REG - YouGov PLC - Results for the six months to 31 January 2023
21/03/2023 07:00
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RNS Number : 5973T YouGov PLC 21 March 2023
21 March 2023
YouGov plc
("YouGov" or the "Group")
Results for the six months to 31 January 2023
- Strong H1 performance with continued growth momentum against a difficult
macro environment
- Significant margin improvement despite ongoing investment in technology
and international reach
- Continued confidence in achieving FY23 market expectations
YouGov, the international research and data analytics group, announces its
results for the six months ended 31 January 2023.
Summary of Results
Unaudited Unaudited Change Underlying
six months to six months to % Change¹
31 January 2023 31 January 2022 %
£m £m
Revenue 131.4 101.2 30% 13%
Adjusted Operating Profit(2) 22.1 14.0 58% 32%
Adjusted Operating Profit Margin (%)(2) 17% 14% 300bps -
Statutory Operating Profit 20.4 10.8 89% -
Adjusted Profit before Tax(2) 26.5 15.4 72% 49%
Statutory Profit before Tax 21.0 9.2 128% -
Adjusted Earnings per Share(2) 19.2p 10.6p 81% 50%
Statutory Basic Earnings per Share 14.7p 5.7p 158% -
1. Defined as growth in business excluding impact of current and prior period
acquisitions and movement in exchange rates.
2. Defined in the explanation of non-IFRS measures below.
Financial highlights
· Revenue growth of 30% (HY22: 28%) to £131.4m, with underlying¹ business
growth of 13%, reflecting continued growth well ahead of the industry.
· Adjusted operating profit2 up by 58% (HY22: 33%) to £22.1m, with underlying¹
business growth of 32%, as business efficiencies and operational leverage
benefits continue to come through.
· Adjusted operating profit margin2 up 300 basis points (bps) to 17%, strong
margin expansion despite continued investment in the business for future
growth.
· Statutory operating profit up by 89% £20.4m (HY22: £10.8m).
· Adjusted earnings per share2 up by 81% to 19.2p (HY22: 10.6p).
· Robust balance sheet position maintained with net cash at period end of
£41.4m (31 January 2022: £20.1m).
Operational highlights
· Continued sales growth in panel-based Custom Research with increasing
opportunities for multi-year contracts and trackers, building on the strong
momentum seen in H2 2022.
· High-quality data products remain embedded across clients' workflows resulting
in increased customer stickiness and retention.
o Data Products revenue increased by 9% on an underlying¹ basis (20% on a
reported basis) to £41.9m, driven by strong subscription renewal rates.
o Data Services revenue decreased by 9% on an underlying¹ basis (3%
decline on a reported basis) to £23.0m as general market softness continued
to delay some clients' more discretionary spending.
o Custom Research revenue increased by 28% on an underlying¹ basis (55%
on a reported basis) to £65.3m, driven by continued sales momentum globally,
as clients prioritise strategic research projects, resulting in the expansion
of several client relationships.
· Broad-based growth across all geographic segments, with the US remaining the
key growth driver with large market opportunities continuing to accelerate in
important sectors.
o Demand in the UK has picked up despite recessionary market conditions,
while Mainland Europe posted a weaker performance due to lower tactical PR
activity impacting Data Services.
· Investments made during the period to meet client demand and further
strengthen our technological capabilities included:
o Technology: Continued investment of £4.4m (HY22: £3.7m) in technologies
to drive long term growth, including the development of our self-serve tool,
YouGov Surveys.
o Panel: Ongoing investment of £4.8m (HY22: £4.4m) in the build-out of our
panel and allocation of resources to high growth areas such as the US and
Europe, to meet demand for customised research.
o Centres of Excellence (CenX): Remain operationally integral to our
platform strategy as we increase the number of functions with representation
in a CenX.
Current trading and outlook
· Driven by continued investment in our technological capabilities and our
international reach, the Group's sales pipeline remains healthy and continues
to provide good visibility as we go into the second half of the financial
year.
· While the Group has seen some slower client decision making on more
discretionary spend, we continue to see large strategic opportunities in key
markets and have not experienced any other material changes in client
behaviour to date.
· We remain disciplined in our investment approach and will continue to optimise
our cost base to ensure we are poised for further margin improvement.
· Capital expenditures, which are aimed at positioning the business for further
growth in the next strategic growth plan (SP3), are expected to be maintained
at a similar level to the prior year.
· While the overall weakness in macro sentiment may impact the speed and level
of some client spending, our strong performance in the first half gives us
confidence in maintaining the current sales momentum to end the financial year
in line with current market expectations(3).
Board Succession Planning
· In line with the previously disclosed Board succession plan, Roger Parry will
be standing down from the role of Non-Executive Chair. Stephan Shakespeare
will assume the role of Non-Executive Chair, upon a new CEO commencing in
post, currently anticipated to be on 1 August 2023, subject to the outcome of
the CEO search process. The Board's Nomination Committee is considering a wide
variety of both external and internal candidates as part of an international
search process. A further update will be provided in due course.
· On 23 February 2023, the Group announced the appointment of Shalini Govil-Pai
and Devesh Mishra as Non-Executive Directors. Shalini Govil-Pai has over 25
years' experience in the consumer technology space, particularly in the US,
while Devesh Mishra brings over 25 years of global operating leadership
experience across technology, product, and business operations. The addition
of our two new Non-Executive Directors in Shalini and Devesh, ensures a
majority of independent members on the Board following the Chair transition.
