Social media boosts YouGov

Polling company YouGov has reaped the benefits from an increased focus on social media, reporting a jump in sales in its full-year results.

YouGov’s new social media analysis tool, SoMA – which lets companies see what impact their brand has on Facebook and Twitter – played an important part in recent contract wins, according to Stephan Shakespeare, the group’s chief executive.

New clients included ITV in the UK and Starbucks in the US, where revenues jumped 21 per cent to £19.2m, after the group overcame teething troubles following recent acquisitions. Across the group, revenues rose 4 per cent to £58.1m in the year to July 31.

Revenues in YouGov’s core UK market rose 15 per cent to £15.7m, with operating margins remaining steady at 24 per cent. “We have a dominant brand here,” said Mr Shakespeare. But he added: “We have a long way to go to match that brand in terms of market research share.”

Performance at the group’s struggling German division continued to improve, with a threefold jump in operating margin to 7 per cent.

“It’s the first time that [Germany was] in line with expectations,” said Mr Shakespeare. “We have cut back on the unprofitable parts [and] we are now in the position of talking about growth.” Revenue in the division fell by almost a fifth to £9.4m, however, after YouGov disposed of one business and closed another.

Mr Shakespeare said that the group will continue to focus on global expansion, with new markets in Brazil, Russia and China a priority.

Any move into these markets will not necessarily involve a physical presence in the countries, according to the chief executive. “We don’t need a physical footprint to deliver data,” said Mr Shakespeare. “We’re talking here about upping our operational abilities, rather than some massive expansion.”

YouGov already produces research in 30 countries.

The group announced a dividend for the first time, paying out 0.5p per share. Earnings per share rose a third to 0.4p, while profit before tax across the group was flat at £0.4m.

Shares in the group edged down 1.9 per cent to 77p on Monday.

FT Comment

YouGov has big plans. Its potential push into Brazilian, Chinese and Russian markets, coupled with its nifty social media tool, means that YouGov is well-positioned for future growth. Its shares, however, might struggle to keep up. These solid results cap off a successful year for the polling group, which has lifted its share price 75 per cent since January. Success has a price, however, and a full-year 2013 price/earnings ratio of 15.7 means YouGov no longer looks cheap, especially compared with French rival Ipsos, on a forward p/e of 11.