Future H1 2026 Earnings Report

Future EPS Results

• Actual EPS: GBX 13.10
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Future Revenue Results

• Actual Revenue: $349.10 million
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Future Announcement Details

• Quarter: H1 2026
• Date: 5/14/2026
• Time: Before Market Opens
• Conference Call Date: Thursday, May 14, 2026
• Conference Call Time: 3:00AM ET

Future (LON:FUTR) is a global platform for specialist media underpinned by proprietary technology, enabled by data; with diversified revenue streams

Future H1 2026 Earnings Call Transcript

Key Takeaways

• Negative Sentiment: Revenue fell 8% reported to GBP 349 million, with organic revenue down 6% as the company continued to feel the impact of search ecosystem changes, especially in its B2C business.
• Neutral Sentiment: Mix shift pressured margins, with EBITDA of GBP 83 million at a 24% margin and gross margin down to 71% from a heavier mix of lower-margin revenue streams.
• Positive Sentiment: Direct advertising grew 8% in H1 and was up double digits in Q2 in both the U.S. and U.K., helping offset declines in programmatic ads and demonstrating traction from new monetization efforts.
• Negative Sentiment: E-commerce declined 24% due to lower website sessions, particularly in technology content, highlighting continued pressure from reduced search traffic and changing consumer journeys.
• Positive Sentiment: Cash generation remained strong, with GBP 91 million of adjusted free cash flow after capex and leverage at 1.6x despite shareholder returns and the SheerLuxe acquisition.
• Positive Sentiment: Management reiterated FY 2026 guidance for a mid-single-digit organic revenue decline, EBITDA margin of 25%-27%, and strong cash conversion, while emphasizing growth initiatives like Future Optic, Helix, Renewal, and data products.

Presentation

[Kevin Li Ying, CEO at Future]

Good morning, and thank you for joining us. I will start with some opening remarks, then hand over to Sharjil, who will cover the half year results, and then I will update you on our strategic progress. Let's start with opening remarks. The search ecosystem is changing. We have been very open about it. However, this is only 16% of our total revenue. Focusing on the things that are in our control, our growth initiatives, only launched 7 months ago, are yielding new growing revenue geared to offset the decline in the 16%. This momentum is paving the way for organic growth.

[Kevin Li Ying, CEO at Future]

Finally, core to our strategy, we are evolving our business model at pace, streamlining our business, making decision faster, including killing projects that are not delivering. Of course, we also double down on the ones that are. We do this to reflect the changing market dynamics while preserving our unique capability to drive effective monetization to deliver sustainable profit and, most importantly, cash. With that, let me hand it over to Sharjeel.

[Sharjeel Suleman, CFO at Future]

Thanks, Kevin. Good morning, everyone. Let's get straight into the numbers. Revenue at GBP 349 million was down 8% year-on-year on a reported basis, with organic performance down 6% as previously communicated. Our EBITDA of GBP 83 million at a 24% margin reflects the change in revenue mix that we highlighted in the pre-close trading update. Adjusted EPS is lower, in line with that reduction in profit, with the benefit of our share buybacks offset by the expected higher depreciation and financing costs. The group continued to generate good cash conversion at 109% of EBITDA, and the balance sheet remains in good shape with leverage at 1.6x after having returned GBP 53 million to shareholders in this half and acquired SheerLuxe in the period as well. On to revenue.

[Sharjeel Suleman, CFO at Future]

Overall, the group's organic revenue declined by 6% during the half year, with similar declines across different divisions. As I mentioned at the pre-close, overall revenues in half year were in line with expectations, but the revenue mix within B2C has been different to what we planned for, with decline in higher margin revenues offset by lower margin ones. There is a lot going on, so let's get into the detail of each division. Starting with B2C. Note that the full B2C revenue breakdown is in the appendix. I know many of you enjoy the detail, so it's there for reference. Firstly, website sessions, which impact around 16% of the group's revenue.

[Sharjeel Suleman, CFO at Future]

These were down 15% during the first half, mainly due to the year-on-year increase in AI Overviews, which was anticipated, and these are now more stable at around 65% of our keywords, changes on Google Search, with organic results now appearing much further down the page, and the recent algo updates, for example, the first ever Discover algo in February. These trends had a direct impact on programmatic ads and e-commerce. Programmatic was -17, so about the same decline in sessions. However, there was good demand on direct advertising side. Direct grew at +8% during the half with a very strong Q2, both in the U.S. and the U.K., growing double digit. This is where we see the benefits of our strategic focus across brands, monetizations, and innovation coming through.

[Sharjeel Suleman, CFO at Future]

Our branded content deals are performing well with solid commercial execution across a range of clients, and we are winning clients. Our wider audiences and distinctive products such as Future Optic and Helix are opening new doors. Remember, direct is twice the size of programmatic and comes with higher pricing. When you add them together, total advertising declined 3%. Moving on to e-commerce. In H1, we saw e-commerce decline 24%, which is similar to the decrease we saw in H2. This was driven by lower sessions impacting the number of unique page views, especially on our high value technology reviews and buying guides, which is where most of our revenues come from. Basket size has remained flat year-on-year with inflation offset by less high value purchases. We have been actioning a number of growth initiatives in this area, Kevin will give more color.

[Sharjeel Suleman, CFO at Future]

Last but not least, magazines. Magazines have performed better than expectations at -4% overall. It is worth highlighting that subscriptions were flat in the first half of the year. Our initiatives in this area around subscriber acquisition and retention are now coming through in the financials. News trade remains negative as we continue to see changes on the high street. Worth noting that excluding Dennis books, the magazines were overall down just 1% in the first half. This resilient performance demonstrates the strength and value of our premium and specialist brands, and we see this improvement as being sustainable. Moving on to Go.Compare. At circa GBP 90 million, this represents a quarter of the group's revenues. Car insurance revenue was down -5% in the period, reflecting declines in the total quote volumes in switching as insurance premiums came down.

[Sharjeel Suleman, CFO at Future]

However, this was partially offset by improved conversion when users came to the site. In March, we saw the car market return to growth, and this helped Q2 for car to be flat in the period, a sign that the trends over the past 12 months are now starting to reverse. Home insurance declined in this period and has remained challenging. Homes is around 6-9 months behind the car market in terms of behavior, so we anticipate this revenue trend to change in the coming months. Renewal was launched in February to good reviews. Our aim with Renewal is to increase yearly retention rates and therefore reduce our customer acquisition costs going forward. It is still very early days, and we were using our Go.Compare database to drive more users, as well as developing new features and incentives on the app.

[Sharjeel Suleman, CFO at Future]

This is only one of the growth initiatives underway in price comparison. Again, more on this from Kevin later. Turning to B2B on slide 10. This represents 7% of the group with GBP 24 million of revenue. At the full year, I noted the improving trends in B2B as a result of our strategic progress, and we can see that in our Q2 performance. There are different trends across end market verticals with clients in tech, food and infrastructure spending more. However, other verticals have been less active, such as education, which has seen changes in U.S. government funding. Despite those market segment movements, the business has benefited from progress on a number of strategic areas. We have unified our data, and this is helping us launch innovative commercial products that help solve our client problems.

