
Amendments to IAS 12: Recognition of Deferred Tax Assets for Unrealised Losses
Amendments to IAS 7: Disclosure Initiative (issued on 29 January 2016)
Clarifications to IFRS 15 Revenue from Contracts with Customers (issued on 12 April 2016)
Amendments to IFRS 2: Classification and Measurement of Share-based Payment Transactions (issued on 20 June 2016)
Annual improvements to IFRS 2014-2016 Cycle (Issued 8 December 2016) - Relating to IFRS 1 First time adoption of IFRS and IAS 28
Investment in associates and joint ventures
Annual improvements to IFRS 2014-2016 Cycle (Issued 8 December 2016) - Relating to IFRS 12 Disclosure of interest in other entities
IFRIC Interpretation 22 Foreign currency transactions and advance considerations (issued on 8 December 2016)
Management are reviewing the impact of IFRS 9, IFRS 15 and IFRS 16 and apart from these it is anticipated that there will be minimal
impact on the financial statements from the adoption of these new and revised standards. It is anticipated that there will be minimal impact
on revenue recognition once IFRS 15 becomes effective in January 2018. None of the above standards are effective and therefore have not
been applied in the financial statements.
d) Revenue recognition
Revenue is measured at the fair value of consideration received or receivable and comprises amounts derived from services performed by
the Group during the year.
•
•
•
Subscription based service revenue is recognised on a straight-line basis over the period of the contractual term.
Revenue from reports are recognised upon delivery.
Revenue from the provision of bespoke research services is recognised by reference to stage of completion. Stage of completion is
measured by reference to contractual obligations of each transaction.
Event revenue is recognised when the event is held.
Revenue from email advertising, lead generation sources and website publishing is recognised on completion of the relevant campaign
or transaction after performance criteria have been fulfilled. Commission from pay for performance actions such as clicks, leads or
sales generated resulting from advertising of a merchant’s products or services on customers’ websites is recognised on completion of
performance criteria and any defined cancellation period.
•
•
Where amounts have been invoiced in advance of services performed, this is included within deferred revenue.
e) Property, plant and equipment
Property, plant and equipment is stated at historic cost, including expenditure that is directly attributable to the acquired item, less
accumulated depreciation and impairment losses.
Depreciation is calculated on a straight line basis over the estimated useful life of an asset and is applied to the cost less any residual value.
The asset classes are depreciated over the following periods:
• Fixtures, fittings and equipment – over 3 to 5 years
Leasehold improvements – over 3 to 10 years
•
The useful life, the residual value and the depreciation method are reassessed at each reporting date.
Where there is an indication of impairment, the carrying value of the property, plant and equipment is compared to the higher of value in
use and the fair value less costs to sell. If the carrying value exceeds the higher of the value in use and fair value less the costs to sell the asset
then the asset is impaired and its value reduced.
f)
Intangible assets
Goodwill
Goodwill is recognised to the extent that it arises through a business combination and represents the difference between the consideration
transferred and the fair value of net identifiable assets acquired.
Goodwill is stated at cost less any accumulated impairment losses. Goodwill is allocated to appropriate cash generating units (those expected
to benefit from the business combination) and is tested annually for impairment. In testing for impairment, the recoverable amount of a CGU
based on value-in-use calculations is compared to the carrying value of goodwill. These calculations use pre-tax cash flow projections based
on five-year financial budgets approved by management. Cash flows beyond the five year period are extrapolated using estimated long term
growth rates. Any impairment losses in respect of goodwill are not reversed.
42
43
ANNUAL REPORT AND ACCOUNTS 2016ANNUAL REPORT AND ACCOUNTS 2016 Notes to the Consolidated Financial Statements
Group
Notes to the Consolidated Financial Statements
Group
Acquired intangible assets
Acquired intangible assets include software, customer relationships, brands and intellectual property (IP) rights. Intangible assets acquired in
material business combinations are capitalised at their fair value as determined by reference to the methodologies, judgements and policies
disclosed on page 41. Intangible assets are amortised on a straight-line basis over their estimated useful lives of three to ten years for brands
and customer relationships and twenty years for IP rights. Amortisation charges are accounted for within the other expenses category within
the income statement. Impairment charges are accounted for within the other expenses category within the income statement. Within note
5, the Group separates out amortisation of acquired intangibles from other group amortisation charges.
Computer software and websites
Non-integral computer software purchases are capitalised at cost as intangible assets. The Group also capitalises development costs associated
with new products in accordance with the development criteria prescribed within IAS 38 “Intangible Assets”. These costs are amortised over
their estimated useful lives of 3 years. Costs associated with implementing or maintaining computer software programmes are recognised as
an expense. Amortisation and impairment charges are accounted for within the administrative costs category within the income statement.
Impairment of intangible assets
Assets that have an indefinite useful life are not subject to amortisation but are reviewed for impairment annually or whenever events or
changes in circumstances indicate that the carrying amount may not be recoverable. Assets that are subject to amortisation are reviewed for
impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is
recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of
an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for
which there are separately identifiable cash flows (cash generating units).
i) Pensions
The Group’s contributions to pension schemes for its employees, all of which are defined contribution schemes, are charged to the income
statement as incurred.
j) Provisions
A provision is recognised in the statement of financial position when the Group has a legal obligation or constructive obligation as a result
of a past event, it is more likely than not that an outflow of resources will be required to settle that obligation, and a reliable estimate of the
amount can be made. Provisions are discounted if the time value of money is material.
k) Cash and cash equivalents
Cash and cash equivalents include cash in hand and deposits held on call, together with other short term highly liquid investments that are
readily convertible to known amounts of cash which are subject to an insignificant risk of changes in value.
l) Operating leases
Rentals applicable to operating leases where substantially all of the benefits and risks of ownership do not transfer to the lessee are charged
to the income statement on a straight line basis over the period of the lease. Rental income from sub-leasing property space is recognised on
a straight line basis over the period of the relevant lease.
m) Financial instruments
The Group has derivative and non-derivative financial instruments which comprise foreign currency contracts, receivables, cash, loans and
borrowings, and trade payables.
g) Taxation
Income tax on the profit or loss for the year comprises current and deferred tax.
Financial instruments are recognised initially at fair value plus, for instruments not at fair value through profit and loss, any directly attributable
transaction costs.
Current tax is the expected tax payable on the taxable income for the year, using rates substantively enacted at the reporting date, and any
adjustments to the tax payable in respect of previous years.
Deferred taxation is provided in full on temporary differences between the carrying amount of the assets and liabilities in the financial
statements and the tax base. Deferred tax assets are recognised only to the extent that it is probable that future taxable profits will be
available against which the temporary difference can be utilised. Deferred tax is determined using the tax rates that have been enacted or
substantially enacted by the reporting date, and are expected to apply when the deferred tax liability is settled or the deferred tax asset is
realised.
Deferred tax is provided on temporary differences arising on investments in subsidiaries except where the timing of the reversal of the
temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred tax is not provided on temporary differences arising on the initial recognition of goodwill or on assets and liabilities other than in a
business combination.
Tax is recognised in the income statement, except where it relates to items recognised as other comprehensive income, in which case it is
recognised in the statement of other comprehensive income, and tax which related to items recognised in equity is recognised in equity.
h) Foreign currencies
The results are presented in Pounds Sterling (£) which is the presentation currency of the Group.
Foreign currency transactions are translated into Sterling at the rates of exchange ruling at the date of the transaction, and if still in existence
at the year end the balance is retranslated at the rates of exchange ruling at the reporting date. Differences arising from changes in exchange
rates during the year are taken to the income statement.
The assets and liabilities of entities with a functional currency other than Sterling are expressed in Sterling using exchange rates prevailing
on the reporting date. Income and expense items and cash flows are translated at the average exchange rates for the period and exchange
differences arising are recognised in other comprehensive income. Additionally, opening reserves of entities with a functional currency other
than Sterling are stated at the rate prevalent at the date of acquisition and differences arising are recognised in other comprehensive income.
Such translation differences are recognised in the income statement in the period in which a foreign operation is disposed of.
A financial instrument is recognised if the Group becomes a party to the contractual provisions of the instrument. Financial assets are
de-recognised if the contractual rights to the cash flows from the financial assets expire or if the Group transfers the financial asset to
another party without retaining control of substantially all risks and rewards of the asset. Financial liabilities are de-recognised if the Group’s
obligations specified in the contract expire or are discharged or cancelled.
Cash comprises cash balances and highly liquid call deposits. Bank overdrafts that form an integral part of the Group’s cash management are
included as a component of cash for the purpose of the statement of cash flows.
Derivative financial instruments
The Group uses derivative financial instruments to reduce its exposure to fluctuations in foreign currency exchange rates. Derivatives are
measured at fair values and any movement in fair value is recognised in the income statement.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. These
assets are carried at amortised cost using the effective interest method, less any impairment losses. Accounts receivable are recorded initially
at fair value and subsequently measured at amortised cost using the effective interest method, less any provision for impairment due to
bad and doubtful accounts. The provision for doubtful debts is based on management’s assessment of amounts considered uncollectible for
specific customers or groups of customers based on age of debt, history of payments, account activity, economic factors and other relevant
information. The amount of the provision is the difference between the asset’s unamortised cost and the present value of estimated future
cash flows, discounted at an effective interest rate. The provision expense is recognised in the income statement.
Bad debts are written off against the provision for doubtful debts in the period in which it is determined that the debts are uncollectible. If
those debts are subsequently collected then a gain is recognised in the income statement.
Trade and other payables
Trade and other payables are initially measured at fair value, and are subsequently measured at amortised cost, using the effective interest
method.
n) Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is determined using a weighted average method.
44
45
ANNUAL REPORT AND ACCOUNTS 2016ANNUAL REPORT AND ACCOUNTS 2016 Notes to the Consolidated Financial Statements
Group
Notes to the Consolidated Financial Statements
Group
o) Borrowings and borrowing costs
Borrowings are recognised initially at fair value, net of transaction costs incurred, and subsequently at amortised cost. Any difference between
the proceeds (net of transaction costs) and the redemption value is recognised in the income statement over the period of the borrowings
using the effective interest method.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12
months from the reporting date.
Business Information
Total Revenue
A reconciliation of Adjusted EBITDA to loss before tax from continuing operations is set out below:
Borrowing costs, being interest and other costs incurred in connection with the servicing of borrowings, are recognised as an expense when
incurred.
p) Share based payments
The Group operates a share based compensation plan under which the entity receives services from employees as consideration for equity
instruments (options) of the Group. The fair value of the employee services received in exchange for the grant of the options and awards
is recognised as an expense in the income statement. The total amount to be expensed is determined by reference to the fair value of the
options granted (fair value at the date of grant determined using the Black-Scholes model), excluding the impact of any non-market service
and performance vesting conditions (for example, profitability, sales growth targets and remaining an employee of the entity over a specified
time period). Non-market vesting conditions are included in assumptions about the number of options and awards that are expected to vest.
The total amount expensed is recognised over the vesting period, which is the period over which all of the specified existing conditions are
to be satisfied. At each reporting date, the entity revises its estimates of the number of options and awards that are expected to vest based
on the non-market vesting conditions. It recognises the impact of the revision to original estimates, if any, in the income statement, with a
corresponding adjustment to the share based payments reserve within equity.
q) Dividends
Dividends on the Group’s ordinary shares are recognised as a liability in the Group’s financial statements, and as a deduction from equity, in
the period in which the dividends are declared. Where such dividends are proposed subject to the approval of the Group’s shareholders, the
dividends are only declared once shareholder approval has been obtained.
r) Employee Benefit Trust
The assets and liabilities of the Employee Benefit Trust have been included in the Group’s financial statements because the Employee Benefit
Trust is controlled by the Group.
The cost of purchasing own shares held by the Employee Benefit Trust are shown as a deduction in arriving at total shareholders’ equity.
3. SEGMENTAL ANALYSIS
The principal activity of GlobalData Plc and its subsidiaries is to enable organisations in the Consumer, ICT and Healthcare markets to gain
competitive advantage by providing unique, high quality business information and services across multiple platforms.
IFRS 8 “Operating Segments” requires the segment information presented in the financial statements to be that which is used internally by the
chief operating decision maker to evaluate the performance of the business and to decide how to allocate resources. The Group has identified
the Executive Directors as its chief operating decision maker.
