YouGov profits down as turnover almost trebles
LONDON - YouGov has reported a 29% drop in full-year pre-tax profits to £4m, despite nearly trebling its revenues on the back of overseas expansion.
Investors approved the company's revenue growth, sending its share price up 22% to 52.5p from a long-term low.
The company's results for the year to July 31 include the first contribution from its acquisitions of Polimetrix in the US, Psychonomics in Germany, and Zapera in Scandinavia.
Its revenues climbed 183% year on year to £40.4m. Its UK operations performed well with growth of 52% to £12.6m, winning large projects with big clients such as Asda, Unilever and News International.
However, the group struggled to convert top line growth into profits and its operating margin fell from 39% to 20%.
This was due to a higher level of investment across the group as well as an aborted acquisition early in 2008 that incurred a cost of £1.2m in professional fees without any gain.
YouGov also owned up to "inadequate monitoring and management of overall costs across the group", saying it has now taken steps to combat this with more robust management and financial controls.
It will take a more conservative approach in the current year, with its focus on organic growth and "investing prudently" according to chief executive Nadhim Zahawi. It still expects to gain from the trend growth in online research.
"We expect to continue to deliver revenue growth while recognising that the group still needs to invest in people and infrastructure in order to integrate our business further and generate attractive future returns."
The company confirmed it has agreed to disband the joint venture hedge fund it formed in March with stockbroker Numis and investment manager Four Capital Partners.
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