Shares in media group Future (FUTR) drifted marginally lower to £26.38 despite the company announcing two small bolt-on deals.
The firm announced the acquisitions of WhatCulture.com, a digital entertainment publisher, and data insight platform Waive.
From a strategic perspective, the market should be encouraged in particular by the acquisition of WhatCulture which will strengthen Future’s position in the increasingly important area of video.
ACQUSITION STRATEGY
The WhatCulture and Waive deals follow on from two deals announced in February last year.
These were Monzo, an Australian price comparison website which focuses on selling financial products, and GoCo group.
GoCo is the parent company of insurance firm Go Compare. The deal also brings discount platform MyVoucherCodes and energy saving service Look After My Bills under its portfolio.
This forms part of Future’s strategy to enhance its e-commerce and financial services capabilities.
ENHANCED POSITION IN VIDEO
WhatCulture is a good strategic acquisition for Future given its strong video capabilities with 11 You Tube channels and eight million subscribers. This provides another venue for Future Studios to inject its expertise.
Critically, video ads are more lucrative and can produce four times as much traffic as display ads. This deal also further diversifies Future in the American market where WhatCulture derives 70% of its revenues.
The acquisition of Waive will bolster the group’s data platform and data science capabilities. This is becoming an increasingly important driver of content monetization across multiple platforms.
According to Peel Hunt media analyst Jessica Pok, ‘the deals today show that Future continues to look for bolt-on-deals that are complementary to its portfolio. Video is one of the key focuses of the group moving forward.
'With the recent weakness in the share price, the shares are now trading on a forward price earnings ratio of 16x, down from 30x at the peak of last year. Our Buy case remains intact with a 4500p target price.’
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