GlobalData Plc
Annual
report and
accounts
For the year ended 31 December 2018
COMPANY NO. 03925319
Contents
STRATEGIC REPORT
2018 Highlights
Our Business
Principal Activity
Our Business Model
Executive Chairman’s Statement
Chief Executive’s Report
Chief Financial Officer’s Report
Risk and Uncertainties
Going Concern and Viability
DIRECTORS’ REPORT
The Directors
Corporate Governance Report
Corporate Social Responsibility
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
5
7
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9
13
15
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21
22
24
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36
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47
48
49
86
87
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89
99
2018
Highlights
Group revenue increased by 33% to £157.6m
(2017: £118.6m)
2018
2017
£157.6m
£118.6m
Invoiced forward revenue increased by 34% to
£81.4m (2017: £60.6m)
2018
2017
£81.4m
£60.6m
Adjusted EBITDA increased by 38% to £32.2m
(2017: £23.4m)
2018
2017
£32.2m
£23.4m
Cash from operations of £25.1m (2017: £14.2m)
2018
2017
£25.1m
£14.2m
Total dividend increased to 11p per share (2017: 8p)
2018
2017
11.0p
8.0p
Reliance on this document
Our Business Review on pages 7 to 21 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 2018
“We are helping
our clients to
decode the
future, enabling
them to be more
successful and
innovative.”
Bernard Cragg, Executive Chairman
2018 Highlights
Group revenue
increased by 33%
to £157.6m
(2017: £118.6m)
.
m
6
7
5
1
£
.
m
6
8
1
1
£
Operational Highlights
• Continued strong organic revenue growth of 9%
• Increased revenue visibility
• Good progress on the integration of MEED and Research
Views Limited (“RVL”), with both businesses performing well
• New integrated user platform launched, incorporating new
sectors, further improved user interface, industry insights
and real-time technology
• Group management and operational capability further
strengthened
Financial Highlights
• Group revenue increased by 33% to £157.6m (2017: £118.6m)
• Underlying organic revenue growth of 9%, on a constant
currency basis
• Invoiced forward revenue(3) increased by 34% to £81.4m
(2017: £60.6m)
• Adjusted EBITDA(1) increased by 38% to £32.2m (2017:
£23.4m)
• Improved Adjusted EBITDA margin(1) of 20.5% (2017: 19.7%)
• Cash generated from operations of £25.1m (2017: £14.2m)
• Final Dividend of 7.5 pence per share (2017: 5.0 pence); total
dividend of 11.0 pence per share, up 38% from the previous
year (2017: 8.0 pence)
• Statutory loss before tax of £7.7m (2017: loss of £0.8m),
which is inclusive of non-cash charges of £20.4m of
amortisation of acquired intangibles, £5.7m share based
payments and £1.4m of unrealised operating foreign
exchange losses.
2018
2017
• Net debt(2) of £64.1m (2017: £43.0m)
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.
Note 3: Invoiced forward revenue: Invoiced forward revenue relates to amounts that are invoiced to clients at the balance sheet date, which relate to future
revenue to be recognised over the course of the following 12 months.
5
ANNUAL REPORT AND ACCOUNTS 2018Strategic Report “GlobalData is positioned
to help thousands of
companies, organisations
and industry
professionals across the
world’s largest industries
profit from faster, more
informed decisions.”
Bernard Cragg, Executive Chairman
Our Business
PRINCIPAL ACTIVITY
OUR BUSINESS MODEL
The principal activity of GlobalData Plc and its subsidiaries (‘the
Group’) is the provision of high quality proprietary data and analytics
to clients in multiple sectors.
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, which address a global
demand, together with powerful analysis supporting our clients’
businesses.
The fundamental principle of our business model is to provide our
clients subscription access to our data, analytics and insights
platform, with the offering of ancillary services such as bespoke
research, single copy reports and events.
Our clients typically subscribe for 12 months access, which is paid
for at the beginning of the contract term. This approach drives the
following business model attributes:
• Repeat subscriptions, leading to recurring revenue streams
• Strong incremental margins
• Robust working capital and operational cash flow
• Scalable opportunities
7
ANNUAL REPORT AND ACCOUNTS 2018Strategic Report “To deliver increased
shareholder returns
over the medium to
long term; the Group
aims to exceed client
expectations, to
achieve repeatable
organic growth.”
Bernard Cragg, Executive Chairman
Executive Chairman’s Statement
It has been another transformative year for GlobalData, with
significant acquisitions in addition to driving strong underlying
organic revenue growth of 9% and overall Adjusted EBITDA growth
of 38%.
During April we concluded the acquisition of Research Views
Limited which significantly expanded on our existing breadth of
coverage by adding comprehensive capabilities across multiple
industry sectors.
GlobalData
is positioned to help thousands of companies,
organisations and industry professionals across the world’s largest
industries profit from faster, more informed decisions. Within each
industry sector our proprietary data, human insight, and innovative
technologies create trusted, actionable, and forward-looking
intelligence. With comprehensive coverage, we can access multiple
selling points within a client and around the world. This means that
our ambitions are not constrained by demand.
Our content and expert insights are tailored to serving our clients’
major value creating activities and become embedded into key
workflows and decision making processes. With around 75% of our
revenues derived from annual subscription contracts, we have
created a long-term business partnership with our clients and
within our target markets.
The 2018 results are encouraging. We concluded some significant
acquisitions and continued our strong organic revenue growth and
exit the year with significant invoiced revenue for 2019. Our overall
financial performance, our high proportion of quality subscription
revenues and our scalable proposition means that we enter 2019
confident that we will continue to deliver against our objectives.
Whilst the Group made a statutory loss for the year of £7.7m (2017:
£0.8m loss), the bulk of the loss is represented by non-cash
accounting charges for amortisation of acquired intangible assets,
brought in as part of our significant M&A activity in this and in
previous years, and our share option scheme. The Adjusted PBT,
which we believe to be a fair measure of the Group’s underlying
performance grew from £19.0m to £27.8m.
Our Mission
We are helping our clients to decode the future, enabling them
to be more successful and innovative. Our aim is to 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, market intelligence, innovation
& new product development and sales & channel management,
together with insight into latest developments in their markets and
views of leading opinion formers.
Looking Forward
We are an ambitious and highly
innovative business which
challenges itself on a daily basis to continually be better at what
we do. We provide our clients with world-class products and client
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:
• Exceed client expectations, to achieve strong repeatable
organic growth: We have significant headroom to grow across
all our markets. We will continue to create world-class solutions,
and explore new opportunities, leveraging our sales capability
to target the right opportunity, at the right time, with the right
proposition.
• 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. We look to leverage our infrastructure
with unique content which will deliver good margin.
• Maintain a progressive dividend policy: Our business
is
focused on revenue growth, management of costs, 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. This year is a good example.
There continues to be significant uncertainty following the UK’s
vote to leave the European Union (EU), (‘Brexit’). As a Board, we have
carried out a detailed assessment to understand both the risks and
the opportunities that Brexit poses for the Group. We believe that
our data and analytics business model currently limits the direct
impact of a “no-deal” scenario (such as tariffs on goods and cross
border trade of goods).
However, we continue to monitor key aspects applicable to us,
such as access to workforce and implications that each scenario
may have to colleagues within our Group. We have set out a more
detailed analysis within the risk and uncertainties section of the
strategic report (page 18).
9
ANNUAL REPORT AND ACCOUNTS 2018Strategic Report For our
shareholders
we aim to
provide returns
which reflect
our reported
earnings and
long-term
prospects
Executive Chairman’s Statement
Our Employees
Our Employees once again have made vast contributions in what
has been another significant year of progress and challenge for
the Group. The quality, talent and commitment of our colleagues
around the world, not only delivered a good set of results, but has
also delivered substantial corporate projects such as the acquisition
and successful integration of both Research Views (completed April
2018) and MEED (completed December 2017).
I am pleased these results have been confirmed by the Audit and
Remuneration Committees to fulfil the performance condition for
the exercisability of 2.1m employee share options.
Dividend
Having regard to the performance and 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 7.5 pence per share (2017:
5.0 pence). The proposed final dividend will be paid on 26 April 2019
to shareholders on the register at the close of business on 22 March
2019. The ex-dividend date will be on 21 March 2019. The proposed
final dividend increases the total dividend for the year to 11.0 pence
per share (2017: 8.0 pence), an increase of 38%.
Current Trading and Outlook
We enter 2019 with good fundamentals including strong invoiced
revenue for 2019 and a visible renewal base. We ended 2018 strongly
and have begun 2019 positively and we remain confident that we
will make further progress.
Bernard Cragg
Executive Chairman
24 February 2019
11
ANNUAL REPORT AND ACCOUNTS 2018Strategic Report Our focus remains on
achieving our stated
objective to become
the leading provider of
premium subscription
based data & analytics
and insights across the
world’s largest industries.
KEY ACHIEVEMENTS
•
• Revenues of £157.6 million: Group revenue has grown by
33% including the benefit of our acquisitions in the year. Our
underlying organic revenue growth was 9%.
Invoiced forward revenue of £81.4m: Invoiced forward revenue
has grown by 34% and organically by 9%. This gives the Group
strong visibility over its revenues for the forthcoming year.
• Acquisition of Research Views: The acquisition of Research
Views enhances the Group’s breadth of industry coverage.
• 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.
• Restructuring of organisation: We made good progress towards
eliminating duplicate cost resulting from our M&A activity.
2018 was a year of further progression for the Group. We again
strengthened the Group via our selective M&A activity, whilst
continuing to organically grow and have improved our Adjusted
EBITDA margin.
Our focus remains on achieving our stated objective to become the
leading provider of premium subscription based data & analytics
and insights across the world’s largest industries. We are consistent
in our approach to achieving our objective and we have made strong
operational progress towards it.
The acquisition of Research Views was not only strategically
important because it further broadened our sector coverage but
significantly, also had the important attributes common to our
strategy. As the world becomes more complex, uncertain, and
fast-moving than ever before, our clients face unprecedented
opportunities and challenges. Our proprietary data, human
innovative technologies create the trusted,
expertise, and
actionable, and forward-looking insight they need to make faster,
more informed decisions.
is underpinned by our powerful
The quality of our content
Intelligence Centre platform, which delivers our data and analysis
through a dynamic and intuitive user interface. We are continually
innovating and the platform has seen significant development over
the last three years, as we have sought to leverage our scale and
ensure world class delivery in all of our industry sectors.
KEY PERFORMANCE INDICATORS
The key performance indicators selected are used by the Executive Directors to monitor the Group’s performance and progress.
2018
2017
% growth
Revenue
Adjusted EBITDA
£157.6m
£118.6m
33%
£32.2m
£23.4m
38%
Adjusted EBITDA
margin
20.5%
19.7%
0.8p.p
Net Debt1
£64.1m
£43.0m
49%
Note 1: Net debt: Short and long-term borrowings less cash and cash equivalents.
Group revenue has grown by 33% including the benefit of our acquisitions in the year. Our organic revenue growth was 9%.
13
ANNUAL REPORT AND ACCOUNTS 2018Chief Executive’s ReportStrategic Report OUR STRATEGIC PRIORITIES
We continue to pursue our four strategic priorities:
• World Class Products
• Sales Excellence
• Operational Agility
• Client Centric
World Class Products
Our content is data driven and analyst led and provides our clients
with strategic and tactical insights for the markets that they
operate in. We fully-integrate our unique data, expert analysis, and
innovative solutions into our digital platform. Giving our clients
real-time access to deep, sector-specific intelligence, and powerful
analytics, and workflow tools.
Over the past few years we have been focused on ensuring the
taxonomy of our data is consistent across all of our data sets, enabling
consistent categorisation and dynamic search functionality for our
clients. A key operation during 2018 was bringing the acquisitions
into this data framework, content management system and
delivering through our single client platform, which is now largely
complete.
We have launched a number of analysis tools and functionalities
across our platform, which now give our clients a significantly more
powerful and enhanced product, with insight into global trends.
Sales Excellence
Our priority has been to ensure that all of our sales staff fully
understand their market and the value proposition of our products,
helping them to find the right opportunity, at the right time. Whilst
managing a global sales team remains challenging, our globalised
product means that our proposition is consistent across regions and
as a result we can apply consistent training, commission structures
and selling material.
We now have a global data & analytics sales force and we have
made good progress across all regions. We have increased our sales
operations in the US and Asia Pacific. Whilst the largest contributors
of our revenues are still in UK and Europe (43%), our presence in
the Americas continues to grow and represents 34% of our Group
revenues.
Operational Agility
Our business model is a relatively simple one: create the content
once and leverage sales from that content across multiple formats
(subscriptions, reports, bespoke research engagements and
events) 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.
Following our recent acquisitions and the relative speed that we
have put the Group together over the past three years, we have
performed a strategic review of our cost base to ensure investment
funds are directed into the right areas of the business. As a result
of this we are more confident that we can significantly invest in our
products and people without significantly increasing our overall
cost base. This operational agility will keep us at the forefront of
product development for our clients, whilst delivering progressive
margins.
Our medium term Adjusted EBITDA margin target remains circa 25%
and we are confident of achieving this over the medium term and
further expanding our margin over the longer term. Consistent with
our objective, our margins have increased by 0.8 percentage points
to 20.5%.
Client Centric
Outstanding client service is a critical component in delivering client
satisfaction and improved retention. Our aim is to deliver best in
class client service at every point of interaction. We have increased
resources focused on first-line response significantly, and continue
to explore and adopt new technologies.
The progress we have made since we reformed as GlobalData in 2016
has 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.
Today 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.
Mike Danson
Chief Executive Officer
24 February 2019
14
ANNUAL REPORT AND ACCOUNTS 2018Chief Executive’s ReportStrategic Report Continuing operations
Income statement analysis
Revenue
Statutory loss before tax
Depreciation
Amortisation of software
Amortisation of acquired intangible assets
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
Cash flow analysis
Cash flow generated from operations
Adjusted operating cash flow 3
Underlying cash flow conversion %3
Adjusted earnings performance
Adjusted EBITDA1
Depreciation
Amortisation of software
Finance costs
Adjusted Profit Before Tax
Tax (as charged to the Income Statement)
Adjusted Profit After Tax
Basic Shares
Diluted Shares
Attributable to equity holders:
Basic loss per share (pence)
Adjusted earnings per share (pence)
Adjusted diluted earnings per share (pence)
2018
£000s
2017
£000s
Movement
157,553
118,649
33%
(7,664)
742
1,165
20,422
2,487
17,152
3,661
1,150
5,679
1,407
3,181
32,230
20.5%
25,058
30,542
95%
32,230
(742)
(1,165)
(2,487)
27,836
(3,408)
24,428
113,319
124,128
(9.87)
21.56
19.68
(795)
829
2,126
11,962
1,444
15,566
2,436
(1,266)
5,323
417
911
23,387
19.7%
14,196
19,669
84%
23,387
(829)
(2,126)
(1,444)
18,988
(1,371)
17,617
102,346
112,968
(2.12)
17.21
15.59
10%
38%
77%
55%
47%
39%
25%
26%
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 £5.7 million for share based payments
(2017: £5.3 million).
Note 3: Adjusted operating cash flow: Adjusted operating cash flow is cash generated from operations adjusted for exceptional cash items. Underlying cash
flow conversion is Adjusted operating cash flow divided by Adjusted EBITDA.
15
ANNUAL REPORT AND ACCOUNTS 2018Chief Financial Officer’s ReportStrategic Report THE GROUP’S PERFORMANCE THIS YEAR
1. Revenue
Revenues increased by 33% to £157.6m (2017: £118.6m), which reflects both good underlying organic growth (9%) and the benefit of the
Research Views and MEED acquisitions. The acquired businesses are performing well and in line with our expectations.
2. Invoiced forward revenue
Invoiced forward revenue (previously described as deferred revenue prior to the impact of IFRS 15) at 31 December 2018 increased by 34%
to £81.4m (2017: £60.6m) which is inclusive of growth as a result of the Research Views acquisition, but also includes underlying organic
growth of 9%.
3. Adjusted EBITDA
Adjusted EBITDA increased by 38% to £32.2m (2017: £23.4m). Our Adjusted EBITDA margin increased by 0.8 percentage points to 20.5%
(2017: 19.7%) as we continue to integrate a relatively fixed cost base after significant M&A and corporate development activity over the past
3 years.
4. Non-recurring and non-cash charges
The Group made a statutory loss from continuing operations of £7.7m (2017: loss of £0.8m)
The reason for making the loss is that we incurred non-cash charges relating to amortisation of acquired intangibles of £20.4m (2017:
£12.0m) reflecting our M&A activity over recent years, £5.7m of share based payments charge (2017: £5.3m) reflecting the accounting
charge for our long term incentive plan and revaluation loss on derivatives (currency forward contracts) of £1.2m (2017: gain of £1.3m).
Together with items relating to restructuring and acquisition fees of £6.8m (2017: £3.3m) and increased finance costs from increased debt.
Once the above adjusting items have been taken into consideration, the Adjusted Profit Before Tax grew to £27.8m (2017: £19.0m)
5. Cash Generation
The operating cash flow was £25.1m (2017: £14.2m). Excluding the cash costs associated with M&A, restructuring and other exceptional
costs (£5.4m) the adjusted operating cash flow was £30.5m, which is 95% of Adjusted EBITDA.
The Group repaid debt of £6.0m and paid dividends of £9.1m. The Group also paid for acquisitions of £4.6m, which were funded under
facilities agreed in the previous year.
Capital expenditure was £1.6m in 2018 (£1.8m in 2017). This includes £0.9m on software (£1.1m in 2017).
6. Foreign exchange impact on results
The Group derives around 60% of revenues in currencies other than Sterling. The impact of currency movements in the year had a negative
impact on revenues of around £2m, which was offset in the income statement by approximately £2m of benefit in the Group costs, meaning
that currency had minimal impact on the overall profitability. The main driver for the movement was the movements of pound sterling in
comparison to US dollar. In 2017 the average rate through the year was 1.29 compared to a stronger pound, on average, in 2018 of 1.34.