Business information is provided to customers through one single brand via multiple channels by a dedicated content team that is centrally
managed by Research Directors who report directly to the Executive Directors. Business information is therefore considered to be the
operating segment of the Group.
The Group profit or loss is reported to the Executive Directors on a monthly basis and consists of earnings before interest, tax, depreciation,
amortisation, central overheads and other adjusting items.
Audior’s renumeration
Audit of the Company’s and the consolidated financial statements
Audit of subsidiary companies’ financial statements
Audit-related assurance services
Other non-audit services
46
Adjusted EBITDA
Other expenses (see note 5)
Depreciation
Amortisation (excluding amortisation of acquired intangible assets)
Finance costs
Loss before tax from continuing operations
Geographical analysis
From continuing operations
Year ended 31 December 2016
Revenue from external customers
Year ended 31 December 2015
Revenue from external customers
UK
£000s
22,840
UK
£000s
15,075
Europe
£000s
27,598
Europe
£000s
17,758
Americas
£000s
35,580
Rest of World
£000s
13,995
Americas
£000s
20,470
Rest of World
£000s
7,163
Intangible assets held in the US were £13.5 million, of which £11.6 million related to Goodwill. The Group also holds £2.6 million of deferred
tax asset in the US. All other non-current assets are held in the UK. There were no major customers. The largest customer represented less
than 2% of the Group’s consolidated revenue.
4. OPERATING LOSS
Operating loss is stated after the following expenses relating to continuing operations:
Depreciation of property, plant and equipment
Amortisation of intangible assets
(Gain)/ loss on foreign exchange
Operating lease expense – land and buildings
Operating lease expense – other
Auditor’s remuneration
Year ended
31 December 2016
£000s
100,013
Year ended
31 December 2015
£000s
60,466
100,013
20,580
(20,267)
(725)
(1,152)
(955)
(2,519)
60,466
12,002
(12,443)
(676)
(800)
(886)
(2,803)
Total
£000s
100,013
Total
£000s
60,466
Year ended 31
December 2016
£000s
725
14,553
(348)
2,220
12
229
Year ended 31
December 2016
£000s
75
125
25
4
229
Year ended 31
December 2015
£000s
676
4,392
105
1,836
46
198
Year ended 31
December 2015
£000s
70
92
25
11
198
47
ANNUAL REPORT AND ACCOUNTS 2016ANNUAL REPORT AND ACCOUNTS 2016
Notes to the Consolidated Financial Statements
Group
Notes to the Consolidated Financial Statements
Group
5. OTHER EXPENSES
Restructuring costs
M&A costs
Items associated with acquisitions and restructure of the Group
Share based payments charge
Revaluation of short and long-term derivatives
Non-trading foreign exchange loss
Amortisation of acquired intangibles
Total other expenses
Year ended 31
December 2016
£000s
1,289
472
Year ended 31
December 2015
£000s
4,331
1,464
1,761
2,764
770
1,571
13,401
20,267
5,795
2,066
216
774
3,592
12,443
•
•
•
•
•
Restructuring costs relates to redundancies and other restructuring, largely in relation to the integration of acquisitions made during the
current and comparative years.
The M&A costs relate to due diligence and corporate finance activity during the current and comparative years.
The share based payments charge relates to the share option scheme (see note 23).
The revaluation of short and long-term derivatives relates to movement in the fair value of the short and long-term derivatives detailed
in note 13.
Non-trading foreign exchange losses relate to non-cash exchange losses made on non-trading items such as loans denominated in foreign
currencies.
6. PARTICULARS OF EMPLOYEES
Employee benefit expense
From continuing operations
Wages and salaries
Social security costs
Pension costs
Share based payments charge
Year ended 31
December 2016
£000s
60,982
4,874
799
2,764
69,419
Year ended 31
December 2015
£000s
32,269
2,974
441
2,066
37,750
Pension costs represents payments made into defined contribution schemes.
Number of employees
The average monthly number of persons, including Executive Directors, employed by the Group during the year was as follows:
Sales and administrative staff
7. KEY MANAGEMENT COMPENSATION
Short-term employee benefits
Long-term employee benefits
Share based payments
Year ended 31
December 2016
No.
1,863
Year ended 31
December 2015
No.
978
Year ended 31
December 2016
£000s
2,598
48
610
3,256
Year ended 31
December 2015
£000s
1,666
12
800
2,478
Information regarding Directors’ remuneration, share options, bonuses and pension contributions are set out in the Directors’ Remuneration
Report on pages 28 and 29.
8. FINANCE INCOME AND COSTS
Bank interest charge
Loan interest
Other interest (receivable)/ charge
Year ended 31
December 2016
£000s
12
1,056
(113)
955
Year ended 31
December 2015
£000s
14
801
71
886
48
49
ANNUAL REPORT AND ACCOUNTS 2016ANNUAL REPORT AND ACCOUNTS 2016
Notes to the Consolidated Financial Statements
Group
Notes to the Consolidated Financial Statements
Group
10. EARNINGS PER SHARE
Year ended 31
December 2016
£000s
Year ended 31
December 2015
£000s
The calculation of the basic earnings per share is based on the earnings attributable to ordinary shareholders of the parent company divided
by the weighted average number of shares in issue during the year. The Group also has a share options scheme in place and therefore the
Group has calculated the dilutive effect of these options. The below table shows earnings per share for both continuing and discontinued
operations:
9. INCOME TAX
Income statement
Current income tax:
Current income tax
Adjustments in respect of prior years
Deferred income tax:
Excess of depreciation over capital allowances on property, plant and equipment and
intangible assets
Deferred tax on acquired intangibles
Movement on losses
Change in corporate tax rate
Deferred tax on share based payments
Adjustments in respect of prior years
Total income tax credit/ (charge) in income statement
(2,498)
1,331
(1,167)
75
2,754
(733)
(67)
444
3,026
5,499
4,332
(2,572)
1,094
(1,478)
22
719
242
31
418
(260)
1,172
(306)
Included in the deferred tax adjustment in relation to prior years is recognition of tax losses previously unrecognised in one of the Group’s
US subsidiaries.
The tax credit/ (charge) is reconciled to the standard corporation tax rate applicable in the UK as follows:
Loss on ordinary activities before tax
Tax at the UK corporation tax rate of 20% (2015: 20.25%)
Effects of:
Adjustments in respect of prior years
Income not taxable
Expenses not deductible for tax
Overseas tax not at a standard rate
Change in corporation tax rate
Unprovided deferred tax
Year ended 31
December 2016
£000s
(2,519)
Year ended 31
December 2015
£000s
(2,803)
504
4,357
510
177
(567)
(67)
(582)
4,332
568
834
-
(859)
(591)
31
(289)
(306)
Continuing operations
Basic
Profit/ (loss) for the year attributable to ordinary shareholders of the parent company
(£000s)
Weighted average number of shares (000s)
Basic earnings/ (loss) per share (pence)
Diluted
Profit/ (loss) for the year attributable to ordinary shareholders of the parent company
(£000s)
Weighted average number of shares* (000s)
Diluted earnings/ (loss) per share (pence)
Discontinued operations
Basic
Loss for the year attributable to ordinary shareholders of the parent company (£000s)
Weighted average number of shares (000s)
Basic loss per share (pence)
Diluted
Loss for the year attributable to ordinary shareholders of the parent company (£000s)
Weighted average number of shares* (000s)
Diluted loss per share (pence)
Total
Basic
Profit/ (loss) for the year attributable to ordinary shareholders of the parent company
(£000s)
Weighted average number of shares (000s)
Basic earnings/ (loss) per share (pence)
Diluted
Profit/ (loss) for the year attributable to ordinary shareholders of the parent company
(£000s)
Weighted average number of shares* (000s)
Diluted earnings/ (loss) per share (pence)
Year ended 31
December 2016
Year ended 31
December 2015
1,813
100,632
1.80
1,813
110,082
1.65
(717)
100,632
(0.71)
(717)
100,632
(0.71)
1,096
100,632
1.09
1,096
110,082
1.00
(3,109)
76,268
(4.08)
(3,109)
76,268
(4.08)
(7,992)
76,268
(10.48)
(7,992)
76,268
(10.48)
(11,101)
76,268
(14.56)
(11,101)
76,268
(14.56)
Reconciliation of basic weighted average number of shares to the diluted weighted average number of shares:
Basic weighted average number of shares
Share options in issue at end of year
Diluted weighted average number of shares
31 December 2016
No’000s
100,632
9,450
110,082
31 December2015
No’000s
76,268
7,558
83,826
* Where the share options in issue are anti-dilutive in respect of the diluted loss per share calculation in 2016 and 2015, the options have not been included in
the calculation.
50
51
ANNUAL REPORT AND ACCOUNTS 2016ANNUAL REPORT AND ACCOUNTS 2016
Notes to the Consolidated Financial Statements
Group
Notes to the Consolidated Financial Statements
Group
11. INTANGIBLE ASSETS
Cost
As at 1 January 2015
Additions: Business Combinations
Additions: Separately Acquired
Fair value adjustments
Foreign currency retranslation
Transfer to ‘Asset Held for Sale’
Classification
As at 31 December 2015
Additions: Business Combinations
Additions: Separately Acquired
Fair value adjustments
Foreign currency retranslation
Disposals
As at 31 December 2016
Amortisation
As at 1 January 2015
Charge for the year
Charge for the year from Assets held-
for-sale
Foreign currency retranslation
Transfer to ‘Asset Held for Sale’
Classification
As at 31 December 2015
Additions: Business Combinations
Charge for the year
Foreign currency retranslation
Disposals
As at 31 December 2016
Net book value
As at 31 December 2016
As at 31 December 2015
Software
£000s
Customer
relationships
£000s
Brands
£000s
IP rights
£000s
Goodwill
£000s
Total
£000s
5,359
-
1,066
-
(2)
-
6,423
461
682
-
112
(101)
7,577
(3,360)
(984)
-
(2)
-
(4,346)
(349)
(1,023)
(78)
80
(5,716)
14,193
1,656
-
-
-
-
15,849
9,726
-
-
-
-
25,575
(9,633)
(982)
-
-
-
(10,615)
-
(2,944)
-
-
(13,559)
1,893
2,924
-
-
-
-
4,817
5,878
-
-
-
-
10,695
(200)
(441)
-
-
-
(641)
-
(1,956)
-
-
(2,597)
12,267
7,337
-
-
-
(8,207)
11,397
11,132
-
-
-
-
22,529
(9,778)
(1,985)
(409)
-
7,709
(4,463)
-
(8,630)
-
-
(13,093)
41,022
16,551
-
241
-
(4,335)
53,479
57,824
-
152
-
-
111,455
(9,360)
-
-
-
-
(9,360)
-
-
-
-
(9,360)
74,734
28,468
1,066
241
(2)
(12,542)
91,965
85,021
682
152
112
(101)
177,831
(32,331)
(4,392)
(409)
(2)
7,709
(29,425)
(349)
(14,553)
(78)
80
(44,325)
1,861
2,077
12,016
5,234
8,098
4,176
9,436
6,934
102,095
44,119
133,506
62,540
Following the rationalisation of brands in January 2017, management has accelerated amortisation on a number of brand assets held by
the Group, totalling £1.0 million. The remaining brand intangible assets relate to the GlobalData and Verdict Research brands which were
acquired in 2016 and 2015 respectively. Additions as a result of business combinations in the year have been disclosed in further detail in
note 26.
Impairment tests for goodwill and intangible assets
Goodwill and intangibles are allocated to the cash generating unit (CGU) that is expected to benefit from the use of the asset.
The Group tests goodwill at each reporting date for impairment and whenever events or changes in circumstances indicate that the carrying
value may not be recoverable. The recoverable amount of a CGU is determined based on value in use calculations. These calculations use
pre-tax cash flow projections based on five year financial budgets approved by management. Cash flows beyond the five year period are
extrapolated using estimated long term growth rates.
The Group operates within a single operating segment, being Business Information. However, in accordance with IAS 36, Impairment of
assets, the Group has to consider impairment indicators for goodwill and intangible assets on the value of the cash generating units. The cash
generating units identified are Healthcare, Technology and Consumer.
Overall, the Group has significant headroom on its goodwill and intangibles carrying value and the assumptions used in the assessment are
of an insensitive nature.
