GlobalData Plc
Annual
report and
accounts
For the year ended 31 December 2017
COMPANY NO. 03925319
Contents
STRATEGIC REPORT
2017 Highlights
Our Business
Principal Activity
Our Business Model
Executive Chairman’s Statement
Chief Executive’s Report
Key Achievements
Strategic Priorities
Financial Review
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
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
2017
Highlights
Group revenue increased by 22% to £121.7m
(2016: £100.0m)
2017
2016
£121.7m
£100.0m
Deferred revenue increased by 31% to £60.6m
(2016: £46.1m)
2017
2016
£60.6m
£46.1m
Adjusted EBITDA increased by 14% to £23.4m
(2016: £20.6m)
2017
2016
£23.4m
£20.6m
Cash from operations of £14.5m (2016: £15.0m)
2017
2016
£14.5m
£15.0m
Total dividend increased to 8p per share (2016: 6.5p)
2017
2016
8.0p
6.5p
Reliance on this document
Our Business Review on pages 5 to 17 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.
3
ANNUAL REPORT AND ACCOUNTS 2017
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.
2017 Highlights
Group revenue increased by 22% to £121.7m (2016: £100.0m)
2017
2016
£121.7m
£100.0m
Key Achievements
• Strong revenue growth across all regions
• Increased revenue visibility
• Acquisition of Ascential Jersey Holdings Limited (herein referred to as MEED)
• Strengthened business infrastructure and commercial scale
• New committed banking facilities of £75m
Financial Highlights
• Group revenue increased by 22% to £121.7m (2016: £100.0m)
• Organic revenue growth of 15%
• Deferred revenue increased by 31% to £60.6m (2016: £46.1m)
• Adjusted EBITDA1 increased by 14% to £23.4m (2016: £20.6m)
• Adjusted EBITDA margin1 of 19.2% (2016: 20.6%) reflecting content and infrastructure
investment
• Cash from operations of £14.5m (2016: £15.0m)
• Final dividend of 5.0 pence per share (2016: 4.0 pence); total dividend of 8.0 pence per
share (2016: 6.5 pence)
• Statutory loss before tax of £0.8m (2016: loss of £2.5m), which is inclusive of non-cash
charges of £14.1m of amortisation of intangibles, £5.3m share based payments and
£0.4m of unrealised operating foreign exchange losses.
• Net debt2 of £43.0m (2016: £25.5m)
Note 1: Adjusted EBITDA: Earnings before interest, tax, depreciation and amortisation, unrealised operating 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.
Note 2: Net Debt: Short and long-term borrowings less cash and cash equivalents.
5
ANNUAL REPORT AND ACCOUNTS 2017Strategic Report We have a clear
philosophy of owning
our own data and
intellectual property
together with powerful
analysis supporting our
clients’ businesses.
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 data and
analytics and services across multiple platforms.
The Group produces and owns premium data and analytics 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.
•
7
ANNUAL REPORT AND ACCOUNTS 2017Strategic Report “The consolidation
of GlobalData
into one brand
is continuing to
help simplify the
business and has
allowed us to invest
sensibly in content,
platform and sales
infrastructure
and process.”
Bernard Cragg
Executive Chairman
Executive Chairman’s Statement
GlobalData is transforming rapidly and significantly increasing its
industry coverage and commercial scale. We have made further
progress, with product and infrastructure development, as
well as having made two strategic acquisitions. Our results are
encouraging. We have achieved strong revenue growth and we exit
the year with record deferred revenue, which gives us confidence
for the forthcoming year.
The Group has announced that the Company is in advanced
discussions concerning the possible acquisition of Energy,
Construction and Financial Services data and analytics provider,
Research Views Limited, a private company owned by Mike Danson
and Wayne Lloyd and a number of other minority shareholders.
The Acquisition would constitute a related party transaction for
the purposes of Rule 13 of the AIM Rules for Companies, and the
Company’s independent directors would, amongst other things,
be required to confirm that the terms of the proposals are fair and
reasonable insofar as GlobalData’s shareholders are concerned.
The contemplated Acquisition remains subject to binding legal
agreements and there can be no certainty that these discussions
will lead to a transaction. If terms are agreed between the
respective parties, the Acquisition would require the approval of
GlobalData’s shareholders in a general meeting.
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
their strategic planning, competitive intelligence, new product
development, identifying new consumer trends, marketing
opportunities and new sales channel prospects.
At a time of increased uncertainty and ever-constant change we
aim to provide our clients with a realisable competitive advantage.
Brand Development
The consolidation of GlobalData into one brand is continuing to
help simplify the business and has allowed us to invest sensibly
in content, platform and sales infrastructure and process. The
high level of investment in the business is the reason behind our
margins not improving in the short term, however such investment
will enhance the prospects and credibility of our offering and
long-term growth prospects.
Our Acquisitions
Acquisitions form an important part of our overall strategy for
growth. We are focused on acquisitions which extend our industry
coverage, client reach and commercial scale.
The Group completed two acquisitions during the year. In April
2017, we acquired a bolt-on to broaden our Healthcare proposition,
Infinata. The integration of this acquisition has gone well and is
complete.
We also completed the $17.5m acquisition of MEED in December
2017. MEED provides premium data and analytics content with an
industry focus on construction. It supports the Group’s strategy
of expanding its premium subscription based services into global
markets and adds a further industry vertical. The Group has only
just started the integration process and this will continue through
2018.
Looking Forward
We are an ambitious business which challenges itself on a daily
basis to continually be better at what we do. We provide our
customers with world-class products and customer service with
an ambition to exceed their expectations at every interaction.
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 our reported
earnings and 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 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
focused on revenue growth, 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 that reflects our growth
and long-term prospects.
9
ANNUAL REPORT AND ACCOUNTS 2017Strategic Report
“We provide our
customers with
world-class
products and
customer service
with an ambition
to exceed their
expectations at
every interaction.”
Bernard Cragg
Executive Chairman
Executive Chairman’s Statement
Our Employees
The transition of the Group to one now focused on the provision
of data and analytics services to customers based around the
globe continues to be 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
On 31 December 2017, Simon Pyper stepped down from the Board.
The Board wishes Simon well for the future and also thanks him for
his major contribution to the business over the last ten years as
both Chief Executive Officer and latterly Chief Financial Officer.
Graham Lilley joined the Board as Chief Financial Officer with
effect from 1 January 2018. Graham was previously the Company’s
Finance Director.
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 5.0 pence per share (2016:
4.0 pence). The proposed final dividend will be paid on 27 April
2018 to shareholders on the register at the close of business on
16 March 2018. The ex-dividend date will be on 15 March 2018. The
proposed final dividend increases the total dividend for the year to
8.0 pence per share (2016: 6.5 pence).
Current Trading and Outlook
We have started the year well and remain confident that we will
make further progress.
Bernard Cragg
Executive Chairman
25 February 2018
11
ANNUAL REPORT AND ACCOUNTS 2017Strategic Report Strategic Report
Chief Executive’s Report
Over the last two years the Group has transformed significantly.
To note that 2017 was the second full year trading as GlobalData
shows the rapid growth path that we have been on as a Group. We
now have pro-forma Group revenues of over £130m, compared to
2015 revenues of £60m.
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.
KEY ACHIEVEMENTS
• Revenues of £121.7 million: Group revenue has grown by 22%
including the benefit of our acquisitions in the year. Our organic
revenue growth was 15%.
• Deferred Revenue of £60.6m: Deferred revenue has grown by
31% and organically by 14%. This gives the Group strong visibility
over its revenues for the forthcoming year.
• Data and content: During the year we have focused on improving
our offering, especially in Healthcare. The effect of investment
and acquisitions have considerably broadened our coverage and
expertise.
• Acquisition of MEED: The acquisition of MEED enhances the
Group’s industry coverage, to now include Construction. This
gives us a strong presence in the Middle East, somewhere where
we have, to date, been sub scale. We also acquired the trade and
assets of Infinata to broaden our Healthcare proposition.
• Strengthened business infrastructure and commercial scale:
In addition to the acquisition of MEED, which adds further scale
to our business, we have also improved our Group infrastructure
and sales capability. We now have significant sales operations
across Asia Pacific and in the US.
• Pricing: There were many price points of our products in previous
years. We now have introduced a simpler pricing structure which
we will be rolling out during 2018.
• Talent: Growing the business quickly requires us to constantly
review our structures and the talent within it. During 2017, we
have recruited significantly to improve the management in the
company, especially in sales and talent management.
OUR STRATEGIC PRIORITIES
Our principal objective is to become one of the world’s leading
providers of premium, subscription based, data and analytics
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
12
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 and gives
our clients real time access to critical data and analytics and work
flow tools.
Develop our sales capabilities
We have made good progress against our target to increase our
mix of revenues to 40% in the US, 40% in the UK & Europe and
20% in Asia Pacific. We have increased our sales operations in the
US and Asia Pacific. Whilst the majority of our revenues are still in
UK and Europe (47%), we have seen a proportional increase in the
Americas to 37%.
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. They typically
require investment in working capital within the period after
being acquired. Over the past year we took a 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%.
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.
The achievements of the last two years have been made possible
because of the hard work and commitment of our employees and
I would like to express my own and my fellow Board members’
appreciation to all our colleagues across the globe. There is still
much work to be done as we strive to work towards our strategic
priorities and continue to integrate our acquisitions.
We are a transformed business focused on the provision of data
and analytics to global markets, all of which present opportunities
for long-term profitable growth.
ANNUAL REPORT AND ACCOUNTS 2017
Strategic Report
Chief Executive’s Report
FINANCIAL REVIEW
The Group’s performance this year
1. Revenue
Revenues increased by 22% to £121.6m (2016: £100.0m), which
reflects both good organic growth (15%) and the part year benefit
of the bolt-on Healthcare acquisition, Infinata. The acquired
businesses are performing well and in line with our expectations.
5. Foreign exchange impact on revenues
The Group derives around 60% of revenues in currencies other
than Sterling. The benefit of exchange rate movements to reported
revenues for 2017 was £3.8m, which accounts for 3.9% of our year
on year growth.
2. Deferred Revenue
Deferred revenue at 31 December 2017 increased by 31% to
£60.6m (2016: £46.1m). Along with our expected renewal rates
for 2018 and forward bookings, we have around 75% visibility on
total 2018 revenues and a significantly higher proportion of our
subscription revenues.
3. Adjusted EBITDA
Adjusted EBITDA increased by 14% to £23.4m (2016: £20.6m). As
a result of targeted activities of improving the Group’s selling and
infrastructure capabilities and integrating acquisitions, our margin
has dropped from 20.6% to 19.2%.
4. Cash Generation
Cash generation was similar to 2016, with cash generated from
continuing operations of £14.5m (2016: £15.0m). Excluding cash
costs associated with impaired contracts acquired as part of the
Consumer acquisition (completed 1 September 2015) of £1.2m
(note 20), other exceptional cash costs of £3.3m and the impact of
the acquisitions on working capital of £1.2m, underlying cash flow
was around 86% (2016: 90%).
6. Foreign exchange impact on costs and Adjusted EBITDA
In Sterling terms, circa 40% 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 2017 by 3.6% or £2.9m.
The net effect (revenue benefit less cost impact) on 2017 Adjusted
EBITDA was an increase of £0.9m. We are a subscription business
and therefore the timing of the impact of foreign exchange on our
revenues has a lag compared to the immediate impact on our cost
base.
7. Net Debt
Net Debt increased to £43.0m as at 31 December 2017 (2016:
£25.5m). This increase principally reflects £20.3m spent on
acquisitions in the year.
13
ANNUAL REPORT AND ACCOUNTS 2017
Strategic Report
Chief Executive’s Report
Continuing operations
Revenue
Loss before tax
Depreciation
Amortisation
Finance costs
EBITDA2
Restructuring costs
Revaluation of short and long-term derivatives
Share based payments charge
Unrealised operating foreign exchange loss
M&A costs
Adjusted EBITDA1
Adjusted EBITDA margin1
2017
£000s
121,678
(785)
829
14,088
1,444
15,576
2,436
(1,266)
5,323
417
911
23,397
19.2%
2016
£000s
100,013
(2,519)
725
14,553
955
13,714
1,289
770
2,764
1,571
472
20,580
20.6%
Movement
21.7%
13.6%
13.7%
Note 1: Adjusted EBITDA: Earnings before interest, tax, depreciation and amortisation, impairment, share based payments, adjusted for costs associated
with derivatives, acquisitions, unrealised operating 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 £5.3 million for share based
payments (2016: £2.8 million).
KEY PERFORMANCE INDICATORS
The key performance indicators selected are used by the Executive Directors to monitor the Group’s performance and progress. During
the year we have made good progress across our revenue and deferred revenue metrics.
Group revenue has grown by 21.7% including the benefit of our acquisitions in the year. Our organic revenue growth was 15%. Deferred
revenue at 31 December 2017 increased by 31% to £60.6m (31 December 2016: £46.1m), improving the visibility on 2018 revenues.
Net Debt increased to £43.0m as at 31 December 2017 from £25.5m. The significant element of this increase principally reflects £20.3m
spent on acquisitions in the year.
2017
2016
% growth
Revenue
Adjusted EBITDA
Adjusted EBITDA
margin
Deferred Revenue
Net Debt1
£121.7m
£100.0m
21.7%
£23.4m
£20.6m
13.7%
19.2%
20.6%
(1.4%)
£60.6m
£46.1m
31.5%
£43.0m
£25.5m
69.0%
Note 1: Net debt: Short and long-term borrowings less cash and cash equivalents.
