GlobalData Regulatory News (DATA)

31 July 2023

GlobalData Plc

Half Year Results

30 June 2023

GlobalData Plc (AIM: DATA), a leading data, analytics, and insights platform, today publishes its results for the half year ended 30 June 2023 (HY 2023).

· Outperforming our Growth Optimisation Plan objectives to date, driven by high growth and high margin

· Strong trading performance during HY 2023 with revenue growth of 21% and underlying growth1 of 8%

· Adjusted EBITDA1 growth of 37% and further margin expansion to 39% (HY 2022: 35%)

· Statutory profit before tax grew by 59% to £23.9m (HY 2022: £15.0m)

· On track to deliver our goal of being a 'Rule of 50'2 company

· Expect to deliver results in line with increased market expectations3 for FY 2023

Highlights

Financial results for the six months ended 30 June 2023.

Mike Danson, Chief Executive Officer of GlobalData Plc, commented:

"GlobalData has delivered another period of strong revenue, profit and margin performance during the first half and we are outperforming our Growth Optimisation Plan objectives to date. Comparing to HY 2020, we have effectively doubled our Adjusted EBITDA and increased margin by 8pts demonstrating significant progress in that time.

We continue to leverage our proven One Platform and invest in our proprietary data and technology, and we are particularly excited by the opportunities we see to leverage our proprietary datasets and domain expertise with new AI technology. We have a clear roadmap focused on improving platform usability, driving greater automation, developing new products, and enhancing our internal processes.

We have clear visibility on full year revenues and a strong business model that is delivering sustained growth. We enter the second half with continued momentum and remain focused on executing our long-term compounding Growth Optimisation Plan."

Financial Highlights 

· Strong growth in both revenue and Adjusted EBITDA nearing our 'rule of 50' goal

· Total revenue growth of 21%, supported by acquisitions and currency tailwinds as well as underlying revenue growth of 8%

· Invoiced Forward Revenue of £122.9m at 30 June 2023 increased by 7% (HY 2022: £114.6m) which reflected underlying growth of 9%, providing confidence for H2

· Adjusted EBITDA up 37% to £53.5m (HY 2022: £39.0m)

· Adjusted EBITDA margin improvement of 4 percentage points to 39% reflecting the operating leverage and fixed cost base inherent in GlobalData's business model 

· Statutory PBT grew by 59% to £23.9m (HY 2022: £15.0m) reflecting strong trading performance

· Operating cash flow grew by 12% to £63.0m (HY 2022: £56.1m) which was 118% of Adjusted EBITDA (HY 2022: 144%)

· Strong free cash flow1 generation of £43.9m (HY 2022: £42.8m)

· Reduction in net bank debt leverage to 2.3x (FY 2022: 2.9x) and total net bank debt of £230.8m at 30 June 2023 which reflects a reduction of £18.8m in the six months since 31 December 2022

· Interim dividend of 1.4p, up 27% (HY 2022: 1.1p), based upon number of shares post-reorganisation share structure which completed after the balance sheet date on 25 July 2023 (see note 15)

Operational Highlights

· Continued strong execution of our Growth Optimisation Plan outperforming our objectives to date. Our four key pillars are:

o  Customer Obsession, World-Class Product, Sales Excellence, Operational Agility

· Average Client Value (>£20k) increased by 4% to £75,800 (HY 2022: £73,100) reflecting a combination of more seats and products taken by clients as well as price increases

· M&A - Integration and performance of Media Business Insight (MBI) and TS Lombard on track; maintaining disciplined approach to acquisition opportunities

· Clear AI roadmap - continued investment in AI-related technologies to improve platform usability, drive greater automation, develop new product and enhance internal processes including customer insights and sales

Outlook

· Set to deliver strong and resilient growth as uncertainty continues to drive demand for our 'gold standard' data, delivered through our One Platform

· Following a strong first half performance and continued momentum into H2 we remain on track to deliver results in line with increased market expectations for FY 2023. We maintain our ambition of double-digit underlying revenue growth.

