Interim Results for the six months ended 31.01.16

21 March 2016

YouGov plc

Interim results for the six months ended 31 January 2016

Summary of Results
	Six months to 31 January 2016 £m	Six months to 31 January 2015 £m	Change %	Full Year  to 31 July  2015 £m
Revenue	41.5	36.2	15%	76.1
Adjusted Operating Profit1	4.3	3.3	29%	8.6
Adjusted Operating Profit Margin (%)	10%	9%	1% point	11%
Adjusted Profit before Tax1	5.0	3.5	42%	9.1
Adjusted Earnings per Share1	3.4p	2.6p	33%	7.0p
Statutory Operating Profit	1.7	0.1	-	2.9
Statutory Profit before Tax	1.9	-	-	2.7

 

 

Financial highlights - Strong revenue and profit growth

·      Revenue growth of 15% (2015: 11%) - Constant currency growth of 13%

·      Adjusted operating profit¹ up by 29% to £4.3m

·      Adjusted profit before tax up by 42% to £5.0m

·      Adjusted earnings per share up by 33% to 3.4p (2015: 2.6p) 

·      Adjusted operating profit margin up 1% to 10%

·      Net cash balances of £10.1m (2015: £3.7m)

·      Dividend of 1.0p per share paid in December 2015 (December 2014: 0.8p)

 

Operational highlights - Good progress in line with the 5 year growth plan

·      Data Products and Services revenue up by 32% to £15.8m; now represents 38% of total (2015: 33%)

o  YouGov BrandIndex revenue up by 45% to £6.8m

o  YouGov Omnibus revenue up by 28% to £7.4m

·      Custom Research revenue up by 6% to £25.7m, outperforming the market

·      New YouGov Profiles product gaining traction and achieving its sales goals

·      Core markets - US and UK - performed strongly

·      Middle East, as well as new markets (Asia Pacific and France), continue to grow well

·      New management appointments for Northern Europe and Global Reports

 

 

¹Adjusted operating profit is defined as Group operating profit before amortisation of intangibles and exceptional items. In the period ended 31 January 2016, amortisation of intangible assets was £2.5m (2015: £2.2m) of which £1.1m related to the Group's internally generated assets and exceptional costs were £nil (2015: £1.0m). Adjusted profit before tax and earnings per share are calculated based on the adjusted operating profit.

 

 

Commenting on the results, Stephan Shakespeare, Chief Executive, said:

"We are pleased to report another half-year of strong organic revenue and profit growth which demonstrates the successful implementation of our strategy.

Increasingly, clients are looking for new solutions with greater sophistication and efficient operations, and our global data products and custom research services provide that, leading to continued outperformance against the research market. The expansion of our model and brand into new markets such as Asia Pacific, and of operations into Eastern Europe, is also contributing successfully to our global development. 

We are well positioned for the future and see significant opportunities for further growth of our existing syndicated data products and data services, including high potential for the YouGov Cube and YouGov Profiles. This is an exciting time for YouGov and the second half of our financial year has started well with trading in line with expectations."

 

Enquiries:

YouGov plc Stephan Shakespeare / Alan Newman	020 7012 6000
FTI Consulting Charles Palmer / Antonia Gray / Karen Tang	020 3727 1000
Numis Securities  Limited (NOMAD and broker) Nick Westlake / Toby Adcock	020 7260 1000

 

Chief Executive Officer's Review

Introduction

YouGov has achieved another half-year of strong organic revenue and profit growth in line with our goals, which reflects the continuing success of the strategy that we have previously outlined to our shareholders. It also provides further evidence that our differentiated offering of innovative data products and custom research based on our digital platform meets the needs of clients for dynamic, timely and in-depth information on their fast-changing markets and customer behaviours.

Group revenue in the six months ended 31 January 2016 increased by 15% year-on-year to £41.5m, a growth rate well above that of the global research market. Growth was 13% on a constant currency basis with US dollar appreciation partly offset by depreciation of the Euro and Nordic currencies. The Group's adjusted operating profit increased by 29% to £4.3m and the operating margin was 1% point higher at 10%. 

These results reflect the faster relative revenue growth of our higher margin Data Products and Services segment. This revenue grew by 32% to £15.8m and now represents 38% of the total Group revenue, a year-on-year increase of 5% points in this share. As a result it now accounts for 59% of Group adjusted operating profit before central costs (2015: 54%). Its operating margin remained at 25%, as in the comparable period. Within Data Products and Services, YouGov BrandIndex revenue grew by 45% to £6.8m and YouGov Omnibus by 28% to £7.4m. Our new YouGov Profiles product, the media planning and segmentation analytical tool whose US and German versions were launched in 2015, to add to the UK version, now has some 50 subscribers across all its markets which is in line with our plans.  

Our Custom Research business also performed well achieving revenues of £25.7m and growth of 6%, in itself higher than most major research businesses. It improved its operating margin by 1% point to 11%, reflecting the benefits of further process automation and harmonisation across the Group.

Among our regions, the USA - which is the Group's largest in revenue terms - achieved 14% growth (8% in constant currency terms) and 6% growth in adjusted operating profit. This reflects the increased awareness of our brand in the US and success in nurturing client relationships with a number of major brands and agencies across both the Data Products and Custom Research segments. UK revenue grew by 17% and its operating profit by 78%, benefitting from the investment in sales and product development resources made over the previous 12 months. The Middle East region grew both its revenue and profits significantly across all its main markets and our newer operations in Asia Pacific and France where investment has continued, also reported strong revenue growth in line with plans. Nordic revenue grew by 6% in local currency but fell by 3% in reported terms while Germany's revenue fell by 3% in local currency and by 10% in reported terms. While BrandIndex and Omnibus revenues grew in both units, Custom Research revenue declined, partly due to the challenging economic conditions in both markets. The Nordic and German units have now been brought under a single Northern European CEO with effect from March 2016, with the aim of focussing their resources on the expansion of the more profitable core YouGov services in this region.  

The Group's adjusted operating profit margin increased to 10% compared to 9% in the six months to 31 January 2015. This was due to a reduction in the operating expense ratio from 67% to 66%, reflecting the continuing shift towards less labour intensive data products and services. This was achieved while we continued to make investments in resources to support our growth plans. These included increasing the sales and product development teams for Data Products, adding staff in our newer businesses in Asia Pacific and France and creating a shared services operations centre in Romania. The transfer of work to this new centre is progressing well.

Our cash conversion rate returned to its normal levels at 90% of adjusted operating profit, a significant improvement on the unusually low level in the six months to 31 January 2015. Cash generated from operations was £3.9m compared to only £0.3m in the corresponding period. The cash balance at 31 January 2016 of £10.1m was £0.1m higher than at 31 July 2015 and £6.5m higher than at 31 January 2015.

A dividend of 1.0p per share in respect of the year ended 31 July 2015 was paid to shareholders in December 2015, following the AGM. This represented an increase of 25% over the dividend paid in 2014.

