Interim results for the half-year ended 31 March

RNS Number : 2936I

Future PLC

29 May 2014

 

29th May 2014

FUTURE PLC

Interim results for the half-year ended 31 March 2014

Future plc (LSE: FUTR), the international media group and leading digital publisher, today announces its   un-audited interim results for the half-year ended 31 March 2014. The analysis in this announcement is, except where it refers to statutory results, based on normalised results. A presentation to analysts will be held today at 9am at the offices of Numis, 10 Paternoster Square, London EC4M 7LT.

Financial Highlights

	Statutory			Normalised*
	H1	H1	H1		H1
	2014	2013	2014		2013
	£m	£m	£m		£m
Revenue	48.7	54.6	48.5		48.8
EBITDAE**	(0.8)	2.2	(0.7)		1.1
Operating (loss)/profit pre exceptional items (EBITE)*** Exceptional items****	(2.4) (27.7)	0.7 -	(2.3) (27.7)		(0.4) -
Adjusted loss per share*****	(0.7)p	(0.2)p	(0.7)p		(0.5)p
Net debt (£m)	7.8	16.7

Summary

·      Normalised Group revenues down 1% to £48.5m

-       UK revenues up 2% to £41.5m, representing 85% of Group revenues

-       US revenue down 14% to £7.3m

·      Strong growth in Digital and Diversified revenues, up 9% to £16.8m******

-       Digital and Diversified revenues now represent 35% of total Group revenues

-       Digital and Diversified advertising represents 70% of total advertising revenues

·      Impairment charge of £26m booked in the period on the carrying value of print assets

Outlook

·      Disposal confirmed of Sport and Craft titles to Immediate Media for up to £24m; of which £22m in cash and £2m in working capital. Deal expected to complete during the summer.

·      Transformation programme underway; restructuring under new leadership team and proposed reduction in headcount of over 170 roles in UK; over 40 roles already cut in US

·      Future plc is historically geared to the second half, which we expect to continue driven by seasonality in core sectors and restructuring activity already undertaken in the first half

Peter Allen, Future's Chairman, said: "Whilst the Board is disappointed with the results for the first half of the year, we have already taken significant actions to address the fundamental issues. Since appointing Zillah Byng-Maddick as CEO on 1^st April we have completed a thorough review of the organisation. In the UK we are currently consulting with staff on a transformative restructuring programme which the Board believes will simplify our business, allowing it to thrive in an increasingly digital and mobile age, with a renewed focus on revenue and margin growth in core sectors.

"Today we also announce the disposal of our Sport and Craft titles to Immediate Media for up to £24m. These divisions are well managed and very successful parts of Future's portfolio and will continue to thrive under their new owners. However their disposal will enable Future to focus on the remaining lead verticals with an emphasis on the growing consumer technology market."

******

Notes
* Normalised results are presented to better reflect the current size and structure of the business and give a better indication of the performance of the ongoing business. The normalised results exclude revenues and costs relating to activities closed or divested between 1 October 2012 and 31 March 2014, but include any new activities launched in that period. Closed or divested activities are not such that they fell to be classified as discontinued under IFRS. The analysis in this announcement is, except where it refers to statutory results, based on normalised results.

** EBITDAE represents earnings before interest, tax, depreciation, amortisation and impairment of intangible assets and exceptional items.

*** EBITE represents earnings before interest, tax, exceptional items and impairment of intangible assets.

**** Exceptional items for 2014 include impairment of intangible assets of £26.0m.

***** Adjusted earnings per share exclude exceptional items, impairment of intangible assets and related tax effects.

****** Digital & Diversified Revenues include digital activities, FutureFolio, Future Plus and events.

The most significant foreign currency affecting the Group is the US Dollar. The average exchange rate for the period was $1.6369=£1 (2013: $1.5801=£1), representing a 3% weakening of the US Dollar against Sterling.

Enquiries

Future plc
Zillah Byng-Maddick, Chief Executive                                           Tel: [phone]
Chris Taylor, Director of Communications                                     Tel: [phone]

Brunswick Group
Jon Coles / Andy Rivett-Carnac                                                   Tel: [phone]

About Future:

·      Future plc is an international media group and leading digital business, listed on the London Stock Exchange (symbol: FUTR).

·      Future has been named Consumer Digital Publisher of the Year for three years in a row by the Association of Online Publishers (2011, 2012, 2013) and has been named the Professional Publishers Association Digital Publisher of the Year for two consecutive years (2012, 2013).

·      We have operations in the UK, US and Australia creating more than 200 publications, apps, websites and events.

·      We hold market-leading positions in Technology and Photography sectors.

·      We attract more than 58 million monthly global unique users to our websites, which include techradar.com and musicradar.com.

·      Future sold more than 15 million magazines last year. Our best known brands are T3, Total Film and Xbox: The Official Magazine.

·      Future has developed its own app-creation software, FutureFolio. We produce over 100 digital editions, and have sold over 5 million digital issues in the last year.

·      Future exports or syndicates 225 publications to over 89 countries, making us the UK's number one exporter and licensor of magazine content.

·      Follow Future plc on Twitter at www.twitter.com/futureplc and on LinkedIn at www.linkedin.com/company/future-publishing 

***

Chief Executive's Statement

Future has faced difficult trading conditions in the first half, and the Board is disappointed with the results for the period. Since joining Future in November 2013, it has become apparent that the strategy only partly mitigated the decline in print revenues and we needed a radical review of the company's activities.

Since my appointment on the 1^st April as Chief Executive we have carried out a root and branch review of the organisation, to revisit basic principles and identify where Future derives its intrinsic value, who its principal revenue stakeholders are, and the structure required to more effectively serve those stakeholders.

As part of that strategic review we have decided to focus on the company's core activities, above all around the consumer technology audience. As a result of this we initiated a review of the portfolios, which has ultimately led to the decision to dispose of the Sport and Craft titles and have reached agreement with Immediate Media on the sale of these titles for up to £24m. This disposal highlights the underlying value of the business. The proceeds will be used to pay down current debt and facilitate the restructuring activities already announced. We are working with our banks currently on a new and reduced working capital facility going forward, including the re-setting of covenants.

Performance in the period

Overall, normalised revenues are down 1% year-on-year at £48.5m, driven by modest growth in UK revenues offsetting declines in the US. Future continues to see successful growth in its Digital and  Diversified revenues, up 9% year-on-year. Group Digital and Diversified revenues now account for 35% of total Group revenues. UK EBITDAE for the first half stands at £0.6m, while total normalised Group EBITDAE is £(0.7)m.

Looking at some of the category verticals in more detail, Photography saw a strong performance, driving growth in Creative, while Technology and Sport & Auto have both seen incremental growth. But in the Games category, the market has continued to be challenging, which has led to disappointing results in our Entertainment division.

The Board acknowledges that a degree of over-confidence in business planning for 2014 led to over-investment in some areas and consequently a general increase in costs. In addition, while the transition to new Digital and Diversified revenues has been well executed, the back office systems and ways of working have not been standardized, creating complexity, leading to increased costs.

