GlobalData Plc
Annual
report &
accounts
For the year ended 31 December 2022
www.globaldata.com
COMPANY NO. 03925319
Contents
STRATEGIC REPORT
2022 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
Directors’ Section 172(1) Statement
Going Concern and Viability
DIRECTORS’ REPORT
The Directors
Corporate Governance Report
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 Changes in Equity
Notes to the Company Financial Statements
Advisers
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8
9
13
15
18
26
34
38
40
43
50
54
59
71
72
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87
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89
137
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139
146
Reliance on this document
Our Business Review on pages 4 to 25 has been prepared in accordance with the Strategic Report requirements of section 414C(2)(a) 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.
ANNUAL REPORT AND ACCOUNTS 2022
3
Strategic Report
2022 Highlights
Key performance metrics
Revenue: +28%
Underlying growth1: +10%
2022
2021
Operating profit: +47%
2022
2021
Adj. EBITDA2: +34%
2022
2021
Adj. EBITDA margin2: +2p.p.
2022
2021
Statutory profit before tax (PBT): +18%
2022
2021
Earnings per share (EPS): +24%
2022
2021
Adj. EPS3: +20%
2022
2021
Total dividends: +35%
2022
2021
Invoiced Forward Revenue4: +24%
Underlying growth: +12%
2022
2021
Net bank debt5: +41%
2022
2021
£189.3m
£38.2m
£64.4m
£32.6m
21.9p
36.2p
19.3p
£107.7m
£177.6m
£243.2m
£56.0m
£86.4m
36%
34%
£38.4m
27.1p
43.3p
26.0p
£133.5m
£249.6m
“We have stated publicly that our aim was to achieve
annual underlying growth of 10% and to see our
Adjusted EBITDA margin mature into the 35-40%
range. During the year, we continued our underlying
growth momentum and margin progression whilst
creating value from our M&A strategy.”
Murray Legg, Chairman
4
ANNUAL REPORT AND ACCOUNTS 2022
Strategic Report
Strategic Report
Financial Highlights
Strong growth
in both revenues
and profit means
we delivered our
‘rule of 40’ goal
Adjusted EBITDA2
up 34% to
£86.4m
(2021: £64.4m) and
Adjusted EBITDA
margin2 improvement of
2 percentage points to
Statutory PBT
grew by £5.8m to
£38.4m
(2021: £32.6m)
reflecting an 18%
increase on prior year
Operating cash flow
grew by 41% to
£85.4m
(2021: £60.5m)
which was
Underlying1 revenue growth
of 10%, underpinned by
subscriptions –
81%
of total revenues
Demonstrates the
significant opportunity for
GlobalData to grow revenue
organically, aided by the
benefit of acquisitions
and currency tailwinds for
reported growth of
28%
36%
Continued improvement
of Invoiced Forward
Revenue4 growth of
24% up to
£133.5m
at 31 December 2022
(2021: £107.7m), which
includes underlying
growth of
12%
– the benefit of acquisitions
and currency tailwinds
99%
of Adjusted EBITDA
(2021: 94%)
Final dividend of
18.3p
up 39% (2021: 13.2p); total
dividend of 26.0p, up 35%
(2021: 19.3p)
Note 1: Underlying growth: Defined as growth in business excluding impact of movement in exchange rates and adjusts for the proforma results of acquired
business.
Note 2: Adjusted EBITDA: Earnings before interest, tax, depreciation and amortisation, adjusted to exclude costs associated with acquisitions, restructuring
of the Group, share-based payments, impairment, unrealised operating exchange rate movements and the impact of foreign exchange contracts. Adjusted
EBITDA margin is defined as: Adjusted EBITDA as a percentage of revenue. This is reconciled to the statutory operating profit on page 19.
Note 3: Adjusted EPS: Adjusted profit after tax per share (reconciliation between statutory profit and adjusted profit shown on page 19).
Note 4: 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. This is reconciled to deferred revenue on page 24.
Note 5: Net bank debt: Short and long-term borrowings (excluding lease liabilities) less cash and cash equivalents.
ANNUAL REPORT AND ACCOUNTS 2022
5
Strategic Report
2022 Highlights
Delivering on our
Growth Optimisation Plan
via four key pillars:
– Customer Obsession
– World-Class Product
– Sales Excellence
– Operational Agility
Completed refinancing
to support future
M&A strategy
Customer Obsession remains
our number one priority
– Enhanced our client
relationships with focused
initiatives contributing to
improved renewal rates,
increased average client
value and continued traction
with multi-year deals
Continued investment
in our World-Class
Product, embedding
artificial intelligence
and machine learning
– Scalable ‘One Platform’
now covers 20 sectors,
delivering must-have
critical information
– Our unique platform
is ideally positioned
to integrate new
datasets and verticals
Delivering
Operational Agility
with continued
disciplined
approach to cost
Focus on strong
Sales Excellence
driving results
– We start the year
with 80% visibility
of budgeted
revenues for 2023
Immediate value derived
following completion of two
further strategic acquisitions
– Media Business Insight –
a new vertical with deep
media sector intelligence
– TS Lombard – bringing
global economic and political
research filling a gap in
thematic intelligence
– Integrations on track
Current Trading and Outlook
• Entering the new financial year from a position of strength and scope for further
margin improvement.
• Set to deliver resilient growth – uncertainty driving demand for our ‘gold standard’
data, delivered through our One Platform.
• A focused approach to cost management and capital discipline, including
mitigating the impact of inflation through advancements in technology and
efficiency savings, whilst ensuring the business remains appropriately invested
for sustainable growth and systematic M&A activity.
• Clear financial targets for FY23 and beyond:
• In FY23, at least 10% underlying revenue growth, Adjusted EBITDA margin of 40%.
• Beyond FY23, platform in place to drive further margin enhancement through
organic and inorganic growth.
6
ANNUAL REPORT AND ACCOUNTS 2022
“Uncertainty drives demand
Strategic Report
for our business. Our mission
critical data is a ‘must-have’
rather than ‘nice to have’
for a wide range of blue-
chip corporates, and once
embedded, provides all the
insight our clients need to
navigate a challenging
macro backdrop.”
Mike Danson, Chief Executive
ANNUAL REPORT AND ACCOUNTS 2022
7
Principal Activity: The principal activity of GlobalData
Plc and its subsidiaries (‘the Group’) is to provide business
information in the form of high-quality proprietary data,
analytics, and insights to clients in multiple sectors.
Our Mission: To help our clients to decode the future, make
better decisions, and reach more customers.
Our Vision: To be the leading data, analytics, and insights
platform for the world’s largest industries.
A snapshot of our Group as at 31 December 2022:
20
industry
sector
coverage
3,652
employees
4,700+
clients
31 December 2022
8
ANNUAL REPORT AND ACCOUNTS 2022
Strategic Report
Our Business
OUR BUSINESS MODEL
The Group provides services across a breadth of industry markets and
functions, on a global scale on One Platform. 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.
The visible and recurring revenue base creates a resilient business
model, with subscriptions making up over 80% of revenue. The balance
of our revenue is made up of ancillary services such as bespoke
consulting, single copy reports and events, which all harness our core
assets.
The solutions 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.
Our clients typically subscribe for 12 months’ access. This approach
drives the following business model attributes:
GlobalData’s client base is globally diversified, which reflects our globally
relevant data assets and gives the Group significant market opportunity.
The Group assesses potential M&A targets and looks for the same
business model fundamentals in its targets, which enables greater
alignment and integration opportunities.
Scalable and
defensible position
Large, diversified
opportunities with
attractive tailwinds, strong
competitive moat and an
agile, scalable company
with One Platform.
Strong cash
flow generation
Low capital requirements
and mostly advance
customer payments support
high cash flow conversion,
working capital benefits and
capacity for reinvestment.
Recurring revenue
Highly recurring
subscription
revenue, with high
retention and
revenue visibility.
High incremental
margins
Significant operating
leverage due to
“build once, sell
multiple times”
model, and a largely
fixed cost base.
ANNUAL REPORT AND ACCOUNTS 2022
9
Strategic Report
Our Business
CAPITAL ALLOCATION
Our objective is to achieve long-term compounding growth and maximise shareholder returns. The Group looks at resources to deliver growth whilst
also maintaining a focus on profitability. We use an investment concept called ‘rule of 40’ which scores businesses by adding their underlying revenue
growth to their Adjusted EBITDA margin. Our ambition is to exceed 50, i.e. ‘rule of 50’, as follows:
Volume Renewal
Cost Discipline
Reinvestment
GROWING OUR REVENUE
Consistent 10%+ Growth
Value Renewal
+
New Logo
INCREASING OUR PROFITABILITY
Adj. EBITDA Margin +40%
Scalable Model
+
Technology Investment
+
+
+
+
M&A
Process Optimisation
REINVEST AND RETURN CAPITAL
+
Acquisitions
+
Dividends/Share buy-backs
INVESTING IN GROWTH
CAPITAL RETURN
Reinvestment
Acquisitions
Dividends
Share Purchase
The cash generative and high
margin nature of our business
provides good optionality
on capital allocation. As a
Board, we feel committing
to a progressive dividend
policy demonstrates good
financial discipline and careful
stewardship.
We intend to grow dividends
in line with Adjusted EBITDA.
The Company has a policy
to try and limit the dilution
of its existing shareholders
created via the Group’s
Long-Term Incentive Plans.
As at 31 December 2022, the
Group had 7.1m options in
issue and 5.6m shares held
in treasury within the Group’s
Employee Benefit Trust. This
coverage eliminates the
immediate dilution of the
share options schemes.
M&A is a significant growth
strategy for our business.
Our scalable One Platform
infrastructure enables
us to efficiently integrate
new datasets and content
capabilities into our existing
vertical offerings or expand
our breadth into new vertical
markets, enabling the Group
to realise synergies and value.
Our management team has
extensive experience of
acquiring and integrating
assets and we currently
have an active pipeline of
businesses that we are
assessing and the firepower
to execute.
The Group benefits from
significant operating leverage
due to stable fixed costs and a
lower variable cost model that
generates long-term margin
expansion in an accelerating
revenue growth environment.
Our operating cost base is
very agile and has investment
embedded within ‘business-as-
usual’ for Customer Obsession,
new product development and
software and IT enhancements.
This agility allows us to direct
our resources to focus on
underlying growth.
We have a low capital intensity
model: capital spend typically
represents 1-1.5% of revenue
(2022: 1.1%, 2021: 0.7% following
significant investment in 2020
due to IT investment during the
pandemic).
The Group uses debt to fund acquisitions and purchase shares for the Employee Benefit Trust and targets an operating leverage of two to three times
net leverage, being the multiple of Adjusted EBITDA (including the proforma results of recent acquisitions) compared to net bank debt.
10
ANNUAL REPORT AND ACCOUNTS 2022
Strategic Report
Our Business
OUR PURPOSE – WHY DO WE EXIST?
In an increasingly fast-moving, complex, and uncertain world, it’s
becoming more important for businesses and professionals to:
successfully predict and navigate the future;
•
• make the right business decisions, at the right time; and
•
effectively find, win, and keep customers.
We want to help our clients to decode the future, make better decisions,
and reach more customers. We believe Information and Technology are
forces for good.
ONE PLATFORM
GlobalData’s One Platform model is the foundation of our strategic
advantage and is the result of years of continuous capital investment,
targeted acquisitions, and organic development.
Our unified model governs everything we do, from how we develop and
manage our products to our approach to sales and customer success,
and supporting business operations.
At its core, this approach integrates our entire universe of unique data,
expert analysis, and innovative solutions into One Platform, providing
easy access to a complete and comparable view of the world’s largest
industries.
As a result of our unified model, we can respond rapidly to changing
customer needs and market opportunities, and continuously manage
and develop products quickly, at scale, with minimal capital investment,
as well as integrate acquisitions quickly and unlock synergies.
GROWTH OPTIMISATION PLAN
We launched our Growth Optimisation Plan in 2020, and our clear focus
is on sustainable growth delivered through four key pillars: Customer
Obsession, World-Class Product, Sales Excellence and Operational
Agility. The key word in this plan is “optimisation”, hence we are not
reliant on a single area of growth to be successful. We have multiple
levers for growth, both in our underlying business and through
M&A opportunities.
Customer Obsession
•
•
Develop a trusted, global brand synonymous with
delivering exceptional customer value and service;
Develop a global community of engaged
professionals; and
industry
• Maintain a customer-centric culture that informs our
strategy, operating model, and business decisions.
World-Class Product
•
•
•
Develop an integrated suite of winning propositions with
clear competitive differentiation;
Provide “must-have” capabilities that are integral to our
clients and daily lives of professionals; and
Consistently lead the market in commercialising new
product development and innovation.
Sales Excellence
•
•
•
targeted campaigns and
Consistently deliver best-in-class sales productivity
through
tailored sales
enablement;
Provide new salespeople with the structured on-boarding
support required to accelerate “time-to-target”; and
Invest in the technology, people, and processes required
to deliver exceptional experiences across the customer
journey.
Operational Agility
•
•
•
Use our unified operating model and One Platform to
create an integrated portfolio greater than the sum of its
parts;
Ensure we have the organisational structure, capabilities
(e.g. people, process, technology), and high-performance
culture to execute; and
Provide effective portfolio-wide planning, business insight
and performance reporting, and governance.
ANNUAL REPORT AND ACCOUNTS 2022
11
“At GlobalData we believe
that information and
technology are forces for
good and our products and
solutions can be a catalyst
for positive change. For us,
a responsible business is all
about building a company
with great people, creating a
positive impact, and helping
our customers leverage the
proprietary granular data and
insight we provide to help
understand their business
issues and develop long-term
sustainable strategies.”
Murray Legg, Chairman
I would like to thank the Remuneration Committee for their
conscientious review of our Long-Term Incentive Plan (LTIP)
programmes. The review resulted in modifications made to ensure
key employees are appropriately incentivised through clear, simple
and predictable plans. This will undoubtedly ensure there continues
to be meaningful collective incentives to drive GlobalData forward
and achieve our goals.
We have significantly increased the level of shareholder interaction
in the year and increased the availability of Management to meet
with shareholders and potential investors, including more one-
to-one meetings with investors, a Capital Markets Day in which
we discussed the business and its strategy and improving our
communications channels with shareholders and the investment
community.
Dividend
We are pleased to propose a final dividend of 18.3 pence per share
(2021: 13.2 pence), to be paid on 28 April 2023 to shareholders
on the register at the close of business on 31 March 2023. The
ex-dividend date will be on 30 March 2023. The proposed final
dividend increases the total dividend for the year to 26.0 pence per
share (2021: 19.3 pence), an increase of 35% in line with growth in
Adjusted EBITDA.
We enter 2023 in a strong position and are confident about the
outlook ahead.
Murray Legg
Chairman
27 February 2023
Strategic Report
Chairman’s Statement
2022 was a significant year of further development for GlobalData.
I would like to thank all my GlobalData colleagues and congratulate
them on a strong set of results and continued execution of the
Group’s strategy. This result is particularly impressive set against
a tough macro-economic backdrop. We have stated publicly that
our aim was to achieve annual underlying growth of 10% and to see
our Adjusted EBITDA margin mature into the 35-40% range and I
would therefore like to give further acknowledgement to the team
for helping us achieve these goals in 2022.
During the year, we continued our underlying growth momentum
and margin progression whilst creating value from our M&A strategy.
Over the past 15 months, we have completed four transactions
which have added scale and capabilities to the Group. I am pleased
with the integration progress made so far, with now only limited
integration steps to complete as we enter 2023. Great strides have
been made this year to scale and leverage our One Platform, which
gives us a significant opportunity to seek out strategic acquisitions
and assets which can add further value to the Group and to our
clients. With the additional firepower secured to fund our ambitions
we will continue to maintain momentum in executing our stated
M&A strategy.
Making an impact
In our CEO report, we detail how our Growth Optimisation Plan,
launched in 2020 and focused on sustainable growth across
several levers, is delivering value. I want to take the opportunity
here to highlight that the plan is underpinned by sustainability.
This is something the Board and management team are extremely
passionate about.
At GlobalData we believe that information and technology are
forces for good and our products and solutions can be a catalyst
for positive change. For us, a responsible business is all about
building a company with great people, creating a positive impact,
and helping our customers leverage the proprietary granular data
and insight we provide to help understand their business issues and
develop long-term sustainable strategies.
In 2022, we invested significant resource into the product and
created a real culture of innovation and product development, with
a strong focus on quality. We are acutely focused on Customer
Obsession and we will be driving forward growth initiatives to
further embed our data, insights, tools and workflows into our
4,700+ customers’ businesses. The sophistication and breadth
of our content enables opportunities beyond the traditional
departments that procure Information Services. We intend to get
to know our clients better, listen to their business problems and
provide the solutions for them to succeed.
Our stakeholders
We have made significant progress in developing our relationships
with key stakeholders and have focused on several initiatives to
further enhance these. For our clients, we continued to invest in
our customer success teams and the usability of the product.
It is satisfying to see the impact of this through year-on-year
improvements in our renewal rates, which forms much of our
growth engine.
ANNUAL REPORT AND ACCOUNTS 2022
13
Chief Executive’s Report
“GlobalData enters the
Strategic Report
new financial year from a
position of strength with
80% revenue visibility for
FY2023 and scope for
further margin improvement.
The management team at
GlobalData have clear financial
targets for the year of at
least 10% underlying revenue
growth and Adjusted EBITDA
margins of 40%.”
Mike Danson, Chief Executive
14
ANNUAL REPORT AND ACCOUNTS 2022
Strategic Report
Chief Executive’s Report
At GlobalData we are on a mission to help our c.4,700 clients
to decode the future, make better decisions, and reach more
customers. In the last 12 months, clear progress has been made to
enhance our position as a leading intelligence and insights platform
through sustained underlying momentum and further execution of
our M&A strategy.
Uncertainty drives demand for our business. Our mission critical
data is a ‘must-have’ rather than ‘nice to have’ for a wide range of
blue-chip corporates, and once embedded, provides all the insight
our clients need to navigate a challenging macro backdrop. We
create our intelligence from a deep pool of experts across the globe,
including 2,000 analysts and researchers, 250 data scientists and
100 journalists.
Continued momentum in 2022 has been clearly demonstrated
through our strong financial and operational performance. Investing
for growth throughout 2022, in our people and in our scalable One
Platform, which now covers 20 sectors, has enabled the Group
to enhance its highly valued, must-have, critical information to a
growing global customer base.
We have now reached the next stage of our development; the
‘leveraging the platform’ phase is where we intend to capitalise
on the multiple levers open to us to create growth. As we enter
the new financial year, the management team and Board remain
long-term, compounding growth and
focused on delivering
shareholder returns.
UNDERLYING GROWTH
With a continued strong performance throughout the year, I am
pleased to report that GlobalData successfully delivered its near-
term financial target of at least 10% revenue growth and Adjusted
EBITDA margin of 35-40%. In the last five years, subscriptions have
grown from approximately 70% of revenues to more than 80%, with
margin nearly doubling.
The Group reported revenue of £243.2m (2021: £189.3m), including
10% underlying growth. Operating profit grew by 47% to £56.0m
(2021: £38.2m) and Adjusted EBITDA increased by 34% to £86.4m
(2021: £64.4m). The growth in Adjusted EBITDA was driven by our
strong revenue growth and our ability to control what is a relatively
fixed cost base, delivering an Adjusted EBITDA margin of 36%.
The Group had a strong finish to the year with underlying Invoiced
Forward Revenue growth of 12% at 31 December 2022, with overall
growth of 24%.
Traction with our subscription model continued through the year,
with improving renewal rates evidenced in both volume and value at
84% (2021: 83%) and 101% (2021: 97%) for our larger clients (>£20k)
respectively. We have demonstrated our ability to optimise pricing
in 2022 and there remains significant opportunity to continue
with price increases and deliver enhanced value for customers,
particularly in recently acquired businesses. As a result, with
inherently predictable and recurring revenue, the Group enters the
new financial year with c.80% revenue visibility for FY2023.
A continued trend is the growth of multi-year deals. Over the last
three years, multi-year deals by value have grown from 20% to
39%, which highlights the strength of our product, the criticality
of our platform to our customers and the growing resilience of our
revenue growth.
PLATFORM IDEALLY POSITIONED TO INTEGRATE NEW
DATASETS AND VERTICALS
is also supported by strategic M&A
Our underlying growth
opportunities. Our scalable platform
ideally positioned to
integrate new datasets and content into our existing vertical
offering or expand our breadth into new vertical markets. Our M&A
strategy is disciplined and systematic, with value creation being a
core competence of the Group.
is
Following completion of the Life Sciences acquisition in November
2021 and LMC in December 2021, we completed two more
acquisitions during 2022. We acquired Media Business Insight (MBI)
in June 2022, bringing new and unique gold standard datasets
across the film, TV and media markets to GlobalData. This, combined
with our existing Technology content, provides the Group with a new
vertical with deep media sector intelligence and related services
while strengthening clients’ access to a more comprehensive range
of industry expertise.
In September 2022, we announced the completion of the TS Lombard
acquisition, which provides global economic and political research
to businesses and financial markets to clients across the globe, with
a particular strength in China and emerging markets. This move
further enables us to sell our full product suite, not only to the asset
management industry, but increasingly to other corporates, and
it has been integrated onto the GlobalData platform. TS Lombard
brings to us a strong team of research analysts and economists
who have on-the-ground networks and insights from developed
and emerging markets. This addition has helped us to fill a gap in
our thematic intelligence offering, allowing us to arm clients with a
globally integrated macro story which in times of uncertainty is in
increasing demand as clients seek to navigate and make sensible,
proactive decisions quickly.
We welcome these new businesses into the GlobalData family. Both
represent strategic bolt-on acquisitions of data assets, efficiently
complementing our One Platform model and adding value to our
global and scalable product.
In August 2022, we agreed a new three-year £410m debt financing
facility which will be used to support our long-term growth,
including future M&A opportunities.
ANNUAL REPORT AND ACCOUNTS 2022
15
Strategic Report
Chief Executive’s Report
DELIVERING OUR GROWTH OPTIMISATION PLAN
The Growth Optimisation Plan, launched in 2020, is our framework to
invest for growth with the aim to be the leading data, analytics, and
insights platform for the world’s largest industries. As a responsible
business, sustainability sits at the heart of our plan and, as a team,
GlobalData is a firm believer that our Company can drive positive
change and be a force for good through our critical information and
technology innovations.
With multiple levers for growth, supplemented with M&A activity, we
are delivering on the Plan via four key pillars: Customer Obsession,
World-Class Product, Sales Excellence and Operational Agility.
1) Customer Obsession remains our number one priority
Customer Obsession remains our priority and is central to our
strategy. It runs through everything we do, and we continue to
focus on client needs and on providing unique and innovative
solutions. We strive to maintain strong customer relationships and
endeavour to build even deeper relationships.
Our ongoing initiatives are aimed at providing clients with world-
class solutions delivered with exceptional levels of service. Our
focus on top-tier clients is gaining traction, and we continued to
increase resources throughout the year, enhanced usability and
grew via our top-750 programme.
Usage of our product is aimed at multiple use cases and job
functions within an organisation, giving opportunity to expand
usage within our existing clients, resulting in more seats taken. This
focus meant that Average Client Value improved 13% in 2022 to
£47,900 (2021: £42,400).
The net result of our Customer Obsession is improving renewal
rates by volume and value, as well as greater levels of profitability.
Looking ahead, we remain laser focused on improving in the
different areas of Customer Obsession. This should enhance some
of our key operational metrics: for example, the volume renewal
rate in 2022 for clients paying more than £20,000 p.a. was 84%; a
priority is to increase volume renewal rates to over 90% or more over
the medium term.
2) Continued investment in our World-Class Product provides a
resilient model, geared for growth
We have developed a World-Class Product enabling us to offer
our clients ‘gold standard’ data. Our unique selling point is the
intelligence created by more than 800 analysts, 2,000 researchers
and 100 journalists in our business. Our One Platform empowers the
world’s largest 20 industries and is highly scalable. Having invested
in our technology stack and enhanced our artificial intelligence
powered solutions through the year, we are now able to offer a more
personalised experience to our clients.
We continue to invest in our product, to keep it best-in-class and
scalable. This is particularly evident in our efforts to optimise the
production of our digital content with investments in artificial
intelligence and machine learning, which are now truly embedded
in our offering.
Our routes to market continue to expand with our multiple media
sites. Our media assets provide limited free-to-access insight
through to high value, paywalled custom products and continues to
prove a powerful go-to-market proposition, driving new customers
up the value curve over time.
We are focusing on usability and strong adoption across our entire
user base, ensuring that our newly acquired assets integrate
efficiently and provide immediate synergies for our business and
our clients.
Following the successful integration of the Life Sciences business
as well as the LMC integration, we are now on the final stretch to
fully integrate our most recent acquisitions of MBI and TS Lombard.
We are already seeing the immediate value of these new assets.
TS Lombard has significantly expanded our Thematic Intelligence
capability, strengthening our “macro themes” product and making
GlobalData a market leader in tech, industry, macro and ESG
themes. Through this acquisition, we have also gained exposure to
TS Lombard’s clients, who are predominantly institutional investors,
a market in which we have historically been underrepresented.
The depth of industry verticals we cover, combined with our One
Platform approach, provides c.4,700 businesses around the world
with mission-critical data to make informed business decisions. As
a result, we are seeing improving customer retention, pricing power
and an increasing shift to multi-year deals.
3) Acute focus on Sales Excellence is driving results
Our sales teams performed well during 2022, delivering 10%
underlying growth in the year and 12% underlying growth in
Invoiced Forward Revenue.
Looking ahead, our sales teams have a clear focus on the key
levers for growth. Linked to our Customer Obsession initiatives,
our ambitious target is to take our volume renewal rate in our larger
clients (>£20,000) from 84% to over 90%, through increasing client
engagement and enhancing client and user experience. We will also
look to embed further AI-driven tools into our renewals workflow,
both in terms of helping our clients derive more value from their
partnership and also to alert internal teams on the health of our
client relationships. Reducing the churn of our existing clients sets
a greater platform for growth and de-risks some of the upsell and
new business growth levers.
We continue to see a significant opportunity to add greater value
to our existing clients, including via sales synergies in acquired
businesses. There is also a large white space in the market, for
example, where we believe there are 125,000 client opportunities,
with significant latent growth in the US and professional services
markets.
16
ANNUAL REPORT AND ACCOUNTS 2022
CURRENT TRADING AND OUTLOOK
As stated in the recent year-end trading update, GlobalData enters
the new financial year from a position of strength with 80% revenue
visibility for FY2023 and scope for further margin improvement. The
business continues to deliver resilient growth. Uncertainty is driving
demand for our business, as customers continue to rely on and
embed our ‘gold standard’ data, delivered through our One Platform.
As we enter the new financial year, we maintain a focused approach
to cost management and capital discipline, whilst ensuring the
business remains appropriately invested for sustainable growth and
opportunistic on M&A activity.
The management team at GlobalData have clear financial targets
for the year of at least 10% underlying revenue growth and Adjusted
EBITDA margins of 40%, which leaves us well positioned to deliver
on the ‘rule of 50’ in the longer term.
Mike Danson
Chief Executive
27 February 2023
Strategic Report
Chief Executive’s Report
4) Demonstrating Operational Agility with disciplined
approach to cost
With an ongoing disciplined approach to cost, we continue to
maintain a largely fixed cost base. During the year, as we have
invested heavily in advancing our product, we have been able to
achieve price increases for our renewing clients as we continue
to push more relevant content, in a timely manner and in an
increasingly personalised way – just as our clients want it.
In August 2022, GlobalData secured a new three-year £410.0m debt
financing facility, providing the Group with additional firepower to
execute its M&A growth strategy. This facility matures on 5 August
2025, with an option to extend further by a year. The debt facility
comprises a £290.0m term loan, to be used in part to repay existing
indebtedness of £229.2m, as well as a Revolving Credit Facility
(“RCF”) of £120.0m. The RCF is currently undrawn, but will be used
to support long-term growth of the business, including M&A.
We thank our existing lenders, who have all extended their support
through participation in this issuance, plus our new lenders as
we seek to create shareholder value through further strategic
acquisitions.
We have a clear capital allocation policy to operate within 2-3x
net bank debt leverage, in relation to EBITDA. The Group reviews
leverage on a look forward basis and the high degree of visibility
it has on its revenue and earnings gives the Group comfort.
Furthermore, the free cash flow profile of the business sees the
Group de-lever reasonably quickly subject to any additional M&A
and share buy-backs.
OUR COLLEAGUES
We have delivered another strong set of results and our success is
underpinned by the talent and dedication of our GlobalData team.
Investment in enhancing our One Platform and in our people has
continued throughout the year and I am confident that through
our acute focus on our Growth Optimisation Plan we will celebrate
further achievements in 2023 and beyond.
I would like to thank all my GlobalData team and welcome the new
colleagues who have joined us and bring a wealth of knowledge
via the MBI and TS Lombard acquisitions. Together, we are building
a responsible business that invests in its people and our clients’
success, delivering highly valued, must-have, critical information to
a growing audience.
ANNUAL REPORT AND ACCOUNTS 2022
17
Strategic Report
Chief Financial Officer’s Report
Revenue Growth Bridge (£m)
Increasing Profitability (£m)
245
235
225
215
205
195
185
100
90
80
70
60
50
40
30
20
10
0
25
243
21
8
189
2021 Revenue Currency Underlying M&A 2022 Revenue
Adj EBITDA Margin Progression (£m)
Adj EBITDA
Margin
34%
64
32%
57
36%
86
36%
35%
34%
33%
32%
31%
30%
29%
70
60
50
40
30
20
10
0
90
80
70
60
50
40
30
20
10
0
PBT
Adj PBT
51
33
44
29
61
38
2020 2021 2022
Highly Cash Generative (£m)
Free cash flow
Operating cash flow
85
60
46
61
51
59
2020 2021 2022
2020 2021 2022
Explanatory notes
Currency gains – the Group benefitted from currency movements of £8m in the year, mainly through movements in the USD to GBP conversion.
Revenue Growth Bridge: The chart tracks the movement in revenue from 2021 to 2022, categorising into the following areas:
•
•
•
Increasing Profitability: The chart tracks the profitability changes from 2020-2022 on both a statutory and adjusted basis. Adjusted profit before tax is
Underlying – defined as growth in business excluding impact of movement in exchange rates and adjusts for the proforma results of acquired business.
M&A – the acquired revenue, according to the previous 12 months prior to acquisition.
reconciled on page 19.
Adjusted EBITDA Margin Progression: Earnings before interest, tax, depreciation and amortisation, adjusted to exclude costs associated with acquisitions,
restructuring of the Group, share-based payments, impairment, unrealised operating exchange rate movements and the impact of foreign exchange contracts.
Adjusted EBITDA margin is defined as: Adjusted EBITDA as a percentage of revenue. This is reconciled to the statutory operating profit on page 19.
Highly Cash Generative: The chart tracks cash generation from 2020-2022 on both a statutory operating cash flow basis and free cash flow basis. Free cash
flow is reconciled on page 19.
18
ANNUAL REPORT AND ACCOUNTS 2022
Strategic Report
Chief Financial Officer’s Report
£m
Revenue
Operating profit
Adjusting items
Depreciation
Amortisation of acquired intangible assets
Amortisation of software
Share-based payments charge
Costs relating to share-based payments scheme
Restructuring and refinancing costs
Unrealised operating foreign exchange loss/(gain)
M&A and contingent consideration costs
Adjusted EBITDA
Adjusted EBITDA margin1
Statutory profit before tax
Amortisation of acquired intangible assets
Share-based payments charge
Costs relating to share-based payments scheme
Restructuring and refinancing costs
Unrealised operating foreign exchange loss/(gain)
M&A and contingent consideration costs
Adjusted profit before tax
Adjusted income tax expense2
Adjusted profit after tax
Cash flow generated from operations
Interest paid
Income taxes paid
Principal elements of lease payments
Purchase of intangible and tangible assets
Free cash flow
Operating cash flow conversion %3
Free cash flow conversion %4
Earnings attributable to equity holders:
Basic earnings per share (pence)
Diluted earnings per share (pence)
Adjusted basic earnings per share (pence)
Adjusted diluted earnings per share (pence)
Year ended
31 December 2022
Year ended
31 December 2021
243.2
56.0
6.4
9.1
1.0
4.1
0.9
2.5
2.5
3.9
86.4
36%
38.4
9.1
4.1
0.9
2.5
2.5
3.9
61.4
(12.6)
48.8
85.4
(14.0)
(9.5)
(5.9)
(2.7)
53.3
99%
87%
27.1
26.2
43.3
41.9
189.3
38.2
6.8
5.6
0.9
9.2
-
1.4
(0.1)
2.4
64.4
34%
32.6
5.6
9.2
-
1.4
(0.1)
2.4
51.1
(10.0)
41.1
60.5
(3.4)
(5.1)
(5.8)
(1.3)
44.9
94%
88%
21.9
20.2
36.2
33.4
1 Adjusted EBITDA margin is defined as: Adjusted EBITDA as a percentage of revenue. Note 2 discloses the rationale for the adjusting items in detail.
2 Adjusted income tax expense represents the statutory income tax expense adjusted for the tax effect on adjusting items. In addition, the adjusted income
tax expense includes the effect of any tax rate changes. Adjusted income tax expense has been reconciled on page 23.
3 Operating cash flow conversion is defined as: Cash flow generated from operations divided by Adjusted EBITDA.
4 Free cash flow conversion is defined as: Free cash flow generated from operations; being cash flow generated from operations less interest paid, income taxes
paid and purchase of intangible and tangible assets; divided by Adjusted profit before tax.
ANNUAL REPORT AND ACCOUNTS 2022
19
Strategic Report
Chief Financial Officer’s Report
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.
The Directors believe that Adjusted EBITDA, Adjusted EBITDA margin, Adjusted profit before tax, Adjusted profit after tax and Adjusted
earnings per share provide additional useful information on the core operational performance of the Group to shareholders, and internally
we review the results of the Group using these measures. The term ‘adjusted’ is not a defined term under IFRS and may not therefore be
comparable with similarly titled profit measures reported by other companies. It is not intended to be a substitute for, or superior to, IFRS
measures of profit.
FINANCIAL KEY PERFORMANCE INDICATORS
The financial KPIs below are used, in addition to statutory reporting measures, by the Executive Directors to monitor the Group’s
performance and progress. These KPIs are used to measure progress against strategy, the strength of the business and long-term
prospects for our stakeholders.
2022
2021
% reported growth
% underlying growth
Revenue
£243.2m
£189.3m
28%
10%
Invoiced
Forward Revenue
Adjusted EBITDA
Adjusted EBITDA
margin
Net bank debt
£133.5m
£107.7m
24%
12%
£86.4m
£64.4m
34%
36%
36%
34%
2p.p.
2p.p.
£249.6m
£177.6m
41%
41%
The Group delivered on its ambition to achieve at least 10% underlying revenue growth and achieve margin of 35-40% and now sets its
target on exceeding 40% margin.
The platform economics of our business model meant that a significant proportion of the underlying revenue growth filtered through to
Adjusted EBITDA without material incremental cost of sale. This therefore gave the Group a significantly improved margin from 34% to 36%,
achieving our previous margin range target.
In addition to the underlying performance of the business, the deployed debt also brought in two further acquisitions to the Group, MBI and
TS Lombard. These additions also contributed to the revenue growth and increased profitability in the year.
OPERATIONAL KEY PERFORMANCE INDICATORS
The operational key performance indicators (“KPIs”) below are used by the Directors to monitor the quality of revenue growth and understand
underlying performance. Our operational KPIs are:
Value Renewal Rate – this is calculated by dividing the total subscription sales value closed in the year compared with subscription value
available for renewal (based upon prior year value).
Volume Renewal Rate – this is calculated by dividing the total volume of subscription sales closed in the year compared with subscription
volume available for renewal.
Average Client Value – this is calculated using the total value of sales across our clients and showing an average value.
Our operational KPIs reference sales orders rather than revenue and therefore impact both revenue recognised in the year as well as
Invoiced Forward Revenue.
20
ANNUAL REPORT AND ACCOUNTS 2022
Strategic Report
Chief Financial Officer’s Report
As at 31 December 2022, the total number of clients (>£5,000 spend) was 4,735 (2021: 4,732).
Clients >£20,000
All Clients
(above £5,000)
Value renewal
rate
Volume renewal
rate
Average client
value
Value renewal
rate
Volume renewal
rate
Average client
value
2022
2021
Movement
101%
97%
4p.p.
84%
83%
1p.p.
£75,100
£72,900
3%
99%
95%
4p.p.
78%
75%
3p.p.
£47,900
£42,400
13%
Strong performance in underlying operational KPIs helped deliver 10% underlying growth. We improved our Group volume renewal rates
by 3 percentage points to 78% compared with 2021. The Group also demonstrated strong pricing power, as well as a good performance in
selling more licences and product to its existing client base. The additional value meant that the value renewal rate for the Group was 99%
compared with 95% in 2021, with a particularly strong performance in our larger client base.
THE GROUP’S PERFORMANCE THIS YEAR
1. Revenue
Revenue grew by 28% to £243.2m, driven largely from underlying growth of 10% and aided by revenue from recent M&A and the benefit of
currency gains (2021: £189.3m). On an underlying basis, subscriptions (representing 81% of revenue (2021: 81%)) grew by 10% underpinned
by improving renewal rates, strong pricing and client contract growth as well as new business wins.