Strategy

Our five key strategic objectives remain:

·      Grow our syndicated product suite

·      Integrate custom and syndicated data

·      Enhance our user experience

·      Boost our public profile

·      Expand our geographic footprint

 

With 28 offices in 21 countries and panels in 37 countries, YouGov continues to have one of the world's top ten international market research networks.

 

Consistent with our strategy, we have maintained our focus on growing Data Products and Services and continued to raise the revenue proportion from this higher-margin side of the business towards the goal of parity with Custom Research.  

 

The YouGov Cube, the highly structured and codified profile data library, is becoming the central feature of the YouGov client value proposition, allowing us already to have collected much of the data that clients may need before they even engage with us. It started in the UK and is also operational in Germany and the USA. We have continued to expand the scope and volume of the data categories in the Cube and in the UK it has now grown from the original level of 120,000 data points to over 200,000 so far. Mini versions of the Cube have been set up and are growing in the Asia Pacific region where we have launched Cube-based products such as YouGov Profiles in China, Indonesia and Malaysia. We are reaching a similar build level in the Nordic countries and have commenced the process in France.

 

We believe that the YouGov Cube is becoming one of the largest connected data sets available relating to a defined set of people. It already underpins YouGov's data products such as Profiles and BrandIndex as well as providing the foundation for a new, more powerful form of custom research. Our syndicated products can be supported by data analytics services and enhanced by additional custom data. Custom research can be differentiated using the added richness of Cube data. For example, we have recently introduced a new Profiles "re-contact" service which allows subscribers to obtain "deep-dive" information on specific issues through additional questions to panellists. The resulting data is combined with Profiles data on the same respondents, to provide a more-in depth understanding based on the selected criteria.

 

We also continue to develop further innovative means of utilising Cube data. YouGov Profiles data is well suited to programmatic advertising processes and this use has been trialled by a media agency for the launch of a new music album, with demonstrable success. In addition to seeking new applications for our existing data, we are also exploring new streams of data (e.g. audience measures and purchase transaction data) through various pilots.

 

Our panel of over 4 million people worldwide who provide us with a continuous stream of data both through paid surveys and volunteered information is a key asset which depends on the panellists remaining engaged with YouGov. We therefore continuously seek to improve the respondents' experience. Recent initiatives include new guidelines for researchers to ensure that the surveys they design are less onerous and more engaging. We have also improved the mobile technology we use so as to make participation more convenient and enjoyable. YouGovDaily, an app that is only incentivised by the quality of the experience (which includes instant shareable results of mini-polls on the issues of the day) and which has so far been running only in the UK, has now been launched in the US under the name First Verdict. Development has also begun on iOS and Android apps that will make participation as a YouGov panellist even easier.

 

YouGov's websites are another important part of our interaction with panellists, clients and the wider public. New dedicated websites for individual countries, with better navigation to our commercial offering, have been launched in the US, UK and our Northern European units. These will be extended to other YouGov territories during the rest of the 2016 calendar year. YouGov ProfilesLITE, the tool on our website that allows users to explore extracts of YouGov Profiles data has now attracted some 11,000 users in the UK. As well as helping to familiarise people with Profiles, and YouGov data generally, ProfilesLITE is also proving to be a valuable source of potential subscribers to the main Profiles product. It was launched in the US and Germany in the autumn of 2015.

YouGov continues to be one of the most highly quoted market researchers in most of the regions where we operate including UK, USA, Germany, Nordic and Middle East. In the USA, our visibility is being further boosted by the increasing media profile gained for our election polling, with our surveys on the Presidential nomination campaigns building on the awareness gained during the 2014 mid-term elections. In the UK, YouGov's partnership with Cambridge University has been expanded to create the YouGov Centre for Public Opinion and Policy Research at the University of Cambridge. This has already run high-profile events addressing the forthcoming EU Referendum on which subject an international conference is planned in Berlin in May 2016 in partnership with the Aspen Institute and the British Chamber of Commerce Germany. 

 

Financial Performance

Total Group revenue in the period rose by 15% to £41.5m compared to £36.2m in the six months to 31 January 2015. Growth was 13% on a constant currency basis with US dollar appreciation leading to 6% higher reported revenue in  the US and Middle East and depreciation of the Euro and Nordic currencies resulting in reported revenue in Germany, France and Nordic being 8% lower than if calculated in local currency.

Gross margin remained at 76% points and Group operating costs of £27.2m (2015: £24.2m), excluding amortisation and exceptional items, fell by 1% as a proportion of revenue. At 31 January 2016, Group staff numbers totalled 654 (full time equivalents) compared to 638 in July 2015 and 627 in January 2015.

Total Group adjusted operating profit, before amortisation and exceptional items, grew by 29% to £4.3m compared to £3.3m in the six months ended 31 January 2015. Amortisation charges for intangible assets totalled £2.5m (2015: £2.2m) in the period of which £0.4m related to assets acquired through business combinations, £1.0m to separately acquired assets and £1.1m to the Group's internally generated assets.

The Group recognised net financial income of £0.2m compared to a charge of £0.1m in the six months to 31 January 2015, largely due to foreign exchange translation gains.

The higher operating profit combined with the net financial income led to the adjusted profit before tax of £5.0m increasing by £1.5m (42%) from the comparable result of £3.5m. Adjusted earnings per share rose by 33% to 3.4p, compared to 2.6p in the six months to 31 January 2015. A statutory profit before tax of £1.9m was reported after charging exceptional items, amortisation and share based payment costs of £3.1m, compared to a loss of £0.02m in the six months ended 31 January 2015.

Cash generated from operations (before paying interest and tax) of £3.9m (2015: £0.3m) represented operational cash conversion of 90% of adjusted operating profit. This is around the normal level of conversion, rather than the unusually low level of 9% experienced in the six months to 31 January 2015. This reflects the reduction in the Group's receivable days (after adjusting for the unbilled portion of revenue recognised less amounts billed in advance) from 79 days at 31 January 2015 to 56 days as at 31 January 2016. Creditor days also decreased from 34 days at 31 January 2015 to 27 days as at 31 January 2016.

The Group invested £1.1m (2015: £1.3m) in the continuing development of our technology platform and increased the investment in panel recruitment to £0.9m (2015: £0.5m) to support its expansion in a number of geographies. £0.3m (2015: £0.4m) was spent on the purchase of tangible assets, resulting in a total investment in fixed assets of £2.6m (2015: £2.8m). Other cash outflows included taxation payments of £0.7m (2015: £0.5m) and the annual dividend payment of £1.0m (2015: £0.8m) in December 2015.

There was a net cash outflow of £0.5m in the period, compared to £3.8m in the six months to 31 January 2015. This combined with a £0.6m increase in the value of non-sterling cash balances due to foreign exchange movements resulted in net cash balances of £10.1m at 31 January 2016 being just above the balances of £10.0m as at 31 July 2015 and significantly higher than those of £3.7m as at 31 January 2015.

