The London-based hedge fund blasted Future’s portfolio of titles as “little more than a collection of generally low quality, often distinct and shrinking assets” and criticised its “self-serving management reward structure”.
Future, the publisher of titles including Classic Rock, What Hi-Fi, Total Film, FourFourTwo, Tom's Guide and Crackberry, was using acquisitions to mask a rate of organic revenue growth that was much weaker than the 11% figure shown in its accounts, ShadowFall said.
The FTSE 250 group in October acquired a batch of magazines including Country Life, Horse & Hound and Woman’s Weekly for £140mln.
ShadowFall, founded by former equity analyst Matthew Earl, said Future was acquiring assets at a price of less than two times sales, while the group itself was trading for nearer seven times its revenues.
ShadowFall Fund is short Future Plc— ShadowFall (@ShadowFallCR) January 31, 2020
Future (£FUTR) is valued at 6.8x 2019 sales. We calculate 79% of this was bought at 1.9x. Upon review, we believe that Future is a collection of generally low quality, often distinct & shrinking assets.https://t.co/efx15wkzfI
Future shares, which had skyrocketed more than 1,100% over the past three years to highs above 1,500p, dropped more than 15% on the day to finish on 1,280p.