TIDMYOU
RNS Number : 4111C
YouGov PLC
11 October 2022
11 October 2022
YouGov plc
("YouGov" or the "Group")
Full Year Results for the year ended 31 July 2022
- Strong performance in line with expectations and continued
growth momentum
- Continued focus and investment in delivering on the long-term
strategy
- Cautious optimism in FY23 prospects, with a good start to the
new financial year
YouGov, the international research and data analytics group,
announces its results for the year ended 31 July 2022.
Year to Year to Change
31 July 31 July %
2022 2021
GBPm GBPm
Revenue 221.1 169.0 31%
--------- --------- -------
Adjusted Operating Profit(1) 36.3 25.5 42 %
--------- --------- -------
Adjusted Operating Profit
Margin (%)(1) 16.4% 15.1% 130bps
--------- --------- -------
Statutory Operating Profit 30.0 19.0 58%
--------- --------- -------
Adjusted Profit before Tax(1) 34.7 31.2 11 %
--------- --------- -------
Statutory Profit before Tax 25.3 18.9 34%
--------- --------- -------
Adjusted Earnings per Share(1) 23.7p 21.7 p 9 %
--------- --------- -------
Statutory Basic Earnings
per Share 15.7 p 11.5 p 37 %
--------- --------- -------
1 Defined in the explanation of non-IFRS measures below.
Financial highlights
-- Revenue growth of 31% (20% on an underlying(1) basis)
to GBP221.1m, with double-digit growth across all divisions
and geographies.
-- Adjusted operating profit(1) up by 42% (33% on an underlying(1)
basis) to GBP36.3m, as business efficiencies and operational
leverage benefits are starting to come through.
-- Adjusted operating profit margin(1) up 130 basis points
(bps) to 16.4%, despite continued investment in the
business.
-- Statutory operating profit up 58% to GBP30.0m.
-- Adjusted earnings per share(1) up by 9% to 23.7p, impacted
by adverse foreign exchange movements.
-- Strong cash conversion(1) of 113% (FY21: 98%) enabling
repayment of the GBP20.0m revolving credit facility
drawn in the first half of this financial year.
-- Robust balance sheet position maintained with net cash
at period end of GBP37.4m (31 July 2021: GBP35.5m) and
no outstanding debt.
Operational highlights
-- Strong sales momentum in our connected data research solutions
that continue to resonate with clients.
-- Coupled with our custom tracking solutions, our high-quality
data products are becoming further embedded into clients'
daily marketing workflows, increasing customer stickiness
and retention.
o Data Products revenue increased by 23% from underlying(1)
business (28% on a reported basis) to GBP74.1m, driven
by strong subscription renewal rates and new longer-term
deals giving the Group better visibility, following the
successful reorganisation of its sales structure.
o Data Services revenue increased by 11% on a reported
and underlying(1) basis to GBP50.7m, returning to normalised
growth in the second half following general market softness,
especially in the UK, impacting first half growth.
o Custom Research revenue increased by 21% on an underlying(1)
basis (46% in reported terms) to GBP95.6m, driven by custom
tracking work, significant client expansions in key verticals,
and the division's connected data proposition exceeding
expectations.
-- Broad-based growth across all geographies, with the US remaining
the key driver in line with the Group's strategic focus
to expand market penetration in the region.
o Strong commercial success in the Americas and Asia Pacific
specifically, and good performance across Mainland Europe
during the period.
-- Investments made during the period to drive further growth:
o Technology: Continued investment of GBP8.0m (FY21: GBP9.4m)
in technologies to drive long-term growth, including the
development of the YouGov Platform into a public-facing
dashboard, enabling high-quality, self-service research.
o Products: Expanded product suite in response to client
demand including the launch of YouGov Global Profiles
and YouGov Finance, with ongoing investment in improving
client user experiences and enhancing our panel-facing
app.
o Panel: Ongoing investment of GBP8.0m (FY21: GBP10.5m)
in the build-out of our panel in recently established
markets, resulting in the number of registered members
growing 27% to approximately 22m in the period.
o Centres of Excellence (CenX): Established our newest
CenX in Mexico City to increase research operations coverage
for our rapidly growing US business.
o Acquisitions: Acquired Rezonence Limited ("Rezonence")
and LINK Marketing Services AG ("LINK") during the period.
LINK significantly expands the Group's Mainland Europe
business and adds valuable social research capabilities,
with Rezonence scaling our activation capabilities and
enabling data collection at unprecedented scale through
publisher partnerships.
Current trading and outlook
-- Trading for the current financial year, which represents
the final year of the current long-term strategic growth
plan, has started off well across all divisions with continued
growth in revenue.
-- No material changes in client behaviour have been experienced
to date. Nevertheless, the Board remains cognisant of the
broader ongoing macro-economic environment and will continue
to monitor the Group's performance as it progresses through
its upcoming contract renewal season with customers.
-- The Group has a good level of revenue visibility through
longer-term contracts, with over a third of the FYP2 revenue
target for FY23 already secured. This model proved highly
resilient in a period of macro instability during the COVID-19
pandemic.
-- Therefore, we remain cautiously optimistic on the Group's
prospects for FY23 and aim to maintain the strong sales
momentum seen over the past year.
Board succession
-- Board succession planning and process underway with a focus
on ensuring good governance and a strong board composition
to support the continued progression of our strategy and
YouGov's long-term success.
-- As outlined in the accompanying Board Succession announcement
and further in this announcement:
o After a rigorous assessment of Board composition, the Board
has unanimously agreed that it is in the Company's best
interests for Stephan Shakespeare (CEO and Co-Founder)
to take over the role of Chair when Roger Parry steps down
as planned.
o Stephan will assume the role of Chair upon a new CEO commencing
in post, intended to be on 1 August 2023.
o Nick Prettejohn, who joined the Board in June 2022 as a
Non-Executive Director, will, at the same time, take on
the role of Senior Independent Director ("SID") and Rosemary
Leith, the current SID, will stay on the Board following
this planned transition.
o The appointment of a new independent Non-Executive Director
is also planned to ensure a majority of independent members
on the Board following the Chair transition.
Stephan Shakespeare, Chief Executive, said:
"Building on the momentum we saw towards the end of FY21, YouGov
has delivered another year of strong performance in FY22 against an
uncertain macro-economic backdrop. Our growth in the reported year
has continued to accelerate, and we achieved further margin
improvement and robust cash generation during the period.
Demand for YouGov's products and services remains strong and we
continue to win new clients while expanding our relationships with
existing clients. As a result, we remain cautiously optimistic on
our prospects for this year as we aim for further growth.
We continue to invest in our market-leading technology and
platform and remain laser-focused in delivering on our long-term
strategy to realise the full potential of our business and drive
shareholder value. With regards to the Board succession, I am
deeply committed to the business I co-founded over two decades ago
and look forward to the next phase of our growth."
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
Stephan Shakespeare / Alex McIntosh / Hannah
Jethwani 020 7012 6000
FTI Consulting
Charles Palmer / Tom Blundell / 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
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) No 596/201 as it forms part of UK
domestic law by virtue of the European Union (Withdrawal) Act 2018
("MAR"). Upon the publication of this announcement via a Regulatory
Information Service this inside information is now considered to be
in the public domain. The person responsible for arranging release
of this announcement on behalf of the Company is Alex McIntosh,
Chief Finance Officer of the Company.
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 22+ 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 second most quoted market research
source in the world.
YouGov. Living Consumer Intelligence.
For further information, visit business.yougov.com
Chair's Statement
As my final Chair's statement of my tenure on the YouGov plc
Board of Directors, I am extremely pleased to be able to report
another year of strong trading results for the 12 months to 31 July
2022 (FY22) in line with the Board's expectations for the year. The
past year has been a challenging one
across the globe, and our business along with its 1,650+
employees have shown great resilience in the face of ongoing
uncertainty. We have continued to demonstrate the strength of our
business model, invest in our innovative solutions and bring our
workforce together, where possible, to foster greater collaboration
and our collective success in progressing towards our long-term
strategy. While the overall macro-economic environment remains
volatile, our focus continues on maintaining the high-quality
delivery that our clients have come to expect from YouGov and
supporting our workforce.
Results and dividend
During the period, Group revenue was up 31% in reported terms to
GBP221.1m (20% up on an underlying(1) basis) while adjusted
operating profit(1) increased by 42% on the prior financial year to
GBP36. 3m. These results are a continuation of the strong momentum
we saw towards the end of the last financial year and set us up
well for further growth in FY23. YouGov has maintained a
progressive dividend policy, and in line with this, the Board is
pleased to recommend a dividend increase of 17% to 7.0p a share
payable on 12 December 2022 to shareholders on the register as at 2
December 2022.
Outlook
The lingering effects of the COVID-19 pandemic, coupled with the
Russia-Ukraine conflict, have led to significant macro-economic
challenges such as rising inflation and staff shortages. While
these issues are impacting many businesses, YouGov has started the
new financial year well and trading is in line with the Board's
expectations. While the Board remains confident that profitability
will meet current market expectations for FY23, achievement of our
stretching FYP2 targets will be dependent on our ability to
navigate the difficult market conditions being faced by
organisations, including the rising cost of living and staff
shortages in addition to maintaining strong sales momentum. With a
well-capitalised balance sheet and continued evidence of growing
demand for our products and services, we remain cautiously
optimistic for the future and remain focussed on progressing
towards our long-term targets.
Strategic direction
YouGov has been expanding its client relationships through a
focus on subscription products and large-scale tracking studies. We
seek to establish long-term relationships with our clients as we
continue to provide them rich, connected datasets and a range of
proprietary software tools which enable them to conduct
high-quality market research that will drive their marketing and
strategic activities.
