GlobalData Plc
Annual
report and
accounts
For the year ended 31 December 2019
COMPANY NO. 03925319
W
Contents
STRATEGIC REPORT
2019 Highlights
Our Business
Principal Activity
Our Business Model
Chairman’s Statement
Chief Executive’s Report
Chief Financial Officer’s Report
Principal and Emerging Risks and Uncertainties
Going Concern and Viability
DIRECTORS’ REPORT
The Directors
Corporate Governance Report
Directors’ Section 172(1) Statement
Environmental, Social and Governance
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 Comprehensive Income
Company Statement of Changes in Equity
Company Statement of Cash Flows
Notes to the Company Financial Statements
Advisers
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121
Reliance on this document
Our Business Review on pages 5 to 19 has been prepared in accordance with the Strategic Report requirements of section 414C of the
Companies Act 2006. The intention of this document is to provide information to shareholders and is not designed to be relied upon by any
other party or for any other purpose.
Forward-looking statements
This document contains forward-looking statements which are made by the Directors in good faith based on information available to them
at the time of approval of this report. In particular, all statements that express forecasts, expectations and projections with respect to
future matters, including trends in results of operations, margins, growth rates, overall market trends, the impact of interest or exchange
rates, the availability of financing, anticipated costs savings and synergies and the execution of GlobalData Plc’s strategy, are forward-
looking statements. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend
on circumstances that will occur in the future. There are a number of factors which could cause actual results and developments to differ
materially from those expressed or implied by these forward-looking statements, including a number of factors outside of GlobalData
Plc’s control. Any forward-looking statements speak only as of the date they are made, and GlobalData Plc gives no undertaking to
update forward-looking statements to reflect any changes in its expectations with regard thereto or any changes to events, conditions or
circumstances on which any such statement is based.
3
ANNUAL REPORT AND ACCOUNTS 2019
“GlobalData provides high
quality proprietary data,
analytics, and insights that
help support over 4,000
clients make better decisions
and decode the future.”
Bernard Cragg, Chairman
2019 Highlights
Group revenue
increased by
13% to £178.2m
(2018: £157.6m)
.
m
2
8
7
1
£
.
m
6
7
5
1
£
Operational Highlights
• Completed transition to centralised operating model and
single platform
• Major product upgrade; enhanced user-experience,
functionality, and site performance
• Launches of new, productised data, analytics, and insights
• Significant investment in upgrading core infrastructure and
business technologies
Financial Highlights
• Group revenue increased by 13% to £178.2m (2018: £157.6m)
• Organic revenue growth of 7%
• Adjusted EBITDA(1) increased by 38% to £44.6m (2018:
£32.2m)
• Improved Adjusted EBITDA margin (1) of 25%, achieved ahead
of schedule (2018: 20%)
• Cash generated from operations of £52.4m (2018: £25.1m),
117% of Adjusted EBITDA
• Invoiced forward revenues(3) increased by 5% to £85.1m
(2018: £81.4m)
• Statutory profit before tax of £10.2m (2018: loss £7.7m)
• Final dividend of 10.0 pence per share (2018: 7.5 pence);
total dividend of 15.0 pence per share, up 36% from the
previous year (2018: 11.0 pence)
• Net debt(2) of £55.3m (2018: £64.1m)
• Net total assets of £151.4m (2018: £150.4m)
2019
2018
Note 1: Adjusted EBITDA: Earnings before interest, tax, depreciation and amortisation, adjusted for costs associated with acquisitions, restructuring of the
Group, share based payments, impairment, unrealised operating exchange rate movements, impact of foreign exchange contracts and the impact of IFRS16
(Leases). 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 statement of financial position date, which
relate to future revenue to be recognised over the course of the following 12 months.
5
ANNUAL REPORT AND ACCOUNTS 2019Strategic Report “During 2019, we also
accelerated our investment
into new data science
technologies such as
artificial intelligence and
machine learning, and have
started to successfully
embed these capabilities
across our data and
research operations.”
Mike Danson, Chief Executive Officer
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, analytics,
and insights to clients across multiple sectors.
The Group provides high-value proprietary data, analytics, and
insights across a breadth of industry markets and functions, on a
global scale. We have a clear philosophy of owning our own data and
intellectual property, and seek to be a long-term, strategic partner
to our clients, by serving their critical activities with a differentiated,
“gold standard” offering.
We have completed our transition to a centralised operating model
and single platform, which will drive operational efficiencies, as well
as enabling greater product scalability and future development
opportunities.
The fundamental principle of our business model is to provide our
clients subscription access to our proprietary data, analytics, and
insights platform, with the offering of ancillary services such as
consulting, single copy reports, and events.
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 2019Strategic Report “In 2020, our core focus
will be on Sales Excellence
and the implementation of
best-in-class technologies
across our business to
improve Client Centricity
and Operational Agility.”
Mike Danson, Chief Executive Officer
Chairman’s Statement
We continue to make impressive strides forward on our strategic
priorities whilst delivering strong financial results. Our strong
business model demonstrates the characteristics that define best
in-class Information Services companies.
It has been a particularly transformational year for us. During 2019,
we successfully shifted to a centralised operating model and single
product platform. From a product perspective, this has involved
the integration of over 150 data assets from across our industry
verticals, into a unified software platform, which is underpinned
by a common taxonomy, shared development resource, and new
data science technologies. Ultimately, this allows us to manage our
data operations in a far more efficient and scalable way, accelerate
our new product development, and create a richer, more powerful
proposition for our clients. Not only have I been impressed by
the quality and the speed at which we can bring new products
and features to market, but I am excited to see this culture of
innovation and product excellence drive the business forward in
the coming years.
Our revenue growth of 13% delivered earnings growth of 38% at
an Adjusted EBITDA level, demonstrating the significant operating
leverage opportunity and combined with our strong cash generation,
we have proposed an increase in the total dividend for the year of
36% to 15.0 pence. The significant incremental margins and strong
operating cash flows demonstrate the strong fundamentals of our
business model. The Group’s forward invoiced revenue grew year on
year by 5%, which was below the underlying revenue growth of 7%
for the year reflecting a slight slowdown on sales orders in the latter
quarter of 2019. During the second half of the year we restructured
some of our sales operations in Europe, which resulted in a reduced
sales headcount. We also developed a comprehensive Growth
Optimisation Plan, which underpins our 5-year plan and will deliver
a range of initiatives across our strategic priorities. Our immediate
focus is on Sales Excellence, which includes our aim to increase our
sales headcount.
Our Business
GlobalData provides high quality proprietary data, analytics, and
insights that help support over 4,000 clients make better decisions
and decode the future. The visible and recurring revenue base
creates a resilient business model, with subscriptions making up
over 75% of revenue. GlobalData’s solutions form a critical and
embedded resource in our clients’ workflows, leading to robust
retention of clients.
GlobalData’s client base is globally diversified, which reflects
globally relevant data assets and gives the Group significant
market opportunity.
The Group benefits from significant operating leverage due to a
consistent fixed cost and low variable cost model that generates
long-term margin expansion in an accelerating revenue growth
environment. The operating leverage drives high incremental
EBITDA margins of 75-85%+.
The Group operates a low capital intensity model, with product
development and enhancements built into its operating costs.
Typically, businesses in this sector spend ~5% of revenue on capex,
whereas GlobalData’s spend for 2019 was 1.5% (2018: 1%). This
coupled with operating cash flows in excess of 100% of Adjusted
EBITDA, means that the business is very cash generative.
In summary the Group’s recurring revenues, strong operating
leverage, high cash generation and capital light business model
create a robust free cash flow profile that provides opportunities for
acquisitions and dividend growth for shareholders.
Looking Forward
We are an ambitious and highly innovative business and consistent
in our objectives. We provide our clients with world-class products
and client service, with an ambition to exceed their expectations at
every interaction. For our shareholders we aim to provide returns
which reflect our reported earnings and long-term prospects.
I am also pleased to announce that we have appointed J.P.
Morgan Cazenove as joint corporate broker with immediate effect.
Additionally, we are recommending that Deloitte LLP are appointed
as auditors of the Group and its subsidiaries for the year ending 31
December 2020. We believe that the appointment of best-in-class
advisors aligns with our strategic objectives and ambitions.
9
ANNUAL REPORT AND ACCOUNTS 2019Strategic Report Chairman’s Statement
Our Employees
We aim to be an employer of choice providing an enriching and
rewarding environment to work in. In another significant year of
progress and challenge, our employees have once again been key
to our development. The quality, talent and commitment of our
colleagues around the world makes GlobalData an exciting and
dynamic work environment.
I am pleased these results have been confirmed by the Audit and
Remuneration Committees to fulfil the performance condition for
the exercise of 1.8 million employee share options.
Dividend
Having regard to the performance, cash generation and future
prospects, the Board is pleased to announce a final dividend of
10.0 pence per share (2018: 7.5 pence). The proposed final dividend
will be paid on 24 April 2020 to shareholders on the register at the
close of business on 27 March 2020. The ex-dividend date will be
on 26 March 2020. The proposed final dividend increases the total
dividend for the year to 15.0 pence per share (2018: 11.0 pence), an
increase of 36%.
Board Changes
I am pleased to confirm that our current CFO, Graham Lilley, has
committed to the business long-term and will continue in this role
permanently. Graham’s experience and strong understanding of our
business and business model will be a real asset to the company as
we move forward.
Current Trading and Outlook
We enter 2020 with the strong fundamentals of our business
model, including enhanced revenue visibility, strong margins and
cash conversion. The global political and economic environment,
including Coronavirus, continues to be uncertain, however
we remain confident in our business model and our ability to
execute well.
Bernard Cragg
Chairman
2 March 2020
11
ANNUAL REPORT AND ACCOUNTS 2019Strategic Report Our Business
GlobalData’s mission is to help our clients decode the future
to become more successful and innovative, by providing
high value data, analytics, and insights. The solutions that
we provide are highly proprietary and embedded into our
customers’ workflows, which drives high customer retention.
The Group benefits from significant operating leverage due
to a “build once, sell multiple times” business model, which
drives significant margin expansion, as demonstrable in the
2019 results.
A snapshot of our Group
16
industry
sector deep
coverage
+ 4,000
clients
3,355
employees
31 December 2019
Digital
community of
28.5 million
people
Increased
software, data
science and
automation
developers by
215%
since 2016
12
ANNUAL REPORT AND ACCOUNTS 2019Strategic Report •
•
•
•
An upgraded technology and digital disruption product, with
cross-industry data, analytics, and insights
A global patents database
A new Direct Data Services offering, enabling API and Feed-
based data consumption
An enhanced elastic, semantic search capability integrated
across our data portfolio
Alongside the new data and technology that we have invested in,
we are aware that our deep industry-specific data and insights
is the core foundation of our value proposition for many clients.
As such, we continue to strive for excellence in the quality and
uniqueness of these capabilities, which is evidenced by our renewal
rates remaining strong.
As we turn our attention to our go-to-market activities, we are
excited by the opportunity we now have to drive additional value
in our existing loyal customer base and reach significantly more
customers and new users. Today, our customer base remains
predominately within the industry sectors in which we operate, but
we recognise that the breadth and depth of our industry coverage
is a compelling proposition for organisations that require timely
intelligence on multiple industries. Therefore, we have restructured
some of our sales organisations to better suit the selling of our
products into audiences like financial institutions and management
consultancies (“Professional Services”), with the objective of
addressing the potential for sales in this area.
Whilst it is clear that 2019 has been a busy year and our primary
focus has been on transforming our operating model and product
organisation to align with our growth strategy, we have also
successfully delivered a strong set of financial results.
Strategic Report
Chief Executive’s Report
KEY ACHIEVEMENTS
•
•
•
•
Revenues of £178.2m: Group revenue has grown by 13%, with
underlying organic revenue growth of 7%.
Adjusted EBITDA margin improved to 25% (2018: 20%): The
margin improvement is a result of our model being able to
deliver revenue growth off a relatively fixed cost base. We have
achieved our stated medium term 25% margin target ahead of
schedule and it is a strong indication that the model is working
and at the point of inflection.
Adjusted operating cash flow increased to £52.3m (2018:
£30.5m): Adjusted operating cash flow represented 117% of
Adjusted EBITDA.
Profit before tax for the year was £10.2m (2018: loss £7.7m):
Strong revenues and operating fundamentals brought the
Group into statutory profit.
TRADING REVIEW
Over the past year we have continued to deliver against all of
our four strategic priorities, albeit with world-class product our
principal focus. Our teams have worked tirelessly to transform our
proposition and product capabilities and the significant work that
has been completed means that we are well positioned as we enter
2020. We have delivered a strong set of financial results for 2019,
finishing ahead of market expectations.
In particular, our shift to a centralised operating model and
single product platform, with shared development resources,
has been a major achievement. The complexity associated with
integrating over 150 data assets from across our industry verticals
into a common taxonomy and unified software platform cannot
be underestimated. Successfully delivering this – whilst releasing
is testament to the quality of the
major new
people, processes, and
technology we have across our
product organisation.
launches –
As we look forward, the unique opportunities our integrated
platform affords us will be central to our strategy and growth plans.
This model will allow us to manage our data operations in a far more
efficient and scalable way, accelerate new product development
activities, and create a richer, more powerful proposition for our
clients and users.
During 2019, we also accelerated our investment into new data
science technologies such as artificial intelligence and machine
learning, and have started to successfully embed these capabilities
across our data and research operations. These technologies will
enhance the quality, timeliness, and value of the data and insights
we provide to our clients, and underpin the next phase of our
product development as we search for new ways to help our clients
make faster, more informed decisions. We have already started
to see the impressive benefits that our single product platform
and new technologies provide, with the following major releases
delivered in 2019:
ANNUAL REPORT AND ACCOUNTS 2019
13
Strategic Report
Chief Executive’s Report
KEY PERFORMANCE INDICATORS
The key performance indicators selected are used by the Executive Directors to monitor the Group’s performance and progress.
2019
2018
% growth
Revenue
Adjusted EBITDA
£178.2m
£157.6m
13%
£44.6m
£32.2m
38%
Adjusted EBITDA
margin
25%
20.5%
5p.p
Net Debt
£55.3m
£64.1m
(14%)
We have continued to make progress against our KPIs. Revenue,
driven by organic growth (7%) and the benefit of acquisitions, has
grown by 13% in the year. Due to our relatively fixed cost base, a high
flow through of profit has flowed through to Adjusted EBITDA and
increased our margin. We now increased our medium-term Adjusted
EBITDA margin target to 35%. Our strong operating cash flow has
meant that we have reduced our net debt, whilst maintaining a
progressive dividend policy and M&A activity.
OUR STRATEGIC PRIORITIES
We have achieved a significant amount since 2016, and have created
a unique, scalable business, with a world class product offering. As
we enter the next phase of our journey, we believe we are well-
positioned to benefit from strong and sustained demand across our
end-markets for trusted data, actionable analytics, and forward-
looking insights. To realise this opportunity, we recently developed a
comprehensive Growth Optimisation Plan, which will deliver a range
of key initiatives across our strategic priorities to grow both our top
and bottom line.
In 2020, our core focus will be on Sales Excellence and the
implementation of best-in-class technologies across our business
to improve Client Centricity and Operational Agility.
World Class Products
Enabling our clients to unlock the full value of our recent product
development activities is a key objective in 2020, and supports our
commitment to creating a “must have” capability integral to the
daily
involve continued
enhancements to the performance and usability of our core
platform, and the development of new, high-value features
designed for specific Job Roles and use-cases.
lives of our users. This will
initially
Beyond this, we will continue to explore new opportunities to further
utilise our advanced data science technologies to drive greater
automation across our research operations, and create higher-
value insights from the use of predictive and prescriptive analytics
models. We already have a clear pipeline of new, 2020 product
illustrate our commitment to successfully
launches, which
innovating at speed and scale.
Sales Excellence
As our attention shifts towards sales execution, our starting point is
establishing the right sales capacity and coverage model, to ensure
we have the right number of sales staff, in the right areas. As a
global company, we are assessing where to increase our sales
operations in line with the market opportunity across both regions
and industry segments.
Beyond having the right capacity and coverage model, we are
also aligning the skill-sets within our salesforce to the demands
of our different target audiences. To do this, we are in the early
stages of
implementing an “audience-first” approach which
consists of establishing sales teams that have specialist expertise
in a particular client segment. We believe this will deliver greater
productivity in our sales activities, particularly in regards to
winning new clients and effectively competing against
other providers.
In regards to our commercial model, we are looking to begin a
gradual shift towards a seat-based licensing model. We believe that
this will provide greater flexibility for clients, provide us with the
ability to target specific job roles and client functions, and help to
fully commercialise our product investment. Alongside this licensing
model, we have also implemented a strict pricing policy and
governance framework, which will help to drive increased price
realisation and minimal discounting.
Whilst given our centralised operating model, we are also developing
a GlobalData “Sales Best Practice Playbook”, which will create and
standardise the best-practice tools, processes, and training to be
provided to our global salesforce. This includes a central sales
operations and product marketing team which ensures our teams
are finding the right opportunities, at the right time, and pitching
the right product, in the right way.
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
significantly increased resources focused on first-line response,
and continue to explore and adopt new technologies.
14
ANNUAL REPORT AND ACCOUNTS 2019
Strategic Report
Chief Executive’s Report
In 2020, one of our Growth Optimisation initiatives will focus on the
development of comprehensive client personas, which will reflect a
range of our target buyers and users across our industry verticals.
These personas will play a pivotal role in enhancing our ability to
create compelling propositions and product capabilities for specific
job roles, whilst providing the insight our sales teams need to
effectively engage with target prospects. Beyond this, we are also
looking to implement a number of processes and technology tools
to improve the way we capture feedback from our clients and users.
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. Our centralised operating model, not only
brings cost and margin benefits, it also allows the business to be
operating in a very agile but consistent manner which drives
operational synergies.
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.
We have previously stated that our medium term Adjusted EBITDA
margin target was 25%, which I am pleased to report that we have
now achieved in 2019. Whilst this is a clear indication that our
business model is working, we do not see this as a ceiling and are
now targeting 35% over the next 5-year term.
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 well positioned for growth and to continue to deliver
data, analytics, and insights into global markets, all of which present
opportunities for long-term profitable growth.
Mike Danson
Chief Executive Officer
2 March 2020
ANNUAL REPORT AND ACCOUNTS 2019
15
Strategic Report
Chief Financial Officer’s Report
16
ANNUAL REPORT AND ACCOUNTS 2018
Strategic Report
Chief Financial Officer’s Report
Continuing operations
Income statement analysis
Revenue
Statutory profit/ (loss) before tax
Depreciation
Amortisation of software
Amortisation of acquired intangible assets
Other income
Finance costs
EBITDA2
Restructuring costs
Adjustment for change in accounting policy4
Revaluation of short and long-term derivatives
Share based payments charge – scheme 1
Share based payments charge – scheme 2
Unrealised operating foreign exchange loss
M&A costs
Adjusted EBITDA1
Adjusted EBITDA margin1
Cash flow analysis
Cash flow generated from operations
Adjusted operating cash flow3
Underlying cash flow conversion %3
Adjusted earnings performance
Adjusted EBITDA1
Depreciation
Amortisation of software
Other income
Adjustment for change in accounting policy4
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 profit/ (loss) per share (pence)
Diluted profit/ (loss) per share (pence)
Adjusted earnings per share (pence)
Adjusted diluted earnings per share (pence)
2019
£000s
2018
£000s
Movement
178,195
157,553
13%
10,171
4,807
874
16,273
(1,274)
4,692
35,543
763
(4,021)
(1,686)
10,882
134
1,405
1,544
44,564
25%
52,350
52,308
117%
44,564
(4,807)
(874)
1,274
4,021
(4,692)
39,486
(3,187)
36,299
116,501
125,733
5.99
5.55
31.16
28.87
(7,664)
742
1,165
20,422
-
2,487
17,152
3,661
-
1,150
5,679
-
1,407
3,181
32,230
20%
25,058
30,542
95%
32,230
(742)
(1,165)
-
-
(2,487)
27,836
(3,408)
24,428
109,926
119,516
(10.17)
(10.17)
22.22
20.44
107%
38%
109%
71%
42%
49%
40%
41%
The financial position and performance of the business are reflective of the core financial elements of our business model: visible and
recurring revenues, high incremental margins, scalable opportunity and strong cash flows.
ANNUAL REPORT AND ACCOUNTS 2019
17
Strategic Report
Chief Financial Officer’s Report
THE GROUP’S PERFORMANCE THIS YEAR
1. Revenue
Revenues increased by 13% to £178.2m (2018: £157.6m), which reflects underlying organic growth (7%), the benefit of a full year of the
Research Views revenues, acquired part way through 2018 (£6.4m) and the acquisition of Aroq Limited (£2.6m) in January 2019. The
increase in revenue has been driven by recurring subscription revenues.
2. Profit before tax
The profit before tax for the year was £10.2m (2018: loss £7.7m). The shift to profitability has been driven by strong growth in revenues and
EBITDA, but also in part in the reduction in non-cash amortisation of intangible assets, offset by an increase to the non-cash share based
payment charge. Prior years have included significantly more costs associated with acquisitions and restructure of the Group, however
there has not been significant M&A activity in the year, and the integration work is substantially complete.
The implementation of IFRS 16 in the year reduced profit before tax by £0.3m.
The Group also reviews Adjusted Profit Before Tax to understand the underlying profitability of the Group. The Adjusted Profit Before Tax
grew to £39.5m (2018: £27.8m)
3. Cash Generation
The operating cash flow was £52.4m (2018: £25.1m). Excluding the cash costs associated with M&A, restructuring, other exceptional costs
and one-off pension payment (£3.6m) and the impact on classification by the implementation of IFRS 16 (£3.7m) the adjusted operating
cash flow was £52.3m (2018: £30.5m), which is 117% of Adjusted EBITDA (2018: 95%).
The Group repaid debt of £10.5m and paid dividends of £14.6m. The Group also paid for acquisitions of £8.1m, which were funded under
facilities agreed in the previous year.
Capital expenditure was £2.6m in 2019 (2018: £1.6m). This includes £1.1m on software (£0.9m in 2018).
4. Adjusted EBITDA
Adjusted EBITDA increased by 38% to £44.6m (2018: £32.2m). Our Adjusted EBITDA margin increased by 5 percentage points to 25% (2018:
20%). We have established a relatively fixed cost base, meaning that the incremental margin flow through to Adjusted EBITDA margin is strong.
5. Forward invoiced revenue
Forward invoiced revenues grew by 5% from the 31 December 2018 balance of £81m to £85m, reflecting a slight slowdown on sales orders
in the latter quarter of 2019. During the second half of the year we restructured some of our sales operations in Europe, which resulted in a
reduced sales headcount. Our immediate focus is on Sales Excellence, which includes our aim to increase our sales headcount.
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 positive
impact on revenues of £3.0m (2018: negative £2.0m), which was offset in the consolidated income statement by approximately £2.4m of
adverse impact in the Group costs (2018: positive £2.0m), meaning that currency benefitted the Group’s profitability by £0.6m (2018: nil).
The main driver for the movement was the movements of pound sterling in comparison to US dollar. In 2018 the average rate throughout
the year was 1.34 compared to a stronger pound, on average, in 2019 of 1.27.
7. Net Debt:
Net Debt reduced to £55.3m as at 31 December 2019 (2018: £64.1m). This reduction principally reflects strong cash flows, offset by M&A
spend of £8.1m, dividends of £14.6m and purchase of own shares of £3.6m.