Stephan Shakespeare, Chief Executive Officer, said:
"YouGov delivered a strong performance in the first half of our financial
year, against a difficult macro environment. In line with our strategy,
top-line growth momentum has continued across all geographic segments, and we
achieved significant margin expansion and good cash generation during the
period.
Our demand environment remains robust with increasingly sticky, long-term
relationships with existing customers, and growing opportunities for
multi-year contracts and trackers with new customers. This sales momentum has
continued into the second half of the year, giving us confidence that YouGov
can achieve top-line growth for the full year in line with current market
expectations.(3)
As we approach the final stretch of our current long-term strategic growth
plan, I am more confident than ever that we are investing in the right areas
to realise the full potential of our business. We look forward to showcasing
the results of our efforts alongside our plans for SP3 at our upcoming Capital
Markets Day."
3. Based upon the average of 6 analyst estimates, the Company-compiled
consensus estimate for FY23 Group revenue is £265 million.
Analyst presentation
A copy of the presentation will be available online at
https://corporate.yougov.com/investors/presentations/
(https://corporate.yougov.com/investors/presentations/) shortly after the
half-year results announcement is live on the Regulatory News Service (RNS).
Capital Markets Day
The Company will host a Capital Markets Day for institutional investors and
analysts in London on Wednesday 17th May 2023 where we will present the next
strategic growth plan and our continued evolution into a leading market
research platform. The day will be hosted by CEO Stephan Shakespeare, CFO Alex
McIntosh, and COO Sundip Chahal and will include presentations from leaders
within the Group.
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 020 7012 6000
Stephan Shakespeare / Alex McIntosh / Hannah Jethwani
FTI Consulting 020 3727 1000
Charles Palmer / Tom Blundell / Jemima Gurney
Numis Securities Limited (NOMAD and Joint broker) 020 7260 1000
Nick Westlake / Iqra Amin
Berenberg (Joint Broker) 020 3207 7800
Mark Whitmore / Richard Andrews / Alix Mecklenburg-Solodkoff
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
24+ 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
second most quoted market research source in the world.
YouGov. Living Consumer Intelligence.
For further information, visit business.yougov.com
Chief Executive Officer's Review
YouGov has delivered another strong performance in the first half of the
current financial year as demand for our products and services remains robust.
While the overall macro environment remains uncertain, the Group has continued
to demonstrate the value of its data to clients thereby maintaining strong
renewal rates and expanding several key relationships. Following a concerted
focus on limiting cost growth, the Group has seen significant improvement in
its operating profit margin in the period, while investing in areas that will
drive future growth.
Factors contributing to our positive performance in the period include:
· Key geographies: Solid performance was seen in the US, particularly in
Custom Research, and recovery in the UK as overall market sentiment has
improved.
· New products: Initial contribution from early-stage products, YouGov
Safe and FreeWall®, that are gaining encouraging traction with clients.
· Operational leverage: Investments in recent years to expand our sales
teams, central functions and CenX operations are beginning to deliver margin
benefits as our top-line expands.
Delivering on our strategic priorities
Based on our strategy, we have previously identified five key priorities that
will be a focus in the near term. The key progress made under each of these
priorities over the first half of the financial year has been set out below.
Product development and technology
· Launched YouGov Surveys, our self-serve tool allowing users to build surveys
with granular targeting capabilities.
· Continued the development of the YouGov Platform with the launch of free
audience and brand data tools that enable individuals and businesses to
experience the power of YouGov's data.
Panel
· Growth in our global research panel of 20% to 24 million registered members,
while lowering global cost per acquisition through diversification and
optimisation of our acquisition channels, including the use of YouGov Chat to
recruit hard-to-reach groups.
· Utilised our latest technology acquisition, YouGov FreeWall®, to expand our
panel reach through publisher networks to deliver targeted digital campaigns.
Global accounts
· Increased share of wallet with several key clients globally, particularly in
the technology and gaming sectors in the US, through panel-based Custom
Research projects.
· Achieved strong renewal rates for our subscription products in an increasingly
uncertain macro environment.
Global infrastructure
· Continued to expand the role played by our CenX and improve the efficiency
with which we deliver our services, through the creation of client service and
survey management teams in India.
· Ongoing build out of staff in our newest CenX in Mexico City to ensure the US
research business is well supported through the addition of sales and client
service capabilities over the coming months.
Acquisitions
· Collaboration with the LINK team on social research and financial services
clients yielding good results and initial sales of syndicated data products
recorded.
· Rezonance's FreeWall® product is effectively supplementing the Group's
ongoing panel recruitment efforts.
Strategic growth plan
We are in the final stage of our current long-term strategic growth plan
("FYP2") and continue to make progress in its execution. As previously
announced, the ambitious long-term incentive plan ("LTIP") performance targets
accompanying FYP2 to incentivise senior management over the plan period
(FY19-FY23) are:
· double Group revenue;
· double Group adjusted operating profit margin(1); and
· achieve an adjusted earnings per share(1) compound annual growth rate in
excess of 30%.
1 Defined in the explanation of non-IFRS measures below.
With the substantial investments in our panels and support functions now
largely complete, we are beginning to reap the benefits of operational
leverage as the business scales, as demonstrated by the margin expansion in
the first half of the year. We have sustained the investment in our
technological platforms to ensure we continue to innovate, improve the
panellist experience and further the development of the YouGov Platform.