As we maintain investment in our technological platform, we aim
to redefine the concept of self-service market research and data
analytics through the development and launch of the YouGov
Platform. Bringing our core products and services under this one
umbrella has the potential to unlock significant opportunities for
the business by eliminating the friction of using multiple separate
tools and making our data and tools more accessible to a wider
range of clients and for greater use cases.
For more details on the next phase of YouGov's growth story,
refer to the CEO Review below.
Long-term growth plans and incentives
The past year was the third in our current long-term strategic
plan ("FYP2") which runs to 31 July 2023. As previously announced,
this plan set challenging financial targets, including to double
group revenue over the plan period (FY19-23) and to achieve
compound annual adjusted earnings per share (1) ("EPS") growth in
excess of 30%. Considering the current market environment, the
Board believes that the FYP2 revenue target remains ambitious but
achievable, while our profitability improvement has been more
modest as we invested in the business to capitalise on the
opportunities available in the market. We remain committed to
ensuring that the Group has the resources it needs to realise its
long-term ambition.
Our FYP2 targets underpin the current long-term incentive plan
("LTIP 2019") which was designed to align the interests of
shareholders and management, with full vesting of the LTIP 2019
requiring compound annual adjusted EPS growth of 35% by 31 July
2023.
The Board has approved in principle the strategic direction for
a new three-year growth plan ("Strategic Plan 3" or "SP3") which
will run from 1 August 2023 to 31 July 2026 (FY24-26). We will be
developing the strategic plan over the coming months and look
forward to providing further details on SP3 at a Capital Markets
Day in the spring of 2023.
Succession planning
As previously announced, I will be standing down from the role
of Non-Executive Chair. In 2021, the Board appointed the leading
international executive search firm Egon Zehnder to advise on all
aspects of executive and Board succession.
With Egon Zehnder's support, the Nomination Committee conducted
a rigorous and considered assessment of the current Board
composition and the business' requirements to agree the skills,
experience, structure, and roles that are needed at Board and
management level to support the Company's next phase of growth and
ensure continued, effective leadership of the Group.
During this assessment, Stephan Shakespeare, YouGov's co-founder
and current Chief Executive Officer, indicated to the Committee his
desire to assume a more strategic, non-executive leadership role
within the Group, allowing him to shift focus from day-to-day
operational oversight to more long-term development and governance
once the next phase of the Group's growth strategy had been set
out.
Having determined the criteria for the next Chair, and taking
into consideration Egon Zehnder's recommendations, the Committee
came to the unanimous conclusion that the best outcome for the
long-term stability and growth of YouGov would be for Stephan to
take over the role of Chair when I step down. The full Board has
unanimously approved the Committee's recommendation for Stephan's
appointment, and he has consequently been appointed as YouGov's
Non-Executive Chair Designate. Consequently, the search for a new
CEO has been launched and the Nomination Committee is currently
considering a wide variety of both external and internal candidates
following an international search process.
Stephan will assume the role of Chair upon a new CEO commencing
in post, currently intended to be on 1 August 2023 which is the
start of the next financial year. The Board, advised by Egon
Zehnder, is aiming to select the new CEO by the spring of 2023 to
allow sufficient time for a hand-over period. To ensure an orderly
transition and allow adequate time to recruit the right candidate
for the CEO position, I will be put forward for re-election at the
upcoming AGM (8 December 2022), with the underlying expectation
that I shall retire on 1 August 2023.
The Board is cognisant of the potential challenges of a founder
CEO moving to Chair. Utilising Egon Zehnder's advice, we have put
in place protocols and resources to set the transition up for
success, including a suite of documents that give clarity to the
separation between the CEO and Chair roles.
In June 2022, we were pleased to announce the appointment of
Nick Prettejohn as an additional Non-Executive Director ("NED"). It
is intended that Nick will take on the role of Senior Independent
Director ("SID") at the same time as Stephan's transition to Chair.
Nick has a long and distinguished career as both an executive and
non-executive director, and therefore we believe he will be of
great assistance in helping Stephan navigate his new role as Chair.
Rosemary Leith, our current SID, will stay on the Board following
this planned transition and will continue as Chair of the
Remuneration Committee.
To further strengthen the Board and maintain the highest levels
of corporate governance, we are also planning to appoint a further
NED by the end of 2022. Adding this new NED role, in addition to
Nick, will ensure a majority of independent members of the Board,
as well as bringing further skills and diversity to our Board, and
it is commensurate to the Company's current size and growth
plans.
We are confident that we have set the right strategic direction
to deliver another long-term period of profitable growth for
YouGov, and that we are putting in place the right Board and
executive team to see the plan implemented. We will update
shareholders in due course about the appointment of a new CEO and
NED.
A well-placed company
It has been a great pleasure and privilege for me to be Chair of
YouGov. When I joined YouGov in January 2007, it was a relatively
small start-up business with tremendous potential. While the
Company has gone through significant change and growth over the
years, its long-term vision, to be the world's leading provider of
marketing and opinion data, has remained unwavering.
YouGov was founded as a web-based UK polling company and has
evolved into a world-class global research and data analytics
provider. The success of YouGov is the function of the hard work
and talent of our executive leadership team and wider workforce. On
behalf of the shareholders, I would like to thank them for their
continued commitment to the business. I look forward to following
the YouGov story over the coming years and watching the Company
reach its full potential.
Roger Parry CBE
Chair
11 October 2022
1 Defined in the explanation of non-IFRS measures below.
Chief Executive Officer's Review
YouGov has delivered another year of solid growth, margin
improvement and robust cash generation in FY22. Against a difficult
macro backdrop, we were able to maintain our growth momentum,
reporting revenue of GBP221.1m, up 31%, while adjusted operating
profit(1) was up 42% to GBP36.3m. This performance was largely
driven by the success of our commercial proposition in the Americas
and Asia Pacific as our connected data research solutions continue
to resonate well with clients.
Our subscription products have maintained their strong renewal
rates and our sales teams are increasingly able to secure
longer-term contracts, giving us better revenue visibility into
future years. Coupled with our custom tracking solutions, our
high-quality data products are becoming further embedded into
clients' daily marketing workflows, therefore increasing customer
stickiness and retention.
The key levers for growth that have driven our performance this
financial year are:
-- Existing clients: As we prove our ability to meet clients'
complex research needs in a fast, accurate way, our clients
are expanding their relationship with us over time.
-- New clients: Our new business sales teams continue to make
progress in growing our client base as organisations value
real-time data more than ever before.
-- New markets: Our global panel expansion last year continues
to help us win contracts with large multi-nationals globally.
-- New products: While growing off a small base, our new initiatives
are showing encouraging results and we will look to expand
and monetise our investments in these over the coming years.
-- Operational efficiencies: Our rapidly growing CenX are
helping standardise our research and support operations
which will result in greater operational leverage as our
business grows.
-- Acquisitions: Our latest two acquisitions, LINK and Rezonence,
have added new research and technological capabilities to
our business and are contributing to performance in line
with initial expectations.
Delivering on our strategic priorities
Based on our strategy, we have previously identified five key
priorities that will be a focus in the near term. Our ability to
successfully execute on these priorities will ultimately determine
delivery of management targets set out in our current long-term
strategic growth plan ("FYP2"). The key progress made under each of
these priorities during this financial year has been set out
below.
Product development and technology
-- Continued the development of the YouGov Platform into
a public-facing dashboard that will enable high-quality,
self-service research for more standardised needs
-- Expanded our suite of products in response to client
demand, such as Global Profiles, the largest globally
consistent audience dataset, and YouGov Finance, our
fully permissioned, verified financial transaction data
product
-- Continued investment to improve the client user experience
for our data products as well as enhance our panel-facing
app
Panel
-- Growth in our global research panel of 27% in FY22 to 22
million registered members, ensuring we were able to meet
our clients' research needs
-- Initiated the use of YouGov Chat, our chatbot technology,
to augment and grow our global panel through an innovative
content-driven approach and to acquire niche audiences
Global accounts
-- Several significant client wins during the year as our
account management team increased our share of wallet
using a combined Data Products and custom tracking proposition
-- Increasing contribution from the new business sales team
with a clear focus on expanding the client base and targeting
larger global mandates
Global infrastructure
-- Continued to expand the role played by our CenX in our day-to-day
support operations and the delivery of our data products
and research services
-- Established our newest CenX in Mexico City to diversify
our operations and increase availability of support for
our US operations
Acquisitions
-- Acquisition of LINK in Switzerland significantly expands
our Mainland Europe business and adds valuable social
research capabilities and strong multi-national relationships
to our client roster
-- Rezonence acquisition scales our activation capabilities
and enables data collection at unprecedented scale through
publisher partnerships
Environmental, social and governance ("ESG")
Our commitment to ESG is core to what we do. We operate lawfully
and ethically in all areas of ESG relevant to our business, from
how we collect data from panel members and how we engage and
develop our workforce, to the design of our research and how we
service our clients. In line with our business strategy, we focus
on the ESG areas where we can add the most value.
This approach is defined in our ESG Roadmap, first published in
2021. We achieved our goals ahead of schedule in mid-2022 and have
since expanded our commitments in a second ESG Roadmap that sets
overall company objectives supported by individual environmental,
social and governance strategies. This reflects our efforts to meet
growing stakeholder expectations and embed ESG throughout the
business.
Our social mission is to make people's opinions heard for the
benefit of the wider community and social value. We have defined
this mission as "Giving a Voice", which is a key strategic theme of
our second ESG Roadmap. This encompasses our unparalleled public
data offering, our ongoing efforts to ensure our panel is as
representative as possible, and our socially-oriented work with
clients, partners, and suppliers. This is supported by our
commitment to fostering a diverse workforce in an inclusive
workplace that reflects the global society in which we operate.
