YouGov shares take a hit as profits drop, despite revenue growth from acquisitions

Shares in Yougov plunged by six per cent this morning following the announcement that its pre-tax profit had dropped by 21 per cent over the past six months.

Despite a 34 per cent increase in revenue over the same period, the company's underlying growth was a mere two per cent, according to its interim results, as reported by City AM.

This discrepancy is attributed to several acquisitions, including the purchase of CPS, a German research firm specialising in consumer behaviour data, for €315m (£263m) last year.

While the adjusted operating profit rose seven per cent to £30.1m, it fell 13 per cent on an underlying basis.

The share price has declined 32 per cent since the beginning of the year, prompting the unexpected resignation of the former CEO last month due to activist pressure for a turnaround.

Consequently, the group has initiated a £20m cost-saving programme, aiming to reduce staff numbers and third-party expenditure.

Over the past six months, underlying revenue in the UK fell one per cent, with growth primarily coming from the Americas and Asia Pacific regions, the latter seeing a seven per cent rise in underlying revenue.

"The UK was affected by subdued government spend, but the tech and academic sectors performed well in the Americas, offsetting continued weakness in e-sports and gaming," observed analysts at Peel Hunt.

Despite market expectations, the group's adjusted operating margin shrank from 20 per cent to 16 per cent, yet it still marked an improvement from the 11 per cent reported in the second half of 2024.

"While we have faced execution challenges, I am confident that our strategic growth plan is the right one to deliver on our ambition to become the universal infrastructure for data sharing," stated Yougov CEO Stephan Shakespeare.