8 February 2012
Interim Management Statement
Future plc, the international media group and leading digital publisher, today announces its Interim Management Statement for the period from 1 October 2011 to the date of this announcement, incorporating the Group's first quarter for the three months ended 31 December 2011.
- Trading in line with expectations
- Group digital revenues up 41%
- Overall Group revenues down 7% but offset by cost savings. The UK - which now represents 75% of Group revenue - down 2%
- UK digital revenue growth offsets decline in print revenues
- Successful sale of US Music titles
- US on track for profitability in 2013
In the first quarter, Group digital revenues grew 41% and were 17% of overall Group revenues, compared with 11% for the year ended 30 September 2011. As expected, total Group revenues in the quarter were down 7%, driven chiefly by the decline of print revenues in the US.
In the UK, which now represents 75% of the business, revenues declined by 2% − chiefly as a result of the loss of a customer publishing contract. Digital circulation and advertising revenues grew by 51% and offset net declines in print-related revenues. This is an important milestone in the evolution of the business.
In the US, revenues were down 20%, as anticipated. The fall was largely the result of year-on-year reductions in print revenues and the managed closure of titles. Our programme of cost reductions offset the impact of this decline. Digital revenues in the US were up 24% and digital advertising made up 45% of all advertising revenues.
We completed the sale of the US Music titles, in January, for a consideration of up to $3m. This and other cost efficiencies keep us on track to return the US business to profitability by 2013
We continue to focus on cost management. Central Costs are below the prior year as a result of the changes in the Executive team announced in October.
Net debt at 31 December 2011 is in line with expectations at £17.9m, an increase of 23% year-on-year, but does not include the impact of the net proceeds from the sale of the US Music titles.
We expect trading to remain in line with market expectations. Print sales will be challenging, but we expect digital revenue to maintain a vigorous growth rate.
We expect revenues from tablets and other mobile devices to show continued growth as the number of devices proliferates. Future is a world leader in this field and has over 65 digital editions available through the Apple Newsstand for iPads and iPhones, more than any other publisher. We have seen 10 million downloads of our cost-free apps since then, generating 4.9 million opt-ins to receive our push messages and sales of over 430,000 digital magazines. 80% of downloads are outside the UK and over 90% are to new customers. Over 40% of all sales are subscriptions.
Future's websites are visited by over 34 million people every month and the number is steadily growing. TechRadar, which is the UK's leading technology news and reviews site, generated a record of nearly 11 million uniques in December. We are launching a US version of TechRadar in the Spring.
Mark Wood, Future plc Chief Executive said:
"The new management team is delivering fast digital growth and restructuring our US business in line with the strategy outlined in November. We are pleased that cost-saving initiatives have fully offset the anticipated reduction in revenues.
"We are starting to see a significant change in the shape of the business as our digital innovation enables us to reach entirely new consumers in global digital markets. The period has confirmed Future's position as a recognised leader in the transition to digital publishing."
AGM and next trading update
Future will hold its Annual General Meeting at 12 noon today at Future plc, 2 Balcombe Street, London NW1 6NW.
Future plans to provide a pre-close trading update on 29 March, 2012.
Mark Wood, Chief Executive Tel: 020 7042 4007
Graham Harding, Group Finance Director Tel: 020 7042 4031
Chris Taylor, Head of Communications Tel: 020 7042 4033/ 07980221942
Charles Palmer/Jon Snowball Tel: 020 7831 3113
About Future plc:
Future plc is an international media group and leading digital publisher, 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 200 special-interest publications, apps, websites and events. We hold market-leading positions in Games, Film, Music, Technology, Cycling, Automotive and Crafts. Our biggest-selling products include T3, Total Film, Classic Rock and Official Xbox Magazine. Our websites include gamesradar.com, bikeradar.com, musicradar.com and techradar.com (the UK's number one consumer technology website). Future sells 2.9 million magazines each month; we attract more than 34 million monthly unique visitors to our websites; and we deliver over 100 digital editions and bespoke apps on tablet. Future exports or syndicates publications to 89 countries, making us the UK's number one exporter and licensor of magazine content. Future was named Consumer Digital Publisher of the Year at the Association of Online Publishers Awards 2011.