14
ANNUAL REPORT AND ACCOUNTS 2017 Strategic Report
Chief Executive’s Report
Earnings per share
Basic loss per share from continuing operations was 2.11 pence per share (2016: earnings of 1.80 pence per share). Fully diluted loss per
share from continuing operations was 2.11 pence per share (2016: earnings of 1.65 pence per share).
Share based payments
The share based payments charge for 2017 has increased from £2.8m to £5.3m. The key driver for this significant increase is the share
price performance during 2017, which has meant that new issues have been valued at a higher price than in previous years and also the
issue of new options as a result of the acquisitions in the year.
Cash flow
The Group generated £14.5m of operating cashflow, which equated to 62% of Adjusted EBITDA (2016: 73.1%). Included within the
operating cashflow were payments in relation to an onerous contract acquired as part of the Consumer acquisition (completed 1
September 2015) of £1.2m (the contract ended in August 2017), exceptional cash costs of £3.3m and £1.2m negative impact on working
capital from our acquisitions in the year. Adjusted for these items, our underlying operating cash flow would have been £20.2m, which
equates to 86% of Adjusted EBITDA (2016: 90%).
The Group repaid debt of £29.5m (of which most related to refinancing) and paid dividends of £7.1m. The Group also paid for acquisitions
of £20.3m, which were funded by new facilities agreed in the year.
Capital expenditure was £1.8m in 2017 (£1.3m in 2016). This includes £1.0m on software (£0.7m in 2016).
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 modest benefit on our 2017 results, the rate movements at the end of 2017 and beginning of 2018 suggest that
these factors will be broadly neutral for both revenues and EBITDA in the new financial year.
As a data and analytics company, we are not currently impacted by cross border tariffs and we do not expect the re-negotiation of tariffs
to materially 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.
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.
15
ANNUAL REPORT AND ACCOUNTS 2017 Strategic Report
Chief Executive’s Report
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.
• We are continually developing innovative solutions which enhance both
the content quality and our client’s user interface experience.
• 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.
• Reduced financial
• We constantly monitor new technology capabilities and innovation to
performance arising from
competitive threats.
ensure that our products are always contemporary and relevant, which
allows us to respond to new competitive threats as they arise.
• Our data sets and technology platforms are both unique and difficult to
Economic and Global
Political Changes
The Group’s businesses
operate in three key
geographic markets namely
Europe, North America and
Asia Pacific.
• 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.
replicate.
• 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.
• The Group provides high-quality data and analytics 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 data and analytics 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.
• We continue to monitor the impact of the United Kingdom exiting the EU,
but we are not currently aware of any resulting legislation that materially
impacts our business.
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ANNUAL REPORT AND ACCOUNTS 2017 Strategic Report
Chief Executive’s 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 enters into foreign exchange contracts that limit the risk from
movements in US Dollar, Euro and Indian Rupee exchange rates with
Sterling.
• 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.
• 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.
Regulatory Compliance
• The Group may be subject
to regulations restricting
its activities or effecting
changes in taxation.
• 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.
Acquisition and Disposal
Risk
• The failure to successfully
identify and integrate key
acquisitions could lead to
loss of profits, inefficient
business processes,
inconsistent corporate
culture and weakened
brand.
• 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.
Mike Danson
Chief Executive, approving the Strategic Report on behalf of the Board
25 February 2018
17
ANNUAL REPORT AND ACCOUNTS 2017 18
ANNUAL REPORT AND ACCOUNTS 2017 Directors’ Report
The Directors
Bernard Cragg
Executive Chairman
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.
Bernard Cragg is Executive
Chairman of GlobalData Plc.
Bernard qualified with Price
Waterhouse 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.
Graham Lilley
Chief Financial Officer
(appointed 1 January 2018)
Graham joined the Group in
2011 as the Group Financial
Controller before progressing
to Group Finance Director
and Company Secretary.
Graham started his career
at PricewaterhouseCoopers,
where he qualified as a
chartered accountant
and subsequently joined
Datamonitor when it was part
of the Informa Group. Graham
joined the Board as Chief
Financial Officer on
1 January 2018.
Peter Harkness
Non-Executive Director
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 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 also a Non-
Executive Director of Sutton
and East Surrey Water Plc.
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 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.
Andrew Day
Non-Executive Director
(appointed 27 February 2017)
Andrew David Day is currently
employed as Chief Data Officer
for J Sainsbury plc where he
has responsibility for delivering
commercial and customer
value through data, analytics
and data science. Andrew
was previously Business
Intelligence Director of News
UK Ltd and prior to that
General Manager of Business
Intelligence for Telefonica UK
Ltd. Andrew has a successful
track record for implementing
transformational data driven
change in each of his roles.
Annette Barnes
Non-Executive Director
(appointed 27 February 2017)
Annette Marie Barnes is now
progressing a plural NED
career. Until January 2018,
Annette was employed as
Managing Director, Wealth
& Mass Affluent and was
previously CEO of Lloyds Bank
Private Banking Ltd. In this role,
Annette had responsibility for
Lloyds Banking Group’s Wealth
& Mass Affluent businesses
with circa £40bn assets under
management. Prior to that,
Annette was Managing Director
of Bank of Scotland (Retail).
Annette has over 30 years of
financial services experience
with a specific focus on
customer service, IT and risk.
19
ANNUAL REPORT AND ACCOUNTS 2017 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 20 to 23 by drawing upon best practice available, including those aspects of the UK Corporate Governance Code
we consider to be relevant to the company.
The Board
The Group is led by the Board, which is made up of three Executive Directors and four Non-Executive Directors.
Executive Directors who have served during the year:
Mike Danson
Bernard Cragg
Simon Pyper (resigned 31 December 2017)
Non-Executive Directors who have served during the year:
Peter Harkness
Murray Legg
Annette Barnes (appointed 27 February 2017)
Andrew Day (appointed 27 February 2017)
Mark Freebairn (resigned 25 April 2017)
Kelsey van Musschenbroek (resigned 25 April 2017)
The Non-Executive Directors’ shareholdings are detailed in the Directors’ Interests table on page 23 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 2017, 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 2017.
Board meetings during the year:
Number of meetings
Bernard Cragg
Mike Danson
Simon Pyper
Kelsey van Musschenbroek
Mark Freebairn
Murray Legg
Peter Harkness
Annette Barnes
Andrew Day
20
Board
Audit Committee
Remuneration
Committee
Nomination
Committee
12
12
12
8
1
2
12
12
10
10
4
N/A
N/A
N/A
1
-
4
4
3
3
3
N/A
N/A
N/A
-
-
3
3
-
-
2
2
2
-
-
-
2
2
-
-
ANNUAL REPORT AND ACCOUNTS 2017
Directors’ Report
Corporate Governance Report
Remuneration Committee
The Remuneration Committee comprises the Chairman Peter Harkness, Murray Legg, Annette Barnes and Andrew Day. 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 26 and 27. 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, Annette Barnes and Andrew Day. 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. 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.
21
ANNUAL REPORT AND ACCOUNTS 2017
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.
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.
Long-Term Viability
The Directors have assessed the viability of the Group over a five year period to December 2022, taking account of the Group’s current
position and the potential impact of the principal risks as outlined on pages 16 to 17 of this Annual Report. A five-year period was deemed
appropriate for this assessment as it best reflects the strategic planning and budgeting process required for the implementation of the
Group’s strategy. The Board has completed a thorough review of threats with the potential to compromise the Group’s business model,
future performance, solvency, liquidity and its resilience to those risks.
Key factors the Board considered within this review included:
• The Group’s well established products and supporting processes and infrastructure, now aligned under the GlobalData brand
• The performance of the organic revenues and potential for future growth
• The performance of acquisitions made over the last two years
• The talented colleagues we have in the business and the long-term incentive plan to keep our most talented employees
• The diverse nature of the Group’s revenue base across both industrial and geographical markets
• The Group’s committed banking facilities of £75m and further option of £25m
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 five 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 2017, the Group employed the following number of employees of each gender:
Male
Female
22
2017
No.
1,492
1,064
2,556
2016
No.
1,225
733
1,958
ANNUAL REPORT AND ACCOUNTS 2017 Directors’ Report
Corporate Governance Report
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.
Political donations
The Group has not made any political donations during the year.
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 2017 the Group had 61 days purchases outstanding
(2016: 56 days).
Subsequent events
On 25 January 2018, GlobalData UK Limited acquired the entire share capital of CHM Research Limited, for cash consideration of £1.6m.
CHM Research provides thematic research in the global Technology, Media and Telecoms sectors and is based in London. Due to the
proximity of the acquisition to the year end, in line with the provisions of IFRS 3, fair value adjustments may be required within the year
ended 31 December 2018.
Additionally, as disclosed in the Executive Chairman’s Statement, the Company is in advanced discussions concerning the possible
acquisition of Energy, Construction data and analytics provider, Research Views Limited, a private company owned by Mike Danson and
Wayne Lloyd and a number of other minority shareholders. The contemplated Acquisition remains subject to binding legal agreements
and there can be no certainty that these discussions will lead to a transaction. If terms are agreed between the respective parties, the
Acquisition would require the approval of GlobalData’s shareholders in a general meeting.
Financial instruments
Use of financial instruments and exposure to various financial risks has been discussed within the Strategic Report (page 15).
Future developments
Future developments have been discussed within the Strategic Report (page 9).
Directors’ Interests
Details of the Company’s share capital are set out in note 22 to the financial statements. As at 25 February 2018, Mike Danson had a
beneficial interest of 68.0 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 as at 25 February 2018 in the ordinary shares of the Company were as follows:
Bernard Cragg
Mike Danson
Murray Legg
Peter Harkness
Number of ordinary shares
390,000
69,604,325
15,000
70,000
23
ANNUAL REPORT AND ACCOUNTS 2017 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 2017.
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 integrity of the financial statements of the Group and any formal announcements relating to financial performance
• 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
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.
The Audit Committee consists of the Chairman Murray Legg, Peter Harkness, Annette Barnes and Andrew Day.
The integrity of financial reporting
We reviewed the integrity of the financial statements and all formal announcements relating to financial performance during 2017. 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 2017, we focused upon the following areas:
• Long-term viability of the Group, in discussion with the Board
• Review of significant revenue contracts
• Assessing the impact of IFRS 15 ‘Revenue from Contracts with Customers’, which is effective 1 January 2018
• Assessing the impact of IFRS16 ‘Leases’, which is effective 1 January 2019
• Enhancements to financial reporting systems
In accordance with the revised ISA 700, ‘Forming an Opinion and Reporting on Financial Statements’, our auditor has adopted the
enhanced audit report for the 2017 Annual Report and Accounts.
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 2018. 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.
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.
24
ANNUAL REPORT AND ACCOUNTS 2017 Directors’ Report
Audit Committee Report
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.
To maintain the objectivity of the audit process the Group actively supports audit partner rotation, which occurred during 2017.
Murray Legg
Chairman of the Audit Committee
25 February 2018
25
ANNUAL REPORT AND ACCOUNTS 2017
Directors’ Report
Directors’ Remuneration Report
Unaudited information
The Remuneration Committee
I am pleased to present the Remuneration Committee’s report to you for 2017.
The Remuneration Committee consists of the Chairman Peter Harkness, Murray Legg, Annette Barnes and Andrew Day.
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
their 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.
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 Directors as at 25 February 2018 are:
Contract date
Notice period
12 April 2016
1 October 2008
11 August 2017
23 February 2016
25 June 2009
24 January 2017
24 January 2017
3 months
12 months
6 months
3 months
1 month
3 months
3 months
Executive Directors
Bernard Cragg
Mike Danson
Graham Lilley
Non-Executive Directors
Murray Legg
Peter Harkness
Annette Barnes
Andrew Day
26
ANNUAL REPORT AND ACCOUNTS 2017 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
Annette Barnes
Andrew Day
Basic salary
Other benefits
£000s
£000s
2017 total
£000s
2016 total
£000s
150
50
120
10
10
40
40
25
25
-
48
2
-
-
-
-
-
-
150
98
122
10
10
40
40
25
25
158
97
257
30
30
34
38
-
-
The other benefits consist of company cars and health insurance cover.
As at 31 December 2017, Simon Pyper had 350,000 share options in issue (2016: 350,000) and Bernard Cragg had 250,000 share options
in issue (2016: 250,000). No options were exercised during 2017 (2016: nil). No other Directors as at 31 December 2017 had 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 £28m and £39m respectively
(2016: £26.7 million and £35 million respectively). The targets were revised during 2017 following the acquisition of the Pharmsource and
Infinata businesses.
The total charge recognised for the scheme during the year ended 31 December 2017 was £5.3 million (2016: £2.8 million). The awards of
the scheme are settled with ordinary shares of the Company.
By order of the Board
Peter Harkness
Chairman of the Remuneration Committee
25 February 2018
27
ANNUAL REPORT AND ACCOUNTS 2017 Directors’ Report
Statement of Directors’ responsibilities in respect of the Annual Report
and the financial statements
The Directors are responsible for preparing the Strategic Report, the Directors’ 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 24 April 2018 at John Carpenter House, John Carpenter Street, London EC4Y 0AN at 10am.