2. Profit before tax
Profit before tax for the year grew by £5.8m to £38.4m (2021: £32.6m), which partly reflects the operating leverage which has driven
Adjusted EBITDA to grow by £22.0m to £86.4m (2021: £64.4m), offset with increases in finance and other operating costs.
£m
Revenue
Operating costs
Adjusted EBITDA
Depreciation
Amortisation of acquired intangible assets
Amortisation of software
Share-based payments charge
Costs relating to share-based payment schemes
Refinancing costs
Restructuring costs
Revaluation loss on short and long-term derivatives
Unrealised operating foreign exchange losses
M&A costs
Contingent consideration
Finance costs
Profit before tax
Year ended
31 December 2022
Year ended
31 December 2021
Change %
243.2
(156.8)
189.3
(124.9)
86.4
(6.4)
(9.1)
(1.0)
(4.1)
(0.9)
(1.9)
(0.6)
(0.6)
(1.9)
(2.9)
(1.0)
(17.6)
38.4
64.4
(6.8)
(5.6)
(0.9)
(9.2)
-
(0.2)
(1.2)
(0.9)
1.0
(2.4)
-
(5.6)
32.6
+28%
+26%
+34%
-6%
+63%
+11%
-55%
+100%
+850%
-50%
-33%
+290%
+21%
+100%
+214%
+18%
ANNUAL REPORT AND ACCOUNTS 2022
21
Strategic Report
Chief Financial Officer’s Report
Adjusted EBITDA
Adjusted EBITDA increased by 34% to £86.4m (2021: £64.4m). The growth in Adjusted EBITDA was driven by our strong revenue growth
and our ability to control what is a relatively fixed cost base.
We have an established operating cost base and given the economics of our platform business, which sees limited incremental cost of
sale, our overall margin increased by 2 percentage points to 36% (2021: 34%).
Adjusting items
Adjusting items grew by £4.5m in total, with some significant individual movements of note:
•
The amortisation charge for acquired intangibles has increased by £3.5m to £9.1m (2021: £5.6m). This is reflective of intangible
assets acquired as part of the four business combinations over the past 15 months and resulting increases in amortisation.
•
The share-based payment charge has decreased from £9.2m to £4.1m, largely due to the vesting of Scheme 1 in August 2022,
which carried no charge in 2022.
The charge for 2022 included IFRS2 costs for Schemes 2 and 4 including the modification noted in the Remuneration Report on
page 61. The modification was effective from 30 November 2022 and therefore only had an impact of £0.5m increase in charge in
the year. It is expected that the charge will increase in future years because of the modification.
•
M&A costs grew year on year, reflecting continued M&A transactions in 2022.
Finance costs
Finance costs have increased by 214% to £17.6m (2021: £5.6m) which is inclusive of a non-cash IFRS9 charge of £2.1m (2021: £0.8m)
and IFRS16 leases interest of £1.3m (2021: £1.5m). The cash paid in interest in 2022 was £14.0m (2021: £3.4m).
This reflects the increase in average drawn debt in 2022 compared with 2021, which funded the M&A activity over the past 15 months
and purchase of own shares, in addition to the increase in interest rates.
Finance costs are calculated on drawn debt based upon on a margin range of 275-375bps, dependent on Group net leverage, plus
SONIA (Sterling Overnight Index Average rate). The Group entered into a swap arrangement on SONIA on 21 October 2022 amid the
backdrop of rising rates. The arrangement fixed SONIA at 4.9125% over the remaining life of the term loan. Further information on the
interest rate hedge is given on page 110. Undrawn debt carries interest at one third of the prevailing margin.
Leases
Within our operating costs, depreciation in relation to right-of-use assets was £4.7m (2021: £5.0m). Other income, in relation to sub-let
income on right-of-use assets was £0.1m (2021: £0.4m). Our net finance costs include interest of £1.3m in relation to lease liabilities
(2021: £1.5m).
3. Foreign exchange impact on results
The Group derives around 60% of revenues in currencies other than Sterling, compared with around 40% of its cost base. The impact of
currency movements in the year increased revenue by £7.9m, which mainly reflected Sterling weakness against US Dollar (average rate:
2022: 1.25, 2021: 1.38), with £6.0m currency benefit also reflected in Invoiced Forward Revenue. Cost inflation as a result of currency
movements fully offset the gain in the year and impacted the results by £8.8m. The full impact of currency on Adjusted EBITDA was a
reduction of £0.9m.
£m
As reported
Add back currency movements
US Dollar
Euro
Other
Constant currency
2021 - as reported
Constant currency growth
1 Operating costs excluding adjusting items.
Revenue
243.2
(8.1)
0.3
(0.1)
235.3
189.3
24%
Operating
costs1
(156.8)
Adjusted
EBITDA
86.4
Margin
Invoiced Forward
Revenue
36%
133.5
6.8
-
2.0
(148.0)
(124.9)
18%
(1.3)
0.3
1.9
87.3
64.4
36%
37%
34%
3.p.p.
(6.0)
-
-
127.5
107.7
18%
22
ANNUAL REPORT AND ACCOUNTS 2022
Strategic Report
Chief Financial Officer’s Report
4. Taxation
The Group’s effective income tax rate (ETR) for the reporting period is 20.6% which exceeds the statutory UK income tax rate of 19.0%.
The major components impacting the income tax expense are higher tax rates in certain overseas jurisdictions where the Group operates,
specifically the United States and India (increase to ETR), incurring expenses that are non-deductible for tax purposes (increase to ETR) and
the remeasurement of deferred tax assets to 25.0% to recognise the change in UK tax rate from 1 April 2023 (decrease to ETR).
Key factors that may impact the Group’s future tax charge as a percentage of underlying profits are the mix of profits and losses
between the jurisdictions in which the Group operates and the corresponding tax rates in those territories, the impact of non-deductible
expenditure and non-taxable income and the utilisation (with a corresponding reduction in cash tax payments) of previously unrecognised
deferred tax assets.
Reconciliation of statutory income tax charge to adjusted income tax charge is presented below:
£m
Statutory income tax charge
Amortisation of acquired intangible assets
Share-based payments charge
Costs relating to share-based payment schemes
Restructuring and refinancing costs
Unrealised operating foreign exchange loss/(gain)
Corporate tax rate change
Movement in unrecognised deferred tax
Adjusted income tax charge
Year ended
31 December 2022
Year ended
31 December 2021
7.9
1.8
0.8
0.2
0.4
0.5
1.3
(0.3)
12.6
7.7
0.9
1.5
-
0.1
(0.2)
(0.6)
0.6
10.0
5. Earnings per share
Basic EPS was 27.1 pence per share (2021: 21.9 pence per share). Fully diluted profit per share was 26.2 pence per share (2021: 20.2 pence
per share).
Adjusted earnings per share grew from 36.2 pence per share to 43.3 pence per share, representing 20% growth.
6. Dividends
We are pleased to propose a final dividend of 18.3 pence per share (2021: 13.2 pence), to be paid on 28 April 2023 to shareholders on the
register at the close of business on 31 March 2023. The ex-dividend date will be on 30 March 2023. The proposed final dividend increases
the total dividend for the year to 26.0 pence per share (2021: 19.3 pence), an increase of 35%.
7. Cash generation
Cash generated from operations grew by 41% to £85.4m (2021: £60.5m), representing 99% of Adjusted EBITDA (2021: 94%). We would
normally expect operating cash flow to be in excess of 100% of Adjusted EBITDA and if we add back one-off cash costs in the year
(restructuring, refinancing and M&A), cash flow conversion is 103%.
Capital expenditure was £2.7m in 2022 (2021: £1.3m), including £1.7m on software (2021: £0.5m). Capital expenditure represented 1.1% of
revenue (2021: 0.7%).
Total cash flows from operating activities was £61.9m (growth of £9.9m from 2021), which represented 111% of operating profit (2021: 136%),
with an increase in interest paid of £10.6m to £14.0m being the main reason for the lower conversion rate. During the year, the Group paid
out £23.6m in dividends (2021: £20.4m).
ANNUAL REPORT AND ACCOUNTS 2022
23
Strategic Report
Chief Financial Officer’s Report
Short- and long-term borrowings increased by £83.4m to £283.6m as at 31 December 2022 (2021: £200.2m). The debt drawn was focused
on two main areas of expenditure:
• M&A – The Group purchased MBI and TS Lombard during 2022 for a combined cash consideration of £32.9m. In addition, £0.7m
was paid in relation to the target working capital adjustment for LMC, which completed in 2021. The cash costs of acquisitions
are set out on page 131.
•
Purchase of shares through Employee Benefit Trust – The Group purchased 5.3m shares for its employee LTIP for net
consideration of £66.6m. The Employee Benefit Trust held 5.6m shares as at 31 December 2022, to satisfy options in issue of 7.1m.
8. Net bank debt:
Net bank debt increased to £249.6m as at 31 December 2022 (2021: £177.6m). The increase principally reflects strong operating cash flows,
offset by M&A activity of £33.6m, contributions to the Employee Benefit Trust to buy back shares of £66.6m, dividends of £23.6m and
capital expenditure of £2.7m.
The Group defines net bank debt as short- and long-term borrowings (note 20) less cash and cash equivalents. The amount excludes items
related to leases.
£m
Short- and long-term borrowings (note 20)
Cash
Net bank debt
2022
283.6
(34.0)
249.6
2021
200.2
(22.6)
177.6
9. Invoiced Forward Revenue
Invoiced Forward Revenue grew by 24% to £133.5m from the 31 December 2021 balance of £107.7m, reflecting good momentum on sales
orders during 2022 (underlying growth of 12%) and the impact of acquisitions. Invoiced Forward Revenue is a major component of our
significant revenue visibility for the forthcoming year.
£m
Deferred revenue (note 19)
Amounts not due/subscription not started at 31 December
Invoiced Forward Revenue
2022
104.0
29.5
133.5
2021
81.4
26.3
107.7
10. Intangible assets
Intangible assets have increased by £32.4m during the year, from £347.7m as at 31 December 2021 to £380.1m as at 31 December 2022. The
majority of the increase relates to the two acquisitions made during the year of MBI and TS Lombard in which the Group recognised goodwill
and intangible assets on acquisition of £24.9m and £15.1m respectively. Offsetting against these increases was an amortisation charge for
the year of £10.1m (2021: £6.5m), which represented an increase of 55% reflecting the acquisitions made over the past 15 months.
11. Trade receivables
Net trade receivables as at 31 December 2022 were £54.4m, representing 29% growth compared with the 31 December 2021 balance of
£42.3m, the impact of the acquired companies and sales growth mainly driving the increase.
24
ANNUAL REPORT AND ACCOUNTS 2022
Strategic Report
Chief Financial Officer’s Report
FINANCIAL RISK MANAGEMENT
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 and Euro exchange rates with Sterling. Due to the Group’s operations in India, the Group also enters into foreign
exchange contracts that limit the risk from movements in US Dollars with the Indian Rupee exchange rate. While commercially and from a
cash flow perspective this hedges the Group’s currency exposures, the Group elects not to apply 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 renegotiation of
tariffs to materially impact our business. Furthermore, the company is continuing to monitor the Inclusive Framework Project established by
the OECD, including Pillar One (determining where tax should be paid and on what basis) and Pillar Two (the design of a system that ensures
multinational enterprises pay a minimum level of tax), which is expected to move into an implementation phase during 2023. However, the
application thresholds will be aimed at the very largest companies, and therefore the rules are unlikely to impact the Group.
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. On 21 October 2022, GlobalData Plc (the parent company) entered
into an interest rate swap arrangement to fix the floating element of the interest rate (based upon SONIA) to a fixed rate of 4.9125%. The
Group has applied hedge accounting in accordance with IFRS9 (Financial Instruments); as such any gains or losses on the interest rate
swap, to the extent that they are effective, are recognised directly within other comprehensive income of both the Group and the parent
company.
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, being operations generated cash (with no external financing required). Although the statement of
financial position shows net current liabilities (current assets less current liabilities), included in current liabilities is £104.0m of deferred
revenue that represents future income earnings. Excluding deferred revenue, the Group has net current assets of £56.4m (2021: £27.8m).
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 38, within the Strategic Report.
Graham Lilley
Chief Financial Officer
27 February 2023
ANNUAL REPORT AND ACCOUNTS 2022
25
Strategic Report
Principal and Emerging Risks and Uncertainties
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 Group provides services across a breadth of industry markets and functions, on a global scale and on One Platform. 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.
Our Approach to Risk Management
The Group recognises that in order to be successful, we are required to take risks. However, risks need to be taken in a controlled environment.
Our approach is one of responsible risk-taking in line with the principles, culture, tolerance and appetite as directed by the Board. Over the
past three years, our approach to risk management has matured, developing over time to better serve the needs of a fast-growing business.
The Group Risk Management has three key components:
• A Risk Appetite Statement: This provides a high-level indication of how much risk GlobalData is willing to take, accept or tolerate
in achieving its strategic goals and objectives. The Board sets the Group’s risk appetite and reviews it at least annually. In doing
so, the Board considers our strategic objectives, the Group’s principal risks and uncertainties and assesses against the long-term
viability of the Group.
• A three lines of defence model on internal controls (first line: functions that own and manage risk; second line: functions that
oversee and specialise in compliance; third line: independent assurance): The model details the key internal controls, policies
and assurance the Group has in its risk management processes, as well as those accountable and responsible for their operation.
• Our risk management processes and tools: These include an Annual Risk Assessment, assessment of internal controls and review
of the control environment. The Board also considers the views of the Senior Leadership Team and Audit Committee as part of its
systematic review of internal controls.
The below chart reflects the roles and responsibilities within our risk management processes.
The Board
Review and Confirmation
The Board’s responsibility is to review and approve the Group’s
strategy and objectives. The Board determines the Group’s
appetite for risk and evaluates the Group’s risk management
processes and internal control.
Audit Committee
Challenge and Review
Risks are reviewed by the Audit Committee alongside internal
controls for ongoing adequacy of operating effectiveness.
Senior Leadership Team
Ongoing Review, Control and Implementation
The Senior Leadership Team are responsible for day-to-
day ownership of risk management and the design and
implementation of internal controls.
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, performance and future prospects as well as Group operations. While the categories have not materially
changed since our last Annual Report, the risk factors have evolved and we have set out in the report how these have changed in the year.
In setting out the principal risks, the Board considers the net impact of mitigations and controls in place. The identified principal risks are not
the only risks facing the business but are considered to have a material impact on the business, and therefore are the focus of discussion
at Board and Audit Committee meetings.
26
ANNUAL REPORT AND ACCOUNTS 2022
Strategic Report
Principal and Emerging Risks and Uncertainties
Annual Risk Assessment
At least annually, the Senior Leadership Team reviews the Group’s principal risks and performs a risk assessment. The assessment considers
both the existing principal risks as well as potential emerging risks of the Group. The assessment looks at both the likelihood of a risk event
occurring and the impact that would have on the Group and the controls and mitigations the Group has in place.
The assessment as at 31 December 2022 has concluded that there are no new principal risks that have emerged during the year, however the
Board has acknowledged the increased risk around the macro-economic situation and considerations and actions have been documented in
the below analysis of principal risks.
We are a data and analytics company in which our products are created and distributed digitally. Our carbon footprint is considerably smaller
than those of many other companies of our size. Therefore, we have concluded that environmental factors do not represent a principal risk
to our business.
Principal Risks
The principal risks and uncertainties reported are not the only risks facing the business but are those which the Board considers to be material
to the Group. The Directors consider that the principal and emerging risks and uncertainties facing the Group are:
Gross risk likelihood and impact:
d
o
o
h
i
l
e
k
L
i
Economic and Political
Personal Data
Competition and clients
M&A
People and Succession
Financial
IT and cyber security
Product
Regulatory and Compliance
Impact
Key: Link to Growth Optimisation Plan (“G.O.P”): 1. Customer Centric, 2. World-Class Product, 3. Sales Excellence, 4. Operational Efficiency
Business and Strategic Risks:
Link to
G.O.P.
1, 2
Risk Description
Product:
The success
of the Group is
dependent on
the quality and
relevance of our
products.
Potential Impact
Key Mitigations and Controls
Assessment
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 lead to a
loss of reputation
resulting in a loss
of revenues from
new and renewable
business.
• Regular product and research planning
meetings consolidate client feedback,
competitive positioning and new product
development to ensure relevance and drive
innovation.
• Standard Process Manuals set out consistent
research and publishing procedures, which
focus on quality and accuracy and are
continually reviewed for best practice.
Internal Quality team independently checks
compliance against Standard Process Manuals.
•
• External audit of Standard Process Manual
•
compliance.
Internal production targets are set relating
to metrics such as timeliness and monitored
against performance metrics.
• Review of KPI metrics such as renewal rates
and customer numbers giving an indication of
customer satisfaction and product quality.
Overall
The product is very
well diversified and
offers significantly
more breadth than rival
products. The Group
continually looks for
innovation to enhance
capability and client
experience. We have
effective quality and
process controls in
operation.
Risk Movement
Stable.
ANNUAL REPORT AND ACCOUNTS 2022
27
Strategic Report
Principal and Emerging Risks and Uncertainties
Business and Strategic Risks (continued):
Link to
G.O.P.
1,2,3,4
Risk Description
People and
Succession:
The Group is a
people-based
business; failure
to attract or
retain key
employees could
seriously impede
future growth.
Failure to recruit
or retain key
employees could
lead to reduced
innovation and
progress in the
business.
Potential Impact
Key Mitigations and Controls
Assessment
Overall
We have continued to
maintain a stable senior
management team and
launched a number of
employee engagement
initiatives.
Market conditions have,
however, continued to
make the recruitment and
retention of junior roles
in sales and research and
analysis more challenging.
Risk Movement
Stable.
Overall
The first of our Growth
Optimisation Pillars is
Customer Obsession and
we continue to focus on
exceeding our clients’
expectations. We have
continued to invest in
our customer success
teams and the usability
of the product and have
consequently seen an
improvement in year-on-
year renewal rates.
Risk Movement
Stable.
The Group actively manages its talent and ensures
that there are succession plans for its Board and
Senior Leadership Team.
• The Group operates a competitive
remuneration package, with competitive
commission and Long-Term Incentive Plans to
attract and retain key employees.
• Robust on-boarding programme for all new
employees covering both corporate and role
specific content.
• Experienced management team with regular
review of succession plans at Board and Senior
Leadership Team level.
• Employee engagement initiatives through
Employee Resource Groups and engagement
with employee focused Non-Executive
Director.
• Annual appraisal process for all employees
which allows the Group to evaluate
performance and competence. The process
demonstrates to employees that the Group is
invested in their growth and development with
both positive feedback and well communicated
development feedback leading to improved
morale, enthusiasm and performance.
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 the Group’s unique selling points is not only
the breadth of its coverage, but also its 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 monitor our customer usage metrics and
actively seek feedback from our clients in
order to improve the services and customer
experience.
• 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 datasets and technology platforms are
both unique and difficult to replicate.
• We aim to embed our products and services
in client organisations, thereby increasing
switching costs.
• We provide improved and best-in-class
client support, thereby improving customer
satisfaction and retention.
1,3
Competition
and Clients:
The Group
operates
in highly
competitive
yet fragmented
markets.
Loss of market
share due
to changing
markets and
reduced financial
performance
arising from
competitive
threats.
28
ANNUAL REPORT AND ACCOUNTS 2022
Strategic Report
Principal and Emerging Risks and Uncertainties
Business and Strategic risks (continued):
Risk Description
Link to
G.O.P.
Potential
Impact
1,4
Economic and
Global Political
Changes:
The Group’s
businesses
operate in three
key geographic
markets, namely
Europe, North
America and
Asia Pacific.
Acquisition and
Disposal Risk
1,2,4
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 failure to
successfully
identify and
integrate key
acquisitions
could lead
to loss of
profits,
inefficient
business
processes,
inconsistent
corporate
culture and
weakened
brand.
Key Mitigations and Controls
Assessment
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:
• Wage inflation is manageable with careful allocation of
resources and additional employee benefits (LTIP and
competitive sales commission schemes), in addition to
funding through advancements in technology and efficiency
savings.
• We have mitigated the risk of rising interest rates by
entering into an interest rate swap which fixes the floating
(SONIA) element of the interest rate on the £290.0m term
loan to a fixed rate of 4.9125%.
• The Group is not reliant on significant external supply chain
with energy costs representing less than 1% of the total cost
base and therefore limited exposure to the current energy
cost crisis.
• Visibility of revenue through invoiced revenue and
renewable contracts.
• Strong pricing power in 2022 and continued price increase
trajectory.
• We operate across multiple industry sectors and therefore
are not reliant on one industry by having good sector
diversity.
• Criticality and positioning of data (uncertainty drives
demand).
Overall
We are a global
business
operating in
multiple sectors,
which means
our risk is spread
across multiple
economies
and industries.
Although the
macro-economic
situation in
2022 has led
to increased
risk across the
Group, in most
areas the Group
has mitigations
to limit the risk
to financial
performance.
Risk Movement
Increase in risk
due to current
macro-economic
situation.
We operate in different geographies and therefore operate in a
balanced portfolio of markets.
M&A is a key pillar of Group strategy.
• We engage with external advisers to help us identify and
engage with strategic targets.
• We have an internal team dedicated to M&A that meets
regularly to discuss prospects, pipeline, progress of
transactions and post-acquisition integration activities.
• All acquisitions are subject to rigorous financial, tax and
legal due diligence (both internal and with the aid of external
advisers) and operational review. A final business case
including a future financial forecast is presented to the main
Board as part of the supervision and approval process.
• Where necessary, external advisers 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.
100-day post acquisition plan to provide a consistent and
robust integration playbook.
•
• As a Board, annual review of the capital allocation strategy is
performed to ensure funding is available for M&A.
Overview
During periods of
high M&A activity,
which has been
the case in both
2021 and 2022,
the execution and
integration risk is
inherently high.
There are however
robust and
effective controls
and processes in
place to mitigate
these risks.
Risk Movement
Stable.
ANNUAL REPORT AND ACCOUNTS 2022
29
Strategic Report
Principal and Emerging Risks and Uncertainties
Operational risks:
Risk Description
Link to
G.O.P.
Financial
4
Potential Impact
Key Mitigations and Controls
Assessment
The Group’s debt
financing is subject
to interest rate risk,
with the bank’s margin
applied to SONIA
(Sterling Overnight
Index Average rate).
Movement in SONIA
would cause variability
in interest payments.
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.
High levels of inflation
rates can increase
costs across the
Group.
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.
Overview
Although the current
macro environment
has led to an increased
risk through volatility
in interest rates,
fluctuations in currency
exchange rates and
rising inflation, the group
has in place policies and
procedures to actively
manage these risks.
During the year we
have continued to
actively reduce some
of the related party
relationships and shared
services arrangements,
evidenced in a reduction
of both the volume and
value of transactions
during 2022. The Group
will continue to aim to
reduce these further in
2023 and beyond.
Risk Movement
The risk profile has
increased due to
the current macro-
economic situation,
specifically in relation
to interest rates and
currency fluctuations,
however the Group has
demonstrated active
management of these
risks in the year.
The Group actively manages its financial risks:
• We have mitigated the risk of rising interest
rates by entering into an interest rate swap
which fixes the floating (SONIA) element of the
interest on the £290.0m term loan to a fixed
rate of 4.9125%. This eliminates the Group’s risk
to future fluctuations in interest rates.
• A significant mitigation to the risk of currency
fluctuations 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, while 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 managed by
entering into foreign exchange contracts that
limit the risk from movements in US Dollar, Euro
and Indian Rupee exchange rates with Sterling.
Contracts are entered into in line with our
Board-approved treasury policy (the policy is to
hedge throughout the year at 20% per quarter
for a period of 12 months out, so that in each
quarter we enter with 80% of our net cash flow
hedged).
• The Group operates a focused approach to cost
management, including mitigating the impact
of inflation. As a Group we have a relatively
low percentage of external supplier spend
compared to the costs attributable to payroll
and related costs and would look to mitigate
increases in these through advancements in
technology and efficiency savings, hence we do
not see any significant risk from this area (also
see Economic and Global Political Changes).
• We have an internal tax and treasury team with
a remit to continually monitor and review tax
and treasury matters of the Group. 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.
• The Group has a Related Party Committee,
a separate subcommittee of the Audit
Committee, which monitors the controls in
place to identify related party transactions.
The Committee also authorises the type and
nature of each transaction, ensuring that each
transaction is entered into on an arm’s length
basis.
30
ANNUAL REPORT AND ACCOUNTS 2022
Strategic Report
Principal and Emerging Risks and Uncertainties
Operational risks (continued):
Risk Description
Link to
G.O.P.
Personal Data
1,4
Potential Impact
Key Mitigations and Controls
Assessment
The loss/theft or
misuse of personal
data of employees,
clients and others
could cause
significant harm to
our key stakeholders
and could lead
to regulatory and
reputational loss.
Overview
Whilst most of the data
held by the Group is
industry, market, and
economic data, the
loss and/or misuse of
the personal data of
employees, clients and
other stakeholders
could cause significant
harm. The Group does
however have processes
and controls in place,
including annual
training, to protect this
data which are being
continually reviewed and
enhanced throughout
the year.
Risk Movement
Stable.
We have an obligation to protect the data we hold,
both client, employee and other stakeholder data.
Loss and/or misuse of this data could result in a
loss of reputation, regulatory sanctions and/or
fines.
Collecting first-party data plays a crucial role
in delivering a better and scalable commercial
proposition for the Group and driving the future
business proposition. The Group operates robust
controls around this.
• The Data Privacy steering committee, led by
the Chief Financial Officer, provides continuous
monitoring of data and privacy developments,
adoption of best practice and advice across
the Group. This Group consists of information
security, data protection, commercial, legal and
external advisers.
In conjunction with the Data Privacy steering
committee the Group’s legal department
monitors laws and regulations surrounding the
use and management of data.
•
• Regular health checks are performed across
all sites to ensure compliance with policies and
procedures.
• Data Privacy policy and GDPR forms part of the
•
mandatory annual employee training.
IT, Cyber and Systems controls to prevent
unauthorised access.
ANNUAL REPORT AND ACCOUNTS 2022
31
Strategic Report
Principal and Emerging Risks and Uncertainties
Operational risks (continued):
Risk Description
Link to
G.O.P.
IT, Cyber and
Systems Failure
1,4
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.
Potential Impact
Key Mitigations and Controls
Assessment
IT, Cyber and Systems failures continue to be a major
area of focus for the Group. Key mitigations and controls
for the Group:
• Continuous and proactive monitoring of the cyber-
•
threat landscape, including regular external review of
cyber security and website security protocols.
Internal Information Security team supported by
external consultancy who are engaged to help with
the design and implementation of IT security.
• Business continuity plans are in place 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.
•
• Performance of automated vulnerability scans of
externally exposed enterprise assets.
• Automated backups, including maintenance and
protection of back-up and recovery data.
• Periodic external penetration tests on Group
websites.
• Extensive information security policies
communicated to all employees as part of the
mandatory Information Security Awareness training.
All policies are also available on the Group intranet
site.
GlobalData is committed to complying with all laws and
regulations that apply to the Group.
• The majority of the Group’s operations are based
in the United Kingdom, United States of America
and India. Appropriate advisers are employed in all
geographies to ensure the Group remains compliant
with local laws and regulations.
• As part of GlobalData’s commitment to following best
practices in employee conduct, information security
and data protection, all employees and contractors
are required to complete training at least annually
to improve awareness of the Code of Conduct and
information security issues. The training requires a
declaration that the Code of Conduct will be adhered
to and refers to other key Group policies including anti-
money laundering, anti-bribery policy, whistleblowing
and data protection and privacy. All global policies are
available to all employees on the Group’s intranet site.
Overview
We continue to focus
on ensuring that
we implement and
design best-practice,
effective controls for
our IT systems.
IT and Cyber controls
have continued to
be enhanced and
improved throughout
the year; however, we
recognise that cyber
threats including
Distributed Denial-
of-Service (DDoS)
attacks, malware
and hacking are an
ever-increasing threat
and will continue to
be a constant area
of focus given the
sophistication of
attackers.
Risk Movement
Stable.
Overview
There has been no
change to the risk
level and the Group
operates an annual
mandatory Code of
Conduct training
incorporating other
key compliance
policies.
Risk Movement
Stable.
Regulatory
Compliance
4
The Group may
be subject to
regulations
restricting
its activities
or effecting
changes in
taxation.
32
ANNUAL REPORT AND ACCOUNTS 2022
Principal and Emerging Risks and Uncertainties
The Board feels that the
Strategic Report
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.
ANNUAL REPORT AND ACCOUNTS 2022
33
Strategic 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 explains how the Directors discharge their duties.
As noted in the Corporate Governance Report (pages 43 to 49), the Board meets 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 a decision can be made that best promotes the success of the
Company and considers the impact on the wider stakeholder group.
The Group has identified its stakeholder group and analysed each stakeholder based upon their level of interest in GlobalData and their level of
power/influence on the Group. The Directors review this analysis, monitor the levels of engagement with each stakeholder and build feedback
and stakeholder considerations into the governance and decision-making process.
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 is given access to management papers that set out impact analysis surrounding decision-making. 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.
A primary example of this is the process by which acquisitions are considered by the Board. The Directors, the Senior Leadership Team,
including the M&A team prepare a pack of information that considers: Commercial diligence and analysis of strategic fit; financial and tax
diligence on the target (including review of forecast and projections); and legal and compliance diligence. The team will set out the 100-day
plan for integration and discuss risks with the Board. This will be consolidated alongside external advice obtained through the process and
will be reviewed to ensure that the long-term impact of the acquisition is positive not only for the Group, but also for our clients (enhancing
our capability and offering), our employees and shareholders. In forming a view of whether to approve any M&A, the Board will review this
information and consider the views of internal management sponsors (particularly around the commercial rationale, the likelihood of synergies
being achieved and the bandwidth to execute), as well as feedback that is received from our bankers, Nominated Adviser (“NOMAD”) and
brokers. If there are any challenges identified during this process, the Board will seek management to look at remedies and mitigations to be
put in place prior to the transaction completing. The Board will then satisfy itself that the mitigations appropriately address the identified issue
and the cost of which are not prohibitive to the deal proceeding.
The Group has a 5-year plan, which is a financial plan supported by a Growth Optimisation Plan and has a number of KPIs linked to stakeholders.
KPIs such as renewal rates and average client value give us insight into customer satisfaction and pricing power of the product and KPIs such
as Invoiced Forward Revenue, revenue and earnings growth are key for our shareholders, banks and our employees. By understanding the
drivers behind these KPIs the Board is able to take a view on whether the wider strategy is effective or whether more focus is needed on areas
such as product development, pricing or client services. The insight gives the Board a clear view on the growth levers that will determine if the
5-year plan is achievable or whether actions need to be taken to achieve it.
The plan is reviewed regularly to benchmark our performance. Strategy is discussed at the monthly Board meetings and reviewed in detail
each year, at the Board Away Day. This strategic thinking is intrinsic to future decision-making.
(b) The interests of the Company’s employees
The Directors actively consider the interests of employees in major decisions. People is a regular agenda item at Board meetings where attrition
rates, reasons for leaving and employee satisfaction are discussed. Our commitment to our people remains paramount because 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.
The Group holds regular Chief Executive Information Sessions for all colleagues around the globe. The content of these sessions, held by video
conference, is aimed at keeping our workforce aligned with our vision, mission and strategy and delivers key strategic updates and initiatives
as well as the overall aim to increase the level of employee engagement.
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ANNUAL REPORT AND ACCOUNTS 2022
Strategic Report
Directors’ Section 172(1) Statement
The Group operates a series of Employee Resource Groups (“ERGs”) which encourage our people to join forums which discuss a series of topics
that help us gain their feedback and help them shape the direction of the company and its values. We have 5 ERGs: Gender Balance, Race
and Ethnicity (‘EmbRACE’), LGBTQ+ Allies (‘PRIDE’), which are all focused on our Diversity, Equity and Inclusion, plus Philanthropy and Social
& Leisure.
To ensure that the Board has a communication channel to the ERGs, Annette Barnes attends some of the ERG meetings throughout the year
in her capacity as our designated workforce Non-Executive Director. Feedback and themes of the meetings are then fed back into the wider
Board, which is invaluable in assessing the culture, talent and leadership of the business.
The designated workforce Non-Executive Director role has the aim of forging closer relationships between the Board and the workforce.
In addition to Annette’s involvement in the ERGs, Annette also provides independent oversight of the whistleblowing hotline, providing a
useful insight into employee matters. Given Annette’s role as Remuneration Chair and her links to employees, the Board does not believe that
workforce representation on the Board is required.
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 and 2 female Directors.
The Senior Leadership Team has 14 male employees and 3 female employees and is a truly global committee, which represents the diverse
nature of our Group. The Committee is made up of 11 members from the UK, 2 from India, 2 from the US, 1 from Canada and 1 from Australia.
At GlobalData we encourage our people to be actively involved in our strategy, product, and ongoing corporate development, which has been
enhanced through the Chief Executive Information Sessions during 2022. 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.
(c) The need to foster the Company’s business relationships with suppliers, customers and others
The Directors have identified the Group’s key stakeholders and review, at least annually, to ensure there is sufficient communication and
engagement. The review of the stakeholder map, which assesses the influence and interests of our stakeholders, is used to guide our decision-
making processes. The key initiatives and developments for each stakeholder group during the year are summarised below:
Our People
•
•
Continuation of regular Chief Executive Information Sessions to all our global colleagues.
Annual individual performance reviews, with opportunity for upward as well as downward feedback and links from personal
objectives to Group strategy.
Launch of Employee Resource Groups in 2022 to replace VOICES (previous initiative) to give our people a forum to get involved in
shaping the culture and strategy of the business. These Groups are attended by Chair of the Remuneration Committee, to ensure
communication channels to and from the Board are effective.
Increased focus on employee learning and development in the year, with introduction of a more structured and widespread
programme.
Group-wide internal intranet, with news, policies and resources.
•
•
•
Shareholders and investment community
During the past 12 months we have actively increased the level of communication and interaction with our shareholders and investment
community following feedback.
•
Increased the number of one-to-one meetings with our shareholders and investment community, both following our half year and
full year results and meetings outside the ‘normal results cycle’.
• We held a capital markets day on both 27 January 2022 and 24 January 2023. These forums gave investors the opportunity to
review the Group strategy in detail, ask questions of management and see demonstrations of the product.
• We increased the amount of coverage with research analysts, and now have 5 analysts covering GlobalData (previously 3).
•
Appointed Numis as additional broker and FTI Consulting as an Investor Relations agency. The Group has also launched an
enhanced Investor Relations website.
Feedback regarding the Group’s corporate governance arrangements and disclosure was received from a number of shareholders
in advance of the Annual General Meeting held in April 2022. These queries were responded to in a timely manner and included
proposed actions to remedy the feedback noted.
•
• When considering the target modifications to the LTIP, there was engagement with larger shareholders on the matter.
ANNUAL REPORT AND ACCOUNTS 2022
35
Strategic Report
Directors’ Section 172(1) Statement
Clients
•
•
Customer Obsession is now the Group’s number one priority in the Growth Optimisation Plan.
The Group is firmly focused on operating as a customer-centric organisation and this is harboured through quality account
management, customer service processes and review of customer feedback and renewal rates. Page 16, within the Chief
Executive’s Report, discusses how the Group and its Board address the Customer Obsession priority, and page 28 notes the
controls that we have in place to ensure we maintain strong relationships and partnerships with our clients.
•
• We have initiated a collaborative initiative with our top tier clients globally, involving relationship managers, sales account
managers, customer service, analysts and consultants to embed deeper relationships with our key customers. The initiative has
involved more meetings with our clients as well as using technology to understand their needs in greater depth.
As an information services company, we want to be a catalyst for positive change for the markets and customers we serve. Both
within and in front of the paywall, we are providing data-led insight into key areas of ESG. We recognise that ESG is strategically
important to all of our clients, and because of the significant amount of data we collect and analyse, we are creating a vast
ecosystem of ESG intelligence across our industries.
Our standard payment terms are zero days ahead of the contract start and we monitor the average debtor days, which were 62
days in 2022 (2021: 56).
•
• We have a continued focus on product quality, innovation and giving our clients timely insights in an ever-evolving world.
Banks
• We refinanced our debt during the year, which involved an enlargement of our bank group.
• We maintain a strong relationship with each of our lead banks and we regularly meet with each of the banks to discuss financing
strategy.
• We present financial information to the wider banking group through quarterly management information packs and one-to-one
•
meetings.
The banks set our financial covenants for the bank debt, which we monitor and forecast against each month to the Board. The
covenant test thresholds are taken into account when making any financial decision, to ensure compliance.
Auditors
• We appointed Deloitte LLP as auditors for 2020 following a decision to rotate audit firms in line with best practice. We went through
an extensive first-year audit process to enable Deloitte to fully understand our business, its processes, people and controls and
feedback from the first and second year audits has been fed into the audit approach for 2022 and beyond.
• Management meets regularly with the audit team throughout the year to discuss company performance, transactions and
strategy. The Chair, Audit Committee Chair and Chief Executive also regularly meet with the audit partner and senior team.
Feedback from the audit process, particularly around internal controls is used by the Board to drive action and decide upon priority
areas in the annual risk and controls review.