 

Analysis of Adjusted Operating Profit and Earnings per Share

	Six months to	Six months to	Full Year to
	31 Jan 2016	31 Jan 2015	31 July 2015
	£000	£000	£000
Adjusted group operating profit before amortisation of intangibles & exceptional costs	4,274	3,322	8,570
Share based payments	531	288	669
Imputed interest1	12	18	32
Net finance income/(cost)	182	(117)	(220)
Share of post-tax profit in associates	4	-	42
Adjusted profit before tax2	5,003	3,511	9,093
Adjusted taxation3	(1,423)	(996)	(2,016)
Adjusted profit after tax	3,580	2,515	7,077
Minority interests	(22)	52	(26)
Adjusted profit after tax attributable to owners of the parent	3,558	2,567	7,051
Basic earnings/(loss) per share	1.2p	(0.3p)	3.2p
Diluted earnings/(loss) per share	1.2p	(0.3p)	3.1p
Adjusted earnings per share4	3.4p	2.6p	7.0p
Adjusted diluted earnings per share	3.3p	2.5p	6.7p

 

¹Imputed interest relates to the unwinding of discounting in respect of deferred consideration for acquisitions.

²Adjusted profit before tax is defined as Group profit before tax after adding back amortisation of intangibles, share

 based payments, imputed interest, exceptional items and one-off costs associated with the acquisition of new entities.

³The adjusted taxation charge reflects the tax effect of the adjustments to reported profit before tax. For the year ended 31 July 2015, it also excludes a one-off credit of £1.2m relating to the recognition of a deferred tax asset arising from available tax losses in Germany. 

⁴ Adjusted earnings per share is calculated based on the post-tax result derived from the adjusted profit before tax

 and the fully diluted number of shares.

 

Current trading and outlook

Current trading is in line with the Board's expectations and we remain confident in our ability to achieve the ambitious goals that we have set to create long-term value for shareholders. We continue to have a strong pipeline of opportunities for further growth in our Data Products and Services supported by our expanding international presence. We also expect our Custom Research business to continue gaining clients through our panel-centric methodology, enhanced by the development of the YouGov Cube. We will keep investing to support growth in the key areas of the business and to build on our strong base in line with our strategic objectives.

 

Review of Global Products and Services

Revenue	Six months to 31 Jan 2016 £m	Six months to 31 Jan 2015 £m	Revenue Growth %
Data Products (incl. BrandIndex)	7.7	5.3	44%
Data Services (incl. Omnibus)	8.1	6.6	22%
Total Data Products & Services	15.8	11.9	32%
Custom Research	25.7	24.3	6%
Group	41.5	36.2	15%

 

Adjusted Operating Profit	Six months to 31 Jan 2016 £m	Six months to 31 Jan 2015 £m	Operating Profit Growth %	Operating Margin
				Six months to 31 Jan 2016	Six months to 31 Jan 2015
Data Products (incl. BrandIndex)	1.9	1.0	81%	24%	19%
Data Services (incl. Omnibus)	2.0	1.9	6%	25%	29%
Total Data Products & Services	3.9	2.9	32%	25%	25%
Custom Research	2.7	2.5	10%	11%	10%
Unallocated Costs	(2.3)	(2.1)	11%	-	-
Group	4.3	3.3	29%	10%	9%

 

Data Products are comprised of YouGov BrandIndex, our flagship brand intelligence tracker (85% of the total revenue), the new YouGov Profiles segmentation and planning product, and YouGov Reports, which provides market intelligence reports and sector trackers in the UK.

 

Data Services revenue mainly comprises YouGov Omnibus (including field and tab services) (92% of the total revenue) with the balance being the provision of sample-only services in the Nordic and Middle East regions.   

 

Data Products

Profitability of the Data Products segment improved in the period, with the adjusted operating profit increasing by 81% to £1.9m and the operating margin improving from 19% to 24%. As previously explained, the prior period margins reflected the investment being made in geographic expansion and in the new Profiles product. As expected this has begun to yield benefits reflected in the six months to 31 January 2016 as revenue has begun to flow from these new markets and products.  

 

YouGov BrandIndex global revenue increased by 45% to £6.8m with all its more mature markets (UK, US, Germany and Nordic) growing at around this level. Asia Pacific saw higher growth although still small in absolute terms. The US remains its largest market, accounting for 62% of global revenue.

 

This revenue growth has been driven by continued geographic expansion into new territories as well as by an increase in the number of clients subscribing to the product in multiple geographies. BrandIndex is now available in 24 markets around the world and has over 350 subscribers. During the period, new BrandIndex versions were launched in Canada, Egypt and India with multiple charter clients supporting the launches.

BrandIndex serves major accounts among both advertising and media planning agencies on the one hand and brand owners and advertisers on the other. Its long-standing clients include OMD, Universal McCann, Bank of America, KFC and Subway. New client wins in the period include Viacom, Amedia, Volkswagen, Standard Life and Telefonica UK.

 

The offer has been strengthened with Profiles which is now available in three markets in a powerful combined offering with BrandIndex. This provides users with an integrated and consistent data set with which to define and understand their potential target customers and also to measure and track the effect of campaigns and other events on how brands are perceived. A number of major media and brand owners have already subscribed to this joint package in UK, US and Germany. 

 

YouGov Profiles which was first launched in the UK in November 2014, and in US and Germany in April and August 2015 respectively, is progressing as planned with its global sales already exceeding £1.5m in the last six months and £2m during the 12 months to 31 January 2016. It now has over 50 subscribers across its first three markets. At the end of 2015, Profiles was launched across the Asia Pacific region in China, Indonesia and Malaysia where its first sales have already been made.

 

Profiles is offered to the market as a subscription service (like BrandIndex) with clients accessing the data through a dedicated portal and a  "point and click" tool which gives users access to a wide range of detailed and connected data and provides analytics methods with which to interrogate and interpret the data. YouGov Profiles offers the largest, most detailed and real-time consumer database updated weekly. Profiles connects data on profiles, brand, sector, and media, digital and social data all in one place combining that with attitudes, interests, views and likes. For example, it provides brand usage and perception data for some 1,000 brands (plus usage for thousands more), TV viewing for 5,000 programmes, website usage for the most active commercial websites, thousands of likes on music artists, films, personalities and much more.

Profiles clients include agencies such as MEC, OMG and the7stars, and brand owners such as Experian, Telefonica UK and Universal Music. New clients in the period include JCDecaux and Auto Trader in the UK and Crossmedia in Germany. In the US, the combined offering of BrandIndex and Profiles is doing particularly well with sales in the period to clients including Viacom, NASCAR, MediaCom and Crossmedia.

 

YouGov Reports provides a suite of market intelligence reports, currently only in the UK, and mainly focused on the financial and legal sector. Its revenue contracted by 29% in the period under review, due in part to a reduction in the range of titles being published. We are in the process of refocussing this business so as to develop a global reports offering that will be centred on YouGov Cube data and make this available to users complemented by informed analysis and commentaries. A global leader has been appointed to oversee the development of our reports offering, starting in March 2016.  