-ENDS-

Note 1: Defined in the explanation of non-IFRS measures on page 13

Note 2: 'Rule of 50': Investment concept which scores businesses by adding their underlying revenue growth to their Adjusted EBITDA margin

Note 3: Market expectations: Based upon company compiled consensus estimates for revenue (range £275.8m-£279.3m) and Adjusted EBITDA (range £109.6m - £114.7m). More detail https://investors.globaldata.com/shareholder-centre/analyst-consensus

Note 4: The prior period comparatives for reported EPS, adjusted EPS and dividends have been restated to reflect the impact of the share-split, which completed after the balance sheet date on 25 July 2023 (see note 15).

ENQUIRIES

Notes to Editors 

About GlobalData Plc

GlobalData Plc (AIM: DATA) is a leading data, analytics, and insights platform for the world's largest industries. Our mission is to help our clients decode the future, make better decisions, and reach more customers. 

One Platform Model 

GlobalData's One Platform model is the foundation of our business and is the result of years of continuous investment, targeted acquisitions, and organic development. This 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 unique data, expert analysis, and innovative solutions into an integrated suite of client solutions and digital community platforms, designed to serve a broad range of industry markets and customer needs on a global basis. The operational leverage this provides means we can respond rapidly to changing customer needs and market opportunities, and continuously manage and develop products quickly, at scale, with limited capital investment as well as providing unique integration opportunities for M&A.

Strategic Priorities  

GlobalData's four strategic priorities are: Customer Obsession, World-Class Product, Sales Excellence and Operational Agility.

Growth Optimisation Plan 

GlobalData's Growth Optimisation Plan is a set of initiatives designed to drive revenue growth and profitability. The Plan's initiatives operate across all of GlobalData's operations but are organised around the strategic priorities noted above. 

INTRODUCTION

At GlobalData we are on a mission to help our clients to decode the future, make better decisions, and reach more customers. We provide services across a wide breadth of industries and functions, on a global scale via our One Platform. We have a clear philosophy of owning our own data and intellectual property, as well as seeking to be a long-term strategic partner to our clients, by serving their critical activities with our differentiated 'gold standard' product.

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.

The data and 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 at least 12 months access. The visible and recurring revenue base creates a resilient business model, with subscriptions making close to 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 data and insights.

GlobalData's client base is globally diversified, which reflects our globally relevant data assets and gives the Group significant market opportunity.

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. With multiple levers for growth, supplemented with M&A activity, we are over-delivering on the Plan via four key pillars:

1. Customer Obsession

2. World-Class Product

3. Sales Excellence

4. Operational Agility

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.

The Group assesses potential M&A targets and looks for the same business model characteristics in its targets, such as high quality product/ services and high volume renewal rates, which enables greater alignment and integration opportunities. 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.

Our objective is to achieve long-term compounding growth and maximise shareholder returns. We use an investment concept which scores the business by adding its underlying revenue growth to its Adjusted EBITDA margin. Our ambition as set out in our FY 2022 Results is to exceed 50, i.e. 'rule of 50'.

HALF YEAR REVIEW TO 30 JUNE 2023

During the first half we delivered another period of profitable growth while continuing to invest in a number of initiatives to secure future growth. Strong organic growth was complemented by the impact of last year's acquisitions of MBI and TS Lombard, and we delivered a significant uplift in our margin.

The Group reported revenue of £135.9m (HY 2022: £111.9m), up 21% of which 8% was underlying growth. Operating profit grew by 53% to £36.9m (HY 2022: £24.1m) and Adjusted EBITDA increased by 37% to £53.5m (HY 2022: £39.0m). The growth in Adjusted EBITDA was driven by profitable revenue growth, delivering a high incremental margin as a result of our relatively fixed cost base. Adjusted EBITDA margin of 39%, reflected a 4 percentage points gain versus the previous year (HY 2022: 35%). Combining our underlying revenue growth rate of 8% and the Adjusted EBITDA margin of 39% we are nearing our goal of achieving the 'rule of 50'.

We maintained our focus on price during the half to better reflect the increasing value of our data, analytics and insights to our customers. During the half, Average Client Value of our larger clients (>£20k) increased by 4% to £75,800 (HY 2022: £73,100) reflecting a combination of selling additional seats and products to existing clients, as well as price increases. We see further opportunities ahead to align our pricing structure to the increased value we are delivering, especially for our more recently acquired businesses.

