Future plc (FUTR) Earnings Call Transcript & Summary

Good morning, everyone, and thank you very much for your time today. I'm delighted to be able to take you through our full year results, which I'm very pleased to share another beat against the market expectations. However, before we go into the main part of the presentation, I thought maybe we could share with you a little bit of the highlights of our last year. [Presentation]

I think that's a really great summary of the last 12 months for us. And for those of you who know Kev, our CTO, you'll know that there's no way he would be sitting here in his pajamas when he was making that video. And I can reassure you, we're all fully dressed here as well. Anyway, in terms of the agenda for today, we thought we'd give you a brief overview of the highlights of our year and then Rachel will take you through the financial results. I'll then pick up on an update on the strategy and progress against our plans. And then I'll talk you through our recommended offer for GoCo plc. So moving then on to Slide 4. I think we're really delighted with the results that Future have delivered this year, delivering again ahead of expectations, which in the context of what has been a very unusual year we've had around the pandemic is a truly exceptional performance. We're delighted to report that all of our key metrics have continued to improve, resulting in adjusted operating profit being up 79% versus last year, which is pleasingly translating into an identical growth rate in our free cash flow, which is a real testament to the strength of our operating model and leverage. In this unusual year, our ongoing focus on execution, underpinned by our values, is ensuring, in the strangest of times, we create the content our communities most needed while our agile ways of working has meant that we have been able to perform as if we were in our offices. This disciplined approach to execution is very much making sure we continue to deliver our strategy, creating a global platform for specialist media, driving intent, underpinned by tech, with diversified audiences and brands. Our online audience growth during the year grew 48% organically. And when we remove for the impact of the COVID spike, we think the underlying growth rates are in the region of 35%. And it's this tremendous growth in audience that is driving the Media division results. Our focus on strategy is what has enabled the strong performance of our acquisitions with TI brands ahead of our expectations, including the earlier update in our synergies and 6 new websites launched in the last 6 months, while both Barcroft and SmartBrief have moved into BAU mode. As a result of this excellent performance, we're very pleased to recommend today the offer for GoCo Group, a unique opportunity where we can create more value. If we just move you on to Slide 5, I wanted to give you a very brief overview of the recommended offer. There is clear industrial logic to us for this transaction when you consider the unique opportunities being presented when you combine Future's consumer content with GoCo's expertise in savings. And I'll talk about that in more later. However, this slide is aimed at just giving you a very brief overview of the headline elements of the transaction. As you'll see, the offer is a headline price of 136p per share, representing a 32% premium to the 3-month VWAP with a consideration mix of 76% shares and 24% cash. One of the key factors for us in the consideration mix was ensuring that Future continued to operate with a conservative level of leverage for our business. However, I'm going to hand over to Rachel now, who's going to take you through in a bit more detail the financial results.

Thank you, Zillah. If I could move you on to Slide 7, I'm delighted to present my first set of results for Future. It's been an incredibly busy year in Future in unprecedented times. And this itself makes us proud of these results. In a few slides, I'll explain a set of results that demonstrates how our diversified business model is delivering growth and how it has played such an important part in the resilience of our business in current times. Also as you know, Future's strategy includes delivery of an acquisition plan that adds strength to our business and from which we deliver incremental value. The results we are sharing with you today add another strong year of results to our track record. And so if you move on to Slide 8, you see here our results for the year, a strong set of results across all key metrics despite some COVID headwinds. Our revenue growth is delivered by organic revenue growth of 6% and revenue from acquisitions. Our adjusted operating profit is up 79% to GBP 93.4 million. And this is a strong beat to market consensus, which was upgraded on the back of our trading statement in September. Earnings per share rose 57% and adjusted free cash flow growth has been strong at 79% and we've delevered to 0.6x. And if I could move you on to Slide 9 and looking at the numbers at a detailed P&L level. Following the revenue growth of 53% is growth in contribution, which is growing ahead of that at 58% up year-on-year. A key performance takeaway here is the margin performance with gross contribution margin improving by 3 percentage points year-on-year as our strong Media revenue growth drives a material mix effect benefit. Below gross contribution, we see the benefit of our operating leverage, namely our ability to drive further monetization from our editorial cost investment as well as the benefits from our operating leverage across the rest of the business. We've also delivered synergy benefits as a result of the TI acquisition. The combination of all of this has translated into an operating profit margin improvement of 4 percentage points to 28%. And let me next go into a little bit more detail on the revenue results that have powered our profit performance. So if I could move you on to Slide 10, we show our performance according to our revenue and geography segments. We show also our total revenue performance and the organic revenue performance. If we could focus in on the organic performance, you can see that organic Media revenue growth has been incredibly strong at 23% up on last year, underpinned