6th Jan 2023 14:06
(Alliance News) - A promising outlook for 2023 alongside a strong leadership transition for Future PLC makes it a key pick for this year, analysts at JPMorgan said on Friday.
Analysts at the investment bank said the Bath, England-based magazine publisher remained a key pick for this year, as management gave a reassuring outlook for 2023 despite market scepticism, highlighting high cost agility to offset the macro impact on revenue and cost inflation.
It said this supported Future's ability to grow profits in 2023, despite an uncertain consumer outlook.
This is alongside expecting strong management execution to remain in place, after "well-regarded" chief financial officer Penny Ladkin-Brand had her role expanded to group CFO and strategy officer. It said this reflected her commitment to remain at Future.
As a result, JPMorgan gave Future an 'overweight' rating, setting a price target of 2,560 pence per share.
Shares in Future were up 0.4% at 1,397.00 each in London on Friday afternoon.
"We expect Future's leadership team to successfully manage its options for use of capital," said JPMorgan analysts Lara Simpson and Marcus Diebel.
"[We] believe the backdrop of a higher interest rate environment and current share price may see cash distributions surprise on the upside next to attractive valuation relative to the sector."
JPMorgan said Future reinvented itself under the leadership of Chief Executive Officer Zillah Byng-Thorne, who is to step down in 2023, "from its print heritage into a media powerhouse".
It cited how revenue in the financial year that ended September 30 multiplied to around GBP825 million across eight years from GBP66 million in its financial 2014.
JPMorgan said Future's organic growth remains a priority, with ongoing mergers and acquisitions "an additional key pillar to the company's growth strategy - with a capital allocation policy to match".
In November, Future reported a financial 2022 pretax profit of GBP170.8 million, up 58% from GBP107.8 million a year earlier.
By Greg Rosenvinge, Alliance News reporter
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