We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Register for streaming realtime charts, analysis tools, and prices.
| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Yougov Plc | LSE:YOU | London | Ordinary Share | GB00B1VQ6H25 | ORD 0.2P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 16.00 | 1.84% | 886.00 | 870.00 | 900.00 | 885.00 | 875.00 | 880.00 | 209,652 | 16:35:29 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Coml Econ, Sociolog, Ed Resh | 258.3M | 34.5M | 0.2948 | 30.02 | 1.04B |
From Apr 2019 to Apr 2024
TIDMYOU
RNS Number : 9996S
YouGov PLC
09 October 2017
9 October 2017
YouGov plc
Preliminary Results for the year ended 31 July 2017
Hot Features
Premium
Financial Highlights
----------------------------------------------------------------------
Year to
31 July Year to
2017 31 July 2016
GBPm GBPm % change
-------------------------------- --------- -------------- ---------
Revenue 107.0 88.2 21%
-------------------------------- --------- -------------- ---------
Adjusted Operating Profit(1) 14.5 10.9 33%
-------------------------------- --------- -------------- ---------
Adjusted Operating Profit
Margin 14% 12% -
-------------------------------- --------- -------------- ---------
Adjusted Profit before Tax(1) 16.4 13.3 24%
-------------------------------- --------- -------------- ---------
Adjusted Earnings per Share(1) 10.9p 8.8p 24%
-------------------------------- --------- -------------- ---------
Dividend per Share 2.0p 1.4p 43%
-------------------------------- --------- -------------- ---------
Statutory Operating Profit 7.6 4.3 74%
-------------------------------- --------- -------------- ---------
Statutory Profit before
Tax 7.9 5.5 43%
-------------------------------- --------- -------------- ---------
Statutory Earnings per Share 4.4p 3.3p 35%
-------------------------------- --------- -------------- ---------
Highlights
-- Group revenue increased by 21% (9% on a constant currency basis)
-- Data Products and Services revenue up by 37% to GBP47m (24% on a constant currency basis); now represents 44% of Group total (2016: 38%)
o BrandIndex revenue increased by 36% (20% at constant currency) to GBP20m
o Profiles revenue increased by 165% (144% at constant currency) to GBP4m
o Omnibus revenue increased by 33% (23% at constant currency) to GBP22m
-- Data Products and Services operating profit increased by 32%
-- Custom Research revenue up by 11% (static at constant currency) to GBP60m and operating profit increased by 30%
-- Adjusted operating profit up by 33%, adjusted profit before tax up 24% and adjusted earnings per share up by 24%
-- Cash generated from operations (before paying interest and tax) increased by 37% to GBP19m (2016: GBP14m)
-- Excellent cash conversion(1) of 130% of adjusted operating profit (2016: 130%) -- Net cash balances of GBP23.2m (2016: GBP15.6m) -- Recommended dividend increased by 43% to 2.0p per share -- US becomes largest profit generator with operating profit increasing 54% -- Current trading in line with the Board's expectations 1. Defined in the explanation of alternative performance measures on page 16.
Commenting on the results, Stephan Shakespeare, Chief Executive, said:
"This is the third consecutive year in which YouGov has delivered growth significantly above the market, both in revenue and profit. We have made further progress in our strategic shift to data products and services sold on subscription and this is bringing increased margin and greater visibility. Our systematic approach to market research which combines our syndicated data with new proprietary analytic methodologies to deliver greater granularity and accuracy, points to an exciting future. Trading in the current financial year has started in line with our expectations and we expect continued growth consistent with our ambition to become a leading player in the global data and analytics market."
Enquiries:
YouGov plc Stephan Shakespeare / Alan Newman 020 7012 6000 FTI Consulting Charles Palmer / Harry Staight 020 3727 1000 Numis Securities Nick Westlake (NOMAD) / Toby Adcock (Broker) 020 7260 1000
Chairman's Statement
We are pleased to report that in the financial year just ended, YouGov has once again achieved strong organic revenue growth and significantly increased its profitability. This performance is in line with the long-term plan we have been following since 2015. As shareholders will be aware, this plan set ambitious goals for the company based on rapid growth in the higher margin Data Products and Services parts of our business and on raising the profit margins in our Custom Research business.
Group revenue of GBP107m increased by 21% in reported terms, and 9% in constant currency terms, compared to the prior year. This organic growth rate is once again well above that of the global research market. Our adjusted operating profit increased by 33% to GBP14.5m and the operating margin increased by 2% points to 14%.This reflects the benefits of the continuing planned shift in our product mix from traditional market research to subscription-based Data Products and Services. The latter accounted for 44% of total Group revenue in the year, an increase of 6% points in its share from 2015/16.
YouGov is a pioneer of the market's shift towards rich, single-source, connected data. Our proprietary multi-dimensional database, the YouGov Cube, allows fast large-scale analysis of many thousands of variables. This has allowed us to create innovative syndicated data products and services that are helping to grow our market share among key users of data on public behaviour and attitudes. These users include brand owners, advertising and media agencies focussing on marketing, as well as public agencies wishing to understand the populations that they serve.
YouGov's ability to provide accurate, in-depth data was demonstrated during the 2017 UK General Election. We applied our ground-breaking MRP (Multi-level Regression and Post-stratification) model which produced highly accurate seat-by-seat projections and predicted a hung parliament. The model's combination of connected data and sophisticated analytics is directly applicable to the analysis and monitoring of audiences in many marketing contexts. The model is currently being developed for commercial uses and will allow us to gain advanced statistical insights into micro audiences with greater confidence than ever before.
We have continued to expand our global capability, which includes our panel comprising of 5 million people worldwide and a network of 30 offices in 20 countries, making YouGov one of the top ten international market research networks. This year the USA became our largest profit generator having already been our largest revenue source for several years. This reflects our success in winning many US based global leaders as clients and is a strength at a time when the UK and European political and economic outlook remains more uncertain.
YouGov's strong cash position has enabled us to continue to invest to support organic growth, including in our product development, technology and panel. It also provides us with the means to consider bolt-on acquisition opportunities that may arise to accelerate our development in line with our strategy.
In keeping with our progressive dividend policy, we are pleased to propose a 43% increase in the annual dividend to 2.0p per share, payable in December 2017.
As separately announced, Alan Newman, Chief Financial Officer, will be retiring from the Company at the end of December 2017 after nine years in this role. On behalf of the Board of Directors, I would like to take this opportunity to thank Alan for his service and his contribution to YouGov's successful growth and strong financial momentum.
Roger Parry
Chairman
9 October 2017
Chief Executive Officer's Review
Performance in the Year
YouGov's revenue for the year ended 31 July 2017 increased by 21% to GBP107m and by 9% on a constant currency basis. In comparison, we estimate the global market growth to be approximately 4%. Our higher margin Data Products and Services accounted for some 68% of the total revenue growth, increasing revenue by 37% (24% in constant currency terms) from GBP35m to GBP47m. Custom Research revenue grew in reported terms by 11% from GBP54m to GBP60m, although it was static in constant currency terms.
The Group's adjusted operating profit increased by 33% from GBP10.9m to GBP14.5m and the adjusted operating margin increased by 2% points to 14%.
Within Data Products and Services, YouGov BrandIndex revenue grew by 36% to GBP20m (20% constant currency growth), the newer YouGov Profiles segmentation product increased revenue by 165% (144% in constant currency terms) to GBP4m, and YouGov Omnibus revenue grew by 33% (23% constant currency growth) to GBP22m. Data Products and Services operating profit increased by 32% to GBP13m, although the operating margin was 1% lower at 27% due to planned investment continuing in geographical expansion and in data analytics support.
Our strategy is to focus investment on Data Products and Services while aligning Custom Research with our panel-centric methodology and consequently, improving margins. Progress is encouraging - increasingly, we are selling the in-depth data derived from our digitally interactive panel as a subscription-based service and in custom research through higher margin annual tracker contracts. During this financial year, approximately 31% of the Group's revenue arose from contracts of 12 months duration or longer. This trend enhances visibility over the Group's future revenue and helps to increase cash generation.
This strategy resulted in revenue from Custom Research being static (in constant currency terms) while its adjusted operating profit increased by 30% from GBP6.9m to GBP8.9m and its operating margin rose by 2% points from 13% to 15%. This improvement comes from moving our focus away from projects which do not benefit from YouGov's core competitive strengths derived from our ability to generate connected and large-scale data for clients. During the year we also reduced, as planned, certain non-core, less profitable parts of the business (notably in Germany and Middle East).
Regionally, the USA became the highest profit generator in the Group, with a 54% increase in adjusted operating profit to GBP9.3m, as well as being the largest region in revenue terms accounting for 38% of the Group's total revenue. The UK increased revenue by 9% to GBP27.1m and raised its operating profit margin to 32%. The newer markets of Asia Pacific and France continued to grow strongly with their businesses centred on Data Products and Services although the costs of expansion in Asia Pacific led to a higher regional operating loss. In our Germany, Nordic and Middle East units, Data Products and Services revenue also grew well, but the scaling back of their less profitable, non-core Custom Research activities led to lower overall growth. As a result, Nordic revenue rose by only 3%, Middle East by 1% and Germany's fell by 7%, all in underlying terms.
