REG - Future PLC - 2023 Interim Year Results
18/05/2023 07:00
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RNS Number : 8020Z Future PLC 18 May 2023
18 May 2023
FUTURE plc
2023 INTERIM YEAR RESULTS
Diversification strategy delivers solid 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
2023.
Highlights
Financial results for the half-year ended 31 March 2023
Adjusted results(1) HY 2023 HY 2022 Var
Adjusted operating profit (£m) 130.3 134.5 (3)%
Adjusted operating profit margin (%) 32% 33% (1)ppt
Adjusted diluted EPS (p) 71.2 81.3 (12)%
Adjusted free cash flow(3) 130.0 137.8 (6)%
Statutory results HY 2023 HY 2022 Var
Revenue (£m) 404.7 404.3 -
Operating profit (£m) 83.9 88.4 (5)%
Profit before tax (£m) 66.4 81.0 (18)%
Cash generated from operations (£m) 117.3 138.1 (15)%
Diluted EPS (p) 46.7 51.7 (10)%
Financial highlights
· Performance in the half was in line with management expectations
with revenue flat year-on-year to £404.7m (HY 2022: £404.3m) with the
contribution from acquisitions and favourable foreign exchange offsetting the
expected organic(2) decline. Organic(2) revenue was down (10)% reflecting the
challenging macroeconomic backdrop, including audience decline in our markets,
but with progress on the execution of the strategy, notably in Fashion &
Beauty, Homes, and eCommerce Affiliates services, driving improved
monetisation.
● Despite the adverse revenue mix and cost inflation, the Group's
cost agility and platform effect protected profitability with adjusted(1)
operating profit margin of 32%, down (1)ppt year-on-year (HY 2022: 33%).
Inflationary pressures in HY 2023 were equivalent (1)ppt or £(8)m and adverse
mix, equivalent (1)ppt of adjusted operating profit margin, with statutory
operating profit margin at 21% down (1)ppt (HY 2022: 22%).
● Adjusted(1) operating profit declined only (3)% to £130.3m (HY
2022: £134.5m) with the top line organic(2) decline partly mitigated by cost
saving initiatives and on track to deliver further benefits in the second
half. Statutory operating profit was down (5)% to £83.9m (HY 2022: £88.4m).
● The Group remains highly cash generative with adjusted free cash
flow(3) of £130.0m (HY 2022: £137.8m), representing 100% of adjusted(1)
operating profit (HY 2022: 102%). Cash generated from operations was £117.3m
(HY 2022: £138.1m).
● Leverage(4) reduced to 1.41x (FY 2022: 1.48x) after three
additional acquisitions. This reflects continued rapid de-levering, resulting
in net debt at the end of the half-year of £390.9m (FY 2022: £423.6m). Total
debt facilities at the end of March 2023 were £900m.
Operational and strategic highlights
● Leadership positions progress
○ Our leadership positions enable premium monetisation through
improved revenue per user and resilience
○ The Group maintained or improved leadership positions(5) within
key verticals
■ Maintained - Consumer technology #1 in the US and UK
■ Entered - Fashion & Beauty #7 in the US, #4 in the UK
■ Progress - Homes #4 in the US, #1 in the UK
● Diversifying and growing monetisation
○ Diversification of audiences with almost half of our audience
coming from outside online users
○ Diversification of revenue with:
■ Rollout of proprietary voucher code technology on content
websites
■ Launch of new strategic initiative of eCommerce affiliate
services on Wealth content
These new initiatives will further diversify our revenue streams in affiliates
and underpin future growth
○ Continued premiumisation of the fashion and beauty audience with
2% organic(2) media revenue growth in Women's lifestyle vertical and strong
performance of recently acquired Who What Wear brand
○ More direct and high-value campaigns driving yield resilience in
advertising and demonstrating the value of our audiences
● Maximising value through efficient capital allocation
○ Accelerating the execution of our strategy with value creating
acquisitions is a key part of our capital allocation
○ Three acquisitions completed since October 2022, adding
capability in B2C and B2B at attractive multiples
Outlook
● The flexibility and diversification of our business model continues
to allow us to navigate the tougher macroeconomic backdrop.
● As we look to the second half, we expect the first half trends to
continue; with challenging market conditions, impacting audience.
● Additionally, we are investing to support US growth opportunities.
● As a result, we expect full year performance to be towards the
bottom end of current market expectations.
● Longer-term, we are confident that our diversified strategy will
continue to deliver significant value for shareholders, with our investment in
new content verticals and capabilities underpinning our growth ambitions.
Jon Steinberg, Future's Chief Executive, said:
"I am excited to have joined Future and by the significant opportunity to
build on the unique position it has in the digital media landscape.
"In my first six weeks I have been extremely impressed with the depth of
talent and energy throughout the organisation and, looking ahead, my
priorities will be to further enhance our brand leadership positions, continue
to diversify and grow our monetisation opportunities, and maximise value for
all our stakeholders.
"The macroeconomic environment remains tough, but we are well positioned to
continue to outperform the industry. Our investment in new strategic
verticals, coupled with the Group's tech stack and operating model, will
create long-term value for our stakeholders."
Presentation
A live webcast of the analyst presentation will be available at 09.00 am (UK
time) today at
https://stream.brrmedia.co.uk/broadcast/6436d35e30f1081a33efe79a
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) Adjusted results are adjusted to exclude share-based payments (relating to
equity settled share awards with vesting periods longer than 12 months) and
associated social security costs, acquisition and integration related costs,
exceptional items, amortisation of intangible assets arising on acquisitions,
unwinding of discount on contingent consideration, and any related tax
effects. A reconciliation between adjusted and statutory profit is shown in
note 1.
2) Organic growth is defined as the like for like portfolio in the period,
including the impact of closures and new launches but excluding HY 2022
acquisitions which have not been acquired for a full financial year and HY
2023 acquisitions, and at constant FX rates. Constant FX rates is defined as
the average rate for HY 2023.
3) 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. Adjusted operating cash flow represents cash
generated from operations adjusted to exclude cash flows relating to
acquisition and integration related costs, exceptional items and payment of
accrual for 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 adoption of IFRS 16 Leases. Adjusted free
cash flow conversion reflects adjusted free cash flow as a percentage of
adjusted operating profit.
4) Leverage is defined as Net debt as defined below (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). Adjusted EBITDA is defined as earnings less interest,
tax, depreciation and amortisation and also adjusted for the items referenced
above where applicable.
5) Comscore Media Metrix Demographic Profile, March 2023 - Desktop Age 2+
and Total Mobile 18+ US and UK
6) Online users defined as monthly online users from Google Analytics and,
unless otherwise stated, is the monthly average over the financial period 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.
7) Proforma numbers compare at constant exchange rates the performance of
acquisitions on a like-for-like (as defined above in organic growth
definition) basis.
8) Reference to 'core or underlying' reflects the trading results of the Group
without the impact of amortisation of acquired intangible assets, acquisition
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, unwinding of discount
on contingent consideration, and any tax related effects that would otherwise
distort the users understanding of the Group's performance. The Directors
believe that adjusted results provide additional useful information on the
core operational performance of the Group, and review the results of the Group
on an adjusted basis internally.
9) 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.
10) Apple News users are users as accounted by Apple on iCloud for March
2023.
Enquiries:
Future plc
Jon Steinberg, Chief Executive Officer +44 (0)122 544 2244
Penny Ladkin-Brand, Chief Financial and Strategy Officer
Marion Le Bot, Head of Investor Relations +44 (0)777 564 1509
Media
Headland +44 (0)203 805 4822
Stephen Malthouse, Rob Walker, Charlie Twigg
future@headlandconsultancy.com
About Future
Future is a digital-first global platform for intent-led specialist media.
Underpinned by leading technology and enabled by data, we operate c.250 brands
in diversified content verticals, across our B2C and B2B divisions with
multiple market leading positions and three core monetisation frameworks:
advertising, eCommerce affiliate and direct consumer monetisation. We organise
our brands by specialist interest and have four main content verticals with 16
subcategories ranging from Consumer Technology and Home to Wealth and Women's
Lifestyle. 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: organic
growth, the platform effect and value-creating M&A.
Strategic and operational update
Future is a digital-first global platform for intent-led specialist media
underpinned by technology, enabled by data with diversified revenue streams.
The business model has a strong track record of driving consistent,
high-quality profit growth which translates into strong operating margin and
cash. Future's strategy is to grow relevant and valuable audiences to maintain
or gain leadership positions in each of the markets it operates in, whilst
diversifying and growing the monetisation of these audiences.
