YouGov

Online market researcher YouGov continues to grow rapidly, with three acquisitions in the last half-year spreading its global reach even faster.

By adding operations in the US, Germany and Denmark, the group tripled turnover to £6.1m for the six months to January, with the UK and the Middle East showing 43% organic growth. 'Normalised' pre-tax profits grew 117% to £5.2m, with a £27m fundraising swelling year-end cash levels to £14m.

To maintain organic growth, the UK business has been ‘refocused’, with ‘research brains’ hired to head each of YouGov's five market verticals. Joint chief executive Nadhim Zahawi says this will lead to involvement in more ‘strategic’ campaigns, rather than lower-margin and ad-hoc ‘tactical’ ones, making up for the lower margins arising from acquisitions.

As well as cost advantages, online market research offers other improvements over its traditional peers, with innovation a strong YouGov focus. ‘It remains the driving force,’ says joint chief executive Stephan Shakespeare, pointing to a forthcoming hedge fund joint venture in conjunction with investment bank and house broker Numis.

Other, older innovations are being rolled out in new territories such as the US and Germany. Allied to an online market research subsection that is expected to grow at a breakneck 21% in 2008 compared with wider industry growth of 4% in 2007, Numis sees the full-year bringing 33% earnings growth to 8p a share, ahead of 26% to 10.1p in 2009.

Profit taking has cut the shares down from their all-time peak of 205p a year ago to the present 151p, still well above our 90p tip in 2006. At these rates of growth they remain a firm hold despite a full-bodied p/e rating.

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