7. Net Debt
Net Debt increased to £64.1m as at 31 December 2017 (2017: £43.0m). This increase principally reflects £4.6m spent on M&A activity and
£16.9m on the purchase of own shares in order to satisfy the Group’s long term incentive plan.
8. Loss per share
Basic loss per share from continuing operations was 9.87 pence per share (2017: loss of 2.12 pence per share). Fully diluted loss per share
from continuing operations was 9.87 pence per share (2017: loss of 2.12 pence per share).
On an adjusted basis, the adjusted earnings per share grew from 17.21 pence per share to 21.56 pence, representing 25% growth.
9. Share based payments
The share based payments charge for 2017 has increased from £5.3m to £5.7m. The key driver for this increase is because of the share price
performance during 2018 compared with previous awards.
16
ANNUAL REPORT AND ACCOUNTS 2018Chief Financial Officer’s ReportStrategic Report 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 and from a cash flow perspective
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. The exchange rate movements
have had a largely neutral impact on our 2018 results.
As a data and analytics company, we are not currently impacted by cross border tariffs and we do not currently 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. The Directors
have prepared a Going Concern and Long-Term Viability statement on page 21, within the Strategic Report.
Graham Lilley
Chief Financial Officer
24 February 2019
17
ANNUAL REPORT AND ACCOUNTS 2018Chief Financial Officer’s ReportStrategic Report GlobalData’s mission is ‘to help our clients succeed by decoding the future’
Our vision is to become the Bloomberg of the vertical markets by being the world’s trusted source of strategic industry intelligence.
The Group recognises that in order to be successful, we are required to take risks. The Board and the broader Group understand, however,
that risks need to be taken in a controlled environment where our approach is one of responsible risk taking in line with the principles,
culture, tolerance and appetite as directed by the Board.
GlobalData’s approach to the identification, evaluation and mitigation of risk and uncertainty is taken seriously. Our internal controls seek to
minimise the impact of risks. As Globaldata has grown significantly in the past 18 months, the Board felt it an appropriate point to conduct
a detailed review of its approach to risk management.
As a result of this review, a Risk Management Action Plan (RMAP) has been created and agreed actions are currently being delivered. The
new Risk Management Framework outlined in the RMAP, will further embed risk management throughout the organisation. The Framework
will be overseen and directed by the Board, with day to day delivery provided by all colleagues.
The Board sets the Group’s risk appetite. In doing so, the Board considers our strategic objectives, approves the Group’s principle risks
and assesses against the long-term viability of the Group. The Board also considers the views of the Executive Management and Audit
Committee as part of its systematic review of internal controls.
The Board
Audit Committee
Review and Confirmation
The Board’s responsibilty is to review and approve the Group’s
strategy and objectives and determine the Group’s appetite
for risk and then establish the Group’s risk management
processes and internal control.
Challenge and Review
Risks and mitigations reviewed by the Audit Committee
and input into the risk management and internal control
procedures.
Executive Management
Committee
Ongoing Review, control and implementation
There is ongoing review on the internal controls and risk is
embedded into the decision making process of the business.
During the year we have continued to develop controls in response to risk and ensure that the new acquisitions are embedded and have
consistent controls with the rest of the Group. Whilst we have made good progress, throughout the forthcoming year the Group will deliver
the RMAP, which will include the introduction of a formal annual risk review, a more detailed assessment of risk appetite and risk tolerance,
in addition to regular reviews with members of the Executive Management Committee.
The Audit Committee will continue to monitor the adequacy and effectiveness of internal control and risk management systems and ensure
that a robust assessment of the principal risks facing the Group has been undertaken.
18
ANNUAL REPORT AND ACCOUNTS 2018Risk and uncertaintiesStrategic Report 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 dependent
on the quality and
relevance of our
products.
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.
Loss of revenues from
new and renewable
business if the quality
and relevance of our
products diminishes.
One of our key strategic priorities is World Class products. The Executive
Management Committee regularly review renewal and usage rates of our products
which is a key indicator of quality. In order to ensure the highest quality we;
• Have a robust data integrity platform and processes.
• Continue to invest in recruiting and retaining high quality analysts and
Failure to recruit
or retain key staff
could lead to
reduced innovation
and progress in the
business.
researchers.
• 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.
The Group actively manages its talent and ensures that there are succession plans
for its Board and Executive Management Committee.
• The Group operates a competitive remuneration package, with competitive
commission and incentive schemes.
• Experienced management team with a robust on boarding programme for sales
people which allows talented and motivated employees to flourish.
• 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 to changing
markets and reduced
financial performance
arising from
competitive threats.
• The Group routinely reviews the competitive landscape to identify potential
threats and acquisition opportunities.
• We constantly monitor new technology capabilities and innovation to 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 replicate.
• Aim to embed our products and service in client organisations thereby increase
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.
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.
•
• We operate in different geographies and therefore operate in a balanced portfolio
Increased controls over capital expenditure and working capital.
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.
19
ANNUAL REPORT AND ACCOUNTS 2018Risk and uncertaintiesStrategic 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.
A significant mitigation is the natural hedge we have from our global operations.
We generate around 60% of revenues from currencies other than sterling, which
is predominantly US dollar whilst around 40% of costs derived from non-sterling
currencies, which are all primarily linked to movements of US dollar.
The net cash flow exposure is then managed by entering into foreign exchange
contracts that limit the risk from movements in US Dollar, Euro and Indian Rupee
exchange rates with Sterling.
The Group does not fully mitigate its exposure to currency movements and around
20% of its net currency cash flow is unhedged each quarter.
The Group’s treasury position is a recurring agenda item for the Audit Committee.
IT, Cyber, Systems
Failure and data
integrity.
Significant operational
or client disruption
caused by a major
IT disaster or cyber
attack/ databreach.
•
•
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 providers with 24 hour management
and monitoring with back up and disaster protocols.
• The Group regularly reviews its cyber security and website security protocols, and
has undergone a review from an external third party.
The Group may be
subject to regulations
restricting its activities
or effecting changes in
taxation.
The failure to
successfully identify
and integrate key
acquisitions could
lead to loss of profits,
inefficient business
processes, inconsistent
corporate culture and
weakened brand.
The uncertainty
surrounding the UK’s
exit from the European
Union and potential
“no-deal” scenario
will pose direct and
indirect threats and
opportunities to the
Group.
• The majority of the Group’s operations are based in the United Kingdom, United
States of America and India. Appropriate advisors are employed in all geographies
to ensure the Group remains compliant with local laws and regulations. The Group
has an anti-bribery policy that has been distributed amongst staff.
• All acquisitions are subject to rigorous due diligence and operational review, the
findings of which are presented to the main Board as part of the supervision and
approval process.
• Where necessary external advisors with either technical and/or local knowledge
are engaged.
• For smaller acquisitions. A separate investment committee, with delegated
responsibility from the Board, review the diligence process.
The Group has performed a detailed risk assessment of the impact of Brexit on our
business. Whilst we expect that the majority of the impact will be indirect, due to the
service nature of our business model, the Group has assessed the below specific risks
to our Group:
• Workforce - The Group employs over 3,000 employees worldwide, of which 886
are based in the UK.
Of the 886 employees in the UK, approximately 79% are British citizens, 15% EU
(non-British) and 6% are from outside the EU.
The Group will act as a support network to our colleagues affected and try to
clarify the various processes and documentation that they will need to navigate
through in either a “deal” or “no-deal” scenario.
The supply of skilled applicants may also fall, particularly in London if EU workers
leave the UK. We will continue to monitor the number of applicants for each role
and take action where necessary.
• Cross Border Trade – We currently aren’t affected by cross border tariffs because
of the service nature of our trade. We will continue to monitor the situation.
Regulatory
Compliance
Acquisition and
Disposal Risk
Brexit
20
ANNUAL REPORT AND ACCOUNTS 2018Risk and uncertaintiesStrategic 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 formally assessed the viability of the Group to December 2022, taking account of the Group’s current position, its cash
flows and the potential impact of the principal risks as outlined on pages 18 to 20 of this Annual Report.
The Group’s prospects are assessed primarily through the annual budgeting process. Detailed plans are prepared by the Executive
Management Committee and are presented to the Board at the annual away day, which allows a deep dive into various areas of the business
and gives opportunity for input and scrutiny by the Board which ensures alignment with the overall Group strategy. Progress against plan
is presented to the Board throughout the year, commenting on performance and any newly identified risks. The individual plans are then
consolidated into an overall Group plan.
As noted on page 7 of the Annual Report, our business model has strong fundamental attributes; significant recurring and visible revenue
streams, strong incremental margins, robust working capital and operational cash flow and scalable opportunity.
The Board feels that the Group’s four strategic priorities give the appropriate focus to protect the business from risks, threats and
uncertainties as well as giving the agility to pursue opportunities as they arise and to capitalise on the business model attributes. The focus
on being client centric, developing world class products, sales excellence and operational agility are the correct focuses aligned with the
Group’s Mission and Vision.
The Group has a combined facility of £100m with The Royal Bank of Scotland, HSBC and Bank of Ireland. The Board have reviewed cash
flows until 2022 which demonstrate ability to trade with headroom on its facilities and to meet ongoing repayments of the term loan. There
is a remaining £12 million to draw on the facility.
The directors have also reviewed the forecast against the financial covenants on this facility and over the same period and there are no
forecasted breaches of covenants.
The Board are satisfied that the current financial position of the Group, its significant visibility on revenues and other business model
fundamentals provide a stable platform for the Group to pursue its mission and vision for the Group. The Board are confident that in pursuing
the four stated strategic priorities will protect business interests against threats and allow the Group to pursue opportunities that will drive
growth.
Mike Danson
Chief Executive, approving the Strategic Report on behalf of the Board
24 February 2019
21
ANNUAL REPORT AND ACCOUNTS 2018Going concern and viabilityStrategic Report Bernard Cragg
Executive Chairman
Mike Danson
Chief Executive
Graham Lilley
Chief Financial Officer
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.
Mike Danson 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. GlobalData
acquired the Datamonitor
Financial, Datamonitor
Consumer, MarketLine and
Verdict businesses from
Informa Plc in 2015.
Graham joined the Group in
2011 and progressed through to
Group Finance Director before
becoming Chief Financial
Officer in January 2018.
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’s
involvement and experience in
data subscription businesses
provides a valuable view on
financial performance and
understanding of the business
model.
22
ANNUAL REPORT AND ACCOUNTS 2018The DirectorsDirectors’ Report Murray Legg
Non-Executive Director
Peter Harkness
Non-Executive Director
Annette Barnes
Non-Executive Director
Andrew Day
Non-Executive Director
Murray Legg is a Chartered
Accountant with over 35
years of audit and advisory
experience gained with
PricewaterhouseCoopers
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.
Annette joined the Board in
February 2017. In her Executive
Career, Annette was most
recently Managing Director
of Wealth & Mass Affluent for
Lloyds Banking Group and
CEO of Lloyds Bank Private
Banking Limited. Prior to that,
Annette was Managing Director
of Bank of Scotland (Retail).
Annette has over 30 years of
Financial Services experience,
working for Lloyds Banking
Group, Bank of America, MBNA
Europe Bank Ltd and NWS Bank
Ltd. Annette is also a Non-
Executive Director of Leeds
Building Society. Annette’s
prior experience has given her
an excellent understanding of
Technology, product channels
to meet customer needs,
Operational Management and
Risk Management.
Andrew David Day, is currently
employed as Group Chief Data
Officer for Pepper Financial
Services Group where he is
responsible for driving the
adoption of data, analytics
and machine learning across
the group businesses to drive
positive commercial and
customer outcomes. Prior to
joining Pepper Andrew was
Group Chief Data Officer at
J Sainsbury Plc, Business
Intelligence Director at News
UK and General Manager
of Business Intelligence at
Telefonica. With over 25 years’
experience of commercially
orientated data and analytics
experience, Andrew has a
successful track record for
implementing transformational
data driven change across a
number of industry sectors.
Peter Harkness has more
than 32 years’ experience
as a Director or Chairman of
several successful businesses,
predominantly in the media
sector. In addition to leading
a number of private equity
deals, Peter has also spent a
total of 18 years as a Non-
Executive Director of 5 quoted
companies, including Walker
Greenbank Plc and Chrysalis
VCT Plc, and has twice been
a Plc Chairman. Peter was a
Non-Executive Director of
Datamonitor until its sale to
Informa and was chairman of
the Butler Group until its sale
to Datamonitor. Peter has also
undertaken board roles in the
Third Sector and is currently
chair of a charitable trust
which manages arts and sports
facilities in Gloucestershire.
Peter’s experience and
understanding of the media
and information subscription
sector is an excellent asset
for the GlobalData Board, in
particularly how we sell and the
selling process.
23
ANNUAL REPORT AND ACCOUNTS 2018The DirectorsDirectors’ Report The Board has set out its responsibility for preparing the Annual Report and Accounts on page 36. The Board consider the Annual Report
and the Accounts, taken as a whole, is fair balanced and understandable and provides the information necessary for shareholders to assess
the company’s position and performance, business model and strategy.
The Board is committed to the highest standards of corporate governance and has adopted all requirements of the UK Corporate Governance
Code that are applicable to it as a ‘smaller company’ (defined in the UK Corporate Governance Code as being a company below the FTSE
350). The UK Corporate Governance Code is publically available at:
www.frc.org.uk/directors/corporate-governance-and-stewardship/uk-corporate-governance-code
Details of details of GlobalData’s corporate governance practices are publicly available on its website www.globaldata.com.
Responsibility for governance matters lies with the Board, which is accountable to shareholders and wider stakeholders for the activities
of the Group. The Board has voluntarily set out its report on Corporate Governance released in 2018 for accounting periods effective after
1 January 2019.
Board Leadership and Company Purpose
The Group is led by the Board. The Executive Directors meet regularly with Investors to discuss the performance and governance of the
Group and any feedback is communicated and distributed to the wider Board. The Chair of the Remuneration and Audit Committees make
themselves available to discuss with Investors annually at the AGM.
The Board assess the basis on which the company generates and preserves value over the long-term and have prepared a long-term
viability statement on page 21. The Board considers the opportunities and threats to the business model and assessment is made on how
the Group’s strategy is aligned to addressing the Group’s mission and protecting the sustainability of the business. The regular challenge
and governance provided by the Board keeps the Executive Management Committee and the entire organisation united in achieving the
company goals.
The Board have recognised within the long-term viability statement that culture is an important aspect of its four strategic priorities which
ultimately drives the Group towards its Mission. The Group is a diverse, global business but we aim to have a common tone across the
organisation. We promote agility, innovation, hard work and ethical behaviours underpinned by our framework of ethical codes. We invest in
our employees training and development with clear progression and career plans that allow our colleagues to flourish. We deliver consistent
training, communication and policy across the company and within different work groups. We recognise that it is advantageous to promote
differing cultures within different functions of the organisation which all contribute to the overall culture of the business, for example we
have implemented a reward structure within our sales teams which is consistent across the globe and is aimed to get the best out of sales
teams, but the reward structures elsewhere in the business differ dependent on performance metrics.
The Company operates a “VOICES” network, which is an employee group working together to drive positive change for GlobalData. We
encourage our employees to share their feedback and ideas on the issues that matter to them and their colleagues. This group is the
platform to gather and discuss feedback, suggest ideas for improvement, and help to implement them. The results of the initiatives led by
VOICES is published to colleagues on the internal intranet. Our colleagues can also raise concerns in confidence and anonymously via our
whistle blowing hotline, which is monitored by the Senior Independent Non-Executive Director. The Directors believe that the VOICES and
whistleblowing forums give the Board sufficient insight of the view of the workforce and that representation on the Board is not currently
required.
24
ANNUAL REPORT AND ACCOUNTS 2018Corporate Governance ReportDirectors’ Report Division of Responsibilities
The Board is made up of three Executive Directors and four Non-Executive Directors. The Executive Directors who have served during the
year are Bernard Cragg, Mike Danson, and Graham Lilley.
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 business.
The Code requires that the Chairman should, on appointment, meet the independence criteria set out in code. As the Chairman is an
Executive Director and participates in the Company’s employee share option scheme he is not considered independent. Nevertheless, the
Board considers the Executive nature of his role and his participation in the employee share option scheme (with vesting targets based on
time rather than Company performance) does not influence the Chairman’s independence of character and judgement within the meaning
of the code nor does it influence him or the Board in the proper discharge of their duties and the operation of the business of the Group.
Our non-executive team comprises Peter Harkness, the Senior Independent Director, Annette Barnes, Andrew Day and Murray Legg.
Peter Harkness has served on the Board as non-executive Director since 25 June 2009. The Board and the Nominations Committee have
specifically considered Peter’s independence and is of the opinion that length of service is not necessarily a complete or accurate measure
of a Director’s independence. In the Board’s opinion, Peter continues to fulfil the requirements of acting as an independent director and he
is an important member of the team with experience of the Group’s operations and history over his term which is a key asset in assisting the
executives in delivering the Group’s strategy.
The Non-Executive Directors’ shareholdings are detailed in the Directors’ Interests table on page 29 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 2018, 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 and has set out its approach to risk on page 18.
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.
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.
25
ANNUAL REPORT AND ACCOUNTS 2018Corporate Governance ReportDirectors’ Report Composition, Succession and Evaluation
The Board has established a Nomination Committee to lead the process for appointments and manage succession plans for its executives.
The committee is comprised of two Executive Directors and two Non-Executive Directors, with the casting vote going to Peter Harkness,
the Non-Executive Chair of the Nominations Committee. Where the Nominations Committee uses an external search agency to appoint a
member of the Board, it is disclosed in the Annual Report. No new appointments were made during the year.
The Group benefits from the diversity and variety of its workforce and is fully committed to maintaining and encouraging diversity, including
the composition of the Board. The Board is currently made up of 6 male directors and 1 female and the Executive Management Committee
had 9 male employees and 2 female employees serve during the year.
