Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on Future. We currently have 34 research reports from 5 professional analysts.
Actual Experience (ACT LN) Strong progress both operationally and strategically | Churchill China (CHH LN) Revisiting the investment case | First Derivatives (FDP LN) New database technology release increases market potential | Future (FUTR LN) Revenues, profits and cash ahead (again) | Grainger (GRI LN) In line, pipeline continues to develop toward £850m 2020 target | Hill & Smith Holdings (HILS LN) Slow start in UK; full year expectations unchanged | IndigoVision Group (IND LN) Trading in line; encouraging signs of stability | Listed Law Conference Many models, more IPOs, probably | ReNeuron Group (RENE LN) Capital Markets Event on Exosomes
Companies: ACT CHH FDP FUTR GRI HILS IND RENE
The Media business has had a storming first half smashing our expectations and becoming the larger of the 2 units in H1, faster than we expected. Group revenues are up 25% and over 13% ahead of our forecast. EBITDA is ahead by 8.6% at £8.8m with net debt an impressive £6.8m lower than forecast and falling to just £2.0m. With good trading momentum, Home Interest integrated and two recent acquisitions to build in we lift our FY18, FY19 and FY20 EPS by 4.3%, 12.1% and 19.8% respectively. Our 3 year DEPS CAGR Is 24.8%. Future’s quality of earnings continues to rise with Media now much larger and the US a scale profit centre with significant potential. A 12x to 15x EV/EBITDA range implies an intrinsic value range of 487p to 614p for FY19 and 573p to 713p for FY20, when the full benefits flow.
Future has delivered strong H118 figures, with management confident of meeting full year expectations. We have updated our forecasts to include the two recently completed transactions, Newbay Media in the US and four specialist titles acquired from Haymarket in the UK. Management’s ambitious growth strategy is playing out as envisaged, with diversifying revenue streams and broadening market reach based on good-quality content and data. The US opportunity is particularly attractive. Good momentum underpins the valuation, with some further possible upside.
ATTRAQT Group (ATQT LN) New CEO appointed | EMIS Group (EMIS LN) AGM update reassures | Future (FUTR LN) Acquisition completion | Safestyle UK (SFE LN) CEO departure and new turnaround appointment | St Ives (SIV LN) Books disposal - surprise
Companies: ATQT EMIS FUTR SFE SIV
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Future has announced a further acquisition to scale up in the important US market and reinforce its authoritative voice in the music and consumer electronics sectors. Newbay Media is being bought for $13.8m, mainly in cash, and is expected to be earnings enhancing in FY19. This deal, and March’s purchase of five titles from Haymarket, will be added into our FY18 and FY19 forecasts with the interim results in May. Future’s H118 trading has been strong, as expected, with good organic growth from the Media business and promising US progress. We consider that the current rating does not fully reflect the opportunity.
Future has announced the acquisition of Newbay Media LLV, which owns a range of events and information titles, for initial consideration of $13.8m ($12.25m cash and $1.55m in shares) with potential for up to another $5.6m depending on performance. Using the 2017 EBITDA result of $4.2m implies a very attractive multiple of just 3.3x. Even allowing for some much needed catch-up investment we expect the multiple to be similar post reorganisation. Unsurprisingly Future guides that the acquisition will be earnings enhancing in its first full year. Newbay will boost Futures exposure to the US, enhance critical mass in many ways (skills and operating scale) and strengthen existing verticals such as Music and Consumer Electronics. The acquisition also adds B2B titles in complementary verticals (audio visual, TV broadcast and educational technology). This extension into B2B builds on the exposure and skill sets added through the acquisition of the Home portfolio last year and some other existing titles that involve professionals using the information Future produces. The US business has been doing very well and in the last Capital Markets Day presentation the potential for further improvement in the commercialisation of the US was highlighted. Today’s announcement provides an update and highlights further overall trading has been strong with Media growth outweighing Magazines and driven by particular strength in the US. We expect to review our forecasts at the interim results stage (17th May) and to also include the Haymarket portfolio acquisition that is currently in process. With 2 accretive acquisitions and strong underlying trading we anticipate a positive market response.
