TIDMGBG
RNS Number : 9385T
GB Group PLC
30 November 2021
Embargoed until 7.00 a.m. 30 November 2021
GB GROUP PLC
("GBG", the "Group" or the "Company")
HALF YEAR RESULTS FOR THE SIX MONTHSED 30 SEPTEMBER 2021
Strong underlying growth and cash flow, significant strategic
and operational progress
GB Group plc (AIM: GBG), the experts in digital location,
identity and identity fraud software, announces its unaudited
results for the six months ended 30 September 2021.
Financials
2021 2020 Growth(2)
Revenue GBP109.2m GBP103.5m 5.4%
Organic constant currency revenue GBP108.7m GBP96.6m 12.6%
Operating profit GBP14.8m GBP15.7m (5.2%)
Adjusted operating profit (1) GBP27.8m GBP26.8m 3.5%
Adjusted operating margin (1) 25.5% 25.9% (40bps)
Profit before tax GBP14.4m GBP14.9m (3.2%)
Diluted earnings per share 5.6p 6.0p (6.7%)
Adjusted diluted earnings per share
(restated(3) ) 10.9p 10.4p 4.8%
Net cash/(debt) GBP39.5m (GBP2.7m) n/a
Chris Clark, CEO, commented:
" I am extremely pleased with these results and the significant
progress we have made strategically. These results reflect both the
considerable potential in our markets and the commitment and
expertise of our highly motivated team at GBG. Our goal is to be
the global leader in location, identity and identity fraud
solutions and the professionalism and hard work of the GBG team has
helped us make significant advances this year. I am particularly
proud that despite so many outside challenges on our people we
maintained our focus on engagement and we continue to be recognised
as a great place to work.
We have strengthened our leadership position in our markets both
organically and also, post half year end, by adding new customers,
technology and people through welcoming Acuant to the GBG family. I
am excited by the potential Acuant unlocks for the Group, this
combination accelerates our strategic progress by some two years
and strengthens our solution set addressing the fast-growing
problem of identity fraud.
Looking to the rest of this year we are focussed on executing
our plans, optimising the considerable assets now at our disposal
and delivering exceptional value to our customers, opportunity to
our team members and long-term value to our shareholders."
Notes:
(1) These measures are defined within note 16 to the Half Year
Results.
(2) Growth percentages are calculated with reference to the
actual unrounded figures in the primary financial statements and so
might not tie directly to the rounded figures in the table if
recalculated.
(3) Refer to note 7 of the Half Year Results for details of the
restatement.
Highlights and outlook
Strong first
half performance * Organic constant currency revenues have grown by
and 12.6% with strong performance from all three
balance sheet segments:
o Identity benefitted from strong underlying demand combined
with higher than expected volumes from US stimulus and
cryptocurrency related transactions
o Location continued its strong momentum as customers
recognised the importance of frictionless experiences
in the shift to digital commerce. New customers included
Nestle UK and Garmin
o Fraud saw recovery on last year as restrictions lifted
and on-premise installations became possible again in
some locations
* Growth underpinned by subscription and
transactional/consumption revenues of GBP105.0
million and strong customer retention which supports
good forward revenue visibility
* Adjusted operating profits up 3.5% to GBP27.8 million
* S trong balance sheet with GBP39.5 million of net
cash as at 30 September 2021
* Refinancing completed post half year end to increase
total facility to GBP175m and extend term to July
2025
------------------------------------------------------------------------
Product development
* Launched two new products in the Identity segment;
ExpectID Flex API in the US, for the enterprise
market and RapID in the UK aimed at the small
business market
* Launched new version of our market leading Loqate
solution, incorporating machine learning and
predictive addressing capability globally
* The Investigate solution acquired last year is being
rolled out ahead of expectation and with strong
customer take-up
------------------- ------------------------------------------------------------------------
Acuant Acquisition
(post half * Acuant acquisition delivers material US customer base
year end) in the largest market for identity solutions globally
* The acquisition accelerates GBG's product, data and
platform strategy by approximately two years,
supporting accelerated global expansion
* The acquisition is expected to accelerate GBG's
growth, enhance operating profit margins and be
earnings neutral in FY23 (post synergies), its first
full year of ownership and to be accretive thereafter
------------------- ------------------------------------------------------------------------
People
* Introduction of global 'Work When and Where You Want'
policy giving team members increased flexibility
* Employee engagement scores continue to be high: 94%
'would recommend GBG as a great place to work'
------------------- ------------------------------------------------------------------------
Positive outlook
* GBG has significant opportunity evidenced by clear
growth and market drivers
* The GBG Board reiterates its confidence in meeting
financial expectations for the enlarged Group for the
remainder of the financial year 2022
------------------- ------------------------------------------------------------------------
Fo r further information, please contact:
GBG
Chris Clark, CEO & David Ward, CFO
Richard Foster, Investor Relations +44 (0) 1244 657333
Peel Hunt LLP (Nominated Adviser and Broker) +44 (0) 20 7418
Edward Knight & Paul Gillam 8900
Tulchan Communications LLP +44 (0) 20 7353
James Macey White, Matt Low, Jordan McCulla 4200
& Olivia Lucas GBG@tulchangroup.com
Website www.gbgplc.com/investors
Presentation and webcast
GBG management will be hosting an analyst presentation today (30
November 2021) at 09:00 a.m. GMT. To register for the webcast
please use the following link:
https://webcasting.brrmedia.co.uk/broadcast/6176883cdf7b150b81e939ae
Shortly following the presentation, an archived webcast will be
available on the GBG Investor Centre.
About GBG
GBG are the experts in digital location, identity and identity
fraud software. Helping organisations across the globe eliminate
customer friction and fraud from their digital experiences. GBG
develop and deliver digital identity, address verification, fraud
prevention and compliance software to over 21,000 customers
globally.
Through the combination of the latest technology, the most
accurate data and our unrivalled expertise, GBG helps organisations
ranging from start-ups to the largest consumer and technology
brands in the world deliver seamless experiences, so their
customers can transact online with greater confidence.
GBG is headquartered in the UK with over 1,200 team members
across 18 countries.
To find out more about how we help our customers establish trust
with their customers, visit www.gbgplc.com and follow us on
LinkedIn and Twitter@gbgplc.
Chairman's Statement:
I am very pleased to report a strong first half for the Group.
We have delivered a good financial performance with revenue growth
in each business segment.
Identity benefitted from strong underlying demand combined with
higher than expected volumes from US stimulus and cryptocurrency
related transactions. Location continued its excellent performance,
as customers recognise that superior customer experience is a key
component of the shift to digital commerce. Fraud deployments
recovered compared to last year as on-premise installations became
possible in some locations due to the lifting of lockdown
restrictions. The overall improved sales performance, combined with
lower than expected operating expenditure, resulted in a strong
adjusted operating profit performance.
As always our performance is underpinned by our exceptional
team. We remain focused on making GBG a great place to work and
investing in all aspects of professional development. The success
of our approach was evident again in our most recent Gallup Q12
survey, with 94% of our team stating that they "would recommend GBG
as a great place to work". Results like this build our reputation
for delivering a great employee experience and we believe that with
our new commitment to flexible working, a 'Work When and Where You
Want' initiative, we will continue to attract and engage the best
talent in the industry.
We continued to execute well against our strategy, winning new
customers across our geographies and end markets, while both
renewals and upselling opportunities among our existing customers
remained strong. Subscription and transactional/consumption
revenues benefitted from the customers gained in the second half of
FY21 contributing to the year-on-year growth in the first half of
this year. We continued to strengthen our product portfolio and
maintain our reputation for innovation during the period. We
released ExpectID Flex API (enterprise market) and RapID (small
business in UK) in the Identity segment and launched globally the
next generation of the industry's most advanced address capture
solution from Lo qate.
Our business model, which comprises both subscription and
transaction/consumption revenue streams, continues to deliver
excellent cash generation and means we are well-positioned to
accelerate investment in the business both organically and through
acquisitions.
As a result we added Acuant to the GBG family this month. This
acquisition builds on our existing strength in the USA, the largest
global market for identity related solutions and also accelerates
GBG's data, product and platform strategy by two years. Acuant also
brings additional talent and expertise to the GBG team, supported
by our aligned vision and culture. We are very excited about the
potential growth that Acuant brings to the Group.
Financial performance:
Both revenue and adjusted operating profit are in line with the
performance outlined in the trading update issued on 21 October
2021. Total revenue for the period grew by 5.4% to GBP109.2
million, after adjusting for both foreign currency translation
effects and divested businesses this resulted in a headline
increase of 12.6% on an organic constant currency basis.
Software subscription [1] revenue contributed GBP47.9 million
with revenue from transaction/consumption of our solutions adding a
further GBP57.1 million, both of which demonstrate our strong
repeatable revenue model. Non-repeatable revenue streams, most
typically services and implementation fees, amounted to GBP4.2
million in the period.
Each of GBG's three segments grew in both reported and organic
constant currency terms in the first half of the year.
-- Location continued its strong momentum reported at the full
year with revenue growth on a constant currency basis of 15.4% to
GBP29.9 million. The shift to digital-first and omnichannel retail
benefitted the business, as did the ever-increasing consumer
expectations on retailers to provide a frictionless experience. New
customers to the Group included Nestle UK in the foods sector,
GoPro and Garmin in technology retail and Harper Collins in
publishing, demonstrating the breadth of the market
opportunity.
