YouGov shares nearly halve in worth after gross sales and income warning

Shares within the polling firm YouGov plunged by nearly half on Thursday after the UK analysis and analytics firm warned that gross sales and income could be decrease than anticipated this 12 months.

The agency, which is greatest recognized for its political polling however generates most of its revenues from offering client information and evaluation to companies, mentioned gross sales bookings had been decrease than anticipated because it reported half-year figures in late March.

Consequently, YouGov now expects revenues this 12 months to be between £324m and £327m, whereas adjusted working revenue is predicted to return in between £41m and £44m. That is beneath the estimates of analysts, who had been forecasting revenues of £341m and income of £67m.

The shares fell 46% to 440p, giving the corporate a market worth of about £510m. Final 12 months, it was value greater than £1bn.

The corporate, which has a panel of greater than 27 million individuals globally who signal as much as take its surveys, mentioned demand was sluggish in Europe, the Center East and Africa, specifically Germany, Austria and Switzerland.

Whereas demand for customised analysis has gone up, gross sales in YouGov’s information merchandise division have remained sluggish, with fast-turnaround analysis companies persevering with to say no.

“Informal observers of YouGov would possibly assume the corporate would take pleasure in a bumper time throughout the election however its polling operation makes a comparatively modest contribution to group income,” mentioned Russ Mould, funding director of the stockbroker AJ Bell.

“The information analytics facet is extra necessary and that is the place the corporate is struggling. The corporate invested for an anticipated acceleration of progress within the second half of its monetary 12 months which, in basic style, didn’t materialise.

“This may increasingly scale back a few of the clamour for the corporate to maneuver its itemizing to the US in search of a better ranking. The one reassuring component of the announcement is the lately acquired client panel enterprise is performing as anticipated.”

Final 12 months, Stephan Shakespeare, who moved from chief government to chair of the agency he set up with the former chancellor Nadhim Zahawi in 2000, mentioned YouGov was contemplating transferring its itemizing to the US, its largest market, the place it really works with expertise firms and client manufacturers.

In January, YouGov purchased GfK’s client panel companies enterprise, the German firm’s family buy information division, which elevated YouGov’s measurement within the US by 50%. It mentioned on Thursday that the enterprise was doing effectively, though a few of its contribution will shift barely into subsequent 12 months.

YouGov invested £6m in applied sciences within the first half of the 12 months, up from £4.4m a 12 months earlier, and launched its first synthetic intelligence product to fulfill rising demand in qualitative analysis.

It mentioned it could deal with streamlining the enterprise to economize and prioritise funding in key progress areas equivalent to upgrading information merchandise, increasing its AI capabilities and bettering its gross sales operation.