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TOP NEWS: Future hails strategic progress as UK growth offsets weak US

(Alliance News) - Future PLC on Thursday announced plans for a new GBP55 million share buyback as ...

Alliance News 5 December, 2024 | 10:18AM
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(Alliance News) - Future PLC on Thursday announced plans for a new GBP55 million share buyback as it welcomed a return to organic sales growth in the second half of the financial year.

But the Bath, England-based online magazine publisher and owner of price comparison website Go Compare said profit was hit by investment from the previously announced Growth Acceleration Strategy, contributing to a drop in the operating profit margin to 17% from 22%.

Pretax profit dropped 25% to GBP103.2 million in the year ending September from GBP138.1 million a year prior. Diluted earnings per share fell 29% to 66.8 pence from 94.1p.

Future launched the Growth Acceleration Strategy in December 2023. The two-year investment programme of GBP25 million to GBP30 million is aimed at capitalising on opportunities in attractive and growing markets.

"We've made good progress in the first year of the plan, resulting in the group's return to organic growth," Future said in a statement.

Full-year revenue was little changed at GBP788.2 million from GBP788.9 million, but up 1% on an organic basis. This included a strong second half performance, up 5%.

UK revenue grew by 5.7% to GBP504.0 million from GBP476.6 million, including growth of 8% in the second half. This was driven by Media, up 13%, with continued very strong growth in Go.Compare, up 28%. Business-to-business recorded 2% growth whilst business to consumer saw a 6% decline, impacted by market conditions and the "weight of Magazines".

US revenue declined by 9.0% to GBP284.2 million from GBP312.3 million. Organic revenue was down 6% in the year but flat in the second half. The improvement was driven by 2% growth in digital advertising in the second half.

Chief Executive Jon Steinberg said: "We launched our Growth Acceleration Strategy one year ago and have made good strategic progress. We have invested in sales and editorial roles, successfully diversified and grown revenue per user, and we have further optimised our portfolio. Importantly, the group has returned to organic revenue growth during the year, underpinned by a strong [second half] performance."

In response, shares in Future soared 13% to 1,102.47 pence each in London on Thursday morning.

Peel Hunt said: "This was a welcome set of results after a challenging period. We expect further improvement in the backdrop into the New Year, but until a new CEO is announced, a piece of the puzzle remains missing."

In October, Future said Steinberg would be stepping down next year having only joined in April 2023. The company said Steinberg will leave in order to relocate back to the US with his family. His notice period is twelve months.

Future proposed a final dividend of 3.4p per share, unchanged on-year.

It also announced a new GBP55 million share buyback programme would start in January 2025.

The firm said the "return to revenue growth in the [second half], driven by the execution of GAS, puts the group in a good position to achieve current market expectations for [financial 2025]. We expect to continue to operate at an adjusted operating profit margin of 28% for the coming year reflecting the planned incremental GAS costs, and to maintain strong cash conversion."

Beyond financial 2025, "we now expect to deliver accelerating organic revenue growth, in line with current market expectations," Future added.

By Jeremy Cutler, Alliance News reporter

Comments and questions to newsroom@alliancenews.com

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Securities Mentioned in Article

Security Name Price Change (%) Morningstar
Rating
Future PLC 943.50 GBX -0.89 -

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