•
Suppliers
• While 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.
For all new suppliers we use an onboarding form, which documents our code of conduct and key policies around data privacy,
modern slavery and compliance.
•
(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 acknowledges that more can be done. Our
Environmental, Social and Governance (“ESG”) Report on page 50 sets out the key themes that are considered by the Board.
Our strategy is underpinned by ESG factors and ESG is integral to everything that we do. It is the foundation of our company and provides
the platform for creating a successful and sustainable company for the long term. As a company, we understand that it is mutually beneficial
to consider all of our stakeholders (our colleagues, our communities, our customers). We believe that information and technology are both
powerful enablers of a successful transition towards a more sustainable society.
For the year ended 31 December 2022, we have reported energy intensity metrics for our UK companies on page 52. The Company has a
relatively low carbon footprint because of the nature of its operations; however, acknowledges improvements can always be made.
36
ANNUAL REPORT AND ACCOUNTS 2022
Strategic Report
Directors’ Section 172(1) Statement
We are working towards reporting against both GRI (global sustainability reporting standards) and SASB (Sustainability Accounting Standards
Board standards) and have joined the Science Based Targets initiative. GlobalData is committed to Business Ambition for 1.5°C and is part of
the UN-backed campaign Race to Zero. For more details see www.sciencebasedtargets.org/companies-taking-action. During the year
we have engaged with an energy consulting firm to better understand the full Group emissions, to understand where we can make a material
difference and then to set a public target and roadmap. We expect to publish this later in the year.
As well as the consulting project aimed at setting our emission strategy across scope 1, 2 and 3, we have also been continually pursuing areas
for improvement. For example we have replaced all lighting in our headquarters with LED lighting, which we expect will deliver estimated
savings of 51 MWh per annum, and we have moved all energy accounts to 100% renewable (where we have a direct relationship with the
energy providers).
GlobalData is a global company and has based itself in strategic locations for the long term. Within each community in which we operate, we
try to engage with local issues and, in particular, look to make positive contributions to those communities.
As a company, we have charity partners across the globe, with a particular focus on charities that help with mental well-being, education and
empowering women in education.
(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.
GlobalData has improved its governance arrangements and reporting over the past three years. During the year:
•
We have reviewed areas in the UK Corporate Governance Code in which we were not compliant and have taken actions against each.
There is a table of actions and outcomes on page 43 to demonstrate this. The Group is currently non-compliant with provisions 40 and
41, being that the Remuneration Committee had not engaged with employees and shareholders when setting remuneration. Reflecting
that the CEO does not receive a salary, this only therefore is applicable to the CFO. During the year, the Board did engage with large
shareholders with regard to modifying the targets of the LTIP to significant shareholders. If there were any concerns raised, the Board
would have factored this into the decision-making process.
We have a skilled and diverse Board of Directors, which was enhanced in 2021 with the appointments of Catherine Birkett and Julien
Decot as well as the appointment of independent Chairman Murray Legg.
We have embedded an enhanced Enterprise Risk Management Framework across the Group, with an emphasis on internal controls
around data privacy, data quality, cyber security and our other principal risks. The review of risk, alongside the risk appetite for the
Group, guide the Board on where more focus and investment is needed. In particular, the risk appetite statement gives the Board a good
framework when looking at any matter for the Company, as it appropriately frames the risk and ensures a proportionate response to it.
NOMAD provides annual training on Directors’ responsibilities, AIM listed rules and MAR (Market Abuse Regulation).
Where there is a need to seek advice on particular issues, the Board will seek advice from its lawyers and NOMAD to ensure the
consideration of business conduct and the Company’s 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 advisers, the Directors
seek and obtain feedback from meeting with the investors and incorporate feedback into the Group’s decision-making processes.
The Group’s capital allocation policy is set out on page 10, which sets out the strategy on capital allocation including investment, dividend
and share buy-back policies.
The Group operates share incentive plans for its employees. The Group uses free cash flow to buy back shares, via its Employee Benefit Trust,
to limit the dilutive effect this has on existing shareholders. Each year the company proposes an ordinary resolution at its AGM to grant it
authority to buy back up to 10% of its shareholding, but will make decisions on share buy-back in reference to its cash flow and distributable
reserves position. As at 31 December 2022, there were 7.1 million share options outstanding and the Company had 5.6 million shares in treasury
against these options.
ANNUAL REPORT AND ACCOUNTS 2022
37
Strategic Report
Going Concern and Viability
Going concern
The Group has closing cash of £34.0m as at 31 December 2022 (2021: £22.6m) and net bank debt of £249.6m (31 December 2021: net
bank debt of £177.6m), being cash and cash equivalents less short- and long-term borrowings, excluding lease liabilities. The Group has an
outstanding term loan of £290.0m which is syndicated with 12 lenders. As at 31 December 2022, the Group had undrawn RCF of £120.0m
which is syndicated with 13 lenders. The Group’s banking facilities are in place until August 2025, at which point the Group will be required
to renew or extend its financing arrangements as discussed in the long-term viability section below. The Group has generated £85.4m in
cash from operations during 2022.
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. The Directors have modelled a number of worst-case scenarios to consider their potential impact
on the Group’s results, cash flow and loan covenant forecast. Key assumptions built into the scenarios focus on revenue and cost growth.
In addition to performing scenario planning, the Directors have also conducted stress testing of the Business’s forecasts and, taking into
account reasonable downside sensitivities (acknowledging that such risks and uncertainties exist), the Directors are satisfied that the
business is expected to operate within its facilities. The plausible downside scenarios modelled were as follows: (i) revenue growth in 2023
being 10% lower than expectation (ii) cost growth in line with the current UK rate of inflation and (iii) both scenarios combined. There remains
headroom on the covenants under each scenario and cash remained in excess of the 31 December 2022 balance of £34.0m in all months.
Through our normal business practices, we are in regular communication with our lenders and are satisfied they will be in a position to
continue supporting us for the foreseeable future.
The Directors therefore consider the strong balance sheet, with good cash reserves and working capital along with financing arrangements,
provide ample liquidity. Accordingly, the Directors have prepared the financial statements on a going concern basis.
Long-Term Viability
The Directors have formally assessed the viability of the Group to December 2027 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 26 to 32 of this Annual Report. The
Directors have a reasonable expectation that the Group will be able to continue in operation and meet its liabilities as they fall due over
the period of their assessment. 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 consistent revenue growth. The 2023 budget is the basis
for the plan. 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 Senior Leadership
Team and are presented to the Board at the Annual Away Day, which allows a deep dive into various areas of the business and provides the
opportunity for input and scrutiny by the Board which ensures alignment with the overall Group strategy. Progress against plan is presented
to the Board throughout the year, commenting on performance and any newly identified risks. The individual plans are then consolidated
into an overall Group plan.
As noted on page 9 of the Annual Report, our business model has strong fundamental attributes, being significant recurring and visible
revenue streams, strong incremental margins, robust working capital and operational cash flow and scalable opportunity.
The Board feels that the Group’s four strategic priorities give the appropriate focus to protect the business from risks, threats and
uncertainties as well as giving the agility to pursue opportunities as they arise and to capitalise on the business model attributes. The focus
on being Client Centric, developing World-Class Products, Sales Excellence and Operational Agility are the correct focuses aligned with the
Group’s mission and vision.
The Board believes 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 28.
38
ANNUAL REPORT AND ACCOUNTS 2022
Strategic Report
Going Concern and Viability
The Group has a fully drawn down term loan of £290.0m and an available undrawn RCF facility of £120.0m with a syndicate of banks.
The Group’s banking facilities are in place until August 2025, at which point the Group will be required to renew or extend its financing
arrangements. The Group has to date had a very supportive banking syndicate (as indicated by the successful renegotiation of the finance
facilities in August 2022). As such the Directors do not believe there will be any issues in renegotiating the loan facilities in the future when
necessary. On the basis that refinancing is possible on similar terms to the existing facilities, the Board has reviewed forecast cash flows
until 2027 which demonstrate the ability to trade with headroom on its facilities.
The Board is satisfied that the current financial position of the Group, its significant visibility on revenues and other business model
fundamentals provides a stable platform for the Group to pursue its mission and vision. The Board is confident that in pursuing the four
stated strategic priorities, this will protect business interests against threats and allow the Group to pursue opportunities that will drive
growth.
Mike Danson
This report was approved by the Board of Directors on 27 February 2023 and signed on its behalf by Mike Danson, Chief Executive
ANNUAL REPORT AND ACCOUNTS 2022
39
Directors’ Report
The Directors
The Directors who served the Group during the year and up to the date of signing were:
Murray Legg
Non-Executive
Chairman
Mike Danson
Chief
Executive
Graham Lilley
Chief Financial
Officer
Annette Barnes
Non-Executive
Director
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 Informa Plc.
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 Plc
for £502m in 2007.
GlobalData acquired the
Datamonitor Financial,
Datamonitor Consumer,
MarketLine and Verdict
businesses from
Informa Plc in 2015.
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 24 years
auditing and advising
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.
Senior
Independent
Director, Chair
of Remuneration
Committee
Annette joined the
Board in February
2017. In her Executive
career, Annette was
most recently Managing
Director of Wealth &
Mass Affluent for Lloyds
Banking Group and CEO
of Lloyds Bank Private
Banking Limited. Prior
to that, Annette was
Managing Director
of Bank of Scotland
(Retail). Annette
has over 30 years of
Financial Services
experience, working
for Lloyds Banking
Group, Bank of America,
MBNA Europe Bank
Ltd and NWS Bank Ltd.
Annette is also a Non-
Executive Director of
Leeds Building Society,
Quilter Investment
Platform Limited and
Quilter Life & Pensions
Limited. Annette’s
prior experience has
given her an excellent
understanding
of Technology,
product channels
to meet customer
needs, Operational
Management and Risk
Management.
40
ANNUAL REPORT AND ACCOUNTS 2022
Directors’ Report
The Directors
Catherine Birkett
Non-Executive
Director
Peter Harkness
Non-Executive
Director
Andrew Day
Non-Executive
Director
Julien Decot
Non-Executive
Director
Chair of Audit
Committee
Catherine is Chief
Financial Officer for
GoCardless, a global
leader in Account-to-
Account payments,
leading three funding
rounds and driving
growth in excess of
40% a year. Before
joining GoCardless in
2018, Catherine was
Chief Financial Officer
for one of Europe’s
fastest-growing
telecoms providers,
Interoute, where she
took the business from
$20m to $800m in
turnover over 16 years,
leading equity and
debt raises, including
an inaugural high yield
debt issue. While there,
she also completed 10
acquisitions, including
one for a business half
the size of Interoute,
before overseeing a
successful exit of the
business in May 2018.
Peter Harkness has
more than 35 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 more
than 20 years as
a Non-Executive
Director of five 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 Plc and was
Chairman of the Butler
Group until its sale to
Datamonitor. Peter has
also undertaken Board
roles in the Third Sector.
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.
Alongside his Non-
Executive role at
GlobalData, Andrew
is a Non-Executive
and advisor to a
range of technology
and data companies
including AIScout,
VSN International
and Data Leaders.
Over the course of
his career, Andrew
has held a range of
executive level roles
including Group Chief
Data Officer at Pepper
Financial Services,
Group Chief Data Officer
for J Sainsbury Plc,
Business Intelligence
Director at News UK
and General Manager of
Business Intelligence
at Telefonica. With over
30 years of experience
in commercially
orientated data and
analytics, Andrew has
a successful track
record for implementing
transformational data-
driven change across
a number of industry
sectors.
Julien is a veteran
technology executive
with more than 20
years’ experience
in Silicon Valley and
Europe across multiple
senior roles in major
technology companies
including Amazon.com,
eBay, Skype, Facebook
and Intuit. He joined
Skype in 2007, where
he built the team in
charge of Strategy,
Business Development
and Corporate
Development. Prior
to joining Facebook,
he founded a mobile
messaging company
called TextMe, which
reached 40m users and
is now a profitable and
successful business.
He joined Facebook in
2016 to lead Platform
Partnerships for EMEA.
Since 2022, he has been
leading International
Business Development
and Strategy for Intuit.
Julien holds a BA in
Finance from ESCP
Europe in Paris, as well
as an MBA from UC
Berkeley.
ANNUAL REPORT AND ACCOUNTS 2022
41
Corporate Governance Report
We recognise that it is
Directors’ Report
advantageous to promote
different cultures within
different functions of the
organisation which all
contribute to the overall
culture of the business.
42
ANNUAL REPORT AND ACCOUNTS 2022
Directors’ Report
Corporate Governance Report
The Board has set out its responsibility for preparing the Annual Report and Accounts on page 71. The Board considers 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 throughout the year 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), with the exception of the provisions listed below.
Throughout 2022 there have been some instances of non-compliance with the Code. These are listed below, together with the remedial
action taken and position as at 27 February 2023:
Non-compliance with the Code
Remediation taken
Until February 2022, the Company did not
have a policy in respect of post-employment
shareholding requirements and as a result did
not comply with provision 36 of the Code.
In non-compliance with provisions 40 and 41
of the UK Corporate Governance Code, the
Remuneration Committee had not engaged
with employees and shareholders when setting
remuneration.
In non-compliance with provision 24 of the UK
Corporate Governance Code, the Non-Executive
Chairman, Murray Legg, was also a member of the
Audit Committee during 2022.
In February 2022 the company implemented
a Group Remuneration Policy, which sets out
rules on shareholding and post-employment
shareholding requirements. See Remuneration
Report on page 65.
The remuneration of the Executive Directors
has not been set following engagement
with shareholders and employees. Our Chief
Executive does not receive a salary and
therefore the review by our Remuneration
Committee only relates to the role of CFO and
the Senior Leadership Team. The Committee
feels that its review of relevant benchmarks
when setting remuneration for the CFO
is appropriate. However, should there be
any material change to the remuneration
arrangements of the Executive Directors
it will seek to consult with key institutional
shareholders.
Murray has worked within the audit and
advisory sector for more than 35 years and as
such provides a valuable source of financial
knowledge and experience to the Audit
Committee. Up to April 2021, Murray was the
Chair of the Audit Committee, and remained a
member of the Committee during 2022 despite
stepping down as Chair to provide a period of
support to the incumbent Audit Committee
Chair, Catherine Birkett. Murray stepped down
from the Audit Committee on 21 February 2023.
Compliant as
at 27 February
2023
Compliant
for the full
year ended
31 December
2022
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 lie with the Board, which is accountable to shareholders and wider stakeholders for the activities of
the Group.
ANNUAL REPORT AND ACCOUNTS 2022
43
Directors’ Report
Corporate Governance Report
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 Chairs of the Remuneration and Audit Committees make
themselves available to discuss with investors annually at the AGM.
The Board assesses the basis on which the Company generates and preserves value over the long term and has prepared a long-term
viability statement on page 38, 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 Senior Leadership Team and the entire organisation
united in achieving the Group goals.
The Board recognises 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 different cultures within different functions
of the organisation which all contribute to the overall culture of the business. For example in recent years we have implemented a reward
structure within our sales teams which is consistent across the globe and is aimed at getting the best out of sales teams, but the reward
structures elsewhere in the business differ dependent on performance metrics.
During April 2022, the Company set up five company-sponsored and employee-driven groups to ensure that employees with shared
characteristics, experiences and interests have a platform and relaxed space to voice their opinions, learn about diversity and inclusion
challenges, and guide organisational practice and the prioritisation of initiatives. These groups are named Employee Resource Groups
(‘ERGs’) and cover five areas: Gender Balance, Race and Ethnicity (‘EmbRACE’), LGBTQ+ Allies (‘PRIDE’), which are all focused on our Diversity,
Equity and Inclusion, plus Philanthropy and Social & Leisure. We encourage our employees to share their feedback and ideas on the issues
that matter to them and their colleagues. The ERGs act as a platform to gather and discuss feedback, suggest ideas for improvement, and
help to implement them. Each group is led by passionate advocates with an executive sponsor from our Senior Leadership Team and have
also been attended by Annette Barnes, our dedicated Non-Executive Director for workforce engagement. Updates from the initiatives led
by the individual ERGs are published to colleagues on the internal intranet. The role of designated Non-Executive Director for employees has
the aim of forging closer relationships between the Board and the workforce. This role includes being involved with the ERGs and reviewing
any feedback from the whistleblowing hotline, providing a useful insight into employee matters. Due to these responsibilities within the
role of Remuneration Chair and its links to employees, the Board does not believe that workforce representation on the Board is required.
Our colleagues can also raise concerns in confidence and anonymously via our whistleblowing hotline, which is facilitated via an independent
company, with any whistleblowing reports notified to our Group HR Director and the Senior Independent Non-Executive Director.
The Group operates an intranet, which every employee has access to. The intranet publishes Company policies and procedures, and it is also
used to communicate Company events, activities and regular corporate updates from the Chief Executive.
The Directors have set out its wider stakeholder analysis in the Directors’ Section 172(1) Statement. The Board views renewal rates (which
are published in the Chief Financial Officer’s Report) and payment statistics for a high-level view on the health of client and supplier
engagement, but also has deep dives into engagement through discussion with commercial managers.
Division of Responsibilities
The Board is made up of two Executive Directors and six 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, approving the strategy of the Group. The
Chief Executive is responsible for developing the Group’s strategy and operational management of the business.
Our Non-Executive team comprises the Chair, Murray Legg; the Senior Independent Director, Annette Barnes; Andrew Day; Catherine
Birkett; Julien Decot and Peter Harkness.
All the Non-Executive Directors are considered independent, with the exception of Peter Harkness, who is not considered to be independent
under the definition of the Code due to time served as a Director. However, the Board believes Peter is independent of mind and brings
valuable experience to the Company. With effect from 20 April 2021, Peter Harkness was no longer a member of the Audit and Remuneration
Committees.
44
ANNUAL REPORT AND ACCOUNTS 2022
Directors’ Report
Corporate Governance Report
The Non-Executive Directors’ shareholdings are detailed in the Directors’ Interests table on page 49 of the report. The Board has determined
that the Non-Executive Directors are independent and that their shareholding in the Company does not affect their independence.
In 2022, the Board met 11 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 26 to 32. The Board confirms that it has completed a robust assessment of the Group’s principal and emerging 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.
All members of the Board have access to the Company Secretary who is responsible for advising the Board on all governance matters.
Procedures are in place for the Directors in the furtherance of their duties to take independent professional advice, if necessary, at the
Company’s expense. The 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. Responsibility for the appointment and removal of
the Company Secretary is held by the Board as a whole.
The Board has procedures that require Directors to notify the Chairman and Company Secretary of all new external interests and any actual
or perceived conflicts of interest that may affect their role as a Director of the Company. As part of this process, the Board considers each
conflict situation separately according to the particular situation and in conjunction with the Company’s Articles.
Composition, Succession and Evaluation
The Nominations Committee was established to lead the process for appointments and manage succession plans for its executives. The
committee is comprised of one Executive Director and three Non-Executive Directors, including the Chairman. The Board is committed to
ensuring that the Nominations Committee always consists of a majority of Independent Non-Executive Directors, but where there is an
equal number of Independent and Non-Independent members the casting vote is made by the Independent Chair. The casting vote going to
Murray Legg, 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. When making new appointments the Board takes into consideration
other demands on Directors’ time, and external appointments by any members of the Board require prior approval to confirm no conflicts of
interest or significant demands on time.
The role of the Nominations Committee is to:
•
be responsible for identifying and nominating for the Board’s approval, candidates from a wide range of backgrounds to fill Board
vacancies as and when they arise;
consider proposals for the reappointment or promotion of Directors and also any proposal for their dismissal, retirement, non-
reappointment or any substantial change in their duties or responsibilities or the term of their appointment;
before the Board makes any appointment, evaluate the balance of skills, experience, independence, knowledge and diversity on the
Board, and, in light of this evaluation, prepare a description of the role and capabilities required for a particular appointment;
for the appointment of a Chairman, prepare a job specification, including the time commitment expected, and require a proposed
chairman to disclose other significant commitments to the Board before appointment and disclose any changes to the Chairman’s
commitments to the Board as they arise;
ensure that on appointment to the Board, Non-Executive Directors receive a formal letter of appointment setting out clearly what
is expected of them in terms of time commitment, committee service and involvement outside Board meetings and the induction
process; and
keep under review the number of external directorships held by each Director.
•
•
•
•
•
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 2 female Directors and the Senior Leadership Team
had 14 male employees and 3 female employees serve during the year.
All Directors are required to stand for re-election every year. The terms and conditions of the appointment of the Non-Executive Directors
are available for inspection at our registered office. Prior to recommending reappointments at the AGM, the Board considers whether each
Non-Executive Director continues to be independent and to appropriately challenge Management, as well as each other, in Board and
Committee meetings. Following review, the Board has reaffirmed that each Non-Executive Director is able to offer an external perspective
on the business, is able to constructively challenge and scrutinise activities, is independent in character and judgement, and has the
required experience necessary to perform their role as an independent Director.
ANNUAL REPORT AND ACCOUNTS 2022
45
Directors’ Report
Corporate Governance Report
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, and then drives the actions and objectives of the Board.
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 appraises the Chairman which is
delivered by the Senior Independent Non-Executive Director.
The Nominations Committee periodically reviews succession plans for the Board and Senior Management, with plans prepared on an
immediate, medium and long-term basis.
As a ‘smaller company’ (defined in the UK Corporate Governance Code as being a company below the FTSE 350) the Board has decided
that the internal evaluation of Board performance conducted in the year is sufficient and that external facilitation of the evaluation is not
necessary in this financial period.
On 21 February 2023 the Nominations Committee met and confirmed all Non-Executive Directors continue to be independent, with the
exception of Peter Harkness, who is not considered to be independent under the definition of the Code due to time served as a Director.
However, the Committee continues to consider Peter to be independent of mind and noted the valuable experience he brings to the Group.
Audit, Risk and Internal Control
The Board has established Audit, Nomination, Related Party Transactions 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 2022.
Board meetings during the year:
Number of meetings
Murray Legg
Mike Danson
Graham Lilley
Annette Barnes
Peter Harkness
Andrew Day
Catherine Birkett
Julien Decot
* Committee met 21 February 2023
Board
Audit
Committee
Remuneration
Committee
Nominations
Committee*
Related Party
Transactions
Committee
11
11
11
11
11
11
11
11
3
-
-
4
-
4
4
-
4
-
-
5
-
4
-
5
-
-
-
-
-
-
-
-
2
-
-
2
-
2
2
-
During 2022 the Audit Committee comprised of the Chair Catherine Birkett, Murray Legg, Annette Barnes and Andrew Day. Catherine Birkett
is a Chartered Accountant with recent and relevant financial experience. On 21 February 2023 Murray Legg stepped down from the Audit
Committee and is being replaced by Julien Decot.
The Audit Committee met four times in the year with the external auditors in attendance. The CEO and CFO attend the meetings by invitation.
The Audit Committee is responsible for:
•
Monitoring the integrity of the financial statements and any formal announcements relating to the Group’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 Group’s position and performance, business model and strategy;
Reviewing the Group’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;
ANNUAL REPORT AND ACCOUNTS 2022
•
•
•
•
46
Directors’ Report
Corporate Governance Report
•
•
•
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 Principal and Emerging Risks and
Uncertainties section of the Strategic Report on pages 26 to 32.
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 reviewed by the Board during the year comprise the following:
•
The preparation of comprehensive annual budgets and business plans integrating both financial and operational performance
objectives, with an assessment of the associated business and financial risks. The overall Group budget and business plan is subject
to approval by the Board;
Weekly sales reports are produced and reviewed by management;
Monthly management accounts are prepared and reviewed by the Board. This includes reporting against KPIs 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; and
Regular review of IT and cyber security controls and enhancements.
•
•
•
•
•
The Board, in conjunction with the Audit Committee, reviewed the Annual Report and Accounts for the year ended 31 December 2022 to
ensure that they provide a fair, balanced and understandable reflection of the Group, its performance, position and future prospects.
Remuneration
The Remuneration Committee comprises the Chair Annette Barnes, Murray Legg, Andrew Day and Julien Decot. The Remuneration
Committee is responsible for determining the service contract terms, remuneration and other benefits of the Executive Directors and
reviewing senior team members’ remuneration on an annual basis, details of which are set out in the Directors’ Remuneration Report on
pages 59 to 69. The terms of reference of the Remuneration Committee are available for inspection on request.
As part of Annette’s role as Remuneration Committee Chair, she has undertaken the role of designated Non-Executive for the workforce.
This role involves a close working relationship with the Group HR Director and the ERGs. Engagement with the workforce spans a range of
items including culture, remuneration and well-being. The Board see this as an important duty to drive positive actions.
To date, in non-compliance with provisions 40 and 41 of the UK Corporate Governance Code, the remuneration of the Executive Directors
has not been set following engagement with shareholders and employees. Specific engagement with colleagues relating to executive
remuneration has not taken place due to there being no material changes during the period. The remuneration of the Executive Directors
has been set as outlined in the Remuneration Policy which addresses the requirements of provision 40 with the exception disclosed above.
The Committee feels that its review of relevant benchmarks when setting Executive remuneration is appropriate. The Board did engage
with large shareholders when deciding to modify the targets of the Group’s LTIP. Should there be any material change to the Remuneration
arrangements of the Executive Directors in the future the Remuneration Committee will seek to consult with key stakeholders.
Related Party Transactions
The Related Party Transactions (RPT) Committee comprises the Chairman Murray Legg, Catherine Birkett, Annette Barnes and Andrew Day.
The Committee met twice during 2022. The Committee ensures that there are adequate controls in place to provide assurance that any
transaction which is or may be a related party transaction in nature is conducted on terms that are at arm’s length and reasonable.
ANNUAL REPORT AND ACCOUNTS 2022
47
Directors’ Report
Corporate Governance Report
Going Concern
The Group meets its day-to-day working capital requirements through free cash flow. Based on cash flow projections, the Group considers
the existing financing facilities to be adequate to meet short-term commitments.
The Directors have a reasonable expectation that there are no material uncertainties that cast significant doubt about the Group’s ability to
continue 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 38 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 uses the AGM to communicate with shareholders and seek their participation, as well as one-to-one results presentations with
investors at each full year and interim results announcement. The Group also held a Capital Markets Day for its institutional investors,
brokers and research analysts on 27 January 2022 and on 24 January 2023 to give an update on strategy. The Notice of the Annual General
Meeting will be circulated more than 21 clear days prior to the meeting.
The Directors’ interests are disclosed on page 49, which includes the shareholding of Mike Danson, who owns 71,135,516 shares as at 27
February 2023, representing 60.1% 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 upon request.
The Company has the authority to purchase its own shares. The authority limits the maximum number of shares that can be purchased to
approximately 10% 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. As part
of Group communications we hold regular Chief Executive Information Sessions, which are video conference meetings attended by all
Group employees. These meetings are used as a forum to keep our colleagues up to date with performance, strategy and other corporate
communication. Annette Barnes’ role as workforce designated Non-Executive also helps to increase engagement between the Board and
the wider workforce.
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.
48
ANNUAL REPORT AND ACCOUNTS 2022
Directors’ Report
Corporate Governance Report
As at 31 December 2022, the Group employed the following number of employees of each gender:
Male
Female
2022
No.
2,009
1,643
3,652
2021
No.
2,066
1,558
3,624
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 current year or prior 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. During 2022, average creditor days were 38 days (2021: 46 days).
Subsequent Events
There are no subsequent events.
Dividends
These are disclosed within the Strategic Report on page 13.
Financial Instruments
Use of financial instruments and exposure to various financial risks has been discussed within the Strategic Report (page 25).
Future Developments
Future developments have been discussed within the Chief Executive’s Report on page 17.
Directors’ Interests
Details of the Company’s share capital are set out in note 24 to the financial statements. As at 27 February 2023, Mike Danson had a
beneficial interest of 60.1% 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 27 February 2023 in the ordinary shares of the Company were as follows:
Mike Danson
Peter Harkness
Murray Legg
Graham Lilley
Number of ordinary shares
71,135,516
77,500
23,000
15,000
As at 31 December 2022, Graham Lilley had 375,000 share options in issue (2021: 400,000), comprised of 75,000 vested options from
Scheme 1 (which were exercised in full on 13 January 2023), and 300,000 options within Scheme 2.
Directors’ Indemnities
To the extent permitted by English law and the Articles, the Directors are granted an indemnity from the Group in respect of liability arising
from, or in connection with, the execution of their powers, duties and responsibilities as a Director of the Company and any of its subsidiaries.
The indemnity would not provide coverage where the Director is proved to have acted fraudulently or dishonestly. The Group purchases
and maintains Directors’ and Officers’ insurance cover against certain legal liabilities and the costs of claims in connection with any act or
omission by its Directors and Officers in the execution of their duties.
ANNUAL REPORT AND ACCOUNTS 2022
49
Directors’ Report
Environmental, Social and Governance
Environmental, Social and Governance (“ESG”) matters are a key part of our strategy, and the Board is focused on safeguarding long-term
viability and sustainable growth for the Group, our people, our clients, our environment and communities as well as our shareholders.
We continue to recognise 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 focusing on creating and maintaining positive long-term relationships with
our broad base of stakeholders.
Founded on 5 pillars, ESG is at the heart of who we are and what we do:
Our Company
Our People
Our Clients
Our Environment
Our Communities
We strive to establish
strong governance
which highlights our
core values
Our colleagues and
the inclusive culture
they evolve in is key
to the success of our
organisation
The intelligence we
provide our clients
with to drive growth,
positive social and
environmental impact
through their business
Our effort to limit any
negative impact on the
environment
The support we
provide to charitable
organisations globally
Our Company
The Board is committed to achieving the highest standards of corporate governance. The Group is working towards full adoption of the UK
Corporate Governance Code. Responsibility for governance matters lies with the Board, which is accountable to shareholders and wider
stakeholders for the activities of the Group. We are also working towards reporting our ESG activities/performance against GRI standards
and SASB.
GlobalData has improved its governance arrangements and reporting over the past three years. During the year we have:
•
Reviewed areas in the UK Corporate Governance Code in which we were not compliant and have taken actions against each. There
is a table of actions and outcomes on page 43 to demonstrate this; good progress has been made compared with the previous year;
Enhanced our reporting on remuneration matters, as well as enhancing engagement with shareholders;
Enhanced the engagement with our people through Employee Resource Groups, with a clear link to the Board;
Continued to reduce the amount of related party transactions and set clear targets of reduction in this area, which we have placed
enhanced governance procedures over; and
Embedded an enhanced Enterprise Risk Management Framework across the Group at the end of the previous year and have continued
to progress towards a more mature control environment.
•
•
•
•
Our People
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. Overall, our gender balance remains relatively consistent with the previous year.
% Female
Board
Senior Leadership Team
Group Colleagues
As at 31
December 2022
As at 31
December 2021
25%
18%
45%
25%
20%
43%
Change
-
-2 p.p.
+2 p.p.
50
ANNUAL REPORT AND ACCOUNTS 2022
Directors’ Report
Environmental, Social and Governance
During the year:
• We launched our new Group Values:
•
•
Courage - We courageously guide our customers and the markets we serve, to a more successful, sustainable future. We are
committed, trustworthy, and resilient when making a positive difference.
Curiosity - The world is always changing and so are we. We have a curiosity for opportunities to innovate and do things better, with
an appetite for experimentation and thinking differently.
Collaboration - We work together and combine our powerful resources to provide clarity in a complex world. We believe in the
collective power of data, technology, expertise and collaborative relationships to succeed.
• We launched our five Employee Resource Groups, replacing VOICES, with over 180 colleagues as members:
•
Gender Balance
Race and Ethnicity (‘EmbRACE’)
LGBTQ+ Allies (‘PRIDE’)
Philanthropy
Social & Leisure
•
•
•
•
•
•
Our Graduate and Internship programmes continue to grow and develop and include a greater breadth of job roles in the organisation.
• We are also launching some professional development initiatives including mentoring programmes and funded learning and
development.
Our Clients
Customer Obsession is our number one strategic priority and we continue to focus on client needs and on providing unique and innovative
solutions. We strive to maintain strong customer relationships and endeavour to build even deeper relationships. We have a number of
ongoing initiatives with the aim of increasing engagement with our clients.
Our ongoing initiatives are aimed at providing clients with world-class solutions delivered with exceptional levels of service. Our focus
on top-tier clients is gaining traction, and we continued to increase resources throughout the year, enhanced usability and grew via our
top-750 programme.
The net result of our Customer Obsession is an improved renewal by volume and value, as well as greater levels of profitability. Looking
ahead, we remain laser focused on improving in the different areas of Customer Obsession. This should enhance some of our key operational
metrics: for example, the volume renewal rate in 2022 for clients paying more than £20,000 p.a. was 84%; a priority is to increase volume
renewal rates to over 90% or more over the medium term.
Our Environment
As a data and analytics company, our products are created and distributed digitally. This means our carbon footprint is considerably smaller
than those of many other companies of our size. However, we are committed to minimising the impact of our operations on the environment.
The Group is pleased to report its current UK-based annual energy usage and associated annual greenhouse gas (“GHG”) emissions
pursuant to the Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018 (“the 2018
Regulations”) that came into force 1 April 2019.
In accordance with the 2018 Regulations, the energy use and associated GHG emissions are for those assets owned or controlled within the
UK only as defined by the operational control boundary. Therefore, energy use and emissions are aligned with financial reporting for the UK
subsidiaries and exclude the non-UK based subsidiaries that would not qualify under the 2018 Regulations in their own right. This includes 7
offices, 1 company-owned vehicle and the mandatory inclusion of scope 3 business travel in employee-owned or rental vehicles (grey fleet).
The 2019 UK Government Environmental Reporting Guidelines and the GHG Protocol Corporate Accounting and Reporting Standard (revised
edition) were followed. The 2022 UK Government GHG Conversion Factors for Company Reporting were used in emission calculations as
these relate to the majority of the reporting period. The report has been reviewed independently by Briar (Briar Consulting Engineers
Limited).
Electricity and gas consumption were based on invoice records, with some pro-rata estimations to fill minor gaps. For two fully serviced
offices, some energy consumption has been estimated based on CIBSE TM46 benchmarks due to lack of data. Mileage expense claims were
used to calculate energy and emissions from company-owned vehicles and grey fleet. Gross calorific values were used except for mileage
energy calculations as per Government GHG Conversion Factors.
The emissions are divided into mandatory and voluntary emissions according to the 2018 Regulations, then further divided into the direct
combustion of fuels and the operation of facilities (scope 1), indirect emissions from purchased electricity (scope 2) and further indirect
emissions that occur as a consequence of company activities but occur from sources not owned or controlled by the organisation (scope 3).
ANNUAL REPORT AND ACCOUNTS 2022
51
Directors’ Report
Environmental, Social and Governance
Streamlined Energy and Carbon Reporting (SECR) requires disclosure of emissions related to fuel used in personal/hire cars on business
use (including fuel for which the organisation reimburses its employees following claims for business mileage). Under the GHG Protocol
Corporate Accounting and Reporting Standard these emissions fall under scope 3 (category 6) and have been grouped under the heading
of “Business Travel”.
Breakdown of Energy Consumption Used to Calculate Emissions (kWh)
Purchased electricity
Gas
Heat
Transport fuel
2022
kWh
1,126,345
553,111
50,160
15,167
2021
kWh
1,026,836
496,830
50,160
3,403
Total gross energy consumed
1,744,783
1,577,229
Breakdown of Emissions Associated with the Reported Energy Use (tCO₂e)
Scope 1
Gas
Transport – company-owned vehicles
Scope 2
Purchased electricity (location based)
Heat
Scope 3
Transport – Business travel in employee-owned vehicles
Total gross emissions
2022
tCO₂e
101.0
0.2
217.8
9.2
3.6
331.8
2021
tCO₂e
91.0
0.1
218.0
9.0
0.7
318.8
Intensity Ratios
Our chosen carbon intensity ratio is gross tonnes of carbon dioxide equivalent emissions per million pounds (£m) of revenue.
Tonnes of CO₂e per £m of revenue
Year ended
31 December 2022
Year ended
31 December 2021
2.09
2.44
Our activities are split between energy used in buildings and for business travel. As a consequence, we have also chosen to report gross
tonnes of carbon dioxide equivalent emissions per 1,000 metres squared of office space for emissions related to buildings, and gross tonnes
of carbon dioxide equivalent emissions per 1,000 miles travelled for emissions related to business travel.
Buildings
Tonnes of CO₂e per 1,000 m2 Gross Internal Area (GIA)
Business Travel
Tonnes of CO₂e per 1,000 miles
Year ended
31 December 2022
Year ended
31 December 2021
44.4
45.5
Year ended
31 December 2022
Year ended
31 December 2021
0.275
0.270
52
ANNUAL REPORT AND ACCOUNTS 2022
Directors’ Report
Environmental, Social and Governance
Energy Efficiency Action During Current Financial Year
The Group continues to review energy consumption across all locations and has implemented the following energy efficiency actions
this year:
•
Office lights at the London headquarters have been changed to LED lighting, delivering an estimated 51 MWh of electricity savings per
annum;
Energy contracts are moving over to 100% renewable energy certified contracts where possible. Given the energy crisis this year, some
expiring accounts have temporarily remained on short-term contracts with existing suppliers, but will be reviewed and moved over
when possible and where necessary; and
Employees are regularly consulted regarding the ESG initiatives that have been started at GlobalData and are made aware of the
opportunities they have to support these initiatives. This is particularly since the publication of the 2022 Impact Report.
