REG - Future PLC - 2024 HALF YEAR RESULTS
16/05/2024 07:00
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RNS Number : 6248O Future PLC 16 May 2024
16 May 2024
FUTURE plc
2024 HALF YEAR RESULTS
Future plc (LSE: FUTR, "Future", "the Group"), the global platform for
specialist media, today publishes its results for the half-year ended 31 March
2024.
Highlights
Financial results for the six months ended 31 March 2024
Adjusted results¹ HY 2024 HY 2023 Reported Var Constant(1) currency var Organic(1) Var
Revenue (£m) 391.5 404.7 (3)% (1)% (2)%
Adjusted EBITDA (£m) 113.9 141.9 (20)% (17)% n/a
Adjusted operating profit (£m) 105.8 130.3 (19)% (16)% n/a
Adjusted operating profit margin (%) 27% 32% (5)ppt (5)ppt n/a
Adjusted diluted EPS (p) 57.2 71.2 (20)% n/a n/a
Adjusted free cash flow (£m) 126.0 130.0 (3)% n/a n/a
( )
Statutory results HY HY Reported Var
2024 2023
Revenue (£m) 391.5 404.7 (3)%
Operating profit (£m) 63.7 83.9 (24)%
Operating profit margin (%) 16% 21% (5)ppt
Profit before tax (£m) 46.6 66.4 (30)%
Diluted EPS (p) 29.0 46.7 (38)%
Cash generated from operations (£m) 130.4 117.3 +11%
(1) The Glossary section of this document provides definitions of, and
reconciliations to, adjusted measures.
Financial highlights
● Revenue of £391.5m (HY 2023: £404.7m), down (3)% year-on-year,
impacted by a modest (2)% organic decline combined with adverse foreign
exchange (mainly USD) and offset by the impact of acquisitions and disposals.
○ The Group returned to year-on-year revenue growth in Q2 with
organic revenue growth of +3%.
○ UK revenue grew by +3% on an organic basis with very strong growth
in price comparison (Go.Compare), up +30%, and good growth in B2B. As
anticipated, other media performance (digital advertising, affiliate products,
events), was impacted by market conditions, down (9)%.
○ US revenue declined by (11)% on an organic basis, with an
improving trend through Q2. Digital advertising returned to organic
year-on-year growth in Q2, notably across direct to client sales, whilst
affiliate products continued to be impacted by weak consumer sentiment.
● Profitability was mainly impacted by an adverse revenue mix and
investment from the previously announced Growth Acceleration Strategy,
resulting in an adjusted operating profit decline of (19)% to £105.8m (HY
2023 £130.3m). Statutory operating profit was down (24)% to £63.7m (HY 2023:
£83.9m).
● The Group remains highly cash generative with adjusted free cash
flow of £126.0m (HY 2023: £130.0m), representing 119% of adjusted operating
profit (HY 2023: 100%). Cash generated from operations was £130.4m (HY 2023:
£117.3m).
● Leverage(1) was unchanged at 1.25x (FY 2023: 1.25x) with net
debt(1) at the end of the half year of £296.7m (FY 2023: £327.2m). Total
available debt facilities at the end of March 2024 were £650m (FY 2023:
£900m).
● £35.9m was returned to shareholders during the period with
£32.0m through the completed £45m share buyback programme launched in August
2023 (HY 2023: £nil) and dividends of £3.9m (HY 2023: £4.1m). The Group
plans a further return of up to £45m to shareholders through a share buyback
programme commencing shortly. Once the Share Buyback Programme commences, the
Board will keep it under review and continue to assess it against its capital
allocation priorities.
Growth Acceleration Strategy (GAS)
● In December 2023, we launched the Growth Acceleration Strategy
("GAS") to ensure Future is well-positioned to capitalise on future
opportunities in its attractive and growing markets. This is a two-year
investment programme of £25m-£30m to drive acceleration in a compounding
model by:
● Growing a highly engaged and valuable audience - increased focus
on brand leadership and content:
○ Online users(3) stabilisation from H2 2023 with growth in
Technology and Gaming verticals with total online users of 222m in HY 2024,
exiting the half year with 232m online users (HY 2023: 247m, H2 2023: 234m).
○ We now have four top 3 leadership positions(2) in key strategic
verticals in the US and/or UK (HY 2023: three), which we believe will enable
higher yields through improved revenue per user and greater resilience.
● Diversifying and increasing revenue per user - adding new routes
of monetisation and driving market-leading positions to improve yield:
○ First steps in expanding digital product range in email, social
video including social commerce, and digital subscriptions.
○ Go.Compare year-on-year revenue growth of +30% driven by strong
car insurance performance.
○ B2B returned to year-on-year growth with organic revenue growth of
+7%.
● Optimising our portfolio
○ This is a continuous process and is supported by the brand
segmentation between Hero, Halo and Cash Generators and the recently announced
reorganisation of the Group into three distinct business units - B2C,
Go.Compare and B2B.
○ The Board's view is that the businesses making up the Group are
significantly undervalued. The Board will continue to keenly appraise
performance and will actively look at further options to accelerate value
creation across the Group's business units.
CFO appointment
As announced on 3 May 2024, Sharjeel Suleman will join the Group as CFO no
later than October 2024, replacing Penny Ladkin-Brand who will be leaving the
Group and stepping down from the Board on 28 July 2024.
Outlook
● The stabilisation of trends and return to Group organic revenue
growth in Q2 give us confidence in delivering full year performance in line
with expectations.
● We expect to deliver Group organic revenue growth in H2 2024 and a
full year adjusted operating margin of approximately 28%.
● Longer-term, we are confident that the focused execution of our
GAS investment programme will drive accelerating organic revenue growth of
mid-single digit compound annual growth ("CAGR") over the next three years
with an adjusted margin of 28-30%.
Jon Steinberg, Future's Chief Executive, said:
"In December we set out plans to ensure that Future is best positioned to
capitalise on opportunities in our markets. These plans are centred on growing
a highly engaged audience, diversifying and increasing Revenue Per User and
optimising our portfolio. I'm pleased to report that in the early stages of
this two-year plan we have made good progress, which will enable us to drive
accelerating revenue growth.
Overall trading in the first-half was in line with our expectations. Whilst
the market environment remains challenging, we are encouraged by a return to
organic revenue growth in Q2, progress which has continued into Q3. Our focus
for the balance of the year is on continued implementation of the Growth
Acceleration Strategy, with a particular focus on optimising the portfolio and
accelerating value creation for shareholders."
Presentation
A live webcast of the analyst presentation will be available at 08.30 am (UK
time) today at
https://stream.brrmedia.co.uk/broadcast/6631f9e03d21e42c1c32b967
(https://stream.brrmedia.co.uk/broadcast/6631f9e03d21e42c1c32b967)
A copy of the presentation will be available on our website at:
https://www.futureplc.com/investor-results/
A recording of the webcast will also be made available.
The definitions below apply throughout the document.
1) A reconciliation of adjusted results to statutory measures is included in
the Glossary section at the end of this document
2) Comscore Media Metrix Demographic Profile, March 2024 - Mobile and Desktop
Age 2+ and Total Mobile 18+ US and UK
3) Online users defined as monthly online users from Google Analytics and,
unless otherwise stated, is the monthly average over the financial year and
excludes Gardening Know How. Forums are excluded as they are non-commercial
websites for which Future does not write content, and are not actively managed
or monetised.
Enquiries:
Future plc +44 (0)122 544 2244
Jon Steinberg, Chief Executive Officer
Penny Ladkin-Brand, Chief Financial and Strategy Officer
Marion Le Bot, Head of Investor Relations +44 (0)777 564 1509
Media +44 (0)203 805 4822
Headland
Stephen Malthouse, Charlie Twigg
future@headlandconsultancy.com
About Future
We are the platform for creating and distributing trusted, specialist content,
to build engaged and valuable global communities. We operate c.230 brands in
diversified content verticals, with multiple market leading positions and
three core monetisation frameworks: advertising, eCommerce affiliate and
direct consumer monetisation (subscriptions and newstrade magazine sale). Our
content is published and distributed through a range of formats including
websites, email newsletters, videos, magazines and live events. The successful
execution of our strategy is focused on three pillars: grow engaged audience,
diversify and grow revenue per user and optimise the portfolio.
Chief Executive Officer's review
Media has always been, and will always be, one of the most dynamic industries.
Therefore, the agility to lean into opportunities and capacity to fund growth
opportunities are paramount. This is the genesis of the Growth Acceleration
Strategy or GAS, announced at the full year results in December 2023. It
requires a two-year investment programme that will translate into accelerating
organic revenue growth of mid-single digit CAGR growth over the next three
years for the Group. We expect this to translate into high-single digit to low
double-digit growth for Media and mid-single digit decline in Magazines. Our
financial characteristics of healthy adjusted operating margins (28-30%) and
strong cash flow generation will remain.