We are a naturally low-emission business, but we take a
proactive approach to mitigating our environmental impact. In 2022,
we received our first Bronze SUPER Certification for single-use
plastic reduction in our London office, with certification in
progress for several other global offices. We signed the MRS Net
Zero Pledge to achieve net zero in the UK by 2026, and in our
second ESG Roadmap we have committed to setting net zero targets
for our other global markets, as well as verifying our company
target.
Our ESG progress would not be possible without the continued
excellence of our Governance department. Our new mandatory training
curriculum, with neutrality and our Global Code of Conduct &
Ethics at the core, ensures that our values and expectations are
understood by all employees. We hold the same expectations for our
suppliers, which is enforced through our robust Supplier Approval
Process and supported by our new Supplier Code of Conduct. Through
our rigorous governance framework, we embed transparency and
accountability through our policies and processes.
Current trading and outlook
Trading for the current financial year has started off well
across all our divisions with continued growth in revenue . While
we continue to see no material changes in client behaviour due to
the current macroeconomic environment and outlook, we recognise
that the upcoming months and key subscription contract renewal
season will determine our ability to meet our stated targets. We
remain cautiously optimistic on the Group's prospects for FY23 and
aim to maintain the strong sales momentum seen over the past
year.
With the majority of our investments completed in the first part
of our plan, our focus for this financial year remains to grow
revenue well ahead of our cost base to ensure we are benefitting
from operational leverage. We continue to retain strong cash
balances and no debt, allowing us to invest prudently where
necessary and we expect capital expenditures for FY23 to be lower
than the prior year.
Strategic direction
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.
Current long-term strategic growth plan ("FYP2") - FY19-23
Our current plan, FYP2, was centred around expanding our global
reach, reshaping our organisation and developing the final pieces
of technology that will form an essential part of the YouGov
Platform. We have entered the final year of our current long-term
growth plan and continue to execute in line with our
expectations.
As previously announced, the ambitious long-term incentive plan
("LTIP") performance targets accompanying FYP2 to incentivise
senior management through to FY23 are:
-- double Group revenue;
-- double Group adjusted operating profit margin (1)
; and
-- achieve an adjusted earnings per share (1) compound
annual growth rate in excess of 30%.
As previously disclosed, in the first half of our plan we had
invested heavily in our panels, technologies, platforms, support
functions and markets to enable us to scale further and make the
most of the opportunities we see in our markets. We are now
focussed on execution and capitalising on the foundation we have
built to drive further growth momentum into FY23 and beyond.
Strategic Plan 3 ("SP3") - FY24-26
In our next long-term strategic growth plan, SP3, we intend to
deepen our strategy and evolve the business to achieve its ultimate
vision, which is to become the leading market research tool that
organisations around the world can use to better serve the people
and communities that sustain them.
Throughout our journey over the last few years, we have strived
to truly adapt our business to meet the changing needs of our
clients. The importance of listening to our clients and members
cannot be underestimated as they both form the cornerstone of the
YouGov Platform.
As part of our next strategic plan, we intend to remain laser
focussed on developing and scaling the use of the YouGov Platform
which will bring together our syndicated data products and
self-serve research tools to allow clients to analyse our data and
run high-quality research studies with minimal interaction with our
researchers. The quality of data and ease of use for clients will
be the greatest priority as we aim to achieve technology-driven
scale through greater standardisation.
For more complex client needs, we will continue to operate a
custom research practice that will specialise in using the YouGov
Platform for a differentiated offering that will benefit from a
privileged understanding of the system. This division will thrive
on building and nurturing long-term client relationships using
rich, connected datasets to drive key marketing and strategic
activities.
Ultimately, with different go-to-market strategies and strategic
priorities, the two divisions will capitalise on their inherent
strengths and drive growth over the medium term.
The key financial targets for SP3 and associated LTIP will be
set out in due course.
CEO succession
As discussed above, the Board has commenced the search for a new
CEO who will take the helm at YouGov for its next phase of growth,
implementing the next strategic plan. I am deeply committed to the
Company I founded over two decades ago and will continue to lead
the business until my successor takes over, at which point I will
transition into the position of Chair. The Board, with the help of
Egon Zehnder, has put in place a clear framework that will guide
this transition and I intend to uphold the highest standards of
corporate governance during my time as Chair. I am honoured to have
been selected by the Board and I look forward to supporting the
Company and being a sparring partner for the executive team over
the coming years.
As I prepare to transition from my current role as CEO, I am
hugely proud of the business we have built over the last 22 years.
I am confident that I will be handing over the reins with the Group
in its strongest ever position and a clear strategy to realising
our vision of building the world's leading market research
platform. In the meantime, I am fully engaged and committed in my
position as CEO and focussed on the current year.
We are excited about the opportunities lying ahead and
delivering shareholder value as we execute on our long-term growth
plans.
On behalf of the Board, I thank all our registered members,
partners, clients, and employees for their ongoing contribution and
commitment to YouGov's continued success in these challenging
times.
Stephan Shakespeare
Chief Executive Officer
11 October 2022
1 Defined in the explanation of non-IFRS measures below.
Chief Finance Officer's Review
The Group continued to achieve strong performance in the 12
months to 31 July 2022 as we enter the final year of our current
long-term strategic growth plan which ends on 31 July 2023. The
business has shown resilience against an uncertain macro-economic
backdrop demonstrated by our ability to grow well ahead of the
market research industry (ESOMAR estimates that the established
research segment grew 9.1% in 2021).
Total Group revenue in the period grew 31% to GBP221.1m, (FY21:
GBP169.0m), driven by double-digit growth across all three
reporting divisions and all geographies. Growth was 20% on an
underlying(1) basis, excluding the impact of acquisitions and
movement in foreign exchange rates.
Adjusted operating margins
Gross margins remained stable at 85%, as greater efficiencies
from panel-based custom work were offset by continued investment to
expand the number of sectors, brands and geographies covered by our
syndicated data products.
Group operating costs (excluding separately reported items) of
GBP151.1m (FY21: GBP117.3m) increased by 29% in reported terms.
Adjusted operating profit(1) increased by 42% to GBP36.3m on a
reported basis (33% on an underlying(1) basis), representing an
improvement in the adjusted operating margin to 16.4% (FY21:
15.1%), despite continued investment in the business and increasing
inflationary pressures. The Group's statutory operating profit
increased to GBP30.0m (FY21: GBP19.0m), after charging other
separately reported items of GBP6.3m (FY21: GBP6.5m).
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.
During this financial year, our Data Products division
maintained its strong momentum seen in H2 FY21, as our sales teams
prioritised new syndicated product sales and delivered solid
renewal rates. Additionally, an increase in multi-year subscription
deals sold in the period has improved our visibility into the
coming year. Revenue from Data Products increased by 28% (23%
growth in underlying(1) terms) in the period. The adjusted
operating profit(1) from Data Products increased by 39% to GBP27.0m
on the back of higher operational leverage, resulting in a 280bps
improvement in the adjusted operating margin(1) to 36% (FY21:
33%).
Geographically, the US remains the largest Data Products market
and grew by 32% in the period (26% from the underlying(1) business)
as we continue to increase our brand awareness and market
penetration in the region among large multi-nationals across
several industries.
Data Services
Our Data Services division consists of our fast-turnaround
research services, including our market-leading YouGov RealTime
Omnibus.
Following stellar performance in the prior year, and a muted
first half, growth in our Data Services division returned to
normalised levels in the second half through increased focus on
sales of fast-turnaround projects by our teams. Revenue increased
by 11% in reported and underlying(1) terms to GBP50.7m, following
strong performance particularly in the Asia Pacific region. Growth
in the UK and US was more subdued, while Mainland Europe saw 7%
reported growth in the period against a high comparable base.
The division's lower performance led to a 13% decline in
adjusted operating profit(1) and the margin decreased from 19% to
15%, as the division had to absorb investment in panel and
technology costs.
Custom Research
Our Custom Research division includes tailored research projects
and tracking studies.
During the period, the division's revenue grew by 46% in
reported terms to GBP95.6m, mainly due to the inclusion of the LINK
acquisition. On an underlying(1) basis, revenue growth was 21%,
driven largely by the US where our connected data proposition is
increasingly resonating with clients, particularly in the
technology and gaming sector.
The adjusted operating profit(1) increased by 54% to GBP21.0m
and the adjusted operating margin expanded to 22% (FY21: 21%), as
efficiencies in the division were offset by higher amortisation of
acquisition-related intangibles owing to the LINK acquisition.