We remain committed to driving top-line growth in the medium-term, with a
continued focus on improving our profitability margin. Looking ahead, we
believe there is substantial headroom for growth in our existing business
lines and further upside potential stemming from our evolution into a platform
company. As we navigate the current macro environment, we are reassured by the
stickiness of our client base and the strong, long-term relationships we have
built that will continue to drive the business forward.
Current trading and outlook
· Driven by continued investment in our technological capabilities and
our international reach, the Group's sales pipeline remains healthy and
continues to provide good visibility as we go into the second half of the
financial year.
· While the Group has seen some slower client decision making on more
discretionary spend, we continue to see large strategic opportunities in key
markets and have not experienced any other material changes in client
behaviour to date.
· We remain disciplined in our investment approach and will continue to
optimise our cost base to ensure we are poised for further margin improvement.
· Capital expenditures, which are aimed at positioning the business for
further growth in the next strategic growth plan (SP3), are expected to be
maintained at a similar level to the prior year.
· While the overall weakness in macro sentiment may impact the speed and
level of some client spending, our strong performance in the first half gives
us confidence in maintaining the current sales momentum to end the financial
year in line with current market expectations(2).
2. Based upon the average of 6 analyst estimates, the Company-compiled
consensus estimate for FY23 Group revenue is £265 million.
Stephan Shakespeare
Chief Executive Officer
21 March 2023
Chief Financial Officer's Review
The Group has delivered a strong performance in the six months to 31 January
2023 as we continue to deliver sustainable, profitable growth.
Total Group revenue rose 30% to £131.4m in the period, compared to £101.2m
in the six months to 31 January 2022, with continued growth across all
geographic segments and on the back of currency tailwinds, primarily the US
Dollar.
Underlying(1) revenue growth (excluding foreign exchange movements and
contribution from acquisitions) was 13% over the prior year period.
The diversity in our client base and the strategic value of our data to key
clients has enabled us to deliver a good performance in the context of
volatile trading conditions.
Gross margins increased by 30 basis points (bps) to 84.8% as a higher
proportion of sales was derived from panel-based custom research projects.
Group operating costs (excluding separately reported items) of £89.4m (HY22:
£71.5m) increased by 25% in reported terms, and 18% in constant currency
terms. Group adjusted operating profit (excluding separately reported items)
increased to £22.1m (a 58% increase from £14.0m in HY22). Underlying(1)
operating profit increased by 32%, when excluding the impact of acquisitions
and FX, on the back of tighter cost control, benefits of operational leverage
and lower growth in amortisation of intangibles. Adjusted operating margins
increased 300 basis points from 13.8% to 16.8%.
The statutory operating profit (which is after charging other separately
reported items of £1.7m) increased by 89% to £20.4m (HY22: £10.8m).
Performance by Division
Data Products
Our syndicated data products suite includes YouGov BrandIndex and YouGov
Profiles as well as newer sector specific offerings and our latest
cross-device tracker, YouGov Safe.
Our Data Products division saw slower growth in the period, despite healthy
renewal rates, due to fewer new subscription sales. This was in part due to
greater focus from our commercial teams on custom projects, which limited the
sale of new subscriptions. Revenue from Data Products increased by 20% in
reported terms (9% growth in underlying terms) in the period. The adjusted
operating profit from Data Products increased by 60% to £17.8m and the
operating margin increased to 42%. This significant increase in margins can
be attributed to inherent operational leverage benefits of syndicated products
and higher cost allocations to the Custom Research division.
Geographically, the US remains the largest Data Products market and grew by
10% in the period on an underlying basis. The UK delivered 15% growth for the
period on the back of strong demand from the technology and media sector.
Data Services
Our Data Services division consists of our fast-turnaround research services,
including our market-leading YouGov RealTime Omnibus.
In the period, revenue from Data Services declined by 3% in reported terms and
by 9% in underlying terms to £23.0m. This was mainly driven by a sharp
decline in Mainland Europe due to several factors including lower tactical PR
activity in light of geopolitical instability in the region, phasing of
projects into H2 and some reclassification of work to the Custom Research
division. Additionally, the division saw low single-digit growth in the period
in the UK and continued to see flat performance in the US.
This division's profitability recorded a 26% decrease to £3.2m (HY22: £4.3m)
and the operating margin contracted from 18% to 14% due to the division's weak
performance.
Custom Research
Our Custom Research division includes tailored research projects and tracking
studies.
During the period, the division's revenue increased by 55% in reported terms,
including contribution from the LINK acquisition in December 2021, while
growth in underlying terms was 28% to £65.3m. This significant acceleration
in the division was largely driven by the US, as our commercial teams
demonstrated the benefits of our global panel coverage, high-quality data and
innovative tools to help expand several client relationships. New clients wins
in Mainland Europe and work around the US mid-term elections have also
contributed to this strong performance.
This strong performance, greater focus on margin-enhancing projects and
increased efficiencies through the use of CenX has resulted in the division's
adjusted operating profit increasing to £14.2m (HY22: £8.0m) representing
an operating margin of 22% (HY22: 19%).
