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Currency in GBP
Last close As at 17/03/2023
GBP9.36
▲ 16.00 (1.74%)
Market capitalisation
GBP1,043m
Research: TMT
YouGov’s year-end trading update (to end-July) indicates results in line with management expectations, with underlying growth across all segments and a ‘modest’ step up in operating margin. Our FY22 forecasts are therefore unchanged, as are those for FY23. We now also publish our first thoughts on FY24, showing continuing progress on revenue and margin as the increased productisation drives efficiencies. YouGov’s share price performance year-to-date has been affected by the rotation away from and derating of higher-growth and tech stocks. Its valuation remains at the higher end of peers, reflecting its continued positive prospects.
YouGov |
Cautiously optimistic for FY23 |
Year-end trading update |
Media |
8 August 2022 |
Share price performance
Business description
Next events
Analyst
YouGov is a research client of Edison Investment Research Limited |
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YouGov’s year-end trading update (to end-July) indicates results in line with management expectations, with underlying growth across all segments and a ‘modest’ step up in operating margin. Our FY22 forecasts are therefore unchanged, as are those for FY23. We now also publish our first thoughts on FY24, showing continuing progress on revenue and margin as the increased productisation drives efficiencies. YouGov’s share price performance year-to-date has been affected by the rotation away from and derating of higher-growth and tech stocks. Its valuation remains at the higher end of peers, reflecting its continued positive prospects.
Year end |
Revenue (£m) |
PBT* |
EPS* |
DPS |
EV/EBITDA (x) |
P/E |
07/21 |
169.0 |
30.5 |
17.6 |
6.0 |
23.8 |
60.1 |
07/22e |
215.0 |
41.4 |
24.6 |
7.5 |
18.8 |
43.1 |
07/23e |
255.0 |
53.4 |
32.7 |
10.0 |
15.4 |
32.4 |
07/24e |
290.0 |
62.0 |
38.5 |
11.0 |
13.5 |
27.5 |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
Progress across the client offerings
The update highlights the continuing success of panel-based Custom Research, where the connected data offering has outstripped expectations. In H122 divisional revenues grew 28%, boosted to 39% with acquisitions, so it seems that momentum has continued in H222, with client expansion in technology, retail and gaming. Data Products continues to benefit from last year’s sales reorganisation, while growth has improved in Data Services in H222. The US market is highlighted as the key growth driver, with the progress in delivering trackers and more scalable custom research supporting the margin expansion. The recent acquisitions, Rezonence and LINK, are reported to be performing well and in line with expectations.
Positive momentum versus macro uncertainty
Management is not seeing any significant change in client behaviour regarding macroeconomic prospects at this stage but remains alert to the possibility. The combination of the current positive momentum and this element of uncertainty lead us to leave our forecasts unchanged ahead of the results in October. We also now publish our initial thoughts on FY24e, with top-line growth of 14% and a further nudge up in operating margin as the degree of productisation increases across group activities. We envisage net cash continuing to build, to c£50m by end FY23 and £80m at end FY24, giving scope for additional M&A as opportunities arise.
Valuation: Reflects growth and prospects
YouGov’s share price is 34% below the level at which it began the year, while global peers have fallen by 21% on average. Nevertheless, it still trades towards the higher end of the (wide) range of ratings accorded to other global data-led research and analytics groups on both EV/EBITDA and P/E. We believe this reflects its good growth record, premium margins, balance sheet strength and continued positive prospects.