-- Identity, representing 58.4% of the Group's revenues, also
performed well with growth on a constant currency basis of 10.4%
despite a very strong comparative period affected by US government
financial stimulus activity last year. Although this is a one-off
project, activity continued through to the current financial year
at higher than expected volumes, generating additional revenue of
GBP3 million. The Identity businesses also benefitted from
increased cryptocurrency transaction volumes in Q4 2021 continuing
through to April and May of this financial period. In addition to
these welcome one-off opportunities the favourable underlying
demand environment for Identity services continued. New customers
to the Group included Welcome Technologies, Meijer, Dabble Sports,
Cuna Mutual and Zilch Technologies.
-- Fraud Prevention also experienced good organic growth of
17.0% in constant currency, although measured against a
comparatively weak period in the previous year, when impacted by a
slowdown in both customer decision making during the global
pandemic and the on-site requirements of implementations. During H1
significant term-based software subscription extensions were
secured from two large global financial services customers that
will benefit the Group on a multi-year basis. New contracts were
also secured from a leading Vietnamese consumer finance company,
EON and ATOS in Europe and a large financial services business in
Indonesia.
Flowing from increased sales, adjusted operating profit for the
first half also increased by 3.5% to GBP27.8 million with an
adjusted operating profit margin of 25.5%. This is marginally
higher than our original expectations due to the one-off revenue
impacts noted above and slower than planned recruitment related
costs. The significant market opportunity available to GBG means
that we will continue to increase investment in our people,
technology and channel-to-market capacity with additional
expenditure planned in H2.
On a reported basis, operating profit decreased by 5.2% to
GBP14.8 million after taking account of GBP12.9 million of costs
associated with the amortisation of acquired intangibles,
share-based payments and exceptional items (2020: GBP11.2 million).
Of these costs GBP12.8 million (2020: GBP11.0 million) were
non-cash items and GBP0.3 million related to transaction costs
associated with the acquisition of Acuant that were incurred prior
to 30 September 2021. The decrease in operating profit was mainly
driven by an increase in the charge for equity-settled share-based
payments by GBP1.8 million as a result of a greater number of share
options granted to team members and Executive Directors.
The tax charge for the six-month period was GBP3.2 million
(2020: GBP3.1 million). The tax charge on adjusted profit before
tax was GBP5.3 million (2020: GBP5.4 million), representing an
effective tax rate of 19.4% (2020: 20.9%). The revenue growth and
stable operating profit margin and tax rate led to an increase in
Adjusted Diluted EPS of 4.8% to 10.9 pence per share.
The Group's balance sheet remains strong. Group operating
activities before tax payments generated GBP32.5 million of cash
and cash equivalents (2020: GBP 44.2 million) with an adjusted
EBITDA to cash conversion ratio of 112.6% (2020: 154.9%). Following
the refinancing as part of the Acuant acquisition the Group has a
GBP175 million revolving credit facility, GBP20 million of which is
unutilised to provide liquidity and enable continued business
investment.
Strategic developments:
Technology and solutions
In a rapidly evolving market, our continued leadership depends
on our ability to consistently innovate our technology and
solutions. These solutions must address the new challenges that our
customers experience due to increasing digitalisation, which brings
them heightened risk from online fraud and additional regulatory
complexity. As a result GBG has made advances in extending its
product capability in the first half of the year.
We launched our new ExpectID Flex API in the US and RapID in the
UK which meet the needs of our Identity customers during H1.
ExpectID Flex API empowers businesses to verify anyone, anywhere in
the customer journey and is aimed at our enterprise customers. This
advanced methodology plugs directly into IDology's complete
portfolio of verification methods without additional integration,
providing full decision transparency and fraud analysis.
RapID offers our UK small business customers a plug and play
identity verification solution that they can begin using in
minutes. It is designed to help small businesses improve their
customer onboarding process, moving away from time-consuming manual
processes while still ensuring compliance.
In Location, we've launched the next generation of the
industry's most advanced type-ahead address capture solution,
designed to help businesses improve customer experience, reduce
shopping cart abandonment and radically reduce failed deliveries.
Research confirms that inaccurate or incomplete addresses cause
delays in 41% of deliveries and failure in 39%, underscoring the
importance of accurate address data in customer acquisition and
growth - a growing problem for brands.
In our Fraud Prevention portfolio we accelerated the migration
of customers and prospects to the new Investigate platform, while
our Digital Risk Management and Intelligence products were
recognised as the Best AI & Machine Learning Innovation at the
Asia Risk Awards 2021 in September.
Acquisitions:
M&A is a core pillar of our strategy and we have a strong
track record of execution having acquired and successfully
integrated 13 companies since 2011. Each acquisition has continued
the evolution of the Group from a UK-based customer data and
marketing services organisation to a global leader in digital
identity and identity fraud solutions, supported by our
international location intelligence business, which delivers
superior customer experience as well as prevention of some types of
fraud.
Our progress has accelerated with the acquisition of the entire
issued and to be issued share capital of Acuant on 29 November
2021, for a Purchase Price of $736 million (GBP547 million). This
acquisition strengthens our position as a global leader in identity
verification and identity fraud services and adds considerable
revenue and customers in the USA, the world's largest and most
strategically important market for digital identity. Acuant also
provides the enlarged Group with technology to accelerate our
development of new identity fraud solutions, the fastest-growing
adjacent sector to the Identity Verification market, which can be
deployed to our international markets. We have a long-standing
commercial relationship with Acuant, which will assist in both
integration and the delivery of revenue and efficiency
synergies.
It is also pleasing to report that one year after announcing the
acquisition of HooYu Investigate that integration has progressed
well, with GBG's breadth and depth of data enriching the
Investigate platform and bringing a leading fraud and investigation
service to the market. We have won some significant new customers
in the insurance, financial services and utilities sectors and we
are seeing existing customers upgrade their licenses to the
Investigate platform.
People:
Our people bring the talent and passion responsible for GBG's
ongoing success. We are focused on providing an inclusive and
supportive environment that enables our team members to grow and
develop.
Our performance over the last two years has demonstrated that
our team can deliver record results and high engagement scores
while working remotely. In a departure from the traditional working
parameters, our new 'Work When and Where You Want' policy,
introduced in July, means that over 1,200 GBG team members across
18 countries now have the flexibility to adjust the timing and
location of their work and achieve a better work-life balance. This
and other group-wide initiatives has led to further improvement to
our Gallup Q12 engagement survey scores in the current period and
we continue to consider further measures to enhance employee
experience.
Every team member in GBG has contributed to the Group's
performance and each one has my gratitude for their deep commitment
and excellent work despite the challenges of the period.
Appointment of Additional Non-Executive Director:
In November 2021 we welcomed Bhavneet (Bhav) Singh to the Board
as an Independent Non-Executive Director. Bhav has over 25 years'
experience leading successful digital businesses through ambitious
periods of growth and transformational change. His direct
experience with international expansion is highly applicable to
GBG's strategic priorities.
Regulation:
As reported in previous statements, The Information
Commissioner's Office (the data industry regulator in the UK)
announced in November 2018 that it was conducting audits on a
number of companies, including GBG, to understand the use of data
in their services. We continue to work collaboratively with the
Commissioner's Office as it strives to improve privacy compliance
and will keep investors informed of any material developments.
Outlook:
GBG is at the forefront of fast-growing global markets in
location intelligence, identity verification and fraud detection,
influenced by powerful structural drivers. Our business is quickly
responding to the accelerating adoption of digital commerce,
increased compliance and regulatory demands and the growing risk of
digital fraud.
GBG's products and services balance consumer expectation for
frictionless digital commerce and the business imperative to
attract new customers with regulatory requirements and compliance
best practice. Supporting our customers to get this balance right
provides the Group with excellent long-term prospects.
After a stronger than expected start to the year, in part
related to the US stimulus programme and the exceptional level of
transactional revenue related to cryptocurrencies in April and May,
we have now seen volumes normalise. Following completion of the
acquisition of Acuant yesterday, we are excited to welcome our new
team members to GBG and begin the integration. Our primary focus
for the remainder of FY22 is on maintaining and supporting the
business momentum that saw Acuant grow 22% in the 12 months to
September 2021.
Given the scale of opportunity ahead of us we will step up
investment in people, product and channel-to-market capacity in the
second half. When combined with an increase in travel and marketing
spend following a period of Covid-enforced limitations, we
anticipate operating margins will normalise and as a result the
outlook for the second half of FY22 remains in line with the
Board's expectations for the enlarged business.
