Preliminary Full Year Results

RNS Number : 1684B
YouGov PLC
06 October 2020
 

6 October 2020

 

 

YouGov plc

Preliminary Full Year Results for the year ended 31 July 2020

-Strong performance in line with expectations

-Continued investment in key areas to support longer term growth

-Encouraging start to the next phase of YouGov's growth

 

Summary of Unaudited Results

 

Year to

31 July 2020

£m

Year to

31 July 2019 (restated)3

£m

%

Change

Revenue

152.4

136.5

12%

Adjusted Operating Profit1

21.8

18.5

18%

Adjusted Operating Profit Margin (%)1

14.3%

13.5%

80 bps

Statutory Operating Profit

15.2

20.0

(24%)

Adjusted Profit before Tax1

25.7

20.6

25%

Statutory Profit before Tax

15.2

19.4

(22%)

Adjusted Earnings per Share1

18.1p

15.0p

21%

Statutory Basic Earnings per Share

9.0p

14.1p

(36%)

 

Financial Highlights

· Revenue growth of 12% (2019: 17%) - Underlying business2 growth of 13%

· Adjusted operating profit1 up by 18% to £21.8m (2019: £18.5m) - 14% underlying business2 growth

· Adjusted profit before tax1 up by 25% to £25.7m (2019: £20.6m)

· Adjusted earnings per share1 up by 21% to 18.1p (2019: 15.0p) 

· Adjusted operating profit margin1 rises to 14.3% (2019: 13.5%)

· Statutory operating profit down 24% to £15.2m (2019: £20.0m) due to separately reported items charge of £6.6m

· Strong operating cash generation of £38.7m, enabling us to continue investing in the business

· Net cash balances of £35.3m (31 July 2019: £37.9m)

· Proposed dividend increase of 25% to 5p per share (2019: 4p)

 

Operational Highlights

· Data Products & Services revenue up by 13% to £89.1m (13% from underlying business2); representing 56% of total (2019: 56%)

Data Products revenue increased by 24% (21% from underlying business2) to £51.3m

Data Services revenue increased by 2% (4% from underlying business2) to £37.8m

· Custom Research revenue increased by 8% to £64.6m;

Planned closure of a large-scale project in the Middle East resulted in a 4% decrease in operating profit to £12.6m

· Strong performance in the key markets, the US and UK, driving an increase in adjusted operating profit1 of 18% to £21.8m

· Significant and increased investment of £8.0m (2019: £4.8m) in building the technology platform for future growth

· Number of registered panellists up 37% through broadening geographic footprint as panels established and further developed in 12 countries: Australia, Austria, Brazil, Canada, India, Italy, Mexico, Poland, Spain, Switzerland, Taiwan and Turkey

· Continued focus on the client-centric service provision whilst, ensuring full continuity of service during COVID-19 lockdowns in H2

· The Group's strategic and financial position remains strong and resilient and has not seen a material impact of COVID-19 on its financial performance to date. No employees have been furloughed during the pandemic with no other government support needed

· While some retail clients are delaying their projects or deferring renewal decisions due to the pandemic, YouGov has seen increased opportunity from its technology clients and government work, including on COVID-19 and health-related issues

· Launched YouGov America, a website focussed on the US Presidential Election and a hub for polls being run in conjunction with major US media outlets

· Continued progress in the development and rollout of YouGov Direct, a blockchain-based audience insights platform, with positive initial feedback from clients

 

Outlook

· Trading in the current year has started in line with the Board's expectations

· While we have not seen any material impact from the COVID-19 pandemic thus far, we recognise that marketing budgets may come under pressure if the current situation prolongs

 

 

1 Defined in the explanation of non-IFRS measures below.

2 Defined as growth in business excluding impact of current and prior period acquisitions and business closures, and movement in exchange rates .

3 Prior year comparatives have been restated on the adoption of IFRS 16.

 

 

Stephan Shakespeare, Chief Executive Officer, said:

 

"We have made good strategic progress in the year with the UK and US continuing to be our key revenue and profit drivers. Our strong performance against the backdrop of a highly challenging market in the second half of our financial year was down to the hard work of our people and trust of our clients who more than ever need actionable, accurate and timely data from which to make informed decisions as they navigate through the current situation. Our positive results together with sustained cash generation have enabled us to continue our progressive dividend policy with a proposed overall dividend increase of 25% to 5 pence a share.

Having demonstrated the resilience of our business model in the past year, we believe that YouGov is well positioned to continue the progress made on our strategic pillars and to evolve into a true activation platform with capabilities beyond market research. We are on track to deliver in line with our long-term strategic growth plan and trading since the end of the financial year has been in line with the Board's expectations."   

 

Enquiries:

 

YouGov plc

Stephan Shakespeare / Alex McIntosh / Hannah Jethwani

 

020 7012 6000

FTI Consulting

Charles Palmer / Elena Kalinskaya

 

020 3727 1000

Numis Securities Limited (NOMAD and broker)

Nick Westlake / Matt Lewis / Hugo Rubinstein

 

020 7260 1000

 

About YouGov

YouGov is an international research and data analytics group.

Our mission is to supply a continuous stream of accurate data into what the world thinks, so that organisations can better serve the communities that sustain them.

Each day, our proprietary global panel of over 11 million registered members provides us with thousands of data points on consumer opinions, attitudes and behaviour. We combine this continuous stream of data with our research expertise to provide insights that enable intelligent decision-making and informed conversations.

YouGov's integrated suite of products, services and tools operates as a systematic platform serving YouGov data and intelligence for all stages of the marketing workflow. Our ground-breaking syndicated Data Products include the daily brand perception tracker, YouGov BrandIndex, and the media planning and segmentation tool, YouGov Profiles. Data Services comprises our market-leading YouGov RealTime service which provides a fast and cost-effective solution for reaching nationally representative and specialist samples. YouGov's Custom Research division offers a wide range of quantitative and qualitative research, tailored by sector specialist teams to meet clients' specific requirements. Our YouGov Sport business specialises in sports media measurement and sponsorship evaluation.

With operations in the UK, Americas, Mainland Europe, Middle East, India and Asia Pacific, YouGov has one of the world's largest research networks.

YouGov

Best panel
Best data
Best tools

For further information visit yougov.com.

 

 

Chair's Statement

 

YouGov is an international data and analytics group. We provide our clients with the data and insights to help them plan, develop and evaluate the impact of their marketing and communication activities. We now employ over 1,100 people worldwide, operating from 37 offices across 24 countries and serving clients in more than 40 national markets. We operate a proprietary, high quality global panel of over 11 million registered members who share their data with us in ways that are fully compliant with data protection, privacy and security laws.

 

The scale and duration of the COVID-19 pandemic is presenting a huge social and economic challenge. Against this backdrop in the second half of our financial year, I am pleased to report to shareholders that YouGov was able to meet the Board's expectations and deliver strong financial performance in the year to 31 July 2020. We took rapid and agile action to ensure the safety and wellbeing of our employees. We have done extensive research on behalf of governments to understand people's reaction to COVID-19 and we have made much of this information available free of charge as a public service.

 

Results and dividend

 

Group revenues were up 12% in reported terms to £152.4m (13% up on underlying1 business) while adjusted operating profit2 increased by 18% on the prior financial year to £21.8m. These results reflect an encouraging start to the next phase of YouGov's growth. YouGov has a progressive dividend policy and in line with this the Board is pleased to recommend a dividend increase of 25% to 5.0 pence a share payable on 14 December 2020 to shareholders on the register as at 4 December 2020.

 

Outlook

 

The social and economic problems caused by the pandemic are far from over but in terms of our financial performance, YouGov has started the new financial year well and trading is in line with the Board's expectations. With a very strong balance sheet and evidence of growing demand for our products, we remain confident of meeting our long-term targets.

 

Strategic direction

 

The YouGov client base now spans a wide range of commercial and governmental clients in most of the world's major markets. We provide our clients with insights to enable them to carry out their work more effectively. We do this by delivering research and proprietary software tools which interpret and display the data gathered from our proprietary global panel of over 11 million registered members. Increasingly, our clients engage with us on a subscription basis which allows them to enjoy a highly flexible and tailored real-time service.

 

Our strategy is to seek long-term contractual relationships and to become a crucial part of our clients' business processes to enable them to plan their use of resources and to monitor the results of their activity.

