YouGov plc (LON:YOU) has delivered strong results that demonstrate the success of its shift in its business model towards a real-time data analytics business with a growing subscription revenue base. It continues to innovate, developing new products and services and augmenting the existing offering and is further expanding its geographic reach, with the investment supported by the cash-rich balance sheet. A new five-year plan is expected to be set out in Spring 2019 and we anticipate that this will also have ambitious targets for growth and earnings that will support the premium rating.
Revenues and margins ahead
FY18 revenues were up 9% on prior year, 12% on a constant currency (CC) basis, despite the shift in the Custom Research business away from one-off projects holding that segment’s revenue performance flat. Data Products and Services continue to build at an impressive rate, up 30% and 26% respectively (CC). A shift in the allocation of cost from Custom Research to the centre (a more accurate reflection) flattered the improvement in operating margin, but stripping this back, the segmental margin still grew from 18.9% to 24.1%. At group level, the operating margin rose to 16.9% (FY17: 13.6%). The increasing sophistication of the tools and analysis, all based on the group’s proprietary data derived from its own panel, is enabling it to become more deeply embedded in its clients’ work flows and underpins the growing subscription base, as well as supporting margins.
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