•
•
It is encouraging to see that some of the actions taken have made a positive impact within energy intensity ratios. Whilst the overall energy
consumption has increased, as a result of acquisitions and the 2021 comparative period being largely a hybrid year of colleagues working
from home, it is pleasing to see the intensity per £m revenue decrease but moreso the energy per m2 of office space. As is consistent with
our operating model of a relatively fixed cost base, we would not expect to have to increase the energy consumption significantly to deliver
more revenue and therefore we would always expect to see the ratio against revenue to improve as revenue grows. However, the CO₂e per
1,000 m2 ratio does provide a metric of how we are working to make our offices more energy efficient.
The management of resources and the need to embed sustainability is an important issue for the Group. We are working towards reporting
against both GRI (global sustainability reporting standards) and SASB (Sustainability Accounting Standards Board standards) and have
joined the Science Based Targets initiative. GlobalData is committed to Business Ambition for 1.5°C and is part of the UN-backed campaign
Race to Zero. For more details see www.sciencebasedtargets.org/companies-taking-action.
Given our commitment to the Business Ambition for 1.5°C initiative, we are working on a fully costed and actionable plan to fulfil our
commitment on climate change. Going forward we will publish details of this plan and report against our progress towards it.
The Directors believe that environmental risk factors are emerging for the Group but are not a principal risk to the Group.
Our Communities
As a company, we have charity partners across the globe, with a particular focus on charities that help with mental well-being, education
and empowering women in education. During the year we supported the following charities and communities:
•
•
PHIN – A local school and residential facility in Hyderabad for hearing impaired children. PHIN supports around 120 young people.
Sai Seva Sangh – Sai Seva Sangh was established in August 1988 to provide education to underprivileged children, free shelter to old
age and impoverished women, and with a special needs school for differently-abled rural children.
Seva Bharathi - Runs multiple skills development programmes to help underprivileged women and children to become more
self-reliant.
Continued to support PEAS (Promoting Equality in African Schools) and CALM (Campaign Against Living Miserably).
•
•
We will continue to work with our charity partners and are now offering a volunteer programme to our colleagues to enable them to get more
involved directly in our communities as well as our usual fundraising efforts.
ANNUAL REPORT AND ACCOUNTS 2022
53
Directors’ Report
Audit Committee Report
Audit Committee - snapshot
Members, attendance and number of meetings:
The Committee comprises four independent Non-Executive Directors and consists of myself, Catherine Birkett, as Chair, Murray
Legg, Annette Barnes and Andrew Day. The composition of the Committee as at 31 December 2022 and throughout the year was not
in compliance with provision 24 of the UK Corporate Governance Code as Murray Legg is the Non-Executive Chairman of the Group.
Murray has worked within the audit and advisory sector for more than 35 years and as such provides a valuable source of financial
knowledge and experience to the Audit Committee. Up to April 2021, Murray was the Chair of the Audit Committee, and remained a
member of the Committee during 2022 despite stepping down as Chair to provide a period of support to myself and the rest of the
Committee. Murray stepped down from the Committee on 21 February 2023 and Julien Decot became a member of the Committee on
the same date.
I am satisfied that the Audit Committee has a good balance of experience and expertise and is appropriately independent of the
operations of the business. During the year the Audit Committee met on four occasions. I am satisfied that the committee were
presented with papers of good quality and in a timely fashion.
Name
Catherine Birkett
Murray Legg
Annette Barnes
Andrew Day
Details
Member since April 2021 (Chair since April 2021)
Member since February 2016
Member since February 2017
Member since February 2017
No. of meetings attended
4
3
4
4
Terms of Reference
The Committee operates within the mandate as agreed by the Board. The Terms of Reference of the Audit Committee are available for
inspection upon request.
Areas of responsibility
The Audit Committee assists the Board in setting governance standards and has specific responsibility over financial controls, financial
reporting and audit effectiveness. Specifically, the Audit Committee has the delegated responsibilities for the following:
• To monitor the integrity of the Group’s Financial Reporting;
• To review and monitor the Group’s internal financial controls and internal control and risk management processes;
• To make recommendations to the Board on the appointment, reappointment and removal of the Company’s external auditor and
approve the remuneration of the external auditor;
• To review and monitor the external auditor’s independence and objectivity (including processes to review non-audit services) and
the effectiveness of the audit process; and
• To report to the Board on how it discharges its responsibilities.
Key actions in 2022
In 2022, the Audit Committee has been focused on:
• Monitoring the integrity of the Group’s Financial Reporting, ensuring the report is fair, balanced and understandable;
• Review of the financial performance in 2021, including looking at the quality of earnings, and ultimately making a recommendation
to the Remuneration Committee that the final target for Scheme 1 had been met;
• Following the launch of the Risk Management Framework in 2022, ensured that the framework was active and reviewed, with
Management, the internal controls and risk assessment;
• Reviewed in detail the risks associated with Cyber and the macro-economic challenges; and
• Reviewed the external assurance obtained by the Group and considered the need for further assurance, including internal audit.
Key priorities in 2023
• Review of the financial performance of the Group;
• Continue to monitor and review control environment and IT systems;
• Continue to apply robust scrutiny on M&A integration, ensuring new acquisitions are quickly onboarded into our control environment;
and
• Review of overseas operations, particularly new areas that have been acquired through M&A.
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ANNUAL REPORT AND ACCOUNTS 2022
Directors’ Report
Audit Committee Report
Dear Shareholders
On behalf of the Audit Committee, I am pleased to present the Audit Committee report to you for the financial year ended 31 December 2022.
The report will consider four main areas: the integrity of financial reporting, the effectiveness of internal controls and risk management
framework, significant financial estimations and judgements, and the external auditor.
The Integrity of Financial Reporting
We reviewed the integrity of the financial statements and all formal announcements relating to financial performance during 2022. As part
of the review, we challenged Management on whether significant areas of judgement and significant risks were adequately evaluated,
reported and disclosed.
As well as the integrity, we also considered whether the report gives 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 and statements;
• The narrative is a true and balanced reflection of events and performance in the year;
• There is consistency throughout the Annual Report and Accounts; and
• There is a clear explanation of key performance indicators, their link to performance and strategy and equal prominence of statutory
performance measures.
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.
The Effectiveness of Internal Controls and Risk Management Framework
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.
During the year, the Committee has assessed the documentation and review that has taken place with regard to the Group’s internal controls
and risk management procedures, in line with the policies set out in the Group’s Risk Management Framework. The Group’s approach to
internal controls is to follow a three lines of defence model and the Committee is satisfied, in the main, with the control design as well as
the policies and procedures in place. The Committee is satisfied that the review of internal controls and risk assessment were carried out
in a robust manner.
It was noted in the previous Audit Committee report for the year ended 31 December 2021 that the Committee recognised that there
were some actions required to remediate some IT control deficiencies and improve some manual controls, specifically within the revenue
business process. During 2022, the finance team have implemented additional controls around the revenue process and made further
improvements to the IT control environment. The Committee recognises that deficiencies remain in these areas and note that the Group is
continuing to improve its systems, processes and controls as it grows.
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 business and independent penetration
testing of our websites, but due to the size of the Group and procedures in place to monitor both trading performance and internal controls,
it was concluded that an entirely separate internal audit department was not required. The Audit Committee and Board are continually
assessing the need for additional assurance procedures within the Group.
ANNUAL REPORT AND ACCOUNTS 2022
55
Directors’ Report
Audit Committee Report
Significant Financial Estimates and Judgements
Issue
Consideration of estimation or judgement
Valuation of
acquired intangible
assets
The Committee reviewed the purchase price allocation calculations and assumptions used in the allocations
and concluded that both the application and methodology were consistent with previous acquisitions and the
assumptions used were reasonable.
Share-based
payments
The Committee reviewed the calculation and assumptions used in calculating the share-based payments
charge, in particular the methodology and assumptions used in the modification (described in the Directors’
Remuneration Report on page 61). The valuation work of the modification and of new awards granted was
conducted by an external consultant and the Committee considered this report when concluding that the
share-based payments charge contains fair and reasonable assumptions (such as expected employee churn
and Black-Scholes assumptions).
Carrying value
of goodwill and
acquired intangible
assets
Allocation of Cash-
Generating Units
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 the
impairment review had been completed in line with the provisions of IAS36 and that Management had used a
range of sensitivities to stress test the models used. The Audit Committee was satisfied with the conclusions
reached by Management.
The Committee reviewed Management’s analysis of cash-generating units (“CGUs”) and assessed its conclusion
that there were 4 CGUs as at the date of the intangible asset impairment review (30 September), namely:
Data, Analytics and Insights, Media Business Insights, LMC and TS Lombard. The Committee noted that the
Group’s strategy is to fully integrate acquisitions into the platform, along with sales teams, product teams and
central costs. As a result of this strategy to create a unique single platform for Data, Analytics, and Insights, it
is reasonable to conclude that once an acquisition integration programme has fully completed, the asset and
associated cash flows would consolidate into the Data, Analytics and Insights CGU.
In previous years MEED was classified as an individual CGU due to having separately identifiable cash flows and
financial results. However, Management has provided papers, which the Committee has reviewed, showing that
MEED is now fully integrated into the GlobalData platform and cash flows are now integrated with the wider CGU.
Therefore, there is no longer a separate CGU for MEED. The Committee has carefully considered the views and
assumptions of Management and agree with its conclusion.
The 3 other CGUs are all recent acquisitions. The Committee notes it is the intention of Management to fully
integrate these into the platform, and whilst large parts are complete, they were still considered to be separate
CGUs as at the review date.
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, that adjustments
made to get to the APMs were 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 Annual
Report and Accounts give a balanced 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.
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ANNUAL REPORT AND ACCOUNTS 2022
Directors’ Report
Audit Committee Report
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 only where such work is permitted under the Financial Reporting Council’s Ethical Standard.
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 Group has adopted the Competition and Markets Authority Order (CMA Order) and will rotate audit firms at least every 20 years and tender
at least every 10 years. 2022 was Deloitte LLP’s (Deloitte) third year as Group auditor.
The Committee has reviewed the effectiveness of the audit and audit team and recommends the reappointment of Deloitte for 2023. We believe
that their independence, their objectivity and the effectiveness of the external audit is strong. This is safeguarded through their continuing
challenge, their focused reporting and their discussions with both Management and the Audit Committee in planning and concluding their
work.
The Committee confirms that there are no contractual obligations that restrict the choice of external auditor.
Catherine Birkett
Chair of the Audit Committee
27 February 2023
ANNUAL REPORT AND ACCOUNTS 2022
57
Directors’ Remuneration Report
“As our Employee Nominated
Directors’ Report
Non-Executive, I have
enjoyed spending time with
colleagues and listening to
their perspectives, especially
as they relate to the broader
culture of the organisation.
The Company introduced five
Employee Resource Groups
during 2022 and I have had
the privilege of meeting with
a selection of colleagues from
these ERGs during the year.”
Annette Barnes, Chair of the Remuneration Committee
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ANNUAL REPORT AND ACCOUNTS 2022
Directors’ Report
Directors’ Remuneration Report
Unaudited information
Remuneration Committee - snapshot
Members, attendance and number of meetings:
The Committee comprises four independent Non-Executive Directors and consists of myself, Annette Barnes, as Chair, Murray Legg,
Julien Decot and Andrew Day.
The composition of four independent Non-Executive Directors on the Committee as at 31 December 2022 is compliant with the
provisions of the UK Corporate Governance Code. I am satisfied that the Remuneration Committee has a good balance of experience
and expertise and is appropriately independent of the operations of the business.
During the year the Remuneration Committee met on five occasions. I am satisfied that the committee was presented with papers of
good quality and in a timely fashion.
Name
Annette Barnes
Murray Legg
Julien Decot
Andrew Day
Details
Member since February 2017 (Chair since April 2021)
Member since February 2016
Member since April 2021
Member since February 2017
No. of meetings attended
5
4
5
4
Terms of Reference
The Committee operates within the mandate as agreed by the Board. The Terms of Reference of the Remuneration Committee are
available for inspection upon request.
Areas of responsibility
The Remuneration Committee has the delegated responsibility for setting and agreeing the strategy for Executive Director
remuneration and overseeing remuneration strategy and culture for the Group. The key activities of the Remuneration Committee are:
• Setting remuneration policy for Executive Directors;
• Setting remuneration for the Chair and Executive Director(s) and reviewing senior team members’ remuneration on an annual basis;
• Approving any awards and vestings made under Long-Term Incentive Plan (LTIP) schemes; and
• Reviewing broader workforce remuneration principles and alignment with culture.
Key actions in 2022
During 2022, the Remuneration Committee has been focused on:
• The vesting process for LTIP Scheme 1 options;
• Reviewing existing LTIP schemes, to ensure that they continue to meet their originally stated objectives for all stakeholders. In
addition, beginning the process of assessing an appropriate LTIP scheme for the CEO;
• Listening to the views of colleagues through the colleague-led Employee Resource Groups (ERGs); and
• Enhancing governance and reporting on Remuneration and People Policies across the Group.
Priorities for 2023
During 2023, the Remuneration Committee will focus on:
• Enhancing links to the wider workforce population, including ongoing discussions with the colleague-led ERGs;
• Finalisation of an appropriate LTIP scheme for the CEO; and
• Review of industry best practices relating to remuneration, ensuring that our policies and processes remain appropriate for our
growing business.
ANNUAL REPORT AND ACCOUNTS 2022
59
Directors’ Report
Directors’ Remuneration Report
Dear Shareholders,
On behalf of the Remuneration Committee, I am pleased to present the Remuneration Committee report to you for the financial year ended
31 December 2022.
The report contains three main sections: 1) Remuneration Committee Update 2) Remuneration policy report and 3) Annual remuneration
report.
REMUNERATION COMMITTEE UPDATE
The key focuses of the Committee during 2022 have been: To ensure an appropriate vesting mechanism for LTIP Scheme 1 participants;
To undertake a review of the Group’s existing LTIP arrangements to ensure that all performance targets and scheme structures are
appropriately aligned to the schemes’ originally stated objectives; Continuing the assessment of an appropriate LTIP scheme for the CEO;
Listening to colleagues’ feedback as Employee Resource Groups were established; and Continuing to further enhance governance and
reporting relating to remuneration and people policies across the Group.
I was pleased to report in my 2021 Directors’ Remuneration Report that LTIP Scheme 1 achieved the stated performance target of £52m
Adjusted EBITDA excluding the impact of IFRS16 (£58.6m Actual) with the Full Year 2021 results. Whilst the majority of participants chose
to exercise their options (4.5m options), holders of the remaining 2.0m options chose to defer their exercise, as allowable under the scheme
rules. The Committee approved that the remaining 2.0m options can be exercised by participants at any point before August 2033, subject
to compliance with the Company’s Share Dealing Code. LTIP Scheme 1 is now closed.
During the year, the Committee determined that a review of LTIP Schemes 2 and 4 would be appropriate, to ensure that their current
structure would continue to achieve their originally stated objectives, which are to:
- Act as a real incentive for colleagues and achieve long term retention of the company’s key talent
- Be aligned to key performance conditions, which reflect the underlying performance of the company.
Throughout the review process, the Committee consulted with our NOMAD, Legal Adviser, a Remuneration Adviser, Scheme participants and
a number of key shareholders, to ensure that any changes made to existing LTIP Schemes 2 and 4 would be appropriate for all stakeholders.
In addition, the core precepts of clarity, simplicity, risk, proportionality, alignment to culture and predictability of remuneration schemes
from the Corporate Governance Code were considered as part of the review. The review identified that the following three elements of the
Corporate Governance Code would benefit from changes to Schemes 2 and 4 (all references to EBITDA within the Directors’ Remuneration
Report refer to ‘Adjusted EBITDA’ as defined on page 5):
•
•
•
Clarity – The Committee recognises that the LTIP Schemes need to reflect the underlying performance of the Company,
therefore, EBITDA would be a far clearer metric to reflect company performance than Total Shareholder Return (‘TSR’), which can
be influenced by factors beyond our control.
Simplicity – The Committee believes that aligning scheme performance conditions to EBITDA and introducing a phased vesting
for Scheme 2 would simplify the current schemes for all stakeholders and would enable the schemes to achieve their originally
stated objectives.
Predictability – In order to act as a real incentive for colleagues, the Committee believes that option holders must be able to
understand and influence the target outcome and the use of EBITDA is a clear metric that all participants understand and can
determine their own contribution to. The Committee also believes that option holders must be able to sell or retain any vested
shares from these schemes (in line with the Scheme rules and the Share Dealing Code) at a time of their choosing. Creating
multiple, smaller tranches of options rather than one large tranche would enable this.
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ANNUAL REPORT AND ACCOUNTS 2022
Directors’ Report
Directors’ Remuneration Report
The below table summarises the changes that the Committee have made to LTIP Schemes 2 and 4, in order to achieve their originally stated
objectives.
Scheme 2 (2019)
Scheme 4 (2021)
Old basis for
target
The award will vest if the compounded annual growth
(CAGR) in the Group’s TSR performance over the five-
year performance period (ending March 2025) is equal
to or exceeds 16% per annum (100% vest).
The award will vest if the compounded annual growth
(CAGR) in the Group’s TSR performance over the five-
year performance period (measured in the February
following year end) meets the below vesting criteria:
- If TSR achieves 6% compounded over 2022-2024
(10% vest)
- If TSR achieves 16% compounded over 2022-2025
(20% vest)
- If TSR achieves 16% compounded over 2022-2026
(70% vest)
New basis for
target
The awards will vest based upon the following
proportions if EBITDA targets are met, as measured in
the year end results for the below years:
The awards will vest based upon the following
proportions if EBITDA targets are met, as measured in
the year end results for the below years:
- 2023 £100m EBITDA (25% Vest)
- 2024 £110m EBITDA (25% Vest)
- 2025 £125m EBITDA (25% Vest)
- 2026 £145m EBITDA (25% Vest)
- 2023 - Not Applicable
- 2024 £110m EBITDA (10% Vest)
- 2025 £125m EBITDA (20% Vest)
- 2026 £145m EBITDA (70% Vest)
In introducing the above amendments to LTIP Schemes 2 and 4, the Committee considered the following:
• That the total time period that both schemes have been/will continue to be in existence will exceed 5+ years.
• That the proposed EBITDA targets have been calculated to align with the prior 16% CAGR TSR targets, starting with the base EBITDA
in 2019 of £49.8m and applying a comparable growth rate compounded over the revised vesting schedule (further uplifted to add in
acquisitions completed in the period since 2019).
• For Scheme 2, that the changes were appropriate for all stakeholders. It should be noted that in moving the vesting percentages from
100% in one tranche, to be split evenly (25% each) over four tranches and the measurement dates moved from March 2025 alone to
the years ending 2023, 2024, 2025 and 2026, the Weighted Average Life of options for Scheme 2 participants has moved from 2 years
to 2.8 years. This change accelerated 25% of the potential vesting forward by one year and moved 50% back by two years. Whilst the
Weighted Average Life of options has moved from 2 years to 2.8 years, the propensity to vest some of the award earlier and the ability
to vest part of the award (versus all or nothing) provides a better balance over the total life of the scheme. As a result, the Remuneration
Committee believes this to be an appropriate balance for option holders and shareholders.
• For Scheme 4, the Committee determined that the vesting percentages (at 10%, 20% and 70%) and the measurement dates (years
ending 2024, 2025 and 2026) remain appropriate. As a result, the Weighted Average Life of remaining options on Scheme 4 was
unchanged.
The share-based payments charge has been disclosed by scheme on page 67.
During 2022, the Committee also commenced the assessment of an appropriate LTIP scheme for the CEO, which the Committee will
continue to evaluate during 2023.
ANNUAL REPORT AND ACCOUNTS 2022
61
Directors’ Report
Directors’ Remuneration Report
During the year, as our Employee Nominated Non-Executive, I have enjoyed spending time with colleagues and listening to their perspectives,
especially as they relate to the broader culture of the organisation. The Company introduced five Employee Resource Groups (ERGs) during
2022 (as noted below) and I have had the privilege of meeting with a selection of colleagues from these ERGs during the year:
• Gender Balance
• Race and Ethnicity (‘EmbRACE’)
• LGBTQ+ Allies (‘PRIDE’)
• Philanthropy
• Social & Leisure
The key themes from each meeting that I attended ware shared with the Committee and the Board. Key takeaways for this year have
been that:
• Our colleagues are delighted that the ERGs have been established and they provide an excellent forum for idea sharing across the
Group. They also provide a mechanism for cross-team/country working and learning, and provide a feedback mechanism to the Board.
• The Group’s focus on colleague development continues to be important and the recent introduction of LinkedIn Learning as a tool for
colleagues is valued, with more to do on this in 2023.
• Whilst we have a strong culture within GlobalData, our recently introduced new values (Courage, Curiosity, Collaboration) require
further embedding across the organisation.
• Recognising that the ERG forums are relatively new, each ERG will continue to hone its remit, resources and areas of focus during 2023.
We have continued our progress towards enhanced governance and reporting on remuneration and people policies across the Group. Of
particular focus this year has been the introduction of our hybrid working policy, which has further solidified our learnings from COVID-19,
helped us to continue delivery of our business targets and supported our colleagues. We are very conscious that the Cost of Living Crisis
is having a significant impact across the UK and our colleagues are also impacted, therefore, a number of targeted pay reviews have
been conducted for our lowest paid colleagues. Significant colleague discussions happened during the year, including through regular CEO
communication sessions. Specific engagement with colleagues relating to executive remuneration has not taken place due to there being
no material changes during the period.
In the previous year, we implemented a new Remuneration Policy. We have included a review of compliance against the policy, in which we
have noted full compliance during 2022. Please refer to page 65, for further detail.
At the AGM in April 2022, we included, for the first time, an advisory resolution to accept the Directors’ Remuneration Report. This was
included to give Shareholders a platform to register any concerns with the focus areas noted within the Directors’ Remuneration Report.
The AGM results, in relation to remuneration, have been presented in the Directors’ Remuneration Report as well as commentary addressing
any points of feedback, including subsequent actions taken by the Committee and the Board.
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ANNUAL REPORT AND ACCOUNTS 2022
Directors’ Report
Directors’ Remuneration Report
REMUNERATION POLICY REPORT
Remuneration Policy – overview
Purpose - The Executive Remuneration Policy aims to set out the policies and principles related to the elements of remuneration
considered for Executive pay. It also sets out the oversight and guidance the Remuneration Committee gives on aligning Executive,
senior management and the broader workforce’s pay to the company’s performance and strategy.
Principles – The policy has been implemented with the following key principles:
• Remuneration policies and practices are designed to support strategy and promote long-term sustainable success.
• Directors can exercise independent judgement and discretion when authorising remuneration outcomes.
• The Remuneration Committee has delegated responsibility for determining the policy for Executive Director remuneration and
•
setting remuneration for the Chair and Executive Directors.
It is the intention of the policy to set remuneration which:
• has clarity and is transparent
• has a simple structure, without undue complexity
• does not invite undue risk to the business
•
•
• aligns to the culture of the business and its core values.
is predictable in outcome
is proportional to the delivery of strategy and long term performance of the business
• Similar principles to those applied to Executive Directors are taken into account by the CEO when setting the remuneration and
benefits of senior managers (which are reviewed annually by the Committee) and other colleagues.
Responsibilities - The Remuneration Committee is responsible for determining the service contract terms, remuneration and other
benefits of the Executive Directors. The Committee is chaired by myself, Annette Barnes (an Independent Non-Executive Director),
supported by 3 Non-Executive Directors: Andrew Day, Julien Decot and Murray Legg.
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.
ANNUAL REPORT AND ACCOUNTS 2022
63
Directors’ Report
Directors’ Remuneration Report
The elements of remuneration that could be offered to Executive Directors are defined in the table below. Currently, only our Chief Financial
Officer receives Executive remuneration.
Element
Purpose and link to strategy
Operation
Maximum Opportunity
Base Salary
Is payable in cash spread over
12 monthly payments. It is
set at an appropriate level,
based on benchmark data, to
attract and retain
management of a high calibre
with the necessary skills and
credentials required to deliver
a sustainable business model
and drive shareholder returns.
Benefits
Provide Executive Directors
with market-competitive
benefits consistent with
the role.
Base salaries are normally reviewed
annually but may be reviewed at other times
if the Committee considers this appropriate.
In determining base salary levels and any
salary increase, consideration is given to:
•
the individual’s experience and the
performance of the Group and the
individual;
• salary levels at other companies of a
similar size and complexity; and
the pay levels and increases for other
employees in the Group.
•
The Committee’s Policy is to set benefits at
an appropriate level, taking into account the
market benchmarks and benefits offered
to the wider workforce. Executive Directors
can currently receive private health
insurance and life assurance as standard
benefits, which is broadly in line with senior
roles within the Senior Leadership Team.
Pension
To enable the Company to
offer market-competitive
remuneration through
the provision of additional
retirement benefits.
Executive Directors are eligible for defined
employer contribution funding to the
GlobalData Pension Plan, payments into a
personal fund and/or a cash allowance in
lieu of pension.
Annual Bonus
Plan
Rewards Executive Directors
for delivery of defined
measures set annually by the
Board. Relevant performance
metrics are selected to focus
on improvements in short
term annual performance and
can be financial and non-
financial targets.
Long-Term
Incentive
Plan (LTIP)
Designed to reward delivery
of shareholder value in the
medium-to-long term.
Pension arrangements are aligned with
those offered to senior roles within the
Senior Leadership Team.
Annual bonus is a cash award of up to
20% of base salary focused on specific
performance metrics relevant to each year.
In certain circumstances the Committee
will have the discretion to reduce the
size (“malus”) or require the repayment
(“clawback”) of the bonus following receipt
by the Executive Director.
The Remuneration Committee can award
share options on any of our active LTIPs.
The Committee will take into account
market conditions and incentives of
the wider workforce, ensuring that UK
Corporate Governance Code and Investment
Association Principles are considered.
Full details of the share option scheme
operated by the Group are set out in note 25.
While there is no maximum salary
level, salary increases will generally
be in line with increases awarded to
other colleagues in the Group.
The overall level of benefits will
depend on the cost of providing
individual items and the individual’s
circumstances.
For any all-employee share plans
which may be offered in the future, the
maximum participation levels will be
the same as any maximum applicable
to other employees (and consistent
with any relevant tax limits).
In accordance with provision 38
of the Corporate Governance
Code, the aggregate value of any
annual pension contributions
and cash allowance for each of
the Executive Directors will be in
line with the maximum employer
pension contribution available to the
majority of the workforce.
The minimum annual bonus is
0% of salary, if performance falls
below expected standards. The
maximum annual bonus opportunity
is typically 20% of salary, payable in
cash.
No maximum, but the Committee
will consider benchmark data
and consult with shareholders on
material awards.
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ANNUAL REPORT AND ACCOUNTS 2022
£1,500,000
£1,200,000
£900,000
£600,000
£300,000
£0
Directors’ Report
Directors’ Remuneration Report
Shareholding Guidelines
In line with provision 36 of the UK Corporate Governance Code and as outlined in last year’s report, the Committee included a policy on
Executive Director shareholding requirements both during and post-employment, within the Remuneration policy.
The policy states that all Executive Directors should hold 100% of their base salary in shares within five years of appointment and hold 100%
of their base salary in shares for one year post-employment and 50% for two years post-employment. As at 27 February 2023, the CFO held
15,000 shares with approximate value of £195,000, which equates to ~78% of salary. Given that the policy was implemented during 2022,
the Committee is satisfied that he is working towards this criteria. The CEO’s holding was 60.1% as at 27 February 2023.
Malus and Clawback
Malus and clawback provisions will apply to the Annual Bonus Plan and Long-Term Incentive Plan for a period of at least two years after
payment or vesting. Circumstances in which malus and clawback may be applied include a material misstatement of the Company’s
financial accounts, fraud or gross misconduct on the part of the award-holder or an error in calculating the award vesting outcome.
Participants in the performance-related bonus and LTIP are required to acknowledge their understanding and acceptance of the malus and
clawback provisions as a pre-condition to participating in these plans. The Committee is satisfied that the malus and clawback provisions
are appropriate and enforceable.
Pay for Performance Scenarios
The charts below provide an illustration of the potential future reward opportunities for the CFO in 2023, and the potential split between the
different elements of remuneration under two different performance scenarios: ‘Minimum’ and ‘On-target’.
• The ‘Minimum’ scenario reflects base salary (i.e. fixed remuneration) which is the only element of the CFO’s remuneration packages not
linked to performance. The total Minimum scenario is £250,000.
• The ‘On-target’ scenario reflects target thresholds being met to trigger 100% of annual bonus payment as well as the share options
due to vest in 2023. Share options are valued at the fair value used to calculate the share-based payments charge for the tranche
related to 2023 performance (£11.80). The total On-target scenario is £1,185,000. If the share price were to rise by 50% to £17.70 in the
next financial year, the On-target scenario would total £1,627,500.
£1,500,000
£1,200,000
£900,000
£600,000
£300,000
£0
Salary
Performance bonus
LTIP
250,000
Minimum
885,000 (75%)
50,000 (4%)
250,000 (21%)
On-target
Operation of Remuneration policy
The Remuneration Policy operated as intended during the year, in terms of both remuneration performance and quantum. The policy has been
subject to an annual review, with no changes deemed necessary at this time. The Remuneration Committee has proactively chosen not to
apply discretion to any Executive Director Remuneration elements or outcomes during the year.
ANNUAL REPORT AND ACCOUNTS 2022
65
Directors’ Report
Directors’ Remuneration Report
ANNUAL REMUNERATION REPORT
The CFO’s salary was increased on 1 March 2021 from £200,000 per annum to £250,000 per annum. The increase followed a market
benchmark review, by the Remuneration Committee, of salaries for CFOs in similar sized companies where it was determined that his salary
was below market norms and should be adjusted accordingly. The increase also reflected his extended responsibilities including, but not
limited to, having responsibility for risk management within the Group.
In addition, his salary has been reviewed for 2023. As his base salary and total compensation continue to benchmark appropriately, no
increase was proposed. The Remuneration Committee have reviewed the CFO’s eligibility for a bonus award for 2022 based upon financial
and individual performance and have approved 100% (£50,000) of the award. The minimum financial performance target of £82m EBITDA
(excluding the acquisition of MBI and TS Lombard) was achieved.
Non-Executive Directors’ remuneration
All Non-Executive Directors (NEDs) have letters of appointment with the Company. The remuneration of NEDs is determined by the Board,
and that of the Chairman, determined by the Remuneration Committee. No Director is involved in setting their own remuneration. NED fees
have been subject to a market benchmarking review for 2023 (previously conducted in 2021) and consider both the time commitment and
responsibilities of the role. The review determined that the GlobalData Chairman’s basic salary was out of market having regard to the size
of the Group and responsibilities of the role. The Committee agreed to increase the Chairman’s basic salary from £100,000 to £120,000 for
2023. Whilst still out of market, the Committee felt that restraint was appropriate in the current climate. Aligned to market insight and time
commitments, the NED basic salary will increase from £50,000 to £55,000. The Remuneration Chair Fee, recognising that she is also the
Senior Independent Director (SID), will increase from £10,000 to £15,000.
Element
Purpose and link to strategy
Operation
Maximum Opportunity
Chairman and
Non-Executive
Directors’ Fees
The fees are set to attract and
retain high calibre individuals
by offering market-competitive
fees, considering the time that is
required to fulfil the relevant role.
Fees are reviewed periodically. The Chairman
of the Board is paid a consolidated fee to
reflect all the duties associated with the
position. The Non-Executive Directors receive
a base fee reflecting their duties on the Board
and memberships of any Committees. The
Chairs of Board Committees are eligible for
an additional fee, reflecting the additional
time and expertise required. The Chairman
and Non-Executive Directors are covered
under the Group accident and travel policy as
it relates to work on behalf of the Company.
Expenses in line with Company policy will be
reimbursed and the Company will pay any tax
incurred, as necessary.
There is no prescribed
individual maximum but
the fee levels will reflect
prevailing market practice
and salary increases across
the Group. The maximum
annual aggregate fee for all
Non-Executive Directors is
as set out in the Company’s
Articles of Association, but
may increase or decrease if
the Articles of Association
are amended to reflect such
a change.
AGM result and outcomes
The following table shows the non-binding result of the vote to receive and approve the Remuneration Report for the 2021 financial year at
the 2022 AGM.
For
Against
Withheld
Total Votes Cast
Remuneration Report
votes
82,867,638
14,758,064
238,800
97,864,502
% votes
85%
15%
0%
Although the resolution was passed and the votes against did not exceed 20%, the Committee noted that the vote against was believed to
be in relation to missing disclosure on the reasons behind the CFO pay increase on 1 March 2021. In response to this, the Committee wrote
to the shareholders who raised this as a concern and also remedied the lack of the disclosure at the earliest communication, which was the
interim results on 1 August 2022. Disclosure has also been added to this Annual Report to clarify the rationale behind the salary increase.
66
ANNUAL REPORT AND ACCOUNTS 2022
Directors’ Report
Directors’ Remuneration Report
Long-Term Incentive Plans
Total amounts charged to the income statement:
Scheme 1
Scheme 2
Scheme 4
Movement of share options held by the CFO in 2022:
Number of options brought forward
Exercised 11 August 2022
Closing number of options
Scheme 1
No.
100,000
(25,000)
75,000
Year ended 31
December
2022
Year ended 31
December
2021
£m
-
3.3
0.8
4.1
Scheme 2
No.
300,000
-
300,000
£m
6.3
2.9
-
9.2
Total
No.
400,000
(25,000)
375,000
The CFO exercised the 75,000 options in Scheme 1 post year end, on 13 January 2023. The CEO had no share option awards in either
Scheme 1, 2 or 4 brought forward or carried forward as at 31 December 2022.
During the year the Group’s Employee Benefit Trust purchased an aggregate amount of 5.3m shares at a total market value of £66.6m
(representing 4.5% of the total share capital). The purchased shares are held in the Trust for the purpose of satisfying the exercise of share
options under the Company’s Employee Share Option Plans. The following table assumes vesting occurs in full.
Vesting Schedule
2023 No.
2024 No.
2025 No.
2026 No.
2027 No.
Total No.
Scheme 1*
Scheme 2
Scheme 4
Total
Shares held in trust
Net dilution
997,227
997,226
-
-
-
1,994,453
-
-
840,000
840,000
840,000
840,000
3,360,000
-
171,600
343,200
1,201,200
1,716,000
997,227
1,837,226
1,011,600
1,183,200
2,041,200
7,070,453
(997,227)
(1,837,226)
(1,011,600)
(1,183,200)
(543,772)
(5,573,025)
-
-
-
-
1,497,428
1,497,428
*The remaining share options in Scheme 1 can be exercised anytime until August 2033 and therefore for the purposes of this analysis we have assumed they
will be exercised over the next two years.
The net dilution of 1,497,428 shares represents 1.3% of issued share capital.
The total charge recognised for the schemes during the year ended 31 December 2022 was £4.1m (2021: £9.2m). The awards of the scheme
are settled with ordinary shares of the Company.
ANNUAL REPORT AND ACCOUNTS 2022
67
Directors’ Report
Directors’ Remuneration Report
Directors’ emoluments Audited information
Year ended 31
December 2022
Basic
salary
Committee
Chair fees
Bonus
Share-
based
payment
Other
benefits
Total
Total Fixed
Total
Variable
£000s
£000s
£000s
£000s
£000s
£000s
£000s
£000s
Murray Legg
(Chairman)
Mike Danson
Graham Lilley
Annette Barnes
(SID)
Peter Harkness
Andrew Day
Catherine Birkett
Julien Decot
100
-
250
50
50
50
50
50
-
-
-
10
-
-
15
-
-
-
50
-
-
-
-
-
Year ended 31
December 2021
Basic
salary
Committee
Chair fees
Bonus
£000s
£000s
£000s
47
85
-
242
50
50
50
10
41
34
Bernard Cragg1
Murray Legg
Mike Danson
Graham Lilley
Annette Barnes
Peter Harkness
Andrew Day
Elizabeth
Pritchard2
Catherine
Birkett3
Julien Decot4
1 Relates to a 4 month period
2 Relates to a 10 week period
3 Relates to a 10 month period
4 Relates to an 8 month period
-
5
-
-
8
2
-
-
10
-
-
-
-
-
-
-
-
-
-
-
-
-
316
-
-
-
-
-
Share-
based
payment
£000s
1,902
-
-
-
-
-
-
-
-
-
-
-
3
3
-
2
1
1
Other
benefits
£000s
-
-
-
1
-
-
1
-
1
1
100
-
619
63
50
52
66
51
100
-
251
60
50
51
66
51
Total
Total Fixed
£000s
1,949
90
-
243
58
52
51
10
52
35
£000s
47
90
-
243
58
52
51
10
52
35
-
-
368
3
-
1
-
-
Total
Variable
£000s
1,902
-
-
-
-
-
-
-
-
-
As at 31 December 2022, Graham Lilley had 375,000 share options in issue (2021: 400,000) of which 75,000 had vested from Scheme 1 and
the remaining 300,000 are in Scheme 2. Further details are given in note 25. No other Executive Directors as at 31 December 2022 had
share options.
The other benefits consist of travel expenses to GlobalData offices. Share-based payment represents equity settled income received on
the vesting of share options in the year.
