Final Results

YouGov PLC 09 October 2006 9 October 2006 YouGov plc Audited Preliminary Results for year to 31 July 2006 Delivering against our objectives - strong organic growth, new products developed and geographical expansion Highlights • Sales more than tripled to £9.5m (£2.9m) • Operating profit grew 302% to £3.9m • PBT increased from £1.0m to £4.1m • Strong performance in UK business • Growing demand for BrandIndex • Established profitable joint venture with Execution Limited, YGX • Completed first acquisition - Siraj in Dubai further strengthens YouGov in Middle East • Middle East operations continue to outperform our initial expectations with contracts secured with a number of clients • Continued expansion of panel and extension of geographical reach • Good start to current financial year - confident of prospects for YouGov Commenting on the results, Nadhim Zahawi, Joint Chief Executive Officer of YouGov, said; 'YouGov has again performed extremely well reflecting our unique position in market research and our commitment to developing a representative panel. The successful launches of BrandIndex and our joint venture with Execution, YGX, demonstrate the scalability of our market research model. The acquisition of Siraj in Dubai adds significant scale to YouGov's position as the fastest growing market research agency in the Middle East. The current financial year has started well across the business and trading is in line with our expectations. In the UK, we continue to see strong demand for sensibly priced, accurate and timely online market research and we are well positioned to capitalise on this trend. The Middle Eastern business is going from strength to strength with the integration of Siraj going to plan. As a result, the Board is confident of another successful year both financially and operationally.' YouGov plc Tel: 020 7618 3010 Nadhim Zahawi, Joint CEO Katherine Lee, CFO Financial Dynamics Tel: 020 7831 3113 Charlie Palmer / Nicola Biles Chairman's Statement Introduction The 2005/06 financial year has been an important one for YouGov. The UK business continues to perform well and we have seen our operations in the Middle East go from strength to strength. During the year we have delivered against the strategy of developing new products and growing the business through selective acquisitions and joint-ventures that we set out at the time of our IPO in 2005. We have developed and launched the new and revolutionary brand tracker, BrandIndex, set up a profitable joint venture, YGX, with Execution Limited and completed our first acquisition, Siraj, a market research agency in Dubai. Financial Performance The financial performance of the Group remains strong. Sales have more than tripled to £9.47m (£2.94m in 2004/05). Operating profit quadrupled from £0.96m to £3.86m and profit before tax grew from £1.0m to £4.05m. The UK operations continue to grow strongly, with reported growth at 65% against the online research sector growth of approximately 25%. Middle East has performed strongly in the year, and has contributed more than half of the group revenue and profit. Bespoke revenue forms the largest element of our revenue at 78% (2005: 61%), with omnibus revenues at 20% (2005: 39%) and syndicated revenues at 2% (2005: 0%). The business continues to be highly cash generative, and during the year generated £1.75m in cash. The cash position at the year end was £5.5m and net assets were £6.77m. The directors are not recommending the payment of a dividend, which is consistent with statements made both at the time of flotation and in subsequent financial reports. This reflects the high-growth nature of the Group and the numerous opportunities that the Board has identified for further development. Operational highlights YouGov has achieved a great deal during the year and the speed and accuracy of the Group's full service online research offer continues to underpin YouGov's competitive advantage. This is reflected in the strength of client relationships, the high level of repeat business and the good new business performance during the year. What is perhaps the most pleasing is that the growth in the UK, international expansion and new product development all demonstrate the scalability of the YouGov model. UK Business Continual track record for accuracy YouGov