8. Earnings per share
Basic profit was 5.99 pence per share (2018: loss of 10.17 pence per share). Fully diluted profit per share was 5.55 pence per share (2018: loss
of 10.17 pence per share).
On an adjusted basis, the adjusted earnings per share grew from 22.22 pence per share to 31.16 pence, representing 40% growth.
9. Share based payments
The share based payments charge for 2019 has increased from £5.7m to £10.9m (excluding new scheme). The key driver for this increase is
the share price performance which has driven up the fair value of the options awarded over the past 18 months. This exceeds the fair value
of options of employees that have left.
18
ANNUAL REPORT AND ACCOUNTS 2019
Strategic Report
Chief Financial Officer’s Report
A new scheme was approved in October for top executives, which has a capacity of 4 million options. 1.4 million options were issued in the
year with a total charge of £0.1m.
10. Taxation
The effective tax rate for the year was 31%. The difference to the Current UK rate of 19% principally relates to overseas tax suffered, mainly
in the United States and India, as well as some prior year adjustments and expenses not deductible for tax.
11. IFRS 16
The adoption of IFRS 16, effective from 1 January 2019, has resulted in the Group recognising a right-of-use asset and related liability in
connection with most former operating leases. The new standard has been applied using the “modified retrospective” transition approach.
The impact on the financial results as at 31 December 2019 is to increase assets by £44.2m and to increase liabilities by £44.5m. The Group
has continued to use a consistent measure for Adjusted EBITDA and has therefore excluded the impact of IFRS 16 from this measure.
The reported EBITDA has increased by £4.0m as a result of IFRS 16, with offsetting adjustments in depreciation (£4.0m cost increase),
finance costs (£1.5m cost increase) and other income (gain of £1.3m) resulting in an overall reduction in profit before tax of £0.3m. Other
income is amounts received on sub-let properties capitalised under IFRS16. More information is provided in Note 2 – Accounting policies.
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.
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. Although the statement of financial position shows net current liabilities (current assets less current
liabilities), included in current liabilities is £69m of deferred revenue. Once adjusted, the Group has net current assets of £18m (2018: £20m).
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 in operation and meet its liabilities as they fall due for the foreseeable future, being a period of at least 12 months from the date of
approval of the financial statements. 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 25, within the Strategic Report.
Graham Lilley
Chief Financial Officer
2 March 2020
Note 1: Adjusted EBITDA: Earnings before interest, tax, depreciation and amortisation, costs associated with acquisitions, restructuring of the Group, share
based payments, impairment, unrealised operating exchange rate movements, impact of foreign exchange contracts and the impact of IFRS16 (Leases).
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 £11.0m for share based payments (2018: £5.7m).
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 defined as: Adjusted operating cash flow as a percentage Adjusted EBITDA.
Note 4: Change in accounting policy: Change in accounting policy relates to the impact of adopting IFRS 16, excluded from adjusted EBITDA to allow for
comparison with prior periods.
ANNUAL REPORT AND ACCOUNTS 2019
19
Strategic Report
Risk and uncertainties
20
ANNUAL REPORT AND ACCOUNTS 2019
Strategic Report
Principal and Emerging Risks and Uncertainties
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 data, analytics, and insights.
Our Approach to Risk Management
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.
As reported last year, the Group created a Risk Management Action Plan (RMAP) on which progress is being made. The RMAP is continually
evolving to ensure that the Risk Management Framework is further embedded throughout the organisation.
The Board sets the Group’s risk appetite. In doing so, the Board considers our strategic objectives, the Group’s principal risks & uncertainties
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 responsibility 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 of the internal controls and risk is
embedded into the decision making process of the business.
The Audit Committee monitors the adequacy and effectiveness of internal control and risk management systems and ensures that a robust
assessment of the principal risks facing the Group has been undertaken.
Our approach to identifying the principal risks
The principal risks and uncertainties identified in the Report are those categories of risk which are considered by the Board to be material to
the Group’s strategic development and future prospects as well as Group operations. The risk categories have not materially changed since
the last year, however the Board have assessed how the risks have evolved over the year and have documented the change in impact and
development of mitigation where applicable.
The principal risks and uncertainties reported are not the only risks facing the business, but are those which the Board consider to be
material to the Group.
ANNUAL REPORT AND ACCOUNTS 2019
21
Strategic Report
Principal and Emerging Risks and Uncertainties
The Directors consider that the principal and emerging risks and uncertainties facing the Group are:
Business and strategic risks:
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.
Our vision to become
the world’s trusted
source of strategic
industry data, analytics,
and insights means that
our content must be
of the highest quality
to help our clients be
successful. A reduction
in quality could result
in a loss of reputation
resulting in a loss of
revenues from new and
renewable business.
Failure to recruit
or retain key staff
could lead to
reduced innovation
and progress in the
business.
Loss of market share
due to changing
markets and reduced
financial performance
arising from
competitive threats.
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.
• Have a clear process for ensuring and checking integrity and quality
of our content.
• Continue to invest in recruiting and retaining high quality analysts
and researchers.
• We are continually developing innovative solutions which enhance both the
content quality and our client’s user interface experience.
• Engage external consultants 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 introduction of a new long-term incentive plan to retain the top level of the
executive throughout the next 5-year plan.
The Group operates across a range of industry verticals and across the globe,
therefore it has a broad range of clients and competitors. One of Group’s unique
selling points is not only the breadth of its coverage, but also depth. Therefore, it has
to ensure that the depth of industry content is competitive and comparable to its
competition in that sector.
• 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.
• We aim to embed our products and service in client organisations thereby
increase switching costs.
• We provide improved and best in class client support thereby improving
customer satisfaction and retention.
22
ANNUAL REPORT AND ACCOUNTS 2019
Strategic Report
Principal and Emerging Risks and Uncertainties
Business and strategic risks (continued):
Risk Description
Potential Impact
Mitigation
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.
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.
When economic and political uncertainty lead to financial uncertainty, we have the
following mitigations:
• Management of headcount and overheads.
• Visibility of revenue through invoiced revenue and renewable contracts.
• We operate across multiple industry sectors and therefore are not reliant on
one industry.
• We operate in different geographies and therefore operate in a balanced
portfolio of markets.
Brexit
The Group continues to monitor the impact of the UK’s exit from the European Union.
We continue to expect that the majority of the impact will be indirect.
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.
Acquisition and
Disposal Risk
The failure to
successfully identify
and integrate key
acquisitions could
lead to loss of profits,
inefficient business
processes, inconsistent
corporate culture and
weakened brand.
M&A has been a significant part of the strategy and growth of the Group and moving
forwards, M&A will continue to play a key role in our strategy. Therefore, the rigour and
the diligence that goes into first the selection of targets and then the acquisition and
integration of business is key to our strategic success.
• 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.
How the business
and strategic risks
have changed:
The Global economic and political uncertainly continues to increase and is becoming a constant theme, despite
some level of clarity around Brexit in the United Kingdom. In terms of delivering against our strategic objectives,
internal execution remains the main area of risk and ensuring that our product proposition is right for our clients
and that we are getting our sales messages to those clients continues to be our main focus.
ANNUAL REPORT AND ACCOUNTS 2019
23
Strategic Report
Principal and Emerging Risks and Uncertainties
Operational risks:
Risk Description
Potential Impact
Mitigation
Financial
Loss, misuse or
theft of proprietary,
employee or
customer data
IT, cyber and
systems failure
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.
As a Global Group we are
subject to many forms
of direct and indirect
taxation and because
of the many territories
we are active within, tax
law and compliance is a
complex area.
Loss of our proprietary
content and data could
diminish the value that
we derive from our
intellectual property.
Significant operational
or client disruption
caused by a major
IT disaster or cyber-
attack.
There is a risk of
financial loss through
successful phishing
or whaling attacks or
other cyber infiltration.
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 are 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 Board and
Audit Committee.
We engage a big four firm for tax advice and utilise their global network to both plan our tax
exposure and manage compliance across the world. We make full and transparent returns
in each jurisdiction and work collaboratively to ensure accurate submissions are made.
We have an obligation to protect the data we hold, whether that is customer or
employee data. Loss and/ or misuse of this data could result in a loss of reputation,
and regulatory sanctions or fines. Controls are in place to prevent the loss/ misuse of
data in the Group:
• Segmented networks protect client data.
• Third party services used to detect potential breaches of employee information.
IT, cyber and systems failures continue to be a major area of focus for the Group
and the Group is part way through a significant upgrade to its IT infrastructure. Key
mitigations and controls for the Group:
• Business continuity plans have been implemented across the Group, including
disaster recovery programmes, and plans to minimise business disruption.
• Product and sales infrastructure hosted by external third parties with adequate
•
security protocols.
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.
• External consultancy engaged to help with design and implementation of IT
security and protections.
Regulatory
Compliance
The Group may be
subject to regulations
restricting its activities
or effecting changes
in taxation.
The majority of the Group’s operations are based in the United Kingdom, United States
of America and India. Appropriate advisors are employed in all geographies to ensure the
Group remains compliant with local laws and regulations. The Group has policies in place
for anti-money laundering, anti-bribery policy and data protection and privacy that have
been distributed amongst staff.
How the
operational risks
have changed:
The Group views the risk of cyber-attacks to be a continual threat and looks to continually develop our security
and response procedures to protect the Group against such threats. We do not consider that the other areas of
operational risk have changed materially in the year, however we continue to monitor each closely and engage
with experts to ensure we are ready for any change of circumstance should it arise.
24
ANNUAL REPORT AND ACCOUNTS 2019
Strategic Report
Going Concern and Viability
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. Although the Group’s current liabilities exceed its current
assets, the deferred revenue balance is a large contributing factor. Deferred revenue is not a liability where there is an expected cash
outflow. If this is excluded, the Group is in a net current assets position.
The Directors have a reasonable expectation that there are no material uncertainties that cast significant doubt about the Group’s ability to
continue in operation and meet its liabilities as they fall due for the foreseeable future, being a period of at least 12 months from the date
of approval of the financial statements. 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 2024 as part of the 5-year plan, taking account of the
Group’s current position, its cash flows and the potential impact of the principal risks as outlined on pages 22 to 24 of this Annual Report.
The Board considers this period as an appropriate review period as it offers a medium term view and gives actions and strategy sufficient
time to review against.
The 5-year plan has been built on the basis that the Group continues to achieve its current renewal rates and wins new business at
a consistent rate. Our cost base is relatively fixed and predictable and as such we have assumed modest cost growth. The cash flow
assumptions follow our business model of our clients being invoiced in advance of the subscription start date and suppliers and employees
are paid within 30 days and at the end of the month respectively.
The 5-year plan has been subject to stress testing, the results of which show significant headroom in cash and facility terms. The Group also
has strong headroom in relation to the financial covenants in place and no breach is forecast.
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 the
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.
Given the opportunity within the Group’s markets, the Board believe internal execution to be the single greatest risk against its 5-year plan.
The Group recognises the key mitigations to protect the Group from this as set out in its principal risks on page 22.
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 2024 which demonstrate ability to trade with headroom on its facilities and to meet ongoing repayments of the term loan. There
is a remaining £16.5m to draw on the facility.
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
2 March 2020
ANNUAL REPORT AND ACCOUNTS 2019
25
Bernard Cragg
Chairman
Mike Danson
Chief Executive
Graham Lilley
Chief Financial Officer
Bernard Cragg is 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
£502m 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.
26
ANNUAL REPORT AND ACCOUNTS 2019The 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 Old Mutual Wealth
Limited, Old Mutual Wealth Life
& Pensions Limited and 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 33 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,
particularly how we sell and the
selling process.
27
ANNUAL REPORT AND ACCOUNTS 2019The DirectorsDirectors’ Report The Board has set out its responsibility for preparing the Annual Report and Accounts on page 43. 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 publicly available at: www.frc.org.uk/directors/corporate-governance-and-stewardship/uk-
corporate-governance-code
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.
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 25, which considers the 5-year plan. 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 Group 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 Group 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 whistleblowing 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.
The Group operates an intranet, which every employee has access to. On the intranet the employees have access to policies and procedures
and it is also used to communicate company events, activities and regular corporate updates from the CEO.
The Directors have set out its wider stakeholder analysis. The Board view renewal rates and payment statistics for a high level view on the
health of client and supplier engagement, but will also have deep dives into engagement through discussion with commercial managers.
Division of Responsibilities
The Board is made up of two Executive Directors and five Non-Executive Directors. The Executive Directors who have served during the
year are Mike Danson and Graham Lilley.
The 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. During the year, Bernard
served as a Non-Executive Chairman, however on appointment and during 2019 he cannot be considered independent as he participates
in the Company’s employee share option scheme. The Board considers 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
28
ANNUAL REPORT AND ACCOUNTS 2019Corporate Governance ReportDirectors’ Report
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. The Code also requires that the Chairman should not remain in post beyond nine years. Bernard was appointed to the
role of Chairman in July 2009 and hence can not be considered independent on the basis that he has been in role beyond the nine years.
The Board is planning for the succession of Bernard in his role as Chairman.
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. Given Peter’s position on the Nominations Committee, he abstained from these discussions. 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. In his role as Senior Independent Director, Peter also acts as a sounding board for the Chairman.
The Board is planning for the succession of Peter (and Bernard as Chairman) to retain the balance of independent Directors in line with the
UK Corporate Governance Code, and further enhance the Boards’ knowledge, experience and skillset.
The Non-Executive Directors’ shareholdings are detailed in the Directors’ Interests table on page 32 of the report. The Board has determined
that all the independent Non-Executive Directors are independent and that their shareholding in the Company does not affect their
independence. As noted above, the Chairman is not considered independent and has a material shareholding.
In 2019, 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 current and emerging risk and control environment, and has set out its approach to risk on
pages 22 to 24. The board confirm it has completed a robust assessment of the Group’s emerging and principal risks during the year.
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.
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 1 female employee 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.
29
ANNUAL REPORT AND ACCOUNTS 2019Corporate Governance ReportDirectors’ Report 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 2019.
Board meetings during the year:
Number of meetings
Bernard Cragg
Mike Danson
Graham Lilley
Murray Legg
Peter Harkness
Annette Barnes
Andrew Day
Board
Audit
Committee
Remuneration
Committee
Nomination
Committee
12
12
12
12
12
11
12
N/A
N/A
N/A
4
4
4
4
N/A
N/A
N/A
2
3
3
3
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.
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;
and
• 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.
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 pages 22 to 24.
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.
30
ANNUAL REPORT AND ACCOUNTS 2019Corporate Governance ReportDirectors’ Report
• 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 monthly preparation and review of balance sheet control account reconciliations.
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 40 to 42. The terms of reference of the Remuneration Committee are available
for inspection on request.
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 in operation and meet its liabilities as they fall due for the foreseeable future, being a period of at least 12 months from the date
of approval of the financial statements. 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 25 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 32, which includes the shareholding of Mike Danson who owns 79,028,349 shares, representing
66.8% 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.
31
ANNUAL REPORT AND ACCOUNTS 2019Corporate Governance ReportDirectors’ Report
At 31 December 2019, the Group employed the following number of employees of each gender:
Male
Female
2019
No.
2,000
1,355
3,355
2018
No.
2,011
1,232
3,243
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 2019 the Group had 69 days purchases outstanding (2018:
71 days).
Subsequent events
There are no subsequent events.
Financial instruments
Use of financial instruments and exposure to various financial risks has been discussed within the Strategic Report (page 24).
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 23 to the financial statements. As at 2 March 2020, Mike Danson had a beneficial
interest of 66.8 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 2 March 2020 in the ordinary shares of the Company were as follows:
Number of ordinary shares
390,000
79,028,349
23,000
70,000
Bernard Cragg
Mike Danson
Murray Legg
Peter Harkness
32
ANNUAL REPORT AND ACCOUNTS 2019Corporate Governance ReportDirectors’ Report Directors’ Section 172(1) Statement
The Board acknowledges its responsibility under section 172(1) of the Companies Act 2006 and below sets out the key processes and
considerations that demonstrate how the Directors promote the success of the Company.
The below statement sets out the requirements of the Act, section 172(1), and note how the Directors discharge their duties.
As noted in the Corporate Governance Report (pages 28 to 32), the Board meet monthly with papers circulated in advance to allow the
Directors to fully understand the performance and position of the Group, alongside matters arising for decision. Each decision that is made by
the Directors is supported by papers which analyse the possible outcomes so that an educated decision can be made based upon the likely
impact on the Group, so a decision can be made which best promotes the success of the Company and considers the impact on the wider
stakeholder group. Factors (a) to (f) below, are all taken into account during the decision making process.
(a) The likely consequences of any decision in the long term
Supporting each decision, the Board are given access to management papers which set out the potential outcome of decisions. The papers
include diligence on the financial impact via forecasts, as well as non-financial factors and how the decision fits with the strategy of the Group.
The Group has a 5-year plan, which is a financial plan supported by a Growth Optimisation Plan, which is reviewed regularly to benchmark
performance and achievements against. Strategy is reviewed in detail each year at the Board Away Day and this strategic thinking is intrinsic
to future decision making processes. Where appropriate, the Board will delegate responsibility to a sub-committee of Directors for areas such
as M&A, property and risk.
(b) The interests of the Company’s employees
The Directors actively consider the interest of employees in all major decisions. People is a regular agenda item at Board meetings where
attrition rates, reasons for leaving and employee satisfaction are discussed. As discussed on page 28, the Company operates a “VOICES”
network, which is an employee group within GlobalData. Feedback and ideas are shared with the Board, which are considered and actions are
taken as a result.
The Group also operates an LTIP for around 100 of the Group’s employees to encourage employee engagement in promoting the success of the
Company and maximising shareholder return.
(c) The need to foster the Company’s business relationships with suppliers, customers and others
The Directors have identified the stakeholders of the Group and review regularly to ensure adequate communication and engagement is
ongoing with each group. The review of the stakeholder map, which maps the influence and interest of our stakeholders, is used as a guide
when decisions need to be made. The stakeholder map is reviewed at least annually.
One of the Group’s stated Strategic Priorities is to be customer centric and this is harboured through quality account management and
customer service processes. Page 14, within the Chief Executives Report, discusses how the Group and its Board address the customer centric
priority and page 22 notes the mitigations that are in place from a risk perspective to ensure we control our relationship with our clients. Client
retention rates are also monitored on a monthly basis. Our standard payment terms are zero days ahead of the contract start and we monitor
the average debtor days, which were 95 days at the end of 2019 (2018: 115).
Whilst the majority of our cost base is people, we maintain strong working relationships with our suppliers and continually monitor supplier
payment days. For key suppliers we perform diligence around their working practices and ethics as well as their financial stability and viability.
(d) The impact of the Company’s operations on the community and environment
The Group takes its responsibility within the community and wider environment seriously and acknowledge that more can be done. However,
our Environmental, Social and Governance report on page 35 sets out the key themes that are considered by the Board. GlobalData is a global
company and has based itself in strategic locations for the long term. Therefore, in making decisions about the properties, as an example, the
Board reviewed community and environmental issues when approving proposals.
The Company has a relatively low carbon footprint, but acknowledges improvements can always be made and the Directors encourage video
calling rather than air travel. The Group also looks to engage local communities through charity work, particularly focussing on charities in the
education and learning space.
33
ANNUAL REPORT AND ACCOUNTS 2019Directors’ Report Directors’ Section 172(1) Statement
(e) The desirability of the company maintaining a reputation for high standards of business conduct
The Directors and the Company are committed to high standards of business conduct and governance. The Group has fully adopted the UK
Corporate Governance Code despite there being options for more reduced codes for companies on AIM.
One of our stated strategic priorities is World Class Products, which is primarily aimed at best in class products, but the Directors believe the
wider reputational and cultural conduct is a big part of product reputation.
Where there is a need to seek advice on particular issues, the Board will seek advice from its lawyers and nominated advisors to ensure the
consideration of business conduct, and its reputation is maintained.
(f) The need to act fairly between members of the Company
The Directors regularly meet with investors and give equal access to all investors and potential investors. Through its advisors, the Directors
seek and obtain feedback from meeting with the investors and incorporate feedback into its decision making processes.
34
ANNUAL REPORT AND ACCOUNTS 2019Directors’ Report Environmental, Social and Governance
Environmental, Social and Governance (“ESG”) matters are a key part of our strategy, and for us at GlobalData it is about safeguarding long-
term viability and sustainable growth for the Company, our people, our clients and our 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 focussing 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 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.
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 1 female employee serve during the year.
At GlobalData we encourage our people to be actively involved in our strategy and product, as well as ongoing corporate development. This
has enabled the Group to maintain a level of agility and the ability to plan, design and launch product enhancements in relatively short time
frames.
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.
35
ANNUAL REPORT AND ACCOUNTS 2019Directors’ ReportGlobalData SustainabilityOur PeopleSocialInvestmentEnvironmentOur Clients
Environmental, Social and Governance
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.
We are continually focused on the quality of our data, analytics, and insights so that our clients can trust our products and professional
integrity at every point of interaction.
Areas of focus:
•
•
•
•
Trust in our data
Integrity of our research methodologies
Ethical standards
Privacy and data protection
The Group takes data security very seriously. The risks and mitigating controls around cyber and data security are outlined on page 24 of
the Annual Report.
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
36
ANNUAL REPORT AND ACCOUNTS 2019Directors’ Report As Chairman of the Audit Committee I am pleased to present our report to you for 2019.
Key Activities of the Audit Committee
The Audit Committee assists the Board in setting Governance standards and has specific responsibility over financial controls, financial
reporting and audit effectiveness. In 2019, specifically, the Audit Committee has:
• Reviewed the integrity of the financial statements of the Group and any formal announcements relating to financial performance;
• Conducted a review of the Annual Report and Accounts to confirm that it was fair, balanced and understandable;
• Reviewed the significant financial judgements made in the year (including the consideration of the implications of IFRS 16 (New lease
accounting standard));
• Reviewed the effectiveness of the Group’s internal controls and risk management framework;
• Considered the integrity of the Group’s relationship with the external auditors and the effectiveness of the audit process; and
• Conducted an Audit Tender process for the Group Audit for the year ended 31 December 2020.
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 Committee comprises only independent Non-Executive Directors and 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 2019. 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 2019, we focused upon the following areas:
• Assessing the impact of IFRS16 ‘Leases’, which was effective 1 January 2019;
• Fair value review of AROQ Limited;
• Review of the appropriateness of the Adjusted EBITDA measure reported for 2019, including the Employee Share Award Target and
adjustments made to reported EBITDA;
• The Group’s going concern status and its long term-viability;
• Review of impairment calculations; and
• Review of continuing enhancements to the finance function and IT security.
Fair, balanced and understandable
On behalf of the Board, the Committee reviewed the 2019 Annual Report and Financial Statements to ensure that they provide a fair,
balanced and understandable reflection of the Group, its performance, position and future prospects.
As part of the review, the Committee considered whether:
• There are any material or sensitive omissions from the narrative
• The narrative is a true and balance reflection of events and performance in the year
• There is consistency throughout the Annual Report and Financial Statements
• There is a clear explanation of key performance indicators and their link to performance and strategy.
In the view of the Committee, the Annual Report is fair, balanced and understandable in accordance with the requirements of the UK
Corporate Governance Code.
37
ANNUAL REPORT AND ACCOUNTS 2019Audit Committee ReportDirectors’ Report Significant Financial Estimates and Judgements:
Issue
Consideration of estimation or judgement
Valuation
of acquired
intangibles
Although the Aroq Limited acquisition represented a smaller acquisition than in previous years, the intangible assets
acquired are material to the Group. The Committee reviewed the purchase price allocation calculations and concluded
that both the application and methodology were consistent with previous acquisitions and the assumptions used
were reasonable.