Business context
Digital technology has created new challenges for marketers. They used to say, "I know half of my advertising works, I just don't know which half". Now they are more likely to say, "A quarter works, but which quarter?" YouGov now has better answers to that question than ever before. Our rich connected data and advanced analytics tools provide new opportunities for us to lead our industry. Our new Data Applications solutions and our performance in the 2017 UK General Election illustrate the application of our data and methodologies to vital challenges in the market. With great efficiency (speed and low cost), we are able to create continuous reliable measures of campaign effectiveness at granular levels which facilitate within-campaign adaptation.
Advances in methodology
YouGov proved itself the world's most advanced statistical analysis team in commercial survey research following the application of MRP to the 2017 UK General Election. This was a genuine breakthrough in methodology and paves the way for increased accuracy and granularity of market research with powerful applications to core marketing functions. MRP (Multi-level Regression and Post-stratification) is a technique developed by the Stan Development Team at Columbia University in part with YouGov collaboration.
It allowed us to predict a hung Parliament when nearly everyone else - campaigners, commentators, markets, bookies, academics and other pollsters - was confident of an overwhelming Conservative victory. This was the result of a granular seat-by-seat model that identified unexpected outcomes, even in areas where we had sparse panel samples. MRP's application to market research has great value as it allows us to describe micro audiences (demographic niches or small geographies, such as a single supermarket's customer base) with higher levels of confidence than ever before.
Strategy
We are successfully implementing our clearly defined strategy of developing smarter alternatives to traditional market research - based on connected data, new analytical tools and innovative applications - and bringing it all together into a single system, a single dashboard, a single infrastructure for applied research.
We are advancing in all parts of the YouGov System to create greater efficiency, accuracy and currency for our clients.
These are the parts:
An engaged panel
We aim to create a fully global panel that is larger, more engaged and more productive than any currently available. We are making it easier to recruit new panellists and making induction to the panel faster and more engaging. The YouGov Take Part mobile app is in its second phase of improvement and we will shortly be introducing a new format for completing surveys that is more rewarding in terms of valuable feedback to panellists.
Advanced analytics technology
We have made a strong advance in methodology through MRP, as described above. This was made possible by our large panel producing connected data for analysis through Crunch. Crunch is our new online data analytics platform, now being increasingly integrated into our customer-facing online offer. Crunch makes data processing faster and more accurate and enables clients to obtain increased value through easy-to-use analytics tools. Advanced clients are using this new platform to combine and analyse data from other sources as well as data supplied by YouGov.
24/7 global data processing and analytics resources
Our all-hours data processing and analytics support, provided through our shared services data operations centre in Romania, continues to grow and the services network will soon be supporting research seven days a week.
Self-service survey design tool
Our new self-service tool, 'Collaborative Insights', is being used in beta by a select number of US and UK clients. The tool speeds up the process of designing and scripting surveys both for the Omnibus service and also for general custom research. We intend for it to grow into a collaborative self-service system that links syndicated data to custom studies on a single dashboard. Additionally, expert researchers will be available to enhance the self-service offering as needed so that even more complex research can be made efficient.
New data applications
We have invested in our Data Intelligence Unit to drive future organic growth and the unit is developing new commercial uses for our connected data set (the YouGov Cube). We have packaged a number of the different use cases that go 'beyond the login' of Brandindex and Profiles to create a series of data applications that can be sold to clients as add-ons to their product subscriptions. These new connected data applications are far more advanced than the traditional market research offering, allowing our clients not only to plan marketing campaigns and track performance, but also to build audience segments and execute their programmatic media buys, all using a single-source platform.
Product-aligned custom trackers and services
Recurring, single or multi-country custom trackers (contracted for one or more years), whose data is delivered through Crunch, are a form of custom research that is highly aligned with YouGov's strategic focus. Trackers meet clients' needs for longitudinal monitoring and can provide company-specific information which even clients using our BrandIndex and Profiles syndicated products may require in order to supplement the information provided by the product. Another form of customised information linked to Profiles data is the re-contact study, usually conducted via the Omnibus platform which enables client specific questions to be addressed to a sample selected using Profiles.
Outlook
Over the past few years, we have been implementing the strategy that the Board laid out to our shareholders and as a result have delivered consistent recurring revenue and profit growth. In line with that strategy, YouGov has been transforming itself in response to the needs of the market to become increasingly a global data and analytics business. In the coming year, we aim to maintain our progress and continue pursuing the goals that we have set ourselves.
"Brexit" continues to create uncertainty in the economic and political environment, especially for UK and European businesses. However, the international spread of our revenues (with a significant US weighting) positions our business well to cope with potential volatility. The Group can also benefit in the short-term if GBP Sterling rates remain relatively low compared to other major trading currencies.
In the context of both the macro-environment and our own plans, current financial year trading is in line with the Board's expectations. The Board is confident that YouGov remains well-placed to exploit opportunities for growth, especially in our Data Products and Services business, in both our more mature markets and our newer operations.
Overview of Global Products and Services
Year to Year to % Change
Revenue 31 July 31 July at
2017 2016 % Constant
GBPm GBPm Change Currency
-------------------------------- --------- --------- --------- ----------
Data Products 24.1 16.6 45% 29%
-------------------------------- --------- --------- --------- ----------
Data Services 23.3 17.9 30% 19%
-------------------------------- --------- --------- --------- ----------
Total Data Products & Services 47.4 34.5 37% 24%
-------------------------------- --------- --------- --------- ----------
Custom Research 60.2 54.3 11% 0%
-------------------------------- --------- --------- --------- ----------
Eliminations (0.6) (0.6) - -
-------------------------------- --------- --------- --------- ----------
Group 107.0 88.2 21% 9%
-------------------------------- --------- --------- --------- ----------
Operating Margin
%
-------------------------------- -------------- -------------- -------- ------------------
Year to Year to
31 July 2017 31 July 2016 %
Adjusted Operating Profit GBPm GBPm Change 2017 2016
-------------------------------- -------------- -------------- -------- -------- --------
Data Products 7.0 4.5 56% 29% 27%
-------------------------------- -------------- -------------- -------- -------- --------
Data Services 5.7 5.2 10% 24% 29%
-------------------------------- -------------- -------------- -------- -------- --------
Total Data Products & Services 12.7 9.7 32% 27% 28%
-------------------------------- -------------- -------------- -------- -------- --------
Custom Research 8.9 6.9 30% 15% 13%
-------------------------------- -------------- -------------- -------- -------- --------
Central Costs (7.1) (5.7) (26%) - -
-------------------------------- -------------- -------------- -------- -------- --------
Group 14.5 10.9 33% 14% 12%
-------------------------------- -------------- -------------- -------- -------- --------
Data Products
Data Products are comprised of YouGov BrandIndex, our flagship brand intelligence tracker (82% of this category's revenue); YouGov Profiles, our newer product for audience segmentation and planning (risen in the year to 15% of the total) and YouGov Reports (3%) which has been scaled down following a product re-configuration.
Data products, once they are mature, have a higher profit margin than custom research as the outputs are sold to multiple clients while the input costs, such as data collection and analysis, are incurred only once.
The adjusted operating profit from the Data Products segment increased by 56% to GBP7.0m and the operating margin increased by 2% points to 29%. This partly reflects the growing contribution from YouGov Profiles which is now well developed and required little additional investment in the period.
Within Data Products, BrandIndex grew revenue by 36% (20% at constant currency) to GBP19.7m (2016: GBP14.5m) and now accounts for 18% of total Group revenue, generated from 650 (2016: 500) subscribers in 32 (2016: 27) markets across the world. The US remained the largest BrandIndex market although becoming less dominant as the newer markets have been growing fast, including Asia Pacific whose revenue increased by 106% in underlying terms and France where it grew by 85%. Versions were added in five new markets during the year: Italy, Spain, Philippines, Taiwan and Vietnam.
YouGov Profiles was available in eight markets during the year, following launches in Denmark and Sweden during the second half and is due to be launched in France during the coming year. Profiles continued to make excellent progress achieving sales with a total contract value of some GBP7 million leading to revenue growth of 144% in constant currency terms to GBP3.7m. Profiles now has 125 subscribers, many of whom also subscribe to BrandIndex. A recent subscriber is Aegis Dentsu Network, a leading media buying agency, which has adopted Profiles as its main source of research data for media planning purposes, replacing the incumbent TGI product.
Although the data categories covered by YouGov Profiles are standardised, some data components are tailored for each country version. The UK version of Profiles is based on a database of some 200,000 separate data variables on consumers, collected from more than 300,000 YouGov panellists. The tool connects data on profiles, brand, sector, and media, digital and social data all in one place combining that with attitudes, interests, views and likes. For example, it provides brand usage and perception data for some 1,200 brands (plus usage for thousands more), TV viewing for 5,000 programmes, website usage for the most active commercial websites, thousands of social media likes on music artists, films, personalities and much more.