We continue to see strong customer demand for our data, analytics, and insights as clients navigate both an uncertain macro environment and disruptive themes such as artificial intelligence, climate change, regulatory and geo-political change, which is also reflected in strong new business pipeline.

Our customer proposition is strong and as we continue to embrace emerging AI-related technologies we are excited about the opportunity to improve usability and drive even greater customer engagement.

Our growth was also supported by recent acquisitions, MBI and TS Lombard, which were acquired in June and August of 2022 respectively. MBI has been fully integrated and TS Lombard is nearing full integration. Both businesses are trading in line with our plans.

We continue to pursue strategic M&A for new gold standard data assets to integrate into our One Platform model. During the first half no further acquisitions were made but we continue to assess a pipeline of acquisition opportunities and remain disciplined in our approach to M&A.

Well positioned to leverage new AI technologies 

We have a track record of embracing emerging technology and we have been consistently investing in Machine Learning and AI technologies since 2017. Today we have approximately 250 data scientists globally supporting our 2,000 researchers and analysts and 100 journalists.

The AI landscape is moving quickly and we are excited about the opportunities that Generative AI brings when we combine our proprietary datasets with increasingly powerful technology. By harnessing the latest AI technologies we are improving usability for customers, increasing automation and creating efficiencies, developing new products faster and improving our internal processes. In particular, by making it easier for customers to use our proprietary data and insights we expect stronger customer engagement. Our One Platform model means we are uniquely positioned to leverage the benefits of Generative AI across all of our industry coverage. We are using AI to improve our internal processes through, for example, real-time customer health insights and more personalised sales processes.

Our deep proprietary data, with rich history and heritage remains the key barrier to entry for new entrants and cannot be replicated with just the use of generative AI. Controlling access to our proprietary data is key and therefore managing the risks around data management, client usage and cyber security remain a key priority.

We have a clear AI roadmap focused on the four areas of usability, automation, new products and internal processes all of which support our Growth Optimisation Plan.

Delivering our Growth Optimisation Plan

Our 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. Since we launched our plan we have made excellent progress and are outperforming our objectives to date. The following section provides an update on each of the four pillars.

1) Customer Obsession

Customer Obsession remains our number one 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.

We are committed to ensuring the stages of our customer lifecycle are seamless and have recently conducted a review of this key process to further enhance collaboration, onboarding, retention and growth. We continue to optimise our processes through a mix of AI, multidisciplinary teams and a consistent framework. Our customer engagement intelligence is providing us with increasingly specific recommendations for clients so we can be more targeted with support and service and strengthen customer loyalty.

2) World-Class Product

We continue to invest in World-Class Product enabling us to offer our clients 'gold standard' data. Our proprietary data and insights are generated by more than 800 analysts, 1,200 researchers and 100 journalists, supported by 250 data scientists across 20 different industries. Our One Platform empowers the world's largest 20 industries and is highly scalable.

During the half we continued to invest in product development including the use of AI software, workflow enhancements, user tools, platform development and new content. Enhancements to our Intelligence Center included:

· Launch of new Themes proposition across all Intelligence Centers, including significantly improved macro themes coverage provided by TS Lombard

· New global market datasets including energy transition, Foreign Direct Investments (FDI), ESG and ecommerce marketplaces

· Significant expansion of AI coverage

We also launched new tools including Generative AI search functionality on our Intelligence Center allowing users to ask natural language questions. In addition, we have also launched a new Sales Intelligence product to help clients plan, target, create and engage their customers, as well as a new Competitive Intelligence tool to better track and compare competitor activity.

As well as our commitment to continuous organic investment in our product, the recent acquisitions of Life Sciences, LMC, MBI and TS Lombard have all added high value data and insights to our platform.

We continue to expand our routes to market via 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.

3) Sales Excellence

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 (>£20k) from 83% to over 90%, through increasing client engagement and enhancing client and user experience.

During the first half, in addition to selling more seats and product to existing customers, we had a net increase in the number of larger clients (>£20k) to 2,700 (HY 2022: 2,473), a year on year increase of 9%. We remain focused on pricing amongst our smaller clients, as a result the overall number of clients is broadly consistent with HY 2022, but importantly our value renewal rate continues to be close to 100%. Our Invoiced Forward Revenue position and new business pipeline remain healthy, and we are investing in new sales roles in the second half of the year.

