REG - YouGov PLC - Half-year results
22 April 2020
YouGov plc
("YouGov" or the "Group")
Half-year results for the six months to 31 January 2020
Strong earnings growth in line with the second five-year plan
YouGov plc (LSE: YOU) the international research and data analytics group, today announces its results for the six months to 31 January 2020. This follows the trading update issued on 24 March 2020 in lieu of the results in accordance with guidance published by the Financial Conduct Authority and the Financial Reporting Council.
Summary of Results
Unaudited
six months to
31 January 2020
£m
Unaudited
six months to
31 January 2019 (restated)2
£m
Change
%
Audited
full year
to
31 July
2019 (restated)2
£m
Revenue
76.9
66.5
16%
136.5
Adjusted EBITDA
18.6
14.7
27%
31.7
Adjusted Operating Profit1
11.4
8.4
35%
18.5
Adjusted Operating Profit Margin (%)1
15%
13%
2p.p.
14%
Adjusted Profit before Tax1
12.1
9.5
27%
20.4
Adjusted Earnings per Share1
8.7p
6.4p
35%
14.8p
Statutory Operating Profit
9.5
8.4
13%
20.0
Statutory Profit before Tax
9.2
8.2
13%
19.4
Statutory Basic Earnings per Share (p)
6.2p
5.4p
16%
14.1p
1 Defined in the explanation of non-IFRS measures on page 13.
2 As of the current financial year the Group is required to apply IFRS 16: Leases and has elected to restate the comparative periods to ensure the results presented provide a clear picture of trading performance.
Financial highlights
· Revenue growth of 16% (HY 2019: 18%), with underlying business3 growth of 15%
· Adjusted operating profit1 up by 35% to £11.4m (HY 2019: £8.4m), with underlying business3 growth of 34%
· Adjusted profit before tax1 up by 27% to £12.1m (HY 2019: £9.5m)
· Adjusted earnings per share1 up by 35% to 8.7p (HY 2019: 6.4p)
· Adjusted operating profit margin1 up 2 percentage points (p.p.) to 15% (HY 2019: 13%)
· Statutory operating profit up 13% to £9.5m (HY 2019: £8.4m)
· Strong cash conversion of 93%
· Cash balances of £27.2m (31 January 2019: £25.0m)
3 Defined as growth in business excluding impact of current and prior period acquisitions and movement in exchange rates.
Operational highlights
· Data Products & Services revenue up by 17% to £43.4m (17% from underlying business3); now representing 55% of total revenue (HY 2019: 54%):
o Data Products revenue increased by 29% (27% from underlying business3) to £25.1m
o Data Services revenue increased by 3% (7% from underlying business3) to £18.3m, offset by restructuring in the Nordics, non-recurring election work in Asia Pacific and soft performance in Germany
· Custom Research revenue increased by 12% to £33.9m (11% from underlying business3):
o Continued strategic focus on higher margin work resulted in a 19% increase in operating profit to £8.0m
· US remains the largest driver with adjusted operating profit increasing by 20% to £9.3m
· Further investment in building and developing our panels in Australia, India, Italy, Mexico, Poland, Spain and Taiwan
Current trading and outlook
· Trading during the second half of our financial year (1 February to 31 July 2020) has started positively and is in line with Board expectations for the full year
· To date, we have not yet seen any material impact to our business from the COVID-19 pandemic
· Notwithstanding the current macro-economic situation, our pipeline of sales opportunities for our syndicated Data Products remains strong with more opportunities for growth in Custom Research
· Continued investment in strategic initiatives, e.g. roll-out of YouGov Direct across further geographies
· We are seeing a small minority of existing clients requesting payment deferrals or cancellations which we are handling on a case-by-case basis
· Given the unprecedented nature of this pandemic it is difficult to estimate its impact on our clients and their financial stability going forward. Therefore, we consider it prudent to anticipate that this situation could cause clients to delay projects, default or request longer payment terms, as well as a slowdown in some business wins.
· We continue to closely monitor this fluid situation and its potential impact on our pipeline over the coming months and into our next financial year which commences on 1 August 2020
Responding to COVID-19 and supporting our stakeholders
· With strong cash balances and no debt, we are confident of YouGov's resilience to endure the period of uncertainty. We have taken and will continue to take all the necessary actions to protect our business and people
· The health and safety of our people is of paramount importance. At the time of writing all 38 YouGov offices are closed with our entire workforce working from home
· No current intention to furlough any employees or apply for any Government loans or grants
· Being an online company, we have an established culture of remote and flexible working. Consequently, our clients continue to receive business as usual service, and we are well-positioned to maintain this continuity of service during this period
· Prudent cost reviews and contingency planning undertaken
· We continue to closely monitor the rapidly evolving situation in order to respond accordingly
· We understand the importance of accurate and easily accessible data and insights during these unprecedented times. To support the healthcare research community and public health bodies across the world, we have partnered with the Institute of Global Health Innovation at Imperial College London to gather global insights on people's behaviours and opinions in response to COVID-19, with the data being freely available for public health researchers
· We have also developed the YouGov COVID-19 Monitor for our commercial clients to help provide key consumer and social insights, including market and sector impact and health compliance, across 29 markets
Post-period highlights
· Strategic multi-year contract signed with a large international financial services company based in Germany
· Launched YouGov Recommend+, an NPS and brand tracking service making full use of YouGov's data assets
· Panel expansion underway to include Austria, Brazil, Switzerland and Turkey
· Aforementioned partnership with Imperial College London and launch of the YouGov COVID-19 Monitor
Stephan Shakespeare, Chief Executive, said:
"YouGov turns 20 this year and I am confident of the Company's resilience during this period of macro-economic and social uncertainty. We meet the new challenges posed by the COVID-19 pandemic from a position of strength, with a robust business model, strong balance sheet and skilled employees who continue to provide our clients with valuable opinions and consumer insights across their markets. YouGov data is an important tool for our clients at this time, helping them to understand and respond to rapidly changing consumer and social sentiment.
Trading during the second half of our financial year has started positively and is in line with Board expectations for the full year. We are yet to see any material impact to our business from the global outbreak of COVID-19 and we continue to monitor the situation closely."
Analyst presentation
A copy of the presentation will be available online at https://corporate.yougov.com/investors/presentations/ shortly after the half-year results announcement is live on the Regulatory News Service (RNS).
Forward looking statements
Certain statements in this interim 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
Stephan Shakespeare / Alex McIntosh
020 7012 6000
FTI Consulting
Charles Palmer / Elena Kalinskaya / Leah Dudley
020 3727 1000
Numis Securities Limited (NOMAD and broker)
Nick Westlake / Matt Lewis / Hugo Rubinstein
020 7260 1000
Chief Executive Officer's Review
We are pleased to report that in the six months to 31 January 2020, YouGov has achieved strong underlying revenue growth, and significant growth in profitability materially ahead of the market1. Once again we have demonstrated the strength of our position as a market leader in providing our clients with the valuable opinion, profiling and behavioural data and consumer insights to help them plan, develop and evaluate the impact of their marketing and communications activities.
1 According to the ESOMAR Global Market Research Report published in September 2019, global research market turnover grew by 2.1% in 2018 (or by -0.3% after inflationary effects are factored in).
Factors contributing to this strong performance include:
· Core and growth geographies: Strong performance in our core UK market and growing presence and authority in the US market where our electoral predictions and YouGov BrandIndex data continue to become more widely recognised as a valuable source of public perception.