By obtaining leadership positions, we become a must-have partner, enabling
strong advertising yields and affiliate commissions with resilience through
economic cycles. This resilience is reinforced by the diversified nature of
the Group, both from content verticals, geographical locations and different
revenue streams.
We are focused on profitable organic growth to drive long-term value through
operating leverage and excellent cash conversion. The strategy is accelerated
with acquisitions. Acquisitions are integrated in full, deploying our
operating model including our global approach to our content, our technology
platform and our audience reach, driving further the Platform Effect.
We have a relentless focus on the sustainable execution of our strategy. This
focus translates into a repeatable, efficient value creation model as
highlighted by our exceptional track record.
Grow relevant and valuable audiences
Our first strategic objective is to meet the needs of our audience. We are a
trusted expert, helping our audiences do the things they love, from which
graphic cards to use to understanding taxes for the self-employed. Our goal is
to be the leader in the markets in which we operate as this provides the
ability to drive greater revenue from the audience at higher yields and
resilience.
As anticipated, the wider market slowdown in audience numbers outlined in our
last trading update has continued. Despite this, we have maintained or
improved leadership positions within key verticals.
In the US, we have maintained our leadership position in Technology, our most
impacted vertical, where, as expected, we are seeing users decline
year-on-year driven by market dynamics with limited new products being
launched and brought forward purchases during the pandemic combined with
challenges in TechRadar including the impact of the Google algorithm change.
In Fashion & Beauty, we are now #7, this performance is underpinned by
strong growth in Marie Claire and the inclusion of Who What Wear. In Homes, we
are now #4 with the inclusion of Gardening Know How and very strong
performance in the legacy portfolio. In Wealth, Kiplinger is performing well
with a focus on expert content to build out the foundations for growth.
In the UK, we have also maintained our leadership position in Technology
although we have experienced users decline, along with the wider market. We
are now #4 in Fashion & Beauty. We remain #1 in Homes with continued
growth and our biggest site, Homes & Gardens, has grown by over 30% on
Comscore.
We continue to progress on our audience diversification journey with a focus
on increasing reach in diversified channels as well as verticals. However,
online users in the period were challenged with users down (19)% on a reported
basis and (23)% on an organic basis. The large majority of this change is in
our GETs vertical, impacted by the previously mentioned pressures in the
consumer technology markets. This has been coupled with the impact of a Google
algorithm change which has impacted the market, including some of our larger
sites, driving the Group's number. However, we continue our medium term goal
of diversifying our audience sources with a particular focus on direct to
consumer. Good examples of our progress in this area are that we have
increased our newsletter subscribers, a very valuable audience, by 52% to over
15m subscribers and our permissioned Go.Compare subscribers have increased
double digit to 4m. We have also increased audience by scaling in Apple
News(10) which brought 10m users in the month of March 2023. We continue to
see Apple News as a diversified source of audience, in line with our strategy.
Social followers are also up +34% to over 180m (HY 2022: 135m), benefiting
from the addition of Who What Wear and up 2m since FY 2022.
Driving audience is a blend of art and science. The art is delivered by our
expert editorial teams who thrive in responding to audience demands for
relevant, useful and engaging content (both online and in print). The science
is brought by our ability to use data, analytics and artificial intelligence.
The combination allows us to reach high-intent audiences at scale, providing a
brand-safe qualified audience for advertisers and responding to eCommerce
demand.
Diversify and grow monetisation
The second strategic objective of the Group is to diversify and grow
monetisation; that is, to increase the revenue from our audiences. The
diversification of revenue streams enables the Group to continue to deliver
despite challenging market conditions. For example, in the period we benefited
from growing demand in our Wealth & Savings vertical, including our price
comparison business, whilst digital revenue and affiliates for products, along
with the wider market, were impacted by macroeconomic conditions. The Wealth
& Savings audience is the most valuable of the consumer audiences in the
Group and provides a favourable mix to our monetisation.
Growth in revenue is driven by a combination of a content-led approach to
increase audiences, with a focus on achieving market leadership positions
allowing premium pricing, as well as increasing revenue per user by adding new
routes of monetisation. In the period, the Women's Lifestyle portfolio was the
most valuable digital advertising audience per user of the Group. This is in
part as a result of the Who What Wear acquisition which brought in a strong
sales team who are helping to generate strong revenues both from the acquired
but also from the organic Women's Lifestyle and Homes audience in the US.
During the period, we continued the rollout of Eagle, our proprietary voucher
technology, which went live on Tom's Guide as the first site last year.
Tom's Guide vouchers are continuing to display strong results 9 months after
the deployment. We are in the process of rolling out this technology to all of
our main content sites and expect to be live on 12 sites by the end of the
year which we see as an important driver of future revenue growth.
Our key content verticals are at different levels of monetisation with newer
verticals such as Women's Lifestyle and Wealth representing the greatest
opportunities, both through audience growth and also increasing advertising
yields and adding new revenue streams.
The Platform Effect drives sustained strong operating margin
The Platform Effect is more than operating leverage and growing the bottom
line, it is about the multiplier impact of the organic and inorganic
capabilities that deliver unique value creation, in both revenue and profit.
Our financial results evidence our successful and diversified monetisation
model as well as our ability to deploy the Future operating model to drive
scalability and operating leverage. Despite the macroeconomic backdrop
impacting revenue as well as the wider inflationary pressures, the flexibility
of our cost base helped to deliver a robust adjusted operating profit margin
of 32%. This was achieved whilst continuing to invest for growth, notably with
some senior US sales hires in the half. To ensure we navigate the short-term
as well as invest for the long-term, we continue to invest in technology
across the portfolio and focus on increasing efficiency in centres of
excellence.
We believe our proprietary technology platform is a key source of competitive
advantage. The benefit of having a common platform translates into our ability
to leverage the benefit of continuous investment rapidly across our estate. We
now have a total of 51 sites on the Vanilla website platform (FY 2022: 52).
During the half, we further deployed our voucher code technology to nine
websites, allowing a new affiliate revenue stream on these sites. We also
continued to enrich our data audience platform Aperture and its activations to
produce high-value advertising segments and we invested in insight on content
writing with SmartPublishing using our proprietary AI-enabled tool.
Content is at the heart of our purpose and we continuously invest in content
creation to ensure we remain the trusted, authoritative expert for our
audiences. Editorial is our biggest team with over 1,300 editorial colleagues.
Quality, expert, intent-led content is also a source of operating leverage
with a significant percentage of our revenue from content being produced in
the prior periods.
Our centres of excellence reduce duplication and provide access to talent in
locations with a lower cost of living, delivering efficiency of spend and
agility in an ever-changing landscape. During the half, we have made New York
our US hub with the majority of our employees working remotely, driving
facilities cost savings. In the UK, we opened a new office in Cardiff which
now hosts over 200 employees, and leverages the proximity to graduate talent
in an affordable city location.
Efficient capital allocation
Whilst accelerating the execution of our strategy with value creating
acquisitions is a key part of our capital allocation, we recognise the
higher-interest rate environment and our own valuation. We have updated our
hurdle rate for acquisitions to reflect these factors and whilst this raises
the bar for value-creating M&A, the pipeline remains active with market
pricing starting to reflect the current environment. However, to the extent
that we are unable to execute on such transactions, we would look to deploy
our excess free cashflow in returning cash to shareholders.
We remain highly disciplined when it comes to acquisitions with 25 deals
reviewed for each transaction that we executed in the past 6 months, as we
rigorously ensure that each acquisition meets our investment objectives.
Shortlist
On 18 October 2022, we completed the acquisition of Shortlist.com, a
technology website, for £0.2m. We are deploying our tech stack to the website
to drive monetisation, whilst growing our online users and accelerating this
growth through our capabilities. Shortlist is now fully integrated into the
Group.
ActualTech
On 30 November 2022, the Group completed the acquisition of ActualTech, a
provider of content marketing solutions for B2B marketers, funded from the
Group's existing debt facilities for an initial enterprise value of $36m or
6.6x 2022 EBITDA pre-synergies . In addition, a further variable deferred
consideration up to a total value of $24m could be paid, subject to meeting
certain financial targets based on the 12 month period ending 31 December
2023. ActualTech specialises in webinars, white papers, syndication and
content marketing on owned platforms. The acquisition further diversifies the
Group by strengthening Future's position in the B2B vertical and provides
greater scale and reach in North America to further monetise its
highly-valuable B2B audience. In addition, the Group will be leveraging
ActualTech's webinar capabilities and its US expertise within the Group's
existing portfolio. The initial integration has been completed with the full
integration expected by the end of the earnout period in December 2023. In the
period, ActualTech has delivered strong revenue results creating operating
leverage.
