TIDMYOU
RNS Number : 4940P
YouGov PLC
10 October 2023
10 October 2023
YouGov plc
("YouGov" or "the Group" or "the Company")
Full Year Results for the year ended 31 July 2023
- Strong performance amidst a difficult trading environment
- Confident in the Group's prospects for FY24 and meeting
current market expectations
YouGov, the international research and data analytics group,
announces its results for the year ended 31 July 2023.
Summary of Results
Year Year Change Underlying
to to
31 July 31 July % Change(1)
2023 2022
GBPm GBPm %
---------- ---------- --------- ------------
Revenue 258.3 221.1 17% 9%
---------- ---------- --------- ------------
Adjusted Operating Profit(1) 48.3 36.3 33 % 23 %
---------- ---------- --------- ------------
Adjusted Operating Profit
Margin (%)(1) 18.7% 16.4% 230bps -
---------- ---------- --------- ------------
Statutory Operating Profit 44.4 30.0 48 % -
---------- ---------- --------- ------------
Adjusted Profit before
Tax(1) 56.4 34.7 63 % 61 %
---------- ---------- --------- ------------
Statutory Profit before
Tax 44 .7 25.3 77% -
---------- ---------- --------- ------------
Adjusted Earnings per 40.5 23.7
Share(1) p p 71 % 72 %
---------- ---------- --------- ------------
Statutory Basic Earnings 31.5 15.7 100 %
per Share p p -
---------- ---------- --------- ------------
1 Defined in the explanation of non-IFRS measures below.
Financial highlights
-- Revenue growth of 17% (FY22: 31%) to GBP258.3m, with underlying(1)
business growth of 9% versus the prior year against a
challenging macroeconomic backdrop and well ahead of the
industry.
-- Adjusted operating profit(1) up by 33% to GBP48.3m (FY22:
GBP36.3m), with underlying(1) business growth of 23% on
the back of operational gearing and disciplined cost management.
-- Adjusted operating profit margin(1) up 230 basis points
(bps) to 18.7% (FY22: 16.4%).
-- Adjusted profit before tax(1) up by 63% to GBP56.4m (FY22:
GBP34.7m).
-- Adjusted earnings per share(1) up by 71% to 40.5p (FY22:
23.7p).
-- Statutory operating profit up 48% to GBP44.4m (FY22: GBP30.0m).
-- Strong cash conversion of 93% (FY22: 113%) enabling ongoing
investment in the business and third strategic growth
plan.
-- Strong balance sheet position maintained with net cash
at period end of GBP107.2m (31 July 2022: GBP37.4m), GBP49.8m
of which relates to net proceeds from the equity placing
completed in July 2023.
Operational highlights
-- High-quality data, combined with our global reach and
best-in-class analytics tools drive significant outperformance
versus broader market research industry, demonstrating
our customer stickiness and ability to take market share.
o Data Products revenue increased by 16% (10% from underlying(1)
business) to GBP85.9m, driven by strong subscription
renewal rates.
o Data Services revenue decreased by 6% (8% from underlying(1)
business) to GBP47.8m, as general market softness continues
to impact more discretionary spend.
o Custom Research revenue increased by 27% (17% from
underlying(1) business) to GBP121.8m, driven by continued
sales momentum globally from both long-term tracking
and ad-hoc projects.
-- Strong growth across all geographies despite macroeconomic
challenges and difficult trading conditions in some markets
during the period.
o Strong commercial success in the UK through expansion
of several client relationships and good performance
in Mainland Europe on the back of new client wins.
o The US remains the Group's key strategic growth focus
with large market opportunities, however, performance
in the region was impacted by a slowdown in the technology
sector in the period.
-- Investments made during the period to drive further growth:
o Technology: Continued investment of GBP9.0m (FY22:
GBP8.0m) in technologies to drive long term growth,
including the completion of the first version of the
YouGov Platform.
o Products: Expanded product suite in response to client
demand including the launch of YouGov Surveys, the Group's
self-service survey tool.
o Panel: Ongoing investment of GBP7.3m (FY22: GBP8.0m)
in the build-out of our panel, resulting in the number
of registered members growing 15% in the period to approximately
26 million.
o Acquisitions: Announced the Group's intention to acquire
the Consumer Panel Business of GfK SE (GfK CPB), an
established leader in household purchase data across
16 European countries, in July 2023. The acquisition
is subject to regulatory approval and the process remains
on track with the deal anticipated to close in the coming
months.
-- Announced the appointment of Steve Hatch as Chief Executive
Officer following a comprehensive international search
process. Steve joined the Company on 1 August 2023, succeeding
Stephan Shakespeare who assumed the role of Non-Executive
Chair.
Current trading and outlook
-- We remain confident in the Group's prospects for FY24
and in meeting current market expectations on a stand-alone
basis (pre-GfK CPB).
-- Trading for the current financial year has started off
in line with expectations.
-- The Group is starting to see sales momentum returning
in the technology sector and expect overall Group performance
to build through the course of the year.
-- With the Group's proposed acquisition of GfK's Consumer
Panel Business yet to close, we re-state our current medium-term
guidance as outlined at the Capital Markets Day in May,
excluding the proposed acquisition:
o Medium-term revenue of GBP500 million; and
o Medium-term adjusted operating profit margin of 25%.
-- The Group will provide a further update on the medium-term
guidance following closing of the acquisition.
Steve Hatch, Chief Executive Officer, said: "Since I joined
YouGov in August I have focused on getting to know my new
colleagues as well as talking to our clients. These conversations
have re-affirmed my views on the strength of YouGov's people,
technology and client offering. The Company is in a strong position
with the right focus and strategic direction to realise the full
potential of the business. I look forward to working closely with
Stephan, the wider Board and the full YouGov team in delivering the
third strategic growth plan and am excited about the great
opportunities ahead.
"Building on the momentum we saw in the first half of the year,
YouGov has delivered another year of strong performance in FY23
against a challenging macroeconomic backdrop. We have continued to
invest for sustainable growth, in line with our strategy, while
delivering further margin expansion and robust cash generation.
Demand for YouGov's products and services remains strong with
continued new business momentum, high renewal rates and sticky
customer relationships. As a result, we remain confident in the
Group's prospects for FY24 and beyond, aiming to maintain the
strong sales momentum seen over the past year."
Analyst presentation
A copy of the presentation will be available online at
https://corporate.yougov.com/investors/presentations shortly after
the full-year results announcement is live on the Regulatory News
Service (RNS).
Forward looking statements
Certain statements in this full year report are forward looking.
Although the Group believes that the expectations reflected in
these forward-looking statements are reasonable, we can give no
assurance that these expectations will prove to have been correct.
As these statements involve risks and uncertainties, actual results
may differ materially from those expressed or implied by these
forward-looking statements.
We undertake no obligation to update any forward-looking
statements whether as a result of new information, future events or
otherwise.
Enquiries:
YouGov plc
Steve Hatch, CEO
Alex McIntosh, CFO
Hannah Jethwani, Investor Relations Director 020 7012 6000
FTI Consulting
Charles Palmer / Valerija Cymbal / Jemima Gurney 020 3727 1000
Numis Securities Limited (NOMAD and Joint broker)
Nick Westlake / Iqra Amin 020 7260 1000
Berenberg (Joint Broker)
Mark Whitmore / Richard Andrews / Alix Mecklenburg-Solodkoff 020 3207 7800
About YouGov
YouGov is an international online research data and analytics
technology group.
Our mission is to offer unparalleled insight into what the world
thinks.
Our innovative solutions help the world's most recognised
brands, media owners and agencies to plan, activate and track their
marketing activities better.
With operations in the UK, the Americas, Europe, the Middle
East, India and Asia Pacific, we have one of the world's largest
research networks.
At the core of our platform is an ever-growing source of
consumer data that has been amassed over our twenty years of
operation. We call it Living Data. All of our products and services
draw upon this detailed understanding of our 26 million registered
panel members to deliver accurate, actionable consumer
insights.
As innovators and pioneers of online market research, we have a
strong reputation as a trusted source of accurate data and
insights. Testament to this, YouGov data is regularly referenced by
the global press, and we are the most quoted market research source
in the world.
YouGov. Living Consumer Intelligence.
For further information, visit business.yougov.com
Chair's Statement
In my first statement as Chair of the YouGov plc Board of
Directors, I am delighted to report that we have had another year
of solid trading results for the 12 months to 31 July 2023 (FY23),
delivering strong top-line underlying growth(1) alongside continued
margin expansion. It is an honour to step into the role of
Non-Executive Chair and continue my journey with YouGov in its
strongest ever position.
The challenges and macro uncertainty seen in the previous year
persisted into FY23, and our ability to deliver this market beating
performance against that backdrop further demonstrates the
resilience and strength of our business model. Across our industry,
we witnessed a slowdown in momentum which led to some temporary
disruption at the start of the calendar year, particularly with our
technology sector clients. However, momentum has since started to
return, underpinning our confidence in the future, and our teams
are hard at work to ensure we get closer to our clients and
innovate with them to achieve our ambitions.
Results and dividend
In FY23 we achieved strong revenue growth of 17% over the prior
year (9% on an underlying(1) basis), driven by growth across all
our geographies. We were able to maintain disciplined cost
management through the year, and benefit from the investments made
in the prior years to build capacity and position our organisation
for a strong finish to our second long-term strategic growth plan
(FYP2). This enabled us to deliver adjusted operating profit(1) of
GBP48.3m in the year, up 33% over FY22, representing a margin of
18.7% (FY22: 16.4%).
This performance is testament to our resilient model and was
largely driven by the stellar performance of our Custom Research
division and the continued growth of our syndicated data products.
While the macro environment has impacted volumes of our more
tactical, fast-turnaround research, clients continue to dedicate
resources to customised strategic research, particularly
large-scale multi-country multi-year trackers, to help them make
critical business decisions. These trackers build on the
efficiencies of our data engine and the richness of our connected
data which, combined with our global coverage and granular audience
profiling, is continuing to resonate well with clients, resulting
in several new client wins in the year.