David Rasche
Chairman
Condensed Consolidated Statement of Profit or Loss
For the six months ended 30 September 2021
Unaudited
-----------------------------------------------------------------------------------------------------
ear to
Unaudited Unaudited Audited
6 months 6 months Year to
to to 31 March
Note 30 September 30 September
2021 2020 2021
GBP'000 GBP'000 GBP'000
Revenue 5 109,154 103,545 217,659
Cost of sales (32,241) (30,908) (65,096)
-------------- --------------------- ----------
Gross profit 76,913 72,637 152,563
Operating expenses before amortisation
of acquired intangibles,
equity-settled share-based payments
and exceptional items (49,130) (45,801) (94,667)
Operating profit before amortisation
of acquired intangibles, equity-settled
share-based payments and exceptional
items (Adjusted operating profit) 5 27,783 26,836 57,896
Amortisation of acquired intangibles (8,581) (9,058) (17,671)
Equity-settled share-based payments 12 (3,865) (2,023) (5,170)
Exceptional items 4 (490) (93) 448
Operating profit 5 14,847 15,662 35,503
Finance revenue 7 7 120
Finance costs (469) (809) (1,360)
Profit before tax 14,385 14,860 34,263
Income tax charge 6 (3,195) (3,084) (7,385)
-------------- --------------------- ----------
Profit after tax and for the period
attributable to equity holders of the
parent 11,190 11,776 26,878
============== ===================== ==========
Earnings per share
- basic earnings per share for the
period 7 5.7p 6.1p 13.8p
- diluted earnings per share for the
period 7 5.6p 6.0p 13.5p
- adjusted basic earnings per share
for the period (restated) (1) 7 11.2p 10.6p 22.8p
- adjusted diluted earnings per share
for the period (restated) (1) 7 10.9p 10.4p 22.4p
(1) See note 7 for details of restatement
Condensed Consolidated Statement of Comprehensive Income
For the six months ended 30 September 2021
Unaudited
--------------------------------------------------------------------------------------------------
Unaudited Unaudited Audited
6 months 6 months Year to
to to 31 March
30 September 30 September
2021 2020 2021
GBP'000 GBP'000 GBP'000
Profit after tax and for the period
attributable to equity holders of the
parent 11,190 11,776 26,878
-------------- -------------------- ----------
Other comprehensive income:
Exchange differences on retranslation
of foreign operations (net of tax) 4,229 (3,961) (20,559)
-------------- -------------------- ----------
Total comprehensive income for the period
attributable to equity holders of the
parent 15,419 7,815 6,319
============== ==================== ==========
Condensed Consolidated Statement of Changes in Equity
For the six months ended 30 September 2021
Unaudited
Foreign
Equity Capital currency
share Share Merger redemption translation Retained Total
capital premium reserve reserve reserve earnings equity
Note GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1
April
2020 4,855 261,648 6,575 3 3,953 67,900 344,934
Profit for the
period - - - - - 11,776 11,776
Other
comprehensive
income - - - - (3,961) - (3,961)
--------- --------- --------- ------------ ------------ ---------- --------
Total
comprehensive
(expense)/income
for the period - - - - (3,961) 11,776 7,815
Issue of share
capital 24 3,227 - - - - 3,251
Share-based
payments - - - - - 2,023 2,023
Tax on share
options - - - - - 778 778
Balance at 30
September
2020 4,879 264,875 6,575 3 (8) 82,477 358,801
Profit for the
period - - - - - 15,102 15,102
Other
comprehensive
expense - - - - (16,598) - (16,598)
--------- --------- --------- ------------ ------------ ---------- --------
Total
comprehensive
(expense)/income
for the period - - - - (16,598) 15,102 (1,496)
Issue of share
capital 29 2,752 3,343 - - - 6,124
Share-based
payments - - - - - 3,147 3,147
Tax on share
options - - - - - 922 922
Share forfeiture
receipt - - - - - 2,641 2,641
Equity dividend 8 - - - - - (5,883) (5,883)
Balance at 1
April
2021 4,908 267,627 9,918 3 (16,606) 98,406 364,256
Profit for the
period - - - - - 11,190 11,190
Other
comprehensive
expense - - - - 4,229 - 4,229
--------- --------- --------- ------------ ------------ ---------- --------
Total
comprehensive
income for the
period - - - - 4,229 11,190 15,419
Issue of share
capital 18 898 - - - - 916
Share-based
payments 12 - - - - - 3,865 3,865
Tax on share
options - - - - - 396 396
Share forfeiture
refund - - - - - (5) (5)
Equity dividend 8 - - - - - (6,677) (6,677)
--------- --------- --------- ------------ ------------ ---------- --------
Balance at 30
September
2021 4,926 268,525 9,918 3 (12,377) 107,175 378,170
========= ========= ========= ============ ============ ========== ========
Condensed Consolidated Balance Sheet
As at 30 September 2021
Unaudited
----------------------------------------------------
Unaudited Unaudited Audited
As at As at As at
Note 30 September 30 September 31 March
2021 2020 2021
GBP'000 GBP'000 GBP'000
ASSETS
Non-current assets
Property, plant and equipment 9 3,813 4,214 3,706
Right-of-use assets 9 2,545 4,006 3,231
Goodwill 9 289,531 300,082 286,351
Other intangible assets 9 83,810 100,560 91,312
Investments 2,289 2,288 2,288
Deferred tax asset 7,871 7,231 7,676
389,859 418,381 394,564
------------- ------------- ---------
Current assets
Inventories 106 136 123
Trade and other receivables 48,851 51,311 58,617
Current tax 7,603 5,363 5,778
Cash and short-term deposits 39,499 32,281 21,135
------------- ------------- ---------
96,059 89,091 85,653
------------- ------------- ---------
TOTAL ASSETS 485,918 507,472 480,217
------------- ------------- ---------
EQUITY AND LIABILITIES
Capital and reserves
Equity share capital 4,926 4,879 4,908
Share premium 268,525 264,875 267,627
Merger reserve 9,918 6,575 9,918
Capital redemption reserve 3 3 3
Foreign currency translation reserve (12,377) (8) (16,606)
Retained earnings 107,175 82,477 98,406
Total equity attributable to equity holders
of the parent 378,170 358,801 364,256
------------- ------------- ---------
Non-current liabilities
Loans - 34,736 -
Lease liabilities 1,692 2,912 2,286
Provisions 1,496 1,161 1,010
Deferred revenue 552 651 545
Contingent consideration - 458 -
Deferred tax liability 21,162 24,622 22,120
------------- ------------- ---------
24,902 64,540 25,961
Current liabilities
Lease liabilities 1,719 1,976 1,650
Trade and other payables 33,187 42,626 41,067
Deferred revenue 44,188 35,326 42,298
Contingent consideration 10 3,752 4,203 3,662
Current tax - - 1,323
82,846 84,131 90,000
TOTAL LIABILITIES 107,748 148,671 115,961
------------- ------------- ---------
TOTAL EQUITY AND LIABILITIES 485,918 507,472 480,217
------------- ------------- ---------
Condensed Consolidated Cash Flow Statement
For the six months ended 30 September 2021
Unaudited
-------------------------------------------
Unaudited Unaudited Audited
6 months 6 months Year to
to to 31 March
30 September 30 September 2021
Note 2021 2020
GBP'000 GBP'000 GBP'000
Group profit before tax 14,385 14,860 34,263
Adjustments to reconcile Group profit
before tax to net cash flows
Finance revenue (7) (7) (120)
Finance costs 469 809 1,360
Depreciation of plant and equipment 9 644 742 1,433
Depreciation of right-of-use assets 9 903 948 1,838
Amortisation of intangible assets 9 8,679 9,181 17,914
Impairment of goodwill - 79 154
Loss/(profit) on disposal of business 4 126 - (1,403)
Fair value adjustment on contingent
consideration 10 90 571 245
Loss on disposal of plant and equipment
and intangible assets 7 - -
Share-based payments 12 3,865 2,023 5,170
Decrease/(increase) in inventories 14 (11) 6
(Decrease)/increase in provisions (40) - 88
Decrease in receivables 8,635 12,701 10,028
(Decrease)/increase in payables (5,299) 2,286 1,655
Cash generated from operations 32,471 44,182 72,631
Income tax paid (6,682) (8,917) (14,205)
-------------- -------------- ----------
Net cash generated from operating activities 25,789 35,265 58,426
-------------- -------------- ----------
Cash flows (used in)/from investing
activities
Acquisition of subsidiaries, net of
cash acquired - (2,089) (2,762)
Purchase of plant and equipment 9 (788) (243) (455)
Purchase of software 9 (46) (234) (283)
Proceeds from disposal of plant and
equipment 2 - -
Net (costs)/proceeds from disposal of
businesses (60) - 5,307
Interest received 7 7 20
Net cash flows (used in)/from investing
activities (885) (2,559) 1,827
-------------- -------------- ----------
Cash flows (used in)/from financing
activities
Finance costs paid (279) (559) (1,231)
Proceeds from issue of shares 916 963 3,087
(Refund)/proceeds from share forfeiture (5) - 2,641
Repayment of borrowings - (27,500) (62,500)
Repayment of lease liabilities (817) (1,143) (2,252)
Dividends paid to equity shareholders 8 (6,677) - (5,883)
Net cash flows used in financing activities (6,862) (28,239) (66,138)
-------------- -------------- ----------
Net increase in cash and cash equivalents 18,042 4,467 (5,885)
Effect of exchange rates on cash and
cash equivalents 322 315 (479)
Cash and cash equivalents at the beginning
of the period 21,135 27,499 27,499
-------------- -------------- ----------
Cash and cash equivalents at the end
of the period 39,499 32,281 21,135
============== ============== ==========
Notes to the Condensed Consolidated Interim Financial
Statements
1. CORPORATE INFORMATION
The condensed consolidated interim financial statements of GB
Group plc ('the Group') for the six months ended 30 September 2021
were authorised for issue in accordance with a resolution of the
directors on 29 November 2021 and are unaudited but have been
reviewed by the auditor, Ernst & Young LLP and their report to
the Company is set out at the end of these condensed consolidated
interim financial statements.
GB Group plc is a public limited company incorporated in the
United Kingdom whose shares are publicly traded on the Alternative
Investment Market (AIM) of the London Stock Exchange.
2. BASIS OF PREPARATION AND ACCOUNTING POLICIES
Basis of Preparation
These condensed consolidated interim financial statements for
the six months ended 30 September 2021 have been prepared in
accordance with UK-adopted IAS 34 'Interim Financial Reporting'. Th
e annual financial statements of the Group are prepared in
accordance with international accounting standards in conformity
with the requirements of the Companies Act 2006 and with those
parts of the Companies Act 2006 applicable to companies reporting
under International Accounting Standards.
