Last close As at 06/08/2026
—
— 0.00 (0.00%)
Market capitalisation
—
Research: TMT
Full year results were in line with the July trading update, a little ahead of our published estimates, with revenues up 12% and adjusted operating profit up 18%. Data Products (one-third of group revenue) performed particularly well, with underlying revenues up 21% and operating margin up 70bp to 35.0%. A strong balance sheet (net cash of £35.3m) supports stepped-up investment in both technology and in panel, underpinning the ambitious targets set out for the three remaining years of management’s five-year plan. The valuation remains at the high end of the range of peers.
YouGov |
Data-led progress |
Full year results |
Media |
8 October 2020 |
Share price performance
Business description
Next events
Analyst
YouGov is a research client of Edison Investment Research Limited |
|||||||||||||||||||||||||||||||||||||||||||||
Full year results were in line with the July trading update, a little ahead of our published estimates, with revenues up 12% and adjusted operating profit up 18%. Data Products (one-third of group revenue) performed particularly well, with underlying revenues up 21% and operating margin up 70bp to 35.0%. A strong balance sheet (net cash of £35.3m) supports stepped-up investment in both technology and in panel, underpinning the ambitious targets set out for the three remaining years of management’s five-year plan. The valuation remains at the high end of the range of peers.
Year end |
Revenue (£m) |
PBT* |
EPS* |
DPS |
EV/EBITDA (x) |
P/E |
Yield |
07/19 |
136.5 |
20.4 |
13.8 |
4.0 |
29.2 |
68.8 |
0.4 |
07/20 |
152.4 |
24.7 |
15.7 |
5.0 |
24.7 |
60.5 |
0.5 |
07/21e |
163.0 |
28.5 |
17.4 |
5.5 |
23.9 |
54.6 |
0.6 |
07/22e |
175.0 |
34.2 |
21.2 |
6.5 |
20.6 |
44.8 |
0.7 |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
Seizing market opportunities
YouGov has seen no material impact from COVID-19, with any weakness from clients in the most affected verticals (such as retail) offset by additional work from governments, technology and healthcare clients. YouGov’s constantly refreshed online data has enabled it to service its clients without interruption and it has not needed to adapt its business model beyond a transition to home working. The US presidential election provides a clear opportunity to raise the group’s profile further and boost the commercial marketing of the YouGov brand. There is more to be done in growing the penetration of the group’s products and services within multinational customers and the introduction of key account management, and a sharpened, integrated sales and marketing effort should help progress here.
Investing to support growth
FY20 capital expenditure stepped up to £18.6m, from £12.2m in FY19, with £8.0m spent on technology (principally on survey systems and on upgrading the Crunch data analytics tool) and £8.9m on growing the panels across eight countries and establishing them in four more. This total spend was ahead of the £15.0m we previously modelled. We have also upped our FY21e capex to £18.0m from £16.5m as the group puts in the investment to support future growth. With £35.3m of cash on the balance sheet and no debt (bar lease liabilities), there is plenty of scope for this level of spend, plus an increase in the dividend to 5p (FY19: 4p). We have initiated FY22e forecasts, with a comparatively cautious 7% revenue increase.
Valuation: Premium price for strong positioning
The share price recovered the initial losses as the COVID-19 situation developed, and the stock remains 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, attractive cash generation (104% conversion of adjusted EBITDA in FY20) and cash-positive balance sheet.
Forecasts edged ahead
Results were as flagged in the pre-close update, covered in our July update note. There were two divergences to note from our previous assumptions: higher share-based payments, which came in at £2.9m from the £1.3m we had modelled, and higher capex, referred to above. The former stems from a change in accounting treatment and indicates a more stable level across the life of FYP2, the current long-term strategic growth plan on which management incentives are based, as described in our Outlook report, also published in July. The previous scheme had a lighter charge earlier on, ramping up as it drew towards the end and the likelihood of hitting the targets increased.
As seen below, profits and earnings were pretty much in line with our modelling.
Exhibit 1: Summary financials
EPS (p) |
PBT (£m) |
Adjusted operating profit (£m) |
|||||||
Old |
New |
% chg. |
Old |
New |
% chg. |
Old |
New |
% chg. |
|
2020 |
15.4 |
15.7 |
+2 |
23.1 |
24.7 |
+7 |
21.7 |
21.8 |
= |
2021e |
17.2 |
17.4 |
+1 |
26.9 |
28.5 |
+6 |
25.5 |
25.7 |
+1 |
2022e |
- |
21.2 |
N/A |
- |
34.2 |
N/A |
- |
31.4 |
N/A |
Source: Company accounts, Edison Investment Research. Note: Adjusted to include amortisation and exclude separately reported items. Our normalised EPS are expressed after share-based payments.