[Sharjeel Suleman, CFO at Future]

We now have unified go-to-market approach with the commercial team selling combined packages, driving operating leverage. We are reaching more audiences that make our key decisions for our clients products. We are also winning in AI with the commercial team selling Future Optic to our B2B clients. I wanted to highlight that Q2 was down -2% with the business growing in March and the exit rate remains positive. Turning to slide 11, which highlights our P&L. I've already covered the main drivers on revenue and margins, but let me bring these together with a P&L. The group's gross margin of 71% is down 2 percentage points. The reduction reflects our change in revenue mix. In B2C, programmatic and e-commerce revenues are high margin and have minimal cost impact either way.

[Sharjeel Suleman, CFO at Future]

Direct revenues grew strongly. These have cost of sales to deliver the creative that is attached to those deals. Magazines did better than expected. Again are at a lower margin. In Go.Compare, we saw an increase in our PPC costs driven by two things. Firstly, double-digit inflation from the Google auction, but we also had relatively more volume of paid clicks as compared to organic search clicks, with Google using more space to monetize shopping and sponsored links. Combined sales, marketing and editorial and other costs were flat, higher as a result of annual pay increase and general inflation, offset by efficiency savings across the group. On the topic of efficiencies, we will deliver our GBP 5 million target for the year with savings coming across the group. We are focused on shaping the business differently and also using technology to automate our processes.

[Sharjeel Suleman, CFO at Future]

We are on track to achieve GBP 20 million by FY 2028. Right. Onto cash. As I said when I joined and every result since, cash is my favorite topic. Future continued its strong cash performance. We generated GBP 91 million in adjusted free cash flow after CapEx. Including tax, interest, exceptionals, Future had a net cash generation of around GBP 55 million in the first half. We applied our capital allocation framework, spending GBP 40 million to acquire a fast growing and platform agnostic brand in SheerLuxe. We returned GBP 53 million to shareholders through the dividend and share buybacks. After these, the group saw an increase in net debt to GBP 314 million, representing a leverage of 1.6x.

[Sharjeel Suleman, CFO at Future]

Our cash generation is always strong in the second half. We will use it to pay a top up on the SheerLuxe acquisition due to its outperformance, finish our current 5th share buyback and reduce our overall net debt position. Going forward, cash conversion is expected to remain strong. Remember, a large part of the group is not impacted by the changes in the search ecosystem. These businesses, such as direct advertising, subscription and news trade magazines, Go.Compare and B2B all generate high levels of cash. We will use that cash generation to delever down to the 1x floor. The group has committed facilities in place till 2029 and 2030. We have plenty of liquidity to execute our strategy, which is a good segue to capital allocation. Our capital allocation is unchanged.

[Sharjeel Suleman, CFO at Future]

A balanced allocation that will invest in and drive organic revenue growth, have room for bolt-ons to accelerate the strategy, a more consistent return for shareholders through our annual dividend and return excess cash to shareholders via buybacks. All of these engines were in operational in the first half of the year. We will continue with this balanced allocation while maintaining a conservative and prudent approach to leverage. One final point before I move to the outlook. As the board highlighted, our group is fundamentally undervalued. We are actively progressing options to realize value for shareholders from brands or assets that do not drive our strategy. I wanted to note that we are very focused on creating value, and I look forward to updating you when I can share more specific information. Finally, turning to the outlook slides. Our outlook for the year remains the same as the pre-close update.

[Sharjeel Suleman, CFO at Future]

We expect FY 2026 organic revenues to be mid-single-digit decline. Declines in programmatic and e-commerce will be offset by good growth from our initiatives across the business, particularly in direct advertising. In terms of margins, we are looking at 25%-27% in EBITDA terms. As always, the group will continue to generate strong cash flows with the EBITDA conversion to around 90%. That cash will lower our overall net debt position at the year-end, with leverage to be in line with consensus at around 1.6-1.7 times. Leverage will start to reduce to the one-time floor. In the medium term, we are confident in achieving our ambition of sustainable revenue growth and cash generation. I will hand over to Kevin, who will take you through our strategy and the momentum we are building to achieve that. Thank you.

[Kevin Li Ying, CEO at Future]

Thank you, Sharjeel. Before I dive into the strategic progress, I just want to spend a few minutes with a brief reminder of our strategy. I know that Future can seem like a complex business. At the core it is very simple. It all starts with brands and their content, which drives valuable audiences that we monetize effectively through existing and new products. This operating model applies to all of our brands. We create the platform effect by leveraging products and data across those brands. This is unique to us and our scalability is hard to replicate. Starting with brands and content, we are very clear where our value resides. We have market leading brands across many verticals. Our human originated content is valuable for our audiences wherever they are.

[Kevin Li Ying, CEO at Future]

We know that they can exist and be monetized successfully on multiple platforms, and we have this today already in our portfolio. We have been and continue to be immensely successful at monetizing our content. As you are all aware, some of our existing monetization paths, 16% of our revenue are being disrupted by changes to the search market. We are therefore building new monetization routes to be equally successful in this new era. To do this, we need to continue to innovate, bring new products to market, leverage AI to create new revenue streams, we are, and accelerate our pace of change. It is in our DNA. The value of our rich first party data is invaluable also, we are far from leveraging its full potential. Our third strategic pillar is efficiency, Sharjil has mentioned our focus on driving it throughout the business.

[Kevin Li Ying, CEO at Future]

Again, this is in our DNA. Taking a step back on brands and content. AI is transforming the way people are engaging with content. We know that. This is so critical to understand. In a world flooded with information, trust and expertise in content and brands are more important than ever. This is where we play and where we've always played. AI slop does not make money. Our content is human originated, meaning it is authentic, unique and curated, and something that AI cannot replicate, demonstrating taste and opinion. Our right to win lies with the expertise of our editorial and creative teams in generating this type of content, and with the trust our brand commands. If you read a review on Tom's Guide, you know editors have properly and thoroughly tested the product and that they are giving you their independent expert view.

[Kevin Li Ying, CEO at Future]

It is about being channel agnostic. We are moving at pace to get our brands to reach where people are. Why? Simply, the way people consume content is changing, our distribution channels are evolving too. It is a must. We are no longer just a magazine publisher. We are no longer just a website owner. Our legacy model, which is still highly valuable, was largely about audiences being pushed to us by being excellent at SEO. Today, it is about audiences coming to us on different mediums through the power of our market leading brands. You can see on the right-hand side of this slide, we are everywhere from social to apps, AI, LLMs, down to podcasts, and we would expect this wheel to expand as new channels emerge. Our second pillar is monetization.

[Kevin Li Ying, CEO at Future]

Our track record is one of effective monetization where we playbook a revenue stream and apply it to our entire portfolio. This mindset is unchanged. You can see the multiple revenue streams we have today. I just wanted to highlight two of them. In advertising, we are excellent at monetizing on our sites programmatically and directly. However, there are areas of digital advertising where we don't play at scale, such as video and the creator economy, and these are growing fast. This is a clear opportunity and we have initiatives already underway. Not only are we pivoting into higher growth markets, but we are also looking to outperform them. In print, we have now established a consistent track record of outperforming the magazine markets by focusing on brands, effective pricing, and central to all of this, the customer value proposition.

