YouGov — Update 31 January 2017

YouGov (AIM: YOU)

Last close As at 25/12/2024

902.00

−34.00 (−3.63%)

Market capitalisation

990m

More on this equity

Research: TMT

YouGov — Update 31 January 2017

YouGov

Fiona Orford-Williams

Written by

Fiona Orford-Williams

Director, TMT

TMT

YouGov

Good H117 progress

Half-year update

Media

31 January 2017

Price

229.50p

Market cap

£239m

US$1.25/£

Net cash (£m) at end January 2017

13

Shares in issue

104.3m

Free float

91%

Code

YOU

Primary exchange

AIM

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

(8.2)

0.7

57.7

Rel (local)

(8.0)

(1.3)

36.2

52-week high/low

255.0p

132.5p

Business description

YouGov is an international market research and data and analytics group offering a data-led suite of suite of products and services including YouGov BrandIndex, YouGov Profiles and YouGov Omnibus and custom research.

Next events

Interim results

27 March 2017

Analysts

Fiona Orford-Williams

+44 (0)20 3077 5739

Bridie Barrett

+44 (0)20 3077 5700

YouGov is a research client of Edison Investment Research Limited

YouGov’s positive H117 update shows trading ahead of market expectations, resulting from good progress from data products and services and growth in the custom research margin. There has also been some currency benefit. For now, we have maintained our implied H217 numbers, meaning that our FY17e revenue forecast increases 2% and changes to the mix move our PBT estimate up 4%. FY18e numbers are edged up slightly. At 15.7x current year EV/EBITDA, the valuation is towards the top of the range of global peers (7.5x to 17.5x), which is a reflection of the strong earnings growth and cash generation.

Year end

Revenue (£m)

PBT*
(£m)

EPS*
(p)

DPS
(p)

P/E
(x)

Yield
(%)

07/15

76.1

9.1

6.7

1.0

34.2

0.4

07/16

88.2

13.3

8.5

1.4

27.0

0.6

07/17e

103.0

14.6

10.2

1.6

22.5

0.7

07/18e

113.5

16.5

11.3

1.8

20.3

0.8

Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.

Strong H117 performance

There has been good underlying performance across data products and services in the period, with additional benefit from currency (BrandIndex generates around 60% of its revenues in the US). Both BrandIndex and the newer YouGov Profiles product continue to attract new clients globally. Omnibus, which makes up the bulk of data services’ revenues, has grown in line with expectations, while custom research continues to improve its margin as planned. It has a growing element of tracking studies – 12% of FY16 segmental revenues. For the time being, we maintain our implied second-half numbers for the data products and services. The group is second-half weighted, so this is a comparatively cautious stance. Visibility for both H217 and FY18 will be better by the publication of the interim results to end January on 27 March and there may be further scope for raising forecasts then.

Cash flowing

Net cash at end January was reported at £13m and our forecast for end July now stands just short of £19m. Cash conversion for the group typically runs at between 80% and 120%, and in FY16 it was even stronger at 130%. The main focus is on the organic growth, but the group obviously has the firepower to take advantage of acquisition opportunities. Any deals struck would need to be relevant to the strategy, for example through adding better or new data sources, which limits the number of potential opportunities.

Valuation: Reflecting superior growth

The share price has risen 55% from a year ago (after a high of 258p in mid-December) as the market has recognised that the group’s clear and consistent strategy is translating into profits and, at least as importantly, into cash. With much of the traditional MR sector still struggling with legacy infrastructures, it is unsurprising that YouGov’s rating is towards the top of the ranking of global peers, reflecting its much higher CAGR in earnings and progressive dividend stream.