YouGov Profiles and YouGov BrandIndex are complementary products that draw on and provide users with access to different combinations of datasets from the YouGov Cube. In the markets where both products are available (UK, USA, Germany, China, Indonesia and Malaysia, to date) the two are increasingly marketed together under the banner of "Plan and Track". This reflects the fact that Profiles primarily enables marketers, advertisers and media owners to profile their actual and potential customers and plan targeted campaigns while BrandIndex enables them to track and measure the impact of campaigns and other events on consumers' attitudes to their brand, including their likelihood to buy. Our pricing policy incentivises clients to take both data products, and an increasing proportion of them in the markets concerned are buying both.
This year we introduced increased interoperability between the BrandIndex and Profiles reporting tools. This enhanced linkage allows us to better package the combined BrandIndex-Profiles offering as a single capability with a higher value proposition that can be licensed at a higher price point. The linkages allow clients to drive greater value out of YouGov's underlying Cube data.
This enhanced linkage enables our brand, agency and media clients to conduct further value-added analysis, such as advertising campaign effectiveness. For example, a client is able to identify and create a Profiles variable that includes consumers who have watched the relevant TV programs during a particular campaign. That variable can then be ported into BrandIndex, allowing the client to monitor the impact on KPIs such as brand awareness, advertising awareness and purchase consideration among the 'potentially exposed' audience - and compare that to the general population.
Similarly, by leveraging the linkages between BrandIndex and Profiles, clients are able to validate that they have reached the correct target audience. A client can isolate a group of consumers in BrandIndex which is aware of a brand's recent advertising. Then in Profiles, the client can analyse the composition of that audience in detail. This analysis can include any of the thousands of variables available in Profiles - demographics, attitudes, behaviours, social media likes, hobbies, etc.
We have also introduced a dynamic segmentation offering, allowing clients to run segmentations that are full of colour and continually updated when combined with their Profiles subscription, and an activation offering, allowing clients to use Profiles to create seed audiences which are then scaled using look-alike modelling to enable programmatic advertising buys.
Together the campaign effectiveness, audience validation, dynamic segmentation and activation solutions described above make up our initial suite of 'Data Applications'. These applications enhance the value proposition of the BrandIndex-Profiles capability and make it easier to sell-in the underlying subscriptions to prospects, increase our ability to retain clients and represent incremental revenue opportunities for the Data Products business.
BrandIndex serves major accounts among both advertising and media planning agencies on the one hand and brand owners and advertisers on the other. Its current clients include OMG, Universal McCann, Viacom, Airbnb, Bank of America and KFC. New client wins in the year included Ikea, Intersport, Ketchum, Mastercard, Monster and Hyundai Motor Company.
Profiles new client wins in the year included a number of media agencies such as Dentsu Aegis Network, AMS Media Group, Epiphany Search and Resource Ammirati. Its ongoing clients include MEC, OMG, O2 (Telefónica UK), Universal Music and JCDecaux.
Data Services
Data Services revenue largely comprises YouGov Omnibus our online fast turnaround service, and our related Field & Tab services (together, 94% of the total) with the balance being the provision of sample-only services in the Nordic and Middle East regions.
YouGov Omnibus, increased its revenue globally by 33% (23% in constant currency terms) to GBP21.9m. Most of this revenue growth was generated in the markets outside the UK following the international expansion of the Omnibus service in recent years. The growing footprint of the Omnibus network is attracting more multi-national clients, leading to more multi-country projects being run across our Group platform.
Thus, Asia Pacific grew by 73% in underlying terms and US by 63% and each now accounts for over 10% of total Omnibus revenue. Among the more established markets, Germany grew revenue by 39% in underlying terms and Nordic by 18%. In the UK, which accounts for approximately 40% of global revenue, YouGov Omnibus maintained its market leading position and grew by 7%.
Total Data Services operating profit increased by 10% to GBP5.7m although its operating margin decreased from 29% to 24%. This reflected the planned investment this year in delivery and sales resources to support expansion in the newer markets.
One of the Omnibus strengths is the creation of specialised versions to enable clients to access specific, more narrowly defined segments. The UK already offers a range of these including Children and Parents, Shoppers, Metro Cities and Small and Medium Enterprise owners (SME). The latter now enables Omnibus to support business-to-business as well as consumer research work and this area is one of the expanding areas in the YouGov portfolio. Outside the UK, specialised Omnibus services include; Citybus covering eight major cities in Asia Pacific and multiple others across the Group; Homeowners in the USA; and Pet Owners and Car Drivers in Germany.
Profiles subscribers are now able to undertake 're-contact' surveys using Omnibus through which they can obtain additional data tailored to their needs from segments of the panel with specific profile characteristics. These survey results can be imported into the Profiles tool thus enhancing the number of data-points available for that specific respondent group. Re-contact surveys are becoming increasingly popular among Profiles clients and provide a combination of data that is far more advanced than competitive offerings.
We have continued to improve the quality of Omnibus deliverables, with slides now being provided as standard in most markets. As a further development, Omnibus and Field & Tab results are now being delivered to clients through the Crunch analytics application.
We have also continued to develop our self-service survey design tool, Collaborative Insights, which will automate the way that clients submit and approve Omnibus and Custom Research survey questions. The tool is designed to make the turnaround from the client's initial question generation to YouGov's survey results delivery even faster and smoother for both clients and staff. The tool is now being trialled internally and is expected to be rolled out to clients during 2018.
Major New Omnibus client wins in the year included Acer, Bertelsmann, E.ON, Eurowings, Kayak and Allianz Insurance.
Custom Research
YouGov's Custom Research business conducts a wide range of quantitative and qualitative research, whose scope, scale and complexity varies greatly. It ranges from large-scale national and multinational tracking studies to one-off surveys designed to address clients' specific information needs at a given time.
YouGov's panel-centric methodology and ability to collect and analyse data rapidly have been enhanced by delivery of results through the Crunch analytics platform. This is ideal for meeting clients' needs for faster and more continuous tracking data, for which projects are often contracted on an annual basis. The YouGov Cube also enables survey data to be connected with other data from our library or that forms part of a data product such as BrandIndex or Profiles.
During the year, we continued our strategy of harmonising our global Custom Research business and improving its profitability by focussing resources on our core panel-based services and scaling-down the non-core elements largely inherited through acquisitions. This included exiting parts of the German and Middle East businesses with low margins and reorganising the operational support globally. As previously announced, work has been increasingly transferred from most of our units across the world to our shared services centre in Romania where we can provide all-hours data processing and analytics support.
This strategy led to global Custom Research revenue remaining static in constant currency terms, although it grew by 11% in reported terms to GBP60.2m. More importantly, its operating profit increased by 30% to GBP8.9m and its operating margin rose by 2% points to 15%.
Custom Research continued to grow revenue in its largest markets with the US up by 23% (7% in underlying terms) and UK up by 4% as well as in Asia Pacific which increased by 46% (28% in constant currency terms). Among the markets where the rationalisation strategy has focussed, revenue fell in underlying terms by 37% in Germany, by 6% in Nordic and by 1% in Middle East.
The rationalisation initiatives led to the total number of staff engaged in Custom Research across the Group falling year-on-year for the first time (from 297 to 267).
YouGov remains firmly committed to developing its differentiated custom research offering globally and to building out the YouGov Cube across all our panels to support this. To reinforce this commitment and lead the continuing global development of our Custom Research business in line with our strategy, the new role of Global CEO of Custom Research was established in November 2016 and Stefan Kaszubowski, a long-standing senior manager of the Group, was appointed to it.
New Custom Research client wins in the year included Bausch + Lomb, Mastercard, M&C Saatchi, Sony, SSE and Virgin Money.
Central Costs
Central costs of GBP7.1m include the Group management team and central management functions together with the teams responsible for YouGov's online presence and the development and roll-out of the products and services based around the YouGov Cube.
Review of Geographic Operations
Year to Year to Revenue Revenue Growth
Revenue 31 July 2017 31 July 2016 Growth at Constant
GBPm GBPm % Currency %
--------------------- ------------- ------------- ------- --------------
UK 27.1 24.9 9% 9%
--------------------- ------------- ------------- ------- --------------
USUSA 40.7 31.0 32% 14%
--------------------- ------------- ------------- ------- --------------
Germany 9.6 9.1 5% (7%)
--------------------- ------------- ------------- ------- --------------
Nordic 8.9 7.6 18% 4%
--------------------- ------------- ------------- ------- --------------
Middle East 16.3 13.9 17% 3%
--------------------- ------------- ------------- ------- --------------
France 2.7 1.7 62% 42%
--------------------- ------------- ------------- ------- --------------
Asia Pacific 5.5 2.8 95% 71%
--------------------- ------------- ------------- ------- --------------
Intra-group Revenues (3.8) (2.8)
--------------------- ------------- ------------- ------- --------------
Group 107.0 88.2 21% 9%
--------------------- ------------- ------------- ------- --------------
Adjusted Operating Year to Year to Operating Operating Margin
Profit 31 July 31 July Profit
2017 2016 Growth
GBPm GBPm %
----------------------- --------- --------- ---------- -------------------
2017 2016
----------------------- --------- --------- ---------- --------- --------
UK 8.6 7.2 19% 31% 29%
----------------------- --------- --------- ---------- --------- --------
USA 9.3 6.0 54% 23% 19%
----------------------- --------- --------- ---------- --------- --------
Germany 0.9 0.7 36% 10% 8%
----------------------- --------- --------- ---------- --------- --------
Nordic 1.0 0.9 2% 11% 12%
----------------------- --------- --------- ---------- --------- --------
Middle East 2.4 2.4 1% 15% 17%
----------------------- --------- --------- ---------- --------- --------
France 0.4 0.1 202% 15% 8%
----------------------- --------- --------- ---------- --------- --------
Asia Pacific (0.9) (0.6) - (16%) (21%)
----------------------- --------- --------- ---------- --------- --------
Corporate/Unallocated (7.2) (5.8) 22%
----------------------- --------- --------- ---------- --------- --------
Group 14.5 10.9 33% 14% 12%
----------------------- --------- --------- ---------- --------- --------
This year, the USA which was already our largest region in revenue terms, also became the highest profit generator following a 54% increase in its operating profit to GBP9.3m. This largely reflected the sustained growth (of 27%) in Data Products and Services revenue, as Profiles continued to gain traction especially in the media sector and trebled its revenue, while Omnibus also grew strongly. This performance was supported by the expanding media coverage for YouGov, especially from our polling with CBS during the Presidential Election and expanded marketing to the corporate sector.
