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YouGov’s share price has rallied since October last year. While shares are still 20 per cent below their pandemic highs, the market has reacted well to the survey specialist’s reassuring updates and sustained revenue growth.
Investors are now taking stock. Rosamund Shakespeare, wife of YouGov’s co-founder and non-executive chair Stephan Shakespeare, has sold £4.1mn of stock in order to fund “personal property transactions”. Shakespeare and people closely associated with him now own 1.77mn ordinary shares in YouGov, representing 1.5 per cent of issued share capital.
While the Shakespeare family is selling down, there are signs that business is picking up. In a half-year trading update published this month, YouGov said growth had “significantly accelerated” after a slow first quarter, driven by resilient demand for custom research and data products. This has offset a decline in more discretionary spending. Contrary to investor concerns, YouGov has also continued to enjoy momentum in its sales to the technology sector.
From a profitability perspective, the group is starting to benefit from operational gearing. It has invested heavily in technology, people and panellists in recent years, its work has become very repeatable, and it is able to sell its data sets at higher margins.
The company is now on the brink of major change. Last month, it completed the “transformational” acquisition of the consumer panel business of GfK, a German market research company. So far so good: management said the acquired business has been trading ahead of expectations since the takeover announcement in July 2023. However, it is a sizable business to digest, and visibility is limited.
A US listing could also be on the cards. Management told analysts in October that the US “continues to be the profit-driver for the group” and it is assessing its listing strategy “all the time”.
Arbuthnot chair increases interest
Arbuthnot Banking Group tends to stay under the radar, rather like the service it offers to its well-heeled clients.
The bank has been a major beneficiary of a more hawkish interest rate policy; a rapid increase in customer deposits and a widening of banking margins have helped push the shares close to a 12-month high. Base rates are widely tipped to fall back from their heights this year, but management has nonetheless made a show of confidence.
Arbuthnot chairman and chief executive Sir Henry Angest, one of several storied figures on Arbuthnot’s board, last week purchased a chunky 100,000 shares at 990p a share. Combining the roles of chairman and chief executives goes against standard corporate governance practices. But given that the share purchase adds to Angest’s 57 per cent shareholding in the company, he may feel that he has enough skin in the game to remain adequately accountable to himself.
Arbuthnot is exactly the kind of boutique and niche financial services company that has enjoyed life at the expense of larger peers in recent times, as the banking sector has seen a reversal of the usual benefits of scale and vertical integration. Savers shopping around for better deals saw Arbuthnot’s deposits rise 16 per cent year on year in the first half of 2023.
By contrast, any attempt by the big high street banks to significantly expand their balance sheet is viewed more through the prism of the increased regulatory burden this brings. Barclays’ small potatoes takeover of Tesco Bank is about the best that can be mustered.
That means that smaller companies such as Arbuthnot with a loyal client base, and presumably a decent Chablis on hand at board meetings, have maintained their market momentum.
