ii view: Future hikes 2025 dividend fivefold

Full-year results to 30 September

• Adjusted revenue down 3% to £739 million
• Currency adjusted profit (EBITDA) down 5% to £223 million
• Adjusted operating profit margin flat at 28%
• Net debt up 8% to £276 million
• Dividend payment of 17p, up from 3.4p last year
• New £30 million share buyback programme

Guidance:

• Expects modest organic revenue growth for the 2026 year ahead
• Expects to an adjusted profit (EBITDA) margin of around 30% for the year ahead
• Expects sustainable revenue growth of 2-4% over the medium term

Chief executive Kevin Li Ying said:

“As a data-first platform that monetises high audience engagement powered by technology and enabled by our trusted specialist brands with authority. We are focused on building the business of tomorrow by delivering strategic initiatives designed to drive growth in what is a dynamic media
environment.

“In the age of AI, our trusted, authoritative and specialist brand content is highly visible for audiences across Large Language Models, and we have already started monetising our presence in this area. The opportunity is significant.”

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ii round-up:

Magazine owner Future (LSE:FUTR) today underlined its confidence in the outlook by announcing a major hike in the dividend payment as well as appointing a new tech savvy chairman. 

An annual 2025 dividend payment of 17p per share compares with 3.4p per share in 2024, with a new £30 million share buyback for 2026 following on from a previous £55 million programme. Current senior independent non-executive director Mark Brooker will replace Richard Huntingford as group Chair come February, bringing executive experience from roles at Flutter Entertainment (LSE:FLTR) owned Betfair and Trainline (LSE:TRN).   

Shares in the FTSE 250 company rose 6% in UK trading having come into these latest results down by around a third so far in 2025. The FTSE 250 index is up 7% year-to-date. Fellow media publisher Reach (LSE:RCH) is down by a similar amount over that time. 

Future’s magazine brands include Country Life, Marie Claire and PC Gamer. It also owns insurance comparison website Go Compare. Group revenues come broadly come from the three areas of advertising, magazine subscriptions and affiliate sales.

Sales direct to consumers (B2C) fell 6% on a headline basis to £493 million, including a 9% fall for digital ad sales and a 3% retreat for magazine related revenues.

Go Compare sales dropped 5% to £192 million, hindered by a 10% retreat in car insurance related sales and a tough 2024 comparative. 

Sales direct to other businesses (B2B) fell 13% to £54 million, hampered by reduced affiliate and media event demand. Affiliate sales work by allowing Future to promote and sell products or services of customers on sites such as Amazon in exchange for a commission on each sale.

Started in late 2023, Future has been pursuing a Growth Acceleration Strategy (GAS), readjusting the business portfolio, investing in the group’s various platforms and cutting costs. 

Currency adjusted profits (EBITDA) over the year to late September fell 5% to £223 million. Ongoing management initiatives kept the adjusted profit margin for the year flat at 28%.

Future continues to expect an adjusted profit margin of around 30% with sustainable revenues over the medium term growing by between 2% and 4%. 

The final dividend of 17p per share is payable to eligible shareholders on 11 February. First-half results are likely to be announced mid-May. 

ii view:

Founded in 1985, Future creates specialist media content which is then distributed via methods including websites, magazines, newsletters and live events.  The company operates around 175 brands across diversified content verticals. Geographically, the UK generated most sales during 2024 at 64%, with the USA making up the balance. The consumer, or B2C business generated most profits over this latest year at 58%, followed by Go Compare at 36%, and B2B the balance of 6%.  

For investors, the tough economic environment continues to overshadow areas such as corporate advertising spend and consumer subscriptions. Competition from online tech giants such as Google owned Alphabet Inc Class A (NASDAQ:GOOGL) and Facebook owned Meta Platforms Inc Class A (NASDAQ:META) now persists. The impact of artificial intelligence (AI) on media content production in the years ahead warrants consideration, while a forecast dividend yield of under 3% compares to yields of over 5% at ITV (LSE:ITV)and WPP (LSE:WPP).  

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On the upside, the relatively new chief executive is soon to be joined by a new chairman, providing a refreshed management team. The group’s content and data may well prove of increasing interest to AI focused tech giants over time. Continuing management initiatives include investments and a high focus on costs, while a focus on shareholder returns is also evident given a big hike in the dividend and a new share buyback programme. 

For now, room for caution persists given still falling profits. That said, new leadership and a consensus analyst estimate of fair value above £12 per share appear to provide grounds for interest among more speculative investors. 

Positives: 

• Diversity of titles and business revenues
• Strong brand names

Negatives:

• Uncertain economic outlook
• Advertising revenues can prove volatile

The average rating of stock market analysts:

Buy