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November 30, 2022

Future CEO Zillah Byng-Thorne says share price hit by ‘wider market sentiment in unusual times’

Future has announced record revenue and profit growth for the 2022 year.

By Dominic Ponsford

Future’s share price took a dip on Wednesday morning despite it announcing record revenue and profit growth in its results for the year to 30 September 2022.

Investors were unimpressed by Future’s cautious outlook for the year ahead. Despite pre-tax profit increasing by 58% to £170m and revenue rising 36% to £825m, the initial reaction of investors to the results announcement was for the share price to drop – down around 5% at midday on the London Stock Exchange following the 7am results announcement.

Future‘s share price has dropped from a peak of £38.30 at the start of this year.

Chief executive Zillah Byng-Thorne warned that growth will be “modest” for the year ahead for the company, which owns price comparison site Go Compare as well as well as a wide array of mainly specialist consumer media magazine brands.

Asked by Press Gazette why Future’s share price remains comparatively low, Byng-Thorne said: “I’m not really sure I understand, because the business is performing exceptionally well. Last year we delivered £195m of [operating] profit and this year we are delivering north of £270m, and yet the shares are worth less than half of what they were this time last year.

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“What you are seeing is much more a wider market sentiment in unusual times.”

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She added: “We all recognise that share price is dislocated. It’s about waiting for it to correct itself rather than thinking it fundamentally represents the value of the business.”

Asked about the wider prospects for the economy in the face of a UK recession, she said: “What we are seeing is a really uncertain market. Just the last two months in the UK have been quite unusual. Given where we are, we are taking a more cautious view of the next 12 months. If we see that changing we will come back and let shareholders know.”

She added: “One of the challenges in this market is to work out what is the noise versus the signals in terms of what is actually going on. We are taking a cautious view over how we see the next six to 12 months and we fundamentally assumed no improvement or no change in the trends which is why we are looking at modest profit growth.

“We expect January, February, March is when we will see the peak moment in that because we know customers want to have a good Christmas.”

However she pointed out that the best selling e-commerce items for Future’s websites over the Black Friday weekend were air fryers and electric blankets, both items that save energy. She said: “The strategy we’ve got helps us meet audience needs whatever the economic climate.”

Future’s share price has still not recovered from the tumble it took in September when Byng-Thorne announced her decision to resign at the end of next year.

Asked whether the company’s success was inextricably tied to her leadership, she said: “We are delivering record results and predicting profit growth in 2023 in what is the worst recession we all have seen in north of 15 years. I’ve got a fantastic team and a strategy that’s working. I think I’m leaving the business in great shape and am pretty confident whoever comes in to replace me will find a team that’s got lots of excitement and commitment and good momentum in the underlying business.”

Future said that its overall audience grew to 506 million (versus 432 million in 2021). Online users grew by 3%, driven by acquisitions. But organic audience declined by 5% versus what the company said were lockdown-driven traffic spikes in the previous year.

Asked whether Future has now peaked in terms of its audience size, Byng-Thorne said: “I wish it was true that we had got to that point but we’ve got huge runway still in the US. Our ambition is to get to one in two in the US online – at the moment we are at one in three. We grew three percentage points this year in terms of our market share reach so we are making good progress on that.

“The move into the women and homes vertical and wealth and savings open up completely new audience segments to us.”

In the face of a UK cost of living crisis and UK inflation of more than 10%, Future has brought forward its annual pay increase from January to November, giving all staff a rise of 4%.

Staff bonuses are being paid out at 85% which means everyone at Future will receive at least £1,905. All those paid less than £25,000 are getting a 10% pay rise, and all staff paid under £50,000 are receiving a 2% cost of living bonus (worth up to £1,000).

Future continues to eye acquisitions and currently carries net debt of £423.6m, versus £176.3m last year.

Future’s revenue breakdown by segment in the year to September 30 2022, with organic year-on-year change, was as follows:

  • Digital advertising: £231.2m (up 7%)
  • Affiiates (-commerce): £272.7m (down 6%)
  • Events, digital licensing and other media: £31.3m (up 54%)
  • Magazines (subs, newstrade, advertising): £290.2m (down 2%)

See the Future 2022 annual financial results in full.

Disclosure of interest: The author of this piece owns Future shares in his ISA long-term investment account.

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Select and enter your email address Weekly insight into the big strategic issues affecting the future of the news industry. Essential reading for media leaders every Thursday. Your morning brew of news about the world of news from Press Gazette and elsewhere in the media. Sent at around 10am UK time. Our weekly does of strategic insight about the future of news media aimed at US readers. A fortnightly update from the front-line of news and advertising. Aimed at marketers and those involved in the advertising industry.
  • Business owner/co-owner
  • CEO
  • COO
  • CFO
  • CTO
  • Chairperson
  • Non-Exec Director
  • Other C-Suite
  • Managing Director
  • President/Partner
  • Senior Executive/SVP or Corporate VP or equivalent
  • Director or equivalent
  • Group or Senior Manager
  • Head of Department/Function
  • Manager
  • Non-manager
  • Retired
  • Other
Visit our privacy Policy for more information about our services, how New Statesman Media Group may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications.
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