· Data Products: Our high margin Data Products division continues to perform well, with further integration of new products through acquisitions serving specific vertical end-markets such as sports.
· Recent Acquisition: As announced in January, we ended the SMG Insight earn-out ahead of schedule as the business was exceeding its targets and we saw clear advantage from speedier integration with the wider sales and marketing effort, leveraging the position sports sponsorship now plays in many corporate marketing strategies.
· Superior technology: Our proprietary technology supporting the scalable nature of the syndicated data model.
Strategic Direction - second five-year plan
We have made a strong start to our next five-year strategic growth plan in this reporting period. As previously announced, the ambitious long-term incentive plan ("LTIP") performance targets to incentivise senior management through to 2023 are:
· Double group revenue
· Double group adjusted operating profit margin2
· Achieve an adjusted earnings per share2 compound annual growth rate in excess of 30%
2 Defined in the explanation of non-IFRS measures on page 13.
We are making good progress towards these goals in what we have designated as the investment phase of the long-term growth plan. In this phase we are continuing to invest in our technologies, platforms, support functions and markets to enable us to scale further and make the most of the opportunities we see in our markets. To take this performance to the next level, we are continuing to focus on three strategic pillars: Data Integration, Ethical Activation and Public Value.
Strong execution against our three strategic pillars
Data Integration
Data quality is become an ever-greater issue in our industry. The market's current concerns focus around three themes:
· Accuracy - can the data be relied upon to reflect the reality of consumer decisions? Do trends in the data reflect trends and outcomes in the actual market?
· Depth - do we learn enough about how people live, think and behave to understand the 'whole customer'?
· Connectedness - this concern is still not so clearly understood by many in the market, but we believe that connectedness is an emerging strength in YouGov's unique data structure. Can different aspects of a person's life be effectively analysed together? People often talk about 'connected data', but YouGov is unique in the range, reliability and genuine connectedness that exists from all our data having a single source - our global panel - and being organised into our connected data library the YouGov Cube.
It is the combination of these three qualities - accuracy, depth and true single-source connectedness - that allows effective prediction and activation. This is what we mean by the 'data integration' pillar of our strategy.
That data integration is made especially powerful by our cloud-based analytics platform, Crunch, which allows large data sets to be analysed easily and quickly and means that we can now take on much larger and more complex tracking studies. We recently won a very significant multi-country tracking study for one of Germany's largest and most admired financial services companies because of the degree to which our technology has transformed data gathering, processing and analysis. Our approach for this client is being partly productised as the new offering YouGov Recommend+, in which the base data and its engineering is syndicated, while the add-on data and analysis is custom.
Ethical Activation
Citizens' control of their own data has become a major issue recently, and the technology is being developed by YouGov (and many others) to enable people to control and share their data. In our new platform, YouGov Direct, members are able to add, edit or delete profiling data that we have collected on them, and to specify the terms under which each individual piece of information can be used to generate value for them. For each use of their data, a receipt is automatically generated on our blockchain which they can view on their account page.
The uses for YouGov Direct which will expand over the next years will make it a platform in the true business-model definition: "enabling value-creating interactions between external producers and consumers [by providing] an open, participative infrastructure for these interactions… [and setting] governance conditions for them." (Platform Revolution, Parker, Van Alstyne and Choudary, 2016). Not only corporate and academic clients, but anyone with a credit card, will be able to view and use the data of our members directly, and commission new data, without being mediated by us (except for client verification and enforcement of the terms and conditions of the platform regarding data exchange and use) and still with our members' identity being kept private. High-quality self-service research is at one end of the range of uses, and ethical activation of advertising and individualised services is at the other end.
YouGov Direct is currently available in limited release with selected clients in the UK and US, with other countries following soon. As recently announced, Ted Marzilli, who led YouGov's Data Products global business unit for the past 10 years, has been appointed as YouGov Direct CEO to lead the delivery to market. We will update on the progress made in six months' time.
Public Value
Part of YouGov's mission is to make the data we collect from the public valuable to the public.
All our syndicated data is made available on a website that makes it easy to search and use. The publication is in a form that freely delivers the value of the data at a level that is meaningful to the public, with the detail that matters only to marketers being behind the paywall. YouGov Ratings is one example of this approach, which is already gaining traction, being freely referenced by the media as well as the public.
We are planning to bring a rich variety of YouGov data and services to life for the public in a new website dedicated to the US Presidential Election that will be soft-launched in June 2020 and will grow throughout the campaign. It will have more data, interactive MRP-driven maps, and our InConvo chat-bot engaging visitors in a deep personal exploration of the content. This use of our data not only gives value back to the public, but also effectively markets membership of our panel and the uniqueness of our products and features.
Focus on operations
As a platform, both in the technological sense and the business-model sense, we need to be more efficient, smarter, faster, and 24/7. This is why we have been expanding the role of our shared service centres geographically, by adding Toronto in addition to the existing centres in Bucharest, Mumbai, and most recently Bangalore, as well as broadening the range of services, while also upgrading the technical capability (which is why we are now calling them Centres of Excellence, or CenX). They will support excellence in all parts of our business as well as improving operating effectiveness, with an always-on help desk for our syndicated products and self-service platform, and the ability to launch custom surveys at any time. This model integrates with our sales and marketing matrix, to which we are adding a new layer of account management to drive more sophisticated client-centricity.
We are continuing to expand the geographic range of panels, adding Austria, Brazil, Switzerland and Turkey within this calendar year, driven, in part, by clients of our global tracking capability.
Responding to COVID-19 and supporting our stakeholders
We currently have our entire global workforce working from home due to the pandemic. Being an online company with a limited supply chain and disparate operations and an established culture of remote and flexible working, we are well-positioned to maintain continuity of service to our clients during this period. YouGov's organisation is structured by global lines of business, with various teams across operating seamlessly across geographies. The ability to work remotely is inherent in the way we do business and we have shown how well prepared we were to implement this in a more pronounced way and to continue our business as usual. YouGov currently has no plans to furlough any staff, nor to apply for government loans or grants to support the continued operation of our business.
Our commercial response has included the launch of the YouGov COVID-19 Monitor, tracking people's behaviours and opinions relating to the pandemic across 29 markets. We have partnered with the Institute of Global Health Innovation at Imperial College London to provide such data to public health researchers for free.
Current trading and outlook
Trading during the second half (1 February to 31 July 2020) started positively, and the Board remains confident of achieving profit expectations for the full year despite the macro-economic uncertainty. We have a strong pipeline of sales opportunities for our syndicated Data Products and continue to see opportunities for growth in Custom Research which is aligned with our syndicated Data Products offer.
We have not seen any material impact to sales from the global outbreak of COVID-19, but we continue to closely monitor this fluid situation and its potential impact on our pipeline over the coming months and into our next financial year which commences on 1 August 2020. With strong cash balances and no debt, we are confident of YouGov's resilience in the face of any weakening client demand. In the short term the Group will maintain a strong cash position and is not expecting significant issues in cash collection from clients. We are seeing a small minority of existing clients requesting payment deferrals or cancellations which we handling on a case-by-case basis. Looking further ahead, we consider it prudent to anticipate that some of our clients will be impacted. In the event the disruption caused by COVID-19 prolongs, there is the risk that some clients may delay projects, default or request longer payment terms, and of slowdown in new business wins. In light of the uncertainty and risks, we have undertaken contingency planning and cost reviews.
As a final point, I would like to note that this year we celebrate the 20th Anniversary of the founding of YouGov and have reached a truly global footprint. On behalf of the Board and Shareholders, I would like to thank all our panellists, partners and clients, and in particular our employees, for their contribution and commitment to YouGov's ongoing success.
