Barclays thinks reports that Future PLC (LSE:FUTR) might be considering selling its B2B assets make sense.
The broker was commenting after a report on Sky suggesting Future was looking at disposing its B2B assets: Smartbrief and a few other elements like IT Pro, Music Week, Technology Leaders Summit and TV Tech.
The article suggested that Future has engaged an advisory firm to look at interest from potential bidders for these assets. And it said that the sale would involve “the majority, if not all, of Future’s B2B operations”.
Barclays said a sale of the units, which represent around 8% of revenue, would make sense as the fit with the rest of the group is not too clear and it could highlight value within the portfolio.
“Of course the degree to which this helps the story will all depend on the multiple achieved - if indeed they do look to sell,” the bank added.
“On calendar 2023 EV/EBITDA, Future is currently trading on 4.4x.”
“If they can raise a significantly higher multiple for these businesses, 1) that would indicate how cheap the rest is (and highlight the SOTP angle with GoCo also likely being worth a clearly higher multiple than the group, when looking at peers); and 2) if they were to use the cash for a buyback then the process would be accretive,” the bank suggested.
Future has been pressured by tough end markets, management transition and fears around artificial intelligence (AI), with the shares falling hard in 2023, Barclays explained.
“Anything that highlights that the Future portfolio is diversified and has some hidden value should be helpful,” it added.