Future shrugs off Covid woes as it triples pre-tax profit and buys Go Compare owner for £594m

Specialist publisher Future has revealed it tripled its pre-tax profits for the second year in a row as it announced plans to buy the owner of price comparison site Go Compare for £594m.

The acquisition of GoCo Group will be the latest in a series for Future, which in the past year has bought video content production agency Barcroft Studios, magazine giant TI Media, and (after the end of the last financial year) digital entertainment brand Cinema Blend.

Future has reported profit before tax in the full-year to the end of September of £52m, a 309% growth from 2019 when it made £12.7m. In 2018 that figure was £4.4m.

Its adjusted operating profit is up 79% to £93.4m with a profit margin up four percentage points to 28%.

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The publisher of more than 220 global brands including Four Four Two, Woman’s Weekly and Games Radar said group revenue is up 53% to £339.6m driven by a combination of organic growth and acquisitions.

The group’s organic revenue growth was 6% (11% in the first half of the year and 1% in the second after Covid-19 hit).

This was underpinned by continued online audience growth to a claimed monthly average of 281.8m – this was up 56% in total and 48% on an organic basis.

The company said its diversified strategy had offset any impact from the Covid-19 pandemic. It had already paid back furlough cash from the UK Government after maintaining a strong performance.

It saw “strong” organic media revenue growth of 23% after growth in ecommerce and digital advertising of 58% and 15% respectively offset the impact of event cancellations which saw an organic decline of 43%.

But the magazine division, which makes up 21% of Future’s group revenue, was harder hit, reporting organic revenue decline of 29%.

Future chief executive Zillah Byng-Thorne said: “Our exceptional results, which are ahead of expectations, demonstrate the continued strength of our strategy, as well as the innovation, fortitude and agility of our business, focused on its purpose, delivered by its people.

“I am extremely proud of the way our colleagues have rapidly adapted to address the challenging market resulting from the Covid-19 pandemic over recent months, and want to thank them for their hard work and commitment this year.

“Future has continued to thrive by knowing what our audiences value most, enabling us to take advantage of the changing market landscape to continue to deliver incredible content to our communities in whatever way meets their needs.

“Our content now reaches one in three adults in the UK and US, and our leadership positions are underpinned by a track record of strong, consistent organic growth, and accelerated through acquisitions.

“The long-term fundamentals of growing global digital advertising spend and ecommerce growth add to our confidence that, despite continued market uncertainty, we remain well-positioned to continue our strong growth.”

Future, which has a market cap of £1.9bn, is focusing on a strategy to “build a specialist global media platform that drives intent, powered by technology and insight with scalable, diversified brands”.

It said it invested £50m in content creation during the 2020 financial year and that editorial staff now make up 46% of the company’s total workforce.

In October Future announced plans to make more than 150 hires in three months, mostly in editorial with some in technology and the newly-formed Future Studios division, which incorporates Barcroft Studios and aims to build video production as a “significant” revenue stream.

The publisher has launched eight new websites, some in verticals added to the group with the acquisition of TI Media, which it said constituted a “strong path to revenue growth” through digital advertising and ecommerce.

The integration of TI Media and Barcroft are now both complete – Future said cost savings from the former are expected to be £20m per year, up from original forecasts of £15m.

Future expects its buyout of GoCo Group, which as well as Go Compare owns the website My Voucher Codes and switching services websites Look After My Bills and We Flip, will result in cost savings of about £10m per year.

Future chairman Richard Huntingford said the deal “represents a compelling mixture of complementarity and growth opportunity”.

“We believe that the combination is a unique strategic opportunity to create a leading global specialist media and intent platform, capitalising on the growing consumer demand for informed and value driven purchasing decisions enabled by intent driven content, which will deliver strong returns for all shareholders.”

Future’s share price has more than tripled since March.


Picture: Go compare

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