Data Products growth was also the main factor in the UK's 9% overall revenue increase with Profiles doubling revenue and BrandIndex increasing by 14%. The unit's tightly focussed operating model enabled it to further increase its operating margin to 31%, the highest in the Group.
Our Middle East business grew revenue by 3% in constant currency terms and its operating profit rose by 1%. Data Products and Services revenue grew by 20% (in underlying terms) while Custom Research revenue was static due to planned reduction in non-core, lower margin projects in the region.
Similarly, in Northern Europe, the mix continued to shift towards data products and services leading to low overall growth. Nordic revenue increased by 18% (4% underlying) with Omnibus and BrandIndex both growing by 17% in underlying terms.
In Germany, total revenue fell by 7% (in underlying terms) as Custom Research revenue fell by 36% due to the exit from legacy custom businesses while Data Products and Services revenue grew by 43%, including a 226% increase in Profiles revenue.
The Asia Pacific regional business continued to expand rapidly as anticipated with strong growth in both BrandIndex and Omnibus contributing to a revenue increase of 95% (71% in underlying terms) although investment in regional resources also increased the operating loss.
Revenue in France grew by 62% (42% in constant currency) largely due to BrandIndex, which continued to increase its subscriber base among leading French brands. Its operating profit increased by 200% reflecting the growing scale efficiency in this unit as it matures.
Panel Development
As at 31 July 2017, the Group's online panel comprised a total of 5.6m panellists, an increase of 30% from the total of 4.8m as at 31 July 2016.
We continue to invest in panel growth to support a growing overall workload, and specifically this year in the UK, USA and Germany to support local-level sampling. In addition, within the Middle East, we have invested in growing our India panel. All the panels grew as a result and the panel sizes by region were:
Panel Size Panel Size
at 31 July at 31 July
Region 2017 2016
-------------- ------------ -----------
UK 1,182,100 882,700
USA 2,152,400 1,972,000
Middle East 859,000 728,500
Germany 299,900 235,500
Nordic 283,800 221,800
France 186,500 163,500
Asia Pacific 673,700 561,500
-------------- ------------ -----------
Total 5,637,400 4,765,500
-------------- ------------ -----------
Stephan Shakespeare
Chief Executive Officer
9 October 2017
Financial Performance
Income Statement Review
Group revenue for the year to 31 July 2017 of GBP107.0m was 21% higher than the prior year, 9% higher in constant currency terms.
The Group's gross profit (calculated after deducting costs of panel incentives and external data collection) increased by GBP17.0m to GBP85.7m. The Group's adjusted operating profit margin increased by 2% points to 14%, largely due to improved gross margins which rose from 78% to 80%. This reflected the continuing increase in the proportion of revenue generated from data products and survey work undertaken on the Group's own panels. Our business continues to be highly cash generative with the profit conversion rate remaining at 130%.
Operating expenses (excluding amortisation and other separately reported items) of GBP71.2m increased by GBP13.4m. The operating expense ratio remained at 66% of revenue.
The average number of staff (full-time equivalents) employed during the year increased by 87 to 779. Average revenue per head increased to GBP137,000 from GBP128,000 and staff costs as a percentage of revenue remained at 50%.
Adjusted group operating profit increased by 33% to GBP14.5m, compared to GBP10.9m in the previous year.
There was a net finance income of GBP0.3m compared to GBP1.2m last year, primarily due to lower foreign exchange translation gains. This resulted in an adjusted profit before taxation of GBP16.4m, an increase of 24% over the prior year. Adjusted earnings per share for the year rose by 2.1p (24%) to 10.9p.
The statutory operating profit (which is after charging amortisation of GBP6.4m and other separately reported items of GBP0.5m) increased by GBP3.3m to GBP7.6m. This was slightly less than the increase in adjusted group operating profit due to higher amortisation charges. Statutory profit before taxation increased by GBP2.4m to GBP7.9m reflecting the increase in operating profit offset by a lower net foreign exchange translation gain of GBP0.3m compared to GBP1.2m in the prior year.
Amortisation of Intangible Assets
Amortisation charges for intangible assets of GBP6.5m were GBP1.0m higher than the previous year. Amortisation of the consumer panel increased by GBP0.6m to GBP2.2m reflecting the additional investment made to grow the panel in the past three years. Amortisation of software increased by GBP0.3m to GBP3.5m. GBP2.7m (2016: GBP2.5m) of the total charge related to assets created through the Group's own internal development activities, GBP0.6m (2016: GBP0.6m) to separately acquired assets and GBP0.2m (2016: GBP0.1m) to amortisation on assets acquired through business combinations.
Other Separately Reported Items
Restructuring costs of GBP0.6m (2016: GBP1.1m) were incurred in the year. GBP0.3m of this related to the reduction of non-core custom operations in the Middle East and GBP0.3m arose from the development of global operations and finance support functions.
As part of the process of exiting non-core business in Germany, Service Rating GmbH was disposed of during the year with a profit on disposal of GBP0.1m.
Analysis of Operating Profit and Earnings per Share:
31 July 31 July
2017 2016
GBP'000 GBP'000
----------------------------------------------- -------- --------
Adjusted operating profit (1) 14,528 10,917
Share-based payments 1,488 1,111
Imputed interest 20 27
Net finance income 254 1,199
Share of post-tax (loss)/profit in associates 103 (4)
Adjusted profit before tax (1) 16,393 13,250
Adjusted taxation(1,) (4,912) (4,099)
----------------------------------------------- -------- --------
Adjusted profit after tax (1) 11,481 9,151
----------------------------------------------- -------- --------
Adjusted earnings per share (pence) (1) 10.9 8.8
----------------------------------------------- -------- --------
1. Defined in the explanation of alternative performance measures on page 16.
Cash Flow
The Group generated GBP18.9m (2016: GBP14.1m) in cash from operations (before paying interest and tax) including a GBP2.3m (2016: GBP2.3m) net working capital inflow. The cash conversion rate (percentage of adjusted operating profit converted to cash) remained at 130% of adjusted operating profit.
Expenditure on investing activities increased to GBP7.7m (2016: GBP6.0m) including GBP7.8m (2016: GBP6.1m) on capital expenditure as detailed below less GBP0.1m proceeds from the sale of subsidiaries.
31 July 31 July
2017 2016
GBP'000 GBP'000
------------------------------------------- -------- --------
Internally generated software 3,385 2,555
Panel recruitment 3,471 1,979
Other intangible assets 112 546
------------------------------------------- -------- --------
Total expenditure on intangible assets 6,968 5,080
Purchase of property, plant and equipment 843 1,003
------------------------------------------- -------- --------
Total capital expenditure 7,811 6,083
------------------------------------------- -------- --------
Net expenditure on financing activities increased by GBP0.2m to GBP1.3m, including the dividend payment of GBP1.5m (2016: GBP1.0m).
There was a net cash inflow of GBP7.5m (2016: GBP4.5m) which combined with an exchange gain of GBP0.2m (2016: GBP1.0m) resulted in year-end net cash balances increasing by GBP7.6m to GBP23.2m.
Currency
As well as achieving robust growth in constant currency terms, the Group's results benefitted from the full year effect of the year-on-year depreciation of the GBP, especially against the US$ and its related currencies and the Euro. The appreciation of the US dollar led to approximately 18% higher reported revenue growth in the US, Middle East and Asia Pacific while the Euro appreciation meant that reported revenue in Germany, France and the Nordics was 14% higher than if calculated in constant currency terms. Conversely, operating expenses were 11% higher than if calculated in constant currency terms.
Taxation
The Group had a tax charge of GBP3.3m (2016: GBP2.1m) on a statutory basis, with a deferred tax credit of GBPnil (2016: GBP0.2m). On an adjusted basis, the tax charge was GBP4.9m (2016: GBP4.1m), which represents a tax rate of 30% on the adjusted profit before tax, 1% lower than the prior year. The adjusted tax rate is higher than the standard rate of corporation tax in the UK as a result of profits arising in countries with a higher tax rate, notably the US.
