Magazine publisher Future has delivered “disappointing” financial results, having overspent in new acquisitions, after the group announced its profits were down by a third in its results to 30 September 2006.
The publisher’s profits fell by a third to £13.7 million in the year to the end of September. Lower sales and ad revenues from its games magazines and the under performance of titles it had acquired, particularly those from Highbury, were blamed.
Future has closed or sold 38 UK magazines in the past financial year, including 16 puzzle titles acquired from Highbury, and six titles in the US. It has also sold its Italian business in a management buy-out and now plans to focus solely on English language brands.
“It is clear with hindsight that during the past two years, Future over-invested in acquisitions and under-invested in organic development,” said Stevie Spring, Future’s recently appointed chief executive. “The consequences of this strategy are clearly evident in today’s disappointing results, with underlying profits down by a third and some significant exceptional charges and write offs.”
Spring said the company would now focus on strengthening its focus on magazines and websites appealing to young men. Following the launch of technology and action sports portals, Future will next launch umbrella sites devoted to music and cycling.
“We have taken a number of steps to strengthen the business,” she said. “These actions have created significant cost savings, which we are fully re-investing in the business. We have also outlined today our six key areas of focus for 2007 and beyond. They encapsulate how we are going to deliver on our objective to improve our financial performance and rebuild shareholder confidence in the business.”
She added: “I am pleased at how the business is responding to the changes we’re making, but anticipate that 2007 will be a year of transition as we evolve our business models to reflect changing consumer, advertiser and retailer behaviour, and ensure we have a more focused and responsive group.
“Our new financial year has begun satisfactorily, but we continue to take a cautious view of our markets and anticipate that trading conditions will remain challenging throughout 2007.”
In August, the company cut its profit forecast by more than 20% because of continued weakness in both advertising and newsstand revenues. It said that profit for the current financial year to 30 September 2006 was now considered likely to be approximately £3.5 million below the market’s £16.5 million forecast for earnings before interest, tax and amortisation expectations (see Future Cuts Profit Forecast).
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