[Kevin Li Ying, CEO at Future]

While I will not go into detail on this today, I wanted to remind you how valuable repeatable revenue streams that can pass through inflation are. This is what we have in subscriptions. This wheel is not static. It will continue to evolve, especially as we are about to add data products as a revenue line, and more on this later. Operating in high growth markets combined with outperforming in declining markets drives an overall attractive growth prospect for the group. Bringing it all together is our execution roadmap to deliver on our strategy following our three pillars of brands and content, monetization, and efficiency. As you can see, since we launched last September, which is seven months ago, we have made significant progress. These strategic initiatives that are now ramping up, there is momentum, and it is contributing to our PNL already.

[Kevin Li Ying, CEO at Future]

Starting with brands and content. Brand transformation is critical to our future success, and we continue to drive these strategic initiatives forward at pace. As I highlighted earlier, our objective is for our brands to thrive across multiple channels, well beyond just print or tech space websites. We segment our brands to ensure we focus resources by prioritizing the brands where it drives results at scale and more quickly, give teams clarity and focus on how their brands are managed, transform at pace by building a transferable brand playbook that we refine at each transformation. We have segmented our portfolio into four categories. In the half, we have already seen brands moving from category to another, so this is already happening, and we are seeing traction. Let's take them each in turn. Destination brands. These are growth brands whose content exists and is found by audiences across multiple channels.

[Kevin Li Ying, CEO at Future]

The majority of their revenue is driven by direct high-value advertising and e-commerce. We have brands in transition. These are brands that are well advanced in their transformation, demonstrating green shoots. We have non-diversified brands. The majority of their audience and revenue are tied to Google or to print. These brands require a pivot to a channel-agnostic approach, moving them to the categories above in stages. Finally, portfolio brands. Simply put, these profitable brands run for cash to fund growth elsewhere. They are run extremely well, some outperforming their own market. This is not a static category. We have the example of Decanter. A former portfolio brand has now new routes for both profitable growth by driving world-leading events and subscription. This is art, not science.

[Kevin Li Ying, CEO at Future]

Whilst we have a playbook, each brand is different and has a different audience makeup, and therefore transition time will vary from 1 to another. Our North Star is to make our brands destination brands, period. Let me give you some proof points. Starting with non-diversified brands, taking the example of the tech vertical and noting that not all tech brands are at the same level of transition. However, stepping back from this, and at its core, this category of brands has tremendous value, as exemplified by Tom's Guide, which is reaching over 30 million sessions a month. More broadly, our tech brands are trusted with significant reach and scale providing expert content. Technology is central to our lives. It is no longer just for the geeks, reinforcing the purpose of their content. Now it is about bringing new content formats to Tom's Guide and monetizing them effectively.

[Kevin Li Ying, CEO at Future]

Turning to brands in transition, using the example of Kiplinger, which I talked about at our results in December, it has been transforming in the past 12 months and is firmly on its way to becoming a destination brand. A big driver of the change is a revised proposition aligned with how consumers access content as well as diversifying its audience targets. This has resulted in the production of multi-channel content, such as driving Apple News as a channel, bringing 800,000 users through Collab, and finally leveraging the Kwizly acquisition to drive engagement through quizzes and puzzles. This repositioning is paying off. Kiplinger is in growth overall despite being print-heavy. It grew email revenue by 33% in the half, this brand is largely non-Google, with almost 90% of its audience coming directly on multiple channels.

[Kevin Li Ying, CEO at Future]

Finally, taking the example of Who What Wear, which reaches 27 million valuable users a month. It is a digital-only brand, it is continuing to grow its social reach by 3%, adding another 3% in the half. How Who What Wear monetizes is the epitome of a destination brand with over 90% of its ads and e-commerce revenue coming directly to us. This is where the magic happens as advertisers buy brands, this allows us to justify a premium pricing. Most importantly, destination brands operate in highly attractive markets with social advertising growing at about 30% and the creator economy spend at about 25%. For avoidance of doubt, SheerLuxe, which we bought earlier this year, is a destination brand. We are learning from SheerLuxe, which is powering our playbook to transition other brands and reinforce our leadership in fashion and beauty.

[Kevin Li Ying, CEO at Future]

Turning next to the second pillar of our strategy, Monetization. As I mentioned earlier, our monetization wheel is effective, we need to diversify how we earn revenue today, given the headwinds in programmatic and e-commerce revenue. It is about becoming a destination for advertisers through 360 sales, including making money from AI, driving e-commerce across channels, and driving revenue from data products. Not all of these are at the same level of maturity. This allows us to deliver today while also building for tomorrow, making our business sustainable. You might remember Future Optic from our full year results in December. To recap, the problem we are trying to solve here is a shift in the audience. Our brands and our customers are looking for visibility in large language models or LLMs.

[Kevin Li Ying, CEO at Future]

What we are doing here is making our content as visible to LLMs as it is in conventional search. The fact that we are leaders in SEO, combined with the trust and authority of our brands, gives us a competitive advantage. We are leaders in visibility at scale. We are not just choosing the metrics that suit us. External data is saying it. Not only are we relevant at scale, we are the second largest publisher across AI platforms and number one in ChatGPT. We are extremely relevant in our high intent categories. For example, Who What Wear is the most visible fashion and beauty brands in AI according to Similarweb. Just like ranking is important in SEO, visibility is important in LLMs. Not only are we visible as a reminder, we are leaders and that visibility is monetizable.

[Kevin Li Ying, CEO at Future]

We transform this knowledge into a bespoke advertising package for our clients, which is renewable because they need to remain visible in this new ecosystem. Since last December, this pipeline has grown and generated GBP 2 million in the half with more booked in H2. We are on track to deliver GBP 10 million for the full year. This is contributing to our growth in direct advertising. Catching up to this competitive advantage can be hard. Combined with our tech stack first to market position, brand trust and authority, we are creating a moat. Future Optic is not the only digital advertising innovation we are bringing to the table. Our first data product, Helix, was launched in March this year. It is already being sold. Designed to transform billions of intent data signals into well-defined, well-known audiences that advertisers would pay a premium to reach and advertise to.

[Kevin Li Ying, CEO at Future]

Simply put, it is a high yield precision ad targeting solution, helping our advertising clients solve their ROI problems. Its performance has been more than satisfactory since launch in March this year. We see a 21% increase in click through rates compared to non-Helix advertising ad impressions. This is quite exciting. Secondly, we are also thinking differently. We're now combining Helix and Optic into an advertising bundle solution, becoming a go-to destination for advertisers to reach a high intent consumer base across channels. Finally, I would like to briefly cover a nascent key initiative. We are driving data products. These are early days. This is high growth, high margin revenue streams geared towards solving client problems, whether they are retailers or platform businesses. This allows us to expand our addressable markets, creating an attractive growth opportunity.

