Data Products stand out

YouGov 31 July 2020 Update
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YouGov

Data Products stand out

Year-end update

Media

31 July 2020

Price

800p

Market cap

£867m

$1.27/£1

Net cash (£m) at end January 2020 (IFRS basis)

27.2

Shares in issue

108.4m

Free float

61.8%

Code

YOU

Primary exchange

AIM

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

3.9

19.4

40.3

Rel (local)

6.6

17.1

75.8

52-week high/low

810p

400p

Business description

YouGov is a global research data and analytics group, with over 9.5 million online panellists across 42 countries. It offers a complementary data-led suite of products and services including YouGov BrandIndex, YouGov Profiles, YouGov Omnibus, YouGov Direct and custom research.

Next events

Full-year results

6 October 2020

AGM

10 December 2020

Analyst

Fiona Orford-Williams

+44 (0)20 3077 5739

YouGov is a research client of Edison Investment Research Limited

YouGov’s year-end update indicates that performance has been in line with expectations and it has yet to see any material impact from COVID-19. Our estimates are unchanged ahead of results on 6 October. Data Products remains the main driver, notably in its more established UK and US markets, as brands keep close track of their standing with customers. The group’s wide spread of sector verticals will have been helpful, with strong tech and e-commerce offsetting weaker retail performance. YouGov’s share price has recovered from the initial pandemic mark-down, with the rating now reflecting its premium growth and strong market positioning.

Year end

Revenue (£m)

PBT*
(£m)

EPS*
(p)

DPS
(p)

EV/EBITDA (x)

P/E
(x)

Yield
(%)

07/18**

116.6

16.3

10.8

3.0

38.9

74.1

0.4

07/19

136.5

20.4

13.8

4.0

24.4

58.0

0.5

07/20e

147.0

23.1

15.4

4.0

25.7

51.9

0.5

07/21e

159.0

26.9

17.2

5.0

23.2

46.5

0.6

Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments. **FY18 restated for the change in treatment of amortisation and share-based payments.

Product power

Our recent Outlook report described YouGov’s operations in some detail. Data Products continues to be the key engine, with Plan & Track increasingly embedded into clients’ workflows, with the product offering continuing to evolve. Data Services has been holding steady. Here the type of project work normally undertaken has understandably been less buoyant but has been compensated for by the large amount of COVID-19-specific research. In Custom Research, the group has successfully managed the tail end of the Kurdistan project. YouGov Sport (bought as SMG Insight) has done better than might have been expected as major sporting bodies look to catch up for lost time in their marketing programmes. The US presidential elections in November 2020 should give further opportunity to market the YouGov brand to a wider audience.

Some COVID-19 opportunities

The pandemic is offering some additional opportunities, both in COVID-19 and health-related work for governments and commercial entities, and in the competitive landscape, where others have been operating with legacy business models less suited to the circumstances. No specifics are given on numbers in the update, beyond results being in line and the year-end cash position described as ‘comfortable’. Our modelling suggests end-July cash of c £34m. For FY21e, we have pencilled in 8% top-line growth, below the 10-year CAGR of 12%, but there is obviously a far greater degree of uncertainty than normal.

Valuation: Premium price for strong positioning

The share price has recovered the initial losses as the COVID-19 situation developed and the stock is one of only two of the global peers to have shown a positive performance over the year. YouGov’s valuation multiples are at the top end of this peer set, reflecting the group’s strong market positioning and balance sheet.

Exhibit 1: Financial summary

£'000s

2018

2019

2020e

2021e

Year end 31 July

IFRS

IFRS

IFRS

IFRS

PROFIT & LOSS

Revenue

 

 

116,559

136,487

147,000

159,000

Cost of Sales

(21,495)

(24,206)

(24,748)

(27,098)

Gross Profit

95,064

112,281

122,251

131,903

EBITDA

 

 

20,907

31,698

32,041

36,120

Operating Profit (before amort. and except.)

 

 

12,650

18,492

21,657

25,511

Intangible Amortisation

(7,026)

(8,809)

(8,809)

(8,809)

Share based payments

(3,571)

(2,401)

(1,250)

(1,250)

Exceptionals

(892)

1,529

0

0

Other

66

200

0

0

Operating Profit

11,824

20,221

21,657

25,511

Net Interest

(51)

(665)

154

137

Profit Before Tax (norm)

 

 

16,302

20,428

23,062

26,898

Profit Before Tax (FRS 3)

 

 

11,773

19,356

21,812

25,648

Tax

(3,615)

(5,086)

(5,638)

(6,657)

Profit After Tax (norm)

12,687

15,342

17,424

20,241

Profit After Tax (FRS 3)

8,158

14,270

14,924

17,741

Average Number of Shares Outstanding (m)

105.4

105.4

107.1

108.4

EPS - normalised (p)

 

 

10.8

13.8

15.4

17.2

EPS - FRS 3 (p)

 

 

7.7

14.1

13.9

16.4

Dividend per share (p)

3.0

4.0

4.0

5.0

Gross Margin (%)

81.6

82.3

83.2

83.0

EBITDA Margin (%)

17.9

23.2

21.8

22.7

Operating Margin (before GW and except) (%)

10.9

13.5

14.7

16.0

BALANCE SHEET

Fixed Assets

 

 

78,019

108,534

121,683

120,380

Intangible Assets

65,357

82,374

90,013

90,204

Tangible Assets

12,471

26,160

31,670

30,176

Investments

191

0

0

0

Current Assets

 

 

66,735

72,581

71,121

71,123

Stocks

0

0

0

0

Debtors

34,672

33,726

36,324

39,289

Cash

30,621

37,925

33,867

30,904

Current Liabilities

 

 

(41,445)

(48,504)

(48,797)

(52,318)

Creditors

(41,445)

(48,504)

(48,797)

(52,318)

Short term borrowings

0

0

0

0

Long Term Liabilities

 

 

(11,238)

(14,060)

(14,060)

(14,060)

Long term borrowings

0

0

0

0

Other long term liabilities

(11,238)

(14,060)

(14,060)

(14,060)

Net Assets

 

 

92,071

118,551

129,947

125,125

CASH FLOW

Operating Cash Flow

 

 

23,617

35,230

27,890

32,019

Net Interest

22

183

154

137

Tax

(5,501)

(4,520)

(3,651)

(4,936)

Capex

(8,181)

(12,166)

(15,000)

(16,500)

Acquisitions/disposals

(885)

(6,583)

(7,448)

(8,600)

Financing

259

(3,652)

(1,500)

0

Dividends

(2,106)

(3,327)

(4,504)

(5,084)

Net Cash Flow

7,225

5,165

(4,058)

(2,964)

Opening net debt/(cash)

 

 

(23,219)

(30,621)

(37,925)

(33,867)

HP finance leases initiated

0

0

0

0

Other

177

2,138

0

0

Closing net debt/(cash)

 

 

(30,621)

(37,925)

(33,867)

(30,903)

Source: Company accounts, Edison Investment Research


General disclaimer and copyright

This report has been commissioned by YouGov and prepared and issued by Edison, in consideration of a fee payable by YouGov. Edison Investment Research standard fees are £49,500 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2020 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1,185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1,185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

General disclaimer and copyright

This report has been commissioned by YouGov and prepared and issued by Edison, in consideration of a fee payable by YouGov. Edison Investment Research standard fees are £49,500 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2020 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1,185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1,185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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