Consequently, there is little change to our anticipated outturn for FY21e, although we caution that the continuing impact of the pandemic at the macro and the micro level may throw our underlying assumptions. Broadly, as explained above, the effect to date has been broadly neutral, as some sectors of the economy have flourished while others have struggled.
Prolonged suppression of the global consumer economy would obviously have a deleterious effect, partially offset by the growing importance of a data feedback loop to gauge consumer attitudes and behaviours, both for making commercial and civic judgements.
Our new FY22 forecasts therefore come with a greater degree of uncertainty than would be normal, reflected in an anticipated top-line growth of just over 7%, which would leave a lot of ground to be made up in the later periods of FYP2. We also anticipate steady improvements in adjusted operating margin, from the 14.3% achieved in FY20 to 15.8% in FY21e and on to 18.0% in FY22e. This reflects the improving operating leverage from the investment in the technology, with a growing degree of automation and in self-service through YouGov Direct (see Outlook note).
Management has recommended a 5p dividend, up from 4p for FY19, which we take to be a measure of its confidence in the group’s positioning and the well-funded balance sheet.
Segmental performance review
Data Products leads the way
Exhibit 2: Divisional contributions
FY20 |
Data Products |
% change/FY19 margin |
Data Services |
% change/FY19 margin |
Custom Research |
% chg/FY19 margin |
Central costs |
% change |
Total |
% chg/FY19 margin |
Revenue (£m) |
51.3 |
+24 |
37.8 |
+2 |
64.6 |
+8 |
(1.3) |
152.4 |
+12 |
|
Adjusted operating profit (£m) |
18.0 |
+26 |
7.0 |
-6 |
12.6 |
-4 |
(15.7) |
-3 |
21.8 |
+18 |
Adjusted operating margin (%) |
35.0 |
34.3 |
18.4 |
20.0 |
19.5 |
21.9 |
14.3 |
13.5 |
Source: Company accounts
Data Products now accounts for around a third of group, with revenues up by 24% over the prior year, a slight slowing from the 29% progress at the half-year stage (implies +19% for H2). On an underlying basis, revenues grew 21%, with the additional boost from YouGov SportsIndex, which has quickly established a useful role in the segment. The boost to segmental operating margin reflects the scalability of its largely digital model for data collection and the delivery of syndicated products. The US market continues to be the largest geographical region, yet its growth at 26% outstripped those of other territories.
Data Services (25% group FY20 revenues) faced tough comparatives, with non-recurring election work in Asia Pacific during the previous year, limiting it to 2% growth (4% underlying). Segmental revenues are weighted to the UK market, which grew 7%, despite YouGov Omnibus already being the market leader. The operating margin, declining from 20.0% to 18.4%, was affected by two factors; the transfer in of relatively lower-margin work from the Custom Research segment in the Nordic region (highlighted in previous trading updates) and a larger proportion of overhead, previously allocated centrally.
Management’s intention is to drive a more concentrated sales effort. Although there clearly remains potential for further progress in the UK, the main opportunity is for stimulating demand in the US, leveraging the group’s existing relationships through the key account management. With greater use of the group’s Centers of Excellence in Romania and India, together with a faster growing top line, margins should be able to return to expansion.
Custom Research (42% group FY20 revenues) had results affected by the planned closure of a large contract in Kurdistan, originally planned to run through to FY21, which reduced revenues in the Middle East by £2.1m (30%). Underlying revenue progress, though, was impressive, at 12%, with a growing element of longitudinal tracking projects, indicated to be around 40% of the divisional revenues. The Kurdistan closure affected reported operating margin, accounting from the bulk of the reduction from 21.9% down to 19.5% margin, with the balance reflecting greater central overhead reallocation. As the business continues to shift more towards committed revenues and multi-territory projects, utilising data held within the YouGov Cube, the quality of divisional earnings is improving, and we expect the margins to recover.
Valuation
YouGov’s share price started the year at 643p, falling sharply to 400p at the onset of lockdowns and peak market uncertainty in March. Since that point, and as overall trading has proved to be little affected by COVID-19 (albeit that the mix has adjusted), confidence has rebuilt, and the share price has resumed its positive trajectory. The group trades at the high end of the range of the international peer set, as shown below.
