Future Shares In Freefall As True Cost Of Accounting Errors Is Revealed

Shares in Future Network have plummeted after the company issued a profits warning to the stock market this morning. The company has indicated that underlying profits for the year to December 2000 will be around £40m, around £6m lower than analysts’ estimates published earlier in the year.

Future has given a number of reasons for this, not least of which was the accounting anomaly equating to an earnings shortfall of £1.1m, which was discovered in its French business earlier in the year (see Sharewatch). The shortfall has led to a reduction in expectations for the second half, and has incurred the additional cost of bringing in external auditors.

The company also points to the “continued softness” of the computer games market, on which many of its more successful titles are based. One recent illustration of this has been Sony’s announcement that it is to reduce its allocation of PlayStation 2 units in Europe- bad news for Future, which has produced the Official PlayStation 2 Magazine to coincide with the launch (see Appointments Brief). It also says that US technology companies have been taking a more conservative outlook of late, reducing advertising forecasts for the end-of-year issues of Business 2.0’s US edition.

Future’s chief executive, Greg Ingham commented, “Although we’ve continued to enjoy strong growth in both revenues and underlying profits this year, we are naturally disappointed that these vital Q4 numbers look set to come in below the original high goals we set ourselves.”

At 1:30pm today, shares in the company were worth just £2.30, down over 46% on Friday’s closing price of £4.90.

Future: 01225 442 244

UK media shares are monitored and listed daily in MediaTel Newsline’s Sharewatch