REG - YouGov PLC - Full Year Results for the year ended 31 July 2024
06/11/2024 07:00
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RNS Number : 0803L YouGov PLC 06 November 2024
6 November 2024
YouGov plc
("YouGov" or "the Group" or "the Company")
Full Year Results for the year ended 31 July 2024
- Revenue and operating profit slightly ahead of revised guidance
- Execution of cost optimisation plan is on track
- Maintaining FY25 guidance and mid-term ambitions
YouGov, the international research and data analytics group, is today
publishing its audited results for the year ended 31 July 2024.
Summary of Audited Results
Year to Year to Change Underlying
31 July 2024 31 July 2023 Change¹
£m £m
(restated)
Revenue 335.3 258.3 30% 3%
Adjusted Operating Profit(1,2) 49.6 49.1 1% (37%)
Adjusted Operating Profit Margin (%)(1) 15% 19% (400bps) -
Statutory Operating Profit 10.9 44.4 (75%) -
Adjusted Profit before Tax(1) 45.0 57.2 (21%) -
Statutory Profit before Tax 4.0 44.7 (91%) -
Adjusted Basic Earnings per Share(1) 29.4p 41.1p (29%) -
Statutory Basic Earnings per Share (2.0p) 31.5p - -
Operating cash generation 53.9 69.0 (22%) -
Net debt/(cash)(1) 148.2 (105.3) - -
Dividend 9.00p 8.75p 3% -
1. Defined in the explanation of non-IFRS measures below.
2. Figures have been restated to remove customer list amortisation which is
now classified as a Separately Reported Item.
Financial highlights
● Revenue growth of 30% (FY23: 17%) to £335.3, with underlying¹ growth of 3%
(FY23: 9%) with varied performance across the regions.
○ Revenue slightly ahead of FY24 guidance provided in August 2024 due to higher
contribution from Consumer Panel Services of GfK GmbH ("CPS"), owing to
greater level of research delivery completed in July.
● Adjusted operating profit(2) up by 1% to £49.6m, largely due to higher CPS
contribution.
● Adjusted operating profit margin(2) down 400 basis points (bps) to 15%, due to
weak sales momentum during the year and higher levels of staff and technology
costs in H1 FY24.
● Statutory operating profit down to £10.9m (FY23: 44.4m), largely due to
exceptional costs of £38.7m in relation to the acquisition of CPS, the change
in accounting treatment of amortisation costs of acquired customer
relationship intangible assets and restructuring charges.
● Adjusted earnings per share(1) down by 29% to 29.4p (FY23: 41.1p). Statutory
earnings per share decreased from 31.5p to (2.0p).
● Robust balance sheet position maintained with cash at period end of £73.6m
(31 July 2023: £107.2m) and leverage ratio(1) of 1.7x net debt to EBITDA.
Operational highlights
● Completed the transformational acquisition of CPS, the European leader in
household purchase data across 18 countries, for a headline purchase price of
€315m, in January 2024.
○ The CPS business is continuing to perform well, in line with expectations and
the integration is progressing well.
● Top-line performance was impacted by slower than anticipated sales momentum,
heightened competitive activity and challenging macro conditions.
● Good progress in our areas of priority for FY24, to position the Company for
medium-term growth, including the reorganisation of our commercial teams and
the expansion of our senior leadership team to drive innovation and
efficiency.
● The Americas saw strong underlying(1) growth of 8%, driven by an increase in
spend from the technology sector and multi-year tracking studies. The region
remains our key strategic focus area as we continue to see significant market
opportunities over the near and medium term.
● Completed the acquisition of Yabble, post period end, which will transform our
Data Products segment, maximising the capabilities of Yabble's industry
leading AI platform with YouGov's superior quality data.
Cost optimisation plan
● As announced on 6 August 2024, the Group accelerated a strategic review of the
stand-alone YouGov business (excluding CPS) and subsequently commenced a cost
optimisation plan:
○ Initiatives include a reduction in support functions, discontinuing
under-performing products, scaling back in certain non-core regions and
curtailing third-party supplier costs.
○ Streamlining measures expected to lead to annualised cost savings of £20
million, of which the Company has taken initial action on approximately £17
million.
○ 70% of the annualised cost savings expected to be realised in FY25, weighted
towards the second half of the year.
● The Board is confident these measures will best position the Group to focus on
its long-term strategic plan, while continuing to invest in key growth
areas.
Product innovation and investment focus
● Alongside the cost optimisation plan, we will focus investments on areas with
greatest potential for growth and return:
○ Enhancing our Data Products to make our rich, high-quality data more
discoverable.
○ Further building out our AI-enabled capabilities to enhance product offer and
operational efficiency.
○ Strengthening of our sales organisation through the appointment of new
regional leaders for UK and EMEA to drive improved performance and increase
our commercial rigour.
○ Expanding CPS' panel capabilities and data collection methods to accelerate
their growth potential.
Current trading and outlook
● Trading for the current financial year is broadly in line with the prior year
as expected, reflecting the slower sales bookings in H2 FY24.
● Continue to see demand for our high-quality Custom Research data, while seeing
longer sales cycles for Data Products subscription sales.
● Sales bookings momentum is expected to pick up in Q2 and Q3 FY25 as we head
into renewal season for our Data Products, supported by the launch of new
products and features as well as an improvement in market conditions.
● We expect the Group to meet current market expectations for FY25, which will
be second half weighted due to the ongoing restructuring process.
● We maintain a disciplined approach to cash management, and as of 31 July 2024,
the Group has a robust balance sheet, with approximately £74 million in cash
and cash equivalents and €16 million of the revolving credit facility
remains undrawn.
● Moving into FY25, enhancing our core Data Products, further development of AI
capabilities and building up our team of expert researchers and data
scientists will be our key investment areas.
Steve Hatch, Chief Executive Officer, said:
"FY24 has been a year of transition, challenge and change. We have made
significant strategic progress in the financial year. We completed the
acquisitions of CPS and KnowledgeHound which strengthen our product offer and
technology as well as increasing our addressable market. Consistent with this,
post-period end we acquired Yabble, which will transform our Data Products
segment using generative AI.
The macroeconomic environment remained challenging across the wider market
research industry and for YouGov, while internal execution also contributed to
the challenges we faced. We acted quickly over the summer and I am confident
that we have put the right initiatives in place as we focus on the execution
of our long-term strategic plan.
Our clients continue to value the quality of our products and services, this
is reflected by our high renewal rates and strong customer relationships. As
we enter FY25, we anticipate that momentum will build throughout the year,
weighted towards the second half, as the benefits of our cost optimisation
plan and new commercial leadership are realised. We consequently expect YouGov
to achieve growth for FY25 in line with current market expectations, and
remain confident in the Group's ability to deliver on its long-term
ambitions."
Analyst presentation
A copy of the presentation and the recording is available online at:
https://corporate.yougov.com/investors/presentations/
(https://corporate.yougov.com/investors/presentations/) .
Forward looking statements
Certain statements in this full year report are forward looking. Although the
Group believes that the expectations reflected in these forward-looking
statements are reasonable, we can give no assurance that these expectations
will prove to have been correct. As these statements involve risks and
uncertainties, actual results may differ materially from those expressed or
implied by these forward-looking statements.
We undertake no obligation to update any forward-looking statements whether as
a result of new information, future events or otherwise.
Enquiries:
YouGov plc
Steve Hatch, CEO 020 7012 6000
Alex McIntosh, CFO
Hannah Jethwani, Investor Relations Director
020 3727 1000
FTI Consulting
Charles Palmer / Valerija Cymbal / Jemima Gurney
020 3493 8000
J.P. Morgan Cazenove (NOMAD and Joint Broker)
Bill Hutchings / James Summer
020 3207 7800
Berenberg (Joint Broker)
Mark Whitmore / Richard Andrews / Alix Mecklenburg-Solodkoff
020 7425 8000
Morgan Stanley & Co. International plc (Joint Broker)
Andrew Foster / Josh Williams / Ed Phillips
About YouGov
YouGov is an international online research data and analytics technology
group.
Our mission is to offer unparalleled insight into what the world thinks.
Our innovative solutions help the world's most recognised brands, media owners
and agencies to plan, activate and track their marketing activities better.
With operations in the UK, the Americas, Europe, the Middle East, India and
Asia Pacific, we have one of the world's largest research networks.
At the core of our platform is an ever-growing source of consumer data that
has been amassed over our twenty years of operation. We call it Living Data.
All of our products and services draw upon this detailed understanding of our
29 million registered panel members to deliver accurate, actionable consumer
insights.
As innovators and pioneers of online market research, we have a strong
reputation as a trusted source of accurate data and insights. Testament to
this, YouGov data is regularly referenced by the global press, and we are the
most quoted market research source in the world.
YouGov. Living Consumer Intelligence.
For further information, visit business.yougov.com
Chair's Statement
My first full year as Chair of the YouGov plc Board of Directors has been one
of change for YouGov, as we moved into our third long-term strategic growth
plan (SP3), led by our new CEO, Steve Hatch.
During the year, we completed our transformative acquisition of GfK's Consumer
Panel Services business ("CPS"), an established leader in household purchase
data in Europe serving FMCG clients, welcoming 1,000+ new employees to the
YouGov Group and increasing our workforce size by 50%. We also acquired
KnowledgeHound, a US based survey data management solution, to aid the
extension of our YouGov Crunch survey analytics platform to handle the needs
of large brands. More recently, following the end of the reporting year, we
acquired Yabble, the New Zealand based company that has pioneered the use of
generative AI to deliver audience insights.
Last year, I noted the ongoing challenges and macro uncertainty in our
industry, which have persisted into FY24. Client budgets have increasingly
come under pressure and the prevalence of fraudulent data has led to greater
scrutiny on panel quality across the industry. YouGov invested in further
improvements to our systems and we continue to be seen throughout the industry
as the gold standard for high-quality data. However, in the period of
uncertainty, clients appear to have eased off from new commitments. We believe
that in the new world of AI-powered research, high quality connected and
structured data will become increasingly important and we are again seeing
increased demand from our most data-savvy clients.
Financial results and dividend
In FY24, while we grew revenue compared to the prior year, growth in the US
and UK region was in part offset by slight contractions in the EMEA and APAC
markets. Against this slowdown, the Board acted quickly to support management
to take significant cost action towards the end of the financial year, which
is expected to generate annualised cost savings of £20 million. The guiding
principle was to right-size our organisation and ensure we are resourced in
more strategically focussed areas to maximise our capacity and efficiency.
While these decisions are never easy, the cost optimisation initiatives were
determined with a view to sustaining profitability levels and ensuring
delivery of our long-term strategic growth plan, SP3, which is set out in
further detail in the CEO's Report.
YouGov continues to maintain a progressive dividend policy and, in line with
this, the Board is pleased to recommend a dividend of 9.0p per share payable
on 9 December 2024 to shareholders on the register as at 29 November 2024.
