Future has plenty more to offer after exceptional interim results, says Berenberg

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Future PLC (LON:FUTR) has plenty more to go after its “exceptional” half-year results, said Berenberg.


Analysts gave the target price a huge upgrade, to 3,140p from 2,600p previously, as the media group delivered figures well above expectations.


READ: Future profits double in record half-year results


The FTSE 250 group, which remains a ‘buy’, posted growth of 89% and 125% in sales and underlying earnings (EBIT) respectively.


The broker raised estimates for EBIT by 15% to GBP175mln in 2021 and by 10% to GBP204mln in 2022, which includes upgraded synergy guidance for GoCompare owner GoCo to GBP15mln from GBP10mln.


Analysts believe management will soon upgrade GoCo sales and margin guidance because of leveraging Future inventory and its first-party data versus third-party display ads, collaborative product launches between Mozo and GoCo, improving SEO and the launch of a new Personal & Home Wealth vertical, which will create a dedicated content flywheel for GoCo.


Future also reported a 19% increase in direct advertising campaigns, which has led to a 34% increase in display yields as it continues to drive clients up the advertising funnel.


“With direct advertising only accounting for 20% of inventory, but 40% of sales due to the higher yield, this remains a very large opportunity,” Berenberg said.


“The shift up the advertising funnel will likely be accelerated by the tightening privacy restrictions from Google and Apple, which make Future’s large publishing network, endemic audience and pool of first-party data increasingly valuable.”


Organic magazine revenues, instead, tumbled 15% compared to the first half last year, but analysts said they should improve as lockdown restrictions lift in the UK.


Shares jumped by a tenth to 2,904p on Thursday at noon.

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