Future Plc (FUTR)

FUTR has performed stupendously over the last 3-5 years, up about 40x from 2016 which is I believe about 10x better than the next best stock over that period (I forget where I saw this but assuming it’s true it’s really quite incredible). This could partly be attributed to trading at a booked out valuation before the current CEO, Zillah Byng-Thorne, took control and developed a successful new strategy.

Even after this phenomenal growth the stock still only trades at c.28x forward earnings which is remarkable when you think about it. What would the right valuation been to pay for this business 5 years ago I wonder?

Anyway, whats interesting today is whether ZBT can continue for another 5 years in the same vein. Her strategy seems to be acquiring online expert content websites (think product reviews) which can then be used to sell very effective and targeted advertising to related companies in that space. Knowing how to do this effectively and having the scale to develop expertise in this area seems to be key. At the same time there are loads of online content websites that don’t know how to monetize the eyeballs on their sites that are willing to sell out for what seem to be low multiple compared to the cashflow that FUTR can extract from them… So is it still cheap?

I saw it was a big position in a few successful funds and decided to bite the bullet and add a half position earlier in the year back in Feb since when it’s doubled so I clearly should have made it a full sized position at the time!

Now I’m wondering if I should make it a top 10 position… Is it a mini “future” Google/Alphabet hiding on the UK stock market, note GOOG is £1,300b Vs FUTR at £4b? (Please forgive the pun :slight_smile:

Thoughts/comments/wisdom from the crowd are all welcome. Steve

P.S. the share price chart looks pretty scary, which perhaps explains my half sizing back in Feb.

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Hi SteveA,

Yes, I also bagged on this one, but after an argument (with myself), I recently sold it.

Why? It’s inevitable at some point the market is going to ask me (via a dip) whether I believe in this share - and my answer is ‘I am unsure’ so I would undoubtedly sell (despite liking the share’s story). Maybe this is similar to your dilemma?

Return on invested capital has increased commendably over the past few years;

But how are these returns allocated to each individual share? Share dilution is running at a cringe-worthy 30% p.a. over the past 5 years, watering down enormous incremental returns. However there were still huge eps gains, post-dilution, which is much to the company’s credit.

I note broker forecasts are on an upward march - are they lemmings or have they truly spotted a pivot in the economy and a business which has a special competitive advantage? - I have no idea, but it is something to ponder.

The recent share price chart is really scary, as you say;

But the share price increase kind of make sense using a log graph (and why wouldn’t anyone use a log graph?);

For me, the strategy of issuing shares to fund acquisitions has scared me of - it doesn’t fit into my current share selection strategy.

Also there is the difference between reported earnings per share (eps) and company adjusted eps, which makes me uncomfortable (but the adjustments may be entirely justified);

As to whether FUTR is another GOOG, wouldn’t FUTR have to go use GOOG to advertise? (I haven’t spent any time researching this point so I may be wrong). If so, FUTR is one step removed from the ridiculously good economics of GOOG.

I think if you know how long their runway was i.e. current untapped websites, and whether there is significant competition (because this business may rely on scale), you could get to a more intelligent decision than me?

Should you presonally sell or increase? No idea :slight_smile:

Will I ever get a 100-bagger? Probably not but as long as most of my investable capital is not in cash and in quality companies then I am happy.

Good luck!



Couple other things to think about

  1. dependence on affiliate marketing commission as source of growth.
  2. recent growth spurt coming from digital marketing - will it last?
  3. Recent acquisition of GoCo - although it came with couple assets within their core, the main PCW business is way outside of what made them successful.

At the end of the day, it’s an investment that 100% depends on trust of management team, and with exponentially increasing size, the difficulty level of keeping it all together also increases exponentially.

Definitely a tough one.

disclosure: long, have done well with it, but considering selling as well.


I am a FUTR shareholder due to their share-funded acquisition of GoCo last year.

As one commentator here noted, the share dilution was something that put me off buying FUTR directly in the first place, alongside the increasing debt levels.

I’m also sure that the Goco acquisition is looking expensive now given recent soaring energy prices (see MONY share price in the last few months.)

But now that I’m on board, the cash generation metrics are actually quite good relative to the current market cap and so I’m happy to go along for the ride.

One thing perhaps worth adding. I worked under ZBT many years ago (and alongside the re-appointed CFO too). ZBT was by far the most impressive director I ever worked with and I’m not surprised to see how she’s turned FUTR’s prospects around. Not bad for someone who failed her Maths A-Level.

Let’s hope her run continues.


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Hi Abtan, thanks for the comments. Very interesting that you think so highly of ZBT. Explains why her backers were so happy to support her GOCO deal. I’m also impressed by the fcf generation and have decided to ride the position despite the vertiginous rise and see what happens. Her strategy seems to have plenty of repeat potential and as she gets better at leveraging each new asset and benefiting from economies of scale the fly wheel should continue… Steve

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Hi Ben, thanks also for your comments and apologies for the belated reply. I think the fcf data looks more compelling than the EPS and given the number of acquisitions it’s not too surprising there is a fair bit of one off costs. I feel there are lots of content assets that can be acquired at reasonable cost based of the evidence to date so the runway looks pretty long to me. Can return on tangible assets looks excellent so I think it ticks the quality box there. Cheers, Steve