We are increasingly using AI-driven tools across a number of areas to retain existing clients and grow our partnerships as well as win new clients. We use AI tools to monitor the health of our client relationships, to help coach our sales teams, to personalise the selling process and to increase co-ordination across our teams.

We continue to see a significant opportunity to add greater value to our existing clients, including via sales synergies in acquired businesses. Our addressable market is substantial. We believe there are 125,000 client opportunities (versus our 4,700 existing customers), with significant latent growth potential in the US and professional services markets.

4) Operational Agility

Maintaining our entrepreneurial culture and operational agility is key to achieving our growth potential. While maintaining a disciplined approach to cost we continue to invest for growth in areas such as product development and technology.

From an M&A perspective we continue to assess a healthy pipeline of acquisition opportunities and remain disciplined in our approach to M&A. GlobalData has a three-year £410.0m debt financing facility (secured in August 2022) which provides 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 however on 3 April 2023 the Group voluntarily repaid £25.0m resulting in the current term loan drawdown of £265.0m. The term loan was used in part to repay existing indebtedness of £229.2m. The facility also comprises a Revolving Credit Facility ("RCF") of £120.0m which is currently undrawn, but will be used to support long-term growth of the business, including M&A.

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. Operational KPIs reference sales orders rather than revenue and therefore impact both revenue recognised in the year as well as Invoiced Forward Revenue. As at 30 June 2023, the total number of clients (>£5,000 spend) was 4,739 (HY 2022: 4,814). Clients spending more than £20,000 represented 2,700 clients (HY 2022: 2,473) and ~77% of Group revenues.

Robust performance in underlying operational KPIs helped deliver 8% underlying revenue growth and 9% growth in underlying Invoiced Forward Revenue. Volume renewal rates for clients spending over £20,000 was broadly consistent with HY 2022. The Group continued to demonstrate strong pricing power, as well as selling more licences and product to its existing client base. This resulted in a value renewal rate for clients spending over £20,000 of nearly 100%.

The operational KPIs are defined and calculated as:

· 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.

Outlook

We are well positioned to maintain strong and resilient growth, as uncertainty continues to drive demand for our 'gold standard' data. Following a strong first half performance and continued momentum into H2, we remain on track to deliver results in line with increased market expectations for FY 2023. We maintain our ambition of double-digit underlying revenue growth.

FINANCIAL REVIEW

1 Defined in the explanation of non-IFRS measures on page 13.

2 The prior period comparatives on basic and diluted earnings per share on both a reported and an adjusted basis have been restated to reflect the impact of the share-split, which completed after the balance sheet date on 25 July 2023 (see note 15).

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 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.

Revenue

Revenue grew by 21% to £135.9m driven from underlying growth of 8% and aided by revenue from recent M&A and the benefit of currency gains (HY 2022: £111.9m). On an underlying basis, subscriptions (representing 78% of revenue) grew by 8% underpinned by consistent renewal rates, strong pricing and client contract growth as well as new business wins.

Invoiced Forward Revenue

Invoiced Forward Revenue grew from £114.6m as at 30 June 2022 to £122.9m as at 30 June 2023. Invoiced Forward Revenue is a major component of our significant revenue visibility for the forthcoming period.

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 period increased revenue by £5.1m, which mainly reflected Sterling weakness against US Dollar (average rate: HY 2023: 1.22, HY 2022: 1.31).

As at the balance sheet date 30 June, Sterling strengthened versus US Dollar versus its position in the previous year and therefore its impact reduced Invoiced Forward Revenue by £1.9m. Cost inflation as a result of currency movements offset the gain in the year and impacted the results by £1.4m. The full impact of currency on Adjusted EBITDA was an increase of £3.7m.

1 Net operating costs is defined as operating expenses, losses on trade receivables and other income excluding depreciation, amortisation of software and adjusting items (see note 6).  

2 Defined in the explanation of non-IFRS measures on page 13.

3 The underlying growth of Invoiced Forward Revenue was 9%. Due to timing differences of ~£4m invoicing after the balance sheet date, the calculated constant currency is 7%.