Recoverability of
deferred tax assets
The Committee reviewed management’s assessment of recoverability of deferred tax assets. The assessment
was made with reference to Board approved forecasts of future taxable profits. The Committee concluded that
a reasonable approach had been taken.
Share based
payments
The Committee reviewed the calculation and assumptions used in calculating the share based payments charge.
The valuation of new awards in 2019 was conducted by an external consultant and the Committee considered
this report when concluding that the share based payments charge contains reasonable assumptions (such as
expected employee churn, Black-Scholes assumptions) were fair and reasonable.
Provision for
doubtful debts
The Committee reviewed the overall process for identifying both specific doubtful debts and lifetime expected
credit losses, and are comfortable with the approach taken.
Carrying value
of goodwill and
acquired intangible
assets
The impairment test for the carrying value of goodwill and acquired intangible assets requires forward looking
value-in-use calculations that involve assumptions and judgements by the management team. The Audit
Committee sought to review these calculations and challenge the assumptions contained within, particularly
around future revenue growth assumptions and discount rate used. The Committee concluded that a reasonable
approach had been taken and that assumptions and judgements were reasonably based.
IFRS 16 Lease
Accounting
Segmental
reporting
IFRS 16 is a new standard effective for the first time in 2019. Therefore, the Committee read papers from the
senior management team and ensured that management took care when deciding upon the application of IFRS
16 and again ensured that the assumptions used in the lease accounting methodology were fair and reasonable.
The Committee reviewed segmental disclosures and ensured that they were in line with what was reviewed by
the Chief Operating Decision Makers (the Executive Board) when assessing and reviewing performance. The
Committee concluded that disclosures in the Annual Report and Accounts were consistent.
Defined benefit
pension asset
The Committee reviewed a paper setting out the accounting options available in relation to the treatment of the
buy-in of the defined benefit pension scheme, and concluded that management’s assessment was reasonable.
Allocation of Cash
Generating Units
The Committee reviewed management’s assessment of the cash generating units. The CGU’s identified are all
part of the data, analytics, and insights segment, which can all be traced back to acquisitions over recent years,
for which management are still able to identify specific cash flows.
Adjusted
performance
measures (APMs)
The Committee reviewed the Strategic Report and the financial statements contained within the Annual
Report and Accounts to ensure that APMs were not given undue prominence over statutory numbers and that
adjustments made to get to the APMs were both consistent with previous years and that the adjustments
gave the reader a clearer understanding of the underlying performance of the business. The Committee is
satisfied that the Accounts give a balance and fair view of performance and APMs are presented in a consistent
and clear manner, so that they contribute to the reader’s overall understanding of the accounts and the
business performance.
38
ANNUAL REPORT AND ACCOUNTS 2019Audit Committee ReportDirectors’ Report 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
In order to maintain the independence of the external auditors, the Board has determined that non-audit work will not be offered to the
external auditors unless there are clear efficiencies and value added benefits to the Group.
The Audit Committee annually reviews the remuneration received by the auditors for audit services and non-audit work. Their audit and non-
audit fees are set, monitored and reviewed throughout the year (see note 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.
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. As a Group we are aiming to adhere to, and uphold the best standards in corporate governance. Therefore,
the Committee is not recommending the reappointment of Grant Thornton UK LLP for 2020. Furthermore, the Committee has conducted a
thorough and rigorous tender process which is noted below and because of the length of Grant Thornton’s current tenure the Committee
did not invite the firm to tender for the year ended 31 December 2020.
During the year, Grant Thornton has attended each Audit Committee meeting and presented its findings reports for the interim and full year
results as well as planning memorandums. The Committee meets with the External Auditor without the presence of management at least
once a year. The Committee are satisfied that Grant Thornton’s appropriate level of challenge, their focused reporting and their discussions
with both management and the Committee in planning and concluding their work has safeguarded an effective audit. I would like to take
this opportunity to thank them for their input over the course of the last 10 years.
The Audit Committee has considered the need for a separate internal audit function and notes that there are some elements of internal
audit that are currently outsourced, including specific agreed upon controls reviews in our Indian businesses 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 an entire separate
internal audit department would outweigh the benefits. The Audit Committee and Board are continually assessing the need for additional
assurance procedures within the Group.
Audit Tender
The Group has adopted the Competition and Markets Authority Order (CMA Order) and will rotate audit firms at least every 10 years. As a
result of this decision, the Group undertook a full tender process in respect of external audit services in compliance with FRC guidance on
best practice, in particular ensuring independence in respect of potential audit firms, for the year ending 31 December 2020. The existing
external audit firm, Grant Thornton, was not invited to re-tender.
We approached a range of firms including the ‘big four’ and mid-tier firms (except for the incumbent) to express their interest. Interested
firms were subsequently requested to complete a detailed Request for Proposal (RFP). Following the responses to the RFP, a shortlist of two
firms was decided upon to take through to a full tender process.
During the tender process, each firm was given access to members of the group’s executive and non-executive Board, as well as senior
management and a data room. The tendering firms were judged against objective criteria determined in advance of the process, together
with the findings and conclusions of published inspection reports on the audit firms. Whilst the Committee appreciated the quality of
the proposals presented by all the tendering firms, it considered that the submission and team from Deloitte LLP (Deloitte) best met the
criteria that the Committee had predefined. It therefore recommended to the Board that Deloitte be appointed as the company’s auditor
commencing with the audit of the financial year ending 31 December 2020.
To ensure a smooth transition from Grant Thornton, Deloitte attended the Audit Committee meeting on 14th February 2020.
The Committee confirms that there are no contractual obligations which restrict the choice of external auditor.
Murray Legg
Chairman of the Audit Committee
2 March 2020
39
ANNUAL REPORT AND ACCOUNTS 2019Audit 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 2019.
The 2016 Code recommends that the Remuneration Committee comprises at least three independent Non-Executive Directors, and is
chaired by one of these Directors. The Remuneration Committee consists of the Chairman Peter Harkness, Murray Legg, Annette Barnes
and Andrew Day, all of whom are independent Non-Executive Directors.
Key activities of the Remuneration Committee
The key activities of the Remuneration Committee consist of:
• Reviewing the Group Remuneration Policy, ensuring continued effectiveness
• Reviewing salaries for Executive and Non-Executive Directors and senior employees
• Review and approval of long-term incentive plans
• Approving awards under the Group’s long-term incentive plans
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 24.
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 12 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 2 March 2020 are:
Bernard Cragg
Mike Danson
Graham Lilley
Murray Legg
Peter Harkness
Annette Barnes
Andrew Day
40
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
ANNUAL REPORT AND ACCOUNTS 2019 Basic salary
Share based payment
Other benefits
2019 total
2018 total
£000s
£000s
£000s
£000s
£000s
Directors’ Report
Directors’ Remuneration Report
Audited Information
Directors’ emoluments
Bernard Cragg
Mike Danson
Graham Lilley
Murray Legg
Peter Harkness
Annette Barnes
Andrew Day
150
-
200
40
40
30
30
748
-
299
-
-
-
-
-
35
-
-
-
-
-
The other benefits consist of company cars and health insurance cover.
Share options
Amounts charged to the income statement:
Long-term incentive plan
Senior long-term incentive plan
898
35
499
40
40
30
30
2019
£000s
10,882
134
11,016
150
50
167
40
40
30
30
2018
£000s
5,679
-
5,679
Long-term Incentive Plan
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 employees. Each option granted converts to one ordinary share on exercise. A participant may exercise their options
subject to employment conditions and EBITDA targets being met.
On account of the previous EBITDA target (£32 million) being met in 2018, 2.1m options were exercised during March 2019 at a strike price
of £6. The remuneration impact of this on Directors has been shown in the above table.
During the period the Group purchased an aggregate amount of 467,400 shares at a total market value of £3,602,000. 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.
As at 31 December 2019, Graham Lilley had 150,000 share options in issue (2018: 200,000) and Bernard Cragg had 125,000 share options in
issue (2018: 250,000). Further details are given in note 24. No other Directors as at 31 December 2019 had share options.
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 £41 million and £52 million respectively
(2018: £32 million, £41 million and £52 million respectively).
The total charge recognised for the scheme during the year ended 31 December 2019 was £11.0 million (2018: £5.7 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 2019 of £44.6 million
was sufficient to satisfy the next target of £41 million. The employees who have share options dependent on the meeting of the £41 million
target will therefore get the opportunity to exercise their options following the publication of the results, resulting in 1.8 million shares being
exercisable on publication of the Annual Report and Accounts.
41
ANNUAL REPORT AND ACCOUNTS 2019 Senior Long-term Incentive Plan
In October 2019, the Remuneration Committee approved a new long-term incentive scheme consisting of 4 million options for shares for
approximately 20 senior employees. In designing the scheme, the committee considered advice from h2glenfern and CooperCavendish.
The purpose of the Plan is to align the interests of employees and shareholders, to motivate participants to improve shareholder returns and
to retain the services of our key employees in the longer-term.
The scheme permits the option holders to exercise 100% of their options immediately after the announcement of the financial results for the
year ended 31 December 2024, subject to the Group achieving 101.3% shareholder return over the period from 22 October 2019. The deemed
price for the start of the scheme is £8.30.
During 2019 the Remuneration Committee awarded 1.4 million options under this scheme. A charge of £0.1m has been made to the income
statement. Further details are given in note 24.
By order of the Board
Peter Harkness
Chairman of the Remuneration Committee
2 March 2020
42
ANNUAL REPORT AND ACCOUNTS 2019Directors’ Remuneration ReportDirectors’ Report 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 required by section 515(1A) of the Companies Act 2006 will be proposed to shareholders at the Annual General Meeting which
will seek to appoint Deloitte LLP.
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 21 April 2020 at John Carpenter House, John Carpenter Street, London EC4Y 0AN at 10am.
On behalf of the Board
Mike Danson
Chief Executive
2 March 2020
43
ANNUAL REPORT AND ACCOUNTS 2019Statement of Directors’ responsibilities in respect of the Annual Report and the financial statementsDirectors’ Report 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 2019, which comprise the Consolidated Income Statement, the Consolidated Statement of Comprehensive
Income, the Company Statement of Comprehensive Income, the Consolidated and Company Statements of Financial Position,
the Consolidated and Company Statements of Changes in Equity, the Consolidated and Company Statements 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
2019 and of the group’s profit 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.
THE IMPACT OF UNCERTAINTIES ARISING FROM THE UK EXITING THE EUROPEAN UNION ON OUR AUDIT
Our audit of the financial statements requires us to obtain an understanding of all relevant uncertainties, including those arising as a
consequence of the effects of Brexit. All audits assess and challenge the reasonableness of estimates made by the directors and the
related disclosures and the appropriateness of the going concern basis of preparation of the financial statements. All of these depend on
assessments of the future economic environment and the company’s future prospects and performance.
Brexit is one of the most significant economic events for the UK, and at the date of this report its effects are subject to unprecedented
levels of uncertainty, with the full range of possible outcomes and their impacts unknown. We applied a standardised firm-wide approach in
response to these uncertainties when assessing the company’s future prospects and performance. However, no audit should be expected
to predict the unknowable factors or all possible future implications for a company associated with a course of action such as Brexit.
CONCLUSIONS RELATING TO GOING CONCERN, PRINCIPAL RISKS AND VIABILITY STATEMENT
•
•
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:
•
the disclosures in the annual report set out on page 21 that describe the principal risks, procedures to identify emerging risks and an
explanation of how they are being managed or mitigated (including the impact of Brexit);
the directors’ confirmation, set out on page 21 of the annual report that they have completed a robust assessment of the principal
and emerging risks facing the group (including the impact of Brexit), including those that would threaten its business model, future
performance, solvency or liquidity;
the directors’ statement, set out on page 25 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 and parent company’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’ statements relating to going concern and the prospects of the group that would be required under the Listing
Rules in accordance with Listing Rule 9.8.6R(3) if the parent company was a premium listed company is materially inconsistent with
our knowledge obtained in the audit; or
44
ANNUAL REPORT AND ACCOUNTS 2019Independent Auditor’s Report to the Members of GlobalData Plc Independent Auditor’s Report •
•
•
the directors’ explanation, set out on page 25 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.
In our evaluation of the directors’ conclusions, we considered the risks associated with the group’s business model, including effects
arising from Brexit, and analysed how those risks might affect the group’s financial resources or ability to continue operations over the
period of at least twelve months from the date when the financial statements are authorised for issue. In accordance with the above,
we have nothing to report in these respects.
However, as we cannot predict all future events or conditions and as subsequent events may result in outcomes that are inconsistent
with judgements that were reasonable at the time they were made, the absence of reference to a material uncertainty in this auditor’s
report is not a guarantee that the group will continue in operation.
Overview of our audit approach
• Overall group materiality: £884,000, which represents 0.5% of the Group’s forecasted revenue at the planning
stage of the audit.
• We performed full scope audit procedures on the financial information of components in the UK, USA and United Arab
Emirates and specified audit procedures on the financial information of other components in the UK and in India.
• Key audit matters were identified for the Group as:
Revenue recognition;
Impairment of intangible assets;
IFRS 16 ‘Leases’ implementation; and
•
•
•
• Management override of controls.
• 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 contracts are
entered into which span the 31 December
2019 year end. There is a risk that the
deferral and recognition of revenues does
not appropriately match the underlying
terms of customer contracts, in particular
the period over which the performance
obligations are met, or is not in accordance
with the requirements of IFRS 15 ‘Revenue
from Contracts with Customers’. There are
therefore inherent complexities in relation
to the recognition of revenue.
We therefore identified 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 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, covering segregation
of duties across multiple teams, multiple databases, reconciliations over these
databases as well as evidence of approvals.
• 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
requirements of IFRS 15 and the commercial substance of the contracts. In addition:
•
the occurrence of revenue 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;
we tested whether revenue was recognised in accordance with the group’s
revenue accounting policies;
we tested 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 management’s recognition of income
by recalculating revenue recorded with reference to the contractual arrangements.
•
•
•
45
ANNUAL REPORT AND ACCOUNTS 2019Independent 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
The Group’s accounting policy on revenue recognition is shown in note 2(d) to the
consolidated financial statements and related disclosures are included in note 4.
Key observations
Our audit testing did not identify any material deficiencies in the operating effectiveness
of relevant controls that would have required us to expand the nature or scope of our
planned detailed testing work. We have not noted any significant issues with respect to
the recognition of revenue 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.
• Challenging the identification of cash generating units identified by management
with reference to the guidance set out in IAS 36.
• Ensuring the inclusion of assets within each CGU was appropriate and in accordance
with IAS 36 (including the inclusion of IFRS 16 Right-of-Use assets).
• On the basis management calculate recoverable amount as being value in use,
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 such as discount rates (where we used an
internal expert), long term growth rates and sensitivities used.
• Testing the mathematical accuracy of the impairment calculations.
• Challenging management on the inputs into the Energy and Construction CGUs,
including how the CGUs correlate to historical performance as well as the accuracy
of the forecasts.
• Evaluating the disclosures related to impairment tests.
The group’s accounting policy on impairment of intangible assets is shown in note 2 to
the consolidated financial statements and related disclosures are included in note 13.
Key observations
Based on our audit work there was sufficient headroom in the value in use calculations.
There was limited headroom in the value in use calculations relating to the Construction
and Energy cash generating units but following the audit work performed we concur with
management’s assessment that there is no material impairment of intangible assets.
Our audit work included, but was not restricted to:
• Assessing the accounting policy and disclosures for compliance with the financial
reporting framework, including IFRS 16.
• An assessment of the methodology and the internal control environment relating to
the application of IFRS 16.
• Testing the arithmetical accuracy and integrity of management’s IFRS 16 model
by checking the consistency of the formulas and agreeing inputs to supporting
documentation, including lease agreements.
• Testing the completeness and accuracy of the population of leases disclosed by
management and lease payments made in the year.
• Using our internal valuation experts to assess the reasonableness of the discount
rate applied to right-of-use assets.
The group’s accounting policy on leased assets is shown in note 2 to the consolidated
financial statements and related disclosures are included in note 3.
Key observations
Based on the audit work performed, we noted an incorrect application of the UK
incremental borrowing rate to overseas leases. Management have corrected this in the
financial statements and used country specific rates. Following this adjustment, no
material misstatements were noted on the application of IFRS 16 in the year.
Impairment of intangible assets
A significant, material balance on the
consolidated statement of financial position
is intangible assets of £250.1 million,
including goodwill of £216.8 million as
detailed in Note 13. The recoverability of
goodwill and acquired intangible assets is
dependent on expected future cash flows
from cash generating units (CGUs).
In accordance with International Accounting
Standard 36 ‘Impairment of Assets’ (‘IAS
36’), goodwill is subject to an annual
impairment test. Other intangible assets are
subject to an impairment test when there is
an indication that the asset may be impaired.
The process for measuring and recognising
impairment under IAS 36 is complex and
judgemental. Management identified that
Energy and Construction CGUs in particular
have limited headroom, and we therefore
identified impairment of intangible assets
as a significant risk, which was one of the
most significant assessed risks of material
misstatement.
IFRS 16 ‘Leases’ implementation
IFRS 16 has been adopted by the Group for
the first time in the current year. Manage-
ment has elected to adopt the modified
retrospective approach to transitioning to
the new standard, i.e. the Group applies the
standard prospectively from 1 January 2019.
This has had an impact on the Group state-
ment of financial position of £44.7 million
reflecting the right-of-use assets and a
corresponding lease liability of £44.6 million.
The adoption also has an impact of £0.3 mil-
lion on the consolidated income statement.
As the change in accounting policy has such
a significant, material impact on the financial
statements, as well as being complex and
requiring significant judgements, we identi-
fied IFRS 16 implementation as a significant
risk, which was one of the most significant
assessed risks of material misstatement.
46
ANNUAL REPORT AND ACCOUNTS 2019Independent 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
Management override of controls
Under ISA (UK) 240 ‘The Auditor’s
Responsibilities Relating to Fraud in an
Audit of Financial Statements’, for all of our
audits we are required to consider the risk
of management override of controls.
There is also a risk that users have
inappropriate access rights which allow
them to override controls. Due to the
unpredictable nature of this risk we are
required to assess it as a significant risk
and we identified it as one of the most
significant assessed risks of material
misstatement.
Our audit work included, but was not restricted to:
• Undertaking specific procedures relating to this risk that are required by ISA (UK)
240. This included profiling journal entries and focusing on unusual items. We tested
a sample of journal entries by tracing the journal entries to source documentation
and testing whether the journals were appropriately approved, posted to the correct
account codes and in the correct periods, and tested whether they were valid
transactions.
• Evaluating the key judgements and assumptions in management’s estimates and
testing for significant transactions outside the normal course of business.
• Undertaking detailed testing of related party transactions to understand the nature
of the transactions and movements from the prior year.
• Assessing the impact of heightened access rights in the accounting system over the
relevant controls identified in a number of business cycles. Re-assessing the audit
risk scoping over classes of transactions and account balances.
• Engaging our technology audit and forensic specialist teams to carry out detailed
testing of IT general / application controls over the accounting system and other
databases as well as testing relevant audit trails and audit logs.
• Undertaking additional audit procedures, including;
•
testing the manual reconciliations between other platforms and the accounting
system;
• additional substantive testing across revenue, expenditure and payroll transactions;
and
testing additional specific journal entries.
•
Key observations
We identified a significant deficiency in the design of user access rights as a number
of individuals in the finance team had heightened user access rights. Based on the
additional audit work performed we did not identify any material misstatements.
Key Audit Matter – Parent company
How the matter was addressed in the audit - Parent company
Impairment of investments
A significant, material balance on
the parent company’s statement of
financial position is investments in Group
undertakings of £186,137,000 as detailed
in Note 6 in the notes to the Company
financial statements. The recoverability of
these assets is dependent on expected
future cash flows from cash generating
units (CGUs).
Investments are subject to an impairment
test when there is an indication that
they may be impaired. The process for
measuring and recognising impairment
under IAS 36 is complex and judgemental.
We therefore identified impairment of
investments 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:
• Challenging the methodology and assumptions used by management in conducting
the impairment review. This also includes challenging management on their
identification of cash generating units with reference to the guidance set out in IAS 36.
• Comparing the recoverable amount of each of the cash generating units to the
carrying value of the investment held by the parent company.
• Testing the mathematical accuracy of the impairment calculations.
• Challenging the forecasts prepared by management 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 investments such as discount rates, long
term growth rates and sensitivities used by recalculating the discount rates and
benchmarking against industry data, where available.
• Evaluating the disclosures related to impairment tests.
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
We found no errors in the calculations we tested. Based on our audit work there
was significant headroom in the value in use calculation and hence we concur with
management’s assessment that there is no material impairment of investments.
47
ANNUAL REPORT AND ACCOUNTS 2019Independent 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
Parent company
Financial statements as a whole Materiality was set at £884,000, which was 0.5%
of the forecasted revenue at the planning stage of
the audit. This benchmark is considered the most
appropriate as it is a key performance indicator
used by the directors to report to investors on the
financial performance of the Group.
Materiality for the current year is lower than the level
determined for the year ended 31 December 2018 to
reflect the change in the applied benchmark from 3.5%
of adjusted EBITDA for the year ended 31 December
2018 to 0.5% of revenue for the current year.
Determining materiality involves the exercise of
professional judgement. Factors relating to where
the Group is in its life cycle and items on which
users attention is focused on has led to a change in
the benchmark to revenue.
Materiality was initially determined using 2%
of total assets, but was capped at £619,000,
which represents 70% of Group materiality,
being the materiality used for the parent
company as a component in the group
audit. 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.
Materiality for the current year is lower than
the level determined for the year ended 31
December 2018, which reflects the capping
at 70% of Group materiality, which was
lower this year.
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 directors’ remuneration and related
party transactions.
We have determined a lower level of specific
materiality for directors’ remuneration and
related party transactions.
Communication of
misstatements to the audit
committee
£44,200 and misstatements below that threshold
that, in our view, warrant reporting on qualitative
grounds.
£31,000 and misstatements below that
threshold that, in our view, warrant
reporting on qualitative grounds.
The graph below illustrates how performance materiality interacts with our overall materiality and the tolerance for potential
uncorrected misstatements.
Overall materiality – Group
Overall materiality – Parent
30%
30%
Tolerance for potential
uncorrected mis-statements
Performance materiality
70%
70%
48
ANNUAL REPORT AND ACCOUNTS 2019Independent Auditor’s Report to the Members of GlobalData Plc Independent Auditor’s Report
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 and implementation of 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 have been no significant changes to the scoping of the audit of the key components in the current year Group audit from the
scope of that of the prior year;
• The Group is predominately based within the UK and comprises a parent company and a number of UK components which are centrally
managed and controlled;
• There are a number of overseas components. The audit work on the financial information of the UK and overseas components in respect
of the group audit was performed by the Group audit team. We performed full scope audit procedures on the financial information
of components in the UK, USA and United Arab Emirates, as well as specified audit procedures on the financial information of other
components in the UK and in India; and
• Our Group audit scoping ensures we have attained coverage on full scope and specified audit procedures of 97% of Group revenues,
88% of Group profit before tax and 98% of Group total assets. The remaining balances were tested analytically using Group materiality.
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 37 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 pages 37 to 39 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 28 to 32 – the parts of the directors’
statement that would be 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) if the parent company was a
premium listed company do not properly disclose a departure from a relevant provision 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..
•
49
ANNUAL REPORT AND ACCOUNTS 2019Independent 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 43, 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.