 

Long-term growth plans and incentives

 

The financial year to 31 July 2020 was the first full year of our current long-term strategic growth plan ("FYP2"). The financial results for the year to 31 July 2019 set the base line for the Board approved targets for the FYP2 period (which runs from 1 August 2019 to 31 July 2023) to double Group revenue, double adjusted operating profit margin2, and achieve compound annual adjusted earnings per share2 ("EPS") growth in excess of 30%.

 

These stretching FYP2 targets underpin the current long-term incentive plan ("LTIP 2019"), which was approved by the Board in 2019 following a thorough design process supported by remuneration experts at Aon and in consultation with the Company's major shareholders. The Board believes the LTIP 2019 design produces close alignment between shareholder and management interests, with full vesting of the LTIP 2019 requiring compound annual adjusted EPS2 growth of 35% by 2023. The Company's previous long-term growth plan, FYP1, delivered compound annual adjusted EPS2 growth in excess of 25% over 2014-19, resulting in the full pay-out of the LTIP 2014 awards in November 2019.

 

Clearly the COVID-19 crisis creates considerable uncertainty but based on the experience of trading in the second half of the last financial year (1 February to 31 July 2020) the Board believes the YouGov business model is well placed to provide value to our clients and therefore that the targets of FYP2 remain reasonable and achievable.

 

Board composition

 

The Board consists of three Executive Directors and four independent Non-Executives. All appointments have been made following external advice. The Directors have a wide range of commercial expertise, and we believe the Board has the right balance of skills and experience to provide robust oversight and develop a well-informed strategy. While there are no immediate plans to make changes to the Board composition, we have a detailed succession planning process in place.

 

20 years of growth

YouGov celebrates its 20th anniversary in 2020.  It is two decades since Stephan Shakespeare and Nadhim Zahawi founded the Company as a pioneer of the then ground-breaking use of the internet to do market research. Since that time, many other players have come to use the internet for data collection, but we believe we have maintained our pioneering lead in terms of data analytics methodology and technology, and the curation of a proprietary global panel which is fully compliant with data privacy and security legislation.

 

YouGov has thrived by having the right products and through constant innovation. But the strategy only works because it is executed well by YouGov's management and wider workforce. This past year has been immensely challenging for our employees and on behalf of the Board I would like to thank the YouGov team for their flexibility, commitment and hard work.

 

 

Roger Parry CBE

Chair

6 October 2020

 

 

1 Defined as growth in business excluding impact of current and prior period acquisitions and business closures, and movement in exchange rates.

2 Defined in the explanation of non-IFRS measures below.

 

 

 

Chief Executive Officer's Review

 

We continue to grow strongly with 12% revenue growth and 18% increase in adjusted operating profit1. This has been achieved despite undergoing an operational shift to a new client management model, as anticipated in our strategic plan, and the expected closing of our Kurdistan operations, as well as headwinds from the COVID-19 pandemic in the second half of our financial year. We were able to mitigate some of the early impacts of the pandemic by rapidly developing and delivering the global YouGov COVID-19 Tracker that engaged existing and new clients. The ability of our business model, to drive innovations quickly in response to market changes, gives us confidence that we will continue to outperform our competitors as demonstrated by our above market growth in 2019 (ESOMAR estimates that the market research industry grew 3.9% in 20192).

 

Based on our performance, our confidence in the outlook for the business and our ability to fund growth without the need for government COVID-19 support funding, we are comfortable with continuing our progressive annual dividend policy and recommending a dividend of 5.0 pence per share for the year ended 31 July 2020.

 

The key factors driving our continued strong growth are:

· robust performance of our two main geographies, the US and the UK, where we continue to focus our efforts and investments;

· full integration of YouGov Sport, which is expanding our client coverage beyond traditional sports products and contributing to sales performance; and

· panel growth in line with client demand as global Cube-aligned trackers become an increasingly important part of our offering.

 

We are beginning to appeal to a wider market as innovations in technology, such as YouGov Chat, self-service and ethical activation through YouGov Direct, broaden our offering to an activation platform with capabilities beyond market research.

 

The dynamics within the data analytics and market research industry are constantly evolving as increasing digitalisation, the use of artificial intelligence to gather data and scrutiny on privacy and transparency are opening up opportunities beyond traditional use cases.

 

Furthermore, the COVID-19 pandemic presented a unique challenge for traditional research players, hampering their ability to conduct day-to-day operations and deliver on client projects. The qualities of YouGov's digital business model came to the fore during this crisis as we were able to quickly adapt and remain relevant to our clients with our suite of COVID-19 products.

 

Strategic direction - current long-term strategic growth plan ("FYP2")

 

Our ambition is to be seen as the world's leading provider and innovator in data-led marketing and research. The cornerstone of this ambition is having the world's largest and most engaged panel, allowing us to be the leading supplier of proprietary panel data, used by every public-facing organisation and by hundreds of millions of people as a public information resource. Over time, we would like to extend our offer to an end-to-end platform that goes beyond supplying research data and analytics, all the way through to ethical large-scale activation using that data.

 

The year to 31 July 2020 was the first year in our current long-term growth plan and execution has been in line with our expectations set out in the plan. As previously announced, the ambitious long-term incentive plan ("LTIP") performance targets to incentivise senior management through to 2023 are:

· double Group revenue;

· double Group adjusted operating profit margin1; and

· achieve an adjusted earnings per share1 compound annual growth rate in excess of 30%.

 

As previously disclosed, we have designated the first half of the long-term growth plan as the investment phase. In this phase we are continuing to invest in our panels, technologies, platforms, support functions and markets to enable us to scale further and make the most of the opportunities we see in our markets. To take this performance to the next level, we are continuing to focus on three strategic pillars: Data Integration, Ethical Activation and Public Data.

 

Execution against our strategy to drive future growth

Data Integration

 

Strategic focus: Fully integrating custom research and client service with our data products and tools to create new value from existing data and open up new revenue streams through customisation

 

· Progress made against this pillar during the year:

Productised YouGov Cube-aligned custom trackers (e.g. customer satisfaction, NPS® diagnostics, reputation, product usage and attitude)through collaboration between the Custom Research and Data Product divisions

Added new sector-specific data to the YouGov Cube to enable efficient connected-data custom trackers 

Commenced restructuring of the client support function from separate teams for each division to a single client service flow 

Further developed the YouGov Crunch dashboard tools to include added functionality

Launched self-service functions within YouGov Direct with a view to combining it with the YouGov Collaborate dashboard 

Continued investment in integration of websites, apps, interfaces and dashboards 

 

Ethical Activation

 

Strategic focus: Enabling marketing activation on our platform with a focus on personal data protection and self-service research

 

· Progress made against this pillar during the year:

Launched an early release version of YouGov Direct to a small number of clients, including blue-chip companies

§ Developed a fully functioning end-to-end self-service platform with dual capabilities, research and an advertising network

§ Launched the platform in the US, UK and Canada, with further planned launches in Singapore and Australia before the end of the year

§ Established a rapidly growing, engaged member base allowing clients to receive same-day survey results

 

Public Data

 

Strategic focus: Expanding YouGov Public Data as a public service, for brand reputation, panel engagement and showcasing our data

 

· Progress made against this pillar during the year:

Expanded YouGov Ratings into new categories, such as Influencers and Movies, and developed new categories of data, such as political and social topics, primarily intended for public value

Launched YouGov America, a website focussed on the US Presidential Election and a hub for polls being run in conjunction with major US media outlets

Developed and launched the YouGov COVID-19 Behaviour Tracker developed in partnership with Imperial College London to benefit public health and academic institutions globally

Released a beta version of the YouGov Screen publicly to allow visitors to view snippets of our data

 

Focus on operations

 

As a platform, both in the technological sense and the business-model sense, we aim to be more efficient, smarter, faster, and 24/7. During the year, we expanded the geographic coverage of our shared service centres (called Centres of Excellence or CenX) and transformed their role from traditional client support to an always-on help desk for our syndicated products and self-service platform, with the ability to launch custom surveys at any time. In addition to this we have kicked off our new global key account management programme in the US and UK to become more client-centric and expand our role in their marketing efforts.

 

We have continued to expand the geographic range of panels to Austria, Brazil, Switzerland and Turkey and to further develop our panels in other geographies in the year, driven in part by client demand. 

 

COVID-19 response
 

The COVID-19 pandemic has caused severe disruption globally and impacted all our stakeholder groups to varying degrees. We took widespread measures to support these stakeholders while minimising the impact on our business.

 

We evaluated payment delay and cancellation requests from clients on a case-by-case basis and supported them where possible.