Profit before tax

Profit before tax for the year grew by £8.9m to £23.9m (HY 2022: £15.0m), which reflects the operating leverage which has driven an increase in Adjusted EBITDA of £14.5m to £53.5m (HY 2022: £39.0m), partly offset with increases in finance and other operating costs.

Adjusted EBITDA

Adjusted EBITDA increased by 37% to £53.5m (HY 2022: £39.0m). The growth in Adjusted EBITDA was driven by our strong revenue growth and our ability to control our 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 adjusted EBITDA margin increased by 4 percentage points to 39% (HY 2022: 35%).

Finance costs

Net finance costs have increased by £3.9m to £13.0m (HY 2022: £9.1m), including IFRS16 leases interest cost of £0.6m (HY 2022: £0.7m). The cash paid in interest in HY 2023 was £12.1m (HY 2022: £4.4m).

This reflects the increase in average drawn debt in 2023 compared with 2022, which funded the M&A activity and purchase of own shares in 2022, 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 recognises 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. Undrawn debt carries interest at one third of the prevailing margin.

Adjusting items

Adjusting items (detailed in note 6) increased by £1.6m in total. Significant individual movements include:

· The share-based payment charge has increased from £1.4m to £9.7m, which mainly reflects the increased charge as a result of the modification of the scheme targets from Total Shareholder Returns ("TSR") to Adjusted EBITDA on 30 November 2022. Details of this modification can be found in the Annual Report and Accounts for the year ended 31 December 2022.

· There were also 12.6m new options granted (based upon post-reorganisation share structure which completed after the balance sheet date on 25 July 2023 (see note 15)) in the first half across both schemes 2 and 4, which increased the H1 charge by £2.2m.

· Revaluation gain on short- and long-term derivatives and unrealised operating foreign exchange contributed a total gain in the first half of £3.4m (HY 2022 £3.0m loss). This is a result of fluctuations in currency exchange rates, mainly driven by US Dollar.

· Contingent consideration costs of £1.0m were incurred in relation to the acquisition of MBI (HY 2022: £nil).

Leases

Within our operating costs, depreciation in relation to right-of-use assets was £2.5m (HY 2022: £2.5m). Other income, in relation to sub-let income on right-of-use assets was £nil (HY 2022: £0.1m). Our net finance costs include interest of £0.6m in relation to lease liabilities (HY 2022: £0.7m).

Taxation

The interim period income tax expense has been calculated using the forecast effective tax rate that would be applicable to expected total annual earnings, i.e. the estimated average annual effective income tax rate applied to the pre-tax income of the interim period. To the extent practicable, where different income tax rates apply to different categories of income, a separate rate has been used for each individual category of interim period pre-tax income. 

Using this approach, the overall annual effective income tax rate is currently forecast to be 26.5% (HY 2022: 22.2%). This broadly represents the blended corporation tax rate for FY 2023 in the UK of 23.5% adjusted for the higher rates of overseas tax in the jurisdictions where the Group operates (1%) and expenses which are not deductible for tax purposes (2%).

Post balance sheet event

Pursuant to a capital reorganisation exercise undertaken on 25 July 2023, the Company issued nine ordinary shares to increase the number of ordinary shares in issue to 118,303,878 (nominal value £0.000714 per share). All existing ordinary shares were then consolidated, based on 1 consolidated share for every 14 existing ordinary shares, and subdivided, based on 100 new ordinary shares for every 1 consolidated share. Post-reorganisation, there were 845,027,700 ordinary shares in issue (nominal value £0.0001 per share) which were admitted to AIM and commenced dealing on 26 July 2023.

Earnings per share

Basic EPS was 2.2 pence per share (HY 2022: 1.3 pence per share). Diluted EPS was 2.2 pence per share (HY 2022 restated: 1.2 pence per share).

Adjusted EPS grew from 2.9 pence per share to 3.4 pence per share, representing 17% growth. Adjusted diluted EPS grew from 2.6 pence (restated) per share to 3.4 pence per share, representing 31% growth.

The prior period comparatives on basic and diluted earnings per share on both a reported and an adjusted basis have been restated to reflect the impact of the share-split.