On behalf of the Board
Mike Danson
Chief Executive
25 February 2018
28
ANNUAL REPORT AND ACCOUNTS 2017 Independent Auditor’s Report
Independent Auditor’s Report To The Members Of GlobalData Plc
OPINION
Our opinion on the financial statements is unmodified
We have audited the financial statements of GlobalData Plc (the ‘parent company’) and its subsidiaries (the ‘group’) for the year ended
31 December 2017 which comprise the consolidated income statement, the consolidated statement of comprehensive income,
the consolidated and company statement of financial position, the consolidated and company statement of changes in equity, the
consolidated and company statement of cash flows and notes to the consolidated and company financial statements, including
a summary of significant accounting policies. The financial reporting framework that has been applied in the preparation of the
group and company financial statements is applicable law and International Financial Reporting Standards (IFRSs) as adopted by
the European Union and, as regards the parent company financial statements, as applied in accordance with the provisions of the
Companies Act 2006.
In our opinion:
• the financial statements give a true and fair view of the state of the group’s and of the parent company’s affairs as at 31 December
2017 and of the group’s loss for the year then ended;
• the group financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union;
• the parent company financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union
and as applied in accordance with the provisions of the Companies Act 2006; and
• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
BASIS FOR OPINION
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities
under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report.
We are independent of the group and the parent company in accordance with the ethical requirements that are relevant to our audit of
the financial statements in the UK, including the FRC’s Ethical Standard as applied to listed entities, and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate
to provide a basis for our opinion.
WHO WE ARE 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.
CONCLUSIONS RELATING TO GOING CONCERN
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:
•
•
the directors’ use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about
the group’s or the parent company’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve
months from the date when the financial statements are authorised for issue.
Overview of our audit approach
• Overall group materiality: £818,900, which represents 3.5% of the Group’s Adjusted EBITDA
• We performed full scope audit procedures on key business operations in the UK and USA
and targeted audit procedures on business operations in the UK and India.
• Key audit matters were identified for the Group as:
• Revenue recognition;
• Acquisition accounting of Ascential Jersey Holdings Limited;
• Acquisition accounting of Infinata; and
• Intangible assets impairment review.
• Key audit matter identified for the parent company as:
• Investments impairment review
29
ANNUAL REPORT AND ACCOUNTS 2017 Independent Auditor’s Report
Independent Auditor’s Report To The Members Of Globaldata Plc
KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements
of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we
identified. These matters included those that had the greatest effect on: the overall audit strategy, the allocation of resources in the audit;
and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements
as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key Audit Matter - Group
How the matter was addressed in the audit - Group
Revenue recognition
The Group enters into a high volume of
revenue transactions. Because of this,
we identified the occurrence of revenue
recognition as a significant risk, which was
one of the most significant assessed risks of
material misstatement.
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 relevant to the audit as well as reviewing whether the implementation of
these key controls was satisfactory;
• we performed substantive testing on a sample of revenue 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. In
addition:
• the occurrence of revenue testing was tested by obtaining signed customer contracts,
ensuring that a service was provided by checking the online subscription platform to
ensure the customers have access and verifying that the delivery of the products had
occurred;
• whether revenue recognised in the correct period by checking evidence that verifies
when the service was delivered or product was sold;
• for a sample of revenue contracts we tested managements’ recognition of income by
recalculating revenue recorded with reference to the contractual arrangements and/or
project percentage of completion reports. We challenged the percentage of completion
reports by comparing the project status and actual costs incurred of these projects in
January and February 2018 as majority of contracts are short term; and
• for a sample of revenue contracts, we tested the accuracy of the deferred income
schedules by checking the start and end dates to the contractual arrangements. We
recalculated the amount of deferred revenues and accrued income.
The Group’s accounting policy on revenue is shown in note 2 to the group financial
statements and related disclosures are included in note 3.
Key observations
Our testing did not identify significant deficiency in the design of controls that would have
required us to expand the nature or scope of our planned detailed test work. We have
not noted any significant issues with respect to the recognition of revenue through the
audit work undertaken. In addition, we did not identify any significant differences in our
recalculation of revenue, deferred revenue or accrued income.
30
ANNUAL REPORT AND ACCOUNTS 2017 Independent Auditor’s Report
Independent Auditor’s Report To The Members Of GlobalData Plc
Key Audit Matter - Group
How the matter was addressed in the audit - Group
Acquisition accounting of Ascential
Jersey Holdings Limited
On 30 November 2017 the whole of the
issued share capital of Ascential Jersey
Holdings Limited was acquired for total
consideration of $17.5m cash as detailed in
Note 26. Ascential Jersey Holdings Limited
holds 100% of the shares of MEED Media FZ
LLC
As a result of this acquisition, the Group
recorded intangible assets and goodwill of
£10.3 million and £7.9 million respectively
as stated in Note 26. Management has
made key judgements in determining the
allocation of the purchase price to the
assets and liabilities acquired.
The calculation of the intangible assets
and goodwill arising from the acquisition
required the application of management’s
valuation model to determine the fair value
of the identifiable intangible assets.
We therefore identified the acquisition of
Ascential Jersey Holdings Limited, including
the valuation and allocation of the purchase
price to the assets and liabilities acquired,
as a significant risk, which was one of the
most significant assessed risks of material
misstatement.
Acquisition accounting of Infinata
In April 2017 GlobalData UK Ltd acquired
the trade and assets of Infinata for
consideration of US$9.6million as stated in
Note 26.
As a result of this acquisition, the Group
recorded intangible assets and goodwill of
£5.2 million and £5.3 million respectively
as stated in Note 26. Management has
made key judgements in determining the
allocation of the purchase price to the
assets and liabilities acquired.
The calculation of the intangible assets
and goodwill arising from the acquisition
required the application of management’s
valuation model to determine the fair value
of the identifiable intangible assets.
We therefore identified the acquisition of
the trade and assets of Infinata, including
the valuation and allocation of the purchase
price to the assets and liabilities acquired,
as a significant risk which was one of the
most significant assessed risks of material
misstatement.
Our audit work included, but was not restricted to:
• Obtaining relevant purchase documents to assess whether management had accounted
for the acquisition appropriately;
• Auditing the opening balance sheet on acquisition. We obtained third party evidence on
bank balances, tested a representative sample for cash after date on trade receivables,
post year end payments on creditors and recalculated the deferred income;
• Challenging the identification and valuation methodology of intangible assets;
• Engaging our internal valuations specialists to assist the audit team in assessing the
reasonableness of the underlying assumptions used in the excess earnings method
model and royalty rate model performed by management’s external specialists; and
• Challenging management’s assumptions with reference to historic data, sensitivity
analysis, re-computation and benchmarking against industry data available. This is
because the valuation model includes certain assumptions which are judgemental in
nature including estimates of future revenue, growth rates, customer retention rates
and discount rates.
The group’s accounting policy on the valuation of the acquired intangible assets is shown
in notes 1 and 2 to the group financial statements and related disclosures are included in
note 26.
Key observations
We have not noted any significant issues on the identification of intangible assets and the
purchase price allocation of intangible assets through the audit work undertaken.
Our audit work included, but was not restricted to:
• Obtaining relevant purchase documents to assess whether management had accounted
for the acquisition appropriately;
• Audited the opening balance sheet on acquisition by recalculating the deferred income
balance;
• Challenging the identification and valuation methodology of intangible assets;
• Engaging our internal valuations specialists to assist the audit team in assessing the
reasonableness of the underlying assumptions used in the excess earnings method
model and royalty rate model performed by management’s external specialists, and
challenging management’s calculations and assumptions used; and
• Challenging management’s assumptions with reference to historic data, sensitivity
analysis, re-computation and benchmarking against industry data available. This is
because the valuation model includes certain assumptions which are judgemental in
nature including estimates of future revenue, growth rates, customer retention rates
and discount rates.
The group’s accounting policy on the valuation of the acquired intangible assets is shown
in notes 1 and 2 to the group financial statements and related disclosures are included in
note 26.
Key observations
We have not noted any significant issues on the identification of intangible assets and the
purchase price allocation of intangible assets through the audit work undertaken.
31
ANNUAL REPORT AND ACCOUNTS 2017 Independent Auditor’s Report
Independent Auditor’s Report To The Members Of GlobalData Plc
Key Audit Matter - Group
How the matter was addressed in the audit - Group
Intangible assets impairment review
A significant balance on the consolidated
statement of financial position is intangible
assets of £150.5 million, including goodwill
of £118.9 million as detailed in Note 11.
The recovery of these assets depends on
achieving sufficiently profitable business in
the future.
In accordance with International Accounting
Standard 36: Impairment of Assets (‘IAS 36’)
Goodwill is subject to an annual impairment
test.
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,
which was one of the most significant
assessed risks of material misstatement.
Our audit work included, but was not restricted to:
• An assessment of the methodology and the internal control environment relating to the
intangible assets impairment review. This involved assessing the design of key controls
relevant to the audit, that changes are monitored, scrutinised by appropriate personnel
and the final assumptions used in impairment testing have been appropriately approved;
• Challenging the methodology and assumptions used by management in conducting the
impairment review. This also includes challenging management on their identification of
cash generating units with reference to the guidance set out in IAS 36;
• Testing the mathematical accuracy of the impairment calculations;
• Testing the accuracy of management’s forecasting through comparison of historical
budgets and growth rates to actual performance and growth rates. We challenged other
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 the impairment review.
The group’s accounting policy on impairment of intangible assets is shown in note 2 to the
group financial statements and related disclosures are included in note 11.
Key observations
Our testing did not identify significant deficiencies in the design and operation of
controls that would have required us to expand the nature or scope of our planned
detailed test work. Based on our audit work there was sufficient headroom in the value
in use calculation and hence we concur with management’s assessment that there is no
impairment.
Key Audit Matter – Parent
How the matter was addressed in the audit – Parent
Investments impairment review
A significant balance on the parent
company statement of financial position is
investments of £169.4 million as detailed in
Note 6 in the Company financial statements.
The recovery of these assets depends
on the cash generating units achieving
sufficiently profitable business in the future.
The investments 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 investment
impairment review as a significant risk,
which was one of the most significant
assessed risks of material misstatement.
Our audit work included, but was not restricted to:
• Testing the controls designed and applied by the Company to provide assurance that the
assumptions used in preparing the impairment calculations are updated, that changes
are monitored, scrutinised by appropriate personnel and that the final assumptions used
in impairment testing have been appropriately approved;
• Challenging the methodology and assumptions used by management in conducting the
impairment review. This also includes challenging management on their identification of
cash generating units due to the interdependence among subsidiaries, with reference to
the guidance set out in IAS 36;
• Comparing the net assets in each of the cash generating units to the investment held in
the parent company;
• Testing the mathematical accuracy of the impairment calculations;
• Challenging the forecasts prepared by management, where we evaluated the forecasts
by comparing them to historic performance and growth rates, understanding the key
drivers of 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 the impairment review.
The company’s accounting policy on impairment of investments is shown in note 2 to the
Company financial statements and related disclosures are included in note 6.
Key observations
Our testing did not identify significant deficiencies in the design and operation of controls
that would have required us to expand the nature or scope of our planned detailed test
work. We found no errors in the calculations we tested. Based on our audit work there
was sufficient headroom in the value in use calculation and hence we concur with
management’s assessment that there is no impairment.
32
ANNUAL REPORT AND ACCOUNTS 2017 Independent Auditor’s Report
Independent Auditor’s Report To The Members Of GlobalData Plc
OUR APPLICATION OF 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.
Materiality was determined as follows:
Materiality Measure
Group
Parent
Financial statements as a
whole
Performance materiality
used to drive the extent of
our testing
Specific materiality
Materiality was set at £818,900 which was 3.5% of
the Adjusted EBITDA (Adjusted EBITDA as defined
by management on page 36). This benchmark is
considered the most appropriate because this
is used by readers of the group’s financials to
judge the performance of the group and is a key
performance indicator for management.
Materiality was set at £573,200 which was capped
to component materiality (Component materiality
was set at 70% of Group materiality). We consider
this benchmark to be most appropriate as this is
often used by external readers of the financials to
judge the performance of the entity and is a key
performance indicator for management.
Materiality for the current year is higher than
the level that we determined for the year ended
31 December 2016 to reflect the increase in the
Group’s Adjusted EBITDA.
Materiality for the current year has been
consistently determined and has resulted in an
increase in the level that we determined for the year
ended 31 Dec 2016 to reflect the increase in the
underlying performance and size of the Company.
70% of financial statement materiality.
70% of financial statement materiality.
We have determined a lower level of specific
materiality for certain areas being directors’
remuneration and related party transactions.
We have determined a lower level of specific
materiality for certain areas being directors’
remuneration and related party transactions.
Communication of
misstatements to the audit
committee
£40,945 and misstatements below that threshold
that, in our view, warrant reporting on qualitative
grounds.
£28,660 and misstatements below that threshold
that, in our view, warrant reporting on qualitative
grounds.
33
ANNUAL REPORT AND ACCOUNTS 2017 Independent Auditor’s Report
Independent Auditor’s Report To The Members Of GlobalData Plc
AN OVERVIEW OF THE SCOPE OF OUR AUDIT
Our audit approach was a risk-based approach founded on a thorough understanding of the group’s business, its environment and risk
profile and in particular included:
• Evaluation by the group audit team of identified components to assess the significance of that component and to determine the
planned audit response based on a measure of materiality;
• Evaluating the processes and 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;
• There has been no significant changes to the scoping of key business operations for the current year Group audit from the scope of
that of the prior year;
• The Group is predominately based within the United Kingdom (UK) and comprises a number of UK subsidiaries which are centrally
managed and controlled.