Gardening Know How
On 7 February 2023, the Group completed the acquisition of Gardening Know How,
a US Homes website for an enterprise value of $17m or 6.3x 2022 EBITDA. The
nature of gardening means that content is very evergreen driving a strong
return on editorial investment. This acquisition strengthens our strategic
Homes vertical by increasing our position within Comscore and will benefit
from our operating model including our proprietary tech stack. The integration
is well-underway and performance is very promising at this early stage.
Execution underpinned by values
Future operates as a purpose-driven organisation creating value for all
stakeholders. Our strategy is 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.
We remain proud of and thankful to our colleagues for their hard work and
ongoing support in these continued challenging times.
Executive changes
Following the announcement on 22 February 2023, Jon Steinberg joined the Group
as CEO on 3 April 2023.
Outlook
● The flexibility and diversification of our business model continues
to allow us to navigate the tougher macroeconomic backdrop.
● As we look to the second half, we expect the first half trends to
continue; with challenging market conditions, impacting audience.
● Additionally, we are investing to support US growth opportunities.
● As a result, we expect full year performance to be towards the
bottom end of current market expectations.
● Longer-term, we are confident that our diversified strategy will
continue to deliver significant value for shareholders, with our investment in
new content verticals and capabilities underpinning our growth ambitions.
Financial summary
The financial summary is based primarily on a comparison of results for the
period ended 31 March 2023 with those for the period ended 31 March 2022.
Unless otherwise stated, change percentages relate to a comparison of these
two periods. Organic growth is defined as the like for like portfolio in the
period, including the impact of closures and new launches but excluding HY
2022 acquisitions which have not been acquired for a full financial year and
HY 2023 acquisitions, and at constant FX rates. Constant FX rates is defined
as the average rate for HY 2023.
HY 2023 HY 2022
£m £m
Revenue 404.7 404.3
Adjusted operating profit 130.3 134.5
Adjusted profit before tax 113.1 127.1
Operating profit 83.9 88.4
Profit before tax 66.4 81.0
Basic earnings per share (p) 46.9 52.5
Diluted earnings per share (p) 46.7 51.7
Adjusted basic earnings per share (p) 71.7 82.7
Adjusted diluted earnings per share (p) 71.2 81.3
( )
The Directors believe that adjusted results provide additional useful
information on the core operational performance of the Group, and review the
results of the Group on an adjusted basis internally. See the section below
for a reconciliation between adjusted and statutory results.
A reconciliation of adjusted operating profit to profit before tax is shown
below:
HY 2023 HY 2022
£m £m
Adjusted operating profit 130.3 134.5
Adjusted net finance costs (17.2) (7.4)
Adjusted profit before tax 113.1 127.1
Adjusting items:
Share-based payments (including social (7.0) (3.7)
security costs)
Acquisition and integration related costs (note 4) (3.2) (10.6)
Exceptional items (note 5) (5.9) (1.6)
Amortisation of acquired intangibles (30.3) (30.2)
Unwinding of discount on contingent consideration (0.3) -
Profit before tax 66.4 81.0
Revenue
Revenue HY 2023 HY 2022 YoY Var Organic
£m £m YoY Var
Advertising & other 87.7 77.7 +13% (22)%
Affiliates 39.0 42.3 (8)% (24)%
Magazines 40.1 34.4 +17% +3%
Total US 166.8 154.4 +8% (17)%
Advertising & other 44.3 42.1 +5% (2)%
Affiliates 94.5 96.5 (2)% (2)%
Magazines 99.1 111.3 (11)% (7)%
Total UK 237.9 249.9 (5)% (5)%
Total revenue 404.7 404.3 - (10)%
Group revenue was flat year-on-year in the period to £404.7m (HY 2022:
£404.3m), with the benefit of acquisitions and foreign exchange translation
offsetting organic decline (decline of (10)% at constant currency and (5)% at
actual currency). HY 2022 acquisitions which have not been acquired for a full
financial year and HY 2023 acquisitions contributed £20.3m to revenue in the
period and includes revenue from WhatCulture, Who What Wear, Shortlist,
ActualTech and Gardening Know How.
UK revenue declined by (5)% or £(12.0)m to £237.9m (HY 2022: £249.9m).
Total UK organic revenues declined (5)% with (2)% organic revenue decline in
Media and (7)% in Magazines. UK Media organic decline was driven by a (5)%
decline in digital advertising and other media increased by +8% driven by
strong events. The relatively stronger UK performance demonstrates how
leadership creates resilience, notably through a better video and direct
advertising mix. Affiliate revenue was also down (2)% benefiting from a high
mix of price comparison revenue which grew by +4%.
Performance was weaker in the US driven by the unfavourable mix (less
Magazines and no price comparison) offset by the benefit of acquisitions,
notably Who What Wear and ActualTech, driving reported revenue growth of +8%
or £12.4m to £166.8m (HY 2022: £154.4m). Organic growth was down (17)% with
(22)% decline in digital advertising and other Media and (24)% in affiliates,
offset by +3% growth in Magazines notably in subscriptions.
Revenue HY 2023 HY 2022 YoY Var Organic
£m £m YoY Var
Advertising & other media 132.0 119.8 +10% (15)%
Affiliates 133.5 138.8 (4)% (10)%
Total Media 265.5 258.6 +3% (12)%
Total Magazines 139.2 145.7 (4)% (5)%
Total revenue 404.7 404.3 - (10)%
Media revenue increased by £6.9m or +3% but declined organically by (12)% to
£265.5m (HY 2022: £258.6m).
Organic digital advertising revenue declined by (18)% despite improved
monetisation due to the impact of lower online audiences. Importantly, the
yield has remained very resilient as a result of the quality of our audience,
and a favourable mix with more direct advertising. This demonstrates the
Group's ability to deliver valuable audiences to advertisers. Other media
revenue increased +6% organically driven by a strong +16% organic growth in
events with key successful events such as Women in Music Awards and Home
Building and Renovating shows.
Organic affiliate revenue was down (10)%, with the growth in price comparison
and vouchers partially offsetting the decline in products. This performance
highlights the benefit of the strategy of diversification. In Affiliate
products, whilst we have seen an improvement in newer verticals such as
Fashion & Beauty and Wealth, we have been impacted by the macroeconomy
through lower demand as seen in the lower audience numbers. This decline was
particularly strong in the Consumer Technology vertical, correlating with the
performance of hardware manufacturers. In our Price Comparison business, we
have made further progress in the diversification of our Go.Compare revenue
with 35% of the revenue in our diversified growth verticals (outside of car
insurance), +3ppt year-on-year. We have had strong performance in home,
travel, and pet insurance.
Magazine revenue declined by £(6.5)m or (4)% to £139.2m (HY 2022: £145.7m).
Magazine organic revenue was down (5)% year-on-year, an improvement on the
secular decline rate we have been experiencing historically. Subscriptions
experienced a (5)% organic decline in the legacy portfolio as customers
unsubscribed from pandemic subscriptions. Subscriptions now represent 48% of
the Magazines revenue, providing a robust source of recurring revenue. The
rest of the magazine portfolio was down (4)% organically. This resilience was
driven by the strength of our brands which are highly specialist and touch
people's passions.
Revenue HY 2023 HY 2022 YoY Var Organic
£m £m YoY Var
Games, Entertainment & Technology (GETs) 135.6 156.0 (13)% (20)%
Lifestyle, Knowledge & News (LKN) 132.4 112.1 +18% (2)%
Wealth & Savings (W&S) 97.1 93.6 +4% +1%
B2B & other 39.6 42.6 (7)% (12)%
Total revenue 404.7 404.3 - (10)%
GETs revenue benefited from the acquisitions of WhatCulture and Shortlist. On
an organic basis, as previously mentioned, revenue was impacted by lower
online users and market challenging conditions notably in Consumer Technology.
LKN revenue benefited from the acquisition of Who What Wear and had a
resilient organic performance driven by a favourable mix of Magazines combined
with progress on monetisation in Media.
W&S organic revenue benefited from growth in the price comparison business
and US subscription business partially offset by decline in the UK
subscription business and overall digital advertising.
B2B and other revenue was impacted by market conditions.