This will be tabled for shareholder approval at our Annual General Meeting
("AGM") on 5 December 2024.
SP3 - Commencing the third strategic growth plan (SP3)
Our vision is for YouGov to be the world's leading provider of marketing and
opinion data. To support our realisation of this vision, we choose to operate
using the tool of medium-to-long term strategic growth plans to enable us to
allocate resources, make investment decisions and to create a close link
between corporate performance and executive remuneration. In FY23, the Board
approved the strategic direction for our third long-term strategic plan, SP3,
to commence from FY24. In this first year of the plan, the Board was delighted
to welcome new members of senior management, product owners, and clients, to
join our annual strategic offsite in May 2024 where we considered "SP3 in the
age of AI". It is clear to us that there is huge potential in AI technology
not only to create more efficiencies within our workflows but also to access
new layers of value from our unique connected dataset.
Governance and Board composition
During FY24, the YouGov plc Board also saw some changes. In February 2024,
Sundip Chahal stepped down as an Executive Director and Chief Business Officer
(CBO). Sundip contributed significantly to the Company's first two long-term
financial plans during his tenure as CBO and formerly as Chief Operating
Officer. In April 2024, in line with our previously disclosed succession plan,
Rosemary Leith stepped down from the Board of Directors after nine years. We
are grateful to have had Rosemary's outstanding contribution to our Board as
Chair of the Remuneration Committee and formerly Senior Independent Director
during her tenure. In June 2024, we welcomed Deborah Davis to the Board and as
Chair of the Remuneration Committee. Deborah has extensive global experience
in platform business models, software, fintech, telecoms and e-commerce
businesses, and her appointment further strengthens our governance
capabilities. I am confident that we have a strong and balanced Board of
Directors to support our growth and strategic ambitions.
In addition, Steve has strengthened the senior management team through the
year, in both functional and regional leadership, as detailed in his CEO's
Report, putting the Company in an advantaged position to realise our
ambitions.
Environmental, social and governance ('ESG')
Building on a foundation of ethical, sustainable, and responsible business
practices, our commitment to ESG is a natural continuation of who we are as a
company, and I am pleased to report on a number of ESG highlights in the year.
Our CEO delivered on his ESG objective to formalise and champion YouGov's
policy on neutrality. The principle of neutrality is essential to YouGov's
mission to give a voice to what the world thinks. While it has always been a
core principle within the market research industry, the introduction of this
formal policy ensures that we share a clear understanding of what neutrality
means to YouGov and how we apply it to our research and editorial
output. Additionally, our new Employee Value Proposition ("EVP") was
launched, laying the foundations for a combined, enriching culture as our
teams at YouGov and CPS come together to form one, unified business.
In May 2024, we published our inaugural stand-alone ESG Report (available on
our corporate website at: corporate.yougov.com/esg
(http://corporate.yougov.com/esg) ). Introducing our net zero targets and our
social mission framework, this report reflects our continued commitment to
transparency and accountability in our ESG approach. YouGov's social mission
framework incorporates our commitments to support and engage our panel
members, clients, employees, and the wider community. From providing
unparalleled access to free public data, to maintaining a representative and
accessible panel, we are driven by a desire to make a positive social impact.
We are also in a unique position to support our clients with their own ESG
agendas, and the case studies in our ESG Report illustrate how our trusted
insights inform a range of ESG approaches.
Looking ahead and conclusion
On behalf of the Board, I want to reiterate our appreciation of the resilience
of all our employees and their dedication to the YouGov values - be fast, be
fearless, get it right, trust and respect each other. I wish to commend Steve
on his ability to adapt swiftly to the difficult changing conditions we have
seen this year and his commitment to a positive, inclusive culture. As we
welcome our new colleagues from Knowledgehound, CPS and Yabble and work
through the integration plan for our enlarged business, we are committed to
maintaining the strongest aspects of culture and learning from our new
colleagues to make YouGov a place people can continue to thrive. While the
next year will not be without its challenges as we implement our cost actions,
I believe our chosen business model and strategy, including our unique and
valuable panel asset, is what enables us to continue to deliver long-term
value to our stakeholders, and will make YouGov the world's number one market
research company.
Stephan Shakespeare
Chair
5 November 2024
Chief Executive Officer's Statement
FY 2024 was a year of transition for the industry and at YouGov. Having
concluded my first year at the company, I am fully convinced that the strength
of our data, brand and people remains unrivalled.
Over the past year the business has seen a number of successes and challenges,
from the completion of the transformational CPS acquisition and a successful
UK General Election cycle to our disappointing trading update in June 2024 and
the subsequent announcement of our cost optimisation and restructuring plan.
While several factors, both internal and external, have contributed to the
challenges we have faced, I am confident the actions we have taken will set
the business up for sustained success in the future. I would like to thank all
the employees at YouGov and our new colleagues at CPS for their hard work and
commitment.
The market research industry has had to adapt to several market forces over
the year from the rise of AI-based insights to addressing panel quality issues
and the continued high interest rate environment leading to a cautious
spending profile from clients. Consequently, the global Market Research sector
recorded growth of 5% in 2023(1), in line with inflation and growth rates seen
in the prior year, with some of the largest players in our industry recording
year-on-year declines. Against this backdrop, YouGov reported 3% underlying(2)
growth in FY24 and 30% reported growth reflecting the CPS acquisition.
FY24 Priorities
We have made considerable progress over the past year in our areas of priority
for FY24 and this will set us up for growth in the medium term. These priority
areas are:
● CPS
○ Completed the transformational acquisition of CPS, the European leader in
household purchase data with panels across 18 countries, for a headline
purchase price of €315m, in January 2024.
○ The division has continued to perform well post-completion with clients
continuing to receive the high level of service they had prior to the deal.
Additionally, the CPS and YouGov teams are beginning to collaborate on
research opportunities, particularly in Germany and Italy.
○ With the integration process well underway, we will be investing in strategic
growth initiatives for the CPS business to accelerate future growth,
including:
▪ Development of a new platform, SimIT Web, in conjunction with Circana™,
which is expected to launch in FY25. The platform will represent a significant
step forward in the shopper analytics industry owing to its efficient data
accessibility and visualisation, export capabilities, AI chatbot,
collaboration features, automatic report updates and user-friendliness.
▪ Build out of passive consumer panels in the Nordics through automated receipt
data collection, thereby increasing the potential commercial opportunities
with brands and retailers in the region.
● Panel Quality
○ Following the publication of our industry leading white paper in November 2023
(https://business.yougov.com/content/47907-improving-response-quality-in-brand-tracking)
on how we maintain superior data quality in YouGov BrandIndex, we have been
able to catch fraudulent and inattentive respondents in real-time, eliminating
slow, manual processing. This has resulted in measurably better response
quality in our surveys. For example, the percentage of US respondents in
YouGov BrandIndex that failed attention checks has dropped from 5% in early
2023 to about 1% in August 2024.
○ The quality of our panel was put to the test at the 2024 UK General Election
and we were extremely pleased that YouGov's predictions called 92% of seats(1)
accurately, surpassing the accuracy of all major pollsters including the exit
poll.
● Product Innovation
○ Based on feedback from clients and our assessment of our Data Products
proposition, we identified the need to improve the user interface and user
experience of our syndicated subscription products to increase their ease of
use and discoverability of the data. Following the acquisitions of
KnowledgeHound and Yabble, we have developed a product roadmap that includes a
series of enhancements and new AI-enabled features to be introduced in FY25.
○ Additionally, we further identified the need for us to have more
category-specific products that serve a wider base of clients and address
their most immediate needs in a cost-efficient way, allowing us to tap into
the upside potential with brand clients. We were able to rapidly develop and
test these products using our existing YouGov BrandIndex dataset while
expanding into category-specific data to track industry behaviours, attributes
and products. Subsequently, we have launched YouGov CategoryView in the US
covering seven different categories across the FMCG, Automotive and Financial
Services sectors, with several more planned for launch during FY25.
● Commercial Rigour
○ One of the areas that has undergone a notable transition and change over the
past year has been the structure of our commercial teams. Beginning with the
appointment of a new Chief Commercial Officer, Tom Fisher, in January 2024, we
changed the reporting structure and accountability to be more regionally
aligned.
○ Under Tom's leadership, we have thoroughly evaluated our sales incentive
programme and moved our account management teams to quarterly targets and more
focussed client accounts in terms of numbers and sectors. Additionally, we
have appointed a new leader for our UK business and will imminently be
appointing a leader for our DACH business. Overall, we believe we have the
right measures and leaders now in place to ensure we continue to expand our
share of wallet with existing clients and win new business in the coming
years.
● US Expansion
○ The US has seen robust underlying(2) growth in FY24, in line with the market,
with variability in performance across different sectors. After a short pause
in FY23, the technology sector returned to strong growth in the year. However,
this was offset in part by a slowdown in the gaming sector which has undergone
a period of restructuring and the academic sector which is expected to return
to growth in FY25 ahead of the 2024 US Presidential Election.
Cost optimisation plan
Following the lower than expected growth achieved in FY24, we accelerated our
internal operational and strategic review of the YouGov business and
subsequently commenced a cost optimisation plan. The strategic review included
an assessment of our entire product portfolio, reviewing the size and
profitability of some of our local operations and evaluating our support
function needs for the next 12-18 months.
The Company identified several areas where we could reduce our cost base and
reallocate resources to be a more focussed and efficient business. We expect
these streamlining measures to lead to annualised cost savings of £20
million, through a reduction in support functions, discontinuing
under-performing products, scaling back in certain non-core regions and
curtailing third-party supplier costs. It is anticipated that about 70% of the
annualised cost savings will be realised in FY25, weighted towards the second
half of the year.
Third strategic growth plan ("SP3")
YouGov's current strategic growth plan aims to deepen YouGov's strategy and
complete the final stage of positioning ourselves as a platform business with
a dual go-to-market strategy targeting enterprise sales and a digital path to
purchase. This strategic growth plan is underpinned by three key growth areas:
● Deepening client relations and increasing market penetration through our
syndicated data products and customised research;
● Driving greater usage of our self-serve client platform, through single
sign-on and a digital sales and marketing approach; and
● Targeting greenfield opportunities, such as newer products and M&A.
Following the announcement of our cost optimisation plan in August 2024, we
will be prioritising our investments in areas where we see the greatest
potential for return to ensure we remain on track to delivering on SP3. Some
of the identified areas of initial investment include:
● Upgrading our Data Products, as outlined above, to make the interface more
intuitive and adding features and pre-built content that increase the speed
and ease at which clients can derive the data and insights they need.
● Further building out our AI-enabled capabilities to enhance operational
efficiency through workflow automation and develop client-facing product
innovations. Beginning with YouGov Profiles, our flagship audience
intelligence tool, we will look to introduce conversational search and
analytics to make the data within our vast dataset more discoverable.
