UK shares to buy: a top FTSE 250 stock

When looking for UK shares to buy, I recently stumbled across FTSE 250 stock Future (LSE: FUTR).

This company has gone from strength to strength over the past few years. And its growth has accelerated over the past 18 months. The magazine publisher has benefited as stuck-at-home consumers have turned to its online publications for entertainment. 

UK shares to buy for growth 

Future earns money via subscriptions and e-commerce transactions, such as advertising and affiliate revenue. According to the company, during the second half of its financial year, revenue growth from digital channels was “robust.”

The group’s top and bottom lines are also set to receive a boost from the acquisition of the price comparison website GoCo. Future has achieved £15m of cost synergies from this new acquisition so far. 

When I’m looking for UK shares to buy, I search for two essential qualities. Firstly, companies must show a robust competitive advantage. Secondly, they must have a proven track record of growth or growth strategy in place. 

The FTSE 250 company appears to have both of these. Future’s advantage is its size. In the competitive magazine industry, firms need to keep costs as low as possible. 

Future’s size means it can leverage accounting and human resources costs across the group without replicating functions. This could help management keep costs low and improve profit margins. 

This strategy could also help the company improve cash flow, which is vital for acquisitions. These have been a core component of the group’s growth strategy. 

To that end, Future recently announced the acquisition of Dennis, a leading consumer media subscriptions business. The business is paying around £300m for this asset, which reported revenue of £105m in 2020, and is forecasting growth of approximately 16% this year.

After the deal is completed, Future believes it can extract £5m of annualised synergies. It may also be able to enlarge the publisher’s subscriber base by leveraging its marketing power to reach more readers. 

FTSE 250 stock to buy 

While I think the company is one of the best UK shares to buy right now, I’m also well aware its growth strategy isn’t without risks. Future has been relying on debt to fund acquisitions.

It recently increased its borrowing facility to £600m to fund the Dennis deal. This could expose the firm to interest rate increases and leave it overstretched if it can’t get borrowing under control. The firm’s growth may also grind to a halt if it struggles to find any future acquisitions at attractive prices. 

Despite these risks, I’d buy the FTSE 250 company for my portfolio. Not only do I think it’s one of the best UK shares to buy right now, but I reckon as Future continues to expand, it has the potential to produce returns for my portfolio for years to come.