GlobalData upbeat on first half results

Data, analytics, and insights specialist GlobalData reported a solid set of first-half results on Wednesday, highlighted by an 8% increase in adjusted EBITDA to £57.8m, driving an improved EBITDA margin of 41%, up from 39% in the first half of 2023.

The AIM-traded company’s profit before tax grew 13% to £26.9m.

Group revenue for the period was £139.6m, up 3% from £135.9m in the first half of 2023, despite a negative impact from foreign exchange.

On an underlying basis, revenue growth was 5%, underpinned by the high-quality subscription revenue that accounted for 78% of the total.

The healthcare segment showed a robust performance, with revenue rising to £53.7m, while the non-Healthcare segment reported steady revenue at £85.9m.

Operating cash flow saw a significant 19% increase to £75.2m, resulting in a strong cash conversion rate of 130%.

The firm’s balance sheet was reshaped following a 40% investment in the healthcare business by Inflexion, generating gross proceeds of £451.4m.

That transaction enabled GlobalData to fully settle its existing debt, leaving the group in a net cash position of £188.3m.

GlobalData said it continued to advance its growth transformation plan for 2024 to 2026, focusing on customer-centric reorganisation, product enhancement through AI integration, and expanding sales capacity.

The reorganisation into three divisions - healthcare, consumer and technology - had progressed, with the healthcare division now fully operational.

GlobalData said it also accelerated its AI transformation, with 29% of clients gaining access to the AI Hub by July, up from 8% in December.

Strategic investments were made in both personnel and merger and acquisition activities, including a conditional agreement to acquire digital media and industry news assets for £10m and a £4m minority investment in a tech-enabled solution provider.

In terms of capital allocation, GlobalData said it was focussed on achieving long-term growth and enhancing shareholder value.

The company planned to rebase its dividend payout from July, redirecting much of the free cash flow from its healthcare business towards mergers and acquisitions, while maintaining a progressive dividend policy.

Additionally, GlobalData had launched an on-market share buyback program of up to £10m.

Looking ahead, GlobalData said it was confident in maintaining its growth trajectory, with expectations to deliver results in line with its full-year 2024 forecasts.

The company was aiming to achieve a 45% adjusted EBITDA margin over the next three years, and targeted high single- to double-digit organic revenue growth, supplemented by strategic acquisitions, to exceed £500m in annualised revenue.

“We have started the year well and remain confident in GlobalData's continued ability to generate sustainable value for its stakeholders,” said chief executive officer Mike Danson.

“Now in the first year of our growth transformation plan 2024-2026, we have been laying the foundations for future success.

“We are exiting this ramp-up phase of our ambitious plan in a strong position.”

Danson said the company had made several key senior hires across the business, implemented a refreshed approach to customer proposition and invested in its go-to-market approach, strengthening its sales and AI resources.

“We entered 2024 in a strong position with good traction in subscription revenue and over 80% revenue visibility and remain on track to deliver on our expectations for the full year.

“With the investment from Inflexion now complete, combined with a highly profitable, cash generative business model, we enter the second half in a strong financial position able to pursue growth more aggressively through organic and inorganic means, as we drive toward our target of £500m annual revenue by the end of the three-year growth plan.”

At 1144 BST, shares in GlobalData were down 0.52% at 215.88p.

Reporting by Josh White for Sharecast.com.