YouGov Shares Tumble after Sales Warning

YouGov has seen its share price plunge after issuing a trading update warning of lower-than-expected sales and profits. Revenue forecast at £324-327m will still be massively increased but will fall well short of bullish statements made earlier this year, following major acquisitions.

In the year to 31st July 2023 the firm reported revenue of £258.3m, up 17% year on year and adjusted EBITDA of £73.6m, up from £61.6m a year previously. It then spent a reported EUR 315m to acquire the European Consumer Panel Services business of GfK (CPS GfK), after the German-based group's mega-merger with NIQ required the divestment. It also acquired Chicago-based survey data management solution KnowledgeHound. YouGov's half-year results on 26th March reported 'Continued confidence in achieving FY24 market expectations underpinned by a robust sales pipeline' - revenue of £143.1m was up 8.9% from a year earlier, and adjusted EBITDA at £41.0m was also up (£35.6m in H1 2023).

With the acquisitions growing the company's footprint and services substantially, and despite new CEO Steve Hatch (pictured) flagging up 'challenging' market conditions, the company issued 'medium-term' revenue forecasts of £500m in January and then £650m in March: against this background today's revised forecast for FY24 of £324-327m is seen as disappointing despite being c.26% up on the reported FY23 figure. In the update, YouGov said sales bookings had been lower than anticipated, and that after 'investing in the business to set up for an acceleration in growth in H2', that growth had been less than expected. The group now expects full-year adjusted operating profit to be £41-44 million.

YouGov says demand for its customised research solutions is still increasing, but sales in its Data Products division - previously seen as the core growth area - 'remain slow' and sales of fast-turnaround research services are still in decline. Geographically, the group says it has 'seen challenges in EMEA, particularly in the DACH region'. Although the integration of the CPS business is progressing well, some of its contribution is now expected to 'shift slightly into FY25'.

YouGov says it will focus on optimising its cost base and prioritising investment in 'key growth areas such as upgrading our Data Products, continuing to build out our AI capabilities and enhancing our sales organisation to further capitalise on YouGov's unique asset: its high-quality global panel and proprietary dataset'.

Shares in the company were trading at 440 pence at the close tonight, down from around 820p on Wednesday and a recent high of 1230p on February 16th.

Web site: https://business.yougov.com .