● Enhancing our sales organisation through the appointment of new regional
leaders for UK and EMEA to drive improved performance.
Following the completion of the CPS transaction, the Group revised its
medium-term guidance to include the contribution from CPS, and our ambitions
remain unchanged:
● Medium-term revenue of £650 million; and
● Medium-term adjusted operating profit margin of 25%.
The Board is confident that our identified investment priorities and cost
optimisation measures will allow the Group to focus on its long-term strategic
plan and deliver on the ambitious financial targets over time.
Current trading and outlook
● Trading for the current financial year is broadly in line with the prior year
as expected, reflecting the slower sales bookings in H2 FY24.
● Continue to see demand for our high-quality Custom Research data, while seeing
longer sales cycles for Data Products subscription sales.
● Sales bookings momentum is expected to pick up in Q2 and Q3 FY25 as we head
into renewal season for our Data Products, supported by the launch of new
products and features as well as an improvement in market conditions.
● We expect the Group to meet current market expectations for FY25, which will
be second half weighted due to the ongoing restructuring process.
● We maintain a disciplined approach to cash management, and as of 31 July 2024,
the Group has a robust balance sheet, with approximately £74 million in cash
and cash equivalents and €16 million of the revolving credit facility
remains undrawn.
● Moving into FY25, enhancing our core Data Products, further development of AI
capabilities and building up our team of expert researchers and data
scientists will be our key investment areas.
Leadership team
In my first year at YouGov, I have been thoroughly impressed, not only by the
calibre of the staff and their dedication to the company, but also their
enthusiasm and entrepreneurial spirit. As we evolve into a market leader in
our field, it is vital that we become a more globally connected organisation
with a clearer corporate structure, which in turn will lead to better
accountability and performance.
Beginning with the aforementioned appointment of a new Chief Commercial
Officer (CCO), we have reorganised our sales and regional teams to enable
greater collaboration, clear roles and responsibilities and alignment of
goals. Under the new structure, regional heads have full responsibility of the
commercial and delivery teams and report into the CCO. This will enable us to
better serve our large multi-national clients using a more global approach to
our key client relationships.
Furthermore, we have strengthened our senior leadership team with the
appointment of Marc Ryan as Chief Product Officer (CPO) in September 2024.
Marc's initial focus will be on YouGov's Data Products, and he joins YouGov to
oversee our product strategy with a focus on customer-centric innovation. As
CPO, Marc will set our long-term product vision across the entire product
ecosystem, including cross-product convergence. With over 30 years of
experience in the market research industry, Marc has an exceptional track
record as a transformational leader specialising in data, product, and scaling
growth across dynamic B2C and B2B environments. Marc joins us at an exciting
time for the industry as advances in zero party data and AI see clients
demanding more from their research. Combining Marc's expertise with YouGov's
renowned data products and our unrivalled proprietary data set, we will
continue to be the innovation leader in our industry.
Over the past year, I have witnessed firsthand how YouGov's talented team have
worked tirelessly to deliver on the Company's clear purpose and mission. While
the year has been one of the most challenging in YouGov's history, I remain
excited about our future knowing that we have the right products, people and
strategy in place.
Steve Hatch
Chief Executive Officer
5 November 2024
1 According to the ESOMAR Global Market Research Report published in September
2024.
2 Defined in the explanation of non-IFRS measures below.
Chief Finance Officer's Review
While the Group delivered lower than expected growth in the 12 months to 31
July 2024, the first year of its third strategic growth plan, it continued to
show positive organic growth rates. The business has undergone a period of
transition and change over the past year which in part has led to a near-term
slowdown in its growth trajectory. However, we expect that the remedial
actions taken towards the end of the financial year will put us back on track
to delivering strong growth over the medium term and beyond.
Group revenue was up 30% in reported terms to £335.3m during the period,
largely due to the contribution from the acquired CPS business. On an
underlying(1) basis (excluding foreign exchange movements and contribution
from acquisitions) revenue was up 3% (FY23: 9%). Performance across the
regions was varied as weakness in EMEA (excluding CPS) due to internal
leadership challenges was offset by strong performance in the US, which
recorded growth of 8% on an underlying(1) basis.
Gross margin increased slightly to 81% (FY23: 80%), as higher spend on
external panel for niche audiences was offset by the inclusion of the CPS
business.
Group operating costs (excluding separately reported items) of £221.5m (FY23:
£158.2m) increased by 40% in reported terms. Adjusted operating profit(1) was
slightly ahead of the prior financial year at £49.6m (FY23: £49.1m),
including the contribution from the CPS acquisition, representing an adjusted
operating margin of 15% (FY23: 19.0%). Underlying(1) operating profit
decreased by 37% due to slower than expected revenue growth and increased
investments in staff costs at the start of the financial year.
Additionally, the Group's results were impacted by the net appreciation of UK
Sterling, as its average exchange rate was 4% higher against the US Dollar in
this period against the prior period. Movement against the Euro was 1% higher
compared to 31 July 2023. The net impact of foreign exchange on the Group's
adjusted operating profit(1) was a decrease of £2.6m compared to calculation
in constant currency terms.
The Group's statutory operating profit decreased to £10.9m (FY23: £44.4m),
after charging separately reported items of £38.7m (FY23: £4.7m).
FY24 presentational changes and FY23 restatements
During the reporting period, the company identified errors in the previously
reported FY23 financial statements. These errors have been corrected in
accordance with IAS 8, which requires retrospective restatement. The errors
related to capitalised software development and panel incentive provisions, as
noted below. There is immaterial income statement impact in 2023.
● Capitalised software development - it was identified that there was an error
in relation to the misapplication of IAS 38 accounting policy against software
additions. Previously the additions were being amortized in the month the cost
was incurred rather than when the asset was available for use. The software
development asset was understated by £4.4m.
● Panel Incentive provision - the Group historically accounted for panel
incentive provision under IAS 37, however in FY24 it was challenged whether
the arrangement with our panellists met the criteria of a financial liability
per IFRS 9/IAS 32 since the panellists hold a contractual right to receive
cash on reaching the specified redemption levels. Therefore, certain of the
panel incentive points have been redesignated as financial liabilities in the
opening balance sheet. The net impact has been to recognise to recognise a
financial liability of £3.3m and derecognise panel provision of £1.7m on the
prior year opening balance sheet, with the difference being recognised as an
adjustment to retained earnings.
The Group has reviewed and adjusted certain presentational items, triggered by
the transformational acquisition of CPS during the year. The adjustments have
been made to provide uniformity of accounting policies and processes and also
improve the comparability of performance. 2023 comparatives have been updated
to reflect these presentational changes. Key changes made include:
● Amortisation costs of acquired customer relationship and order backlog
intangible assets has been removed from adjusted operating profit and shown in
separately reported items. The change will give a more comparable view of
Group's performance with other market research and technology companies and
across our business segments.
● Certain expenses have been reclassified from administrative expenses to cost
of sales. These expenses are consumer panel amortisation charge and staff
costs directly attributable to data collection in Switzerland.
● Segmentation
○ Product segments have been updated to add CPS as a new segment and combine
Custom Research and Data Services into one segment called Research.
○ Regional segments have been updated to align with internal management
reporting structure. India which was previously included within Asia Pacific
is now included in EMEA. CPS is also included in EMEA.
○ Allocation of central costs to product segments has also been updated to
reflect change in internal structure. Additionally, certain revenues,
previously recognised as Central revenue have been reclassified to data
products and Research.
Performance by division
Following the acquisition of CPS, the segmental breakdown has been updated in
FY24 to include CPS as a separate division and to combine Custom Research and
Data Services, previously shown as separate divisions, into a single division
called "Research".
Revenue Year to Year to Revenue growth Underlying(1) revenue change %
31 July 2024 31 July 2023 (Restated) %
£m £m
Data Products 83.8 85.9 (2%) (1%)
CPS 74.2 - - -
Research 177.7 173.1 3% 5%
Intra-Group revenues (0.4) (0.7) (47)% (59%)
Group 335.3 258.3 30% 3%
Adjusted Operating Profit(1) Year to Year to Adjusted Operating Adjusted Operating Margin %
31 July 2024 31 July 2023 (Restated) Profit growth
£m £m %
Year to Year to
31 July 2024 31 July 2023
Data Products 27.4 36.8 (26%) 33% 43%
CPS 19.7 - 27% -
Research 19.8 25.5 (22%) 11% 15%
Central costs (17.3) (13.2) 31% - -
Group 49.6 49.1 1% 15% 19%
Data Products
Our subscription-based data products suite includes YouGov BrandIndex and
YouGov Profiles as well as newer behavioural products, such as YouGov Safe.
Revenue from Data Products decreased by 2% in the period and was largely flat
on an underlying(1) basis. The division saw underlying(1) growth across all
regions, except for low single-digit decline in the Americas, where new
subscription sales were lower owing to pressure on client budgets. Renewal
rates for our subscription products have remained in line with the prior year
as existing clients continue to maintain spend. The division saw strong growth
from its largest industry vertical, agencies, and the travel sector, while
there was weakness in the gaming and media owners segment.
As a result of the division's lower revenue performance, the adjusted
operating profit(1) from Data Products decreased by 26% to £27.4m.
Additionally, higher investments in Data Products as we look to improve the
user interface and build new products and features, resulted in a contraction
in the adjusted operating margin(1) to 33% (FY23: 43%).
CPS
Our CPS division provides household purchase data across 18 European
countries.
CPS contributed £74.2m of revenue and £19.7m in adjusted operating profit
following the completion of the acquisition on 9 January 2024. CPS's revenue
recognition policies have been harmonised with YouGov's and, as a result, most
of the revenue is now being recognised at a point in time as per the IFRS 15
definition. The division delivered a higher level of reports in July than
anticipated at the time of the trading update on 6 August 2024, leading to
higher revenue being recognised in FY24. This has also led to a high level of
profit contribution to Group results during the period and is expected to
normalise over a twelve-month period.
Research
Our Research division combines our legacy Data Services and Custom Research
divisions into a single reporting unit. It comprises our fast turnaround
research services, such as YouGov RealTime Omnibus, as well as customised
research projects and multi-year tracking studies.
Revenue in the Research division increased by 3% in reported and 5% in
underlying(1) terms to £177.7m, as the continued weakness in fast-turnaround
Data Services projects was more than offset by strong growth in ad-hoc and
multi-year Custom Research work. In particular, the Americas saw mid-teens
underlying(1) growth, largely driven by the technology sector. Good
performance was recorded in the UK, despite a slowdown in the media sector,
driven by new wins with retail clients and growth in the academic sector. EMEA
recorded a low single-digit increase on an underlying basis(1) primarily due
to weakness in the Swiss business.