Future has announced a proposal to acquire 5 brands from Haymarket. The acquisition needs to go through some technical phases (including staff consultation) before expected completion in early May. At this point the Company is indicating a consideration value of up to £14m (using a mix of cash and shares) for the titles which generated £12m in the 12 months to June 2017. The most notable brand is “What Hifi?”. Acquiring this will extend the existing leading position and substantial strength in the audio visual market and help both diversify revenues and add more scale in certain categories. The portfolio will also add new verticals to exploit, bulk up another and increase the scale of the group. We expect to review our estimates once the terms become clearer, but note the Company expects the transaction to be earnings enhancing in the first full year. The Company is about to complete its first half trading (end March) and we would expect a positive trading update highlighting ongoing strategic execution and confirmation it is seeing the benefits of the Home portfolio acquisition. After making a new high at 430p in early January the shares have retraced and look very good value at c350p. This level could be an excellent opportunity for those who have missed out on the performance to build positions. We reiterate our view that we see the stock breaking the 500p barrier in the next 12 months.
accesso Technology (ACSO LN) Mixed performances but strong overall result | Anpario (ANP LN) Modest forecast changes; remain at Hold | Brady (BRY LN) New FY19 estimates introduced, no change to Hold rec or 56p TP | Carador Income Fund (CIFU LN) Record start for CLO new issuance | Centaur Media (CAU LN) Profits and cash ahead | Future (FUTR LN) Adding more depth | Microsaic Systems (MSYS LN) Contract with CPI Innovation Services Ltd | Vectura Group (VEC LN) FY2017 results in line, highlighting new generics strategy | Verona Pharma (VRP LN) Imminent Phase IIb data in COPD | Xaar (XAR LN) 2017 results in line, transformation continues
Companies: ACSO ANP BRY CIFU CAU FUTR MSYS VEC VRP XAR
Future has announced the purchase of five well-known, specialist consumer titles from Haymarket Media for up to £14m, 1.2x their combined revenue for the year to June 2017. These strengthen the group’s offering in audio visual and add new verticals in sports and leisure. Management has a very good record on speedy and successful integration of consumer titles and their improved monetisation. It expects this deal to be earnings enhancing. We will update our estimates when the transaction completes in May. The share price has drifted back from recent highs and we consider that the current rating does not fully reflect the opportunity.
Future’s capital markets day (CMD) focused on its opportunity to grow brand reach globally, together with demonstrating the scalability of its platform to deliver that growth. There are particularly attractive prospects in the US market, where media revenue per online user is significantly less than it is in the UK. Our forecasts are unchanged at this point, but the emphasis on closing this revenue gap points to further strong growth potential. Management has an impressive M&A record, adding assets and driving returns on the brands. Progress has been reflected in the strong share price performance, but we still consider that the current rating does not fully reflect the opportunity.
The successful modernisation and recent scaling of Future has excited investors. Profits have soared on the back of excellent execution and so has the share price. The strength of the engine of growth is becoming more visible with best practices and developed technology/products applied to the growing content portfolio and audience. The CMD (held yesterday) saw a notable step change from prior years in terms of maturity. Future looks robustly structured and positioned to grow substantially through both organic strategy and acquisitions, where it can deploy its proven ability to raise returns (sometimes turning an arguably unviable business into a valuable asset). In Technology the emphasis over time has shifted from pieces of individual pieces of tech to the highly developed core technology stack and the product/modules integration that optimises the efficiency of the business, assists easy scaling and maximises content exploitation. The CMD also covered Content development and management as well as Sales, with a focus on how Future seeks to maximise its premium pricing, pursues dominant market share (65% target) and utilises programmatic and real-time biding (RTB) online media sales. There was also a reminder of how powerful a partner Future can be to retailers in eCommerce due to its position in the consumer path. Overall we were greatly impressed and can envisage the business scaling multiples of its current size by deploying its model, developed business practices and content/brands. The path to a 500p valuation this year looks straightforward without any further acquisitions. Beating expectations (again), acquiring further content and, or looking further out would lift this expectation. Future is an excellent play on the evolving online environment and high quality content with the comfort of a proven and ambitious management team.
Future (FUTR LN) Making the intangible very tangible | Grainger (GRI LN) In line trading update, PRS investment strategy continues | Harwood Wealth (HW LN) Appointed portfolio research partner by Frenkel Topping | UDG Healthcare (UDG LN) Model updated for FX and tax
Companies: FUTR GRI HW/ UDG
Amino Technologies (AMO LN) End-to-end contract win with DELTA | Burford Capital (BUR LN) Burford ups the pace again and signals another bond issue | Future (FUTR LN) Capital Markets Day | Liontrust Asset Management (LIO LN) Impressive net inflows, increased target price | Senior (SNR LN) Positive end to year - tax benefit | Sigma Capital Group (SGM LN) FY17 in line, upgraded FY18e, increased bandwidth | The PRS REIT (PRSR LN) Equity fully committed, close to securing debt Zotefoams (ZTF LN) Positive year end update, expect to remain at BUY
Companies: AMO BUR BUR FUTR LIO SNR SGM ZTF
Research Tree provides access to ongoing research coverage, media content and regulatory news on Future. We currently have 34 research reports from 5 professional analysts.