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 Board conducts an annual evaluation process, which involves the performance appraisal of both the Executive and Non-Executive
members of the Board. The review is undertaken by all Directors via an online survey on the overall performance of the Board during the year,
which is fed back and debated at the annual Away Day, which then drives the actions and objectives of the Board for the forthcoming year.
Individual Directors are appraised by virtue of their role within the Board, whereby the Chairman appraises the Chief Executive and the Non-
Executive Directors, the Chief Executive appraises the Chief Financial Officer and the entire Board appraise the Chairman which is delivered
by the Senior Non-Executive Director.
As a ‘smaller company’ (defined in the UK Corporate Governance Code as being a company below the FTSE 350) the Board have decided that
the internal evaluation conducted in the year is sufficient and that external facilitation of the board performance review is not necessary in
this financial period.
Audit, Risk and Internal Control
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 2018.
Board meetings during the year:
Number of meetings
Bernard Cragg
Mike Danson
Graham Lilley
Murray Legg
Peter Harkness
Annette Barnes
Andrew Day
Board
12
12
12
12
12
12
12
12
Audit
Committee
4
Remuneration
Committee
2
Nomination
Committee
1
N/A
N/A
N/A
4
4
4
4
N/A
N/A
N/A
2
2
2
2
1
1
N/A
1
1
N/A
N/A
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.
26
ANNUAL REPORT AND ACCOUNTS 2018Corporate Governance ReportDirectors’ Report The Committee is responsible for:
• monitoring the integrity of the financial statements and any formal announcements relating to the company’s financial performance,
and reviewing significant financial reporting judgements contained in them;
• providing advice on whether the annual report and accounts, taken as a whole, is fair, balanced and understandable, and provides the
information necessary for shareholders to assess the company’s position and performance, business model and strategy;
reviewing the company’s internal financial controls and internal control and risk management systems;
•
• considering annually whether there is a need for an internal audit function and reporting its view and findings to the Board;
• conducting the tender process and making recommendations to the Board, about the appointment, reappointment and removal of the
external auditor, and approving the remuneration and terms of engagement of the external auditor;
•
reviewing and monitoring the external auditor’s independence and objectivity;
•
reviewing the effectiveness of the external audit process, taking into consideration relevant UK professional and regulatory requirements;
• developing and implementing policy on the engagement of the external auditor to supply non-audit services, ensuring there is prior
approval of non-audit services, considering the impact this may have on independence, taking into account the relevant regulations
and ethical guidance in this regard, and reporting to the board on any improvement or action required; and
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 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 internal controls are considered within the Risk and Uncertainties section of the
Strategic Report on page 18.
During the year, the Board set up a separate independent committee to oversee the acquisition of Research Views Limited, a related party
acquisition. The committee was comprised of a majority of Non-Executive Directors and did not include Mike Danson, who was not deemed
to be independent on the transaction. The committee oversaw the process and received independent advice and reports from advisors on
legal, financial and valuation matters.
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 sales 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 review of management accounting control checklists
Remuneration
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 34 and 35. The terms of reference of the Remuneration Committee are available
for inspection on request.
27
ANNUAL REPORT AND ACCOUNTS 2018Corporate Governance ReportDirectors’ 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 set out a long-term viability statement on page 21 of the Strategic report.
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.
The directors’ interests are disclosed on page 29, which includes the shareholding of Mike Danson who owns 81,028,349 shares, representing
68.6% of the total share capital. There are no other individual shareholders owning more than 10% of the company’s issued share capital.
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.
The Company has authority to purchase its own shares. The authority, limits the maximum number of shares which can be purchased to
approximately 5% of the Company’s current issued share capital. The authority is proposed each year as a resolution at the company’s AGM
for shareholders to vote on.
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 2018, the Group employed the following number of employees of each gender:
Male
Female
28
2018
No.
2,011
1,232
3,243
2017
No.
1,492
1,064
2,556
ANNUAL REPORT AND ACCOUNTS 2018Corporate Governance ReportDirectors’ 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 2018 the Group had 71 days purchases outstanding (2017:
61 days).
Subsequent events
On 4 January 2019, the Group acquired the entire share capital of the Aroq Limited Group for cash consideration of £6.8m. Aroq provides
global business information in the auto, drinks, food and style sectors. Further details is given in Note 31 of the financial statements.
Financial instruments
Use of financial instruments and exposure to various financial risks has been discussed within the Strategic Report (page 17).
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 24 to the financial statements. As at 24 February 2019, Mike Danson had a
beneficial interest of 68.6 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 24 February 2019 in the ordinary shares of the Company were as follows:
Bernard Cragg
Mike Danson
Murray Legg
Peter Harkness
Number of ordinary shares
390,000
81,028,349
23,000
70,000
29
ANNUAL REPORT AND ACCOUNTS 2018Corporate Governance ReportDirectors’ Report Sustainability is key part of our strategy, and for us at GlobalData it is about safeguarding future growth not only for us as company but also
for our employees, clients and shareholders.
When GlobalData was formed in early 2016 we recognised that how we engage with our people, clients, business partners, the wider
community and environment is fundamental to the Group’s success. The Group is committed to focus on creating and maintaining positive
long-term relationships with our broad base of stakeholders.
Sustainability Themes
For us at GlobalData, our sustainability activities are focused around four key themes:
Our People
Our commitment to our people remains paramount as we recognise that the motivation, creativity and engagement of our people is critical
to the Group’s success. We aim to be an employer of choice and one where our people feel respected, rewarded and engaged. Our success
and are future success depends on GlobalData being able to attract and retain the right talent and we operate a “VOICES” network, which
is an employee group working together to drive positive change for GlobalData.
Areas of focus:
• Strong internal training scheme
• Enhanced benefits packages available
• Annual performance reviews and internal movement
• Diversity in geographies, languages and experience
• Staff social and charity events, team building across groups and geographies.
Our Clients
Our data, analytics and insight help our clients to “decode the future”. Our data and analytical insight allows our clients contextualise the
competitive landscape they operate within, helping them make better informed and timelier decisions.
Areas of focus:
• Trust in our data
•
• Ethical standards
• Privacy and data protection
Integrity of our research methodologies
30
ANNUAL REPORT AND ACCOUNTS 2018Corporate Social ResponsibilityDirectors’ ReportGlobalData SustainabilityOur PeopleSocialInvestmentEnvironmentOur Clients
Social Investment
Social Investment allows GlobalData to contribute to the success of charities and organisations; we help to ensure that they can achieve
their aims in a sustainable, long-term way.
Areas of focus:
• Social engagements to raise money for selected charities
• Helping our communities to access basic and improved education
Environment
We are a data and analytics company in which our products are created and distributed digitally. Our carbon footprint is considerably
smaller than for many other companies of our size. Despite the structural benefits that we have as a digital company, we are committed to
minimising the impact of our operations on the environment.
Areas of focus:
• Energy waste reduced through smart office lighting systems
• Travel and accommodation policies encourage carbon offsetting and minimising the Group’s carbon footprint.
• Focus on modern business practices such as video and virtual meetings to reduce the need to travel
CSR Case Study: Creating a brighter future for local children
GlobalData has funded a number of CSR initiatives in India over
the last year, supporting education and children in the local
community. The projects include a logic, language and life skills
program focused on improving reading, logic and life enhancing
skills; supporting an orphanage to improve the standard of living
and education for children from vulnerable backgrounds; and
funding better learning for marginalised groups in government
schools.
Our teams in India enjoy the chance to see the benefit of this
work first hand, having visited the orphanage to interact with the
children, organising games, competitions and a talent show.
These projects are funded through employee generosity and
various office fundraising activities, as well as support from the
business, which has donated over £18,000 combined to these
causes.
31
ANNUAL REPORT AND ACCOUNTS 2018Corporate Social ResponsibilityDirectors’ 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 2018.
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 2018. As part
of the review, we engaged in discussion with the external auditors on whether significant areas of judgement and significant risks were
adequately evaluated, reported and disclosed.
During 2018, we focused upon the following areas:
• The Group Going Concern and long term viability of the Group, in discussion with the Board
• Assessing the impact of IFRS 15 ‘Revenue from Contracts with Customers’ and IFRS 9 ‘Financial Instruments‘, both were effective 1
January 2018
• Assessing the impact of IFRS16 ‘Leases’, which is effective 1 January 2019
• Fair value review of Research Views Limited
• Review of the appropriateness of the Adjusted EBITDA measure reported for 2018, including the Employee Share Award Target and
adjustments made to reported EBITDA.
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 2018 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.
External Auditor
The Committee recommends the reappointment of Grant Thornton UK LLP for 2019. We believe that their independence, their objectivity
and the effectiveness of the external audit remains strong. This is safeguarded through their continuing challenge, their focused reporting
and their discussions with both management and the Audit Committee in planning and concluding their work.
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 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.
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 6 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.
32
ANNUAL REPORT AND ACCOUNTS 2018Audit Committee ReportDirectors’ 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
24 February 2019
33
ANNUAL REPORT AND ACCOUNTS 2018Audit Committee ReportDirectors’ Report Directors’ Report
Directors’ Remuneration Report
Unaudited information
The Remuneration Committee
I am pleased to present the Remuneration Committee’s report to you for 2018.
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 25.
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 24 February 2019 are:
Contract date
Notice period
12 April 2016
1 October 2008
1 November 2018
23 February 2016
25 June 2009
24 January 2017
24 January 2017
3 months
12 months
12 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
34
ANNUAL REPORT AND ACCOUNTS 2018 Directors’ Report
Directors’ Remuneration Report
Audited Information
Directors’ emoluments
Executive Directors
Bernard Cragg
Mike Danson
Graham Lilley
Simon Pyper
Non-Executive Directors
Kelsey van Musschenbroek
Mark Freebairn
Murray Legg
Peter Harkness
Annette Barnes
Andrew Day
Basic salary
Other benefits
£000s
£000s
2018 total
£000s
2017 total
£000s
150
-
167
-
-
-
40
40
30
30
-
50
-
-
-
-
-
-
-
-
150
50
167
-
-
-
40
40
30
30
150
98
-
122
10
10
40
40
25
25
The other benefits consist of company cars and health insurance cover.
As at 31 December 2018, Graham Lilley had 200,000 share options in issue (2017: 200,000) and Bernard Cragg had 250,000 share options
in issue (2017: 250,000). Further details are given in note 25. No options were exercised during 2018 (2017: nil). No other Directors as at 31
December 2018 had share options.
The Remuneration Committee is currently reviewing the existing long-term incentive for its top executives, including the Chief Executive
Officer.
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 £32 million, £41 million and £52 million
respectively (2017: £28 million and £39 million respectively). The targets were revised during 2018 following the acquisition of MEED and
Research Views Limited.
The total charge recognised for the scheme during the year ended 31 December 2018 was £5.7 million (2017: £5.3 million). The awards of the
scheme are settled with ordinary shares of the Company.
The Remuneration Committee received notification from the Audit Committee that the quality of Adjusted EBITDA in 2018 of £32.2 million
was sufficient to satisfy the first target of £32 million. The employees who have share options dependent on the meeting of the £32 million
target will therefore get the opportunity to vest their options following the publication of the results.
By order of the Board
Peter Harkness
Chairman of the Remuneration Committee
24 February 2019
35
ANNUAL REPORT AND ACCOUNTS 2018 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 23 April 2019 at John Carpenter House, John Carpenter Street, London EC4Y 0AN at 10am.
On behalf of the Board
Mike Danson
Chief Executive
24 February 2019
36
ANNUAL REPORT AND ACCOUNTS 2018 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 2018 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
2018 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.
CONCLUSIONS RELATING TO PRINCIPAL RISKS, GOING CONCERN AND VIABILITY STATEMENT
•
We have nothing to report in respect of the following information in the annual report, in relation to which the ISAs (UK) require us to report
to you whether we have anything material to add or draw attention to:
•
the disclosures in the annual report 1 set out on page 18 that describe the principal risks and explain how they are being managed or
mitigated;
the directors’ confirmation, set out on page 36 of the annual report that they have carried out a robust assessment of the principal risks
facing the group, including those that would threaten its business model, future performance, solvency or liquidity;
the directors’ statement, set out on page 36 of the financial statements about whether the directors considered it appropriate to adopt
the going concern basis of accounting in preparing the financial statements and the directors’ identification of any material uncertainties
to the group’s ability to continue to do so over a period of at least twelve months from the date of approval of the financial statements;
• whether the directors’ statement relating to going concern required under the Listing Rules in accordance with Listing Rule 9.8.6R(3) is
•
•
materially inconsistent with our knowledge obtained in the audit; or
the directors’ explanation, set out in page 21 of the annual report as to how they have assessed the prospects of the group, over
what period they have done so and why they consider that period to be appropriate, and their statement as to whether they have a
reasonable expectation that the group will be able to continue in operation and meet its liabilities as they fall due over the period of their
assessment, including any related disclosures drawing attention to any necessary qualifications or assumptions.
Note 1 the term used to describe the annual report should be the same as that used by the directors.
37
ANNUAL REPORT AND ACCOUNTS 2018Independent Auditor’s Report To The Members Of GlobalData Plc Independent Auditor’s Report Overview of our audit approach
• Overall group materiality: £1,128,000, which represents 3.5% of the Group’s Adjusted EBITDA.
• We performed full scope audit procedures on key business operations in the UK, United Arab Emirates 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 Research Views Limited; and
Impairment of intangible assets.
• Key audit matter identified for the parent company as:
•
Impairment of investments.
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 and is the first
year of adoption of IFRS 15. As such, 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 and implementation
of relevant controls in the revenue business cycle relevant to the audit as well
as testing the operating effectiveness of these relevant controls. We tested the
operating effectiveness of relevant controls through inquiry, observation and
inspection;
• We have compared management’s assessment of the IFRS 15 transition analysis
against the requirements of the standard. We have obtained a sample of contracts to
corroborate the terms and conditions noted in the analysis.
• we performed substantive testing on a sample of revenue transactions throughout
the year across each of the significant 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 had access and verifying that
the delivery of the products had occurred;
whether revenue was recognised in accordance with the group’s revenue
accounting policies;
whether revenue was recognised in the correct period by checking evidence
that verifies when the service was delivered or product was sold; and
for a sample of revenue contracts we tested managements’ recognition of
income by recalculating revenue recorded with reference to the contractual
arrangements and/or contractual project milestone deliveries;
•
•
•
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 and operating
effectiveness of relevant 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.
38
ANNUAL REPORT AND ACCOUNTS 2018Independent Auditor’s Report To The Members Of GlobalData Plc Independent Auditor’s Report
Key Audit Matter - Group
How the matter was addressed in the audit - Group
Acquisition accounting of Research
Views Limited
During March 2018 GlobalData Plc finalised
the acquisition of Research Views Limited
for £97.3million. Consideration was settled
in the form of additional shares within
GlobalData Plc.
As a result of this acquisition, the Group
recorded intangible assets and goodwill of
£33 million and £90 million respectively as
stated in Note 29. Management has made
key judgements in determining the allo-
cation 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 Research Views 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.
Impairment of intangible assets
A significant balance on the consolidated
statement of financial position is
intangible assets of £258.5 million,
including goodwill of £212.2 million as
detailed in Note 13. 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:
• Obtaining relevant purchase documents to assess whether management had
accounted for the acquisition appropriately;
• Challenging the change of control date given the announcement, tax clearances and
completion of all resolutions were held on different dates;
• Engaging our internal valuations specialists to assist the audit team in assessing the
reasonableness of the underlying assumptions used in the management’s valuation
models performed by management’s external specialists;
• Challenging the identification of intangible assets by obtaining the acquisition
agreement and assessing management’s identification of intangible assets;
• Challenging the valuation methodology of intangible assets by engaging our internal
valuation specialists to assess whether management’s valuation models were in line
with relevant valuation standards;
• Auditing the opening balance sheet on acquisition, for example but not limited to,
testing a representative sample for cash after date on trade receivables, post year
end payments on creditors and recalculated the deferred income; and
• Challenging management’s assumptions with reference to historic data, sensitivity
analysis, re-computation and benchmarking against industry data available. The
assumptions include 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 2 to the group financial statements and related disclosures are included
in note 13.
Key observations
We have noted adjustments relating to the consideration value due to the change
of control occurring when the irrevocable undertaking was issued rather than date
of the shares being issued and incorrect capitalisation of acquisition related costs.
Management has corrected these adjustments in the annual report. No further
significant issues were raised 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:
• An assessment of the methodology and the internal control environment relating
to the intangible assets impairment review. This involved assessing the design and
implementation of relevant controls, that changes are monitored, scrutinised by
appropriate personnel and the final assumptions used in impairment testing have
been appropriately approved;
• Challenging the identification of cash generating units identified by management
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 impairment test.
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 13.
Key observations
Our testing did not identify significant deficiencies in the design and implementation
of relevant 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.
39
ANNUAL REPORT AND ACCOUNTS 2018Independent Auditor’s Report To The Members Of GlobalData Plc Independent Auditor’s Report
Key Audit Matter - Group
How the matter was addressed in the audit - Group
Impairment of investments
A significant balance on the parent
company statement of financial position
is investments of £175.1 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 design and implementation of relevant controls 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, 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
other key assumptions in the value in use calculations for goodwill and intangible
assets such as discount rates, long term growth rates and sensitivities used by
recalculating the discount rates and benchmarking against industry data where
available; and
• Evaluating the disclosures related to impairment test.
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 implementation
of relevant 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.
40
ANNUAL REPORT AND ACCOUNTS 2018Independent Auditor’s Report To The Members Of GlobalData Plc Independent Auditor’s Report
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
Financial statements as a
whole
Materiality was set at £1,128,000 which was
3.5% of the Adjusted EBITDA (Adjusted EBITDA
as defined by management on page 44). 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 for the current year is higher than
the level that we determined for the year ended
31 December 2017 to reflect the increase in the
Group’s Adjusted EBITDA.