Stephan Shakespeare
Chief Executive Officer
22 April 2020
Chief Financial Officer's Review
The six months to 31 January 2020 is the first trading period after the successful completion of the Groups first five-year plan. In the period, we have continued to focus on higher margin and scalable sales across all parts of the Group while continuing to invest for future growth.
Total Group revenue rose to £76.9m in the period, compared to £66.5m in the six months to 31 January 2019. Underlying growth was 15% (but 16% in reported terms due to the depreciation of Pound Sterling against US Dollar and the full year impact of acquisitions) since the prior period.
In line with our strategy, a higher proportion of sales coming from higher margin products and services increased gross margins by 2 percentage points to 84%. Adjusted operating margins increased from 13% to 15%.
Group operating costs (excluding separately reported items) of £53.4m (HY 2019: £46.2m) increased by 16% in reported terms, and 15% in constant currency terms. Group adjusted operating profit (excluding separately reported items) increased to £11.4m (35% growth in the period) with strong continued growth in Data Products, coupled with revenue and margin improvement in the Custom Research business. The statutory operating profit (which is after charging other separately reported items of £1.8m) increased to £9.5m (HY 2019: £8.4m).
Technology investment and global expansion
The Group invested £3.5m (HY 2019: £2.7m) in the continuing development of our technology platform and increased the investment in panel recruitment at £4.2m (HY 2019: £2.2m) to support continued global expansion. Our investment in technology continued across three main areas: websites and mobile applications, survey systems, and our data analytics tool, Crunch. £0.6m (HY 2019: £2.2m) was spent on the purchase of property, plant and equipment, resulting in a total investment in fixed assets of £8.3m (HY 2019: £7.1m). Other cash outflows included £7.4m of deferred consideration payments, taxation payments of £1.7m (HY 2019: £2.0m) and the annual shareholder dividend payment of £4.3m (2019: £3.2m) in December 2019.
Investing activities in the period included £7.4m of deferred consideration payments for prior period acquisitions. The Group is expecting £13.2m of deferred consideration payable in respect of future earn-outs attached to acquisitions. International expansion was supported by further investment in building and developing our panels in Australia, India, Italy, Mexico, Poland, Spain and Taiwan. These investments enabled us to broaden our international research capability in these important markets.
There was a net cash outflow of £8.3m in the period, compared to £5.7m in the six months to 31 January 2019. Cash balances of £27.2m were £2.2m higher than at 31 January 2019 (£25.0m).
Amortisation of intangible assets and central costs
Amortisation charges for intangible assets totalled £5.0m in the period (2019: £4.1m) of which £0.7m (2019: £0.7m) related to assets acquired through business combinations, £2.1m (2019: £2.0m) to separately acquired assets and £2.2m (2019: £1.4m) to internally generated assets.
Central Costs have increased by £0.4m, reflecting the underlying growth of the business and investment in YouGov Direct and the Affiliate partner programme.
Profit before tax and earnings per share
Adjusted profit before tax of £12.1m was an increase of £2.6m (or 27%) on the comparable result of £9.5m for the six months to 31 January 2019. The adjusted tax rate decreased from 28% to 26%. Statutory profit before tax increased by 13% to £9.2m compared to £8.2m in the six months ended 31 January 2019.
During the period adjusted earnings per share grew by 35% from 6.4p to 8.7p and statutory earnings per share grew by 16% from 5.4p to 6.2p.
Performance by Product and Service
Data Products
Our syndicated data products suite includes YouGov BrandIndex, YouGov Profiles and YouGov SportsIndex. YouGov Plan & Track (the combined BrandIndex and Profiles proposition) is available in 24 countries (2019: 21). BrandIndex alone is available in 42 countries (2019: 40), while SportsIndex is available in 38 countries (2019: 38).
The performance of our Data Products division has contributed significantly to our Group revenue and adjusted operating profit. Revenue from Data Products increased by 29% (27% growth in underlying terms) in the period. The adjusted operating profit from Data Products increased by 43% to £8.5m and the operating margin increased by 3 percentage points to 34%.
Geographically, the US remains the largest Data Products market and grew by 27% in in the period, (24% from the underlying business). The UK, France and Asia Pacific also contributed strong revenue growth of 30%, 18% and 33% respectively.
Data Services
Our Data Services division consists of our fast-turnaround research services, including our market-leading YouGov Omnibus.
In the period, revenue from Data Services increased by 3% (7% in underlying terms) to £18.3m. Performance in the period was affected by restructuring in the Nordics, non-recurring Election work in Asia Pacific and subdued performance in Germany. The focus on the US market (13% increase in reported revenue) and further territorial expansion has helped the division expand the revenue base beyond the core UK market.
The weaker revenue growth and increased investment contributed to a decrease of 16% in the Data Services operating profit to £2.8m and the operating margin declined from 19% to 15%.
Custom Research
Our Custom Research division includes tailored research projects and tracking studies.
During the period, the business revenue grew by 12% in reported terms and by 11% in underlying terms to £33.9m. Adjusted operating profit increased by 19% to £8.0m and the operating margin improved by 2 percentage points to 24%. This was largely due to revenue growth in the UK (20% increase) and US (13% increase) focused on higher margin project work.
Revenue
Six months to
31 Jan 2020
£m
Six months to
31 Jan 2019 (restated)
£m
Revenue growth
%
Underlying business1 revenue change %
Data Products
25.1
19.4
29%
27%
Data Services
18.3
17.8
3%
7%
Total Data Products & Services
43.4
37.2
17%
17%
Custom Research
33.9
30.4
12%
11%
Intra-group Revenues
(0.4)
(1.1)
-
-
Group
76.9
66.5
16%
15%
1 Defined as growth in business excluding impact of current and prior period acquisitions and movement in exchange rates.
Adjusted Operating Profit1
Six months to
31 Jan 2020
£m
Six months to
31 Jan 2019 (restated)
£m
Operating
Profit growth
%
Operating Margin
Six months to
31 Jan 2020
Six months to
31 Jan 2019 (restated)
Data Products
8.5
5.9
43%
34%
31%
Data Services
2.8
3.3
(16%)
15%
19%
Total Data Products & Services
11.3
9.2
22%
26%
25%
Custom Research
8.0
6.7
19%
24%
22%
Central Costs
(7.9)
(7.5)
-
-
-
Group
11.4
8.4
35%
15%
13%
1 Defined in the explanation of non-IFRS measures on page 13.
Performance by Geography
Revenue
Six months
to
31 Jan 2020
£m
Six months
to
31 Jan 2019 (restated)
£m
Revenue
growth / (reduction)
%
Underlying business1
revenue
change %
UK
23.6
19.8
19%
19%
USA
32.1
27.2
18%
17%
Mainland Europe
11.7
12.1
(3%)
(1%)
Middle East
5.8
5.3
10%
8%
Asia Pacific
6.0
5.2
15%
14%
Intra-group Revenues
(2.3)
(3.1)
-
-
Group
76.9
66.5
16%
15%
1 Defined as growth in business excluding impact of current and prior period acquisitions and movement in exchange rates.
