Daily Research News Online no. 6013 - YouGov Triples Turnover, Quadruples Profit

YouGov Triples Turnover, Quadruples Profit

October 9 2006

YouGov plc, the polling and MR provider with bases in the UK and Middle East, has announced rapid growth in its preliminary results for the year to 31 July. Sales have more than tripled to £9.5m from £2.9m, while operating profit grew 302% to £3.9m.

Profit Before Tax (PBT) increased from £1.0m to £4.1m and the firm says it has made a good start to the current financial year. Joint CEO Nadhim Zahawi says the results reflect 'our unique position in market research and our commitment to developing a representative panel' as well as the scalability of the company's market research model. The company says it has delivered on three specific objectives: strong organic growth, new products developed and geographical expansion.

Chairman Peter Kellner in his statement says the financial year 2005/06 'has been an important one for YouGov.' UK operations continue to grow strongly, with reported growth at 65% (vs 25% for the online research sector as a whole). Meanwhile the Middle East operations have contributed more than half of the group revenue and profit.

Bespoke revenue has grown from 61% to 78% of total, with syndicated revenues a new feature at 2%. Omnibus revenues have also grown strongly in absolute terms (from £1.1m to £2.0m) but as a proportion ot all revenue have declined from 39% to 20%. During the year the business generated £1.75m in cash: however, consistent with statements made at flotation and in subsequent reports, the directors are not recommending the payment of a dividend.

Among the year's specific successes, the BrandIndex tracker was launched on 24 October 2005, providing daily tracking of 1,149 consumer brands, and has a number of household names among its subscribers � partners are being sought to support the product's international roll-out. The firm's proprietary panel grew to 107,000 and the Middle Eastern panel to 35,000, with smaller panels being developed in North America, Canada, and Germany. A 50:50 joint venture with stockbroking house, Execution Limited, called YouGovExecution Limited (YGX), launched in February providing primary research to the investment community.

In the Middle East, the company's head count increased from 5 to 18 at 31 July 2006; Dubai-based marketing and research boutique Siraj was acquired on 30 July; new offices in Saudi Arabia are being considered; and there are plans to launch BrandIndex into the Middle East within the next 12 months.

The firm says it is 'continually assessing companies operating in the market research sector, to identify those with the most logical, commercial fit with YouGov' for acquisition. Outside the Middle East, staff numbers are up from 20 to 41. Given this rapid growth, Kellner says 'the Board and I believe that it is necessary to put in place a management structure that will support the capacity to drive and manage the Group's ambitions. It is
proposed that the plc Board should be supported by an operational board made up of the executive
management team and the heads of the UK and Middle Eastern operations. Over time, new country or
regional heads could be added to the operational board.' YouGove has also appointed head hunters to
recruit an independent non-executive Chairman, at which point Kellner will assume the role of President and remain as a non-executive director.

The company, which also announced a tripling of revenues in its half-yearly results on April 4th (www.mrweb.com/drno/news5368.htm ) is online at www.yougov.com .