More positively, investment in Events, as part of the Digital and Diversified strategy, has performed well, specifically with the launch in March 2014 of The Photography Show where over 30,000 consumers and professionals attended the show at Birmingham's NEC, generating £1.4m in revenue for Future. We also continue to roll out ecommerce and affiliate opportunities, prioritising TechRadar, our largest single online property, which reaches on average almost four million tech consumers in the UK every month.

Our US business continued to face challenges and in March 2014 we announced a streamlining of the business to fast-track the transition to a digital model, appropriate to the US market. Print support functions and editorial leadership of Future's international print brands have been assumed by Future's UK content team. In total, over one third of US staff have left the business, including a number of the management team, and the new management has renewed its focus on delivering sustained margin improvement.

A non-cash impairment charge of £26m (2013: £Nil) has been incurred in the year which reflects the structural decline in the print marketplace.

Future Transformation

Since taking up the role of Chief Executive, we have reviewed all aspects of Future's operations. My conclusion, supported by the Board and shareholders, was that Future, in its current form, had become too complex. There is a lack of standardised processes, leading to a lack of focus. This has meant that some activities, while revenue generating, are often low margin. Hence the conclusion that the Company should be simplified and focus on areas where we see highest potential.

It is also my observation that Future needs to re-engage with the key requirements of its three principal revenue stakeholders: its consumer audience, its commercial clients and its shareholders.

Early this month I informed staff that Future will undergo a transformative restructure: simplifying our business, removing distractions and focusing on our core strength: creating excellent, engaging and expert content that is channel-agnostic and connects. Connects consumers to our experts, with opportunities to learn and engage; connects consumers to their peers; and connects these engaged consumer audiences to our commercial partners. This is content which can be created for delivery wherever our consumers want it - online, on mobile, in print, at events and beyond. And it will only be created if it demonstrably supports our strategy.

Clearly, Future's print revenues have continued to decline, but our consumers are highly-engaged and new revenue streams are available. Our revised business model is based on the virtuous circle of engagement in two core content areas: reviews (when consumers are looking to make product purchase decisions and where we can derive ecommerce revenues) and 'how to' opportunities (when consumers want to learn more and are prepared to pay us to help them do so, through tutorials, events etc). These were the foundations of Future's initial success in the 1980s, and they will remain at the core of our strategic focus through the next phase of transformation.

The streamlining of our consumer strategy - with an increased focus on the consumer technology market and a clear channel-neutral approach - allows for a simplification and standardisation of our digital advertising platforms and opportunities. Where appropriate we will also look to rationalise brand activity online in areas where consumers are less interested in our brands but discover and value our content that reaches them through the strength of our search engine optimisation.

The transformation programme has already begun, with the disposal of our Sport and Craft titles. In addition a consultation process began in mid-May, involving all staff, a reflection of the extent to which all areas of the business are affected by the evolving working practices. The proposals reflect a functional approach to re-organising the business: with all our content and marketing staff grouped under one director, focused on creating industry-leading content that connects with our consumers. Likewise, we are grouping all commercial and consumer revenue activity under respective directors. I propose to transform our current IT division into a focused digital Product and Technology division, creating standardised platforms for all our digital offerings. I have also re-organised and strengthened my leadership team to reflect this new functional approach.

Outlook

We have begun transforming Future and simplifying our business to focus on our core strengths and this will continue into the second half. Looking forward it is likely that in the short term this change will impact our bottom line but allow our longer-term margins to increase significantly. 

Interim statement

Statutory results for half-year to 31 March 2014

Statutory results for the period	2014 £m	2013 £m
Revenue	48.7	54.6
EBITDAE	(0.8)	2.2
Depreciation charge	(0.5)	(0.5)
Amortisation of intangible assets	(1.1)	(1.0)
EBITE	(2.4)	0.7
Exceptional items and impairment of intangible assets	(27.7)	-
EBIT (Operating (loss)/profit)	(30.1)	0.7
Net finance costs	(0.5)	(1.0)
Pre-tax loss	(30.6)	(0.3)
Loss per share (pence)	(9.0)	(0.2)
Adjusted loss per share (pence)	(0.7)	(0.2)
Dividends relating to the period (pence per share)	-	-

Normalised results for half-year to 31 March 2014

The normalised results for the Group, and a reconciliation to the statutory results above, are set out on pages 28 to 30.

Normalised results are presented to better reflect the current size and structure of the business. The normalised results exclude revenues and costs relating to activities closed or divested between 1 October 2012 and 31 March 2014 but include any new activities launched in that period.

Normalised results for the period	2014 £m	2013 £m
Revenue	48.5	48.8
EBITDAE	(0.7)	1.1
Depreciation charge	(0.5)	(0.5)
Amortisation of intangible assets	(1.1)	(1.0)
EBITE	(2.3)	(0.4)
Exceptional items and impairment of intangible assets	(27.7)	-
EBIT (Operating loss)	(30.0)	(0.4)
Net finance costs	(0.5)	(1.0)
Pre-tax loss	(30.5)	(1.4)
Adjusted loss per share (pence)	(0.7)	(0.5)

Review of operations

The review of operations is based primarily on a comparison of normalised half-year results for the six months ended 31 March 2014 with those for the six months ended 31 March 2013. Unless otherwise stated, change percentages relate to a comparison of these two periods. 

Key Performance Indicators

An update on the key performance indicators is given below:

	Half-year 2014	Half-year 2013	Year 2013
Corporate KPIs
EBITDAE	(£0.7m)	£1.1m	£6.4m
Year-on-year movement in EBITDAE	-164%	-21%	-
EBITE	(£2.3m)	(£0.4m)	£3.5m
Digital KPIs
Number of unique users logging onto our websites per month (millions)	58.4	50.7	57.7
Year-on-year movement in Digital & Diversified revenues	9%	15%	20%
Number of digital magazines sold per month (thousands)	412	432	433
Digital subscriber base (thousands)	333	302	335
Print KPIs
Number of magazines sold per month (millions)	1.3	1.5	1.7
Print subscriber base (thousands)	508	646	635
Copies sold as a percentage of copies printed (including subscriptions)	46%	52%	52%
Year-on-year movement in print revenues	-5%	-8%	-4%

Analysis of revenue for half-year to 31 March

	2014 £m	2013 £m	Change %
Digital and Diversified	16.8	15.4	+9%
Print	31.7	33.4	-5%
Total revenue	48.5	48.8	-1%

Whilst Group revenue overall fell by 1% to £48.5m, Digital and Diversified revenues continued to show growth and were up 9%. Digital and Diversified revenues now represent 35% of the Group revenues, with Digital and Diversified advertising representing 70% of our total advertising revenues. In contrast print-based revenues continued to decline in the UK and the US.

On a geographic basis, the revenues arising from the UK-based business, which now represents 85% of the Group in revenue terms, once again continued to be resilient in tough market conditions.