 

We moved our entire global workforce to working remotely at the start of the global lockdown in March 2020 and did not furlough any employees. As offices have reopened in some cities, we have taken extensive measures to ensure the safety of our employees and phased our return-to-office plans to ensure a smooth and safe transition. The majority of our staff continue to operate seamlessly from home and we are continuing to support individual circumstances as the situation evolves in our various markets.

 

The YouGov management team would like to thank all our employees for supporting our clients and the business through these uncertain times and we look forward to celebrating our 20th anniversary with everyone in the coming year.

 

Environmental social and governance (ESG)

 

Our commitment to ESG is core to what we do. We operate lawfully and ethically in all areas of ESG relevant to our business, from how we collect data from panellists, and how we engage and develop our workforce, to the design of our research and how we service our clients.

 

Our environmental footprint is minimal given our digital business model, and we generally have limited business travel. However, we are keen on conducting accurate reporting and finding ways to reduce our environmental impact where we can.

 

We are also committed to having a positive impact on society, by keeping our employees engaged and giving them opportunities to grow with the business. An example of this has been supporting our employees with the setting up of an internal Diversity, Equity & Inclusion Task Force, as a way to give a voice to our workforce around how to make YouGov more diverse and inclusive, across everything that we do. This Task Force has conducted a Company-wide survey and run a set of focus groups with employees to canvas the opinions of our staff in order to identify a set of actions that will help us make YouGov even more diverse and inclusive for all our stakeholders.

 

Governance also has a key role in our strategic plan. It allows us to safeguard all the valuable data that we collect from panellists daily, through the governance frameworks that we have in place. We take our position as custodian of our panellists' data very seriously. We believe YouGov Direct is an example of good governance in the field of ethical activation, fully in line with the EU General Data Protection Regulation ("GDPR") and other data privacy and national security laws. We are fully dedicated to adopting appropriate social ethics and the way to achieve that is to ensure governance frameworks and processes are in place and are regularly reviewed and updated to remain relevant.

 

Current trading and outlook

 

Trading continues to be in line with the Board's expectations for the current financial year. Despite economic uncertainty over the past six months, performance across the Group continues to be resilient, delivering growth in both revenue and profit for the full year. While we have not seen any material impact from the COVID-19 pandemic thus far, we recognise that marketing budgets may come under pressure if the current situation prolongs. As such, we are closely monitoring the situation and ensuring that we remain relevant to our clients through our advanced data, analytics and technological capabilities. We have maintained our strong balance sheet position which will allow us to continue to fund our FYP2 strategic growth plan through sufficient cash reserves.

 

We thank all our panellists, partners and clients, and employees, for their ongoing contribution and commitment to YouGov's ongoing success in these challenging times.

 

 

Stephan Shakespeare

Chief Executive Officer

6 October 2020

 

1 Defined in the explanation of non-IFRS measures below.

2 According to the ESOMAR Global Market Research Report published in September 2020, global research market turnover grew by 3.9% in 2019 (adjusted for inflation).

 

 

Chief Financial Officer's Review

 

The Group achieved continued growth in the 12 months to 31 July 2020 whilst executing towards its current long-term strategic growth plan which ends 31 July 2023. The financial year continued to be a year of investment in key areas to support longer term growth.

Total Group revenue in the period rose to £152.4m, compared to £136.5m in the 12 months to 31 July 2020. Growth was 13% on an underlying1 basis since the prior period (but 12% in reported terms due to the planned closure of a large project in the Middle East offset by the depreciation of UK Sterling against the US Dollar and additional revenue generated by acquisitions in the period and prior period).

Adjusted operating margins and organic growth

 

In line with our stated strategy of a higher proportion of sales coming from higher margin products and services, gross margins increased by 3% points. Adjusted operating margins2 increased to 14.3% despite increased investment in staff costs and increased amortisation from technology and panel investments.

 

Group operating costs (excluding separately reported items) of £107.2m (2019: £93.8m) increased by 14% in reported terms, and 14% in constant currency terms. Group adjusted operating profit2 (before separately reported items) increased to £21.8m (18% growth in the period) with strong continued growth in Data Products. The statutory operating profit, after charging other separately reported items amounting to £6.6m (2019: £1.5m credit) relating to acquisition costs £4.5m and an impairment charge relating to our Nordic business of £2.1m, decreased to £15.2m (2019: £20.0m).

 

Performance by division

 

YouGov's lines of business fall into three divisions: Data Products, Data Services and Custom Research.

 

Data Products

 

Our syndicated data products include YouGov BrandIndex, YouGov Profiles and YouGov SportsIndex. YouGov Plan & Track (the combined BrandIndex and Profiles proposition) is available in 24 countries (2019: 21). BrandIndex alone is available in 42 countries, while SportsIndex is available in 38 countries.

 

The performance of our Data Products division has contributed significantly to our Group revenue and adjusted operating profit2. Revenue from Data Products increased by 24% (21% growth in underlying business2) in the period. The adjusted operating profit2 from Data Products increased by 26% to £18.0m and the operating margin increased by 70 basis points to 35.0%. The improving margin reflects the operational leverage of Data Products which benefit from technology for data collection and product delivery as well as our proprietary data.

 

Geographically, the US remains the largest Data Products market and grew by 26% in in the period  (23% from the underlying business2). The UK, Mainland Europe and Asia Pacific also contributed strong revenue growth of 21%, 16% and 22% respectively.

 

Data Services

 

Our Data Services division consists of our fast-turnaround research services, including our market-leading YouGov Omnibus (now known as YouGov RealTime in the UK and US).

 

In the year, revenue from Data Services increased by 2% (4% in underlying terms after adjusting for acquisitions, foreign exchange and reallocated revenue from the Custom Research division) to £37.8m. The focus on the US market and further territorial expansion has helped the division expand the revenue base beyond the core UK market. This revenue growth was offset by an increase in allocations of central costs which contributed to a decrease of 6% in the Data Services operating profit to £7.0m and the operating margin declined from 20.0% to 18.4%. The division's operating margin was also impacted by the full-year effect of the planned transferring of lower margin project work from the Custom Research division in the Nordics in FY19.

 

Overall Data Services revenue growth included an 8% increase in reported revenue in the US (5% increase in underlying terms2), and a 9% decrease in Asia Pacific due to non-recurring election work (4% decrease in underlying terms2). Mainland Europe also grew by 3%. In the UK, where YouGov Omnibus is the market leader, revenue grew by 7%. 

 

Custom Research

 

Our Custom Research division includes tailored research projects and tracking studies.

 

The performance of the Custom Research was impacted by the expected closure of operations in Kurdistan resulting in a £2.1m (30%) reduction in revenue in the Middle East. In the UK, revenue increased by 15% to £22.2m and revenue in the US also increased by 11% (9% increase in underlying terms2) to £33.0m. 

 

During the period, the business revenue grew by 8% in reported terms and by 12% in underlying2 terms to £64.6m. However, the adjusted operating profit2 decreased by 4% to £12.6m and the operating margin declined by 240 basis points to 19.5%. This was largely due to the closure of the Kurdistan business and the increase in central cost allocations.

 

Revenue

Year to

31 July 2020

£m

Year to

31 July 2019

£m

Revenue growth

%

Underlying business2 

revenue change %

Data Products

51.3

41.5

24%

21%

Data Services

37.8

37.2

2%

4%

Total Data Products & Services

89.1

78.7

13%

13%

Custom Research

64.6

60.0

8%

12%

Intra-Group Revenues

(1.3)

(2.2)

-

-

Group

152.4

136.5

12%

13%

 

Adjusted Operating Profit2

 

 

Year to

31 July 2020

£m

Year to

31 July 2019 (restated)3

£m

Operating

Profit growth

%

Operating Margin %

Year to

31 July 2020

Year to

31 July 2019

Data Products

18.0

14.2

26%

35.0%

34.3%

Data Services

7.0

7.5

(6%)

18.4%

20.0%

Total Data Products & Services

25.0

21.7

15%

28.0%

27.6%

Custom Research

12.6

13.1

(4%)

19.5%

21.9%

Central Costs

(15.8)

(16.3)

(3%)

-

-

Group

21.8

18.5

18%

14.3%

13.5%

 

 

Performance by geography

 

YouGov's geographic footprint spans the UK, Mainland Europe, the Americas, Asia Pacific and the Middle East.