The adjusted operating profit(1) decreased 22% over the prior year to £19.8m
and the margin contracted from 15% to 11%, due to higher staff costs and
investments in support functions.
Performance by geography
YouGov's geographic footprint spans the UK, Europe, the Americas, Asia Pacific
and the Middle East.
Revenue Year to Year to Revenue growth Underlying(1) revenue change %
31 July 2024 31 July 2023 (Restated) %
£m £m
UK 69.0 66.8 3% 3%
Americas 124.1 118.3 5% 8%
EMEA 141.2 69.0 N.A. (1%)
Asia Pacific 19.6 21.4 (8%) (4%)
Intra-Group revenues (18.6) (17.2) 8% 7%
Group 335.3 258.3 30% 3%
Adjusted Operating Profit(1) Year to Year to Operating Operating Margin %
31 July 2024 31 Jul Profit growth
£m 2023 (Restated) %
£m
Year to Year to
31 July 2024 31 July 2023
UK 11.8 13.3 (11%) 17% 20%
Americas 28.5 37.7 (24%) 23% 32%
EMEA 20.5 5.7 N.A. 15% 8%
Asia Pacific 2.0 3.0 (33%) 10% 14%
Central items (13.2) (10.6) 25% - -
Group 49.6 49.1 1% 15% 19%
Panel development by geography
We continued to invest in our panel to ensure we are able to meet our clients'
research needs and to deliver nationally representative samples in our newer
markets. As at 31 July 2023, the total number of registered panellists had
increased by 13% to 29 million, compared to 26 million as at 31 July 2023, as
set out in the table below.
Region Panel size at Panel size at Change
31 July 2024 31 July 2023 %
millions millions
UK 3.11 2.88 8%
Americas 10.32 9.28 11%
Mainland Europe (including CPS) 6.78 5.88 15%
MENA and India 3.57 3.07 16%
Asia Pacific 5.31 4.54 17%
Total 29.10 25.65 13%
Group financial performance
Amortisation of intangible assets
In the 12 months to 31 July 2024, amortisation charges for intangible assets
of £31.0m were £10.0m higher than the previous year, largely due to
amortisation of acquired customer relationship assets and order backlog linked
to the CPS acquisition. Amortisation of our panel assets increased by £1.6m
to £12.1m and amortisation of software decreased by £0.7m to £8.6m. £6.7m
(FY23: £7.9m) of the total software development charge related to assets
created through the Group's own internal development activities, £1.4m (FY23:
£1.2m) related to separately acquired assets and £0.5m (FY23: £0.2m) was
for amortisation on assets acquired through business combinations.
Separately reported items
Acquisition-related costs in the year of £17.3m comprise professional service
costs from banks, lawyers and accountants in respect of the acquisition of CPS
and KnowledgeHound and £0.7m of contingent consideration treated as staff
costs in respect of the acquisitions of Charlton Insights Inc., YouGov Finance
Limited (formerly Lean App Limited) and Faster Horses Pty Limited.
Re-organisation and integration costs of £9.1m were incurred in relation to
integration of acquired businesses into the Group and the provision made for
the planned restructuring as part of implementing the cost optimisation plan.
Amortisation of acquired customer relationship assets and order backlog, in
relation to the acquisition of CPS and LINK Marketing Services AG, amounted to
£9.9m for the period ended 31 July 2024 (FY23: £0.8m).
Impairment charge of £2.4m booked relating to goodwill and intangible assets
for MENA following annual goodwill impairment review.
Finance Costs
Group net finance costs increased to £6.9m (FY23: income of £0.2m). Interest
payable on our debt facilities amounted to £8.7m for the twelve months ended
31 July 2024. Finance income during the same period was £1.8m, largely due to
interest received on bank deposits.
Profit before tax and earnings per share
Adjusted profit before tax(1) of £45.0m was a decrease of 21% versus the
prior year, below the adjusted operating profit growth, largely due to
interest expense in relation to the new debt facility entered into during this
financial year and a lower share-based payment charge. The adjusted tax
rate(1) increased from 21% in FY23 to 24% in the period. Statutory profit
before tax of £4.0m was reported compared to £44.7m in the year ended 31
July 2023, a decrease of 91%, after accounting for separately reported costs
of £38.7m.
Profit before tax includes a £1.8m loss resulting from of a social
engineering event in H2 2024. In this event, impersonation technology was
leveraged to successfully instruct the authorisation of a fraudulent payment.
There was no breach of YouGov systems, and no client, supplier, employee or
panel data was compromised. We believe we have taken the necessary actions,
and sufficiently increased control measures and employee awareness, to prevent
future incidents of this nature.
During the period adjusted basic earnings per share(1) declined by 29% from
41.1p to 29.4p, and statutory basic earnings per share decreased from 31.5p to
(2.0p).
31 July 2024 31 July 2023
(Restated)
£m £m
Adjusted operating profit(1) 49.6 49.1
Share-based payments 1.9 7.6
Imputed interest 0.4 0.2
Net finance income / (expense) (6.9) 0.3
Adjusted profit before tax(1) 45.0 57.2
Adjusted taxation(1) (10.7) (12.1)
Adjusted profit after tax(1) 34.3 45.1
Adjusted earnings per share (pence)(1) 29.4p 41.1p
Cash flow and capital expenditure
The Group generated £53.9m (FY23: £69.0m) in cash from operations (before
paying interest and tax) including a £9.4m inflow (FY23: £4.2m outflow) from
net working capital and £4.7m payment for deferred consideration; the cash
conversion rate (percentage of adjusted EBITDA(1) converted to cash) decreased
from 94% to 71% of adjusted EBITDA(1). Taxation payments for the year totalled
£9.6m (FY23: £9.3m).
The Group invested £4.2m (FY23: £7.8m) in the continuing development of our
technology platform internally and £1.9m (FY23: £1.2m) was invested on
separately acquired software tools. Investment in panel recruitment increased
compared to the prior year at £11.2m (FY23: £7.3m), of which £1.9m was in
relation to the inclusion of CPS. In addition, £2.0m (FY23: £1.1m) was spent
on the purchase of property, plant and equipment, resulting in a total
investment in fixed assets of £19.3m (FY23: £17.4m).
Total expenditure on intangible assets and property, plant and equipment is
shown below:
31 July 31 July
2024 2023
£m £m
Software development 6.1 9.0
Panel recruitment 11.2 7.3
Total expenditure on intangible assets 17.3 16.3
Purchase of property, plant and equipment 2.0 1.1
Total capital expenditure 19.3 17.4
In January 2024, the Group completed two acquisitions for a total
consideration of £268.8m (net of cash acquired). The consideration was funded
through a net drawdown of £224.2m in bank loans and existing cash on the
balance sheet, primarily generated from the £49.8m equity placing completed
in July 2023 in relation to the acquisition of CPS.
Net inflow from financing activities is after deducting the dividend payment
of £10.1m (FY23: £7.7m) and the purchase of treasury shares for £1.9m to
satisfy future employee share option exercises (FY23: £9.8m). As a result,
net cash balances at the year-end decreased by £32.9m to £73.6m.
Balance sheet
As at 31 July 2024, total shareholders' funds decreased from £199.1m to
£183.1m. Net assets decreased from £198.9m to £183.2m, with a minority
interest of £0.1m accounting for the difference.
During the period, the Group entered into a €280m debt facility to fund the
acquisition of CPS. This facility comprised a €40m Revolving Credit Facility
("RCF") and a €240m amortising term loan with a tenor of four years ("Term
loan"). As of 31 July 2024, the full-term loan was drawn and €24m was drawn
on the RCF. Non-current liabilities increased from £17.0m to £231.8m.
Net current assets decreased from £72.5m to a net current liability position
of £45.7m. Current assets decreased from £165.4m to £149.0m, mainly due to
the lower cash balance following the payment for the acquisition of CPS.
Current liabilities increased from £92.9m to £194.7m, mainly due to the
addition of CPS and the first scheduled payment on the debt facility due in
October 2024.
The Group's liquidity position remains strong with £73.6m in cash on the
balance sheet and €16m of the RCF available for drawdown. The Group's net
debt as at 31 July 2024 was £148.2m and, excluding the impact of IFRS 16, the
Group's leverage ratio(1) as of 31 July 2024 was 1.7x.
Proposed dividend
The Board is recommending the payment of a final dividend of 9.0p per share
for the year ended 31 July 2024. If shareholders approve the dividend at the
AGM (scheduled for 5 December 2024), it will be paid on Monday 9 December 2024
to all shareholders who were on the Register of Members at close of business
on Friday 29 November 2024.
Alex McIntosh
Chief Finance Officer
5 November 2024
1 Defined in the explanation of non-IFRS measures below.
Explanation of non-IFRS measures
Financial measure How we define it Why we use it
Separately reported items The items considered as separately Provides a more comparable basis to assess the year-to-year operational
business performance
reportable are acquisition-related costs, re-organisation and integration
costs and the amortisation of acquired customer list and order backlog
intangibles and impairment of assets.
Adjusted operating profit Operating profit excluding separately reported items
Adjusted operating profit margin Adjusted operating profit expressed as a percentage of revenue
Adjusted EBITDA Adjusted operating profit before depreciation and amortisation
Adjusted profit before tax Profit before tax before share-based payment charges, social taxes on
share-based payments, imputed interest and separately reported items
Underlying growth Growth in business excluding impact of current and prior period acquisitions,
and movement in exchange rates (i.e. current year performance calculated with
exchange rates held constant at prior year rates).
Adjusted taxation Taxation due on the adjusted profit before tax, thus excluding the tax effect Provides a more comparable basis to assess the underlying tax rate
of exceptional items
Adjusted tax rate Adjusted taxation expressed as a percentage of adjusted profit before tax
Adjusted profit after tax Adjusted profit before tax less adjusted taxation Facilitates performance evaluation, individually and relative to other
companies
Adjusted profit after tax attributable to owners of the parent Adjusted profit after tax less profit attributable to non-controlling
interests
Adjusted basic earnings per share Adjusted profit after tax attributable to owners of the parent divided by the
weighted average number of shares. Adjusted diluted earnings per share
includes the impact of dilutive share options
Cash conversion The ratio of cash generated from operations to adjusted EBITDA Indicates the extent to which the business generates cash from adjusted
operating profits
Net debt Short and long-term borrowings (excluding lease liabilities and including Provides an insight into the debt position of the Group, taking into account
pension defined benefit net deficit) less cash and cash equivalents. current cash resources.
Leverage ratio Net debt calculated as a multiple of the last 12 months Adjusted EBITDA.
Reconciliation of non-IFRS measures
Revenue reconciliation Year to Year to Change
31 July 2024 31 July 2023 %
£m £m
Revenue 335.3 258.3 30%
FX impact - (7.3)
Acquisitions (75.5) -
Underlying revenue 259.8 251.0 3%
Operating Profit reconciliation Year to Year to Change
31 July 2024 31 July 2023 %
£m (Restated)
£m
Statutory Operating Profit 10.9 44.4 (75%)
Separately reported items 38.7 4.7 N.A.