Reabold has announced this morning that it has acquired 100% of the share capital of Gaelic Resources, adding near term, high impact oil and gas leases in California, with 2 wells likely drilled in Q3, and a 3rd in Q4. Adjusting our model increases RENAV from 2p to 2.5p.
Companies: Reabold Resources
A record half-yearly performance and a reiteration of profit guidance for FY16 is a good starting point. However, the mix was different to what we expected as the high margin Publishing division outperformed while the Media business reflected a more challenging backdrop.
The 2017 results were delivered to expectations and accompanied by a positive outlook statement confident of meeting market expectations for impressive growth in 2018, which will be driven by further geographic expansion – both in Europe and particularly APAC where mobile usage is so strong – and further moves into video and brand advertising. Last year was transformational for Taptica; the business delivered impressive 27% organic sales growth in H1 and was assisted in H2 by the significant acquisitions of Adinnovation and Tremor Video’s DSP business, to deliver a headline 68% YoY growth in revenue and 32% growth in adjusted PBT across the year. Looking ahead, management is confident of meeting market growth expectations while delivering on a three-year plan to build a truly global business with a presence in ten key hubs worldwide. We reiterate our FY 2018 forecasts and issue FY 2019 forecasts. Our target price remains unchanged at 550p.
Companies: Taptica International
Two former AIM companies could be in the FTSE 100 index in the near future following the successful bids by Melrose Industries for GKN and GVC for Ladbrokes Coral. Melrose has been on the brink of the FTSE 100 for a while and if a constituent company of the FTSE 100 is acquired than it can be replaced by the acquirer when it is eligible. Melrose is already on the reserve list for inclusion in the FTSE 100, following the March 2018 quarterly review.
Companies: PTSG JDG TRCS SRB TAP KETL
Focused investment to support further growth Audioboom, the provider of an end to end podcast and digital audio platform to broadcasters, publishers and podcasters has conditionally raised £4.5m plus the conversion of £1.5m in loan notes to expand its existing relationships with Spotify, iTunes, GooglePlay and CastBox; increase the volume of higher margin Audioboom Originals’ content; acquire more third-party podcasts for the platform; and invest in Sonic Influence Marketing, its new buy-side media agency that is partnering AdResults, the leading dedicated podcast buy-side media agency. After the failed Triton Digital acquisition, Audioboom is focusing back on its core podcasting business where we believe there is substantial growth potential. The acquisition process has been a distraction to management and the company’s restricted balance sheet has held back investment. This is reflected in our reduced forecast assumptions but the company has maintained growth across its key KPIs.
Companies: Audioboom Group
Enterprise-focused niche applications of tech illustrate how, while trends appear to be fluctuating away from the current poster children of fintech and the Internet of Things, in fact these developments are refining appropriate application of existing technologies.
Companies: 7DIG AMO ARTA BVC BOTB CTP CITY D4T4 DTC DOTD ELCO ESG FDSA FDEV GBG IDEA IDOX IMTK IGP IOM KBT KCOM KWS LRM MAI MMX NASA NET PHD QTX QXT RCN 932 SSY SEE SIM SPE TAX TEP TPOP TRAK UNG VIP ZOO ONEV
The Quoted Companies Alliance has set out its proposals for taxation ahead of next month’s Budget. The smaller company pressure group believes that the UK needs to build a post-EU tax regime that supports and incentivises smaller companies. One of the key aspects of the proposals is a levelling of the playing field between debt and equity. At the moment, a company can claim tax relief for costs incurred in raising debt but not the costs of a share issue. The QCA believes that the government should encourage long-term equity finance.