Adjusted Operating Profit1
Six months to
31 Jan 2020
£m
Six months to
31 Jan 2019 (restated)
£m
Operating
Profit growth
%
Operating Margin
Six months to
31 Jan 2020
Six months to
31 Jan 2019 (restated)
UK
7.8
5.6
41%
33%
28%
USA
9.3
7.7
20%
29%
28%
Mainland Europe
0.9
1.6
(45%)
8%
14%
Middle East
1.7
1.8
(8%)
29%
35%
Asia Pacific
0.0
(0.1)
(144%)
1%
(2%)
Central Costs
(8.3)
(8.2)
-
-
-
Group
11.4
8.4
35%
15%
13%
1 Defined in the explanation of non-IFRS measures on page 13.
Panel Development
We continue to invest in our online panel to increase our research capabilities, both in new geographies and specialist panels. At 31 January 2020, the total number of registered panellists had increased to 9.6 million, compared to 7.4 million at 31 January 2019, as set out in the table below.
Region
Panel size at
31 January 2020
Panel size at
31 January 2019
UK
1,797,500
1,522,400
Americas
3,700,700
2,710,800
Europe
1,373,400
1,078,800
Middle East
1,153,700
1,010,200
Asia Pacific
1,570,300
1,098,200
Total
9,595,600
7,420,400
Explanation of Non-IFRS measures
Financial Measure
How we define it
Why we use it
Separately reported items
Items that in the Directors' judgement are one-off or need to be disclosed separately by virtue of their size or incidence
Provides a more comparable basis to assess the year-to-year operational business performance and is how our performance is reviewed internally
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, imputed interest and separately reported items
Adjusted taxation
Taxation due on the adjusted profit before tax, excluding the tax effect of separately reported items
Provides a more comparable basis to assess the underlying tax rate
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 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 share options
Constant currency revenue change
Current year revenue change compared to prior year revenue in local currency translated at the current year average exchange rates
Shows the underlying revenue change by eliminating the impact of foreign exchange rate movements
Cash conversion
The ratio of cash generated from operations to adjusted EBITDA
Indicates the extent to which the business generates cash from adjusted EBITDA
Reconciliation of Non-IFRS measures
Adjusted Operating Profit1
Six months
to
31 Jan 2020
£m
Six months
to
31 Jan 2019 (restated)
£m
% Change
Statutory operating profit
9.5
8.4
13%
Separately reported items
1.9
-
Adjusted operating profit1
11.4
8.4
35%
Adjusted EBITDA1
Six months
to
31 Jan 2020
£m
Six months
to
31 Jan 2019 (restated)
£m
% Change
Adjusted operating profit
11.4
8.4
35%
Depreciation
2.2
2.2
Amortisation
5.0
4.1
Adjusted EBITDA1
18.6
14.7
27%
Adjusted Profit Before Tax1
Six months
to
31 Jan 2020
£m
Six months
to
31 Jan 2019 (restated)
£m
% Change
Statutory profit before tax
9.2
8.2
13%
Separately reported items
1.9
-
Share based payments
0.9
1.2
Imputed interest
0.1
0.1
Adjusted profit before tax1
12.1
9.5
27%
1 Defined in the explanation of non-IFRS measures on page 13.
YOUGOV PLC
STATEMENT OF DIRECTORS' RESPONSIBILITiES
For the six months ended 31 January 2020
The directors confirm that these condensed interim financial statements have been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and that the interim management report includes a fair review of the information required by DTR 4.2.7 and DTR 4.2.8, namely:
· an indication of important events that have occurred during the first six months and their impact on the condensed set of financial statements, and a description of the principal risks and uncertainties for the remaining six months of the financial year; and
· material related-party transactions in the first six months and any material changes in the related-party transactions described in the last annual report.
The Board of Directors of YouGov plc are:
· Roger Parry - Non-Executive Chair
· Rosemary Leith - Non-Executive Director
· Andrea Newman - Non-Executive Director
· Ashley Martin - Non-Executive Director
· Stephan Shakespeare - Chief Executive Officer
· Alex McIntosh - Chief Financial Officer
· Sundip Chahal - Chief Operating Officer
By order of the Board:
Alex McIntosh
Chief Financial Officer
22 April 2020
YOUGOV PLC
CONSOLIDATED INCOME STATEMENT
For the six months ended 31 January 2020
Unaudited
Unaudited
Audited
6 months to
6 months to
Year ended
31 January
31 January
31 July
2020
2019
2019
(restated)
(restated)
Note
£'000
£'000
£'000
Revenue
3
76,929
66,544
136,487
Cost of Sales
(12,163)
(11,931)
(24,206)
Gross profit
64,766
54,613
112,281
Administrative expenses
(55,238)
(46,166)
(92,260)
Operating profit
3
9,528
8,447
20,021
Separately reported items
4
(1,847)
34
1,529
Adjusted operating profit1
11,375
8,413
18,492
Share of post-tax losses in joint ventures
-
(37)
(52)
Finance income
172
234
255
Finance costs
(504)
(470)
(868)
Profit before taxation
9,196
8,174
19,356
Taxation
5
(2,901)
(2,522)
(5,086)
Profit after taxation
6,295
5,652
14,270
Attributable to:
Equity holders of the parent company
6,590
5,652
14,869
Minority interests
(295)
-
(599)
6,295
5,652
14,270
Earnings per share
Basic earnings per share attributable to equity holders of the company
6
6.2p
5.4p
14.1p
Diluted earnings per share attributable to equity holders of the company
6
5.9p
5.0p
13.1p
1 Defined in the explanation of non-IFRS measures on page 13.
YOUGOV PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six months ended 31 January 2020
Unaudited
Unaudited
Audited
6 months to
6 months to
Year ended
31 January
31 January
31 July
2020
2019
2019
(restated)
(restated)
£'000
£'000
£'000
Profit for the period
6,295
5,652
14,270
Other comprehensive income
Item that may be subsequently reclassified to profit or loss
Currency translation differences
(5,281)
(1,196)
4,890
Other comprehensive income for the year
(5,281)
(1,196)
4,890
Total comprehensive income for the period
1,014
4,456
19,160
Attributable to:
Equity holders of the parent company
1,305
4,456
19,759
Minority interests
(291)
-
(599)
Total comprehensive income for the period
1,014
4,456
19,160
Items in the statement above are disclosed net of tax.
YOUGOV PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
For the six months ended 31 January 2020
Unaudited
Unaudited
Audited
31 January 2020
31 January 2019 (restated)
31 July
2019 (restated)
Assets
Note
£'000
£'000
£'000
Non-current assets
Goodwill
8
63,590
62,518
65,637
Other intangible assets
8
19,046
16,525
16,737
Property, plant and equipment
8
4,035
4,525
4,424
Right of use assets
8
9,299
11,456
10,529
Deferred tax assets
8,623
9,559
11,207
Total non-current assets
104,593
104,583
108,534
Current assets
Trade and other receivables
31,875
34,573
33,726
Current tax assets
2,436
517
930
Cash and cash equivalents
27,168
24,953
37,925
Total current assets
61,479
60,043
72,581
Total assets
166,072
164,626
181,115
Liabilities
Current liabilities
Trade and other payables
36,419
31,850
40,041
Contingent consideration
1,629
6,181
2,791
Provisions
5,460
4,060
4,931
Current lease liabilities
2,508
2,925
2,891
Current tax liabilities
987
1,164
741
Total current liabilities
47,003
46,180
51,395
Net current assets
14,476
13,863
21,186
Non-current liabilities
Contingent consideration
2,323
9,837
7,279
Provisions
4,472
4,184
4,623
Long term lease liabilities
7,251
9,053
8,217
Deferred tax liabilities
2,012
2,188
2,158
Total non-current liabilities
16,058
25,262
22,277
Total liabilities
63,061
71,442
73,672
Net assets
103,011
93,184
107,443
Equity
Issued share capital
9
217
211
211
Share premium
31,345
31,300
31,345
Merger reserve
9,239
9,239
9,239
Treasury share reserve
(1,700)
-
(3,738)
Foreign exchange reserve
14,636
13,835
19,921
Retained earnings
50,123
38,560
51,023
Total shareholders' funds
103,860
93,145
108,001
Non-controlling interests in equity
(849)
39
(558)
Total equity
103,011
93,184
107,443
The accompanying accounting policies and notes form an integral part of this financial information.