GAS builds on our strong foundation of innovation and content expertise, but,
at the same time, recognises the requirement for a rigorous focus, and greater
diversification in the way in which our audiences reach our content.
Our strategic objectives
Our strategy is structured around a simple equation: reach valuable audiences
and grow Revenue Per User and apply this to as many monetisation routes
available, whilst optimising our portfolio to accelerate value creation.
1. Reach valuable audiences
Key to our operating model remains great content which drives the audience.
We are evolving our approach to content for reviews and news, focused on
improving the overall user experience notably through video and improved
buying guides. In the period, we have hired 30 editorial heads to support
content creation. Importantly, this has driven an increase in content output
(articles updated or created) in Q2 2024. We have focused our editorial
efforts on the most valuable content, driving an improved performance by
articles which have been updated or created by 10-20% compared to articles
which have not been updated. Additionally, we leverage our data to inform
editorial prioritisation to improve the return on editorial investment whilst
managing a good balance of news, 'how to' guides and buying guides.
In the period, we have also made progress on diversifying our acquisition of
audience, notably in social media and email newsletters. Email newsletter
subscribers are a loyal audience, with rich first-party data that feed into
our data audience platform, Aperture, which in turn enables more effective
contextual premium advertising.
A key measure of success to assess the value of our audience is our Comscore
ranking. In the period, we have added one top 3 Comscore position (Fashion
& Beauty in the UK) and now hold a total of four top 3 positions in the US
and in the UK.
2. Diversify and grow revenue per user
This strategic objective is broken down into two objectives: diversify
monetisation by adding new routes, and driving more value in our existing core
business (premiumisation).
Starting with our core business, the US digital advertising market is seven
times the size of the UK market, yet as it stands today, our US digital
revenue is only 2.4x the size of our UK revenue. The other opportunity in the
US (and UK) market is to move more of our advertising inventory out of open
auction into premium inventory to generate a higher yield and create
resilience. Today, only one third of our advertising inventory is sold
directly or through premium programmatic at a yield which is four times the
price of the open auction inventory, highlighting the tangible potential
growth opportunities. To drive these initiatives, we need to leverage our
brands, leadership positions and our sales expertise. These are already
starting to pay off, with growth in our US yield, supported by more inventory
being sold directly, as well as organic growth in US digital advertising in
Q2.
Looking at new opportunities, we aim to generate greater revenues from our
218m social followers (FY 2023: 217m) through branded content. In the period,
we have established a branded content team which connects editorial and sales.
Tom's Guide's successful TikTok video on foldable phones has enabled the US
sales team to produce branded content campaigns for a blue chip technology
company. The trend for advertisers now is to focus on both display and branded
content, therefore, having this capability not only drives a new route of
monetisation, but is also valuable to secure display campaigns.
3. Portfolio optimisation
As mentioned at the FY 2023 results in December 2023, we divided our brands
into three categories; Hero brands (~50% of Group revenue), Halo brands (~30%
of Group revenue) and Cash Generators (~20% of Group revenue) to prioritise
investment and create an ecosystem to leverage successful initiatives. This is
part of our portfolio optimisation strategic pillar with further work being
done to accelerate the optimisation of the portfolio. The segmentation is
driving results with organic revenue growth from Hero and Halo brands of +3%
in the period compared to (19)% organic decline in Cash Generators.
In the period, we went further in our approach by segmenting the Group into
three distinct businesses with newly appointed business leaders: B2C,
Go.Compare and B2B. This new structure will make the Group more agile and less
complex, enabling faster execution of the strategy to deliver improved growth.
Further work to refine the portfolio is currently being undertaken, creating a
philosophy of continuous assessment, driving focus and accountability to
ensure execution of our strategy.
The Board will continue to keenly appraise performance and will actively look
at further options to accelerate value creation across the Group's business
units.
Execution underpinned by values
Since joining a year ago, I've been extremely impressed by the depth of talent
and energy throughout Future, and I want to personally thank our colleagues
for their hard work. I am incredibly proud to be leading this organisation.
We operate as a purpose-driven organisation creating value for all
stakeholders. We aim to operate as a responsible business and everything we do
is underpinned by our purpose and values which fosters an aligned culture
across the organisation. We are extremely fortunate that our brands give us
the platform and opportunities to influence and inspire people across the
globe to encourage positive change.
Outlook
● The stabilisation of trends and return to Group organic revenue
growth in Q2 give us confidence in delivering full year performance in line
with expectations.
● We expect to deliver Group organic revenue growth in H2 2024 and a
full year adjusted operating margin of approximately 28%.
● Longer-term, we are confident that the focused execution of our
GAS investment programme will drive accelerating organic revenue growth of
mid-single digit compound annual growth ("CAGR") over the next three years
with an adjusted margin of 28-30%.
Financial summary
The financial summary is based primarily on a comparison of results for the
half-year ended 31 March 2024 with those for the half-year ended 31 March
2023.
HY 2024 HY 2023
£m £m
Revenue 391.5 404.7
Adjusted EBITDA 113.9 141.9
Adjusted operating profit 105.8 130.3
Adjusted profit before tax 88.8 113.1
Operating profit 63.7 83.9
Profit before tax 46.6 66.4
Basic earnings per share (p) 29.2 46.9
Diluted earnings per share (p) 29.0 46.7
Adjusted basic earnings per share (p) 57.5 71.7
Adjusted diluted earnings per share (p) 57.2 71.2
( )
The Directors believe that adjusted results provide additional useful
information on the core operational performance of the Group and review the
results on an adjusted basis internally. Refer to the Glossary section at the
end of this document for a reconciliation between adjusted and statutory
results.
Revenue
Revenue movement(1)
HY 2024
vs
HY 2023
%
Organic decline (2)%
Impact of acquisitions and disposals +1%
Year-on-year decline at constant rate (1)%
Impact of foreign exchange (2)%
Reported revenue change (3)%
(1) The Glossary section of this document provides definitions of, and
reconciliations to, adjusted measures.
Group revenue was down (3)% at actual currency and (2)% on an organic basis
with a further (2%) decline from adverse foreign exchange. HY 2023
acquisitions which have not been acquired for a full financial year and HY
2024 disposals contributed a net £7.0m (HY 2023: £2.4m) of revenue in the
period.
Revenue HY 2024 HY 2023 YoY Var Organic
£m £m YoY Var
Advertising & other 40.0 44.3 (10)% (9)%
Affiliates 113.2 94.5 +20% +20%
Media 153.2 138.8 +10% +11%
Magazines 95.2 99.1 (4)% (6)%
Total UK 248.4 237.9 +4% +3%
Advertising & other* 72.8 84.5 (14)% (9)%
Affiliates* 35.2 42.2 (17)% (18)%
Media 108.0 126.7 (15)% (12)%
Magazines 35.1 40.1 (12)% (8)%
Total US 143.1 166.8 (14)% (11)%
Advertising & other 112.8 128.8 (12)% (9)%
Affiliates 148.4 136.7 +9% +10%
Media 261.2 265.5 (2)% 0%
Magazines 130.3 139.2 (6)% (7)%
TOTAL REVENUE 391.5 404.7 (3)% (2)%
*£3.3m of ActualTech revenue from HY 2023 has been represented from events
(advertising & other) to demand gen (affiliates)
UK revenue increased by +4% or +£10.5m to £248.4m (HY 2023: £237.9m). Total
UK organic revenue was stronger than in the US with an increase of +3% with
+11% organic revenue growth in Media, marginally offset by a (6)% decline in
Magazines. This resilient performance was driven by a more diversified revenue
mix with the benefit of strong growth in price comparison, despite a higher
proportion of magazines. UK Media organic performance reflected a (9)% decline
in digital advertising with other media more stable, whilst affiliates were up
+20% as a result of strong growth of +30% in Go.Compare offset by a decline in
affiliate products. Q2 organic revenue growth accelerated from Q1 to +7% as a
result of the momentum from Go.Compare.
US revenue declined by (14)% or £(23.7)m to £143.1m (HY 2023: £166.8m),
including the negative impact of foreign exchange and contributions from
acquisitions. Organic revenue was down (11)% in the half but only down
year-on-year (5)% in Q2 as digital advertising returned to growth. Digital
advertising and other media revenue were down (9)% organically, whilst
affiliates revenue declined (18)% in the period, impacted by challenging
market dynamics. Magazines, which are a small proportion of the US revenue,
were down (8)% on an organic basis in the period, driven by market secular
decline.