Parent
Materiality was initially determined using
total assets but capped at £800,000 which
represents the component materiality
(Component materiality was set at 70% of Group
materiality). We consider this benchmark to be
most appropriate as the parent company is a
holding company therefore users would be most
interested in its asset base. The benchmark has
then been adjusted to an appropriately low level
to reduce the probability that the aggregate of
uncorrected and undetected misstatements in the
group financial statements exceeds materiality for
the group financial statements as a whole.
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 2017 to reflect the increase
in the underlying performance and size of the
Company.
Performance materiality
used to drive the extent of
our testing
Specific materiality
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
£57,150 and misstatements below that threshold
that, in our view, warrant reporting on qualitative
grounds.
£40,000 and misstatements below that threshold
that, in our view, warrant reporting on qualitative
grounds.
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 design, implementation and operating effectiveness of processes and controls over key financial systems identified as
part of our risk assessment. This included gaining an understanding 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 man-
aged and controlled.
• There are a number of overseas subsidiaries. The audit testing for the UK and overseas subsidiaries in respect of the group audit was
performed by the Group audit team and Grant Thornton United Arab Emirates who acted as component auditors.
• Our Group scoping ensures we have attained coverage on full scope and targeted procedures of 98% of Group revenues and 93% of
Adjusted EBITDA and 95% of Total assets. The balance was tested analytically to Group materiality.
41
ANNUAL REPORT AND ACCOUNTS 2018Independent Auditor’s Report To The Members Of GlobalData Plc Independent Auditor’s Report
Coverage of
Group Revenues
Coverage of
Adjusted EBITDA
Coverage of
Total Assets
Full scope
Targeted
procedures
Analytical
procedures
Other information
The directors are responsible for the other information. The other information comprises the information included in the annual report and
accounts, 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.
In this context, we also have nothing to report in regard to our responsibility to specifically address the following items in the other
information and to report as uncorrected material misstatements of the other information where we conclude that those items meet the
following conditions:
• Fair, balanced and understandable – the statement given on page 36 by the directors that they consider the annual report and financial
statements taken as a whole is fair, balanced and understandable and provides the information necessary for shareholders to assess
the group’s performance, business model and strategy, is materially inconsistent with our knowledge obtained in the audit; or
• Audit committee reporting - the section set out on page 32 to 33 does not appropriately address matters communicated by us to the
audit committee; or
• Directors’ statement of compliance with the UK Corporate Governance Code set out on page 24 – the parts of the directors’ statement
required under the Listing Rules relating to the company’s compliance with the UK Corporate Governance Code containing provisions
specified for review by the auditor in accordance with Listing Rule 9.8.10R(2) do not properly disclose a departure from a relevant provi-
sion of the UK Corporate Governance Code.
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.
•
42
ANNUAL REPORT AND ACCOUNTS 2018Independent Auditor’s Report To The Members Of GlobalData Plc Independent Auditor’s Report 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 31, 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.
USE OF OUR REPORT
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.
Mark Henshaw
Senior Statutory Auditor
for and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
London
24 February 2019
43
ANNUAL REPORT AND ACCOUNTS 2018Independent Auditor’s Report To The Members Of GlobalData Plc Independent Auditor’s Report Consolidated Income Statement
Continuing operations
Revenue
Cost of sales
Gross profit
Administrative costs
Other expenses
Operating (loss)/ profit
Analysed as:
Adjusted EBITDA1
Items associated with acquisitions and restructure of the Group
Other adjusting items
EBITDA2
Amortisation
Depreciation
Operating (loss)/ profit
Finance costs
Loss before tax from continuing operations
Income tax expense
Loss for the year from continuing operations
(Loss)/ profit for the year from discontinued operations
Loss for the year
Attributable to:
Equity holders of the parent
Non-controlling interest
4
7
6
7
7
10
11
28
Loss per share attributable to equity holders from continuing operations:
12
Basic loss per share (pence)
Diluted loss per share (pence)
(Loss)/ earnings per share attributable to equity holders from discontinued
operations:
Basic (loss)/ earnings per share (pence)
Diluted (loss)/ earnings per share (pence)
Total basic loss per share (pence)
Total diluted loss per share (pence)
The accompanying notes form an integral part of this financial report.
Notes
Year ended 31
December 2018
Year ended 31
December 2017
Restated
£000s
£000s
157,553
(98,153)
59,400
(29,077)
(35,500)
(5,177)
32,230
(6,842)
(8,236)
17,152
(21,587)
(742)
(5,177)
(2,487)
(7,664)
(3,408)
(11,072)
(1,255)
(12,327)
(12,434)
107
(9.87)
(9.87)
(1.11)
(1.11)
(10.97)
(10.97)
118,649
(75,882)
42,767
(22,335)
(19,783)
649
23,387
(3,347)
(4,474)
15,566
(14,088)
(829)
649
(1,444)
(795)
(1,371)
(2,166)
10
(2,156)
(2,156)
-
(2.12)
(2.12)
0.01
0.01
(2.11)
(2.11)
1 We define Adjusted EBITDA as EBITDA adjusted for costs associated with acquisitions, restructuring of the Group, share based payments, impairment,
unrealised operating exchange rate movements, impairment and impact of foreign exchange contracts. See note 7 of the financial statements for details.
We present Adjusted EBITDA as additional information because we understand that it is a measure used by certain investors and because it is used as the
measure of Group profit or loss. However, other companies may present Adjusted EBITDA differently. EBITDA and Adjusted EBITDA are not measures of financial
performance under IFRS and should not be considered as an alternative to operating profit or as a measure of liquidity or an alternative to net income as
indicators of our operating performance or any other measure of performance derived in accordance with IFRS.
2 EBITDA is defined as earnings before interest, tax, depreciation, amortisation and impairment.
44
ANNUAL REPORT AND ACCOUNTS 2018
Consolidated Statement of Comprehensive Income
Loss for the year
Other comprehensive income
Items that will be classified subsequently to profit or loss:
Net exchange gains/ (losses) on translation of foreign entities
Other comprehensive gain/ (loss), net of tax
Total comprehensive loss for the year
Attributable to:
Equity holders of the parent
Non-controlling interest
The accompanying notes form an integral part of this financial report.
Year ended 31
December 2018
£000s
Year ended 31
December 2017
£000s
(12,327)
(2,156)
988
988
(11,339)
(11,446)
107
(117)
(117)
(2,273)
(2,273)
-
45
ANNUAL REPORT AND ACCOUNTS 2018 Consolidated Statement of Financial Position
Notes
31 December 2018
31 December 2017
Restated
31 December 2016
Restated
£000s
£000s
£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
Equity attributable to equity holders of the parent
14
13
30
18
16
17
15
19
20
15
22
22
18
20
24
24
24
24
24
1,314
258,492
2,775
6,709
269,290
-
-
51,324
529
6,268
58,121
327,411
(92,660)
(6,000)
(5,204)
(1,408)
(364)
(105,636)
(437)
(6,571)
(64,341)
(71,349)
(176,985)
150,426
184
200
(19,142)
(37,128)
163,810
798
41,704
150,426
1,243
150,548
3,700
4,947
160,438
6
-
42,421
369
2,952
45,748
206,186
(69,537)
(6,000)
(2,990)
(98)
(160)
(78,785)
(441)
(3,014)
(39,955)
(43,410)
(122,195)
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
32,851
94
6,447
40,031
183,652
(55,018)
(5,737)
-
(1,089)
(1,364)
(63,208)
(223)
(4,655)
(26,162)
(31,040)
(94,248)
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 24 February 2019 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.
46
ANNUAL REPORT AND ACCOUNTS 2018
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
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
l
e
b
a
t
u
b
i
r
t
t
a
y
t
i
u
q
E
l
f
o
s
r
e
d
o
h
y
t
i
u
q
e
o
t
t
n
e
r
a
p
e
h
t
g
n
i
l
l
o
r
t
n
o
c
-
n
o
N
t
s
e
r
e
t
n
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
£000s
Balance at 1 January 2017
173
200
(960)
(37,128)
66,481
(73)
60,711
89,404
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)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(2,156)
(2,156)
(117)
-
(117)
(117)
(2,156)
(2,273)
-
-
-
(7,134)
(7,134)
-
(1,329)
5,323
5,323
Balance at 31 December 2017
173
200
(2,289)
(37,128)
66,481
(190)
56,744
83,991
-
-
-
-
-
-
-
-
89,404
(2,156)
(117)
(2,273)
(7,134)
(1,329)
5,323
83,991
(Loss)/ profit for the year
Other comprehensive income:
Net exchange loss on translation
of foreign entities
Total comprehensive loss for the
year
Transactions with owners:
Acquisition of entity with
non-controlling interest
Acquisition of non-controlling
interest
Issue of share capital
Dividends
Share buy back
Share based payments charge
Excess deferred tax on share
based payments
-
-
-
-
-
11
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(16,853)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
97,329
-
-
-
-
-
(12,434)
(12,434)
107
(12,327)
988
-
988
-
988
988
(12,434)
(11,446)
107
(11,339)
-
-
546
546
(579)
(579)
(653)
(1,232)
-
-
-
-
-
-
-
-
97,340
(9,110)
(9,110)
-
(16,853)
5,679
5,679
1,404
1,404
Balance at 31 December 2018
184
200
(19,142)
(37,128)
163,810
798
41,704 150,426
The accompanying notes form an integral part of this financial report.
-
-
-
-
-
-
97,340
(9,110)
(16,853)
5,679
1,404
150,426
47
ANNUAL REPORT AND ACCOUNTS 2018
Consolidated Statement of Cash Flows
Continuing operations
Cash flows from operating activities
Loss for the year from continuing operations
Adjustments for:
Depreciation
Amortisation
Finance costs
Taxation recognised in profit or loss
Non-trading foreign exchange gain
Share based payments charge
Decrease/ (increase) in trade and other receivables
Increase in inventories
Decrease 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)/ increase 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
Loan fees
Settlement of long-term borrowings
Dividends paid
Share buy back
Net cash (used in)/ from financing activities (continuing operations)
Net decrease in cash and cash equivalents from discontinued operations
Total cash flows (used in)/ from financing activities
Net increase/ (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.
48
Year ended
31 December 2018
Year ended
31 December 2017
Restated
£000s
£000s
(11,072)
(2,166)
742
21,587
2,487
3,408
-
5,679
1,606
(26)
(703)
1,150
200
25,058
(2,173)
(2,255)
20,630
(912)
19,718
(4,607)
(724)
(890)
(6,221)
(235)
(6,456)
(6,000)
30,473
(285)
(8,408)
(9,110)
(16,853)
(10,183)
-
(10,183)
3,079
2,952
237
6,268
829
14,088
1,444
1,371
(274)
5,323
(1,147)
-
(3,020)
(1,266)
(986)
14,196
(1,412)
(70)
12,714
267
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
ANNUAL REPORT AND ACCOUNTS 2018 Notes to the Consolidated Financial Statements
1. GENERAL INFORMATION
Nature of operations
The principal activity of GlobalData Plc and its subsidiaries (together ‘the Group’) is to provide business information in the form of high
quality proprietary data and analytics to clients in multiple sectors.
GlobalData Plc (‘the Company’) is a company incorporated in the United Kingdom and listed on the Alternative Investment Market (AIM).
The registered office of the Company is John Carpenter House, John Carpenter Street, London, EC4Y 0AN. The registered number of the
Company is 03925319.
Basis of preparation
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.
The 2017 comparatives have been adjusted for the effect of discontinued operations to give a fair comparison of statement of financial
position and income statement line items. Details of the discontinued operations are disclosed in note 28 of the financial statements.
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.
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 13.
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 deferred income tax asset in its financial statements, which requires judgement for determining the extent of
its recoverability at each statement of financial position 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 25.
49
ANNUAL REPORT AND ACCOUNTS 2018 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 25.
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 17 to the financial statements. Additional disclosures on the assumptions behind the provision are provided in note 21
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 13 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.
Acquisition accounting
On 28 March 2018, the Group took control of the entire share capital of Research Views Limited. Although the acquisition was subject to
shareholder vote at a general meeting on 24th April, HMRC had approved the commercial aspects of the transaction and Mike Danson had
signed an irrevocable undertaking to vote in favour of the acquisition. Therefore, at this stage the Group was certain the deal would be
approved and started to integrate and manage the acquired business and hence it is management’s judgement that the date of acquisition
was 28 March 2018.
Management has determined it is most appropriate to follow the principles of IFRS 3 “Business Combinations”, and apply acquisition
accounting for acquisitions of entities under common control. As the Group paid over and above the book value of Research Views Limited,
this allows for the recognition of these intangibles and reflects the fact that the rights of the minority interest shareholders have been
affected. Irrespective of both Globaldata Plc and Research Views Limited being under common control, management’s judgement is that the
transaction was a combination of two businesses and the Group is expected to benefit from the synergies of combining the two businesses.
Defined benefit pension asset
As part of the acquisition of Research Views Limited and its subsidiaries, the Group acquired a defined benefit pension scheme. As at 31
December 2018 the scheme is in surplus, however management’s judgement is that the surplus should not be recognised in the statement
of financial position. IFRIC14 came into effect on 1 January 2018 and applies to pension schemes reporting under IAS19. Under IFRIC14,
recognition of a surplus should be considered in the context of whether a scheme sponsor has a future unconditional right to a refund of a
scheme surplus that may arise. Management have considered the scheme rules which state that receipt of any refund would be conditional
on how the trustees determine the overall surplus should be distributed. Management have therefore taken the view that the Group does
not have an unconditional right to a refund and as such have not recognised the surplus as an asset.
50
ANNUAL REPORT AND ACCOUNTS 2018Notes to the Consolidated Financial Statements Going concern
The Group meets its day-to-day working capital requirements through free cash flow. Based on cash flow projections the Group considers
the existing financing facilities to be adequate to meet short-term commitments.
The finance facilities were issued with debt covenants which are measured on a quarterly basis. Management have reviewed forecasted
cash flows and there is no indication that there will be any breach in the next 12 months.
The Directors have a reasonable expectation that there are no material uncertainties that cast significant doubt about the Group’s ability
to continue as a going concern. Accordingly, the Group has prepared the annual report and financial statements on a going concern basis
2.ACCOUNTING POLICIES
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
2018 and is consistent with the policies applied in the previous year, except for the new standard now effective, IFRS 15 and IFRS 9.
IFRS15: Revenue from contracts with customers
IFRS 15 (effective from 1 January 2018) provides a single, principles based five-step model to be applied to all sales contracts, based on
the transfer of control of goods and services to customers The major change is the requirement to identify and assess the satisfaction of
delivery of each performance obligation in contracts in order to recognise revenue.
Following an assessment of the financial impact of the changes required from the adoption of this new standard, there is no material
change to the Consolidated Income Statement of the Group. The change only affects the recognition of bespoke research revenue, where
we are no longer able to recognise revenue over the course of a contract on a completion basis, but instead must recognise revenue
once performance obligations have been delivered. Materially, the delivery on a completion basis was very much aligned to delivery of key
milestone in our contracts and therefore does not differ in materially when compared with the provisions of the new standard.
The Consolidated Statement of Financial Position has been adjusted by the requirement to net down deferred income against trade
receivables for amounts that have been invoiced but the service had not started at the 31 December 2018 and are not yet due. This
adjustment has not affected the net assets of the Group. The Group has adopted IFRS 15 on 1 January 2018 using the ‘full’ retrospective
approach. As a result, the prior period Consolidated Statement of Financial Position have been restated as detailed in note 5.
IFRS9: Financial Instruments
On 1 January 2018, IFRS9 ‘Financial Instruments’ also came into effect. The new standard is based on the concept that financial assets
should be classified and measured at fair value, with changes in fair value recognized in profit and loss as they arise (“FVPL”), unless
restrictive criteria are met for classifying and measuring the asset at either Amortized 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 period end are also posted to the
income statement.
51
ANNUAL REPORT AND ACCOUNTS 2018Notes to the Consolidated Financial Statements
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 16 Leases (Issued on 13 January 2016 and effective for periods on or after 1 January 2019)
IFRIC Interpretation 23 Uncertainty over Income Tax Treatments (Issued in June 2017 and effective for periods on or after 1 January
2019)
• Amendments to IAS 19: Plan Amendment, Curtailment or Settlement (issued on 7 February 2018 and effective for periods on or after 1
January 2019)
• Amendments to IFRS 3: Business Combinations (issued on 22 October 2018 and effective for periods on or after 1 January 2020)
• Amendments to References to the Conceptual Framework in IFRS Standards (issued on 29 March 2018 and effective for periods on or
after 1 January 2020)
• 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
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
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 in the normal course of business net of discounts, VAT and sales taxes, and provisions for cancellations and
non-payment.
• Subscription income for online services, data and analytics is normally received at the beginning of the services and is therefore
recognised as a contract liability, “invoiced forward revenues”, on the balance sheet. Revenue is recognised evenly over the period of
the contractual term as the performance obligations are satisfied evenly over the term of subscription.
• Revenue from single copy reports are recognised upon delivery. The client pays for a single static report and the company meets its
contract obligation at the point in time the report is delivered to the client.
• Revenue from the provision of bespoke research services is recognised once contractual performance obligations have been delivered.
Bespoke projects can have a single or series of different deliverables from reports, presentations or delivery of data workbooks. Revenue
is recognised as each contractual obligation is satisfied.
• Event revenue is recognised when the event is held in line with the contract obligations.
• Other revenue is recognised in reference to performance obligations as contracted.
Where amounts have been invoiced in advance of services performed and the amounts are due, this is included within invoiced forward
revenue as a contract liability.
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.
52
ANNUAL REPORT AND ACCOUNTS 2018Notes to the Consolidated Financial Statements
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 49. 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 7, the Group separates out amortisation of acquired intangibles from other group amortisation charges.
