YouGov — Bringing on the next generation

YouGov (AIM: YOU)

Last close As at 27/03/2024

902.00

−34.00 (−3.63%)

Market capitalisation

990m

More on this equity

Research: TMT

YouGov — Bringing on the next generation

YouGov’s capital markets event cast the spotlight on the next generation of its client offering, focusing on YouGov Direct, YouGov Chat and YouGov Safe. All of these are already being rolled out commercially. They clearly show the direction of travel to enable the group to scale more effectively and efficiently. All are predicated on the YouGov member being the data owner and granting explicit permission for how that data is used. No new financial information was disclosed, and our forecasts are unchanged.

Fiona Orford-Williams

Written by

Fiona Orford-Williams

Director, TMT

TMT

YouGov

Bringing on the next generation

Capital markets day

Media

27 November 2020

Price

938p

Market cap

£1,018m

$1.30:£1

Net cash (£m) at end July 2020

35.3

Shares in issue

108.5m

Free float

91.3%

Code

YOU

Primary exchange

AIM

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

(10.9)

0.9

58.3

Rel (local)

(18.8)

(5.1)

80.5

52-week high/low

1,043p

400p

Business description

YouGov is an international research data and analytics group. Its data-led offering supports and improves a wide spectrum of marketing activities of a customer base including media owners, brands and media agencies. It works with some of the world’s most recognised brands.

Next events

H1 trading update

29 January 2021

H121 Results

23 March 2021

FY trading update

30 July 2021

FY21 Results

5 October 2021

Analyst

Fiona Orford-Williams

+44 (0)20 3077 5739

YouGov is a research client of Edison Investment Research Limited

YouGov’s capital markets event cast the spotlight on the next generation of its client offering, focusing on YouGov Direct, YouGov Chat and YouGov Safe. All of these are already being rolled out commercially. They clearly show the direction of travel to enable the group to scale more effectively and efficiently. All are predicated on the YouGov member being the data owner and granting explicit permission for how that data is used. No new financial information was disclosed, and our forecasts are unchanged.

Year end

Revenue
(£m)

PBT*
(£m)

EPS*
(p)

DPS
(p)

EV/EBITDA
(x)

P/E
(x)

Yield
(%)

12/18

136.5

20.4

13.8

4.0

28.8

67.9

0.4

12/19

152.4

24.7

15.7

5.0

24.4

59.8

0.5

12/20e

163.0

28.5

17.4

5.5

23.6

54.1

0.6

12/21e

175.0

34.2

21.2

6.5

20.3

44.2

0.7

Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.

Ethical activation ambition

The introduction of General Data Protection Regulation and equivalent regulation in other jurisdictions has given YouGov an opportunity to differentiate further from its peers through rebalancing the value relationship between the data provider and the data user. Historically, market research has treated the data provider (panel) as a commodity to be bought. YouGov had from inception adopted a different approach, in regarding its panellists as a resource of intrinsic value, wishing to retain them and keep them engaged. This has not just been through payment, but by returning utility and a degree of entertainment. Direct takes this a step further, by handing to members control of who uses their data, how and for what purpose. It is an end-to-end self-service platform, facilitated using a blockchain to keep track of interactions. A walk-through demonstration showed its intuitive interfaces, and it was clear that this could be a valuable tool in the armoury, enabling fast turnround for insights and ad and concept testing. YouGov Chat extends the potential member base and YouGov Safe extends the type and volume of data available for use.

Real value is in the integration

Although YouGov Direct, YouGov Chat and YouGov Safe members (described below) are set apart from the main YouGov panel, there would clearly be a longer-term advantage to integration, albeit that the data has varying permissions attached. Different offerings should attract different demographics, which in turn make the data interrogation of greater potential value. The cost per acquisition through Chat is very attractive for YouGov, at 20p – 75p per member.