by continued fast growth in audience and the strength of our content. This Media performance has enabled the delivery of organic growth of 6% for the year, mitigating the impact of the pandemic on our organic Magazine performance. As previously mentioned, you see again the impact of the mix effect on our revenues, improving our gross contribution Media margin by 5 percentage points and equally our overall gross contribution margin. What is also evident is the strong growth in our organic profit level and the margin improvement here year-on-year by 8 percentage points, thus demonstrating the way that Future efficiently produces and delivers the content, taking advantage of multiple monetization opportunities. If you look through the lens across our key geographical segments of the U.S. and the U.K., the results show how strongly Media revenues have grown in both the U.K. and the U.S.. Pre COVID, the U.K. had slightly higher proportion of events revenues. And excluding events, digital revenues, comprising digital display and eCommerce, grew 33% in the U.K. and 30% in the U.S. From a total organic revenue performance, the U.S. has relatively smaller proportion of events and Magazines revenues and grew organically totally by 19%. The U.K. organic results in total are more heavily weighted in events and Magazines and declined by 7%. On the right-hand side of the slide, we show representations of our revenue mix at September to show a more representative picture following the acquisition of TI Media in April. Our business at September shows the proportion of Media revenue at 65% and 57% of revenues in the U.K. If I could move you on to Slide 11 now, and this takes us another layer deeper into our revenue segments. And you see on the right-hand side, we show our revenue mix by subsegment, again with the position taken at September. With our recent acquisitions, we have added an increased proportion of Magazine newstrade revenues and also a higher proportion of recurring revenue streams in subscriptions. Our Media revenues represent the larger proportion of our revenues with our digital advertising on-platform at 30% of revenues and our eCommerce revenues of 19%. Our off-platform revenues include our SmartBrief B2B e-mail newsletter business and our Barcroft video business acquired in 2019. With that context, if you move back to the table of results, looking at both the total revenue growth and organic revenue growth, the results show strong organic digital display revenues, off-platform revenues from our recent acquisitions, strong organic eCommerce revenue growth, events revenues impacted by the pandemic, other media revenue growth in licensing and syndication. It's worth pointing out here that the organic Media growth, excluding events, grew 31% in the year. On Magazines, total growth includes TI Media Magazine revenues from April 2020 and organic Magazine revenue trends further impacted by the pandemic. These results, being full year results, perhaps don't do full justice to the performance in the context of the impact of the pandemic on parts of our business in the second half. And so I'd like to add to that perspective if you would move to Slide 12. This page tells 2 stories. On the left-hand side, the parts of our business that have been materially affected by the pandemic and how we have responded and recovered. The right-hand side shows the performance of our revenue growth engines. We estimate that we've lost over GBP 30 million worth of revenues from events and cancellations and store closures. And in our events business, we needed to cancel 27 live events, costing us nearly GBP 9 million in revenue. The chart shows the difference in revenues year-on-year in the first half, where events in the last part of March were canceled, and in the second half, when no live events were run. Our agile team switched to virtual events, running 32 of these across many event categories, which most importantly keeps the schedule running until the live events can resume. Moving to Magazines in the chart below. The red line is the organic Future business, about 25% now of our total Magazine business. Here, there is a high proportion of sales through travel outlets, which have not all reopened. Revenues, however, have recovered in the final quarter, as you can see. And they improved again in September. In the TI Media business, the blue line, where Magazine sales are predominantly through grocery and independent stores, total Magazine revenue performance, whilst not back to pre-COVID levels, has recovered materially in the final quarter from the peak of lockdown. And in addition and within these TI results, subscription revenues have grown 6% in the post-acquisition period compared with pro forma results. And Zilla will talk in her session, highlighting the strong demand for our products and the opportunity for us to grow the level of our recurring revenue streams. Then moving on to the right-hand side of the chart of the page and the high-growth areas of our business. Firstly, you see our digital display revenue segment. We've seen strong revenue growth consistently across the year and consistently across our key U.S. and U.K. geographies, where we've seen increased demand from media buyers and advertisers with whom we have direct relationships. Last but not least, our eCommerce revenues delivered strong first half performance, following an exceptional 2019 Christmas period and then boosted in the early lockdown period from high audience levels and high transactions in our tech and gaming verticals. And then strong growth continued in the second half and without an Amazon Prime Day, which moved to October this year compared with the July schedule of last year. So after those strong revenue and margin improvements, I'd like to take you on to now to Page 13, which shows how we delivered the cash. The cash generation of this business is another one of Future's strong characteristics. You will see that, alongside the strength of the revenue and profit performance, we've delivered a strong cash result for the year. Adjusted cash before changes to working capital and provisions is GBP 92.4 million. We have a positive working capital inflow largely following the mid-month timing of the TI Media