The condensed consolidated interim financial statements are
presented in the Group's functional currency of pounds Sterling and
all values are rounded to the nearest thousand (GBP'000) except
when otherwise indicated.
The condensed consolidated interim financial statements do not
constitute statutory financial statements as defined in section 435
of the Companies Act 2006 and therefore do not include all the
information and disclosures required in the annual financial
statements and should be read in conjunction with the Group's
annual financial statements as at 31 March 2021. The financial
information for the preceding year is based on the statutory
financial statements for the year ended 31 March 2021. These
financial statements, upon which the auditors issued an unqualified
opinion, have been delivered to the Registrar of Companies. These
financial statements did not require a statement under either
section 498(2) or section 498(3) of the Companies Act 2006.
Going Concern
As detailed in note 15, after the balance sheet date the Group
acquired Acuant Intermediate Holding Corp ("Acuant") and refinanced
its existing bank facilities. The going concern assessment
performed by management for the purpose of the interim review has
incorporated both of these events when considering future
cashflows, the availability of cash resources and compliance with
debt covenants.
An extensive review of the going concern assumption was
conducted prior to the approval of the 31 March 2021 Annual Report.
This review has been extended through to 31 March 2023 and updated
for the actual Group results for the first six months of FY22,
which have been ahead of those forecasts used during the year-end
review in terms of revenue, profit and cash generation.
The actual revenue performance for the six months showed organic
growth at constant currency of 12.6%. The going concern model at
the year-end was based on a market consensus position of a decline
of 3.2% due to a specific one-off customer project in FY21 which
was not expected to repeat and so the performance in the first half
of the year has been significantly ahead of this. In part this
growth has been due to this specific customer project continuing
into the current financial year at higher than expected volumes,
generating additional revenue of approximately GBP3 million. The
Group also benefitted from the increased transaction volumes across
crypto-currencies, experienced in our Q4 last year and continuing
into April and May of this financial period. This generated a
further circa GBP4 million of additional consumption revenue in the
first half of the year.
In addition to the revenue (and profit) performance the Group
has continued to successfully convert this trading performance into
cash. The EBITDA to operating cash conversion % for the first half
was 112.6% whereas the prior period was 154.9% due to large
receipts from the sale of multi-year contracts in March 2020 in
addition to the deferral of VAT payments under the UK coronavirus
support scheme. The rolling 12-month cash conversion % was 100.1%
at 30 September 2021 compared to 119.5% at 31 March 2021 which is
also ahead of the assumptions used in the going concern model for
the 31 March 2021 year-end.
The refinancing of the previous bank facilities has extended the
term of the facility to July 2025 (the previous facility was due to
expire in February 2023), with two further one-year extension
options (subject to bank approval). The total value of the facility
is GBP175m, GBP155m of which was drawdown in USD to part fund the
Acuant acquisition. The modelling for going concern assumes that
cash over a base level of approximately GBP20m will be used to
repay this drawdown, using future cashflows from both Acuant and
the rest of the Group.
The base case model has been updated at the half-year for the
actuals to 30 September 2021 and the latest forecasts through to 31
March 2023 based on updated underlying growth assumptions and the
modelling performed on Acuant as part of the acquisition due
diligence process. Under the updated base case and a range of
potential downside scenarios, the Group continues to have
significant liquidity and financial covenant headroom under its
debt facilities.
2. BASIS OF PREPARATION AND ACCOUNTING POLICIES (continued)
The model was then adjusted to assess what level of decline in
revenue against the base model would be required to result in a
covenant breach. This shows that it would take a decline of 29% to
result in a breach, which would occur as at 31 December 2022 (in
the year-end model it took a decline of 45% to result in a breach).
This is on the assumption that management implemented a reduction
in overheads of 20% which is considered possible without causing
significant disruption to the business in those circumstances.
Without the overheads reduction it would take a continued decline
of 16% to result in a breach, which would also occur in December
2022 (in the year-end model it took a 31% decline without any
operating expenses savings).
Whilst the headroom has reduced since the year-end, this is
reflective of the drawdown for the acquisition only recently being
made. Based on the current trading performance and through
reference to current market consensus, a decline of anywhere near
29% is considered by the Directors to be highly unlikely. If this
became even a remote possibility, then certain cash conservation
measures in management's control would be implemented well in
advance of the breach. This includes either not declaring or
reducing future final dividend payments, pay and recruitment
freezes, withdrawing bonuses and reductions to the payroll cost
base. In addition, the range of mitigating actions detailed in the
2021 Annual Report remain available, albeit these are not within
management's control. This includes, for example, requesting a
delay to UK tax payments, raising cash through an equity placing
and disposal of part of the business.
Following review of future forecasts and applying reasonable and
extreme sensitivities, the Directors have a reasonable expectation
that the Group has adequate resources to continue in operational
existence for the foreseeable future. For these reasons, the Board
continues to adopt the going concern basis in preparing the interim
financial statements.
Accounting Policies
The accounting policies adopted in the preparation of the
condensed consolidated interim financial statements are consistent
with those followed in the preparation of the Group's annual
financial statements for the year ended 31 March 2021 with the
exception of the presentation of its fee types and revenue streams
due to changes in their disaggregation which is intended to better
help users of the accounts understand the repeatable nature of the
Group's revenue. The Group has not early adopted any standard,
interpretation or amendment that has been issued but is not yet
effective. No newly introduced standard or amendments to standards
had a material impact on the condensed consolidated interim
financial statements.
Revenue recognition
During the 6-month period ended 30 September 2021, the Group has
changed the presentation and disclosure of its fee types and
revenue streams in order to disaggregate revenue recognised from
contracts with customers into recurring and non-recurring revenue
streams. Management believes that the revised disaggregation best
depicts how the nature, amount, timing and uncertainty of the
Group's revenue and cash flows are affected by economic factors and
is therefore most relevant and useful to users of the accounts.
Aggregation as previously reported Updated aggregation
Licence Term-based subscription
-------------------------------
Transactional Consumption
-------------------------------
Consumption-based subscription
-------------------------------
Services Term-based subscription
-------------------------------
Consumption
-------------------------------
Consumption-based subscription
-------------------------------
Other
-------------------------------
The Company's revenue recognition policy for each type of
revenue is unchanged from the previous period. The description of
those revenue recognition policies for each of the new revenue type
descriptors is as follows:
Revenue is stated net of value-added tax, rebates and discounts
and after the elimination of intercompany transactions within the
Group. The Group operates a number of different businesses offering
a range of products and services and accordingly applies a variety
of methods for revenue recognition, based on the principles set out
in IFRS 15.
Revenue is recognised to represent the transfer of promised
services to customers in a way that reflects the consideration
expected to be received in return. Consideration from contracts
with customers is allocated performance obligations identified
based on their standalone selling price and is recognised when
those performance obligations are satisfied and the control of
goods or services is transferred to the customer, either over time
or at a point in time.
In determining the amount of revenue and profits to record, and
related balance sheet items (such as contract assets, contract
liabilities, accrued income and deferred income) to recognise in
the period, management is required to form a number of judgements
and assumptions. These may include an assessment of the costs the
Group incurs to deliver the contractual commitments and whether
such costs should be expensed as incurred or capitalised. These
judgements are inherently subjective and may cover future events
such as the achievement of contractual milestones.
2. BASIS OF PREPARATION AND ACCOUNTING POLICIES (continued)
a) Term-based subscriptions (previously: software licences)
Revenue from term-based subscriptions is recognised when control
is considered to have passed to the customer. Control can pass
either at a point in time or over time depending on the performance
obligations under the contract as further described below.
Web-service hosted software solutions
The performance obligation is to provide the customer a right to
access the software throughout the subscription period for which
revenue is recognised over the subscription period.
On-premise installation
The performance obligations can include the provision of a
software subscription, data sets, updates to those data sets during
the subscription period and support and maintenance. There also are
instances where customers are provided a data set to use with their
own software rather than the Group's.
The Group's software has no standalone value to the customer
without the data as there is nothing upon which to apply the
algorithms. The data file cannot be accessed outside of the
software so has no standalone value (unless under the circumstance
where it has been subscribed for use on the customer's system). As
a result, the software and the data are considered one performance
obligation as the customer cannot benefit from one without the
other.
Customers are given a right-to-use the software and data as it
exists at the point in time the subscription is granted, for which
revenue is recognised at the point in time the customer can first
use and benefit from it.
A proportion of the transaction price is allocated to the
provision of data updates and support and maintenance, which are
considered separate performance obligations. This is either based
on the stand-alone selling price for those services or, where the
Group does not have a history of stand-alone selling prices for a
particular software subscription, a cost-plus mark-up approach is
applied.
Data disk
The performance obligations can include the subscription to use
specific data sets, updates to those data sets during the
subscription period and support and maintenance.
The performance obligations over the period of the subscription
are satisfied by the provision of disk files to the customer in the
same format on a monthly basis to ensure that the customer has
access to the most relevant information throughout the contract
period. This meets the series guidance under IFRS 15 paragraph 22:
"a promise to transfer to the customer a series of distinct goods
or services that are substantially the same and that have the same
pattern of transfer". Accordingly, the revenue for the full
subscription period is recognised over the contractual term.
b) Consumption (previously: transactional)
A number of GBG SaaS solutions provide for the provision of
consumed data intelligence services with customer paying only for
the number of searches they perform. The performance obligation is
to provide this check and revenue in respect of those solutions is
recognised based on usage. Customers are either invoiced in arrears
for searches performed ("consumption") or make a prepayment giving
them the right to a specific number of searches ("consumption-based
subscription).
