Yougov's (LON:YOU) positive H117 update shows trading ahead of market expectations, resulting from good progress from data products and services and growth in the custom research margin. There has also been some currency benefit. For now, we have maintained our implied H217 numbers, meaning that our FY17e revenue forecast increases 2% and changes to the mix move our PBT estimate up 4%. FY18e numbers are edged up slightly. At 15.7x current year EV/EBITDA, the valuation is towards the top of the range of global peers (7.5x to 17.5x), which is a reflection of the strong earnings growth and cash generation.
Strong H117 performance
There has been good underlying performance across data products and services in the period, with additional benefit from currency (BrandIndex generates around 60% of its revenues in the US). Both BrandIndex and the newer YouGov Profiles product continue to attract new clients globally. Omnibus, which makes up the bulk of data services’ revenues, has grown in line with expectations, while custom research continues to improve its margin as planned. It has a growing element of tracking studies – 12% of FY16 segmental revenues.
For the time being, we maintain our implied second-half numbers for the data products and services. The group is second-half weighted, so this is a comparatively cautious stance. Visibility for both H217 and FY18 will be better by the publication of the interim results to end January on 27 March and there may be further scope for raising forecasts then.
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