Christopher Smith
Senior Statutory Auditor
for and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
London
2 March 2020
50
ANNUAL REPORT AND ACCOUNTS 2019Independent 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 expenses
Losses on trade receivables
Other expenses
Operating profit / (loss)
Analysed as:
Adjusted EBITDA1
Items associated with acquisitions and restructure of the Group
Other adjusting items
Adjustment for change in accounting policy (IFRS 16)
EBITDA2
Amortisation
Depreciation
Operating profit/ (loss)
Other income
Finance costs
Profit/ (loss) before tax from continuing operations
Income tax expense
Profit/ (loss) for the year from continuing operations
Loss for the year from discontinued operations
Profit/ (loss) for the year
Attributable to:
Equity holders of the parent
Non-controlling interest
Earnings/ (loss) per share attributable to equity holders from continuing
operations:
Basic profit/ (loss) per share (pence)
Diluted profit/ (loss) per share (pence)
Loss per share attributable to equity holders from discontinued operations:
Basic loss per share (pence)
Diluted loss per share (pence)
Total basic profit/ (loss) per share (pence)
Total diluted profit/ (loss) per share (pence)
The accompanying notes form an integral part of this financial report.
Notes
Year ended 31
December 2019
Year ended 31
December 2018
£000s
£000s
5
17
7
6
7
7
3
3
10
11
12
178,195
(106,751)
71,444
(26,262)
(2,278)
(29,315)
13,589
44,564
(2,307)
(10,735)
4,021
35,543
(17,147)
(4,807)
13,589
1,274
(4,692)
10,171
(3,187)
6,984
157,553
(98,153)
59,400
(27,094)
(1,983)
(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)
6,984
(12,327)
6,984
-
(12,434)
107
5.99
5.55
-
-
5.99
5.55
(10.17)
(10.17)
(1.14)
(1.14)
(11.31)
(11.31)
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, impact of foreign exchange contracts and the impact of IFRS16 (Leases). 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.
51
ANNUAL REPORT AND ACCOUNTS 2019 Consolidated Statement of Comprehensive Income
Profit/ (loss) for the year
Other comprehensive income
Items that will be classified subsequently to profit or loss:
Net exchange (losses)/ gains on translation of foreign entities
Items that will not be classified subsequently to profit or loss:
Re-measurement of pension liabilities and assets (note 26)
Other comprehensive (loss)/ gain, net of tax
Total comprehensive gain/ (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 2019
£000s
Year ended 31
December 2018
£000s
6,984
(12,327)
(7)
(1,315)
(1,322)
5,662
5,662
-
988
-
988
(11,339)
(11,446)
107
52
ANNUAL REPORT AND ACCOUNTS 2019 Consolidated Statement of Financial Position
Notes
31 December 2019
31 December 2018
£000s
£000s
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
Short-term lease liabilities
Current tax payable
Short-term derivative liabilities
Short-term provisions
Non-current liabilities
Long-term provisions
Deferred tax liabilities
Long-term lease 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
28
18
17
16
19
20
15
16
22
22
18
15
20
23
23
23
23
23
23
These financial statements were approved by the Board of Directors on 2 March 2020 and signed on its behalf by:
Bernard Cragg
Chairman
Mike Danson
Chief Executive
Company Number 03925319
The accompanying notes form an integral part of this financial report.
47,364
250,135
1,850
8,652
308,001
45,751
908
11,232
57,891
365,892
(96,036)
(6,000)
(3,910)
(1,897)
(101)
(90)
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)
(108,034)
(105,636)
(491)
(4,773)
(40,730)
(60,488)
(106,482)
(214,516)
151,376
184
725
(11,017)
(37,128)
163,810
791
34,011
151,376
(437)
(6,571)
-
(64,341)
(71,349)
(176,985)
150,426
184
200
(19,142)
(37,128)
163,810
798
41,704
150,426
53
ANNUAL REPORT AND ACCOUNTS 2019
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
Balance at 1 January 2018
173
200 (2,289)
(37,128)
66,481
(190)
56,744
83,991
-
83,991
£000s
£000s
£000s
£000s
£000s
£000s
£000s
£000s
£000s
£000s
(Loss)/ profit for the year
Other comprehensive income:
Net exchange gain 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
Excess deferred tax on share
based payments
Dividends
Share buy back
Share based payments
charge
Balance at 31 December 2018
Profit for the year
Other comprehensive income:
Re-measurement of pension
liabilities and assets
Net exchange loss on translation
of foreign entities
Total comprehensive profit for
the year
Transactions with owners:
Share buy back
Dividends
Vesting of share options
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
1,404
1,404
(9,110)
(9,110)
- (16,853)
-
-
97,340
1,404
-
(9,110)
- (16,853)
5,679
5,679
-
5,679
184
-
200 (19,142)
-
-
(37,128)
-
163,810
-
798
-
41,704 150,426
6,984
6,984
- 150,426
-
6,984
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(3,602)
-
525
11,727
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(7)
(7)
-
-
-
-
-
-
(1,315)
(1,315)
-
(7)
5,669
5,662
-
-
-
(1,315)
(7)
5,662
-
(3,602)
-
(3,602)
(14,590)
(14,590)
- (14,590)
(12,252)
-
11,016
11,016
2,464
2,464
-
-
-
-
-
11,016
2,464
151,376
Balance at 31 December 2019
184
725
(11,017)
(37,128)
163,810
791
34,011
151,376
The accompanying notes form an integral part of this financial report.
54
ANNUAL REPORT AND ACCOUNTS 2019
Consolidated Statement of Cash Flows
Cash flows from operating activities (continuing operations)
Profit/ (loss) for the year from continuing operations
Adjustments for:
Depreciation
Amortisation
Other Income
Finance costs
Taxation recognised in profit or loss
Share based payments charge
Payment to defined benefit pension scheme
Decrease in trade and other receivables
Increase/ (decrease) in trade and other payables
Revaluation of short and long-term derivatives
Movement in provisions
Cash generated from operating activities (continuing operations)
Interest paid (continuing operations)
Income taxes paid (continuing operations)
Net cash from operating activities (continuing operations)
Net decrease in cash and cash equivalents from discontinued operations
Total cash flows from operating activities
Cash flows from investing activities (continuing operations)
Acquisitions
Purchase of property, plant and equipment
Purchase of intangible assets
Net cash used in investing activities (continuing operations)
Net decrease in cash and cash equivalents from discontinued operations
Total cash flows used in investing activities
Cash flows from financing activities (continuing operations)
Repayment of borrowings
Proceeds from borrowings
Principal elements of lease payments
Loan fees
Acquisition of own shares
Dividends paid
Total cash used in financing activities (continuing operations)
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Effects of currency translation on cash and cash equivalents
Cash and cash equivalents at end of year
The accompanying notes form an integral part of this financial report.
Year ended
31 December 2019
Year ended
31 December 2018
£000s
£000s
6,984
(11,072)
4,807
17,147
(1,274)
4,692
3,187
11,016
(1,315)
6,607
2,769
(1,686)
(584)
52,350
(3,014)
(7,797)
41,539
-
41,539
(8,132)
(1,560)
(1,058)
(10,750)
-
(10,750)
(10,500)
6,425
(3,557)
-
(3,602)
(14,590)
(25,824)
4,965
6,268
(1)
11,232
742
21,587
-
2,487
3,408
5,679
-
1,606
(729)
1,150
200
25,058
(2,173)
(2,255)
20,630
(912)
19,718
(4,607)
(724)
(890)
(6,221)
(235)
(6,456)
(14,408)
30,473
-
(285)
(16,853)
(9,110)
(10,183)
3,079
2,952
237
6,268
55
ANNUAL REPORT AND ACCOUNTS 2019 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 the provision of high quality proprietary data, analytics,
and insights to clients across 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.
In 2019 the Group has adopted new guidance for the recognition of leases (see note 3). The new standard has been applied using the
“modified retrospective” transition approach. There is no adjustment to the opening balance of retained earnings for the current period
however reclassifications arising from the new standard have been recognised in the opening balances as at 1 January 2019. Prior periods
have not been restated, as permitted under the specific transitional provisions in the standard. Accordingly the Group is not required to
present a third statement of financial position as at that date.
Critical accounting estimates and judgements
The Group makes estimates and assumptions regarding the future. Estimates and judgements are continually evaluated based on historical
experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
In the future, actual experience may deviate from these estimates and assumptions. The estimates and assumptions that have a significant
risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed in detail
below.
Key sources of estimation 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 £10m 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.
56
ANNUAL REPORT AND ACCOUNTS 2019Notes to the Consolidated Financial Statements
Taxation
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 24.
The Group has recognised an accrual of £1.0m in its financial statements in relation to the Wayfair sales tax ruling. On 21 June 2018, The
United States Supreme Court ruled that states can mandate that businesses without a physical presence collect and remit sales taxes on
transactions in the state. The accrual represents sales tax not collected and remitted and an estimate of associated penalties and interest.
Share based payments
The Group operates two share based compensation plans 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:
• Scheme 1: 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 forecasted EBITDA.
• Scheme 2: the fair value at the date of grant which is determined by using the Monte Carlo model and the senior management retention
rate which is determined with reference to historical churn. The use of the Monte Carlo model and calculation of the associated input
parameters requires judgement, therefore management obtained professional advice to assist in determining the fair value of the
awards granted.
Additional disclosures on the calculation of share based payments are provided in note 24.
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 a specific basis with reference to 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. In addition, the Group recognises lifetime expected
credit losses for trade receivables which are estimated based on the Group’s historical credit loss experience, adjusted for factors that are
specific to the trade receivables, general economic conditions and an assessment of both the current as well as the forecast direction of
conditions at the reporting date. 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.
Lease accounting – incremental borrowing rate
IFRS 16 “Leases” requires lease payments to be discounted using the lessee’s incremental borrowing rate. The Group’s incremental borrowing
rate, as at the date of adoption of IFRS 16, has been based on the existing revolving credit facility margin (2.75% as at 1 January 2019) plus
a local government bond yield (comparable to the lease term remaining and hence specific to each lease) less a secured loan discount of
0.5% (India being the exception where no secured loan discount has been assumed). Management have taken the view that specific costs
of borrowing should be applied to each lease as this reflects the different economic conditions within each geography and hence is more
representative of the funding facilities available in those countries.
57
ANNUAL REPORT AND ACCOUNTS 2019Notes to the Consolidated Financial Statements 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. Data, analytics and insight is provided to customers via multiple
channels by a dedicated content team that is centrally managed by Research Directors who report directly to the Executive Directors. Data,
analytics and insight is therefore considered to be the operating segment of the Group.
Defined benefit pension
As part of the acquisition of Research Views Limited and its subsidiaries, the Group acquired a defined benefit pension scheme. As at
31 December 2019 the defined benefit obligation was equal to the fair value of the plan assets. On 16 December 2019 the Group entered
into an irrevocable agreement to sell the pension scheme to Just Retirement Limited (“Just”). The agreement involved the purchase of a
qualifying insurance policy pre year end at a cost to GlobalData Plc of £1.3m. This has been measured at the amount of the related defined
benefit obligation as required by IAS 19. Final buy-out is expected to take place within six to 12 months. Management have considered the
accounting options available and believe that the buy-in represents an asset transaction. As such, the re-measurement cost has been
recognised within the statement of comprehensive income.
Allocation of Cash-Generating-Units
IAS 36 ‘Impairment of Assets’ requires that assets be carried on the statement of financial position at no more than their recoverable
amount. An asset or cash-generating unit (CGU) is the smallest identifiable group of assets that generates cash inflows and is impaired
when its carrying amount exceeds its recoverable amount. The CGUs that management have identified are all part of the data, analytics,
and insights segment, which can all be traced back to acquisitions over recent years and for which management are still able to identify
specific cash flows.
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. There have been no breaches of covenants
in the year ended 31 December 2019. 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 in operation and meet its liabilities as they fall due for the foreseeable future, being a period of at least 12 months from the date of
approval of the financial statements. Accordingly, the Group has prepared the annual report and financial statements on a going concern
basis.
58
ANNUAL REPORT AND ACCOUNTS 2019Notes to the Consolidated Financial Statements 2. ACCOUNTING POLICIES
a) Basis of consolidation
The consolidated financial statements include the accounts of the Company and all of its subsidiary undertakings.
• Subsidiaries are those entities controlled by the Group. Control exists when the Group is exposed, or has rights, to variable returns
from its involvement with the investee and has the ability to affect those returns through its power over the investee. The financial
statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date
that control ceases.
Intra-group transactions, balances and unrealised gains on transactions between Group companies are eliminated. Where necessary,
accounting policies of subsidiaries have been changed to ensure consistency with the Group’s accounting policies.
•
• The results and cash flows relating to a business are included in the consolidated income statement and the consolidated statement of
cash flows from the date of acquisition or are excluded from the date of disposal as appropriate.
b) Business combinations
The Group applies the acquisition method in accounting for business combinations. The consideration transferred by the Group to obtain
control of a subsidiary is calculated as the sum of the acquisition-date fair values of assets transferred, liabilities incurred and the equity
interests issued by the Group, which includes the fair value of any asset or liability arising from a contingent consideration arrangement.
Acquisition costs are expensed as incurred. Assets acquired and liabilities assumed are generally measured at their acquisition-date fair
values.
c) Discontinued operations
A discontinued operation is a component of the Group that either has been disposed of, or is classified as held for sale. Profit or loss from
discontinued operations comprises the post-tax profit or loss of discontinued operations and the post-tax gain or loss recognised on the
measurement to fair value less costs to sell or on the disposal group(s) constituting the discontinued operation.
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 revenue”, on the statement of financial position. Revenue is recognised evenly over
the period of the contractual term as the performance obligations are satisfied evenly over the term of subscription.
• 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 different contractual obligation within the series 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. Similarly, if the Group satisfies a performance obligation before it receives the consideration or is contractually
due the Group recognises a contract asset within accrued income in the statement of financial position.
The Group has recognised the incremental costs (for example commission) of obtaining sales contracts as an expense when incurred given
the amortisation period of the contract revenue is one year or less.
59
ANNUAL REPORT AND ACCOUNTS 2019Notes to the Consolidated Financial Statements
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 three to five years
• Leasehold improvements – over three to ten years
The useful life, the residual value and the depreciation method are reassessed at each reporting date.
Where there is an indication of impairment, the carrying value of the property, plant and equipment is compared to the higher of value in use
and the fair value less costs to sell. If the carrying value exceeds the higher of the value in use and fair value less the costs to sell the asset
then the asset is impaired and its value reduced.
f) Intangible assets
Goodwill
Goodwill is recognised to the extent that it arises through a business combination and represents the difference between the consideration
transferred and the fair value of net identifiable assets acquired.
Goodwill is stated at cost less any accumulated impairment losses. Goodwill is allocated to appropriate cash generating units (those
expected to benefit from the business combination) and is tested annually for impairment. In testing for impairment, the recoverable
amount of a CGU based on value-in-use calculations is compared to the carrying value of goodwill. These calculations use post-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 56. Intangible assets are amortised on a straight-line basis over their estimated useful lives of three to 15 years for
brands, customer relationships and IP rights. Amortisation and 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 three years. Costs associated with implementing or maintaining computer software
programmes are recognised as an expense. Amortisation and impairment charges are accounted for within the administrative costs
category within the income statement.
Impairment of intangible assets
Goodwill is not subject to amortisation but is reviewed for impairment annually or whenever events or changes in circumstances indicate
that the carrying amount may not be recoverable. Intangible 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).
60
ANNUAL REPORT AND ACCOUNTS 2019Notes to the Consolidated Financial Statements g) Taxation
Tax expense recognised in the income statement for the year comprises the sum of current and deferred tax.
Current tax is the expected tax payable on the taxable income for the year, using rates substantively enacted at the reporting date, and any
adjustments to the tax payable in respect of previous years.
Deferred taxation is provided in full on temporary differences between the carrying amount of the assets and liabilities in the financial
statements and the tax base. Deferred tax assets are recognised only to the extent that it is probable that future taxable profits will be
available against which the temporary difference can be utilised. Deferred tax is determined using the tax rates that have been enacted or
substantially enacted by the reporting date, and are expected to apply when the deferred tax liability is settled or the deferred tax asset is
realised.
Deferred tax is provided on temporary differences arising on investments in subsidiaries except where the timing of the reversal of the
temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred tax is not provided on temporary differences arising on the initial recognition of goodwill or on assets and liabilities other than in
a business combination.
Tax is recognised in the income statement, except where it relates to items recognised as other comprehensive income, in which case it is
recognised in the statement of other comprehensive income, and tax which related to items recognised in equity is recognised in equity.
h) Foreign currencies
The results are presented in Pounds Sterling (£) which is the presentation currency of the Company and Group.
Foreign currency transactions are translated into Sterling at the rates of exchange ruling at the date of the transaction, and if still in
existence at the year end the balance is retranslated at the rates of exchange ruling at the reporting date. Differences arising from changes
in exchange rates during the year are taken to the income statement.
The assets and liabilities of entities with a functional currency other than Sterling are expressed in Sterling using exchange rates prevailing
on the reporting date. Income and expense items and cash flows are translated at the average exchange rates for the period and exchange
differences arising are recognised in other comprehensive income. Additionally, opening reserves of entities with a functional currency
other than Sterling are stated at the rate prevalent at the date of acquisition and differences arising are recognised in other comprehensive
income. Such translation differences are recognised in the income statement in the period in which a foreign operation is disposed of.
i) Pensions
The Group 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.
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.
61
ANNUAL REPORT AND ACCOUNTS 2019Notes to the Consolidated Financial Statements k) Leases
As described in note 1, the Group has applied IFRS 16 using the modified retrospective approach with effect from 1 January 2019 and
therefore comparative information has not been restated. Comparative information is therefore still reported under IAS 17 and IFRIC 4.
The Group leases offices around the world. Rental contracts are typically made for fixed periods but may have termination options. Lease
terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease arrangements do not
impose any covenants, but leased assets may not be used as security for borrowing purposes.
Accounting policy applicable before 1 January 2019:
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.
Accounting policy applicable from 1 January 2019:
For any new contracts entered into on or after 1 January 2019, the Group considers whether a contract is, or contains a lease. A lease is
defined as ‘a contract, or part of a contract, that conveys the right to use an asset (the underlying asset) for a period of time in exchange for
consideration’. To apply this definition the Group assesses whether the contract meets the following criteria:
• The contract contains an identified asset, which is either explicitly identified in the contract or implicitly specified by being identified at
the time the asset is made available to the Group
• The Group has the right to obtain substantially all of the economic benefits from use of the identified asset throughout the period of use,
considering its rights within the defined scope of the contract
• The Group has the right to direct the use of the identified asset throughout the period of use.
At the lease commencement date, the Group recognises the lease as a right-of-use asset and a corresponding liability on the statement of
financial position. The right-of-use assets have been included in property, plant and equipment.
The right-of-use asset is measured at cost, which is made up of the initial measurement of the lease liability, any initial direct costs incurred
by the Group, an estimate of any costs to dismantle and remove the asset at the end of the lease and any lease payments made in advance
of the lease commencement date (net of any incentives received).
The Group depreciates the right-of-use assets on a straight line basis from the lease commencement date to the earlier of the end of the
useful life of the right-of-use asset or the end of the lease term. The Group also assesses the right-of-use asset for impairment when such
indicators exist.
At the commencement date, the Group measures the lease liability at the present value of the lease payments unpaid at that date, discounted
using the interest rate implicit in the lease if that rate is readily available, or the lease specific incremental borrowing rate. Subsequent to
initial measurement, the liability will be reduced for payments made and increased for interest. Each lease payment is allocated between
the liability and finance cost. The finance cost is charged to the income statement over the lease period so as to produce a constant
periodic rate of interest on the remaining balance of the liability for each period. The liability is remeasured to reflect any reassessment
or modification, or if there are changes in in-substance fixed payments. When the liability is remeasured, the corresponding adjustment is
reflected in the right-of-use asset, or the income statement if the right-of-use asset is already reduced to zero.
Termination options are included in a number of property leases across the Group. These options are used to maximise operational flexibility
in terms of managing contracts. In determining the lease term, management considers all facts and circumstances that create an economic
incentive to exercise a termination option. Periods after termination options are only included in the lease term if the termination option is
reasonably certain not to be exercised.
The Group has elected to account for short term leases and leases of low-value assets using the practical expedients. Payments associated
with short term leases and leases of low-value assets are recognised on a straight line basis as an expense in the income statement. Short
term leases are leases with a term of 12 months or less. Low-value assets comprise IT and copying equipment with a value of less than
£5,000.
The Group sub-leases a number of properties in the UK, however all of the risks and rewards of ownership have not been transferred to the
lessee and therefore the Group recognises the head lease asset as a right-of-use asset and recognises the rental income on the sub-lease
operating lease contracts as other income.
62
ANNUAL REPORT AND ACCOUNTS 2019Notes to the Consolidated Financial Statements l) Financial instruments
The Group has derivative and non-derivative financial instruments which comprise foreign currency contracts, receivables, cash, loans and
borrowings and trade payables.
Recognition and derecognition
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the financial
instrument. Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire, or when
the financial asset and substantially all the risks and rewards are transferred. A financial liability is derecognised when it is extinguished,
discharged, cancelled or expires.
Classification and initial measurement of financial assets
Except for those trade receivables that do not contain a significant financing component and are measured at the transaction price in
accordance with IFRS 15, all financial assets are initially measured at fair value adjusted for transaction costs (where applicable).
In the periods presented, all of the Group’s non-derivative financial assets are classified as amortised cost. Financial assets are measured at
amortised cost if the assets meet the following conditions:
•
•
they are held within a business model whose objective is to hold the financial assets and collect its contractual cash flows
the contractual terms of the financial assets give rise to cash flows that are solely payments of principal and interest on the principal
amount outstanding
After initial recognition, these are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of
discounting is immaterial. The Group’s cash and cash equivalents, trade and other receivables fall into this category of financial instruments.
Classification and initial measurement of financial liabilities
Financial liabilities are initially measured at fair value, and, where applicable, adjusted for transaction costs unless the Group designated a
financial liability at fair value through profit or loss.
Cash
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.
Receivables
Financial assets are assessed for indicators of impairment at each reporting date. Financial assets are impaired where there is objective
evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash
flows of the investment have been negatively impacted.
A specific provision will be raised for trade receivables when there is objective evidence that the Group will not be able to collect all amounts
due according to the original terms of the receivables. Significant financial difficulties of the debtor, probability that the debtor will enter
bankruptcy or financial reorganisation, and default or delinquency in payments are considered indicators that the trade receivable is
impaired.
In determining the provision, the Group also applies the IFRS 9 simplified approach to measuring expected credit losses (ECL) which uses
a lifetime expected loss allowance for all trade receivables. The ECL on these financial assets are estimated based on the Group’s historical
credit loss experience, adjusted for factors that are specific to the trade receivables, general economic conditions and an assessment of
both the current as well as the forecast direction of conditions at the reporting date.
For financial assets carried at amortised cost, the amount of the impairment is the difference between the asset’s carrying amount and the
present value of estimated future cash flows, discounted at an effective interest rate.
When a trade receivable is considered uncollectible, it is written off against the provision account. Subsequent recoveries of amounts
previously written off are credited against the provision account. Changes in the carrying amount of the provision are 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.