[Kevin Li Ying, CEO at Future]

We're not leveraging our data to its full potential today, limiting it to advertising clients. Watch this space. More to come. We have been open about the challenges in e-commerce, but we are not standing still. We are driving initiatives to pivot this revenue stream. Future has been immensely successful at monetizing buying guides on web pages. We continue to optimize this revenue stream, but this is not enough. We are adding new channels to drive e-commerce revenue. We are reimagining our e-commerce model by building new audiences and disrupting the new purchase journeys. Just like we want our content to be channel agnostic, we want our e-commerce proposition to be channel agnostic too. We have many initiatives live, so let me cover one initiative here. AI shopping with Who What Wear ChatGPT app to facilitate fashion and beauty shopping.

[Kevin Li Ying, CEO at Future]

I told you our strategy is about being where audiences are. Consumers increasingly turn to AI LLMs for recommendation, but not any recommendation, the trusted unbiased opinion, and we are there. These are the first of many, and in true Future fashion, we are building a playbook, becoming sharper and more effective at each iteration, deploying them where they drive outcomes. So far, I have been focusing on the B2C brands. Let me spend a bit of time on one of our biggest brand, Go.Compare. I want to showcase how we are driving growth and transforming it into a brand destination. Let me remind you of the value of the brand through its barriers to entry and why we think AI is not the threat that you may think it is. First, it is an FCA regulated entity abiding by Consumer Duty.

[Kevin Li Ying, CEO at Future]

Second, to compare insurance policies, you need relationships with insurers to act as a go-between for consumers and insurers. Relationship we have built over 20 years. Third, we are very transparent and hold to very strict standards when it comes to consumer data. This drives brand trust. Now, these are not easily replicable, reinforcing the Go.Compare moat. Now, you might recognize the consumer funnel on the left-hand side of this slide. The name of the game, as mentioned before, is to drive efficient acquisition, conversion and retention. Any initiative we drive is to improve one of these metrics. On the right-hand side of the slide, you can see the pipeline of activities from relaunching Renewal to launching our first ChatGPT app and also launching Signal on Go.Compare website.

[Kevin Li Ying, CEO at Future]

We continuously leverage our technology to drive innovation with the clear intent and purpose of becoming a winner in agentic AI further down the line. The first version of our ChatGPT Go.Compare app has now launched. We view this as a new potential acquisition channel. It is important to acknowledge two things here. First, we will not compromise on regulation. This is a moat in insurance and one that is crucial to protecting consumers. Two, our aim is to lay strong foundation, to deliver continuous innovation at pace. To do that, we need to build a strong AI infrastructure that talks to AI. Now we are excited about what we have brewing here. Finally, I wanted to showcase today what we are doing to drive new revenue by adding a spoke to the Go.Compare monetization wheel. Consumers are increasingly looking for savings given the current backdrop.

[Kevin Li Ying, CEO at Future]

This is why they come to Go.Compare in the first place. Given the cost of customer acquisition, we are looking to increase the return on this by adding a secondary revenue stream leveraging Signal, one of our strategic initiatives, with our product reviews from our B2C brands and our AI capabilities to offer consumers an easy product price comparison on Go.Compare. Finally, to wrap up, we have a clear plan and we are focused on executing it. We're driving our brand and content strategy through our brand transformation to reach audiences wherever they are. We are driving our monetization strategy, adding new and evolving existing revenue streams, and we are doing so in an efficient and financially disciplined way. Momentum is building, and we're creating our path back to organic growth. Thank you for listening. We will now open the call for questions. Operator?

[Operator]

Please signal by pressing star one. If you wish to counsel your request please press star two. The first question is from Nick Dempsey from Barclays. Please go ahead.

[Nick Dempsey, Analyst at Barclays]

Yeah. Good morning, guys.

[Kevin Li Ying, CEO at Future]

Good morning.

[Nick Dempsey, Analyst at Barclays]

One question. You showed us back at the full year results that Google Discover was a really important source of your traffic. You referred to the algorithm change for that. It kind of makes sense to me that Google Discover should be a place where your content is surfaced well because people are interested in cycling your content. You dominate cycling. Your cycling content should turn up in Google Discover. In your discussions with them, what have you learned about why Google Discover seems to be impacting your traffic and other people's traffic as a result of the algorithm? Is there hope that that can change so that we can get a benefit from that coming months?

[Kevin Li Ying, CEO at Future]

Thank you, Nick, for your question, and good to have you on the call. With regards to Google Discover, it's as Sharjeel mentioned, right, we've had the Google Discover first time algo update back in February. In true Future traditional fashion, we are reactive to it. We optimize and understand what works, what doesn't actually work, and then refine from there going forward, 1. Number 2 is it is worth reminding that our performance in Google Discover is down to what the consumers needs and wants to fulfill their purpose and their passion. In those brands that you've highlighted, they meet that requirement.

[Sharjeel Suleman, CFO at Future]

Yeah.

[Kevin Li Ying, CEO at Future]

thank you, Sharjeel.

[Sharjeel Suleman, CFO at Future]

Yeah. Nick, you know, it was the very first algo update in Google Discover, and like all other algo updates, even the core search, you learn what's changed and you adapt, just as Kevin just said.

[Kevin Li Ying, CEO at Future]

Right.

[Sharjeel Suleman, CFO at Future]

Things we noticed this time, there was more links to YouTube and X.

[Kevin Li Ying, CEO at Future]

X

[Sharjeel Suleman, CFO at Future]

In this particular one, there's now a bit of advertising on Discover.

[Kevin Li Ying, CEO at Future]

Right.

[Sharjeel Suleman, CFO at Future]

That's a new feature as well. When you scroll down you'll see advertising in there as well. Overall, it still performs very well for us. While it is a bit more volatile and we saw some loss in February after the algo update, it remains a good one. In terms of percentages, you know, the pie I showed last time, that's pretty much still the same as it was previously.

[Nick Dempsey, Analyst at Barclays]

Okay. Thank you, guys.

[Kevin Li Ying, CEO at Future]

Thank you.

[Operator]

Our next question is from Jessica Pok from Peel Hunt. Please go ahead.

[Jessica Pok, Analyst at Peel Hunt]

Hi. Good morning. Can you hear me okay?

[Kevin Li Ying, CEO at Future]

Good morning. We can hear you.

[Jessica Pok, Analyst at Peel Hunt]

Yeah. Great. Thank you. I've got 3, please. The first one is just on the brands in transition. I mean, can you give us an idea of, you know, within this bunch, you know, how much of the revenues are generated from direct now? I guess when you look at the transition, how quickly do you think these brands can transition and go into the kind of upper tier? The second one is just on the non-diversified brands. I know you're kind of looking at that and, you know, plan long-term but, you know, for this set of titles or assets, can we expect that there's probably more than one route for it?

[Jessica Pok, Analyst at Peel Hunt]

I.e., you know, could they move down to just the cash generators and, you know, over the longer term, you know, if you see opportunity, could they be sold off even if they kind of fail further, that could they be disposed, or closed? The final one is just on data as a product. Can you just give us a glimpse or an example as to, you know, how this would work? I mean, what kind of data would you provide to, for example, a retailer? Thank you.

