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Looking at the trades am guessing the shorts are scrambling to close now.
Hold. Time will tell.
Investors's Champion tip sheet comment 4/4/24
https://www.investorschampion.com/channel/blog/an-interesting-business-lurks-in-the-wreckage
Future: why so cheap?
Future (AIM: FUTR), which calls itself the global platform for specialist media and also combines Go.Compare, the financial services comparison company it acquired in 2020 for £594m, updated on trading for the six months ended 31 March 2024.
Future owns more than 230 well-known brands such as Country Life, Homes & Gardens, Decanter, Money Week and plenty of technology and gaming titles. It acquired Money Week through the acquisition of Dennis Publishing for £300m in 2021.
The return to growth in the current year has been driven by a strong performance in Go.Compare, alongside good growth in B2B, and a resilient performance in Magazines. This has been offset by a more challenging performance in affiliate products and digital advertising.
There is lots of marketing speak in the update around the “reorganisation to accelerate the Growth Acceleration Strategy”, which means little to us, and plenty more marketing speak to enjoy in the investor relations section of their website here.
They also stated how “cash conversion in the half has been strong” but gave no indication of what this is and indeed the period end net debt position, which was £327m at the 30 September 2023 year end.
Despite the lack of detail, the market was clearly reassured with the news that Future is “on-track to deliver on expectations for FY 2024”, pushing the shares up 16% to 695 pence and market capitalisation to £800m.
By our reckoning statutory free cash flow in the financial year to 30 September 2023 was £159m (the results gave adjusted free cash flow as £253m, which conveniently ignores interest and tax!), which equates to a highly attractive free cash flow yield of c16% based on an enterprise value of £1 billion.
Forecast adjusted earnings of 121 pence for the year to September 20204 result in a PE ratio of only 5.7x, which suggests the market has little faith in forecasts and indeed the longer term outlook.
The shares are 80% down on the highs hit in August 2021, when the market capitalisation was over £4 billion, as it basked in the glory of an acquisition boom under former CEO Zillah Byng-Thorne, who stepped down in 2023.
If the future isn’t half as bad as the market clearly fears, there could be another good recovery story here and as we commented in our earlier article here, with appealing brands and cash flow it certainly looks vulnerable to a bid.
Everything is up, but shorters can keep this down easily after a decent update.
Neither do I petrencf. Only thing I can think of is market sentiment. Advertising is a sector traditionally hit hard in recession...even one that turns out to be mild or short lived. The converse is also true in that it is one of the first sectors to recover once green shoots start appearing.
Struggling to see how AI makes an impact, if that is what the shorters are banking on. Good cash flow company.
Shorts are still increasing a bit, I dont get what is the reason for these movements after the last update. Any idea?
Painful I totally agree. But I do think behind the scenes they will be finding ways of embracing AI and with regards original content they will be OK. A lot of copyright lawsuits will start coming into play so AI ain't going to take over FUTR world. Once they find a way to embrace it they have tge foundations to capitalise on it. Difficult period but the numbers speak for themselves, its all sentiment. Things are pretty stable with numbers, just not much growth forecast short term. I am holding and looking forward to the shorts closing. In twelve months I think it will be a different story here if your prepared to wait. I contacted Mark Slater who has had this in his fund for years. They know the company well and they stated they will hold for the long term.
I don't mean to add to the air of general despondency on this board, but I can now buy this share for under six quid, ffs! Seems to be no sign of a bottom either.
Jeez, what an investing backwater the London market has become! Nobody's buying, nobody's putting money into the market, in fact it's all been sucked out. All gone to America, or to bonds, or to bitcoin, or cash.... I feel so like I'm fighting a losing battle when I buy UK equities. Year after year, the opportunity cost is immense...
British ISA? My*rse!
Does anyone think there'd be no buyers of FUTR shares at such mad prices if it were listed in America?
Total
Question re short positions, is the % shown relating to holders holding or the total shares for the company
My initial thought was that its an existing shorter increasing their position. Qube or Marshall Wace possibly? However, I take note of your comments about the recent trades.
Looking at the individual trades over past two days its clear that there is a large institutional seller in the market - there are a large number of 10k, 15k, 20k, 25k and even a 55k sell trade - if this is an existing holder then we should see a RNS over next day or two - if it is a new short seller they need them to accumulate over 0.50% to make their position public (which should be soon at this rate). My initial worry from yesterday was that some negative trading data had leaked from the company but after two days of radio silence from the company I've dismissed this. I'm not overly concerned if its an existing holder selling, in fact it might represent a good buying opportunity once the selling stops. Either way we should find out in very near future. GLA
Something going down from the look of it.