Assumptions
The recoverable amounts of the CGUs are determined from value in use calculations, which are based on the cash flow projections for each
CGU. Value in use projections are based on Board approved forecasts, which cover the period 2017 - 2021. A terminal value calculation has
been determined post 2022. The key assumptions are set out below:
Increase in revenue
(for years 1 to 5)
Increase in costs
(for years 1 to 5)
Discount rate
Terminal growth rate
2016
3.00%
2015
3.00%
2016
2.00%
2015
2.00%
2016
9.48%
2015
11.07%
2016
2.00%
2015
2.00%
The value in use for each CGU is summarised below.
All values in the table are in £ million
Consumer
ICT
Healthcare
Total
Goodwill
26.1
16.6
59.3
102.0
Other Intangible assets
7.6
3.0
20.8
31.4
Value-in-use
99.8
103.3
96.7
299.8
Headroom
66.1
83.7
16.6
166.4
Management has undertaken sensitivity analysis taking into consideration the impact on key impairment test assumptions arising from a
range of possible future trading and economic scenarios on each CGU. The following scenarios would need to occur before impairment is
triggered within the Group:
Consumer
ICT
Healthcare
Revenue Growth Falls To
Discount Rate Rises To
(1.0%)
(3.6%)
1.7%
23.6%
40.5%
11.1%
No indication of impairment was noted from management’s review, there is significant headroom in each CGU. The sensitivity analysis
supports the substantial headroom and it would require a significant change in the trading environment for an impairment loss to be realised
within the Group.
Amortisation
Amortisation for purchased intangible assets is accounted for within the administrative costs category within the income statement.
Amortisation for acquired intangible assets is accounted for within other expenses within the income statement.
52
53
ANNUAL REPORT AND ACCOUNTS 2016ANNUAL REPORT AND ACCOUNTS 2016
Notes to the Consolidated Financial Statements
Group
Notes to the Consolidated Financial Statements
Group
12. PROPERTY, PLANT AND EQUIPMENT
13. DERIVATIVE ASSETS AND LIABILITIES
Cost
As at 1 January 2015
Additions
Foreign currency retranslation
Disposals
As at 31 December 2015
Additions: Business Combinations
Additions: Separately Acquired
Foreign currency retranslation
Disposals
As at 31 December 2016
Depreciation
As at 1 January 2015
Charge for the year
Foreign currency retranslation
As at 31 December 2015
Additions: Business Combinations
Charge for the year
Foreign currency retranslation
Disposals
As at 31 December 2016
Net book value
As at 31 December 2016
As at 31 December 2015
Fixtures, fittings &
equipment
£000s
Motor vehicles
£000s
Leasehold
Improvements
£000s
2,982
468
2
(5)
3,447
1,089
578
49
(171)
4,992
(1,702)
(652)
(2)
(2,356)
(849)
(699)
(60)
144
(3,820)
1,172
1,091
15
-
-
-
15
-
-
-
-
15
(15)
-
-
(15)
-
-
-
-
(15)
-
-
232
-
-
-
232
-
-
2
-
234
(2)
(24)
-
(26)
-
(26)
(1)
-
(53)
181
206
Total
£000s
3,229
468
2
(5)
3,694
1,089
578
51
(171)
5,241
(1,719)
(676)
(2)
(2,397)
(849)
(725)
(61)
144
(3,888)
1,353
1,297
Short-term derivative assets
Short-term derivative liabilities
Long-term derivative liabilities
Net derivative liability
31 December 2016
£000s
94
(1,089)
-
(995)
31 December 2015
£000s
-
(201)
(24)
(225)
Classification is based on when the derivatives mature. The fair values of derivatives are expected to impact the income statement over the
next year, dependant on movements in the fair value of the foreign exchange contracts. The movement in the year was a £770,000 charge to
the income statement (2015: charge of £216,000). The large movement was caused by volatility in the foreign exchange market following the
UK’s decision to leave the European Union on 23 June 2016.
The Group uses derivative financial instruments to reduce its exposure to fluctuations in foreign currency exchange rates. The notional
values of contract amounts outstanding are:
Expiring in the year ending:
31 December 2017
14. INVENTORIES
Raw materials
Work in progress
Euro
€’000
5,850
US Dollar
$’000
12,050
Indian Rupee
INR’000
66,868
31 December 2016
£000s
-
-
-
31 December 2015
£000s
39
38
77
54
55
ANNUAL REPORT AND ACCOUNTS 2016ANNUAL REPORT AND ACCOUNTS 2016
Notes to the Consolidated Financial Statements
Group
Notes to the Consolidated Financial Statements
Group
15. TRADE AND OTHER RECEIVABLES
16. DEFERRED INCOME TAX
Trade receivables
Prepayments
Other receivables and accrued income
Related party receivables (note 27)
31 December 2016
£000s
34,703
4,782
3,107
16
42,608
31 December 2015
£000s
24,045
2,888
5,156
-
32,089
The contractual value of trade receivables is £36.4 million (2015: £26.1 million). Their carrying value is assessed to be £34.7 million (2015:
£24.0 million) after assessing recoverability. The contractual value and the carrying value of other receivables are considered to be the same.
Amounts owed by related parties are repayable on demand and are non-interest bearing.
The ageing analysis of these trade receivables showing fully performing and past due but not impaired is as follows:
Not overdue
Not more than 3 months overdue
More than 3 months but not more than 1 year
31 December 2016
£000s
26,561
5,039
3,103
34,703
31 December 2015
£000s
20,273
1,646
2,126
24,045
The contractual amounts of the Group’s trade receivables are denominated in the following currencies:
Pounds Sterling
US Dollar
Euro
Australian Dollar
Movement on the Group’s provision for doubtful debts is as follows:
Balance brought forward
Provision for receivables impairment
Receivables written off during the year as uncollectable
Balance carried forward
31 December 2016
£000s
15,344
17,878
2,743
408
36,373
31 December 2015
£000s
12,474
10,557
2,548
518
26,097
31 December 2016
£000s
2,052
912
(1,294)
1,670
31 December 2015
£000s
2,058
841
(847)
2,052
The creation and release of the provision for doubtful debts have been included within revenue in the income statement. Provisions are
created and released on a specific customer level on a monthly basis when management assesses for possible impairment.
The other classes within trade and other receivables do not contain impaired assets.
The maximum exposure to credit risk at 31 December 2016 is the carrying value of each class of receivable mentioned above. The Group
does not hold any collateral as security. Before accepting any new customer, the Group uses a credit scoring system to assess the potential
customer’s credit quality. The trade receivables outstanding at year end have acceptable credit scores. There are no customers who
represent more than 5% of turnover.
Balance brought forward
Created upon acquisition of subsidiary
Credited to profit and loss account (continuing operations)
Charged to profit and loss account (discontinued operations)
Deferred tax recognised directly in reserves in relation to share based payments
Change in rate
Balance carried forward
31 December 2016
£000s
(1,176)
(4,639)
5,566
-
(202)
(67)
(518)
31 December 2015
£000s
457
(2,381)
1,203
(159)
(327)
31
(1,176)
The provision for deferred taxation consists of the tax effect of temporary differences in respect of:
Intangible assets purchased
Excess of tax allowances over depreciation on fixed assets
Deferred tax on share based payments
Trading losses
Balance carried forward
(4,655)
297
1,321
2,519
(518)
(3,218)
136
1,904
2
(1,176)
The gross asset and liability positions have been detailed on the Group’s balance sheet, as management believe this provides a clearer
representation of the deferred tax position as at 31 December 2016.
Deferred tax asset
Deferred tax liability
Net position
31 December 2016
£000s
4,137
(4,655)
(518)
31 December 2015
£000s
2,042
(3,218)
(1,176)
As at 31 December 2016, the utilisation of the deferred tax asset relating to tax losses is dependent on future taxable profits of approximately
£6.4 million and is subject to compliance with taxation authority requirements. The Group has continued to recognise these deferred tax
assets as it is probable that there will be available taxable profits to offset these losses based on current forecasts and recent taxable profits
in certain subsidiaries. As at 31 December 2016 the Group has unrecognised potential deferred tax assets of £0.7 million. This consisted of
a gross value of £4.2 million of unrecognised losses, which would give a future tax benefit of £0.7 million. These tax losses may be available
to be carried forward to offset against future taxable income. However their utilisation is contingent on the relevant subsidiaries producing
taxable profits over a significant period of time and is subject to compliance with the relevant taxation authority requirements. As at 31
December 2016 these subsidiaries have not made a taxable profit and there is not convincing other evidence that sufficient taxable profit will
be available in the future..
17. TRADE AND OTHER PAYABLES
Trade payables
Other taxation and social security
Accruals and deferred revenue
Related party creditors (note 27)
31 December 2016
£000s
7,809
1,599
55,367
-
64,775
31 December 2015
£000s
5,098
3,312
37,646
5
46,061
56
57
ANNUAL REPORT AND ACCOUNTS 2016ANNUAL REPORT AND ACCOUNTS 2016 Notes to the Consolidated Financial Statements
Group
Notes to the Consolidated Financial Statements
Group
31 December 2016
£000s
31 December 2015
£000s
The Group is exposed to foreign currency, interest rate, liquidity, credit and equity risks. Each of these risks, the associated financial instruments
and the management of those risks are detailed below.
19. FINANCIAL ASSETS AND LIABILITIES
5,737
5,214
The Group’s financial instruments are classified under IFRS as follows:
18. BORROWINGS
Current
Loans due within one year
Non-current
Long-term loans
26,162
30,359
Term loan and RCF
In July 2014, the Group refinanced its debt position. A US$17 million term loan was issued by The Royal Bank of Scotland to partially fund
the acquisition of Current Analysis Inc. This is repayable in quarterly instalments over 4 years, with total repayments due in 2017 being US$4
million. The outstanding balance as at 31 December 2016 was US$11 million.
The Group took out an additional term loan of £10 million in August 2015, which is repayable in quarterly instalments over 4 years, with total
repayments due in 2017 being £2.5 million. The outstanding balance as at 31 December 2016 was £6.9 million.
Furthermore, the Group also has a revolving capital facility (RCF) with The Royal Bank of Scotland. As at 31 December 2016, the Group had
total draw down of £16.4 million against a total facility of £17 million.
Interest is charged on the term loan and drawn down RCF at a rate of 2.25% over the London Interbank Offered Rate. Interest is charged on
the undrawn RCF at 0.9%.
Borrowings can be reconciled as follows:
Term loans issued by The Royal Bank of Scotland
RCF issued by The Royal Bank of Scotland
Capitalised fees, net of amortised amount
31 December 2016
£000s
31 December 2015
£000s
15,776
16,375
(252)
31,899
19,552
16,408
(387)
35,573
58
31 December 2016
Non-current assets
Related party receivables
Current assets
Cash
Short-term derivative assets
Trade receivables
Other receivables and accrued income
Related party receivables
Current liabilities
Short-term borrowings
Short-term derivative liabilities
Trade accounts payable
Accruals
Non-current liabilities
Long-term borrowings
31 December 2015
Current assets
Cash
Trade receivables
Other receivables
Accrued income
Current liabilities
Short-term borrowings
Short-term derivative liabilities
Trade accounts payable
Related party payables
Accruals
Non-current liabilities
Long-term derivative liabilities
Long-term borrowings
Fair value (through
profit or loss)
£000s
Loans and
receivables
£000s
Amortised cost
£000s
-
-
-
94
-
-
-
94
-
(1,089)
-
-
(1,089)
-
-
4,625
4,625
6,447
-
34,703
3,107
16
44,273
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(5,737)
-
(7,809)
(9,247)
(22,793)
(26,162)
(26,162)
Fair value (through
profit or loss)
£000s
Loans and
receivables
£000s
Amortised cost
£000s
-
-
-
-
-
-
(201)
-
-
-
(201)
(24)
-
(24)
10,117
24,045
5,156
672
39,990
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(5,214)
-
(5,098)
(5)
(8,467)
(18,784)
(18,985)
-
(30,359)
(30,359)
(24)
(30,359)
(30,383)
59
Total
£000s
4,625
4,625
6,447
94
34,703
3,107
16
44,367
(5,737)
(1,089)
(7,809)
(9,247)
(23,882)
(26,162)
(26,162)
Total
£000s
10,117
24,045
5,156
672
39,990
(5,214)
(201)
(5,098)
(5)
(8,467)
ANNUAL REPORT AND ACCOUNTS 2016ANNUAL REPORT AND ACCOUNTS 2016
Notes to the Consolidated Financial Statements
Group
Notes to the Consolidated Financial Statements
Group
Maturity analysis
Non-current assets
Related party receivables
Current assets
Cash
Short-term derivative assets
Trade receivables
Other receivables and accrued income
Related party receivables
Current liabilities
Short-term borrowings
Short-term derivative liabilities
Trade accounts payable
Accruals
Non-current liabilities
Long-term borrowings
Less than one
month
£000s
One to three
months
£000s
3 months
to 1 year
£000s
1 to 5 years
£000s
Total
£000s
-
-
-
4,625
4,625
6,447
11
13,026
-
-
(1,645)
(75)
(4,345)
-
-
13,419
-
46
17,785
3,107
16
-
(519)
(3,464)
(9,247)
-
7,724
-
37
3,458
-
-
(4,933)
(495)
-
-
-
(1,933)
-
-
434
-
-
-
-
-
-
6,447
94
34,703
3,107
16
(6,578)
(1,089)
(7,809)
(9,247)
(27,494)
(22,435)
(27,494)
(3,225)
The long term borrowing’s contractual features are detailed in note 18 and it is not expected that those loans will be repaid within a year or
until replaced with equivalent debt or equity financing. The debt shown in the table above is inclusive of the projected interest payments in
accordance with IFRS 7 (interest on short and long-term borrowings £2,173,000).