• There are a number of overseas subsidiaries. The audit testing for the the UK and overseas subsidiaries in respect of the group audit
was performed by the Group audit team.
Our Group scoping ensures we have attained coverage on full scope and targeted procedures of 99% of Group revenues and 90% of
Adjusted EBITDA and Total assets. The balance was tested analytically to Group materiality.
Coverage of Group Revenue
86+
OTHER INFORMATION
Coverage of Adjusted EBITDA
B 77+
Coverage of Total Assets
B 88+
Full scope
Targeted procedures
Analytical procedures
The directors are responsible for the other information. The other information comprises the information included in the annual report
set out on pages 26 to 27, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements
does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of
assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge
obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material
misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material
misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of
this other information, we are required to report that fact.
We have nothing to report in this regard.
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 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.
34
ANNUAL REPORT AND ACCOUNTS 201713
+
1
+
13
+
10
+
2
+
10
+
B
77+
B 88+
Independent Auditor’s Report
Independent Auditor’s Report To The Members Of GlobalData Plc
MATTERS ON WHICH WE ARE REQUIRED TO REPORT UNDER THE COMPANIES ACT 2006
In the light of the knowledge and understanding of the group and the parent 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 in relation to which 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.
RESPONSIBILITIES OF DIRECTORS FOR THE FINANCIAL STATEMENTS
As explained more fully in the Statement of Directors’ responsibilities set out on page 28, the directors are responsible for the preparation
of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors
determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud
or error.
In preparing the financial statements, the directors are responsible for assessing the group’s and the parent company’s ability to continue
as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless
the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do
so.
AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a
high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website
at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Mark Henshaw
Senior Statutory Auditor
for and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
London
25 February 2018
35
ANNUAL REPORT AND ACCOUNTS 201713
+
10
+
2
+
10
+
B
Consolidated Income Statement
Continuing operations
Revenue
Cost of sales
Gross profit
Distribution costs
Administrative costs
Other expenses
Operating profit/ (loss)
Analysed as:
Adjusted EBITDA1
Items associated with acquisitions and restructure of the Group
Other adjusting items
EBITDA2
Amortisation
Depreciation
Operating profit/ (loss)
Finance costs
Loss before tax from continuing operations
Income tax (expense)/ credit
(Loss)/ profit for the year from continuing operations
Loss for the year from discontinued operations
(Loss)/ profit for the year
(Loss)/ earnings per share attributable to equity holders
from continuing operations:
Basic (loss)/ earnings per share (pence)
Diluted (loss)/ earnings 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 (loss)/ earnings per share (pence)
Total diluted (loss)/ earnings per share (pence)
The accompanying notes form an integral part of this financial report.
Notes
Year ended
31 December 2017
Year ended
31 December 2016
£000s
£000s
3
5
4
5
5
8
9
25
10
121,678
(77,658)
44,020
(82)
(23,496)
(19,783)
659
23,397
(3,347)
(4,474)
15,576
(14,088)
(829)
659
(1,444)
(785)
(1,371)
(2,156)
-
(2,156)
(2.11)
(2.11)
-
-
(2.11)
(2.11)
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
Note 1: We define Adjusted EBITDA as EBITDA adjusted for costs associated with acquisitions, restructuring of the Group, share based payments, unrealised
operating 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.
Note 2: EBITDA is defined as earnings before interest, tax, depreciation, amortisation and impairment.
36
ANNUAL REPORT AND ACCOUNTS 2017 Consolidated Statement of Comprehensive Income
(Loss)/ profit for the year
Other comprehensive income
Items that will be classified subsequently to profit or loss:
Net exchange (losses)/ gains on translation of foreign entities
Other comprehensive (loss)/ income, net of tax
Total comprehensive (loss)/ income for the year
The accompanying notes form an integral part of this financial report.
Year ended
31 December 2017
£000s
Year ended
31 December 2016
£000s
(2,156)
1,096
(117)
(117)
(2,273)
108
108
1,204
37
ANNUAL REPORT AND ACCOUNTS 2017
Consolidated Statement of Financial Position
Notes
31 December 2017
£000s
31 December 2016
£000s
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
Total assets
Current liabilities
Trade and other payables
Short-term borrowings
Current tax payable
Short-term derivative liabilities
Short-term provisions
Non-current liabilities
Long-term provisions
Deferred tax liabilities
Long-term borrowings
Total liabilities
Net assets
Equity
Share capital
Share premium account
Treasury reserve
Other reserve
Merger reserve
Foreign currency translation reserve
Retained profit
Total equity
12
11
27
16
14
15
13
17
18
13
20
20
16
18
22
22
22
22
22
1,243
150,548
3,700
4,947
160,438
6
-
50,726
369
2,952
54,053
214,491
(77,842)
(6,000)
(2,990)
(98)
(160)
(87,090)
(441)
(3,014)
(39,955)
(43,410)
(130,500)
83,991
173
200
(2,289)
(37,128)
66,481
(190)
56,744
83,991
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
These financial statements were approved by the board of directors on 25 February 2018 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
ANNUAL REPORT AND ACCOUNTS 2017
Consolidated Statement of Changes in Equity
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
i
a
c
e
p
S
e
v
r
e
s
e
r
n
o
i
t
a
s
n
a
r
t
l
y
c
n
e
r
r
u
c
n
g
e
r
o
F
i
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
£000s
£000s
£000s
£000s
Balance at 1 January 2016
154
200
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
-
-
-
19
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(960)
-
-
-
(37,128)
-
-
-
-
-
-
-
-
-
-
-
-
-
66,481
-
-
-
-
-
Balance at 31 December 2016
173
200
(960)
(37,128)
66,481
Loss for the year
Other comprehensive income:
Net exchange loss on translation
of foreign entities
Total comprehensive loss for the
year
Transactions with owners:
Dividends
Share buy back
Share based payments charge
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(1,329)
-
-
-
-
-
-
-
-
-
-
-
-
-
Balance at 31 December 2017
173
200
(2,289)
(37,128)
66,481
The accompanying notes form an integral part of this financial report.
48,422
(181)
13,744
25,211
-
-
-
-
-
-
(48,422)
-
-
-
-
-
-
-
-
-
-
-
1,096
1,096
108
-
108
108
1,096
1,204
-
-
-
-
-
-
-
66,500
(5,113)
(5,113)
-
(960)
48,422
-
2,764
2,764
(202)
(202)
(73)
60,711
89,404
-
(2,156)
(2,156)
(117)
-
(117)
(117)
(2,156)
(2,273)
-
-
-
(7,134)
(7,134)
-
(1,329)
5,323
5,323
(190)
56,744
83,991
39
ANNUAL REPORT AND ACCOUNTS 2017
Consolidated Statement of Cash Flows
Continuing operations
Cash flows from operating activities
Year ended
31 December 2017
£000s
Year ended
31 December 2016
£000s
(Loss)/ profit for the year from continuing operations
(2,156)
1,813
Adjustments for:
Depreciation
Amortisation
Finance costs
Taxation recognised in profit or loss
Loss on disposal of fixed assets
Non-trading foreign exchange (gain)/ loss
Share based payments charge
Increase in trade and other receivables
(Increase)/ decrease in inventories
(Decrease)/ 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
Settlement of long-term borrowings
Dividends paid
Share buy back
Net cash from/ (used in) financing activities (continuing operations)
Net decrease in cash and cash equivalents from discontinued operations
Total cash flows from/ (used in) financing activities
Net decrease 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.
40
829
14,088
1,444
1,371
-
(274)
5,323
(2,789)
(6)
(1,117)
(1,266)
(986)
14,461
(1,423)
(57)
12,981
-
12,981
(20,338)
(612)
(1,184)
(22,134)
-
(22,134)
(7,356)
51,100
(29,520)
(7,134)
(1,329)
5,761
-
5,761
(3,392)
6,447
(103)
2,952
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
ANNUAL REPORT AND ACCOUNTS 2017
Notes to the Consolidated Financial Statements
1. GENERAL INFORMATION
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 data and analytics 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, carrying value of goodwill and other intangibles and segmental reporting.
Key sources of estimation of uncertainty
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.
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.
41
ANNUAL REPORT AND ACCOUNTS 2017 Notes to the Consolidated Financial Statements
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.
Critical accounting judgements
Segmental reporting
IFRS 8 “Operating Segments” requires the segment information presented in the financial statements to be that which is used internally
by the chief operating decision maker to evaluate the performance of the business and to decide how to allocate resources. The Group
has identified the 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.
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.
42
ANNUAL REPORT AND ACCOUNTS 2017 Notes to the Consolidated Financial Statements
2. ACCOUNTING POLICIES
a) Basis of consolidation
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 2017 and is consistent with the policies applied in the previous year.
c) International Financial Reporting Standards (“Standards”) in issue but not yet effective
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 and effective for periods after 1 January 2018)
IFRS 14 Regulatory Deferral Accounts (issued on 30 January 2014 – EU adoption deferred until final standard is released)
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 and effective for periods on or after 1 January 2018)
IFRS 16 Leases (Issued on 13 January 2016 and effective for periods on or after 1 January 2019)
•
• Clarifications to IFRS 15 Revenue from Contracts with Customers (issued on 12 April 2016 and effective for periods on or after 1
January 2018)
• Amendments to IFRS 2: Classification and Measurement of Share-based Payment Transactions (issued on 20 June 2016 and not yet
endorsed)
• Amendments to IFRS 9: Prepayment features with negative compensation (issued 12 October 2017 and effective for periods on or
after 1 January 2018)
• 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
• Annual Improvements to IFRS 2015-2017 Cycle (issued on 12 December 2017) – Relating to IAS 12 Income taxes, IAS 23 Borrowing
costs, IFRS 3 Business combinations and IFRS 11 Joint Arrangements
IFRIC Interpretation 22 Foreign currency transactions and advance considerations (issued on 8 December 2016 and not yet endorsed).
IFRIC Interpretation 23 Uncertainty over Income Tax Treatments (Issued in June 2017 and not yet endorsed)
•
•
None of the above standards are effective and therefore have not been applied in the financial statements.
It is anticipated that there will be minimal impact on the financial statements from the adoption of these new and revised standards with
the exception of IFRS16 ‘Leases’ (effective 1 January 2019) which will have the following effect:
• The total value of the Company’s future non-cancellable operating building lease commitments will be capitalised into property, plant
and equipment.
• A corresponding finance lease liability will be recognised within liabilities.
• Operating lease costs in the income statement will be replaced by depreciation of the capitalised asset and interest cost of the
finance lease liability. It is anticipated that these revised costs will be materially similar to the operating lease charge which would
have been recognised if the changes to IFRS16 had not been enacted.
Management have conducted a full review of the impact of the changes enacted by IFRS15 ‘Revenue from Contracts with Customers’
(effective 1 January 2018). The standard states that revenue recognition should depict promised transfer of services to customers at an
amount that reflects consideration to which the entity expects to be entitled in exchange for those services. There are 5 steps which need
to be followed:
Identify contract with customer
Identify performance obligations in the contract
1.
2.
3. Determine the transaction price
4. Allocate the transaction price to the performance obligations of the contract
5. Recognise revenue when (or as) the entity satisfies a performance obligation
43
ANNUAL REPORT AND ACCOUNTS 2017
Notes to the Consolidated Financial Statements
Each of the revenue streams disclosed in the accounting policies have been reviewed against the new standard, with no impact on the
current recognition approaches being identified.
Management have additionally performed a review to identify the impact of IFRS9 ‘Financial Instruments’ (effective 1 January 2018). The
new standard is based on the concept that financial assets should be classified and measured at fair value, with changes in fair value
recognised in profit and loss as they arise (“FVPL”), unless restrictive criteria are met for classifying and measuring the asset at either
Amortised Cost or Fair Value Through Other Comprehensive Income (“FVOCI”). The financial assets which the Group holds are loans and
receivables, for which changes to the fair value are posted to the income statement. Similarly, any changes to the fair value of the forward
contracts in place at the year end are also posted to the income statement.
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.
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.
44
ANNUAL REPORT AND ACCOUNTS 2017 Notes to the Consolidated Financial Statements
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 three 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).
g) 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.
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 Company and 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.
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.
45
ANNUAL REPORT AND ACCOUNTS 2017 Notes to the Consolidated Financial Statements
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.
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 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.
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.
Borrowing costs, being interest and other costs incurred in connection with the servicing of borrowings, are recognised as an expense
when incurred.
46
ANNUAL REPORT AND ACCOUNTS 2017 Notes to the Consolidated Financial Statements
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 data and analytics 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.
