TIDMFUTR
RNS Number : 3197I
Future PLC
23 November 2018
23 November 2018
Future plc
Double-digit organic growth and a year of material international
expansion
Future plc (LSE: FUTR, "Future", "the Group"), the global
platform for specialist media, today publishes results for the year
ended 30 September 2018.
Financial highlights
-- Substantial growth in Group revenue; up 48% to GBP124.6m
(2017: GBP84.4m), of which 11% is organic growth(1)
o Strong performance in Media revenue, up 88% to GBP64.2m (2017:
GBP34.1m), of which 40% is organic growth(1)
-- Digital display grew 63% to GBP31.8m
-- eCommerce increased 104% to GBP18.2m
-- Events grew 148% to GBP12.9m
o Magazine revenue up 20% to GBP60.4m (2017: GBP50.3m), driven
by the acquisition of the Haymarket titles
-- US revenue up 109% to GBP39.9m (2017: GBP19.1m), of which 28%
is organic growth; UK revenue up 38% to GBP92.5m (2017: GBP67.2m),
of which 6% is organic growth
-- Online Revenue Per User (RPU), a key metric, has increased in
both the UK by 26% to GBP1.68 and the US by 32% to GBP0.96 as we
monetise our audiences more effectively across both
territories.
-- Adjusted EBITDA(2) increased 88% to GBP20.7m (2017:
GBP11.0m), reflecting margin expansion through change in revenue
mix and revenue growth across both Media and Magazine divisions
-- Continued growth of Adjusted operating profit up 108% to
GBP18.5m (2017: GBP8.9m) before share-based payments, amortisation
of acquired intangibles, non-trading foreign exchange gains and
exceptional items of GBP13.2m (2017: GBP8.1m); statutory operating
profit up to GBP5.3m (2017: GBP0.8m)
-- Adjusted EPS increased by 33% to 26.2p per share (2017: 19.7p
per share restated for rights issue); Reported EPS increased to
5.1p per share (2017: 3.7p per share restated for rights issue)
-- Strong adjusted free cash flows(3) of GBP17.4m (2017:
GBP15.3m) representing 96% adjusted cash conversion(4)
-- Conservative balance sheet with net debt of GBP17.8m, less than 1x net debt / Adjusted EBITDA
-- Low capital intensive business with capex spend of less than GBP2.5m
-- The Board is pleased to recommend the recommencement of
dividends with 0.5p per share payable on 15 February 2019 to all
shareholders on the register at close of business on 18 January
2019
Operational highlights
-- Notable increase in Media revenues underpinned by further
diversification through acquisitions and organic growth across all
regions
-- Significantly increased presence in US market driven by
organic growth in Media division and acquisitions of Purch B2C (via
a fully underwritten rights issue which raised GBP105.7m) and
NewBay Media
-- Strategic move into B2B through acquisition of NewBay Media
and focus on monetisation of TechRadar Pro
-- Three gaming and technology brands acquired from Nextmedia in Australia in September
-- Considerable online audience growth - 142 million websites users (monthly) (2017: 49 million)
o Continued investment in technology stack to maintain
operational scalability
o New website platform now has 15 sites; four sites migrated to
the platform this year
-- Integration of NewBay and Haymarket titles now completed;
Purch and Nextmedia titles integration well progressed
-- Over 52% of revenue now delivered by Media division,
exceeding revenues from Magazines for the first time
Zillah Byng-Thorne, Future's Chief Executive, said:
"Future has had an outstanding year. The financial results speak
volumes for the successful execution of the Group's focused
strategy in leveraging its specialist media platform and
diversifying its revenue streams, both geographically and across
its product offering.
"Our four acquisitions this year have broadened and strengthened
our B2C and B2B portfolios and materially increased our global
reach. The expansion of our US business also presents material
opportunities to monetise our significant US online audience.
"The year has started well with trading ahead of the Board's
expectations for this quarter, and while we recognise there is
still much uncertainty for the remainder of the year, the Board is
confident that trading will continue the trends of the last year
with strong growth."
1) Organic defined as excluding 2018 acquisitions and the Home
Interest acquisition in August 2017.
2) Adjusted EBITDA represents earnings before share-based
payments and associated social security costs, interest, tax,
depreciation, amortisation, impairment of intangible assets,
non-trading foreign exchange gains and exceptional items.
3) Adjusted free cash flow is defined as adjusted operating cash
inflow less capital expenditure. Adjusted operating cash inflow
represents operating cash inflow adjusted to exclude cashflows
relating to exceptional items.
4) Adjusted cash conversion represents adjusted operating cash
inflow as a percentage of adjusted EBITDA.
Enquiries:
Future plc 01225 442244
Zillah Byng-Thorne, Chief Executive Officer
--------------
Penny Ladkin-Brand, Chief Financial Officer
--------------
Dominic Del Mar, Investor Relations
--------------
Instinctif Partners 020 7457 2020
--------------
Kay Larsen/Chantal Woolcock
--------------
Certain information contained in this announcement would have
constituted inside information (as defined by Article 7 of
Regulation (EU) No 596/2014) prior to its release as part of this
announcement.
Note to editors
Future is a global platform business for specialist media with
diversified revenue streams.
The Media division is high-growth with three complementary
revenue streams: eCommerce, events and digital advertising. It
operates in a number of sectors including technology, games, music,
home interest, hobbies and B2B and its brands include TechRadar, PC
Gamer, Tom's Guide, Homebuilding & Renovating Show,
GamesRadar+, The Photography Show, Top Ten Reviews, Live Science,
Guitar World, MusicRadar, Space.com and Tom's Hardware.
The Magazine division focuses on publishing specialist content,
with over 80 publications and over 520 bookazines published per
year, totalling global circulation of 1.3 million. The Magazine
portfolio spans technology, games and entertainment, music,
creative and photography, hobbies, home interest and B2B. Its
titles include Classic Rock, Guitar Player, FourFourTwo,
Homebuilding & Renovating, Digital Camera, Guitarist, How It
Works, Total Film, What Hi-Fi? and Music Week.
Strategy update
Continued growth delivered by technology-enabled global platform
for specialist media
Our strategy to establish a global platform business with
scalable, diversified brands is delivering sustainable material
growth, as evidenced by our performance during this financial
year.
We continue to diversify our revenues through acquisitions and
organic growth both geographically and across our product offering
in addition to consolidating our position in our specialist content
categories.
We have seen particularly strong organic growth in eCommerce and
digital display advertising this year driven principally by
excellent growth of our consumer technology vertical, which grew
its eCommerce revenue by 136% and digital display advertising
revenue by 41%.
Strategic acquisitions have enabled us to further scale our key
revenue streams and expand geographically. Our events revenue more
than doubled to GBP12.9m, principally due to the full year impact
of the Home Interest division, which was acquired in August 2017,
of which the popular Homebuilding events form an integral part.
The acquisitions of NewBay Media and Purch this year have also
contributed to significant growth in the US with US revenue now
representing 32% (2017: 23%) of total revenue. The expansion of our
US business provides material opportunities to monetise our
significant US online audience.
We continue to invest in the core operating model, enabling a
scalable organisation. During this year we migrated four websites
onto our website platform "Vanilla" and also launched two new
brands.