Operating profit
Cost of sales has increased year-on-year driven by inflation, mostly in
magazines with increases to paper and printing costs due to high energy prices
as well as the inclusion of acquisitions and their respective costs. Other
costs have increased due to the inclusion of acquisitions and their respective
costs as well as inflationary pressures on salary and wages. These cost
increases (translating into a (1)ppt impact of the adjusted operating margin)
have been partially offset by cost saving initiatives around offices, staff
location and re-prioritisation of investment. As a result, the Group adjusted
operating profit margin has only declined by (1)ppt to 32% (HY 2022: 33%),
despite a (1)ppt headwind from adverse mix with lower revenue decline in lower
gross contribution Magazines business compared to Media business. This is a
testament of the strength of the platform and the cost agility of the Group,
even in the challenging macroeconomic environment. As a result, adjusted
operating profit decreased by £(4.2)m to £130.3m (HY 2022: £134.5m) with
organic profit performance partially offset by contributions from
acquisitions. Statutory operating profit decreased by £(4.5)m to £83.9m (HY
2022: £88.4m) and statutory operating margin decreased by (1)ppt to 21% (HY
2022: 22%) driven by the performance in adjusted operating profit, and
includes £5.3m of restructuring costs approaching completion.
Earnings per share
HY 2023 HY 2022
Basic earnings per share (p) 46.9 52.5
Adjusted basic earnings per share (p) 71.7 82.7
Diluted earnings per share (p) 46.7 51.7
Adjusted diluted basic earnings per share (p) 71.2 81.3
Basic earnings per share is calculated using the weighted average number of
ordinary shares in issue during the period of 120.1m (HY 2022: 120.5m).
Adjusted earnings per share is based on profit after taxation which is then
adjusted to exclude share-based payments (relating to equity-settled share
awards with vesting periods longer than 12 months) and associated social
security costs, acquisition and integration related costs, exceptional items,
amortisation of intangible assets arising on acquisitions, unwinding of
discount on contingent consideration, and any related tax effects. Adjusted
profit after tax was £86.1m (HY 2022: £99.6m).
Acquisition and integration related costs
Acquisition and integration related costs of £3.2m incurred in the period
reflect £1.2m of deal-related fees, £0.8m of restructuring costs related to
recent acquisitions and £2.0m net onerous property costs relating to recently
acquired properties, net of £0.8m released following settlement of a
provision for historic legal claims recognised on the Dennis opening balance
sheet (HY 2022: £1.7m relating to the Dennis acquisition and £8.9m to
onerous properties). Note 4 to the financial statements provides further
detail.
Exceptional items
Exceptional costs incurred in the period include £5.3m relating to
restructuring costs (HY 2022: £0.5m) and £0.6m relating to onerous
properties (HY 2022: £1.1m). Note 5 to the financial statements provides
further detail.
Other adjusting items
Amortisation of acquired intangibles of £30.3m (HY 2022: £30.2m) includes
amortisation arising from the in-year acquisitions of ActualTech and Gardening
Know How and the acquisition of Dennis in FY 2022.
Share-based payment expenses (relating to equity-settled share awards with
vesting periods longer than 12 months), together with associated social
security costs increased by £3.3m to £7.0m (HY 2022: £3.7m). 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
In November 2022, the Group secured a new facility of £400m with a syndicate
of banks and supported by a partial guarantee from UK Export Finance (UKEF),
with attractive terms. As at 31 March 2023 the Group total committed
facilities were £900m.
Net finance costs increased to £17.5m (HY 2022: £7.4m) which includes
external interest payable of £13.9m reflecting the utilisations of the
Group's debt facilities to fund the ActualTech and Gardening Know How
acquisitions, and higher interest rates; £2.0m in respect of the amortisation
of arrangement fees relating to the Group's bank facilities; and £0.3m
unwinding of discount on contingent consideration relating to the ActualTech
acquisition. A further £1.4m of interest was recognised in relation to lease
liabilities (offset by £0.1m of interest income on sublet properties).
Leverage at 31 March 2023 was 1.41 times, down from 1.48 times at 30 September
2022, demonstrating the Group's ability to continue to de-lever quickly.
A derivative interest rate swap for £150m was acquired in March 2023 in order
to hedge the Group's exposure to interest rate fluctuations. The swap is at an
interest rate of 3.72% and expires on 24 March 2026.
Taxation
The tax charge for the six months ended 31 March 2023 is based on the
statutory tax rate estimated on a full year basis being applied to the
statutory profit for the six months ended 31 March 2023. The Group adjusted
effective tax rate is 23.9% (HY 2022: 21.6%).
The Group's statutory tax rate is estimated to be 15.1% (HY 2022: 21.9%) with
the difference between the statutory tax rate and adjusted effective tax rate
attributable to the tax effect of share based payment charges which are
recognised in equity.
For FY 2023, the Group expects the adjusted effective tax rate to be 23.9%.
Balance sheet
Property, plant and equipment decreased by £15.5m to £37.5m in the period
(FY 2022: £53.0m) primarily reflecting the write-down of right-of-use assets
and leasehold improvements on onerous properties of £10.1m, primarily
attributable to property leases inherited via the acquisition of Dennis
(included within acquisition and integration related costs) and depreciation
of £4.8m, offset by capital expenditure of £6.2m.
Intangible assets increased by £56.4m to £1,659.4m (FY 2022: £1,715.8m)
mainly reflecting the in-year acquisitions of ActualTech and Gardening Know
How (£48.8m) and capitalisation of website development costs (£5.1m) offset
by amortisation (£37.1m) and the impact of FX (£(73.4)m).
Trade and other receivables decreased by £21.6m to £112.7m (FY 2022:
£134.3m) primarily driven by improved cash collection during the period
together with the impact of FX.
Trade and other payables inclusive of deferred income decreased by £22.9m to
£176.7m (FY 2022: £199.6m) primarily driven by the payment of the FY 2022
profit pool bonus in the period, a focus on timely payments as well as the
impact of FX. Provisions decreased by £13.8m, primarily due to payment of
£8.9m for settlement of the provision for historic legal claims recognised on
the Dennis opening balance sheet .
Cash flow and net debt
Net debt at 31 March 2023 was £390.9m (FY 2022: £423.6m, HY 2022: £388.7m)
reflecting the ActualTech and Gardening Know How acquisitions, offset by
strong cash generation.
During the period, there was a cash inflow from operations of £117.3m (FY
2022: £268.5m, HY 2022: £138.1m) reflecting strong cash generation. Adjusted
operating cash inflow was £136.2m (HY 2022: £144.0m). A reconciliation of
cash generated from operations to adjusted free cash flow is included below:
HY 2023 HY 2022
£m £m
Cash generated from operations 117.3 138.1
Cash flows related to acquisition and integration related costs 12.7 3.7
Cash flows related to exceptional items 8.9 3.5
Settlement of social security costs on share based payments¹ 0.4 1.8
Lease payments following adoption of IFRS 16 Leases (3.1) (3.1)
Adjusted operating cash inflow 136.2 144.0
Cash flows related to capital expenditure (6.2) (6.2)
Adjusted free cash flow 130.0 137.8
¹ Relating to equity-settled share awards with vesting periods longer than 12
months.
Other significant movements in cash flows include £6.2m (HY 2022: £6.2m) of
capital expenditure, acquisitions totalling £44.0m (HY 2022: £14.6m), net
repayment of bank loans and overdraft (net of arrangement fees) of £15.7m (HY
2022: net repayment of £388.9m), acquisition of own shares of £7.8m (HY
2022: £nil), lease payments of £3.1m (HY 2022: £3.1m) and the balance
reflecting the Group's strong cash generation. The Group paid a dividend in
the period of £4.1m (HY 2022: £3.4m). Foreign exchange and other movements
accounted for the balance of cash flows.
Adjusted free cash flow increased to £130.0m (HY 2022: £137.8m),
representing 100% of adjusted operating profit (HY 2022: 102%), reflecting the
ongoing efficient cash management by the Group.
Going concern
The Group has produced forecasts for the next 18 months from the balance sheet
date which demonstrates significant headroom both on total facilities and
covenants at all points during the period to 30 September 2024.
At the period end the Group had net current liabilities of £34.6m (FY 2022:
£115.3m). This is primarily driven by deferred income of £61.0m and the
nature of the Group's magazine business where the profile of cash receipts
from wholesalers is often ahead of 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 reduction in net current liabilities since
30 September 2022 is primarily due to the repayment of the term loan, with the
existing UKEF and RCF facilities all classed as non-current.
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 12 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 2023 results.
