YouGov shares plunge by a third after profit warning

YouGov shares plunged by more than a third after the polling and data analytics group warned that annual profits would fall short of forecasts.

The London-listed group said on Thursday that slowing sales at its data products division, declining demand for its fast-turnaround research services and “challenges” in the European, Middle East and African markets were to blame.

As a result, YouGov said adjusted operating profit for its current financial year would be between £41mn and £44mn, down from £48.3mn in 2023. 

YouGov’s shares tumbled 36 per cent in early trading.

It now expects revenues of between £324mn to £327mn as business has slowed in the second half of its financial year. It posted revenue of £258.3mn for 12 months to the end of July 2023.

The company said it had invested in the business assuming an acceleration in growth in the second half of its financial year but that the upswing had failed to materialise.

Fiona Orford‑Williams​​​​, director at Edison Group, said the profit warning appeared to “stem mostly from its underlying optimism for its data products”.

She added the market had reacted to the impact of the lower revenue assumption for the second half on group profitability and investors would “be looking for reassurance that these issues are temporary and resolvable”.

The group had sought to capitalise on elections in countries such as the UK and US this year. YouGov was co-founded by former UK chancellor Nadhim Zahawi, who will stand down as an MP at next month’s general election.

Chief executive Steve Hatch last year told the Financial Times YouGov would target the US for the next stage of growth in the business while the company’s co-founder and chair Stephan Shakespeare said it was weighing up a US listing.

Russ Mould, investment director at AJ Bell, said the announcement “may reduce some of the clamour for the company to move its listing to the US in search of a higher rating”.

At its half-year results in March, Hatch said YouGov had “confidence” that it could “achieve growth for the full year in line with current market expectations”. It reported £27.9mn of adjusted operating profit for the six-month period to January 31.

YouGov in January completed the acquisition of GfK’s Consumer Panel Services for €315mn. On Thursday, it said the business was performing in line with expectations but some of its contribution would “shift slightly” into the next financial year.

The company said next year it would focus on optimising its cost base, prioritising investment in critical growth areas, building out artificial intelligence capabilities and enhancing its sales organisation.