YouGov warns profits will be lower than expected, shares tumble

20th Jun 2024 09:30

(Sharecast News) - YouGov tumbled on Thursday as it cautioned that full-year profits and revenue will be lower than expected due to slow demand in its data products division.

The company said that since its half-year results, sales bookings have been lower than expected. As a result, it now expects reported revenues for FY24 to be around £324m to £327m.

Berenberg said in a research note that the mid point of the range is 5% below consensus expectations.

"In line with our stated strategy, the company had invested in the business to set up for an acceleration in growth in H2," YouGov said. "While we have seen an improvement in the second half, the growth was below expectations; therefore we now expect full-year group adjusted operating profit to be £41-44 million."

The mid point of the range for adjusted operating profit is 32% lower than consensus estimates, Berenberg said.

YouGov said it continues to see increased demand for its customised research solutions. However, sales in the data products division have remained slow and it continues to see declines in fast-turnaround research services.

"Geographically we have seen challenges in EMEA, particularly in the DACH region," it said.

The Consumer Panel Services (CPS) business is continuing to perform well, it said, in line with expectations following completion of the acquisition in January 2024.

"However, having now finalised the alignment of CPS's revenue recognition policies with YouGov's, some contribution from CPS will shift slightly into FY25," the group added.

"As we move into FY25, we will focus on optimising our 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."

At 0925 BST, the shares were down 36% at 528p.

Russ Mould, investment director at AJ Bell, said: "Casual observers of YouGov might assume the company would enjoy a bumper time during the election but its polling operation makes a relatively modest contribution to group revenue.

"The data analytics side is more important and this is where the company is struggling. The company invested for an expected acceleration of growth in the second half of its financial year which, in classic fashion, failed to materialise.

"This may reduce some of the clamour for the company to move its listing to the US in search of a higher rating. The one reassuring element of the announcement is the recently acquired consumer panel business is performing as expected."