 

Data Services

 

Revenue from YouGov Omnibus, our online fast turnaround service, increased by 28% to £7.4m. This performance reflected continued strengthening of its market leading position in the UK where revenue grew by 13% as well as strong growth in most of the markets where Omnibus has been launched more recently. This included 32% growth in the USA and 27% in Nordic, doubling of revenue in France and quadrupling in Asia Pacific, its newest market. This growth contributed to an increase of 6% in the Data Services operating profit to £2.0m although the operating margin fell from 29% to 25% reflecting investment in new services and markets. 

 

One of the Omnibus strengths which contributes to its growth is the creation of specialised versions to enable clients to access specific, more narrowly defined segments. The UK already offers a range of these including Children and Parents, Shoppers, Metro Cities and Small and Medium Enterprise owners (SME). The latter now enables Omnibus to support business-to-business as well as consumer research work. In the last half-year, specialised Omnibus services were set up in several markets. These include Citybus covering eight major cities in Asia Pacific, Homeowners in the USA, and Car Drivers and Pet Owners in Germany. The growing footprint of the Omnibus network is attracting multi-national clients leading to more multi-country projects being run across our common platform.

 

Major clients in the period include Handelsblatt, Johnson & Johnson, VISA, Tesco, Pizza Hut, Perfetti van Melle and NBCUniversal International Television.

 

Custom Research

 

YouGov's Custom Research business conducts a wide range of quantitative and qualitative research, tailored by our specialist teams to meet clients' specific requirements. The scope, scale and complexity of projects varies significantly and ranges from large-scale national and multinational tracking studies, through to more one-off surveys designed to address a specific commercial, social or political issue for the client. We are also introducing innovations that take advantage of YouGov Cube data as this is developed and rolled out across the Group. These are already being used in the UK to combine data from the Cube with data generated from bespoke surveys. 

 

Globally, Custom Research revenue grew by 6%, on a year-on-year basis, to £25.7m. This reflected mixed performances across the Group. Middle East grew revenue by 30%, UK by 16% and US by 3% and the smaller units grew even more strongly, with Asia Pacific up by 87% and France by 58%. However, revenue in Germany and Nordic fell by 17% and 23% respectively with both markets facing challenging conditions.  

 

Custom Research adjusted operating profit increased by 10% to £2.7m and the operating margin increased from 10% to 11%. This reflects the benefits from measures taken to exploiting further the scalability of our panel-centric methods and to improve the efficiency of our delivery processes. A new shared services operations facility in Bucharest opened in September 2015 and is already providing scripting and data processing support at a lower cost than in more developed markets. The Crunch analytics tool has also been deployed to several UK and US clients to enable them to directly analyse and report data generated from their custom projects. 

 

Major clients in the period include: Asda, Barclays, The Guardian and ITV (UK); Amazon, Google, Microsoft and Sun Products (USA); Thomas Cook, Readers Digest, Santander and Bosch (Germany); Pernot-Ricard, Bic and Havas (France); TDC Group, Orkla Foods, and Danfoss (Nordic); San Miguel, Mobi Group, Ford and DeBeers (Middle East); DHL, Tesco and Starcom (Asia Pacific).

 

 

Review of Geographic Operations

Revenue	Six months to 31 Jan 2016 £m	Six months to 31 Jan 2015 £m	Revenue Growth %
UK	11.6	9.9	17%
USA	15.2	13.3	14%
Germany	3.9	4.3	(10%)
Nordic	3.7	3.8	(3%)
Middle East	6.5	5.0	29%
France	0.7	0.5	64%
Asia Pacific	1.2	0.5	172%
Intra-group Revenues	(1.3)	(1.1)	-
Group	41.5	36.2	15%

 

Adjusted Operating Profit	Six months to 31 Jan 2016 £m	Six months to 31 Jan 2015 £m	Operating Profit Growth %	Operating Margin
				Six months to 31 Jan 2016	Six months to 31 Jan 2015
UK	2.5	1.4	78%	22%	14%
USA	3.3	3.1	6%	21%	23%
Germany	-	0.3	(91%)	1%	6%
Nordic	0.4	0.4	4%	10%	10%
Middle East	1.1	0.6	73%	16%	12%
France	-	-	-	-	1%
Asia Pacific	(0.2)	(0.3)	44%	(15%)	(71%)
Unallocated Costs	(2.8)	(2.2)	33%	-	-
Group	4.3	3.3	29%	10%	9%

 

Our largest unit, USA achieved growth of 14% in reported terms, and 8% in local currency terms. Data Products and Services revenue of which BrandIndex is the major part, grew by 46%, and now makes up 25% of the total, whereas Custom Research grew by only 3% as compared to the prior period which had benefitted from the uplift from the 2014 mid-term elections. The adjusted operating profit increased by 6% but the operating profit margin fell by 2% points to 21%. This was mainly due to the investment in resources to support the launch of Profiles in the USA.

UK also maintained its above market revenue growth in the period with Data Products and Services growing by 18%, including BrandIndex growth of 32% and the first contribution from Profiles. This segment now makes up 53% of the total UK revenue. Custom Research also grew strongly by 16% reflecting gains of significant tracker projects. The adjusted operating profit margin increased by 8% points to 22% due to the revenue growth and a 2% points increase in gross profit margin although the prior period had been depressed by a high level of investments made to support the new products.

Middle East also achieved strong reported growth of 29% (22% in local currency terms) which fed into adjusted operating profit growth of 73% and a 4% points increase in the margin to 16%. This growth was achieved both through significant client gains in the more established UAE and Saudi operations and an increase in project work from the Kurdistan unit. Progress was also achieved in developing the Egyptian operations both to exploit the already strong panel for client work and as a lower cost base for operational staff.

German revenue fell by 10% in sterling terms, although only 3% in local currency terms. While BrandIndex grew by 47%, Custom Research revenue, which still forms the majority of the total, fell by 10% due especially to lower demand from the financial services sector. As a result, the unit was only just profitable. However, the sales achieved of syndicated products (including the newly launched Profiles) support expectations of a stronger overall performance in the second half of the financial year.

Nordic revenue grew by 6% in local currency terms but fell by 3% in reported terms due to the weakening of the Nordic currencies against sterling. Actions taken in the past year to strengthen the region's Data Products and Services segment are bearing fruit and their revenue grew by 22%, with BrandIndex growing by 49% and Omnibus by 27%. This element now makes up 56% of total Nordic revenue. However, Custom Research revenue fell by 23% mainly due to challenging conditions in Sweden. The operating profit margin remained at 10%.

In order to drive the continued expansion of the more profitable core YouGov services in Germany and Nordic, these two units will be led by a single Northern European CEO with effect from March 2016.

The French business continued to develop in line with expectations, achieving revenue growth of 64%, driven especially by Omnibus more than doubling its revenue. The operation remained at breakeven as planned due to the continuing investment in sales and research staff to support further growth which led to a doubling of headcount.

Asia Pacific revenue grew by 172% as a result of growth in its existing operations and rapid geographical expansion with new offices opening in Malaysia, Thailand and Australia. Data Products and Services make up 82% of total revenue. Due to the investments being made to grow this business a loss of £0.2m was incurred in the period compared to £0.3m in the first half last year.

