Last close As at 05/08/2026
—
— 0.00 (0.00%)
Market capitalisation
—
Research: TMT
YouGov’s FY17 year-end trading update confirms that positive trading momentum continued in the second half for Data Products and Services. Results should be ahead of our previous forecasts and well ahead of market growth. The results reflect the growth in high-margin products as well as margin improvements in custom research in addition to some currency benefit. We have moved our PBT numbers up by 5% for FY17e and 9% for FY18e. The shares continue to trade at a premium to the global sector, although that is being eroded by YouGov’s faster growth.
YouGov |
Moving up margins |
Year-end trading update |
Media |
7 August 2017 |
Share price performance
Business description
Next events
Analysts
YouGov is a research client of Edison Investment Research Limited |
|||||||||||||||||||||||||||||||||||||||||||||||
YouGov’s FY17 year-end trading update confirms that positive trading momentum continued in the second half for Data Products and Services. Results should be ahead of our previous forecasts and well ahead of market growth. The results reflect the growth in high-margin products as well as margin improvements in custom research in addition to some currency benefit. We have moved our PBT numbers up by 5% for FY17e and 9% for FY18e. The shares continue to trade at a premium to the global sector, although that is being eroded by YouGov’s faster growth.
Year end |
Revenue (£m) |
PBT* |
EPS* |
DPS |
P/E |
Yield |
07/15 |
76.1 |
9.1 |
6.7 |
1.0 |
40.3 |
0.4 |
07/16 |
88.2 |
13.3 |
8.5 |
1.4 |
31.8 |
0.5 |
07/17e |
106.5 |
15.6 |
10.9 |
1.6 |
24.8 |
0.6 |
07/18e |
115.0 |
18.3 |
12.4 |
1.8 |
21.8 |
0.7 |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
Strategy continues to produce the returns
Management’s emphasis on building a scalable business through productising its offering is fuelling premium organic growth as it gains traction in its markets, notably in the US. BrandIndex and Profiles are building across more geographic markets as well as increasing client numbers and we anticipate this continuing through FY18e. Data Services (principally Omnibus) is also increasing its global reach, with UK growth more muted but still ahead of the market. Custom Research is being concentrated on its more profitable aspects, particularly using the group’s own panel, so that the top line is static (in constant currency terms) but the operating margin is moving ahead. The success of the MRP modelling of the seat-by-seat results of the UK general election is significant for its validation of the methodology rather than for any immediate financial impact. This has many potential applications, not only in marketing but also in broader planning contexts.
Margin progression
Our FY17e revenue number is edged up 3%; FY18e is broadly unchanged due to assumptions on Custom Research. The increased margin indicated here, though, helps lift our projections for PBT by 5% in FY17e and 9% in FY18e, with growth in EPS marginally lower due to the impact of the geographic mix on tax. The group operating margin (before exceptional/share-based payments) was 11.0% in FY14. By FY18e, we are anticipating that it will have expanded to 14.7%. We now expect FY17e year-end net cash of slightly over £22m from £15m at the half-year.
Valuation: Premium growth reflected in rating
YouGov’s rating remains towards the top of the ranking of global peers. Much of the traditional market research sector still struggles with legacy infrastructures. YouGov continues to refine and productise its offerings, driving a higher earnings CAGR than the sector and funding a progressive dividend stream. The group’s clear and consistent strategy is translating into profits and, at least as importantly, into cash.