Revenue from the US-based business fell by 14% impacted by the continuing decline in print-related revenues arising from circulation and advertising. This decline has been offset by planned reductions in the cost base with all US print support functions, such as consumer marketing and production, moved to teams in the UK hub.

	2014 £m	2013 £m	Change %
UK	41.5	40.6	+2%
US	7.3	8.5	-14%
Intra-group	(0.3)	(0.3)	-
Total revenue	48.5	48.8	-1%

Analysis of EBITDAE for half-year to 31 March

	2014 £m	2013 £m	Change %
UK	0.6	2.4	-75%
US	(1.3)	(1.3)	-
Total EBITDAE	(0.7)	1.1	-164%

Group EBITDAE fell in the half-year, with the US remaining flat year-on-year and the UK decreasing by 75%. Further detail on these movements is given in the following sections of the statement.

UK-based performance in half-year

	2014 £m	2013 £m	Change %
Circulation revenue	24.8	25.4	-2%
Advertising revenue	12.2	11.1	+10%
Customer publishing	1.7	2.2	-23%
Licensing, events and other	2.8	1.9	+47%
Total revenue	41.5	40.6	+2%
EBITDAE	0.6	2.4	-75%
EBITDAE margin	1.4%	5.9%
Depreciation	(0.4)	(0.4)	-
Amortisation	(0.7)	(0.6)	+17%
EBITE	(0.5)	1.4	-136%
EBITE margin	(1.2%)	3.4%

UK-based activities saw revenue up by 2%. Within this Digital and Diversified revenues increase by 15%, underpinned by growth in both Technology revenue and a pleasing inaugural performance for The Photography Show. This has partially offset the continued decrease in print revenue which the Group continues to experience.

Circulation revenue was down 2%, with the largest negative impact arising from UK print newstrade, which was down 6% driven partly by a higher number of returns than forecast. This decline was offset by increases in digital copy sales, which have increased by 10% year-on-year.

Advertising revenues were up 10% as digital advertising revenues continued to increase, coupled with growth in the diversified segment in part as a result of event advertising.

EBITDAE in the UK has fallen with margins being impacted by increased costs incurred as part of the transition to new revenue streams. As the transitional revenues have been established costs have been higher than in previous years and this has significantly impacted our margin.

UK revenue by sector is set out in the table below:          

	2014 Revenue £m	2014 % of Revenue	2013 Revenue £m	2013 % of Revenue
Entertainment	7.2	17%	8.5	21%
Technology	9.8	24%	9.7	24%
Music	4.0	10%	4.4	11%
Creative	12.5	30%	10.3	25%
Sport & Auto	8.0	19%	7.7	19%
	41.5	100%	40.6	100%

Whilst the Entertainment sector has been tough as a result of the low levels of activity in Games, Technology and the Sport & Auto sector - which includes our Cycling activities - has continued to grow its revenue base.

US-based performance in half-year

	2014 $m	2013 $m	Change %
Circulation revenue	3.5	4.6	-24%
Advertising revenue	5.6	5.7	-2%
Customer publishing	2.5	2.5	-
Licensing, events and other	0.3	0.6	-50%
Total revenue	11.9	13.4	-11%
EBITDAE	(2.3)	(2.1)	-9%
EBITDAE margin	(19.3%)	(15.7%)
Depreciation	(0.1)	(0.2)	-50%
Amortisation	(0.6)	(0.7)	-14%
EBITE	(3.0)	(3.0)	-
EBITE margin	(25.2%)	(22.4%)

US revenues totalled $11.9m, down 11% on the prior year. Within this, print revenues have declined by 25%.

Circulation revenue overall fell by 24%, with the largest negative impact arising from print copy sales which were down 28%. Advertising revenues fell by 2%, with print falling by 7% and digital remaining flat. Digital advertising in the US represents 80% of total advertising revenues. The US performance was impacted by the weakness in the Games release schedule.

At the EBITDAE level, planned cost savings have offset the reduced revenues, which have resulted in a small increase year-on-year in the EBITDAE loss to $2.3m.

US revenue by sector is set out in the table below:

	2014 Revenue $m	2014 % of Revenue	2013 Revenue $m	2013 % of Revenue
Entertainment	6.0	51%	7.3	55%
Technology	4.8	40%	4.6	34%
Music	0.1	1%	-	-
Creative	0.6	5%	0.9	7%
Sport & Auto	0.4	3%	0.6	4%
	11.9	100%	13.4	100%

Revenue continues to grow in Technology and despite a reduction in revenue in other areas we have seen increased levels of contribution in all areas except Entertainment. The fall in revenue has been partially offset by the planned savings in overheads which will continue in the second half as the savings from the restructuring activities in the first half come through.

Seasonality of the business

The business has a second half seasonality impact, with larger revenues during H2. As a result in the last two years EBITDAE across H1:H2 has been 17%:83% (2013) and 22%:78% (2012). The weighting towards the second half of the year is expected to continue this year, driven by:

•           Seasonality of certain sectors of the business, eg Cycling

•           Margin improvement activity undertaken during March

•           Phasing of commercial revenues

•           Volume of planned activity

Net finance costs

Net finance costs were £0.5m (2013: £1.0m) reflecting a decrease in the average net debt compared to the prior year.

Taxation

The tax credit for the six months ended 31 March 2014 is based on the effective rate, estimated on a full year basis by territory, being applied to the taxable profits or losses of each territory for the six months ended 31 March 2014.

Cash flow and net debt

Net debt at 30 September 2013 was £6.9m. During the period there was a cash inflow from operations before cash exceptional items of £4.1m (2013: cash inflow of £1.9m).

During the half-year cash outflows totalled £5.1m (2013: £4.4m) in respect of the following items:

·      £1.5m (2013: £1.3m) in exceptional costs

·      £1.5m (2013: £1.3m) in respect of capital expenditure

·      £0.5m (2013: £0.7m) in net interest payments

·      £0.9m (2013: £0.8m) in net taxation payments

·      £nil (2013: £0.3m) in bank arrangement fees

·      £0.7m (2013: £nil) in dividends

Exchange and other movements accounted for the balance of cash flows.

As a result of the above net debt at 31 March 2014 was £7.8m, an increase of 13% from September 2013.

Bank covenants

The Group was in compliance with all its covenants at 31 March 2014 as set out in the following table:

Covenant	31 March 2014	Limit
Net debt: EBITDA	1.65	Less than 2.0 times
EBITDA: Net interest	7.14	More than 4 times

Interest payable under the Credit Facility is calculated as the cost of three month LIBOR plus an interest margin of between 2.0% and 3.25%, dependent on covenant ratio. The key covenants are set out in the following table:

Bank Covenant
Net debt/EBITDA	Less than 2.0 times
EBITDA/Interest	More than 4.0 times
Capital expenditure	125% of specific projected amounts for FY13 - FY17

Interim dividend

The Board has agreed that there will be no interim dividend.

