NEWS12 October 2009

YouGov posts a loss after ‘very challenging’ year

Financials UK

UK— YouGov has posted a loss of £0.7m for the financial year ending 31 July, in what CEO Nadhim Zahawi called a “very challenging” period for the research industry.

Operating profit fell to £3.1m from £8.7m and profit before tax was down to £3.9m from £9.5m. Turnover, however, rose 10% to £44.3m from £40.4m.

In the UK, revenue was down 12% to £11.1m. YouGov said that one of the significant factors in the fall was reduced revenue from investment fund managers buying primary data as a result of the crisis in the financial markets.

It was better news in Germany where revenue was up 23% ( 6% in local currency terms) to £14.8m thanks to a strong performance in the retail financial services sector and specialist employee research and satisfaction operations.

Revenue in the Middle East grew by 10% to £8.4m from £7.7m but fell 13% in local currency terms after a reduction in “a major long-term contract”. However, “significant” new qual and quant clients have been added in Saudi Arabia and the firm said it was well positioned to take advantage of growing commercial opportunities in Iraq.

In the US, revenue was up 25% to £3.5m from £2.8m, but down 4% in local currency terms during the second half of the year. YouGov said recessionary budget cutbacks had followed a strong first-half performance owing to demand for its polling work during the presidential election. Meanwhile, the firm said, Clear Horizons, the branding agency it acquired in April, was trading in line with its business plan.

Scandinavian revenue was up by 14% to £7.4m from £6.5m, but fell 2% in local currency terms. The firm said that market conditions in the region were “very tough”, despite winning new clients including Coca-Cola and Kellogg’s. YouGov said the depreciation of the Swedish and Norwegian currencies compared to the Danish currency, where most costs are incurred, led to the firm making an operating loss in the region.

Zahawi (pictured) said that cost savings initiatives announced in April – which included the cutting of 30 jobs – had already saved £0.3m and would achieve annual cost savings of £2.5m.

Despite the loss and challenging conditions in some markets, YouGov chairman Roger Parry was upbeat in his review of the year. He said: “We believe that YouGov’s brand, ability to innovate and proven online research skills will enable us to grow our customer base and continue to win market share. In the short term, we will ensure that we exploit the individual strengths and market position of each of our hubs.”