Zillah Byng-Thorne has been CEO of the UK listed Future Plc for seven years. Previously she had been CFO of Future, AutoTrader Plc, and Fitness First, having qualified as an accountant at Nestlé. She has transformed the longtime specialist publisher through investments in technology and major acquisitions which have helped it diversify revenue sources and become a major media player, reaching one in three adults online in the US and UK. Future is a very digital specialist publisher. This week, it announced stunning 2020-21 results: a doubling of operating profit to £195.8m and a 79% increase in revenue to £606m. While the figures included the largest acquisitions, they also showed organic revenue growth of 23%. Future now has a market value of £4.2bn. Its share price has increased by 94% so far this year.
What have been the biggest changes in the industry this year?
There’s been lots of talk about an acceleration of media and an acceleration of change of the last 12 months. Well, we’ve seen that acceleration. But I do wonder if actually, we won’t now see post-pandemic – if I dare say those words – a deceleration or a further change. But I think clearly, the one thing I call out is that businesses that are well diversified, and that were able to lean into where the customer was at that moment have been those that have performed the best. And, and clearly, technology underpins that. The retailers that didn’t have an online presence struggled during the pandemic. And, likewise, media businesses that didn’t have multiple routes to find their customers and to reach their audiences have struggled, whereas businesses – like our own – have performed very well and consistently through the period.
Does that ‘digital acceleration’ mean consumers themselves have fundamentally changed?
I’m honestly not sure. I started my career in books 25 years ago, and the death of books was lauded then. And yet still, I find myself putting books in my suitcase when I go on holiday. I do think that people still like traditional forms of media as well. That’s why we still see people enjoying the radio, and TV, and why we also see such high enjoyment of magazines. We mustn’t underestimate the environment of the last 18 months but I don’t know that habits will have changed as much as people think they have.
You made your three largest acquisitions (so far) during the pandemic?
Certainly, they were a highlight for us, especially doing them during the pandemic. But the real highlight has actually been how brilliant the underlying business has been during this last 12 months as well. It’s only been because of that really brilliant core foundation that we’ve been able to do these three major acquisitions in 2020-21:
Acquisition no.1: We announced TI Media in the November before the pandemic. The deal actually completed about a week after we went into UK-wide lockdown. I think probably the single biggest thing that I learned from that transaction is the quality of the assets you buy are really important, because – when unpredictable things happen – good brands, good content, and a long-term strategy will prevail. I’m not going to pretend buying 40-odd magazines just as the shops closed felt – short-term – like the best thing I’ve ever done. However, I was completely confident this was the right deal for us longer-term and the strategic rationale around the opportunity to take the TI content to the US was really clear for us. So I was reassured and comforted by the strategic opportunity.
Acquisition no.2: With GoCompare, which we announced in November of 2020 and completed in February of this year, my biggest learning was that, maybe, we needed to be more explicit about the things we think everyone understands about our business. When you sit inside your business, you think everyone understands your strategy and what you’re trying to achieve. And we thought that everyone would understand why we wanted to buy a price comparison site. As you’ll know, the share price reaction on the day was quite the opposite of that. We obviously took the market by surprise. And so that really made me think about how we communicate.
Acquisition no.3: We acquired Dennis Publishing in September this year. We’re still quite early into that. One of the reasons for that acquisition was to bring in more capability and experience of subscriptions management and consumers and how we can do that at scale across the wider group. The deal has helped to remind me of the real value of content and the talented individuals who produce it.
However, there is one over-arching about all three acquisitions. You can’t ever underestimate the fact that all acquisitions are about people. We’re a people business and, with every acquisition, you acquire a collection of individuals which means you have to have some reverence for the culture and be respectful of what you’ve acquired. That’s partly why – unlike lots of businesses just now – we’re really investing in our portfolio of property, because we do think that coming to a nice place of work really matters.
Perhaps people were surprised that you have still been buying magazine businesses?
I’m a massive fan of magazines. We at Future see huge value in that as a category. Lots of people dismiss magazines as a category, thinking that the structural decline means that you’re buying something that has no value. Our view is that you’ve got wonderful IP and fantastic brands, which are remembered by people long after they have stopped buying the magazine on the newsstand. I think the biggest challenge for the magazine industry has been distribution. And, actually, it’s been the pressure on retailers that’s caused as much of the distribution challenge for magazines as actually the consumer choice, which is why subscriptions are now so important. And good quality magazines meet audience needs – our portfolio has subscription retention of more than 70%, and the longer someone has subscribed, the more sticky they get.