maintained its record for producing accurate surveys when it predicted that David Cameron would defeat David Davies by 67% to 33% in December 2005 in the contest for the leadership of the Conservative Party. The actual result was Cameron 67.6%, Davies 32.4%. By continuing to maintain our reputation for accuracy we believe that we have not only advanced YouGov's cause, but gone further to extinguish scepticism towards well-constructed online research. UK trading The UK operations have grown such that we now offer a daily omnibus service to customers. This means that customers can access a nationally representative sample of the UK population on a daily basis. Revenues from our omnibus operation have grown from £1.1m to £2.0m, reflecting the move in April from a twice weekly omnibus, to a daily operation. The growth of our bespoke revenue stream in the current year indicates our commitment to being a high quality online full service agency. Key projects in the year were undertaken for P&O, Scottish Widows and Carphone Warehouse. BrandIndex The formal launch of BrandIndex took place on 24 October 2005. Presentations were held on five nights at the Audi Forum on Piccadilly, London. This allowed interested parties to see the BrandIndex product, and to discuss the benefits with the BrandIndex team. BrandIndex provides daily tracking of 1,149 consumer brands, in 32 sectors, across seven different measures of brand perception. The product, which is available via an easy-to-use online tool, is aimed at CEOs, finance directors, brand managers and the research community as well as the financial community. We are extremely pleased with our customers' response to BrandIndex. We have sold subscriptions to a number of household names. BrandIndex is based on YouGov's proprietary technology and panel expertise and as such did not involve significant up front capital expenditure; however, it is also highly operationally geared. We have considered the other subscription based offerings available in the market, and believe that BrandIndex is a unique product and offers its users a revolutionary service. The Board is confident of the future of BrandIndex and is carefully considering the international roll-out of the offering. Panel Expansion Our proprietary panel continues to be at the heart of YouGov's work. Our respondents are recruited to enable YouGov to draw representative research samples. During the course of the year the number of panel members, for whom YouGov had extensive demographic information, grew to 107,000. We also increased the panel in the Middle East to 35,000 and are developing our other smaller panels in North America, Canada, and Germany. The company has devoted, and will continue to devote, substantial resources to maintaining and expanding our panels. YouGovExecution One of the first sales of BrandIndex was to the stock broking house, Execution Limited. Execution's analysts were convinced of the value of the data generated by BrandIndex, particularly in relation to equity prices and as a result, we established a 50:50 joint venture, called YouGovExecution Limited (YGX) in February. YGX provides primary research to the investment community. YouGov brings the market research know-how and consumer panel to Execution who can then assess the consumer-facing strategies of CEOs of listed companies. The business has performed strongly since the outset and has started to contribute to the Group result. YouGov Middle East YouGov Middle East FZ LLC has continued to perform strongly. Contracts have been secured with a range of clients including PR companies, local government organisations, media partners and large multinational companies with operations in the area. We have continued to invest in our people in the Middle East and have increased the head count from 5 to 18 at 31 July 2006. The panel has increased substantially and we have reached 35,000 participants across the Middle East. The move into the region was consistent with our prudent approach of entering new markets alongside an established client. We entered the Dubai market, having undertaken an ad-hoc project for a UK customer, HSBC, to build a specialist panel of businessmen and businesswomen across the Middle East to establish the first Middle East Business Confidence Index. On the back of our success in the local