Panel development

We continue to invest in our online panel to increase our research capabilities, both in new geographies and specialist panels. Our focus is on improving the quality and engagement of our panel and our recruitment campaigns have been targeted to ensure a high quality experience for the panellists as well as meeting our business needs. The total number of panellists increased to 4.2 million as at 31 January 2016 compared to 3.3 million as at 31 January 2015 as set out in the table below. The main increases have been in the USA, UK and Asia Pacific.    

Region	Panel size at 31 January 2016	Panel size at 31 January 2015
USA	1,789,100	1,543,100
UK	816,300	653,800
Middle East	558,100	433,500
Germany	218,300	178,300
Nordic	203,600	162,600
France	155,100	127,300
Asia Pacific	491,700	190,400
Total	4,232,200	3,289,000

 

 

Stephan Shakespeare

Chief Executive Officer

 

21 March 2016

The Board of Directors confirm that, to the best of their knowledge, these consolidated interim financial statements have been prepared in accordance with IAS 34 as adopted by the European Union. The interim management report includes a fair review of the information required by DTR 4.2.7R and DTR 4.2.8R, namely:

·      an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements, and a description of the principal risks and uncertainties for the remaining six months of the financial year; and 

·      material related-party transactions in the first six months of the financial year and any material changes in the related party transactions described in the last Annual Report.

The Directors of YouGov plc are listed in the YouGov plc Annual Report for the year ended 31 July 2015.
 

By order of the Board:

 

 

Alan Newman

Chief Financial Officer

21 March 2016

 

 

YOUGOV PLC

CONSOLIDATED INCOME STATEMENT

 

		Unaudited	Unaudited	Audited
		6 months to	6 months to	Year ended
		31 January	31 January	31 July
		2016	2015	2015
	Note	£'000	£'000	£'000
Revenue	4	41,521	36,209	76,110
Cost of sales		(10,021)	(8,685)	(17,472)
Gross profit		31,500	27,524	58,638
Operating expenses*		(27,226)	(24,202)	(50,068)
Operating profit before amortisation of intangible assets and exceptional items	4	4,274	3,322	8,570
Amortisation of intangible assets		(2,513)	(2,223)	(4,633)
Exceptional items	5	(20)	(966)	(1,072)
Operating profit		1,741	133	2,865
Share of post-tax profits in joint ventures		4	-	42
Finance income		221	20	422
Finance costs		(39)	(137)	(643)
Profit before taxation		1,927	16	2,686
Taxation	6	(653)	(332)	580
Profit/(Loss) after taxation		1,274	(316)	3,266
Attributable to:
Equity holders of the parent company		1,252	(264)	3,240
Non-controlling interests		22	(52)	26
		1,274	(316)	3,266
Earnings per share
Basic earnings/(loss) per share attributable to equity holders of the company	7	1.2p	(0.3p)	3.2p
Diluted earnings/(loss) per share attributable to equity holders of the company	7	1.2p	(0.3p)	3.1p

* Operating expenses for the six month period ended 31 January 2016, including amortisation of intangibles and the exceptional items detailed in Note 5 are £29.759m (2015: £27.391m, year ended 31 July 2015: £55.773m)

 

YOUGOV PLC

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

 

	Unaudited	Unaudited	Audited
	6 months to	6 months to	Year ended
	31 January	31 January	31 July
	2016	2015	2015
	£'000	£'000	£'000
Profit/(Loss) for the period	1,274	(316)	3,266
Other comprehensive income/(loss):
Item that may be subsequently reclassified to profit or loss
Currency translation differences	4,088	2,129	(262)
Other comprehensive income/(loss) for the year net of tax	4,088	2,129	(262)
Total comprehensive income for the period	5,362	1,813	3,004
Attributable to:
Equity holders of the parent company	5,338	1,867	2,982
Non-controlling interests	24	(54)	22
Total comprehensive income for the period	5,362	1,813	3,004

Items in the statement above are disclosed net of tax.

 

YOUGOV PLC

consolidated STATEMENT OF FINANCIAL POSITION

 

		Unaudited	Unaudited	Audited
		31 January 2016	31 January 2015	31 July  2015
Assets	Note	£'000	£'000	£'000
Non-current assets
Goodwill	9	38,816	37,463	35,793
Other intangible assets	9	10,449	10,744	10,352
Property, plant and equipment	9	3,091	2,721	2,973
Investments in joint ventures and associates		265	-	204
Deferred tax assets		4,948	3,502	4,404
Total non-current assets		57,569	54,430	53,726
Current assets
Trade and other receivables		26,396	26,415	22,507
Current tax assets		447	960	805
Cash and cash equivalents		10,140	3,843	10,017
Total current assets		36,983	31,218	33,329
Total assets		94,552	85,648	87,055
Liabilities
Current liabilities
Trade and other payables		21,189	18,200	19,042
Provisions		3,883	3,429	3,665
Borrowings		-	169	-
Current tax liabilities		175	456	276
Contingent consideration		-	340	-
Total current liabilities		25,247	22,594	22,983
Net current assets		11,736	8,624	10,346
Non-current liabilities
Trade and other payables		4	22	3
Provisions		935	800	685
Contingent consideration		-	353	36
Deferred tax liabilities		1,767	1,792	1,725
Total non-current liabilities		2,706	2,967	2,449
Total liabilities		27,953	25,561	25,432
Net assets		66,599	60,087	61,623

 

Equity
Issued share capital	10	209	202	206
Share premium		31,051	31,016	31,051
Merger reserve		9,239	9,239	9,239
Foreign exchange reserve		9,550	7,853	5,464
Retained earnings		16,523	11,808	15,635
Total shareholders' funds		66,572	60,118	61,595
Non-controlling interests in equity		27	(31)	28
Total equity		66,599	60,087	61,623

 

The accompanying accounting policies and notes form an integral part of this financial information.

 

 

Alan Newman

Chief Financial Officer

21 March 2016

 

YOUGOV PLC

consolidated statement of changes in equity

 

 

	Attributable to equity holders of the Company
	Share capital £'000	Share premium £'000	Merger reserve  £'000	Foreign exchange reserve £'000	Retained earnings £'000	Total £'000	Non-controlling interest £'000	Total £'000
Balance at 1 August 2014	199	31,014	9,239	5,722	11,755	57,929	23	57,952
Changes in equity for 2015
Exchange differences on translating foreign operations	-	-	-	(258)	-	(258)	(4)	(262)
Net loss recognised directly in equity	-	-	-	(258)	-	(258)	(4)	(262)
Profit for the year	-	-	-	-	3,240	3,240	26	3,266
Total comprehensive gain/(expense) for the year	-	-	-	(258)	3,240	2,982	22	3,004
Issue of shares	3	37	-	-	-	40	-	40
Dividends paid	-	-	-	-	(804)	(804)	(17)	(821)
Consideration for purchase of subsidiary	4	-	-	-	500	504	-	504
Share-based payments	-	-	-	-	669	669	-	669
Tax in relation to share based payments	-	-	-	-	275	275	-	275
Total transactions with owners recognised directly in equity	7	37	-	-	640	684	(17)	667
Balance at 31 July 2015	206	31,051	9,239	5,464	15,635	61,595	28	61,623
Changes in equity for 2016
Exchange differences on translating foreign operations	-	-	-	4,086	-	4,086	2	4,088
Net income recognised directly in equity	-	-	-	4,086	-	4,086	2	4,088
Profit for the year	-	-	-	-	1,252	1,252	22	1,274
Total comprehensive income for the year	-	-	-	4,086	1,252	5,338	24	5,362
Issue of shares	3	-	-	-	(3)	-	-	-
Dividends paid	-	-	-	-	(1,043)	(1,043)	(22)	(1,065)
Share-based payments	-	-	-	-	710	710	-	710
Purchase of non-controlling interest in subsidiary	-	-	-	-	(28)	(28)	(3)	(31)
Total transactions with owners recognised directly   in equity	3	-	-	-	(364)	(361)	(25)	(386)
Balance at 31 January 2016	209	31,051	9,239	9,550	16,523	66,572	27	66,599