Media revenue decreased by £(4.3)m or (2)% to £261.2m (HY 2023: £265.5m)
and was flat on an organic basis.
Organic digital advertising revenue declined by (12)% due to the impact of
lower online audiences year-on-year and challenging market conditions.
Importantly, the value of our audience combined with the effectiveness of our
sales teams has driven improvement in the direct digital advertising mix
driving yield resilience. This demonstrates the Group's ability to deliver
valuable audiences to advertisers. Organic other digital revenue increased
+15% organically due to the phasing shift of a big event, the Photography
show, from FY 2023.
Organic affiliate revenue grew by +10% in the period, with the very strong
growth in Go.Compare (+30%), vouchers (+4%) and B2B partially offset by a
decline of (24)% in eCommerce products. This performance highlights the
benefit of our diversification strategy. In Affiliate products, we have been
impacted by the wider macroeconomy, through lower demand as seen in the lower
audience numbers, as well as a reduction in the average basket size. In our
price comparison business, performance was strong, notably in car and home
insurance, benefiting from a high volume of quotes due to high renewal
premiums and the benefit of marketing effectiveness across the period.
HY 2024 Media revenues included £7.0m relating to the acquisitions of
Shortlist Media, ActualTech and Gardening Know How in the prior period.
Magazine revenue declined by £(8.9)m or (6)% to £130.3m (HY 2023: £139.2m).
Magazine organic revenue was down (7)% year-on-year. Subscriptions (49% of
Magazines revenue) experienced a (6)% organic decline, mainly in specialist
brands with more resilience in premium brands. The rest of the magazine
portfolio was down (8)% organically, largely due to a challenging comparative
for print advertising in the prior period.
REVENUE HY HY Reported change Organic change
2024 2023
B2C 263.4 301.0 (13)% (11)%
Go.Compare 96.1 73.8 +30% +30%
B2B 32.0 29.9 +7% +7%
Total revenue 391.5 404.7 (3)% (2)%
Following the reorganisation of the Group into three divisions, we are
starting to display the revenue performance, as evidenced in the table
above. Going forwards, we expect to disclose further divisional information
(see note 1).
Revenue for B2C was impacted by the challenging digital advertising market,
consumer spend on affiliates in Media with an improving trend in Q2, and
secular decline in magazines.
Revenue for our price comparison business Go.Compare grew +30% in the period
due to favourable market conditions and effective marketing, with particularly
strong car insurance performance.
Revenue in our B2B business grew by 7% in the period. During the course of the
year, we brought together our four separate B2B organisations to form a new
B2B division, having completed the earnout of ActualTech. We are excited about
the potential of this new business unit, which will be fully integrated across
the course of FY 2024. The encouraging start of a return to growth was driven
by strong performance in our email newsletter publishing business.
Operating profit
Cost of sales including distribution costs were up 2% year-on-year with an
adverse mix in Media and very strong revenue growth in Go.Compare, reduced by
the benefit from lower rates in Magazines cost of sales and lower revenue.
During the period the Group has refined its policy for allocating costs
between costs of sales and overheads. This is a change in presentation which
has been applied prospectively. Applying the same methodology to prior period
comparatives would increase cost of sales and reduce other administrative
expenses by £3.2m. See note 3 to the accounts for further details.
Other costs have increased by 3% reflecting a 5% pay rise awarded to
colleagues from January 2024, which increased salary and wages costs, the
accrual of the profit pool in the current period and investment in headcount
with 40 heads added since the start of the financial year to support our
Growth Acceleration Strategy.
As a result, the adjusted operating profit margin has declined by (5)ppt to
27% (HY 2023: 32%). Being able to deliver a margin of 27% despite inflationary
pressures within wages, the largest cost, and adverse revenue mix with lower
revenue in digital advertising and affiliates products is a testament to the
strength of the Group. The revenue diversification strategy and the strong
financial characteristics of the Group, even in a challenging macroeconomic
environment, have provided clear benefits. As a result, adjusted operating
profit decreased by £(24.5)m to £105.8m (HY 2023: £130.3m). Statutory
operating profit decreased by £(20.2)m to £63.7m (HY 2023: £83.9m) and
statutory operating margin decreased by (5)ppt to 16% (HY 2023: 21%) driven by
the performance in adjusted operating profit.
Earnings per share
HY 2024 HY 2023
Basic earnings per share (p) 29.2 46.9
Adjusted basic earnings per share (p) 57.5 71.7
Diluted earnings per share (p) 29.0 46.7
Adjusted diluted basic earnings per share (p) 57.2 71.2
Basic earnings per share is calculated using the weighted average number of
ordinary shares in issue during the period of 115.5m (HY 2023: 120.1m), the
decrease reflecting the share buyback programme which ended in January 2024.
The Glossary section at the end of this document provides the definition of
adjusted earnings per share and note 10 provides a reconciliation to reported
earnings per share. Adjusted profit after tax was £66.4m (HY 2023:
£86.1m).
Transaction and integration related costs
Transaction and integration related costs of £1.4m incurred in the period
reflect post-integration project costs and fees (HY 2023: £3.2m comprising
£1.2m of deal-related fees, £0.8m of restructuring costs related to
acquisitions and £2.0m onerous property costs, net of £0.8m released
following settlement of a provision for historical legal claims arising on
the Dennis opening balance sheet).
Exceptional items
Exceptional costs incurred in the period comprise £1.2m related to onerous
properties (HY 2023: £5.3m relating to restructuring costs and £0.6m to
onerous properties).
Other adjusting items
Amortisation of acquired intangibles of £33.5m (HY 2023: £30.3m) includes
£5.5m accelerated amortisation of the Look After My Bills ('LAMB') brand and
customer lists, arising with the Go.Compare acquisition. The useful economic
lives of the LAMB assets were reduced during the period, with the revised
lives ending on 30 September 2024, following the plan to cease active
management of the business during this financial year.
Share-based payment expenses (relating to equity-settled share awards with
vesting periods longer than twelve months), together with associated social
security costs decreased by £1.0m to £6.0m (HY 2023: £7.0m). The nature of
the all-employee Value Creation Plan scheme means that a charge is booked
irrespective of the likelihood of achieving the vesting targets.
Net finance costs and refinancing
Following a review of its committed facilities and expected utilisation, the
Group reduced the commitments on its Revolving Credit Facility ('RCF') from
£500.0m to £350.0m on 16 February 2024 and on its Export Development
Guarantee ('EDG') term facility from £400.0m to £300.0m on 29 February 2024.
At 31 March 2024, 50.0% (£325.0m) of the Group's facilities remained undrawn
(31 March 2023: 52.2% (£469.7m) undrawn).
Net finance costs decreased to £17.1m (HY 2023: £17.5m) which includes net
external interest payable of £13.6m reflecting the reduction in the Group's
facilities; £2.5m in respect of the amortisation of arrangement fees relating
to the Group's bank facilities; £0.2m unwinding of discount offset by
£(0.1)m increase in fair value of deferred consideration relating to the
ActualTech acquisition which was settled on 31 January 2024. A further £0.9m
of net interest was recognised in relation to lease liabilities.
The Group has entered into interest rate swap agreements which swap the
interest profile on a notional £300.0m (HY 2023: £150.0m) of the Group's EDG
term facility to mitigate the risk of fluctuations in interest rates, whereby
it receives a variable interest rate based on SONIA and pays fixed rates of
between 3.720% and 4.987%. The swaps have been valued based on the present
value of the estimated future cash flows based on observable yield curves. A
net asset of £1.9m was recognised on the balance sheet at 31 March 2024 (30
September 2023: £5.9m) with a corresponding decrease in the cash flow hedge
reserve.
Taxation
The tax charge for the six months ended 31 March 2024 is based on the
effective tax rate, estimated on a full year basis, being applied to the
statutory profit for the six months ended 31 March 2024. For FY 2024, the
Group's adjusted effective tax rate is expected to be 25.3% (HY 2023: 23.9%).
The Group's statutory effective tax rate is expected to be 27.7% (HY 2023:
15.1%) inclusive of adjustments in respect of previous years. Excluding the
adjustment in respect of previous years the statutory tax rate is expected to
be 25.6% (31 March 2023: 24.4%). The difference between the statutory rate and
the adjusted effective rate is attributable to movements in the Group's
share-based payments which are recognised in equity.
The increase in the statutory effective tax rate is due to adjustments in
respect of previous years recorded in FY 2023, which reflect revisions to
prior year estimates where new information became available as the Group
completed its actual tax returns, as well as the correction of a number of
immaterial items.