YouGov continues to maintain a progressive dividend policy, and
in line with this, the Board is pleased to recommend a dividend
increase of 25% to 8.75p per share payable on 11 December 2023 to
shareholders on the register as at 1 December 2023. This will be
tabled for shareholder approval at our Annual General Meeting
("AGM") on 7 December 2023.
Concluding the second strategic growth plan ("FYP2")
Our vision is for YouGov to be the world's leading provider of
marketing and opinion data. We want YouGov data to be a valued
public resource used by hundreds of millions of people on a daily
basis, enabling intelligent decision-making and informed
conversations. To support our realisation of this vision, we choose
to operate using the tool of medium- to long-term strategic growth
plans to enable us to allocate resources, make investment decisions
and to create a close link between corporate performance and
executive remuneration.
This year was the final year of our FYP2 strategic plan which
ran from 1 August 2019 to 31 July 2023 (FY19-23). As previously
announced, we set the following ambitious growth targets for the
FYP2 plan period:
-- Double Group revenue (implying a revenue CAGR of 19%);
-- Double Group adjusted operating profit margin(1) ; and
-- Achieve an adjusted basic earnings per share(1) compound
annual growth rate in excess of 30%
It is pleasing that YouGov has delivered a strong performance in
the final year of the strategic plan, resulting in the Company
nearly achieving its stretching targets. Overall, we delivered
Group Revenue CAGR of 17% and an EPS CAGR of 28% over the FYP2
period, which is a remarkable accomplishment and all the more
impressive in the context of the COVID-19 pandemic, political
turbulence and macroeconomic global backdrop during the period.
Based on our vision and strategy, we previously identified five
key priorities that were a focus over the FYP2 period. The key
progress made under each of these priorities during FY23 is set out
below:
-- Product development and technology: Completed the development
of the first version of the YouGov Platform, a high-quality,
self-service research system, and expanded our product suite
with the launch of YouGov Surveys, our self-service survey
tool.
-- Panel: Growth in our global research panel of 15% in FY23
to 26 million registered members, while maintaining strong
retention rates. Additionally, we launched our new member
portal with an aim to increase engagement and drive on-going
data sharing globally.
-- Global accounts: Our account management teams demonstrated
their ability to elevate client conversations backed by
robust market research data and win several new clients.
-- Global infrastructure: Our Centres of Excellence (CenX)
teams continue to grow rapidly as we look to increase efficiencies
and shift more standardised research tasks into our CenX
operations.
-- Acquisitions: In July 2023 we announced the intention to
acquire the Consumer Panel Business of GfK SE, an established
leader in household purchase data across 16 European countries
. The regulatory approval process remains on track, and
we anticipate closing the deal in the coming months.
This was also the final year of the Long-Term Incentive Plan
2019 ("LTIP 2019"), which was introduced in 2019 to run alongside
the FYP2 strategic plan. The LTIP 2019 targets were stretching,
with full vesting requiring compound annual adjusted EPS growth of
35% over the four years to 31 July 2023. Taking into account the
EPS CAGR of 28%, the overall plan vesting level was 74% which is an
excellent result. The LTIP 2019 awards will vest in late-October
2023. At the forthcoming AGM in December, we will be seeking
shareholder approval for a new scheme, the Long-Term Incentive Plan
2023 ("LTIP 2023"), which has been designed to allow us to
incentivise and reward sustainable performance over the medium- to
long-term. Full details of LTIP 2023 will be shared with
shareholders in early-November when the 2023 Annual Report &
Accounts are published.
Third strategic growth plan ("SP3")
The Board has approved the strategic direction for the third
strategic growth plan. As part of this, we continue to see
significant opportunities to grow our share of wallet through
better partnering with existing clients and increasing market
penetration, particularly in the US with multi-national brands.
Additionally, we see strong potential to expand our business
through a digital path to purchase with YouGov Surveys by driving
greater usage of the YouGov Platform.
The proposed acquisition of GfK's Consumer Panel Business (GfK
CPB) will add significant capabilities to the Group and enhance our
ability to scale. GfK CPB is an established leader in household
purchase data, with panels across 16 European countries, consisting
of over 100,000 households. These capabilities are strategically
aligned, adding highly engaged panels in the European market and
technology to capture and analyse consumer purchasing data. We
expect the acquisition to support our continued growth by expanding
our combined offering to existing clients in our current markets,
as well as the opportunity to win new clients and roll out into new
markets, including in the US which remains our largest growth
opportunity.
I am confident that the Board has set the right strategic
direction to deliver another period of sustainable, profitable
growth for the business and we have the right executive team in
place to see the plan implemented to its full potential. Our new
CEO, Steve Hatch brings over 30 years of leadership experience and
valuable sector expertise in consumer profiling, e-commerce, and
business transformation with a proven track record in scaling
technology platforms and digital media businesses. These
capabilities make Steve perfectly suited to lead YouGov through its
third strategic growth plan and beyond. See Steve's CEO's Report
for more detail on SP3 and our medium-term growth targets.
Board succession
This year has been a period of significant change for the YouGov
Board and leadership team composition.
As part of the previously disclosed Board succession plan, on 1
August 2023, Roger Parry stepped down from the role of
Non-Executive Chair after a 16-year tenure with the Company. At the
same time, Steve Hatch joined the Company as Chief Executive
Officer, while I assumed the role of Non-Executive Chair.
Additionally, Rosemary Leith stepped down as Senior Independent
Director ("SID") after a near nine-year tenure, succeeded by Nick
Prettejohn. Rosemary continues to hold the role of Chair of the
Board's Remuneration Committee and I would like to thank her for
her service as SID, particularly during this Board succession
period.
Earlier in the year, on 27 February 2023, we were delighted to
welcome Shalini Govil-Pai and Devesh Mishra to the Board. Shalini's
technical and consumer expertise, and Devesh's operational and
engineering experience, both gained within the US and UK technology
industries, bring hugely valuable and relevant skills to YouGov as
we progress into the next strategic growth plan. I am pleased to
announce that Shalini will join the Board's Remuneration Committee
and Devesh will join the Audit & Risk Committee as a member(2)
.
Also on 1 August 2023, Sundip Chahal's role changed from Chief
Operating Officer to Chief Business Officer with a remit for
leading integration and growth strategies at YouGov. Initially,
Sundip is focussed on the planned integration of GfK's Consumer
Panel Business. Sundip is also working closely with Steve during
the leadership transition period to ensure the success of YouGov's
organic growth strategy. Sundip remains on the YouGov Board as an
Executive Director in this new role. Lynda Vivian was promoted to
the non-Board role of Chief Operating Officer with a focus on the
delivery of YouGov's Platform model in line with the Company's
strategic growth plan, while continuing her work ensuring
operational excellence across the business.
I would like to take this opportunity to thank Roger for his
tremendous contribution as Non-Executive Chair over the years.
Roger was highly influential in the growth and success of our
business as a trusted advisor, mentor, and partner to the YouGov
leadership team throughout our journey.
With the right Board and executive team now in place, and the
transformative acquisition of GfK's Consumer Panel Business in
planning stage, I am excited by what we can achieve in the next
phase of our growth journey.
Conclusion
Our success is a testament to the talent and hard work of all
our employees and their dedication to the YouGov mission. I'd like
to thank everyone at YouGov for their commitment and teamwork
during my time as CEO and I look forward to leading the Board's
oversight of the Company's strategic direction in my role as
Non-Executive Chair.
I believe our chosen business model and strategy - to provide
high-quality market research through a connected data proposition -
plays to our strengths and expertise and will enable us to continue
to deliver long-term value to our stakeholders. We have an exciting
future ahead of us and I look forward to working with Steve and the
rest of the executive team to make YouGov the world's number one
market research company as the universal infrastructure of trusted
data sharing.
Stephan Shakespeare
Chair
10 October 2023
1 Defined in the explanation of non-IFRS measures below.
2 Following the above changes, the composition of the YouGov plc
Board Committees will be as noted below:
Audit & Risk Committee Nomination Committee Remuneration Committee
Ashley Martin (Chair) Stephan Shakespeare Rosemary Leith (Chair)
(Chair)
Rosemary Leith Shalini Govil-Pai Ashley Martin
Nick Prettejohn Rosemary Leith Andrea Newman
Devesh Mishra Ashley Martin Nick Prettejohn
Devesh Mishra Shalini Govil-Pai
Andrea Newman
Nick Prettejohn
Chief Executive Officer's Statement
YouGov is a business I have closely followed and admired for
some time, and I am honoured to have been selected to lead the
Company in its next phase of growth. The quality of YouGov's data
and its people is clear and is evidenced by the fact that some of
the world's most data-savvy companies are its major clients.
Rapid technological evolution, combined with growing concerns
over data integrity and privacy and the turbulent geopolitical
landscape have shaped a complex and ever-changing market
environment, bringing both challenges and opportunities. As the
industry evolves and places greater emphasis on high-quality data
to make strategic decisions, YouGov is well positioned to serve
their needs and continue to strengthen its position as a market
leader. This makes it a very exciting time to join YouGov and I
look forward to working with the wider Board and the full YouGov
team on the great opportunities that lie ahead.
From a financial perspective, the business is in a strong
position with the Company having delivered consistent top line
growth as well as improved profitability through higher
efficiencies and a focus on higher-margin projects. Along with the
wider market, the business has recently faced short-term headwinds
in the form of longer sales cycles and a slowdown in client
decision-making, however, its resilience and ability to perform
ahead of the market has been clearly demonstrated in the past
year.
Factors contributing to our positive performance in the period
include:
-- Existing clients: our largest clients continue to grow
their spend with us, particularly in Custom Research, despite
difficult macroeconomic conditions.
-- New products: Recently launched products such as YouGov
Safe and YouGov Surveys are beginning to show promise, and
data slices, subsets of our syndicated data products, are
helping us monetise existing datasets and expand their use
among clients.
-- Key geographies: The US remains our largest market albeit
we have seen some slowdown compared to prior years, primarily
due to the disruption in the technology sector, the UK has
performed well despite the overall negative sentiment in
the market.