[Kevin Li Ying, CEO at Future]

Yeah. Thank you. Thank you, Jessica, for your question. Good having you on the call. First thing on brand transition, right? It's worth reminding, as I said in my presentation, that we are moving at pace to move them up, right? Number one. Number two is every brand is different. Why? Because, A, their audience is different. Two, B, their market is different. Then, three, the clients can also be different. As I said, it is an art, not a science. However, our focus, Sharjeel and I and the rest of the company, is to focus on execution and delivery, moving at pace, ensuring that we take learnings as we go, and over time we shall be moving that up.

[Kevin Li Ying, CEO at Future]

If you look at the slides that I presented, is that we have made more than suitable progress since FY 2025 in shifting across these brands up. With regards to the non-diversified brands, first of all, I must be clear in that not every brand needs to move up. Two, some are, as you said, cash generators, but it is worth reminding ourselves that every brand is profitable. Three is that, as I mentioned in my presentation today, is that where brands that have new revenue streams or new revenue routes through a change in their proposition towards the customer and offering a new value proposition like Decanter and Wallpaper* as examples, we will move them out and then grow them. Finally, on data products. The simple answer here is we use data, segment them, analyze them, package them to achieve three goals.

[Kevin Li Ying, CEO at Future]

The first one is to increase the yield of our existing products. The second goal is to actually help other partners, that'd be retailers and/or platform businesses, to enrich their own monetization strategy with our data. Three is also helping us drive better and more diversified advertising.

[Sharjeel Suleman, CFO at Future]

Yeah, Sharjeel, just to add, Jessica, just to plant some numbers and there's some clues in the deck which will help you. You know, when you look at destination brands, if you go to slide 23, you can see Who What Wear, 92% direct revenue. If you look at SheerLuxe, that's even higher, right? Close to 100. On brands in transition, again, keeping on the same slide, you know, we've picked out Kiplinger, and that's 86% non-Google. There'll be a range, right? Some will be in that range, some will be lower than that.

[Sharjeel Suleman, CFO at Future]

To your point around non-diversified, well, we've pulled out Tom's Guide and that's 68% of its revenues from website sessions, right? Most of that was not direct, and that's the exciting part, and that's the job, right? We've got to transition a lot of these brands from non-diversified up the chain. As Kevin said in the presentation, we have a clear playbook.

[Kevin Li Ying, CEO at Future]

Yeah.

[Sharjeel Suleman, CFO at Future]

We know how to do this, and we are fixed-

[Kevin Li Ying, CEO at Future]

Right

[Sharjeel Suleman, CFO at Future]

very strongly on driving those up the chain, especially in the tech vertical.

[Jessica Pok, Analyst at Peel Hunt]

Okay. Thank you.

[Kevin Li Ying, CEO at Future]

Thank you, Jessica.

[Operator]

Our next question is from William Larwood from Berenberg. Please go ahead.

[William Larwood, Analyst at Berenberg]

Morning, guys. Thanks very much.

[Kevin Li Ying, CEO at Future]

Morning

[William Larwood, Analyst at Berenberg]

for the presentation. Just 3, please. Firstly, on your expectations of sort of gross contribution margins over the next 1-2 years would be helpful. Secondly, just in terms of trends in programmatic and e-commerce that you're seeing in April, I know it's April and May, that'd be helpful. Finally, just in terms of the savings that you talk about, the GBP 5 million savings, how much of that benefit is going to be expected in H2? Thanks.

[Kevin Li Ying, CEO at Future]

Thank you for your question. Sharjeel?

[Sharjeel Suleman, CFO at Future]

I think all three are mine, aren't they? I think so.

[Kevin Li Ying, CEO at Future]

Yeah.

[Sharjeel Suleman, CFO at Future]

All right. All right, I'll take them all. In terms of expectations on gross margin, it's too early for me to start predicting next year and the year after. We'd normally do that with our full year results. I think for now we'll, if you take where we are at about 70%-71%, I think that's about right for now, and I'll update the market once we start getting through our budget cycle, I get some visibility into next year, and we'll see the momentum start to come through for all the things that Kevin-

[Kevin Li Ying, CEO at Future]

Right

[Sharjeel Suleman, CFO at Future]

has spoken about. In terms of e-commerce and programmatic, what have I seen, and on audience as well, look, April was relatively more stable. The Google Core Update in end of March, early April was relatively neutral for Future. That said, audiences remain volatile. We had a couple of good weeks, then you have a slightly weaker week. It remains volatile, and that's what makes it difficult to call, right? I'd like to stand here and tell you the future of Future, but actually it remains volatile. What's not happening is it's not accelerating, right? We're seeing the decline in year on year, but it's becoming more stable, and that's not me saying it. You will have heard other people say something similar as well. Rather than fixate just on audiences on e-commerce, can I point you to the things that Kevin talked about?

[Kevin Li Ying, CEO at Future]

Right.

[Sharjeel Suleman, CFO at Future]

Go.Compare Living in terms of adding another channel. You've got things like the Who What Wear ChatGPT app, which will go live next week, Kev?

[Kevin Li Ying, CEO at Future]

Right. Yeah.

[Sharjeel Suleman, CFO at Future]

In terms of, again, attracting more audience. That product and Signal allows you to be in different places going forward.

[Kevin Li Ying, CEO at Future]

Multi-channel.

[Sharjeel Suleman, CFO at Future]

Multi-channel. In terms of the savings, the vast majority of that will come in the second half of the year. Our headcount has reduced substantially in the first half of the year. We've added, obviously, SheerLuxe in terms of head. We've added more tech and engineers building the products. Under the core, we've reduced our headcounts across teams, whether it's in sales, marketing, editorial, finance, legal, all of the teams across the piece. That should start coming in the second half of the year, that GBP 5 million.

[Operator]

Thank you. We will now move to our next question from Alastair Reid from Investec. Please go ahead.

[Alastair Reid, Analyst at Investec]

Yeah, morning, guys. Thanks very much for the.

[Kevin Li Ying, CEO at Future]

Morning

[Alastair Reid, Analyst at Investec]

Interesting presentation.

[Kevin Li Ying, CEO at Future]

Thanks for being here.

[Alastair Reid, Analyst at Investec]

Three for me. Firstly, could you just sort of update us on the kind of success and usage of Renewal within Go.Compare? Sort of any more color there. Secondly, on Go.Compare, you sort of mentioned your sort of relationships with the insurers. Can you perhaps talk about the importance of those relationships in insurers choosing to use you as a source of customers rather than potentially them interacting directly with an LLM? Lastly, I think you sort of said that AI Overviews were up to about sort of 65% of queries. How do you think about the trajectory of that? Do you think that's starting to plateau now? Thanks very much.

[Kevin Li Ying, CEO at Future]

Sorry, could you repeat your last question, please?

[Alastair Reid, Analyst at Investec]

I think Sharjeel mentioned that AI Overviews were now up to about.

[Kevin Li Ying, CEO at Future]

Right. Got it.

[Alastair Reid, Analyst at Investec]

65% of queries. I'm just wondering sort of your thoughts on the trajectory, whether that might be starting to plateau now. Thank you.