Financial summary

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

103,000

113,500

Cost of Sales

(15,812)

(17,472)

(19,476)

(22,660)

(24,970)

Gross Profit

51,564

58,638

68,726

80,340

88,530

EBITDA

 

 

8,020

9,273

11,620

14,103

15,954

Operating Profit (before GW, except and share-based payments)

7,936

9,239

12,055

14,500

16,351

Intangible Amortisation

(3,965)

(4,633)

(5,478)

(5,000)

(5,000)

Share based payments

(547)

(669)

(1,138)

(1,100)

(1,100)

Exceptionals

(2,385)

(1,072)

(1,108)

0

0

Other

(14)

41

(4)

0

0

Operating Profit

1,025

2,906

4,327

8,400

10,251

Net Interest

(292)

(220)

1,199

100

149

Profit Before Tax (norm)

 

 

7,630

9,060

13,250

14,600

16,500

Profit Before Tax (FRS 3)

 

 

733

2,686

5,526

8,500

10,400

Tax

(316)

580

(2,111)

(3,577)

(4,373)

Profit After Tax (norm)

7,314

9,640

11,139

11,023

12,128

Profit After Tax (FRS 3)

417

3,266

3,415

4,923

5,826

Average Number of Shares Outstanding (m)

98.0

101.0

103.9

104.6

104.6

EPS - normalised fully diluted (p)

 

 

5.8

6.7

8.5

10.2

11.3

EPS - FRS 3 (p)

 

 

0.4

3.2

3.3

4.7

5.5

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

13.7

14.1

Operating Margin (before GW and except & share-based payments) (%)

11.0

11.3

12.4

13.0

13.4

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

53,768

62,770

Stocks

0

0

0

0

0

Debtors

21,687

22,507

28,643

33,783

37,227

Cash

7,429

10,017

15,553

18,842

24,400

Current Liabilities

 

 

(21,480)

(22,983)

(27,823)

(32,171)

(35,450)

Creditors

(21,296)

(22,983)

(27,823)

(32,171)

(35,450)

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

80,963

86,686

CASH FLOW

Operating Cash Flow

 

 

8,600

10,091

14,139

14,500

16,700

Net Interest

(295)

(233)

11

100

149

Tax

(287)

(730)

(2,365)

(3,969)

(3,776)

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

3,289

5,558

Opening net debt/(cash)

 

 

(6,656)

(7,245)

(10,017)

(15,553)

(18,842)

HP finance leases initiated

0

0

0

0

0

Other

0

187

1,010

(0)

0

Closing net debt/(cash)

 

 

(7,245)

(10,017)

(15,553)

(18,842)

(24,400)

Source: YouGov accounts, Edison Investment Research

Edison, the investment intelligence firm, is the future of investor interaction with corporates. Our team of over 100 analysts and investment professionals work with leading companies, fund managers and investment banks worldwide to support their capital markets activity. We provide services to more than 400 retained corporate and investor clients from our offices in London, New York, Frankfurt and Sydney. Edison is authorised and regulated by the Financial Conduct Authority. Edison Investment Research (NZ) Limited (Edison NZ) is the New Zealand subsidiary of Edison. Edison NZ is registered on the New Zealand Financial Service Providers Register (FSP number 247505) and is registered to provide wholesale and/or generic financial adviser services only. Edison Investment Research Inc (Edison US) is the US subsidiary of Edison and is regulated by the Securities and Exchange Commission. Edison Investment Research Limited (Edison Aus) [46085869] is the Australian subsidiary of Edison and is not regulated by the Australian Securities and Investment Commission. Edison Germany is a branch entity of Edison Investment Research Limited [4794244]. www.edisongroup.com

DISCLAIMER
Copyright 2017 Edison Investment Research Limited. All rights reserved. This report has been commissioned by YouGov and prepared and issued by Edison for publication globally. 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. Opinions contained in this report represent those of the research department of Edison at the time of publication. The securities described in the Investment Research may not be eligible for sale in all jurisdictions or to certain categories of investors. This research is issued in Australia by Edison Aus and any access to it, is intended only for "wholesale clients" within the meaning of the Australian Corporations Act. The Investment Research is distributed in the United States by Edison US to major US institutional investors only. Edison US is registered as an investment adviser with the Securities and Exchange Commission. Edison US 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. As such, Edison does not offer or provide personalised advice. We publish information about companies in which we believe our readers may be interested and this information reflects our sincere opinions. The information that we provide or that is derived from our website is not intended to be, and should not be construed in any manner whatsoever as, personalised advice. Also, our website and 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 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. This document is provided 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.
Edison has a restrictive policy relating to personal dealing. 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. Edison or its affiliates may perform services or solicit business from any of the companies mentioned in this report. The value of securities mentioned in this report can fall as well as rise and are subject to large and sudden swings. In addition it may be difficult or not possible to buy, sell or obtain accurate information about the value of securities mentioned in this report. Past performance is not necessarily a guide to future performance. 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. 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 (ie 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. To the maximum extent permitted by law, Edison, its affiliates and contractors, and their respective directors, officers and employees will not be liable for any loss or damage arising as a result of reliance being placed on any of the information contained in this report and do not guarantee the returns on investments in the products discussed in this publication. FTSE International Limited (“FTSE”) © FTSE 2017. “FTSE®” is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under license. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE’s express written consent.

