AGM Questions 2024

Question 1. How informed are the younger generations (especially Gen Z) about personal finance, capital markets and investing?

At YouGov, we have access to research data on this subject from YouGov Profiles, our flagship audience intelligence tool. We can see that Gen Z, in both the UK and US, are significantly more likely to say that financial matters confuse them compared to the general population in both markets and this may explain why more than a third say that they don’t make financial decisions without talking to a professional (33% in the UK and 40% in the US). It appears from our Profiles data that Gen Z may be lacking confidence when it comes to managing their finances and are looking for professional help and support as a result. This is likely an under-served need amongst this younger generation when many financial institutions appear to be more focused on older customers with higher levels of wealth and investable assets. Despite their age, Gen Z are focused on the future with the majority planning to save more money in the next 12 months (79% in the UK and 80% in the US).

Question 2. Especially within our difficult economic circumstances, what impact do you think, if any, could individual investors deliver to companies' overall performance?

YouGov research shows that, as well as a desire to achieve greater financial stability, Gen Z are also open-minded when it comes to financial risk, with 39% in the UK and 44% in the US saying that they do not mind taking risk with their money, significantly higher than the general population. This reflects in 1 in 3 (33% in the UK and 35% in the US) saying that they like taking risks in the stock market. Combined with an open mind to investing, around a third of Gen Z (30% in the UK and 33% in the US) have more than 10,000 pounds / US dollars in investable assets so may already have the means as well as the will to start investing if they receive the right support and guidance.

Question 3. In your opinion, what matters most to the younger generation of individual investors?

Based on our research expertise, we believe providing younger investors with direct investment platforms that enable them to do this with helpful information and guidance (not necessarily advice) may be valuable to those who are just starting out on their investment journey.

Question 4. What more, if anything, can companies like the one(s) you represent, do to educate, empower, or engage individuals on basic personal finance and investing?

As above, YouGov research with clients indicates that younger people are looking for immediate access to financial information and tools so that they can engage with their finances directly and make fast and informed decisions about what they are doing, whether that is connected to general financial management or investing. Younger generations appear to already be embracing the opportunity that investing represents to them earlier on in their lives. At YouGov, we work to communicate to our workforce about what is means to work for a listed company through training and communications, and we offer employee education in financial wellbeing and literacy via our internal resources.

Question 5. Of the YoY revenue increase, virtually all of it was attributable to the CPS acquisition. Correspondingly, operating profit was flat YoY, while CPS contributed £15m. That suggests the core business had flat revenue growth and negative operating income growth. What are the main issues in the core business, which are ones that can be addressed in the short term, and is the CPS acquisition proving to be a distraction for management?

As discussed at our August trading update presentation, we made some decisions at the start of FY24 to invest in staff costs and revenue ahead of the curve. Additionally, our external panel spend was higher than planned due to client demand for niche samples. While we had good sales momentum in Q2, this slowed as the year progressed. With the revenue growth not materialising as planned, we ended up with a cost base that was too high. We acted swiftly to right-size our cost base towards the end of the year and are confident in achieving our stated cost savings. The CPS acquisition is progressing well and the division is trading in line with expectations.

Question 6. The Data Products has seen a £2m decline in revenue YoY and a nearly £10m decline in operating profit. In a business that affords good visibility into revenue, how could the bottom line miss be so large compared to the top line miss?

Our Data Products division has a high level of operational leverage due to the syndicated, subscription nature of the business. The slight decline in revenue coupled with higher operating costs and maintenance investments in the products, to improve the user interface and functionality, resulted in a contraction in the adjusted operating margin.

Question 7. The profit warning of June 20 2024 came just 5 weeks before the end of the fiscal year and resulted in a dramatic decline in the share price. Why did the Board wait so long before announcing there was trouble?

FY24 was backend weighted from the outset and as we saw an increase in sales from Q1 to Q2, it provided confidence that we would remain in line with market expectations. However, once we completed our Q3 reforecast in June, it was clear that we had slower than expected sales momentum in Q3. Due to our cost base being fairly stable at the end of the financial year, a higher proportion of revenue missed dropped into our operating profit.