Interim Management Statement

RNS Number : 2811M

Future PLC

27 January 2009

 



27 January 2009 

Interim Management Statement

Future plc, the international special-interest media group, today publishes its Interim Management Statement for the three months ended 31 December 2008.

Trading performance 

Future's special-interest focus and portfolio management approach continue to provide the Group with resilience in very challenging markets.  

• Revenue of £41m was up 1% for the quarter, flattered by exchange rates

• Increases in advertising and other revenue streams offset a 2% decline in circulation revenue

• A 25% increase in online advertising more than offset a 4% decline in print  

• Costs remain firmly under control

• The Group maintains a healthy balance sheet with a comfortable level of net debt

	% change	% change in constant currency
Circulation revenue	(2%)	(8%)
Advertising revenue	+ 1%	(9%)
Customer publishing	+ 24%	+ 13%
Licensing, events & other	+ 8%	+ 6%
Total Revenue	+1%	(7%)

All comparisons are with the 3 months ended 31 December 2007. The most significant foreign currency affecting the Group is the US Dollar which strengthened by 23% in the first quarter to 31 December 2008. 71% of Group revenue is generated by our UK business and 29% by our US business.

Stevie Spring, Future plc Chief Executive said: 

'Our focus this year is on guiding our business effectively through the uncharted waters of the current macroeconomic environment and ensuring we remain on course to deliver sustainable growth in the mid-term. While of course we're not immune to current challenges, we're mitigating these through the active management of our portfolio and through building in greater cost flexibility. We remain confident that we're in the best shape we can be to deal with whatever challenges lie ahead and are on track to deliver against expectations for the full year.'

Business update 

Across the Group, while we've seen tough conditions at newsstand, subscriptions continued to hold up well in the quarter and now represent almost half of magazine sales by volume.  

In North America, where last year 45% of our revenues were from advertising, we have more exposure to the generic advertising market and therefore to current advertising budget volatility. In the UK, the majority of our revenues are from circulation and our UK advertising revenues are predominantly endemic (i.e. specific to their host sectors such as games, cycling, music).

In Games, our single biggest portfolio (comprising 32% of our business in FY08), we had a challenging quarter, driven by an accelerated decline in PC gaming and the very tough US advertising environment.  

In our other three portfolios - Technology, Music & Movies and Active (which together comprise over two-thirds of our business) - we saw continued resilience at newsstand and in advertising.

We have continued our focus on active portfolio management in all areas of the business, launching a new magazine The Knitter in January, trialling a new magazine, Triathlon Plus, as an extension of our cycling portfolio, and introducing a number of successful special editions.

We have also continued to invest in our developing digital business and have made good progress. Online advertising revenues increased 25% in the period and now represent 25% of total advertising revenue. Web traffic increased across all of our websites to more than 20 million unique users a month (September 2008: 18 million unique users).  

FuturePlus, our customer publishing business, has secured a number of projects in the period and increased revenues.

We continue to keep a tight control of costs.

Trading environment

At a macro-level, the trading environment continues to deteriorate, with overall UK and US advertising budgets softening and very tough conditions at newsstand. In the US, in particular, market visibility is decreasing.  

Outlook

While these market conditions and volatile currency movements are adding complexity to our trading position, we expect our reported EBITA outturn for the full year to be in line with market expectations. This reflects the resilience of our portfolio, our continuing active portfolio management, cost agility and the positive effect of a strengthened US dollar.  

Next trading update

Future will provide a pre-close trading update on 30 March 2009 and will announce its Interim Results (for the half-year to 31 March 2009) on Wednesday 20 May 2009.  

Enquiries:

Future:

Stevie Spring, Group Chief Executive:                                                                               020 7042 4007

John Bowman, Group Finance Director:                                                                            020 7042 4031

Vicky Bacon, Head of Group Communications:                                                               020 7042 4033

Hogarth Partnership:

James Longfield / Ian Payne:                                                                                             020 7357 9477

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, US and Australia creating over 180 special-interest 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, Maximum PC and MacLife. Our websites include gamesradar.com, bikeradar.com, techradar.com, and musicradar.com. Future produces over 4 million magazines each month; we attract more than 20 million unique visitors to our websites; and we host 25 annual live events that attract hundreds of thousands of enthusiasts. In addition, Future exports, syndicates or licenses its publications to 90 countries internationally, making us the UK's number one exporter and licensor of monthly magazines. 

This Interim Management Statement (IMS) is prepared for and addressed only to the Company's shareholders as a whole and to no other person. The Company, its directors, employees, agents or advisers do not accept or assume responsibility to any other person to whom this IMS is shown or into whose hands it may come and any such responsibility or liability is expressly disclaimed. Statements contained in this IMS are based on the knowledge and information available to the Directors at the date it was prepared and therefore the facts stated and views expressed may change after that date. By their nature, the statements concerning the risks and uncertainties facing the Group in this IMS involve uncertainty since future events and circumstances can cause results and developments to differ materially from those anticipated. To the extent that this IMS contains any statement dealing with any time after the date of its preparation such statement is merely predictive and speculative as it relates to events and circumstances which are yet to occur. The Company undertakes no obligation to update these forward-looking statements.

  Key Performance Indicators

The table below shows the Key Performance Indicators for 2007 and 2008. These were selected last year by the Board after considering the implications of the Companies Act 2006 and other regulations and guidance in this area. Some of them are statistical indicators, others require more commentary as explained below.

Key performance indicators for the year ended 30 September	2008	2007
Growth in revenue (normalised at constant currency)	+ 2%	Flat
EBITAE operating margin	9.1%	8.4%
Absolute EBITAE	£14.9m	£14.0m
Change in adjusted earnings per share	+ 12%	+ 14%
Number of magazines sold per month	4.3m	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	76:24 (note 4)	79:21 (note 4)
Number of unique users logging on to our websites per month	18m (note 5)	10m (note 5)
Growth in total advertising revenue (as a % normalised at constant currency)	+ 3%	+ 3%
Proportion of advertising revenue that is online	18%	14%
Human Capital	See note 6	See note 6
Net bank debt	£21.9m	£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 decreased by 1% compared with 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 29% of magazines (by volume) are sold at newsstand. Our overall US average newsstand efficiency has increased by 2% compared with 2007. The majority are sold by subscription at heavily discounted prices. The majority of magazine revenues are from advertising.

• Partnership publishing represented 24% of 2008 Group revenue. This category includes business from our Official magazines published for Microsoft (Xbox 360 and Vista), Sony (PlayStation and Qore), Nintendo and Jetix, 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 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 1,253 employees (as at 30 September 2008). In the running of our business, we focus on retention of key employees and in refreshment of the team with new people and new ideas.

 

END

 

 

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