YouGov suffers from IT spending

"Unexpected extra costs" including IT have compromised YouGov's profit

Investment in IT has prompted a fall in pre-tax profit at polling firm YouGov and has triggered the implementation of a cost saving plan.

The company, which has acquired businesses in the US, Germany and Scandinavia, posted a turnover increase in the year to 31 July of £40.4m from £14.3m, but pre-tax profit plunged to £4m from £5.6m.

The acquisitions meant that the firm needed to provide extra financing for IT integration, as well as a global platform using new survey software developed by its US business and supported by the group’s datacentres in the US and Germany.

YouGov’s increase in operational spending also included IT supporting new products and hiring extra staff.

“The acquisitions have added new geographies, extended our client base, introduced new products and grown our panel,” said YouGov’s chief executive Nadhim Zahawi.

“We have also invested across the business to strengthen our research teams and develop our infrastructure to provide an enlarged platform for future growth,” he said.

“This investment resulted in unexpected extra costs and margin pressure; in response to this we have put in place new financial controls across the group.”

The research group said that despite the global recession, it expects online market research to carry on increasing its proportion of research spend and that it will remain competitive by developing new products to its client base.