Exhibit 1: Financial summary
£'000s |
2014 |
2015 |
2016 |
2017e |
2018e |
||
Year end 31 July |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
||
PROFIT & LOSS |
|||||||
Revenue |
|
|
67,375 |
76,110 |
88,202 |
106,500 |
115,000 |
Cost of Sales |
(15,812) |
(17,472) |
(19,476) |
(23,430) |
(25,300) |
||
Gross Profit |
51,564 |
58,638 |
68,726 |
83,070 |
89,700 |
||
EBITDA |
|
|
8,020 |
9,273 |
11,620 |
15,003 |
17,603 |
Operating Profit (before GW, except and share-based payments) |
7,936 |
9,239 |
12,055 |
15,500 |
18,100 |
||
Intangible Amortisation |
(3,965) |
(4,633) |
(5,478) |
(5,000) |
(5,000) |
||
Share based payments |
(547) |
(669) |
(1,138) |
(1,200) |
(1,200) |
||
Exceptionals |
(2,385) |
(1,072) |
(1,108) |
0 |
0 |
||
Other |
(14) |
41 |
(4) |
0 |
0 |
||
Operating Profit |
1,025 |
2,906 |
4,327 |
9,300 |
11,900 |
||
Net Interest |
(292) |
(220) |
1,199 |
106 |
170 |
||
Profit Before Tax (norm) |
|
|
7,630 |
9,060 |
13,250 |
15,606 |
18,271 |
Profit Before Tax (FRS 3) |
|
|
733 |
2,686 |
5,526 |
9,406 |
12,071 |
Tax |
(316) |
580 |
(2,111) |
(3,824) |
(4,842) |
||
Profit After Tax (norm) |
7,314 |
9,640 |
11,139 |
11,783 |
13,429 |
||
Profit After Tax (FRS 3) |
417 |
3,266 |
3,415 |
5,583 |
7,027 |
||
Average Number of Shares Outstanding (m) |
98.0 |
101.0 |
103.9 |
104.6 |
104.7 |
||
EPS - normalised (p) |
|
|
5.8 |
6.7 |
8.5 |
10.9 |
12.4 |
EPS - FRS 3 (p) |
|
|
0.4 |
3.2 |
3.3 |
5.3 |
6.7 |
Dividend per share (p) |
0.8 |
1.0 |
1.4 |
1.6 |
1.8 |
||
Gross Margin (%) |
76.5 |
77.0 |
77.9 |
78.0 |
78.0 |
||
EBITDA Margin (%) |
11.9 |
12.2 |
13.2 |
14.1 |
15.3 |
||
Operating Margin (before GW and except & share-based payments) (%) |
11.0 |
11.3 |
12.4 |
13.4 |
14.7 |
||
BALANCE SHEET |
|||||||
Fixed Assets |
|
|
52,259 |
53,726 |
62,366 |
62,366 |
62,366 |
Intangible Assets |
46,650 |
46,145 |
53,140 |
53,140 |
53,140 |
||
Tangible Assets |
5,609 |
7,377 |
8,984 |
8,984 |
8,984 |
||
Investments |
0 |
204 |
242 |
242 |
242 |
||
Current Assets |
|
|
29,873 |
33,329 |
45,339 |
55,142 |
65,363 |
Stocks |
0 |
0 |
0 |
0 |
0 |
||
Debtors |
21,687 |
22,507 |
28,643 |
31,818 |
34,220 |
||
Cash |
7,429 |
10,017 |
15,553 |
22,181 |
30,000 |
||
Current Liabilities |
|
|
(21,480) |
(22,983) |
(27,823) |
(33,926) |
(36,779) |
Creditors |
(21,296) |
(22,983) |
(27,823) |
(33,926) |
(36,779) |
||
Short term borrowings |
(184) |
0 |
0 |
0 |
0 |
||
Long Term Liabilities |
|
|
(2,700) |
(2,449) |
(5,793) |
(3,000) |
(3,000) |
Long term borrowings |
0 |
0 |
0 |
0 |
0 |
||
Other long term liabilities |
(2,700) |
(2,449) |
(5,793) |
(3,000) |
(3,000) |
||
Net Assets |
|
|
57,952 |
61,623 |
74,089 |
80,582 |
87,950 |
CASH FLOW |
|||||||
Operating Cash Flow |
|
|
8,600 |
10,091 |
14,139 |
17,850 |
19,216 |
Net Interest |
(295) |
(233) |
11 |
106 |
170 |
||
Tax |
(287) |
(730) |
(2,365) |
(4,030) |
(4,078) |
||
Capex |
(5,759) |
(5,754) |
(6,076) |
(5,750) |
(5,750) |
||
Acquisitions/disposals |
(1,003) |
(470) |
(171) |
(36) |
0 |
||
Financing |
(101) |
454 |
16 |
0 |
0 |
||
Dividends |
(566) |
(773) |
(1,028) |
(1,556) |
(1,765) |
||
Net Cash Flow |
589 |
2,585 |
4,526 |
6,584 |
7,794 |
||
Opening net debt/(cash) |
|
|
(6,656) |
(7,245) |
(10,017) |
(15,553) |
(22,181) |
HP finance leases initiated |
0 |
0 |
0 |
0 |
0 |
||
Other |
0 |
187 |
1,010 |
44 |
25 |
||
Closing net debt/(cash) |
|
|
(7,245) |
(10,017) |
(15,553) |
(22,181) |
(30,000) |
Source: Company accounts, Edison Investment Research
|
|
Research: Real Estate
Palace Capital has completed the previously announced £20m acquisition via a corporate deal, more than replacing rental income from disposals made in FY17. The new assets are fully let at a higher yield than our previous estimates. This leads us to raise our forecasts slightly and provides scope for rental and valuation uplifts in future, in line with Palace’s strategy of providing capital growth as well as stable income.