Risks that may impact the second half of the financial year

The principal risks and uncertainties that affect the Group on an ongoing basis are described in our Annual Report 2013 (on Pages 19 and 20), which is available at www.futureplc.com.  These have not changed since the year end and are as follows:

Operating environment

The macro-economic environment continues to be difficult. Despite a more positive outlook, in both the UK and the US, general trading conditions remain tough. The economic environment, as well as the general move to digital products, has resulted in printed magazine sales and print-related advertising revenues falling.

Intellectual property

Future uses, and grants licences to its licensees to use various types of third-party content including music, audiovisual material, photos, images and text. As publisher, Future is responsible for any intellectual property or other infringement relating to the same and as licensor, Future is responsible to its licensees.

Financial

Forecasting remains difficult in all consumer markets but this is particularly the case in relation to sales through digital newsstands which are emerging. The long lag time for reporting on sales of printed copies and associated retail promotional spend in the US and bookazines continued to be a challenge in the year. As we diversify our revenue streams, new activities are inherently more difficult to accurately forecast. In addition the Group is exposed to interest rate risk and foreign exchange risk.

IT

In the event of a total network or server failure or data loss there would be a major impact on the production of magazines, operation of websites and the operational effectiveness of the business.

Staff

The Group's strong reputation in digital media makes its staff potentially attractive to competitors. There is a risk that key staff will move elsewhere if offered significant increases in remuneration with which Future is unable to compete.

Personal data

A loss of personal data triggers the need to notify users and the Information Commissioner's Office (ICO) and Future may suffer reputational risk, as well as a significant financial penalty, if it is responsible for the breach.

Consolidated income statement

for the six months ended 31 March 2014

		6 months to 31 March 2014	6 months to 31 March 2013	12 months to 30 September 2013
	Note	£m	£m	£m
Revenue	1,2	48.7	54.6	112.3
Operating (loss)/profit before exceptional items and impairment of intangible assets	1	(2.4)	0.7	4.7
Exceptional items	4	(1.7)	-	2.5
Impairment of intangible assets	11	(26.0)	-	-
Operating (loss)/profit	3	(30.1)	0.7	7.2
Net finance costs	6	(0.5)	(1.0)	(1.4)
(Loss)/profit before tax	1	(30.6)	(0.3)	5.8
Tax on (loss)/profit	7	0.6	(0.3)	(1.5)
(Loss)/profit for the period attributable to owners of the parent		(30.0)	(0.6)	4.3

(Loss)/earnings per 1p Ordinary share

		6 months to 31 March 2014	6 months to 31 March 2013	12 months to 30 September 2013
	Note	pence	pence	pence
Basic (loss)/earnings per share	9	(9.0)	(0.2)	1.3
Diluted (loss)/earnings per share	9	(9.0)	(0.2)	1.3

Consolidated statement of comprehensive income

for the six months ended 31 March 2014

		6 months to 31 March 2014	6 months to 31 March 2013	12 months to 30 September 2013
		£m	£m	£m
(Loss)/profit for the period		(30.0)	(0.6)	4.3
Items that may be reclassified to the consolidated income statement
Currency translation differences		0.2	(0.1)	-
Cash flow hedges		(0.2)	-	0.2
Other comprehensive (loss)/income for the period		-	(0.1)	0.2
Total comprehensive (loss)/income for the period attributable to owners of the parent		(30.0)	(0.7)	4.5

Consolidated statement of changes in equity

for the six months ended 31 March 2014                                                 

		Issued share capital	Share premium account	Merger reserve	Treasury reserve	Cash flow hedge reserve	Accumulated losses	Total equity
	Note	£m	£m	£m	£m	£m	£m	£m
Balance at 1 October 2013		3.3	24.8	109.0	(0.3)	0.2	(69.6)	67.4
Loss for the period		-	-	-	-	-	(30.0)	(30.0)
Currency translation differences		-	-	-	-	-	0.2	0.2
Cash flow hedges		-	-	-	-	(0.2)	-	(0.2)
Other comprehensive (loss)/income for the period		-	-	-	-	(0.2)	0.2	-
Total  comprehensive loss for the period		-	-	-	-	(0.2)	(29.8)	(30.0)
Final dividend relating to 2013		-	-	-	-	-	(0.7)	(0.7)
Share schemes - Value of employees' services	5	-	-	-	-	-	-	-
Balance at 31 March 2014		3.3	24.8	109.0	(0.3)	-	(100.1)	36.7
Balance at 1 October 2012		3.3	24.8	109.0	(0.3)	-	(74.2)	62.6
Loss for the period		-	-	-	-	-	(0.6)	(0.6)
Currency translation differences		-	-	-	-	-	(0.1)	(0.1)
Other comprehensive loss for the period		-	-	-	-	-	(0.1)	(0.1)
Total comprehensive loss for the period		-	-	-	-	-	(0.7)	(0.7)
Share schemes - Value of employees' services	5	-	-	-	-	-	0.1	0.1
Balance at 31 March 2013		3.3	24.8	109.0	(0.3)	-	(74.8)	62.0
Balance at 1 October 2012		3.3	24.8	109.0	(0.3)	-	(74.2)	62.6
Profit for the year		-	-	-	-	-	4.3	4.3
Cash flow hedges		-	-	-	-	0.2	-	0.2
Other comprehensive income for the year		-	-	-	-	0.2	-	0.2
Total comprehensive income for the year		-	-	-	-	0.2	4.3	4.5
Share schemes - Value of employees' services	5	-	-	-	-	-	0.3	0.3
Balance at 30 September 2013		3.3	24.8	109.0	(0.3)	0.2	(69.6)	67.4

Consolidated balance sheet

as at 31 March 2014

		31 March 2014	31 March 2013	30 September 2013
	Note	£m	£m	£m
Assets
Non-current assets
Property, plant and equipment	10	2.3	2.6	2.5
Intangible assets - goodwill	11	60.2	86.4	86.3
Intangible assets - other		3.5	2.8	3.5
Investment in associate		0.2	-	-
Deferred tax		0.9	0.8	0.4
Total non-current assets		67.1	92.6	92.7
Current assets
Inventories		1.6	2.1	1.9
Financial assets - derivatives		0.2	-	0.4
Trade and other receivables		18.9	18.4	21.4
Cash and cash equivalents		6.4	6.6	4.6
Assets classified as held for sale		-	6.2	-
Total current assets		27.1	33.3	28.3
Total assets		94.2	125.9	121.0
Equity and liabilities
Equity
Issued share capital	12	3.3	3.3	3.3
Share premium account		24.8	24.8	24.8
Merger reserve		109.0	109.0	109.0
Treasury reserve		(0.3)	(0.3)	(0.3)
Cash flow hedge reserve		-	-	0.2
Accumulated losses		(100.1)	(74.8)	(69.6)
Total equity		36.7	62.0	67.4
Non-current liabilities
Financial liabilities - interest-bearing loans and borrowings		-	4.9	-
Financial liabilities - derivatives		-	0.1	-
Corporation tax payable		4.8	-	5.2
Deferred tax		1.2	1.3	1.2
Provisions		1.3	3.4	1.5
Other non-current liabilities		1.5	1.5	1.5
Total non-current liabilities		8.8	11.2	9.4
Current liabilities
Financial liabilities - interest-bearing loans and borrowings		14.2	18.4	11.5
Financial liabilities - derivatives		0.1	0.2	0.2
Trade and other payables		34.2	27.6	31.6
Corporation tax payable		0.2	5.8	0.9
Liabilities directly associated with assets classified as held for sale		-	0.7	-
Total current liabilities		48.7	52.7	44.2
Total liabilities		57.5	63.9	53.6
Total equity and liabilities		94.2	125.9	121.0