Alex McIntosh
Chief Financial Officer
22 April 2020
YOUGOV PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months ended 31 January 2020
Attributable to equity holders of the Company
Share
capital
£'000Share premium
£'000Merger reserve
£'000Treasury share reserve £'000
Foreign
exchange reserve
£'000Retained earnings
£'000Total
£'000Non-controlling interest
£'000Total
£'000Balance at 1 August 2018 as reported
211
31,300
9,239
-
15,031
35,549
91,330
-
91,330
Change in accounting policy (Note 11)
-
-
-
-
-
(383)
(383)
-
(383)
Restated total equity at 1 August 2018
211
31,300
9,239
-
15,031
35,166
90,947
-
90,947
Period to 31 January 2019 (restated)
Exchange differences on translating foreign operations
-
-
-
-
(1,196)
-
(1,196)
-
(1,196)
Net gain recognised directly in equity
-
-
-
-
(1,196)
-
(1,196)
-
(1,196)
Profit for the period
-
-
-
-
-
5,652
5,652
-
5,652
Total comprehensive income for the period
-
-
-
-
-
5,652
4,456
-
4,456
Issue of shares
-
-
-
-
-
-
-
39
39
Dividends paid
-
-
-
-
-
(3,167)
(3,167)
-
(3,167)
Share-based payments
-
-
-
-
-
1,220
1,220
-
1,220
Tax in relation to share based payments
-
-
-
-
-
(311)
(311)
-
(311)
Total transactions with owners recognised directly in equity
-
-
-
-
-
(2,258)
(2,258)
39
(2,219)
Balance at 31 January 2019 (restated)
211
31,300
9,239
-
13,835
38,560
93,145
39
93,184
Period to 31 July 2019 (restated)
Exchange differences on translating foreign operations
-
-
-
-
6,086
-
6,086
-
6,086
Net income recognised directly in equity
-
-
-
-
6,086
-
6,086
-
6,086
Profit/(loss) for the period
-
-
-
-
-
9,217
9,217
(599)
8,618
Total comprehensive income for the period
-
-
-
-
6,086
9,217
15,303
(599)
14,704
Issue of shares
-
45
-
-
-
-
45
2
47
Dividends paid
-
-
-
-
-
-
-
-
-
Share-based payments
-
-
-
-
-
1,181
1,181
-
1,181
Tax in relation to share based payments
-
-
-
-
-
2,065
2,065
-
2,065
Acquisition of treasury shares
-
-
-
(3,738)
-
-
(3,738)
-
(3,738)
Total transactions with owners recognised directly in equity
-
45
-
(3,738)
-
3,246
(447)
2
(445)
Balance at 31 July 2019 (restated)
211
31,345
9,239
(3,738)
19,921
51,023
108,001
(558)
107,443
Period to 31 January 2020
Exchange differences on translating foreign operations
-
-
-
-
(5,285)
-
(5,285)
4
(5,281)
Net income recognised directly in equity
-
-
-
-
(5,285)
-
(5,285)
4
(5,281)
Profit for the period
-
-
-
-
-
6,590
6,590
(295)
6,295
Total comprehensive income for the period
-
-
-
-
(5,285)
6,590
1,305
(291)
1,014
Issue of shares
6
-
-
(5)
-
(1)
-
-
-
Dividends paid
-
-
-
-
-
(4,298)
(4,298)
-
(4,298)
Share-based payments
-
-
-
-
-
908
908
-
908
Tax in relation to share based payments
-
-
-
-
-
358
358
-
358
(Acquisition)/award of treasury shares
-
-
-
2,043
-
(4,457)
(2,414)
-
(2,414)
Total transactions with owners recognised directly in equity
6
-
-
2,038
-
(7,490)
(5,446)
-
(5,446)
Balance at 31 January 2020
217
31,345
9,239
(1,700)
14,636
50,123
103,860
(849)
103,011
YOUGOV PLC
CONSOLIDATED CASHFLOW STATEMENT
For the six months ended 31 January 2020
Unaudited
Unaudited
Audited
6 months to
Year ended
6 months to
31 January
31 July
31 January
2019 (restated)
2019 (restated)
2020
(restated)
(restated)
£'000
£'000
£'000
Profit before taxation
9,196
8,174
19,356
Adjustments for:
Finance income
(172)
(234)
(255)
Finance costs
504
470
868
Share of post-tax losses in joint ventures
-
37
52
Amortisation
5,004
4,135
8,809
Depreciation
2,266
2,160
4,396
Share based payments
908
1,220
2,401
(Profit)/loss on disposal of property, plant and equipment
(28)
5
6
Other non-cash operating profit (gains)/losses
831
(1,052)
(3,245)
Decrease/(Increase) in trade and otherreceivables
229
(1,814)
714
(Decrease)/Increase in trade and otherpayables
(2,222)
(3,390)
3,969
Increase in provisions
756
444
1,348
Cash generated from operations
17,272
10,155
38,419
Interest paid
(127)
(159)
(304)
Income taxes paid
(1,691)
(1,891)
(4,521)
Net cash generated from operating activities
15,454
8,105
33,594
Cash flow from investing activities
Acquisition of subsidiaries (net of cash acquired)
-
(217)
(228)
Settlement of deferred consideration
(7,448)
-
(4,520)
Purchase of business
-
(2,063)
(2,063)
Proceeds from sale of property, plant and equipment
38
-
-
Purchase of property, plant and equipment
(585)
(2,186)
(2,713)
Purchase of intangible assets
(7,714)
(4,875)
(9,453)
Interest received
172
68
211
Net cash used in investing activities
(15,537)
(9,273)
(18,766)
Cash flows from financing activities
Proceeds from the issue of share capital
-
-
86
Principal elements of lease payments
(1,491)
(1,372)
(2,844)
Dividends paid to company's shareholders
(4,298)
(3,167)
(3,167)
Dividends paid to minority shareholders
-
39
-
Purchase of treasury shares
(2,414)
-
(3,738)
Net cash used in financing activities
(8,203)
(4,500)
(9,663)
Net (decrease)/increase in cash and cash equivalents
(8,286)
(5,668)
5,165
Cash and cash equivalents at beginning of period
37,925
30,621
30,621
Exchange (loss)/gain on cash and cash equivalents
(2,471)
-
2,139
Cash and cash equivalents at end of period
27,168
24,953
37,925
YOUGOV PLC
notes to the CONDENSED consolidated interim financial statements
For the six months ended 31 January 2020
1 GENERAL INFORMATION
YouGov plc and subsidiaries' (the 'Group') principal activity is the provision of market research, opinion polling and data analytics.
YouGov plc is the Group's ultimate parent company. It is incorporated and domiciled in the United Kingdom. The address of YouGov plc's registered office is 50 Featherstone Street, London, EC1Y 8RT. YouGov plc's shares are listed on the Alternative Investment Market.
YouGov plc's condensed consolidated interim financial statements are presented in Pounds Sterling (£), which is also the functional currency of the parent company.