Revenue Six months to Six months to Revenue growth Underlying(1) revenue change %
31 Jan 2023 31 Jan 2022 %
£m £m
Data Products 41.9 34.8 20% 9%
Data Services 23.0 23.7 (3%) (9%)
Custom Research 65.3 42.0 55% 28%
Central Items 1.2 0.7 71% -
Group 131.4 101.2 30% 13%
Adjusted Operating Profit(1) Six months to Six months to Operating Operating Margin
31 Jan 2023 31 Jan 2022 Profit growth
£m £m %
Six months to Six months to
31 Jan 2023 31 Jan 2022
Data Products 17.8 11.1 60% 42% 32%
Data Services 3.2 4.3 (26%) 14% 18%
Custom Research 14.2 8.0 78% 22% 19%
Central Costs (13.1) (9.4) 39% - -
Group 22.1 14.0 58% 17% 14%
Performance by Geography
Revenue Six months Six months Revenue Underlying(1)
to to growth revenue
31 Jan 2023 31 Jan 2022 % change %
£m £m
UK 31.4 26.7 18% 18%
Americas 64.0 46.1 39% 18%
Mainland Europe 28.3 20.0 41% 3%
Middle East 4.4 2.8 59% 38%
Asia Pacific 11.0 9.3 19% 11%
Central Items (7.7) (3.7) 109% 60%
Group 131.4 101.2 30% 13%
Adjusted Operating Profit(1) Six months to Six months to Operating Operating Margin
31 Jan 2023 31 Jan 2022 Profit growth
£m £m %
Six months to Six months to
31 Jan 2023 31 Jan 2022
UK 6.6 6.9 (4%) 21% 26%
USA 21.7 16.0 36% 34% 35%
Mainland Europe 1.4 2.6 (46%) 5% 13%
Middle East 1.3 0.5 160% 30% 18%
Asia Pacific 1.0 0.5 100% 9% 6%
Central Costs (9.9) (12.5) (21%) - -
Group 22.1 14.0 58% 17% 14%
1 Defined in the explanation of non-IFRS measures below.
Panel Development
We continue to invest in our online panel to increase our research
capabilities, both in our newer geographies and in the US on the back of
strong client demand. At 31 January 2023, the total number of registered
panellists had increased by 20% to over 24 million, compared to 20 million at
31 January 2022, as set out in the table below.
Region Panel size at Panel size at
31 January 2023 31 January 2022
millions millions
UK 2.79 2.55
Americas 8.76 7.20
Mainland Europe 5.36 4.31
MENA and India 2.92 2.53
Asia Pacific 4.18 3.36
Total 24.01 19.95
Group financial performance
Amortisation of intangible assets and central costs
Amortisation charges for intangible assets totalled £10.8m in the period
(HY22: £9.4m) of which £5.4m (HY22: £4.8m) relates to the consumer panel
and £4.6m (HY22: £4.2m) to our software and technology development
activities. Growth in amortisation of intangibles has slowed versus the prior
year following the completion of the build out of new panel markets.
Central costs, which include support functions and contribution from incubator
projects, have increased to £13.1m (HY22: £9.4m).
Separately reported items
Acquisition related costs in the period comprise £1.5m of contingent
consideration treated as staff costs in respect of the acquisitions of
Charlton Insights Inc, Faster Horses Pty Limited and YouGov Finance Limited
(renamed from Lean App Limited) and £0.2m of bonus-related costs in respect
of LINK Marketing Services AG (LINK).
Profit before tax and earnings per share
Adjusted profit before tax was £26.5m, increasing by 72% compared to £15.4m
in HY22, largely in line with the increase in adjusted operating profit. The
adjusted tax rate decreased from 23.5% in HY22 to 21.0%. Statutory profit
before tax increased to £21.0m compared to £9.2m in the six months ended 31
January 2022.
During the period adjusted earnings per share has increased by 81% from 10.6p
to 19.2p, driven by the growth in the business, and statutory earnings per
share has more than doubled from 5.7p to 14.7p.
Technology investment and global expansion
The Group invested £4.4m (HY22: £3.7m) in the continuing advancement of our
technology platform while investment in panel recruitment amounted to £4.8m
(HY22: £4.4m) as spend has normalised following our new panel markets
expansion in 2021. £0.6m (HY22: £0.6m) was spent on the purchase of
property, plant and equipment. Other cash outflows included £5.6m spent on
purchase of treasury shares, taxation payments of £1.6m (HY22: £2.8m) and
the annual shareholder dividend payment of £7.7m (HY22: £6.7m) in December
2022.
The Group is expecting £9.6m of deferred consideration payable in respect of
future earn-outs related to acquisitions, of which £6.6m is expected to be
paid in the next twelve months.
There was a net cash inflow of £4.7m in the period, compared to an inflow of
£6.0m in the six months to 31 January 2022. Net cash balance of £41.4m was
higher than at 31 January 2022 (£20.1m). No exposure or affiliation with
Silicon Valley Bank or its UK subsidiary.
Currency
The Group's results were affected by the net depreciation of £ Sterling as
its average exchange rate was 13% lower against the USD in this period than in
the six months to 31 January 2022. Also, the £ Sterling was 2% lower against
the EUR in this period than in the six months to 31 January 2022. The net
impact of foreign exchange on the Group's adjusted operating profit(1) was an
increase of £3.2m compared to calculation in constant currency terms.
