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YouGov robustly placed ahead of tumult

The research and data analytics specialist has benefited from growth in subscription-based revenue
YouGov robustly placed ahead of tumult

As an online data gathering and analysis specialist, YouGov (YOU) is more defensively positioned than most to deal with disruption induced by the Covid-19 outbreak. However, while it has so far seen no material impact on trading, management said it would be “prudent” to anticipate that some clients could delay projects, default or request longer payment terms, as well as a slowdown in some business wins. 

IC TIP: Buy at 654p

Revenues could be helped by growth in data products, which includes flagship daily brand measurement platform ‘YouGov BrandIndex’, which is largely subscription-based. An increase in revenue of more than a quarter for that higher-margin division during the first half helped boost the group adjusted operating margin up to 15 per cent, from 13 per cent in the prior half-year, and adjusted operating profit up more than a third. 

Data services growth came in behind market expectations due to restructuring in the Nordics, non-recurring election work in Asia Pacific and weakness in Germany. However, custom research benefited from completing more higher-margin project work and posted a better-than-expected rise in operating profit of almost a fifth. 

Peel Hunt forecasts adjusted pre-tax profits of £22.2m and EPS of 14.4p for the year to July 2020, rising to £26.1m and 17p the following year.

YOUGOV (YOU)    
ORD PRICE:654pMARKET VALUE:£635m
TOUCH:630-660p12-MONTH HIGH:766pLOW: 391p
DIVIDEND YIELD:0.6%PE RATIO:44
NET ASSET VALUE:96p*NET CASH:£18m**
Half-year to 31 JanTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
2019 (restated)66.58.25.4nil
202076.99.26.2nil
% change+16+12+15-
Ex-div:na   
Payment:na   
*Includes intangible assets of £83m, or 77p a share **Netted against lease liabilities of £10m