Consolidated cash flow statement

for the six months ended 31 March 2014

		6 months to 31 March 2014	6 months to 31 March 2013	12 months to 30 September 2013
		£m	£m	£m
Cash flows from operating activities
Cash generated from operations		2.6	0.6	4.3
Interest paid		(0.5)	(0.7)	(1.2)
Tax paid		(0.9)	(0.8)	(1.8)
Net cash generated from/(used in) operating activities		1.2	(0.9)	1.3
Cash flows from investing activities
Purchase of property, plant and equipment		(0.3)	(0.3)	(0.6)
Purchase of computer software and website development		(1.0)	(1.0)	(2.3)
Purchase of share in associate		(0.2)	-	-
Disposal of magazine titles and trademarks		-	-	10.3
Costs of business disposals		-	-	(1.1)
Net cash (used in)/generated from investing activities		(1.5)	(1.3)	6.3
Cash flows from financing activities
Draw down of bank loans		3.8	2.5	26.0
Repayment of bank loans		(1.0)	(1.9)	(36.7)
Bank arrangement fees		-	(0.3)	(0.6)
Repayment of finance leases		-	(0.1)	(0.1)
Equity dividends paid		(0.7)	-	-
Net cash generated from/(used in) financing activities		2.1	0.2	(11.4)
Net increase/(decrease) in cash and cash equivalents		1.8	(2.0)	(3.8)
Cash and cash equivalents at beginning of period		4.6	8.5	8.5
Exchange adjustments		-	0.1	(0.1)
Cash and cash equivalents at end of period		6.4	6.6	4.6

Notes to the consolidated cash flow statement

for the six months ended 31 March 2014

A. Cash generated from operations

The reconciliation of (loss)/profit for the period to cash flows generated from operations is set out below:

		6 months to 31 March 2014	6 months to  31 March 2013	12 months to 30 September 2013
		£m	£m	£m
(Loss)/profit for the period		(30.0)	(0.6)	4.3
Adjustments for:
Depreciation charge		0.5	0.5	0.9
Amortisation of intangible assets		1.1	1.0	2.0
Impairment of intangible assets		26.0	-	-
Profit on disposal of magazine titles and trademarks		-	-	(2.7)
Share schemes - Value of employees' services		-	0.1	0.3
Net finance costs		0.5	1.0	1.4
Tax (credit)/charge		(0.6)	0.3	1.5
(Loss)/profit before changes in working capital and provisions		(2.5)	2.3	7.7
Movement in provisions		(0.2)	(0.9)	(2.7)
Decrease/(increase) in inventories		0.3	(0.2)	0.1
Decrease/(increase) in trade and other receivables		2.5	2.1	(1.6)
Increase/(decrease) in trade and other payables		2.5	(2.7)	0.8
Cash generated from operations		2.6	0.6	4.3

B. Analysis of net debt

	1 October 2013	Cash flows	Non-cash changes	Exchange movements	31 March 2014
	£m	£m	£m	£m	£m
Cash and cash equivalents	4.6	1.8	-	-	6.4
Debt due within one year	(11.5)	(2.8)	(0.1)	0.2	(14.2)
Net debt	(6.9)	(1.0)	(0.1)	0.2	(7.8)

 C. Reconciliation of movement in net debt

	6 months to 31 March 2014 £m	6 months to 31 March 2013 £m	12 months to 30 September 2013 £m
Net debt at start of period	(6.9)	(14.1)	(14.1)
Increase/(decrease) in cash and cash equivalents	1.8	(2.0)	(3.8)
Movement in borrowings	(2.8)	(0.5)	10.8
Non-cash changes	(0.1)	0.1	0.1
Exchange movements	0.2	(0.2)	0.1
Net debt at end of period	(7.8)	(16.7)	(6.9)

Basis of preparation

This unaudited condensed interim financial information for the six months ended 31 March 2014 has been prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting' as adopted by the European Union, and in accordance with the Disclosure and Transparency Rules of the Financial Conduct Authority.

The interim financial information contained in the Interim Report should be read in conjunction with the Annual Report for the year ended 30 September 2013.

The Interim Report does not constitute statutory accounts as defined in section 434 of the Companies Act 2006 and has not been audited.  A copy of the statutory financial statements for the year ended 30 September 2013 has been filed with the Registrar of Companies.  The auditors' report on those accounts was unqualified; it did not contain an emphasis of matter and did not contain any statements under section 498(2) or section 498(3) of the Companies Act 2006.  The auditors have carried out a review of the Interim Report and their review report is set out on page 26. 

The accounting policies adopted, methods of computation and presentation are consistent with those set out in the Group's statutory accounts for the financial year ended 30 September 2013.

There has been no material impact from the adoption of new standards, amendments to standards or interpretations which are relevant to the Group.

Going concern

The condensed interim financial information has been prepared on the going concern basis.

As at 31 March 2014 net debt was £7.8m (cash £6.4m and bank debt £(14.2)m) and it is expected to increase in the second half of the year, due to the impact of the trading loss seen in the period to 31 March 2014 and the increased cash required to carry out the reorganisation activities being undertaken. As a consequence, the net debt / EBITDA financial covenant in the Group's bank facility is expected to be breached at the next quarterly reporting date, 30 June 2014. However, as announced, the disposal confirmed of Sport and Craft divisions for a cash value of £22m would repay the current loan facilities. At which point the Group would look to take on a reduced working capital facility.

In order to assess the appropriateness of preparing the condensed interim financial information on the going concern basis, management have prepared detailed projections of expected future cash flows and these have been reviewed by the Board.

In reaching their decision that the interim results should be prepared on the going concern basis, the Board has considered the following factors:

-       The divestment of Sport and Craft confirmed.

-       The continuation and adequacy of bank facilities, including the risk of covenant breaches and the satisfactory outcome of discussions with the Group's lending banks if a breach should occur.

-       The accuracy of key assumptions and the achievement of key cash flows which include a £1m contingency in the plans for this year.

The Directors, following discussions with the bank, are confident that a variation to the existing facility and divestment of non-core assets will provide the business with sufficient financing for at least the next 12 months. Accordingly, whilst inherent uncertainty remains, the Directors consider that it is appropriate to prepare the condensed interim financial information on the going concern basis, on the basis that the Directors consider that it is probable bank facilities will be successfully re-negotiated and the underlying business will perform at least in accordance with the Board's expectations.