Reclassifications
There have been no reclassifications between financial instrument categories during the years ended 31 December 2016 and 31 December
2015.
Fair value of financial instruments
Financial instruments are either carried at amortised cost, less any provision for impairment, or fair value. The fair value of long-term
borrowings is the same as the carrying value of long-term borrowings as at 31 December 2016. The Group uses the following hierarchy for
determining and disclosing the fair value of financial instruments by valuation technique:
•
Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities;
Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or
•
indirectly; and
Level 3: techniques which use inputs which have a significant effect on the recorded fair value that are not based on observable market
data.
•
Market risk
The Group is exposed to market risk primarily from changes in foreign currency exchange rates and interest rates.
Currency risk
The Group’s primary objective in managing foreign currency risk is to protect against the risk that the eventual Sterling net cash flows will be
adversely affected by changes in foreign currency exchange rates. Due to the Group’s operations in India, the Group has entered into foreign
exchange contracts that limit the risk from movements in the Indian Rupee exchange rate with Sterling. The Group additionally enters into
foreign exchange contracts that limit the risk from movements in US Dollars and Euros with Sterling.
The Group’s exposure to foreign currencies arising from financial instruments is:
31 December 2016
Exposures
Cash
Short and long-term derivative assets/(liabilities)
Short and long-term borrowings
Trade receivables
Trade accounts payable
Net balance sheet exposure
31 December 2015
Exposures
Cash
Short and long-term derivative assets/(liabilities)
Short and long-term borrowings
Trade receivables
Trade accounts payable
Net balance sheet exposure
USD
£000s
1,272
(871)
(8,902)
17,878
(904)
8,473
USD
£000s
2,860
(239)
(10,204)
10,557
(135)
2,839
EUR
£000s
189
(164)
-
2,743
(126)
2,642
EUR
£000s
684
(25)
-
2,548
-
3,207
Other
£000s
606
40
-
408
(57)
997
Other
£000s
1,266
39
-
518
-
1,823
Total
£000s
2,067
(995)
(8,902)
21,029
(1,087)
12,112
Total
£000s
4,810
(225)
(10,204)
13,623
(135)
7,869
Forecast sales and purchases in foreign currencies have not been included in the table above as they are not financial instruments.
As at 31 December 2016 a movement of 10% in Sterling would impact the income statement as detailed in the table below:
Impact on Net earnings before income tax:
USD
EUR
10% increase
10% decrease
2016
£000s
941
294
1,235
2015
£000s
314
356
670
2016
£000s
(770)
(240)
(1,010)
2015
£000s
(259)
(292)
(551)
As at 31 December 2016, the only financial instruments measured at fair value were derivative financial liabilities and these are classified as
Level 2.
This analysis assumes a movement in Sterling across all currencies and only includes the effect of foreign exchange movements on financial
instruments. All other variables remain constant.
Type of Financial
Instrument at Level 2
Measurement
technique
Derivative assets and
liabilities
Present-value
method
Main assumptions
Determining the present value of financial instruments as the
current value of future cash flows, taking into account current
market exchange rates
Main inputs used
Observable market
exchange rates
Cash, trade receivables and trade accounts payable
The carrying amounts of these balances are approximately equivalent to their fair value because of the short term to maturity.
60
61
ANNUAL REPORT AND ACCOUNTS 2016ANNUAL REPORT AND ACCOUNTS 2016
Notes to the Consolidated Financial Statements
Group
Notes to the Consolidated Financial Statements
Group
Interest rate risk
The Group is exposed to interest rate risk on its overdraft and the outstanding loans to The Royal Bank of Scotland. The Group does not
manage this risk with the use of derivatives. No other liabilities accrue interest.
20. PROVISIONS
The movement in the provisions is as follows:
The table below shows how a movement in interest rates of 100 basis points would impact the income statement based on the additional
interest expense for the year then ended:
Impact on:
Net earnings before income tax
This analysis assumes all other variables remain constant.
100 basis point decrease
2015
2016
£000s
£000s
100 basis point increase
2016
£000s
2015
£000s
319
356
(319)
(356)
Liquidity risk
Liquidity risk represents the Group’s ability to meet its contractual obligations. The Group evaluates its liquidity requirements on an ongoing
basis. In general, the Group generates sufficient cash flows from its operating activities to meet its financial liabilities.
The Group’s main source of financing for its working capital requirements is free cash flow.
The Group’s exposure to liquidity risk arises from trade accounts payable and loans due to the Royal Bank of Scotland. All contractual cash
flows from trade accounts payable are the same as the carrying value of the liability due to their short-term nature.
At 31 December 2016, the Group has a revolving credit facility of £16.4 million, a US$17 million term loan (of which US$11 million is
outstanding as at 31 December 2016) and a £10 million term loan (of which £6.9 million is outstanding as at 31 December 2016) outstanding
with the Royal Bank of Scotland. See note 18 for further details.
Credit risk
In the normal course of its business, the Group incurs credit risk from cash and trade and other receivables. The Group has a credit policy that
is used to manage this exposure to credit risk, including credit checking prior to contracts being signed. The Group’s financial instruments do
not have significant concentration of risk with any related parties.
£49.0 million of the Group’s assets are subject to credit risk (31 December 2015: £39.3 million). The Group does not hold any collateral over
these amounts. See note 15 for further details of the Group’s receivables. The Group maintains a provision for estimated losses expected
to arise from customers being unable to make required payments. This provision takes into account known commercial factors impacting
specific customer accounts, as well as the overall profile of the Group’s receivables portfolio. In assessing the provision, factors such as past
collection history, the age of receivable balances, the level of activity in customer accounts, as well as general macro-economic trends, are
taken into account. Significant changes in these factors would likely necessitate changes in the doubtful debts provision. At present, however,
the Group considers the current level of its allowance for doubtful debts to be adequate to cover expected credit losses on trade receivables.
Bad debt expenses are reported in the income statement.
Equity risk
It is the Group’s policy to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain the
development of the business. See note 22 for further details of the Group’s equity. The impact of the sensitivity analysis noted in the various
risk categories above would impact the income statement for the year.
At 1 January 2015
Increase in provision
Utilised
Release of unutilised provision
At 31 December 2015
Increase in provision
Acquired through business combination
Utilised
Release of unutilised provision
At 31 December 2016
Current:
Non-current:
Onerous leases
£000s
217
15
(185)
(5)
Dilapidations
£000s
134
80
(44)
(31)
42
34
-
(32)
(10)
34
34
-
139
74
152
(7)
(66)
292
69
223
Other
£000s
101
2,421
(80)
(20)
2,422
20
-
(1,174)
(7)
1,261
1,261
-
Total
£000s
452
2,516
(309)
(56)
2,603
128
152
(1,213)
(83)
1,587
1,364
223
Onerous leases
Provision has been made for the net present value of future residual leasehold commitments. This provision has been calculated making
assumptions on future rental income, market rents, insurance and rates and this has then been discounted using a discount rate of 2% per
annum. This provision is expected to be utilised over the period of each specific lease.
Dilapidations
Provision has been made for the net present value of future dilapidations that are owed due to legal or constructive obligations under the
Group’s operating leases of office premises. The provision is expected to be utilised over the period to the end of each specific lease.
Other
Other provisions contain a liability of £1.2m for an unfavourable contract acquired as part of Verdict Research Limited in 2015. The contract
became onerous as a result of a management restructuring decision made post-acquisition and therefore the loss related to the provision was
charged to the income statement in the year ended 31 December 2015.
The remainder of the other provision relates to the Group’s obligations to pay commission to registered users of the Group’s websites. The
closing balance for this liability was £0.1m
62
63
ANNUAL REPORT AND ACCOUNTS 2016ANNUAL REPORT AND ACCOUNTS 2016 Notes to the Consolidated Financial Statements
Group
Notes to the Consolidated Financial Statements
Group
21. OPERATING LEASE COMMITMENTS
As at 31 December 2016 the Group had outstanding commitments for future minimum lease payments under non-cancellable leases, which
fell due as follows:
Land and Buildings
Within 1 year
Within 2 to 5 years
Over 5 years
Other
Within 1 year
Within 2 to 5 years
31 December 2016
£000s
31 December 2015
£000s
3,022
9,579
18,753
31,354
52
39
91
2,187
7,890
20,290
30,367
53
25
78
Capital management
The Group’s capital management objectives are:
• To ensure the Group’s ability to continue as a going concern
• To fund future growth and provide an adequate return to shareholders and, when appropriate, distribute dividends
The capital structure of the Group consists of net debt, which includes borrowings (note 18) and cash and cash equivalents, and equity.
The Company has two classes of shares. The ordinary shares carry no right to fixed income and each share carries the right to one vote at
general meetings of the Company.
The deferred shares do not confer upon the holders the right to receive any dividend, distribution or other participation in the profits of the
Company. The deferred shares do not entitle the holders to receive notice of or to attend and speak or vote at any general meeting of the
Company. On distribution of assets on liquidation or otherwise, the surplus assets of the Company remaining after payments of its liabilities
shall be applied first in repaying to holders of the deferred shares the nominal amounts and any premiums paid up or credited as paid up on
such shares, and second the balance of such assets shall belong to and be distributed among the holders of the ordinary shares in proportion
to the nominal amounts paid up on the ordinary shares held by them respectively.
There are no specific restrictions on the size of a holding nor on the transfer of shares, which are both governed by the general provisions of
the Articles of Association and prevailing legislation. The Directors are not aware of any agreements between holders of the Company’s shares
that may result in restrictions on the transfer of securities or on voting rights.
The Group sub-lets certain areas of its property portfolio. As at 31 December 2016, the Group had contracts with sub-tenants for the
following future minimum lease rentals:
No person has any special rights of control over the Company’s share capital and all its issued shares are fully paid.
31 December 2016
£000s
31 December 2015
£000s
With regard to the appointment and replacement of Directors, the Company is governed by its Articles of Association, the Companies Act and
related legislation. The Articles themselves may be amended by special resolution of the shareholders. The powers of Directors are described
in the Board Terms of Reference, copies of which are available on request.
230
783
869
1,882
160
641
27
828
Dividends
The final dividend for 2015 was 2.5p per share and was paid in June 2016. The total dividend for the current year was 6.5 pence per share,
with an interim dividend of 2.5 pence per share paid on 9 September 2016 to shareholders on the register at the close of business on 12
August 2016 and a final dividend of 4.0 pence per share to be paid on 12 May 2017 to shareholders on the register at the close of business on
18 April 2017. The ex-dividend date will be on 13 April 2017.
Allotted, called up and fully paid:
Ordinary shares at 1 January (1/14th pence)
Issue of shares: consideration GlobalData
Share buyback
31 December 2016
No’000
76,268
26,078
-
£000s
54
19
-
Ordinary shares c/f 31 December (1/14th pence)
102,346
Deferred shares of £1.00 each
100
102,446
73
100
173
31 December 2015
No’000
76,268
-
-
76,268
100
76,368
£000s
54
-
-
54
100
154
GlobalData Holding Limited Acquisition
The Group issued 26,078,431 ordinary shares as consideration for GlobalData Holding Limited and its subsidiaries. These shares rank pari
passu with the existing GlobalData Plc ordinary shares in issue.