Where customers make a prepayment, which entitles them to
perform a specific number of transactions over an agreed contract
period, once this period has expired any unused transactions are
forfeited. Based on a review of historic forfeitures an estimate is
made of the expected percentage of transactions that will remain
unused over their contracted life. This percentage is applied such
that revenue for expected forfeiture is recognised in proportion to
the pattern of transactions performed by the customer.
c) Other (previously: rendering of services)
Revenue from other revenue such as development charges, set up,
hardware, support and maintenance fees are recognised over time by
reference to the stage of completion. Stage of completion of the
specific transaction is assessed on the basis of the actual
services provided as a proportion of the total services to be
provided. Where the services consist of the delivery of support and
maintenance on software licence agreements, it is generally
considered to be a separate performance obligation and revenue is
recognised on a straight-line basis over the term of the support
period.
d) Perpetual licences
Revenue is recognised at a point in time when the contract is
agreed, and the software is made available to the customer.
Customers are charged an initial or perpetual licence fee for
on-premise or hosted software which is usually limited by a set
number of users or seats. Initial and perpetual licences provide
the customer with the right to use the software and are distinct
from other services.
2. BASIS OF PREPARATION AND ACCOUNTING POLICIES (continued)
e) Contract assets and contract liabilities
Costs to obtain a contract in the Group typically include sales
commissions and under IFRS 15 certain costs such as these are
deferred as Contract Assets and are amortised on a systematic basis
consistent with the pattern of transfer of the goods or services to
which the asset relates. As a practical expedient, these costs are
expensed if the amortisation period to which they relate is one
year or less.
Where the Group completes performance obligations under a
contract with a customer in advance of invoicing the customer, the
value of the accrued revenue is initially recognised as a contract
asset.
Any contract assets are disclosed within the trade and other
receivables in the Consolidated Balance Sheet.
Where the Group receives a short-term prepayment or advance of
consideration prior to completion of performance obligations under
a contract with a customer, the value of the advance consideration
received is initially recognised as a contract liability in
liabilities. Revenue is subsequently recognised as the performance
obligations are completed over the period of the contract (i.e. as
control is passed to the customer). Contract liabilities are
presented in deferred income within trade and other payables in the
Consolidated Balance Sheet.
f) Principal versus agent
The Group has arrangements with some of its customers whereby it
needs to determine if it acts as a principal or an agent as more
than one party is involved in providing the goods and services to
the customer.
The Group is an agent if its role is to arrange for another
entity to provide the goods or services. Factors considered in
making this assessment are most notably the discretion the Group
has in establishing the price for the specified good or service,
whether the Group has inventory risk and whether the Group bears
the responsibility for fulfilling the promise to deliver the
service or good. Where the Group is acting as an agent revenue is
recorded at a net amount reflecting the margin earned.
The Group acts as a principal if it controls a promised good or
service before transferring that good or service to the customer.
Where the Group is acting as a principal, revenue is recorded on a
gross basis.
This assessment of control requires some judgement in particular
in relation to certain service contracts. An example is the
provision of certain employment screening services where the Group
may be assessed to be agent or principal dependent upon the facts
and circumstances of the arrangement and the nature of the services
being delivered.
g) Contract modifications
Although infrequent, contracts may be modified for changes in
contract terms or requirements. These modifications and amendments
to contracts are always undertaken via an agreed formal process.
Contract modifications exist when the amendment either creates new
or changes the existing enforceable rights and obligations. The
effect of a contract modification on the transaction price and the
Group's measure of progress for the performance obligation to which
it relates, is recognised as an adjustment to revenue in one of the
following ways:
a. Prospectively as an additional separate contract
b. Prospectively as a termination of the existing contract and creation of a new contract
c. As part of the original contract using a cumulative catch up
d. As a combination of b) and c).
For contracts for which the Group has decided there is a series
of distinct goods and services that are substantially the same and
have the same pattern of transfer where revenue is recognised over
time, the modification will always be treated under either a) or
b). However, d) may arise when a contract has a part termination
and a modification of the remaining performance obligations.
The facts and circumstances of any contract modification are
considered individually as the types of modifications will vary
contract by contract and may result in different accounting
outcomes.
h) Interest income
Revenue is recognised as interest accrues using the effective
interest rate method. The effective interest rate is the rate that
exactly discounts estimated future cash receipts through the
expected life of the financial instrument to its net carrying
amount.
2. BASIS OF PREPARATION AND ACCOUNTING POLICIES (continued)
Judgements and Estimates
The preparation of interim financial statements requires
management to make judgements, estimates and assumptions that
affect the application of accounting policies and the reported
amounts of assets and liabilities, income and expense. Actual
results may differ from these estimates. Full details of
significant accounting judgements, estimates and assumptions used
in the application of the Group's accounting policies can be found
in the Annual Report and Accounts for the year ended 31 March
2021.
In preparing these condensed financial statements, the
significant judgements made by management in applying the Group's
accounting policies and key sources of estimation uncertainty were
the same as those applied to the statutory accounts for the year
ended 31 March 2021. The only exceptions relate to the disclosure
of discontinued operations and valuation and asset lives of
separately identifiable intangible assets since no disposals or
acquisitions have taken place during the period to 30 September
2021. There have been no new material judgements or estimates in
the period to 30 September 2021.
3. RISKS AND UNCERTAINTIES
Management identifies and assesses risks to the business using
an established control model. The Group has a number of exposures
which can be summarised as follows: Covid-19; failure to comply
with regulations and laws; increasing competition and lack of
global reach; non-supply by a major supplier; cyber-attack; loss of
data systems despite disaster recovery & business continuity
plans; inability to meet new product development and scalability
challenges; loss of intellectual property; and ineffective
succession planning and skills retention. These risks and
uncertainties facing our business were reported in detail in the
2021 Annual Report and Accounts and all of them are monitored
closely by the Group.
4. EXCEPTIONAL ITEMS
Unaudited Unaudited Audited
6 months 6 months Year to
to to 31 March
30 September 30 September 2021
2021 2020
GBP'000 GBP'000 GBP'000
(a) Acquisition related costs 274 85 862
(b) Costs associated with team member
reorganisations - 105 441
(c) Impairment of goodwill - 79 154
(d) Recognition of payroll tax credit - (747) (747)
(e) Fair value adjustments to contingent
consideration - 747 697
(f) Foreign exchange movement on
contingent consideration 90 (176) (452)
(g) Loss/(profit) on disposal of
businesses 126 - (1,403)
Total exceptional costs/(income) 490 93 (448)
--------------- --------------- -----------
a) Acquisition related costs of GBP274,000 (2020: GBP85,000)
include legal and professional advisor costs directly attributable
to the acquisition of Acuant detailed in note 15. The costs
recognised to 30 September 2021 only reflect services received up
to that date and do not include any fees that were contingent upon
successful completion of the acquisition, as this occurred after
the balance sheet date. These costs exclude operating or
integration costs relating to an acquired business. Due to the size
and nature of these costs, management consider that they would
distort the Group's underlying business performance.
b) Costs associated with team member reorganisations relate to
exit costs of personnel leaving the business on an involuntary
basis, either as a result of integrating acquisitions or due to
reorganisations within our operating divisions. Due to the nature
of these costs, management deem them to be exceptional in order to
better reflect our underlying performance. Exit costs outside of
these circumstances are treated as an operating expense.
c) During the period to 30 September 2020 GBP79,000 was
recognised as an impairment expense relating to the goodwill in the
e-Ware Interactive cash generating unit. The carrying value of the
goodwill following the impairment is GBPnil.
4. EXCEPTIONAL ITEMS (continued)
d) In the period to 30 September 2020, a previously unrecognised
payroll tax credit in the State of Georgia of GBP747,000 was
recognised on the balance sheet, with a corresponding credit being
recognised in exceptional items. Previously there was uncertainty
over the Group's eligibility to this credit, but this has now been
confirmed. As and when the Group receives the benefit of this asset
an equivalent amount is due to the sellers of IDology. On this
basis the contingent consideration liability has been increased by
GBP747,000 with a corresponding exceptional item charge.
e) Subsequent to the recognition of the additional contingent
consideration of GBP747,000 referred to in (d) above, in December
2020 the Group agreed to settle this liability with the sellers
early, in exchange for a reduction of GBP50,000 in the amount
payable. Therefore, the net exceptional cost in the year to 31
March 2021 in relation to this was GBP697,000.
f) The contingent consideration liability is based on the US
Dollar value of the losses and deferred tax asset. As a result, the
liability was retranslated at the balance sheet date with a loss of
GBP90,000 (30 September 2020: gain of GBP176,000) being treated as
an exceptional item.
g) During the year to 31 March 2021, the Group disposed of its
Marketing Services and Employ and Comply businesses. Intangible
assets, property plant and equipment, and trading balances were
disposed of as part of these transactions and deducted from the
proceeds received which has resulted in an overall profit on
disposal. The profit recognised on disposal of Employ and Comply
was GBP2,578,000. The loss on disposal of Marketing Services was
GBP1,175,000. In the period to 30 September 2021, additional costs
of GBP126,000 were incurred in relation to the finalisation of the
disposal of the Employ and Comply business.