Notes to the financial information

for the six months ended 31 March 2014

1.         Segmental reporting

The Group is organised and arranged primarily by reportable segment. The executive Directors consider the performance of the business from a geographical perspective, namely the UK and the US. The Australian business is considered to be part of the UK segment and is not separately reported due to its size.

Segment revenue

	6 months to 31 March 2014 £m	6 months to 31 March 2013 £m	12 months to 30 September 2013 £m
UK	41.7	45.7	92.2
US	7.3	9.2	20.9
Revenue between segments	(0.3)	(0.3)	(0.8)
Total segment revenue	48.7	54.6	112.3

Transactions between segments are carried out at arm's length.

Segment EBITE

	6 months to 31 March 2014 £m	6 months to 31 March 2013 £m	12 months to 30 September 2013 £m
UK	(0.4)	2.3	6.5
US	(2.0)	(1.6)	(1.8)
Total segment EBITE	(2.4)	0.7	4.7

EBITE is used by the executive Directors to assess the performance of each segment.

A reconciliation of total segment EBITE to (loss)/profit before tax is provided as follows:

	6 months to 31 March 2014 £m	6 months to 31 March 2013 £m	12 months to 30 September 2013 £m
Total segment EBITE	(2.4)	0.7	4.7
Exceptional items	(1.7)	-	2.5
Impairment of intangible assets	(26.0)	-	-
Net finance costs	(0.5)	(1.0)	(1.4)
(Loss)/profit before tax	(30.6)	(0.3)	5.8

Notes to the financial information

for the six months ended 31 March 2014

2.         Revenue

An additional analysis of the Group's revenue is shown below:

	6 months to 31 March 2014 £m	6 months to 31 March 2013 £m	12 months to 30 September 2013 £m
Circulation	27.1	32.4	64.8
Advertising	15.6	16.0	34.4
Customer publishing	3.2	4.0	7.3
Licensing, events & other	2.8	2.2	5.8
Total	48.7	54.6	112.3

3.         Operating (loss)/profit

	6 months to 31 March 2014 £m	6 months to 31 March 2013 £m	12 months to 30 September 2013 £m
Revenue	48.7	54.6	112.3
Cost of sales	(37.2)	(39.1)	(77.8)
Gross profit	11.5	15.5	34.5
Distribution expenses	(3.4)	(4.0)	(7.7)
Administration expenses	(10.5)	(10.8)	(22.1)
Exceptional items	(1.7)	-	2.5
Impairment of intangible assets	(26.0)	-	-
Operating (loss)/profit	(30.1)	0.7	7.2

4.         Exceptional items

	6 months to 31 March 2014 £m	6 months to 31 March 2013 £m	12 months to 30 September 2013 £m
Restructuring and redundancy costs	1.7	-	1.4
Vacant property provision movements	-	-	(1.2)
Profit on disposal of magazine titles and trademarks	-	-	(2.7)
Total	1.7	-	(2.5)

The restructuring and redundancy costs relate mainly to staff termination payments arising from the restructuring of the UK and US businesses in line with the Group's strategy.

The vacant property provision movement in 2013 relates to the release of a provision following the sublease of a vacant floor of a property in the US.

The profit on disposal in 2013 relates to the sale of the UK Rock titles.

Notes to the financial information

for the six months ended 31 March 2014

5.         Employees

	6 months to 31 March 2014 £m	6 months to 31 March 2013 £m	12 months to 30 September 2013 £m
Wages and salaries	18.7	19.0	39.2
Social security costs	2.4	2.5	5.1
Other pension costs	0.7	0.5	1.2
Share schemes - Value of employees' services	-	0.1	0.3
Total	21.8	22.1	45.8

IFRS 2 'Share-based Payment' requires an expense for equity instruments granted to be recognised over the appropriate vesting period, measured at their fair value at the date of grant.

The fair value has been calculated using the Monte Carlo and Black-Scholes models, using the most appropriate model for each scheme. Assumptions have been made in these models for expected volatility, risk-free rates and dividend yields.

The expense for the six months ended 31 March 2014 of £nil (2013: £0.1m) has been credited to reserves.

Key management personnel compensation

	6 months to 31 March 2014 £m	6 months to 31 March 2013 £m	12 months to 30 September 2013 £m
Salaries and other short-term employee benefits	0.4	0.4	0.8
Termination benefits	0.2	-	-
Share schemes - Value of employees' services	(0.1)	0.1	0.2
Total	0.5	0.5	1.0

Key management personnel are deemed to be the members of the Board of Future plc. It is this Board which has responsibility for planning, directing and controlling the activities of the Group.

6.         Net finance costs         

	6 months to 31 March 2014 £m	6 months to 31 March 2013 £m	12 months to 30 September 2013 £m
Interest receivable	-	-	0.6
Interest payable on interest-bearing loans and borrowings	(0.3)	(0.6)	(1.0)
Fair value gain on interest rate derivatives	0.1	0.1	0.2
Amortisation of bank loan arrangement fees	(0.1)	(0.4)	(0.4)
Other finance costs	(0.1)	(0.1)	(0.7)
Exchange losses	(0.1)	-	(0.1)
Net finance costs	(0.5)	(1.0)	(1.4)

In line with the Board's policy of hedging interest rate risk, the Group has entered into an interest rate derivative to reduce its exposure on a proportion of the outstanding debt under its committed facility. The valuation of this interest rate derivative at 31 March 2014 resulted in a gain for the six months ended 31 March 2014 of £0.1m (2013: £0.1m).

Notes to the financial information

for the six months ended 31 March 2014

7.         Tax on (loss)/profit

The tax (credit)/charge for the six months ended 31 March 2014 is based on the effective rate, estimated on a full year basis by territory, being applied to the taxable profits or losses of each territory for the six months ended 31 March 2014.

Consistent with prior periods the Group corporation tax provision reflects management's estimation of the amount of tax payable for fiscal years with open tax computations where liabilities remain to be agreed with Her Majesty's Revenue and Customs and other tax authorities.

8.         Dividends

Equity dividends	6 months to 31 March 2014	6 months to 31 March 2013	12 months to 30 September 2013
Number of shares in issue at end of period (million)	333.7	333.2	333.4
Dividends paid and payable in period (pence per share)	0.2	-	-
Dividends paid and payable in period (£m)	0.7	-	-

Interim dividends are recognised in the period in which they are paid and final dividends are recognised in the period in which they are approved.

The dividends totalling £0.7m paid during the period ended 31 March 2014 represent the final dividend for the year ended 30 September 2013 of 0.2 pence per share.

9.         Earnings per share

Basic earnings per share are calculated using the weighted average number of Ordinary shares in issue during the period.  Diluted earnings per share have been calculated by taking into account the dilutive effect of shares that would be issued on conversion into Ordinary shares of awards held under employee share schemes.