Exhibit 1: Financial summary
£'000s |
2020 |
2021 |
2022e |
2023e |
2024e |
||
Year end 31 July |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
||
PROFIT & LOSS |
|||||||
Revenue |
|
|
152,441 |
169,000 |
215,000 |
255,000 |
290,000 |
Cost of Sales |
(23,375) |
(26,200) |
(34,400) |
(44,304) |
(50,318) |
||
Gross Profit |
129,067 |
142,800 |
180,600 |
210,696 |
239,683 |
||
EBITDA |
|
|
39,215 |
45,900 |
58,100 |
71,100 |
80,833 |
Operating Profit (before amort. and excepts.) |
|
|
21,830 |
25,500 |
36,500 |
48,500 |
57,100 |
Intangible Amortisation |
(12,885) |
(15,300) |
(16,500) |
(17,500) |
(18,633) |
||
Share based payments |
(2,900) |
(5,100) |
(5,000) |
(5,000) |
(5,000) |
||
Exceptionals |
(6,630) |
(6,500) |
(3,600) |
(2,500) |
(2,500) |
||
Other |
0 |
0 |
0 |
0 |
0 |
||
Operating Profit |
15,200 |
19,000 |
32,900 |
46,000 |
54,600 |
||
Net Interest |
7 |
(100) |
(150) |
(125) |
(125) |
||
Profit Before Tax (norm) |
|
|
24,737 |
30,500 |
41,350 |
53,375 |
61,975 |
Profit Before Tax (IFRS 16) |
|
|
15,207 |
18,900 |
32,750 |
45,875 |
54,475 |
Tax |
(5,812) |
(7,400) |
(9,644) |
(12,845) |
(15,253) |
||
Profit After Tax (norm) |
18,925 |
23,100 |
31,706 |
40,530 |
46,722 |
||
Profit After Tax (IFRS 16) |
9,395 |
11,500 |
23,106 |
33,030 |
39,222 |
||
Average Number of Shares Outstanding (m) |
106.7 |
109.7 |
111.3 |
111.3 |
111.3 |
||
EPS - normalised (p) |
|
|
15.7 |
17.6 |
24.6 |
32.7 |
38.5 |
EPS - IFRS 16 (p) |
|
|
9.0 |
10.5 |
20.8 |
29.7 |
35.2 |
Dividend per share (p) |
5.0 |
6.0 |
7.5 |
10.0 |
11.0 |
||
Gross Margin (%) |
84.7 |
84.5 |
84.0 |
82.6 |
82.6 |
||
EBITDA Margin (%) |
25.7 |
27.2 |
27.0 |
27.9 |
27.9 |
||
Operating Margin (before GW and except) (%) |
14.3 |
15.1 |
17.0 |
19.0 |
19.7 |
||
BALANCE SHEET |
|||||||
Fixed Assets |
|
|
108,122 |
113,491 |
140,400 |
133,709 |
138,142 |
Intangible Assets |
84,611 |
89,611 |
116,111 |
119,911 |
123,278 |
||
Tangible Assets |
23,511 |
23,813 |
24,222 |
13,731 |
14,798 |
||
Investments |
0 |
67 |
67 |
67 |
67 |
||
Current Assets |
|
|
70,255 |
82,409 |
81,081 |
116,562 |
155,454 |
Stocks |
0 |
0 |
0 |
0 |
0 |
||
Debtors |
34,239 |
40,700 |
50,381 |
59,862 |
68,872 |
||
Cash |
35,309 |
35,509 |
24,500 |
50,500 |
80,381 |
||
Current Liabilities |
|
|
(52,813) |
(67,200) |
(79,049) |
(90,556) |
(101,625) |
Creditors |
(52,813) |
(67,200) |
(79,049) |
(90,556) |
(101,625) |
||
Short term borrowings |
0 |
0 |
0 |
0 |
0 |
||
Long Term Liabilities |
|
|
(16,226) |
(16,700) |
(16,700) |
(16,700) |
(16,700) |
Long term borrowings |
0 |
0 |
0 |
0 |
0 |
||
Other long term liabilities |
(16,226) |
(16,700) |
(16,700) |
(16,700) |
(16,700) |
||
Net Assets |
|
|
109,338 |
112,000 |
125,732 |
143,014 |
175,272 |
CASH FLOW |
|||||||
Operating Cash Flow |
|
|
38,411 |
56,600 |
62,468 |
73,127 |
82,891 |
Net Interest |
(7) |
(300) |
150 |
125 |
125 |
||
Tax |
(3,184) |
(7,100) |
(9,644) |
(12,845) |
(15,253) |
||
Capex |
(18,559) |
(23,800) |
(23,800) |
(23,800) |
(24,500) |
||
Acquisitions/disposals |
(7,451) |
(12,600) |
(31,200) |
0 |
0 |
||
Financing |
(4,739) |
(2,200) |
(2,000) |
(2,000) |
(2,000) |
||
Dividends |
(4,298) |
(5,500) |
(6,679) |
(8,349) |
(11,132) |
||
Net Cash Flow |
173 |
5,100 |
(10,705) |
26,258 |
30,131 |
||
Opening net debt/(cash) |
|
|
(37,925) |
(35,309) |
(35,509) |
(24,500) |
(50,500) |
HP finance leases initiated |
0 |
0 |
0 |
0 |
0 |
||
Other |
(2,789) |
(4,900) |
(304) |
(258) |
(250) |
||
Closing net debt/(cash) |
|
|
(35,309) |
(35,509) |
(24,500) |
(50,500) |
(80,381) |
Source: Company accounts, Edison Investment Research
|
|
Research: Investment Companies
Abrdn Private Equity Opportunities Trust (APEO) posted a 6.8% NAV total return (TR) in H122 (ending March 2022), which was a function of a robust return in late 2021 (in calendar Q421 at 5.2%, driven by profitable exits). The NAV TR between end-December 2021 and end-June 2022 stands at 2.4%, but its latest NAV is still largely based on end-March 2022 valuations and does not capture the subsequent sell-off in public equities. APEO’s manager acknowledges that macro headwinds are likely to exert pressure on corporate earnings and portfolio valuations in H222. We note that this has already been reflected in its share price as APEO’s discount to NAV widened to c 39% (versus 20% in our February 2022 note).
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