The earnings per share results based upon the post-reorganisation share structure have been compared against earnings per share results based on the share structure existing as at 30 June 2023 below:

Dividends

We are pleased to declare an interim dividend of 1.4 pence per share (HY 2022 restated: 1.1 pence), an increase of 27%, consistent with our progressive dividend policy. The interim dividend will be paid on 6 October 2023 to shareholders on the register at the close of business on 8 September 2023. The ex-dividend date will be on 7 September 2023.

The dividends per share based upon the post-reorganisation share structure have been compared against dividends per share based on the share structure existing as at 30 June 2023 below:

Reconciliation of net bank debt

The Group defines net bank debt as short- and long-term borrowings less cash and cash equivalents. The amount excludes items related to leases.

A reconciliation of cash generated from operations, free cash flow and opening and closing net bank debt is set out below.

1Reflects 12 month rolling Adjusted EBITDA results. £100.9m reconciles as H2 2022 (£47.4m) and H1 2023 (£53.5m), £72.7m reconciles as H2 2021 (£33.7m) and H1 2022 (£39.0m).

Cash generated from operations grew by 12% to £63.0m (HY 2022: £56.1m), representing 118% of Adjusted EBITDA (HY 2022: 144%). We typically expect operating cash flow to be in excess of 100% of Adjusted EBITDA over the full financial year.

Capital expenditure was £1.9m during the period (HY 2022: £1.2m). Capital expenditure represented 1.4% of revenue (HY 2022: 1.1%).

After increased interest paid of £12.1m (HY 2022: £4.4m), offset by reduced taxes paid in the period, Free Cash Flow increased by 3% to £43.9m which represented 120% of Adjusted Profit Before Tax (HY 2022: 142%).

Year on year, net bank debt increased to £230.8m as at 30 June 2023 (30 June 2022: £190.5m). Net bank debt to Adjusted EBITDA leverage at 30 June 2023 was 2.3x, down from 2.6x last year and down from 2.9x as at 31 December 2022, demonstrating the Group's ability to de-lever in the absence of M&A and share buy-backs. We have a clear capital allocation policy to operate within 2-3x net bank debt leverage, in relation to Adjusted EBITDA. The Group reviews leverage on a look forward basis and the high degree of visibility it has on its revenue and free cash generation gives the Group comfort in its ability to de-lever reasonably quickly.

Explanation of non-IFRS Measures

Responsibility Statement

We confirm that to the best of our knowledge:

a) the consolidated interim financial statements have been prepared in accordance with the United Kingdom adopted International Accounting Standard 34, "Interim Financial Reporting";

b) the consolidated interim financial statements, which have been prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the issuer, or the undertakings included in the consolidation as a whole as required by DTR 4.2.4R;

c) the interim management report includes a fair review of the information required by DTR 4.2.7R, namely;

i. an indication of important events that have occurred during the first six months of the financial year and their impact on the consolidated interim financial statements; and

ii. a description of the principal risks and uncertainties for the remaining six months of the financial year.

d) the interim management report includes, as required by DTR 4.2.8R, a fair review of material related party transactions that have taken place in the first six months of the financial year and any material changes in the related-party transactions described in the Annual Report and Accounts for the year ended 31 December 2022 that could have a material effect on the financial position or performance of the enterprise in the first six months of the current financial year.

Approved by the Board on 31 July 2023 and signed on its behalf by:

Mike Danson

Chief Executive

Independent review report to GlobalData Plc

Conclusion

We have been engaged by the Company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2023 which comprises the consolidated income statement, consolidated statement of comprehensive income, consolidated statement of financial position, the consolidated statement of changes in equity, the consolidated statement of cash flows and related notes 1 to 15.

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2023 is not prepared, in all material respects, in accordance with United Kingdom adopted International Accounting Standard 34 and the AIM Rules of the London Stock Exchange.

Basis for Conclusion 

We conducted our review in accordance with International Standard on Review Engagements (UK) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Financial Reporting Council for use in the United Kingdom (ISRE (UK) 2410). A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

As disclosed in note 1, the annual financial statements of the group will be prepared in accordance with United Kingdom adopted international accounting standards. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with United Kingdom adopted International Accounting Standard 34, "Interim Financial Reporting".