deal completion, outside of trading our cash flows, the low operations service, exceptional cash flows materially those associated with the TI Media acquisition, namely deal fees and restructuring cash flows associated with the delivery of the cost synergy benefits. Our cash tax is low and reflects the benefit of the utilization of brought-forward losses, which represents another value benefit of our recent acquisition. We operate a capital-light model at Future and our capital expenditure has remained in line with prior year at GBP 4 million. Acquisition and financing costs represent net funding movement for acquisitions during the year and deferred consideration for acquisitions in the prior year and the cost of disposals. Our cash flow includes a dividend payment in respect of the prior year of GBP 1 million. And we proposed a dividend of GBP 1.5 million for this FY '20 year, representing a continuation of our dividend policy. Our adjusted free cash flow then of GBP 96 million, being our adjusted operating cash flow less our capital expenditure, and this is 79% up on previous year and 103% of our adjusted operating profit. Our net cash flow after acquisition activities was GBP 13.7 million and our net debt position at the end of the year was GBP 62.1 million. Our debt facilities include GBP 135 million RCF and unutilized GBP 30 million COVID facility, which has since been canceled, as was not required. And our headroom was over GBP 100 million at the year-end with leverage low at 0.6x. So if I could just move you on to Slide 14. And in summary, we're very pleased with this set of results, which adds another strong year to our track record. On every measure, we're delivering material year-on-year growth. Our revenues are delivering high-quality earnings and margin growth. Our operating performance continues to convert to strong free cash delivery and our earnings per share are materially up year-on-year. Thank you, and back to you, Zillah.

Thanks very much, Rachel. I have to say that I think Slide 14 is my most favorite slide. However, actually, I think it's Slide 16. So I think we should turn to that one instead. And I think the track record Rachel just outlined is super impressive. But the reason why I want to look at Slide 16 is that it doesn't happen by accident. The key thing about our track record is that we continue to focus on the execution of our strategy and on making sure we deliver on what we set out to achieve. Those of you who are familiar with our story will know that this slide is one of the best examples of our content that we use in practice. Our strategy remains the same. We're creating a global platform for specialist media, driven by technology with diversified revenue streams. We have really loyal communities, where we meet their needs day in and day out. And we have diversified monetization models, creating significant revenue streams. We achieve all of this through leveraging our data and our insight. And we expand our reach by a combination of organic growth, acquisitions and partnerships. So I thought it might be helpful to just move on to Slide 17 and look at some of the ways we have done this in a bit more detail. At the heart of our strategy is the scale and engagement in our markets. And this slide looks to draw out the key reference points around that. However, I just wanted to draw your attention to a couple of my personal highlights. Today at Future, we reach 1 in 3 people online across the U.K. and the U.S. We have real scale. But at the same time, we have leading brands with 23 #1 market-leading positions, underlining the strength of our engagement as well as our scale. Now the chart on the left-hand side just shows a little deeper into this, into the audience trends by cohort and over time. And what you can clearly see here is that we've been engaging with our audiences consistently with a 5-year CAGR online user growth of 58%. And so I think it's really important to stress the point, which is where we've seen some COVID peaks, the long-term trends remain. This slide breaks down our audience by cohort, highlighting the growth of our acquisitions but also historical Future brands, which are the gray segments. And what you can see clearly is that the historical Future brands have nearly tripled in size over the last 5 years, which is a real endorsement to the fact that we continue to create the content that our audiences most want to read. Moving then on to Slide 18 and looking at this in a little bit more detail. As I mentioned earlier, audience growth this year has been exceptional at 48% organic. One of the key takeaways that I'd really like to make sure that you take from this slide is the consistency of that audience performance. As you can see from the chart on the top right-hand side, we're outlining our online user growth over the last 24 months. And as I just mentioned, you can clearly see there's a spike around COVID. We then return to the prior growth rates, which have been one of the questions we sometimes get asked is that the underlying performance this year due to COVID. And I hope you can see what I can, which is that this chart clearly outlines that, that's not the case and it's a much more fundamental trend in our business. And just for ease, I thought it would be helpful to add where the gray blobs are, where we have algorithm updates from Google. And I think what you can see is there's no discernible change in the ongoing momentum in our business. Now another key area of focus, as Rachel mentioned, was growing our subscription base. And it was immensely pleasing during the last 6 months to see the growth in this area as access to our magazines became disrupted through the disruption to retail outlets. And we saw significant growth as readers tried to access the content they most wanted to during these times. Our audience growth is a real result of the content that we create. And in a moment, I'll take you through some of the areas of where we've been investing. However, one of the foundations to the growth in our audience has been from the evergreen nature of our content. And the chart on the left-hand side of this page just highlights the revenue generated each month from the content written in previous years. If I move you