area, we established an office that was financially backed by local partners and of which YouGov holds 78%. Siraj Siraj, the Dubai based marketing and research boutique, was acquired by YouGov Middle East on 30 July 2006. Total consideration was £1.3m, of which £365,000 is deferred. Siraj is a traditional market research agency, offering qualitative and quantitative market research to a host of blue-chip clients. Siraj generated revenues of £0.56m in the 10 months to 31 July 2006 and profits of £0.11m. This is a highly complementary acquisition, adding significantly to YouGov's position as the fastest growing market research agency in the Middle East. There is a clear strategic and logical rationale for this acquisition which will allow us to provide a full range of complementary services to the Group's growing client base in the region. Future development Products Consistent with our organic growth strategy, YouGov has successfully launched BrandIndex and is working closely with YGX to generate new daily trackers. We are actively considering the global offering of the BrandIndex product and are seeking partners to support us in this venture. Overseas expansion YouGov continues to look at ways to grow the business internationally and are currently looking at a number of markets. We also seek to expand our presence in the Middle East and are considering setting up new offices in Saudi Arabia. We intend to launch BrandIndex into the Middle East within the next 12 months. Consistent with YouGov's historic approach to international expansion, any organic, joint-venture or acquisition driven expansion is subject to strict operational and financial criteria. Acquisitions The Board is continually assessing companies operating in the market research sector, to identify those with the most logical, commercial fit with YouGov. In addition to meeting our strict financial measures, any acquisition must meet the following three criteria; 1. Expertise and track record within specific sectors; 2. The business will benefit from being part of a larger group; and 3. It will help YouGov Group build a full service agency based on our core strength of online panel-based research. Prospects and Outlook ESOMAR currently estimates that the global market research market is worth $23.3billion in 2006, an increase from 2005 of 5.7%. Of this, $2.4 billion arose in the UK, up 2.8% compared with 2005. The UK online market is estimated at $137m (36% growth compared to 2005). The current financial year has started well across the business and trading is in line with the Board's expectations. In the UK, we continue to see strong demand for sensibly priced, accurate and timely online market research and the Board believes that we are well positioned to capitalise on this trend. The Middle Eastern business is going from strength to strength, the integration of Siraj is going to plan and we are already beginning to see the benefits of the acquisition coming through. YouGov's strategy is to continue to expand by a combination of organic growth and selective acquisitions. We will continue to grow our client base, expand our product offering, expand our geographical reach and grow our panel. As a result, the Board is confident of another successful year both financially and operationally. Management and Staff We continue to acknowledge that the success of our business relies heavily on the ability and dedication of our key staff. We have grown our staff numbers from 25 to 59 (of which 18 are in the Middle East operations). We regard our staff as one of our greatest assets, and are happy to report that staff turnover remains extremely low. Board of Directors YouGov is growing rapidly and as a result the Board and I believe that it is necessary to put in place a management structure that will support the capacity to drive and manage the Group's ambitions. It is proposed that the plc Board should be supported by an operational board made up of the executive management team and the heads of the UK and Middle Eastern operations. Over time, new country or regional heads could be added to the operational board. We would also like to take this opportunity to make the plc Board more compliant with the main provisions of the Combined Code: Principles of Corporate Governance and Code of Best Practice and as a result