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GlobalData shareholders have had an interesting ride. Long-term holders have done well out of a company which has grown largely through acquisitions that have included retail consultancy Verdict, construction and insurance data firm Timetric and IHS Markit’s life sciences arm, among others.
The company, founded by chief executive Mike Danson, has doubled its share price since 2018 and continued to deliver profits since the onset of the pandemic. However, pre-tax profit in the half-year to June fell by 6 per cent to £15mn as finance costs ticked up.
This is unsurprising given that net debt (excluding leases) quadrupled to almost £191mn in the year to June, with the cash used to fund acquisitions, share buybacks and dividend payments.
The threat of higher interest rates rise is clearly a concern for some investors — GlobalData’s shares are down 27 per cent since the start of the year.
The company doesn’t seem too concerned, though. It agreed new funding in August, signing a three-year debt deal worth a total of £410mn, replacing existing facilities worth £340mn. Danson said at the time the renegotiated package provided “additional firepower” for more mergers. It has since completed the purchase of economic research firm TS Lombard.
FactSet data shows the company’s shares trade at a forward price-to-earnings ratio of 23, well below their five-year average of almost 37.
The sell-off in its shares has presented an “unusually attractive” risk/reward imbalance, according to broker Panmure Gordon said. Yet although GlobalData makes handsome gross margins the additional borrowing undoubtedly adds risk — and on a price-to-book basis its valuation has increased to 13.5-times net assets, up from a five-year average of 9.2-times.
Either way, Danson has seen fit to reduce his own exposure, selling 750,000 shares on 13 October and pocketing £7.8mn in the process. He still holds around 74mn shares, though, or more than 62 per cent of the company.
Superdry chief makes chunky share purchase
Superdry’s shares are in the doldrums. Having hit the 2,100p mark at the start of 2018, they now trade at under 130p. Some hope was offered by the release earlier.
this month of solid annual results, in which a return to statutory profit was underpinned by chief executive Julian Dunkerton’s focus on a full-price strategy and by the reopening of the estate after the previous financial year was hit by shop closures and pandemic restrictions.
For the year to 30 April, revenue rose by 10 per cent and gross margin increased by 350 basis points to 56 per cent. Management said it was offsetting cost headwinds through price increases and by a delivery fee for online orders.
House broker Peel Hunt said after the results that the company enjoys “a current trading position that defies much of the sector gloom”.
Dunkerton seems to be in a similarly bullish mood regarding the company’s prospects. He bought £2mn-worth of shares on October 13 at 111p each, taking his total shareholding to 24 per cent. A separate disclosure showed that Schroders has also been buying in — the asset manager now owns 5 per cent of Superdry shares, according to the filing.
The immediate retail environment is challenging. Superdry expects to post adjusted profit before tax in a range of £10-£20mn for the 2023 financial year, after recording £22mn for 2022. And gross margin was down by 230 basis points for the 22 weeks to October 1.
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