63
ANNUAL REPORT AND ACCOUNTS 2019Notes to the Consolidated Financial Statements m) Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is determined using a weighted average method.
n) 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.
o) Share based payments
The Group operates two share based compensation plans under which the entity receives services from employees as consideration for
equity instruments (options) of the Group. The fair value of the employee services received in exchange for the grant of the options and
awards is recognised as an expense in the income statement. The total amount to be expensed is determined by reference to the fair value
of the options granted (fair value at the date of grant determined using the Black-Scholes model for scheme 1 and the Monte Carlo method
for scheme 2), excluding the impact of any non-market service and performance vesting conditions (for example, profitability, sales growth
targets and remaining an employee of the entity over a specified time period). 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.
p) 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.
q) Equity
Share capital is determined using the nominal value of shares that have been issued. Premiums received on the initial issuing of share
capital are credited to share premium account. Any transaction costs associated with the issuing of shares are deducted from share
premium, net of any related income tax benefits.
Retained earnings includes all current and prior period results as disclosed in the income statement.
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.
s) Other Income
Other income represents rental income on sub-lease property contracts.
64
ANNUAL REPORT AND ACCOUNTS 2019Notes to the Consolidated Financial Statements 3. NEW OR REVISED STANDARDS OR INTERPRETATIONS
This report has been prepared based on the accounting policies detailed in the Group’s financial statements for the year ended 31 December
2019 and is consistent with the policies applied in the previous year, except for the new standard now effective, IFRS 16.
a) New Standards adopted as at 1 January 2019
IFRS 16 ‘Leases’
This note explains the impact of the adoption of IFRS 16 ‘Leases’ on the Group’s financial statements and discloses the new accounting
policy that has been applied from 1 January 2019.
IFRS 16 replaces IAS 17 ‘Leases’ along with three Interpretations (IFRIC 4 ‘Determining whether an Arrangement contains a lease’, SIC 15
‘Operating Leases-Incentives’ and SIC 27 ‘Evaluating the Substance of Transactions Involving the Legal Form of a Lease’).
The adoption of this new Standard has resulted in the Group recognising a right-of-use asset and related liability in connection with all
former operating leases with the exception of those identified as low-value or having a remaining lease term of less than 12 months from
the date of initial application.
The new standard has been applied using the “modified retrospective” transition approach. There is no adjustment to the opening balance
of retained earnings for the current period however reclassifications arising from the new standard have been recognised in the opening
balances as at 1 January 2019. Prior periods have not been restated, as permitted under the specific transitional provisions in the standard.
For contracts in place at 1 January 2019, the Group has elected to apply the definition of a lease from IAS 17 and IFRIC 4 and has not applied
IFRS 16 to arrangements that were previously not identified as leases under IAS 17 and IFRIC 4.
The Group has elected to measure the right-of-use assets at 1 January 2019 at an amount equal to the lease liability, adjusted for any
prepaid or accrued lease payments that existed at the date of transition. The liabilities were measured at the present value of the remaining
lease payments, discounted using the weighted average incremental borrowing rate, ranging between 2.0% and 7.4% based on the length
of the remaining lease.
On transition, for leases previously accounted for as operating leases with a remaining lease term of less than 12 months and for leases of
low-value assets the Group has applied the optional exemptions to not recognise right-of-use assets but to account for the lease expense
on a straight-line basis over the remaining lease term.
The Group has benefited from the use of hindsight for determining the lease term when considering options to extend and terminate leases.
The following is a reconciliation of total operating lease commitments at 31 December 2018 (as disclosed in the financial statements to 31
December 2018) to the lease liabilities recognised at 1 January 2019:
Total operating lease commitments disclosed at 31 December 2018
Recognition exemptions at 1 January 2019:
- Leases with remaining lease term of less than 12 months
Leases committed to at 31 December 2018 but not commenced at 1 January 2019
Commitments not meeting the definition of a right-of-use asset
Operating lease liabilities before discounting
Discounted using incremental borrowing rate
Operating lease liabilities
Reasonably certain extension options - discounted
Total lease liabilities recognised under IFRS 16 at 1 January 2019
Of which are:
- Current lease liabilities
- Non-current lease liabilities
£000s
41,684
(1,789)
(1,915)
(26)
37,954
(5,792)
32,162
3,923
36,085
2,428
33,657
65
ANNUAL REPORT AND ACCOUNTS 2019Notes to the Consolidated Financial Statements
At 1 January 2019 the recognised right-of-use assets all relate to Property. Instead of performing an impairment review on the right-of-
use assets at the date of initial application, the Group has relied on its historic assessment as to whether leases were onerous immediately
before the date of initial application of IFRS 16. This assessment identified one onerous lease contract requiring an adjustment to the right-
of-use asset at the date of initial application.
The Group sub-leases a number of properties in the UK, however all of the risks and rewards of ownership have not been transferred to the
lessee and therefore the Group recognises the head lease asset as a right-of-use asset and recognises the rental income on the sub-lease
operating lease contracts as other income.
The adoption of IFRS 16 has impacted the following items:
Impact on Statement of Financial Position
As at 1 January 2019 As at 31 December 2019(1)
Gross right-of-use assets and lease liabilities
Adjustment for onerous lease provision
Prepaid rent
Accrued rent
Right-of-use assets and lease liabilities(2)
Provisions
Prepayments
Accruals
Total impact on assets/ (liabilities)
Assets
£000s
36,085
(50)
-
-
36,035
-
(506)
-
35,529
Liabilities
£000s
(36,085)
-
506
(60)
(35,639)
50
-
60
(35,529)
Assets
£000s
44,767
(22)
-
-
44,745
-
(540)
-
44,205
Liabilities
£000s
(45,093)
-
540
(87)
(44,640)
22
-
87
(44,531)
(1) Balances as at 31 December 2019 are inclusive of leases commencing in the 12 months to 31 December 2019
(2) As presented in the consolidated statement of financial position
66
ANNUAL REPORT AND ACCOUNTS 2019Notes to the Consolidated Financial Statements The adoption of IFRS 16 on 1 January 2019 had a nil impact on the net assets of the Group due to applying the modified retrospective
approach: assets = liabilities. As at 31 December 2019 lease liabilities of £44.6m do not match the value of the right-of-use assets due to the
depreciation charge in the period being lower than the lease repayments (net of interest charges) and the allocation of rent prepayments
and accruals to the liabilities.
A reconciliation of the value of right-of-use assets and lease liabilities from 1 January 2019 to 31 December 2019 is presented below:
Right-of-use assets and lease liabilities as at 1 January 2019
Additions (note 14)
Disposals (note 14)
Depreciation (note 14)
Foreign currency retranslation
Lease interest (note 10)
Lease payments (note 20)
Dilapidation costs recognised within provisions (note 22)
Increase in rent prepayments
Increase in rent accruals
Right-of-use
assets
£000s
36,035
12,724
(61)
(4,008)
55
-
-
-
Lease
liabilities
£000s
(35,639)
(12,724)
64
-
7
(1,543)
4,801
387
34
(27)
Right-of-use assets and lease liabilities as at 31 December 2019
44,745
(44,640)
Current lease liabilities
Non-current lease liabilities
Total lease liabilities as at 31 December 2019
Impact on Income Statement:
Administrative costs(1)
Impact on EBITDA
Depreciation
Sub-lease income
Finance costs
Impact on Profit before tax
Gain/
(Cost)
Gain
(Cost)
Gain
(Cost)
(Cost)
(3,910)
(40,730)
(44,640)
12 months to 31
December 2019
£000s
4,021
4,021
(4,008)
1,274
(1,543)
(256)
(1) Net rental costs and dilapidation provision charges no longer charged through Administrative expenses
Prior to the adoption of IFRS 16 rental payments were charged to the income statement on a straight-line basis net of rental income
received on sub-lease contracts. Under IFRS 16 rental charges in the income statement are replaced with depreciation on the right-of-
use asset and interest charges on the lease liability. The adoption of IFRS 16 therefore gives rise to a net cost of £0.3m in the 12 months
to 31 December 2019, reflecting depreciation and interest charges of £5.6m being £0.3m higher than the net rental charges which would
have been incurred prior to the adoption of the new standard. At EBITDA level, the adoption of IFRS 16 gives a benefit of £4.0m being the
elimination of the rental charges, net of the rental income. The effect on earnings per share as at 31 December 2019 is a reduction of less
than 0.22 pence.
67
ANNUAL REPORT AND ACCOUNTS 2019Notes to the Consolidated Financial Statements
In applying IFRS 16 for the first time, the Group has used the following practical expedients permitted by the standard:
• Reliance on historic assessments as to whether leases are onerous
• Account for operating leases with a remaining lease term of less than 12 months as at 1 January 2019 as short term leases and expense
on a straight line basis over the remaining lease term
• Account for leases of low value assets on a straight line basis and not recognise as a right-of-use asset
• Exclusion of initial direct costs for the measurement of the right-of-use asset at the date of initial application
• The use of hindsight in determining the lease term where the contract contains options to extend or terminate the lease.
Termination options are included in a number of property leases contracts across the Group. Management have assumed that no termination
options will be taken. Variable lease payments (fixed annual percentage increases) are also included in a number of leases. Management
have factored these future lease cash flows into the valuation of the lease liability and right-of-use asset.
b) 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:
• 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)
Neither 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.
4. SEGMENTAL ANALYSIS
The principal activity of GlobalData Plc and its subsidiaries (together ‘the Group’) is to provide high quality proprietary data, analytics, and
insights to clients across 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. Data, analytics and insight 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. Data,
analytics and insight is therefore considered to be the operating segment of the Group.
The performance of the data, analytics, and insights segment is presented to the Executive Directors on a monthly basis, which assists
the Board in their strategic decision making. Performance of the business is mainly assessed by reference to analysing the performance of
individual sales teams which guides operational decision making. The product cost is managed and assessed independently and outside of
the sales reviews, however the overall performance of the Group is reviewed on a Group wide basis, all of which falls under the segment of
data, analytics, and insights. Margins are only considered at Group level.
A reconciliation of Adjusted EBITDA to profit/ (loss) before tax from continuing operations is set out below:
Data, analytics, and insights
Total Revenue
Adjusted EBITDA
Other expenses (see note 7)
Depreciation
Amortisation (excluding amortisation of acquired intangible assets)
Other income
Effect of change in accounting policy – IFRS16
Finance costs
Profit/ (loss) before tax from continuing operations
Other income is amounts received on sub-let properties capitalised under IFRS16.
68
Year ended 31
December 2019
Year ended 31
December 2018
£000s
178,195
178,195
44,564
(29,315)
(4,807)
(874)
1,274
4,021
(4,692)
10,171
£000s
157,553
157,553
32,230
(35,500)
(742)
(1,165)
-
-
(2,487)
(7,664)
ANNUAL REPORT AND ACCOUNTS 2019Notes to the Consolidated Financial Statements Geographical analysis
Our primary geographical markets are serviced by our global sales teams which are organised as Europe, US and Asia Pacific by virtue of the
team location. The below disaggregated revenue is derived from the geographical location of our customer rather than the team structure
the Group is organised by.
From continuing operations
Year ended 31 December 2019
UK
Europe
Americas1
Asia Pacific
MENA2
Rest of World
Revenue from external customers
£000s
27,658
£000s
49,424
£000s
62,035
£000s
17,674
£’000
14,997
£000s
6,407
Total
£000s
178,195
Year ended 31 December 2018
UK
Europe
Americas1
Asia Pacific
MENA2
Rest of World
Total
£000s
£000s
£000s
£000s
£000s
£000s
£000s
Revenue from external customers
25,322
42,848
54,263
14,967
14,662
5,491
157,553
1 Americas includes revenue to the United States of America of £58.5m (2018: £51.4m)
2 Middle East & North Africa
Intangible assets held in the US and Canada were £21.5m (2018: £23.2m), of which £19.7m related to Goodwill (2018: £18.1m). Intangible
assets held in the UAE were £15.9m (2018: £17.5m) of which £11.4m related to Goodwill (2018: £11.4m). All other non-current assets are held
in the UK. The largest customer represented less than 2% of the Group’s consolidated revenue.
69
ANNUAL REPORT AND ACCOUNTS 2019Notes to the Consolidated Financial Statements 5. 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 months) is normally received at the beginning of the services and is
therefore recognised as a contract liability, “invoiced forward revenue”, on the statement of financial position. Revenue is recognised evenly
over the period of the contractual term as the performance obligations are satisfied evenly over the term of subscription.
The revenue on services delivered at a point in time is recognised when our contractual obligation is satisfied, such as delivery of a static
report or delivery of an event. The obligation on these types of contracts is a discrete obligation, which once met satisfies the Group
performance obligation under the terms of the contract.
Any invoiced contracted amounts which are still subject to performance obligations and where the payment has been received or is
contractually due, is recognised within 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. Similarly, if the Group satisfies a performance obligation
before it receives the consideration or is contractually due the Group recognises a contract asset within accrued income in the statement
of financial position.
Revenue recognised in the Consolidated
Income Statement
Invoiced Forward Revenue recognised within the
Consolidated Statement of Financial Position
Year ended 31
December 2019
£000s
Year ended 31
December 2018
£000s
138,945
39,250
178,195
116,807
40,746
157,553
As at 31
December 2019
As at 31
December 2018
£000s
57,527
11,084
68,611
£000s
55,490
11,670
67,160
Services transferred:
Over a period of time
Immediately on delivery
Total
As subscriptions are typically for periods of 12 months the majority of invoiced forward revenue held at 31 December will be recognised in
the income statement in the following year. As at 31 December 2019 £0.8m (2018: £1.1m) of the invoiced forward revenue balance will be
recognised beyond the next 12 months.
In instances where the Group enters into transactions involving a range of the Group’s services, for example a subscription and custom
research, the total transaction price for a contract is allocated amongst the various performance obligations based on their relative stand-
alone selling prices.
70
ANNUAL REPORT AND ACCOUNTS 2019Notes to the Consolidated Financial Statements 6. OPERATING PROFIT/ (LOSS)
Operating profit/ (loss) is stated after the following expenses relating to continuing operations:
Depreciation of property, plant and equipment
Amortisation of intangible assets
Loss on foreign exchange
Operating lease expense – land and buildings
Operating lease expense – other
Auditor’s remuneration
Auditor’s remuneration:
Year ended 31
December 2019
Year ended 31
December 2018
£000s
4,807
17,147
1,008
1,126
18
576
£000s
742
21,587
365
4,746
41
383
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 – scheme 1
Share based payments charge – scheme 2
Revaluation of short and long-term derivatives
Unrealised operating foreign exchange loss
Amortisation of acquired intangibles
Total other expenses
Year ended 31 December 2019
Year ended 31 December 2018
£000s
104
424
45
3
576
£000s
83
263
34
3
383
Year ended 31
December 2019
Year ended 31
December 2018
£000s
763
1,544
2,307
10,882
134
(1,686)
1,405
16,273
29,315
£000s
3,661
3,181
6,842
5,679
-
1,150
1,407
20,422
35,500
Over the past three years the Group has undergone significant M&A activity, particularly the acquisition of Research Views Limited in 2018,
therefore costs associated with the M&A have been adjusted from Adjusted EBITDA.
Furthermore, the Group’s M&A and expansion meant the Group underwent some significant restructuring, principally as a result of the
Research Views Limited acquisition, 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 charges relate to the share option schemes (see note 24).
• 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 16.
• Unrealised operating foreign exchange losses relate to non-cash exchange losses made on operating items.
71
ANNUAL REPORT AND ACCOUNTS 2019Notes 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 24)
Year ended 31
December 2019
Year ended 31
December 2018
£000s
89,586
6,214
1,630
11,016
£000s
90,218
5,200
1,208
5,679
108,446
102,305
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:
Researchers and analysts
Sales and admin
9. KEY MANAGEMENT COMPENSATION
Short-term employee benefits
Long-term employee benefits
Share based payments
Year ended 31
December 2019
Year ended 31
December 2018
No.
2,507
788
3,295
No.
2,400
919
3,319
Year ended 31
December 2019
Year ended 31
December 2018
£000s
3,338
102
1,290
4,730
£000s
2,812
76
1,113
4,001
Long-term employee benefits comprise of payments made into the employee’s defined contribution pension schemes.
Information regarding Directors’ remuneration, share options and bonuses are set out in the Directors’ Remuneration Report on pages 40
to 42.
10. FINANCE INCOME AND COSTS
Bank interest
Loan interest
Lease interest
Other interest
72
Year ended 31
December 2019
Year ended 31
December 2018
£000s
(7)
3,112
1,543
44
4,692
£000s
76
2,514
-
(103)
2,487
ANNUAL REPORT AND ACCOUNTS 2019Notes 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
Other short term timing differences
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 expense in income statement
The tax charge is reconciled to the standard corporation tax rate applicable in the UK as follows:
Profit/ (loss) on ordinary activities before tax
Tax at the UK corporation tax rate of 19% (2018: 19%)
Effects of:
Adjustments in respect of prior years
Adjustments in respect of prior years – share based payments
Withholding tax not recoverable
Income not taxable
Timing differences for which deferred tax is not provided
Movement in deferred tax not recognised
Permanent difference on IFRS2 charge
Tax adjustment relating to IFRS2 dealt with through the OCI
Expenses not deductible for tax
Overseas tax not at standard rate
Change in deferred tax rate
Change in corporate tax rate
Year ended
31 December 2019
Year ended
31 December 2018
£000s
£000s
(5,181)
(67)
(5,248)
8
2,230
103
(1,355)
-
1,434
(359)
2,061
(3,187)
(4,379)
56
(4,323)
(281)
3,126
-
(1,878)
(214)
(107)
269
915
(3,408)
Year ended
31 December 2019
Year ended
31 December 2018
£000s
10,171
(1,932)
(426)
-
(455)
278
-
(106)
(210)
1,144
(435)
(586)
(459)
-
£000s
(7,664)
1,456
324
(1,031)
-
1,178
17
(2,624)
(139)
-
(1,711)
(664)
-
(214)
(3,187)
(3,408)
73
ANNUAL REPORT AND ACCOUNTS 2019Notes to the Consolidated Financial Statements
12. EARNINGS PER SHARE
The calculation of the basic earnings per share is based on the earnings attributable to ordinary shareholders of the parent company divided
by the weighted average number of shares in issue during the year. The Group also has share options schemes in place and therefore the
Group has calculated the dilutive effect of these options. The below table shows earnings per share for both continuing and discontinued
operations:
Year ended
31 December 2019
Year ended
31 December 2018
Continuing operations
Basic
Profit/ (loss) for the period attributable to ordinary shareholders (£000s)
Less: non-controlling interest
Profit/ (loss) for the period attributable to ordinary shareholders of the parent company
(£000s)
Weighted average number of shares (000s)
Basic profit/ (loss) per share (pence)
Diluted
Profit/ (loss) for the period attributable to ordinary shareholders (£000s)
Less: non-controlling interest
Profit/ (loss) for the period attributable to ordinary shareholders of the parent company
(£000s)
Weighted average number of shares* (000s)
Diluted profit/ (loss) per share (pence)
Discontinued operations
Basic
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 of the parent company (£000s)
Weighted average number of shares* (000s)
Diluted loss per share (pence)
Total
Basic
Profit/ (loss) for the period attributable to ordinary shareholders (£000s)
Less: non-controlling interest
Profit/ (loss) for the period attributable to ordinary shareholders of the parent company
(£000s)
Weighted average number of shares (000s)
Basic profit/ (loss) per share (pence)
Diluted
Profit/ (loss) for the period attributable to ordinary shareholders (£000s)
Less: non-controlling interest
Profit/ (loss) for the period attributable to ordinary shareholders of the parent company
(£000s)
Weighted average number of shares* (000s)
Diluted profit/ (loss) per share (pence)
6,984
-
6,984
116,501
5.99
6,984
-
6,984
125,733
5.55
-
116,501
-
-
125,733
-
6,984
-
6,984
116,501
5.99
6,984
-
6,984
125,733
5.55
(11,072)
107
(11,179)
109,926
(10.17)
(11,072)
107
(11,179)
109,926
(10.17)
(1,255)
109,926
(1.14)
(1,255)
109,926
(1.14)
(12,327)
107
(12,434)
109,926
(11.31)
(12,327)
107
(12,434)
109,926
(11.31)
* Where the share options in issue are anti-dilutive in respect of the diluted loss per share calculation in 2018, the options have not been
included in the calculation.
74
ANNUAL REPORT AND ACCOUNTS 2019Notes to the Consolidated Financial Statements
Reconciliation of basic weighted average number of shares to the diluted weighted average number of shares:
Basic weighted average number of shares, net of shares held in Treasury reserve
Share options in issue at end of year, net of shares not paid up
Diluted weighted average number of shares
31 December
2019
31 December
2018
No’000s
116,501
9,232
125,733
No’000s
109,926
9,590
119,516
13. INTANGIBLE ASSETS
Cost
As at 1 January 2018
Additions: Business Combinations
Additions: Separately Acquired
Fair value adjustment
Foreign currency retranslation
Disposals
As at 31 December 2018
Additions: Business Combinations
Additions: Separately Acquired
Fair value adjustment
Foreign currency retranslation
As at 31 December 2019
Amortisation
As at 1 January 2018
Additions: Business Combinations
Charge for the year
Impairment of goodwill
Fair value adjustment
Foreign currency retranslation
Disposals
As at 31 December 2018
Charge for the year
Foreign currency retranslation
As at 31 December 2019
Net book value
As at 31 December 2019
As at 31 December 2018
Software
Customer
relationships
Brands IP rights and
Database
Goodwill
Total
£000s
£000s
£000s
£000s
£000s
£000s
8,682
371
890
(177)
7
(48)
9,725
-
1,058
-
(65)
32,755
9,921
-
(65)
-
-
42,611
967
-
-
(15)
12,439
3,268
26,885
21,465
128,234
94,120
-
-
-
-
15,707
329
-
-
(5)
-
-
-
(1,287)
47,063
1,896
-
-
(20)
208,995
129,145
890
164
7
(1,335)
-
406
-
-
222,760
337,866
4,462
-
88
1
7,654
1,058
88
(104)
10,718
43,563
16,031
48,939
227,311
346,562
(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)
-
(8,173)
(1,423)
4
-
-
(4)
1,287
(31,736)
(10,648)
20
-
(652)
(535)
-
-
-
(10,547)
-
-
(199)
(21,587)
(535)
85
(26)
1,335
(79,374)
(17,147)
94
(8,063)
(20,855)
(824)
56
(4,252)
14
(8,831)
(25,093)
(9,592)
(42,364)
(10,547)
(96,427)
1,887
1,662
18,470
21,756
6,439
7,534
6,575
15,327
216,764
212,213
250,135
258,492
Additions as a result of business combinations in the year have been disclosed in further detail in note 27.
75
ANNUAL REPORT AND ACCOUNTS 2019Notes to the Consolidated Financial Statements
As at 31 December 2019, the carrying value and remaining amortisation period of the significant Customer relationships, Brands and IP
rights and database assets were as follows:
Customer
relationships
Brands
IP rights
and Database
Carrying Value
Remaining
Amortisation
Carrying
Value
Remaining
Amortisation
Carrying
Value
Remaining
Amortisation
£’000
821
1,264
3,572
870
7,576
3,892
-
Period
3 years
6 years
5 years
9 years
4-10 years
3 years
-
£’000
Period
£’000
Period
-
-
357
-
-
4,190
1,893
-
-
1 year
-
-
11 years
11 years
-
-
475
1,264
4,553
-
-
-
-
1 year
2 years
1 years
-
-
Current Analysis
Infinata
MEED
AROQ
Research Views
GlobalData
Verdict
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
post-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 data, analytics, and insights. 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, Financial Services, MEED and Communities
which can all be traced back to acquisitions over recent years, for which management are still able to identify specific cash flows. MEED and
Communities are newly created CGUs in the year. In the prior year MEED was part of the Construction CGU and Communities was part of the
Technology CGU. The change aligns to the financial management reporting structure within the Group. Management have recalculated the
2018 value in use and headroom on the current year CGUs and no indications of impairment were identified.