we have appointed head hunters to recruit an independent non-executive chairman. Once a chairman has been appointed I shall assume the role of President and remain as a non-executive director. This will enable me to continue working with media, political and other clients, and to continue to represent YouGov in the media and at academic and other conferences. It will also allow me to take on the added responsibility of developing the Group's methodologies and output in the rapidly changing market research sector. I believe this evolution of my role comes at the right time both for me and for the company. YouGov has grown considerably in the last five years. Turnover has tripled in the last year and demand for online research continues to grow. To ensure that we are able to capitalise on the opportunities that are available to us the management structure must evolve too and I am delighted to accept the Board's invitation to become President and look forward to working with my colleagues to grow the business in the future. Peter Kellner Chairman Consolidated Profit and Loss Account For the year ended 31 July 2006 Note 2006 2005 £'000 £'000 Turnover: group and share of joint ventures 9,567 2,942 Less: share of joint ventures' turnover (95) - Group turnover - continuing operations 1 9,472 2,942 Cost of sales 2 (2,153) (476) Gross profit 7,319 2,466 Other operating income and charges 2 (3,466) (1,505) Group operating profit - continuing operations 3,853 961 Share of operating profit in joint venture 1 9 - 3,862 961 Interest receivable 192 51 Interest payable (1) (16) Net interest 3 191 35 Profit on ordinary activities before taxation 1 4,053 996 Tax on profit on ordinary activities 5 (542) (305) Profit on ordinary activities after taxation 3,511 691 Minority interests - equity (521) - Retained profit on ordinary activities after taxation and minority interests 20 2,990 691 Basic earnings per share 8 22.4 5.8 Diluted earnings per share 8 21.1 5.5 The Group has no recognised gains or losses other than the profit for the period. The accompanying accounting policies and notes form an integral part of these financial statements. Consolidated Balance Sheet As at 31 July 2006 Note 2006 2005 £'000 £'000 Fixed assets Intangible assets Goodwill 9 1,171 - Tangible assets 10 158 63 Investment in joint venture Share of gross assets 123 - Share of gross liabilities (13) - 11 110 - 1,439 63 Current assets Debtors 12 3,699 769 Cash at bank and in hand 5,546 3,796 9,245 4,565 Creditors: amounts falling due within one year 13 (2,796) (870) Total assets less current liabilities 7,888 3,758 Creditors: amounts falling due after more than 14 (365) - one year Provisions for liabilities 16 (12) (11) Minority interests - equity (743) - 6,768 3,747 Capital and reserves Called up share capital 17 134 133 Share premium account 18 2,943 2,913 Profit and loss account 18 3,691 701 Shareholders' funds 20 6,768 3,747 The financial statements were approved by the Board of Directors on 9 October 2006 Katherine Lee The accompanying accounting policies and notes form an integral part of these financial statements. Company balance sheet As at 31 July 2006 Note 2006 2005 £'000 £'000 Fixed assets Tangible assets 10 108 63 Investments 11 106 - 214 63 Current assets Debtors 12 1,534 769 Cash at bank and in hand 5,107 3,796 6,641 4,565 Creditors: amounts falling due within one year 13 (1,928) (870) Net current assets 4,713 3,695 Total assets less current liabilities 4,927 3,758 Provisions for liabilities 16 (12) (11) -------- -------- 4,915 3,747 Capital and reserves Called up share capital 17 134 133 Share premium account 18 2,943 2,913 Profit and loss account 18 1,838 701 Shareholders' funds 4,915 3,747 The financial statements were approved by the Board of Directors on 9 October 2006 Katherine Lee The accompanying accounting policies and notes form an integral part of these financial statements. Consolidated Cashflow Statement Note 2006 2005 £'000 £'000 Net cash inflow from operating activities 19 2,896 1,149 Returns on investments and servicing of finance Interest received 181 51 Interest paid (1) (16) Net cash inflow from returns on investments and servicing of finance 180 35 Taxation (318) (202) Capital expenditure and financial investment Purchase of intangible fixed assets (806) - Purchase of tangible fixed