The adjusted earnings per share removes the effect of exceptional items, impairment of intangible assets and any related tax effects from the calculation as follows:

Adjustments to (loss)/profit after tax

	6 months to 31 March 2014 £m	6 months to 31 March 2013 £m	12 months to 30 September 2013 £m
(Loss)/profit after tax	(30.0)	(0.6)	4.3
Exceptional items	1.7	-	(2.5)
Impairment of intangible assets	26.0	-	-
Tax effect of the above adjustments	(0.1)	-	0.2
Adjusted (loss)/profit after tax	(2.4)	(0.6)	2.0

Notes to the financial information

for the six months ended 31 March 2014

9.         Earnings per share (continued)

	6 months to 31 March 2014	6 months to 31 March 2013	12 months to 30 September 2013
Weighted average number of shares in issue during the period:
- Basic	332,078,731	331,726,589	331,812,054
- Dilutive effect of share awards	4,044,900	9,192,807	6,298,779
- Diluted	336,123,631	340,919,396	338,110,833
Basic (loss)/earnings per share (in pence)	(9.0)	(0.2)	1.3
Adjusted basic (loss)/earnings per share (in pence)	(0.7)	(0.2)	0.6
Diluted (loss)/earnings per share (in pence)	(9.0)	(0.2)	1.3
Adjusted diluted (loss)/earnings per share (in pence)	(0.7)	(0.2)	0.6

The adjustments to (loss)/profit have the following effect:

	6 months to 31 March 2014 pence	6 months to 31 March 2013 pence	12 months to 30 September 2013 pence
Basic (loss)/earnings per share	(9.0)	(0.2)	1.3
Exceptional items	0.5	-	(0.8)
Impairment of intangible assets	7.8	-	-
Tax effect of the above adjustments	-	-	0.1
Adjusted basic (loss)/earnings per share	(0.7)	(0.2)	0.6
Diluted (loss)/earnings per share	(9.0)	(0.2)	1.3
Exceptional items	0.5	-	(0.8)
Impairment of intangible assets	7.8	-	-
Tax effect of the above adjustments	-	-	0.1
Adjusted diluted (loss)/earnings per share	(0.7)	(0.2)	0.6

10. Property, plant and equipment

During the six months ended 31 March 2014, property, plant and equipment additions totalled £0.3m

(31 March 2013: £0.3m). The £0.3m is attributable to: land and buildings £nil (31 March 2013:  £nil); plant and machinery £0.3m (31 March 2013: £0.3m); equipment, fixtures and fittings £nil (31 March 2013: £nil).

There were no commitments for capital expenditure contracted for but not provided at 31 March 2014

(31 March 2013: £nil).

The depreciation charge for the period totalled £0.5m (31 March 2013: £0.5m). The £0.5m is attributable to: land and buildings £0.1m (31 March 2013: £0.1m); plant and machinery £0.3m (31 March 2013: £0.3m); equipment, fixtures and fittings £0.1m (31 March 2013: £0.1m).

11. Intangible assets

Impairment tests for goodwill and other intangibles

The goodwill balance at 31 March 2014 comprises:

	31 March 2014 £m	30 September 2013 £m
UK	60.2	82.8
US	-	3.5
Total	60.2	86.3

The basis for calculating recoverable amounts is described in the accounting policies set out in the Group's statutory accounts for the financial year ended 30 September 2013.

Trends in the economic and financial environment or changes in competitor behaviour in response to the economic environment may affect the estimate of recoverable amounts, as will unforeseen changes in the political or economic systems of some countries.

Other assumptions that influence estimated recoverable amounts are set out below:

At 31 March 2014

	UK	US
Basis of recoverable amount	Value in use	Value in use
Source used	Five year plans Discounted cash flow	Five year plans Discounted cash flow
Growth rate to perpetuity	2.0%	2.0%
EBITDA margins assumed	0.3% to 17.0%	-3.3% to 4.5%
Post-tax discount rate	9.8%	15%
Pre-tax discount rate	13.3%	15%

At 30 September 2013

	UK	US
Basis of recoverable amount	Value in use	Value in use
Source used	Five year plans Discounted cash flow	Five year plans Discounted cash flow
Growth rate to perpetuity	2.0%	2.0%
EBITDA margins assumed	12.1% to 13.7%	1.0% to 7.5%
Post-tax discount rate	9.5%	9.5%
Pre-tax discount rate	13.3%	12.5%

In accordance with IAS 36 the basis used for impairment testing (value in use or fair value less costs to sell) may vary from one period to another; the recoverable amount is the higher of estimated value in use and fair value less costs to sell.

Impairment

At 31 March 2014 an impairment charge of £22.6m has been taken against the carrying value of the UK business with an additional £3.4m taken against the US business. This reflects the trading patterns, challenging economic climate and trading environment in which planned restructuring activities for the business are taking place.

Notes to the financial information

for the six months ended 31 March 2014

11. Intangible assets (continued)

Sensitivity of recoverable amounts

At 31 March 2014 the analysis of the recoverable amounts gave rise to the following assessments of sensitivity:

(i)  UK

A change of plus or minus 0.5% in the pre-tax discount rate would decrease or increase respectively the recoverable amount by £2.1m. Likewise a change of plus or minus 0.5% in the perpetual growth rate would increase or decrease respectively the recoverable amount by £0.7m. Lastly, a 10% increase or decrease in cash flows after the fifth year would increase or decrease respectively the recoverable amount by £2.9m.

(ii) US

A change of plus or minus 0.5% in the pre-tax discount rate would decrease or increase respectively the recoverable amount by £nil. Likewise a change of plus or minus 0.5% in the perpetual growth rate would increase or decrease respectively the recoverable amount by £nil. Lastly, a 10% increase or decrease in cash flows after the fifth year would increase or decrease respectively the recoverable amount by £nil.

12. Issued share capital

During the period 318,582 Ordinary shares (31 March 2013: 233,046) with a nominal value of £3,186 (31 March 2013: £2,330) were issued by the Company for a total cash commitment of £7,078 (31 March 2013: £15,774), pursuant to share scheme exercises.

As at 31 March 2014 there were 333,717,409 Ordinary shares in issue (31 March 2013: 333,215,218).

13. Contingent assets and contingent liabilities

At 31 March 2014 there were no material contingent assets or contingent liabilities (31 March 2013: £nil).

14. Post balance sheet events

On 1 April 2014 Mark Wood stepped down as CEO and Zillah Byng-Maddick was appointed. Mark remains part of the Board as a Non-Executive Director. In addition, Seb Bishop resigned as an independent non-executive Director on 1 April 2014.

Following this a root and branch review of the organisation, to revisit basic principles and identify where Future derives its intrinsic value, who its principal revenue stakeholders are, and what structure is required to more effectively serve those stakeholders has been undertaken. As a result a consultation process began in mid-May, involving all staff, a reflection of the extent to which all areas of the business are affected by the evolving working practices.

As part of that strategic review we have decided to focus the company on core activities, above all around Consumer Technology. We therefore initiated the disposal of non-core assets and are pleased to have reached agreement with Immediate Media on the sale of our Sports and Craft divisions for £24m.