These condensed consolidated interim financial statements have been approved for issue by the Board of Directors of YouGov plc (the 'Board') on 22 April 2020.
This condensed consolidated interim financial information for the six months ended 31 January 2020 does not comprise statutory accounts within the meaning of Section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 July 2019 were approved by the Board on 8 October 2019 and delivered to the Registrar of Companies. The report of the auditors on those accounts was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement under section 498 of the Companies Act 2006. The condensed consolidated financial statements of the Group for the year ended 31 July 2019 are available from the Company's registered office or website (https://corporate.yougov.com/).
This condensed consolidated interim financial information is unaudited and not reviewed by the auditors.
2 BASIS OF PREPARATION
This condensed consolidated interim report for the six months ended 31 January 2020 has been prepared in accordance with the Disclosure and Transparency Rules of the Financial Services Authority and IAS 34 'Interim financial reporting' as adopted by the European Union. The condensed consolidated interim report should be read in conjunction with the annual financial statements for the year ended 31 July 2019, which has been prepared in accordance with IFRS's as adopted by the European Union.
Accounting policies
The following amendments to standards and interpretations have been adopted for the first time for the financial year beginning on 1 August 2019:
IFRS 16, 'Leases': This standard replaces the current guidance in IAS 17, under which lessees were required to make a distinction between a finance lease (on balance sheet) and an operating lease (off-balance sheet). IFRS 16 now requires lessees to recognise a lease liability reflecting future lease payments and a "right-of-use asset" for virtually all lease contracts. This is effective for accounting periods beginning after 1 January 2019 and therefore applies for the year commencing 1 August 2019.
Accounting policies (continued)
Once a lease is identified the initial value of the liability and right of use asset must be calculated. The lease liability consists of the present value of the lease payments that are not paid at the commencement date. Future lease payments are discounted using the interest rate implicit in the lease or, If that rate cannot be readily determined, the incremental borrowing rate. Variable lease payments that are tied to an external rate, such as the retail price index, are measured using the rate at the commencement date.
The right of use asset comprises the lease liability value plus any lease payments made at or before the commencement date, less any lease incentives received. Initial direct costs incurred and any restoration provisions required under the terms of the lease are also included in the asset value calculation.
Subsequently the lease liability balance is reduced to reflect any payments made in the period and increased as interest is accrued on the remaining balance. The right of use asset is depreciated in a straight line over the life of the lease agreement. The depreciation element is recognised within administrative expenses while the interest expense is recognised within finance costs.
If modifications to the terms of a lease result in a change to the expected future payments the lease liability is remeasured to reflect the discounted value of the revised payments. The change is recognised as an adjustment to the right of use asset. If the carrying amount of the asset is reduced to zero and there is a further reduction in the measurement of the lease liability, any remaining amount of the remeasurement is recognised in the income statement.
The following lease types are exempt from the lease model:
i) leases with a duration of twelve months or under;
ii) leases for which the underlying asset is of a low value
Payments relating to leases falling under either of these categories are recognised as an expense on a straight-line basis over the lease term.
IFRS 16 will be applied retrospectively to each prior reporting period presented. The impact of the first time adoption of this new standard is shown in Note 11.
Other than the above the accounting policies applied are consistent with those of the Annual Financial Statements for the year ended 31 July 2019, as described in those Annual Financial Statements.
Restatement of prior period balances
At the close of the previous financial year management applied a provision for impairment to the accrued income balance in accordance with IFRS 9. Under the transitional provisions in paragraphs 7.2.15 and 7.2.26 of the standard the opening Consolidated Statement of Financial Position also required restating.
The total provision at 1 August 2018 amounted to £136,000 and this amount was included in the restatement of opening balances. As the provision was made at the close of the year it had not been included in the restatements disclosed in the interim condensed consolidated financial statements for the previous financial year. As a result the comparative Consolidated Statement of Financial Position as at 31 January 2019 has been restated to reflect this change reducing trade and other receivables by £136,000, increasing deferred tax assets by £30,000 and decreasing retained earnings by £106,000.
Accounting estimates and judgements
The preparation of interim financial information requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amount of income, expense, assets and liabilities.
The Group is required to determine appropriate incremental borrowing rates to calculate the financing element of leases under IFRS 16. The estimated rates combined the base rates quoted to the Group by its principal banking providers and the LIBOR rates from the relevant geographies at the time of adoption.
Other than the above the significant estimates and judgements made by management were consistent with those applied to the consolidated financial statements for the year ended 31 July 2019.
3 SEGMENTAL ANALYSIS
The Board of Directors (which is the 'chief operating decision maker') primarily reviews information based on product lines, Custom Research, Data Products and Data Services, with supplemental geographical information.
Custom Research
Data Products
Data Services
Intra-group revenues / Central Costs
Group
£'000
£'000
£'000
£'000
£'000
For the six months to 31 January 2020 (Unaudited)
Revenue
Recognised over time
13,464
24,579
292
410
38,745
Recognised at a point in time
20,483
516
18,053
(868)
38,184
Total revenue
33,947
25,095
18,345
(458)
76,929
Cost of sales
(6,621)
(2,071)
(2,817)
(654)
(12,163)
Gross profit
27,326
23,024
15,528
(1,112)
64,766
Administrative expenses
(19,337)
(14,523)
(12,756)
(6,775)
(53,391)
Adjusted operating profit/(loss)
7,989
8,501
2,772
(7,887)
11,375
Separately reported items
(1,847)
Operating profit
9,528
Share of post-tax losses in associates
-
Finance income
172
Finance costs
(504)
Profit before taxation
9,196
Taxation
(2,901)
Profit after taxation
6,295
Other segment information
Depreciation and amortisation
404
238
-
6,628
7,270
3 SEGMENTAL ANALYSIS (continued)
Custom Research
Data Products
Data Services
Intra-group revenues / Central Costs
Group
£'000
£'000
£'000
£'000
£'000
For the six months to 31 January 2019 (restated) (Unaudited)
Revenue
Recognised over time
9,494
19,148
324
(187)
28,779
Recognised at a point in time
20,864
254
17,495
(848)
37,765
Total revenue
30,358
19,402
17,819
(1,035)
66,544
Cost of sales
(7,278)
(2,151)
(3,416)
914
(11,931)
Gross profit
23,080
17,251
14,403
(121)
54,613
Administrative expenses
(16,395)
(11,302)
(11,103)
(7,400)
(46,200)
Adjusted operating profit/(loss) (restated)
6,685
5,949
3,300
(7,521)
8,413
Exceptional items
34
Operating profit
8,447
Share of post-tax profits in associates
(37)
Finance income
234
Finance costs
(470)
Profit before taxation
8,174
Taxation
(2,522)
Profit after taxation
5,652
Other segment information
Depreciation and amortisation
99
62
-
6,134
6,295
Supplementary information by geography
Six months to 31 January 2020 (Unaudited)
Six months to 31 January 2019 (restated) (Unaudited)
Revenue
Adjusted operating profit/(loss)
Revenue
Adjusted operating profit/(loss)
£'000
£'000
£'000
£'000
UK
23,639
7,827
19,818
5,545
USA
32,090
9,266
27,190
7,715
Mainland Europe
11,667
902
12,080
1,638
Middle East
5,847
1,692
5,320
1,843
Asia Pacific
5,963
40
5,184
(90)
Intra-group revenues / Central Costs
(2,277)
(8,352)
(3,048)
(8,238)
Group
76,929
11,375
66,544
8,413
4 SEPARATELY REPORTED ITEMS
Unaudited
Unaudited
Audited
6 months to
6 months to
Year ended
31 January
31 January
31 July
2020
2019
2019
£'000
£'000
£'000
Acquisition related costs
1,847
1,998
382
Restructuring costs
-
63
146
Fair value gains on business combinations
-
(2,095)
(2,057)
Total separately reported items
1,847
(34)
(1,529)
Acquisition related costs in the period comprise £1,102,000 of contingent consideration treated as staff costs in respect of the acquisitions of SMG Insight Limited, Galaxy Research Pty Limited, InConversation Media Limited and Portent.io Limited and £745,000 of changes in the previously estimated consideration due and net assets acquired in respect of SMG Insight Limited.