assets (133) (28) Cost of investment in joint venture (100) Net cash outflow from capital expenditure and financial investment (1,039) (28) Equity dividends paid - (436) Financing Issue of shares 1 3,038 Premium on issue of shares 30 - Cost of issue - (306) Purchase of own shares - (167) Repayment of loans - (264) Net cash inflow/outflow from financing 31 2,301 Increase in cash 21 1,750 2,819 The accompanying accounting policies and notes form an integral part of these financial statements. Notes to the financial statements 1 Turnover and profit on ordinary activities before taxation Turnover is attributable to market research. An analysis of turnover by geographical market is given below: Turnover Profit before taxation Net assets 2006 2005 2006 2005 2006 2005 £'000 £'000 £'000 £'000 £'000 £'000 UK 4,849 2,942 1,898 961 4,809 3,747 Middle East 4,623 - 1,955 - 1,698 - Middle East Acquisition - - - - 151 - 9,472 2,942 3,853 961 6,658 3,747 Common costs - - Operating profit 3,853 961 Share of turnover, operating profit and net assets of joint venture 95 - 9 - 110 - 9,567 2,942 3,862 961 6,768 3,747 Net interest 191 35 Unallocated assets - - Group turnover 9,567 2,942 Group profit before taxation 4,053 996 Group net assets 6,768 3,747 The profit on ordinary activities before taxation is stated after: 2006 2005 £'000 £'000 Auditors' remuneration: Audit services 29 26 Non-audit services 5 5 Depreciation and amortisation: Goodwill - - Tangible fixed assets, owned 34 17 Assets under hire purchase 4 - Other operating lease rentals: Plant and machinery 2 2 Land and buildings 83 53 2 COST OF SALES AND OTHER OPERATING INCOME AND CHARGES 2006 2005 £'000 £'000 Cost of sales 2,153 476 Other operating income and charges: Selling and marketing 347 43 Administrative expenses 2,941 1,367 Establishment costs 178 95 3,466 1,505 3 Net Interest 2006 2005 £'000 £'000 On other loans - (16) Interest on hire purchase (1) - Other interest receivable and similar income 192 51 191 35 4 Directors and employees Staff costs during the year were as follows: 2006 2005 The Group £'000 £'000 Wages and salaries 1,864 812 Social security costs 187 97 2,051 909 2006 2005 The Company £'000 £'000 Wages and salaries 1,614 812 Social security costs 187 97 1,801 909 The average number of employees of the group during the year was 42. (2005: 20). Remuneration in respect of directors was as follows: 2006 2005 £'000 £'000 Emoluments 741 282 The amounts set out above include remuneration in respect of the highest paid director as follows: 2006 2005 £'000 £'000 Emoluments 175 98 5 Tax on profit on ordinary activities The tax charge represents: 2006 2005 £'000 £'000 Profit on ordinary activities before tax 4,053 996 Profit on ordinary activities multiplied by the standard rate of corporation tax in the year 1,216 299 Overseas earnings not assessable to UK corporation tax (710) - United Kingdom corporation tax at 30% (2005: 30%) 506 299 Adjustment in respect of prior period 14 (23) Expenses not deductible for tax purposes 17 22 Depreciation in excess of capital allowances 4 2 Marginal relief - (3) Total current tax 541 297 Origination and reversal of timing differences 1 8 Adjustment to estimated recoverable amount of deferred tax - - assets Total deferred tax 1 8 Tax on profit on ordinary activities 542 305 6 Profit for the financial year The parent company has taken advantage of section 230 of the Companies Act 1985 and has not included its own profit and loss account in these financial statements. The parent company's profit for the year was £1,680,000 (2005: £996,000). 7 Dividend 2006 2005 £'000 £'000 Equity dividends: 'A' Ordinary Shares of 1p - 200 'B' Ordinary Shares of 1p - 92 'C' Ordinary Shares of 1p - 95 'D' Ordinary Shares of 1p - 49 - 436 8 Earnings per share 2006 Per 2005 Per Weighted share Weighted share average number amount average number amount Earnings of shares pence Earnings of shares pence £'000 £'000 Profit attributable to shareholders 2,990 691 Basic earnings per share Earnings attributable to ordinary shareholders 13,358,157 22.4 11,998,561 5.8 Dilutive effect of securities Options 807,986 661,578 Diluted earnings per share Adjusted earnings 14,166,143 21.1 12,660,139 5.5 9 Intangible fixed assets The Group The Company 2006 2005 2006 2005 £'000 £'000 £'000 £'000 Goodwill 1,171 - - - 1,171 - - - 9 Intangible fixed assets (continued) Goodwill and negative goodwill The Group Goodwill on acquisition Total £'000 £'000 Cost At 1 August 2005 - - Additions 1,171 1,171 At 31 July 2006 1,171 1,171 Amortisation At 1 August 2005 - - Provided in the year - - At 31 July 2006 - - Net book amount at 31 July 2006 1,171 1,171 Net book amount at 31 July 2005 - - No amortisation has been provided on the goodwill acquired in the current year due to the timing of the acquisition. 