 

Revenue

Year to

31 July 2020

£m

Year to

31 July 2019

£m

Revenue

growth

%

Underlying business2

revenue

change %

UK

47.2

41.2

15%

15%

Americas

64.8

56.4

17%

13%

Mainland Europe

24.3

23.9

2%

3%

Middle East

8.8

10.5

(17%)

20%

Asia Pacific

12.5

11.3

10%

11%

Intra-Group Revenues

(5.2)

(6.8)

-

-

Group 

152.4

136.5

12%

13%

 

Adjusted Operating Profit2

Year to

31 July 2020

£m

Year to

31 Jul 2019 (restated)3

£m

Operating

Profit growth

%

Operating Margin %

Year to

31 July 2020

Year to

31 July 2019

UK

15.4

11.7

32%

32.6%

28.5%

Americas

19.0

16.8

13%

29.3%

29.8%

Mainland Europe

2.2

2.9

(24%)

9.1%

12.3%

Middle East

1.9

3.3

(42%)

21.9%

30.9%

Asia Pacific

0.3

0.2

50%

2.2%

1.6%

Central Costs

(17.0)

(16.4)

4%

-

-

Group

21.8

18.5

18%

14.3%

13.5%

 

 

Panel development by geography

 

We continue to invest in our consumer panel to increase our research capabilities, both in new geographies and specialist panels. At 31 July 2020, the total number of registered panellists had increased to 11.5 million, compared to 8.4 million at 31 July 2019, as set out in the table below. During the year, the Group invested in expanding our geographic capability to Austria, Brazil, Switzerland and Turkey.

 

 

Region

Panel size at

31 July 2020

millions

Panel size at

31 July 2019

millions

Change

%

UK

1.83

1.63

12%

Americas

4.21

3.17

33%

Mainland Europe

1.92

1.21

59%

Middle East

1.58

1.06

48%

Asia Pacific

1.92

1.30

48%

Total

11.46

8.37

37%

 

 

Group financial performance

 

Amortisation of intangible assets

 

In the 12 months to 31 July 2020 amortisation charges for intangible assets of £10.8m were £2.0m higher than the previous year. Amortisation of the consumer panel increased by £1.0m to £4.2m reflecting the additional investment made to grow the panel in the past three years. Amortisation of software increased by £1.0m to £6.0m. £4.9m (2019: £4.6m) of the total software development charge related to assets created through the Group's own internal development activities, £0.3m (2019: £0.3m) related to separately acquired assets and £0.9m (2019: £0.1m) was for amortisation on assets acquired through business combinations.

 

Separately reported items

 

 

Year to 31 July 2020 £m

Year to 31 July 2019 £m

Goodwill Impairment

2.1

-

Restructuring Costs

-

  0.2 

Acquisition-Related Costs

4.5

  0.4

Fair-Value Movements

-

(2.1)

Total Separately Reported Items

6.6

(1.5)

 

Goodwill impairment in the year is in respect of the Nordic business.

 

Acquisition related costs in the year comprise: £3.6m of contingent consideration treated as staff costs in respect of the acquisitions of Galaxy Research Pty Ltd, SMG Insights Limited, InConversation Media Limited and Portent.io Limited, a £0.2m increase in contingent consideration payable in respect of the acquisitions of SMG Insight Limited and Portent.io Limited and a £0.7m reduction in the fair value of the acquired SMG Insight Limited net assets. 

 

Restructuring costs in the prior year are residual cost incurred in respect of the restructuring of the Custom Research business in Mainland Europe and the Middle East and the closure of the Reports business. 

 

Acquisition related costs in the prior year comprise: £2.8m of contingent consideration treated as staff costs in respect of the acquisitions of Galaxy Research Pty Ltd, InConversation Media Limited and Portent.io Limited and £0.8m of transaction costs in respect of the acquisitions made in the year, £0.2m of which is contingent less a reduction in expected SMG contingent consideration of £3.2m. 

 

Fair value gains in the prior year comprise: a £1.9m increase in the fair value assessment of the Group's 20% shareholding in SMG Insight Limited prior to acquisition and a bargain purchase gain, net of a fair value loss, in respect of the acquisition of Portent.io Limited of £0.2m.

  

 

Analysis of operating profit and earnings per share

Adjusted profit before tax2 of £25.7m was an increase of £5.1m (25%) on the comparable result of £20.6m for the 12 months to 31 July 2019. The adjusted tax rate2 reduced to 24% from 26% in the prior year. Statutory profit before tax of £15.2m was reported compared to £19.4m in the year ended 31 Jul 2019, a decrease of 22%.

 

During the period adjusted earnings per share2 grew by 21% from 15.0p to 18.1p and statutory earnings per share decreased by 36% from 14.1p to 9.0p.

 

 

31 July

31 July

 

2020

2019 (restated)3

 

£m

£m

Adjusted operating profit2

21.8

18.5

Share-based payments

2.8

2.4

Social taxes payable on share-based payments

0.9

0.2

Imputed interest

0.1

0.2

Net finance expense

-

(0.6)

Share of post-tax profit in associates

-

(0.1)

Adjusted profit before tax2

25.7

20.6

Adjusted taxation2

(6.5)

(5.4)

Adjusted profit after tax2

19.1

15.2

Adjusted earnings per share (pence)2

18.1p

15.0p

 

 

Cash flow, capital expenditure and technology investment

 

The Group generated £38.7m (2019: £38.4m) in cash from operations (before paying interest and tax) including a £0.2m (2019: £6.0m) net working capital inflow; the cash conversion rate (percentage of adjusted EBITDA2 converted to cash) decreased from 121% to 104% of adjusted EBITDA2.

 

The Group invested £8.0m (2019: £4.8m) in the continuing development of our technology platform and increased the investment in panel recruitment to £8.9m (2019: £4.0m) for the year to support continued global expansion. The geographic footprint of our panel was broadened as new panels were established in Austria, Brazil, Switzerland and Turkey and investments were made to further strengthen our panels in Australia, Canada, India, Italy, Mexico, Poland, Spain and Taiwan. Our investment in technology continued across three main areas: websites and mobile applications £1.1m, survey systems £3.8m, and £3.1m on our Crunch data analytics tool. £0.7m (2019: £0.7m) was also invested on separately-acquired software tools. In addition £1.1m (2019: £2.7m) was spent on the purchase of property, plant and equipment, resulting in a total investment in fixed assets of £18.7m (2019: £12.2m).

 

 

Total expenditure on intangible assets and property, plant and equipment is shown below:

 

 

31 July

31 July

 

2020

2019

 

£m

£m

Internally generated software

8.0

4.8

Panel recruitment

8.9

4.0

Other intangible assets

0.7

0.7

Total expenditure on intangible assets

17.6

9.5

Purchase of property, plant and equipment

1.1

2.7

Total capital expenditure

18.7

12.2

 

Other cash outflows included £7.5m (2019: £4.5m) in settlement of deferred consideration amounts due in respect of the acquisitions of SMG Insight and Galaxy Research and taxation payments of £3.1m (2019: £4.5m).

 

Net expenditure on financing activities of £9.7m (2019: 9.7m) included the dividend payment of £4.3m (2019: £3.2m), the purchase of treasury shares for £2.4m (2019: £3.7m) and lease payments of £3.1m (2019: £2.8m).

 

Net cash balances at the year-end decreased by £2.6m to £35.3m. Net cash outflow in the year was £0.3m (2019: £5.2m inflow) and currency fluctuations in the year resulted in an exchange loss of £2.4m (2019: £2.1m gain).

Currency

The Group's results were affected by the net depreciation of UK Sterling as its average exchange rate was 2% lower against the US Dollar in this period than in the 12 months to 31 July 2019. Movement against the Euro was effectively flat for the period. The net impact of foreign exchange on the Group's adjusted operating profit growth2 was an increase of £0.3m compared to calculation in constant currency terms.

 

Balance sheet

As at 31 July 2020, total shareholder's funds increased from £108.0m to £110.0m. Net assets increased from £107.4m to £109.3m, with a minority interest of £0.7m accounting for the difference. Net current assets decreased from £21.2m to £17.4m. Current assets decreased by £2.3m to £70.3m, mainly due to a £2.6m reduction in cash balances, with debtor days increasing from 47 to 48. Current liabilities increased by £1.4m to £52.8m, mainly due to an increase in provisions by £1.8m and tax liabilities by £0.9m offset by a £1.6m reduction in trade and other payables, with creditor days decreasing from 24 days to 19 days at 31 July 2020. Non-current liabilities decreased by £6.1m to £16.2m with a reduction of £4.3m of contingent consideration payable in respect of acquisitions.

