YouGov PLC (LON:YOU) maintained its full-year expectations after delivering strong profit and revenue growth in the first half, boosted by acquisitions.
The market research and data analytics firm said adjusted pre-tax profit rose by 28% to £13.7bn on revenue up 18% to £66.5mln in the six months to January 31.
READ: YouGov hikes dividend after year of strong growth
The acquisitions of Australian market research business Galaxy Research, sports research firm SMG Insight, software provider InConversation Media, survey data analytics app Crunch.io and film and TV analytics company Portent.io, added £5mln of revenue for the period, accounting for 49% of the overall growth rate.
On an underlying basis, revenue increased by 10%.
The group’s data products and services unit delivered a 34% jump in revenue to £37.2mln and underlying revenue growth of 17%, driven by the Omnibus real-time research unit.
The business now represents 54% of total revenues, compared to 49% last year.
The custom research division saw revenue edge up 4% on a reported basis and 3% on an underlying basis to £30.4mln.
Five-year growth plan almost complete
YouGov is in the last year of its five-year transformation plan, which included improving margins in custom research by focuses on more profitable areas and aligning the business more closely with its data and technology.
In the first half, the operating margin in custom research edged up 2 percentage points to 26%. However, the data services operating margin fell 1 point to 25% due to the lower margin Omnibus business that was transferred from custom research.
The overall adjusted operating profit margin rose to 3 percentage points to 13.7 %, while adjusted earnings per share increased 33% to 9.6p.
"In the final year of our current five-year growth plan we are continuing to deliver revenue and earnings growth ahead of the market,” said chief executive Stephan Shakespeare.
New financial targets
Alongside the results, the company set out new targets for now until 2023, including double revenue, double adjusted operating profit margin and adjusted earnings per share compound annual growth rate exceeding 30%.
“Our aim is to deliver the best tools and the best data for our clients. Our new plan focuses on three strategic pillars to deliver on that goal: activating our data to create targetable audiences, investing in technology to ensure our data is integrated and customisable, and opening up some of our data as a public resource,” said Shakespeare.
The group said trading in the second half has continued “positively” and it remains confident of its expectations for the full year.
YouGov added that its international spread of revenues cushions it from the volatility caused by Brexit uncertainty.
Peel Hunt repeats 'buy' rating
Peel Hunt kept its 'buy' stance and target price of 535p, citing "robust" interim results and the new financial targets.
"YouGov continues to deliver on growth," the broker said.
"The new financial targets are expected to be met mostly via organic growth. However, some bolt-on acquisitions are expected to add to either technology expertise or to aid geographical expansion.
"We expect upgrades to come, especially from YouGov Direct, which will be launched at the end of the financial year."
YouGov Direct is a new digital advertising platform, which will use blockchain technology to verify the data exchange between consumers and advertisers.
Shares in YouGov fell 1.5% to 470p in morning trading.