YouGov's profits climb as growth plan kicks in

YouGov on Tuesday reported higher revenues and profits as its five-year growth plan delivered double-digit growth for its Data Products & Services divisions.

For the six-month period ended 31 January, the data and analytics firm reported a profit before tax of £8.3m, for an increase of 85% compared to the same period the year before.

In parallel, revenue climbed 18% to £66.5m after Data Products & Services sales increased by 34% to £37.2m as its five-year growth plan focused on growing the two divisions delivered results.

Data Products revenue increased by 35% to £19.4m as US revenue growth accelerated from 28% to 39%, while Data Services revenue increased by 33% to £17.8m after a 43% increase in sales from the Asia-Pacific region thanks to the contribution from Galaxy Research, which was acquired at the end of 2017.

Stephan Shakespeare, chief executive of YouGov, said: "In the final year of our current five-year growth plan we are continuing to deliver revenue and earnings growth ahead of the market. Our syndicated data model has broken new ground in the industry, and as we announce targets for our next five-year plan, we are no less ambitious. Our aim is to deliver the best tools and the best data for our clients."

Meanwhile, the Custom Research division's revenue increased by 4% to £30.4m as the company's continued strategic focus on higher margin work paid off with a 15% increase in operating profit to £7.9m.

The AIM traded company, which is perhaps best known for its political polling efforts, had cash and cash equivalents of £25.0m at the end of January, up from £21.3m at the same point the year before but, as was the case during the prior year, no interim dividend was proposed.

"Our new plan focuses on three strategic pillars to deliver on that goal: activating our data to create targetable audiences, investing in technology to ensure our data is integrated and customisable, and opening up some of our data as a public resource. We believe this will help create a universal data platform for our clients, as we look to fulfil our ambition of becoming the world's leading supplier of proprietary panel data," said Shakespeare.

In a statement, the company said it remained confident of meetings it full-year expectations as trading during the second half had continued positively, adding that the international spread of its revenues, with a significant and growing US weighting, cushions the business from the volatility associated with Brexit.

Fiona Orford-Williams, analyst at Edison Investment Research, said YouGov had achieved a "strong" first half of the year with revenue growth seen across its divisions.

"More notable, though, is the step up in adjusted operating margin from 16% in H118 to 19% as the syndicated data model starts to show its value. Management has outlined ambitious new, five-year targets; looking to double group revenue and operating margin and achieve a CAGR of over 30% for EPS. With the continuing investment requirement, we expect stronger progress towards these targets in the second half of the period," said Orford-Williams.

YouGov's shares were down 1.57% at 470.00p at 1220 BST.