10 Tangible fixed assets Improvement The Group Fixtures Computer Motor to & fittings equipment vehicles leasehold property Total £'000 £'000 £'000 £'000 £'000 Cost At 1 August 2005 26 33 - 32 91 Additions 26 63 22 22 133 At 31 July 2006 52 96 22 54 224 Depreciation At 1 August 2005 7 14 - 7 28 Provided in the year 9 19 4 6 38 At 31 July 2006 16 33 4 13 66 Net book amount at 31 July 2006 36 63 18 41 158 Net book amount at 31 July 2005 19 19 - 25 63 Included within the NBV of £158,000 was £18,000 (2005: £nil) relating to assets held under finance leases and hire purchase agreements. The depreciation charged to the financial statements in the year in respect of such assets was £4,000 (2005: £nil). The company Fixtures & Computer Improvement fittings equipment to leasehold property Total £'000 £'000 £'000 £'000 Cost At 1 August 2005 26 33 32 91 Additions 15 41 15 71 At 31 July 2006 41 74 47 162 Depreciation At 1 August 2005 7 14 7 28 Provided in the year 6 15 5 26 At 31 July 2006 13 29 12 54 Net book amount at 31 July 2006 28 45 35 108 Net book amount at 31 July 2005 19 19 25 63 11 Fixed asset investments Total fixed asset investments comprise: The Group The Company 2006 2005 2006 2005 £'000 £'000 £'000 £'000 Interest in subsidiary - - 6 - Interest in joint venture - - 100 - - - 106 - Interests in subsidiary At 31 July 2006 the company had interests in the following subsidiary Proportion held Subsidiary Country of Class of share by parent by the Nature of incorporation capital held Company Group business YouGovM.E. FZ Subsidiary United Arab Ordinary 78% 78% Market Research LLC Emirates Interests in joint ventures At 31 July 2006 the Company had interests in the following joint venture Proportion held Joint venture Country of Class of share by parent by the Nature of incorporation capital held Company Group business YouGovExecution Limited JV England Ordinary 50% 50% Primary research for the investment community The end of the joint ventures first reporting period is 31 July 2007. The Group took the decision to include the joint venture in the current reporting period to provide a more accurate reflection of the Group as a whole as at 31 July 2006. The Group's aggregate share in its joint ventures comprises 2006 2005 £'000 £'000 Fixed assets 1 - Current assets 122 - Liabilities due within one year (13) - Liabilities due after one year or more - - The Group's share of the results, assets and liabilities of YouGovExecution Limited was: 2006 2005 £'000 £'000 Turnover 95 - Profit before tax 9 - Taxation - - Profit after tax 9 - Fixed assets 1 - Current assets 122 - Liabilities due within one year (13) - Liabilities due after one year or more - - If the investment in joint ventures had been included at cost, they would have been included at the following amounts: 2006 2005 £'000 £'000 Cost 100 - Amounts written off - - 100 - 12 debtors The Group The Company 2006 2005 2006 2005 £'000 £'000 £'000 £'000 Trade debtors 3,547 690 1,395 690 Amounts owed by Group undertakings - - 36 - Amounts owed by joint ventures 3 - 3 - Other debtors 37 52 16 52 Prepayments and accrued income 112 27 84 27 3,699 769 1,534 769 13 Creditors: amounts falling due within one year The Group The Company 2006 2005 2006 2005 £'000 £'000 £'000 £'000 Deferred income 361 - 316 - Trade creditors 122 142 105 142 Amounts owed to Group undertakings - - 6 - Corporation tax 527 304 527 304 Social security and other taxes 291 115 291 115 Other creditors 75 - 75 - Accruals 1,292 309 608 309 Pre-acquisition profit distribution 110 - - - Amounts due under hire purchase contracts 18 - - - 2,796 870 1,928 870 14 creditors: amounts falling due after more than one year The Group The Company 2006 2005 2006 2005 £'000 £'000 £'000 £'000 Deferred consideration 365 - - - 365 - - - Deferred consideration relates to a payment to be made in respect of the acquisition of the trade and assets of Siraj. The payment will be made on 30 July 2009. 