Computer software and websites
Non-integral computer software purchases are capitalised at cost as intangible assets. The Group also capitalises development costs
associated with new products in accordance with the development criteria prescribed within IAS 38 “Intangible Assets”. These costs are
amortised over their estimated useful lives of 3 years. Costs associated with implementing or maintaining computer software programmes
are recognised as an expense. Amortisation and impairment charges are accounted for within the administrative costs category within the
income statement.
Impairment of intangible assets
Assets that have an indefinite useful life are not subject to amortisation but are reviewed for impairment annually or whenever events or
changes in circumstances indicate that the carrying amount may not be recoverable. Assets that are subject to amortisation are reviewed
for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment
loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the
higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest
levels for which there are separately identifiable cash flows (cash generating units).
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.
53
ANNUAL REPORT AND ACCOUNTS 2018Notes to the Consolidated Financial Statements 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 contributes to defined contribution pension schemes. Contributions to these schemes are charged to the income statement as
incurred.
The Group also operates a small defined benefit scheme, inherited from the Research Views Limited acquisition in 2018. The scheme is
closed for future accrual. The cost of providing this benefit is determined using the Projected Unit Credit Method, with actuarial valuations
carried out on a triennial basis. Net interest is calculated by applying a discount rate to the opening net defined benefit liability or asset
and shown in finance costs, and the administration costs are shown as a component of operating expenses. Actuarial gains and losses are
recognised in full in the period in which they occur, outside of the Consolidated Income Statement and in the Consolidated Statement of
Comprehensive Income. The retirement benefit obligation recognised in the Consolidated Statement of Financial Position represents the
actual deficit or surplus in the Group’s defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any
economic benefits available in the form of refunds from the plans or reductions in future contributions to the plans.
j) Provisions
A provision is recognised in the statement of financial position when the Group has a legal obligation or constructive obligation as a result
of a past event, it is more likely than not that an outflow of resources will be required to settle that obligation, and a reliable estimate of the
amount can be made. Provisions are discounted if the time value of money is material.
k) Cash and cash equivalents
Cash and cash equivalents include cash in hand and deposits held on call, together with other short term highly liquid investments that are
readily convertible to known amounts of cash which are subject to an insignificant risk of changes in value.
l) Operating leases
Rentals applicable to operating leases where substantially all of the benefits and risks of ownership do not transfer to the lessee are charged
to the income statement on a straight line basis over the period of the lease. Rental income from sub-leasing property space is recognised
on a straight line basis over the period of the relevant lease.
m) Financial instruments
The Group has derivative and non-derivative financial instruments which comprise foreign currency contracts, receivables, cash, loans and
borrowings, and trade payables.
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.
54
ANNUAL REPORT AND ACCOUNTS 2018Notes to the Consolidated Financial Statements 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.
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.
55
ANNUAL REPORT AND ACCOUNTS 2018Notes to the Consolidated Financial Statements 3. SEGMENTAL ANALYSIS
The principal activity of GlobalData Plc and its subsidiaries (together ‘the Group’) is to provide business information in the form of high
quality proprietary data and analytics to clients in multiple sectors.
IFRS 8 “Operating Segments” requires the segment information presented in the financial statements to be that which is used internally
by the chief operating decision maker to evaluate the performance of the business and to decide how to allocate resources. The Group has
identified the Executive Directors as its chief operating decision maker.
Business information is provided to customers through 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. The Executive Directors also monitor revenue within the operating
segment.
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 7)
Depreciation
Amortisation (excluding amortisation of acquired intangible assets)
Finance costs
Loss before tax from continuing operations
Year ended
31 December 2018
Year ended
31 December 2017
Restated
£000s
157,553
157,553
32,230
(35,500)
(742)
(1,165)
(2,487)
(7,664)
£000s
118,649
118,649
23,387
(19,783)
(829)
(2,126)
(1,444)
(795)
Geographical analysis
Our primary geographical markets are serviced by our global sales teams which are organised into European Key Accounts, Global Business
Development, US and Asia Pacific. The below disaggregated revenue is derived from the geographical location of our customer rather than
the team structure we are organised by.
From continuing operations
Year ended 31 December 2018
UK
Europe
Americas1
Asia Pacific
MENA2
Rest of World
Revenue from external customers
£000s
25,322
£000s
42,848
£000s
54,263
£000s
14,967
£’000
14,662
£000s
5,491
Total
£000s
157,553
Year ended 31 December 2017
UK
Europe
Americas1
Asia Pacific
MENA2
Rest of World
Total
Revenue from external customers
20,847
33,381
£000s
£000s
£000s
45,067
£000s
£’000
£000s
£000s
12,428
3,544
3,382
118,649
1. Americas includes revenue to the United States of America of £51.4m (2017: £42.4m)
2. Middle East & North Africa
Intangible assets held in the US and Canada were £23.2 million (2017: £13.1 million), of which £18.1 million related to Goodwill (2017: £11.6
million). Intangible assets held in the UAE were £17.5m (2017: £18.1 million) of which £11.4m related to Goodwill (2017: £10.3 million). All other
non-current assets are held in the UK. The largest customer represented less than 2% of the Group’s consolidated revenue.
56
ANNUAL REPORT AND ACCOUNTS 2018Notes to the Consolidated Financial Statements 4. REVENUE
The Group generates revenue from services provided over a period of time such as recurring subscription and other services which are
deliverable at a point in time such as reports, events and custom research.
Subscription income for online services, data and analytics (typically 12 month) is normally received at the beginning of the services and is
therefore recognised as a contract liability, “invoiced forward revenues”, on the balance sheet. Revenue is recognised evenly over the period
of the contractual term as the performance obligations are satisfied evenly over the term of subscription.
The revenue on services delivered at a point in time is recognised when our contractual obligation is satisfied, such as delivery of a static
report or delivery of an event. The obligation on these types of contracts is a discreet obligation, which once met satisfies the group
performance obligation under the terms of the contract.
Any invoiced contracted amounts which are still subject to performance obligations and where the payment has been received or is
contractually due, is recognised within invoiced forward revenue at the statement of financial position date. Typically, the Group receives
settlement of cash at the start of each contract and standard terms are zero days.
Revenue recognised in
Consolidated Income Statement
Invoiced Forward Revenue recognised within the
Consolidated Statement of Financial Position
Year ended
31 December 2018
Year ended
31 December 2017
As at
31 December 2018
As at
31 December 2017
£000s
116,807
40,746
157,553
£000s
83,021
35,628
118,649
£000s
55,490
11,670
67,160
£000s
38,706
13,587
52,293
Services transferred:
Over a period of time
Immediately on delivery
Total
The impact of IFRS 15 reduced the invoiced forward revenue balance at 31 December 2018 for services transferred over a period of time from
£69,759,000 to £55,490,000 which was a result of reducing the balance for contracted amounts whereby the service has not started and
the payment is not contractually due. All service obligations are due within 1 year.
At 31 Dec 2018, total 2019 revenue already invoiced totalled £81,429,000 (2017: £60,598,000) comprising the above amounts due and
additional amounts not recognised in the statement of financial position which are contracted for receipt later in 2019.
On a like for like basis the underlying growth of invoiced 2019 revenue (excluding the IFRS 15 adjustment) was 9%, with the additional
amounts being added through businesses acquired in the year.
The Group determines each contract value in negotiation with each client depending on the list price of each service and number and type
of licence or delivery. The Group’s sales team are compensated in part by fixed salary and part by commission compensation based upon
sales performance, the commission cost is recognised in full at the point of sale and is for contracts no longer than 1 year in length.
57
ANNUAL REPORT AND ACCOUNTS 2018Notes to the Consolidated Financial Statements 5. RESTATEMENT
IFRS 15 came into effective from 1 January 2018 and following an assessment of the financial impact of the changes required from the
adoption of this new standard, there is no material change to the Consolidated Income Statement of the Group. The change only affects the
recognition of bespoke research revenue, where we are no longer able to recognise revenue over the course of a contract on a completion
basis, but instead must recognise revenue once performance obligations have been delivered. Materially, the delivery on a completion
basis was very much aligned to delivery of key obligation milestone within our contracts and therefore does not differ in materially when
compared with the provisions of the new standard.
The Consolidated Statement of Financial Position has been adjusted by the requirement to net down deferred income against trade
receivables for amounts that have been invoiced but the service had not started at the 31 December 2018 and are not yet due. This
adjustment has not affected the net assets of the Group.
Effect on Statement of Financial Position as at 31 December 2018
Non-current assets
Property, plant and equipment
Intangible assets
Trade and other receivables
Deferred tax assets
Current assets
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
Equity attributable to equity holders of the parent
58
31 December
2018
As reported
£000s
IFRS 15
Adjustments
Net down
31 December 2018
excluding
IFRS 15 adj
£000s
£000s
1,314
258,492
2,775
6,709
269,290
51,324
529
6,268
58,121
327,411
(92,660)
(6,000)
(5,204)
(1,408)
(364)
-
-
-
-
-
(14,269)
-
-
(14,269)
(14,269)
1,314
258,492
2,775
6,709
269,290
65,593
529
6,268
72,390
341,680
14,269
(106,929)
-
-
-
-
(6,000)
(5,204)
(1,408)
(364)
(105,636)
14,269
(119,905)
(437)
(6,571)
(64,341)
(71,349)
(176,985)
150,426
184
200
(19,142)
(37,128)
163,810
798
41,704
150,426
-
-
-
-
14,269
-
-
-
-
-
-
-
-
-
(437)
(6,571)
(64,341)
(71,349)
(191,254)
150,426
184
200
(19,142)
(37,128)
163,810
798
41,704
150,426
ANNUAL REPORT AND ACCOUNTS 2018Notes to the Consolidated Financial Statements
The Group has adopted IFRS 15 on 1 January 2018 using the full retrospective approach. As a result, the Consolidated Statement of Financial
Position at 31 December 2017 has been restated as detailed in the table below.
31 December
2017
As reported
£000s
IFRS 15
Adjustments
Net down
31 December 2017
excluding
IFRS 15 adj
£000s
£000s
Non-current assets
Property, plant and equipment
Intangible assets
Trade and other receivables
Deferred tax assets
Current assets
Inventories
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
Equity attributable to equity holders of the parent
1,243
150,548
3,700
4,947
160,438
6
42,421
369
2,952
45,748
206,186
(69,537)
(6,000)
(2,990)
(98)
(160)
(78,785)
(441)
(3,014)
(39,955)
(43,410)
(122,195)
83,991
173
200
(2,289)
(37,128)
66,481
(190)
56,744
83,991
-
-
-
-
-
-
(8,305)
-
-
(8,305)
(8,305)
8,305
-
-
-
-
8,305
-
-
-
-
8,305
-
-
-
-
-
-
-
-
-
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
Additionally, the Consolidated Income Statement for the year ending 31 December 2017 has been restated to reflect the discontinued
operations (see note 28).
59
ANNUAL REPORT AND ACCOUNTS 2018Notes to the Consolidated Financial Statements 6. OPERATING (LOSS)/ PROFIT
Operating (loss)/ profit is stated after the following expenses relating to continuing operations:
Depreciation of property, plant and equipment
Amortisation of intangible assets
Loss 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
7. 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 2018
Year ended 31
December 2017
£000s
742
21,587
365
4,746
41
383
£000s
829
14,088
1,230
3,013
100
253
Year ended 31
December 2018
Year ended 31
December 2017
£000s
£000s
83
263
34
3
383
77
147
26
3
253
Year ended 31
December 2018
Year ended 31
December 2017
£000s
3,661
3,181
6,842
5,679
1,150
1,407
20,422
35,500
£000s
2,436
911
3,347
5,323
(1,266)
417
11,962
19,783
During the year the Group has undergone significant M&A activity, particularly the acquisition of Research Views Limited therefore costs
associated with the M&A has been adjusted from Adjusted EBITDA.
Furthermore, the Group’s M&A and expansion over the past three years meant the Group underwent some significant restructuring,
principally as a result of the Research Views Limited, but also to remove duplicated costs from prior acquisitions and to align the Group’s
cost base to its strategy and needs going forward.
The adjustments made are as follows:
• The M&A costs relate to due diligence and corporate finance activity.
• Restructuring costs relates to redundancies and other restructuring.
• The share based payments charge relates to the share option scheme (see note 25).
• 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 15.
• Unrealised operating foreign exchange losses relate to non-cash exchange losses made on operating items.
60
ANNUAL REPORT AND ACCOUNTS 2018Notes to the Consolidated Financial Statements 8. PARTICULARS OF EMPLOYEES
Employee benefit expense
From continuing operations
Wages and salaries
Social security costs
Pension costs
Share based payments charge (note 25)
Year ended 31
December 2018
Year ended 31
December 2017
Restated
£000s
90,218
5,200
1,208
5,679
102,305
£000s
71,321
5,058
893
5,323
82,595
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 admin
Researchers & Analysts
9. KEY MANAGEMENT COMPENSATION
Short-term employee benefits
Long-term employee benefits
Share based payments
Year ended 31
December 2018
Year ended 31
December 2017
No.
1,419
1,900
3,319
No.
1,238
1,166
2,404
Year ended 31
December 2018
Year ended 31
December 2017
£000s
2,812
76
1,113
4,001
£000s
2,139
57
946
3,142
Information regarding Directors’ remuneration, share options, bonuses and pension contributions are set out in the Directors’ Remuneration
Report on pages 34 to 35.
10. FINANCE INCOME AND COSTS
Bank interest charge
Loan interest
Other interest receivable
Year ended 31
December 2018
Year ended 31
December 2017
£000s
76
2,514
(103)
2,487
£000s
40
1,513
(109)
1,444
61
ANNUAL REPORT AND ACCOUNTS 2018Notes to the Consolidated Financial Statements
11. INCOME TAX
Income statement
Current income tax:
Current income tax
Adjustments in respect of prior years
Deferred income tax:
Excess of depreciation over capital allowances on property,
plant and equipment and intangible assets
Deferred tax on acquired intangibles
Deferred tax movement on losses
Change in corporate tax rate
Deferred tax on share based payments
Adjustments in respect of prior years
Total income tax charge in income statement
The tax charge is reconciled to the standard corporation tax rate applicable in the UK as follows:
Loss on ordinary activities before tax
Tax at the UK corporation tax rate of 19% (2017: 19.25%)
Effects of:
Adjustments in respect of prior years
Adjustments in respect of prior years – share based payments
Income not taxable
Timing differences for which deferred tax is not provided
Deferred tax movement on losses
Permanent difference on IFRS2 charge
Expenses not deductible for tax
Overseas tax not at standard rate
Change in corporation tax rate
12. EARNINGS PER SHARE
Year ended
31 December 2018
Year ended
31 December 2017
£000s
£000s
(4,379)
56
(4,323)
(281)
3,126
(1,878)
(214)
(107)
269
915
(3,408)
(3,124)
(698)
(3,822)
(93)
1,629
(176)
(1,274)
1,863
503
2,451
(1,371)
Year ended
31 December 2018
Year ended
31 December 2017
£000s
(7,664)
1,456
324
(1,031)
1,178
17
(2,624)
(139)
(1,711)
(664)
(214)
(3,408)
£000s
(795)
153
(195)
-
-
-
(70)
838
(506)
(317)
(1,274)
(1,371)
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:
62
ANNUAL REPORT AND ACCOUNTS 2018Notes to the Consolidated Financial Statements
Continuing operations
Basic
Loss for the period attributable to ordinary shareholders (£000s)
Less: non-controlling interest
Loss for the period attributable to ordinary shareholders of the parent company (£000s)
Weighted average number of shares (000s)
Basic loss per share (pence)
Diluted
Loss for the period attributable to ordinary shareholders (£000s)
Less: non-controlling interest
Loss for the period attributable to ordinary shareholders of the parent company (£000s)
Weighted average number of shares* (000s)
Diluted loss per share (pence)
Discontinued operations
Basic
(Loss)/ profit for the year attributable to ordinary shareholders of the parent company
(£000s)
Weighted average number of shares (000s)
Basic (loss)/ profit 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)/ profit per share (pence)
Total
Basic
Loss for the period attributable to ordinary shareholders (£000s)
Less: non-controlling interest
Loss for the period attributable to ordinary shareholders of the parent company (£000s)
Weighted average number of shares (000s)
Basic loss per share (pence)
Diluted
Loss for the period attributable to ordinary shareholders (£000s)
Less: non-controlling interest
Loss for the period attributable to ordinary shareholders of the parent company (£000s)
Weighted average number of shares* (000s)
Diluted loss per share (pence)
Year ended
31 December 2018
Year ended
31 December 2017
Restated
(11,072)
107
(11,179)
113,319
(9.87)
(11,072)
107
(11,179)
113,319
(9.87)
(1,255)
113,319
(1.11)
(1,255)
113,319
(1.11)
(12,327)
107
(12,434)
113,319
(10.97)
(12,327)
107
(12,434)
113,319
(10.97)
(2,166)
-
(2,166)
102,346
(2.12)
(2,166)
-
(2,166)
102,346
(2.12)
10
102,346
0.01
10
112,968
0.01
(2,156)
-
(2,156)
102,346
(2.11)
(2,156)
-
(2,156)
102,346
(2.11)
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 2018
31 December 2017
No’000s
113,319
10,809
124,128
No’000s
102,346
10,622
112,968
* Where the share options in issue are anti-dilutive in respect of the diluted loss per share calculation in 2018 and 2017, the options have
not been included in the calculation.