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ANNUAL REPORT AND ACCOUNTS 2022
Directors’ Report
Directors’ Remuneration Report
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 27 February 2023 are:
Contract date
Notice period
23 February 2016
1 October 2008
5 April 2021
24 January 2017
12 April 2016
24 January 2017
1 March 2021
30 April 2021
3 months
12 months
12 months
3 months
3 months
3 months
3 months
3 months
Murray Legg
Mike Danson
Graham Lilley
Annette Barnes
Peter Harkness
Andrew Day
Catherine Birkett
Julien Decot
By order of the Board
Annette Barnes
Chair of the Remuneration Committee
27 February 2023
ANNUAL REPORT AND ACCOUNTS 2022
69
Directors’ Remuneration Report
“As a responsible business,
Directors’ Report
sustainability sits at the heart
of our plan and, as a team,
GlobalData is a firm believer
that our Company can drive
positive change and be a
force for good through our
critical information and
technology innovations.”
Mike Danson, Chief Executive
70
ANNUAL REPORT AND ACCOUNTS 2022
Directors’ Report
Statement of Directors’ responsibilities in respect of the Annual Report
and the financial statements
The Directors are responsible for preparing the Annual Report and the 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 are required to
prepare the Group financial statements in accordance with United Kingdom adopted international accounting standards. The financial
statements also comply with International Financial Reporting Standards (IFRSs) as issued by the IASB. The Directors have chosen to
prepare the parent Company financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United
Kingdom Accounting Standards and applicable law), including FRS 101 “Reduced Disclosure Framework”. 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;
• Present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable
information;
• State whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the
financial statements; and
• Prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company 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 corporate and financial information included on the Company’s
website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation
in other jurisdictions.
Auditors
A resolution to reappoint Deloitte LLP as auditors to the Company will be proposed at the Annual General Meeting.
Disclosure of information to auditors
The Directors confirm that: so far as each Director is aware, there is no relevant audit information of which the Group’s auditors are unaware,
and the Directors have taken all steps that they ought to have taken in order to make themselves aware of any relevant audit information
and establish that the Group’s auditors are aware of that information. This confirmation is given and should be interpreted in accordance
with the provisions of s418 of the Companies Act 2006.
Annual General Meeting
The Annual General Meeting will be held on 25 April 2023 at John Carpenter House, John Carpenter Street, London EC4Y 0AN at 10am.
Approved by the Board and signed on its behalf by
Mike Danson
Chief Executive
27 February 2023
ANNUAL REPORT AND ACCOUNTS 2022
71
Independent Auditor’s Report
Independent Auditor’s Report to the Members of GlobalData Plc
Report on the audit of the financial statements
1. OPINION
In our opinion:
•
the financial statements of GlobalData plc (the ‘parent company’) and its subsidiaries (the ‘group’) give a true and fair view of the
state of the group’s and of the parent company’s affairs as at 31 December 2022 and of the group’s profit for the year then ended;
•
•
•
the group financial statements have been properly prepared in accordance with United Kingdom adopted international
accounting standards and International Financial Reporting Standards (IFRSs) as issued by the International Accounting
Standards Board (IASB);
the parent company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted
Accounting Practice, including Financial Reporting Standard 101 “Reduced Disclosure Framework”; and
the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements which comprise:
•
•
•
•
•
•
•
the consolidated income statement;
the consolidated statement of comprehensive income;
the consolidated and parent company statements of financial position;
the consolidated and parent company statements of changes in equity;
the consolidated statement of cash flows;
the related notes 1 to 28 to the consolidated financial statements; and
the related notes 1 to 13 to the parent company financial statements.
The financial reporting framework that has been applied in the preparation of the group financial statements is applicable with United
Kingdom adopted international accounting standards and IFRSs as issued by the IASB. The financial reporting framework that has been
applied in the preparation of the parent company financial statements is applicable law and United Kingdom Accounting Standards,
including FRS 101 “Reduced Disclosure Framework” (United Kingdom Generally Accepted Accounting Practice).
2. 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 Financial Reporting Council’s (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.
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Independent Auditor’s Report to the Members of GlobalData Plc
3. SUMMARY OF OUR AUDIT APPROACH
Key audit matters
The key audit matters that we identified in the current year were:
•
•
the accuracy of subscription revenue recognition;
the determination of cash generating units (“CGUs”) for the purposes of reviewing goodwill and intangibles
for impairment;
the valuation of intangible assets acquired in business combinations.
•
Within this report, key audit matters are identified as follows:
Newly identified
Increased level of risk
Similar level of risk
Decreased level of risk
Materiality
Scoping
The materiality that we used for the group financial statements was £3,000,000 (2021: £1,700,000), equating to
6.1% (2021: 5%) of profit before tax adjusted to exclude the amortisation of acquired intangible assets.
We performed full scope audits or audits of specified balances and transactions of the principal entities within
the group, comprising the group’s operations within the UK, the USA, India and the United Arab Emirates. These
in-scope locations represent the key trading entities within the group and account for 89% of group revenue, 91%
of profit before tax and 96% of group net assets.
Significant
changes in our
approach
We have removed the key audit matter disclosed in the prior year audit report in relation to the recoverability of
goodwill and intangible assets in the MEED CGU. MEED is no longer a standalone CGU and has been merged with
the Data, Analytics and Insights (DA&I) CGU, therefore the impairment of assets in the MEED CGU is no longer a
key audit matter.
We have identified the reassessment of CGUs as a new key audit matter in the current year.
The key audit matter reported in the prior year audit report in relation to the valuation of intangibles acquired
in business combinations remains, however, this now relates to the current year acquisitions of MBI Holdings
Limited and TSL Research Group Limited.
ANNUAL REPORT AND ACCOUNTS 2022
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Independent Auditor’s Report
Independent Auditor’s Report to the Members of GlobalData Plc
4. CONCLUSIONS RELATING TO GOING CONCERN
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation
of the financial statements is appropriate.
Our evaluation of the directors’ assessment of the group’s and parent company’s ability to continue to adopt the going concern basis of
accounting included:
• consideration of the cash held by the group of £34m, net debt of £273m and further undrawn facilities of £120m, in the context of the
operating cash flow needs of the group;
• consideration of the expiry date of the group’s borrowing facilities, which mature at the end of April 2025, and whether there is any
current evidence to indicate that a renewal of those facilities may not occur;
• assessment and sensitivity of the headroom on the group’s cash flow forecasts including the assumptions within the one-year
detailed budget;
• evaluation of the group’s borrowing covenants and review of the scenarios which could lead to a covenant breach and evaluation of
whether any of those scenarios are reasonably possible;
• assessment of the suitability of the model used by the group to forecast cash flows, including testing of clerical accuracy of the
model; and
• assessment of the historical accuracy of cash flow forecasts.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually
or collectively, may cast significant doubt on the group’s and parent company’s ability to continue as a going concern for a period of at least
twelve months from when the financial statements are authorised for issue.
In relation to the reporting on how the group has applied the UK Corporate Governance Code, we have nothing material to add or draw
attention to in relation to the directors’ statement in the financial statements about whether the directors considered it appropriate to
adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this
report.
5. KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional judgement, 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 which had the greatest effect on: the overall audit strategy, the allocation of resources in the
audit; and directing the efforts of the engagement team.
These matters 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.
5.1. Accuracy of subscription revenue recognition
Key audit
matter
description
The specific nature of the risk of material misstatement in revenue recognition varies across the Group’s revenue
streams, with total group revenue of £243.2m (2021: £189.7m).
The main source of revenue for the group is subscription revenue for Data, Analytics and Insights as set out by
management in the Strategic Report and note 5 to the consolidated financial statements. Management’s accounting
policy is to recognise subscription revenue evenly over the period of the contractual term as the performance
obligations are satisfied evenly over the term of subscription. Revenue recognised over time represents 81% of
consolidated revenue.
Due to the complexity of the manual calculations and reliance on spreadsheets required in releasing revenue to the
consolidated income statement, we identified a significant risk due to fraud or error in relation to the accuracy of
revenue arising from such manual adjustments. The Group’s revenue recognition accounting policies are disclosed in
note 2 to the consolidated financial statements.
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Independent Auditor’s Report to the Members of GlobalData Plc
How the
scope of
our audit
responded to
the key audit
matter
We obtained an understanding of the Group’s business model and terms set out in customer contracts and the sales
process. We obtained an understanding of relevant controls over the sales process from ordering to cash collection,
including those related to the releasing of revenue from deferred revenue.
The procedures we performed across the entities within our audit scope included the following:
• we obtained an understanding of relevant controls in relation to revenue recognition and tested the controls relating
to the reconciliation of the sales system to the accounting system and review of approved orders not yet invoiced;
• we used data analytics procedures to recalculate the subscription revenue recognised in the year and the deferred
revenue balance recorded at the year end, to identify variances where actual recorded revenue differed from the
recalculated amount and then subjected such amounts to further testing procedures on a sample basis;
• we obtained evidence to determine whether a sample of variances which were identified through our data analytics
were correctly accounted for; this included performing tests of detail to corroborate management’s explanations
by reviewing third party documentation; and
• we performed tests of detail of the accuracy, occurrence and completeness for a sample of revenue transactions,
through obtaining and reviewing relevant customer contracts and fulfilment data to assess whether revenue was
appropriately recorded.
Key
observations
We made control recommendations to the Audit Committee to further reduce the number of variances identified.
Based on the audit procedures performed we concluded that revenue from subscriptions was not materially misstated.
5.2. Determination of CGUs for the purposes of reviewing goodwill and intangibles for impairment
Key audit
matter
description
The group has performed an assessment of its cash generating units (“CGUs”) during the year to 31 December
2022, resulting in the assets previously identified as the MEED CGU, now being included within the Data, Analytics
and Insights (“DA&I”) CGU. This is because management consider the further integration of MEED into the group
means that it is no longer possible to identify separate cashflows. As a result, MEED and DA&I are not generating
independent cash inflows and the assets should be recognised as a single CGU.
IAS 36 requires that CGUs should be identified consistently from period to period for the same assets or type of assets
unless a change is justified. Consequently, we identified a risk relating to whether management’s reassessment
was in line with the requirements of IAS 36 as an incorrect aggregation of the two CGUs may result in the potential
understatement of required impairments in goodwill and intangible assets.
Management’s rationale for the reassessment, based on the integration of the assets in the group onto a single
platform, is disclosed in the audit committee report on page 56 and in note 13 to the consolidated financial statements.
How the
scope of
our audit
responded to
the key audit
matter
We evaluated management’s CGU assessment for goodwill and other intangibles using a range of audit procedures.
These included the following:
• We understood management’s controls relating to the identification of cash generating units;
• We assessed whether management’s determination of CGUs complies with the requirements of IAS 36;
• We challenged management’s impairment assessment applying the previously identified CGUs to understand if this
would have identified impairment;
• We assessed the adequacy of the group’s disclosure of its CGUs in light of the requirements of IAS 36.
Key
observations
We are satisfied and concur with management’s conclusion of integrating the MEED CGU into the DA&I CGU, that
management’s assessment complies with the requirements of IAS 36 and that no impairment would have been
identified when applying the previously identified CGUs.
We consider the disclosure in note 13 to comply with the requirements of IAS 36.
ANNUAL REPORT AND ACCOUNTS 2022
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Independent Auditor’s Report
Independent Auditor’s Report to the Members of GlobalData Plc
5.3. The valuation of intangible assets acquired in business combinations
Key audit
matter
description
During the year the group made two significant acquisitions as disclosed in the Strategic Report and note 27 of the
financial statements:
• On 9 June 2022 the group completed the acquisition of MBI Holdings Limited for consideration paid of £22.9m.
• On 31 August 2022, the group completed the acquisition of TSL Research Group Limited with consideration paid
of £13.3m.
How the
scope of
our audit
responded
to the key
audit matter
Management engaged a third party expert to assist them with the determination and valuation of intangible assets
acquired.
We identified these acquisitions as a key audit matter because of their size in the context of group materiality and
the judgements associated with the valuation of intangible assets accounted for in accordance with IFRS 3 Business
Combinations.
We assessed the identification and valuation of assets acquired in business combinations. Our procedures included:
• engaging with internal valuation specialists to evaluate management’s valuation of intangible assets acquired
during the transactions.
• performing procedures to evaluate the competence, capabilities and objectivity of management’s third-party expert
used to complete the purchase price allocation exercise.
• assessing whether management identified and recognised all intangible assets acquired within the transactions
•
through gaining an understanding of the acquired businesses.
inspecting a combination of historical internal and external evidence to assess the assumptions used by management
within their valuations, including a critical assessment of the valuation methods used to value the different assets
recognised, and to assess their compliance with the accounting standards.
• assessing the appropriateness of the useful lives of the acquired assets recorded by management to ensure that
they were appropriately reflected the expected period of generation of future economic benefits from the use of the
acquired assets.
reviewing the disclosure which management has made in relation to these acquisitions within the financial
statements and considered its consistency with the fact pattern of our audit work.
•
Key
observations
Based on the audit procedures performed, we concluded that management’s identification and valuation of intangible
assets within the acquisitions, and their associated disclosures within the financial statements, are appropriate.
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Independent Auditor’s Report to the Members of GlobalData Plc
6. OUR APPLICATION OF MATERIALITY
6.1. 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 both in planning the scope of our audit work and
in evaluating the results of our work.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Group financial statements
Parent company financial statements
Materiality
£3,000,000 (2021: £1,700,000)
£900,000 (2021: £715,000)
Basis for
determining
materiality
Rationale for
the benchmark
applied
Group materiality equates to 6.1% (2021: 5%) of profit
before tax, adjusted to exclude the amortisation of
acquired intangible assets, as our basis for materiality.
Parent company materiality equates to 2% (2021: 2%)
of net assets, which has been capped at 50% (2021:
50%) of group performance materiality.
We considered a range of measures, including revenue,
profit before tax, adjusted EBITDA and profit before
tax, adjusted to exclude the amortisation of acquired
intangible assets.
Net assets are typically considered an appropriate
benchmark for materiality as the parent company
predominantly holds investments in trading
subsidiaries.
Materiality has increased compared to 2021 as the size
of the business has grown.
We used profit before tax adjusted to exclude the
amortisation of acquired intangible assets as the
amortisation has a significant impact on profit before
tax and was subject to specific audit procedures.
Its exclusion resulted in a materiality level that was
more reflective of the profit generation of the Group
before such acquisition-related charges. We used a
profit before tax-based measure rather than adjusted
EBITDA as the latter is less closely aligned to measures
calculated in accordance with generally accepted
accounting principles.
We highlight that a materiality of £3,000,000 has
increased compared with the prior year as the business
has grown in size. Materiality represents 1.2% of
revenue, 7.7% of profit before tax and 3.5% of adjusted
EBITDA.
Profit before tax
£51m
Group materiality £3m
Component materiality range
£0.90m to £1.08m
Audit Committee reporting threshold
£0.15m
Profit before tax
Group materiality
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Independent Auditor’s Report to the Members of GlobalData Plc
6.2. Performance materiality
We set performance materiality at a level lower than materiality to reduce the probability that, in aggregate, uncorrected and undetected
misstatements exceed the materiality for the financial statements as a whole.
Performance
materiality
Basis and
rationale for
determining
performance
materiality
Group financial statements
Parent company financial statements
60% (2021: 60%) of group materiality
70% (2021: 70%) of parent company materiality
In determining performance materiality, we considered
our past experience of the group and our risk
assessment, including our assessment of the group’s
control environment and the value and volume of
corrected and uncorrected misstatements identified
during the prior year audit, as well as the likelihood of
these recurring in the current year.
In determining performance materiality, we considered
our past experience of the group and our risk
assessment, including our assessment of the group’s
control environment and the value and volume of
corrected and uncorrected misstatements identified
during the prior year audit, as well as the likelihood of
these recurring in the current year.
6.3. Error reporting threshold
We agreed with the Audit Committee that we would report to the Committee all audit differences in excess of £150,000 (2021: £85,000), as
well as differences below that threshold that, in our view, warranted reporting on qualitative grounds. We also report to the Audit Committee
on disclosure matters that we identified when assessing the overall presentation of the financial statements.
7. AN OVERVIEW OF THE SCOPE OF OUR AUDIT
7.1. Identification and scoping of components
Our group audit was scoped by obtaining an understanding of the group and its environment, including group-wide controls and assessing
the risks of material misstatement at the group level. Our component selection was based on the selection of material balances and
components, with additional consideration of whether, at an aggregated level, we had reduced the risk of material misstatement to an
acceptably low level.
Based on that assessment we performed full scope or an audit of specified balances and transactions on the principal trading entities within
the UK, USA, India and the United Arab Emirates. We have also performed analytical procedures on insignificant entities in the group.
The in-scope locations (those at which a full scope audit or an audit of specified balances and transactions was performed as part of a group
audit) represent 89% of Revenue, 91% of profit before tax and 96% of net assets.
11%
9%
4%
Revenue
Profit
before tax
Net assets
89%
91%
96%
Full audit scope
Specified audit procedures
Review at group level
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Independent Auditor’s Report to the Members of GlobalData Plc
7.2. Our consideration of the control environment
In assessing the control environment of the Group, we identified four relevant IT systems. We tested the general IT controls of two of
these: the main accounting system and the revenue system; and we obtained an understanding of the general IT controls in respect of the
accounts payable and payroll systems. As described in the Audit Committee Report on page 55, management made improvements to the
IT control environment during the year, however, some of the deficiencies identified in the prior year remained at the year end. Accordingly,
consistent with the prior year, and in line with our audit plan, we did not rely on IT controls and extended the scope of our substantive audit
procedures in response to the identified deficiencies.
We also obtained an understanding of the relevant controls associated with the revenue process, the financial reporting process and
process for making accounting estimates. We tested the design and implementation of relevant controls in relation to the revenue process
and note that, as discussed in the Audit Committee report on page 55, management implemented a number of new controls in respect of
subscription revenue during the year. As noted above, we adopted a data analytics-based substantive testing approach to subscription
revenue and did not plan to rely on controls in this area.
7.3. Our consideration of climate-related risks
In planning our audit, we made enquiries of management to understand the extent of the potential impact of climate change risk on the
group’s financial statements.
As disclosed in note 1, management concluded that there was no material impact on the financial statements. Our evaluation of this
conclusion included challenging key judgements and estimates in areas where we considered that there was greatest potential for climate
change impact.
We also considered the consistency of the climate change disclosures included in the Strategic Report on page 52 with the financial
statements and our knowledge from our audit.
7.4. Working with other auditors
We used one component audit team in India during the audit of the financial statements for the year ended 31 December 2022 (2021: one)
and we were in regular contact with them throughout the year. The group team conducted the audit of MEED, a component based in the
United Arab Emirates.
We held team briefings for the component audit team, to discuss the group risk assessment and audit instructions, to confirm their
understanding of the business and to discuss their local risk assessment. Throughout the audit we maintained regular contact in order to
direct and supervise their audit approach. We virtually attended their audit close meeting with local management, performed technology-
enabled remote reviews of their working papers and reviewed their reporting to us on the findings of their work.
8. OTHER INFORMATION
The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report
thereon. The directors are responsible for the other information contained within the annual report.
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.
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 course of 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 this gives rise to
a material misstatement in the financial statements themselves. 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.
ANNUAL REPORT AND ACCOUNTS 2022
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9. RESPONSIBILITIES OF DIRECTORS
As explained more fully in the directors’ responsibilities statement, 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.
10. 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 FRC’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
11. EXTENT TO WHICH THE AUDIT WAS CONSIDERED CAPABLE OF DETECTING IRREGULARITIES,
INCLUDING FRAUD
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our
procedures are capable of detecting irregularities, including fraud is detailed below.
11.1. Identifying and assessing potential risks related to irregularities
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and
regulations, we considered the following:
•
the nature of the industry and sector, control environment and business performance including the design of the group’s remuneration
policies, key drivers for directors’ remuneration, bonus levels and performance targets;
the group’s own assessment of the risks that irregularities may occur either as a result of fraud or error;
results of our enquiries of management, the directors and the audit committee about their own identification and assessment of the
risks of irregularities, including those that are specific to the group’s sector;
•
•
• any matters we identified having obtained and reviewed the group’s documentation of their policies and procedures relating to:
identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of non-compliance;
detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud;
the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations; and
•
•
•
the matters discussed among the audit engagement team including significant component audit teams and relevant internal
specialists, including tax, valuations, IT, and share based payment specialists regarding how and where fraud might occur in the
financial statements and any potential indicators of fraud.
•
As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and
identified the greatest potential for fraud in the accuracy of subscription revenue recognition. In common with all audits under ISAs (UK),
we are also required to perform specific procedures to respond to the risk of management override.
We also obtained an understanding of the legal and regulatory framework that the group operates in, focusing on provisions of those laws and
regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and
regulations we considered in this context included the UK Companies Act and tax legislation in the jurisdictions in which the group operates.
In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but
compliance with which may be fundamental to the group’s ability to operate or to avoid a material penalty.
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Independent Auditor’s Report to the Members of GlobalData Plc
11.2. Audit response to risks identified
As a result of performing the above, we identified accuracy of subscription revenue recognised as a key audit matter related to the potential
risk of fraud. The key audit matters section of our report explains the matters in more detail and also describes the specific procedures we
performed in response to those key audit matters.
In addition to the above, our procedures to respond to risks identified included the following:
•
reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of
relevant laws and regulations described as having a direct effect on the financial statements;
• enquiring of management, the audit committee and in-house legal counsel concerning actual and potential litigation and claims;
• performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement
•
•
due to fraud;
reading minutes of meetings of those charged with governance; and
in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other
adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluating
the business rationale of any significant transactions that are unusual or outside the normal course of business.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members including
internal specialists and significant component audit teams, and remained alert to any indications of fraud or non-compliance with laws and
regulations throughout the audit.
Report on other legal and regulatory requirements
12. OPINIONS ON OTHER MATTERS PRESCRIBED BY THE COMPANIES ACT 2006
In our opinion, based on the work undertaken in the course of the audit:
•
the information given in the strategic report and the directors’ report for the financial year for which the financial statements are
prepared is consistent with the financial statements; and
the strategic report and the directors’ report have been prepared in accordance with applicable legal requirements.
•
In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of
the audit, we have not identified any material misstatements in the strategic report or the directors’ report.
13. CORPORATE GOVERNANCE STATEMENT
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate Governance
Statement is materially consistent with the financial statements and our knowledge obtained during the audit:
•
the directors’ statement with regards to the appropriateness of adopting the going concern basis of accounting and any material
uncertainties identified [set out on page 48];
the directors’ explanation as to its assessment of the group’s prospects, the period this assessment covers and why the period is
appropriate [set out on page 48];
the directors’ statement on fair, balanced and understandable [set out on page 43];
the board’s confirmation that it has carried out a robust assessment of the emerging and principal risks [set out on page 45];
the section of the annual report that describes the review of effectiveness of risk management and internal control systems [set
out on page 47]; and
the section describing the work of the audit committee [set out on page 46].
•
•
•
•
•
ANNUAL REPORT AND ACCOUNTS 2022
81
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Independent Auditor’s Report to the Members of GlobalData Plc
14. MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION
14.1. Adequacy of explanations received and accounting records
Under the Companies Act 2006 we are required to report to you if, in our opinion:
• we have not received all the information and explanations we require for our audit; or
• 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.
•
We have nothing to report in respect of these matters.
14.2. Directors’ remuneration
Under the Companies Act 2006 we are also required to report if in our opinion certain disclosures of directors’ remuneration have not been made.
We have nothing to report in respect of this matter.
15. 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.
Jon Young FCA (Senior statutory auditor)
For and on behalf of Deloitte LLP
Statutory Auditor
London, United Kingdom
27 February 2023
82
ANNUAL REPORT AND ACCOUNTS 2022
Notes to the Consolidated Financial Statements
“Our scalable platform is ideally
positioned to integrate new
datasets and content into our
existing vertical offering or
expand our breadth into
new vertical markets.”
Mike Danson, Chief Executive
ANNUAL REPORT AND ACCOUNTS 2022
83
Consolidated Income Statement
Continuing operations
Revenue
Operating expenses
Losses on trade receivables
Other income
Operating profit
Net finance costs
Profit before tax
Income tax expense
Profit for the year
Attributable to:
Equity holders of the parent
Earnings per share attributable to equity holders:
Basic earnings per share (pence)
Diluted earnings per share (pence)
Reconciliation to Adjusted EBITDA1:
Operating profit
Depreciation
Amortisation of software
Adjusting items
Adjusted EBITDA1
The accompanying notes form an integral part of these financial statements.
Notes
Year ended 31
December 2022
Year ended 31
December 2021
5
6
6
10
11
12
12
7
£m
243.2
(186.6)
(0.7)
0.1
56.0
(17.6)
38.4
(7.9)
30.5
30.5
27.1
26.2
56.0
6.4
1.0
23.0
86.4
£m
189.3
(150.8)
(1.2)
0.9
38.2
(5.6)
32.6
(7.7)
24.9
24.9
21.9
20.2
38.2
6.8
0.9
18.5
64.4
1 We define Adjusted EBITDA as EBITDA adjusted to exclude costs associated with acquisitions, restructuring of the Group, share-based
payments, impairment, unrealised operating exchange rate movements and the impact of foreign exchange contracts. We present
Adjusted EBITDA as additional information because it is used internally as a key indicator to assess financial performance. 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. Adjusted EBITDA margin is defined
as: Adjusted EBITDA as a percentage of revenue.
84
ANNUAL REPORT AND ACCOUNTS 2022
Consolidated Statement of Comprehensive Income
Profit for the year
Other comprehensive income
Items that will be classified subsequently to profit or loss when
specific conditions are met:
Cash flow hedge – effective portion of changes in fair value
Net exchange loss on translation of foreign entities
Other comprehensive loss, net of tax
Total comprehensive income for the year
Attributable to:
Equity holders of the parent
The accompanying notes form an integral part of these financial statements.
Notes
Year ended 31
December 2022
£m
Year ended 31
December 2021
£m
30.5
24.9
16
24
(3.9)
(0.4)
(4.3)
26.2
-
(0.5)
(0.5)
24.4
26.2
24.4
ANNUAL REPORT AND ACCOUNTS 2022
85
Consolidated Statement of Financial Position
Notes
31 December 2022
31 December 2021
Non-current assets
Property, plant and equipment
Intangible assets
Net investment in sub lease
Deferred tax assets
Current assets
Trade and other receivables
Current tax receivable
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
Net current liabilities
Non-current liabilities
Long-term provisions
Deferred tax liabilities
Long-term derivative liabilities
Long-term lease liabilities
Long-term borrowings
Total liabilities
Net assets
Equity
Share capital
Treasury reserve
Other reserve
Cash flow hedge reserve
Foreign currency translation reserve
Retained profit
Equity attributable to equity holders of the parent
14
13
18
17
16
19
20
15
16
23
23
18
16
15
20
24
24
24
24
24
£m
31.0
380.1
-
2.3
413.4
62.7
0.6
0.9
34.0
98.2
511.6
£m
35.3
347.7
0.1
2.1
385.2
51.2
-
0.6
22.6
74.4
459.6
(137.3)
(114.3)
-
(5.4)
(1.7)
(1.3)
(0.1)
(145.8)
(47.6)
(1.3)
(4.1)
(3.9)
(24.6)
(283.6)
(317.5)
(463.3)
48.3
0.2
(70.8)
(44.3)
(3.9)
(0.7)
167.8
48.3
(5.0)
(4.1)
(4.2)
(0.3)
(0.1)
(128.0)
(53.6)
(0.7)
-
(0.1)
(29.3)
(195.2)
(225.3)
(353.3)
106.3
0.2
(66.6)
(44.3)
-
(0.3)
217.3
106.3
These financial statements were approved by the Board of Directors on 27 February 2023 and signed on its behalf by:
Murray Legg
Chairman
Company number 03925319.
Mike Danson
Chief Executive
The accompanying notes form an integral part of these financial statements.
86
ANNUAL REPORT AND ACCOUNTS 2022
Consolidated Statement of Changes in Equity
l
a
t
i
p
a
c
e
r
a
h
S
£m
0.2
-
-
-
-
-
-
171.0
s
e
t
o
N
24
24
25
24
Balance at 1 January 2021
Profit for the year
Other comprehensive income:
Net exchange loss on translation of
foreign entities
Total comprehensive income for
the year
Transactions with owners:
Share buy-back
Dividends
Vesting of share options
Bonus issue of shares
i
m
u
m
e
r
p
e
r
a
h
S
t
n
u
o
c
c
a
£m
0.7
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
£m
£m
£m
(21.4)
(37.1)
163.8
-
-
-
(46.5)
-
1.3
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(7.2)
(163.8)
-
-
-
Capital reduction
24 (171.0)
(0.7)
Share-based payments charge
Tax on share-based payments
Balance at 31 December 2021
Profit for the year
Other comprehensive income:
25
11
-
-
0.2
Cash flow hedge – effective portion
of changes in fair value
16
Net exchange loss on translation of
foreign entities
Total comprehensive income for
the year
Transactions with owners:
Share buy-back
Dividends
Vesting of share options
Share-based payments charge
Tax on share-based payments
24
24
25
25
11
Balance at 31 December 2022
0.2
-
-
-
-
-
-
-
-
-
(66.6)
(44.3)
-
-
-
-
(66.6)
-
62.4
-
-
-
-
-
-
-
-
-
-
-
(70.8)
(44.3)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
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
£m
0.2
-
(0.5)
(0.5)
-
-
-
-
-
-
-
(0.3)
-
-
e
g
d
e
h
w
o
fl
h
s
a
C
e
v
r
e
s
e
r
£m
-
-
-
-
-
-
-
-
-
-
-
-
-
(3.9)
(0.4)
-
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
£m
137.7
24.9
t
fi
o
r
p
d
e
n
a
t
e
R
i
£m
31.3
24.9
-
(0.5)
24.9
24.4
-
(20.4)
(1.3)
-
171.7
9.2
1.9
217.3
30.5
-
-
(46.5)
(20.4)
-
-
-
9.2
1.9
106.3
30.5
(3.9)
(0.4)
(0.4)
(3.9)
30.5
26.2
-
-
-
-
-
-
-
-
-
-
-
(23.6)
(62.4)
4.1
1.9
(66.6)
(23.6)
-
4.1
1.9
(0.7)
(3.9)
167.8
48.3
The accompanying notes form an integral part of these financial statements.
ANNUAL REPORT AND ACCOUNTS 2022
87
Consolidated Statement of Cash Flows
Cash flows from operating activities
Notes
Profit for the year
Adjustments for:
Depreciation
Amortisation
Gain on disposal of property, plant and equipment
Impairment of goodwill
Net finance costs
Taxation recognised in profit or loss
Share-based payments charge
Increase in trade and other receivables
Increase in trade and other payables
Revaluation of short- and long-term derivatives
Increase/(decrease) in provisions
Cash generated from operations
Interest paid
Income taxes paid
Total cash flows from operating activities
Cash flows from investing activities
Acquisitions
Cash received from repayment of loans
Proceeds from disposal of property, plant and equipment
Purchase of property, plant and equipment
Purchase of intangible assets
Total cash flows used in investing activities
Cash flows from financing activities
Repayment of borrowings
Settlement of loan
Proceeds from borrowings
Loan refinancing fee
Acquisition of own shares
Principal elements of lease payments
Dividends paid
Total cash flows (used in)/from financing activities
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 these financial statements.
14
13
14
13
10
11
25
22
22
16
23
27
28
14
14
13
20
20
20
20
24
20
24
Year ended
31 December 2022
Year ended
31 December 2021
£m
30.5
6.4
10.1
-
-
17.6
7.9
4.1
(9.2)
17.2
0.6
0.2
85.4
(14.0)
(9.5)
61.9
(33.6)
0.9
-
(1.0)
(1.7)
(35.4)
(2.5)
(229.2)
321.0
(8.0)
(66.6)
(5.9)
(23.6)
(14.8)
11.7
22.6
(0.3)
34.0
£m
24.9
6.8
6.5
(0.2)
0.4
5.6
7.7
9.2
(3.2)
2.2
0.9
(0.3)
60.5
(3.4)
(5.1)
52.0
(97.7)
0.9
0.6
(0.8)
(0.5)
(97.5)
(5.0)
-
129.0
(0.4)
(46.5)
(5.8)
(20.4)
50.9
5.4
17.7
(0.5)
22.6
88
ANNUAL REPORT AND ACCOUNTS 2022
Notes to the Consolidated Financial Statements
1. GENERAL INFORMATION
Nature of operations
The principal activity of GlobalData Plc and its subsidiaries (together ‘the Group’) is to provide business information in the form of high
quality proprietary data, analytics and insights to clients in multiple sectors.
GlobalData Plc (‘the Company’) is a company incorporated in the United Kingdom (England & Wales) and listed on the Alternative Investment
Market (AIM), therefore is publicly owned and limited by shares. 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 United Kingdom adopted international accounting standards and with
International Financial Reporting Standards as issued by the IASB.
The financial statements have been prepared on the historical cost basis, except for derivative financial instruments, which are measured
at fair value. These financial statements have been prepared in accordance with the accounting policies detailed below. The accounting
policies have been applied consistently throughout the Group and throughout the year.
These financial statements are presented in Pounds Sterling (£), which is also the functional currency of the Company. These financial
statements have been approved for issue by the Board of Directors.
Critical accounting estimates and judgements
The Group makes estimates and assumptions regarding the future. Estimates and judgements are continually evaluated based on historical
experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
In the future, actual experience may deviate from these estimates and assumptions. The estimates and assumptions that have a significant
risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed in detail
below. Climate-related risks did not have a material impact on the financial statements.
Key sources of estimation uncertainty
Carrying value of goodwill and other intangibles
The carrying value of goodwill and other intangibles is assessed annually to ensure that there is no impairment of these assets. Performing
this assessment requires management to estimate future cash flows to be generated by the related cash-generating unit (CGU), 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, including quantitative base assumptions information.
Management has undertaken sensitivity analysis, taking into consideration the impact of 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:
Cash-generating unit
Data, Analytics and Insights
LMC
Media Business Insights (“MBI”)
TS Lombard
*percentage points
Revenue growth
falls by*
Discount rate
rises by*
(17.0%)
(2.9%)
(2.4%)
(1.8%)
36.8%
2.0%
3.7%
2.1%
No indication of impairment was noted from Management’s review; there is headroom in each CGU. Management acknowledges the
sensitivity of the revenue growth and discount rate assumptions applied to the LMC, MBI and TS Lombard CGUs; however, Management
is comfortable with these assumptions and will continue to monitor performance regularly for any indicators of future impairment loss.
Management recognises that the 2% cost growth assumption is lower than the current rate of inflation; however, the Group operates a
focused approach to cost management, including mitigating the impact of inflation through advancements in technology and efficiency
savings and has a strong track record of achieving this. Therefore, Management considers the assumption to be reasonable.
ANNUAL REPORT AND ACCOUNTS 2022
89
Notes to the Consolidated Financial Statements
Critical accounting judgements
Identification of Cash-Generating Units
IAS36 ‘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. As at the date of the impairment review (30 September 2022), Management
made the judgement that the Group had four CGUs, being Data, Analytics and Insights, LMC, MBI and TS Lombard. In previous years, the
Group had identified MEED (a subsidiary based in the United Arab Emirates) as an individual CGU; however, during the course of 2022 and
prior to the date of the impairment review, the MEED cash inflows were fully integrated into the Data, Analytics and Insights CGU. In making
this judgement Management has determined that the assets acquired as part of the original acquisition of MEED are no longer generating
cash flows that are separately identifiable. The cash flows, in addition to being generated by the acquired assets of MEED, are also now
being generated from the assets acquired across many of the Group’s historic acquisitions. Likewise, the Data, Analytics and Insights cash
inflows are also now being generated in part by the MEED assets. Management therefore concluded that this level of consolidation and
integration does not make it possible for MEED to meet the definition of a separately identifiable CGU as required by IAS36. Full disclosure
is provided in note 13.
Going concern
The Group meets its day-to-day working capital requirements through free cash flow. The Group has closing cash of £34.0m as at 31
December 2022 and net bank debt of £249.6m (31 December 2021: net bank debt of £177.6m), being cash and cash equivalents less
short and long-term borrowings, excluding lease liabilities. The Group has an outstanding term loan of £290.0m which is syndicated with
12 lenders. As at 31 December 2022, the Group had undrawn RCF of £120.0m which is syndicated with 13 lenders. The Group’s banking
facilities are in place until August 2025, at which point the Group will be required to renew or extend its financing arrangements. The Group
has generated £85.4m in cash from operations during 2022. 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 2022. Management has reviewed forecast 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. The Directors have modelled a number of worst-case scenarios to consider their potential
impact on the Group’s results, cash flow and loan covenant forecast. Key assumptions built into the scenarios focus on revenue and cost
growth. In addition to performing scenario planning, the Directors have also conducted stress testing of the Group’s forecasts and, taking
into account reasonable downside sensitivities (acknowledging that such risks and uncertainties exist), the Directors are satisfied that
the business is expected to operate within its facilities. The plausible downside scenarios modelled were as follows: (i) revenue growth in
2023 being 10% lower than expectation (ii) cost growth in line with the current UK rate of inflation and (iii) both scenarios combined. There
remains headroom on the covenants under each scenario and cash remained in excess of the 31 December 2022 balance of £34.0m in all
months.