-- Operational leverage: Investments in recent years to expand
our research capacity, central functions and CenX operations
are continuing to drive operational leverage as our revenue
grows.
Third strategic growth plan ("SP3")
YouGov develops medium to long-term strategic growth plans to
enable the business to determine key strategic priorities to work
towards and provide discipline to our investment approach. Our last
plan, FYP2, was centred around expanding our global reach,
furthering our product development by building a self-serve survey
tool and the YouGov Platform, and implementing a CenX model to
position ourselves for future growth.
YouGov's next strategic growth plan aims to deepen YouGov's
strategy and complete the final stage of positioning ourselves as a
platform business with a dual go-to-market strategy targeting
enterprise sales and a digital path to purchase. This strategic
growth plan is underpinned by three key growth areas:
-- Deepening client relations and increasing market penetration
through our syndicated data products and customised research;
-- Driving greater usage of our new self-serve platform, the
YouGov Platform, through a digital sales and marketing approach;
and
-- Targeting greenfield opportunities, such as newer products
and M&A, that will be incremental to the core growth plan.
The Company continues to see significant potential to grow its
existing business lines through several levers for both new and
existing clients. YouGov will work to increase its penetration with
brands, particularly in the US, grow the overall number of
subscriptions, target long-term, strategic tracking projects, and
scale fast-turnaround research volumes through the self-service
YouGov Platform.
Prior to the proposed acquisition of GfK's Consumer Panel
Business (GfK CPB), the Group set out two key financial targets, as
follows:
-- Medium-term revenue (excluding contribution from transformational
M&A) of GBP500 million; and
-- Medium-term adjusted operating profit margin of 25%.
These remain unchanged and the Group expects to revise this
medium-term guidance post the closing of the GfK CPB
transaction.
Based on our strategy and my initial observations, we have
identified some key areas that the Company will prioritise over the
medium-term:
-- Panel: We understand the importance of privacy to our
panel members and their desire to extract more value from
their data held by organisations. The Company will aim
to increase data sharing and panel activity, while continuously
looking to improve the member experience.
-- Platform: Following the initial launch of the YouGov
Platform, we will now focus on increasing functionality
and product availability, driving research volumes and
reducing inefficiencies and in time look to launch a widespread
marketing campaign to increase adoption.
-- Commercial teams: Increasing accountability within our
commercial teams and having clear plans to increase share
of wallet with key clients through cross-sell and up-sell
opportunities will be a key driver to achieving our ambitious
targets.
-- Artificial intelligence (AI): YouGov has long been using
machine-learning to demonstrate the quality of its data
through political predictions. We will look to further
the use of AI to build products, improve our research
capabilities and automate detection and removal of suspect
respondents. The continued global adoption of AI capabilities
will also create additional revenue opportunities for
YouGov given we have the ideal source data for AI models.
Environmental, social and governance ("ESG")
Like all aspects of YouGov, our ESG approach is built on core
principles of transparency and trust. We champion responsible,
ethical, and sustainable business practices across our operations,
which is reflected in our robust ESG commitments. From giving a
voice to millions of members worldwide to investing in career
development opportunities to support diverse talent in our
workforce, we are driven by shared values and vision to create a
positive impact in the wider community.
This year saw the conclusion of our second ESG Roadmap,
encompassing actions within individual Environmental, Social, and
Governance Strategies. In preparation for our next long-term
strategic plan, we conducted our first ESG materiality assessment
in Spring 2023. We invited groups of stakeholders (including the
Board of Directors, employees, panel members, clients, investors
and suppliers) to rank the importance of ESG issues in order of
relevance to the business. The results have validated our existing
priorities, informed our next ESG Roadmap, and ensured that we
tailor our communications appropriately for each of our key
stakeholder groups.
While we operate in a naturally low-emission industry, we take a
proactive approach to understanding and mitigating our
environmental impact. To meet our new obligations to align our
reporting to Task Force on Climate-Related Disclosures (TCFD)
recommendations, we calculated our global carbon footprint for the
first time and took the important step of conducting a climate
scenario analysis to understand the key climate-related risks and
opportunities relevant to our business. The results of this
exercise have been incorporated into our risk management framework,
and in the next year we will be developing progressive long-term
and interim net zero targets.
Our panel is our largest stakeholder group at 26 million
registered members. With the launch of YouGov Plus this year, our
dedicated Panel team has been able to draw on direct member
feedback to enhance the member experience and ensure our panel
remains representative, inclusive, and accessible. YouGov Plus is a
new premium tier membership for our most active and committed
members in the UK and the US, and they have been invited to provide
valuable input through designated tasks and video calls that help
us make tangible, positive changes and empowers members by
amplifying their voices. The strength of our panel engagement
efforts pairs with the expertise of our researchers to ensure
surveys are designed in an unbiased way with consideration for
cultural and regional sensitivities. This means clients can trust
us to deliver accurate and reliable results that can inform their
own ESG agendas.
Governance is fundamental not just to our ESG strategy, but to
our success as a business. Our compliance team ensures we are
meeting all regulatory requirements with transparency and
accountability, while our data privacy and security specialists
maintain a rigorous framework to reinforce trust with anyone who
provides us with their personal data. In 2023, we held our second
annual ESG Deep Dive presentation to the Board of Directors, with
quarterly, action-oriented communications to senior leaders, to
ensure ESG is led from the top with a shared understanding of
priorities.
People and Culture
To maintain a truly representative and highly engaged panel, it
is important that we champion diversity in our workforce and
actively foster an inclusive workplace. In early 2023 we published
our first annual Workforce Diversity Report, which set a baseline
from which to measure progress against our Diversity &
Inclusion goals and communicated the range of initiatives we have
in place to identify and address representation gaps. We are
continuously investing in career development opportunities for our
employees, with specialised training programmes such as YouLead
(for aspiring leaders) and YouManage (for new line managers) to
encourage internal progression and foster support networks across
teams and regions.
Our success as a business depends on employees being empowered
to thrive in a rewarding culture, which is defined by a
collaborative spirit and a desire to make an impact. To foster high
performance, we appreciate the need for more open communication and
will look to ensure that all our employees have clear sight of our
goals and expectations, and will work to tackle any obstacles as a
more connected team. We are united by shared values and we want to
create an environment for each of us to be fulfilled and deliver
career-defining work that we are proud of, while supporting our
social mission to give a voice to millions of people for the
benefit of the wider community.
Current trading and outlook
Early trading in the new financial year is in line with
management expectations. After a temporary pause in the second half
of FY23, we are seeing sales momentum from the technology sector
starting to return. We expect overall Group performance to build
through the course of the year as the new budget year begins for
our clients.
We remain confident in the Group's prospects for FY24 and in
meeting current market expectations on a stand-alone basis (pre-GfK
CPB). Our initial focus in FY24 has been on developing detailed
commercial plans for our key clients and increase awareness of the
entire YouGov product suite within our existing clients. We expect
the Company to continue to reap operational leverage benefits from
the technological and headcount investments made in FYP2, leading
to ongoing margin expansion as revenue growth continues.
We continue to retain strong cash balances, notwithstanding the
funds set aside for the proposed acquisition of the GfK CPB and aim
to maintain capital expenditures for FY24 in line with the prior
year.
YouGov has a clear purpose and great talent that is passionate
about the Company's mission. Combining that purpose and passion
with our ongoing investment in data and technology provides us a
strong foundation for achieving our ambitions.
I would like to thank the Board for trusting me to take the helm
at YouGov. I am committed to delivering stakeholder value to our
registered members, partners, clients, investors and employees and
I appreciate their ongoing commitment and support.
Steve Hatch
Chief Executive Officer
10 October 2023
1 Defined in the explanation of non-IFRS measures below.
Chief Finance Officer's Review
The Group has delivered a strong performance in the 12 months to
31 July 2023, the final year of FYP2 which ran from FY19-FY23. The
business has demonstrated its ability to consistently deliver
growth ahead of the market, with industry body ESOMAR estimating
that the established research segment grew 5% in 2022, down from 9%
in 2021.
Group revenue was up 17% in reported terms to GBP258.3m during
the period (9% up on an underlying(1) basis), while adjusted
operating profit(1) increased by 33% on the prior financial year to
GBP48. 3m. This is a strong performance particularly in the context
of difficult macroeconomic conditions and in a market that has
decelerated following the initial post-pandemic recovery period.
Our track record of growth was recognised in the recent ESOMAR list
of top 20 Established Market Research firms globally and we were
pleased to be ranked as the third fastest-growing company in the
list.
Adjusted operating margins
Gross margins increased slightly to 86% (FY22: 85%), on the back
of operational leverage and a concerted focus on maximising higher
margin on-panel research.
Group operating costs (excluding separately reported items) of
GBP172.6m (FY22: GBP151.1m) increased by 14% in reported terms.
Adjusted operating profit(1) increased by 33% to GBP48.3m on a
reported basis (23% on an underlying(1) basis), representing an
improvement in the adjusted operating margin to 18.7% (FY22:
16.4%), as a result of disciplined cost management and operational
gearing following a sustained period of investment in the business.
The Group's statutory operating profit increased to GBP44.4m (FY22:
GBP30.0m), after charging other separately reported items of
GBP3.9m (FY22: GBP6.3m).
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 suite includes YouGov BrandIndex
and YouGov Profiles as well as newer behavioural and transactional
data products.
Performance in the Data Products division in H2 FY23 was
consistent with the first half on an underlying(1) basis, as
stronger performance in the UK and Mainland Europe was offset by
slower growth in the US. Throughout the year our sales teams have
maintained strong renewal rates, however, lower uptake of new
subscriptions has resulted in slower growth in the year. Revenue
from Data Products increased by 16% (10% growth in underlying(1)
terms) in the period. The adjusted operating profit(1) from Data
Products increased by 33% to GBP36.0m on the back of higher
operational leverage from syndicated products, resulting in a
560bps improvement in the adjusted operating margin(1) to 42%
(FY22: 36%).