5. SEGMENTAL INFORMATION
The Group's operating segments are internally reported to the
Group's Chief Executive Officer as three operating segments:
Location, Identity and Fraud. Included within 'Other' (previously
disclosed as 'Unallocated' as at 31 March 2021 and 30 September
2020) is the revenue and profit of the Marketing Services business,
the majority of which was disposed of in the year to 31 March
2021.
'Central overheads' represents group operating costs such as
technology, compliance, finance, legal, people team, information
security, premises, directors' remuneration and PLC costs.
The measure of performance of those segments that is reported to
the Group's Chief Executive Officer is adjusted operating profit,
being profits before amortisation of acquired intangibles,
equity-settled share-based payments, exceptional items, net finance
costs and tax, as shown below. Information on segment assets and
liabilities is not regularly provided to the Group's Chief
Executive Officer and is therefore not disclosed below.
Changes to Segmental Analysis for 6 months to 30 September
2021
The implementation of a new group wide finance system in the
prior year has enabled transactions to be analysed in more detail
internally. As a result, during the period to 30 September 2021,
the presentation of the segmental information that is reported to
the Group's Chief Executive Officer and the categories revenue is
grouped into, has continued to evolve and has been updated to
better reflect the nature of how customers consume our services.
Note 2 'revenue recognition' details how the previous categories
used for the disaggregation of revenue map to the new categories
that have subsequently been adopted.
Previously GBG has presented an 'Unallocated' column in the
segment disclosure, which represented both the revenue and profit
of the Marketing Services business as well as group operating
costs. However, following the disposal of part of its Marketing
Services division in the prior year, the Group has now incorporated
the remaining portion of the Marketing Services division within the
Fraud operating segment. Due to these changes in the presentation
of the segmental analysis during the period ended 31 September
2021, the segmental information for the year ended 31 March 2021
and the period ended 30 September 2020 have been re-presented on
the same basis. The values that have been re-presented are as
follows: 31 March 2021: GBP1,952,000 and 30 September 2020:
GBP655,000. For the current period, the sold part of the Group's
Marketing Services division is now disclosed within 'Other' and
group operating costs are disclosed within the 'Central overheads'
line.
5. SEGMENTAL INFORMATION (continued)
Historically a portion of group operating costs were attributed
to the operating segments using a variety of allocation methods.
However, in order to better reflect the underlying trading
performance of the operating segments without distortion from
changes in corporate costs, from 1 April 2021 group operating costs
are no longer allocated and instead are included fully within the
'Central overheads' row. The removal of allocated group operating
costs from operating segment results ensures that performance is
measured against costs that can be directly controlled or
influenced by individual segments.
Due to the variety of allocation methods used historically,
often at a granular transaction level, changes from analysing by
cost centre to business unit, as well as the use of different
systems across the Group at various times during the comparative
periods, it was not practical to restate the prior periods (being
the year ended 31 March 2021 and the period ended 30 September
2020) to remove allocated group operating costs out of the
operating segment results. Had the prior year information been
updated then the adjusted operating profit of the individual
segments would have increased because less central overheads would
have been allocated to them.
Unaudited
Location Identity Fraud Other Total
Six months ended GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
30 September 2021
Subscription revenues:
Consumption-based 8,423 6,586 439 - 15,448
Term-based 19,095 1,563 11,770 - 32,428
--------- --------- -------- -------- --------------
Total subscription
revenues 27,518 8,149 12,209 - 47,876
Consumption 1,982 54,471 670 - 57,123
Other 405 1,108 2,604 38 4,155
Total revenue 29,905 63,728 15,483 38 109,154
--------- --------- -------- -------- --------------
Contribution 10,670 28,136 4,881 (214) 43,473
Central overheads - - - - (15,690)
--------------
Adjusted operating
profit 27,783
Amortisation of
acquired intangibles (2,155) (5,599) (827) - (8,581)
Share-based payments
charge (3,865)
Exceptional items (490)
--------------
Operating profit 14,847
Finance revenue 7
Finance costs (469)
Income tax expense (3,195)
--------------
Profit for the
period 11,190
==============
5. SEGMENTAL INFORMATION (continued)
Re-presentation of 30 September 2020 Disclosure
As disclosed in the year ended 31 March 2021 financial
statements, changes were made to the classification of revenue
between segments when compared to the 31 March 2020 analysis.
Revenue from Location products in VIX Verify were reclassified from
the Identity segment to the Location segment. This resulted in a
reclassification of GBP1,417,000 between categories.
-presented) -presented) -presented) -presented)
(Re-presented) (Re-presented) (Re-presented) (Re-presented) Unaudited
Location Identity Fraud Other Total
Six months ended GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
30 September 2020
Subscription
revenues:
Consumption-based 8,978 6,743 289 - 16,010
Term-based 15,616 2,830 9,188 - 27,634
----------------- ----------------- ----------------- ----------------- ----------
Total subscription
revenues 24,594 9,573 9,477 - 43,644
Consumption 1,669 52,482 503 - 54,654
Other 357 1,059 2,952 879 5,247
Total revenue 26,620 63,114 12,932 879 103,545
----------------- ----------------- ----------------- ----------------- ----------
Contribution 7,781 23,322 2,221 (514) 32,810
Central overheads (5,974)
----------
Adjusted operating
profit 26,836
Amortisation of
acquired intangibles (1,938) (6,709) (230) (181) (9,058)
Share-based payments
charge (2,023)
Exceptional items (93)
----------
Operating profit 15,662
Finance revenue 7
Finance costs (809)
Income tax expense (3,084)
----------
Profit for the
period 11,776
==========
(Re-presented) (Re-presented) (Re-presented) (Re-presented) Audited
Location Identity Fraud Other Total
Year ended 31 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
March 2021
Subscription revenues:
Consumption-based 18,384 13,718 648 - 32,750
Term-based 37,399 4,938 19,907 - 62,244
--------------- --------------- --------------- --------------- ---------
Total subscription
revenues 55,783 18,656 20,555 - 94,994
Consumption 2,970 107,173 1,122 - 111,265
Other 916 2,256 6,767 1,461 11,400
Total revenue 59,669 128,085 28,444 1,461 217,659
--------------- --------------- --------------- --------------- ---------
Contribution 19,472 47,746 5,332 (954) 71,596
Central overheads (13,700)
---------
Adjusted operating
profit 57,896
Amortisation of
acquired intangibles (4,331) (12,295) (749) (296) (17,671)
Share-based payments
charge (5,170)
Exceptional items 448
---------
Operating profit 35,503
Finance revenue 120
Finance costs (1,360)
Income tax expense (7,385)
---------
Profit for the
year 26,878
=========
6. TAXATION
The Group calculates the period income tax expense using a best
estimate of the tax rate that would be applicable to the expected
total earnings for the year ending 31 March 2022.
The table below shows the impact on the effective rate of tax of
non-recurring tax items:
Unaudited Unaudited
6 months to 6 months to
30 September 2021 30 September 2020
Impact Impact
Profit on effective Profit on effective
before Income tax rate before Income tax rate
Tax tax charge % Tax tax charge %
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Income statement 14,385 3,195 22.2% 14,860 3,084 20.8%
Adjustments:
Change of tax
rates - (452) (3.1%) - - -
Prior year adjustments - (44) (0.3%) - 138 0.9%
14,385 2,699 18.8% 14,860 3,222 21.7%
--------- ------------ -------------- --------- ------------ --------------
On 3 March 2021, the UK Government announced that effective 1
April 2023 the UK corporation rate will increase from 19% to 25%.
This change was substantively enacted on 24 May 2021 and therefore
the UK deferred tax assets and liabilities have been adjusted to
reflect the change of rate for the amounts expected to unwind after
1 April 2023. This resulted in an additional charge in the period
of GBP452,000.
After adjustment for these non-recurring tax items, the main
reason for the decrease in the effective rate of tax is due to a
higher benefit from research and development incentives such as
Patent Box in the UK.
7. EARNINGS PER ORDINARY SHARE
Basic
Basic earnings per share is calculated by dividing the profit
attributable to equity holders of the Company by the basic weighted
average number of ordinary shares in issue during the period.
Unaudited Unaudited Audited
6 months to 6 months to Year to
30 September 30 September 31 March 2021
2021 2020
Pence Pence Pence
per per per
share GBP'000 share GBP'000 share GBP'000
Profit attributable to
equity holders of the
Company 5.7 11,190 6.1 11,776 13.8 26,878
------- --------- ------- --------- ------- ---------
7. EARNINGS PER ORDINARY SHARE (continued)
Diluted
Diluted earnings per share amounts are calculated by dividing
the profit for the period attributable to equity holders of the
Company by the weighted average number of ordinary shares
outstanding during the period plus the weighted average number of
ordinary shares that would be issued on the conversion of all the
dilutive potential ordinary shares into ordinary shares.
Unaudited Unaudited Audited
30 September 30 September 31 March
2021 2020 2021
No. No. No.
Basic weighted average number of
shares in issue 196,570,487 194,523,778 195,224,730
Dilutive effect of share options 4,873,340 3,157,853 3,281,173
--------------
Diluted weighted average number
of shares in issue 201,443,827 197,681,631 198,505,903
-------------- -------------- ------------
Unaudited Unaudited Audited
6 months to 6 months to Year to
30 September 30 September 31 March 2021
2021 2020
Pence Pence Pence
per per per
share GBP'000 share GBP'000 share GBP'000
Profit attributable to
equity holders of the
Company 5.6 11,190 6.0 11,776 13.5 26,878
------- ---------- ------- ---------- ------- ----------
Adjusted
Adjusted earnings per share is defined as adjusted operating
profit less net finance costs and adjusted tax divided by the basic
weighted average number of ordinary shares of the Company.