Adjusted Operating Profit 49.6 49.1 1%
FX impact - (2.6) -
Acquisitions (20.2) - -
Underlying(1) operating profit 29.4 46.5 (37%)
Adjusted EBITDA(1) reconciliation Year to Year to Change
31 July 2024 31 July 2023 %
£m (Restated)
£m
Adjusted Operating Profit 49.6 49.1 1%
Depreciation 5.7 4.3 33%
Amortisation(2) 21.1 20.2 4%
Adjusted EBITDA 76.4 73.6 4%
1 Defined in the explanation of non-IFRS measures above.
2 Excluding amortisation of acquired customer list and order backlog
intangibles accounted for in separately reported items.
Publication of Non-Statutory Accounts
The audited financial information relating to the year ended 31 July 2024 set
out below does not constitute the Group's statutory accounts for that year but
has been extracted from the statutory accounts, which have not yet been filed
with the Registrar.
Consolidated Income Statement
for the year ended 31 July 2024
2024 2023
Restated
Note £m £m
Revenue 1 335.3 258.3
Cost of sales (64.2) (51.0)
Gross profit 271.1 207.3
Administrative expenses (260.2) (162.9)
Operating profit 1 10.9 44.4
Separately reported items 3 38.7 4.7
Adjusted operating profit 1 49.6 49.1
Finance income 4 1.8 1.0
Finance costs 4 (8.7) (0.7)
Profit before taxation 1 4.0 44.7
Taxation 5 (6.1) (10.1)
(Loss)/profit after taxation 1 (2.1) 34.6
Attributable to:
- Owners of the parent (2.4) 34.5
- Non-controlling interests 0.3 0.1
(2.1) 34.6
Earnings per share
Basic earnings per share attributable to owners of the parent 7 (2.0) 31.5
Diluted earnings per share attributable to owners of the parent 7 (2.0) 30.8
Consolidated Statement of Comprehensive Income
for the year ended 31 July 2024
2024 2023
£m £m
(Loss)/profit for the year (2.1) 34.6
Other comprehensive (expense)/income:
Items that will not be reclassified to profit or loss
Actuarial gains 0.4 0.4
Items that may be subsequently reclassified to profit or loss
Currency translation differences (0.5) (2.9)
Other comprehensive expense (0.1) (2.5)
Total comprehensive (expense)/income for the year (2.2) 32.1
Attributable to:
- Owners of the parent (2.5) 32.0
- Non-controlling interests 0.3 0.1
Total comprehensive (expense)/income for the year (2.2) 32.1
Consolidated Statement of Financial Position
as at 31 July 2024
2024 2023 1 August 2022
Restated Restated
Note £m £m £m
Assets
Non-current assets
Goodwill 9 243.6 82.4 83.1
Other intangible assets 10 184.4 36.2 39.5
Property, plant and equipment 3.9 3.6 4.2
Right-of-use assets 18.6 10.1 11.3
Deferred tax assets 10.2 11.1 11.3
Total non-current assets 460.7 143.4 149.4
Current assets
Trade and other receivables 11 72.6 55.2 53.5
Current tax assets 2.2 3.0 4.1
Cash and cash equivalents 73.6 107.2 37.4
Current assets excluding assets classified as held for sale 148.4 165.4 95.0
Assets classified as held for sale 0.6 - -
Total current assets 149.0 165.4 95.0
Total assets 609.7 308.8 244.4
Liabilities
Current liabilities
Trade and other payables 12 105.5 68.3 70.1
Current tax liabilities 10.0 7.0 3.5
Provisions 24.0 14.5 15.7
Borrowings 13 50.4 - -
Lease liabilities 4.8 3.1 2.9
Total current liabilities 194.7 92.9 92.2
Net current (liabilities) / assets (45.7) 72.5 2.8
Non-current liabilities
Other payables 6.9 - -
Provisions 7.8 6.8 9.1
Defined benefit pension net liability 1.8 1.9 2.0
Lease liabilities 14.0 8.1 9.3
Borrowings 13 169.6 - -
Deferred tax liabilities 31.7 0.2 4.1
Total non-current liabilities 231.8 17.0 24.5
Total liabilities 426.5 109.9 116.7
Net assets 183.2 198.9 127.7
Equity
Issued share capital 0.2 0.2 0.2
Share premium 81.1 81.1 31.5
Treasury reserve (11.3) (19.4) (9.6)
Merger reserve 9.2 9.2 9.2
Foreign exchange reserve 11.2 11.7 14.6
Retained earnings 92.7 116.3 82.1
Total equity attributable to owners of the parent 183.1 199.1 128.0
Non-controlling interests in equity 0.1 (0.2) (0.3)
Total equity 183.2 198.9 127.7
Consolidated Statement of Changes in Equity
for the year ended 31 July 2024
Attributable to equity holders of the Company
Note Issued share capital Share premium Treasury reserve Merger reserve Foreign exchange reserve Retained earnings Equity attributable to owners of the parent Non- controlling interests in equity Total
£m £m £m £m £m £m £m £m £m
Balance at 1 August 2022 (Reported) 0.2 31.5 (9.6) 9.2 14.6 79.4 125.3 (0.3) 125.0
Prior year adjustments - - - - - 2.7 2.7 - 2.7
Balance at 1 August 2022 (Restated) 0.2 31.5 (9.6) 9.2 14.6 82.1 128.0 (0.3) 127.7
Actuarial gains 0.4 0.4 0.4
Exchange differences on translation - - - - (2.9) - (2.9) - (2.9)
Net (loss)/gain recognised directly in equity - - - - (2.9) 0.4 (2.5) - (2.5)
Profit for the year - - - - - 34.5 34.5 0.1 34.6
Total comprehensive income/(expense) for the year - - - - (2.9) 34.9 32.0 0.1 32.1
Issue of shares - 49.6 - - - - 49.6 - 49.6
Acquisition of treasury shares - - (9.9) - - - (9.9) - (9.9)
Treasury shares used to settle share option exercises - - 0.1 - - (0.1) - - -
Dividends paid 6 - - - - - (7.7) (7.7) - (7.7)
Share-based payments - - - - - 7.6 7.6 - 7.6
Tax in relation to share-based payments - - - - - (0.5) (0.5) - (0.5)
Total transactions with owners recognised directly in equity - 49.6 (9.8) - - (0.7) 39.1 - 39.1
Balance at 31 July 2023 (Restated) 0.2 81.1 (19.4) 9.2 11.7 116.3 199.1 (0.2) 198.9
Balance at 31 July 2023 (Reported) 0.2 81.1 (19.4) 9.2 11.7 113.6 196.4 (0.2) 196.2
Prior year adjustments for year ended 31 July 2022 - - - - - 2.7 2.7 - 2.7
Prior year adjustments for year ended 31 July 2023 - - - - - - - - -
Balance at 31 July 2023 (Restated) 0.2 81.1 (19.4) 9.2 11.7 116.3 199.1 (0.2) 198.9
Actuarial gains - - - - - 0.4 0.4 - 0.4
Exchange differences on translation - - - - (0.5) - (0.5) - (0.5)
Net (loss)/gain recognised directly in equity - - - - (0.5) 0.4 (0.1) - (0.1)
(Loss)/Profit for the year - - - - - (2.4) (2.4) 0.3 (2.1)
Total comprehensive income/(expense) for the year - - - - (0.5) (2.0) (2.5) 0.3 (2.2)
Acquisition of treasury shares - - (1.9) - - - (1.9) - (1.9)
Treasury shares used to settle share option exercises - - 10.0 - - (10.0) - - -
Dividends paid 6 - - - - - (10.1) (10.1) - (10.1)
Share-based payments - - - - - 2.7 2.7 - 2.7
Tax in relation to share-based payments - - - - - (1.6) (1.6) - (1.6)
Settlement of fully vested share options - - - - - (2.6) (2.6) - (2.6)
Total transactions with owners recognised directly in equity - - 8.1 - - (21.6) (13.5) - (13.5)
Balance at 31 July 2024 0.2 81.1 (11.3) 9.2 11.2 92.7 183.1 0.1 183.2
Consolidated Statement of Cash Flows
for the year ended 31 July 2024
2024 2023
Restated
Note £m £m
Cash flows from operating activities
Profit before taxation 4.0 44.7
Adjustments for:
Finance income 4 (2.0) (0.3)
Finance costs 4 8.7 0.7
Amortisation of intangibles 2 31.0 21.0
Depreciation 2 5.7 4.3
Impairments 10 1.7 -
Share-based payment expense 2 2.7 7.6
Settlement of share-based payments (2.6) -
Other non-cash items - (2.5)
Settlement of contingent consideration (4.7) (2.3)
(Increase) in trade and other receivables 2.5 (0.3)
Increase / (decrease) in trade and other payables 3.5 (2.8)
Increase / (decrease) in provisions 3.4 (1.1)
Cash generated from operations 53.9 69.0
Interest paid (6.6) (0.5)
Income taxes paid (9.6) (9.3)
Net cash generated from operating activities 37.7 59.2
Cash flow from investing activities
Acquisition of subsidiaries (net of cash acquired) (261.6) -
Purchase of property, plant and equipment (2.0) (1.1)
Purchase of intangible assets (17.3) (16.3)
Interest received 2.0 0.3
Net cash used in investing activities (278.9) (17.1)
Cash flows from financing activities
Proceeds from the issue of share capital (net of costs) - 49.8
Principal element of lease payments (3.9) (3.2)
Drawdown of bank loans 232.8 -
Repayment of bank loans (8.6) -
Dividends paid to shareholders (10.1) (7.7)
Purchase of treasury shares (1.9) (9.8)
Net cash generated from financing activities 208.3 29.1
Net (decrease) / increase in cash and cash equivalents (32.9) 71.2
Cash and cash equivalents at beginning of year 107.2 37.4
Exchange (loss) on cash and cash equivalents (0.7) (1.4)
Cash and cash equivalents at end of year 73.6 107.2
Notes to the Consolidated Financial Statements
for the year ended 31 July 2024
Nature of operations
YouGov plc and subsidiaries' (the "Group") principal activity is the provision
of digital market research.
YouGov plc (the "Company") is the Group's ultimate Parent Company. It is a
public limited company incorporated and domiciled in United Kingdom. The
address of YouGov plc's registered office is 50 Featherstone Street, London
EC1Y 8RT, United Kingdom. YouGov plc's shares are listed on the
Alternative Investment Market of the London Stock Exchange.
YouGov plc's annual consolidated financial statements are presented in UK
Sterling, which is also the functional currency of the Parent Company. Figures
are rounded to the nearest million, unless otherwise indicated.
