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I like the sound of this. TV, advertising, coming out of recession and Future Group. Welcome aboard Sharjeel.
Appointment of Sharjeel Suleman as Chief Financial Officer
The Board of Future plc ("Future" or "the Company"), the global platform for specialist media, is pleased to announce the appointment of Sharjeel Suleman to the Company's Board as Chief Financial Officer.
Sharjeel is currently Chief Financial Officer at ITV Studios, a role he has held for the last five years. Before this, he held a variety of senior finance roles at ITV plc including Director of Group Finance and Director of Investor Relations. Sharjeel started his career at KPMG, where he qualified as a chartered accountant.
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.
It can be more tax efficient to use share buybacks instead of paying out dividends, depending on the circumstances.
It is OK for Future to do this because it is highly cash generative, unlike some other companies.
Not sure buybacks are the greatest thing…witness ABDN…an apparently never-ending buyback programme, share price unimpressively weak and yield 10%
If there is so much money sloshing around for buybacks , why not pay special dividends?
Shorts are still increasing a bit, I dont get what is the reason for these movements after the last update. Any idea?
Ok, thanks. Well, it isn't having the required effect on the share price. Perhaps they need to make it more meaningful! If enough shares are purchased and cancelled, earnings per share will rise strongly and eventually the market will wake up. I'm a big believer in buybacks, esp right now.
They are currently in a buy back.
Yes petrencf, once they get net debt down they should initiate buybacks because nothing spooks shorters more than a meaningful buyback programme.
Outstanding on earnings basis, no geopolitical risks, i call 900p in bound, top analysts suggest Future as a best buy in the media sector.
A highly cash generative company and a return to organic growth makes the company a very strong buy, expect a buyback with results announcement next month
I'm always amazed how shorts so often target companies with very weak sentiment whose SPs are already very depressed. Sure, you might push it down even further but there's the danger of a turnaround. It could also be here that they're betting on AI disruption, but it seems to be it's too early to tell how that will pan out. Personally I think that for a company to be growing organically in a difficult context and to be generating tons of cash on a p/e of 5 makes no sense. Fair value would be somewhere in the £10-16 range. Under £7 is still a bargain though I'm not necessarily expecting a rapid recovery yet. That will probably only happen if and when we get into serial interest rate cut territory.
Surely, means that MONY must be decent at these prices - so I went straight for MONY on the bell this morning., since MM pushed up offer +10%.
Do you think that the shorts should start to close now?
Alessandro: In answer to your question, the RSN states "The return to growth ...". I would interpret that as meaning that there is a net return to growth.
This should be valued 8-10x FCF to fend off any takeover approach imo. Net debt should be down significantly at year end. No share buybacks this year?
I think that this indicates a change in direction from previous RSN's.
It looks like the company is keeping the B2B part of the business, whereas previously is was looking to dispose of it (as per my understanding).
That all helps with generation of cash, which still looks very strong. The indication on the cash generation suggests that the share price should be much higher than it is right now, 1200+ according to some sources. All as previous information provided.
Does this mean that there is no net growth?
"The return to growth 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 as macroeconomic pressures and low visibility continue to
impact the wider sector."
Good update today, the company on track to meet expectations. I am wondering when the shorters would like to close their positions. Next year?
As long as Mark is holding then so am I....he knows the company well over many years from his Slater Recovery Fund.
At the same time, old Mark Slater was indulging in a little top-slicing yesterday. He can't be in profit on that.