Share Buyback
As detailed in note 23, during the period the Group purchased an aggregate amount of 270,000 shares at a total market value of £960,000.
The disclosures above are for both the Group and the Company.
Other reserve
Other reserves consist of a reserve created upon the reverse acquisition of the TMN Group Plc.
Foreign currency translation reserve
The foreign currency translation reserve contains the translation differences that arise upon translating the results of subsidiaries with a
functional currency other than Sterling. Such exchange differences are recognised in the income statement in the period in which a foreign
operation is disposed of.
Special reserve
The special reserve was created upon the capital reduction which occurred during 2013.
In order to facilitate the payment of dividends, the special reserve, constituted by an undertaking to the Court given in connection with the
reduction of the Company’s share premium account undertaken in May 2013 (the “Special Reserve”), has been released in accordance with
its terms pursuant to a resolution of the Board dated 23 February 2016 (all relevant creditors having been discharged or otherwise consented
to the reduction).
Merger reserve
The merger reserve was created to account for the premium on the shares issued in consideration for the purchase of GlobalData Holding
Limited in 2016.
Treasury reserve
The treasury reserve contains shares held in treasury by the Group and in the Group’s Employee Benefit Trust for the purpose of satisfying the
exercise of share options under the Company’s Employee Share Option Plan.
Land and Buildings
Within 1 year
Within 2 to 5 years
Over 5 years
22. EQUITY
Share capital
64
65
ANNUAL REPORT AND ACCOUNTS 2016ANNUAL REPORT AND ACCOUNTS 2016
Notes to the Consolidated Financial Statements
Group
Notes to the Consolidated Financial Statements
Group
The following assumptions were used in the valuation:
The following table summarises the Group’s share options outstanding at 31 December 2016:
23. SHARE BASED PAYMENTS
The Group created a share option scheme during the year ended 31 December 2010 and granted the first options under the scheme on 1
January 2011 to certain senior employees. Each option granted converts to one ordinary share on exercise. A participant may exercise their
options (subject to employment conditions) at any time during a prescribed period from the vesting date to the date the option lapses. For
these options to be exercised the Group’s earnings before interest, taxation, depreciation and amortisation, as adjusted by the Remuneration
Committee for significant or one-off occurrences, must exceed certain targets. The fair values of options granted were determined using the
Black-Scholes model. The inputs used in the model were:
•
• exercise price
• time to maturity
• annual risk-free interest rate and;
• annualised volatility
share price at date of grant
Award Tranche
Award 1
Award 3
Award 4
Award 6
Award 7
Award 8
Award 9
Award 10
Award 11
Award 12
Award 13
Grant Date
1 January 2011
1 May 2012
7 March 2014
22 September 2014
9 December 2014
31 December 2014
21 April 2015
28 September 2015
17 March 2016
17 March 2016
21 October 2016
Awards 2 and 5 have been fully forfeited.
Fair Value of
Share Price at
Grant Date
£1.09
£1.87
£2.55
£2.525
£2.075
£2.025
£2.040
£2.490
£2.064
£2.064
£4.425
Exercise Price
(Pence)
0.0714p
0.0714p
0.0714p
0.0714p
0.0714p
0.0714p
0.0714p
0.0714p
0.0714p
0.0714p
0.0714p
Estimated
Forfeiture
rate p.a.
15%
15%
15%
0%
15%
15%
15%
15%
0%
15%
15%
Weighted Average
of Remaining
Contractual Life
3.0
3.0
3.0
3.0
3.2
3.2
3.2
4
3.0
3.3
3.3
The estimated forfeiture rate assumption is based upon management’s expectation of the number of options that will lapse over the vesting
period. The assumptions were determined when the scheme was set up in 2011 and are reviewed annually. Management believe the current
assumptions to be reasonable based upon the rate of lapsed options.
The risk free interest rate and annualised volatility for awards granted in 2016 were 1.5% and 21% respectively.
Each of the awards are subject to vesting criteria set by the Remuneration Committee. Following on from the acquisition of the GlobalData
Healthcare and Consumer businesses, the targets were revised by the Remuneration Committee to take into account the transformed
business.
Award 1-4
Award 6
Award 7
Award 8
Award 9
Award 10
Award 12
Award 13
Group Achieves £10m EBITDA
20% Vest
N/a
N/a
N/a
N/a
N/a
N/a
N/a
Vesting Criteria
Group Achieves £26.7m EBITDA
40% Vest
50% Vest
40% Vest
50% Vest
40% Vest
N/a
35% Vest
35% Vest
Group Achieves £35m EBITDA
40% Vest
50% Vest
60% Vest
50% Vest
60% Vest
100% Vest
65% Vest
65% Vest
Award 11 relates to options awarded to Executive Chairman, Bernard Cragg during 2016. The options will vest on 31 January 2019 and 31
January 2021 in equal tranches.
66
The total charge recognised for the scheme during the twelve months to 31 December 2016 was £2,764,000 (2015: £2,066,000). The awards
of the scheme are settled with ordinary shares of the Company. During the period the Group purchased an aggregate amount of 270,000
shares at a total market value of £960,000. The purchased shares will be held in treasury and in the Group’s Employee Benefit Trust for the
purpose of satisfying the exercise of share options under the Company’s Employee Share Option Plan.
Reconciliation of movement in the number of options is provided below.
31 December 2015
Granted
Forfeited
31 December 2016
Reporting date
31 December 2011
31 December 2012
31 December 2013
31 December 2014
31 December 2015
31 December 2016
24. CAPITAL COMMITMENTS
There were no capital commitments at 31 December 2016 (2015: £nil).
25. DISPOSAL AND DISCONTINUED OPERATIONS
Options
outstanding
5,004,300
4,931,150
4,775,050
8,358,880
7,557,840
9,450,183
Option price
(pence)
1/14th
1/14th
1/14th
1/14th
Option price
(pence)
1/14th
1/14th
1/14th
1/14th
1/14th
1/14th
Number of
options
7,557,840
4,802,903
(2,910,560)
9,450,183
Remaining
life (years)
3.7
4.3
3.3
2.5
2.5
3.2
As the business becomes more focused on its business information offering, a number of legacy non-core business units have been
discontinued in recent years.
On 19 January the group disposed of some of its non-core B2B print businesses to a related party. The disposal was for consideration of £1,
together with a guaranteed loan of £4.5 million from the related party acquirers. The loan is discussed in more detail in note 27.
Current assets consisting of:
Inventories
Trade and other receivables
Other receivables
Cash and cash equivalents
Total current assets
Current liabilities consisting of:
Trade payables
Deferred income
Accruals
Total current liabilities
Net assets disposed of
Carrying Value
£000s
76
6,292
278
500
7,146
(270)
(1,068)
(695)
(2,033)
5,113
67
ANNUAL REPORT AND ACCOUNTS 2016ANNUAL REPORT AND ACCOUNTS 2016
Notes to the Consolidated Financial Statements
Group
Notes to the Consolidated Financial Statements
Group
The loss on disposal was calculated as follows:
26. ACQUISITIONS
Fair Value
£000s
4,500
(5,113)
(613)
GlobalData Holding Limited
On 6 January 2016 the Group acquired 100% of the share capital of GlobalData Holding Limited. The transaction was effected by a share for
share exchange, in which GlobalData Plc issued 26,078,431 ordinary shares to the shareholders of GlobalData Holding Limited. Based on the
Closing Price of 255 pence on 6 January 2016 (being the date of change of control), the acquisition value was £66.5 million.
The acquisition of GlobalData Holding Limited and its Healthcare business is a further enhancement to our business information proposition.
The amounts recognised for each class of assets and liabilities at the acquisition date were as follows:
Fair value of consideration
Less net assets disposed of
Loss on disposal
The loss on disposal has been included within administrative expenses within discontinued operations.
a) The results of the discontinued operations are as follows;
Discontinued operations
Revenue
Cost of sales
Gross (loss)/ profit
Administrative costs
Loss before tax from discontinued operations
Income tax credit
Loss for the year from discontinued operations
b) Loss before tax
This is arrived at after charging:
Amortisation
Impairment
c)
Cash flows from discontinued operations
Cash outflows from operating activities
Total cash outflows from discontinued operations
Year ended
31 December 2016
£000s
Year ended
31 December 2015
£000s
8
(73)
(65)
(652)
(717)
-
(717)
10,145
(10,013)
132
(8,925)
(8,793)
801
(7,992)
Year ended
31 December 2016
£000s
-
-
Year ended
31 December 2015
£000s
409
6,225
Year ended
31 December 2016
£000s
Year ended
31 December 2015
£000s
(604)
(604)
(1,624)
(1,624)
Intangible assets consisting of:
Brand
Customer relationships
Intellectual Property and content
Net assets acquired consisting of:
Tangible and intangible fixed assets
Cash
Trade receivables
Other receivables
Trade and other payables
Accruals and deferred revenue
Deferred tax
Fair value of net assets acquired
Consideration in shares
Less net assets acquired
Stamp duty paid on shares
Goodwill
Carrying Value
£000s
Fair Value
Adjustments
£000s
-
-
-
316
(614)
2,416
1,126
(585)
(12,354)
-
(9,695)
5,697
9,552
10,522
-
-
(21)
(830)
-
(5)
(4,639)
20,276
Fair Value
£000s
5,697
9,552
10,522
316
(614)
2,395
296
(585)
(12,359)
(4,639)
10,581
Fair Value
£000s
66,500
(10,581)
312
56,231
In 2015 the acquired businesses had revenues of £19.1 million and profits before tax of £1.4 million. The business has generated revenues of
£25.1 million and Adjusted EBITDA of £6.0 million in the year ended 31 December 2016.
The goodwill that arose on the combination can be attributed to the assembled workforce, know-how and expertise.
The Group incurred legal and professional costs of £0.8m in relation to the acquisition, which were recognised in other expenses.
68
69
ANNUAL REPORT AND ACCOUNTS 2016ANNUAL REPORT AND ACCOUNTS 2016
Notes to the Consolidated Financial Statements
Group
Notes to the Consolidated Financial Statements
Group
Pharmsource
On 11 November 2016, the Group acquired the trade and assets of Pharmsource, a provider of market intelligence, data and analysis for the
global contract bio/pharmaceutical industry.
The goodwill recognised in relation to the acquisition is as follows:
Consideration
Add carrying value of net liabilities acquired
Less fair value of intangible assets consisting of:
Brand
Customer relationships
Database
Goodwill
£000s
1,952
605
(181)
(173)
(610)
1,593
In line with the provisions of IFRS 3, further fair value adjustments may be required within the 12 month period from the date of acquisition.
Any fair value adjustments will result in an adjustment to the goodwill balance reported above.
In 2015 the acquired business had revenues of US$1.5 million and loss before tax of US$0.1 million. The business has generated revenues
of £0.2 million and Adjusted EBITDA of £0.0 million in the period from acquisition to 31 December 2016. If the acquisition had occurred on
1 January 2016, the Group year to date revenue for 2016 would have been £101.0 million and the Group loss before tax from continuing
operations would have been £2.4 million.
The goodwill that arose on the combination can be attributed to the assembled workforce, know-how and expertise.
The Group incurred legal and professional costs of £0.04m in relation to the acquisition, which were recognised in other expenses.
Cash Cost of Acquisitions
The cash cost of acquisitions, which reconciles to the cash flow statement, is reconciled as follows:
Acquisition of GlobalData Holding:
Stamp duty paid on shares
Cash acquired as part of opening balance sheet
Acquisition of Pharmsource
Acquisition of Verdict Research Limited
27. RELATED PARTY TRANSACTIONS
Year ended 31
December 2016
£000s
Year ended 31
December 2015
£000s
(312)
(614)
(1,952)
-
(2,878)
-
-
-
(20,679)
(20,679)
Corporate support services
Corporate support services are provided to and from other companies owned by Mike Danson, principally finance, human resources, IT and
facilities management. These are recharged to companies that consume these services based on specific drivers of costs, such as proportional
occupancy of buildings for facilities management, headcount for human resources services, revenue or gross profit for finance services
and headcount for IT services. The net recharge made from GlobalData Plc to these companies for the year ended 31 December 2016 was
£922,900 (2015: £1,346,000).
