“Ambition” was perhaps the key word within YouGov's (YOU) results for the six months to January 2019. Indeed, the group used its half-year announcement to unveil “stretching” new targets, which will “ensure we continue at pace to build on the strong business we have worked hard to create”. Between the end of this financial year and 2023, it aims to double revenues, double the adjusted operating profit margin and achieve a compound annual growth rate of more than 30 per cent for its adjusted EPS. Management’s remuneration is to be tied to these objectives.
YouGov is now in the final year of its current five-year growth strategy, which has seen it focus increasingly on its data products and services capabilities – areas that “have operational leverage”. Total revenues from these businesses rose 34 per cent to £37.2m in the first half, or by 17 per cent on an organic basis – representing more than 50 per cent of the overall top line.
Data products includes ‘YouGov Profiles’ – the group’s consumer segmentation and targeting tool – and ‘YouGov BrandIndex’ – its flagship daily brand measurement platform. Here, sales rose by 35 per cent to £19.4m, and the adjusted operating margin climbed from 33 per cent to 38 per cent – partly reflecting lower usage of third-party data collection. By geography, the only weak spot was the UK, where revenues grew by 29 per cent against 43 per cent a year earlier – something YouGov attributed to higher new business sales in the second half of FY2018.
For data services, revenues rose by a third to £17.8m. The adjusted operating margin here dipped from 26 per cent to 25 per cent, after the lower-margin ‘Omnibus’ business was moved across from YouGov’s custom research division. Custom research saw only a small improvement in revenues: 4 per cent, to £30.4m. But restructuring and a reduction in operating costs as a percentage of sales helped its margin to edge up by two percentage points, to 26 per cent.
House broker Numis expects adjusted pre-tax profits of £18.1m and EPS of 11.8p for the year to July 2019, up from £13.6m and 9.1p in FY2018.
| YOUGOV (YOU) | ||||
| ORD PRICE: | 468p | MARKET VALUE: | £492m | |
| TOUCH: | 460-475p | 12-MONTH HIGH: | 510p | LOW: 379p |
| DIVIDEND YIELD: | 0.6% | PE RATIO: | 43 | |
| NET ASSET VALUE: | 89p* | NET CASH: | £25m | |
| Half-year to 31 Jan | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2018 | 56.3 | 4.5 | 2.2 | nil |
| 2019 | 66.5 | 8.3 | 5.4 | nil |
| % change | +18 | +85 | +145 | - |
| Ex-div: | na | |||
| Payment: | na | |||
| *Includes intangible assets of £79m, or 75p a share | ||||