Condensed consolidated interim financial statements
Consolidated income statement
for the six months ended 31 March 2023 (unaudited)
6 months to 6 months to
31 March 31 March
2023 2022
Note
£m £m
Revenue 1,2 404.7 404.3
Net operating expenses 3 (320.8) (315.9)
Operating profit 83.9 88.4
Net finance costs 7 (17.5) (7.4)
Profit before tax 1 66.4 81.0
Tax charge 8 (10.0) (17.7)
Profit for the period attributable to 56.4 63.3
owners of the parent
Earnings per 15p Ordinary share
6 months to 6 months to
31 March 31 March
2023 2022
Note Pence
Pence
Basic earnings per share 10 46.9 52.5
Diluted earnings per share 10 46.7 51.7
Consolidated statement of comprehensive income
for the six months ended 31 March 2023 (unaudited)
6 months to 6 months to
31 March 31 March
2023 2022
£m £m
Profit for the period 56.4 63.3
Items that may be reclassified to the consolidated income statement
Currency translation differences (50.1) 8.9
Cash flow hedge reserve 1.4 -
Other comprehensive (expense)/income for the period (48.7) 8.9
Total comprehensive income for the period attributable to 7.7 72.2
owners of the parent
Consolidated statement of changes in equity
for the six months ended 31 March 2023 (unaudited)
Issued Share Other reserves Accumulated exchange differences Retained earnings
Note share premium account Merger Treasury reserve £m £m £m Total
capital £m reserve £m equity
£m £m £m
Balance at 1 October 18.1 197.0 581.9 (8.0) - 70.7 201.0 1,060.7
2022
Profit for the period - - - - - - 56.4 56.4
Currency translation differences - - - - (50.1) - (50.1)
Cash flow hedge reserve 16 - - - - 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
Share capital issued - - - - - - - -
Acquisition of own shares 16 - - - (7.8) - - - (7.8)
Share schemes
- Issue of treasury shares 16 - - - 3.7 - - (3.7) -
to employees
- Value of employees' services 6 - - - - - - 6.8 6.8
- Current tax on options - - - - - - (0.1) (0.1)
- Deferred tax on options - - - - - - (6.1) (6.1)
Dividends paid to shareholders - - - - - - (4.1) (4.1)
Balance at 31 March 18.1 197.0 581.9 (12.1) 1.4 20.6 250.2 1,057.1
2023
Balance at 1 October 2021 18.1 197.0 581.9 (7.6) - (10.1) 83.0 862.3
Profit for the period - - - - - - 63.3 63.3
Currency translation differences - - - - - 8.9 - 8.9
Other comprehensive income for the period - - - - - 8.9 - 8.9
Total comprehensive income for the period - - - - - 8.9 63.3 72.2
Share schemes
- Issue of treasury shares 16 - - - 6.4 - - (6.4) -
to employees
- Value of employees' services 6 - - - - - - 6.3 6.3
- Current tax on options - - - - - - 1.0 1.0
- Deferred tax on options - - - - - - (7.2) (7.2)
Dividends paid to shareholders - - - - - - (3.4) (3.4)
Balance at 31 March 2022 18.1 197.0 581.9 (1.2) - (1.2) 136.6 931.2
Consolidated balance sheet
as at 31 March 2023 (unaudited)
Note 31 March 2023 31 March 2022 30 September
£m £m 2022
£m
Assets
Non-current assets
Property, plant and equipment 37.5 52.6 53.0
Intangible assets - goodwill 11 1,047.3 940.5 1,069.6
Intangible assets - other 11 612.1 597.1 646.2
Financial asset - derivative 13 1.4 - -
Total non-current assets 1,698.3 1,590.2 1,768.8
Current assets
Inventories 1.8 1.2 1.2
Corporation tax recoverable 15.4 0.1 13.4
Deferred tax 3.8 - 5.1
Trade and other receivables 112.7 127.4 134.3
Cash and cash equivalents 30.8 25.0 29.2
Finance lease receivable 3.8 4.2 6.1
Total current assets 168.3 157.9 189.3
Total assets 1,866.6 1,748.1 1,958.1
Equity and liabilities
Equity
Issued share capital 15 18.1 18.1 18.1
Share premium account 197.0 197.0 197.0
Merger reserve 581.9 581.9 581.9
Treasury reserve (12.1) (1.2) (8.0)
Other reserves 16 1.4 - -
Accumulated exchange differences 20.6 (1.2) 70.7
Retained earnings 250.2 136.6 201.0
Total equity 1,057.1 931.2 1,060.7
Non-current liabilities
Financial liabilities - interest-bearing loans and borrowings 421.7 344.2 369.0
Lease liability due in more than one year 42.4 52.2 55.8
Deferred tax 122.4 100.4 131.7
Provisions 14 7.6 12.8 21.4
Deferred income 12.5 11.2 14.9
Total non-current liabilities 606.6 520.8 592.8
Current liabilities
Financial liabilities - interest-bearing loans and borrowings - 69.5 83.8
Trade and other payables 12 115.7 140.4 143.8
Deferred income 61.0 62.9 55.8
Corporation tax payable - 6.9 1.0
Lease liability due within one year 9.7 11.9 12.1
Deferred consideration 3.6 4.5 4.5
Contingent consideration 13,18 7.0 - -
Deferred tax 5.9 - 3.6
Total current liabilities 202.9 296.1 304.6
Total liabilities 809.5 816.9 897.4
Total equity and liabilities 1,866.6 1,748.1 1,958.1
Consolidated cash flow statement
for the six months ended 31 March 2023 (unaudited)
6 months to 6 months to
31 March 31 March
2023 2022
£m £m
Cash flows from operating activities
Cash generated from operations 117.3 138.1
Interest paid (9.0) (5.1)
Interest paid on lease liabilities (1.3) (0.4)
Tax paid (20.7) (14.4)
Net cash generated from operating activities 86.3 118.2
Cash flows from investing activities
Purchase of property, plant and equipment (1.1) (1.7)
Purchase of computer software and website development (5.1) (4.5)
Purchase of subsidiary undertakings, net of cash acquired (44.0) (14.6)
Net cash used in investing activities (50.2) (20.8)
Cash flows from financing activities
Acquisition of own shares for Employee Benefit Trust (7.8) -
Drawdown of bank loans 250.1 -
Repayment of bank loans (256.0) (385.7)
Repayment of overdraft (4.2) (3.1)
Bank arrangement fees (5.6) (0.1)
Repayment of principal element of lease liabilities (3.1) (3.1)
Dividends paid (4.1) (3.4)
Net cash paid from financing activities (30.7) (395.4)
Net increase/(decrease) in cash and cash equivalents 5.4 (298.0)
Cash and cash equivalents at beginning of period 29.2 324.3
Exchange adjustments (3.8) (1.3)
Cash and cash equivalents at end of period 30.8 25.0
Notes to the consolidated cash flow statement
for the six months ended 31 March 2023 (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 2022
2023 £m
£m
Profit for the period 56.4 63.3
Adjustments for:
Depreciation 4.8 4.6
Impairment charge 2.4 6.3
Amortisation of intangible assets 37.1 36.3
Share schemes
- Value of employees' services 6.8 6.3
Finance costs 17.5 7.4
Tax charge 10.0 17.7
Cash generated before changes in working capital and 135.0 141.9
provisions
Movement in provisions (12.5) 1.3
Increase in inventories (0.6) (0.1)
Decrease/(increase) in trade and other receivables 17.2 (6.2)
(Decrease)/increase in trade and other payables (21.8) 1.2
Cash generated from operations 117.3 138.1
B. Analysis of net debt
30 September Cash flows On Other non-cash changes Exchange 31 March
2022 £m acquisition £m movements 2023
£m £m £m £m
Cash and cash equivalents 29.2 1.3 4.1 - (3.8) 30.8
Debt due within one year (83.8) 83.7 - 0.1 - -
Debt due after more than one year (369.0) (68.0) - (2.1) 17.4 (421.7)
Net debt (423.6) 17.0 4.1 (2.0) 13.6 (390.9)
C. Reconciliation of movement in net debt
6 months to 6 months to
31 March 31 March
2023 2022
£m £m
Net debt at start of period (423.6) (176.3)
Increase/(decrease) in cash and cash equivalents 5.4 (298.0)
Net movement in borrowings 15.7 90.3
Other non-cash changes (2.0) (1.3)
Exchange movements 13.6 (3.4)
Net debt at end of period (390.9) (388.7)
Basis of preparation
The condensed consolidated interim financial statements for the six-month
period ended 31 March 2023 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 2022.
This unaudited condensed consolidated interim financial information for the
six months ended 31 March 2023 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 for the year ended 30 September
2022.
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 2022 the
following amendments to existing standards have been applied where applicable:
- amendment to IAS 1 Amendments regarding the classification of
liabilities and 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 16 Amendments prohibiting a company from deducting from the
cost of property, plant and equipment amounts received from selling items
produced while the company is preparing the asset for its intended use;
- IAS 37 Amendments regarding the costs to include when assessing
whether a contract is onerous;
- IFRS 3 Amendments updating a reference to the Conceptual
Framework;
- IFRS 9 Amendments relating to the fees in the '10 per cent' test
for derecognition of financial liabilities;
- IFRS 16 Amendments to clarify how a seller-lessee subsequently
measures sale and leaseback transactions; and
- Annual Improvements to IFRS Standards 2018-2020 Cycle.
