Future returns to organic growth amid revenue diversification strategy
Future returned to organic growth in the second half of fiscal year 2024, the company reported in its full-year earnings results.
Total revenue for the specialist publisher was effectively flat year on year to £788.2m (compared with £788.9m in fiscal year 2023), with a marginal 1% organic revenue growth offset by adverse foreign exchange rates.
H2 saw organic revenue growth of 5%, driven primarily by a stronger performance in the UK, where organic revenue was up 6%. In the US, organic revenue fell 6%.
The results show an improvement from the first half of the year. Future’s half-year results, released in May, showed total revenue declining by 3% year on year to £391.5m.
Ad revenue ‘under pressure’
Breaking down UK revenue by division reveals growth was driven by Future’s ecommerce (+22% to £237.2m) and media (+13% to £316m, comprising websites and events) segments, while advertising (-9% to £78.8m) and magazines (-4% to £188m) were a comparative drag.
Future said digital ad revenue “remained under pressure but was stable”, falling by 16% in the UK.
Outgoing CEO Jon Steinberg highlighted the overall return to organic growth as an encouraging sign that the publisher’s growth acceleration strategy, announced in December 2023, is beginning to pay off.
It amounts to a two-year investment programme totalling £25-30m aimed at diversifying revenue and growing technology and gaming verticals. In 2024, Future added over 100 employees across sales, editorial and back office.
The investment did contribute to reduced profits, albeit in line with expectations. Total operating profit fell 23% year on year to £133.7m.
Steinberg commented: “We launched our growth acceleration strategy one year ago and have made good strategic progress. We have invested in sales and editorial roles, successfully diversified and grown revenue per user and we have further optimised our portfolio.
“Importantly, the group has returned to organic revenue growth during the year, underpinned by a strong H2 performance.”
He suggested that strong financial characteristics, such as a flexible cost base and a “highly cash-generative portfolio”, have created “further optionality and positions the business well”.
Diversified business
The core aims of Future’s growth strategy are to grow its audience and diversify revenue across its portfolio of over 200 specialist media brands. Future’s top titles include Marie Claire, PC Gamer, TechRadar, The Week and Who What Wear.
Future also alluded to the fact that its revenue has already become more diversified globally, primarily through the success of its price-comparison business GoCompare.
Go.Compare grew 28% year on year, driven by strong car insurance performance. Meanwhile, B2C revenue was flat and B2B revenue returned to modest organic growth (+2%).
Notably, revenue from vouchers grew 40% and now contribute £13m of total revenue, while branded content revenue jumped 9%.
In terms of user acquisitions, total online users “continued to stabilise” in H2, declining 6% across its portfolio to 226m. However, total online sessions went up by 2% and “off-platform users” grew to 250m, driven by an uptick in followers on Apple News and other social media accounts.
Accelerating growth
In a separate announcement, Future and ChatGPT developer OpenAI inked a partnership to bring Future’s portfolio to ChatGPT users via attribution and links to full Future articles when cited by the AI in response to relevant queries.
“Looking ahead, whilst we remain mindful of the macro environment and the ongoing evolution of the media landscape, we are confident that the ongoing execution of our growth acceleration strategy will drive long-term accelerating organic revenue growth,” concluded Steinberg.
Shares of Future jumped over 14% following the report. Year to date, Future’s stock has grown over 41%, although its share price is still down 72% from its pandemic-era peak in the summer of 2021.