Geographically, the US remains the largest Data Products market
and grew by 16% in the period (7% from the underlying(1) business),
while the second largest market, the UK, delivered 20%
underlying(1) growth in the period.
Data Services
Our Data Services division consists of our fast-turnaround
research services, including our YouGov RealTime Omnibus
service.
As highlighted previously and seen across the industry, demand
for fast-turnaround research has been more muted over the past year
as client research budgets have come under pressure. Revenue
decreased by 6% in reported and 8% in underlying(1) terms to
GBP47.8m, with media agencies and the retail sector seeing the
largest declines. Performance in Mainland Europe was particularly
impacted, as geopolitical conflicts and poor sentiment led to lower
tactical PR work, while performance in the UK was largely flat.
As a result of the division's lower revenue performance,
adjusted operating profit(1) decreased 2% over the prior year to
GBP7.5m and the margin expanded slightly from 15% to 16%, as the
division reaped cost benefits from the shift of operational
delivery of standardised research projects into the CenX.
Custom Research
Our Custom Research division includes tailored research projects
and tracking studies.
During the period, the division's revenue grew by 27% in
reported terms to GBP121.8m, with growth seen across all regions.
On an underlying(1) basis, revenue growth was 17%, driven by
Mainland Europe on the back of major client wins, and good
performance in the UK, particularly in the sports and financial
services sectors. The US continued to perform well, delivering low
double-digit growth on an underlying basis(1) , albeit impacted by
the slowdown in the technology sector.
The adjusted operating profit(1) increased by 31% to GBP27.5m
and the adjusted operating margin expanded to 23% (FY22: 22%),
including a full year dilutive impact from the LINK acquisition, as
the focus on project profitability continues.
Revenue Year to Year to Revenue Underlying
31 July 31 July growth (1) revenue
2023 2022 % change
GBPm GBPm %
------------------------- --------- --------- -------- -------------
Data Products 85.9 74.1 16% 10%
--------- --------- -------- -------------
Data Services 47.8 50.7 (6%) (8%)
--------- --------- -------- -------------
Custom Research 121.8 95. 6 27% 17%
--------- --------- -------- -------------
Intra-Group and Central
revenues 2.8 0.7 - -
--------- --------- -------- -------------
Group 258.3 221.1 17% 9%
--------- --------- -------- -------------
Adjusted Operating Year to Year to Adjusted Adjusted Operating
Profit (1) 31 July 31 July Operating Margin %
2023 2022 Profit
GBPm GBPm growth
%
Year to Year to
31 July 31 July
2023 2022
---------- ---------
Data Products 36.0 27.0 33% 42% 36%
--------- --------- ----------- ---------- ---------
Data Services 7.5 7.7 (3%) 16% 15%
--------- --------- ----------- ---------- ---------
Custom Research 27.5 21.0 31% 23% 22%
--------- --------- ----------- ---------- ---------
Central items (22.7) (19.4) - - -
--------- --------- ----------- ---------- ---------
Group 48.3 36.3 33% 19% 16%
--------- --------- ----------- ---------- ---------
Performance by geography
YouGov's geographic footprint spans the UK, Mainland Europe, the
Americas, Asia Pacific and the Middle East.
Revenue Year to Year to Revenue Underlying
31 July 31 July growth (1)
2023 2022 % revenue
GBPm GBPm change
%
UK 65.6 57.9 13% 13%
--------- --------- -------- -----------
Americas 116.4 99.5 17% 8%
--------- --------- -------- -----------
Mainland Europe 58. 2 45. 7 27% 14%
--------- --------- -------- -----------
Middle East 8. 8 6. 2 42% 32%
--------- --------- -------- -----------
Asia Pacific 23.5 20.8 13% 12%
--------- --------- -------- -----------
Intra-Group revenues (14.2) (9.0) - -
--------- --------- -------- -----------
Group 258.3 221.1 17% 9%
--------- --------- -------- -----------
Adjusted Operating Year to Year to Operating Operating Margin
Profit (1) 31 July 31 Jul Profit %
2023 2022 growth
GBPm GBPm %
--------------------
Year to Year to
31 July 31 July
2023 2022
--------- ---------
UK 19.5 17. 8 10% 30% 31%
--------- -------- ---------- --------- ---------
Americas 41.1 32. 1 28% 35% 32%
--------- -------- ---------- --------- ---------
Mainland Europe 4.8 3.3 45% 8% 7%
--------- -------- ---------- --------- ---------
Middle East 2.5 1. 7 47% 28% 27%
--------- -------- ---------- --------- ---------
Asia Pacific 3.6 1.8 100% 15% 9%
--------- -------- ---------- --------- ---------
Central items (23.2) (20. 4) - - -
--------- -------- ---------- --------- ---------
Group 48.3 36.3 33% 19% 16%
--------- -------- ---------- --------- ---------
Panel development by geography
We continued to invest in our panel to ensure we are able to
meet our clients' research needs and to deliver nationally
representative samples in our newer markets. As at 31 July 2023,
the total number of registered panellists had increased by 15% to
25.65 million, compared to 22.25 million as at 31 July 2022, as set
out in the table below.
Region Panel size Panel size Change
at at %
31 July 2023 31 July 2022
millions millions
UK 2.88 2.67 8%
-------------- -------------- -------
Americas 9.28 8.05 15%
-------------- -------------- -------
Mainland Europe 5.88 4.93 19%
-------------- -------------- -------
MENA 3.07 2.76 11%
-------------- -------------- -------
Asia Pacific 4.54 3.85 18%
-------------- -------------- -------
Total 25.65 22.25 15 %
-------------- -------------- -------
Group financial performance
Amortisation of intangible assets
In the 12 months to 31 July 2023, amortisation charges for
intangible assets of GBP21.0m were GBP0.6m higher than the previous
year. The increase in the amortisation of our panel assets was
limited, growing GBP0.6m to GBP10.5m, as the accelerated
amortisation of some of our newer panels has stabilised following
the initial investment in FY21. Amortisation of software increased
by GBP0.2m to GBP9.3m. GBP7.9m (FY22: GBP7.7m) of the total
software development charge related to assets created through the
Group's own internal development activities, GBP1.2m (FY22:
GBP0.8m) related to separately acquired assets and GBP0.2m (FY22:
GBP0.5m) was for amortisation on assets acquired through business
combinations.
Separately reported items
Acquisition-related costs in the year of GBP5.0m includes
GBP4.8m of costs in relation to the planned acquisition of GfK CPB
of which GBP0.4m relates to bridge debt facility fees and the
remaining GBP4.4m of fees relates to professional advisory services
from banks, lawyers and accountants. There has also been a net
GBP1.1m release of previously accrued contingent consideration
treated as staff costs in respect of the acquisitions of Portent.io
Limited, Charlton Insights Inc., YouGov Finance Limited (formerly
Lean App Limited) and Faster Horses Pty Limited. The release of the
accrual was, primarily, in relation to Faster Horses where the
earn-out performance has not been as strong as initially
expected.
Acquisition related costs in the comparative period comprise
GBP5.2m contingent consideration treated as staff costs in respect
of the acquisitions of Portent.io Limited, Charlton Insights Inc.,
YouGov Finance Limited (formerly Lean App Limited) and Faster
Horses Pty Limited and GBP1.1m of transaction costs in respect of
newly acquired entities.
Reconciliation of adjusted operating profit to adjusted profit
after tax and earnings per share
Adjusted profit before tax(1) of GBP56.4m was an increase of 63%
versus the prior year, well ahead of adjusted operating profit
growth, as the prior year was impacted by foreign exchange losses
related to intercompany loans. The adjusted tax rate(1) decreased
from 24% in FY22 to 21% in the period. Statutory profit before tax
of GBP44.7m was reported compared to GBP25.3m in the year ended 31
July 2022, an increase of 77%.
During the period adjusted earnings per share(1) grew by 71%
from 23.7p to 40.5p, and statutory earnings per share increased
from 15.7p to 31.5p.
31 July 31 July
2023 2022
-------- --------
GBPm GBPm
-------- --------
Adjusted operating profit(1) 48.3 36.3
-------- --------
Share-based payments 7.6 2.9
-------- --------
Imputed interest 0.2 0.1
-------- --------
Net finance income / (expense) 0.3 (4.6)
-------- --------
Adjusted profit before tax(1) 56.4 34.7
-------- --------
Adjusted taxation(1) (12.1) (8.4)
-------- --------
Adjusted profit after tax(1) 44.3 26.3
-------- --------
Adjusted earnings per share (pence)(1) 40.5 p 23.7p
-------- --------
Cash flow and capital expenditure
The Group generated GBP69.0m (FY22: GBP69.7m) in cash from
operations (before paying interest and tax) including a GBP4.2m
outflow (FY22: GBP6.6m inflow) from net working capital and GBP2.3m
payment for deferred consideration; the cash conversion rate
(percentage of adjusted EBITDA(1) converted to cash) decreased from
113% to 93% of adjusted EBITDA(1) . Taxation payments for the year
totalled GBP9.3m (FY22: GBP6.9m).
The Group invested GBP7.8m (FY22: GBP6.9m) in the continuing
development of our technology platform internally and GBP1.2m
(FY22: GBP1.1m) was invested on separately-acquired software tools.
Investment in panel recruitment was largely in line with last year
at GBP7.3m (FY22: GBP8.0m) as we look to utilise more
cost-effective recruitment methods. In addition, GBP1.1m (FY22:
GBP1.5m) was spent on the purchase of property, plant and
equipment, resulting in a total investment in fixed assets of
GBP17.4m (FY22: GBP17.5m).
Total expenditure on intangible assets and property, plant and
equipment is shown below:
31 July 31 July
2023 2022
GBPm GBPm
------------------------------------------- -------- --------
Software development 9.0 8.0
Panel recruitment 7.3 8.0
Total expenditure on intangible assets 16.3 16.0
Purchase of property, plant and equipment 1.1 1.5
------------------------------------------- -------- --------
Total capital expenditure 17.4 17.5
------------------------------------------- -------- --------
Net inflow from financing activities includes GBP49.8m proceeds
from the equity placing in relation to the proposed acquisition of
GfK CPB, the dividend payment of GBP7.7m (FY22: GBP6.7m) and the
purchase of treasury shares for GBP9.8m to satisfy future employee
share option exercises (FY22: GBP9.9m). The GBP20.0m revolving
facility remained undrawn during the year and was cancelled in July
2023. As a result, net cash balances at the year-end increased by
GBP69.8m to GBP107.2m.