Operational review
We have seen another year of substantial growth for Future.
Group revenue is up 48% to GBP124.6m (2017: GBP84.4m). This is
driven by a mixture of strong organic growth of 11% and growth
through acquisitions. Adjusted EBITDA is up 88% to GBP20.7m and
adjusted EPS is up 33% to 26.2p (2017: 19.7p).
Revenue by geography:
GBPm FY18 FY17 YoY Var (GBPm) YoY Var (%)
UK 92.5 67.2 25.3 38%
====== ====== =============== ============
US 39.9 19.1 20.8 109%
====== ====== =============== ============
Revenue between
segments (7.8) (1.9) (5.9) 311%
====== ====== =============== ============
Total revenue 124.6 84.4 40.2 48%
====== ====== =============== ============
Revenue by division:
GBPm FY18 FY17 YoY Var (GBPm) YoY Var (%)
Media 64.2 34.1 30.1 88%
====== ===== =============== ============
Magazine 60.4 50.3 10.1 20%
====== ===== =============== ============
Total revenue 124.6 84.4 40.2 48%
====== ===== =============== ============
Both our UK and US divisions have contributed to the growth in
revenue, with UK revenue up 38% to GBP92.5m (2017: GBP67.2m) and US
revenue up 109% to GBP39.9m (2017: GBP19.1m).
Media revenue has increased by 88% to GBP64.2m (2017: GBP34.1m),
driven primarily by the Group's fast growing revenue streams of
eCommerce and digital display advertising, and through our
successful acquisition programme. Media revenues increased by an
impressive 40% on an underlying basis (excluding the impact of 2018
acquisitions and Home Interest acquisition).
In the UK, Media revenues increased by 100% to GBP42.3m (2017:
GBP21.1m), driven by eCommerce growth of 80% to GBP8.8m (2017:
GBP4.9m) and events growth of 130% to GBP12.0m (2017: GBP5.2m). The
US also experienced exceptional growth, up 102% to GBP29.7m (2017:
GBP14.7m), with eCommerce revenues being the biggest driver of this
growth, up 134% to GBP9.4m (2017: GBP4.0m).
Magazine revenue increased by 20% to GBP60.4m (2017: GBP50.3m)
largely driven by acquisitions. On an underlying basis, Magazine
revenues declined 8% to GBP45.7m, in line with our expectations. US
Magazine revenue declined at a faster rate of 29%, principally as a
result of portfolio rationalisation.
Content sits at the heart of all we do at Future, and a key
measure of our success is the continued growth of our online
audiences combined with the ability to then monetise them. During
2018, Online Revenue Per User (RPU), a key metric, has increased in
both the UK by 26% to GBP1.68 and the US by 32% to GBP0.96 as we
monetise our audiences more effectively across both
territories.
Organic growth in Media revenues enables us to manage the
expected decline in Magazine revenues and focus on margins and cash
flow within that division. Acquisitions have resulted in revenues
increasing within the Magazine division by 20%, helping offset the
underlying decline. As a result of the changing mix of our
business, revenue from Media exceeded Magazines this year for the
first time with the split of revenue now 52%:48%. Post the NewBay
and Purch acquisitions, this is expected to be in the region of
65%:35%.
In conjunction with the considerable growth and development of
the Group this year, we continue to drive operational efficiencies
throughout the organisation, which has resulted in our Adjusted
EBITDA margin increasing to 17% (2017: 13%).
Future remains a low capital intensive business with capital
expenditure representing 12% of Adjusted EBITDA (2017: 16%; 2016:
37%).
Future continues to be highly cash-generative with efficient
Adjusted cash conversion of 96% (2017: 155%) and Adjusted free cash
flow rising to GBP17.4m (2017: GBP15.3m), demonstrating the Group's
ongoing focus on efficient working capital management.
Generating predictable, consistent cash flows and diversifying
revenue streams is an ongoing focus of the Group. As a result the
Board has recommended the payment of a dividend to shareholders
whilst ensuring that we maintain sufficient resources to continue
investment in the business.
The nature of the Group's business means there are no specific
risks to the Group associated with Brexit other than general
economic uncertainty within the country.
People & Culture
As a result of the growth of the Group, the number of employees
at Future increased from 634 to just over 1,000 globally through
acquisitions and the creation of new roles. The ongoing delivery of
our strategy is dependent on the continued nurturing of this
workforce.
Recruiting and retaining the best talent regardless of the role
is crucial to our success and as a result, Future focuses on
ensuring that our employees share in our success and are rewarded
fairly. Future was proud to have become a Living Wage employer
during the year, and as a result of our significant financial
performance we were also able to reward all our staff for their
talent and commitment by paying out, for the first time (since
introduction), the maximum amount payable under the annual profit
pool scheme.
Acquisitions
Future has established a profitable global platform business
through further investment in both people and technology and
through the successful acquisition and integration of complementary
businesses. During the year Future made four acquisitions, which
broaden and strengthen our B2C and B2B portfolios and materially
increase our global reach. This is particularly evident in the US
where we have seen revenue growth of over 100%.
In April 2018 we acquired for GBP9.9m NewBay Media LLC, a
US-based content and events business that provides a material step
in diversifying revenues into B2B revenue streams.
In May 2018 we acquired for an undisclosed sum four specialist
consumer titles from Haymarket Media Group, which expanded our
portfolio into the sport and outdoor leisure sectors as well as
providing additional diversification within the technology
vertical.
In August 2018 Future acquired three gaming and technology
brands from Australian media company Nextmedia, PC PowerPlay, Hyper
and PC & Tech Authority, including magazines, digital editions,
Upgrade events and Australian PC Awards. This small acquisition
expands the Group's presence in the Australia technology and gaming
media markets. Whilst the acquisition was small, it provides us
with an important local presence.
In September 2018 we acquired the consumer division of Purch for
GBP99.1m, a technology-enabled US-based media business with leading
online brands in the technology and science sectors. Bringing
Purch's brands and digital platforms into the Future business has
further cemented Future's position as a growing, global platform
for specialist media, particularly in the US, where our market
position has considerably increased.
Key details of the acquisitions we have made in 2018 are
included below:
Acquisition Revenue*
NewBay Media LLC GBP36.8m
---------
Haymarket titles GBP11.2m
---------
Nextmedia titles GBP1.0m
---------
Purch Group LLC GBP47.5m
---------
*Revenue figures obtained from most recent annual financial
information or where more relevant, financial information (and
reflect 12 months of revenues) relating to the acquired assets to
demonstrate the relative size of the acquisitions.
Current trading and outlook
The year has started well with trading ahead of the Board's
expectations for this quarter, and while we recognise there is
still much uncertainty for the remainder of the year, the Board is
confident that trading will continue the trends of the last year
with strong growth.
The integration of the Home Interest division is now complete
and it has become a material operating vertical.
The integrations of NewBay and Haymarket are progressing as
planned and are substantially complete. The integration of the
Purch acquisition is progressing in line with expectations and we
expect the vast majority of the work to be completed in the early
New Year. The integration of the titles acquired from Nextmedia is
also on track.
Financial review
Financial summary
2018 2017
GBPm GBPm
------------------------------------------- --------- --------------
Revenue 124.6 84.4
------------------------------------------- --------- --------------
Adjusted EBITDA 20.7 11.0
------------------------------------------- --------- --------------
Depreciation (0.6) (0.3)
Adjusted amortisation (1.6) (1.8)
------------------------------------------- --------- --------------
Adjusted operating profit 18.5 8.9
------------------------------------------- --------- --------------
Adjusted net finance costs (1.1) (0.6)
------------------------------------------- --------- --------------
Adjusted profit before tax 17.4 8.3
------------------------------------------- --------- --------------
Operating profit 5.3 0.8
------------------------------------------- --------- --------------
Profit before tax 4.4 0.2
------------------------------------------- --------- --------------
Items described as 'Adjusted' in the table above exclude
the items detailed as 'Adjusting' in the reconciliation below.
Adjusted items are a non-GAAP measure. For further details
refer to the section on presentation of non-statutory measures.
Earnings per share
2018 2017
*restated
------------------------------------------- --------- --------------
Adjusted basic earnings per share
(p) 26.2 19.7
Basic earnings per share (p) 5.1 3.7
------------------------------------------- --------- --------------
*2017 figures have been restated to reflect the bonus element of
the 2018 rights issue
A reconciliation of Adjusted operating profit to profit before
tax is shown below:
2018 2017
GBPm GBPm
------------------------------------------------ ------ ------
Adjusted operating profit 18.5 8.9
Adjusted net finance costs (1.1) (0.6)
------------------------------------------------ ------ ------
Adjusted profit before tax 17.4 8.3
Adjusting items:
Share-based payments (including related social
security costs) (3.1) (2.1)
Exceptional items (4.4) (3.7)
Amortisation of acquired intangibles (5.7) (2.3)
Non-trading foreign exchange gain 0.2 -
Profit before tax 4.4 0.2
------------------------------------------------ ------ ------
The financial review is based primarily on a comparison of
continuing results for the year ended 30 September 2018 with those
for the year ended 30 September 2017. Unless otherwise stated,
change percentages relate to a comparison of these two periods.
Revenue
Group revenue was up 48% to GBP124.6m (2017: GBP84.4m), which
was achieved both organically (increase of 11%) and through
acquisition. UK revenue was up 38% to GBP92.5m (2017: GBP67.2m)
with US revenue up 109% to GBP39.9m (2017: GBP19.1m).
Media
Media revenue increased by 88% to GBP64.2m (2017: GBP34.1m),
driven primarily by the Group's fast-growing revenue streams,
eCommerce and digital display advertising, and through acquisition.
On an underlying basis, excluding the impact of 2018 and Home
Interest acquisitions, Media revenues increased by 40%.
In the UK, Media revenues increased by 100% to GBP42.3m (2017:
GBP21.1m), driven by eCommerce growth of 80% to GBP8.8m (2017:
GBP4.9m) and events growth of 130% to GBP12.0m (2017: GBP5.2m). The
US also experienced exceptional growth, up 102% to GBP29.7m (2017:
GBP14.7m), with eCommerce revenues being the biggest driver of this
growth - up 134% to GBP9.4m (2017: GBP4.0m).
Magazine
Magazine revenue increased by 20% to GBP60.4m (2017: GBP50.3m)
largely driven by acquisitions. On an underlying basis, excluding
the impact of 2018 and Home Interest acquisitions, Magazine
revenues declined 8% to GBP45.7m.
The division is constantly looking for ways to innovate and
published 524 bookazines in the year with revenue totalling
GBP9.3m.
Adjusted EBITDA and operating profit
The Group's Adjusted EBITDA was up 88% to GBP20.7m (2017:
GBP11.0m), of which GBP15.3m (2017: GBP6.9m) was UK and GBP5.4m
(2017: GBP4.1m) was US. Operating profit increased by GBP4.5m to
GBP5.3m (2017: GBP0.8m).
Adjusted operating margin increased to 15% (2017: 11%) and gross
profit margin increased to 44% (2017: 40%) as the Group benefited
from strong growth in higher margin Media revenues.
Future's headcount increased to just over 1,000 from 634
employees as additional staff joined the Group through the various
acquisitions. Back office operations are centralised in the UK
which enables the Group to take advantage of economies of scale and
commonality of processes. The NewBay and Haymarket titles
acquisitions have been fully integrated into the Group and the
integration of the Purch acquisition is in the early stages but
progressing in line with expectations. Integration of the
Australian brands acquired from Nextmedia is also on track.
Exceptional items and impairment
Exceptional costs were GBP4.4m (2017: GBP3.7m). These are mainly
acquisition-related, with deal fees and subsequent
integration-related activity in respect of the acquisitions of
NewBay, the Haymarket titles and Purch totalling GBP4.3m. Vacant
property, other restructuring and transformation-related activity
make up the balance of exceptional items.
Net finance costs
Net finance costs increased to GBP0.9m (2017: GBP0.6m)
reflecting higher interest costs as the Group funded the
acquisitions of the Haymarket titles and NewBay through new and
existing bank facilities. The Group has also now fully repaid the
HMRC settlement agreement following the final GBP2m bullet payment
in June 2018.
The Group's Adjusted pre-tax profit was GBP17.4m (2017: GBP8.3m)
and Reported pre-tax profit was GBP4.4m (2017: GBP0.2m) reflecting
significantly improved levels of profitability.
Taxation
The tax charge for the year amounted to GBP1.5m (2017: credit of
GBP1.4m), comprising a current tax charge of GBP1.9m (2017:
GBP0.8m) and a deferred tax credit of GBP0.4m (2017: GBP2.2m)
predominantly related to the recognition of further historic US
losses (as we now expect to generate sufficient profits in the US
to utilise them), acquired intangible assets and share schemes. The
current tax charge mainly arises in the UK where the standard rate
of corporation tax is 19%.
Earnings per share
2017
2018 *restated
GBPm GBPm
----------------------------- ----- -----------
Basic earnings per share 5.1 3.7
Adjusted earnings per share 26.2 19.7
----------------------------- ----- -----------
*2017 figures have been restated to reflect the bonus element of
the 2018 rights issue
Adjusted earnings per share is based on the profit after
taxation which is then adjusted to exclude share-based payments
(including related social security costs), exceptional items,
amortisation of acquired intangible assets, impairment of
intangible assets, non-trading foreign exchange and related tax
effects.
The Adjusted profit after tax amounted to GBP14.9m (2017:
GBP8.6m) and the weighted average number of shares in issue was
56.9m (2017 restated: 43.6m), the increase reflecting the impact of
the rights issue that was completed in August 2018 to fund the
Purch acquisition.
Dividend
The Board is recommending a final dividend of 0.5p per share for
the year ended 30 September 2018, payable on 15 February 2019 to
all shareholders on the register at close of business on 18 January
2019.
Cash flow and net debt
Net debt at 30 September 2018 was GBP17.8m (2017: GBP10m)
reflecting the additional draw-down of debt to fund both the
acquisitions of NewBay and the Haymarket titles.
During the year, there was a cash inflow from operations before
exceptional items of GBP19.8m (2017: GBP17.1m) reflecting the
significant improvement in the Group's trading performance and the
significant focus on improving the Group's working capital
cycle.
A reconciliation of adjusted operating cash inflow to cash
inflow from operations is included below:
2018 2017
GBPm GBPm
----------------------------------------- ------ ------
Adjusted operating cash inflow 19.8 17.1
Cash flows related to exceptional items (5.1) (5.1)
----------------------------------------- ------ ------
Cash inflow from operations 14.7 12.0
----------------------------------------- ------ ------
Other significant movements in cash flows include exceptional
payments of GBP5.1m (2017: GBP5.1m), GBP2.4m (2017: GBP1.8m) of
capital expenditure, net proceeds from issuing shares of GBP102.3m,
draw-down of bank loans (net of repayments and arrangement fees) of
GBP4.0m and payments of GBP117.1m (net of cash acquired) to fund
acquisitions. Foreign exchange and other movements accounted for
the balance of cash flows.
The Group continued to be extremely cash-generative with
Adjusted cash conversion of 96% (2017: 155%) and Adjusted free cash
flow increasing to GBP17.4m (2017: GBP15.3m) reflecting the ongoing
efficient cash management by the Group.
The Group remains a very low capital intensive business with
capital expenditure as a percentage of Adjusted EBITDA of only
12%.
Credit facility
The Group had available facilities of GBP28.2m at 30 September
2018. This includes GBP5.4m of facilities which were taken out
during 2018 to part-fund the NewBay acquisition which are due for
repayment in July 2019, with the remainder expiring in June
2021.
Consolidated income statement
for the year ended 30 September 2018
Unaudited
2018 2017
Adjusted Adjusting Statutory Adjusted Adjusting Statutory
results items results results items results
Note GBPm GBPm GBPm GBPm GBPm GBPm
Revenue 1 124.6 - 124.6 84.4 - 84.4
Net operating
expenses 2 (106.1) (13.2) (119.3) (75.5) (8.1) (83.6)
--------------- ----- -------------- -------------- -------------- -------------- -------------- --------------
Operating
profit 2 18.5 (13.2) 5.3 8.9 (8.1) 0.8
Finance income 4 - - - 0.1 - 0.1
Finance costs 4 (1.1) 0.2 (0.9) (0.7) - (0.7)
--------------- ----- -------------- -------------- -------------- -------------- -------------- --------------
Net finance
costs (1.1) 0.2 (0.9) (0.6) - (0.6)
--------------- ----- -------------- -------------- -------------- -------------- -------------- --------------
Profit before
tax 1 17.4 (13.0) 4.4 8.3 (8.1) 0.2
Tax (charge) /
credit 5 (2.5) 1.0 (1.5) 0.3 1.1 1.4
--------------- ----- -------------- -------------- -------------- -------------- -------------- --------------
Profit for
the year 14.9 (12.0) 2.9 8.6 (7.0) 1.6
--------------- ----- -------------- -------------- -------------- -------------- -------------- --------------
Adjusted items are a non-GAAP measure. For further details refer
to the section on presentation of non-statutory measures.
Earnings per 15p Ordinary share
Unaudited
2018 2017 restated*
Adjusted Adjusting Statutory Adjusted Adjusting Statutory
results items results results items results
Note pence pence pence pence pence Pence
Basic
earnings/(loss)
per share -
Total Group 7 26.2 (21.1) 5.1 19.7 (16.0) 3.7
Diluted
earnings/(loss)
per share -
Total Group 7 24.3 (19.6) 4.7 18.4 (15.0) 3.4
------------------- ----- ------------- -------------- ------------- ------------- -------------- -------------
*2017 figures have been restated to reflect the bonus element of
the rights issue that took place in August 2018.
Consolidated statement of comprehensive income
for the year ended 30 September 2018
Unaudited
2018 2017
GBPm GBPm
--------------------------------------------------------------------- ---------- ------------------
Profit for the year 2.9 1.6
---------------------------------------------------------------------- ---------- ------------------
Items that may be reclassified to the consolidated income statement
Currency translation differences (0.3) (0.2)
---------------------------------------------------------------------- ---------- ------------------
Other comprehensive loss for the year (0.3) (0.2)
---------------------------------------------------------------------- ---------- ------------------
Total comprehensive income for the year 2.6 1.4
---------------------------------------------------------------------- ---------- ------------------
Items in the statement above are disclosed net of tax.
Consolidated statement of changes in equity
for the year ended 30 September 2018
Issued Share premium Merger Treasury Accumulated
share capital account reserve reserve losses Total equity
GBPm GBPm GBPm GBPm GBPm GBPm
Balance at 1
October 2016 3.7 27.6 109.0 (0.3) (118.8) 21.2
---------------- --------------- -------------- --------------- -------------- --------------- ---------------
Profit for the
year - - - - 1.6 1.6
---------------- --------------- -------------- --------------- -------------- --------------- ---------------
Currency
translation
differences - - - - (0.2) (0.2)
Other
comprehensive
income for the
year - - - - (0.2) (0.2)
Total
comprehensive
income for the
year - - - - 1.4 1.4
Share capital
issued during
the year 3.1 19.8 13.5 - - 36.4
Share schemes
- Value of
employees'
services - - - - 1.8 1.8
- Deferred tax
on options - - - - 0.5 0.5
Balance at 30
September 2017 6.8 47.4 122.5 (0.3) (115.1) 61.3
---------------- --------------- -------------- --------------- -------------- --------------- ---------------
Unaudited
--------------- --------------- -------------- --------------- -------------- --------------- ---------------
Profit for the
year - - - - 2.9 2.9
---------------- --------------- -------------- --------------- -------------- --------------- ---------------
Currency
translation
differences - - - - (0.3) (0.3)
Other
comprehensive
loss for the
year - - - - (0.3) (0.3)
Total
comprehensive
income for the
year - - - - 2.6 2.6
Share capital
issued during
the year 5.4 99.6 - - - 105.0
Share premium
reduction (47.4) 47.4 -
Share schemes
- Value of
employees'
services - - - - 2.6 2.6
- Deferred tax
on options - - - - 1.1 1.1
Balance at 30
September 2018 12.2 99.6 122.5 (0.3) (61.4) 172.6
---------------- --------------- -------------- --------------- -------------- --------------- ---------------
Consolidated balance sheet
as at 30 September 2018
Unaudited
2018 2017
Note GBPm GBPm
--------------------------------------------------------------- ----- ---------- --------
Assets
Non-current assets
Property, plant and equipment 1.7 1.0
Intangible assets - goodwill 8 99.8 65.8
Intangible assets - other 8 103.6 26.5
Investments 0.2 0.2
Deferred tax 5.3 4.4
--------------------------------------------------------------- ----- ---------- --------
Total non-current assets 210.6 97.9
--------------------------------------------------------------- ----- ---------- --------
Current assets
Inventories - 0.7
Corporation tax recoverable 0.1 0.1
Trade and other receivables 37.6 13.6
Cash and cash equivalents 9 6.4 10.1
Total current assets 44.1 24.5
--------------------------------------------------------------- ----- ---------- --------
Total assets 254.7 122.4
--------------------------------------------------------------- ----- ---------- --------
Equity and liabilities
Equity
Issued share capital 12.2 6.8
Share premium account 99.6 47.4
Merger reserve 122.5 122.5
Treasury reserve (0.3) (0.3)
Accumulated losses (61.4) (115.1)
Total equity 172.6 61.3
--------------------------------------------------------------- ----- ---------- --------
Non-current liabilities
Financial liabilities - interest-bearing loans and borrowings 10 15.7 16.9
Deferred tax 5.1 4.6
Provisions 11 2.8 2.6
Other non-current liabilities 0.5 0.6
--------------------------------------------------------------- ----- ---------- --------
Total non-current liabilities 24.1 24.7
--------------------------------------------------------------- ----- ---------- --------
Current liabilities
Financial liabilities - interest-bearing loans and borrowings 10 8.5 3.2
Financial liabilities - derivatives - 0.1
Trade and other payables 48.4 29.9
Corporation tax payable 1.1 3.2
--------------------------------------------------------------- ----- ---------- --------
Total current liabilities 58.0 36.4
Total liabilities 82.1 61.1
--------------------------------------------------------------- ----- ---------- --------
Total equity and liabilities 254.7 122.4
--------------------------------------------------------------- ----- ---------- --------
Consolidated cash flow statement
for the year ended 30 September 2018
Unaudited
2018 2017
GBPm GBPm
----------------------------------------------------------- ---------- -------------------
Cash flows from operating activities
Cash generated from operations 14.7 12.0
Interest paid (0.9) (0.6)
Tax paid (4.0) (1.4)
----------------------------------------------------------- ---------- -------------------
Net cash generated from operating activities 9.8 10.0
----------------------------------------------------------- ---------- -------------------
Cash flows from investing activities
Purchase of property, plant and equipment (1.2) (0.6)
Purchase of computer software and website development (1.2) (1.2)
Purchase of magazine titles and events - (0.8)
Purchase of subsidiary undertakings, net of cash acquired (117.1) (31.8)
Disposal of magazine titles and trademarks - 0.2
Net cash used in investing activities (119.5) (34.2)
----------------------------------------------------------- ---------- -------------------
Cash flows from financing activities
Proceeds from issue of Ordinary share capital 105.7 22.0
Costs of share issue (3.4) (1.0)
Draw down of bank loans 7.4 23.3
Repayment of bank loans (3.3) (12.0)
Bank arrangement fees (0.1) (0.7)
Repayment of finance leases - (0.1)
Net cash generated from financing activities 106.3 31.5
----------------------------------------------------------- ---------- -------------------
Net (decrease)/increase in cash and cash equivalents (3.4) 7.3
Cash and cash equivalents at beginning of year 10.1 2.9
Exchange adjustments (0.3) (0.1)
----------------------------------------------------------- ---------- -------------------
Cash and cash equivalents at end of year 6.4 10.1
----------------------------------------------------------- ---------- -------------------
Notes to the Consolidated cash flow statement
for the year ended 30 September 2018
A. Cash generated from operations
The reconciliation of profit for the year to cash generated from
operations is set out below:
2018 2017
GBPm GBPm
--------------------------------------------------------- ------ ------
Profit for the year 2.9 1.6
-
--------------------------------------------------------- ------ ------
Adjustments for:
Depreciation charge 0.6 0.3
Amortisation of intangible assets 7.3 4.1
Share schemes
- Value of employees' services 2.6 1.8
Net finance costs 0.9 0.6
Tax charge/(credit) 1.5 (1.4)
--------------------------------------------------------- ------ ------
Profit before changes in working capital and provisions 15.8 7.0
Movement in provisions - 1.0
Decrease in inventories 0.7 0.1
(Increase)/decrease in trade and other receivables (7.0) 6.0
Increase/(decrease) in trade and other payables 5.2 (2.1)
--------------------------------------------------------- ------ ------
Cash generated from operations 14.7 12.0
--------------------------------------------------------- ------ ------
B. Analysis of net cash/(debt)
Finance leases Other non-cash Exchange 30 September
1 October 2017 Cash flows entered into changes movements 2018
GBPm GBPm GBPm GBPm GBPm GBPm
---------------- --------------- ----------- ---------------- ---------------- ---------------- ----------------
Cash and cash
equivalents 10.1 (3.4) - - (0.3) 6.4
Debt due within
one year (3.2) (5.4) 0.1 - - (8.5)
Debt due after
more than one
year (16.9) 1.0 (0.1) 0.3 - (15.7)
Net debt (10.0) (7.8) - 0.3 (0.3) (17.8)
---------------- --------------- ----------- ---------------- ---------------- ---------------- ----------------
C. Reconciliation of movement in net cash/(debt)
2018 2017
GBPm GBPm
-------------------------------------------------- ------- -------
Net (debt)/cash at start of year (10.0) 0.5
(Decrease)/increase in cash and cash equivalents (3.4) 7.3
Increase in borrowings (4.4) (11.2)
Borrowings acquired with subsidiaries - (6.9)
Finance leases entered into - (0.1)
Other non-cash changes 0.3 0.5
Exchange movements (0.3) (0.1)
-------------------------------------------------- ------- -------
Net debt at end of year (17.8) (10.0)
-------------------------------------------------- ------- -------
Accounting policies
Basis of preparation
This preliminary statement of annual results for the year ended
30 September 2018 is unaudited and does not constitute statutory
accounts. The information in this statement is based on the
statutory accounts for the year ended 30 September 2018. The
statutory accounts have not yet been delivered to the Registrar of
Companies nor have the auditors yet reported on these.
The statutory accounts are prepared in accordance with
International Financial Reporting Standards (IFRS) issued by the
International Accounting Standards Board (IASB) and the
International Financial Reporting Interpretations Committee's
(IFRIC) interpretations as adopted by the European Union,
applicable as at 30 September 2018, and those parts of the
Companies Act 2006 applicable to companies reporting under
IFRS.
The accounting policies adopted, methods of computation and
presentation are consistent with those set out in the Group's
statutory accounts for the year ended 30 September 2018.
Going concern
The financial statements have been prepared on a going concern
basis.
Basis of consolidation
The consolidated financial statements incorporate the financial
statements of Future plc (the Company) and its subsidiary
undertakings. Subsidiaries are all entities controlled by the
Group. Control exists when the Group is either exposed to or has
the rights to variable returns from its involvement with the entity
and has the ability to affect those returns through its power over
the entity. Subsidiaries are fully consolidated from the date on
which control is transferred to the Group. They are deconsolidated
from the date that control ceases. The purchase method of
accounting is used to account for the acquisition of subsidiaries
by the Group.
The cost of an acquisition is measured as the fair value of the
assets given, equity instruments issued and liabilities incurred or
assumed at the date of exchange, and includes the fair value of any
asset or liability resulting from a contingent consideration
arrangement. Acquisition-related costs are expensed as incurred.
Identifiable assets acquired and liabilities and contingent
liabilities assumed in a business combination are measured
initially at their fair values at the acquisition date. The excess
of the cost of acquisition over the fair value of the Group's share
of the identifiable net assets acquired is recorded as
goodwill.
Inter-company transactions, balances and unrealised gains on
transactions between Group companies are eliminated. Unrealised
losses are also eliminated but are considered an impairment
indicator of the asset transferred. Accounting policies of
subsidiaries have been changed where necessary to ensure
consistency with the policies adopted by the Group.
Presentation of non-statutory measures
The Directors believe that adjusted results and adjusted
earnings per share provide additional useful information on the
core operational performance of the Group to shareholders, and
review the results of the Group on an adjusted basis internally.
The term 'adjusted' is not a defined term under IFRS and may not
therefore be comparable with similarly titled profit measurements
reported by other companies. It is not intended to be a substitute
for, or superior to, IFRS measurements of profit.
Adjustments are made in respect of:
Share-based payments - share-based payment expenses or credits,
together with the associated social security costs, are excluded
from the adjusted results of the Group as the Directors believe
they result in a level of charge that would distort the user's view
of the core trading performance of the Group.
Exceptional items - the Group considers items of income and
expense as exceptional and excludes them from the adjusted results
where the nature of the item, or its size, is material and likely
to be non-recurring in nature (in the medium term) so as to assist
the user of the financial statements to better understand the
results of the core operations of the Group. Details of exceptional
items are shown in note 3.
Amortisation of acquired intangible assets - the amortisation
charge for those intangible assets recognised on business
combinations is excluded from the adjusted results of the Group
since they are non-cash charges arising from non-trading investment
activities. As such, they are not considered reflective of the core
trading performance of the Group.
Non-trading foreign exchange gains and losses - certain other
items are excluded from adjusted results where their inclusion
distorts the comparability of core trading results year on
year.
The tax related to adjusting items is the tax effect of the
items above calculated using the standard rate of corporation tax
in the relevant jurisdiction.
A reconciliation of adjusted operating profit to profit before
tax is shown below:
2018 2017
GBPm GBPm
-------------------------------------------------------- ------ ------
Adjusted operating profit 18.5 8.9
Adjusted net finance costs (1.1) (0.6)
-------------------------------------------------------- ------ ------
Adjusted profit before tax 17.4 8.3
Adjusting items:
Share-based payments (including social security costs) (3.1) (2.1)
Exceptional items (4.4) (3.7)
Amortisation of acquired intangibles (5.7) (2.3)
Non-trading foreign exchange gain 0.2 -
Profit before tax 4.4 0.2
-------------------------------------------------------- ------ ------
A reconciliation between adjusted and statutory earnings per
share measures is shown in note 7.
Notes
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 reported separately due to its size.
(a) Reportable segment
(i) Segment revenue
2018 2017
GBPm GBPm
-------------------------- ------ ------
UK 92.5 67.2
US 39.9 19.1
Revenue between segments (7.8) (1.9)
Total 124.6 84.4
-------------------------- ------ ------
Transactions between segments are carried out at arm's
length.
(ii) Segment adjusted EBITDA
2018 2017
Underlying Adjusted EBITDA Underlying Adjusted
adjusted Intragroup GBPm adjusted Intragroup EBITDA
EBITDA adjustments EBITDA adjustments GBPm
GBPm GBPm GBPm GBPm
------- -------------- -------------- ------------------- --------------- -------------- ---------------
UK 7.5 7.8 15.3 5.0 1.9 6.9
US 13.2 (7.8) 5.4 6.0 (1.9) 4.1
Total 20.7 - 20.7 11.0 - 11.0
------- -------------- -------------- ------------------- --------------- -------------- ---------------
Adjusted EBITDA is used by the executive Directors to assess the
performance of each segment. The table above shows the impact of
intragroup adjustments on the adjusted EBITDA of each segment.
Intra-group adjustments relate to the net impact of charges from
the UK to the US in respect of management fees (for back office
revenue functions such as finance, HR and IT which are based in the
UK) and licence fees for the use of intellectual property. The
increase in the year is driven by the growth in media revenue in
the US.
A reconciliation of total segment adjusted EBITDA to profit
before tax is provided as follows:
2018 2017
GBPm GBPm
-------------------------------------------------------- ------ ------
Total segment adjusted EBITDA 20.7 11.0
Share-based payments (including social security costs) (3.1) (2.1)
Depreciation (0.6) (0.3)
Amortisation (7.3) (4.1)
Exceptional items (4.4) (3.7)
Net finance costs (0.9) (0.6)
Profit before tax 4.4 0.2
-------------------------------------------------------- ------ ------
(b) Business segment
After geographical location, the Group is managed in two
segments. The Media segment comprises websites and events and the
Magazine segment comprises magazines. An additional segment, Other,
was retained to reflect unallocated salaries and other direct costs
which are not directly charged to the business segments for
internal reporting purposes. The Group considers that the assets
within each segment are exposed to the same risks.
(i) Revenue by business segment
2018 2017
GBPm GBPm
-------------------------- ------ ------
Media 71.9 35.8
Magazine 60.5 50.5
Revenue between segments (7.8) (1.9)
Total 124.6 84.4
-------------------------- ------ ------
(ii) Gross profit by business segment
2018 2017
GBPm GBPm
--------------------------------- ------- -------
Media 54.2 27.6
Magazine 39.7 33.4
Other (44.1) (31.8)
Add back: distribution expenses 5.5 4.7
Total 55.3 33.9
--------------------------------- ------- -------
2. Net operating expenses
Operating profit is stated after charging:
2018 2017
Adjusted Adjusting Statutory Adjusted Adjusting Statutory
results GBPm items GBPm results results items results GBPm
GBPm GBPm GBPm
------------------- -------------- -------------- --------------- --------------- --------------- --------------
Cost of sales (69.3) - (69.3) (50.5) - (50.5)
Distribution
expenses (5.5) - (5.5) (4.7) - (4.7)
Share-based
payments
(including social
security costs) - (3.1) (3.1) - (2.1) (2.1)
Exceptional items
(note 3) - (4.4) (4.4) - (3.7) (3.7)
Depreciation (0.6) - (0.6) (0.3) - (0.3)
Amortisation (1.6) (5.7) (7.3) (1.8) (2.3) (4.1)
Other
administration
expenses (29.1) - (29.1) (18.2) - (18.2)
Total (106.1) (13.2) (119.3) (75.5) (8.1) (83.6)
------------------- -------------- -------------- --------------- --------------- --------------- --------------
3. Exceptional items
2018 2017
GBPm GBPm
------------------------------------------- ------ ------
Vacant property provision movements (0.1) 1.2
Restructuring and redundancy costs 0.2 1.1
Acquisition and integration related costs 4.3 1.4
Total charge 4.4 3.7
------------------------------------------- ------ ------
The vacant property provision movement (GBP0.9m credit in the
UK, GBP0.8m charge in the US) relates to surplus office space in
the UK and the US.
The restructuring and redundancy costs relate mainly to staff
termination payments and other restructuring activities.
The acquisition and integration related costs represent fees
incurred in respect of the acquisitions and subsequent integrations
of Purch Group LLC, NewBay Media LLC and the specialist consumer
titles purchased from Haymarket Media Group. Further details of
these acquisitions can be found in note 13.
4. Finance income and costs
2018 2017
GBPm GBPm
------------------------------------------------------------------------- ------------------ ------
Fair value gain on interest rate derivative not in a hedge relationship - 0.1
Total finance income - 0.1
Interest payable on interest-bearing loans and borrowings (0.9) (0.4)
Amortisation of bank loan arrangement fees (0.2) (0.2)
Other finance costs - (0.1)
------------------------------------------------------------------------- ------------------ ------
Adjusted finance costs (1.1) (0.7)
Non trading foreign exchange gain 0.2 -
------------------------------------------------------------------------- ------------------ ------
Total reported finance costs (0.9) (0.7)
------------------------------------------------------------------------- ------------------ ------
Net finance costs (0.9) (0.6)
------------------------------------------------------------------------- ------------------ ------
5. Tax on profit
The tax charged in the consolidated income statement is analysed
below:
2018 2017
GBPm GBPm
Corporation tax
Current tax at 19% (2017: 19.5%) on the profit for the year 1.8 0.6
Adjustments in respect of previous years 0.1 0.2
---------------------------------------------------------------- ------ ------
Current tax charge 1.9 0.8
Deferred tax origination and reversal of temporary differences
Current year charge/(credit) 0.5 (2.0)
Adjustments in respect of previous years (0.9) (0.2)
---------------------------------------------------------------- ------ ------
Deferred tax (0.4) (2.2)
Total tax charge/(credit) 1.5 (1.4)
---------------------------------------------------------------- ------ ------
In 2013 the Group reached agreement with HMRC relating to the
tax treatment of certain one-off transactions which took place in
2003. Part of that agreement resulted in the Group paying tax of
GBP6.2m plus interest, comprising instalments of GBP85,000 per
month over five years from July 2013 and a final instalment of
GBP2.0m.This was fully settled in June 2018.
6. Dividends
Equity dividends 2018 2017
---------------------------------------------------- ----- -----
Number of shares in issue at end of year (million) 81.5 45.4
Dividends paid in year (pence per share) - -
---------------------------------------------------- ----- -----
Dividends paid in year (GBPm) - -
---------------------------------------------------- ----- -----
7. Earnings per share
Basic earnings per share are calculated using the weighted
average number of Ordinary shares in issue during the year. 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.
Adjusted earnings per share remove the effect of share based
payments, exceptional items, amortisation of intangible assets
arising on acquisitions, impairment of intangible assets, exchange
losses included in finance costs and any related tax effects from
the calculation.
2017
Total Group 2018 restated*
------------------------------------------------------------------- ----------- -----------
Adjustments to profit after tax:
Profit after tax (GBPm) 2.9 1.6
Share based payments (including social security costs) (GBPm) 3.1 2.1
Exceptional items (GBPm) 4.4 3.7
Amortisation of intangible assets arising on acquisitions (GBPm) 5.7 2.3
Exchange gains included in finance costs (GBPm) (0.2) -
Tax effect of the above adjustments (GBPm) (1.0) (1.1)
Adjusted profit after tax (GBPm) 14.9 8.6
------------------------------------------------------------------- ----------- -----------
Weighted average number of shares in issue during the year:
- Basic 56,886,851 43,601,771
- Dilutive effect of share options 4.453.155 3,126,287
- Diluted 61,340,006 46,728,058
Basic earnings per share (in pence) 5.1 3.7
Adjusted basic earnings per share (in pence) 26.2 19.7
Diluted earnings per share (in pence) 4.7 3.4
Adjusted diluted earnings per share (in pence) 24.3 18.4
------------------------------------------------------------------- ----------- -----------
The adjustments to profit after tax have the following effect:
Basic earnings per share (pence) 5.1 3.7
Share based payments (including social security costs) (pence) 5.4 4.8
Exceptional items (pence) 7.7 8.5
Amortisation of intangible assets arising on acquisitions (pence) 10.0 5.3
Exchange losses included in finance costs (pence) (0.3) -
Tax effect of the above adjustments (pence) (1.7) (2.6)
------------------------------------------------------------------- ----------- -----------
Adjusted basic earnings per share (pence) 26.2 19.7
------------------------------------------------------------------- ----------- -----------
Diluted earnings per share (pence) 4.7 3.4
Share based payments (including social security costs) (pence) 5.1 4.5
Exceptional items (pence) 7.2 7.9
Amortisation of intangible assets arising on acquisitions (pence) 9.3 4.9
Exchange losses included in finance costs (pence) (0.3) -
Tax effect of the above adjustments (pence) (1.7) (2.3)
------------------------------------------------------------------- ------ ------
Adjusted basic earnings per share (pence) 24.3 18.4
------------------------------------------------------------------- ------ ------
*2017 figures have been restated to reflect the bonus element of
the rights issue that took place in August 2018.
8. Intangible assets
Goodwill Acquired intangibles Other Total
GBPm GBPm GBPm GBPm
------------------------------------------------------ --------- --------------------- ------- --------
Cost
At 1 October 2016 293.9 14.3 17.5 325.7
Additions through business combinations 36.6 25.5 0.1 62.2
Other additions - - 1.5 1.5
Adjustments to fair value on prior year acquisitions (0.2) - - (0.2)
Disposals - (1.4) - (1.4)
Exchange adjustments (1.1) (0.2) (0.3) (1.6)
------------------------------------------------------ --------- --------------------- ------- --------
At 30 September 2017 329.2 38.2 18.8 386.2
Additions through business combinations 34.1 83.3 - 117.4
Other additions - - 1.2 1.2
Adjustments to fair value on prior year acquisitions (0.2) - - (0.2)
Exchange adjustments 0.9 0.1 - 1.0
At 30 September 2018 364.0 121.6 20.0 505.6
------------------------------------------------------ --------- --------------------- ------- --------
Accumulated amortisation
At 1 October 2016 (264.4) (13.2) (14.9) (292.5)
Charge for the year - (2.3) (1.8) (4.1)
Disposals - 1.1 - 1.1
Exchange adjustments 1.0 0.2 0.4 1.6
At 30 September 2017 (263.4) (14.2) (16.3) (293.9)
Charge for the year - (5.7) (1.6) (7.3)
Exchange adjustments (0.8) (0.2) - (1.0)
At 30 September 2018 (264.2) (20.1) (17.9) (302.2)
------------------------------------------------------ --------- --------------------- ------- --------
Net book value at 30 September 2018 99.8 101.5 2.1 203.4
------------------------------------------------------ --------- --------------------- ------- --------
Net book value at 30 September 2017 65.8 24.0 2.5 92.3
------------------------------------------------------ --------- --------------------- ------- --------
Net book value at 1 October 2016 29.5 1.1 2.6 33.2
------------------------------------------------------ --------- --------------------- ------- --------
Acquired intangibles relate mainly to trademarks, advertising
relationships, publishing rights and customer lists. These assets
are amortised over their estimated economic lives, typically
ranging between one and ten years.
Impairment assessment for goodwill
The net book value of goodwill at 30 September 2018 consists of
GBP72.8m relating to the UK and GBP27.0m relating to the US. The
goodwill at 30 September 2017 relates wholly to the UK.
At 30 September 2018 the Group performed its annual impairment
assessment of goodwill and concluded that no impairment of goodwill
was required.
9. Cash and cash equivalents
2018 2017
GBPm GBPm
--------------------------- ----- -----
Cash at bank and in hand 6.4 10.1
Cash and cash equivalents 6.4 10.1
--------------------------- ----- -----
10. Financial liabilities - loans and borrowings
Non-current liabilities
Interest rate
Interest rate at 30 September at 30 September 2018 2017
2018 2017 GBPm GBPm
------------------------- ------------------------------ ----------------- ----- ------
Sterling term loan 3.0% 2.8% 7.6 10.0
Sterling revolving loan 3.0% 2.8% 8.1 6.9
Total 15.7 16.9
------------------------- ------------------------------ ----------------- ----- ------
Current liabilities
Interest rate
Interest rate at 30 September at 30 September 2018 2017
2018 2017 GBPm GBPm
---------------------------------- ------------------------------ ----------------- ------ ------
Sterling term loan 3.0% 2.8% 2.3 1.8
Sterling revolving loan 3.0% 2.8% 0.9 1.3
US dollar term loan 4.8% - 5.3 -
Obligations under finance leases - 0.1
---------------------------------- ------------------------------ ----------------- ------ ------
Total 8.5 3.2
---------------------------------- ------------------------------ ----------------- ------ ------
The interest-bearing loans and borrowings are repayable as
follows:
2018 2017
GBPm GBPm
---------------------------- ----- -----
Within one year 8.8 3.2
Between one and two years 4.9 3.3
Between two and five years 11.0 13.6
---------------------------- ----- -----
Total 24.7 20.1
---------------------------- ----- -----
Following the acquisition of NewBay Media LLC on 3 April 2018,
the Group negotiated a new bank facility of $7,000,000 with HSBC
Bank plc. The new facilities run to 3 July 2019. Repayments
required in respect of the facilities are as follows:
Repayment date Repayment amount
--------------- ----------------
3 July 2019 $7,000,000
The Group has granted security to the bank and the availability
of the facility is subject to certain covenants.
Total fees relating to the new facility amounted to GBP0.1m and
these are being amortised over the term of the facility. The bank
borrowings and interest are guaranteed by Future plc.
Interest payable under the current credit facility for sterling
denominated loans is calculated as the cost of one-month LIBOR
(currently approximately 0.7%) plus an interest margin of between
2.0% and 2.5%, dependent on the level of Bank EBITDA.
Interest payable under the current credit facility for the US
dollar denominated loan is calculated as the cost of one month USD
LIBOR (currently approximately 2.3%) plus an interest margin of
between 2.0% and 2.5%.
The Group has covenants in respect of net debt/Bank EBITDA and
Bank EBITDA/interest, both of which were met at 30 September 2018.
For covenant purposes, net debt is exclusive of non-current tax and
other payables and Bank EBITDA is not materially different to
statutory EBITDA.
11. Provisions
Property
GBPm
---------------------- ---------
At 1 October 2017 2.6
Charged in the year 1.4
Released in the year (1.0)
Utilised in the year (0.2)
At 30 September 2018 2.8
---------------------- ---------
The provision for property relates to dilapidations and
obligations under short leasehold agreements on vacant property.
The vacant property provision is expected to be utilised over the
next 9 years.
12. Related party transactions
The Group had no material transactions with related parties in
2018 or 2017 which might reasonably be expected to influence
decisions made by users of these financial statements.
13. Acquisitions
Acquisition of NewBay Media LLC
On 3 April 2018 Future US inc. acquired 100% of the share
capital of NewBay Media LLC (NewBay), the mainly US based
information and events business, for net consideration of GBP8.8m
cash and GBP1.1m shares.
The impact of the acquisition on the consolidated balance sheet
was:
Provisional
fair value
GBPm
------------------------------- -----------------
Intangible assets:
* Publishing rights 2.5
* Brands 2.0
* Other intangibles 0.9
Trade and other receivables 4.6
Trade and other payables (6.7)
Deferred tax (0.1)
Net assets acquired 3.2
------------------------------- -----------------
Goodwill 6.7
Consideration:
Equity shares 1.1
Cash 8.8
Total consideration 9.9
------------------------------- -----------------
The goodwill is attributable to the synergies expected to arise
in integrating the magazines into the wider Future group and
through combining production and back office functions. The
publishing rights, customer lists, events and brands will be
amortised over a period of five years. The goodwill is expected to
be deductible for tax purposes.
The acquisition enhances the Group's market leading position in
music and consumer electronics and in addition brings B2B titles in
the complementary verticals of audio visual, television
broadcasting and educational technology, which will further
increase the Group's revenue diversification model whilst also
bringing B2B expertise to the Group's existing titles.
Acquisition of Haymarket titles
On 1 May 2018 Future Holdings 2002 Limited completed the
acquisition of the specialist consumer titles of What Hi-Fi?,
FourFourTwo, Practical Caravan and Practical Motorhome from
Haymarket Media Group for net consideration of GBP9.3m cash and
GBP1.4m shares.
The impact of the acquisition on the consolidated balance sheet
was:
Provisional
fair value
GBPm
-------------------------------- --------------------
Intangible assets:
* Publishing rights 1.3
* Brands 0.2
3.8
* Websites (0.9)
Trade and other payables
Deferred tax (0.9)
Net assets acquired 3.5
-------------------------------- --------------------
Goodwill 7.2
Consideration:
Equity shares 1.4
Cash 9.3
Total consideration 10.7
-------------------------------- --------------------
The goodwill is attributable to the synergies expected to arise
in integrating the magazines and websites into the wider Future
group. The goodwill will not be deductible for tax purposes. The
publishing rights, brands and websites will be amortised over a
period of five years. The acquisition presents organic growth
opportunities by leveraging and expanding brands and content
through the Group's platform.
Acquisition of Purch Group LLC
On 4 September 2018, Future US inc. acquired 100% of the share
capital of Purch Group LLC, a technology platform and publisher,
for net consideration of GBP99.1m.
The impact of the acquisition on the consolidated balance sheet
was:
Provisional
fair value
GBPm
----------------------------- ------------
Intangible assets:
* Customer lists 10.0
* Websites 62.5
Trade and other receivables 11.2
Trade and other payables (4.8)
Net assets acquired 78.9
----------------------------- ------------
Goodwill 20.2
Consideration:
Cash 99.1
Total consideration 99.1
----------------------------- ------------
The goodwill is attributable to the synergies expected to arise
in integrating the websites and customer lists into the wider
Future group. The websites and customer lists will both be
amortised over a period of 10 years. The goodwill is expected to be
deductible for tax purposes.
This acquisition substantially strengthens the Group's presence
in the US market, boosting its scale and momentum while further
diversifying our revenue streams. Purch B2C's leading brands also
gives the Group market leadership in the highly attractive consumer
technology market. In addition, its data driven content model is
highly complementary to the Group's existing capabilities and will
accelerate the Group's progress as it continues to build its global
platform for specialist media.
See note 3 for details of the total amount of Acquisition and
integration related costs recognised as exceptional items in
respect of these acquisitions.
The fair values are described as 'provisional' for each of the
acquisitions as they all occurred within 6 months of the balance
sheet date and so further time is required (particularly in respect
of Purch) in order to full ascertain the fair value of assets and
liabilities acquired.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR FESSMDFASELF
(END) Dow Jones Newswires
November 23, 2018 02:05 ET (07:05 GMT)
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