40 1GM Thursday November 26 2020 | the times
Business
used to drive users to Gocompare.
“Financial services is something we’ve
been thinking about for a long time,”
Ms Byng-Thorne said.
It hadn’t crossed investors’ minds,
however. “Future’s offer for Goco is
sure to have surprised many,” analysts
at Jefferies, the investment bank, said,
adding that a counterbid from another
price comparison group “cannot be
ruled out”.
Sir Peter, Goco’s chairman, who has
pledged his 29.7 per cent stake to
Future’s offer, said that he was not infor £460 million in
2017.
Under Ms Byng-
Thorne, Future has
become a stock
market darling.
Founded in 1985, in
its early years it was
best known for com-
puter-focused titles,
such as Amstrad
Action. It was listed
on the stock market
in 1999 and Ms1
Sectors of the economy
“spared” the worst effects of
Covid-19 will be most exposed
if the UK fails to strike a free trade
deal with the EU, the Office for
Budget Responsibility said. A
no-deal Brexit could cut GDP by
2 per cent next year. Page 102
Amazon and Apple have been
accused of “dodging their
environmental responsibility”
for electrical products they sell.
MPs on the environmental audit
committee said the two added to
“a waste tsunami” involving
155,000 tonnes of phones, tablets,
and laptops. Page 203
Millions of members of
traditional pension schemes
will receive smaller annual
upgrades after the government
pressed ahead with plans to
change the definition of the retail
prices index, the cost-of-living
barometer. Holders of index-linked
government bonds were told they
would receive no compensation.
Page 394
Partners of Bell Pottinger
have yet to repay £1.8 million
in “excess drawings” that they
took from the PR business before
its collapse, according to
liquidators. An unnamed partner
is being pursued for an additional
sum via litigation. Page 395
More than £300 million was
wiped off the stock market
value of Future after the
magazine publisher rattled
investors by offering to buy the
owner of Gocompare. Shares in
Future fell 16.7 per cent after it
revealed a deal worth more than
£500 million to buy Goco. Page 396
Business groups gave a
lukewarm welcome to the
chancellor Rishi Sunak’s
spending review, which included a
new national infrastructure bank,
funding for innovation, and
investment in helping unemployed
people back into work. Page 427
The owner of Penguin
Random House is to buy
Simon & Schuster for nearly
$2.2 billion to consolidate its
position as the world’s largest book
publisher. Bertelsmann, the
German media group, outbid
News Corp, the owner of Harper
Collins, and other rivals. Page 448
Shares in Slack, makers of the
communication software tool,
jumped by as much as a third
yesterday after it was reported
Salesforce had held talks to buy
the company. A deal, which is not
guaranteed, could value Slack at
more than $17 billion, The Wall
Street Journal said. Page 459
Virgin Money has chalked up
a third year of losses after
setting aside more than half a
billion pounds for defaults by
borrowers. Britain’s sixth biggest
bank said it expected borrowers to
start defaulting, with the biggest
losses coming from personal loans
and overdrafts. Page 4710
Costs racked up during
the coronavirus pandemic
have sent profits tumbling
at Babcock. The defence
contractor reported a 9 per cent
year-on-year fall in underlying
revenue to £2.2 billion for the half-
year to the end of September.
Page 49Need to know
Branching out
Goco share price
17 18 19 2020150p100500Goco’s brands
Gocompare
(price comparison website)
Look After My Bills
(energy auto-switch service)
Weflip
(energy auto-switch service)
My Voucher Codes
(discount voucher website)A deal without compare,
Publisher that became
the darling of small
investors insists strategy
is clear, Ben Martin
and Simon Duke write
Zillah Byng-Thorne has struck
eighteen deals over the past six years, so
it came as no surprise when the boss of
Future announced yet another take-
over yesterday morning. What caught
the Square Mile off-guard was the
identity of her latest target.
Future, whose titles include Practical
Caravan magazine and Techradar web-
site, is buying the company behind the
Gocompare price comparison website,
in a shares and cash takeover that val-
ued Goco at £594 million, although the
value of the deal fell after the publisher’s
shares declined.
It is Ms Byng-Thorne’s biggest deal
by far, eclipsing her £140 million
purchase of TI Media, the owner of
newsagents’ staples ranging from
Marie Claire to Country Life, which was
completed in April.
The expansion into price comparison
also represents a departure for the
company, which has won a devoted
following among small investors.
Previously, Ms Byng-Thorne has
trained her sights on niche publishers
and niche websites, whose articles
Future has populated with targeted
adverts and ecommerce links to
squeeze out extra cash.
Investors were clearly unnerved by
the shift and its shares slid by 328p, or
16.7 per cent, to £16.34. Ms Byng-
Thorne acknowledged that she had to
win shareholders over to the merits of
the takeover, but added that she was
“very confident that in the medium
term this will be judged as a fantastic
deal”.
Goco was set up in Newport, south
Wales, in 2006 at the kitchen table of
Hayley Parsons, an entrepreneur. It has
gone on to become one of Britain’s
leading price comparison sites used by
consumers to find deals on insurance,
credit cards, mortgages and energy. It
was owned by Esure, the insurer
founded by Sir Peter Wood, before
being demerged into a separately listed
business valued at £310 million in
November 2016.
Matthew Crummack, Goco’s boss
since before the Esure spin-off, has
pushed the company into the burgeon-
ing auto-switching industry and it has
two brands in this area, Look After My
Bills and Weflip, which automatically
move users to cheaper energy tariffs.
The owner of Zoopla tried to buy GocoByng-Thorne became chief executive
in 2014.