Balance sheet
Property, plant and equipment decreased by £2.0m to £32.4m in the period (FY
2023: £34.4m) primarily reflecting depreciation of £3.2m, offset by capital
expenditure of £1.3m.
Intangible assets decreased by £54.4m to £1,585.0m (FY 2023: £1,639.4m)
driven by amortisation (£38.4m) and a foreign exchange headwind of £(21.5)m.
This was partially offset by the capitalisation of website development costs
(£5.5m).
Trade and other receivables decreased by £9.2m to £114.3m (FY 2023:
£123.5m) primarily due to an improvement in cash collection during the
period, together with the impact of foreign exchange.
Trade and other payables decreased by £5.2m to £123.2m (FY 2023: £128.4m)
due to timing of payments over the period end.
Cash flow and net debt
Net debt at 31 March 2024 was £296.7m (FY 2023: £327.2m), driven by a
decrease in cash including £32.0m paid in the period for the share buyback
programme which concluded in January 2024.
During the period, there was a cash inflow from operations of £130.4m (FY
2023: £241.0m, HY 2023: £117.3m) reflecting strong cash generation. Adjusted
operating cash inflow was £132.8m (FY 2023: £265.4m, HY 2023: £136.2m). A
reconciliation of cash generated from operations to adjusted free cash flow is
included in the Glossary section at the end of this document.
Other significant movements in cash flows include a net repayment of bank
loans of £68.0m (HY 2023: £15.7m, including repayment of overdraft and net
of arrangement fees), acquisition of own shares of £32.0m (HY 2023: £7.8m),
lease payments of £5.0m (HY 2023: £3.1m) and a dividend in the period of
£3.9m (HY 2023: £4.1m). Foreign exchange and other movements accounted for
the balance of cash flows.
Adjusted free cash flow decreased marginally to £126.0m (HY 2023: £130.0m),
representing 119% of adjusted operating profit (HY 2023: 100%), reflecting the
ongoing efficient cash management by the Group.
Going concern
The Group has produced forecasts which have been modelled for different
plausible downside scenarios. These scenarios confirm that even in the most
severe but plausible downside scenarios, the Group can generate positive cash
flows.
The Group's £400.0m EDG term facility, maturing in November 2027, was reduced
to £300.0m via a prepayment in February 2024. The Group's £500.0m RCF,
maturing in July 2026, was reduced to £350.0m in February 2024 via a
cancellation of commitments. Together with the Group's strong cash generation,
this will ensure the Group has access to sufficient undrawn committed
facilities to support ongoing operations.
At the period end the Group had net current liabilities of £45.8m (FY 2023:
£7.4m). This is primarily driven by deferred income of £63.2m and the
nature of the Group's magazine business, where the profile of cash receipts
from wholesalers is typically ahead of the payment of certain magazine related
costs. The Group has consistently delivered adjusted free cash flow conversion
of around 100% and is forecast to generate sufficient cash flows to meet its
liabilities as they fall due. The increase in net current liabilities since 30
September 2023 includes the impact of £68.0m debt repayment and £32.0m in
respect of the share buyback programme, which reduced cash in the period.
The Group's principal risks remain the same as those as set out in the Group's
Consolidated Financial Statements for the year ended 30 September 2023.
After due consideration, the Directors have concluded that there is a
reasonable expectation that the Group has adequate resources to continue in
operational existence for at least twelve months from the date of this report.
For this reason, the Directors continue to adopt the going concern basis in
preparing the consolidated financial statements for the HY 2024 results.
Condensed consolidated interim financial statements
Consolidated income statement
for the six months ended 31 March 2024 (unaudited)
6 months to 31 March 2024 6 months to 31 March 2023
Note £m £m
Revenue 1,2 391.5 404.7
Net operating expenses 3 (327.8) (320.8)
Operating profit 63.7 83.9
Net finance costs 7 (17.1) (17.5)
Profit before tax 46.6 66.4
Tax charge 8 (12.9) (10.0)
Profit for the period attributable to owners of the parent 33.7 56.4
Earnings per 15p Ordinary share
Note 6 months to 6 months to
31 March 31 March
2024 2023
pence pence
Basic earnings per share 10 29.2 46.9
Diluted earnings per share 10 29.0 46.7
Consolidated statement of comprehensive income
for the six months ended 31 March 2024 (unaudited)
6 months to 31 March 2024 6 months to 31 March 2023
£m £m
Profit for the period 33.7 56.4
Items that may be reclassified to the consolidated income statement
Currency translation differences (20.8) (50.1)
(Loss)/gain on cash flow hedge (net of tax) (3.0) 1.4
Other comprehensive expense for the period (23.8) (48.7)
Total comprehensive income for the period attributable to owners of the parent 9.9 7.7
Consolidated statement of changes in equity
for the six months ended 31 March 2024 (unaudited)
Note Issued share capital Share premium Capital redemption reserve Merger reserve Treasury reserve Cash flow hedge reserve Accumulated exchange differences Retained earnings Total
£m £m £m £m £m £m £m £m £m
Balance at 01 October 2023 17.8 197.0 0.3 581.9 (15.3) 4.4 27.8 300.8 1,114.7
Profit for the period - - - - - - - 33.7 33.7
Currency translation differences - - - - - - (20.8) - (20.8)
Loss on cash flow hedge 13 - - - - - (4.0) - - (4.0)
Deferred tax on cash flow hedge - - - - - 1.0 - - 1.0
Other comprehensive expense for the period - - - - - (3.0) (20.8) - (23.8)
Total comprehensive income for the period - - - - - (3.0) (20.8) 33.7 9.9
Share capital issued during the period - - - - - - - - -
Acquisition of own shares 15 (0.5) - 0.5 - - - - (31.6) (31.6)
Merger reserve reduction 16 - - - (472.9) - - - 472.9 -
Share premium reduction 16 - (197.0) - - - - - 197.0 -
Share schemes
- Issue of treasury shares to employees - - - - 3.9 - - (3.9) -
- Value of employees' services - - - - - - - 6.0 6.0
- Deferred tax on options - - - - - - - 0.1 0.1
Dividends paid to shareholders 9 - - - - - - - (3.9) (3.9)
Balance at 31 March 2024 17.3 - 0.8 109.0 (11.4) 1.4 7.0 971.1 1,095.2
Balance at 1 October 2022 18.1 197.0 - 581.9 (8.0) - 70.7 201.0 1,060.7
Profit for the period - - - - - - - 56.4 56.4
Currency translation differences - - - - - - (50.1) - (50.1)
Gain on cash flow hedge - - - - - 1.4 - - 1.4
Other comprehensive expense for the period - - - - - 1.4 (50.1) - (48.7)
Total comprehensive - - - - - 1.4 (50.1) 56.4 7.7
income for the period
Acquisition of own shares 15 - - - - (7.8) - - - (7.8)
Share schemes
- Issue of treasury shares - - - - 3.7 - - (3.7) -
to employees
- Value of employees' services - - - - - - - 6.8 6.8
- Current tax on options - - - - - - - (0.1) (0.1)
- Deferred tax on options - - - - - - - (6.1) (6.1)
Dividends paid to shareholders 9 - - - - - - - (4.1) (4.1)
Balance at 31 March 2023 18.1 197.0 - 581.9 (12.1) 1.4 20.6 250.2 1,057.1
Consolidated balance sheet
as at 31 March 2024 (unaudited)
31 March 2024 31 March 2023 30 September 2023
Note £m £m £m
Assets
Non-current assets
Property, plant and equipment 32.4 37.5 34.4
Intangible assets - goodwill 11 1,043.0 1,047.3 1,053.6
Intangible assets - other 11 542.0 612.1 585.8
Financial asset - derivative 13 2.6 1.4 6.0
Total non-current assets 1,620.0 1,698.3 1,679.8
Current assets
Inventories 0.6 1.8 1.3
Corporation tax recoverable 9.9 15.4 0.3
Deferred tax 10.8 3.8 12.8
Trade and other receivables 114.3 112.7 123.5
Cash and cash equivalents 23.1 30.8 60.3
Finance lease receivable 2.7 3.8 3.3
Deferred consideration 0.1 - -
Total current assets 161.5 168.3 201.5
Total assets 1,781.5 1,866.6 1,881.3
Equity and liabilities
Equity
Issued share capital 15 17.3 18.1 17.8
Share premium account 16 - 197.0 197.0
Capital redemption reserve 16 0.8 - 0.3
Merger reserve 16 109.0 581.9 581.9
Treasury reserve 16 (11.4) (12.1) (15.3)
Cash flow hedge reserve 16 1.4 1.4 4.4
Accumulated exchange differences 16 7.0 20.6 27.8
Retained earnings 971.1 250.2 300.8
Total equity 1,095.2 1,057.1 1,114.7
Non-current liabilities
Financial liabilities - interest-bearing loans and borrowings 319.8 421.7 387.5
Lease liability due in more than one year 31.3 42.4 35.5
Deferred tax 108.7 122.4 115.5
Provisions 14 7.0 7.6 7.2
Deferred income 11.5 12.5 11.9
Financial liability - derivative 13 0.7 - 0.1
Total non-current liabilities 479.0 606.6 557.7
Current liabilities