A reconciliation of Adjusted EBITDA to loss before tax from continuing operations is set out below:
Business Information
Total Revenue
Adjusted EBITDA
Other expenses (see note 5)
Depreciation
Amortisation (excluding amortisation of acquired intangible assets)
Finance costs
Loss before tax from continuing operations
Year ended
31 December 2017
£000s
Year ended
31 December 2016
£000s
121,678
121,678
23,397
(19,783)
(829)
(2,126)
(1,444)
(785)
100,013
100,013
20,580
(20,267)
(725)
(1,152)
(955)
(2,519)
47
ANNUAL REPORT AND ACCOUNTS 2017 Notes to the Consolidated Financial Statements
Geographical analysis
From continuing operations
Year ended 31 December 2017
Revenue from external customers
Year ended 31 December 2016
Revenue from external customers
UK
£000s
23,876
UK
£000s
22,840
Europe
£000s
33,381
Europe
£000s
27,598
Americas
£000s
45,067
Asia Pacific Rest of World
£000s
£000s
12,428
6,926
Americas
£000s
35,580
Asia Pacific Rest of World
£000s
£000s
9,060
4,935
Total
£000s
121,678
Total
£000s
100,013
Intangible assets held in the US were £13.1 million, of which £11.6 million related to Goodwill. The Group also holds £2.0 million of deferred
tax asset in the US. Intangible assets held in the UAE were £18.1m of which £10.3m related to Goodwill. All other non-current assets are
held in the UK. The largest customer represented less than 3% of the Group’s consolidated revenue.
4. OPERATING PROFIT/ (LOSS)
Operating profit/ (loss) is stated after the following expenses relating to continuing operations:
Depreciation of property, plant and equipment
Amortisation of intangible assets
Loss/ (gain) on foreign exchange
Operating lease expense – land and buildings
Operating lease expense – other
Auditor’s remuneration
Auditor’s remuneration
Audit of the Company’s and the consolidated financial statements
Audit of subsidiary companies’ financial statements
Audit-related assurance services
Other non-audit services
Year ended
31 December 2017
£000s
Year ended
31 December 2016
£000s
829
14,088
1,230
3,013
106
253
725
14,553
(348)
2,220
12
229
Year ended
31 December 2017
Year ended
31 December 2016
£000s
£000s
77
147
26
3
253
75
125
25
4
229
48
ANNUAL REPORT AND ACCOUNTS 2017 Notes to the Consolidated Financial Statements
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
Unrealised operating foreign exchange loss
Amortisation of acquired intangibles
Total other expenses
Year ended
31 December 2017
Year ended
31 December 2016
£000s
2,436
911
3,347
5,323
(1,266)
417
11,962
19,783
£000s
1,289
472
1,761
2,764
770
1,571
13,401
20,267
• Restructuring costs relates to redundancies and other restructuring.
• The M&A costs relate to due diligence and corporate finance activity.
• 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.
• Unrealised operating foreign exchange losses relate to non-cash exchange losses made on operating items.
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 2017
£000s
Year ended
31 December 2016
£000s
72,046
5,061
930
5,323
83,360
60,982
4,874
799
2,764
69,419
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
Information regarding Directors’ remuneration, share options, bonuses and pension contributions are set out in the Directors’
Remuneration Report on pages 26 to 27.
Year ended
31 December 2017
Year ended
31 December 2016
No.
2,404
No.
1,863
Year ended
31 December 2017
£000s
Year ended
31 December 2016
£000s
2,139
57
946
3,142
2,598
48
610
3,256
49
ANNUAL REPORT AND ACCOUNTS 2017 Notes to the Consolidated Financial Statements
8. FINANCE INCOME AND COSTS
Bank interest charge
Loan interest
Other interest receivable
9. INCOME TAX
Income statement
Current income tax:
Current income tax
Adjustments in respect of prior years
Deferred income tax:
Year ended
31 December 2017
£000s
Year ended
31 December 2016
£000s
40
1,513
(109)
1,444
12
1,056
(113)
955
Year ended
31 December 2017
£000s
Year ended
31 December 2016
£000s
(3,124)
(698)
(3,822)
(93)
1,628
(176)
(1,274)
1,863
503
2,451
(1,371)
(2,498)
1,331
(1,167)
75
2,754
(733)
(67)
444
3,026
5,499
4,332
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 (charge)/ credit in income statement
The tax (charge)/ credit is reconciled to the standard corporation tax rate applicable in the UK as follows:
Year ended
31 December 2017
£000s
Year ended
31 December 2016
£000s
(785)
151
(195)
-
838
(504)
(317)
(1,274)
(70)
(1,371)
(2,519)
504
4,357
510
(109)
177
(567)
(67)
(473)
4,332
Loss on ordinary activities before tax
Tax at the UK corporation tax rate of 19.25% (2016: 20%)
Effects of:
Adjustments in respect of prior years
Income not taxable
Permanent difference on IFRS2 charge
Expenses not deductible for tax
Overseas tax not at a standard rate
Change in corporation tax rate
Unprovided deferred tax
50
ANNUAL REPORT AND ACCOUNTS 2017
Notes to the Consolidated Financial Statements
10. EARNINGS PER SHARE
The calculation of the basic earnings per share is based on the earnings attributable to ordinary shareholders of the parent company
divided by the weighted average number of shares in issue during the 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:
Year ended
31 December 2017
Year ended
31 December 2016
Continuing operations
Basic
(Loss)/ profit for the year attributable to ordinary shareholders of the parent company
(£000s)
Weighted average number of shares (000s)
Basic (loss)/ earnings per share (pence)
Diluted
(Loss)/ profit for the year attributable to ordinary shareholders of the parent company
(£000s)
Weighted average number of shares* (000s)
Diluted (loss)/ earnings 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
(Loss)/ profit for the year attributable to ordinary shareholders of the parent company
(£000s)
Weighted average number of shares (000s)
Basic (loss)/ earnings per share (pence)
Diluted
(Loss)/ profit for the year attributable to ordinary shareholders of the parent company
(£000s)
Weighted average number of shares* (000s)
Diluted (loss)/ earnings per share (pence)
(2,156)
102,346
(2.11)
(2,156)
102,346
(2.11)
-
102,346
-
-
102,346
-
(2,156)
102,346
(2.11)
(2,156)
102,346
(2.11)
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
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 2017
No’000s
31 December 2016
No’000s
102,346
10,622
112,968
100,632
9,450
110,082
* Where the share options in issue are anti-dilutive in respect of the diluted loss per share calculation in 2017 and 2016, the options have not been included in
the calculation.
51
ANNUAL REPORT AND ACCOUNTS 2017 Notes to the Consolidated Financial Statements
11. INTANGIBLE ASSETS
Cost
As at 1 January 2016
Additions: Business Combinations
Additions: Separately Acquired
Fair value adjustments
Foreign currency retranslation
Transfer to ‘Asset Held for Sale’ Disposals
As at 31 December 2016
Additions: Business Combinations
Additions: Separately Acquired
Foreign currency retranslation
Disposals
Software
£000s
Customer
relationships
£000s
Brands IP rights and
Database
£000s
£000s
Goodwill
Total
£000s
£000s
6,423
461
682
-
112
(101)
7,577
117
1,036
(47)
(1)
15,849
9,726
4,817
5,878
11,397
11,132
53,479
57,824
-
-
-
-
25,575
7,180
-
-
-
-
-
-
-
10,695
1,596
148
-
-
-
-
-
-
-
152
-
-
22,529
4,356
111,455
16,779
-
-
-
-
-
-
91,965
85,021
682
152
112
(101)
177,831
30,028
1,184
(47)
(1)
As at 31 December 2017
8,682
32,755
12,439
26,885
128,234
208,995
Amortisation
As at 1 January 2016
Additions: Business Combinations
Charge for the year
Foreign currency retranslation
Disposals
(4,346)
(349)
(1,023)
(78)
80
(10,615)
-
(2,944)
-
-
(641)
-
(1,956)
-
-
(4,463)
(9,360)
(29,425)
-
(8,630)
-
-
-
-
-
-
(349)
(14,553)
(78)
80
As at 31 December 2016
(5,716)
(13,559)
(2,597)
(13,093)
(9,360)
(44,325)
Additions: Business Combinations
Charge for the year
Foreign currency retranslation
Disposals
(73)
(1,118)
38
1
-
-
-
(3,097)
(1,290)
(8,583)
-
-
-
-
-
-
-
-
-
-
(73)
(14,088)
38
1
As at 31 December 2017
(6,868)
(16,656)
(3,887)
(21,676)
(9,360)
(58,447)
Net book value
As at 31 December 2017
As at 31 December 2016
1,814
1,861
16,099
12,016
8,552
8,098
5,209
9,436
118,874
102,095
150,548
133,506
Additions as a result of business combinations in the year have been disclosed in further detail in note 26.
As at 31 December 2017, the carrying value and remaining amortisation period of the Brand assets were as follows:
Carrying Value
Remaining
Amortisation Period
£000s
5,048
2,369
1,135
8,552
13 years
13 years
3 years
GlobalData
Verdict
MEED
52
ANNUAL REPORT AND ACCOUNTS 2017 Notes to the Consolidated Financial Statements
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 2018 - 2022. 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
2017
3.00%
2016
3.00%
2017
2.00%
2016
2.00%
2017
8.70%
2016
9.48%
2017
2.00%
2016
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
25.3
15.5
63.2
104
Other Intangible
assets
3.8
1.6
17.4
22.8
Value in use
Headroom
211.8
124.1
166.2
502.1
182.7
107
85.6
375.3
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
(5.3%)
(4.0%)
(1.2%)
45.7%
43.5%
15.4%
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.
53
ANNUAL REPORT AND ACCOUNTS 2017
Total
£000s
3,694
1,089
578
51
(171)
5,241
359
612
(53)
(131)
6,028
(2,397)
(849)
(725)
(61)
144
(3,888)
(249)
(829)
50
131
(4,785)
1,243
1,353
Notes to the Consolidated Financial Statements
12. PROPERTY, PLANT AND EQUIPMENT
Fixtures, fittings
& equipment
£000s
Motor vehicles
£000s
Leasehold
Improvements
£000s
3,447
1,089
578
49
(171)
4,992
298
612
(51)
(116)
5,735
(2,356)
(849)
(699)
(60)
144
(3,820)
(231)
(805)
48
116
(4,692)
1,043
1,172
15
-
-
-
-
15
-
-
-
(15)
-
(15)
-
-
-
-
(15)
-
-
-
15
-
-
-
232
-
-
2
-
234
61
-
(2)
-
293
(26)
-
(26)
(1)
-
(53)
(18)
(24)
2
-
(93)
200
181
Cost
As at 1 January 2016
Additions: Business Combinations
Additions: Separately Acquired
Foreign currency retranslation
Disposals
As at 31 December 2016
Additions: Business Combinations
Additions: Separately Acquired
Foreign currency retranslation
Disposals
As at 31 December 2017
Depreciation
As at 1 January 2016
Additions: Business Combinations
Charge for the year
Foreign currency retranslation
Disposals
As at 31 December 2016
Additions: Business Combinations
Charge for the year
Foreign currency retranslation
Disposals
As at 31 December 2017
Net book value
As at 31 December 2017
As at 31 December 2016
54
ANNUAL REPORT AND ACCOUNTS 2017 Notes to the Consolidated Financial Statements
13. DERIVATIVE ASSETS AND LIABILITIES
Short-term derivative assets
Short-term derivative liabilities
Net derivative asset/ (liability)
31 December 2017
£000s
31 December 2016
£000s
369
(98)
271
94
(1,089)
(995)
Classification is based on when the derivatives mature. The fair values of derivatives are expected to impact the income statement over
the next year, dependent on movements in the fair value of the foreign exchange contracts. The movement in the year was a £1,266,000
credit to the income statement (2016: charge of £770,000).
The Group uses derivative financial instruments to reduce its exposure to fluctuations in foreign currency exchange rates. The notional
values of contract amounts outstanding are:
Expiring in the year ending:
31 December 2018
14. INVENTORIES
Raw materials
Euro
€’000
3,400
US Dollar
$’000
17,450
Indian Rupee
INR’000
353,152
31 December 2017
£000s
31 December 2016
£000s
6
6
-
-
55
ANNUAL REPORT AND ACCOUNTS 2017
Notes to the Consolidated Financial Statements
15. TRADE AND OTHER RECEIVABLES
Trade receivables
Prepayments
Other receivables and accrued income
Related party receivables (note 27)
31 December 2017
£000s
31 December 2016
£000s
43,255
3,527
3,017
927
50,726
34,703
4,782
3,107
16
42,608
The contractual value of trade receivables is £45.5 million (2016: £36.4 million). Their carrying value is assessed to be £43.3 million (2016:
£34.7 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
The ageing analysis of trade receivables which have been impaired is as follows:
Not overdue
Not more than 3 months overdue
More than 3 months but not more than 1 year
31 December 2017
£000s
31 December 2016
£000s
35,442
5,028
2,785
43,255
26,561
5,039
3,103
34,703
31 December 2017
£000s
31 December 2016
£000s
13
4
2,228
2,245
-
-
1,670
1,670
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 doubtful debts
Receivables written off during the year as uncollectable
Balance carried forward
31 December 2017
£000s
31 December 2016
£000s
28,401
11,995
4,751
353
45,500
15,344
17,878
2,743
408
36,373
31 December 2017
£000s
31 December 2016
£000s
1,670
855
(280)
2,245
2,052
912
(1,294)
1,670
56
ANNUAL REPORT AND ACCOUNTS 2017 Notes to the Consolidated Financial Statements
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 2017 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.
16. DEFERRED INCOME TAX
Balance brought forward
Created upon acquisition of subsidiary
Credited to profit and loss account (continuing operations)
Deferred tax recognised directly in reserves in relation to share based payments
Change in rate
Balance carried forward
31 December 2017
£000s
31 December 2016
£000s
(518)
-
3,725
-
(1,274)
1,933
(1,176)
(4,639)
5,566
(202)
(67)
(518)
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
31 December 2017
£000s
31 December 2016
£000s
(3,014)
187
2,966
1,794
1,933
(4,655)
297
1,321
2,519
(518)
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 2017.