 

 

 

 

YOUGOV PLC

consolidated cash flow statement

 

	Unaudited	Unaudited	Audited
	6 months to	6 months to	Year ended
	31 January	31 January	31 July
	2016	2015	2015
	£'000	£'000	£'000
Profit before taxation	1,927	16	2,686
Adjustments for:
Finance income	(221)	(20)	(422)
Finance costs	39	137	643
Share of post-tax profit in joint ventures	(4)	-	(42)
Amortisation *	2,580	2,288	4,765
Depreciation	400	325	703
Loss on disposal of property, plant and equipment	-	27	49
Share based payments	531	789	669
Other non-cash operating profit items	(43)	170	94
Increase in trade and otherreceivables	(1,970)	(3,231)	(360)
Increase/(Decrease) in trade and otherpayables	325	(531)	1,009
Increase in provisions	287	331	518
Cash generated from operations	3,851	301	10,312
Interest paid	(1)	(4)	(14)
Income taxes paid	(650)	(522)	(730)
Net cash generated from operating activities	3,200	(225)	9,568
Cash flow from investing activities
Acquisition of non-controlling interest in subsidiary	(31)	-	-
Acquisition of non-controlling interest in associate	(70)	-	(140)
Settlement of contingent considerations	-	-	(330)
Proceeds from sale of property, plant and equipment	-	1	-
Purchase of property, plant and equipment	(322)	(413)	(1,123)
Purchase of intangible assets	(2,232)	(2,341)	(4,631)
Interest received	4	1	2
Dividends received	14	-	48
Net cash used in investing activities	(2,637)	(2,752)	(6,174)
Cash flows from financing activities
Proceeds from the issue of share capital	-	5	40
Repayment of borrowings	-	-	(28)
Dividends paid to company's shareholders	(1,043)	(804)	(804)
Dividends paid to non-controlling interest	(22)	-	(17)
Net cash used in financing activities	(1,065)	(799)	(809)
Net (decrease)/increase in cash and cash equivalents	(502)	(3,776)	2,585
Cash and cash equivalents at beginning of period	10,017	7,245	7,245
Exchange gain on cash and cash equivalents	625	205	187
Cash and cash equivalents at end of period	10,140	3,674	10,017

 

* Amortisation includes £67,000 (2015: £65,000) recognised in cost of sales.

 

YOUGOV PLC

notes to the consolidated interim financial statements

 

1          GENERAL INFORMATION

 

YouGov plc and subsidiaries' ('the Group') principal activity is the provision of market research.  The market research industry is subject to seasonal fluctuations, with peak demand in the second half of the Group's financial year.

 

YouGov plc is the Group's ultimate parent company. It is incorporated and domiciled in Great Britain. The address of YouGov plc's registered office is 50 Featherstone Street, London, EC1Y 8RT. YouGov plc's shares are listed on the Alternative Investment Market.

 

YouGov plc's consolidated interim financial statements are presented in pounds sterling (£), which is also the functional currency of the parent company.

 

These condensed consolidated interim financial statements have been approved for issue by the Board of Directors on 21 March 2016.

 

This consolidated interim financial information for the six months ended 31 January 2016 does not comprise statutory accounts within the meaning of Section 434 of the Companies Act 2006.
Statutory accounts for the year ended 31 July 2015 were approved by the Board on 12 October 2015 and delivered to the Registrar of Companies. The report of the auditors on those
accounts was unqualified, did not contain an emphasis of matter paragraph and did not contain
any statement under section 498 of the Companies Act 2006.  The consolidated financial statements of the Group for the year ended 31 July 2015 are available from the Company's registered office or website (www.yougov.com).

 

This consolidated interim financial information is unaudited and not reviewed by the auditors.
 

 

2          FORWARD LOOKING STATEMENTS

 

Certain statements in this interim 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.

 

 

3          BASIS OF PREPARATION

 

This consolidated interim report for the six months ended 31 January 2016 has been prepared in accordance with the Disclosure and Transparency Rules of the Financial Services Authority and IAS 34 'Interim financial reporting' as adopted by the European Union. The consolidated interim report should be read in conjunction with the annual financial statements for the year ended 31 July 2015, which has been prepared in accordance with IFRS's as adopted by the European Union.

 

Accounting policies

The accounting policies applied are consistent with those of the Annual Financial Statements for the year ended 31 July 2015, as described in those Annual Financial Statements.

 

Accounting estimates and judgements

The preparation of interim financial information requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amount of income, expense, assets and liabilities. The significant estimates and judgements made by management were consistent with those applied to the consolidated financial statements for the year ended 31 July 2015.

 

Risks and uncertainties

The principal strategic level risks and uncertainties affecting the group remain those set out in the Strategic Report on pages 32 and 33 of the 2015 Annual Report.

 

The Chief Executive's Review in this interim report include comments on the outlook for the remaining six months of the financial year.

 

 

4             SEGMENTAL ANALYSIS

 

The Board of Directors (which is the "chief operating decision maker") primarily reviews information based on product lines, Custom Research, Data Products & Data Services, with supplemental geographical information. 