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

245 Park Avenue, 39th Floor

10167, New York

US

Sydney +61 (0)2 9258 1161

Level 25, Aurora Place

88 Phillip St, 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

245 Park Avenue, 39th Floor

10167, New York

US

Sydney +61 (0)2 9258 1161

Level 25, Aurora Place

88 Phillip St, Sydney

NSW 2000, Australia

Edison, the investment intelligence firm, is the future of investor interaction with corporates. Our team of over 100 analysts and investment professionals work with leading companies, fund managers and investment banks worldwide to support their capital markets activity. We provide services to more than 400 retained corporate and investor clients from our offices in London, New York, Frankfurt and Sydney. Edison is authorised and regulated by the Financial Conduct Authority. Edison Investment Research (NZ) Limited (Edison NZ) is the New Zealand subsidiary of Edison. Edison NZ is registered on the New Zealand Financial Service Providers Register (FSP number 247505) and is registered to provide wholesale and/or generic financial adviser services only. Edison Investment Research Inc (Edison US) is the US subsidiary of Edison and is regulated by the Securities and Exchange Commission. Edison Investment Research Limited (Edison Aus) [46085869] is the Australian subsidiary of Edison and is not regulated by the Australian Securities and Investment Commission. Edison Germany is a branch entity of Edison Investment Research Limited [4794244]. www.edisongroup.com

DISCLAIMER
Copyright 2017 Edison Investment Research Limited. All rights reserved. This report has been commissioned by YouGov and prepared and issued by Edison for publication globally. 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. Opinions contained in this report represent those of the research department of Edison at the time of publication. The securities described in the Investment Research may not be eligible for sale in all jurisdictions or to certain categories of investors. This research is issued in Australia by Edison Aus and any access to it, is intended only for "wholesale clients" within the meaning of the Australian Corporations Act. The Investment Research is distributed in the United States by Edison US to major US institutional investors only. Edison US is registered as an investment adviser with the Securities and Exchange Commission. Edison US 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. As such, Edison does not offer or provide personalised advice. We publish information about companies in which we believe our readers may be interested and this information reflects our sincere opinions. The information that we provide or that is derived from our website is not intended to be, and should not be construed in any manner whatsoever as, personalised advice. Also, our website and 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 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. This document is provided 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.
Edison has a restrictive policy relating to personal dealing. 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. Edison or its affiliates may perform services or solicit business from any of the companies mentioned in this report. The value of securities mentioned in this report can fall as well as rise and are subject to large and sudden swings. In addition it may be difficult or not possible to buy, sell or obtain accurate information about the value of securities mentioned in this report. Past performance is not necessarily a guide to future performance. 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. 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 (ie 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. To the maximum extent permitted by law, Edison, its affiliates and contractors, and their respective directors, officers and employees will not be liable for any loss or damage arising as a result of reliance being placed on any of the information contained in this report and do not guarantee the returns on investments in the products discussed in this publication. FTSE International Limited (“FTSE”) © FTSE 2017. “FTSE®” is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under license. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE’s express written consent.

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

245 Park Avenue, 39th Floor

10167, New York

US

Sydney +61 (0)2 9258 1161

Level 25, Aurora Place

88 Phillip St, 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

245 Park Avenue, 39th Floor

10167, New York

US

Sydney +61 (0)2 9258 1161

Level 25, Aurora Place

88 Phillip St, Sydney

NSW 2000, Australia

More on YouGov

View All

Latest from the TMT sector

View All TMT content

WYG — Update 31 January 2017

WYG

Continue Reading

Subscribe to Edison

Get access to the very latest content matched to your personal investment style.

Sign up for free