Revenue Year to Year to Revenue Underlying
31 July 31 July growth (1) revenue
2022 2021 % change
GBPm GBPm %
------------------------- --------- --------- -------- -------------
Data Products 74.1 58.0 28% 23%
--------- --------- -------- -------------
Data Services 50.7 45.5 11% 11%
--------- --------- -------- -------------
Custom Research 95. 6 65. 6 46% 21%
--------- --------- -------- -------------
Intra-Group and Central
revenues 0.7 (0.1) - -
--------- --------- -------- -------------
Group 221.1 169.0 31% 20%
--------- --------- -------- -------------
Adjusted Operating Year to Year to Adjusted Adjusted Operating
Profit (1) 31 July 31 July Operating Margin %
2022 2021 Profit
GBPm GBPm growth
%
Year to Year to
31 July 31 July
2022 2021
---------- ---------
Data Products 27.0 19.4 39% 36% 33%
--------- --------- ----------- ---------- ---------
Data Services 7.7 8.8 (13%) 15% 19%
--------- --------- ----------- ---------- ---------
Custom Research 21.0 13.6 54% 22% 21%
--------- --------- ----------- ---------- ---------
Central costs (19.4) (16.3) - - -
--------- --------- ----------- ---------- ---------
Group 36.3 25.5 42% 16% 15%
--------- --------- ----------- ---------- ---------
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)
2022 2021 % revenue
GBPm GBPm change
%
UK 57.9 52.1 11% 10%
--------- --------- -------- -----------
Americas 99.5 74.8 33% 27%
--------- --------- -------- -----------
Mainland Europe 45. 7 30. 6 49% 13%
--------- --------- -------- -----------
Middle East 6. 2 4. 9 27% 25%
--------- --------- -------- -----------
Asia Pacific 20.8 14.0 49% 32%
--------- --------- -------- -----------
Intra-Group revenues (9.0) (7.4) - -
--------- --------- -------- -----------
Group 221.1 169.0 31% 20%
--------- --------- -------- -----------
Adjusted Operating Year to Year to Operating Operating Margin
Profit (1) 31 July 31 Jul Profit %
2022 2021 growth
GBPm GBPm %
--------------------
Year to Year to
31 July 31 July
2022 2021
--------- ---------
UK 17. 8 16. 6 7% 31% 32%
--------- -------- ---------- --------- ---------
Americas 32. 1 23. 0 40% 32% 31%
--------- -------- ---------- --------- ---------
Mainland Europe 3.3 3.2 3% 7% 10%
--------- -------- ---------- --------- ---------
Middle East 1. 7 0. 4 - 27% 8%
--------- -------- ---------- --------- ---------
Asia Pacific 1.8 (0.1) - 9% (1%)
--------- -------- ---------- --------- ---------
Central costs (20. 4) (17. 6) - - -
--------- -------- ---------- --------- ---------
Group 36.3 25.5 42% 16% 15%
--------- -------- ---------- --------- ---------
Panel development by geography
We continued to invest in our consumer 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 2022,
the total number of registered panellists had increased by 27% to
22.25 million, compared to 17.48 million at 31 July 2021, as set
out in the table below.
Region Panel size Panel size Change
at at %
31 July 2022 31 July 2021
millions millions
UK 2.67 2.50 7%
-------------- -------------- -------
Americas 8.05 6.35 27%
-------------- -------------- -------
Mainland Europe 4.93 3.64 35%
-------------- -------------- -------
MENA 2.76 2.18 27%
-------------- -------------- -------
Asia Pacific 3.85 2.81 37%
-------------- -------------- -------
Total 22.25 17.48 27%
-------------- -------------- -------
Group financial performance
Prior year restatements
Following a routine Financial Reporting Council ("FRC") review
of the consolidated financial statements for the year ended 31 July
2021, the Group engaged with the FRC which resulted in several
adjustments. We welcomed the FRC's review and have set out the
restatements in the basis of preparation in the accompanying
financial statements below.
Amortisation of intangible assets
In the 12 months to 31 July 2022, amortisation charges for
intangible assets of GBP20.4m were GBP5.1m higher than the previous
year. Amortisation of the consumer panel increased by GBP2.8m to
GBP9.9m, reflecting the increased panel investment made in the year
and accelerated amortisation of some of our newer panels.
Amortisation of software increased by GBP1.2m to GBP9.1m. GBP7.7m
(FY21: GBP4.9m) of the total software development charge related to
assets created through the Group's own internal development
activities, GBP0.8m (FY21: GBP0.6m) related to separately acquired
assets and GBP0.5m (FY21: GBP2.4m) was for amortisation on assets
acquired through business combinations.
Separately reported items
Acquisition-related costs in the year comprise GBP5.2m of
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 the newly
acquired entities.
Acquisition-related costs in the prior year comprise of GBP6.5m
in contingent consideration treated as staff costs in respect of
the acquisitions of SMG Insight Limited, InConversation Media
Limited, Portent.io Limited, Charlton Insights Inc., YouGov Finance
Limited (formerly Lean App Limited) and Faster Horses Pty Limited,
and GBP0.3m of transactions costs in respect of the newly acquired
entities, offset by GBP0.3m income from insurance rebate for SMG
Insight Limited litigation costs.
Analysis of operating profit and earnings per share
Adjusted profit before tax(1) of GBP34.7m was an increase of 11%
versus the prior year, lower than the operating profit growth due
to GBP3.7m of foreign exchange losses related to intercompany
loans, largely between our US and UK entities. The adjusted tax
rate(1) was stable at 24%. Statutory profit before tax of GBP25.3m
was reported compared to GBP18.9m in the year ended 31 July 2021,
an increase of 34%.
The IFRS 2 share-based payment charge is not tax deductible.
However, in our largest markets (UK and US), when share options are
exercised the gain made is an allowable tax deduction. This timing
difference gives rise to deferred tax. The FY21 expected tax cost
in aggregate was correct, but the allocation between income
statement and equity has been restated. Refer to the basis of
preparation in the accompanying financial statements below for
further details.
During the period adjusted earnings per share(1) grew by 9% from
21.7p to 23.7p, due to absorption of the aforementioned foreign
exchange losses, and statutory earnings per share increased from
11.5p to 15.7p.
31 July 31 July
2022 2021
-------- --------
GBPm GBPm
-------- --------
Adjusted operating profit(1) 36.3 25.5
-------- --------
Share-based payments 2.9 5.1
-------- --------
Social taxes payable on share-based payments 0.0 0.5
-------- --------
Imputed interest 0.1 0.1
-------- --------
Net finance expense (4.6) -
-------- --------
Adjusted profit before tax(1) 34.7 31.2
-------- --------
Adjusted taxation(1) (8.4) (7.4)
-------- --------
Adjusted profit after tax(1) 26.3 23.8
-------- --------
Adjusted earnings per share (pence)(1) 23.7 p 21.7p
-------- --------
Cash flow and capital expenditure
The Group generated GBP69.7m (FY21: GBP45.1m) in cash from
operations (before paying interest and tax) including a GBP6.6m
(FY21: GBP4.1m) net working capital inflow; the cash conversion
rate (percentage of adjusted EBITDA(1) converted to cash) increased
from 98% to 113% of adjusted EBITDA(1) . Taxation payments for the
year totalled GBP6.9m (FY21: GBP7.1m).
Under IFRS, payments for business acquisitions made to current
employees are treated as an operating cost. Previously, the cash
flow for these payments had been treated as investing in nature. As
such for FY21, GBP9.8m of deferred consideration cash flow has been
restated to be shown as operating cash flow. Refer to the basis of
preparation in the accompanying financial statements below for
further details.
The Group invested GBP6.9m (FY21: GBP7.8m) in the continuing
development of our technology platform internally and GBP1.1m
(FY21: GBP1.6m) was invested on separately-acquired software tools.
Investment in panel recruitment was lower in the year at GBP8.0m
(FY21: GBP10.5m) as we had carried out a major expansion of our
panel into new markets in the prior year. The broadened geographic
footprint of our panel, mainly in Europe and Latin America, has
allowed our teams to win several new large, multi-national clients
looking for globally consistent custom brand tracking. In addition,
GBP1.5m (FY21: GBP1.2m) was spent on the purchase of property,
plant and equipment, resulting in a total investment in fixed
assets of GBP17.5m (FY21: GBP21.1m).
Total expenditure on intangible assets and property, plant and
equipment is shown below:
31 July 31 July
2022 2021
GBPm GBPm
------------------------------------------- -------- --------
Software development 8.0 9.4
Panel recruitment 8.0 10.5
Total expenditure on intangible assets 16.0 19.9
Purchase of property, plant and equipment 1.5 1.2
------------------------------------------- -------- --------
Total capital expenditure 17.5 21.1
------------------------------------------- -------- --------
Other cash outflows for investing activities included GBP25.4m
paid in respect of the acquisitions of LINK and Rezonence in the
first half of the year.
Net expenditure on financing activities of GBP20.0m (FY21:
11.5m) included the dividend payment of GBP6.7m (FY21: GBP5.5m) and
the purchase of treasury shares for GBP9.9m to satisfy future
employee share option exercises (FY21: GBP2.2m). The GBP20.0m
revolving facility drawn earlier in the year was repaid in the
second half of the year using internal cash generation.
Net cash balances at the year-end increased by GBP1.9m to
GBP37.4m. Net cash outflow in the year was GBP1.0m (FY21: inflow of
GBP2.3m) and currency fluctuations in the year resulted in an
exchange gain of GBP2.9m (FY21: loss of GBP2.1m).
Acquisitions
During the year, the Group completed the acquisition of
Rezonence and LINK.
Rezonence, acquired for GBP5.1m in October 2021, is a technology
business with a patented FreeWall(R) technology, an interactive
advertising format that facilitates access to premium online
content after consumers engage with an advert or taking a
micro-survey.
LINK is the leading Swiss market and social research agency with
longstanding relationships with leading Swiss companies and global
blue-chip clients in the financial services, FMCG, retail
industries and government sector. Total consideration paid for LINK
was GBP21.3m and the business contributed GBP12.5m in revenue
during FY22.
Currency
The Group's results were impacted by the net depreciation of the
UK Sterling, as its average exchange rate was 3% lower against the
US Dollar in this period against the prior period. Movement against
the Euro was 4% higher compared to 31 July 2021. The net impact of
foreign exchange on the Group's adjusted operating profit(1) was an
increase of GBP1.2m compared to calculation in constant currency
terms.
Balance sheet
As at 31 July 2022, total shareholders' funds increased from
GBP112.7m to GBP125.3m. Net assets increased from GBP112.0m to
GBP125.0m, with a minority interest of GBP0.3m accounting for the
difference. Net current assets decreased from GBP15.2m to GBP4.7m.
