Interim Management Statement

RNS Number : 0527A

Future PLC

29 July 2008

 



29 JULY 2008 

FUTURE plc

Interim Management Statement

Future plc, the international special-interest media group, today publishes its Interim Management Statement for the nine months ended 30 June 2008.

Group headlines:

• Revenue up 1%

• Advertising up 4%

• Online advertising revenue up 39%

• Costs remain firmly under control 

• Progress on next phase of digital strategy

Unless otherwise stated, all comparisons are with the normalised results for the nine months ended 30 June 2007 and all percentages shown in this statement are calculated in constant currency. Normalised results for the prior period exclude revenues and costs of activities closed or divested prior to 30 September 2007 (51 titles plus the disposal of our previous French and Italian subsidiaries).  

Review of trading for the nine months ended 30 June 2008

Revenue for the nine-month period was up by 1%. This reflects revenue growth of 5% in Q3, compared with the flat position reported in the half-year to 31 March. 71% of Group revenue for the nine months was generated by the UK business and 29% by Future US.

Third quarter revenue growth of 5% reflects 2% growth in circulation revenue and 6% growth in advertising revenue.

Advertising revenue for the nine months increased by 4% while circulation revenue was flat. A 39% increase in online advertising revenue more than offset a 2% reduction in print advertising revenue. Online now accounts for 19% of advertising revenue.

Following strong Q3 revenue growth in customer publishing, Future Plus revenue for the nine months is now only 7% below the prior year (compared with 16% behind as at 31 March).

Operating costs for the nine months rose by less than 2%, reflecting planned levels of online investment, and are running within budgeted levels. The Group's estimate of its EBITA for the full-year is unchanged.

Active portfolio management included the closure of the loss-making US Snowboarding magazine and the sale of the UK women's title Health & Fitness.  Print launches during the last twelve months have included a small number of monthly and bi-monthly magazines including PhotoPlus, You Can Craft, our Quick and Easy guides, Girl Gamer and CVG, and we have continued our programme of product redesigns, relaunches and 'specials'.

We have made milestone progress in our digital strategy. In June we launched Qore, a new 'digital edition' for Sony US across the PlayStation 3 Network in North America, and this has attracted very strong interest from advertisers in its first three editions. Also in June, we acquired BallHype Inc in the US (for £1.5m). This company has developed web technology for advanced aggregation of content which we plan to incorporate and expand across a number of web properties over the next two years.

Group Balance Sheet

The Group maintains a healthy balance sheet, with a comfortable level of net debt. As at 31 March 2008 this amounted to £25.1m, representing 1.63 times bank EBITDA, well within the limit of 2.5 times under the terms of the Group's credit facility which runs until April 2010.

Stevie Spring, Future Chief Executive commented:

'We have continued to make good progress during the third quarter of our financial year - particularly in digital development.  

'While the market remains tough, Future is proving resilient and we remain firmly on track for a satisfactory outturn for the full year.'

Future will provide a pre-close update during the last week of September and will announce its annual results (for the year to 30 September 2008) on Wednesday 26 November 2008.

Enquiries:

Future:
Stevie Spring, Chief Executive Tel: [phone]
John Bowman, Group Finance Director Tel: [phone]
Vicky Bacon, Head of Group Communications Tel: [phone]

Hogarth Partnership:
James Longfield / Ian Payne Tel: [phone]

About Future

Future plc is an international special-interest media group that is listed on the London Stock Exchange (symbol FUTR). Founded in 1985 with one magazine, today we have operations in the UK and US creating over 180 publications, websites and events for people who are passionate about their interests. We hold strong market positions in games, film, music, technology, cycling, automotive and crafts.  Our biggest-selling magazines include T3, Total Film, Digital Camera, Fast Car, Classic Rock, Guitar World, Official Xbox Magazine, Official Playstation Magazine, Nintendo Power and MacLife. Online, our websites include gamesradar.com, bikeradar.com, techradar.com, and musicradar.com. Future sells over 4 million magazines each month; we attract more than 11 million unique visitors to our websites; and we host 16 annual live events that attract hundreds of thousands of enthusiasts. Internationally, Future is both the UK's largest licensor and the largest exporter of magazines with our content appearing in 90 countries worldwide.

  Key performance indicators for the six months ended 31 March 2008:

The table below sets out for ease of reference the key performance indicators as published in the Annual Report 2007 and Interim Report 2008.  

Key performance indicators	Six months     To 31 March 2008	Year Ended 30 September 2007
Growth in revenue (normalised at constant currency)	Flat	Flat
EBITAE operating margin (as a %)	8.9%	8.4%
Absolute EBITAE (in Sterling)	£7.0m	£14.0m
Change in adjusted earnings per share (as a %)	Flat	+ 14%
Number of magazines sold per month	4.2m	4.0m
Proportion of magazines sold from total number printed	See notes 1-3	See notes 1-3
Proportion of Group's business derived from our brands              compared with partnership publishing	77:23 (note 4)	79:21 (note 4)
Number of unique users logging on to our websites per month	11m (note 5)	10m (note 5)
Growth in total advertising revenue (as a % normalised at constant currency)	+ 4%	+ 3%
Proportion of advertising revenue that is online (as a %)	19%	14%
Human Capital	See note 6	See note 6
Net bank debt	£25.1m	£24.3m

Notes

• The majority of magazines printed by the Group are sold, and those unsold are mainly recycled and used for newspaper production. The precise proportion sold at newsstand is a detailed KPI each month for every title. However, the Group believes that it is commercially sensitive to disclose these percentages, since competitors typically do not release this information. Magazines printed for subscription have no wastage.

• In the UK 80% of magazines (by volume) are sold at newsstand. Our overall UK average newsstand efficiency has improved further in 2008 by 2% compared with the first half of 2007. Future has increased the proportion of magazine volume sales derived from subscription rather than newsstand, from 18% to 20%. The majority of UK revenues for magazines are derived from cover price.

• In the US 27% of magazines (by volume) are sold at newsstand. The majority are sold by subscription at heavily discounted prices, and the majority of magazine revenues are gained from advertising.

• Partnership publishing represented 23% of normalised 2008 Group revenue for the first half of 2008. This category includes business from our Official magazines published for Microsoft (Xbox 360 and Vista), Sony (PlayStation) and Nintendo, plus customer publishing activities. The majority of the Group's revenue is generated from our own brands.

• For each of our websites we know the number of page impressions and we know the number of unique visitors to that website. We do not know how many unique visitors visit more than one of our websites. The number presented here is the simple total of each website's average monthly number of unique visitors.

• Human Capital is the Group's most important resource, with 1,250 employees. In the running of our business, the most important focal point is the publisher responsible for each magazine and website. We focus on retention of key employees to drive our business. Equally, we believe in refreshment of the team with new people and new ideas.

 

END

 

 

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