Her acquisition spree has propelled
an extraordinary rise in its share price,
which more than trebled in value last
year alone, making Future the best-
performing FTSE 350 stock in 2019.
Even after yesterday’s share price fall,
Future is valued £1.6 billion, up from
about £100 million when Ms Byng-
Thorne joined the business.
She has focused on buying fading
print titles and giving them a digital
overhaul. Future squeezes cash from its
websites by selling online advertising
and sprinkling reviews and articles
with “buy” buttons and “best buy”
offers. If a reader taps on a link, Future
earns a commission.
Full-year results released yesterday
showed that revenues had jumped to
£339.6 million in the 12 months to the
end of September, from £221.5 million a
year earlier. Pre-tax profits climbed
from £12.7 million to £52 million, boost-
ed by the group’s latest acquisitions.
Despite its stellar growth, the
publisher has its sceptics. In February
Shadowfall, a London-based short-
seller betting on a fall in Future’s shares,
issued a critical 68-page report in
which it raised doubts about the quality
of the businesses bought under Ms
Byng-Thorne.
The deal for Goco could raise
eyebrows among Future’s critics, given
that Ms Byng-Thorne has been a
non-executive director on the group’s
board since September 2017. She said
yesterday that she had recused herself
from Goco board meetings since
September and that the idea for the
acquisition had been developed by Pen-
ny Ladkin-Brand, Future’s chief strate-
gy officer.
“In the initial stage of the trans-
action, Penny was the key contact
because I don’t want there to be any
suggestion there’s anything other than
the best corporate governance,” Ms
Byng-Thorne said. She said that the
price comparison
website would fit
snugly with existing
assets. Future will be
able to create new
websites offering
advice on personal
finance, driving traf-
fic to its price compar-
ison service. It also
can insert links to
broadband and home
insurance deals into
existing websites, such
as House and Home.
She highlighted ex-
pertise in sending tar-
geted offers to readers,
which again can beProfiles
A
s her hunger for deals
shows, Zillah Byng-Thorne
is an executive who has
always been in a hurry (Simon
Duke writes).
A graduate of Glasgow
University, she was a trainee at
Nestlé, then qualified as an
accountant before moving into
corporate finance roles at HMV,
GE Capital and Threshers.
By her mid-30s Ms Byng-
Thorne was chief financial officer
of Auto Trader. She landed the
chief executive’s job at Future in
2014 when the company was a
print-focused publisher of niche
consumer titles. Since then, Ms
Byng-Thorne, 46, has acquired
an average of three companies a
year, expanding Future’s digital
presence and changing its
perception in the stock market
from a traditional publisher to
digital powerhouse.T
he £41.3 million in cash that
Sir Peter Wood will bank
from the sale of Goco, as
well as the stake in Future he will
be left with, adds to his already
substantial fortune (Ben Martin
writes). Sir Peter, 74, is a veteran
of the insurance industry, having
co-founded Direct Line 35 years
ago and later set up Esure, which
he sold to Bain Capital for
£1.2 billion in 2018. He is
estimated to be worth
£790 million, according to The
Sunday Times Rich List.
The Goco sale is a turning
point for Sir Peter. He will no
longer be a board director of any
London-listed companies, but he
has business interests including a
big stake in Plymouth Rock, the
American insurer, and property
investments in
London and
Florida.AA reaches end of the road as public company
The AA is to return to private equity
ownership after six years as a publicly
quoted company.
During that time shares in the car
insurance and breakdown business —
which were listed at 250p — have
peaked at 416p in 2015 and then fallen
as low as 15p during the Covid-19 out-
break. It is being bought for 35p a share
by Towerbrook and Warburg Pincus.
Creaking under £2.6 billion of debt,
the legacy of the £3.1 billion millstone it
inherited from the company’s last pri-
vate equity exit, the AA is valued at only
£219 million in the recommended cash
deal. At its flotation in 2014 it was val-
ued at nearly £1.4 billion.
The AA board has backed the take-over and conceded that the burden of
that debt had left it unable to invest to
grow.
The AA was founded in 1905 as the
Automobile Association and was
owned by its members until it was de-mutualised in 1999. It used to market
itself as the fourth emergency service.
For a time it was a sister company to
British Gas in the Centrica group. It
swiftly changed hands to become a
sister company to Saga, the over-50sholidays brand, before being spun out
and floated.
Towerbrook is a private equity firm
based in London and New York with
$13 billion under management. It was
once part of the George Soros empire
and has made a name for itself investing
in the health sector. Warburg Pincus is
an American private equity firm with
$62 billion under management. Many
of its acquisitions have been in techno-
logy and pharmaceuticals.
In a statement, the private equity
firms said that the core strengths of the
AA lay in its brand, market-leading po-
sitions and skilled workforce. “How-
ever, the consortium believes that the
AA has been held back as a result of
underinvestment and high levels of
debt [and] needs committed, long-termowners to support the growth of the
business and to invest in critical areas
such as IT transformation, which in
turn will generate new and better
opportunities for customers.
“The consortium believes the insur-
ance business will be a key growth
driver.”
John Leach, 72, chairman of the AA,
said: “The board has concluded that the
acquisition, which offers certain cash
value to the AA’s shareholders as well as
a significant equity injection to reduce
indebtedness, is in the best interests of
the AA, its shareholders and wider
stakeholders and as such is unanimous-
ly recommending the acquisition to
shareholders.”
Shares in the AA rose 2¼p, or 7.1 per
cent, to 34p, valuing it at £198 million.Robert Lea Industrial Editor£1.4bn
Value of AA at flotation in 2014
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