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(Sharecast News) - Shares in YouGov fell sharply on Tuesday, after the research group warned that increased investment in its Shopper division would weigh on annual profits.
Posting interim numbers, the AIM-listed research and polling specialist confirmed it had launched a strategic review of the unit, which collects data on household shopping habits.
Shopper revenues fell 2% on an underlying basis in the six months to 31 January, while adjusted operating profits tumbled to £6.8m from £13.9m. Shopper is one of YouGov's three core divisions, alongside research and data products.
YouGov said there would be a "substantial" £6m incremental investment in Shopper to introduce semi-passive and passive data collection and upgrade panels across Europe, as it looked to bolster both growth and competitiveness. It also flagged increased investment in artificial intelligence-enabled products.
However, it acknowledged that group adjusted operating profits were now set to come in between £52m and £56m in the current year as a result, down from £60.7m a year previously.
As at 0945 GMT, shares in YouGov had tumbled 12% at 152.83p.
Chief executive Stephan Shakespeare, who co-founded the business with former Conservative MP Nadhim Zahawi, said: "We delivered a resilient first-half performance, with continued growth in our core US and UK markets and good momentum in our research division.
"While the macroeconomic backdrop remains uncertain, clients continue to prioritise high-quality human data and strategic research projects, areas where YouGov continues to be strongly positioned."
The group posted a 2% uplift in interim revenues, or 1% on an underlying basis, to £194.8m, while adjusted operating profits fell 20% to £24m. YouGov said that if the Shopper investment had been stripped out, profits would have been "broadly flat".
Berenberg, which retained its 'buy' recommendation on the stock, cut its forecast for 2026 earnings before interest and tax following the numbers, by 11% to £52.2m. It also trimmed its earnings outlook for 2027 and 2028, and slashed its price target to 395p from 600p.
"On our new numbers, YouGov trades on a FY26 estimated free cash flow yield of 10.9%, a P/E of 6.4x and an EV/EBITDA of 4.5x, as investors ponder the impact of AI," it continued. "However, YouGov's panel and data quality are strategic assets, highlighted through the signing of Anthropic as a customer."
Shakespeare returned as interim chief executive of YouGov last month, replacing Steve Hatch, amid sustained pressure from activist investor Gatemore Capital Management. The search for a permanent replacement had begun, YouGov confirmed.
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