Alex McIntosh
Chief Financial Officer
21 March 2023
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
Underlying growth Growth in business excluding impact of current and prior period acquisitions Provides a more comparable basis to assess the year-to-year operational
and business closures, and movement in exchange rates (i.e. current year business performance and is how our performance is reviewed internally
performance calculated with exchange rates held constant at prior year rates).
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
Adjusted operating profit Operating profit excluding separately reported items
Adjusted operating profit margin Adjusted operating profit expressed as a percentage of revenue
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 Provides a more comparable basis to assess the underlying tax rate
separately reported 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 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
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 Profit(1) Six months Six months % Change
to to
31 Jan 2023 31 Jan 2022
£m £m
Statutory operating profit 20.4 10.8 89%
Separately reported items 1.7 3.2 (47%)
Adjusted operating profit(1) 22.1 14.0 58%
Adjusted Profit Before Tax(1) Six months Six months % Change
to to
31 Jan 2023 31 Jan 2022
£m £m
Statutory profit before tax 21.0 9.2 128%
Separately reported items 1.7 3.2 (47%)
Share based payments 3.8 3.0 27%
Adjusted profit before tax(1) 26.5 15.4 72%
1 Defined in the explanation of non-IFRS measures above.
YOUGOV PLC
STATEMENT OF DIRECTORS' RESPONSIBILITIES
For the six months ended 31 January 2023
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 and Senior Independent
Director
· Andrea Newman - Non-Executive Director
· Ashley Martin - Non-Executive Director
· Nick Prettejohn - Non-Executive Director
· Shalini Govil-Pai - Non-Executive Director(1)
· Devesh Mishra - Non-Executive Director(1)
· 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
21 March 2023
1 Appointed on 23 February 2023 with effect from 27 February 2023, after the
end of the interim reporting period for the six months ended 31 January 2023
YOUGOV PLC
CONSOLIDATED INCOME STATEMENT
For the six months ended 31 January 2023
Unaudited Unaudited Audited
6 months to 6 months to Year ended
31 January 31 January 31 July
2023 2022 2022
Note £m £m £m
Revenue 3 131.4 101.2 221.1
Cost of sales (19.9) (15.7) (33.7)
Gross profit 111.5 85.5 187.4
Administrative expenses (91.1) (74.7) (157.4)
Operating profit 20.4 10.8 30.0
Separately reported items 4 1.7 3.2 6.3
Adjusted operating profit(1) 3 22.1 14.0 36.3
Finance income 0.9 - -
Finance costs (0.3) (1.6) (4.7)
Profit before taxation 21.0 9.2 25.3
Taxation 5 (5.0) (2.9) (7.8)
Profit after taxation 16.0 6.3 17.5
Attributable to:
- Owners of the parent 16.1 6.4 17.1
- Non-controlling interests (0.1) (0.1) 0.4
16.0 6.3 17.5
Earnings per share
Basic earnings per share attributable to the owners of the parent 6 5.7p 15.7p
14.7p
Diluted earnings per share attributable to the owners of the parent 6 5.6p 15.4p
14.4p
1 Defined in the explanation of non-IFRS measures.
All operations are continuing.
YOUGOV PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six months ended 31 January 2023
Unaudited Unaudited Audited
6 months to 6 months to Year ended
31 January 31 January 31 July
2023 2022 2022
£m £m £m
Profit for the period 16.0 6.3 17.5
Other comprehensive income/(expense)
Items that will not be reclassified to profit or loss
Actuarial gains 0.2 - 1.2
Items that may be subsequently reclassified to profit or loss
Currency translation differences 0.3 1.0 7.0
Other comprehensive income for the year 0.5 1.0 8.2
Total comprehensive income for the period 16.5 7.3 25.7
Attributable to:
- Owners of the parent 16.6 7.4 25.3
- Non-controlling interests (0.1) (0.1) 0.4
Total comprehensive income for the period 16.5 7.3 25.7
Items in the statement above are disclosed net of tax.
