Future PLC (LSE:FUTR) shares rose 7% to 309.5p on Thursday as Panmure Liberum reiterated its 'buy' recommendation and 500p price target following first-half results that the broker described as broadly in line with expectations.
Revenue of £349.1 million came in slightly behind Panmure Liberum's £353 million estimate, with EBITDA of £83.3 million also fractionally below its £84.3 million forecast.
On the broker's preferred measure of EBIT, however, Future was marginally ahead at £73.2 million against an estimate of £72.8 million, while diluted earnings per share of 46.4p beat the 43.5p forecast, helped by a larger-than-expected share buyback of £36.9 million.
Net debt of £314.1 million was significantly better than the broker's £332.3 million estimate despite the higher buyback, driven by a very strong working capital performance that delivered a £26 million inflow.
Panmure said a first look at the divisional picture was encouraging, with digital advertising showing signs of improvement and the magazines business also performing better, leaving the B2C division in reasonable shape against expectations.
E-commerce remains softer but is now a much smaller part of the mix.
Go.Compare came in slightly behind but the broker expects car insurance volumes to push the unit back into positive growth in the second half.
Audience metrics were weaker, with total digital audience down 9% to 525 million and website sessions falling 15% to 278 million.
The broker noted that Future's board intends to pause share buybacks and focus on reducing net debt in the second half, with a longer-term target of bringing leverage down to one times EBITDA from 1.6 times currently.
Panmure argued the stock trades on a very low valuation, with the publishing business implied at roughly one times enterprise value to EBIT once Go.Compare is stripped out at a comparable valuation to Moneysupermarket.