Acquisition of GlobalData Holding Limited and disposal of B2B print business
On 6 January 2016, the Group acquired GlobalData Holding Limited (a related party by nature of ownership). Also in January 2016, the Group
agreed to sell some of its non-core B2B print businesses, also to a related party. Further information on the acquisition can be found in note
26, with details of the disposal in note 25.
Loan to Progressive Trade Media Limited
As part of the disposal of the non-core B2B print businesses, the Group agreed to issue a loan to Progressive Trade Media Limited to fund the
purchase consideration. This loan is for £4.5m and repayable in 5 instalments, with the first instalment due in January 2018. Interest of 2.25%
above LIBOR is charged on the loan, with £125,000 charged in the year ended 31 December 2016.
Directors and Key Management Personnel
The remuneration of Directors is discussed within the Directors’ Remuneration Report on pages 28 and 29. Remuneration of key management
personnel is detailed in note 7.
Amounts outstanding
The Group has taken advantage of the exemptions contained within IAS 24 - Related Party Disclosures from the requirement to disclose
transactions between Group companies as these have been eliminated on consolidation. The amounts outstanding for other related parties
were:
Amounts due in greater than one year:
Progressive Trade Media Limited
Amounts due within one year:
GlobalData Limited
GlobalData Publications Inc
Estel Property Group Limited
Progressive Media Venture Limited
World Market Intelligence Limited
Progressive Trade Media Limited
Attentio Research Limited
Progressive Media International Limited
31 December 2016
£000s
31 December 2015
£000s
4,625
4,625
-
-
31 December 2016
£000s
-
-
(617)
-
557
(75)
137
14
16
31 December 2015
£000s
26
(2)
(618)
589
-
-
-
(5)
Mike Danson, GlobalData Plc’s Chief Executive, owns 69.7% of the Company’s ordinary shares as at 24 February 2017. Mike Danson owns a
number of businesses that interact with GlobalData Plc. The principal transactions, which are all conducted on an arm’s length basis, are as
follows:
Accommodation
GlobalData Plc occupies buildings which are owned by Estel Property Investments Limited, a company wholly owned by Mike Danson. The
total rental expense, including service and management fees, in relation to the buildings owned by Estel Property Investments for the year
ended 31 December 2016 was £2,061,500 (2015: £2,083,700).
The parent company’s balances with related parties are disclosed on page 88 of the annual report. The Group has right of set off over these
amounts.
GlobalData Limited and GlobalData Publications Inc were acquired as part of the acquisition of GlobalData Holding Limited and balances are
therefore now eliminated on consolidation.
70
71
ANNUAL REPORT AND ACCOUNTS 2016ANNUAL REPORT AND ACCOUNTS 2016
Notes to the Consolidated Financial Statements
Group
Independent Auditor’s Report to the Members of Globaldata Plc
Company
SUBSIDIARY UNDERTAKINGS
Principal activity
%
100% Non-trading
100% Online direct marketing
100% Non-trading
100% Business Information
100% Non-trading
100% Performance advertising
100% Business Information
100% Business Information
Holding
Country of registration
Ordinary shares
England & Wales
Ordinary shares
England & Wales
Ordinary shares
England & Wales
Ordinary shares
England & Wales
Ordinary shares
England & Wales
Ordinary shares
England & Wales
Ordinary shares
England & Wales
Ordinary shares
England & Wales
Ordinary shares 100% Holding company
England & Wales
Ordinary shares 100% Holding company
England & Wales
Ordinary shares 100% Holding company
England & Wales
Ordinary shares 100% Non-trading
England & Wales
Australia
Ordinary shares
United States of America Ordinary shares
Ordinary shares
India
England & Wales
Ordinary shares
United States of America Ordinary shares
United States of America Ordinary shares
England & Wales
France
Singapore
England & Wales
England & Wales
England & Wales
Mexico
Subsidiary undertaking
TMN Media Limited
MutualPoints Limited
Electronic Direct Response Limited
Kable Business Intelligence Limited
ICD Research Limited
Internet Business Group Limited
Progressive Media Group Limited*
Dewberry Redpoint Limited*
Progressive Digital Media (Holdings) Limited
Progressive Capital Limited*
SPG Media Group Limited*
SPG Media Limited*
Progressive Digital Media Pty Ltd
Progressive Digital Media Inc
Progressive Digital Media Pvt Ltd
ERC Group Limited
Progressive Digital Media Holdings, Inc
Current Analysis, Inc*
Current Intelligence and Analysis Ltd*
Current Analysis SAS*
Current Analysis Asia Pacific Pty. Ltd*
Cornhill Publications Limited*
Canadean Limited
Kable Intelligence Limited*
Canadean Mexico Y Centro America, F. De R.L. De C.V*
Progressive Digital Media Limited
England & Wales
(formerly Verdict Research Limited)
Ordinary shares
Ordinary shares
England & Wales
GlobalData Holding Limited
England & Wales
Ordinary shares
GlobalData Limited*
United States of America Ordinary shares
GlobalData Publications, Inc*
Singapore
GlobalData Pte Limited*
Australia
GlobalData Australia Pty Limited*
Canada
GlobalData Canada Limited*
England & Wales
JBAD Limited*
GlobalData Research Centre Private Limited*
India
Canadean Brasil Consultoria E Pesquisas De Mercado Ltda* Brazil
100% Business Information
100% Business Information
100% Business Information
100% Business Information
100% Holding company
100% Business Information
Ordinary shares 100% Business Information
Ordinary shares 100% Business Information
Ordinary shares 100% Business Information
Ordinary shares 100% Non-trading
Ordinary shares
Ordinary shares
Ordinary shares
100% Business Information
100% Holding company
100% Business Information
100% Business Information
Ordinary shares 100% Business Information
100% Business Information
Ordinary shares
100% Business Information
Ordinary shares
100% Business Information
Ordinary shares
100% Business Information
Ordinary shares
100% Business Information
Ordinary shares
100% Business Information
100% Business Information
100% Business Information
*indirectly held
72
We have audited the parent company financial statements of GlobalData plc for the year ended 31 December 2016 which comprise the
company statement of financial position, the company statement of cash flows, the company statement of changes in equity and the related
notes. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting
Standards (IFRSs) as adopted by the European Union and as applied in accordance with the provisions of the Companies Act 2006.
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our
audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an
auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other
than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of directors and auditors
As explained more fully in the Statement of Directors’ responsibilities, set out on page 31, the directors are responsible for the preparation of
the parent company financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express
an opinion on the parent company financial statements in accordance with applicable law and International Standards on Auditing (UK and
Ireland). Those standards require us to comply with the Auditing Practices Board’s (APB’s) Ethical Standards for Auditors.
Scope of the audit of the financial statements
A description of the scope of an audit of financial statements is provided on the Financial Reporting Council’s website at www.frc.org.uk/
auditscopeukprivate.
Opinion on financial statements
In our opinion the parent company financial statements:
• give a true and fair view of the state of the company’s affairs as at 31 December 2016;
•
have been properly prepared in accordance with IFRS as adopted by the European Union; and have been prepared in accordance with the
requirements of the Companies Act 2006.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
•
the information given in the strategic report and the directors’ report for the financial year for which the financial statements are prepared
is consistent with the parent company financial statements; and
the strategic report and the directors’ report have been prepared in accordance with applicable legal requirements.
•
Matter on which we are required to report under the Companies Act 2006
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not
identified material misstatements in the strategic report or the directors’ report.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
•
adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from
branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors’ remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
•
•
•
Other matters
We have reported separately on the group financial statements of GlobalData Plc for the year ended 31 December 2016.
Nicholas Page
Senior Statutory Auditor
for and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
London
24 February 2017
73
ANNUAL REPORT AND ACCOUNTS 2016ANNUAL REPORT AND ACCOUNTS 2016 Company Statement of Financial Position
Company
Company Statement of Changes in Equity
Company
i
s
g
n
n
r
a
e
d
e
n
a
t
e
R
i
£000s
5,243
(4,389)
2,066
2,920
(5,439)
-
(5,113)
-
48,422
2,764
43,554
y
t
i
u
q
e
l
a
t
o
T
£000s
61,193
(4,389)
2,066
58,870
(5,439)
66,500
(5,113)
(960)
-
2,764
116,622
l
a
t
i
p
a
c
e
r
a
h
S
£000s
154
-
-
154
-
19
-
-
-
-
173
i
m
u
m
e
r
p
e
r
a
h
S
t
n
u
o
c
c
a
£000s
200
-
-
200
-
-
-
-
-
-
200
e
v
r
e
s
e
r
y
r
u
s
a
e
r
T
e
v
r
e
s
e
r
r
e
h
t
O
e
v
r
e
s
e
r
r
e
g
r
e
M
e
v
r
e
s
e
r
l
a
i
c
e
p
S
£000s
-
£000s
7,174
£000s
-
£000s
48,422
-
-
-
-
-
-
(960)
-
-
(960)
-
-
7,174
-
-
-
-
-
-
7,174
-
-
-
-
66,481
-
-
-
-
66,481
-
-
48,422
-
-
-
-
(48,422)
-
-
Balance at 1 January 2015
Loss for the year
Transactions with owners:
Share based payments charge
Balance at 31 December 2015
Loss for the year
Transactions with owners:
Shares issued for GlobalData acquisition
Dividends
Share buyback
Special reserve transfer
Share based payments charge
Balance at 31 December 2016
The accompanying notes form an integral part of this financial report.
Non-current assets
Property, plant and equipment
Intangible assets
Investments
Current assets
Trade and other receivables
Short-term derivative assets
Current tax receivable
Cash and cash equivalents
Total assets
Current liabilities
Trade and other payables
Short-term derivative liabilities
Short-term borrowings
Non-current liabilities
Long-term provisions
Long-term derivative liabilities
Long-term borrowings
Total liabilities
Net assets
Equity
Share capital
Share premium account
Treasury reserve
Other reserve
Merger reserve
Special reserve
Retained earnings
Equity attributable to equity holders
Notes
31 December
2016
£000s
31 December
2015
£000s
5
4
6
7
8
9
8
11
10
8
11
1,048
1,542
164,119
166,709
22,283
54
-
2,131
24,468
191,177
(41,459)
(1,089)
(5,737)
(48,285)
(108)
-
(26,162)
(26,270)
(74,555)
116,622
173
200
(960)
7,174
66,481
-
43,554
116,622
1,126
1,625
94,541
97,292
13,009
-
1,810
14,524
29,343
126,635
(31,869)
(240)
(5,214)
(37,323)
(58)
(25)
(30,359)
(30,442)
(67,765)
58,870
154
200
-
7,174
-
48,422
2,920
58,870
These financial statements were approved by the board of directors on 24 February 2017 and signed on its behalf by:
Bernard Cragg
Executive Chairman
Mike Danson
Chief Executive
The accompanying notes form an integral part of this financial report.
Company loss for the year: £5,439,000 (2015: loss of £4,389,000)
Company number: 03925319
74
75
ANNUAL REPORT AND ACCOUNTS 2016ANNUAL REPORT AND ACCOUNTS 2016
Company Statement of Cash Flows
Company
Notes to the Company Financial Statements
Company
Cash flows from operating activities
Loss after taxation
Adjustments for:
Depreciation
Amortisation
Finance expense
Revaluation of foreign currency loan
Movement in provision
Revaluation of derivatives
(Increase)/ decrease in trade and other receivables
(Decrease)/ increase in trade and other payables
Cash (used in)/ generated by operations
Interest paid
Income taxes paid
Net cash (used in)/ from operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
Purchase of intangible assets
Acquisition of Verdict Research Limited
Acquisition of GlobalData Holding
Net cash used in investing activities
Cash flows from financing activities
Proceeds from long-term borrowings
Repayment of short-term borrowings
Share Buyback
Dividends paid
Net inflow from inter-company loans
Net cash (used in)/ from financing activities
Net (decrease)/ increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
The accompanying notes form an integral part of this financial report.
Year ended 31
December 2016
£000s
Year ended
31 December 2015
£000s
1. GENERAL INFORMATION
(5,439)
549
741
1,095
1,603
49
770
(981)
(3,774)
(5,387)
(1,014)
-
(6,401)
(471)
(658)
-
(314)
(1,443)
-
(5,378)
(960)
(5,113)
6,902
(4,549)
(12,393)
14,524
2,131
(4,389)
489
440
854
569
(1)
256
1,427
3,310
2,955
(775)
(1,810)
370
(395)
(1,056)
(25,087)
-
(26,538)
20,000
(1,920)
-
-
14,036
32,116
5,948
8,576
14,524
Nature of operations
The principal activity of GlobalData Plc is as a holding company of subsidiary entities which are engaged in enabling organisations in the
Consumer, ICT and Healthcare markets to gain competitive advantage by providing unique, high quality business information and services
across multiple platforms.
