Future media offsets magazine decline

Chief executive Zillah Byng-Thorne noted that while the magazine business is structurally in decline, the media segment is structurally in growth. The former can be expected to continue to decline at a rate of 10-15 per cent, with the latter growing in double digits over the next couple of years. Media’s organic growth has been driven predominantly by increasing audience numbers – with its online audience up by 44 per cent for the period under review.

The US contributed strongly to media’s performance – making up more than two-thirds of its sales. This was helped by the $133m (£103m) acquisition of Purch, a US digital media publisher, in September 2018. Future made three more acquisitions during FY2019, including Mobile Nations and SmartBrief. Mobile Nations – bought for $60m, with a further $55m in deferred consideration – is a US-based global digital publisher focused on consumer electronics. SmartBrief is a digital media publisher, bought for $45m, with a further $20m payable if targets are met.

That said, these purchase prices were blown out of the water by the £140m proposed acquisition of TI Media – announced on 30 October (post-period-end) and facilitated by a £104m placing. TI is a UK-based, print-led consumer magazine and digital publisher incorporating brands such as Country Life. It extends Future’s reach into new areas such as gardening, while strengthening its position in its existing specialisms. It is anticipated that TI will materially enhance earnings in its first year post-completion. Within its full-years, Future announced another acquisition – Barcroft Studios, for £23.5m.

Broker Panmure Gordon expects adjusted EPS of 55.1p for FY2020, up from 46.4p in FY2019.