Balance Sheet
Total shareholders' funds and net assets increased to GBP80.5m from GBP74.1m at the prior year-end. Net current assets increased to GBP20.7m from GBP17.5m. Current assets increased by GBP9.6m to GBP54.9, with debtor days decreasing to 58 days from 59 days. Current liabilities increased by GBP6.4m to GBP34.2m, with creditor days decreasing to 24 days from 28 days at 31 July 2016. Current liabilities includes GBP10.1m of deferred revenue in respect of subscriptions (an increase of GBP2.9m from 31 July 2016), which contributed to the increase in net cash balances in the year. Non-current liabilities decreased by GBP0.9m to GBP4.9m.
Proposed Dividend
The Board is recommending the payment of a final dividend of 2.0 pence per share for the year ended 31 July 2017. If shareholders approve this dividend at the AGM (scheduled for Wednesday 6 December 2017), it will be paid on Monday 11 December 2017 to all shareholders who were on the Register of Members at close of business on Friday 1 December 2017.
Alan Newman
Chief Financial Officer
9 October 2017
Explanation of Non-IFRS measures
Financial Measure How we define it Why we use it
----------------------------- -------------------------------- -------------------------------
Adjusted operating Operating profit excluding Provides a more comparable
profit amortisation of intangible basis to assess the
assets charged to operating year-to-year operational
expenses and other business performance
separately reported
items
----------------------------- -------------------------------- -------------------------------
Adjusted operating Adjusted operating
profit margin profit expressed as
a percentage of revenue
----------------------------- -------------------------------- -------------------------------
Adjusted profit Profit before tax before
before tax amortisation of intangible
assets charged to operating
profit, share based
payment charges, imputed
interest and other
separately reported
items.
----------------------------- -------------------------------- -------------------------------
Adjusted taxation Taxation due on the Provides a more comparable
adjusted profit before basis to assess the
tax, thus excluding underlying tax rate
the tax effect of amortisation
and other separately
reported items.
----------------------------- -------------------------------- -------------------------------
Adjusted tax rate Adjusted taxation expressed
as a percentage of
adjusted profit before
tax
----------------------------- -------------------------------- -------------------------------
Adjusted profit Adjusted profit before Facilitates performance
after tax tax less adjusted taxation evaluation, individually
and relative to other
companies
----------------------------- -------------------------------- -------------------------------
Adjusted profit Adjusted profit after
after tax attributable tax less profit attributable
to owners of the to non-controlling
parent interests
----------------------------- -------------------------------- -------------------------------
Adjusted earnings Adjusted profit after
per share 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 Current year revenue Shows the underlying
revenue change ("underlying change compared to revenue change by eliminating
revenue change") prior year revenue the impact of foreign
in local currency translated exchange rate movements
at the current year
average exchange rates.
----------------------------- -------------------------------- -------------------------------
Cash conversion The ratio of cash generated Indicates the extent
from operations to to which the business
adjusted operating generates cash from
profit adjusted operating
profits
----------------------------- -------------------------------- -------------------------------
Publication of Non-Statutory Accounts
The financial information relating to the year ended 31 July 2017 set out below does not constitute the Group's statutory accounts for that year but has been extracted from the statutory accounts, which received an unqualified auditors' report and which have not yet been filed with the Registrar.
YOUGOV PLC
CONSOLIDATED INCOME STATEMENT
For the year ended 31 July 2017
2017 2016
Note GBP'000 GBP'000
---------------------------------------------- ---- -------- --------
Revenue 1 107,048 88,202
Cost of sales (21,339) (19,476)
---------------------------------------------- ---- -------- --------
Gross profit 85,709 68,726
Operating expenses (78,152) (64,395)
---------------------------------------------- ---- -------- --------
Operating profit 1 7,557 4,331
Amortisation of intangibles 6,483 5,478
Exceptional items 2 488 1,108
---------------------------------------------- ---- -------- --------
Adjusted operating profit 1 14,528 10,917
---------------------------------------------- ---- -------- --------
Finance income 480 2,144
Finance costs (226) (945)
Share of post-tax (loss)/profit of associates 103 (4)
---------------------------------------------- ---- -------- --------
Profit before taxation 1 7,914 5,526
Taxation 3 (3,273) (2,111)
---------------------------------------------- ---- -------- --------
Profit after taxation 1 4,641 3,415
---------------------------------------------- ---- -------- --------
Attributable to:
- Owners of the parent 4,671 3,401
- Non-controlling interests (30) 14
---------------------------------------------- ---- -------- --------
4,641 3,415
---------------------------------------------- ---- -------- --------
Earnings per share
Basic earnings per share attributable to
owners of the parent 5 4.4p 3.3p
Diluted earnings per share attributable to
owners of the parent 5 4.2p 3.2p
---------------------------------------------- ---- -------- --------
All operations are continuing.
YOUGOV PLC
CONSOLIDATED statement of comrehensive income
For the year ended 31 July 2017
2017 2016
GBP'000 GBP'000
-------------------------------------------- -------- --------
Profit for the year 4,641 3,415
Other comprehensive income
Items that may be subsequently reclassified
to profit or loss
Currency translation differences 1,159 8,271
--------------------------------------------- -------- --------
Other comprehensive income for the year 1,159 8,271
--------------------------------------------- -------- --------
Total comprehensive income for the year 5,800 11,686
--------------------------------------------- -------- --------
Attributable to:
- Owners of the parent 5,830 11,667
- Non-controlling interests (30) 19
--------------------------------------------- -------- --------
Total comprehensive income for the year 5,800 11,686
--------------------------------------------- -------- --------
Items in the statement above are disclosed net of tax.
YOUGOV PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 July 2017
31 July 2017 31 July 2016
Assets Note GBP'000 GBP'000
------------------------------------ ---- ------------ ------------
Non-current assets
Goodwill 6 43,746 42,401
Other intangible assets 7 11,214 10,739
Property, plant and equipment 8 3,278 3,568
Investments in associates 345 242
Deferred tax assets 6,054 5,416
------------------------------------ ---- ------------ ------------
Total non-current assets 64,637 62,366
Current assets
Trade and other receivables 9 30,699 28,643
Current tax assets 738 1,143
Cash and cash equivalents 23,481 15,553
------------------------------------ ---- ------------ ------------ Total current assets 54,918 45,339 ------------------------------------ ---- ------------ ------------ Total assets 119,555 107,705 ------------------------------------ ---- ------------ ------------ Liabilities ------------------------------------ ---- ------------ ------------ Current liabilities Trade and other payables 10 29,389 25,839 Borrowings 262 - Current tax liabilities 777 392 Provisions 3,749 1,592 Total current liabilities 34,177 27,823 ------------------------------------ ---- ------------ ------------ Net current assets 20,741 17,516 ------------------------------------ ---- ------------ ------------ Non-current liabilities Provisions 3,222 4,255 Deferred tax liabilities 1,683 1,538 ------------------------------------ ---- ------------ ------------ Total non-current liabilities 4,905 5,793 ------------------------------------ ---- ------------ ------------ Total liabilities 39,082 33,616 ------------------------------------ ---- ------------ ------------ Net assets 80,473 74,089 ------------------------------------ ---- ------------ ------------ Equity Issued share capital 211 209 Share premium 31,261 31,086 Merger reserve 9,239 9,239 Foreign exchange reserve 14,889 13,730 Retained earnings 24,873 19,795 ------------------------------------ ---- ------------ ------------ Total shareholders' funds 80,473 74,059 Non-controlling interests in equity - 30 ------------------------------------ ---- ------------ ------------ Total equity 80,473 74,089 ------------------------------------ ---- ------------ ------------
YOUGOV PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 July 2017
Attributable to equity holders
of the Company
--------------------------------------------------------
Issued Foreign Non-controlling
share Share Merger exchange Retained interest Total
capital premium reserve reserve earnings Total in equity equity
Note GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------- ---- -------- -------- -------- --------- --------- -------- --------------- --------
Balance at 1
August 2015 206 31,051 9,239 5,464 15,635 61,595 28 61,623
Exchange
differences on
translating
foreign
operations - - - 8,266 - 8,266 5 8,271
--------------- ---- -------- -------- -------- --------- --------- -------- --------------- --------
Net loss
recognised
directly
in equity - - - 8,266 - 8,266 5 8,271
Profit for the
year - - - - 3,401 3,401 14 3,415
--------------- ---- -------- -------- -------- --------- --------- -------- --------------- --------
Total
comprehensive
gain/(expense)
for the year - - - 8,266 3,401 11,667 19 11,686