GlobalData Plc (‘the Company’) is a company incorporated in the United Kingdom and listed on the Alternative Investment Market. The
registered office of the Company is John Carpenter House, John Carpenter Street, London, EC4Y 0AN. The registered number of the Company
is 03925319.
Going concern
The Company meets its day-to-day working capital requirements through free cash flow. Based on cash flow projections the Company
considers the existing financing facilities to be adequate to meet short-term commitments.
The existing finance facilities were issued with debt covenants which are measured on a quarterly basis. Management have reviewed
forecasted cash flows and there is no indication that there will be any breach in the next 12 months.
The Directors have a reasonable expectation that there are no material uncertainties that cast significant doubt about the Company’s ability
to continue as a going concern. Accordingly, the Company has prepared the annual report and financial statements on a going concern basis.
Critical accounting estimates and judgements
The Company makes estimates and assumptions regarding the future. Estimates and judgements are continually evaluated based on historical
experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
In the future, actual experience may deviate from these estimates and assumptions. The estimates and assumptions that have a significant
risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year relate to carrying value of
investments and provisions for share based payments.
Carrying value of investments
The carrying value of investments is assessed at least annually to ensure that there is no need for impairment. Performing this assessment
requires management to estimate future cash flows to be generated by the related investment, which may entail making judgements
including the expected rate of growth of sales, margins expected to be achieved, the level of future capital expenditure required to support
these outcomes and the appropriate discount rate to apply when valuing future cash flows.
Share based payments
The Group operates a share based compensation plan under which the entity receives services from employees as consideration for equity
instruments (options) of the Group. The fair value of the employee services received in exchange for the grant of the options and awards is
recognised as an expense in the Group income statement. The total amount to be expensed is determined by reference to the fair value of the
options granted, excluding the impact of any non-market service and performance vesting conditions (for example, profitability, sales growth
targets and remaining an employee of the entity over a specified time period). Non-market vesting conditions are included in assumptions
about the number of options and awards that are expected to vest. The total amount expensed is recognised over the vesting period, which is
the period over which all of the specified existing conditions are to be satisfied. At each reporting date, the entity revises its estimates of the
number of options and awards that are expected to vest based on the non-market vesting conditions. It recognises the impact of the revision
to original estimates, if any, in the Group income statement, with a corresponding adjustment to the share based payments reserve within
equity. The significant judgements involved in calculating the share based payments charge are the fair value at the date of grant which is
determined by using the Black-Scholes model, the senior management retention rate which is determined with reference to historical churn
and the estimated vesting periods which are determined with reference to the Group’s forecasts.
The Company does not directly employ those participating in the share based payments scheme as they are employed by other Group
companies. The issue of share incentives by the Company to employees of its subsidiaries represents additional capital contributions. An
addition to the Company’s investment in Group undertakings is reported with a corresponding increase in shareholders’ funds.
76
77
ANNUAL REPORT AND ACCOUNTS 2016ANNUAL REPORT AND ACCOUNTS 2016 Notes to the Company Financial Statements
Company
Notes to the Company Financial Statements
Company
2. ACCOUNTING POLICIES
a) Basis of preparation
The parent company financial statements have been prepared in accordance with applicable IFRS as adopted by the European Union and as
applied in accordance with the provisions of the Companies Act 2006.
As permitted by section 408 of the Companies Act 2006, the income statement of the Company is not presented. The Company’s loss for the
year ended 31 December 2016 is £5.4 million (year ended 31 December 2015: loss £4.4 million).
b) Change to accounting policies
This report has been prepared based on the accounting policies detailed in the Group’s financial statements for the year ended 31 December
2016 and is consistent with the policies applied in the previous year.
c) Property, plant and equipment
Property, plant and equipment is stated at historic cost, including expenditure that is directly attributable to the acquired item, less
accumulated depreciation and impairment losses.
Depreciation is calculated on a straight line basis over the deemed useful life of an asset and is applied to the cost less any residual value. The
asset classes are depreciated over the following periods:
• Computer and equipment – over 3 to 5 years
Leasehold improvements – over 3 to 10 years
•
The useful life, the residual value and the depreciation method is assessed annually.
Where there is an indication of impairment, the carrying value of the property, plant and equipment is compared to the higher of value in
use and the fair value less costs to sell. If the carrying value exceeds the higher of the value in use and fair value less the costs to sell then the
asset is impaired and an impairment loss recognised in profit or loss.
d) Intangible assets
Computer software
Non-integral computer software purchases are capitalised at cost as intangible assets. The Company also capitalises development costs
associated with new products in accordance with the development criteria prescribed within IAS 38 “Intangible Assets”. These costs are
amortised over their estimated useful lives of 3 years. Costs associated with implementing or maintaining computer software programmes
are recognised as an expense.
Investments
e)
Investments in subsidiaries are stated at cost less any provision for impairment.
f) Taxation
Income tax on the profit or loss for the year comprises current and deferred tax.
Current tax is the expected tax payable on the taxable income for the year, using rates substantively enacted at the reporting date, and any
adjustments to the tax payable in respect of previous years.
Deferred taxation is provided in full on temporary differences between the carrying amount of the assets and liabilities in the financial
statements and the tax base. Deferred tax assets are recognised only to the extent that it is probable that future taxable profits will be
available against which the temporary difference can be utilised. Deferred tax is determined using the tax rates that have been enacted or
substantially enacted by the reporting date, and are expected to apply when the deferred tax liability is settled or the deferred tax asset is
realised.
Deferred tax is provided on temporary differences arising on investments in subsidiaries except where the timing of the reversal of the
temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future.
Tax is recognised in the income statement, except where it relates to items recognised as other comprehensive income, in which case it is
recognised in the statement of other comprehensive income.
Tax relating to items recognised in equity is recognised directly in equity.
78
g) Foreign currencies
The results are presented in Pounds Sterling (£) which is the functional currency of the Company.
Foreign currency transactions are translated into Sterling at the rates of exchange ruling at the date of the transaction, and if still in existence
at the year end the balance is retranslated at the rates of exchange ruling at the reporting date. Differences arising from changes in exchange
rates during the year are taken to the income statement.
h) Provisions
A provision is recognised in the balance sheet when the Company has a legal obligation or constructive obligation as a result of a past event,
it is more likely than not that an outflow of resources will be required to settle that obligation, and a reliable estimate of the amount can be
made. Provisions are discounted if the time value of money is material.
i) Cash and cash equivalents
Cash and cash equivalents include cash in hand and deposits held on call, together with other short term highly liquid investments that are
readily convertible to known amounts of cash which are subject to an insignificant risk of changes in value.
j) Dividends
Dividends on the Company’s ordinary shares are recognised as a liability in the Company’s financial statements, and as a deduction from
equity, in the period in which the dividends are declared. Where such dividends are proposed subject to the approval of the Company’s
shareholders, the dividends are only declared once shareholder approval has been obtained.
k) Financial instruments
The Group has derivative and non-derivative financial instruments which comprise foreign currency contracts, investments in equity,
receivables, cash, loans and borrowings, and trade payables.
Financial instruments are recognised initially at fair value plus, for instruments not at fair value through profit and loss, any directly attributable
transaction costs.
A financial instrument is recognised if the Company becomes a party to the contractual provisions of the instrument. Financial assets are de-
recognised if the contractual rights to the cash flows from the financial assets expire or if the Company transfers the financial asset to another
party without retaining control of substantially all risks and rewards of the asset. Financial liabilities are de-recognised if the Company’s
obligations specified in the contract expire or are discharged or cancelled.
Derivative financial instruments
The Company uses derivative financial instruments to reduce its exposure to fluctuations in foreign currency exchange rates. Derivatives are
measured at fair values and any movement in fair value is recognised in the income statement.
Trade and other payables
Trade and other payables are initially measured at fair value, and are subsequently measured at amortised cost, using the effective interest
method.
l) Borrowings and borrowing costs
Borrowings are recognised initially at fair value, net of transaction costs incurred, and subsequently at amortised cost. Any difference
between the proceeds (net of transaction costs) and the redemption value is recognised in the income statement over the period of the
borrowings using the effective interest method.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12
months from the reporting date.
Borrowing costs, being interest and other costs incurred in connection with the servicing of borrowings, are recognised as an expense when
incurred.
79
ANNUAL REPORT AND ACCOUNTS 2016ANNUAL REPORT AND ACCOUNTS 2016
Notes to the Company Financial Statements
Company
Notes to the Company Financial Statements
Company
m) Share based payments
The Group operates a share based compensation plan under which the entity receives services from employees as consideration for equity
instruments (options) of the Group. The fair value of the employee services received in exchange for the grant of the options and awards is
recognised as an expense in the Group income statement. The total amount to be expensed is determined by reference to the fair value of the
options granted (fair value at the date of grant determined using the Black-Scholes model), excluding the impact of any non-market service
and performance vesting conditions (for example, profitability, sales growth targets and remaining an employee of the entity over a specified
time period). Non-market vesting conditions are included in assumptions about the number of options and awards that are expected to vest.
The total amount expensed is recognised over the vesting period, which is the period over which all of the specified existing conditions are to
be satisfied. At each reporting date, the entity revises its estimates of the number of options and awards that are expected to vest based on
the non-market vesting conditions. It recognises the impact of the revision to original estimates, if any, in the Group income statement, with
a corresponding adjustment to the share based payments reserve within equity.
The Company does not directly employ those participating in the share based payments scheme as they are employed by other Group
companies. The issue of share incentives by the Company to employees of its subsidiaries represents additional capital contributions. An
addition to the Company’s investment in Group undertakings is reported with a corresponding increase in shareholders’ funds.
3. DIVIDENDS
The final dividend for 2015 was 2.5p per share and was paid in June 2016. The total dividend for the current year was 6.5 pence per share,
with an interim dividend of 2.5 pence per share paid on 9th September 2016 to shareholders on the register at the close of business on 12th
August 2016 and a final dividend of 4.0 pence per share to be paid on 12 May 2017 to shareholders on the register at the close of business on
18 April 2017. The ex-dividend date will be on 13 April 2017.
5. PROPERTY, PLANT AND EQUIPMENT
As at 1 January 2015
Additions
As at 31 December 2015
Additions
As at 31 December 2016
Depreciation
As at 1 January 2015
Charge for the year
As at 31 December 2015
Charge for the year
As at 31 December 2016
Net book value
As at 31 December 2016
As at 31 December 2015
Leasehold
improvements
£000s
225
-
225
-
225
-
(22)
(22)
(22)
(44)
181
203
Computer
equipment
£000s
2,025
395
2,420
471
2,891
(1,030)
(467)
(1,497)
(527)
(2,024)
867
923
Total
£000s
2,250
395
2,645
471
3,116
(1,030)
(489)
(1,519)
(549)
(2,068)
1,048
1,126
4. INTANGIBLE ASSETS
Cost
As at 1 January 2015
Additions
As at 31 December 2015
Additions
As at 31 December 2016
Amortisation
As at 1 January 2015
Charge for the year
As at 31 December 2015
Charge for the year
As at 31 December 2016
Net book value
As at 31 December 2016
As at 31 December 2015
Computer software
£000s
1,968
1,056
3,024
658
3,682
(959)
(440)
(1,399)
(741)
(2,140)
1,542
1,625
80
81
ANNUAL REPORT AND ACCOUNTS 2016ANNUAL REPORT AND ACCOUNTS 2016 Notes to the Company Financial Statements
Company
Notes to the Company Financial Statements
Company
6. INVESTMENTS
Cost
As at 1 January 2015
Share based payments to employees of subsidiaries
Acquisition of Verdict Research Limited
As at 31 December 2015
Share based payments to employees of subsidiaries
Acquisition of GlobalData Holding
As at 31 December 2016
Impairment
As at 31 December 2015 and 2016
Net book value
As at 31 December 2016
As at 31 December 2015
Group undertakings
£000s
77,665
2,066
25,087
104,818
2,764
66,814
174,396
(10,277)
164,119
94,541
The Group uses derivative financial instruments to reduce its exposure to fluctuations in foreign currency exchange rates. The notional
values of contract amounts outstanding are:
Expiring in the year ending:
31 December 2017
9. TRADE AND OTHER PAYABLES
Trade payables
Other payables
Accruals and deferred revenue
Amounts owed to group undertakings
Amounts owed to related parties
Euro
€’000
5,850
US Dollar
$’000
12,050
31 December 2016
£000s
526
14
655
38,742
1,522
41,459
31 December 2015
£000s
412
1
3,980
25,360
2,116
31,869
The directors consider the carrying amount of trade payables approximates to their fair value. The effect of discounting trade and other
payables has been assessed and is deemed to be immaterial to the Company’s results.