YOUGOV PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Unaudited Unaudited Audited
31 January 2023 31 January 2022 31 July
2022
Assets Note £m £m £m
Non-current assets
Goodwill 8 83.7 75.1 80.4
Other intangible assets 8 33.7 41.4 38.0
Property, plant and equipment 8 4.0 4.0 4.2
Right of use assets 8 10.4 12.4 11.3
Deferred tax assets 11.9 9.1 11.3
Total non-current assets 143.7 142.0 145.2
Current assets
Trade and other receivables 58.1 39.0 53.7
Current tax assets - 5.7 4.1
Cash and cash equivalents 41.4 40.9 37.4
Total current assets 99.5 85.6 95.2
Total assets 243.2 227.6 240.4
Liabilities
Current liabilities
Trade and other payables 61.9 48.6 66.8
Contingent consideration 6.6 2.4 6.1
Provisions 11.7 9.7 11.2
Short term borrowings - 0.8 -
Current lease liabilities 2.8 3.5 2.9
Current tax liabilities 5.3 4.9 3.5
Total current liabilities 88.3 69.9 90.5
Net current assets 11.2 15.7 4.7
Non-current liabilities
Contingent consideration 3.0 3.1 2.4
Provisions 6.7 5.8 6.7
Pension net defined benefit liability 2.0 2.9 2.0
Long term borrowings - 20.0 -
Long term lease liabilities 8.6 10.0 9.3
Deferred tax liabilities 3.4 0.7 4.5
Total non-current liabilities 23.7 42.5 24.9
Total liabilities 112.0 112.4 115.4
Net assets 131.2 115.2 125.0
Equity
Issued share capital 9 0.2 0.2 0.2
Share premium 31.5 31.5 31.5
Merger reserve 9.2 9.2 9.2
Treasury reserve (15.2) (0.8) (9.6)
Foreign exchange reserve 14.9 8.6 14.6
Retained earnings 91.0 67.3 79.4
Total equity attributable to owners of the parent 131.6 116.0 125.3
Non-controlling interests in equity (0.4) (0.8) (0.3)
Total equity 131.2 115.2 125.0
YOUGOV PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months ended 31 January 2023
Attributable to equity holders of the Company
Share Share premium Merger reserve Treasury Foreign Retained earnings Total Non-controlling interest Total
capital
£m
£m
exchange reserve
£m
£m
£m
£m
£m share reserve
£m
£m
Balance at 1 August 2021 0.2 31.5 9.2 (2.3) 7.6 66.5 112.7 (0.7) 112.0
Period to 31 January 2022
Exchange differences on translating foreign operations - - - - 1.0 - 1.0 - 1.0
Net gain recognised directly in equity - - - - 1.0 - 1.0 - 1.0
Profit for the period - - - - - 6.4 6.4 (0.1) 6.3
Total comprehensive income for the period - - - - 1.0 6.4 7.4 (0.1) 7.3
Dividends paid - - - - - (6.7) (6.7) - (6.7)
Issue of shares - - - - - - - - -
Share-based payments - - - - - 2.8 2.8 - 2.8
Treasury shares used to settle share option exercises - - - 1.5 - (1.5) - - -
Tax in relation to share-based payments (0.2) (0.2) - (0.2)
Acquisition of treasury shares - - - - - - - - -
Total transactions with owners recognised directly in equity - - - 1.5 - (5.6) (4.1) - (4.1)
Balance at 31 January 2022 0.2 31.5 9.2 (0.8) 8.6 67.3 116.0 (0.8) 115.2
Period to 31 July 2022
Actuarial gains - - - - - 1.2 1.2 - 1.2
Exchange differences on translating foreign operations - - - - 6.0 - 6.0 - 6.0
Net income recognised directly in equity - - - - 6.0 1.2 7.2 - 7.2
Profit for the period - - - - - 10.7 10.7 0.5 11.2
Total comprehensive income for the period - - - - 6.0 11.9 17.9 0.5 18.4
Dividends paid - - - - - - - - -
Issue of shares - - - - - - - - -
Share-based payments - - - - - 0.1 0.1 - 0.1
Treasury shares used to settle share option exercises - - - 1.1 - (1.1) - - -
Tax in relation to share-based payments - - - - - 1.2 1.2 - 1.2
Acquisition of treasury shares - - - (9.9) - - (9.9) - (9.9)
Total transactions with owners recognised directly in equity - - - (8.8) - 0.2 (8.6) - (8.6)
Balance at 31 July 2022 0.2 31.5 9.2 (9.6) 14.6 79.4 125.3 (0.3) 125.0
Period to 31 January 2023
Actuarial gains - - - - - 0.2 0.2 - 0.2
Exchange differences on translating foreign operations - - - - 0.3 - 0.3 - 2.90.3
Net income recognised directly in equity - - - - 0.3 0.2 0.5 - 0.5
Profit for the period - - - - - 16.1 16.1 (0.1) 16.0
Total comprehensive income for the period - - - - 0.3 16.3 16.6 (0.1) 16.5
Dividends paid - - - - - (7.7) (7.7) - (7.7)
Issue of shares - - - - - - - - -
Share-based payments - - - - - 3.7 3.7 - 3.7
Tax in relation to share-based payments - - - - - (0.7) (0.7) - (0.7)
Acquisition of treasury shares - - - (5.6) - - (5.6) - (5.6)
Total transactions with owners recognised directly in equity - - - (5.6) - (4.7) (10.3) - (10.3)
Balance at 31 January 2023 0.2 31.5 9.2 (15.2) 14.9 91.0 131.6 (0.4) 131.2
YOUGOV PLC
CONSOLIDATED CASHFLOW STATEMENT
For the six months ended 31 January 2023
Unaudited Unaudited Audited
6 months to 6 months to Year ended
31 January 31 January 31 July
2023 2022 2022
£m £m £m
Cash flows from operating activities
Profit before taxation 21.0 9.2 25.3
Adjustments for:
Finance income (0.9) - -
Finance costs 0.3 1.6 1.0
Amortisation of intangibles 10.8 9.4 20.4
Depreciation 2.2 2.5 4.9
Share-based payments 3.7 2.8 2.9
Other non-cash items 2.2 2.4 8.6
Settlement of deferred consideration (0.2) - -
(Increase)/decrease in trade and other receivables (4.5) 6.2 (4.4)
(Decrease)/increase in trade and other payables (4.4) (4.2) 9.5
Increase in provisions 0.3 1.0 1.5
Cash generated from operations 30.5 30.9 69.7
Interest paid (0.3) (0.3) (0.9)
Income taxes paid (1.6) (2.8) (6.9)
Net cash generated from operating activities 28.5 27.8 61.9
Cash flow from investing activities
Acquisition of subsidiaries (net of cash acquired) - (25.0) (25.4)
Purchase of property, plant and equipment (0.6) (0.6) (1.5)
Purchase of intangible assets (9.2) (8.2) (16.0)
Net cash used in investing activities (9.8) (33.8) (42.9)
Cash flows from financing activities
Principal elements of lease payments (0.8) (1.3) (3.4)
Draw down of bank loans - 20.0 20.0
Repayment of bank loans - - (20.0)
Dividends paid to shareholders (7.7) (6.7) (6.7)
Purchase of treasury shares (5.6) - (9.9)
Net cash (used)/generated in financing activities (14.1) 12.0 (20.0)
Net increase/(decrease) in cash and cash equivalents 4.7 6.0 (1.0)
Cash and cash equivalents at beginning of period 37.4 35.5 35.5
Exchange (loss)/gain on cash and cash equivalents (0.7) (0.6) 2.9
Cash and cash equivalents at end of period 41.4 40.9 37.4
The accompanying accounting policies and notes form an integral part of this
financial information.