63
ANNUAL REPORT AND ACCOUNTS 2018Notes to the Consolidated Financial Statements
13. INTANGIBLE ASSETS
Cost
As at 1 January 2017
Additions: Business Combinations
Additions: Separately Acquired
Foreign currency retranslation
Disposals
As at 31 December 2017
Additions: Business Combinations
Additions: Separately Acquired
Fair value adjustment
Foreign currency retranslation
Disposals
As at 31 December 2018
Amortisation
As at 1 January 2017
Additions: Business Combinations
Charge for the year
Foreign currency retranslation
Disposals
As at 31 December 2017
Additions: Business Combinations
Charge for the year
Impairment of goodwill
Fair value adjustment
Foreign currency retranslation
Disposals
Software
Customer
relationships
Brands IP rights and
Database
Goodwill
Total
£000s
£000s
£000s
£000s
£000s
£000s
7,577
117
1,036
(47)
(1)
8,682
371
890
(177)
7
(48)
9,725
(5,716)
(73)
(1,118)
38
1
25,575
7,180
-
-
-
32,755
9,921
-
(65)
-
-
10,695
1,596
148
-
-
12,439
3,268
-
-
-
-
42,611
15,707
22,529
4,356
111,455
16,779
-
-
-
-
-
-
26,885
21,465
128,234
94,120
-
-
-
(1,287)
47,063
-
406
-
-
177,831
30,028
1,184
(47)
(1)
208,995
129,145
890
164
7
(1,335)
222,760
337,866
(13,559)
(2,597)
(13,093)
(9,360)
(44,325)
-
-
-
(3,097)
(1,290)
(8,583)
-
-
-
-
-
-
-
-
-
-
(73)
(14,088)
38
1
(6,868)
(16,656)
(3,887)
(21,676)
(9,360)
(58,447)
(199)
(1,115)
-
85
(14)
48
-
-
-
(4,197)
(4,280)
(11,343)
-
-
(2)
-
-
-
(6)
-
-
-
(4)
1,287
-
(652)
(535)
-
-
-
(199)
(21,587)
(535)
85
(26)
1,335
As at 31 December 2018
(8,063)
(20,855)
(8,173)
(31,736)
(10,547)
(79,374)
Net book value
As at 31 December 2018
As at 31 December 2017
1,662
1,814
21,756
16,099
7,534
8,552
15,327
5,209
212,213
118,874
258,492
150,548
Additions as a result of business combinations in the year have been disclosed in further detail in note 29.
The impairment charge of £535,000 related to discontinued operations. Further details of discontinued operations have been disclosed in
note 28.
As at 31 December 2018, the carrying value and remaining amortisation period of the Brand assets were as follows:
GlobalData
Verdict
MEED
Global Ad Source
64
Carrying Value
£000s
4,619
2,132
745
38
7,534
Remaining
Amortisation
Period
12 years
12 years
2 years
1 year
ANNUAL REPORT AND ACCOUNTS 2018Notes 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, Consumer, Construction, Energy and Financial Services.
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 2019 - 2023. A terminal value calculation has
been determined post 2023. The key assumptions are set out below:
Increase in revenue
(for years 1 to 5)
2018
3.00%*
2017
3.00%
Increase in costs
(for years 1 to 5)
2018
2.00%
2017
2.00%
* 7% for Construction and Energy
The value in use for each CGU is summarised below.
All values in the table are in £ million
Discount rate
Terminal growth rate
2018
9.69%
2017
8.70%
2018
2.00%
2017
2.00%
Consumer
Technology
Healthcare
Construction
Energy
Financial Services
Total
Goodwill
Other Intangible
assets
Value-in-use
Headroom
34.6
17.2
79.3
36.2
29.2
15.7
212.2
6.7
1.9
17.9
10.8
5.5
2.3
45.1
151.0
28.6
247.4
115.0
40.8
27.1
609.9
109.7
9.5
150.2
68.0
6.1
9.1
352.6
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
Technology
Healthcare
Construction
Energy
Financial Services
Revenue Growth
Falls To
Discount Rate
Rises To
(3.4%)
2.2%
(3.9%)
(0.5%)
5.7%
0.9%
29.1%
13.2%
21.3%
19.5%
10.9%
13.4%
No indication of impairment was noted from management’s review, there is headroom in each CGU. The sensitivity analysis supports the
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.
65
ANNUAL REPORT AND ACCOUNTS 2018Notes to the Consolidated Financial Statements
14. PROPERTY, PLANT AND EQUIPMENT
Fixtures, fittings &
equipment
Motor vehicles
Leasehold
Improvements
£000s
£000s
£000s
4,992
298
612
(51)
(116)
5,735
585
575
10
(1)
6,904
(3,820)
(231)
(805)
48
116
(4,692)
(491)
(703)
(17)
1
(5,902)
1,002
1,043
15
-
-
-
(15)
-
-
-
-
-
-
(15)
-
-
-
15
-
-
-
-
-
-
-
Cost
As at 1 January 2017
Additions: Business Combinations
Additions: Separately Acquired
Foreign currency retranslation
Disposals
As at 31 December 2017
Additions: Business Combinations
Additions: Separately Acquired
Foreign currency retranslation
Disposals
As at 31 December 2018
Depreciation
As at 1 January 2017
Additions: Business Combinations
Charge for the year
Foreign currency retranslation
Disposals
As at 31 December 2017
Additions: Business Combinations
Charge for the year
Foreign currency retranslation
Disposals
As at 31 December 2018
Net book value
As at 31 December 2018
As at 31 December 2017
15. DERIVATIVE ASSETS AND LIABILITIES
Short-term derivative assets
Short-term derivative liabilities
Net derivative (liability)/ asset
Total
£000s
5,241
359
612
(53)
(131)
6,028
588
724
14
(1)
7,353
(3,888)
(249)
(829)
50
131
(4,785)
(494)
(742)
(19)
1
234
61
-
(2)
-
293
3
149
4
-
449
(53)
(18)
(24)
2
-
(93)
(3)
(39)
(2)
-
(137)
(6,039)
312
200
1,314
1,243
31 December 2018
31 December 2017
£000s
529
(1,408)
(879)
£000s
369
(98)
271
Classification is based on when the derivatives mature. The fair values of derivatives are expected to impact the income statement over the
next year, dependant on movements in the fair value of the foreign exchange contracts. The movement in the year was a £1,150,000 charge
to the income statement (2017: credit of £1,266,000).
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 2019
66
Euro
€’000
4,664
US Dollar
$’000
20,953
Indian Rupee
INR’000
852,004
ANNUAL REPORT AND ACCOUNTS 2018Notes to the Consolidated Financial Statements
16. INVENTORIES
Raw materials
17. TRADE AND OTHER RECEIVABLES
Trade receivables
Prepayments
Other receivables and accrued income
Related party receivables (note 30)
31 December 2018
31 December 2017
£000s
£000s
-
-
6
6
31 December 2018
31 December 2017
Restated
£000s
43,594
3,329
3,563
838
51,324
£000s
34,950
3,527
3,017
927
42,421
The contractual value of trade receivables is £47.7 million (2017 Restated: £37.2 million). Their carrying value is assessed to be £43.6
million (2017 Restated: £35.0 million) after assessing recoverability. The contractual value and the carrying value of other receivables are
considered to be the same.
Amounts owed by related parties are repayable on demand and are non-interest bearing.
The ageing analysis of these trade receivables showing fully performing and past due but not impaired is as follows:
Not overdue
Not more than 3 months overdue
More than 3 months but not more than 1 year
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 2018
31 December 2017
Restated
£000s
33,021
5,718
4,855
43,594
£000s
27,137
5,028
2,785
34,950
31 December 2018
31 December 2017
£000s
7
-
4,106
4,113
£000s
13
4
2,228
2,245
The contractual amounts of the Group’s trade receivables are denominated in the following currencies:
Pounds Sterling
US Dollar
Euro
Australian Dollar
31 December 2018
31 December 2017
Restated
£000s
20,816
22,739
3,649
503
47,707
£000s
23,216
9,806
3,884
289
37,195
67
ANNUAL REPORT AND ACCOUNTS 2018Notes to the Consolidated Financial Statements 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 2018
31 December 2017
£000s
2,245
2,341
(473)
4,113
£000s
1,670
855
(280)
2,245
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. At each year
and half end, management will assess for further impairment based upon expected credit loss over and above the specific impairments
noted through the year.
The other classes within trade and other receivables do not contain impaired assets.
The maximum exposure to credit risk at 31 December 2018 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. Further details on credit risk have been disclosed within note 21.
18. DEFERRED INCOME TAX
31 December 2018
31 December 2017
Balance brought forward
Created upon acquisition of subsidiary
Credited to profit and loss account (continuing operations)
Prior year adjustment not impacting tax charge
Deferred tax recognised directly in reserves in relation to share based payments
Change in rate
Balance carried forward
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
£000s
1,933
(3,629)
1,129
(464)
1,383
(214)
138
(6,570)
127
4,263
2,318
138
£000s
(518)
-
3,725
-
-
(1,274)
1,933
(3,014)
187
2,966
1,794
1,933
Deferred tax asset
Deferred tax liability
Net position
31 December 2018
31 December 2017
£000s
6,709
(6,571)
138
£000s
4,947
(3,014)
1,933
As at 31 December 2018, the utilisation of the deferred tax asset relating to tax losses is dependent on future taxable profits of approximately
£13.6 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 2018 the Group has unrecognised potential deferred tax assets of £1.1 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 2018 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.
68
ANNUAL REPORT AND ACCOUNTS 2018Notes to the Consolidated Financial Statements
19. TRADE AND OTHER PAYABLES
Trade payables
Other taxation and social security
Invoiced forward revenue
Accruals
20. BORROWINGS
Current
Loans due within one year
Non-current
Long-term loans
31 December 2018
31 December 2017
Restated
£000s
8,809
1,747
67,160
14,944
92,660
£000s
6,780
1,422
52,293
9,042
69,537
31 December 2018
31 December 2017
£000s
£000s
6,000
6,000
64,341
39,955
Term loan and RCF
In April 2017, the Group refinanced its debt position. The 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 2018 was £19.5 million.
In addition to the term loan, the Group also has a revolving capital facility (RCF) of £70.0 million. As at 31 December 2018, the Group had a
total draw down against the RCF facilities of £51.6 million.
These 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 2.5% over the London Interbank Offered Rate.
Borrowings can be reconciled as follows:
Term loan
RCF
Capitalised fees, net of amortised amount
31 December 2018
31 December 2017
£000s
19,500
51,573
(732)
70,341
£000s
25,500
21,100
(645)
45,955
69
ANNUAL REPORT AND ACCOUNTS 2018Notes to the Consolidated Financial Statements 21. 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 2018
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
Trade payables
Short-term derivative liabilities
Short-term borrowings
Accruals
Non-current liabilities
Long-term borrowings
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 payables
Accruals
Non-current liabilities
Long-term borrowings
70
Fair value (through
profit or loss)
£000s
Loans and
receivables
£000s
Amortised cost
£000s
-
-
-
529
-
-
-
529
-
(1,408)
-
-
(1,408)
-
-
2,775
2,775
6,268
-
43,594
3,563
838
54,263
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(8,809)
-
(6,000)
(14,944)
(29,753)
(64,341)
(64,341)
Fair value (through
profit or loss)
£000s
Loans and
receivables
£000s
Amortised cost
£000s
-
-
-
369
-
-
-
369
-
(98)
-
-
(98)
-
-
3,700
3,700
2,952
-
34,950
3,017
927
41,846
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(6,000)
-
(6,780)
(9,042)
(21,822)
(39,955)
(39,955)
Total
£000s
2,775
2,775
6,268
529
43,594
3,563
838
54,792
(8,809)
(1,408)
(6,000)
(14,944)
(31,161)
(64,341)
(64,341)
Total
£000s
3,700
3,700
2,952
369
34,950
3,017
927
42,215
(6,000)
(98)
(6,780)
(9,042)
(21,920)
(39,955)
(39,955)
ANNUAL REPORT AND ACCOUNTS 2018Notes 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
£000s
£000s
£000s
One to
five years
£000s
Total
£000s
-
6,268
32
14,757
-
838
-
-
(3,866)
-
-
18,029
-
-
77
23,077
3,563
-
(2,061)
(664)
(4,943)
(14,944)
-
4,105
-
-
420
5,760
-
-
(6,185)
(744)
-
-
-
(749)
2,775
2,775
-
-
-
-
-
-
-
-
6,268
529
43,594
3,563
838
(8,246)
(1,408)
(8,809)
(14,944)
(71,734)
(68,959)
(71,734)
(47,574)
The long term borrowing’s contractual features are detailed in note 20 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 £9,369,000).
Reclassifications
There have been no reclassifications between financial instrument categories during the years ended 31 December 2018 and 31 December
2017.
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 2018. 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 2018, 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
Measurement technique
Main assumptions
Main inputs used
Derivative assets and liabilities
Present-value method
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
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.
71
ANNUAL REPORT AND ACCOUNTS 2018Notes to the Consolidated Financial Statements
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:
Total
£000s
6,765
(940)
26,891
(267)
32,449
Total
£000s
4,583
271
13,979
(191)
18,642
2017
£000s
(1,315)
(462)
(1,777)
31 December 2018
Exposures
Cash
Short and long-term derivative assets/
(liabilities)
Trade receivables
Trade accounts payable
Net exposure
31 December 2017
Exposures
Cash
Short and long-term derivative assets/
(liabilities)
Trade receivables
Trade accounts payable
Net exposure
USD
£000s
3,749
(1,278)
22,739
(114)
25,096
USD
£000s
2,389
225
9,806
(141)
12,279
EUR
£000s
690
(129)
3,649
1
4,211
EUR
£000s
427
(80)
3,884
(12)
4,219
Other
£000s
2,326
467
503
(154)
3,142
Other
£000s
1,767
126
289
(38)
2,144
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 2018 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
2018
£000s
2,788
468
3,256
2017
£000s
1,608
565
2,173
2018
£000s
(2,281)
(383)
(2,664)
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.
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:
100 basis point decrease
100 basis point increase
2018
£000s
2017
£000s
2018
£000s
2017
£000s
Impact on:
Net earnings before income tax
703
460
(703)
(460)
This analysis assumes all other variables remain constant.
72
ANNUAL REPORT AND ACCOUNTS 2018Notes to the Consolidated Financial Statements 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 2018, the Group has a revolving credit facility of £51.6 million and a £30.0 million term loan (of which £19.5 million is
outstanding as at 31 December 2018) outstanding. See note 20 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’s financial instruments
do not have significant concentration of risk with any related parties.
£57.6 million of the Group’s assets are subject to credit risk (31 December 2017: £45.9 million). The Group does not hold any collateral over
these amounts. See note 17 for further details of the Group’s receivables.
The Group operates a credit risk management process within the finance and credit control teams. The process starts prior to a contract
being entered into, whereby factors such as company size, location and payment history are taken into account before the contract is
signed. Following the commencement of contract, which are usually signed on a zero day payment policy unless other agreements are
reached, the credit control team will monitor debt in reference to the due date. When the credit control team start to assess that the debt is
becoming more of a credit risk (usually around 90 days after due date or sooner if escalated) it is then escalated to our internal debt recovery
team. At this point it the debt recovery team will review on a debt by debt basis taking into to consideration:
• The responses received back from the client
•
• The status of the transfer of services, such as delays and disputes
• A re-assessment of credit worthiness
Internal responses from the client service and account management team
The debt recovery team and credit manager will then decide whether an impairment is made, but the team will continue to pursue the debt
and also use means such as legal advice to further advance the process. Contract errors or delivery disputes, whereby we are either at fault
or a commercial decision to appease the client has been made, credit notes are issued.
Following the detailed line by line review of debts and potential impairment, an overall review will be made for the reasonableness of
provision for potential credit write off based upon the write off as a percentage of revenue which guides management as to the general
trend of credit write-off. The write-off history, including 2018, is shown as below
Revenue
Provision added for bad debt
% of revenue
2018
2017
2016
157,553
118,649
100,013
2,341
1.5%
855
0.7%
912
0.9%
2015
60,466
841
1.4%
2014
63,161
2,280
3.6%
2013
54,342
824
1.5%
Management have provided for all debts greater than 1 year, except for instances whereby there is sufficient reasonable grounds of recovery.
This will be assessed by the nature of the debts and communication between the Group and the clients involved.
Once the debt recovery team have explored all particular avenues of recovery, including legal advice and professional recovery services and
the debt is deemed completely unrecoverable, the amount is fully written off from the debt ledger and from within the provision.
At each year and half end, management will assess for further impairment based upon expected credit loss over and above the specific
impairments noted through the year.
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.
The Group’s financial instruments do not have significant concentration of risk with any related parties.
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 24 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.
73
ANNUAL REPORT AND ACCOUNTS 2018Notes to the Consolidated Financial Statements 22. PROVISIONS
The movement in the provisions is as follows:
At 1 January 2017
Increase in provision
Foreign exchange
Utilised
Release of unutilised provision
At 31 December 2017
Increase in provision
Foreign exchange
Utilised
Release of unutilised provision
At 31 December 2018
Current:
Non-current:
Onerous leases
Dilapidations
£000s
£000s
34
380
(3)
(344)
(4)
63
758
2
(582)
-
241
241
-
292
235
(18)
-
(59)
450
140
13
-
(43)
560
123
437
Other
£000s
1,261
153
-
(1,319)
(7)
88
-
-
-
(88)
-
-
-
Total
£000s
1,587
768
(21)
(1,663)
(70)
601
898
15
(582)
(131)
801
364
437
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. 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
The other provision relates to the Group’s obligations to pay commission to survey respondents.
74
ANNUAL REPORT AND ACCOUNTS 2018Notes to the Consolidated Financial Statements 23. OPERATING LEASE COMMITMENTS
As at 31 December 2018 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 2018
31 December 2017
£000s
£000s
5,560
14,718
21,406
41,684
3
-
3
3,985
8,526
17,243
29,754
24
16
40
The Group sub-lets certain areas of its property portfolio. As at 31 December 2018, 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
24. EQUITY
Share capital
Allotted, called up and fully paid:
Ordinary shares at 1 January (1/14th pence)
Issue of shares: Consideration
Research Views Limited
Ordinary shares c/f 31 December
(1/14th pence)
Deferred shares of £1.00 each
31 December 2018
31 December 2017
£000s
£000s
824
3,241
3,204
7,269
230
623
799
1,652
31 December 2018
31 December 2017
No’000
£000s
No’000
£000s
102,346
15,957
118,303
100
118,403
73
11
84
100
184
102,346
-
102,346
100
102,446
73
-
73
100
173
Share Buyback
As detailed in note 25, during the period the Group purchased an aggregate amount of 2,869,289 shares at a total market value of
£16,853,000. The purchased shares will be held in treasury for the purpose of satisfying the exercise of share options under the Company’s
Employee Share Option Plan.