Current assets increased by GBP12.8m to GBP95.2m, mainly due to a
GBP13.0m increase in trade and other receivables, with debtor days
decreasing from 37 to 35. Current liabilities increased by GBP23.3m
to GBP90.5m, mainly due to an increase in trade and other payables
of GBP19.0m, with creditor days increasing from 50 days to 52 days
at 31 July 2022. Non-current liabilities increased by GBP5.6m to
GBP24.9m due to a rise of GBP1.6m in provisions, and a GBP1.3m
increase in deferred tax liabilities in addition to the recognition
of GBP2.0m for a defined benefit pension scheme net liability in
relation to the acquisition of LINK.
Proposed dividend
The Board is recommending the payment of a final dividend of
7.0p per share for the year ended 31 July 2022. If shareholders
approve the dividend at the AGM (scheduled for 8 December 2022), it
will be paid on Monday 12 December 2022 to all shareholders who
were on the Register of Members at close of business on Friday 2
December 2022.
Alex McIntosh
Chief Finance Officer
11 October 2022
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 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
2022 2021
GBPm GBPm
Revenue 221.1 169.0 31%
--------- --------- -------
FX impact - 2.5 -
--------- --------- -------
Acquisitions (16.8) (0.7) -
--------- --------- -------
Kurdistan closure - (0.1) -
--------- --------- -------
Underlying revenue 204.3 170.7 20%
--------- --------- -------
Operating Profit reconciliation Year Year Change
to to %
31 July 31 July
2022 2021
GBPm GBPm
Statutory Operating Profit 30.0 19.0 58%
--------- --------- -------
Acquisition-related costs 6.3 6.5 (3%)
--------- --------- -------
Adjusted Operating Profit 36.3 25.5 42%
--------- --------- -------
FX impact - 1.2 -
--------- --------- -------
Acquisitions (0.2) (0.1) -
--------- --------- -------
Kurdistan closure - 0.6 -
--------- --------- -------
Underlying(1) operating profit 36.1 27.2 33%
--------- --------- -------
Adjusted EBITDA(1) reconciliation Year Year Change
to to %
31 July 31 July
2022 2021
GBPm GBPm
Adjusted Operating Profit 36.3 25.5 42%
--------- --------- -------
Depreciation 4.9 5.1 (4%)
--------- --------- -------
Amortisation 20.4 15.3 33%
--------- --------- -------
Adjusted EBITDA 61.6 45.9 34%
--------- --------- -------
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
2022 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 2022
2021
2022 (restated)(1)
Note GBPm GBPm
===== ======== ================
Revenue 1 221.1 169.0
Cost of sales (33.7) (26.2)
========================================== ===== ======== ================
Gross profit 187.4 142.8
Administrative expenses (157.4) (123.8)
========================================== ===== ======== ================
Operating profit 1 30.0 19.0
========================================== ===== ======== ================
Separately reported items 2 6.3 6.5
========================================== ===== ======== ================
Adjusted operating profit 1 36.3 25.5
========================================== ===== ======== ================
Finance income - 0.4
Finance costs (4.7) (0.5)
Profit before taxation 1 25.3 18.9
Taxation(1) 3 (7.8) (6.4)
========================================== ===== ======== ================
Profit after taxation 1 17.5 12.5
========================================== ===== ======== ================
Attributable to:
- Owners of the parent 17.1 12.5
- Non-controlling interests 0.4 -
========================================== ===== ======== ================
17.5 12.5
========================================== ===== ======== ================
Earnings per share
Basic earnings per share attributable to
owners of the parent(1) 5 15.7 11.5p
Diluted earnings per share attributable
to owners of the parent(1) 5 15.4 11.2p
========================================== ===== ======== ================
(1) Comparatives have been restated, as explained in the FY21
restatements section below.
All operations are continuing.
Consolidated Statement of Comprehensive Income
for the year ended 31 July 2022
2021
2022 (restated)(1)
=============================================== ===
GBPm GBPm
=============================================== === ====== ================
Profit for the year(1) 17.5 12.5
Other comprehensive (expense)/income:
Items that will not be reclassified to profit
or loss
Actuarial gains 1.2 -
Items that may be subsequently reclassified
to profit or loss
Currency translation differences 7.0 (7.5)
==================================================== ====== ================
Other comprehensive income/(expense) for
the year 8.2 (7.5)
==================================================== ====== ================
Total comprehensive income for the year 25.7 5.0
==================================================== ====== ================
Attributable to:
- Owners of the parent 25.3 5.0
- Non-controlling interests 0.4 -
=============================================== === ====== ================
Total comprehensive income for the year 25.7 5.0
==================================================== ====== ================
(1) Comparative has been restated, as explained in the FY21
restatements section below.
Items in the statement above are disclosed net of tax.
Consolidated Statement of Financial Position
for the year ended 31 July 2022
2021
2022 (restated)(1)
Note GBPm GBPm
================================ ===== ====== ==============================
Assets
Non-current assets
Goodwill 7 80.4 60.5
Other intangible assets 8 38.0 29.2
Property, plant and equipment 4.2 3.2
Right of use assets 9 11.3 12.1
Deferred tax assets(1) 11.3 11.1
================================ ===== ====== ==============================
Total non-current assets 145.2 116.1
================================ ===== ====== ==============================
Current assets
Trade and other receivables 10 53.7 40.7
Current tax assets 4.1 6.2
Cash and cash equivalents 37.4 35.5
================================ ===== ====== ==============================
Total current assets 95.2 82.4
================================ ===== ====== ==============================
Total assets 240.4 198.5
================================ ===== ====== ==============================
Liabilities
Current liabilities
Trade and other payables 11 66.8 47.8
Current tax liabilities 3.5 5.4
Contingent consideration 6.1 2.2
Provisions 11.2 8.7
Borrowings - -
Lease liabilities 2.9 3.1
================================ ===== ====== ==============================
Total current liabilities 90.5 67.2
================================ ===== ====== ==============================
Net current assets 4.7 15.2
================================ ===== ====== ==============================
Non-current liabilities
Contingent consideration 2.4 0.9
Provisions 6.7 5.1
Defined benefit pension scheme 2.0 -
net liability
Lease liabilities 9.3 10.1
Deferred tax liabilities(1) 4.5 3.2
================================ ===== ====== ==============================
Total non-current liabilities 24.9 19.3
================================ ===== ====== ==============================
Total liabilities 115.4 86.5
================================ ===== ====== ==============================
Net assets 125.0 112.0
================================ ===== ====== ==============================
Equity
Issued share capital 0.2 0.2
Share premium 31.5 31.5
Treasury reserve (9.6) (2.3)
Merger reserve 9.2 9.2
Foreign exchange reserve 14.6 7.6
Retained earnings 79.4 66.5
================================ ===== ====== ==============================
Total equity attributable to
owners of the parent 125.3 112.7
Non-controlling interests in
equity (0.3) (0.7)
================================ ===== ====== ==============================
Total equity 125.0 112.0
================================ ===== ====== ==============================
(1) Comparatives have been restated, as explained in the FY21
restatements section below.
Consolidated Statement of Changes in Equity
for the year ended 31 July 2022
Attributable to equity holders of the
Company
==================================================================================
Equity
attributable Non-
Issued Foreign Retained to owners controlling
share Share Treasury Merger exchange earnings of the interests
capital premium reserve reserve reserve (restated)(1) parent in equity Total
================== ======== ======== ========= ======== ========= =============== ============= ============ =======
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
================== ======== ======== ========= ======== ========= =============== ============= ============ =======
Balance at
1 August 2020 0.2 31.4 (1.7) 9.2 15.1 55.8 110.0 (0.7) 109.3
Exchange
differences
on translation - - - - (7.5) - (7.5) - (7.5)
================== ======== ======== ========= ======== ========= =============== ============= ============ =======
Net loss
recognised
directly in
equity - - - - (7.5) - (7.5) - (7.5)
Profit for
the year(1) - - - - - 12.5 12.5 - 12.5
================== ======== ======== ========= ======== ========= =============== ============= ============ =======
Total
comprehensive
income/(expense)
for the year - - - - (7.5) 12.5 5.0 - 5.0
================== ======== ======== ========= ======== ========= =============== ============= ============ =======
Issue of shares - 0.1 - - - - 0.1 - 0.1
Acquisition
of treasury
shares - - (2.2) - - - (2.2) - (2.2)
Treasury shares
used to settle
share option
exercises - - 1.6 - - (1.6) - - -
Dividends paid - - - - - (5.5) (5.5) - (5.5)
Share-based
payments - - - - - 5.1 5.1 - 5.1
Tax in relation
to share-based
payments(1) - - - - - 0.2 0.2 - 0.2
================== ======== ======== ========= ======== ========= =============== ============= ============ =======
Total
transactions
with owners
recognised
directly in
equity - 0.1 (0.6) - - (1.8) (2.3) - (2.3)
================== ======== ======== ========= ======== ========= =============== ============= ============ =======
Balance at
31 July 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/(Loss)
for the year - - - - - 17.1 17.1 0.4 17.5
================== ======== ======== ========= ======== ========= =============== ============= ============ =======
Total
comprehensive
income/(expense)
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 - - - - - (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
================== ======== ======== ========= ======== ========= =============== ============= ============ =======
(1) Comparatives have been restated, as explained in the FY21
restatements section below.
