Acquisitions were the dominant driver of GlobalData’s (DATA) top-line momentum in the first half, although it should be noted that underlying organic growth came in at 9 per cent, or 13 per cent ignoring adverse currency fluctuations (particularly the US dollar) – a creditable result either way.
The information services provider made its largest ever purchase in April, buying Research Views Limited (RVL) for £97.3m – in turn gaining new exposure to the energy and financial services sectors, while extending its coverage within the healthcare, construction and consumer spaces. Management is confident of achieving £1m in annualised cost synergies over the next 12 months, although it's a rather ambitious target. GlobalData also bought MEED last December for $17.5m (£13.3m) – a premium business information content provider, focusing on infrastructure and projects in the Middle East.
Adding to the list of positives, GlobalData’s deferred revenues rose 40 per cent to £70.4m, bringing greater visibility. Meanwhile, adjusted cash profits rose 31 per cent to £14.6m: encouraging, although the associated margin was flat at 19.4 per cent, due to investments in group infrastructure and – again – foreign exchange movements, the vagaries of which, along with share-based payment charges and expenses tied to recent M&A activity, resulted in GlobalData swinging into a reported pre-tax loss. Indeed, the RVL deal lifted net debt from £43.1m in December, to £61.2m, resulting in higher finance costs.
Broker N+1 Singer expects adjusted pre-tax profits of £28.5m and EPS of 17.8p for 2018 (from £19m and 12.4p in 2017).
GLOBALDATA (DATA) | ||||
ORD PRICE: | 628p | MARKET VALUE: | £741m | |
TOUCH: | 605-650p | 12-MONTH HIGH: | 628p | LOW: 543p |
DIVIDEND YIELD: | 1.4% | PE RATIO: | na | |
NET ASSET VALUE: | 135p* | NET DEBT: | 38% |
Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
2017 ** | 56.8 | 0.2 | -0.4 | 3.0 |
2018 | 75.0 | -4.2 | -4.3 | 3.5 |
% change | +32 | - | - | +17 |
Ex-div: | 30 Aug | |||
Payment: | 3 Oct | |||
*Includes intangible assets of £267m, or 226p a share. **2017 numbers restated |