Companies: ITX CLIN OPM STEL PEN KAPE
A look back at our 2017 ideas In aggregate our analyst picks outperformed the FTSE All Share last year by 9% and the cumulative performance of our portfolio over 6 years would have given a total return of 300% (almost double the return on the FTSE All Share). In addition, many of our top-down themes played out very well such as our focus on secular growth in Tech, Life Sciences, Healthcare and Financials, an increase in M&A, our cautious stance on the Consumer and especially our bet on continued strength in the Industrials last year and solid growth in the global economy. What does 2018 have in store? We continue to play ongoing secular growth themes in Tech, Life Sciences, Healthcare and Financials. In addition, we tap into domestic areas of cyclical strength such as regional construction and house building, plus self-help initiatives and potential market share gains. We maintain a favourable view of Industrials given the global economic backdrop but think this could moderate during the year. Other changes of nuance include the potential for a better H2 in the Consumer sectors, which remain under pressure for now, and a better outlook in Media from a mini-quadrennial year in 2018.
Companies: AMO AVG CBP CVSG DNLM EKF FENR IOM SAA GLE RLM SFR PGIT RLM SFR SOG VRP
Crossrider Plc (LON:CROS) is a B2C software business focussed on security/privacy and performance solutions. The company operates three core brands: Reimage. Patented software delivering repairs for PC and Mac. DriverAgent. Searches and updates for outdated drivers on computers, tablets and mobiles. CyberGhost. Leading cyber security provider with a focus on Virtual Private Networks. The acquisition of CyberGhost, announced March 2017, has extended Crossrider’s presence in high growth end markets, and reinforces the company’s strategy of moving towards a Software-as-a-Service (SaaS) business model. A core intellectual asset underpinning all of three is the company’s proprietary distribution platform, which maximizes market reach and drives strong returns on customer acquisition spend.
Companies: Kape Technologies
Over the past 18 months Immedia Group has acquired and successfully integrated AVC Media, strengthened the Board, appointed a new COO and Group Financial Controller, and launched its own proprietary content distribution platform DreamStream X. We see 2017 as a financial trough, with the Group well positioned to capitalise on its expanded skill set, increased cross selling opportunities and sharpened strategic focus over the forecast period. Immedia is enjoying increasing momentum across the Group evidenced by the recently announced major UK financial institution installation contract.
Companies: Immedia Group
NFC’s full year results did not contain any surprises following the January trading update. The key point was the continuation of the H2 high single digit organic revenue growth into the first two months of the new year. Whilst this by no means guarantees the full year outcome; it is a good start and underpins current year expectations. If this momentum is maintained and barring no further material FX volatility this suggests current year estimates could be conservative. NFC shares are currently trading near all time highs, which is no great surprise given the strength of the group’s performance over the last four years. Yet, the valuation does not look stretched relative to the peer group despite a superior track record and future growth outlook.
Companies: Next Fifteen Communications Group
FY 2017 was a year of consolidation after transformation in FY 2016, establishing the profitability and driving higher margins from the new scale. The results beat expectations of both revenue and earnings on the back of strong demand for .vip premium inventory; attaining $3.1m adj. PBT and a $2.1m exceptional gain on gTLD auctions. FY 2018 sees another impressive step forward with a $40m acquisition of ICM, a profitable and cash-generative niche ‘adult’ TLD registry.
Companies: Minds + Machines Group
The £1.53bn raised on AIM in Q1 2018 (new and further issues) was essentially in-line with the quarterly average seen through 2016-2017 of £1.49bn. Historically the new : further ratio has been roughly 1 : 3 but in Q1 2018 the balance was very much with further issues (£1.37bn raised) against a relatively small amount raised in new issues (£164m).
Companies: ECHO VLX CRA OTMP TRU GRC STRL
Post-yesterday’s trading statement, we reduce our estimates and target price to reflect the trading environment. While classifieds remain tough, there are more positive signs at the national advertising side, particularly with regards to the “i” acquisition.
Companies: Johnston Press
OnTheMarket (“OTM”) is the largest majority-agent owned UK Property Portal. In its previous form Agents' Mutual, its agents with Board membership included SpicerHaart, Savills, Knight Frank, KFH, Strutt & Parker and Chestertons. OTM recognises that Agents’ listings provide the content for Portals to monetise, and Agents are the main source of Portal income. In recent years Agents’ shareholdings in the two large Portals, Rightmove and Zoopla, have fallen, while their prices have risen sharply. Duopolistic* pricing and reduced agent ownership within the two leading portals create the conditions for the next stage of OTM’s growth. OTM offers agents competitive prices with benefits of “mutual” ownership supported by external capital to fund marketing and growth plans. This includes use of 36.4m shares to attract agents with over 5,000 offices.