Consolidated Statement of Cash Flows
for the year ended 31 July 2022
2021
2022 (restated)(1)
GBPm GBPm
======================================================= === ======= ================
Cash flows from operating activities
Profit before taxation 25.3 18.9
Adjustments for:
Finance income - (0.2)
Finance costs 1.0 0.5
Amortisation of intangibles 20.4 15.3
Depreciation 4.9 5.1
Share-based payments 2.9 5.1
Other non-cash items(2) 8.6 6.1
Settlement of deferred consideration(1) - (9.8)
(Increase)/Decrease in trade and other receivables(1) (4.4) (5.8)
(Decrease)/Increase in trade and other payables(1) 9.5 8.3
Increase in provisions(1) 1.5 1.6
============================================================ ======= ================
Cash generated from operations 69.7 45.1
Interest paid (0.9) (0.5)
Income taxes paid (6.9) (7.1)
============================================================ ======= ================
Net cash generated from operating activities 61.9 37.5
============================================================ ======= ================
Cash flow from investing activities
Acquisition of subsidiaries (net of cash
acquired) (25.4) (2.8)
Purchase of property, plant and equipment (1.5) (1.2)
Purchase of intangible assets(1) (16.0) (19.9)
Interest received - 0.2
============================================================ ======= ================
Net cash used in investing activities (42.9) (23.7)
============================================================ ======= ================
Cash flows from financing activities
Proceeds from the issue of share capital - 0.1
Principal element of lease payments (3.4) (3.9)
Draw down of bank loans 20.0 -
Repayment of bank loans (20.0) -
Dividends paid to shareholders (6.7) (5.5)
Purchase of treasury shares (9.9) (2.2)
============================================================ ======= ================
Net cash used in financing activities (20.0) (11.5)
============================================================ ======= ================
Net (decrease)/increase in cash and cash
equivalents (1.0) 2.3
Cash and cash equivalents at beginning of
year 35.5 35.3
Exchange gain/(loss) on cash and cash equivalents(1) 2.9 (2.1)
============================================================ ======= ================
Cash and cash equivalents at end of year 37.4 35.5
============================================================ ======= ================
(1) Comparatives have been restated, as explained in the FY21
restatements section below.
(2) Includes GBP5.2m (2021: GBP6.5m) of contingent consideration
in respect of acquisitions treated as staff costs (Note 4) and
foreign exchange costs (Note 5).
Notes to the Consolidated Financial Statements
for the year ended 31 July 2022
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, which is also the functional currency of
the Parent Company. 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 2022.
The consolidated financial statements of YouGov plc have been
prepared under the historical cost convention modified for fair
values under International Financial Reporting Standards ("IFRS").
Financial assets, such as defined benefit pension scheme 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.
Financial statements for the year ended 31 July 2021 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 2022
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.
FY21 restatements
Following a Financial Reporting Council ("FRC") review of the
consolidated financial statements for the year ended 31 July 2021,
the Group restated tax on share-based payments to appropriately
reflect its allocation between equity and the income statement, and
restated its cash flow statement for several adjustments, the most
significant of which was to reclassify deferred consideration
payable to current employees as an operating cash flow.
The above restatements did not have a material effect on the
information presented in the statement of financial position as at
the beginning of the earliest comparative period. As a result, a
third balance sheet has not been presented.
Taxation
The IFRS 2 share-based payment charge is not tax deductible.
However, in our largest markets (UK and US), when share options are
exercised, the gain made is an allowable tax deduction. This timing
difference gives rise to a deferred tax asset under para 68c of IAS
12.
The FY21 expected tax cost in aggregate was correct, but the
allocation between the income statement and equity has been
restated as follows:
- Group income statement tax charge: GBP1.0m decrease, being the
increase in current tax charge of GBP1.4m offset by the decrease in
deferred tax charge of GBP2.4m
- Parent Company income statement tax charge: GBP1.4m decrease,
being the increase in current tax charge of GBP1.4m offset by the
decrease in deferred tax charge of GBP2.8m
- Group retained earnings: GBP1.0m increase, being the movements
as noted in the Taxation section above
- Parent Company retained earnings: GBP1.4m increase, being the
movements as noted in the Taxation section above
Notes to the Consolidated Financial Statements Continued
for the year ended 31 July 2022
Also, the FY21 deferred taxation has been restated by a GBP2.6m
increase in the deferred tax asset, being the reclassification of a
potential withholding tax liability to the deferred tax liability
account.
Consolidated Statement of Cash Flows
Under IFRS, payments for business acquisitions made to current
employees are treated as an operating cost. The cash flow for these
payments had been treated as investing in nature. Following the
review by the FRC, the GBP9.8m deferred consideration cash flow has
been restated to be shown as operating.
The review also flagged some smaller cash flow disclosure
adjustments that are needed. These have been restated in the FY21
Consolidated Statement of Cash Flows as set out below:
2021 2021 2021
========================================
(net
(published) (restated) impact)
========================================
GBPm GBPm GBPm
======================================== ============ =========== =========
(Increase)/Decrease in trade and other
receivables (6.5) (5.8) (0.7)
(Decrease)/Increase in trade and other
payables 9.3 8.3 1.0
Increase in provisions 3.0 1.6 1.4
Purchase of intangible assets (22.6) (19.9) (2.7)
Exchange (loss)/gain on cash and cash
equivalents (1.1) (2.1) 1.0
(17.9) (17.9) -
======================================== ============ =========== =========
Note, the changes reclassify cash flows between lines with a
GBPnil net impact on the Group's financial position and
performance.
Going concern
The Group meets its day-to-day working capital requirements
through its strong cash reserves and has access to a Revolving
Credit Facility. At 31 July 2022, the Group had a healthy liquidity
position, with GBP37.4m of cash and cash equivalents and no debt
financing commitments. The Group has net current assets of GBP4.7m
and net assets of GBP125.0m as at 31 July 2022.
In assessing going concern, management has considered the
economic and political effects of rising inflation and the Russian
invasion of Ukraine in February 2022, including the impact on the
Group's operations, budget for the year ended 31 July 2023 and
forecast for 2024. Following the escalation of the Russo-Ukrainian
conflict, management performed a business impact and risk
assessment. YouGov's business activity within Russia is not
significant (<GBP1m of revenue) and very few international
clients are subscribing for Russian data, so no material direct
impact is expected from the conflict.
Alongside this, there has been a significant increase in global
inflation, which has adversely impacted the economies and
businesses of territories the Group operates in. However, as the
Group's revenue sources and operations are well diversified, by
country and sector, the impact of that is also considered to be
mitigated.
However, given the uncertainty regarding the global economic and
political outlook, severe downside scenarios have also been
modelled where revenue targets are missed by up to 20% due to
reduced revenue from clients' delays and a slowdown in securing new
business. Even in these scenarios, the Group has strong liquidity,
no external debt as at year-end and many mitigating actions that
would allow it to meet its financial liabilities as they fall due.
These mitigating actions, should they be required, are all within
management's control and could include reducing new recruitment,
lowering commission or bonus payments, and reduced capital
expenditure.
The Directors therefore have a reasonable expectation that the
Group has adequate resources to continue in operational existence
for the foreseeable future. The Group therefore continues to adopt
the going concern basis in preparing its financial statements.
Notes to the Consolidated Financial Statements Continued
for the year ended 31 July 2022
The Directors therefore have a reasonable expectation that the
Group has adequate resources to continue in operational existence
for the foreseeable future. The Group therefore continues to adopt
the going concern basis in preparing its financial statements.
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.
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 21.0 27.0 7.7 (19.4) 36.3
Separately reported
items - - - (6.3) (6.3)
========================= ========== ============== ============== ================= ========
Operating profit 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
========================= ========== ============== ============== ================= ========
Eliminations
Custom and unallocated Group
Research Data Products Data Services costs (restated)(1)
2021 GBPm GBPm GBPm GBPm GBPm
======================== ========== ============= ============= ================ ===============
Revenue
Recognised over time 27.7 56.6 0.7 2.2 87.2
Recognised at a point
in time 37.9 1.4 44.8 (2.3) 81.8
------------------------ ---------- ------------- ------------- ---------------- ---------------
Total revenue 65.6 58.0 45.5 (0.1) 169.0
Cost of sales (14.1) (4.1) (7.2) (0.8) (26.2)
======================== ========== ============= ============= ================ ===============
Gross profit 51.5 53.9 38.3 (0.9) 142.8
Administrative expenses (37.9) (34.5) (29.5) (15.4) (117.3)
======================== ========== ============= ============= ================ ===============
Adjusted operating
profit 13.6 19.4 8.8 (16.3) 25.5
Separately reported
items - - - (6.5) (6.5)
======================== ========== ============= ============= ================ ===============
Operating profit 13.6 19.4 8.8 (22.8) 19.0
Finance income 0.4
Finance costs (0.5)
Profit before taxation 18.9
Taxation (1) (6.4)
======================== ========== ============= ============= ================ ===============
Profit after taxation 12.5
======================== ========== ============= ============= ================ ===============
(1) Coxmparative has been restated, as explained in the FY21
restatements section above.
Notes to the Consolidated Financial Statements Continued
for the year ended 31 July 2022
Supplementary analysis by geography
Revenue and adjusted operating profit/(loss) by geography based
on the origin of the sale:
2022 2021
===================== =====================
Revenue Adjusted Revenue Adjusted
operating operating
profit/ profit/
(loss) (loss)
GBPm GBPm GBPm GBPm
=================================== ======== =========== ======== ===========
UK 57.9 17.8 52.1 16.6
Americas(1) 99.5 32.1 74.8 23.0
Mainland Europe 45.7 3.3 30.6 3.2
Middle East 6.2 1.7 4.9 0.4
Asia Pacific 20.8 1.8 14.0 (0.1)
Intra-Group revenues/unallocated
costs (9.0) (20.4) (7.4) (17.6)
=================================== ======== =========== ======== ===========
Group 221.1 36.3 169.0 25.5
=================================== ======== =========== ======== ===========
(1) Americas refers to the US and Canada.
