Prelim headlines
Future guided at its 4th October trading update that FY21 results would come in at the top end of the AOP range at the time (£183.5m - £193.6m) - today the company has reported revenue of £606.8m (INVe £602.9m) and AOP of £195.8m (INVe £191.2m), 1.3% above the top of the range. In addition, the group now expects FY22 to be materially ahead of current expectations, with growth accelerating in the second half. There is no specific commentary yet around Black Friday.
Detail
Group organic revenue growth in FY21 was at 23%, with the US at 27% and the UK at 17%. The company has flagged increased quality of earnings through revenue mix and the platform effect as drivers of the improved AOP margin (32% versus FY20 at 28%). Adjusted free cash flow represents 102% of AOP, with leverage at 0.8x (1.9x post Dennis) and a dividend of 2.8p per share. Media organic growth was 27% driven by strong digital ads and eComm, with continued growth in direct campaigns driving digital ads organic growth of 27% and improved commission rate and conversion in H2 driving eComm growth of 36%. The group also flagged strong performance at GoCo (seeing higher conversion and stronger SEO) and MyVoucherCodes (+60%) and that TI Media has seen strong online user growth (+16%) with digital ads and eComm up 38% versus the pro-forma, with an acceleration in H2 to 60%. Investment in the platform continues at pace, with 130 new roles created during the year in tech and editorial. The group has decided to change the model of the LAMB business, no longer to be an autoswitching proposition, now an “autoquote” proposition, with the group taking an impairment of £8.8m.
Our View
This is a very strong performance from Future, with broad based growth across “legacy” Future, TI Media and GoCo. Within the key Media segment, organic growth of 27% in digital ads and 36% in eComm is particularly encouraging, with the group emphasising the successful integration of recent acquisitions. The change to the LAMB model is noteworthy and we expect to hear more the company on this during the call this morning.