now on then to Slide 19. I wanted to just give you an example of our strategy around leveraging our global platform. And I really felt that What Hi-Fi? helps to bring this to life. For those of you who don't recall, we acquired What Hi-Fi? in April 2018. And at the time, it was a magazine brand and a dot-co, dot-U.K. focused on writing expert advice to a U.K. audience. We relaunched the brand on to Vanilla and turned it into a whathifi.com and then leveraged our platform to grow audiences. Now the chart on the right-hand side clearly shows the growth in the What Hi-Fi? audience over the last 24 months, growing by 430%. As you can see, it takes a few months for us to -- for the platform effect to kick in. However, once it does, there's real momentum in the business. One of the things I find particularly pleasing about the What Hi-Fi? performance is the colleagues who actually create this content are sitting downstairs in our office in Paddington normally, although I think they're sitting at home just now in their houses. And the point around that is that we don't need to be based in market to know what our audiences need and what our audiences want to read, what we need to do is be expert. If I move you then on to Slide 20. We talk a lot strategically about diversified revenues. And I thought it might be helpful to illustrate the geographical spread of our audiences and also the areas in which -- of verticals in which we operate. The chart on the right-hand side highlights the diversity of our audiences, and you can clearly see that we're not overly exposed to any one segment. And even in our tech specialist vertical, where we have over 100 users online, we have numerous brands operating within that with no one brand overly dominant within the portfolio while the chart on the left-hand side, we clearly indicate that the North American business contributes around 48% of our total audience reach and hence why we make sure we write our content for all of the global audiences rather than just the U.K. Moving then on to Slide 21. One of the core parts of our strategy is about our technology and the underpin that it has. And I thought it might be helpful to just highlight here how the technology stack underpins our diversified model. For example, if you look at the 9:00 to 12:00 point on that wheel, you can see that the success we've had with Hawk, our eCommerce comparison product, has really helped us to grow our eCommerce revenues, which now account for 19% of the group. However, as we watch what was happening with Hawk, we recognized an opportunity to develop a new piece of technology, which was Falcon, where we could drive higher-value transactions through creating lead generation content in addition to product content. This technology allows us to funnel leads to commercial partners based on the content and advice that customers and consumers have accessed on our sites. Well, if you turn to 12:00 to 3:00 on the wheel, you can see that the asset management part of our business is a critical component to helping us repurpose our content and deliver the efficient operating model that you can see while the ongoing development of our ad technologies and the acquisition of the SmartBrief e-mail tech has enabled additional ad revenue growth that Rachel has just taken you through. More recently, we have developed the Xray tool, which is a predictive analytics tool, which helped us understand the upcoming audience trends and making sure we're always writing the content that's most relevant to our audiences at that moment in time. Now moving to Slide 22. As I mentioned at the start of the presentation, I really do believe our results this year are partly driven to the strong core set of values we operate at Future, ranging from being a truly meritocratic employer, where it's not about who you are and much more about what you contribute that counts, to the response to the pandemic with the launch of the Future Foundation, where we continue to share our knowledge and expertise to help younger people fulfill their potential. And we really do believe our strong values underpin everything we do. If I could move you then on to Slide 23. Our success at Future is not just about ensuring that we deliver in the short term but also making sure we balance that with investments for the longer term. And I thought it would be helpful to just look at some of the areas where we're investing to drive Future growth. If we then move to Slide 24, I thought it would be helpful to just look at where we're investing in editorial content. And this is one of the key areas of focus for us to ensure that we continue to deliver the audience growth as we've seen in the past through investing in content going forward. We've grown our investment in editorial by 50% CAGR. And this has been a key enabler to our ability to continue to grow our audiences. And as part of our commitment to invest today in the content that we will be using tomorrow, we were delighted to announce in October the creation of 150 new roles across our editorial, video and technology teams. If we then move on to Slide 25. One of the core parts of our strategy is our investments in technology. Sometimes people ask us why we don't spend more on tech. And I always think it's a really strange question as at Future, our focus is not on how much we spend but rather on how productive have we been. Part of our operating model means that we in-source roles to our lowest-cost locations. And as a consequence, you can see from the chart on the right-hand side that we've been able to lower our cost per head through our location strategy while increasing the overall technology team headcount, enabling us to truly do more with more. And we -- and you can read from the comments on the left-hand side, the areas of ongoing investment this year. If we then look a little bit more -- in a little bit more detail on Slide 26, you can see there in which we've been investing in the quality of our advertising experience. It's a really critical area for us. And you can see during the last 12 months, we've focused on a number of key factors. In the changing landscape around privacy and cookies, one truth prevails, that advertisers want to reach their target audiences. And so media