Basis of preparation
The consolidated financial statements of YouGov plc are for the year ended 31
July 2024. They have been prepared under the historical cost convention
modified for fair values under International Financial Reporting Standards
("IFRS"). Financial assets, such as defined benefit plan assets, and financial
liabilities, such as contingent consideration, are measured at fair value.
These consolidated financial statements have been prepared in accordance with
UK-adopted international accounting standards in conformity with the
requirements of the Companies Act 2006 applicable to companies reporting under
IFRS.
The separate financial statements of the Company are presented as required by
the Companies Act 2006.
Restated Balance Sheet Due to Prior Period Errors (IAS 8)
During the preparation of the FY24 financial statements, the company
identified errors in the previously reported FY23 financial statements. These
errors have been corrected in accordance with IAS 8, which requires
retrospective restatement.
The errors related to capitalised software development and panel incentive
provisions. The adjustments have been applied retrospectively with the
comparative figures for the year ended 31 July 2023 restated accordingly. The
table below summarises the adjustments made. There is immaterial income
statement impact in 2023:
Adjustments from prior year
1 August 2022 Software and software development Panel incentive provision 1 August 2022
Reported Restated
£m £m £m £m
Intangible Assets 35.1 4.4 - 39.5
Trade & Other Payables (66.8) - (3.3) (70.1)
Provisions (11.2) - 1.6 (9.6)
Retained earnings 79.4 4.4 (1.7) 82.1
Adjustments from prior year
1 August 2023 Software and software development Panel incentive provision 1 August 2023
Reported Restated
£m £m £m £m
Trade & Other Receivables 55.0 - 0.2 55.2
Trade & Other Payables (64.7) - (3.6) (68.3)
Provisions (11.7) - 1.8 (9.9)
No retained earnings for the year ended 31 July 2023 with carry-over impact of
£2.7m from 1 August 2022 restated financials.
Capitalised software development
During the current year audit, it was identified that there was an error in
relation to the misapplication of IAS 38 accounting policy against software
additions. Previously the additions were being amortized in the month the cost
was incurred rather than when the asset was available for use. The software
development asset was understated by £4.4m (see note 10).
Panel Incentive provision
The group historically accounted for panel incentive provision under IAS 37,
however in FY24 it was challenged whether the arrangement with our panellists
met the criteria of a financial liability per IFRS 9/IAS 32 since the
panellists hold a contractual right to receive cash on reaching the specified
redemption levels. Therefore, the panel incentive points have been classified
into following categories:
● Contractual right to receive cash - financial liability under IFRS 9.
● Non-cash incentives - Provision under IAS37.Combination of cash/non-cash
incentives - financial liability for cash portion under IFRS 9.
The net impact has been to recognise to recognise a financial liability of
£3.3m and derecognise panel provision of £1.6m on the prior year opening
balance sheet. The difference has been recognised as an adjustment to retained
earnings
FY24 presentational changes and FY23 restatements
During the reporting period, the Group has reviewed and adjusted certain
presentational items, triggered by the transformational acquisition of CPS
during the year. The adjustments have been made to provide uniformity of
accounting policies and processes and also improve the comparability of
performance. 2023 comparatives have been updated to reflect these
presentational changes. None of these adjustments impact net assets, reported
statutory profit or the tax charge for the year. Key changes made include:
● Certain expenses totalling £13.6m have been reclassified from administrative
expenses to cost of sales. These expenses are consumer panel amortisation
charge and staff costs directly attributable to data collection in
Switzerland. The overall reclassification was for £13.6m.
● Amortisation costs of acquired customer relationship and order backlog
intangible assets has been removed from adjusted operating profit and shown in
separately reported items. The change will give a more comparative view of
Group's performance with other market research and technology companies and a
more comparable performance metric across our business segments. See Note 3
for further details.
● Segmentation - see note 1 for details
○ Product segments have been updated to add CPS as a new segment and combine
Custom Research and Data Services into one segment called Research.
○ Regional segments have been updated to align with internal management
reporting structure. India which was previously included within Asia Pacific
is now included in EMEA. CPS is also included in EMEA.
○ Allocation of central costs to product segments has also been updated to
reflect change in internal structure and allocation keys. Additionally,
certain revenues, previously recognised as other revenue have been
reclassified to data products and Research.
○ Revenue classification has been reviewed and changes made as some revenue
streams were previously incorrectly presented as point in time rather than
over time in line with the pattern of recognition.
○ Segmental revenue analysis showing sales by origin or destination of customer
have been updated to bring in additional countries following the CPS
acquisition.
● Definition of Key Management Personnel has been updated to include the
directors, the CEO and his direct reports only.
None of the above adjustments have an impact on net assets, reported statutory
profit for the year or tax charge.
Going concern
The Group meets its day-to-day working capital requirements through its cash
reserves and has access to a €40m Revolving Credit Facility ("RCF"). At 31
July 2024, the Group had a healthy liquidity position with £73.6m of cash and
cash equivalents. £20.0m of the RCF was drawn as at 31 July 2024. The Group
has net current liabilities of £45.7m and net assets of £183.2m as at 31
July 2024.
While FY24 saw a decline in profitability leading to the trading update in
June 2024, the Group achieved a 15% adjusted operating profit margin and
underlying revenue continued to increase year on year. Building on that, £20m
of cost actions have been built into the budget for FY25.
Having performed a going concern analysis covering the period out to January
2026, management consider it is appropriate to continue to adopt the going
concern basis in preparing the Consolidated and Company financial statements.
In doing so, management has considered:
● that the Group's revenue sources and operations are well diversified, by
country, currency and sector, and there is a track record of growth.
● the impacts of the current economic environment.
● strong operating cashflows projected based upon the Group's budget for the
year ended 31 July 2025.
● the acquisition of Consumer Panel Business of GfK SE on the 9 January 2024,
where positive cash generation has been experienced and is expected to
continue.
● the Group's ability to flex its cost base in response to any unexpected
reductions in trading activity.
● the Group's access to its new three-year multi-currency RCF which provides
sufficient liquidity when judged against operational requirements of the
Group.
● the Group's access to a term loan of €240m in January 2024 which is in place
until October 2027, with interest payments made quarterly and principal
payment made annually from October 2024.
● the acquisition of Yabble on the 6 August 2024 through a combination of cash,
equity, and a three year earn-out based on specific revenue targets being met.
The initial cash consideration for the acquisition was £1.3m.
The Group's financing arrangement require covenants to be met. The covenants
are Adjusted Leverage ratio (broadly, the ratio of Net Debt to Adjusted
EBITDA) and Interest Cover (broadly, the ratio of net finance charge to
Adjusted EBITDA). The facility covenants are tested semi-annually and include
(i) a maximum Adjusted Leverage of 3.0x and, (ii) a minimum Interest Cover of
4.0x. The first covenant testing period was 31st January 2024.
A severe but plausible scenario has been modelled whereby revenue does not
grow at all year on year, which is considered appropriate as it reflects not
achieving the expected growth built into the FY25 Budget across the now
diversified group including CPS. The severe but plausible scenario is not a
forecast of the Group and is designed to stress test liquidity and covenant
compliance.
In their review of the severe but plausible scenario, the Directors have also
considered several mitigations that would help maintain headroom on the
Group's covenants, and are at their discretion, including but not limited to:
● reduction/postponement of dividend payments,
● reduction of bonus payments, and
● removal of increased overheads to support the originally planned growth.
A reverse stress test was also performed using the severe but plausible
scenario and mitigations, it then took a further 9% reduction in revenue over
the going concern period to cause a breach in covenants. It was deemed this
was an implausible scenario, however if this scenario were to occur there are
further mitigations that could be applied.
The Directors have a reasonable expectation that the Group will be able to
continue in operation and meet its liabilities as they fall due for a period
of at least 12 months from the date of approval of these financial statements.
Accordingly, the Directors continue to adopt the going concern basis for the
preparation of the financial statements.
1 Segmental analysis
Supplementary analysis by geography
Revenue and adjusted operating profit by geography based on the origin of the
sale:
Research Data Products CPS Other revenue, eliminations and unallocated costs
Group
2024 £m £m £m £m £m
Revenue
Recognised over time 141.8 81.9 4.1 (0.1) 227.7
Recognised at a point in time 35.9 1.9 70.1 (0.3) 107.6
Total revenue 177.7 83.8 74.2 (0.4) 335.3
Cost of sales (40.4) (11.6) (9.2) (3.0) (64.2)
Gross profit 137.3 72.2 65.0 (3.4) 271.1
Administrative expenses (117.5) (44.8) (45.3) (13.9) (221.5)
Adjusted operating profit 19.8 27.4 19.7 (17.3) 49.6
Separately reported items - - - (38.7) (38.7)
Operating profit 19.8 27.4 19.7 (56.0) 10.9
Finance income 1.8
Finance costs (8.7)
Profit before taxation 4.0
Taxation (6.1)
Profit after taxation (2.1)
1 Americas refers to the US, Canada and Latin America.
2 EMEA includes Mainland Europe, Middle East, India and CPS
Research Data Products CPS Other revenue, eliminations and unallocated costs
Group
2023 (Restated) £m £m £m £m £m
Revenue
Recognised over time 130.2 83.5 - (0.1) 213.6
Recognised at a point in time 42.9 2.4 - (0.6) 44.7
Total revenue 173.1 85.9 - (0.7) 258.3
Cost of sales (39.7) (8.8) - (2.5) (51.0)
Gross profit 133.4 77.1 - (3.2) 207.3
Administrative expenses (107.9) (40.3) - (10.0) (158.2)
Adjusted operating profit 25.5 36.8 - (13.2) 49.1
Separately reported items - - - (4.7) (4.7)
Operating profit 25.5 36.8 - (17.9) 44.4
Finance income 1.0
Finance costs (0.7)
Profit before taxation 44.7
Taxation (10.1)
Profit after taxation 34.6
Supplementary analysis by geography: 2024 2023
Adjusted operating profit/ (loss) Adjusted operating profit/ (loss)
Revenue Revenue
£m £m £m £m
UK 69.0 11.8 66.8 13.3
Americas¹ 124.1 28.5 118.3 37.7
EMEA(2) 141.2 20.5 69.0 5.7
Asia Pacific 19.6 2.0 21.4 3.0
Intra-group revenues and other unallocated revenues/costs (18.6) (13.2) (17.2) (10.6)
Group 335.3 49.6 258.3 49.1
(1) Americas refers to US, Canada and Latin America; (2) EMEA includes
Mainland Europe, Middle East, India and CPS
2 Profit before taxation
Profit before taxation is stated after charging:
2024 2023
£m £m
Auditors' remuneration:
Fees payable for the audit of the parent company and the consolidated 1.1 0.8
financial statements
Audit of subsidiaries 0.2 0.2
Total auditors' remuneration 1.3 1.0
Depreciation and amortisation:
Amortisation of intangible assets (Note 10) 31.0 21.0
Depreciation of property, plant and equipment 2.0 1.7
Depreciation of right of use assets 3.7 2.6
Operating lease rentals:
Land and buildings 2.7 1.3
Other (income)/expenses:
Share-based payment expenses 2.7 7.6
Fraudulent payment resulting from social engineering event 1.8 -
Panel Incentives 23.4 20.4
Professional service costs (IT, advertising and L&P) 20.7 15.6
Charitable donations 0.1 0.2
Included within the fee payable to the auditor is £36,000 (2023: £Nil) for
audit related services (interim audit procedures).