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 revenue and cost forecasts, which cover the period 2020 - 2024.
The discount rate is derived by calculating weighted average costs of equity and debt. The rate reflects appropriate adjustments relating
to market risk and risk factors of each CGU.
A terminal value calculation has been determined post 2024 using a prudent growth rate of 2% in accordance with the OECD long term
forecast.
76
ANNUAL REPORT AND ACCOUNTS 2019Notes to the Consolidated Financial Statements The key assumptions are set out below:
Increase in revenue
(for years 1 to 5)
Increase in costs
(for years 1 to 5)
Discount rate
Terminal growth rate
Consumer
Technology
Healthcare
Construction
Energy
Financial Services
MEED
Communities
2019
6.50%
2.78%
8.29%
3.08%
5.00%
4.29%
2.98%
2.38%
2018
3.00%
3.00%
3.00%
7.00%
7.00%
3.00%
3.00%
3.00%
2019
2.00%
2.00%
2.00%
2.00%
2.00%
2.00%
2.00%
2.00%
2018
2.00%
2.00%
2.00%
2.00%
2.00%
2.00%
2.00%
2.00%
2019
10.93%
10.93%
10.93%
10.93%
10.93%
10.93%
9.63%
12.12%
2018
9.69%
9.69%
9.69%
9.69%
9.69%
9.69%
9.69%
9.69%
2019
2.00%
2.00%
2.00%
2.00%
2.00%
2.00%
2.00%
2.00%
2018
2.00%
2.00%
2.00%
2.00%
2.00%
2.00%
2.00%
2.00%
The value in use for each CGU is summarised below.
All values in the table are in £ million
Goodwill
Other
Intangible
assets
Tangible
assets
Right of Use
Assets
Total Carrying
Value
Value-in-use
Headroom
Consumer
Technology
Healthcare
Construction
Energy
Financial Services
MEED
Communities
Total
38.6
16.9
76.8
24.5
29.2
15.3
11.4
4
216.7
7
1
13.5
2.8
2.9
1.4
4.6
0.1
33.3
0.8
0.2
0.5
0.1
0.2
0.1
0.1
0.5
2.5
12.6
3.8
9.7
1.9
2.7
1.8
2.4
9.9
59
21.9
100.5
29.3
35
18.6
18.5
14.5
260.8
44.9
387.8
32.1
36.7
38.9
49.6
55.7
201.8
23.00
287.3
2.8
1.7
20.3
31.1
41.2
44.8
297.3
906.5
609.2
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 individual scenarios would need to occur before
impairment is triggered within the Group:
Consumer
Technology
Healthcare
Construction
Energy
Financial Services
MEED
Communities
Revenue Growth
Falls To
Discount Rate
Rises To
(4.9%)
(0.9%)
(6.3%)
2.3%
4.6%
(2.2%)
(3.6%)
(2.4%)
36.6%
20.0%
32.4%
11.8%
11.3%
20.1%
22.0%
40.1%
No indication of impairment was noted from management’s review, there is headroom in each CGU. Management acknowledge the sensitivity
of the assumptions applied to the Construction and Energy CGUs however management are comfortable with these assumptions and will
continue to monitor performance regularly for any indicators of future impairment loss.
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.
77
ANNUAL REPORT AND ACCOUNTS 2019Notes to the Consolidated Financial Statements
14. PROPERTY, PLANT AND EQUIPMENT
Land &
buildings
Fixtures, fittings
& equipment
Motor vehicles
Leasehold
Improvements
Total
£000s
£000s
£000s
£000s
£000s
Cost
As at 1 January 2018
Additions: Business Combinations
Additions: Separately Acquired
Foreign currency retranslation
Disposals
As at 31 December 2018
Adjustment on transition to IFRS 16
Additions: Business Combinations
Additions: Separately Acquired
Foreign currency retranslation
Disposals
As at 31 December 2019
Depreciation
As at 1 January 2018
Additions: Business Combinations
Charge for the year
Foreign currency retranslation
Disposals
As at 31 December 2018
Additions: Business Combinations
Charge for the year
Foreign currency retranslation
Disposals
-
-
-
-
-
-
36,035
532
12,704
29
(99)
49,201
-
-
-
-
-
-
(50)
(4,015)
28
38
5,735
585
575
10
(1)
6,904
-
122
1,045
(92)
(210)
7,769
(4,692)
(491)
(703)
(17)
1
(5,902)
(54)
(733)
88
207
As at 31 December 2019
(3,999)
(6,394)
Net book value
As at 31 December 2019
As at 31 December 2018
45,202
-
1,375
1,002
-
-
-
-
-
-
-
-
19
-
-
19
-
-
-
-
-
-
-
(3)
-
-
(3)
16
-
293
3
149
4
-
449
-
-
516
(3)
-
962
(93)
(3)
(39)
(2)
-
(137)
-
(56)
2
-
6,028
588
724
14
(1)
7,353
36,035
654
14,284
(66)
(309)
57,951
(4,785)
(494)
(742)
(19)
1
(6,039)
(104)
(4,807)
118
245
(191)
(10,587)
771
312
47,364
1,314
78
ANNUAL REPORT AND ACCOUNTS 2019Notes to the Consolidated Financial Statements Included in the net carrying amount of property, plant and equipment as at 31 December 2019 are right-of-use assets as follows:
Buildings
Motor Vehicles
£000s
£000s
Cost
As at 1 January 2019
Additions: Separately Acquired
Disposals
Foreign currency retranslation
As at 31 December 2019
Depreciation
As at 1 January 2019
Charge for the period
Disposals
Foreign currency retranslation
As at 31 December 2019
Net book value
As at 31 December 2019
As at 1 January 2019
15. LEASES
36,035
12,705
(99)
28
48,669
-
(4,005)
38
27
(3,940)
44,729
36,035
-
19
-
-
19
-
(3)
-
-
(3)
16
-
Total
£000s
36,035
12,724
(99)
28
48,688
-
(4,008)
38
27
(3,943)
44,745
36,035
The Group has leases for office buildings and motor vehicles. With the exception of short term leases and leases of low value underlying
assets, each lease is reflected on the statement of financial position as a right-of-use asset and a lease liability. The Group classifies its
right-of-use assets in a consistent manner to its property, plant and equipment (see note 14).
Lease liabilities are presented in the statement of financial position as follows:
Current lease liabilities
Non-current lease liabilities
31 December 2019
£000s
3,910
40,730
44,640
The table below describes the nature of the Group’s leasing activities by type of right-of-use asset recognised on the statement of financial
position:
No. of right-
of-use assets
leased
Range of
remaining
term
Average
remaining
lease term
No. of leases
with extension
options
No. of
leases with
termination
options
Office building
Motor vehicle
23
1
1 – 15 years
3 years
5 years
3 years
-
-
5
-
79
ANNUAL REPORT AND ACCOUNTS 2019Notes to the Consolidated Financial Statements
The lease liabilities are secured by the related underlying assets. Future minimum lease payments at 31 December 2019 were as follows:
Lease payments
Finance charges
Net present values
Within 1
year
£000s
5,658
(1,748)
3,910
1 to
5 years
£000s
23,604
(4,967)
18,637
After
5 years
£000s
25,634
(3,541)
22,093
Total
£000s
54,896
(10,256)
44,640
Lease payments not recognised as a liability
The Group has elected not to recognise a lease liability for short term leases (leases with an expected term of 12 months or less) or for
leases of low value assets. Payments made under such leases are expensed on a straight line basis. In addition, certain variable lease
payments are not permitted to be recognised as lease liabilities and are expensed as incurred. The expense relating to payments not
included in the measurement of the lease liability is as follows:
Short-term leases
Leases of low value assets
31 December 2019
£000s
1,126
18
1,144
At 31 December 2019 the Group was committed to short-term leases and the total commitment at that date was £217,000.
At 31 December 2019 the Group had not committed to any leases which had not yet commenced excluding those recognised as a lease
liability.
The Group sub-lets certain areas of its property portfolio. As at 31 December 2019, the Group had contracts with sub-tenants for the
following future minimum lease rentals:
31 December 2019
31 December 2018
Land and Buildings
Within 1 year
Within 1 to 2 years
Within 2 to 3 years
Within 3 to 4 years
Within 4 to 5 years
Over 5 years
16. DERIVATIVE ASSETS AND LIABILITIES
Short-term derivative assets
Short-term derivative liabilities
Net derivative asset/ (liability)
£000s
1,274
1,274
1,274
1,274
1,274
6,578
12,948
£000s
824
824
824
824
769
3,204
7,269
31 December 2019
31 December 2018
£000s
908
(101)
807
£000s
529
(1,408)
(879)
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 £1,686,000 credit
to the income statement (2018: charge of £1,150,000).
80
ANNUAL REPORT AND ACCOUNTS 2019Notes to the Consolidated Financial Statements The Group uses derivative financial instruments to reduce its exposure to fluctuations in foreign currency exchange rates. Forward exchange
contracts have been entered into which has committed the below amount of currency to be paid in exchange for Sterling:
Expiring in the year ending:
31 December 2020
Euro
€’000
7,590
US Dollar
$’000
25,600
Forward exchange contracts have been entered into which has committed the below amount of currency to be paid in exchange for Indian
Rupees:
Expiring in the year ending:
31 December 2020
17. TRADE AND OTHER RECEIVABLES
Trade receivables
Prepayments
Other receivables and accrued income
Related party receivables (note 28)
Sterling
£’000
US Dollar
$’000
550
9,800
31 December 2019
31 December 2018
£000s
37,414
4,356
3,056
925
45,751
£000s
43,594
3,329
3,563
838
51,324
The contractual value of trade receivables is £43.7m (2018: £47.7m). Their carrying value is assessed to be £37.4m (2018: £43.6m) 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 net trade receivables 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:
Specific credit losses provision:
Not overdue
Not more than 3 months overdue
More than 3 months
31 December 2019
31 December 2018
£000s
32,092
4,431
891
37,414
£000s
33,021
5,718
4,855
43,594
31 December 2019
31 December 2018
£000s
116
441
4,451
5,008
£000s
7
-
3,254
3,261
81
ANNUAL REPORT AND ACCOUNTS 2019Notes to the Consolidated Financial Statements IFRS 9 – Expected credit loss provision:
Not overdue
Not more than 3 months overdue
More than 3 months
31 December 2019
31 December 2018
£000s
153
159
997
1,309
£000s
100
103
649
852
The contractual amounts of the Group’s trade receivables are denominated in the following currencies:
Pounds Sterling
US Dollar
Euro
Australian Dollar
Movement on the Group’s loss allowance for trade receivables is as follows:
Opening loss allowance
Increase in loss allowance recognised in income statement:
- Expenses: losses on trade receivables
- Revenue: credit note
Increase in loss allowance charged against invoice forward revenue1
Receivables written off during the year as uncollectable
Closing loss allowance
1 Within the Consolidated Statement of Financial Position
31 December 2019
31 December 2018
£000s
16,864
21,667
3,900
1,300
43,731
£000s
20,816
22,739
3,649
503
47,707
31 December 2019
31 December 2018
£000s
4,113
2,278
617
1,428
(2,119)
6,317
£000s
2,245
1,983
358
-
(473)
4,113
The creation and release of the loss allowance for trade receivables have been included within Administrative expenses in the consolidated
income statement. Provisions are created and released on a specific customer level on a monthly basis when management assesses for
possible impairment. In addition, the Group recognises lifetime expected credit losses which are estimated based on the Group’s historical
credit loss experience, adjusted for factors that are specific to the debtors, general economic conditions and an assessment of both the
current as well as the forecast direction of conditions at the reporting date. The other classes within trade and other receivables do not
contain impaired assets.
The maximum exposure to credit risk at 31 December 2019 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. The largest customer represented
less than 2% of the Group’s consolidated revenue. Further details on credit risk have been disclosed within note 21.
82
ANNUAL REPORT AND ACCOUNTS 2019Notes to the Consolidated Financial Statements
18. DEFERRED INCOME TAX
31 December 2019
31 December 2018
Balance brought forward
Created upon acquisition of subsidiary
Credited to profit and loss account (continuing operations)
Prior year adjustment
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
Fixed asset timing differences
Deferred tax on share based payments
Trading losses
Balance carried forward
Deferred tax asset
Deferred tax liability
Net position
19. TRADE AND OTHER PAYABLES
Trade payables
Other taxation and social security
Invoiced forward revenue
Accruals
As at 31 December 2019, the utilisation of the deferred tax asset relating to tax losses is dependent on future taxable profits of approximately
£5.8m 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 2019 the Group has losses for which no deferred tax asset has been recognised of £13.3m. 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 2019 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.
All amounts are short-term. The carrying values are considered to be a reasonable approximation of fair value.
£000s
138
(784)
2,420
(359)
2,464
-
3,879
(4,773)
122
7,536
994
3,879
£000s
1,933
(3,629)
1,129
(464)
1,383
(214)
138
(6,570)
127
4,263
2,318
138
31 December 2019
31 December 2018
£000s
8,652
(4,773)
3,879
£000s
6,709
(6,571)
138
31 December 2019
31 December 2018
£000s
9,566
1,061
68,611
16,798
96,036
£000s
8,809
1,747
67,160
14,944
92,660
83
ANNUAL REPORT AND ACCOUNTS 2019Notes to the Consolidated Financial Statements
20. BORROWINGS
Short-term lease liabilities
Short-term borrowings
Current liabilities
Long-term lease liabilities
Long-term borrowings
Non-current liabilities
31 December 2019
31 December 2018
£000s
3,910
6,000
9,910
40,730
60,488
101,218
£000s
-
6,000
6,000
-
64,341
64,341
Total
£000s
70,341
35,639
105,980
(15,301)
6,425
222
12,724
1,078
-
111,128
The changes in the Group’s borrowings can be classified as follows:
1 January 2019
Adoption of IFRS 16
Revised 1 January 2019
Cash-flows:
- Repayment
- Proceeds
Non-cash:
- Loan fee amortisation
- Lease additions
- Lease liabilities2
- Reclassification
As at 31 December 2019
Short-term
borrowings
Long-term
borrowings
Short-term
lease liabilities1
Long-term
lease liabilities1
£000s
6,000
-
6,000
(6,000)
-
-
-
-
6,000
6,000
£000s
64,341
-
64,341
(4,500)
6,425
222
-
-
(6,000)
60,488
£000s
-
1,983
1,983
(4,801)
-
-
3,435
1,435
1,858
3,910
£000s
-
33,656
33,656
-
-
-
9,289
(357)
(1,858)
40,730
1 Amounts are net of rental prepayments and accruals
2 Represents lease interest, dilapidations and movement on lease liability accruals and prepayments
84
ANNUAL REPORT AND ACCOUNTS 2019Notes to the Consolidated Financial Statements
Term loan and RCF
In April 2017, the Group refinanced its debt position. The facility consists of a £30.0m 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
£6.0m. The outstanding balance as at 31 December 2019 was £13.5m (31 December 2018: £19.5m).
The Group also has a revolving capital facility (RCF) of £70.0m. As at 31 December 2019, the Group had drawn down £53.5m against the
RCF.
In addition to the drawn down facilities there is a letter of credit against the facility of £10.3m which has been provided to the Employee
Benefit Trust (EBT). This is in place in relation to a potential tax liability which management have assessed to be remote in likelihood of being
paid. As such, a provision has not been recognised in the consolidated statement of financial position.
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 2.25% over the London Interbank Offered Rate.
Borrowings can be reconciled as follows:
Lease liabilities
Term loan
RCF
Capitalised fees, net of amortised amount
31 December 2019
31 December 2018
£000s
44,640
13,500
53,498
(510)
111,128
£000s
-
19,500
51,573
(732)
70,341
85
ANNUAL REPORT AND ACCOUNTS 2019Notes 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, all at amortised costs, as follows:
31 December 2019
31 December 2018
Non-current assets
Related party receivables
Current assets
Cash
Trade receivables
Other receivables and accrued income
Related party receivables
Current liabilities
Trade payables
Short-term borrowings
Other taxation and social security
Accruals
Non-current liabilities
Long-term borrowings
The Group’s financial instruments are classified under IFRS, at fair value, as follows:
Current assets
Short-term derivative assets
Current liabilities
Short-term derivative liabilities
£000s
1,850
1,850
11,232
37,414
3,056
925
52,627
(9,566)
(6,000)
(1,061)
(16,798)
(33,425)
(60,488)
(60,488)
£000s
2,775
2,775
6,268
43,594
3,563
838
54,263
(8,809)
(6,000)
(1,747)
(14,944)
(31,500)
(64,341)
(64,341)
31 December 2019
31 December 2018
£000s
908
908
(101)
(101)
£000s
529
529
(1,408)
(1,408)
86
ANNUAL REPORT AND ACCOUNTS 2019Notes 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
Other taxation and social security
Non-current liabilities
Long-term borrowings
Less than 1 month
1 to 3 months
£000s
£000s
3 months
to 1 year
£000s
1 to
5 years
£000s
1,850
11,232
9
25,657
-
925
-
(12)
(3,089)
-
-
-
-
-
281
10,279
3,056
-
(2,009)
(53)
(6,477)
(16,798)
(1,061)
-
-
-
618
1,465
-
-
(6,029)
(36)
-
-
-
-
36,572
(12,782)
(3,982)
Total
£000s
1,850
11,232
908
37,414
3,056
925
(8,038)
(101)
(9,566)
(16,798)
(1,061)
-
-
-
13
-
-
-
-
-
-
-
(63,120)
(63,107)
(63,120)
(43,299)
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 £4,670,000).
Reclassifications
There have been no reclassifications between financial instrument categories during the years ended 31 December 2019 and 31 December
2018.
Fair value of financial instruments
Financial instruments are either carried at amortised cost, less any provision for impairment, or fair value.
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 2019, 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
87
ANNUAL REPORT AND ACCOUNTS 2019Notes to the Consolidated Financial Statements
Cash, trade receivables and trade accounts payable
The carrying amounts of these balances are approximately equivalent to their fair value because of the short term to maturity.
Market risk
The Group is exposed to market risk primarily from changes in foreign currency exchange rates and interest rates.
Currency risk
The Group’s primary objective in managing foreign currency risk is to protect against the risk that the eventual Sterling net cash flows will
be adversely affected by changes in foreign currency exchange rates. Due to the Group’s operations in India, the Group has entered into
foreign exchange contracts that limit the risk from movements in US Dollars and Sterling with the Indian Rupee exchange rate. The Group
additionally enters into foreign exchange contracts that limit the risk from movements in US Dollars and Euros with Sterling.
The Group’s exposure to foreign currencies arising from financial instruments is:
31 December 2019
Exposures
Cash
Short and long-term derivative assets/
(liabilities)
Trade receivables
Trade accounts payable
Net exposure
31 December 2018
Exposures
Cash
Short and long-term derivative assets/
(liabilities)
Trade receivables
Trade accounts payable
Net exposure
USD
£000s
4,229
621
21,667
(297)
26,220
USD
£000s
3,749
(1,278)
22,739
(114)
25,096
EUR
£000s
562
207
3,900
-
4,669
EUR
£000s
690
(129)
3,649
1
4,211
Other
£000s
4,120
(22)
1,300
(202)
5,196
Other
£000s
2,326
467
503
(154)
3,142
Total
£000s
8,911
806
26,867
(499)
36,085
Total
£000s
6,765
(940)
26,891
(267)
32,449
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 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
2019
£000s
2,913
519
3,432
2018
£000s
2,788
468
3,256
2019
£000s
(2,384)
(424)
(2,808)
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.
88
ANNUAL REPORT AND ACCOUNTS 2019Notes to the Consolidated Financial Statements Interest rate risk
The Group is exposed to interest rate risk on its overdraft and the outstanding syndicated loans and also lease liabilities. The Group does not
manage this risk with the use of derivatives. No other liabilities accrue interest. The table below shows how a movement in interest rates of
100 basis points would impact the income statement based on the additional interest expense for the year then ended:
Impact on:
Net earnings before income tax
100 basis point decrease
100 basis point increase
2019
£000s
1,111
2018
£000s
2019
£000s
2018
£000s
703
(1,111)
(703)
This analysis assumes all other variables remain constant.
Liquidity risk
Liquidity risk represents the Group’s ability to meet its contractual obligations. The Group evaluates its liquidity requirements on an ongoing
basis. In general, the Group generates sufficient cash flows from its operating activities to meet its financial liabilities.
The Group’s main source of financing for its working capital requirements is free cash flow.
The Group’s exposure to liquidity risk arises from trade accounts payable and syndicated loans. All contractual cash flows from trade
accounts payable are the same as the carrying value of the liability due to their short-term nature.
At 31 December 2019, the Group has a revolving credit facility of £53.5m and a £30.0m term loan (of which £13.5m is outstanding as at 31
December 2019). 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.
£54.5m of the Group’s assets are subject to credit risk (31 December 2018: £57.6m). 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 the debt recovery team will review on a debt-by-debt basis taking into consideration:
Internal responses from the client service and account management team
• 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
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. In cases such as 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 2019, is shown as below
Revenue
178,195
157,553
118,649
100,013
60,466
63,161
Provision added for bad debt
4,323
2,341
855
912
841
2,280
2019
2018
2017
2016
2015
2014
% of revenue
2.4%
1.5%
0.7%
0.9%
1.4%
3.6%
89
ANNUAL REPORT AND ACCOUNTS 2019Notes to the Consolidated Financial Statements 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. Management also take into account forward looking information (including macro-economic data)
when making this assessment.
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 23 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.
22. PROVISIONS
The movement in the provisions is as follows:
At 1 January 2018
Increase in provision
Foreign exchange
Utilised
Release of unutilised provision
At 31 December 2018
Increase in provision
Transfer to right of use asset
Utilised
Release of unutilised provision
At 31 December 2019
Current:
Non-current:
Onerous leases
Dilapidations
Right-of-use
assets
Dilapidations
Other
£000s
£000s
£000s
63
758
2
(582)
-
241
-
(50)
(134)
(57)
-
-
-
-
-
-
-
-
-
386
-
-
-
386
50
336
450
140
13
-
(43)
560
129
-
(66)
(428)
195
40
155
Other
Total
£000s
88
-
-
-
(88)
-
-
-
-
-
-
-
-
£000s
601
898
15
(582)
(131)
801
515
(50)
(200)
(485)
581
90
491
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.
90
ANNUAL REPORT AND ACCOUNTS 2019Notes to the Consolidated Financial Statements 23. EQUITY
Share capital
Allotted, called up and fully paid:
31 December 2019
31 December 2018
No’000
£000s
No’000
£000s
Ordinary shares as at 1 January (1/14th pence)
Issue of shares: Consideration Research Views
Limited
Ordinary shares as at 31 December (1/14th
pence)
Deferred shares of £1.00 each
118,303
-
118,303
100
118,403
84
-
84
100
184
102,346
15,957
118,303
100
118,403
73
11
84
100
184
Share Purchases
As detailed in note 24, during the period the Group’s Employee Benefit Trust purchased an aggregate amount of 467,400 shares at a
total market value of £3,602,000. The purchased shares will be held for the purpose of satisfying the exercise of share options under the
Company’s Employee Share Option Plan.