 

Proposed dividend

 

The Board is recommending the payment of a final dividend of 5.0 pence per share for the year ended 31 July 2020. If shareholders approve this dividend at the AGM (scheduled for 10 December 2020), it will be paid on Monday 14 December 2020 to all shareholders who were on the Register of Members at close of business on Friday 4 December 2020.

 

 

Alex McIntosh

Chief Financial Officer

6 October 2020

 

 

1 Defined as growth in business excluding impact of current and prior period acquisitions and business closures, and movement in exchange rates.

2 Defined in the explanation of non-IFRS measures below.

3 Prior year comparatives have been restated on the adoption of IFRS 16.

 

 

 

 

Explanation of non-IFRS measures

 

Financial measure

How we define it

Why we use it

Separately reported items

Items that in the Directors' judgement are one-off or need to be disclosed separately by virtue of their size or incidence

Provides a more comparable basis to assess the year-to-year operational business performance

Adjusted operating profit

Operating profit excluding separately reported items

 

Adjusted operating profit margin

Adjusted operating profit expressed as a percentage of revenue

 

Adjusted EBITDA

Adjusted operating profit before depreciation and amortisation

 

Adjusted profit before tax

Profit before tax before share based payment charges, social taxes on share based payments, imputed interest and separately reported items

 

Adjusted taxation

Taxation due on the adjusted profit before tax, thus excluding the tax effect of amortisation and exceptional items

Provides a more comparable basis to assess the underlying tax rate 

 

Adjusted tax rate

Adjusted taxation expressed as a percentage of adjusted profit before tax

 

Adjusted profit after tax

Adjusted profit before tax less adjusted taxation

 

Facilitates performance evaluation, individually and relative to other companies

Adjusted profit after tax attributable to owners of the parent

Adjusted profit after tax less profit attributable to non-controlling interests

 

Adjusted earnings per share

Adjusted profit after 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 revenue change

Current year revenue change compared to prior year revenue in local currency translated at the current year average exchange rates

 

Shows the underlying revenue change by eliminating the impact of foreign exchange rate movements

Cash conversion

The ratio of cash generated from operations to adjusted operating profit

 

Indicates the extent to which the business generates cash from adjusted operating profits

 

 

Reconciliation of non-IFRS measures

Adjusted Operating Profit1 reconciliation

Year to

31 July 2020

£m

Year to

31 July 2019

£m

Change

%

Statutory Operating Profit

15.2

20.0

(24%)

Separately Reported Items

6.6

(1.5)

N/A

Adjusted Operating Profit

21.8

18.5

18%

 

 

 

 

 

Adjusted EBITDA1 reconciliation

Year to

31 July 2020

£m

Year to

31 July 2019

£m

Change

%Change

Adjusted Operating Profit

21.8

18.5

18%

Depreciation

4.5

4.4

2%

Amortisation

10.8

8.8

22%

Adjusted EBITDA

37.1

31.7

17%

1 Defined in the explanation of non-IFRS measures above.

 

 

 

 

 

Publication of Non-Statutory Accounts

 

The unaudited financial information relating to the year ended 31 July 2020 set out below does not constitute the Group's statutory accounts for that year but has been extracted from the statutory accounts, which have not yet been filed with the Registrar.

 

 

YOUGOV PLC

UNAUDITED CONSOLIDATED income statement

For the year ended 31 July 2020

 

 

 

 

 

Note

 

2020

 

  £'000

 

2019 (Restated1)

  £'000

 

Revenue

1

152,441

136,487

 

Cost of sales

 

(23,374)

(24,206)

 

Gross profit

 

129,067

112,281

 

Administrative expenses

 

(113,867)

(92,260)

 

Operating profit

1

15,200

20,021

 

Separately reported items

2

6,630

 (1,529)

 

Adjusted operating profit

1

21,830

18,492

 

Finance income

 

433

255

 

Finance costs

 

(426)

(869)

 

Share of post-tax result/(loss) of associates

 

-

(52)

 

Profit before taxation

 

1

15,207

19,355

 

Taxation

3

(5,812)

(5,085)

 

Profit after taxation

1

9,395

14,270

 

Attributable to:

 

 

 

 

- Owners of the parent

 

9,558

14,869

 

- Non-controlling interests

 

(163)

(599)

 

 

 

9,395

14,270

 

Earnings per share

 

 

 

 

Basic earnings per share attributable to owners of the parent

5

9.0p

14.1p

 

Diluted earnings per share attributable to owners of the parent

5

8.5p

13.1p

 

 

1. The prior period results have been restated for IFRS 16 "Leases".

All operations are continuing.

 

 

 

YOUGOV PLC

UNAUDITED Consolidated Statement of Comprehensive Income

For the year ended 31 July 2020     

 

 

 

 

2020

 

£'000

 

2019

(restated1)

£'000

Profit for the year

 

9,395

14,270

Other comprehensive (expense)/income:

 

 

 

Items that may be subsequently reclassified to profit or loss

 

 

 

Currency translation differences

 

(4,776)

4,892

Other comprehensive (expense)/income for the year

 

(4,776)

4,892

Total comprehensive income for the year

 

4,619

19,162

Attributable to:

 

 

 

- Owners of the parent

 

4,780

19,761

- Non-controlling interests

 

(161)

(599)

Total comprehensive income for the year

 

4,619

19,162

 1. The prior period results have been restated for IFRS 16 "Leases".

 

Items in the statement above are disclosed net of tax. 

 

 

YOUGOV PLC

UNAUDITED Consolidated Statement of FINANCIAL POSITION

For the year ended 31 July 2020 

 

 

 

 

Note

2020

 

£'000

2019 (restated1)

£'000

2018

(restated1)

£'000

Assets

 

 

 

 

Non-current assets

 

 

 

 

Goodwill

6

61,455

65,637

52,060

Other intangible assets

7

23,156

16,737

13,297

Property, plant and equipment

 

3,631

4,424

3,037

Right of use assets

8

8,891

10,529

5,420

Investments in associates

 

-

-

191

Deferred tax assets

 

10,959

11,208

9,620

Total non-current assets

 

108,092

108,535

83,625

Current assets

 

 

 

 

Trade and other receivables

34,239

33,726

33,586

Current tax assets

 

707

930

1,442

Cash and cash equivalents

 

35,309

37,925

30,621

Total current assets

 

70,255

72,581

65,649

Total assets

 

178,347

181,116

149,274

Liabilities

 

 

 

 

Current liabilities

 

 

 

 

Trade and other payables

10

38,482

40,041

34,839

Current tax liabilities

 

1,673

740

1,247

Contingent consideration

 

3,428

2,791

1,409

Provisions

 

6,739

4,931

3,791

Lease liabilities

 

2,491

2,891

2,151

Total current liabilities

 

52,813

51,394

43,437

Net current assets

 

17,442

21,187

22,212

Non-current liabilities

 

 

 

 

Contingent consideration

 

3,020

7,279

5,110

Provisions

 

4,606

4,623

4,000

Lease liabilities

 

6,854

8,217

3,652

Deferred tax liabilities

 

1,716

2,158

2,128

Total non-current liabilities

 

16,196

22,277

14,890

Total liabilities

 

69,039

73,671

58,327

Net assets

 

109,338

107,445

90,947

Equity

 

 

 

 

Issued share capital

 

217

211

211

Share premium

 

31,380

31,345

31,300

Treasury reserve

 

(1,700)

(3,738)

-

Merger reserve

 

9,239

9,239

9,239

Foreign exchange reserve

 

15,145

19,923

15,031

Retained earnings

 

55,776

51,023

35,166

Total equity attributable to owners of the parent

 

110,057

108,003

90,947

Non-controlling interests in equity

 

(719)

(558)

-

Total equity

 

109,338

107,445

90,947

 

1. The prior period results have been restated for IFRS 16 "Leases".

 

 

YOUGOV PLC

UNAUDITED STATEMENT OF CHANGES IN EQUITY

For the year ended 31 July 2020

 

 

 

Attributable to equity holders of the company

 

 

 

 

Issued share capital

Share premium

Treasury reserve

Merger reserve

Foreign exchange reserve

Retained earnings

Equity attributable to owners of the parent

Non controlling interests in equity

Total

 

 

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

Balance at 1 August 2018 as reported

 

211

31,300

-

9,239

15,031

35,549

91,330

-

91,330

Change in accounting policy1

 

-

-

-

-

-

(383)

(383)

-

(383)

Restated total equity at 1 August 2018

 

211

31,300

-

9,239

15,031

35,166

90,947

-

90,947

Exchange differences on translation (restated1)