2 Separately reported items
2022 2021
===========================
GBPm GBPm
=========================== ===== =====
Acquisition-related costs 6.3 6.5
=========================== ===== =====
Acquisition-related costs in the year comprise GBP5.2m of
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 the newly
acquired entities.
Acquisition-related costs in the comparative year comprise
GBP6.5m of contingent consideration treated as staff costs in
respect of the acquisitions of SMG Insight Limited, InConversation
Media Limited, Portent.io Limited, Charlton Insights Inc., YouGov
Finance Limited (formerly Lean App Limited) and Faster Horses Pty
Limited and GBP0.3m of transactions costs in respect of the newly
acquired entities,
offset by GBP0.3m income from insurance rebate for SMG Insight
Limited litigation costs.
3 Taxation
The taxation charge represents:
2021
2022 (restated)(1)
======================================================
GBPm GBPm
====================================================== ====== ================
Current tax on profits for the year(1) 3.1 6.5
Adjustments in respect of prior years 0.1 0.6
Foreign tax 4.0 -
====================================================== ====== ================
Total current tax charge 7.2 7.1
====================================================== ====== ================
Deferred tax:
Origination and reversal of temporary differences(1) (3.1) (0.4)
Adjustments in respect of prior years(1) 3.5 (0.3)
Impact of changes in tax rates 0.2 -
====================================================== ====== ================
Total deferred tax charge 0.6 (0.7)
====================================================== ====== ================
Total income statement tax charge 7.8 6.4
====================================================== ====== ================
(1) Comparatives have been restated, as explained in the FY21
restatements section above.
Notes to the Consolidated Financial Statements Continued
for the year ended 31 July 2022
The tax assessed for the year is higher (2021: higher) than the
standard rate of corporation tax in the UK.
The differences are explained below:
2021
2022 (restated)(1)
===================================================
GBPm GBPm
=================================================== ====== ================
Profit before taxation 25.3 18.9
=================================================== ====== ================
Tax charge calculated at Group's standard rate
of 19% (2021: 19%) 4.8 3.6
Variance in overseas tax rates (1.4) 0.1
Impact of changes in tax rates 0.2 -
Impact of difference between current tax and (0.2) -
deferred tax rate
Research & development tax deduction 0.1 0.1
Expenses not deductible for tax purposes(1) 0.8 2.3
Tax losses for which no deferred income tax asset 0.3 -
was recognised
Adjustments in respect of prior years(1) 3.6 0.3
Other differences (0.4) -
=================================================== ====== ================
Total income statement tax charge for the year 7.8 6.4
=================================================== ====== ================
(1) Comparative has been restated, as explained in the FY21
restatements section above.
Excess tax on employee share option schemes of GBP1.0m (2021:
GBP0.2m) was recognised as income tax directly in equity, split
between current tax of GBP0.9m (2021: GBP1.4m) and deferred tax of
GBP0.1m (2021: (GBP1.2m)).
In the Spring Budget 2021, the Government announced that the
main UK corporation tax rate will increase to 25% from 1 April
2023. At 31 July 2022, as the proposal to increase the rate to 25%
had been substantively enacted on 24 May 2021, the effects have
been included in the financial statements.
On 23 September 2022, it was announced that the corporation tax
rate change from 19% to 25% with effect from 1 April 2023 was to be
cancelled. This was not substantively enacted at the balance sheet
date and therefore the impact of this change is not reflected in
the measurement of deferred tax. If the rate change had been
substantively enacted prior to 31 July 2022, the impact would have
been to reduce the net deferred tax asset by GBP0.1m with a
corresponding debi to the income statement.
The Group's current tax provision of GBP3.5m 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. Whilst a range of outcomes are reasonably
possible, the extent of this range is additional liabilities of up
to GBP3.0m to a reduction in liabilities of up to GBP0.8m.
4 Dividend
On 7 December 2021, a final dividend in respect of the year
ended 31 July 2021 of GBP6,700,000 (6.0p per share) (2020:
GBP5,510,000 (5.0p per share)) was paid to shareholders. A dividend
in respect of the year ended 31 July 2022 of 7.0p per share,
amounting to a total dividend of GBP7,802,000, is to be proposed at
the Annual General Meeting in December 2022. These financial
statements do not reflect this proposed dividend payable.
Notes to the Consolidated Financial Statements Continued
for the year ended 31 July 2022
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 treated as cancelled 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
and the post-tax effect of dividends and/or interest, on the
assumed conversion of all dilutive options and other potentially
dilutive Ordinary Shares.
The adjusted earnings per share have 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 in order to avoid a circular effect as a favourable
performance would be associated with incurring a larger share-based
payments charge and vice versa.
2021
2022 (restated)(1)
======================================================
GBPm GBPm
====================================================== ====== ================
Profit after taxation attributable to equity holders
of the Parent Company(1) 17.1 12.5
Add: share-based payments 2.9 5.1
Add: social taxes on share-based payments - 0.5
Add: imputed interest 0.1 0.1
Add: separately reported items (Note 2) 6.3 6.5
Tax effect of the above adjustments and adjusting
tax items (0.4) (1.0)
====================================================== ====== ================
Adjusted profit after taxation attributable to
equity holders of the Parent Company 26.0 23.7
====================================================== ====== ================
(1) Comparative has been restated, as explained in the FY21
restatements section above.
Notes to the Consolidated Financial Statements Continued
for the year ended 31 July 2022
Reconciliations of the earnings and weighted average number of
shares used in the calculations are set out below:
2021
2022 (restated)(1)
==================================================== ======= ================
Number of shares
Weighted average number of shares during the year:
('m shares)
- Basic 109.9 109.7
- Dilutive effect of share options 2.3 3.3
==================================================== ======= ================
- Diluted 112.2 113.0
==================================================== ======= ================
The adjustments have the following effect:
Basic earnings per share (restated)(1) 15.7p 11.5p
Share-based payments 2.6p 4.7p
Social taxes on share-based payments - 0.4p
Imputed interest 0.1p 0.1p
Separately reported items 5.7p 5.9p
Tax effect of the above adjustments and adjusting (0.9p
tax items (0.4p) )
==================================================== ======= ================
Adjusted earnings per share 23.7p 21.7p
==================================================== ======= ================
Diluted earnings per share (restated)(1) 15.4p 11.2p
Share-based payments 2.5p 4.5p
Social taxes on share-based payments - 0.4p
Imputed interest 0.1p 0.1p
Separately reported items 5.6p 5.8p
Tax effect of the above adjustments and adjusting (0.9p
tax items (0.4p) )
==================================================== ======= ================
Adjusted diluted earnings per share 23.2p 21.1p
==================================================== ======= ================
(1) Comparatives have been restated, as explained in the FY21
restatements section above.
Notes to the Consolidated Financial Statements Continued
for the year ended 31 July 2022
6 Business combinations
Summary of acquisitions during the year ended 31 July 2022
During 2022, the Group completed a total of two acquisitions.
For all of these acquisitions the Group obtained control through
acquiring 100% of voting equity interest unless otherwise
stated.
Primary reason for
Acquisition Date of acquisition Country acquisition Principal activity
=========================== ==================== ============ =========================== ========================
Rezonence Limited 30 September 2021 UK Development of an Interactive advertising
audience activation software company
platform
=========================== ==================== ============ =========================== ========================
LINK Marketing Services AG 9 December 2021 Switzerland Growth and expansion Market and social
within Switzerland and the research company
wider European region
=========================== ==================== ============ =========================== ========================
The amount recognised for each class of assets and liabilities
acquired is as follows:
Rezonence Link Marketing
Limited Services AG Total
GBPm GBPm GBPm
=============================== ========== =============== ======
Intangible assets 0.8 9.5 10.3
Property, plant and equipment
and right of use assets - 2.7 2.7
Cash 0.6 0.4 1.0
Current assets(1,2) 0.5 5.6 6.1
Current liabilities(2) (0.8) (6.0) (6.8)
Non-current liabilities - (5.4) (5.4)
========== =============== ======
Net assets acquired 1.1 6.8 7.9
Goodwill on acquisition 4.0 14.5 18.5
=============================== ========== =============== ======
Total consideration (3) 5.1 21.3 26.4
=============================== ========== =============== ======
(1) The carrying value of acquired receivables at the
acquisition date is the same as their fair value. The gross
contractual amounts receivable is GBP3.8m. Management expects the
amount of contractual cash flows to be collected and not to have a
material impact on the financial statements of the Group.
(2) Within current assets and current liabilities, there is
GBP0.3m of accrued income and GBP0.4m of deferred income acquired
in aggregate, respectively.
(3) Total consideration only comprises initial cash payments
made upon each acquisition for the year ended 31 July 2022.
Fair value
Fair value adjustments included the recognition of the fair
value of client relationships, brand value and panel for LINK
Marketing Services AG and software development in relation to
Rezonence Limited.
Goodwill
The goodwill amount in relation to Rezonence Limited is
attributable to the internally developed software of the acquiree.
The goodwill amount in relation to LINK Marketing Services AG is
attributable to the workforce and the future benefit to the Group
of being able to engage with new audiences in Mainland Europe.
None of those goodwill amounts are deductible for tax
purposes.
Acquisition-related costs
Acquisition-related costs incurred as part of the business
combinations are disclosed in Note 2. These have also been
recognised in the income statement in the year as separately
reported items.