--------------- ---- -------- -------- -------- --------- --------- -------- --------------- --------
Issue of shares 3 35 - - (3) 35 - 35
Dividends paid 4 - - - - (1,042) (1,042) (14) (1,056)
Consideration
for purchase
of subsidiary - - - - (28) (28) (3) (31)
Share-based
payments - - - - 1,111 1,111 - 1,111
Tax in relation
to share
based payments - - - - 721 721 - 721
-------- -------- -------- --------- --------- -------- --------------- --------
Total
transactions
with
owners
recognised
directly
in equity 3 35 - - 759 797 (17) 780
--------------- ---- -------- -------- -------- --------- --------- -------- --------------- --------
Balance at 31
July 2016 209 31,086 9,239 13,730 19,795 74,059 30 74,089
Exchange
differences on
translation - - - 1,159 - 1,159 - 1,159
--------------- ---- -------- -------- -------- --------- --------- -------- --------------- --------
Net gain
recognised
directly
in equity - - - 1,159 - 1,159 - 1,159
Profit for the
year - - - - 4,671 4,671 (30) 4,641
--------------- ---- -------- -------- -------- --------- --------- -------- --------------- --------
Total
comprehensive
gain
for the year - - - 1,159 4,671 5,830 (30) 5,800
--------------- ---- -------- -------- -------- --------- --------- -------- --------------- --------
Issue of shares 2 175 - - (2) 175 - 175
Dividends paid 4 - - - - (1,470) (1,470) - (1,470)
Share-based
payments - - - - 1,488 1,488 - 1,488
Tax in relation
to share
based payments - - - - 391 391 - 391
--------------- -------- -------- -------- --------- --------- -------- --------------- --------
Total
transactions
with
owners
recognised
directly
in equity 2 175 - - 407 584 - 584
--------------- ---- -------- -------- -------- --------- --------- -------- --------------- --------
Balance at 31
July 2017 211 31,261 9,239 14,889 24,873 80,473 - 80,473
--------------- ---- -------- -------- -------- --------- --------- -------- --------------- --------
YOUGOV PLC
CONSOLIDATED STATEMENT OF CASHFLOWS
For the year ended 31 July 2017
2017 2016
Note GBP'000 GBP'000
--------------------------------------------------- ---- -------- --------
Cash flows from operating activities
Profit before taxation 7,914 5,526
Adjustments for:
Finance income (480) (2,144)
Finance costs 226 945
Share of post-tax loss of associates (103) 4
Amortisation of intangibles 7 6,508 5,567
Depreciation 8 1,174 819
Loss on disposal of property, plant and equipment
and other intangible assets 7 -
Profit on the disposal of subsidiary undertakings (94) -
Share-based payments 1,488 1,111
Other non-cash items - (36)
Increase in trade and other receivables (1,531) (1,925)
Increase in trade and other payables 2,779 3,229
Increase in provisions 1,026 1,043
--------------------------------------------------- ---- -------- ----------
Cash generated from operations 18,914 14,139
Interest paid (2) (1)
Income taxes paid (2,487) (2,365)
--------------------------------------------------- ---- -------- ----------
Net cash generated from operating activities 16,425 11,773
Cash flow from investing activities
Acquisition of interest in associates - (140)
Proceeds from the sales of subsidiary undertakings
net of cash disposed of 150 -
Purchase of property, plant and equipment 8 (843) (1,003)
Purchase of intangible assets 7 (6,968) (5,080)
Proceeds from sale of plant, property and
equipment - 7
Interest received 8 12
Dividends received from associates - 28 --------------------------------------------------- ---- -------- ---------- Net cash used in investing activities (7,653) (6,176) Cash flows from financing activities Acquisition of non-controlling interests - (31) Proceeds from the issue of share capital 175 35 Repayment of borrowings - (19) Dividends paid to shareholders (1,470) (1,042) Dividends paid to non-controlling interests - (14) --------------------------------------------------- ---- -------- ---------- Net cash used in financing activities (1,295) (1,071) --------------------------------------------------- ---- -------- ---------- Net increase in cash and cash equivalents 7,477 4,526 Cash and cash equivalents at beginning of year 15,553 10,017 Exchange gain on cash and cash equivalents 189 1,010 --------------------------------------------------- ---- -------- ---------- Cash and cash equivalents at end of year 23,219 15,553 --------------------------------------------------- ---- -------- ----------
YOUGOV PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 July 2017
Nature of operations
YouGov plc and subsidiaries' ("the Group") principal activity is the provision of market research.
YouGov plc is the Group's ultimate parent company. It is incorporated and domiciled in Great Britain. The address of YouGov plc's registered office is 50 Featherstone Street, London EC1Y 8RT United Kingdom. YouGov plc's shares are listed on the Alternative Investment Market of the London Stock Exchange.
YouGov plc's annual consolidated financial statements are presented in UK Sterling, which is also the functional currency of the parent company.
Basis of preparation
The following financial information does not amount to full financial statements within the meaning of Section 434 of Companies Act 2006. The financial information has been extracted from the Group's Annual Report and Financial Statements for the year ended 31 July 2017 on which an unqualified report has been made by the Company's auditors.
The consolidated financial statements of YouGov plc are have been prepared under the historical cost convention modified for fair values under International Financial Reporting Standards as adopted by the European Union (IFRS). These consolidated financial statements have been prepared in accordance with IFRS, IFRS Interpretations Committee (IFRS IC) and the Companies Act 2006 applicable to companies reporting under IFRS.
Financial statements for the year ended 31 July 2016 have been delivered to the Registrar of Companies; the report of the auditors on those accounts was unqualified and did not contain a statement under Section 498 of the Companies Act 2006. The 2017 statutory accounts will be delivered in due course.
Copies of the Annual Report and Financial Statements will be posted to shareholders shortly and will be available from the Company's registered office at 50 Featherstone Street, London, EC1Y 8RT.
1 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.
Eliminations
&
Custom Data Data Unallocated
Research Products Services Costs Group
2017 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------- --------- --------- --------- ------------ --------
Revenue 60,220 24,070 23,296 (538) 107,048
Cost of sales (14,389) (3,284) (4,204) 538 (21,339)
---------------------------------- --------- --------- --------- ------------ --------
Gross profit 45,831 20,786 19,092 - 85,709
Operating expenses (36,928) (13,756) (13,359) (7,138) (71,181)
---------------------------------- --------- --------- --------- ------------ --------
Adjusted operating profit 8,903 7,030 5,733 (7,138) 14,528
Amortisation of intangible assets (6,483)
Other separately reported items (488)
---------------------------------- --------- --------- --------- ------------ --------
Operating profit 7,557
Finance income 480
Finance costs (226)
Share of post-tax loss in joint
ventures and associates 103
---------------------------------- --------- --------- --------- ------------ --------
Profit before taxation 7,914
Taxation (3,273)
---------------------------------- --------- --------- --------- ------------ --------
Profit after taxation 4,641
---------------------------------- --------- --------- --------- ------------ --------
Other segment information
Depreciation 730 138 173 132 1,174
---------------------------------- --------- --------- --------- ------------ --------
Eliminations
&
Custom Data Data Unallocated
Research Products Services Costs Group
2016 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------- --------- --------- --------- ------------ --------
Revenue 54,318 16,629 17,905 (650) 88,202
Cost of sales (13,753) (3,007) (3,394) 678 (19,476)
---------------------------------- --------- --------- --------- ------------ --------
Gross profit 40,565 13,622 14,511 28 68,726
Operating expenses (33,704) (9,110) (9,320) (5,675) (57,809)
---------------------------------- --------- --------- --------- ------------ --------
Adjusted operating profit 6,861 4,512 5,191 (5,647) 10,917
Amortisation of intangible assets (5,478)
Other separately reported items (1,108)
---------------------------------- --------- --------- --------- ------------ --------
Operating profit 4,331
Finance income 2,144
Finance costs (945)
Share of post-tax loss in joint
ventures and associates (4)
---------------------------------- --------- --------- --------- ------------ --------
Profit before taxation 5,526
Taxation (2,111)
---------------------------------- --------- --------- --------- ------------ --------
Profit after taxation 3,415
---------------------------------- --------- --------- --------- ------------ --------
Other segment information
Depreciation 506 108 112 93 819
---------------------------------- --------- --------- --------- ------------ --------
1 Segmental analysis (Continued)
Supplementary information by geography
Revenue and adjusted operating profit by geography based on the origin of the sale
2017 2016
Adjusted
operating Adjusted
profit/(loss) operating
Revenue GBP'000 Revenue profit/(loss)
GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------- -------- -------------- -------- --------------
UK 27,139 8,575 24,927 7,150
USA 40,710 9,276 30,960 6,014
Germany 9,597 946 9,098 698
Nordic 8,895 962 7,577 942
Middle East 16,322 2,449 13,948 2,430
France 2,735 406 1,689 134 Asia Pacific 5,512 (908) 2,832 (586) Intra-group revenues/unallocated costs (3,862) (7,178) (2,829) (5,865) --------------------------------- -------- -------------- -------- -------------- Group 107,048 14,528 88,202 10,917 --------------------------------- -------- -------------- -------- --------------
^Operating profit/(loss) before amortisation of intangible assets and exceptional items.