 

-

-

-

-

4,892

-

4,892

-

4,892

Net gain recognised directly

in equity (restated1)

 

-

-

-

-

4,892

-

4,892

-

4,892

Profit for the year (restated1)

 

-

-

-

-

-

14,869

14,869

(599)

14,270

Total comprehensive

income for the year (restated1)

 

-

-

-

-

4,892

14,869

19,761

(599)

19,162

Issue of shares

 

-

45

-

-

-

-

45

41

86

Acquisition of treasury shares

 

-

-

(3,738)

-

-

-

(3,738)

-

(3,738)

Dividends paid

 

-

-

-

-

-

(3,167)

(3,167)

-

(3,167)

Share-based payments

 

-

-

-

-

-

2,401

2,401

-

2,401

Tax in relation to share-based payments

 

-

-

-

-

-

1,754

1,754

-

1,754

Total transactions with owners recognised directly in equity

 

-

45

(3,738)

-

-

988

(2,705)

41

(2,664)

Balance at 31 July 2019 (restated)

 

211

31,345

(3,738)

9,239

19,923

51,023

108,003

(558)

107,445

Exchange differences on translation

 

-

-

-

-

(4,778)

-

(4,778)

2

(4,776)

Net (loss)/gain recognised directly

in equity

 

-

-

-

-

(4,778)

-

(4,778)

2

(4,776)

Profit/(Loss) for the year

 

-

-

-

-

-

9,558

9,558

(163)

9,395

Total comprehensive income/(expense) for the year

 

-

-

-

-

(4,778)

9,558

4,780

(161)

4,619

Issue of shares

 

6

35

(5)

-

-

(1)

35

-

35

Acquisition of treasury shares

 

-

-

(2,414)

-

-

-

(2,414)

-

(2,414)

Treasury shares used to settle share option exercises

 

-

-

4,457

-

-

(4,457)

-

-

-

Dividends paid

 

-

-

-

-

-

(4,298)

(4,298)

-

(4,298)

Share-based payments

 

-

-

-

-

-

2,781

2,781

-

2,781

Tax in relation to share-based payments

 

-

-

-

-

-

1,170

1,170

-

1,170

Total transactions with owners recognised directly in equity

 

6

35

2,038

-

-

(4,805)

(2,726)

-

(2,726)

Balance at 31 July 2020

 

217

31,380

(1,700)

9,239

15,145

55,776

110,057

(719)

 

1. The prior period results have been restated for IFRS 16 "Leases".

 

 

YOUGOV PLC

UNAUDITED Consolidated Statement of casH FLOWS

For the year ended 31 July 2020

 

 

 

 

 

2020

 

£'000

 

2019

(restated1)

£'000

Cash flows from operating activities

 

 

 

Profit before taxation

 

15,207

19,355

Adjustments for:

 

 

 

Finance income

 

(433)

(255)

Finance costs

 

426

869

Share of post-tax result/loss of associates

 

-

52

Amortisation of intangibles

 

10,782

8,809

Depreciation

 

4,491

4,396

(Profit)/Loss on disposal of property, plant and equipment and other intangible assets

 

(16)

6

Share-based payments

 

2,781

2,401

Other non-cash items2

 

5,293

(3,245)

(Increase)/Decrease in trade and other receivables

 

(1,621)

714

(Decrease)/Increase in trade and other payables

 

(220)

3,969

Increase in provisions

 

2,015

1,348

Cash generated from operations

 

38,705

38,419

Interest paid

 

(294)

(304)

Income taxes paid

 

(3,184)

(4,521)

Net cash generated from operating activities

 

35,227

33,594

Cash flow from investing activities

 

 

 

Acquisition of subsidiaries (net of cash acquired)

 

-

(228)

Settlement of deferred consideration

 

(7,451)

(4,520)

Purchase of business

 

-

(2,063)

Purchase of property, plant and equipment

 

(1,067)

(2,713)

Purchase of intangible assets

 

(17,575)

(9,453)

Proceeds from sale of plant, property and equipment

 

83

-

Interest received

 

175

211

Net cash used in investing activities

 

(25,835)

(18,766)

Cash flows from financing activities

 

 

 

Proceeds from the issue of share capital

 

35

86

Principal element of lease payments

 

(2,971)

(2,843)

Dividends paid to Shareholders

 

(4,298)

(3,167)

Purchase of treasury shares 

 

(2,414)

(3,738)

Net cash used in financing activities

 

(9,648)

(9,662)

Net (decrease)/increase in cash and cash equivalents

 

(256)

5,166

Cash and cash equivalents at beginning of year

 

37,925

30,621

Exchange (loss)/gain on cash and cash equivalents

 

(2,360)

2,138

Cash and cash equivalents at end of year

 

35,309

37,925

 

1. The prior period results have been restated for IFRS 16 "Leases".

2. Includes £3,663,000 of contingent consideration in respect of acquisitions treated as staff costs, a £159,000 increase in acquisition consideration recognised in the income statement and a £2,103,000 impairment of goodwill.

YOUGOV PLC

UNAUDITED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 July 2020

 

Nature of operations

The principal activity of YouGov plc and subsidiaries ("the Group") 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 £ Sterling, which is also the functional currency of the parent company.

Basis of preparation

The following unaudited financial information does not amount to full financial statements within the meaning of Section 434 of Companies Act 2006. The unaudited financial information has been extracted from the Group's Annual Report and Financial Statements for the year ended 31 July 2020.

The consolidated financial statements of YouGov plc 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 2019 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. Copies of the 2020 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.

Going concern

The Group meets its day-to-day working capital requirements through its strong cash reserves. The Group has not seen any significant slowdown in sales and has not furloughed any staff or sought extended payment terms for its obligations. However, given the unprecedented nature of the pandemic a severe but plausible scenario has been modelled where revenue targets are missed by 30% due to reduced revenue from clients' delays and a slowdown in securing new business. Even in this scenario the Group has strong liquidity and would meet financial liabilities as they fall due. Mitigating actions, should they be required, are all within management's control. These could include reducing new recruitment, lowering commission or bonus payments, and reduced capital expenditure.

The Directors therefore have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. The Group therefore continues to adopt the going concern basis in preparing its consolidated financial statements.
 

YOUGOV PLC

UNAUDITED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 July 2020

Impact of new accounting standards

IFRS 16 replaces IAS 17 and is applicable to all reporting periods beginning on or after 1 January 2019. The standard provides a single lessee accounting model, requiring lessees to recognise right of use assets and liabilities for all leases, with some exemptions for short-term leases and leases considered low value. IFRS 16 applies only to tangible assets. We have elected to take the full retrospective approach for IFRS 16 adoption.

The adoption of IFRS 16 from 1 August 2019 resulted in changes in accounting policies and adjustments to the amounts recognised in the financial statements. The impact of the change in lease accounting on the Group's Consolidated Income Statement and Consolidated Statement of Financial Position for the comparative financial year is disclosed in the tables below. Line items that were not affected by the changes have not been included. The impact on deferred taxation has not been calculated as it is not considered material.

 

Year to 31 July 2019 as reported

Restatement for IFRS 16

Year to 31 July 2019 restated

Year to 31 July 2020

 

£'000

£'000

£'000

£'000

Operating profit items

 

 

 

 

Depreciation expense

  1,481

  2,915

  4,396

4,192

Other administrative expenses

  90,983

(3,119)

  87,864

110,455

Total administrative expenses

  92,464

(204)

  92,260

114,647

 

 

 

 

 

Other income statement items

 

 

 

 

Finance costs

564

304

868

426

 

 

31 July 2019 as reported

Restatement for IFRS 16

31 July 2019 restated

31 July 2020

 

£'000

£'000

£'000

£'000

Balance sheet items

 

 

 

 

Right of use assets

-

  10,529

  10,529

8,891

Lease liabilities due within one year

-

  (2,891)

  (2,891)

(2,491)

Lease liabilities due after one year

-

  (8,217)

  (8,217)

(6,854)

Foreign exchange reserve

20,018

(95)

19,923

14,435

Retained earnings

51,507

(485)

  51,022

57,622

 

 

YOUGOV PLC

UNAUDITED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

For the year ended 31 July 2020

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.