Through our normal business practices, we are in regular communication with our lenders and are satisfied they will be in a position to
continue supporting us for the foreseeable future.
The Directors therefore consider the strong balance sheet, with good cash reserves and working capital along with financing arrangements,
provide ample liquidity. Accordingly, the Directors have prepared the financial statements on a going concern basis.
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ANNUAL REPORT AND ACCOUNTS 2022
Notes to the Consolidated Financial Statements
2. ACCOUNTING POLICIES
a) Basis of consolidation
The consolidated financial statements include the accounts of the Company and all of its subsidiary undertakings.
• Subsidiaries are those entities controlled by the Group. Control exists when the Group is exposed, or has rights, to variable returns
from its involvement with the investee and has the ability to affect those returns through its power over the investee. The financial
statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date
that control ceases.
Intra-group transactions, balances and unrealised gains on transactions between Group companies are eliminated. Where necessary,
accounting policies of subsidiaries have been changed to ensure consistency with the Group’s accounting policies.
•
• The results and cash flows relating to a business are included in the consolidated income statement and the consolidated statement of
cash flows from the date of acquisition or are excluded from the date of disposal as appropriate.
b) 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. Contingent consideration which has been determined to be a remuneration cost is expensed to the income statement.
c) 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/credit
notes.
• Subscription income for online services, data and analytics is normally invoiced at the beginning of the services and is therefore
recognised as a contract liability, “deferred revenue”, in 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 is 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.
•
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.
Where amounts have been invoiced in advance of services performed and the amounts are due, this is included within deferred 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.
d) Property, plant and equipment
Property, plant and equipment is stated at historic cost, including any directly attributable costs of bringing the asset to the location
and condition necessary for it to be capable of operating in the manner intended by management, 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:
• Right-of-use assets: shorter of lease term and useful life;
• Freehold buildings: over 50 years;
• Fixtures, fittings and equipment: over 3 to 5 years; and
• Leasehold improvements: over 3 to 10 years.
The useful life, the residual value and the depreciation method are reassessed at each reporting date.
ANNUAL REPORT AND ACCOUNTS 2022
91
Notes to the Consolidated Financial Statements
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.
e) 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 forecasts; year one being based upon Board approved budgets, with growth assumptions
applied for years two to five. 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 and databases. Intangible
assets acquired in material business combinations are capitalised at their fair value. The Board has a policy of engaging professional
advisers 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 when determining the fair value at the date of acquisition for each class of identified
intangible:
• Customer relationships: net present value of future cash flows;
•
• Brands: royalty relief method.
Intangible assets are amortised on a straight-line basis over their estimated useful lives of 3 to 20 years for brands, customer relationships
and IP rights. Amortisation and impairment charges are accounted for within the administrative costs category within the income
statement. Within note 7, the Group separates out amortisation of acquired intangibles from other group amortisation charges.
Intellectual property and databases: cost to recreate the asset; and
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 IAS38 “Intangible Assets”. These costs are
amortised on a straight-line basis over their estimated useful lives of 3 years. Amortisation and impairment charges are accounted for
within the administrative costs category within the income statement. Costs associated with implementing or maintaining computer
software programs are recognised as an expense.
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).
f) 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.
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ANNUAL REPORT AND ACCOUNTS 2022
Notes to the Consolidated Financial Statements
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. Specifically, and in line with the application of IAS12 to share-based payments, tax deductions (current or deferred) up to the
IFRS2 cumulative remuneration expense are recognised in the income statement as the tax is viewed as linked to the remuneration event.
However, tax deductions (current or deferred) in excess of the IFRS2 cumulative remuneration expense are recognised in equity as the tax
is viewed as linked to an equity item.
g) 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 the functional currency of the entity 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.
For the purpose of presenting consolidated financial statements, the assets and liabilities of entities with a functional currency other than
Sterling are retranslated to 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.
Such translation differences are recognised in the income statement in the period in which a foreign operation is disposed of.
h) Pensions
The Group contributes to defined contribution pension schemes. Contributions to these schemes are charged to the income statement as
incurred.
i) 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.
j) Leases
The Group leases offices around the world, plus a small number of motor vehicles. 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.
For any new contracts entered into, 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; and
• 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.
ANNUAL REPORT AND ACCOUNTS 2022
93
Notes to the Consolidated Financial Statements
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.
k) Financial instruments
The Group has derivative and non-derivative financial instruments which comprise foreign currency contracts, interest rate swaps,
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 IFRS15, 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 at 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; and
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, 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. 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 interest rates and foreign currency exchange
rates.
Interest rate swaps are measured at fair values and any movement in fair value is recognised directly in other comprehensive income, to the
extent that they are effective, with the ineffective portion being recognised in the income statement.
In order to qualify for hedge accounting, the Group is required to document prospectively the economic relationship between the item
being hedged and the hedging instrument. The Group is also required to demonstrate an assessment of the economic relationship between
the hedged item and the hedging instrument, which shows that the hedge will be highly effective on an ongoing basis. This effectiveness
testing is re-performed periodically to ensure that the hedge has remained, and is expected to remain, highly effective. Hedge accounting
is discontinued when a hedging instrument is derecognised (e.g. through expiry or disposal), or no longer qualifies for hedge accounting.
Foreign currency forward contract derivatives are measured at fair values and any movement in fair value is recognised in the income
statement.
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ANNUAL REPORT AND ACCOUNTS 2022
Notes to the Consolidated Financial Statements
Impairment of trade receivables
The Group recognises lifetime expected credit losses (ECL) for trade receivables. The ECLs on these financial assets are estimated using
a provision matrix based on the Group’s historical credit loss experience, adjusted for factors that are specific to the receivables, general
economic conditions and an assessment of both the current as well as the forecast direction of conditions at the reporting date. The
carrying amount is reduced by the ECL through the use of a provision account. When a trade receivable is considered uncollectable, 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 consolidated income statement.
Trade and other payables
Trade and other payables are initially measured at fair value, and are subsequently measured at amortised cost, using the effective interest
method.
l) Borrowings and borrowing costs
Borrowings are recognised initially at fair value, net of transaction costs incurred, and subsequently at amortised cost. Any difference
between the proceeds (net of transaction costs) and the redemption value is recognised in the income statement over the period of the
borrowings using the effective interest method.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12
months from the reporting date.
Borrowing costs, being interest, and other costs incurred in connection with the servicing of borrowings, are recognised as an expense
when incurred.
m) Share-based payments
The Group operates 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 both Schemes 2 and 4), 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.
n) 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.
o) 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.
p) 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 is shown as a deduction in arriving at total shareholders’ equity.
q) Other income
Other income represents rental income on sub-lease property contracts and research & development tax credits.
r) Presentation of non-statutory alternative performance measures
The Directors believe that Adjusted EBITDA, Adjusted EBITDA margin, Adjusted profit before tax, Adjusted profit after tax and Adjusted
earnings per share provide additional useful information on the core operational performance of the Group to shareholders, and we review
the results of the Group using these measures internally. The term ‘adjusted’ is not a defined term under IFRS and may not therefore be
comparable with similarly titled profit measures reported by other companies. It is not intended to be a substitute for, or superior to, IFRS
measures of profit.
ANNUAL REPORT AND ACCOUNTS 2022
95
Notes to the Consolidated Financial Statements
Adjustments are made in respect of:
Share-based payments and associated
costs
Restructuring, M&A (including contingent
consideration) and refinancing costs
Amortisation and impairment of acquired
intangible assets
Revaluation of short- and long-term
derivatives
Unrealised operating foreign exchange
gain/loss
Share-based payment expenses are excluded from Adjusted EBITDA as they are a
non-cash charge, the awards are equity-settled and the Directors believe they result
in a level of charge that would distort the user’s view of the core trading performance
of the Group.
The Group excludes these costs from Adjusted EBITDA where the nature of the item,
or its size, is not related to the core underlying trading of the Group. This is to assist
the user of the financial statements to better understand the results of the core
operations of the Group and allow comparability of underlying results.
The amortisation charge for those intangible assets recognised on business
combinations is excluded from Adjusted EBITDA since they are non-cash charges
arising from historical investment activities. Any impairment charges recognised in
relation to these intangible assets are also excluded from Adjusted EBITDA. This is
a common adjustment made by acquisitive information service businesses and is
therefore consistent with peers.
Gains and losses are recognised within Adjusted EBITDA when they are realised in
cash terms and therefore we exclude non-cash movements arising from fluctuations
in exchange rate as these may not reflect the underlying performance of the Group,
which better aligns Adjusted EBITDA with the cash performance of the business.
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
2022 and is consistent with the policies applied in the previous year, except for the following new standards. The new standards which are
effective during the year (and have had a minimal impact on the financial statements) are:
• Amendments to IAS16: Property, Plant and Equipment (effective for periods beginning on or after 1 January 2022);
• Amendments to IAS37: Provisions, Contingent Liabilities and Contingent Assets (effective for periods beginning on or after 1 January
2022); and
• Amendments to IFRS3: Business Combinations (effective for periods beginning on or after 1 January 2022).
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 IAS1: Presentation of Financial Statements (effective for periods beginning on or after 1 January 2023);
• Amendments to IAS8: Accounting Policies, Changes in Accounting Estimates and Errors (effective for periods beginning on or after 1
January 2023); and
• Amendments to IAS12: Income Taxes (effective for periods beginning on or after 1 January 2023).
The above standards are not yet 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 revised standards.
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ANNUAL REPORT AND ACCOUNTS 2022
Notes to the Consolidated Financial Statements
4. SEGMENTAL ANALYSIS
The principal activity of GlobalData Plc and its subsidiaries (together ‘the Group’) is to provide business information in the form of high
quality proprietary data, analytics and insights to clients in multiple sectors.
IFRS8 “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 Chief Executive as its chief operating decision maker.
The Group maintains a centralised operating model and single product platform (One Platform), which is underpinned by a common
taxonomy, shared development resource, and new data science technologies. The fundamental principle of the GlobalData business model
is to provide our clients with subscription access to our proprietary data, analytics, and insights platform, with the offering of ancillary
services such as consulting, single copy reports and events. The vast majority of data sold by the Group is produced by a central research
team which produces data for the Group as a whole. The central research team reports to one central individual, the Managing Director of
the India operation, who reports to the Group Chief Executive. ‘Data, Analytics and Insights’ is therefore considered to be the operating
segment of the Group.
The Group profit or loss is reported to the Chief Executive on a monthly basis and consists of earnings before interest, tax, depreciation,
amortisation, central overheads and other adjusting items. The Chief Executive also monitors revenue within the operating segment.
The Group considers the use of a single operating segment to be appropriate due to:
• The Chief Executive reviewing profit or loss at the Group level;
• Utilising a centralised operating model;
• Being an integrated solutions based business, rather than a portfolio business; and
• The M&A strategy of the Group being to fully integrate within the One Platform.
A reconciliation of Adjusted EBITDA to profit before tax from continuing operations is set out below:
Adjusted EBITDA
Restructuring costs
M&A costs
Contingent consideration
Refinancing costs
Share-based payment charge
Costs relating to share-based payment schemes
Revaluation loss on short and long-term derivatives
Unrealised operating foreign exchange (losses)/gains
Amortisation of acquired intangibles
Depreciation
Amortisation (excluding amortisation of acquired intangible assets)
Finance costs
Profit before tax
Year ended
31 December 2022
£m
86.4
Year ended
31 December 2021
£m
64.4
(0.6)
(2.9)
(1.0)
(1.9)
(4.1)
(0.9)
(0.6)
(1.9)
(9.1)
(6.4)
(1.0)
(17.6)
38.4
(1.2)
(2.4)
-
(0.2)
(9.2)
-
(0.9)
1.0
(5.6)
(6.8)
(0.9)
(5.6)
32.6
ANNUAL REPORT AND ACCOUNTS 2022
97
Notes 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 customers rather than the team structure
the Group is organised by.
From continuing operations
Year ended 31 December 2022
Revenue from external customers
Year ended 31 December 2021
Revenue from external customers
UK
£m
36.0
UK
£m
27.8
Europe
Americas1
Asia Pacific
MENA2
Rest of World
£m
64.7
£m
91.4
£m
27.2
£m
16.6
£m
7.3
Europe
Americas1
Asia Pacific
MENA2
Rest of World
£m
51.8
£m
67.8
£m
21.0
£m
13.9
£m
7.0
Total
£m
243.2
Total
£m
189.3
1. Americas includes revenue from the United States of America of £86.7m (2021: £65.7m)
2. Middle East & North Africa
Intangible assets held in the US and Canada were £33.4m (2021: £34.3m), of which £29.1m related to goodwill (2021: £29.1m). Intangible
assets held in the UAE were £12.8m (2021: £13.6m) of which £11.4m related to goodwill (2021: £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.
5. REVENUE
The Group generates revenue from services provided over a period of time such as recurring subscriptions 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 invoiced at the beginning of the services and
is therefore recognised as a contract liability, “deferred revenue”, in 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 are recognised within deferred 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
Deferred Revenue recognised within the
Consolidated Statement of Financial
Position
Year ended 31
December 2022
Year ended 31
December 2021
As at 31
December 2022
As at 31
December 2021
£m
196.5
46.7
243.2
£m
156.9
32.4
189.3
£m
91.6
12.4
104.0
£m
73.1
8.3
81.4
Services transferred:
Over a period of time
At a point in time
Total
As subscriptions are typically for periods of 12 months the majority of deferred revenue held at 31 December will be recognised in the
income statement in the following year. As at 31 December 2022, £1.1m (2021: £0.4m) of the deferred revenue balance will be recognised
beyond the next 12 months. In the year ended 31 December 2022 the Group recognised revenue of £81.0m (2021: £74.1m) that was included
in the deferred revenue balance at the beginning of the period.
98
ANNUAL REPORT AND ACCOUNTS 2022
Notes to the Consolidated Financial Statements
As at 31 December 2022, the total non-cancellable obligations within deferred revenue to fulfil revenue amounted to £104.0m (2021:
£81.4m). As at the same date, the total non-cancellable obligations within Invoiced Forward Revenue to fulfil revenue amounted to £133.5m
(2021: £107.7m).
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.
6. OPERATING PROFIT
Operating profit is stated after the following expenses relating to continuing operations:
Cost of sales
Administrative costs
Losses on trade receivables
Total operating expenses
Included within other administrative costs are the following expenses:
Depreciation of property, plant and equipment
Amortisation of intangible assets
Loss/(gain) (including realised and unrealised) on foreign exchange
Auditor’s remuneration
Auditor’s remuneration:
Audit of the Company's and the consolidated financial statements
Audit of the subsidiary companies' financial statements
Total auditor’s remuneration
Year ended
31 December 2022
Year ended
31 December 2021
£m
125.7
60.9
186.6
0.7
187.3
£m
101.8
49.0
150.8
1.2
152.0
Year ended 31
December 2022
Year ended 31
December 2021
£m
6.4
10.1
2.7
1.0
£m
6.8
6.5
(0.9)
0.9
Year ended 31
December 2022
Year ended 31
December 2021
£m
0.5
0.5
1.0
£m
0.4
0.5
0.9
ANNUAL REPORT AND ACCOUNTS 2022
99
Notes to the Consolidated Financial Statements
7. ADJUSTING ITEMS
Amortisation of acquired intangibles
Share-based payment charge
M&A costs
Refinancing costs
Unrealised operating foreign exchange loss/(gain)
Contingent consideration
Costs relating to share-based payments scheme
Restructuring costs
Revaluation loss on short and long-term derivatives
Total adjusting items
The adjustments made are as follows:
Year ended 31
December 2022
Year ended 31
December 2021
£m
9.1
4.1
2.9
1.9
1.9
1.0
0.9
0.6
0.6
23.0
£m
5.6
9.2
2.4
0.2
(1.0)
-
-
1.2
0.9
18.5
• The share-based payments charge is in relation to the share-based compensation plans (detailed in note 25) 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. The original fair value on grant date is charged to
the income statement based upon the Monte-Carlo method. Following modification on 30 November 2022, an additional charge for the
beneficial modification was determined by the Black-Scholes method (more detail is contained within note 25).
• The M&A costs consist of professional fees incurred in both performing due diligence relating to potential acquisition targets and
performing completion activities in relation to acquisitions made during the year in addition to redundancy costs in relation to group
integration projects.
• Refinancing costs consist of legal fees incurred in relation to (i) the extension of the previously held term loan and RCF by one year
(completed during June 2022) and (ii) the arrangement of the new loan facility which was drawn down upon during August 2022.
• Unrealised operating foreign exchange losses and gains relate to non-cash exchange losses and gains made on operating items.
• The contingent consideration amounts relate to payments due to the previous owners of MBI and TS Lombard between 2023 and 2025.
These have been treated as remuneration costs due to their being contingent upon the former owners remaining as employees of the
Group at the time of payment.
• Costs relating to share-based payments scheme consist of employer taxes borne as a result of the vesting of the final tranche of
Scheme 1 during the year, and professional fees incurred in advice obtained relating to the restructure of existing schemes.
• Restructuring relates to professional fees incurred in relation to group reorganisation projects.
• 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.
100
ANNUAL REPORT AND ACCOUNTS 2022
Notes to the Consolidated Financial Statements
8. PARTICULARS OF EMPLOYEES
Employee benefit expense
Wages and salaries
Social security costs
Pension costs
Share-based payments charge (note 25)
Year ended 31
December 2022
Year ended 31
December 2021
£m
115.4
8.2
2.1
4.1
129.8
£m
95.9
6.7
1.7
9.2
113.5
Termination costs incurred during the year amounted to £0.2m (2021: £0.3m).
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
There were no persons employed by the Company during the year (2021: nil).
9. KEY MANAGEMENT COMPENSATION
Year ended 31
December 2022
Year ended 31
December 2021
No.
3,004
718
3,722
No.
2,914
676
3,590
Key management is defined as Directors plus all members of the Group’s Senior Management Team. In the year ended 31 December 2022,
key management consisted of 24 employees (2021: 19 employees).
Short-term employee benefits
Post-employment benefits
Share-based payments
Year ended 31
December 2022
Year ended 31
December 2021
£m
4.9
0.1
2.2
7.2
£m
3.1
0.1
2.4
5.6
Post-employment benefits are comprised of payments made into the employees’ defined contribution pension schemes.
Information regarding Directors’ remuneration, share options and bonuses are set out in the Directors’ Remuneration Report on pages 59
to 69.
The increase in key management compensation for the year ended 31 December 2022 reflects a restructuring of the management team,
previously referred to as the Executive Management Committee, to a larger Senior Leadership Team.
ANNUAL REPORT AND ACCOUNTS 2022
101
Notes to the Consolidated Financial Statements
10. NET FINANCE COSTS
Loan interest cost
Lease interest cost
Other interest cost
Other interest income
11. INCOME TAX
Income statement
Current income tax:
Current income tax
Adjustments in respect of prior years
Deferred income tax:
Relating to origination and reversal of temporary differences
Effect of change in tax rates
Adjustments in respect of deferred tax of previous years
Movement in unrecognised deferred tax
Total income tax expense in income statement
Recognised in statement of changes in equity
Corporation tax income on share options exercised
Deferred tax (expense)/income on share-based payments
Total tax income recognised directly in equity
Year ended 31
December 2022
Year ended 31
December 2021
£m
16.4
1.3
0.1
(0.2)
17.6
£m
4.0
1.5
0.1
-
5.6
Year ended 31
December 2022
Year ended 31
December 2021
£m
£m
(10.6)
(0.3)
(10.9)
0.9
1.3
1.1
(0.3)
3.0
(7.9)
(10.7)
0.6
(10.1)
2.4
(0.6)
-
0.6
2.4
(7.7)
Year ended 31
December 2022
Year ended 31
December 2021
£m
4.4
(2.5)
1.9
£m
0.4
1.5
1.9
Included within ‘Adjustments in respect of deferred tax of previous years’ is a deferred tax income amount totalling £1.4m relating to options
held by US participants of the Group’s share option schemes. Following the Scheme 1 vesting event during August 2022, additional tax
analysis was undertaken in conjunction with professional advisers, and it was determined that the Group should benefit from a current tax
deduction in the US at the time US participants exercise their options. A prior year adjustment has therefore been included, through both
the income statement (£1.4m tax income) and equity (£2.1m tax income), to recognise a deferred tax asset in accordance with international
accounting standards with respect to US options outstanding as at 31 December 2021. Most of the deferred tax asset to which the prior
year adjustment relates is subsequently reversed during the year ended 31 December 2022, through both the income statement (£1.4m)
and equity (£1.8m), to match the current tax deduction claimed during the period.
102
ANNUAL REPORT AND ACCOUNTS 2022
Notes to the Consolidated Financial Statements
The tax charge is reconciled to the standard corporation tax rate applicable in the UK as follows:
Profit before tax
Tax at the UK corporation tax rate of 19% (2021: 19%)
Effects of:
Non-taxable income for tax purposes
Non-deductible expenses for tax purposes
Effect of tax rates in overseas jurisdictions
Overseas tax
Effect of change in tax rates
Adjustments in respect of current income tax of previous years
Movement in unrecognised deferred tax
Year ended 31
December 2022
Year ended 31
December 2021
£m
38.4
(7.3)
0.2
(1.3)
(1.3)
-
1.3
0.8
(0.3)
(7.9)
£m
32.6
(6.2)
0.2
(1.0)
(1.0)
(0.3)
(0.6)
0.6
0.6
(7.7)
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 period. The Group also has a share options scheme in place and
therefore the Group has calculated the dilutive effect of these options.
Earnings per share attributable to equity holders from continuing operations:
Basic
Profit for the period attributable to ordinary shareholders of the parent company (£m)
Weighted average number of shares (no’ m)
Basic earnings per share (pence)
Diluted
Profit for the period attributable to ordinary shareholders of the parent company (£m)
Weighted average number of shares (no’ m)
Diluted earnings per share (pence)
Year ended 31
December 2022
Year ended 31
December 2021
30.5
112.7
27.1
30.5
116.6
26.2
24.9
113.5
21.9
24.9
123.0
20.2
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 period, net of shares not paid up
Diluted weighted average number of shares
Year ended 31
December 2022
No’ m
Year ended 31
December 2021
No’ m
112.7
3.9
116.6
113.5
9.5
123.0
ANNUAL REPORT AND ACCOUNTS 2022
103
Notes to the Consolidated Financial Statements
13. INTANGIBLE ASSETS
Cost
As at 1 January 2021
Additions: Business combinations
Additions: Separately acquired
Reclassification to PPE
Fair value adjustment
As at 31 December 2021
Additions: Business combinations
Additions: Separately acquired
Fair value adjustment
As at 31 December 2022
Amortisation
As at 1 January 2021
Additions: Business combinations
Impairment
Charge for the year
Reclassification to PPE
As at 31 December 2021
Additions: Business combinations
Charge for the year
As at 31 December 2022
Net book value
As at 31 December 2022
As at 31 December 2021
Software
Customer
relationships
Brands IP rights and
database
Goodwill
Total
£m
12.2
0.7
0.4
(0.5)
-
12.8
0.9
1.7
-
15.4
(9.9)
(0.5)
-
(0.9)
0.3
(11.0)
(0.8)
(1.1)
(12.9)
2.5
1.8
£m
44.0
11.8
-
-
-
55.8
9.5
-
-
£m
16.1
0.1
-
-
-
16.2
10.0
-
-
£m
50.2
25.2
0.1
-
-
75.5
2.4
-
-
£m
£m
227.7
75.4
-
-
(0.4)
302.7
19.2
-
0.1
350.2
113.2
0.5
(0.5)
(0.4)
463.0
42.0
1.7
0.1
65.3
26.2
77.9
322.0
506.8
(28.8)
(10.7)
(48.3)
-
-
(3.8)
-
(32.6)
-
(5.2)
(37.8)
27.5
23.2
-
-
(0.6)
-
(11.3)
-
(0.9)
(12.2)
14.0
4.9
-
-
(1.2)
-
(49.5)
(0.5)
(2.9)
(52.9)
25.0
26.0
(10.5)
-
(0.4)
-
-
(10.9)
-
-
(10.9)
311.1
291.8
(108.2)
(0.5)
(0.4)
(6.5)
0.3
(115.3)
(1.3)
(10.1)
(126.7)
380.1
347.7
Additions as a result of business combinations in the year have been disclosed in further detail in note 27. The £0.5m cost and £0.3m
amortisation reclassification to PPE in the prior year relates to items previously categorised as software, however on further review during
2021 Management identified that they relate to IT hardware and as such have reclassified the balances (see note 14).
The Group has capitalised £1.5m of internally generated intangible assets (2021: £0.4m). As at 31 December 2022, the net book value of
internally generated intangible assets is £1.9m (2021: £0.4m).
104
ANNUAL REPORT AND ACCOUNTS 2022
Notes to the Consolidated Financial Statements
As at 31 December 2022, 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
period
3 years
2 years
6 years
2-8 years
<1 year
11 years
-
5 years
9 years
1-11 years
5-10 years
10-13 years
£m
0.7
1.4
0.5
4.6
0.4
0.1
-
0.3
3.8
6.6
5.2
3.9
27.5
£m
period
£m
period
-
-
-
-
3.0
-
1.2
-
-
0.1
9.1
0.6
14.0
-
-
-
-
8 years
-
5 years
-
-
1 year
20 years
20 years
-
-
-
-
-
-
-
0.6
9.0
13.6
0.4
1.4
25.0
-
-
-
-
-
-
-
3 years
10 years
9 years
5 years
5 years
Infinata
MEED
AROQ
Research Views
GlobalData
Global Ad Source
Verdict
Progressive Content
Life Sciences
LMC
MBI
TS Lombard
Total carrying value
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 and intangible assets as at 30 September each year 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 the next financial year’s budget with growth rates applied
to generate a five-year forecast. 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 IAS36, Impairment
of Assets, the Group has to consider impairment indicators for goodwill and intangible assets on the value of the CGUs. A CGU is defined
as the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets
or groups of assets. Management is of the opinion that since acquisition and through being integrated and further developed within the
Group, the acquired intangible assets of the Group all contribute to generating cash inflows for the wider business, covering all subject
matter areas. All subject matters are accessible through the single operating platform (One Platform), and all products include access to
a thin layer of information spanning across all markets and subjects. This represents the Group’s main CGU, named ‘Data, Analytics and
Insights’. The most recent acquisitions made by the Group (LMC, MBI and TS Lombard) are yet to be integrated into the main CGU, therefore
as at the date of the impairment review (30 September 2022), the Group had four CGUs. Management recognises that this approach is
different to the conclusion reached regarding the segmental reporting rationale of the Group; however, this is appropriate because the IFRS
criteria for identifying segments and CGUs differ. Management has considered whether events should be classified as a separate CGU but
have concluded that this is a route to market with the same underlying Data, Analytics and Insights product. In previous years, the Group
had identified MEED (a subsidiary based in the United Arab Emirates) as an individual CGU; however, during the course of 2022 and prior
to the date of the impairment review, the MEED cash inflows were fully integrated into the Data, Analytics and Insights CGU. In making
this judgement Management has determined that the assets acquired as part of the original acquisition of MEED are no longer generating
cash flows that are separately identifiable. The cash flows, in addition to being generated by the acquired assets of MEED, are also now
being generated from the assets acquired across many of the Group’s historic acquisitions. Likewise, the Data, Analytics and Insights cash
inflows are also now being generated in part by the MEED assets. Management therefore concluded that this level of consolidation and
integration does not make it possible for MEED to meet the definition of a separately identifiable CGU as required by IAS36.
Overall, within the impairment review performed as at 30 September 2022, the Group had sufficient headroom on the carrying value of
goodwill and intangible assets, with the CGUs having the following headroom: Data, Analytics and Insights: £1,219.6m, LMC: £16.0m, MBI:
£8.2m and TS Lombard: £3.7m.
ANNUAL REPORT AND ACCOUNTS 2022
105
Notes to the Consolidated Financial Statements
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 budgets for 2023, with revenue and cost increases to cover
the period 2024-2027. Revenue growth rates applied from 2024 onwards are based on forecast five-year compounded annual growth rates
(CAGR) which are based upon Management’s expectation of performance over this period. These rates are comparable with or lower than
historic growth performance. Cost increases from 2024 onwards are based upon the Bank of England long-term inflation forecast.
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.
Across all CGUs, a terminal value calculation has been determined post 2027 using a growth rate of 2% in accordance with long-term
inflation forecasts.
The key assumptions are set out below:
Increase in revenue
(for years 1 to 5)
Increase in costs
(for years 1 to 5)
Pre-tax discount rate
Terminal growth rate
2022
2021
2022
2021
2022
2021
2022
2021
7.44%
7.00%
2.00%
2.00%
11.9%
8.52%
2.00%
2.00%
7.94%
5.19%
8.47%
-
-
-
2.00%
2.00%
2.00%
-
-
-
12.2%
15.1%
12.1%
-
-
-
2.00%
2.00%
2.00%
-
-
-
Data, Analytics
and Insights
LMC
MBI
TS Lombard
Management has undertaken sensitivity analysis taking into consideration the impact of 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:
Cash-generating unit
Data, Analytics and Insights
LMC
MBI
TS Lombard
*percentage points
Revenue growth
falls by*
Discount rate
rises by*
(17.0%)
(2.9%)
(2.4%)
(1.8%)
36.8%
2.0%
3.7%
2.1%
No indication of impairment was noted from Management’s review; there is headroom in each CGU. Management acknowledges the
sensitivity of the revenue growth and discount rate assumptions applied to the LMC, MBI and TS Lombard CGUs; however, Management
is comfortable with these assumptions and will continue to monitor performance regularly for any indicators of future impairment loss.
Management recognises that the 2% cost growth assumption is lower than the current rate of inflation; however, the Group operates a
focused approach to cost management, including mitigating the impact of inflation through advancements in technology and efficiency
savings and has a strong track record of achieving this. Therefore, Management considers the assumption to be reasonable.
Amortisation
Amortisation and impairment charges are accounted for within the administrative costs category within the income statement. Within note
7, the Group separates out amortisation of acquired intangibles from other group amortisation charges.
106
ANNUAL REPORT AND ACCOUNTS 2022
Notes to the Consolidated Financial Statements
14. PROPERTY, PLANT AND EQUIPMENT
Buildings Fixtures, fittings
& equipment
Leasehold
improvements
Cost
As at 1 January 2021
Additions: Business combinations
Additions: Separately acquired
Reclassification from intangibles
Disposals
As at 31 December 2021
Additions: Business combinations
Additions: Separately acquired
Foreign currency retranslation
Disposals
As at 31 December 2022
Depreciation
As at 1 January 2021
Additions: Business combinations
Charge for the year
Reclassification from intangibles
Disposals
As at 31 December 2021
Additions: Business combinations
Charge for the year
Foreign currency retranslation
Disposals
As at 31 December 2022
Net book value
As at 31 December 2022
As at 31 December 2021
£m
48.1
-
2.5
-
(7.4)
43.2
-
0.6
0.8
(0.4)
44.2
(9.0)
-
(5.0)
-
2.5
(11.5)
-
(4.7)
(0.4)
0.4
(16.2)
28.0
31.7
£m
10.6
0.5
0.7
0.5
(4.5)
7.8
0.3
0.7
0.1
(0.2)
8.7
(7.6)
(0.5)
(1.6)
(0.3)
4.5
(5.5)
(0.2)
(1.5)
(0.1)
0.2
(7.1)
1.6
2.3
£m
1.7
-
0.1
-
-
1.8
-
0.3
-
-
2.1
(0.3)
-
(0.2)
-
-
(0.5)
-
(0.2)
-
-
(0.7)
1.4
1.3
Total
£m
60.4
0.5
3.3
0.5
(11.9)
52.8
0.3
1.6
0.9
(0.6)
55.0
(16.9)
(0.5)
(6.8)
(0.3)
7.0
(17.5)
(0.2)
(6.4)
(0.5)
0.6
(24.0)
31.0
35.3
The £0.5m cost and £0.3m depreciation reclassification to PPE in the prior year relates to items previously categorised as software,
however on further review during 2021 Management identified that they relate to IT hardware and as such have reclassified the balances
(see note 14).
ANNUAL REPORT AND ACCOUNTS 2022
107
Notes to the Consolidated Financial Statements
Included in the net carrying amount of property, plant and equipment as at 31 December 2022 are right-of-use assets as follows:
Cost
As at 1 January 2022
Additions: Separately acquired
Foreign currency retranslation
Disposals
As at 31 December 2022
Depreciation
As at 1 January 2022
Charge for the year
Foreign currency retranslation
Disposals
As at 31 December 2022
Net book value
As at 31 December 2022
As at 31 December 2021
15. LEASES
Buildings
£m
43.2
0.6
0.8
(0.4)
44.2
(11.5)
(4.7)
(0.4)
0.4
(16.2)
28.0
31.7
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 in 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 2022
31 December 2021
£m
5.4
24.6
30.0
£m
4.1
29.3
33.4
The table below describes the nature of the Group’s leasing activities by type of right-of-use asset recognised in the statement of financial
position:
Office buildings
Motor vehicles
No. of right-
of-use assets
leased
24
1
Range of
remaining
term
0-11 years
0-1 years
Average
remaining
lease term
No. of leases
with extension
options
3.0 years
0.4 years
-
-
No. of
leases with
termination
options
2
-
108
ANNUAL REPORT AND ACCOUNTS 2022
Notes to the Consolidated Financial Statements
The lease liabilities are secured by the related underlying assets. Future minimum lease payments at 31 December 2022 were as follows:
As at 31 December 2022
Lease payments
Finance charges
Net present values
As at 31 December 2021
Lease payments
Finance charges
Net present values
Within one
year
One to
five years
After
five years
£m
6.0
(1.0)
5.0
£m
14.3
(2.7)
11.6
£m
15.0
(1.6)
13.4
Within one
year
One to
five years
After
five years
£m
5.4
(1.3)
4.1
£m
16.8
(3.2)
13.6
£m
17.8
(2.1)
15.7
Total
£m
35.3
(5.3)
30.0
Total
£m
40.0
(6.6)
33.4
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. The expense relating to payments
not included in the measurement of the lease liability was £nil (2021: £nil).
At 31 December 2022 the Group was committed to short-term leases and the total commitment at that date was £0.1m (2021: £0.1m).
At 31 December 2022 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 2022, the Group had contracts with sub-tenants for the
following future minimum lease rentals:
Office buildings
Within one year
Within one to two years
Within two to three years
Within three to four years
Within four to five years
Over five years
31 December 2022
31 December 2021
£m
0.1
0.1
0.1
0.1
0.1
-
0.5
£m
0.2
0.2
0.2
0.2
0.2
1.1
2.1
ANNUAL REPORT AND ACCOUNTS 2022
109
Notes to the Consolidated Financial Statements
16. DERIVATIVE ASSETS AND LIABILITIES
Cash flow hedges:
- Interest rate swaps
Held-for-trading*:
- Forward foreign currency contracts
Total
Current:
Non-current:
31 December 2022
31 December 2021
Assets
Liabilities
Assets
Liabilities
£m
-
0.9
0.9
0.9
-
£m
(3.9)
(1.3)
(5.2)
(1.3)
(3.9)
£m
-
0.6
0.6
0.6
-
£m
-
(0.4)
(0.4)
(0.3)
(0.1)
*Derivatives which do not meet the tests for hedge accounting under IFRS9 or which are not designated as hedging instruments are referred to as ‘held-for-trading’.
The Group uses derivative financial instruments to reduce its exposure to fluctuations in both interest rates and foreign currency exchange
rates. The Group does not use derivatives for speculative purposes. All derivatives are undertaken for risk management purposes.
Classification is based on when the derivatives mature.
The Group entered into an interest rate swap on 21 October 2022, with an effective date of 30 September 2022 based on a notional amount
of £290.0m, which aligns to the current term loan draw down (note 20). The agreement is to swap, on a quarterly basis, a floating rate of
interest (GBP SONIA) for a fixed rate of 4.9125%. The fixed interest is payable quarterly on the last business day of each of March, June,
September and December through to 5 August 2025.
Hedging instrument
Carrying value
Financial statement
line item
Nominal amount of
hedging instrument
Change in fair value
of the hedging
instrument used as the
basis for recognising
hedge ineffectiveness
for the period
Interest rate swap
£3.9m liability
Long-term derivative
liabilities
N/A – hedge 100%
effective
£290.0m
Given the same interest rate benchmark (GBP SONIA) is used in the hedging instrument (the swap) and the hedged item (the term loan), and
the payments are settled at the same date each quarter, there is an effective economic relationship between the hedging instrument and
the hedged item. The total £290.0m swap is designated as a hedge of the total £290.0m term loan, therefore, a 1:1 hedge ratio has been
established on a current notional basis.
The following potential sources of hedge ineffectiveness have been identified:
• Credit risk - A change in the credit risk of the Group or the counterparty to the interest rate swap; and
• Critical terms - The possibility of changes to the critical terms of the hedged item such that they no longer match those of the hedging
instrument.
The interest rate swap meets the definition of a derivative in accordance with IFRS9. Changes in fair value of derivative financial
instruments that are designated, and effective, cash flow hedges of forecast transactions are recognised in other comprehensive income
and accumulated under the heading of cash flow hedge reserve, limited to the cumulative change in fair value of the hedged item from
inception of the hedge. The gain or loss relating to the ineffective portion is recognised immediately in profit or loss. The cumulative amount
recognised in other comprehensive income and accumulated in equity is reclassified into the consolidated income statement out of other
comprehensive income in the same period when the hedged item is recognised in profit or loss. The hedge has remained effective for the
full financial year, therefore the Group has recognised the full fair value loss of £3.9m within the statement of other comprehensive income
during the year (2021: nil).