[Kevin Li Ying, CEO at Future]

Okay. I'll thank you for your questions. I'll take the first one. In terms of the success in Renewal, right? As I mentioned, we've launched it in March. Thus far we have migrated existing Google customers successfully onto the Renewal, and we're taking the learnings very fast. We are implementing, sorry, those learnings in order to refine the proposition. We are on track for year FY end in terms of our objective, which is to actually migrate hundreds and thousands of Google customers onto it. As Sharjeel mentioned, we will continue to innovate and grow Go.Compare, and within Renewal we are literally, at this moment in time, developing new initiatives in order for us to deliver the right value proposition. Please watch this space. We will give you a very firm and concrete update at year end.

[Sharjeel Suleman, CFO at Future]

Shall I take the other two?

[Kevin Li Ying, CEO at Future]

Please.

[Sharjeel Suleman, CFO at Future]

Yep. In terms of insurers, I think the key thing to say there, look, it's a symbiotic relationship. GCSE is very much on my mind with the biology exam yesterday. You know, it's important that we work with insurers and they work with us, right? We provide them a good, you know, a channel to reach customers. I see that carrying on. You raise a really interesting point on LLM visibility, and look, this is a key strength for us. Guess who has the LLM visibility in ChatGPT, in Gemini, in Perplexity, Claude, all the things? That's Future. We've been working on Go.Compare ourselves, right? The Future Optic-

[Kevin Li Ying, CEO at Future]

Correct

[Sharjeel Suleman, CFO at Future]

product that we've got, we've applied it to Go.Compare. Go.Compare in itself has really strong visibility, so it plays to our strength. We look forward to keeping those relationships healthy with the insurers as well. On AI Overviews, I'll take that one, Kevin, as well. Yeah. 65% of our keywords have an AI Overview. When it has an AI Overview, the page dynamics, obviously organic search results go down, and the click-through rate is lower. That's been relatively more stable again. The rate of increase over the last 2-3 months is fairly stable. You know, it volatility, it's actually gone down over the last couple of weeks, but it's relatively stable. It is not growing at the same pace as it was growing previously. You know, it went from 0 to 60, very quickly, and it's remained relatively more stable over the last two months.

[Kevin Li Ying, CEO at Future]

Just to build on what Sharjeel has just said, it is worth reminding that we are leaders in citation provider within AI Overviews and in the verticals in which we operate. Thank you.

[Operator]

Thank you. We'll now move to our next question from Wang-Lung Ku from Jefferies. Please go ahead.

[Analyst at Jefferies]

Morning, everyone. 2, if I may, please. Firstly, one of the slides on Who What Wear, I think it was 3% growth in social media followers. I appreciate it's not the same metrics, but some of your peers are reporting high double-digit, even triple-digit growth in engagement on their social platforms. I was wondering if you could give a little bit more color there in terms of are you underperforming your peers, or is there anything that you could highlight in terms of these other engagement metrics? Second question would be e-commerce affiliates. I appreciate the color on why it's down 20% year-on-year. Is that just a case of the consumer buying less earphones, or are they just buying earphones on ChatGPT or just going direct to Apple to buy said earphones?

[Analyst at Jefferies]

Is there anything, any color that you could share on why e-commerce affiliate revenue is down 20% when some of your peers who are perhaps more geared to fashion beauty are growing? Is that again another example of why you guys are down 20%? Thank you.

[Kevin Li Ying, CEO at Future]

Thank you for your question. I'll take the first one. In terms of the Who What Wear and the engagement question that you've got, great question. I think it's worth taking 2 steps back and looking at what Future and how we operate. There is 1 thing which is about, let's say visibility. There's another thing which is about growth in engagement. At Future, our operating model is about doing both, increasing those, but also critically, though, is monetization. We are very clear where we stand.

[Kevin Li Ying, CEO at Future]

There is no point for us to grow engagement that we can't monetize. Therefore, whilst we look at the market and take stock and learnings, our focus is to grow engagement that we can monetize. Our focus is to grow AI visibility, let's say using Future Optic, that we can monetize successfully. I think those monetization and audience work hand in hand. That's my answer to you. Sharjeel?

[Sharjeel Suleman, CFO at Future]

Yeah. I'll take the e-commerce one. This is a key focus of us, as you can imagine, with the revenues being down around 24%. The thing to remember here is it all starts at the top of the funnel. How many unique page views do you get? What we've seen is, especially in our tech vertical, we've seen a significant drop on the number of people coming at the top of the funnel, so coming to our websites. That results in the main decline. What's really interesting is actually, you note other people have increased. We have also increased in fashion, beauty, and homes. I can see, for example, clothing is up. I can see music and photography is up. It's around the mix in e-com. Parts of it are growing. Music is growing. Photography is growing. Fashion is growing.

[Sharjeel Suleman, CFO at Future]

Where we've seen the steeper decline is around the technology piece, where there's less people coming to our websites. This is why it is critical that we use the platform and Signal to move away from being just a website-based e-commerce company to being much more platform, very channel agnostic, around apps, around ChatGPT, around social. That work on technology is a specific focus for myself, Kevin, and the team, yeah. In terms of order value, it's been relatively stable. People are buying slightly less expensive kits, actually, when you look at the average order value, it's relatively stable, as I said. It's a revenue mix issue for us rather than people are buying more on LLM. I don't necessarily see that. I think it's more how many people come to the funnel.

[Kevin Li Ying, CEO at Future]

Right. Right.

[Analyst at Jefferies]

Very helpful. Thank you so much.

[Kevin Li Ying, CEO at Future]

Thank you.

[Operator]

Our next question is from Jonathan Barrett from Panmure Gordon. Please go ahead.

[Johnathan Barrett, Analyst at Panmure Liberum]

Good morning, chaps.

[Kevin Li Ying, CEO at Future]

Good morning.

[Johnathan Barrett, Analyst at Panmure Liberum]

a couple of a few questions. I guess first one to Kevin and then to Sharjeel. First one, just wanted to get your views on how the limits on fair use are emerging in the legal environment, and how you might see the big publisher case that's been taken out against Meta. You know, is that relevant to you, do you think? Could it help you? Would you get involved? You know, I'd like to understand your feelings about that.

[Johnathan Barrett, Analyst at Panmure Liberum]

Then on to the two sort of financial questions. Can you just talk us through your thoughts on how the EBITDA margin of GoCo will evolve this year, next year and sort of medium term, given the PPC pressure issue there that doesn't look like it's gonna go away. The second financial question, just on the de-leveraging plan, does that mean that we should assume that there are no further buybacks, all other things being equal at this point?

[Kevin Li Ying, CEO at Future]

Thank you, Jonathan, for your questions. I'll take the first one. Look, we, like with everything, we watch and we take stock of what's happening on the market and externally. In this case, as you mentioned, the cases around Meta, we're fond of that, right? We are not, we don't have a position to take in terms of whether we join or not join. The thing that I wanted to remind you and everyone on the call is that, you know, critical for us is focusing on our control, Jonathan, which is, you know, execution and delivery on the outcome, working the strategy and delivering on our goals, right? We are making good progress on this, as we've showcased today. In parts we have greener shoots and which is promising and therefore that's what we're here for and lead this business towards that. Thank you.