Acquisition related costs in the prior period comprise £1,240,000 of contingent consideration treated as staff costs in respect of the acquisitions of Galaxy Research Pty Ltd, InConversation Media Limited and Portent.io Limited and £758,000 of transaction costs in respect of the Acquisitions of InConversation Media Limited, Portent.io Limited and the purchase of Crunch.io Inc's share of the Crunch software asset, £222,000 of which is contingent.
Restructuring costs in the prior period are residual costs relating to the restructuring of the Custom Research business in Germany and the closure of the Reports business.
Fair value gains in the prior period comprise of a £1,878,000 increase in the fair value assessment of the Group's 20% shareholding in SMG Insight Limited prior to acquisition and a bargain purchase gain of £285,000 less a fair value loss of £68,000 in respect of the acquisition of Portent.io Limited.
5 TAXATION
Unaudited
Unaudited
Audited
6 months to
6 months to
Year ended
31 January
31 January
31 July
2020
2019 (restated)
2019 (restated)
£'000
£'000
£'000
Current taxation charge
509
2,923
4,629
Deferred taxation (credit)/charge
2,392
(401)
457
Total income statement tax charge
2,901
2,522
5,086
The tax charge for the period has been calculated based on the expected tax rates for the full year in each country.
6 EARNINGS PER SHARE
Unaudited
Unaudited
Audited
6 months to
6 months to
Year ended
31 January
31 January
31 July
Number of shares
2020
2019 (restated)
2019 (restated)
Weighted average number of shares during the period ('000 shares):
- Basic
105,689
105,528
105,400
- Dilutive effect of options
6,856
7,884
7,865
- Diluted
112,545
113,412
113,265
Basic earnings per share (in pence)
6.2p
5.4p
14.1p
Adjusted basic earnings per share (in pence)
8.7p
6.4p
14.8p
Diluted earnings per share (in pence)
5.9p
5.0p
13.1p
Adjusted diluted earnings per share (in pence)
8.2p
6.0p
13.8p
The adjustments have the following effect:
Basic earnings per share
6.2p
5.4p
14.1p
Share based payments
0.9p
1.1p
2.3p
Imputed interest
0.1p
0.1p
0.2p
Separately reported items
1.7p
-
(1.5p)
Tax effect of the above adjustments and adjusting tax items
(0.2p)
(0.2p)
(0.3p)
Adjusted basic earnings per share
8.7p
6.4p
14.8p
Diluted earnings per share
5.9p
5.0p
13.1p
Share based payments
0.8p
1.0p
2.1p
Imputed interest
0.1p
0.1p
0.2p
Separately reported items
1.6p
-
(1.3p)
Tax effect of the above adjustments and adjusting tax items
(0.2p)
(0.1p)
(0.3p)
Adjusted diluted earnings per share
8.2p
6.0p
13.8p
7 DIVIDEND
On 16 December 2019 a final dividend in respect of the year ended 31 July 2019 of £4,298,000 (4.0p per share) (2019: £3,167,000 (3.0p per share)) was paid to shareholders. No interim dividend is proposed in respect of the period (2019: £nil).
8 GOODWILL, INTANGIBLE ASSETS, PROPERTY, PLANT AND EQUIPMENT AND RIGHT OF USE ASSETS
Goodwill
Other Intangible assets
Property, plant and equipment
Right of use assets
£'000
£'000
£'000
£'000
Carrying amount at 31 July 2018 (restated)
52,060
13,297
3,037
5,419
Additions:
Business combinations
10,801
2,498
5
-
Separately acquired
-
2,572
2,186
7,532
Internally developed
-
2,303
-
-
Amortisation and depreciation
-
(4,135)
(697)
(1,463)
Disposals
-
-
(5)
-
Foreign exchange differences
(343)
(10)
(1)
(32)
Carrying amount at 31 January 2019 (restated)
62,518
16,525
4,525
11,456
Additions:
Business combinations
387
-
-
-
Separately acquired
-
2,075
527
294
Internally developed
-
2,503
-
-
Amortisation and depreciation
-
(4,674)
(783)
(1,453)
Disposals
-
-
(1)
-
Foreign exchange differences
2,732
308
156
232
Carrying amount at 31 July 2019 (restated)
65,637
16,737
4,424
10,529
Additions:
Business combinations
-
-
-
-
Separately acquired
-
4,858
585
519
Internally developed
-
2,856
-
-
Amortisation and depreciation
-
(5,004)
(798)
(1,468)
Disposals
-
-
(10)
-
Foreign exchange differences
(2,047)
(401)
(166)
(281)
Carrying amount at 31 January 2020
63,590
19,046
4,035
9,299
In accordance with the Group's accounting policy, the carrying values of goodwill and other intangible assets are reviewed for impairment annually. A full impairment test is undertaken at each financial year end and a review for indicators of impairment is undertaken at the end of each interim period and an impairment test undertaken if required. The last full annual impairment review was undertaken as at 31 July 2019. There were no indications of impairment as at 31 January 2020.
8 GOODWILL, INTANGIBLE ASSETS, PROPERTY, PLANT AND EQUIPMENT AND RIGHT OF USE ASSETS (CONTINUED)
Other intangible assets are analysed as follows:
Consumer panel
Software and software develop-ment
Customer contracts and lists
Patents and trade-
marks
Develop-ment costs
Total
£'000
£'000
£'000
£'000
£'000
£'000
Carrying amount at 31 July 2018
4,474
6,032
2,471
272
48
13,297
Additions:
Business combinations
10
2,488
-
-
-
2,498
Separately acquired
2,168
376
-
28
-
2,572
Internally developed
-
2,303
-
-
-
2,303
Total additions
2,178
5,167
-
28
-
7,373
Amortisation:
Business combinations
(1)
(373)
(294)
-
-
(668)
Separately acquired
(1,519)
(507)
-
(3)
-
(2,029)
Internally developed
-
(1,438)
-
-
-
(1,438)
Total Amortisation
(1,520)
(2,318)
(294)
(3)
-
(4,135)
Foreign exchange differences
(23)
13
(1)
1
-
(10)
Carrying amount at 31 January 2019
5,109
8,894
2,176
298
48
16,525
Additions:
Business combinations
-
-
-
-
-
-
Separately acquired
1,784
291
-
-
-
2,075
Internally developed
-
2,503
-
-
-
2,503
Total additions
1,784
2,794
-
-
-
4,578
Amortisation:
Business combinations
(2)
286
(289)
-
-
(5)
Separately acquired
(1,707)
197
-
(8)
-
(1,518)
Internally developed
-
(3,151)
-
-
-
(3,151)
Total Amortisation
(1,709)
(2,668)
(289)
(8)
-
(4,674)
Reclassification
-
48
-
-
(48)
-
Foreign exchange differences
268
(1)
38
3
-
308
Carrying amount at 31 July 2019
5,452
9,067
1,925
293
-
16,737
Additions:
Separately acquired
4,195
644
-
19
-
4,858
Internally developed
-
2,856
-
-
-
2,856
Total additions
4,195
3,500
-
19
-
7,714
Amortisation:
Business combinations
-
(413)
(274)
-
-
(687)
Separately acquired
(1,876)
(248)
-
(2)
-
(2,126)
Internally developed
-
(2,191)
-
-
-
(2,191)
Total Amortisation
(1,876)
(2,852)
(274)
(2)
-
(5,004)
Foreign exchange differences
(353)
-
(52)
4
-
(401)
Carrying amount at 31 January 2020
7,418
9,715
1,599
314
-
19,046
9 SHARE CAPITAL
Share
Number of
capital
shares
£'000
At 31 January 2019
105,587,220
211
Issue of shares
122,783
-
At 31 July 2019
105,710,003
211
Issue of shares
2,687,221
6
At 31 January 2020
108,397,224
217
The company has only one class of share. The par value of each share is 0.2p. All issued shares are fully paid. Shares issued in the year were in respect of the exercise of 2,687,221 share options at 0.2p per share. A total of 415,000 shares were repurchased for the purposes of settling share option schemes as they vest.