110
ANNUAL REPORT AND ACCOUNTS 2022
Notes to the Consolidated Financial Statements
In accordance with the requirements of IFRS 7, certain additional information about hedge accounting is disaggregated by risk type and
hedge designation type in the table below:
Cash Flow Hedge Reserve – Interest Rate Risk
31 December 2022
31 December 2021
Balance brought forward
Change in fair value of hedging instrument recognised in OCI
Balance carried forward
The maturity dates of the interest rate swap are as follows:
Within one year
Between one and two years
Between two and three years
Between three and four years
Between four and five years
Beyond five years
£m
-
(3.9)
(3.9)
£m
-
-
-
Interest Rate Swap
£m
(0.8)
(1.6)
(1.5)
-
-
-
(3.9)
Forward foreign currency contracts are not designated as hedges, therefore changes in fair value are recognised in the income statement.
The movement in relation to forward foreign currency contracts in the year was a £0.6m debit to the income statement (2021: debit of
£0.9m).
Forward foreign currency contracts have been entered into, which has committed the amount of currency below to be paid in exchange
for Sterling:
Expiring in the year ending:
31 December 2023
Euro
€m
10.1
US Dollar
$m
43.8
Forward exchange contracts have been entered into, which has committed the amount of currency below to be paid in exchange for
Indian Rupees:
Expiring in the year ending:
31 December 2023
US Dollar
$m
0.5
ANNUAL REPORT AND ACCOUNTS 2022
111
Notes to the Consolidated Financial Statements
17. TRADE AND OTHER RECEIVABLES
Trade receivables
Prepayments
Other receivables
Accrued income
Related party receivables (note 28)
31 December 2022
31 December 2021
£m
54.4
5.3
1.2
1.8
-
62.7
£m
42.3
5.1
1.4
1.5
0.9
51.2
The contractual value of trade receivables is £57.9m (2021: £46.8m). Their carrying value is assessed to be £54.4m (2021: £42.3m) after
assessing recoverability. The contractual value and the carrying value of other receivables are considered to be the same. The opening
trade receivables balance as at 1 January 2021 was £36.2m.
The amounts owed by related parties related to a loan which was repayable in annual instalments and was interest bearing, as detailed in
note 28. The amount outstanding as at 31 December 2021 of £0.9m represented the final repayment which was repaid in full on 31 January
2022.
The ageing analysis of net trade receivables is as follows:
Not overdue
Overdue by up to one month
More than one month but not more than three months overdue
More than three months but not more than one year overdue
The ageing analysis of trade receivables which have been impaired is as follows:
Not overdue
Overdue by up to one month
More than one month but not more than three months overdue
More than three months overdue
31 December 2022
31 December 2021
£m
25.5
15.7
9.5
3.7
54.4
Restated
£m
22.7
11.5
6.7
1.4
42.3
31 December 2022
31 December 2021
£m
-
0.1
0.6
2.8
3.5
Restated
£m
0.3
0.3
0.5
3.4
4.5
The impaired receivables of £3.5m comprises an expected credit loss provision of £3.4m (2021: £3.7m) and credit note provision of £0.1m
(2021: £0.8m).
The comparative year’s ageing analysis has been restated to correctly reflect the appropriate ageing categories.
The contractual amounts of the Group’s trade receivables are denominated in the following currencies:
Pounds Sterling
US Dollar
Euro
Australian Dollar
Other
31 December 2022
31 December 2021
£m
21.5
30.4
4.0
0.3
1.7
57.9
£m
18.1
23.0
3.9
0.7
1.1
46.8
112
ANNUAL REPORT AND ACCOUNTS 2022
Notes to the Consolidated Financial Statements
Movement on the Group’s loss allowances for trade receivables are as follows:
Opening expected credit loss allowance
Increase in loss allowance
Expected credit loss allowance acquired in business combinations
Receivables written off during the year as uncollectable
Closing expected credit loss allowance
Opening credit note provision
Increase in credit note provision recognised in revenue
Credit notes raised during the year
Closing credit note provision
31 December 2022
31 December 2021
£m
3.7
0.7
0.2
(1.2)
3.4
£m
3.9
1.2
-
(1.4)
3.7
31 December 2022
31 December 2021
£m
0.8
0.4
(1.1)
0.1
£m
2.2
0.2
(1.6)
0.8
The Group recognises lifetime expected credit losses (within the ECL provision) which are estimated using a provision matrix 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.
In calculating the ECL provision, an estimate was made by Management to apply an appropriate uplift to the ECL rate to take into account
forecast market conditions, including the expected impact of rising inflation levels. The ECL rate calculated overall was 2.63%. If the ECL
rate was increased to 5%, this would have had an impact on the ECL provision of £0.7m.
Details of the provision matrix are presented below:
31 December 2022
Days
Net exposure (£m)
ECL rate
Provision (£m)
31 December 2021
Days
Net exposure (£m)
ECL rate
Provision (£m)
0-30
8.8
4.1%
0.4
0-30
8.2
5.6%
0.5
31-60
61-90
91-120
121-150
151-365
2.9
5.2%
0.2
31-60
1.4
11.8%
0.2
1.5
9.2%
0.1
1.1
25.9%
0.3
0.9
40.5%
0.4
1.9
67.9%
1.3
61-90
91-120
121-150
151-365
1.1
20.2%
0.2
0.6
31.1%
0.2
0.4
46.4%
0.2
3.4
67.6%
2.3
365+
0.7
100.0%
0.7
365+
0.1
100.0%
0.1
Total
17.8
3.4
Total
15.2
3.7
Net exposure presented in the above tables consists of gross debtors, net of unreleased deferred revenue.
The maximum exposure to credit risk at 31 December 2022 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.
ANNUAL REPORT AND ACCOUNTS 2022
113
Notes to the Consolidated Financial Statements
18. DEFERRED INCOME TAX
Balance brought forward
Tax income during the period recognised in profit or loss
Tax (expense)/income during the period recognised directly in equity
Deferred taxes acquired in business combinations
Balance carried forward
The provision for deferred taxation consists of the tax effect of temporary differences in respect of:
Accelerated depreciation for tax purposes
Losses available for offsetting against future taxable income
Share-based payments
Business combinations - revaluations of intangible assets to fair value
Business combinations - revaluations of other assets to fair value
Other temporary differences
Balance carried forward
31 December 2022
31 December 2021
£m
2.1
3.0
(2.5)
(4.4)
(1.8)
(0.7)
2.8
6.8
(13.4)
(0.1)
2.8
(1.8)
£m
4.2
2.4
1.5
(6.0)
2.1
(0.2)
0.9
10.4
(9.4)
(0.1)
0.5
2.1
Deferred tax asset
Deferred tax liability
Net position
31 December 2022
31 December 2021
£m
2.3
(4.1)
(1.8)
£m
2.1
-
2.1
The Finance Act 2021 increased the UK corporation tax rate from 19% to 25% effective 1 April 2023 for companies with profits in excess of
£250,000. The Group’s deferred tax assets and liabilities have therefore been remeasured at the tax rates that are expected to apply to the
period when the asset is realised or the liability is settled. The effect of this remeasurement during the period has been recognised in both
profit or loss (£1.3m tax income) and directly in equity (£0.4m tax income).
Deferred tax assets have not been recognised in respect of £4.6m (2021: £5.6m) of tax losses as they may not be used to offset taxable
profits elsewhere in the Group, they have arisen in subsidiaries that have been loss-making for some time, and there are no other tax
planning opportunities or other evidence of recoverability in the near future. If the Group were able to recognise all unrecognised deferred
tax assets at the UK’s pending statutory income tax rate of 25%, the profit would increase by £1.1m (2021: £1.1m based on a rate of 19%).
The temporary differences associated with investments in the Group’s overseas subsidiaries for which a deferred tax liability has not been
recognised in the period presented aggregate to £30.5m (2021: £28.3m). The Group is in a position to control the timing of the reversal of
these temporary differences and determined it is probable that they will not reverse in the foreseeable future.
There are no income tax consequences attached to the payment of dividends in either 2022 or 2021 by the Group to its shareholders.
114
ANNUAL REPORT AND ACCOUNTS 2022
Notes to the Consolidated Financial Statements
19. TRADE AND OTHER PAYABLES
Trade payables
Other taxation and social security
Deferred revenue
Accruals
31 December 2022
31 December 2021
£m
11.2
3.1
104.0
19.0
137.3
£m
11.1
2.9
81.4
18.9
114.3
All amounts are short-term. The carrying values are considered to be a reasonable approximation of fair value. The opening deferred
revenue balance as at 1 January 2021 was £74.7m.
20. BORROWINGS
Short-term lease liabilities
Short-term borrowings
Current liabilities
Long-term lease liabilities
Long-term borrowings
Non-current liabilities
31 December 2022
31 December 2021
£m
5.4
-
5.4
24.6
283.6
308.2
£m
4.1
5.0
9.1
29.3
195.2
224.5
ANNUAL REPORT AND ACCOUNTS 2022
115
Notes to the Consolidated Financial Statements
The changes in the Group’s borrowings can be classified as follows:
As at 1 January 2021
Cash flows:
- Repayment
- Proceeds
- Loan fees paid
Non-cash:
- Interest expense
- Lease additions
- Lease liabilities2
- Reclassification
As at 31 December 2021
Cash flows:
- Repayment
- Proceeds
- Loan fees paid
- Settlement of loan
Non-cash:
- Interest expense
- Lease additions
- Lease liabilities2
- Reclassification
As at 31 December 2022
Short-term
borrowings
Long-term
borrowings
Short-term lease
liabilities1
Long-term lease
liabilities1
£m
5.0
(5.0)
-
-
-
-
-
5.0
5.0
(2.5)
-
-
-
-
-
-
(2.5)
-
£m
70.8
-
129.0
(0.4)
0.8
-
-
(5.0)
195.2
-
321.0
(8.0)
(229.2)
2.1
-
-
2.5
283.6
£m
4.1
(5.8)
-
-
-
2.4
0.6
2.8
4.1
(5.9)
-
-
-
-
0.6
1.5
5.1
5.4
£m
35.8
-
-
-
-
-
(3.7)
(2.8)
29.3
-
-
-
-
-
-
0.4
(5.1)
24.6
Total
£m
115.7
(10.8)
129.0
(0.4)
0.8
2.4
(3.1)
-
233.6
(8.4)
321.0
(8.0)
(229.2)
2.1
0.6
1.9
-
313.6
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
On 5 August 2022, the Group successfully completed a refinancing of external debt facilities. This resulted in settlement of the previously
drawn-down position of £229.2m and draw down on the new term loan facility of £290.0m on 9 August 2022, increasing cash reserves of
the Group. The settlement of the previously held loan qualified as a substantial modification and therefore, in accordance with IFRS9, the
previous loan was derecognised from the statement of financial position resulting in a credit to the income statement of £2.8m.
The new facilities have been arranged to cover a period of three years. There are no fixed periodic capital repayments, with the full balance
being due for settlement when the facilities expire in August 2025. If the Group needs further debt funding in order to support M&A activity,
the new facility includes a £120.0m revolving credit facility (RCF). The term loan is syndicated between 12 lenders and the RCF is syndicated
between 13 lenders.
As at 31 December 2022, the Group had fully drawn down the term loan of £290.0m. The Group is yet to draw down the available RCF facility
of £120.0m. Due to offsetting of loan fees paid as part of the refinancing process, the term loan is held on the statement of financial position
with a value of £283.6m.
Interest is currently charged on the term loan at a rate of 3.25% over the Sterling Overnight Index Average rate (SONIA) and is payable
at the end of each calendar quarter. As disclosed within note 16, the Group entered into an interest rate swap during October 2022, with
an effective date of 30 September 2022 based on a notional amount of £290.0m, which aligns to the current term loan draw down. The
agreement is to swap, on a calendar quarter basis, SONIA for a fixed rate of 4.9125%.
116
ANNUAL REPORT AND ACCOUNTS 2022
Notes 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, at amortised cost, as follows:
31 December 2022
31 December 2021
Current assets
Cash
Trade receivables
Other receivables
Accrued income
Related party receivables
Current liabilities
Trade payables
Short-term borrowings
Accruals
Non-current liabilities
Long-term borrowings
£m
34.0
54.4
1.2
1.8
-
91.4
(11.2)
-
(19.0)
(30.2)
(283.6)
(283.6)
£m
22.6
42.3
1.4
1.5
0.9
68.7
(11.1)
(5.0)
(18.9)
(35.0)
(195.2)
(195.2)
The Group’s financial instruments classified under IFRS, at fair value, are as follows:
31 December 2022
31 December 2021
Current assets
Short-term derivative assets
Current liabilities
Short-term derivative liabilities
Non-current liabilities
Long-term derivative liabilities
£m
0.9
0.9
(1.3)
(1.3)
(3.9)
(3.9)
£m
0.6
0.6
(0.3)
(0.3)
(0.1)
(0.1)
ANNUAL REPORT AND ACCOUNTS 2022
117
Notes to the Consolidated Financial Statements
Maturity analysis
31 December 2022
Current assets
Cash
Short-term derivative assets
Trade receivables
Other receivables
Accrued income
Current liabilities
Short-term derivative liabilities
Trade payables
Accruals
Non-current liabilities
Long-term derivative liabilities
Long-term borrowings
Less than one
month
One to three
months
Three months
to one year
£m
34.0
-
25.5
-
1.8
(0.1)
(9.2)
-
-
-
52.0
£m
-
0.3
25.2
1.2
-
(0.8)
(2.0)
(19.0)
(0.4)
(5.5)
(1.0)
£m
-
0.6
3.7
-
-
(0.4)
-
-
(0.4)
(17.2)
(13.7)
31 December 2021
Less than one
month
One to three
months
Three months
to one year
Current assets
Cash
Short-term derivative assets
Trade receivables
Other receivables
Accrued income
Related party receivables
Current liabilities
Short-term borrowings
Short-term derivative liabilities
Trade payables
Accruals
Non-current liabilities
Long-term borrowings
Long-term derivative liabilities
£m
22.6
-
22.7
-
-
0.9
-
-
(7.5)
-
-
-
38.7
£m
-
0.2
15.8
1.4
1.5
-
(3.0)
(0.2)
(3.6)
(18.9)
-
-
(6.8)
£m
-
0.4
3.8
-
-
-
(8.9)
(0.1)
-
-
-
-
(4.8)
One to
five years
£m
-
-
-
-
-
-
-
-
(3.1)
(317.7)
(320.8)
One to
five years
£m
-
-
-
-
-
-
-
-
-
-
Total
£m
34.0
0.9
54.4
1.2
1.8
(1.3)
(11.2)
(19.0)
(3.9)
(340.4)
(283.5)
Total
£m
22.6
0.6
42.3
1.4
1.5
0.9
(11.9)
(0.3)
(11.1)
(18.9)
(203.8)
(0.1)
(203.9)
(203.8)
(0.1)
(176.8)
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 IFRS7 (interest on short and long-term borrowings of £56.8m (2021: £15.5m)).
118
ANNUAL REPORT AND ACCOUNTS 2022
Notes to the Consolidated Financial Statements
Reclassifications
There have been no reclassifications between financial instrument categories during the years ended 31 December 2022 and 31 December
2021.
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 that have a significant effect on the recorded fair value are observable, either directly or
indirectly; and
• Level 3: techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market
data.
As at 31 December 2022, the only financial instruments measured at fair value were derivative financial assets/liabilities (both interest rate
swaps and forward foreign currency contracts) 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
Observable market exchange
rates and observable forecast
GBP SONIA curves
Determining the present value
of financial instruments as the
current value of future cash
flows, taking into account
current market exchange rates
and observable forecast GBP
SONIA curves
There are no amounts of collateral held as security in respect of the derivative financial instruments.
Cash, trade receivables, trade accounts payable and borrowings
The carrying amounts of cash, trade receivables and trade payables are approximately equivalent to their fair value because of the short
term to maturity. In the case of borrowings, the floating rate of interest (SONIA plus margin) allows the carrying value to approximate to fair
value.
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 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 Pounds Sterling.
ANNUAL REPORT AND ACCOUNTS 2022
119
Notes to the Consolidated Financial Statements
The Group’s exposure to foreign currencies arising from financial instruments is:
31 December 2022
US Dollar
Exposures
Cash
Short- and long-term derivative assets/
(liabilities)
Trade receivables
Trade accounts payable
Net exposure
£m
7.8
(0.2)
30.4
(1.6)
36.4
31 December 2021
US Dollar
Exposures
Cash
Short- and long-term derivative assets/
(liabilities)
Trade receivables
Trade accounts payable
Net exposure
£m
8.2
-
23.0
(0.9)
30.3
Euro
£m
1.5
(0.2)
4.0
-
5.3
Euro
£m
1.7
0.2
3.9
-
5.8
Other
£m
6.6
-
2.0
(0.2)
8.4
Other
£m
5.0
-
1.2
(0.1)
6.1
Total
£m
15.9
(0.4)
36.4
(1.8)
50.1
Total
£m
14.9
0.2
28.1
(1.0)
42.2
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 (reflecting a significant but reasonably plausible scenario) would impact the income
statement as detailed in the table below:
Impact on profit before income tax:
US Dollar
Euro
10% decrease
10% increase
2022
£m
4.1
0.6
4.7
2021
£m
3.4
0.6
4.0
2022
£m
(3.3)
(0.5)
(3.8)
2021
£m
(2.8)
(0.5)
(3.3)
This analysis assumes a movement in Sterling across all currencies and only includes the effect of foreign exchange movements on financial
instruments. All other variables remain constant.
Interest rate risk
The Group is exposed to interest rate risk on its overdraft and the outstanding syndicated loans. The Group manages the risk of increases
to the floating element of interest charged on its term loan (SONIA) through use of an interest rate swap. No other liabilities accrue interest.
The table below shows how a movement in interest rates of 100 basis points (reflecting a significant but reasonably plausible scenario)
would impact the income statement based on the additional interest expense for the year then ended:
100 basis point decrease 100 basis point increase
Impact on:
Net earnings before income tax
This analysis assumes all other variables remain constant.
2022
£m
-
2021
£m
2.0
2022
£m
-
2021
£m
(2.0)
The balance of £nil in 2022 reflects that the Group entered into an interest rate swap on 21 October 2022; full disclosure is presented in
note 16. If the Group had not entered into the swap and was still exposed to interest rate risk an increase in interest rates of 100 basis points
would give rise to an additional interest expense of £2.8m, likewise a reduction in interest rates of 100 basis points would reduce interest
expense by £2.8m for the year ended 31 December 2022.
120
ANNUAL REPORT AND ACCOUNTS 2022
Notes to the Consolidated Financial Statements
Liquidity risk
Liquidity risk represents the Group’s ability to meet its contractual obligations. The Group evaluates its liquidity requirements on an ongoing
basis. In general, the Group generates sufficient cash flows from its operating activities to meet its financial liabilities.
The Group’s main source of financing for its working capital requirements is free cash flow.
The Group’s exposure to liquidity risk arises from trade accounts payable and syndicated loans. All contractual cash flows from trade
accounts payable are the same as the carrying value of the liability due to their short-term nature.
At 31 December 2022, the Group has a term loan of £290.0m and an available but as yet undrawn RCF of £120.0m. See note 20 for further
details.
Credit risk
In the normal course of its business, the Group is exposed to credit risk from cash and trade and other receivables. Credit risk refers to
the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. Trade receivables consist of a
large number of customers, spread across diverse industries and geographic markets, and the Group’s exposure to credit risk is influenced
mainly by the individual characteristics of each customer. The Group has adopted an approach of assessing factors such as counterparty
size, location and payment history as a means of mitigating the risk of financial loss from defaults. The Group defines default as the debt
being deemed completely unrecoverable.
A total of £91.4m of the Group’s assets are subject to credit risk (31 December 2021: £68.7m). The Group does not hold any collateral over
these amounts. See note 17 for further details of the Group’s receivables.
The Group recognises lifetime expected credit losses (within the ECL provision) which are estimated using a provision matrix based on the
Group’s historical credit loss experience, as shown below, 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 write-off history, including 2022, is shown as below:
Revenue (£m)
Provision added for
bad debt (£m)
% of revenue
2022
243.2
1.1
0.5%
2021
189.3
1.4
0.7%
2020
178.4
1.7
1.0%
2019
178.2
2.9
1.6%
2018
157.6
2.4
1.5%
2017
118.6
0.8
0.7%
2016
100.0
0.9
0.9%
In calculating the ECL provision, an estimate was made by management to apply an appropriate uplift to the ECL rate to take into account
forecast market conditions, including the expected impact of rising inflation levels.
The Group considers the current level of its allowance for doubtful debts to be adequate to cover expected credit losses on trade receivables.
Bad debt expenses are reported in the income statement.
Equity risk
It is the Group’s policy to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain the
development of the business. See note 24 for further details of the Group’s equity. The impact of the sensitivity analysis noted in the various
risk categories above would impact the income statement for the year.
ANNUAL REPORT AND ACCOUNTS 2022
121
Notes to the Consolidated Financial Statements
22. CASH FLOW FROM MOVEMENT IN WORKING CAPITAL
The following table reconciles the movement in statement of financial position balances to the movement presented in the consolidated
statement of cash flows for receivables and payables.
2022
At 31 December 2022
At 31 December 2021
Consolidated Statement of Financial Position movement
MBI acquisition (note 27)
TS Lombard acquisition (note 27)
Related party loan repayment (note 28)
Tax related adjustments
Movement as shown in Consolidated Statement of Cash Flows
2021
At 31 December 2021
At 31 December 2020
Consolidated Statement of Financial Position movement
Life Sciences acquisition
Life Sciences deferred bonuses
LMC acquisition
LMC deferred bonuses
Related party loan repayment
Deferred consideration payment CHM Research Limited
Deferred consideration payment Competenet
Tax related adjustments
Movement as shown in Consolidated Statement of Cash Flows
Trade and other
receivables
(note 17)
Trade and other
payables
(note 19)
£m
62.7
51.2
(11.5)
2.7
0.7
(0.9)
(0.2)
(9.2)
£m
(137.3)
(114.3)
23.0
(3.5)
(2.3)
-
-
17.2
Trade and other
receivables
(note 17)
Trade and other
payables
(note 19)
£m
51.2
44.9
(6.3)
1.1
-
2.4
-
(0.9)
-
-
0.5
(3.2)
£m
(114.3)
(100.2)
14.1
(2.1)
(1.0)
(5.6)
(3.9)
-
0.6
0.4
(0.3)
2.2
122
ANNUAL REPORT AND ACCOUNTS 2022
Notes to the Consolidated Financial Statements
23. PROVISIONS
The movement in the provisions is as follows:
At 1 January 2021
Increase in provision
Utilised
Business combination additions
At 31 December 2021
Increase in provision
Release of unutilised provision
At 31 December 2022
Current:
Non-current:
Dilapidations
Right-of-use
assets
Dilapidations
Other
£m
0.4
0.1
-
-
0.5
0.1
(0.1)
0.5
-
0.5
£m
0.3
-
(0.1)
0.1
0.3
0.7
(0.1)
0.9
0.1
0.8
Total
£m
0.7
0.1
(0.1)
0.1
0.8
0.8
(0.2)
1.4
0.1
1.3
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, over a
period of less than one year to 11 years. Due to the nature of the obligations, there is a good degree of certainty over the amount and timing
of the expected cash flows. There is no expectation of reimbursement in relation to these obligations.
24. EQUITY
Share capital
Authorised, allotted, called up and fully paid:
31 December 2022
31 December 2021
No’000
£000s
No’000
£000s
Ordinary shares (1/14th pence)
Deferred shares of £1.00 each
Total authorised, allotted,
called up and fully paid
118,303
100
118,403
84
100
184
118,303
100
118,403
84
100
184
Share purchases
During the year the Group’s Employee Benefit Trust purchased an aggregate amount of 5,274,462 shares (representing 4.5% of the total
share capital), each with a nominal value of 1/14th pence, at a total market value of £66.6m. The purchased shares will be held for the
purpose of satisfying the exercise of share options under the Company’s Employee Share Option Plan.
During the year, a total of 4,503,327 shares (representing 3.8% of the total share capital), each with a nominal value of 1/14th pence, which
were held by the Group’s Employee Benefit Trust were utilised as a result of the vesting of the final tranche of Scheme 1 share options (at a
total market value of £57.0m), as disclosed in note 25.
The maximum number of shares (each with a nominal value of 1/14th pence) held by the Employee Benefit Trust (at any time during the year
ended 31 December 2022) was 6,068,381 (representing 5.1% of the total share capital).
The purchase of shares by the trust is to limit the eventual dilution to existing shareholders. As at 31 December 2022, based upon the
restructured vesting schedules (see note 25), no dilution is forecast until 2027.
ANNUAL REPORT AND ACCOUNTS 2022
123
Notes to the Consolidated Financial Statements
Vesting schedule
2023 No.
2024 No.
2025 No.
2026 No.
2027 No.
Total No.
Scheme 1*
Scheme 2
Scheme 4
Total
Shares held in trust
Net dilution
997,227
997,226
-
-
-
1,994,453
-
-
840,000
840,000
840,000
840,000
3,360,000
-
171,600
343,200
1,201,200
1,716,000
997,227
1,837,226
1,011,600
1,183,200
2,041,200
7,070,453
(997,227)
(1,837,226)
(1,011,600)
(1,183,200)
(543,772)
(5,573,025)
-
-
-
-
1,497,428
1,497,428
*The remaining share options in Scheme 1 can be exercised anytime until August 2033 and therefore for the purposes of this analysis we have assumed they
will be exercised over the next two years.
Capital management
The Group’s capital management objectives are:
• To ensure the Group’s ability to continue as a going concern; and
• 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 bank debt, which includes borrowings (note 20) and cash and cash equivalents, and equity.
The Company has two classes of shares. The ordinary shares carry no right to fixed income and each share carries the right to one vote at
general meetings of the Company.
The deferred shares do not confer upon the holders the right to receive any dividend, distribution or other participation in the profits of
the Company. The deferred shares do not entitle the holders to receive notice of or to attend and speak or vote at any general meeting
of the Company. On distribution of assets on liquidation or otherwise, the surplus assets of the Company remaining after payments of its
liabilities shall be applied first in repaying to holders of the deferred shares the nominal amounts and any premiums paid up or credited as
paid up on such shares, and second the balance of such assets shall belong to and be distributed among the holders of the ordinary shares
in proportion to the nominal amounts paid up on the ordinary shares held by them respectively.
There are no specific restrictions on the size of a holding nor on the transfer of shares, which are both governed by the general provisions
of the Articles of Association and prevailing legislation. The Directors are not aware of any agreements between holders of the Company’s
shares that may result in restrictions on the transfer of securities or on voting rights.
No person has any special rights of control over the Company’s share capital and all its issued shares are fully paid.
With regard to the appointment and replacement of Directors, the Company is governed by its Articles of Association, the Companies Act
and related legislation. The Articles themselves may be amended by special resolution of the shareholders. The powers of Directors are
described in the Board Terms of Reference, copies of which are available on request.
Dividends
The final dividend for 2021 was 13.2 pence per share and was paid in April 2022. The total dividend for the current year is 26.0 pence per
share, with an interim dividend of 7.7 pence per share paid on 7 October 2022 to shareholders on the register at the close of business on 9
September 2022, and a final dividend of 18.3 pence per share will be paid on 28 April 2023 to shareholders on the register at the close of
business on 31 March 2023. The ex-dividend date will be on 30 March 2023.
Treasury reserve
The treasury reserve represents the cost of shares held 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.
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.
Cash flow hedge reserve
The cash flow hedge reserve contains the fair valuation movements arising from revaluation of interest rate swaps. Changes in fair value
of derivative financial instruments that are designated, and effective, cash flow hedges of forecast transactions are recognised in other
comprehensive income and accumulated under the heading of cash flow hedge reserve, limited to the cumulative change in fair value of
the hedged item from inception of the hedge. The gain or loss relating to the ineffective portion is recognised immediately in profit or loss.
The cumulative amount recognised in other comprehensive income and accumulated in equity is reclassified into the consolidated income
statement out of other comprehensive income in the same period when the hedged item is recognised in profit or loss.
124
ANNUAL REPORT AND ACCOUNTS 2022
Notes to the Consolidated Financial Statements
25. SHARE-BASED PAYMENTS
Scheme 1 - fully vested and closed to new participants
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 Adjusted 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;
Each of the awards were subject to vesting criteria set by the Remuneration Committee. As disclosed in the 2021 annual report and accounts,
the final vesting target of £52m Adjusted EBITDA (excluding the impact of IFRS16) was met in the financial year ending 31 December 2021
and therefore the final tranche of Scheme 1 options vested during 2022. Scheme 1 is now therefore closed.
The total charge recognised for the scheme during the 12 months to 31 December 2022 was £nil (2021: £6.3m).
The Remuneration Committee approved the vesting of the final tranche of Scheme 1 on 11 August 2022. The awards of the scheme were
settled with ordinary shares of the Company. Whilst the majority of participants chose to exercise their options (4.5m options), holders of
the remaining 2.0m options chose to defer their exercise, as allowable under the scheme rules. As a result of the final tranche of options
vesting during the year, £62.4m was transferred from the Group’s treasury reserve to retained earnings of which £58.6m is distributable.
The weighted average price of the exercised options at the date of exercise was £13.85 per share.
Reconciliation of movement in the number of options is provided below. No new grants were awarded during 2022.
31 December 2021
Exercised
Forfeited
31 December 2022
Option exercise price
(pence)
1/14th
Remaining life
(years)
0.0
1/14th
1/14th
1/14th
N/A
N/A
0.0
Number of
options
6,547,557
(4,503,327)
(49,777)
1,994,453
The options carried forward as at 31 December 2022 are both outstanding and exercisable. The maximum term of the remaining options
outstanding is 10 years, ending in August 2033.
Schemes 2 and 4
During the year, the Remuneration Committee reviewed the structure of the targets for Schemes 2 and 4 against the original objectives
of the scheme. As set out in detail within the Remuneration report on page 61, the Committee determined it appropriate to change the
methodology of targets from a Total Shareholder Return (TSR) basis to an EBITDA basis.
In order to account for the restructure, management firstly calculated the fair value of each scheme based upon both the existing TSR
targets and the proposed new EBITDA targets. The valuation date was determined as 30 November 2022, being the date the change was
verbally communicated to option holders.
• TSR basis – The fair values of Schemes 2 and 4 were calculated as at 30 November 2022, based upon the remaining performance
period and existing TSR targets. The fair values of each individual tranche were determined using the Monte Carlo method,
using the inputs; valuation date and share price, vesting dates, expected term, risk free rate, dividend yield and volatility.
• EBITDA basis - The fair values of Schemes 2 and 4 were calculated as at 30 November 2022, based upon the remaining performance
period and proposed EBITDA targets. The fair values of each individual tranche were determined using the Black-Scholes model, using
the inputs; valuation date and share price, exercise price, vesting dates, risk free rate, and volatility.
ANNUAL REPORT AND ACCOUNTS 2022
125
Notes to the Consolidated Financial Statements
Management then determined whether or not it considered the modification to be a beneficial modification. Whilst it concluded that the
targets were calculated based upon a comparable compounded growth rate when compared to the original vesting targets, for accounting
purposes it was deemed a beneficial modification based upon:
• The significant increase in the fair value of per share moving from market vesting to non-market vesting target criteria, as at 30
November 2022 when the changes were communicated to employees;
• The extension of the vesting period for Scheme 2 was partly offset by splitting the target into four vesting targets, one of which was
brought forward from the original vesting period; and
• Scheme 2 option holders now have four opportunities to participate, compared with a single “hit or miss” target under the old basis for
target.
As Management determined a beneficial modification, the delta of the fair values as at 30 November (being the difference in the fair values
of each tranche using the two target models) has been charged to the income statement, spread over the remaining vesting period for each
tranche, from valuation date of 30 November 2022, in accordance with IFRS2. In calculating this spreading of charge, Management also
applied a churn assumption, based upon historical employee churn data.
Scheme/Tranche
Scheme 2
Tranche 1
Tranche 2
Tranche 3
Tranche 4
Scheme 4
Tranche 1
Tranche 2
Tranche 3
Fair value 30 November –
TSR target basis
(£ per grant)
Fair value 30 November –
EBITDA target basis
(£ per grant)
3.80
3.80
3.80
3.80
4.44
1.84
1.71
11.79
11.43
11.09
10.76
11.43
11.09
10.76
The below table summarises the detail of the targets under the old and new structures.
Scheme 2 (2019)
Scheme 4 (2021)
Old basis
for target
The award will vest if the compounded annual growth
(CAGR) in the Group’s TSR performance over the five-
year performance period (ending March 2025) is equal
to or exceeds 16% per annum (100% vest).
The award will vest if the compounded annual growth (CAGR) in
the Group’s TSR performance over the five-year performance
period (measured in the February following year end) meets
the below vesting criteria:
- If TSR achieves 6% compounded over 2022-2024 (10% vest)
- If TSR achieves 16% compounded over 2022-2025 (20% vest)
- If TSR achieves 16% compounded over 2022-2026 (70% vest)
New basis
for target
The awards will vest based upon the following
proportions if Adjusted EBITDA targets are met, as
measured in the year end results for the below years:
The awards will vest based upon the following proportions
if Adjusted EBITDA targets are met, as measured in the year
end results for the below years:
- 2023 £100m Adj EBITDA (25% Vest)
- 2024 £110m Adj EBITDA (25% Vest)
- 2025 £125m Adj EBITDA (25% Vest)
- 2026 £145m Adj EBITDA (25% Vest)
- 2023 – Not Applicable
- 2024 £110m Adj EBITDA (10% Vest)
- 2025 £125m Adj EBITDA (20% Vest)
- 2026 £145m Adj EBITDA (70% Vest)
The change to Scheme 2 rules has resulted in the remaining life of the scheme being extended from March 2025 to March 2027.
Within both Schemes 2 and 4, each option granted converts to one ordinary share on exercise.
126
ANNUAL REPORT AND ACCOUNTS 2022
Notes to the Consolidated Financial Statements
Scheme 2 - 2019 scheme
The following assumptions were used in the valuation under the old performance criteria:
Award tranche
Grant date
Fair value of
share price at
grant date
Exercise
price
(pence)
Estimated
forfeiture rate
p.a.
Award 1
Award 2
Award 3
Award 4
Award 5
Award 6
Award 7
31 October 2019
7 May 2020
25 May 2020
23 June 2020
22 September 2020
17 November 2020
23 March 2021
£2.02
£4.62
£5.50
£6.12
£6.35
£7.12
£5.15
0.0714p
0.0714p
0.0714p
0.0714p
0.0714p
0.0714p
0.0714p
0%
0%
0%
0%
0%
0%
0%
The following assumptions were used in the valuation under the new performance criteria and vesting periods:
Weighted
average of
remaining
contractual
life (years)
2.0
2.0
2.0
2.0
2.0
2.0
2.0
Award tranche
Grant date
Award 1
Award 2
Award 3
Award 5
Award 7
31/10/19
07/05/20
25/05/20
22/09/20
23/03/21
Group achieves £100m EBITDA by 31 March 2024
25% vest
25% vest
25% vest
25% vest
25% vest
Fair value at modification date
Risk-free interest rate
Estimated forfeiture rate
Remaining contractual life
£11.79
3.169%
9%
1.25
£11.79
3.169%
9%
1.25
£11.79
3.169%
9%
1.25
£11.79
3.169%
9%
1.25
£11.79
3.169%
9%
1.25
Group achieves £110m EBITDA by 31 March 2025
25% vest
25% vest
25% vest
25% vest
25% vest
Fair value at modification date
Risk-free interest rate
Estimated forfeiture rate
Remaining contractual life
£11.43
3.240%
15%
2.25
£11.43
3.240%
15%
2.25
£11.43
3.240%
15%
2.25
£11.43
3.240%
15%
2.25
£11.43
3.240%
15%
2.25
Group achieves £125m EBITDA by 31 March 2026
25% vest
25% vest
25% vest
25% vest
25% vest
Fair value at modification date
Risk-free interest rate
Estimated forfeiture rate
Remaining contractual life
£11.09
3.201%
20%
3.25
£11.09
3.201%
20%
3.25
£11.09
3.201%
20%
3.25
£11.09
3.201%
20%
3.25
£11.09
3.201%
20%
3.25
Group achieves £145m EBITDA by 31 March 2027
25% vest
25% vest
25% vest
25% vest
25% vest
Fair value at modification date
Risk-free interest rate
Estimated forfeiture rate
Remaining contractual life
£10.76
3.241%
25%
4.25
£10.76
3.241%
25%
4.25
£10.76
3.241%
25%
4.25
£10.76
3.241%
25%
4.25
£10.76
3.241%
25%
4.25
Awards 4 and 6 had been forfeited at the time of modification. For all options noted within the table above, the exercise price per option
is 0.0714p (equivalent to 1/14th pence) and the expected dividend yield is 3.06%, which has been assumed to be paid throughout the
performance period. The volatility used within the calculations was 26.87% which was determined by calculating the Group’s observed
historical volatility over a period equal to the time until the end of the assumed maturity date. The initial share price used in the calculations
was £12.25.