Share based payments to employees of subsidiaries
The issue of share incentives by the Company to employees of its subsidiaries represents additional capital contributions. An addition to the
Company’s investment in Group undertakings is reported with a corresponding increase in shareholders’ funds.
Impairment indicators
Management have performed an assessment to identify whether there are any indicators of impairment to the investment balances. Sufficient
evidence has been obtained to support that there is no indication of impairment.
7. TRADE AND OTHER RECEIVABLES
Prepayments
Other receivables
Amounts owed by group undertakings
Amounts owed by related parties
Other taxation and social security
The carrying values are considered to be a reasonable approximation of fair value.
8. DERIVATIVE ASSETS AND LIABILITIES
Short-term derivative assets
Short-term derivative liabilities
Long-term derivative liabilities
Net derivative liability
31 December 2016
£000s
2,014
211
19,571
145
342
31 December 2015
£000s
1,541
74
11,278
86
30
22,283
13,009
31 December 2016
£000s
54
(1,089)
-
(1,035)
31 December 2015
£000s
-
(240)
(25)
(265)
Classification is based on when the derivatives mature. The fair values of derivatives are expected to impact the income statement over the
next year, dependant on movements in the fair value of the foreign exchange contracts. The movement in the year was £770,000 (2015:
£256,000).
10. PROVISIONS
At 1 January 2016
Increase in provision
Transfer from group undertaking
Release of unutilised provision
At 31 December 2016
Current:
Non-current:
11. BORROWINGS
Current
Loans due within one year
Non-current
Long-term loans
Dilapidations
£000s
58
25
28
(3)
108
-
108
31 December 2016
£000s
5,737
31 December 2015
£000s
5,214
26,162
30,359
Term loan and RCF
In July 2014, the Group refinanced its debt position. A US$17 million term loan was issued by The Royal Bank of Scotland to partially fund
the acquisition of Current Analysis Inc. This is repayable in quarterly instalments over 4 years, with total repayments due in 2017 being US$4
million. The outstanding balance as at 31 December 2016 was US$11 million.
The Group took out an additional term loan of £10 million in August 2015, which is repayable in quarterly instalments over 4 years, with total
repayments due in 2017 being £2.5 million. The outstanding balance as at 31 December 2016 was £6.9 million.
Furthermore, the Group also has a revolving capital facility (RCF) with The Royal Bank of Scotland. As at 31 December 2016, the Group had
total draw down of £16.4 million against a total facility of £17 million.
Interest is charged on the term loan and drawn down RCF at a rate of 2.25% over the London Interbank Offered Rate. Interest is charged on
the undrawn RCF at 0.9%.
82
83
ANNUAL REPORT AND ACCOUNTS 2016ANNUAL REPORT AND ACCOUNTS 2016
Notes to the Company Financial Statements
Company
Notes to the Company Financial Statements
Company
12. FINANCIAL ASSETS AND LIABILITIES
The Company’s financial instruments are classified under IFRS as follows:
Fair Value (through
profit or loss)
£000s
Loans and
receivables
£000s
Amortised cost
£000s
31 December 2016
Current assets
Cash
Short-term derivative assets
Other receivables
Amounts owed by group undertakings
Amounts owed by related parties
Current liabilities
Short-term derivative liabilities
Trade accounts payable
Other payables
Accruals
Amounts owed to group undertakings
Amounts owed to related parties
Short-term borrowings
Non-current liabilities
Long-term borrowings
-
54
-
-
-
54
(1,089)
-
-
-
-
-
-
(1,089)
-
-
2,131
-
211
19,571
145
22,058
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(526)
(14)
(655)
(38,742)
(1,522)
(5,737)
(47,196)
(26,162)
(26,162)
Total
£000s
2,131
54
211
19,571
145
22,112
(1,089)
(526)
(14)
(655)
(38,742)
(1,522)
(5,737)
(48,285)
(26,162)
(26,162)
31 December 2015
Current assets
Cash
Other receivables
Amounts owed by group undertakings
Amounts owed by related parties
Current liabilities
Short-term derivative liabilities
Trade accounts payable
Other payables
Accruals
Amounts owed to group undertakings
Amounts owed to related parties
Short-term borrowings
Non-current liabilities
Long-term derivative liabilities
Long-term borrowings
Fair Value (through
profit or loss)
£000s
Loans and
receivables
£000s
Amortised cost
£000s
-
-
-
-
-
(240)
-
-
-
-
-
-
(240)
(25)
-
(25)
14,524
74
11,278
86
25,962
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(412)
(1)
(3,980)
(25,360)
(2,116)
(5,214)
(37,083)
-
(30,359)
(30,359)
Total
£000s
14,524
74
11,278
86
25,962
(240)
(412)
(1)
(3,980)
(25,360)
(2,116)
(5,214)
(37,323)
(25)
(30,359)
(30,384)
84
85
ANNUAL REPORT AND ACCOUNTS 2016ANNUAL REPORT AND ACCOUNTS 2016 Notes to the Company Financial Statements
Company
Notes to the Company Financial Statements
Company
Maturity analysis
13. RELATED PARTY TRANSACTIONS
Less than one
month
£000s
One to three
months
£000s
3 months
to 1 year
£000s
1 to 5 years
£000s
Current assets
Cash
Short-term derivative assets
Other receivables
Amounts owed by group undertakings
Amounts owed by related parties
Current liabilities
Short-term derivative liabilities
Trade accounts payable
Other payables
Accruals
Amount owed to group undertakings
Amounts owed to related parties
Short-term borrowings
Non-current liabilities
Long-term borrowings
2,131
-
-
-
-
(75)
-
-
-
-
-
(1,645)
-
21
211
-
145
(519)
(526)
(14)
(655)
-
-
-
-
411
-
(1,337)
-
33
-
-
-
(495)
-
-
-
-
(1,522)
(4,933)
-
(6,917)
Total
£000s
2,131
54
211
19,571
145
(1,089)
(526)
(14)
(655)
(38,742)
(1,522)
(6,578)
-
-
-
19,571
-
-
-
-
-
(38,742)
-
-
(27,494)
(46,665)
(27,494)
(54,508)
The long-term borrowing’s contractual features are detailed in note 18 of the Group accounts and it is not expected that those loans will be
repaid within a year or until replaced with equivalent debt or equity financing. The debt shown in the table above is inclusive of the projected
interest payments in accordance with IFRS 7 (interest on short and long-term borrowings £2,173,000).
Reclassifications
There have been no reclassifications between financial instrument categories during the year ended 31 December 2016 and year ended 31
December 2015.
Please refer to note 19 of the Group accounts on financial assets and liabilities for the Group’s exposure to risk.
Credit risk
In the normal course of its business, the Company incurs credit risk from cash and other receivables. The Group has a credit policy that is used
to manage this exposure to credit risk, including credit checking prior to contracts being signed.
£22.1 million of the Company’s assets are subject to credit risk (31 December 2015: £26.0 million). The Company does not hold any collateral
over these amounts. Note 7 of the Company accounts give further details of the Company’s receivables, which are mainly amounts receivable
from Group undertakings.
86
Directors
The remuneration of the Directors of the Group and Company is set out on page 29 in the consolidated accounts of the Group within the
Directors Remuneration Report.
Corporate support services
Corporate support services are provided to and from other companies owned by Mike Danson, principally finance, human resources, IT and
facilities management. These are recharged to companies that consume these services based on specific drivers of costs, such as proportional
occupancy of buildings for facilities management, headcount for human resources services, revenue or gross profit for finance services
and headcount for IT services. The net recharge made from GlobalData Plc to these companies for the year ended 31 December 2016 was
£922,900 (2015: £1,346,000).
Acquisition of GlobalData Holding Limited and disposal of B2B print business
On 6th January 2016, the Group acquired GlobalData Holding Limited (a related party). Also in January 2016, the Group agreed to sell some
of its non-core B2B print businesses also to a related party. Further information on the acquisition can be found in note 26, with details of
the disposal in note 25.
Amounts outstanding to and from group undertakings
The amounts outstanding group undertakings were:
Amounts owed by group undertakings:
Progressive Capital Limited
GlobalData Publications Inc
Kable Business Intelligence Limited
GlobalData Limited
Progressive Digital Media (Holdings) Limited
Current Analysis Inc
Current Intelligence & Analysis Limited
Dewberry Redpoint Limited
MutualPoints Limited
Progressive Digital Media Pty Limited
Amounts owed to group undertakings:
Internet Business Group Limited
Progressive Media Group Limited
ERC Group Limited
Kable Intelligence Limited
Kable Business Intelligence Limited
Cornhill Publications Limited
Progressive Digital Media Limited
Dewberry Redpoint Limited
TMN Media Limited
Electronic Direct Response Limited
MutualPoints Limited
Progressive Digital Media Inc
Progressive Digital Media Limited
31 December 2016
£000s
31 December 2015
£000s
9,989
18
-
1,376
4,259
25
2,328
182
646
748
-
-
7,581
-
1,526
1,075
1,071
-
-
25
19,571
11,278
(1,973)
(22,810)
(571)
(24)
(242)
(2,263)
(7,059)
-
(466)
(847)
-
(1,381)
(1,106)
(38,742)
(1,617)
(13,918)
(3)
-
-
-
-
(1,677)
(5,999)
(672)
(717)
(64)
(693)
(25,360)
87
ANNUAL REPORT AND ACCOUNTS 2016ANNUAL REPORT AND ACCOUNTS 2016 Notes to the Company Financial Statements
Company
Advisers
Amounts outstanding to and from related parties
The amounts outstanding for related parties were:
Amounts owed by related parties:
Progressive Media International Limited
Estel Properties Investments Limited
Progressive Trade Media Limited
Amounts owed to related parties:
World Market Intelligence Limited
Attentio Research Limited
Progressive Media UK Limited
Financial News Publishing Limited
Progressive Media International Middle East FZ-LLC
Elite Luxury Publishing Inc
31 December 2016
£000s
31 December 2015
£000s
86
40
19
145
(1,483)
(39)
-
-
-
-
(1,522)
86
-
-
86
(1,628)
-
(149)
(24)
(238)
(77)
(2,116)
Company Secretary
Graham Lilley
Head Office and Registered Office
John Carpenter House
John Carpenter Street
London
EC4Y 0AN
Tel: + 44 (0) 20 7936 6400
Nominated Adviser and Broker
Nplus1 Singer Advisory LLP
1 Bartholomew Lane
London
EC2N 2AX
Solicitors
Osborne Clarke
2 Temple Back East
Temple Quay
Bristol
BS1 6EG
Auditor
Grant Thornton UK LLP
Grant Thornton House
Melton Street
London
NW1 2EP
Registrars
Capita Registrars Limited
Northern House
Woodsome Park
Fenay Bridge
Huddersfield
West Yorkshire
HD8 0GA
Bankers
The Royal Bank of Scotland Plc
280 Bishopsgate
London
EC2M 4RB
Registered number
Company No. 03925319
88
89
ANNUAL REPORT AND ACCOUNTS 2016ANNUAL REPORT AND ACCOUNTS 2016 We are an ambitious business which
challenges itself on a daily basis to be
better at what we do. Our ambition is to
provide our customers with world-class
products and customer service.
90
91
ANNUAL REPORT AND ACCOUNTS 2016ANNUAL REPORT AND ACCOUNTS 2016Chief Executive’s ReportChief Executive’s ReportStrategic ReportStrategic Report Head Office and Registered Office
John Carpenter House
John Carpenter Street
London
EC4Y 0AN
Tel: + 44 (0) 20 7936 6400
92
ANNUAL REPORT AND ACCOUNTS 2016Chief Executive’s ReportStrategic Report