Trade and other payables 12 123.2 115.7 128.4
Deferred income 63.2 61.0 58.5
Corporation tax payable 6.1 - -
Lease liability due within one year 9.0 9.7 9.3
Deferred consideration - 3.6 -
Contingent consideration - 7.0 8.2
Deferred tax 5.8 5.9 4.5
Total current liabilities 207.3 202.9 208.9
Total liabilities 686.3 809.5 766.6
Total equity and liabilities 1,781.5 1,866.6 1,881.3
Consolidated cash flow statement
for the six months ended 31 March 2024 (unaudited)
6 months to 31 March 2024 6 months to 31 March 2023
£m £m
Cash flows from operating activities
Cash generated from operations 130.4 117.3
Net interest paid on bank facilities (13.6) (9.0)
Interest paid on lease liabilities (0.9) (1.3)
Tax paid (19.2) (20.7)
Net cash generated from operating activities 96.7 86.3
Cash flows from investing activities
Purchase of property, plant and equipment (1.3) (1.1)
Purchase of computer software and website development (5.5) (5.1)
Purchase of subsidiary undertakings, net of cash acquired (7.9) (44.0)
Proceeds on disposal of magazines (0.1) -
Net cash used in investing activities (14.8) (50.2)
Cash flows from financing activities
Acquisition of own shares (32.0) (7.8)
Drawdown of bank loans 140.0 250.1
Repayment of bank loans (208.0) (256.0)
Repayment of overdraft - (4.2)
Bank arrangement fees - (5.6)
Repayment of principal element of lease liabilities (5.0) (3.1)
Dividends paid (3.9) (4.1)
Net cash used in financing activities (108.9) (30.7)
Net (decrease)/increase in cash and cash equivalents (27.0) 5.4
Cash and cash equivalents at beginning of period 60.3 29.2
Effects of exchange rate changes on cash and cash equivalents (10.2) (3.8)
Cash and cash equivalents at end of period 23.1 30.8
Notes to the consolidated cash flow statement
for the six months ended 31 March 2024 (unaudited)
A. Cash generated from operations
The reconciliation of profit for the period to cash generated from operations
is set out below:
6 months to 6 months to
31 March 31 March
2024 2023
£m £m
Profit for the period 33.7 56.4
Adjustments for:
Depreciation 3.2 4.8
Impairment charge on tangible assets 0.1 2.4
Amortisation of intangible assets 38.4 37.1
Share-based payments 6.0 6.8
Net finance costs 17.1 17.5
Tax charge 12.9 10.0
Cash generated from operations before changes in working capital and 111.4 135.0
provisions
Decrease in provisions (0.4) (12.5)
Decrease/(increase) in inventories 0.7 (0.6)
Decrease in trade and other receivables 9.4 17.2
Increase/(decrease) in trade and other payables 9.3 (21.8)
Cash generated from operations 130.4 117.3
B. Analysis of net debt
30 September Net cash flows Other non-cash changes Exchange 31 March
2023 £m £m movements 2024
£m £m £m
Cash and cash equivalents 60.3 (27.0) - (10.2) 23.1
Debt due after more than one year (387.5) 68.0 (2.5) 2.2 (319.8)
Net debt (327.2) 41.0 (2.5) (8.0) (296.7)
C. Reconciliation of movement in net debt
6 months to 31 March 2024 6 months to 31 March 2023
£m £m
Net debt at start of period (327.2) (423.6)
(Decrease)/increase in cash and cash equivalents (27.0) 5.4
Decrease in borrowings 68.0 15.7
Amortisation of loan issue costs (2.5) (2.0)
Exchange movements (8.0) 13.6
Net debt at end of period (296.7) (390.9)
Basis of preparation
The condensed consolidated interim financial statements for the six-month
period ended 31 March 2024 are unaudited but have been subject to an
independent review by the auditor. They do not constitute statutory financial
statements as defined in section 434 of the Companies Act 2006. The
comparative figures are for the six month period ended 31 March 2023.
This unaudited condensed consolidated interim financial information for the
six months ended 31 March 2024 has been prepared in accordance with
International Accounting Standard 34 Interim Financial Reporting in conformity
with the requirements of the Companies Act 2006, and in accordance with the
Disclosure Guidance and Transparency Rules of the Financial Conduct Authority.
The interim financial information contained in the Interim Report should be
read in conjunction with the Annual Report and Accounts for the year ended 30
September 2023.
Having considered the Group's funding position and latest forecasts, the
Directors believe that there is a reasonable expectation that the Group has
adequate resources to continue in operational existence for the foreseeable
future. Accordingly, the Directors continue to adopt the going concern basis
in preparing the condensed interim financial information.
As stated in the financial statements for the year ended 30 September 2023 the
following amendments to existing standards have been applied where applicable:
− IAS 1 Amendments regarding the disclosure of accounting policies;
− IAS 8 Amendments regarding the definition of accounting estimates;
− IAS 12 Amendments regarding deferred tax on leases and
decommissioning obligations;
− IAS 12 Amendments to provide a temporary exception to the
requirements regarding deferred tax assets and liabilities related to Pillar
Two corporation taxes.
There has been no material impact from the adoption of new standards,
amendments to standards or interpretations which are relevant to the Group.
The Group's principal risks and uncertainties remain the same as those as
set out in the Group's Consolidated Financial Statements for the year ended 30
September 2023. Reference should be made to pages 48 to 52 of the 2023 Annual
Report and Accounts for more detail on the potential impact of risks and
examples of mitigation.
The principal risks relevant to the Group's activities at the half year are:
Personal data; Economic & geo-political uncertainty; Reliance on key third
party service providers; Media market disruption and changing consumer habits;
Key person risk; Cyber security; Reliance on third party distribution
platforms; Digital advertising market changes; People; IT operational
resilience; and Climate change.
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.
The Glossary section at the end of this document provides definitions of and
reconciliations to non-statutory measures.
Notes to the financial information
1. Segmental reporting
Our operating segments are reported based on financial information provided to
the Executive Directors and represents the "Chief Operating Decision Maker".
The Group is organised and arranged primarily by reportable segments. 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. The Group also uses a sub-segment split of Media (websites and
events) and Magazines for further analysis. The Group considers that the
assets within each geographical segment are exposed to the same risks.
It is anticipated that with effect from 1 October 2024 the Group will form the
B2B, B2C and Go.Compare "new divisional structure". At 31 March 2024 its
components, UK and the US, continued to be managed separately and reported
separately to the Executive Directors. It is anticipated that from 1 October
2024 the necessary financial information will be available and provided to the
Executive Directors based on the new divisional structure, in order to
consider the performance of the business.
(a) Reportable segment:
(i) Segment revenue
Sub-segment 6 months to Sub-segment 6 months to
31 March 31 March
2024 2023
£m £m
Media Magazines Total Media Magazines Total
£m £m £m £m £m £m
Segment:
UK 153.2 95.2 248.4 138.8 99.1 237.9
US 108.0 35.1 143.1 126.7 40.1 166.8
Total 261.2 130.3 391.5 265.5 139.2 404.7
Transactions between segments are carried out at arm's length.
(ii) Segment adjusted EBITDA
6 months to 6 months to
31 March 31 March
2024 2023
£m £m
Adjusted EBITDA prior to Intra-group Adjusted Adjusted EBITDA prior to Intra-group Adjusted
intra-group adjustments EBITDA intra-group adjustments EBITDA
adjustments £m £m adjustments £m £m
£m £m
UK 51.0 32.3 83.3 52.7 42.5 95.2
US 62.9 (32.3) 30.6 89.2 (42.5) 46.7
Total 113.9 - 113.9 141.9 - 141.9
(iii) Segment adjusted operating profit
6 months to 6 months to
31 March 31 March
2024 2023
£m £m
Adjusted operating Intra-group Adjusted Adjusted operating Intra-group Adjusted
profit prior to adjustments operating profit profit prior to adjustments operating profit
intra-group £m £m intra-group £m £m
adjustments adjustments
£m £m
UK 44.4 32.3 76.7 43.7 42.5 86.2
US 61.4 (32.3) 29.1 86.6 (42.5) 44.1
Total 105.8 - 105.8 130.3 - 130.3
A reconciliation of total segment adjusted EBITDA and adjusted operating
profit to profit before tax is provided in the Glossary section at the end of
this document.