Revenue by geography based on the destination of the customer
Middle Asia Intra-group
UK East Germany Nordic USA France Pacific revenues Group
2017 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------- -------- -------- -------- -------- -------- -------- -------- ----------- --------
External sales 26,766 13,523 9,406 8,584 42,595 2,136 4,038 - 107,048
Inter-segment
sales 1,752 281 772 528 2,764 187 390 (6,674) -
--------------- -------- -------- -------- -------- -------- -------- -------- ----------- --------
Total revenue 28,518 13,804 10,178 9,112 45,359 2,323 4,428 (6,674) 107,048
--------------- -------- -------- -------- -------- -------- -------- -------- ----------- --------
2016
External sales 24,654 10,819 8,722 7,451 32,563 1,789 2,204 - 88,202
Inter-segment
sales 1,925 209 512 356 1,922 141 193 (5,258) -
--------------- -------- -------- -------- -------- -------- -------- -------- ----------- --------
Total revenue 26,579 11,028 9,234 7,807 34,485 1,930 2,397 (5,258) 88,202
--------------- -------- -------- -------- -------- -------- -------- -------- ----------- --------
Inter-segment sales are priced on an arm's-length basis that would be available to unrelated third parties.
2 OTHER SEPARATELY REPORTED ITEMS
2017 2016
GBP'000 GBP'000
-------------------------------------------------- -------- --------
Restructuring costs 582 1,086
Profit on the disposal of subsidiary undertakings (94) -
Legal costs - 157
Acquisition-related costs - (130)
Change in accounting estimation - contingent
consideration - (5)
488 1,108
-------------------------------------------------- -------- --------
Restructuring costs in the year included GBP265,000 in relation to the reduction of non-core custom operations in the Middle East and GBP317,000 arising from the establishment of centralised global operations and finance support functions.
The profit on the disposal of subsidiary undertakings was in respect of the disposal of Service Rating GmbH.
Restructuring costs in the prior year included GBP894,000 in relation to the restructuring of the Northern European units. Restructuring costs of GBP192,000 were also incurred in reorganising sales and marketing operations in the UK, reorganising the IT Development structure and reorganising the management structure in the US.
Legal costs in the prior year were incurred in connection with establishing operations in Thailand.
Acquisition related income in the prior year comprise the acquisition of Decision Fuel comprising a GBP53,000 reduction in contingent deemed staff costs and a GBP77,000 reduction in provisions in respect of transaction costs.
The change in estimated contingent consideration in the prior year is in respect of the Decision Fuel acquisition.
3 TAXATION
The taxation charge represents:
2017 2016
GBP'000 GBP'000
-------------------------------------------------- -------- --------
Current tax on profits for the year 2,987 2,083
Adjustments in respect of prior years 305 173
-------------------------------------------------- -------- --------
Total current tax charge 3,292 2,256
-------------------------------------------------- -------- --------
Deferred tax:
Origination and reversal of temporary differences 428 (309)
Adjustments in respect of prior years (409) 85
Impact of changes in tax rates (38) 79
-------------------------------------------------- -------- --------
Total deferred tax credit (19) (145)
-------------------------------------------------- -------- --------
Total income statement tax charge/(credit) 3,273 2,111
-------------------------------------------------- -------- --------
The tax assessed for the year is higher (2016: higher) than the standard rate of corporation tax in the UK.
The differences are explained below:
2017 2016
GBP'000 GBP'000
-------------------------------------------------- -------- --------
Profit before taxation 7,914 5,526
Tax charge calculated at Group's standard rate
of 20% (2015: 20.67%) 1,557 1,105
Variance in overseas tax rates 1,305 616
Impact of changes in tax rates (38) 79
Gains not subject to tax (25) (7)
Expenses not deductible for tax purposes 45 7
Tax losses for which no deferred income tax asset
was recognised 553 52
Adjustments in respect of prior years (104) 258
Associates results reported net of tax (20) 1
-------------------------------------------------- -------- --------
Total income statement tax charge for the year 3,273 2,111
-------------------------------------------------- -------- --------
On 8 July 2015, the UK corporation tax rate was reduced from 20% to 19% from 1 April 2017 and to 18% from 1 April 2020. On 15 September 2016 further changes to the UK corporation tax rates were made reducing the main rate to 17% from 1 April 2020. These changes have been substantively enacted at the balance sheet date and, therefore, are included in these financial statements. Deferred taxes at the balance sheet date have been measured using the enacted tax rates reflected in these financial statements.
4 DIVID
On 12 December 2016, a final dividend in respect of the year ended 31 July 2016 of GBP1,470,000 (1.4p per share) (2015: GBP1,042,000 (1.0p per share)) was paid to Shareholders. A dividend in respect of the year ended 31 July 2017 of 2.0p per share, amounting to a total dividend of GBP2,106,000 is to be proposed at the Annual General Meeting on 6 December 2017. These financial statements do not reflect this proposed dividend payable.
5 EARNINGS PER SHARE
The calculation of the basic earnings per share is based on the earnings attributable to Ordinary Shareholders divided by the weighted average number of shares in issue during the year. Shares held in employee share trusts are treated as cancelled for the purposes of this calculation.
The calculation of diluted earnings per share is based on the basic earnings per share, adjusted to allow for the issue of shares and the post-tax effect of dividends and/or interest, on the assumed conversion of all dilutive options and other dilutive potential Ordinary Shares.
The adjusted earnings per share has been calculated to reflect the underlying profitability of the business by excluding the amortisation of intangible assets, share-based payments, imputed interest, impairment charges, other separately reported items and any related tax effects as well as the derecognition of tax losses.
2017 2016
GBP'000 GBP'000
----------------------------------------------------- -------- --------
Profit after taxation attributable to equity holders
of the parent company 4,671 3,401
Add: amortisation of intangible assets included
in operating expenses 6,483 5,478
Add: share-based payments 1,488 1,111
Add: imputed interest 20 27
Add: : other separately reported items 488 1,108
Tax effect of the above adjustments and adjusting
tax items (1,639) (1,988)
----------------------------------------------------- -------- --------
Adjusted profit after taxation attributable to
equity holders of the parent company 11,511 9,137
----------------------------------------------------- -------- --------
Reconciliations of the earnings and weighted average number of shares used in the calculations are set out below.
2017 2016
-------------------------------------------------- ------- -------
Number of shares
Weighted average number of shares during the
year: ('000 shares)
- Basic 105,453 103,944
- Dilutive effect of share options 4,670 3,361
-------------------------------------------------- ------- -------
- Diluted 110,123 107,305
-------------------------------------------------- ------- -------
The adjustments have the following effect:
Basic earnings per share 4.4p 3.3p
Amortisation of intangible assets 6.2p 5.3p
Share-based payments 1.4p 1.1p
Imputed interest 0.0p 0.0p
Other separately reported items 0.5p 1.0p
Tax effect of the above adjustments and adjusting
tax items (1.6p) (1.9p)
-------------------------------------------------- ------- -------
Adjusted earnings per share 10.9p 8.8p
-------------------------------------------------- ------- -------
Diluted earnings per share 4.2p 3.2p
Amortisation of intangible assets 5.9p 5.1p
Share-based payments 1.4p 1.0p
Imputed interest 0.0p 0.0p
Other separately reported items 0.5p 1.0p
Tax effect of the above adjustments and adjusting
tax items (1.5p) (1.8p)
-------------------------------------------------- ------- -------
Adjusted diluted earnings per share 10.5p 8.5p
-------------------------------------------------- ------- -------
6 GOODWILL
Middle Asia
East USA Nordic Germany CoEditor Pacific Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------ -------- -------- -------- -------- -------- -------- --------
Carrying amount at 1
August 2015 1,416 16,945 7,012 9,159 569 692 35,793
Exchange differences 251 2,996 1,417 1,821 - 123 6,608
------------------------ -------- -------- -------- -------- -------- -------- --------
Carrying amount at 31
July 2016 and 1 August
2016 1,667 19,941 8,429 10,980 569 815 42,401
Exchange differences 15 186 502 640 - 2 1,345
------------------------ -------- -------- -------- -------- -------- -------- --------
Carrying amount at 31
July 2017 1,682 20,127 8,931 11,620 569 817 43,746
------------------------ -------- -------- -------- -------- -------- -------- --------
At 31 July 2017
------------------------ -------- -------- -------- -------- -------- -------- --------
Cost 1,682 20,127 8,931 12,343 569 817 44,469
Accumulated impairment - - - (723) - - (723)
------------------------ -------- -------- -------- -------- -------- -------- --------
Net book amount 1,682 20,127 8,931 11,620 569 817 43,746
------------------------ -------- -------- -------- -------- -------- -------- --------
The impairment in the year arose on the closure of BeField GmbH.
In accordance with the Group's accounting policy, the carrying values of goodwill and other intangible assets are reviewed annually for impairment. The cash-generating units ("CGUs") are consistent with those segments shown in Note 1. The 2017 impairment review was undertaken as at 31 July 2017. The recoverable amounts of all CGUs have been determined based on value in use calculations. This review assessed whether the carrying value of goodwill was supported by the net present value of future cash flows derived from assets using a projection period of five years for each CGU based on approved budget numbers.
The sources of the assumptions used in making the assessment are as follows:
-- Growth rates are internal forecasts based on both internal and external market information. -- Margins reflect past experience, adjusted for expected changes.