3 Separately reported items
2024 2023
£m £m
Acquisition-related costs 17.3 3.9
Re-organisation and integration costs 9.1 -
Impairment 2.4 -
Amortisation of acquired customer list and order backlog intangibles 9.9 0.8
38.7 4.7
Acquisition-related costs in the year comprise of fees paid for services
received from banks, lawyers, accountants and other professionals in respect
of the acquisition of CPS and KnowledgeHound and £0.7m of contingent
consideration treated as staff costs in respect of the acquisitions of
Charlton Insights Inc., YouGov Finance Limited (formerly Lean App Limited) and
Faster Horses Pty Limited.
Re-organisation and integration costs are costs incurred in relation to
integration of acquired businesses into the Group and the provision made for
restructuring.
Impairment charges of £2.4m includes a goodwill impairment charge of £1.7m
and £0.7m in impairment for the EMEA panel asset.
4 Finance income and costs
2024 2023
£m £m
Interest receivable from bank deposits 2.0 0.3
Foreign exchange gains (0.2) 0.7
Total finance income 1.8 1.0
Interest payable on finance leases 0.5 0.3
Interest payable on borrowings (Note 13) 7.8 0.2
8.3 0.5
Imputed interest on contingent consideration and provisions 0.4 0.2
Total finance costs 8.7 0.7
Interest payable on borrowings represent the effective interest method which
adjusts for the unwind of amortised loan fees.
5 Taxation
The taxation charge represents:
2024 2023
£m £m
Current tax on profits for the year 4.5 9.0
Foreign tax 7.1 5.5
Adjustments in respect of prior years (1.8) (0.1)
Total current tax charge 9.8 14.4
Deferred tax:
Origination and reversal of temporary differences (3.3) (4.7)
Adjustments in respect of prior years (0.4) (0.1)
Impact of changes in tax rates - 0.5
Total deferred tax charge (3.7) (4.3)
Total income statement tax charge 6.1 10.1
The tax assessed for the year is higher (2023: higher) than the standard rate
of corporation tax in the UK. The Group's effective tax rate on profit is
152.7% (2023: 22.6%). Excluding the impact of costs relating to the
acquisition of CPS, the effective tax rate is 27.2%.
The differences are explained below:
2024 2023
£m £m
Profit before taxation 4.0 44.7
Tax charge calculated at Group's standard rate of 25% (2023: 21%) 1.0 9.4
Variance in overseas tax rates 0.1 (0.4)
Impact of change in in tax rates - 0.5
Impact of difference between CT & DT rate 0.1 (0.2)
Expenses not deductible for tax purposes 6.0 0.5
Adjustments in respect of prior years (2.2) (0.2)
Other differences 1.1 0.5
Total income statement tax charge for the year 6.1 10.1
Excess tax relief on employee share option schemes of £1.6m (2023: £0.2m)
was recognised as income tax directly in equity, split between current tax of
£0.2m (2023: £0.1m) and deferred tax of £1.8m (2023: £0.3m).
Excess tax relief on employee share option schemes of £1.6m (2023: £0.2m)
was recognised as income tax directly in equity, split between current tax of
£0.2m (2023: £0.1m) and deferred tax of £1.8m (2023: £0.3m).
The Group's current tax provision of £7.8m (2023: £4.0m) is management's
judgement of the amount of tax payable on open tax computations where the
liabilities remain to be agreed with tax authorities in the countries that the
group operates. Specifically, £2.7m of this balance relates to the uncertain
tax items for which a provision has been made. Due to the uncertainty
associated with such tax items, it is possible that at a future date, on
conclusion of open tax matters, the final outcome may vary significantly.
Appropriate weightings have been applied to the potential outcomes in
assessing the tax provision in line with the requirements of IFRIC 23.
Separately the group's deferred tax balance includes an uncertain tax position
in Germany due to a potential step up in tax base on intangible assets within
the CPS business following a demerger that took place July 2023. Management's
view is that it is more likely than not the German tax authorities would
successfully argue the step up in assets took place and as such, the deferred
tax workings reflect this position. If the tax authority decision went the
other way, the impact would be an increase in the deferred tax liability by
£7.2m and decrease in the acquisition consideration by £7.2m. Refer to Note
8 for further details.
6 Dividend
On 11 December 2023, a final dividend in respect of the year ended 31 July
2023 of £10.1m (8.75p per share) (2022: £7.7m (7.0p per share)) was paid to
shareholders. A dividend in respect of the year ended 31 July 2024 of 9.0p per
share, amounting to a total dividend of £10.6m is to be proposed at the
Annual General Meeting on 5 December 2024. These financial statements do not
reflect this proposed dividend payable.
7 Earnings per share
The calculation of the basic earnings per share is based on the earnings
attributable to Ordinary Shareholders divided by the weighted average number
of shares in issue during the year. Shares held in employee share trusts are
treated as cancelled for the purposes of this calculation.
The calculation of diluted earnings per share is based on the basic earnings
per share, adjusted to allow for the issue of shares and the post-tax effect
of dividends and/or interest, on the assumed conversion of all dilutive
options.
The adjusted earnings per share have been calculated to reflect the underlying
profitability of the business by excluding share- based payments and related
employer's social tax costs, imputed interest, impairment charges, other
separately reported items and any related tax effects as well as the
derecognition of tax losses. Share-based payments and related social taxes
have been excluded from the adjusted earnings per share as the YouGov Plc
share price is a key driver of these costs. The share price varies for many
reasons so is not directly impacted by management.
2024 2023
£m £m
Profit after taxation attributable to equity holders of the Parent Company (2.4) 34.5
Add: share-based payments 2.7 7.6
Add: social taxes on share-based payments (0.8) -
Add: imputed interest (Note 5) 0.4 0.2
Add: separately reported items (Note 4) 38.7 4.7
Tax effect of the above adjustments and adjusting tax items (4.6) (1.9)
Adjusted profit after taxation attributable to equity holders of the Parent 34.0 45.1
Company
Reconciliations of the earnings and weighted average number of shares used in
the calculations are set out below.
2024 2023
Number of shares
Weighted average number of shares during the year: ('m shares)
- Basic 115.6 109.6
- Dilutive effect of share options 3.1 2.5
- Diluted 118.7 112.1
The adjustments have the following effect:
Basic earnings per share (2.0) 31.5
Share-based payments 2.3 6.9
Social taxes on share-based payments (0.7) 0.0
Imputed interest 0.3 0.3
Separately reported items 33.5 4.2
Tax effect of the above adjustments and adjusting tax items (4.1) (1.8)
Adjusted earnings per share 29.4 41.1
Diluted earnings per share (2.0) 30.8
Share-based payments 2.3 6.7
Social taxes on share-based payments (0.7) -
Imputed interest 0.3 0.3
Separately reported items 32.6 4.1
Tax effect of the above adjustments and adjusting tax items (4.0) (1.8)
Adjusted diluted earnings per share 28.5 40.1
8 Business Combinations
During the period, the Group completed two acquisitions. For both acquisitions
the Group obtained control through acquiring 100% of the voting equity
interest.
Acquisition Date of acquisition Region/ Country Primary reason for acquisition Principal activity
KnowledgeHound 08 January 2024 US Expansion of data analytics offering SaaS-based search-driven analytics platform
Gold CP Holding BV ("CPS") 09 January 2024 Europe Growth and expansion within Europe and new product offering European household market research company
CPS is a leading European provider of data intelligence, primarily for the
fast-moving consumer goods (FMCG) industry. The company tracks household FMCG
purchases through a panel consisting of c.132 thousand households across 16
countries, providing granular views into customer purchasing data and insights
into customer behaviour and purchasing patterns.
KnowledgeHound provides a SaaS platform which allows its customer base to
maximize the use of data obtained from surveys. They do this by processing
data sets at predetermined sizes and providing clients access through web
portals to all-in-one search, visualisation, and an insights delivery
platform. Customers sign up to single or multi-year contracts and are invoiced
annually in advance. KnowledgeHound is based in Chicago, Illinois and operates
in variety of industries, including Technology, Consumer, Pharma, Media and
Insurance.
The Group has finalised the purchase price allocations for both the
acquisitions purchased in January 2024. The updated amounts recognised for
each class of assets and liabilities acquired are shown in the table below:
KnowledgeHound CPS Total
£m £m £m
Intangible assets 3.1 159.6 162.7
Tangible Assets - 8.2 8.2
Cash 0.1 16.6 16.7
Current assets(1) 1.4 18.2 19.6
Current liabilities (1.9) (42.8) (44.7)
Lease Liabilities - (6.0) (6.0)
Deferred Tax (net) 0.9 (35.7) (34.8)
Net assets acquired 3.6 118.1 121.7
Goodwill on acquisition 2.8 163.8 166.6
Total consideration(2) 6.4 281.9 288.3
1 The fair value of acquired receivables are £16.1m for CPS and £1.2m for
KnowledgeHound. The gross contractual amounts receivable are £16.2m for CPS
and £1.2m for KnowledgeHound, with a loss allowance of £0.1m for CPS and
£Nil for KnowledgeHound.
2 Total consideration for CPS includes a £7.2m liability to former owners
resulting from the change in the tax status for certain intangible assets,
£2.6m payable after year end and £255.5m cash paid (net of £16.6m cash
acquired). (Cash paid included £215m from two facilities drawn by the group
for this purpose - see Note 13).
The changes in the purchase price allocations from the provisional values
disclosed at half year ended 31 January 2024 relate to:
● CPS - increase in the value of intangible assets recognised, finalisation of
the acquisition price, updates to deferred taxes and an update to revenue
recognised per IFRS 15 in January. £2.6m is payable as a final payment for
the finalisation of the completion accounts. A £7.2m liability has been
recognised as payable to the previous owners as a result of the change in the
tax status for certain intangible assets.
● KnowledgeHound - update of deferred taxes recognised.
Fair value
Fair value adjustments included the recognition of the fair value of customer
relationships, brand value and panel for CPS and software development in
relation to KnowledgeHound. There are no fair value adjustments in relation to
the consideration paid.
