NEWS12 April 2010

YouGov confident of recovery after turnover and profits fall

Financials UK

UK — YouGov has reported declines in its turnover and operating profit for the six month period ending 31 January 2010 in the face of “challenging” market conditions.

Turnover was down 6% to £21.3m from £22.6m and operating profit fell 15% to £1.35m. Adjusted profit before tax was down 41% to £1.4m.

YouGov said that despite the reported figures it had seen “solid operational progress” during the period, with improved profitability in the US and UK.

Operating profits in the UK were up 51% to £1.2m and operating margins were up from 15% to 22% on revenues of £5.4m – a 2% increase on the same period last year.

In the US, revenue was £1.9m, which was the same as the comparable period in 2009 but without the extra work generated by the presidential elections. Revenues from non-political work were up by 88%, with work carried out for clients including Domino’s Pizza and Pepsico.

In Germany, revenue fell 7% to £7.3m but operating profit was up 48% to £0.7m, which represents an operating margin of 9% compared to 6% the previous year.

Tough market conditions in Scandinavia saw the firm perform “below initial expectations” for the period and revenues fell 12% to £3.3m. YouGov cut 20% of its staff in the region last year, which achieved annual savings of £0.8m, and the firm said it expected to trade profitably in the second half of the year as a result of the restructuring.

Revenues in the Middle East were down 10% to £3.8m, which YouGov said reflected the expected reduction of a long-term contract. Regionally-generated business in the Middle East was up 20% on last year.

CEO Stephan Shakespeare said: “YouGov has performed as expected during the first half and continues to lead innovation in the market. Good performances in the UK, Germany and US have helped to offset the expected decline in revenue from the Middle East and the under-performance in Scandinavia where our remedial action has put the business on track to be profitable in the second half…

“As previously indicated, we are expecting profitability to be stronger in the second half of the financial year than in the first. Trading in the second half of our financial year is currently in line with the board’s expectations.”

Shakespeare took over as CEO earlier this month, replacing his co-founder Nadhim Zahawi who resigned his position to stand as an MP in the forthcoming UK general election.