Currency
The Group's results were impacted by the net depreciation of UK
Sterling, as its average exchange rate was 9% lower against the US
Dollar in this period against the prior period. Movement against
the Euro was 3% lower compared to 31 July 2022. The net impact of
foreign exchange on the Group's adjusted operating profit(1) was an
increase of GBP3.2m compared to calculation in constant currency
terms.
Balance sheet
As at 31 July 2023, total shareholders' funds increased from
GBP125.3m to GBP196.4m. Net assets increased from GBP125.0m to
GBP196.2m, with a minority interest of GBP0.2m accounting for the
difference. Net current assets increased from GBP4.5m to GBP74.1m.
Current assets increased from GBP95.0m to GBP165.2m, mainly due to
the increased cash balance in relation to the aforementioned equity
placing. Current liabilities balance was similar to the prior year.
Non-current liabilities decreased by GBP7.5m to GBP17.0m, mainly
due to a decrease of GBP3.9m in deferred tax liabilities, and
GBP2.4m in contingent consideration.
Proposed dividend
The Board is recommending the payment of a final dividend of
8.75p per share for the year ended 31 July 2023. If shareholders
approve the dividend at the AGM (scheduled for 7 December 2023), it
will be paid on Monday 11 December 2023 to all shareholders who
were on the Register of Members at close of business on Friday 1
December 2023.
Alex McIntosh
Chief Finance Officer
10 October 2023
1 Defined in the explanation of non-IFRS measures below.
Explanation of non-IFRS measures
Financial measure How we define it Why we use it
Separately reported Items that in the Directors' Provides a more comparable
items judgement are one-off or basis to assess the
need to be disclosed separately year-to-year operational
by virtue of their size business performance
or incidence
--------------------------------- ---------------------------
Adjusted operating Operating profit excluding
profit separately reported items
--------------------------------- ---------------------------
Adjusted operating Adjusted operating profit
profit margin expressed as a percentage
of revenue
---------------------------------
Adjusted EBITDA Adjusted operating profit
before depreciation and
amortisation
---------------------------------
Adjusted profit Profit before tax before
before tax share-based payment charges,
social taxes on share-based
payments, imputed interest
and separately reported
items
---------------------------------
Underlying growth Growth in business excluding
impact of current and prior
period acquisitions and
business closures, and
movement in exchange rates
(i.e. current year performance
calculated with exchange
rates held constant at
prior year rates).
--------------------------------- ---------------------------
Adjusted taxation Taxation due on the adjusted Provides a more comparable
profit before tax, thus basis to assess the
excluding the tax effect underlying tax rate
of exceptional items
--------------------------------- ---------------------------
Adjusted tax rate Adjusted taxation expressed
as a percentage of adjusted
profit before tax
--------------------------------- ---------------------------
Adjusted profit Adjusted profit before Facilitates performance
after tax tax less adjusted taxation evaluation, individually
and relative to other
companies
--------------------------------- ---------------------------
Adjusted profit Adjusted profit after tax
after tax attributable less profit attributable
to owners of the to non-controlling interests
parent
--------------------------------- ---------------------------
Adjusted basic earnings Adjusted profit after tax
per share attributable to owners
of the parent divided by
the weighted average number
of shares. Adjusted diluted
earnings per share includes
the impact of dilutive
share options
--------------------------------- ---------------------------
Constant currency Current year revenue compared Shows the underlying
revenue change to prior year revenue in revenue change by
local currency translated eliminating the impact
at the current year average of foreign exchange
exchange rates rate movements
--------------------------------- ---------------------------
Cash conversion The ratio of cash generated Indicates the extent
from operations to adjusted to which the business
EBITDA generates cash from
adjusted operating
profits
--------------------------------- ---------------------------
Compound annual The annualised average Indicates the mean
growth rate (CAGR) rate of growth between annual growth rate
two given years, assuming for a specified period
growth takes place at a of time longer than
cumulative rate one year
--------------------------------- ---------------------------
Reconciliation of non-IFRS measures
Revenue reconciliation Year Year Change
to to %
31 July 31 July
2023 2022
GBPm GBPm
Revenue 258.3 221.1 17%
--------- --------- -------
FX impact - 11.1 -
--------- --------- -------
Acquisitions (20.3) (12.9) -
--------- --------- -------
Underlying revenue 238.1 219.3 9%
--------- --------- -------
Operating Profit reconciliation Year Year Change
to to %
31 July 31 July
2023 2022
GBPm GBPm
Statutory Operating Profit 44.4 30.0 48%
--------- --------- -------
Acquisition-related costs 3.9 6.3 (38%)
--------- --------- -------
Adjusted Operating Profit 48.3 36.3 33%
--------- --------- -------
FX impact - 3.2 -
--------- --------- -------
Acquisitions 1.1 0.8 38%
--------- --------- -------
Underlying(1) operating profit 49.4 40.3 23%
--------- --------- -------
Adjusted EBITDA(1) reconciliation Year Year Change
to to %
31 July 31 July
2023 2022
GBPm GBPm
Adjusted Operating Profit 48.3 36.3 33%
--------- --------- -------
Depreciation 4.3 4.9 (12%)
--------- --------- -------
Amortisation 21.0 20.4 3%
--------- --------- -------
Adjusted EBITDA 73.6 61.6 19%
--------- --------- -------
1 Defined in the explanation of non-IFRS
measures above.
Publication of Non-Statutory Accounts
The financial information relating to the year ended 31 July
2023 set out below does not constitute the Group's statutory
accounts for that year but has been extracted from the statutory
accounts, which received an unqualified auditors' report and which
have not yet been filed with the Registrar.
Consolidated Income Statement
for the year ended 31 July 2023
2023 2022
=================================================================
Note GBPm GBPm
================================================================= ===== ======== ========
Revenue 1 258.3 221.1
Cost of sales (37.4) (33.7)
================================================================= ===== ======== ========
Gross profit 220.9 187.4
Administrative expenses (176.5) (157.4)
================================================================= ===== ======== ========
Operating profit 44.4 30.0
================================================================= ===== ======== ========
Separately reported items 2 3.9 6.3
Adjusted operating profit 48.3 36.3
================================================================= ===== ======== ========
Finance income 1.0 -
Finance costs (0.7) (4.7)
Profit before taxation 44.7 25.3
Taxation 3 (10.1) (7.8)
================================================================= ===== ======== ========
Profit after taxation 34.6 17.5
================================================================= ===== ======== ========
Attributable to:
- Owners of the parent 34.5 17.1
- Non-controlling interests 0.1 0.4
================================================================= ===== ======== ========
34.6 17.5
================================================================= ===== ======== ========
Earnings per share
Basic earnings per share attributable to owners of the parent 5 31.5 15.7
Diluted earnings per share attributable to owners of the parent 5 30.8 15.4
================================================================= ===== ======== ========
All operations are continuing.
Consolidated Statement of Comprehensive Income
for the year ended 31 July 2023
2023 2022
===============================================================
GBPm GBPm
=============================================================== ====== =====
Profit for the year 34.6 17.5
Other comprehensive (expense)/income:
Items that will not be reclassified to profit or loss
Actuarial gains 0.4 1.2
Items that may be subsequently reclassified to profit or loss
Currency translation differences (2.9) 7.0
================================================================ ====== =====
Other comprehensive (expense)/ income for the year (2.5) 8.2
================================================================ ====== =====
Total comprehensive income for the year 32.1 25.7
================================================================ ====== =====
Attributable to:
- Owners of the parent 32.0 25.3
- Non-controlling interests 0.1 0.4
================================================================ ====== =====
Total comprehensive income for the year 32.1 25.7
================================================================ ====== =====
Items in the statement above are disclosed net of tax.
