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Why I’d buy this hot growth stock alongside IGAS Energy plc

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Specialist media company Future (LSE: FUTR) delivered pleasing full-year results today driven by organic and acquisitive progress towards what chief executive Zillah Byng-Thorne describes as an ambition to “build a global platform business for specialist media with data at its heart.”

A plan that’s working

She explains that the company aims to focus on enduring content that connects with a substantial and expanding audience base. The figures suggest that the plan is working with revenue 43% higher than a year ago, adjusted operating cash inflow shooting up 160% and adjusted earnings per share following close behind with a 144% rise.

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Acquisitions during the period of Imagine, Team Rock and Home Interest serve to increase the size and range of the firm’s offering. Meanwhile, we can see pockets of vibrant growth within the company’s overall revenue performance, such as a 34% organic advance in Media Division revenue, a 107% explosion in eCommerce takings and a 21% uplift from digital displays. Turnover from the magazine division ratcheted up 43% mostly powered by the firm’s acquisitions.

It seems to me that Future is adapting well to the needs of the modern digital media consumer, managing to secure more than 53m monthly online users during the fourth quarter of the trading year. That’s an 18% year-on-year improvement, 12% of which the directors chalk up as organic growth. The share price has responded well to the firm’s progress, up more than 100% since the beginning of 2017. Yet at today’s 385p, the forward price-to-earnings (P/E) ratio works out a little over 18, which looks manageable, suggesting further progress is possible if the company keeps up its strong operational performance.

Financial restructuring boosts growth prospects

I reckon Future could sit well in my portfolio alongside onshore oil & Gas exploration and production company IGAS Energy (LSE: IGAS), which continues to generate exciting potential and is moving closer to profits. After a major financial restructuring and fundraising event earlier in the year, the directors reckon the firm has the capital to deploy on growth projects across its conventional assets and a US$240m carried work programme on its shale acreage. At current oil prices, cash is flowing into the coffers, which bodes well for continuing progress alongside an already well-funded balance sheet.

IGAS claims to be one of the leading producers of hydrocarbons onshore in Britain and in September’s interim report, chief executive Stephen Bowler told us that the capital restructuring has enabled the company to bring forward an active programme of maintenance.”  He also expects incremental projects to boost the firm’s conventional production levels over the medium term.

Mr Bowler reckons that IGAS looks set to contribute “a number” of drilling or flowing wells to what he sees as a “significant level of activity” onshore UK over the coming year or so. Such operational progress could help move the company ever closer to profits, which could result in progress with the share price to reflect the improvement. I think ‘right now’ could be a good time to focus on IGAS and to run your own analysis of the firm’s prospects.

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Kevin Godbold has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.


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