75
ANNUAL REPORT AND ACCOUNTS 2018Notes 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 20) 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 2017 was 5.0p per share and was paid in April 2018. The total dividend for the current year was 11.0 pence per share,
with an interim dividend of 3.5 pence per share paid on 3 October 2018 to shareholders on the register at the close of business on 31 August
2018 and a final dividend of 7.5 pence per share will be paid on 26 April 2019 to shareholders on the register at the close of business on 22
March 2019. The ex-dividend date will be on 21 March 2019.
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. The premium on the shares issued in consideration for the purchase of Research Views Limited and its subsidiaries (note
29) of £97.3 million was recognised in the merger reserve in the period ending 30 June 2018.
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.
During the year, there is a reclassification of £1.4m, which debits the corporation tax charge in the year ended 31 December 2018 and credits
Retained Earnings within equity, in relation to deferred tax on share based payments. Further information is given in note 25.
76
ANNUAL REPORT AND ACCOUNTS 2018Notes to the Consolidated Financial Statements
25. 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
Fair Value
of Share Price
at Grant Date
Exercise Price
(Pence)
Estimated
Forfeiture
rate p.a.
Weighted Average
of Remaining
Contractual Life
(Years)
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
Award 18
Award 19
Award 20
Award 21
Award 22
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
20 March 2018
20 March 2018
23 October 2018
23 October 2018
23 October 2018
£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
£3.070
£3.070
£2.720
£2.720
£2.720
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
0.0714p
0.0714p
0.0714p
0.0714p
0.0714p
7.5%
10%
10%
0%
10%
10%
10%
10%
0%
10%
10%
20%
20%
20%
20%
20%
20%
20%
20%
0%
1.3
1.4
1.4
1.3
1.5
1.5
1.5
1.3
2.0
1.6
1.6
1.6
1.7
1.3
1.8
1.8
2.0
1,7
1.7
1.3
Awards 2 and 5 have been fully forfeited.
The estimated forfeiture rate assumption is based upon management’s expectation of the number of options that will lapse over the vesting
period. The assumptions were determined when the scheme was set up in 2011 and are reviewed annually. Management believe the current
assumptions to be reasonable based upon the rate of lapsed options.
The risk free interest rate and annualised volatility for awards granted in October 2018 were 1.2% and 17% respectively. The risk free interest
rate and annualised volatility for awards granted in March 2018 were 1.4% and 23% 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 £32 million, £41million and £52 million respectively (2017: £28 million and £39 million
respectively). The targets were revised during 2018 following the acquisition of Research Views Limited and MEED (2017: revised following
the acquisition of the Pharmsource and Infinata businesses).
77
ANNUAL REPORT AND ACCOUNTS 2018Notes to the Consolidated Financial Statements 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
Award 18
Award 19
Award 20
Award 21
Award 22
Group Achieves
£10m EBITDA
Group Achieves
£32m EBITDA
Group Achieves
£41m EBITDA
20% Vest
N/a
N/a
N/a
N/a
N/a
N/a
N/a
N/a
N/a
N/a
N/a
N/a
N/a
N/a
N/a
N/a
25% Vest
25% Vest
20% Vest
20% Vest
20% Vest
25% Vest
18% Vest
18% Vest
18% Vest
13% Vest
25% Vest
10% Vest
10% Vest
0% Vest
10% Vest
10% Vest
25% Vest
25% Vest
25% Vest
20% Vest
20% Vest
20% Vest
25% Vest
18% Vest
18% Vest
18% Vest
13% Vest
25% Vest
10% Vest
10% Vest
0% Vest
10% Vest
10% Vest
25% 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 2018 was £5,679,000 (2017: £5,323,000). The awards
of the scheme are settled with ordinary shares of the Company.
During the period the Group purchased an aggregate amount of 2,869,289 shares at a total market value of £16,853,000. 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 2017
Granted
Forfeited
31 December 2018
Option price (pence)
Number of options
1/14th
1/14th
1/14th
1/14th
10,621,857
1,428,400
(1,241,396)
10,808,861
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
31 December 2018
78
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
10,808,861
1/14th
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
1.4
ANNUAL REPORT AND ACCOUNTS 2018Notes to the Consolidated Financial Statements
During 2018 the Group identified that in years prior to 2017 the share based Payment charge in the Group profit and loss account had been
overstated by an aggregate £3.6m, as the charge had not been appropriately trued up each year for leavers. Because the annual charge
is reversed each year in the Retained profit reserve, there has been no annual or cumulative misstatement of the Groups net assets or
reserves. The error in 2017 was immaterial and accordingly the share based payment charge for that year has not been restated. The basis
of calculation of the charge has been corrected for 2018 and future years.
The impact of the above has meant that there is a reclassification of £1.4m, which debits the corporation tax charge in the year ended 31
December 2018 and credits Retained Earnings within equity, in relation to deferred tax on share based payments.
The Remuneration Committee received notification from the Audit Committee that the quality of Adjusted EBITDA in 2018 of £32.2 million
was sufficient to satisfy the first target of £32 million. The employees who have share options dependent on the meeting of the £32 million
target will therefore get the opportunity to vest their options following the publication of the results.
26. CAPITAL COMMITMENTS
There were no capital commitments at 31 December 2018 (2017: £nil).
27. RETIREMENT BENEFIT SCHEMES
As a result of the Research Views Limited acquisition, the Group has a final salary defined benefit pension scheme, the Progressive Media
Markets Limited Pension Scheme.
The scheme operates within the standard UK regulatory framework for employer-sponsored pension schemes. Funding rates are agreed
between the scheme’s trustees and the Company, based on a prudent assessment of the scheme liabilities. The scheme is no longer open
to future accrual, closing on 31 August 2017. The Trustees are required to carry out an actuarial valuation every three years. An actuarial
valuation was carried out for IAS 19 purposes as at 31 December 2018.
The Group’s contribution to the scheme since acquisition was £nil. As the scheme is now closed to future accrual, it is not expected that the
Group will contribute to the scheme over the accounting year to 31 December 2019.
The scheme is exposed to a number of risks and sensitivities, including:
•
•
• Longevity risk: changes in the estimation of mortality rates of current and former employees.
Investment risk: movement of discount rate used against the return from plan assets
Interest rate risk: decreases/increases in the discount rate used will increase/decrease the defined benefit obligation
Net interest income of £24,000 has been incurred on the assets of the scheme in the year with a past service cost of £51,000. The net
pension expense of £27,000 has not been recognised in the Income Statement of the Group on the basis that the corresponding gain of
£27,000 in the Other Comprehensive Income Statement has also not been recognised.
The Group is working with the Trustees to de-risk any future gains or losses by aligning the investment strategy to the nature of the
scheme’s liabilities.
Changes in the present value of defined benefit obligations are as follows:
Defined benefit obligation at acquisition
Interest expense on defined benefit obligation
Benefits paid
Past service cost
Re-measurement
Closing defined benefit obligation
31 December 2018
£000s
(5,287)
(130)
213
(51)
153
(5,102)
79
ANNUAL REPORT AND ACCOUNTS 2018Notes to the Consolidated Financial Statements Changes in the present value of defined benefit assets are as follows:
Fair value of plan assets at acquisition
Interest income on plan assets
Re-measurement
Benefits paid
Closing fair value of scheme assets
The closing assets represent £5,949,000 Gilts and £44,000 cash.
Defined benefit obligation
Fair value of plan assets
Net defined benefit asset
31 December 2018
£000s
6,262
154
(210)
(213)
5,993
31 December 2018
£000s
(5,102)
5,993
891
The asset had not been recognised on the Statement of Financial Position as the Group does not have an unconditional right to a refund.
The assumptions which have the most significant effect on the result of the IAS 19 valuation for the scheme are those relating to the
discount rate, the rates of increases in price inflation and pensions and life expectancy. The main assumptions adopted are:
Discount rate
RPI inflation rate
CPI inflation rate
Increases to pensions in deferment:
Non-GMP accrued before 6 April 2009
Non-GMP accrued on or after 6 April 2009
Increases to pensions in payment:
Pre 88 GMP
Post 88 GMP
Pre 97 Excess
Post 97
Life expectancy:
Male currently aged 65
Female currently aged 65
Male currently aged 45
Female currently aged 45
GMP: Guaranteed minimum pension
The sensitivities regarding the principal assumptions used to measure the scheme liabilities are:
31 December 2018
% pa
2.8%
3.6%
2.6%
2.6%
2.5%
Nil
3.0%
3.0%
3.0%
87
89
89
91
Change in assumption
Impact on scheme liabilities
0.5% decrease
Increase by £390,000
0.5% increase
0.5% increase
Increase by £90,000
Increase by 85,000
Assumption
Discount rate
Price inflation
Mortality rate
80
ANNUAL REPORT AND ACCOUNTS 2018Notes to the Consolidated Financial Statements 28. DISCONTINUED OPERATIONS
On 1 October 2018 the Group sold Dewberry Redpoint Limited, a wholly owned indirect subsidiary of GlobalData Plc. As part of our strategy
to become a world leading data and analytics provider, over the past 2-3 years, the Group has discontinued and disposed of several non-
core assets, which were mainly focused on lower margin print and web media that traditionally have a more transactional revenue base.
The disposal of Dewberry Redpoint Limited is a continuation of this strategy. The principal activity of Dewberry Redpoint Limited was the
publication of trade journals and the production and organisation of trade events and conferences.
The results of the discontinued operations are as follows;
Discontinued operations
Revenue
Cost of sales
Gross (loss)/ profit
Distribution costs
Administrative costs
(Loss)/ profit before tax from discontinued operations
Income tax
Loss/ profit for the year from discontinued operations
a)
(Loss)/ profit before tax
This is arrived at after charging:
Impairment
b)
Cash flows from discontinued operations
Cash outflows from operating activities
Total cash outflows from discontinued operations
Year ended 31
December 2018
Year ended 31
December 2017
£000s
£000s
1,933
(1,976)
(43)
-
(1,381)
(1,424)
169
(1,255)
3,029
(1,776)
1,253
(65)
(1,178)
10
-
10
Year ended 31
December 2018
Year ended 31
December 2017
£000s
535
£000s
-
Year ended 31
December2018
Year ended 31
December 2017
£000s
912
912
£000s
267
267
Dewberry Redpoint Limited was sold for consideration of £75,000, settled in cash amounts of £30,000 and deferred payment of £45,000.
The Group made a loss on disposal of £1.1 million.
29. ACQUISITIONS
Research Views Limited
On 28 March 2018, the Group took control of the entire share capital of Research Views Limited. Although the acquisition was subject to
shareholder vote at a general meeting on 24th April, HMRC had approved the commercial aspects of the transaction and Mike Danson
(68.6% majority shareholder at the time) had signed an irrevocable undertaking to vote in favour of the acquisition. Therefore, at this stage
the Group was certain the deal would be approved and started to integrate and manage the acquired business.
The transaction was effected by a share for share exchange, in which GlobalData Plc issued 15,957,447 shares to the shareholders of
Research Views Limited. Based on GlobalData’s share price of £6.10 on 28 March 2018 (the date of transfer of control), the acquisition value
was £97.3 million.
81
ANNUAL REPORT AND ACCOUNTS 2018Notes to the Consolidated Financial Statements The amounts recognised for each class of assets and liabilities at the acquisition date were as follows:
Intangible assets consisting of:
Brand
Customer relationships
Intellectual property and content
Net liabilities acquired consisting of:
Property, plant and equipment
Intangible assets
Cash and cash equivalents
Trade and other receivables
Trade and other payables
Corporation tax payable
Deferred tax
Fair value of net (liabilities)/ assets acquired
Attributable to:
Equity holders of the parent
Non-controlling interest
The goodwill recognised in relation to the acquisition is as follows:
Consideration
Less net assets acquired (equity holders of the parent)
Goodwill
Carrying Value
£000s
Fair Value
Adjustments
£000s
-
-
-
95
3,187
585
4,159
(25,454)
(161)
373
(17,216)
3,089
9,319
20,430
-
(3,028)
-
(151)
(261)
-
(4,821)
24,577
Fair Value
£000s
3,089
9,319
20,430
95
159
585
4,008
(25,715)
(161)
(4,448)
7,361
6,815
546
Fair Value
£000s
97,340
(6,815)
90,525
In line with the provision 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.
The goodwill that arose on the combination can be attributed to the assembled workforce, know-how and expertise. The intangible asset
valuations are provisional as at the interim reporting date.
The Group incurred legal and professional costs of £1.2 million in relation to the acquisition, which were recognised in other expenses. The
group additionally incurred £0.5 million of stamp duty payable upon the acquisition which was recognised within other expenses.
In the year ended 31 December 2017 the trade of Research Views Limited and its subsidiaries generated revenues of £26.0 million and
EBITDA of £2.7 million. The business has generated revenues of £19.9 million from the period from acquisition to 31 December 2018. If the
acquisition had occurred on 1 January 2018, the Group revenue for 2018 would have been £163.0 million and the Group loss before tax from
continuing operations would have been £5.0 million.
Research Views Limited and its subsidiaries were entities under common control at the time of acquisition, by virtue of being controlled by
Mike Danson. IFRS 3 scopes out combinations of entities under common control. The Group has therefore applied IAS 8 ‘Accounting Policies,
Changes in Accounting Estimates and Errors’ and used management judgement in developing and applying an accounting policy that
results in information which is reliable and relevant. Management have determined it is most appropriate to follow the principles of IFRS3,
and apply acquisition accounting for acquisitions of entities under common control.
Sportcal Global Communications Limited, an indirect subsidiary of Research Views Limited, has a minority shareholder owning 26% of the
shares of the Company. As such, the Group has allocated a portion of the acquisition date values to non-controlling interests and recognised
non-controlling interest in relation to the Company’s profit for the period. The Group took control of the remaining part of the share capital
on 24 December 2018 when the Minority Interest exercised a put option for us to acquire the remaining shares for £1.2 million. The exercise
notice was irrevocable and the Group had the obligation to purchase. As a result, the Group considered the acquisition of the remaining 24%
of share capital on 24 December 2018. The consideration was paid on 28 January 2019 and was when the share transfer legally took place.
82
ANNUAL REPORT AND ACCOUNTS 2018Notes to the Consolidated Financial Statements Other acquisitions
The Group also made three small acquisitions in the period for a total consideration of £4.4 million, on which goodwill of £2.8 million has
been recognised. The goodwill that arose on the combinations can be attributed to the assembled workforce, know-how and research
methodology which the Group is now utilising across all of our data and analytics products.
The Group incurred legal and professional costs of £112,000 in relation to the acquisitions, which were recognised in other expenses.
Cash Cost of Acquisitions
The cash cost of acquisitions comprises:
Acquisition of CHM Research Limited
Acquisition of Competenet
Acquisition of Research Views Limited:
Cash acquired as part of opening balance sheet
Acquisition of Global Ad Source
Acquisition of Ascential Jersey Holdings:
Cash consideration
Cash acquired as part of opening balance sheet
Acquisition of Infinata
30. RELATED PARTY TRANSACTIONS
Year ended 31
December 2018
Year ended31
December 2017
£000s
(1,499)
(869)
585
(2,037)
(787)
-
-
(4,607)
£000s
-
-
-
-
(13,158)
524
(7,704)
(20,338)
Mike Danson, GlobalData Plc’s Chief Executive, owns 68.6% of the Company’s ordinary shares as at 24 February 2019. 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 2018 was £2,551,900 (2017: £2,061,600).
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
2018 was £490,400 (2017: £874,600).
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 £4.5 million and repayable in 5 instalments, with the next instalment due in
January 2020 (following payment received in January 2019). Interest of 2.25% above LIBOR is charged on the loan, with £117,000 charged
in the year ended 31 December 2018 (2017: £112,000).
Directors and Key Management Personnel
The remuneration of Directors is discussed within the Directors’ Remuneration Report on pages 34 and 35. Remuneration of key management
personnel is detailed in note 9.
Acquisitions
As detailed in note 29, Research Views Limited and its subsidiaries were acquired during the period. The entities were under common
control at the time of acquisition, by virtue of being controlled by Mike Danson. Refer to note 29 for further details.
83
ANNUAL REPORT AND ACCOUNTS 2018Notes 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 2018
31 December 2017
£000s
2,775
2,775
£000s
3,700
3,700
31 December 2018
31 December 2017
£000s
925
925
£000s
925
925
31 December 2018
31 December 2017
£000s
-
-
(1)
-
(1)
£000s
(523)
94
71
360
2
The parent company’s balances with related parties are disclosed on pages 97 and 98 of the annual report. The Group has right of set off
over these amounts.
In addition, the Group has a related party relationship with 3KSC, a Company owned by a Director of a subsidiary of the Group. At 31
December 2018 the Group had a loan balance due to 3KSC of £86,000. The loan was repaid in January 2019 and the Director is no longer a
Director of the subsidiary Company.
31. SUBSEQUENT EVENTS
On 4 January 2019, the Group acquired the entire share capital of the Aroq Limited Group for cash consideration of £6.8 million. Aroq
provides global business information in the auto, drinks, food and style sectors. The business incurred legal expenses of £0.1 million which
will be recognised in the period ending 31 December 2019. In accordance with IFRS3.B66, management has not been able to estimate the
fair value of goodwill and intangible assets acquired as the acquisition occurred in close proximity of the year end. No revenues or profits
are included in the Group’s results for the year ended 31 December 2018. For the year ended 31 March 2018 the acquired Aroq business had
revenues of £2.9 million and profits before tax of £0.4 million.