Deferred tax asset
Deferred tax liability
Net position
31 December 2017
£000s
31 December 2016
£000s
4,947
(3,014)
1,933
4,137
(4,655)
(518)
As at 31 December 2017, the utilisation of the deferred tax asset relating to tax losses is dependent on future taxable profits of
approximately £8.5 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 2017 the Group has unrecognised potential deferred tax assets of
£3.3 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 2017 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.
57
ANNUAL REPORT AND ACCOUNTS 2017 Notes to the Consolidated Financial Statements
17. TRADE AND OTHER PAYABLES
Trade payables
Other taxation and social security
Deferred revenue
Accruals
18. BORROWINGS
Current
Loans due within one year
Non-current
Long-term loans
31 December 2017
£000s
31 December 2016
£000s
6,780
1,422
60,598
9,042
77,842
7,809
1,599
46,120
9,247
64,775
31 December 2017
£000s
31 December 2016
£000s
6,000
5,737
39,955
26,162
Term loan and RCF
In April 2017, the Group refinanced its debt position. The new facility consists of a £30.0 million term loan to replace the previous facilities
held with The Royal Bank of Scotland. This is repayable in quarterly instalments over five years, with total repayments due in the next 12
months of £6.0 million. The outstanding balance as at 31 December 2017 was £25.5 million.
In addition to the term loan, the Group also has a revolving capital facility (RCF) of £45.0 million, with an additional accordion facility
available of £25.0 million, providing significant additional funding capability for future investment. As at 31 December 2017, the Group had
a total draw down against the RCF facilities of £21.1 million.
The new syndicated facilities have been provided by The Royal Bank of Scotland, HSBC and Bank of Ireland.
Interest is charged on the term loan and drawn down RCF at a rate of 2.25% over the London Interbank Offered Rate.
Borrowings can be reconciled as follows:
Term loan
RCF
Capitalised fees, net of amortised amount
31 December 2017
£000s
31 December 2016
£000s
25,500
21,100
(645)
45,955
15,776
16,375
(252)
31,899
58
ANNUAL REPORT AND ACCOUNTS 2017 Notes to the Consolidated Financial Statements
19. FINANCIAL ASSETS AND LIABILITIES
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.
The Group’s financial instruments are classified under IFRS as follows:
31 December 2017
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 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
Fair value (through
profit or loss)
£000s
Loans and
receivables
£000s
Amortised cost
£000s
-
-
-
369
-
-
-
369
-
(98)
-
-
(98)
-
-
3,700
3,700
2,952
-
43,255
3,017
927
50,151
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(6,000)
-
(6,780)
(9,042)
(21,822)
(39,955)
(39,955)
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)
Total
£000s
3,700
3,700
2,952
369
43,255
3,017
927
50,520
(6,000)
(98)
(6,780)
(9,042)
(21,920)
(39,955)
(39,955)
Total
£000s
4,625
4,625
6,447
94
34,703
3,107
16
44,367
(5,737)
(1,089)
(7,809)
(9,247)
(22,793)
(23,882)
(26,162)
(26,162)
(26,162)
(26,162)
59
ANNUAL REPORT AND ACCOUNTS 2017
Notes to the Consolidated Financial Statements
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
One to three
months
Three months
to one year
One to five
years
Total
£000s
£000s
£000s
£000s
£000s
-
2,952
20
14,805
-
925
-
(1)
(3,422)
-
-
15,279
-
-
195
22,767
3,017
2
(1,823)
(67)
(3,358)
(9,042)
-
11,691
-
-
154
5,683
-
-
(5,468)
(30)
-
-
-
339
3,700
3,700
-
-
-
-
-
-
-
-
-
2,952
369
43,255
3,017
927
(7,291)
(98)
(6,780)
(9,042)
(44,206)
(40,506)
(44,206)
(13,197)
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 £5,542,000).
Reclassifications
There have been no reclassifications between financial instrument categories during the years ended 31 December 2017 and 31 December
2016.
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 2017. The Group uses the following hierarchy for
determining and disclosing the fair value of financial instruments by valuation technique:
• Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities;
• Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly
or indirectly; and
• Level 3: techniques which use inputs which have a significant effect on the recorded fair value that are not based on observable
market data.
As at 31 December 2017, the only financial instruments measured at fair value were derivative financial assets/ liabilities and these are
classified as Level 2.
Type of Financial
Instrument at Level 2
Derivative assets and
liabilities
Measurement
technique
Present-value
method
Main assumptions
Main inputs used
Determining the present value of financial instruments as the
current value of future cash flows, taking into account current
market exchange rates
Observable market
exchange rates
60
ANNUAL REPORT AND ACCOUNTS 2017
Notes to the Consolidated Financial Statements
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.
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 2017
Exposures
Cash
Short and long-term derivative assets/
(liabilities)
Trade receivables
Trade accounts payable
Net balance sheet exposure
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
USD
£000s
2,389
225
11,995
(141)
14,468
USD
£000s
1,272
(871)
(8,902)
17,878
(904)
8,473
EUR
£000s
427
(80)
4,751
(12)
5,086
EUR
£000s
189
(164)
-
2,743
(126)
2,642
Other
£000s
1,767
126
353
(38)
2,208
Other
£000s
606
40
-
408
(57)
997
Total
£000s
4,583
271
17,099
(191)
21,762
Total
£000s
2,067
(995)
(8,902)
21,029
(1,087)
12,112
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 2017 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% decrease
10% increase
2017
£000s
1,608
565
2,173
2016
£000s
941
294
1,235
2017
£000s
(1,315)
(462)
(1,777)
2016
£000s
(770)
(240)
(1,010)
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.
61
ANNUAL REPORT AND ACCOUNTS 2017 Notes to the Consolidated Financial Statements
Interest rate risk
The Group is exposed to interest rate risk on its overdraft and the outstanding syndicated loans. The Group does not manage this risk with
the use of derivatives. No other liabilities accrue interest. 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
100 basis point decrease 100 basis point increase
2017
£000s
460
2016
£000s
319
2017
£000s
(460)
2016
£000s
(319)
This analysis assumes all other variables remain constant.
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 syndicated loans. 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 2017, the Group has a revolving credit facility of £21.1 million and a £30.0 million term loan (of which £25.5 million is
outstanding as at 31 December 2017) outstanding. 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.
£54.2 million of the Group’s assets are subject to credit risk (31 December 2016: £49.0 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.
62
ANNUAL REPORT AND ACCOUNTS 2017 Notes to the Consolidated Financial Statements
20. PROVISIONS
The movement in the provisions is as follows:
At 1 January 2016
Increase in provision
Acquired through business combination
Utilised
Release of unutilised provision
At 31 December 2016
Increase in provision
Foreign exchange
Utilised
Release of unutilised provision
At 31 December 2017
Current:
Non-current:
Onerous leases
£000s
Dilapidations
£000s
42
34
-
(32)
(10)
34
380
(3)
(344)
(4)
63
47
16
139
74
152
(7)
(66)
292
235
(18)
-
(59)
450
25
425
Other
£000s
2,422
20
-
(1,174)
(7)
1,261
153
-
(1,319)
(7)
88
88
-
Total
£000s
2,603
128
152
(1,213)
(83)
1,587
768
(21)
(1,663)
(70)
601
160
441
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 contained an opening 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 goodwill as a fair value adjustment in the year ended 31 December 2015. This was fully utilised in the year.
The remaining 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.
63
ANNUAL REPORT AND ACCOUNTS 2017 Notes to the Consolidated Financial Statements
21. OPERATING LEASE COMMITMENTS
As at 31 December 2017 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 2017
£000s
31 December 2016
£000s
3,985
8,526
17,243
29,754
24
16
40
3,022
9,579
18,753
31,354
52
39
91
The Group sub-lets certain areas of its property portfolio. As at 31 December 2017, the Group had contracts with sub-tenants for the
following future minimum lease rentals:
Land and Buildings
Within 1 year
Within 2 to 5 years
Over 5 years
22. EQUITY
Share capital
Allotted, called up and fully paid:
Ordinary shares at 1 January (1/14th pence)
Issue of shares: consideration GlobalData
Share buy back
Ordinary shares c/f 31 December (1/14th
pence)
Deferred shares of £1.00 each
31 December 2017
£000s
31 December 2016
£000s
230
623
799
1,652
230
783
869
1,882
31 December 2017
31 December 2016
No’000
102,346
-
-
102,346
100
102,446
£000s
73
-
-
73
100
173
No’000
76,268
26,078
-
102,346
100
102,446
£000s
54
19
-
73
100
173
Share Buy Back
As detailed in note 23, during the period the Group purchased an aggregate amount of 254,200 shares at a total market value of
£1,329,000.
64
ANNUAL REPORT AND ACCOUNTS 2017 Notes to the Consolidated Financial Statements
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.
No person has any special rights of control over the Company’s share capital and all its issued shares are fully paid.
With regard to the appointment and replacement of Directors, the Company is governed by its Articles of Association, the Companies Act
and related legislation. The Articles themselves may be amended by special resolution of the shareholders. The powers of Directors are
described in the Board Terms of Reference, copies of which are available on request.
Dividends
The final dividend for 2016 was 4.0p per share and was paid in May 2017. The total dividend for the current year was 8.0 pence per share,
with an interim dividend of 3.0 pence per share paid on 3 October 2017 to shareholders on the register at the close of business on 1
September 2017 and a final dividend of 5.0 pence per share to be paid on 27 April 2018 to shareholders on the register at the close of
business on 16 March 2018. The ex-dividend date will be on 15 March 2018.
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, 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.
Other reserve
Other reserves consist of a reserve created upon the reverse acquisition of the TMN Group Plc in 2009. The parent company reserve
differs from this due to the restatement of consolidated reserves at the time of the reverse acquisition. The parent company other reserve
was generated in 2008 upon the issue of shares to fund acquisitions.
The disclosures above are for both the Group and the Company.
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.
65
ANNUAL REPORT AND ACCOUNTS 2017
Notes to the Consolidated Financial Statements
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:
• share price at date of grant
• exercise price
•
• annual risk-free interest rate and;
• annualised volatility
time to maturity
The following assumptions were used in the valuation:
Award Tranche
Grant Date
Award 1
Award 3
Award 4
Award 6
Award 7
Award 8
Award 9
Award 10
Award 11
Award 12
Award 13
Award 14
Award 15
Award 16
Award 17
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
21 March 2017
21 March 2017
21 March 2017
21 September 2017
Awards 2 and 5 have been fully forfeited.
Fair Value of
Share Price at
Grant Date
Exercise Price
(Pence)
Estimated
Forfeiture
rate p.a.
Weighted Average
of Remaining
Contractual Life
(Years)
£1.09
£1.87
£2.55
£2.525
£2.075
£2.025
£2.040
£2.490
£2.064
£2.064
£4.425
£5.465
£5.465
£5.465
£5.740
0.0714p
0.0714p
0.0714p
0.0714p
0.0714p
0.0714p
0.0714p
0.0714p
0.0714p
0.0714p
0.0714p
0.0714p
0.0714p
0.0714p
0.0714p
15%
15%
15%
0%
15%
15%
15%
15%
0%
15%
15%
15%
15%
15%
15%
2.0
2.0
2.0
2.0
2.2
2.2
2.2
3.0
2.5
2.3
2.3
2.3
2.5
2.0
2.6
The estimated forfeiture rate assumption is based upon management’s expectation of the number of options that will lapse over the
vesting period. The assumptions were determined when the scheme was set up in 2011 and are reviewed annually. Management believe
the current assumptions to be reasonable based upon the rate of lapsed options.
The risk-free interest rate and annualised volatility for awards granted in 2017 were 1.2% and 37% respectively.
Each of the awards are subject to the vesting criteria set by the Remuneration Committee. In order for the remaining options to be
exercised, the Group’s earnings before interest, taxation, depreciation and amortisation, as adjusted by the Remuneration Committee for
significant or one-off occurrences, must exceed targets of £28 million and £39 million respectively (2016: £26.7 million and £35 million
respectively). The targets were revised during 2017 following the acquisition of the Pharmsource and Infinata businesses.
66
ANNUAL REPORT AND ACCOUNTS 2017 Notes to the Consolidated Financial Statements
Group Achieves £10m EBITDA
Group Achieves £28m EBITDA
Group Achieves £39m EBITDA
Vesting Criteria
Award 1-4
Award 6
Award 7
Award 8
Award 9
Award 10
Award 12
Award 13
Award 14
Award 15
Award 16
Award 17
20% Vest
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
40% Vest
50% Vest
40% Vest
50% Vest
40% Vest
N/A
35% Vest
35% Vest
35% Vest
25% Vest
50% Vest
20% Vest
40% Vest
50% Vest
60% Vest
50% Vest
60% Vest
100% Vest
65% Vest
65% Vest
65% Vest
75% Vest
50% Vest
80% Vest
Award 11 relates to options awarded to Executive Chairman, Bernard Cragg during 2016. The options will vest on 31 January 2019 and 31
January 2021 in equal tranches.
The total charge recognised for the scheme during the twelve months to 31 December 2017 was £5,323,000 (2016: £2,764,000). The
awards of the scheme are settled with ordinary shares of the Company.
