Market Prognosis

A concise summary of the major macro events of the past 24 hours, and selected UK company-specific news.

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October 10, 2023

YouGov, lost ground to makeup

Macro & Overnight

US bonds bounced yesterday as Fed officials hinted that rate hikes would be put on hold until the end of the year.

Two-year Treasuries fell below 5%, and the dollar steadied.

In China, Country Garden sent up another distress flare, saying it is struggling to meet its overseas interest payment obligations.

UK Company News

YouGov reported underlying revenue growth of 9% and an operating profit margin up 230 basis points (bps) to 18.7%. Its cash conversion was 93%, with net b/s cash of £107.2m. The US remains the Group’s key strategic focus, having announced plans to acquire the Consumer Panel Business of GfK SE (GfK CPB). Management has evolved with a new CEO appointed and the previous founding CEO moving to non-exec Chair. It is seeing sales momentum from the technology sector starting to return and, with operational leverage, will benefit from the technological and headcount investments, leading to ongoing margin expansion as revenue growth. It remains confident in the Group’s prospects for FY24 and in meeting current market expectations.

YouGov shares have been derated from c £12 per share to £6.50 over the last four months, falling from £16 in 2021. With rising yields impacting growth valuations, a significant acquisition and a new CEO, this is, perhaps, understandable. However, based on today’s results, YouGov has some ground to catch up on, especially if rates have peaked and the trends in US tech spending continue to recover. 



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