2nd Feb 2024 14:43
(Alliance News) - YouGov PLC on Friday offered a trading update that while optimistic, maintained cautious undertones amid a series of challenges during the first half.
Yet despite divisional difficulties, analysts on balance were positive about the firm's prospects, particularly following its acquisition of the Consumer Panel Services of GfK GmbH earlier last year.
For the six months ended January 31, the London-based research and data analytics group noted a "resilient" performance, with continued sales momentum in the technology sector. The first half, it explained, was driven by "stable demand" in both the Data Products and Research divisions.
As such, YouGov assured investors that reported revenue for the half would be "strong", thanks in part to "staff costs" - though it didn't elaborate further on the specifics of this strategy.
Yet, as Edison Group's Fiona Orford-Williams noted, the statement as a whole was "a bit of a mixed bag", with plenty of "cautionary notes".
YouGov faced a handful of challenges over the period, as some sectors proved more difficult than others. Further, discretionary spend continued to be impacted by "general market softness" in the second half, with macroeconomic factors playing a part.
The firm nevertheless remained optimistic, noting that sales momentum "significantly accelerated" in the second quarter following a slow first. It told investors that it was "confident" of achieving current market expectations for the year.
Edison's Orford-Williams was of a similar opinion, noting that while sales cycles "continue to be frustratingly long...YouGov seems to be performing better with the tech sector than is reportedly the case for other market participants."
In a similar vein, Berenberg's Ciaran Donnelly also reflected positively on YouGov's outlook. The sequential improvement in the second quarter versus the first, as well as the "robustness of the sales pipeline", he said, "suggests good momentum and visibility entering [the second half]".
As Donnelly added, "management...continues to see sales momentum in the technology sector, which was the company's largest sector, accounting for [around] 14% of group revenue in FY23, so this is another positive sign, but management notes that other sectors have been more challenging".
Both Berenberg and Edison's analysts were also complimentary of the CPS acquisition last year.
YouGov itself said that, following the buy, the business had been trading "ahead of expectations", and stands to expanding the firm's combined offering to new and existing clients.
"CPS GfK has 1,100 clients, 70% of which were not clients of YouGov prior to the acquisition. This highlights the significant cross-sell opportunity. Encouragingly, management commented that the business is performing ahead of expectations. We increase our forecast contribution by 17% in FY24E," said Berenberg's Donnelly.
YouGov will publish its results for the six months ended January 31 on March 26.
YouGov shares were trading 1.7% lower at 1,185.00 pence each in London on Friday afternoon.
By Holly Beveridge, Alliance News reporter
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