Valuation: Premium price for strong positioning

The share price recovered the initial losses as the COVID-19 situation developed, and the stock remains one of only two of the global peers to have shown a positive performance over the year. YouGov’s valuation multiples are at the top end of this peer set, reflecting the group’s strong market positioning, attractive cash generation (104% conversion of adjusted EBITDA in FY20) and cash-positive balance sheet.

YouGov Direct

During FY20, this offering has been launched in the UK, the US and Canada, with Singapore and Australia following on in FY21. Trials have been carried out with around 100 clients and with over 40k members supplying data to date. The principle is that the client can set up quick surveys, composing their own questions or showing their own media or product concepts, then chose the target market to interrogate. Depending on the type of survey, the turnround time could be as little as one hour, with no need for any intermediation from editors or data analysts.

While there are other products available, such as Surveymonkey or Google Surveys, which may be cheaper, the advantages of YouGov Direct include the ability to incorporate a call to action (an example might be a button linking to the client website) and the possibility of recontacting respondents. Response fraud, a recognised industry issue, is effectively negated by the requirement for members to have registered their banking details in order to receive payment. Projects carried out to date have been as small as $100-200, up to the largest which entailed a commitment of over $50k. Pricing is determined from a combination of:

Number of questions asked

Number of targeting variables (so how restricted the target sample is)

Type of content, such as video

Number of contacts targeted

Clients are restricted to internal usage of the data obtained, which should avoid misleading marketing statements purporting to come from survey data.

YouGov Direct members may be recruited from existing panel or from visitors to the group’s websites and apps. From their perspective, their user interface will allow them to see which organisations are approaching them and for what purpose, so that it is an active decision to participate, so side-stepping privacy issues. The interaction is logged in a blockchain, which records the type of data transferred rather than the data itself. There is therefore a high degree of transparency on both sides. Within the development period, 76% of members who were active a year ago round the launch period still are involved and 88% of those retargeted will respond within 24 hours, demonstrating a high degree of continuing engagement.

Exhibit 1: YouGov Direct app

Exhibit 2: YouGov Chat app

Source: Company

Source: Company

Exhibit 1: YouGov Direct app

Source: Company

Exhibit 2: YouGov Chat app

Source: Company

Cannibalistic?

There is an obvious question as to whether this offering is cannibalistic to the existing YouGov offering. We conclude that this likely to be true only at the margin. More likely that it extends the potential client market and provides a lower cost entry point, from which the more sophisticated products and services can be sold.

Next stages

The obvious extension of this service is for ad testing. Although this is a very small part of overall advertising budgets, it provides the potential for clients to avoid expensive mistakes and to improve the ROI on campaigns that go ahead. This capability on the YouGov Direct platform is under development.

While Direct as a standalone proposition has value, the step change in the intrinsic value would be integration with other elements, particularly the YouGov Profiles offering, which ties characteristics and preferences with brands. Direct will continue to attract different individuals as contributors who may not be interested in participating in the more traditional panel activities. Brand owners and other clients would be best served by having access to both.

YouGov Chat

YouGov Chat aims to attract a much wider demographic that will then agree to share their opinions and data. It is effectively a private chat service, built around a range of ‘passion points’ used to engage an audience, which might be based on sports allegiances, politics, music, fashion, health etc. There are currently around ten of these channels operational, with over 300k members and 2.2m active conversations.

The chat itself is curated by professional content editors, with chatbots continuing the engagement and able to drive the content agenda from submitted comments. With no peer-to-peer interaction, this concept allows people to express opinions without trolling or abuse prevalent on platforms such as Twitter. However, with aggregated content, it allows a user to see how they are positioned vis-à-vis others in the themed chat, allowing for some sense of community.

Unlike other data harvesting within the group this is unpaid to the participant. They are primarily being recruited on social channels, when interacting with YouGov content on particular topics. As, with YouGov’s main panellists, the sense that that individual’s opinion is of value to the debate is a key driver to participate. Financial incentives to participate are rarely paramount.

