Small Cap Value Report (23 Mar 2015) - YOU, SAL

Sunday, Mar 29 2015 by

Hello! I bet you thought I wouldn't circle back and complete Monday's missing report, but my dedication to the cause is such that I've set aside a couple of hours on the following Sunday to fill in the gaps. As it's the day of rest, these comments will be a bit more concise than usual.

YouGov (LON:YOU)

Share price: 126.5p
No. shares: 102.7m
Market Cap: £129.9m

Interim results - covering the six months to 31 Jan 2015 - another set of uninspiring figures from YouGov. Whilst turnover increased 10.9% to £36.2m for the period, the company remained barely profitable - an operating profit of only £133k was made, a small improvement against the £138k loss last H1. There seems to be an H2-weighted seasonality to the year, as the company made an £1,039k operating profit for the full year.

I am referring above to the statutory numbers on the P&L. However, YouGov dramatically inflates its adjusted profits by capitalising some internal costs (and ignoring the amortisation charge), and has recurring exceptional costs every year.

Here is the table showing the dramatic impact on profit of the amortisation charge being ignored, and calling some things exceptional (despite them happening every year);


Here are the exceptional costs (see below). Perhaps you could allow the acquisition related costs, but restructuring seems to be ongoing. The company does however give a fairly detailed explanation of each item below the figures, which is good. So readers can at least make up their own mind.


Valuation - I don't believe the adjusted profit figures are a reasonable measure of the real performance of the business. So for me, the 2.6p adjusted EPS in H1 is meaningless.

Stockopedia doesn't particularly like it either, with a StockRank of 53 (falling), and bear in mind their system doesn't challenge what brokers call normalised EPS. It scores poorly on both value and quality scores, see below;


Dividends - are miniscule, which is because the company doesn't really make very much money. The yield is under 1%.

Balance sheet - this is OK, and passes my usual tests.

My opinion - covered above really. I don't accept the adjusted profit figures. The market cap looks considerably over-valued in my opinion, for what is in reality, a not very profitable business.

Although on the positive side, bulls point to the…

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YouGov plc is a United Kingdom-based international data and analytics company. The Company’s suite of products and services is made up of syndicated data products including YouGov BrandIndex and YouGov Profiles and data services including YouGov Omnibus and YouGovCustom Research. YouGov BrandIndex is a daily brand perception tracker. YouGov Profiles is its planning and segmentation tool. YouGov Omnibus finds out people's opinions, attitudes and behaviors. YouGov Custom Research conducts quantitative and qualitative research. The company has 35 offices in 22 countries. The Company has operations in the United Kingdom, North America, Europe, the Nordics, the Middle East and North Africa and Asia. more »

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SpaceandPeople plc is a United Kingdom-based media specialist company. The Company is engaged in marketing and selling of promotional and retail licensing space on behalf of shopping centers and other venues throughout the United Kingdom, Germany, France and India. The Company's segments include Promotional Sales, Retail, Head Office and Other. The Company markets, sells and administers promotional space in a range of footfall venues across the United Kingdom, including shopping centers, theme parks, garden centers, retail parks and airports. The Company offers a service covering from consultancy services to the provision and management of retail merchandising units in shopping centers. It enables venues to market, administer, promote and sell their promotional space. Its subsidiaries include MacPherson & Valentine Limited, SpaceandPeople GmbH, Retail Profile Holdings Limited, POP Retail Limited, Retail Profile GmbH, SpaceandPeople India Pvt Limited and S&P+ Limited. more »

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  Is LON:YOU fundamentally strong or weak? Find out More »

10 Comments on this Article show/hide all

purpleski 29th Mar '15 1 of 10

Paul. Thanks for the review of Spaceandpeople (LON:SAL). Are you still long? I sold out in September for one of my biggest %age losses and will not revisit. I just think it is an odd business and in the interim have learnt that stocks with a mkt cap of less than £30m and probably more like £50m are not for me. I just don't have the skill to invest in them.

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GeoffMM 29th Mar '15 2 of 10

Thank you Paul for your thoughts I remain with SAL after the recent drop which spooked me on the day, after searching through the accounts there was no real outstanding reason for the drop. Feel there is a top up in SAL with the MPK, looks good at this price

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Paul Scott 29th Mar '15 3 of 10

In reply to post #95662

Hi purpleski,

Yes I have remained long of Spaceandpeople (LON:SAL) throughout. Apologies, I forgot to add the disclosure in the article above, thank you for prompting me, I've added it now.

Regards, Paul.

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Hmcg 30th Mar '15 4 of 10

Thanks for the sunday report. Any thoughts on GVC's results last week?

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m_uller 30th Mar '15 5 of 10

Hi Paul

The price action at SAL is not untypical of small caps prior to the end of the tax year. Could be realisation of tax losses.

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purpleski 30th Mar '15 6 of 10

In reply to post #95674

No need to apologise. Just wanted to put your comments in context. Good luck with the investment.

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NseCashTips 30th Mar '15 This post has been moderated
Yantomawr 30th Mar '15 8 of 10

SAL. currently up 15% today!

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slartybartfast 30th Mar '15 9 of 10

In reply to post #95695

Just about covers the spread eh?

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sjones33449 30th Mar '15 10 of 10

very good comprehensive and honest thanks

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About Paul Scott

Paul Scott

I trained as an accountant with a Top 5 firm, but that was so boring that I spent too much time in the 1990s being a disco bunny, and busting moves on the dancefloor, and chilling out with mates back at either my house or theirs, and having a lot of fun!Then spent 8 years as FD for a ladieswear retail chain called "Pilot", leaving on great terms in 2002 - having been a key player in growing the business 10 fold. If the truth be told, I partied pretty hard at the weekends too, so bank reconciliations on Monday mornings were more luck than judgement!! But they were always correct.I got bored with that and decided to become a professional small caps investor in 2002. I made millions, but got too cocky, and lost the lot in 2008, due to excessive gearing. A miserable, wilderness period occurred from 2008-2012.Since then, the sun has begun to shine again! I am now utterly briliant again, and immerse myself in small caps, and am a walking encyclopedia on the subject. I love writing a daily report for on most weekday mornings, constantly researching daily results & trading updates for small caps. Cheese! more »


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