brands with scale, leading market positions and endemic audiences are an ideal environment, where there may be some uncertainty around cookies and where advertisers can ensure they meet the people they want to target. As a consequence, we are focused at Future at increasing the proportion of our advertising that is sold direct to our partners, that being first party. In the second half of the year, you can see the clear evidence on these slides that at an even more economically uncertain time, advertisers saw Future as a safe haven with our growth in the second half in first-party ads of 7.5% versus the first half of the year. One other area of investment for us has been in the quality of our advertising experience. As a premium publisher, we do not need to over-monetize our content pages. And the chart at the bottom right-hand side shows the growth in our ad impressions was materially slower than that of our audience, ensuring we sell premium, high-yielding advertising as opposed to over-monetizing our site. On Page 27, we just outlined in a little bit more detail how our investment in all aspects of the purchase funnel have enabled us to continue to deliver the exceptional growth rates that we've seen in our eCommerce business. We focus on ensuring we have breadth of retailers. And as you may recall from the first half results, we talked about the impact of the increased demand on Amazon and the fact that they have some issues in the U.S. around distribution of products. Due to the power of the Hawk platform, we were able to substitute in other retailers to continue to meet our users' demands. And that's what the chart on the left-hand side really helped to outline how diversified the retailer mix is within the Hawk platform. One of the things we also focus on ensuring is that we optimize the purchase funnel, really helping to drive intent. From the placement on the page to the commissions we negotiate, all aspects of the funnel are in growth, which is a really pleasing result. If we then move on to Slide 28. A core part of our investment in Future growth is also around identifying assets where we believe we can add additional value. And I just thought it would be helpful to give you a little update on the performance. Since January 2019, we have undertaken 7 acquisitions, ranging from small bolt-on deals, like the acquisition of hi-fi and camera magazines from Nextmedia in Australia for less than GBP 100,000 to larger transactions like SmartBrief. And what is particularly pleasing is that all of these have traded ahead of expectations. And as you can see from the detail here, we have fully integrated and transitioned to BAU for Mobile Nations, SmartBrief and Barcroft while the more recent acquisition in October of CinemaBlend has got off to a great start with premium digital adds up 31% in the first month. However, clearly, I can't talk to today about results without spending a little bit of time on the TI acquisition. So if we could move Slide 9, I thought we can -- Slide 29, sorry, I thought we could take a closer look. I think it's really important to just refresh ourselves on the key deal highlights. We saw an opportunity here to acquire genuinely market-leading brands. What we're able to bring through Future was the opportunity to bring a digital-first and U.S.-first mindset to those brands, the opportunity to grow our audiences and grow our opportunities to monetize while sharing our best practice as a digital-first publisher. The thesis here is almost identical to what I illustrated to you earlier with What Hi-Fi? And then moving to Slide 30. I just wanted to, therefore, give you a bit of evidence around our progress on these key areas. What you can see on the first chart is the significant increase in audience year-over-year and certainly some ramp-up in that audience growth under the term in which it has been in Future ownership. The table on the second bullet, the benefits of the platform, actually highlight of these brands, only one of them has been migrated to Vanilla. So there's significant growth year-over-year in audience in September due to the sharing of the Future best practice and helping editorial staff work out how to get the best out of their content in the digital landscape. The third bullet point looks a little bit about the progress on eCommerce. And the very big spike is Prime Day, so we can't claim that's all down to the Future operating model. However, what you can see is clear momentum in terms of eCommerce revenues week-by-week as we've been sharing the Future best practice and deploying the Hawk technologies. And then on the fourth chart, you can see what we already indicated, which is the synergy savings have all been agreed and contracted and are ahead of our expectations, delivering in the region of GBP 20 million over the next 12 to 18 months. However, I want you to go on Slide 31 to just take a little bit of a closer look at one of our new brands, Fit&Well. I think Fit&Well is just a great case study of the opportunity of what lies ahead at TI. Fit&Well was a loss-making magazine. And instead, we launched a new brand, fitandwell.com, repurposed the content online. We've brought in content from Barcroft. You can see here a picture of the video. And as you can see, we're already ranking on the first page of Google for eCommerce terms. And you can see here that the U.S. audience is growing 815%, which I know are very small numbers. But nonetheless, considering it's only been live for 4 months, is an incredible result and a really good indicator of what lies ahead with this transaction. And so it's with that backdrop that we felt very excited about the opportunity around the GoCo Group. And therefore, I'm very delighted to have the opportunity to talk to you a little bit today about our recommended offer. So if we could just turn to Slide 33, you'll recognize this slide again, as I said, really is my favorite one in the whole company. Now the reason why I want to start with the strategy is to really emphasize the point around the fact that the recommended offer for Glasgow -- for GoCo, sorry, codename, apologies, is that it's been very much in line with our strategy. And we've been thinking over the last few years about how we can best meet