Goodwill
The goodwill amount in relation to KnowledgeHound is attributable to the
workforce and future economic benefits from new as-yet-to-be delivered
technology initiatives. The goodwill amounts in relation to CPS is
attributable to the workforce and the future benefit to YouGov of being able
to engage with new audiences in Europe and America. The structure of the
transaction is such that goodwill is only deductible in Germany. This is as a
result of an uncertain tax position in Germany due to a potential step up in
tax base on intangible assets following a demerger that took place in July
2023. Management's view is that it is more likely than not the German tax
authorities would successfully argue the step up in assets took place and, as
such, the deferred tax workings reflect this position of a reduction in
deferred tax liability of £7.2m and a recognition in acquisition
consideration of £7.2m.
Acquisition-related costs
Acquisition-related costs incurred as part of the business combinations are
disclosed in Note 3.
Revenue and profit contribution
From the date of acquisition, the acquired businesses have contributed the
following revenue and profit before tax attributable to the equity holders of
YouGov plc as outlined in the table below:
Revenue Profit for the year
£m £m
KnowledgeHound 1.3 0.3
Gold CP Holding BV (CPS) 74.2 7.2
75.5 7.5
If the acquisitions had occurred on 1 August 2023, consolidated pro-forma
revenue and profit before tax for the year ended 31 July 2024 would have been
£398.9m and £23.0m respectively. These amounts have been calculated using
the subsidiary's results and adjusting them for the additional depreciation
and amortisation that would have been charged, assuming that the fair value
adjustments to property, plant and equipment and intangible assets had applied
from 1 August 2023, together with the consequential tax effects.
9 Goodwill
Americas Rest of Europe DACH Middle East Asia Pacific UK CPS Total
£m £m £m £m £m £m £m £m
Carrying amount at 1 August 2022 36.5 5.9 27.0 1.8 2.8 9.1 - 83.1
Exchange differences (1.1) 0.1 0.6 (0.1) (0.2) - - (0.7)
Carrying amount at 31 July 2023 35.4 6.0 27.6 1.7 2.6 9.1 - 82.4
At 31 July 2023
Cost 35.4 8.1 30.1 1.7 2.6 9.1 - 87.0
Accumulated impairment - (2.1) (2.5) - - - - (4.6)
Net book amount 35.4 6.0 27.6 1.7 2.6 9.1 - 82.4
Carrying amount at 1 August 2023 35.4 6.0 27.6 1.7 2.6 9.1 - 82.4
Additions 2.8 - - - - - 163.8 166.6
Impairment - - - (1.7) - - - (1.7)
Exchange differences - (0.1) (0.4) - - - (3.2) (3.7)
Carrying amount at 31 July 2024 38.2 5.9 27.2 - 2.6 9.1 160.6 243.6
At 31 July 2024
Cost 38.2 8.0 29.7 1.7 2.6 9.1 160.6 249.9
Accumulated impairment - (2.1) (2.5) (1.7) - - - (6.3)
Net book amount 38.2 5.9 27.2 - 2.6 9.1 160.6 243.6
CPS is treated as a separate CGU as it is run and managed by a separate
management team who manage across all of the CPS countries. It's customer base
is also largely multi-national.
In accordance with IAS 36, the carrying values of goodwill and other
intangible assets are reviewed annually for impairment. The annual impairment
review was undertaken as at 31 July 2024. This included the review of the
newly acquired CPS business. The recoverable amounts of all CGUs have been
determined based on value in use calculations. This review assessed whether
the carrying value of goodwill was supported by the net present value of
future cash flows derived from assets using a projection for each CGU for a
period of five years from 31 July 2024.
The sources of the assumptions used in making the assessment are as follows:
● CGU revenue annualised growth rates are 6% to 21% for years 1 to 5 (2023: 7%
to 11%). Growth rates are based on both internal and external market
information. Higher growth rates reflect the low Year 1 growth rate adjusted
to reflect short term trading conditions.
● Perpetuity growth rates are 1.5% to 2.3% (2023: 2.5%).
● Pre-tax weighted average costs of capital are 11% to 13% (2023: 11% to 14%).
● Gross profit margin rates are 74% to 88% (2023: 74% to 81%).
Management has performed a sensitivity analysis on the net present value of
the future cash flows by applying reasonably possible (but not unrealistic)
adverse effects on the impairment review variables that could arise
individually or collectively.
Below is a summary of the key assumptions for DACH and Asia Pacific which were
deemed to have a significant impairment risk, reflecting lower than expected
revenue growth in FY24. Management's assumption is that these CGUs will return
to previous levels of revenue and profitability in the short to medium term.
Continued under-performance would lead to increased risk of impairment.
Headroom Annualised WACC Terminal Nil Nil
(%)
(£m) Growth Rate Rate (%) Headroom Headroom Gross Margin Rate
(Value in Use less Carrying Value)
(%) Growth Rate (%)
(%)
DACH 43 6% 12.2% 1.5% 1.2% 69%
Asia Pacific 81 16% 12.7% 2.3% 2.6% 66%
Management have written off the goodwill for MENA of £1.7m reducing the
carrying value to the recoverable amount of £1m (value in use method). The
impairment reflects a re-assessment of the carrying value following the
failure to pass all of the sensitivity tests performed. This reflects the
continued under-performance in expected revenue growth and the impact of key
personnel changes. MENA forms part of the EMEA operating unit. Sufficient
headroom exists in the remaining CGUs to support the valuation of the
goodwill.
10 Other intangible assets
Group (Restated) Consumer panel Software and software development Customer contracts and lists Order Backlog Trademarks and product development and Brands Total
£m £m £m £m £m £m
At 1 August 2022
Cost 44.8 59.6 11.5 - 2.6 118.5
Accumulated amortisation (29.9) (42.5) (5.3) - (1.3) (79.0)
Net book amount 14.9 17.1 6.2 - 1.3 39.5
Year ended 31 July 2023
Opening net book amount 14.9 17.1 6.1 - 1.4 39.5
Additions: -
Separately acquired 9.3 1.2 - - - 10.5
Internally developed - 7.8 - - - 7.8
Disposals (7.4) - - - - (7.4)
Amortisation:
Amortisation - current year charge (10.5) (9.3) (0.8) - (0.4) (21.0)
Amortisation - disposals 7.4 - - - - 7.4
Exchange differences (0.3) (0.2) (0.1) - - (0.6)
Closing net book amount 13.4 16.6 5.2 - 1.0 36.2
At 31 July 2023
Cost 45.6 68.4 11.2 - 2.6 127.8
Accumulated amortisation (32.2) (51.8) (5.9) - (1.7) (91.6)
Net book amount 13.4 16.6 5.3 - 0.9 36.2
Year ended 31 July 2024
Opening net book amount 13.4 16.6 5.3 - 0.9 36.2
Additions: -
Separately acquired 13.4 1.9 - - - 15.3
Internally developed - 4.2 - - - 4.2
Through business combinations 11.6 5.4 135.7 10.0 - 162.7
Disposals (20.6) (4.6) - - - (25.2)
Amortisation:
Amortisation - current year charge (12.1) (8.6) (6.1) (3.8) (0.4) (31.0)
Amortisation - disposals 20.6 4.6 - - - 25.2
Exchange differences (0.3) (0.4) (2.2) (0.1) - (3.0)
Closing net book amount 26.0 19.1 132.7 6.1 0.5 184.4
At 31 July 2024
Cost 49.7 74.9 144.7 9.9 2.6 281.8
Accumulated amortisation (23.7) (55.8) (12.0) (3.8) (2.1) (97.4)
Net book amount 26.0 19.1 132.7 6.1 0.5 184.4
11 Trade and other receivables
31 July 2024 31 July 2023
Group Group
(restated)
£m £m
Trade receivables 49.7 27.4
Amounts owed by Group undertakings - -
Other receivables 6.8 6.5
Prepayments 5.9 6.5
Accrued income 10.2 14.8
72.6 55.2
12 Trade and other payables
Current 31 July 2024 31 July 2023
Group Group
(restated)
£m £m
Trade payables 14.7 6.1
Amounts owed to Group undertakings - -
Accruals 28.6 21.6
Deferred income 42.9 26.6
Other payables 19.3 14.0
105.5 68.3
13 Borrowings
Borrowings are made up as follows:
2024 2023
Current Non-current Total Current Non-current Total
£m £m £m £m £m £m
Revolving Credit Facility (20.0) - (20.0) - - -
Term Loan (30.4) (169.6) (200.0) - - -
(50.4) (169.6) (220.0) - - -
Term Loan and Revolving Credit Facility (RCF)
On 29 September 2023, the Group entered into a secure facilities agreement
with a syndicate of banks led by Citibank to borrow €280m for a period of 4
years to finance the acquisition of CPS and provide working capital headroom.
The facilities constituted a €240m (£202m) term loan and €40m (£34m)
revolving credit facility. The interest rate on the term loan is 3 month
EURIBOR plus a margin which is adjusted based on the leverage ratio. The
interest rate plus margin payable for the RCF facilities is dependent on the
currency that is borrowed. The Group pays interest quarterly for both the term
loan and the RCF balances.
On 9 January 2024, the Group drew down €240m representing the full term loan
and €10m RCF to support payment of the acquisition costs for CPS. The
original RCF was repaid in April 2024 and new drawdown of £20m Pounds
Sterling was made on 18 July 2024.
The term loan is repayable over 4 years with annual payments due each October
based on an agreed payment profile. Repayment terms for the RCF are agreed at
each drawdown with the longest repayment term being until September 2026.
The Group has fixed and floating charges over its fixed and current assets in
respect of the above facilities. These charges ensure that the lender has a
priority claim over these assets in the event of default.
Covenants
There are financial covenants in favour of the lenders under the term loan
which are subject to a financial covenant test six monthly in line with the
Group's external reporting timelines. The covenants are:
● Interest cover shall not be less that 4.0:1
● Adjusted leverage for the period should not exceed 3.50: 1
The Group has complied with the financial covenants of the term loan during
the period.
14 Events after the reporting year
The group entered into a hedge transaction in August 2024 to hedge against
variable interest rate exposure arising from the bank loans in place. The
hedge term is aligned to the term loan.
On 6 August 2024 the Company acquired 100% of the share capital in The
Thinking Studio Limited (trading as Yabble) for an initial consideration of
£4.5m and a three year post-completion earn-out based upon specific revenue
targets being met. The earn-out is capped at c£15.5m. Initial consideration
has been settled through existing cash resources of £1.3m, with the sellers
agreeing to apply a portion of the cash proceeds towards a phased subscription
for Ordinary Shares at their market value. This acquisition will allow the
Group to power new and valuable insights through Yabble's generative AI
technology. As of the reporting date, the initial accounting for the business
combination is yet to be finalised. Therefore, certain disclosures required
could not be made. Specifically, the allocation of the purchase price to the
identifiable assets acquired and liabilities assumed.
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