The Group has entered into an interest rate swap in the period, with the hedge
accounting requirements of IFRS 9 Financial instruments being applied. The
effective portion of the derivative is recognised in other comprehensive
income and reclassified to profit or loss when the qualifying asset, being the
Group's borrowings, impacts profit or loss.
The accounting policies adopted, methods of computation and presentation are
otherwise consistent with those set out in the Group's statutory accounts for
the financial year ended 30 September 2022.
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 critical accounting judgments and other key sources of estimation
uncertainty remain the same as those set out in the Group's Consolidated
Financial Statements for the year ended 30 September 2022.
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.
During the period the Group has introduced a new Alternative Performance
Measure ('APM') - Acquisition and integration related costs. Acquisitions are
a key part of the Group's strategy and a material amount of these costs are
typically incurred, however the timing and scale will vary year on year.
Integration costs will also vary depending on the scale and complexity of the
acquisition and may cross financial years. Splitting these costs out from the
broader category of exceptional items is intended to allow a user of the
financial statements to assess the impact of these activities on our results.
Costs which were included as exceptional in the comparative period have been
included within acquisition and integration related costs on a consistent
basis with the current period.
Adjustments are made in respect of:
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.
Acquisition and integration related costs - although acquisitions are a key
part of the Group's strategy the Group adjusts for costs relating to the
completion and subsequent integration of acquisitions, initiated within 12
months of the acquisition 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 acquisition 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
underlying trading of the Group so as to assist the user of the financial
statements to better understand the results 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.
Unwinding of discount on contingent consideration - the Group excludes
unwinding of the discount on 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.
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, acquisition
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, unwinding of discount
on contingent consideration and any related tax effects, 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 operating profit Operating profit Adjusted operating profit represents earnings 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,
acquisition 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 and defined in the commentary.
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, acquisition and integration related costs, exceptional
items, unwinding of discount on contingent consideration, and any related tax
effects
Adjusting items are shown in the table below and defined in the commentary.
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.
Adjusted operating cash flow Operating cash flow Adjusted operating cash flow represents cash generated from operations
adjusted to exclude cash flows relating to acquisition 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.
A reconciliation of adjusted operating profit to profit before tax is shown
below:
6 months to 6 months to
31 March 31 March
2023 2022
£m £m
Adjusted operating profit 130.3 134.5
Adjusted net finance costs (17.2) (7.4)
Adjusted profit before tax 113.1 127.1
Adjusting items:
Share-based payments (including social (7.0) (3.7)
security costs)
Acquisition and integration related costs (note 4) (3.2) (10.6)
Exceptional items (note 5) (5.9) (1.6)
Amortisation of acquired intangibles (30.3) (30.2)
Unwinding of discount on contingent consideration (0.3) -
Profit before tax 66.4 81.0
A reconciliation of cash generated from operations to adjusted free cash flow
is shown below:
6 months to 6 months to
31 March 31 March
2023 2022
£m £m
Cash generated from operations 117.3 138.1
Cash flows related to acquisition and integration related costs 12.7 3.7
Cash flows related to exceptional items 8.9 3.5
Settlement of social security costs on share based payments¹ 0.4 1.8
Lease payments (3.1) (3.1)
Adjusted operating cash inflow 136.2 144.0
Cash flows related to capital expenditure (6.2) (6.2)
Adjusted free cash flow 130.0 137.8
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 6 months to
31 March 31 March
2023 2022
£m £m
Total revenue 404.7 404.3
Revenue from HY 2023 and HY 2022 acquisitions which have not been acquired for (20.3) -
a full financial year
HY 2023 organic revenue 384.4 404.3
Impact of FX at constant rates (0.5) 20.5
Organic revenue at constant currency 383.9 424.8
In line with Group policy, in determining organic revenue for the 6 months to
31 March 2023 acquisitions which have not been acquired for a full financial
year in either the current or prior period have been excluded. As such, and
for the purposes of providing comparability period-on-period, the
reconciliation of organic revenue for the 6 months to 31 March 2022 has been
presented based on this definition.
Revenue from HY 2023 and HY 2022 acquisitions which have not been acquired for
a full financial year includes revenues from the WhatCulture, Who What Wear,
Shortlist, ActualTech and Gardening Know How acquisitions.
Notes to the financial information
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. 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.
(a) Reportable segment
(i) Segment revenue
Sub-segment 6 months to Sub-segment 6 months to
31 March 31 March
2023 2022
£m £m
Media Magazines Total Media Magazines Total
£m £m £m £m £m £m
Segment:
UK 138.8 99.1 237.9 138.6 111.3 249.9
US 126.7 40.1 166.8 120.0 34.4 154.4
Total 265.5 139.2 404.7 258.6 145.7 404.3
Transactions between segments are carried out at arm's length.
(ii) Segment adjusted operating profit
6 months to 6 months to
31 March 31 March
2023 2022
£m £m
Adjusted Intra-group Adjusted Adjusted Intra-group Adjusted
operating adjustments operating profit operating adjustments operating profit
profit prior to intra-group adjustments £m £m profit prior to intra-group adjustments £m £m
£m £m
UK 43.7 42.5 86.2 52.2 40.0 92.2
US 86.6 (42.5) 44.1 82.3 (40.0) 42.3
Total 130.3 - 130.3 134.5 - 134.5
A reconciliation of total segment adjusted operating profit to profit before
tax is provided as follows:
6 months to 6 months to
31 March 31 March
2023 2022
£m £m
Adjusted operating profit 130.3 134.5
Adjusted net finance costs (note 7) (17.2) (7.4)
Adjusted profit before tax 113.1 127.1
Share-based payments (including social security costs) (7.0) (3.7)
Amortisation of acquired intangibles (30.3) (30.2)
Unwinding of discount on contingent consideration (0.3) -
Acquisition and integration related costs (note 4) (3.2) (10.6)
Exceptional items (note 5) (5.9) (1.6)
Profit before tax 66.4 81.0
2. Revenue
The table below disaggregates revenue according to the timing of satisfaction
of performance obligations:
6 months to 6 months to
31 March 31 March
2023 2022
£m £m
Over Point in Total Over Point in Total
time time revenue time time revenue
£m £m £m £m £m £m
Total revenue 8.0 396.7 404.7 7.6 396.7 404.3
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 2022
31 March £m
2023
£m
Cost of sales (209.3) (187.2)
Distribution expenses (21.2) (20.7)
Share-based payments (including social security costs) (7.0) (3.7)
Acquisition and integration related costs (note 4) (3.2) (10.6)
Exceptional items (note 5) (5.9) (1.6)
Depreciation (4.8) (4.6)
Amortisation (37.1) (36.3)
Other administration expenses (32.3) (51.2)
Total (320.8) (315.9)
4. Acquisition and integration related costs
6 months to 6 months to
31 March 31 March
2023 2022
£m £m
Acquisition related costs 1.2 1.7
Onerous property costs 2.0 8.9
Total charge 3.2 10.6
Acquisition and integration related costs of £3.2m incurred in the period
reflect £1.2m of deal-related fees, £0.8m of restructuring costs related to
recent 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 (HY 2022:
£1.7m relating to the Dennis acquisition and £8.9m to acquired onerous
properties).
Further details in respect of the acquisitions are shown in note 18.
5. Exceptional items
6 months to 6 months to
31 March 31 March
2023 2022
£m £m
Restructuring costs 5.3 0.5
Onerous property costs 0.6 1.1
Total charge 5.9 1.6
Exceptional costs incurred in the period include £5.3m relating to
restructuring costs (HY 2022: £0.5m) and £0.6m relating to onerous
properties (HY 2022: £1.1m).
6. Employee costs
6 months to 6 months to
31 March 31 March
2023 2022
£m £m
Wages and salaries 84.5 84.7
Social security costs 8.1 4.9
Other pension costs 2.7 2.6
Share schemes
- Value of employees' services 6.8 6.3
Total employee costs 102.1 98.5
Wages and salaries in the table above include the all-employee profit pool
bonus in the comparative 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 the Monte Carlo and Black-Scholes
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
2023 2022
£m £m
Salaries and other short-term employee benefits 1.0 1.7
Share schemes
- Value of employees' services 1.5 1.3
Total employee costs 2.5 3.0
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
2023 2022
£m £m
Interest payable on interest-bearing loans and borrowings (13.9) (5.2)
Amortisation of bank loan arrangement fees (2.0) (1.2)
Interest payable on lease liabilities (1.4) (1.0)
Adjusted finance costs (17.3) (7.4)
Unwinding of discount on contingent consideration (0.3) -
Total reported finance costs (17.6) -
Interest receivable on lease liabilities 0.1 -
Net finance costs (17.5) (7.4)
On 23 November 2022, the Group further extended its committed debt facilities
with a 5 year, £400m term facility partially guaranteed by UK Export Finance.