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 believes the current assumptions to be reasonable.
ANNUAL REPORT AND ACCOUNTS 2022
127
Notes to the Consolidated Financial Statements
The total charge recognised for the scheme during the 12 months to 31 December 2022 was £3.3m (2021: £2.9m). The awards of the
scheme will be settled with ordinary shares of the Company.
Reconciliation of movement in the number of options in Scheme 2 is provided below.
31 December 2021
Forfeited
31 December 2022
Option exercise price
(pence)
1/14th
Remaining life
(years)
3.0
1/14th
1/14th
N/A
2.8
Number of
options
3,660,000
(300,000)
3,360,000
The options carried forward as at 31 December 2022 are both outstanding and exercisable.
Scheme 4 - 2021 scheme
The following assumptions were used in the valuation under the old performance criteria:
Award tranche
Grant date
TSR achieves 6% compounded over 2022-2024
Fair value at modification date
Estimated forfeiture rate
Remaining contractual life
TSR achieves 16% compounded over 2022-2025
Fair value at modification date
Estimated forfeiture rate
Remaining contractual life
TSR achieves 16% compounded over 2022-2026
Fair value at modification date
Estimated forfeiture rate
Remaining contractual life
Award 1
07/03/22
10% vest
£4.44
20%
2.25
20% vest
£1.84
26%
3.25
70% vest
£1.71
31%
4.25
128
ANNUAL REPORT AND ACCOUNTS 2022
Notes to the Consolidated Financial Statements
The following assumptions were used in the valuation under the new performance criteria:
Award tranche
Grant date
Group achieves £110m EBITDA by 31 March 2025
Fair value at modification date
Risk-free interest rate
Estimated forfeiture rate
Remaining contractual life
Group achieves £125m EBITDA by 31 March 2026
Fair value at modification date
Risk-free interest rate
Estimated forfeiture rate
Remaining contractual life
Group achieves £145m EBITDA by 31 March 2027
Fair value at modification date
Risk-free interest rate
Estimated forfeiture rate
Remaining contractual life
Award 1
07/03/22
10% vest
£11.43
3.240%
20%
2.25
20% vest
£11.09
3.201%
26%
3.25
70% vest
£10.76
3.241%
31%
4.25
For all options noted within the table above, the exercise price per option is 0.0714p (equivalent to 1/14th pence) and the expected dividend
yield is 3.06%, which has been assumed to be paid throughout the performance period. The volatility used within the calculations was
26.87% which was determined by calculating the Group’s observed historical volatility over a period equal to the time until the end of the
assumed maturity date. The initial share price used in the calculations was £12.25.
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 believes the current assumptions to be reasonable.
The total charge recognised for the scheme during the 12 months to 31 December 2022 was £0.8m (2021: £nil). The awards of the scheme
will be settled with ordinary shares of the Company.
Reconciliation of movement in the number of options in Scheme 4 is provided below.
31 December 2021
Granted
Forfeited
31 December 2022
Option exercise price
(pence)
1/14th
Remaining life
(years)
N/A
1/14th
1/14th
1/14th
N/A
N/A
3.9
Number of
options
-
1,772,000
(56,000)
1,716,000
The options carried forward as at 31 December 2022 are both outstanding and exercisable.
26. CONTINGENT LIABILITIES AND CAPITAL COMMITMENTS
As at 31 December 2021, a subsidiary of GlobalData Plc had ongoing claims with former employees. The potential obligation was categorised
as a contingent liability as at 31 December 2021 and as such a liability was not recognised in the financial statements of the Group at that
time. During the first half of 2022, these disputes were settled, with a total cost to the group of £0.1m.
There were no contingent liabilities or capital commitments at 31 December 2022.
ANNUAL REPORT AND ACCOUNTS 2022
129
Notes to the Consolidated Financial Statements
27. ACQUISITIONS
Media Business Insight Holdings Limited
On 9 June 2022 the Group acquired 100% of the share capital of Media Business Insight Holdings Limited (“MBI”) for cash consideration
of £22.9m. In August 2022, the Group paid a working capital adjustment of £0.3m following finalisation of the completion accounts. MBI
and its subsidiaries had a bank balance of £3.5m on the acquisition balance sheet, therefore the net cash cost of the acquisition to the
Group was £19.7m. The companies within this group specialise in providing content, insight and events for the creative media industry. In
addition, there are a number of contingent consideration payments due for settlement between 2023-2025 up to a maximum amount of
£1.6m, which are being recognised as remuneration expenses within the income statement and are disclosed as an adjusting item in note 7.
The amounts recognised for each class of assets and liabilities at the acquisition date were as follows:
Carrying value
Fair value
adjustments
Fair value
Intangible assets consisting of:
Trade names
Customer relationships
Database
Net assets acquired consisting of:
Property, plant and equipment
Intangible assets
Cash and cash equivalents
Trade and other receivables
Trade and other payables
Corporation tax
Deferred tax
Fair value of net assets acquired
The goodwill recognised in relation to the acquisition is as follows:
Consideration
Working capital adjustment
Less net assets acquired
Goodwill
£m
-
-
-
0.1
0.9
3.5
2.8
(4.1)
-
-
3.2
£m
9.4
5.5
0.4
-
(0.8)
-
(0.1)
0.6
(0.5)
(4.0)
10.5
£m
9.4
5.5
0.4
0.1
0.1
3.5
2.7
(3.5)
(0.5)
(4.0)
13.7
Fair value
£m
22.9
0.3
(13.7)
9.5
In line with the provision of IFRS3, fair value adjustments may be made within the 12-month period from the date of acquisition which
would result in an adjustment to the goodwill balance reported above. The goodwill that arose on the combination can be attributed to the
assembled workforce, know-how and research methodology. The fair values of the identified intangible assets were calculated in line with
the policies detailed on page 92. The amount of goodwill which is expected to be deductible for tax purposes is £nil.
The Group incurred legal and professional expenses of £0.8m in relation to the acquisition. In the period from the date of acquisition to 31
December 2022, the trade of MBI generated revenues of £7.4m and EBITDA of £1.0m. If the acquisition had occurred on 1 January 2022,
Group revenue would have been £251.5m and Group Adjusted EBITDA would have been £88.8m.
130
ANNUAL REPORT AND ACCOUNTS 2022
Notes to the Consolidated Financial Statements
TSL Research Group Limited
On 31 August 2022 the Group acquired 100% of the share capital of TSL Research Group Limited (“TS Lombard”) for cash consideration of
£13.3m. The group of companies acquired provide economic and political research, with a particular strength in emerging markets. The
acquisition provides the Group with further access to the asset management sales channel to sell its full product suite to. In addition, there
are a number of contingent consideration payments due for settlement during 2024 to a maximum amount of £3.0m, which are being
recognised as remuneration expenses within the income statement and are disclosed as an adjusting item in note 7.
The amounts recognised for each class of assets and liabilities at the acquisition date were as follows:
Carrying value
Fair value
adjustments
Fair value
Intangible assets consisting of:
Customer relationships
Database
Trade names
Net assets acquired consisting of:
Cash and cash equivalents
Trade and other receivables
Trade and other payables
Deferred tax
Fair value of net (liabilities)/assets acquired
The goodwill recognised in relation to the acquisition is as follows:
Consideration
Less net assets acquired
Goodwill
£m
-
-
-
0.1
0.7
(2.3)
-
(1.5)
£m
4.0
1.5
0.6
-
-
-
(0.3)
5.8
£m
4.0
1.5
0.6
0.1
0.7
(2.3)
(0.3)
4.3
Fair value
£m
13.3
(4.3)
9.0
In line with the provision of IFRS3, fair value adjustments may be made within the 12-month period from the date of acquisition which
would result in an adjustment to the goodwill balance reported above. The goodwill that arose on the combination can be attributed to the
assembled workforce, know-how and research methodology. The fair values of the identified intangible assets were calculated in line with
the policies detailed on page 92. The amount of goodwill which is expected to be deductible for tax purposes is £nil.
The Group incurred legal and professional expenses of £1.1m in relation to the acquisition. In the period from the date of acquisition to 31
December 2022, the trade of TS Lombard generated revenues of £1.7m and EBITDA of £0.1m. If the acquisition had occurred on 1 January
2022, Group revenue would have been £247.1m and Group Adjusted EBITDA would have remained at £86.4m.
Cash Cost of Acquisitions
The cash cost of acquisitions in 2022 comprises:
Acquisition of LMC: Working capital adjustment
Acquisition of MBI:
Cash consideration
Cash acquired
Working capital adjustment
Acquisition of TS Lombard:
Cash consideration
Cash acquired
ANNUAL REPORT AND ACCOUNTS 2022
31 December 2022
£m
0.7
22.9
(3.5)
0.3
13.3
(0.1)
33.6
131
Notes to the Consolidated Financial Statements
28. RELATED PARTY TRANSACTIONS
Mike Danson, GlobalData’s Chief Executive, owned 62.5% of the Company’s ordinary shares as at 31 December 2022 and 60.1% as at 27
February 2023 and is therefore the Company’s ultimate controlling party. Mike Danson owns a number of businesses that interact with
GlobalData Plc, largely in part as a result of past M&A transactions (GlobalData Holdings in 2016 and Research Views Limited in 2018).
The Board has put in place an additional control framework to ensure related party transactions are well controlled and managed. Related
party transactions are overseen by a subcommittee of the Board. The Related Party Transactions Committee, consisting of 4 Non-Executive
Directors and chaired by Murray Legg meets to:
• Oversee all related party transactions;
• Ensure transactions are in the best interests of GlobalData and its wider stakeholders; and
• Ensure all transactions are recorded and disclosed on an arm’s length basis.
As noted in the 2021 Annual Report, it is the intention of the Board and Management to reduce and eventually eliminate related party
transactions and wind down the service agreements that are currently in place. During 2022 we have continued the progress made in 2021
and now expect to have eliminated all legacy relationships with related parties by 31 December 2023.
During the year, the following related party transactions were entered into by the Group:
Accommodation
During 2021, we eliminated all related party landlord arrangements, following the sale of the John Carpenter and Essex Street properties
by the Estel Properties Group to third party landlords, and secondly, the surrender of the Hatton Garden lease by GlobalData. These
transactions completed in the first half of 2021 and therefore charges during 2022 were £nil (2021: £0.8m).
In addition, GlobalData Plc sub-let office space to other companies owned by Mike Danson, but this also materially ceased during 2021 with
the exception of one property (the related party tenant exited as at 31 December 2022 and therefore no related party property transactions
are expected in 2023). The total sub-lease income for the year ended 31 December 2022 was £0.1m (2021: £0.4m).
Corporate support services
In 2022 net corporate support charges of £0.6m were charged to the Group from NS Media Group Limited (“NSMGL”), a related party by
virtue of common ownership (2021: £0.2m charge to NSMGL). The corporate support charges principally consist of shared IT support and
software development. The IT contracts have been recharged on a consistent basis to the previous year and are determined by headcount.
The shared software support is clearly segregated into separate GlobalData and NSMGL teams and the charges are based upon this
segregation with a benchmarked mark-up. The Group expects the related contracts to end during 2023, which will result in the elimination
of corporate support services transactions. The Group expects that shared software development and support will also cease in 2023.
Loan to Progressive Trade Media Limited
The previous outstanding loan was fully repaid on 31 January 2022 and generated interest income in 2022 of £5,000 (2021: £0.05m).
Interest was charged throughout the term of the loan at a rate of 2.25% above LIBOR. The balance at 31 December 2022 is £nil (2021:
£0.9m). The loan was specifically entered into in relation to the divestment of non-core print and advertising businesses in 2016 and no
further loan relationships are expected.
Revenue contract containing IP sharing clause
The Group entered into a five-year data services agreement with NSMGL in June 2020. The agreed suite of data services provided to NSMGL
have been contracted on terms equivalent to those that prevail in arm’s length transactions. The Group mutually agreed with NSMGL to
terminate this agreement on 1 July 2022 in order to reduce the amount of related party transactions as well as a different strategic direction
in NSMGL. The total revenue generated from this contract was £0.4m (2021: £1.4m) and the net contribution generated was £0.2m (2021:
£0.8m). The cancellation was in accordance with the contracted terms.
NSMGL also acted as a sales distributor for some GlobalData products. On these transactions they charged agent fees of £0.2m (2021:
£0.1m).
Charity donations
During the year the Group paid donations of £0.1m (2021: £nil) to charities in India which were funded by a related party entity, The Danson
Foundation (charity reference 1121928). This was a pass-through transaction, with the Group facilitating payment to our charity partners
in India.
132
ANNUAL REPORT AND ACCOUNTS 2022
Notes to the Consolidated Financial Statements
Balances outstanding
As at 31 December 2022, the total balance receivable from NSMGL was £nil. There is no specific credit loss provision in place in relation to
this receivable and the total expense recognised during the period in respect of bad or doubtful debts was £nil.
The Group has taken advantage of the exemptions contained within IAS24: 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 £nil (2021: £0.9m). There were no other balances owing to or from related parties.
Directors and Key Management Personnel
The remuneration of Directors is disclosed within the Directors’ Remuneration Report on page 68.
ANNUAL REPORT AND ACCOUNTS 2022
133
Notes to the Consolidated Financial Statements
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 and focus operations through its main subsidiaries in its main territories.
The Group owns 100% of the ordinary shares of all subsidiary undertakings listed below with the exception of LMC Automotive (Thailand)
Company Limited, which is 49% owned. This entity is being fully consolidated into the Group on the basis that the Group holds majority
voting rights for the entity and has exposure to variable returns, therefore Management has assessed that the Group has control over the
entity. The listing below shows the subsidiary undertakings as at 31 December 2022:
Subsidiary undertaking
Principal activity Country of registration
Registered address
GlobalData Australia Pty Limited
Data and analytics
Australia
GlobalData Brasil, serviços e informações
empresariais Ltda.*
Data and analytics
Brazil
65A Mitcham Road,
Donvale, Victoria 3111,
Australia
Rua Tuiuti, 436 Conj 31 -
Tatuapé, São Paulo - SP,
03081-003, Brazil
Adfinitum Networks Inc*
GlobalData Canada Inc*
Data and analytics
Data and analytics
Canada
Canada
77 King Street West,
Suite 400, Toronto
Ontario M5K 0A1, Canada
GlobalData Trading (Shanghai) Co Limited*
Data and analytics
China
Langbo Economic Research and Consulting
(Shenzen) Co Ltd*
Data and analytics
China
LMC Automotive Consulting (Shanghai) Co. Ltd*
Data and analytics
China
Room 368, Area 302, No.211,
North Fute Road, Pilot Free
Trade Zone, Shanghai, China
Unit 35, 13/f Gem Tower,
1306A, Xizhilang Building,
No.2022, Community Center
Road, Yuehai St, Nanshan
District, Shenzhen, China
Suite 1016J, 10th Floor,
Building 1, No. 1728-1746
West Nanjing Road, Jing’an
District, Shanghai, China
Lombard Street Research (Asia) Limited*
TS Lombard (Asia) Limited*
Data and analytics
Non-trading
China
Unit 4, 16/F, Bonham Trade
Centre, 50 Bonham Strand,
Sheung Wan, Hong Kong
134
ANNUAL REPORT AND ACCOUNTS 2022
Notes to the Consolidated Financial Statements
Subsidiary undertaking
Principal activity Country of registration
Registered address
ALF Insight Limited*
AROQ Limited*
Attentio Research Limited*
Canadean Limited
Current Intelligence and Analysis Limited*
Financial News Publishing Limited*
GlobalData Holding Limited
GlobalData Investments Limited*
GlobalData UK Limited*
GlobalData EBT Trustees Limited
Internet Business Group Limited
JBAD Limited*
Kable Business Intelligence Limited
LMC Automotive Forecasting Limited*
LMC Automotive Limited*
LMC International Limited*
LMC Oxford Holdings Limited*
LMC Tyre & Rubber Limited*
LMCA Holdings Limited*
LMCI Holdings Limited*
Lombard Street Research Limited*
Lombard Street Research Financial Services Limited*
Media Business Insight Limited*
Media Business Insight Holdings Limited*
Media Business Insight Trustee Limited*
Progressive Content Limited*
Progressive Digital Media (Holdings) Limited
Progressive Digital Media Limited
Progressive Media Group Limited*
Progressive Media Ventures Limited*
Progressive Ventures Limited*
Research Views Limited*
Sociable Data Limited*
Sportcal Global Communications Limited*
Trusted Sources Limited*
Trusted Sources UK Limited*
TSL Research Group Limited*
Verdict Media Limited*
World Market Intelligence Limited*
Data and analytics
Non-trading
Data and analytics
Data and analytics
Non-trading
Non-trading
Holding company
Non-trading
Data and analytics
Non-trading
Performance advertising
Non-trading
Non-trading
Data and analytics
Data and analytics
Data and analytics
Holding company
Data and analytics
Holding company
Data and analytics
Data and analytics
Data and analytics
Data and analytics
Holding company
Non-trading
Data and analytics
Holding company
Data and analytics
Non-trading
Holding company
Holding company
Holding company
Non-trading
Non-trading
Non-trading
Data and analytics
Holding company
Non-trading
Data and analytics
England & Wales
John Carpenter House,
John Carpenter Street,
London, EC4Y 0AN,
United Kingdom
GlobalData France SAS*
Data and analytics
France
133 bis Rue de l’Universite,
75007, Paris, France
GD Research Centre Private Limited*
Data and analytics
India
GlobalData Japan KK*
Data and analytics
Japan
3rd - 6th Floors,
Jyothi Pinnacle Building,
SY No.11, Kondapur Village,
Serilingampally Mandal,
Ranga Reddy Dist,
Hyderabad,
Telangana- 500081, India
Tokyo Club Building 11F,
3-2-6 Kasumigaseki,
Chiyoda-ku, Tokyo, Japan
ANNUAL REPORT AND ACCOUNTS 2022
135
Notes to the Consolidated Financial Statements
Subsidiary undertaking
Principal activity Country of registration
Registered address
Canadean Mexico Y Centro America, F. De R.L. De C.V*
Data and analytics
Mexico
GlobalData Poland sp. z o.o*
Data and analytics
Poland
GlobalData Pte Limited*
Data and analytics
Singapore
GlobalData Singapore Pte Limited*
Data and analytics
Singapore
Progressive Media Korea Limited*
Data and analytics
South Korea
LMC Automotive (Thailand) Company Limited*
Data and analytics
Thailand
MEED Media FZ LLC*
Data and analytics
United Arab Emirates
Global Data Publications, Inc
Data and analytics United States of America
LMC Automotive US Inc*
Data and analytics United States of America
Lombard Street Research (US), Inc
Data and analytics United States of America
Media Business Insight, Inc*
Data and analytics United States of America
* indirectly held
Avenida Ejército Nacional
769 Piso 2. Colonia Granada.
Alcaldía Miguel Hidalgo. CP
11520. Ciudad de México
ul. Grzybowska 2/29,
00-131, Warsaw, Poland
The Executive Centre
Singapore, Capital Square,
Level 7 Capital Square, 23
Church Street, Singapore
049481
133 Cecil Street,
#17-01A Keck Seng Tower,
Singapore 069535
37th Floor, ASEM Tower,
517 Yeongdong-daero,
Gangnam Gu, Seoul,
Republic of Korea
06164
66 Q. House Asoke Building,
Room no.1106, 11th floor,
Sukhumvit 21 Road,
Klongtoeynua, Watthana,
Bangkok 10110, Thailand
GBS Building, 6th Floor,
Dubai Media City, Dubai,
United Arab Emirates
441 Lexington Avenue,
2nd Floor, New York,
NY, 10017,
United States of America
2285 South Michigan Road,
Eaton Rapids,
Michigan 48827,
United States of America
15 E. North St. Dover,
Delaware 19901,
United States of America
6671, Sunset Blvd, Suite
1519, Los Angeles, CA 90028,
United States of America
136
ANNUAL REPORT AND ACCOUNTS 2022
Company Statement of Financial Position
31 December
31 December
Notes
5
4
7
12
8
8
9
6
11
11
10
6
11
Non-current assets
Property, plant and equipment
Intangible assets
Investments
Deferred tax assets
Trade and other receivables
Current assets
Trade and other receivables
Corporation tax receivable
Cash and cash equivalents
Total assets
Current liabilities
Trade and other payables
Short-term lease liabilities
Short-term borrowings
Non-current liabilities
Long-term derivative liability
Long-term provisions
Long-term lease liabilities
Long-term borrowings
Total liabilities
Net assets
Equity
Share capital
Treasury reserve
Cash flow hedge reserve
Retained earnings
Equity attributable to equity holders
2022
£m
23.4
2.0
205.7
1.5
210.4
443.0
33.8
9.1
0.3
43.2
486.2
(38.0)
(2.5)
-
(40.5)
(3.9)
(0.9)
(21.2)
(283.6)
(309.6)
(350.1)
136.1
0.2
(70.8)
(3.9)
210.6
136.1
2021
£m
26.4
0.9
201.6
-
-
228.9
196.6
5.6
-
202.2
431.1
(30.7)
(1.6)
(5.0)
(37.3)
-
(0.2)
(23.8)
(195.2)
(219.2)
(256.5)
174.6
0.2
(66.6)
-
241.0
174.6
These financial statements were approved by the Board of Directors on 27 February 2023 and signed on its behalf by:
Murray Legg
Chairman
Mike Danson
Chief Executive
The accompanying notes form an integral part of these financial statements.
Company profit for the year: £51.5m (2021: £27.5m).
Company number 03925319.
ANNUAL REPORT AND ACCOUNTS 2022
137
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
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e
s
e
r
r
e
h
t
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e
v
r
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e
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g
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h
w
o
fl
h
s
a
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v
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s
e
r
£m
£m
£m
£m
£m
£m
Balance at 1 January 2021
0.2
0.7
(21.4)
7.2
163.8
Total comprehensive income
Transactions with owners:
Dividends
Share buy-back
Vesting of share options
Bonus issue of shares
Capital reduction
Share-based payments charge
Balance at 31 December 2021
Total comprehensive income
Other comprehensive income:
Cash flow hedge – effective
portion of changes in fair value
Transactions with owners:
Dividends
Share buy-back
Vesting of share options
Share-based payments charge
-
-
-
-
171.0
(171.0)
-
0.2
-
-
-
-
-
-
Balance at 31 December 2022
0.2
-
-
-
-
-
(0.7)
-
-
-
-
-
-
-
-
-
-
-
(46.5)
1.3
-
-
-
(66.6)
-
-
-
(66.6)
62.4
-
(70.8)
-
-
-
-
-
-
-
-
(7.2)
(163.8)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
The accompanying notes form an integral part of these financial statements.
i
d
e
n
a
t
e
R
i
s
g
n
n
r
a
e
£m
54.3
27.5
(20.4)
-
(1.3)
-
171.7
9.2
241.0
51.5
y
t
i
u
q
e
l
a
t
o
T
£m
204.8
27.5
(20.4)
(46.5)
-
-
-
9.2
174.6
51.5
-
-
-
-
-
-
-
-
-
-
(3.9)
-
(3.9)
-
-
-
-
(3.9)
(23.6)
-
(62.4)
4.1
210.6
(23.6)
(66.6)
-
4.1
136.1
The Company distributable retained earnings as at 31 December 2022 was £82.8m (2021: £117.8m), comprising £210.6m retained earnings
and £70.8m treasury reserves which net to £139.8m, of which non-distributable elements are £51.9m share-based payment reserve and
£5.1m of non-distributable profits.
Note 24 within the Group Accounts provides an explanation of the movements in equity and reserves above for both the Group and the
Company.
138
ANNUAL REPORT AND ACCOUNTS 2022
Notes to the Company Financial Statements
1. GENERAL INFORMATION
Nature of operations
The principal activity of GlobalData Plc is as a holding company of subsidiary entities which are engaged in providing business information
in the form of high-quality proprietary data, analytics, and insights to clients in multiple sectors.
GlobalData Plc (‘the Company’) is a company incorporated in the United Kingdom (England & Wales) and listed on the Alternative Investment
Market, therefore is publicly owned and limited by shares. 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 has reviewed
forecast 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. Management has assessed that there are no critical
judgements or key estimates in relation to this Company.
2. ACCOUNTING POLICIES
a) Basis of preparation
The parent Company meets the definition of a qualifying entity under FRS 100 ‘Application of Financial Reporting Requirements’ issued by
the Financial Reporting Council; accordingly, the Company financial statements have been prepared under FRS 101 ‘Reduced Disclosure
Framework’.
As permitted by FRS 101, the Company has taken advantage of the disclosure exemptions available under that standard in relation to
share-based payment, financial instruments, capital management, presentation of comparative information in respect of certain assets,
presentation of a cash flow statement, standards not yet effective, impairment of assets, certain related party transactions, and certain
disclosure requirements in respect of leases.
As permitted by s408 of the Companies Act 2006, no separate statement of comprehensive income is presented in respect of the parent
Company. The profit attributable to the Company is disclosed in the footnote to the Company’s balance sheet.
b) Basis of 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
2022 and the additional policies described below.
c) Investments
Investments in subsidiaries are stated at cost less any provision for impairment.
d) Share-based payments
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.
ANNUAL REPORT AND ACCOUNTS 2022
139
Notes to the Company Financial Statements
3. DIVIDENDS
The final dividend for 2021 was 13.2 pence per share and was paid in April 2022. The total dividend for the current year is 26.0 pence per
share, with an interim dividend of 7.7 pence per share paid on 7 October 2022 to shareholders on the register at the close of business on 9
September 2022, and a final dividend of 18.3 pence per share which will be paid on 28 April 2023 to shareholders on the register at the close
of business on 31 March 2023. The ex-dividend date will be 30 March 2023.
4. INTANGIBLE ASSETS
Cost
As at 1 January 2022
Additions
As at 31 December 2022
Amortisation
As at 1 January 2022
Charge for the year
As at 31 December 2022
Net book value
As at 31 December 2022
As at 31 December 2021
5. PROPERTY, PLANT AND EQUIPMENT
Cost
As at 1 January 2022
Additions
As at 31 December 2022
Depreciation
As at 1 January 2022
Charge for the year
As at 31 December 2022
Net book value
As at 31 December 2022
As at 31 December 2021
The buildings category all relates to right-of-use assets.
Computer software
£m
6.1
1.5
7.6
(5.2)
(0.4)
(5.6)
2.0
0.9
Brand
£m
0.1
-
0.1
(0.1)
-
(0.1)
-
-
Buildings
Leasehold
improvements
Computer
equipment
£m
31.0
-
31.0
(6.5)
(2.2)
(8.7)
22.3
24.5
£m
1.3
-
1.3
(0.4)
(0.1)
(0.5)
0.8
0.9
£m
3.2
-
3.2
(2.2)
(0.7)
(2.9)
0.3
1.0
Total
£m
6.2
1.5
7.7
(5.3)
(0.4)
(5.7)
2.0
0.9
Total
£m
35.5
-
35.5
(9.1)
(3.0)
(12.1)
23.4
26.4
140
ANNUAL REPORT AND ACCOUNTS 2022
Notes 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 2022
31 December 2021
£m
2.5
21.2
23.7
£m
1.6
23.8
25.4
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 buildings
Motor vehicles
7
1
2 – 11 years
0 – 1 years
6 years
0 – 1 years
-
-
2
-
The lease liabilities are secured by the related underlying assets. Future minimum lease payments at 31 December 2022 were as follows:
As at 31 December 2022
Lease payments
Finance charges
Net present values
As at 31 December 2021
Lease payments
Finance charges
Net present values
Within one year
£m
3.2
One to five years
£m
10.6
After five years
£m
14.9
(0.7)
2.5
(2.7)
7.9
(1.6)
13.3
Within one year
£m
One to five years
£m
After five years
£m
2.5
(0.9)
1.6
11.2
(2.9)
8.3
17.6
(2.1)
15.5
Total
£m
28.7
(5.0)
23.7
Total
£m
31.3
(5.9)
25.4
At 31 December 2022 the Company had not committed to any leases which had not yet commenced, excluding those recognised as a lease
liability.
The Company sublets certain areas of its property portfolio. As at 31 December 2022, the Company had contracts with sub-tenants for the
following future minimum lease rentals:
31 December 2022
31 December 2021
Office buildings
Within one year
Within one to two years
Within two to three years
Within three to four years
Within four to five years
Over five years
ANNUAL REPORT AND ACCOUNTS 2022
£m
0.1
0.1
0.1
0.1
0.1
-
0.5
£m
0.2
0.2
0.2
0.2
0.2
1.1
2.1
141
Notes to the Company Financial Statements
7. INVESTMENTS
Cost
As at 1 January 2021
Share-based payments to employees of subsidiaries – Scheme 1
Share-based payments to employees of subsidiaries – Scheme 2
Increase in investment in subsidiary
As at 31 December 2021
Share-based payments to employees of subsidiaries – Scheme 2
Share-based payments to employees of subsidiaries – Scheme 4
As at 31 December 2022
Impairment
As at 31 December 2021 and 31 December 2022
Net book value
As at 31 December 2022
As at 31 December 2021
Group undertakings
£m
203.5
6.3
2.9
1.3
214.0
3.3
0.8
218.1
(12.4)
205.7
201.6
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 review
Management has performed an impairment review which entails making judgements including the expected rate of growth of sales,
margins expected to be achieved and the appropriate discount rate to apply when valuing future cash flows. The cash flow projections for
each statutory entity are based on each statutory entity’s 2022 profit before tax, with growth factors applied to cover the period 2023-
2027. 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 entity. A terminal value calculation has been determined post-2027 using a growth rate of
2% in accordance with long-term inflation forecasts.
Impairment indicators
In addition to the review described above, Management has 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. The assumptions applied within the value in use forecasts (revenue, cost
and terminal value growth rates and discount rate) are in line with the assumptions disclosed within the intangible asset impairment review
in note 13 of the Group accounts.
142
ANNUAL REPORT AND ACCOUNTS 2022
Notes to the Company Financial Statements
8. TRADE AND OTHER RECEIVABLES
Non-current
Amounts owed by group undertakings
Current
Prepayments
Other receivables
Amounts owed by group undertakings
Other taxation and social security
31 December 2022
31 December 2021
£m
£m
210.4
210.4
0.1
-
33.2
0.5
33.8
-
-
-
0.1
196.0
0.5
196.6
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.
The Company has reversed impairment provisions totalling £0.6m during the year in relation to balances owed by group undertakings.
Amounts owed by group undertakings are repayable upon demand and outstanding balances contain transactions including the following:
• Loans to group undertakings;
•
• Recharge of costs; and
• Cash pooling.
Inter-company interest receivable;
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.
9. TRADE AND OTHER PAYABLES
Trade payables
Accruals
Amounts owed to group undertakings
31 December 2022
31 December 2021
£m
0.5
3.9
33.6
38.0
£m
0.5
3.3
26.9
30.7
The Directors consider that 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.
ANNUAL REPORT AND ACCOUNTS 2022
143
Notes to the Company Financial Statements
10. PROVISIONS
As at 1 January 2022
Increase in provision
As at 31 December 2022
Current:
Non-current:
11. BORROWINGS
Short-term lease liabilities
Short-term borrowings
Current liabilities
Long-term lease liabilities
Long-term borrowings
Non-current liabilities
Dilapidations
Right-of-use assets
Dilapidations
Other
£m
0.1
-
0.1
-
0.1
£m
0.1
0.7
0.8
-
0.8
Total
£m
0.2
0.7
0.9
-
0.9
31 December 2022
31 December 2021
£m
2.5
-
2.5
21.2
283.6
304.8
£m
1.6
5.0
6.6
23.8
195.2
219.0
Term loan and RCF
On 5 August 2022, the Company successfully completed on a refinancing of external debt facilities. This resulted in full settlement of
the previously drawn-down position of £229.3m and draw down on the new term loan facility of £290.0m on 9 August 2022 resulting in
additional cash reserves for the Group. The settlement of the previously held loan qualified as a substantial modification and therefore in
accordance with IFRS9, the previous loan was derecognised from the statement of financial position, resulting in a credit to the income
statement of £2.8m.
The new facilities have been arranged to cover a period of three years. There are no fixed periodic capital repayments, with the full balance
being due for settlement when the facilities expire in August 2025. If the Group needed further debt funding in order to support M&A
activity, the new facility has an available revolving credit facility (RCF) to draw down upon totalling £120.0m. The term loan is syndicated
between 12 lenders and the RCF is syndicated between 13 lenders.
As at 31 December 2022, the Company had fully drawn down on the term loan of £290.0m. The Company has not drawn down on any of
the available RCF facility of £120.0m. Due to offsetting of loan fees paid as part of the refinancing process, the term loan is held on the
statement of financial position with a value of £283.6m.
Interest is currently charged on the term loan at a rate of 3.25% over the Sterling Overnight Index Average rate (SONIA) and is payable at the
end of each calendar quarter. As disclosed within note 16 to the Group accounts, the Company entered into an interest rate swap during
October 2022, with an effective date of 30 September 2022 based on a notional amount of £290.0m, which aligns to the current term loan
draw down. The agreement is to swap, on a calendar quarter basis, SONIA for a fixed rate of 4.9125%. The fair value of the hedging instrument
as at 31 December 2022 was a liability of £3.9m. The loss incurred has been recognised directly in the statement of changes in equity.
144
ANNUAL REPORT AND ACCOUNTS 2022
Notes to the Company Financial Statements
12. DEFERRED INCOME TAX
Balance brought forward
Tax income during the period recognised in profit or loss
Balance carried forward
The provision for deferred taxation consists of the tax effect of temporary differences in respect of:
Other temporary differences
Balance carried forward
Deferred tax asset
Deferred tax liability
Net position
31 December 2022
31 December 2021
£m
-
1.5
1.5
1.5
1.5
£m
(0.2)
0.2
-
-
-
31 December 2022
31 December 2021
£m
1.5
-
1.5
£m
-
-
-
The Finance Act 2021 increased the UK corporation tax rate from 19% to 25% effective 1 April 2023 for companies with profits in excess of
£250,000. The Company's deferred tax assets and liabilities have therefore been remeasured at the tax rates that are expected to apply to
the period when the asset is realised or the liability is settled.
The company has unrecognised tax losses of £0.6m (2021: £0.3m) that are indefinitely available for offsetting against future taxable profits.
If the Company were able to recognise all unrecognised deferred tax assets at the UK's pending statutory income tax rate of 25%, the profit
would increase by £0.1m (2021: £0.1m based on a rate of 19%).
13. RELATED PARTY TRANSACTIONS
Directors
The remuneration of the Directors of the Group and Company is set out on page 68 in the consolidated accounts of the Group within the
Directors Remuneration Report.
Accommodation
During 2021, we eliminated all related party landlord arrangements, following the sale of the John Carpenter and Essex Street properties by
the Estel Properties Group to third party landlords, and secondly, the surrender of the Hatton Garden lease by GlobalData. These transactions
all completed in the first half of 2021 and therefore charges during 2022 were £nil (2021: £0.8m).
In addition, GlobalData Plc sub-let office space to other companies owned by Mike Danson, but this also materially ceased during 2021 with
the exception of one property (the related party tenant exited as at 31 December 2022 and therefore no property transactions are expected
in 2023). The total sub-lease income for the year ended 31 December 2022 was £0.1m (2021: £0.4m).
Corporate support services
In 2022 net corporate support charges of £0.4m were charged from NS Media Group Limited (“NSMGL”), a related party by virtue of
common ownership (2021: £0.2m charge to NSMGL). The corporate support charges principally consist of shared IT support and software
development. The IT contracts have been recharged on a consistent basis to the previous year and are determined by headcount. The
shared software support is clearly segregated into separate GlobalData and NSMGL teams and the charges are based upon this segregation
with a benchmarked mark-up. The Group expects the related contracts to end in the first half of 2023, which will result in the elimination of
corporate support services transactions from the second half of 2023 onwards. The Group expects that shared software development and
support will also cease in 2023.
ANNUAL REPORT AND ACCOUNTS 2022
145
Bankers
NatWest Group
280 Bishopsgate
London
EC2M 4RB
Bankers
HSBC UK Bank Plc
1 Centenary Square
Birmingham
B1 1HQ
Registered number
Company No. 03925319
Advisers
Company Secretary
Bob Hooper
Head Office and Registered Office
John Carpenter House
John Carpenter Street
London
EC4Y 0AN
Tel: + 44 (0) 20 7936 6400
Nominated Adviser and Joint Broker
J.P. Morgan Cazenove
25 Bank Street
Canary Wharf
London
E14 5JP
Joint Broker
Panmure Gordon
One New Change
London
EC4M 9AF
Joint Broker
Numis Securities
45 Gresham Street
London
EC2V 7BF
Financial PR LLP
FTI Consulting
200 Aldersgate
Aldersgate Street
London
EC1A 4HD
Lawyers
Reed Smith
20 Primrose Street
London
EC2A 2RS
Auditor
Deloitte LLP
2 New St Square
London
EC4A 3BZ
Registrars
Link Group
10th Floor, Central Square
29 Wellington Street
Leeds
LS1 4DL
146
ANNUAL REPORT AND ACCOUNTS 2022
ANNUAL REPORT AND ACCOUNTS 2020
147
Head Office and Registered Office
John Carpenter House
John Carpenter Street
London
EC4Y 0AN
Tel: + 44 (0) 20 7936 6400