Specialist media group says performance remains on track, but analysts flag revenue pressure and earnings risk
Shares in Future PLC (LSE:FUTR) fell 4% to 491p in early trading on Thursday after the media group reaffirmed it is on course to meet full-year expectations, despite continued pressure across parts of its digital and comparison businesses.
The London-listed company reported broadly in-line performance for the four months to 31 January, with revenue trends expected to improve in the second half.
Direct digital advertising revenue rose year-on-year in both the UK and the United States, but programmatic advertising and e-commerce revenue remain challenged due to lower audience numbers. Print magazine sales continued to show resilience.
In its Go.Compare comparison unit, revenue declines are moderating in car insurance but remain tougher than expected in non-car categories. Profitability has been further affected by inflation in pay-per-click advertising costs.
The group relaunched its Renewal insurance app earlier this month.
Panmure Liberum, which rates the shares a buy with a price target of 1,800p, described the update as “broadly in-line” but noted pressures across revenue streams.
Analysts said audience softness, partly attributed to artificial intelligence search, was weighing on programmatic advertising, with total first-half digital advertising expected to decline by “at least a couple of points”.
E-commerce is forecast to fall by about 20%, while print magazines are seen declining around 3%, bringing the overall business-to-consumer media division down 5–6% in the first half.
Go.Compare is also expected to be down around 5%, while business-to-business media is forecast to decline by about 3% as performance improves in the second quarter.
Panmure Liberum warned that “given the revenue pressure and with some cost pressures in GoCo, consensus may well drift lower than guidance given the bias to H2 profit”.
Future said leverage in the first half would be higher than a year earlier, reflecting dividend payments, ongoing share buybacks and the acquisition of fashion and lifestyle publisher SheerLuxe. Approximately £5 million of a £30 million buyback programme has been completed.
Chief executive Kevin Li Ying said, “We are pleased to confirm we are on track to deliver a full-year performance in line with expectations.”
He added that the SheerLuxe deal was “highly complementary” and provided “multiple avenues to drive the platform effect”.
The group said it continued to review its portfolio and would return any excess cash to shareholders.