our audiences and what their needs are. And as we began to think about that over the last couple of years, what became really clear was that we were brilliant at driving intent, as I've just outlined already. And we were helping people meet their needs. And so when you think about the fact that the Future content sits largely at the top end of the purchase funnel, where we write content that helps people work out and answer the questions that they have, whereas the GoCo business sits at the bottom end of the purchase funnel, helping people find the best deals in the market. And so we felt that the bringing of these 2 propositions together was a real opportunity to create a unique opportunity for the group, strengthening its scale -- Future's scale and intent and intent in their purchases while also helping to share best practice within the GoCo business. And we think the combination of the 2 groups have a great opportunity. Slide 34, however, is just a recap on the previous slide. I'm going to skip it on rather than repeat what we've talked about earlier and move instead on to Slide 35. For those of you who are not familiar with the GoCo business, I thought it might be helpful to just explain in a little bit more detail what we're recommending to buying. GoCo has 3 different elements to its business and operates very much as 3 distinct stand-alone units. The first piece is probably you're most familiar with, which is a price comparison business, which includes the leading brand, GoCompare. However, within there also is a platform services portfolio, where they've built a really clever piece of technology called GoDemand. And what GoDemand enables is the price comparison technology to be used on other website platforms. And we'll come on to that in a little bit more detail in a moment. On the right-hand side of this chart, what you can see is the MyVoucherCodes business, which sits in the rewards division of GoCo. And again, that's a really interesting opportunity for the Future business. We'll come on to talk about that again in a moment. And then one of the things that we particularly like about the business is the disruptive culture that it has. And the AutoSave business is a real change in how people think about helping consumers save money. The GoCo business has invested significantly in this year and the last 2 years. And this represents a real opportunity for us to take market share in a leading position. I should just say at this point that one of the things we particularly like about the GoCo business is the clear cultural alignment with Future. GoCo is a business that's based in the southwest of England. It was founded by an entrepreneur. It's heart is in technology. It's all about being a disruptor in its industry. And it wants to help consumers save money. When I talk about that, I could be talking about Future. And so we really do feel that these 2 businesses are very closely culturally aligned. On Slide 36, we outline the kind of the key 6 strategic opportunities that we have identified as part of the transaction. However, rather than walk through these on this slide, I'd much rather take you through them in a bit more detail. And therefore, if you don't mind, could we move on to Slide 37? One of the key points is that we see an opportunity to strengthen our global specialist media platform. And I thought it would be helpful on bullet point 1 just to bring that to life for you in a bit more detail. As I mentioned, the GoCo business has developed the GoDemand technology, which allows it to offer the price comparison capability to other brands without having to take the GoCompare brand. And so what we see here is the opportunity to add a new spoke into our wheel. We see a real opportunity to scale out price comparison across our entire portfolio. And let me just bring that a little bit more to life for you. Today with Hawk, we help consumers find the best deals. But that's very much driven by product. So the Hawk technology is focused on a make-model specification, so best laptops, best headphones, best copy machines. What price comparison technology does is exactly the same thing but based on services: best broadband deals, best energy deals, best home insurance deals, best car insurance. And so it's that technology which we imagine becoming another widget on many of our brands. And I'll come on and illustrate that again on the second bullet. What we also acquired through the acquisition of the GoCo business is a new vertical in financial services. A little known fact that GoCo actually has a number of consumer-facing brands, one of which is called Pocket Your Pounds. And we see real opportunity to use this brand as the beginning of a tentpole in our expansion within the financial services market. We'll be moving that one to Vanilla, and we see opportunity to deploy the Future best practice there. And then as already mentioned, the GoCo business has very much been focused on creating proprietary technology. And so it enhances our existing tech stack and strengthens our proposition. So as I just alluded to, on this second bullet, you can see where we see adjacent widgets to monetization. One of the things we're really good at, at Future is knowing what our audiences. Need, and that's what's been underpinning the north of 50% CAGR growth in our audiences for the last 4 years. And by knowing what our audiences need, we identify the next most relevant thing for them when we create content. And what you can see here is that today, we already write content on Real Homes about energy comparison. And we write content on T3 about broadband comparison. We write about mortgage rates. And if you went through all of our brands, you would see that we write this content across numerous different sites. However, an ability to monetize that, which is clearly a key part of the Future strategy, requires us just now to rely on a third party's technology because our technology doesn't support the monetization of these services. And that's where the GoDemand technology plugs in to our brands, allowing us to add an extra offering to our consumers. As Future is the largest publisher of home-based content in the U.K. today, we see a real opportunity to extend around home savings, around