15 financial instruments The Company uses financial instruments, other than derivatives, comprising cash, liquid resources and various items, such as trade debtors, trade creditors etc, that arise directly from its operations. The Company has no borrowings. The main purpose of these financial instruments is to raise finance for the Company's operations. The main risks arising from the Group financial instruments are liquidity risk and foreign exchange risk. The board reviews and agrees policies for managing this risk and they are summarised below. This policy has remained unchanged from previous years. It is and has been throughout the year under review, the Group policy that no trading in financial instruments shall be undertaken. Liquidity risk The Group seeks to manage financial risk by ensuring sufficient liquidity is available to meet foreseeable needs and to invest cash assets safely and profitably. Interest rate profile The financial assets at 31 July 2006 comprised £5.5m of cash accruing interest. During the period 1 August 2005 - 31 July 2006 the rates applicable varied between 4.0% and 4.75%. At the year end the rate earned was per the Bank of England base rate. (2005: 4.3%/2.7%). In the U.A.E. interest has been earned at rates between 4.675% and 4.75% depending upon the length of the deposit term. Currency risk The Group does not hedge its exposure of foreign investments held in foreign currencies. Net foreign currency monetary assets/(liabilities) Functional currency of Sterling US Dollar Total operation £'000 £'000 £'000 31 July 2006 Sterling - 585 585 Other currencies 5 521 526 5 1,106 1,111 16 Provisions for liabilities The Group Deferred Total taxation £'000 £'000 At 1 August 2005 11 11 Provided during year in profit and loss account 1 1 At 31July 2006 12 12 The Company Deferred Total taxation £'000 £'000 At 1 August 2005 11 11 Provided during year in profit and loss account 1 1 At 31July 2006 12 12 The deferred tax charge in the current and prior period represents accelerated capital allowances on fixed assets acquired. 17 share capital 2006 2005 £ £ Authorised 20,000,000 Ordinary Shares of 1p each 200,000 200,000 Allotted, called up and fully paid At 1 August 2005 13,338,207 Ordinary Shares of 1p each 133,381 133,381 New shares allotted, called up and fully paid in respect of share options 314 - 13,369,557 Ordinary Shares of 1p each 133,695 133,381 31,350 ordinary shares of 1p each were issued in the period. The total nominal value of these shares was £313.50 and the total consideration received was £28,215. Options have been granted for 1p ordinary shares Name Number of ordinary shares under option Exercise period Exercise price Peter 379,747 Until 4 June 2013 50p Kellner Panos Manolopoulos 226,764 Until 31 90p December 2014 Katherine 140,000 Until 31 £1.70 / £1.475 Lee December 2015 Employees 55,067 Until 31 90p December 2014 Total 801,578 Peter Kellner, the Chairman of the Company has share options on 379,747 'A' Ordinary Shares at an exercise price of £0.50 per share. These options were granted in 2003 with a 10 year period and can be exercised at any time within that period. Panos Manolopoulos, the Managing Director of the Company, has share options over 226,764 Ordinary Shares at an exercise price of £0.90 per share. The option becomes exercisable in four equal tranches of 56,691 Ordinary Shares. The first tranche became exercisable on 31 December 2004. The other three tranches become exercisable on 31 October 2005, 31 October 2006 and 31 October 2007 respectively. Katherine Lee, the Chief Financial Officer of the Company, has share options over 140,000 Ordinary Shares at an exercise price of £1.70 / £1.475 per share. The option becomes exercisable in four equal tranches of 35,000 Ordinary Shares. The first tranche became exercisable on 31 October 2005. The other three tranches become exercisable on 31 October 2006, 31 October 2007 and 31 October 2008 respectively. 