The facility, maturing November 2027, has a 12 month availability period and
amortises from year 3. It was secured at competitive market rates, on
substantially similar terms to, and with the same covenants as, the Groups
£500m Revolving Credit Facility ('RCF') which expires in June 2025 and has a
1 year extension option at lender consent. On signing, the first £160m was
utilised to prepay the Groups previous Term Loan maturing 31 December 2023.
8. Tax on profit
The tax charge for the six months ended 31 March 2023 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 2023. The Group's adjusted
effective tax rate is 23.9% (HY 2022: 21.6%).
The Group's statutory effective tax rate is 15.1% (HY 2022: 21.9%) with the
difference between the statutory tax rate and adjusted effective tax rate
attributable to the tax effect of share based payment charges which are
recognised in equity.
Inclusive of this charge, the statutory effective tax rate is 24.4% (HY 2022:
29.5%).
9. Dividends
Equity dividends 6 months to 6 months to
31 March 31 March
2023 2022
Number of shares in issue at end of period (million) 120.9 120.8
Dividends paid and payable in period (pence per share) 3.4 2.8
Dividends paid in period (£m) (4.1) (3.4)
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 2022 was paid on 14
February 2023. The Board has not proposed a dividend for the six months ended
31 March 2023.
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 remove the effect of share based payments,
acquisition and integration related costs (note 4), exceptional items (note
5), amortisation of intangible assets arising on business combinations,
unwinding of discount on contingent consideration, and any related tax effects
from the calculation.
6 months to 6 months to
31 March 31 March
2023 2022
Adjustments to profit after tax:
Profit after tax (£m) 56.4 63.3
Share-based payments (including social security costs) (£m) 7.0 3.7
Acquisition and integration related costs (£m) 3.2 10.6
Exceptional items (£m) 5.9 1.6
Amortisation of intangible assets arising on acquisitions (£m) 30.3 30.2
Unwinding of discount on contingent consideration (£m) 0.3 -
Tax effect of the above adjustments (£m) (17.0) (9.8)
Adjusted profit after tax (£m) 86.1 99.6
Weighted average number of shares in issue during the period:
- Basic 120,146,502 120,504,929
- Dilutive effect of share options 714,468 1,939,825
- Diluted 120,860,970 122,444,754
Basic earnings per share (in pence) 46.9 52.5
Adjusted basic earnings per share (in pence) 71.7 82.7
Diluted earnings per share (in pence) 46.7 51.7
Adjusted diluted earnings per share (in pence) 71.2 81.3
The adjustments to profit after tax have the following effect:
Basic earnings per share (pence) 46.9 52.5
Share-based payments (including social security costs) (pence) 5.8 3.1
Acquisition and integration related costs (pence) 2.7 8.8
Exceptional items (pence) 4.9 1.3
Amortisation of intangible assets arising on acquisitions (pence) 25.2 25.1
Unwinding of discount on contingent consideration (pence) 0.2 -
Tax effect of the above adjustments (pence) (14.0) (8.1)
Adjusted basic earnings per share (pence) 71.7 82.7
Diluted earnings per share (pence) 46.7 51.7
Share-based payments (including social security costs) (pence) 5.8 3.0
Acquisition and integration related costs (pence) 2.6 8.7
Exceptional items (pence) 4.9 1.3
Amortisation of intangible assets arising on acquisitions (pence) 25.1 24.7
Unwinding of discount on contingent consideration (pence) 0.2 -
Tax effect of the above adjustments (pence) (14.1) (8.1)
Adjusted diluted earnings per share (pence) 71.2 81.3
11. Intangible assets
Goodwill Publishing rights Brands Customer relationships Subscribers Other acquired Other Total
£m £m £m £m £m intangibles £m £m
£m
Cost
At 1 October 2021 951.2 90.4 349.7 54.5 15.2 42.6 46.0 1,549.6
Additions through business combinations 302.6 - 128.4 - 62.0 19.1 1.7 513.8
Other additions - - - - - - 9.0 9.0
Exchange adjustments 86.4 0.5 23.5 3.3 9.2 4.7 2.5 130.1
At 30 September 2022 1,340.2 90.9 501.6 57.8 86.4 66.4 59.2 2,202.5
Additions through business combinations 29.1 - 10.5 7.4 - 2.0 - 49.0
Other additions - - - - - - 5.1 5.1
Exchange adjustments (56.2) (0.3) (17.5) (2.0) (5.5) (3.8) (1.8) (87.1)
At 31 March 2023 1,313.1 90.6 494.6 63.2 80.9 64.6 62.5 2,169.5
Accumulated amortisation and impairment
At 1 October 2021 (263.0) (22.0) (31.4) (13.6) (5.7) (27.1) (32.1) (394.9)
Charge for the period - (7.5) (27.4) (7.8) (9.4) (6.2) (13.0) (71.3)
Exchange adjustments (7.6) (0.4) (4.3) (1.3) (2.0) (2.8) (2.1) (20.5)
At 30 September 2022 (270.6) (29.9) (63.1) (22.7) (17.1) (36.1) (47.2) (486.7)
Charge for the period - (3.4) (14.4) (4.3) (4.9) (3.3) (6.8) (37.1)
Exchange adjustments 4.8 0.3 3.3 0.9 1.4 1.5 1.5 13.7
At 31 March 2023 (265.8) (33.0) (74.2) (26.1) (20.6) (37.9) (52.5) (510.1)
Net book value at 31 March 2023 1,047.3 57.6 420.4 37.1 60.3 26.7 10.0 1,659.4
Net book value at 30 September 2022 1,069.6 61.0 438.5 35.1 69.3 30.3 12.0 1,715.8
Useful economic lives 5-15 3-20 years 8-10 7-11 3-15 2
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.
Further details regarding the intangible assets acquired during the period
through business combinations are set out in note 18.
Other intangibles 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
2023 2022
£m £m
Trade payables 21.6 28.8
Other taxation and social security 5.4 5.1
Other payables 11.5 7.2
Accruals 77.2 102.7
Total 115.7 143.8
13. Financial instruments
The following table presents the Group's financial assets and liabilities that
are measured at fair value at 31 March 2023:
31 March 2023 30 September 2022
Level 2 Level 3 Level 2 Level 3
Fair value Fair value Fair value Fair value
£m £m £m £m
Assets
Financial asset - derivative 1.4 - - -
Liabilities
Contingent consideration - 7.0 - -
Total 1.4 7.0 - -
A derivative interest rate swap for £150m was acquired in March 2023 in order
to hedge the Group's exposure to interest rate fluctuations. The swap is at an
interest rate of 3.72% and expires on 24 March 2026. The swap has been valued
based on the present value of the estimated future cash flows based on
observable yield curves. An asset of £1.4m has been recognised on the balance
sheet at 31 March 2023 with a corresponding increase in the cash flow hedge
reserve (see note 16).
The contingent consideration of £7.0m (30 September 2022: £nil) relates to
the acquisition of ActualTech LLC ("ActualTech") (see note 18 for further
details).
The ActualTech contingent consideration has been valued using a scenario-based
approach drawing from internal projections and forecasts. The outcome is then
discounted to reflect the market risk related to contingent consideration and
underlying achievement of the gross profit target. The discount rate of 13%
was determined using a Capital Asset Pricing Model (CAPM) approach.
The main level 3 inputs used in valuing the contingent consideration are gross
profit and the discount rate, as shown in the table below:
Assumption ActualTech, LLC
Discount rate 13%
Gross profit $10.1m - $15.1m
The table below sets out the sensitivity of level 3 inputs to a 10% change in
the assumptions, which is considered to be a reasonably possible alternative
assumption:
Assumption Increase/(decrease) Increase/(decrease) in liability
£m
Discount rate 10% (0.1)
Discount rate (10)% 0.1
Gross profit 10% 3.1
Gross profit (10)% (3.7)
There were no transfers between levels in the current or prior period.
14. Provisions
31 March 30 September
2023 2022
£m £m
Property 6.8 9.1
Other 0.8 12.3
Total 7.6 21.4
The provision for property 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 three years. The
reduction in other provisions is primarily due to payment of £8.9m for
settlement of the provision for historic legal claims recognised on the Dennis
opening balance sheet.