Conclusion Relating to Going Concern

Based on our review procedures, which are less extensive than those performed in an audit as described in the Basis for Conclusion section of this report, nothing has come to our attention to suggest that the directors have inappropriately adopted the going concern basis of accounting or that the directors have identified material uncertainties relating to going concern that are not appropriately disclosed.

This conclusion is based on the review procedures performed in accordance with this ISRE (UK) 2410, however future events or conditions may cause the entity to cease to continue as a going concern.

Responsibilities of the directors

The directors are responsible for preparing the half-yearly financial report in accordance with the AIM rules of the London Stock Exchange.

In preparing the half-yearly financial report, the directors are responsible for assessing the group'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 company or to cease operations, or have no realistic alternative but to do so.

Auditor's Responsibilities for the review of the financial information

In reviewing the half-yearly financial report, we are responsible for expressing to the group a conclusion on the condensed set of financial statement in the half-yearly financial report. Our conclusion, including our Conclusions Relating to Going Concern, are based on procedures that are less extensive than audit procedures, as described in the Basis for Conclusion paragraph of this report.

Use of our report

This report is made solely to the company in accordance with ISRE (UK) 2410. Our work has been undertaken so that we might state to the company those matters we are required to state to it in an independent review 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, for our review work, for this report, or for the conclusions we have formed.

Deloitte LLP

Statutory Auditor

London, England

31 July 2023

Consolidated Income Statement

The accompanying notes form an integral part of this financial report.

The earnings per share prior period comparatives have been restated to reflect the impact of the share-split, which completed after the balance sheet date on 25 July 2023 (see note 15) on basic and diluted earnings per share.

Consolidated Statement of Comprehensive Income

The accompanying notes form an integral part of this financial report.

Consolidated Statement of Financial Position

The accompanying notes form an integral part of this financial report.

Consolidated Statement of Changes in Equity

The accompanying notes form an integral part of this financial report.

Consolidated Statement of Cash Flows

The accompanying notes form an integral part of this financial report.

Notes to the Interim 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 interim financial statements are for the six months ended 30 June 2023. They have been prepared in accordance with United Kingdom adopted International Accounting Standard 34, "Interim Financial Reporting". They do not include all of the information required for full annual financial statements and should be read in conjunction with GlobalData Plc's audited financial statements for the year ended 31 December 2022.

The financial information for the year ended 31 December 2022 set out in this interim report does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. The Group's statutory financial statements for the year ended 31 December 2022 have been filed with the Registrar of Companies and can be found on the Group's website www.globaldata.com. The independent auditors' report on the full financial statements for the year ended 31 December 2022 was unqualified and did not contain an emphasis of matter paragraph or any statement under section 498 of the Companies Act 2006.

These interim financial statements have been prepared on the historical cost basis, except for derivative financial instruments, which are measured at fair value.

The interim financial statements are presented in Pounds Sterling (£), which is also the functional currency of the Company. These interim financial statements have been approved for issue by the Board of Directors.

Critical accounting estimates and judgements

When preparing the Interim Financial Statements, the Group makes a number of estimates, judgements and assumptions regarding the future. Estimates, judgements and assumptions are frequently 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 judgements, estimates and assumptions applied in the Interim Financial Statements, including the key sources of estimation uncertainty, were the same as those applied in the Group's last annual financial statements for the year ended 31 December 2022.

Principal and emerging risks and uncertainties

The Directors consider that the principal and emerging risks and uncertainties facing the Group as at 30 June 2023, and looking forwards into H2 2023, are consistent with those reported within the Strategic Report of the annual financial statements for the year ended 31 December 2022. The key risks identified were as follows:

· Business and strategic risks: Product; People and Succession; Competition and Clients; Economic and Global Political Changes; Acquisition and Disposal Risk

· Operational risks: Financial; Loss, Misuse or Theft of Proprietary, Employee or Client Data; IT, Cyber and Systems Failure; Regulatory Compliance

We are a data, analytics, and insights 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.

