Interim Management Statement

RNS Number : 9143G

Future PLC

10 February 2010

 



10^th February 2010

Future plc

Interim Management Statement

Future plc, the international special-interest media group, today publishes its Interim Management Statement for the three months ended 31 December 2009.

Trading performance

Trading has continued in line with the Board's expectations, as set out in the Group's preliminary results announcement on 26 November 2009.

·    Trading in Q1 was challenging with total revenue for the quarter falling by 12% to £36m

·    Within our portfolios, Active, Technology and Music & Movies continued to show resilience, while Games experienced tough comparatives and a very challenging market

·     All costs under control, mitigating revenue reduction

·     Focus on debt reduction continues with net debt down 31% year-on-year

Business update

In the UK, which accounts for over two-thirds of Group turnover, the strength of our special-interest portfolio model continues to help protect us from the worst of the media recession. Circulation revenue decline in the quarter has slowed (down 4% compared with 7% in FY09) despite a particularly challenging games market which saw 40% fewer AAA or A rated games released year-on-year. There were robust performances in other parts of the portfolio, most notably in music, sports, crafts and digital creative.

In the US, we are seeing improvement at newsstand after the fallout of last year's industry-wide wholesaler disruption.   Newsstand is stabilising; retail footprints have been re-established and we have negotiated a new agreement with our distributor, Time Warner Retail, that gives greater certainty on magazine returns.  Circulation revenue fell 13% against 26% for FY09, and with fewer titles, but more importantly we are seeing levels of returns less volatile than in 2009.  In advertising, where 50% of revenue is games-dependent, the tougher comparatives year-on-year were felt more acutely.

Globally, we have seen our customer publishing revenues increase 10% year-on-year, and we have already achieved full year budget new business wins.  Subscriptions for the January launch issue of the World of Warcraft magazine were 30% above our forecast.

The table below summarises year-on-year changes in revenue:

	UK	US	Group
	% change	% change	% change
Circulation revenue	(4)	(13)	(6)
Advertising revenue	(13)	(32)	(20)
Total revenue	(6)	(20)	(12)

All comparisons are with the three months ended 31 December 2008.  The most significant foreign currency affecting the Group is the US Dollar, which weakened by 4%.  71% of Group revenue is generated by our UK business and 29% by our US business.  Currency fluctuations had a de minimis impact on operating profit this year.

Financial position

The Group is strongly cash generative, with a healthy balance sheet.  Net debt at 31 December was £20.3m (1.78x bank EBITDA), down 31% year-on-year. The Group continues to operate within all bank covenants.

Outlook

Although the broader macro-economic outlook indicates that both the US and UK are pulling slowly out of recession, and there are some signs of a return of confidence, projected growth rates are very low and advertising budgets remain soft against a fierce competitive backdrop which is putting pressure on yields.  For Q2, we expect January's adverse weather conditions to have some impact on UK newsstand performance in the month, but do not expect this to be significant.  Overall, we expect trading conditions to remain challenging throughout 2010. 

Our focus is on returning our US business to profit: managing costs, protecting yields and targeting investment in new initiatives where we see opportunities for future growth.

Stevie Spring, Future plc Chief Executive said:

"We expected the first quarter to be tough, and that has proven to be the case particularly in our Games segment.  We expect trading to remain under pressure throughout 2010, so we are managing the business appropriately, while also ensuring our strategy remains on track.  However, there have been some very robust performances throughout the business and I remain confident that Future is as well positioned as it can be to benefit from any economic recovery."

AGM and next trading update

Future will hold its Annual General Meeting at 12 noon on Thursday 18 March 2010.  It expects to provide a pre-close trading update on 30 March.  

Enquiries:

Future plc
Stevie Spring, Chief Executive	Tel: [phone]
John Bowman, Group Finance Director	Tel: [phone]
Vicky Bacon, Head of Group Communications	Tel: [phone]
Financial Dynamics:
Charles Palmer / Tim Spratt / Nicola Biles	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, 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, photoradar.com and musicradar.com.  Future sells nearly four million magazines each month; we attract more than 27 million unique visitors to our websites; and we host 27 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.

 

END

 

 

IMSUGUUGPUPUGMB