 

 

Custom Research

Data Products

Data Services

Eliminations and unallocated costs

 

Group

2020

£'000

£'000

£'000

£'000

£'000

Revenue

 

 

 

 

 

Recognised over time

25,749

50,485

1,109

1,099

78,442

Recognised at a point in time

38,897

826

36,710

(2,434)

73,999

Total revenue

64,646

51,311

37,819

(1,335)

152,441

Cost of sales

(12,953)

(4,234)

(6,143)

(44)

(23,374)

Gross profit

51,693

47,077

31,676

(1,379)

129,067

Administrative expenses

(39,094)

(29,095)

(24,700)

(14,348)

(107,237)

Adjusted operating profit

12,599

17,982

6,976

(15,727)

21,830

Separately reported items

-

-

-

(6,630)

(6,630)

Operating profit

12,599

17,982

6,976

(22,357)

15,200

Finance income

 

 

 

 

433

Finance costs

 

 

 

 

(426)

Profit before taxation

 

 

 

 

15,207

Taxation

 

 

 

 

(5,812)

Profit after taxation

 

 

 

 

9,395

Other segment information

 

 

 

 

 

Depreciation

670

1

-

3,820

4,491

Amortisation

19

521

-

10,242

10,782

 

Custom Research

Data Products

Data Services

Eliminations and unallocated costs

 

Group

2019 (restated)

£'000

£'000

£'000

£'000

£'000

Revenue

 

 

 

 

 

Recognised over time

19,634

40,878

660

(44)

61,128

Recognised at a point in time

40,366

585

36,496

(2,088)

75,359

Total revenue

60,000

41,463

37,156

(2,132)

136,487

Cost of sales

(13,569)

(4,170)

(6,789)

322

(24,206)

Gross profit

46,431

37,293

30,367

(1,810)

112,281

Administrative expenses

(33,315)

(23,069)

(22,924)

(14,481)

(93,789)

Adjusted operating profit

13,116

14,224

7,443

(16,291)

18,492

Separately reported items

-

-

-

1,529

1,529

Operating profit

13,116

14,224

7,443

(14,762)

20,021

Finance income

 

 

 

 

255

Finance costs

 

 

 

 

(869)

Share of post-tax loss in joint

ventures and associates

 

 

 

 

(52)

Profit before taxation

 

 

 

 

19,355

Taxation

 

 

 

 

(5,085)

Profit after taxation

 

 

 

 

14,270

Other segment information

 

 

 

 

 

Depreciation

1,276

378

526

2,217

4,396

Amortisation

80

263

-

8,466

8,809

   

 

YOUGOV PLC

UNAUDITED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

For the year ended 31 July 2020

1 Segmental analysis continued

Supplementary analysis by geography

Revenue and adjusted operating profit/(loss) by geography based on the origin of the sale.  

 

2020

2019 (restated)

 

 

Revenue

Adjusted operating profit/ (loss)

 

Revenue

Adjusted operating

profit/(loss)

 

£'000

£'000

£'000

£'000

UK

 

47,233

15,399

41,151

11,736

USA

 

64,805

19,009

56,410

16,805

Mainland Europe

 

24,339

2,225

23,855

2,935

Middle East

 

8,787

1,923

10,548

3,258

Asia Pacific

 

12,490

279

11,325

176

Intra-Group revenues/unallocated costs

 

(5,213)

(17,005)

(6,802)

(16,418)

Group

 

152,441

21,830

136,487

18,492

 

2 Separately reported items

 

 

2020

£'000

2019

£'000

Impairment of goodwill

2,103

-

Restructuring costs

-

146

Acquisition-related costs

4,527

382

Fair value gains

-

(2,057)

 

6,630

(1,529)

Impairment of goodwill in the year is in respect of the Nordic Business, further details are provided in Note 6.

Restructuring costs in the prior year are residual costs incurred in respect of the restructuring of the Custom business in Mainland Europe and the Middle East and the closure of the Reports business.

Acquisition related costs in the year comprise £3,663,000 of contingent consideration treated as staff costs in respect of the acquisitions of Galaxy Research Pty Ltd, SMG Insight Limited, InConversation Media Limited and Portent.io Limited, a decrease of £84,000 in contingent transaction costs in respect of the Portent.io Limited, a £243,000 increase in SMG consideration and a £705,000 reduction in the fair value of the acquired SMG Insight Limited net assets. 

Acquisition related costs in the prior year comprise £2,834,000 of contingent consideration treated as staff costs in respect of the acquisitions of Galaxy Research Pty Ltd, InConversation Media Limited and Portent.io Limited and £740,000 of transaction costs in respect of the acquisitions made in the year, £201,000 of which is contingent less a reduction in expected SMG contingent consideration of £3,192,000.

Fair value gains in the prior year comprise, £1,878,000 increase in the fair value assessment of the Group's 20% shareholding in SMG Insight Limited prior to acquisition and a bargain purchase gain of £232,000 less a fair value loss of £53,000 in respect of the acquisition of Portent.io Limited.

 

 

YOUGOV PLC

UNAUDITED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

For the year ended 31 July 2020

3 Taxation

 

 

The taxation charge represents:

2020

£'000

2019

£'000

Current tax on profits for the year

3,450

4,965

Adjustments in respect of prior years

947

(337)

Total current tax charge

4,397

4,628

Deferred tax:

 

 

Origination and reversal of temporary differences

2,053

16

Adjustments in respect of prior years

(240)

265

Impact of changes in tax rates

(398)

176

Total deferred tax charge

1,415

457

Total income statement tax charge

5,812

5,085

 

The tax assessed for the year is higher (2019: higher) than the standard rate of corporation tax in the UK.

The differences are explained below:

 

 

 

2020

£'000

2019

£'000

Profit before taxation

15,207

19,456

Tax charge calculated at Group's standard rate of 19% (2019: 19%)

2,889

3,697

Variance in overseas tax rates

1,294

1,439

Impact of changes in tax rates

(398)

176

Gains not subject to tax

(39)

(1,007)

Expenses not deductible for tax purposes

832

743

Tax losses for which no deferred income tax asset was recognised

527

99

Adjustments in respect of prior years

707

(72)

Associates results reported net of tax

-

10

Total income statement tax charge for the year

5,812

5,085

 

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. On 11 March 2020 it was announced that the corporation tax rate would remain at 19% for the years starting on 1 April 2020 and 2021.  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.

 

Dividend

On 16 December 2019, a final dividend in respect of the year ended 31 July 2019 of £4,298,000 (4.0p per share) (2018: £3,167,000 (3.0p per share)) was paid to Shareholders. A dividend in respect of the year ended 31 July 2020 of 5.0p per share, amounting to a total dividend of £5,424,000 is to be proposed at the Annual General Meeting on 10 December 2020. These financial statements do not reflect this proposed dividend payable.

 

 

YOUGOV PLC

UNAUDITED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

For the year ended 31 July 2020

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 potentially dilutive Ordinary Shares.

The adjusted earnings per share has been calculated to reflect the underlying profitability of the business by excluding share-based payments and related employer's social costs, imputed interest, impairment charges, other separately reported items and any related tax effects as well as the derecognition of tax losses.

 

2020

 

£'000

2019

(restated)

£'000

Profit after taxation attributable to equity holders of the parent company

9,558

14,869

Add: share-based payments

2,781

2,401

Add: social taxes on share-based payments

926

183

Add: imputed interest

132

219

Add: separately reported items (Note 2)

6,630

(1,529)

Tax effect of the above adjustments and adjusting tax items*

(725)

(357)

Adjusted profit after taxation attributable to equity holders of the parent company

19,302

15,786

* Adjusting tax items in the year included a one-off charge of £410,000 as a result of providing against Nordic tax losses.

 

YOUGOV PLC

UNAUDITED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

For the year ended 31 July 2020

 

Reconciliations of the earnings and weighted average number of shares used in the calculations are set out below.

