Insider: sizeable director purchases at two FTSE 250 companies

A new Future (LSE:FUTR) leadership team has staked £150,000 in support of the publisher as they look to deliver on City expectations of better times ahead for the former high-flying stock.

Kevin Li Ying, who first joined Future as a programmer 20 years ago and became its chief executive in March, has faced a tough start to his tenure after shares fell sharply on his cautious guidance in half-year results.

• Our Services: SIPP Account | Stocks & Shares ISA | See all Investment Accounts

They stood at 647.5p when he spent £100,000 on Future shares on Thursday, the same price as the low point of April’s post-tariffs dealings and down from 2021’s peak of more than 3,500p.

His finance boss Sharjeel Suleman, who joined the company from ITV Studios in September, also made an investment of £50,000 at a similar price on the same day.

The pair told investors on 16 May that it was prudent to expect a single-digit decline in full-year organic revenues, even though US direct digital advertising returned to growth in April after a weaker performance the previous month.

Recent rates of foreign exchange are also a headwind for a company that generated just over a third of its half-year revenues of £378.4 million in the United States.

Organic revenues declined 1% in the half year, with the Marie Claire-to-Homes & Gardens magazines division ahead of expectations and offset by weaker performances for the price comparison site Go.Compare and the business-to-business division.

Barclays said uncertainty was a fact of life for a name exposed to digital ads and e-commerce, adding that the fall in share price from February’s peak above 1,000p has already captured concerns about potential earnings downgrades.

The bank said an extra concern related to how AI is changing search, given that Google has been the lifeblood of Future's traffic for a decade.

It added: “They are focused on innovating in their approach to search and diversifying their traffic. We will not find answers on this one quickly, so the question is whether this layer of uncertainty is captured in valuation.”

• Stockwatch: is this FTSE 100 share now a contrarian buy?
• This is why investors blow up – even when knowing the future

Barclays has a price target of 900p, while JP Morgan Chase is at 1,325p after it backed Li Ying to continue the growth acceleration strategy that it believes is starting to bear fruit through a focus on profitability and cash generation.

It said a new share buyback programme of up to £55 million and two bolt-on acquisitions were testament to strong financial characteristics in a still challenging operating environment.

Future generated £111.5 million of adjusted free cash flow in the first half of the year, representing 111% of operating profit.

Stifel cut its price target from 1,562p to 1,270p following the results, noting that the shares trade on a multiple of 5.4 times forecast 2025 earnings.

It said: “While the guidance downgrade is disappointing, we believe shares now offer an attractive entry point into a business with strong fundamentals and self-help potential.”

Deutsche Numis is among the most positive of City analysts, having cut its price target by 2.1% to 1,875p in the wake of the results. Counterparts at Peel Hunt are at 1,310p.

Time to trust

The chair of Petershill Partners Ord (LSE:PHLL) has spent £178,000 backing the private equity-focused investment trust after its shares traded 40% below where they listed in October 2021.

Naguib Kheraj, who began his career at Salomon Brothers in 1986 and has held senior positions at leading financial institutions including Barclays, made his investment on Friday at 209p.

That compares with the FTSE 250 firm’s level of 284p earlier this year. Operated by Goldman Sachs Asset Management, Petershill ranked as 2024’s top investment trust in a list compiled by the Association of Investment Companies.

• Sector Screener: expect further capital gains from this pair
• Sign up to our free newsletter for investment ideas, latest news and award-winning analysis

Through economic interests in alternative asset managers, Petershill participates in the fee income from more than 200 underlying funds that are diversified across asset class, investment strategy and lifecycle.

A first-quarter update on Thursday showed it has exposure to $339 billion of assets under management, a rise of 1% over the three months and up by 9% over a year earlier.

The underlying funds generate recurring management fees and the opportunity for profit participation over the typical nine-plus years life cycles of such funds.

Partner distributable earnings were $73 million in the first quarter, a 9% beat versus consensus and 28% higher than a year ago.

Reiterating guidance for the year, Petershill said its partner-firms' robust capital raising and its own “dynamic” approach to capital allocation underpinned confidence in delivering for shareholders at a time of heightened uncertainty.

Deutsche Bank cut its price target from 300p to 270p following the update, while UBS reported a Neutral recommendation and 250p target price.