-- Terminal growth rates based on management's estimate of future long-term average growth rates.
-- Discount rates based on Group WACC, adjusted where appropriate.
Annual EBITDA growth rates of 2.25% have been assumed in perpetuity beyond year five. The pre-tax weighted average costs of capital used to discount the future cash flows to their present values are Middle East 10% (2016: 10%), USA 17% (2016: 17%), Nordic 13% (2016: 13%), Germany 15% (2016: 15%) and Asia Pacific 12% (2016: 12%).
Management has considered reasonable possible changes in key assumptions and performed sensitivity analyses under these scenarios. This analysis shows that sufficient headroom exists and would not give rise to any further impairment.
7 OTHER INTANGIBLE ASSETS
Software and Product
software Customer Patents and development
Consumer panel development contracts and trademarks costs Total
GBP'000 GBP'000 lists GBP'000 GBP'000 GBP'000 GBP'000
------------------ -------------- ------------- ------------- ------------- ------------- --------
At 1 August 2015
Cost 12,182 16,329 4,576 2,869 988 36,944
Accumulated
amortisation (9,985) (10,740) (2,727) (2,403) (737) (26,592)
------------------ -------------- ------------- ------------- ------------- ------------- --------
Net book amount 2,197 5,589 1,849 466 251 10,352
------------------ -------------- ------------- ------------- ------------- ------------- --------
Year ended 31 July
2016
Opening net book
amount 2,197 5,589 1,849 466 251 10,352
Additions:
Separately
acquired 1,979 391 - 49 106 2,525
Internally
developed - 2,555 - - - 2,555
Amortisation
charge:
Business
combinations - (128) (465) (169) - (762)
Separately
acquired (1,574) (572) - (3) (166) (2,315)
Internally
developed - (2,490) - - - (2,490)
Reclassifications - 80 - - (80) -
Exchange
differences 312 211 283 48 20 874
------------------ -------------- ------------- ------------- ------------- ------------- --------
Closing net book
amount 2,914 5,636 1,667 391 131 10,739
------------------ -------------- ------------- ------------- ------------- ------------- --------
At 31 July 2016
and 1 August 2016
Cost 16,081 19,901 5,418 3,439 962 45,801
Accumulated
amortisation (13,167) (14,265) (3,751) (3,048) (831) (35,062)
------------------ -------------- ------------- ------------- ------------- ------------- --------
Net book amount 2,914 5,636 1,667 391 131 10,739
------------------ -------------- ------------- ------------- ------------- ------------- --------
Year ended 31 July
2017
Opening net book
amount 2,914 5,636 1,667 391 131 10,739
Additions:
Separately
acquired 3,471 50 - 26 - 3,547
Internally
developed - 3,385 - - 36 3,421
Amortisation
charge:
Business
combinations - (226) (562) (173) - (961)
Separately
acquired (2,219) (534) - (8) (60) (2,821)
Internally
developed - (2,726) - - - (2,726)
Disposals - - - - (71) (71)
Exchange
differences 34 15 31 4 2 86
------------------ -------------- ------------- ------------- ------------- ------------- --------
Closing net book
amount 4,200 5,600 1,136 240 38 11,214
------------------ -------------- ------------- ------------- ------------- ------------- --------
At 31 July 2017
Cost 19,768 23,374 5,548 3,581 900 53,171
Accumulated
amortisation (15,568) (17,774) (4,412) (3,341) (862) (41,957)
------------------ -------------- ------------- ------------- ------------- ------------- --------
Net book amount 4,200 5,600 1,136 240 38 11,214
------------------ -------------- ------------- ------------- ------------- ------------- --------
8 PROPERTY, PLANT AND EQUIPMENT
Leasehold
Freehold property Computer Fixtures Motor
property improvements equipment and fittings vehicles Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------- --------- ------------- ---------- ------------- --------- --------
At 31 July 2015
Cost 1,416 1,011 2,376 1,302 103 6,208
Accumulated depreciation (329) (333) (1,705) (826) (42) (3,235)
------------------------- --------- ------------- ---------- ------------- --------- --------
Net book amount 1,087 678 671 476 61 2,973
------------------------- --------- ------------- ---------- ------------- --------- --------
Year ended 31 July
2016
Opening net book amount 1,087 678 671 476 61 2,973
Additions:
Separately acquired - 178 576 249 - 1,003
Disposals - (7) - - - (7)
Depreciation (75) (176) (398) (144) (26) (819)
Exchange differences 184 73 81 72 8 418
------------------------- --------- ------------- ---------- ------------- --------- --------
Closing net book amount 1,196 746 930 653 43 3,568
------------------------- --------- ------------- ---------- ------------- --------- --------
At 31 July 2016
Cost 1,667 1,248 3,082 1,692 121 7,810
Accumulated depreciation (471) (502) (2,152) (1,039) (78) (4,242)
------------------------- --------- ------------- ---------- ------------- --------- --------
Net book amount 1,196 746 930 653 43 3,568
------------------------- --------- ------------- ---------- ------------- --------- --------
Year ended 31 July
2017
Opening net book amount 1,196 746 930 653 43 3,568
Additions:
Separately acquired - 61 659 86 37 843
Disposals - (1) - (6) - (7)
Depreciation (87) (205) (609) (243) (30) (1,174)
Exchange differences 14 8 16 10 - 48
------------------------- --------- ------------- ---------- ------------- --------- --------
Closing net book amount 1,123 609 996 500 50 3,278
------------------------- --------- ------------- ---------- ------------- --------- --------
At 31 July 2017
Cost 1,682 1,312 3,787 1,788 158 8,727
Accumulated depreciation (559) (703) (2,791) (1,288) (108) (5,449)
------------------------- --------- ------------- ---------- ------------- --------- --------
Net book amount 1,123 609 996 500 50 3,278
------------------------- --------- ------------- ---------- ------------- --------- --------
All property, plant and equipment disclosed above in both the year ended 31 July 2017 and 3 July 2016, with the exception of those items held under lease purchase agreements, are free from restrictions on title.
9 TRADE AND OTHER RECEIVABLES
31 July 2017 31 July 2016
GBP'000 GBP'000
-------------------------------- ------------ ------------
Trade receivables 18,441 16,542
Other receivables 2,367 2,004
Prepayments 1,886 1,646
Accrued income 8,549 8,925
-------------------------------- ------------ ------------
31,243 29,117
Provision for trade receivables (544) (474)
-------------------------------- ------------ ------------
30,699 28,643
-------------------------------- ------------ ------------
The Directors consider that the carrying amount of trade and other receivables approximate to their fair value.
As at 31 July 2017, trade receivables of GBP10,660,000 (2016: GBP10,101,000) were overdue but not impaired. These relate to a number of customers for which there is no recent history of default or any other indication that the receivable should not be fully collectable. The ageing analysis of past due trade receivables which are not impaired is as follows:
31 July 2017 31 July 2016
GBP'000 GBP'000
------------------------------- ------------ ------------
Up to three months overdue 6,391 4,752
Three to six months overdue 3,011 4,467
Six months to one year overdue 479 631
More than one year overdue 779 251
------------------------------- ------------ ------------
10,660 10,101
------------------------------- ------------ ------------
Movement on the Group provision for impairment of trade receivables is as follows:
2017 2016
GBP'000 GBP'000
------------------------------------------------- -------- --------
Provision for receivables impairment at 1 August 474 235
Provision created in the year 206 368
Provision utilised in the year (140) (159)
Exchange differences 4 29
------------------------------------------------- -------- --------
Provision for receivables impairment at 31 July 544 474
------------------------------------------------- -------- --------
The creation and release of the provision for impaired receivables has been included in the Consolidated Income Statement. The other classes within trade and other receivables do not contain impaired assets. The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivable mentioned above.
9 TRADE AND OTHER RECEIVABLES (CONTINUED)
The average length of time taken by customers to settle receivables is 58 days (2016: 59 days). Concentrations of credit risk do exist with certain clients with which we have trading relationships but none has a history of default and all command a certain stature within the marketplace which minimises any potential risk of default. Material balances (defined as greater than GBP250,000 (2016: greater than GBP250,000)) represent 43% of trade receivables (2016: 39%).
At 31 July 2017, GBP261,000 (2016: GBPnil) of the trade and other receivables of YouGov Nordic and Baltic A/S were used as security against a loan and revolving overdraft facility held by YouGov Nordic and Baltic A/S. The Group does not hold any other collateral as security.
10 TRADE AND OTHER PAYABLES
31 July 2017 31 July 2016
GBP'000 GBP'000
---------------- ------------ ------------
Trade payables 1,745 1,557
Accruals 12,887 11,295
Deferred Income 10,697 9,399
Other payables 4,060 3,588
---------------- ------------ ------------
29,389 25,839
---------------- ------------ ------------
Included within other payables are GBP71,000 (2016: GBP56,000) of contributions due in respect of defined contribution pension schemes.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR EADEPESKXFFF
(END) Dow Jones Newswires
October 09, 2017 02:00 ET (06:00 GMT)
1 Year Yougov Chart |
1 Month Yougov Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions
