Future plc’s Interim Management Statement:
Trading Performance
• Normalised* Group revenues £76.2m, up 1%
• Group digital revenues up 24%
• Statutory EBITDA forecast at £9.5m (EBITDAE £8m) for the year
• Net Debt reduced by 46% to £9.2m
• Dividend resumed at year end
Digital revenues continued their strong growth, up 24% year-on-year, and advertising revenues are approaching 60% from digital markets. Digital edition revenues on the iPad and other tablets are 50% up on a year ago.
In the three months to June trading was below expectations, owing chiefly to continuing weakness in the Games market. The pipeline for the final quarter is strong, but following the challenges of recent months we are forecasting full-year statutory EBITDA results at £9.5m (EBITDAE £8m). Our US business continues to aim to operate profitably by year end.
The senior management and Board are not satisfied with the pace of improvement and have agreed to accelerate our cost saving programme to generate a £2-2.5m margin improvement in the coming year. This programme will continue until the cost base, still geared primarily to print, is better aligned with the changing business.
Financial position
Net debt at 30 June 2013 was £9.2m, down 46% from 30 June 2012, primarily due to the sale of UK Rock titles in April for £10.2m.
Outlook
The outlook for the final quarter is encouraging and we see good momentum building for revenue and profit growth in the next financial year. These trends, combined with cost reductions, have convinced the Board that we should resume dividends, suspended in 2011, with a final dividend this year.
Mark Wood (pictured), Future plc Chief Executive, said: "We are disappointed to miss our target for the full year and as a result we are bringing forward plans to reduce legacy print costs and improve operating margins in the period ahead.
"We see encouraging trends across the business for the final quarter and the year ahead, including in the Games sector in the run up to major new console launches later this year, and anticipate delivering significant revenue and profit growth in the coming year."
* 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 2011 and 30 June 2013, but include the revenues and costs of any new activities launched in that period.