This approach has been particularly successful to date in attracting a younger demographic.

Where is the value?

Unlike YouGov Direct, Chat is not currently a direct revenue earner. Its true value is as a recruitment tool into YouGov Direct, with which it was integrated in September. CPA (cost per user acquisition) has been between 20p and 75p, depending on the topic and the user type that is being targeted. For comparative purposes, at a group level, spend on panel recruitment in FY20 was £8.9m and an aggregate increase for the year was 3.09m panellists, giving a rough net CPA of £2.88. Panel retention in FY20 was 69%, which is good in industry terms, with panellists kept engaged, at least in part, through seeing press coverage of surveys in which they have participated.

Where next?

The current position is that there is an internal team running large, core chat channels. Possible future developments include allowing third parties to use the platform to run their own chat to better engage with their own audiences and facilitating a wider network of bloggers on niche topics. Obviously, there will need to be infrastructure to police the content and avoid potential reputational issues.

The ultimate audience is being thought of in terms of tens of millions of users.

YouGov Safe

This is a more recently launched concept. Again, it harks back to the notion of individuals as the owners of their own data, who should be able to determine how it is used and derive value from that. For this element, the relevant data is the large data sets held by organisations on the individual, be that streaming platforms, retailers, financial institutions, health providers etc.

In an increasing number of jurisdictions, individuals can request the data that those organisations hold on them. YouGov Safe should allow those individuals to monetise their data through uploading onto the Safe platform, through a browser extension or, in due course, by web and mobile apps. The user the grants the relevant permissions for aggregated information to be able to be accessed by third parties. Only closed data sets would be aggregated, on an encrypted and anonymized basis. Members can obtain insights about themselves and their online behaviour, including how it might change over time, possibly over time interwoven with recommendations based on history.

The clients will pay for aggregated data. There would be a possibility of individuals being targeted to see if they wished to participate in ad-testing or surveys within Direct, based on the information that has been provided within Safe.

Exhibit 3: YouGov Safe

Source: Company

Why?

YouGov Safe is a mechanism for ingesting large quantities of anonymous third-party data which will enhance the YouGov Direct model’s utility to its clients. Again, the significant commercial uplift would be in the integration, particularly the marriage of this data with the information held within YouGov Profiles, the group’s media planning and segmentation tool.

Exhibit 4: Financial summary

£'000s

2018

2019

2020

2021e

2022e

Year end 31 July

IFRS

IFRS

IFRS

IFRS

IFRS

PROFIT & LOSS

Revenue

 

 

116,559

136,487

152,441

163,000

175,000

Cost of Sales

(21,495)

(24,206)

(23,375)

(24,604)

(26,103)

Gross Profit

95,064

112,281

129,067

138,396

148,897

EBITDA

 

 

20,907

31,698

39,215

41,322

47,697

Operating Profit (before amort. and except.)

 

 

12,650

18,492

21,830

25,740

31,415

Intangible Amortisation

(7,026)

(8,809)

(12,885)

(10,782)

(10,782)

Share based payments

(3,571)

(2,401)

(2,900)

(2,900)

(2,900)

Exceptionals

(892)

1,529

(6,630)

0

0

Other

66

200

0

0

0

Operating Profit

11,824

20,221

15,200

25,740

31,415

Net Interest

(51)

(665)

7

(175)

(150)

Profit Before Tax (norm)

 

 

16,302

20,428

24,737

28,465

34,165

Profit Before Tax (IFRS16)

 

 

11,773

19,356

15,207

25,565

31,265

Tax

(3,615)

(5,086)

(5,812)

(9,771)

(11,949)

Profit After Tax (norm)

12,687

15,342

18,925

18,694

22,216

Profit After Tax (IFRS16)

8,158

14,270

9,395

15,794

19,316

Average Number of Shares Outstanding (m)