During the period the Group purchased an aggregate amount of 254,200 shares at a total market value of £1,329,000. 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 2016
Granted
Forfeited
31 December 2017
Option price (pence)
Number of options
1/14th
1/14th
1/14th
1/14th
9,450,183
2,239,160
(1,067,486)
10,621,857
The following table summarises the Group’s share options outstanding at each year end:
Reporting date
31 December 2011
31 December 2012
31 December 2013
31 December 2014
31 December 2015
31 December 2016
31 December 2017
Options outstanding
Option price (pence)
Remaining life (years)
5,004,300
4,931,150
4,775,050
8,358,880
7,557,840
9,450,183
10,621,857
1/14th
1/14th
1/14th
1/14th
1/14th
1/14th
1/14th
3.7
4.3
3.3
2.5
2.5
3.2
2.2
24. CAPITAL COMMITMENTS
There were no capital commitments at 31 December 2017 (2016: £nil).
67
ANNUAL REPORT AND ACCOUNTS 2017
Notes to the Consolidated Financial Statements
25. DISCONTINUED OPERATIONS
As the business becomes more focused on its data and analytics offering, a number of legacy non-core business units have been
discontinued in recent years.
a) The results of the discontinued operations are as follows;
Discontinued operations
Revenue
Cost of sales
Gross loss
Administrative costs
Loss before tax from discontinued operations
Income tax
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
26. ACQUISITIONS
Year ended
31 December 2017
£000s
Year ended
31 December 2016
£000s
-
-
-
-
-
-
-
8
(73)
(65)
(652)
(717)
-
(717)
Year ended
31 December 2017
£000s
Year ended
31 December 2016
£000s
-
-
-
-
Year ended
31 December 2017
£000s
Year ended
31 December 2016
£000s
-
-
(604)
(604)
Infinata
On 7 April 2017, the Group acquired the trade and assets of the Infinata brand from The MergerMarket Group for a purchase price of US$9.6
million.
The amounts recognised for each class of assets and liabilities at the acquisition date were as follows:
Carrying Value
£000s
Fair Value
Adjustments
£000s
Fair Value
£000s
-
-
-
(2,747)
(2,747)
429
2,029
2,803
-
5,261
429
2,029
2,803
(2,747)
2,514
Intangible assets consisting of:
Brand
Customer relationships
Intellectual Property and Content
Net liabilities acquired consisting of:
Deferred revenue
Fair value of net assets acquired
68
ANNUAL REPORT AND ACCOUNTS 2017 Notes to the Consolidated Financial Statements
The goodwill recognised in relation to the acquisition is as follows:
Consideration
Less net assets acquired
Goodwill
Fair Value
£000s
7,704
(2,514)
5,190
In line with the provisions of IFRS 3, further fair value adjustments may be required within the 12-month period from the date of
acquisition. Any fair value adjustments will result in an adjustment to the goodwill balance reported above.
In the year ended 31 December 2016 the Infinata trade generated revenues of $8.0 million and profits before tax of $1.0 million. The
business has generated revenues of £4.1 million and Adjusted EBITDA of £1.0 million in the period from acquisition to 31 December 2017.
If the acquisition had occurred on 1 January 2017, the Group year to date revenue for 2017 would have been £123.0 million and the Group
loss before tax from continuing operations would have been £1.0 million.
The goodwill that arose on the combination can be attributed to the assembled workforce, know-how and expertise.
The Group incurred legal and professional costs of £0.2m in relation to the acquisition, which were recognised in other expenses.
Ascential Jersey Holdings
On 30 November 2017, the Group acquired Ascential Jersey Holdings Limited and its subsidiary MEED Media FZ LLC for cash consideration
of US $17.5 million. MEED provides premium data and analytics content with an industry focus on construction and projects in the Middle
East. The business services its growing client base principally through annual subscription contracts.
The goodwill recognised in relation to the acquisition is as follows:
Carrying
Value
£000s
Fair Value
Adjustments
£000s
Fair Value
£000s
Intangible assets consisting of:
Brand
Customer relationships
Intellectual Property and Content
Net liabilities acquired consisting of:
Tangible and intangible fixed assets
Cash
Trade receivables
Other receivables and prepayments
Trade and other payables
Accruals and deferred revenue
Fair value of net assets acquired
-
-
-
148
524
1,556
500
(985)
(6,708)
(4,965)
1,167
5,151
1,553
-
-
-
-
-
-
7,871
1,167
5,151
1,553
148
524
1,556
500
(985)
(6,708)
2,906
69
ANNUAL REPORT AND ACCOUNTS 2017 Notes to the Consolidated Financial Statements
The goodwill recognised in relation to the acquisition is as follows:
Consideration
Less net assets acquired
Goodwill
Fair Value
£000s
13,158
(2,906)
10,252
In line with the provisions of IFRS 3, further fair value adjustments may be required within the 12-month period from the date of
acquisition. Any fair value adjustments will result in an adjustment to the goodwill balance reported above.
In the year ended 31 December 2016 the MEED trade generated revenues of $18.7 million and EBITDA of $1.7 million. The business
has generated revenues of £1.3 million and Adjusted EBITDA of £0.4 million in the period from acquisition to 31 December 2017. If the
acquisition had occurred on 1 January 2017, the Group year to date revenue for 2017 would have been £133.6 million and the Group loss
before tax from continuing operations would have been £0.3 million.
The goodwill that arose on the combination can be attributed to the assembled workforce, know-how and expertise.
The Group incurred legal and professional costs of £0.2m in relation to the acquisition, which were recognised in other expenses.
Cash Cost of Acquisitions
The cash cost of acquisitions comprises:
Acquisition of Infinata
Acquisition of Ascential Jersey Holdings:
Cash consideration
Cash acquired as part of opening balance sheet
Acquisition of GlobalData Holding:
Stamp duty paid on shares
Cash acquired as part of opening balance sheet
Acquisition of Pharmsource
Year ended
31 December 2017
£000s
Year ended
31 December 2016
£000s
(7,704)
(13,158)
524
-
-
-
(20,338)
-
-
-
(312)
(614)
(1,952)
(2,878)
Cards and Wealth
On 1 January 2017, the company purchased the trade of the cards and wealth intelligence business from World Market Intelligence
Limited, a related party, for £1. The business had a liability of £0.7m deferred revenue on acquisition. The business generated revenues of
£0.7m in 2017.
70
ANNUAL REPORT AND ACCOUNTS 2017 Notes to the Consolidated Financial Statements
27. RELATED PARTY TRANSACTIONS
Mike Danson, GlobalData Plc’s Chief Executive, owns 68.0% of the Company’s ordinary shares as at 25 February 2018. 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 2017 was £2,061,600 (2016: £2,061,500).
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 2017 was £874,600 (2016: £922,900).
Loan to Progressive Trade Media Limited
As part of the 2016 disposal of non-core B2B print businesses to a related party, 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 £112,000 charged in the year ended 31 December 2017 (2016:
£125,000).
Directors and Key Management Personnel
The remuneration of Directors is discussed within the Directors’ Remuneration Report on pages 26 and 27. Remuneration of key
management personnel is detailed in note 7.
Acquisitions
In addition to the Cards and Wealth business acquired from World Market Intelligence Limited noted in the acquisitions section (note 26),
during the year, GlobalData UK Limited also acquired three businesses which were related by virtue of common ownership.
The details of these acquisitions are provided below:
Consideration
Fair Value of Net Liabilities Acquired
Goodwill
Progressive Media
Korea Limited
£000s
-
(201)
201
GlobalData Japan KK
(formerly named
Global Intelligence &
Media Japan KK)
£000s
-
(5)
5
Progressive Media
International
FZ LLC
£000s
10
(384)
394
In the case of all three acquisitions, the value of intangible assets identified as part of the acquisitions was nil.
71
ANNUAL REPORT AND ACCOUNTS 2017
Notes to the Consolidated Financial Statements
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:
Non-Trading Balances
Amounts due in greater than one year:
Progressive Trade Media Limited
Amounts due within one year:
Progressive Trade Media Limited
Trading Balances
Amounts due within one year:
Estel Property Group Limited
Progressive Media Ventures (and subsidiaries)
Compelo Group (and subsidiaries)
Research Views Group (and subsidiaries)
31 December 2017
£000s
31 December 2016
£000s
3,700
3,700
4,625
4,625
31 December 2017
£000s
31 December 2016
£000s
925
925
-
-
31 December 2017
£000s
31 December 2016
£000s
(523)
94
71
360
2
(617)
557
(61)
137
16
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.
28. SUBSEQUENT EVENTS
On 25 January 2018, GlobalData UK Limited acquired the entire share capital of CHM Research Limited, for cash consideration of £1.6m.
CHM Research provides thematic research in the global Technology, Media and Telecoms sectors and is based in London. Due to the
proximity of the acquisition to the year end, in line with the provisions of IFRS 3, fair value adjustments may be required within the year
ended 31 December 2018.
Additionally, as disclosed in the Executive Chairman’s Statement, the Company is in advanced discussions concerning the possible
acquisition of Energy, Construction data and analytics provider, Research Views Limited, a private company owned by Mike Danson and
Wayne Lloyd and a number of other minority shareholders. The contemplated Acquisition remains subject to binding legal agreements
and there can be no certainty that these discussions will lead to a transaction. If terms are agreed between the respective parties, the
Acquisition would require the approval of GlobalData’s shareholders in a general meeting.
72
ANNUAL REPORT AND ACCOUNTS 2017
Notes to the Consolidated Financial Statements
SUBSIDIARY UNDERTAKINGS
Subsidiary undertaking
Country of registration
Holding
%
Principal activity
Ascential Jersey Holdings Limited*
Canadean Brasil Consultoria E Pesquisas
De Mercado Ltda*
Jersey
Brazil
Ordinary shares
100%
Holding company
Ordinary shares
100%
Data and analytics
Canadean Limited
England & Wales
Ordinary shares
100%
Data and analytics
Canadean Mexico Y Centro America,
F. De R.L. De C.V*
Consumer Packaging Specialists
International Limited*
Mexico
Ordinary shares
100%
Data and analytics
England & Wales
Ordinary shares
100%
Data and analytics
Cornhill Publications Limited*
England & Wales
France
United States of America
Ordinary shares
Ordinary shares
Ordinary shares
Current Analysis SAS*
Current Analysis, Inc*
Current Intelligence and Analysis Ltd*
England & Wales
Dewberry Redpoint Limited*
England & Wales
Electronic Direct Response Limited
England & Wales
ERC Group Limited
England & Wales
GD Research Centre Private Limited*
India
GlobalData Australia Pty Limited
GlobalData Canada Inc*
Australia
Canada
GlobalData Holding Limited
England & Wales
GlobalData Japan KK*
GlobalData Pte Limited*
Japan
Singapore
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Global Data Publications, Inc*
United States of America
Ordinary shares
GlobalData UK Limited*
ICD Research Limited
Internet Business Group Limited
JBAD Limited*
England & Wales
England & Wales
England & Wales
England & Wales
Kable Business Intelligence Limited
England & Wales
Kable Intelligence Limited*
England & Wales
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
MEED Media FZ LLC*
MutualPoints Limited
Progressive Capital Limited*
United Arab Emirates
Ordinary shares
England & Wales
England & Wales
Ordinary shares
Ordinary shares
Ordinary shares
Progressive Digital Media (Holdings) Limited England & Wales
Progressive Digital Media Holdings, Inc
United States of America
Ordinary shares
Progressive Digital Media Inc
United States of America
Ordinary shares
Progressive Digital Media Limited
England & Wales
Progressive Digital Media Pvt Ltd
India
Progressive Media Group Limited*
England & Wales
Ordinary shares
Ordinary shares
Ordinary shares
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Non-trading
Data and analytics
Data and analytics
Data and analytics
Business Information
Non-trading
Data and analytics
Data and analytics
Data and analytics
Data and analytics
Holding company
Data and analytics
Data and analytics
Data and analytics
Data and analytics
Non-trading
Performance advertising
Data and analytics
Data and analytics
Data and analytics
Data and analytics
Non-trading
Holding company
Holding company
Holding company
Data and analytics
Data and analytics
Data and analytics
Data and analytics
Progressive Media International
Middle East FZ LLC*
United Arab Emirates
Ordinary shares
100%
Data and analytics
Progressive Media Korea Limited*
South Korea
SPG Media Group Limited*
SPG Media Limited*
TMN Media Limited
*indirectly held
England & Wales
England & Wales
England & Wales
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
100%
100%
100%
100%
Data and analytics
Holding company
Non-trading
Non-trading
73
ANNUAL REPORT AND ACCOUNTS 2017 Company Statement of Financial Position
Notes
31 December 2017
£000s
31 December 2016
£000s
Non-current assets
Property, plant and equipment
Intangible assets
Investments
Current assets
Trade and other receivables
Short-term derivative assets
Cash and cash equivalents
Total assets
Current liabilities
Bank overdraft
Trade and other payables
Short-term derivative liabilities
Short-term provisions
Short-term borrowings
Non-current liabilities
Long-term provisions
Long-term borrowings
Total liabilities
Net assets
Equity
Share capital
Share premium account
Treasury reserve
Other reserve
Merger reserve
Retained earnings
Equity attributable to equity holders
5
4
6
7
8
9
8
10
11
10
11
794
1,167
169,442
171,403
41,494
241
-
41,735
213,138
(3,014)
(53,363)
(96)
(25)
(6,000)
(62,498)
(186)
(39,955)
(40,141)
(102,639)
110,499
173
200
(2,289)
7,174
66,481
38,760
110,499
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
These financial statements were approved by the board of directors on 25 February 2018 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: £2,983,000 (2016: loss of £5,439,000)
Company number: 03925319
74
ANNUAL REPORT AND ACCOUNTS 2017
Company Statement of Changes in Equity
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
i
a
c
e
p
S
i
s
g
n
n
r
a
e
d
e
n
a
t
e
R
i
y
t
i
u
q
e
l
a
t
o
T
Balance at 1 January 2016
Loss for the year
Transactions with owners:
Shares issued for GlobalData acquisition
Dividends
Share buy back
Special reserve transfer
Share based payments charge
Balance at 31 December 2016
Loss for the year
Transactions with owners:
Dividends
Share buy back
Share based payments charge
Balance at 31 December 2017
£000s
£000s
£000s
£000s
£000s
£000s
£000s
£000s
154
-
19
-
-
-
-
200
-
-
-
-
-
-
-
-
-
-
(960)
-
-
7,174
-
-
-
-
-
-
-
-
66,481
-
-
-
-
173
200
(960)
7,174
66,481
-
-
-
-
-
-
-
-
-
-
(1,329)
-
-
-
-
-
-
-
-
-
173
200
(2,289)
7,174
66,481
48,422
2,920
58,870
-
-
-
-
(5,439)
(5,439)
-
66,500
(5,113)
(5,113)
-
(960)
(48,422)
48,422
-
-
-
-
-
-
-
-
2,764
2,764
43,554
116,622
(2,983)
(2,983)
(7,134)
(7,134)
-
(1,329)
5,323
5,323
38,760
110,499
The accompanying notes form an integral part of this financial report.