18 Share premium account and reserves The Group Share premium Profit and loss account account £'000 £'000 At 1 August 2005 2,913 701 Retained profit for the year - 2,990 Premium on allotment during the year 30 - Cost of issue of shares - - At 31 July 2006 2,943 3,691 The Company Share premium Profit and loss account account £'000 £'000 At 1 August 2005 2,913 701 Retained profit for the year - 1,137 Premium on allotment during the year 30 - Cost of issue of shares - - At 31 July 2006 2,943 1,838 19 NET CASH FLOW FROM OPERATING ACTIVITIES 2006 2005 £'000 £'000 Net cash inflow from operating activities Operating profit 3,862 961 Depreciation 38 17 (Increase) in debtors (2,930) (263) Increase in creditors 1,926 434 Net cash inflow from operating activities 2,896 1,149 20 Reconciliation of movements in shareholders' funds 2006 2005 £'000 £'000 Profit on ordinary activities after taxation 2,990 691 Dividends - (436) Profit for the financial year 2,990 255 Premium on issue of shares 30 - Net issue of share capital 1 2,732 Repurchase of own share capital - (170) Net increase in shareholders' funds 3,021 2,817 Opening shareholders funds 3,747 930 Closing shareholders funds 6,768 3,747 21 Reconciliation of net cash flow to movement in net debt 2006 2005 £'000 £'000 Increase in cash in the year 1,750 2,819 Repayment of loans - 264 Movement in net cash in the year 1,750 3,083 Net cash at beginning of year 3,796 713 Net cash at end of year 5,546 3,796 22 Acquisition On 30 July 2006 the Group acquired the assets and trade of Siraj Marketing and Research Consultancy (Siraj) for a consideration of £1.3m in cash and deferred consideration. Goodwill arising on the acquisition has been capitalised and will be written off over its useful estimated life. The purchase of Siraj has been accounted for by the acquisition method of accounting. The assets and liabilities of Siraj acquired were as follows: Book value Revaluation Accounting Other Fair value policy adjustments adjustments £'000 £'000 £'000 £'000 £'000 Tangible fixed assets 2 - - - 2 Current assets Debtors 218 - - - 218 Bank and cash 68 - - - 68 Total assets 288 - - - 288 Creditors Other creditors 45 - - - 45 Accruals 92 - - - 92 Total liabilities 137 - - - 137 Net assets 151 - - - 151 Purchased goodwill capitalised 1,171 1,322 Satisfied by: Cash 847 Deferred consideration 475 1,322 The results of Siraj for the period from the beginning of the subsidiary's financial year to the date of acquisition and also the comparative year to 30 September 2005 are as follows: 1 October 2005 Year ended 30 - 30 July 2006 September 2005 £'000 £'000 Turnover 561 349 Operating profit 110 31 Profit before tax 110 31 Profit after tax 110 31 23 Capital commitments Neither the Group nor the Company had any capital commitments at 31 July 2006 or at 31 July 2005. 24 Leasing commitmeNTS Operating lease payments amounting to £102,000 (2005: £55,000) are due within one year. The leases to which these amounts relate expire as follows: 2006 2005 Land and Other Land and Other buildings buildings £'000 £'000 £'000 £'000 In one year or less 47 2 - 2 Between one and five years 53 - 53 - In five years or more - - - - 100 2 53 2 25 Post balance sheet events There have been no significant post balance sheet events. 26 Transactions with directors and other related parties There have been no transactions with directors during the year. During the year sales were made to Endemol UK totalling £19,000. Endemol UK is a company which Peter Bazalgette, a non-executive director of YouGov plc, is a director. The sale was made at arms length and on usual commercial terms. As at 31 July 2006 Endemol UK owed YouGov plc £22,325. During the year goods and services were procured from Hawkshead Limited totalling £35,240. Hawkshead Limited is a company which Peter Bazalgette, a non-executive director of YouGov plc, is a director. The purchases were made at an arms length and on usual commercial terms. As at 31 July 2006 YouGov plc owed Hawkshead Limited £nil. 27 Non statutory financial information The financial information set out in this preliminary announcement does not constitute statutory accounts as defined in section 240 of the Companies Act 1985. The summarised balance sheet at 31 July 2006 and the summarised profit and loss account, summarised cash flow statement and associated notes for the year then ended have been extracted from the Group's financial statements. Those financial statements have not yet been delivered to the Registrar. This information is provided by RNS The company news service from the London Stock Exchange

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