Yougov: Continuing Benefits Of Smart, Connected Data Strategy
Edison | Oct 23, 2016 04:16AM ET
Yougov's (LON:YOU) FY16 results show the continuing benefits of its strategy to build on its Data Products and Services, delivering revenue and profit growth well in excess of the market. There was also some benefit from currency movements. The group’s transition from market researcher to global data and analytics business should drive continuing growth well ahead of industry rates, with the roll-out of scalable products and services internationally supporting margin and cash generation. The shares have performed strongly as this strategy has started to reap financial rewards, with the current price well supported.
Upgraded estimates, further growth for FY18e
FY16 figures were ahead of our estimates, with 16% growth at the top line (12% at constant currency). Data Products and Services continue to build strongly, growing revenues by 32%, with the operational gearing from the increasing proportion of productised offer driving an improvement in group operating margin from 11.3% to 12.4%. Foreign exchange conversion gains boosted net finance income, offset at the EPS level by a higher tax charge due to the strong growth in US earnings. Our FY17 forecasts move ahead by 14% at the EBITDA level; +17% in EPS. Our new FY18 estimates show further strong progress as BrandIndex, Profiles and Omnibus build their global client base. The group typically has 100%+ cash conversion, with the FY16 figure of 130% leading to an increase in year-end net cash to £15.6m and allowing for a 40% step up in the recommended dividend to 1.4p.
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