Alex McIntosh
Chief Financial Officer
21 March 2023
YOUGOV PLC
notes to the CONDENSED consolidated interim financial statements
For the six months ended 31 January 2023
1 GENERAL
INFORMATION
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 the 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 condensed consolidated interim financial statements are presented
in UK Sterling, which is also the functional currency of the Company. Figures
are rounded to the nearest million UK Sterling, unless otherwise indicated.
These condensed consolidated interim financial statements have been approved
for issue by the Board of Directors of YouGov plc (the "Board") on 21 March
2023.
This condensed consolidated interim financial information for the six months
ended 31 January 2023 does not comprise statutory accounts within the meaning
of Section 434 of the Companies Act 2006. Statutory accounts for the year
ended 31 July 2022 were approved by the Board on 11 October 2022 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
consolidated financial statements of the Group for the year ended 31 July 2022
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
These condensed consolidated interim financial statements for the six months
ended 31 January 2023 have been prepared in accordance with the Disclosure and
Transparency Rules of the Financial Services Authority and IAS 34 "Interim
Financial Reporting" as contained in UK-adopted IFRS. The condensed
consolidated interim financial statements should be read in conjunction with
the annual financial statements for the year ended 31 July 2022, which has
been prepared in accordance with international accounting standards in
conformity with the requirements of the Companies Act 2006 applicable to
companies reporting under IFRS.
Judgements, accounting estimates and risks facing the Group
The preparation of interim financial information requires management to make
judgements, estimates and assumptions that affect the application of
accounting policies and the reported amounts of income, expenses, assets and
liabilities.
All significant estimates and judgements made by management were consistent
with those applied to the consolidated financial statements for the year ended
31 July 2022.
The nature of the Group's principal risks and uncertainties are broadly
unchanged from those set out in our 2022 Annual Report.
3 SEGMENTAL ANALYSIS
The Board of Directors (which is the "chief operating decision-maker")
primarily reviews information based on product lines, being split as
syndicated services such as Data Products and non-syndicated services such as
Custom Research and Data Services - with supplemental geographical
information.
Custom Research Data Products Data Services Eliminations and unallocated costs Group
£m £m £m £m £m
For the six months to 31 January 2023 (Unaudited)
Revenue
Recognised over time 23.9 41.7 0.3 0.6 66.5
Recognised at a point in time 41.4 0.2 22.7 0.6 64.9
Total revenue 65.3 41.9 23.0 1.2 131.4
Cost of sales (11.5) (2.3) (4.2) (1.9) (19.9)
Gross profit 53.8 39.6 18.8 (0.7) 111.5
Administrative expenses (39.6) (21.8) (15.6) (12.4) (89.4)
Adjusted operating profit/(loss) 14.2 17.8 3.2 (13.1) 22.1
Separately reported items (1.7)
Operating profit 20.4
Net finance income 0.6
Profit before taxation 21.0
Taxation (5.0)
Profit after taxation 16.0
Custom Research Data Products Data Services Eliminations and unallocated costs Group
£m £m £m £m £m
For the six months to 31 January 2022 (Unaudited)
Revenue
Recognised over time 14.5 34.4 0.3 1.2 50.4
Recognised at a point in time 27.5 0.4 23.4 (0.5) 50.8
Total revenue 42.0 34.8 23.7 0.7 101.2
Cost of sales (8.1) (2.9) (3.4) (1.3) (15.7)
Gross profit 33.9 31.9 20.3 (0.6) 85.5
Administrative expenses (25.9) (20.8) (16.0) (8.8) (71.5)
Adjusted operating profit/(loss) 8.0 11.1 4.3 (9.4) 14.0
Separately reported items (3.2)
Operating profit 10.8
Net finance cost (1.6)
Profit before taxation 9.2
Taxation (2.9)
Profit after taxation 6.3
3 SEGMENTAL ANALYSIS (continued)
Supplementary analysis by geography
Six months to 31 January 2023 (Unaudited) Six months to 31 January
2022 (Unaudited)
Revenue Adjusted operating profit/(loss) Revenue Adjusted operating profit/(loss)
£m £m £m £m
UK 31.4 6.6 26.7 6.9
Americas(1) 64.0 21.7 46.1 16.0
Mainland Europe 28.3 1.4 20.0 2.6
Middle East 4.4 1.3 2.8 0.5
Asia Pacific 11.0 1.0 9.3 0.5
Intra-group revenues/unallocated costs (7.7) (9.9) (3.7) (12.5)
Group 131.4 22.1 101.2 14.0
1 Americas refers to the US, Canada and Latin America.
4 SEPARATELY REPORTED ITEMS
Unaudited Unaudited Audited
6 months to 6 months to Year ended
31 January 31 January 31 July
2023 2022 2022
£m £m £m
Acquisition-related costs 1.7 3.2 6.3
1.7 3.2 6.3
Acquisition related costs in the period comprise £1.5m of contingent
consideration treated as staff costs in respect of the acquisitions of
Charlton Insights Inc, Faster Horses Pty Limited and YouGov Finance Limited
(renamed from Lean App Limited) and £0.2m of bonus-related costs in respect
of LINK Marketing Services AG.