105.4

105.4

106.7

108.4

108.4

EPS - normalised (p)

 

 

10.8

13.8

15.7

17.4

21.2

EPS - IFRS 16 (p)

 

 

7.7

14.1

9.0

14.6

17.8

Dividend per share (p)

3.0

4.0

5.0

5.5

6.5

Gross Margin (%)

81.6

82.3

84.7

84.9

85.1

EBITDA Margin (%)

17.9

23.2

25.7

25.4

27.3

Operating Margin (before GW and except) (%)

10.9

13.5

14.3

15.8

18.0

BALANCE SHEET

Fixed Assets

 

 

78,019

108,534

108,122

106,068

105,286

Intangible Assets

65,357

82,374

84,611

83,829

83,047

Tangible Assets

12,471

26,160

23,511

22,239

22,239

Investments

191

0

0

0

0

Current Assets

 

 

66,735

72,581

70,255

77,891

89,536

Stocks

0

0

0

0

0

Debtors

34,672

33,726

34,239

36,611

39,306

Cash

30,621

37,925

35,309

40,574

49,524

Current Liabilities

 

 

(41,445)

(51,395)

(52,813)

(55,070)

(55,080)

Creditors

(41,445)

(51,395)

(52,813)

(55,070)

(55,080)

Short term borrowings

0

0

0

0

0

Long Term Liabilities

 

 

(11,238)

(22,277)

(16,226)

(13,206)

(13,206)

Long term borrowings

0

0

0

0

0

Other long term liabilities

(11,238)

(22,277)

(16,226)

(13,206)

(13,206)

Net Assets

 

 

92,071

107,443

109,338

115,683

126,537

CASH FLOW

Operating Cash Flow

 

 

23,617

38,115

38,411

41,615

48,031

Net Interest

22

183

(7)

175

150

Tax

(5,501)

(4,520)

(3,184)

(7,328)

(11,949)

Capex

(8,181)

(12,166)

(18,559)

(18,000)

(16,000)

Acquisitions/disposals

(885)

(6,583)

(7,451)

(3,428)

(3,020)

Financing

259

(3,652)

(4,739)

(2,000)

(2,000)

Dividends

(2,106)

(3,327)

(4,298)

(5,420)

(5,962)

Net Cash Flow

7,225

8,050

173

5,615

9,250

Opening net debt/(cash)

 

 

(23,219)

(30,621)

(37,925)

(35,309)

(40,574)

HP finance leases initiated

0

0

0

0

0

Other

177

(747)

(2,789)

(350)

(300)

Closing net debt/(cash)

 

 

(30,621)

(37,925)

(35,309)

(40,574)

(49,524)

Source: Company accounts, Edison Investment Research


General disclaimer and copyright

This report has been commissioned by YouGov and prepared and issued by Edison, in consideration of a fee payable by YouGov. Edison Investment Research standard fees are £49,500 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2020 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

General disclaimer and copyright

This report has been commissioned by YouGov and prepared and issued by Edison, in consideration of a fee payable by YouGov. Edison Investment Research standard fees are £49,500 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2020 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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Murray Income Trust — Quality focus continues to deliver rising income

Murray Income Trust’s (MUT) recent combination with Perpetual Income and Growth Investment Trust (PLI) has doubled the trust’s assets under management to £1.1bn and is expected to deliver a substantial fee reduction to investors. MUT invests in a diversified portfolio of mainly UK equities and aims to provide a high and growing income, combined with capital growth. It has achieved these objectives, having just delivered its 47th consecutive year of increasing annual dividends, while also outperforming its benchmark (a broad UK stock market index) and most of its peers over both the short and longer term. Manager Charles Luke’s success – even in the current climate, which has been characterised by widespread dividend cuts – confirms his conviction that ‘quality, sustainable and growing income is out there, if you know where to look’. He intends to maintain his research-intensive search for resilient companies capable of growing future earnings and dividends over time.

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