In March 2019, 2.1 million outstanding share options held by GlobalData employees vested in accordance with the EBITDA target being
satisfied under Tranche 2a and approved by the Remuneration Committee. The Group satisfied all of the share options exercised using the
shares held by the Trust. Movements to the Treasury reserve, Share premium account and Retained earnings have arisen on the accounting
for the vesting of the options as detailed in the statement of changes in equity. This recognises the fact that no current year expense is
incurred, as the vesting of options is a transaction with shareholders only.
Capital management
The Group’s capital management objectives are:
• To ensure the Group’s ability to continue as a going concern
• To fund future growth and provide an adequate return to shareholders and, when appropriate, distribute dividends
The capital structure of the Group consists of net debt, which includes borrowings (note 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.
91
ANNUAL REPORT AND ACCOUNTS 2019Notes to the Consolidated Financial Statements
Dividends
The final dividend for 2018 was 7.5p per share and was paid in April 2019. The total dividend for the current year was 15.0 pence per share,
with an interim dividend of 5.0 pence per share paid on 3 October 2019 to shareholders on the register at the close of business on 30 August
2019 and a final dividend of 10.0 pence per share will be paid on 24 April 2020 to shareholders on the register at the close of business on 27
March 2020. The ex-dividend date will be on 26 March 2020.
Share Premium
Proceeds received in addition to the nominal value of shares issued have been included in the Share premium account. The increase to the
Share premium account in 2019 relates to the vesting of share options (note 24).
Merger reserve
The merger reserve contains the premium on the shares issued in consideration for the purchase of GlobalData Holding Limited in 2016 and
the premium on the shares issued in consideration for the purchase of Research Views Limited and its subsidiaries in 2018.
Treasury reserve
The treasury reserve contains shares held in 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.
92
ANNUAL REPORT AND ACCOUNTS 2019Notes to the Consolidated Financial Statements 24. SHARE BASED PAYMENTS
Scheme 1
The Group created a share option scheme during the year ended 31 December 2010 and granted the first options under the scheme on 1
January 2011 to certain senior employees. Each option granted converts to one ordinary share on exercise. A participant may exercise their
options subject to employment conditions and EBITDA targets being met. For these options to be exercised the Group’s earnings before
interest, taxation, depreciation and amortisation, as adjusted by the Remuneration Committee for significant or one-off occurrences, must
exceed certain targets. The fair values of options granted were determined using the Black-Scholes model. The inputs used in the model
were:
• share price at date of grant
• exercise price
•
• 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
Award 23
Award 24
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
19 March 2019
22 October 2019
£1.089
£1.866
£2.550
£2.525
£2.075
£2.025
£1.980
£2.420
£2.380
£2.380
£4.300
£5.240
£5.240
£5.240
£5.540
£5.910
£5.910
£5.270
£5.270
£5.270
£5.860
£8.189
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
0.0714p
0.0714p
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
1.0
1.0
1.0
1.0
1.0
1.0
1.0
1.0
1.0
1.0
1.0
1.0
1.0
1.0
1.0
1.0
1.0
1.0
1.0
1.0
1.0
1.0
Awards 2 and 5 have been fully forfeited.
The estimated forfeiture rate assumption is based upon management’s expectation of the number of options that will lapse over the vesting
period. The assumptions were determined when the scheme was set up in 2011 and are reviewed annually. Management believe the current
assumptions to be reasonable based upon the rate of lapsed options and proximity to the vesting targets.
Each of the awards are subject to the vesting criteria set by the Remuneration Committee. In order for the remaining options to be exercised,
the Group’s earnings before interest, taxation, depreciation and amortisation, as adjusted by the Remuneration Committee for significant or
one-off occurrences, must exceed targets of £41m and £52m respectively (2018: £32m, £41m and £52m respectively).
93
ANNUAL REPORT AND ACCOUNTS 2019Notes 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
Award 23
Award 24
Group Achieves
£10m 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
N/a
N/a
Group Achieves
£32m EBITDA
Group Achieves
£41m EBITDA
Group Achieves
£52m EBITDA
20% Vest
25% Vest
20% Vest
25% Vest
20% Vest
N/a
17.5% Vest
17.5% Vest
17.5% Vest
12.5% Vest
25% Vest
10% Vest
10% Vest
N/a
N/a
N/a
N/a
N/a
N/a
20% Vest
25% Vest
20% Vest
25% Vest
20% Vest
N/a
17.5% Vest
17.5% Vest
17.5% Vest
12.5% Vest
25% Vest
10% Vest
10% Vest
N/a
N/a
14% Vest
33% Vest
10% Vest
N/a
40% Vest
50% Vest
60% Vest
50% Vest
60% Vest
100% Vest
65% Vest
65% Vest
65% Vest
75% Vest
50% Vest
80% Vest
80% Vest
100% Vest
100% Vest
86% Vest
67% Vest
90% Vest
100% Vest
Award 11 relates to options awarded to Chairman, Bernard Cragg during 2016. Half of these options vested on 31 January 2019 and the
remaining half will vest on 31 January 2021.
The total charge recognised for the scheme during the twelve months to 31 December 2019 was £10,882,000 (2018: £5,679,000). The
awards of the scheme are settled with ordinary shares of the Company.
During the period the Group purchased an aggregate amount of 467,400 shares at a total market value of £3,602,000. 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.
Option price (pence)
Number of options
1/14th
1/14th
1/14th
1/14th
1/14th
10,808,861
736,440
(2,059,188)
(632,231)
8,853,882
31 December 2018
Granted
Exercised
Forfeited
31 December 2019
94
ANNUAL REPORT AND ACCOUNTS 2019Notes to the Consolidated Financial Statements
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
31 December 2019
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
8,853,882
1/14th
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
1.0
In March 2019, 2.1 million outstanding share options held by GlobalData employees vested in accordance with the EBITDA target being
satisfied under Tranche 2a and approved by the Remuneration Committee at a strike price of £6 per share. The Group satisfied all of the
share options exercised using the shares held by the Trust. Movements to the Treasury reserve, Share premium account and Retained
earnings have arisen on the accounting for the vesting of the options as detailed in the statement of changes in equity. This recognises the
fact that no current year expense is incurred, as the vesting of options is a transaction with shareholders only.
The Remuneration Committee received notification from the Audit Committee that the quality of Adjusted EBITDA in 2019 of £44.6m was
sufficient to satisfy the target under Tranche 2b of £41m. The employees who have share options dependent on the meeting of the £41m
target will therefore receive the opportunity to vest their options following the publication of the results.
Scheme 2
In October 2019 the Group created and announced a new share option scheme and granted the first options under the scheme on 31
October 2019 to certain senior employees. Each option granted converts to one ordinary share on exercise. A participant may exercise
their options subject to employment conditions and performance targets being met. For these options to be exercised the Group’s share
price must reach certain targets. The fair values of options granted were determined using the Monte Carlo method. The inputs used in the
model were:
• grant date
• vesting date
• performance start and end date
• expected term
•
risk free rate
• dividend yield
• volatility and;
• share price at date of grant
The awards shall vest based upon the following performance conditions being satisfied:
•
100% of the shares subject to the award will vest provided the compounded annual growth in the Group’s TSR performance over the
5-year performance period is equal to or exceeds 16% per annum compounded (the “5-Year TSR Target”).
• The 5-Year TSR Target will be measured by taking a base-line price per share of 830p and comparing it to the sum of the average closing
price of a share derived from the ‘official list’ over the period 20 trading days commencing on the business day on which the Group
announces its annual results for the period ending 31 December 2024 and all dividends paid during the performance period.
To the extent that the 5-year TSR Target has not been met, the awards will not vest. If any of the events pursuant to the rules covering
‘takeovers and other corporate events’ occur during the performance period or prior to the vesting date, awards shall vest as follows:
• Where the 5-year TSR Target has been met at the date of the relevant event, 100% of the awards shall vest.
• Where the 5-year TSR Target has not been achieved, but a 16% compound annual TSR has been met over the period from the
commencement of the performance period, awards shall vest on a pro-rata basis to reflect the proportion of the performance period
which has elapsed, although the Company shall have discretion to waive such time pro-rating if they consider it appropriate.
95
ANNUAL REPORT AND ACCOUNTS 2019Notes to the Consolidated Financial Statements 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
31 October 2019
£3.05
0.0714p
0%
5.0
The estimated forfeiture rate assumption is based upon management’s expectation of the number of options that will lapse over the
vesting period, and are reviewed annually. Management believe the current assumptions to be reasonable.
The total charge recognised for the scheme during the 12 months to 31 December 2019 was £134,000 (2018: nil). The awards of the scheme
are settled with ordinary shares of the Company.
Reconciliation of movement in the number of options is provided below.
31 December 2018
Granted
31 December 2019
Option price (pence)
Number of options
1/14th
1/14th
1/14th
-
1,400,000
1,400,000
The following table summarises the Group’s share options outstanding at each year end:
Reporting date
31 December 2019
Options outstanding
Option price (pence)
Remaining life (years)
1,400,000
1/14th
5.00
25. CAPITAL COMMITMENTS
There were no capital commitments at 31 December 2019 (2018: £nil).
26. RETIREMENT BENEFIT SCHEMES
As a result of the Research Views Limited acquisition in March 2018, 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.
On 16 December 2019 the Group entered into an irrevocable agreement to sell the pension scheme to Just Retirement Limited (“Just”). The
buy-in involved the purchase of a qualifying insurance policy pre year end at a cost to GlobalData Plc of £1.3m. This has been measured at
the amount of the related defined benefit obligation as required by IAS 19. Final buy-out is expected to take place within six to 12 months.
Management have considered the accounting options available and believe that the buy-in represents an asset transaction. As such, the
re-measurement cost has been recognised within the statement of comprehensive income.
The Group is expected to incur legal and professional fees of £0.4m in relation to the transaction.
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 2019.
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 2020.
The scheme is exposed to a number of risks and sensitivities against which the Group has eliminated its exposure through sale of the
scheme. The risks and sensitivities include:
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
•
•
• Longevity risk: changes in the estimation of mortality rates of current and former employees.
96
ANNUAL REPORT AND ACCOUNTS 2019Notes to the Consolidated Financial Statements Changes in the present value of defined benefit obligations are as follows:
Opening defined benefit obligation
Interest expense on defined benefit obligation
Benefits paid
Past service cost
Re-measurement
31 December 2019
31 December 2018
£000s
(5,102)
(130)
907
-
(421)
£000s
(5,287)
(130)
213
(51)
153
Closing defined benefit obligation
(4,746)
(5,102)
Changes in the present value of defined benefit assets are as follows:
Opening fair value of plan assets
Interest income on plan assets
Re-measurement
Contributions paid by the Group
Benefits paid
Closing fair value of scheme assets
The full value of the closing assets is represented by a bulk annuity contract.
Defined benefit obligation
Fair value of scheme assets
Net defined benefit asset
31 December 2019
31 December 2018
£000s
5,993
130
(1,785)
1,315
(907)
4,746
£000s
6,262
154
(210)
-
(213)
5,993
31 December 2019
31 December 2018
£000s
(4,746)
4,746
-
£000s
(5,102)
5,993
891
For the year ended 31 December 2018, the net asset was not recognised on the statement of financial position as the Group does not have
an unconditional right to a refund.
Net interest income of nil (2018: £24,000) has been incurred on the assets of the scheme in the year with a past service cost of nil (2018:
£51,000). The re-measurement of scheme assets and obligations have been recorded in the Statement of Other Comprehensive Income
net of the prior year surplus that was not recognised in the statement of financial position, as displayed below.
Opening net defined benefit asset
Re-measurement of obligation
Re-measurement of asset
Recognised in the Statement of Other Comprehensive Income
31 December 2019
£000s
891
(421)
(1,785)
1,315
97
ANNUAL REPORT AND ACCOUNTS 2019Notes to the Consolidated Financial Statements 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:
31 December 2019
31 December 2018
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
%pa
2.0%
3.4%
2.4%
2.4%
2.4%
Nil
3.0%
3.0%
3.0%
87
89
88
90
%pa
2.8%
3.6%
2.6%
2.6%
2.5%
Nil
3.0%
3.0%
3.0%
87
89
89
91
The value of liabilities depends on the assumptions used, and is sensitive to certain key assumptions. The table below illustrates the impact
on the liabilities of a change in each of the assumptions in isolation. Note that given the buy-in, the value placed on the assets will also
change to leave the net position broadly unchanged.
Change
Discount rate by 0.25% p.a.
Inflation by 0.25% p.a.
Increase life expectancy by 1 year
Increase in assumption
Decrease in assumption
(3.5%)
0.5%
5.0%
3.6%
(0.5%)
(5.0%)
98
ANNUAL REPORT AND ACCOUNTS 2019Notes to the Consolidated Financial Statements 27. ACQUISITIONS
AROQ Limited
On 4 January 2019, the Group acquired the entire share capital of the AROQ Limited Group for cash consideration of £7.5m. AROQ provides
global data, analytics, and insights in the auto, drinks, food and style sectors.
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 assets acquired consisting of:
Property, plant and equipment
Cash and cash equivalents
Trade and other receivables
Trade and other payables
Corporation tax payable
Deferred tax
Fair value of net assets acquired
The goodwill recognised in relation to the acquisition is as follows:
Consideration
Less net assets acquired
Goodwill
Carrying Value
Adjustments
£000s
Fair Value
Adjustments
£000s
-
-
-
550
648
780
(1,495)
(43)
(33)
407
329
967
1,896
-
-
(97)
-
-
(529)
2,566
Fair Value
£000s
329
967
1,896
550
648
683
(1,495)
(43)
(562)
2,973
Fair Value
£000s
7,532
(2,973)
4,559
The goodwill that arose on the combination can be attributed to the assembled workforce, know-how and research methodology. The fair
values of the identified intangible assets were calculated in line with the policies detailed on page 56.
The Group incurred legal expenses of £9,000 in relation to the acquisition which were recognised in other expenses. In the period from
acquisition to 31 December 2019 the trade of AROQ Limited generated revenues of £2.6m and contribution of £0.7m.
In January 2019, the Group also paid £1.3m for the purchase of the remaining shares held by a minority interest within Sportcal Limited, a
subsidiary of the Group. The acquisition was accounted for and the purchase price was accrued for as at 31 December 2018.
Cash Cost of Acquisitions
The cash cost of acquisitions comprises:
Acquisition of AROQ Limited:
Cash consideration
Cash acquired as part of opening balance sheet
Acquisition of Sportcal Minority Shareholding
Acquisition of Global Ad Source: funds returned
31 December 2019
£000s
7,532
(648)
1,316
(68)
8,132
99
ANNUAL REPORT AND ACCOUNTS 2019Notes to the Consolidated Financial Statements
28. RELATED PARTY TRANSACTIONS
Mike Danson, GlobalData Plc’s Chief Executive, owns 66.8% of the Company’s ordinary shares as at 2 March 2020. Mike Danson owns a
number of businesses that interact with GlobalData Plc. The principal transactions, which are all conducted on an arm’s length basis, are
as follows:
Accommodation
GlobalData Plc rents three buildings from Estel Property Investments Limited, a company wholly owned by Mike Danson. The total
rental expense (net of sub-lease income), including service and management fees, in relation to the buildings owned by Estel Property
Investments for the year ended 31 December 2019 was £2,719,700 (2018: £2,551,900). In addition, GlobalData Plc sub-leases office space
to other companies owned by Mike Danson.
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
2019 was £556,100 (2018: £490,400).
Loan to Progressive Trade Media Limited
As part of the 2016 disposal of non-core B2B print businesses to a related party, the Group agreed to issue a loan to Progressive Trade
Media Limited to fund the purchase consideration. This loan is for £4.5m and repayable in five instalments, with the next instalment due in
January 2021 (third instalment received in February 2020). Interest of 2.25% above LIBOR is charged on the loan, with £87,000 charged in
the year ended 31 December 2019 (2018: £117,000).
Directors and Key Management Personnel
The remuneration of Directors is discussed within the Directors’ Remuneration Report on pages 40 to 42. Remuneration of key management
personnel is detailed in note 9.
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:
Compelo Group (and subsidiaries)
31 December 2019
31 December 2018
£000s
1,850
1,850
£000s
2,775
2,775
31 December 2019
31 December 2018
£000s
925
925
£000s
925
925
31 December 2019
31 December 2018
£000s
£000s
-
-
(1)
(1)
The Group has right of set off over the trading balances held with companies related by virtue of common ownership by Mike Danson. The
parent company’s balances with related parties are disclosed on pages 119 and 120 of the annual report.
100
ANNUAL REPORT AND ACCOUNTS 2019Notes to the Consolidated Financial Statements
Principal subsidiary undertakings
The Group has a large number of subsidiaries due to the M&A activities in recent years. The Group is continuing to go through a corporate
simplification process to reduce the number of its subsidiaries, focussing operations through its main subsidiaries in its main territories.
Subsidiary undertaking
Adfinitum Networks Inc*
AROQ Limited*
Attentio Inc*
Country of registration
Holding
Canada
Ordinary shares
England & Wales
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*
Current Analysis SAS*
Current Analysis, Inc*
England & Wales
Ordinary shares
England & Wales
Ordinary shares
Mexico
Ordinary shares
France
Ordinary shares
United States of America
Ordinary shares
Digital Insights and Research Private Limited*
India
Ordinary shares
Financial News Publishing Limited
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*
Global Data Publications, Inc*
GlobalData Singapore Pte Limited*
GlobalData UK Limited*
Internet Business Group Limited
Kable Business Intelligence Limited
MEED Media FZ LLC*
England & Wales
Ordinary shares
India
Ordinary shares
Australia
Ordinary shares
Brazil
Ordinary shares
100%
Data and analytics
Canada
Ordinary shares
England & Wales
Ordinary shares
Japan
Ordinary shares
Singapore
Ordinary shares
United States of America
Ordinary shares
Singapore
Ordinary shares
England & Wales
Ordinary shares
100%
100%
100%
100%
100%
100%
100%
Data and analytics
Holding company
Data and analytics
Data and analytics
Data and analytics
Data and analytics
Data and analytics
England & Wales
Ordinary shares
100% Performance advertising
England & Wales
Ordinary shares
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
Progressive Digital Media Limited
Progressive Digital Media Pvt Ltd
Progressive Media Group Limited*
United States of America
Ordinary shares
England & Wales
Ordinary shares
India
Ordinary shares
England & Wales
Ordinary shares
Progressive Media International Middle East FZ LLC*
United Arab Emirates
Ordinary shares
Progressive Media Korea Limited*
Progressive Media Ventures Limited*
Progressive Ventures Limited*
Research Views Limited*
Sociable Data Limited*
Sportcal.com Limited*
World Market Intelligence Inc*
World Market Intelligence Limited*
World Market Intelligence Pty Limited*
*indirectly held
South Korea
Ordinary shares
England & Wales
Ordinary shares
England & Wales
Ordinary shares
England & Wales
Ordinary shares
England & Wales
Ordinary shares
England & Wales
Ordinary shares
United States of America
Ordinary shares
England & Wales
Ordinary shares
Australia
Ordinary shares
%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Principal activity
Data and analytics
Data and analytics
Data and analytics
Data and analytics
Data and analytics
Data and analytics
Data and analytics
Data and analytics
Data and analytics
Data and analytics
Data and analytics
Data and analytics
Data and analytics
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
101
ANNUAL REPORT AND ACCOUNTS 2019Notes 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
Cash and cash equivalents
Total assets
Current liabilities
Bank overdraft
Trade and other payables
Short-term derivative liabilities
Short-term lease liabilities
Short-term borrowings
Non-current liabilities
Long-term provisions
Long-term lease liabilities
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
7
8
9
10
9
6
12
11
6
12
2019
£000s
35,067
1,160
186,137
222,364
192,178
745
574
193,497
415,861
-
(102,216)
(73)
(1,829)
(6,000)
(110,118)
(177)
(32,028)
(60,488)
(92,693)
(202,811)
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)
213,050
182,971
184
725
(11,017)
7,174
163,810
52,174
213,050
184
200
(19,142)
7,174
163,810
30,745
182,971
These financial statements were approved by the Board of Directors on 2 March 2020 and signed on its behalf by:
Bernard Cragg
Chairman
Mike Danson
Chief Executive
The accompanying notes form an integral part of this financial report.
Company number: 03925319
102
ANNUAL REPORT AND ACCOUNTS 2019
Company Statement of Comprehensive Income
Administrative expenses
Other income
Finance income
Dividends received from group undertakings
Profit/ (loss) before tax
Income tax expense
Profit/ (loss) for the year
The accompanying notes form an integral part of this financial report.
Year ended
Year ended
31 December 2019
31 December 2018
£000s
(2,075)
1,274
1,260
36,796
37,255
-
37,255
£000s
(5,639)
-
1,055
-
(4,584)
-
(4,584)
103
ANNUAL REPORT AND ACCOUNTS 2019 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 2018
Loss for the year
Transactions with owners:
Issue of share capital
Dividends
Share buyback
Share based payments charge
Balance at 31 December 2018
Profit for the year
Transactions with owners:
Dividends
Share buyback
Vesting of share options
Share based payments charge – scheme 1
Share based payments charge – scheme 2
£000s
£000s
£000s
£000s
£000s
£000s
£000s
173
-
11
-
-
-
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
-
-
-
-
-
-
-
-
-
-
-
(3,602)
525
11,727
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
37,255
37,255
(14,590)
(14,590)
-
(3,602)
(12,252)
-
10,882
10,882
134
134
Balance at 31 December 2019
184
725
(11,017)
7,174
163,810
52,174
213,050
The accompanying notes form an integral part of this financial report.
104
ANNUAL REPORT AND ACCOUNTS 2019
Company Statement of Cash Flows
Cash flows from operating activities
Profit/ (loss) for the year
Adjustments for:
Dividends received from group undertakings
Depreciation
Amortisation
Impairment
Finance income
Other income
Movement in provision
Revaluation of derivatives
(Increase)/ decrease in trade and other receivables
Increase in trade and other payables
Cash generated from/ (used in) operations
Interest received
Net cash generated from operating activities
Cash flows from investing activities
Net (outflow)/ inflow from inter-company loans
Purchase of property, plant and equipment
Purchase of intangible assets
Net cash (used in)/ generated from investing activities
Cash flows from financing activities
Proceeds from long-term borrowings
Loan fees
Repayment of borrowings
Acquisition of own shares
Principal elements of lease payments
Dividends received from group undertakings
Dividends paid
Net cash generated from/ (used in) financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
The accompanying notes form an integral part of this financial report.
Year ended
31 December 2019
Year ended
31 December 2018
£000s
£000s
37,255
(4,584)
(36,796)
3,278
584
1,449
(1,260)
(1,274)
(100)
(2,080)
(778)
1,965
2,243
1,896
4,139
(13,755)
(919)
(811)
(15,485)
6,425
-
(10,500)
(3,602)
(2,161)
36,796
(14,590)
12,368
1,022
(448)
574
-
455
807
-
(1,055)
-
(12)
1,553
141
2,163
(532)
1,368
836
13,020
(534)
(573)
11,913
30,473
(285)
(14,408)
(16,853)
-
-
(9,110)
(10,183)
2,566
(3,014)
(448)
105
ANNUAL REPORT AND ACCOUNTS 2019
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 high quality proprietary
data, analytics, and insights to clients across 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 in operation and meet its liabilities as they fall due for the foreseeable future, being a period of at least 12 months from
the date of approval of the financial statements. 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 (i) investments and (ii) amounts owed by group undertakings and provisions for share based payments.