Acquisition related costs in the prior period comprised £2.4m of contingent
consideration treated as staff costs in respect of the acquisitions of
Portent.io Limited, Charlton Insights Inc., Faster Horses Pty Limited and
YouGov Finance Limited (renamed from Lean App Limited) and £0.8m of
transaction costs in respect of the acquisitions of LINK Marketing Services AG
and Rezonence Limited.
5 TAXATION
Unaudited Unaudited Audited
6 months to 6 months to Year ended
31 January 31 January 31 July
2023 2022 2022
£m £m £m
Current taxation charge 5.7 3.7 7.2
Deferred taxation (credit)/charge (0.7) (0.8) 0.6
Total income statement tax charge 5.0 2.9 7.8
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 2023 2022 2022
Weighted average number of shares during the period: ('m shares)
- Basic 109.7 111.0 109.9
- Dilutive effect of share options 2.4 2.3 2.3
- Diluted 112.1 113.3 112.2
Basic earnings per share (in pence) 14.7p 5.7p 15.7p
Adjusted basic earnings per share (in pence) 19.2p 10.6p 23.7p
Diluted earnings per share (in pence) 14.4p 5.6p 15.4p
Adjusted diluted earnings per share (in pence) 18.8p 10.4p 23.2p
The adjustments have the following effect:
Basic earnings per share 14.7p 5.7p 15.7p
Share-based payments 3.4p 2.5p 2.6p
Social taxes on share-based payments 0.1p 0.2p -
Imputed interest - - 0.1p
Separately reported items 5.7p
1.6p 2.8p
Tax effect of the above adjustments and adjusting tax items (0.6p) (0.6p) (0.4p)
Adjusted basic earnings per share 19.2p 10.6p 23.7p
Diluted earnings per share 14.4p 5.6p 15.4p
Share-based payments 3.4p 2.5p 2.5p
Social taxes on share-based payments 0.1p 0.2p -
Imputed interest - - 0.1p
Separately reported items 1.5p 2.8p 5.6p
Tax effect of the above adjustments and adjusting tax items (0.6p) (0.7p) (0.4p)
Adjusted diluted earnings per share 18.8p 10.4p 23.2p
7 DIVIDEND
On 8 December 2022 a final dividend in respect of the year ended 31 July 2022
of £7.7m (7.0p per share) (2021: £6.7m (6.0p per share)) was paid to
shareholders. No interim dividend is proposed in respect of the period (2022:
£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
£m £m £m £m
Carrying amount at 31 July 2021 60.5 29.2 3.2 12.1
Additions:
Through business combinations 14.3 10.4 1.0 0.8
Separately acquired - 4.8 0.6 -
Internally developed - 3.4 - -
Amortisation and depreciation - (9.3) (0.8) (0.8)
Exchange differences 0.3 - - 0.3
Carrying amount at 31 January 2022 75.1 38.5 4.0 12.4
Additions:
Through business combinations 4.2 - 0.5 0.7
Separately acquired - 2.1 0.4 -
Internally developed - 6.8 - -
Amortisation and depreciation - (11.1) (0.9) (2.4)
Exchange differences 1.1 1.7 0.2 0.6
Carrying amount at 31 July 2022 80.4 38.0 4.2 11.3
Additions:
Separately acquired - 5.7 0.6 0.5
Internally developed - 3.5 - -
Amortisation and depreciation - (10.8) (0.8) (1.4)
Fair value updates to LINK (see below) 2.7 (2.9) - -
Exchange differences 0.6 0.2 - -
Carrying amount at 31 January 2023 83.7 33.7 4.0 10.4
The following fair value adjustments for the LINK opening balance sheet have
been made: £0.2m working capital adjustment to the purchase price and £2.9m
reclassification from Customer Relationship Intangible to Goodwill.
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 was undertaken as at 30 April 2022 with no impairment.
There are no indications of impairment.
9 SHARE CAPITAL
Number of shares
Share capital
£m
At 31 January 2022 111,365,582 0.2
Issue of shares 91,181 -
At 31 July 2022 111,456,763 0.2
Issue of shares 11,842 -
At 31 January 2023 111,468,605 0.2
The Company has only one class of share. The par value of each Ordinary Share
is 0.2p (2022: 0.2p). All issued shares are authorised and fully paid. Shares
issued in the year were in respect of the exercise of 11,842 share options at
0.2p per share.
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.
The book value of the Group's primary financial instruments are equal to their
fair values. The primary categories are Trade and other receivables, Cash and
cash equivalents and Trade and other payables as shown in the Consolidated
Statement of Financial Position.
11 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.
12 EVENTS AFTER THE REPORTING PERIOD
No material events have taken place subsequent to the reporting date.
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