15. Issued share capital
During the period no shares were issued by the Company pursuant to share
scheme exercises throughout the period (31 March 2022: 165,891 Ordinary shares
with a nominal value of £24,884). 2,095 Ordinary shares were issued under the
Share Incentive Plan for a combined total cash commitment of £nil.
As at 31 March 2023 there were 120,858,025 Ordinary shares in issue (31 March
2022: 120,791,225; 30 September 2022: 120,855,930).
16. Reserves
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 period 233,587 (31 March 2022: 365,505) of the shares held by the
EBT were used to satisfy the vesting of share options and 625,000 (31 March
2022: 22,216) shares were purchased to fund the future vesting of share
options at a total value of £7.8m.
Merger reserve
During the current and comparative period there was no movement on the merger
reserve.
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.
Other reserves
Other reserves comprises the cash flow hedge reserve, as the Group entered
into an interest rate swap in March 2023, 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.
17. Contingent liabilities
There were no material contingent assets or liabilities as at 31 March 2023
(31 March 2022: £nil).
18. Acquisitions
Acquisition of Shortlist
On 18 October 2022, Future completed the acquisition of ShortList Media
Limited (trading as Shortlist.com), a technology website, for consideration of
£0.2m.
Acquisition of ActualTech LLC
On 30 November 2022 the Group acquired ActualTech LLC, a provider of content
marketing solutions for B2B marketers, for initial cash consideration of
£32.2m. In addition, a further variable deferred consideration up to a total
value of $24 million could be paid, subject to meeting certain financial
targets based on the 12 month period ending 31 December 2023. The table below
includes £6.9m ($8.3m) as contingent consideration, which represents its fair
value at the date of acquisition. At the reporting date, the fair value of the
contingent consideration had increased to £7.0m ($8.7m) due to the impact of
discounting. 100% of the voting equity interest was acquired.
The impact of the acquisition on the consolidated balance sheet was:
Fair value
£m
Intangible assets
- Brand 3.4
- Customer relationships 7.4
- Database 0.3
- Software 0.5
Cash and cash equivalents 3.3
Trade and other receivables 1.4
Trade and other payables (0.6)
Net assets acquired 15.7
Goodwill 23.4
39.1
Consideration:
Cash 32.2
Contingent consideration 6.9
Total consideration 39.1
ActualTech specialises in webinars, white papers, syndication and content
marketing on owned platforms. The acquisition further diversifies the Group by
strengthening its position in the B2B vertical and provides greater scale and
reach in North America to further monetise its highly-valuable B2B audience.
In addition, the Group will be leveraging ActualTech's webinar capabilities
and its US expertise within the Group's existing portfolio.
Goodwill is attributable to the opportunities associated with future returns
from new customer relationships. The intangibles recognised, including
goodwill, are expected to be deductible for tax purposes.
Included within the Group's results for the period are revenues of £4.5m and
a profit before tax of £1.6m from ActualTech (excluding acquired intangible
amortisation).
If the acquisition had been completed on the first day of the financial year,
it would have contributed £6.6m of revenue and a profit before tax of £2.4m
(excluding acquired intangible amortisation) during the period.
Gross trade receivables were £1.4m on acquisition, of which £1.4m were
expected to be recovered.
Acquisition of Gardening Know How
On 7 February 2023, the Group acquired Gardening Know How, a specialist
interest site for gardening based in the US, for total consideration of
£14.8m. The Gardening Know How acquisition brings additional expertise to the
Group, strengthening the Group's strategic Homes vertical. 100% of the voting
equity interest was acquired.
The provisional impact of the acquisition on the consolidated balance sheet
was:
Provisional
fair value
£m
Intangible assets
- Brand 7.1
- Content 1.2
Cash and cash equivalents 0.8
Trade and other receivables 0.3
Trade and other payables (0.1)
Net assets acquired 9.3
Goodwill 5.5
14.8
Consideration:
Cash 14.8
Total consideration 14.8
Goodwill is attributable to future premium advertising relationships and new
evergreen content. The intangibles recognised, including goodwill, are
expected to be deductible for tax purposes.
Included within the Group's results for the period are revenues of £0.4m and
a profit before tax of £0.1m from Gardening Know How (excluding acquired
intangible amortisation).
If the acquisition had been completed on the first day of the financial year,
it would have contributed £1.2m of revenue and a profit before tax of £0.3m
(excluding acquired intangible amortisation) during the period.
Gross trade receivables were £0.3m on acquisition, of which £0.3m were
expected to be recovered.
The fair values included for the Gardening Know How acquisition are described
as 'provisional' as the acquisition occurred within one month of the balance
sheet date and so further time is required in order to fully ascertain the
fair value of assets and liabilities acquired, which will be completed upon
finalisation of the completion accounts.
19. Post balance sheet events
Interest rate swap
Following the period end, an additional £50m interest rate swap was entered
into with Lloyds Bank, to further hedge the Group's exposure to fluctuations
in interest rates. The swap is at an interest rate of 4.03% and expires on 3
April 2026, giving the Group a blended fixed rate of 3.83% and a 47:53
fixed:floating ratio.
Disposal of titles
On 28 April the Group disposed of The Shooting Times & Country, Sporting
Gun, www.shootinguk.co.uk and The Shooting Show for total consideration of
£0.2m, of which £0.1m is deferred for 12 months.
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
Hugo Drayton
Senior Independent Non-Executive
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
17 May 2023
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.
INDEPENDENT REVIEW REPORT TO FUTURE PLC
Conclusion
We have been engaged by the company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 31
March 2023 which comprises the consolidated income statement, consolidated
balance sheet, the consolidated statement of changes in equity, the
consolidated cash flow statement and related notes 1 to 19. We have read the
other information contained in the half-yearly financial report and considered
whether it contains any apparent misstatements or material inconsistencies
with the information in the condensed set of financial statements.
Based on our review, nothing has come to our attention that causes us to
believe that the
condensed set of financial statements in the half-yearly financial report for
the six months
ended 31 March 2023 is not prepared, in all material respects, in accordance
with United
Kingdom adopted International Accounting Standard 34 and the Disclosure
Guidance and
Transparency Rules of the United Kingdom's Financial Conduct Authority.
Basis for Conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410 "Review of Interim Financial Information
Performed by the Independent Auditor of the Entity" issued by the Financial
Reporting Council for use in the United Kingdom (ISRE (UK) 2410). A review of
interim financial information consists of making inquiries, primarily of
persons responsible for financial and accounting matters, and applying
analytical and other review procedures. A review is substantially less in
scope than an audit conducted in accordance with International Standards on
Auditing (UK) and consequently does not enable us to obtain assurance that we
would become aware of all significant matters that might be identified in an
audit. Accordingly, we do not express an audit opinion.
As disclosed in the Basis of preparation note, the annual financial statements
of the Group will be prepared in accordance with United Kingdom adopted
international accounting standards. The condensed set of financial statements
included in this half-yearly financial report has been prepared in accordance
with United Kingdom adopted International Accounting Standard 34, "Interim
Financial Reporting".
Conclusion Relating to Going Concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for Conclusion section of this report,
nothing has come to our attention to suggest that the directors have
inappropriately adopted the going concern basis of accounting or that the
directors have identified material uncertainties relating to going concern
that are not appropriately disclosed.
This Conclusion is based on the review procedures performed in accordance with
ISRE (UK)
2410; however future events or conditions may cause the entity to cease to
continue as a going concern.
Responsibilities of the directors
The directors are responsible for preparing the half-yearly financial report
in accordance with the Disclosure Guidance and Transparency Rules of the
United Kingdom's Financial Conduct Authority.
In preparing the half-yearly financial report, the directors are responsible
for assessing the
group's ability to continue as a going concern, disclosing as applicable,
matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the company or to
cease operations, or have no realistic alternative but to do so.
Auditor's Responsibilities for the review of the financial information
In reviewing the half-yearly financial report, we are responsible for
expressing to the company a conclusion on the condensed set of financial
statements in the half-yearly financial report. Our Conclusion, including our
Conclusion Relating to Going Concern, are based on procedures that are less
extensive than audit procedures, as described in the Basis for Conclusion
paragraph of this report.
Use of our report
This report is made solely to the company in accordance with International
Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim
Financial Information Performed by the Independent Auditor of the Entity"
issued by the Financial Reporting Council. Our work has been undertaken so
that we might state to the company those matters we are required to state to
it in an independent review report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility to anyone
other than the company, for our review work, for this report, or for the
conclusions we have formed.
Deloitte LLP
Statutory Auditor
Reading, United Kingdom
17 May 2023
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