84
ANNUAL REPORT AND ACCOUNTS 2018Notes to the Consolidated Financial Statements
Principal subsidiary undertakings
The Group has a large number of subsidiaries because of the companies inherited through M&A. The Group is currently going through
corporate simplification process and reducing the number of its subsidiaries and focussing operations through its main subsidiaries in its
main territories.
Subsidiary undertaking
Adfinitum Networks Inc*
Attentio Inc*
Country of registration
Holding
Canada
Ordinary shares
United States of America
Ordinary shares
Attentio Research Centre Private Limited*
India
Ordinary shares
Attentio Research Limited*
Canadean Limited
Canadean Mexico Y Centro America, F. De
R.L. De C.V*
England & Wales
Ordinary shares
England & Wales
Ordinary shares
%
100%
100%
100%
100%
100%
Principal activity
Data and analytics
Data and analytics
Data and analytics
Data and analytics
Data and analytics
Mexico
Ordinary shares
100%
Data and analytics
Current Analysis SAS*
Current Analysis, Inc*
France
Ordinary shares
United States of America
Ordinary shares
100%
100%
Data and analytics
Data and analytics
Digital Insights and Research Private
Limited*
India
Ordinary shares
100%
Data and analytics
Financial News Publishing Limited
England & Wales
Ordinary shares
GD Research Centre Private Limited*
GlobalData Australia Pty Limited
GlobalData Brasil, serviços e informações
empresariais Ltda.*
GlobalData Canada Inc*
GlobalData Holding Limited
GlobalData Japan KK*
GlobalData Pte Limited*
India
Ordinary shares
Australia
Ordinary shares
100%
100%
100%
Data and analytics
Data and analytics
Data and analytics
Brazil
Ordinary shares
100%
Data and analytics
Canada
Ordinary shares
England & Wales
Ordinary shares
Japan
Ordinary shares
Singapore
Ordinary shares
100%
100%
100%
100%
100%
100%
Data and analytics
Holding company
Data and analytics
Data and analytics
Data and analytics
Data and analytics
Global Data Publications, Inc*
United States of America
Ordinary shares
GlobalData UK Limited*
England & Wales
Ordinary shares
Internet Business Group Limited
England & Wales
Ordinary shares
100%
Performance advertising
Kable Business Intelligence Limited
England & Wales
Ordinary shares
MEED Media FZ LLC*
United Arab Emirates
Ordinary shares
Progressive Digital Media (Holdings) Limited
England & Wales
Ordinary shares
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
Progressive Digital Media Pvt Ltd
England & Wales
Ordinary shares
India
Ordinary shares
Progressive Media Group Limited*
England & Wales
Ordinary shares
Progressive Media International Middle East
FZ LLC*
United Arab Emirates
Ordinary shares
Progressive Media Korea Limited*
South Korea
Ordinary shares
Progressive Media Ventures Limited*
England & Wales
Ordinary shares
Progressive Ventures Limited*
England & Wales
Ordinary shares
Research Views Limited*
Sociable Data Limited*
Sportcal.com Limited*
GlobalData Singpore Pte Limited (formerly
VRL Publishing Singapore Pte Limited)*
England & Wales
Ordinary shares
England & Wales
Ordinary shares
England & Wales
Ordinary shares
Singapore
Ordinary shares
World Market Intelligence Inc*
United States of America
Ordinary shares
World Market Intelligence Limited*
England & Wales
Ordinary shares
World Market Intelligence Pty Limited*
Australia
Ordinary shares
*indirectly held
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Data and analytics
Data and analytics
Holding company
Holding company
Data and analytics
Data and analytics
Data and analytics
Data and analytics
Data and analytics
Data and analytics
Holding company
Holding company
Holding company
Data and analytics
Non-trading
Data and analytics
Data and analytics
Data and analytics
Data and analytics
85
ANNUAL REPORT AND ACCOUNTS 2018Notes to the Consolidated Financial Statements Company Statement of Financial Position
Notes
31 December
31 December
Non-current assets
Property, plant and equipment
Intangible assets
Investments
Current assets
Trade and other receivables
Short-term derivative assets
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
2018
£000s
873
933
175,121
176,927
169,574
-
169,574
346,501
(448)
(91,134)
(1,408)
-
(6,000)
(98,990)
(199)
(64,341)
(64,540)
(163,530)
2017
£000s
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)
182,971
110,499
184
200
(19,142)
7,174
163,810
30,745
182,971
173
200
(2,289)
7,174
66,481
38,760
110,499
These financial statements were approved by the board of directors on 24 February 2019 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: £4,584,000 (2017: loss of £2,983,000)
Company number: 0392531
86
ANNUAL REPORT AND ACCOUNTS 2018
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
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 2017
Loss for the year
Transactions with owners:
Dividends
Share buyback
Share based payments charge
Balance at 31 December 2017
Loss for the year
Transactions with owners:
Issue of share capital
Dividends
Share buyback
Share based payments charge
Balance at 31 December 2018
£000s
£000s
£000s
£000s
£000s
£000s
£000s
173
200
(960)
7,174
66,481
43,554
116,622
-
-
-
-
173
-
11
-
-
-
-
-
-
-
-
-
(1,329)
-
-
-
-
-
-
-
-
-
(2,983)
(2,983)
(7,134)
-
5,323
(7,134)
(1,329)
5,323
200
(2,289)
7,174
66,481
38,760
110,499
-
-
-
-
-
-
-
(16,853)
-
-
-
-
-
-
(4,584)
(4,584)
97,329
-
97,340
-
-
-
(9,110)
(9,110)
-
(16,853)
5,679
5,679
184
200
(19,142)
7,174
163,810
30,745
182,971
The accompanying notes form an integral part of this financial report.
87
ANNUAL REPORT AND ACCOUNTS 2018
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
Decrease/ (increase) in trade and other receivables
Increase/ (decrease) in trade and other payables
Cash used in operations
Interest received/ (paid)
Net cash generated from/ (used in) operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
Purchase of intangible assets
Net cash used in investing activities
Cash flows from financing activities
Proceeds from long-term borrowings
Loan fees
Settlement of long-term borrowings
Repayment of short-term borrowings
Share Buyback
Dividends paid
Net inflow/ (outflow) from inter-company loans
Net cash generated from financing activities
Net increase/ (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.
Year ended 31
December 2018
Year ended 31
December 2017
£000s
£000s
(4,584)
(2,983)
455
807
(1,055)
-
(12)
1,553
141
2,163
(532)
1,368
836
(534)
(573)
(1,107)
30,473
(285)
(8,408)
(6,000)
(16,853)
(9,110)
13,020
2,837
2,566
(3,014)
(448)
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)
88
ANNUAL REPORT AND ACCOUNTS 2018
1. GENERAL INFORMATION
Nature of operations
The principal activity of GlobalData Plc is as a holding company of subsidiary entities which are engaged in providing business information
in the form of high quality proprietary data and analytics to clients in multiple sectors.
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.
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 2018 is £4.6 million (year ended 31 December 2017: loss £3.0 million).
89
ANNUAL REPORT AND ACCOUNTS 2018Notes to the Company Financial Statements 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
2018. The company accounts are unaffected by the impact of IFRS 15 as it does not have revenue contract obligations. The company was
impacted by the introduction of IFRS 9.
IFRS9: Financial Instruments
On 1 January 2018, IFRS9 ‘Financial Instruments’ also came into effect. The new standard is based on the concept that financial assets
should be classified and measured at fair value, with changes in fair value recognized in profit and loss as they arise (“FVPL”), unless
restrictive criteria are met for classifying and measuring the asset at either Amortized 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 period end are also posted to the
income statement.
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.
90
ANNUAL REPORT AND ACCOUNTS 2018Notes 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 Statement of Financial Position 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, 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.
Cash comprises cash balances and highly liquid call deposits. Bank overdrafts that form an integral part of the Company’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.
91
ANNUAL REPORT AND ACCOUNTS 2018Notes to the Company Financial Statements 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.
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 2017 was 5.0p per share and was paid in April 2018. The total dividend for the current year was 11.0 pence per share,
with an interim dividend of 3.5 pence per share paid on 3 October 2018 to shareholders on the register at the close of business on 31 August
2018 and a final dividend of 7.5 pence per share will be paid on 26 April 2019 to shareholders on the register at the close of business on 22
March 2019. The ex-dividend date will be on 21 March 2019.
4. INTANGIBLE ASSETS
Computer software
Cost
As at 1 January 2017
Additions
As at 31 December 2017
Additions
As at 31 December 2018
Amortisation
As at 1 January 2017
Charge for the year
As at 31 December 2017
Charge for the year
As at 31 December 2018
Net book value
As at 31 December 2018
As at 31 December 2017
92
£000s
3,682
398
4,080
573
4,653
(2,140)
(884)
(3,024)
(758)
(3,782)
871
1,056
Brand
£000s
-
148
148
-
148
-
(37)
(37)
(49)
(86)
62
111
Total
£000s
3,682
546
4,228
573
4,801
(2,140)
(921)
(3,061)
(807)
(3,868)
933
1,167
ANNUAL REPORT AND ACCOUNTS 2018Notes to the Company Financial Statements
5. PROPERTY, PLANT AND EQUIPMENT
Cost
As at 1 January 2017
Additions
As at 31 December 2017
Additions
As at 31 December 2018
Depreciation
As at 1 January 2017
Charge for the year
As at 31 December 2017
Charge for the year
As at 31 December 2018
Net book value
As at 31 December 2018
As at 31 December 2017
6. INVESTMENTS
Cost
As at 1 January 2017
Share based payments to employees of subsidiaries
As at 31 December 2017
Share based payments to employees of subsidiaries
As at 31 December 2018
Impairment
As at 31 December 2017 and 2018
Net book value
As at 31 December 2018
As at 31 December 2017
Leasehold
improvements
£000s
Computer
equipment
£000s
225
-
225
114
339
(44)
(23)
(67)
(28)
(95)
244
158
2,891
310
3,201
420
3,621
(2,024)
(541)
(2,565)
(427)
(2,992)
629
636
Total
£000s
3,116
310
3,426
534
3,960
(2,068)
(564)
(2,632)
(455)
(3,087)
873
794
Group undertakings
£000s
174,396
5,323
179,719
5,679
185,398
(10,277)
175,121
169,442
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.
93
ANNUAL REPORT AND ACCOUNTS 2018Notes 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)/ asset
31 December 2018
31 December 2017
£000s
£000s
1,966
1,031
166,227
-
350
169,574
1,616
94
38,004
1,235
545
41,494
31 December 2018
31 December 2017
£000s
-
(1,408)
(1,408)
£000s
241
(96)
145
Classification is based on when the derivatives mature. The fair values of derivatives are expected to impact the income statement over the
next year, dependant on movements in the fair value of the foreign exchange contracts. The movement in the year was a cost of £1,553,000
(2016: credit of £1,180,000).
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 2019
9. TRADE AND OTHER PAYABLES
Trade payables
Other payables
Accruals
Amounts owed to group undertakings
Amounts owed to related parties
Euro
€’000
4,664
US Dollar
$’000
20,953
31 December 2018
31 December 2017
£000s
723
143
3,301
86,967
-
91,134
£000s
174
11
648
51,472
1,058
53,363
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.
10. PROVISIONS
At 1 January 2018
Increase in provision
Release of unutilised provision
At 31 December 2018
Current:
Non-current:
94
Dilapidations
£000s
211
13
(25)
199
-
199
ANNUAL REPORT AND ACCOUNTS 2018Notes to the Company Financial Statements
11. BORROWINGS
Current
Loans due within one year
Non-current
Long-term loans
31 December 2018
31 December 2017
£000s
£000s
6,000
64,341
6,000
39,955
Term loan and RCF
In April 2017, the Group refinanced its debt position. The 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 2018 was £19.5 million.
In addition to the term loan, the Group also has a revolving capital facility (RCF) of £70.0 million. As at 31 December 2018, the Group had a
total draw down against the RCF facilities of £51.6 million.
These 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 2.5% over the London Interbank Offered Rate.
12. FINANCIAL ASSETS AND LIABILITIES
The Company’s financial instruments are classified under IFRS as follows:
Fair Value (through
profit or loss)
£000s
Loans and
receivables
£000s
Amortised cost
£000s
31 December 2018
Current assets
Other receivables
Amounts owed by group undertakings
Current liabilities
Bank overdraft
Short-term derivative liabilities
Trade accounts payable
Other payables
Accruals
Amounts owed to group undertakings
Short-term borrowings
Non-current liabilities
Long-term borrowings
-
-
-
(1,408)
-
-
-
-
-
(1,408)
-
-
1,031
166,227
167,258
-
-
-
-
-
-
-
-
-
-
-
-
(448)
-
(723)
(143)
(3,301)
(86,967)
(6,000)
(97,582)
(64,341)
(64,341)
Total
£000s
1,031
166,227
167,258
(448)
(1,408)
(723)
(143)
(3,301)
(86,967)
(6,000)
(98,990)
(64,341)
(64,341)
95
ANNUAL REPORT AND ACCOUNTS 2018Notes to the Company Financial Statements 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
Maturity analysis
Current assets
Other receivables
Amounts owed by group undertakings
Current liabilities
Bank overdraft
Short-term derivative liabilities
Trade accounts payable
Other payables
Accruals
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
-
-
-
-
-
-
-
-
-
-
-
Less than one
month
One to three
months
Three months
to one year
£000s
£000s
£000s
-
-
-
(664)
(267)
(143)
(3,301)
(2,061)
1,031
-
(744)
(336)
-
-
(6,185)
-
-
(448)
-
(120)
-
-
-
-
(568)
-
-
-
-
-
(3,014)
-
(174)
(11)
(648)
(51,472)
(1,058)
(6,000)
(62,377)
(39,955)
(39,955)
One to
five years
£000s
-
79,260
-
-
-
-
-
-
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)
Total
£000s
1,031
79,260
(448)
(1,408)
(723)
(143)
(3,301)
(8,246)
-
(6,436)
-
(6,234)
(71,734)
7,526
(71,734)
(5,712)
The long-term borrowing’s contractual features are detailed in note 20 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 £9,369,000).
Reclassifications
There have been no reclassifications between financial instrument categories during the year ended 31 December 2018 and year ended 31
December 2017.
Please refer to note 21 of the Group accounts on financial assets and liabilities for the Group’s exposure to risk.
96
ANNUAL REPORT AND ACCOUNTS 2018Notes to the Company Financial Statements
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.
£80.3 million of the Company’s assets are subject to credit risk (31 December 2017: £39.6 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.
13. RELATED PARTY TRANSACTIONS
Directors
The remuneration of the Directors of the Group and Company is set out on page 35 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
2018 was £490,400 (2017: £874,600).
Amounts outstanding to and from group undertakings
The amounts outstanding from group undertakings were:
31 December 2018
31 December 2017
£000s
£000s
Amounts owed by group undertakings:
Progressive Capital Limited
GlobalData UK Limited
Progressive Digital Media Limited
Progressive Digital Media (Holdings) Limited
Current Analysis Inc
Current Intelligence & Analysis Limited
Dewberry Redpoint Limited
SPG Media Group Limited
GlobalData Japan KK
GlobalData Pte Limited
GlobalData Australia Pty Limited
GlobalData Brasil, serviços e informações empresariais Ltda.
Canadean Mexico Y Centro America, F. De R.L. De C.V
GlobalData Canada Ltd
Progressive Media International Middle East FZ LLC
Progressive Media Ventures Limited
Attentio Research Limited
TMN Media Ltd
GlobalData Singapore Pte Limited (formerly VRL Publishing Singapore Pte Ltd)
World Market Intelligence Pty Limited
World Market Intelligence Limited
Research Views Limited
9,989
128,993
-
981
4,141
2,223
-
246
-
1,177
1,034
322
357
663
628
7,854
2,671
1,495
2,135
321
814
183
9,989
16,072
3,270
4,170
555
2,225
500
246
69
175
733
-
-
-
-
-
-
-
-
-
-
-
166,227
38,004
97
ANNUAL REPORT AND ACCOUNTS 2018Notes to the Company Financial Statements
31 December 2018
31 December 2017
£000s
£000s
(5,270)
(59,757)
(24)
(2,006)
(2,263)
-
-
-
(5,182)
(2,243)
(1,692)
(70)
(347)
(1,463)
(456)
(1,831)
(878)
(1,656)
(704)
(864)
(201)
(26)
(34)
(2,213)
(40,983)
(24)
(456)
(2,263)
(357)
(466)
(847)
(914)
(1,447)
(1,502)
-
-
-
-
-
-
-
-
-
-
-
-
(86,967)
(51,472)
31 December 2018
31 December 2017
£000s
£000s
-
-
-
-
-
-
297
938
1,235
(149)
(909)
(1,058)
Amounts owed to group undertakings:
Internet Business Group Limited
Progressive Media Group Limited
Verdict Media Limited (formerly Kable Intelligence Limited)
Kable Business Intelligence Limited
Cornhill Publications 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
CHM Research Ltd
Canadean Limited
Current Analysis Inc
GlobalData Japan KK
Financial News Publishing Limited
ICD Research Limited
MEED Media FZ LLC
Progressive Media UK Limited
Sociable Data Limited
Sportcal Global Communications Limited
World Market Intelligence Inc
Attentio Inc
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)
Research Views Group (and subsidiaries)
98
ANNUAL REPORT AND ACCOUNTS 2018Notes to the Company Financial Statements 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
ReedSmith
20 Primrose Street
London, England
EC2A 2RS
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
ANNUAL REPORT AND ACCOUNTS 2018
99
Head Office and Registered Office
John Carpenter House
John Carpenter Street
London
EC4Y 0AN
Tel: + 44 (0) 20 7936 6400
100
ANNUAL REPORT AND ACCOUNTS 2016Chief Executive’s ReportStrategic Report