[Sharjeel Suleman, CFO at Future]

Right, Jonathan, two questions. PPC and Go. Compare medium term guidance. I'm gonna repeat what I said earlier. Too early to give a view on what next year and indeed what the years after look like. In terms of the margin this year, I see it in the range it is at the moment. Maybe a little bit better, but actually it's there or thereabouts. Remember, it's a very operating leverage business. Actually if the car market continues to return, the home market starts to turn around, that margin will start to pick up naturally as well. In terms of how we think about it, again, it's about attracting people. We've launched new marketing ideas across TV, across YouTube, across radio. We are still within our This Morning sponsorship. We've launched Renewal to improve long-term retention. Lots going on there.

[Kevin Li Ying, CEO at Future]

In terms of diversifying.

[Sharjeel Suleman, CFO at Future]

Lots going on there. I think for now I'll keep my mouth dry and say, look, we're focused on delivering this year, then we will update you on margins going forward. In terms of deleveraging, we're still doing a buyback. It's not like we're not doing a buyback. Still got GBP 20 million from the 1st of April to do of the GBP 30 million fifth share buyback. Once that completes, the board will have another look. The focus for me at the moment is deleveraging back down to that 1x floor. We're at 1.6 at half-year. We'll generate another GBP 45 million, or what I call free cash. We've got the share lights top up to pay. We've got the fifth share buyback to finish. It'll take GBP 20 million.

[Sharjeel Suleman, CFO at Future]

Net debt will come down a bit in terms of the total amount. The EBITDA a day is a bit lower this year compared to last year, so it will remain at about GBP 1.6 for the full year. You know, with the strength of our cash across direct, B2B, GoCo, the magazines, you know, we'll have another solid cash generation year next year, and we'll deliver down to that 1 times floor. As the board looks ahead and we are deleveraging, we're being prudent with our balance sheet, we will make another decision on a buyback in Future.

[Johnathan Barrett, Analyst at Panmure Liberum]

Can I just ask you a follow-up question on that, please?

[Sharjeel Suleman, CFO at Future]

Yeah.

[Johnathan Barrett, Analyst at Panmure Liberum]

With regards to mapping your leverage position going forward, are you assuming that the improvement in working capital in H1, which is obviously, you know, very strong, is sustainable, that improvement? That in other words, you know, you would expect that ratio even lower than where probably, well, certainly where I am and perhaps where consensus is. Is that a reasonable assumption?

[Sharjeel Suleman, CFO at Future]

Going forward 90% of EBITDA. We had a very strong first half of the year. We managed our working capital very strongly. I think for the full year you should plan at about 90% conversion. The first half we had about GBP 55 million of free cash after all, you know, CapEx, interest, tax, exceptionals. In the second half, I think that's closer to about GBP 45. We'll have a higher EBITDA, the cash conversion will even out across the year at about 90% across the year. I see that 90-95% as ongoing stable.

[Johnathan Barrett, Analyst at Panmure Liberum]

Okay. The working capital point in isolation is quite a big factor. I mean, is that sustainable, that gain?

[Sharjeel Suleman, CFO at Future]

90%, yeah. Of our cash, 90% will convert into profit. Yes, that is sustainable.

[Johnathan Barrett, Analyst at Panmure Liberum]

Okay. I'll pick up on that later. Thanks.

[Sharjeel Suleman, CFO at Future]

Give me a call afterwards, I'll talk you through. We've had, you know, it's 109 of this half. What I'm saying is that the full year it'll be about 90, and I see that as our annual ongoing. You know, it might be better than that, but at the moment plan for 90 and put it through your waterfall and you'll see what I'm saying in terms of you'll end up with a slightly lower net debt position at the year-end. Leverage remaining at about 1.6 given the maths on EBITDA.

[Johnathan Barrett, Analyst at Panmure Liberum]

I did have a fourth question, if I can be cheeky.

[Kevin Li Ying, CEO at Future]

The fifth, but carry on.

[Johnathan Barrett, Analyst at Panmure Liberum]

Just a more vanilla cyclical question. Are you concerned about the inflation in consumer technology products sort of impacting demand and therefore impacting volumes in e-commerce? Maybe that's already affecting you, maybe you already see that, but just wondered about your thoughts on that.

[Sharjeel Suleman, CFO at Future]

Well, look, I think the way I would describe it is, inflation is a thing, but GDP actually was a slightly higher read this morning, is my understanding. These things will ebb and flow. You've got people who bought a lot of kit in 2020, 2021. That's coming up for a refresh as well. People are using kit very differently. Cycles are different. I think all of those, when you add it in the mix, I think, you know, it'll carry on a little tomorrow.

[Kevin Li Ying, CEO at Future]

To actually build on what Sharjeel was saying, is that from a strategic point of view, re-managing e-commerce, which is ensuring that our e-commerce proposition is multi-channel for John Lewis, it's worth reminding is that, yes, there are new emerging purchase journeys, but we are gearing ourselves, right, to ensuring that we are partaking in those new emerging purchase journeys, and also look forward to disrupting them like we did on websites using Hawk. This time we're gonna do that with Signal. That's my point number one. The point number two is brand and content strategy, that pillar, which is transforming our brands to becoming brand destination.

[Kevin Li Ying, CEO at Future]

At the core, as what we've said, is the value proposition. What value proposition means for the customers is that what are they getting in return that they can't get anywhere else, right? Look, on Tom's Guide, one of our flagship brand, right, we've just launched Tom's Guide Savings Squad.

[Sharjeel Suleman, CFO at Future]

Yeah

[Kevin Li Ying, CEO at Future]

right? Which is a focused project, which is focusing on firm value exchange, taking into consideration the market dynamics, the economic climate, and the volatility of the world, if I may say so, right? Therefore, we are thinking customer first and clients, and therefore gear them into creating the right moments in our e-commerce in order to help them purposely. I thought I should add this.

[Sharjeel Suleman, CFO at Future]

I'll tell you what, Jonathan can ask a 5th question. I'll move on.

[Kevin Li Ying, CEO at Future]

No, it's okay. Don't worry, please.

[Sharjeel Suleman, CFO at Future]

you know, look at Go.Compare. What does that do? It helps people be savvy on TVs, laptops and phones. There's different ways to attract people. Let's move on. Thank you, Jonathan. Jonathan, give me a call, yeah?

[Johnathan Barrett, Analyst at Panmure Liberum]

Thank you.

[Kevin Li Ying, CEO at Future]

Thank you, Johnathan.

[Operator]

Thank you. We'll now take our next question from Andrew Renton from Cavendish. Please go ahead.

[Andrew Renton, Analyst at Cavendish]

Morning, both. Thanks for the presentation.

[Kevin Li Ying, CEO at Future]

Yeah.

[Andrew Renton, Analyst at Cavendish]

A couple left from me. Just given the pace of change of AI, are there any new efficiencies you've recently identified as on the cost base side? More broadly, have your assumptions around what AI will be able to do change at all? Then for Sharjeel, just given online uncertainty around the top line trajectory, are there any discussions around reducing that 1 times net debt floor? Thanks.