(Restated) (1) (Restated) (1)
Unaudited Unaudited Audited
6 months to 6 months to Year to
30 September 2021 30 September 2020 31 March 2021
Basic Diluted Basic Diluted Basic Diluted
pence pence pence pence pence pence
per per per per per per
GBP'000 share share GBP'000 share share GBP'000 share share
Adjusted
operating
profit 27,783 14.1 13.8 26,836 13.8 13.6 57,896 29.7 29.2
Less net
finance
costs (462) (0.2) (0.2) (802) (0.4) (0.4) (1,240) (0.6) (0.6)
Less
adjusted
tax (5,309) (2.7) (2.7) (5,443) (2.8) (2.8) (12,175) (6.3) (6.2)
Adjusted
earnings 22,012 11.2 10.9 20,591 10.6 10.4 44,481 22.8 22.4
--------- ------- -------- --------- ------- -------- --------- ------- --------
(1) Since the 31 March 2021 financial statements were produced,
the Group has decided to amend the adjusted earnings per share
calculation so that an adjusted tax charge is used rather than the
full reported tax charge. The calculation of the adjusted tax
charge is consistent with the calculation of adjusted operating
profit and therefore excludes the impact on tax of amortisation of
acquired intangibles, equity-settled share-based payments and
exceptional items.
This has resulted in a restatement of the comparative figures
for the 6 months to 30 September 2020 and year to 31 March
2021.
The impact of the prior period restatement on the 6 months to 30
September 2020 was a decrease in adjusted earnings of GBP2,359,000
and a decrease to adjusted basic earnings per share for the period
and adjusted diluted earnings per share for the period of 1.2p and
1.2p respectively.
The impact of the prior year restatement on the year to 31 March
2021 was a decrease to adjusted earnings of GBP4,790,000 and a
decrease to adjusted basic earnings per share for the period and
adjusted diluted earnings per share for the period of 2.4p and 2.4p
respectively.
8. DIVIDS PAID AND PROPOSED
Unaudited Unaudited Audited
6 months 6 months Year to
to to 31 March
30 September 30 September 2021
2021 2020
GBP'000 GBP'000 GBP'000
Declared and paid during the period
Final dividend for 2021: 3.40p (2020:
nil per share) 6,677 - 5,883
-------------- -------------- ----------
Proposed for approval at AGM (not
recognised as a liability at 31
March)
Final dividend for 2021: 3.40p (2020:
nil per share) - - 6,674
-------------- -------------- ----------
Interim dividend (not recognised
as a liability at 30 September)
Interim dividend for 2021/22: nil
per share (2020/21: 3.00p per share) - 5,855 -
------
9. NON-CURRENT ASSETS
Property, Right-of-use
plant & equipment assets Goodwill Intangibles
GBP'000 GBP'000 GBP'000 GBP'000
Cost
Opening net book
value at 1 April
2021 3,706 3,231 286,351 91,312
Additions 788 235 - 46
Disposals (9) - - -
Depreciation/amortisation (644) (903) - (8,679)
Foreign exchange
movement (28) (18) 3,180 1,131
Closing net book
value at 30 September
2021 3,813 2,545 289,531 83,810
-------------------- --------------- ---------- ------------
10. CONTINGENT CONSIDERATION
30 September 30 September 31 March
2021 2020 2021
GBP'000 GBP'000 GBP'000
Opening 3,662 6,179 6,179
Recognition on the acquisition of
subsidiary undertakings - 747 747
Foreign exchange movement 90 (176) (452)
Settlement discount - - (50)
Settlement of consideration - (2,089) (2,762)
Closing 3,752 4,661 3,662
--------------- --------------- -------------------------
Analysed as:
Amounts falling due within 12 months 3,752 4,203 3,662
Amounts falling due after one year - 458 -
------ ------ ------
3,752 4,661 3,662
------ ------ ------
Contingent consideration is in respect of the IDology
acquisition and is in respect of the pre-acquisition tax losses
within IDology Inc. As and when GBG receives a cash benefit from
these losses, either through a reduction in tax payments or through
a tax refund, an amount equal to the cash benefit is due to the
sellers.
11. FINANCIAL INSTRUMENTS - FAIR VALUE MEASUREMENT
The objectives, policies and strategies pursued by the Group in
relation to financial instruments are described within the 2021
Annual Report.
All financial assets and liabilities have a carrying value that
approximates to fair value. For trade and other receivables,
allowances are made within the book value for credit risk. The
Group does not have any derivative financial instruments.
Financial instruments that are recognised at fair value
subsequent to initial recognition are classified using a fair value
hierarchy that reflects the significance of inputs used in making
measurements of fair value .
The fair value hierarchy has the following levels:
-- Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities;
-- Level 2 - Inputs other than quoted prices included within
Level 1 that are observable for the asset or liability, either
directly (i.e. as prices) or indirectly (i.e. derived from prices);
and
-- Level 3 - Inputs for the asset or liability that are not
based on observable market data (unobservable inputs).
For financial instruments that are recognised at the fair value
on a recurring basis, the Group determines whether transfers have
occurred between levels in the hierarchy by re-assessing
categorisation (based on the lowest level input that is significant
to the fair value measurement as a whole) at the end of each
reporting period.
At 30 September 2021, the Group had a non-listed equity
investment and contingent consideration which were measured at
Level 3 fair value subsequent to initial recognition. The fair
value of the non-listed equity investment was GBP2,288,000 (30
September 2020: GBP2,288,000). The fair value of the contingent
consideration was GBP3,752,000 (30 September 2020: GBP4,661,000)
with the resulting gain or loss being recognised in the
consolidated income statement within operating expenses.
12. SHARE-BASED PAYMENTS
The Group operates Executive Share Option Schemes under which
Executive Directors, managers and staff of the Group are granted
options over shares.
During the six months ended 30 September 2021, the following
share options were granted to Executive Directors and team
members.
Scheme Date No. of options Exercise Fair value
price
1 April - 652.0p -
LTIP 16 July 2021 1,240,125 2.5p 893.0p
504.0p -
Share Match Awards 6 July 2021 326,944 2.5p 825.0p
SAYE (3 Year) 19 August 278,704 6.63p-8.85p 217.0p -
2021 303.0p
SAYE (5 Year) 19 August 36,136 6.63p-8.85p 273.0p -
2021 347.0p
The charge recognised from equity-settled share-based payments
in respect of employee services received during the period was
GBP3,865,000 (2020: GBP2,023,000).
13. CONTINGENT LIABILITY
The Information Commissioner's Office, the data industry
regulator in the UK, announced in November 2018 that it was
conducting audits on a number of companies to understand the use of
data in their services. GBG was included in this review and is
working with the Commissioner to continue to improve its privacy
compliance. We will keep investors informed of any material
developments.
14. RELATED PARTY TRANSACTIONS
During the period, the Group has not entered into transactions,
in the ordinary course of business, with other related parties
(2020: GBPnil).
Compensation of key management personnel (including
directors)
6 months 6 months
to to Year to
30 September 30 September 31 March
2021 2020 2021
GBP'000 GBP'000 GBP'000
Short-term employee benefits 1,622 1,064 2,974
Post-employment benefits - 81 74
Fair value of share options awarded 3,653 3,324 2,862
--------------- --------------- ----------
5,275 4,469 5,910
--------------- --------------- ----------
15. SUBSEQUENT EVENTS
On 18 November 2021, the Group refinanced its existing revolving
credit facility and the total facility was increased to a GBP175m
multi-currency facility. The debt bears an interest rate of
Sterling Overnight Index Average (SONIA) for GBP drawdowns or
Secured Overnight Financing Rate (SOFR) for USD drawdowns plus a
margin of between 1.6% and 2.4% depending on the Group's current
leverage position. The margin payable based on the leverage
position following the drawdown of $210m detailed below is 1.75%.
The facility is due to expire in July 2025 with two one-year
extension options. An arrangement fee of GBP1.12m was paid in
relation to the extension.
On 29 November 2021, the Group acquired 100% of the issued share
capital of Acuant Intermediate Holding Corp ("Acuant"), a leading
North American identity verification platform, for total
consideration of $736m (GBP547m). Consideration for the acquisition
was $619m (GBP462m) in cash and $117m (GBP87m) in GB Group plc
shares issued directly to the Acuant vendors. The cash
consideration was funded $404m (GBP305m) from an equity placing of
42 million new ordinary shares in GB Group plc, a partial drawdown
of $210m (GBP155m) from the Group's renewed revolving credit
facility and the remaining balance being funded by existing cash
resources. The acquisition of Acuant increases GBG's US presence,
accelerates GBG's data, product and platform strategy and provides
further customer and sector diversification.
As the acquisition completed on the same date as the approval of
these financial statements, a detailed assessment of the book and
fair value of the identifiable net assets, liabilities acquired and
goodwill arising on the transaction has not been completed and have
therefore not been disclosed.
Whilst fair value adjustments, and recognition of separate
intangible assets (such as customer relationships and software
technology), will result in a reduction to goodwill, it is expected
that some goodwill will be recognised. The goodwill represents
items, such as intangible assets that cannot be individually
separated and reliably measured from Acuant due to their nature.