Consolidated Statement of Financial Position
as at 31 July 2023
2023 2022
(restated)(1)
Note GBPm GBPm
===== ======= ================
Assets
Non-current assets
Goodwill 7 82.4 83.1
Other intangible assets 8 31.9 35.1
Property, plant and equipment 3.6 4.2
Right-of-use assets 10.1 11.3
Deferred tax assets 11.1 11.3
=================================================== ===== ======= ================
Total non-current assets 139.1 145.0
=================================================== ===== ======= ================
Current assets
Trade and other receivables 9 55.0 53.5
Current tax assets 3.0 4.1
Cash and cash equivalents 107.2 37.4
=================================================== ===== ======= ================
Total current assets 165.2 95.0
=================================================== ===== ======= ================
Total assets 304.3 240.0
=================================================== ===== ======= ================
Liabilities
Current liabilities
Trade and other payables 10 64.7 66.8
Current tax liabilities 7.0 3.5
Contingent consideration 4.4 6.1
Provisions 11.9 11.2
Lease liabilities 3.1 2.9
=================================================== ===== ======= ================
Total current liabilities 91.1 90.5
=================================================== ===== ======= ================
Net current assets 74.1 4.5
=================================================== ===== ======= ================
Non-current liabilities
Contingent consideration - 2.4
Provisions 6.8 6.7
Defined benefit Pension net liability 1.9 2.0
Lease liabilities 8.1 9.3
Deferred tax liabilities 0.2 4.1
=================================================== ===== ======= ================
Total non-current liabilities 17.0 24.5
=================================================== ===== ======= ================
Total liabilities 108.1 115.0
=================================================== ===== ======= ================
Net assets 196.2 125.0
=================================================== ===== ======= ================
Equity
Issued share capital 0.2 0.2
Share premium 81.1 31.5
Treasury reserve (19.4) (9.6)
Merger reserve 9.2 9.2
Foreign exchange reserve 11.7 14.6
Retained earnings 113.6 79.4
=================================================== ===== ======= ================
Total equity attributable to owners of the parent 196.4 125.3
Non-controlling interests in equity (0.2) (0.3)
=================================================== ===== ======= ================
Total equity 196.2 125.0
=================================================== ===== ======= ================
1 As required by IFRS3, fair value adjustments have been made
during the measurement period, as explained in the FY22
restatements section below
Consolidated Statement of Changes in Equity
for the year ended 31 July 2023
Attributable to equity holders
of the Company
============================================================================
Issued Share Treasury Merger Foreign Retained Equity Non- Total
share premium reserve reserve exchange earnings attributable controlling
capital reserve to owners interests
of the in equity
Note parent
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
================== ===== ======== ======== ========= ======== ========= ========= ============= ============ =======
Balance at 1
August
2021 0.2 31.5 (2.3) 9.2 7.6 66.5 112.7 (0.7) 112.0
Actuarial gains - - - - - 1.2 1.2 - 1.2
Exchange
differences
on translation - - - - 7.0 - 7.0 - 7.0
================== ===== ======== ======== ========= ======== ========= ========= ============= ============ =======
Net gain
recognised
directly in
equity - - - - 7.0 1.2 8.2 - 8.2
Profit for the
year - - - - - 17.1 17.1 0.4 17.5
================== ===== ======== ======== ========= ======== ========= ========= ============= ============ =======
Total
comprehensive
income for the
year - - - - 7.0 18.3 25.3 0.4 25.7
================== ===== ======== ======== ========= ======== ========= ========= ============= ============ =======
Issue of shares - - - - - - - - -
Acquisition of
treasury
shares - - (9.9) - - - (9.9) - (9.9)
Treasury shares
used
to settle share
option
exercises - - 2.6 - - (2.6) - - -
Dividends paid 4 - - - - - (6.7) (6.7) - (6.7)
Share-based
payments - - - - - 2.9 2.9 - 2.9
Tax in relation
to
share-based
payments - - - - - 1.0 1.0 - 1.0
================== ===== ======== ======== ========= ======== ========= ========= ============= ============ =======
Total
transactions
with owners
recognised
directly in
equity - - (7.3) - - (5.4) (12.7) - (12.7)
================== ===== ======== ======== ========= ======== ========= ========= ============= ============ =======
Balance at 31
July
2022 0.2 31.5 (9.6) 9.2 14.6 79.4 125.3 (0.3) 125.0
Actuarial gains - - - - - 0.4 0.4 - 0.4
Exchange
differences
on translation - - - - (2.9) - (2.9) - (2.9)
================== ===== ======== ======== ========= ======== ========= ========= ============= ============ =======
Net (loss)/gain
recognised
directly in
equity - - - - (2.9) 0.4 (2.5) - (2.5)
Profit for the
year - - - - - 34.5 34.5 0.1 34.6
================== ===== ======== ======== ========= ======== ========= ========= ============= ============ =======
Total
comprehensive
income/(expense)
for
the year - - - - (2.9) 34.9 32.0 0.1 32.1
================== ===== ======== ======== ========= ======== ========= ========= ============= ============ =======
Issue of shares - 49.6 - - - - 49.6 - 49.6
Acquisition of
treasury
shares - - (9.9) - - - (9.9) - (9.9)
Treasury shares
used
to settle share
option
exercises - - 0.1 - - (0.1) - - -
Dividends paid 4 - - - - - (7.7) (7.7) - (7.7)
Share-based
payments - - - - - 7.6 7.6 - 7.6
Tax in relation
to
above other
items - - - - - (0.5) (0.5) - (0.5)
===== ======== ======== ========= ======== ========= ========= ============= ============ =======
Total
transactions
with owners
recognised
directly in
equity - 49.6 (9.8) - - (0.7) 39.1 - 39.1
================== ===== ======== ======== ========= ======== ========= ========= ============= ============ =======
Balance at 31
July
2023 0.2 81.1 (19.4) 9.2 11.7 113.6 196.4 (0.2) 196.2
================== ===== ======== ======== ========= ======== ========= ========= ============= ============ =======
Consolidated Statement of Cash Flows
for the year ended 31 July 2023
2023 2022
Note GBPm GBPm
=============================================== ===== ======= =======
Cash flows from operating activities
Profit before taxation 44.7 25.3
Adjustments for:
Finance income (0.3) -
Finance costs 0.7 1.0
Amortisation of intangibles 8 21.0 20.4
Depreciation 4.3 4.9
Share-based payments 7.6 2.9
Other non-cash items(1) (2.5) 8.6
Settlement of deferred consideration (2.3) -
(Increase) in trade and other receivables (0.1) (4.4)
(Decrease)/increase in trade and other payables (3.1) 9.5
(Decrease)/increase in provisions (1,0) 1.5
=============================================== ===== ======= =======
Cash generated from operations 69.0 69.7
Interest paid (0.5) (0.9)
Income taxes paid (9.3) (6.9)
=============================================== ===== ======= =======
Net cash generated from operating activities 59.2 61.9
====================================================== ======= =======
Cash flow from investing activities
Acquisition of subsidiaries (net of cash acquired) - (25.4)
Purchase of property, plant and equipment (1.1) (1.5)
Purchase of intangible assets (16.3) (16.0)
Interest received 0.3 -
=============================================== ===== ======= =======
Net cash used in investing activities (17.1) (42.9)
=============================================== ===== ======= =======
Cash flows from financing activities
Proceeds from the issue of share capital 49.8 -
Principal element of lease payments (3.2) (3.4)
Draw down of bank loans - 20.0
Repayment of bank loans - (20.0)
Dividends paid to shareholders (7.7) (6.7)
Purchase of treasury shares (9.8) (9.9)
Net cash generated from / (used) in
financing activities 29.1 (20.0)
=============================================== ===== ======= =======
Net increase/ (decrease) in cash and cash
equivalents 71.2 (1.0)
Cash and cash equivalents at beginning of year 37.4 35.5
Exchange (loss)/gain on cash and cash equivalents (1.4) 2.9
====================================================== ======= =======
Cash and cash equivalents at end of
year 107.2 37.4
=============================================== ===== ======= =======
1 Includes (GBP1.8m) (2022: GBP5.2m) of contingent consideration
in respect of acquisitions treated as staff costs and foreign
exchange costs.
Notes to the Consolidated Financial Statements
for the year ended 31 July 2023
Nature of operations
YouGov plc and subsidiaries' (the "Group") principal activity is
the provision of digital market research.
YouGov plc (the "Company") is the Group's ultimate Parent
Company. It is a public limited company incorporated and domiciled
in the United Kingdom. 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 UK Sterling. Figures are rounded to the nearest
million UK Sterling, unless otherwise indicated.
Basis of preparation
The following financial information does not amount to full
financial statements within the meaning of Section 434 of Companies
Act 2006. The financial information has been extracted from the
Group's Annual Report and Financial Statements for the year ended
31 July 2023.
The consolidated financial statements of YouGov plc are for the
year ended 31 July 2023. They have been prepared under the
historical cost convention modified for fair values under
International Financial Reporting Standards ("IFRS"). Financial
assets, such as defined benefit plan assets, and financial
liabilities, such as contingent consideration, are measured at fair
value. These consolidated financial statements have been prepared
in accordance with UK-adopted international accounting standards in
conformity with the requirements of the Companies Act 2006
applicable to companies reporting under IFRS.
The separate financial statements of the Company are presented
as required by the Companies Act 2006.
Financial statements for the year ended 31 July 2022 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 2023
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.
FY22 restatements
In the prior year, the Group acquired LINK Marketing Services AG
(LINK), a Swiss market research business. The Group initially
estimated a value of GBP7.0m for the customer contract intangible
assets, based on forecast revenue and operating costs for servicing
those contracts. Due to information gathered within the first year
of operating LINK, the Group has updated the valuation of the
opening customer contract intangible assets to GBP4.1m and has
reduced the associated deferred tax liability by GBP0.4m with a
corresponding GBP2.9m increase in the goodwill for LINK, net of a
GBP0.2m adjustment in respect of deferred tax and working capital
(see Note 7 and Note 8). This has been retrospectively adjusted on
the consolidated balance sheet as 31 July 2022 as required by IFRS
3.
Going concern
The Group and Parent Company meets their day-to-day working
capital requirements through their strong cash reserves. At 31 July
2023, the Group had a healthy liquidity position with GBP107.2m of
cash and cash equivalents and no debt financing commitments. The
Group has net current assets of GBP74.1m and net assets of
GBP196.2m as at 31 July 2023.
Management consider it is appropriate to continue to adopt the
going concern basis in preparing the Consolidated and Parent
Company financial statements. In doing so, management has
considered:
-- The impact of the heightened economic uncertainty resulting
in rising inflation and relatively high interest rates
on the Group's operations;
-- The Group's revenue sources and operations are well diversified,
by country, currency and sector so there is a track record
of growth;
Notes to the Consolidated Financial Statements Continued
for the year ended 31 July 2023
-- Strong cashflows in the current year and projected these
for the next two years (based upon the Group's budget for
the year ending 31 July 2024);
-- Available funding, including the GBP51m share placing, term
loan facility in place and the related covenants;
-- The liquidity impact of the planned acquisition of the Consumer
Panel Business of GfK SE; and
-- The Group's ability to flex its cost base in response to
any unexpected reductions in trading activity.
As disclosed in Note 6, the group is in the process of acquiring
the Consumer Panel Business of GfK SE. This will be funded from
cash on hand (which arose from a GBP51m share placing and strong
operating cashflows) and a EUR240m term loan facility. The facility
includes half-yearly covenant test for EBITDA leverage and interest
cover. The Consumer Panel Business is a division of GfK and brings
with it healthy operating cash flows generated from a high
proportion of steady recurring revenue streams.
A severe but plausible downside scenario has been modelled where
revenue targets are missed by up to 20% (existing YouGov business)
and a 10% miss for the planned acquisition, due to reduced revenue
(e.g. from clients' delays and a slowdown in securing new
business). These revenue sensitivities are considered appropriate
given the relative proportion of recurring revenue streams for each
business.