Notes to the Consolidated Financial Statements Continued
for the year ended 31 July 2022
7 Goodwill
Middle Asia
Americas Nordic DACH East Pacific SMG UK Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
====================== ========= ======= ====== ======= ========= ======= ===== ======
Carrying amount
at 1 August
2020 20.8 6.9 11.7 1.7 1.3 17.9 1.2 61.5
Additions 0.1 - 0.4 - 1.3 - 0.1 1.9
Reallocation 14.1 - - - - (17.9) 3.8 -
Impairment - - - - - - - -
Exchange differences (1.1) (1.0) (0.6) (0.1) (0.1) - - (2.9)
====================== ========= ======= ====== ======= ========= ======= ===== ======
Carrying amount
at 31 July
2021 33.9 5.9 11.5 1.6 2.5 - 5.1 60.5
====================== ========= ======= ====== ======= ========= ======= ===== ======
At 31 July
2021
Cost 33.9 8.0 14.0 1.6 2.5 - 5.1 65.1
Accumulated
impairment - (2.1) (2.5) - - - - (4.6)
====================== ========= ======= ====== ======= ========= ======= ===== ======
Net book amount 33.9 5.9 11.5 1.6 2.5 - 5.1 60.5
====================== ========= ======= ====== ======= ========= ======= ===== ======
Carrying amount
at 31 July
2021 33.9 5.9 11.5 1.6 2.5 - 5.1 60.5
Additions - - 14.5 - - - 4.0 18.5
Reallocation - - - - - - - -
Impairment - - - - - - - -
Exchange differences 2.6 - (1.7) 0.2 0.3 - - 1.4
====================== ========= ======= ====== ======= ========= ======= ===== ======
Carrying amount
at 31 July
2022 36.5 5.9 24.3 1.8 2.8 - 9.1 80.4
====================== ========= ======= ====== ======= ========= ======= ===== ======
At 31 July
2022
Cost 36.5 8.0 26.8 1.8 2.8 - 9.1 85.0
Accumulated
impairment - (2.1) (2.5) - - - - (4.6)
====================== ========= ======= ====== ======= ========= ======= ===== ======
Net book amount 36.5 5.9 24.3 1.8 2.8 - 9.1 80.4
====================== ========= ======= ====== ======= ========= ======= ===== ======
In accordance with IAS 36, the carrying values of goodwill and
other intangible assets are reviewed annually for impairment. The
2022 impairment review was undertaken as at 30 April 2022, which
was changed from 31 July in the prior financial year. This change
was made to align the impairment test date with the quarterly
forecast process. It has not resulted in avoiding an impairment
loss and management will consistently perform the impairment tests
at the new date of 30 April in future years.
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 ending 31 July 2022.
Business grouping
The acquisition of LINK Marketing Services AG in the current
financial year, as disclosed in Note 9, resulted the CEO of LINK
being appointed to lead both Switzerland and Germany. As such, the
Germany CGU as previously disclosed incorporates Switzerland and
was renamed to DACH as at 31 July 2022.
In prior reporting years, SMG Insight Limited, YouGov's sports
business acquired in 2018, was treated as a separate CGU. Goodwill
associated with this CGU amounted to GBP17.9m. In the prior
financial year SMG underwent significant management and strategy
reorganisation, and the sports business unit was fully integrated
into the rest of the Group. The goodwill related to SMG was
therefore reallocated between the CGUs for the Americas and the UK
based on profits generated. Most of the ongoing sales for this
business line and the senior management have been absorbed into
these CGUs.
Notes to the Consolidated Financial Statements Continued
for the year ended 31 July 2022
- Perpetuity growth rates based on management's estimate of
future long-term average growth rates are UK 2.25% (2021:
2.25%), Americas 2.25% (2021: 2.25%), Nordic 2% (2021: 2%),
Middle East 2% (2021: 2%), Asia Pacific 2.25% (2021: 2.25%),
Germany 2% (2021: 2%) and Switzerland 2% (2021: not applicable)
(Germany and Switzerland are together referred to as "DACH").
- Pre-tax weighted average costs of capital are UK 12% (2021:
14%), Americas 9% (2021: 12%), Nordic 10% (2021: 13%), Middle
East 11% (2021: 11%), Asia Pacific 10% (2021: 12%), Germany
10% (2021: 15%) and Switzerland 14% (2021: not applicable).
8 Other intangible assets
Software Client Trademarks
Consumer and software contracts and product
panel development and lists development Total
===============================
GBPm GBPm GBPm GBPm GBPm
=============================== ========= ============== =========== ============= =======
At 1 August 2020
Cost 24.4 41.9 5.0 1.7 73.0
Accumulated amortisation (14.5) (30.3) (3.6) (1.4) (49.8)
=============================== ========= ============== =========== ============= =======
Net book amount 9.9 11.6 1.4 0.3 23.2
=============================== --------- -------------- ----------- ------------- =======
Year ended 31 July
2021
Opening net book amount 9.9 11.6 1.4 0.3 23.2
Additions: -
Separately acquired 11.7 1.6 - 0.1 13.4
Internally developed - 7.8 - - 7.8
Through business combinations - - 1.4 - 1.4
Disposals (2.0) (0.9) (0.2) (0.1) (3.2)
Amortisation:
Amortisation - current
year charge (7.1) (7.9) (0.3) - (15.3)
Amortisation - disposals 2.0 0.9 0.2 0.1 3.2
Exchange differences (0.6) (0.7) - - (1.3)
=============================== ========= ============== =========== =============
Closing net book
amount 13.9 12.4 2.5 0.4 29.2
=============================== ========= ============== =========== ============= =======
At 31 July 2021
Cost 34.1 50.4 6.2 1.7 92.4
Accumulated amortisation (20.2) (38.0) (3.7) (1.3) (63.2)
=============================== =======
Net book amount 13.9 12.4 2.5 0.4 29.2
=============================== ========= ============== =========== ============= =======
Year ended 31 July
2022
Opening net book amount 13.9 12.4 2.5 0.4 29.2
Additions: -
Separately acquired 9.3 1.1 - - 10.4
Internally developed - 6.9 - - 6.9
Through business combinations 0.7 1.4 7.0 1.1 10.2
Disposals (1.7) (0.2) - - (1.9)
Amortisation:
Amortisation - current
year charge (9.9) (9.1) (1.2) (0.2) (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 9.1 1.3 38.0
=============================== ========= ============== =========== ============= =======
At 31 July 2022
Cost 44.8 59.6 14.4 3.0 121.8
Accumulated amortisation (29.9) (46.9) (5.3) (1.7) (83.8)
=============================== =======
Net book amount 14.9 12.7 9.1 1.3 38.0
=============================== ========= ============== =========== ============= =======
Notes to the Consolidated Financial Statements Continued
for the year ended 31 July 2022
9 Right of use assets
Office equipment
Computer and motor
Premises equipment vehicles Total
==========================
GBPm GBPm GBPm GBPm
========================== ========= =========== ================= =======
At 1 August 2020
Cost 16.2 1.1 0.2 17.5
Accumulated depreciation (7.7) (0.8) (0.1) (8.6)
========================== ========= =========== ================= =======
Net book amount 8.5 0.3 0.1 8.9
========================== ========= =========== ================= =======
Year ended 31 July 2021
Opening net book amount 8.5 0.3 0.1 8.9
Additions 7.5 - - 7.5
Disposals (1.8) - - (1.8)
Depreciation:
Depreciation - current
year charge (3.4) (0.1) (0.1) (3.6)
Depreciation - disposals 1.8 - - 1.8
Exchange differences (0.7) - - (0.7)
========================== ========= =========== =================
Closing net book amount 11.9 0.2 - 12.1
========================== ========= =========== ================= =======
At 31 July 2021
Cost 21.9 1.1 0.2 23.2
Accumulated depreciation (10.0) (0.9) (0.2) (11.1)
========================== ========= =========== ================= =======
Net book amount 11.9 0.2 - 12.1
========================== ========= =========== ================= =======
Year ended 31 July 2022
Opening net book amount 11.9 0.2 - 12.1
Additions 1.5 - - 1.5
Disposals (2.1) (0.1) (0.1) (2.3)
Depreciation:
Depreciation - current
year charge (3.1) (0.1) - (3.2)
Depreciation - disposals 2.1 0.1 0.1 2.3
Exchange differences 0.9 - - 0.9
==========================
Closing net book amount 11.2 0.1 - 11.3
========================== ========= =========== ================= =======
At 31 July 2022
Cost 22.9 1.0 0.1 24.0
Accumulated depreciation (11.7) (0.9) (0.1) (12.7)
========================== ========= =========== ================= =======
Net book amount 11.2 0.1 - 11.3
========================== ========= =========== ================= =======
The total expense to the Group relating to assets leased on a
short-term basis was GBP677,000 (2021: GBP779,000). The total
expense relating to leases of low-value assets was GBP46,000 (2021:
GBP42,000).
Notes to the Consolidated Financial Statements Continued
for the year ended 31 July 2022
10 Trade and other receivables
31 July 31 July
2022 2021
=======================
GBPm GBPm
======================= ======== ========
Trade receivables 26.1 20.9
Expected credit loss (0.9) (1.0)
======================= ======== ========
Net trade receivables 25.2 19.9
Other receivables 7.5 4.6
Prepayments 6.0 4.7
Accrued income 15.0 11.5
======================= ======== ========
53.7 40.7
======================= ======== ========
11 Trade and other payables
31 July 31 July
2022 2021
=================
GBPm GBPm
================= ======== ========
Trade payables 6.6 5.0
Accruals 21.5 19.3
Deferred income 23.7 14.7
Other payables 15.0 8.8
================= ======== ========
66.8 47.8
================= ======== ========
Included within other payables are GBP0.6m (2021: GBP0.4m) of
contributions due in respect of defined contribution pension
schemes.
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END
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October 11, 2022 02:00 ET (06:00 GMT)
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