2. Revenue
The table below disaggregates revenue according to the timing of satisfaction
of performance obligations:
6 months to 31 March 2024 6 months to 31 March 2023
£m £m
Over Point in Total Over Point in Total
time time revenue time time revenue
£m £m £m £m £m £m
Total revenue 7.2 384.3 391.5 8.0 396.7 404.7
See note 1 for disaggregation of revenue by geography.
3. Net operating expenses
Operating profit is stated after charging:
6 months to 6 months to
31 March 31 March
2024 2023
£m £m
Cost of sales (215.9) (209.3)
Distribution expenses (19.1) (21.2)
Share-based payments (including social security costs) (6.0) (7.0)
Transaction and integration related costs (note 4) (1.4) (3.2)
Exceptional items (note 5) (1.2) (5.9)
Depreciation (3.2) (4.8)
Amortisation (38.4) (37.1)
Impairment charge on tangible assets (0.1) (2.4)
Other administration expenses (42.5) (29.9)
(327.8) (320.8)
During the period to 31 March 2024 the Group has refined its policy for
allocating costs between costs of sales and overheads. This change in
presentation has been applied prospectively. Applying the same methodology to
prior period comparatives would increase cost of sales and reduce other
administrative expenses by £3.2m.
4. Transaction and integration related costs
6 months to 6 months to
31 March 31 March
2024 2023
£m £m
Transaction and integration related costs 1.4 1.2
Onerous property costs - 2.0
Total charge 1.4 3.2
Transaction and integration related costs of £1.4m incurred in the period
reflect post-integration project costs and fees (31 March 2023: £1.2m of
deal-related fees, £0.8m of restructuring costs related to acquisitions and
£2.0m onerous property costs relating to acquired properties, net of £0.8m
released following settlement of a provision for historic legal claims
recognised on the Dennis opening balance sheet).
5. Exceptional items
6 months to 6 months to
31 March 31 March
2024 2023
£m £m
Onerous property costs 1.2 0.6
Restructuring costs - 5.3
Total charge 1.2 5.9
Exceptional costs incurred in the period comprise £1.2m relating to onerous
properties (31 March 2023: £5.3m relating to restructuring costs and £0.6m
relating to onerous properties).
6. Employee costs
6 months to 6 months to
31 March 31 March
2024 2023
£m £m
Wages and salaries 90.8 84.5
Social security costs 8.4 8.1
Other pension costs 2.7 2.7
Share schemes:
Value of employees' services 6.0 6.8
Employer's social security costs on share options 0.5 -
Total employee costs 108.4 102.1
Wages and salaries in the table above include the all-employee profit pool
bonus in the current period.
IFRS 2 Share-based Payment requires an expense for equity instruments granted
to be recognised over the appropriate vesting period, measured at their fair
value at the date of grant.
The fair value has been calculated using Black-Scholes and Monte Carlo models,
using the most appropriate model for each scheme. Assumptions have been made
in these models for expected volatility, risk-free rates and dividend yields.
Key management personnel compensation
6 months to 6 months to
31 March 31 March
2024 2023
£m £m
Salaries and other short-term employee benefits 1.0 1.0
Share schemes
Value of employees' services 1.0 1.5
Total employee costs 2.0 2.5
Key management personnel are deemed to be the members of the Board of Future
plc.
7. Finance income and costs
6 months to 6 months to
31 March 31 March
2024 2023
£m £m
Interest payable on interest-bearing loans and borrowings (14.6) (13.9)
Amortisation of bank loan arrangement fees (2.5) (2.0)
Interest payable on lease liabilities (1.0) (1.4)
Unwinding of discount on deferred consideration (0.2) -
Unwinding of discount on contingent consideration - (0.3)
Total finance costs (18.3) (17.6)
Interest receivable on interest-bearing loans and borrowings 1.0 -
Interest receivable on lease liabilities 0.1 0.1
Increase in fair value of deferred consideration 0.1 -
Total finance income 1.2 0.1
Net finance costs (17.1) (17.5)
Following a review of its committed facilities and expected utilisation the
Group reduced the commitments on its Revolving Credit Facility ('RCF') from
£500.0m to £350.0m on 16 February 2024 and on its Export Development
Guarantee ('EDG') term facility from £400.0m to £300.0m on 29 February 2024.
At 31 March 2024, 50.0% (£325.0m) of the Group's facilities remained undrawn
(31 March 2023: 52.2% (£469.7m) undrawn).
8. Tax on profit
The tax charge for the six months ended 31 March 2024 is based on the
effective tax rate, estimated on a full year basis, being applied to the
statutory profit for the six months ended 31 March 2024. The Group's adjusted
effective tax rate is expected to be 25.3% (31 March 2023: 23.9%).
The Group's statutory effective tax rate is expected to be 27.7% (31 March
2023: 15.1%) inclusive of adjustments in respect of previous years.
Excluding the adjustment in respect of previous years the statutory tax rate
is expected to be 25.6% (31 March 2023: 24.4%). The difference between the
statutory rate and the adjusted effective rate is attributable to movements in
the Group's share-based payments which are recognised in equity.
The increase in the statutory effective tax rate is due to adjustments in
respect of previous years recorded in the year to 30 September 2023, which
reflect revisions to prior year estimates where new information became
available as the Group completed its actual tax returns, as well as the
correction of a number of immaterial items.
The corporation tax recoverable disclosed at 30 September 2023 of £0.3m was
presented on a net basis, primarily comprising a £10.3m receivable in the US
and a £9.7m payable in the UK. At 31 March 2024 this was presented on a gross
basis with the Group concluding the prior year presentation is not material
for representation purposes.
9. Dividends
Equity dividends 6 months to 6 months to
31 March 31 March
2024 2023
Number of shares in issue at end of period (million) 115.2 120.9
Dividends paid in year (pence per share) 3.4 3.4
Dividends paid in period (£m) (3.9) (4.1)
Interim dividends are recognised in the period in which they are paid and
final dividends are recognised in the period in which they are approved. The
dividend in respect of the year ended 30 September 2023 was paid on 13
February 2024. The Board did not propose a dividend for the six months ended
31 March 2024 (31 March 2023: no dividend).
10. 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 removes the effect of share based payments,
transaction and integration related costs (note 4), exceptional items (note
5), amortisation of intangible assets arising on business combinations,
decrease in fair value of deferred consideration, unwinding of discount on
contingent and deferred consideration, and any related tax effects from the
calculation.
6 months to 6 months to
31 March 31 March
2024 2023
Adjustments to profit after tax:
Profit after tax (£m) 33.7 56.4
Share-based payments (including social security costs) (£m) 6.0 7.0
Transaction and integration related costs (£m) 1.4 3.2
Exceptional items (£m) 1.2 5.9
Amortisation of intangible assets arising on acquisitions (£m) 33.5 30.3
Decrease in fair value of deferred consideration (£m) (0.1) -
Unwinding of discount on contingent consideration (£m) - 0.3
Unwinding of discount on deferred consideration (£m) 0.2 -
Tax effect of the above adjustments and the impact of tax items relating to (9.5) (17.0)
prior years (£m)
Adjusted profit after tax (£m) 66.4 86.1
Weighted average number of shares in issue during the period:
- Basic 115,471,229 120,146,502
- Dilutive effect of share options 661,660 714,468
- Diluted 116,132,889 120,860,970
Basic earnings per share (pence) 29.2 46.9
Adjusted basic earnings per share (pence) 57.5 71.7
Diluted earnings per share (pence) 29.0 46.7
Adjusted diluted earnings per share (pence) 57.2 71.2
The adjustments to profit after tax have the following effect:
Basic earnings per share (pence) 29.2 46.9
Share-based payments (including social security costs) (pence) 5.2 5.8
Transaction and integration related costs (pence) 1.2 2.7
Exceptional items (pence) 1.0 4.9
Amortisation of intangible assets arising on acquisitions (pence) 29.0 25.2
Increase in fair value of deferred consideration (pence) (0.1) -
Unwinding of discount on contingent consideration (pence) - 0.2
Unwinding of discount on deferred consideration (pence) 0.2 -
Tax effect of the above adjustments and the impact of tax items relating to (8.2) (14.0)
prior years (pence)
Adjusted basic earnings per share (pence) 57.5 71.7
Diluted earnings per share (pence) 29.0 46.7
Share-based payments (including social security costs) (pence) 5.2 5.8
Transaction and integration related costs (pence) 1.2 2.6
Exceptional items (pence) 1.0 4.9
Amortisation of intangible assets arising on acquisitions (pence) 28.8 25.1
Increase in fair value of deferred consideration (pence) (0.1) -
Unwinding of discount on contingent consideration (pence) - 0.2
Unwinding of discount on deferred consideration (pence) 0.2 -
Tax effect of the above adjustments and the impact of tax items relating to (8.1) (14.1)
prior years (pence)
Adjusted diluted earnings per share (pence) 57.2 71.2
11. Intangible assets
Goodwill Publishing rights Brands Customer relationships Subscribers Advertiser relationships Other acquired intangibles Other Total
£m £m £m £m £m £m £m £m £m
Cost
At 1 October 2022 1,340.2 90.9 501.6 57.8 86.4 22.9 43.5 59.2 2,202.5
Additions through business combinations 29.2 - 10.5 7.4 - - 2.0 - 49.1
Other additions - - - - - - - 9.3 9.3
Exchange adjustments (49.1) (0.3) (14.9) (1.7) (4.8) (1.8) (1.5) (1.3) (75.4)
At 30 September 2023 1,320.3 90.6 497.2 63.5 81.6 21.1 44.0 67.2 2,185.5
Additions - - - - - - - 5.5 5.5
Exchange adjustments (12.1) (0.1) (10.0) (0.6) (1.7) (0.6) (0.4) (0.6) (26.1)
At 31 March 2024 1,308.2 90.5 487.2 62.9 79.9 20.5 43.6 72.1 2,164.9
Accumulated amortisation and impairment
At 01 October 2022 (270.6) (29.9) (63.1) (22.7) (17.1) (3.0) (33.1) (47.2) (486.7)
Charge for the year - (6.4) (28.7) (8.6) (9.7) (1.7) (4.3) (11.6) (71.0)
Exchange adjustments 3.9 0.2 3.0 0.7 1.2 0.2 1.2 1.2 11.6
At 30 September 2023 (266.7) (36.1) (88.8) (30.6) (25.6) (4.5) (36.2) (57.6) (546.1)
Charge for the period - (3.0) (13.8) (4.3) (4.8) (1.2) (6.4) (4.9) (38.4)
Exchange adjustments 1.5 0.1 1.3 0.3 0.5 0.1 0.4 0.4 4.6
At 31 March 2024 (265.2) (39.0) (101.3) (34.6) (29.9) (5.6) (42.2) (62.1) (579.9)
Net book value at 31 March 2024 1,043.0 51.5 385.9 28.3 50.0 14.9 1.4 10.0 1,585.0
Net book value at 30 September 2023 1,053.6 54.5 408.4 32.9 56.0 16.6 7.8 9.6 1,639.4
Useful economic lives - 5-15 3-20 years 4-10 7-11 9-15 3-10 2 -
years years years years years years
The other acquired intangibles category in the table above includes assets
relating to customer lists, content and websites.
Any residual amount arising as a result of the purchase consideration being in
excess of the value of acquired assets is recorded as goodwill.
Other intangible assets relate to capitalised software costs and website
development costs which are internally generated. Amortisation is included
within administration expenses in the consolidated income statement.
12. Trade and other payables
31 March 30 September
2024 2023
£m £m
Trade payables 24.5 26.0
Other taxation and social security 7.5 8.7
Other payables 16.5 18.5
Accruals 74.7 75.2
Total 123.2 128.4
Trade payables and accruals principally comprise amounts outstanding for trade
purchases and ongoing costs. The Group has financial risk management policies
in place to ensure all payables are paid within the agreed credit terms.
The Directors consider that the carrying amount of trade payables approximates
to their fair value.
13. Financial instruments
The following table presents the Group's financial assets and liabilities that
are measured at fair value at 31 March 2024:
31 March 2024 30 September 2023
Financial asset Level 2 Level 2 Level 3
Fair value Fair value Fair value
£m £m £m
Assets
Financial asset - derivative 2.6 6.0 -
Liabilities
Financial liability - derivative (0.7) (0.1) -
Contingent consideration - - (8.2)
Total 1.9 5.9 (8.2)
The Group has entered into interest rate swap agreements which swap the
interest profile on a notional £300.0m (31 March 2023: £150.0m) of the
Group's EDG term facility to mitigate the risk of fluctuations in interest
rates, whereby it receives a variable interest rate based on SONIA and pays
fixed rates of between 3.720% and 4.987%. The swaps have been valued based on
the present value of the estimated future cash flows based on observable yield
curves. A net asset of £1.9m has been recognised on the balance sheet at 31
March 2024 (30 September 2023: £5.9m) with a corresponding decrease of £4.0m
in the cash flow hedge reserve (see note 16 for further details).
At 30 September 2023 contingent consideration of £8.2m ($10.0m) related to
the acquisition of ActualTech, LLC, which was paid in full on 31 January 2024
(being £7.9m after the impact of foreign exchange on settlement).
14. Provisions
31 March 30 September
2024 2023
£m £m
Property 5.4 6.7
Other 1.6 0.5
Total 7.0 7.2
The property provision relates to dilapidations and obligations under short
leasehold agreements on vacant property. The majority of the vacant property
provision is expected to be utilised over the next two years.
Other provisions of £1.6m (30 September 2023: £0.5m) primarily comprise a
legal matter related to corporate transactions.
15. Issued share capital
During the period no shares were issued by the Company pursuant to share
scheme exercises throughout the period (31 March 2023: nil). 3,144 (31 March
2023: 2,095) Ordinary shares were issued under the Share Incentive Plan for a
combined total cash commitment of £nil.
During the period the Group completed its share buyback programme, resulting
in a reduction in share capital of 3.9m shares in the period, at a nominal
value of £0.5m and a total cost of £31.6m.
As at 31 March 2024 there were 115,203,420 Ordinary shares in issue with a
nominal value of £17.3m (31 March 2023: 120,858,025 with a nominal value of
£18.1m; 30 September 2023: 119,077,135 with a nominal value of £17.8m).
16. Reserves
Share premium account
Share premium represents the excess of proceeds received over the nominal
value of new shares issued.
In order to create additional distributable reserves to provide flexibility
for shareholder returns, during the six months to 31 March 2024 the total
share premium reserve of Future plc of £197.0m was cancelled and credited to
the reserves of Future plc, increasing distributable reserves by the same
amount. The balance at 31 March 2024 is £nil.
See 'Merger reserve' section below for further detail.
Capital redemption reserve
The capital redemption reserve increased by £0.5m during the period to
£0.8m, being the nominal value of shares purchased and cancelled as part of
the share buyback programme (see note 15 for further details).
Merger reserve
In order to create additional distributable reserves to provide flexibility
for
shareholder returns, during the six months to 31 March 2024 the total value of
the Future plc merger reserve of £472.9m was capitalised, with B ordinary
shares issued at a total nominal value equal to £472.9m, then cancelled and
extinguished, with £472.9m credited to retained earnings, increasing
distributable reserves by the same amount.
An amount of £109.0m in the merger reserve arose in previous years following
the 1999 Group reorganisation and is non-distributable.
Treasury reserve
The treasury reserve represents the cost of shares in Future plc purchased in
the market and held by the Employee Benefit Trust ('EBT') to satisfy awards
made by the trustees.
During the six months to 31 March 2024, 246,138 (31 March 2023: 233,587) of
the shares held by the EBT were used to satisfy the vesting of share options
and no shares were purchased to fund the future vesting of share options (31
March 2023: 625,000 shares were purchased to fund the future vesting of share
options at a total value of £7.8m (31 March 2023: £nil).
Cash flow hedge reserve
During FY 2023 the Group entered into interest rate swaps, in order to hedge
against fluctuations in interest rates. The cash flow hedge reserve represents
the cumulative amount of gains and losses on the interest rate swap deemed
effective.
Accumulated exchange differences
The reserve for accumulated exchange differences comprises the revaluation of
the Group's foreign currency entities, principally the US and Australia, on
consolidation.
17. Contingent liabilities
There were no material contingent assets or liabilities as at 31 March 2024
(31 March 2023: £nil).
18. Post balance sheet event
On 15 May 2024 the Board approved a share buyback of up to £45.0m, which is
expected to commence shortly after this results announcement.
Statement of Directors' responsibilities
We confirm that to the best of our knowledge:
• the condensed set of financial statements has been prepared in accordance
with IAS 34 Interim Financial Reporting in conformity with the requirements of
the Companies Act 2006;
• the interim management report includes a fair review of the information
required by:
a) DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, being an
indication of important events that have occurred during the first six months
of the financial year and their impact on the condensed set of financial
statements; and a description of the principal risks and uncertainties for the
remaining six months of the year; and
b) DTR 4.2.8R of the Disclosure Guidance and Transparency Rules, being related
party transactions that have taken place in the first six months of the
current financial year and that have materially affected the financial
position or performance of the entity during that period; and any changes in
the related party transactions described in the last annual report that could
do so.
A list of current Directors is maintained on the Future plc website,
www.futureplc.com
By order of the Board
Directors
Richard Huntingford
Independent Non-Executive Chairman
Jon Steinberg
Chief Executive Officer
Penny Ladkin-Brand
Chief Financial and Strategy Officer
Alan Newman
Independent Non-Executive
Rob Hattrell
Independent Non-Executive
Meredith Amdur
Independent Non-Executive
Mark Brooker
Independent Non-Executive
Angela Seymour-Jackson
Independent Non-Executive
Ivana Kirkbride
Independent Non-Executive
15 May 2024
The maintenance and integrity of the Future plc website is the responsibility
of the Directors; the work carried out by the auditors does not involve
consideration of these matters and, accordingly, the auditors accept no
responsibility for any changes that may have occurred to the financial
statements since they were initially presented on the website.
Legislation in the United Kingdom governing the preparation and dissemination
of financial statements may differ from legislation in other jurisdictions.
GLOSSARY
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:
Adjusting item Explanation
Share-based payments Share-based payment expenses (relating to equity-settled share awards with
vesting periods longer than 12 months), together with 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.
Transaction and integration related costs Although transactions are a key part of the Group's strategy, the Group
adjusts for costs relating to the completion and subsequent integration of
acquisitions and other corporate transactions, initiated within 12 months of
the completion date, as these costs are not related to the core trading of the
Group and not doing so would distort the Group's results, so as to assist the
user of the financial statements to understand the results of the core
underlying operations of the Group. Details of transaction and integration
related costs are shown in note 4.
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/or is not related to the core trading of the Group so as to
assist the user of the financial statements to understand the results of the
core underlying operations of the Group. Details of exceptional items are
shown in note 5.
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 to be reflective of the core trading performance of the
Group. This is consistent with industry peers and how certain external
stakeholders monitor the performance of the business.
Amortisation of non acquired intangible assets, depreciation and interest Adjusted EBITDA excludes the amortisation charge for computer software and
website development, as well as amortisation of acquired intangible assets,
depreciation and interest.
Unwinding of discount on deferred and contingent consideration The Group excludes the unwinding of the discount on deferred and contingent
consideration from the Group's adjusted results on the basis that it is
non-cash and the balance is driven by the Group's assessment of the relevant
discount rate to apply. Excluding this item ensures comparability with prior
periods.
Changes in the fair value of deferred and contingent consideration The Group excludes the remeasurement of these acquisition-related liabilities
from its adjusted results as the impact of remeasurement can vary
significantly.
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.
Reference to 'core or underlying' reflects the trading results of the Group
without the impact of amortisation of acquired intangible assets, transaction
and integration related costs, exceptional items, share-based payment expenses
(relating to equity-settled share awards with vesting periods longer than 12
months), together with associated social security costs and any tax related
effects, and unwinding of discount on deferred and contingent consideration,
that would otherwise distort the users understanding of the Group's
performance.
A summary table of all measures is included below:
Closest equivalent statutory measure Definition
APM (Adjusted Performance Measure)
Adjusted EBITDA Operating profit Adjusted EBITDA represents operating profit before share-based payments
(relating to equity-settled awards with vesting periods longer than 12 months)
and related social security costs, amortisation, depreciation, transaction and
integration related costs and exceptional items.
Adjusted EBITDA margin is adjusted EBITDA as a percentage of revenue.
Adjusting items are shown in the table below.
Adjusted operating profit Operating profit Adjusted operating profit represents operating profit before share-based
payments (relating to equity-settled awards with vesting periods longer than
12 months) and related social security costs, amortisation of acquired
intangible assets, transaction and integration related costs and exceptional
items.
This is a key management incentive metric, used within the Group's Deferred
Annual Bonus Plan.
Adjusted operating profit margin is adjusted operating profit as a
percentage of revenue.
Adjusting items are shown in the table below.
Adjusted profit before tax Profit before tax Adjusted profit before tax represents earnings before share-based payments
(relating to equity-settled awards with vesting periods longer than 12 months)
and related social security costs, interest, tax, amortisation of acquired
intangible assets, transaction and integration related costs, exceptional
items, unwinding of discount on deferred and contingent consideration, and any
related tax effects.
Adjusting items are shown in the table below.
Adjusted diluted earnings per share Diluted earnings per share Adjusted diluted earnings per share (EPS) represents adjusted profit after tax
divided by the weighted average dilutive number of shares at the year end
date.
This is a key management incentive metric, used within the Group's Performance
Share Plan.
A reconciliation is provided in note 10.
Adjusted effective tax rate Effective tax rate Adjusted effective tax rate is defined as the effective tax rate adjusted for
the tax impact of adjusting items and any other one-off impacts, including
adjustments in respect of previous years.
Adjusted operating cash flow Operating cash flow Adjusted operating cash flow represents cash generated from operations
adjusted to exclude cash flows relating to transaction and integration costs,
exceptional items and for payment of employer's taxes on share-based payments
relating to equity settled share awards with vesting periods longer than 12
months, and to include lease repayments following the adoption of IFRS 16
Leases.
Adjusted free cash flow Free cash flow Adjusted free cash flow is defined as adjusted operating cash flow less
capital expenditure. Capital expenditure is defined as cash flows relating to
the purchase of property, plant and equipment and purchase of computer
software and website development.
Net debt The aggregation of cash and debt Net debt is defined as the aggregate of the Group's cash and cash equivalents
and its external bank borrowings net of capitalised bank arrangement fees. It
does not include lease liabilities recognised following the adoption of IFRS
16 Leases.
Leverage Leverage is defined as Net debt as defined above (excluding capitalised bank
arrangement fees and lease liabilities, and including any non-cash
ancillaries), as a proportion of Adjusted EBITDA and including the 12 month
trailing impact of acquired businesses (in line with the Group's bank
covenants definition).
Organic growth Organic growth is defined as the like for like portfolio in the period,
including the impact of closures and new launches but excluding acquisitions
and disposals which have not been acquired for a full financial year, and at
constant foreign exchange rates. Constant foreign exchange rates is defined as
the average rate for HY 2024.
Constant currency Constant currency translates the financial statements at fixed exchange rates
to eliminate the effect of foreign exchange on the financial performance.
Constant foreign exchange rates is defined as the average rate for HY 2024.
Impact of acquisitions and disposals The impact of acquisitions and disposals is defined as those which have not
been acquired for a full financial year, and at constant foreign exchange
rates. Constant foreign exchange rates is defined as the average rate for HY
2024.
Impact of foreign exchange Impact of foreign exchange is defined as the increase/decrease in results due
to the movement in the average foreign exchange rate compared to the
comparative period.
A reconciliation of adjusted EBITDA and adjusted operating profit to profit
before tax is shown below:
6 months to 6 months to
31 March 31 March
2024 2023
£m £m
Adjusted EBITDA 113.9 141.9
Depreciation (3.2) (4.8)
Amortisation of non-acquired intangible assets (4.9) (6.8)
Adjusted operating profit 105.8 130.3
Share-based payments (including social security costs) (6.0) (7.0)
Transaction and integration related costs (note 4) (1.4) (3.2)
Exceptional items (note 5) (1.2) (5.9)
Amortisation of acquired intangibles (33.5) (30.3)
Operating profit 63.7 83.9
Net finance costs (17.1) (17.5)
Profit before tax 46.6 66.4
A reconciliation of cash generated from operations to adjusted free cash flow
is shown below:
6 months to 6 months to 31 March 2023
31 March
2024
£m £m
Cash generated from operations 130.4 117.3
Cash flows related to transaction and integration related costs 4.0 12.7
Cash flows related to exceptional items 3.1 8.9
Settlement of social security costs on share based payments¹ 0.3 0.4
Lease payments (5.0) (3.1)
Adjusted operating cash inflow 132.8 136.2
Cash flows related to capital expenditure (6.8) (6.2)
Adjusted free cash flow 126.0 130.0
¹ Relating to equity-settled share awards with vesting periods longer than 12
months.
A reconciliation between adjusted and statutory earnings per share measures is
shown in note 10.
Included below is a reconciliation between statutory revenue and organic
revenue:
6 months to 31 March 2024 6 months to YoY Var
31 March 2023
£m £m
Statutory revenue 391.5 404.7 (3)%
Revenue from HY 2024 and HY 2023 transactions which have not been acquired for (7.0) (2.4)
a full financial year
Impact of FX at constant rates (0.2) (9.5)
Organic revenue 384.3 392.8 (2)%
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