insurance, utilities and services, a really brilliant opportunity. If we move on to Slide 38, what we see on the third bullet is an opportunity to grow the addressable market. And as I've talked about earlier, Future sits at the top of the purchase funnel. We talk about what we think is useful. We talk about the pros and cons of different options. And then through our technology, we bring people the best prices. The GoCo business sits at the bottom end of the funnel, where largely the differentiator is price alone. And as a consequence of that, they actually own a business called MyVoucherCodes, which is a great site for finding best voucher code deals. And if you want to find voucher code deals for Black Friday, I would highly recommend that you all go there, which is on this Friday coming. However, at Future, what we do is we write advice as well as helping people find the best voucher codes. And so while the MyVoucherCodes business today makes about GBP 4 million to GBP 5 million of revenue, some of the traffic is coming through PPC. At Future, our Marie Claire brand also offers advice around the best makeup and beauty deals. However, our voucher code business on Marie Claire today makes just under GBP 1 million in revenue. But we don't pay any money in PPC to drive the traffic there. We do that all through organic search. So when you think about the opportunity to expand out the affiliate opportunity through voucher code advice across our many brands, and you can see the range that MyVoucherCodes offers, which is for homes, gardens, babies, pets, technology, and then you think about the brands we offer, you can see why we're so convinced of the industrial logic here of our ability to grow the market and to grow them more cost effectively, which is a nice segue into the fourth bullet point, which is lowering the customer acquisition cost. And I suspect this is probably the most intuitive place when people think about this transaction of an opportunity. As you'll all be aware, the GoCo price comparison business drives most of the traffic to, say, through marketing, and it's a fantastic brand and has a real great trust in the U.K. consumers' mind. But a lot of that activity is also driven through PPC. Here, at Future, we're pretty expert on how to write content for SEO. And as you can see on this slide in the very small form, which is why I have my glasses on, that the TechRadar business today already outranks GoCompare on energy comparison. And the TechRadar business today already outranks Compare the Market on broadband. So we already rank really well for content in these categories. The problem, as I said before, was our ability to monetize it. We believe we can share that expertise to help the GoCompare business improve its search rankings and increase the volume of traffic that comes to that site naturally. Now moving on to Slide 39. We think through the acquisition, we can create with these 2 businesses a number of unique propositions. And I think one of those is around really helping consumers and helping advertisers find premium audiences. The GoCompare business has a really deep knowledge set of its customers and has a great relationship with them and lots of insight. And we know that they're interested in saving money. At Future, we acquired the SmartBrief business 18 months ago, which has a proprietary tech, which allows us to create almost automatically e-mail newsletters on any subject matter through the ability to scan what's out there already. When you take the SmartBrief technology and the ability to create a home savings guide or all the things you need to know about buying a car guide and then the audience set that the GoCompare business has, we believe there's a real opportunity here to add advice and help. What's particularly pleasing is that the SmartBrief advertising yields, we normally put one ad in a SmartBrief, are around 5x the yields that we get on digital advertising. So as I was saying earlier, in a market where advertisers are looking to ensure they actually meet their target audiences, this is a great opportunity where we can use our sales team and our technology, combined with the GoCompare customers and audiences, to meet people's needs and also at the same time take an opportunity to deliver further monetization. And so then finally, we see a real opportunity to have integrated technology platforms. As I mentioned, we'll be moving Pocket Your Pounds on to the Vanilla platform and ensuring we distill the Future best practice. One of the great assets at GoCo is the work they've been doing on PPC decision engines. And while we don't spend a lot of money at Future on PPC, we do, do it with regards to helping the marketing of our subscriptions, a key focus area for us, and also in our event website traffic. We also use some PPCs to support our B2B lead generation business. And so the ability to share best practice from the GoCo business to Future, I think, will help us reduce our marketing spend and it will help us reach more customers. So overall, we really do think there is compelling logic for this acquisition, where together, we can do something quite unique, helping Future customers find the best deals, helping GoCompare reach more audiences and then creating in the middle a unique proposition. Moving then on to Slide 40. Well, the industrial logic is clear. It's also very important that the transaction drives significant value for shareholders. And we believe this is a real opportunity to drive value over the long term. The combination creates increased scale with an audience reach of north of 420 million users per month while both businesses have fast-growing revenue streams, which have both proved resilient during the pandemic. We've identified GBP 10 million of cost synergies. And these have been factored into our numbers. And as a consequence of that, the transaction will be immediately earnings per share accretive and double -- and materially accretive within the first 12 months of ownership. Our ROIC will be ahead of the Future WACC within the third full year following our ownership. And we continue to expect the businesses to be highly cash-generative and therefore to quickly delever, which is a good point for me to let Rachel do some talking.

