6th Aug 2024 11:49
(Alliance News) - YouGov PLC's trading statement gives confidence in improving growth and profitability in the new year, an analyst said.
The London-based market research and data analytics company on Tuesday said it expects financial 2024 results to be slightly ahead of revised guidance, given in June.
Revenue is estimated to be between GBP327 million and GBP330 million in the 12 months that ended July 31, up from GBP258.3 million in financial 2023. Adjusted operating profit is estimated to be between GBP43 million and GBP46 million, down from GBP48.3 million in financial 2023.
Back in June, YouGov had predicted revenue for financial 2024 to be around GBP324 million to GBP327 million. It had lowered full-year group adjusted operating profit expectations to between GBP41 million to GBP44 million.
In response to the guidance upgrade on Tuesday, YouGov shares jumped 17% to 515.52 pence in London on Tuesday. They are down 58% so far in calendar 2024, however.
YouGov said its Research division saw strong growth in Custom Research, offset in part by declines in Data Services which was expected, resulting in the division recording mid-single-digit growth on an underlying basis for the full year.
The CPS business is continuing to perform well, in line with expectations and the integration is progressing well, YouGov added.
Revenue in its Data Products division was in line with the prior year on an underlying basis.
YouGov expects annualised cost savings of GBP20 million to result from a strategic review. Around 70% of these will realised in financial 2025, the firm said.
In addition, YouGov announced the acquisition of Yabble, a New Zealand based company that uses generative artificial intelligence to deliver audience insights. It will pay an initial GBP4.5 million.
Jessica Pok at Peel Hunt said: "Despite a challenging year, management has clearly set out a plan. This gives us confidence in improving growth and profitability in the new year."
Pok has increased financial 2024 revenue and earnings per share forecasts for YouGov by 1% and 6% respectively.
She reiterated a 'buy' rating and raised the share price target for YouGov to 720 pence from 630p.
"At 11x [financial 2025] PE, we believe the stock remains undervalued, given the strong capabilities, data assets and IP within the group."
"It has not been an easy year for YouGov, with a softer trading environment, increased competition and internal inefficiencies leading to the significant downgrade in June," Pok said.
"Having said that, we now have a clear plan set out by management to address these issues, with the launch of the cost optimisation plan, improvements in the sales process and an acquisition to accelerate AI investment."
By Jeremy Cutler, Alliance News reporter
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