Exhibit 3: Peer set valuations
Ytd perf (%) |
Price |
Market cap (m) |
EV/Sales 1FY (x) |
EV/EBITDA last (x) |
EV/EBITDA 1FY (x) |
EV/EBITDA 2FY (x) |
P/E |
P/E |
P/E 2FY (x) |
Div yield last (%) |
EBITDA margin last (%) |
|
Next Fifteen (GBP) |
(6) |
506 |
459 |
2.0 |
9.0 |
9.1 |
8.0 |
14.5 |
14.2 |
12.5 |
0.5 |
22.9 |
ComScore (US$) |
(59) |
2.04 |
145 |
0.9 |
49.9 |
10.6 |
8.4 |
0.0 |
1.6 |
|||
IPSOS (€) |
(25) |
21.80 |
969 |
0.9 |
6.3 |
7.4 |
6.4 |
7.6 |
10.7 |
8.2 |
4.0 |
12.6 |
Forrester (US$) |
(19) |
33.62 |
635 |
1.6 |
11.0 |
13.2 |
11.6 |
20.4 |
25.8 |
19.1 |
0.0 |
13.4 |
Gartner (US$) |
(19) |
125.34 |
111,184 |
3.3 |
18.7 |
20.0 |
18.4 |
32.1 |
39.5 |
35.8 |
0.0 |
16.1 |
Nielsen (US$) |
(30) |
14.29 |
5,098 |
2.2 |
7.2 |
7.4 |
7.1 |
7.9 |
9.3 |
8.4 |
7.8 |
28.5 |
GlobalData (GBP) |
20 |
1,550 |
1,825 |
10.7 |
43.0 |
36.0 |
32.6 |
53.7 |
54.7 |
48.2 |
1.0 |
25.0 |
WPP (GBP) |
(41) |
626 |
7,666 |
1.3 |
6.2 |
8.8 |
7.5 |
6.8 |
11.2 |
8.7 |
9.6 |
16.1 |
Average |
(22) |
2.8 |
18.9 |
14.1 |
12.5 |
20.4 |
23.6 |
20.1 |
2.9 |
17.0 |
||
YouGov (GBP) |
40 |
905 |
981 |
5.8 |
23.5 |
22.8 |
19.5 |
57.7 |
52.2 |
42.6 |
0.6 |
25.7 |
Source: Refinitiv. Note: Prices as at 5 October 2020.
Exhibit 4: Financial summary
£'000s |
2018 |
2019 |
2020 |
2021e |
2022e |
||
Year end 31 July |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
||
PROFIT & LOSS |
|||||||
Revenue |
|
|
116,559 |
136,487 |
152,441 |
163,000 |
175,000 |
Cost of Sales |
(21,495) |
(24,206) |
(23,375) |
(24,604) |
(26,103) |
||
Gross Profit |
95,064 |
112,281 |
129,067 |
138,396 |
148,897 |
||
EBITDA |
|
|
20,907 |
31,698 |
39,215 |
41,322 |
47,697 |
Operating Profit (before amort. and except.) |
|
|
12,650 |
18,492 |
21,830 |
25,740 |
31,415 |
Intangible Amortisation |
(7,026) |
(8,809) |
(12,885) |
(10,782) |
(10,782) |
||
Share based payments |
(3,571) |
(2,401) |
(2,900) |
(2,900) |
(2,900) |
||
Exceptionals |
(892) |
1,529 |
(6,630) |
0 |
0 |
||
Other |
66 |
200 |
0 |
0 |
0 |
||
Operating Profit |
11,824 |
20,221 |
15,200 |
25,740 |
31,415 |
||
Net Interest |
(51) |
(665) |
7 |
(175) |
(150) |
||
Profit Before Tax (norm) |
|
|
16,302 |
20,428 |
24,737 |
28,465 |
34,165 |
Profit Before Tax (IFRS16) |
|
|
11,773 |
19,356 |
15,207 |
25,565 |
31,265 |
Tax |
(3,615) |
(5,086) |
(5,812) |
(9,771) |
(11,949) |
||
Profit After Tax (norm) |
12,687 |
15,342 |
18,925 |
18,694 |
22,216 |
||
Profit After Tax (IFRS16) |
8,158 |
14,270 |
9,395 |
15,794 |
19,316 |
||
Average Number of Shares Outstanding (m) |
105.4 |
105.4 |
106.7 |
108.4 |
108.4 |
||
EPS - normalised (p) |
|
|
10.8 |
13.8 |
15.7 |
17.4 |
21.2 |
EPS - IFRS 16 (p) |
|
|
7.7 |
14.1 |
9.0 |
14.6 |
17.8 |
Dividend per share (p) |
3.0 |
4.0 |
5.0 |
5.5 |
6.5 |
||
Gross Margin (%) |
81.6 |
82.3 |
84.7 |
84.9 |
85.1 |
||
EBITDA Margin (%) |
17.9 |
23.2 |
25.7 |
25.4 |
27.3 |
||
Operating Margin (before GW and except) (%) |
10.9 |
13.5 |
14.3 |
15.8 |
18.0 |
||
BALANCE SHEET |
|||||||
Fixed Assets |
|
|
78,019 |
108,534 |
108,122 |
106,068 |
105,286 |
Intangible Assets |
65,357 |
82,374 |
84,611 |
83,829 |
83,047 |
||
Tangible Assets |
12,471 |
26,160 |
23,511 |
22,239 |
22,239 |
||
Investments |
191 |
0 |
0 |
0 |
0 |
||
Current Assets |
|
|
66,735 |
72,581 |
70,255 |
77,891 |
89,536 |
Stocks |
0 |
0 |
0 |
0 |
0 |
||
Debtors |
34,672 |
33,726 |
34,239 |
36,611 |
39,306 |
||
Cash |
30,621 |
37,925 |
35,309 |
40,574 |
49,524 |
||
Current Liabilities |
|
|
(41,445) |
(51,395) |
(52,813) |
(55,070) |
(55,080) |
Creditors |
(41,445) |
(51,395) |
(52,813) |
(55,070) |
(55,080) |
||
Short term borrowings |
0 |
0 |
0 |
0 |
0 |
||
Long Term Liabilities |
|
|
(11,238) |
(22,277) |
(16,226) |
(13,206) |
(13,206) |
Long term borrowings |
0 |
0 |
0 |
0 |
0 |
||
Other long-term liabilities |
(11,238) |
(22,277) |
(16,226) |
(13,206) |
(13,206) |
||
Net Assets |
|
|
92,071 |
107,443 |
109,338 |
115,683 |
126,537 |
CASH FLOW |
|||||||
Operating Cash Flow |
|
|
23,617 |
38,115 |
38,411 |
41,615 |
48,031 |
Net Interest |
22 |
183 |
(7) |
175 |
150 |
||
Tax |
(5,501) |
(4,520) |
(3,184) |
(7,328) |
(11,949) |
||
Capex |
(8,181) |
(12,166) |
(18,559) |
(18,000) |
(16,000) |
||
Acquisitions/disposals |
(885) |
(6,583) |
(7,451) |
(3,428) |
(3,020) |
||
Financing |
259 |
(3,652) |
(4,739) |
(2,000) |
(2,000) |
||
Dividends |
(2,106) |
(3,327) |
(4,298) |
(5,420) |
(5,962) |
||
Net Cash Flow |
7,225 |
8,050 |
173 |
5,615 |
9,250 |
||
Opening net debt/(cash) |
|
|
(23,219) |
(30,621) |
(37,925) |
(35,309) |
(40,574) |
HP finance leases initiated |
0 |
0 |
0 |
0 |
0 |
||
Other |
177 |
(747) |
(2,789) |
(350) |
(300) |
||
Closing net debt/(cash) |
|
|
(30,621) |
(37,925) |
(35,309) |
(40,574) |
(49,524) |
Source: Company accounts, Edison Investment Research. Note: FY19 amounts have been restated.
|
|
Research: Investment Companies
Gresham House Strategic (GHS) has been active over the COVID-19 pandemic, taking advantage of a high cash balance following the profitable disposal of IMImobile (23.7% IRR) in early 2020 to invest in attractive businesses at depressed levels. GHS describes itself as a ‘strategic public equity’ fund, meaning it takes a private equity-style approach to investing mainly in listed companies, buying significant stakes and engaging proactively to create and unlock value through operational, strategic and management initiatives. Given the favourable entry prices of many recent investments, GHS’s managers are targeting returns of as much as 2.5–3.0x over the typical three- to five-year holding period. Furthermore, reflecting confidence in the outlook for the portfolio, its underlying income (including the potential for reintroduction of dividends by some holdings) and scope for portfolio realisations, GHS’s board has recently raised its dividend growth target for FY21 from 15% to 20%.