Future (FUTR) saw 11 per cent organic revenue growth in the six months to 31 March, benefiting from momentum in digital advertising and e-commerce commissions in its larger media business. Adjusted operating profit surged by more than three-quarters to £40m. With acquisitions increasing the group’s scale, improved operating leverage enabled a seven percentage point margin expansion to 28 per cent.
Amid a structurally declining market, organic sales in the magazine division dipped 12 per cent, with a 3 per cent hit in March due to Covid-19. Closure of travel stores spurred a “significant slowdown” in newstrade towards the end of the period. The media business was also impacted by the cancellation of three large events. But softer advertising yields were offset by audience growth – as global lockdowns saw more people turn to digital publications, online users hit a record 329m in March.
Acquisitions are a key part of Future’s growth strategy. But lower print magazine sales post-period have impacted TI Media, the £140m purchase completed in April. While the group finished the half with £53m of net cash (excluding lease liabilities), the deal has swung it to £85m of net debt – although this is equivalent to less than one times pro-forma cash profits (Ebitda).
Numis forecasts adjusted pre-tax profit of £77m and EPS of 62.5p for the full year, up from £50m and £47.5p in 2019.
| FUTURE (FUTR) | ||||
| ORD PRICE: | 1,144p | MARKET VALUE: | £1.1bn | |
| TOUCH: | 1,142-1,146p | 12-MONTH HIGH: | 1,572p | LOW: 490p |
| DIVIDEND YIELD: | 0.1% | PE RATIO: | 50 | |
| NET ASSET VALUE: | 375p* | NET CASH: | £37.1m** | |
| Half-year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2019 | 109 | 8.9 | 9.2 | nil |
| 2020 | 144 | 27.1 | 22.3 | nil |
| % change | +33 | +204 | +142 | - |
| Ex-div: | na | |||
| Payment: | na | |||
| *Includes intangible assets of £344m, or 351p a share, **Includes lease liabilities of £15.6m | ||||