Did the sheer scale of the three acquisitions worry you?
Size is a relative measure: what is the size of an acquisition? Is it the number of brands? Is it the money you pay for it? I’ve sometimes said to investment analysts and shareholders: ‘Don’t think that the price paid equates to the complexity of the acquisition’. We look at each acquisition and consider how complex it will be to integrate and how much change will be involved. When you take a step back, probably the TI acquisition was actually the most complex but the lowest value in terms of the price we paid for any of our three largest deals, because it had over 40 brands and more than 1,000 people. So it was much more time-consuming and had more impact on the organization than GoCompare, which was largely just three brands. So, GoCo was less disruptive to the organization but – by far – our most expensive acquisition.
Surely, the deals bring problems for the existing business?
Every acquisition brings its own unique issues, and you don’t know what’s going on behind the scenes in a business before you buy it because people ‘dress’ businesses for sale. And every acquisition has some elements, which are much easier than you think. And,equally, some things are much harder in terms of things that you don’t expect to happen. For example, GoCompare: how could we have possibly foreseen the energy crisis we have just now. And, you know, it’s fortunate that the part of the business we attributed the least value to which was LAMB (look after my bills) which has been most impacted by the energy crisis. If we had been buying GoCo primarily for that business, it would be a difficult situation just now. That’s why we try really hard to have more than one ‘play’ with every acquisition we look at. So, when the unexpected happens, you don’t suddenly have your backs against the wall.
Future is a British+American business. What’s the difference between the two companies?
We manage Future as a global organization, and the reality is we write our content almost exclusively in English, and therefore, our audiences are English speakers. So, bizarrely, we don’t actually see that much difference in how audiences behave. However, we absolutely recognize that these are completely different cultures. And there are lots of differences down to how we take our holidays, how we think about our holidays, through to what matters in terms of employment benefits, etc, that really are quite different. While we operate as one team globally, we have to be locally aware of the differences. And when we buy businesses, one of the things we quite often find is there’s this kind of US-UK division between, with both sides talking about the other side, as if there’s something slightly slightly wrong there. We don’t really have that at Future. If you work for Techradar, you work for Techradar, whether you’re based in Sydney, London, Newport, or New York.
You describe Future as ‘global’. Will you expand beyond the English language?
Not at this stage. We’ve got so much opportunity in North America that I just don’t believe we need to go, say, to Continental Europe to find our opportunities just now.
Is further media industry consolidation inevitable?
There’s inevitably going to be more consolidation because the industry continues to change and to be disrupted. The flip side is that media is full of innovation, because that’s what makes it disruptive, and it’s a really interesting marketplace to be involved in. But I do think that there will be a readjustment or realignment because parts of the media industry are so completely undervalued and under-appreciated while other parts have got crazy valuations. When you’ve got those two extremes, you have to believe there’s got to be a correction and consolidation.
What’s your Agenda for 2022?
Essentially boring, but it’s just more of the same, which has really been the main headline of our agenda for the last few years. We will certainly make sure we deliver on the revenue synergies from the recent acquisitions. We’ve seen some fantastic momentum in our women’s lifestyle portfolio in the US, some really good momentum in our homes portfolio. We think the Kiplinger brand is just fantastic. And we’re really excited about the opportunity to work with it and the GoCo business in terms of thinking about savings, wealth and investment and bringing that expertise to the market in the US. We’re moving to new offices in London, new offices in New York, and we’ve got a new Atlanta hub opening up. So we’re just looking to make sure we’ve got the right people in the right places to continue to scale the business over the next few years.
What’s your wish for Future in 2022?
I just really, really want the people who work at Future to have a safe year. It’s been a really hard last couple of years. And so, on a personal level, I want our people just to feel safe and confident in what lies ahead for them. For Future as an organization, I just want to see it continue to flourish. That’s all we’ve ever wanted and is what we look forward to for the next 12 months.
What is the most important lesson you have learned in your business career?
To never ‘take it’ or ‘make it’ personal. And, if you keep doing the right thing, you will get the right result. You just need to have faith.
Which company (other than your own) do you most admire?
I think Sky TV was amazing in the 2000-2015 era; right now in media, I think the New York Times is pretty smart.