Shares in the online market research company YouGov have halved since the company warned that half-year profits would be “significantly lower than market expectations”.
However, the chief executive has defended his decision to maintain investment in the group despite the profit warning.
Last Thursday, the company released a trading statement admitting that profits for the six months to the end of January would be “below market expectations” and that new business in the UK was much weaker than anticipated.
As a result, YouGov’s share price was down by 71p at the end of Wednesday to as low as 34p on Thursday, according to reports.
The nine-year old company’s share price has only increased to around 36.5p now, leaving the company with a market value of an estimated £36 million – its lowest for some time.
A number of analysts have questioned management controls after “substantial investment” in staffing ran ahead of sales.
A recent fall in demand from institutional investment managers left revenue growth at 4% in constant currencies for the six months to the end of January – exchange rates boosted overall sales growth to 20%.
Nadhim Zahawi, chief executive of YouGov, said: “Online market research will continue to grow as a proportion of research spend and we believe that YouGov is uniquely positioned to meet the demand for accurate, high-quality real-time research.
“We see the recession as further disrupting this industry, which gives us an opportunity to build the leading market research company of tomorrow. We are committed to that vision.”
Last week, the company also launched a Recession Tracker website in the UK and announced that all of its international operations would come together under the YouGov brand.
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