10 FAIR VALUES OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES
Where market values are not available, fair values of financial assets and financial liabilities have been calculated by discounting expected future cash flows at prevailing interest rates and by applying year end foreign exchange rates.
Primary financial instruments held or issued to finance the Group's operations:
31 January 2020
Unaudited
31 January 2019 (restated)
Unaudited
Book value
Fair value
Book value
Fair value
£'000
£'000
£'000
£'000
Trade and other receivables
27,987
27,987
30,476
30,476
Cash and cash equivalents
27,168
27,168
24,953
24,953
Trade and other payables
(37,760)
(37,760)
(50,066)
(50,066)
Fair value estimation
The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined as follows:
· Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1).
· Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (Level 2).
· Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (Level 3).
31 January 2020
Unaudited
31 January 2019
Unaudited
Liabilities
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
£'000
£'000
£'000
£'000
£'000
£'000
£'000
£'000
Contingent consideration
-
-
3,952
3,952
-
-
16,018
16,018
10 FAIR VALUES OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES (CONTINUED)
The following table presents the changes in Level 3 instruments.
Unaudited
Unaudited
6 months to
6 months to
31 January
31 January
Contingent consideration
2020
2019
£'000
£'000
Balance at 1 August
10,070
6,519
Provided consideration on business combination
-
7,958
Recognised in the income statement within separately reported items
1,346
1,462
Recognised in the income statement within finance costs
40
77
Settled during the period
(7,448)
-
Foreign exchange differences
(56)
2
Balance at 31 January
3,952
16,018
11 IMPACT OF NEW ACCOUNTING STANDARDS
This note explains the impact of the adoption of IFRS 16, 'Leases' on the Group's financial statements.
IFRS 16 replaces IAS 17 and is applicable to all reporting periods beginning on or after 01 January 2019. The standard provides a single lessee accounting model, requiring lessees to recognise right-of-use assets and liabilities for all leases, with some exemptions for short term leases and leases considered low-value, £741,000 (2019: £462,000) of rental expense has been recognised in the period in respect of these exempted leases. IFRS 16 applies only to tangible assets.
Impact on the financial statements
The adoption of IFRS 16 from 1 August 2019 resulted in changes in accounting policies and adjustments to the amounts recognised in the financial statements. The impact of the change in lease accounting on the group's Consolidated Income Statement and Consolidated Statement of Financial Position for the comparative financial year and half-year is disclosed in the tables below. Line items that were not affected by the changes have not been included. The impact on deferred taxation has not been calculated as it is not considered material.
Unaudited
Unaudited
6 months to
6 months to
31 January
31 January
2019
Impact of
2019
Reported
IFRS 16
Restated
£'000
£'000
£'000
Operating profit items
Depreciation expense
698
1,462
2,160
Other operating expenses
45,537
(1,531)
44,006
Total operating expenses
46,235
(69)
46,166
Other Income Statement items
Finance costs
311
159
470
11 IMPACT OF NEW ACCOUNTING STANDARDS (CONTINUED)
Audited
Unaudited
Year to
Year to
31 July
31 July
2019
Impact of
2019
Reported
IFRS 16
Restated
£'000
£'000
£'000
Operating profit items
Depreciation expense
1,481
2,915
4,396
Other operating expenses
90,983
(3,119)
87,864
Total operating expenses
92,464
(204)
92,260
Other Income Statement items
Finance costs
564
304
868
Unaudited
Unaudited
31 January
31 January
2019
Impact of
2019
Reported
IFRS 16
Restated
£'000
£'000
£'000
Consolidated Statement of Financial Position items
Right of use assets
-
11,456
11,456
Lease liabilities due within one year
-
2,925
2,925
Lease liabilities due after one year
-
9,053
9,053
Foreign exchange reserve
13,884
(49)
13,835
Retained earnings
39,033
(473)
38,560
Audited
Audited
31 July
31 July
2019
Impact of
2019
Reported
IFRS 16
Restated
£'000
£'000
£'000
Consolidated Statement of Financial Position items
Right of use assets
-
10,529
10,529
Lease liabilities due within one year
-
2,891
2,891
Lease liabilities due after one year
-
8,217
8,217
Foreign exchange reserve
20,018
(97)
19,921
Retained earnings
51,507
(484)
51,023
11 IMPACT OF NEW ACCOUNTING STANDARDS (CONTINUED)
The impact on the opening Consolidated Statement of Financial Position as of 1 August 2018 is disclosed in the table below. Line items that were not affected by the changes have not been included.
1 August
1 August
2018
Impact of
2018
Reported
IFRS 16
Restated
£'000
£'000
£'000
Statement of Financial Position items
Right of use assets
-
5,419
5,419
Lease liabilities due within one year
-
2,151
2,151
Lease liabilities due after one year
-
3,651
3,651
Retained earnings
91,330
(383)
90,947
12 TRANSACTIONS WITH DIRECTORS AND OTHER RELATED PARTIES
Other than emoluments, there were no other transactions with Directors during the period. Trading between YouGov plc and group companies is excluded from the related party note as this has been eliminated on consolidation.
13 EVENTS AFTER THE REPORTING PERIOD
The extent of the COVID-19 pandemic only became apparent after the balance sheet date and represents a non-adjusting post-balance sheet event.
To date, we have not yet seen any material impact to our business from the COVID-19 pandemic. Notwithstanding the current macro-economic situation, our pipeline of sales opportunities for our syndicated Data Products remains strong, with more opportunities for growth in Custom Research. We are seeing a small minority of existing clients requesting payment deferrals or cancellations which we are handling on a case-by-case basis. We continue to review for any impact on valuations of goodwill, intangibles and other assets but there is no basis as of yet for any impairment.
At the present time all 38 YouGov offices are closed with our entire global workforce working from home. YouGov has a long-established culture of remote and flexible working; consequently, we are well-positioned to maintain continuity of service during this period and our clients continue to receive business as usual service.
Given the unprecedented nature of the pandemic it is difficult to estimate its impact on our clients and their financial stability going forward. Therefore, we consider it prudent to anticipate that this situation could cause clients to delay projects, default or request longer payment terms, as well as a slowdown in some business wins. We continue to closely monitor this fluid situation and its potential impact on our pipeline over the coming months and into our next financial year which commences on 1 August 2020.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.ENDIR MZGZDRMLGGZM
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