16th May 2024 11:09
(Alliance News) - An improved revenue performance and more confident outlook at Future PLC drew praise from analysts on Thursday.
Shares in the Bath, England-based online magazine publisher and owner of price comparison website Go Compare, leapt 12% to 970.38 pence in London on Thursday. They earlier traded as high as 1,091.00p.
In the half-year to March, Future said pretax profit fell 30% to GBP46.6 million from GBP66.4 million a year prior.
Profit was mainly impacted by an adverse revenue mix and investment from the previously announced growth acceleration strategy, Future said.
The GAS plan, announced in December, is a two-year investment programme of GBP25 million to GBP30 million aimed at accelerating growth.
Revenue fell 3.3% to GBP391.5 million from GBP404.7 million.
But Future said it returned to year-on-year revenue growth in the second quarter, with organic revenue rising 3%.
UK revenue grew by 3% on an organic basis, with very strong growth in price comparison service Go.Compare, up 30%, and good growth in business to business.
US revenue declined by 11% on an organic basis, with an improving trend through the second quarter.
Future said it expects to deliver revenue growth in the second half with an adjusted operating margin of 28%. In the first half of the financial year, the adjusted operating margin was 27%.
No dividend was declared, unchanged from a year ago.
But Future plans a further return of up to GBP45 million via a share buyback programme which will start shortly.
Peel Hunt's Jessica Pok described it as a "solid set of results," which followed "positive trends also seen by peers in recent months."
"The improved sector backdrop and stabilised audience trends give us confidence of further improvement in [the second half]," she said.
Pok pointed out, despite the recent price surge, the shares remain "attractively valued."
Peel has a 'buy' rating and 1,210 pence per share price target for Future.
Shore Capital said although external headwinds "remain an issue, we are encouraged to note the continuing stabilisation and return to organic growth" after a "challenging" period.
More broadly, the broker like Future's focus on creating and leveraging "high quality, authoritative content and leading positions across specialist categories," its commitment to investment in technology, developing in the "important" US market, and "delivering highly-engaged audiences to digital advertisers and ecommerce partners."
Shore Capital regards Future's valuation as "extremely modest" and maintains a 'buy' recommendation.
By Jeremy Cutler, Alliance News reporter
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