These items include the value of Acuant management and team
members, the capability for synergies from bringing the businesses
together, combining propositions and capabilities that will help
the business achieve accelerated consolidated growth from both
cross-sell and up-sell. None of the goodwill is expected to be
deductible for income tax purposes.
16. ALTERNATIVE PERFORMANCE MEASURES
Management assess the performance of the Group using a variety
of alternative performance measures. In the discussion of the
Group's reported operating results, alternative performance
measures are presented to provide readers with additional financial
information that is regularly reviewed by management. However, this
additional information presented is not uniformly defined by all
companies including those in the Group's industry. Accordingly, it
may not be comparable with similarly titled measures and
disclosures by other companies. Additionally, certain information
presented is derived from amounts calculated in accordance with
IFRS but is not itself an expressly permitted GAAP measure. Such
measures are not defined under IFRS and are therefore termed
'non-GAAP' measures and should not be viewed in isolation or as an
alternative to the equivalent GAAP measure.
The Group's income statement and segmental analysis separately
identify trading results before certain items. The directors
believe that presentation of the Group's results in this way is
relevant to an understanding of the Group's financial performance,
as such items are identified by virtue of their size, nature or
incidence. This presentation is consistent with the way that
financial performance is measured by management and reported to the
Board and assists in providing a meaningful analysis of the trading
results of the Group. In determining whether an event or
transaction is presented separately, management considers
quantitative as well as qualitative factors such as the frequency
or predictability of occurrence. Examples of charges or credits
meeting the above definition, and which have been presented
separately in the current and/or prior years include amortisation
of acquired intangibles, share-based payments charges, acquisition
related costs and business restructuring programmes. In the event
that other items meet the criteria, which are applied consistently
from year to year, they are also presented separately.
The following are the key non-GAAP measures used by the
Group:
Organic Growth
Organic growth is defined by the Group as year-on-year
continuing revenue growth, excluding acquisitions which are
included only after the first anniversary following their
purchase.
Constant Currency
Constant currency means that non-Pound Sterling revenue in the
comparative period is translated at the same exchange rate applied
to the current year non-Sterling revenue. This therefore eliminates
the impact of fluctuations in exchange rates on underlying
performance.
Unaudited Unaudited
30 September 30 September Growth
2021 2020
GBP'000 GBP'000 %
Group revenue 109,154 103,545 5.4%
Revenue from acquisitions
up to their first anniversary (412) - (0.4%)
Revenue from disposals (38) (3,273) 3.4%
Organic revenue 108,704 100,272 8.4%
Constant currency adjustment - (3,694) 4.2%
-------------- -------------- ---------
Organic revenue at constant
currency 108,704 96,578 12.6%
Adjusted Operating Profit
Adjusted operating profit means operating profit before
amortisation of acquired intangibles, share-based payment charges
and exceptional items.
Unaudited Unaudited
30 September 30 September
2021 2020
GBP'000 GBP'000
Operating profit 14,847 15,662
Amortisation of acquired intangibles 8,581 9,058
Share-based payment charges 3,865 2,023
Exceptional items 490 93
Adjusted Operating Profit 27,783 26,836
16. ALTERNATIVE PERFORMANCE MEASURES (continued)
Adjusted Operating Profit Margin
Adjusted operating profit margin Adjusted Operating Profit as a
percentage of revenue.
Unaudited Unaudited
30 September 30 September
2021 2020
GBP'000 GBP'000
Adjusted operating profit 27,783 26,836
Group revenue 109,154 103,545
Adjusted Operating Profit Margin 25.5% 25.9%
Operating Profit Before Exceptional Items
Adjusted operating profit less amortisation of acquired
intangibles and share-based payments charge.
Unaudited Unaudited
30 September 30 September
2021 2020
GBP'000 GBP'000
Adjusted operating profit 27,783 26,836
Amortisation of acquired intangibles (8,581) (9,058)
Share-based payment charges (3,865) (2,023)
Operating profit before exceptional
items 15,337 15,755
Adjusted EBITDA
Adjusted EBITDA means Adjusted Operating Profit before
depreciation and amortisation of non-acquired intangibles.
Unaudited Unaudited
30 September 30 September
2021 2020
GBP'000 GBP'000
Adjusted Operating Profit 27,783 26,836
Depreciation of property, plant
and equipment 644 742
Depreciation of right-of-use assets 903 948
Amortisation of non-acquired intangibles 98 123
Adjusted EBITDA 29,428 28,649
Adjusted Tax
Adjusted Tax means income tax charge before the tax impact of
amortisation of acquired intangibles, share-based payment charges
and exceptional items.
1 March
2021
Unaudited Unaudited Unaudited
30 September 30 September 31 March
2021 2020 2021
GBP'000 GBP'000 GBP'000
Income tax charge 3,195 3,084 7,385
Tax impact of amortisation
of acquired intangibles 1,311 2,214 4,541
Tax impact of share-based
payments charges 803 390 1,067
Tax impact of exceptional
items - (155) (818)
Adjusted Tax 5,309 5,443 12,175
16. ALTERNATIVE PERFORMANCE MEASURES (continued)
Adjusted Earnings
Adjusted earnings represent Adjusted Operating Profit less net
finance costs and adjusted income tax charges. Refer to note 7 for
calculation.
Adjusted Earnings Per Share ('Adjusted EPS')
Adjusted EPS represents adjusted earnings divided by a weighted
average number of shares in issue, and is disclosed to indicate the
underlying profitability of the Group. Refer to note 7 for
calculation.
Net Cash/Debt
This is calculated as cash and cash equivalent balances less
outstanding external loans. Unamortised loan arrangement fees are
netted against the loan balance in the financial statements but are
excluded from the calculation of net cash/debt. Lease liabilities
are not included in the calculation of net debt.
2021 2020
Unaudited Unaudited
30 September 30 September
2021 2020
GBP'000 GBP'000
Cash and cash equivalents 39,499 32,281
-------------- --------------
Loans on balance sheet - 34,736
Unamortised loan arrangement fees
(1) - 264
-------------- --------------
External Loans - 35,000
Net Cash/(Debt) 39,499 (2,719)
(1) At 30 September 2021, unamortised loan arrangement fees of
GBP269,000 relating to the revolving credit facility have been
reclassified from loans to prepayments due to the loan value being
GBPnil at 30 September 2021 and the net position is therefore an
asset rather than a liability. Unamortised fees at 30 September
2021 are higher than at 30 September 2020 due to a fee of
GBP193,000 paid in January 2021 to exercise a one-year extension
option.
Cash Conversion %
This is calculated as cash generated from operations in the
Consolidated Cash Flow Statement, adjusted to exclude cash payments
for exceptional items, as a percentage of Adjusted EBITDA.
2021 2020
Unaudited Unaudited
30 September 30 September
2021 2020
GBP'000 GBP'000
Cash generated from operations before tax payments
(from Consolidated Cash Flow Statement) 32,471 44,182
Total exceptional items 490 93
Accrued cash exceptional items 549 -
at the start of the period paid
in the current period
Accrued cash exceptional items (273) -
at the end of the period
Non-cash exceptional items (90) 97
Cash generated from operations before tax payments
and exceptional items paid 33,147 44,372
Adjusted EBITDA 29,428 28,649
Cash Conversion % 112.6% 154.9%
Independent Review Report to GB Group 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 September 2021 which comprises Condensed
Consolidated Statement of Profit or Loss, Condensed Consolidated
Statement of Comprehensive Income, Condensed Consolidated Statement
of Changes in Equity, Condensed Consolidated Balance Sheet,
Condensed Consolidated Cash Flow Statement and the related
explanatory notes 1 to 15. We have read the other information
contained in the half yearly financial report and considered
whether it contains any apparent misstatements or material
inconsistencies with the information in the condensed set of
financial statements.
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
September 2021 is not prepared, in all material respects, in
accordance with UK adopted International Accounting Standard 34 and
the Disclosure Guidance and Transparency Rules of the United
Kingdom's Financial Conduct Authority.
Basis for Conclusion
We conducted our review in accordance with International
Standard on Review Engagements 2410 (UK and Ireland) "Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity" issued by the Auditing Practices Board. A review of
interim financial information consists of making enquiries,
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 2, the annual financial statements of the
Company will be prepared in accordance with UK adopted
international accounting standards. The condensed set of financial
statements included in this half-yearly financial report has been
prepared in accordance with UK adopted International Accounting
Standard 34, "Interim Financial Reporting".
Responsibilities of the directors
The directors are responsible for preparing the half-yearly
financial report in accordance with the Disclosure Guidance and
Transparency Rules of the United Kingdom's Financial Conduct
Authority
Auditor's Responsibilities for the review of the financial
information
In reviewing the half-yearly report, we are responsible for
expressing to the Company a conclusion on the condensed set of
financial statements in the half-yearly financial report. Our
conclusion is 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
guidance contained in International Standard on Review Engagements
2410 (UK and Ireland) "Review of Interim Financial Information
Performed by the Independent Auditor of the Entity" issued by the
Auditing Practices Board. To the fullest extent permitted by law,
we do not accept or assume responsibility to anyone other than the
company, for our work, for this report, or for the conclusions we
have formed.
Ernst & Young LLP
Leeds
29 November 2021
[1] Software subscriptions can be term-based where the agreement
entitles the customer to use a GBG solution for a fixed period of
time (fair use volume limits applies) or consumption-based, whereby
a customer buys usage credits in advance which entitle them to use
of GBG's solutions up to a fixed quantity (and within a fixed time
period).
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
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END
IR PPGCAGUPGGQB
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