The Week publisher eyes newspaper takeovers as shares hit new high

Asia's Tech News Daily

Zillah Byng-Thorne, chief executive of The Week publisher Future – David Rose

The magazine publisher behind The Week is considering newspaper takeovers, after its latest profits blow-out briefly made it the most valuable listed media owner in the country.

Future chief executive Zillah Byng Thorne pointed to The New York Times' $30m (£22.5m) deal for the product review business Wirecutter as an example of an “interesting play '' that chimed with its own strategy.

The merger in 2016 married a website guiding readers towards buying products from online retailers with a 170-year-old news brand, which is shifting from a dependency on printed newspapers to an online business with more than 7m digital subscribers.

Ms Byng Thorne said: “We have thought about [acquiring a newspaper business]. If you had asked me this question five years ago I would have said absolutely no, but life has taught me to not rule out anything.

“If you look at the New York Times, it bought the Wirecutter, so it had a convergence into specialist media. If you think about the combination and benefits of that, then there are some interesting plays there.”

Future has been snapping up magazines, websites and price comparison firms and re-focusing them as online titles funded by advertising and e-commerce referral revenues, which account for most of its turnover.

Titles such as TechRadar review products and earn a fee for referring readers to Amazon and other retailers. Strong growth meant next year's results will be “materially above current expectations”, Future said, prompting shares to rise as high as 17pc to 3,744p.

The move increased its stock market value to £4.7bn, putting it ahead of Britain's biggest commercial broadcaster ITV at £4.4bn.

Future fell back slightly towards the end of the day to finish up 13pc and ITV made up some lost ground, restoring the pecking order.

Nevertheless, the publisher’s extraordinary resurgence nevertheless leaves it in sight of a place in the FTSE 100 only seven years after it underwent drastic restructuring and its survival was in question.

Ms Byng Thorne suggested Future could move into the news business after pre-tax profits more than doubled to £108m. Turnover increased by 79pc to £607m for the year to September after digital advertising and e-commerce sales expanded by 27pc and 37pc respectively.

Ms Byng Thorne has diversified Future this year, acquiring the price comparison site Go Compare for £594m. She also pushed into digital subscriptions by spending more than £300m on The Week owner Dennis Publishing.

“What we have highlighted on the advertising side of our business is the quality of our audience,” she added.

“Because we have people who are in the market with intent, we find that advertisers are much more happy to advertise alongside our brands.”

“The investments we have made […] mean we have got really good quality first party data. That allows us then to segment the audience down to the people advertisers most want to meet and that is what has been driving the yield expansion in the advertising portfolio.”

However, Future was forced to book a £4.4m charge after writing down the value of the price comparison website Look After My Bill following a string of energy company collapses.

Bulb, the UK's seventh largest supplier, was among 20 energy firms, which have run out of money due to soaring wholesale costs.

“The very unusual situation in the UK around the energy market means we would be doing a disservice to our customers if we switched them to anything right now,” Ms Byng Thorne added. “So we have switched off Look After My Bill for the time being and switched off price comparison for energy on Go Compare.”

Jessica Pok, the Peel Hunt analyst, said it was increasing its estimates for next year's operating profits by 12pc as it expects “strong momentum in its business and good management on driving margins”.

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