 

For the six months	Custom Research	Data Products	Data Services	Unallocated	Group
to 31 January 2016 (Unaudited)	£'000	£'000	£'000	£'000	£'000
Revenue	25,734	7,704	8,083	-	41,521
Cost of sales	(6,826)	(1,424)	(1,771)	-	(10,021)
Gross profit	18,908	6,280	6,312	-	31,500
Operating expenses	(16,166)	(4,422)	(4,271)	(2,367)	(27,226)
Operating profit/(loss) before amortisation of intangible assets and exceptional items	2,742	1,858	2,041	(2,367)	4,274
Amortisation of intangible assets					(2,513)
Exceptional items					(20)
Operating profit					1,741
Share of post-tax profits in joint ventures					4
Finance income					221
Finance costs					(39)
Profit before taxation					1,927
Taxation					(653)
Profit after taxation					1,274
Other segment information
Depreciation	247	50	59	44	400
For the six months	Custom Research	Data Products	Data Services	Unallocated	Group
to 31 January 2015 (Unaudited)	£'000	£'000	£'000	£'000	£'000
Revenue	24,260	5,343	6,606	-	36,209
Cost of sales	(6,448)	(1,154)	(1,083)	-	(8,685)
Gross profit	17,812	4,189	5,523	-	27,524
Operating expenses	(15,321)	(3,160)	(3,596)	(2,125)	(24,202)
Operating profit/(loss) before amortisation of intangible assets and exceptional items	2,491	1,029	1,927	(2,125)	3,322
Amortisation of intangible assets					(2,223)
Exceptional items					(966)
Operating profit					133
Finance income					20
Finance costs					(137)
Profit before taxation					16
Taxation					(332)
Loss after taxation					(316)
Other segment information
Depreciation	198	30	46	51	325

 

 

Supplementary information by geography

 

	Six months to 31 January 2016 (Unaudited)		Six months to 31 January 2015 (Unaudited)
	Revenue	Adjusted^ operating profit/(loss)	Revenue	Adjusted^ operating profit/(loss)
	£'000	£'000	£'000	£'000
UK	11,561	2,546	9,855	1,428
USA	15,204	3,261	13,327	3,081
Germany	3,866	25	4,318	275
Nordic	3,679	386	3,783	372
Middle East	6,508	1,051	5,044	606
France	740	1	451	5
Asia Pacific	1,226	(179)	451	(320)
Intra-group revenues / unallocated costs	(1,263)	(2,817)	(1,020)	(2,125)
Group	41,521	4,274	36,209	3,322

 

^Operating profit/(loss) before amortisation of intangible assets and exceptional items.

 

5          EXCEPTIONAL ITEMS

	Unaudited	Unaudited	Audited
	6 months to	6 months to	Year Ended
	31 January	31 January	31 July
	2016	2015	2015
	£'000	£'000	£'000
Restructuring costs	56	242	650
Acquisition related (income)/costs	(31)	724	431
Change in accounting estimation - contingent consideration	(5)	-	(9)
Total exceptional costs	20	966	1,072

 

Restructuring costs in the period relate to the restructuring of the Group's software development team (£33,000) and the continued cost of the reorganisation of the management structure of the German (£16,000) and US (£7,000) businesses that was undertaken in the prior year. Restructuring costs in the prior period are the cost of reorganising the management structure of the US (£180,000) and German (£62,000) businesses.

 

The acquisition related income in the period is in respect of the acquisition of Decision Fuel comprising a £50,000 reduction in contingent deemed staff costs net of £19,000 of transaction costs. Acquisition related costs in the prior period includes £501,000 of contingent consideration in respect of the acquisition in the prior year of Doughty Media 2 Ltd that is deemed under IFRS to be staff compensation cost and £223,000 in relation to the acquisition in the prior year of Decision Fuel, comprising £183,000 of contingent consideration, £28,000 of loyalty bonuses and £12,000 of transaction costs.

 

The change in estimated contingent consideration in the period is in respect of the Decision Fuel acquisition.

 

 

6          TAXATION

 

	Unaudited	Unaudited	Audited
	6 months to	6 months to	Year Ended
	31 January	31 January	31 July
	2016	2015	2015
	£'000	£'000	£'000
Current taxation charge	926	484	670
Deferred taxation credit	(273)	(152)	(1,250)
Total income statement tax charge/(credit)	653	332	(580)

 

 

7          EARNINGS/(LOSS) PER SHARE

 

	Unaudited	Unaudited	Audited
	6 months to	6 months to	Year to
	31 January	31 January	31 July
Number of shares	2016	2015	2015
Weighted average number of shares during the period ('000 shares):
-       Basic	103,614	99,803	100,998
-       Dilutive effect of options	3,028	4,682	4,051
-       Diluted	106,642	104,485	105,049
Basic earnings/(loss) per share (in pence)	1.2p	(0.3p)	3.2p
Adjusted basic earnings per share (in pence)	3.4p	2.6p	7.0p
Diluted earnings/(loss) per share (in pence)	1.2p	(0.3p)	3.1p
Adjusted diluted earnings per share (in pence)	3.3p	2.5p	6.7p
The adjustments have the following effect:
Basic earnings/(loss) per share	1.2p	(0.3p)	3.2p
Amortisation of intangible assets	2.4p	2.2p	4.6p
Share based payments	0.5p	0.3p	0.7p
Exceptional items	-	1.0p	1.1p
Tax effect of the above adjustments	(0.7p)	(0.6p)	(2.6p)
Adjusted basic earnings per share	3.4p	2.6p	7.0p
Diluted earnings/(loss) per share	1.2p	(0.3p)	3.1p
Amortisation of intangible assets	2.3p	2.2p	4.4p
Share based payments	0.5p	0.3p	0.7p
Exceptional items	-	0.9p	1.0p
Tax effect of the above adjustments	(0.7p)	(0.6p)	(2.5p)
Adjusted diluted earnings per share	3.3p	2.5p	6.7p

 

 

 

8          DIVIDEND

 

On 14 December 2015 a final dividend in respect of the year ended 31 July 2015 of £1,043,000 (1.0p per share) (2014: £804,000 (0.8p per share)) was paid to shareholders. No interim dividend is proposed in respect of the period (2015: £nil).

 

9          GOODWILL, INTANGIBLE ASSETS, PROPERTY, PLANT AND EQUIPMENT

		Other	Property,
		intangible	plant and
	Goodwill £'000	assets £'000	equipment £'000
Carrying amount at 31 July 2014	36,329	10,321	2,489
Additions:
Separately acquired	-	1,000	413
Internally developed	-	1,341	-
Amortisation and depreciation	-	(2,288)	(325)
Disposals	-	-	(28)
Net exchange differences	1,134	370	172
Carrying amount at 31 January 2015	37,463	10,744	2,721
Additions:
Separately acquired	-	1,296	710
Internally developed	-	994	-
Amortisation and depreciation	-	(2,477)	(378)
Disposals	-	(12)	(9)
Net exchange differences	(1,670)	(193)	(71)
Carrying amount at 31 July 2015	35,793	10,352	2,973
Additions:
Separately acquired	-	1,085	322
Internally developed	-	1,147	-
Amortisation and depreciation	-	(2,580)	(400)
Disposals	-	-	-
Net exchange differences	3,023	445	196
Carrying amount at 31 January 2016	38,816	10,449	3,091

 

In accordance with the Group's accounting policy, the carrying values of goodwill and other intangible assets are reviewed for impairment at each balance sheet date. A full impairment test is undertaken at each financial year end and a review for indicators of impairment is undertaken at the end of each interim period and an impairment test undertaken if required. The last full annual impairment review was undertaken as at 31 July 2015. The loss incurred in Asia Pacific is considered to be an indicator of impairment, therefore an impairment test in respect of the goodwill and other intangible assets relating to the Asia Pacific business unit was undertaken as at 31 January 2016 based on updated forecasts. After considering reasonable possible changes in key assumptions and performing sensitivity analysis, the review showed that sufficient headroom existed between the carrying value of goodwill and other intangible assets relating to the Asia Pacific business unit and the net present value of future cash flows derived from those assets, and therefore these assets are deemed not to be impaired.