Statement of Directors' responsibilities

The Directors confirm that to the best of their knowledge the condensed interim financial information contained in the Interim Report has been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and that the Interim Management Report herein includes a fair review of the information required by DTR 4.2.7 and DTR 4.2.8, namely: an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; a description of the principal risks and uncertainties for the remaining six months of the financial year; and material related-party transactions in the first six months and any material changes in the related-party transactions described in the last annual report.

The Directors of Future plc are listed in the Future plc Annual Report for the year to 30 September 2013.

Mark Wood resigned as Chief Executive and was appointed as a non-executive Director on 1 April 2014. Seb Bishop resigned as an independent non-executive Director on 1 April 2014.

On behalf of the Board

Zillah Byng-Maddick

Chief Executive

29 May 2014

Directors

Peter Allen

Chairman

Zillah Byng-Maddick

Chief Executive

Manjit Wolstenholme

Senior independent non-executive Director

Mark Whiteling

Independent non-executive Director

Mark Wood

Non-executive Director

The maintenance and integrity of the Future plc website is the responsibility of the Directors; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the website.

Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Independent review report to Future plc

Report on the consolidated interim financial statements

Our conclusion
We have reviewed the consolidated interim financial statements, defined below, in the half-yearly financial report of Future Plc for the six months ended 31 March 2014. Based on our review, nothing has come to our attention that causes us to believe that the consolidated interim financial statements are not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

This conclusion is to be read in the context of what we say in the remainder of this report.

Emphasis of matter - Going concern

In forming our opinion on the consolidated interim financial information, which is not modified, we have considered the adequacy of the disclosure made in the basis of preparation note within the consolidated interim financial information concerning the company's ability to continue as a going concern. The company incurred a net loss of £30.0m during the six months ended 31 March 2014 and, at that date, it had net current liabilities of £21.6m. These conditions, along with the other matters explained in the basis of preparation note within the consolidated interim financial information, indicate the existence of a material uncertainty which may cast significant doubt about the company's ability to continue as a going concern. The consolidated interim financial information does not include the adjustments that would result if the company was unable to continue as a going concern.

What we have reviewed

The condensed consolidated interim financial statements, which are prepared by Future plc, comprise:

·      the Consolidated balance sheet as at 31 March 2014;

·      the Consolidated income statement and Consolidated statement of comprehensive income for the period then ended;

·      the Consolidated cash flow statement for the period then ended;

·      the Notes to the consolidated cash flow statement;

·      the Consolidated statement of changes in equity for the period then ended; and

·      the explanatory Notes to the consolidated interim financial statements.

As disclosed in the basis of preparation, the financial reporting framework that has been applied in the preparation of the full annual financial statements of the Group is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.

The consolidated interim financial statements included in the half-yearly financial report have been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

What a review of consolidated financial statements involves

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures.

A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and, consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the consolidated interim financial statements.

Independent review report to Future plc

Responsibilities for the consolidated interim financial statements and the review

Our responsibilities and those of the Directors

The half-yearly financial report, including the consolidated interim financial statements, is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

Our responsibility is to express to the Company a conclusion on the condensed consolidated interim financial statements in the half-yearly financial report based on our review. This report, including the conclusion, has been prepared for and only for the Company for the purpose of complying with the Disclosure and Transparency Rules of the Financial Conduct Authority and for no other purpose. We do not, in giving this conclusion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

PricewaterhouseCoopers LLP
Chartered Accountants

Bristol
29 May 2014

Normalised results

for the six months ended 31 March 2014

		6 months to 31 March 2014	6 months to 31 March 2013	12 months to 30 September 2013
	Note	£m	£m	£m
Revenue	1,2	48.5	48.8	105.4
Operating (loss)/profit before exceptional items (EBITE)	1	(2.3)	(0.4)	3.5

Adjusted (loss)/earnings per 1p Ordinary share (normalised)

	Note	6 months to 31 March 2014 pence	6 months to 31 March 2013 pence	12 months to 30 September 2013 pence
Adjusted basic (loss)/earnings per share	2	(0.7)	(0.5)	0.3

Normalised results are presented to better reflect the current size and structure of the business and give a better indication of the performance of the ongoing business.  The normalised results exclude revenues and costs of activities closed or divested between 1 October 2012 and 31 March 2014, but include any new activities launched in that period.

Adjusted earnings per share are based on normalised results, but exclude exceptional items and related tax effects.

Notes to the normalised results

for the six months ended 31 March 2014

1.        Normalised segmental reporting

a)          Revenue by segment

	6 months to 31 March 2014 £m	6 months to 31 March 2013 £m	12 months to 30 September 2013 £m
UK	41.5	40.6	86.1
US	7.3	8.5	20.1
Revenue between segments	(0.3)	(0.3)	(0.8)
Total normalised revenue	48.5	48.8	105.4

b)         EBITE by segment

	6 months to 31 March 2014 £m	6 months to 31 March  2013 £m	12 months to 30 September 2013 £m
UK	(0.5)	1.4	5.5
US	(1.8)	(1.8)	(2.0)
Total normalised EBITE	(2.3)	(0.4)	3.5

Additional analysis of the Group's normalised revenue by type is set out below:

i)          Revenue by type

 

	6 months to 31 March 2014 £m	6 months to 31 March 2013 £m	12 months to 30 September 2013 £m
Circulation	26.9	28.3	60.1
Advertising	15.6	14.8	33.1
Customer publishing	3.2	3.7	7.0
Licensing, events and other	2.8	2.0	5.2
Total normalised revenue	48.5	48.8	105.4

Notes to the normalised results

for the six months ended 31 March 2014

2.        Reconciliation of statutory results to normalised results

a)         Reconciliation of statutory revenue to normalised revenue

	6 months to 31 March 2014	6 months to  31 March 2013	12 months to 30 September 2013
	£m	£m	£m
Statutory revenue	48.7	54.6	112.3
Adjustment: UK closed and divested activities	(0.2)	(5.1)	(6.1)
Adjustment: US closed and divested activities	-	(0.7)	(0.8)
Normalised revenue	48.5	48.8	105.4

b)         Reconciliation of statutory operating profit before exceptional items (EBITE) to normalised EBITE

	6 months to 31 March 2014	6 months to 31 March  2013	12 months to 30 September 2013
	£m	£m	£m
EBITE	(2.4)	0.7	4.7
Adjustment: UK closed and divested activities	(0.1)	(0.9)	(1.0)
Adjustment: US closed and divested activities	0.2	(0.2)	(0.2)
Normalised EBITE	(2.3)	(0.4)	3.5

c)         Reconciliation of basic (loss)/earnings per share to normalised adjusted basic (loss)/earnings per share

	6 months to 31 March 2014	6 months to 31 March  2013	12 months to 30 September 2013
	pence	pence	pence
Basic (loss)/earnings per share	(9.0)	(0.2)	1.3
UK closed and divested activities	-	(0.2)	(0.9)
US closed and divested activities	-	(0.1)	-
Exceptional items	0.5	-	-
Impairment of intangible assets	7.8	-	-
Tax effect of the above adjustment	-	-	(0.1)
Adjusted basic (loss)/earnings per share	(0.7)	(0.5)	0.3

 

END

 

 

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