So thank you, Zillah. So new debt has been raised, GBP 215 million, to finance the cash element of the consideration and to extinguish GoCo's debt balance on completion. The facility is provided by Future's existing 3 lenders. And Future's existing revolving credit facility of GBP 135 million remains in place. Just also as a reminder from the Future slides, headroom on the GBP 135 million facility was over GBP 70 million at Future's September year-end. The cash-generative profile of both of these businesses means that the group rapidly delevers to below 1.5x. And then also highlighted here is that both businesses have relatively low levels of capital investment expenditure. In terms of dividends, Future will maintain its progressive dividend policy. If I could move you to Slide 42, which describes the timetable. We anticipated completion date in quarter 1 of 2021, subject to Future and GoCo shareholder approval. We also require FCA change of control clearance but no other regulatory clearances. The change of control notification has been submitted to the FCA. We don't envisage there being any major regulatory issues with a proposed change in control. To get us to the completion date today, the offer announcement has been published. By mid-December, we will then be posting the circular, prospectus and scheme document. Future and GoCo shareholder meetings will be scheduled for mid-January. And we expect to receive FCA clearance by the end of February, early March. Back to you, Zillah.

Thanks very much, Rachel. So then moving on to Slide 44 and in summary, it really has been an unprecedented year. And I think Future has continued to deliver exceptional performance, really underlining the strength of our business model, which performs in good times and in hard times. Our operating model has proven scalable and adaptable while the values-led execution in our business has enabled us to respond rapidly to this changing landscape. We continue to focus on providing our knowledge and expertise to our audiences, making sure we -- our content meets our users' needs while the investments in editorial and technology allow us to continue to grow our business. We created unique value through the acquisitions we've undertaken during the last 12 months. And we're delighted with the performance of TI Media, ahead of our expectations despite the challenges of integrating during the pandemic. And therefore, we're really excited about the ongoing opportunity represented by the offer for GoCo Group plc, which we think accelerates the strategy of the business, creating value with a management team that have a proven track record. We're really pleased about the way the new year has started. And our diversified strategy is continuing to work and very much offsetting the impact of any ongoing macro uncertainty. And as a result, we expect the trends that we saw in FY '20 to continue through into FY '21. Thank you very much for your time. And we'd be happy to take any questions.

[Operator Instructions] We'll now take our first question from Nick Dempsey from Barclays.

So I've got a few questions for you. Can you hear me all right?

Just speak a little bit. We can hear you now.

So yes, the first one, I mean, in GoCo's whole market, everything has been driven by significant marketing spend for a very long time, it's been very competitive. Is there a risk that if you try to dial back marketing, lose traffic in other ways and a lot of guys spend more, do you find yourself losing share quite quickly? That's the first question. Second question, can you talk about the auto switch business at GoCo? I mean, is that notably loss-making? I'm just trying to think about that from the point of view of thinking about the valuation of GoCo, whether there's an interesting business [ repeat ] value in there that will be loss-making on the auto switch side. And my third question, it sounds to me from your outlook comments that there is no reason why we shouldn't [indiscernible] FY '20 [indiscernible] consensus into FY '21. Am I reading that right from reading the words you put out?

Thanks so much, three brilliant questions. So the first one is around marketing spend. And I think I'm really pleased you raised it because I'm glad I hope I didn't give you the wrong impression. We have no intention of reducing spend. What we see is the opportunity to grow the market through our SEO best practice. And so we think that the GoCompare team are doing a fantastic job building the brands that are just now. But we think that through the SEO practice, we can actually reach further market and expand the opportunity there. In terms of the auto switch business, again it's a really fantastic asset. And I said earlier, the team have invested heavily in it over the last couple of years. And as you correctly point out, it has been historically loss-making. As you have seen from the GoCo update at the end of September, user numbers were north of 600,000, to get that number right, which I think is 150% growth year-over-year, so a really fantastic customer acquisition. One of the most expensive part of a business like that is that initial kind of customer acquisition. Once you've got them into the auto switch business, you then have very strong retention rates. And so very quickly, you get to see something which is much more profitable. So while I can't tell you in exact detail the answer to your question, I would be strong of the view which is that the investment has been behind us and we look forward to the opportunities ahead. In terms of the track record, I guess what I would say to you, Nick, is that we have had a historical track record of strong performance. And our diversified business model has shown to work through, as I said before, good times and bad times. And we see no reason not to expect those trends to continue.