13th Sep 2022 14:05
(Alliance News) - Magazine publisher Future PLC raised its guidance on Tuesday, ahead of a capital market day in London on Wednesday, drawing rave reviews from analysts.
The stock was up 7.1% to 1,844.00 pence each in London on Tuesday afternoon, though is down by 50% over the past year.
Future said the "encouraging" performance set out in its June trading update has continued, with a return to organic audience growth in the second half of its financial year ending September 30. This was because Covid-era comparators were fully lapped. Digital advertising growth and an improving trend in affiliates also contributed, it said.
The company operates in specialist media sectors such as technology, games & entertainment, music, home & gardens, and women's lifestyle, with brands including The Week, Kiplinger, GoCompare, Digital Camera World, Marie Claire and Guitar World. It has an online Media division and a Magazine division.
"Future has again proved more resilient than the market had feared," said analysts at Berenberg, adding: "We think that this is due to the strength and value of Future's technology platform, its widespread global audience, and its access to high-intent data in a rapidly evolving advertising ecosystem. We continue to believe that Future will outperform media peers."
The Bath, England-based company added that operating leverage and cash conversion has remained "strong", with continued deleveraging following the acquisition of WhoWhatWear.
Back in May, Future announced the acquisition of California-based digital-only women's lifestyle publisher WhoWhatWear, for an undisclosed amount.
Future "has a strong track record of financial performance and identifying, integrating, and adding value to acquisitions - helped by its proprietary tech stack," commented Roddy Davidson, a research analyst at Shore Capital.
Looking ahead, Future expects adjusted operating profit to be at the top end of market expectations for its financial year 2022. It noted that the company compiled consensus for adjusted operating profit is between GBP266.4 million and GBP270.7 million. In financial 2021, Future reported adjusted operating profit of GBP195.8 million, so profit is guided up at least 36%.
Future Chief Executive Zillah Byng-Thorne said: "We are pleased to be reporting another period of good progress. Against the backdrop of a challenging macro environment, our continued strong performance is a testament to the diversified nature of valuable audiences, specialist content verticals and monetisation routes coupled with a relentless focus on execution."
Both Berenberg and Shore have 'buy' ratings on Future shares.
Shore's Davidson said the stock is trading at a price-earnings ratio, based on forecast financial 2023 earnings, of 10.0 times, which undervalues the company's growth potential.
By Sophie Rose, [email protected], and Tom Waite, [email protected]
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