75
ANNUAL REPORT AND ACCOUNTS 2017
Year ended
31 December
2017
£000s
Year ended
31 December
2016
£000s
(2,983)
(5,439)
564
921
1,544
(274)
103
(1,180)
(776)
(777)
(2,858)
(1,489)
(4,347)
(310)
(546)
-
(856)
51,100
(29,519)
(7,356)
(1,329)
(7,134)
(5,704)
58
(5,145)
2,131
(3,014)
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
Company Statement of Cash Flows
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 in trade and other receivables
Decrease in trade and other payables
Cash used in operations
Interest paid
Net cash used in operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
Purchase of intangible assets
Acquisition of GlobalData Holding
Net cash used in investing activities
Cash flows from financing activities
Proceeds from long-term borrowings
Settlement of long-term borrowings
Repayment of short-term borrowings
Share buy back
Dividends paid
Net (outflow)/ inflow from inter-company loans
Net cash from/ (used in) financing activities
Net decrease 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.
76
ANNUAL REPORT AND ACCOUNTS 2017
Notes to the Company Financial Statements
1. GENERAL INFORMATION
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 data and analytics 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.
77
ANNUAL REPORT AND ACCOUNTS 2017
Notes to the Company Financial Statements
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 2017 is £3.0 million (year ended 31 December 2016: loss £5.4 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 2017 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.
e) Investments
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
ANNUAL REPORT AND ACCOUNTS 2017 Notes to the Company Financial Statements
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 Company 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 Company 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 2017 Notes to the Company Financial Statements
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 2016 was 4.0p per share and was paid in May 2017. The total dividend for the current year was 8.0 pence per share,
with an interim dividend of 3.0 pence per share paid on 3 October 2017 to shareholders on the register at the close of business on 1
September 2017 and a final dividend of 5.0 pence per share to be paid on 27 April 2018 to shareholders on the register at the close of
business on 16 March 2018. The ex-dividend date will be on 15 March 2018.
Computer software
£000s
Brand
£000s
3,024
658
3,682
398
4,080
(1,399)
(741)
(2,140)
(884)
(3,024)
1,056
1,542
-
-
-
148
148
-
-
-
(37)
(37)
111
-
Total
£000s
3,024
658
3,682
546
4,228
(1,399)
(741)
(2,140)
(921)
(3,061)
1,167
1,542
4. INTANGIBLE ASSETS
Cost
As at 1 January 2016
Additions
As at 31 December 2016
Additions
As at 31 December 2017
Amortisation
As at 1 January 2016
Charge for the year
As at 31 December 2016
Charge for the year
As at 31 December 2017
Net book value
As at 31 December 2017
As at 31 December 2016
80
ANNUAL REPORT AND ACCOUNTS 2017
Notes to the Company Financial Statements
5. PROPERTY, PLANT AND EQUIPMENT
Cost
As at 1 January 2016
Additions
As at 31 December 2016
Additions
As at 31 December 2017
Depreciation
As at 1 January 2016
Charge for the year
As at 31 December 2016
Charge for the year
As at 31 December 2017
Net book value
As at 31 December 2017
As at 31 December 2016
6. INVESTMENTS
Cost
As at 1 January 2016
Share based payments to employees of subsidiaries
Acquisition of GlobalData Holding
As at 31 December 2016
Share based payments to employees of subsidiaries
As at 31 December 2017
Impairment
As at 31 December 2016 and 2017
Net book value
As at 31 December 2017
As at 31 December 2016
Leasehold
improvements
£000s
Computer
equipment
£000s
225
-
225
-
225
(22)
(22)
(44)
(23)
(67)
158
181
2,420
471
2,891
310
3,201
(1,497)
(527)
(2,024)
(541)
(2,565)
636
867
Total
£000s
2,645
471
3,116
310
3,426
(1,519)
(549)
(2,068)
(564)
(2,632)
794
1,048
Group undertakings
£000s
104,818
2,764
66,814
174,396
5,323
179,719
(10,277)
169,442
164,119
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.
As the Company’s net assets exceeded the Group assets there is an indication of impairment. Sufficient evidence has been obtained to
support that there is no impairment as the value in use forecasts have sufficient headroom over the carrying amount of the investments.
81
ANNUAL REPORT AND ACCOUNTS 2017 Notes to the Company Financial Statements
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
Net derivative liability
31 December 2017
£000s
31 December 2016
£000s
1,616
94
38,004
1,235
545
41,494
2,014
211
19,571
145
342
22,283
31 December 2017
£000s
31 December 2016
£000s
241
(96)
145
54
(1,089)
(1,035)
Classification is based on when the derivatives mature. The fair values of derivatives are expected to impact the income statement over
the next year, dependent on movements in the fair value of the foreign exchange contracts. The movement in the year was a credit of
£1,180,000 (2016: cost of £770,000).
The Group uses derivative financial instruments to reduce its exposure to fluctuations in foreign currency exchange rates. The notional
values of contract amounts outstanding are:
Expiring in the year ending:
31 December 2018
9. TRADE AND OTHER PAYABLES
Trade payables
Other payables
Accruals
Amounts owed to group undertakings
Amounts owed to related parties
Euro
€’000
3,400
US Dollar
$’000
17,450
31 December 2017
£000s
31 December 2016
£000s
174
11
648
51,472
1,058
53,363
526
14
655
38,742
1,522
41,459
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.
82
ANNUAL REPORT AND ACCOUNTS 2017
Notes to the Company Financial Statements
10. PROVISIONS
At 1 January 2017
Increase in provision
At 31 December 2017
Current:
Non-current:
11. BORROWINGS
Current
Loans due within one year
Non-current
Long-term loans
Dilapidations
£000s
108
103
211
25
186
31 December 2017
£000s
31 December 2016
£000s
6,000
5,737
39,955
26,162
Term loan and RCF
In April 2017, the Group refinanced its debt position. The new facility consists of a £30.0 million term loan to replace the previous facilities
held with The Royal Bank of Scotland. This is repayable in quarterly instalments over 5 years, with total repayments due in the next 12
months of £6.0 million. The outstanding balance as at 31 December 2017 was £25.5 million.
In addition to the term loan, the Group also has a revolving capital facility (RCF) of £45.0 million, with an additional accordion facility
available of £25.0 million, providing significant additional funding capability for future investment. As at 31 December 2017, the Group had
a total draw down against the RCF facilities of £21.1 million.
The new syndicated facilities have been provided by The Royal Bank of Scotland, HSBC and Bank of Ireland.
Interest is charged on the term loan and drawn down RCF at a rate of 2.25% over the London Interbank Offered Rate.
83
ANNUAL REPORT AND ACCOUNTS 2017 Notes to the Company Financial Statements
12. FINANCIAL ASSETS AND LIABILITIES
The Company’s financial instruments are classified under IFRS as follows:
31 December 2017
Current assets
Short-term derivative assets
Other receivables
Amounts owed by related parties
Amounts owed by group undertakings
Current liabilities
Bank overdraft
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
Fair Value (through
profit or loss)
£000s
Loans and
receivables
£000s
Amortised
cost
£000s
241
-
-
-
241
-
(96)
-
-
-
-
-
-
(96)
-
-
-
94
1,235
38,004
39,333
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(3,014)
-
(174)
(11)
(648)
(51,472)
(1,058)
(6,000)
(62,377)
(39,955)
(39,955)
Total
£000s
241
94
1,235
38,004
39,574
(3,014)
(96)
(174)
(11)
(648)
(51,472)
(1,058)
(6,000)
(62,473)
(39,955)
(39,955)
84
ANNUAL REPORT AND ACCOUNTS 2017 Notes to the Company Financial Statements
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
Fair Value (through
profit or loss)
£000s
Loans and
receivables
£000s
Amortised
cost
£000s
-
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)
85
ANNUAL REPORT AND ACCOUNTS 2017 Notes to the Company Financial Statements
Maturity analysis
Current assets
Short-term derivative assets
Other receivables
Amounts owed by group undertakings
Amounts owed by related parties
Current liabilities
Bank overdraft
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
Less than
one month
£000s
One to three
months
£000s
Three months
to one year
£000s
One to five
years
£000s
162
-
-
-
-
(66)
(174)
-
(648)
-
-
(1,823)
79
94
-
1,235
-
(30)
-
(11)
-
-
(1,058)
(5,468)
-
-
38,004
-
-
-
-
-
-
(51,472)
-
-
Total
£000s
241
94
38,004
1,235
(3,014)
(96)
(174)
(11)
(648)
(51,472)
(1,058)
(7,291)
-
(2,549)
-
(5,159)
(44,206)
(57,674)
(44,206)
(68,396)
-
-
-
-
(3,014)
-
-
-
-
-
-
-
-
(3,014)
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 £5,542,000).
Reclassifications
There have been no reclassifications between financial instrument categories during the year ended 31 December 2017 and year ended 31
December 2016.
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.
£39.6 million of the Company’s assets are subject to credit risk (31 December 2016: £22.1 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
ANNUAL REPORT AND ACCOUNTS 2017 Notes to the Company Financial Statements
13. RELATED PARTY TRANSACTIONS
Directors
The remuneration of the Directors of the Group and Company is set out on page 27 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 2017 was £874,600 (2016: £922,900).
Amounts outstanding to and from group undertakings
The amounts outstanding group undertakings were:
31 December 2017
£000s
31 December 2016
£000s
Amounts owed by group undertakings:
Progressive Capital Limited
Global Data Publications Inc
GlobalData UK Limited
Progressive Digital Media Limited
Progressive Digital Media (Holdings) Limited
Current Analysis Inc
Current Intelligence & Analysis Limited
Dewberry Redpoint Limited
MutualPoints Limited
SPG Media Group Limited
GlobalData Japan KK
GlobalData Pte Limited
GlobalData Australia 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
Progressive Media International Middle East FZ LLC
TMN Media Limited
Electronic Direct Response Limited
Global Data Publications Inc
Progressive Digital Media Inc
Progressive Digital Media Pvt Limited
9,989
-
16,072
3,270
4,170
555
2,225
500
-
246
69
175
733
38,004
(2,213)
(40,983)
-
(24)
(456)
(2,263)
-
(357)
(466)
(847)
(914)
(1,447)
(1,502)
(51,472)
9,989
18
1,376
-
4,259
25
2,328
182
646
-
-
-
748
19,571
(1,973)
(22,810)
(571)
(24)
(242)
(2,263)
(7,059)
-
(466)
(847)
-
(1,381)
(1,106)
(38,742)
87
ANNUAL REPORT AND ACCOUNTS 2017 Notes to the Company Financial Statements
Amounts outstanding to and from related parties
The amounts outstanding for related parties were:
Amounts owed by related parties:
Estel Properties Investments Limited
Compelo Group (and subsidiaries)
Amounts owed to related parties:
Progressive Media Ventures (and subsidiaries)
Resesarch Views Group (and subsidiaries)
31 December 2017
£000s
31 December 2016
£000s
297
938
1,235
(149)
(909)
(1,058)
40
105
145
(1,483)
(39)
(1,522)
88
ANNUAL REPORT AND ACCOUNTS 2017 Advisers
Company Secretary
Graham Lilley
Head Office and Registered Office
John Carpenter House
John Carpenter Street
London
EC4Y 0AN
Tel: + 44 (0) 20 7936 6400
Nominated Adviser and Broker
N+1 Singer Advisory LLP
1 Bartholomew Lane
London
EC2N 2AX
Solicitors
Fieldfisher LLP
Riverbank House
2 Swan Lane
London
EC4R 3TT
United Kingdom
Auditor
Grant Thornton UK LLP
30 Finsbury Square
London
EC2A 1AG
Registrars
Link Asset Services
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
89
ANNUAL REPORT AND ACCOUNTS 2017 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