Investment summary

YouGov continues to trade in line with expectations, with the prelims showing particularly strong progress in the key US market. The end of a large Middle-Eastern contract, long flagged, will restrict current-year profit growth, but we expect earnings to accelerate in FY13 as sales from the syndicated products make a greater impact. Cash conversion remains high, allowing for investment in geographic expansion and upgrading the products. Industry visibility is structurally limited and the group is normally H2 weighted. The rating is at the bottom end of the sector, but management’s record for delivering on expectations is improving.

Last updated on 09/12/2011

Industry outlook

Forecasts for global ad spend have again been revised down, to 3.5% (3.6%) for 2011 and 4.7% (5.3%) for 2012. The MR sector tends to underperform the upswing and outperform the down and industry bodies are anticipating global growth of 3% in 2011. Q311 updates from major players reported a wide range of sales growth and consolidation at the commodity end of the market is likely to continue. The new CEO at GfK starts 1 December.

Last updated on 09/12/2011