 

Other intangible assets are analysed as follows:

	Consumer panel	Software and software develop-ment	Customer contracts and lists	Patents and trade- marks	Develop-ment costs	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Carrying amount at 31 July 2014	1,839	5,153	2,206	775	348	10,321
Additions:
Separately acquired	527	432	-	-	41	1,000
Internally developed	-	1,341	-	-	-	1,341
Total additions	527	1,773	-	-	41	2,341
Amortisation:
Business combinations	-	(101)	(232)	(160)	-	(493)
Separately acquired	(509)	(326)	-	-	(74)	(909)
Internally developed	-	(886)	-	-	-	(886)
Total Amortisation	(509)	(1,313)	(232)	(160)	(74)	(2,288)
Net exchange differences	62	114	183	(6)	17	370
Carrying amount at 31 January 2015	1,919	5,727	2,157	609	332	10,744
Additions:
Separately acquired	928	330	-	38	-	1,296
Internally developed	-	994	-	-	-	994
Total additions	928	1,324	-	38	-	2,290
Amortisation:
Business combinations	-	(105)	(233)	(157)	-	(495)
Separately acquired	(593)	(357)	-	-	(59)	(1,009)
Internally developed	-	(956)	-	-	(17)	(973)
Total Amortisation	(593)	(1,418)	(233)	(157)	(76)	(2,477)
Disposals	-	(12)	-	-	-	(12)
Net exchange differences	(57)	(32)	(75)	(24)	(5)	(193)
Carrying amount at 31 July 2015	2,197	5,589	1,849	466	251	10,352
Additions:
Separately acquired	871	189	-	3	22	1,085
Internally developed	-	1,147	-	-	-	1,147
Total additions	871	1,336	-	3	22	2,232
Amortisation:
Business combinations	-	(62)	(235)	(89)	-	(386)
Separately acquired	(687)	(359)	-	(1)	(70)	(1,117)
Internally developed	-	(1,074)	-	-	(3)	(1,077)
Total Amortisation	(687)	(1,495)	(235)	(90)	(73)	(2,580)
Net exchange differences	138	118	153	23	13	445
Carrying amount at 31 January 2016	2,519	5,548	1,767	402	213	10,449

 

 

10         SHARE CAPITAL

		Share
	Number of	capital
	shares	£'000
At 31 January 2015	100,902,355	202
Issue of shares	1,948,099	4
At 31 July 2015	102,850,454	206
Issue of shares	1,410,077	3
At 31 January 2016	104,260,531	209

 

The company has only one class of share.  The par value of each share is 0.2p.  All issued shares are fully paid. Shares issued in the year were in respect of the exercise of share options at nil cost per share.

 

 

 

11         BUSINESS COMBINATION AND DISPOSALS

 

a)   Doughty Media 2 Ltd

 

In 2013, YouGov acquired 100% of Doughty Media 2 Ltd, which owned the majority shareholding in CoEditor Ltd, increasing YouGov's interest in CoEditor Ltd to 98.3%. The total purchase price was £1,241,000 of which £1,207,000 was contingent on the achievement on certain performance criteria. This contingent amount was paid in the prior year by the issue of 1,810,226 shares.

 

During the period YouGov acquired the remaining 1.7% shareholding in CoEditor Ltd for a cash consideration of £31,000.  

 

a)   Acquisition of Decision Fuel

 

On 9 January 2014, YouGov plc purchased a 100% shareholding in Decision Fuel an Asia-based research and technology company with offices in Hong Kong, Shanghai and Singapore. The basic purchase consideration payable is the sum of six times the EBITDA of Decision Fuel in the year ending 31 July 2016 and two times EBITDA (capped at 1.5 times 2016 EBITDA) in the year ending 31 July 2017 less any working capital funding provided by YouGov to Decision Fuel prior to the end of the performance period. An initial payment of $1,000,000 (£608,000) was paid upon completion, with the balance payable in two instalments in December 2017 and December 2018.

 

It is now estimated that no further consideration will be payable and as a result the contingent consideration of £5,000 and the £50,000 of deemed staff compensation charge recognised in prior periods were written back as exceptional items net of £19,000 of transaction costs.

  

 

 

12         FAIR VALUES OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES

 

Where market values are not available, fair values of financial assets and financial liabilities have been calculated by discounting expected future cash flows at prevailing interest rates and by applying year end foreign exchange rates.

 

Primary financial instruments held or issued to finance the Group's operations:

 

	31 January 2016 Unaudited			31 January 2015 Unaudited
	Book value	Fair value		Book value		Fair value
	£'000	£'000		£'000		£'000
Trade and other receivables	24,303	24,303		24,564		24,564
Cash and cash equivalents	10,140	10,140		3,843		3,843
Trade and other payables	(12,270)	(12,270)		(11,027)		(11,027)
Bank overdrafts	-	-		(169)		(169)
Contingent consideration
- Non-current	-	-		(353)		(353)
- Current	-	-		(340)		(340)

Fair value estimation

The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined as follows:

·      Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1).

·      Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (Level 2).

·      Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (Level 3).

 

	31 January 2016 Unaudited				31 January 2015 Unaudited
Liabilities	Level 1	Level 2	Level 3	Total	Level 1	Level 2	Level 3	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Contingent consideration	-	-	-	-	-	-	693	693

 

The following table presents the changes in Level 3 instruments.

	Unaudited	Unaudited
	6 months to	6 months to
	31 January	31 January
Contingent consideration	2016	2015
	£'000	£'000
Balance at 1 August	36	467
Recognised in the income statement	(36)	161
Recognised in other comprehensive income	-	65
Balance at 31 January	-	693

 

 

 

13         TRANSACTIONS WITH DIRECTORS AND OTHER RELATED PARTIES

 

During the previous financial year, YouGov plc issued 1,118,797 shares to Stephan Shakespeare, an Executive Director of YouGov plc, in deferred consideration for the purchase in 2013 of his 60% holding in Doughty Media 2 Ltd.

 

During the period, YouGov provided £130,000 of research services to SMG Insight Limited and was charged £48,000 for research services by SMG Insight Limited. As at 31 January 2016, £117,000 was receivable from SMG Insight Limited in respect of these services and £79,000 was payable.

 

On 10 December 2013, YouGov plc entered into a joint development agreement with Crunch.io, a US-based company in which Doug Rivers, an Executive Director of YouGov plc, has an equity interest of 40%. YouGov and Crunch.io have agreed jointly to fund the development of a cloud-based data analytics software application in which both parties have usage rights. During the period Crunch.io recharged costs totalling £nil (2015: £59,000) to YouGov.

 

As at 31 January 2016, Rosamund Shakespeare, the wife of Stephan Shakespeare, held 559,404 ordinary shares in the Company.

 

Other than emoluments, there were no other transactions with Directors during the period.

 

Trading between YouGov plc and group companies is excluded from the related party note as this has been eliminated on consolidation.