Even in this scenario, the Group has strong liquidity and does
not breach any banking covenants for the new term loan facility.
Mitigating actions within this downside scenario and ll within
management's control are:
-- Lowering sales commission and bonus payments; and
-- Reduced capital expenditure.
The Directors are therefore able to conclude that they have a
reasonable expectation that the Group and Parent Company have
adequate resources to continue in operational existence and meet
liabilities as they fall due for at least the next 12 months.
Therefore, the Group and Parent Company continue to adopt the going
concern basis in preparing the Consolidated and Parent Company
financial statements.
Notes to the Consolidated Financial Statements Continued
for the year ended 31 July 2023
1 Segmental analysis
The Board of Directors (which is the "chief operating decision
maker") primarily reviews information based on product lines, being
split as syndicated services such as Data Products and
non-syndicated services such as Custom Research and Data Services -
with supplemental geographical information. Revenue for FY23
included a full year contribution from businesses acquired in the
prior year - Rezonence Limited (acquired 30 September 2021) and
LINK Marketing Services AG (acquired 9 December 2021).
Other
revenue,
eliminations
Custom and unallocated
Research Data Products Data Services costs Group
2023 GBPm GBPm GBPm GBPm GBPm
========================= ========== ============== ============== ================= ========
Revenue
Recognised over time 40.4 83.7 0.3 2.6 127.0
Recognised at a point
in time 81.4 2.2 47.5 0.2 131.3
------------------------- ========== ============== ============== ================= ========
Total revenue 121.8 85.9 47.8 2.8 258.3
Cost of sales (21.4) (6.1) (7.0) (2.9) (37.4)
========================= ========== ============== ============== ================= ========
Gross profit 100.4 79.8 40.8 (0.1) 220.9
Administrative expenses (72.9) (43.8) (33.3) (22.6) (172.6)
========================= ========== ============== ============== ================= ========
Adjusted operating
profit/ (loss) 27.5 36.0 7.5 (22.7) 48.3
Separately reported
items - - - (3.9) (3.9)
========================= ========== ============== ============== ================= ========
Operating profit/
(loss) 27.5 36.0 7.5 (26.6) 44.4
Finance income 1.0
Finance costs (0.7)
Profit before taxation 44.7
Taxation (10.1)
========================= ========== ============== ============== ================= ========
Profit after taxation 34.6
========================= ========== ============== ============== ================= ========
Other
revenue,
eliminations
Custom and unallocated
Research Data Products Data Services costs Group
2022 GBPm GBPm GBPm GBPm GBPm
========================= ========== ============== ============== ================= ========
Revenue
Recognised over time 31.8 73.1 0.5 2.4 107.8
Recognised at a point
in time 63.8 1.0 50.2 (1.7) 113.3
------------------------- ========== ============== ============== ================= ========
Total revenue 95.6 74.1 50.7 0.7 221.1
Cost of sales (19.1) (6.6) (8.0) - (33.7)
========================= ========== ============== ============== ================= ========
Gross profit 76.5 67.5 42.7 0.7 187.4
Administrative expenses (55.5) (40.5) (35.0) (20.1) (151.1)
========================= ========== ============== ============== ================= ========
Adjusted operating
profit/ (loss) 21.0 27.0 7.7 (19.4) 36.3
Separately reported
items - - - (6.3) (6.3)
========================= ========== ============== ============== ================= ========
Operating profit/
(loss) 21.0 27.0 7.7 (25.7) 30.0
Finance income -
Finance costs (4.7)
Profit before taxation 25.3
Taxation (7.8)
========================= ========== ============== ============== ================= ========
Profit after taxation 17.5
========================= ========== ============== ============== ================= ========
Notes to the Consolidated Financial Statements Continued
for the year ended 31 July 2023
Supplementary analysis by geography
2023 2022
===================== =====================
Revenue Adjusted Revenue Adjusted
operating operating
profit/ profit/
(loss) (loss)
GBPm GBPm GBPm GBPm
========================= ======== =========== ======== ===========
UK 65.6 19.5 57.9 17.8
Americas 116.4 41.1 99.5 32.1
Mainland Europe 58.2 4.8 45.7 3.3
Middle East 8.8 2.5 6.2 1.7
Asia Pacific 23.5 3.6 20.8 1.8
Intra-group revenues
and other unallocated
revenues/ (costs) (14.2) (23.2) (9.0) (20.4)
========================= ======== =========== ======== ===========
Group 258.3 48.3 221.1 36.3
========================= ======== =========== ======== ===========
2 Separately reported items
2023 2022
===========================
GBPm GBPm
=========================== ===== =====
Acquisition-related costs 3.9 6.3
=========================== ===== =====
Acquisition-related costs in the year of GBP5.0m includes
GBP4.8m of costs in relation to the planned acquisition of GfK CPB
of which GBP0.4m relates to bridge debt facility fees and the
remaining GBP4.4m of fees relates to professional advisory services
from banks, lawyers and accountants. There has also been a net
GBP1.1m release of previously accrued contingent consideration
treated as staff costs in respect of the acquisitions of Portent.io
Limited, Charlton Insights Inc., YouGov Finance Limited (formerly
Lean App Limited) and Faster Horses Pty Limited. The release of the
accrual was, primarily, in relation to Faster Horses where the
earn-out performance has not been as strong as initially
expected.
Acquisition-related costs in the comparative period comprise of
GBP5.2m contingent consideration treated as staff costs in respect
of the acquisitions of Portent.io Limited, Charlton Insights Inc.,
YouGov Finance Limited (formerly Lean App Limited) and Faster
Horses Pty Limited and GBP1.1m of transaction costs in respect of
newly acquired entities.
Notes to the Consolidated Financial Statements Continued
for the year ended 31 July 2023
3 Taxation
The taxation charge represents:
2023 2022
GBPm GBPm
====== ======
Current tax on profits for the year 9.0 3.1
Foreign tax 5.5 4.0
Adjustments in respect of prior years (0.1) 0.1
=================================================== ====== ======
Total current tax charge 14.4 7.2
=================================================== ====== ======
Deferred tax:
Origination and reversal of temporary differences (4.7) (3.1)
Adjustments in respect of prior years (0.1) 3.5
Impact of changes in tax rates 0.5 0.2
=================================================== ====== ======
Total deferred tax charge (4.3) 0.6
=================================================== ====== ======
Total income statement tax charge 10.1 7.8
=================================================== ====== ======
The tax assessed for the year is higher (2022: higher) than the
standard rate of corporation tax in the UK. The Group's effective
tax rate on profit is 22.6% (2022: 30.8%)
The differences are explained below:
2023 2022
GBPm GBPm
====== ======
Profit before taxation 44.7 25.3
=================================================== ====== ======
Tax charge calculated at Group's standard rate
of 21% (2022: 19%) 9.4 4.8
Variance in overseas tax rates (0.4) (1.4)
Impact of change in in tax rates 0.5 0.2
Impact of difference between current and deferred
tax rate (0.2) (0.2)
Expenses not deductible for tax purposes 0.5 0.8
Adjustments in respect of prior years (0.2) 3.6
Other differences 0.5 -
=================================================== ====== ======
Total income statement tax charge for the year 10.1 7.8
=================================================== ====== ======
Excess tax relief on employee share option schemes of GBP0.3m
(2022: GBP1.0m) was recognised as income tax directly in equity,
split between current tax of GBP0.1m (2022: GBP0.9m) and deferred
tax of GBP0.3m (2022: (GBP0.1m).
The UK Government announced that the main UK corporation tax
rate would increase to 25% from 1 April 2023 and had substantively
enacted the higher rate before 31 July 2022. So the effect of that
higher rate was first included in the prior year financial
statements.
The Group's net current tax provision of GBP4.0m relates to
management's judgement of the amount of tax payable on open tax
computations where the liabilities remain to be agreed with tax
authorities in the countries that the group operates, principally
the uncertain tax items for which a provision is made. Due to the
uncertainty associated with such tax items, it is possible that at
a future date, on conclusion of open tax matters, the final outcome
may vary significantly. While a range of outcomes is reasonably
possible, the extent of this range is additional liabilities of up
to GBP3m to a reduction in liabilities of up to GBP2m.
Notes to the Consolidated Financial Statements Continued
for the year ended 31 July 2023
4 Dividend
On 12 December 2022, a final dividend in respect of the year
ended 31 July 2022 of GBP7,710,000 (7.0p per share) (2021:
GBP6,700,000 (6.0p per share)) was paid to shareholders. A dividend
in respect of the year ended 31 July 2023 of 8.75p per share,
amounting to a total dividend of GBP10,065,000, is to be proposed
at the Annual General Meeting on 7 December 2023. These financial
statements do not reflect this proposed dividend payable.
5 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 excluded 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, 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, other separately reported items and any related tax
effects as well as the derecognition of tax losses. Share-based
payments and related social taxes have been excluded from the
adjusted earnings per share as the YouGov plc share price is a key
driver of these costs.
2023 2022
=======================================================
GBPm GBPm
======================================================= ====== ======
Profit after taxation attributable to equity holders
of the Parent Company 34.5 17.1
Add: share-based payments 7.6 2.9
Add: imputed interest 0.2 0.1
Add: separately reported items (Note 2) 3.9 6.3
Tax effect of the above adjustments and adjusting
tax items (1.9) (0.4)
======================================================= ====== ======
Adjusted profit after taxation attributable to equity
holders of the Parent Company 44.3 26.0
======================================================= ====== ======
Notes to the Consolidated Financial Statements Continued
for the year ended 31 July 2023
Reconciliations of the earnings and weighted average number of
shares used in the calculations are set out below.
2023 2022
==================================================== ------- ------
Number of shares
Weighted average number of shares during the year:
('m shares)
- Basic 109.6 109.9
- Dilutive effect of share options 2.5 2.3
==================================================== ======= ======
- Diluted 112.1 112.2
==================================================== ======= ======
The adjustments have the following effect (pence):
Basic earnings per share 31.5 15.7
Share-based payments 6.9 2.6
Imputed interest 0.3 0.1
Separately reported items 3.5 5.7
Tax effect of the above adjustments and adjusting
tax items (1.7) (0.4)
==================================================== ======= ======
Adjusted basic earnings per share 40.5 23.7
==================================================== ======= ======
Diluted earnings per share 30.8 15.4
Share-based payments and related social taxes 6.7 2.5
Imputed interest 0.3 0.1
Separately reported items 3.4 5.6
Tax effect of the above adjustments and adjusting
tax items (1.7) (0.4)
==================================================== ======= ======
Adjusted diluted earnings per share 39.5 23.2
==================================================== ======= ======
6 Business combinations
No acquisitions have completed in the year (2022: 2
acquisitions). The Group announced on 6 July 2023 that it has
entered into an agreement to acquire the Consumer Panel Business of
GfK SE (GfK CPB) for a headline purchase price of EUR315 million.
The acquisition is expected to complete in the second half of 2023.
The completion is subject to customary closing conditions and
approvals from regulatory authorities. The acquisition is expected
to be financed by GBP51.2 million gross proceeds from the newly
issued YouGov ordinary shares, new term and revolving credit
facility of up to EUR280m and existing cash on hand.
The Group has already incurred acquisition-related costs such as
professional advisory fees from banks, lawyers and accountants of
GBP4.4 million in FY23. These have been recognised within
separately reported items in the consolidated income statement. In
addition, GBP1.1m bridge debt facility fee has been prepaid, of
which GBP0.4m was recognised in FY23. Additional costs of GBP6
million are expected to be incurred in FY24.
Contingent consideration charge of GBP1.1m was incurred in the
current year in relation to acquisitions undertaken in previous
years, recognised in the income statement as separately reported
items. This is contingent upon continuing employment and,
therefore, has been treated as staff compensation under IFRS 3.
Notes to the Consolidated Financial Statements Continued
for the year ended 31 July 2023
7 Goodwill
Americas Rest DACH Middle Asia UK Total
of Europe East Pacific
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
======================== ========= =========== ====== ======= ========= ===== ======
Carrying amount
at 1 August 2021 33.9 5.9 11.5 1.6 2.5 5.1 60.5
Additions - - 14.5 - - 4.0 18.5
Remeasurement(1) - - 2.7 - - - 2.7
Exchange differences 2.6 - (1.7) 0.2 0.3 - 1.4
======================== ========= =========== ====== ======= ========= ===== ======
Carrying amount
at 31 July 2022 36.5 5.9 27.0 1.8 2.8 9.1 83.1
======================== ========= =========== ====== ======= ========= ===== ======
At 31 July 2022
Cost 36.5 8.0 29.5 1.8 2.8 9.1 87.7
Accumulated impairment - (2.1) (2.5) - - - (4.6)
======================== ========= =========== ====== ======= ========= ===== ======
Net book amount 36.5 5.9 27.0 1.8 2.8 9.1 83.1
======================== ========= =========== ====== ======= ========= ===== ======
Carrying amount
at 31 July 2022 36.5 5.9 27.0 1.8 2.8 9.1 83.1
Exchange differences (1.1) 0.1 0.6 (0.1) (0.2) - (0.7)
======================== ========= =========== ====== ======= ========= ===== ======
Carrying amount
at 31 July 2023 35.4 6.0 27.6 1.7 2.6 9.1 82.4
======================== ========= =========== ====== ======= ========= ===== ======
At 31 July 2023
Cost 35.4 8.1 30.1 1.7 2.6 9.1 87.0
Accumulated impairment - (2.1) (2.5) - - - (4.6)
======================== ========= =========== ====== ======= ========= ===== ======
Net book amount 35.4 6.0 27.6 1.7 2.6 9.1 82.4
======================== ========= =========== ====== ======= ========= ===== ======
1 The fair value remeasurements for the LINK (Switzerland)
opening balance sheet were made retrospectively at 31 July 2022
resulting in a GBP2.9m reclassification from customer relationship
intangible assets to goodwill, net of a GBP0.2m adjustment in
respect of deferred tax and working capital.
In prior reporting periods, the Nordic region was treated as a
separate CGU. In 2023, the Nordics, Spain, France and Italy were
combined into the Rest of Europe (ROE) under one regional CEO. The
ROE CEO and Senior Leadership Team have been optimising operations
across the region by pooling resources, such as people and assets,
to service larger clients jointly, and having a coordinated ROE
strategy to targeting larger multi-national European clients. They
have been supported by combined support functions. The goodwill
related to Nordic has, therefore, been absorbed into the ROE CGU,
which now represents the smallest identifiable group that generates
independent cashflows.
In accordance with IAS 36, the carrying values of goodwill and
other intangible assets are reviewed annually for impairment. The
annual impairment review is undertaken as at 30 April 2023 to align
with the quarterly forecast process.
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 five years for each CGU based on the forecast numbers for the
year ended 31 July 2023.
The sources of the assumptions used in making the assessment are
as follows:
- CGU revenue annual growth rates of 7% to 12% for years
1-5 Growth rates are forecasts based on both internal
and external market information.
- Perpetuity growth rates based on management's estimate
of future long-term average growth rates are 2.5% (2022:
2% to 2.25%).
- Pre-tax weighted average costs of capital of 11% to 14%
(2022: 9% to 12%).
Management has performed a sensitivity analysis on the net
present value of the future cash flows by applying reasonably
possible adverse effects on the impairment review variables that
could arise individually or collectively. There were no reasonably
possible changes in any of the key assumptions that would have
resulted in an impairment in the Group's CGUs.
Sufficient headroom exists in all CGUs to support the valuation
of goodwill.
Notes to the Consolidated Financial Statements Continued
for the year ended 31 July 2023
8 Other intangible assets
Customer contracts,
Software and software trademarks, patents and
Consumer panel development product development Total
==============================
Group GBPm GBPm GBPm GBPm
============================== =============== ============================= ============================= =======
At 1 August 2021
Cost 34.1 50.4 7.9 92.4
Accumulated amortisation (20.2) (38.0) (5.0) (63.2)
============================== =============== ============================= ============================= =======
Net book amount 13.9 12.4 2.9 29.2
============================== --------------- ----------------------------- ----------------------------- =======
Year ended 31 July 2022
Opening net book amount 13.9 12.4 2.9 29.2
Additions:
Separately acquired 9.3 1.1 - 10.4
Internally developed - 6.9 - 6.9
Through business combinations 0.7 1.4 8.1 10.2
Remeasurement(1) - - (2.9) (2.9)
Disposals (1.7) (0.2) - (1.9)
Amortisation:
Amortisation - current year
charge (9.9) (9.1) (1.4) (20.4)
Amortisation - disposals 1.7 0.2 - 1.9
Exchange differences 0.9 - 0.8 1.7
============================== =============== ============================= =============================
Closing net book amount 14.9 12.7 7.5 35.1
============================== =============== ============================= ============================= =======
At 31 July 2022
Cost 44.8 59.6 14.1 118.5
Accumulated amortisation (29.9) (46.9) (6.6) (83.4)
============================== =======
Net book amount 14.9 12.7 7.5 35.1
============================== =============== ============================= ============================= =======
Year ended 31 July 2023
Opening net book amount 14.9 12.7 7.5 35.1
Additions:
Separately acquired 9.3 1.2 - 10.5
Internally developed - 7.8 - 7.8
Disposals (7.4) - - (7.4)
Amortisation:
Amortisation - current year
charge (10.5) (9.3) (1.2) (21.0)
Amortisation - disposals 7.4 - - 7.4
Exchange differences (0.3) (0.1) (0.1) (0.5)
============================== =============== ============================= =============================
Closing net book amount 13.4 12.3 6.2 31.9
============================== =============== ============================= ============================= =======
At 31 July 2023
Cost 45.6 58.6 13.8 118.0
Accumulated amortisation (32.2) (46.3) (7.6) (86.1)
==============================
Net book amount 13.4 12.3 6.2 31.9
============================== =============== ============================= ============================= =======
1 The fair value remeasurements for the LINK (Switzerland)
opening balance sheet were made retrospectively at 31 July 2022
resulting in a GBP2.9m reclassification from customer relationship
intangible assets to goodwill, net of a GBP0.2m adjustment in
respect of deferred tax working capital.
Out of the remaining GBP6.2m (FY22: GBP7.5m restated) net book
amount of other assets for Group as at 31 July 2023, GBP5.3m (FY22:
GBP6.2m restated) are customer contracts and lists with the
remaining GBP0.9m (FY22: GBP1.3m) for trademarks, patents and
product development.
Notes to the Consolidated Financial Statements Continued
for the year ended 31 July 2023
9 Trade and other receivables
31 July 31 July 2022
2023
=======================
GBPm GBPm
======================= ======== =============
Trade receivables 28.4 26.1
Expected credit loss (1.0) (0.9)
======================= =============
Net trade receivables 27.4 25.2
Other receivables 6.3 7.3
Prepayments 6.5 6.0
Accrued income 14.8 15.0
======================= =============
55.0 53.5
======================= ======== =============
10 Trade and other payables
31 July 31 July
2023 2022
=================
GBPm GBPm
================= ======== ========
Trade payables 6.1 6.6
Other payables 10.4 15.0
Accruals 21.6 21.5
Deferred income 26.6 23.7
----------------- -------- --------
64.7 66.8
----------------- -------- --------
11 Events after the reporting year
On 2 October 2023, YouGov has agreed a term and revolving credit
facility (the "Facility'") of up to EUR280m. The facility is
comprised of a EUR240m amortising term loan with a tenor of four
years and a EUR40m Revolving Credit Facility ("RCF") with a tenor
of three years (with an option to extend). This Facility replaces
the Group's existing GBP20m RCF and the EUR240m acquisition bridge
debt facility, both of which were undrawn and have been cancelled.
The facility will be used to finance the acquisition of GfK CPB and
for general corporate purposes that support the Group's long-term
growth strategy. There have been no other events subsequent to 31
July 2023 that would require an adjustment to, or disclosure in,
these financial statements.
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