[Kevin Li Ying, CEO at Future]

Thank you very much for your question. I'll take the first one. Look, it is evidence, right? Everyone knows that, feels it, talks about it. The pace of change with AI is phenomenal, right? As I remind Future is, and its operating model is geared toward, is armed with flexibility, pragmatism and agility, right? We have embraced AI, not just the front shop, by leveraging AI to make new products, increase yield in advertising, but also monetizing AI is transformed in ChatGPT. As per your question, what are we doing with AI in the back office, right? As Sharjeel said, GBP 5 million return on track for this financial year includes utilization of AI. Let me give you a bit of color in terms of how we're doing it. It's not just plonking AI in and there you get the savings.

[Kevin Li Ying, CEO at Future]

It is reimagining our operating model, understanding where, what our processes are today, how the processes should evolve over time, and what is therefore the role of AI in these processes, end-to-end process. Dare I say, we started the utilization in our finance department, reassuringly, we're making due progress, and it is working for us. Of course, we're expanding that across other function within our organization. Again, may I say, at pace.

[Sharjeel Suleman, CFO at Future]

Sharjeel, just to clarify the question, Andrew, you mean reducing the floor as in having less debt, right? Going down to 0.5 or something. Is that the question?

[Andrew Renton, Analyst at Cavendish]

Yeah, yeah. Below the 1x. Yeah.

[Sharjeel Suleman, CFO at Future]

Below the one times.

[Andrew Renton, Analyst at Cavendish]

Just given that with top line, you know, top line does sort of trend lower for a year or so, just the impact that's gonna have on that ratio, and whether it's better to try and target a lower than 1 times.

[Sharjeel Suleman, CFO at Future]

Well, look, let me take it back a step, then I'll come back to your specific question. The beauty of Future, look, again, I've said this when I joined, is its immense cash generation. The bit that is impacting us, the one you referenced to in terms of low revenue, is about 16% of the business today. The rest of the business, you know, it has its ups and downs, like you can see that in our results, it generates tremendous cash that we know is coming. Magazines and subscriptions, minus 1%, relatively flat. We've got direct business growing at 8%, double digit in the second quarter. Exit rate positive on B2B. Go.Compare, car market turning around, home market hopefully will follow soon. These engines give us strong cash generation.

[Sharjeel Suleman, CFO at Future]

I'm going to be focused on getting down to the 1 times floor by using the remainder of this year and into next year's cash generation. We don't have a DB scheme. We have a dividend, which is at GBP 15 million-GBP 16 million. That cash generation starts to delever very quickly as we go into next year. As we go into next year and we have visibility on our performance, the momentum on the strategic initiatives, how the economic outlook is looking for the world and geopolitics, the board can then take an informed decision on the leverage position, but also to Jonathan's earlier question about future buybacks. My focus at the moment is to be prudent and conservative and go towards that 1 times floor. As we get there, we can make a decision.

[Andrew Renton, Analyst at Cavendish]

Great. Thank you both.

[Kevin Li Ying, CEO at Future]

Thank you.

[Operator]

Thank you. We'll now take our last question today from Lara Simpson from JPMorgan. Please go ahead.

[Lara Simpson, Analyst at JPMorgan]

Thank you so much. Well, most of that has actually been answered, maybe just to come back and push a little bit more on the profitability and margins. You've obviously reiterated the guidance for 2025 to 2027 on a full year basis, which leaves quite a wide range on H2. I suppose why the need for such a wide range or such low visibility in the second half? Sharjeel, maybe if you could just walk us through some of your key assumptions and the building blocks that H2 profitability. I know we've got the GBP 5 million annualized savings coming through, what are some of the key puts and takes there? Then maybe just coming back on capital allocation. You've clearly, haven't signaled quite a strong message on portfolio optimization and reviewing brands and assets across the portfolio.

[Lara Simpson, Analyst at JPMorgan]

We'll wait for an update on that. If something was to crystallize, how would you be thinking on capital allocation in that scenario? Would the focus still be on deleveraging to 1x, or would you potentially look to be opportunistic on acquisitions? Do you feel the business is ready to pursue another deal similarly to Fearless Solar, very much deleveraging and potentially share returns given where the stock is trading and how business operations are?

[Sharjeel Suleman, CFO at Future]

I think you're looking at me for both of those ones, are they not? Okay, here we go. The range 25%-27%, look, things remain volatile on the On The Inside. We talked about the Discover algo. We talked about the Google Core algo. You know, we have a couple of good weeks, one week, things remain relatively volatile. What's on the good side and the positive, you know, Future Outlook is doing very well. We've got a strong booked number for that. Helix has just launched. Go.Compare is starting to return to growth. Exit rate on B2B has been positive in March, April, and May. There's a lot of moving factors here, and that's why the range is in that 25%-27%. As we progress through the year, we'll know more, and then again, we'll update you in the trading update, in September.

[Kevin Li Ying, CEO at Future]

September.

[Sharjeel Suleman, CFO at Future]

For now, look, we are focused on delivering the guidance we have issued.

[Kevin Li Ying, CEO at Future]

Right.

[Sharjeel Suleman, CFO at Future]

We're confident in delivering the guidance we have issued.

[Kevin Li Ying, CEO at Future]

Right.

[Sharjeel Suleman, CFO at Future]

We want to transition those brands up the chain. We want to monetize in a 360 way. We want to carry on innovating because that's what's helping us win. At the moment, it's 25%-27% guidance. As we go into next year, I'll update everyone about that in the future. On the portfolio, look, I don't wanna count the cash before we have it, right? We are you know, actively progressing options on brands and assets. When I can talk more about it or we have something more specific, I'll let you know. The great thing is, in the meantime, I'm gonna generate a ton of cash.

[Sharjeel Suleman, CFO at Future]

Secondly, whether we use it to pay the RCF down, whether we do something more interesting on shares or buybacks or bonds or keep hold to cash, for, at a growth level and do something else, I don't know. The focus is let's progress with those value unlocks for my shareholders. The board has said our share price is fundamentally undervalued, and we are gonna do something about it. When I can talk about it, I'll tell you what it is, and I'll tell you what I'm gonna do with the money.

[Kevin Li Ying, CEO at Future]

Right.

[Lara Simpson, Analyst at JPMorgan]

Very clear. Thank you.

[Kevin Li Ying, CEO at Future]

Thank you very much, everyone, for joining this call. I hope you found our presentation useful, clear, and accessible to all. Also thank you on behalf of myself and Sharjeel Suleman for all of your questions and found our answers satisfactory. Thank you.

[Sharjeel Suleman, CFO at Future]

Thanks, everyone.

[Operator]

Thank you. This concludes today's conference.

Participants

Executives

• Kevin Li Ying, CEO
• Sharjeel Suleman, CFO

Analysts

• Alastair Reid, Analyst at Investec
• Andrew Renton, Analyst at Cavendish
• Jessica Pok, Analyst at Peel Hunt
• Johnathan Barrett, Analyst at Panmure Liberum
• Lara Simpson, Analyst at JPMorgan
• Nick Dempsey, Analyst at Barclays
• William Larwood, Analyst at Berenberg
• Analyst at Jefferies