Going concern

The Group has closing cash of £28.1m as at 30 June 2023 (31 December 2022: £34.0m) and net bank debt of £230.8m (31 December 2022: £249.6m), being cash and cash equivalents less short- and long-term borrowings, excluding lease liabilities. The Group has an outstanding term loan of £265.0m which is syndicated with 12 lenders. As at 30 June 2023, the Group had an 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 £63.0m in cash from operations during the period ended 30 June 2023 (30 June 2022: £56.1m). 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 period ended 30 June 2023. 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 announcement of the interim financial statements. The Group has ample headroom in relation to the financial covenants in place and no breach is forecast. 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 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) new business subscription sales being lower than expectation (ii) consulting revenues being lower than expectation and (iii) both scenarios combined. There remains headroom on the covenants under each scenario and cash remained in excess of £20.0m 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 group financing arrangements, provide ample liquidity. Accordingly, the Directors have prepared the interim financial statements on a going concern basis.

2. Accounting policies

This interim report has been prepared based on the accounting policies detailed in the Group's financial statements for the year ended 31 December 2022, which have been applied consistently. The annual financial statements of the Group are prepared 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.

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 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.

Adjustments are made in respect of:

3. Taxation

Income tax on the profit or loss for the period comprises current and deferred tax. 

Current tax is the expected tax payable on the taxable income for the period, using rates substantively enacted at the reporting date, and any quantifiable 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 substantively enacted by the reporting date and are expected to apply when the deferred tax liability is settled or the deferred tax asset is realised.

Tax is recognised in the income statement for interim reporting purposes using the tax rate that would be applicable to expected total annual earnings, being the estimated average annual effective income tax rate applied to the pre-tax income of the interim period. To the extent practicable, a separate estimated average annual effective income tax rate is determined for each tax jurisdiction and applied individually to the interim period pre-tax income of each jurisdiction. Similarly, if different income tax rates apply to different categories of income (such as capital gains), to the extent practicable, a separate rate is applied to each individual category of interim period pre-tax income.

4. Segment 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:

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.

As subscriptions are typically for periods of 12 months the majority of deferred revenue held at the balance sheet date will be recognised in the income statement in the following 12 months. As at 30 June 2023, £1.0m (31 December 2022: £1.1m) of the deferred revenue balance will be recognised beyond the next 12 months. 

In instances where the Group enters into transactions involving a range of the Group's services, for example a subscription and custom research, the total transaction price for a contract is allocated amongst the various performance obligations based on their relative stand-alone selling prices.

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

1. Middle East & North Africa

5. Operating profit

Operating profit is stated after the following expenses relating to continuing operations:

6. Adjusting items

The adjustments made are as follows:

· The share-based payments charge is in relation to the 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. 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 is determined by the Black-Scholes method.

· The revaluation of short- and long-term derivatives relates to movement in the fair value of the short- and long-term derivatives.

· 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.

· The M&A costs incurred during the period consist of integration costs in relation to recent acquisitions, including redundancy costs and system migration costs.

· Restructuring relates to professional fees incurred in relation to group reorganisation projects.

· 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 period, and professional fees incurred in advice obtained relating to the restructure of existing schemes.

· Refinancing costs during H1 2022 consisted of legal fees incurred in relation to the extension of the previously held term loan and RCF by one year (completed during June 2022).

7. Net finance costs

8. 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.

Pursuant to a capital reorganisation exercise undertaken on 25 July 2023, the Company's existing 118,303,869 ordinary shares in issue (nominal value £0.000714 per share) were consolidated, based on 1 consolidated share for every 14 existing ordinary shares, and then subdivided, based on 100 new ordinary shares for every 1 consolidated share. Post-reorganisation, there were 845,027,700 ordinary shares in issue (nominal value £0.0001 per share) which were admitted to AIM and commenced dealing on 26 July 2023.

The prior period comparatives have been restated to reflect the impact of the share-split on basic and diluted earnings per share.

The earnings per share results based upon the post-reorganisation share structure have been compared against earnings per share results based on the share structure existing as at 30 June 2023 within note 15. The earnings per share presented below is based upon the post-reorganisation share structure:

Reconciliation of basic weighted average number of shares to the diluted weighted average number of shares:

The diluted earnings per share calculation does not include performance-related share options where the performance criteria had not been met in the period, in accordance with IAS 33. The table below shows the number of share options which could become dilutive should future performance criteria be met (all in new money):