 

2020

2019 (restated)

Number of shares

 

 

Weighted average number of shares during the year: ('000 shares)

 

 

- Basic

106,687

105,400

- Dilutive effect of share options

5,792

7,865

- Diluted

112,479

113,265

The adjustments have the following effect:

 

 

Basic earnings per share

9.0p

14.1p

Share-based payments

2.6p

2.3p

Social taxes on share-based payments

0.9p

0.2p

Imputed interest

0.1p

0.2p

Separately reported items

6.2p

(1.5p)

Tax effect of the above adjustments and adjusting tax items

(0.7p)

(0.3p)

Adjusted earnings per share

18.1p

15.0p

Diluted earnings per share

8.5p

13.1p

Share-based payments

2.5p

2.1p

Social taxes on share-based payments

0.8p

0.2p

Imputed interest

0.1p

0.2p

Separately reported items

5.9p

(1.4p)

Tax effect of the above adjustments and adjusting tax items

(0.6p)

(0.3p)

Adjusted diluted earnings per share

17.2p

13.9p

 

 

 

YOUGOV PLC

UNAUDITED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

For the year ended 31 July 2020

 

6 Goodwill

 

 

USA

Nordic

Germany

Middle East

Asia Pacific

SMG

UK

Total

 

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

Carrying amount at 1 August 2018

20,385

8,879

11,571

1,675

1,284

8,026

240

52,060

Additions through business combinations

387

-

-

-

-

9,831

970

11,188

Exchange differences

1,634

225

324

136

70

-

-

2,389

Carrying amount at 31 July 2019

22,406

9,104

11,895

1,811

1,354

17,857

1,210

65,637

Impairment

-

(2,103)

-

-

-

-

-

(2,103)

Exchange differences

(1,600)

(101)

(173)

(132)

(73)

-

-

(2,079)

Carrying amount at 31 July 2020

20,806

6,900

11,722

1,679

1,281

17,857

1,210

61,455

At 31 July 2020

 

 

 

 

 

 

 

 

Cost

20,806

9,000

14,176

1,679

1,281

17,857

1,210

66,009

Accumulated impairment

-

(2,100)

(2,454)

-

-

-

-

(4,554)

Net book amount

20,806

6,900

11,722

1,679

1,281

17,857

1,210

61,455

 

In accordance with IAS 36, the carrying values of goodwill and other intangible assets are reviewed annually for impairment. The 2020 impairment review was undertaken as at 31 July 2020. 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 three years for each CGU based on the budget numbers for the year ending 31 July 2021.

The sources of the assumptions used in making the assessment are as follows:

CGU Revenue annual growth rates of 4% to 20%. Growth rates are forecasts based on both internal and external market information;

margins are based upon past performance;

terminal growth rates based on management's estimate of future long-term average growth rates (2.25%); and

post-tax discount rate of 10% is calculated by adding a small premium to the Group WACC to recognise a single CGU will have riskier cashflows than the overall Group.

Annual EBITDA growth rates of 2.25% have been assumed in perpetuity beyond year three. The pre-tax weighted average costs of capital used to discount the future cash flows to their present values are Middle East 10% (2019: 10%), USA 13% (2019: 14%), Nordic 13% (2019: 13%), Germany 13% (2019: 15%) and Asia Pacific 12% (2019: 12%), SMG 12% (2019: 12%); UK 12% (2019: 12%).

Management has considered reasonable possible changes in the above key assumptions and performed sensitivity analyses under these scenarios. As a result of low year-on-year growth, and reduced future expectations in light of the COVID 19 Pandemic, it was determined that the existing valuation of the Nordic CGU could no longer be supported. As such an impairment of £2,103,000 has been recognised against goodwill. A corresponding income statement charge has been recognised in administrative expenses and disclosed as a separately reported item. After applying this impairment the remaining goodwill in the Nordic CGU is valued at £6,900,000.

Sufficient headroom exists in the other CGUs to support the valuation of goodwill.

 

 

 

YOUGOV PLC

UNAUDITED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

For the year ended 31 July 2020

 

7 Other intangible assets

 

 

Consumer panel
£'000

Software and software development
£'000

Customer contracts
and lists
£'000

Patents and trademarks
£'000

Product development
costs
£'000

Total
£'000

 

 

 

 

 

 

 

At 1 August 2018

 

 

 

 

 

 

Cost

22,566

27,355

7,339

3,603

911

61,774

Accumulatedamortisation

(18,092)

(21,323)

(4,868)

(3,331)

(863)

(48,477)

Netbookamount

4,474

6,032

2,471

272

48

13,297

Year ended 31 July 2019 

 

 

 

 

 

 

Opening netbookamount

4,474

6,032

2,471

272

48

13,297

Additions:

 

 

 

 

 

 

Separatelyacquired

3,952

667

-

28

-

4,647

Internallydeveloped

-

4,806

-

-

-

4,806

Through business combinations

10

2,487

-

-

-

2,497

Amortisationcharge:

 

 

 

 

 

 

Separately acquired

(3,226)

(310)

-

(11)

-

(3,547)

  Internallydeveloped

-

(4,589)

-

-

-

(4,589)

Businesscombinations

(3)

(87)

(583)

-

-

(673)

Reclassifications

-

48

-

-

(48)

-

Exchangedifferences

245

13

37

4

-

299

Closing netbookamount

5,452

9,067

1,925

293

-

16,737

At 31 July 2019

 

 

 

 

 

 

Cost

17,184

32,872

5,232

1,389

873

57,550

Accumulatedamortisation

(11,732)

(23,805)

(3,307)

(1,096)

(873)

(40,813)

Netbookamount

5,452

9,067

1,925

293

-

16,737

Year ended 31 July 2020 

 

 

 

 

 

 

Opening netbookamount

5,452

9,067

1,925

293

-

16,737

Additions:

 

 

 

 

 

 

Separatelyacquired

8,914

685

-

35

-

9,634

Internallydeveloped

-

7,941

-

-

-

7,941

Amortisationcharge:

 

 

 

 

 

 

Separately acquired

(4,233)

(275)

-

(3)

-

(4,511)

  Internallydeveloped

-

(4,858)

-

-

-

(4,858)

Businesscombinations

-

(864)

(549)

-

-

(1,413)

Exchangedifferences

(310)

(31)

(30)

(3)

-

(374)

Closing netbookamount

9,823

11,665

1,346

322

-

23,156

At 31 July 2020

 

 

 

 

 

 

Cost

24,420

41,931

4,966

1,340

385

73,042

Accumulatedamortisation

(14,597)

(30,266)

(3,620)

(1,018)

(385)

(49,886)

Netbookamount

9,823

11,665

1,346

322

-

23,156

 

YOUGOV PLC

UNAUDITED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

For the year ended 31 July 2020

 

8 Right of use assets

 

 

Premises

Computer equipment

Office Equipment

Motor vehicles

Total

£'000

£'000

£'000

£'000

£'000

At 1 August 2018

 

 

 

 

 

Cost

11,144

851

12

62

12,069

Accumulated depreciation

  (6,025)

(592)

(6)

(26)

(6,649)

Net book amount

5,119

259

6

36

5,420

Year ended 31 July 2019

 

 

 

 

 

Opening net book amount

5,119

259

6

36

5,420

Additions

7,589

75

149

13

7,826

Depreciation

(2,710)

(143)

(39)

(23)

(2,915)

Exchange differences

192

6

-

-

198

Closing net book amount

10,190

196

117

26

10,529

At 31 July 2019

 

 

 

 

 

Cost

16,515

934

161

77

17,687

Accumulated depreciation

(6,325)

(738)

(44)

(51)

(7,158)

Net book amount

10,190

196

117

26

10,529

Year ended 31 July 2020

 

 

 

 

 

Opening net book amount

10,190

196

117

26

10,529

Additions

1,391

253

-

26

1,670

Disposals

(75)

-

-

-

(75)

Depreciation

(2,630)

(153)

(52)

(23)

(2,858)

Exchange differences

(371)

(4)

-

-

(375)

Closing net book amount

8,505

292

65

29

8,891

At 31 July 2020

 

 

 

 

 

Cost

16,181

1,122

161

71

17,535

Accumulated depreciation

(7,676)

(830)

(96)

(42)

(8,644)

Net book amount

8,505

292

65

29

8,891

The total expense relating to assets leased on a short-term basis was £597,000 (2019: £654,000). The total expense relating to leases of low-value assets was £80,000 (2019: £39,000).

 

9 Trade and other receivables

 

 

31 July 2020

£'000

31July2019

£'000

Trade receivables

22,020

19,235

Expected credit loss

(3,493)

(2,071)

Net trade receivables

18,527

17,164

Other receivables

3,023

4,357

Prepayments

3,977

3,482

Accrued income

8,712

8,723

 

34,239

33,726

 

 

 

 

YOUGOV PLC

UNAUDITED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

For the year ended 31 July 2020

 

 

10 Trade and other payables

 

31 July 2020
£'000

31 July 2019
£'000

Trade payables

3,130

2,355

Accruals

16,268

17,050

Deferred income

13,179

14,469

Other payables

5,905

6,167

 

38,482

40,041

Included within other payables are £272,000 (2019: £263,000) of contributions due in respect of defined contribution pension schemes.

 

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.
 
END
 
 
FR EAFEKEDXEFEA

Companies

YouGov (YOU)
UK 100

Latest directors dealings