20th Jun 2024 11:21
(Alliance News) - YouGov PLC shares plunged on Thursday after a profit outlook warning, as the data analytics and market research firm grapples with weaker demand.
The stock fell 35% to 532.00 pence each in London on Thursday morning.
Since half-year results for the six months to January 31, released in March, YouGov said it has seen lower sales bookings than anticipated.
As a result, YouGov now expects reported revenue for financial 2024 to be around GBP324 million to GBP327 million, up from GBP258.3 million in financial 2023.
YouGov said it had invested in the business to set up for an acceleration in growth in the second half of the financial year, but this growth was below expectations.
As a result, it now expects full-year group adjusted operating profit to be between GBP41 million to GBP44 million, down from GBP48.3 million in financial 2023.
Peel Hunt analyst Jessica Pok said this indicated downgrades to forecasts for financial 2024 of around 6% to revenue, and 38% to adjusted operating profit.
"This was a disappointing statement from YouGov, given the high visibility reported at the interims," she commented.
YouGov on Thursday said it continues to see increased demand for its customised research solutions.
However, sales in the Data Products division have remained slow and YouGov said it continues to see a decline in fast-turnaround research services.
German bank Berenberg said the weaker demand means YouGov's "ability to offset this with cost actions is limited".
"Therefore, the 5% reduction in revenue expectations translates to a more than 30% impact at the adjusted Ebit level," it added.
"We reduce our FY24 revenue, adjusted Ebit and adjusted EPS by 4%, 37% and 41% respectively. Management commented that it will look to take action on costs in FY25 and therefore we anticipate a margin recovery from the trough margin in FY24. In terms of FY25E estimates, we reduce our revenue, adjusted Ebit and adjusted EPS by 5%, 18% and 19% respectively.
By Eric Cunha, Alliance News news editor
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