Carrying value of investments
The carrying value of investments are assessed at least annually to ensure that there is no need for impairment. Management are unable to
perform this assessment based on estimated future cash flows of the related group undertaking as the cash flows of the subsidiary entities
have been intertwined into existing parts of the Group such that it is not possible to identify individual cash flows for those investments.
Management have therefore considered it appropriate to perform an impairment assessment at a cash generating unit (CGU) level. Each
CGU across the Group can be traced back to acquisitions over recent years, for which management are still able to identify specific cash
flows.
Performing this 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.
The cash flow projections for each CGU are based on Board approved revenue and cost forecasts, which cover the period 2020 - 2024. The
discount rate is derived by calculating weighted average costs of equity and debt. The rate reflects appropriate adjustments relating to
market risk and risk factors of each CGU. A terminal value calculation has been determined post 2024 using a prudent growth rate of 2% in
accordance with the OECD long term forecast.
106
ANNUAL REPORT AND ACCOUNTS 2019Notes to the Company Financial Statements
Share based payments
The Group operates two share based compensation plans 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 equity. The
significant judgements involved in calculating the share based payments charge are:
• Scheme 1: 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 forecasted EBITDA.
• Scheme 2: the fair value at the date of grant which is determined by using the Monte Carlo model and the senior management retention
rate which is determined with reference to historical churn. The use of the Monte Carlo model and calculation of the associated input
parameters requires judgement therefore management obtained professional advice to assist in determining the fair value of the
awards granted.
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.
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
2019. The Company was impacted by the introduction of IFRS 16, refer to the Group accounting policies for further disclosure.
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.
107
ANNUAL REPORT AND ACCOUNTS 2019Notes to the Company Financial Statements 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.
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.
108
ANNUAL REPORT AND ACCOUNTS 2019Notes to the Company Financial Statements Receivables
Financial assets are assessed for indicators of impairment at each reporting date. Financial assets are impaired where there is objective
evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash
flows of the investment have been negatively impacted.
A specific provision will be raised for trade receivables when there is objective evidence that the Group will not be able to collect all amounts
due according to the original terms of the receivables. Significant financial difficulties of the debtor, probability that the debtor will enter
bankruptcy or financial reorganisation, and default or delinquency in payments are considered indicators that the trade receivable is
impaired.
In determining the provision, the Group also applies the IFRS 9 simplified approach to measuring expected credit losses (ECL) which uses
a lifetime expected loss allowance for all trade receivables. The ECL on these financial assets are estimated based on the Group’s historical
credit loss experience, adjusted for factors that are specific to the trade receivables, general economic conditions and an assessment of
both the current as well as the forecast direction of conditions at the reporting date.
For financial assets carried at amortised cost, the amount of the impairment is the difference between the asset’s carrying amount and the
present value of estimated future cash flows, discounted at an effective interest rate.
When a trade receivable is considered uncollectible, it is written off against the provision account. Subsequent recoveries of amounts
previously written off are credited against the provision account. Changes in the carrying amount of the provision are recognised in the
income statement.
Trade and other payables
Trade and other payables are initially measured at fair value, and are subsequently measured at amortised cost, using the effective interest
method.
l) Borrowings and borrowing costs
Borrowings are recognised initially at fair value, net of transaction costs incurred, and subsequently at amortised cost. Any difference
between the proceeds (net of transaction costs) and the redemption value is recognised in the income statement over the period of the
borrowings using the effective interest method.
Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least
12 months from the reporting date.
Borrowing costs, being interest and other costs incurred in connection with the servicing of borrowings, are recognised as an expense
when incurred.
m) Share based payments
The Group operates two share based compensation plans 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 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.
n) Leases
As described in note 1 to the Group accounts, the Group has applied IFRS 16 using the modified retrospective approach with effect from 1
January 2019 and therefore comparative information has not been restated. Comparative information is therefore still reported under IAS
17 and IFRIC 4.
The Company leases offices around the world. Rental contracts are typically made for fixed periods but may have extension options. Lease
terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease arrangements do not
impose any covenants, but leased assets may not be used as security for borrowing purposes.
109
ANNUAL REPORT AND ACCOUNTS 2019Notes to the Company Financial Statements Accounting policy applicable before 1 January 2019:
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.
Accounting policy applicable from 1 January 2019:
For any new contracts entered into on or after 1 January 2019, the Company considers whether a contract is, or contains a lease. A lease is
defined as ‘a contract, or part of a contract, that conveys the right to use an asset (the underlying asset) for a period of time in exchange for
consideration’. To apply this definition, the Company assesses whether the contract meets the following criteria:
•
The contract contains an identified asset, which is either explicitly identified in the contract or implicitly specified by being identified at
the time the asset is made available to the Company
The Company has the right to obtain substantially all of the economic benefits from use of the identified asset throughout the period of
use, considering its rights within the defined scope of the contract
•
• The Company has the right to direct the use of the identified asset throughout the period of use.
At the lease commencement date, the Company recognises the lease as a right-of-use asset and a corresponding liability on the statement
of financial position. The right-of-use assets have been included in property, plant and equipment.
The right-of-use asset is measured at cost, which is made up of the initial measurement of the lease liability, any initial direct costs incurred
by the Company, an estimate of any costs to dismantle and remove the asset at the end of the lease and any lease payments made in
advance of the lease commencement date (net of any incentives received).
The Company depreciates the right-of-use assets on a straight line basis from the lease commencement date to the earlier of the end of the
useful life of the right-of-use asset or the end of the lease term. The Company also assesses the right-of-use asset for impairment when
such indicators exist.
At the commencement date, the Company measures the lease liability at the present value of the lease payments unpaid at that date,
discounted using the interest rate implicit in the lease if that rate is readily available, or the lease specific incremental borrowing rate.
Subsequent to initial measurement, the liability will be reduced for payments made and increased for interest. Each lease payment is
allocated between the liability and finance cost. The finance cost is charged to the income statement over the lease period so as to produce
a constant periodic rate of interest on the remaining balance of the liability for each period. The liability is remeasured to reflect any
reassessment or modification, or if there are changes in in-substance fixed payments. When the liability is remeasured, the corresponding
adjustment is reflected in the right-of-use asset, or the income statement if the right-of-use asset is already reduced to zero.
Termination options are included in a number of property leases across the Company. These options are used to maximise operational
flexibility in terms of managing contracts. In determining the lease term, management considers all facts and circumstances that create an
economic incentive to exercise a termination option. Periods after termination options are only included in the lease term if the termination
option is reasonably certain not to be exercised.
The Company has elected to account for short term leases and leases of low-value assets using the practical expedients. Payments
associated with short term leases and leases of low-value assets are recognised on a straight line basis as an expense in the income
statement. Short term leases are leases with a term of 12 months or less. Low-value assets comprise IT and copying equipment with a value
of less than £5,000.
The Company sub-leases a number of properties in the UK however all of the risks and rewards of ownership have not been transferred to
the lessee and therefore the Company recognises the head lease asset as a right-of-use asset and recognises the rental income on the
sub-lease operating lease contracts as other income.
3. DIVIDENDS
The final dividend for 2018 was 7.5p per share and was paid in April 2019. The total dividend for the current year was 15.0 pence per share,
with an interim dividend of 5.0 pence per share paid on 3 October 2019 to shareholders on the register at the close of business on 30 August
2019 and a final dividend of 10.0 pence per share will be paid on 24 April 2020 to shareholders on the register at the close of business on 27
March 2020. The ex-dividend date will be on 26 March 2020.
110
ANNUAL REPORT AND ACCOUNTS 2019Notes to the Company Financial Statements
4. INTANGIBLE ASSETS
Computer software
Cost
As at 1 January 2018
Additions
As at 31 December 2018
Additions
As at 31 December 2019
Amortisation
As at 1 January 2018
Charge for the year
As at 31 December 2018
Charge for the year
As at 31 December 2019
Net book value
As at 31 December 2019
As at 31 December 2018
£000s
4,080
573
4,653
811
5,464
(3,024)
(758)
(3,782)
(535)
(4,317)
1,147
871
Brand
£000s
148
-
148
-
148
(37)
(49)
(86)
(49)
(135)
13
62
5. PROPERTY, PLANT AND EQUIPMENT
Cost
As at 1 January 2018
Additions
As at 31 December 2018
Adjustment on transition to IFRS 16
Additions
Disposals
As at 31 December 2019
Depreciation
As at 1 January 2018
Charge for the year
As at 31 December 2018
Charge for the year
Disposals
As at 31 December 2019
Net book value
As at 31 December 2019
As at 31 December 2018
Buildings
Leasehold
improvements
£000s
£000s
Computer
equipment
£000s
-
-
-
35,586
1,028
(99)
36,515
-
-
-
(2,833)
38
(2,795)
33,720
-
225
114
339
-
386
-
725
(67)
(28)
(95)
(44)
-
(139)
586
244
3,201
420
3,621
-
533
-
4,154
(2,565)
(427)
(2,992)
(401)
-
(3,393)
761
629
Buildings additions relate to recognition of right-of-use asset during the year.
Total
£000s
4,228
573
4,801
811
5,612
(3,061)
(807)
(3,868)
(584)
(4,452)
1,160
933
Total
£000s
3,426
534
3,960
35,586
1,947
(99)
41,394
(2,632)
(455)
(3,087)
(3,278)
38
(6,327)
35,067
873
111
ANNUAL REPORT AND ACCOUNTS 2019Notes to the Company Financial Statements
6. LEASES
The Company has leases for office buildings and motor vehicles. With the exception of short term leases and leases of low value underlying
assets, each lease is reflected on the statement of financial position as a right-of-use asset and a lease liability. The Company classifies its
right-of-use assets in a consistent manner to its property, plant and equipment (see note 5).
Lease liabilities are presented in the statement of financial position as follows:
Current lease liabilities
Non-current lease liabilities
31 December 2019
£000s
1,829
32,028
33,857
The table below describes the nature of the Company’s leasing activities by type of right-of-use asset recognised on the statement of
financial position:
No. of right-of-use
assets leased
Range of remaining
term
Average remaining
lease term
No of leases with
extension options
No of leases with
termination options
Office building
Motor vehicle
7
1
5-14 years
3 years
9 years
3 years
-
-
4
-
The lease liabilities are secured by the related underlying assets. Future minimum lease payments at 31 December 2019 were as follows:
Lease payments
Finance charges
Net present values
Within 1 year
1 to 5 years
After 5 years
£000s
3,043
(1,213)
1,830
£000s
14,255
(3,974)
10,281
£000s
25,285
(3,539)
21,746
Total
£000s
42,583
(8,726)
33,857
At 31 December 2019 the Company had not committed to any leases which had not yet commenced excluding those recognised as a lease
liability.
The Company sub-lets certain areas of its property portfolio. As at 31 December 2019, the Company had contracts with sub-tenants for the
following future minimum lease rentals:
31 December 2019
31 December 2018
£000s
£000s
1,274
1,274
1,274
1,274
1,274
6,578
12,948
824
824
824
824
769
3,204
7,269
Land and Buildings
Within 1 year
Within 1 to 2 years
Within 2 to 3 years
Within 3 to 4 years
Within 4 to 5 years
Over 5 years
112
ANNUAL REPORT AND ACCOUNTS 2019Notes to the Company Financial Statements 7. INVESTMENTS
Cost
As at 1 January 2018
Share based payments to employees of subsidiaries
As at 31 December 2018
Share based payments to employees of subsidiaries – scheme 1
Share based payments to employees of subsidiaries – scheme 2
As at 31 December 2019
Impairment
As at 31 December 2018 and 2019
Net book value
As at 31 December 2019
As at 31 December 2018
Group undertakings
£000s
179,719
5,679
185,398
10,882
134
196,414
(10,277)
186,137
175,121
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 net assets there is an indication of possible impairment, however 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.
8. TRADE AND OTHER RECEIVABLES
Prepayments
Other receivables
Amounts owed by group undertakings
Other taxation and social security
31 December 2019
31 December 2018
£000s
1,892
973
188,593
720
192,178
£000s
1,966
1,031
166,227
350
169,574
The carrying values are considered to be a reasonable approximation of fair value. The effect of discounting other receivables has been
assessed and is deemed to be immaterial to the results.
Following a review of collectability, the Company has impaired a total balance of £1,449,000 in relation to balances owed by group
undertakings (2018: nil). Note 13 of the Company accounts gives further details of management’s assessment of expected credit loss on
intercompany balances.
113
ANNUAL REPORT AND ACCOUNTS 2019Notes to the Company Financial Statements
9. DERIVATIVE ASSETS AND LIABILITIES
Short-term derivative assets
Short-term derivative liabilities
Net derivative asset/ (liability)
31 December 2019
31 December 2018
£000s
745
(73)
672
£000s
-
(1,408)
(1,408)
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 credit of
£2,080,000 (2018: cost of £1,553,000).
The Group uses derivative financial instruments to reduce its exposure to fluctuations in foreign currency exchange rates. Forward
exchange contracts have been entered into which has committed the below amount of currency to be paid in exchange for Sterling:
Expiring in the year ending:
31 December 2020
10. TRADE AND OTHER PAYABLES
Trade payables
Other payables
Accruals
Amounts owed to group undertakings
Euro
€’000
7,590
US Dollar
$’000
25,600
31 December 2019
31 December 2018
£000s
921
397
4,607
96,291
102,216
£000s
723
143
3,301
86,967
91,134
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. Amounts owed to related parties are repayable on
demand and non-interest bearing.
Dilapidations
Right-of-use assets
Dilapidations
Other
Total
£000s
£000s
£000s
-
-
-
77
77
-
77
199
(116)
(35)
52
100
-
100
199
(116)
(35)
129
177
-
177
11. PROVISIONS
At 1 January 2019
Release of provision
Utilised
Increase in provision
At 31 December 2019
Current:
Non-current:
114
ANNUAL REPORT AND ACCOUNTS 2019Notes to the Company Financial Statements 12. BORROWINGS
Short-term lease liabilities
Short-term borrowings
Current liabilities
Long-term lease liabilities
Long-term borrowings
Non-current liabilities
31 December 2019
31 December 2018
£000s
1,829
6,000
7,829
32,028
60,488
92,516
£000s
-
6,000
6,000
-
64,341
64,341
Total
£000s
70,341
35,118
105,459
(13,939)
6,425
222
1,049
1,129
-
100,345
The changes in the Company’s borrowings can be classified as follows:
As at 1 January 2019
Adoption of IFRS 16
Revised 1 January 2019
Cash flows:
- Repayment
- Proceeds
Non-cash:
- Loan fee amortisation
- Lease additions
- Lease liabilities2
- Reclassification
As at 31 December 2019
Short-term
borrowings
Long-term
borrowings
Short-term lease
liabilities1
Long-term lease
liabilities1
£000s
6,000
-
6,000
(6,000)
-
-
-
-
6,000
6,000
£000s
64,341
-
64,341
(4,500)
6,425
222
-
-
(6,000)
60,488
£000s
-
1,982
1,982
(3,439)
-
-
23
1,236
2,027
1,829
£000s
-
33,136
33,136
-
-
-
1,026
(107)
(2,027)
32,028
1 Amounts are net of rental prepayments and accruals
2 Represents lease interest, dilapidations and movement on lease liability accruals and prepayments
Term loan and RCF
In April 2017, the Group refinanced its debt position. The facility consists of a £30.0m term loan to replace the previous facilities held with
The Royal Bank of Scotland. This is repayable in quarterly instalments over five years, with total repayments due in the next 12 months of
£6.0m. The outstanding balance as at 31 December 2019 was £13.5m.
In addition to the term loan, the Group also has a revolving capital facility (RCF) of £70.0m. As at 31 December 2019, the Group had a total
draw down against the RCF facilities of £53.5m.
In addition to the drawn down facilities there is a letter of credit against the facility of £10.3m which has been provided to the Employee
Benefit Trust (EBT). This is in place in relation to a potential tax liability which management have assessed to be remote in likelihood of being
paid. As such, a provision has not been recognised in the statement of financial position.
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 2.25% over the London Interbank Offered Rate.
115
ANNUAL REPORT AND ACCOUNTS 2019Notes to the Company Financial Statements 13. FINANCIAL ASSETS AND LIABILITIES
The Company’s financial instruments are classified under IFRS, all at amortised costs, as follows:
Current assets
Cash
Other receivables
Amounts owed by group undertakings
Current liabilities
Bank overdraft
Trade payables
Other payables
Accruals
Amounts owed to group undertakings
Short-term borrowings
Non-current liabilities
Long-term borrowings
The Company’s financial instruments are classified under IFRS, at fair value, as follows:
Current assets
Short-term derivative assets
Current liabilities
Short-term derivative liabilities
31 December 2019
31 December 2018
£000s
£000s
574
973
188,593
190,140
-
(921)
(397)
(4,607)
(96,291)
(6,000)
(108,216)
(60,488)
(60,488)
-
1,031
166,227
167,258
(448)
(723)
(143)
(3,301)
(86,967)
(6,000)
(97,582)
(64,341)
(64,341)
31 December 2019
31 December 2018
£000s
£000s
745
745
(73)
(73)
-
-
(1,408)
(1,408)
116
ANNUAL REPORT AND ACCOUNTS 2019Notes to the Company Financial Statements
Maturity analysis
Current assets
Cash
Other receivables
Short-term derivative assets
Amounts owed by group
undertakings
Current liabilities
Short-term derivative liabilities
Trade payables
Other payables
Accruals
Short-term borrowings
Amounts owed to group
undertakings
Non-current liabilities
Long-term borrowings
Less than 1 month
1 to 3 months
£000s
£000s
3 months
to 1 year
£000s
1 to 5
years
£000s
574
-
-
-
-
-
-
-
-
-
-
574
-
973
261
-
(37)
(921)
-
(4,607)
(2,009)
-
-
-
-
484
-
(36)
-
(397)
-
(6,029)
-
-
(6,340)
(5,978)
Total
£000s
574
973
745
-
-
-
188,593
188,593
-
-
-
-
-
(96,291)
(73)
(921)
(397)
(4,607)
(8,038)
(96,291)
(63,120)
29,182
(63,120)
17,438
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 £4,670,000).
117
ANNUAL REPORT AND ACCOUNTS 2019Notes to the Company Financial Statements Reclassifications
There have been no reclassifications between financial instrument categories during the year ended 31 December 2019 and year ended 31
December 2018.
Please refer to note 21 of the Group accounts on financial assets and liabilities for the Group’s exposure to risk.
Credit risk
In the normal course of its business, the Company incurs credit risk from cash and other receivables. The Group has a credit policy that is
used to manage this exposure to credit risk, including credit checking prior to contracts being signed.
£190.1m of the Company’s assets are subject to credit risk (31 December 2018: £167.3m). The Company does not hold any collateral over
these amounts. Note 8 of the Company accounts give further details of the Company’s receivables, of which £188.6m are amounts
receivable from Group undertakings. Amounts receivable by group undertakings are repayable on demand and non-interest bearing with
the exception of £97m owed by GlobalData UK Limited provided to fund acquisitions, these balances are interest bearing at a rate of 5%.
In accordance with IFRS 9 management has made an assessment of the intercompany positions as at 31 December 2019 by reviewing the
liquid assets position of the counterparties as at the same date. Management have concluded that of the £188.6m receivable balance,
£50.5m is supported with sufficient liquid assets in the associated entities, supporting the conclusion that the liability can be repaid.
Management have thus determined that any expected credit losses would therefore be immaterial against these balances.
For the remaining balance of £138.1m the borrowing entities do not have sufficient highly liquid assets to repay the amounts owed, if
demanded at the reporting date. Management have therefore considered alternative recovery strategies including both a ‘repay over time’
strategy and an immediate ‘fire sale’ of the counterparty’s assets. In all instances management determined that the expected trading
cash flows from a ‘repay over time’ scenario and the liquid assets expected to be generated from a fire sale of assets would be sufficient to
cover the outstanding intercompany balances. Management have considered what scenarios would lead to a credit loss and consider the
likelihood of this to be remote as the value expected to be achieved on a fire sale or through repayments over time far exceed the amounts
outstanding. Consequently, the expected credit loss is determined to be immaterial. Any expected credit losses would be limited to the
effect of discounting the amounts due, as the effective interest rate is nil, management have concluded that any expected credit losses
would be immaterial.
The Company is owed £97m by GlobalData UK Limited which bears interest at 5%. Management have considered a potential fire sale scenario
and determined that under this situation cash would be realised within one to six months to settle the amounts due. Management have also
reviewed a ‘repay over time’ strategy and given the time period to realise cash is short under both scenarios, management have assessed
that that the effect of discounting would be immaterial and determined that any expected credit losses would also be immaterial.
14. RELATED PARTY TRANSACTIONS
Directors
The remuneration of the Directors of the Group and Company is set out on page 41 in the consolidated accounts of the Group within the
Directors' Remuneration Report.
Accommodation
GlobalData Plc rents three buildings from Estel Property Investments Limited, a company wholly owned by Mike Danson. The total
rental expense (net of sub-lease income), including service and management fees, in relation to the buildings owned by Estel Property
Investments for the year ended 31 December 2019 was £2,719,700 (2018: £2,551,900). In addition, GlobalData Plc sub-leases office space to
other companies owned by Mike Danson.
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
2019 was £556,100 (2018: £490,400).
118
ANNUAL REPORT AND ACCOUNTS 2019Notes to the Company Financial Statements Amounts outstanding to and from group undertakings
The amounts outstanding from group undertakings were:
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
SPG Media Group Limited
GlobalData Pte Limited
Globaldata Holdings Limited
CHM Research Limited
GlobalData Australia Pty Limited
GlobalData Brasil, serviços e informações empresariais Ltda.
Canadean Mexico Y Centro America, F. De R.L. De C.V
World Market Intelligence Inc
GlobalData Canada Ltd
Progressive Media International Middle East FZ LLC
Progressive Media Ventures Limited
Attentio Research Limited
TMN Media Ltd
GlobalData Singapore Pte Limited
World Market Intelligence Pty Limited
AROQ Limited
World Market Intelligence Limited
Research Views Limited
31 December
2019
£000s
31 December
2018
£000s
-
112,241
17,399
24,412
-
2,223
-
1,035
11,290
21
1,309
299
405
32
-
-
9,986
-
-
1,985
-
1,692
3,797
467
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
188,593
166,227
119
ANNUAL REPORT AND ACCOUNTS 2019Notes to the Company Financial Statements Amounts owed by group undertakings:
Internet Business Group Limited
Attentio Research Limited
Progressive Media Group Limited
Globaldata Canada Inc
Verdict Media Limited
Kable Business Intelligence Limited
Cornhill Publications 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
(5,116)
(837)
(75,248)
(152)
(24)
-
-
(4,646)
(555)
(1,841)
-
-
(2,653)
(148)
(3,268)
-
(889)
-
(599)
(313)
-
(2)
(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)
None of the transactions with group undertakings incorporate special terms and conditions and no guarantees were given or received.
Outstanding balances are usually settled in cash.
(96,291)
(86,967)
120
ANNUAL REPORT AND ACCOUNTS 2019Notes 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 Corporate Broker
N+1 Singer Advisory LLP
1 Bartholomew Lane
London
EC2N 2AX
Corporate Broker
J.P. Morgan Cazenove
25 Bank Street
Canary Wharf
London
E14 5JP
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
121
ANNUAL REPORT AND ACCOUNTS 2019 Head Office and Registered Office
John Carpenter House
John Carpenter Street
London
EC4Y 0AN
Tel: + 44 (0) 20 7936 6400
124
ANNUAL REPORT AND ACCOUNTS 2016Chief Executive’s ReportStrategic Report