In addition to being a prospect researcher, I have been a desktop Linux user for the past 15 years. Over that time, I have used many of the most popular distributions, such as Ubuntu, Fedora, Arch Linux, Debian, Linux Mint, and more. However, right now I am back on Ubuntu, which is probably the most popular linux distribution in the world right now, especially when it comes to people using it as a desktop operating system.
However, the fact that they are a UK company allows me to also look into their corporate filings, even though they are a private company. Unlike private companies in the United States, who aren’t required to file anything with the SEC, private companies in the UK are required to at least file an annual statement with Companies House. Companies House is the business entity registration agency for the UK, and while they don’t provide the same kind of detailed information that the SEC does about US public companies, they provide (infinitely) more information about private companies.
So, what kind of information can you find in Companies House? Let’s take the example of Canonical, the company that makes my favorite Linux distribution, Ubuntu.
Like US private companies, UK private companies have a complicated web of holding companies and shell companies that mask ultimate ownership; this means, that when you search for a company in Companies House, you may get a lot of companies with similar names, or old corporate structures, or things like that. However, once you get into the actual annual filings, Companies House requires that the company state their ultimate controlling organization. This can be a big help in trying to unravel the web of holding companies and trace things back to their ultimate owners.
For Canonical, the makers of Ubuntu, their primary operating entity is Canonical Group Limited. Canonical filed their 2020 annual report a week ago, and so we can now see how this Linux and services based company did as compared to 2019.
The beginning of the annual report is a description of the principal activities of the organization, much like an annual report of a US public company. For Canonical Group Limited, they describe their prinicipal operations as the “sales, engineering and support of Ubuntu services provided by the companies within this group.” Those companies include all of Canonical Group Limited’s subsidiaries, which include those in the United States, China, the UK, Canada, and Japan. They also get into detail about the operations and products of Canonical, which includes Ubuntu on OpenStack, KVM, Kubernetes, and more.
After that description, the annual report gives the top-line accounting numbers for 2020 versus 2019. For Canonical Holdings Limited, the parent company of Canonical Group Limited, their revenue went up from $119M to $139M, and their average number of employees throughout the year went up from 473 to 505.
Four years ago, the company went through a large restructuring, firing dozens of employees and shuttering development on the Unity display system. The fact that both their revenue and their employee count is growing is encouraging for the long-term sustainability of the company, as well as the fact that they are profitable. Currently, the company is not worried about their operating profit number; they say that they want to take any profit and reinvest it in the company, growing the headcount of employees and investing in research and development to maintain their position in the market.
Finally, on the last page (page 33), it states, as everyone who watches Canonical knows, that he ultimate controlling party is Mark Shuttleworth. But, knowing that, we can go back through financial statements and see what that means. In one spot, it says that Canonical Group Limited has been loaned $89M from the controlling entity, and that they have no other loans from outside the group. That means, as of right now, Canonical owes Mark Shuttleworth and the rest of his associated businesses that amount of money. That number is down from previous years, and doesn’t represent the total investment Shuttleworth has made, but it does show that he continues to invest his personal fortune significantly into the company.
This is just an overview of the 33 pages of information that Canonical, and other UK private companies have to file each year. Like I sad at the outset, it is a lot more information than US private companies have to file, and they do give information about the web of holding companies that are in play. If you have prospects who own companies in the UK, you can use Companies House to find plenty of information to do research for your non-profit organization.